June 6, 2025 • 46 mins
This week, former Treasury Secretary Lawrence H. Summers and Hoover Institution’s Niall Ferguson debate US and China's "hostile codependence." And, as President Trump touts lower gasoline prices, some experts explain why it’s concerning. Plus, more millionaires in the UK are packing their bags for Italy, but will it be for good? Later, how will private equity change Big Law?
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:20):
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. President Trump has made it a priority
to get gas prices down below two dollars a gallon.
What are the chances he'll meet his goal and at
what cost? Plus money makes the world go round, and
particularly the money wealthy people bring to their home countries,
(00:40):
which is why the United Kingdom has to be careful
about changing incentives to move abroad. And the growing world
of alternative investments is on the brink of adding another
asset class investing in the four hundred billion dollar business
of law firms. But we start with China and the
United States and how bad things could get from two
(01:01):
different perspectives. Macroacon Instant special contributor Larry Summers of Harvard
and economic historian Neil Ferguson of the Hoover Institution. The
world's biggest economies, the United States and China, have had
a complicated economic and geopolitical relationship that relies on competition
and cooperation.
Speaker 3 (01:22):
At the same time, I'm in favor of maintaining a
working relationship with China. It is too important a country.
It had made good progress in the economic reform, and
I think we should not lightly sacrifice the relationship with
the country with the longest continuing history in Asia, with
(01:44):
the cultural influence.
Speaker 4 (01:45):
That it has.
Speaker 2 (01:47):
China joined the World Trade Organization in two thousand and one,
setting the stage for a tumultuous relationship between the United
States and China that continues today.
Speaker 5 (01:57):
We have a trillion down a trade everythy with China,
hundreds of millions of downas a year we lose with China,
and unless we solve that problem, I'm not going to
make a deal now. I would like to deal with China,
but they have to solve this surplus.
Speaker 4 (02:11):
With the tariff program, we had a plan, we have
a process, and now we have a mechanism with our
Chinese counterparts to prevent an escalation. Again. We're going to
go into a series of negotiations. They're going to be
fulsome and we have a lot to talk about. But
I think over the next ninety days we can accomplish
(02:33):
a lot.
Speaker 2 (02:34):
President Trump has continued the efforts of his first administration
to make the economic relationship between the two countries fair,
initially imposing tariffs as high as one hundred and forty
five percent before suspending them pending negotiations. Neil Ferguson has
called it a second Cold War.
Speaker 6 (02:52):
It's eighteen years since I used the term chi America
for the first time, and the argument back then was
China and the United States are in a symbiotic relationship,
but it's not symmetrical. The US does the importing, China
does the exporting, the US does the consuming, and China
does the saving. And the argument that I made back
(03:13):
in two thousand and seven was that this was not
really sustainable and that at some point Chimerica would turn
out to be a chimera. It actually took longer than
I expected to turn sour, but certainly by twenty seventeen
eighteen we had the beginnings of Cold War II, when
the rise of China finally elicited a response from the
(03:33):
United States. The interesting thing, David, is that somehow Chimerica
and Cold War two seemed capable of coexisting, because despite
a trade war and a tech war both continued by
the Biden administration and ramped up by Donald Trump in
his second term, the United States still imports an enormous
amount from China. The relationship has been extraordinarily persistent despite
(03:57):
the growing conflict and the escalation of Cold War two.
Speaker 7 (04:01):
I'd call it hostile codependence. We're codependent with them, We
depend on them, they depend on us, But our interests
in the way the world is shaped going forward are
very different. There can only be one leader in technology,
(04:22):
so there are also important zero sum competitive aspects in
the relationship, and the challenge is going to be to
manage it.
Speaker 2 (04:33):
As much as Larry Summers agrees that the US and
China need each other, he does think we may be
wrong about the extent of Chinese economic power.
Speaker 7 (04:42):
I think the big change that from my mind, people
are underestimating is that China has immense challenges ahead of it. Yes,
they have done very well in a number of key technology,
but their population is going to shrink, their debts are immense.
(05:08):
Their economic adjustment towards a more consumption oriented economy would
force the Communist Party to give up a lot of power,
which I don't think they're going to do. You know, David,
here's a rule. When the American elite tell their children
to learn a language, it's time to bet against the
(05:30):
country in question. That was right about Russia in nineteen
fifty nine. That was right about Japan in nineteen eighty nine,
and I think it's been right about China in recent years.
And so I think the key priority for the United
States is to maintain our strength, but also not to
(05:55):
put so much pressure on China that we elicit as
spasmodic response. Neil's the historian, and he's the great expert,
but many people see this through the prism of Germany
and Britain before the First World War. I think it's
also helpful to think about Japan and the United States
(06:19):
before the Second World War, where a very successful set
of American economic policies in holding back the Japanese economy
pushed the Japanese into nationalists desperation, and that was behind
(06:40):
Pearl Harbor. So I think in the United States we
need to be very careful and not see this in
terms of trying to win some great victory against China,
and not forgetting that codependence probably an inevitability.
Speaker 2 (07:02):
After growing over fourteen percent a year as recently as
twenty seventeen, China's growth has slumped to an estimated four
percent in twenty twenty five according to the IMF. But
the US may not have the economic upper hand China.
Speaker 6 (07:17):
Is a much larger economy relative to the United States
than any previous challenger. On a current dollar basis, it's
got to within around seventy percent of US GDP. More strikingly,
China's manufacturing value added is now twice that of the
United States, And if you just go back twenty years,
(07:38):
the roles were reversed. US manufacturing value added around at
the time that China joined the World Trade Organization was
roughly twice that of China's. Let's view this from China's
advantage point. How did the Chinese see the American response
to their rise. They see it as a rather brutal
trade war that began with Donald Trump's first term and
(08:02):
has escalated dramatically at the beginning of his second term.
But that escalation turned into a game of chicken. And
in that game of chicken, it was Donald Trump who swerved.
It was Trump who had to step down, who had
to pull back from the incredibly high tariffs that he
imposed in a series of steps on China after being
(08:22):
sworn in for a second term. So the Chinese look
at the United States, and I think they often say
to themselves, these guys have really passed their peak, and
they don't have a keyherence strategy to deal with us.
Speaker 7 (08:35):
I'm a bit more optimistic than Neil about the relative
strength of the two economies.
Speaker 8 (08:41):
I think a.
Speaker 7 (08:43):
Large GDP achieved simply by having a large number of
people doesn't always make you stronger. Ask yourself if Mexico
was part of the United States, we would have a
higher GDP as a country, But I think we'd actually,
in toto and aggregate, probably have a weaker economy in
(09:06):
terms of our ability to project power. So I am
a bit more optimistic about the hand the United States
has to play than Neil, but a bit more disappointed
by the skill with which we are playing it. I
(09:29):
share his concern about a potentially very dangerous situation in Taiwan,
though I would caution that probably to maintain deterrence, it's
not that we need a capacity to win. We need
(09:51):
a capacity to inflict enormous and problematic and risky damage
while maintaining credibility to deter imprudence. And I think that's
a bit more achievable than Neil suggests.
Speaker 6 (10:09):
Well, there's certainly a risk. I've argued for some time
that a Taiwan semiconductor crisis would be the equivalent of
the Cuban missile crisis in Cold War two. But let's
remember that there's something very distinctive about the US China
relationship that makes it quite different from the twentieth century
conflicts and challenges that Larry talked about. China really had
(10:30):
caught up or was very close to catching up in
key domains, including artificial intelligence and constant computing. China has
shown that technological containment of the sort that Jake Sullivan
recommended when he was National Security Advisor hasn't really worked.
Speaker 7 (10:46):
I am far more worried about dependent shawan China for
debt than I am dependent on China for rare earths
or any other specific.
Speaker 2 (10:58):
Product, whether it's competition to technology or dependence on foreign
investment in US debt. Both Larry and Neil agree that
the tax and spending bill currently working its way through
Congress will do little to improve the United States position
when it comes to China.
Speaker 7 (11:15):
It's not a big, beautiful bill. It's a prescription for
deadly dangerous. To Cline, it's ill advised, it's imprudent. It
fails to recognize at all a basic truth that the
world's greatest debtor is unlikely to stay the world's greatest power.
(11:38):
We are making a very serious mistake by continuing on
the phiscal path that we are on. And it's not
even clear that if we're given more rope, if the
debts are allowed to grow, that may just be ultimately
(11:59):
increasing hour of vulnerability. Neil and I are in complete
agreement on that.
Speaker 6 (12:07):
Well, these relationships are complex, but you could simplify the
story a bit by just saying, as long as the
United States consistently runs a large budget deficit, it's probably
going to run a rather large current account deficit, and
attacking bilateral trade imbalances is unlikely to overcome that fundamental problem.
(12:28):
There's nothing in President Trump's big beautiful bill that's currently
going through Congress that seems likely to reduce the US
federal deficit from around six or thereabouts percent of GDP up.
Speaker 2 (12:40):
Next is Milan starting to look a bit more British
a story of how the wealthy are responding to changes
in British tax law. This is a story about setting goals,
(13:03):
goals that are realistic, but also that are the right ones.
Our colleagues Alex Steele and Michael McKee take a look
at the President's goal of getting gasoline below two bucks
a gallon.
Speaker 9 (13:15):
A cornerstone of President Trump's economic agenda is lower gasoline prices.
Speaker 10 (13:21):
Energy is going down.
Speaker 5 (13:22):
I see that we had a couple of states where
gasolene was it a dollar and ninety eight cents a gallon.
Speaker 9 (13:28):
A dollar ninety nine might be a stretch. Now, if
President Trump gets his wish of forty dollars oil, it
could be a reality.
Speaker 11 (13:34):
The number one thing that sets the price of gasoline
is the price of crude oil. And as we've seen
gasoline prices drop over the past year or so, the
thing that's driven above all is a price of crude
oil coming down. So simple as that really.
Speaker 9 (13:49):
Ed Crooks is vice chair of the America's at Wood Mackenzie,
a leading data and analytics firm. Crooks says, it's possible
we get another oil price crash like the one we
had in twenty sixteen, which dragged oil down to twenty
six dollars a barrel and pump prices to a dollar seventy.
Speaker 11 (14:02):
It's certainly possible that we can get back to a
point like the situation we were in twenty fifteen twenty sixteen,
where we had very low oil prices down below forty
dollars a barrel, and that led to very cheap gasoline.
So we might have a period maybe a year or
two with very low oil prices, very low gasoline prices.
Speaker 9 (14:21):
Why is it always feel like prices that the pump
go up faster than they go down.
Speaker 11 (14:25):
There is some evidence on that. If you think about it, though,
take a step back, you think about the big picture.
Then people will say, well, because of these movements, because
gasoline prices going up fast than they come down, therefore,
refiners must be making fantastic profits.
Speaker 9 (14:41):
The reality is the price of oil only accounts for
half of the price of a gallon of gasoline. About
thirty percent is an equally split between federal and state
taxes and distribution and marketing moving the gasoline around the
country and selling it at the gas station. The rest
are those refining costs and profits.
Speaker 11 (14:58):
Refining is not a hugely lucrative business. In fact, particularly
right now, profit margins and refining have been squeezed right down.
It's really hard to make a good return in the
refining business.
Speaker 9 (15:13):
No one knows that better than Andy Walls, president of Downstream,
Midstream and Chemicals at Chevron.
Speaker 8 (15:19):
We're trying to buy low and sell high. Is It's
just like if you were to run a restaurant. The
raw maateurs you buy and the meals you sell to people,
that's there the restaurant's crackspread. Same exact concept in refining.
Speaker 9 (15:31):
It's Andy's job to make sure the one point eight
million barrels of oil products a day that Chevron produces
flows safely, efficiently, and profitably. More than half of that
comes from the US. I mean, this is huge. Give
me some perspective on how bingosal is.
Speaker 8 (15:45):
Yeah, So the whole property is about three thousand acres.
Most of the processing stuff is on about one thousand acres.
So it's a really big facility and a lot of
complex things going on here.
Speaker 9 (15:56):
Chevron's refinery in Pasca Goula, Mississippi, runs twenty four to seven,
takes thirty five different types of crude and turns it
mostly into gasoline, diesel fuel for jets, ships, railroads and
farm equipment, and even propane what you may use for
your barbecue.
Speaker 8 (16:10):
We're either breaking down molecules, putting molecules back together. We're
taking some product out of it. Maybe it's sulfur, maybe
it's a metal. We're squeezing it, we're making it very hot.
But we're doing a lot of chemical things to take
a raw material and turn it into a thing like gasoline.
Speaker 9 (16:25):
The oil is separated, pressurized, and heated more than a
dozen times to keep changing the molecules. It's complicated work
with razor thin margins.
Speaker 8 (16:34):
And I wish I had more control over margins. I
really don't. It's based on supply and demand, and if
margins are good, we really want to run. If margins
are bad, we still need to run.
Speaker 11 (16:43):
And so I think when people kind of take that
jump to say this is outrageous the oil companies ripping
us off and they're making so much money out of refining,
that's not really accurate at all.
Speaker 9 (16:55):
If refiner greed isn't a hurdle to sub two dollars
gasoline supply, it might be. Over the past decade, ten
refiners have closed, either because of damage or because they
transitioned to process renewable fuels.
Speaker 12 (17:07):
Refineris have been closing down, as you know in the
US Alon line. Dell shut down earlier this year. So
this is another problem that, yes, while crude oil prices
are going to be low. It's not necessarily the same
case for what we you and I consume, which is
gasoline and diesel.
Speaker 9 (17:22):
Emory to Sen is the founder and director of Market
Intelligence and Energy Aspects, a global data and intelligence firm.
Sen is one of the most prolific voices in the industry.
Speaker 12 (17:31):
The one thing I'm very very confident about is on
that refined products markets because the volume of refineries we
are continuing to shut down and just modest demand growth
for gasoline, diesel and jet will lead us to some
significantly higher pump prices.
Speaker 9 (17:46):
COVID also did permanent damage to the industry.
Speaker 8 (17:49):
Yeah, COVID was a challenging time for our industry.
Speaker 13 (17:51):
That was hard.
Speaker 8 (17:52):
Running the plant at minimum was hard. In fact, it
ended up making several refineries in the United States close.
It was either impossible, uneconomic or super difficult, and we
lost a lot of refiners in the US and they're
probably never going to come back. Once you close a refiner,
I think it's kind of it's kind of the end
of the line, and it's sad, but that's what happens.
Speaker 9 (18:11):
So what does that do for a supply demand dynamic
When it comes to say gasoline.
Speaker 8 (18:15):
It makes it tighter. Yeah, if somebody that used to
make gasoline is no longer making it, others have to
pick up the slack and have.
Speaker 14 (18:21):
To do it.
Speaker 9 (18:22):
The US hasn't seen a new large refiner since nineteen
seventy seven. Smaller ones have been built and existing plans
have expanded. US capacity is now at eighteen point four
million barrels a day. The real problem is coming. California
will see almost one fifth of its crude processing capacity
vanish in the next twelve months after Valero and Phillip
sixty six IDL combined two hundred and eighty four thousand
(18:45):
barrels of daily refining capacity.
Speaker 12 (18:47):
The problem is from twenty twenty seven on was if
you look at our refining kind of global landscape, it
only gets worse. We've got more closures coming because refining
is such a slow moving industry right seven years it
kind of takes to build, and there are no new
bills in the West anyways. So I think we are
in for a period of very high refined products prices,
(19:08):
even if crude doesn't go out, by the way, regardless
of what you think crude's going to do, And you
could disagree with me and say, oh no, demand's not
going to be great, and you know, shale will bounce
back whatever. We can disagree on that.
Speaker 9 (19:19):
Two dollars gasoline is definitely not a good sign for
the oil industry. The US is now the largest producer
in the world, a different dynamic than previous oil sell offs.
Speaker 11 (19:29):
The crude price that you'd need to get gasoline down
to dollar ninety nine is one that would be absolutely
miserable for people in the US oil industry. For oil producers,
it's certainly a level that would lead to job cutsits
level that would lead to rigs being laid down, people
drilling less, and so on.
Speaker 13 (19:50):
Most Americans agree they would like lower gasoline prices, but
that might not actually be good for the country.
Speaker 11 (19:57):
I think, though, you've got to think about gasoline as
being a bit like a health check brometer, temperature check.
If you do see gasoline prices really kind of starting
to plumb the depths and go significantly below where they
are today, that's probably a sign that oil is not
well in the world economy.
Speaker 15 (20:18):
We need to think about what's this cycle going to
look like. Because again, it was not some fundamental shift
in the market for oil that caused this particular cycle
to be intensified. It was some tariff policies that may
or may not be permanent. We don't know how that's
all going to shake out. The most typical economic reaction
to uncertainty is to do nothing. You don't buy that car,
(20:40):
don't buy that house, don't bring out that new product,
don't make that investment, all of those things. We tend
to just lay back and do nothing. If the uncertainty
as to some extent, I think it was a global
demand coming back pretty quickly. This may be a fairly
short cycle if that happens.
Speaker 13 (20:53):
Ray Perryman is an economist who's been studying the economic
effects of oil prices for forty years.
Speaker 15 (21:00):
Most recent study indicated that today if you take the
oil that's produced in the Permian and then you look
at the downstream, the upstream, and everything else that happens
with the oil produced in this region, if responsible for
about a million jobs to the United States.
Speaker 13 (21:15):
Texas is an intersection of the economic fallout from low
oil prices and producers taking their foot off the gas.
Kirk Edwards is an oil and gas producer who is
seeing the ripple effects in the Permian basin firsthand.
Speaker 16 (21:27):
It's the rest of the country that benefits from the
gasoline price. Again, people in the middle of Odessa. We
would rather see higher gasoling process because it means the
oil process is good and the economy is going to
be good. But it is a side effect for everybody,
because everybody has to use gasoline in their cars right
now to go to work and fly and do things
like that.
Speaker 13 (21:48):
And that's where we turn next week on Wall Street
Week when we go to Midland Odessa, the heart of
the Permian Basin.
Speaker 2 (21:56):
Up next is Milan starting to look a bit more British,
a story of how the wealthy are responding to changes
in British tax law. This is a story about the
(22:19):
rich and famous, or at least about the rich and
their migratory habits. Global elites are constantly on the move,
but where they choose to call home or dessert is
often dictated less by lifestyle than by what they pay
in taxes. As our London colleague Lizzie Burden reports in
this global Shuffle of Fortune's, one Italian city is coming
(22:41):
out on top.
Speaker 1 (22:43):
Nestled away on a leafy street in one of Milan's
most stylish neighborhoods, lies the former home of famed fashion
executive Santo Versace. Take a step inside and you'll enter
The Wild, the private club catering to Milan's rapidly growing
wealthy class.
Speaker 17 (23:00):
About Milan, it's an hour and a half by plane
from London. You can drive to the south of France
in two and a half hours. You can drive to
the beach in a couple of hours. You can be
in sam Ritz in an hour.
Speaker 11 (23:09):
And a half.
Speaker 1 (23:10):
Gary Landsberg's been heavily involved in private clubs in London.
Speaker 17 (23:14):
So my first foray into private clubs was with a
great club, the Arts Club, which was founded in eighteen
sixty three by Charles Dickens, and I was fortunate enough
to be able to with my partners acquire the business.
It's got an amazing history and clubs go back to
the late eighteen hundreds in London. You have Brooks, Whites,
(23:38):
all these amazing clubs, Boodles.
Speaker 1 (23:41):
But Gary opened The Wild last year, a club emblematic
of a global wealth movement into places like Milan, Monaco
and the Middle East away from London private clubs.
Speaker 17 (23:52):
If you go back to the eighteen hundreds, I think
there were like three hundred clubs at the time, there
was a lot and you know over the years Aviv
in twenty twenty five. In London people still like going
to private clubs, but unfortunately a lot of the clear
untail have actually left.
Speaker 1 (24:09):
And that's due in part to the UK government abolishing
the so called non dom regime.
Speaker 11 (24:14):
We will raise specific taxes.
Speaker 8 (24:17):
We want to win the non dom status completely.
Speaker 2 (24:20):
I think that the super rich trips paid their tax.
Speaker 18 (24:25):
It is a term relatively unique to the UK and
it's short for non domiciled, so it refers to people
who have or until very recently have had special tax
treatment because they were considered non domiciled in the UK,
meaning that their permanent home is in a different country.
Speaker 1 (24:44):
Nina Scerrow is the CEO at the Center for Economics
and Business Research in London. Previously a non dom would
avoid UK tax on foreign income and pay a small
fee after a few years. Now they won't pay tax
for the first four years, but then there'll be tax
like everybody else on their worldwide income.
Speaker 18 (25:02):
In short, it's the beginning of the end of the
non arm regime. So it is a big tightening of
the of the rules. The previous big change was in
twenty seventeen under the Conservative government, where they essentially capped
the period of fifteen years. They said, if you've been
here for fifteen of the past twenty years, you can't
really genuinely say that you're not a non arm But
(25:25):
this is now making the rules all the title.
Speaker 1 (25:29):
Manchester United owner Jim Ratcliffe famously relocated from Britain to
Monaco in twenty twenty, in a move that was expected
to save him four billion pounds in tax payments.
Speaker 10 (25:40):
I wasn't a fan of the non dome change. I
thought that was very foolish. I mean, you've got sixty
zersand very wealthy people in London. I do want to
encourage them to leave and make any sense to me
because they all bring, you know, enormous value to that economy.
Speaker 1 (25:55):
And now he's being joined by fellow football club owners,
banking executives and real estate in departing Britain. Last year,
the UK had a net loss of almost eleven thousand millionaires,
a one hundred and fifty seven percent jump from a
year before, which was already the highest number in a decade.
Speaker 17 (26:11):
I think the numbers that will come out in twenty
twenty five will be shocking, really I think will be shocking.
The trickle down effect on the economy is huge. Everyone
who leaves will have people that work from whether it's
in their business, in their office, in their home.
Speaker 19 (26:29):
And how is it directly impacting your business your investment strategy.
Speaker 17 (26:33):
Well, I think you know, for someone that was pretty
much heavily invested in London, I'm completely divested from London.
I have nothing here. I have a few real estate investments,
but I'm certainly not looking at this stage to invest
back in to London in the short term.
Speaker 1 (26:50):
But the government is confident it's made the right decision.
Speaker 19 (26:54):
Are you concerned that your non dom tax changes will
cost more than they raise?
Speaker 20 (26:58):
No, I'm not concerned. We made a Manifesto commitment to
ensure that non doms do pay their fair share of
tax in the UK, but combined with a temporary repatriation
facility which makes it easier for people to bring money
into the UK without facing punative tax. This is a
highly mobile group of people. But as well as people
leaving the UK for a whole variety of reasons, we
(27:20):
have every year thousands of people, including some of the
wealthiest people, come to the UK because they can see
that this is a great place to do business, a
great place to grow a business.
Speaker 1 (27:30):
The government's Independent Office for Budget Responsibility estimates that twelve
percent of non doms will leave the UK, but that
the new regime will offset that by raising almost thirty
four billion pounds over the next five years. Nina Scerrow
isn't so sure.
Speaker 18 (27:47):
I think there is a very very good reason to
think that the government departments are underestimating the extent to
which people are going to either leave the UK or
people that would have come to the UK otherwise aren't
going to common What we have found is that tipping
point where is the government making money is the government
losing money? Net is around one in four. So if
(28:11):
more than a quarter of non doms people currently claiming
the status are no longer in the UK, that is
the point at which the government actually starts losing money.
And looking at the obr's own estimates and some other
external estimates for how many people might consider leaving the
UK as a result, twenty five percent is very very
much within the realm of possibilities. So if you're asking yourself,
(28:34):
do I want to go to the UK? Do I
want to stay in the UK? Is this a good
place to start a business, to grow a business. There
is more and more ticks in the no column.
Speaker 19 (28:43):
Are you saying that it could affect London status as
a global financial hoob?
Speaker 11 (28:47):
Yeah?
Speaker 18 (28:47):
And I think absolutely changes to non doms is putting
a bit of a damper on the status of London globally.
And that's kind of a continuation, a little bit of
a trend.
Speaker 1 (28:57):
So if not London, why That's where Marco Characto comes in.
Speaker 21 (29:03):
I'm an Italian tax lawyer, so specialized on tax and
in that field that it means ever, taxation of corporation,
taxation of individuals. I would say that my personal practice
increased towards taxation of individuals in the past years because
of the new rules.
Speaker 1 (29:25):
The new rules to which he refers are Italy's flat
tax regime. Individuals pay a flat two hundred thousand euros
a year on foreign income for up to fifteen years,
a figure that was doubled last year. We've got all
of the fiscal pressures, not just in Italy but across.
Speaker 19 (29:40):
Europe and around the world. How likely is it that
this flat tax can endure? Because of course it's already
gone u from one hundred thousand to two hundred thousand
can it last?
Speaker 21 (29:49):
The decision of the government back in August twenty twenty
four to double the tax from one hundred thousand to
two hundred thousand has been indeed considered by foreign observers
from my field as a confirmation of the willingness of
the government to keep the regime, rather than an indicator
(30:09):
that the gin might be unstable. Consider that this regime
is there since twenty seventeen, has never been changed apart
from this increase, which as an inflation component, because don't
forget it was introduced eighty years ago, so there was
an inflationary period. And also there was the willingness of
the government to contain discussions or debates about the fairness
(30:33):
of this regime because by increasing and doubling the tax,
they have willingly restricted the amount of a network individual's
moving to Milan, thereby reducing the discussion about the furnace.
Speaker 1 (30:49):
Cerato spent most of his life in Milan and has
watched the city evolved well.
Speaker 21 (30:54):
Milana changed a lot in the last fifty years. At
the beginning it was an industrial seat. During their years,
it became a service city. It attracted a lot of people,
so fifty years ago, most of the people, at least
the people were wealthy, were MILLENISA. Now it's very difficult
to find somebody who is purely Milanisa.
Speaker 1 (31:17):
Yet an influx poses its own problems. Real estate in
Milan has comfortably outpaced wage growth over the past decade,
with prices rising forty nine percent, while other major Italian
cities have stayed largely flat or even decreased.
Speaker 17 (31:31):
It's quite small city, it's quite condensed, so they don't
have a lot of huge developments going on. There's been
a big influx of expats. They all pretty much want
to live in the same area, which makes it quite
difficult first for them to find actually spaces, and second
of all, because there's not a lot of supply and
(31:54):
there's a huge amount of demand. What's happening in the
local community actually is getting out priced because they haven't
seen She's like this before. The good quality mel real
estate is certainly seeing a huge increase in values.
Speaker 19 (32:08):
Would you say that Italy is more aware that it's
in a global competition to attract high network individuals than,
for example, the UK government.
Speaker 21 (32:16):
I'm not so sure the government is so keen in
entering into a global competition protect these people. They just
realized that it's good to have people from abroad with
high pending capacity making investment. This regime was introduced by
(32:36):
a left wing government. This counter government is a right
wing Meanwhile, there weare I think seven governments of different colors.
All the different parties looked at this regime and decided
to keep it. So paradoxically, the political instability of Italy
has been the best test to consider this as a
(32:58):
stable tax regen.
Speaker 1 (33:00):
Italy's government might not consider itself in a competition to
attract the wealthy, but it is doing just that, and
Lansburg says the UK faces an uphill battle to load
them back.
Speaker 17 (33:10):
You'll get the results of twenty five in twenty six.
They'll start talking about it. They'll start probably tweaking with
it by twenty seven, and then everyone will be worried
about an election in I think twenty nine. And if
you've kind of been around long enough, you kind of
see the patterns, and you know, I think you know
they're they're not going to turn the ship round today, and.
Speaker 1 (33:32):
In the meantime they can always look east to Italy.
Speaker 21 (33:36):
I keep repeating my clients that Italy is a very
bed place to work if you're in Italian professional or employee,
because you pay a lot of taxes on your income.
But it's a very nice place to die because there
is a net of the flat tax regime. There is
a very favorable regime on inhericans and gifts.
Speaker 2 (33:58):
Coming next, and you thought lawyers were only a drag
on the bottom line, Now they may be the next
big alternative for your investments. Next on Wall Street Week,
(34:19):
this is a story about turning a cost center into
an investment opportunity. For generations, lawyers have been a necessary
cost to be managed and minimized, but now that may
be changing.
Speaker 22 (34:35):
The legal industry as a whole has become a big business,
and we've got firms. I think there are fifty eight
firms that have more than a billion dollars in revenue.
Speaker 2 (34:48):
Lisa Smith is head of the Washington, d c. Office
of Fairfax Associates, which advises law firms on business strategy.
Speaker 22 (34:55):
The investment opportunity is high. I think the question is
is how to how to add value, How outside investors
could add value.
Speaker 2 (35:05):
In the past, when you were looking for exciting new
investment opportunities, American law firms weren't on the top of
the list. There's no question that the overall market is big,
with revenues estimated to total just over three hundred and
forty three billion dollars in twenty twenty two, up almost
one hundred billion dollars from ten years before, according to
the Saint Louis fed But until recently, all that money
(35:27):
was more or less kept within the protected guild of
those who'd gone to law school and been called to
the bar. We lawyers worked for Wall Street, but we
were something separate and distinct from Wall Street. Just ask
Professor David Wilkins of Harvard Law School.
Speaker 23 (35:42):
So you and I went to law school because we
didn't want to do business. It's not just that we
were not going to business school. It was a sort
of an oppositional idea, as I think your Justice pile
one said, but at least distant from business.
Speaker 2 (35:57):
As much as we tend to think of the legal
profession as tied to traditions going back hundreds of years
in Anglo Saxon jurisprudence, it has made some fundamental changes
through the years, starting with who was let into the tribe.
So we're in this wonderful Casperson Room, which is filled
largely with the portraits of old white men. But this
is a big exception.
Speaker 16 (36:17):
Tell us about this.
Speaker 23 (36:18):
It is this is the first class of women who
came to Harvard Law School, which is both a thing
to celebrate and also a little to be embarrassed about,
because these women did not come until nineteen fifty. In
other words, Harvard Law School had no women prior to
nineteen fifty, and this is a portrait of that remarkable
(36:40):
group of women, many of whom went on to do
quite remarkable things. It's important for us to remember, in
other words, that it wasn't so long ago that the
definition of merit did not include fifty percent of the population.
Speaker 2 (36:58):
Social pressures led to changes in the setae sixties and seventies,
but now it's a new kind of pressure, the financial kind,
that is pointing to fundamental changes in the way lawyers
do their work, brought on by an enormous growth in
the size and complexity of the matters lawyers are taking.
Speaker 14 (37:13):
On the cost of litigation, the time litigation takes, the
amount of investment a either a law firm.
Speaker 24 (37:25):
Or the plaintive has to make to even be able
to figure out is that a good enough case?
Speaker 14 (37:31):
How can I win this case?
Speaker 7 (37:32):
It just is.
Speaker 24 (37:34):
Cost prohibitive for the average person and frankly for the
average firm, because a law firm that takes a contingency case,
that's not their only contingency case.
Speaker 2 (37:45):
Boris Zeisser is a partner at shirlti Roth, where he
is cohed of its finance and derivatives practice.
Speaker 24 (37:52):
I think it's the need for the capital, given how
expensive it is to litigate, that has created this, this
need for this, for this outside investment.
Speaker 2 (38:05):
As the cases have gotten bigger and more expensive, so
have the law firms that handle them.
Speaker 23 (38:11):
Top law firm partners are being recruited from one law
firm to another, and they're being paid something like twenty
million dollars a year, guaranteed for five years. I used
to joke that law firm partners are paid like middle relievers.
They're now being paid like starting pitchers. You start to
(38:32):
have that in global enterprises, in dozens of locations with
tens of thousands of people. If you count all the
you know, the people who are not lawyers who work
in these organizations, and pretty soon you realize that if
you're running one of these things, you need not only
the skills of an excellent lawyer, you need to also
(38:55):
understand how to manage a complex business.
Speaker 2 (38:59):
The information in the practice of law has already brought
with it outside investment, largely in the form of litigation finance,
where investors take an interest in individual cases or groups
of cases.
Speaker 23 (39:11):
Litigation funding is just the securitization of litigation assets, and
again it started out as a kind of cottage industry,
mostly focused frankly on plaintiffs firms who are looking for
ways to defray the big investment. Increasingly, what we're going
(39:32):
to see is by the way companies bringing them in
to bundle cases together. So just like subprime mortgages, for
better and for worse, we are now seeing litigation as
an aggregate asset in which people are bundling cases together
because from the company's point of view, it's an aggregate risk.
Speaker 2 (39:58):
But now there's the possibility of pri financing, not just
for individual cases or groups of cases, but for the
law firms themselves.
Speaker 24 (40:06):
Law firms borrow money all the time, and there are
restrictions in every state on how a law firm can
take on capital, if you want to call it generically.
The more recent development was that a few years ago.
Arizona and Utah as well have created a new structure,
(40:27):
alternative business structure ABS. It's actually not new. It's new
in the United States. It has actually existed in the
UK for over a decade, but it's new here. And
what that allows a law.
Speaker 14 (40:39):
Firm to do.
Speaker 24 (40:40):
It's still a law firm. It's important to understand an
ABS is still a law firm, but it's a law
firm that has obtained a license, has gone through a
rigorous licensing process with a committee that operates under the
auspices of the Supreme Court of that state.
Speaker 23 (40:56):
The best example of this is in the UK, which
shortly after the global financial crisis, began to deregulate what
its legal structures and markets could look like. One of
the things that they did was take off the restriction
(41:16):
that the only capital that could be an a llegal
organization had to come from lawyers. In other words, you
couldn't have external capital. They also took off the restriction
that only lawyers could be partners in legal organizations. Now
you can have multidisciplinary partnerships. That's meant, for example, the
(41:36):
Big four accountancy firms are now licensed to practice law
in the UK.
Speaker 2 (41:44):
The prospect of attracting outside investmental law firms may be
attractive for the partners and the firms, but it's not
without its complications. Nearly all states in the US forbid
lawyers from sharing ownership with non lawyers or even sharing fees,
except under certain limited circumstances.
Speaker 23 (42:01):
It's not just any business. In other words, it's not
the same as running a manufacturing company or even running
an investment bank or edgement, because the people who are
at the core of this business, who are lawyers, also
have a set of professional obligations that are not just
(42:22):
maximizing shareholder profit or short term return. They have larger
duties and responsibilities to protect and preserve the rule of law,
which is core to American business, to American society, to
our freedoms as a nation, to democracy.
Speaker 2 (42:44):
For the profession, the question comes down to whether it
can pursue both the raising of outside capital and adhere
to the professional obligations each lawyer pledges to uphold when
we are sworn into the bar, or as Seisser thinks
that it can.
Speaker 24 (42:58):
There is a real difference between in the practice of law,
I think in the business of law and quite frankly,
having somebody who's not a lawyer, who has the financial
acumen to help a law firm be more efficient, more profitable,
function more smoothly, take advantage of the technological whether it's
AI or any other technological advancement. I think only in
(43:23):
yours to the benefit of the clients, and the lawyers
are still subject to the same disciplinary rules, ethics rules.
Nothing changes based on.
Speaker 2 (43:33):
That, despite some concerns about what it could do to
the profession. It looks like private investment of various forms
is coming to law. But is it a good investment?
As with most investments, the answer is a resounding maybe.
Speaker 24 (43:47):
I would say, could Could it be a good investment? Well,
it could be. You know, not every investment is ends
up being a good investment, but that's also in some
ways similar to investing in any other service business.
Speaker 2 (43:59):
Professor Wilkins recently put the question whether law firms could
be good investments to some lawyers who also are venture capitalists.
Speaker 23 (44:06):
We did a wonderful two hours on exactly this, in
which both of the venture capitalists said, I'd be very
hesitant to invest in a law firm for exactly the
reasons that you sit.
Speaker 2 (44:21):
And those reasons that make investing in law tricky include
the fact that the major drivers of revenue, partners and
their clients can simply walk out the door.
Speaker 24 (44:31):
Lawyers are free to leave. But can it be efficient
enough and profitable enough to retain the talent that it
needs in order to thrive and will the investment actually
help it do those things?
Speaker 22 (44:48):
I think that's the biggest risk factor, and there's I
think that and that raises the question of what value
outside of the people side could an investor bring. Is
it technology know how? Is it building a brand where
the brand is bigger than the individual partners? And so
(45:10):
I think there's the question that private equity in particular
needs to be able to answer, which is what's the
know how that they're bringing that firms can't do themselves.
Speaker 2 (45:20):
Whatever the risks are hurdles, it looks like private investments
in the business of law are inevitable. It may not
be in the room yet, but it's certainly knocking on
the door of the legal establishment.
Speaker 22 (45:32):
I mean I get calls probably once a month from
a private equity firm looking to understand the legal industry.
So there's no question that they are interested in this,
and they're trying to figure out how to make it work.
I think unless it can be two plus two equals five,
there's really no reason to do it. And I think
that's where you also see the rub.
Speaker 2 (45:54):
That does it for us. Here at Wall Street Week,
I'm David Weston. See you next week for more stories
of adolism.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:20):
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. President Trump has made it a priority
to get gas prices down below two dollars a gallon.
What are the chances he'll meet his goal and at
what cost? Plus money makes the world go round, and
particularly the money wealthy people bring to their home countries,
(00:40):
which is why the United Kingdom has to be careful
about changing incentives to move abroad. And the growing world
of alternative investments is on the brink of adding another
asset class investing in the four hundred billion dollar business
of law firms. But we start with China and the
United States and how bad things could get from two
(01:01):
different perspectives. Macroacon Instant special contributor Larry Summers of Harvard
and economic historian Neil Ferguson of the Hoover Institution. The
world's biggest economies, the United States and China, have had
a complicated economic and geopolitical relationship that relies on competition
and cooperation.
Speaker 3 (01:22):
At the same time, I'm in favor of maintaining a
working relationship with China. It is too important a country.
It had made good progress in the economic reform, and
I think we should not lightly sacrifice the relationship with
the country with the longest continuing history in Asia, with
(01:44):
the cultural influence.
Speaker 4 (01:45):
That it has.
Speaker 2 (01:47):
China joined the World Trade Organization in two thousand and one,
setting the stage for a tumultuous relationship between the United
States and China that continues today.
Speaker 5 (01:57):
We have a trillion down a trade everythy with China,
hundreds of millions of downas a year we lose with China,
and unless we solve that problem, I'm not going to
make a deal now. I would like to deal with China,
but they have to solve this surplus.
Speaker 4 (02:11):
With the tariff program, we had a plan, we have
a process, and now we have a mechanism with our
Chinese counterparts to prevent an escalation. Again. We're going to
go into a series of negotiations. They're going to be
fulsome and we have a lot to talk about. But
I think over the next ninety days we can accomplish
(02:33):
a lot.
Speaker 2 (02:34):
President Trump has continued the efforts of his first administration
to make the economic relationship between the two countries fair,
initially imposing tariffs as high as one hundred and forty
five percent before suspending them pending negotiations. Neil Ferguson has
called it a second Cold War.
Speaker 6 (02:52):
It's eighteen years since I used the term chi America
for the first time, and the argument back then was
China and the United States are in a symbiotic relationship,
but it's not symmetrical. The US does the importing, China
does the exporting, the US does the consuming, and China
does the saving. And the argument that I made back
(03:13):
in two thousand and seven was that this was not
really sustainable and that at some point Chimerica would turn
out to be a chimera. It actually took longer than
I expected to turn sour, but certainly by twenty seventeen
eighteen we had the beginnings of Cold War II, when
the rise of China finally elicited a response from the
(03:33):
United States. The interesting thing, David, is that somehow Chimerica
and Cold War two seemed capable of coexisting, because despite
a trade war and a tech war both continued by
the Biden administration and ramped up by Donald Trump in
his second term, the United States still imports an enormous
amount from China. The relationship has been extraordinarily persistent despite
(03:57):
the growing conflict and the escalation of Cold War two.
Speaker 7 (04:01):
I'd call it hostile codependence. We're codependent with them, We
depend on them, they depend on us, But our interests
in the way the world is shaped going forward are
very different. There can only be one leader in technology,
(04:22):
so there are also important zero sum competitive aspects in
the relationship, and the challenge is going to be to
manage it.
Speaker 2 (04:33):
As much as Larry Summers agrees that the US and
China need each other, he does think we may be
wrong about the extent of Chinese economic power.
Speaker 7 (04:42):
I think the big change that from my mind, people
are underestimating is that China has immense challenges ahead of it. Yes,
they have done very well in a number of key technology,
but their population is going to shrink, their debts are immense.
(05:08):
Their economic adjustment towards a more consumption oriented economy would
force the Communist Party to give up a lot of power,
which I don't think they're going to do. You know, David,
here's a rule. When the American elite tell their children
to learn a language, it's time to bet against the
(05:30):
country in question. That was right about Russia in nineteen
fifty nine. That was right about Japan in nineteen eighty nine,
and I think it's been right about China in recent years.
And so I think the key priority for the United
States is to maintain our strength, but also not to
(05:55):
put so much pressure on China that we elicit as
spasmodic response. Neil's the historian, and he's the great expert,
but many people see this through the prism of Germany
and Britain before the First World War. I think it's
also helpful to think about Japan and the United States
(06:19):
before the Second World War, where a very successful set
of American economic policies in holding back the Japanese economy
pushed the Japanese into nationalists desperation, and that was behind
(06:40):
Pearl Harbor. So I think in the United States we
need to be very careful and not see this in
terms of trying to win some great victory against China,
and not forgetting that codependence probably an inevitability.
Speaker 2 (07:02):
After growing over fourteen percent a year as recently as
twenty seventeen, China's growth has slumped to an estimated four
percent in twenty twenty five according to the IMF. But
the US may not have the economic upper hand China.
Speaker 6 (07:17):
Is a much larger economy relative to the United States
than any previous challenger. On a current dollar basis, it's
got to within around seventy percent of US GDP. More strikingly,
China's manufacturing value added is now twice that of the
United States, And if you just go back twenty years,
(07:38):
the roles were reversed. US manufacturing value added around at
the time that China joined the World Trade Organization was
roughly twice that of China's. Let's view this from China's
advantage point. How did the Chinese see the American response
to their rise. They see it as a rather brutal
trade war that began with Donald Trump's first term and
(08:02):
has escalated dramatically at the beginning of his second term.
But that escalation turned into a game of chicken. And
in that game of chicken, it was Donald Trump who swerved.
It was Trump who had to step down, who had
to pull back from the incredibly high tariffs that he
imposed in a series of steps on China after being
(08:22):
sworn in for a second term. So the Chinese look
at the United States, and I think they often say
to themselves, these guys have really passed their peak, and
they don't have a keyherence strategy to deal with us.
Speaker 7 (08:35):
I'm a bit more optimistic than Neil about the relative
strength of the two economies.
Speaker 8 (08:41):
I think a.
Speaker 7 (08:43):
Large GDP achieved simply by having a large number of
people doesn't always make you stronger. Ask yourself if Mexico
was part of the United States, we would have a
higher GDP as a country, But I think we'd actually,
in toto and aggregate, probably have a weaker economy in
(09:06):
terms of our ability to project power. So I am
a bit more optimistic about the hand the United States
has to play than Neil, but a bit more disappointed
by the skill with which we are playing it. I
(09:29):
share his concern about a potentially very dangerous situation in Taiwan,
though I would caution that probably to maintain deterrence, it's
not that we need a capacity to win. We need
(09:51):
a capacity to inflict enormous and problematic and risky damage
while maintaining credibility to deter imprudence. And I think that's
a bit more achievable than Neil suggests.
Speaker 6 (10:09):
Well, there's certainly a risk. I've argued for some time
that a Taiwan semiconductor crisis would be the equivalent of
the Cuban missile crisis in Cold War two. But let's
remember that there's something very distinctive about the US China
relationship that makes it quite different from the twentieth century
conflicts and challenges that Larry talked about. China really had
(10:30):
caught up or was very close to catching up in
key domains, including artificial intelligence and constant computing. China has
shown that technological containment of the sort that Jake Sullivan
recommended when he was National Security Advisor hasn't really worked.
Speaker 7 (10:46):
I am far more worried about dependent shawan China for
debt than I am dependent on China for rare earths
or any other specific.
Speaker 2 (10:58):
Product, whether it's competition to technology or dependence on foreign
investment in US debt. Both Larry and Neil agree that
the tax and spending bill currently working its way through
Congress will do little to improve the United States position
when it comes to China.
Speaker 7 (11:15):
It's not a big, beautiful bill. It's a prescription for
deadly dangerous. To Cline, it's ill advised, it's imprudent. It
fails to recognize at all a basic truth that the
world's greatest debtor is unlikely to stay the world's greatest power.
(11:38):
We are making a very serious mistake by continuing on
the phiscal path that we are on. And it's not
even clear that if we're given more rope, if the
debts are allowed to grow, that may just be ultimately
(11:59):
increasing hour of vulnerability. Neil and I are in complete
agreement on that.
Speaker 6 (12:07):
Well, these relationships are complex, but you could simplify the
story a bit by just saying, as long as the
United States consistently runs a large budget deficit, it's probably
going to run a rather large current account deficit, and
attacking bilateral trade imbalances is unlikely to overcome that fundamental problem.
(12:28):
There's nothing in President Trump's big beautiful bill that's currently
going through Congress that seems likely to reduce the US
federal deficit from around six or thereabouts percent of GDP up.
Speaker 2 (12:40):
Next is Milan starting to look a bit more British
a story of how the wealthy are responding to changes
in British tax law. This is a story about setting goals,
(13:03):
goals that are realistic, but also that are the right ones.
Our colleagues Alex Steele and Michael McKee take a look
at the President's goal of getting gasoline below two bucks
a gallon.
Speaker 9 (13:15):
A cornerstone of President Trump's economic agenda is lower gasoline prices.
Speaker 10 (13:21):
Energy is going down.
Speaker 5 (13:22):
I see that we had a couple of states where
gasolene was it a dollar and ninety eight cents a gallon.
Speaker 9 (13:28):
A dollar ninety nine might be a stretch. Now, if
President Trump gets his wish of forty dollars oil, it
could be a reality.
Speaker 11 (13:34):
The number one thing that sets the price of gasoline
is the price of crude oil. And as we've seen
gasoline prices drop over the past year or so, the
thing that's driven above all is a price of crude
oil coming down. So simple as that really.
Speaker 9 (13:49):
Ed Crooks is vice chair of the America's at Wood Mackenzie,
a leading data and analytics firm. Crooks says, it's possible
we get another oil price crash like the one we
had in twenty sixteen, which dragged oil down to twenty
six dollars a barrel and pump prices to a dollar seventy.
Speaker 11 (14:02):
It's certainly possible that we can get back to a
point like the situation we were in twenty fifteen twenty sixteen,
where we had very low oil prices down below forty
dollars a barrel, and that led to very cheap gasoline.
So we might have a period maybe a year or
two with very low oil prices, very low gasoline prices.
Speaker 9 (14:21):
Why is it always feel like prices that the pump
go up faster than they go down.
Speaker 11 (14:25):
There is some evidence on that. If you think about it, though,
take a step back, you think about the big picture.
Then people will say, well, because of these movements, because
gasoline prices going up fast than they come down, therefore,
refiners must be making fantastic profits.
Speaker 9 (14:41):
The reality is the price of oil only accounts for
half of the price of a gallon of gasoline. About
thirty percent is an equally split between federal and state
taxes and distribution and marketing moving the gasoline around the
country and selling it at the gas station. The rest
are those refining costs and profits.
Speaker 11 (14:58):
Refining is not a hugely lucrative business. In fact, particularly
right now, profit margins and refining have been squeezed right down.
It's really hard to make a good return in the
refining business.
Speaker 9 (15:13):
No one knows that better than Andy Walls, president of Downstream,
Midstream and Chemicals at Chevron.
Speaker 8 (15:19):
We're trying to buy low and sell high. Is It's
just like if you were to run a restaurant. The
raw maateurs you buy and the meals you sell to people,
that's there the restaurant's crackspread. Same exact concept in refining.
Speaker 9 (15:31):
It's Andy's job to make sure the one point eight
million barrels of oil products a day that Chevron produces
flows safely, efficiently, and profitably. More than half of that
comes from the US. I mean, this is huge. Give
me some perspective on how bingosal is.
Speaker 8 (15:45):
Yeah, So the whole property is about three thousand acres.
Most of the processing stuff is on about one thousand acres.
So it's a really big facility and a lot of
complex things going on here.
Speaker 9 (15:56):
Chevron's refinery in Pasca Goula, Mississippi, runs twenty four to seven,
takes thirty five different types of crude and turns it
mostly into gasoline, diesel fuel for jets, ships, railroads and
farm equipment, and even propane what you may use for
your barbecue.
Speaker 8 (16:10):
We're either breaking down molecules, putting molecules back together. We're
taking some product out of it. Maybe it's sulfur, maybe
it's a metal. We're squeezing it, we're making it very hot.
But we're doing a lot of chemical things to take
a raw material and turn it into a thing like gasoline.
Speaker 9 (16:25):
The oil is separated, pressurized, and heated more than a
dozen times to keep changing the molecules. It's complicated work
with razor thin margins.
Speaker 8 (16:34):
And I wish I had more control over margins. I
really don't. It's based on supply and demand, and if
margins are good, we really want to run. If margins
are bad, we still need to run.
Speaker 11 (16:43):
And so I think when people kind of take that
jump to say this is outrageous the oil companies ripping
us off and they're making so much money out of refining,
that's not really accurate at all.
Speaker 9 (16:55):
If refiner greed isn't a hurdle to sub two dollars
gasoline supply, it might be. Over the past decade, ten
refiners have closed, either because of damage or because they
transitioned to process renewable fuels.
Speaker 12 (17:07):
Refineris have been closing down, as you know in the
US Alon line. Dell shut down earlier this year. So
this is another problem that, yes, while crude oil prices
are going to be low. It's not necessarily the same
case for what we you and I consume, which is
gasoline and diesel.
Speaker 9 (17:22):
Emory to Sen is the founder and director of Market
Intelligence and Energy Aspects, a global data and intelligence firm.
Sen is one of the most prolific voices in the industry.
Speaker 12 (17:31):
The one thing I'm very very confident about is on
that refined products markets because the volume of refineries we
are continuing to shut down and just modest demand growth
for gasoline, diesel and jet will lead us to some
significantly higher pump prices.
Speaker 9 (17:46):
COVID also did permanent damage to the industry.
Speaker 8 (17:49):
Yeah, COVID was a challenging time for our industry.
Speaker 13 (17:51):
That was hard.
Speaker 8 (17:52):
Running the plant at minimum was hard. In fact, it
ended up making several refineries in the United States close.
It was either impossible, uneconomic or super difficult, and we
lost a lot of refiners in the US and they're
probably never going to come back. Once you close a refiner,
I think it's kind of it's kind of the end
of the line, and it's sad, but that's what happens.
Speaker 9 (18:11):
So what does that do for a supply demand dynamic
When it comes to say gasoline.
Speaker 8 (18:15):
It makes it tighter. Yeah, if somebody that used to
make gasoline is no longer making it, others have to
pick up the slack and have.
Speaker 14 (18:21):
To do it.
Speaker 9 (18:22):
The US hasn't seen a new large refiner since nineteen
seventy seven. Smaller ones have been built and existing plans
have expanded. US capacity is now at eighteen point four
million barrels a day. The real problem is coming. California
will see almost one fifth of its crude processing capacity
vanish in the next twelve months after Valero and Phillip
sixty six IDL combined two hundred and eighty four thousand
(18:45):
barrels of daily refining capacity.
Speaker 12 (18:47):
The problem is from twenty twenty seven on was if
you look at our refining kind of global landscape, it
only gets worse. We've got more closures coming because refining
is such a slow moving industry right seven years it
kind of takes to build, and there are no new
bills in the West anyways. So I think we are
in for a period of very high refined products prices,
(19:08):
even if crude doesn't go out, by the way, regardless
of what you think crude's going to do, And you
could disagree with me and say, oh no, demand's not
going to be great, and you know, shale will bounce
back whatever. We can disagree on that.
Speaker 9 (19:19):
Two dollars gasoline is definitely not a good sign for
the oil industry. The US is now the largest producer
in the world, a different dynamic than previous oil sell offs.
Speaker 11 (19:29):
The crude price that you'd need to get gasoline down
to dollar ninety nine is one that would be absolutely
miserable for people in the US oil industry. For oil producers,
it's certainly a level that would lead to job cutsits
level that would lead to rigs being laid down, people
drilling less, and so on.
Speaker 13 (19:50):
Most Americans agree they would like lower gasoline prices, but
that might not actually be good for the country.
Speaker 11 (19:57):
I think, though, you've got to think about gasoline as
being a bit like a health check brometer, temperature check.
If you do see gasoline prices really kind of starting
to plumb the depths and go significantly below where they
are today, that's probably a sign that oil is not
well in the world economy.
Speaker 15 (20:18):
We need to think about what's this cycle going to
look like. Because again, it was not some fundamental shift
in the market for oil that caused this particular cycle
to be intensified. It was some tariff policies that may
or may not be permanent. We don't know how that's
all going to shake out. The most typical economic reaction
to uncertainty is to do nothing. You don't buy that car,
(20:40):
don't buy that house, don't bring out that new product,
don't make that investment, all of those things. We tend
to just lay back and do nothing. If the uncertainty
as to some extent, I think it was a global
demand coming back pretty quickly. This may be a fairly
short cycle if that happens.
Speaker 13 (20:53):
Ray Perryman is an economist who's been studying the economic
effects of oil prices for forty years.
Speaker 15 (21:00):
Most recent study indicated that today if you take the
oil that's produced in the Permian and then you look
at the downstream, the upstream, and everything else that happens
with the oil produced in this region, if responsible for
about a million jobs to the United States.
Speaker 13 (21:15):
Texas is an intersection of the economic fallout from low
oil prices and producers taking their foot off the gas.
Kirk Edwards is an oil and gas producer who is
seeing the ripple effects in the Permian basin firsthand.
Speaker 16 (21:27):
It's the rest of the country that benefits from the
gasoline price. Again, people in the middle of Odessa. We
would rather see higher gasoling process because it means the
oil process is good and the economy is going to
be good. But it is a side effect for everybody,
because everybody has to use gasoline in their cars right
now to go to work and fly and do things
like that.
Speaker 13 (21:48):
And that's where we turn next week on Wall Street
Week when we go to Midland Odessa, the heart of
the Permian Basin.
Speaker 2 (21:56):
Up next is Milan starting to look a bit more British,
a story of how the wealthy are responding to changes
in British tax law. This is a story about the
(22:19):
rich and famous, or at least about the rich and
their migratory habits. Global elites are constantly on the move,
but where they choose to call home or dessert is
often dictated less by lifestyle than by what they pay
in taxes. As our London colleague Lizzie Burden reports in
this global Shuffle of Fortune's, one Italian city is coming
(22:41):
out on top.
Speaker 1 (22:43):
Nestled away on a leafy street in one of Milan's
most stylish neighborhoods, lies the former home of famed fashion
executive Santo Versace. Take a step inside and you'll enter
The Wild, the private club catering to Milan's rapidly growing
wealthy class.
Speaker 17 (23:00):
About Milan, it's an hour and a half by plane
from London. You can drive to the south of France
in two and a half hours. You can drive to
the beach in a couple of hours. You can be
in sam Ritz in an hour.
Speaker 11 (23:09):
And a half.
Speaker 1 (23:10):
Gary Landsberg's been heavily involved in private clubs in London.
Speaker 17 (23:14):
So my first foray into private clubs was with a
great club, the Arts Club, which was founded in eighteen
sixty three by Charles Dickens, and I was fortunate enough
to be able to with my partners acquire the business.
It's got an amazing history and clubs go back to
the late eighteen hundreds in London. You have Brooks, Whites,
(23:38):
all these amazing clubs, Boodles.
Speaker 1 (23:41):
But Gary opened The Wild last year, a club emblematic
of a global wealth movement into places like Milan, Monaco
and the Middle East away from London private clubs.
Speaker 17 (23:52):
If you go back to the eighteen hundreds, I think
there were like three hundred clubs at the time, there
was a lot and you know over the years Aviv
in twenty twenty five. In London people still like going
to private clubs, but unfortunately a lot of the clear
untail have actually left.
Speaker 1 (24:09):
And that's due in part to the UK government abolishing
the so called non dom regime.
Speaker 11 (24:14):
We will raise specific taxes.
Speaker 8 (24:17):
We want to win the non dom status completely.
Speaker 2 (24:20):
I think that the super rich trips paid their tax.
Speaker 18 (24:25):
It is a term relatively unique to the UK and
it's short for non domiciled, so it refers to people
who have or until very recently have had special tax
treatment because they were considered non domiciled in the UK,
meaning that their permanent home is in a different country.
Speaker 1 (24:44):
Nina Scerrow is the CEO at the Center for Economics
and Business Research in London. Previously a non dom would
avoid UK tax on foreign income and pay a small
fee after a few years. Now they won't pay tax
for the first four years, but then there'll be tax
like everybody else on their worldwide income.
Speaker 18 (25:02):
In short, it's the beginning of the end of the
non arm regime. So it is a big tightening of
the of the rules. The previous big change was in
twenty seventeen under the Conservative government, where they essentially capped
the period of fifteen years. They said, if you've been
here for fifteen of the past twenty years, you can't
really genuinely say that you're not a non arm But
(25:25):
this is now making the rules all the title.
Speaker 1 (25:29):
Manchester United owner Jim Ratcliffe famously relocated from Britain to
Monaco in twenty twenty, in a move that was expected
to save him four billion pounds in tax payments.
Speaker 10 (25:40):
I wasn't a fan of the non dome change. I
thought that was very foolish. I mean, you've got sixty
zersand very wealthy people in London. I do want to
encourage them to leave and make any sense to me
because they all bring, you know, enormous value to that economy.
Speaker 1 (25:55):
And now he's being joined by fellow football club owners,
banking executives and real estate in departing Britain. Last year,
the UK had a net loss of almost eleven thousand millionaires,
a one hundred and fifty seven percent jump from a
year before, which was already the highest number in a decade.
Speaker 17 (26:11):
I think the numbers that will come out in twenty
twenty five will be shocking, really I think will be shocking.
The trickle down effect on the economy is huge. Everyone
who leaves will have people that work from whether it's
in their business, in their office, in their home.
Speaker 19 (26:29):
And how is it directly impacting your business your investment strategy.
Speaker 17 (26:33):
Well, I think you know, for someone that was pretty
much heavily invested in London, I'm completely divested from London.
I have nothing here. I have a few real estate investments,
but I'm certainly not looking at this stage to invest
back in to London in the short term.
Speaker 1 (26:50):
But the government is confident it's made the right decision.
Speaker 19 (26:54):
Are you concerned that your non dom tax changes will
cost more than they raise?
Speaker 20 (26:58):
No, I'm not concerned. We made a Manifesto commitment to
ensure that non doms do pay their fair share of
tax in the UK, but combined with a temporary repatriation
facility which makes it easier for people to bring money
into the UK without facing punative tax. This is a
highly mobile group of people. But as well as people
leaving the UK for a whole variety of reasons, we
(27:20):
have every year thousands of people, including some of the
wealthiest people, come to the UK because they can see
that this is a great place to do business, a
great place to grow a business.
Speaker 1 (27:30):
The government's Independent Office for Budget Responsibility estimates that twelve
percent of non doms will leave the UK, but that
the new regime will offset that by raising almost thirty
four billion pounds over the next five years. Nina Scerrow
isn't so sure.
Speaker 18 (27:47):
I think there is a very very good reason to
think that the government departments are underestimating the extent to
which people are going to either leave the UK or
people that would have come to the UK otherwise aren't
going to common What we have found is that tipping
point where is the government making money is the government
losing money? Net is around one in four. So if
(28:11):
more than a quarter of non doms people currently claiming
the status are no longer in the UK, that is
the point at which the government actually starts losing money.
And looking at the obr's own estimates and some other
external estimates for how many people might consider leaving the
UK as a result, twenty five percent is very very
much within the realm of possibilities. So if you're asking yourself,
(28:34):
do I want to go to the UK? Do I
want to stay in the UK? Is this a good
place to start a business, to grow a business. There
is more and more ticks in the no column.
Speaker 19 (28:43):
Are you saying that it could affect London status as
a global financial hoob?
Speaker 11 (28:47):
Yeah?
Speaker 18 (28:47):
And I think absolutely changes to non doms is putting
a bit of a damper on the status of London globally.
And that's kind of a continuation, a little bit of
a trend.
Speaker 1 (28:57):
So if not London, why That's where Marco Characto comes in.
Speaker 21 (29:03):
I'm an Italian tax lawyer, so specialized on tax and
in that field that it means ever, taxation of corporation,
taxation of individuals. I would say that my personal practice
increased towards taxation of individuals in the past years because
of the new rules.
Speaker 1 (29:25):
The new rules to which he refers are Italy's flat
tax regime. Individuals pay a flat two hundred thousand euros
a year on foreign income for up to fifteen years,
a figure that was doubled last year. We've got all
of the fiscal pressures, not just in Italy but across.
Speaker 19 (29:40):
Europe and around the world. How likely is it that
this flat tax can endure? Because of course it's already
gone u from one hundred thousand to two hundred thousand
can it last?
Speaker 21 (29:49):
The decision of the government back in August twenty twenty
four to double the tax from one hundred thousand to
two hundred thousand has been indeed considered by foreign observers
from my field as a confirmation of the willingness of
the government to keep the regime, rather than an indicator
(30:09):
that the gin might be unstable. Consider that this regime
is there since twenty seventeen, has never been changed apart
from this increase, which as an inflation component, because don't
forget it was introduced eighty years ago, so there was
an inflationary period. And also there was the willingness of
the government to contain discussions or debates about the fairness
(30:33):
of this regime because by increasing and doubling the tax,
they have willingly restricted the amount of a network individual's
moving to Milan, thereby reducing the discussion about the furnace.
Speaker 1 (30:49):
Cerato spent most of his life in Milan and has
watched the city evolved well.
Speaker 21 (30:54):
Milana changed a lot in the last fifty years. At
the beginning it was an industrial seat. During their years,
it became a service city. It attracted a lot of people,
so fifty years ago, most of the people, at least
the people were wealthy, were MILLENISA. Now it's very difficult
to find somebody who is purely Milanisa.
Speaker 1 (31:17):
Yet an influx poses its own problems. Real estate in
Milan has comfortably outpaced wage growth over the past decade,
with prices rising forty nine percent, while other major Italian
cities have stayed largely flat or even decreased.
Speaker 17 (31:31):
It's quite small city, it's quite condensed, so they don't
have a lot of huge developments going on. There's been
a big influx of expats. They all pretty much want
to live in the same area, which makes it quite
difficult first for them to find actually spaces, and second
of all, because there's not a lot of supply and
(31:54):
there's a huge amount of demand. What's happening in the
local community actually is getting out priced because they haven't
seen She's like this before. The good quality mel real
estate is certainly seeing a huge increase in values.
Speaker 19 (32:08):
Would you say that Italy is more aware that it's
in a global competition to attract high network individuals than,
for example, the UK government.
Speaker 21 (32:16):
I'm not so sure the government is so keen in
entering into a global competition protect these people. They just
realized that it's good to have people from abroad with
high pending capacity making investment. This regime was introduced by
(32:36):
a left wing government. This counter government is a right
wing Meanwhile, there weare I think seven governments of different colors.
All the different parties looked at this regime and decided
to keep it. So paradoxically, the political instability of Italy
has been the best test to consider this as a
(32:58):
stable tax regen.
Speaker 1 (33:00):
Italy's government might not consider itself in a competition to
attract the wealthy, but it is doing just that, and
Lansburg says the UK faces an uphill battle to load
them back.
Speaker 17 (33:10):
You'll get the results of twenty five in twenty six.
They'll start talking about it. They'll start probably tweaking with
it by twenty seven, and then everyone will be worried
about an election in I think twenty nine. And if
you've kind of been around long enough, you kind of
see the patterns, and you know, I think you know
they're they're not going to turn the ship round today, and.
Speaker 1 (33:32):
In the meantime they can always look east to Italy.
Speaker 21 (33:36):
I keep repeating my clients that Italy is a very
bed place to work if you're in Italian professional or employee,
because you pay a lot of taxes on your income.
But it's a very nice place to die because there
is a net of the flat tax regime. There is
a very favorable regime on inhericans and gifts.
Speaker 2 (33:58):
Coming next, and you thought lawyers were only a drag
on the bottom line, Now they may be the next
big alternative for your investments. Next on Wall Street Week,
(34:19):
this is a story about turning a cost center into
an investment opportunity. For generations, lawyers have been a necessary
cost to be managed and minimized, but now that may
be changing.
Speaker 22 (34:35):
The legal industry as a whole has become a big business,
and we've got firms. I think there are fifty eight
firms that have more than a billion dollars in revenue.
Speaker 2 (34:48):
Lisa Smith is head of the Washington, d c. Office
of Fairfax Associates, which advises law firms on business strategy.
Speaker 22 (34:55):
The investment opportunity is high. I think the question is
is how to how to add value, How outside investors
could add value.
Speaker 2 (35:05):
In the past, when you were looking for exciting new
investment opportunities, American law firms weren't on the top of
the list. There's no question that the overall market is big,
with revenues estimated to total just over three hundred and
forty three billion dollars in twenty twenty two, up almost
one hundred billion dollars from ten years before, according to
the Saint Louis fed But until recently, all that money
(35:27):
was more or less kept within the protected guild of
those who'd gone to law school and been called to
the bar. We lawyers worked for Wall Street, but we
were something separate and distinct from Wall Street. Just ask
Professor David Wilkins of Harvard Law School.
Speaker 23 (35:42):
So you and I went to law school because we
didn't want to do business. It's not just that we
were not going to business school. It was a sort
of an oppositional idea, as I think your Justice pile
one said, but at least distant from business.
Speaker 2 (35:57):
As much as we tend to think of the legal
profession as tied to traditions going back hundreds of years
in Anglo Saxon jurisprudence, it has made some fundamental changes
through the years, starting with who was let into the tribe.
So we're in this wonderful Casperson Room, which is filled
largely with the portraits of old white men. But this
is a big exception.
Speaker 16 (36:17):
Tell us about this.
Speaker 23 (36:18):
It is this is the first class of women who
came to Harvard Law School, which is both a thing
to celebrate and also a little to be embarrassed about,
because these women did not come until nineteen fifty. In
other words, Harvard Law School had no women prior to
nineteen fifty, and this is a portrait of that remarkable
(36:40):
group of women, many of whom went on to do
quite remarkable things. It's important for us to remember, in
other words, that it wasn't so long ago that the
definition of merit did not include fifty percent of the population.
Speaker 2 (36:58):
Social pressures led to changes in the setae sixties and seventies,
but now it's a new kind of pressure, the financial kind,
that is pointing to fundamental changes in the way lawyers
do their work, brought on by an enormous growth in
the size and complexity of the matters lawyers are taking.
Speaker 14 (37:13):
On the cost of litigation, the time litigation takes, the
amount of investment a either a law firm.
Speaker 24 (37:25):
Or the plaintive has to make to even be able
to figure out is that a good enough case?
Speaker 14 (37:31):
How can I win this case?
Speaker 7 (37:32):
It just is.
Speaker 24 (37:34):
Cost prohibitive for the average person and frankly for the
average firm, because a law firm that takes a contingency case,
that's not their only contingency case.
Speaker 2 (37:45):
Boris Zeisser is a partner at shirlti Roth, where he
is cohed of its finance and derivatives practice.
Speaker 24 (37:52):
I think it's the need for the capital, given how
expensive it is to litigate, that has created this, this
need for this, for this outside investment.
Speaker 2 (38:05):
As the cases have gotten bigger and more expensive, so
have the law firms that handle them.
Speaker 23 (38:11):
Top law firm partners are being recruited from one law
firm to another, and they're being paid something like twenty
million dollars a year, guaranteed for five years. I used
to joke that law firm partners are paid like middle relievers.
They're now being paid like starting pitchers. You start to
(38:32):
have that in global enterprises, in dozens of locations with
tens of thousands of people. If you count all the
you know, the people who are not lawyers who work
in these organizations, and pretty soon you realize that if
you're running one of these things, you need not only
the skills of an excellent lawyer, you need to also
(38:55):
understand how to manage a complex business.
Speaker 2 (38:59):
The information in the practice of law has already brought
with it outside investment, largely in the form of litigation finance,
where investors take an interest in individual cases or groups
of cases.
Speaker 23 (39:11):
Litigation funding is just the securitization of litigation assets, and
again it started out as a kind of cottage industry,
mostly focused frankly on plaintiffs firms who are looking for
ways to defray the big investment. Increasingly, what we're going
(39:32):
to see is by the way companies bringing them in
to bundle cases together. So just like subprime mortgages, for
better and for worse, we are now seeing litigation as
an aggregate asset in which people are bundling cases together
because from the company's point of view, it's an aggregate risk.
Speaker 2 (39:58):
But now there's the possibility of pri financing, not just
for individual cases or groups of cases, but for the
law firms themselves.
Speaker 24 (40:06):
Law firms borrow money all the time, and there are
restrictions in every state on how a law firm can
take on capital, if you want to call it generically.
The more recent development was that a few years ago.
Arizona and Utah as well have created a new structure,
(40:27):
alternative business structure ABS. It's actually not new. It's new
in the United States. It has actually existed in the
UK for over a decade, but it's new here. And
what that allows a law.
Speaker 14 (40:39):
Firm to do.
Speaker 24 (40:40):
It's still a law firm. It's important to understand an
ABS is still a law firm, but it's a law
firm that has obtained a license, has gone through a
rigorous licensing process with a committee that operates under the
auspices of the Supreme Court of that state.
Speaker 23 (40:56):
The best example of this is in the UK, which
shortly after the global financial crisis, began to deregulate what
its legal structures and markets could look like. One of
the things that they did was take off the restriction
(41:16):
that the only capital that could be an a llegal
organization had to come from lawyers. In other words, you
couldn't have external capital. They also took off the restriction
that only lawyers could be partners in legal organizations. Now
you can have multidisciplinary partnerships. That's meant, for example, the
(41:36):
Big four accountancy firms are now licensed to practice law
in the UK.
Speaker 2 (41:44):
The prospect of attracting outside investmental law firms may be
attractive for the partners and the firms, but it's not
without its complications. Nearly all states in the US forbid
lawyers from sharing ownership with non lawyers or even sharing fees,
except under certain limited circumstances.
Speaker 23 (42:01):
It's not just any business. In other words, it's not
the same as running a manufacturing company or even running
an investment bank or edgement, because the people who are
at the core of this business, who are lawyers, also
have a set of professional obligations that are not just
(42:22):
maximizing shareholder profit or short term return. They have larger
duties and responsibilities to protect and preserve the rule of law,
which is core to American business, to American society, to
our freedoms as a nation, to democracy.
Speaker 2 (42:44):
For the profession, the question comes down to whether it
can pursue both the raising of outside capital and adhere
to the professional obligations each lawyer pledges to uphold when
we are sworn into the bar, or as Seisser thinks
that it can.
Speaker 24 (42:58):
There is a real difference between in the practice of law,
I think in the business of law and quite frankly,
having somebody who's not a lawyer, who has the financial
acumen to help a law firm be more efficient, more profitable,
function more smoothly, take advantage of the technological whether it's
AI or any other technological advancement. I think only in
(43:23):
yours to the benefit of the clients, and the lawyers
are still subject to the same disciplinary rules, ethics rules.
Nothing changes based on.
Speaker 2 (43:33):
That, despite some concerns about what it could do to
the profession. It looks like private investment of various forms
is coming to law. But is it a good investment?
As with most investments, the answer is a resounding maybe.
Speaker 24 (43:47):
I would say, could Could it be a good investment? Well,
it could be. You know, not every investment is ends
up being a good investment, but that's also in some
ways similar to investing in any other service business.
Speaker 2 (43:59):
Professor Wilkins recently put the question whether law firms could
be good investments to some lawyers who also are venture capitalists.
Speaker 23 (44:06):
We did a wonderful two hours on exactly this, in
which both of the venture capitalists said, I'd be very
hesitant to invest in a law firm for exactly the
reasons that you sit.
Speaker 2 (44:21):
And those reasons that make investing in law tricky include
the fact that the major drivers of revenue, partners and
their clients can simply walk out the door.
Speaker 24 (44:31):
Lawyers are free to leave. But can it be efficient
enough and profitable enough to retain the talent that it
needs in order to thrive and will the investment actually
help it do those things?
Speaker 22 (44:48):
I think that's the biggest risk factor, and there's I
think that and that raises the question of what value
outside of the people side could an investor bring. Is
it technology know how? Is it building a brand where
the brand is bigger than the individual partners? And so
(45:10):
I think there's the question that private equity in particular
needs to be able to answer, which is what's the
know how that they're bringing that firms can't do themselves.
Speaker 2 (45:20):
Whatever the risks are hurdles, it looks like private investments
in the business of law are inevitable. It may not
be in the room yet, but it's certainly knocking on
the door of the legal establishment.
Speaker 22 (45:32):
I mean I get calls probably once a month from
a private equity firm looking to understand the legal industry.
So there's no question that they are interested in this,
and they're trying to figure out how to make it work.
I think unless it can be two plus two equals five,
there's really no reason to do it. And I think
that's where you also see the rub.
Speaker 2 (45:54):
That does it for us. Here at Wall Street Week,
I'm David Weston. See you next week for more stories
of adolism.
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I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
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