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- [00:00]
Paul Sweeney
I don't love the word retirement because I think it has negative baggage. I like the word financial independence.
- [00:05]
Scarlett Fu
If you were to be financial independent, like how would you spend your time?
- [00:07]
Paul Sweeney
I think that's a better way to think about the end of life stage versus quote unquote retirement.
- [00:16]
Bank of America Announcer
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- [00:46]
IBM Representative
The thing about AI for business, it may not automatically fit the way your business works. At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM
- [01:18]
Podcast Host/Announcer
Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple Card Play and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [01:39]
David Welsh
David Welsh he is our Bloomberg Detroit Bureau Chief and we'll talk about General Motors earnings, but I was checking out Canada's exports to the U.S. and energy is number one on the list, 160 billion Canadian dollars worth of exports to the U.S. in 2025. Number two is motor vehicles and parts at 74 billion Canadian dollars. What's the thinking in Detroit when the President threatens tariffs on Canadian products?
- [02:06]
Automotive Industry Analyst
You know, generally speaking in Detroit the car companies worry about this because they've got long standing manufacturing there. A lot of big Canadian parts suppliers too. Magna is big. Martin Ray is another one that's a good sized company. They send a lot of parts over the border very quietly. Toyota makes a lot of vehicles in Ontario and Ford and General Motors still have production over there. So does Stellantis. So look, the car companies don't like anything that really is going to upset their supply chains any more than it already has. Mexico has already been a big deal for them in certain parts of Asia as well, so they'd rather see the status quo remain in place and hope it does here. In fact, the car companies generally want to see USMCA remain is similar to what it's been since Trump set it up, what, five, six years ago to begin with. But that's not going to be the case. But they have been fighting to sort of claw back some exemptions to that and reduce their cost. That's why General Motors. One of the reasons General Motors had better earnings today is they've managed to lobby their way into at least a little bit of a reprieve on these tariffs.
- [03:17]
Scarlett Fu
And looking at the GM results here, this is, you know, right back to their playbook, which is, I mean, they boost their 2026 outlook due to premium pricing on big trucks. Boy, that is America. Auto industry today. Premium pricing, big trucks, SUVs. That seems to be working for certainly Ford here. I mean, gm, it is.
- [03:38]
Automotive Industry Analyst
Well, it's working for. For all of them, really. A couple of things. So, yeah, they are charging a lot of money for their big vehicles. Now. We did actually, I will say this. We did see some discounting on pickup trucks as the, you know, the competition is always tough in that segment and you've got high fuel prices that I think is keeping some buyers on the fence for a while. So, you know, there's a bit of that going on. But GM's average vehicle is selling for $52,000. And, you know, that's an expensive vehicle. So they are. They're keeping price up. That's one of the things that's doing well for them. We talked about tariff relief. They have lower warranty costs. That's helping them as well. The other thing too, to keep an eye on, they've been boosting production. They had pretty lean inventories throughout the second quarter. So some of this is that they're just kind of putting more into the channel to their dealerships. And now GM says it's sustainable and that they see similar momentum into 20, 27 are 26 and 27. But they've got to deliver on that. Otherwise, you know, they're building inventory and they may have to pull back at some point.
- [04:49]
David Welsh
Okay, so GM and for they're all doubling down on these big premium trucks. What does the carmaker strategy look like when it comes to hybrids, when it comes to EVs? Because my understanding is there was another charge related to reduced production of EVs.
- [05:08]
Automotive Industry Analyst
That's right. And what that charge is, it's basically for stuff they've already announced, but they've had to pull back production on the batteries they make for the EVs. And they've had to pull back on production of the electric vehicles themselves. They're retooling a plant in suburban Detroit that they thought was going to make electric pickup trucks. But nobody buys electric pickup trucks. They don't buy GMs, they don't buy Fords, they don't buy Teslas, they don't buy Rivians. No one wants an electric pickup truck. So right now what you're seeing are these charges coming through the system. And GM has taken a total of 11 billion in charges there. They're still like they haven't canceled a single electric vehicle in that lineup. They still sell a dozen different EVs and that's their strategy. They don't have any hybrids on the market now except for the E Ray, which is a Corvette, very low volume. They say they're going to have a handful of them coming. Mary Barra told Bloomberg TV that. But none on the market yet. Ford only has a couple still answers. Very little presence there right now. That's a Hyundai and Toyota and to a degree Honda game. And they're good. All three of them are getting good sales gains in the US Market because they've got hybrid electric vehicles at a time when gas is selling for more than four bucks.
- [06:15]
David Welsh
Stay with us. More from Bloomberg Intelligence coming up after this.
- [06:20]
Paul Sweeney
Over $100 trillion estimated to be transferred to generations in the next 25 years. It's both a risk and an opportunity because we see that only about 18 19% of high net worth investors plan on sticking with their advisor post transfer.
- [06:34]
David Welsh
This has to be a tough statistic for some to hear. People who work so hard trying to grow their net assets, they want to protect that life work and they want to make sure that it is able to transfer in a seamless way.
- [06:50]
Scarlett Fu
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve of the workflow and your agent handles the risk. Monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC.
- [07:54]
Paul Sweeney
SEC registered advisor complete disclosures available@public.com disclosures
- [08:00]
IBM Representative
the thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the lets create smarter business. IBM
- [08:32]
Podcast Host/Announcer
you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [08:46]
Scarlett Fu
Well, here, this is a story that just won't die. Paramount Sky Dance. I'm not even used to calling it that, but whatever. Warner Brothers Discovery, Paramount wants to buy them. The federal regulator said okay. The state said, whoa, whoa, whoa, wait up here. We've got some problems. And looking, it looks like they're going to hold off this deal, at least temporarily. This is Paramount Skydance taking over of Warner Brothers Discovery. Wow. Chris Palmeri joins us here, senior editor and entertainment team leader for Bloomberg News. He's based out there in LA with all those folks, but he's here in the greatest city in the world, New York. Chris, thanks so much for joining us here. The states are blocking the Paramount Skydance merger or acquisition of Warner Brothers Discovery. Can they do that?
- [09:29]
Paul Sweeney
Apparently, yes. Apparently they can get a judge to do that.
- [09:32]
Automotive Industry Analyst
Yeah.
- [09:33]
Paul Sweeney
And we've seen this a couple of instances. We saw the states get together and go around a Department of justice deal with Live Nation, remember, and the whole Ticketmaster thing. So yes, they do have this power and they're using it. This is seen as sort of like antidote to a very sort of relaxed Trump administration merger and acquisition policy.
- [09:58]
Scarlett Fu
So at the very least, they've got some, I guess, a temporary restraining order. Is that what they have here?
- [10:03]
IBM Representative
Correct.
- [10:03]
Scarlett Fu
And that's going to delay the deal for a couple of weeks.
- [10:06]
Paul Sweeney
Right. So right now they can't close the deal until August 3rd. There's another hearing August 3rd that will be determining whether that injunction don't close the deal goes until there's a verdict in this case. So potentially pushing it through next year, which would be very bad for Paramount.
- [10:24]
Scarlett Fu
Yes. And now the parties, I guess the seller here said there's probably some risk when we were negotiating this deal that something would happen. And so we negotiated a ticking fee.
- [10:33]
Paul Sweeney
Yes.
- [10:34]
Scarlett Fu
What's that?
- [10:35]
Paul Sweeney
$7 million a day that Paramount must play Warner Brothers shareholders if they fail to close by the end of September. Okay.
- [10:45]
Scarlett Fu
Wow.
- [10:46]
Paul Sweeney
And so that adds up to more than $600 million a quarter. Okay.
- [10:50]
IBM Representative
Holy.
- [10:50]
Scarlett Fu
All right. So again, that's. You put that on the deal if you think there's a material risk that for whatever reason, it won't get approved. And so you got to really put the onus on the buyer to make sure it does get approved. What's the feeling in Hollywood? Is this deal going to go through? Can it really be blocked?
- [11:08]
Paul Sweeney
Well, yeah, we're going to do the sort of Hollywood version and the Wall street version. I think Wall street is largely bet that he's going to get this deal done.
- [11:16]
Scarlett Fu
Okay.
- [11:16]
Paul Sweeney
Okay.
- [11:17]
Scarlett Fu
He being David Ellison, who is the
- [11:19]
Paul Sweeney
CEO of, whose father is one of the richest guys in the world. And so that helps in Hollywood. There's certainly people think it's going to happen who sort of resigned to the fate, but they're very not happy about it. I mean, we've seen the Writers Guild actually sue to try to block the deal. We've seen very strong statements from other unions. You know, the rank and file person in Hollywood who's never a happy person in general, it's a tough business. It sees this for, for what it is. There's going to be massive consolidation. There's going to be layoffs. There's going to be one bigger conglomerate that they have to answer to, you know, for pitching stories, you know, pitching movies and TV shows and things like that, jobs, all of that. It's, it's, it's going to be, it's going to be difficult. And it's already been a difficult market in, particularly in Los Angeles in the film business. A lot of jobs moving overseas, a lot of cutbacks, the threat of AI. It's not a happy time there.
- [12:14]
Scarlett Fu
So, I mean, in reality, I mean, you think about it, you're putting two studios together, Paramount and Warner Brothers, two of the largest studios in the business. It's almost like 100% redundancy. I mean, do I need this stage manager on this studio if I've got one across the street on the other? You know, I mean.
- [12:33]
Paul Sweeney
Yeah, well, and not just the two studios, but two streaming services, Paramount plus and HBO Max and two giant cable network operations. I mean, Everything from CNN to mtv. So a lot of redundancies. Paramount's argument is that they're going to run Warner Brothers and Paramount Studios separately. Separate lots, separate management teams. They said they're going to have 30 movies a year they're releasing specifically for theaters, which is higher output than they've had historically. The two companies separately. We'll see if that all happens. That's the promises. Now the question is, when they do this deal, they've got 80 billion in debt. The cable networks are losing viewers and advertisers on a very rapid clip. If things really get difficult, how can they keep all of that operations up?
- [13:22]
Scarlett Fu
Is there a chance that they walk away from this? Paramount Skydance just says it's just too much of a hassle here. What's the company been saying?
- [13:30]
Paul Sweeney
Well, no, that's not what they're saying publicly. But look at this math. $7 billion breakup fee if, if the deal doesn't go through, whether it's their choice or, or a court's choice. And that's on top of the 2.8 billion they've already paid Netflix to walk away. So that would be close to 10 billion, sort of. Probably, considering all the lawyers fees and all that 10 billion that the Ellison have spent on this quest, that potentially could get them nothing.
- [13:59]
Scarlett Fu
Wow. It just goes. I mean, you've been in this business a long time. I've been in this business a long time. Hollywood is a tough place to do deals. They just by and large don't work.
- [14:10]
Paul Sweeney
Well, just look at the history of Warner Brothers. How many owners has it had the last 15 years? And how has it ended?
- [14:17]
David Welsh
Stay with us. More from Bloomberg Intelligence coming up after this.
- [14:22]
Scarlett Fu
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500. Or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC.
- [15:26]
Paul Sweeney
SEC registered advisor complete disclosures available@public.com disclosures
- [15:31]
IBM Representative
the thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter Business IBM let's talk
- [16:02]
David Welsh
about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling the system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in home care. And then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients and those prescriptions. Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how
- [17:03]
Podcast Host/Announcer
you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [17:17]
Scarlett Fu
Speaking of podcast real estate, perfect timing. Scott Reckler joins us here. He's the CEO and chairman of rxr, joining us here in studio. Scott, thanks so much for coming back.
- [17:24]
Scott Reckler
It's great being here. Thanks Paul.
- [17:26]
Scarlett Fu
New York City Office Market Give us an overview. How are things out there these days? It seems like it's coming back in a big way, but give us the details.
- [17:33]
Scott Reckler
You know, it's more than back. I mean, I've been in this business for 30 years and I have not seen the New York office market as strong as it is today. If you look at leasing, for the first six months it was 23 million square feet. If that carries through this year. It will take us back to levels that we haven't seen since 2000. Rent growth has been extraordinary, the fastest in the country. There's still a flight to quality. So you've seen the higher quality buildings are really, really doing well. But when you take the top 50 buildings, the vacancy rate's like 3% when you're in that mode. And even big blocks of space, there's. In all of Manhattan, there's about 22 high quality big blocks of space. And there's right now over 60 companies looking for over 100,000 square feet. So 100,000 square feet, only 22 available and 60 something looking for 100,000 square feet of block. So it's, it's shifted to a landlord's market versus a tenant's market.
- [18:26]
David Welsh
Right now, of course, all office buildings are not created equal, and plenty of office buildings are being retrofitted to become residential. And we saw in New York at least an incident in which there was a buckling of one of those commercial buildings that's being converted into residential. Tell us what you thought when that first happened and, you know, just your thought process and how we can prevent things like that.
- [18:49]
Scott Reckler
Yeah, so these, these conversions of office to residential has been a great program for New York. There was actually. They put a tax incentive in place to encourage it. And there's been almost 15 million square feet that's underway right now. So taking old office buildings, creating housing, where we have like a 1.8% vacancy rate in housing. So great public policy. But not all conversions are created equal either, because this is not just taking an office building and putting residential into it. They were actually building another building on top of the existing structure, which already takes a complex construction project and makes it more complex. And the initial readout is that there was two columns that were supposed to have been reinforced, that weren't reinforced, which created that buckling that you're talking about. I think we're going to get better clarity as to what ultimately happened. And was it an engineering issue? Was it an issue on the project? But clearly this is a program that New York should continue to lean into. It's really created a great dynamic for New York. It's not only great in terms of creating housing, but think about these little neighborhoods that we're creating that used to be just commercial. Now people live there. They support the retail and the restaurants on the weekends. These 247 walkable community. So what you have seen is lenders and investors have raised the risk spectrum. Now we're doing 4,000 units ourselves, both on the investing side and development side. And we've looked at these things now and said, okay, if this risk is higher, if you were going to have this overbuild, maybe we wouldn't do it today.
- [20:19]
Scarlett Fu
So talk to us about retail in big cities like New York, because when you walk out, when you're done with us today, you can walk out on Lexington Avenue. I'm going to ask you to look right across the street. There's a ton of unused retail space that's been there since the pandemic. Can you go rent that today? What's, what's going on?
- [20:38]
Scott Reckler
You know, it's again, submarket by submarket when you think about New York, right. So even this point about these conversions, right?
- [20:43]
Scarlett Fu
It's across the street from Bloomberg. Let's rent this space.
- [20:47]
Scott Reckler
The Upper east side, you know, has had a more challenging time than some of the other areas. But you go by, you know, Rock center, the retail is packed, right. Obviously you go down to Midtown, South Chelsea, retail pact. And so what you're seeing, these are the neighborhoods where people want to be. Grand Central has, in terms of, you know, in Park Avenue, one of the strongest retail markets, office markets in the country right now. And, you know, it's also because of public transportation, right. I mean, we're building a 300 square
- [21:15]
David Welsh
public transportation here at 59th and Lex.
- [21:16]
Scarlett Fu
I mean, there's something, I'm not kidding. Something's wrong. Like it's haunted, it's mispriced. People were talking about Lexington Avenue at 58th Street. It doesn't get that much better than that. And this thing's been vacant and it's a big slug of space.
- [21:30]
David Welsh
Right. It's not just the corner property. It's kind of the whole block.
- [21:35]
Scarlett Fu
Scarlett and I were out in San Francisco six months ago, maybe for a real estate.
- [21:40]
David Welsh
Yeah. And it was like everyone was bullish.
- [21:43]
Scarlett Fu
They were saying AI saved San Francisco, literally. You know, it's now fully. You can't get an apartment and all the space is being leased like, like crazy. How is AI impacted other markets?
- [21:54]
Scott Reckler
I think it's interesting when you think about AI, there's compute power and there's people power. And the compute power is happening in all these data centers that are being built in these areas around the country where energy is cheap. People power is in the office buildings. Right. And I think what you're seeing in San Francisco is very focused on tech. What you've seen in New York is this incredible diverse ecosystem where you have this, you have Capital, you have creativity, you have collaboration, all combust together through all these different industries. Right. And so we're seeing with our law firms, we're seeing it in the capital markets. I mean, think about this year in terms of you've had the largest ipo, we had the largest M and A. Wall street earnings are off the roof. Right. I just told you about the office market. Obviously, Knicks win the championship. Right. We had the World Cup. I mean, the energy in New York is unbelievable. But AI is just like everything else is a big driver of the economic growth, either directly or indirectly with the wealth effect. Right. And that's something that we're getting a great benefit and tailwind in New York for.
- [22:51]
David Welsh
Do you see Miami as a competitor to New York for the financial sector?
- [22:56]
Scott Reckler
I don't think so. I think that what you've seen over the last decade is the financial sector, like a lot of other sectors have thought about a distributable workforce. So they need to be in New York. This is where their customers is, this is where the activity is. But they also can put people in other parts of the country, whether it's Miami, whether it's Dallas, whether it's Atlanta. And then when they go there, what you find is it does not have the infrastructure to be able to be as competitive as New York even. There was an article this weekend that said that Miami costs more to live than in New York. It's going to get to a point where it's going to have the same challenge of capacity issues that we have in New York. In places like Miami, I think places like Dallas and Phoenix, they actually have more capacity. And that's why you're seeing other firms announce, you know, relocating other operations there.
- [23:44]
Scarlett Fu
Dallas has been a huge beneficiary and they can grow.
- [23:47]
David Welsh
That's the thing, right? There's, there's no, there's nothing really hemming that market in.
- [23:50]
Scott Reckler
Right. This is not the case in Miami. Right. Congestion, schools, everything becomes a challenge there.
- [23:56]
Podcast Host/Announcer
This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.
- [24:22]
David Welsh
Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more@business.optum.com Wait, I came in for two things.
- [24:55]
Scott Reckler
How is this $47?
- [24:57]
Scarlett Fu
All right, we're going to need a plan here.
- [24:59]
Bank of America Announcer
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- [25:11]
Scott Reckler
Oh, that's actually really simple.
- [25:14]
Bank of America Announcer
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- [25:24]
Scarlett Fu
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