Wealth Manager Stocks Sink as Traders Flee Next AI Casualty

22:21Carol Massar:But there has been a little slowing down of Phase B while we're in the process of securing new airlines to take gates. And so it really depends on the market you're in. I know you're aware of what's happening with Gateway. Yes. Huge concern for the construction community. You know, a loss of a thousand jobs on Friday and numerous consultants who were participating on that much needed critical, critical infrastructure. This is the 16 billion dollar Hudson River rail tunnel that's largely come to a halt due to the Trump administration's decision to freeze. It's funding. Is McKissick McKissick working on that at all?

23:09Is it involved with that?

23:11Carol Massar:No, we are not working on that project. We were on the original project when Governor Christie stopped the project. I know that's how long this has been. That's how long this has been going on. I don't need to tell Carol because she comes from New Jersey every day. Oh, my God. And New Jersey politics is always engaging. It is, but it raises a really important question, Cheryl, and that's about cities and the federal government working together. It's about private companies, family owned companies, large corporations working with cities and the federal government. That dynamic seems to have really shifted in the last year.

23:51And I'm curious about your view, because you work with with so many different agencies, state, local and federal, how you navigate an environment such as this.

24:02Carol Massar:Uh, well, you know, when you look at the complications of just building sheer building in New York City, you wonder how anything ever gets built. But what I have learned is by developing very good relationships with the building department, with the architects, the engineers, the politicians, the developers, everyone has to be on board because you don't ever know when you're going to need to contact one of those individuals to help push a project along. And I have seen that over my 35 years of building in New York City, that the relationships really matter. You don't know if it's going to be the fire department.

24:48Carol Massar:You don't know what it's going to be. It might even be the MTA, because the MTA, you know, is throughout the entire city. And if you build within a certain range of their property, then you have to involve them. And so it's just one of the most complex, complicated cities to build in in the world. What's interesting about construction right now? Is it, you know, I think about it's interesting. We're talking about the White House and the EPA and kind of getting ready to it feels like rollback. Things that have been so important to protecting climate and people's health in general. And so we've seen trends in buildings being cleaner, LEED certified, and so on and so forth.

25:35Carol Massar:But when you look at what's going on, what are the trends that you are seeing when it comes to construction right now? Well, definitely now we have the Climate Control Board and the Climate Control Goals that the governor would like to see in place. So we're definitely seeing more buildings come online that are all electric, which creates a whole nother problem all by itself, because where is all the electricity coming from? We are so close to capacity. You know, I think next year we're at capacity with all the electric vehicles, all the buildings, all the data centers. So what is that? What are the implications of that?

26:16Does that mean that we don't actually have the electricity that we need? Does it mean we see rolling blackouts? Does it mean we see people who have electric heat not being able to heat their homes in the winter?

26:28Carol Massar:Well, I think we've run into that already. You know, the grid just cannot support the supply. But those are two different things, right? One is grid resilience and the other one is actually electrical capacity. The power itself. The power itself. And you're saying we don't have the power, right? Yeah. I'm saying we need both. We need both. Yeah, I think this winter has proven that here in New York for sure. Yes. And so we're going to have to be innovative around that. If it's firing up old plants, you know, hydro, electricity, whatever it's going to take, because the demand is just so great. It's time to harness the sun at this point.

27:07Carol Massar:Like, no, it's just it's pretty, you know, we talk about the affordability issues. I mean, we were just talking at home last night about our electrical bills, like trying to understand. And we've done things, you know, energy efficient light bulbs and all that good stuff. And it's just crazy. Hey, before you go, I know already we're going to have to have you back. Your book, this book, The Black Family Who Built America. You are the fifth generation leader of your family owned and run firm, roots back to Tennessee, really family roots even further back here. Tell us why you wanted to write this.

27:41Carol Massar:Well, you know, I wanted to get this story out because it's extremely fascinating to have a black family that's in a very difficult profession of architecture and construction to make it to five generations. I mean, as we know, it's difficult to have a second generation is about 40 percent. Third generation is 18 and fourth generation is like three percent. So to make it to the fifth generation is an incredible feat. And so I also wanted to get out this book, especially during the time of erasure of black history. This book talks about another side of history that a lot of people don't know, because now the name of our book is The Black Family Who Built America.

28:28Carol Massar:But of course, we didn't build all the buildings in America, but black people had largely a big head in building a lot of the structures in America. And we're like the hidden figures. And it makes sense. I mean, you know, history and books follow money, power and authorship, right? Not necessarily labor. And we were the labor behind these buildings and structures. We weren't able to steal documents. And so although we could have been constructing and designing, we were pretty much forgotten. Stay with us. More from Bloomberg Businessweek Daily coming up after this. Support for the show comes from Public.

29:12Carol Massar:Lately, it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On Public, you can build a portfolio of stocks, options, bonds, crypto, without all the bugs or the confetti. Retirement accounts? Yep. High-yield cash? Yes again. They even have direct indexing. Public has modern design, powerful tools, and customer support that actually helps. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio.

29:51Carol Massar:That's public.com slash market.

30:09Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business?

30:26Carol Massar:My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive. Yeah. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology.

31:11It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

31:26Carol Massar:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

32:04Carol Massar:Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. 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. The EPA plans this week to repeal a policy that provides the legal foundation for a raft of rules regulating greenhouse gas emissions, marking President Trump's most consequential retreat from the fight against climate change.

32:53Some more details here. A move to scrap the Obama-era endangerment finding. It's a 2009 scientific determination that greenhouse gases endanger human health and welfare is expected as early as Wednesday. This is according to a person familiar with the details. That policy, though, underpins rules, including federal emission standards for cars and for trucks. It's just one of the many things that Mark Gongloff watches. He's an editor for Bloomberg Opinion who covers the climate. He joins us here in the Bloomberg Interactive Brokers Studio. So I want to talk about some of your recent columns. But first, we want to talk about this.

33:26The Trump administration has almost successfully dismantled, from what I've read, much of the work that has gone into having the EPA serve as sort of a stopgap against climate change. Yeah. An accurate assessment? Well, not yet. Not entirely yet. The goal of getting the EPA to undo what's called its endangerment finding is a long-term goal of a lot of conservatives who are now running the White House. It started back in 2007. There was a Supreme Court case where the Supreme Court said that the EPA was required to manage greenhouse gas, regulate greenhouse gas emissions. It's great. The EPA in 2009 under Obama said, we're going to do that.

34:12and where we find that greenhouse gas emissions are a danger to the economy, a danger to public health. So we're going to regulate it for that reason. Perfect. So then there were a series of other moments where the EPA said, yeah, we're still doing that, still doing that. But all along, people were trying to undermine that. There was that 2007 Supreme Court decision. One of the people who dissented on that was John Roberts. Now he has a 6-3 majority. And so the hope is that ultimately they will get to the Supreme Court where the Supreme Court will say, yeah, never mind, we're going to undo that.

34:45But for now, it's very illegal to do what the EPA is talking about doing because the Supreme Court has said this, that it's required for them to do this under the Clean Air Act of 1963. In 2022, we passed the IRA, which feels like 100 years ago now. But in the IRA, Congress, in its infinite wisdom, said the EPA has to regulate greenhouse gas emissions. And then under the one big, beautiful bill act, the Republicans who passed that didn't bother to overturn it then. So there's all this precedent, legal precedent that says EPA has to do this. And so that may be one of the reasons why they kind of softened it a bit.

35:20They did cut it down to just like vehicles and maybe some industry stuff. And they're leaving power plants alone, which, again, is a little bit of cognitive dissonance there. You can manage some emissions, but not others. Where do you draw the line? Yeah.

35:34Carol Massar:And, well, we can draw lines right around a coal plant or something and just say, it's just going to impact this environment. It's not going to get into the space. Right. You're being sarcastic. I had a lot of siblings, so I grew up on sarcasm. No, but, you know, what's interesting is I go back to ESG, environmental social governance. Like, if you really go to the core, it was like how these kinds of factors could impact a company, right, or an investment. and these are things to be thinking about, companies see the impact of climate change. And you get into your coverage nonstop. You talk about the U.S.

36:06Carol Massar:alone has taken$7 trillion, a$7 trillion hit from extreme weather in the past 12 years, making it twice as expensive as the Great Depression. There is a cost from flooding, from a higher earth, you know, from a hotter earth, I mean, in multiple ways. In multiple ways. It affects business. You know, a lot of this stuff, a lot of this deregulation is presented and sold as a way to cut electricity costs. And OK, fine. But you can't say that you're doing that while you're also making it difficult to build solar and wind, which is probably cheaper and easier to build than a lot of other stuff right now.

36:39Carol Massar:Wait, so this stuff is supposed to cut electricity costs by taking some of this away? Yeah, they're going to cut electricity costs. They're going to take this away. They're going to make it easier to burn fossil fuels. They're going to they're also going to do a big coal rollout tomorrow. They're going to try to, you know, put the heart paddles on coal again. I mean, it's still alive. It's still there. I mean, we could get into the pit here, but it is still alive. But it's in the ICU, but he's going to keep trying to bring it back, all in the name of lowering costs. But you're lowering those costs.

37:06You're only lowering some costs. You're doing away with a whole bunch of energy supply. At the same time, you're raising demand with all these data centers and stuff. And at the same time, as you say, these hits to the economy keep growing. And other central banks around the world realize that. Other governments around the world realize that. And so those costs are mounting. And there's health costs and economic costs, too. And both of these are making health insurance and home insurance much worse. And so this is a whole bunch of stuff that the EPA, the U.S. government has a big interest in that it's just going to wash its hands of.

37:44So that brings us to another recent column that you wrote, and it is about the recent cold snap that we're in or we're just coming out of the snowstorm two weeks ago and the effect on the economy in the United States of extreme weather. What is this in the context of an environment that many argue is one that experiences climate change, but then folks are coming out and saying, wait a second, it's so cold. Like the president, he said this recently. He said this 10 years ago. He said it recently. Wait a second. It's so cold. there is no global warming. Well, ironically enough, the senator that went on the floor of the Senate decades ago with a snowball and said, there's no climate change because I got a snowball.

38:21The woman to put the snowball in his hand is one of the people who wrote the EPA endangerment thing that's going out right now. So these are people who have been ideologues about this for decades, and they don't care about the science. And you can look at the chart and cold weather hasn't gotten worse or better over the past 20, 30 years. Some people say it could get worse because of the changes in the jet stream so you could get more polar vortexes. They haven't proven that yet. But what we can prove is that cold weather doesn't go away. It's still cold up there in the Arctic, cold enough to freeze pipes, dump a whole bunch of snow, wreck infrastructure, take lives.

38:58That cold snap took a lot of lives. And so you can't ignore that at the same time as you're all. You have to be able to do both. You have to be able to acknowledge that you're going to get all kinds of weather. The environment is just getting more chaotic. And some of it could be cold weather, But a lot of it, overall, we're getting hotter. So a lot of it is going to continue to be wildfires, floods, et cetera.

39:16Carol Massar:Hey, one of the things I was thinking about, Mark, and I think about California, who kind of just, you know, goes its own way when it comes to rules and regulations and often sets the path for the rest of the nation. So EPA can do this, right? But are states going to still do their own thing? I mean, they've got to think about attracting citizens who want to live in their state. And if the environment is crappy, they're not going to be able to do that. Totally. I mean, I think that may be one reason why some people have kind of pushed off on this EPA thing, because if the federal government says we're in charge of everything, then you can turn around and say, California, you can't manage emissions.

39:51The federal government's doing it. Right. And now that's not doing it anymore, so California can say, okay, we're going to manage emissions. And then there's another little weird thing there with, like, if you tell automakers, hey, don't worry, blow all the emissions out of your tailpipes that you want. They're not necessarily going to rush to do that because consumers don't want it. California probably doesn't want it.

40:09Carol Massar:It costs expensive things to retool, right? And how they make things. And then if you get somebody sort of a reality-based president or Congress coming in another four years, they may go back and say, hey, fix your emissions again. And so they're not in a rush to undo all this stuff. I think one challenge that people have is unless they've sort of seen this up close, whether they've lived through the Palisades fire or a flooding in Florida, they don't necessarily see the effects of this stuff. I'm wondering if that could change. We just spoke to Cheryl McKissick Daniel from McKissick and McKissick.

40:42And she said, you know, we're in a position in the United States where we think we're going to essentially run out of electricity or even the, you know, the grids are not being able to handle the demand that we're seeing in the coming years. Like, do we take it for granted, I think, in the United States that when you turn on a light, it goes on. People who from lots of other countries around the world who come to the United States are like, when I turn on my stove, there is not a flame there sometimes where I come from. And that's just the way life is. Is that a possibility here in the U.S.? Not, broadly speaking, that I can see in the immediate future.

41:14I mean, Puerto Rico is part of the U.S., and as Bad Bunny reminded us the other night, they have plenty of electricity problems. If you don't manage your infrastructure, you do get these kind of problems. And in some places, you will see that happen. Data center demand might not rise to the level we expect. We can do things more efficiently. And again, if Congress and the president were just working on energy efficiency, which they also don't want to do, then you could milk a whole lot more out of the fossil fuels, out of natural gas, and at least burn less of it in order to get more economic growth and more energy that you need.

41:47So there are plenty of things that we can do, plenty of levers that we can pull.

41:51Carol Massar:All right. So every time we talk with you about the environment and climate, and sometimes Tim and I are super depressed about it, and you're like, but wait a minute. You always have optimism. Do you still have optimism? I guess I have to in order to, you know, keep doing this every day. I do think, you know, you look around the world and you look even in the U.S. I mean, we canceled$35 billion in clean energy projects last year. But we saw some wind farm stuff go through, right? Quartz are letting wind farms go through. Stock and bond investors are investing in green infrastructure and the energy transition around the world.

42:26The demand keeps rising for this stuff, and it does feel like there is an energy to this that you can't push back against forever. The issue right now is the damage that can be done in the short term, but I think in the long term, the momentum is just too much to overcome.

42:41Carol Massar: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 5 p.m. 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.

43:11Carol Massar:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

43:50Carol Massar:Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at CINFIN.com. This podcast is brought to you by Wise, the smarter way to manage your money internationally. If you're getting a headache from juggling different currencies and different bank accounts in different countries, there's a better way to receive money in the currency you need without the slow transfer times or hidden fees.

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