Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanibek. We're here every day bringing
Speaker 1: you the latest news from the world of business and finance,
Speaker 1: plus technology, politics, economics, all furnessing the power of Business
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Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News Tim a little bit of
Speaker 1: our COVID backdrop. We talked a little bit about what's
Speaker 1: going on in New York City in New York State.
Speaker 1: But we did see the vaccine from Fiser and BioNTech
Speaker 1: showing a high ability and lab experiments to neutralize some
Speaker 1: of those virus strains first detected in Brazil, the UK,
Speaker 1: and South Africa. You've got US airlines are urging the
Speaker 1: Biden administration to develop virus passports. We have seen infection
Speaker 1: spread at the slowest pace since the pandemic began, but
Speaker 1: we're seeing global cases pick up some speed. Yeah, we're
Speaker 1: seeing a lot of good news and a little bit
Speaker 1: of concerning news. Yeah, that's I think a smart way
Speaker 1: to put it. And one company that's been involved in
Speaker 1: helping others really work to find some solutions is our
Speaker 1: next guest. Yeah. Christian Henry is chief executive officer of
Speaker 1: Pacific Biosciences, joining us on the phone from Maine this afternoon. Christian,
Speaker 1: thanks so much for joining us today. How are you doing.
Speaker 1: I'm doing quite well. Thank you for the opportunity so
Speaker 1: talk a little bit about how you are thinking about
Speaker 1: variants right now. Because when we talk to these medical experts,
Speaker 1: these healthcare professionals, these doctors, we hear the same thing
Speaker 1: over and over again. The United States is not good
Speaker 1: at genetic sequencing when it comes to the virus. We
Speaker 1: just don't do it enough well. I think that we definitely,
Speaker 1: as a percentage of the population that we've have, we
Speaker 1: do it less than other countries such as the United Kingdom,
Speaker 1: where you know, they may actually be out in the lead.
Speaker 1: But I do think there's a lot of excitement around
Speaker 1: uh how sting for in surveillance as a whole and
Speaker 1: use seeing the Biden administration get more engaged in this area,
Speaker 1: and we're part of that process. Uh, And so I
Speaker 1: think we're picking up steam, but but you're right, we
Speaker 1: have been behind other countries. Well, tell us a bit
Speaker 1: about the work that you guys are doing specifically, because
Speaker 1: you are involved in helping other companies find solutions and
Speaker 1: really a better understanding of the coronavirus, which as much
Speaker 1: as we've learned, there's still a lot to be known
Speaker 1: when it comes to COVID nineteen. So tell us specifically
Speaker 1: about the work that you guys have been doing at
Speaker 1: pact Bio. Yeah. So, pact Bio we developed the DNA
Speaker 1: sequencing technology. So it's the the actual technology that allows
Speaker 1: scientists and others to to look at the coronavirus strains
Speaker 1: and uh basically decode the genetics behind the virus. And
Speaker 1: we are, uh, you know, advancing the state of the
Speaker 1: art with that technology, with our technology, and we have
Speaker 1: partnered such as lab Corp, which is a major testing
Speaker 1: organization testing thousands of samples per week. You're all familiar
Speaker 1: with lab Corps at this point. We are, I'm sure
Speaker 1: you are, yes, But they're testing thousands of samples each week, uh,
Speaker 1: using our technology to uncover the various various variants and
Speaker 1: and then we passed that onto the CDC and others. Well,
Speaker 1: you say thousands a week in order for you know,
Speaker 1: us all to sleep well at night. What would you
Speaker 1: like to see how in terms of numbers, how should
Speaker 1: we be testing every positive case that comes in? Well,
Speaker 1: I think that in an ideal world we would have
Speaker 1: the opportunity to test every positive case, but but that's
Speaker 1: probably not practical. Uh realistically, you know, if we can
Speaker 1: be testing say half of the cases that are that
Speaker 1: are occurring, and we have the thing locally so in
Speaker 1: low you know, locally around the country, I think that
Speaker 1: would give us much better routine visibility into the virus,
Speaker 1: how it's changing, and really give us the early warning
Speaker 1: signs required to uh, you know, basically put protocols in
Speaker 1: place to try to stop the spread. How much does
Speaker 1: it cost to to do this genetic sequencing? Well, it
Speaker 1: really depends on it depends on the scale you're operating at.
Speaker 1: But the sequencing cost itself can be as little as
Speaker 1: a couple of dollars of samples, so it's really not
Speaker 1: that expensive on the sequencing itself. Of course, there's all
Speaker 1: of the infrastructure around that, which can make it more expensive,
Speaker 1: and that's dependent on the scale of the laboratories, but
Speaker 1: a company like lab Corp can can do it very
Speaker 1: inexpensively at very high volume. Christian explained to me and
Speaker 1: and really our listeners in our audience in terms of
Speaker 1: why sequencing and you guys do long um read sequencing,
Speaker 1: why all of this is so important in understanding variants,
Speaker 1: are getting ahead of variants uh and and ultimately getting
Speaker 1: control of this pandemic or future pandemic that matter. Yeah, Well,
Speaker 1: I think what's so important is when you know the
Speaker 1: actual structure uh the DNA sequence at every single base position,
Speaker 1: you can understand what's changing and how that, how that
Speaker 1: affects how the virus UH infects you, how that affects
Speaker 1: how the virus gets transmitted from person to person, and
Speaker 1: so you can understand those variants in a much deeper
Speaker 1: sort of way than with any other technology. And that's
Speaker 1: why sequencing is so important. Our version of sequencing is
Speaker 1: called longer read sequencing, and all that is is the
Speaker 1: ability to look at very long pieces of the DNA
Speaker 1: and through that be get a much deeper view or
Speaker 1: a more accurate and complete view than other DNA sequencing technologies, right,
Speaker 1: And I was gonna say, the devil's in the details, right,
Speaker 1: I mean, this is Christian. We've only got a thirty seconds,
Speaker 1: but as specific and as detailed as you can get,
Speaker 1: it's going to be crucial. It's it's absolutely essential. You know,
Speaker 1: we need to be able to track these viruses. And
Speaker 1: it's not just coronavirus. It's the future thinking about the
Speaker 1: next but preventing the next pandemic. So pan viral sequencing
Speaker 1: is going to be extremely important, and you're going to
Speaker 1: see it rise into the national public health consciousness, not
Speaker 1: just in the United States but around the world. And
Speaker 1: I think this is where global on global assistance and
Speaker 1: collaboration is going to be so important. Christian, you heard
Speaker 1: us talking about it when we were talking about what
Speaker 1: we want to talk to you all about. September of
Speaker 1: Here we are in the middle of a pandemic. You
Speaker 1: take over as CEO. You had been a board member
Speaker 1: and you had been chair. But what was it like
Speaker 1: to to take the helm of the company in the
Speaker 1: middle of the pandemic. Yeah, it was. It was actually
Speaker 1: really challenging in the sense that you can't you know,
Speaker 1: one of the hallmarks of the great CEO is someone
Speaker 1: that can build a culture and share a vision and sharing.
Speaker 1: Creating that culture through Zoom is really tricky and and
Speaker 1: so we've had to navigate very carefully. We've been able
Speaker 1: to do some great recruiting to build a build a
Speaker 1: new team, and actually the Pandemics Act made that easier,
Speaker 1: to be honest, because the desire, you know, the ability
Speaker 1: to move to work from anywhere is becoming more apparent.
Speaker 1: So in some ways it's been very challenging. In other
Speaker 1: ways it's been very helpful. Yeah, that's interesting. Well, do
Speaker 1: you anticipate that that working from home component trend is
Speaker 1: no longer a trend? It's just kind of the way
Speaker 1: we're gonna do it going forward, or at least a
Speaker 1: hybrid approach. Christian, Yes, I do. I think we're gonna
Speaker 1: have a hybrid approach. I do think there's huge benefits
Speaker 1: to having UH places where employees can congret congregate, create culture, collaborate,
Speaker 1: and I think will continue to operate in that sort
Speaker 1: of way. But the notion of everyone has to be
Speaker 1: in the office every single day to be effective or
Speaker 1: to be efficient in their job, that that notion is
Speaker 1: completely gone. As we've been very effective during this pandemic.
Speaker 1: So when you took over as CEO, you in the
Speaker 1: process you raised million dollars with an additional public offering
Speaker 1: that was back in November. Soft Bank about six percent
Speaker 1: of the company in January and then invested llion dollars
Speaker 1: in it in February. What are you doing with all
Speaker 1: that cash? Well, we we're using it to expand our
Speaker 1: business in every dimension. You know. One of the one
Speaker 1: of the reasons why I decided to take this role,
Speaker 1: as we have incredible technology and the opportunity to exploit
Speaker 1: that technology or bring it to market for a broader
Speaker 1: customer set is right in front of us. And so
Speaker 1: we're investing heavily in globalization of our company, uh development
Speaker 1: of our commercial footprint, and then accelerating the core technology itself.
Speaker 1: So we're investing heavily in new products to create a
Speaker 1: broader portfolio to really serve in these these DNA sequencing
Speaker 1: markets which are which are growing and great opportunities. Well,
Speaker 1: talk to us about the opportunities and what that kind
Speaker 1: of growth rates you you know, what are the growth
Speaker 1: rates you anticipate Christian when it comes to revenues, when
Speaker 1: it comes to earnings, because I mean, your stuck's been
Speaker 1: on a tear. It was up more than uh focent
Speaker 1: last year, it's up another this year. It's a fifteen percent.
Speaker 1: Just in today's trade, I mean, and I will say
Speaker 1: there's a whole biotech trade going on today with the rally.
Speaker 1: You know, what is it that you can tell us
Speaker 1: about growth that justifies you know, right now evaluation a
Speaker 1: pe of three fifty. Well, I think that the one
Speaker 1: thing you can see is our our technology is highly
Speaker 1: useful in an emerging area, clinical whole genome sequencing. And
Speaker 1: that's really the ability to look at a whole the
Speaker 1: whole human genome at one time and to use it
Speaker 1: to help inform doctors of diagnosis of rare, undiagnosed diseases
Speaker 1: in oncology applications in neurobiology where very complicated diseases like
Speaker 1: Alzheimer's and things like that. The whole genome sequencing market
Speaker 1: is just that it's very infancy, and our technology we've
Speaker 1: demonstrated is superior to any other technology out there to
Speaker 1: really try to unlock the mysteries of the human genome
Speaker 1: in a clinical context. And so that's that's a huge
Speaker 1: growth opportunity. For us. You know, if you think about it,
Speaker 1: every baby born perhaps one day couldn't be sequenced, and
Speaker 1: that's a big market opportunity. Can you continue to do
Speaker 1: it alone? Just got about twenty seconds. We we will continue,
Speaker 1: We will continue to keep growing and look for opportunities
Speaker 1: to partner with people we have. We did a great
Speaker 1: collaboration with a company called him VT. Uh. You know,
Speaker 1: I think at the end of the day, we're looking
Speaker 1: at building out an ecosystem as our with our long
Speaker 1: resequencing right at the center of it. All right, Gonna
Speaker 1: leave it on that note. I'm looking at a story
Speaker 1: on the Bloomberg God or on Google DNA sequencing market
Speaker 1: to reach maybe like over eleven billion, So it's definitely growing. Hey, Christian,
Speaker 1: great to check in with you. Keep us posted on
Speaker 1: what you're up to. Christian. Henry CEO pac Bio joining
Speaker 1: us on the phone from me. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes Tim Stinovich
Speaker 1: from Bloomberg Radio. Well, this week Bloomberg Business Week featuring
Speaker 1: a deep dive into equality. It's all part of our
Speaker 1: enhanced Equality vertical here at Bloomberg and at Bloomberg News
Speaker 1: and this story will be in the issue It's out
Speaker 1: later this week and now on the Bloomberg and at
Speaker 1: Bloomberg dot com. It's about the unfair property taxes that
Speaker 1: keeps black families from gaining wealth. Here's more from Bloomberg's
Speaker 1: Really Too Young. I feel like there is no safe
Speaker 1: place for me to have this conversation because I'm gonna
Speaker 1: get one way or another. That's Delicia Scott from Detroit.
Speaker 1: She was over taxed on what was once her home.
Speaker 1: She became a proud homeowner in two thousand five, a
Speaker 1: dream because she always wanted stable housing for her kids,
Speaker 1: something she's never known. But when Scott lost her job
Speaker 1: during the Great Recession, she fell three years behind on
Speaker 1: her property tax payments, and those payments shield were much
Speaker 1: higher than she should have been paying. Then Wayne County
Speaker 1: took her home away and auctioned it off for less
Speaker 1: than ten percent of what she paid for it. I
Speaker 1: feel betrayed to last year to learn that I was
Speaker 1: over taxed by five thousand. It makes me stand, It
Speaker 1: makes me depress, It makes me feel like a failure.
Speaker 1: For years, the city of Detroit used inflated valuations of
Speaker 1: Scott's house to calculate her property tax bills. She now
Speaker 1: rents that same home for twenty seven percent more than
Speaker 1: she once paid for the mortgage. You know, it's not
Speaker 1: just a rental property. This is my home right. I
Speaker 1: raised my children in the space. Scott is not alone
Speaker 1: and her story is not unique. Her home was among
Speaker 1: tens of thousands in Detroit's lower income black neighborhoods that
Speaker 1: the city's assessors routinely overvalued, and this happens all across
Speaker 1: the country, where nationwide data show local officials have also
Speaker 1: systematically undervalued homes in affluent areas, reducing the taxes those
Speaker 1: homeowners paid. Ben Behaves Brown leads the nonprofit organization Georgia
Speaker 1: Advancing Communities Together, which focuses on affordable housing and community development.
Speaker 1: She says, the entire real estate system has a role
Speaker 1: to play in equitable housing, and it all starts with training,
Speaker 1: not just your training to get your license and your
Speaker 1: training for renewal, but to also go deeper into ethics,
Speaker 1: trainings that look at in turn racial biases and how
Speaker 1: to overcome them. In many cases, real estate investors profit
Speaker 1: off of unfair tax burdens, but for the people who
Speaker 1: they weigh on. Like Delicias Scott, it leads to a
Speaker 1: vicious cycle of unpaid bills and property seizures and ultimately
Speaker 1: destroys the best chance for families to build generational wealth.
Speaker 1: For more on this story, subscribed to the Paycheck podcast
Speaker 1: from Bloomberg, with a new season focusing on the racial
Speaker 1: wealth gap. You can find Paycheck on Apple, Spotify, or
Speaker 1: wherever you get your podcasts. I already need a young
Speaker 1: Bloomberg Radio, all right, And the crux, the basic uh
Speaker 1: story that is one of the most read on the
Speaker 1: Bloomberg Today. Here with his story is Bloomberg News Projects
Speaker 1: and Investigations reporter Jason Grotto on the phone in Chicago.
Speaker 1: Although in Bloomberg business Week editor Joe Weber on the
Speaker 1: access line in Brooklyn. I have to say, Joel, Tim
Speaker 1: and I've been talking about this story so much. Um,
Speaker 1: it's just so unfair. Yeah, And that's I think the
Speaker 1: unfairness is the thing that um really stings about this one.
Speaker 1: And you know, everybody hates property taxes to begin with,
Speaker 1: but then to have unfair qualities kind of layered on
Speaker 1: top of it, I think is the thing that can
Speaker 1: definitely provoke some outrage, and it is one of these
Speaker 1: things that sort of hidden in plain sight. Um, but
Speaker 1: it does affect people of color, especially black communities, disproportionately. So,
Speaker 1: so Jason, help us. You've been through so much data
Speaker 1: on this one. Help us break down what you found. Well,
Speaker 1: first of all, thanks so much for having me everybody. Um, well,
Speaker 1: so you know, the thrust of this story is actually
Speaker 1: based on a mass of study out of the University
Speaker 1: of Chicago Hair School of Public Policy. A professor there,
Speaker 1: Chris Berry, analyzed twenty six million property tax records over
Speaker 1: a ten year period and all over the country. Um,
Speaker 1: the analysis found the same pattern, and that is lower
Speaker 1: priced homes being over assessed and higher priced ones being
Speaker 1: under assessed relative to the market value of those homes.
Speaker 1: And of course all property taxes are based off of
Speaker 1: these valuations. So it's sort of bad data in, bad
Speaker 1: data out. And the result is it just excused the
Speaker 1: entire property tax um uh and places a much greater
Speaker 1: burden on those who can support it, makes it regressive.
Speaker 1: So tell us the story of Delicia here. So you know, Uh,
Speaker 1: Delicia is someone who you know, I've been talking with
Speaker 1: for many, many months. Uh. You know, obviously it took
Speaker 1: a lot of bravery for her to come out and
Speaker 1: actually talk and put her story out there. You know,
Speaker 1: there's a lot of shame that goes on here. But essentially,
Speaker 1: you know, she bought a home back in two thousand
Speaker 1: and five after working at a corporate cafeteria. She doubled
Speaker 1: her income when she got a job at a domestic
Speaker 1: violence shelter and was able to qualify for a mortgage,
Speaker 1: and and things were going along fine until the Great
Speaker 1: Recession when she lost her job and it took her
Speaker 1: a couple of years to get a job back, and
Speaker 1: she missed a tax payment, and once you fall behind
Speaker 1: on property taxes, it's really difficult, you know, to get back, uh,
Speaker 1: you know, caught up with those because there's so many
Speaker 1: fees and fines that get ladled on and so she
Speaker 1: just couldn't catch up. Um, the Wayne County, the county
Speaker 1: you know for Detroit, foreclosed down the home and an
Speaker 1: auction it off, as your story mentioned, And since then,
Speaker 1: it's been sold two more times while she's been renting
Speaker 1: the home. So the last sale was for eighty four
Speaker 1: thousand dollars um, you know, far more than she paid originally.
Speaker 1: And you know, part of the reason why the value
Speaker 1: is gone up because her rents have gone up because
Speaker 1: now you know, it's an income producing property and the
Speaker 1: cash that it that it throws off every month is
Speaker 1: keeping the value high. Well, the investment, right, there's a
Speaker 1: whole investment angle into that, and and I wish we
Speaker 1: had more time. But one thing I do want to
Speaker 1: get to is this whole idea between you know, tax
Speaker 1: assessment being overvalued and private appraisal sales being undervalued. And
Speaker 1: as you say, Christopher Berry's research, it's not just Detroit.
Speaker 1: You talk about it an example in Brooklyn. Oh yeah,
Speaker 1: it's all over the place. We we spoke with a
Speaker 1: woman Carmen Daniels in East New York, you know who
Speaker 1: you know. The really hard thing here is this Daniels
Speaker 1: her property, uh, you know, a single family home. Um.
Speaker 1: She felt like the valuation that the New York City
Speaker 1: Department of Finance put on it was pretty good, you know,
Speaker 1: she thought it was pretty fair. But then she learned that,
Speaker 1: you know, three miles away in Clinton Hill, there's a
Speaker 1: condo that someone bought for three million dollars and the
Speaker 1: tax you know, if taxed as if it were worth
Speaker 1: only one point two millions. So even though that home
Speaker 1: the market value is eight times greater than hers, the
Speaker 1: actual tax bill is only a thousand dollars more for
Speaker 1: that proper higher price property. So once again, the burden
Speaker 1: of it is, you know, tilted unfairly. There's something called
Speaker 1: the effective tax rate, which I'm sure everyone knows about.
Speaker 1: That's what gets skewed because of these valuation I have
Speaker 1: to ask, give me quick, fifteen seconds, Detroit doing anything
Speaker 1: about this, just very quickly. Well, there's a press conference tomorrow. Um,
Speaker 1: so far we haven't heard anything from the city's first
Speaker 1: kind of up in the year. All right, listen, we're
Speaker 1: gonna be following this story and we are counting on
Speaker 1: you to update us on it because it's an important one. Jason,
Speaker 1: thank you so much. Jason Grotto, Projects and Investigations reporter
Speaker 1: at Bloomberg News with us from Chicago. Jill Weber, Editor
Speaker 1: Bloomberg Business Week on the remote access from Brooklyn. This story,
Speaker 1: it is going to be in the current issue of
Speaker 1: Bloomberg Business Week magazine. It's already online and on the
Speaker 1: Bloomberg This is Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes, Tim Stinovic on Bloomberg Radio. All Right,
Speaker 1: so this half hour, we've got two smart political stories.
Speaker 1: Let's get to the first one. It's from Bloomberg business
Speaker 1: Week national correspondent Josh Green. He writes about President Finds administration,
Speaker 1: specifically on his picks at the Department of Justice and uh,
Speaker 1: the Anti Trust chief. You talked to Josh about this,
Speaker 1: didn't you. Yeah, we talked to him on quick Take
Speaker 1: earlier today. This is a big story, kind of a
Speaker 1: perfect time for Josh to publish this Business Week story. Yeah. Absolutely,
Speaker 1: I mean we've been looking at this. Let's get into
Speaker 1: it with Josh Green. He's also the author of Devil's Bargain,
Speaker 1: Bargain Steve Bannon, Donald Trump and the Nationalist up Rising.
Speaker 1: We might talk to him little bit about that in
Speaker 1: just a moment too. He's with us on the phone
Speaker 1: in Washington, DC. So Josh, so listen, we've been watching
Speaker 1: Joe Biden roll out his team his anti trust pick.
Speaker 1: This is going to be a big one. Um. Yeah,
Speaker 1: it is, um. And we've gotten, you know, early indication
Speaker 1: this morning when the news broke that he's planning to
Speaker 1: appoint Lena Khan to the Federal Trade Commission that you
Speaker 1: know he's he's open to this band of reformers has
Speaker 1: been pushing to change and I trust law over the
Speaker 1: last three or four years. But I think the two
Speaker 1: big jobs that remained to be filled that will tell
Speaker 1: us a lot about what Biden really intends to do
Speaker 1: as far as big tech and ant I trust are
Speaker 1: the Anti Trust chief at the Department of Justice and
Speaker 1: the chairman of the FTC, which is which are two
Speaker 1: big jobs that he has yet to fulfill. So I
Speaker 1: think that's what everybody's going to have their eyes on
Speaker 1: now going forward. Who are some potential candidates for those Well,
Speaker 1: two of the ones I mentioned UM for the d
Speaker 1: o J job are Rnata Hess who was the had
Speaker 1: actually had the job at the end of the Obama administration.
Speaker 1: She was the acting chief UM. But she has somebody
Speaker 1: who has worked for a lot of the big tech
Speaker 1: companies like Amazon and Google, and there's really been a
Speaker 1: push from progressive against appointing someone like that. UM. The
Speaker 1: other kind of candidate that I mentioned is a techno
Speaker 1: lawyer named Jonathan Cantor who is the favorite of a
Speaker 1: lot of progressive UM. He has worked for companies like
Speaker 1: Yelped that have sued a lot of the big tech giants. Uh.
Speaker 1: And the thinking is that if Biden were to appoint him,
Speaker 1: that would send a clear signal that the government was
Speaker 1: planning to continue the Trump administration's aggressive moves against breaking
Speaker 1: up big tech power. Okay, so I'm glad you brought
Speaker 1: that up, because this is something that we talked a
Speaker 1: lot about on Quicktake earlier today, Josh. The the political
Speaker 1: element of this, we talked how there seems to be
Speaker 1: bipartisan support for you know, quote unquote reigning in big tech.
Speaker 1: How do democrats feel about big tech versus how President
Speaker 1: Trump and Republicans feel about big tech. Well, it's an
Speaker 1: interesting question. I mean, it's clear, and it has become
Speaker 1: more clear since the January sixth Capital Insurrection that Republicans
Speaker 1: antipathy towards dick tech is mainly driven by the belief
Speaker 1: that the tech companies are unfair to or censor conservative
Speaker 1: viewpoints um, including knocking Donald Trump off Facebook and Twitter,
Speaker 1: uh and and and banning the kind of conspiracy theories
Speaker 1: that have become very popular among hard right Republicans figures
Speaker 1: both politicians and political actors on social media networks. Democrats,
Speaker 1: I think by contrasts, or at least the reform minded
Speaker 1: Stripe Democrats are more worried about things like UH, competition, innovation,
Speaker 1: and the harms that things like misinformation due to our
Speaker 1: democracy generally, UM outlets like Facebook were a big vector
Speaker 1: of misinformation that helped to drive these attacks UH, and
Speaker 1: and that seemed to be UH coursing in our culture
Speaker 1: and and and polarizing our politics. And a lot of
Speaker 1: Democrats trace that to the problem of monopoly power in
Speaker 1: the tech industry. So while there is bipartisan opposition to
Speaker 1: big tech, it will be interesting to see if they
Speaker 1: agree on the same problems and if they can come
Speaker 1: together behind an antitrust chief who has yet to be
Speaker 1: named to go after these I talked to Republican Senator
Speaker 1: Mike Leaves who said he was certainly open um to
Speaker 1: getting behind the Democratic pick, but it would have to
Speaker 1: be one that spoke about the kind of issues that
Speaker 1: he's concerned about as Republican. Well, I do want under
Speaker 1: to Josh, having spoken to you know, some of our
Speaker 1: legal folks here and reporters, whether or not we've got
Speaker 1: to change the legal definition of monopoly in order for
Speaker 1: there to be something more significant against some of the the
Speaker 1: big tech uh, some of the big tech companies, you know.
Speaker 1: I think that's a part of it. In speaking to
Speaker 1: law professors for my story, looking at the at the
Speaker 1: what's at stake in the n I trust chief, you know,
Speaker 1: one of them warned me that if progressives get too
Speaker 1: far out over their skis will actually go beyond what
Speaker 1: the law allows. Um. But I think it's also worth
Speaker 1: mentioning I sort of flick up the piece that I mean.
Speaker 1: There are also efforts underwigh in Congress. Um. There are
Speaker 1: senators like Amy Klobaschar who have been looking at broadening
Speaker 1: and I trust law, strengthen the Justice Department. So this
Speaker 1: is really a multi pronged effort. Um. But in order
Speaker 1: to be as aggressive as some of these reformers would like,
Speaker 1: it would definitely take changes in the law. Um. Hey, listen,
Speaker 1: since we have you. And then in the next segment,
Speaker 1: we're going to talk a little bit about Uh, Sophie
Speaker 1: Alexander's story that's on the Bloomberg about how the Trump
Speaker 1: Organization and really Trump Donald Trump is going to look
Speaker 1: to figure out how does he hold on to those
Speaker 1: seventy four million supporters that brought him Uh, you know,
Speaker 1: that backed him in November. How does he turn them
Speaker 1: into basically Trump consumers in terms of his business empire.
Speaker 1: What are you watching when it comes to Donald Trump
Speaker 1: at his next steps right now? That's a great question.
Speaker 1: The first thing I'm gonna be watching is how he
Speaker 1: communicates with him. I mean, he's been knocked off of
Speaker 1: social media. He's missing the platforms that were so powerful
Speaker 1: for him. But as we've seen in a lot of
Speaker 1: the political fights just just since his impeachment, he still
Speaker 1: has an iron grip over the Republican Party, and he
Speaker 1: now has a presidential office that sends out um tweet
Speaker 1: like memos to two reporters and the press at all
Speaker 1: hours now. So he's certainly trying to keep a hand
Speaker 1: in the fray and keep his brand intact um. But
Speaker 1: there's been a lot of speculation among among the porters
Speaker 1: and political types about how exactly he's going to monetize that.
Speaker 1: Is he going to start his own network, is he
Speaker 1: going to sign a Fox News contract? Is he going
Speaker 1: to try and do something commercially to take advantage of
Speaker 1: this group, or is he more interested in holding onto
Speaker 1: them as a political party. And in the early indications
Speaker 1: we've gotten are that he's most interested in politics. He's
Speaker 1: going out and said that he intends to punish the
Speaker 1: Republicans who voted to impeach him. Uh. He sent a
Speaker 1: letter to the Republican National Committee, um, sort of threatening
Speaker 1: them not to use his image in his name to
Speaker 1: read money because some of that goes to backers. Um.
Speaker 1: So we're still waiting to see. But it's clear that
Speaker 1: he intends to keep his hand in politics and the
Speaker 1: business in a way that ex presidents haven't often in
Speaker 1: the past. We can definitely count on that. All right, Josh,
Speaker 1: thank you so much, really appreciate it. I always can
Speaker 1: count on Josh Green interesting aspects when it comes to
Speaker 1: our political system. Josh Green, National correspondent Bloomberg Business Week.
Speaker 1: Check out his story we featured in the coming upcoming
Speaker 1: issue of the magazine on Road Macro Journal. Yeah but
Speaker 1: you let me drive. No, no, no no, drive home, honey, please,
Speaker 1: I'll do the riding drivel let me I want to drive.
Speaker 1: Just drive, baby, than the questions dry. He's the drive
Speaker 1: to the Globe Commune. Thanks, we'll drying us on Bloomberg Radio.
Speaker 1: All right, just spent eleven minutes left in today's trading session.
Speaker 1: It is time for the drive to the close. Back
Speaker 1: with us as Anton Shuts, He's president and chief investment
Speaker 1: officer at Mendon Capital Advisers. Back with us on the
Speaker 1: phone from Florida. Um, Anton, nice to have you here.
Speaker 1: How's it going. Well, it's been a lot more fun
Speaker 1: this year than it was really left. Oh my gosh,
Speaker 1: that is so true. Well, all right, so let's just talk.
Speaker 1: Let's start kind of big picture. Uh uh. We've certainly
Speaker 1: seen the treasury curve move, We've seen certainly a different
Speaker 1: market environment. How do you see it, especially for the
Speaker 1: financials that you cover. Well, um, you know, the thank
Speaker 1: you for the all the stimulus checks, because really it's
Speaker 1: it's kept you know, the economy going, it's kept credit
Speaker 1: quality strong and as people anticipate inflation, you've got a
Speaker 1: yield curve now, and you know, banks trade with the
Speaker 1: yield curve. Even though this yield curve isn't the biggest,
Speaker 1: most important thing for them, it's still helpful because they've
Speaker 1: got reinvestment and obviously buying treasuries a sixty basis points
Speaker 1: doesn't really make anybody any money. So where are you
Speaker 1: seeing opportunity when it comes to banks? So? Um, First
Speaker 1: of all, thanks, I've got to get their costs in order.
Speaker 1: You know, you saw a merger this morning was So five.
Speaker 1: They bought a small bank. Fintech and banks are poliding.
Speaker 1: So banks have got to cut costs that you do
Speaker 1: invest in fin techs UH the departner, and so mergers
Speaker 1: will be very high among banks and I you'll see
Speaker 1: more UH fintech buying bank charters, and you'll see more
Speaker 1: banks investing, you know, billions of dollars in financial technology
Speaker 1: to improve the way they reach their customers. Well, it's
Speaker 1: interesting about it. Well, it's interesting too that you said no,
Speaker 1: forgive me. You know, I'm just thinking about what you
Speaker 1: were talking about. Because JP Morgan, Chase too came down,
Speaker 1: came out today, and they are pulling the plug on
Speaker 1: their Chase Pay digital wallet, just about a year after
Speaker 1: UH discontinuing the standalone app. So it's interesting. I feel like,
Speaker 1: you know, the big big banks kind of you know,
Speaker 1: tiptoeing into new tech, but also they're really pretty cautious.
Speaker 1: It feels like, I mean, what's is there a bigger
Speaker 1: trade or a bigger, bigger move that you see coming. Well,
Speaker 1: you know, I like investing in banks that have not
Speaker 1: only a banking product, but also have the chance to
Speaker 1: benefit from this change in technology. So like a live
Speaker 1: Oat bank which has a fund that invest in fintech,
Speaker 1: has five wrecked investments in fintech. Uh, like a fin
Speaker 1: Zac which is a new core challenger. Um, you know,
Speaker 1: you've really got the best of a bunch of world's right,
Speaker 1: You've got a yield code, you've got uh, you know,
Speaker 1: lots of growth from you know, Triple P, and you've
Speaker 1: got some great new initiatives from Small Business Administration. So
Speaker 1: you know, you've really got a lot of things going
Speaker 1: on a positive perspective. So when it comes when it
Speaker 1: comes into consolidation within these small regional banks, do you
Speaker 1: see it happening between these small regional banks. Did you
Speaker 1: see more of these sort of soap ideals these large
Speaker 1: fintech companies, whether or not they're publicly traded or privately
Speaker 1: held buying them up? I think you're gonna see both. Um.
Speaker 1: You know, if you think about costs, banks have to
Speaker 1: drive costs down. The one thing that the crisis did
Speaker 1: do is accelerated the adoption of financial technology by businesses
Speaker 1: and consumers and probably accelerated about like five years you know,
Speaker 1: if you think about it, so many people never used
Speaker 1: to technology to access to the bank, but during the
Speaker 1: midst of the crisis, they have no choice. I mean,
Speaker 1: if you wanted to transact, you had to use technology
Speaker 1: and and so um, everybody's responding to that. And the
Speaker 1: key is to get the cost down to the lever
Speaker 1: of the product to the consumer, to deliver the product
Speaker 1: to your your business to be up with the latest technology.
Speaker 1: And you know, you've also got a regulatory environment that's
Speaker 1: going to shift with a new administration. So you know,
Speaker 1: getting some of these mergers announced earlier in the year
Speaker 1: will be more successful than anything later in the articularly
Speaker 1: the biggest If you see big deals later in the year,
Speaker 1: they may have a hard time on some of the
Speaker 1: new regulators getting approved. Smaller transactions are going to have
Speaker 1: a chance to get approved throughout, but it definitely gets
Speaker 1: a little nicer. And all the transactions that right now
Speaker 1: so far have been well received by the market. You know,
Speaker 1: you saw M and T by people's that transaction was
Speaker 1: very well received. The C I T transaction, which was
Speaker 1: done right in the middle of the crisis. I mean
Speaker 1: that stock has literally more than doubled US since that
Speaker 1: deal is announced, the market likes that transaction a lot
Speaker 1: um and I continue to see a lot of growth
Speaker 1: in the states that have been very tax friendly. You know,
Speaker 1: Texas has has that tremendous growth, you know, Florida, tennessee
Speaker 1: that tremendous growth, and companies within those markets are going
Speaker 1: to merge with each other and get bigger and stronger.
Speaker 1: Anton do you see real regulatory risk coming out of
Speaker 1: the Biden administration for the financial services sector? Well, um,
Speaker 1: particularly on the consumer finance side. The CFPB is is
Speaker 1: going to have some real teeth to it, and I
Speaker 1: expect them to be pretty active on consumer finance. But
Speaker 1: you know, I think it's a very different atmosphere from
Speaker 1: a regulatar perspective. But but that's where some of the
Speaker 1: biggest abuses have taken place, and they want to try
Speaker 1: to protect the consumer that that's where they're going to
Speaker 1: find it. But you know, very very large transactions are
Speaker 1: gonna have a real challenge, particularly as more and more
Speaker 1: of the regulators getting replaced. Quarrels at the FED ends
Speaker 1: in November, I believe go back to though, I'm just
Speaker 1: looking at a couple of names that you mentioned, and
Speaker 1: I just want to make sure our it's heard at
Speaker 1: Live Oak Bank shares tickers l o B, I mean
Speaker 1: on a tear last year up about and fifty percent uh,
Speaker 1: and it's continuing to move higher this year. I think
Speaker 1: it's up another. Triumph Bancorp was up about twenty percent
Speaker 1: last year and it's I think up about si this year.
Speaker 1: What's the story specifically? Is it just a better yield
Speaker 1: curve or is it again that fintech play? What is
Speaker 1: it specifically? Because that's pretty tremendous, and I know they're
Speaker 1: coming off of, you know, being maybe beaten, beaten down
Speaker 1: a little bit, but still that's a big run. Yeah. Well,
Speaker 1: I mentioned what you know, Live Oaks drivers were earlier
Speaker 1: and early having a being a major national SPA lender,
Speaker 1: the largest small business administration lender in the country. Right,
Speaker 1: And there's some great new programs out there, and obviously
Speaker 1: the financial technology exposures it is tremendous as well. On Triumph,
Speaker 1: they actually have a payment app specifically for the trucking
Speaker 1: industry that could translate potentially into shipping and many other things.
Speaker 1: And people recognize the value of that app and and
Speaker 1: and how powerful it's been in capturing market share, so
Speaker 1: so that one has been driven by it. And then
Speaker 1: particularly in New York, you've got a signature bank which
Speaker 1: has got um, you know, really strong exposure so to
Speaker 1: silver gate, to some of the new digital currencies, you know,
Speaker 1: and they are getting tremendous deposits, tremendous market share, and
Speaker 1: you know, things like stable points are gonna be really important. Sure,
Speaker 1: you know you've got bitcoin the other ones that are important,
Speaker 1: but volumes continues to increase in those Yeah, good stuff, Um, Anton,
Speaker 1: thank you so much, really appreciated. Anton Shuts He's president
Speaker 1: and chief investment officer at Mendon Capital Advisers. Love talking
Speaker 1: names with him. Uh, joining us once again on the
Speaker 1: phone from Florida. Right, kind of interesting. Some of those
Speaker 1: smaller bank plays are regional bank plays. Yeah. And the
Speaker 1: focus that he has on areas like Florida, Tennessee, Texas
Speaker 1: where people are moving. Yeah, exactly. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
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