Core PCE Data Cools , Trump Conviction

Published May 31, 2024, 4:43 PM

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Elias Sabo, CEO of Compass Diversified, discusses Core PCE Deflator eco data. Scott Rechler, CEO and Chairman of RXR, discusses the latest in commercial real estate. Robert Mintz, Former Federal Prosecutor and Partner at McCarter & English, talks about the legal implications of former President Donald Trump's guilty verdict. Joe Mathieu, Co-Host of Bloomberg Balance of Power, recaps former President Donald Trump's press conference. Sridhar Natarajan, Bloomberg News Senior Finance Reporter, discusses his Big Take story: “Wall Street Billionaires Rush to Back Trump, Verdict Be Damned.”

Hosts:  Paul Sweeney and Alix Steel 

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We want to go to Ala Sabos. I've done him for a long time. He's CEO of Compass Diversified. He's joining us from California and he has a portfolio of companies that he invests in a lot of them are retail and a lot of them are in other sectors, so we can kind of get to all of them. And he's a great person to talk about retail but also infleetion. That PC data kind of right in line with where we were expecting it, So nothing moving the needle either way. When it comes to the fed Alias, it's great to see you again. It's been a while. Let's just start with retail for a second. What is your read on the consumer right now?

Yeah, good morning, Alex. Nice to see you as well. You know, we're seeing the consumer and I hate to continue to say the same thing, but we're seeing this bifurcation where the more affluent consumer continues to spend and spend if there's products that they want or services that they like. And the you know, more inflation impacted consumer on the lower end is having to make real choices, and so that trend continues. But what I would say we've seen, you know, kind of in the more recent few months is just a steady weakening of kind of activity. Our industrial business has seen a little bit of a step down. The consumer business is growing quite rapidly, but is starting to slow a little bit from where it was. So I think the consumer is starting to weaken, and we saw that with the you know, kind of retail sales data which fell on a real basis today.

So Elias, a lot of folks are saying, when when you look at the consumer out there, there's, boy, there's at least two types of consumers out there, the ones that are maybe asset rich and they're benefiting from the rise in the stock market, the bond market, you know, real estate, and those that aren't that are really filling the brunt of inflation. Do you see that in kind of your companies that you invest in.

Yeah, Paul, we you know, in the companies we invest in mostly skew towards the more affluent consumer, and so those are more balance sheet rich customers that we have, and we've seen just really robust shopping patterns continue with that consumer subset. We have a small portion of our business that is more at the lower end and goes through the mass market, and for the last couple of years, that business has really been under pressure and we're seeing that consumer you know, have to make choices, and so, yeah, there is a real bifurcation. And right now being at the affluent end is where the market is holding up.

Well, all I ask, what's the inflation and the supply chain issue when it comes to retail. Where is it now versus say, where it was a year ago?

Yeah, year ago, Alex, our inflation was principally coming from well it's coming from multiple places, but principally from labor, and there was a terrible imbalance between the demand for labor and the supply of labor. You know, fast forward to today, we're actually starting to see that reverse. In fact, I just came out of all of our board meetings about three weeks ago with our ten subsidiary companies. Nobody's complaining about labor problems anymore. You know, we're seeing wage pressures, you know, kind of elevated a little bit, maybe up fifty basis points from historical norms. You know, if you went back a year ago, that was two to three hundred basis point. So you know, we're seeing those labor pressures really subside right now. Where there are some pressures on inflation gets more to distribution costs, so warehousing, transportation. But in general, Alex, if there's one thing I would say, our view on the street is that inflation is probably following faster than what we even saw on today's report. And I say that because we have customers that are asking us now for price to concessions. We're doing the same with our suppliers, and we're seeing just easing of pressures across the board. So I think the trend in inflation is going to be down and down pretty significantly as the year up folds.

So Elias, I know you you're firm, your compass diversified focuses on three verticals branded, consumer, niche, industrial, and healthcare. Where are you seeing some of the best opportunities these days?

Yeah, I would say the best opportunities, Paul, are in consumer you know, what we've seen is the more defensive sectors, especially healthcare and where we invest as critical outsource services. Those have really attracted a lot of demand and so there's a lot of trades that are happening there, but there are very elevated prices in the consumer business inside. What we're seeing is the choppiness of consumer earnings coming out of the pandemic has led a lot of financing partners to exit that part of the market, and we're not seeing private equity be as active. So we're seeing good deals come in consumer.

We closed on.

A great company called the Honey Pot in January of this year, and so this is a perfect opportunity and market for us because competition is you know, pretty much exited the consumer space right now, or it's you know, very weak compared to where it's been, and that means pricing comes down as supply of deals comes back into the market.

What about industrials, niche industrials, what does that mean for Alias Sable right now?

Yeah, mostly or mostly alex we're working in the industrial tech side, so you know, think of things that are helping with green energy and you know, other technology enabled industrial processes. You know, the industrial business. This pricing is actually quite high there too, believe it or not, on the M and A side, and we're seeing some weakening in some of the order books. So it's a little bit confounding to us how pricing could be up as high as it is with the economy showing some weakness and that directly impacts industrial. But you know, I think where we are, which is more in the industrial tech side. You know, we think that stays in the United States, and that is going to be something that grows, especially with government policy changing and you know, a lot of the advent of AI in the in the you know, computing business. I think that's going to drive more manufacturing here and we're going to be able to do it pretty efficiently, especially in the higher tech industrial space.

Well, it's just real quickly, I'd love to get your perspective here. What's the financing market the capital markets like for a company like you'res looking to make acquisition, can you fancy your deals here? Obviously rising interest rates makes it a little bit tougher.

Yeah, So, Paul, we're a little bit different in that we are a publicly traded company and when we acquire we finance at the holding company, not at our subsidiary levels, and so the markets have been, you know, fairly open to us and have been, you know for the last couple of years. You know, we have bonds that publicly trade, and the pricing on those bonds have come down. They're still up from where we issued in twenty twenty one, but we issued sort of at the peak of the market. So the capital markets remain very much open for us. We've been able to raise capital both in the debt markets and on the equity markets to fund our acquisition programs. I would say in terms of the M and A markets, where you have single asset LBO financing, we're starting to see that market come back as well, but it is coming back with higher pricing, and so it creates a competitive advantage for us in our financing structure. But we are seeing financing come back into the middle market M and A space.

ALIAS thanks a lot. We really appreciate it. I love that you can hit on all the different industries and have a great window into the capital markets. Liasabos, CEO of Compass Diversified. That ticker on the NIC is COODI joining us from California. Interesting, right, I mean particularly with the industrials, like the order books are a little soft, but pricing is still strong, like and dislocations. But interesting in the inflation read that we're actually going to see inflation continue to come down. That could the FED be right?

Yeah, maybe the Fed does actually have a soft landing.

I mean that would be them.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven.

Thirty Alex Steel alongside Paul So we need. This is Bloomberg Intelligence Radio. We bring you all the top news in business and finance through a lens of our amazing analysts. They cover two thousand companies in one hundred and thirty industries worldwide. We also tackle the big topics in the world that we all have really big questions on, and one of them is commercial real estate. We're all waiting for that shoe to drop. Some shoes have dropped. We get the news over the last week that s read Barry Sternlick's reat is going to pause redemptions, very similar to what be redid a few years ago. And where are we in that cycle and why are we seeing that now? Well? Joining us for his insight, which may be a little counterintuitive, is Scott Reckler. He is CEO and chairman of our x R Commercial real Estate in New York. How you doing, Scott, I'm doing well.

Thanks for having me, Thanks.

For coming in. We really appreciate it. When I hear a headline that s Reed is halting redemptions, that makes me think, oh my goodness, Ciri is going to be toast. What's happening?

What do you see?

So I think you know, and Barry's been very vocal about this for a while, right, which is that there's been a day of reckoning coming and it's someone been delayed last year as the Federal Reserve got a little bit more dubbish in their tone that people thought maybe interest rates were coming down. But I think the industry is now going through it's five stages of grief and they've gone past the denial and are now at acceptance and so a recognition that rates aren't going to come down, and so it's not going to be some saving grace and so they have to deal with these challenges. So now the banks, the institutions are busy, you know, taking the appropriate marks, taking the appropriate reserves, and now we're gonna have to start going through the process.

It's a big problem.

Right There's a trillion dollars of debt that's coming due this year, two trillion dollars over the next three years. And most of this debt has been financed that, you know, unofficiently interest rates that are not normal interest rates right there, interest rates that are much lower for the last ten to fifteen years that aren't going to come back. And now we're going to have more normal rates. So we have to go through a reequitization. Means that there's going to be pain on the equity side, pain on.

The death side.

You saw today there's announcement about US Pensions having to take more write offs on the commercial real estate. We've seen you know, more banks having issues. I think that's going to happen as well. So we're just in the beginning now of facing this challenge and it's gonna be something that's going to work its way through through this year and into next year.

All right, So let's just say I've got a building in midtown wherever a part of that two point two trillion dollars that's coming. I go to my bank, the interust rate's much much higher. The value of my property is thirty forty fifty percent lower. I don't know something along that magnitude. You only loan to value fifty percent. Someone's got to get there.

Right, is exactly right?

So I mean, I think, and again this is different than like the two thousand and eight crisis. Right when two thousand and eight came, there was this injection of capital that really sort of lifted all values. Right, In this case, we have a structural period between the interest rates, and then some types of properties aren't going to be competitive. So you referenced an office building today, right, and then that commentary office not only has the revaluation because of interest rates, but people use office buildings differently, and some buildings are going to be competitively obsolete. So you have to pick the spots correctly, and then you have to face that reality. So the bank has to adjust its loan, the equity has to write off the equity and inject new equity, and you have to pick which buildings are going to be successful in this post pandemic world. I think, you know, the other piece of this is multifamily, which I think to me is more of the Achilles heel for the broader regional bank because there's a heavy concentration of multifamily in the regional bank around the United States. They have something like fifty to sixty percent of their book of business as loans, and those loans, even if just from an interest rate, even if credit is good, is underwater today, right. But now you also have new supply coming into the market. So there's going to be a couple of years of headwinds on that multi family market that I think is gonna put a lot of pressure on these regional banks going forward.

So when there is pressure, are you a buyer? Are you a seller?

What do you do? Yeah?

It doesn't I think you these are could be a generational moment of time to be a buyer, right, and so we're active in the market.

But you need to be very selective.

Right.

It's not just about having the capital.

You have to have the capabilities to choose which are the properties that are going to be successful. You need to bring down the basis so you're not going to do this and think values are going to come back. You're not doing this on a bet that interest rates are just going to fall and everyone's going to do well. So you have to find a way how are you going to create value? And you really can't be necessarily to try to time the tap or the bottom.

Right.

So, we had a company that we sold in January of seven, and you know, we didn't know it was the top, but it felt frothy, right, so we sold it. We came back in the market of August of nine. We didn't know where we were in the cycle. It just felt like the right time to enter. So moments like this is where you want to start entering before the all clear signal is sounded. But you have to be very selective, but know that there's a lot more trouble to come that's going to create more distress in the system.

Scott, do we have a housing shortage in this country? And if so, how did we get there?

Yeah, we definitely have a housing shortage in this country, and it really it began to transpire after the last financial crisis, right. You ended up being a situation where, you know, the ability to build new housing became more challenging. People more conservative. So there's you know, estimates about six million units of shortages of housing in this country. And now you know, because of what the low rates during the pandemic, you've had this incredible amount of people buying homes financing long so existing home sales aren't trading.

So we have this weirder nomaly.

Will interest rates are up, Housing prices have stayed strong, and the market it hasn't really weakened in that regard, and so you know it's going to exacerbate the problem, right because now if you have less construction as we get to two twenty twenty six, you're going to have less housing today than you have the demand for housing.

So when you're getting the feeling that you know there's distress, it's time to buy, even though they'll be more distressed later. How do you get that feeling? Like is there a screen that you look through to make sure like okay, not that property, but yes this property and if they're like right next to each other or something like, how does your brain work with that?

Scott, No, I think you've got to be very concrete and have you know then screen is a good word, right. We have formulas so like in for office as an example, you know, we called we created something called Project Kodak, and we said, some buildings are going to be digital that are going to be successful in the post pandemic world, and some are going to be filmed and they're not going.

To be successful. And we said, okay, we want to invest in digital.

And we put the whole the other criteria as to what is digital and those are the the properties that are digital.

What is digital?

So digital are buildings like this Bloomberg building right which are you know, don't have places where people can collaborate people, they don't want to come to work because you can engage with people. They're in good communities, they're easy access from public transportation, and so that that is something that ultimately will be successful of attracting people. And so you need digital buildings, but they still may have broken capital structures. So our objective on investing is identify the digital buildings with the broken capital structures, invest in them, fix the broken capital structures. And when you do that, you see the leasing. Like last year we least two million square feet of space. This year, you know, so far we have a million and a half square.

Feet of the leases out right.

So if you have the right building with the right capital structure, there's a lot of tenants that want to be there.

You know, I keep just stuck in my head from maybe eighteen months ago a Bloomberg News article came out and looked at Third Avenue, Manhattan between right where we are today fifty eighth Street and Grand Central down to forty second Street. Virtually you could write that whole part of Manhattan off. And that shocked me, because you've got some iconic buildings there, the Lipstick Building, just for example, what do you those aren't most of them are not A buildings. I've learned that term AA plus maybe there're be and c. What do you do with something like that?

Right, So this is really where you need to start thinking about adaptive reuse. Right, if a building is going to be competitively obsolete and it's an office build and what are the alternative uses? And so we as an example, we're in the process of converting five office buildings to multifamily.

Really and I hear that's hard. It's right.

Some don't work, right, So you need to find ones where you have the right type of footprint and the right location so you can efficiently you know, adapt those floors, and so that's something that is important.

But there's two caveats of that right. One is the value that you.

Need to be investing in that building needs to be almost the equivalent of land value, So you need to have the capitulation of value coming down to that in that mix there. And then the second you need incentives. And so we're fortunate in New York the state just passed a tax incentive that about ninety percent of the tax that you normally pay is deferred for thirty five years. You don't pay it for thirty five years, so if you go through that process. So public policy can help get that done. And that's something that I think is going to be help accelerate this transition.

That's fascinating stuff. I mean, real estate's always a fascinating business, but especially now. I don't know how these guys are doing it.

I love that Kodak one that's might get that use that.

We're going to use that if we'll give you a full attribution. But Scott Reckler, he's a CEO and chairman of our XR. We're talking real estate here. Lots of opportunities. I'm starting to hear more and more people come in here and say, you know, selectively, we think there's some time and some opportunities to make some acquisitions. So we appreciate checking in with Scott.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am on Affle Car Playing and broun Otto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Ballax Stale, Paul Swiney, We're live here on a Bloomberg Interactive Brokers studio. We're streaming live on YouTube each at night over YouTube dot com and search Bloomberg Podcast and that's where you'll find the video feed. Of course, the news of the last twenty four hours, Former President Trump found guilty in the hush money case. We've been talking about it all day.

We will bring you more President.

Former President Trump is scheduled to speak at eleven am Wall Street time. We will bring that to you when he does speak. The question now, I think for a lot of folks is now what happens? And for that we're going to check in with Robert Mints, former federal prosecutor. He's now a partner at the firm Macarter and English. He joins us from beautiful Princeton in New Jersey, home of hogy Haven via zoom. So anyway, best Hoby shop in the world, hogy Haven, just say laying it out there, we never had it. We'll go no blue remote there, Robert, thanks so much for joining us here. I guess the question on everybody's mind here. Robert is given these convictions thirty fourth felon accounts. Well, former President mister Trump, will he go to jail at all?

Well, that really is the big question here, and that's the decision that is going to be made solely by the trial judge. The way it works in York and everywhere else in a criminal case, the jury is the finder of fact. They ultimately determine guilt or innocence, and we know in this case they convicted the former president on all thirty four accounts. Now, the question of sentencing is entirely up to the judge and it could be anywhere from a probationary sentence to up to four years in prison or other possible terms and conditions home confinement. There could be a lot of different things the judge could do here, but it's a very weighty decision. And a very difficult decision for this judge to decide what is the right thing to do here, given the gravity of this case, given who the defendant is here, and given the that the defendant in this case, I think we're not going to see former President Trump coming in on sentencing day and expressing remorse.

For what he did.

Those are all factors that the judge will consider in fashioning his sentence.

How does a judge come up with a sentence? How does that work?

Well, typically what a judge does is he or she will look at the way similarly situated defendants have been treated in the past. So people who have been convicted of the same type of types of offenses, do they typically go to jail? If so, for how long In this kind of case, it's a record keeping case. Usually for a first defender, they will not be jail time. But there's also other factors that the court will consider the age of the defendant. As I mentioned earlier too, whether the defendant expresses remorse, acknowledges that they committed a crime, that they've done something wrong. And I think the judge will also take into account, at least in some manner, the fact that there are other pending criminal cases out there, and also the way in which former President Trump conducted himself during the trial. As you remember, the judge imposed a gag order that he was found in contempt several times for making statements that the judge found to have crossed the line. All of that may factor into this, and the judge will have to decide does he or does he not send former President Trump to jail, If so, for how long.

That's kind of where I wanted to go, Robert. We're waiting comments from former President Trump at eleven a m from Trump Tower. So my question is is he still subject to the gag rule because it doesn't appear that he's going to hold back on any commentary about the judge or the trial itself.

Well, that's a great question, and I think it's a little bit unclear, but generally probably not. Because the gag order was really imposed so that former President Trump would not make comments that might have affected witnesses or might have affected jurors. None of that really is relevant at this point. The case is over, there's been a conviction, So I think we're going to see former President Trump speak freely. I don't think we're going to see the judge in any way react to those comments unless it gets very personal with court personnel or with the judge. But otherwise I think the judges is going to let it go, but he will be watching. And I do think those issues on statements that are made by former President Trump may ultimately factor into his decision about whether or not to send former President Trump to jail.

And if so, for how long.

If this trial had been held in any other state but say California or New York, would it have gone any differently or would it be reasonable to have expected this outcome in the majority of durors and trials.

You know, that's a great question and obviously impossible to answer. I mean, I do think we saw a fairly diverse jury in the sense that you had people from various backgrounds socioeconomically, people who were from different parts of the city. So there was some balance to that. And you do have to remember that both the prosecution on the defense played a role in picking this jury. They were able to exercise what it's called peremptory challenges, which means to strikers who they did not want on the jury for whatever reason, and so they both jointly ended up picking this jury. But you're correct in that there is a jury pool the limited number of people that you'd find in Manhattan, And the question is would they be any different than a jury pool in some other state. The answer is, we really don't know. The reality is that probably is different from state to state. But that happens in every criminal case across the country, no matter where it's tried, whether you're in federal court or state court, there's going to be a difference, perhaps, for example, if you try the case in Florida, or if you try a case in New York. Then even within a state, for example, if you try a case in Miami versus in the northern part of Florida, you may find different jurors there. So that does happen all the time. But bear in mind that jurors are instructed, and if we assume they follow the instructions of the Corps, they are supposed to simply put all their biases aside. They're supposed to make a decision based solely on the evidence that's presented to them during the process of the trial, and that's how they make their decision. But obviously they bring their backgrounds, they bring common sense to it, and jurors are different, So it is quite possible that as this case has been tried in some other part of the country, there might have been a different result.

Hey, Bob John Tucker here real quick, just got a less than a minute left. Has Trump now violated the pre trial conditions of release in the Georgia case?

That's a good question. I don't actually know the answer to that. The fact that there's a conviction here and whether that how that may play into his terms of release in other states. It is something that those judges may consider, but I don't think it's going to ultimately affect his conditions of release. I don't think you're going to see anything more stringent being imposed upon and based upon this conviction.

So my final question for you, why do we have to wait so long to get a sentencing here? Like it just seems to prolong it in all the angst in the political sphere.

Well, it's really not unusual for the time between a conviction and a sentencing to be at least a couple months. In federal court is often even longer than that because what happens is there is a report that's prepared by the court system they ask all kinds of questions about the defendant, the background of the defendant. And this is an unusual case. Obviously, everybody knows who foreign President Trump is, they know his background. But it's going to be treated like any other case. And so it has to go through the same processes and procedures that any other defendant would, and the report has to be prepared. The defense has an opportunity to submit information, and this is generally how long it takes, at least a couple months before actual sentencing after the conviction.

Robert, thank you so much for joining us. Really appreciate it. Robert Mints. He's a former federal prosecutor. He's also partner now with McCarter and English. Joining us from Princeton, New Jersey.

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Former President Donald Trump speaking at Trump Tower in Middon and press conference in response to the finding being found guilty of.

For thirty four accounts, thirty four.

Counts of felony. So again some of the typical response. I guess we would expect he's calling this a sham and kind of being railroaded, so not certainly supporting.

What is going on.

Let's go to Joe Matthew right here, he's co host of the Bloomberg Balance of Power. Joe, I guess nothing new in the comments from former President Trump.

What are your thoughts here?

No, this is a pretty much rehash of the stump speech, to be honest, although he's going deep now, all the way back to January sixth, whether he attacked the Secret Service in the car. He started with the border, which was interesting. Of course, this was built as a press conference on his conviction. Yesterday, he's still in over a half an hour, has not taken one question. He's just going off the cough on a list of grievances. The one thing I'll point out here you can fact check this stuff all day long, is that when he gets into as he said, quote, this is all done by Biden and his people. This is done by Washington. This is a state case. You guys are sitting in New York and it actually has no direct connection to the administration.

Or Washington, meaning that it's a right, yes, understood. So what else really stands out though, in terms of what we can then expect in that campaign trail as we go forward, and this is being used as a political pinball within that well.

I think we've seen it already. Political prisoner is how he's billing himself, retribution towards how the campaign began. And look, if this comes down to a jailhouse call into the Republican convention in Milwaukee, and we don't know if that's going to be the case or not, he will probably find a way to spend that to his advantage. I mean, look, he's been selling mugshot t shirts for months and months now, making money on it. So this is someone who, as we see here in the process, he's making people laugh the way that he's making fun of Joe Biden. But the questions that we have are about the long term corrosive impact that this could have, particularly on independent voters, suburban women and folks who are looking now at a convicted felon. And we'll see what happens after he meets with his probation officer and is eventually sentenced.

So, Joe, I guess yeah, you.

Raised the political question is what the impact will be on I guess just folks that are not in either camp, some of those moderates, that people in the middle. Have we seen any polling on that, Joe.

We have, and some of it is right here at Bloomberg. We were asking in January in our Bloomberg Swing state pole what a conviction would do or an incarceration, and we did find within single digits the number of folks who said that they in fact would change their vote on that. But it's different when it's hypothetical. We didn't even know what trial we'd be talking about then, And there are posters in the field right now who are going to have an interesting look at what we see here. You could actually see a pop, almost a post state of the Union, in this case, a post verdict pop for Donald Trump. But does he keep that also fundraising? This does not seem to be bothering the mega donors who are gravitating toward Donald Trump, as well as the small dollar donors. As I mentioned before he started here, thirty five million dollars raised online since the beginning of this whole thing, since the verdict less than twenty four hours ago. They crashed the win red system that Trump uses to raise money last night. You couldn't even get on that app to raise money for a while if you wanted to. So this has been a mobilizing event. Let's see where it goes days and weeks from now.

I actually, this is a great point that you made that when you guys did the polling in terms of if Trump is convicted, will people still vote for him? That didn't specify which conviction. I think I missed that detail, meaning that maybe the Georgia election case a conviction, they're very different than a hush money trial.

Well, I guess that's true. I think the idea of convicted felon right when we think about the rhetoric or just sort of the aura that that brings. It's not a good thing not to mention someone incarcerated. That's just a different look too if you're someone behind bars. Not that either would keep him from running on a legal level. But so this is kind of the unknown. He's dealing with the cards. He's been Dealty's good at that. Joe Biden has been pretty good at staying out of it. Outside of his one decision recently to send Robert de Niro to the Lower Manhattan Courthouse. I'm not sure what else they have up their sleeve right now other than to let Donald Trump keep talking. I think that's Joe Biden's strategy as we speak.

And Joe, I guess we had some conflicting legal opinions today as to whether former President Trump is still under the gag rule. He seemed to say clearly in his remarks that he believes he is.

Yeah.

I talked to criminal defense attorney Robert mcwherterer about this. He said that technically, yes, this trial is technically not over until sentencing. So therefore Judge murshawn could in fact enforce the gag order if he wanted to. And I'll remind everybody that we're waiting to hear from the Supreme Court. Still, the fact that this is done now brings us to June, when we could get a ruling on this presidential and expect to this presidential immunity claim. That would then potentially unlock the next trial, that's the January sixth trial with Special Counsel Jack Smith.

That could be a.

Very major game changer for this campaign, and it would likely coincide with the final throes of the election. Imagine a world in which that trial was happening when the election took place, or in fact, was held between the election and the inauguration. Could we have a president elect on criminal trial and federal trial here in Washington. All of these remain questions and distinct possibilities.

So we have the benefit. I've talked about this for just half an hour. You're going to be talking about this for three more hours today as you did yesterday for three hours. What are going to be your questions? Like, how do you walk this forward now? And there's so many things we don't.

Know these are This is the moment I think they get granular. What are the next steps here for Donald Trump's defense? What is that appointment? What is his first meeting with his probation officer going to look like?

What will be the venue?

What is the Secret Service talked about with New York Corrections officials about a potential incarceration. We heard Nick Ackerman, the former Watergate prosecutor, talk about a presidential suite potentially being built at Riker's Island. But I also want to know about the jurors. There are a couple of folks, including our own Eric Larson and his team at Bloomberg. Mark Caputo's another one at the Bulwark, is going to join us at noon to talk about who these people actually were, what they were going through. Now that we want to reveal identities, but what did these Americans experience? What were their expressions, what did they hear, and what might have gone on inside that jury room?

Those are all questions I.

Have, all right, Joe, thank you so very much. We appreciate it. Joe Matthew, he's co host of Bloomberg Balance of Power, joining us from the Washington DC Bureau. And as you mentioned, Alex, he's gonna be he and his team will be spending a lot of time looking at this in this landmark court case from yesterday. Then some of the comments from the former president today, who is just finished speaking, so he's walking away from the lectern there so interesting.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Outo with the Bloomberg Business Act. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa playing Bloomberg eleven.

Thirty Big Take story today related to the news of the day regarding former President Trump. Wall Street billionaires rush to back Trump. Verdict be damned. A growing number of financial elites are throwing their weight behind Trump, who's found guilty in the first criminal trial of a former US as an entry Naa Rajen joins just one of the reporters on that story, Senior finance reporter Bloomberg News, joining us here in our Bloomberg Interactive Brokers studio. What is behind? What did you find in your reporting tree about what some of these billionaires or what are they thinking? Is they think about supporting former President Trump at the next election?

In some ways, it's not a surprise, but in some ways, in many ways, it's extraordinary. In almost any other generation, any other era, any other candidate, you would have assumed that there will be this entire crowd of supporters that will be looking to distance themselves from this individual. In this case, most of Trump's deep pocketed donors are actually rallying around him and using this guilty verdict as a rallying cry to get more support for him. And that has been the trend that we've seen. Those who have been trumped backers and have stood by him through all these years, continue to stand by him. Those who have been reluctant travelers don't seem to be getting swayed by the verdict, and in fact they're using it as an opportunity to more people into the Trump fold, and that's extraordinary. A lot of what they're attacking is is what they claim is the misuse of the legal system. These are titans of the industry. These are people who've used the legal system, the bedrock of capitalism in this country, in some ways to build grow a quie accumulate wealth. These are the very same people who look at this verdict and suddenly have a number of grave concerns about the carriage of justice or what they call miscarriage of justice in this case.

So in my world, the first kind of turn was Harold Ham, billionaire owns cnnental Resources, right, and he supported Nicki Haley, and he was saying he was not going to support President Trump because he just felt like he just said he wasn't electable. And then slowly, as the momentum couldn't pick up for a moderate like a Nikki Haley, if we'll just call her a moderate that eventually the rhetorics started to turn. And I'm wondering how many are similar like that on Wall Street, where in terms of electability, in terms of likability, in terms of focus, they don't want President Trump, but because they weren't able to rally the support behind a moderate, I were seen as a moderate, they have no choice. How much of it is that versus an actual support.

That's sort of a very interesting point. And I'd like to actually point to two important voices in the story today. One of them Dan Lufkin. He's ninety two today, but he is one of the co founders of DLJ. He therefore had one of the most prominent positions in the industry.

Right.

And here's a man who comes out and says, look, Wall Street has never been known and this is important the way he frames it. He says, Wall Street has never been known for its values. Is there a willingness to support Trump if it looks like he's on the right track. Yes, he says, I'm not proud of that, and I'm not part of that either, because he was a Nicki Hayley supporter, and he's definitely staying never Trumper. But he's saying that is definitely visible. And we have Whitney Tilson, former HETG fund manager ran a two hundred million dollar hatch fund, who says the industry does attract its own crowd of opportunists, and that sort of extends to Trump's backers in the upper rungs of the business community who've come out publicly right now. And his point is they've concluded Trump is going to win. They don't believe this is a dead heat. They are pretty certain and convinced themselves that Trump is going to win come November, and if he is the next president, then it is in their self interest to support him early. And you can't discount that logic.

You know, what I see in your story is, you know, kind of self made billionaires, Steven Schwartzman, Harold Lutnick.

What I don't see.

Is corporate CEOs, the CEO of Coca Cola or Procter and Gamble or something like that that probably says something as well. I mean, if I've got my billions, I don't really care what people think. I can maybe be more open with who.

Just yes, absolutely. But at the same time, I will also point out that a lot of these corporate CEOs were loud and vocal in twenty seventeen. In August twenty seventeen, after the white supremacist rallies in Charlottesville, Virginia, they were loud and vocal after jan six, twenty twenty one. What you have seen, in some ways is in a historic moment like this, right first have a former president to be tried in the for sort of in criminal counts to be found guilty. You would have thought that there would be more in the upper rungs of the business class so would be able to come out and point that out. But they are choosing to remain silent or at least don't want to express an opinion, and their silence in this case speaks as much as their comments in some of the previous instances.

No, I'm glad you brought that up, because something that we saw back in twenty and sixteen is it was silent supporters that people voted for Trump on Wall Street in particular, but no one said anything, and that that was in us why polls were so wrong and why I caught everyone else so off guard. Is it something the same way, like, hey man, I make a lot of money and I want lower taxes straight up, I'm going to vote for Trump, but I can't say excel lose clients.

And some of those who are backing and kind of also making that point publicly. But yes, in twenty sixteen, there was a I think it's fair to say, at least on Wall Street, there was a lot more stigma in being able to come out and openly say I back Donald Trump. Doesn't feel like that so much in twenty twenty four.

All right, so we haven't heard from JP. Have you heard from Jamie Diamond, CEOs or Brian moy in a hand you know, anything like that from Big Wall Street?

Not particularly, But it is interesting that yesterday Jamie Diamond was sort of the star attraction at this JP Morgan alumni event. This this is held at the Morgan Library every year. It's a bit of a tradition among the JP Morgan crowd. And a couple of years ago he did create quite a bit of a stir where he went on this sort of expletive laid and tirade against Donald Trump. That is Jamie Diamond, the Dean of Finance. This was back when m Jansick was still top of everyone's mind. Yesterday they're meeting a mere two hours after this guilty verdict, and Jamie doesn't even reference it to a tangential question about politics and the outlook. He talks about the need to respect the seventy four million voters who voted for Trump because they must have seen that he had done some good things. All fair points, but again interesting to note what he's choosing to remain silent on at this moment versus what he was vocal about just a couple of years ago.

All Right, Sree, thanks so much for jourinning a Shrinana Rojen. He is a senior financial reporter for Bloomberg News. Journey us here in our Bloomberg Interactive Brokers studio. The Big Takes story of the day. We love the Big Takes stories so well, deeply sourced and reported, lots of COO graphics for people like me, Wall Street billionaires, Rush Tobac Trump verdict be Damned is the headline on that story. So yeah, Wall Street has following the money.

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