WEBVTT - Disney’s New Streaming Star vs. Netflix 0:00:00.240 --> 0:00:03.240 This is Bloomberg Business Week. I'm Carol Masser. Every day 0:00:03.279 --> 0:00:05.200 we're bringing you the latest news from the world's of 0:00:05.200 --> 0:00:08.920 business and finance, plus technology, politics. So much going on 0:00:08.960 --> 0:00:12.160 in the world of politics, economics, and it's all harnessing 0:00:12.160 --> 0:00:14.840 the power of Business Week reporters and editors. If you 0:00:14.840 --> 0:00:18.280 can download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg 0:00:18.320 --> 0:00:20.480 dot com. If you can also listen to our radio 0:00:20.520 --> 0:00:23.439 show at two pm Eastern on Bloomberg Radio and be 0:00:23.440 --> 0:00:26.280 sure to watch us too on YouTube by searching Bloomberg 0:00:26.360 --> 0:00:29.560 Global News, Top Business, and definitely top stock story today 0:00:29.680 --> 0:00:32.240 is the Walt Disney Company, because man, it is a 0:00:32.479 --> 0:00:38.680 fifteen percent in today sessions. It's amazing given that the 0:00:38.800 --> 0:00:41.879 business model has been completely upended by the pandemic. To right, 0:00:42.080 --> 0:00:45.760 Its parks are closed, movie theaters are closed, right exactly, 0:00:45.760 --> 0:00:47.239 so many parts of their business and they're like, you 0:00:47.240 --> 0:00:48.880 know what, We're going to wrap it up when it 0:00:48.920 --> 0:00:51.680 comes to streaming, and investors like it. So let's get 0:00:51.680 --> 0:00:53.880 into it. Um. We do get a bunch of headlines 0:00:53.960 --> 0:00:57.240 late yesterday and that's why we're seeing such strong stock reaction. 0:00:57.560 --> 0:01:00.400 Let's do a deep dive into the company. Chris mary 0:01:00.600 --> 0:01:03.000 is l a bureau chief for Bloomberg News. He's on 0:01:03.040 --> 0:01:06.840 the phone in Los Angeles. Also Bloomberg opinion columnist Tarala Chapelle. 0:01:06.880 --> 0:01:11.280 She covers the business of entertainment, telecommunications, and the deal's world. 0:01:11.319 --> 0:01:13.399 She's on the phone in New Jersey. Chris, I want 0:01:13.400 --> 0:01:16.360 to kick it off with you. WHOA why is I 0:01:16.400 --> 0:01:19.720 mean the stock is that it's all about streaming. Yeah, 0:01:19.760 --> 0:01:21.920 I mean you know it's like to your point, Uh, 0:01:21.959 --> 0:01:23.520 if you know you said at the beginning of the 0:01:23.560 --> 0:01:25.320 year there was going to be a global pandemic that 0:01:25.360 --> 0:01:28.320 would shut you know, theme parks and cruise lines at 0:01:28.319 --> 0:01:31.760 movie theaters and live sports, and you know, should you 0:01:32.040 --> 0:01:34.440 sell Disney? Of course you would say yes. And yet 0:01:34.560 --> 0:01:36.760 here it is continuing to hit new highs for a 0:01:36.800 --> 0:01:41.040 couple of weeks. Now, um, it's yeah, it's all about streaming. 0:01:41.160 --> 0:01:45.080 You know that they happen to launch this product Disney Plus, uh, 0:01:45.080 --> 0:01:48.440 a year ago in November, right before the pandemic, and 0:01:48.840 --> 0:01:52.240 everybody's now focused on home entertainment and what can I 0:01:52.240 --> 0:01:55.200 do with a family at home? And uh, schools out 0:01:55.360 --> 0:01:59.720 and so subscription surge all around the world. Uh. And 0:01:59.800 --> 0:02:02.720 why Wall Street loves This is because it's a recurring 0:02:02.960 --> 0:02:08.120 subscription business. Everybody is paying their monthly Disney Plus bill 0:02:08.680 --> 0:02:12.040 and so they can project those subscribers out at infinitem. 0:02:12.160 --> 0:02:14.320 So it's a you know, it's it's a lot more 0:02:14.360 --> 0:02:17.000 reassuring than trying to get a movie sold this weekend. 0:02:17.000 --> 0:02:19.639 Great visibility, right, Yeah, yeah, it really is. And I 0:02:19.680 --> 0:02:21.320 want to bring Tarry in here because she got She 0:02:21.360 --> 0:02:24.200 has a new column out today called Disney's new streaming 0:02:24.200 --> 0:02:27.280 Star is a Netflix? Is Netflix? You guys talked earlier 0:02:27.280 --> 0:02:29.320 on We talked earlier on Quick Take, and it's all 0:02:29.360 --> 0:02:33.320 about Star and what Star is doing and how Disney 0:02:33.360 --> 0:02:36.960 is positioning Star internationally. Tara, take us through this because 0:02:37.080 --> 0:02:40.560 it didn't get a lot of attention when Disney first 0:02:40.600 --> 0:02:43.280 acquired Star, but now it's kind of becomes center stage, right, 0:02:43.480 --> 0:02:46.280 especially when Bob Tapek is sitting up in front of 0:02:46.280 --> 0:02:48.320 a big screen and you see the Disney Plus and 0:02:48.320 --> 0:02:52.120 then you see Star behind at the logos. Tara, Right, 0:02:52.160 --> 0:02:54.640 that's what was so telling. You know, Hulu was moved 0:02:54.680 --> 0:02:57.120 to the side and right behind shapec or whoever was 0:02:57.160 --> 0:03:01.480 speaking last night, you saw Disney Plus and Star and 0:03:01.520 --> 0:03:03.880 that was definitely new and What I love about it is, 0:03:04.160 --> 0:03:07.360 you know, covering mergers and acquisitions, when you see deals 0:03:07.400 --> 0:03:09.760 the size of the when Disney did for Fox eight 0:03:09.919 --> 0:03:13.240 five billion dollars, what often happens is there are businesses 0:03:13.720 --> 0:03:16.480 that are bought part of those deals that the acquirer 0:03:16.560 --> 0:03:20.000 doesn't really want, some smaller units or brands that they 0:03:20.040 --> 0:03:22.280 get because they kind of have to because they're buying 0:03:22.320 --> 0:03:24.880 the company. But with Star, I think it was a 0:03:24.880 --> 0:03:27.960 little overlooked at the time when the deal closed, people said, well, 0:03:27.960 --> 0:03:30.440 it's an Indian TV brand. Yeah, there's growth there, but 0:03:30.480 --> 0:03:33.680 it's going to stay kind of a smaller piece of Disney. 0:03:33.720 --> 0:03:36.840 And instead, Disney is putting it front and center and 0:03:37.000 --> 0:03:40.680 building this brand into an international streaming powerhouse. It's going 0:03:40.680 --> 0:03:44.560 to be there global version of Netflix, the brand with 0:03:44.600 --> 0:03:47.720 all the sort of adult programming beyond the stuff that's 0:03:47.760 --> 0:03:49.760 on Disney Plus. And it just makes a whole lot 0:03:49.800 --> 0:03:52.440 of sense. It's kind of filling a hole that Disney 0:03:52.440 --> 0:03:55.640 Plus had, and I think people are gonna like it. 0:03:55.640 --> 0:03:58.200 It's gonna make it a really compelling offering. Vias of 0:03:58.280 --> 0:04:00.320 the Netflix, Sarah, we won't see it are in the 0:04:00.400 --> 0:04:04.080 US though, right, We'll see Hulu instead. Right, So they're 0:04:04.080 --> 0:04:07.120 only doing it outside the US with Star in the US. 0:04:07.160 --> 0:04:09.320 It seems like, at least for now, they're sticking with 0:04:09.360 --> 0:04:12.160 this bundle for thirteen dollars a month where you can 0:04:12.160 --> 0:04:15.520 get Disney plus Hulu if you want some more, um 0:04:15.560 --> 0:04:19.040 you know, adult programming and ESPN Class if you're sports fan. 0:04:19.440 --> 0:04:21.760 I think the the US offering is a little bit messy. 0:04:21.839 --> 0:04:23.840 They need to figure it out a little bit more. 0:04:23.960 --> 0:04:27.880 But the global offerings are really compelling. Well, and you know, Chris, 0:04:27.920 --> 0:04:30.800 come on back in on this conversation. Global, right, there's 0:04:30.920 --> 0:04:33.640 US growth and growing in the US market, but global 0:04:33.960 --> 0:04:37.040 and the opportunities there for Disney, Um, they've always thought 0:04:37.080 --> 0:04:40.160 about beyond the US. Well, if you look at the 0:04:40.200 --> 0:04:46.599 projections they made yesterday, three fifty million worldwide subscribers by 0:04:46.080 --> 0:04:49.720 four that's bigger than you know, Netflix right now is 0:04:49.760 --> 0:04:54.560 a million. But even our our consensus forecast on Bloomberg 0:04:54.640 --> 0:04:58.520 is for Netflix around three d and twelve million. So 0:04:58.520 --> 0:05:00.839 they're basically saying we're going to be big than Netflix. 0:05:01.480 --> 0:05:03.800 They have an advantage, which is they have these four 0:05:04.360 --> 0:05:07.520 uh streaming services, so you can you know, if you're 0:05:07.520 --> 0:05:10.200 a Netflix customer, you're only getting one they have different 0:05:10.200 --> 0:05:12.680 plans even with ads without but you're but you're not 0:05:12.760 --> 0:05:15.720 subscribing to both. With Disney, you can easily have three 0:05:15.760 --> 0:05:20.160 different services so than one customer three uh you know plans. 0:05:20.200 --> 0:05:23.239 So so they have that advantage. You know, they're tailoring 0:05:23.279 --> 0:05:26.640 these for different markets, as Tara said, you know, sports 0:05:26.720 --> 0:05:31.560 for Latin American customers and streaming uh in Europe, you know, 0:05:31.640 --> 0:05:34.400 the sort of f X content, and they have more 0:05:34.440 --> 0:05:37.040 adult Fox films are going to be bundled in with 0:05:37.080 --> 0:05:39.560 Disney plugs for a higher fee. So they're trying all 0:05:39.560 --> 0:05:43.000 these different strategies. So Terry, if if if your Netflix 0:05:43.120 --> 0:05:44.560 right now, what are you what are you thinking? Because 0:05:44.640 --> 0:05:48.760 you know, Netflix was the company that invented direct consumer streaming. 0:05:49.320 --> 0:05:54.320 Is it threatened by Disney's power now? Yeah? But Netflix 0:05:54.360 --> 0:05:57.800 will say that they welcome the competition. That kind of there. 0:05:58.080 --> 0:06:01.880 They always they always say that, but I think it's 0:06:01.920 --> 0:06:04.440 it's what it means is that, you know, Netflix isn't 0:06:04.480 --> 0:06:08.480 standing still like they are growing. They're constantly creating new content, 0:06:08.880 --> 0:06:10.920 so they're going to have more competition. But I think 0:06:10.960 --> 0:06:12.520 what it means is they kind of try to step 0:06:12.600 --> 0:06:14.280 that up a little bit, maybe the quality of the 0:06:14.320 --> 0:06:17.760 stuff they're putting on their service, maybe more kids stuff 0:06:17.760 --> 0:06:19.839 so that they can try to compete head on with 0:06:19.880 --> 0:06:22.080 Disney the way Disney is trying to do with Netflix. 0:06:22.480 --> 0:06:24.600 But you know, as a consumer, this is a good time. 0:06:24.640 --> 0:06:26.680 Everyone's always trying to figure out who's going to be 0:06:26.680 --> 0:06:28.880 the Netflix killer, who's going to be left standing at 0:06:28.880 --> 0:06:31.360 the end of the streaming wars. But for consumers, it's 0:06:31.360 --> 0:06:33.880 important to remember competition is a good thing. It keeps 0:06:33.880 --> 0:06:37.440 prices low, it keeps the value proposition up, so more 0:06:37.520 --> 0:06:40.680 companies that are fighting for our dollars the better. How 0:06:40.760 --> 0:06:43.640 much of this in terms of the emphasis on streaming was, 0:06:44.240 --> 0:06:48.520 you know, the brainchild of Bob Iger, longtime CEO UM 0:06:48.560 --> 0:06:51.880 now I think he's executive chairman. Uh. And also how 0:06:52.000 --> 0:06:55.560 much of it is Bob J Peck Well, uh, you know, 0:06:55.600 --> 0:06:58.560 there was this narrative earlier this year that you know, 0:06:58.640 --> 0:07:01.320 Bob Iger was still running the show. He's a powerful force, 0:07:01.400 --> 0:07:05.960 no doubt, Um certainly listens to him. But you know, 0:07:06.000 --> 0:07:10.080 there were certainly hallmarks in yesterday of of J Pick 0:07:10.640 --> 0:07:13.920 running the things. In fact, there was almost this disconnect 0:07:14.440 --> 0:07:17.080 where Bob Iger gets up to speak and he said, 0:07:17.120 --> 0:07:21.240 you know, we're going to emphasize, uh, quality over quantity, 0:07:21.480 --> 0:07:25.680 and they announced a hundred movies and TV shows. Uh, 0:07:26.080 --> 0:07:31.280 every retread you could possibly imagine Sister Act three, the 0:07:31.560 --> 0:07:35.560 Dog from Up gets his own series. I mean we 0:07:35.600 --> 0:07:42.360 need Chris the Board, Bob J. Peck, you know, sitting 0:07:42.440 --> 0:07:46.120 like at a you know, portable table in the lot 0:07:46.680 --> 0:07:49.200 parking lot of Disney, just saying yes to a long 0:07:49.240 --> 0:07:53.440 line of people pitching him ideas. Uh, it was. It 0:07:53.480 --> 0:07:56.760 was very much, uh, let's throw everything at the wall, 0:07:57.160 --> 0:08:00.920 and and really just pretty different from Disney Films strategy 0:08:01.040 --> 0:08:04.600 under Eiger when he took over. You know, they deliberately 0:08:04.640 --> 0:08:07.680 paired back all of those movies that were you know, 0:08:07.720 --> 0:08:11.640 the sports films, the you know adult ori need comedies, 0:08:12.400 --> 0:08:17.920 and they really focus deliberately on these big blockbuster Superhero 0:08:18.000 --> 0:08:21.000 and Star Wars and Pixar movies that they can get 0:08:21.000 --> 0:08:24.120 more bang for the buck out of. And so totally 0:08:24.120 --> 0:08:27.480 different strategy. Now, this stuff is expensive to do though, 0:08:27.520 --> 0:08:31.160 it's expensive to shoot, it's expensive to get the talent. 0:08:32.000 --> 0:08:34.480 Why do investors seem to be ignoring how much cash 0:08:34.600 --> 0:08:37.280 this is actually going to cost Disney. It gets back 0:08:37.320 --> 0:08:40.880 to our earlier point about it's all about the subscriber numbers. 0:08:41.080 --> 0:08:45.920 And so if you can get to three million subscribers 0:08:45.960 --> 0:08:50.760 paying you ten bucks a month, you know, it's it's 0:08:50.800 --> 0:08:55.960 just a huge surge and dependable revenue. So what Wall Street, 0:08:56.720 --> 0:08:58.840 It's not about the earnings right now, and the Disney's 0:08:59.200 --> 0:09:02.520 is losing money. Uh, you know, given the pandemic and everything, 0:09:02.880 --> 0:09:06.520 it is all about the future subscriber. I mean, this 0:09:06.600 --> 0:09:09.880 is Netflix's playbook. Netflix just burns cash, and they've been 0:09:09.920 --> 0:09:13.440 burning cash for years buying content. It's it's almost any 0:09:13.480 --> 0:09:17.440 tech company, right, h And is the Amazon story right 0:09:17.480 --> 0:09:20.920 with that? When exactly how how many you know, long 0:09:21.080 --> 0:09:24.319 term subscribers can you get? Because subscribers stick around and 0:09:24.559 --> 0:09:28.839 and and you know, it's it's predictable revenue. So so yeah, 0:09:28.920 --> 0:09:31.080 so the fact that they're spending more money losing more 0:09:31.080 --> 0:09:34.400 money Wall Street applause. So so, Chris, listen, you've been 0:09:34.400 --> 0:09:37.120 following this company for a long time. I mean, where 0:09:37.200 --> 0:09:39.800 does I don't know, things like Hulu fit into this. 0:09:39.920 --> 0:09:43.800 Where do those you know, big releases to the big screen. 0:09:44.120 --> 0:09:46.320 You know, certainly after Warner Brothers kind of shocked the 0:09:46.320 --> 0:09:49.400 industry by saying, you know, we're gonna go straight to 0:09:49.640 --> 0:09:51.880 you know, streaming or offer them in streaming and theater 0:09:51.920 --> 0:09:53.280 at the same time. Where does all of that fit 0:09:53.320 --> 0:09:56.920 into Disney's world, Because the big screen it's important to Disney. 0:09:57.000 --> 0:09:59.360 It is and and I think one of the takeaways 0:09:59.400 --> 0:10:03.199 from YESTERD is they they indicated that they were not 0:10:03.360 --> 0:10:06.200 going the Warner Brothers route, and in fact, some of 0:10:06.240 --> 0:10:09.640 the theater chain stocks are up quite a bit today 0:10:09.800 --> 0:10:12.880 as a result. Um, you know, so they're gonna save 0:10:13.120 --> 0:10:17.199 the new Indiana Jones with Harriton for the next Star 0:10:17.240 --> 0:10:20.320 Wars directed by Wonder Woman director Patty Jenkins. Those are 0:10:20.360 --> 0:10:24.520 going in theaters. Um, you know. They announced one movie, 0:10:24.960 --> 0:10:27.679 you know, a new animated film which was entirely new, 0:10:28.000 --> 0:10:31.679 uh contacts there and The Last Dragon is going to 0:10:31.800 --> 0:10:35.839 go up in theaters and on Disney Plus for a 0:10:36.320 --> 0:10:40.440 premium thirty dollar purchase on the same day. So they're 0:10:40.480 --> 0:10:43.280 testing that model. You know. They they're putting a Tom 0:10:43.360 --> 0:10:47.200 Hanks Pinocchio movie direct to Disney Plus. So you know, 0:10:47.200 --> 0:10:49.240 they're trying a lot of different things. But they're very 0:10:49.240 --> 0:10:52.280 clearly not saying everything is going to the streaming service 0:10:52.360 --> 0:10:55.520 day and day with the movie release theater release. So 0:10:55.960 --> 0:10:58.400 it's a it's a different approach, and it's more nuanced 0:10:58.400 --> 0:11:01.800 than it gives the theater some hope. Yeah, exactly, good stuff. 0:11:01.880 --> 0:11:04.920 Good stuff. Ten Star Wars series spinoffs and ten Marvel 0:11:05.040 --> 0:11:07.200 series that will debut you on Disney Plus. I know, 0:11:07.960 --> 0:11:10.719 family members, that's what we want. I have a baby brother, man, 0:11:10.760 --> 0:11:13.160 he's just gonna be like all into that. Look, as 0:11:13.240 --> 0:11:15.160 long as they continue to have the Mandalorian, I'm going 0:11:15.240 --> 0:11:18.000 to keep paying for Disney Plus. You're gonna be paying 0:11:18.000 --> 0:11:20.439 for it for a long time. With your son two 0:11:20.520 --> 0:11:23.480 years old, You'll be paying for it for a long time. 0:11:23.600 --> 0:11:25.839 Chris Paul Mary, thank you so much. L a bureau 0:11:25.920 --> 0:11:28.559 chief at Bloomberg News on the phone from l A. 0:11:28.640 --> 0:11:31.160 Check him out at Chris Paul Mary on Twitter. I mean, 0:11:31.200 --> 0:11:33.600 listen the Disney story. I'm just fascinated by the company 0:11:33.600 --> 0:11:38.240 and the strategy those acquisitions of Lucasfilm and Pixar and Marvel. 0:11:38.280 --> 0:11:41.720 I mean, we're brilliant then and even looking more brilliant now. Yep. 0:11:41.840 --> 0:11:44.120 And they just kind of, you know, the strategy, they 0:11:44.200 --> 0:11:47.280 just move it around the platforms. This is Bloomberg Business 0:11:47.360 --> 0:11:50.839 Week with Carol Messer from Bloomberg Radio. You're listening to 0:11:50.840 --> 0:11:53.480 Bloomberg business Week Carl Masser along with Tim Stenovik a 0:11:53.520 --> 0:11:56.520 Bloomberg Quicktake and Tim this story. I noticed it's been 0:11:56.520 --> 0:11:58.680 among the most read on the Bloomberg. It's about a 0:11:58.679 --> 0:12:01.480 group of guys trade ors who rode the crash in 0:12:01.559 --> 0:12:04.440 oil prices and as a result, they made hundreds of 0:12:04.480 --> 0:12:07.440 millions of dollars not too shabby. It's all about what 0:12:07.520 --> 0:12:11.320 happened in April. I remember that day where I was 0:12:11.400 --> 0:12:14.360 because this was just mind bending what happened, right because 0:12:14.400 --> 0:12:17.760 the oil prices, neil prices crashing going to negative, essentially 0:12:17.760 --> 0:12:21.640 requiring that people pay you to take oil off your hands. 0:12:21.880 --> 0:12:25.120 You paid people rather to take off your hands, right, Like, 0:12:25.200 --> 0:12:27.840 it just didn't make sense for anybody who's been following 0:12:27.880 --> 0:12:31.040 the financial markets. This story is reported for Bloomberg Business Week, 0:12:31.080 --> 0:12:33.400 and here to tell us about the guys and the 0:12:33.480 --> 0:12:35.520 ride is Bloomberg business Week. Get it to Joe Webber 0:12:35.640 --> 0:12:38.360 on the access line in Brooklyn. It's written by Liam Vaughan, 0:12:38.440 --> 0:12:41.800 senior reporter at Bloomberg News and Joe, let's kick it 0:12:41.840 --> 0:12:44.400 off with you. Uh. This is like one of those 0:12:44.400 --> 0:12:46.120 stories that I feel like again, you can make a 0:12:46.160 --> 0:12:49.600 movie out of it. Yeah, well, it's what we try 0:12:49.679 --> 0:12:52.520 to do and this was one that you know, Liam 0:12:52.559 --> 0:12:56.040 has been close to for a while. Um. And you 0:12:56.080 --> 0:12:59.680 know we reported in Business Week back over the summer 0:12:59.679 --> 0:13:03.600 actually when we found out the details of of the 0:13:03.640 --> 0:13:07.840 trade and that it was more than five million and 0:13:08.080 --> 0:13:09.920 now it turns out it's even more than that. It's 0:13:09.920 --> 0:13:13.360 it's six and sixty million dollar profit. And what we've 0:13:13.400 --> 0:13:15.760 also learned in that time is is what makes this 0:13:15.840 --> 0:13:19.360 story so special, um, And it becomes almost a character 0:13:19.600 --> 0:13:25.640 portrait of the group of of guys who were behind 0:13:25.640 --> 0:13:29.480 the trade, and um, we know very little about them, 0:13:29.559 --> 0:13:31.360 but what we do know is all in the story 0:13:31.640 --> 0:13:35.600 and it's this little group of guys in Essex, England. 0:13:36.120 --> 0:13:38.920 Paul Cummins, I mean, I feel like it's just like, 0:13:38.960 --> 0:13:40.560 as I said, you could just kind of you know, 0:13:40.600 --> 0:13:43.480 you just want to pull out his story, um, because 0:13:43.520 --> 0:13:48.360 it's his name. Which is part of the joy of 0:13:48.360 --> 0:13:52.040 the story is that the case of characters, it's so 0:13:52.240 --> 0:13:54.840 it's almost like a guy Ritchie film and they have 0:13:55.360 --> 0:13:57.839 it's a really tight knit crew. And and the character 0:13:57.960 --> 0:14:00.719 that you mentioned it goes by Cuddles or that's how 0:14:00.760 --> 0:14:05.160 he's affectionately known within the group. I feel well. And 0:14:05.160 --> 0:14:09.680 then there's another guy named Dog, right, ye Dog. And 0:14:09.760 --> 0:14:11.120 you know that was part of the charm of the 0:14:11.120 --> 0:14:13.560 story was that you know, we we uh, as we 0:14:13.640 --> 0:14:17.360 found out a little bit about their details, we tried 0:14:17.400 --> 0:14:19.920 to kind of bring them all uh to light. And 0:14:19.960 --> 0:14:22.640 the fact that, um, you know, the other element of 0:14:22.640 --> 0:14:25.320 the story that I just find totally fascinating is his 0:14:25.360 --> 0:14:27.480 Cuddles actually really does know oil. He's been in the 0:14:27.840 --> 0:14:31.640 trenches for for decades now, but some of these other people, 0:14:32.160 --> 0:14:37.120 um don't in their in their twenties. Uh. And basically 0:14:37.120 --> 0:14:41.600 it's this ring of of of characters, characters who sort 0:14:41.640 --> 0:14:44.960 of know each other and that's all they all they know, 0:14:45.360 --> 0:14:49.000 and they they've kind of grown up with each other 0:14:49.120 --> 0:14:53.120 and have learned the oil trade. And that's kind of 0:14:53.160 --> 0:14:57.000 I mean, they're almost like novices in that they're they 0:14:57.080 --> 0:15:00.400 probably don't have that much experience, and yet they at 0:15:00.720 --> 0:15:03.480 a heck of a day on April. Well, and this 0:15:03.560 --> 0:15:05.440 is one of those stories like as Tim was talking 0:15:05.480 --> 0:15:08.280 about joll like when it happened, we're all thinking, Okay, 0:15:08.320 --> 0:15:10.200 first of all, this makes no sense negative you know, 0:15:10.200 --> 0:15:12.080 we're all getting used to negative rates. But this whole 0:15:12.080 --> 0:15:14.600 idea of negative oil prices and what it what it 0:15:14.640 --> 0:15:16.440 meant and the thing is it happened and then it 0:15:16.600 --> 0:15:19.440 it went away. Um. But as as people wanted to 0:15:19.520 --> 0:15:23.480 kind of understand the trade that day and how it happened, 0:15:23.640 --> 0:15:27.560 that's where investigators on in the US and I guess 0:15:27.560 --> 0:15:31.160 elsewhere really started looking into to try and understand how 0:15:31.160 --> 0:15:33.360 did this happen, and that's what really led them to 0:15:33.440 --> 0:15:36.680 this gang of nine. Yeah, we we don't really have 0:15:36.840 --> 0:15:40.840 visibility into into where any sort of investigation or where 0:15:40.880 --> 0:15:43.560 that stuff could go. But what we do know is 0:15:43.600 --> 0:15:46.960 that the trade is um. You know, some of these 0:15:46.960 --> 0:15:49.560 details were ones that we are able to report on 0:15:49.600 --> 0:15:52.800 earlier but then even learn a little bit more of. 0:15:53.480 --> 0:15:57.200 For this story, UM, it comes down to Tad's T A. S. 0:15:57.800 --> 0:16:00.440 And the it's also known as quote unquote banging the 0:16:00.480 --> 0:16:07.480 clothes and settlement exactly. And there is um a little 0:16:07.520 --> 0:16:11.400 bit of um understanding within the community that this is not, 0:16:12.080 --> 0:16:16.560 you know, anything nefarious or illegal. It's been practiced for years, 0:16:16.680 --> 0:16:20.840 especially back in the commodities glory days, and that's kind 0:16:20.880 --> 0:16:25.960 of where UM cuddles as he goes. But UH perfected 0:16:26.000 --> 0:16:30.560 this and so we think that they basically were able 0:16:30.600 --> 0:16:35.360 to do that during the close really take advantages of 0:16:35.400 --> 0:16:39.840 the price going negative. There is some some speculation or 0:16:39.880 --> 0:16:42.280 interest in it whether or not they actually pushed it 0:16:42.880 --> 0:16:46.480 negative just through their own trading activity, but that's not 0:16:46.520 --> 0:16:49.400 for us to say. But yeah, you know, when you 0:16:49.440 --> 0:16:51.240 look back on the course of this year, we've seen 0:16:51.400 --> 0:16:55.640 so many incredible things, so many weird circumstances that you know, 0:16:55.760 --> 0:16:59.480 even even that that day and negative oil remains one 0:16:59.520 --> 0:17:03.000 of the weird are just things, and and yet you know, uh, 0:17:03.040 --> 0:17:06.679 this this crew is responsible for for perhaps maybe the 0:17:06.680 --> 0:17:08.720 trade of the year. I think, yeah, And I guess 0:17:08.720 --> 0:17:10.920 my question would be, you know, even though it was 0:17:10.960 --> 0:17:14.000 such an anomaly to see oil do this and crash 0:17:14.119 --> 0:17:16.600 like this in a day, is this trade still possible 0:17:16.680 --> 0:17:19.080 in the future, or by shining a light on it 0:17:19.119 --> 0:17:21.399 like this as a sort of decrease the opportunity that 0:17:21.440 --> 0:17:24.800 people can can do this, you know, it's it's hard 0:17:24.840 --> 0:17:28.359 to know. Um. I think in many ways this was 0:17:28.640 --> 0:17:33.760 a perfect alignment where we had a coronavirus and supply 0:17:33.920 --> 0:17:37.680 and demand things, so we had oil already come down 0:17:37.880 --> 0:17:41.120 and then you know, all of this coincided basically with 0:17:41.160 --> 0:17:44.800 this one day that happens every month with oil where 0:17:45.280 --> 0:17:49.440 the contracts roll over. So you know, we we even 0:17:49.480 --> 0:17:52.000 thought maybe the following month there could be a repeat 0:17:52.080 --> 0:17:55.160 because we were still on lockdown right then and demand 0:17:55.240 --> 0:17:59.239 had evaporated. So who knows. I do think, you know, 0:17:59.560 --> 0:18:03.520 one thing we know about about finances that weird things happened. 0:18:03.560 --> 0:18:07.120 There are glitches. Um, no one thought the prices could 0:18:07.160 --> 0:18:09.119 ever go negative until they were starting to be warnings 0:18:09.200 --> 0:18:13.280 like days before that it was it was possible. So 0:18:13.520 --> 0:18:15.879 I think it took a special alignment. And when you 0:18:16.000 --> 0:18:19.240 kind of actually, um, you know, read the story closely, 0:18:19.359 --> 0:18:22.240 it it seems like they knew what they were doing, 0:18:22.359 --> 0:18:25.560 and everything happened to align just right well and to 0:18:25.680 --> 0:18:28.960 be fair and to be fully transparent. No authorities have 0:18:28.960 --> 0:18:31.800 accused Vega Capital or any of the traders referenced in 0:18:31.840 --> 0:18:34.280 this story on doing anything illegal. And I love the 0:18:34.320 --> 0:18:36.280 law firm. I guess that represents eight of the nine 0:18:36.320 --> 0:18:39.920 traders in this group toll each the quote is, each 0:18:39.920 --> 0:18:41.920 of our clients regularly puts his own money at risk 0:18:42.160 --> 0:18:44.440 to try to make a profit. Sometimes it works, sometimes 0:18:44.440 --> 0:18:46.879 it doesn't. And and and Liam even includes in his 0:18:46.960 --> 0:18:49.320 story that you know, if they've made maybe seven million 0:18:49.359 --> 0:18:51.879 dollars that day, nobody would have maybe really you know, 0:18:52.040 --> 0:18:54.760 like yeah, okay, whatever, But it was just they made 0:18:54.800 --> 0:18:58.119 almost seven hundred millions, and so authorities, yeah they had 0:18:58.160 --> 0:19:02.240 to take a law and maybe they don't. Yeah, yeah, exactly. Yeah, 0:19:02.280 --> 0:19:04.119 I think you know that. That last note of the 0:19:04.200 --> 0:19:07.119 story is another trader who says, look, if it was 0:19:07.760 --> 0:19:11.159 BP or Goldman Sacks, nobody would be saying anything but 0:19:11.200 --> 0:19:14.400 the fact that these are, you know, working class lads 0:19:15.119 --> 0:19:17.600 in the neighborhood like Essex, which is is basically the 0:19:17.640 --> 0:19:26.480 equivalent of New Jersey for thank hey, so there you go. 0:19:26.600 --> 0:19:28.879 But yeah, it was just a correct trade. Maybe it 0:19:28.920 --> 0:19:31.920 was just a great trade. So that that's what got 0:19:31.960 --> 0:19:34.520 people talking about it, the fact that these aren't it's 0:19:34.560 --> 0:19:37.240 not a firm that everybody knows. It's just some guys 0:19:37.680 --> 0:19:40.080 who had a great day kind of like jefter then 0:19:40.200 --> 0:19:43.200 Joel Webber, have a good weekend. You told it, well, 0:19:43.480 --> 0:19:45.960 everybody should check it out. Joe Webber, editor of Bloomberg 0:19:46.000 --> 0:19:50.120 Business Week, on the remote Access from Brooklyn, given some shade. Yeah, 0:19:50.119 --> 0:19:52.159 you're not going to forget about that comment come monday. 0:19:52.160 --> 0:19:54.879 Are you liked him really up to that point? All right? 0:19:54.920 --> 0:19:56.399 For those of you listening to New York DC in 0:19:56.440 --> 0:19:58.959 San Francisco watching a YouTube Bloomberg Business Week. We're going 0:19:59.000 --> 0:20:01.240 to continue if listening on Bloomberg one or six one 0:20:01.280 --> 0:20:03.320 in Boston based day Business is coming up next. Check 0:20:03.359 --> 0:20:07.560 out the magazine Incredible Stories. You can find it on newsstands, 0:20:07.760 --> 0:20:11.080 on the Bloomberg and online at Bloomberg dot com. You're 0:20:11.160 --> 0:20:15.679 listening to Bloomberg Business Week with Carol Messer on Bloomberg Radio. 0:20:15.760 --> 0:20:18.600 All right, so yeah, tough story once again of our day, 0:20:18.680 --> 0:20:20.879 of our week, of our year, no doubt about it. 0:20:20.960 --> 0:20:23.480 Is everything and anything to do with the coronavirus and vaccine. 0:20:23.560 --> 0:20:27.520 Charlie Pellett just talking about the story that we've seen 0:20:27.600 --> 0:20:29.959 came out of the Washington Post that the White House 0:20:30.000 --> 0:20:32.240 Chief of Staff Mark Meadows telling Stephen han In, the 0:20:32.240 --> 0:20:34.840 Commissioner of the FDA, to submit his recognition but Hans 0:20:34.840 --> 0:20:37.360 saying no, that's not likely, right or not happy? That's 0:20:37.400 --> 0:20:39.800 what That's what han is responding. And and look, I 0:20:39.800 --> 0:20:41.919 think it raised if this story indeed turns out to 0:20:41.920 --> 0:20:44.920 be true. I mean it's a Washington Post story. Um, 0:20:44.960 --> 0:20:48.640 it doesn't help confidence in the vaccine at a time 0:20:48.680 --> 0:20:51.359 when Americans are concerned that it's been rushed through exactly. 0:20:51.400 --> 0:20:53.640 And let's get into that with our next guest, Dr 0:20:53.680 --> 0:20:56.400 Ian lous Bader with us as he is always every Friday, 0:20:56.520 --> 0:20:58.800 his clinical associate Professor of Medicine at n y U 0:20:58.920 --> 0:21:01.000 Landgown Medical Center, on the phone in New York, on 0:21:01.000 --> 0:21:04.520 a day when global cases exceed sixty nine point seven 0:21:04.560 --> 0:21:08.520 million deaths, surpassing one point fifty nine million UM. Dr Lesbad, 0:21:08.560 --> 0:21:11.719 are nice to have you back with Tim and myself. Um, 0:21:11.760 --> 0:21:16.520 how are you okay? Doing doing well? Thank you, Carol 0:21:16.600 --> 0:21:21.240 and Tim. Happy Friday. Yeah, you sound a little tired. Well, 0:21:21.240 --> 0:21:23.160 it's been a long week. It's been a busy week. 0:21:23.359 --> 0:21:26.320 And uh, but I think we have good news coming. 0:21:26.359 --> 0:21:28.679 I think where we within the next few days, I 0:21:28.720 --> 0:21:32.480 think we are going to get FDA approval. The Vaccine 0:21:32.520 --> 0:21:37.320 Advisory Committee uh seventeen to four voted uh, you know, 0:21:37.400 --> 0:21:43.040