WEBVTT - We Won’t Get the Earnings Jolt Like in 2018 (Podcast) 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Panel podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.680 Along with my co host Lisa Brahma Waits. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor, find a Bloomberg penl podcast on Apple 0:00:15.520 --> 0:00:17.960 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:22.800 at Bloomberg dot com. People are talking about the big 0:00:22.920 --> 0:00:27.200 earnings recession. We have, of course, data, particularly having to 0:00:27.240 --> 0:00:29.159 do with the housing market in the United States, that 0:00:29.200 --> 0:00:32.400 has been weaker than some people would like to see. 0:00:32.440 --> 0:00:36.760 The question is does this indicate a broader slowdown or 0:00:36.960 --> 0:00:41.360 is this just a seasonal blip that will recover later 0:00:41.400 --> 0:00:43.279 in the year. Joining us now to talk about that, 0:00:43.320 --> 0:00:46.800 Matt Forrester b and y Melon's Lockwood chief investment Officer. 0:00:46.880 --> 0:00:49.280 Joining us here in our Bloomberg Intta Active Broker Studios. 0:00:49.320 --> 0:00:54.240 Matt Wonderful having here as all. So let's start there. 0:00:54.320 --> 0:00:57.480 It seems like stock markets are looking through a lot 0:00:57.520 --> 0:01:04.440 of the less positive data. Bond markets maybe not so much. Right, So, uh, 0:01:04.480 --> 0:01:07.080 we're markets are in this sort of hurry up and 0:01:07.160 --> 0:01:09.160 wait you a moment. I mean, I know you have 0:01:09.240 --> 0:01:10.880 small children. I know when I'm trying to get out 0:01:10.959 --> 0:01:13.440 the house, I've got they've got to go get their socks, 0:01:13.440 --> 0:01:16.520 they get their shoes, if you get their coat. Markets 0:01:16.520 --> 0:01:20.039 are markets are, you know, are worried about these things. 0:01:20.040 --> 0:01:23.440 But we're waiting for decisions around China and whether g 0:01:23.600 --> 0:01:25.360 and Trump are going to come to an agreement and 0:01:25.400 --> 0:01:29.200 how substance that agreement will be. We're waiting for a 0:01:29.240 --> 0:01:33.080 deal on Brexit. We're waiting on a deal in North Korea. UM. 0:01:33.400 --> 0:01:36.160 We're waiting on the FOMC next week. We're waiting for 0:01:36.200 --> 0:01:38.080 a mule of report. There's all kinds of things that 0:01:38.120 --> 0:01:41.000 markets are thinking about, UM, and I think one of 0:01:41.040 --> 0:01:44.119 the most interesting ones is whether or not we're that's 0:01:44.160 --> 0:01:46.560 how we're assessing this data that's coming out of the 0:01:46.640 --> 0:01:50.200 first quarter. And you know what these things look like. 0:01:50.600 --> 0:01:54.840 So we've seen seasonality. One of your economists wrote about 0:01:54.840 --> 0:01:56.960 this in a March fourth piece. A couple of weeks ago, 0:01:57.000 --> 0:02:00.639 Elena Siltate wrote about, Yeah, so let a road about 0:02:00.680 --> 0:02:05.559 how UM the US GDP data is showing this residual 0:02:05.640 --> 0:02:08.840 seasonality and sort of a data artifact that seems to 0:02:08.880 --> 0:02:13.640 have been with us from almost the recession period, the 0:02:13.639 --> 0:02:17.919 Great Recession, and we're also seeing that in corporate earning statements. 0:02:17.919 --> 0:02:20.440 So if you look at analysts estimates of what's going 0:02:20.440 --> 0:02:24.079 to occur, so every first quarter, with the exception of 0:02:24.480 --> 0:02:27.480 eighteen where we're reacting to a tax cut, for the 0:02:27.560 --> 0:02:30.440 last number of years, we've seen first quarter tad a 0:02:30.560 --> 0:02:33.080 really weaken up in terms of analysts expectations for what 0:02:33.120 --> 0:02:35.799 we're gonna happen, and then as the year went forward, 0:02:35.960 --> 0:02:38.239 we had, you know, pickups in that as the year 0:02:38.280 --> 0:02:41.079 went on. So I think those are really interesting and 0:02:41.120 --> 0:02:44.000 it seems to me like markets are looking through a 0:02:44.040 --> 0:02:46.480 lot of these things, and of course they're probably also 0:02:46.560 --> 0:02:51.480 expecting relatively positive results from some of these bigger issues 0:02:51.560 --> 0:02:54.560 they're facing. The trade deal, for example, I think we've 0:02:54.560 --> 0:02:57.919 priced in some amount of eventual deal that we think 0:02:57.919 --> 0:03:00.320 we might get. Whether that's a month or two months, knows, 0:03:00.440 --> 0:03:03.160 but um, it looks like the markets are thinking rather 0:03:03.240 --> 0:03:07.760 positively about how these will eventually have outcomes in for markets. 0:03:07.760 --> 0:03:11.840 So going forward into the second quarter, just to begin there, um, 0:03:12.639 --> 0:03:17.520 looking through seasonality is great when the trend continues to hold, 0:03:17.840 --> 0:03:21.200 So essentially markets hoping that this trend continues. As we 0:03:21.240 --> 0:03:23.960 approach the second quarter, second half of the year, things 0:03:24.000 --> 0:03:26.840 will resume pick up again, even without like the tax 0:03:26.840 --> 0:03:29.399 cuts we had in two thousand eighteen, and and markets 0:03:29.400 --> 0:03:32.360 will again really right. So I think we you know, 0:03:32.400 --> 0:03:35.120 as you look throughout the year, it's clear that analysts 0:03:35.200 --> 0:03:38.680 estimates are rising as the year progresses. We're also seeing 0:03:38.680 --> 0:03:41.040 relatively strong top line growth. So we had almost six 0:03:41.080 --> 0:03:43.760 percent in a revenue growth in the SMP five for 0:03:43.800 --> 0:03:46.680 the fourth quarter. So some of this does seem to 0:03:46.720 --> 0:03:49.600 be some amount of earnings estimates. It was pretty clear 0:03:49.600 --> 0:03:51.440 that you could see we were not going to get 0:03:51.640 --> 0:03:55.080 the type of earnings jolt that we got from ten. 0:03:55.120 --> 0:03:58.360 That would be crazy to expect that again. Um, and 0:03:58.440 --> 0:04:01.120 we've also had twenty dollars about off with w t I. 0:04:01.240 --> 0:04:05.040 So remember what we went through this a little bit ine. 0:04:05.120 --> 0:04:08.080 We had a much bigger decline in energy prices, but 0:04:08.600 --> 0:04:11.560 the energy component of the SP five and earnings is 0:04:11.600 --> 0:04:14.320 also declining, you know, and that's enough to cause you know, 0:04:14.360 --> 0:04:17.760 a temporary slowdown in the earnings estimates. I have to wonder, Okay, 0:04:17.800 --> 0:04:19.880 so you're talking about the equity markets looking through some 0:04:19.920 --> 0:04:22.760 of the weaker than expected data, holding in. That's why 0:04:22.800 --> 0:04:26.440 we're seeing this rally that is continuing. My question is 0:04:26.760 --> 0:04:29.040 where do bonds fit into that picture, given the fact 0:04:29.040 --> 0:04:32.120 that yields are now retracing any gains that we saw 0:04:32.160 --> 0:04:35.680 in and you have some people saying that the federal 0:04:35.720 --> 0:04:38.600 reserves next move will be a rate cut. Do you 0:04:38.640 --> 0:04:40.960 think they are wrong? Do you think that stocks are 0:04:41.040 --> 0:04:43.720 right and bonds are wrong? Right now? Um? Yes, so 0:04:43.839 --> 0:04:46.400 I I think that's still up in the card. So 0:04:46.520 --> 0:04:48.440 I think the question for us has been whether or 0:04:48.440 --> 0:04:51.960 not the FED is actually changing policy or whether they're 0:04:52.000 --> 0:04:56.440 changing communications strategy. The policy of being patient really hasn't 0:04:56.520 --> 0:04:59.440 changed very much. The question is when is the FED 0:04:59.480 --> 0:05:02.240 going to be in aition again and will that actually 0:05:02.279 --> 0:05:04.800 occur in this cycle? And I think that's still relatively 0:05:04.800 --> 0:05:07.839 an open question. Again, we're waiting, like the FED in 0:05:07.880 --> 0:05:10.080 this data dependent mode, and I don't think we're gonna 0:05:10.160 --> 0:05:12.440 know for a while. And I think the FED is 0:05:12.560 --> 0:05:17.360 very aware of these data seasonality, data artifacts from UH 0:05:17.440 --> 0:05:19.640 from the crisis and these last number of years, and 0:05:19.680 --> 0:05:23.280 so they may take more time to assess whether or 0:05:23.320 --> 0:05:26.400 not they're actually going to change policy at all. And 0:05:26.520 --> 0:05:29.840 like always, you have to watch what the central banks do, uh, 0:05:29.880 --> 0:05:32.560 and not what they say, you know, so you can 0:05:32.600 --> 0:05:34.840 listen to them, but they're talking about a lot of 0:05:34.880 --> 0:05:38.479 things that are helping them support markets and policy. Uh, 0:05:38.760 --> 0:05:40.600 you know, the questions about how they're going to deal 0:05:40.640 --> 0:05:43.160 with the balance sheet, how they might deal with an 0:05:43.200 --> 0:05:46.359 inflation target going forward. All this is news to the 0:05:46.400 --> 0:05:50.360 market because it sounds like there could be additional stimulus 0:05:50.360 --> 0:05:52.320 coming to the markets at some point in time, and 0:05:52.320 --> 0:05:55.120 they like that. Um, but uh, you know, you have 0:05:55.200 --> 0:05:58.280 to watch again what they're actually doing and what policies 0:05:58.279 --> 0:06:00.280 are actually being implemented in that has an Then do 0:06:00.680 --> 0:06:02.880 you think that like markets are looking for additional stimulus 0:06:02.920 --> 0:06:04.839 of the day to get strong, we could actually see 0:06:04.839 --> 0:06:07.880 the other side. They flipped very quickly from hawk to dovish, 0:06:07.880 --> 0:06:10.920 if you will. If they flip in that same sort 0:06:10.920 --> 0:06:13.080 of pattern again, if the data really comes in strong, 0:06:13.560 --> 0:06:15.360 bad news for markets. I agree that's gonna be a 0:06:15.440 --> 0:06:18.040 risk for for equity markets if we get into that place. 0:06:18.080 --> 0:06:19.920 And the question again would be how many I mean, 0:06:19.960 --> 0:06:22.000 if it's a rate hike or two, which I think 0:06:22.000 --> 0:06:24.760 would be the kind of consensus estimate or where we're 0:06:24.800 --> 0:06:27.279 going now. I mean that I mean one later in 0:06:28.080 --> 0:06:30.960 maybe one. I don't know that that's a giant deal, 0:06:31.800 --> 0:06:34.880 but I think the overall question of whether the fete 0:06:34.960 --> 0:06:36.560 is actually done here is going to be a real 0:06:36.640 --> 0:06:39.720 question as we go forward. In Matt Forrester, we love 0:06:39.760 --> 0:06:42.120 having you, Thank you so much for being here. Matt 0:06:42.200 --> 0:06:46.680 Forrester is at B and Y Melon's Lockwood, chief investment officer, 0:06:46.800 --> 0:06:50.960 talking about that weaker data that frankly stock investors are 0:06:51.040 --> 0:07:09.640 looking through. Lisa Abram woids here. Paul Sweeney, my coast 0:07:09.640 --> 0:07:12.800 and colleague off today. I am joined by the great 0:07:12.880 --> 0:07:18.880 Vince Signarella, a resident trader, storyteller and extraordinary market watcher 0:07:19.000 --> 0:07:22.680 here at Bloomberg LP very much onto the forefront of 0:07:22.680 --> 0:07:26.000 people's minds. This week has been Boeing shares down another 0:07:26.040 --> 0:07:28.240 one and a half percent after the f a A 0:07:28.520 --> 0:07:31.160 joined in with all of the other nations around the 0:07:31.200 --> 0:07:35.239 world that have ordered a stop to the seven thirty 0:07:35.320 --> 0:07:39.520 seven Max jet and saying to Boeing, you know, honestly, no, 0:07:39.720 --> 0:07:41.520 these needs to be taken out a circulation while we 0:07:41.560 --> 0:07:45.680 figure out what to do about the problem. Joining us 0:07:45.680 --> 0:07:49.400 now Benedict Cambell. He is Bloomberg Senior editor covering company 0:07:49.480 --> 0:07:52.160 news and Benedict, can you just give us the latest 0:07:52.200 --> 0:07:55.680 with respect to the investigation into the second fatal crash 0:07:55.880 --> 0:07:58.480 of the seventh thirty seven jet. So there is a 0:07:58.480 --> 0:08:00.720 picture that is emerging thanks to some of the data 0:08:00.760 --> 0:08:05.200 that's becoming available. In principle, we now have the black boxes, 0:08:05.760 --> 0:08:08.120 the flight record and the and the UM and the 0:08:08.200 --> 0:08:11.320 voice recorder that are in Paris being read out. We 0:08:11.360 --> 0:08:13.680 don't have the results of those yet, but that will 0:08:13.760 --> 0:08:17.160 give us arguably the most conclusive evidence. But we have 0:08:17.520 --> 0:08:20.280 a couple of other pieces that are starting to put 0:08:20.320 --> 0:08:25.480 together a picture. We heard overnight that authorities on the ground, 0:08:25.760 --> 0:08:28.560 the sort of such and rescued recovery crew on the 0:08:28.600 --> 0:08:32.840 ground found a small device essentially no bigger than a screw. 0:08:33.240 --> 0:08:36.120 But it was an interesting component because it showed that 0:08:36.200 --> 0:08:39.560 the trim on the plane had been raised to lower 0:08:39.600 --> 0:08:42.280 the plane's nose, and that showed that it was actually 0:08:42.320 --> 0:08:45.559 at the wrong angle. Again note of caution, this is 0:08:45.600 --> 0:08:48.160 a plane that came down an incredibly high speeds, so 0:08:48.200 --> 0:08:52.480 it could have been somehow caused by the impact. But 0:08:52.600 --> 0:08:54.920 again that is one piece of evidence that shows that 0:08:55.400 --> 0:08:58.800 principally everything went wrong with this flight. Very early on, 0:08:58.840 --> 0:09:01.000 there was a report over night as well that a 0:09:01.160 --> 0:09:04.679 panicky voice from the cockpit showed that the pilot struggled 0:09:04.720 --> 0:09:07.360 to keep the plane under control. So there is this picture, 0:09:07.400 --> 0:09:11.000 as I said, emerging of a of a trip that 0:09:11.280 --> 0:09:14.480 really went horribly wrong early on, and that is part 0:09:14.520 --> 0:09:16.720 of the evidence that prompted the f a A to 0:09:16.800 --> 0:09:21.160 finally respond late this week. Benedict, does this take um 0:09:21.280 --> 0:09:23.160 or is this part of the story or does this 0:09:23.240 --> 0:09:26.720 take the software conversation off the table? Are they moving 0:09:26.720 --> 0:09:28.800 in a different direction. I don't think it takes the 0:09:28.840 --> 0:09:31.719 software conversation off the table. Just to remind people, there 0:09:31.800 --> 0:09:34.760 is that piece of software in this plane that helps 0:09:34.840 --> 0:09:38.319 stabilize the aircraft. Has to do with the new engines 0:09:38.360 --> 0:09:41.200 on the plane that are slightly bigger, slightly heavy, and 0:09:41.240 --> 0:09:43.680 that changed sort of the the center of gravity of 0:09:43.679 --> 0:09:46.240 the jets. So to counter that, they introduced the software. 0:09:46.520 --> 0:09:49.239 But there seems to be a case where the software 0:09:49.440 --> 0:09:52.480 and the pilot didn't sort of interact perfectly. So this 0:09:52.559 --> 0:09:55.400 is still something that is being investigated at the moment, 0:09:55.640 --> 0:09:59.640 certainly not off the table. Whatever happens. Boeing has a 0:09:59.800 --> 0:10:02.280 very a keen interest in finding as much evidence as 0:10:02.360 --> 0:10:04.640 quickly as possible, because the last thing they want is 0:10:04.720 --> 0:10:08.200 some sort of inconclusive evidence or no evidence whatsoever, and 0:10:08.240 --> 0:10:11.360 that's where the flight recorder will be helpful. We have 0:10:11.440 --> 0:10:14.840 a first image of this flight recorder. It looks badly mangled, 0:10:15.080 --> 0:10:19.559 but broadly intact. These are very sort of fortified UM 0:10:19.720 --> 0:10:22.800 devices and hopefully the b e A, which is the 0:10:22.840 --> 0:10:25.400 French authority, they will be able to give a read out. 0:10:25.640 --> 0:10:29.080 They've managed to do this under very difficult circumstances of 0:10:29.360 --> 0:10:32.559 recorders that have been submerged in some cases for years, 0:10:32.800 --> 0:10:34.760 and they still manage to get the full data. So 0:10:35.040 --> 0:10:36.719 hopes so high they'll be able to do the same 0:10:36.720 --> 0:10:40.760 thing here Benedict twenty Here, I'm just wondering, have Airbus 0:10:40.880 --> 0:10:45.280 and the big Chinese aircraft manufacturer have they really been 0:10:45.320 --> 0:10:48.840 aggressively trying to pursue business and get away, uh some 0:10:48.840 --> 0:10:52.240 some sort of competitive advantage from Boeing here. The short 0:10:52.280 --> 0:10:55.360 answer is no, aggressive is probably not sort of what 0:10:55.400 --> 0:10:56.800 they're trying to be right now. There's sort of this 0:10:56.920 --> 0:10:59.240 unwritten rule in aviation that if if there is a 0:10:59.280 --> 0:11:03.000 tragedy on on one company, the others try to sort 0:11:03.000 --> 0:11:06.760 of keep a very low profile UM. But you can 0:11:06.840 --> 0:11:10.520 imagine that behind the scenes they will probably start to 0:11:10.520 --> 0:11:13.520 position themselves. We have had some airlines say we're not 0:11:13.559 --> 0:11:16.040 sure about this order book anymore. How they will wiggle 0:11:16.040 --> 0:11:18.760 out of it as another question, but that might potentially 0:11:18.800 --> 0:11:21.760 open some business for US and the Chinese, which will 0:11:21.880 --> 0:11:24.640 create a very interesting dynamic. Benedict Cambell, thank you so 0:11:24.720 --> 0:11:27.840 much for being with us. Benedicto Cambell, Senior Bloomberg Senior 0:11:27.920 --> 0:11:32.080 editor for Company News, joining us with Boeing shares down 0:11:32.160 --> 0:11:49.959 one and a half percent, Lisa brom woids here. Vince 0:11:50.000 --> 0:11:53.360 Signarella joining me today. Paul Sweeney is on a well 0:11:53.400 --> 0:11:58.000 deserved vacation. The pound is gaining a little of versus 0:11:58.040 --> 0:12:01.920 the dollar today after sinking yesterday. It has been Brexit week, 0:12:02.160 --> 0:12:05.439 and joining us to discuss is none other than Marian Harkin, 0:12:05.520 --> 0:12:10.080 a European Union parliament member representing Ireland. UH. She joins 0:12:10.160 --> 0:12:13.440 us here in our Bloombergadder Active Broker Studios in New York. Marian, 0:12:13.640 --> 0:12:15.640 thank you so much for being with us here today. 0:12:15.720 --> 0:12:19.680 To be here happy Patrick's today. UM, I wanted to 0:12:19.720 --> 0:12:23.240 start with why is it so difficult for Teresa May 0:12:23.280 --> 0:12:27.200 to get through her plan? Well? The withdrawal agreement has 0:12:27.280 --> 0:12:32.640 three parts, citizens rights, the divorce settlement, the money and 0:12:32.720 --> 0:12:35.960 the big issue, the Irish backstop. Now what is the 0:12:36.000 --> 0:12:41.920 Irish backstop? The Irish backstop? It's that the all of 0:12:42.000 --> 0:12:47.199 the UK, including Northern Ireland, would remain in a customs 0:12:47.360 --> 0:12:52.720 union with the EU, but that furthermore, the North violent 0:12:53.160 --> 0:12:59.800 would have regulatory alignment with the South. So that me 0:13:01.240 --> 0:13:04.520 that that will be in place until a trade deal 0:13:05.080 --> 0:13:09.760 is done, which would negage the need for any such agreement. 0:13:10.040 --> 0:13:13.520 But of course what the British are afraid of is 0:13:13.559 --> 0:13:17.080 that maybe that trade deal won't be done, maybe it 0:13:17.160 --> 0:13:20.880 won't be sufficient, that the backstop will never be needed. 0:13:21.000 --> 0:13:24.880 The backstop is merely an insurance policy. Nobody wants to 0:13:24.960 --> 0:13:28.840 use it, not the EU, not the UK, not Ireland, 0:13:29.080 --> 0:13:33.679 but it's there to preserve the Good Friday Agreement and 0:13:33.880 --> 0:13:37.320 no hardening of the arch border. And that's the difficulty 0:13:37.400 --> 0:13:41.040 Trees and May has. But as you say, it's in 0:13:41.440 --> 0:13:45.560 everyone's best interest to get a trade deal through. It 0:13:45.600 --> 0:13:48.560 seems unrealistic that the backs that would be there indefinitely 0:13:48.640 --> 0:13:51.680 that that this, It seems that the fear of never 0:13:51.760 --> 0:13:54.560 having a trade deal, or or an acceptable trade deal 0:13:54.960 --> 0:13:59.920 is superfluous. I mean, I agree. Now, a trade deal 0:14:00.160 --> 0:14:03.439 is never easy and it takes time, and that's one 0:14:03.440 --> 0:14:07.600 of the issues because the withdrawal agreement is in place 0:14:07.840 --> 0:14:11.720 until the end of December, so it's not a lot 0:14:11.760 --> 0:14:14.160 of time. But of course there could be an extension 0:14:14.440 --> 0:14:17.280 if it's needed. But there is this fear that it 0:14:17.360 --> 0:14:21.400 may not be sufficient. But everybody is intent on ensuring 0:14:21.880 --> 0:14:26.800 it's sufficient. But these things are never simple, and therefore 0:14:27.160 --> 0:14:30.480 many of the hard Brexiteers do not want to find 0:14:30.520 --> 0:14:35.520 themselves in this position. Are we closer today to a 0:14:35.840 --> 0:14:38.600 second referendum on Brexit than we were a week ago? 0:14:40.040 --> 0:14:43.800 I don't think so, and I'll tell you why. I 0:14:43.840 --> 0:14:48.440 think Theresa May might just get her deal true next week. 0:14:48.720 --> 0:14:52.640 I think there's a real possibility there because people's backs 0:14:52.680 --> 0:14:57.680 are to the wall a second referendum. Labor is will 0:14:57.720 --> 0:15:01.080 he won't he want a yes another day No? And 0:15:01.320 --> 0:15:06.560 instinctively Jeremy Corbyn does not want a second referendum. He's 0:15:06.600 --> 0:15:11.760 a Brexit here really. So there's the Conservatives are split 0:15:12.160 --> 0:15:14.760 and it's I think it's going to be very difficult, 0:15:14.880 --> 0:15:18.480 if not impossible, to get sufficient people in the House 0:15:18.520 --> 0:15:21.000 of Commons to vote for that. A lot of people 0:15:21.040 --> 0:15:24.560 want it, but we're not looking at a majority. And 0:15:25.200 --> 0:15:28.600 to me, the best chance at this stage is that 0:15:28.720 --> 0:15:32.880 May's deal might squeak at next week, So walk us 0:15:32.880 --> 0:15:35.880 through that a little bit, suppose, and then that's penciled 0:15:35.920 --> 0:15:38.120 in for Tuesday. I should save this vote. If the 0:15:38.200 --> 0:15:40.600 vote gets through, if you go third times a charm 0:15:41.080 --> 0:15:44.640 and gets her deal through, what's the next step, Well, 0:15:44.920 --> 0:15:49.440 just how I should get through the Attorney General Jeffrey Cox, 0:15:49.680 --> 0:15:53.920 whose advice really led to her deal in thrown out 0:15:54.160 --> 0:15:58.680 this week, is looking at it again. The d u 0:15:58.760 --> 0:16:02.800 P I believe are around London this weekend. A lot 0:16:02.880 --> 0:16:05.960 of people are talking and remember this the heart Brexit 0:16:06.040 --> 0:16:11.000 hears know that if May's deal is not accepted next 0:16:11.040 --> 0:16:17.080 week then they are looking at perhaps an indefinite suspension 0:16:17.320 --> 0:16:21.600 of Article fifty, and that's the last thing they want. 0:16:22.080 --> 0:16:26.520 They may be prepared to accept this brexit. It's not 0:16:26.720 --> 0:16:29.760 what they want, but it might be the least worst option. 0:16:30.120 --> 0:16:32.800 And people's backs are to the wall on this, and 0:16:33.080 --> 0:16:37.040 for those who really want Brexit, this may be their 0:16:37.120 --> 0:16:41.160 last opportunity to guarantee it, so they might take it 0:16:41.480 --> 0:16:44.360 despite the fact that they have said time and time 0:16:44.400 --> 0:16:47.240 again it's not acceptable right now. Do you get the 0:16:47.320 --> 0:16:50.360 sense that Brussels that the European Commission wants to be 0:16:50.400 --> 0:16:53.120 dealing with Theresa May and only Theresa May, and not 0:16:53.240 --> 0:16:59.320 a potential successor here? I think so, um, I think Brussels. 0:16:59.600 --> 0:17:03.080 I was air this week in Strasbourg. A lot of 0:17:04.359 --> 0:17:08.440 speeches were made and people were putting their positions forward. 0:17:08.760 --> 0:17:13.400 There's a certain level of impatience that's probably heading towards frustration, 0:17:13.760 --> 0:17:17.159 but nonetheless there's a lid on't and I think people 0:17:17.320 --> 0:17:21.399 still hope that Treesa May can finally do this. But 0:17:22.080 --> 0:17:26.240 Barney was very clear this week he said the negotiations 0:17:26.240 --> 0:17:30.919 are over, it's done, and talking about any extension of 0:17:30.960 --> 0:17:34.640 the deal again, it was very clear from senior figures 0:17:34.640 --> 0:17:40.000 that only if the British have a plan will the 0:17:40.080 --> 0:17:45.400 EU consider an extension. But perhaps to me, the statement 0:17:45.480 --> 0:17:49.080 from the European Commission that really says where it's at 0:17:49.119 --> 0:17:53.040 at the moment is this, And they've said there are 0:17:53.080 --> 0:17:57.320 two ways for the UK to leave the European Union, 0:17:58.040 --> 0:18:02.119 with a deal or with actually deal. The European Commission 0:18:02.440 --> 0:18:05.760 is ready for either. So that tells you where the 0:18:05.800 --> 0:18:08.600 EU is at at the moment. So the EU is 0:18:08.720 --> 0:18:11.399 very prepared for a hard Brexit if if this deal 0:18:11.720 --> 0:18:14.520 perhaps should fall by the way side. Look, nobody can 0:18:14.560 --> 0:18:17.760 be prepared for a hard Brexit as such. I mean 0:18:17.840 --> 0:18:20.240 this week, for example, we put through a lot of 0:18:20.280 --> 0:18:25.160 contingency legislation. I put through legislation on the fact that 0:18:25.320 --> 0:18:28.480 if people have moved from the UK to Europe or 0:18:28.560 --> 0:18:33.080 vice versa, that their social security coordination is in order 0:18:33.359 --> 0:18:37.880 that citizens won't close out. There was contingency legislation put 0:18:37.960 --> 0:18:43.960 through on aviation, on many many other issues. But that's 0:18:44.160 --> 0:18:48.840 that's bottom that's bottom line stuff that is not anything extra, 0:18:49.119 --> 0:18:55.160 and definitely business and markets would react with horror if 0:18:55.480 --> 0:18:58.399 if there was a hard Brexit. So we're as prepared 0:18:58.440 --> 0:19:01.360 as we can be. Arian Harkin, thank you so much 0:19:01.359 --> 0:19:04.440 for being with us, and again, happy St Patrick's Day. 0:19:04.640 --> 0:19:06.640 I imagine that your trip here will be a bit 0:19:06.640 --> 0:19:10.080 of a reprieve from the Brexit experience, if not for 0:19:10.200 --> 0:19:12.720 just maybe a couple of hours. Yes, at least you 0:19:12.720 --> 0:19:14.800 can talk to taxi drivers here and they don't talk 0:19:14.880 --> 0:19:18.159 ramatically ask you about Brexitt. We're trying to change that. 0:19:18.400 --> 0:19:22.639 Marian Harkin, European Union Parliament member representing Ireland. Joining us 0:19:22.640 --> 0:19:29.520 here in our eleven three OH studios in New York, 0:19:39.560 --> 0:19:42.919 the tragedy in New Zealand has rocked the world. At 0:19:42.960 --> 0:19:47.600 least forty nine people massacred at a mosque by a 0:19:47.680 --> 0:19:53.120 gunman with extreme views, white supremacist views. Of course, this 0:19:53.200 --> 0:19:57.320 is absolutely a humanitarian tragedy. There is a business side 0:19:57.320 --> 0:19:59.000 to it. We are going to dig into it. There 0:19:59.080 --> 0:20:02.679 is no good transition and from human tragedy to the 0:20:02.800 --> 0:20:06.200 business base case. And yet we do want to focus 0:20:06.320 --> 0:20:10.639 on Facebook and its role as the perpetrator live streamed 0:20:11.040 --> 0:20:16.720 this horrible tragedy on Facebook and YouTube. Facebook shares down 0:20:16.840 --> 0:20:19.560 nearly three percent. Joining us here in our eleven three 0:20:19.560 --> 0:20:21.919 OH Studios is Garrett to Vank, who covers technology for 0:20:22.000 --> 0:20:24.639 us at Bloomberg. Garrett, can you give us a sense 0:20:24.720 --> 0:20:27.320 of how much of Facebook's share decline is due to 0:20:28.119 --> 0:20:33.120 their ability or lack thereof, of monitoring and quickly responding 0:20:33.200 --> 0:20:36.520 to something as horrific as this versus some of the 0:20:36.520 --> 0:20:39.320 turnover that we've seen just into the upper management there. Yeah, 0:20:39.320 --> 0:20:41.480 I mean, I think when you're seen with attacks such 0:20:41.480 --> 0:20:44.160 as this one, I mean Facebook, YouTube, other Internet platforms, 0:20:44.160 --> 0:20:47.919 they're intrinsically part of how these things happen nowadays. This 0:20:48.200 --> 0:20:51.080 attacker clearly had what you know, what is probably best 0:20:51.119 --> 0:20:54.880 called a social media's outreach strategy, right They had been 0:20:54.880 --> 0:20:57.399 posting a little bit on Twitter hinting about some of 0:20:57.440 --> 0:20:59.840 these actions, and then when they went out and did it, 0:21:00.040 --> 0:21:02.400 they went and posted in certain you know, alt right, 0:21:02.520 --> 0:21:05.159 far right communities around the world to sort of, you know, 0:21:05.520 --> 0:21:09.280 gain traction, gain support. There was a manifesto that very 0:21:09.280 --> 0:21:12.120 clearly was focused on, you know, had had a lot 0:21:12.119 --> 0:21:14.800 of information to sort of you know, get out there 0:21:15.080 --> 0:21:17.040 for people to kind of be talking about it, to 0:21:17.080 --> 0:21:20.160 be sharing these ideas and memes, trying to analyze them. 0:21:20.160 --> 0:21:22.560 That's the whole point of what happened here. And then 0:21:22.600 --> 0:21:24.159 at the end of the day when they actually went 0:21:24.240 --> 0:21:27.119 to do the attack, they went live on Facebook. And 0:21:27.160 --> 0:21:29.240 so I think the share reaction is because there might 0:21:29.240 --> 0:21:31.919 be some concern from the investor community that you know, 0:21:32.000 --> 0:21:35.760 either through regulation or through self regulation, the companies will 0:21:35.800 --> 0:21:38.640 stop allowing live streaming, which is a product that they 0:21:38.840 --> 0:21:40.640 have had for a couple of years now and has 0:21:40.680 --> 0:21:43.480 been you know, a big sorce of engagement and and 0:21:43.480 --> 0:21:47.760 and and from Facebook's perspective important part of future growth. 0:21:48.560 --> 0:21:50.560 You mentioned regulation. I mean this has been a big 0:21:50.560 --> 0:21:54.840 push for some presidential candidates, Elizabeth Warrant specifically wanting to 0:21:55.040 --> 0:21:57.680 break up some technology companies. You see, Yes, you think 0:21:57.680 --> 0:22:00.560 you see a spillover from this from Facebook into other 0:22:00.720 --> 0:22:03.080 other places of technology. Yeah, And I want to I 0:22:03.119 --> 0:22:04.760 know we're talking about Facebook, but I do want to 0:22:04.760 --> 0:22:07.920 say that, you know, YouTube also is a big part 0:22:07.920 --> 0:22:10.720 of what happened here. Because the video was live on Facebook, 0:22:10.960 --> 0:22:13.600 it was quickly taken down, you know, not immediately, but 0:22:13.680 --> 0:22:16.639 still quite quickly, I think after about seventeen or eighteen 0:22:16.640 --> 0:22:19.000 minutes or so, but it had been recorded by other 0:22:19.040 --> 0:22:21.880 people and then started being reposted on YouTube, and so 0:22:22.400 --> 0:22:25.480 YouTube is kind of the distribution method for a lot 0:22:25.480 --> 0:22:27.920 of this content. When it comes to regulation, I mean 0:22:27.960 --> 0:22:30.040 I have to sort of say that as a reporter 0:22:30.160 --> 0:22:31.520 covering this for the last couple of years, I've become 0:22:31.520 --> 0:22:34.359 a little bit cynical because we've been talking about regulation 0:22:34.400 --> 0:22:37.119 time and time again. And although some countries do have 0:22:37.160 --> 0:22:39.879 some regulation, For example, in Germany, there are rules about 0:22:39.880 --> 0:22:42.280 what you can and can't post about you know, Holocaust 0:22:42.320 --> 0:22:45.840 related content and you know, anti Semitic related content in 0:22:45.880 --> 0:22:48.080 the US and other sort of you know, major major 0:22:48.200 --> 0:22:50.760 places where these companies are actually based. We haven't seen 0:22:50.800 --> 0:22:53.840 any strict regulation changes. I guess that there's a question 0:22:54.040 --> 0:22:57.440 of what is the correct approach to regulating some of 0:22:57.480 --> 0:23:01.760 this type of behavior. Because Facebook has uh deployed a 0:23:01.800 --> 0:23:05.520 thousand plus person team to try to figure this out, 0:23:05.960 --> 0:23:08.119 I just have to wonder. I mean, could it be 0:23:08.200 --> 0:23:11.080 the other way around that that Facebook and other tech 0:23:11.119 --> 0:23:15.440 giants cooperate with local authorities to pin down people who 0:23:15.480 --> 0:23:18.320 are trying to use these as you know, these platforms 0:23:18.520 --> 0:23:22.720 with social media strategies to perpetuate hate and violence. I mean, 0:23:22.800 --> 0:23:25.320