1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you, 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma wits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,560 Speaker 1: at Bloomberg dot com. Well, the Mexican pay so today 8 00:00:22,920 --> 00:00:26,439 Speaker 1: is close to its weakest since December, as trade tensions 9 00:00:26,560 --> 00:00:30,880 Speaker 1: emerge from the US and there are questions, frankly about 10 00:00:30,920 --> 00:00:33,559 Speaker 1: the health of the Mexican economy. Here joining us in 11 00:00:33,680 --> 00:00:36,760 Speaker 1: studios at Al Hasseani. He is senior interest rate and 12 00:00:36,840 --> 00:00:40,720 Speaker 1: currency analyst for Columbia thread Needle Investments uh from overseas 13 00:00:40,800 --> 00:00:44,120 Speaker 1: four and fifty nine billion dollars from Minneapolis. Although you 14 00:00:44,159 --> 00:00:47,159 Speaker 1: are here in our Bloomberg Atta Active Broker Studios, I 15 00:00:47,200 --> 00:00:49,600 Speaker 1: want to talk about the Mexican pay so. How much 16 00:00:49,640 --> 00:00:53,120 Speaker 1: of this has to do with the economy itself. We 17 00:00:53,200 --> 00:00:56,040 Speaker 1: did get last night Moodies and Fitch downgrading the nation 18 00:00:56,400 --> 00:00:59,120 Speaker 1: based on Pemax, it's stayed owned oil company, as well 19 00:00:59,160 --> 00:01:01,880 Speaker 1: as other economic headwins and how much is due to 20 00:01:02,360 --> 00:01:07,240 Speaker 1: potential ramifications from these US Mexico trade tensions. Yeah, it's 21 00:01:07,280 --> 00:01:09,640 Speaker 1: a At the moment, I put more weight on the 22 00:01:09,680 --> 00:01:13,400 Speaker 1: former in terms of the weakening economy, the contingental liabilities 23 00:01:13,440 --> 00:01:16,720 Speaker 1: from from PEMM x um UM, and the fact that 24 00:01:16,800 --> 00:01:19,760 Speaker 1: you know, both fiscal and monetary space in in Mexico 25 00:01:19,880 --> 00:01:23,000 Speaker 1: is shrinking relatively quickly. Uh. You know that to me 26 00:01:23,360 --> 00:01:25,560 Speaker 1: is kind of the key set of drivers for for 27 00:01:25,600 --> 00:01:28,800 Speaker 1: a weaker pay. So in terms of trade tensions with 28 00:01:28,800 --> 00:01:31,720 Speaker 1: the US, we actually haven't started pricing that into aggressively. 29 00:01:31,760 --> 00:01:34,319 Speaker 1: We haven't seen that in US risk assets. We still 30 00:01:34,360 --> 00:01:37,920 Speaker 1: haven't seen it fully priced into Mexican risk assets either. 31 00:01:37,959 --> 00:01:41,040 Speaker 1: So I think from from the perspective of upside downside 32 00:01:41,040 --> 00:01:43,360 Speaker 1: for the Mexico, for the Mexican pay so, I think 33 00:01:43,360 --> 00:01:46,720 Speaker 1: there's still more downside to come through. So. UM. Earlier 34 00:01:46,760 --> 00:01:48,800 Speaker 1: today we had the married drag from the e C 35 00:01:48,960 --> 00:01:52,000 Speaker 1: b Uh, you know, give his commentary. What did you 36 00:01:52,040 --> 00:01:54,920 Speaker 1: take away from it? Yeah? I thought, you know, this 37 00:01:55,040 --> 00:01:57,640 Speaker 1: was for me, one of the more interesting and one 38 00:01:57,640 --> 00:02:00,840 Speaker 1: of the more consequential meetings of the past two years. UM. 39 00:02:00,880 --> 00:02:03,560 Speaker 1: A number of things came out. First, we cemented the 40 00:02:03,600 --> 00:02:07,080 Speaker 1: fact that the path for policy rates really is flat 41 00:02:07,240 --> 00:02:09,920 Speaker 1: to lower from here. Um. You know, this is an 42 00:02:09,960 --> 00:02:12,520 Speaker 1: important change for them versus where they've been the course 43 00:02:12,520 --> 00:02:15,360 Speaker 1: of the past, you know, EU plus Uh, there's been 44 00:02:15,400 --> 00:02:18,960 Speaker 1: sort of an implicit upward bias to to the rate story, 45 00:02:19,000 --> 00:02:22,600 Speaker 1: and I think that's now gone. The discussion about deeper 46 00:02:22,639 --> 00:02:25,959 Speaker 1: negative rates and additional queis now firmly on the table, um, 47 00:02:26,040 --> 00:02:28,000 Speaker 1: And I think that's that's a new part of the 48 00:02:28,040 --> 00:02:31,679 Speaker 1: discussion as well. And um, you know, in terms of 49 00:02:31,720 --> 00:02:35,000 Speaker 1: the growth and the outlook, the growth on the inflation 50 00:02:35,040 --> 00:02:38,000 Speaker 1: mixing the outlook, you know, that continues to to weigh 51 00:02:38,000 --> 00:02:41,720 Speaker 1: to the downsides. In terms of downside risks continue to intensify. 52 00:02:41,760 --> 00:02:44,080 Speaker 1: So the e c B isn't it's in a tough spot. 53 00:02:44,160 --> 00:02:46,120 Speaker 1: It doesn't have a lot of tools. But in terms 54 00:02:46,160 --> 00:02:47,959 Speaker 1: of the tools that does have, I think the willingness 55 00:02:48,000 --> 00:02:50,560 Speaker 1: to use those tools to ease policy has increased. The 56 00:02:50,600 --> 00:02:52,800 Speaker 1: interesting thing to me, First of all, the ECB has 57 00:02:52,840 --> 00:02:54,400 Speaker 1: pushed on a string at this point, right, I mean, 58 00:02:54,400 --> 00:02:57,359 Speaker 1: if they cut rates further into negative territory, what's it 59 00:02:57,400 --> 00:03:00,000 Speaker 1: going to do, Because it's not exactly fostering loan growth 60 00:03:00,120 --> 00:03:03,040 Speaker 1: to a tremendous degree among consumers and risk your businesses. 61 00:03:03,600 --> 00:03:08,200 Speaker 1: Uh So that's that's a big question, um. But it's 62 00:03:08,200 --> 00:03:10,959 Speaker 1: also a question from your perspective, from the currency perspective today, 63 00:03:10,960 --> 00:03:14,440 Speaker 1: the euro strengthening versus the dollar, what gives that's not 64 00:03:14,520 --> 00:03:19,160 Speaker 1: what you would expect? Sure, so, um, two things. Let 65 00:03:19,240 --> 00:03:20,800 Speaker 1: me let me push back a little bit on the 66 00:03:20,960 --> 00:03:23,880 Speaker 1: on the credit growth story. The credit growth story has 67 00:03:23,880 --> 00:03:26,520 Speaker 1: actually been one of the bright spots for for the 68 00:03:26,520 --> 00:03:28,680 Speaker 1: Eurozone and the ECB, and it's been one of the 69 00:03:28,800 --> 00:03:32,760 Speaker 1: success points in terms of the successive TOELTRA programs. The 70 00:03:32,760 --> 00:03:35,560 Speaker 1: fact that the European banking system, which is relatively weak, 71 00:03:35,600 --> 00:03:39,680 Speaker 1: relatively under capitalized, has actually seen very solid loan growth. 72 00:03:40,640 --> 00:03:43,440 Speaker 1: And what the ECB doing right now is essentially risk management. 73 00:03:43,720 --> 00:03:47,360 Speaker 1: They're seeing these risks intensified to the downside, which essentially 74 00:03:47,400 --> 00:03:51,279 Speaker 1: means they can add best maintain their current policy stands um. 75 00:03:51,320 --> 00:03:54,120 Speaker 1: But more likely they will increase the amount of easing 76 00:03:54,440 --> 00:03:58,400 Speaker 1: just to keep the current level of credit growth alive. Um. 77 00:03:58,520 --> 00:04:00,960 Speaker 1: And one one interesting I think takeaway I think from 78 00:04:01,000 --> 00:04:03,600 Speaker 1: the last you know, take four or five you know 79 00:04:03,640 --> 00:04:06,160 Speaker 1: ECB discussions on the negative rate, is that they've come 80 00:04:06,200 --> 00:04:10,400 Speaker 1: to the conclusion that inaggregate, the impact of negative interest 81 00:04:10,520 --> 00:04:14,920 Speaker 1: rates on loan growth is negligible. They're definitely certain banks 82 00:04:15,040 --> 00:04:18,880 Speaker 1: where negative rates are eating into profitability, but the fact 83 00:04:18,920 --> 00:04:21,800 Speaker 1: that they're providing these teltrual loans is actually cushions the 84 00:04:21,800 --> 00:04:25,000 Speaker 1: banking system, and the banking overall continues to do quite well. 85 00:04:25,440 --> 00:04:29,160 Speaker 1: So it given the rising trade tensions around the world 86 00:04:29,200 --> 00:04:33,960 Speaker 1: relates China, Mexico, g maybe Indian so on, where do 87 00:04:34,040 --> 00:04:40,400 Speaker 1: you see value in emerging market currencies? So I one 88 00:04:40,440 --> 00:04:43,360 Speaker 1: of the more interesting I think turning points in the 89 00:04:43,360 --> 00:04:45,680 Speaker 1: course of the past you know, month or so has 90 00:04:45,760 --> 00:04:49,400 Speaker 1: been the break and the dollar. It's it's very early days, 91 00:04:49,920 --> 00:04:53,200 Speaker 1: but it does look like the buffer we have for 92 00:04:53,279 --> 00:04:57,480 Speaker 1: the dollar versus developed market currencies has shrunk significantly. We 93 00:04:57,560 --> 00:05:01,120 Speaker 1: had essentially US growth that was more solid than European 94 00:05:01,120 --> 00:05:03,200 Speaker 1: and Asian growth, and we had US interest rates that 95 00:05:03,200 --> 00:05:06,080 Speaker 1: were significantly higher both in real and nominal terms. That 96 00:05:06,160 --> 00:05:09,640 Speaker 1: buffer has shrunk very aggressively, with the Treasury rally and 97 00:05:09,720 --> 00:05:13,160 Speaker 1: with growth expectations for the US being being downgraded, and 98 00:05:13,520 --> 00:05:16,240 Speaker 1: we've seen that turn in the dollar versus the euro. 99 00:05:16,839 --> 00:05:19,320 Speaker 1: And Lisa's question earlier, this is one of the reasons 100 00:05:19,320 --> 00:05:22,039 Speaker 1: why the euro continues to rally today despite despite the 101 00:05:22,080 --> 00:05:25,599 Speaker 1: fact that these e CBS announced, you know, additional easing 102 00:05:25,600 --> 00:05:29,599 Speaker 1: measures UH U s real rates continue to come down. UM. 103 00:05:29,680 --> 00:05:31,839 Speaker 1: That weakness in the dollar, I think we'll start to 104 00:05:31,839 --> 00:05:34,280 Speaker 1: feed into e m f X. And the question is 105 00:05:34,400 --> 00:05:37,440 Speaker 1: are there idiosocratic stories where you know, real yields are 106 00:05:37,560 --> 00:05:41,039 Speaker 1: high enough UH to provide us with that buffer. A 107 00:05:41,120 --> 00:05:43,520 Speaker 1: couple of currencies rise to the top of my list. 108 00:05:43,560 --> 00:05:46,279 Speaker 1: I think, you know, Russia is a good spot UM, 109 00:05:46,480 --> 00:05:50,400 Speaker 1: limited external vulnerabilities, very good fiscal picture UH. Indonesia is 110 00:05:50,440 --> 00:05:52,800 Speaker 1: another one. Well, there's there's been an improvement in the 111 00:05:52,800 --> 00:05:55,880 Speaker 1: growth story UH. And increasingly we're starting to take a 112 00:05:55,920 --> 00:05:58,279 Speaker 1: look at South Africa in part because the currency is 113 00:05:58,320 --> 00:06:01,360 Speaker 1: weakened quite significantly over the course of the past month. 114 00:06:02,000 --> 00:06:04,120 Speaker 1: So from a value perspective, I think that that looks 115 00:06:04,160 --> 00:06:07,600 Speaker 1: quite attractive. The Turkish lira, the Turkish lera is is 116 00:06:07,680 --> 00:06:10,960 Speaker 1: interesting because look on on on most valuation metrics, it's 117 00:06:11,000 --> 00:06:15,159 Speaker 1: creates exceptionally cheap UM. And the question is is the 118 00:06:15,200 --> 00:06:17,960 Speaker 1: current account or it's some of the external vulnerabilities shrinking 119 00:06:18,000 --> 00:06:21,120 Speaker 1: fast enough to warrant the carry Are you gonna ever 120 00:06:21,160 --> 00:06:25,279 Speaker 1: get will you ever get paid that carry? Um? And 121 00:06:25,480 --> 00:06:28,880 Speaker 1: you know increasingly it's not terrible. UM, I would say 122 00:06:28,920 --> 00:06:31,000 Speaker 1: the picture there is becoming a little bit more positive. 123 00:06:31,680 --> 00:06:35,200 Speaker 1: Real rates remain quite high. Obviously there's policy risk with 124 00:06:35,279 --> 00:06:38,919 Speaker 1: respect um to to the central banks next set of actions. 125 00:06:39,160 --> 00:06:41,159 Speaker 1: Given an inflation that's coming down, there will be under 126 00:06:41,160 --> 00:06:43,919 Speaker 1: pressure to cut rates, which will be negative for the currency. 127 00:06:44,040 --> 00:06:46,680 Speaker 1: Policy risk, by the way, is the understatement of the 128 00:06:46,800 --> 00:06:49,960 Speaker 1: year when it comes to Ara to Wan's regime. But 129 00:06:50,000 --> 00:06:52,919 Speaker 1: go on, but look, I mean, look, we're we're in 130 00:06:52,920 --> 00:06:55,520 Speaker 1: in in in e M space. This this is what 131 00:06:55,680 --> 00:06:58,360 Speaker 1: you live with, and this is what you're getting paid for. UM. 132 00:06:59,200 --> 00:07:03,160 Speaker 1: Policy risk in Turkey and in Argentina taken another place 133 00:07:03,680 --> 00:07:06,960 Speaker 1: where you have high high high carry this one UM, 134 00:07:07,000 --> 00:07:10,600 Speaker 1: I would say, of course Turkey and Argentina are at 135 00:07:10,640 --> 00:07:13,520 Speaker 1: an extreme place in in in the m f X 136 00:07:13,600 --> 00:07:17,520 Speaker 1: spectrum high risk, exceptionally high carry uh. And it's not 137 00:07:17,640 --> 00:07:19,480 Speaker 1: very clear that you'll you'll make money over the next 138 00:07:19,480 --> 00:07:21,280 Speaker 1: twelve months in those places. So I'm gonna take the 139 00:07:21,400 --> 00:07:23,520 Speaker 1: risk and not clear that I'm going to make money. 140 00:07:23,560 --> 00:07:24,960 Speaker 1: So I think I know where to kind of avoid 141 00:07:25,000 --> 00:07:27,520 Speaker 1: a little bit. That's Hey, there's no there's no big 142 00:07:27,520 --> 00:07:30,320 Speaker 1: return without big risk big So there you go, right, 143 00:07:30,360 --> 00:07:33,000 Speaker 1: I mean yep, ed Alf HUSSAINI thanks so much for 144 00:07:33,080 --> 00:07:36,160 Speaker 1: joining us as a senior interest rate and currency analyst 145 00:07:36,200 --> 00:07:39,960 Speaker 1: for Clumbia thread Needle based in Minneapolish thread Needle is 146 00:07:40,200 --> 00:07:42,360 Speaker 1: but joining us here in our Bloomberg Interactor Broker studio. 147 00:07:42,400 --> 00:07:45,280 Speaker 1: Thank you so much. Just looking at the currencies here, um, 148 00:07:45,760 --> 00:07:48,920 Speaker 1: you know the your euro up slightly, the pound up today, 149 00:07:49,280 --> 00:07:52,280 Speaker 1: but you mentioned the ruble. The rubles also up a 150 00:07:52,320 --> 00:07:57,880 Speaker 1: little bit as well. Well. Back at the day when 151 00:07:57,880 --> 00:08:00,640 Speaker 1: I wanted to, I guess go to a Broadway show, 152 00:08:00,640 --> 00:08:02,680 Speaker 1: I'd stand in line in Times Square at the t 153 00:08:02,800 --> 00:08:05,200 Speaker 1: K T S kind of thing and wondering why am 154 00:08:05,200 --> 00:08:08,080 Speaker 1: I doing this? This is so inconvenient. But I'm guessing 155 00:08:08,120 --> 00:08:10,240 Speaker 1: there's a technology out there that can fix that, and 156 00:08:10,280 --> 00:08:12,960 Speaker 1: in fact there is. We welcome Brian Fenty. Brian is 157 00:08:12,960 --> 00:08:15,920 Speaker 1: a co founder and CEO of Today Ticks, based in 158 00:08:16,120 --> 00:08:18,239 Speaker 1: New York City, joining us here in a Bloomberg Interactive 159 00:08:18,240 --> 00:08:21,440 Speaker 1: Broker studio. Brian, thanks so much for joining us today Ticks. 160 00:08:21,680 --> 00:08:25,000 Speaker 1: Does that solve my problem? We try to solve your problem. Yes, 161 00:08:25,040 --> 00:08:28,400 Speaker 1: we started about six years ago to take the t 162 00:08:28,480 --> 00:08:31,880 Speaker 1: KTS booth and do all the heavy lifting of searching 163 00:08:31,920 --> 00:08:34,560 Speaker 1: for discounts and putting it right in your in your 164 00:08:34,600 --> 00:08:37,079 Speaker 1: hand through a mobile app. And of course now we're 165 00:08:37,080 --> 00:08:39,520 Speaker 1: on a website and we're in seventeen cities and doing 166 00:08:39,520 --> 00:08:42,080 Speaker 1: a lot more than just that. Um. But that's really 167 00:08:42,080 --> 00:08:44,800 Speaker 1: what it is. It's best prices, best seats, last minute 168 00:08:44,800 --> 00:08:48,720 Speaker 1: on demand. How did you create this? Well, my partner 169 00:08:48,720 --> 00:08:52,679 Speaker 1: and I were not technologists, um, which is always a challenge. Actually, 170 00:08:52,720 --> 00:08:55,520 Speaker 1: you know, everybody always talks about the technical founder. Um. 171 00:08:55,600 --> 00:08:59,559 Speaker 1: We were Broadway producers, we were private equity guys UM 172 00:08:59,679 --> 00:09:01,320 Speaker 1: and I worked for the New York Yankees for a 173 00:09:01,320 --> 00:09:04,120 Speaker 1: couple of years, so we had very diverse experience, and 174 00:09:04,160 --> 00:09:06,880 Speaker 1: we knew that Broadway was a broken business in terms 175 00:09:06,880 --> 00:09:09,760 Speaker 1: of getting millennials to the table, um, and so we 176 00:09:09,880 --> 00:09:13,199 Speaker 1: sort of penciled out what was Uber doing an open 177 00:09:13,240 --> 00:09:16,480 Speaker 1: table and Airbnb and these great mobile millennial companies what 178 00:09:16,520 --> 00:09:18,960 Speaker 1: were they doing? And the answer was just great, simple 179 00:09:19,000 --> 00:09:22,920 Speaker 1: seamless technology, having everything at your fingertips and making sure 180 00:09:22,960 --> 00:09:26,560 Speaker 1: that it was a complete solution. So talking about talking 181 00:09:26,559 --> 00:09:28,280 Speaker 1: about the business and Broadway, is it is? It a 182 00:09:28,280 --> 00:09:31,000 Speaker 1: growing business. Is a big business? Is this something that 183 00:09:31,240 --> 00:09:34,319 Speaker 1: people need a technical solution for? It's an unbelievable business. 184 00:09:34,360 --> 00:09:36,640 Speaker 1: It's it's often overlooked. So you know, the first piece 185 00:09:36,679 --> 00:09:39,400 Speaker 1: of it is Broadway, meaning the the five block radius 186 00:09:39,400 --> 00:09:43,000 Speaker 1: in New York, and that's, you know, a multibillion dollar industry. 187 00:09:43,120 --> 00:09:45,680 Speaker 1: It's grown more this year than it did in any 188 00:09:45,679 --> 00:09:50,439 Speaker 1: other year. It's it's honestly, it's a resilient potter to 189 00:09:50,840 --> 00:09:53,800 Speaker 1: Hamilton's and Deer of Enhanson. It's a great it's the 190 00:09:53,840 --> 00:09:56,240 Speaker 1: golden age of Broadway right now. It's just an amazing, 191 00:09:56,240 --> 00:09:58,959 Speaker 1: amazing time. Um. So, it's a huge industry. But you 192 00:09:59,000 --> 00:10:01,079 Speaker 1: know most people don't know is it's twice the size 193 00:10:01,080 --> 00:10:03,439 Speaker 1: of the film business on a revenue basis in the US. 194 00:10:03,880 --> 00:10:06,760 Speaker 1: Um So it's a big business. Um But it's hard 195 00:10:06,800 --> 00:10:10,280 Speaker 1: to access. It feels inaccessible to people, it feels expensive, 196 00:10:10,360 --> 00:10:12,960 Speaker 1: it feels hard to engage with. And so we're trying 197 00:10:13,000 --> 00:10:15,320 Speaker 1: to break down those walls. And it's not just Broadway, right, 198 00:10:15,320 --> 00:10:18,000 Speaker 1: I mean, it's it's sort of theater. More broadly, are 199 00:10:18,040 --> 00:10:22,040 Speaker 1: you thinking of expanding into sports or into music or 200 00:10:22,120 --> 00:10:25,199 Speaker 1: other types of live ventures. So we started with theater 201 00:10:25,280 --> 00:10:28,839 Speaker 1: traditionally plays musicals. We've gone to performing arts now and 202 00:10:28,880 --> 00:10:31,320 Speaker 1: we've sort of expanded our definition as we go to markets. 203 00:10:31,320 --> 00:10:34,040 Speaker 1: So when we went to Chicago, comedy is everywhere. So 204 00:10:34,080 --> 00:10:36,559 Speaker 1: if you don't have the second city, you're nobody. And 205 00:10:36,600 --> 00:10:39,040 Speaker 1: so we went to Chicago. We got comedy, We have opera, 206 00:10:39,040 --> 00:10:42,160 Speaker 1: we have dance, improv immersive sleep, no more, you know, 207 00:10:42,240 --> 00:10:45,240 Speaker 1: all of these different types of experiences. So really, as 208 00:10:45,280 --> 00:10:47,800 Speaker 1: I say to our team, we don't compete with ticketing companies. 209 00:10:47,880 --> 00:10:51,120 Speaker 1: We compete with a picture of Margarita's and Netflix. That is, 210 00:10:51,160 --> 00:10:56,120 Speaker 1: you know, ultimately what we're trying to do. That's stiff competition. So, Brian, 211 00:10:56,400 --> 00:10:58,920 Speaker 1: I guess thinking about Broadway per se that you know 212 00:10:58,960 --> 00:11:01,640 Speaker 1: the five square blocks. You know, as my understanding is 213 00:11:01,640 --> 00:11:03,280 Speaker 1: the kind of the theaters are kind of controlled by 214 00:11:03,320 --> 00:11:05,480 Speaker 1: a handful of companies or a few companies. Did they 215 00:11:05,520 --> 00:11:07,640 Speaker 1: welcome you, did they embrace you today? Where they concerned 216 00:11:07,679 --> 00:11:08,960 Speaker 1: about you? How do they how do you kind of 217 00:11:08,960 --> 00:11:11,480 Speaker 1: work with a big theater company? They did not embrace 218 00:11:11,520 --> 00:11:13,560 Speaker 1: this at the beginning. I'll tell you you know, this 219 00:11:13,640 --> 00:11:16,760 Speaker 1: is a true story of disrupting. When we went and 220 00:11:16,760 --> 00:11:18,760 Speaker 1: met with the three theater owners, you know. The first 221 00:11:18,760 --> 00:11:22,120 Speaker 1: theater owners said, I owned the tickets, you don't have them, goodbye. 222 00:11:22,200 --> 00:11:26,040 Speaker 1: Door shut. The second theater owner that we talked to said, millennials, 223 00:11:26,040 --> 00:11:28,880 Speaker 1: who needs them? They'll become adults someday. Shut the door. 224 00:11:29,000 --> 00:11:31,360 Speaker 1: The third theater owners said mobile, who needs that? No 225 00:11:31,400 --> 00:11:34,840 Speaker 1: one's going to spend money on it. And so we said, okay, guys, fine, 226 00:11:35,240 --> 00:11:38,040 Speaker 1: if we go try to build this, will you support us? 227 00:11:38,320 --> 00:11:40,760 Speaker 1: And they said, you know what, go try to build, Go, 228 00:11:40,840 --> 00:11:43,240 Speaker 1: try to build the technology. And so for the last 229 00:11:43,240 --> 00:11:45,120 Speaker 1: six years that's what we've been doing. And now five 230 00:11:45,160 --> 00:11:47,800 Speaker 1: and a half million users later, Um, I think we've 231 00:11:47,800 --> 00:11:49,920 Speaker 1: proven that there really is a space for this. And 232 00:11:49,920 --> 00:11:53,000 Speaker 1: you did just raise seventy three million dollars from Great 233 00:11:53,040 --> 00:11:56,680 Speaker 1: Health Partners that which is a private equity company. What 234 00:11:56,720 --> 00:11:59,240 Speaker 1: are you gonna do with the money? So I'd say 235 00:11:59,360 --> 00:12:02,920 Speaker 1: three may vehicles. One is talent talent. Talent talent, make 236 00:12:02,960 --> 00:12:05,760 Speaker 1: sure that we have the smartest people, the best subject 237 00:12:05,760 --> 00:12:09,440 Speaker 1: matter experts terms of tech are in terms of tech, 238 00:12:09,520 --> 00:12:13,720 Speaker 1: product growth, marketing. So it's amazing is we have theaters 239 00:12:13,720 --> 00:12:15,520 Speaker 1: that work with us across the country and not a 240 00:12:15,559 --> 00:12:18,640 Speaker 1: single salesperson on our team. And so that hopefully speaks 241 00:12:18,679 --> 00:12:22,040 Speaker 1: to the brand that we've built among the venues, UM 242 00:12:22,080 --> 00:12:25,439 Speaker 1: and our audiences. So talent is number one. UM. Number 243 00:12:25,480 --> 00:12:27,680 Speaker 1: two is content, making sure that we have the best 244 00:12:27,720 --> 00:12:30,640 Speaker 1: content out there. UM. Millennials do hold you to a 245 00:12:30,760 --> 00:12:34,400 Speaker 1: very high standard in terms of the types of content, programming, 246 00:12:34,440 --> 00:12:37,199 Speaker 1: exclusivity that you have. And then the third piece is 247 00:12:37,240 --> 00:12:40,040 Speaker 1: just data. Data, data, So making sure that we use 248 00:12:40,160 --> 00:12:43,719 Speaker 1: data to make the experience seamless for everyone, so that 249 00:12:43,800 --> 00:12:45,840 Speaker 1: if you open the app, it's different from when I 250 00:12:45,920 --> 00:12:47,600 Speaker 1: open the app, and we can see the shows that 251 00:12:47,640 --> 00:12:49,720 Speaker 1: we want to see. So when I think of the 252 00:12:49,760 --> 00:12:53,040 Speaker 1: ticketing experience, certainly in this country, really even globally, I 253 00:12:53,040 --> 00:12:55,880 Speaker 1: think ticket master. So how do you guys compete against 254 00:12:55,880 --> 00:12:58,960 Speaker 1: the ticket masters of the world. So what we learned 255 00:12:59,120 --> 00:13:02,400 Speaker 1: is that primary ticketers, because they have to do so 256 00:13:02,440 --> 00:13:06,240 Speaker 1: many different things, they're selling for sports, concerts, large venues, 257 00:13:06,240 --> 00:13:09,760 Speaker 1: small venues, their technology isn't great. And and how do 258 00:13:09,760 --> 00:13:12,680 Speaker 1: we validate that it takes seven to nine minutes to 259 00:13:12,720 --> 00:13:15,720 Speaker 1: buy a ticket on a major primary ticketing platform on 260 00:13:15,760 --> 00:13:18,920 Speaker 1: today takes it's thirty seconds or less. UM. So really 261 00:13:18,920 --> 00:13:21,559 Speaker 1: what we do is we kill you with convenience UM 262 00:13:21,600 --> 00:13:23,480 Speaker 1: and we try to bring you through that funnel in 263 00:13:23,480 --> 00:13:25,679 Speaker 1: a big way, and I think that's why we have 264 00:13:25,800 --> 00:13:28,760 Speaker 1: such high ratings. Are our net promoter scores about four 265 00:13:28,800 --> 00:13:32,880 Speaker 1: times the next highest primary ticketer. How do you make money? 266 00:13:33,120 --> 00:13:35,880 Speaker 1: Consumer fees? Um and And what I'll tell you is, 267 00:13:35,920 --> 00:13:38,360 Speaker 1: though we make it slow and steady, so we have 268 00:13:38,800 --> 00:13:41,360 Speaker 1: fixed fees for our consumers. We have the lowest fees 269 00:13:41,360 --> 00:13:44,040 Speaker 1: in the industry. And our view is to build a 270 00:13:44,080 --> 00:13:47,960 Speaker 1: community of as many theater goers, arts goers and quite frankly, 271 00:13:48,000 --> 00:13:50,400 Speaker 1: anyone who wants to do something in a night, we're 272 00:13:50,480 --> 00:13:53,040 Speaker 1: your customer, were your place to go, and uh we 273 00:13:53,120 --> 00:13:56,160 Speaker 1: grow from there. I know the Tony's are Sunday night, 274 00:13:56,200 --> 00:13:59,960 Speaker 1: I believe on CBS when Broadway comes together to celebrate 275 00:14:00,280 --> 00:14:03,280 Speaker 1: all the great work of the year, does that drive business? 276 00:14:03,280 --> 00:14:05,679 Speaker 1: If a play wins Best Musical or Best Picture? How 277 00:14:05,679 --> 00:14:09,440 Speaker 1: important is that? There's a few awards. So obviously it's 278 00:14:09,520 --> 00:14:11,719 Speaker 1: the moment of the year for for theater and it's 279 00:14:11,760 --> 00:14:14,320 Speaker 1: an amazing evening and this year James Cordon's hosting, so 280 00:14:14,360 --> 00:14:16,760 Speaker 1: it'll be a blast um. But what I'll say is 281 00:14:16,760 --> 00:14:19,120 Speaker 1: there's one or two awards that really move the needle. 282 00:14:19,120 --> 00:14:21,960 Speaker 1: And as you say it's best musical. Um, it's best 283 00:14:21,960 --> 00:14:24,400 Speaker 1: revival of a musical, it's best play. Those are the 284 00:14:24,440 --> 00:14:27,880 Speaker 1: three awards that can actually make what we call boffo, 285 00:14:28,080 --> 00:14:32,160 Speaker 1: but you know, make the box office really hit. Thank 286 00:14:32,160 --> 00:14:33,800 Speaker 1: you so much for being with us. I have to 287 00:14:33,840 --> 00:14:37,480 Speaker 1: say Today Ticks is something that I've just recently come 288 00:14:37,520 --> 00:14:42,840 Speaker 1: to learn about and I'm excited. Still there, no mobile, 289 00:14:42,880 --> 00:14:46,720 Speaker 1: no website, Still waiting in line Brian Fenti, co founder 290 00:14:46,720 --> 00:14:49,960 Speaker 1: and CEO of Today Ticks, joining us here in our 291 00:14:50,000 --> 00:14:54,600 Speaker 1: Bloombergetter Active Brokers Studios disrupting the theater industry. Right now, 292 00:14:54,640 --> 00:14:57,720 Speaker 1: we're looking at a market still searching for direction, taking 293 00:14:57,720 --> 00:15:01,400 Speaker 1: a breather after a series of risk off moves and 294 00:15:01,400 --> 00:15:05,000 Speaker 1: then fluctuating around coming up though, the focus really is 295 00:15:05,000 --> 00:15:07,960 Speaker 1: going to be always on Washington, d C. Which is 296 00:15:07,960 --> 00:15:11,160 Speaker 1: also the focus of markets right now at Bloomberg Politics, policy, 297 00:15:11,600 --> 00:15:14,320 Speaker 1: power and law. Amy Morris, what do you have on? 298 00:15:15,560 --> 00:15:18,520 Speaker 1: So she's gonna be talking about US and Mexico extending 299 00:15:18,560 --> 00:15:21,880 Speaker 1: their talks, which, of course markets are expecting that there 300 00:15:21,880 --> 00:15:23,840 Speaker 1: will be some kind of deal. Also, we got some 301 00:15:23,920 --> 00:15:27,360 Speaker 1: numbers with respect to the trade deficits showing as stalling 302 00:15:27,480 --> 00:15:31,720 Speaker 1: out of imports and exports. We're gonna be looking ahead 303 00:15:31,960 --> 00:15:35,800 Speaker 1: to the jobs data as well. Meanwhile, we are looking 304 00:15:35,880 --> 00:15:39,080 Speaker 1: at a day finishing up. I mean, honestly, today, I'm 305 00:15:39,120 --> 00:15:41,920 Speaker 1: I find it fascinating to me that we're taking a 306 00:15:41,960 --> 00:15:45,800 Speaker 1: breather and yet there still is complacency there. Iss. Deals 307 00:15:45,840 --> 00:15:48,000 Speaker 1: are gonna get done. Deals are gonna get done. And 308 00:15:48,080 --> 00:15:51,240 Speaker 1: Lisa brom WIT's along with Paul Sweeney, this is Bloomberg Markets. 309 00:15:54,960 --> 00:15:58,920 Speaker 1: Tensions are rising between the US and Mexico. This certainly 310 00:15:59,040 --> 00:16:03,600 Speaker 1: has hit particularly the automaker shares pretty hard, considering how 311 00:16:03,720 --> 00:16:07,520 Speaker 1: much supply chain or sort of intra company activity goes 312 00:16:07,640 --> 00:16:10,160 Speaker 1: cross border. Joining us to talk about what the effect 313 00:16:10,240 --> 00:16:13,360 Speaker 1: is on small businesses is Hector Baretto. He's chairman of 314 00:16:13,400 --> 00:16:18,760 Speaker 1: the Latino Coalition, former US Small Business Administrator under George W. 315 00:16:19,040 --> 00:16:23,720 Speaker 1: Bush through two thousand and six, joining us from Irvine, California. Hector, 316 00:16:23,760 --> 00:16:26,160 Speaker 1: I'm so glad that you're here with us. What are 317 00:16:26,200 --> 00:16:29,120 Speaker 1: you hearing from the people who you represent small business 318 00:16:29,120 --> 00:16:33,480 Speaker 1: owners about the potential impact of these additional tariffs on 319 00:16:33,600 --> 00:16:38,280 Speaker 1: goods from Mexico. Well, they're very concerned, and as you know, uh, 320 00:16:38,280 --> 00:16:41,720 Speaker 1: probably of all businesses in the United states that do 321 00:16:41,880 --> 00:16:46,960 Speaker 1: international trade are small businesses. They've seen their businesses grow 322 00:16:47,080 --> 00:16:49,280 Speaker 1: over the last six months or so and they don't 323 00:16:49,280 --> 00:16:51,600 Speaker 1: want to see that stop. So they really feel we're 324 00:16:51,640 --> 00:16:54,400 Speaker 1: kind of at a tipping point right now. So hector, 325 00:16:54,400 --> 00:16:56,400 Speaker 1: how about on the other side of the border, what 326 00:16:56,440 --> 00:16:58,760 Speaker 1: are you hearing from your contacts there about how the 327 00:16:58,840 --> 00:17:03,960 Speaker 1: business community in Mexico views kind of these rising trade tensions. Well, 328 00:17:04,000 --> 00:17:06,119 Speaker 1: I was just down there last week. We we opened 329 00:17:06,160 --> 00:17:08,880 Speaker 1: up an office for our organization, and two months ago 330 00:17:08,920 --> 00:17:12,720 Speaker 1: I met with the President of Mexico. They were cautiously optimistic. 331 00:17:12,800 --> 00:17:15,399 Speaker 1: You know, they've kind of gotten used to some of 332 00:17:15,440 --> 00:17:18,679 Speaker 1: the rhetoric, but they're much more paying attention to the actions. 333 00:17:18,680 --> 00:17:21,159 Speaker 1: They know that, you know, they can't respond to every tweet, 334 00:17:21,200 --> 00:17:25,040 Speaker 1: every press release, every news uh, you know, but they've 335 00:17:25,160 --> 00:17:28,119 Speaker 1: re sien some positive signs and obviously a lot of 336 00:17:28,160 --> 00:17:31,520 Speaker 1: those leaders, business leaders and government leaders are in Washington 337 00:17:31,640 --> 00:17:34,399 Speaker 1: today to talk to their counterparts and see if we 338 00:17:34,440 --> 00:17:36,480 Speaker 1: can get to some kind of a compromise or solution 339 00:17:36,520 --> 00:17:39,440 Speaker 1: on this issue. So it's very interesting because we hear 340 00:17:39,480 --> 00:17:43,800 Speaker 1: about positive signs from people, and certainly the market doesn't 341 00:17:43,840 --> 00:17:46,240 Speaker 1: think that there's going to be some sort of increase 342 00:17:46,280 --> 00:17:49,280 Speaker 1: in tariffs in Mexico that substantial at least, that's what 343 00:17:49,400 --> 00:17:51,520 Speaker 1: a lot of analysts and fund managers seemed to be 344 00:17:51,520 --> 00:17:54,680 Speaker 1: saying this morning. And yet President Trump seems to be 345 00:17:54,760 --> 00:17:56,879 Speaker 1: the one driving the bus here, and it's sort of 346 00:17:56,960 --> 00:17:59,800 Speaker 1: unclear he's not backed away from his dance on tariff's right. Well, 347 00:18:00,160 --> 00:18:03,880 Speaker 1: you know, uh, ironically, uh, in the last quarter Mexico, 348 00:18:04,000 --> 00:18:07,600 Speaker 1: with our largest trading partner, we overtook China. So you know, 349 00:18:07,880 --> 00:18:10,720 Speaker 1: they're starting to see some positive signs and again they 350 00:18:10,760 --> 00:18:12,600 Speaker 1: don't want to see that derailed. And at the end 351 00:18:12,640 --> 00:18:14,880 Speaker 1: of the day, you're right, President is going to decide, 352 00:18:15,119 --> 00:18:17,320 Speaker 1: but there's gonna be other voices are gonna be part 353 00:18:17,320 --> 00:18:20,000 Speaker 1: of this equation. You're starting to see members of Congress, 354 00:18:20,040 --> 00:18:22,080 Speaker 1: both sides of the ail, that are very concerned about this. 355 00:18:22,160 --> 00:18:26,000 Speaker 1: They're tracking this issue very very closely. And the last 356 00:18:26,000 --> 00:18:27,919 Speaker 1: thing we need to do is put a break on 357 00:18:28,000 --> 00:18:30,440 Speaker 1: this economy. The economy has been pretty good over the 358 00:18:30,520 --> 00:18:33,920 Speaker 1: last you know, year, better than we've seen it over 359 00:18:34,040 --> 00:18:37,560 Speaker 1: the preceding six seven years, and so uh, you know, 360 00:18:37,600 --> 00:18:40,880 Speaker 1: this is the wrong time to actually, you know, derail 361 00:18:40,960 --> 00:18:44,720 Speaker 1: the economy. And we're both affected. You know, days when 362 00:18:44,720 --> 00:18:47,119 Speaker 1: we could say, oh, they're gonna be hurt more than 363 00:18:47,160 --> 00:18:48,959 Speaker 1: we are. I don't see it that way. I think 364 00:18:49,000 --> 00:18:52,440 Speaker 1: we're very interdependent and if one side gets hurt, the 365 00:18:52,480 --> 00:18:53,960 Speaker 1: other side is gonna get hurt. And at the end 366 00:18:54,000 --> 00:18:56,120 Speaker 1: of the day, you know that those costs are gonna 367 00:18:56,119 --> 00:18:58,760 Speaker 1: be passed on to consumers. So you know, there's some 368 00:18:58,800 --> 00:19:02,320 Speaker 1: big stakes at hand right now. So the hector, the 369 00:19:02,440 --> 00:19:04,719 Speaker 1: businesses that you represent, what are they how are they 370 00:19:04,760 --> 00:19:08,760 Speaker 1: thinking about the Trump administration's you know, use of tariffs 371 00:19:08,760 --> 00:19:12,800 Speaker 1: to kind of curb immigration. Well it can. Well, they 372 00:19:12,800 --> 00:19:15,760 Speaker 1: don't like the fact that these two issues are being conjoined. 373 00:19:15,880 --> 00:19:18,159 Speaker 1: I was in the White House yesterday. I'm actually in 374 00:19:18,240 --> 00:19:21,800 Speaker 1: d C. And they're doing everything they could to say, look, 375 00:19:21,800 --> 00:19:24,119 Speaker 1: there are two separate issues. We're going to continue on 376 00:19:24,160 --> 00:19:26,600 Speaker 1: the trade track. We want U s m C A pass, 377 00:19:26,880 --> 00:19:29,720 Speaker 1: but we've got to deal with this immigration crisis. And 378 00:19:29,760 --> 00:19:32,080 Speaker 1: it is a crisis. You can understand why there's so 379 00:19:32,160 --> 00:19:35,240 Speaker 1: much frustration in the administration. They have not been able 380 00:19:35,280 --> 00:19:38,280 Speaker 1: to turn this thing around. For months. People were saying, 381 00:19:38,359 --> 00:19:39,879 Speaker 1: is Oh, it's not a big deal, it's going to 382 00:19:40,000 --> 00:19:42,360 Speaker 1: go away. It's just seasonal. We haven't seen that. We've 383 00:19:42,359 --> 00:19:45,000 Speaker 1: seen spikes at the border that we've never seen before. 384 00:19:45,080 --> 00:19:48,399 Speaker 1: So there is a mutual responsibility on both sides of 385 00:19:48,400 --> 00:19:51,360 Speaker 1: the border. Mexico can do a better job of enforcing 386 00:19:51,400 --> 00:19:54,240 Speaker 1: their southern border. We need to work with Mexico as 387 00:19:54,240 --> 00:19:57,040 Speaker 1: our number one trading partner and work on things like 388 00:19:57,440 --> 00:19:59,400 Speaker 1: you know, we used to have something called the Medida 389 00:19:59,440 --> 00:20:01,920 Speaker 1: initiative where we would work with Mexico, and we've done 390 00:20:01,920 --> 00:20:03,639 Speaker 1: that with other countries. We need to go back to 391 00:20:03,720 --> 00:20:07,439 Speaker 1: those kinds of cooperative efforts. I guess that. You know, 392 00:20:07,480 --> 00:20:11,000 Speaker 1: it's interesting because if you are in Washington, what is 393 00:20:11,040 --> 00:20:15,040 Speaker 1: sort of the consensus among the people you're speaking with 394 00:20:15,280 --> 00:20:18,919 Speaker 1: who are within the administration as to the path of 395 00:20:18,960 --> 00:20:20,960 Speaker 1: these negotiations, Because it seems like this kind of came 396 00:20:21,320 --> 00:20:22,520 Speaker 1: I don't want to say out of the blue, but 397 00:20:22,720 --> 00:20:25,600 Speaker 1: kind of out of the blue. Well, the the administration 398 00:20:25,600 --> 00:20:27,479 Speaker 1: would say, for the people to say it's coming out 399 00:20:27,480 --> 00:20:29,439 Speaker 1: of the blue, they haven't been listening, because you know, 400 00:20:29,720 --> 00:20:32,760 Speaker 1: it hasn't been that long ago. The president was very upset. 401 00:20:32,840 --> 00:20:34,960 Speaker 1: He was talking about closing the border. There was a 402 00:20:34,960 --> 00:20:36,840 Speaker 1: time when he said he was going to do away 403 00:20:36,840 --> 00:20:39,560 Speaker 1: with NAPTA and not have anything to replace it with. UM. 404 00:20:39,680 --> 00:20:42,000 Speaker 1: You know, he's talked about tariffs before. Obviously we're doing 405 00:20:42,080 --> 00:20:46,280 Speaker 1: tariffs with China. So uh, you know that the business community, 406 00:20:46,280 --> 00:20:48,520 Speaker 1: and I say this across the board. You know, I 407 00:20:48,560 --> 00:20:51,280 Speaker 1: also sit on the US Chamber of Commerce. Border directors, 408 00:20:51,480 --> 00:20:55,000 Speaker 1: big business, medium business, small business are all watching this 409 00:20:55,240 --> 00:20:57,320 Speaker 1: very closely. And by the way, it's not just our 410 00:20:57,359 --> 00:21:00,240 Speaker 1: businesses that are watching it. Businesses around the world are watching. 411 00:21:00,480 --> 00:21:03,600 Speaker 1: China's watching this to see if they can actually come 412 00:21:03,600 --> 00:21:06,480 Speaker 1: to some agreement with the administration. So trust is in 413 00:21:06,600 --> 00:21:09,960 Speaker 1: low supply right now. But at least they're talking. They're 414 00:21:10,000 --> 00:21:12,240 Speaker 1: at the table with each other, and that's much better 415 00:21:12,520 --> 00:21:16,480 Speaker 1: than just screaming across the fence to each other. Hector 416 00:21:16,560 --> 00:21:20,320 Speaker 1: burnetto chairman of the Latino Coalition and former US Small 417 00:21:20,359 --> 00:21:22,800 Speaker 1: Business Administrator, thank you so much for joining us and 418 00:21:22,800 --> 00:21:25,520 Speaker 1: helping us understand better. What is you know, a rising 419 00:21:25,520 --> 00:21:28,120 Speaker 1: trade tensions between the the US and Mexico. They don't 420 00:21:28,160 --> 00:21:30,760 Speaker 1: seem to be abating, but there is a As Hector 421 00:21:30,800 --> 00:21:33,520 Speaker 1: mentioned Lisa, a group of Mexican business people on government 422 00:21:33,560 --> 00:21:37,720 Speaker 1: officials in Washington today meeting with US representatives. Uh. The 423 00:21:37,880 --> 00:21:41,800 Speaker 1: hope obviously is that some resolution, at least a temporary resolution, 424 00:21:41,880 --> 00:21:45,119 Speaker 1: can forestall uh, the terroiffs that are threatened to be 425 00:21:45,359 --> 00:21:49,120 Speaker 1: going in place. But clearly, as Hector mentioned this, Mexico 426 00:21:49,320 --> 00:21:51,840 Speaker 1: is our largest trading partner because just recently became a 427 00:21:52,119 --> 00:21:55,120 Speaker 1: uh you know, certainly right there with China, So it's 428 00:21:55,119 --> 00:21:57,640 Speaker 1: not just China, it's also in Mexico, uh, and these 429 00:21:57,680 --> 00:22:03,640 Speaker 1: issues are certainly weighing on the mark places. Let's turn 430 00:22:03,680 --> 00:22:06,960 Speaker 1: our focus now to automobiles, in particular the murder that 431 00:22:07,200 --> 00:22:11,000 Speaker 1: wasn't Fiat Chrysler saying that is no longer going to 432 00:22:11,400 --> 00:22:15,000 Speaker 1: continue its bid for Renault. Renault shares tumbling more than 433 00:22:15,080 --> 00:22:17,920 Speaker 1: seven percent. Both sides blame each other, joining us now 434 00:22:18,200 --> 00:22:22,399 Speaker 1: Kevin Tynan, senior Auto's analyst for Bloomberg Intelligence. So who's 435 00:22:22,440 --> 00:22:29,520 Speaker 1: to blame Kevin Well, Um, everybody? Nobody? Um, so I think. 436 00:22:30,280 --> 00:22:34,000 Speaker 1: And there's also Nissan involved in here too. So as 437 00:22:34,040 --> 00:22:37,040 Speaker 1: difficult as a deal would be between f c A 438 00:22:37,359 --> 00:22:40,439 Speaker 1: and and Rena, you know, you you also have that 439 00:22:40,520 --> 00:22:43,840 Speaker 1: Nissan angle in there as well, So I think, you know, 440 00:22:43,920 --> 00:22:46,359 Speaker 1: doing a deal between two big companies like that is 441 00:22:46,359 --> 00:22:49,240 Speaker 1: difficult enough. And then when you add in the Nissan angle, 442 00:22:49,720 --> 00:22:53,639 Speaker 1: and I'm not sure it's completely dead yet. Um, you 443 00:22:53,680 --> 00:22:57,240 Speaker 1: know it's not. It wouldn't have been unlike Sergio Marcioni, 444 00:22:57,280 --> 00:23:01,440 Speaker 1: and you see that down through fc A management now 445 00:23:01,480 --> 00:23:03,760 Speaker 1: and up to the chairman and John el Con to 446 00:23:03,920 --> 00:23:06,399 Speaker 1: say it's as important to sit down as it is 447 00:23:06,440 --> 00:23:08,680 Speaker 1: to walk away. So I think, uh, there may be 448 00:23:08,760 --> 00:23:12,639 Speaker 1: a little bit of gamesmanship going on here, um, and 449 00:23:12,640 --> 00:23:15,760 Speaker 1: then the deal might not be completely dead just yet. Well, Kevin, 450 00:23:15,800 --> 00:23:17,880 Speaker 1: I think when we talked to you, you know, when 451 00:23:17,880 --> 00:23:20,000 Speaker 1: this deal was announced. You know, one of the things 452 00:23:20,040 --> 00:23:22,720 Speaker 1: that you mentioned to us was the Fiat Chrysler's need 453 00:23:22,800 --> 00:23:26,560 Speaker 1: for scale. Um, presumably that need is still there. What 454 00:23:26,600 --> 00:23:29,840 Speaker 1: do you think their options are for them? Yeah? And 455 00:23:29,880 --> 00:23:33,200 Speaker 1: I think, look at that's a company that has spent 456 00:23:33,440 --> 00:23:37,040 Speaker 1: a lot of time and effort to make itself very 457 00:23:37,080 --> 00:23:40,520 Speaker 1: attractive to you know, this kind of situation M and 458 00:23:40,640 --> 00:23:45,480 Speaker 1: A or alliances and partnerships. So you know it doesn't 459 00:23:45,560 --> 00:23:49,919 Speaker 1: end here for sure. Um. I if this does fall apart, ultimately, 460 00:23:50,000 --> 00:23:52,280 Speaker 1: I think it takes two players off the table. It 461 00:23:52,280 --> 00:23:55,399 Speaker 1: probably takes Reno and most likely Pougeau off the table. 462 00:23:55,480 --> 00:23:57,600 Speaker 1: But you know, this is a company that has spent 463 00:23:57,720 --> 00:24:01,240 Speaker 1: years uh, and a lot of time to be this 464 00:24:01,400 --> 00:24:06,480 Speaker 1: lean basically ram and Jeep business, you know, focused in 465 00:24:06,520 --> 00:24:09,919 Speaker 1: North America on light truck market which is now of 466 00:24:10,680 --> 00:24:14,800 Speaker 1: a volume here, uh, and huge profitability there to to 467 00:24:15,119 --> 00:24:17,760 Speaker 1: look like it does to be attractive to other companies. 468 00:24:18,480 --> 00:24:22,800 Speaker 1: So how bad is this forward? Know, if this deal 469 00:24:22,880 --> 00:24:25,280 Speaker 1: is off the table, and frankly, if any other suitor 470 00:24:25,760 --> 00:24:29,280 Speaker 1: uh sort of starts to think about other options, just 471 00:24:29,359 --> 00:24:32,360 Speaker 1: because it is so complicated, right, yeah, And I think 472 00:24:32,440 --> 00:24:35,000 Speaker 1: the the issue is the valuation, and we talked about 473 00:24:35,040 --> 00:24:37,399 Speaker 1: this on the show over the weekend. Um, there is 474 00:24:37,440 --> 00:24:41,359 Speaker 1: that valuation of Rena and while that's one of the 475 00:24:41,440 --> 00:24:46,200 Speaker 1: aspects that makes it attractive to other automakers and that 476 00:24:46,840 --> 00:24:50,919 Speaker 1: European presence, uh, it's also what puts them at a 477 00:24:50,960 --> 00:24:55,240 Speaker 1: disadvantage in negotiations. So you know, it's it's not unlike 478 00:24:55,280 --> 00:24:58,320 Speaker 1: buying buying a car, right, the seller wants as much 479 00:24:58,359 --> 00:25:00,000 Speaker 1: as they can get and the buyer wants to get 480 00:25:00,040 --> 00:25:02,760 Speaker 1: for as little as possible. And that's really the situation here. 481 00:25:03,480 --> 00:25:06,520 Speaker 1: So Kevin, I think you mentioned poop Pougou and Pougeot 482 00:25:06,640 --> 00:25:09,879 Speaker 1: and it's just interesting. The French government here seems to 483 00:25:09,880 --> 00:25:13,080 Speaker 1: be a real sticking point for deal making in the 484 00:25:13,119 --> 00:25:16,399 Speaker 1: auto industry. Um, how does that really play out? If 485 00:25:16,400 --> 00:25:19,640 Speaker 1: you're a buyer, you absolutely have to win over the government, correct, Yeah, 486 00:25:19,680 --> 00:25:21,919 Speaker 1: I mean, and I think that's why I say, you know, 487 00:25:21,920 --> 00:25:24,080 Speaker 1: Pougeot might be off the table as well, because it 488 00:25:24,119 --> 00:25:26,879 Speaker 1: looks like it's the same you know, angry father, different 489 00:25:26,920 --> 00:25:31,080 Speaker 1: daughter kind of scenario there. Um. You know that if 490 00:25:31,119 --> 00:25:35,600 Speaker 1: IF and and Peugeot also and talking about valuation, is 491 00:25:35,640 --> 00:25:39,399 Speaker 1: a much more valuable company in that sense. Um. And 492 00:25:39,480 --> 00:25:43,119 Speaker 1: I think the issue with f C as they really 493 00:25:43,160 --> 00:25:47,399 Speaker 1: want to control whatever company emerges from this or or 494 00:25:47,440 --> 00:25:50,400 Speaker 1: whatever the alliance looks like going forward. And I think 495 00:25:50,440 --> 00:25:53,200 Speaker 1: that again is part of the issue with Nissan right there, 496 00:25:54,080 --> 00:25:59,000 Speaker 1: they're saying the state stake in the enterprise gets smaller. Um, 497 00:25:59,040 --> 00:26:01,840 Speaker 1: and f c A at least steps in and commands 498 00:26:02,520 --> 00:26:05,800 Speaker 1: this this enterprise from the top down. Uh, And that's 499 00:26:05,800 --> 00:26:09,119 Speaker 1: difficult and even for the government to accept that. Meanwhile, 500 00:26:09,160 --> 00:26:12,720 Speaker 1: from Fiat Chrysler's standpoint, is there some pressure to buy 501 00:26:12,800 --> 00:26:16,160 Speaker 1: something else or sort of a mass more scale right now? 502 00:26:16,960 --> 00:26:18,560 Speaker 1: Do you think that that's something in the near term 503 00:26:18,560 --> 00:26:20,760 Speaker 1: that we're going to see. Oh? Yeah, absolutely, And I 504 00:26:20,800 --> 00:26:25,560 Speaker 1: think this was, you know, back in Sergio's days, this 505 00:26:25,760 --> 00:26:28,800 Speaker 1: was what was you know, the goal. Um. I think 506 00:26:28,920 --> 00:26:32,600 Speaker 1: through this process you're starting to see start to see 507 00:26:32,640 --> 00:26:34,760 Speaker 1: it happen. And again, I don't think this is the 508 00:26:34,840 --> 00:26:37,680 Speaker 1: end of it. Um. It just maybe with different partners. 509 00:26:37,720 --> 00:26:40,080 Speaker 1: But you know, this company has worked itself into this 510 00:26:40,160 --> 00:26:44,160 Speaker 1: shape for this very reason, and just because of one 511 00:26:44,200 --> 00:26:46,880 Speaker 1: bad date here, I don't think they sort of get 512 00:26:46,920 --> 00:26:50,280 Speaker 1: off the market. Kevin Tynan, Thank you so much. Kevin Tynan, 513 00:26:50,600 --> 00:26:53,520 Speaker 1: senior auto analysts for Bloomberg Intelligence, calling us on the 514 00:26:53,560 --> 00:26:56,760 Speaker 1: phone from ba's headquarters in Princeton, New Jersey. At least, 515 00:26:56,760 --> 00:26:58,960 Speaker 1: I'm just looking at the trailing twelve months a stock 516 00:26:58,960 --> 00:27:03,000 Speaker 1: price performance for Down General Motors down seven percent, Fiat 517 00:27:03,160 --> 00:27:07,800 Speaker 1: Chrysler Down. I think there's really is a concern here 518 00:27:07,840 --> 00:27:10,800 Speaker 1: among all the investors. I think obviously about long term 519 00:27:10,880 --> 00:27:15,360 Speaker 1: demand for Yes, definitely that although we have to sort 520 00:27:15,400 --> 00:27:18,160 Speaker 1: of put in the caveat here, which is uh that 521 00:27:18,400 --> 00:27:22,200 Speaker 1: Mexico US trade would hit the automakers in the US 522 00:27:22,640 --> 00:27:26,879 Speaker 1: much more substantially than arguably any other group of industries. 523 00:27:26,960 --> 00:27:29,920 Speaker 1: So that's been an additional hit in the recent weeks 524 00:27:30,040 --> 00:27:32,520 Speaker 1: that sort of come out of out of nowhere. Yeah, 525 00:27:32,520 --> 00:27:34,639 Speaker 1: exactly right. So and we saw that just for some 526 00:27:34,680 --> 00:27:38,639 Speaker 1: of the commentaries from some of the auto manufacturers. Thanks 527 00:27:38,640 --> 00:27:41,280 Speaker 1: for listening to the Bloomberg p m L podcast. You 528 00:27:41,320 --> 00:27:45,080 Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 529 00:27:45,200 --> 00:27:48,680 Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm 530 00:27:48,720 --> 00:27:52,280 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa 531 00:27:52,280 --> 00:27:55,200 Speaker 1: Abramo wits one. Before the podcast, you can always catch 532 00:27:55,320 --> 00:28:04,040 Speaker 1: us worldwide on Bloomberg Radio.