WEBVTT - Wall Street Traders Set for $27.8 Billion Haul 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.880 --> 0:00:32.640 YouTube search Bloomberg Global News. Volatility we know has been 0:00:32.680 --> 0:00:35.479 triving investors crazy. We're seeing it bounce around, certainly on 0:00:35.479 --> 0:00:37.360 the equity trade today. And yet if you're one of 0:00:37.360 --> 0:00:40.479 the biggest US banks, get ready for a multibillion dollar windfall. 0:00:40.560 --> 0:00:42.920 This story Tim Longer most read on the Bloomberg That 0:00:43.000 --> 0:00:45.080 windfall not coming from M and A like it did 0:00:45.159 --> 0:00:47.919 last year. That's seeing a decline. A great piece by 0:00:48.040 --> 0:00:51.720 Hannah Leavitt and Shabum Sahar and she Bum joins us 0:00:51.760 --> 0:00:55.280 now in the Bloomberg Interactive at Brokers Studio. Shabum Sahar 0:00:55.320 --> 0:00:58.800 and finance reporter for Bloomberg News. Okay, so let's talk 0:00:58.800 --> 0:01:03.520 about this twenty billion dollars. Volatility a pretty good thing 0:01:03.840 --> 0:01:07.520 if you're trading. Yeah, Tim, exactly as you said. No, 0:01:07.760 --> 0:01:09.480 I think the one thing that we can say is 0:01:09.520 --> 0:01:12.959 that banks really profit during periods of market volatility. And 0:01:13.000 --> 0:01:15.840 that's exactly what we're gonna see, or we're hoping to 0:01:15.840 --> 0:01:18.640 see in the upcoming quarter starting on Thursday. You know, 0:01:18.840 --> 0:01:23.119 massive market swings resulting from you know, recessionary fears. We're 0:01:23.120 --> 0:01:25.880 seeing inflation on the rise, you know, the Russian invasion 0:01:25.920 --> 0:01:29.360 of Ukrainians really expected to bolster some of the trading 0:01:29.560 --> 0:01:32.000 revenue that we're seeing. And I think what's unique about 0:01:32.000 --> 0:01:34.480 this quarter that we haven't seen in previous ones is 0:01:34.480 --> 0:01:37.360 that it's not just one asset class across the board, 0:01:37.560 --> 0:01:40.800 so we're really seeing it across you know, fixed income, commodities. 0:01:41.040 --> 0:01:43.880 Equity is also anticipated to be up almost twenty in 0:01:43.880 --> 0:01:47.000 the upcoming quarter as well. That's interesting. I find that 0:01:47.160 --> 0:01:50.360 fascin right, Yeah, because it's been really tough on the 0:01:50.360 --> 0:01:52.200 equity front. I got I do feel like when we 0:01:52.200 --> 0:01:54.680 start to get those numbers will just pick it apart. Um. 0:01:55.360 --> 0:01:57.200 There's a great quote, can I if you can just 0:01:57.240 --> 0:01:59.400 take us there um the global head of markets at 0:01:59.400 --> 0:02:01.120 City Group and need Morton. I guess there was an 0:02:01.120 --> 0:02:03.800 industry conference last month. What did he have to say? Yeah, 0:02:04.360 --> 0:02:08.760 so we're seeing any more in saying that about volatility 0:02:08.760 --> 0:02:11.600 being kind of our friend or something, so exactly, volatility 0:02:11.680 --> 0:02:13.880 is our friend, and that we're seeing it across those 0:02:13.919 --> 0:02:16.200 asset classes as we as I was talking about before, 0:02:16.240 --> 0:02:18.360 it's not just limited to one thing. I love it 0:02:18.360 --> 0:02:20.000 that they've kind of given us a heads up a 0:02:20.000 --> 0:02:22.320 little bit about because because you never know, like we 0:02:22.360 --> 0:02:23.919 talked about this all the time, and this is why 0:02:23.960 --> 0:02:26.560 we write the big banks report that ultimately and get 0:02:26.639 --> 0:02:28.600 one that can do really well because they were on 0:02:28.639 --> 0:02:31.320 the right side of the trades, another that might not. Okay, 0:02:31.360 --> 0:02:33.440 So let's talk about the flip side of that coin, though, 0:02:33.600 --> 0:02:36.720 because if about a year ago we'd be sitting here 0:02:36.760 --> 0:02:39.200 in the Interactive Broker studio is talking about all the 0:02:39.240 --> 0:02:41.680 great revenue that these these banks would bring in from 0:02:41.680 --> 0:02:44.320 making deal after deal after deal I p O after 0:02:44.320 --> 0:02:47.200 I p O after I pos fact. Yeah, I mean, 0:02:47.240 --> 0:02:48.680 when was the last time you heard of a spac 0:02:48.720 --> 0:02:50.880 actually completing a deal? Carroll No, it's been a long 0:02:51.400 --> 0:02:54.680 How is that going to be reflected in earnings this quarter? Yeah, 0:02:54.720 --> 0:02:56.800 so I think the sumth that we saw last quarters 0:02:56.880 --> 0:02:59.680 expected to you know, continue on into this one. We 0:02:59.720 --> 0:03:02.760 saw you know, as you said, like massive amounts of 0:03:02.800 --> 0:03:05.119 deals in the making last year, and we're really seeing 0:03:05.160 --> 0:03:07.040 that slow down and all of the you know, sort 0:03:07.080 --> 0:03:10.720 of economic turbulence that that has bolstered the trading revenue 0:03:10.720 --> 0:03:13.560 that we're seeing for the upcoming quarter is actually what's 0:03:13.560 --> 0:03:16.079 going to end up slowing down our investment banking revenue. 0:03:16.240 --> 0:03:20.600 You know, we have executives analysts predicting almost decrease year 0:03:20.639 --> 0:03:23.200 over year in the revenue that we're expected to see. Yeah, 0:03:23.280 --> 0:03:25.560 it's really kind of come to a start after you know, 0:03:25.600 --> 0:03:27.880 a couple of record years. Talk to us about interest 0:03:27.960 --> 0:03:30.200 interest income, because I do think about this in the banks, right, 0:03:30.240 --> 0:03:33.520 I want to know, you know, they're certainly making money, 0:03:33.600 --> 0:03:35.880 is right, it's go upwards. It's a much more positive 0:03:35.960 --> 0:03:38.280 environment for them when it comes to interest income. How 0:03:38.280 --> 0:03:40.240 big of a kick might that be? Yeah, you know, Carol, 0:03:40.280 --> 0:03:43.040 I'm so glad that you brought that up, because we're 0:03:43.080 --> 0:03:46.560 expected to see almost you know, fifty billion in over 0:03:46.600 --> 0:03:49.360 a fifty billion actually in interest income for the big 0:03:49.400 --> 0:03:53.119 five names, um, and that's about increase from last year. 0:03:53.160 --> 0:03:56.960 So you know, we're really seeing those higher rates benefit banks. 0:03:56.960 --> 0:03:59.240 They're able to you know, pass those down onto their 0:03:59.240 --> 0:04:01.440 loan products. You know, we've seen credit card used to 0:04:01.520 --> 0:04:04.000 go up. We're seeing those also reflected in credit card rates. 0:04:04.200 --> 0:04:06.960 So it's expected to be a big you know, um, 0:04:07.000 --> 0:04:09.120 you know, a theme across the board this quarter and 0:04:09.160 --> 0:04:11.600 honestly moving on from this quarter as well. Okay, lots 0:04:11.600 --> 0:04:13.280 of macro stuff to talk about. And again we love 0:04:13.280 --> 0:04:15.040 hearing from banks because we get an idea of what 0:04:15.120 --> 0:04:18.120 consumers are doing with their money, how they're spending. From 0:04:18.400 --> 0:04:21.800 Jamie Dimon the weather man. The weather man. Yeah, it's 0:04:21.800 --> 0:04:24.240 like there's like a Bob Dylan song in here somewhere, right, 0:04:24.279 --> 0:04:28.279 there's totally but right, the commentary is going to be crucial. Um. 0:04:28.480 --> 0:04:30.159 So I think that you know, the one word on 0:04:30.200 --> 0:04:34.320 everyone's mind right now is recession. You're gonna say hurricane, well, 0:04:34.400 --> 0:04:40.960 hurricane to tsunami, you know, thunderstorms, whatever he was mentioning before. 0:04:41.080 --> 0:04:43.680 But you know, again, one word on every everyone's mind 0:04:43.760 --> 0:04:45.640 is recession. And I think the way that we're really 0:04:45.640 --> 0:04:49.080 going to start seeing that is um, how banks are 0:04:49.080 --> 0:04:51.760 going to start shoring up whether or not they're anticipating 0:04:51.760 --> 0:04:54.800 a recession is really going to be reflected in their reserves. Yeah, 0:04:54.920 --> 0:04:57.600 so interesting, Well, what we'll go ahead, Carol, No, I 0:04:57.680 --> 0:04:59.200 was thinking about that too, right, you know, we look 0:04:59.200 --> 0:05:01.080 at like low lost for visions, right and things like 0:05:01.120 --> 0:05:03.840 that that given indication of maybe what the banks are 0:05:03.839 --> 0:05:06.640 worried about are just preparing for maybe in the second half. Well, 0:05:06.680 --> 0:05:08.200 one thing that I think about are the headlines that 0:05:08.240 --> 0:05:11.039 we saw in the quarter about companies laying off people 0:05:11.040 --> 0:05:14.039 in the mortgage division or reassigning them in the mortgage division, 0:05:14.240 --> 0:05:18.120 and how perhaps that foretold some of the challenges that 0:05:18.160 --> 0:05:20.120 we might hear about when it comes to home loans 0:05:20.160 --> 0:05:22.280 as interest rates have gone up. Yeah, so I mean, 0:05:22.400 --> 0:05:25.320 as you said, you know, markets rates are surging, which 0:05:25.360 --> 0:05:27.680 means that there has really been that cool down in 0:05:28.160 --> 0:05:31.320 UM in the in the housing market overall, we've seen 0:05:31.400 --> 0:05:34.520 JP Morgan whilst Fargo start either laying off or reassigning 0:05:34.560 --> 0:05:38.600 their UM reassigning some of their stuff there. So that's 0:05:38.640 --> 0:05:40.320 definitely something that we're going to keep a lookout for 0:05:40.440 --> 0:05:42.880 in the earnings calls. And then the reports and how 0:05:42.880 --> 0:05:44.960 that's going to continue on. Well, I noticed it even 0:05:45.040 --> 0:05:47.200 just like you know, getting bombarded by my own bank, 0:05:47.320 --> 0:05:48.960 you know, in terms of my mortgage company, and like 0:05:49.040 --> 0:05:54.040 rEFInd its refined so long ago, like it's the lowest rates, 0:05:54.080 --> 0:05:55.640 and then you can just see it's just come to halt. 0:05:55.680 --> 0:05:59.200 And I have a relative um that works in the industry, 0:05:59.200 --> 0:06:01.360 and I'm like, how you're doing because they she was 0:06:01.680 --> 0:06:07.640 frenetic through the pandemic, additional assistance and processing mortgages and refinancing, 0:06:07.680 --> 0:06:09.800 and she's like, it's been really quiet. I'm sure it has. 0:06:09.880 --> 0:06:13.280 With six rates. Well, Uh, this is going to be 0:06:13.320 --> 0:06:15.240 really important in terms of the sentiment. We talked so 0:06:15.320 --> 0:06:17.560 much A part a part, so much how important the 0:06:17.760 --> 0:06:20.719 investor sentiment is. Uh, and I think the banks are 0:06:20.760 --> 0:06:22.480 going to go a long way to shaping it. So 0:06:22.560 --> 0:06:24.480 thank you so much. Good preview, good set up for 0:06:24.760 --> 0:06:28.119 the week. Sabam Sahara, And she is Bloomberg News Finance 0:06:28.200 --> 0:06:30.960 reporter joining us in our Bloomberg Interactive Broker studio. We 0:06:31.000 --> 0:06:33.560 get what JP Morgan Thursday morning? Who else do we 0:06:33.600 --> 0:06:37.080 get Thursday morning Morgan Stanley? So there's a big one, 0:06:37.080 --> 0:06:38.440 and then I think we get Alban Sacks. We've got 0:06:38.480 --> 0:06:41.560 well spargo for next week. It's not all happening in 0:06:41.640 --> 0:06:44.119 one week. This year quarter. We spread out the wealth. 0:06:44.880 --> 0:06:49.640 Excuse me, we spread out the wealth. When it said 0:06:49.800 --> 0:06:51.920 I don't know, I didn't know what he said. We 0:06:52.000 --> 0:06:54.600 have fun here. It's a wacky Tuesday, guys. All right, 0:06:54.600 --> 0:06:57.040 you're listening to Bloomberg Business with Carol Masther, Jim Stanivic 0:06:57.120 --> 0:07:02.920 and this is Bloomberg Radio. You're listening to Bloomberg Business 0:07:03.000 --> 0:07:06.839 Week with Carol Messer and Bloomberg Quick takes Tim Stinovic 0:07:07.320 --> 0:07:10.600 on Bloomberg Radio. In the upcoming issue of Bloomberg Business Week, 0:07:10.600 --> 0:07:12.680 a story that looks into the U s rivalry with 0:07:12.880 --> 0:07:16.720 China over advanced technologies. And what's interesting about that, Tim, 0:07:17.040 --> 0:07:19.080 is the role of Israel and all of that. Yeah, 0:07:19.080 --> 0:07:20.840 it kind of finds itself in the middle of this 0:07:21.000 --> 0:07:25.520 global conflict. Joshua Brewstein is Technology editor for Bloomberg Business Week. 0:07:25.520 --> 0:07:27.480 He joins us on the phone from New York City. 0:07:27.840 --> 0:07:30.400 He's gonna talk all about this story by Sarah Zang 0:07:30.480 --> 0:07:34.600 and Coco Lou. It is in feed thee upcoming issue 0:07:34.600 --> 0:07:36.520 of Bloomberg Business Week magazine. But you can read it 0:07:36.560 --> 0:07:38.920 now on the Bloomberg in at Bloomberg dot com Slash 0:07:38.960 --> 0:07:41.000 business Week. Also with us right now is Joel Weber, 0:07:41.400 --> 0:07:43.760 editor of Bloomberg Business Week. He's with us in the 0:07:43.800 --> 0:07:47.120 Bloomberg Interactive Brokers studio. So, Joel, how how does Israel 0:07:47.120 --> 0:07:49.480 find itself right now when it comes to tech? You know, 0:07:49.600 --> 0:07:52.640 it's a really interesting question. Israel long been fascinating to 0:07:52.720 --> 0:07:56.440 me just as a tech obsessed country, and like within 0:07:56.520 --> 0:07:59.560 the last ten to twenty years the country is actually 0:07:59.640 --> 0:08:01.960 trans formed its economy and gone all in on tech. 0:08:02.080 --> 0:08:05.720 So just to set this table, there's it's a very interesting, 0:08:06.320 --> 0:08:11.080 uh environment. Also, keep in mind there's this larger east 0:08:11.200 --> 0:08:15.160 West tension between China and the US and Israel right 0:08:15.320 --> 0:08:17.360 smack dad in the middle of it. What's interesting and 0:08:17.520 --> 0:08:19.840 what caught my attention with this story is the US 0:08:19.880 --> 0:08:22.800 has been really trying to move Israel into its sphere 0:08:22.840 --> 0:08:26.040 of influence on the tech front. Um. China has long 0:08:26.120 --> 0:08:29.960 been uh, you know present there. But but Josh, how 0:08:30.200 --> 0:08:32.480 how has the US managed to sort of ice China 0:08:32.600 --> 0:08:37.600 out in regards to Israel? Yeah, thanks, Joel. The interesting 0:08:37.679 --> 0:08:40.320 thing is, as you said, Israel really punches above its 0:08:40.360 --> 0:08:43.120 way when it comes to tech, especially in cybersecurity, and 0:08:43.840 --> 0:08:48.160 the US has been over the last several years, UM 0:08:49.120 --> 0:08:51.640 really focus on his global effort to try to keep 0:08:51.760 --> 0:08:56.040 China from getting Western technologies and being able to kind 0:08:56.040 --> 0:08:58.959 of build up its own capacity. And it's it's really 0:08:59.000 --> 0:09:01.640 been aggressive on doing at UM with US companies and 0:09:01.920 --> 0:09:04.800 companies in Europe. And you know, China was trying to 0:09:04.960 --> 0:09:08.680 get into UM into Israeli companies that it was making 0:09:08.720 --> 0:09:13.040 an increasing amount of investments there, and the US through UM, 0:09:13.440 --> 0:09:17.280 through pressure, through pressure on the government hasn't really done 0:09:17.280 --> 0:09:20.319 anything formal, but Israeli companies are kind of getting the 0:09:20.360 --> 0:09:23.600 message and and just steering away from taking Chinese investment 0:09:24.160 --> 0:09:26.200 UM not because they have to, but just because they 0:09:26.280 --> 0:09:31.040 kind of see the winds shifting. Well, Josh, so what 0:09:31.120 --> 0:09:33.959 does this look like in practice? Right? Like you you 0:09:34.040 --> 0:09:37.600 obviously have this is like a meta meta level kind 0:09:37.640 --> 0:09:40.800 of like influence play, But how does it actually work 0:09:40.840 --> 0:09:44.000 in practice? Because China's you know, poured a lot of 0:09:44.080 --> 0:09:46.440 money into play here and maybe it's just not as 0:09:46.520 --> 0:09:49.560 much now or is it? Is it bigger than that? Yeah? 0:09:49.679 --> 0:09:53.000 I think there's two things. The main thing is that 0:09:53.360 --> 0:09:56.599 China had been increasing Chinese investors had been increasing the 0:09:56.640 --> 0:10:00.079 amount of money they were putting into Israeli startups. It 0:10:00.200 --> 0:10:02.520 wasn't there weren't the main source of capital, but there 0:10:02.600 --> 0:10:05.800 was a growing source and that changed UM kind of 0:10:05.840 --> 0:10:09.800 in the late Trump administration, you saw Israeli startups and 0:10:09.880 --> 0:10:13.840 they went to look for funding UM, shying away from 0:10:13.920 --> 0:10:17.720 Chinese sources. The amount of money that Israeli companies were 0:10:17.760 --> 0:10:22.319 taking from Chinese investors has just been steadily declining. UM. 0:10:22.760 --> 0:10:26.440 And you saw, like for instance, in an electric vehicle 0:10:27.240 --> 0:10:31.320 UM company that UH said, you know, it didn't want 0:10:31.440 --> 0:10:34.920 to take money from you know, from from from China 0:10:35.080 --> 0:10:37.800 that was being offered UM. And just kind of a 0:10:37.840 --> 0:10:40.800 general chilling of the mood. But you know, Joshua, it's 0:10:40.840 --> 0:10:43.280 it's not black and white here, right, It's not totally binary. 0:10:43.360 --> 0:10:46.360 I noticed in the reporting from our colleagues, the piece 0:10:46.440 --> 0:10:49.600 that that you edited that you know, US investors. For example, 0:10:49.760 --> 0:10:52.679 in in an Israeli chip company, they would allow this 0:10:52.920 --> 0:10:55.160 company to sell products in China, but only if it 0:10:55.200 --> 0:10:58.240 promised not to conduct research there. This according to a 0:10:58.360 --> 0:11:01.160 person familiar with the company plans, and just discussing it, 0:11:01.520 --> 0:11:03.360 not saying their name because it's a sensitive matter. In 0:11:03.400 --> 0:11:07.120 the reporting. UM. I'm wondering though, like where the gray 0:11:07.200 --> 0:11:09.040 areas are here, because it's not like they're going to 0:11:09.080 --> 0:11:13.520 completely cut themselves off from from doing business right right, Absolutely, 0:11:13.640 --> 0:11:16.920 And obviously the U S and China UM, despite the rivalry, 0:11:16.960 --> 0:11:22.080 are are very interwoven themselves. What the US doesn't want 0:11:22.800 --> 0:11:25.640 China to get ahold of our the types of technologies 0:11:25.679 --> 0:11:28.920 that would allow it to be able to make the 0:11:29.040 --> 0:11:33.880 most advanced semiconductors completely on their own. So that is 0:11:33.920 --> 0:11:39.240 really the focus of US policy. UM. For technologies that 0:11:39.360 --> 0:11:42.880 aren't as sensitive, there's kind of as you move further 0:11:43.080 --> 0:11:46.160 down UM down the scale, there's less and less concern 0:11:46.240 --> 0:11:49.440 and less and less pressure to kind of ice China 0:11:49.520 --> 0:11:53.120 out there. And it does sound like increasingly we're seeing 0:11:53.240 --> 0:11:56.400 when it comes to and Israeli startup, that they're going 0:11:56.480 --> 0:11:59.880 to lean more towards the West, whether it's US or 0:12:00.160 --> 0:12:04.720 their versus over a Chinese investor. Is that fair to say, Yeah, 0:12:04.880 --> 0:12:08.280 I think that that is really the dynamic we're seeing now. 0:12:09.080 --> 0:12:11.000 One thing the US has done is pushed for a 0:12:11.080 --> 0:12:14.559 more for the Israeli government to adopt a more formal 0:12:14.679 --> 0:12:18.199 review process for technologies that might have national security implication. 0:12:18.240 --> 0:12:20.240 I think that was That's a really interesting part of 0:12:20.280 --> 0:12:23.079 the story, Josh, because it speaks to like, you know, 0:12:23.400 --> 0:12:26.920 Sippius became such a you know, just that thing during 0:12:27.040 --> 0:12:30.520 especially during the Trump administration, and I'm just curious, like, 0:12:30.600 --> 0:12:33.880 what what kind of uh pressure has the US really 0:12:33.920 --> 0:12:37.040 tried to put on Israel on that front? Yeah, exactly, So, 0:12:37.360 --> 0:12:40.920 the Trump administration was pushing, uh for for the Israeli 0:12:40.960 --> 0:12:44.240 government to implement a similar review process to Sippius. The 0:12:44.280 --> 0:12:48.360 Biden administration continues to advocate for that Israel hasn't done it, 0:12:48.720 --> 0:12:51.800 um in the way that the US would like. But 0:12:51.920 --> 0:12:56.480 even without that formal review um. You know, companies are 0:12:56.559 --> 0:12:59.920 making their own decisions, uh, you know and steering away 0:13:00.160 --> 0:13:02.839 from you know, steering away from doing deals that you know, 0:13:03.280 --> 0:13:06.320 even that that don't have a formal review process. Um. 0:13:08.360 --> 0:13:11.600 It's you know, even even without the formal even without 0:13:11.640 --> 0:13:14.000 the formal success, they're having, you know, the informal sway. 0:13:14.280 --> 0:13:17.040 So do we anticipate with President Biden making that first 0:13:17.080 --> 0:13:20.960 presidential visit to Israel that's tomorrow, should we anticipating kind 0:13:20.960 --> 0:13:23.440 of headlines on this front or I'm just thinking about 0:13:23.480 --> 0:13:25.720 our investment audience. Should they be looking out for something 0:13:25.840 --> 0:13:27.720 or this is going to be stepp probably under the radar, 0:13:27.800 --> 0:13:31.199 but watch for more stories to come. Yeah, I think 0:13:31.200 --> 0:13:33.160 I could go either way. I mean, Israel and the 0:13:33.240 --> 0:13:35.480 United States. Uh, you know, it's one of the most 0:13:35.559 --> 0:13:39.480 important relationships that the Biden administration has, and there's a 0:13:39.559 --> 0:13:42.800 lot to discuss, um, things that they are closer on 0:13:42.880 --> 0:13:44.800 and things that they're further away from. So this might 0:13:44.960 --> 0:13:47.800 not be up on the same level as say the 0:13:47.920 --> 0:13:51.559 Russian war in Ukraine or you're any nuclear deal, but 0:13:51.640 --> 0:13:53.600 and they're certainly going to discuss it in some context. 0:13:53.679 --> 0:13:55.880 Until something that you said earlier in our conversation really 0:13:55.920 --> 0:13:58.480 stuck out to me was the over the last decade. 0:13:58.480 --> 0:14:00.719 And I think for me what I remember as a 0:14:00.800 --> 0:14:03.440 as a pivotal point was when Google bought Ways years ago. 0:14:03.960 --> 0:14:06.800 And what's remarkable, I think is the way that cybersecurity 0:14:07.000 --> 0:14:09.160 in particular just dominates. And one thing that I found 0:14:09.200 --> 0:14:13.640 pretty striking is that of global investment in cybersecurity that's 0:14:13.679 --> 0:14:16.199 happening in the tiny country of Israel. Yeah, and I 0:14:16.280 --> 0:14:18.160 mean he does speak to like I mean Josh said 0:14:18.480 --> 0:14:20.560 said it. You know, it is a country that hits 0:14:20.600 --> 0:14:24.720 above its weight. Um and what's even interesting to me 0:14:24.880 --> 0:14:27.680 is that you know, the US doesn't maybe you know, 0:14:27.960 --> 0:14:30.240 as you heard Josh, it's like Israel is the way 0:14:30.280 --> 0:14:32.200 of like kind of also rebuffing the US and not 0:14:32.280 --> 0:14:34.440 giving the U s everything that I want, so so 0:14:34.560 --> 0:14:36.320 they can throw their away around for sure. Well, and 0:14:36.360 --> 0:14:38.720 I think about the Cold War right when it comes 0:14:38.760 --> 0:14:40.840 to technology and how we're starting to see, you know, 0:14:41.200 --> 0:14:44.440 potentially things being divated up even more and more, or 0:14:44.720 --> 0:14:46.360 the role of Israel and all of it. And look 0:14:46.440 --> 0:14:48.920 like I just think from from again from an investment standpoint, 0:14:49.080 --> 0:14:50.960 this is a hot better place, and like from an 0:14:51.000 --> 0:14:54.320 investors standpoint, like we will see more and more interest there. 0:14:54.320 --> 0:14:57.560 And if this sphere influenced thing really does play out, 0:14:57.760 --> 0:15:00.400 you know that that bodes well for American investors especially. 0:15:00.440 --> 0:15:02.320 I think about the number of startups that we often 0:15:02.400 --> 0:15:05.120 feature on air that are coming from Israel. Our guys 0:15:05.160 --> 0:15:07.880 we got around Joshua Breustin. He's Technology editor of Bloomberg 0:15:07.920 --> 0:15:10.400 business Week, along with Jill Weber, the editor of Bloomberg 0:15:10.440 --> 0:15:13.520 Business Week magazine. Check out this story in the upcoming issue. 0:15:13.800 --> 0:15:19.120 This is Bloomberg Radio. This is Bloomberg Business Week with 0:15:19.320 --> 0:15:24.080 Carol Masser and Bloomberg Quick Takes. Tim Stenovic on Bloomberg Radio. 0:15:24.520 --> 0:15:27.560 I gotta say we are obsessed with this story. I am. 0:15:27.680 --> 0:15:29.320 I don't know about Tim, but I think we both Oh, 0:15:29.400 --> 0:15:31.880 I am too. I'm ready to get adopt what Europe 0:15:31.920 --> 0:15:33.920 is doing when it comes to passengers bill of rights. 0:15:34.120 --> 0:15:37.240 Let's get into it with Brook Southerland Carol, because she's 0:15:37.280 --> 0:15:39.720 deals in industrials. Columness from Bloomberg Opinion. She joined this 0:15:39.800 --> 0:15:42.920 this afternoon on the phone from New York City. Well, 0:15:42.960 --> 0:15:44.840 and it's interesting because you know, we're coming off this 0:15:44.920 --> 0:15:47.760 story about Heathrow UM that's imposing a two month camp 0:15:47.840 --> 0:15:50.440 on daily passenger traffic. There's just so much going on 0:15:50.520 --> 0:15:53.040 in this industry at the same time, Brooke, I don't know. 0:15:53.160 --> 0:15:55.040 First of all, great to have you here with us 0:15:55.200 --> 0:15:57.560 on the phone in New York City. Um. Tim and 0:15:57.600 --> 0:16:00.280 I've done some flying and some of the experiences have 0:16:00.480 --> 0:16:05.240 been okay, some so okay, like the last one we had. 0:16:05.760 --> 0:16:07.400 And I feel like, who's speaking up for me, the 0:16:07.480 --> 0:16:10.040 traveler who's paying for these tell us a little bit 0:16:10.040 --> 0:16:12.800 about what's going on here? Sure, And I think, I 0:16:12.840 --> 0:16:15.360 mean the unfortunate reality is that you two are not 0:16:15.640 --> 0:16:19.600 alone in having a very difficult travel experience. Uh, this 0:16:19.880 --> 0:16:22.080 is you know some of it. I do think, you know, 0:16:22.200 --> 0:16:24.800 we collectively have a little bit of amnesia about how 0:16:25.000 --> 0:16:28.440 annoying it was to travel pre pandemic because you know, 0:16:28.520 --> 0:16:31.080 we just haven't done it very often. But the data 0:16:31.160 --> 0:16:35.080 does suggest that delays, cancelations, all of that is becoming 0:16:35.320 --> 0:16:37.760 more frequent. Um, so there is, you know, some some 0:16:37.960 --> 0:16:41.520 data to back up those anecdotes that you yourself have experienced. 0:16:41.560 --> 0:16:43.320 And you know that we hear all too much about 0:16:43.680 --> 0:16:45.920 there's a couple of different factors that play. I think 0:16:46.440 --> 0:16:49.680 it's really hard to point the finger in any one direction. 0:16:50.200 --> 0:16:53.280 You did have the U. S. Taxpayer step in and 0:16:53.320 --> 0:16:56.800 provide more than fifty billion of you mean, like you, 0:16:57.080 --> 0:17:00.800 me and Tim and everybody else. Yeah, comolutely, I mean, 0:17:00.920 --> 0:17:02.920 you know this is this is what we did during 0:17:02.960 --> 0:17:06.440 the pandemic. In terms of stimulus. The airline industry was 0:17:06.600 --> 0:17:10.560 the only one to receive special dispensation among those hard 0:17:10.640 --> 0:17:13.520 hit pandemic sectors. Certainly, they were not the only ones 0:17:13.560 --> 0:17:16.359 that asked for it. There was lots of calls to 0:17:16.520 --> 0:17:20.280 have special protections for restaurants, bus operators, you name it, 0:17:20.400 --> 0:17:22.720 but airlines were the ones that got the special protection. 0:17:23.080 --> 0:17:27.640 Now that did not necessarily stop them from shrinking their workforces. Um, 0:17:27.760 --> 0:17:30.480 you know, they were bleeding cash pretty significantly, and so 0:17:30.600 --> 0:17:34.359 they leaned heavily on things like voluntary leave, uh in 0:17:34.480 --> 0:17:38.440 early retirement offers. So they are now trying to ramp 0:17:38.520 --> 0:17:41.920 their staffing back up. Um, we're seeing, you know, especially domestically, 0:17:42.480 --> 0:17:45.920 demand above and beyond what we saw pre pandemic, and 0:17:45.960 --> 0:17:47.480 so they're playing catch up with that. And now you 0:17:47.600 --> 0:17:50.680 also have some of these third party operators to do 0:17:50.960 --> 0:17:54.720 things like baggage handling, catering. They're all facing staffing shortages. 0:17:55.119 --> 0:17:58.320 Air traffic control plays a role. We also have weather 0:17:58.840 --> 0:18:02.919 that all popular, Um, you know issue for delays. Yes, 0:18:02.960 --> 0:18:05.480 sometimes I look sometimes I get that delay or cancelation 0:18:05.560 --> 0:18:07.879 and I see zero weather anywhere in the country. So 0:18:08.160 --> 0:18:11.120 I'm just gonna say, you know, whether in quotation mark 0:18:11.440 --> 0:18:15.399 meaning we could find a pilot, Yeah, exactly. Yes. I 0:18:15.520 --> 0:18:17.960 want to get an understanding of of what this bill 0:18:18.000 --> 0:18:20.440 of rights could look like for US travelers here because 0:18:20.520 --> 0:18:22.679 right now as you write that, you know, passengers, if 0:18:22.680 --> 0:18:25.440 their flight is canceled or or then they get they're 0:18:25.520 --> 0:18:29.680 entitled to a full cash refund. It goes further in Europe. Um, 0:18:30.119 --> 0:18:33.160 what happens in Europe if a plane is delayed, for example, 0:18:33.960 --> 0:18:35.919 it does And so I think this is really interesting. 0:18:35.960 --> 0:18:38.879 First emphasize, you know, I I'm not suggesting that Europe 0:18:38.960 --> 0:18:42.080 is a sort of panacea for fight travel right now, 0:18:42.160 --> 0:18:44.360 because they certainly have issues of their own in terms 0:18:44.400 --> 0:18:48.280 of delays and cancelations. But there is more of a safeguard, 0:18:48.359 --> 0:18:51.760 There are more consumer protections for when these travel experiences 0:18:51.840 --> 0:18:55.119 go awry. So in the US you are entitled to 0:18:55.440 --> 0:18:58.200 a refund if the carrier cancels your flight, and that 0:18:58.359 --> 0:19:03.560 is a cash refund um. And then you can theronically 0:19:03.800 --> 0:19:07.600 get a refund if your flight is significantly delayed. But 0:19:07.880 --> 0:19:12.240 there's no definition for what is a significant delay, and 0:19:12.880 --> 0:19:15.560 the Department of Transportation decides this on a case by 0:19:15.600 --> 0:19:20.040 case basis. Just from a practical standpoint, that's a pain. Uh, 0:19:20.240 --> 0:19:22.160 you are not, I mean as long as you ultimately 0:19:22.240 --> 0:19:24.719 get to your destination. The number of people who are 0:19:24.760 --> 0:19:26.639 going to go through this process of sort of figuring 0:19:26.680 --> 0:19:28.960 this out with the Department of Transportation are are few 0:19:29.040 --> 0:19:32.679 and far between, um, And so that contrasts with Europe, 0:19:32.720 --> 0:19:35.960 which does have provisions in place to say that, you know, 0:19:36.080 --> 0:19:40.000 passengers who face significant delays should get not only refunds, 0:19:40.040 --> 0:19:43.159 but also compensation up to six hundred euros that is 0:19:43.240 --> 0:19:45.400 sort of variable depending on the length of the flight. 0:19:45.800 --> 0:19:48.359 They also have all kinds of rules around requiring the 0:19:48.440 --> 0:19:51.600 airlines to provide refreshments and meals in the event of 0:19:51.680 --> 0:19:56.080 significant delays UH and to also provide overnight accommodation if 0:19:56.240 --> 0:19:59.400 that rerouting forces passengers to have to take a flight 0:19:59.480 --> 0:20:01.480 the following And I will say my recent one where 0:20:01.480 --> 0:20:03.479 I had some flight delays, they were offering me up 0:20:03.840 --> 0:20:07.000 a meal cupon and asking me if I needed a hotel. 0:20:07.119 --> 0:20:09.520 So I was pretty impressed with that, and I gotta say, 0:20:09.600 --> 0:20:11.480 get that and I had the same issue. I don't 0:20:11.480 --> 0:20:13.440 want to tell you, buddy, I will say, I remember. 0:20:13.480 --> 0:20:15.720 Think that's the problem is that, you know, like sometimes 0:20:15.760 --> 0:20:18.440 airlines will step in and do something sort of of 0:20:18.560 --> 0:20:21.360 their own free will, because you know they are customer 0:20:21.440 --> 0:20:23.359 facing industry. They will try to help you out. But 0:20:23.440 --> 0:20:26.960