1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,440 Speaker 1: Along with my co host Lisa A. Bramowitz. Each day 3 00:00:11,480 --> 00:00:15,000 Speaker 1: we bring you the most important, noteworthy, and useful interviews 4 00:00:15,040 --> 00:00:17,520 Speaker 1: for you and your money, whether you're at the grocery 5 00:00:17,560 --> 00:00:20,560 Speaker 1: store or the trading floor. Find the Bloomberg p m 6 00:00:20,680 --> 00:00:31,200 Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. 7 00:00:31,200 --> 00:00:33,760 Speaker 1: Before we do anything, we consult with Ira Jersey, are 8 00:00:33,840 --> 00:00:38,520 Speaker 1: interest rate strategist for Bloomberg Intelligence, and he joins us. Now. Ira, 9 00:00:38,640 --> 00:00:41,840 Speaker 1: in one of the most recent pieces I have read 10 00:00:42,080 --> 00:00:46,120 Speaker 1: that there's a variety of different type their variety of 11 00:00:46,120 --> 00:00:50,239 Speaker 1: flattening types when it comes to the yield curve, and 12 00:00:50,320 --> 00:00:52,320 Speaker 1: I'm wondering, what's that there. I thought, you know, I 13 00:00:52,360 --> 00:00:56,720 Speaker 1: thought flat is flat, but apparently not. Yeah. So, so 14 00:00:56,760 --> 00:00:59,840 Speaker 1: there's basically two ways that the curve can can change, 15 00:01:00,000 --> 00:01:03,000 Speaker 1: and one way is during market selloffs, and the other 16 00:01:03,000 --> 00:01:06,880 Speaker 1: way is during market rallies and um and and what 17 00:01:06,880 --> 00:01:09,520 Speaker 1: what what? When you look at the history of interest 18 00:01:09,640 --> 00:01:12,480 Speaker 1: rates and what the curves none versus the economy, what 19 00:01:12,600 --> 00:01:15,720 Speaker 1: you find is that it's really when you get bare flattening, 20 00:01:15,760 --> 00:01:17,520 Speaker 1: and that's the type of flattening that we've had now 21 00:01:17,959 --> 00:01:21,400 Speaker 1: that's preceded economic slowdowns. But when you get UM, when 22 00:01:21,400 --> 00:01:23,959 Speaker 1: you get both flattening, so flattening for example, like we 23 00:01:24,000 --> 00:01:27,560 Speaker 1: had inn when the Fed was buying long end bonds 24 00:01:27,600 --> 00:01:29,680 Speaker 1: and you wound up getting a very flat yield curve 25 00:01:29,720 --> 00:01:34,080 Speaker 1: as well, that tended that type of flattening actually tends 26 00:01:34,080 --> 00:01:36,039 Speaker 1: to be good for the economy. So it's basically that 27 00:01:36,080 --> 00:01:38,880 Speaker 1: you have low interest rates, people are um. People are 28 00:01:38,880 --> 00:01:42,360 Speaker 1: trying to stimulate the economy by um by taking advantage 29 00:01:42,360 --> 00:01:44,399 Speaker 1: of those low interest rates. But when the curve flattens 30 00:01:44,400 --> 00:01:46,679 Speaker 1: while the front end is selling off, it's it's not 31 00:01:46,800 --> 00:01:49,400 Speaker 1: so good. So you know, there is a reason for 32 00:01:50,080 --> 00:01:52,200 Speaker 1: kind of a little bit of concern with the the 33 00:01:52,600 --> 00:01:55,200 Speaker 1: yield curve being as flat as it is. And quite frankly, 34 00:01:55,640 --> 00:01:58,360 Speaker 1: just from a technical perspective, we're sitting right on top 35 00:01:58,440 --> 00:02:01,760 Speaker 1: of a very important technical level four UM for the 36 00:02:01,800 --> 00:02:04,880 Speaker 1: two year versus ten year treasury curve. Okay, So in 37 00:02:04,920 --> 00:02:08,960 Speaker 1: other words, for all of the enthusiasm we hear about stocks, 38 00:02:09,040 --> 00:02:12,840 Speaker 1: all the optimism, the yield curve to you is sending 39 00:02:12,960 --> 00:02:16,360 Speaker 1: an ominous message that traders need to pay attention to. 40 00:02:17,160 --> 00:02:19,440 Speaker 1: That is saying that the U. S economy is slowing 41 00:02:19,520 --> 00:02:22,880 Speaker 1: down and is heading towards some kind of downturn. Well, 42 00:02:23,400 --> 00:02:26,680 Speaker 1: so it takes a long there's long leads here. So 43 00:02:26,960 --> 00:02:29,840 Speaker 1: when the yield curve gets to zero gets to flat, 44 00:02:29,960 --> 00:02:32,399 Speaker 1: what you've experienced over the last forty years or so 45 00:02:33,000 --> 00:02:35,680 Speaker 1: was sometime within the next two to four years. So 46 00:02:35,880 --> 00:02:39,360 Speaker 1: again long long leg there. Within two to four years, 47 00:02:39,360 --> 00:02:42,280 Speaker 1: you tend to get an economic slowdown. But you know, 48 00:02:42,280 --> 00:02:45,440 Speaker 1: it's not the curve itself that's causing that. It's you know, 49 00:02:45,480 --> 00:02:47,880 Speaker 1: the reason why we get this bare flattening is because 50 00:02:48,200 --> 00:02:51,200 Speaker 1: front and interest rates are being increased by the Federal Reserve. 51 00:02:51,360 --> 00:02:54,440 Speaker 1: So um, so it's really the policy error. So it's 52 00:02:54,440 --> 00:02:58,160 Speaker 1: really the actions of the central bank that is causing 53 00:02:58,240 --> 00:03:01,560 Speaker 1: the curve to flatten, and that's where, um you wind 54 00:03:01,639 --> 00:03:03,920 Speaker 1: up getting the slow down in the economy. Get you know, 55 00:03:03,960 --> 00:03:05,840 Speaker 1: one of the impacts and effects of that, and kind 56 00:03:05,840 --> 00:03:07,400 Speaker 1: of the canary in the coal mine might be the 57 00:03:07,480 --> 00:03:10,680 Speaker 1: flattening curve. But it's um But like I mentioned, the 58 00:03:10,680 --> 00:03:13,000 Speaker 1: curb being flat in and of itself isn't necessarily bad. 59 00:03:13,120 --> 00:03:15,680 Speaker 1: It's the way that it flattens and why, and that's 60 00:03:15,960 --> 00:03:17,920 Speaker 1: that's the policy are part of this, all right, so 61 00:03:18,120 --> 00:03:21,120 Speaker 1: policy error from the Fed, of course, UH, FED Chair 62 00:03:21,200 --> 00:03:23,880 Speaker 1: jin Yellen is going to step down as soon as 63 00:03:23,960 --> 00:03:28,400 Speaker 1: the appointed next FED Chair, Jerome Powell, is confirmed and 64 00:03:28,480 --> 00:03:32,320 Speaker 1: sworn in early next year. I'm wondering, given the fact 65 00:03:32,320 --> 00:03:34,440 Speaker 1: that Chair Yellen is going to be departing, and given 66 00:03:34,520 --> 00:03:39,920 Speaker 1: the vacancies already a mug among the FED governors, can 67 00:03:39,960 --> 00:03:43,560 Speaker 1: we really even have visibility into the path of the 68 00:03:43,560 --> 00:03:45,920 Speaker 1: Fed's rate hikes next year? I mean, presumably that the 69 00:03:46,200 --> 00:03:50,120 Speaker 1: sort of policy error here is that they're hiking too fast. Yeah, 70 00:03:50,120 --> 00:03:52,360 Speaker 1: that that's exactly right. And I know that the market 71 00:03:52,360 --> 00:03:54,600 Speaker 1: thinks that they're hiking too fast or that they'll hike 72 00:03:54,640 --> 00:03:56,960 Speaker 1: too much, one or the other. But either way it 73 00:03:57,000 --> 00:03:58,920 Speaker 1: would be that would be a policy error, and it 74 00:03:59,040 --> 00:04:01,240 Speaker 1: you know, it's hard to judge what the future Fed's 75 00:04:01,280 --> 00:04:02,680 Speaker 1: going to be. We're going to get a whole lot 76 00:04:02,680 --> 00:04:05,280 Speaker 1: of new governors. We already have a number of new 77 00:04:05,360 --> 00:04:07,240 Speaker 1: members of the f O m C in in the 78 00:04:07,320 --> 00:04:12,120 Speaker 1: form of of several presidents who have been appointed recently. UM, 79 00:04:12,160 --> 00:04:14,600 Speaker 1: and you're gonna get a new a new vice chair 80 00:04:14,640 --> 00:04:18,320 Speaker 1: of the Federal Open Market Committee when UM, when new 81 00:04:18,400 --> 00:04:21,400 Speaker 1: York Fed President Dudley retires at the end of next 82 00:04:21,440 --> 00:04:25,920 Speaker 1: year resigns um sometime next year, so so we really 83 00:04:25,920 --> 00:04:28,680 Speaker 1: don't know exactly what future monetary policy will bring. So 84 00:04:28,720 --> 00:04:31,560 Speaker 1: that's one reason why listening to the confirmation hearings of 85 00:04:31,640 --> 00:04:34,719 Speaker 1: Jerome Powell and uh you know who the who the 86 00:04:34,760 --> 00:04:38,360 Speaker 1: President picks as the next vice chair, those two seats 87 00:04:38,360 --> 00:04:42,120 Speaker 1: in particular will probably be very important for um for 88 00:04:42,240 --> 00:04:44,760 Speaker 1: what the future monetary policy is. What will they be 89 00:04:44,800 --> 00:04:46,680 Speaker 1: more dubbish, will they be more hawkers, or will they 90 00:04:46,680 --> 00:04:49,000 Speaker 1: stay the course like it's you know, we can all 91 00:04:49,000 --> 00:04:52,080 Speaker 1: make speculations, but in reality, I don't think anyone quite 92 00:04:52,160 --> 00:04:54,320 Speaker 1: knows at this point. I just want to go back 93 00:04:54,360 --> 00:04:56,520 Speaker 1: to something you talked about having to do with this 94 00:04:56,600 --> 00:05:00,440 Speaker 1: flattening of the yield curve and your analysis at last 95 00:05:00,480 --> 00:05:03,960 Speaker 1: time that this offered itself. We saw a lot of 96 00:05:04,000 --> 00:05:07,080 Speaker 1: bond buying by the Federal Reserve, by the Central Bank, 97 00:05:07,279 --> 00:05:10,400 Speaker 1: and that's not taking place now. Now, that's right, And 98 00:05:10,440 --> 00:05:13,360 Speaker 1: in fact, you know, the Federal Reserve is um already 99 00:05:13,400 --> 00:05:17,040 Speaker 1: starting to allow its portfolio to run off, and starting 100 00:05:17,040 --> 00:05:20,320 Speaker 1: in price February or March next year, the Treasury Department 101 00:05:20,400 --> 00:05:23,360 Speaker 1: is going to have to start issuing more bonds, partially 102 00:05:23,440 --> 00:05:26,440 Speaker 1: due to um to this extra supply that the Fed's 103 00:05:26,480 --> 00:05:28,600 Speaker 1: not going to be buying every every month when they 104 00:05:28,640 --> 00:05:31,480 Speaker 1: have maturities, but also because there's going to be higher 105 00:05:31,520 --> 00:05:35,040 Speaker 1: deficits starting next year, um just because Medicare and sort 106 00:05:35,080 --> 00:05:37,159 Speaker 1: of security payments are going to go up, and and 107 00:05:37,240 --> 00:05:40,560 Speaker 1: the potential for additional deficits based on on the budget 108 00:05:40,560 --> 00:05:43,359 Speaker 1: that Congress passed recently, which could add another hundred and 109 00:05:43,360 --> 00:05:47,160 Speaker 1: fifty billion dollars of potential supply into the market. So 110 00:05:47,160 --> 00:05:49,560 Speaker 1: so there is going to be this, uh, this supply. 111 00:05:50,160 --> 00:05:51,560 Speaker 1: I don't want to call it fear, but there is 112 00:05:51,560 --> 00:05:53,520 Speaker 1: going to be certainly a supply push which is going 113 00:05:53,520 --> 00:05:57,080 Speaker 1: to have to be absorbed, and that could certainly affect prices, 114 00:05:57,160 --> 00:05:59,919 Speaker 1: and where and how it affects those prices will be 115 00:06:00,080 --> 00:06:03,640 Speaker 1: determined by what bonds the Treasury Department decides the issue. 116 00:06:03,839 --> 00:06:06,760 Speaker 1: So will this be a good empirical test that if 117 00:06:06,800 --> 00:06:11,479 Speaker 1: stock prices continue to move higher or are higher. Let's 118 00:06:11,480 --> 00:06:17,360 Speaker 1: say in that the argument that stock prices moved because 119 00:06:17,440 --> 00:06:22,360 Speaker 1: of this extra liquidity from central banks, that theory would 120 00:06:22,400 --> 00:06:27,200 Speaker 1: be tossed out the window if we saw prices accelerate. Well, 121 00:06:27,240 --> 00:06:29,960 Speaker 1: I think you know, liquidity is is a strange is 122 00:06:29,960 --> 00:06:32,600 Speaker 1: a strange thing. I think one of the things is 123 00:06:32,720 --> 00:06:35,719 Speaker 1: that you've you've seen now more recently, the fact that 124 00:06:35,800 --> 00:06:38,159 Speaker 1: you don't need all the liquidity from the FED reserve 125 00:06:38,200 --> 00:06:40,279 Speaker 1: for the economy to run. I mean, basically, what the 126 00:06:40,320 --> 00:06:42,680 Speaker 1: Fed did when they did all the bond buying, did 127 00:06:42,680 --> 00:06:45,440 Speaker 1: all the quantitative easing, was to try and jump start 128 00:06:45,480 --> 00:06:47,479 Speaker 1: the economy. It was kind of like you know, putting 129 00:06:47,760 --> 00:06:51,159 Speaker 1: a doctor putting on the the you know, the A 130 00:06:51,279 --> 00:06:53,680 Speaker 1: D and and trying to you know, kick start your heart. 131 00:06:53,800 --> 00:06:56,159 Speaker 1: That's basically what queue is. But now you know, the 132 00:06:56,200 --> 00:06:59,600 Speaker 1: economy is pumping on its own and it doesn't necessarily 133 00:06:59,640 --> 00:07:01,880 Speaker 1: need all the accommodation that it's had. Now. The problem 134 00:07:01,920 --> 00:07:04,640 Speaker 1: is is that if you pull that accommodation out too quickly, 135 00:07:05,040 --> 00:07:08,040 Speaker 1: you have a detrimental effect. And that's I think the worry, 136 00:07:08,080 --> 00:07:11,120 Speaker 1: and that's that's that's really going to be Powell's um. 137 00:07:11,440 --> 00:07:15,120 Speaker 1: The challenge for the power Powell set is not removing 138 00:07:15,120 --> 00:07:18,720 Speaker 1: accommodation too fast that you really stifled the economy and 139 00:07:18,760 --> 00:07:21,080 Speaker 1: you wind up hurting things like corporate profits and the 140 00:07:21,200 --> 00:07:25,080 Speaker 1: like were real quick, which yield curve Do you look 141 00:07:25,120 --> 00:07:28,960 Speaker 1: at so so you know the one that has the 142 00:07:29,000 --> 00:07:32,040 Speaker 1: best um, the best correlation to the economy is the 143 00:07:32,160 --> 00:07:35,560 Speaker 1: two year versus tenure treasury yield curve. UM. No, that 144 00:07:35,560 --> 00:07:37,760 Speaker 1: that's the main one. All right, Ira, Jersie, thank you 145 00:07:37,800 --> 00:07:52,440 Speaker 1: so much for joining us. As always, well, the U 146 00:07:52,640 --> 00:07:55,320 Speaker 1: S is suing to stop a T and T S 147 00:07:55,400 --> 00:07:59,720 Speaker 1: takeover of time Warner. There are all sorts of suspicions 148 00:07:59,800 --> 00:08:02,680 Speaker 1: and rumors that the Department of Justice is doing this, 149 00:08:03,200 --> 00:08:07,200 Speaker 1: uh due to CNN and President Trump's contentious relationship with that. 150 00:08:07,280 --> 00:08:10,640 Speaker 1: These have not been proven, and in fact, some are 151 00:08:10,680 --> 00:08:14,520 Speaker 1: saying that this lawsuit by the d o J resembles 152 00:08:14,720 --> 00:08:20,040 Speaker 1: classic antitrust cases that are pretty much routine. Here to 153 00:08:20,040 --> 00:08:22,720 Speaker 1: talk about it and put it into perspective is Jennifer Ree, 154 00:08:22,760 --> 00:08:26,480 Speaker 1: senior litigation analyst for Bloomberg Intelligence. She joins us in 155 00:08:26,480 --> 00:08:30,280 Speaker 1: our eleven three oh studios. Jennifer, is this a routine 156 00:08:30,440 --> 00:08:33,840 Speaker 1: antitrust case? You know? No, I would not call it 157 00:08:33,920 --> 00:08:37,200 Speaker 1: a routine antitrust case. I would call it a routine 158 00:08:37,480 --> 00:08:40,240 Speaker 1: theory of harm. And I think the big difference there 159 00:08:40,360 --> 00:08:44,000 Speaker 1: is that theories of harm from a vertical deal are 160 00:08:44,080 --> 00:08:47,920 Speaker 1: talked about in discussed. Um. Sometimes they come up and 161 00:08:47,960 --> 00:08:50,920 Speaker 1: they get resolved in mergers with behavioral remedies. But the 162 00:08:50,960 --> 00:08:53,760 Speaker 1: reason I say it's not necessarily a routine case is 163 00:08:53,800 --> 00:08:57,120 Speaker 1: because we haven't seen actual litigation to try to block 164 00:08:57,200 --> 00:09:00,240 Speaker 1: this kind of deal in a very very long time time. 165 00:09:00,280 --> 00:09:03,240 Speaker 1: And it's really kind of a departure from you know, 166 00:09:03,320 --> 00:09:05,960 Speaker 1: D O J precedent in history, and so it is. 167 00:09:06,040 --> 00:09:08,559 Speaker 1: It is surprising, and I think that's why these political 168 00:09:09,200 --> 00:09:13,120 Speaker 1: ideas are kind of haunting this. Okay, so the political 169 00:09:13,200 --> 00:09:18,720 Speaker 1: ideas are haunting this, uh potential combination. I have to 170 00:09:20,360 --> 00:09:24,120 Speaker 1: assume that somebody in the Council's office at a T 171 00:09:24,320 --> 00:09:28,760 Speaker 1: and T sat down with Mr Stevenson, the CEO, even 172 00:09:28,880 --> 00:09:33,000 Speaker 1: before they decided to make this attempt public, to go 173 00:09:33,120 --> 00:09:35,600 Speaker 1: over some of these issues. Do you think that this 174 00:09:35,720 --> 00:09:38,280 Speaker 1: was something that was discussed and then said, oh no, 175 00:09:38,360 --> 00:09:41,360 Speaker 1: we'll get over it or what do you how does 176 00:09:41,520 --> 00:09:44,000 Speaker 1: how does that work? And you're talking about in advising 177 00:09:44,040 --> 00:09:46,400 Speaker 1: the companies as whether they face risk, you know, I mean, 178 00:09:46,440 --> 00:09:48,680 Speaker 1: that's what's really tough here. My guess is that the 179 00:09:48,679 --> 00:09:51,720 Speaker 1: outside lawyers said, look, there there always can be some 180 00:09:51,760 --> 00:09:54,319 Speaker 1: harms that come from vertical deals. But look for fifty years, 181 00:09:54,360 --> 00:09:56,800 Speaker 1: they've been treated in one way. So you will likely 182 00:09:56,840 --> 00:09:58,880 Speaker 1: be able to close this deal, but you'll likely have 183 00:09:58,960 --> 00:10:01,920 Speaker 1: to agree to a consent order, a settlement where you 184 00:10:02,520 --> 00:10:05,439 Speaker 1: moderate your conduct, where you agree that after you emerged 185 00:10:05,559 --> 00:10:07,880 Speaker 1: you will behave in a certain way. You're probably going 186 00:10:07,920 --> 00:10:09,800 Speaker 1: to have to make those agreements. But with that, we 187 00:10:09,840 --> 00:10:13,120 Speaker 1: think you'll be able to close. That's likely the legal 188 00:10:13,120 --> 00:10:16,160 Speaker 1: opinion that they got. Yeah, so then they went with 189 00:10:16,200 --> 00:10:19,839 Speaker 1: that and the Department of Justice kind of turned things 190 00:10:20,240 --> 00:10:23,160 Speaker 1: on their head. I want to talk about the precedent 191 00:10:23,240 --> 00:10:26,520 Speaker 1: this sets. You know, if this is a departure from 192 00:10:26,559 --> 00:10:30,040 Speaker 1: the norm, what does this mean about a deal, uh, say, 193 00:10:30,080 --> 00:10:34,280 Speaker 1: like the Tribune at Sinclair Broadcasting merger. I mean that 194 00:10:34,360 --> 00:10:38,120 Speaker 1: combination would give the company access to seventy two percent 195 00:10:38,280 --> 00:10:41,760 Speaker 1: of the American television audience. Are you expecting this deal 196 00:10:41,920 --> 00:10:44,480 Speaker 1: to get the same kind of scrutiny from the Department 197 00:10:44,480 --> 00:10:46,800 Speaker 1: of Justice? You know, I think that's a great question 198 00:10:46,840 --> 00:10:49,400 Speaker 1: because it will be so interesting to see how that's treated. 199 00:10:49,720 --> 00:10:52,480 Speaker 1: It gives some clue as to whether politics have weighed 200 00:10:52,480 --> 00:10:54,560 Speaker 1: in on the A T and T Time Warner deal 201 00:10:54,640 --> 00:10:57,880 Speaker 1: because Sinclair theoretically we we assume as a friend to 202 00:10:57,920 --> 00:11:01,439 Speaker 1: this administration or the administrations of friend to Sinclair. And 203 00:11:01,760 --> 00:11:03,920 Speaker 1: if you look at the way past similar deals have 204 00:11:04,000 --> 00:11:06,840 Speaker 1: been treated, I would expect that they'd have to divest 205 00:11:07,000 --> 00:11:10,480 Speaker 1: sell off at least ten stations, ten stations in ten 206 00:11:10,520 --> 00:11:12,760 Speaker 1: different markets, but possibly even a few more, but at 207 00:11:12,840 --> 00:11:16,960 Speaker 1: least divest in ten markets. If we this would follow 208 00:11:17,080 --> 00:11:19,800 Speaker 1: the precedent that's been set in similar deals to the 209 00:11:19,800 --> 00:11:22,920 Speaker 1: Sinclair Tribune deal. If we don't see that, then it 210 00:11:23,000 --> 00:11:28,520 Speaker 1: makes this all look more political. I'm struggling here also, 211 00:11:28,679 --> 00:11:36,800 Speaker 1: because typically Republican administrations have been more allowing of big deals. 212 00:11:36,800 --> 00:11:41,280 Speaker 1: That's sort of the assumption that mergers have an easier 213 00:11:41,320 --> 00:11:47,600 Speaker 1: time getting through under Republican administrations. Is that an inaccurate impression? 214 00:11:47,640 --> 00:11:50,120 Speaker 1: And if it's not, how does this square with that? 215 00:11:50,640 --> 00:11:53,040 Speaker 1: You know, that's a very accurate impression. And I think 216 00:11:53,040 --> 00:11:54,880 Speaker 1: there are a lot out there that had that impression, 217 00:11:54,880 --> 00:11:57,520 Speaker 1: because if you remember, just about a month ago or so, 218 00:11:57,640 --> 00:12:01,439 Speaker 1: Senator Elizabeth Warren was asking for this new head of 219 00:12:01,480 --> 00:12:03,760 Speaker 1: antitrust at the d o J to recuse himself from 220 00:12:03,800 --> 00:12:06,400 Speaker 1: this deal, and she is against this deal. She has, 221 00:12:06,880 --> 00:12:09,920 Speaker 1: you know, vocalized her her opinion about it, So obviously 222 00:12:10,000 --> 00:12:11,920 Speaker 1: what she was thinking is that he would also just 223 00:12:12,000 --> 00:12:13,800 Speaker 1: sign on the dotted line to get let this go 224 00:12:13,880 --> 00:12:17,480 Speaker 1: forward as well. I think most of the antitrust community 225 00:12:17,559 --> 00:12:20,440 Speaker 1: is very surprised by this for that reason, and and 226 00:12:20,440 --> 00:12:23,119 Speaker 1: and that is why you hear people talking about politics 227 00:12:23,120 --> 00:12:26,240 Speaker 1: and politics weighing in, because this just seems so out 228 00:12:26,280 --> 00:12:28,880 Speaker 1: of the ordinary, well out of the ordinary or not. 229 00:12:29,200 --> 00:12:33,200 Speaker 1: CNN and Time Warner, they are all content providers, right, 230 00:12:33,240 --> 00:12:37,120 Speaker 1: they don't actually own any of the distribution assets. That 231 00:12:37,240 --> 00:12:39,959 Speaker 1: is where a T and T comes in. That's right. 232 00:12:40,200 --> 00:12:43,520 Speaker 1: So what is the anti true? What is the argument, 233 00:12:43,559 --> 00:12:46,840 Speaker 1: if you can make it, what's the antitrust argument that says, no, 234 00:12:47,080 --> 00:12:50,800 Speaker 1: you're a distribution company, We don't want you owning the 235 00:12:50,920 --> 00:12:55,760 Speaker 1: content that would then be distributed on your pathways as 236 00:12:55,760 --> 00:12:58,920 Speaker 1: well as those of your competitors. The argument that's been 237 00:12:58,920 --> 00:13:01,280 Speaker 1: made here is an economic argument, and it is that 238 00:13:01,840 --> 00:13:04,800 Speaker 1: by they get added leverage by owning the content, it 239 00:13:04,840 --> 00:13:07,240 Speaker 1: will give them the freedom to raise the price survival 240 00:13:07,280 --> 00:13:11,160 Speaker 1: distributors because either they make more money by raising the price, 241 00:13:11,400 --> 00:13:14,079 Speaker 1: or if these distributors refuse to pay that and they 242 00:13:14,080 --> 00:13:16,880 Speaker 1: have a blackout of their of their television stations. Then 243 00:13:16,960 --> 00:13:19,360 Speaker 1: some of those subscribers will be lost to that distributor 244 00:13:19,400 --> 00:13:20,720 Speaker 1: and we'll come over to a T and T. So 245 00:13:20,800 --> 00:13:23,560 Speaker 1: in the long run they'll benefit from it. Does that 246 00:13:24,280 --> 00:13:26,720 Speaker 1: mean that the next step would be to go after 247 00:13:26,760 --> 00:13:30,600 Speaker 1: a company like Comcast to divest the or split the 248 00:13:30,720 --> 00:13:35,440 Speaker 1: content producing division from the distribution division. Now, I don't 249 00:13:35,520 --> 00:13:37,920 Speaker 1: think that that that the anti drest agencies would do 250 00:13:37,960 --> 00:13:40,720 Speaker 1: that at this point unless there is some evidence or 251 00:13:40,760 --> 00:13:43,240 Speaker 1: some reason that they want to investigate the company for 252 00:13:43,280 --> 00:13:46,640 Speaker 1: potential anti competitive conduct at this point. All right, thanks 253 00:13:46,760 --> 00:13:49,959 Speaker 1: very much for being with us sharing the updates. This 254 00:13:50,040 --> 00:13:52,200 Speaker 1: is a story that's going to keep on giving. Indeed, 255 00:13:52,200 --> 00:13:56,960 Speaker 1: thank you very much. Jennifer resurstigation analyst for Bloomberg Intelligence, 256 00:13:57,200 --> 00:13:59,920 Speaker 1: speaking about a T and T S attempt to acquire 257 00:14:00,320 --> 00:14:04,000 Speaker 1: Time Warner and push back from the US Justice Department. 258 00:14:17,600 --> 00:14:20,680 Speaker 1: Uh Denver is going to get a hyperloop or rather 259 00:14:21,080 --> 00:14:24,600 Speaker 1: hyperloop inspired system, and the person who is going to 260 00:14:24,680 --> 00:14:28,520 Speaker 1: build it is Brogan. Ben Brogan, founder and chief executive 261 00:14:28,560 --> 00:14:32,160 Speaker 1: officer of Rivo based in Los Angeles, California, and he 262 00:14:32,240 --> 00:14:37,560 Speaker 1: joins US now. Brogan is an early Space X engineer 263 00:14:37,600 --> 00:14:40,920 Speaker 1: and is working on making it quicker for people to 264 00:14:40,960 --> 00:14:44,760 Speaker 1: get from one major hub to another. Brogan, thank you 265 00:14:44,800 --> 00:14:47,240 Speaker 1: so much for joining us. Can you give us a 266 00:14:47,320 --> 00:14:50,280 Speaker 1: sense of what exactly it is that you are working 267 00:14:50,280 --> 00:14:55,200 Speaker 1: on in Denver? Absolutely? Thank you in the good morning. Um, yeah, 268 00:14:55,240 --> 00:14:58,960 Speaker 1: so it is century. So I figured let's get some 269 00:14:59,000 --> 00:15:03,120 Speaker 1: more century technology into transportation. So what we're designing is 270 00:15:03,160 --> 00:15:07,440 Speaker 1: an integrated vehicle system that works in enclosed environment. Um. 271 00:15:07,520 --> 00:15:08,960 Speaker 1: So it is kind of like a hyper loop, and 272 00:15:09,000 --> 00:15:11,800 Speaker 1: that we have a dedicated roadway or guideway that we 273 00:15:11,840 --> 00:15:15,000 Speaker 1: move our vehicles, but we do not operate in a vacuum. 274 00:15:15,200 --> 00:15:17,720 Speaker 1: And we're focused more on kind of regional and super 275 00:15:17,760 --> 00:15:22,440 Speaker 1: regional travel of kind of unlocking traffic and cities. Is 276 00:15:22,480 --> 00:15:25,120 Speaker 1: what we want to do with this new technology. Can 277 00:15:25,160 --> 00:15:27,120 Speaker 1: you give us some idea of the cost of this 278 00:15:27,200 --> 00:15:31,360 Speaker 1: new technology, because there's been some estimates that well, I know, 279 00:15:31,440 --> 00:15:34,360 Speaker 1: for example, Elon Musk when he first put forth the 280 00:15:34,440 --> 00:15:38,480 Speaker 1: hyper loop concept that was back in I think the 281 00:15:38,560 --> 00:15:41,440 Speaker 1: cost was estimated at around eleven and a half million 282 00:15:41,480 --> 00:15:45,480 Speaker 1: dollars per mile of hyper loop. How have you costed 283 00:15:45,480 --> 00:15:49,160 Speaker 1: this out? Uh, well, we think we're gonna be far 284 00:15:49,280 --> 00:15:51,640 Speaker 1: cheaper than than other forms of the hyper loop. You know, 285 00:15:51,680 --> 00:15:54,240 Speaker 1: one of the things by eliminating the vacuum, of course, 286 00:15:54,280 --> 00:15:57,840 Speaker 1: it eliminates the the operating cost, eliminates some of the 287 00:15:57,880 --> 00:16:00,680 Speaker 1: capital costs. It doesn't eliminate the and cost. It brings 288 00:16:00,720 --> 00:16:04,600 Speaker 1: them down. It brings down the capital costs and of 289 00:16:04,640 --> 00:16:07,600 Speaker 1: course makes it much more safer. So we have a 290 00:16:07,600 --> 00:16:10,480 Speaker 1: partner in Denver. Region four seventy is a toll road 291 00:16:10,520 --> 00:16:12,480 Speaker 1: that moves a lot of people around the region. Already. 292 00:16:13,360 --> 00:16:15,480 Speaker 1: With our system, we can move more people on a 293 00:16:15,480 --> 00:16:18,160 Speaker 1: given lane of road. Uh, and I'll talk a little 294 00:16:18,160 --> 00:16:21,200 Speaker 1: bit about more about that in a second, but uh, 295 00:16:21,400 --> 00:16:24,000 Speaker 1: we're gonna be operating our system at the same cost 296 00:16:24,200 --> 00:16:26,760 Speaker 1: or lower as the current toll road, so it should 297 00:16:26,760 --> 00:16:28,920 Speaker 1: be very very low cost and everyone will be able 298 00:16:28,920 --> 00:16:32,560 Speaker 1: to use it. Can you help me picture in my 299 00:16:32,680 --> 00:16:36,400 Speaker 1: head what this looks like. So it's an enclosed space 300 00:16:36,720 --> 00:16:40,080 Speaker 1: and you go in your own car, or you go 301 00:16:40,160 --> 00:16:43,080 Speaker 1: in a car that is sort of resting on some 302 00:16:43,160 --> 00:16:48,120 Speaker 1: kind of magnetic track, and it goes to a certain 303 00:16:48,160 --> 00:16:50,720 Speaker 1: place and goes two hundred miles per hour? Am I butchering? 304 00:16:50,760 --> 00:16:54,600 Speaker 1: This is that? Basically? No, it's it's also so okay, 305 00:16:54,760 --> 00:16:57,800 Speaker 1: if you've seen um, maybe some of the images of 306 00:16:58,120 --> 00:17:01,880 Speaker 1: classic hyper LUPSI above grade or in tunnels. We can 307 00:17:01,880 --> 00:17:04,560 Speaker 1: do both of those. But a EVA was also designed 308 00:17:04,560 --> 00:17:07,000 Speaker 1: to work on an existing lane of freeway. So what 309 00:17:07,080 --> 00:17:08,840 Speaker 1: we can do is we can put our own technology 310 00:17:08,920 --> 00:17:11,760 Speaker 1: right down on the roadway. We do put an encapsulation 311 00:17:11,880 --> 00:17:14,359 Speaker 1: over it so it keeps the weather off, it keeps 312 00:17:14,400 --> 00:17:18,320 Speaker 1: tree branches, soda bottles. Basically allows us to short circuit 313 00:17:18,320 --> 00:17:21,520 Speaker 1: ourselves to level five autonomy. So inside the system, uh, 314 00:17:21,600 --> 00:17:24,640 Speaker 1: you can drive your own vehicle onto a sleigh. That way, 315 00:17:24,680 --> 00:17:26,639 Speaker 1: you can take your own stuff on the bother of 316 00:17:26,640 --> 00:17:28,359 Speaker 1: a fourteen month old so I can assure you we 317 00:17:28,359 --> 00:17:30,280 Speaker 1: have a lot of stuff in our car. I don't 318 00:17:30,280 --> 00:17:32,439 Speaker 1: always want to take a lift, so you can do that. 319 00:17:32,480 --> 00:17:34,159 Speaker 1: You can put your surfboard or your skis in it 320 00:17:34,640 --> 00:17:37,160 Speaker 1: um and you can zip you know, in our infrastructure 321 00:17:37,160 --> 00:17:38,800 Speaker 1: and then drive your own car in the last mile. 322 00:17:38,880 --> 00:17:41,639 Speaker 1: There's we have multiple products. We also have what we 323 00:17:41,680 --> 00:17:44,119 Speaker 1: call super Metro, sort of like a metro style product 324 00:17:44,119 --> 00:17:46,960 Speaker 1: that carries groups of people that can have beyond bicycles 325 00:17:47,040 --> 00:17:50,400 Speaker 1: or pedestrians. We also have a palette zipper UM and 326 00:17:50,480 --> 00:17:52,639 Speaker 1: so wherever we have our infrastructure, there's gonna be some 327 00:17:52,640 --> 00:17:54,760 Speaker 1: dedicated places where you you load and get on it 328 00:17:54,760 --> 00:17:57,320 Speaker 1: and then yeah, you you end up moving fully autonomously 329 00:17:57,680 --> 00:17:59,840 Speaker 1: and two winter miles an hour. Um, you know to 330 00:18:00,080 --> 00:18:02,600 Speaker 1: the portals closest to your final destination. Is it? Is 331 00:18:02,640 --> 00:18:05,040 Speaker 1: it magnetic? Is it is it wind? Are you just 332 00:18:05,080 --> 00:18:07,640 Speaker 1: being sucked as quickly as possible to the other side? 333 00:18:07,720 --> 00:18:11,200 Speaker 1: I mean, what what is this? No? No, no, there's uh, 334 00:18:11,240 --> 00:18:15,480 Speaker 1: there's no giant sucking sound. Um, it is magnetic levitation 335 00:18:15,520 --> 00:18:18,640 Speaker 1: and propulsion. So linear electric motors are used in roller 336 00:18:18,680 --> 00:18:21,639 Speaker 1: coasters today they're using aircraft launch systems. So we're just 337 00:18:21,680 --> 00:18:25,720 Speaker 1: optimizing it for our application on the roadway. UM, we 338 00:18:25,760 --> 00:18:29,119 Speaker 1: do levitated high speeds that both enables the high speed itself. 339 00:18:29,160 --> 00:18:31,639 Speaker 1: What also means it's a super smooth ride because we 340 00:18:31,640 --> 00:18:33,919 Speaker 1: can actively control that, so it would literally be as 341 00:18:33,920 --> 00:18:37,000 Speaker 1: smooth as sitting in the chair. Um. So you know, 342 00:18:37,040 --> 00:18:39,280 Speaker 1: we're just taking some of these twenty century technologies and 343 00:18:39,280 --> 00:18:43,239 Speaker 1: really focusing. You know, as populations urbanized, more people are 344 00:18:43,280 --> 00:18:46,320 Speaker 1: moving to cities. Traffic is a major problem. So what 345 00:18:46,359 --> 00:18:47,960 Speaker 1: we want to do is do more with less. So 346 00:18:48,080 --> 00:18:51,120 Speaker 1: our focus is on getting more vehicles on a given 347 00:18:51,200 --> 00:18:53,760 Speaker 1: lane of infrastructure. That's the key. Just to put a 348 00:18:53,800 --> 00:18:57,639 Speaker 1: quick number to that, given freeway, depending on which standard 349 00:18:57,680 --> 00:19:00,480 Speaker 1: you use, can move about two thousand to thirty hundred 350 00:19:00,520 --> 00:19:03,720 Speaker 1: vehicles per lane per hour. The Rebo system to move 351 00:19:03,760 --> 00:19:06,639 Speaker 1: twenty thousand vehicles per lane per hours. This idea that 352 00:19:06,680 --> 00:19:11,600 Speaker 1: you can enable regional mobility with less infrastructure. I hate 353 00:19:11,600 --> 00:19:13,680 Speaker 1: to keep harping on the on the money, but I'm 354 00:19:13,720 --> 00:19:15,879 Speaker 1: but I'm wondering how much money have you have you 355 00:19:15,960 --> 00:19:18,560 Speaker 1: raised so far to do this or how much money 356 00:19:18,600 --> 00:19:22,800 Speaker 1: has the Colorado Department of Transportation put into this partnership. 357 00:19:23,680 --> 00:19:26,760 Speaker 1: So yeah, So the the study that we've announced, we 358 00:19:26,840 --> 00:19:30,000 Speaker 1: formed a public private partnership. Uh see dot put in 359 00:19:30,040 --> 00:19:32,960 Speaker 1: about Colorade Department Transportation put in about two hundred thousand 360 00:19:33,000 --> 00:19:35,760 Speaker 1: dollars for the first phase of this study. Uh And 361 00:19:35,760 --> 00:19:38,159 Speaker 1: and if we're successful, then then we like to to 362 00:19:38,160 --> 00:19:40,840 Speaker 1: to go a little further with that. M Our Companies 363 00:19:40,880 --> 00:19:43,480 Speaker 1: privately funded. We're gonna be dealing our series A uh 364 00:19:43,520 --> 00:19:45,040 Speaker 1: coming up, and I'd be happy to come back on 365 00:19:45,080 --> 00:19:47,639 Speaker 1: the show and announce that. But we do have a 366 00:19:47,640 --> 00:19:51,160 Speaker 1: team of of over forty people, mostly engineers, really world 367 00:19:51,200 --> 00:19:54,320 Speaker 1: class talent from from all the most you know, technically 368 00:19:54,359 --> 00:19:58,359 Speaker 1: impressive companies and universities around the world. Amazing team. Where 369 00:19:58,440 --> 00:20:01,119 Speaker 1: is this being tested? Is there a place where someone 370 00:20:01,160 --> 00:20:05,000 Speaker 1: could go and actually see something that was built? Because 371 00:20:05,000 --> 00:20:07,639 Speaker 1: I know that the hyper loop that Elon Musk has 372 00:20:07,640 --> 00:20:10,800 Speaker 1: put together, I believe that there's a test center in Nevada. 373 00:20:11,560 --> 00:20:15,119 Speaker 1: What you want to built a test hyper loop in Hawthorne, California, 374 00:20:15,200 --> 00:20:17,760 Speaker 1: and there's a private company that built a test system 375 00:20:17,800 --> 00:20:20,200 Speaker 1: in Nevada. We are going to be doing that, so 376 00:20:20,359 --> 00:20:23,080 Speaker 1: you know in Los Angeles where our engineering headquarters is, 377 00:20:23,080 --> 00:20:25,879 Speaker 1: we're doing competent level work. Mind you were only you know, 378 00:20:25,960 --> 00:20:29,000 Speaker 1: nine months old as a company, and we did announced 379 00:20:29,040 --> 00:20:31,679 Speaker 1: also a test site in Denver, So we will be 380 00:20:31,720 --> 00:20:34,280 Speaker 1: doing system level testing and we're gonna have shovels in 381 00:20:34,320 --> 00:20:36,520 Speaker 1: the ground for our own test site in Q one 382 00:20:36,520 --> 00:20:39,800 Speaker 1: of next year. You have been you're only around for 383 00:20:39,880 --> 00:20:42,000 Speaker 1: nine months and you've got a fourteen month old. You 384 00:20:42,080 --> 00:20:46,640 Speaker 1: must have had a crazy year. It's crazy good but yes, 385 00:20:46,720 --> 00:20:51,200 Speaker 1: crazy um real quick? In your company? Are the actual 386 00:20:51,320 --> 00:20:54,679 Speaker 1: builders part of the company or are you going to 387 00:20:55,359 --> 00:20:59,960 Speaker 1: contract out that work? And is there enough uh, those 388 00:21:00,080 --> 00:21:05,560 Speaker 1: types of workers to actually construct something like this? Oh? Um? 389 00:21:05,560 --> 00:21:08,560 Speaker 1: So you know our company is really a technology company. 390 00:21:08,600 --> 00:21:12,159 Speaker 1: As we move into projects, we're all about the partner ecosystem. 391 00:21:12,160 --> 00:21:14,480 Speaker 1: We've partnered with a Coom, the world's number one design 392 00:21:14,520 --> 00:21:17,680 Speaker 1: construction firm, on this never project. We have other partners 393 00:21:17,680 --> 00:21:20,879 Speaker 1: in different places around the world. Um, so we'll be 394 00:21:20,920 --> 00:21:23,639 Speaker 1: building out a workforce in Denver that's going to be 395 00:21:23,680 --> 00:21:25,880 Speaker 1: a Revo employees, but it will also be a workforce 396 00:21:25,880 --> 00:21:27,919 Speaker 1: in Denver that will be supporting the project. So the 397 00:21:27,960 --> 00:21:31,680 Speaker 1: project will be separate from our balance sheet. All right, Well, 398 00:21:31,880 --> 00:21:35,120 Speaker 1: we look forward to learning more about it and perhaps 399 00:21:35,160 --> 00:21:37,320 Speaker 1: even getting a ride on it when it is built. 400 00:21:37,359 --> 00:21:39,280 Speaker 1: Thank you very much for being with us. A. Brogan 401 00:21:39,400 --> 00:21:42,639 Speaker 1: Van Brogan is the founder and the chief executive of 402 00:21:42,680 --> 00:21:46,119 Speaker 1: the Los Angeles based a Revo hyper Loops. How about 403 00:21:46,160 --> 00:22:00,280 Speaker 1: that when we talked about Uber Technologies agree meant to 404 00:22:00,320 --> 00:22:06,119 Speaker 1: buy twenty four thousand Volvo cars, including some that are autonomous, 405 00:22:06,560 --> 00:22:10,080 Speaker 1: The focus was on the fact that drivers are becoming obsolete. 406 00:22:10,119 --> 00:22:13,360 Speaker 1: But Sherry O. Day, who is a Bloomberg Gadfly columnist 407 00:22:13,400 --> 00:22:18,639 Speaker 1: here covering tech, points out another very important aspect of 408 00:22:18,680 --> 00:22:21,600 Speaker 1: this deal, which is Uber is going to own cars 409 00:22:21,680 --> 00:22:25,879 Speaker 1: and this is a change for them Shara joins us. Now, Shia, 410 00:22:26,200 --> 00:22:28,520 Speaker 1: can you just talk a little bit about what your 411 00:22:28,520 --> 00:22:31,639 Speaker 1: biggest takeaway was from this announcement. Yeah, I was actually 412 00:22:31,760 --> 00:22:35,639 Speaker 1: very surprised with the Uber Volvo announcement yesterday for the 413 00:22:35,680 --> 00:22:38,600 Speaker 1: reason you said right that this is a company. Part 414 00:22:38,600 --> 00:22:41,199 Speaker 1: of the beauty of the business model at Uber is 415 00:22:41,320 --> 00:22:44,640 Speaker 1: it doesn't own anything. It doesn't employ people, or doesn't 416 00:22:44,640 --> 00:22:47,440 Speaker 1: employ drivers. At least, the beauty of the business model 417 00:22:47,560 --> 00:22:51,520 Speaker 1: was it connected people who wanted rides with drivers who 418 00:22:51,520 --> 00:22:53,520 Speaker 1: are willing to take them places, and it took a 419 00:22:53,560 --> 00:22:55,760 Speaker 1: cut of the fairs, and it didn't have to deal 420 00:22:55,800 --> 00:22:59,879 Speaker 1: with owning cars or other messy and expensive assets. But 421 00:23:00,280 --> 00:23:03,760 Speaker 1: as you said, Uber is now saying it's going to 422 00:23:03,880 --> 00:23:09,880 Speaker 1: buy cars from Volvo and retrofit them to so they're driverless, 423 00:23:09,960 --> 00:23:13,000 Speaker 1: and in doing so, it is owning assets for the 424 00:23:13,000 --> 00:23:17,040 Speaker 1: first time, expensive depreciating assets, and I wonder what that 425 00:23:17,080 --> 00:23:19,720 Speaker 1: does to its business model. Does it also mean that 426 00:23:19,840 --> 00:23:21,639 Speaker 1: Uber is going to have to learn how to service 427 00:23:21,640 --> 00:23:25,280 Speaker 1: the vehicles. Well, they weren't very specific about the servicing 428 00:23:25,400 --> 00:23:28,399 Speaker 1: aspect of it, but you're right, no matter whether cars 429 00:23:28,440 --> 00:23:32,120 Speaker 1: have drivers or not, they still need to be serviced 430 00:23:32,160 --> 00:23:34,800 Speaker 1: and maintained like any car, you need to change the oil, 431 00:23:35,359 --> 00:23:41,199 Speaker 1: you need to recharge it with electricity. With all this 432 00:23:41,280 --> 00:23:45,119 Speaker 1: autonomous driving that is being touted, how is it going 433 00:23:45,160 --> 00:23:50,160 Speaker 1: to be fueled? Uh? Nobody has really addressed publicly all 434 00:23:50,200 --> 00:23:54,120 Speaker 1: of these questions about driverless cars. We have seen companies 435 00:23:54,160 --> 00:23:58,440 Speaker 1: including Lift and and Waymo, which is the driverless car 436 00:23:58,520 --> 00:24:03,080 Speaker 1: business within Google's parent company. Those companies have adopted a 437 00:24:03,080 --> 00:24:06,520 Speaker 1: different model that they don't seem to be willing necessarily 438 00:24:06,560 --> 00:24:11,879 Speaker 1: to own cars, but are rather contracting with fleet ownership 439 00:24:11,880 --> 00:24:14,920 Speaker 1: companies including the car rental companies were familiar with to 440 00:24:15,119 --> 00:24:18,760 Speaker 1: kind of own and service cars in a future driverless 441 00:24:18,760 --> 00:24:22,720 Speaker 1: car world. And Uber is obviously taking a different approach, 442 00:24:22,760 --> 00:24:24,800 Speaker 1: although it's still early, and I suspect they're going to 443 00:24:24,880 --> 00:24:28,199 Speaker 1: do a mix of owning cars and kind of um 444 00:24:29,359 --> 00:24:32,679 Speaker 1: leaning on service company to own and service cars, you know, 445 00:24:32,920 --> 00:24:35,520 Speaker 1: talking about Lift in Waibo. I mean another way that 446 00:24:35,560 --> 00:24:39,119 Speaker 1: you can look at this is that this change in 447 00:24:39,280 --> 00:24:44,640 Speaker 1: Uber's business model is brilliant because now a they're especially 448 00:24:44,640 --> 00:24:48,720 Speaker 1: given the sort of controversy over Uber in Europe, now 449 00:24:48,760 --> 00:24:51,879 Speaker 1: they're actually going to be a buyer of European goods, right, 450 00:24:51,920 --> 00:24:55,080 Speaker 1: So that gives them more political cloud. But then also 451 00:24:55,119 --> 00:24:57,879 Speaker 1: it distinguishes them from way more or lift and all 452 00:24:57,920 --> 00:25:00,240 Speaker 1: of a sudden they actually do have assets which could 453 00:25:00,240 --> 00:25:04,720 Speaker 1: be considered, you know, potentially a benefit. Now, I mean, 454 00:25:04,800 --> 00:25:07,879 Speaker 1: I think you're right on both points that um Uber 455 00:25:07,920 --> 00:25:11,080 Speaker 1: basically said yesterday that they want to have a little 456 00:25:11,119 --> 00:25:15,000 Speaker 1: bit more control over their future, over this kind of 457 00:25:15,080 --> 00:25:17,840 Speaker 1: driverless car future, and they believe that actually owning physical 458 00:25:18,040 --> 00:25:22,800 Speaker 1: the physical cars themselves gives them that control. So that 459 00:25:22,840 --> 00:25:25,159 Speaker 1: will be an interesting thing to see. The other point 460 00:25:25,359 --> 00:25:28,440 Speaker 1: about you know, the business model changes is yeah, yeah, 461 00:25:28,480 --> 00:25:33,520 Speaker 1: it could be that um in the future Uber's business 462 00:25:33,560 --> 00:25:37,040 Speaker 1: model looks you know, perky and bright when you kind 463 00:25:37,040 --> 00:25:39,119 Speaker 1: of take the drivers out of the equation, which is 464 00:25:39,119 --> 00:25:43,040 Speaker 1: one of obviously the biggest costs and complications and Uber's business. 465 00:25:43,200 --> 00:25:45,720 Speaker 1: But I think the key to meet for me is 466 00:25:45,760 --> 00:25:49,520 Speaker 1: that we don't really know what a future Uber is 467 00:25:49,560 --> 00:25:52,520 Speaker 1: going to look like. If we assume the driverless cars 468 00:25:52,520 --> 00:25:55,160 Speaker 1: are going to be ubiquitous, how is the company going 469 00:25:55,200 --> 00:25:58,440 Speaker 1: to make money? What do these sort of financial dynamics 470 00:25:58,520 --> 00:26:02,240 Speaker 1: look like? And is valued at something like seventy billion 471 00:26:02,280 --> 00:26:05,680 Speaker 1: dollars and you know that assumes that the company has 472 00:26:05,720 --> 00:26:08,320 Speaker 1: a lot of its kind of business model questions figured out, 473 00:26:08,520 --> 00:26:10,840 Speaker 1: and part of my point is it doesn't have those 474 00:26:10,920 --> 00:26:14,560 Speaker 1: questions figured out. Sure, in all of your conversations with 475 00:26:14,680 --> 00:26:17,800 Speaker 1: experts in the technology world, is there anybody that points 476 00:26:18,200 --> 00:26:22,240 Speaker 1: to Uber as being the potential straw that breaks the 477 00:26:22,280 --> 00:26:25,920 Speaker 1: markets back that if something were to happen with this valuation, 478 00:26:26,160 --> 00:26:30,080 Speaker 1: or there were to be some question about its ongoing viability, 479 00:26:30,200 --> 00:26:34,560 Speaker 1: would that cause a route in technology? It's an interesting question. 480 00:26:34,720 --> 00:26:37,560 Speaker 1: I don't know that I've heard anybody. I mean, certainly 481 00:26:37,560 --> 00:26:41,040 Speaker 1: there are questions about what Uber is really worth um 482 00:26:41,160 --> 00:26:46,040 Speaker 1: right now, especially because you know, soft Bank, the Japanese conglomerate, 483 00:26:46,119 --> 00:26:49,200 Speaker 1: is negotiating to buy stock from Uber shareholders at a 484 00:26:49,240 --> 00:26:53,879 Speaker 1: significant discount to where the company is currently valued on paper. UM. 485 00:26:53,920 --> 00:26:55,639 Speaker 1: But I don't know that there would be kind of 486 00:26:55,680 --> 00:27:00,280 Speaker 1: contagion effect if Uber's valuation were to create if the 487 00:27:00,320 --> 00:27:04,399 Speaker 1: company had significant business problems um and certainly not in 488 00:27:04,640 --> 00:27:07,600 Speaker 1: public markets, I would think, although it might have a 489 00:27:07,640 --> 00:27:12,680 Speaker 1: cast of Paul on other private tech companies. Well done. 490 00:27:12,720 --> 00:27:14,480 Speaker 1: All right, Well we're gonna leave it there, thank you 491 00:27:14,560 --> 00:27:19,119 Speaker 1: very much. Shira Oviday are technology columnist and Bloomberg gadfly 492 00:27:19,240 --> 00:27:22,560 Speaker 1: when it comes to all things technological. And you can 493 00:27:22,560 --> 00:27:25,959 Speaker 1: follow Shira on Twitter at Shira ov Day And of 494 00:27:26,000 --> 00:27:28,760 Speaker 1: course we look forward to more of your reports on Blouberg. 495 00:27:31,480 --> 00:27:34,000 Speaker 1: Thanks for listening to the Bloomberg P and L podcast. 496 00:27:34,359 --> 00:27:38,240 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 497 00:27:38,359 --> 00:27:41,840 Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm 498 00:27:41,880 --> 00:27:45,880 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. 499 00:27:46,000 --> 00:27:48,600 Speaker 1: It's one before the podcast. You can always catch us 500 00:27:48,640 --> 00:27:50,200 Speaker 1: worldwide on Bloomberg Radio