Hoodwinked customers that the government is backing you up, too. I dont think so. Especially now that the housing seems to be on firmer footing, what better time to loosen the government constraints. That the freemarket decide state. Technique rarely if ever works. One thing that is clear, the role that government played for years magically propping things up, not releasing the system, gumming the system, and all but making housing not a goal of medan near our birthright. I commend the president for taking of the training wheels. The problem of the problem is he took off only one wheel. My father did that, but i just thought it was a cruel joke. Now made billions of it and getting off it. Always with uncanny timing. He sold off the bulk of his properties at the top of the realestate market in 2007, 39 billion. His Equity Residential realestate trust is one of his realestate investment vehicles. He invented them. Continues making money hand over fist buying of distressed property, turning now around, making money even faster. Revenue for those properties that the company is operating income of five percentage at the latest quarter and an operating income which is a good reflection on how well the properties were run and managed. Now close to six. So much to get into including another billionaire who established such media purchases with some insight and warning from them. You might want to cover your ears. Before we get to send a newspaperman, the realestate man. The president back to being a realistic man himself and sailing sitting realistic what began. What do you think . I think that fannie and freddie were originally created as a supplements to the Housing Market. And then as time went on it slowly became the Housing Market. And it became a government controlled entity. Juneau, whether it was, you know, the famous comment about keep dancing and barney frank, you know, doing the same thing with sub prime loans in the early 2000s. Basically that contributed to the issues. Neil the government was there as a backstop, protecting these things like figured house. Encouraging the very kind of activity. But the basic premise was that fannie and freddie were supposed to be independent, for profits. Neil but there were not. That is a problem. Therefore, if, in fact, the president goes through the party is talking about, i think that would be a very positive thing and would protect us in the future. Neil but you hear what he is talking about. He was talking about getting them out for mob of replacing them with something i guess kind len chandler. You argue there is nothing. I guess there is a proposal that two senators. Widen and corker where they, in effect, want fannie and freddie tested back. Neil within five years. And that every issuer assembler of mortgages would have to retain an interest in any mortgage that was securitized. Neil in other words, you cannot sell it again or repackage it. So this. That is really what happened, they cant pass in the paper and someone opened the can and they were rotten. Neil you think the government is to blame . Go back to the Community Reinvestment act where it went from a gold to darn near a birthright. We were pushing everyone to get homes. Every president likes to brag Home Ownership went up under my stewardship. Maybe we pushed too much. I think as you look at the statistics and go back to the end of world war ii, we have had a surplus in singlefamily housing every single time we have gone above 63 Home Ownership. This time you get to 69. That was higher than it had never been. Neil skip it back. I think it has a ways to go. Neil you are not buying this housing bill more whenever were calling it . I dont know the word boehner as appropriate. I am pretty much more in the cynical cant. Neil you see housing it is certainly not what it was. One analogy, it is off the map but not exactly off to the races. Neil well, the Housing Market, first of all, still has a couple million houses in purgatory, i. E. Not foreclose cannot resolve, kind of hanging out there. That is a lot of supply that has to work itself through the market. If you look at the concentration of acquisitions recently, use the enormous concentration of investors buying in certain selected markets which is having a positive impact. Neil down in phoenix where the president was today. I am sure that is not coincidental. What do you think a working through the inventory that was often forced levels. Youre saying were due for another dip . Im not suggesting we are due for another dip or meltdown. Neil what are you saying . I am just suggesting what i am hearing with reference to the singlefamily Housing Market i dont think will meet the test of time. And look, i mean, we just had another company go public this week. American home something, forensics is called. And is trading below offering. That is hardly a signal of some kind of a hot market. Neil you argue that in order to keep good time sustained you actually need good numbers, jobs, the court things that people from non today but still the same court believes keeping the economy going. And while joblessness is not what it was, it is still pretty bad. What does that mean for the economy, recovery, housing . I think you have to start with that state unemployment number we keep using which is the unemployment number of those people who claim that they are still looking for a job, but there is an equal number of ppople who plan may have stopped looking for a job. Neil you dont buy this. What do you think it is . Fifteen, 16. And that is a very real number. Everything comes down to a we all took economy 101. You walk to the class from the first day and on the wall is says supply and demand. The problem we have in america and around the world today is that theres a lot of supply and not enough demand. And we need to focus not on redistribution of wealth but on the creation of demand that ultimately is what will create better times for everybody, better jobs for everybody, and a Better Future for the entire country. Neil you have made money in good and bad markets alike. Your purview, commercial real estate, has been largely linked to what has been going on in this city. They just sold a couple of 90 million penthouses of essential part in a building going up. The properties, usually sell for cash. Commercial realestate is hot, hot, hot. Deasy that continuing or do you see that it is just a matter of time before it hiccups . I think that commercial real estate, first of all, your description of it is a little extreme. I do not think it has been so terrific. Neil it has been i was going to say it has really been terrific in new york city. Neil chicago. And in san francisco. A couple of other markets. But neil better than residential. That is like comparing leprosy cancer. If you look at the multifamily market, that has done extraordinarily well. People are still growing. Neil they love to rant. Well, you have to take into consideration the fact that there has been a change. I mean, as you mentioned, we all believe every day the price of your house went up. No one believes that anymore which raises the question with the next generation about what extent they really want to make a commitment. If you read what they write in the way they live it would suggest that they are less focused on commitment and more focused on enjoying their life. Neil youre right about that. You mentioned also, the new coming ipos in this arena that emerge and dont do well. A Real Estate Investment trust that would get knocked around for the fear that ben bernanke was going to the the tapering in Interest Rates would go up. What you think of that, that this is a promise for you . Well, i mean, real estate has as its gasoline capitol. And so obviously if Interest Rates are going to go it is going to be you are going to be affected. Neil what have you done to prepare the prepare . Number one, you start with, were you on the properties . What kind of properties are they . The Company Look LikeEquity Residential owns a collection of multifamily highrise properties that are just unmatched. And they did extraordinarily well through the downturn. Neil where are they . They are in basically 24 seven cities, highrise. Neil what is cdt . Kind of, you know, and close. That is where the ranchers want to live. And renters are basically white collar, a lot of single people. An amazing number of single people. Neil really . Yes,. Neil moving and by themselves . Just a population that has changed. Neil estimate has. Fifty years ago you had very few single people are relatively few. A lot more single people living. Neil im not as old as you. Thats true. Nobody is. Neil stick around. A lot more going on, including this. A frontpage cover on the Washington Post the release says it all. An icon gone scooped up by a billionaire businessman. Still unknown. But does he know what he is getting into . It turns out less to say that he has been there, done that and tell with a lot of grief. He is not going about journalists like me, but it is interesting what he thinks abouy my breed. Ioee after this. And 900 Million Dollars are changing hands online. Thats why hbuilt a new kind of server. One thats 80 smaller. Uses 89 less energy. And costs 77 less. Its called hp moonshot. And its giving the internet the room it needs to grow. This is gonna be big. Hp moonshot. Its time to build a better enterprise. Together. Big news, the founder of amazon is buying the Washington Post. The family has run the Washington Post for four generations, but that is coming to an end. A stunning announcement. Amazons Ceo Jeff Bezos is buying the Washington Post. The news was so big, and it was announced on the sticker on the Washington Post building. A sign of our changing world, news that a celebrated newspaper, the Washington Post, has been sold. A stunning and sudden sale of one of the nations most influential newspapers, the publisher of the Washington Post announced today it is selling the paper to jeff bezos. Neil we love to talk about ourselves, dont we . Anyway, the betting is that this billionaire is serious and wants in on newspapers because newspapers are cool. Maybe not the physical watching for which each is paid 250 million, but the online potential for which we are told is amazon billionaire apparently thinks the possibilities are endless. You are entering a whole other world. When he scooped up the tribune back in 2007 and took on the big names and i might mention big egos behind the likes of the Chicago Tribune and l. A. Times, he too thought that he could extract new savings and leverage even bigger assets from those wellknown brands. Things did not turn out that way, later filing for bankruptcy , but in retrospect he said i have a meltdown that no one even the brilliant investor himself could never have seen coming. Good to have you back on this. Jeff bezos, big plans, big hopes. What will happen . Well, i think to begin with if you were to compare my situation to his, i bought the Tribune Company as an Economic Investment. Now had a plan. I hope it will work. I it was totally economically driven. Neil very unusual. I dont want to go into everything. Basically with the values that existed at the time we thought that we had made significant opportunity to have neil will wear long . Within the first 30 Days NationalRetail Revenues dropped 30 . There is no bbsiness like that that can survive that kind of a drop. Continued. It was not just an aberration. That was the beginning of the dramatic change in the value of all of the newspapers. The boston globe sold for a billion three nl it sold for 70 million. Newsweek. Washington post. Everyone focused. They are not looking at the fact that there is also a bunch of other little papers and stuff that have value. He is really paying significantly less than the headline. But in the and think about what he just did. He just ran 16 different versions of everybody making this announcement. You would think we bombed hiroshima. This is a 250 million transaction. You made reference to my 39 billion transaction. I didnt get 20 anchors yelling about it. So that is the problem. Neil i did at the time. Let me ask you. One of the things you did not plan on running into, the economics notwithstanding, just the egos and a lot of journalists at the newspapers you but did not like you or some of the cuts you were envisioning of the fact that you are rallying around and saying we have to do something to fix this in my experience newspaper people arent has leased a greedy as anyone else and what did you mean by that . Well, you know, this illusion that they and lloyd bank finance doing gods work. And therefore if he is doing gods work he should get a pass on economic reality. He should get a pass when revenue goes down 30 instead of lowering the head count. He should maybe increase it. Neil how would you spend it . You are the boss, after all. Why didnt you go back there and say, whenever your pie in the sky box we are losing money when you are not getting it, and we have got to get it. The problem comes down to some great philosopher, i think it was confucius to said, never pick a fight with a guy who buys ink by the barrel. And so neil you on the barrel. That is what i thought. That is what jeff bezos thinks. What i found out and what he is going to find out is he does not neil that will turn on him . Probably not. Neil what did you do . I laid there until i got better. If you dont have a thick skin, i cant come and be on your program. Neil with all your other realestate holdings, were you saying, we have to change things, were losing money fast. Was a difference in telling those guys and journalists guys . With the journalists think theyre doing gods work. Therefore that is a different standard than where everyone is economically tied together. Neil did they think you were stupid american . Arrogant is a much better word. The difference between a newspaper person and an academic is small. Theyll both run in the same scenario of thinking that theyre doing after all, theyre very educated and have done well academically. Neil how many business courses . I know of any because as to my experience to have a lot of trouble adding and subtracting. Neil of the problems file was examining newspapers and editing that make money in those that do not. It is not hard and fast. Fox news is doing pretty well. The wall street journal is making money. Usa today, a counterpoint. I would not say a super conservative paper, not super liberal either, but revenue and subscription increasing. I like all of that and say, you know, fair and balanced, at least during the other side of balancing out the liberals think at least from the right. Seems to be a moneymaking or better than moneylosing proposition, but when faced with the same dynamics they wont change. I think you have to really make a distinction between something you cant compare Fox News Corporation to the new york times. Neil i think you can. In this respect. Try all points of view. From my point even the examples you made of positive return, if you look at how much the investments were, returns sunk. So basically the newspaper business. Neil you think newspapers are a whole other beast and to themselves and no matter how much things improve online you will need to get people to buy online, and very few still do. Thats correct. Neil when you explain that to your colleagues at the Chicago Tribune and at the l. A. Times and the greater Tribune Company, what to they say . You dont understand. In a, you need to understand how important this newspaper is. My answer was, if the newspaper was so important, why are more people buying it. Neil they said what . Not much. Neil as a body that to this day when i look at clippings on you, they hate you . I mean, you know, in many respects i really think that i am the little guy that pointed up and said the emperor had no clothes. All of a sudden really the tribune began the demise of the newspaper industry. It became obvious that it was not economically viable. Neil to be had to do it all over again. I think would have. Based upon the facts and of the time. We fisher got sideswipes. But the answer is i take risk for a living. Now have to be prepared. Neil why the guys like you do that . And of the investment and intrigue, but in your case i dont know you well enough to say this. For a lot of the guys who dabble in the san buy into media, its like a trophy project. I dont know. Its like buying a football team. Neil why . Ego, terrific, a sense of power, a sense of control, i own the to be an eye on the l. A. Times. So that neil did not get any good press from it. And on the first day as several have nothing to do with editorial policy. Neil did you decide to go the other way . If youre in a business that is shrinking very rapidly and inexplicably nobody is happy. I was not happy. Neil could your supporters of save the . It depends. Jeff bezos may view this as an investment. He is doing it for the good of the country and things that the Washington Post is a pillar of the intellectual community and maybe it is. Neil the thing to sell them thinking may you have to be liberal. You have to like a point of view. He calls himself a libertarian with a small al. He is a kind of in between libertarian and supports cam marriage, does not like surtaxes on the wealthy. So he kind of but his views, im they are not the views of the people writing the editorials in the Washington Post. Neil and he will find that out the hard way. It is unlikely they will change their views. Neil interesting. Hang in there, if you cant. So much we really dont know about jeff bezos. His people say, as i said, that he is libertarian. But if he is like other hightech, high and mighty, buying a platform to push a cause or using his share with 12 the way others are pushing theres an Immigration Reform . Whether he should be careful pushing causes becau