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Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. US equities are heading deeper into the red, with the down Jones Industrial Index down eight tenths of one percent after President Trump said that he was calling off his summit with North Korean leader Kim Jong un. Here to talk about the implications of this is the Banker to the World. He should know about what to expect from this, as he has been in a lot of these types of negotiations.
Bill Rhodes. He is the President, chief executive officer of William Rhodes Global Eiser is also the author of the book Banker to the World Leadership Lessons from the front Lines of Global Finance. Bill Uh, I gather you weren't all that surprised that these have become some complicated discussions between North Korea and UH the US, But what did you make of today's announcement. First of all, it's great to be with you guys. Again, I'm not surprised because
I know Korea quite well. I restructured their dead I led to discussions on the chorus FDA, the Free trade Agreement UH. And the North always, whether it be the grandfather who started the dynasty, Kim Il Song or his son Kim Jong il has passed to this one, they always agree to do things on the nucle disarmament and then they back off on it as soon as they get the goodies from US. Uh, you know, in the
sense of food, grain, whatever. And so UH I was highly skeptical from the beginning that he would be willing to give up the one thing he's got, which is you know, is nuclear weapon and missile capacity as a as a chip uh and agree to do a Libya type thing where you know, Cadafe gave up everything. The question is where do we go from here? And UH, we still have a big problem in Korea and what
are we gonna do about it? Uh? And so I think what we have to do is lean on China because remember on your show, I mentioned again and again the linkage between China UH and Korea and I've done our eds on it because of their energy comes in from China. And so if we don't get the Chinese willing to do the sanctions, there's there's no push to
go ahead with US. But the US has been pushing them to do this, and North Korea, as so far as I can tell, hasn't really gotten anything yet from the US, and China seems to be working and playing ball with the US on trade negotiations. What broke down here? Why? Now? I think a couple of things. One you saw over the last few weeks, Uh Kim Kim jong loons made
to trips to China. The Chinese or orchestrating this to a great degree, and the Chinese are using this as a pawn, the chip in the negotiations on trade with the US. UH. And I think we've been a little naive in the administration thinking that we could get the boast the best out of both worlds because we're asking the Chinese to reverse their policy, longstanding policy of taking
advantage when the be intellectual property on trade. UH. And then expect, uh, you know, as we begin to push him as we should push them, then expect that uh, we're gonna get Chi Jin pain to push Kim Jong un to do a deal with us, So you really can't break that link between the two. And I think that if that was a view of the administration, and some people think it was, it was naive. UH. The other thing is, I think when we deal with the Chinese, we need a common front. And all the stories you're
picking up in Washington. You've got the minutein UH and the Larry Cudlow and discussions on one side wanting to, you know, be more favorable to China. And then you you've got Leightheiser, who is the trade represent representative, tough guy on trade UH and Peter Navarro who always had a problem with China on the other side, with Wilbur Ross,
Commerce Secretary in the middle, and UH. What we've got to understand is that getting Kim Jong un to the table UH is important, but you've got to have some preconditions there on the basis of what is his view of denuclearization And from what I can pick up, his view is step by step, which is what the Chinese have been advocating for years with the Six Party talks,
and we thought we would go in there. John Bolton was saying we're going to get a Kadafi type deal where he just gives it up UH for uh, you know, removal of sanctions. So I think we've got ourselves a difficult situation here, and with the trade with China is key noting to the Chinese economy, but to our economy and the world economy. So I hope the administration can get its act together on how they're gonna work on both sides here, because there is that linkage between China
and North Korea and you can't doubt it. The other problem we have is you have a very nice person who's president of South Korea, but his one goal in life because I know him going back to when his chief of staff of a former president, President Noe, that his one goal in life is reconciliation with North Korea and UH, so he'll virtually do anything to get that reconciliation. So it's a very very difficult point where we're at.
And since we're talking about trade, I should mention that one of the things that I think we need to really move on. I was with President uh Prime Minister Trudeau last week. I sat with him in the diets of the New York Economic Club and He was making the point that you know they'll be flexible in Canada, but also they got to be realistic. He says, they'll be patient, but uh, we need a deal on after.
And one of the things it troubles me is at the elections in Mexico or coming up July one, and you have a candidate there who basically says, if this isn't done by the time he takes office in December, he's gonna want tougher conditions. The topics are a trade political instability not only in Asia but also closer to home between Mexico, Canada, the United States, ongoing renegotiations of NAFTA, as well as deterioration in the Turkish Lera. Here to
help us understand more about this is Bill Rhodes. He is Banker to the World. His book is called Banker to the World Leadership Lessons from the front Lines of Global Finance. And Bill, I would just offer that your book not only is about what you have done in the world of finance, but whom you have met, the people that you have met and interacted with, And I think that that's a key element to bring out because most action is done by people it's not something that
falls from the sky. And I'm wondering if you could just describe for us what you believe is the sort of issue when it relates to the Mexican economy and the upcoming Mexican presidential elections and the people involved. Well, this is a big election year for Latin America. We all we already had this the blackle down in Venezuela, where you know, a dishonest election where less than half the people even showed up to vote. We have Mexico,
as you mentioned, we also have Columbia, and we have Brazil. UH. This is the biggest election year in recent history in Latin America. So what happens here is key as far as Mexico goes. Lopezo Brador, who's to the far left UH, is running ahead in the polls. UM. Now some of the candidates have have dropped out, and we'll have to see what finally happens. But the election is is basically
almost a month away. It's it's July first, and he's made statements that on two areas, one that UH that he's going to look at the the oil contracts have been given out by the pinion Yet of government which has helped the Mexican economy grow, to see if they were done fairly or in a corrupt way, which is
you know, concerned people. And then the other thing is, uh, since we don't seem to be able to reach an agreement with Pinioneto and Trudeau in Canada, Uh, what will happen with NAFTA and after's key to all three countries and not only economically but security was and so it's a very concerning situation. Uh. And uh, the Mexicans are concerned. Uh, we should be concerned here and I know the Canadians just having sat with with Prime Minister Trudeau uh on
the diets when he spoke last week. And by the way, I think I was very much impressed because he says he'll be patient, uh to get this thing done because it's so important, but it's got to get done. So you know we're talking about Maxo. I want to I want to just shift in general to emerging markets. You mentioned Venezuela also clearly there in a crisis of humanitarian, political,
and economic proportions. The Turkish lira, meanwhile, is continuing to fall out of bed, down about four percent today, even after the emergency rate hike yesterday by the Turkish Central Bank. UM. Given your experience with restructuring debt and helping Brazil during the the e M crisis in the late nineteen nineties and as vice chair of senior vice chair of City Group, you know how significant is this? Are we heading toward another emerging markets crisis of that magnitude? I think it's
a very good Uh, it's a very good question. I was with Paul Krugman a week ago in Argentina at a conference and he and I were talking about it, and I noticed he's come out with tweets since Yes, he has said that it is. It's actually resonate. Resonates because he and I I on the private sector side, he in academia, were the two who called the Asian financial crisis UH, and mine came out in the Financial Times article. His came out with a paper or study.
I would say there are similarities, but there are big differences. I think the similarities are as you get some of this UH liquidity what's been slashing around now to get us out of the Great recession. I've said this on your program before and Bloomberg Television. We're gonna see rates go up in the United States, which we are, the quantitative easing is being ratchant back and some of this search and reach for yield is is going to come
back and hit us. And one of the groups that took advantage of this a number of countries in the emerging markets borrowed heavily in foreign currency, sometimes short term as in the case of Turkey, in the case of Argentina, longer term and UH. Those countries who have fiscal deficits UH and aren't prepared to face this I think could be in trouble, particularly if we see the FED continuing to raise interest rates, which I think they will UH,
and the quantitative eas in going out. Just having come back from Argentina, President Macari was very much the darling of the markets. But he has a program called Gradualismo, which is gradual reform. And the problem is when you get into difficult situations, you can't be gradually about it. You've got to be more upfront. And I think he did the proper thing, although it was tough for him to do, to call in the I m F to get some support so he can implement the rest of
the reforms. So Argentina was the one over the last few weeks where interest rates went up to they raised them three times. UH. The I m F and we came one week, which caught the imagination. But Turkey, and something I said twice on Bloomberg Television over the last three months, Turkey has been hanging out there because their heavy borrow is a private sector short term and they haven't moved interest rates up fast enough, and so you
have tremendous pressure on the Turkish lira. UH. And Urvan keeps telling the central bank not to raise interest rates because his view of the of the of of of economics is that central bank should have low interest rates and then you won't have any inflation. Well, unfortunately, I don't think Devon ever took a course in economics. But that's another situation. And so I think that what you have here is you have the possibility of those countries
UH that could have problems. And the other element to throw in this is that if the price of oil sticks in between seventy and eighty, that'll be big for the oil exporters, except as well where the production has collapsed, which I forecast in my early eighteen January oh ed. But I think that what will happen is those countries who are importers are going to be hit. So that's kind of a triple whammy. So we just have about forty five seconds here. Who is the next shooter drop
which nation in developing markets? Not clear because it's going to depend. Also if you have an ease up in uh by Opec uh and the Russians are talking about maybe easing up somewhat to keep the price from going too high in the South East. Han agreed. So it's it's not clear. But just in general, a lot of the African countries have barred very heavily in foreign currency, and I think that uh a number of them are oil importers, so they could have they could have problems.
So we have to see how this, you know, this uncertainty uh that we're facing unfolds, but it's something that needs to be watched without a doubt. And uh, you know, I see people on on TV and radio and everything saying, oh, this is not going to be a problem. I think it could be a problem. It depends on how every
individual country handles. But if you told anyone even at the beginning of this year that Argentina would be asking for a standby line, they'd have laughed at you because they have just bought those hundred year bonds and they Yeah. Bill Rhodes unfortunately have to live it there. You could continue for another hour. Bill Rhodes, President, chief executive officer of William R. Rhodes Global Advisors, author of Banker to the World, also former Seatre, Vice chair of City Group,
has been in all of these negotiations. A wonderful voice on this day. This is Bloomberg. Shares of General Motors higher today as well as Ford Motor. General Motors up about seven tenths of a percent. Forward Motor up nearly one percent. This comes after the Trump administration is trying to use national security laws to consider imposing new tariffs on vehicle and automobile parts imports. Here to tell us
more about this is Alan Boum. He is principal of Boum and Associates and based in West Bloomfield, Michigan, and he joins us now. Alan, thank you very much for being with us. If these tariffs of as much as on automobile imports, where do you put in place? What would that do to US automobile manufacturers? Oh? Chaos, because
us automobile manufacturers is obviously a broad term, UM. And you know, let's take the clock back to the nineteen eighties when the Japanese were importing huge amounts of products into the US, and we had voluntary agreements which in fact worked far better than even the people at the
time thought. And what I mean by that is Toyota and Nissan and Honda to start and others later established production here in the US, and that it matters where the vehicles come from, because if you're producing here in the US, your supply is obviously much better than when you're trying to get products from Japan, where a lot of other markets might be trying to do it. And so the result was, UM that the Japanese UH had tremendous products, they were very efficient, and UH really presented
presented huge problems for the Detroit Three. So, Allen, I'm just wondering, I'm sure after the reports have come out now, UH, that there will be a host of lobbyists that will head to President Trump's office and try to convince him to either go through with the tariffs or to abandon them all together. So I'm wondering General Motors and Ford, for example, are they going to be for these or against these? Well, obviously it depends upon uh, you know,
how they're put together. Uh. Just how Canada and Mexico fit into all this. Um Ford, for example, brings in, uh the Eco Sport from Turkey. Uh. They're talking about bringing in the Focus, which is now no longer produced in Michigan from China. Um and GM brings in the Envision from China as well. UM. So all automakers are global um and there it's not just their assembly footprint
but their supplier footprint. And this could be very destructive to their relationships with their suppliers who are used to a certain process. And that could mean higher prices for the automakers to buy from the suppliers, and obviously that gets backed on. So alan who is actually arguing for these I mean, who's lobbying President Trump saying this is a fantastic idea. Uh that's interesting question because I think it's much more from the political side than it is
the business side. Uh. You know, this is obviously some of the UH labor organizations might be comfortable with this, but I say might because of the the unintended consequences, and of course the other thing. Using this national security law as part of the justification creates a whole lot of problems in terms of legal and trade policy. And of course this is a cliche, but it's true. Business
hates uncertainty, and this is clearly uncertain Alan. Is it possible that this is also somehow entwined in the ongoing NAFTA negotiations? Oh sure, and uh, you know that is uh for all of the automakers. That's a critical thing. You know. I was reading something this morning, uh, and it said that eight million vehicles are are imported into the US. And I looked at that and said, oh, that's crazy. And then I realized that they were talking
about Canada and Mexico, which were half of that. Um. And you know, we don't even think of those as imports. NAFTA is obviously a fact of life. UM. And so yes, there are four million imports from outside DAFTA. But clearly the NAFTA processes is absolutely critical to the industry. And again I go back to the supplier base where uh, you know, the automakers have said, if you want to supply US, we want the Mexico price or the China price, and oftentimes that is meant suppliers have opened up new
plans in low cost UH locations. So, Ellen, when you head into Detroit and meet with people at the big US carmakers, is the feeling that this will all just settle down and that it's mostly just a trade negotiation tactic or is there real fear? Well, the you know, there's so much uncertainty day to day in what the policy is. And I go back to Mike Cliche, I mean,
look at the fuel economy is situation. The automakers want some relief, but they didn't want relief that would get the hornets going in in California to get legislaed, to get the lawsuits going, and more uncertainty. And so now they're saying, wait a minute, we really mean that we just wanted a little little things on the edges here. Please don't don't don't draw the whole system into the correct Alan, and that's that's where we are Allan, thank you so much for joining us. It's always fun having
you on. Alan Baum is the principle of Baum and Associates, which is based in West Bloomfield, Michigan. Uh and is a firm that's focused on automotive research for the analysis of auto sales. Really interesting discussion and definitely uncertainty the word of the day and the year, maybe the decade. Donald Trump. President Donald Trump is set to as sign a revamp of Dodd Frank financial legislation. He has expected to sign that at the White House. We will of
course bring that to live. Uh. The final vote in the House it was to fifty eight to one fifty nine in favor. It was a bipartisan Senate crafted bill and is designed to loosen regulations for many community banks and regional lenders, including custodian banks such as a State Street. Here to tell us more about this is our own Arnold Cucuda. He is our banking and credit analyst for Bloomberg Intelligence. Arnold, thank you very much for being here.
Maybe just tell people a little bit about I believe there's sort of three areas that this is really going to effect. Yes, so this bill is actually it's it's more about helping the regional banks. So anybody really under two billion of assets? Right, So basically the systemically important financial institution threshold, which used to be a fifty billion, is now going up. So what up to Basically what that means is less regulation for those banks that fall
between this. Now for some of the bigger banks, like uh, you know, I look more at them, the US systemically important banks. So in that area State Street and Bank in New York, they're going to get some capital relief in terms of um, you know, not counting Central bank deposits at at the FED and the e c B from their denominator of of a ratio, which basically it will help boost that ratio for those banks. So definitely
helped to some regional banks. And people have been saying that we might see a consolidation in smaller banks as a result of this. I want to shift gears a little bit because we are seeing uh the shareholder meeting of Deutsche Bank unfold and it shares down nearly five percent in Germany. Uh, you know right now after announcing that it would uh cut more than seven thousand people. I think one big question is what's its plan? I mean, what's its strategy? What does it want to be? Yes,
we know it wants to cut costs. What next? Well, so it's it's funny because it was supposed to be no more, no more crying, you know, faith and Christian. But you know, I guess. You know, even though investors got what they wanted, Uh, still you know, do what do what they say? Still don't like it. So uh
the strategy is UM. You know, today was kind of a reiteration and kind of filling in the blanks of hey, you know, the new CEO came on board and said, hey, we're gonna shift focus, you know, cut um our reliance on the corporate investment bank. But it's it's only just a little bit, right, so they're currently seen they had about fifty percent revenue coming from the corporate investment bank. That will be you know, uh sorry, uh they sent from non c IB that'll go to So it's really
only your small shift. And in terms of the cuts coming in equities of head count there that you know, it kind of makes sense there because you know that's an area that they've act UM technology UM. I guess investments were lagging there UM And I think that carries over into the whole firm where you're seeing leaks of oh they had you know, posting collateral of of a couple,
you know, dozen billions and stuff. While you know these for huge mistakes, they accidentally transferred millions in some cases billions of dollars to other places mistakenly and had to you know, beg for it back. I mean they say they caught it in a few minutes. But you know, just this kind of stuff happening is a little bit baffling, to be honest. So, um, you know, it just goes underscore kind of the the investment in technology that has been lacking. And you know, even as they're cutting back,
they still need to do this kind of stuff. Right, So even though maybe in cash equities where it makes sense to pull back, you know, in other areas of the firms, they still need to continue this um technology investment just to keep up and comply with regulation. Right. So arnold, what kind of bank would Deutsche Bank b after they eliminate these seven thousand positions? Well, I mean, so the thing is there there there ski ailing back to not be global everywhere, but they're still going to
have a big presence. So it's kind of like, you know, they're trying to show, hey, we're doing something, but you know it's the sum. It may feel like it's not enough, and and I guess you know, you see that today where the stock is down almost six percent, and um, you know, so so they are saying, hey, we are cutting back, but you know what, are they doing this for the shareholders or are they doing this because they have an internal vision of what they really believe Deutsche
Bank can be in the next three to five years. Uh. Yeah, so they have to do this in terms of Um, the problem with Crying, they said, is, hey, there was a vision John cry In, the former chief executive. He's replaced by Christian Saving. Correct, Yes, so, um, the problem with him is okay, fine, he set us on a course, but he didn't execute in terms of the cost implementation
and things weren't going fast enough. So um, you know, going with an insider Christian Saving in this case, Um, kind of, it's really a continuation of the strategy almost, although it's put more hard numbers and you know, so so for him to execute, he has to come in at this you know, billion of costs for this year, twenty two billion next year. But it's it's only you know, maybe going down to twenty one billion one. But in
terms of what is your profitability at that standpoint? And then the whole issue is, uh, for Deutsche Bank, they don't have like a great thing outside of the corporate investment bank asset management. Yes, good, but it's very small. They the i P at a quarter of it um. But you know, unlike like a UBS or a Credit Swiss which said all right, we're gonna scale back the
investment bank trading. Oh wow, this we have this great wealth management business, highly profitable and uh you know, steady business for Deutsche Bank where you have his core Germany, and the returns they're are very meager, right, and so and they're kind of more going into there with you know, they they had the strategy reversal of Okay, initially they wanted to sell post Bank. Now they're they said they're gonna keep it and now they've more integrated it with
their with their core Blue bank in Germany. So but but they are making progress, they're right. So they are making progress there, and so you know, they expect going forward that they'll have some expense savings down the line um and and in terms of kind of adding to the pool of profitability, they can add the post bank um profitability to to help pay for their um you know,
additional two of one coupons. They're they're a T one cocos. Yeah, talking about their cocos I'm looking right now at their six perpetual bonds. Uh that mature well, their perpetuals uh. And I remember people were watching these back in early they tanked unconcerns that Deutsche Bank would have to raise more capital and these could potentially be wiped out. They since recover their value, but they've been declining, and I'm
wondering what this means. Does it mean that that investors think that perhaps Deutsche Bank will be forced to raise more capital again and that they will somehow be pressured on that front. Well, there's definitely concern right. Um, you know in the US marketing, I followed the seven and halfs and stuff, but the dB seven and a halfs and basically that that's down ten points on the year, right and peeking out about a hundred and seven. Now
it's about nineties seven. So it's kind of steady decline and you know one, yeah, but I mean still training about parts. It's not like okay, hey, you know there anytime. It's not gonna go bust any time, but you know when at your annual showhold meeting where you're like where the CEO is like we intend to pay the coupon, I mean that's not a great scene. That's the big
news is that we're gonna remain current on our debt. Yes, so um, but but but the concern is, hey, if you have a bank that you know, the past three years you had negative earnings, right, and so basically you're in search of profit and so the pool to pay these profits, you know, unless your firm is profitable, you're
not adding to that, right. So there definitely is concerned that hey, maybe you know there there might you know, the firm might have to kind of um stop paying coupons, right, And so there's Ligalymking certain So in terms of where their capital is right now, um, they're about a hundred and fifty basis points above kind of where they need
to be. So capital looks okay, but but you remember, you know last year they did an a billion capital rays right, And so Deutsch has a history of setting targets kind of falling short and then saying we don't need capital. Oh huge capital rays right. So you can't have this cycle repeating. And I think that's why you have this new Seeo in place and hopefully he can
you know, turn their ship around. But even even the target that you're spying to is not not all that all in swaring and I think you know the six percent stock down today, the reaction to that is, you know it's not an on spine target, but can you even get there? Right? That's I think the issue are not just just a one last thing on on Deutsche Bank. I'm looking at various league tagles, whether it's US investment grade corporates, are high yield or even European bonds, loans,
equity or offerings and so on. They're not in the top. They're not number one in anything. Well, I mean fixing come is where they're strong at right and uh, but you know they have lost talent over the years. Um. I guess looking back you can say, hey, you know, they had a lot of really good entrepreneurial uh folks you know who are able to find, you know, ways
to make money, but you know at what cost? Right, And I think that's what they're paying for right now, is Hey, you know, maybe sometimes the right compliance was in place, or or sometimes they you know, they kind of bordered on the close of the edge and so but you know, fixed income is still an area that they're strong and although you know kind of they didn't announced they're going to pull back in the US rates, but some you know in the credit you know that's
that's a strong area structured credit that that's what they're gonna, you know, still keep and they say they still are going to maintain a global presence. So thank you so much for being with us. An important story. We will continue to follow it. Arnold Kukuda is a banking and credit analyst for Bloomberg Intelligence, talking Deutsche Bank on this
day when they do have their annual shareholder meeting. What we also are waiting for from the White House and from Congress is some kind of infrastructure bill, which we had been talking about and then it kind of died down as we talked about everything else. Joining us now is someone who knows a lot about the needs of the U s infrastructure, Gary Nomic. He has a vice president of Engineering and American Water based in where he's at New Jersey. Gary, thank you so much for being
with us. You know, we've heard not that much about the infrastructure plan that we have in this country. Do you have a better sense of what's happening and what needs to get done? When we talk about the aging infrastructure of the United States. At first, it's a pleasure
to be here, happy, happy to be with you. UM. The infrastructure situation is one with a lot of needs and a lot of support among the among the public, and I think it's fair to say that UM, to solve our problem, it's going to take a unified effort not only from the federal government but also local funding and private capital sources. The American Society of Civil Engineers came out with their report and it rates our drinking water UM infrastructure as a Grade D and so we
we have work to do now. I'll also say that, to use a bad pun the glasses maybe half full, is that we're blessed in the United States with plentiful supply in many places and you can go UH many places and not worry about the quality of the water you drink. But our infrastructure is aging. We are facing UM extreme weather events that our water systems need to be resilient to. So so we have our challenges UH, and it's going to take continued funding to to meet
the needy. Is the infrastructure that exists in the United States ready to withstand an upcoming hurricane season? One of the UH. One of the unique things about drinking water is that it's so local. There are fifty thousand water utilities across the country because water is so heavy to move. It's not like electricity where you can send an electron
from Florida to Michigan. So it's all local, so fair fair answer to that question is that many places are ready, but there are there are probably towns that need to do work to be ready for that. UM My company, American Water, where we have a continuous UH investment program capital investment. We're going to be investing over seven million, seven billion dollars over the next five years for these type of preparedness things, both the sustainability and the resiliency
of our assets. Gary, you also formerly worked at the US Environmental Protection Agency, and putting money into the infrastructure is one thing. Having oversight and making sure that the regulations are such that people are ensured to get clean water is another. I'm wondering do you feel like the current e p A is doing what it needs to
be doing to make sure that Americans have clean drinking water? UM. I think the the e p A, and speaking mainly on the health protection side, UH, the e p A I think has been UH proactive and and appropriate there are There are ninety contaminants that are regulated, and there are many others that they're giving health guidance. And for utilities like ourselves, we take that guidance and we proactively try to take measures that are protective of the of
the customers that we serve. Gary. Is there any estimate as to how much needs to be spent in order to secure the nation's infrastructure? Yes, UM, there have been several studies. UM e p A has done, one of the American Water Works Association, also the American Society's Civil Engineers have come up with slightly different numbers, but they all converge around a really really big number, somewhere around a trillion dollars over the next twenty to twenty five years.
And the perception is that the amount of investment on average in the US that's happening is probably about half of what the long term sustainable target should be. So there is what is called the infrastructured gap. So I'm just wanting you You said earlier that water and sort of whether there could be a disruption really is a local issue, and I'm wondering and given the fact that we have seen some climate disruptions and increase in the
amount of hurricanes, etcetera. I'm wondering whether there are certain regions in the United States that you view as more vulnerable to some sort of disruption in the face of some storm or frankly just rising tides. There are certainly areas like coastal cities that have the potential impact from
climate change in sea level rise. But our our company, American Waterworks, serves over two hundred water systems all across the country, so we see it all, and I think just about everywhere there's something we need to be worried about by. By its nature, water plants are near near rivers, very awesome, subject to flooding, um or or droughts or you know, wildfires out west. Well, to comfort you a little bit again, because many utilities are doing the proactive investment.
Give you example, we have a treatment plan in central New Jersey which was built in the fifties with a floodwall. However, um the storms have been higher than they used to be, and so we're investing thirty seven million dollars to raise the floodwall above a level um the historic level to protect it in the future. So it's really all about this proactive investment UM by cities, by UH companies like ours to be to be proactive on on many of
those needs. Carry would the creation of an infrastructure bank at the federal level be useful to jump starting much greater expenditure of money on the private side to help infrastructure be improved. I think it can be. I think it's in all of the above solution where UM federal funds or and or things like UM loan guarantees by the states and so forth, they can leverage that funding to bring in higher amounts of investment. Is all. H
is all a positive step. The need is so big that it's going to take an all of the above commitment. Local communities are going to need to recognize the true cost of the service and the true cost of of investing in it, and the federal government can can, as you said, help jump start that. All right, Since you're an expert in water, I I need you to admit something on public radio UM right now that anyone who grew up in New York and has traveled to Florida
knows New York City has the best tasting water, doesn't it. UM. I've been told that we have some places we might give you, uh, we might give you a taste steff to run for the money. Really where oh um, I'm trying to think where we've won awards. I know we every states generally have a best Tasting I think we wore may have warn Yeah, yeah, we have the best tasting awards. Um, all matter. I guess of Palette, New York, certainly, uh certainly was strong because it was an upland source.
So uh, I guess a lot of people would uh would support your conclusion. I think we're going to leave it. They're very diplomatic. Well done. Gary now Mick is the vice president of engineering for American Water and also a pretty good water taster. I would imagine h absolutely has the best aging water, I mean, compared to Florida. Certainly. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,
or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox, I'm on Twitter at Lisa I'm all it's one before the podcast. You can always catch us worldwide on Bloomberg Radio.