WEBVTT - Markets, COVID, Twitter, And Crypto 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.079 at Bloomberg dot com slash podcast. Pretty Miserable, Managing Director, 0:00:23.280 --> 0:00:25.960 Global head of Race Strategy of TV Securities, joins us, 0:00:25.960 --> 0:00:27.720 and I know she doesn't want to talk about power 0:00:27.760 --> 0:00:30.680 trains on the four f one fifty truck. We want 0:00:30.720 --> 0:00:33.720 to talk to you pre about what your fetter reserve 0:00:33.800 --> 0:00:36.519 is gonna do here. I mean, we had a pretty strong, 0:00:36.680 --> 0:00:39.760 solid payroll number on Friday, but boy, there's a lot 0:00:39.760 --> 0:00:41.880 of inflation out there. How do you think your feederal 0:00:41.880 --> 0:00:44.760 reserve is gonna react in the weeks and months going forward. 0:00:45.520 --> 0:00:49.160 I mean, I guess one analogy to your power truck 0:00:49.800 --> 0:00:53.480 talk before is I think the Fed has to be aggressive. 0:00:53.840 --> 0:00:57.640 I mean, you know, policy is very accommodative given the 0:00:57.720 --> 0:01:01.600 economic outclook right now, and so I think they are 0:01:01.720 --> 0:01:04.440 signaling that they want to get to neutral fast. I 0:01:04.480 --> 0:01:06.880 think the big debate in the market is do they 0:01:06.880 --> 0:01:09.640 have to go above neutral? How much above neutral? Can 0:01:09.680 --> 0:01:13.080 the engineer a soft landing, or will they force economy 0:01:13.120 --> 0:01:15.880 into a recession to try and get inflation credibility? But 0:01:15.959 --> 0:01:18.039 the one clear message we're getting is they want to 0:01:18.080 --> 0:01:22.240 normalize at least to whatever neutral is. And you know, 0:01:22.720 --> 0:01:24.440 neutral for the funds rate, I would say is in 0:01:24.480 --> 0:01:26.840 the two and a half percent funds rate. So we 0:01:26.920 --> 0:01:30.600 are expecting the fret to high fifty basis points in 0:01:30.640 --> 0:01:34.160 May June, then continue with twenty until they get to 0:01:34.200 --> 0:01:36.880 that neutral point. We also expect them to start QT 0:01:37.720 --> 0:01:40.440 very soon in in May. You know our part of normalization. 0:01:40.760 --> 0:01:43.760 Our question of the day on the m Live blog 0:01:44.360 --> 0:01:47.640 was where is our star? What is it? What is 0:01:47.640 --> 0:01:50.080 the neutral rate right now? And I guess, first it 0:01:50.080 --> 0:01:54.240 depends if you're talking about real or nominal, But um, 0:01:54.400 --> 0:01:57.760 how do you get to that number? Right And there's 0:01:57.760 --> 0:02:00.720 a lot of research done on this. It tends to 0:02:00.760 --> 0:02:04.480 come to the our star, so the real equilibrium rate 0:02:04.520 --> 0:02:08.240 being somewhere between zero and fifty basis points. But there's 0:02:08.280 --> 0:02:11.600 a very wide range of estimates around this, uh, this 0:02:11.760 --> 0:02:14.360 median estimate. You know, there are those that argued its negative. 0:02:14.520 --> 0:02:16.720 I'm going to throw another point in here that when 0:02:16.760 --> 0:02:19.240 the FED is letting the balance sheet run off, I 0:02:19.280 --> 0:02:23.280 think our star, even the real number is probably lower 0:02:23.320 --> 0:02:25.080 than it would be if the FED was not letting 0:02:25.080 --> 0:02:27.120 the balance sheet run off. So when we run these 0:02:27.200 --> 0:02:30.399 historical metrics, you know, the balance sheets totally run off 0:02:30.440 --> 0:02:32.760 once before, and I would argue that the FED did 0:02:32.880 --> 0:02:35.000 overdo it last time when they took the funds rate 0:02:35.040 --> 0:02:37.360 to two and a half. So I would say, is 0:02:37.360 --> 0:02:39.920 it closer to zero is what we would call neutral? 0:02:39.960 --> 0:02:41.960 But you know, the FED is humble and we're all 0:02:42.040 --> 0:02:45.040 humble as we're figuring out what neutral is. I think 0:02:45.040 --> 0:02:47.400 that's why the FED might want to maybe speed it 0:02:47.480 --> 0:02:49.120 up in the near term. That's why we've got the 0:02:49.120 --> 0:02:52.160 two back to back fifties, and then slowly get to 0:02:52.240 --> 0:02:55.360 that neutral, because then the economy should show signs that 0:02:55.440 --> 0:02:58.320 we're nearing our star, even if we don't have a 0:02:58.320 --> 0:03:01.160 great sense of what it is. You know, beforehand, we 0:03:01.200 --> 0:03:04.720 should see the consumer start to slow down and corporate 0:03:04.760 --> 0:03:06.520 start to slow down, and that'll be a sign that 0:03:06.639 --> 0:03:08.639 we're getting close to neutral. The fight should start to 0:03:08.680 --> 0:03:11.639 get you know, slow down, then become more cautious. There 0:03:11.720 --> 0:03:14.360 was a great tweet I think it was over the 0:03:14.400 --> 0:03:20.200 weekend by UM Roberto ap Peary, who worked at Piper 0:03:20.440 --> 0:03:25.359 works at Piper Sandler UM. He shows a chart his 0:03:25.360 --> 0:03:28.480 his estimated nominal neutral rate is charted along with the 0:03:28.480 --> 0:03:32.440 FEDS funds rate since nineteen sixty one. And every time 0:03:33.200 --> 0:03:36.560 UM it seems the FED funds rate touches or gets 0:03:36.600 --> 0:03:39.840 beyond the nominal neutral rate, it drives us into a recession. 0:03:40.160 --> 0:03:44.680 Do you expect a recession? So we don't expect a 0:03:44.720 --> 0:03:47.360 recession because we don't expect to fit to go much 0:03:47.400 --> 0:03:50.160 above neutral. So it's, you know, the two we have. 0:03:50.320 --> 0:03:52.560 You should be consistent for those who argue that the 0:03:52.600 --> 0:03:54.320 Fed's going to go to three and a half for 0:03:54.960 --> 0:03:57.200 above three percent on the funds rate, and the market 0:03:57.240 --> 0:03:59.560 is now pricing in three point one as the end 0:03:59.560 --> 0:04:02.560 point of the hiking cycle, I think then it's very 0:04:02.600 --> 0:04:05.840 reasonable that the economy slows down significantly and the Fed 0:04:05.920 --> 0:04:08.200 may have to cut right after that. And that's why 0:04:08.480 --> 0:04:10.760 you look at the yield curve or just just uh, 0:04:10.960 --> 0:04:15.200 you know, forwards pricing in almost three rate cuts, UM, 0:04:15.240 --> 0:04:18.479 you know, after terminal rate has reached, because we have 0:04:18.600 --> 0:04:21.599 the FED slowing down as they approach neutral and not 0:04:21.720 --> 0:04:24.599 going much above neutral. We're sort of expecting that the 0:04:24.600 --> 0:04:26.960 FED will engineer the soft landing and they don't. We 0:04:27.000 --> 0:04:29.320 don't have a recession, they don't need to cut. But 0:04:29.560 --> 0:04:33.359 there are these two possibilities. There is a case where 0:04:33.600 --> 0:04:36.160 inflation forces them to go above neutral, and then I 0:04:36.240 --> 0:04:39.760 think the economy slows down, perhaps goes into recession. I'm 0:04:39.800 --> 0:04:42.440 somewhat sympathetic to the idea that if the unemployment rate 0:04:42.560 --> 0:04:45.880 rises a little bit, hard to prevent that from just 0:04:46.200 --> 0:04:48.200 rising a little bit, and that's when you do, you know, 0:04:48.200 --> 0:04:50.719 the Psalm rule kicks in and you actually go into 0:04:50.720 --> 0:04:54.440 a recession. So that's a reasonable, uh, you know, possible 0:04:54.480 --> 0:04:56.880 outcome right now. All right, Priya, thank you so much 0:04:56.960 --> 0:04:59.760 for joining us. Really appreciate getting your thoughts and perspective 0:04:59.760 --> 0:05:03.080 here as our freder Reserve UH continues on its rate 0:05:03.200 --> 0:05:07.120 hike UH plan. Here Priamra Managing director and Global head 0:05:07.120 --> 0:05:15.719 of Rate Strategy at t D Securities. You know, Matt 0:05:15.760 --> 0:05:18.240 Sin's the beginning of this pandemic thing. We've been leaning 0:05:18.279 --> 0:05:21.960 on this dude name Sam Fizzelli. And who is this guy, 0:05:22.000 --> 0:05:24.680 Sam Fizzelli. He's been on Bloomberg News. He writes stuff. 0:05:24.680 --> 0:05:28.520 He's on TV's on radio. Why Sam Fizzelli, Well, here's 0:05:28.520 --> 0:05:31.040 his day job. He's ahead of the European research, all 0:05:31.040 --> 0:05:33.400 of research for Bloomberg Intelligence in Europe. So he's got 0:05:33.440 --> 0:05:36.240 like fifty seventy five people reporting to him. So he's 0:05:36.279 --> 0:05:39.120 in theory a manager but that's debatable. But his big 0:05:39.160 --> 0:05:42.320 call to famous, he's a Paul likes to dump on managers. 0:05:42.880 --> 0:05:46.080 Just f y I exactly. But his claim to famous, 0:05:46.120 --> 0:05:48.159 he's really really made his chops. He's one of the 0:05:48.200 --> 0:05:52.039 top pharmaceutical medical medical analysts in the city of London 0:05:52.279 --> 0:05:56.640 and occasionally he comes to New York to share his expertise. Yeah, 0:05:56.680 --> 0:05:58.440 he's crazy. He does a wine thing. He's a wine 0:05:58.480 --> 0:06:00.160 o two so we've got that going from. But he's 0:06:00.160 --> 0:06:03.279 actually in the Bloomberg Interactive Broker studio today, Sam, thanks 0:06:03.360 --> 0:06:07.359 what for joining us. For me? The pandemics in the 0:06:07.400 --> 0:06:11.159 rear view mirror am a little bit. I've been seeing 0:06:11.160 --> 0:06:14.279 that for months. Yeah, I think that was Paul's wish 0:06:14.320 --> 0:06:16.560 every morning or every evening before going to bed in 0:06:16.600 --> 0:06:18.479 Neil Place bed and did this. But first of one, 0:06:18.560 --> 0:06:19.919 kind of just say how nice it is to be 0:06:19.960 --> 0:06:23.839 here together with you in the flesh, so that already 0:06:24.160 --> 0:06:25.760 and there are a lot of people in the office today, 0:06:26.200 --> 0:06:28.000 and that gives And it's a Monday, right, suppose three 0:06:28.040 --> 0:06:31.479 Mondays and Fridays should be light. But that to a 0:06:31.520 --> 0:06:35.080 degree place to your comment in that I felt comfortable 0:06:35.160 --> 0:06:36.520 enough to get on the plane to come here. I 0:06:36.600 --> 0:06:38.560 looked at case counts here. Okay, they may be going 0:06:38.640 --> 0:06:41.360 up a little bit, but nothing like what we had before. 0:06:41.400 --> 0:06:44.320 I thought, this is my opportunity. Hopefully will never go 0:06:44.400 --> 0:06:46.800 back to what it was before. I don't think the 0:06:46.880 --> 0:06:50.760 virus has quite finished with us, but still we're in 0:06:50.839 --> 0:06:53.800 a period where we are able to manage all this pressure. 0:06:53.839 --> 0:06:55.320 With the vaccines that we've all had and the drugs 0:06:55.320 --> 0:06:59.000 that we've got. We certainly see well, it feels like 0:06:59.040 --> 0:07:05.760 the mutations are less deadly. Um since delta right? Um? 0:07:05.960 --> 0:07:08.520 Is that the case for viruses? Do they mutate in 0:07:09.120 --> 0:07:11.840 less and less deadly forms? Or is it possible that 0:07:11.960 --> 0:07:15.360 what some mutation comes along that is again, um, severe 0:07:15.440 --> 0:07:17.800 in terms of the disease it causes. Yeah, man, I 0:07:17.800 --> 0:07:19.560 think we looked out there a little bit. We've got it. 0:07:19.640 --> 0:07:22.640 We've got a variant that was much more transmissible and 0:07:22.760 --> 0:07:26.000 through that it also changed the way that infected us, 0:07:26.040 --> 0:07:29.640 so we ended up getting upper respiratory tracts, so called infections, 0:07:29.720 --> 0:07:31.720 rather than deep lung, which is where the trouble starts. 0:07:32.040 --> 0:07:35.400 So but I have to say, in an unvaccinated person, 0:07:35.640 --> 0:07:38.559 this is not an easy infection, right. We're just lucky 0:07:38.560 --> 0:07:40.920 that we all have Most of us have been vaccinated 0:07:41.080 --> 0:07:45.119 or prior infected, so there is no rhyme or reason 0:07:45.160 --> 0:07:48.080 the virus. Once it's infected you and infected the next person, 0:07:48.360 --> 0:07:50.440 it doesn't care what happens to you. I mean, not 0:07:50.520 --> 0:07:52.520 that it's but we are kind of holding to the 0:07:52.560 --> 0:07:55.320 same schedule as the Spanish flu. I know that's a 0:07:55.360 --> 0:07:57.880 misnomer now, and my wife who's from Spain hates it 0:07:57.920 --> 0:08:00.760 when she's like, it's the Kansas flu. We called it 0:08:00.800 --> 0:08:04.480 the Spanish that's hung around for like two years. Right. 0:08:04.640 --> 0:08:06.640 It was deadly at first and then got less and 0:08:06.680 --> 0:08:08.240 less deadly, and now it's the flu that we all 0:08:09.000 --> 0:08:12.720 you'll get. But it's immunity, that's that's the difference. Over 0:08:12.760 --> 0:08:14.880 those two or three years. You build up immunity either 0:08:14.920 --> 0:08:17.560 through an infection, which is not the ideal way, or 0:08:17.640 --> 0:08:19.600 through the vaccines that they give us, which was great. 0:08:19.840 --> 0:08:22.320 So that's what the difference is, and I think we 0:08:22.400 --> 0:08:24.800 have we can't separate the two from each other. Is 0:08:24.840 --> 0:08:28.400 it possible that another variant turns up that's back to 0:08:28.520 --> 0:08:33.240 the high virulence of the previous Delta variant and more transmissible. Yes, 0:08:33.520 --> 0:08:36.480 I mean it's all random as far as the virus 0:08:36.520 --> 0:08:39.600 is concerned. Once you're infected and it's had the opportunity 0:08:39.640 --> 0:08:42.719 to jump to the next victim. Whatever, it doesn't care 0:08:42.760 --> 0:08:45.319 what happens to you. You can go and die whatever. 0:08:45.360 --> 0:08:48.360 It makes no difference, right, that's the critical part here 0:08:49.040 --> 0:08:52.719 that can happen by accident. Hopefully it won't. Hopefully our 0:08:52.840 --> 0:08:56.079 immune system gets us controlled Delta. I mean, if you 0:08:56.120 --> 0:08:59.280 look at everyone says o Acron's less virulent or less problematic, 0:08:59.320 --> 0:09:01.960 look at Delta. The death rate per case for Delta 0:09:02.080 --> 0:09:07.560 was already pretty low. So it's the vaccines. So are 0:09:07.600 --> 0:09:10.120 we back? Are we back to? Are we back down 0:09:10.200 --> 0:09:13.880 to a level that is more like the traditional flu 0:09:14.040 --> 0:09:18.000 in terms of case fatality? Not really, because it all 0:09:18.040 --> 0:09:20.680 depends on which country you look at and what age 0:09:20.720 --> 0:09:22.559 group you look at. That there are age groups where 0:09:22.559 --> 0:09:26.600 the number of deaths are still high and perhaps would 0:09:26.840 --> 0:09:29.560 benefit from a fourth shot, which sure is the next 0:09:29.559 --> 0:09:33.120 thing you gonna ask exactly? I mean they present. Biden 0:09:33.160 --> 0:09:35.840 came out recently said that those over fifty in this country, 0:09:35.880 --> 0:09:37.840 I think I might be a to check my license. 0:09:37.840 --> 0:09:41.520 I might be above fifty. You can get a fourth booster, 0:09:41.640 --> 0:09:43.800 get a fourth shot, another booster? Do I need that? 0:09:43.960 --> 0:09:45.880 I'm I'm getting in line, by the way, when they 0:09:45.920 --> 0:09:47.520 start offering it, I'll be the first in line. You 0:09:47.520 --> 0:09:49.559 can go get it now, dude, can one's checking your 0:09:49.559 --> 0:09:51.959 ID at CVS? Okay, you just walk in and get 0:09:51.960 --> 0:09:55.720 a shot. All right, we'll do that. Yeah. No. So, 0:09:55.720 --> 0:09:57.560 so the thing is, do you want to play wackam 0:09:57.559 --> 0:10:02.240 all with this forever? If we talking about preventing severe disease, 0:10:02.600 --> 0:10:07.280 you not getting bad disease below the age of seventy. 0:10:07.400 --> 0:10:09.760 I don't see the data. There's no There seems to 0:10:09.760 --> 0:10:11.320 be no difference if you had a fourth or a 0:10:11.320 --> 0:10:14.680 third shot based on current data. Remember that's been an 0:10:14.720 --> 0:10:16.480 important thing for us to remember every time we talk 0:10:16.520 --> 0:10:19.600 about this. The data evolves because it's you know, we're 0:10:19.679 --> 0:10:21.640 literally building the ship as we're trying to say it. 0:10:22.200 --> 0:10:24.880 Um so below the age of seventy, I haven't seen 0:10:24.920 --> 0:10:27.440 data that convinces me a fourth shot makes a difference 0:10:27.480 --> 0:10:30.400 to severe disease. If you want to have three or 0:10:30.400 --> 0:10:33.280 four months of cover not to catch it, you probably 0:10:33.280 --> 0:10:35.240 could do with that, and you get this boost in 0:10:35.280 --> 0:10:39.280 antibodies that will contract again, so that whack a mole game? 0:10:39.400 --> 0:10:42.080 Or do you want to prevent severe disease? How about 0:10:42.160 --> 0:10:45.640 our friends in China. I don't see that ending while there. 0:10:45.679 --> 0:10:48.440 I mean, they've had such a zero tolerance policy which 0:10:48.960 --> 0:10:52.040 arguably worked for them in terms of the disease. Maybe 0:10:52.040 --> 0:10:55.000 not so much further economy and the global economy, but 0:10:55.080 --> 0:10:58.560 certainly for them and the disease. But Armicrons seems like 0:10:58.640 --> 0:11:01.960 it doesn't really care about that. What what changed for 0:11:02.000 --> 0:11:04.640 them was Omicron. They did everything right. They had a 0:11:04.720 --> 0:11:07.079 great I mean, they had a fantastic track record in 0:11:07.200 --> 0:11:08.920 terms of a number of people who died compared to 0:11:09.040 --> 0:11:12.200 us or in the UK. But what changed was Omicron. 0:11:12.559 --> 0:11:14.640 I mean, they did everything right in terms of keeping 0:11:14.640 --> 0:11:17.920 people alive. You mean, right, right, right? Oh, no, probably sucked. 0:11:18.480 --> 0:11:21.520 Mental health is a totally different conversation for us to 0:11:21.559 --> 0:11:25.000 have the impact under healthcare in other areas. But now 0:11:25.160 --> 0:11:29.160 Omicron is not playing by the by the right by 0:11:29.160 --> 0:11:31.679 the right room. But fortunately not. I was gonna say 0:11:31.720 --> 0:11:34.200 not as deadly, but you met. You pointed out for 0:11:34.200 --> 0:11:38.160 for vaccinated people, how many people they are vaccinated. So 0:11:38.280 --> 0:11:40.720 the numbers I'm hearing is that only thirty or of 0:11:40.760 --> 0:11:44.680 people that are in the risk group of more aged 0:11:46.679 --> 0:11:52.480 older people are only ever arm right, right, So what 0:11:52.559 --> 0:11:54.560 they need, which is what we argued in a piece 0:11:54.600 --> 0:11:57.679 we wrote with the Economist team, is to get an 0:11:57.720 --> 0:12:01.040 m modern a shot into those arms or something equivalent 0:12:01.280 --> 0:12:03.280 in terms of is that going to happen? You think, well, 0:12:03.800 --> 0:12:05.880 I've just seen news over the weekend that they're starting 0:12:06.200 --> 0:12:09.040 excuse me, two trials with different The modern dy vaccine 0:12:09.080 --> 0:12:13.200 is homegrown. But why do that rather than going somewhere 0:12:13.200 --> 0:12:15.880 where there's an enormous body of data that tells you 0:12:16.080 --> 0:12:18.640 exactly what to expect if you gave them a biolome 0:12:18.679 --> 0:12:21.960 when love to go in there and put jobs in 0:12:22.200 --> 0:12:26.000 a couple of billion people, why not? But also, Biotics 0:12:26.080 --> 0:12:29.520 already got a partner in China. They already filed the 0:12:29.600 --> 0:12:32.960 data in China to my estimation, at least six months 0:12:32.960 --> 0:12:35.839 ago plus with corporate espionage, they probably have all the 0:12:35.920 --> 0:12:39.400 data anyway, right they look but at the end of 0:12:39.440 --> 0:12:42.200 the day, go with the vaccine that you know does 0:12:42.280 --> 0:12:45.880 what I tell you. We complain about these big farmer 0:12:45.920 --> 0:12:48.600 companies gouging us on drugs, but boy, they came through 0:12:48.640 --> 0:12:51.960 here in this pandemic. I mean they really did, in 0:12:51.960 --> 0:12:56.559 my opinion. I mean they one year, these guys came 0:12:56.559 --> 0:12:58.800 out with this stuff and they got it into people's arms. 0:12:58.840 --> 0:13:00.560 And hopefully we can do it in some of these 0:13:00.880 --> 0:13:03.319 developing countries as well. Sam Fazelli, thanks so much for 0:13:03.400 --> 0:13:06.439 joining us live, Yes live in our Bloomberg Interactor Broker 0:13:06.440 --> 0:13:08.640 studio comes to us live from London, usually on the phone, 0:13:08.720 --> 0:13:09.959 but we got him here in New York. I guess 0:13:10.000 --> 0:13:12.040 I gotta buy him dinner tonight. He's had a European 0:13:12.080 --> 0:13:15.200 research for Bloomberg Intelligence, big time farmer analysts over there 0:13:15.200 --> 0:13:16.920 in the city London. He's a real hot shot, but 0:13:16.960 --> 0:13:22.560 we got him in our studios. I think Elon Musk 0:13:22.760 --> 0:13:27.559 has some restrictions on actually being on Twitter tweeting, but 0:13:27.679 --> 0:13:29.679 doesn't stop him from buying Twitter. I have to admit 0:13:29.720 --> 0:13:32.559 it doesn't stop him from tweeting either. Yeah, he didn't 0:13:32.559 --> 0:13:36.520 care about silly sec but I'll say I did not 0:13:36.600 --> 0:13:39.280 see this news. This morning him taking a steak in Twitter. 0:13:39.360 --> 0:13:42.280 Maybe somebody smarter than us did see this, Hey, Dan 0:13:42.520 --> 0:13:45.679 dan Ives, Managing Director Senior Equity Alice at web Bush Securities, 0:13:45.720 --> 0:13:48.959 and a proud Penn stater or joins us day before 0:13:48.960 --> 0:13:51.160 we get to that. Actually, Dan, I was thinking about 0:13:51.200 --> 0:13:55.840 you this weekend. I went back to my mom's garage 0:13:55.880 --> 0:13:58.120 and Graham Bell, Ohio to pick up an older classic 0:13:58.200 --> 0:14:01.360 Duccatti Monster S four R S sure, and I drove 0:14:01.400 --> 0:14:04.480 it back here to New York as I was, I don't. 0:14:04.520 --> 0:14:06.680 I thought it would be fun, and it actually wasn't. 0:14:06.760 --> 0:14:08.600 But it was one thing that was cool was I 0:14:08.640 --> 0:14:12.079 did stop in State College in Happy Valley and I 0:14:12.120 --> 0:14:14.880 thought about Dan dan Ives. Uh, Dan, what do you 0:14:14.920 --> 0:14:18.720 make of this? What's Elon doing here? Look? I think 0:14:18.800 --> 0:14:21.240 this is really the start of what's going to be 0:14:21.240 --> 0:14:24.360 a shake up at Twitter. I mean, Musk doesn't just 0:14:24.400 --> 0:14:27.480 do a passive nine percent stake for fun, So I 0:14:27.480 --> 0:14:31.080 think this is ultimately the start of a broader role 0:14:31.320 --> 0:14:35.200 at Twitter. And you know, this is really ultimately Musk 0:14:35.320 --> 0:14:39.040 expanding the ecosystem. That's why the streets reading this as 0:14:39.080 --> 0:14:42.120 basically this is the start of something much bigger that 0:14:42.280 --> 0:14:47.320 Musk is leading. But so we were taking passive as 0:14:48.200 --> 0:14:51.160 meaning he won't take a board seat or you know, 0:14:51.280 --> 0:14:54.800 tell um the C suite what to do. But does 0:14:54.840 --> 0:15:00.080 passive means something else? Yeah? I mean, look, there's a 0:15:00.160 --> 0:15:04.080 better chance to meet playing Augusta this weekend in must keeping, 0:15:04.960 --> 0:15:08.040 but then must keeping just a passive steak. I mean, 0:15:08.080 --> 0:15:10.560 this is going to go active above the ten percent. 0:15:11.120 --> 0:15:14.280 It's a matter of their conversations with the board and 0:15:14.320 --> 0:15:17.480 do they ultimately play ball. But I think that's really 0:15:17.480 --> 0:15:20.120 the view. Is that especially Twitter, which has been the 0:15:20.240 --> 0:15:22.520 right lane, I mean where others have passed him in 0:15:22.520 --> 0:15:26.640 the left lane the social media from a monization perspective, 0:15:26.680 --> 0:15:30.840 it's been disappointing. And of course Musk is is there's 0:15:30.880 --> 0:15:34.040 not no secret in terms of his criticism of Twitter. 0:15:34.600 --> 0:15:37.280 So it's a look, if if the bank has your house, 0:15:38.200 --> 0:15:40.480 then you can just buy the bank. And I think 0:15:40.840 --> 0:15:43.160 he's going down that path. We got to see which 0:15:43.200 --> 0:15:46.240 direction it goes. But obviously for Twitter it's bullish because 0:15:46.320 --> 0:15:49.120 clearly that he's going to shake things up. Dan, what 0:15:49.120 --> 0:15:52.160 do you think he could do here or should do here? 0:15:53.720 --> 0:15:57.000 What I think he could do is at least board 0:15:57.040 --> 0:16:03.680 seats get more active, a new suite of directors and 0:16:03.720 --> 0:16:08.400 then ultimately will to either change some of the policies, 0:16:08.680 --> 0:16:11.920 you know, by being on the board, and then eventually, 0:16:12.000 --> 0:16:14.720 depending on how it all shakes out, I mean, this 0:16:14.760 --> 0:16:17.400 could ultimately lead to a sale. You know, obviously private 0:16:17.400 --> 0:16:20.000 A quickly get involved. And I think that's that's the 0:16:20.120 --> 0:16:23.920 view here, is that this soap opera, this is just 0:16:24.000 --> 0:16:28.240 a start of what's going to happen with Musk and Twitter. 0:16:28.280 --> 0:16:30.680 And because as we all know, I mean, Musk is 0:16:30.680 --> 0:16:33.880 not someone that just puts one tone the water, right, 0:16:33.920 --> 0:16:37.360 and I think he's gonna be a lot more aggressive, 0:16:38.000 --> 0:16:40.520 you know, I think in the coming months and year, 0:16:40.720 --> 0:16:43.160 especially as it comes to Twitter. What does he want 0:16:43.200 --> 0:16:48.400 to change a Twitter? What has he been unhappy about? Well, clearly, 0:16:48.440 --> 0:16:51.320 I mean that there's a lot of criticism that that 0:16:51.400 --> 0:16:53.400 he's talked about in terms of freedom of speech and 0:16:53.440 --> 0:16:58.680 others on Twitter. I think it's led to you know, 0:16:58.960 --> 0:17:01.720 his view that he was really gonna try to create 0:17:01.760 --> 0:17:04.080 his own social media platform, which is we all know 0:17:04.160 --> 0:17:08.360 that's extremely difficult. And obviously you know, he looked at 0:17:08.400 --> 0:17:11.600 and his advisers looked to the situation, but doors he'd 0:17:11.640 --> 0:17:14.280 go into the background, you know, with a lot of 0:17:14.320 --> 0:17:17.879 sort of passive steaks in Twitter, I think there was 0:17:17.920 --> 0:17:20.359 an opportunity and he recognized it was now or never 0:17:21.040 --> 0:17:23.439 to to really go after Twitter. And I think this 0:17:23.520 --> 0:17:26.760 is the start, right in terms of a passive ownership stake, 0:17:27.160 --> 0:17:30.240 which likely goes to active and now it's a matter 0:17:30.280 --> 0:17:34.639 of what the next step is. Danny, you followed Elon 0:17:34.720 --> 0:17:38.160 Muskin and Ted Tesla and his career for a long time. 0:17:39.000 --> 0:17:41.880 What do you think is this from a portfolio perspective, 0:17:41.920 --> 0:17:45.280 his personal portfolio of assets. You know, some people are 0:17:45.280 --> 0:17:47.600 suggesting this is the beginning of him trying to diversify 0:17:47.640 --> 0:17:50.320 a little bit. You expect him to be spreading more 0:17:50.359 --> 0:17:53.359 of his wealth out into other companies, other industries. How 0:17:53.359 --> 0:17:56.520 do you think about that? Yeah, And remember he's not 0:17:56.560 --> 0:18:00.000 an activist like in the sense like an icon or others. 0:18:00.000 --> 0:18:02.520 He doesn't view it like that. Just getting into his mind, right, 0:18:02.480 --> 0:18:05.639 I mean, the way must us this is that just 0:18:05.800 --> 0:18:08.640 like he did on EVS, just like he did with Space, 0:18:09.200 --> 0:18:12.440 He's like he looks at social media like something's wrong here. 0:18:13.200 --> 0:18:17.640 From his viewpoint, this needs to be changed, and I'm 0:18:17.640 --> 0:18:20.600 going to change it. And I'm the rich personal world 0:18:20.680 --> 0:18:23.200 and I'm going to start that, and I think that's 0:18:23.240 --> 0:18:25.840 that's what he's really going down with Twitter. Now. The 0:18:25.880 --> 0:18:29.399 conversation is like, what's the next step. Can you change 0:18:29.480 --> 0:18:33.359 monization of the platform, algorithms advertising? Right? These are all 0:18:33.400 --> 0:18:36.359 things from an investor perspective, it's not just the whole 0:18:36.480 --> 0:18:39.640 you know, chronic Freemer's speech issue. So I think that's 0:18:39.640 --> 0:18:41.439 really going to be the focus going forward to what 0:18:41.520 --> 0:18:44.640 the next steps are. But you know, this is one 0:18:44.720 --> 0:18:48.679 where I think for Twitter from an investor perspective, they 0:18:48.680 --> 0:18:52.000 obviously welcome this because there's very few that could rock 0:18:52.080 --> 0:18:56.600 the boat like this, and Musk is obviously one interesting stuff. 0:18:57.320 --> 0:18:58.639 I don't know what. I just don't know what this 0:18:58.640 --> 0:19:00.480 guy's gonna do with this thing. It's it's it's really 0:19:00.560 --> 0:19:04.119 amazing and uh I didn't see this coming at all. 0:19:04.160 --> 0:19:06.360 But anyway, exciting though, right, good stuff. Yeah, it's great 0:19:06.400 --> 0:19:08.159 for Monday. Hey, Dan, thanks so much for joining us. 0:19:08.200 --> 0:19:11.200 You always appreciate getting your perspective. Dan ives he's a 0:19:11.240 --> 0:19:13.720 managing director, he's a senior equity analyst, covers all this 0:19:13.800 --> 0:19:21.480 tech stuff, all the Internet. I think Elon Musk has 0:19:21.520 --> 0:19:26.520 some restrictions on actually being on Twitter tweeting, but doesn't 0:19:26.520 --> 0:19:28.359 stop him from buying Twitter. I have to admit it 0:19:28.359 --> 0:19:31.239 doesn't stop him from tweeting either. Yeah, he didn't care 0:19:31.280 --> 0:19:35.360 about silly sec But I'll say I did not see 0:19:35.400 --> 0:19:37.840 this news this morning, him taking a steak in Twitter. 0:19:37.920 --> 0:19:40.840 Maybe somebody smarter than us did see this. Hey, Dan 0:19:41.080 --> 0:19:43.520 dan Ives, managing director of Senior Equity anlyse At web 0:19:43.520 --> 0:19:46.879 Bush Securities, and a proud Penn State or joins us 0:19:46.960 --> 0:19:49.200 day before we get to that. Actually, Dan, I was 0:19:49.240 --> 0:19:53.560 thinking about you this weekend. I went back to my 0:19:53.600 --> 0:19:56.080 mom's garage and Graham Bell, Ohio to pick up an 0:19:56.080 --> 0:19:59.520 older classic Duccatti Monster S four r S and I 0:19:59.640 --> 0:20:02.119 drove it back here to New York as I was 0:20:02.800 --> 0:20:04.480 I don't I thought it would be fun, and it 0:20:04.520 --> 0:20:06.840 actually wasn't. But it was one thing that was cool 0:20:07.000 --> 0:20:10.399 was I did stop in State College in Happy Valley 0:20:10.480 --> 0:20:13.240 and I thought about Dan dan Ives? Uh, Dan, what 0:20:13.280 --> 0:20:16.880 do you make of this? What's Elon doing here? Look? 0:20:16.960 --> 0:20:19.600 I think this is really the start of what's going 0:20:19.640 --> 0:20:21.800 to be a shake up at Twitter. I mean, Musk 0:20:22.400 --> 0:20:25.480 doesn't just do a passive nine percent stake for fun, 0:20:25.800 --> 0:20:28.639 So I think this is ultimately the start of a 0:20:28.760 --> 0:20:32.440 broader role at Twitter. And you know this is really 0:20:33.000 --> 0:20:36.439 ultimately Musk expanding the equosystem. That's why the streets reading 0:20:36.520 --> 0:20:39.760 this as basically, this is the start of something much 0:20:39.800 --> 0:20:44.879 bigger that Musk is leading. But so we were taking 0:20:44.920 --> 0:20:48.879 passive as meaning he won't take a board seat or 0:20:49.480 --> 0:20:52.399 you know, tell um the c suite what to do. 0:20:52.680 --> 0:20:57.840 But does passive means something else? Yeah? I mean, look, 0:20:58.280 --> 0:21:00.800 there's a better chance to meet playing in Augusta this 0:21:00.880 --> 0:21:04.919 weekend and must keeping, but then must keeping just a 0:21:04.920 --> 0:21:07.920 passive steak. I mean, this is going to go active 0:21:08.040 --> 0:21:11.480