Buffett Says He’s ‘Going Quiet,’ Picking Up Donation Pace

Summary

Bloomberg Businessweek: “Buffett Says He’s ‘Going Quiet,’ Picking Up Donation Pace”

Date: November 10, 2025
Hosts: Carol Massar, Tim Stenovec
Key Guests: Eric Weiner (Bloomberg News Senior Editor, Equities Americas), Henrietta Treyz (Co-Founder and Director of Economic Policy at Veda Partners), Ally McCartney (Managing Director, Wealth Management, UBS), Swami Kodagiri (CEO, Magna International)

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Episode Overview

This episode centers on the broader implications of Warren Buffett's gradual transition away from the public stage, the end of an era in American investing, and evolving market dynamics as global economic events—like the U.S. government shutdown—unfold. The hosts discuss Buffett’s legacy and the unique factors that set him apart, while tackling urgent policy issues from D.C., market sentiment, and the state of key industries with experts.

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1. The Buffett Transition: End of an Era

Starts ~[02:33]

Key Discussion Points

• Warren Buffett’s Role:
  • Buffett was seen as the ultimate “voice of reason” on Wall Street, consistently offering perspective during periods of market euphoria or crisis.
    • “He also was a sort of a voice of reason on Wall Street...They called him the Oracle. And there was a good reason for that.” – Eric Weiner [03:22]
  • His annual shareholder meetings, often with Charlie Munger, were major global investor events, unlike any contemporary equivalents.
• Investment Approach:
  • Buffett’s ability to blend simple, value-based insights with sophisticated portfolio management was highlighted.
    • “He was just really, really savvy with what he could see in terms of demand and what he could see in terms of the permanence of the American consumer…” – Eric Weiner [04:10]
  • Noted for buying undervalued assets and supporting management teams without micromanagement.
    • “He bought managements that he believed in and then gave them the room to do what they were going to do. It’s such a bizarre level of confidence...spot a good company and good management and give them the money they needed to succeed and get out of the way.” – Eric Weiner [08:26]
• Legacy and Succession:
  • Transition to CEO Greg Abel and the absence of a direct replacement for Buffett’s unique public presence.
    • “There's no, you know, when people listen to Warren Buffett and Charlie Munger...I don't see anyone else having that same draw.” – Guest Host [06:36]

Notable Quote

• “Be fearful when others are greedy and be greedy when others are fearful.” – Recalled from Buffett’s 2008 NYT op-ed [03:50]

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2. Washington Watch: U.S. Government Shutdown Update

Starts ~[12:29]

Key Discussion Points

• Progress Toward Ending the Shutdown:
  • Bipartisan support within the White House indicates reopening is near, with implications for federal workers and release of economic data.
    • “Hopeful that that starts moving forward for investors. The most important thing is that we're open by Friday...” – Henrietta Treyz [13:35]
• The ACA Subsidy Battle & Political Fallout:
  • Lingering fights remain around ACA subsidy extensions, with future confrontations expected into December and January.
  • Both Democrats and Republicans have faced political cost; Trump’s disapproval rating has doubled, while Democrats did not get all they wanted but managed to push the issue back onto the agenda.
    • “It's kind of like playing chicken with a crazy person...that's what we walked into this day.” – Henrietta Treyz [14:10]
• SNAP Benefits and Working Americans:
  • Striking statistic: 70% of food stamp recipients have full-time jobs; highlights persistent wage issues and corporate practices.
    • “A disproportionate number of them are young people and also old people over 60 or 65. But...what are these giant corporations...paying their employees that they still also need to have food stamps?” – Henrietta Treyz [16:25]
• Stimulus, Deficits, and Policy Paradoxes:
  • New proposals for $2,000 checks were critiqued for circular logic around tariffs and the deficit.
    • “When we did the CARES act...we sent out rebate checks...They cost $292 billion. The tariffs have thus far...brought in $89 billion. So if you're going to increase the rebate check from $1,400 to $2,000...you now have to spend $400 billion of the $89 billion in revenue...” – Henrietta Treyz [18:19]

Notable Quotes

• “There is no extra. So the trade deficit, the tariffs is my bread and butter...there is no leftover revenue to reduce the deficit, which is, of course, what bond markets are so focused on.” – Henrietta Treyz [18:19]

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3. Market Sentiment: The ‘Risk On’ Trade and Inequality

Starts ~[20:25]

Key Discussion Points

• Post-Shutdown Rally:
  • Equities rally as shutdown risk dissipates; Bitcoin also surges. However, questions remain about sustainability due to underlying economic fragility.
    • “We've seen a lot of back and forth in this kind of trade...everybody waits till Nvidia...sentiment and data was really unpleasant last week...the low end consumer is getting squeezed...” – Ally McCartney [20:56]
• Tale of Two Cities:
  • Markets at highs benefit largely the top 5-10%, while the majority of Americans face rising costs and limited housing access.
    • “Clearly what's happening is the low-end consumer is getting squeezed...they see in that Michigan sentiment number more hard times.” – Ally McCartney [21:50]
• Portfolio Perspective:
  • Advice remains cautious: “Is it time to buy, sell, or wait for more information?” Amid uncertainty, gold, palladium, and silver are attractive hedges, and financial/mega cap stocks merit attention at the right valuations.
    • “Every day I have to wake up and ask myself three questions with everything I own: Is it time to buy it? Is it time to sell it? Or do I not yet have enough information...” – Ally McCartney [24:23]

Notable Quote

• “You're not supposed to have gold rally 65% while stocks are up 28% while bonds are sort of mildly up. So we are in a very strange period where something will have to give. The question is when and will it be on the federal side?” – Ally McCartney [23:37]

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4. Automotive Industry Check-In: Magna International’s Swami Kodagiri

Starts ~[29:35]

Key Discussion Points

• Tariffs and Restructuring:
  • Magna has navigated significant tariff-related costs (initial annualized impact ~$200 million, now mitigated to ~$30 million through aggressive cost management).
    • “When he spoke to me last, it was fresh...now, we've been able to bring down that impact to roughly 10 basis points, which means about $30 million for Magna this year.” – Swami Kodagiri [30:44]
• Operational Efficiency and Future Prospects:
  • Ongoing focus on operational excellence, restructuring, and cost reduction has paved a path for margin gains in 2026.
• Demand and Industry Health:
  • North American production volumes have remained stable (~15-16 million units), but industry faces cyclical uncertainty. Average fleet age is high, suggesting latent demand if “externalities” subside.
• EV Retrenchment:
  • Slowing EV adoption in North America has required flexibility; Magna benefits from 80% propulsion-agnostic products.
    • “...when it does come back, and we still believe is a secular trend, the take rate is very different than what we all expected a couple of years ago. But...our ability to hit, whether it's an internal combustion engine or a hybrid, that flexibility...has helped us weather the storm pretty well.” – Swami Kodagiri [37:33]
• US-Canada Auto Trade Strains:
  • Policy uncertainty is straining North American trade, but Kodagiri remains optimistic about a mutually beneficial resolution in the long run.

Notable Quote

• “I like to say there is elasticity of demand that's going to come back looking forward if there is no more externalities like we have had in the last four years.” – Swami Kodagiri [33:14]

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Memorable Moments & Notable Quotes (with Timestamps)

• “Be fearful when others are greedy and be greedy when others are fearful.” – Recounted by Guest Host, quoting Buffett [03:50]
• “He bought managements that he believed in and then gave them the room to do what they were going to do. It’s such a bizarre level of confidence...” – Eric Weiner [08:30]
• “A disproportionate number of them are young people and also old people over 60 or 65...what are these giant corporations...paying their employees that they still also need to have food stamps?” – Henrietta Treyz [16:25]
• “You're not supposed to have gold rally 65% while stocks are up 28% while bonds are sort of mildly up. So we are in a very strange period where something will have to give.” – Ally McCartney [23:37]
• “I like to say there is elasticity of demand that's going to come back looking forward if there is no more externalities like we have had in the last four years.” – Swami Kodagiri [33:14]

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Timestamps for Important Segments

• [02:33] – Buffett’s impact, legacy, and the changing face of American investing (Eric Weiner)
• [13:35] – U.S. shutdown update, policy implications, and ACA debate (Henrietta Treyz)
• [20:56] – Market sentiment, volatility, and inequality post-shutdown (Ally McCartney)
• [29:35] – Automotive industry outlook, tariffs, EVs, and trade (Swami Kodagiri)

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Conclusion

This episode delivers an engaging, multifaceted look at the intersection of markets, public policy, and leadership transitions. It underscores the outsized influence and irreplaceable qualities of Warren Buffett, exposes the practical tensions of Washington’s economic policies, and provides deep, insightful commentary on market structure and industrial trends. For listeners, it’s a comprehensive state-of-play on the U.S. economy, illustrated with sharp analysis, vivid anecdotes, and the lived experience of industry and investing heavyweights.

Transcript

[Carol Massar]

Bloomberg businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs. When you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire, Reserved for Business is a painful card that elevates your travel experience and offers premium benefits that can take your business to the next level. Sapphire, Reserved for business offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more. With over $2,500 in annual value, it's the card that gives back all you put in. Learn [e-mail] ReserveBusiness Chase for Business make more of what's yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC Hiscox Small Business Insurance Knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance.

[Tim Stenbeck]

Bloomberg Audio Studios Podcasts Radio News this is Bloomberg businessweek 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 as it happens. The Bloomberg Business Week Daily podcast with Carol Massar and Tim Stenbec on Bloomberg Radio.

[Carol Massar]

Daddy, can I drive?

[Henrietta Treyz]

Yeah, sure, why not?

[Tim Stenbeck]

Do I look like I drive a minivan?

[Henrietta Treyz]

Shut up and drive.

[Tim Stenbeck]

Don't drive angry.

[Guest Host / Bloomberg Contributor]

Don't drive angry.

[Carol Massar]

I'll drive jump gun this is the.

[Tim Stenbeck]

Drive to the clothes.

[Carol Massar]

If you had access to a car.

[Ed Helms]

Like this, would you take it back.

[Tim Stenbeck]

Right away on Bloomberg Radio?

[Carol Massar]

All right, everybody, we've got just about 18:19 minutes to go until we wrap up the trade on this Monday. As you know, we've got stocks bouncing around but really holding on to their best levels of the session. Bouncing, meaning they're way off their lows today, up 1.6% on the S&P 502 and a quarter percent higher on the NASDAQ 100. So the risk on trade is certainly out there in a big way. Let's get to our Eric Weiner. He's Bloomberg News Senior Editor Equities America's joining us right here in our Bloomberg Interactive Broker studio as Bill Baloney was leaving. And we're listening to Alexis and we're all talking. And Tim, thank you. Leaned over to Eric and you know, it's the end of an era in terms of Warren Buffett. Right. Talking at his annual shareholder meetings. We all look to him every year and really, in moments of crisis, he was the voice that really investors wanted to hear from.

[Eric Weiner]

Absolutely. He also was a sort of a voice of reason on Wall Street. So he would be one who would point out that things had gotten a little bit far out over their skis. He would be the one to say that it was time to step back in. They called him the Oracle. And there was a good reason for that. Just we're not going to see something like that again for a very long time, if ever.

[Guest Host / Bloomberg Contributor]

Remember that 2008 op ed in the New York Times? Buy American I am. This was at the depths of the financial crisis. Everybody's freaking out. He writes, I've been buying American stocks. Why? A simple rule. Be fearful when others are greedy and be greedy when others are fearful. I feel like I hear that repeated all the time now.

[Eric Weiner]

It's so easy to say. It is so hard to do. And he, and it's not that simple in the sense that, like, what he saw, the way that he hedged himself, he, he was a very heavy user of derivatives. Nobo really ever points that out. He would always hedge himself. He was just really, really savvy with what he could see in terms of demand and what he could see in terms of the permanence of the American consumer that he could tell that there was like he was in front of newspapers when that was the only way to do advertising. He was in front of Coca Cola when everybody was saying, yeah, that's not going to be the thing to buy. And he's like, yeah, but people just like a Coke, you know, it's those kinds of really, really simple.

[Carol Massar]

Like Peter Lynch. Right. I need to understand the company and.

[Eric Weiner]

Then bring that in with very, very sophisticated positioning within his portfolio. And you don't see that kind of thing anymore.

[Carol Massar]

Yeah. Is there somebody out there that you think, I mean, I think about how much we listen to what Jamie Dimon has to say. And I do feel like he is the lone remaining big bank CEO that was there during the great financial crisis. All the others are no longer in that, that top spot. So he has definitely seen a lot and has really created a bank that I think people turn to and respect very highly.

[Eric Weiner]

Buffett believed in Jamie Dimon. Yeah, I remember I interviewed.

[Carol Massar]

They appeared together, like, often.

[Eric Weiner]

Yeah. I remember when I interviewed him for my first book, and he was. He had left Citigroup and was debating going to Bank One. We actually talked about this. Yeah. And I just had a feeling that he was a guy who a bank could use. He was already eyeing how to put things together. He's just a really, really savvy individual in terms of the way finances work. Buffett was different in that he managed portfolios. Like, you know, he really put his money where his mouth is. Dimon understands an industry. Buffett understood industries, and that's unique.

[Guest Host / Bloomberg Contributor]

So I guess the question I have is, like, there's not. Look, he's. He's still with us. We're talking about this because we've been.

[Carol Massar]

Seeing the transition slowly happening and putting people in charge to continue Berkshire Hathaway for the next 50, 100 years. What have.

[Guest Host / Bloomberg Contributor]

He's expected to end his role of CEO to successor Greg Abel at the end of the year. But it doesn't matter. There's no, you know, when people listen to Warren Buffett and Charlie Munger, who passed away just in the last couple of years at the annual shareholder meeting, there was. Those were, like, events where that people would flock to from around the world. I don't see anyone else having that same draw.

[Eric Weiner]

No, no. And it's also because they spoke about macro issues, they spoke about the world around them, and they addressed issues that affected you, whether or not you were investing. So it was like, you know, the. The Woodstock of capitalism, they called it. But it's unlike a normal shareholder meeting where they're talking about their business, they're talking about the company, he was talking about the world, and Berkshire was a.

[Henrietta Treyz]

Part of the world.

[Eric Weiner]

The biggest, the most amazing thing about him was that he was a real portfolio manager. If you look at him from the 60s, the return is insane. And then he built a conglomerate and ran that successfully, too. I mean, who can really do that? That. That's just not in the cards right now for. For what's available to you in this economy.

[Carol Massar]

I also think, you know, when you think about something like Raymond Dodd, like, he was their. Their method, the you that was the foundation for Warren Buffett. And, you know, we talk about value a lot, but he really did it and did it well.

[Eric Weiner]

And it's, again, it's the courage of the convictions. Like, he could spot what was. He felt was undervalued and then pile into it and be Right.

[Guest Host / Bloomberg Contributor]

You know, one. One thing that we love doing is talking to CEOs of companies that are owned by Berkshire Hathaway. Dan Sheridan was on with us just a few weeks ago ahead of the New York City Marathon. He's the CEO of Brooks Running. If you missed the conversation, check it out on our podcast feed. But he made the comment to us like, he doesn't get micromanaged by Berkshire Hathaway executives.

[Eric Weiner]

That was the whole point that he.

[Guest Host / Bloomberg Contributor]

Just does his management.

[Eric Weiner]

He bought managements that he believed in and then gave them the room to do what they were going to do. It's such a bizarre level of confidence where we, you know, take confidence as intervening, as stepping in. I know better. What he knew was he could spot a good company and good management and then give them the money that they needed to succeed and get out of the way. And that is like, the most admirable level of confidence that you can have.

[Carol Massar]

And someone who invested, yes, in publicly held companies, but private companies, whether it See's candies or whether it was Brooks, I mean, there were so many Duracell.

[Guest Host / Bloomberg Contributor]

Charter brokerage, Benjamin Moore.

[Carol Massar]

Yeah.

[Eric Weiner]

Guy bought at the Lowe's and bought at the low. Like, we would get. Would see these brands when they were discounted and go after them.

[Guest Host / Bloomberg Contributor]

My favorite is See's candy.

[Carol Massar]

Right now, every time in an airport, I'm like, got to get those. The nuts. You know, the nuts and the chewy ones. Yeah, I really love them. Hey, just got about a minute to go. Just quickly, the trade today, it's obviously risk on. I don't know, but does it feel like it has conviction?

[Eric Weiner]

Well, I mean, it makes sense in that if you were worried about airplanes getting off the ground and you were worried about, like, things being, you know, crushed to a halt by the. By the shutdown that appears to be ending. However, the risks in front of us are the Fed and what they're going to do. Earnings look great, but, like, what where the economy is going to go, where jobs are. Those questions aren't answered. But today you should be like, if you sold last week on the chaos.

[Ally McCartney]

Yeah.

[Eric Weiner]

Today you step back in.

[Carol Massar]

Yeah, exactly right. And you definitely are seeing investors doing that. Eric, thank you so much.

[Guest Host / Bloomberg Contributor]

Let me go anywhere.

[Carol Massar]

I know.

[Guest Host / Bloomberg Contributor]

I love it.

[Carol Massar]

Like the perspective on Buffett. Very cool stuff. Eric Weiner, Bloomberg News Senior editor, Equities Americas.

[Guest Host / Bloomberg Contributor]

Stay with us. More from Bloomberg businessweek Daily coming up after this.

[Carol Massar]

Bloomberg businessweek is brought to you by Evolving Money, a podcast that explores how cryptocurrency is the next logical evolution of the financial system. The program investigates how traditional finance firms are integrating crypto into their operations now that Washington has begun to pass much needed regulations. Follow the podcast, which is sponsored by Coinbase. Wherever you get your audio programs.

[Ed Helms]

Hey everyone. Ed Helms here and hi, I'm Kal.

[Eric Weiner]

Penn and we're the hosts of Irsay.

[Ed Helms]

The Audible and I Heart Audiobook Club. This week on the podcast, I am sitting down with Jenny Garth, host of the iHeart podcast. I choose me to discuss the new Audible adaptation of the timeless Jane Austen classic Pride and Prejudice. This is not a trick question. There's no wrong answer. What role would I play?

[Carol Massar]

You know what? I can see you as Mr. Darcy. You got a little Colin Firth.

[Ed Helms]

Okay, that's really sweet. I appreciate that, but are you sure I'm not the dad? I'm not Mr. Bennett. Here, listen to Earsay, the Audible and iHeart Audiobook Club on the iHeartradio app or wherever you get your podcasts. The world is buzzing with AI tools. But instead of making things easier, they've made things overwhelming. There's a better way. Meet Superhuman, the AI productivity suite that gives you superpowers so you can outsmart the word chaos with Grammarly mail and coda. Working together, you get proactive help across your workflow. No matter how you work, experience AI that meets you right where you are. Learn [e-mail] podcast that's superhuman.com podcast.

[Tim Stenbeck]

You're listening to the Bloomberg BusinessWeek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Carol Massar]

Well, today the White House expressing support for the bipartisan deal to end the US Shut down, a key development that makes it likely the government reopens within days. We shall see. The Senate is resuming deliberations on its deal with centrist Democrats, but has yet scheduling a vote for final passage. Although are hearing some talk that it could happen maybe later this evening.

[Guest Host / Bloomberg Contributor]

Okay, we'll be tuned to that. Senate lawmakers also still must wind its way through potentially time consuming procedures. And then the House members must travel back to Washington to vote for the first time since September 19th. That's a little bit of Schoolhouse Rock.

[Ally McCartney]

Yeah.

[Swami Kodagiri]

Is that.

[Carol Massar]

Yeah, but you can leave, I guess, when the government shuts down and still get paid. But yeah. Okay.

[Guest Host / Bloomberg Contributor]

Oh, okay. Carol Massar, go ahead.

[Carol Massar]

All right, let's see what the co founder and director of economic policy at Veda Partners has to say. She is Henrietta Trees, certainly a friend to us all here at Bloomberg. She joins us from New Orleans. Henrietta, glad you could join us. We talked to you. The surveillance team does a lot in terms of what's going in and around the Beltway. So is this real progress? Is it a political win, and if so, for whom?

[Henrietta Treyz]

Yeah, we definitely have progress overnight. Very excited about it. I'm optimistic that they will be able to get the House vote done as early as tomorrow. I think there's no better Veterans Day gift to give to our veterans than making sure that the military are paid and all the 700,000 furloughed workers can get their paychecks and some back pay as well. So hopeful that that starts moving forward for investors. The most important thing is that we're open by Friday, so we might start to get some BLS data from September. I think that that's possible. Staff still getting briefed, but that's my expectation and fingers crossed we're there.

[Guest Host / Bloomberg Contributor]

Do you think this is a solution?

[Henrietta Treyz]

Yes. I mean, I think that we've got the final package. We're going to have opportunities to keep having these ACA subsidy fights into December, and then we know that there's a January 30th cr, so we'll have the same exact fight all over again. Some of my smartest clients are saying, you know, what are the odds of a continued round after round of government shutdowns? And I think that if you look at what the two sides are taking away here, the Democrats are mad that they caved, and the Republicans, and in particular President Trump have suffered quite a lot just on their own personal approval ratings. So it's kind of like playing chicken with a crazy person. You know, they're happy to see what happens. And that's, that's what we walked into this day.

[Guest Host / Bloomberg Contributor]

You know, does it, does it seem like Democrats gave in on this? They're not getting what they wanted?

[Henrietta Treyz]

Yeah, to the far left, that's definitely how they view it. They wanted the actual ACA subsidies extended. You could see why for voters over the age of 60, your ACA premiums are going up $919. It's pretty substantial. The average one for people in their 30s, 40s is almost $200. So these are very real benefits for, I think it's 42 million Americans. So definitely something that Democrats wanted to see delivered. But the good news for them is that they got the fight back on the front burner. And when standing at a low 30s percent approval rating, you really don't have much further to drop. So the Democrats getting engaged in this fight and pushing back against what has otherwise been, you know, 10 months of Trump running the board is not all bad on the Republican side for President Trump. His disapproval rating has doubled since October. So there's a lot of reason to think that even though the ACA subsidies didn't get extended, Democrats fought the right fight. I think that that's what Schumer and Jeffries believe.

[Carol Massar]

You know, as we watch the political fights that go on in Washington and have for a long time, no matter who's in the White House, at least over the last few administrations, I think it's safe to say, Henrietta, what really struck us all, and I want to go back to those SNAP benefits, that 1 in 8Americans need food assistance. Why is that? What does that say about lawmakers, Republicans and Democrats through several White Houses and the job that they have not been doing for the bulk of Americans? I mean, aren't we the world's largest and richest nation?

[Henrietta Treyz]

Yeah, we sure are. And I think it's important to note that 70% of those recipients have full time jobs. So it's not like these people aren't working. A disproportionate number of them are young people and also old people over the age of 60 or 65. But you know, if you really want to get into the nitty gritty, why are people, 70% of these recipients on food stamps if they have full time jobs? What is their pay? I think there's some really interesting conversation that always comes up when we talk about SNAP benefits of what are these giant Corporations, Walmart, Target, Dollar General, etc. What are they paying their employees that they still also need to have food stamps? So it's really everyone to blame here on this front.

[Carol Massar]

Why is this, though, not something that gets pushed further in Congress with lawmakers?

[Henrietta Treyz]

Well, especially in a year like this one where they're focused on cutting federal spending. I mean, and you look at the one big beautiful bill were repeated instances of cutting food stamps back, limiting eligibility, all in the name of saving money, which is interesting given that it was a three and a half trillion dollar deficit increasing bill. And they eliminated the current policy baseline, which forces Congress to pay for things going forward. So the decisions around trimming federal spending are very proactive. They're on purpose. And that was across Medicaid and SNAP in the one big beautiful bill. So I don't, I don't know that this is necessarily seen as a problem to see the limitations. It's part of making the government smaller, which is what Trump and the Republican conference are trying to do.

[Carol Massar]

Let me throw on top of this, and forgive me, I don't have the details right in front of us, but we were talking about this in the newsroom, that the President is now proposing giving Americans a $2,000 check. Like, how do we do that? I don't understand. We talk about deficit, and if the economy is doing well, why do we have to do that?

[Guest Host / Bloomberg Contributor]

Secretary Besson said it could come in the form of tax cuts.

[Carol Massar]

Okay.

[Guest Host / Bloomberg Contributor]

But the President also said today that any extra would go down to pay the debt.

[Henrietta Treyz]

And that's exactly the problem. There is no extra. So the trade deficit, the tariffs is my bread and butter. And I would just say the following. When we did the CARES act under President Trump's first term, at the height of the pandemic, we sent out rebate checks. The president was very happy to send those checks out. They were very popular. They cost $292 billion. The tariffs have thus far this year for ieba brought in $89 billion. So if you're going to increase the, the rebate check from 1400 bucks to $2,000 and, you know, presumably there'll be a qualifying child credit of 500 bucks, something along those lines, you now have to spend $400 billion of the $89 billion in revenue that you brought in from tariffs. And why are you sending the rebate checks in the first place? Is it because costs of goods are increased? Is it because of the tariffs? It sure enough is. So you have this really circular logic that's a huge problem. And there is no leftover revenue to reduce the deficit, which is, of course, what bond markets are so focused on.

[Guest Host / Bloomberg Contributor]

Henrietta, just last question on health care and whether or not Republicans come to the negotiating table in good faith when it comes to the Affordable Care act later on. That's what Democrats want to see does that can get kicked down the road to January. And do they meet?

[Henrietta Treyz]

I've gotten that question a lot this afternoon from clients. I think yes. When I speak with Republican staff, they say that it's going to take two or three weeks to hammer out any kind of an agreement on income cap levels, on the Hyde amendments related to abortion, on the phase in and the duration of any ACA subsidies. I think it's a bridge too far to ask this extremely acrimonious Congress to come together in the 12 legislative days they have before the end of the year to get a solution. I think it's much more realistic that they need a deadline. And so January 30th, that January time horizon is probably going to be more intense around the ECA subsidies getting extended or not.

[Ally McCartney]

All right.

[Carol Massar]

So love, thank you so much, Henrietta, co founder and director of economic policy at Veda Partners. Henrietta Trey's joining us from New Orleans. All right. That's the latest, Tim, on the U.S. government shutdown and expectations that we're nearing an end has definitely put the risk on trade on Wall Street.

[Guest Host / Bloomberg Contributor]

Yeah. Traders rush into the riskiest corners of the market. Stocks climbing alongside Bitcoin as the US Senate advanced. A planned and the longest ever government shutdown also removed stock. Significant economic headwind. Bond and bonds edged lower. We've got a great guest back with us. Ally McCartney is managing director of wealth management and private wealth advisor with alignment partners at UBS. She's got more than $1 billion in assets under management. She joins us here in the Bloomberg Businessweek studio. The risk on trade today sustainable. I mean, it seems like we're seeing the riskiest corners of the market get a bit.

[Ally McCartney]

We've seen a lot of back and forth in this kind of trade. So last week was the worst week for the NASDAQ since April, since we began the tariff tantrums. So what happened last week I think was a combination of a lull in earnings news. First of all, we had gotten all the good earnings news out and then everybody waits till Nvidia. We also had the end of October, which is a fiscal end for a lot of funds. There was a lot of purging and taking profits. And then for whatever reason, the sentiment and data was really unpleasant last week. And people chose investors small and large, retail investors chose not chose not to show up, which has been the bid that's been getting the market through. And they chose to focus on things that, given what you just talked about, are not particularly surprising, like the lowest consumer sentiment out of you Michigan ever. Right. So I think, you know, when I look at everything that you talk about and I love the way that you talk about it on this show because it's from an economic perspective, but also from a social and human perspective. Clearly what's happening is the low end consumer is getting squeezed. Things are much more expensive. There are probably many of those people who are on snap benefits who haven't gotten paychecks in a long time and they're having a real hard time. And they see in that Michigan sentiment number more hard times. Whereas you look at the 5 or 10% that now spends 50 to 60%. And what are we seeing? Markets are at all time highs. AI is increasing the productivity of our jobs and our labor. We see interest rates going low. So we can probably have more of a tailwind and more of an ability to borrow. But that same movement in interest rates doesn't give the general population access to a housing market. So we really are like a tale of two cities right now.

[Carol Massar]

Right, Right. I mean that's the other thing about access to lending. Who really gets it ultimately? Right. And I thought it was striking what Henrietta said, that 70% of the snap recipients have full time jobs.

[Ally McCartney]

That shocked me. I was not, I was very surprised to hear that. That's not the narrative that I think we push on Wall street or from a government perspective.

[Carol Massar]

We've got one of our reporters on shortly, Mark Niquette. They've got a story out on the Bloomberg. It's Trump's economy now and Americans don't seem to love it. And they get in to how the US economy, Ali, is so increasingly dependent on three narrow interconnected a pillars, affluent sumers, artificial intelligence, field investment and asset price gains making it less stable if any of these pillars weakens. Those are kind of the three pillars of the market run up.

[Ally McCartney]

They absolutely are. It is not hugely atypical of sort of the end of a bull market or a boom cycle. Yeah. And the question that everybody's asking now is not, is not if but when. Right. These are called cycles for a reason. Portfolios are built the way they are to have things that go down when other things go up. You're not supposed to have gold rally 65% while stocks are up 28% while bonds are sort of mildly up. So we are in a very strange period where something will have to give. The question is when and will it be on the federal side? Will it be on the side? Because you know the thing, what do.

[Carol Massar]

You think most likely.

[Ally McCartney]

The federal side is interesting to me because the AI side I see that there is a concern and an issue around circularity, circularity of investment, circularity of hyperscaler, circularity of financing. But I also see and believe that this is transformative and catalytical like, like the steam engine was like telecom, like electrification of the grid. And this not surprisingly is happening quicker than all of those other capital expenditure cycles happen. But it's actually not from a like percent of GDP perspective concerning it actually probably has a lot of room to run. So I think that the affluent works until it doesn't work. And whether that's because it gets litigated away or redistributed in some sense, again, not a conversation we have in terms of portfolio managers on a daily basis. Point. But what all this means to me is that every day I have to wake up and ask myself three questions with everything I own. Is it time to buy it? Is it time to sell it? Or do I not yet have enough information to make a different decision? And the truth has been that there have been times in the last year, for example, where the answer has been sell a little or the answer has been buy a little more, or the answer is I need to wait to see what happens with tariff negotiations. But nothing that happened last week in that sort of purge or today in Monday's excitement makes me change any of those three issues.

[Guest Host / Bloomberg Contributor]

So you're not buying, you're not selling, you're waiting for more info.

[Ally McCartney]

We're waiting for more info. The one thing we are taking advantage is, is given all of the massive uncertainty, long term, short term, Wall Street, D.C. i'm still happy to buy gold, palladium, silver, though. There's more gold buying this year than we've seen since 2011. It's catalyzed by distrust in the US government, concern about national treasuries, full stop. Alienation from the US declining $. All of those things are going to continue. And when you look at the other precious metals, they have a lot of the same catalysts, but also with a real demand against a supply constraint. So those are interesting to me. And then to the extent we can get into some of those mega caps or into financial names at lower prices, those are interesting given all the tailwinds behind them.

[Carol Massar]

You tie it all together. As always. Thank you so much. Really appreciate Allie McCartney, managing director of Wealth Management and private wealth advisor with Alignment Partners over at ubs.

[Guest Host / Bloomberg Contributor]

Stay with us. More from Bloomberg businessweek Daily coming up after this.

[Ed Helms]

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[Swami Kodagiri]

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[Tim Stenbeck]

You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Carol Massar]

Hey listen. When Magna International reported earnings on Halloween, shares of the auto parts manufacturer rallied as much as 7% intraday in response to third quarter sales and adjusted EPS beats Magnum management also raised its fiscal year sales forecast thanks to strength in North America and China. There was a lot going on. Company based in Canada, biggest automotive supplier in North America. Everything from automated driving control modules, powertrains, lighting, mirror, complete engineering system. So much it is a great great great read on the auto economy.

[Guest Host / Bloomberg Contributor]

Back with us is Swami Kodagiri, President and CEO of nearly $14 billion market cap auto parts maker Magna International. The stock up close to 18% so far this year. I want to start with kind of where we left off when we spoke to you back in April. This was just after the President's so called Liberation Day tariffs. You liken them and the additional cost to drawing upon the playbooks from past rotating UAW strikes, Covid the great financial crisis, the chip crisis all rolled together. We were pretty shocked about those comments because you said it was big. Is it still that big of an impact? Has it been that big of an impact?

[Swami Kodagiri]

Hi, good afternoon. Thanks for having me. Yes, there has been a lot of dynamic challenges in the industry as you know, and when he spoke to me last, it was fresh. You know, at that time, as we sit here and look at it, I think our annualized tariff impact is roughly in the range of 200 million. But we continue to work with our team, with our customers, with our supply base and mitigating as much as possible. You know, adhering to the USMCA compliance. All in all, I think we have been able to, with a lot of self help, a lot of work with our customers, we've been able to bring down that impact to roughly 10 basis points, which means about 30 million for Magna this year.

[Carol Massar]

So I will say our BI team reacted to our Bloomberg Intelligence team, Swami reacted and they said they believe that your company's continuous cost cutting and operational excellence could further release margin gains in 2026. And they talk about in the US, major customers are benefiting from a more profitable sales mix with higher sales of pickups and SUVs offsetting lower EV production, which should enhance Magnus program economics for upcoming 2026 launches. Do they have it right?

[Swami Kodagiri]

Yes, they do. There's a lot of hard work and thanks to the team, there's been a lot of traction in our operational activities, including some of the activities that you mentioned mentioned. Cost restructuring, optimizing our operations. We have really worked through about 40 divisions in terms of restructuring, consolidation, bringing things together. And when the mix in, the volume becomes stable and it comes through, you see profitability going to the bottom line. And that has been our focus. Cost reduction, margin expansion and free cash flow generation. We have talked about 150 basis points over the last three years and I'm glad to say we have an additional visibility of 35 to 40 basis points going into 2026. So this is a journey, it's never going to stop here. And in an industry that we need to constantly work on improvements, we call them continuous improvements and we are starting to see the result of that.

[Carol Massar]

But you did talk about demand destruction in the short term when we talked with you in April, right after Liberation Day. Has it played out as bad as you expected? And where are we today? Your top customers are who's who of the global auto industry. So where are we today in that demand destruction? Are we done?

[Swami Kodagiri]

I wish I could have the crystal ball, but you know, the way I look at it is we peaked out as our industry in North America, about 17.5 million units. Interestingly, I was looking at the data go back 20 years. In 2004, 2006 time frame, North American production volumes were somewhere between 15 to 16. We are still at 15 to 16 million units today. I think the volumes held up this year, but I always like to stand back a little and see where was Magna. Magna 20 years ago was a $20 billion company. Today we are a $40 billion company. And it's the result in the efforts of the team to continue to gain CPV and to diversify our customer base. And that's where our focus is. Right. And to your point though, I hope this is the trough. If you look at the average age of the fleet, it's pretty high. The inventories are pretty normal. So I like to say there is elasticity of demand. That's going to come back looking forward if there is no more externalities like we have had in the last four years.

[Guest Host / Bloomberg Contributor]

Your company is based in Ontario. We are curious about the US and Canada trade negotiations or lack thereof. Given the impasse between the US And Canada, how is that affecting your industry and you specifically?

[Swami Kodagiri]

Yeah, as you know, auto industry is very interdependent ecosystem and it's pretty complex in North America. So it has been challenging. But I would like to look at Magna really as a global company. We have tens of thousands of people in Mexico, in Canada and in U.S. and obviously we are following the footprint of our customers, looking at the economics, looking at transportation, looking at logistics. And that is the competitiveness that ultimately lets you be the player that you are. Right. So the focus has been on it. Whatever the policy is, if there is certainty and visibility to the policy going forward, I think it's just going to be a tailwind to everybody, the OEMs and the supply base, you know.

[Carol Massar]

But Swami, is it broken? The U.S. canada? I mean, it's been so intertwined, really, the North American, you know, global auto supply chain. But is it especially the US and Canada, is it changed forever?

[Swami Kodagiri]

Again, I'm not a international trade policy expert speaking from.

[Carol Massar]

But you have a great vantage and a great window on how it has worked and how it feels today.

[Swami Kodagiri]

It's definitely been strained, right? There's no question about that. But I've lived in this industry for 26 years and what we're talking about today is going to impact maybe 27 or 28. So we are always looking at what we are doing today impacts three or four years down the road. What we are doing today has been planned and decided three or four years ago. So I tend to think a little bit in longer cycles. You know, I'm still hopeful that the policy is going to get to a point where it's mutually Beneficial to everyone.

[Guest Host / Bloomberg Contributor]

The President in the past, the President of the US has talked about his back and forth in his conversations with executives at North American auto companies. Have you had conversations with the President or his team?

[Swami Kodagiri]

I. We have had obviously a seat at the table in being able to communicate facts that possible impacts the challenges of the industry and what could benefit. I always say we are able to give an opinion. One of the opinions, I hope it's a dot on the chart. And definitely we have talked to all three regions. Right. Expressing what is the jobs that we have, what is the investments that we have made and how it could impact. Right? Definitely that is the conversation that's always ongoing.

[Carol Massar]

Hey Swami, one thing we wanted to ask you. The EV retrenchment that we continue to talk about here at Bloomberg, how is it affecting your business and the auto industry in general? You've got Ford considering killing the F150 Lightning, Stellantis killing the Ram EV, EV and GM taking a $1.6 billion impairment charge on its EV assets. That feels pretty chilling. How is that impacting you guys?

[Swami Kodagiri]

In the past we've always looked at EV and if you look at some of the comments that we made, I think we were a little bit conservative. But definitely the North American EV penetration has had an impact on us. We came back and talked about the impact of impact of our revenue going forward in the August, I think of 2024. But the key thing has been how we've been able to pivot. We had our peak CapEx spend in 2322. We got back to the sales to CapEx ratio shows our agility and being able to get back and you know, look at optimizing how we can reuse some of the capital with the help of the customers and so on and so forth. But overall EV I think in other regions continues and as a global company, we see that continuing in China and Europe. But when it does come back, and we still believe is a secular trend, the take rate is very different than what we all expected a couple of years ago. But with the investments already there, with the development that's behind us and our ability to hit, whether it's an internal combustion engine or above or a hybrid, that flexibility in our product line has helped us weather the storm pretty well. And you know, I think that's what we need to continue to do going forward.

[Guest Host / Bloomberg Contributor]

I know that the decisions you make now are decisions for four years from now. So are you changing product plans to develop more gas powered vehicles or to help make supplies for more gas powered vehicles.

[Swami Kodagiri]

Yes, Tim, I think we have had a lot of content in obviously the internal combustion engine platforms. Right. And as some of these programs are delayed or pushed out, we continue to get leverage on the existing programs and we continue to win. The other thing to note is a lot of our products, almost 80% of our product is propulsion agnostic. That means whether we make a mirror or a door or a structure or a seat, we'll make it for whatever propulsion it is. Right. So as far as we are flexible and continue to do that in our processes, we've been able to take advantage of that, of that flexibility and gain market and continue to grow our revenues.

[Carol Massar]

Swami, just 30 seconds here. Any signs of a US recession, a global recession? What's the word that you would use to describe the marketplace right now? Just quickly.

[Swami Kodagiri]

Yeah, I think there is signs of stress, I would say and obviously that, you know, puts us all us on a cautionary foot. But like I said from our auto industry, the inventories seem normal. The average age of the fleet is pretty high. So we are looking for auto demand not to be impacted that much. But we still remain very cautious.

[Carol Massar]

Got to say I need a new car pretty soon. So my car is over 10 years from Miller. I know. Yeah, he's got a bunch. Hey Sami, we always appreciate when you carve out some time for Tim and me and the Bloomberg Business Week Daily team, Swami Kotegiri. He is Chief Executive Officer, Magna International, joining us from Troy, Michigan on this Monday. Thanks again.

[Tim Stenbeck]

This is the Bloomberg businessweek daily podcast available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm eastern on bloomberg.com the I heart rate radio app Tune in and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

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