June 27, 2025 • 35 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump said he was ending all trade discussions with Canada after claiming the country moved to implement a digital services tax, and threatened to impose a fresh tariff rate within the next week.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump posted Friday on social media.
The Canadian dollar dropped more than 0.5% almost immediately. Canada’s benchmark equity index fell, and the shares of companies that rely on trade across the border, including General Motors Co. and apparel maker Canada Goose Holdings Inc., also took a hit.
Canadian Prime Minister Mark Carney’s office and the country’s finance ministry did not immediately respond to requests for comment.
Dozens of countries face a July 9 deadline for Trump’s higher tariffs to kick back into place, and have been engaged in negotiations with the US. That group does not include Canada and Mexico. The president imposed tariffs the US’s North American neighbors earlier this year over fentanyl trafficking and migration concerns and talks with them are being handled on a separate track.
Today's show features:
- Bloomberg New Senior White House Correspondent Josh Wingrove on the latest US trade deal negotiations
- Harold J. Krent, Professor of Law at the Chicago-Kent College of Law on Friday’s Supreme Court decisions
- Alli McCartney, managing director of Wealth Management at UBS on the investing outlook for the second half of 2025 amid geopolitical uncertainty
- Michael Loeb, founder & CEO of Loeb.nyc on the venture capital landscape and the value of the Uncharted Summit
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
Daily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy, plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Carol, we got some good news from a framework with China, right,
We heard some details from that today. We heard details
last night on Bloomberg from Scott Besant. Kind of tough
to keep track of it all.
Speaker 3 (00:43):
Yeah, exactly, So maybe two steps forward, two steps back.
I don't know how you kind of gauge this, but
Josh Wingrove has to keep track of it all and
help us make sense of it. Bloomberg News Senior White
House correspondent. He is there in our Washington, DC bureau. Josh,
it's a lot today, but tell us abouts of all,
let's go to the bad news, because it does feel
like this is what's pressuring markets today, what's going on?
(01:05):
And what do you know about US and Canada's negotiations.
Speaker 4 (01:10):
Yeah, the news here is kind of out of left field.
But Trump is taking issue with this Canada Digital services tax.
This has been like a long running thing and it's
not new, but the first payments are due next week,
is our colleagues in Toronto are writing about. And so
this is sort of kind of dovetailing with this news
today of some sort of G seven agreement on global
(01:32):
taxation and the Global minimum tax that Trump and the
Trump administration or sort of touting, you know, I don't
want to get too buried in the weeds. Essentially, Trump
thinks that the Canadians are pulling a fast one on
him more or less and proceeding with this at a
time when there's other questions about how they should be
taxing these kind of things. And that's what led to this.
And it's kind of a surprise because Canada was one of,
(01:54):
you know, a handful of countries that does not have
a tarif deadline coming up right. They are not included
in the July ninth pause with a with about five
dozen countries and the EU set to face potential higher
tariffs on July ninth. China, Canada, and Mexico have always been,
or at least have lately been separate from that and
So the question here is what now The current Canada
(02:14):
tarif rate is twenty five percent, That is to say,
Trump's tariff on Canada is twenty five percent, but there
is a major exemption for goods traded under the USMCA
Trade Pact. So a blow of options here, I suppose three.
I guess one is this could be a bargaining tactic
and they could reach some kind of a deal to
Trump and seek to raise that rate that applies to
non USMCA goods, so from twenty five up to a
(02:36):
different number. For instance, he's previously doubled the rate on
stealing aluminum to fifty from twenty five. Or he could
try to claw back some of those exclusions on USMCA trade.
I think that third one. We get a lot of
blowback from American industry, in particular the auto industry, who
you know, were relying on these pretty integrated supply chains
and saw those exclusions as pretty key. But this is
a pretty explosive development here. Of course, just you know,
(02:58):
barely over a weeks the G seven when Trump and
Prime Minister Carney of Canada seemed to strike a pretty
upbeat tone. But Tuesday is Canada Day. You know, this
is not a way to celebrate. I guess the Canadians
are going to be upset by that. But we'll see.
We'll see.
Speaker 2 (03:16):
It's Friday, Josh. A lot can happen between now and
Canada Day.
Speaker 4 (03:19):
Okay.
Speaker 2 (03:20):
I want to go into some details here. This a
group of twenty one US lawmakers wrote to President Trump
earlier this month asking him to push for the taxes removal.
This tax is similar, as you mentioned, to one implemented
by some other countries, including the UK. It's equal to
three percent of the digital services revenue that a firm
makes from Canadian users above fourteen point six million dollars.
(03:43):
So this would apply to companies such as meta platforms
and alphabet You know, I want to zoom in on
what you said was sort of option number one here
the negotiating tactic. Is this the art of the deal,
because we've seen the President do this repeatedly over the
last few months. You can remember what happened on so
called Liberation Day and the way that he backed away
from some of those tariffs and put a pause on him.
(04:05):
But he did get some countries to move.
Speaker 4 (04:08):
Yeah, that's right, and we could be seeing that here.
I should note also, the Canadians thought there was like
a thirty day clock, or at least they said so
on the heels of that G seven meeting that were almost,
you know, halfway through that thirty days. So Canada wanted
some kind of a deal within thirty days, not only
on that twenty five percent and the exclusion for USMCA,
but the other sectoral tariffs, in particular autos, steel and
(04:31):
aluminum and the impact those could have. Trump has exempted
USMCA autos but may still tariff auto parts that are
USMCA compliant. That's gonna be a big deal for the Canadians.
So they're looking for some kind of grand bargain here,
and I think you if it is option one, if
this is a bargaining tactic, Trump is putting another thing
on the table here and saying this has to be
(04:51):
part of any sort of grand bargain. Prime Minister Carney
has been less quick than his predecessor Trudeau to hit
with counter tariffs. He's been much more measured. But the
flip side of that is he that has room to
do them if he wants to. So the Canadians right
now have been silent. Last I checked in response to
the President will see where it goes. But you know
(05:11):
this this that he could be looking for leverage here.
But the deadlines here are really kind of you know,
made up. Trump'ss seven days, but there's nothing holding them
to that. He doesn't have to do anything within seven days.
The Canadians have said thirty but likewise there's nothing holding
them to that. As opposed to the other countries. The
July ninth stuff that is in that is on the books,
those terrafts are going up on July ninth unless Trump
(05:32):
does something to change it. So those ones are a
different sort of landscape.
Speaker 5 (05:35):
Well let's go there.
Speaker 3 (05:37):
Because the EU and the US believe they can reach
a trade agreement before that July ninth deadline, that's when
the US is set to impose a fifty percent tariff
of nearly all EU products.
Speaker 5 (05:47):
That seems like maybe a very positive sign. Is it
a positive sign? Because that's a big one.
Speaker 4 (05:56):
It seems to be a positive sign. We've got on
the record comments from Hower Lattin sort of striking an
upbeat tone about it. Our colleagues Alberto Nadeli and Jorge
Valero and in Europe have some reporting today on the
European view of it. They sound equally optimistic. What's not
clear is are they are they reaching kind of what
like a China deal, like a framework type of deal,
(06:17):
you know, a pathway kind of deal, or are they
actually getting down to brass tacks and getting something more comprehensive.
That's not clear. And today we've had comments both from
Trump and Bess and Secretary Bestident of the Treasury, sort
of signaling a two tiered approach. Best saying, look, we've
got like twelve ten, eighteen something like that, big training partners,
and they might look to wrap that up by September first,
(06:39):
he said, Labor day. And that raises the prospect of
extensions for some countries. Bigger countries may be ones that
are making headway. On the flip side, it's about five
dozen countries in total that are facing a terrified and
Trump said today, look, you know, I might even raise
them before July ninth. We don't expect that, but he
sort of threw it out there, and he said that
he kind of wants to do maybe even twenty five
(06:59):
percent and tariffs and it's best and it's nicer than
him and Veston doesn't want to do it. And so
right now we've got this sort of multi track thing.
Right You've got a group of countries that maybe are
smaller trading partners that are facing a July ninth deadline,
and Trump is signaling that he might want to put
a higher tariff on them. Then he threw out the
number twenty five percent today, up from the baseline ten.
Then you've got other ones, presumably including the EU, that
(07:21):
will either reach a deal or maybe get an extension,
you know, with talks continuing throughout the summer. Then you've
got the China situation. They put some ink to paper
a couple of days ago on their framework, but there's
another deadline coming in August, so they'll be a fresh
sort of mile marker there. And then you've got the
Canada one, and I should add the Mexico one, both
of those not with firm deadlines, but now Trump pledging
(07:41):
something on seven days in Canada and Mexico separately, rumors
of some kind of field deal, and we don't know
where that stands right now. So a lot of moving
parts on this. Remember they talked about ninety deals in
ninety days. So far we have got like two, you know,
that are not necessarily full baked. So this is complex,
all right, complex stuff. But Trump loves tariffs.
Speaker 3 (07:58):
Remember that, Josh, You're sitting down a dinner or you're
I don't know, at a bar with a front tonight
and they say, hey, are we making progress on trade
the United States? They actually getting something done and in
a good way? Do you say yes or no?
Speaker 4 (08:09):
No one hangs out with me anymore because I just
talk about this stuff all the time. But I think yes.
I mean, that's is talking about I don't believe that September,
you know, so we could potentially it seems yes, they
could be. But remember Trump is clearly itching to want
to just send a unilateral number Liberation Day two point zero,
maybe a number not as high as the initial numbers
(08:29):
you put out, but higher than ten percent. And so
that combined with the fact that we still have more
sectoral tariffs coming, and the fact that he's demonstrated and
Chell for wanting to just raise them on his own,
like with stealing aluminum, the number of tariffs look like
they're going to go up, not down going forward. I
think the market should be aware of that.
Speaker 1 (08:47):
You're listening to the Bloomberg Business Week Daily podcast catch
US Live weekday afternoons from two to five Yes during
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch US Live on YouTube.
Speaker 3 (09:03):
The Supreme Court getting ready to wrap up this term,
and they did come down with five different rulings. A
big one was the US Supreme Court limiting the power
of judges to block government policies nationwide. They did leave
unresolved to fight over President Donald Trump's restrictions on automatic
birthright citizenship. But this all gets to tim specifically, what's
going on in terms of presidential power. We did have
(09:24):
the President hailing the decision as a monumental victory and
said the administration would move to get blocks lifted on
a number of his policies. Here's the president earlier.
Speaker 6 (09:34):
Thanks to this decision, we can now promptly file to
proceed with numerous policies that have been wrongly enjoined on
a nationwide basis. And some of the cases we're talking
about would be ending birthright citizenship, which now comes to
the fore.
Speaker 2 (09:51):
That was President Trump just a little earlier today commenting
on this US Supreme Court limiting the power of judges
to block some government policies nationwide. Let's bring in right now.
Harold Krant He's a professor of law at the Chicago
Kent College of Law, also the author of the book
Presidential Powers, Joining us to talk to these latest Supreme
Court decisions. That's exactly where I want to start, birthright citizenship.
(10:14):
This is something that during this term President Trump has
really gone after. What is your interpretation of what the
Supreme Court said today when it comes to what many
had deemed as a constitutional right of birthright citizenship.
Speaker 7 (10:27):
The Supreme Court did not directly address the question of
whether the ban on birthright citizenship is constitutional or not,
and most observers think it's not, but the Court refused
to wave into those waters. Instead, what the court held
was that the courts below aired in issuing the nationwide
injunction against the executive ordered by President Trump. Certainly this
(10:50):
is a victory in a sense for presidential power. It
denies a court the ability to enjoin a president nationwide.
While the resident on his or her behalf can obviously
affect the nation with one fail suit, as President Trump
has with all these executive orders. Now the attacks will
have to be the piecemeal fashion.
Speaker 5 (11:12):
So what does this mean then?
Speaker 3 (11:13):
I mean, does this in any way embolden President Trump
potentially to move on.
Speaker 5 (11:20):
I just I guess what I'm trying to do is
carry this out. What other actions might.
Speaker 3 (11:23):
Come forward, you know, when the Supreme Court comes back
that kind of the next turn that they might need
to be addressing, like what does this do in terms
of enabling him to move forward on maybe different initiatives
that maybe before this ruling he might not have done.
Speaker 7 (11:39):
So there are a number of maybe ten twelve nationwide
injunctions that are in place right now in terms of
stopping President Trump from cutting funding for various initiatives, stopping
him from firing federal employees, stopping him from reassigning employees.
Speaker 8 (12:01):
And right now those will no longer be binding.
Speaker 7 (12:04):
They're only binding to the extent that plaintiffs were properly
situated in the court. In other words, those people who
filed suit will get the benefit of the injunction, but
no one else. So, holding back to birthright citizenship, that
all those who joined the case as plaintiffs challenging this
policy will still get the benefit of the injunction. But
(12:26):
the fear is that after thirty days, if those plaintiffs
other than those plaintiffs the president may try to strip
citizenship and remove people from the country because they're no
longer protected by the injunction.
Speaker 8 (12:40):
The natural response.
Speaker 7 (12:42):
Should be either to file a class action or perhaps
to have state suit on behalf of their citizens. We
don't know if that will be successful or not, but
that will be the important reaction to the Supreme Court's
decision today. So all litigation will have to go now
more in a radic fashion to counter the presidential assertion
(13:04):
of authority. And only when all courts have spoken, or
at least when the Court is spoken, well, can the
presence policy be stopped across the board.
Speaker 2 (13:13):
You know, I want to follow on Carroll's question a
little bit, Professor, and talk about presidential power and the
consolidation of presidential power. How does this court, these nine justices,
how do they seem to define the power of the
president in a historical context of the presidential power that
we're traditionally used to as Americans with three co equal
(13:35):
branches of government.
Speaker 7 (13:37):
Yeah, obviously we've seen a shift here. It's shown in
various ways. It's shown in the fact that the Congress
no longer apparently has the power to limit the president's
ability to fire whoever he wants to in the administration,
and that's been true of these agencies such as the
National Labor Relations Board, the Federal Trade Commission, and many more.
(14:00):
It shows up in the fact that, again in this case,
that courts can't order in junctions nationwide against presidential policies
that they find illegal. And it's shown up, of course
in the presidential immunities case last year. Would suggests that
to a scary extent, not fully, but to a scary extent,
presidents are above the reach of the criminal law. So
(14:22):
in all these facets, we're seeing more that the court
is embracing a more powerful president at the expense of
Congress and even the judiciary itself. This is not to
say that Congress doesn't have levers. It's just that Congress,
as we know, it's not using whatever levers that it
still has remaining to it. And that's again and boldening
the president to taking even more power.
Speaker 3 (14:45):
All right, So you wrote the book of presidential powers.
We're talking about this what this decision means. And I
just wonder so, and maybe this isn't you're Beliwick, but
I do wonder, professor, whether we need to rethink kind
of government in terms of balance of We thought these
three branches would just do it. It worked for a
long time, it seemed to, and yet now we're seeing
(15:06):
it come undone. And to be fair, this isn't the
only administrative stration that has used a lot of executive orders,
but it does seem like the presidential position has gotten
a lot more powerful. So are there changes in our
government that you see need to be forthcoming, including the
judicial branch.
Speaker 8 (15:25):
I mean it's possible.
Speaker 7 (15:27):
I think that what most people think is that the
first step would be a reawakening of the legislative branch.
We always thought that the legislative branch was the most powerful,
at least intrinsically the most powerful, and that's certainly what
people thought at the framing when our country was formed.
But Congress has taken a back seat, and it's allowed
the president to seize more and more authority tariffs as
(15:49):
a perfect example, and hasn't fought back over TIFFs. It
hasn't bought back over the you know, the question of
sending migrants to third countries. It could it should think
that what we asserted the kind of by reasserting Congress
into the mix, I think it would be a more
healthy separation of powers balance to our government. So you know,
(16:11):
that would be the most logical wish list is for
that to happen. I don't know if it will. Congress
is not so far. Maybe it's going going to happen
with this big, beautiful bill, but you know, Congress hasn't
really seized the reins and tried to assert itself in
this mix.
Speaker 2 (16:28):
This one really has to do with what, if anything,
we learned from the justices and the discussion among the justices.
I know, people are still making their way and learning
about what was decided and what came out at the
Supreme Court today, what we learned about the Supreme Court,
But did we get any insight in the way these
different justices have approached presidential power. That differs today than
(16:49):
we've learned in recent months, ter in recent weeks.
Speaker 8 (16:52):
A little bit. I mean, the court is still fractured.
Speaker 7 (16:55):
There's still obviously a very very conservative wing and a
liberal wing and a couple of that we call swing
justices that will change. And so the configuration of the
court was different. Two delegation cases, the challenge of the
eight billion dollars of subsidies that the SEC gives us
to rural areas and to schools, where three justices conservative
(17:19):
justices dissented, but the remaining judges, the liberal judges and
the middle judges came together. And that was true in
another delegation case to an agency as well. In that
case there was a delegation to a group to side
what preventative care services must be funded by an insurance company.
So those are just two important cases where the middle
(17:40):
held out. But in terms of overall, I think the
issue that we could see, particularly from this the injunction case,
you know, is that the majority of the court is
content to have a very strong president over atop the
government with very few guard wheels. And that's what we
have to watch and that's what we're concerned about. And
(18:03):
now that these nationwide injunctions will be dissolving, we'll have
to see if the president moves vigorously and rapidly to
try to carry out his policies despite the possible very
very negative impact on people like wirth right citizenship for instance,
or federal workers who've been fired and so on.
Speaker 3 (18:25):
Yeah, I would expect you there's gonna be a lot
more discussion debate about this going forward on both sides
of the political aisle. Perhaps Harold Crenn, thank you so much.
He is professor of law a Chicago, Kent College of Law,
author of the book Presidential Powers. Joining us once again,
joining us several times here on Bloomberg. We're grateful to
his analysis.
Speaker 1 (18:43):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay 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.
Speaker 5 (19:02):
Alan McCartney's with us.
Speaker 3 (19:03):
She's managing director and at also private wealth management at UBS.
Speaker 5 (19:10):
She is working, and.
Speaker 3 (19:11):
We're curious to see what she gets out of this event,
like when you come here help Hello, Yes, what do
you get out of an event?
Speaker 9 (19:17):
Like you said this?
Speaker 10 (19:18):
So UBS and I traffic at the intersection in liquidity
events and in individuals, and so what does that mean?
That's entrepreneurship and so one of the beautiful things about
this event and about our partnership with it is Michael
Lobe opened by saying, this is a celebration of entrepreneurs
and entrepreneurialism. Right. And so if you go through all
(19:38):
of the things that are happening in our world today,
all of the trends, deglobalization being a big one.
Speaker 5 (19:44):
Right.
Speaker 10 (19:45):
Where does wealth come from in this country? It's intellectual property.
It is six million businesses founded last year. It is
being at these events and having funders and founders meet,
providing very valuable networking opportunities and for us to be
able to be supportive of that community full stop is
(20:07):
really the bread and butter of what we do at ubs.
Speaker 2 (20:10):
Does it give you new opportunities to bring new money
into your firm or is it more like okay, when
I'm allocating my client's assets. Yeah, I'm thinking about these
alternatives because I talked about these types of businesses with
people at this conference.
Speaker 10 (20:26):
So yes, and yes, I would say there are three
things it does. It is certainly, you know, a prospecting,
right rich environment in terms of there are people here
who obviously we know the numbers of the success of
startups and franchises, but some of these people are going
to be the next unicorns, right, So there's that. The
second is it allows me to learn about AI or
(20:48):
why the founder of Tesla, you know, founded Tesla and
what he's thinking about now. And then the third thing
is it allows me to find new opportunities for myself
and my clients to be outside of this environment, both
educated and proximant to the new trends that are driving
sort of where the puck is and how we'll invest
(21:10):
for sure.
Speaker 3 (21:11):
You know, it's funny you see the founder of Tesla,
because Elon Musk was not actually the founder, was he?
Speaker 5 (21:15):
Well, so no, what did he did? He there?
Speaker 1 (21:18):
He?
Speaker 10 (21:18):
So it was very funny because the first panel was
someone who's just spent seven months in the White House. Yeah,
and so Elon Musk was a topic of conversation there
and then they next ran after was the founder of Tesla,
who I thought Eberhart, who very elegantly decided not to
answer that question.
Speaker 3 (21:39):
He did, Yes, that's really funny. You know what's funny too,
is and I think about wealth management, you do have,
I'm assuming as clients a lot of folks that are
founders and whether they're looking to sell their company, find
a deal, or maybe you have other clients who have
money they want to put to work and they want
to have a piece of a company, a lot of
(22:00):
that is what goes on, right.
Speaker 10 (22:01):
So a lot of that is what goes on. So
I think, like, if you think about the path of
a founder of an entrepreneur, right, you have an idea,
there's something disruptive, there's some challenge or problem you're trying
to solve in the world. And you know, we were
learning today that most people self fund that by using
credit cards, personal assets and their four to one K. Right,
they make less than one hundred thousand dollars for years
(22:23):
and years and years, and they are just so embedded
in their company and the mission and the branding that
they're not thinking about the tax consequences, whether they can
take advantage of qualified soalled business stock. Could the business
be stuck in a marriage in court and decided by
the state of California or Florida if they don't have
a prenup so all of the So what we do
(22:45):
is we say, look, if you are extremely successful, you're
going to get to a liquidity point where some lawyer
or some general counsel or Anderson Tax is going to say,
have you talked about the planning and this? And at
that point you can maybe add a couple percent of value.
But if you can find these people as they are
(23:08):
stuck in what I call the valley of death, sort
of that middle part of building a business, and you
can get an hour with them, just to say, there
are a couple things we can do from an investment perspective,
an entity perspective, and a tax perspective that if you
are as successful as you think you are, you can
protect yourself and investors and you can make your net
(23:29):
much bigger than what it would be otherwise.
Speaker 2 (23:31):
As you know, entrepreneurs are not focused on this stuff
when no, no, no, So if they haven't taken advantage of
something like the QSBS as you talked about, which I
believe allows you tax free up to ten million dollars,
I mean, it's pretty remarkable.
Speaker 5 (23:43):
It's pretty remarkable.
Speaker 10 (23:45):
There are some like there're three litmus tests that you
have to pass and if they.
Speaker 2 (23:49):
Didn't set up the business that way initially can get
can they change it to actually get that benefit?
Speaker 10 (23:54):
Yes, it becomes increasingly difficult as you take in capital,
you have more LPs, et cetera. But there are many
many ways to do it. And I think most people
know about that ten million dollar headline number.
Speaker 5 (24:07):
But when the earlier you plan and the more that.
Speaker 10 (24:11):
Can actually be protected by using different irs, discounting strategies,
et cetera. So I've seen many many times that protected.
But again, so our goal is to try to be
in front of entrepreneurs and support them not only in
funding and marketing and building their networks, but to try
(24:33):
to get them either to think about which is really challenging,
or get them to sort of open up themselves to
allowing someone to act on their behalf even when they're
not there yet.
Speaker 3 (24:46):
So we'd be remiss to not ask you about kind
of the macro environment and what that means for entrepreneurs. Now,
we've got about a minute and a half left. Who
are you know, getting ready to wrap up the trade today?
It's been a volatile one again and we're also getting
ready to wrap up the trading week. You know, how
how do you feel about the environment? What do you
tell some of your clients?
Speaker 5 (25:04):
So it's a really hard environment.
Speaker 10 (25:06):
In the following so you look at your portfolio today,
private and public, and your public portfolio just hit an
all time high. Your private portfolio, you haven't gotten as
much capital back as you wanted. You've been in longer.
It feels a little, but your values, your marks are
still they feel okay too, but you feel pretty precarious
(25:26):
about both. And so that's affecting the way everybody at
every income level is spending, investing, traveling, you name it.
So the answer is our market is price to perfection,
from a trade perspective, from a geopolitical perspective, from a
big beautiful bill, and spending and deficit perspective. The next
(25:48):
I think six months in terms of the path that
the Fed takes with interest rates, whether our president actually
does put in a shadow FED, and what effect that has,
what happens in terms of the July ninth trade date,
right we're probably at about ten percent level of tariffs
right now. That's different than the thirty eight we were on,
you know, it's thinking about on April second. It's also
(26:10):
really different about the than the two point nine we
came into this president exactly. So there are a lot
of really macro trends that are going to very much
effect the next leg from here in both public and
private markets.
Speaker 3 (26:23):
Great conversation, Elli, Thank you so much. Elli McCartney, Managing director,
Private Wealth Management over at UBS, joining us here on
Bloomberg Business Weekdaily.
Speaker 1 (26:31):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 3 (26:46):
Michael Lobe is with us. This is his home, this
is his event. He's the founder and CEO of Lobe
dot NYC, and he co founded Uncharted a few years ago.
And I got to talk to you this morning, so
I feel kind of doubly blessed to get some more
time with you.
Speaker 5 (27:02):
The event is underway. Tell us about what you're hearing
some of the things so.
Speaker 11 (27:05):
Far, well, I think that there's a great deal of buzz.
Most people are saying exactly what you are, which is
that they're doubly blessed just to be here and get
to know everybody else.
Speaker 9 (27:18):
But I mean, the.
Speaker 11 (27:21):
If you were to take a look at the background,
you would see, you know, six hundred people talking to
six hundred other people.
Speaker 9 (27:29):
It's quite the event.
Speaker 11 (27:31):
And what we really want to do is foster relationships
between investors and companies, between companies and companies, and between
you know, CEOs looking for talent and talent looking for
CEOs so I think I think a good time is
being had by all. And certainly the weather has been
(27:52):
totally cooperating. I think you had someone to do with that,
So I thank you for that.
Speaker 5 (27:56):
You're very welcome.
Speaker 9 (27:57):
Right, So, yeah, little tiny wind, if you could take
that down.
Speaker 2 (28:01):
Just or this is kind of perfect. It beats the
weather we had earlier this week. I was a little
concerned about that. You know, an event like this, You've
been doing this for a few years. It started during
the pandemic, started a lot smaller. How do you and
I heard you say earlier today and your partners say
this too, Noah, that he is running into people constantly.
You say, yeah, they raised money as a result of
being here. They found a co founder here, they found
(28:23):
employees here. How do you measure the success of an
event such as this in the days, weeks and months
following it?
Speaker 7 (28:29):
Right?
Speaker 9 (28:30):
I wish we could, because I should have a vig
on all that.
Speaker 2 (28:33):
So we were just talking to Damon John, like, you know,
shark tank kind of thing. Maybe you could kind of
get in on that.
Speaker 5 (28:38):
I don't know it for a long time.
Speaker 9 (28:41):
So you know, I got to tell you.
Speaker 11 (28:43):
We do solicit testimonials of exactly the things that you're
talking about. We have quite a few of people saying,
you know, I met my founder there about two years ago. No,
and I get an invitation and it was shrouded and missed.
And it was three women who had us go to
an event downtown.
Speaker 9 (29:05):
And they brought us up on stage.
Speaker 11 (29:08):
Everybody started a collap And what that was is these
were three women never met before. They were all, you know,
elite athletes, and they decided there should be a fund
supporting elite athletes that they had a different point of view,
a different sense of how to compete, and they all
got along very very well, and that thesis led to
(29:30):
a fifty million dollar fund. So it's that type of
thing that you know, really propels us.
Speaker 3 (29:34):
Well, talk to us about you know capital, How much
is out there for startups?
Speaker 9 (29:37):
Wow?
Speaker 11 (29:38):
You know, it's funny things go in cycles. As you know,
this is not an up cycle for capital formation. Last
numbers I looked at and they're a little bit stale,
but you know, down sixty or seventy percent.
Speaker 9 (29:53):
Certainly the secondary market.
Speaker 11 (29:55):
If that's any indication at all, does illustrate that, you know,
there's a lot lot of illiquidity looking to get liquid right,
not nearly as frothy as it used to be, was
I pos even though that's starting to unlock a little bit.
Speaker 9 (30:10):
So no, it's it is hard and the money does.
Speaker 11 (30:14):
Gravitate these days to AI, so you need, you know,
if you have so win.
Speaker 5 (30:18):
There is an idea when there is a startup, that's
where it goes.
Speaker 9 (30:21):
It goes there, right.
Speaker 11 (30:22):
And what folks don't I think, really realize or appreciate
is the forces at play in venture and venture funding,
a venture capital which is I sometimes call it a
beauty contest, and that is because there's one breakout winner
in a category and then all the LPs are asking
(30:43):
their gps you know, what is your AI strategy? And
if the answer is you know, we think it's a
little over sold. We think it's a little bit you know, frothy.
Whereas there's going to be a couple of winners and
a lot of losers, we're taking a wait and see attitude.
The answer is bye bye, I'm bringing my money to
that fund that made that investment. So a lot of
(31:05):
pressure for them to jump in. And it's in those
situations that you know, not so good deals are made.
Speaker 2 (31:12):
Right, So yeah, does it you know in terms of cycles,
does it feel like this AI cycle is different than
previous tech hype cycles? And the reason I ask and look,
nobody wants to hear or utter the phrase this time
is different. But if you look out at the private
markets right now, you've got skyhag valuations, I think many
would argue for open AI right, for anthropic, for perplexity.
(31:34):
You have meta platforms coming in and dropping billions of
dollars to buy forty nine percent of an AI company
that barely existed. You have founders being poached. We're talking
one hundred million dollar signing bonuses. Yeah, force an individual
to go to a large company.
Speaker 9 (31:50):
Right.
Speaker 11 (31:51):
So I'm I look at my mailbox every day. I'm
looking for my hundred million dollar check hasn't come in yet.
Speaker 2 (31:56):
Right, So, if you're going to range, you know, you know,
make make your way your web browser or your you know,
your website dot ai and maybe it'll happen.
Speaker 11 (32:04):
I don't know, don so to me, and there's not
quite answering your question, but I'm it's all about me.
So I'm going to answer it from my perspective, which
is that to me, it feels different. Now, what does
it feel like I've been around for long enough, so
I'm something of the elder statement here statesman here, I've
(32:25):
been around long enough that I've seen a few cycles.
Speaker 9 (32:28):
This feels like.
Speaker 11 (32:29):
The late nineties and the late nineties was the advent
of the internet, right, and it feels this profound.
Speaker 9 (32:36):
Now. You know, people can say.
Speaker 11 (32:38):
Well, you know, if we look back two or three years,
it was NFTs and that was a false positive. And
before that it was blockchain, which was sort of a
false positive. And before that it was cannabis, and before
that it was bitcoin. And but this one feels real,
and this as the possibility of disrupting entire industries. I
(33:00):
had breakfast, by the way with a friend this past week.
He has a unicorn business is worth almost two billion dollars.
He has two hundred and seventy people, and he said, Michael,
by year end, it's one hundred and twenty.
Speaker 2 (33:12):
Meaning he is going to lay people off because AI
has become celefficient, a.
Speaker 11 (33:16):
Fast growing company, super fast growing company.
Speaker 9 (33:19):
That's really scary, I know, but that's what's going on.
Speaker 2 (33:22):
And so do you think so do you think there
is something? Do you think there is something to what
Dario Amaday has said who's the founder of Anthropic. Among
the co founders of Anthropic, there are many that in
a couple of years we're going to see a serious
uptick in unemployment as a result of this tech, Like
this is something policymakers need to be freaking out about
(33:43):
right now.
Speaker 11 (33:43):
Yeah, well, look, I respectfully disagree, and all I have
to go on is history and starting in the seventeen hundreds,
right when there was that industrial revolution in England and
we burned down all the factories with a spinning wheel,
thinking everybody would be unemployed. That has not happened, but
markets employment, people have an amazing ability to retrain themselves
(34:06):
find the opportunities. In the end, I think we're going
to be okay. Is there going to be some displacement.
There's always some displacement. I hope you find out find
something that we can have less lawyers, because we'd use
less warriors. But I think at the end of the day,
you know, brilliant people are going to find find their way.
And the people you're talking about are very smart people, engineers.
(34:29):
They will find their way. We're always going to need them.
And you know, this is going to be like every
other labor saving prediction.
Speaker 9 (34:37):
This is going to be just another one.
Speaker 3 (34:38):
All right, We're gonna unfortunately have to leave it there.
But thank you for inviting us. This has been fun.
Speaker 9 (34:43):
Thank you for inviting me. Guys, I believe this is yours.
Speaker 11 (34:49):
Oh that's not what they told me. They said after today,
it's all yours. That's not right, Michael, I wouldn't be
so nice.
Speaker 10 (34:56):
Well, the key is please.
Speaker 5 (34:57):
Michael Low, founder and CEO of Low NYC.
Speaker 1 (35:02):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(35:23):
and always on the Bloomberg terminal
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
Daily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy, plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Carol, we got some good news from a framework with China, right,
We heard some details from that today. We heard details
last night on Bloomberg from Scott Besant. Kind of tough
to keep track of it all.
Speaker 3 (00:43):
Yeah, exactly, So maybe two steps forward, two steps back.
I don't know how you kind of gauge this, but
Josh Wingrove has to keep track of it all and
help us make sense of it. Bloomberg News Senior White
House correspondent. He is there in our Washington, DC bureau. Josh,
it's a lot today, but tell us abouts of all,
let's go to the bad news, because it does feel
like this is what's pressuring markets today, what's going on?
(01:05):
And what do you know about US and Canada's negotiations.
Speaker 4 (01:10):
Yeah, the news here is kind of out of left field.
But Trump is taking issue with this Canada Digital services tax.
This has been like a long running thing and it's
not new, but the first payments are due next week,
is our colleagues in Toronto are writing about. And so
this is sort of kind of dovetailing with this news
today of some sort of G seven agreement on global
(01:32):
taxation and the Global minimum tax that Trump and the
Trump administration or sort of touting, you know, I don't
want to get too buried in the weeds. Essentially, Trump
thinks that the Canadians are pulling a fast one on
him more or less and proceeding with this at a
time when there's other questions about how they should be
taxing these kind of things. And that's what led to this.
And it's kind of a surprise because Canada was one of,
(01:54):
you know, a handful of countries that does not have
a tarif deadline coming up right. They are not included
in the July ninth pause with a with about five
dozen countries and the EU set to face potential higher
tariffs on July ninth. China, Canada, and Mexico have always been,
or at least have lately been separate from that and
So the question here is what now The current Canada
(02:14):
tarif rate is twenty five percent, That is to say,
Trump's tariff on Canada is twenty five percent, but there
is a major exemption for goods traded under the USMCA
Trade Pact. So a blow of options here, I suppose three.
I guess one is this could be a bargaining tactic
and they could reach some kind of a deal to
Trump and seek to raise that rate that applies to
non USMCA goods, so from twenty five up to a
(02:36):
different number. For instance, he's previously doubled the rate on
stealing aluminum to fifty from twenty five. Or he could
try to claw back some of those exclusions on USMCA trade.
I think that third one. We get a lot of
blowback from American industry, in particular the auto industry, who
you know, were relying on these pretty integrated supply chains
and saw those exclusions as pretty key. But this is
a pretty explosive development here. Of course, just you know,
(02:58):
barely over a weeks the G seven when Trump and
Prime Minister Carney of Canada seemed to strike a pretty
upbeat tone. But Tuesday is Canada Day. You know, this
is not a way to celebrate. I guess the Canadians
are going to be upset by that. But we'll see.
We'll see.
Speaker 2 (03:16):
It's Friday, Josh. A lot can happen between now and
Canada Day.
Speaker 4 (03:19):
Okay.
Speaker 2 (03:20):
I want to go into some details here. This a
group of twenty one US lawmakers wrote to President Trump
earlier this month asking him to push for the taxes removal.
This tax is similar, as you mentioned, to one implemented
by some other countries, including the UK. It's equal to
three percent of the digital services revenue that a firm
makes from Canadian users above fourteen point six million dollars.
(03:43):
So this would apply to companies such as meta platforms
and alphabet You know, I want to zoom in on
what you said was sort of option number one here
the negotiating tactic. Is this the art of the deal,
because we've seen the President do this repeatedly over the
last few months. You can remember what happened on so
called Liberation Day and the way that he backed away
from some of those tariffs and put a pause on him.
(04:05):
But he did get some countries to move.
Speaker 4 (04:08):
Yeah, that's right, and we could be seeing that here.
I should note also, the Canadians thought there was like
a thirty day clock, or at least they said so
on the heels of that G seven meeting that were almost,
you know, halfway through that thirty days. So Canada wanted
some kind of a deal within thirty days, not only
on that twenty five percent and the exclusion for USMCA,
but the other sectoral tariffs, in particular autos, steel and
(04:31):
aluminum and the impact those could have. Trump has exempted
USMCA autos but may still tariff auto parts that are
USMCA compliant. That's gonna be a big deal for the Canadians.
So they're looking for some kind of grand bargain here,
and I think you if it is option one, if
this is a bargaining tactic, Trump is putting another thing
on the table here and saying this has to be
(04:51):
part of any sort of grand bargain. Prime Minister Carney
has been less quick than his predecessor Trudeau to hit
with counter tariffs. He's been much more measured. But the
flip side of that is he that has room to
do them if he wants to. So the Canadians right
now have been silent. Last I checked in response to
the President will see where it goes. But you know
(05:11):
this this that he could be looking for leverage here.
But the deadlines here are really kind of you know,
made up. Trump'ss seven days, but there's nothing holding them
to that. He doesn't have to do anything within seven days.
The Canadians have said thirty but likewise there's nothing holding
them to that. As opposed to the other countries. The
July ninth stuff that is in that is on the books,
those terrafts are going up on July ninth unless Trump
(05:32):
does something to change it. So those ones are a
different sort of landscape.
Speaker 5 (05:35):
Well let's go there.
Speaker 3 (05:37):
Because the EU and the US believe they can reach
a trade agreement before that July ninth deadline, that's when
the US is set to impose a fifty percent tariff
of nearly all EU products.
Speaker 5 (05:47):
That seems like maybe a very positive sign. Is it
a positive sign? Because that's a big one.
Speaker 4 (05:56):
It seems to be a positive sign. We've got on
the record comments from Hower Lattin sort of striking an
upbeat tone about it. Our colleagues Alberto Nadeli and Jorge
Valero and in Europe have some reporting today on the
European view of it. They sound equally optimistic. What's not
clear is are they are they reaching kind of what
like a China deal, like a framework type of deal,
(06:17):
you know, a pathway kind of deal, or are they
actually getting down to brass tacks and getting something more comprehensive.
That's not clear. And today we've had comments both from
Trump and Bess and Secretary Bestident of the Treasury, sort
of signaling a two tiered approach. Best saying, look, we've
got like twelve ten, eighteen something like that, big training partners,
and they might look to wrap that up by September first,
(06:39):
he said, Labor day. And that raises the prospect of
extensions for some countries. Bigger countries may be ones that
are making headway. On the flip side, it's about five
dozen countries in total that are facing a terrified and
Trump said today, look, you know, I might even raise
them before July ninth. We don't expect that, but he
sort of threw it out there, and he said that
he kind of wants to do maybe even twenty five
(06:59):
percent and tariffs and it's best and it's nicer than
him and Veston doesn't want to do it. And so
right now we've got this sort of multi track thing.
Right You've got a group of countries that maybe are
smaller trading partners that are facing a July ninth deadline,
and Trump is signaling that he might want to put
a higher tariff on them. Then he threw out the
number twenty five percent today, up from the baseline ten.
Then you've got other ones, presumably including the EU, that
(07:21):
will either reach a deal or maybe get an extension,
you know, with talks continuing throughout the summer. Then you've
got the China situation. They put some ink to paper
a couple of days ago on their framework, but there's
another deadline coming in August, so they'll be a fresh
sort of mile marker there. And then you've got the
Canada one, and I should add the Mexico one, both
of those not with firm deadlines, but now Trump pledging
(07:41):
something on seven days in Canada and Mexico separately, rumors
of some kind of field deal, and we don't know
where that stands right now. So a lot of moving
parts on this. Remember they talked about ninety deals in
ninety days. So far we have got like two, you know,
that are not necessarily full baked. So this is complex,
all right, complex stuff. But Trump loves tariffs.
Speaker 3 (07:58):
Remember that, Josh, You're sitting down a dinner or you're
I don't know, at a bar with a front tonight
and they say, hey, are we making progress on trade
the United States? They actually getting something done and in
a good way? Do you say yes or no?
Speaker 4 (08:09):
No one hangs out with me anymore because I just
talk about this stuff all the time. But I think yes.
I mean, that's is talking about I don't believe that September,
you know, so we could potentially it seems yes, they
could be. But remember Trump is clearly itching to want
to just send a unilateral number Liberation Day two point zero,
maybe a number not as high as the initial numbers
(08:29):
you put out, but higher than ten percent. And so
that combined with the fact that we still have more
sectoral tariffs coming, and the fact that he's demonstrated and
Chell for wanting to just raise them on his own,
like with stealing aluminum, the number of tariffs look like
they're going to go up, not down going forward. I
think the market should be aware of that.
Speaker 1 (08:47):
You're listening to the Bloomberg Business Week Daily podcast catch
US Live weekday afternoons from two to five Yes during
listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch US Live on YouTube.
Speaker 3 (09:03):
The Supreme Court getting ready to wrap up this term,
and they did come down with five different rulings. A
big one was the US Supreme Court limiting the power
of judges to block government policies nationwide. They did leave
unresolved to fight over President Donald Trump's restrictions on automatic
birthright citizenship. But this all gets to tim specifically, what's
going on in terms of presidential power. We did have
(09:24):
the President hailing the decision as a monumental victory and
said the administration would move to get blocks lifted on
a number of his policies. Here's the president earlier.
Speaker 6 (09:34):
Thanks to this decision, we can now promptly file to
proceed with numerous policies that have been wrongly enjoined on
a nationwide basis. And some of the cases we're talking
about would be ending birthright citizenship, which now comes to
the fore.
Speaker 2 (09:51):
That was President Trump just a little earlier today commenting
on this US Supreme Court limiting the power of judges
to block some government policies nationwide. Let's bring in right now.
Harold Krant He's a professor of law at the Chicago
Kent College of Law, also the author of the book
Presidential Powers, Joining us to talk to these latest Supreme
Court decisions. That's exactly where I want to start, birthright citizenship.
(10:14):
This is something that during this term President Trump has
really gone after. What is your interpretation of what the
Supreme Court said today when it comes to what many
had deemed as a constitutional right of birthright citizenship.
Speaker 7 (10:27):
The Supreme Court did not directly address the question of
whether the ban on birthright citizenship is constitutional or not,
and most observers think it's not, but the Court refused
to wave into those waters. Instead, what the court held
was that the courts below aired in issuing the nationwide
injunction against the executive ordered by President Trump. Certainly this
(10:50):
is a victory in a sense for presidential power. It
denies a court the ability to enjoin a president nationwide.
While the resident on his or her behalf can obviously
affect the nation with one fail suit, as President Trump
has with all these executive orders. Now the attacks will
have to be the piecemeal fashion.
Speaker 5 (11:12):
So what does this mean then?
Speaker 3 (11:13):
I mean, does this in any way embolden President Trump
potentially to move on.
Speaker 5 (11:20):
I just I guess what I'm trying to do is
carry this out. What other actions might.
Speaker 3 (11:23):
Come forward, you know, when the Supreme Court comes back
that kind of the next turn that they might need
to be addressing, like what does this do in terms
of enabling him to move forward on maybe different initiatives
that maybe before this ruling he might not have done.
Speaker 7 (11:39):
So there are a number of maybe ten twelve nationwide
injunctions that are in place right now in terms of
stopping President Trump from cutting funding for various initiatives, stopping
him from firing federal employees, stopping him from reassigning employees.
Speaker 8 (12:01):
And right now those will no longer be binding.
Speaker 7 (12:04):
They're only binding to the extent that plaintiffs were properly
situated in the court. In other words, those people who
filed suit will get the benefit of the injunction, but
no one else. So, holding back to birthright citizenship, that
all those who joined the case as plaintiffs challenging this
policy will still get the benefit of the injunction. But
(12:26):
the fear is that after thirty days, if those plaintiffs
other than those plaintiffs the president may try to strip
citizenship and remove people from the country because they're no
longer protected by the injunction.
Speaker 8 (12:40):
The natural response.
Speaker 7 (12:42):
Should be either to file a class action or perhaps
to have state suit on behalf of their citizens. We
don't know if that will be successful or not, but
that will be the important reaction to the Supreme Court's
decision today. So all litigation will have to go now
more in a radic fashion to counter the presidential assertion
(13:04):
of authority. And only when all courts have spoken, or
at least when the Court is spoken, well, can the
presence policy be stopped across the board.
Speaker 2 (13:13):
You know, I want to follow on Carroll's question a
little bit, Professor, and talk about presidential power and the
consolidation of presidential power. How does this court, these nine justices,
how do they seem to define the power of the
president in a historical context of the presidential power that
we're traditionally used to as Americans with three co equal
(13:35):
branches of government.
Speaker 7 (13:37):
Yeah, obviously we've seen a shift here. It's shown in
various ways. It's shown in the fact that the Congress
no longer apparently has the power to limit the president's
ability to fire whoever he wants to in the administration,
and that's been true of these agencies such as the
National Labor Relations Board, the Federal Trade Commission, and many more.
(14:00):
It shows up in the fact that, again in this case,
that courts can't order in junctions nationwide against presidential policies
that they find illegal. And it's shown up, of course
in the presidential immunities case last year. Would suggests that
to a scary extent, not fully, but to a scary extent,
presidents are above the reach of the criminal law. So
(14:22):
in all these facets, we're seeing more that the court
is embracing a more powerful president at the expense of
Congress and even the judiciary itself. This is not to
say that Congress doesn't have levers. It's just that Congress,
as we know, it's not using whatever levers that it
still has remaining to it. And that's again and boldening
the president to taking even more power.
Speaker 3 (14:45):
All right, So you wrote the book of presidential powers.
We're talking about this what this decision means. And I
just wonder so, and maybe this isn't you're Beliwick, but
I do wonder, professor, whether we need to rethink kind
of government in terms of balance of We thought these
three branches would just do it. It worked for a
long time, it seemed to, and yet now we're seeing
(15:06):
it come undone. And to be fair, this isn't the
only administrative stration that has used a lot of executive orders,
but it does seem like the presidential position has gotten
a lot more powerful. So are there changes in our
government that you see need to be forthcoming, including the
judicial branch.
Speaker 8 (15:25):
I mean it's possible.
Speaker 7 (15:27):
I think that what most people think is that the
first step would be a reawakening of the legislative branch.
We always thought that the legislative branch was the most powerful,
at least intrinsically the most powerful, and that's certainly what
people thought at the framing when our country was formed.
But Congress has taken a back seat, and it's allowed
the president to seize more and more authority tariffs as
(15:49):
a perfect example, and hasn't fought back over TIFFs. It
hasn't bought back over the you know, the question of
sending migrants to third countries. It could it should think
that what we asserted the kind of by reasserting Congress
into the mix, I think it would be a more
healthy separation of powers balance to our government. So you know,
(16:11):
that would be the most logical wish list is for
that to happen. I don't know if it will. Congress
is not so far. Maybe it's going going to happen
with this big, beautiful bill, but you know, Congress hasn't
really seized the reins and tried to assert itself in
this mix.
Speaker 2 (16:28):
This one really has to do with what, if anything,
we learned from the justices and the discussion among the justices.
I know, people are still making their way and learning
about what was decided and what came out at the
Supreme Court today, what we learned about the Supreme Court,
But did we get any insight in the way these
different justices have approached presidential power. That differs today than
(16:49):
we've learned in recent months, ter in recent weeks.
Speaker 8 (16:52):
A little bit. I mean, the court is still fractured.
Speaker 7 (16:55):
There's still obviously a very very conservative wing and a
liberal wing and a couple of that we call swing
justices that will change. And so the configuration of the
court was different. Two delegation cases, the challenge of the
eight billion dollars of subsidies that the SEC gives us
to rural areas and to schools, where three justices conservative
(17:19):
justices dissented, but the remaining judges, the liberal judges and
the middle judges came together. And that was true in
another delegation case to an agency as well. In that
case there was a delegation to a group to side
what preventative care services must be funded by an insurance company.
So those are just two important cases where the middle
(17:40):
held out. But in terms of overall, I think the
issue that we could see, particularly from this the injunction case,
you know, is that the majority of the court is
content to have a very strong president over atop the
government with very few guard wheels. And that's what we
have to watch and that's what we're concerned about. And
(18:03):
now that these nationwide injunctions will be dissolving, we'll have
to see if the president moves vigorously and rapidly to
try to carry out his policies despite the possible very
very negative impact on people like wirth right citizenship for instance,
or federal workers who've been fired and so on.
Speaker 3 (18:25):
Yeah, I would expect you there's gonna be a lot
more discussion debate about this going forward on both sides
of the political aisle. Perhaps Harold Crenn, thank you so much.
He is professor of law a Chicago, Kent College of Law,
author of the book Presidential Powers. Joining us once again,
joining us several times here on Bloomberg. We're grateful to
his analysis.
Speaker 1 (18:43):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay 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.
Speaker 5 (19:02):
Alan McCartney's with us.
Speaker 3 (19:03):
She's managing director and at also private wealth management at UBS.
Speaker 5 (19:10):
She is working, and.
Speaker 3 (19:11):
We're curious to see what she gets out of this event,
like when you come here help Hello, Yes, what do
you get out of an event?
Speaker 9 (19:17):
Like you said this?
Speaker 10 (19:18):
So UBS and I traffic at the intersection in liquidity
events and in individuals, and so what does that mean?
That's entrepreneurship and so one of the beautiful things about
this event and about our partnership with it is Michael
Lobe opened by saying, this is a celebration of entrepreneurs
and entrepreneurialism. Right. And so if you go through all
(19:38):
of the things that are happening in our world today,
all of the trends, deglobalization being a big one.
Speaker 5 (19:44):
Right.
Speaker 10 (19:45):
Where does wealth come from in this country? It's intellectual property.
It is six million businesses founded last year. It is
being at these events and having funders and founders meet,
providing very valuable networking opportunities and for us to be
able to be supportive of that community full stop is
(20:07):
really the bread and butter of what we do at ubs.
Speaker 2 (20:10):
Does it give you new opportunities to bring new money
into your firm or is it more like okay, when
I'm allocating my client's assets. Yeah, I'm thinking about these
alternatives because I talked about these types of businesses with
people at this conference.
Speaker 10 (20:26):
So yes, and yes, I would say there are three
things it does. It is certainly, you know, a prospecting,
right rich environment in terms of there are people here
who obviously we know the numbers of the success of
startups and franchises, but some of these people are going
to be the next unicorns, right, So there's that. The
second is it allows me to learn about AI or
(20:48):
why the founder of Tesla, you know, founded Tesla and
what he's thinking about now. And then the third thing
is it allows me to find new opportunities for myself
and my clients to be outside of this environment, both
educated and proximant to the new trends that are driving
sort of where the puck is and how we'll invest
(21:10):
for sure.
Speaker 3 (21:11):
You know, it's funny you see the founder of Tesla,
because Elon Musk was not actually the founder, was he?
Speaker 5 (21:15):
Well, so no, what did he did? He there?
Speaker 1 (21:18):
He?
Speaker 10 (21:18):
So it was very funny because the first panel was
someone who's just spent seven months in the White House. Yeah,
and so Elon Musk was a topic of conversation there
and then they next ran after was the founder of Tesla,
who I thought Eberhart, who very elegantly decided not to
answer that question.
Speaker 3 (21:39):
He did, Yes, that's really funny. You know what's funny too,
is and I think about wealth management, you do have,
I'm assuming as clients a lot of folks that are
founders and whether they're looking to sell their company, find
a deal, or maybe you have other clients who have
money they want to put to work and they want
to have a piece of a company, a lot of
(22:00):
that is what goes on, right.
Speaker 10 (22:01):
So a lot of that is what goes on. So
I think, like, if you think about the path of
a founder of an entrepreneur, right, you have an idea,
there's something disruptive, there's some challenge or problem you're trying
to solve in the world. And you know, we were
learning today that most people self fund that by using
credit cards, personal assets and their four to one K. Right,
they make less than one hundred thousand dollars for years
(22:23):
and years and years, and they are just so embedded
in their company and the mission and the branding that
they're not thinking about the tax consequences, whether they can
take advantage of qualified soalled business stock. Could the business
be stuck in a marriage in court and decided by
the state of California or Florida if they don't have
a prenup so all of the So what we do
(22:45):
is we say, look, if you are extremely successful, you're
going to get to a liquidity point where some lawyer
or some general counsel or Anderson Tax is going to say,
have you talked about the planning and this? And at
that point you can maybe add a couple percent of value.
But if you can find these people as they are
(23:08):
stuck in what I call the valley of death, sort
of that middle part of building a business, and you
can get an hour with them, just to say, there
are a couple things we can do from an investment perspective,
an entity perspective, and a tax perspective that if you
are as successful as you think you are, you can
protect yourself and investors and you can make your net
(23:29):
much bigger than what it would be otherwise.
Speaker 2 (23:31):
As you know, entrepreneurs are not focused on this stuff
when no, no, no, So if they haven't taken advantage of
something like the QSBS as you talked about, which I
believe allows you tax free up to ten million dollars,
I mean, it's pretty remarkable.
Speaker 5 (23:43):
It's pretty remarkable.
Speaker 10 (23:45):
There are some like there're three litmus tests that you
have to pass and if they.
Speaker 2 (23:49):
Didn't set up the business that way initially can get
can they change it to actually get that benefit?
Speaker 10 (23:54):
Yes, it becomes increasingly difficult as you take in capital,
you have more LPs, et cetera. But there are many
many ways to do it. And I think most people
know about that ten million dollar headline number.
Speaker 5 (24:07):
But when the earlier you plan and the more that.
Speaker 10 (24:11):
Can actually be protected by using different irs, discounting strategies,
et cetera. So I've seen many many times that protected.
But again, so our goal is to try to be
in front of entrepreneurs and support them not only in
funding and marketing and building their networks, but to try
(24:33):
to get them either to think about which is really challenging,
or get them to sort of open up themselves to
allowing someone to act on their behalf even when they're
not there yet.
Speaker 3 (24:46):
So we'd be remiss to not ask you about kind
of the macro environment and what that means for entrepreneurs. Now,
we've got about a minute and a half left. Who
are you know, getting ready to wrap up the trade today?
It's been a volatile one again and we're also getting
ready to wrap up the trading week. You know, how
how do you feel about the environment? What do you
tell some of your clients?
Speaker 5 (25:04):
So it's a really hard environment.
Speaker 10 (25:06):
In the following so you look at your portfolio today,
private and public, and your public portfolio just hit an
all time high. Your private portfolio, you haven't gotten as
much capital back as you wanted. You've been in longer.
It feels a little, but your values, your marks are
still they feel okay too, but you feel pretty precarious
(25:26):
about both. And so that's affecting the way everybody at
every income level is spending, investing, traveling, you name it.
So the answer is our market is price to perfection,
from a trade perspective, from a geopolitical perspective, from a
big beautiful bill, and spending and deficit perspective. The next
(25:48):
I think six months in terms of the path that
the Fed takes with interest rates, whether our president actually
does put in a shadow FED, and what effect that has,
what happens in terms of the July ninth trade date,
right we're probably at about ten percent level of tariffs
right now. That's different than the thirty eight we were on,
you know, it's thinking about on April second. It's also
(26:10):
really different about the than the two point nine we
came into this president exactly. So there are a lot
of really macro trends that are going to very much
effect the next leg from here in both public and
private markets.
Speaker 3 (26:23):
Great conversation, Elli, Thank you so much. Elli McCartney, Managing director,
Private Wealth Management over at UBS, joining us here on
Bloomberg Business Weekdaily.
Speaker 1 (26:31):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 3 (26:46):
Michael Lobe is with us. This is his home, this
is his event. He's the founder and CEO of Lobe
dot NYC, and he co founded Uncharted a few years ago.
And I got to talk to you this morning, so
I feel kind of doubly blessed to get some more
time with you.
Speaker 5 (27:02):
The event is underway. Tell us about what you're hearing
some of the things so.
Speaker 11 (27:05):
Far, well, I think that there's a great deal of buzz.
Most people are saying exactly what you are, which is
that they're doubly blessed just to be here and get
to know everybody else.
Speaker 9 (27:18):
But I mean, the.
Speaker 11 (27:21):
If you were to take a look at the background,
you would see, you know, six hundred people talking to
six hundred other people.
Speaker 9 (27:29):
It's quite the event.
Speaker 11 (27:31):
And what we really want to do is foster relationships
between investors and companies, between companies and companies, and between
you know, CEOs looking for talent and talent looking for
CEOs so I think I think a good time is
being had by all. And certainly the weather has been
(27:52):
totally cooperating. I think you had someone to do with that,
So I thank you for that.
Speaker 5 (27:56):
You're very welcome.
Speaker 9 (27:57):
Right, So, yeah, little tiny wind, if you could take
that down.
Speaker 2 (28:01):
Just or this is kind of perfect. It beats the
weather we had earlier this week. I was a little
concerned about that. You know, an event like this, You've
been doing this for a few years. It started during
the pandemic, started a lot smaller. How do you and
I heard you say earlier today and your partners say
this too, Noah, that he is running into people constantly.
You say, yeah, they raised money as a result of
being here. They found a co founder here, they found
(28:23):
employees here. How do you measure the success of an
event such as this in the days, weeks and months
following it?
Speaker 7 (28:29):
Right?
Speaker 9 (28:30):
I wish we could, because I should have a vig
on all that.
Speaker 2 (28:33):
So we were just talking to Damon John, like, you know,
shark tank kind of thing. Maybe you could kind of
get in on that.
Speaker 5 (28:38):
I don't know it for a long time.
Speaker 9 (28:41):
So you know, I got to tell you.
Speaker 11 (28:43):
We do solicit testimonials of exactly the things that you're
talking about. We have quite a few of people saying,
you know, I met my founder there about two years ago. No,
and I get an invitation and it was shrouded and missed.
And it was three women who had us go to
an event downtown.
Speaker 9 (29:05):
And they brought us up on stage.
Speaker 11 (29:08):
Everybody started a collap And what that was is these
were three women never met before. They were all, you know,
elite athletes, and they decided there should be a fund
supporting elite athletes that they had a different point of view,
a different sense of how to compete, and they all
got along very very well, and that thesis led to
(29:30):
a fifty million dollar fund. So it's that type of
thing that you know, really propels us.
Speaker 3 (29:34):
Well, talk to us about you know capital, How much
is out there for startups?
Speaker 9 (29:37):
Wow?
Speaker 11 (29:38):
You know, it's funny things go in cycles. As you know,
this is not an up cycle for capital formation. Last
numbers I looked at and they're a little bit stale,
but you know, down sixty or seventy percent.
Speaker 9 (29:53):
Certainly the secondary market.
Speaker 11 (29:55):
If that's any indication at all, does illustrate that, you know,
there's a lot lot of illiquidity looking to get liquid right,
not nearly as frothy as it used to be, was
I pos even though that's starting to unlock a little bit.
Speaker 9 (30:10):
So no, it's it is hard and the money does.
Speaker 11 (30:14):
Gravitate these days to AI, so you need, you know,
if you have so win.
Speaker 5 (30:18):
There is an idea when there is a startup, that's
where it goes.
Speaker 9 (30:21):
It goes there, right.
Speaker 11 (30:22):
And what folks don't I think, really realize or appreciate
is the forces at play in venture and venture funding,
a venture capital which is I sometimes call it a
beauty contest, and that is because there's one breakout winner
in a category and then all the LPs are asking
(30:43):
their gps you know, what is your AI strategy? And
if the answer is you know, we think it's a
little over sold. We think it's a little bit you know, frothy.
Whereas there's going to be a couple of winners and
a lot of losers, we're taking a wait and see attitude.
The answer is bye bye, I'm bringing my money to
that fund that made that investment. So a lot of
(31:05):
pressure for them to jump in. And it's in those
situations that you know, not so good deals are made.
Speaker 2 (31:12):
Right, So yeah, does it you know in terms of cycles,
does it feel like this AI cycle is different than
previous tech hype cycles? And the reason I ask and look,
nobody wants to hear or utter the phrase this time
is different. But if you look out at the private
markets right now, you've got skyhag valuations, I think many
would argue for open AI right, for anthropic, for perplexity.
(31:34):
You have meta platforms coming in and dropping billions of
dollars to buy forty nine percent of an AI company
that barely existed. You have founders being poached. We're talking
one hundred million dollar signing bonuses. Yeah, force an individual
to go to a large company.
Speaker 9 (31:50):
Right.
Speaker 11 (31:51):
So I'm I look at my mailbox every day. I'm
looking for my hundred million dollar check hasn't come in yet.
Speaker 2 (31:56):
Right, So, if you're going to range, you know, you know,
make make your way your web browser or your you know,
your website dot ai and maybe it'll happen.
Speaker 11 (32:04):
I don't know, don so to me, and there's not
quite answering your question, but I'm it's all about me.
So I'm going to answer it from my perspective, which
is that to me, it feels different. Now, what does
it feel like I've been around for long enough, so
I'm something of the elder statement here statesman here, I've
(32:25):
been around long enough that I've seen a few cycles.
Speaker 9 (32:28):
This feels like.
Speaker 11 (32:29):
The late nineties and the late nineties was the advent
of the internet, right, and it feels this profound.
Speaker 9 (32:36):
Now. You know, people can say.
Speaker 11 (32:38):
Well, you know, if we look back two or three years,
it was NFTs and that was a false positive. And
before that it was blockchain, which was sort of a
false positive. And before that it was cannabis, and before
that it was bitcoin. And but this one feels real,
and this as the possibility of disrupting entire industries. I
(33:00):
had breakfast, by the way with a friend this past week.
He has a unicorn business is worth almost two billion dollars.
He has two hundred and seventy people, and he said, Michael,
by year end, it's one hundred and twenty.
Speaker 2 (33:12):
Meaning he is going to lay people off because AI
has become celefficient, a.
Speaker 11 (33:16):
Fast growing company, super fast growing company.
Speaker 9 (33:19):
That's really scary, I know, but that's what's going on.
Speaker 2 (33:22):
And so do you think so do you think there
is something? Do you think there is something to what
Dario Amaday has said who's the founder of Anthropic. Among
the co founders of Anthropic, there are many that in
a couple of years we're going to see a serious
uptick in unemployment as a result of this tech, Like
this is something policymakers need to be freaking out about
(33:43):
right now.
Speaker 11 (33:43):
Yeah, well, look, I respectfully disagree, and all I have
to go on is history and starting in the seventeen hundreds,
right when there was that industrial revolution in England and
we burned down all the factories with a spinning wheel,
thinking everybody would be unemployed. That has not happened, but
markets employment, people have an amazing ability to retrain themselves
(34:06):
find the opportunities. In the end, I think we're going
to be okay. Is there going to be some displacement.
There's always some displacement. I hope you find out find
something that we can have less lawyers, because we'd use
less warriors. But I think at the end of the day,
you know, brilliant people are going to find find their way.
And the people you're talking about are very smart people, engineers.
(34:29):
They will find their way. We're always going to need them.
And you know, this is going to be like every
other labor saving prediction.
Speaker 9 (34:37):
This is going to be just another one.
Speaker 3 (34:38):
All right, We're gonna unfortunately have to leave it there.
But thank you for inviting us. This has been fun.
Speaker 9 (34:43):
Thank you for inviting me. Guys, I believe this is yours.
Speaker 11 (34:49):
Oh that's not what they told me. They said after today,
it's all yours. That's not right, Michael, I wouldn't be
so nice.
Speaker 10 (34:56):
Well, the key is please.
Speaker 5 (34:57):
Michael Low, founder and CEO of Low NYC.
Speaker 1 (35:02):
This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(35:23):
and always on the Bloomberg terminal
Hosts And Creators
Tim Stenovec
Carol Massar
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.