WEBVTT - Bloomberg Surveillance TV: October 8th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amerie hortert join us each day 0:00:18.760 --> 0:00:22.320 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.360 Terminal and the Bloomberg Business app. Julian and Manuel, i've 0:00:37.360 --> 0:00:40.559 ever call writing the increased probability of a bubble scenario 0:00:40.680 --> 0:00:43.040 gives the S and P five hundred and thirty percent 0:00:43.120 --> 0:00:45.720 chance to rise to nine K by year end twenty 0:00:45.760 --> 0:00:48.560 twenty six. Judian joins us now for more. Julian, good morning, 0:00:48.600 --> 0:00:50.480 Good morning. It's going to see you, sir. Let's put 0:00:50.479 --> 0:00:52.519 some meat on those bones. Thirty percent chance of nine 0:00:52.600 --> 0:00:54.240 K next year on the SMP. 0:00:54.640 --> 0:00:57.720 So if you think about it, actually going back to 0:00:57.960 --> 0:01:01.440 y two K right where all this sort of talk 0:01:01.480 --> 0:01:05.600 of bubbles originated. Over the course of this last twenty 0:01:05.640 --> 0:01:11.680 five years, you have had numerous bubbles, housing, global bond markets, 0:01:12.600 --> 0:01:16.959 Chinese equities in twenty fifteen, meme stocks, this, that, and 0:01:17.000 --> 0:01:19.040 the other, and frankly, when. 0:01:18.880 --> 0:01:20.200 You add all that up. 0:01:20.360 --> 0:01:23.360 First of all, academia would tell you that those many 0:01:23.400 --> 0:01:27.360 bubbles in twenty five years is absolutely impossible. But when 0:01:27.400 --> 0:01:30.399 you think about it, it really does speak to the 0:01:30.480 --> 0:01:34.480 fact that number one, each bubble was larger than the last. 0:01:34.840 --> 0:01:37.480 And from our point of view, when you think about 0:01:37.600 --> 0:01:40.920 Y twok a twenty eight times earnings peak, it's very 0:01:40.959 --> 0:01:44.360 reasonable to think about thirty times a three hundred dollars 0:01:44.440 --> 0:01:46.760 number getting you to nine thousand the s and P 0:01:46.880 --> 0:01:52.120 five hundred, But it's bigger, more grander every time. 0:01:52.200 --> 0:01:54.000 Well, let's speak to this moment. They're our whists of 0:01:54.040 --> 0:01:57.920 vendor financing. We see a video investing in some of 0:01:57.920 --> 0:02:00.640 that companies and in some of that customers, and we 0:02:00.640 --> 0:02:01.800 know that money is going to come back. 0:02:01.720 --> 0:02:02.400 To that company. 0:02:02.680 --> 0:02:04.440 What's different about this moment It seems to be the 0:02:04.440 --> 0:02:06.680 strength of the balance sheets compared to where we were 0:02:06.680 --> 0:02:08.520 in the late nineties and the absence of leverage on 0:02:08.520 --> 0:02:10.960 those balance sheets are some of the major tech players. 0:02:11.080 --> 0:02:12.359 Does that give this more legs? 0:02:12.560 --> 0:02:12.720 Is that? 0:02:12.760 --> 0:02:13.880 How do you think about things. 0:02:13.960 --> 0:02:16.920 Well, again, when you think about the late nineties, you 0:02:17.000 --> 0:02:21.520 were having companies that didn't have earnings, that had barely 0:02:21.600 --> 0:02:25.480 had revenues. That we're doing all the spending on capex. 0:02:25.720 --> 0:02:28.359 You don't have it this time. Most of the companies, 0:02:28.480 --> 0:02:33.040 to your point, have incredibly strong balance sheets. But when 0:02:33.040 --> 0:02:35.480 you think about what we've heard in the last couple 0:02:35.480 --> 0:02:39.799 of weeks, the memory for us is this Japanese phrase 0:02:39.880 --> 0:02:44.160 koretsu cross shareholdings. You saw it in the nineteen eighties 0:02:44.400 --> 0:02:48.800 and the early nineteen nineties, which inflated valuations into the 0:02:48.880 --> 0:02:54.359 Japanese equity market bubble. And look, if you're not concerned 0:02:54.480 --> 0:02:57.680 about the potential knock on effects of all this kind 0:02:57.720 --> 0:03:02.560 of cross shareholder relationships, you're probably not paying sufficient attention. 0:03:02.880 --> 0:03:04.959 So it is this bullish or bearish you're talking nine thousand, 0:03:04.960 --> 0:03:06.760 which sounds great, let's get in. And then you're talking 0:03:06.800 --> 0:03:09.040 about a bubble that's bigger than anything we've ever seen before. 0:03:09.320 --> 0:03:12.680 So and you have to think about it in terms 0:03:12.720 --> 0:03:16.680 of cycles. Okay, what we have been very plain about 0:03:16.840 --> 0:03:22.880 in getting ourselves around the idea that you invest in 0:03:22.919 --> 0:03:27.480 a higher valuation environment is this notion that what end 0:03:27.639 --> 0:03:30.959 structural bull markets. And to be very clear of what 0:03:31.000 --> 0:03:34.760 we had in February to April was a cyclical bear 0:03:34.880 --> 0:03:38.560 market in a structural bull market. What end structural bull 0:03:38.600 --> 0:03:41.760 markets is a FED that's going to be hostile. If anything, 0:03:41.800 --> 0:03:45.080 the FED is going to be perhaps too friendly to 0:03:45.120 --> 0:03:49.160 the point about stalking inflation. Higher yields on the long end. 0:03:49.760 --> 0:03:54.680 Amazing how quiescent the tenure yield has been. And then 0:03:55.000 --> 0:03:58.200 you know recession that doesn't seem to be in the cars. 0:03:58.440 --> 0:04:01.480 But the last thing, the fact that every one of 0:04:01.520 --> 0:04:07.720 these capital market cycles has ended with an incredibly robust 0:04:08.280 --> 0:04:11.600 corporate action pipeline and we're just starting to see that 0:04:11.720 --> 0:04:15.640 form tells you that there's further to run. And as 0:04:15.720 --> 0:04:19.080 difficult as it is, and it is difficult to invest 0:04:19.120 --> 0:04:24.560 in these valuations, and we think that you need to stay. 0:04:24.279 --> 0:04:27.000 Invested, You need to stay investor in the big tech players. 0:04:27.000 --> 0:04:28.760 Does it say anything about the rest of the market 0:04:28.839 --> 0:04:31.279 or is that just a completely different story in terms 0:04:31.320 --> 0:04:34.760 of the economic drivers the areas outside of AI. 0:04:35.160 --> 0:04:40.360 Well, look and again when you think about the demographics 0:04:40.960 --> 0:04:44.080 and know that over the course of the coming decades, 0:04:44.520 --> 0:04:47.200 demographics are going to be ahead when and they already 0:04:47.279 --> 0:04:51.480 are in places like China. That's part of why AI 0:04:51.680 --> 0:04:54.520 has had the impact that it's had. And this year 0:04:54.560 --> 0:04:59.960 we're seeing other companies, the adopters and the adapters really 0:05:00.279 --> 0:05:05.000 start to talk about how they're essentially driving revenue. We 0:05:05.160 --> 0:05:09.280 always knew the cost saving story, but that is very, 0:05:09.400 --> 0:05:11.720 very vital and for us. When you look at the 0:05:11.720 --> 0:05:14.599 internals of the market, what's different between now in the 0:05:14.640 --> 0:05:18.919 late nineteen nineties is that day to day the advancers 0:05:19.040 --> 0:05:24.280 are beating the decliners. The troops, the people in the field, 0:05:24.320 --> 0:05:27.840 the stocks that nobody talks about are going up day 0:05:27.880 --> 0:05:30.440 in and day out, Whereas in the late nineties it 0:05:30.480 --> 0:05:31.400 was all tech all. 0:05:31.320 --> 0:05:33.960 The time, seeing billions of dollars being put towards AI, 0:05:34.200 --> 0:05:36.719 but we're not seeing billions of dollars being put towards 0:05:36.760 --> 0:05:39.880 electricity demand. What happens if the grid can't handle. 0:05:39.600 --> 0:05:43.880 All of this, well, that's absolutely a concern, no question. 0:05:44.279 --> 0:05:47.880 Nine thousand next year, if you can't even develop data. 0:05:47.640 --> 0:05:53.880 Centers, that's a good question. And from our point of view, again, 0:05:54.600 --> 0:06:00.520 it's less about the synchronization of the build out then 0:06:00.600 --> 0:06:05.600 the fact that there is sufficient liquidity to you know, 0:06:05.880 --> 0:06:09.719 really expect the build out to occur over over a time, 0:06:10.080 --> 0:06:13.080 and again I go back to this idea, and frankly, 0:06:13.160 --> 0:06:15.920 we're seeing it. This week was different. Not only did 0:06:15.960 --> 0:06:19.000 you have the largest LBO in history, but I took 0:06:19.080 --> 0:06:23.360 taxi cab rise and they started talking about the stock 0:06:23.440 --> 0:06:27.000 market and they started talking about AI And that's different. 0:06:27.080 --> 0:06:29.840 But that's part of every cycle, and that is how 0:06:29.880 --> 0:06:34.760 you get to valuations that go from rational exuberance where 0:06:34.800 --> 0:06:37.119 we are now to something more extreme. 0:06:37.160 --> 0:06:38.919 I'm not thrown shade at all, but I think the 0:06:38.920 --> 0:06:41.120 camp driver over the past five years has been more 0:06:41.120 --> 0:06:43.960 dependable than the strategist on wolf straight in some ways. 0:06:44.360 --> 0:06:45.000 Is that fair? 0:06:46.320 --> 0:06:50.880 We got cautious, like everyone. We got bullish in April, 0:06:51.160 --> 0:06:52.000 to be clear, but. 0:06:52.760 --> 0:06:54.320 I don't know if that's been the country into kunda 0:06:54.320 --> 0:06:55.920 in quite the same way that they were in the 0:06:55.960 --> 0:06:57.720 nineteen twenties nineteen thirties. 0:06:57.760 --> 0:07:01.320 Well, what's fascinating again is you go back to February 0:07:01.520 --> 0:07:05.359 through April, and the public got this right. Literally for 0:07:05.400 --> 0:07:07.520 the first time in the cycle. The public was the 0:07:07.560 --> 0:07:10.560 buyer the whole way down. And the reason that the 0:07:10.640 --> 0:07:15.360 market has been so unrelenting on the upside is because 0:07:15.400 --> 0:07:18.040 professionals have found themselves under invested. 0:07:17.720 --> 0:07:19.720 It was a shoeshine boy in the twenties, remember all 0:07:19.720 --> 0:07:22.520 that stuff. The story is really different. The performance chase 0:07:22.520 --> 0:07:25.160 gun into year end is coming from Wolf Street. Wouldn't 0:07:25.160 --> 0:07:27.320 you agree I'm taking to clients that missed out in 0:07:27.360 --> 0:07:28.840 the move in April in the last. 0:07:28.680 --> 0:07:31.920 Six months, I would, But I would also say this 0:07:32.320 --> 0:07:35.160 is that the dynamics of trading. They used to call 0:07:35.200 --> 0:07:39.120 it day trading in the nineteen nineties. Now you're looking 0:07:39.200 --> 0:07:43.120 at high frequency trading. But these zero dazed expiration options, 0:07:44.040 --> 0:07:48.760 the gamma effect that causes hedgers to have to hedge 0:07:48.840 --> 0:07:52.400 upside intra day is really unlike anything I've seen. 0:07:54.280 --> 0:07:57.760 Stay with us more Bloomberg surveillance coming up after this. 0:08:06.920 --> 0:08:08.920 Let's turn to the Federal Reserve traders looking ahead to 0:08:08.960 --> 0:08:11.280 the FMC minutes due out at two pm Eastern time 0:08:11.360 --> 0:08:14.000 in Lincoln of BIMO writing twenty five basis point cuts 0:08:14.000 --> 0:08:17.800 in October and December are already a foregun conclusion as 0:08:17.880 --> 0:08:20.640 long as there isn't a more dramatic down to in 0:08:20.720 --> 0:08:22.880 risk assets in joints now for more income mornits. 0:08:22.880 --> 0:08:23.600 So it's good to see you. 0:08:23.760 --> 0:08:25.480 Happy to be here when a Federal reserve is in 0:08:25.560 --> 0:08:28.200 risk management mode. If they don't have the data, are 0:08:28.240 --> 0:08:29.680 they cutting or are they holding? 0:08:30.400 --> 0:08:32.480 I think that they're going to continue to cut, simply 0:08:32.520 --> 0:08:35.000 because the data shift that we saw over the course 0:08:35.000 --> 0:08:38.000 of the summer, including the bitchmark revisions on the jobs front, 0:08:38.280 --> 0:08:41.959 suggests that we are cooling as an economy and getting 0:08:42.000 --> 0:08:44.319 back to normal policy rates. Seems to make sense in 0:08:44.400 --> 0:08:46.160 that With that background. 0:08:45.840 --> 0:08:48.360 I just wonder what you think of this dissonance between 0:08:48.480 --> 0:08:50.920 a labor market that seems to be cooling, in GDP 0:08:51.040 --> 0:08:53.200 that seems to be going strong well. 0:08:53.240 --> 0:08:57.520 As you've been discussing the AI investment capex, everything associated 0:08:57.559 --> 0:09:00.880 with that has not only been driving business spending so 0:09:01.040 --> 0:09:05.040 keeping up the momentum of the real economy, but we 0:09:04.679 --> 0:09:08.960 all faces we are also seeing upside inequities and that 0:09:09.080 --> 0:09:11.640 is fueling consumption because we know the top ten percent 0:09:11.960 --> 0:09:14.840 account for fifty percent consumption in the US, and I 0:09:14.880 --> 0:09:16.920 think that that has been a key driver. And when 0:09:16.960 --> 0:09:20.360 I make the observation about a potential downturn in risk assets, 0:09:20.679 --> 0:09:23.360 if we are going to slip into a recession at 0:09:23.400 --> 0:09:26.359 some point, it's probably going to come from a repricing 0:09:26.400 --> 0:09:28.680 of risk assets. But that certainly is not onknow one's 0:09:28.760 --> 0:09:29.800 radar At this point. 0:09:29.679 --> 0:09:32.000 I guess I'm trying to understand whether it makes sense 0:09:32.040 --> 0:09:34.360 for the FED to cut rights to protect jobs given 0:09:34.360 --> 0:09:36.640 the fact that there is clearly a sluggishness to the 0:09:36.720 --> 0:09:40.120 labor market. You're seeing peripheral spending data showing a slow 0:09:40.120 --> 0:09:42.079 down in September as while I was looking at Citigroup 0:09:42.160 --> 0:09:44.320 data this morning, I just wonder if it makes sense 0:09:44.320 --> 0:09:48.400 to do that if you potentially pose the risk of turbocharging. 0:09:48.600 --> 0:09:51.440 What some people are saying is bubblishest types of behavior 0:09:51.679 --> 0:09:54.400 in other sectors, AI be one of them. 0:09:54.760 --> 0:09:56.560 Well, I think that that's what the FED needs to 0:09:56.600 --> 0:09:58.880 decide over the course of the rest of the year, 0:09:59.000 --> 0:10:02.160 whether they're going to get back to three percent or 0:10:02.240 --> 0:10:05.760 three point five, depending on what estimates you look at, 0:10:05.960 --> 0:10:08.400 or is there a risk that there's still more to 0:10:08.440 --> 0:10:10.880 be seen on the tariff side, Even setting aside the 0:10:10.880 --> 0:10:13.280 bubble issue, I still think that there's tariff passed through 0:10:13.559 --> 0:10:16.120 to inflation that has yet to be realized, and so 0:10:16.200 --> 0:10:19.160 we could see some sticky CPI prints when we finally 0:10:19.200 --> 0:10:22.000 get them. And that's the big unknown is when does 0:10:22.000 --> 0:10:23.640 a government start publishing data again? 0:10:23.720 --> 0:10:24.839 So what are you tracking right now? 0:10:24.880 --> 0:10:27.520 Given the fact that we're not really getting anything official 0:10:27.559 --> 0:10:29.200 from a lot of the sources. 0:10:29.600 --> 0:10:31.520 So I think that we do have ADP, and we 0:10:31.600 --> 0:10:33.679 have ISM, and we have some of the private data. 0:10:33.880 --> 0:10:36.000 But at the end of the day, we're really just 0:10:36.040 --> 0:10:38.520 looking at the day count of the shutdown because the 0:10:38.600 --> 0:10:41.600 longer it goes, the more uncertainty there'll be. And when 0:10:41.640 --> 0:10:44.200 the FED meets later this month, the one piece of 0:10:44.240 --> 0:10:46.880 information that they will really have is whether or not 0:10:46.920 --> 0:10:49.800 the government has been reopened or if we're going to 0:10:49.800 --> 0:10:53.120 push that record long thirty four day shutdown window. 0:10:53.320 --> 0:10:55.000 Do you guys have a base case of how long 0:10:55.040 --> 0:10:56.880 you think the governershupdown will last. 0:10:57.559 --> 0:10:59.800 I think that it will get through the end of 0:11:00.080 --> 0:11:02.920 next week and at the earliest before we start to 0:11:02.920 --> 0:11:05.280 see any movement, because at that point people will stop 0:11:05.280 --> 0:11:07.719 getting paychecks. I assume that there'll be more rhetoric and 0:11:07.800 --> 0:11:11.480 more headlines out of Washington. But it's also a question 0:11:11.559 --> 0:11:14.320 of how the Democrats are going to be polling as 0:11:14.360 --> 0:11:16.760 a result of this, going into what will be the 0:11:16.800 --> 0:11:19.079 run up to the midterm and the politics around that, 0:11:19.120 --> 0:11:20.400 and that's always difficult testamy. 0:11:20.520 --> 0:11:22.800 So the FED will be walking in potentially with that 0:11:22.920 --> 0:11:26.440 base case, with a job report, but not inflation data. 0:11:26.840 --> 0:11:29.000 How concerning is that when the likes of Neil Koshkari 0:11:29.040 --> 0:11:32.400 are sounding alarms on two fastive interest rate cuts might 0:11:32.440 --> 0:11:34.400 be a problem, and there's stiflationary fears. 0:11:35.160 --> 0:11:37.560 I do think that if they happen to have the 0:11:37.720 --> 0:11:40.840 jobs data in hand, that that will be part of 0:11:40.880 --> 0:11:46.040 the story that they can justify cutting because a weaker 0:11:46.120 --> 0:11:48.880 job market is disinflationary on a forward basis. 0:11:48.559 --> 0:11:50.400 And that is again information. 0:11:50.800 --> 0:11:52.520 I do think it would be ideal if they had 0:11:52.640 --> 0:11:54.880 a full set of information, but at the end of 0:11:54.920 --> 0:11:59.480 the day, they're going to adjust to the reality as 0:11:59.480 --> 0:11:59.920 it comes out. 0:12:00.200 --> 0:12:02.520 And since the Fed last night mid September, two year 0:12:02.520 --> 0:12:05.320 bon yields are slightly higher, ten year bon yields a higher, 0:12:05.480 --> 0:12:07.599 The whole curve is shifted higher. What it think that 0:12:07.679 --> 0:12:08.120 speaks to. 0:12:09.000 --> 0:12:11.600 I think we're just in an arrange consolidation mode for 0:12:11.679 --> 0:12:14.760 the market. I think that we now know the direction 0:12:14.840 --> 0:12:18.080 of travel of rates. We have some uncertainty associated with 0:12:18.160 --> 0:12:20.959 the shutdown and what that means more than likely for 0:12:21.000 --> 0:12:23.120 the beginning next year as opposed to the balance of 0:12:23.160 --> 0:12:28.000 this year, and we don't have enough convincing evidence to 0:12:28.160 --> 0:12:31.400 get back to three ninety five ten year yields, but 0:12:31.440 --> 0:12:34.040 also not to get back to four fifty. We're just 0:12:34.160 --> 0:12:36.520 in a range as we see how things play out. 0:12:36.640 --> 0:12:39.000 Don't you think also that the rate story has stabilized, 0:12:39.040 --> 0:12:41.520 because subsequently after the FED meeting, we found out this 0:12:41.640 --> 0:12:44.920 FED is far more divided than was actually revealed in 0:12:44.960 --> 0:12:47.559 that news conference with Chairman Powell. That maybe for a 0:12:47.600 --> 0:12:49.880 lot of people they thought this was the start of 0:12:49.920 --> 0:12:54.280 a bigger rate cutting cycle, something down towards three and quickly. 0:12:54.600 --> 0:12:56.880 And what I've heard subsequently since there's a bunch of 0:12:56.920 --> 0:13:00.400 FED speakers with very different views about the future mentioned 0:13:00.440 --> 0:13:03.240 Neil Kashgawi, there are some individuals that aren't ready to 0:13:03.280 --> 0:13:06.199 go again, never mind go another one hundred. Isn't that 0:13:06.280 --> 0:13:08.120 part of this story as well? How big a feature 0:13:08.200 --> 0:13:08.480 is that? 0:13:09.080 --> 0:13:09.240 Well? 0:13:09.280 --> 0:13:11.240 I think that what the future's market is telling us 0:13:11.440 --> 0:13:14.160 is we're comfortable with a glide path back to three 0:13:14.200 --> 0:13:17.160 percent sometime in the middle of next year. But as 0:13:17.200 --> 0:13:20.880 you point out, there are competing voices on the committee, 0:13:20.880 --> 0:13:24.960 and there do tend to be competing voices when we're 0:13:25.000 --> 0:13:27.960 at an inflection point, and we were at an inflection point. 0:13:28.160 --> 0:13:31.400 I think that Powell's comments in particular, were an effort 0:13:31.480 --> 0:13:34.760 to ensure that there was as much flexibility as possible, 0:13:35.160 --> 0:13:37.320 and he didn't want to pre commit to an October 0:13:37.480 --> 0:13:39.200 or a December move. So I think it's more of 0:13:39.240 --> 0:13:42.280 a business as usual than it is something particularly frightening. 0:13:42.520 --> 0:13:45.160 This is sort of a perverse question, but it looks 0:13:45.200 --> 0:13:47.040 like right now in polymarket it's only a twenty five 0:13:47.080 --> 0:13:49.880 percent chance that the shutdown ends before October fifteenth. You 0:13:49.880 --> 0:13:51.959 said that this is the one piece of data that the. 0:13:51.880 --> 0:13:52.679 FED is going to have. 0:13:52.720 --> 0:13:54.600 It's new which just how long the shutdown's going on. 0:13:54.880 --> 0:13:58.000 Is that bond positive at the end of the day. 0:13:58.000 --> 0:14:00.560 I think it is because it's more uncertain and we've 0:14:00.600 --> 0:14:04.400 spent a lot of the the last four or five 0:14:04.440 --> 0:14:08.679 months with a TREBUTI will related on uncertainty as well 0:14:08.720 --> 0:14:11.800 as now shut down related uncertainty, and that has led 0:14:11.840 --> 0:14:14.400 to a stalling out on the labor front, and until 0:14:14.440 --> 0:14:16.480 we have more clarity, I think people are going to 0:14:16.520 --> 0:14:19.640 be a lot more reluctant to hire, more reluctant to spend, 0:14:19.800 --> 0:14:22.800 and I think it's going to eventually be gone positive. 0:14:25.080 --> 0:14:28.600 Stay with us. More Bloomberg surveillance coming up after this. 0:14:37.880 --> 0:14:40.640 The analyst David Deck Obama, TD Cow and covers some 0:14:40.680 --> 0:14:43.400 of the companies that Trump administration has invested in, and 0:14:43.440 --> 0:14:46.440 has this to say, Investors have to ask who's next. 0:14:46.600 --> 0:14:49.400 Stocks are moving fantastically on this news, no matter what 0:14:49.440 --> 0:14:52.120 the actual details are. David joins US Now for more. 0:14:52.240 --> 0:14:55.000 David Gomardick, morning, Thanks for having me. Your job has changed, 0:14:55.400 --> 0:14:57.440 It has changed. Indeed, sure the White House is now 0:14:57.440 --> 0:14:59.800 picking the winners. How does that change your approach? 0:15:01.080 --> 0:15:05.120 You know, similar to my comments before, it was interesting 0:15:05.120 --> 0:15:07.920 in their prior conversation here talking about, you know, what's 0:15:07.960 --> 0:15:09.920 the process behind all of this and what's the intention? 0:15:10.120 --> 0:15:12.920 And I think real really it's true for the administration 0:15:13.040 --> 0:15:15.720 one to some extent to make an investment on behalf 0:15:15.720 --> 0:15:18.040 of taxpayers, but also I think to raise the profile 0:15:18.080 --> 0:15:20.840 for the general investing public that these companies are a 0:15:20.880 --> 0:15:24.000 priority and that these industries are a priority. And now 0:15:24.040 --> 0:15:26.480 everyone obviously has their hands out and you've seen companies 0:15:26.520 --> 0:15:29.360 openly talking about and disclosing. We're having conversations with the 0:15:29.480 --> 0:15:33.280 USDO Department of War, We're having conversations with the Pentagon, 0:15:33.960 --> 0:15:36.880 and I think it just sets the stage for what 0:15:37.640 --> 0:15:41.200 should be triggering a multi year investment process in the 0:15:41.240 --> 0:15:42.400 broader material sector. 0:15:42.560 --> 0:15:44.680 Theoretically, a lot of people could get behind this, and 0:15:44.720 --> 0:15:47.720 it seems like it does make sense at least according 0:15:47.760 --> 0:15:50.200 to both sides of the aisle. And what they've put 0:15:50.240 --> 0:15:52.800 out there is the administration picking the right names. 0:15:53.600 --> 0:15:57.040 So I would say, with their first investment, and I'm 0:15:57.120 --> 0:15:59.120 not going to speak on Intel, so let's look at 0:15:59.120 --> 0:16:02.160 them P Materials. They're the largest rare earth miner in 0:16:02.200 --> 0:16:05.680 the Western Hemisphere. I think that was a very logical 0:16:05.760 --> 0:16:09.240 chosen champion for this administration to get behind because it 0:16:09.320 --> 0:16:12.640 unlocks multiple parts of the supply chain for rare earth 0:16:12.920 --> 0:16:16.120 and ultimately magnets. You also saw a follow up deal 0:16:16.160 --> 0:16:17.880 with Apple right on the heels of that, So I 0:16:17.880 --> 0:16:21.400 think all of these things were connected. In the context 0:16:21.480 --> 0:16:25.560 with lithium Americas, the government was already involved with a 0:16:25.600 --> 0:16:28.520 substantial loan that the DOE had approved under the Biden 0:16:28.520 --> 0:16:33.120 administration under the ATVM loan program, which sought to really 0:16:33.160 --> 0:16:36.880 propel the lithium supply chain in North America, largely around 0:16:36.920 --> 0:16:38.640 the proliferation of electric vehicles. 0:16:38.920 --> 0:16:39.840 We've walked back. 0:16:39.720 --> 0:16:41.960 A lot of the EV tax credits and incentives there, 0:16:42.400 --> 0:16:44.720 but I think there was still partly a recognition on 0:16:44.760 --> 0:16:46.480 the part of the government that were already in bed 0:16:46.480 --> 0:16:49.320 with this company from a loan process. Let's sort of 0:16:49.360 --> 0:16:52.120 rework some of the terms. Did it actually improve the 0:16:52.160 --> 0:16:55.440 outlook for Lithium America's I would argue perhaps, no, it 0:16:55.480 --> 0:16:58.920 really just diluted there, really deluted the equity holder at 0:16:58.960 --> 0:17:01.200 that point. But it does obviously raise the profile and 0:17:01.240 --> 0:17:03.720 the stock moved up well over one hundred percent, you know, 0:17:03.760 --> 0:17:05.920 without really caring what the details were. 0:17:06.280 --> 0:17:08.760 So can you just basically look at whoever the US 0:17:08.840 --> 0:17:10.760 is given a loan to and say that probably will 0:17:10.760 --> 0:17:11.440 be equitized. 0:17:12.240 --> 0:17:14.359 Sure, you could certainly build. I mean, you've seen a 0:17:14.359 --> 0:17:17.040 lot of names already moving in anticipation that they're going 0:17:17.080 --> 0:17:21.000 to receive funding in some form, and logically you would 0:17:21.040 --> 0:17:23.639 anticipate that every single company in the material space that 0:17:23.680 --> 0:17:26.399 has a project at least on the whiteboard at this 0:17:26.480 --> 0:17:29.800 moment is having active conversations. So I think you can 0:17:29.840 --> 0:17:32.800 probably still make money that way, because at some point 0:17:32.880 --> 0:17:34.760 you have to ask how does this all end? You know, 0:17:34.880 --> 0:17:36.439 is the government going to be trading out of these 0:17:36.440 --> 0:17:39.119 equity positions. It's not as though there's always a contribution 0:17:39.200 --> 0:17:42.880 that's coming with this, and at this point, I think 0:17:42.880 --> 0:17:44.520 it's safe to say that there. 0:17:44.400 --> 0:17:45.520 Is no end in sight for this. 0:17:45.880 --> 0:17:48.160 Well, some people think that this is just the beginning 0:17:48.160 --> 0:17:50.080 of potentially US sovereign wealth fund. 0:17:50.680 --> 0:17:51.320 How you do it? 0:17:51.640 --> 0:17:54.959 I mean, I think in some cases that's already very 0:17:55.040 --> 0:17:58.080 much the case, except you know, in theory, I suppose 0:17:58.119 --> 0:17:59.840 this is being done with tax payer money. And you've 0:17:59.840 --> 0:18:03.360 seen some funds reallocated from areas like the Chips Act 0:18:03.359 --> 0:18:05.840 and some other funding, and I think it's really just 0:18:05.880 --> 0:18:09.360 going to try to accelerate a lot of these investment opportunities. 0:18:09.400 --> 0:18:12.320 One official was talking about, there's hundreds of deals that 0:18:12.480 --> 0:18:14.520 right now are being proposed. Could you see by the 0:18:14.600 --> 0:18:17.560 end of Trump's first term, hundreds of companies the US 0:18:17.640 --> 0:18:18.760 government has a stake. 0:18:18.560 --> 0:18:21.639 In, And theory short, look look at all these stakes. 0:18:21.640 --> 0:18:23.640 And what's interesting about a five to ten percent stake 0:18:23.640 --> 0:18:25.880 because some of these are coming with board membership, right, 0:18:25.960 --> 0:18:31.679 so the government is becoming an active member of management oversight. 0:18:32.200 --> 0:18:34.720 They're not necessarily helping with execution, but they can help 0:18:34.720 --> 0:18:38.480 on the contracting side. And if you think about, you know, 0:18:38.840 --> 0:18:41.480 hundreds of companies out there, taking a five percent equity 0:18:41.480 --> 0:18:43.960 interest in some of these companies that's coming costless to 0:18:44.000 --> 0:18:47.359 the government. Sure in theory, right and if you're an 0:18:47.359 --> 0:18:49.440 executive right now and you see the potential to re 0:18:49.600 --> 0:18:52.960 rate your equity by hundreds of percent and then on 0:18:53.000 --> 0:18:55.359 the back of that perhaps raise additional capital in the 0:18:55.400 --> 0:18:58.600 markets just by giving the company, you know, the government 0:18:58.600 --> 0:19:00.840 five percent of your company. That's a very difficult deal 0:19:00.880 --> 0:19:02.679 not to side long term. What does this do for 0:19:02.760 --> 0:19:07.159 competition in this space, Well, I think that it does welcome, 0:19:07.160 --> 0:19:10.880 at least in the United States, that everyone can get 0:19:10.920 --> 0:19:13.000 involved in the supply chain. Look at rare Earth's for 0:19:13.000 --> 0:19:16.159 instance right now. Yes, they've championed MP they've given them 0:19:16.200 --> 0:19:19.720 a floor price, and you've seen actually the the NDPR 0:19:20.160 --> 0:19:23.600 market for rare earths, you've seen pricing move substantially higher 0:19:23.880 --> 0:19:26.360 up to ninety dollars a kilo. In August they gave 0:19:26.400 --> 0:19:28.359 them one hundred and ten dollars a heilo price floor. 0:19:28.560 --> 0:19:31.520 I think that it provides opportunity for everyone within the 0:19:31.640 --> 0:19:34.720 within the United States and really allied nations to come 0:19:34.760 --> 0:19:37.320 forward with projects to try to re short of the supply. 0:19:37.080 --> 0:19:38.360 Chain as quickly as possible. 0:19:40.080 --> 0:19:43.359 Stay with US multiple IMPEX savidance coming up off to 0:19:43.440 --> 0:19:54.280 this right to that kind of ay Right and his 0:19:54.359 --> 0:19:56.520 right camp bat now expecting the Feds and low interests 0:19:56.560 --> 0:19:59.840 right back to back Masinx right rights in the following this, 0:20:00.000 --> 0:20:04.080 it's increasingly fragile backdrop, compounded by data vacuum and policy uncertainty. 0:20:04.320 --> 0:20:06.800 It's likely to tell the balance of FED policy makers 0:20:06.800 --> 0:20:09.080 correct joint just now for more. Greg and Mornik, Good morning, 0:20:09.480 --> 0:20:10.880 No data, no problem. 0:20:11.760 --> 0:20:15.320 No data means more caution when it comes to how 0:20:15.400 --> 0:20:19.240 business leaders, how economists, how FED policy makers are going 0:20:19.280 --> 0:20:22.320 to react. I've been talking with a lot of business 0:20:22.400 --> 0:20:25.199 executives that are concerned about the fact that we're not 0:20:25.200 --> 0:20:28.160