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OPEC Unlikely To Entertain White House's Output Request: Ellen Wald · Bloomberg Intelligence

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  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Dr Ellen Wald joins
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  Speaker 1: as president of Transversal Consulting, which is also a Senior
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  Speaker 1: Fellow at Atlantic Council and a Bloomberg Opinion contributor. So, Ellen,
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  Speaker 1: thanks so much for joining us here again. A President
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  Speaker 1: Biden asking or suggesting to OPEC plus UH to maybe
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  Speaker 1: pump some more oil to bring the price down. What's
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  Speaker 1: going on there? And what do you think OPEC plus
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  Speaker 1: is going to do? Yeah, honestly, I don't think that
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  Speaker 1: OPEC plus is going to take this request all that
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  Speaker 1: seriously at this point, because there's so much else at
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  Speaker 1: play here other than OPEC plus is production, and in fact,
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  Speaker 1: ope plus just increased production by four thousand barrels a
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  Speaker 1: day in August and their ending to increase by another
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  Speaker 1: four hundred thousand barrels a day in September and increases
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  Speaker 1: of four hundred thousand barrels a day every month through
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  Speaker 1: December and even beyond. So I don't think OPEC is
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  Speaker 1: going to be particularly receptive to this. I think that
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  Speaker 1: that you know, they're going to say, well, look if
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  Speaker 1: gasoline prices are up in the US, where the other
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  Speaker 1: factors demand is up. Um, there's also been issues with
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  Speaker 1: supply chains. Some of there aren't enough truckers and to
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  Speaker 1: some areas have seen um problems with gasoline prices because
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  Speaker 1: they just can't get enough gasoline. But the US as
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  Speaker 1: a whole has plenty of gasoline well on those kind
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  Speaker 1: of supply and demand balances, which is the end of
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  Speaker 1: the day, is basically what the oil market comes down to.
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  Speaker 1: You why do we expect that everything, all the adjustment
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  Speaker 1: has to come from the supply side, especially considering the
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  Speaker 1: delta variant that could in theory way on demand. I mean,
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  Speaker 1: could we get a correction of oil prices to a
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  Speaker 1: lower rate not because we need to pump more, but
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  Speaker 1: because people aren't gonna want as much oil well exactly.
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  Speaker 1: And also you have to look at things seasonally as well.
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  Speaker 1: Summertime is at the time of highest gasoline demand in
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  Speaker 1: the US. And after labor Day it typically drops off
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  Speaker 1: quite a bit. So we're already almost through the summer. UM,
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  Speaker 1: You've already got schools going back in session throughout the South,
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  Speaker 1: so gasoline demand will probably be down there, and then
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  Speaker 1: one school gets back in session in the North, we're
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  Speaker 1: generally see gasoline consumption drop. So it's you know, there's
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  Speaker 1: also other issues that play, Like the United States were
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  Speaker 1: down about two million barrels a day of our own production. UM.
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  Speaker 1: Part of that is due to oil companies not wanting
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  Speaker 1: to produce, wanting to be more conservative and pay down debt.
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  Speaker 1: But other issues include the fact that the Biden administration
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  Speaker 1: itself has this moratorium on issuing new leases to drill
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  Speaker 1: on federal land, and that attitude is making a lot
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  Speaker 1: of producers very hesitant to expand production that could help
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  Speaker 1: alleviate higher gas prices. ELM. When we talk to you,
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  Speaker 1: I always like to get your opinion on Russia because that,
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  Speaker 1: to me, from a supply perspective, is, you know, one
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  Speaker 1: of the wild cards out there. What are we hearing
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  Speaker 1: from the Russians these days? You know, it's interesting that
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  Speaker 1: you say that because UM, last week the e I
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  Speaker 1: A numbers showed that the US imported a lot of
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  Speaker 1: Russian oil and more Russian oil than they generally generally import,
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  Speaker 1: and so um we haven't had, you know, a formal
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  Speaker 1: statement come out of Russia yet, but there was a
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  Speaker 1: report on the I think he came from from spot
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  Speaker 1: mcnews saying that UM OPEC members haven't discussed US proposal
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  Speaker 1: for alliance to increased production, but consultations are not ruled out.
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  Speaker 1: In other words, well, maybe the US wants to join
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  Speaker 1: OPEC if they think they should have a say so.
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  Speaker 1: I think we're still waiting to see what Putin has
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  Speaker 1: to say about this. Well, speaking of Russia, they obviously
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  Speaker 1: we hald a great deal of influence in OPEC. Plus
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  Speaker 1: and you know, the price war between the Russian zaddies
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  Speaker 1: created quite a lot of drama in the oil market
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  Speaker 1: last year, and then this year there was some issue
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  Speaker 1: with the UAE in the latest opaque decision. Just talk
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  Speaker 1: to us about how the dynamics in the cartel are
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  Speaker 1: working right now? Are they as solid as they once were? Exactly?
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  Speaker 1: I think the dynamics are a bit more difficult now
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  Speaker 1: because the particularly because the u a E has really
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  Speaker 1: been asserting itself and also asserting its own uh financial interests.
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  Speaker 1: They want to produce more oil and they see that
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  Speaker 1: this would be better better for them, and so they
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  Speaker 1: are asserting uh, you know, their leadership within OPEC and
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  Speaker 1: from the kind of Saudi perspective, the latest OPEC deal
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  Speaker 1: was really hard fought and they're not going to want
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  Speaker 1: to do anything to upset that balance that they've finally
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  Speaker 1: gotten in the group. Dr Ellen Wall, thank you so
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  Speaker 1: much for joining us. You are one of our go
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  Speaker 1: to people here on the global energy market, supply and demand.
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  Speaker 1: It's a fascinating story. Dr Ellen Walled, President of Transversal Consulting,
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  Speaker 1: also a senior Fellow at the Atlanta Council and a
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  Speaker 1: Bloomberg opinion contributor, So she's got her hands full, all right.
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  Speaker 1: We hear a lot of companies talk about being carbon
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  Speaker 1: neutral or they will be carbon neutral by a certain
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  Speaker 1: data talking industries like the energy and industry, the airline industry,
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  Speaker 1: and it just really makes me wonder, what does it
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  Speaker 1: really mean to be carbon neutral? Dr Ac Rathi Rocky,
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  Speaker 1: climate energy reporter for Bloomberg Green UH knows and based
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  Speaker 1: in London, UH action, give us a sense here, what
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  Speaker 1: does it mean to be carbon neutral because boy, a
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  Speaker 1: lot of companies and industries are thrown out about and
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  Speaker 1: this is our big take story of the day. What do,
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  Speaker 1: what do? What do you have? So the scientific definition
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  Speaker 1: is rather straightforward, which is an entity if it emits
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  Speaker 1: x amount of emissions into the atmosphere, then it needs
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  Speaker 1: to remove that much amount of emissions from the atmosphere.
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  Speaker 1: So X minor sex equal to zero. That will give
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  Speaker 1: you a carbon neutral company, entity, country, what you might
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  Speaker 1: whatever you might want, and a shot. You're basically talking
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  Speaker 1: about offsetting your carbon emissions. Yet there's some question as
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  Speaker 1: to whether or not carbon offsets actually work. Yes, So
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  Speaker 1: the story that we looked at today is a new
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  Speaker 1: phenomena in the Island gas industry. And essentially these are
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  Speaker 1: shipments of either oil or most of the time liquefied
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  Speaker 1: natural gas. And what companies do is sell them as
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  Speaker 1: carbon neutral shipment um and the waves do it is
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  Speaker 1: they calculate the amount of emissions that would be generated
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  Speaker 1: from the production of the fuel to the burning of
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  Speaker 1: the fuel, and then they buy offsets from the open
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  Speaker 1: market at really cheap prices. The price that we courte
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  Speaker 1: in our story is about three dollars a ton um
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  Speaker 1: and then they are able to use this label to
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  Speaker 1: say that the said shipment is carbon neutral. But the
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  Speaker 1: problem is these offsets, which are really dirt cheap, don't
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  Speaker 1: actually remove carbon dioxide from the air. They do some
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  Speaker 1: good things, like in the case of our story, uh,
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  Speaker 1: these offsets were protecting trees in Zimbabwe, and in the
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  Speaker 1: process of protecting these trees, they were also helping the
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  Speaker 1: local population branch out and do things that don't require
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  Speaker 1: more land and yet go economically. But they do not
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  Speaker 1: remove the carbon dioxide which the liquefied natural gas shipment
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  Speaker 1: did produce when it was when it was sold and burned. Yeah,
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  Speaker 1: of shot in your Big Take story. I was fascinated
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  Speaker 1: by that, you know, the part of the story we
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  Speaker 1: talked about these villagers were you know, protecting for Just
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  Speaker 1: tell us about that part of your story there, because
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  Speaker 1: that was really interesting. So these are a large programs
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  Speaker 1: that were initially started under the United Nations and stramework.
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  Speaker 1: The goal was to create a market where rich countries
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  Speaker 1: which produce a lot of the emissions, like the U
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  Speaker 1: S or Europe, would find ways to reward developing countries
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  Speaker 1: that to cut their emissions faster, protect forests, and this
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  Speaker 1: trading system was supposed to exist to enable the transfer
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  Speaker 1: of money to help developing countries meet their climate goals,
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  Speaker 1: because you didn't want them to be in the same
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  Speaker 1: posilus that the rich country used initially to become richer.
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  Speaker 1: The trouble is that market never got created because of
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  Speaker 1: squabbling in the United Nations. What ended up happening instead
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  Speaker 1: was because these projects were being created. Uh, they created
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  Speaker 1: a voluntary market to sell these credits. And so within
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  Speaker 1: that the specific project we looked at, it's called the
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  Speaker 1: Kariba project UM. And what villages do over there is
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  Speaker 1: UM they protect the forest from being lost. So in
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  Speaker 1: two thousand Leabin, for example, UM, about half a percent
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  Speaker 1: of the forest was being lost every year. And when
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  Speaker 1: these people came through and started funding the projects, that
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  Speaker 1: rate felt salty about point two. So there's clearly been
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  Speaker 1: some impact, but it doesn't mean that they are planting
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  Speaker 1: extract trees and growing the forest and actually called capturing
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  Speaker 1: the carbon outside. Well, and how do you how is
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  Speaker 1: this decided you have to plan x many trees to
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  Speaker 1: offset x amount of carbon? I mean, how do you
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  Speaker 1: come up with those values? Yes, very good question and
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  Speaker 1: really tricky because I think about the way carbon travels. Right,
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  Speaker 1: Liquefied natural gas is being removed from deep underground where
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  Speaker 1: it's been sitting for millions of years. It's being then
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  Speaker 1: burned and put into the atmosphere. Trees, at best, they
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  Speaker 1: can capture the carbon and only keep it for their lifetime.
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  Speaker 1: The longest tree probably lives a thousand years, like most
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  Speaker 1: trees die within a few decades, and when they die,
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  Speaker 1: they degrade and release the carbon dioxide, so you're not
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  Speaker 1: replacing one to one. The fossil fuel carbon is an
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  Speaker 1: additional carbon in the system, whereas the tree carbon really
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  Speaker 1: just recycles in the system UM, and that's just tree.
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  Speaker 1: There are other solutions you can apply, such as UM
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  Speaker 1: using minerals, So you take a type of rock which
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  Speaker 1: can then react with carbon excel in the air and
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  Speaker 1: then trap that carbonat side forever as zonk rather than
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  Speaker 1: any other form, and that would be the equivalent of
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  Speaker 1: UM the fossil fuel. But when it's a nature based
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  Speaker 1: solution like the trees, the math is really hard to work.
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  Speaker 1: And that's why experts told us that just buying a
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  Speaker 1: few dollars worth of credits for your fossil fuels isn't
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  Speaker 1: going to make them carbon you so act you know,
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  Speaker 1: Kayley is a very cynical reporter, or so I'm gonna
• 10:50
  Speaker 1: ask the question that she's dying to ask, which is basically,
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  Speaker 1: do carbon offsets really help stop climate change? Or is
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  Speaker 1: this just kind of a marketing employ And because I
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  Speaker 1: am a science reporter, I'll have to give you a
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  Speaker 1: nuanced answers. So the nwanswer is they help, but not
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  Speaker 1: as much as we think. So when we buy carbon offsets,
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  Speaker 1: if we're thinking we're buying one ton of carbon, we
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  Speaker 1: are not really buying one ton of carbon. We are
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  Speaker 1: buying probably a fraction of that. And so when corporations
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  Speaker 1: use carbon off sets to balance their carbon books, that
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  Speaker 1: is actually, in a way a fictitious transaction. That's happening.
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  Speaker 1: Carbon offsets or protecting forests is an absolutely key climate solution,
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  Speaker 1: But buying them through the offset market to be able
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  Speaker 1: to get rid of your carbon since isn't the way
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  Speaker 1: to do them. Um, what is the way that system
• 11:45
  Speaker 1: needs to be created? And there's a lot of work
• 11:47
  Speaker 1: going out around that, but the way carbon neutral commodities
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  Speaker 1: are being sold is definitely not the solution. All right,
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  Speaker 1: Dr shot Rothy, thanks so much for joining to really
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  Speaker 1: appreciate it. The climate and Energy reporter for bloombergreen with
• 12:00
  Speaker 1: our big Take story of the day. And I'll tell you, folks,
• 12:03
  Speaker 1: these big take stories are phenomenal reporting, great graphics, just
• 12:07
  Speaker 1: a great read. And we have them every day here
• 12:09
  Speaker 1: on Bloomberg. So go to Bloomberg dot com check those out.
• 12:12
  Speaker 1: Some great reporting from our good folks at Bloomberg News.
• 12:19
  Speaker 1: You know, when the pandemic hit, we saw corporate America,
• 12:22
  Speaker 1: the big, big companies kind of rushed at the capital markets,
• 12:25
  Speaker 1: the debt markets, the equity markets, to short up the
• 12:26
  Speaker 1: balance sheets, to prepare them for an uncertain future. The
• 12:29
  Speaker 1: question was and is still how about some of these
• 12:32
  Speaker 1: small and mid size businesses, how do they deal with
• 12:36
  Speaker 1: the pandemic and the following economic disruption. Well, Christiamo has
• 12:40
  Speaker 1: a front row seat there. He's had a commercial banking
• 12:42
  Speaker 1: at TD Bank located in New York. Chris, thanks so
• 12:45
  Speaker 1: much for joining us. I'd love to get a sense
• 12:47
  Speaker 1: of kind of what your clients, your customers were thinking
• 12:52
  Speaker 1: about in the beginning of the pandemic, how they dealt
• 12:54
  Speaker 1: with the pandemic um in terms of you know, staying afloat,
• 12:58
  Speaker 1: shoring up their businesses ring up their balance sheets. What
• 13:01
  Speaker 1: did you see? Yeah, well, thanks Paul, thanks for having me,
• 13:04
  Speaker 1: and uh, I think as you opened it up, you know,
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  Speaker 1: your spot on small businesses had to deal with this
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  Speaker 1: very differently than large corporations. You know, as you know,
• 13:14
  Speaker 1: small business is the backbone of the economy here in
• 13:17
  Speaker 1: the US, and many of these smaller companies don't have
• 13:22
  Speaker 1: the resources that large corporations have, and you know, we
• 13:26
  Speaker 1: saw that they had to really rely on their banks
• 13:29
  Speaker 1: and other accountants and attorneys and those types of vendors
• 13:34
  Speaker 1: to help them, whether it was access to capital or
• 13:39
  Speaker 1: executing on contingency plans as they dealt with this shutdown.
• 13:43
  Speaker 1: And you know, I know, you know with us here
• 13:46
  Speaker 1: at TD Bank, that's the role we played, um not
• 13:49
  Speaker 1: just with being a top ten player in the Triple
• 13:52
  Speaker 1: P program where we distributed over a hundred and thirty
• 13:56
  Speaker 1: thousand loans with over twelve billion of capital to those clients,
• 14:02
  Speaker 1: but really active as that trusted advisor. We talk a lot,
• 14:06
  Speaker 1: especially with some of the large banks, about how consumer
• 14:08
  Speaker 1: loan demand growth just hasn't really been there because they
• 14:11
  Speaker 1: had so much cash patting their pockets after all the
• 14:13
  Speaker 1: fiscal stimulus that isn't I know, necessarily the case for
• 14:16
  Speaker 1: some of the small businesses. What has loan demand looked
• 14:19
  Speaker 1: like post stimulus, post lockdowns? You know, as we recover well,
• 14:25
  Speaker 1: you know, loan demand has been a little bit tepid,
• 14:27
  Speaker 1: and there has been a lot of stimulus with the
• 14:29
  Speaker 1: Triple P program and other programs for businesses too. I
• 14:33
  Speaker 1: would say that there's cautious optimism. Many of the businesses
• 14:37
  Speaker 1: that we've surveyed or spoke to believe that they're going
• 14:41
  Speaker 1: to expand in the near future. They see revenues going up,
• 14:45
  Speaker 1: but that pent up demand. Um, you know, there's some
• 14:49
  Speaker 1: headwinds there too. You know, there's a shortage on labor.
• 14:53
  Speaker 1: We're seeing rising wages, difficulty for small businesses to hire,
• 14:58
  Speaker 1: there's a supply cha disruption right now. And then with
• 15:02
  Speaker 1: the current delta variant out there, those are some of
• 15:05
  Speaker 1: the unknowns that I would say are the cautious part
• 15:08
  Speaker 1: of that optimism. I noted. Yeah, you know it's Chris,
• 15:13
  Speaker 1: you know, lunchtimes, I'll walk around Midtown here and you know,
• 15:17
  Speaker 1: you see obviously a lot of empty retail stores that
• 15:22
  Speaker 1: that were there before the pandemic um and that's heartbreaking.
• 15:26
  Speaker 1: But you're also seeing, you know, some signs saying coming soon. Um,
• 15:31
  Speaker 1: so some new businesses starting to form. What are you
• 15:35
  Speaker 1: seeing in terms of that kind of new business formation
• 15:37
  Speaker 1: which I know for a bank is a is a
• 15:39
  Speaker 1: source of loan growth. Well, you know your observations are
• 15:43
  Speaker 1: accurate because new business formation has increased throughout the pandemic.
• 15:48
  Speaker 1: Obviously there was some disruption, but anytime there's disruption, you
• 15:53
  Speaker 1: know that that creates you know, both challenges but also opportunities.
• 15:57
  Speaker 1: And there's a lot of capital on the sideline and
• 16:00
  Speaker 1: still and we do see some excess liquidity from the
• 16:04
  Speaker 1: stimulus and as people were harvesting cash in preparation, you know,
• 16:09
  Speaker 1: during this shutdown. So you know, the entrepreneurial spirit I
• 16:13
  Speaker 1: think is still strong and always very resilient. So with
• 16:16
  Speaker 1: that disruption, you are going to see new business formations continue.
• 16:21
  Speaker 1: Does the delta variant change activity? Have you seen any
• 16:25
  Speaker 1: difference over the past couple of weeks as that has
• 16:28
  Speaker 1: become you know, a more prominent force in conversation, Yeah,
• 16:32
  Speaker 1: I think it will have businesses and entrepreneurs kind of
• 16:35
  Speaker 1: pressed the pause button a little bit to see how
• 16:37
  Speaker 1: this plays out. Um, there's a lot of obvious unknowns there,
• 16:42
  Speaker 1: but there is an effort to deploy the capital that
• 16:47
  Speaker 1: they've had through the stimulus and that they saved to
• 16:50
  Speaker 1: expand their businesses. But I think they're going to be
• 16:52
  Speaker 1: a little bit cautious to see how this plays out. Chris,
• 16:58
  Speaker 1: how's the credit quality of your loan book? Look? Here?
• 17:02
  Speaker 1: I mean, I've been pleasantly surprised that you know the
• 17:06
  Speaker 1: number of bankruptcies. Although we did see a number of
• 17:08
  Speaker 1: retail ones early in the pandemic, whether it's Brooks, Brothers
• 17:11
  Speaker 1: and others, it seems like the government support has kind
• 17:14
  Speaker 1: of really been important, played a big part. How's your
• 17:18
  Speaker 1: kind of credit quality and your loan book looked? It's
• 17:21
  Speaker 1: actually outperformed what we thought that downside from what our
• 17:24
  Speaker 1: risk models would say, and I would say when we
• 17:27
  Speaker 1: talked to clients early on in the pandemic when they
• 17:30
  Speaker 1: were doing their projections downside projections, the actual performance has
• 17:36
  Speaker 1: outperformed what their downside was, whether they took a more
• 17:39
  Speaker 1: conservative approach and appropriately so as did h T D
• 17:45
  Speaker 1: and many banks. Um, we are seeing that performance um
• 17:49
  Speaker 1: be stronger than we anticipated. All right, Chris, thanks so
• 17:52
  Speaker 1: much for joining us. We really appreciate getting your thoughts there,
• 17:55
  Speaker 1: are getting a good look at small and midsize market
• 17:58
  Speaker 1: from a loan perspective. Chris Giammo, head of commercial banking
• 18:01
  Speaker 1: for TD Bank, President and is having some week in
• 18:07
  Speaker 1: the halls of Congress this week. Billion dollar infrastructure bill,
• 18:12
  Speaker 1: three point five trillion dollar budget, uh, kind of winding
• 18:16
  Speaker 1: its way through the halls of Congress. Let's get an
• 18:19
  Speaker 1: update on kind of how we should be positioning these
• 18:22
  Speaker 1: legislative wins. Genie shanon Zano, Bloomberg Politics contributor and a
• 18:27
  Speaker 1: professor of political science at Iona College, joins us on
• 18:30
  Speaker 1: the phone. Genie, it seems like President Biding can take
• 18:33
  Speaker 1: a victory lab pretty soon if he chooses to. What
• 18:37
  Speaker 1: do you think he did yesterday? We heard him, you know,
• 18:40
  Speaker 1: a little bit upstaged a bit by Governor Cuomo. But
• 18:43
  Speaker 1: besides that, the White House was able to take a
• 18:46
  Speaker 1: little bit of a victory lap. But they were careful
• 18:49
  Speaker 1: to say this is just the first step. The passage
• 18:51
  Speaker 1: of the biff, the infrastructure bill you mentioned at about
• 18:54
  Speaker 1: one trillion and early this morning, after a long marathon
• 18:58
  Speaker 1: voter rama, the passage just on a Democratic line of
• 19:02
  Speaker 1: the three point five trillion dollar reconciliation bill. Um, those
• 19:07
  Speaker 1: two things they want to take in tandem to the
• 19:10
  Speaker 1: House and they want to try to move forward. But
• 19:12
  Speaker 1: still at this point he can't quite take that victory
• 19:15
  Speaker 1: lap he wants to because it could be maybe fall,
• 19:18
  Speaker 1: maybe some people even say early winter before these bills
• 19:22
  Speaker 1: get to his desk. So still a ways to go. Yeah,
• 19:25
  Speaker 1: So Jennie, let's focus on the House because Nancy Pelosi
• 19:27
  Speaker 1: might have her work cut out for her here wrangling
• 19:31
  Speaker 1: the different sides of the Democratic Party, the progressive specifically,
• 19:35
  Speaker 1: what do you expect will happen in the other chamber.
• 19:38
  Speaker 1: That is what we are watching, and as you mentioned,
• 19:40
  Speaker 1: it's all about Nancy Pelosi keeping these Democrats together. So
• 19:45
  Speaker 1: you have the progressive Democrats who are really focused on
• 19:49
  Speaker 1: this reconciliation bill, this big soft infrastructure bill, if you will,
• 19:53
  Speaker 1: that's what they want to see past. Yet you've got
• 19:55
  Speaker 1: the moderates and again all of these people facing re
• 19:58
  Speaker 1: election a too. They want to move forward on the
• 20:02
  Speaker 1: hardcore infrastructure, that one trillion dollar bill, and Nancy Pelosi
• 20:06
  Speaker 1: so far has been very clear she will not move
• 20:09
  Speaker 1: one without the other. Some people say she may maneuver
• 20:12
  Speaker 1: a little bit on that so far she has not,
• 20:15
  Speaker 1: so that is the big task for Nancy Pelosi. She
• 20:17
  Speaker 1: only has a three vote margin, so with anybody peels off.
• 20:21
  Speaker 1: And just to give you one example, look at the
• 20:24
  Speaker 1: debate over the salt. We have some New Jersey, New
• 20:27
  Speaker 1: York representatives saying no salt, no deal. Three of those
• 20:32
  Speaker 1: people pull off, and it's dead in the water. You
• 20:34
  Speaker 1: flip over to the Senate. And already this morning we
• 20:36
  Speaker 1: hear Joe Manchin Kristen Cinema saying three point five trillion
• 20:40
  Speaker 1: too big for them and their constituents. So this is
• 20:44
  Speaker 1: something of a tight rope that it's going to be
• 20:46
  Speaker 1: fascinating to watch, but very perilous for both Nancy Pelosi,
• 20:51
  Speaker 1: Chuck Schumer, and of course the White House. No salt,
• 20:54
  Speaker 1: no deal. For someone who lives in New Jersey, I
• 20:56
  Speaker 1: can I can understand that I'm in New York and
• 20:59
  Speaker 1: I and to pactly. So, Gene, is this I mean,
• 21:04
  Speaker 1: if you step back and you're the White House, how
• 21:06
  Speaker 1: big a win would this be? Or is this something?
• 21:09
  Speaker 1: Or is there still more to do? I mean, and
• 21:10
  Speaker 1: I'm just wondering is the White House going to take
• 21:13
  Speaker 1: this as all right? We really have some strength here
• 21:16
  Speaker 1: and we can maybe get some more things done. How
• 21:18
  Speaker 1: do you think the White House is venus whole process?
• 21:21
  Speaker 1: They have got to be very, very pleased so far
• 21:23
  Speaker 1: with how this have gone has gone, and they should
• 21:26
  Speaker 1: be applauded. They have not taken a hands off approach.
• 21:28
  Speaker 1: Previous White Houses have tried to do that. Let Congress negotiate,
• 21:32
  Speaker 1: not this White House. They have been intimately involved. But
• 21:36
  Speaker 1: you know, if they are able to do this, this
• 21:38
  Speaker 1: will be the biggest change to social welfare in the
• 21:41
  Speaker 1: United States since the nineteen sixties. I will be j
• 21:44
  Speaker 1: in the Great Society. This would be a monumental shift.
• 21:48
  Speaker 1: But again I want to underscore if if both of
• 21:52
  Speaker 1: these bills pass in tandem, and again it is a
• 21:55
  Speaker 1: perilous path forward, no room to maneuver in the Senate,
• 21:59
  Speaker 1: and just three votes in the House. So again, this
• 22:02
  Speaker 1: gives any single representative or senator outside voice to say,
• 22:06
  Speaker 1: you know what, no salt, no deal, or whatever you
• 22:09
  Speaker 1: want to fill in on that blank where the salt is,
• 22:12
  Speaker 1: and they can put the brakes on this thing. So
• 22:14
  Speaker 1: there's a lot of negotiation going forward. So still and if,
• 22:17
  Speaker 1: but if it does indeed all come to fruition, it
• 22:20
  Speaker 1: will be a bipartisan win at least for the bipartisan
• 22:24
  Speaker 1: package billion dollars of new spending for the president. Well,
• 22:28
  Speaker 1: is he likely to get another bipartisan victory or is
• 22:31
  Speaker 1: everything else going to be Democrat only from here on out.
• 22:33
  Speaker 1: I think it's very, very difficult to imagine that we
• 22:37
  Speaker 1: would see him be able to pass, for instance, police reform,
• 22:40
  Speaker 1: voting reform, you know, immigration reform, all of these other
• 22:44
  Speaker 1: big things he has promised. In the modern presidency, it's
• 22:48
  Speaker 1: usually that first year you go big or you go home.
• 22:51
  Speaker 1: He's already had COVID if he was able to get
• 22:53
  Speaker 1: this huge win for him, But they are going to
• 22:55
  Speaker 1: then be face to face with a re election for
• 22:59
  Speaker 1: the mid terms, and Republicans feel like they can pick
• 23:02
  Speaker 1: up the House and maybe the Senate, so they feel
• 23:04
  Speaker 1: the wind at their back on this. Even though nineteen
• 23:07
  Speaker 1: voted for this biff, We're gonna see a real fight
• 23:11
  Speaker 1: on reconciliation. Let's not forget the deficit, a huge, huge issue,
• 23:15
  Speaker 1: and of course the debt ceiling is coming to fruition.
• 23:18
  Speaker 1: We are set to run out of money, as you
• 23:20
  Speaker 1: both know October November, and Republicans are fighting raising the
• 23:23
  Speaker 1: debt ceiling, So they are going to fight because they
• 23:26
  Speaker 1: don't want to give the president any more winds than this. Again,
• 23:30
  Speaker 1: if it passes, all right, Jennie, let's shift from Washington,
• 23:34
  Speaker 1: d C. To Albany UH. With Andrew Colmo's resignation yesterday,
• 23:39
  Speaker 1: what should we expect from the incoming governor? Kathy Hokel. Well,
• 23:42
  Speaker 1: speaking of having your work cut out for you, Kathy Hokel,
• 23:46
  Speaker 1: she has been lieutenant governors governor since. For those of
• 23:50
  Speaker 1: us in New York, we know of her, but her
• 23:53
  Speaker 1: name recognition has been fairly low, So that is something
• 23:56
  Speaker 1: she's going to have to deal with. But in terms
• 23:58
  Speaker 1: of specific issues, COVID and the delta reopening of schools
• 24:03
  Speaker 1: just in a week or so after she takes office,
• 24:06
  Speaker 1: we've got an economic recovery that's stagnated. She is an
• 24:10
  Speaker 1: upstate person. We've not had a governor from upstate in decades.
• 24:15
  Speaker 1: All of the political power, or much of it in
• 24:17
  Speaker 1: the state is famously downstate. And then of course you've
• 24:20
  Speaker 1: got a whole host of issues from corruption in Albany
• 24:23
  Speaker 1: to infrastructure. And of course she if she chooses to run,
• 24:27
  Speaker 1: is going to be facing a really, really big field
• 24:30
  Speaker 1: of potential Democrats and a primary and just a few
• 24:33
  Speaker 1: months after she takes office. Well, yeah, let's let's talk
• 24:36
  Speaker 1: about that. How has the landscape for that gubernatorial election
• 24:39
  Speaker 1: in two shifted. I think it has opened way up.
• 24:42
  Speaker 1: Everybody from Letitia James to obviously Kathy Hoko who would
• 24:46
  Speaker 1: be the incumbent if she chose to run, to build
• 24:48
  Speaker 1: a Blasio, Jimani Williams, Cynthia Nixon. I mean, you could
• 24:52
  Speaker 1: go on and on, big, big group of Democrats, and
• 24:55
  Speaker 1: New York, like much of the country, on the Democratic
• 24:58
  Speaker 1: side is fractured. You've got a lot out of energy
• 25:00
  Speaker 1: and the progressive left left, as we saw with Cynthia
• 25:03
  Speaker 1: Nixon's bid against Governor Cuomo last time around, and you've
• 25:06
  Speaker 1: got moderates who rule up state. So that fight is
• 25:10
  Speaker 1: going to continue. And Kathy hokel is a moderate to
• 25:13
  Speaker 1: conservative Democrat, that is how she has always defined herself.
• 25:17
  Speaker 1: So she will have to get the energy of the
• 25:19
  Speaker 1: progressive left if she wants to win a primary in
• 25:22
  Speaker 1: this state. But she is also a very very good
• 25:25
  Speaker 1: campaigner and a great fundraiser, so she's got a lot
• 25:28
  Speaker 1: to offer there. And of course we have to say
• 25:30
  Speaker 1: the first female Governor of New York. Which is sad
• 25:32
  Speaker 1: to say, but in two and thirty years we finally
• 25:35
  Speaker 1: got to win, all right. Jennie, thank you so much
• 25:38
  Speaker 1: once again for joining us and sharing your insights. Jennie Chanzano,
• 25:41
  Speaker 1: Bloomberg Politics contributor, also a professor of political science at
• 25:45
  Speaker 1: Iona Colleges, joining us on the phone there with some
• 25:47
  Speaker 1: great insight, not only in Washington, d C. With this
• 25:51
  Speaker 1: budget moves, but also in Albany with the hoops there.
• 25:55
  Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
• 25:58
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• 26:02
  Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
• 26:05
  Speaker 1: at Matt Miller three. On Fall Sweeney I'm on Twitter
• 26:09
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• 26:12
  Speaker 1: us worldwide at Bloomberg Radio