WEBVTT - US Core CPI Eases to Four-Year Low in Shutdown-Hit Report 0:00:02.520 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Week, 0:00:10.800 --> 0:00:14.680 Daily reporting from the magazine that helps global leaders stay 0:00:14.680 --> 0:00:18.759 ahead with insight on the people, companies, and trends shaping 0:00:18.800 --> 0:00:23.720 today's complex economy. Plus global business finance and tech news 0:00:23.760 --> 0:00:27.760 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.920 --> 0:00:31.720 Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.040 --> 0:00:34.000 Hey, we want to stay though on the markets and 0:00:34.040 --> 0:00:35.760 the ALEC. We've got a great guest to do that, 0:00:36.360 --> 0:00:38.479 and also to get into some new research that they 0:00:38.560 --> 0:00:40.960 had out late last month, six for twenty six Essential 0:00:41.040 --> 0:00:43.600 questions for investors. Investors probably have a lot of questions 0:00:43.840 --> 0:00:46.159 going into the new year. Back with us is Jason Grannitt. 0:00:46.159 --> 0:00:48.639 He's chief investment officer of B and Y. Right here 0:00:48.640 --> 0:00:49.800 in studio. How are you? 0:00:50.120 --> 0:00:50.600 I'm great? 0:00:50.600 --> 0:00:52.120 How are you love the new studio? 0:00:52.400 --> 0:00:52.760 Thank you? 0:00:52.960 --> 0:00:53.800 Thank you cool? 0:00:53.960 --> 0:00:57.120 We're kind of loving it too. How are you loving 0:00:57.320 --> 0:00:59.040 kind of the market environment right now? And how are 0:00:59.040 --> 0:00:59.960 you thinking about the new year? 0:01:00.400 --> 0:01:02.360 Yeah, So if I go back and think about this 0:01:02.480 --> 0:01:05.119 year and we're at the beginning, you think about all 0:01:05.200 --> 0:01:08.760 the wild things that happened. We went through the new administration, liberation. 0:01:09.280 --> 0:01:11.880 People forget that the US military was engaged in a 0:01:11.920 --> 0:01:14.720 war back in the spring, the One Big Beautiful Bill, 0:01:14.760 --> 0:01:19.960 in negotiations, the long government shutdown, these MEGAAI deals that 0:01:20.000 --> 0:01:22.360 happened over the course of the year, and what happened 0:01:22.760 --> 0:01:25.399 kind of what everyone thought would happen. Policy rates are 0:01:25.400 --> 0:01:28.200 a little bit lower, risk assets are higher, but it 0:01:28.280 --> 0:01:31.680 was very nonlinear, and so if I think about twenty six, 0:01:31.840 --> 0:01:34.920 I think it's probably going to feel somewhat similar. Is 0:01:34.959 --> 0:01:37.039 going to be weeks maybe months that don't feel that 0:01:37.360 --> 0:01:41.480 warm and fuzzy, but pretty strong backdrop. You have the 0:01:41.520 --> 0:01:44.920 stimulus coming from the One Big Beautiful Bill. 0:01:44.959 --> 0:01:47.440 Will that be inflationary though, and cause some problems perhaps 0:01:47.440 --> 0:01:50.080 for the FED and the next feduer, whoever that may 0:01:50.360 --> 0:01:51.080 be he or she. 0:01:51.600 --> 0:01:53.320 So, I mean, look, we're talking a lot about the 0:01:53.320 --> 0:01:56.160 inflation data today in questions around it. Obviously the headline 0:01:56.200 --> 0:01:59.760 was softer, but markets are not reacting believing that the 0:02:00.040 --> 0:02:02.200 underbelly of that data is as clean as it could 0:02:02.200 --> 0:02:06.040 be from a hangover from the shutdown. I'm not convinced 0:02:06.040 --> 0:02:08.240 that it's going to be super inflationary. It could be 0:02:08.280 --> 0:02:11.360 a little, it could put a little pressure against it 0:02:11.440 --> 0:02:14.160 and I think, but if you look at where policy 0:02:14.240 --> 0:02:17.200 rates have been trading for the end of twenty twenty six, 0:02:17.600 --> 0:02:20.160 no matter what we've talked about, all those things that happened, 0:02:20.200 --> 0:02:22.679 all the questions about all these different FED people, they've 0:02:22.720 --> 0:02:25.560 been right between two ninety and three ten, and so 0:02:25.600 --> 0:02:29.440 the market kind of has this credibility around where it's heading, 0:02:29.520 --> 0:02:31.600 no matter all these kind of balls that are thrown 0:02:31.600 --> 0:02:31.840 at it. 0:02:32.080 --> 0:02:33.880 Well, I wanted to just talk about the FED a 0:02:33.919 --> 0:02:36.000 little bit because the President did say speaking to three 0:02:36.040 --> 0:02:38.880 or four different candidates. If you look at polymarket, for example, 0:02:39.160 --> 0:02:41.600 the money's still on Kevin Hasset, but Kevin worsh is 0:02:41.639 --> 0:02:46.239 a close second favorite. Christopher Waller's on there too. Michelle Bowman, 0:02:46.360 --> 0:02:49.440 who he mentioned, is still only at one percent at 0:02:49.480 --> 0:02:52.840 this point. Does it matter to you of those four 0:02:53.160 --> 0:02:55.240 who gets picked. Yeah, so we've had a lot of names. 0:02:55.240 --> 0:02:57.280 I think there were five and there were one. Now 0:02:57.280 --> 0:02:57.880 there's four. 0:02:58.760 --> 0:03:01.280 Back to my point, it seemed to be anchored at 0:03:01.320 --> 0:03:05.320 a certain point, no matter where the winds swing on 0:03:05.440 --> 0:03:07.639 these choices. What I would say is, we're still talking 0:03:07.680 --> 0:03:11.040 about a committee. We're still talking about consensus on a committee. 0:03:11.440 --> 0:03:13.280 If you look at the dots that come. It looks 0:03:13.280 --> 0:03:15.840 like a scatterplot. There's a lot of work to do 0:03:16.080 --> 0:03:19.320 to bring people together. So while I think that it 0:03:19.400 --> 0:03:22.720 does matter ultimately over a long period of time, obviously 0:03:22.720 --> 0:03:25.000 who the chair is. We're talking about the New York term. 0:03:25.040 --> 0:03:28.200 This is about building consensus, getting the views, and quite frankly, 0:03:28.240 --> 0:03:30.800 this is a tricky environment, you know, Carol, you raise 0:03:30.880 --> 0:03:34.400 the underbelly of inflation. We have the labor market that's 0:03:34.400 --> 0:03:37.000 a little weak. These are tricky times for both the 0:03:37.040 --> 0:03:38.440 Fed and global central banks. 0:03:38.480 --> 0:03:38.680 Question. 0:03:38.720 --> 0:03:40.680 All right, so you guys have whittled it down to 0:03:40.760 --> 0:03:42.760 six for twenty six is all we tried. 0:03:42.920 --> 0:03:43.400 We tried. 0:03:43.600 --> 0:03:45.480 Was it hard whittling it down to six? Yeah? 0:03:45.480 --> 0:03:47.480 Look, I mean we tried to catch the big themes 0:03:47.520 --> 0:03:50.280 that are out there, right, you know, obviously central bank, 0:03:50.360 --> 0:03:52.840 obviously the dollar, obviously AI. 0:03:53.000 --> 0:03:54.800 We try to capture all those different things. 0:03:54.880 --> 0:03:57.800 Let's go through a couple global economy maintain its delicate 0:03:57.840 --> 0:04:00.000 balance through twenty twenty six, and you just talk about 0:04:00.120 --> 0:04:04.200 forces balancing toward growth acceleration, and I guess those that 0:04:04.480 --> 0:04:05.720 might not be towards that. 0:04:06.640 --> 0:04:10.240 Yeah, Look, it's it's fragile. This is what we're talking about. 0:04:10.360 --> 0:04:12.880 I mean, we think that it can maintain our conviction 0:04:13.000 --> 0:04:14.760 when we went through and did the work to put 0:04:14.800 --> 0:04:17.760 that out as we think that the tailwinds continue to 0:04:17.800 --> 0:04:18.760 aweigh the headwinds. 0:04:18.800 --> 0:04:19.839 But there's some fragility. 0:04:20.000 --> 0:04:23.200 Yeah, the labor report showed you that it's kind of 0:04:23.240 --> 0:04:26.960 not every sector with strength. Obviously, the questions about the 0:04:26.960 --> 0:04:29.720 inflation data are where things are happening. You know, we 0:04:29.800 --> 0:04:30.640 think it does. 0:04:30.560 --> 0:04:32.880 Have the support behind, but it's. 0:04:33.760 --> 0:04:36.240 More closer call than not. Jason, We're going to jump 0:04:36.240 --> 0:04:38.200 around a little bit in the report. The question that 0:04:38.240 --> 0:04:40.440 you have posed, I think a lot of people have 0:04:40.560 --> 0:04:42.360 right now and they look at the US equity market. 0:04:42.920 --> 0:04:44.800 Are US equities overvalued? Yes? 0:04:44.920 --> 0:04:45.080 Or no? 0:04:45.760 --> 0:04:46.000 Yeah? 0:04:46.160 --> 0:04:50.040 I mean obviously this is are some overvalued? 0:04:50.600 --> 0:04:52.240 And what I would say is there's always some that 0:04:52.279 --> 0:04:54.600 are overvalued, and there's always some that doesn't are valued. 0:04:54.640 --> 0:04:57.599 But are there some more right now than usual that 0:04:57.640 --> 0:04:58.360 are overvalued? 0:04:58.480 --> 0:05:00.240 It looked there's a lot of price for perf action 0:05:00.360 --> 0:05:01.920 in the market in certain sectors. 0:05:02.240 --> 0:05:04.520 Right that being said, we are getting some stimulus that's 0:05:04.520 --> 0:05:07.080 coming into the market next year. We do have easier 0:05:07.120 --> 0:05:10.000 or not tighter monetary policy on the horizon. We do 0:05:10.120 --> 0:05:13.359 have fiscal stimulus, corporate tax benefits that are there. I 0:05:13.360 --> 0:05:14.960 think a lot of it's in the price, but we 0:05:15.000 --> 0:05:17.400 think there continue to be a little support on risk 0:05:17.400 --> 0:05:18.880 assets here into next year, for sure. 0:05:18.960 --> 0:05:20.680 Jason, what do you do? Who do you talk to? 0:05:20.960 --> 0:05:22.640 What is the research that you guys look at to 0:05:22.680 --> 0:05:24.919 figure out whether the AI trade, the AI spend, the 0:05:24.920 --> 0:05:27.520 AI build out is getting frothy. Is it just a 0:05:27.560 --> 0:05:29.960 case of looking at valuations or who do you talk to? 0:05:29.839 --> 0:05:31.600 You to kind of get an idea? 0:05:31.720 --> 0:05:33.960 So you can't just look at valuations. These are new 0:05:34.000 --> 0:05:38.080 technologies and new horizons where on some level the raw 0:05:38.080 --> 0:05:42.160 evaluation doesn't really matter as much as what are the fundamentals, 0:05:42.200 --> 0:05:45.640 what's the forward of the different projects, what partnerships you're 0:05:45.640 --> 0:05:48.240 seeing all these partnerships come out, So there's a whole 0:05:48.279 --> 0:05:51.039 series of strategic alliances that are going to be developed 0:05:51.080 --> 0:05:51.600 over time. 0:05:51.640 --> 0:05:55.880 Are you comfortable though, with the circular financing and complicated 0:05:55.960 --> 0:05:58.200 relationships and kind of coosy relationships. 0:05:58.720 --> 0:06:01.960 I'm a bond guy a little. I'm always a little nervous. 0:06:02.000 --> 0:06:02.800 That's how it works. 0:06:03.920 --> 0:06:05.599 So are you know those folks when they look at 0:06:05.640 --> 0:06:08.039 Oracle right and what's going on in their balance. 0:06:07.800 --> 0:06:10.120 Yeah, I think what you're seeing across the horizon is 0:06:10.120 --> 0:06:12.520 that we're starting to sift through and think about who 0:06:12.560 --> 0:06:13.440 some possible. 0:06:13.120 --> 0:06:15.119 Winners and losers are. But this is a long game. 0:06:15.560 --> 0:06:15.719 You know. 0:06:15.760 --> 0:06:18.320 If I think about back in the spring, people are 0:06:18.400 --> 0:06:20.560 questioning Google, what's going to happen to search? What's going 0:06:20.640 --> 0:06:23.000 to happen in that ecosystem? Now people see Google as 0:06:23.760 --> 0:06:26.080 you know, maybe the biggest winner. So these things can 0:06:26.160 --> 0:06:28.960 change very, very very quickly. And I think that we're 0:06:29.000 --> 0:06:31.080 early enough. And we have a little chart that shows 0:06:31.080 --> 0:06:33.920 how early we are kind of in the journey here, 0:06:33.920 --> 0:06:34.920 and that's what I think it's. 0:06:34.800 --> 0:06:36.039 Important for folks to remember. 0:06:36.279 --> 0:06:39.640 We're early days in whatever this AI adventure will be. 0:06:40.160 --> 0:06:42.360 It's not going to be all highs or all. 0:06:42.240 --> 0:06:44.240 Lowse but we're But you know, there's going to be 0:06:44.240 --> 0:06:45.240 some sorting that goes. 0:06:45.120 --> 0:06:47.680 Through what what's the risk, the main risk for twenty 0:06:47.720 --> 0:06:51.560 twenty six? What what gets the train off the rails? 0:06:51.720 --> 0:06:51.800 Ye? 0:06:51.920 --> 0:06:53.560 Look, like I said, there's a lot of fragility. I 0:06:53.600 --> 0:06:55.800 think obviously for the FED and for policy here in 0:06:55.800 --> 0:06:56.400 the US is clear. 0:06:56.520 --> 0:06:57.320 The labor market. 0:06:58.040 --> 0:07:01.120 You seeing a lot of unevenness across the labor market, 0:07:01.320 --> 0:07:05.080 you know, growth is strong, but probably slightly below potential. 0:07:05.560 --> 0:07:09.159 So is there a point where the late taking folks 0:07:09.200 --> 0:07:11.680 out of the labor market brings growth down and. 0:07:11.920 --> 0:07:15.760 That starts to fall further below potential? 0:07:16.600 --> 0:07:20.120 And then look, we've had rate cuts last fall, we've 0:07:20.120 --> 0:07:22.160 had rate cuts this fall, and we still have ten 0:07:22.240 --> 0:07:24.640 years that won't get all four percent. Yeah, and so 0:07:24.920 --> 0:07:27.360 to me, that's something that has to manifest itself through 0:07:27.360 --> 0:07:28.520 the economy still as well. 0:07:28.640 --> 0:07:31.119 Yeah, it's so funny because we dipped below for a moment, 0:07:31.200 --> 0:07:32.880 it felt like, and then we had some guests maybe 0:07:32.880 --> 0:07:34.960 even talking about moving, you know, closer to three, and 0:07:35.000 --> 0:07:37.360 yet here we are at four point one and we're 0:07:37.400 --> 0:07:38.400 sitting there for a while. 0:07:38.560 --> 0:07:39.920 Yeah, it's pretty stubborn there. 0:07:40.000 --> 0:07:41.720 Well, you said, you know, you're a bond guy. So 0:07:41.800 --> 0:07:43.880 the diverging one of the things that you guys are 0:07:43.920 --> 0:07:47.640 talking about the six essential questions for investors. How are 0:07:47.680 --> 0:07:50.520 diverging rate paths shaping fixed income of the US, Europe 0:07:50.520 --> 0:07:52.800 and emerging markets? And this is on a day where 0:07:52.840 --> 0:07:55.320 the BOE and ECB right rained in with rates. We 0:07:55.400 --> 0:07:57.760 get a decision from the Bank of Japan tomorrow. We 0:07:57.840 --> 0:08:01.880 had the FED recently. There are diverging policies amongst some 0:08:01.960 --> 0:08:02.960 central banks, and. 0:08:03.200 --> 0:08:08.000 Carol would say beyond diverging policies, the agreement is not there. 0:08:08.520 --> 0:08:10.600 The Bank of England had a five to four vote, 0:08:10.760 --> 0:08:13.760 very tight. Look as I said, look at the dots, 0:08:13.760 --> 0:08:15.680 it's all over the ECB. 0:08:15.880 --> 0:08:17.280 Look listen to what they're saying. 0:08:17.680 --> 0:08:21.000 It's not everyone is student body rights, student body left 0:08:21.000 --> 0:08:23.000 at all these different central banks. So not only do 0:08:23.080 --> 0:08:26.000 you have different speeds across these, but you also have 0:08:26.160 --> 0:08:29.520 inside there's still some sorting that happened. So when you 0:08:29.560 --> 0:08:32.280 ask about the risks and the things, you can see 0:08:32.320 --> 0:08:35.840 the confusion in the market and even from the experts 0:08:35.840 --> 0:08:36.840 you make these decisions. 0:08:38.080 --> 0:08:42.360 So it could go a lot of different ways into yeah. 0:08:42.240 --> 0:08:44.880 Let's have fun. That's what makes this a fun That's 0:08:44.920 --> 0:08:45.880 what it makes it fun to do. 0:08:46.120 --> 0:08:47.760 It does sound like there's a consensus that we got 0:08:47.800 --> 0:08:49.920 to keep our watch on Washington, whether it's policy out 0:08:49.920 --> 0:08:52.320 of the White House. In so many different ways, our 0:08:52.440 --> 0:08:55.640 policy over you know, monetary policy from the Fed. There's 0:08:55.679 --> 0:08:57.400 a lot that's going to be coming our way that way. 0:08:57.320 --> 0:08:59.400 Yeah, people or policy, and so you got to listen 0:08:59.480 --> 0:09:01.880 to what the people are saying. They push it through 0:09:01.960 --> 0:09:04.800 and that's what happened this year, right, They drove all 0:09:04.840 --> 0:09:07.960 these undulations. But if you talked about where we were 0:09:07.960 --> 0:09:10.160 at the beginning, I think we are where we thought 0:09:10.200 --> 0:09:10.959 we'd beat the end. 0:09:11.400 --> 0:09:12.840 But it wasn't that smooth. 0:09:12.640 --> 0:09:14.480 No, And there were points where you never thought it 0:09:14.600 --> 0:09:17.000 was going to it was going to end out this way, right, Jason, 0:09:17.000 --> 0:09:18.079 Happy holidays. 0:09:17.679 --> 0:09:19.400 Hay Holiday is great to see you. Enjoy your break. 0:09:19.440 --> 0:09:21.280 We'll see you in twenty twenty twenty six. 0:09:21.360 --> 0:09:22.000 Best everybody. 0:09:22.120 --> 0:09:24.640 Yeah, same to you, Jason Granite, Chief Investment Officer, b 0:09:24.720 --> 0:09:26.199 and Y right here in studio. 0:09:27.000 --> 0:09:29.800 Stay with us. More from Bloomberg Business Week Daily coming 0:09:29.840 --> 0:09:30.760 up after this. 0:09:34.840 --> 0:09:38.680 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:09:38.760 --> 0:09:41.440 us live weekday afternoons from two to five East during 0:09:41.480 --> 0:09:44.240 the Listen on Apple Karplay and Android Auto with the 0:09:44.320 --> 0:09:48.559 Bloomberg Business app, or watch us live on YouTube. 0:09:49.920 --> 0:09:53.760 Bloomberg has reported out, as many other news organizations, something 0:09:53.760 --> 0:09:55.680 you and I've talked about a lot tim about how. 0:09:55.559 --> 0:09:58.920 Some including you, just open up the app formerly known 0:09:58.920 --> 0:10:01.520 as Twitter. This is true. 0:10:01.760 --> 0:10:04.040 It's about how some that are wealthy and just some 0:10:04.160 --> 0:10:06.520 in general are concerned about some of the priorities of 0:10:06.559 --> 0:10:09.320 incoming New York City mayors or on Mumdannie on that 0:10:09.400 --> 0:10:11.960 we cut up with Kathy Wilde outgoing presidency of the 0:10:11.960 --> 0:10:14.760 Partnership for New York City. They represent a lot of 0:10:14.800 --> 0:10:17.960 the city's corporate leaderships that we're talking about, real estate developers, 0:10:18.000 --> 0:10:21.920 pe firms, banks, law firms. By the way, Bloomberg Elp 0:10:22.080 --> 0:10:24.000 is a member of the Partnership for New York City. 0:10:24.120 --> 0:10:26.960 Kathy Wilde also part of New York City Mayor Elect 0:10:27.080 --> 0:10:30.400 Zoron Mundani's transition team, and she addressed some of his 0:10:30.520 --> 0:10:33.960 policies that he campaigned on, including higher taxes. Check it out. 0:10:35.000 --> 0:10:37.640 You may raise the rates of taxes, but that may 0:10:37.679 --> 0:10:40.640 not result in more revenues if you scare people away, 0:10:41.040 --> 0:10:43.920 or if you scare companies away, or as we've seen lately, 0:10:43.960 --> 0:10:46.680 we're seeing a real threat to jobs in New York 0:10:46.880 --> 0:10:51.280 for the first time, first time in my experience over 0:10:51.360 --> 0:10:55.000 fifty years, are seeing a decline in the number of 0:10:55.080 --> 0:10:58.559 jobs in our financial services industry. Scary thing. That's forty 0:10:58.600 --> 0:11:01.560 percent of our state income. Text news. We don't I 0:11:01.559 --> 0:11:04.480 mean these are you know, we've got to pay attention 0:11:04.840 --> 0:11:07.640 and I think he gets that. But we've got to 0:11:07.679 --> 0:11:12.000 be at the table discussing these issues and helping figure 0:11:12.040 --> 0:11:15.559 out how to employers help solve the childcare problem. 0:11:15.760 --> 0:11:18.320 It's Kathy Wilde, outgoing president and CEO of the Partnership 0:11:18.320 --> 0:11:20.280 for New York City, also part of New York City 0:11:20.320 --> 0:11:22.440 Mayor like Zorah and Mam Donnie's transition team. 0:11:22.720 --> 0:11:22.960 Carol. 0:11:23.000 --> 0:11:25.000 Here's what our next guest has to say about all this. 0:11:25.120 --> 0:11:27.439 Yeah, great to have back in studio. Frank Sorrentino, chairman 0:11:27.480 --> 0:11:29.840 and CEO at the publicly held New Jersey based community 0:11:29.880 --> 0:11:32.640 bank connect One Bank Core there, the parent company of 0:11:32.679 --> 0:11:35.040 connect One Bank. Great. Great, great to have you here. 0:11:35.040 --> 0:11:35.760 How are you here? 0:11:35.920 --> 0:11:37.520 Great to be here, Great to be the new studio. 0:11:37.559 --> 0:11:38.960 It's fantastic, Thank. 0:11:38.760 --> 0:11:40.400 You, thank you. Yeah, we've been working on, you know, 0:11:40.440 --> 0:11:41.319 real estate around here. 0:11:41.480 --> 0:11:41.760 Huh. 0:11:42.559 --> 0:11:47.520 Tell us about the environment. You are kind of consistently 0:11:47.600 --> 0:11:49.880 optimistic and have been a lot over the past year. 0:11:50.080 --> 0:11:51.000 Is that still the case. 0:11:51.400 --> 0:11:55.400 I'm very very optimistic about where we are. Yeah, and 0:11:55.559 --> 0:11:58.000 especially the journey we've taken this year to get here. 0:11:58.280 --> 0:12:00.320 It's been a you know, quite the roller that are 0:12:00.360 --> 0:12:03.280 up and down, and we certainly didn't start the year 0:12:03.320 --> 0:12:05.840 in the same place. But I really felt the foundation 0:12:06.120 --> 0:12:09.079 was there for a very solid end to twenty twenty five, 0:12:09.600 --> 0:12:13.080 but that foundation now has really created, I believe, an 0:12:13.200 --> 0:12:15.920 unbelievable ramp into twenty six, and I think we're going 0:12:16.000 --> 0:12:18.280 to have a lot less of the noise that we 0:12:18.360 --> 0:12:22.360 heard during twenty five and more focus on how this 0:12:22.440 --> 0:12:24.920 economy is building strength as we move through twenty six. 0:12:25.000 --> 0:12:26.640 I want to go to what Kathy Wilde was saying 0:12:26.679 --> 0:12:30.800 about concern over New York City. She has a close 0:12:30.840 --> 0:12:33.560 relationship with many business leaders. She's also part of the 0:12:34.120 --> 0:12:36.120 mayor's transition team. Last time you're on with us, it 0:12:36.160 --> 0:12:37.520 was just after the election. We spent a lot of 0:12:37.520 --> 0:12:41.439 time talking about politics, specifically housing. Because of your construction background. 0:12:41.120 --> 0:12:42.040 It's a great conversation. 0:12:42.120 --> 0:12:43.679 But the New York City side of things, I mean, 0:12:43.679 --> 0:12:47.400 you've got locations in New Jersey and New York and 0:12:47.480 --> 0:12:49.440 Florida as well, but you've lot locations here in New 0:12:49.520 --> 0:12:51.440 York City, so you understand the economy. What are you 0:12:51.480 --> 0:12:53.480 hearing from your New York City based clients. 0:12:53.480 --> 0:12:56.520 Look, I think the economy in general is very strong, 0:12:56.559 --> 0:12:59.559 but we are, as you just heard, we are on 0:12:59.600 --> 0:13:03.240 the press of if there are changes that drive the 0:13:03.320 --> 0:13:05.600 sentiment to think that New York is not a friendly 0:13:05.840 --> 0:13:09.360 place to do business. We could see change, and so 0:13:09.679 --> 0:13:13.400 certainly that's a concern. We certainly know there's a concern 0:13:13.440 --> 0:13:18.000 about affordability in New York City. But overall, I think 0:13:18.040 --> 0:13:20.120 it's all going to work out. It always has before. 0:13:20.200 --> 0:13:22.320 Does it make you optimistic that somebody like Kathy Wilde, 0:13:22.320 --> 0:13:26.439 who has the year of so many in the business community, 0:13:26.480 --> 0:13:27.760 is involved with the incoming mayor. 0:13:27.840 --> 0:13:28.000 Yeah. 0:13:28.040 --> 0:13:28.679 Absolutely. 0:13:28.800 --> 0:13:31.520 And there's others who are joining the team who I 0:13:31.520 --> 0:13:35.600 think we would all say we're happy they're there. Look, 0:13:35.640 --> 0:13:38.160 at the end of the day, I don't think anybody 0:13:38.160 --> 0:13:43.160 can argue with some of why this mayor was elected. Right, 0:13:43.280 --> 0:13:46.200 the issue of affordability, trying to make a fair system 0:13:46.240 --> 0:13:48.040 for everyone, I think we could all get around that. 0:13:48.440 --> 0:13:50.440 How we go about doing that is a different story. 0:13:50.480 --> 0:13:52.480 How do we I know we talked about this with you, 0:13:52.640 --> 0:13:54.400 and but you know you're a builder, So that's why 0:13:54.440 --> 0:13:56.839 we talk about with you, because you understand these things. 0:13:56.880 --> 0:13:58.600 I'm trying to unpack this. I mean, a builder's not 0:13:58.600 --> 0:13:59.800 going to build a building if it's not going to 0:13:59.840 --> 0:14:00.440 be profitable. 0:14:00.520 --> 0:14:04.800 Right. There's been numerous studies across this country and across 0:14:05.000 --> 0:14:07.720 various time periods. It doesn't matter when, how or where 0:14:07.760 --> 0:14:10.440 you look at it. There's a really interesting story right 0:14:10.480 --> 0:14:13.320 now in the Twin Cities, where you know, one city 0:14:13.520 --> 0:14:17.800 is trying to maintain affordability by government control and then 0:14:17.880 --> 0:14:21.240 the other city is doing it by free market. Let's 0:14:21.360 --> 0:14:25.000 let the builders build because you know, to me, some 0:14:25.080 --> 0:14:27.840 of the laws of economics they like the laws of physics. 0:14:28.720 --> 0:14:32.120 You may like to agree or disagree, but they are 0:14:32.200 --> 0:14:35.640 what they are. And if we increase supply, we're going 0:14:35.680 --> 0:14:38.720 to have lower prices. And that's something I think politicians 0:14:38.760 --> 0:14:41.720 don't typically understand. I mean, if you look right now, 0:14:41.760 --> 0:14:45.760 even in the rent regulated portfolio, rent stabilized portfolio of 0:14:45.760 --> 0:14:51.040 New York City, there's fifty thousand units that are unoccupied 0:14:51.160 --> 0:14:54.080 because they're uneconomical to put back on the market. Based 0:14:54.120 --> 0:14:57.560 on what they're rent stabilized at and the investment needed 0:14:57.560 --> 0:15:01.320 to get them back in order, you would think that 0:15:01.320 --> 0:15:03.560 that would be a priority. We want to get those 0:15:03.680 --> 0:15:06.320 units back into the marketplace because that would help the 0:15:06.480 --> 0:15:07.840 that would help those who need the help. 0:15:07.840 --> 0:15:11.120 So if you were advising a politician, the incoming mayor 0:15:11.160 --> 0:15:13.600 perhaps or I'd love the opportunity to do that what 0:15:13.600 --> 0:15:15.280 would you what would you have to but. 0:15:15.600 --> 0:15:18.000 Not yet, what would we have our opportunity? 0:15:18.080 --> 0:15:20.520 So what would be the suggestion to actually fill those 0:15:20.600 --> 0:15:21.600 vacant apartments? 0:15:22.000 --> 0:15:24.080 Oh, there's there's a number of things we could do, right, 0:15:24.160 --> 0:15:26.560 we could mean test for the people that live in 0:15:26.640 --> 0:15:31.600 rent stabilized apartments. There there are incentives the city could 0:15:31.600 --> 0:15:35.200 provide to entice the builders to be able to invest 0:15:35.240 --> 0:15:37.520 the you know, make the investments they needed each one 0:15:37.520 --> 0:15:40.600 of those apartments to make them viable since they're vacant, 0:15:40.960 --> 0:15:44.000 allow for vacancy decontrol up to some level. I mean, 0:15:44.040 --> 0:15:47.800 there's there's a there's a so many common sense things 0:15:47.800 --> 0:15:51.080 that we could do, probably over at dinner, napkin, that 0:15:51.120 --> 0:15:54.680 would get those those apartments back online in ninety to 0:15:54.680 --> 0:15:55.680 one hundred and twenty days. 0:15:55.680 --> 0:15:56.680 So why is this so hard? 0:15:58.040 --> 0:16:02.680 You know, it's it's how politics works, I don't know. 0:16:02.800 --> 0:16:06.240 And it's a mindset, right, there's a mindset that government 0:16:06.280 --> 0:16:08.440 can do a better job than the market can do, 0:16:08.560 --> 0:16:11.200 when in fact, we've learned over and over and over 0:16:11.240 --> 0:16:14.360 again here in the United States, the market generally is 0:16:14.440 --> 0:16:17.840 able to solve these problems and in a very efficient way. 0:16:18.360 --> 0:16:20.200 Mind you all right, I want to broaden out. We 0:16:20.240 --> 0:16:22.040 always do like to talk to you because you have 0:16:22.080 --> 0:16:26.000 such great exposure to small business and construction generally. How 0:16:26.040 --> 0:16:28.600 are both of those areas doing. And I'm also curious 0:16:28.600 --> 0:16:30.680 about small business as we had a story this week 0:16:30.720 --> 0:16:33.760 about PayPal looking to apply to become a bank and 0:16:33.800 --> 0:16:36.960 really tap into the small business area. It doesn't happen overnight, 0:16:37.080 --> 0:16:40.720 so I'm just curious. You laugh, Do you think that's I. 0:16:40.960 --> 0:16:43.840 Think it's fine. You know what I find fascinating is 0:16:43.880 --> 0:16:47.480 all these companies that want to be banks because in 0:16:47.520 --> 0:16:52.000 the current regulatory environment it's fashionable, profitable and whatever to 0:16:52.040 --> 0:16:52.440 be a bank. 0:16:52.480 --> 0:16:53.880 They've done really well this' here there. 0:16:54.040 --> 0:16:56.360 You know, there are other times in history when being 0:16:56.400 --> 0:16:58.320 a bank is you know, is a little bit more 0:16:58.320 --> 0:17:01.480 difficult than that. And you know, the banking industry is 0:17:01.480 --> 0:17:03.840 not just one particular point in time. It's built the 0:17:03.960 --> 0:17:06.680 last for very very long periods of time, and so 0:17:06.880 --> 0:17:09.200 we'll see how they like the regulatory environment at other points. 0:17:09.280 --> 0:17:11.040 So small business, small. 0:17:10.800 --> 0:17:13.440 Business, I think is doing very very well today. Again, 0:17:13.520 --> 0:17:17.720 the noise is out of the marketplace. People are feeling good. 0:17:17.760 --> 0:17:20.600 I think one of the biggest things we're hearing, notwithstanding 0:17:20.640 --> 0:17:24.280 some of the employment or unemployment information is that small 0:17:24.320 --> 0:17:27.119 business is having a hard time hiring qualified people to 0:17:27.240 --> 0:17:31.840 fill positions. You know, I think they're getting their arms 0:17:31.840 --> 0:17:34.639 around what's happening with tariffs. I think they're getting their 0:17:34.760 --> 0:17:38.680 arms around whether or not there's real structural inflation in 0:17:38.760 --> 0:17:41.840 the economy, and it appears there really isn't. There's been, 0:17:41.920 --> 0:17:45.640 you know, some price setting that's been going on. But overall, 0:17:46.480 --> 0:17:49.240