Latest / Bloomberg Intelligence / Trump Says Xi Call Yielded Rare Earths Progress, More Talks

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Trump Says Xi Call Yielded Rare Earths Progress, More Talks · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: We also want to figure out what's happening in DC.
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  Speaker 3: You had a social media post from President Trum talking
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  Speaker 3: about his readout from the President g and President Trump's call.
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  Speaker 3: Maybe I didn't say that right, but anyway, he talked
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  Speaker 3: about the call that they had together. Tyler Kendall was
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  Speaker 3: joining us outside the White House.
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  Speaker 2: What did he say? What do we know? Yeah, hey,
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  Speaker 2: Alex Swell.
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  Speaker 4: President Trump said that the call lasted a little over
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  Speaker 4: an hour and a half and said that it resulted
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  Speaker 4: in a quote positive conclusion for both countries. Importantly, he
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  Speaker 4: said that moving forward, he doesn't think there's going to
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  Speaker 4: be any questions around rare earth products. As you all know,
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  Speaker 4: the US had been accusing China of slow walking the
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  Speaker 4: export licenses when it comes to critical and rare earth
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  Speaker 4: minerals that really are essential to US supply chains, alleging
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  Speaker 4: that China had violated the terms reached when they had
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  Speaker 4: negotiated in Geneva. In fact, I actually caught up with
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  Speaker 4: the Deputy Treasury Secretary Michael Falkender earlier this week, who
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  Speaker 4: told me that this was the issue that he thought
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  Speaker 4: would ultimately mean that these leaders were eventually going to
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  Speaker 4: have to get on the phone and talk about. President
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  Speaker 4: Trump also said that there would be another round of
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  Speaker 4: in person talks like we saw in Geneva. He said
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  Speaker 4: that Treasury Secretary Scott Besson and Ustr Jamis and Greer
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  Speaker 4: would lead them, as well as Commerce Secretary Howard Lutnik.
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  Speaker 4: That would be a new addition to the team. He
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  Speaker 4: was not there at the talks in Geneva, but a
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  Speaker 4: pretty remarkable development to think about how our reporting has
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  Speaker 4: really indicated Paul and Alex that China would really much
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  Speaker 4: prefer for key advisors to iron out the issues before
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  Speaker 4: putting Jijiping on the phone call. And there were definitely
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  Speaker 4: some key issues that they needed to talk about today.
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  Speaker 5: But as it relates to those rare earths, the US
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  Speaker 5: President did not specify whether Beijing had agreed to speed
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  Speaker 5: export licenses.
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  Speaker 6: Did he?
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  Speaker 5: Is that something that's just too complex at this point, So.
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  Speaker 4: We're still waiting further details, we act to put into
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  Speaker 4: context that the truth social post was rather vague. But
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  Speaker 4: President Trump himself said that he doesn't think that there
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  Speaker 4: are going to be questions moving forward here. Of course,
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  Speaker 4: it's a very complex process and has been something that
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  Speaker 4: has been the top of mind for the United States
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  Speaker 4: during these talks and really has become sort of a
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  Speaker 4: pressure point moving forward, since we know our analysts at
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  Speaker 4: Bloomberg Economics tell us that thirty out of fifty minerals
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  Speaker 4: that are deemed critical to the US come primarily from China,
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  Speaker 4: So they really do have such a big market share
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  Speaker 4: when it comes to these critical minerals that the US
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  Speaker 4: ends up relying on.
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  Speaker 6: All right, very good.
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  Speaker 5: We appreciate that we're just getting some latest more reporting
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  Speaker 5: there from Washington, DC as it relates to some of
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  Speaker 5: those talks, which I guess are inconclusive.
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  Speaker 3: But I guess it's just good that I think is
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  Speaker 3: the fact that they literally are talking. Yes, it's probably
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  Speaker 3: a good thing, right, Yeah, Mari Tyler, thanks a lot.
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  Speaker 3: Tyler Kendall, Bloomberg Television watching correspondent, joining us on that call.
• 3:12
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us Live
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  Speaker 3: All right, we got a slew of economic data that
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  Speaker 3: came out this morning in jobless claims not great, unit
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  Speaker 3: labor costs, higher, productivity lower.
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  Speaker 2: It didn't feel really great.
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  Speaker 3: Let's get Michael mckei Boomb're going to National Economics and
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  Speaker 3: Policy correspondent.
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  Speaker 2: How would you describe this data this morning? Not great?
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  Speaker 2: C plus.
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  Speaker 7: You know, maybe I'd give it a B minus at
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  Speaker 7: this point, and I'll explain why. But first I did
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  Speaker 7: want to mention so you were right. You're right about
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  Speaker 7: band aids. This is one of those facts to express anywhere.
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  Speaker 7: But I know somebody who is in the business of
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  Speaker 7: retailing things like that, and a lot of companies have
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  Speaker 7: generic brand band aids, and the story is that they
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  Speaker 7: cannot afford the Chinese made generic band aids anymore. They're
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  Speaker 7: going to have to raise the price so much that
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  Speaker 7: they lose the value of having their own brand. So
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  Speaker 7: this could be a thing you may put your finger on.
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  Speaker 7: The whole problem with tariffs is can't get generic band
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  Speaker 7: aids anymore.
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  Speaker 2: Also, generic band aids are bad. That was my point.
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  Speaker 2: I'm serious, Okay.
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  Speaker 7: Anyway, Java's claims are bad to forty seven, but it's
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  Speaker 7: the highest eight months. But the problem is, and unfortunately
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  Speaker 7: I have only a black and white chart, so we
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  Speaker 7: can't show it on the color radio. But this is
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  Speaker 7: the time of year when we start to get into
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  Speaker 7: seasonal distortions that have gotten worse since COVID the non
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  Speaker 7: seasonally adjusted job those claims went down and the seasonally
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  Speaker 7: adjusted went up significantly. And this has been happening for
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  Speaker 7: a couple of weeks. And then you look at the
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  Speaker 7: last couple of years and you see the same pattern.
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  Speaker 7: So is this a message about what's going to happen maybe?
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  Speaker 7: Or Neil Dudda and I were talking about it and
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  Speaker 7: he says yes. Or is it just sort of a headfake.
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  Speaker 7: Maybe the auto companies have started retooling earlier because they
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  Speaker 7: aren't selling as many cars, don't need to make any cars,
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  Speaker 7: they have some space to do it. So that's something
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  Speaker 7: to keep an eye on. At this point. We've had
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  Speaker 7: a lot of announcements Disney, Procter, and Gamble today about layoffs.
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  Speaker 7: Although Procter and Gamble said seven thousand over two years,
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  Speaker 7: and they didn't say what country, So we're not sure yet,
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  Speaker 7: which is part of the reason that you have to
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  Speaker 7: take this not so much with a big, great assault,
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  Speaker 7: but just say, okay, that's interesting. Let's see what happens
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  Speaker 7: in the next couple of weeks. Other than that, the
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  Speaker 7: trade balance is not a surprise. We saw that in
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  Speaker 7: the advanced trade numbers. Because we stopped buying things from overseas.
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  Speaker 7: Imports went down fifteen and a half percent, which is
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  Speaker 7: the biggest fall on record, and the trade balance falls
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  Speaker 7: by more than half, which is the biggest fall on record.
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  Speaker 7: But I think back to the first quarter where we
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  Speaker 7: had bad growth figures because we imported so much. This
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  Speaker 7: is going to have the opposite effect. And then while
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  Speaker 7: the unit labor costs that Alex mentioned our old news,
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  Speaker 7: I mean this first quarter news, it does suggest that
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  Speaker 7: there's higher pressure on prices for companies, and it's part
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  Speaker 7: of that whole Are we seeing an inflation and stagnation
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  Speaker 7: thing at the same.
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  Speaker 2: Time, which is kind of what you were talking about yesterday?
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  Speaker 5: Put yeah, I mean a lot of the notes I
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  Speaker 5: got from Wall Street economists, I kept seeing stagflation in
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  Speaker 5: the title, So that's coming back. But if I look
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  Speaker 5: at today's data, Michael's, you're just explaining it as well
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  Speaker 5: as yesterday's im data.
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  Speaker 6: I think these.
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  Speaker 5: Economists are kind of getting it right. They've been telling
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  Speaker 5: us maybe not the tariffs themselves, but the uncertainty associated
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  Speaker 5: with teriffs that could lead to slower economic growth of
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  Speaker 5: that could lead to higher prices. I don't know, it
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  Speaker 5: feels like that's coming to fruition right now.
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  Speaker 7: Well, that's one of the things that FED officials have
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  Speaker 7: been talking about that companies have been sitting on the sidelines,
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  Speaker 7: not sure what to do, but at some point they're
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  Speaker 7: going to have to make a decision, and some of
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  Speaker 7: them may be coming off the sidelines now and just
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  Speaker 7: going ahead and raising prices in advance of tariffs. Some
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  Speaker 7: things have gone up in price, but just betting that
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  Speaker 7: something's going to happen. Part of it because they want
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  Speaker 7: to protect their margins, and part of it is they're
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  Speaker 7: probably testing the waters we saw in the last inflation.
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  Speaker 7: When it started, people were raising prices more than their
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  Speaker 7: costs were going up because they hadn't been able to
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  Speaker 7: raise prices in years, and so they were taking advantage
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  Speaker 7: of it and maybe that's a little bit of what
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  Speaker 7: we're seeing now. There have been some studies out recently
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  Speaker 7: that suggests that when Trump announced the tariffs, people raised
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  Speaker 7: some prices. Then when he put the ninety day hold
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  Speaker 7: on it, they didn't lower those prices. So businesses are
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  Speaker 7: maybe not anxious to test whether they lose market share,
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  Speaker 7: but they're willing to do it if they think that
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  Speaker 7: things are going to continue in that direction.
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  Speaker 3: All right, Mike, thanks lot, really appreciate it. Michael mcke Boomer,
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  Speaker 3: Economics and Policy correspond.
• 8:28
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
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  Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 8:42
  Speaker 3: Well, how speaker Mike Johnson earlier joined Bloomberg to discuss
• 8:45
  Speaker 3: key issues such as Elon Musk's vocal disagreement with the
• 8:48
  Speaker 3: Big Beautiful Bill and the speaker Johnson's fight to keep
• 8:51
  Speaker 3: the forty thousand dollars salt cap and more. Bloomberg asked
• 8:54
  Speaker 3: about the salt cap that he's fighting to maintain. Here's
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  Speaker 3: part of that conversation, crossing the.
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  Speaker 8: Grand canyon on a piece of gentle flaws. Okay, the
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  Speaker 8: equilibrium that we reached here, it took quite a bit
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  Speaker 8: of time to get to where we are, and you
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  Speaker 8: can't load me up on either side. And if you
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  Speaker 8: go and slash the salt cap that we negotiated carefully
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  Speaker 8: for over a year, it's going to make it very
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  Speaker 8: difficult for me to deliver the necessary number of votes.
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  Speaker 6: All right.
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  Speaker 5: That was House a speaker Mike Johnson speaking with Bloomberg earlier.
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  Speaker 6: We're going to get the.
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  Speaker 5: Latest on this big, beautiful tax bill that again pasted
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  Speaker 5: in House. It is now being negotiated in the Senate.
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  Speaker 6: A couple of sticking points, including that salting.
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  Speaker 5: I thought that was just a Matt Miller issue, but
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  Speaker 5: apparently it's a big deal for a lot of senators
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  Speaker 5: and a lot of representatives. Nathan Deane joints as senior
• 9:40
  Speaker 5: policy analyst for Bloomberg Intelligence. Nathan, what are the outstanding
• 9:46
  Speaker 5: issues that you believe the Senate is grappling with now
• 9:49
  Speaker 5: and do you expect them to be resolved?
• 9:52
  Speaker 9: So, you know, I think the two big issues that
• 9:54
  Speaker 9: are actually going on at the moment in the Senate
• 9:57
  Speaker 9: is on the deficit, reduction side this idea, is it
• 10:00
  Speaker 9: going to increase the deficit as a result? Are the
• 10:03
  Speaker 9: elon musks? And for those members in the Senate Senator
• 10:07
  Speaker 9: Mike Lee and Senator Ram Paull and Senator Ron Johnson,
• 10:10
  Speaker 9: are they going to continue to push for a bill
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  Speaker 9: that ultimately tries to decrease the deficit aka, you know,
• 10:15
  Speaker 9: probably not put out as much in terms of permanent
• 10:18
  Speaker 9: tax cuts. The other thing going on is, you know,
• 10:20
  Speaker 9: on the how to pay for it is the Medicaid
• 10:22
  Speaker 9: work requirements. Because those moderates in the Senate, and you know,
• 10:26
  Speaker 9: think of Senator Collins and Senator Murkowski are essentially trying
• 10:30
  Speaker 9: to push back some of what the House has already done.
• 10:32
  Speaker 9: Now we have two polarizing forces trying to push the
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  Speaker 9: bill in a different direction, sort of challenging for Senator
• 10:39
  Speaker 9: John Thune here. So I think what happens is you
• 10:41
  Speaker 9: will see these negotiations continue to play out over the
• 10:44
  Speaker 9: next week, maybe the next week and a half or
• 10:46
  Speaker 9: two weeks, and then you'll get a clear picture of
• 10:48
  Speaker 9: where the Senate's going to go. But this bill does
• 10:50
  Speaker 9: have to change in order to get enough senators to
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  Speaker 9: pass over and support it, and approval.
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  Speaker 3: Okay, so what does salt really look like? Is it
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  Speaker 3: going to be forty thousand? Is it going to be
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  Speaker 3: lower what we think?
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  Speaker 9: So I think it's going to be either forty thousand
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  Speaker 9: or slightly lower than that, because I think what's going
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  Speaker 9: to happen here is, Look, if I'm Representative Lawler, I
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  Speaker 9: really enjoyed that interview this morning with Speaker Johnson because
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  Speaker 9: he defended the cap and said, look, we negotiated this,
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  Speaker 9: and it took a year, and the Salt Caucus in
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  Speaker 9: the House does have a lot of power. They can say, look,
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  Speaker 9: we're just not going to vote for it. If you
• 11:19
  Speaker 9: want to throw it back down to ten thousand, Senate,
• 11:21
  Speaker 9: feel free, I'm not going to vote for it, and
• 11:22
  Speaker 9: it's not going to pass. But this idea of it's
• 11:24
  Speaker 9: either going to be forty thousand or maybe slightly lower,
• 11:27
  Speaker 9: because then the Salt Caucus is in slightly a difficult
• 11:30
  Speaker 9: more difficult position because they did get something out of it.
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  Speaker 9: So for those of you of you in New York
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  Speaker 9: and New Jersey, I think you're going to get something.
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  Speaker 9: It's going to be around forty thousand or maybe.
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  Speaker 6: Just slightly under that.
• 11:40
  Speaker 5: Nathan, you mentioned Elon Musky has come out really harshly
• 11:44
  Speaker 5: against this bill and on another other topics. How much
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  Speaker 5: influence does he have now there is he's no longer
• 11:52
  Speaker 5: technically part of the Washington story. So this is one
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  Speaker 5: of those.
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  Speaker 9: Things where it's starting to brew into an issue. I
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  Speaker 9: don't think it's an issue just yet. I mean, if
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  Speaker 9: you looked at Speaker Johnson's interview, he defended what they
• 12:03
  Speaker 9: have been doing. And there's a lot of criticism on
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  Speaker 9: the Congression the CBO at the moment in terms of
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  Speaker 9: that two point four trillion dollar estimate of increase in
• 12:12
  Speaker 9: the deficit. So if you ask the politicians up on
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  Speaker 9: Capitol Hill, I wouldn't say that there's really much there
• 12:17
  Speaker 9: there yet, but it could be coming because, like Elon
• 12:20
  Speaker 9: Musk said x yesterday, he's calling for individuals to call
• 12:24
  Speaker 9: their senator and call their congressman and say let's not
• 12:27
  Speaker 9: support this. And there is a little bit of a
• 12:29
  Speaker 9: group coming together. Senator Ran Paul Mike Lee, Ron Johnson.
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  Speaker 9: You know, that's enough votes that potentially could derail this bill.
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  Speaker 9: So if i'm Senator John Thune, I have to figure
• 12:38
  Speaker 9: out how to get some of those individuals on board
• 12:40
  Speaker 9: and the answer is, well, maybe these tax cuts are permanent,
• 12:43
  Speaker 9: maybe they just extended a certain amount of time, or
• 12:45
  Speaker 9: maybe this bill shrinks, or maybe the debt ceiling goes
• 12:48
  Speaker 9: from a five trillion dollar increase to a two trillion
• 12:50
  Speaker 9: dollar increase. There's areas of flexibility here for leadership, and
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  Speaker 9: I think we're going to see that play out over
• 12:55
  Speaker 9: the next few weeks. So we still think this bill
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  Speaker 9: is going to increase the deficit, but stay tuned because
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  Speaker 9: it may not be what the CBO just scored yesterday.
• 13:03
  Speaker 3: I think I asked you this before, but this is
• 13:04
  Speaker 3: obviously what I'm interested in. And that's what happens to
• 13:06
  Speaker 3: a lot of the energy tax credits, the ITC from
• 13:10
  Speaker 3: the IRA and all the companies are kind of waiting
• 13:13
  Speaker 3: on tenderhooks for what is going to happen. What's the
• 13:16
  Speaker 3: indication that Republican senators are going to step up and
• 13:19
  Speaker 3: try and fight for these tax credits.
• 13:22
  Speaker 9: So we've heard through the grapevind that you know, there
• 13:24
  Speaker 9: are a lot of lobbyists uff on Capitol Hill right
• 13:26
  Speaker 9: now really pushing for this, and there are some receptive ears.
• 13:30
  Speaker 9: Senator Tom Tillis from North Carolina is one of those
• 13:32
  Speaker 9: individuals who's really focused on this now. I think you're
• 13:35
  Speaker 9: going to start seeing snippets of what the Senate is
• 13:37
  Speaker 9: thinking towards the end of this week, maybe the beginning
• 13:40
  Speaker 9: of next week in terms of those tax credits. And
• 13:42
  Speaker 9: we're telling our clients that, look, the House tax credits
• 13:45
  Speaker 9: were somewhat positive and then initially negative on the solar
• 13:48
  Speaker 9: industry in particular. And I think you are going to
• 13:51
  Speaker 9: see some moderate voices coming through when it comes to
• 13:53
  Speaker 9: the Inflation Reduction Act, because at the end of the day,
• 13:55
  Speaker 9: it's going to be very difficult for some of these Republicans,
• 13:58
  Speaker 9: say Senator Tom Till for example, that will vote to
• 14:01
  Speaker 9: gut the Inflation Reduction Act when the Inflation Reduction Act
• 14:04
  Speaker 9: is bring jobs and plants and you know, other types
• 14:08
  Speaker 9: of economic growth to their states. So I do think
• 14:10
  Speaker 9: you're going to see a modernization of what DAUS did,
• 14:12
  Speaker 9: and I think we'll see some of those details coming
• 14:14
  Speaker 9: out early next week.
• 14:16
  Speaker 5: I got a red headline crossing the Bloomberg Terminal. NATO
• 14:18
  Speaker 5: adopts military build up plans as part of new spending goals.
• 14:23
  Speaker 5: I want some more reporting on that, so some movement
• 14:25
  Speaker 5: there across the pond Nathan. President Trump quite successfully kind
• 14:31
  Speaker 5: of work the phones in the House to get passage
• 14:34
  Speaker 5: of the deal. It's a little bit different in the Senate,
• 14:36
  Speaker 5: where you know, these folks have six year terms. Here,
• 14:40
  Speaker 5: what's the expectation of what kind of influenced President Trump
• 14:42
  Speaker 5: can plain in this negotiation?
• 14:44
  Speaker 6: In the Senate, you hit it right.
• 14:46
  Speaker 9: On the head. I mean, obviously, with the House of Representatives,
• 14:48
  Speaker 9: they run every two years, and so the idea of
• 14:50
  Speaker 9: a primary threat is much more serious to them.
• 14:52
  Speaker 4: You know.
• 14:52
  Speaker 9: But when it comes to the Senate, I will say
• 14:54
  Speaker 9: is is that their primary goal is to make sure
• 14:56
  Speaker 9: that the tax extensions or sorry, the tax increases don't
• 15:00
  Speaker 9: happen by the end of the year. Senators know they
• 15:02
  Speaker 9: have to pass something. The question on the Senate side
• 15:04
  Speaker 9: is is that what else are we going to do
• 15:06
  Speaker 9: with this? So I think that President Trump will have
• 15:08
  Speaker 9: to take a different type of approach in working with
• 15:11
  Speaker 9: the Senate. One of those things like, look, this is
• 15:13
  Speaker 9: America First policy, and even though only one third of
• 15:16
  Speaker 9: the Senate will be running approximately next year, the Republicans
• 15:20
  Speaker 9: do want to remain control of both the House and
• 15:22
  Speaker 9: the Senate, and failure to adopt something like that could
• 15:25
  Speaker 9: put that at risk. So I do think President Trump
• 15:27
  Speaker 9: will have a little bit more hands on approach with
• 15:29
  Speaker 9: the Senate. Obviously, he's going to have to manage both
• 15:32
  Speaker 9: those who want to see the deficit decreased along with
• 15:35
  Speaker 9: the moderates who want to see how these paid for
• 15:37
  Speaker 9: us decreased. And I think they will be able to
• 15:39
  Speaker 9: come up with a solution. It's just going to take
• 15:41
  Speaker 9: a lot more work and he's going to have to
• 15:43
  Speaker 9: roll up his sleeves to do it, all.
• 15:44
  Speaker 2: Right, Nathan, really appreciate it. Thank you very much.
• 15:47
  Speaker 3: Nathan Dean joins us from Bloomberg Intelligence. He covers all
• 15:50
  Speaker 3: of policy there for Bloomberg Intelligence, that senior policy analy.
• 15:54
  Speaker 5: When we were down in DC, I did have a
• 15:56
  Speaker 5: little free time you were working. I saw some We
• 15:59
  Speaker 5: went to Lincoln. I'm one of all the cool stuff.
• 16:01
  Speaker 6: I had no even thought of coming. I'm going to
• 16:04
  Speaker 6: go with Capitol Hill and see my representatives.
• 16:06
  Speaker 5: Oh god, So I got much more inspiration from going
• 16:09
  Speaker 5: to the Lincoln Memorial. But you go to Lincoln Memorial,
• 16:12
  Speaker 5: you read the Gettysburg Address, and then you read his
• 16:16
  Speaker 5: speech for the second inauguration.
• 16:17
  Speaker 6: It just takes your breath away.
• 16:18
  Speaker 2: It really does.
• 16:20
  Speaker 6: It's just amazing.
• 16:22
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 16:26
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• 16:29
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• 16:33
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 16:36
  Speaker 3: So the news that came out on Tuesday was that
• 16:39
  Speaker 3: Meta and Constellation Energy met what they call a virtual
• 16:43
  Speaker 3: Purchase power agreement. So it's basically an investment to secure
• 16:47
  Speaker 3: clean energy from Constellation. But there are lots of different
• 16:51
  Speaker 3: nuances to that, but not the only one out there today.
• 16:53
  Speaker 3: We also learned that well back in December, Meta Platforms
• 16:56
  Speaker 3: also announced a deal to buy green credits from four
• 17:00
  Speaker 3: large US solar energy projects, and the owner of that
• 17:04
  Speaker 3: project joins US now. Michael Polski is founder and CEO
• 17:07
  Speaker 3: of Inventergy, and in Energy is one of the biggest
• 17:11
  Speaker 3: largest independent power producers in the United States, not gas plans, solar, onshore,
• 17:17
  Speaker 3: offshore wind storage as well as transmission. Really has his
• 17:21
  Speaker 3: pulse on the market right now. Good to see you, Michael,
• 17:24
  Speaker 3: thanks for coming in.
• 17:25
  Speaker 10: Thank you. And we have to add natural guests as well.
• 17:27
  Speaker 3: Yes, no, I said that, I said natural, gay I
• 17:29
  Speaker 3: did plant so you have all that clean stuff. How
• 17:32
  Speaker 3: hard is it to reach these agreements with the hyperscalers
• 17:36
  Speaker 3: right now?
• 17:36
  Speaker 2: What are those conversations like?
• 17:40
  Speaker 10: You know, obviously you know these are large scale agreements,
• 17:44
  Speaker 10: so it's not easy to just walk in and these
• 17:47
  Speaker 10: are those big deals. So first of all, we have
• 17:51
  Speaker 10: to make sure that both sides so that we agree
• 17:54
  Speaker 10: on that. You know, suppliers have sufficient supplies and buyer
• 17:59
  Speaker 10: satisfied by requirements is what is also important that certain
• 18:04
  Speaker 10: reliability standards are being mad and most importantly, the price
• 18:08
  Speaker 10: and has to be appropriate for a buyer to agree
• 18:11
  Speaker 10: to buy this.
• 18:13
  Speaker 5: Another headline crossing the Bloomberg terminal, President g President Trump
• 18:17
  Speaker 5: agreed to start new round of talks ASAPTS. According to
• 18:20
  Speaker 5: CCTV will bring you continued reporting on that, Michael, is
• 18:25
  Speaker 5: the Trump administration making your business, the development of your business,
• 18:29
  Speaker 5: the expansion of your business easier, more difficult, no roled impact.
• 18:33
  Speaker 6: Yet, what have you seen?
• 18:34
  Speaker 10: Clearly the administration send very right sign. President announced energy emergency,
• 18:39
  Speaker 10: which I believe there is an energy emergency because we
• 18:42
  Speaker 10: have to build. There is an increased demand and we
• 18:45
  Speaker 10: have to build more supplies and more supplies. We have
• 18:48
  Speaker 10: to build if we build like we used to do
• 18:50
  Speaker 10: it, it would take too long. So it's really an emergency.
• 18:54
  Speaker 10: So we tried to In energy, we tried to build
• 18:57
  Speaker 10: as much supply as possible. What is also very important,
• 19:02
  Speaker 10: not just supply, but transmission. I mean, one of one
• 19:06
  Speaker 10: of our biggest developments right now and what we believe
• 19:09
  Speaker 10: is critical to meet sort of this emergency is to
• 19:12
  Speaker 10: build more transmission lines. I always like to say that,
• 19:17
  Speaker 10: you know, if we build more trucks without roads, we're
• 19:20
  Speaker 10: not going to deliver goods. So in order for electrons
• 19:22
  Speaker 10: to move, we need transmission lines. And if we have
• 19:25
  Speaker 10: transmission then we can shorten time to interconnect facility. We
• 19:30
  Speaker 10: have to be able to move power from where it's
• 19:32
  Speaker 10: produced to where it's used, and I think we can.
• 19:35
  Speaker 10: We can really build infrastructure a lot faster here and
• 19:39
  Speaker 10: with a lot more impact.
• 19:41
  Speaker 3: I mean, to your point, go GOLDMN. Sachs had it
• 19:43
  Speaker 3: out today talking about how power is already tight in
• 19:45
  Speaker 3: the Northeast. There was a report out yesterday that said
• 19:48
  Speaker 3: the development of data centers to the largest US grid
• 19:51
  Speaker 3: and PGM is raising costs by almost ten billion because
• 19:54
  Speaker 3: we just can't build it out fast enough. What's the
• 19:56
  Speaker 3: biggest hurdle to reimagining transmission.
• 20:00
  Speaker 10: I think, I think there are multiple. One is obviously
• 20:03
  Speaker 10: permitting because it takes forever permit and.
• 20:06
  Speaker 2: Supposedly that's all going to be fixed. Now has that
• 20:08
  Speaker 2: all been fixed?
• 20:09
  Speaker 10: I mean it's in a process. Obviously there are there
• 20:12
  Speaker 10: are good announcements. We have to see as a business,
• 20:15
  Speaker 10: we have to see how it's going to be im implemented,
• 20:18
  Speaker 10: because implementation is very important. But it's not just permitting.
• 20:22
  Speaker 10: I think transmission has to be appropriately paid for and
• 20:25
  Speaker 10: right now, particularly for a long distance transmission, we don't
• 20:28
  Speaker 10: have a methodology in this country how to pay for transmission.
• 20:31
  Speaker 10: So there is a lot of you know, intention to
• 20:34
  Speaker 10: build and the only really transmission being built the one
• 20:37
  Speaker 10: that recovered by utilities or rtos through the rate pay
• 20:41
  Speaker 10: You know, the moment you touch something that is not
• 20:44
  Speaker 10: typically normal and it's very difficult. So we have to
• 20:49
  Speaker 10: really come up with appropriate methodology to value transmission and
• 20:53
  Speaker 10: allocate the cost of transmission. I think, in my opinion
• 20:56
  Speaker 10: for this administration for Department of Energy, that should be
• 20:59
  Speaker 10: really one of the most important tasks to build our infrastructure.
• 21:04
  Speaker 2: I did read the book here it is.
• 21:06
  Speaker 5: I didn't read the book The Grid, So it took
• 21:08
  Speaker 5: me a whole summer to get through it, and it
• 21:10
  Speaker 5: was not an easy read.
• 21:11
  Speaker 6: But I think I have some understanding of it.
• 21:13
  Speaker 5: What's your sense overall of the power grid in the
• 21:16
  Speaker 5: United States?
• 21:19
  Speaker 6: How good is it? How bad is it? How much
• 21:21
  Speaker 6: investment does it need?
• 21:23
  Speaker 10: You know, obviously you know there are there are a
• 21:25
  Speaker 10: lot of discussions about grade right now the world being
• 21:29
  Speaker 10: used like antiquated or not reliable, which is which is
• 21:33
  Speaker 10: true in many ways because most of our grid has
• 21:35
  Speaker 10: been built thirty forty years ago, and there are a
• 21:40
  Speaker 10: lot of change since then. I mean, for example, we
• 21:43
  Speaker 10: used to have very centralized way of generator electricity from
• 21:47
  Speaker 10: very large coal nuclear you know, sometimes gas power plants.
• 21:52
  Speaker 10: Now we have a lot more decentralized generation. Number one.
• 21:56
  Speaker 10: Another issue is that we have our weather pattern has changed.
• 21:59
  Speaker 10: I mean, if now we have a lot more you
• 22:02
  Speaker 10: know in claiming weather, we have ice storms, what we've
• 22:05
  Speaker 10: seen in Texas, we have we have floods, we have
• 22:11
  Speaker 10: other weather events, which shows that generation itself is susceptible.
• 22:18
  Speaker 10: We cannot make one hundred percent sort of guaranteed generations.
• 22:22
  Speaker 10: So how to deal with this we have to create
• 22:25
  Speaker 10: connect like I like to call larger geography, so power
• 22:30
  Speaker 10: can move from here to there, just like corons. Right,
• 22:32
  Speaker 10: if we only go from here to there on one
• 22:35
  Speaker 10: road and that's something happened with that road and we
• 22:37
  Speaker 10: cannot avoid that, then all the traffic will be stopped
• 22:41
  Speaker 10: for days. We can avoid this, so we we have
• 22:44
  Speaker 10: to have transmissions.
• 22:45
  Speaker 2: So it based on that. You said the sort of
• 22:48
  Speaker 2: financing this transmission is key. How would that work? I
• 22:52
  Speaker 2: get it for.
• 22:52
  Speaker 3: The you know, regulated utilities, but if you want a
• 22:55
  Speaker 3: transmission line across multiple states, how could the financing work
• 22:59
  Speaker 3: to make sense for an dependent player like you?
• 23:01
  Speaker 10: This is a fundamental problem here, right. We know we
• 23:05
  Speaker 10: in the United States we talk about the reliability, we
• 23:07
  Speaker 10: talk about national security. But for example, we develop in
• 23:12
  Speaker 10: large transmission line and which dramatically increase reliability. But then
• 23:17
  Speaker 10: you go to the rtos like MISO and ask them
• 23:21
  Speaker 10: to value reliability and they just don't value this because
• 23:25
  Speaker 10: neither they know how to do it or they simply
• 23:27
  Speaker 10: don't want to do it. So this is a fundamental
• 23:30
  Speaker 10: problem that you know when you have when you build transmission.
• 23:34
  Speaker 10: For example, in our case, Grain Belt Express, it's eleven
• 23:37
  Speaker 10: billion dollar project. We have to have revenues as in
• 23:40
  Speaker 10: order to finance this, and if nobody wants to pay
• 23:42
  Speaker 10: for anything, it's really hard. So I think it's it
• 23:45
  Speaker 10: should be a priority for the government to really establish
• 23:49
  Speaker 10: revenue streams for transmission.
• 23:51
  Speaker 3: Well, it was really great to get this perspective. I
• 23:53
  Speaker 3: love this conversation. Please come back on. Michael Polski is
• 23:56
  Speaker 3: founder and CEO of in Energy, joining us on the
• 23:59
  Speaker 3: issues of here in the United States.
• 24:02
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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