1 00:00:02,800 --> 00:00:05,120 Speaker 1: This is Coast to Coast. I'm Carol Masser and I'm 2 00:00:05,160 --> 00:00:07,640 Speaker 1: Corey Johnson. We're here every day bringing the latest news 3 00:00:07,680 --> 00:00:09,680 Speaker 1: in the world of business and finance and the most 4 00:00:09,760 --> 00:00:13,480 Speaker 1: interesting stories in global technology from Silicon Valley and beyond, 5 00:00:13,600 --> 00:00:16,959 Speaker 1: powered by our more than dred journalists and analysts in 6 00:00:16,960 --> 00:00:19,560 Speaker 1: more than one twenty countries. You can download Coast to 7 00:00:19,600 --> 00:00:22,079 Speaker 1: Coast on iTunes, sound clud, and Bloomberg dot com. You 8 00:00:22,079 --> 00:00:24,000 Speaker 1: can also listen to our radio show weekdays at two 9 00:00:24,040 --> 00:00:32,560 Speaker 1: o'clock Eastern only. I'm Bloomberg Radio. How do you like me? Now, 10 00:00:32,640 --> 00:00:35,280 Speaker 1: that's an interesting question here Kevin. We've heard him in 11 00:00:35,280 --> 00:00:37,400 Speaker 1: the last hour over the discussional attack bill and a 12 00:00:37,640 --> 00:00:39,839 Speaker 1: lack of popularity for this bill. It's falling popular with 13 00:00:39,920 --> 00:00:42,040 Speaker 1: more people learn about it. We're comar joints in, the 14 00:00:42,120 --> 00:00:46,560 Speaker 1: leader of PWC's Washington National Tax Service, with an analysis 15 00:00:46,640 --> 00:00:49,760 Speaker 1: of this tax plan that has now passed both Houses 16 00:00:49,760 --> 00:00:53,400 Speaker 1: of Congress. UM and UH. When we look at this bill, UH, 17 00:00:53,560 --> 00:00:55,480 Speaker 1: you know, we see the popular I don't want get 18 00:00:55,480 --> 00:00:58,400 Speaker 1: too involved in the popularity discussion because I'd rather find 19 00:00:58,400 --> 00:00:59,960 Speaker 1: out what's in the bill and people react to it 20 00:01:00,000 --> 00:01:03,800 Speaker 1: how they'd like. UM. What's in this bill that is 21 00:01:04,240 --> 00:01:07,760 Speaker 1: you think least getting the least amount of attention, you know, 22 00:01:07,800 --> 00:01:10,920 Speaker 1: so I've been surprised at how little attention has been 23 00:01:10,920 --> 00:01:14,920 Speaker 1: given to the fact that of all individual taxpayers are 24 00:01:14,920 --> 00:01:18,199 Speaker 1: actually going to get a tax cut because of this bill. 25 00:01:18,319 --> 00:01:20,559 Speaker 1: You would not know that from just looking at again, 26 00:01:20,600 --> 00:01:23,200 Speaker 1: not to getting the polls, but the popularity of the 27 00:01:23,240 --> 00:01:25,920 Speaker 1: proposal and the people who will end up getting a benefit. 28 00:01:25,959 --> 00:01:30,679 Speaker 1: There's clearly a disconnect between the two people, or any 29 00:01:30,760 --> 00:01:35,120 Speaker 1: percent of the explained to the number all taxpayers. So 30 00:01:35,240 --> 00:01:37,400 Speaker 1: you know, whether if you're married filing jointly, you count 31 00:01:37,440 --> 00:01:41,840 Speaker 1: as one taxpayer for purposes of the calculation. Um. But 32 00:01:42,319 --> 00:01:44,880 Speaker 1: you know, this actually speaks to a larger issue that 33 00:01:45,000 --> 00:01:47,440 Speaker 1: Republicans are going to have to grapple with over the 34 00:01:47,440 --> 00:01:49,320 Speaker 1: course of the next year, certainly between now in the 35 00:01:49,320 --> 00:01:52,279 Speaker 1: midterm election, which is how to go about convincing people 36 00:01:52,720 --> 00:01:54,280 Speaker 1: that this thing that at least right now and they 37 00:01:54,320 --> 00:01:57,480 Speaker 1: think that they don't like, is actually bestowing some benefit 38 00:01:57,520 --> 00:01:59,240 Speaker 1: upon them, and that they should be rewarded at the 39 00:01:59,280 --> 00:02:03,240 Speaker 1: polls come next November, you know, by returning a Republican 40 00:02:03,280 --> 00:02:06,320 Speaker 1: House and a Republican Senator. If that's what they choose 41 00:02:06,360 --> 00:02:08,760 Speaker 1: to do, and so you know that is certainly gonna 42 00:02:08,760 --> 00:02:10,760 Speaker 1: be a challenge that you would expect that this issue 43 00:02:10,840 --> 00:02:14,000 Speaker 1: is going to be front and center m in the campaign, 44 00:02:14,080 --> 00:02:17,119 Speaker 1: either because someone who voted forward is defending it um 45 00:02:17,320 --> 00:02:19,400 Speaker 1: or someone who voted against it is trying to explain 46 00:02:19,520 --> 00:02:21,520 Speaker 1: to the voters why they think it was a you know, 47 00:02:21,560 --> 00:02:25,200 Speaker 1: the right thing to do to oppose the bill is 48 00:02:25,240 --> 00:02:30,040 Speaker 1: this tax reform tax overhaul? What is it? You know, 49 00:02:30,120 --> 00:02:33,240 Speaker 1: it's a mixture of tax reform and tax relief on 50 00:02:33,280 --> 00:02:36,280 Speaker 1: the business side. It is very much reform. I mean, 51 00:02:36,280 --> 00:02:39,480 Speaker 1: this is an architectural change to the tax goes, at 52 00:02:39,520 --> 00:02:41,920 Speaker 1: least as it relates to the way in which the 53 00:02:42,000 --> 00:02:45,959 Speaker 1: US taxes corporate income and specifically the income of multi 54 00:02:46,080 --> 00:02:49,680 Speaker 1: national companies UM. You know, previous to this bill, I 55 00:02:49,680 --> 00:02:52,320 Speaker 1: guess it hasn't been signed into law yet as we 56 00:02:52,360 --> 00:02:54,840 Speaker 1: sit here today, the rule is, if you're a US 57 00:02:54,880 --> 00:02:57,520 Speaker 1: headquartered company, the US astarts the right to tax your 58 00:02:57,560 --> 00:03:01,440 Speaker 1: worldwide earnings, no matter where those earnings come from. We 59 00:03:01,480 --> 00:03:04,760 Speaker 1: are relatively alone in the developed world and taking that position. 60 00:03:04,960 --> 00:03:07,560 Speaker 1: Most other developed economies and we will soon join them, 61 00:03:08,000 --> 00:03:10,040 Speaker 1: take the view that we will only tax that which 62 00:03:10,080 --> 00:03:12,680 Speaker 1: is earned inside our borders. If you earn it outside 63 00:03:12,680 --> 00:03:14,680 Speaker 1: of our borders, you pay local country tax, but you 64 00:03:14,720 --> 00:03:18,560 Speaker 1: own no residual tax to the home country, which means 65 00:03:19,000 --> 00:03:21,639 Speaker 1: that once you've paid your local country tax, you are 66 00:03:21,680 --> 00:03:23,760 Speaker 1: free to bring that money back home and in this case, 67 00:03:23,760 --> 00:03:26,440 Speaker 1: to the United States and reinvest it here in whatever 68 00:03:26,600 --> 00:03:29,640 Speaker 1: manner you see fit. Under the existing system, the one 69 00:03:29,639 --> 00:03:33,200 Speaker 1: pre tax reform um, companies were not bringing their money 70 00:03:33,200 --> 00:03:35,200 Speaker 1: back home. In fact, there was two point six trillion 71 00:03:35,200 --> 00:03:38,800 Speaker 1: dollars of earnings unremitted overseas because to do so would 72 00:03:38,800 --> 00:03:41,000 Speaker 1: have meant paying that additional layer of US tax. And 73 00:03:41,040 --> 00:03:44,520 Speaker 1: so in that sense, this is a significant change, and 74 00:03:44,520 --> 00:03:48,440 Speaker 1: it's significantly positive development um for the U. S economy, 75 00:03:48,520 --> 00:03:51,560 Speaker 1: for US companies, for their workers, their customers, and the like. 76 00:03:51,880 --> 00:03:54,400 Speaker 1: On the individual side, it is more there's there are 77 00:03:54,440 --> 00:03:57,880 Speaker 1: pieces of reform um, but it is you know, mostly 78 00:03:57,920 --> 00:04:00,760 Speaker 1: tax relief. And I say that because East has written 79 00:04:01,640 --> 00:04:05,160 Speaker 1: all of the individual changes will expire eight years after 80 00:04:05,160 --> 00:04:07,200 Speaker 1: the bill is signed into law. And now there's a 81 00:04:07,360 --> 00:04:10,240 Speaker 1: I think a wide suspicion that future converse is not 82 00:04:10,320 --> 00:04:13,240 Speaker 1: just gonna let all those individual tax cuts expire. We 83 00:04:13,280 --> 00:04:16,839 Speaker 1: saw this play out in twelve with the fiscal cliff. 84 00:04:17,800 --> 00:04:21,000 Speaker 1: But you know, until those reforms so those changes become permanent, 85 00:04:21,160 --> 00:04:24,160 Speaker 1: it's hard to call bat tax right. Let me let 86 00:04:24,160 --> 00:04:26,360 Speaker 1: me suggest that what you do is a lot harder 87 00:04:26,360 --> 00:04:29,760 Speaker 1: than it sounds, and that that deciding, for example, when 88 00:04:30,040 --> 00:04:34,000 Speaker 1: a piece of intellectual property is taxed or created in 89 00:04:34,960 --> 00:04:39,240 Speaker 1: you know, Palo Alto and used in Ireland should be 90 00:04:39,279 --> 00:04:41,880 Speaker 1: taxed in Ireland or Palo Alto or or where that. 91 00:04:41,960 --> 00:04:44,240 Speaker 1: You know, the movement of things like an ellectual property 92 00:04:44,240 --> 00:04:47,400 Speaker 1: and these these uh the what an asset is when 93 00:04:47,440 --> 00:04:50,080 Speaker 1: it's actually sold is pretty tough to uh figure out 94 00:04:50,160 --> 00:04:52,800 Speaker 1: these days, it is, and actually one of the challenges 95 00:04:52,880 --> 00:04:55,200 Speaker 1: we've had, and the new regime will help us deal 96 00:04:55,200 --> 00:04:58,000 Speaker 1: with this better. But what we've seeing increasingly, and this 97 00:04:58,080 --> 00:05:02,040 Speaker 1: is especially extent in the digital otomity, is foreign governments 98 00:05:02,040 --> 00:05:04,760 Speaker 1: are saying, hey, you're selling here um, and we want 99 00:05:04,760 --> 00:05:07,400 Speaker 1: to tax as if the value was created here, and 100 00:05:07,560 --> 00:05:09,760 Speaker 1: US companies and the US government saying, no, wait a second, 101 00:05:09,760 --> 00:05:11,800 Speaker 1: just because we're selling into your market, that doesn't mean 102 00:05:11,839 --> 00:05:14,320 Speaker 1: where the that's where the value was created. The value 103 00:05:14,360 --> 00:05:16,679 Speaker 1: was created in the United States, where the research happened, 104 00:05:17,080 --> 00:05:19,440 Speaker 1: right where the innovation occurred. All we're doing in your 105 00:05:19,440 --> 00:05:21,159 Speaker 1: market is selling, and yes, we're making a little bit 106 00:05:21,160 --> 00:05:23,159 Speaker 1: of profit on that sale, and you ought to get, 107 00:05:23,560 --> 00:05:26,039 Speaker 1: you know, some tax revenue from the profit component of 108 00:05:26,040 --> 00:05:30,480 Speaker 1: the sale. But the underlying value creation was largely a US, 109 00:05:30,520 --> 00:05:33,400 Speaker 1: you know, piece of property, and the US ought to 110 00:05:33,440 --> 00:05:35,800 Speaker 1: be the one to be able to assert the taxing 111 00:05:35,880 --> 00:05:37,920 Speaker 1: rights to that, and we were having a lot of 112 00:05:38,000 --> 00:05:40,800 Speaker 1: difficulty doing that previously. That will get a little bit 113 00:05:40,839 --> 00:05:44,479 Speaker 1: easier under this new regime. One thing we're seeing in 114 00:05:44,520 --> 00:05:46,680 Speaker 1: the United States and around the world is certainly this 115 00:05:46,880 --> 00:05:51,080 Speaker 1: big division between people who are doing well a small minority, 116 00:05:51,480 --> 00:05:53,520 Speaker 1: the top one per centers, the top three per centers, 117 00:05:53,800 --> 00:05:59,400 Speaker 1: and those that are not. Does this tax bill help 118 00:05:59,680 --> 00:06:04,560 Speaker 1: every want equally? You know, it's it's hard to say 119 00:06:04,600 --> 00:06:06,599 Speaker 1: on the face of it whether we'll help everyone equally 120 00:06:06,680 --> 00:06:09,760 Speaker 1: or not. And that is largely because the who gets 121 00:06:09,760 --> 00:06:13,640 Speaker 1: helped is almost ultimately a function of what is the 122 00:06:13,640 --> 00:06:16,120 Speaker 1: student of the U. S economy. If the economy grows 123 00:06:16,160 --> 00:06:20,960 Speaker 1: more quickly, more robustly as a result of this tax bill, um, 124 00:06:21,040 --> 00:06:23,360 Speaker 1: then we know from lots of experience and lots of 125 00:06:23,440 --> 00:06:27,039 Speaker 1: data that a faster growing economy generates more jobs pace 126 00:06:27,160 --> 00:06:29,800 Speaker 1: people more tele government collects more revenue as a result, 127 00:06:30,160 --> 00:06:32,880 Speaker 1: and those benefits are broadly shared. Um. If we don't 128 00:06:32,920 --> 00:06:35,400 Speaker 1: see the resulting economic growth, the economic growth that is 129 00:06:35,440 --> 00:06:38,839 Speaker 1: predicted and expected and hoped for, um, then it becomes 130 00:06:38,839 --> 00:06:40,719 Speaker 1: a bit of a closer call. I mean, the bill 131 00:06:40,839 --> 00:06:43,680 Speaker 1: does make the tax code more progressive. The individual income 132 00:06:43,720 --> 00:06:46,640 Speaker 1: tax code gets more progressive under this bill than it 133 00:06:46,720 --> 00:06:49,520 Speaker 1: than it is today. And so we're you know, if 134 00:06:49,560 --> 00:06:51,719 Speaker 1: you look at the total income tax collections of the 135 00:06:51,720 --> 00:06:55,080 Speaker 1: federal government as a result of this bill, greater percentage 136 00:06:55,080 --> 00:06:57,800 Speaker 1: of that will be collected from upper income taxpayers. So 137 00:06:57,839 --> 00:07:00,560 Speaker 1: it helps maybe at the margins there, but really where 138 00:07:00,600 --> 00:07:02,760 Speaker 1: the broad benefits are to be experienced, if they are 139 00:07:02,800 --> 00:07:05,000 Speaker 1: to be experienced at all. Isn't the faster growing economy 140 00:07:05,040 --> 00:07:07,720 Speaker 1: that results from the new tax policy choices that the 141 00:07:07,760 --> 00:07:09,760 Speaker 1: converse is making. If indeed it gets a lot faster 142 00:07:09,760 --> 00:07:11,600 Speaker 1: because most of the estimates we've seen is maybe a 143 00:07:11,640 --> 00:07:14,440 Speaker 1: slight kick to the economy. But I guess we'll see 144 00:07:15,040 --> 00:07:17,800 Speaker 1: as this gets implemented. Hit Kamal, our principle and leader 145 00:07:17,800 --> 00:07:20,640 Speaker 1: of Washington National Tax Service at PwC, on the phone 146 00:07:20,680 --> 00:07:29,480 Speaker 1: from the nation's capital, This is Bloomberg. Yeah, that's where 147 00:07:29,480 --> 00:07:34,560 Speaker 1: he anticipated from the Fed in a tighter cycle, monetary 148 00:07:34,560 --> 00:07:36,360 Speaker 1: cycle when it comes to interest rates. Let's talk about that. 149 00:07:36,400 --> 00:07:39,280 Speaker 1: Let's talk about tax reform because our next guest says 150 00:07:39,320 --> 00:07:43,000 Speaker 1: it might provide a little bit of a small economic boost. Uh. 151 00:07:43,080 --> 00:07:45,960 Speaker 1: Dan North back with us chief economists at you learn means, 152 00:07:46,040 --> 00:07:48,400 Speaker 1: He joins us on the phone from Baltimore. Happy holidays, 153 00:07:48,400 --> 00:07:52,120 Speaker 1: Marry Christmas, all that good stuff. Merry Christmas, do you Carol? Dan, 154 00:07:52,240 --> 00:07:55,480 Speaker 1: Nice to have you back here. Um. Yeah, let's start 155 00:07:55,520 --> 00:07:59,160 Speaker 1: with tax reform because I do think we're all still 156 00:07:59,160 --> 00:08:00,960 Speaker 1: trying to make a sense of it and the impact 157 00:08:01,080 --> 00:08:04,880 Speaker 1: is ultimately going to have and what's permanent? What's temporary? Um? 158 00:08:04,920 --> 00:08:09,240 Speaker 1: In terms of economic juice, what's it gonna do? Carol? 159 00:08:09,280 --> 00:08:12,200 Speaker 1: I think it is going to provide a little bump temporarily. 160 00:08:12,280 --> 00:08:15,240 Speaker 1: I mean I think you could add I don't know, 161 00:08:15,440 --> 00:08:17,800 Speaker 1: maybe as much as half a percentage point to GDP 162 00:08:17,960 --> 00:08:21,680 Speaker 1: over the next couple of years. Um. But uh, it's 163 00:08:21,760 --> 00:08:24,440 Speaker 1: it doesn't come without a price. Of course, there's the 164 00:08:24,520 --> 00:08:29,120 Speaker 1: increased debt level. But you know, people are saying, oh 165 00:08:29,200 --> 00:08:31,600 Speaker 1: my gosh, it's gonna add one point four trillion to 166 00:08:31,680 --> 00:08:35,480 Speaker 1: the debt over ten years. Well, this Congressional Budget Office 167 00:08:35,520 --> 00:08:38,120 Speaker 1: says already ten years from now that that's going to 168 00:08:38,200 --> 00:08:41,800 Speaker 1: be thirty trillion dollars. So this is going to add 169 00:08:41,920 --> 00:08:46,240 Speaker 1: less than five percent. What's another what's another trillion between friends? Right, 170 00:08:46,920 --> 00:08:49,240 Speaker 1: it's one point four when you're already going to be 171 00:08:49,240 --> 00:08:52,280 Speaker 1: at thirty. So it's the wrong way, don't get me wrong. 172 00:08:52,320 --> 00:08:54,079 Speaker 1: It's it's it's not the way to go. But it's 173 00:08:54,080 --> 00:08:56,480 Speaker 1: not that big a deal. But getting back the package, 174 00:08:56,520 --> 00:08:58,080 Speaker 1: I do think you'll get a bump, and I do 175 00:08:58,200 --> 00:09:01,440 Speaker 1: think you'll get a lot of out of the corporate 176 00:09:01,440 --> 00:09:05,719 Speaker 1: tax reform um. You know, people argue against it. That's 177 00:09:05,720 --> 00:09:10,280 Speaker 1: saying it's a big break for already prosperous corporations. They 178 00:09:10,360 --> 00:09:13,359 Speaker 1: forget the corporate taxes are really passed on the consumers. 179 00:09:13,760 --> 00:09:16,800 Speaker 1: I mean, you know, if you're a corporation, taxes are 180 00:09:16,800 --> 00:09:19,240 Speaker 1: an expense and you build that in and it gets 181 00:09:19,280 --> 00:09:22,160 Speaker 1: passed on. So if you had a corporate tax break, 182 00:09:22,280 --> 00:09:24,200 Speaker 1: I think it's uh. I think it's a good break 183 00:09:24,240 --> 00:09:27,040 Speaker 1: for the entire economy. And I do think with that 184 00:09:27,160 --> 00:09:30,360 Speaker 1: tax holiday, you will get some of that money. You'll 185 00:09:30,400 --> 00:09:32,920 Speaker 1: get that money back, and yes, some of will be 186 00:09:33,040 --> 00:09:35,880 Speaker 1: used for buy backs and dividends, but I do think 187 00:09:36,640 --> 00:09:39,600 Speaker 1: that some of it will be invested, particularly with that 188 00:09:39,679 --> 00:09:44,600 Speaker 1: incentive you have now with the immediate expensing. So the 189 00:09:44,679 --> 00:09:47,000 Speaker 1: corporate the corporate side, I think is going to be 190 00:09:47,360 --> 00:09:51,000 Speaker 1: very helpful. Um, we have A T and T out 191 00:09:51,360 --> 00:09:54,200 Speaker 1: saying that they're gonna be a thousand dollar bonuses people 192 00:09:54,240 --> 00:09:57,160 Speaker 1: two employees thanks to the tax reform bill. Of course, 193 00:09:57,480 --> 00:10:00,000 Speaker 1: A TENT is also trying to assue into injustice. Part 194 00:10:00,040 --> 00:10:01,920 Speaker 1: has suit A T T over its time Warner mergers, 195 00:10:01,960 --> 00:10:04,120 Speaker 1: and maybe this is just a clever thing to get 196 00:10:04,160 --> 00:10:08,120 Speaker 1: the president on on their side. But do you expect 197 00:10:08,480 --> 00:10:11,520 Speaker 1: call me a cynic, sorry, but do you expect that 198 00:10:11,559 --> 00:10:16,199 Speaker 1: we're going to see companies giving bonuses because actually trickling 199 00:10:16,240 --> 00:10:19,480 Speaker 1: down these savings or higher wages, Dan, like, that's what 200 00:10:19,600 --> 00:10:21,240 Speaker 1: I know. We all keep waiting for the needle to 201 00:10:21,280 --> 00:10:24,360 Speaker 1: move on that one, lest we remind everybody how important 202 00:10:24,400 --> 00:10:27,200 Speaker 1: consumer spending is to the economy. Right, So a wage 203 00:10:27,240 --> 00:10:30,480 Speaker 1: past would have more of a kick potentially, right, So 204 00:10:30,720 --> 00:10:33,760 Speaker 1: two things here. Yeah, so the A T. T folks 205 00:10:33,800 --> 00:10:35,760 Speaker 1: are going to get a bonus, and some people say, oh, 206 00:10:35,800 --> 00:10:38,840 Speaker 1: that's not fair. But you know, this is more income 207 00:10:39,000 --> 00:10:42,240 Speaker 1: to more consumers, more economic growth. This is this is 208 00:10:42,280 --> 00:10:46,199 Speaker 1: not a bad thing. This is not corporate profits going 209 00:10:46,240 --> 00:10:49,560 Speaker 1: out to you know, investors and shareholders going out to 210 00:10:49,600 --> 00:10:53,240 Speaker 1: actual people that will spend money. Then when you look 211 00:10:53,320 --> 00:10:55,680 Speaker 1: at consumption, of course, at least for companies, who's the 212 00:10:55,720 --> 00:11:01,760 Speaker 1: Justice Department is suing that's right, Merry Christmas, right, um so. 213 00:11:01,960 --> 00:11:04,079 Speaker 1: But but if you look at wages, I really think 214 00:11:04,080 --> 00:11:06,880 Speaker 1: we're on the brink here for a couple of reasons. One, 215 00:11:07,040 --> 00:11:10,280 Speaker 1: if you look at eight wages by age group, you're 216 00:11:10,280 --> 00:11:13,480 Speaker 1: already starting to see some pretty big increases in certain 217 00:11:13,520 --> 00:11:16,840 Speaker 1: age groups way out in the older age brackets and 218 00:11:17,040 --> 00:11:19,640 Speaker 1: in the college people just coming out of college. So 219 00:11:19,679 --> 00:11:22,480 Speaker 1: there is a breakthrough there. And now we're at the 220 00:11:22,559 --> 00:11:26,040 Speaker 1: point for the first time ever where there's a job 221 00:11:26,080 --> 00:11:30,440 Speaker 1: opening available for every person that's unemployed, and that is 222 00:11:30,480 --> 00:11:33,520 Speaker 1: surely going to start driving wages up. So I really 223 00:11:33,520 --> 00:11:35,760 Speaker 1: think we're on the cusp of finally seeing that wage. 224 00:11:36,000 --> 00:11:39,640 Speaker 1: Why did you have the skills? Well, that's that is 225 00:11:39,720 --> 00:11:41,960 Speaker 1: part of it for sure, And and this gets into 226 00:11:42,000 --> 00:11:44,920 Speaker 1: the productivity argument. That's what we've been saying for a while. 227 00:11:45,120 --> 00:11:47,120 Speaker 1: You know, you can't hire somebody and pay them a 228 00:11:47,160 --> 00:11:49,959 Speaker 1: lot if they don't have the skills. But we're starting 229 00:11:49,960 --> 00:11:53,600 Speaker 1: to see the productivity back up here too, So it's uh, 230 00:11:53,640 --> 00:11:56,000 Speaker 1: it's really taken a surge in the past few quarters. 231 00:11:56,040 --> 00:12:00,439 Speaker 1: And that's typically what everybody, all economists point to first, Oh, 232 00:12:00,480 --> 00:12:03,040 Speaker 1: we haven't had wage growth because productivity has been so bad. 233 00:12:03,360 --> 00:12:06,160 Speaker 1: Well there goes that argument. Now because productivity is starting 234 00:12:06,200 --> 00:12:09,640 Speaker 1: to starting to surge. I suspect when we look at 235 00:12:09,679 --> 00:12:12,240 Speaker 1: the polls about the popularity this thing and how it's 236 00:12:12,440 --> 00:12:16,360 Speaker 1: widely unpopular, this bill isn't unpopular. It might be because 237 00:12:17,200 --> 00:12:19,480 Speaker 1: there are more people on the coast who will not 238 00:12:19,480 --> 00:12:22,760 Speaker 1: be able to deduct their local taxes that are higher. 239 00:12:22,840 --> 00:12:25,560 Speaker 1: But the Republicans and Congress were elected by them. They 240 00:12:25,559 --> 00:12:30,959 Speaker 1: were elected by people in red states, right, So you 241 00:12:31,040 --> 00:12:33,080 Speaker 1: and I and a lot of people are listening on 242 00:12:33,120 --> 00:12:35,560 Speaker 1: the coast are are going to end up a little 243 00:12:35,559 --> 00:12:38,160 Speaker 1: bit worse off, no question about it. But most of 244 00:12:38,200 --> 00:12:41,120 Speaker 1: the other country will be uh, will be in good shape, 245 00:12:41,160 --> 00:12:45,120 Speaker 1: those with the states that have low income tax rates. Um. 246 00:12:45,200 --> 00:12:47,600 Speaker 1: But but yeah, the people in the middle, not so 247 00:12:47,679 --> 00:12:50,560 Speaker 1: much on the coast, were the ones that we're the 248 00:12:50,559 --> 00:12:53,080 Speaker 1: ones that voted for Trump and they will get that benefit. 249 00:12:53,160 --> 00:12:57,120 Speaker 1: But it does amaze me that, um, so much of 250 00:12:57,160 --> 00:12:59,679 Speaker 1: the population is opposed to a tax cut. I mean, 251 00:13:00,200 --> 00:13:03,920 Speaker 1: when has that ever happened before? Well, and and many 252 00:13:03,960 --> 00:13:06,360 Speaker 1: would argue that it was time, certainly on the corporate 253 00:13:06,400 --> 00:13:09,520 Speaker 1: side to do something. So UM, I think a lot 254 00:13:09,520 --> 00:13:11,240 Speaker 1: of people would agree with that. And maybe we're just 255 00:13:11,400 --> 00:13:15,000 Speaker 1: seeing you know, partisan politics once again. Unfortunately, Hey, Dan North, 256 00:13:15,040 --> 00:13:17,640 Speaker 1: have a great holiday. Chief economist you learn me is 257 00:13:17,679 --> 00:13:19,840 Speaker 1: joining us on the phone in Baltimore. All right, it's 258 00:13:19,840 --> 00:13:22,440 Speaker 1: a story that actually Kathleen Hayes mentioned earlier that everybody 259 00:13:22,440 --> 00:13:25,320 Speaker 1: should check out UM and this talks about inside Wall 260 00:13:25,320 --> 00:13:29,199 Speaker 1: Streets towers that traders are grasping over President Trump's tax plan. 261 00:13:29,280 --> 00:13:31,079 Speaker 1: We just, of course, heard from the President and senior 262 00:13:31,120 --> 00:13:35,800 Speaker 1: Republicans about the passive new tax legislation. This story, by 263 00:13:35,800 --> 00:13:38,360 Speaker 1: the way, everybody listen up among our most read stories 264 00:13:38,400 --> 00:13:41,800 Speaker 1: on the Bloomberg Laura Keller is financial reporter at Bloomberg News. 265 00:13:41,800 --> 00:13:45,160 Speaker 1: In her Bloomberg eleven three oh studio. So Wall Street 266 00:13:45,200 --> 00:13:49,400 Speaker 1: not happy? Not happy? That's right, Carol. Essentially, these are 267 00:13:49,880 --> 00:13:51,600 Speaker 1: people we talked to a lot of them. You know, 268 00:13:51,800 --> 00:13:55,640 Speaker 1: they are voting Republicans and they've been waiting for a 269 00:13:55,679 --> 00:13:58,040 Speaker 1: tax cut for a long time. You know, some of 270 00:13:58,040 --> 00:14:00,439 Speaker 1: them told me they don't agree with some social issues 271 00:14:00,520 --> 00:14:03,439 Speaker 1: perhaps on the Republican front, but you know, they stuck 272 00:14:03,440 --> 00:14:06,000 Speaker 1: with them or they donated to them even because they 273 00:14:06,040 --> 00:14:09,240 Speaker 1: do care about their financials and they thought Republicans would 274 00:14:09,320 --> 00:14:11,480 Speaker 1: take care of them. But the ones that you know 275 00:14:11,559 --> 00:14:14,280 Speaker 1: we've talked to for this story, uh, do not been 276 00:14:14,360 --> 00:14:16,640 Speaker 1: what's not been taking care of for financial people. So 277 00:14:16,880 --> 00:14:19,960 Speaker 1: a lot of these deductions that are happening are really 278 00:14:20,080 --> 00:14:22,920 Speaker 1: a thorn for a lot of these guys. Um. You know, 279 00:14:23,000 --> 00:14:25,720 Speaker 1: you've got the mortgage interest rate deduction that's going to 280 00:14:25,720 --> 00:14:28,560 Speaker 1: be capped. Now you have the state and local also capped, 281 00:14:28,840 --> 00:14:31,160 Speaker 1: and you know, smaller things to like job expenses of 282 00:14:31,160 --> 00:14:33,640 Speaker 1: course will be kept. And then the big one for 283 00:14:33,680 --> 00:14:35,840 Speaker 1: a lot of hedge fund managers is the pass through 284 00:14:36,280 --> 00:14:39,600 Speaker 1: um that will be a little better for the hedge 285 00:14:39,600 --> 00:14:42,800 Speaker 1: fund managers than what they're paying now, but they're not 286 00:14:42,840 --> 00:14:44,680 Speaker 1: going to get as big of a break as some 287 00:14:44,720 --> 00:14:48,840 Speaker 1: of the smaller businesses that use pass first. Yeah, when 288 00:14:48,840 --> 00:14:51,200 Speaker 1: we look at some of the scoring on this analysis 289 00:14:51,240 --> 00:14:54,480 Speaker 1: published by the Joint Comment On Taxation out of the 290 00:14:54,560 --> 00:14:58,080 Speaker 1: official scorekeeper of Capitol Hill. So that for wealthy people 291 00:14:58,080 --> 00:15:01,040 Speaker 1: five million dollars a year on average in see their 292 00:15:01,040 --> 00:15:05,680 Speaker 1: tax rates come down to seven percent, and households will 293 00:15:05,680 --> 00:15:08,160 Speaker 1: make more than a million year would see their effective 294 00:15:08,200 --> 00:15:09,680 Speaker 1: tax where you go from thirty two and a half 295 00:15:09,720 --> 00:15:13,440 Speaker 1: to thirty percent. So for the richest Americans, according to 296 00:15:13,440 --> 00:15:16,600 Speaker 1: the Joint Committee and Taxation, their tax rates are going 297 00:15:16,640 --> 00:15:18,680 Speaker 1: to come down. And that's a lot of money when 298 00:15:18,680 --> 00:15:20,680 Speaker 1: you're making a million dollars a year. Yes, and I 299 00:15:20,720 --> 00:15:23,920 Speaker 1: think there are happy. I don't know if you're I'm 300 00:15:23,920 --> 00:15:26,800 Speaker 1: not in that million dollar bucket corps. I can speak 301 00:15:26,800 --> 00:15:31,160 Speaker 1: from personal experience, but you know exactly there is going 302 00:15:31,200 --> 00:15:34,160 Speaker 1: to be a cut, but it's just not as rich 303 00:15:34,320 --> 00:15:37,320 Speaker 1: of a cut um that these that these managers and 304 00:15:37,640 --> 00:15:40,240 Speaker 1: traders wanted to see. And when they couple that with 305 00:15:40,280 --> 00:15:43,560 Speaker 1: the fact that corporations, however, will be seeing this very 306 00:15:43,600 --> 00:15:46,920 Speaker 1: long lasting cut, that is that is really the point 307 00:15:46,920 --> 00:15:48,920 Speaker 1: that they have a lot of issues over all. Right, 308 00:15:49,000 --> 00:15:53,120 Speaker 1: So okay, boo hoo, right there. I'm sure people sitting 309 00:15:53,160 --> 00:15:55,320 Speaker 1: out there will wait a minute. You financial types have 310 00:15:55,400 --> 00:15:57,320 Speaker 1: had a lot of benefits for a long time and 311 00:15:57,320 --> 00:15:59,280 Speaker 1: I'm sure you're gonna do fine, And I don't know 312 00:15:59,320 --> 00:16:01,640 Speaker 1: if you get stuck options and whether that's treated differently, 313 00:16:01,680 --> 00:16:04,480 Speaker 1: and so I'm not going to cry for you. Yes, 314 00:16:04,520 --> 00:16:06,880 Speaker 1: And I think that's probably a very fair point, girl, 315 00:16:07,200 --> 00:16:10,040 Speaker 1: because these are people generally who are making a couple 316 00:16:10,160 --> 00:16:12,440 Speaker 1: hundred thousand dollars a year or more, and so they 317 00:16:12,600 --> 00:16:16,080 Speaker 1: do have the wherewithal to pay any tax that we 318 00:16:16,120 --> 00:16:18,120 Speaker 1: could put on them. Really one good question, lord, though, 319 00:16:18,200 --> 00:16:20,000 Speaker 1: is it a case that the financial industry was kind 320 00:16:20,000 --> 00:16:22,480 Speaker 1: of forgotten in this legislation while a lot of other 321 00:16:22,560 --> 00:16:25,240 Speaker 1: industries were not and just got about twenty seconds. Yes, 322 00:16:25,280 --> 00:16:27,440 Speaker 1: I do think that that is the real grape here. 323 00:16:27,600 --> 00:16:29,960 Speaker 1: It's that we got something, but we could have got 324 00:16:30,000 --> 00:16:32,800 Speaker 1: something more, or we were not taken care of as 325 00:16:32,840 --> 00:16:37,320 Speaker 1: other industries were. Okay, interesting that Walster Journal New York 326 00:16:37,640 --> 00:16:40,360 Speaker 1: NBC News Politics that only twenty percent of Americans think 327 00:16:40,360 --> 00:16:43,280 Speaker 1: the bill is a good idea. We shall see right 328 00:16:43,400 --> 00:16:55,560 Speaker 1: midterms included, apparently, Journal. Yeah, but you let me drive home, 329 00:16:56,160 --> 00:17:15,320 Speaker 1: all right? The drive just drive the questions, Dry, This 330 00:17:15,680 --> 00:17:18,600 Speaker 1: is the drive to the globe that community. Thanks well, 331 00:17:18,680 --> 00:17:22,680 Speaker 1: Dry us on Bloomberg Radio. It is time for the 332 00:17:22,760 --> 00:17:25,240 Speaker 1: drive to the close. Jamie Cox, managing partner at Harris 333 00:17:25,240 --> 00:17:28,680 Speaker 1: Financial Group six d fifty million dollars in assets under management. 334 00:17:28,760 --> 00:17:31,720 Speaker 1: Jamie joining us on the phone from Richmond, Virginia, and 335 00:17:31,840 --> 00:17:34,200 Speaker 1: right now we've got the major market averages a little 336 00:17:34,200 --> 00:17:37,440 Speaker 1: bit lower here, uh, and they're off their best and 337 00:17:37,560 --> 00:17:40,200 Speaker 1: worst levels of the day. Jamie talked to us about 338 00:17:40,240 --> 00:17:44,040 Speaker 1: this environment, UH, and what it says to you about 339 00:17:44,080 --> 00:17:46,320 Speaker 1: maybe what's to come when it comes to certainly the 340 00:17:46,359 --> 00:17:49,640 Speaker 1: equity markets. Let's start there. Well, there's been a lot 341 00:17:49,720 --> 00:17:52,320 Speaker 1: to like about two thousand seventeen, and I think we 342 00:17:52,800 --> 00:17:55,080 Speaker 1: probably have there will be just as much to like 343 00:17:55,160 --> 00:17:59,440 Speaker 1: about eighteen. I mean, with with this actual tax package 344 00:17:59,640 --> 00:18:03,000 Speaker 1: Almo assigned by the president, you also you have what 345 00:18:03,160 --> 00:18:05,840 Speaker 1: looks to be a set up for lots of companies 346 00:18:05,880 --> 00:18:08,160 Speaker 1: to do quite well going into the new year. I mean, 347 00:18:08,280 --> 00:18:11,560 Speaker 1: just at the beginning of the President's press conference he 348 00:18:11,800 --> 00:18:14,879 Speaker 1: noted the bonuses and the capital investment by A T 349 00:18:15,040 --> 00:18:17,919 Speaker 1: and T. Boeing has come out with a pr release 350 00:18:17,960 --> 00:18:20,679 Speaker 1: about how excited they are about you know, returning some 351 00:18:20,760 --> 00:18:23,040 Speaker 1: of that uh savings that they're going to get to 352 00:18:23,359 --> 00:18:26,680 Speaker 1: you know, making aeroplanes and bringing jobs back in the us. 353 00:18:26,760 --> 00:18:28,640 Speaker 1: I think, you know, for the first time in a while, 354 00:18:28,680 --> 00:18:30,280 Speaker 1: we may actually have a couple of years in a 355 00:18:30,359 --> 00:18:33,640 Speaker 1: row where UH markets do really really well, maybe double 356 00:18:33,640 --> 00:18:35,879 Speaker 1: digit plus returns, Maybe a little bit different than what 357 00:18:35,880 --> 00:18:38,040 Speaker 1: we've seen this year with growth. Maybe we see a 358 00:18:38,040 --> 00:18:41,480 Speaker 1: shift more value type companies in the future. But all 359 00:18:41,520 --> 00:18:43,920 Speaker 1: in all, I think we're definitely set up for things 360 00:18:43,920 --> 00:18:47,120 Speaker 1: to look pretty good into the new year. So UM, 361 00:18:47,480 --> 00:18:50,080 Speaker 1: you know, I pointed earlier, and I think you can't 362 00:18:50,320 --> 00:18:52,399 Speaker 1: not know that A T and T is well aware 363 00:18:52,480 --> 00:18:55,080 Speaker 1: that the Justice Department is suing it and trying to fight. 364 00:18:55,160 --> 00:18:58,879 Speaker 1: It's an acquisition of time warner and and that any 365 00:18:58,920 --> 00:19:00,919 Speaker 1: good war it's coming out of the White House for 366 00:19:00,960 --> 00:19:02,280 Speaker 1: a T and T right now are awards that they 367 00:19:02,280 --> 00:19:06,199 Speaker 1: want to hear. Uh and if the indeed inspire. But 368 00:19:06,320 --> 00:19:09,000 Speaker 1: I wonder, you know, when you look at this, I'm 369 00:19:09,040 --> 00:19:12,280 Speaker 1: curious about maybe a particular housing and how where this 370 00:19:12,359 --> 00:19:15,840 Speaker 1: might affect the housing. You know, we've got living here 371 00:19:15,840 --> 00:19:18,080 Speaker 1: on the coast, as Carol and I do, UM and 372 00:19:18,400 --> 00:19:20,760 Speaker 1: somebody of our listeners do. We have stations in d C, 373 00:19:20,920 --> 00:19:23,560 Speaker 1: and stations in New York and Boston, in the Bay Area. Here, 374 00:19:23,840 --> 00:19:26,639 Speaker 1: we've got places where uh the average cost of a 375 00:19:26,680 --> 00:19:29,520 Speaker 1: home and in five counties in California, the average cost 376 00:19:29,560 --> 00:19:32,200 Speaker 1: of home is over seven fifty dollars. So this isn't 377 00:19:32,200 --> 00:19:34,439 Speaker 1: something that's affecting rich people. This is affecting literally the 378 00:19:34,480 --> 00:19:37,280 Speaker 1: average person. The inability to write down all that mortgage interest, 379 00:19:37,320 --> 00:19:40,120 Speaker 1: and I wonder what that does for the world of housing. Well, 380 00:19:40,520 --> 00:19:44,480 Speaker 1: what would you prefer a deduction on, you know, mortgage 381 00:19:44,480 --> 00:19:47,760 Speaker 1: interest or would you prefer you know, stability in your job? 382 00:19:48,320 --> 00:19:51,159 Speaker 1: And personally, I think that if you if you provide 383 00:19:51,200 --> 00:19:54,080 Speaker 1: companies tax relief and they're able to provide you know, 384 00:19:54,240 --> 00:19:57,600 Speaker 1: job prospects for the future and provide earnings power for 385 00:19:57,640 --> 00:20:01,400 Speaker 1: you to make higher wages become is less significant whether 386 00:20:01,480 --> 00:20:04,000 Speaker 1: or not you receive a mortgage interest deduction. So for me, 387 00:20:04,480 --> 00:20:07,040 Speaker 1: I understand that there's good to be some tax increases 388 00:20:07,080 --> 00:20:09,679 Speaker 1: on some people, but I would trade a little higher 389 00:20:09,680 --> 00:20:12,560 Speaker 1: taxes for more certainty in my wages. And I think 390 00:20:12,600 --> 00:20:15,960 Speaker 1: that's what people will learn as as some of these 391 00:20:16,119 --> 00:20:19,520 Speaker 1: particular things come through with the tax plan. It's imperfect, 392 00:20:19,560 --> 00:20:21,919 Speaker 1: I agree, but I do think that if you have 393 00:20:22,040 --> 00:20:25,280 Speaker 1: to trade certain things for economic growth, I think it's 394 00:20:25,320 --> 00:20:28,440 Speaker 1: worth just to play devil's advocate. What what what you're 395 00:20:28,480 --> 00:20:32,879 Speaker 1: saying is trickle down works, and that supplies I do 396 00:20:32,960 --> 00:20:35,800 Speaker 1: think in this context when you're talking about housing, what 397 00:20:35,880 --> 00:20:38,760 Speaker 1: you're when you're talking about the trade offs of whether 398 00:20:38,840 --> 00:20:41,600 Speaker 1: you want whether you could get a deduction on a 399 00:20:41,640 --> 00:20:45,640 Speaker 1: fraction of your mortgage interest versus having you know, an 400 00:20:45,640 --> 00:20:49,000 Speaker 1: economic of you know, four percent or three percent economic 401 00:20:49,040 --> 00:20:52,520 Speaker 1: growth which benefits larger groups of people. I think that's 402 00:20:52,160 --> 00:20:54,959 Speaker 1: a fair trade. And if you are to then compare 403 00:20:55,040 --> 00:20:56,919 Speaker 1: the cost of housing not just on the coast, but 404 00:20:57,040 --> 00:20:59,960 Speaker 1: just everywhere else, it's going to affect, like you said, 405 00:21:00,040 --> 00:21:02,200 Speaker 1: the hire income areas, but it's not going to affect 406 00:21:02,520 --> 00:21:05,800 Speaker 1: the largest part of the US. So there are going 407 00:21:05,840 --> 00:21:07,800 Speaker 1: to be some winners and losers. But if you can 408 00:21:07,960 --> 00:21:10,480 Speaker 1: compare that through the higher wages that people get on 409 00:21:10,520 --> 00:21:13,040 Speaker 1: the coast, there's going to be some trade off there 410 00:21:13,080 --> 00:21:16,800 Speaker 1: with your lower bracketed income the rates on on the 411 00:21:16,840 --> 00:21:19,600 Speaker 1: on the brackets lowering, Don'll be some offsets there as well. 412 00:21:19,640 --> 00:21:22,760 Speaker 1: So it's not a one for one comparison on housing. 413 00:21:22,800 --> 00:21:26,280 Speaker 1: So to me, housing prices and the housing stability and 414 00:21:26,359 --> 00:21:29,800 Speaker 1: jobs are far more important than you know, the deductibility 415 00:21:29,800 --> 00:21:32,639 Speaker 1: of interest in the in it in in that one piece. 416 00:21:34,960 --> 00:21:38,320 Speaker 1: Um So, yeah, okay, and I guess we'll we'll ultimately 417 00:21:38,359 --> 00:21:41,560 Speaker 1: see as I can, you know, begins to get implemented. 418 00:21:41,600 --> 00:21:44,399 Speaker 1: We know this is massive for corporations, right and I 419 00:21:44,400 --> 00:21:48,720 Speaker 1: guess it's just ultimately how do they put their savings 420 00:21:48,840 --> 00:21:51,000 Speaker 1: to work? Because what we've seen in the past, right 421 00:21:51,080 --> 00:21:54,080 Speaker 1: with repatriation, is that companies, you know, often do a 422 00:21:54,080 --> 00:21:56,399 Speaker 1: lot of buybacks and dividends. We've had other guests, I 423 00:21:56,400 --> 00:21:58,679 Speaker 1: think it was Jeff sought on from Raymond James who 424 00:21:58,720 --> 00:22:01,520 Speaker 1: said that, no, they're actually starting We're starting to see companies, 425 00:22:01,560 --> 00:22:03,800 Speaker 1: I guess use their own money on their balance sheets 426 00:22:04,000 --> 00:22:06,960 Speaker 1: to do some of that. Um So, I guess we'll 427 00:22:07,000 --> 00:22:10,359 Speaker 1: have to see ultimately what companies do with this money, 428 00:22:10,400 --> 00:22:14,400 Speaker 1: whether they provide higher wages, do they do capital expenditures, 429 00:22:14,400 --> 00:22:17,399 Speaker 1: but do they do it on automation and robots and 430 00:22:17,520 --> 00:22:20,679 Speaker 1: machines that ultimately replace people. I guess we have to 431 00:22:20,720 --> 00:22:25,080 Speaker 1: wait and see. I agree. I agree the expensing part 432 00:22:25,080 --> 00:22:27,760 Speaker 1: of this particular plan is going to be very interesting. 433 00:22:28,359 --> 00:22:30,600 Speaker 1: Um and I would side autos is one of the 434 00:22:30,640 --> 00:22:32,520 Speaker 1: areas in which is going to be the most interesting 435 00:22:32,520 --> 00:22:35,399 Speaker 1: next year. If uh, if you're an auto deal or 436 00:22:35,400 --> 00:22:37,399 Speaker 1: thinking you're going to have a good December, you know 437 00:22:37,440 --> 00:22:39,680 Speaker 1: that this tax plan basically blew that out of the water. 438 00:22:40,320 --> 00:22:43,320 Speaker 1: Uh and and all the autobile automobile purchases are going 439 00:22:43,359 --> 00:22:47,359 Speaker 1: to be fast forwarded into the period. So I think 440 00:22:47,359 --> 00:22:50,560 Speaker 1: that on the automobile side in particular, there's a lot 441 00:22:50,640 --> 00:22:53,240 Speaker 1: to talk about. For the first time, you can expense 442 00:22:53,280 --> 00:22:58,520 Speaker 1: a used vehicle where you couldn't fast whereas um, you know, um. 443 00:22:59,160 --> 00:23:02,520 Speaker 1: There's also to be some extra expensing for luxury automobiles. 444 00:23:02,680 --> 00:23:04,119 Speaker 1: So I think if you were to look at the 445 00:23:04,240 --> 00:23:08,119 Speaker 1: largest corporations that you have stopped buybacks and things like 446 00:23:08,160 --> 00:23:10,000 Speaker 1: that are likely, But if you look at small business, 447 00:23:10,520 --> 00:23:14,240 Speaker 1: the ability to trickle that money through multiple industries is 448 00:23:14,280 --> 00:23:17,600 Speaker 1: going to be quite vast. When you're talking about expensing equipment, 449 00:23:17,720 --> 00:23:21,080 Speaker 1: like larger equipment items like a car or whatever, that's 450 00:23:21,119 --> 00:23:25,200 Speaker 1: that's definitely going to have a lot broader impact and 451 00:23:25,400 --> 00:23:27,399 Speaker 1: probably is being talked about. So you can short some 452 00:23:27,440 --> 00:23:31,800 Speaker 1: car makers here. I think CarMax is actually a good one. 453 00:23:31,840 --> 00:23:33,560 Speaker 1: I mean, use cars are going to be you know, 454 00:23:33,840 --> 00:23:37,399 Speaker 1: preferred in the expensing arrangement where it wasn't before. And 455 00:23:37,480 --> 00:23:39,639 Speaker 1: also if you were to look at. You know, a 456 00:23:39,640 --> 00:23:41,520 Speaker 1: lot of people thought the car industry was going to 457 00:23:41,680 --> 00:23:45,800 Speaker 1: face recession because interest rates were rising on uh, the 458 00:23:45,840 --> 00:23:49,720 Speaker 1: ability to borrow money for the automobile loans. And then 459 00:23:49,760 --> 00:23:52,000 Speaker 1: you know, you start having you know, seventeen million run 460 00:23:52,080 --> 00:23:54,880 Speaker 1: rate automobiles that for a while, you sort of take 461 00:23:54,960 --> 00:23:58,400 Speaker 1: up all the unused demand. Uh. And so that may 462 00:23:58,440 --> 00:24:00,920 Speaker 1: have changed the nexus and put that off for a while. 463 00:24:00,960 --> 00:24:03,600 Speaker 1: So Jamie Cox, Managing partner and Harris Financial, thanks a lot. 464 00:24:03,640 --> 00:24:06,080 Speaker 1: I really appreciate your your hard work and the thoughts 465 00:24:06,119 --> 00:24:15,240 Speaker 1: on Bloomer markets on Bloomberg Radio. How can yeah, that's 466 00:24:15,240 --> 00:24:18,120 Speaker 1: exactly I think what's on the minds of many right now. 467 00:24:18,200 --> 00:24:20,399 Speaker 1: How can we be sure about how the new tax 468 00:24:20,440 --> 00:24:23,960 Speaker 1: overhaul package and legislation is going to impact us? While 469 00:24:23,960 --> 00:24:26,240 Speaker 1: our next guest has been looking into that, specifically at 470 00:24:26,240 --> 00:24:29,160 Speaker 1: the impact on real estate, entertainment, pensions, and a lot more, 471 00:24:29,560 --> 00:24:32,359 Speaker 1: let's get to some of the specifics. Joe Perry is 472 00:24:32,400 --> 00:24:35,520 Speaker 1: with US tax and Business services leader at Markham and 473 00:24:35,560 --> 00:24:38,440 Speaker 1: he joins us on the phone from Melville, New York. 474 00:24:38,440 --> 00:24:41,160 Speaker 1: And of course, you guys are an independent public accounting 475 00:24:41,160 --> 00:24:43,119 Speaker 1: firm and advisory firm, So these are the kind of 476 00:24:43,160 --> 00:24:46,160 Speaker 1: things you have to dig into for your clients. So Joe, 477 00:24:46,320 --> 00:24:48,960 Speaker 1: let's get right to it. For the real estate market, 478 00:24:49,080 --> 00:24:51,080 Speaker 1: we've been talking about this a little bit earlier about 479 00:24:51,560 --> 00:24:54,520 Speaker 1: UH the mortgage interest deduction and capping that and the 480 00:24:54,560 --> 00:24:57,240 Speaker 1: impact that could have on the housing market. How do 481 00:24:57,320 --> 00:25:02,840 Speaker 1: you see this overhaul package UH for taxes impacting real 482 00:25:02,960 --> 00:25:07,159 Speaker 1: estate broadly? Well, first, thanks for having me. Um. I 483 00:25:07,200 --> 00:25:12,320 Speaker 1: would say that really the detail, all the details have 484 00:25:12,480 --> 00:25:16,679 Speaker 1: to be um viewed from a standpoint of some of 485 00:25:16,720 --> 00:25:19,159 Speaker 1: it is obvious and some of it the devils in 486 00:25:19,200 --> 00:25:21,600 Speaker 1: the details of much of which may come later. But 487 00:25:21,680 --> 00:25:24,320 Speaker 1: as it relates to the real estate market, UM, I 488 00:25:24,359 --> 00:25:26,840 Speaker 1: think the real estate market will be affected maybe in 489 00:25:26,920 --> 00:25:30,560 Speaker 1: two ways and bifurcated to the higher end market and 490 00:25:30,760 --> 00:25:33,560 Speaker 1: potentially the lower end market. So the question is the 491 00:25:33,640 --> 00:25:38,400 Speaker 1: debate of high net worth individuals that are in financial services. 492 00:25:38,840 --> 00:25:41,879 Speaker 1: Will they be willing now to have this be the 493 00:25:41,880 --> 00:25:44,920 Speaker 1: tipping point to move out of New York or San 494 00:25:44,960 --> 00:25:49,320 Speaker 1: Francisco and go to low tax jurisdictions such as Florida 495 00:25:49,480 --> 00:25:52,080 Speaker 1: or Texas. And if that's the case, then you think 496 00:25:52,119 --> 00:25:55,359 Speaker 1: about it. We ran scenarios for some of Markham's clients 497 00:25:55,359 --> 00:25:58,000 Speaker 1: at the higher end, and they potentially could say five 498 00:25:58,080 --> 00:26:01,760 Speaker 1: or ten million dollars and it's not that's really not 499 00:26:02,320 --> 00:26:06,240 Speaker 1: pocket change. So in that regard, if you were going to, 500 00:26:06,400 --> 00:26:08,720 Speaker 1: let's say, have a higher end house and you're gonna 501 00:26:08,720 --> 00:26:11,320 Speaker 1: sell that house in the market, you might have some 502 00:26:11,400 --> 00:26:13,800 Speaker 1: people that are going to flood down to Florida because 503 00:26:13,840 --> 00:26:18,119 Speaker 1: they they can they can decide to live there in 504 00:26:18,240 --> 00:26:22,720 Speaker 1: financial services and actually have their clients satisfied down there. 505 00:26:22,800 --> 00:26:25,560 Speaker 1: So I think on the higher end there's a possibility, 506 00:26:25,600 --> 00:26:28,520 Speaker 1: but on the lower end it could be effective too 507 00:26:29,000 --> 00:26:31,439 Speaker 1: for those people that we're saving money to buy a 508 00:26:31,520 --> 00:26:34,880 Speaker 1: house and used to, as many of us did when 509 00:26:34,880 --> 00:26:38,159 Speaker 1: we brought our first house, use the tax advantage of 510 00:26:38,240 --> 00:26:40,880 Speaker 1: having the mortgage interest in the real estate taxes help 511 00:26:40,960 --> 00:26:45,520 Speaker 1: fund that payment every month. That's potentially going to go away. 512 00:26:45,600 --> 00:26:47,600 Speaker 1: So I think in the middle of the country it's 513 00:26:47,640 --> 00:26:50,800 Speaker 1: more likely that people are less affected, but in the 514 00:26:50,880 --> 00:26:54,720 Speaker 1: coastal areas and high tax states. Generally, high tax states 515 00:26:54,720 --> 00:26:57,400 Speaker 1: are not just income tax, they also associate with real 516 00:26:57,520 --> 00:27:00,160 Speaker 1: estate tax. You look at Long Island with Sam at 517 00:27:00,160 --> 00:27:03,439 Speaker 1: Cisco um and that equates to a higher end a 518 00:27:03,520 --> 00:27:06,359 Speaker 1: market value. So I do think there's going to be 519 00:27:06,440 --> 00:27:09,040 Speaker 1: some fallout to some degree, and how that shakes out 520 00:27:09,119 --> 00:27:13,280 Speaker 1: only time will tell, but there will be an impact. Uh. Indeed, 521 00:27:13,320 --> 00:27:15,600 Speaker 1: and I do look along Island in San Francisco because 522 00:27:15,600 --> 00:27:17,440 Speaker 1: there was the places where I spend most of my time, 523 00:27:17,960 --> 00:27:20,679 Speaker 1: and uh, it makes me wonder, you know, if this 524 00:27:20,800 --> 00:27:23,560 Speaker 1: only applies to new mortgages, but it makes me wondering 525 00:27:24,080 --> 00:27:26,200 Speaker 1: on the margin, if I'm trying to sell my house, 526 00:27:26,320 --> 00:27:29,639 Speaker 1: that an average house in five counties in California, for example, 527 00:27:30,080 --> 00:27:31,919 Speaker 1: the average costs not a high end house, but the 528 00:27:31,960 --> 00:27:36,359 Speaker 1: average cost cost seven dollars. I got my house probably 529 00:27:36,359 --> 00:27:38,959 Speaker 1: cost more than that has to a lot. The number 530 00:27:39,000 --> 00:27:42,200 Speaker 1: of buyers available for that will have less financial leverage 531 00:27:42,240 --> 00:27:45,640 Speaker 1: to buy those houses, so it can't help real estate prices. Well, well, 532 00:27:45,680 --> 00:27:49,320 Speaker 1: that's that's right, I guess. Uh. It really depends, right, 533 00:27:49,359 --> 00:27:52,240 Speaker 1: if you were smart enough to be in the market 534 00:27:52,359 --> 00:27:54,760 Speaker 1: and you were looking for that down payment to grow 535 00:27:54,800 --> 00:27:57,720 Speaker 1: as opposed to a CD uh, you might have more 536 00:27:57,720 --> 00:28:00,320 Speaker 1: of a down payment and I might offset of that. 537 00:28:00,440 --> 00:28:03,280 Speaker 1: So it's hard to tell. The situation is different, but 538 00:28:03,560 --> 00:28:06,840 Speaker 1: I do think that uh, on the whole, it's going 539 00:28:06,880 --> 00:28:09,280 Speaker 1: to be harder for those people that are on the 540 00:28:09,320 --> 00:28:11,879 Speaker 1: margins looking to buy a million dollar house to to 541 00:28:11,960 --> 00:28:14,960 Speaker 1: afford that there's less in the market. What's interesting too, though, 542 00:28:15,000 --> 00:28:16,560 Speaker 1: you know we often bring this up and we're talking 543 00:28:16,560 --> 00:28:18,720 Speaker 1: about more in deductions. Right in Canada there is no 544 00:28:18,760 --> 00:28:22,560 Speaker 1: mortgage interest deduction, and yet homeownership I think is higher 545 00:28:22,600 --> 00:28:25,880 Speaker 1: than what we see in the United States. Um. So 546 00:28:26,000 --> 00:28:28,400 Speaker 1: I mean people buy homes, Yep, it's nice to get 547 00:28:28,400 --> 00:28:31,720 Speaker 1: that deduction, um, but they also buy to be part 548 00:28:31,720 --> 00:28:34,760 Speaker 1: of a community, right or for schools for their kids, 549 00:28:34,880 --> 00:28:37,480 Speaker 1: or for a lot of reasons. Well, there's a lot 550 00:28:37,520 --> 00:28:40,200 Speaker 1: of reasons. Not only that, but if we think about it, right, 551 00:28:40,680 --> 00:28:45,040 Speaker 1: I know, in all our offices in the major cities, um, 552 00:28:45,160 --> 00:28:47,840 Speaker 1: there are most of the young people really want to 553 00:28:47,880 --> 00:28:50,080 Speaker 1: go to the cities and live, so they haven't bought 554 00:28:50,120 --> 00:28:52,840 Speaker 1: the house. They're getting married later. So now you see 555 00:28:52,920 --> 00:28:56,600 Speaker 1: some of that generation actually having children and want to 556 00:28:56,640 --> 00:28:59,800 Speaker 1: go and move to a house to your point actually 557 00:29:00,040 --> 00:29:03,120 Speaker 1: of in those locations, and that becomes a question do 558 00:29:03,240 --> 00:29:05,800 Speaker 1: I really want to now go to these high tax 559 00:29:05,840 --> 00:29:08,400 Speaker 1: states or what I like to go somewhere where it's 560 00:29:08,440 --> 00:29:11,800 Speaker 1: more tax friendly, so at least I'm not losing that 561 00:29:11,920 --> 00:29:14,800 Speaker 1: deduction in the real estate taxes or even the income tax. 562 00:29:14,840 --> 00:29:16,960 Speaker 1: And I think so I thought, I asked, say, no, 563 00:29:17,040 --> 00:29:19,080 Speaker 1: don't forgive me. I interruptive, so forgive me, But I 564 00:29:19,080 --> 00:29:21,200 Speaker 1: just wanted to get in the point that I also, 565 00:29:21,240 --> 00:29:23,520 Speaker 1: I think I've read some rumblings about what states might 566 00:29:23,520 --> 00:29:26,360 Speaker 1: be trying to do to compensate people, you know in 567 00:29:26,400 --> 00:29:30,320 Speaker 1: these high income tax states. Well, well, states are doing 568 00:29:30,400 --> 00:29:33,320 Speaker 1: quite a bit. So first, uh, there was a strategy 569 00:29:33,440 --> 00:29:37,520 Speaker 1: where you should prepay your two eighteen tax returns, and 570 00:29:37,560 --> 00:29:40,320 Speaker 1: many states didn't have the capability of taking that money. 571 00:29:40,760 --> 00:29:43,200 Speaker 1: They changed that in the law and they couldn't. But 572 00:29:43,240 --> 00:29:45,480 Speaker 1: one of the by products was many of the states, 573 00:29:45,880 --> 00:29:49,720 Speaker 1: like Pennsylvania, was trying to take that money, the same 574 00:29:49,760 --> 00:29:52,120 Speaker 1: as happened in real estate. And I think many people 575 00:29:52,160 --> 00:29:56,200 Speaker 1: are confused. They think they can't now prepay real estate taxes. 576 00:29:56,240 --> 00:29:58,800 Speaker 1: But you really can. Okay, that was only for state 577 00:29:58,880 --> 00:30:02,160 Speaker 1: income taxes. Really state taxes, you can. So the question 578 00:30:02,200 --> 00:30:04,680 Speaker 1: I always get when I run into people or can 579 00:30:04,720 --> 00:30:07,400 Speaker 1: I should I prepay my real estate tax? And the 580 00:30:07,440 --> 00:30:11,600 Speaker 1: answer is, if the county or the jurisdiction takes it you, 581 00:30:12,280 --> 00:30:15,640 Speaker 1: you should take it this year because next year, especially 582 00:30:15,680 --> 00:30:19,080 Speaker 1: if you fill up to that ten dollar mark. You're 583 00:30:19,080 --> 00:30:21,600 Speaker 1: losing that deduction. Listen. I think it's fascinating that we 584 00:30:21,720 --> 00:30:23,840 Speaker 1: just spent I don't know the whole time talking about 585 00:30:23,840 --> 00:30:25,840 Speaker 1: real estate. We didn't even get into other areas, which 586 00:30:25,880 --> 00:30:27,600 Speaker 1: just shows it's going to take some time for us 587 00:30:27,640 --> 00:30:30,920 Speaker 1: to really understand how this all plays out in the 588 00:30:30,920 --> 00:30:34,120 Speaker 1: new tax package. Joe Perry, nice to talk with you, though, 589 00:30:34,400 --> 00:30:37,240 Speaker 1: tax and Business services leader at Markham, on the phone 590 00:30:37,280 --> 00:30:40,880 Speaker 1: from Melville, New York. Move around, more grade promotion, up 591 00:30:41,000 --> 00:30:45,800 Speaker 1: the earth, move on. You moved like they do. I've 592 00:30:45,840 --> 00:30:52,040 Speaker 1: never seen anyone move that fast. Five people. Let's moved 593 00:30:52,040 --> 00:30:59,560 Speaker 1: like you've got a purpose. Something's called movers and shakers. 594 00:31:00,000 --> 00:31:02,360 Speaker 1: They cost a little more. That name cracked me up. 595 00:31:08,680 --> 00:31:13,360 Speaker 1: Bloomberg Markets Movers and Shakers with Carol Massier and Corey 596 00:31:13,440 --> 00:31:16,520 Speaker 1: Johnson on Bloomberg Radio. All right, time to talk about 597 00:31:16,560 --> 00:31:19,040 Speaker 1: some of the stocks on the move in today's trading session. 598 00:31:19,200 --> 00:31:22,280 Speaker 1: SMP five two hundred seventeen names higher today, two hundred 599 00:31:22,360 --> 00:31:25,600 Speaker 1: eighty six lower, two unchanged. I'm going to bring up, uh, 600 00:31:25,880 --> 00:31:28,680 Speaker 1: something moving and shaken, uh, and that is shares of 601 00:31:28,760 --> 00:31:31,880 Speaker 1: Chipotle Mexican grill number two decliner in the s and 602 00:31:31,920 --> 00:31:35,600 Speaker 1: P five hundred today down four point six percent, uh 603 00:31:35,720 --> 00:31:39,840 Speaker 1: to sixties. So they're going to share I'm not down 604 00:31:39,880 --> 00:31:43,920 Speaker 1: more than fourteen bucks. Uh Now, it's like, oops, here 605 00:31:43,960 --> 00:31:47,000 Speaker 1: we go. Chipotle Mexican Girl suffering it's worst stock decline 606 00:31:47,160 --> 00:31:49,720 Speaker 1: and more than a month Corey on our port of 607 00:31:49,720 --> 00:31:54,680 Speaker 1: a possible illness outbreak in Los Angeles, renewing fears about 608 00:31:55,320 --> 00:31:59,040 Speaker 1: the company's food safety crisis. The local Health Department's Acute 609 00:31:59,040 --> 00:32:02,760 Speaker 1: Communicable Disease Control Unit is investigating illnesses tied to a 610 00:32:02,800 --> 00:32:07,680 Speaker 1: location in l A. According to Business Inside of Chris Arnold, 611 00:32:07,960 --> 00:32:10,440 Speaker 1: he's a spokesman for Chipola. I've talked with him many times. 612 00:32:10,680 --> 00:32:12,920 Speaker 1: He said the company is aware of reports of sickness 613 00:32:13,000 --> 00:32:16,280 Speaker 1: on user generated websites, but not of any complaints made 614 00:32:16,280 --> 00:32:20,600 Speaker 1: to local health officials. So anyway, you know, and he 615 00:32:20,680 --> 00:32:23,720 Speaker 1: signed this understandably so and you've got investors kind of 616 00:32:23,800 --> 00:32:27,120 Speaker 1: running for the exit door, and uh, this company's down 617 00:32:27,120 --> 00:32:30,920 Speaker 1: about so far, but as we know, they've been struggling 618 00:32:31,240 --> 00:32:35,160 Speaker 1: to bounce back from that equal like crisis back in Well, 619 00:32:35,200 --> 00:32:38,800 Speaker 1: I'll be positive, you can always count on that. Yeah, 620 00:32:39,360 --> 00:32:46,840 Speaker 1: BlackBerry revenues down and Keno five years every single quarter 621 00:32:46,880 --> 00:32:49,120 Speaker 1: you had declines and revenues. If you give them, except 622 00:32:49,120 --> 00:32:52,000 Speaker 1: for a couple of quarters, they've got basically seven years 623 00:32:52,000 --> 00:32:54,600 Speaker 1: of declines and revenues from six years of declines and revenues. 624 00:32:54,960 --> 00:32:59,360 Speaker 1: But the stocks up twelve percent today. Why why? Well 625 00:32:59,400 --> 00:33:02,400 Speaker 1: to reason, there's a lot of chatter on the online 626 00:33:02,440 --> 00:33:05,280 Speaker 1: about the possibility they'll be getting into blockchain at kild 627 00:33:05,280 --> 00:33:09,520 Speaker 1: you not. But the company also out there with with 628 00:33:09,920 --> 00:33:12,840 Speaker 1: guidance for revenues higher than where the street had been. 629 00:33:13,040 --> 00:33:16,440 Speaker 1: So again the numbers were weak. The numbers, the revenues 630 00:33:16,480 --> 00:33:19,800 Speaker 1: were significantly lower. Again, twenty two percent year over year 631 00:33:19,840 --> 00:33:22,560 Speaker 1: declined last year they declined percent. So it wasn't like 632 00:33:22,600 --> 00:33:25,080 Speaker 1: it was, you know, an easy mark from the preview 633 00:33:25,160 --> 00:33:27,280 Speaker 1: or a hard mark from the previous year at the top. Non, 634 00:33:27,360 --> 00:33:29,480 Speaker 1: unless it's still another twenty two percent. Small of this 635 00:33:29,560 --> 00:33:33,080 Speaker 1: business is just the rapidly shrinking beasts that is BlackBerry. 636 00:33:33,280 --> 00:33:35,760 Speaker 1: BlackBerry in the court had two hundred twenty six million 637 00:33:35,800 --> 00:33:38,800 Speaker 1: dollars in revenues. You wonder where those were in the 638 00:33:38,840 --> 00:33:42,600 Speaker 1: in the third November quarter. Let's say in two thousand ten, 639 00:33:42,680 --> 00:33:46,440 Speaker 1: when I first darkened the doors at Bloomberg four billion 640 00:33:47,040 --> 00:33:49,680 Speaker 1: for a quarter. Now it's about two hundred and twenty million. 641 00:33:50,480 --> 00:33:53,240 Speaker 1: But that expectation for future growth is a little bit 642 00:33:53,320 --> 00:33:55,959 Speaker 1: higher on the revenue side than some of the analyst 643 00:33:55,960 --> 00:33:58,680 Speaker 1: and Wallster has expected. Surprising the analyst is good enough 644 00:33:58,680 --> 00:34:00,640 Speaker 1: to get a big pop in the stock. Alright, hey, 645 00:34:00,680 --> 00:34:03,320 Speaker 1: Mitch in Red Hat the number one decliner in the 646 00:34:03,440 --> 00:34:07,200 Speaker 1: S and P five hundred. That stock uh down five 647 00:34:07,240 --> 00:34:10,320 Speaker 1: point three percent in today's session, down to hundred twenty 648 00:34:10,360 --> 00:34:15,000 Speaker 1: two dollars a share. Excuse me, down almost seven bucks. 649 00:34:15,000 --> 00:34:18,920 Speaker 1: What's Redhead this year? It's up about They came out 650 00:34:18,960 --> 00:34:22,759 Speaker 1: with some numbers third quarter buildings growth eighteen point five percent. 651 00:34:22,800 --> 00:34:25,800 Speaker 1: That actually was above almost three percent above street estimates, 652 00:34:25,840 --> 00:34:28,000 Speaker 1: but the magnitude of the beat was lower than in 653 00:34:28,040 --> 00:34:30,479 Speaker 1: the past three quarters at least, that's according to Piper 654 00:34:30,560 --> 00:34:33,839 Speaker 1: Jeffrey analyst Alex Duke, and he put that out a note. 655 00:34:33,880 --> 00:34:37,040 Speaker 1: So we've seen some pressure on Red Hat in today's session. 656 00:34:37,400 --> 00:34:41,480 Speaker 1: Let's get to the Volatility Index report on this Wednesday 657 00:34:41,920 --> 00:34:44,080 Speaker 1: and the VIX and the Wednesday session, Corey down three 658 00:34:44,120 --> 00:34:48,799 Speaker 1: point five percent, the VIX closing at nine point sixty. Alright, Corey, 659 00:34:48,800 --> 00:34:50,120 Speaker 1: what do you guest stock of the day for me, 660 00:34:50,320 --> 00:34:51,680 Speaker 1: I do have a stock of the day for you. 661 00:34:51,800 --> 00:34:54,360 Speaker 1: One and I've never even looked at before. But staying 662 00:34:54,400 --> 00:34:59,640 Speaker 1: with this trend, Seven Stars Cloud Group tick her s 663 00:34:59,640 --> 00:35:02,479 Speaker 1: SC again one that I haven't looked at before, saw 664 00:35:02,480 --> 00:35:04,440 Speaker 1: a huge pop and its shares today it's got a 665 00:35:04,520 --> 00:35:07,000 Speaker 1: three fifty million dollar market cap now thanks to a 666 00:35:07,080 --> 00:35:11,440 Speaker 1: twenty seven percent jump in the stock today. UH. It 667 00:35:11,600 --> 00:35:14,920 Speaker 1: is UH. It's based in Beijing. And guess what they 668 00:35:14,920 --> 00:35:17,880 Speaker 1: claim to do now? They bought a twenty seven percent 669 00:35:17,960 --> 00:35:20,040 Speaker 1: stake and something called Delaware Board of Trade Holdings at 670 00:35:20,080 --> 00:35:23,920 Speaker 1: first and only blockchain alternative trading system licensed by the SEC. 671 00:35:24,480 --> 00:35:27,200 Speaker 1: They gave that company one point six million chairs of 672 00:35:27,200 --> 00:35:30,360 Speaker 1: stock and instantly it went off to the races for 673 00:35:30,440 --> 00:35:34,080 Speaker 1: shares of s SC seven Stars Cloud again a Beijing 674 00:35:34,160 --> 00:35:38,799 Speaker 1: based company with virtually no revenues. They had thirty million 675 00:35:38,800 --> 00:35:41,319 Speaker 1: dollars in revenues in the most recent quarter reported, but 676 00:35:41,640 --> 00:35:44,360 Speaker 1: nonetheless stock off to the races with the announcement that 677 00:35:44,680 --> 00:35:47,600 Speaker 1: blockchain is is, it's going to be part of its 678 00:35:47,640 --> 00:35:50,839 Speaker 1: business and even trading in stocks and blockchain UH. And 679 00:35:50,880 --> 00:35:56,200 Speaker 1: that that SCENT acquisition of Delaware UH Trading Delaware Board 680 00:35:56,239 --> 00:35:59,600 Speaker 1: of Trade Holding, I should say, um, just sent this 681 00:35:59,680 --> 00:36:02,080 Speaker 1: thing lying uh and again the issue of one point 682 00:36:02,320 --> 00:36:05,480 Speaker 1: six million shares of of common stock to make the 683 00:36:05,480 --> 00:36:09,720 Speaker 1: transaction happen. No cash exchanging hands, um, But the department 684 00:36:09,960 --> 00:36:13,279 Speaker 1: said depart Delaware Board of Trade company. He says it's 685 00:36:13,280 --> 00:36:16,440 Speaker 1: a findromon or registered firm. Uh, and that the suggestion 686 00:36:16,440 --> 00:36:18,279 Speaker 1: there is some kind of trading could actually happen with 687 00:36:18,239 --> 00:36:22,120 Speaker 1: the security. Of course, the problems with blockchain UH. With bitcoin, 688 00:36:22,160 --> 00:36:23,840 Speaker 1: I should say, one of the great things with bitcoin 689 00:36:24,040 --> 00:36:27,200 Speaker 1: is that it has ability to record all of the 690 00:36:27,200 --> 00:36:29,440 Speaker 1: transactions and all the things that happened to it historically, 691 00:36:29,520 --> 00:36:32,120 Speaker 1: which would be wonderful in the world of securities if 692 00:36:32,280 --> 00:36:34,400 Speaker 1: you knew who the traders were who bought and sold, 693 00:36:34,440 --> 00:36:36,960 Speaker 1: which is also a requirement of the trading of stocks. Right, 694 00:36:37,480 --> 00:36:40,239 Speaker 1: blockchain is completely anonymous. You can't know who was on 695 00:36:40,280 --> 00:36:41,880 Speaker 1: both sides of the trade. It can't be stored in 696 00:36:41,880 --> 00:36:44,840 Speaker 1: the very information into bitcoin. So the idea that you 697 00:36:44,840 --> 00:36:47,080 Speaker 1: could use bitcoin and trade stocks and I also know 698 00:36:47,120 --> 00:36:49,960 Speaker 1: who your customers are are complete opposence ends the spectrum. 699 00:36:49,960 --> 00:36:52,759 Speaker 1: You can't have a know your customer rule and also 700 00:36:52,880 --> 00:36:55,319 Speaker 1: use bitcoin to trade stocks. You would have to do 701 00:36:55,360 --> 00:36:57,600 Speaker 1: one or the other, and I would suggest that we're 702 00:36:57,640 --> 00:37:01,560 Speaker 1: not even even in an administration that sees every customer 703 00:37:01,640 --> 00:37:03,920 Speaker 1: protection that seems as a as a regulation to get 704 00:37:04,000 --> 00:37:05,920 Speaker 1: rid of. I don't think we get rid of rules 705 00:37:05,920 --> 00:37:08,600 Speaker 1: that require trading of stocks, to know who's in each 706 00:37:08,600 --> 00:37:11,120 Speaker 1: side of a trade and encourage inside of trading. Yeah, 707 00:37:11,200 --> 00:37:13,520 Speaker 1: check out the holdings in that one too, the bulk 708 00:37:13,560 --> 00:37:16,759 Speaker 1: of it. Is it the CEO that's got the Yeah, 709 00:37:16,800 --> 00:37:21,160 Speaker 1: it looks like at the chairman ceo. Alright, um, fascinating, 710 00:37:21,440 --> 00:37:25,120 Speaker 1: and we'll have obviously more on blockchain, on bitcoin, I'm sure. 711 00:37:29,480 --> 00:37:32,040 Speaker 1: Thanks for listening to Coast to Coast. You can subscribe 712 00:37:32,040 --> 00:37:35,560 Speaker 1: to this podcast on iTunes, SoundCloud, or Bloomberg dot com. 713 00:37:35,600 --> 00:37:37,680 Speaker 1: You can also listen to our radio show weekdays two 714 00:37:37,719 --> 00:37:40,880 Speaker 1: o'clock Eastern only on Bloomberg Radio and follow us on Twitter. 715 00:37:40,960 --> 00:37:43,359 Speaker 1: She's at Carol Masser. I'm at Corey TV