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Jeffrey Cleveland joints us here.
He's the chief econosces of Payden and Regal. He's out there in La. I have no idea where he is today. Hey, Jeffrey, talk to us about inflation. What are you feeling about inflation these days? Is it whipped? Is it under controlled? Do we have to be concerned about it? What did the cpidea to tell you today?
Well, Hi Paul, first of all, coming to you from London.
Nice.
That is the uh pinal name England in the background. So yeah, a little bit different than you today. But CPI is it dead yet? I don't think inflation is dead yet, but we're moving in the right direction. I think the key number this morning point three, the month to month change in core CPI that rounded up to point three, so it was actually unrounded.
It was like point two eight.
That implies in our you know, quick math, something like a point two reading on the Fed's preferred gauge of inflation, the core PCE, which will get later this month.
So point two percent on core pc is roughly consistent with the Fed's inflation target.
So I think this does keep the FED on track to cut again at the December meeting.
That's the that's the key takeaway from the report for me.
There's been debate about rate cuts and how they may sloan the coming months, possibly to every other meeting pays starting in twenty twenty five. We've also had some commentary from FED officials this week, like Neil Cashkari talking about how high productivity points to higher neutral level. Before they were thinking it was around three percent, now could potentially be higher than that. Just given that they're way on what potential fiscal policy will come out of Washington over
the next year. Where do you view the pace of recuts in the coming months.
Yeah, we see another one in December, as I said, and then I do think they slow the pace of cuts in twenty twenty five, so maybe they go to once per quarter, so you get four over the balance of twenty twenty five. And yeah, I mean as you get closer to the range where you think neutral is that maybe you can slow down as you approach, as you approach the station, something like that. It's really hard to say where neutral is. Our guess is somewhere around
three and a half percent. I think that's a good bet at this point, maybe a bit lower.
We'll have to see.
That is notably higher than we would have told you pre COVID, so we probably would have been around two and a half percent at that time. So it's I think you can make a good argument that it's a little bit higher, But I think you could also argue that nobody actually knows with any degree of certainty.
So we'll have to see.
Jeffrey, we're going to get retail sales on Friday. A what are you looking for there? And B what's your sense of the consumer out there?
I continue to be excited, elated.
I mean the strength of the consumer. It's holding up very nicely.
Paul.
Through all the data that we've seen thus far this year for US have paid and regal, the most important data point is aggregate consumer income.
I mentioned that probably one hundred times on this program.
It's still growing, Paul, five percent in nominal terms, five percent year on year as of the latest set of data.
That's important because when the US consumer.
Has income, they tend to spend and that keeps GDP going, and that's what we're seeing we've been seeing, so I think you'll see that reflected in retail sales. The only caveat that I always give the clients is that retail sales is really mostly goods and so it's a subset of overall consumer spending, so don't get too fixated on any one month of retail sales. We think the US consumer is in solid shape.
Looking at the GDP now model for the fourth quarter, I know it can be volatile, but so far it's around two and a half percent growth there, and obviously we're going to have more earnings that are geared toward the consumer next week, including Walmart here when it comes to more of the crucial holiday quarter, which usually is the gangbuster quarter that powers consumer spending in more than two thirds of GDP growth, How are you viewing the final months of the year.
Yeah, I've been pretty upbeat on our US GDB call all year relative to consensus. Right now, we think Q four to Q four for twenty twenty four, GDP is going to be about two point four percent, and if the fourth quarter comes in as you say, as that now cast implies, there's potentially some upside risk even to
our optimistic take. So that's very good news, especially if you go back to I don't know this time last year, a lot of prognosticators, a lot of investors were saying that our recession was inevitable, that given the fact that the FED had heightd as much as they had that with a lag we were going to see a down, and we just really have it. The consumers remain resilient and GDP growth looks great, So I think, for me,
what's the moral of the story here? We have a situation that we've had maybe five times in the last three or four decades, where the FED is cutting rates so becoming less restrictive, and the economy is still growing at a pretty good clip.
When those two things are moving in the right.
Direction, it's good for risk assets, So you know, equities, large cap, small cap, whatever you want us equities, but also credit sectors in the bond market, and we have a very good high yield strategy. I think that will continue to do very well given the GDP backdrop and the fetter reserves actions.
All right, Jeffrey, thank you so much for joining us. By the way, go to the Royal Arms pub Bank Street mentioned my name. They will take good care of you. Jeffrey Cleveland, Chief economisce paid in and regal. He's over there in London seeing clients and doing the good work there.
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Backdown to Washington, d C. Lard Davison joins us.
She's a politics editor for Bloomberg NEWSDWN in Washington.
Laura, A lot to cover here.
President elect Trump in Washington speaking to lawmakers earlier today. What's the feeling in DC as to We're start getting more and more information on some of his cabinet picks, on some of the people he's appointing to special positions, whether it's Elon Musk or you know, in the Tzar type positions.
What's the feeling in DC this morning?
So there's certainly been a couple surprises. Late last night, there was a pick for the Department of Defense, Peter Hegseth, who is a Fox News personality. He does have a military background, but this one raised a lot of eyebrows around the world of people having to actually google and figure out who is this guy.
So that was one of the surprises.
We also see some other key loyal going into other national security posts, someone like John Ratcliffe, who is the Director of National Intelligence. During Trump's first term, he will take on.
To lead the CIA.
Of course, earlier in the week we saw Christy Nome installed at DHS, and also Tom Holman, who will be in one of those ZAR positions at the White House overseeing immigration and sort of these mass deportations that Trump has talked about. So where we've seen these appointments go is where you can kind of get a sense of what Trump wants to do in his early days. So immigration is going to be high on that list national security, but also this new what they're calling DOGE or the
Department of Government Efficiencies. Of course, this is the sort of position that Elon Musk has dreamed up for himself. The Vekraamaswami will be joining him there. This is not an actual cabinet job. This isn't an actual department, sort of a presidential commission, which means its powers and.
Scope will be more limited.
But we can't expect that we'll see Elon Musk around. He's actually today with Trump in Washington, and he was at a meeting with House Republicans just a couple hours ago.
I'm glad you brought up a Vicroamaswami, who's also supposed to co lead that new Department of Government Efficiency, because he said in a post on X this morning that a federal government needs a massive downsizing. What type of influence do you think he could wield on the president?
So far, his influence has been massive. You know, he's been at mar A Lago helping make some of these key picks. He's been joining phone calls with foreign leaders. Musk himself says he thinks he can cut about two trillion dollars from the federal budget. It's unclear if he wants to do that in one year or spread over a longer period, but two trillion dollars is a massive amount. That would basically be sort of all of the government spending.
You know that isn't you know, Medicare, Medicaid, some of those entitlement programs, you know, financing the debt, those sorts of things. So this is a really big task that he wants to do, but he'll probably find it's a little bit more difficult than what he did at Twitter, for example. You can't just kind of come in and start firing people. There are This is the federal government, so there are more rules and regulations and guardrails in check.
Okay, from that big picture topic to another one, deportations. Is there any plan coalescing around what the score of those might look like, how they might actually get it done?
So far, not much, but there's a lot of questions about logistically what this will look like and who is going to pay for this. You know, Trump has said he wants to deport somewhere between fifteen and twenty million people. You know, there is some money and some things that the agencies like Department handle onmeland Security could start doing, but it is very likely that they're going to need money from Congress to really get this off the ground.
Of course, Congress is looking like it will be held in Republican hands, but still, you know, it's government spending. You know, in many cases needs sixty votes in the Senate, they might be able to get it by with just fifty, meaning they can do it with just Republicans. But spending a lot of money, and Trump is said he wants to spend as much money as it'll take. That's going to be probably one of the first policy fights we see play out in Washington Post January twentieth, Lord.
Davison, thank you so much for joining us, Lord Davison. She's a politics editor for Bloomberg News from Washington, DC.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays ten am Eastern on Apple card Playing and broun Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Jessman, She's sitting in steal outing back Monday, which is the good news. Paul Sweeney live here on Bloomberg Interactive Broker Studio. We're streaming live on YouTube seever, YouTube dot com search Bloomberg Podcast and that's where you will find us lots of political discussion this hour. Again, President like Trump in Washington, DC, meeting with President Biden in the White house. We had a little couple I guess a minute or so of some sound from those two great.
It was brief, brief, but they did do this.
Being presumably there media behind closed doors and getting things done here.
Henrietta tres joins us.
She is managing partner and director of Economic Policy at Data Partners. Henrietta, what do you make of the last I guess eight days from last Tuesday, you know, with some perspect to here what happened?
Well, I think some of the most exciting things to happen is coming out from my conversations with folks on the Trump transition team as they're trying to staff up, really enjoying the sort of parlor game of who's going to be nominated in which key positions. I think there is a lot of enthusiasm and anticipation around who might be the next Treasury Secretary. That's where a lot of our clients are focused, a lot of conversation around what the role for former Ambassador Lithheiser might be.
As the new trades.
Are there's really just sort of this brilliant feel of you know, now we get to really put into effect all of the things that the Trump campaign hoped they'd be able to do. Obviously optimistic and hope or enthusiastic about the fact that they got the House at long last and declared in their favor.
So just a lot of enthusiasm and excitement is what.
I'm getting out of the Trump camp today, Henrietta.
Of course, there are a lot of questions about tax as well as trade policies. When you're speaking with your clients, who do they feel like would be best to lead the Treasury Department?
Best is a relative term.
I think if it came to Bob Lintheiser, for whatever reason, he has made pretty clear that he wants that role, I think the market would respond very negatively to that. He's obviously very supportive of tariffs and extraordinarily competent, as we saw from the Section three oh one tariff in the trade war with the US and China. That's something that they would very much anticipate if he came in at Treasury, which is, you know, on the street, the
most important and powerful position in the entire administration. So I think that if Bob Laittheiser were to be Treasury Secretary, there would be a lot of trepidation and anxiety on the street for Scott Bessett, who has.
Been making the rounds for months now on Wall.
Street, there is an understanding that he would prefer sort of a gradual approach to tariff's, but it still raises a lot of eyebrows when you hear him say directly, I think that every month tariff shooting five percent. Those are, of course tireffs that are passed directly onto the US consumer. So there's there's really a lot of anxiety around tyriffs
in general. There's also a lot of attention around this idea that Elon Musk, with his potential new commission, could trim two trillion dollars in federal spending over the next four years. That's a non starter. That's not how governing be. The appropriations process works. That requires sixty votes in the Senate and two hundred and eighteen in the House, neither of which are going to be achievable. So there is a lot of focus there just on understanding the realm of the possible.
But obviously this is an.
Ex official committee, and Congress generally doesn't cotton two outside committees of out elected officials.
Henriette with a little bit of hindsight here and Given what we know with the House, how much of a red wave is this election season.
Well, the House is definitely a huge problem, especially since, as you just mentioned, Trump is taking at least two of the House members with him to the White House. So based on the numbers that we have right now, the majority for the Republicans in the House is going to be even smaller than it was this last cycle. I think two three four seats is what we're looking at this point. So governing is going to be incredibly difficult,
and they have some really heavy lifts to tackle. One of the things that we're focused on a lot right now is how much can they do? How much can they do on the tariffront in terms of collecting revenue in from tariffs and factoring that into the tax bill. It's worth remembering that Congress has not legislated on tariffs in eighty years, and there's a reason for that.
It's really difficult.
It leads to material ramifications and trade wars with not just China, but also retaliation from the EU and other nations that we impose tariffs on. By actually voting on tariffs, that puts House members in particular in a unique position to be railed against by their voters in the upcoming midtorm election. So there's going to be a really hard road ahead to pull a tax together just in general. And once you or if you do add terrifts to
the equation, it becomes even more difficult. With scant majorities of two, three four seats, you're really going to struggle on that one.
What about when it comes to the debt ceiling because a lot of this won't transition until early next year, So when you're coming up against potential deadlines around the holidays, how could this shape out?
Yeah?
So I think early discussion that I've had with Republican Senate staff in particular, is that they would join the debt ceiling with the tax bill.
That has some advantages and some disadvantages.
The biggest advantage is that it gives you a deadline of probably July of next year to pass the tax bill. If you combine the two of those issues together, you can pass a bil via reconciliation that does not require any Democratic votes. So Republicans can forego any negotiations with Democrats and pass a debt ceiling bill on their own terms. That is, of course something that House Republicans have not
acted to do in almost two decades. They have perpetually relied on majority support for debt seil hikes and appropriations bills from the Democratic Conference, even when they're in the minority. We've seen that play out repeatedly in the last couple of years. So I think the debt ceiling potentially riding along with the tax bill has the advantage of making the tax bill an urgent must pass thing much earlier in the year than otherwise would be achievable July versus December.
But it is a very heavy political lift.
And to do the debt ceiling be a reconciliation, you must increase an authorization by a specific dollar figure.
You cannot suspend it through May twenty twenty eight.
You have to provide a one and a half two trillion dollar debt ceiling hikes specifically, and that will equate to a debt ceiling of thirty four thirty five trillion dollars, which is a very hard vote for, in particular Republican members of the House to take.
Henryetta my civics is a little rusty here. Remind us, how do we replace a member of the House or the Senate that joins an administration.
How does that happen.
It's different for every state. They have different rules around when it has to be achieved. Whether there's a special election, that depends how close you are to the election, But in general, it's up to the state and the local governing officials in that state at the governor's level, to pick up a replacement in the interim. They will also call special elections. That's going to be in each state's by laws.
That's interesting. So as far as what that means moving forward, what's the timetable on when those seats would be filled.
Well, they're going to want to get them filled as fast as possible, particularly in states where there's going to be a Republican replacement. I think the easiest way to look at this is probably from the United States Senate standpoint, because so many Senators are likely to go up to
the administration, not just JD. Vance, who's obviously now the Vice president elect, but also a whole host of senators like Marco Rubio, potentially Tom Cotton, Bill Haggerty, Marsha Blackburn, every one of those state officials who's in a position to replace or with a special interim appointment, a senator.
Is going to be in a position to do that.
So, whether that's maybe Ron De Santis, the speculation right now is that Laura Trump is in the offing to replace Rubio, those are going to be things that they want to do quickly, because even on the Senate side, you only have fifty three seat majority for Republicans. If they lose a whole host of members that go probably in January and February up to the White House when they get confirmed, you're going to need those replacements immediately,
otherwise you won't have functional majorities. So they're going to all do that very quickly on the House side in particular.
So, Henriette, given what we know about the makeup of both houses of Congress, what do you think is on the to do list for Congress in twenty twenty five.
Well, we're going to get through the lame duck session here, We're going to do an emergency spending bill for the hurricanes Helene and Milton. There's still going to be an NDAA, there's still a farm bill component. There's going to be efforts to pass a very small focused tax bill providing tax and senates for home rebuilding.
After disasters.
But into next year, you should expect Congress to do really the two things that they have to do, which is the debt ceiling and a tax bill, and then beyond that very little. It's very much going to be focused on the appropriations process, which, as I mentioned, does not leave room for cutting federal spending because you're going to have to get ten to twenty Democrats in the Senate and maybe as many as eighty to one hundred.
In the House.
So it's going to be pass the debt ceiling, pass a tax bill, and then just work on a bipartisan way to keep the government open for the rest of the last three years of the Trump term. It's effectively a repeat of what we saw from his first term tax tax in the first year, and then trade for the next three years after that. In this case, I think tarriffs will start almost immediately, but that's not going to be up to Congress.
That's going to be up to Ambassador.
Leithheiser, who will be sort of a trade zar for the current conversation. And then Congress will do the backbreaking work of passing a budget, passing appropriations bills, hyping the debt ceiling. In the tax bill, and I suspect that's largely it.
All right, Henrietta, thank you so much for joining us. We've learn so much speaking with you. Henrietta tres Managing partner, director of Economic Policy for Beta Partners.
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Jess meant and sitting in for Alex Steel on Paul Sweeney Live here in our Bloomberg Interactive Brokers studio, or streaming live on YouTube as well, So head over to YouTube dot com search Bloomberg Podcast. All right, Jess, I'm looking at the Mortgage Bankers Association thirty year fixed contract for mortgages six point.
Eighty six percent. Dude, we were at six percent recently. I thought I was going to refive the mortgage on the Jersey Shore.
You haven't been able to do that.
Not happening. I don't know what's going on.
Alex Steel's able to get a great before.
speA never ever moving we want to talk.
We love talking real estate here, both commercial real estate and residential real estate, and.
We can do that today with some good, good folks.
Best Freeman, chief executive officer for Brown, Harris Stevens and Abigail do Little, chief market strategists, are correspondent for Bloomberg News, both of them joining us here in our Bloomberg Interactive Brokers studio. Best talk to us just about Let's start with New York City. How's the New York residential real estate market these days?
You know, the New York City market has been challenged lately. The last few years, I would say two have been slower than usual. Volume is down, and I think inflation is a part of that. And obviously rates that you know, top nearly eight percent for a thirty year, they have asolutely been coming down. Inflation has been coming down, but it's you know, all the stuff that's been going on and the economy has kind of created this challenged housing market.
And I know you also are looking at your Connecticut, New Jersey as well as Florida. Where do you see different divergences between if you're looking more the South versus where you're looking in the Northeast.
You know, the challenge in the South is more one of inventory, So we lack inventory there and anything that comes on, you know, it moves pretty quickly. And places like Connecticut where we have offices, same thing, And people, as Paul had said, don't want to put their homes on the market because they locked in such a low rate.
So we're kind of doing the stance with buyers and sellers and that's starting to come apart a little bit now and we're hoping to get more fluidness as we move into twenty twenty five.
So last week, we of course had a little bit of news in this country the election of Donald's Trump. And I've been dying to ask different real estate people, and you happen to be the first. What do you think the impact of his potential administration? Just right now? There's so many different asset classes outside of real estate that are moving, and then his actual administration, there's this expectation of inflation, even though his last administration didn't have
that inflation. Are you hearing or feeling what might be ahead for real estate based on the new administration coming in?
I mean, the one thing that Trump mentioned was that he was going to remove the cap for the salt deduction, which he actually put in place in twenty seventeen, So that could be a good thing. But I think we're open to collaborate and create a good environment. As you probably know, there is something passing in city Council today that will be deeply damaging, we believe, to the real estate industry. So we're hoping to be able to collaborate,
work together. And I hope that Trump coming into office doesn't push this far left agenda further left because that would create more problems for us well.
So talking about what is the vote today, the Fair Act, my understanding on it is essentially to eradicate broker fees for renters, and the stated purpose is to lower moving costs for those renters. You know at some point though as somebody who has you know and still am a renter, you know, it always gets passed along at some point. So what is your view on this. It sounds as though you're not necessarily so favorable. But it's not as though brokers are gonna not take fees, no, of.
Course, And what you said, I mean you're not in the real estate industry per se, but you get it. What's gonna happen is that landlords are gonna have to raise rent and there will be unintended consequences to this legislation that the city Council just refuses to take into account. We've had discussions, we testified there a whole bunch of people, landlords, people from the industry. We talk to them. We expected collaboration, and instead of that, a few weeks ago, they basically
jammed this legislation down our throats without any discussion. And I think that is creating the challenges because without discussion, collaboration and creating responsible legislation, you know you're gonna ostracize communities and you're gonna actually hurt the people you're trying to protect, which is they're missing the point.
So I also rent sixty five percent of Yorkers do, because that's a big part of the market. I somehow I was able to get a rent stabilize a purban. So I feel like I'll probably end up dying there because I'm not gonna want.
To give it up.
But I mean, it's just so expensive to try to find other options, especially even when you're trying to rent. So when you had so many people leave New York right during COVID, but then so many people come back. I mean, what do you do with the kind of conundrum with it becomes the rent prices.
I mean that's the challenge. The market sort of sorts that out, you know, and real estate professionals work with renters, they work with landlords, they work with everybody. So I think you want to work with your community. Look, the city council doesn't have a monopoly on caring about their community. We all care about our community and working together is the best way to get things done. So listen, Rental prices are a challenge. I get it. It's an expensive city.
New York is so as Boston. Many places are. But that's about the market, and that's how things sort of sort themselves out.
Where do you think thirty year mortgage rates need to go to before the marginal seller will come on to the market and say, okay, now it's not so bad the costs for me to move here.
What do you think that is it? Low? Six percent? Five percent?
I've been what i've I mean, the below six is what we hear is like where people feel comfortable. Again, mortgage rates are still historically low. Remember they were in before my time in this business or anything, they were in the double digits, So a six percent thirty year and you know what, you can refinance if rates, you know, dip further. So that's what I've heard is that if they dip below six, people are getting into the market.
And so I was watching that.
It sounds like everybody's watching that because you know, most I think sixty percent of people who own homes have mortgages, So it has a big impact.
You know.
One thought that comes to mind in terms of this fair act, if it is passed, I think that the average price for a one bedroom doorman apartment here in Manhattan is more than four thousand and maybe forty two hundred or something like that. So if all of a sudden that five to twelve percent fee gets passed along through rent, are we going to see the average rent in New York a year from now be you know, closer to five thousand or something.
I mean, I think that's what the impact of something like this would be. Well, because you know, landlords sometimes pay the fee, sometimes they don't. If you look on aggregator sites, fifty percent of time roughly they pay the fee, and fifty percent of the time, they don't, and so
this is sort of burdening them with that. And then there's a lack of transparency because consumers aren't going to know what's available because agents won't be marketing and posting the floor plan and the photo, so you're not going to know what's out there. It's not a good way to go about doing business.
Yet it's being signed in today.
It's being signed in today. The mayor has spoken about it. He's been vocal. He believes obviously they have good intentions, as we all should proceed like that, but he thinks it will have negative and negative impact. He's he's been encouraging them to reconsider it.
Best Friedman, thank you so much for joining us. Best Freedman.
She's the chief executive officer Brown, Harris Stevens and Abel the Little chief markets correspondent for Bloomberg News. Joining us here in our Bloombergin directed brokers.
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Just meant sitting in for Alex steel on Paul Swinging. We're live here in on our Bloomberg Interactive broke the studio, streaming.
Live on YouTube as well.
One of the more fascinating things to come out of President like Trump's election is the role of Elon Musk.
The world's wealthiest individual.
Apparently he's been with the president ever since the election. Joe Matthews just reporting he's in DC todays in mar A Lago before Yep, exactly, fascinating, fascinating.
The story developing.
So guess what our big take people on top of always as always, Max Chaplin joints a senior reporter for Bloomberg BusinessWeek. Max, You've got a story out here. Elon Musk has a new project to run Donald Trump's government.
What do we know about his role here?
Well, yesterday, I mean we learned a little bit more just after this story was published. Donald Trump made something official that he had teased and that Elon Musk hand teased repeatedly on the campaign trail. Elon Musk will be the person charged with providing advice on the streamlining of government. Now, that could mean any number of things. It could mean,
I think very little. It could also mean that as Donald Trump prepares to enact his you know, very ambitious agenda, that Elon Musk will be at his side, and that'll be my bad. I mean, I think the job thing is probably a distraction. You know, the most important question in the Trump White House is who has Trump's ear,
and right now that's Elon Musk. And I think as we put together the story and as I've been thinking about this, you know, Elon Musk throws him into these companies, and famously he has six different companies, you know, Tesla and SpaceX, his car company and rocket company being the big ones.
I think we need to start.
Thinking about polyt and in particular Elon Musk's role in right wing politics, whether it's the Trump the next Trump administration, or even beyond that as his other big company, as something that he is going to be devoting a lot of time to and trying to use it, frankly to benefit his other interests.
We were just chatting with Joe Matthew about this, and so we were discussing about how by leading a commission specifically outside of government, Elon Musk doesn't have to divest his personal and financial holdings when making recommendations to the White House on federal spending and regulations that he wants to cut. I mean, what sort of precedents do we have for something that's created sort of that's supposed to be specifically outside government, and what power can he yield
and not yield? Do we have any indication?
Sure, I have been lots of presidential commissions. You know, this kind of thing is not necessarily anything new.
It's really just.
A question of how closely is Donald Trump listening to it? And when elon Musk, he suggested all kinds of very radical things, things that are likely to be either difficult achieve, like practically working within the confines of government, or wildly unpopular or both. So you know, he's said he suggested, for instance, that he's going to twitter the US government, suggesting you know, massive layoffs. Remember he laid off eighty percent of the Twitter staff. He is not going to
lay off eighty percent of the US government. I think that would be a very very very surprising thing if it were to happen. That said, you know, Trumps has is going to try to defund aspects of the government, and it really seems like Elon Musk is going to play a role in deciding what gets defunded, which is of course, is going to raise all sorts of ethical
concerns and questions. And because because there are ways that President Trump, president elect Trump is going to be in a position to say, squash investigations into Elon Musk companies, or direct funds to Elon musk companies, or slow down some of Elon Musk's competitors, and and so you know,
it's it's going to keep journalists busy. It's gonna I'm sure that the left is going to be very focused on this over the next couple of years because Elon Musk, who's a polarizing guy, is going to be tied to this administration very closely.
I mean, Elon Musk you cited in your article and you just mentioned here all the companies he runs, Tesla, Spacexally, on and on and on.
How many hours in a day does this guy have? I mean, I mean, I mean.
You know, when you think about how many companies to.
Plays a lot of video games, which you know is one of the many head scratchers with this extraordinary man. Uh I, I think we've seen investors in some of these other companies get concerned. And you know, right now we're in the middle of this kind of honeymoon phase.
You know, there's a.
Mania to the way Elon Musk is talking about this stuff. He's he's at the White He's in mar A Lago, he's in Washington.
Now.
You know, Trump family members are referring to him as uncle Elon. You gotta think that this is not.
Going to last.
And if it were to last, that there would be a bit of a comdown because because, as you say, Tesla is a big, complicated company with lots of challenges, and right now we're seeing a lot of investors bid up the stock, but there isn't a ton of It's not like there's a clear rationale for why Tesla is suddenly worth like forty percent more than it was before the election, except that, hey, maybe Trump's gonna make things better.
But but you know, there are gonna be challenges and the and distraction is going to be something that we're gonna be looking at.
And what about ev policies, because it seemed like they were more beneficial toward Tesla maybe under the Biden administration rather than the prior Trump administration, So how does this sort of shift and you have kind of the Trump two point zero coming down.
And this is one of the things that's so strange because Elon Musk became much more conservative during the Biden years, but the Biding years were incredibly good to Tesla. Tesla's value, you know, shot way up. It went from being kind of a niche player to one of the large American car companies. And you know, Trump, as you kind of hint, was very critical about electric vehicles on the campaign trail. Now, now, there are two things here that are probably worth bringing up.
One is where Tesla is now.
Is very different than it was four or five years ago. And you could make an argument that these electric vehicle subsidies actually do more for Tesla's competitors than they do for Tesla itself.
So like, if you were to remove all these.
Subsidies, yes, it might cost Tesla investors money, but it would also sort of help Tesla lock in it's very, very dominant position in the market. And the second thing, probably the more important thing, is that Elon Musk is desperately trying to move beyond the auto business. He wants to Tesla to be an AI company. He wants to have robotaxis. There is no regulatory regime there, and I think what investors are hoping, and again I don't know that they have much sort of clear factual basis for
this hope. But this is the rationale that Trump will basically legalize this business, that he will take a very dicey regular situation and make it less dicey, and that will be worth a lot of money to Tesla and ultimately to a shareholders.
Thirty seconds left, Max, how much time do we think Elon Musk is going to allocate to the government stuff?
Convince Well?
Right now, it seems like he's, yeah, he's it's a full time job, right, I mean, he seems to be there quite a lot. I think this is going to be something that he's very very focused on, you know, probably as long as it lasts, which which maybe that's only going to be a couple of months.
Maybe it's going to be longer.
You know, he did he has signaled that he wants to play in politics beyond this, beyond twenty twenty four, but he's talking about the midterms already, so interest you'll see, all.
Right, very good, Max Chaffkin really appreciated. Max Chefckin, He's senior reporter Bloomberg BusinessWeek. In our Bloomberg Interactive Broker Studio's got the Big Take story this week, and you can read that story on the Bloomberg and at Bloomberg dot Com. Slash a Big Take where big fans and big take stories.
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