US Tells Iran’s Trade Partners to Cut Ties or Face Sanctions | Bloomberg Businessweek

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0:32 >> That's the latest from Treasury Secretary Scott Besson. He announced what he called a quote unprecedented US campaign to sever Iran from the global economy, warning that any country doing business with Iran risks facing US sanctions. Quote, "We are launching an economic onslaught against Iran's financial connections around the globe." The Treasury Secretary said at a press conference in Washington. And here's a little more of what he had to say. >> Every country, every entity should know that they should be prepared to face US sanctions and the no one is above this.

1:08 we are going to hold everyone accountable and this is exfixi economic exfixiation of this regime and Jennifer as I said no one should test our resolve. That was the Treasury Secretary just in the last hour live from or from Washington at a press conference. I promise this would be the focus the first part of our program and indeed that's what we're doing with just a fantastic roundt joining us from pretty much all over. We've got Ira Jersey, Bloomberg Intelligence Chief US interest rate strategist. Mike McKe is Bloomberg TV and radio international economics and policy correspondent and Nancy Cook, Bloomberg News senior national political correspondent. NY's in Washington. Ira's at Bloomberg intelligence headquarters in Princeton. Mike's out there in Wyoming getting ready for the Jackson Economic Symposium this week. Nancy, I I want to start with you because Iran has had sanctions on it for close to 50 years. How is this quote economic onslaught going to be any different than the sanctions that it's faced?

2:07 >> Well, what was interesting to me was just the timing of this announcement. You know, Secretary Bessant is making this announcement with about 70 days to go till the midterms. the Trump administration, I think privately, is pretty worried about its economic agenda and the drag that the economy that the drag that the war in Iran is causing on the economy. So, I think that they're looking for ways to be proactive and show that they're trying to bring gas prices down and and sort of make the economic conditions more favorable to voters. And that's why I think you're seeing the Treasury Secretary talk about sanctions today, even though we're still looking for a lot of details about what exactly those will look like.

2:42 >> So, we're awaiting some of those details. Hopefully, we'll get those details in the coming days. Mike McKe, I want to bring you in here and and and sort of ask you a question that follows with what Nancy just said, and it was also one that was shouted at the at the Treasury Secretary as he left. Why why these sanctions now and not 6 months ago? Nancy spoke to the politics of this, but is it also in your view indication that the the military part of the war didn't necessarily work or is not working?

3:10 Well, the military part of the war worked to an extent, but it hasn't brought Iran to the table. And so, at this point, they don't have very many options to go on from here to try to get the straight open and oil flowing again. This is one of the few that they have that might not lead to military activity, although my guess is that the Iranians would respond militarily to any serious impact on their economy. the other question that stood out was Scott Besson asking why would I want to blow up the global economy. good question and there is a chance that something like that could happen if they sanctioned all the people who are cooperating in one way or another behind the scenes with Iran because you have the Chinese a huge participant in trade with Iran's behind the scenes. You have India and you have many other countries that are allowing trade to go one way or another. behind the scenes with Iran. And so there is a the potential for a huge impact on Iran and the global economy, but we didn't get enough detail from Scott Besson today to know whether they really mean it, whether they'll go ahead with it, and what it would take for a country to end up in violation.

4:30 And Ira, I want to go to you because there's been a lot of focus as of late on the bond market and of course today we do see yields falling, but that doesn't really take into account all the whiplash that we saw last week. So talk to me about what you're seeing right now in the bond market and whether or not there's any conviction behind today's move. >> Yeah, I think today's move is just a little bit of bottom fishing here.

4:50 you know, particularly before maybe we'll get another announcement from Scott Bessent later this week because he did mention that there'd be some some type of details as far as the size of the buybacks that were announced last week and so so there there's a little bit I I think of you know kind of follow through on that. Now I I don't think it'll be sustained. I mean, at the end of the day, the you really need a huge number of and and amount of buybacks in order to really change the trend of the of the bond market because ultimately fundamentals are going to rule and and fundamentals right now suggest that we should probably be somewhere near 5% for 30-year bond deal just where the economy and inflation are.

5:30 >> We I I expected more from from him on the bond market or at least more questions on the bond market given what we saw last week. He he did sidestep that question that you referenced and he just said that auction sizes would be announced at the next quarterly refunding announcement. But you you actually think that we'll hear from him later this week on this rather than waiting for the next quarterly announcement. >> Well, he he did tell say last week that we he would have more information this week, but remember what the way that the buybacks work is on or about the ninth day of every month, they come out with the statement for what they're going to do for the next month. And so we're we're kind of in the middle of that cycle right now. That's why the buybacks that were announced last week, they go into effect coming September 9th, but that's when they start, right?

6:14 So they'll make an announcement on or about, you know, sometime before then. And then the first buyback will be, you know, the 10th or 11th or 12th, something like that. you know, maybe they'll wait until right after the 30-year auction in September, in order to buy back some of the, some of the off therun bonds, which is what they're doing in the, in this buyback program. Nancy, I want to bring you back into the conversation. Bond yields aren't typically something that we're talking about when we think about voters, but what does this tell you about the fact that now we're seeing this in mainstream news and you're seeing voters actually starting to care about the bond market?

6:49 >> Well, I think it just shows the extent to which the economy is on voters minds in this election. I think a lot of people voted for Trump for a second term because they were attracted to the idea of him as a businessman turned politician. people were very dissatisfied with President Biden's handling of the economy and inflation and I think that they wanted someone who they thought would put the focus more on the economy. you know I talk to Republican voters all the time and all of these u you know primary states that are having midterm elections in November and there's a real sense that Trump has taken his eyes off the economy for all these other priorities be it the war in Iran or redecorating the White House.

7:27 you know, there's just a lot of things that are consuming his attention. Whereas, I think a lot of his MAGA base really assumed that if he got back into power, he would be a huge steward of the economy and and voters, even Republicans feel like that hasn't necessarily been the case. >> Well, Mike, I actually want to talk to you. There's been so much focus on the economy as of late. We do have Kevin Worsh expected to speak at Jackson Hole on Friday. Talk to me. What do you think that Worsh does he actually need to address? what's going on with the Treasury on Friday. Is that something that you anticipate him actually mentioning and calling them out directly?

8:04 >> No, I don't think he will go anywhere near that right now. particularly when you see what Scott Besson did today in not laying anything out. I'm sure the two of them have talked to each other privately about this situation. But it wouldn't do Wars any good to talk about it at at the Jackson Hole Symposium. He's got enough problems with credibility with the the markets these days and their belief in whether he's serious enough about bringing down inflation and I think he'll focus on that and it's a tight rope enough for him to walk bear because he doesn't want to give any forward guidance and he's tried to say as little as possible.

8:43 it would be very interesting to hear his view on this new operation twist from the Treasury because it does make the Fed's job a little bit more difficult. And if they did start buying even more 30-year treasuries, that might force the Treasury the the Fed into raising interest rates because a lot of the Fed officials have cast their votes against raising rates as because the the economy is tight enough now.

9:13 Interest rates are high enough right now. If they start going down too much, then the Fed would have to get involved. And of course, U Bessent and Wars have talked about the idea of a new Treasury Fed accord that this might be part of, but it's too early for that really to come up here. >> Okay, we'll have to wait and and see if we get anything on that. Mike, I I want to stick with you and go back to what we heard and where we began the conversation with Nancy and this this being political and this being the plan to sever Iran's access to the to the world economy. Nancy talked about this being, you know, just ahead of midterm elections. Inflation is certainly top of mind for voters. The question that I have is there anything in terms of of sanctions or at least choking, you know, choking off Iran from the world economy that that will bring prices down here in the US? Like is that going to make gas cheaper? Is that going to make beef prices cheaper?

10:02 No, it wouldn't appear that would be the case because obviously if you shut off all oil going through, including the illicit dark oil that transits to China and India, then oil prices are going to go up and that's not going to play well with the American people. And there are a lot of other products that have been stuck in the Gulf there that haven't gotten out that are already starting to cause problems on the horizon. you're seeing more and more stories about how food prices may be going up because of the lack of fertilizer and because a lot of the the crops can't get out of Ukraine can't get out of the Middle East. And so there's a lot in there that doesn't suggest it's going to help the American consumer too much. U I suppose the argument the president is making is that people will care about whether Iran has a nuclear weapon. And I think people do in the back of their minds, but I don't think that's going to be front and center when they go into the voting booth.

10:59 >> And Ira, we've been continuing this conversation about affordability, about the economy. We know that both Goldman and Wells Fargo are essentially saying, don't expect these buybacks to actually bring t bring down those long-term rates substantially. So talk to me about that. How are you taking away what are you taking away from the fact of how the Treasury is anticipating orchestrating these buybacks and the method that they're going about it? Yeah, I mean doing an operation twist, you know, it the biggest thing that it's going to do is help liquidity a little bit but and then really hurt volatility, right? So I think that that one of the things that you know any kind of buyback like this does and you saw the same thing during the quantitative easing period is it really reduces like intraday volatility and one of the reasons for that is you know that if you're buying long-term debt and you're a primary dealer, you're going to have an outlet for at least a portion of that debt. So it really helps balance sheets and helps liquidity and that was the whole point of starting these buybacks in the first place a little over a year ago. so and and I think that at some level they've worked. I'm not sure they they're always necessary but but certainly to be regular and predictable like Treasury wants to be. you you know they'll continue to do these types of of little buybacks. You know will it will it get interest rates lower? Will it help like your your 30-year mortgage rate which is really based more on the 10-year? I don't think so. And if it does, it's five basis points or 10 basis points. Probably not much more than that. I agree with the my fellow strategists when they say that.

12:22 >> Oh, I want to hear if you agree with Mike McKe because Norah asked you about what this means for what we hear from the the chairman of the Fed come come Friday in in Jackson Hole. I'm curious about intervention to bring down long-term borrowing costs and how it your view it could complicate the messaging and at least the way that market participants are interpreting the messaging on Friday. >> So yeah. So, so I think Scott Besson is, you know, he's already said at the last press conference, is he going to talk about the big questions and lay out some big questions. So, I I doubt that he's going to talk much about the markets or really about the future of policy because like Mike said, he doesn't really want to he doesn't want to give forward guidance. Now I I think it is kind of odd because he he put Mvin King on the the communications task force that he has and I you know Mvin King has an interesting take on what the markets want and and something that central banks should give and that's what is the reaction function. So you know if there's four or five different scenarios that are realistic that could be the outcome for the economy where then would the what steps would the Federal Reserve take under each of those scenarios? And I think that's something that would really behoove Kevin Worsh maybe to say look we're looking into this. We're looking how to about how to communicate this. I think the market participants would actually like that and yeah because if you tell us that then we can forecast right? If you don't tell us what your reaction function is, we're going to guess what you're going to forecast and that just creates volatility and uncertainty and that's not something that the Federal Reserve wants.

13:50 >> Nancy, the focus really right now as we head into the midterms is the voter. it's on the voter and the Trump administration. Tell me, do you think that the administration risks voters actually hearing Treasury intervention and thinking that something may be wrong? There's been so much focus on you know, borrowing costs, so much focus on gas at the pump. What do you think that the voter is thinking in this moment? >> I think that the average voter isn't really paying attention to things like you know, Treasury intervention or the bond market. You know, what they really are paying attention to is their own pocketbooks. you know, is the price of gasoline going down? you know, when they hear Treasury intervention, they probably think that the Trump administration is trying to do something, but honestly, unless the evidence shows up in their own pocketbooks and their grocery bills go down and gas goes down and they're feeling more secure in their jobs or they're feeling like their wages are going to go up next year, it's really not going to matter to them. And so, you know, the Trump administration has made a number of efforts to try to bring down costs or show that they're working on it. And this to me is just the latest example, but I don't think voters are going to buy it until they see it themselves.

14:58 >> Well, we appreciate the three of you joining us and there will be plenty of conversations with all of you before we get to those midterms in November. A big thank you to Nancy Cook, Bloomberg News senior national political correspondent in Washington. Also, Michael McKe, Bloomberg TV radio and international economics policy correspondent out there in Jackson, Wyoming. And of course, Ira Jersey, Bloomberg Intelligence chief US interest rate strategist out there at Bloomberg Intelligence headquarters in Princeton.

15:24 Stay with us. More from Bloomberg Business Week Daily coming up after this. >> You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from 2:00 to 5:00 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App or watch us live on YouTube. Well, let's go to Canada because Prime Minister Mark Carney said his government is still working on options for retaliating against President Trump's new tariffs on Canadian goods, but added that he's willing to continue trade talks if the US adopts the quote right attitude. The discussions with US negotiators revealed that the president, President Trump that is, wants to destroy Canada's major industries, steel, aluminum, and autos with unfair terms. This according to the prime minister. Here's what the prime minister said earlier speaking from Quebec. The goal of our trade negotiations with the United States has always been to get the best deal for Canadians. Never a deal at any price or in any time frame. While we made progress, we did make some progress in recent weeks. In the end, that momentum reversed and we could not accept what the US had offered, nor could we give what they asked.

16:39 >> That was Prime Minister Mark Carney earlier speaking from Quebec. The prime minister's comments came hours after President Trump pledged to hike tariffs on Canadian autos to 50% starting on January 1st. The current rate is 25% but applied only to non US Continent finished vehicles. I want to bring in Melissa Shin, Bloomberg News Toronto Bureau Chief. She joins us from Toronto. Melissa, how would you describe the state of of negotiations right now? >> Yes, I mean it has been quite the past couple of days. you know last Wednesday it seemed that we would have a deal between Canada and the US and then as of Friday you know those talks fall fell apart seemingly at the 11th hour. and so now the feeling here in Canada is very much of defiance ready to you know hit back against the US and and kind of digging in for a fight.

17:32 >> How long could this fight go on? so according to reporting from our colleague Josh Wingrove you know there is openness to resuming the the discussions but you know Canadian officials are also getting ready for something that might not talks not resuming until after the midterms or even until President Trump leaves office. So, you know, earlier today, you played that clip of, Prime Minister Carney, he did say that, Canada is open to returning to the negotiating table if Canada is treated with respect. and we did also hear, from pres Vice President JD Vance and Treasury Secretary Scott Bessant, both of whom sort of hinted that under the right conditions, talks could resume. So you know hope is not lost but certainly there are you know it's not it's not anything scheduled or immediate at the moment.

18:29 >> And does the threat of of 50% tariffs starting on January 1st that that's months from now that is after the midterm elections does that buy time for these two countries to actually work out a plan before then? It does seem to and the thought you know is that given all that time there is this understanding of how important the auto industry is to both countries and how much of an effect putting those tariffs on Canadian autos would have on both countries and on the US. So potentially that is the thought. We we never know what's what's in President Trump's head.

19:06 but yes, we did observe certainly that there is quite a bit of time before that could take effect, but also anything could happen. >> Melissa, that headline 50% tariff number sounds economically seismic, but the measures cover only about 5% of Canada's exports to the US and that doesn't even count some of the strategically important products like energy, critical minerals. How much damage is this likely to cause and where will it be felt most sharply? >> Yes. So, let's just make sure we're talking about the 50% tariffs that came into effect on Saturday. and so, yes, that actually affects sort of a wide variety of Canadian goods, but not big big sectors in and of themselves.

19:48 So, wigs are among them, hockey sticks, plywood, and so it it's sort of it's a very interesting list. and that makes it very difficult to kind of, it's it's not a huge number in and of itself. the one estimate from a University of Calgary professor is that it will be about 90,000 jobs that would be affected which is 0.4% of the working population. and and so that would only be if the tariffs were to continue for quite some time. So but it's a lot of small businesses.

20:22 It's very hard to help those small businesses because you know you don't necessarily know who they are. and some of the supports that have been out there have really been aimed at large sectors like autos, like steel and aluminum. >> Well, talk to me a bit about the political support for Carney. I mean, is this something that you think is durable, especially when we start to see economic costs rise? >> It's a great question. and just to sort of bring it back a little bit, you know, as soon as the threat of tariffs against Canada came into effect early last year, and as well, the commentary about, Trump annexing Canada, making it the 51st state, that's when Canadians really started to listen and started to, you know, boycott products, limit or eliminate travel to the US whenever possible. so this movement that Canadians have been doing has been happening for more than a year now about a year and a half. and and that is waxed and Wayne of course as also the talks have waxed and waned.

21:21 as of now there was a flash poll done over the weekend that found about three and four Canadians support the direction that Mark Carney Prime Minister Mark Carney is going in. and but to your point, if the economic pain continues for quite some time, you know, the cost of living is is expensive here as it is in the US and at some point it it is sort of important to look at the pocketbook effect. And it can be sometimes more expensive to buy local or to spend money within Canada. And so it just really will depend in terms of the reaction how long this pain goes on. And we should note too, Prime Minister Mark Carney did serve as the chairman of the board of directors for Bloomberg LP starting in August of 2023. He left that position when he, ran for prime minister. I I just want to point to in the last minute that we have a a post from on social media that the president posted earlier today. He said, "Canada's been ripping off the United States of America for years. Their ridiculously high tariffs on our farmers and farm products has made life impossible for these great American patriots and has long created a $60 billion deficit between our two countries. I'm not going to have you fact check this one, but but I'm but for people who are having trouble keeping up with what this is about. Is it about this? Is about wildfire smoke? Like what is what what are the issues here?

22:45 >> great question. I think a lot of the negotiators might be asking themselves the same question. yes, there's a lot of longstanding irritants between Canada and the US it seems despite the fact that we do have a free trade agreement that Trump signed in 2020 himself in his previous term. you know you mentioned dairy you mentioned wildfire smoke. there's also some issues that came up at the last minute in the negotiations regarding trucks and whether they would be tariff exempt. As Prime Minister Carney mentioned, the the US seemingly wants to remove autos and steel and aluminum as areas in which Canada can thrive. so it just seems that there are various issues that have come to light. French language requirements. so you know which is the most important one? We're not really sure.

23:37 >> Well, I'm glad you're keeping track of them for us and we appreciate you taking the time this afternoon. That's Melissa Chin, Bloomberg News Toronto Bureau Chief joining us from Toronto. Stay with us. More from Bloomberg Business Week Daily coming up after this. You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from 2:00 to 5:00 Eastern. >> Listen on Apple CarPlay and Android Auto with the Bloomberg Business App or watch us live on YouTube. Well, this story from our own Will Wade getting our attention last week. Terrap Power, it's the only company building utility scale nuclear power plant in the US expects to announce its next project this year, one intended for a data center. It would put the company, which is backed by Bill Gates, on track to break ground on its second project in 2027. That's according to the CEO, Chris Lec. Chris Le joins us now along with Will Wade, Bloomberg News Energy reporter. Chris is in Belleview, Washington. Will here in the studio with us. So, Chris, who is this customer?

24:41 >> Well, thanks for having me and we're not ready to announce that first client yet, but I can tell you there's tremendous interest in Natrium reactors here at Terop Power. And I I think the interest is really driven by, you know, what we've shown is that with that first plant we're building in Wyoming, we're we're really the first mover in the US. It's the only grids scale power station under construction you know in nuclear today. got the first nuclear regulatory commission approval.

25:13 And then you know what I think you also saw with our trip to Korea a couple weeks ago. You know just massive announcements with the supply chain there. we've had great relationships with with Korea going on 5 years now with with SK being our second biggest investor. as well as HD Hyundai being part of our supply chain. But two weeks ago we announced a framework agreement for up to eight reactors with with Hyundai Engineering and Construction. And you know that Korean supply chain is formidable.

25:48 you know, Korea has been building, South Korea has been building nuclear plants over the last decades while the US hasn't been building very many. So, they're they're raring to go you know, they also are committing to you know reach our our cost and schedule targets, which for our technology means delivering natrium reactors in just three years following groundbreaking. That's that's what we're validating with the with our design and and that's why people are so interested in in Natrium for AI is the much shorter construction time that that we'll be able to achieve with Natrium.

26:25 >> Well, Chris and just very briefly here and I promise I won't you know harp on this too much about the the who which customer this will be, but what is the reason that you're not ready to announce it? Is it because the the ink hasn't dried on the agreement? There is no signed agreement like like what is the reason you can't announce it? >> Yeah. So I think it's important to realize that we're in a period now where you know largely driven by AI demand utilities and AI customers h namely the hyperscalers are entering into discussions with companies like ours to start some of these new projects and I think you have to realize that the US and Europe haven't been super successful in the past with with new nuclear so you know we spend a lot of time structuring the these new projects and for us kind of the formula the winning formula is you know continuing to show success in the project with that first plant in Wyoming where we're the first mover on multiple fronts but then it's about showing that we have a supply chain and we have an experienced supply chain who is willing to say to the utilities and to the hyperscaler customers that will stand behind delivery >> and you know Terrap Power and and the rest of our delivery team like HD Hyundai and Hyundai Engineering Construction. that's what we're saying to the market right now is that you know not only can you look at that first plant in Wyoming and see that we're you know going to deliver the the first nuclear plant in in a long long time and make electricity in 2031.

28:06 But right behind that, we're going to be quickly scaling up to something like 10 reactors per year by the middle of the 2030s. >> Well, Chris, the one you're doing now is for a utility, and that that's the traditional model for nuclear power. Build a power plant and have a utility take the electricity there. How is it different now that data centers and AI and big tech have entered the equation here? Yeah, thanks for the question, Will, and thanks for following Terop Power so so closely over the years. You know, I grew up in New Hampshire watching the Seabbrook nuclear power plant take over 10 years to get built and it was had a lot of o opposition on the news every night and it was paid for by the rateayers alone.

28:52 I I can remember my parents, you know, complaining about seeing this line on their electricity bill related to that nuclear power plant. And every time there was a cost change, it hit the rateayers. we're in a new era now where you know, the the White House and and governors are not going to allow existing electricity rateayers, mom and pop, to pay for the capex of these new plants. So, what you're seeing in the deals we're structuring is, yeah, the utility will be present. they'll probably be running the plant when it when it goes online and and they may even own it. But in the deals that we're structuring, we're going to be looking for the eventual electricity customers to enter into power purchase agreements that will essentially pay for, you know, the capital expenditure for that plant.

29:44 and and that'll be a a long-term PPA that lasts 20 to 30 years. >> Are data center operators willing to pay a premium for nuclear power because they need reliable power so badly? >> some are some are raising their hand Nora and saying yes we will pay a premium both to assure that security of supply but also to have you know emissionfree source like nuclear. but for a long time at at Terap Power, you know, come coming straight from our our chairman, the goal has been to, you know, develop a power source, our Natrium reactor that will be competitive with renewables and and gas.

30:28 And what we've seen in our design because you know our natrium reactor can be built much more quickly, requires less steel, less concrete. we have a design that you know once we come through our our first you know non-recurring investments, we're going to have a design that will be competitive with other energy sources. And you know the US is the hardest place because we have cheap gas. It's the hardest place to compete with cheap electricity. so we'll be we'll be successful competing in the US but then we'll have super lowcost nuclear you know available to you know countries like like the UK or even you know in South Korea we think there's you know tremendous demand growth there not just from AI but from semiconductor fabrication and and we will have a very economic power source for for this century. Well, Chris, when you talk about not letting momand pop rateayer get stuck with the bill, and when we talk about big tech companies willing to pay a premium right now for nuclear, that's kind of tacitly admitting that at least now these first ones are not going to be cheap. They're definitely going to cost more. When do we get to this cheap nuclear power that you're talking about?

31:42 And how do we get there? >> Yeah. you know, every business has an investment. you know pharma you name it all have investments to get your product out the door. We're making that non-recurring investment right now at Terapower with with our investors you know like Bill Gates and SK Nvidia joined us as an investor last year. and that investment is being matched by the the US Department of Energy. that's going to allow us to deliver the first plant with the non-recurring costs covered again by our investors and the DOE not by the rateayers will then by way of you know these orders that are coming be able to quickly move down you know the cost curve and supplier partners like you know HD Hyundai the biggest ship builder in Korea and Hyundai Engineering Construction who really has a you formidable reputation.

32:42 Those delivery partners are going to help us quickly get down that cost curve. >> So, how much of the conversation you're having with data center operators is about clean energy versus just simply we need a lot of power and we need it now. >> It it's both. I see the hyperscalers still really committed to clean energy. I also see them facing tremendous you know electricity demand. It's a problem they have to solve now and and it's a problem we've been trying to solve at Terrap Power by driving a design that can be built much faster because you know it's true nuclear has been a great source of electricity for the last 60 years in in the US and Europe but the construction projects have just been too long. So I think the reason Terap Power is getting a lot of attention right now is, you know, we're turning heads that we're actually building the thing in Wyoming and then we're validating that we can deliver these things on a 36-month construction schedule once you break ground.

33:43 >> So you're talking about being able to do 10 power plants a year. When do we get there? >> Yeah, by the mid 2030s will. And you know, that'll be a huge change. but you know, I really have to hand it to companies like HD Hyundai. Chairman Chung there turned to Bill Gates and I and he said, "You know, we build up to a hundred ships a year in our shipyard. You know, let us show you how to scale."

34:05 He he said, "Normally, Nuclear does things one or two at a time." and we're really seeing in our 5-year relationship with HD Hyundai, they're providing design input to us. They're they're showing how us how to get the cost down and and really how to how to scale to that kind of delivery rate. I should say if you want more reporting on the nuclear industry in South Korea, Will Wade has done some great reporting on that after a visit last year. Will I believe was maybe early was it last year? Yeah, last year you were there. So check out that on the Bloomberg terminal. really appreciate you joining us, Chris, today on the program. Don't be a stranger. Come back before the mid 2030s when you're doing, you know, 10 of these a year. we're going to follow it closely. Chris Lec.

34:50 he is the CEO and president of Terara Power joining us from Belleview, Washington. Also with us and a big thank you to Will. Will Wade, Bloomberg News Energy reporter. Check out Will's reporting on the Bloomberg terminal and at bloomberg.com. Stay with us. More from Bloomberg BusinessWeek Daily coming up after this. >> You're listening to the Bloomberg Business Week Daily podcast. Catch us live weekday afternoons from 2:00 to 5 Eastern. >> Listen on Apple CarPlay and Android Auto with the Bloomberg Business App or watch us live on YouTube.

35:26 >> Well, speaking of New York, let's talk real estate. We've got back with us Lisa K. Litman, a real estate agent with Brown Harris Stevens. She and her team did more than $500 million in transactions just last year. She's back with us in the Bloomberg Interactive Brokers studio. Welcome. We spoke to you a few months ago. Yeah. sort of the beginning of what is oftentimes a busy season, spring for people like you. Now we're in August. Why are you here? Do you guys I thought nobody worked in August. The whole the whole subway was was empty this morning for me.

35:57 >> Yeah. So I work I like to work. I'm not that great at taking a lot of time off. I mean I definitely work less in the summer. I you know I take a lot of Fridays off. once in a while I'll I won't be in the city on a Thursday, but I'll still be working. Are your clients here right now? >> So, you know, if my clients aren't here, I feel like I can take Fridays off. If my clients are here, I'm not going to.

36:18 So, yeah. I mean, you know, I try to take vacation at times when I think it's going to be quieter and, you know, having done this for almost 30 years, I kind of know when that's going to be. So, you know, I need to be around when people are around. Now, in exchange, I work on Sundays during the year and I work on Martin Luther King because those are days that other people have off. So, you know, like I said, I've been doing it for a long time. So, you you kind of eventually part of your DNA is working in that way.

36:48 >> And you know, you said that you know when it's quiet. You've been doing this for almost 30 years now. What is this right now? Is this a quiet season? How are we thinking about seasonality right now? >> Yeah. So, the quietest times of the year are the end of December, early early January and now. Those are the two quietest times. and they just tend to be when most people travel. so you know, the summer used to be quieter than it is now. You know, ever since people could get everything on their phone at any second of the day. Things are not as quiet as they ever, you know, it used to be that summer was really dead. December was really dead now because you have constant information at your fingertips. It's not quite the same. And even if people are traveling over the summer, if they see a listing they like on their phone, they may say, "Hi, I'm in town for two days in the beginning of August between travels. I'd like to see it. So, it's busier than it used to be.

37:40 >> I'm curious about who who's calling you right now and who's buying in New York. And the context of my question is really about the all the money being made in Northern California, Silicon Valley with AI and these private companies that are valued around a trillion dollars, the SpaceX's of the world. Are you seeing any of that right now? >> We see all of it. I mean, if I had to generalize about where most of the purchasing power is coming from, I'm going to tell you it's second generational wealth.

38:09 >> So, it's still parents. >> Well, it's it's it's people between 30 and 45 who have very often inherited money, but have also done very well on their own, maybe have invested well, are very well educated, and you know, they like to live in cities. So, you know, we've had some changes with the piet tax and all that, but the the fact is is we still have a lot of people who want to make New York City their primary home.

38:35 >> Does the Pitare tax actually dissuade people or the prospect of it dissuade people from buying a second home here? >> Yes. I I wasn't sure if it did. So, I'll tell you what it does. People who have had large second homes for a long time and are finding that they're not using them that much are now thinking about selling them. but they maybe were on their one step into selling them anyway. And then people who have always been sort of on the fence about buying a second home maybe are delaying it a little bit to see what happens. So it's a little like after co when people said, "Oh, everyone's going to Florida." That wasn't true. They were people that one had one step out of New York already. So sometimes things like this give that extra push.

39:19 >> So I mean, how are you also thinking about the rental market? So, I think that that's also been a place that's been like pretty locked. You see people in New York City who maybe aren't necessarily selling some of their homes, but you still have high net worth individuals that are interested in buying. So, right now they're parked in these super expensive rentals. How are you weighing the rental market versus folks buying right now? >> Well, I mean, the rental market's insane. I don't do that many rentals, but the rentals I've done in the last year have been crazy. I did one at a $70,000 price point, one at a $30,000 price point. And per month, by the way, per month. Yes.

39:53 >> Yeah. I should have, you know, don't forget about first month, last month, and security. >> And now I just did one one bedroom for $13,000. So, and each time I've done a rental, there have been multiple bids for the rental, like people just clamoring. I mean, it's been crazy. Now, I think that that is has to do with the fact that we have always been kind of a transitional city, right? People come in and come out. they're never sure if they're going to take a, you know, stay here a long time. We have very low inventory in very good rentals. So, the problem with rentals is there's some nice new rental buildings, but in general, when you rent, the product tends not to be as good. So, when there's something good, the prices get jacked up. and then the last thing is we probably are going to see some people who are on the fence about buying a second home pivot to renting because of the pieta tear tax. I think longterm the pediat tax is going to be okay, but whenever we have something new and jarring like this, it does affect the market for a bit.

40:55 >> What about like foreign buyers? I'm curious, have you been still seeing any foreign buyers trickling in or >> We do. We have a lot less and we don't have them from the same places that we used to have. I mean, we never get people from Russia anymore. We do have Asian buyers, but it's a lot less Chinese. It's more Korean, Taiwanese, Singaporean. and then we get a lot of people from South America. They often buy, you know, in Florida, but they also like New York.

41:20 but I would say in general, our money is domestic and a lot of money comes from California. A lot of money. >> Lisa, always good to see you. >> It's always good to see you, too. Thanks for joining. >> Enjoy the last few days of summer. >> Thank you. We will. Lisa Litman is real estate agent with Brown Harris Stevens. She joins us here in the Bloomberg Interactive Brokers Studio. This is the Bloomberg Business Week Daily podcast available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5:00 p.m. Eastern on Bloomberg.com, the iHeart Radio app, TuneIn, and the Bloomberg Business App.

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