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Speaker 1: that definitely plays into I feel like something Ken Griffin
Speaker 1: said at Citadel saying that the scientists of Maderna and
Speaker 1: fires where they should be at the White House being
Speaker 1: commended for how quickly they got vaccines together. This story
Speaker 1: is talking about Messenger RNA. It's all the rage now.
Speaker 1: We all are talking about it. Investment venture money pouring
Speaker 1: into the area and that includes one specific biotech startup
Speaker 1: or a therapeutic So let's get into it with Rick Shine,
Speaker 1: bloom Work News senior editor on the phone in New
Speaker 1: Jersey along with Business Week editor Joel Weber and our
Speaker 1: Bloomberg Business Week Uh, I should say in our Bloomberg
Speaker 1: Interactor Broker studio right here in New York. So we
Speaker 1: are all like, I feel like we're all like like
Speaker 1: i'mate your scientists a little bit here armchair virologist slash
Speaker 1: scientists at this point yet, Uh, well, you haven't heard
Speaker 1: this part, which is that you know you've known about
Speaker 1: m RNA, that that if you didn't know about it, um,
Speaker 1: you know about it now. But Angelica Levito's story in
Speaker 1: the current issue of the magazine UM is about perhaps
Speaker 1: the next frontier in RNA, which is that's a linear
Speaker 1: little strand almost like a thread, if you will, and
Speaker 1: scientists are now working on a way to bend it.
Speaker 1: And Rick Shin, who who helped edit the stories on Rick,
Speaker 1: why why is bending our RNA into a circle? Why
Speaker 1: would you want to do that? So, hi, Joel, I
Speaker 1: would definitely put myself in the category of arm tore virologists.
Speaker 1: So um. Yeah. So this is basically a technique that
Speaker 1: researchers at Stanford and then later M I. T. Came
Speaker 1: up with two make RNA or a kind of our
Speaker 1: name that also give the message more durable, more stable
Speaker 1: than what we think of as m RNA, which, as
Speaker 1: you correctly put it is that like like a straight
Speaker 1: little strand. So because uh, they're able to like now
Speaker 1: transform this kind of strand into a circle, Uh, it
Speaker 1: makes the the message lasts longer. And so whereas m
Speaker 1: RNA works perfectly well for a vaccine, which has been
Speaker 1: fantastic as we certainly know with moderna advisor vaccines, a circle,
Speaker 1: the hope is will be able to treat cancer and
Speaker 1: other diseases because it will be able to just hers
Speaker 1: is longer in the body. Uh that's thee And this
Speaker 1: um uh young company or a Therapeutics was founded based
Speaker 1: on this research. It's very theoretical still, it's um, you know,
Speaker 1: nothing has really been proven. But uh but investors, are
Speaker 1: you excited enough to have put in a hundred million
Speaker 1: dollars which is not nothing? And so so uh orna,
Speaker 1: you know, it's like it's kind of the story though
Speaker 1: of just like everybody's looking for exposure to like what
Speaker 1: could be the next thing here. And obviously m RNA
Speaker 1: has has potential to do a lot of things other
Speaker 1: than just fight fight COVID. And this could be potentially
Speaker 1: one of those uh things that it could could be
Speaker 1: working against. So who who's behind ORNA? Who are the
Speaker 1: who are the players there? So ARNA was created um
Speaker 1: by a group from m I t uh uh the
Speaker 1: uh let's see um it's um this guy um sorry
Speaker 1: Daniel Anderson. It was like a big deal in uh
Speaker 1: in rna uh technology. One of his researchers actually came
Speaker 1: up with the kind of way that you do this,
Speaker 1: which is essentially cutting up the strand into little pieces
Speaker 1: and having it reformulate itself into a circle. So um
Speaker 1: uh they met with some investors, they created a company. Uh,
Speaker 1: this group MTM got behind it and uh and they're
Speaker 1: they're they're often running. I mean they still have a
Speaker 1: very very far road to go. There's other also, I
Speaker 1: just want to say, there's other companies that are doing
Speaker 1: this what we didn't really have space to get into
Speaker 1: it into the story, but there's a company called Laurent's Therapeutics.
Speaker 1: It's also working on a very similar technology and they're
Speaker 1: backed by flag Chip Pioneering, which is the venture firm
Speaker 1: that helped create modear not. So there's a lot going
Speaker 1: on in this space. Is this that all being considered
Speaker 1: something like Rick kind of a holy grail in terms
Speaker 1: of really changing how we deal with serious diseases cancer.
Speaker 1: Of course, um when it comes to we always talk
Speaker 1: about disruption innovation, right, and it's we feel like medicine
Speaker 1: to some extent and how we think about it and
Speaker 1: treatment modalities that it's lagged a little bit. Could this
Speaker 1: really be the game changer, that it really is a
Speaker 1: very different form of treatment and much more effective, although
Speaker 1: even though it'll take maybe a little while to get there.
Speaker 1: I mean, that's certainly the big hope. And you know,
Speaker 1: people who are former far more knowledgeable about those than
Speaker 1: I am, and we have much deeper pockets than I do.
Speaker 1: Are are really betting on this? So I would I would,
Speaker 1: You know, I would. I would say, we have to
Speaker 1: see where we get. But you know, as I said,
Speaker 1: it's still early, early going. So when we when would
Speaker 1: we know best case scenario? Rick? Like, what's the timeline
Speaker 1: for something like this? Because m R and A was
Speaker 1: kicking around forever before it finally found its momentum. Is
Speaker 1: this something that's like, you know, a year or two
Speaker 1: we'll know what the results of this are. Is it
Speaker 1: more like ten years? I think it's more like a
Speaker 1: year or two because, um, you know, because there's so
Speaker 1: much focused on this and there's so much momentum. I
Speaker 1: mean that the whole story of the m R and
Speaker 1: A vaccine was that there were terrific advances made, but
Speaker 1: you know, no one paid attention to it. They were
Speaker 1: just kind of out there for you know, decades before
Speaker 1: before I really sort of came to came into into
Speaker 1: sharp focus. And so now it was so much money
Speaker 1: and so much expertise focusing on this, I think we
Speaker 1: will go faster. Yeah, exactly. You do feel like that
Speaker 1: there's a lot of money and attention being spent to it. Hey,
Speaker 1: Rick Shawn, thank you so much, Senior editor for Global
Speaker 1: Business News at Bloomberg News on the phone in New Jersey,
Speaker 1: of thanks to Joe Weber, Editor Bloomberg Business Sweek here
Speaker 1: in our Interactive Broker Studio. Be sure to check out
Speaker 1: this story at Bloomberg dot com, business Week dot com
Speaker 1: and on the Bloomberg you're listening to Bloomberg Radio. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right,
Speaker 1: so you know, it's attracting a lot of money. Bloomberg
Speaker 1: Intelligence in fact expects e s G e T S
Speaker 1: to reach a trillion dollars E s G debt eleven
Speaker 1: trillion by five. It's enticing and perhaps still a bit confusing.
Speaker 1: I gotta say, tim, when it comes to UH investing
Speaker 1: in the E s G space, we're talking about environmental,
Speaker 1: social and governments investing. And in a Saturday column, Andy
Speaker 1: Brown writes about this, Yeah, does it really have the
Speaker 1: effect that people think it's having? He writes about someone
Speaker 1: named Terreek Fancy was an evangelist for the idea that
Speaker 1: capitalism can help save the planet from global warming. Andy
Speaker 1: Brown joins us now he's editorial director at Bloomberg New Economy.
Speaker 1: He joins us on the phone from New York City. Hey, Andy,
Speaker 1: so what happened to to Rieke Fancy. I mean he
Speaker 1: was he was all about s G for years at
Speaker 1: black Rock. Indeed, he was he ran this at black
Speaker 1: Rock for two years. He was, as you say, absolutely
Speaker 1: convinced the capitalism and capitalist markets could save the planet
Speaker 1: from climate change. And after two years of the world's
Speaker 1: largest asset manager, he came to the conclusion that this
Speaker 1: was entirely illusory, and the idea that Wall Street is
Speaker 1: part of a solution um rather than the problem, in
Speaker 1: his view, simply delays real action. And he thinks that
Speaker 1: was absolutely necessary is the government to change the rules
Speaker 1: of the game and to impose a price on carbon emissions,
Speaker 1: thus forcing companies to take responsibility for their own polluting behavior. Well,
Speaker 1: the whole idea is right. I mean, there's got any
Speaker 1: how many conversations do we have and you picked your
Speaker 1: investment from They're happy to come on and talk about
Speaker 1: their e s G funds and e s G space
Speaker 1: and everybody being all in. And what's interesting, though, is
Speaker 1: he points out and as you write, you know, just
Speaker 1: by saying we're not going to invest, let's say in
Speaker 1: oil companies or or what have you, somebody else will
Speaker 1: be very happy to pick up that and put their
Speaker 1: money into that space. Exactly as he writes. He writes
Speaker 1: in a very in a very lively way, and he says,
Speaker 1: you know, losing ten percent of your shareholders is not
Speaker 1: the same as losing ten percent of your customers. You
Speaker 1: lose a customer, you've lost a customer, you lose and
Speaker 1: investor you just go out and find another one. And
Speaker 1: he makes the point actually that you know, these funds
Speaker 1: advertise themselves as E s G funds don't actually put
Speaker 1: anything new into the market. It's not like they invest
Speaker 1: in green projects and initiatives which otherwise wouldn't find funding. Basically,
Speaker 1: they take the universe of available assets and talk them
Speaker 1: up into sort of smaller pieces with a kind of
Speaker 1: a we do. And it's like academic research shows that
Speaker 1: are surprisingly small amount of the waiting off these funds
Speaker 1: is actually um, is actually green um. The rest is
Speaker 1: more or less business as usual with the waiting towards
Speaker 1: large cap companies. In fact, what Terek says, in fact
Speaker 1: is that you know it's designed really for for purposes
Speaker 1: of differency, and so yes, is this new thing. It's
Speaker 1: an exciting new product, look for the planet and good
Speaker 1: for your pocket book, you know, and that in fact,
Speaker 1: you know, he said, contentially, it's just a mechanisms which
Speaker 1: these fund managers got to learn fatter fees. So he
Speaker 1: lays out the problem, but does does he allowed to solution? Andy, Well,
Speaker 1: he doesn't, And I asked him about that. He was
Speaker 1: on my show the other day and I said, look,
Speaker 1: you know you it's just what you've said. I mean,
Speaker 1: you lay out all the problems here, what's the solution then?
Speaker 1: And actually what I also had he runs uh sustainable
Speaker 1: to thing for CalPERS that the Canadian billion dollars under management.
Speaker 1: And she said, look, you know it's not an either
Speaker 1: role that you know, I it's an end and government
Speaker 1: does have a role to play in civil society does,
Speaker 1: and investors do. And she actually gave a concrete example
Speaker 1: of how they combined really can change things. And the
Speaker 1: example she gave with this activist hedge fund Engine number one,
Speaker 1: which replaced three directors of Excellent Mobile is backed by
Speaker 1: backed by CalPERS because I didn't think the Excellent Mobile
Speaker 1: was moving cost enough on a green transition. You know,
Speaker 1: it's interesting because I have a lot of conversations with
Speaker 1: folks to Andy and it's it's it can't be just
Speaker 1: I know net zero is the focus so much for
Speaker 1: a lot of e s G at this point in
Speaker 1: terms of you know, if you create emissions, they're bounced
Speaker 1: by absorbing basically an equivalent amount that's out in the atmosphere.
Speaker 1: But we really have to get to a way where
Speaker 1: we have alternatives that don't create anything bad for the
Speaker 1: atmosphere because it's rapidly going out of control. And unfortunately
Speaker 1: there's not a lot of transparency in this E s
Speaker 1: G space right now, at least not for every every
Speaker 1: part of the letters, if you will. Um some of
Speaker 1: them are easier than others. But we've really got to
Speaker 1: think about it differently, especially when it comes to the environment. Yeah, exactly,
Speaker 1: And that was the point that Anne was making. This
Speaker 1: is the role of the vital role of government regulators
Speaker 1: have to play, which is to force companies to um
Speaker 1: to to to publish their climate risks and opportunities so
Speaker 1: that investors can make real decisions about where they put
Speaker 1: their money. But on the question of divestment, I also
Speaker 1: had on the show no Quinn, the the CEO of HSBC,
Speaker 1: and you know, he made the point, it's a it's
Speaker 1: a very reasonable point that you know, divestment doesn't actually
Speaker 1: do much good. That we're gonna be living with polluting
Speaker 1: industries for a long time, whether we like it or not.
Speaker 1: In the the trick is to work with them on
Speaker 1: solutions rather than to completely cut them off. And actually
Speaker 1: I think pretty much everybody agreed on that point. So Andy,
Speaker 1: just in the last forty five seconds that we have
Speaker 1: left with you. What are takeaways for investors and listeners
Speaker 1: who are listening right now. Well, I think Tarry makes
Speaker 1: a good point. I mean, he's drawn attention to abuses
Speaker 1: in a big, growing financial industry, which and describes as
Speaker 1: being snake oil, sort of pretending that it's the answer
Speaker 1: but not really. Um. But I think probably to Anne's point, um,
Speaker 1: he overstates the case and that solutions in this in
Speaker 1: this area really are going to require a coalition, everybody
Speaker 1: pulling together, um and forcing change on companies from within.
Speaker 1: Smart conversation, and you're you're making me think, Okay, we've
Speaker 1: got to get him on our air too, because we
Speaker 1: talked so much about E S G UM And maybe
Speaker 1: the two of you can join us and we can
Speaker 1: continue this conversation here on a Bloomberg radio. Andy, thank you,
Speaker 1: Andy Brown, editorial director at Bloomberg New Economy, on the
Speaker 1: phone in New York City. We have these conversations. The
Speaker 1: E S G space is exploding. Everybody wants to be involved,
Speaker 1: but um, there's a lot more to be developed there
Speaker 1: there is. And I wonder how backlash will or if
Speaker 1: it will will continue to grow. Yeah, And you know,
Speaker 1: I think many people are calling for more transparency, and
Speaker 1: we've been watching shares of Tesla. They were up more
Speaker 1: than four percent at their highs today, still up in
Speaker 1: what is an overall down market, still up almost one percent,
Speaker 1: and they are higher Following some upbeat news over the weekend,
Speaker 1: Timmy electric car maker reported record third quarter deliveries that
Speaker 1: easily beat the estimates that were out there. Thousand, three
Speaker 1: hundred cars were delivered worldwide in the third quarter, as
Speaker 1: Carol said, a record for the ev maker lad By
Speaker 1: CEO Elon Musk. Joining us now is Dana Hole, technology
Speaker 1: reporter at Bloomberg News. She joins us on the phone
Speaker 1: from our San Francisco bureau. Danna, when these numbers came
Speaker 1: by came out on Saturday, what was your action? Well,
Speaker 1: you know, it's interesting because so much of the game
Speaker 1: is about beating expectations, and so, you know, Bloomberg we
Speaker 1: had estimates of around two thousand. Tesla itself send estimates
Speaker 1: to investors of two one and then they beat quite handily. Um,
Speaker 1: which I actually wasn't surprised about. But I guess it
Speaker 1: makes me question, like how good is everybody's models? But
Speaker 1: I think that I think the reason why it's important
Speaker 1: is because, you know, for so long, one of the
Speaker 1: things that we've heard from you know, the bears or
Speaker 1: the short sellers is that there's got to be a
Speaker 1: demand cliff. I mean, how many people really are there
Speaker 1: in the world who want to buy new Tesla cars?
Speaker 1: And with more electric vehicles coming onto the market, like,
Speaker 1: at some point Tesla is going to hit this wall
Speaker 1: where they're not going to be able to continue to grow.
Speaker 1: And you know, not only did they grow, but they
Speaker 1: grew in the face of this chip shortage and all
Speaker 1: these logistical challenges, and they just did really well. I mean,
Speaker 1: they're really close now to making you know, a quarter
Speaker 1: of a million cars a year, which is just something
Speaker 1: that no one ever thought was possible, you know, a
Speaker 1: decade ago. So it bodes well for them going into
Speaker 1: the into the end of the year. Yeah, exactly. And
Speaker 1: what's interesting another story on the on the Blueberg talks
Speaker 1: about that this time it's hard being short it lately
Speaker 1: because it has had such a rally from it that
Speaker 1: was hit back in March. I think it's up more
Speaker 1: than Danna. You know, this company, you understand it, but
Speaker 1: you also see that it's becoming a marketplace that once
Speaker 1: was kind of all you know, Ellen kind of had
Speaker 1: it all to himself when it came to EV specially
Speaker 1: higher end uh evs. There's more coming into the market.
Speaker 1: Do you think he can maintain or are you hearing
Speaker 1: from folks who walk to this industry that he can
Speaker 1: maintain it? You know, I think what's interesting is I
Speaker 1: would like to kind of challenge everyone to reframe how
Speaker 1: they think about competition in the EV space, because it's
Speaker 1: not really about evis battling each other for this tiny
Speaker 1: slice of market share. It's really about evies growing their
Speaker 1: share of the overall automotive pie and competing with the
Speaker 1: ice vehicle. So I think that you know, you're going
Speaker 1: to see two things happen, Like, yes, there will be
Speaker 1: more electric vehicles to choose from, but the goal really is,
Speaker 1: you know, the next time you buy a car, will
Speaker 1: it be powered by gas or will it be powered
Speaker 1: by an electric vehicle? If it's power and so we're
Speaker 1: just gonna see electric vehicles continue to grow, and so
Speaker 1: they're just gonna be It's like the piece of the
Speaker 1: pie that everyone is fighting over is going to be
Speaker 1: a bigger piece of the pie, if that makes sense. Well,
Speaker 1: it's interesting, right, like how many different automakers do we
Speaker 1: have today, right for combtion combustion engines, Right, so why
Speaker 1: can't we have a bunch of very successful e V
Speaker 1: companies right? As more, because I know my next car
Speaker 1: I'm hoping, Tim, I don't know about you, but I
Speaker 1: hope it's an evy and just kind of planning on it.
Speaker 1: I do too. But here's the question, I don't know
Speaker 1: where I'm gonna Well, I live in New York City,
Speaker 1: so you know, it's hard to keep cars somewhere. Yeah,
Speaker 1: where do I plug it in? And that's that's the question.
Speaker 1: After we're not going to be allowed to buy a
Speaker 1: gas powered car anyway, right, New York has joined California
Speaker 1: in banning the sale of the car. So it's it's
Speaker 1: kind of time to think ahead, like what is your
Speaker 1: next car geting be? What kind of infrastructure do you
Speaker 1: need to support it? Um so, so, so I think that,
Speaker 1: I mean, I think and I think that Tesla does
Speaker 1: have first mover advantage, and you know, China is a
Speaker 1: big part of their growth, and so you know, it's
Speaker 1: hard for those of those who live in the United
Speaker 1: States to kind of always remember this, but they are
Speaker 1: now producing a ton of Model threes and wise out
Speaker 1: of that factory in Shanghai, both for Chinese consumers but
Speaker 1: also for export to Europe. And we just have to
Speaker 1: remember that, like the big battle over EVS is, it's
Speaker 1: really happening abroad as well as as well as here.
Speaker 1: I wonder what it's going to take though, to get
Speaker 1: it to a point where the vast were not even
Speaker 1: the vast majority, but the majority of cars that are purchased,
Speaker 1: the majority of new cars purchased our electric vehicles and
Speaker 1: not ice vehicles. Yeah, I think a lot of it
Speaker 1: really is just a consumer had it. I mean, I
Speaker 1: was thinking about this. You know, I have not flown
Speaker 1: very much at all recently, but I did fly to
Speaker 1: the East Coast over the summer to visit friends and family,
Speaker 1: and like, at the airport, like I wanted the most
Speaker 1: fuel efficient car possible, and the only thing that they
Speaker 1: had was a Toyota Prius, which is what I got.
Speaker 1: But like, there was no way for me to rent
Speaker 1: a Model three or a Chevy Bolt or a Nissan
Speaker 1: Leaf at the airport. And if I could have, like
Speaker 1: that would have been a really cool way for me
Speaker 1: to like experience the car before actually considering whether to
Speaker 1: own one. But it's still just not part of like
Speaker 1: our culture, and people are just used to going to
Speaker 1: gas stations and so making the leap to electric cars
Speaker 1: like it's just going to take a lot of consumer education.
Speaker 1: And that's why Tesla has been successful because so many
Speaker 1: owners basically serve as the facto brand ambassadors. Like, you know,
Speaker 1: someone gets a car, they invite their brother or their
Speaker 1: sister or their mom to take a ride, and then
Speaker 1: that's another person it's like, oh, wow, this is actually
Speaker 1: really cool, and so you know, it's all like word
Speaker 1: of mouth and the experience of having your button the
Speaker 1: seed and like going for a drive and realizing that
Speaker 1: you know, charging is not that big a deal and um,
Speaker 1: but you know you just need to do that on
Speaker 1: a much wider basis that we have now. I will say,
Speaker 1: I'm seeing a lot more cars in and around the
Speaker 1: New York metro area, and I agree with you that
Speaker 1: it used to be like the outlier. You'd meet somebody like, oh,
Speaker 1: what's it like, And now it's like my friends, Oh yeah,
Speaker 1: we have, and my husband's got one too, and everybody's
Speaker 1: kind of all buy in. Jill Webber just talking about
Speaker 1: our friend. Our friend just got one too. But it's
Speaker 1: like you have to live in the suburbs or I mean,
Speaker 1: look that's yeah to plug in, or you know, pay
Speaker 1: a lot of money for New York City garage in
Speaker 1: order to do that. Yeah, exactly, all right, they're working
Speaker 1: it out. Danni Hall always great when it comes to
Speaker 1: all things Testla Bloomberg Technology reporter, joining us from our
Speaker 1: San Francisco burope. You know Carol, the classic children's book,
Speaker 1: No Good, Very Bad day. Okay, Well, it's one of
Speaker 1: those days for Facebook. I don't know if people have
Speaker 1: logged into Facebook or attempted to use any of the
Speaker 1: Facebook family of services today, including What's App, Instagram, and
Speaker 1: of course Facebook Messenger, but there have been challenges as
Speaker 1: those have been offline for much of the day today,
Speaker 1: not to mention the other challenge that Facebook is dealing
Speaker 1: with today, cleaning up the mess thanks to a whistleblower
Speaker 1: who appeared last night on sixty Minutes and turned out
Speaker 1: she had been for months providing not just lawmakers but
Speaker 1: also the Wall Street Journal with internal documents about the
Speaker 1: way that Facebook balances profits and balances moderating content lots
Speaker 1: and lots of internal documents. Let's get the latest on
Speaker 1: the company, the stock, the concerns. Kurt Wagner is Bloomberg
Speaker 1: News tech reporter. He joins us on the phone in
Speaker 1: San Francisco. Kirk Uh, Kurt, it's nice to have you here. Um.
Speaker 1: The selling that we're seeing in Facebook shares. Mind you,
Speaker 1: it's a risk off trade and big tech in particular
Speaker 1: are really feeling the most pain today. But the trade
Speaker 1: has to do. I would assume with some of the
Speaker 1: news today, how do you see it? What are you hearing? Well?
Speaker 1: I would imagine that, Um, you know, this was a
Speaker 1: blower interview from last night got a ton of attention. Um.
Speaker 1: She is supposed to testify before the Senate subcommittee tomorrow
Speaker 1: about kind of the harms that Facebook products might have
Speaker 1: on children. And I do feel like that there's a
Speaker 1: bit of a common ground here between Democrats and the
Speaker 1: public pians that didn't always exist. I think they've they've
Speaker 1: oftentimes both disliked Facebook, but for different reasons. And I
Speaker 1: feel like in this case, you know, rallying around Facebook
Speaker 1: is a safety issue for children has kind of given
Speaker 1: them a little bit more um common ground, And so
Speaker 1: I imagine if you're someone who's investment in Facebook, you
Speaker 1: have to look at this and say, Okay, well, maybe
Speaker 1: this is the most likely we've seen so far for
Speaker 1: there to either be some type of regulation or new
Speaker 1: law that could actually hurt the business. This is speculation
Speaker 1: at this point of course, but I would imagine that
Speaker 1: that's weighing on people's mind. Okay, but we've seen this
Speaker 1: story play out before, whether it's Cambridge Analytic, the wake
Speaker 1: of January six, President Trump on the platform. I mean,
Speaker 1: the list goes on and on current when it comes
Speaker 1: to Facebook, and at the end of the day, uh,
Speaker 1: small businesses around the world do find it a very
Speaker 1: effective place to advertise because people go to these platforms,
Speaker 1: and I wonder if that changes in the wake of this,
Speaker 1: and as as as a result, investors have rewarded the company.
Speaker 1: I don't think it's going to change, and I think
Speaker 1: the only thing that would change it would be if, uh,
Speaker 1: you know, Congress passes some type of data collection law
Speaker 1: or some type of law around what can and should
Speaker 1: be used in ad targeting. UM. I think for now,
Speaker 1: if you are a small business, Facebook continues to be
Speaker 1: arguably the best place to go and spend your money.
Speaker 1: And that's not going to change even if you know
Speaker 1: there's public sentiment against Facebook. But again, I do think
Speaker 1: something that any type of regulation or law around what
Speaker 1: Facebook data the company uses for ads, I think that's
Speaker 1: where you could suddenly see a change because, um, that's
Speaker 1: going to impact the ability of these businesses to get
Speaker 1: their message out, right. I mean, I guess at some
Speaker 1: point Kurt, my husband, I were talking a lot after
Speaker 1: the sixteen minutes pieces. You know, is what is Facebook?
Speaker 1: What is it? Is it really a media company? Is it?
Speaker 1: You know, a social platform? You know, I'm thinking about
Speaker 1: the whistleblower, a place where people are allowed to just
Speaker 1: kind of dump stuff. You know, what's the responsibility of
Speaker 1: Facebook for this? Is? You know, what's put on its platform?
Speaker 1: It's it's a lot of questions and I guess we
Speaker 1: have to just figure out and we'll see what regulators
Speaker 1: ultimately decide it is and what it's responsible for. Right Yeah,
Speaker 1: I mean I think this is the ultimate challenge right
Speaker 1: now with the Federal Trade Commission. You know, they are
Speaker 1: basically they're doing Facebook to try and um break the
Speaker 1: company up. You know, They're they're claiming Facebook was anti
Speaker 1: competitive when it bought Instagram and when it bought WhatsApp.
Speaker 1: But the biggest challenge I see in that lawsuit is
Speaker 1: that they're having a tough time themselves describing what Facebook is,
Speaker 1: and they're saying it's a monopoly and personal social networking.
Speaker 1: But you know what, that they don't include messaging in that,
Speaker 1: they don't include necessarily video watching in that, right, I
Speaker 1: think of how much of Facebook is now just scrolling
Speaker 1: through watching videos similar to YouTube. So Facebook has gotten
Speaker 1: so big a touch of so many areas that it
Speaker 1: really has become hard to define and as a result,
Speaker 1: it's hard to regulate. Hey, the adages are they fixed?
Speaker 1: You know, real quickly? Five seconds? They're not fixed. That
Speaker 1: is about three minutes ago. They are not f Alright, alright,
Speaker 1: we'll watch for the headline to say whether or not
Speaker 1: they're fixed or still ongoing. Um. Kurt Wagner, thank you
Speaker 1: so much. He's tech reporter here at Bloomberg and new
Speaker 1: shares a Facebook still down, Tim five? Yeah, but you
Speaker 1: let me drive? Oh no, no, no, no, this is
Speaker 1: not a toy. All right, please, I'll do the riding revels.
Speaker 1: I want to drive. It's good question. Drive. This is
Speaker 1: the drive to the Clothes up on Bloomberg Radio. All right,
Speaker 1: we are just under ten minutes away from the close
Speaker 1: of trading on this Monday, October four. We're seeing right
Speaker 1: across the screen broad based declines on the DAO S
Speaker 1: and P five, d NASDAK and the Russell two thousand.
Speaker 1: Joining us as Ed Rosenberg. We're driving to the Clothes
Speaker 1: with him. He's head of e T F set American
Speaker 1: Century Investments, got two hundred forty billion dollars in assets
Speaker 1: under management. He joins us on the phone from Chicago. Ed,
Speaker 1: help us make sense of a day like today. What
Speaker 1: what's going through your mind right now? I mean, look,
Speaker 1: there's so many things going on outside of the market
Speaker 1: that are driving the market. Do we have inflation? Right?
Speaker 1: The debt ceiling keeps coming up, and Biden did a
Speaker 1: speech earlier, right, So people are taking potentially taking risk
Speaker 1: off the table and shifting money around into other places,
Speaker 1: whether it's riskless less risky assets, or looking for ways
Speaker 1: to take advantage of this market and maybe find different
Speaker 1: spots to move money into. As we keep seeing this,
Speaker 1: so it's not like they're necessarily it's interesting that you
Speaker 1: say that, right, shifting around, finding better opportunities at this
Speaker 1: point is maybe the changing psychology within the market. Whether
Speaker 1: it's for a day, for a week, for a month,
Speaker 1: we'll find out. But what's interesting is I looked at
Speaker 1: things like gold. We're not necessarily seeing a huge move
Speaker 1: into safe havens. I think that's the same case if
Speaker 1: you look at the dollar, at the same case for
Speaker 1: the treasury trade. It's not like we're getting the equal
Speaker 1: kind of trade that everybody's just running for the egg
Speaker 1: a dork. That's not what we're seeing today. No, and
Speaker 1: we're not seeing people, you know, obviously growth is the
Speaker 1: story today, right. The growth stocks are the ones that
Speaker 1: have been falling off the table. I mean even during
Speaker 1: the announcement we talked about I heard Apple, Facebook, um
Speaker 1: all mentioned in Amazon, all coming down. But it's where's
Speaker 1: the money going? Right? As people sell off, what are
Speaker 1: they looking to put it into. We've had these questions
Speaker 1: come up even before this last week week and a
Speaker 1: half where the market has been cycling. Where what do
Speaker 1: I do about inflation? Because it's been a story for
Speaker 1: a long time, and you would oil up today right
Speaker 1: and pushing higher, and it's higher than it's been for
Speaker 1: a while, and so what does this all mean to
Speaker 1: the end consumer and what does it mean for the investor?
Speaker 1: And I think when we talk about inflation, you're seeing
Speaker 1: people shifting more money into things like short duration bonds,
Speaker 1: right which obviously when you report on the stock market,
Speaker 1: we're not going to see that money in there because
Speaker 1: it's not driving those prices. And I think people have
Speaker 1: been looking for talking about this, but this market has
Speaker 1: given them a kickstart actually start putting into action what
Speaker 1: everyone's been talking about. And when you take a step
Speaker 1: back and you think about the health of the American economy,
Speaker 1: there aren't a lot of the signs that we're seeing
Speaker 1: right now that perhaps are spooking investors and spooking equity markets.
Speaker 1: Aren't they net net a pretty good thing about the
Speaker 1: recovery globally and here in the US. Yeah, I mean,
Speaker 1: I think overall, I mean, if you think about what's
Speaker 1: happening right through actually I'm just gonna go through the
Speaker 1: entire pandemic. The market has been strong throughout except for
Speaker 1: obviously the beginning of it with March. And we've seen
Speaker 1: you know, unemployment coming down over time, and we've seen
Speaker 1: rates while they haven't ticked up to the level that
Speaker 1: people said they would. I mean earlier this year they
Speaker 1: moved up, they came back down to around on the
Speaker 1: ten uere and now it's back up to Those aren't
Speaker 1: drastic moves. And overall, when you think of where inflation
Speaker 1: could take us, it could take us much higher. It
Speaker 1: feels like the economy is still healthy now. Granted, we
Speaker 1: do some things out there right the debt feeling limit
Speaker 1: is one of them. Does America actually default on its bonds?
Speaker 1: That is something that could happen, Although it never happened before,
Speaker 1: it's come up as a discussion point and all of
Speaker 1: a sudden the last hour it's always been saved. But
Speaker 1: if that happens, that's a whole different story of what's
Speaker 1: going to happen moving forward, as we talk about the
Speaker 1: health of the economy and the health of everything tied
Speaker 1: to the US, from the dollar to its own bonds. No,
Speaker 1: that's I mean, you're talking about then global investors, countries
Speaker 1: who plow a lot of money into US treasuries looking
Speaker 1: at the US in a very different way. So much
Speaker 1: you know whether or not it's no longer the safe
Speaker 1: haven that maybe everybody thought it was. Yes, exactly, and
Speaker 1: then what does that mean does money come out? Does
Speaker 1: it come out? I mean there's been that money has
Speaker 1: been going into from foreign investors for a while now,
Speaker 1: not even just treasuries, but even our own real estate, right,
Speaker 1: whether it's office buildings or even residential properties. Money has
Speaker 1: been moving in and what happened into all of it
Speaker 1: if we default? That's really the big question is that
Speaker 1: are we seeing those fears actually reflected though in the
Speaker 1: market right now? Because it seems to me like if
Speaker 1: the if if investors were really concerned about that, we'd
Speaker 1: we'd see even steeper declines today. I think you're right.
Speaker 1: I mean, I think, look, we've all lived through We've
Speaker 1: seen political posturing out of Washington before, whether it's today's
Speaker 1: the debt ceiling, right, whether it's other things, and I
Speaker 1: think to the market it's a lot of white noise,
Speaker 1: but there is some reaction to it, right. Inflation is
Speaker 1: something that's been talked about, and that's not quite political posturing.
Speaker 1: We've seen prices go up across the board in different commodities.
Speaker 1: And I know you mentioned gold, but if you think
Speaker 1: of the cost of some other commodities, right, they have
Speaker 1: risen steadily for a while now. The price of food
Speaker 1: for the consumer has gone up, the price of gas
Speaker 1: has gone up, So those things are real. And I
Speaker 1: think as these markets start to get a little edgy
Speaker 1: and we keep hearing more noise, I think people are
Speaker 1: looking for different places to put that money, whether it's
Speaker 1: cash or quite frankly, other investments that they feel are
Speaker 1: more safe haven. Does it matter to you? And just
Speaker 1: speaking of commodities, the Bloomberg Commodity Spot Index rising to
Speaker 1: a record, so it's playing out certainly in this trade
Speaker 1: just quickly, doesn't matter to you. I mean the S
Speaker 1: and P is down more than five from its early
Speaker 1: September high, DABS down about four and a half percent
Speaker 1: from its mid August high, than Nasdaq one hundred is
Speaker 1: down almost eight percent from its early September high. Uh,
Speaker 1: could there be more selling? Do you anticipate it? And
Speaker 1: just got about thirty seconds left here, Yeah, I mean,
Speaker 1: I think there's always I think in this environment, we're
Speaker 1: going to see a rocky road ahead and there's going
Speaker 1: to be more selling. We'll get a couple of days
Speaker 1: like we did Friday, where there's some buying, but I
Speaker 1: think we're going to see a rocky road ahead. And
Speaker 1: really I think the key going forward, it's going to
Speaker 1: be volatility. Well, I was just gonna say, you take
Speaker 1: me and set me up really well for the volatility.
Speaker 1: The volatility index is up two points now at twenty
Speaker 1: three and change, so we've definitely been seen ing um
Speaker 1: it up and down some big moves, so volatility is
Speaker 1: definitely on the rise. Ed Rosenberg always great to get
Speaker 1: your thoughts. Head of exchange traded Funds of American Century
Speaker 1: Investments two forty billion in assets under management, on the
Speaker 1: phone from Chicago. Thanks for listening to Bloomberg Business Week.
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