WEBVTT - Snap Warning Drags Tech Stocks Down 0:00:01.760 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.440 --> 0:00:07.240 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.280 --> 0:00:09.800 you the latest news from the world to business and finance, 0:00:09.800 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.200 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.360 pm Eastern Time on Bloomberg Radio or watch us on YouTube. 0:00:28.360 --> 0:00:33.120 Search Bloomberg Global News Snap, which is still down about 0:00:33.800 --> 0:00:37.480 so staying near its lows, plummeting like a rock last 0:00:37.600 --> 0:00:40.360 night after it came out with its latest update. It 0:00:40.440 --> 0:00:42.680 is down below its ip O price, cutting its revenue 0:00:42.680 --> 0:00:45.559 and profit forecast. And then, of course you know that 0:00:45.760 --> 0:00:48.920 news tim Affecting the social media space. Yeah, we're seeing 0:00:48.960 --> 0:00:52.600 shares of Google parent alphabet lower. We're seeing Facebook, also 0:00:52.600 --> 0:00:55.160 known as meta platforms, take a hit today as well. 0:00:55.200 --> 0:00:58.400 Man deep Seeing, a senior tech industry analysts for Bloomberg Intelligence, 0:00:58.440 --> 0:01:02.160 Man Deepest with us in the Bloomberg Interactive Broker studio Mandy, 0:01:02.320 --> 0:01:05.240 how we're investors caught so off guard by this, and 0:01:05.280 --> 0:01:08.160 we should note that, uh, only in the last month 0:01:08.240 --> 0:01:11.360 or so after Snap reported earnings for its most recent quarter, 0:01:11.760 --> 0:01:15.039 it came out with a revision to its outlook. Yeah, 0:01:15.120 --> 0:01:18.319 and look, I think what has happened is because of 0:01:18.400 --> 0:01:23.160 the macro slow down expectations really kind of, I mean 0:01:23.600 --> 0:01:27.760 they're tied to inflation, right, So that is what is 0:01:27.880 --> 0:01:33.119 driving this, uh pullback and ad spending. And everyone had 0:01:33.200 --> 0:01:36.920 that perception that digital ad spending is more resilient that 0:01:36.959 --> 0:01:39.160 you know, and if we go into a recession, digital 0:01:39.280 --> 0:01:42.360 ad spending will hold. Well, that's definitely not the case. 0:01:42.400 --> 0:01:46.640 And what we're finding is advertising digital ad spending is 0:01:46.720 --> 0:01:50.000 as cyclical as it used to be, and so nothing 0:01:50.080 --> 0:01:52.800 has changed this time is not different when it comes 0:01:52.840 --> 0:01:56.400 to digital ad spending being tied to you know, macroeconomic growth. 0:01:56.880 --> 0:01:59.480 And clearly advertisers are pulling back more so on the 0:01:59.520 --> 0:02:02.960 retail side. So in terms of numbers, retail ad spending 0:02:03.040 --> 0:02:07.520 is about one third of the overall four billion dollar market, 0:02:07.600 --> 0:02:11.120 and it looks like this pull back is more tied 0:02:11.160 --> 0:02:14.120 to retailers pulling back on their ad spend. The e 0:02:14.200 --> 0:02:17.200 commerce guys where there was a pull forward during the pandemic, 0:02:17.480 --> 0:02:19.440 they're the ones who are pulling back more. I mean, 0:02:19.480 --> 0:02:21.799 you don't have to be, you know, living under a 0:02:21.919 --> 0:02:24.320 rock to to understand what's happening with retail right now. 0:02:24.360 --> 0:02:26.720 Carol in the most recent earnings, Well, I agree with that, 0:02:26.760 --> 0:02:28.640 but I guess what I'm saying, what I think about 0:02:28.680 --> 0:02:30.160 is I look at the chart and I go back 0:02:30.200 --> 0:02:37.079 to like pre pandemic early, end of early. We're kind 0:02:37.080 --> 0:02:40.359 of back to those levels. So to me, that shark, 0:02:40.520 --> 0:02:43.560 that bump, that mountain that it climbed, was that the 0:02:43.600 --> 0:02:47.080 aberration because of the pandemic, and folks were just getting 0:02:47.120 --> 0:02:50.240 back to normal times for for a name like Snap 0:02:50.280 --> 0:02:54.200 and others. Yes, So the multiple expansion that we saw 0:02:54.680 --> 0:02:58.200 during the pandemic, you know, all the e commerce companies 0:02:58.280 --> 0:03:02.160 really going to meta and app chat to find new customers. 0:03:02.880 --> 0:03:06.560 That was what drove the multiple expansion. Now we are 0:03:06.600 --> 0:03:10.079 at a point where advertisers feel like they have overspent 0:03:10.480 --> 0:03:13.680 and now that their sales are declining, they're pulling back 0:03:13.960 --> 0:03:17.720 very aggressively. So they're not like, think of are they 0:03:17.800 --> 0:03:20.280 pulling back to kind of pre pandemic levels. So that's 0:03:20.320 --> 0:03:23.720 more now. So this is like, if I'm an advertiser 0:03:23.919 --> 0:03:27.280 who's spending million dollars on sales and marketing, am I 0:03:27.320 --> 0:03:30.200 going to pull back on Google Search spend? Probably not. 0:03:30.400 --> 0:03:32.320 That's the last one I'm going to cut back on. 0:03:32.680 --> 0:03:36.520 But I can't pull pull back on Meta and Snapchat 0:03:36.640 --> 0:03:39.720 and Pinterest because these were the platforms that paid off 0:03:39.800 --> 0:03:42.680 during the pandemic. But I'm not so sure about the 0:03:42.800 --> 0:03:45.640 r o I. So it's really about what is discretionary 0:03:45.680 --> 0:03:48.840 here versus what is essential? And Google Search, to me, 0:03:49.280 --> 0:03:52.280 is still essential for every advertiser. Is it hard for 0:03:52.320 --> 0:03:56.160 you to imagine snap being worth less today than it's 0:03:56.160 --> 0:04:00.200 worth when it went public? All So again it goes 0:04:00.240 --> 0:04:03.800 back to the multiple expansion versus you know, multiples really 0:04:04.120 --> 0:04:06.840 coming down. And this feels like a little bit of 0:04:06.920 --> 0:04:11.600 overreaction given Snapchat still has three million daily active users, 0:04:11.640 --> 0:04:15.080 the engagement trends are still holding up. But the problem 0:04:15.160 --> 0:04:18.080 for snap is it has been around ten years and 0:04:18.080 --> 0:04:21.320 it's not going to grow fifty anymore. So it's more 0:04:21.360 --> 0:04:25.960 of growth and investors don't pay a premium for you know, 0:04:26.040 --> 0:04:29.520 low growth companies, and in the case of snap It, 0:04:29.520 --> 0:04:33.920 it's not like ebit dumb margins of it's barely but 0:04:34.040 --> 0:04:38.479 not positive. So the profitabilities in their growth is tapering off, 0:04:38.760 --> 0:04:43.280 and suddenly like Google, Search or Alphabet seems like a 0:04:43.279 --> 0:04:46.360 better asset to invest in at these valuation is compared 0:04:46.400 --> 0:04:47.880 to you know, some of the other names. Is It 0:04:47.880 --> 0:04:51.720 also a reminder that in terms of digital advertising that 0:04:51.839 --> 0:04:54.200 there's just so much in terms of the size of 0:04:54.200 --> 0:04:56.200 the pool. And you and like you said, are you 0:04:56.240 --> 0:04:58.080 going to give you know, cut back on Google, No, 0:04:58.400 --> 0:05:01.320 because right here you're gonna win probably with that strategy. 0:05:01.480 --> 0:05:03.000 So you're gonna pick and choose, and maybe some of 0:05:03.040 --> 0:05:05.039 these smaller players are no longer going to get a 0:05:05.120 --> 0:05:07.760 share of that pie, which is a limited pie, right yes, 0:05:07.800 --> 0:05:10.000 And now you have Amazon as well, So earlier it 0:05:10.120 --> 0:05:12.840 used to be a duopoly Alphabet and Meta. Now you've 0:05:12.920 --> 0:05:15.920 got Amazon, which is pretty sizeable thirty thirty five billion, 0:05:16.000 --> 0:05:19.440 growing at very healthy fort So if the overall ad 0:05:19.560 --> 0:05:22.279 spending is growing let's say ten percent, and it's not 0:05:22.320 --> 0:05:24.840 going to grow ten percent this year because last year 0:05:24.880 --> 0:05:27.560 it grew thirty percent and we had a pull forward, 0:05:27.600 --> 0:05:30.320 it's pretty obvious now. So if it's growing, you know, 0:05:30.440 --> 0:05:33.960 high single digit, a lot of those incremental dollars are 0:05:34.000 --> 0:05:38.080 going to Google and Facebook because they are proven platforms 0:05:38.080 --> 0:05:40.320 when it comes to our o I on out spending. 0:05:40.320 --> 0:05:43.560 The other ones are not as proven, and I think 0:05:43.560 --> 0:05:47.159 that's what is happening. Snaps woes hitting Pinterests really hard today. Man, 0:05:47.160 --> 0:05:49.800 Deep it's down twenty it's having its worst day ever 0:05:49.880 --> 0:05:52.279 as a publicly traded company, trading at levels last scene 0:05:52.320 --> 0:05:56.240 in April May thirty seconds. Give us your take on 0:05:56.279 --> 0:06:00.240 this hitting pinterest same thing? You know, Smaller digital ad 0:06:00.320 --> 0:06:03.200 venders will have a very tough time if Twitter wasn't 0:06:03.240 --> 0:06:06.960 taken private or it wasn't put the same same kind 0:06:07.000 --> 0:06:10.560 of a day in terms of stock market. So I 0:06:10.560 --> 0:06:14.120 I think the long tale of digital advengers. They will 0:06:14.160 --> 0:06:16.800 have a very tough time navigating this environment. But the 0:06:16.839 --> 0:06:20.240 ones that keep the engagement intact will come out, you know, 0:06:20.480 --> 0:06:23.359 much better out of this downturn. I know Bloomberg Intelligence 0:06:23.360 --> 0:06:27.080 doesn't give stock targets, you don't make recommendations, But does 0:06:27.120 --> 0:06:29.880 it make more sense Snap as a twenty one billion 0:06:29.880 --> 0:06:32.560 dollar market cap company or maybe a little bit above 0:06:32.600 --> 0:06:35.080 this and just kind about fifteen seconds? Yeah, Well, look, 0:06:35.160 --> 0:06:38.560 I think engagement is key. Social media is a very 0:06:38.640 --> 0:06:41.400 tough space. It is all about user growth and engagement. 0:06:41.440 --> 0:06:44.320 If and if Snap keeps the engagement it has competition 0:06:44.360 --> 0:06:47.160 from TikTok and roadblocks, they will do well. Alright, always 0:06:47.160 --> 0:06:50.480 smart Mandep saying he's senior tech industry analyst Bloomberg Intelligence. 0:06:50.480 --> 0:06:54.440 Here in our studio, this is Bloomberg. You're listening to 0:06:54.520 --> 0:06:58.520 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:06:58.600 --> 0:07:02.200 Tim Stinovic on Bloomberg Radio. So among our most right 0:07:02.240 --> 0:07:04.760 on the Bloomberg Today. It's about how more Americans are 0:07:04.839 --> 0:07:07.080 quitting their jobs than ever in the United States, and 0:07:07.160 --> 0:07:10.400 fewer are sticking around in their new positions. Molly Smith 0:07:10.440 --> 0:07:14.000 is economics editor for Bloomberg News. She joins us via 0:07:14.040 --> 0:07:17.440 the phone from New York City. Molly, job jumpers. How 0:07:17.440 --> 0:07:20.920 do you define a job jumper? So we worked on 0:07:20.960 --> 0:07:23.560 the story in tandem with Lincoln and some of the 0:07:23.640 --> 0:07:26.760 data they were able to compile based on profile changes 0:07:27.240 --> 0:07:30.200 in one and the data set and goes back to 0:07:31.720 --> 0:07:34.680 So what they found is of workers who took a 0:07:34.720 --> 0:07:37.520 new job last year, the share who had been in 0:07:37.560 --> 0:07:41.280 their prior job for less than twelve months rose by 0:07:41.320 --> 0:07:44.280 six and a half percent compared to and that's the 0:07:44.360 --> 0:07:47.080 highest it's been since Lincoln started tracking the data in 0:07:48.560 --> 0:07:51.000 So what that's telling us is that people are in 0:07:51.080 --> 0:07:54.640 their jobs for less amount of time and there and 0:07:54.720 --> 0:07:56.920 the amount of them who are in a job for 0:07:57.120 --> 0:08:01.520 that shorter tenure is growing. Why is it happening? Molly? 0:08:02.160 --> 0:08:05.920 So there? I mean the right now, job opportunities are 0:08:05.960 --> 0:08:09.640 just so immense. For um. You know that they have 0:08:09.720 --> 0:08:12.640 grown so much during the pandemic recovery, with the advent 0:08:12.760 --> 0:08:17.360 of remote work, with people's wages growing up, especially if 0:08:17.360 --> 0:08:22.200 you're changing locations, um, and that people have just really 0:08:22.240 --> 0:08:25.400 redefined their relationship with work. So there are a lot 0:08:25.400 --> 0:08:28.080 of opportunities right there that people right now are trying 0:08:28.120 --> 0:08:31.800 to take advantage of and looking at how work plays 0:08:32.000 --> 0:08:35.920 a role in their lives. So is this something that continues? 0:08:36.080 --> 0:08:37.960 What is how is Lincoln thinking about this? How our 0:08:37.960 --> 0:08:41.400 employers thinking about this? In terms of attracting and retaining talent? 0:08:41.440 --> 0:08:45.800 If people are jumping around, then that's expensive. It is, 0:08:46.120 --> 0:08:50.079 And based on some of our own economist data at Bloomberg, 0:08:50.320 --> 0:08:52.440 there are signs to show that it's maybe flowing at 0:08:52.480 --> 0:08:55.040 least if you're looking at this by wages, which of 0:08:55.080 --> 0:08:57.800 course money is a huge factor for why people decide 0:08:57.840 --> 0:09:00.439 to leave their jobs. Uh So, right now, it looks 0:09:00.440 --> 0:09:03.559 like wage increases maybe leveling off based on a few 0:09:03.559 --> 0:09:07.240 different economic indicators, and also by some of the small 0:09:07.280 --> 0:09:10.320 business indicators we track as well. The National Federation of 0:09:10.320 --> 0:09:13.840 Independent Business UM has been has some metrics that point 0:09:13.880 --> 0:09:16.240 to this leveling off as well. So you could start 0:09:16.280 --> 0:09:20.800 to see some of the job jumping slowing now that 0:09:20.880 --> 0:09:23.440 wage increases might be leveling off. Well, that's what I 0:09:23.440 --> 0:09:24.960 wanted to ask you, because how much of this is 0:09:25.000 --> 0:09:27.920 just you know, how many times throughout my career people 0:09:27.960 --> 0:09:29.160 are like, you want to make more money, you get 0:09:29.200 --> 0:09:31.720 jumped somewhere else, like you know, and sometimes that's true, 0:09:31.760 --> 0:09:34.800 sometimes that's not true, um, But how much of the 0:09:34.920 --> 0:09:37.960 job jumping that's going on is driven by wanting to 0:09:38.000 --> 0:09:40.280 make more even though you know, Molly, there's so many 0:09:40.280 --> 0:09:42.680 different surveys out there that's saying it's not just about 0:09:42.720 --> 0:09:45.200 money why people are are are taking jobs are moving 0:09:45.240 --> 0:09:49.280 around of course, and you know, based on LinkedIn data alone, 0:09:49.280 --> 0:09:51.679 that's not really something we can disturn and we can 0:09:51.679 --> 0:09:54.280 only just based on this data that just see that 0:09:54.360 --> 0:09:55.840 the number of people who are in a job for 0:09:55.920 --> 0:09:59.120 less than a year is growing. Uh So, based on that, 0:09:59.240 --> 0:10:02.640 and based on the fact that quits are very high 0:10:02.679 --> 0:10:05.199 and layoffs are very low, the only thing we can 0:10:05.240 --> 0:10:09.680 really infer with good confidence is that these moves are voluntary, 0:10:09.800 --> 0:10:12.880 as then people are not being let go from their jobs. Um. 0:10:13.120 --> 0:10:16.520 But as far as the motivation for leaving, um, I mean, 0:10:16.559 --> 0:10:19.360 I would definitely say that pay continues to be a 0:10:19.400 --> 0:10:21.439 big reason. But of the people who I spoke to 0:10:21.559 --> 0:10:24.679 for their story, regret was also just a part of it, 0:10:24.760 --> 0:10:27.559 and that not getting a great sense of the workplace 0:10:27.600 --> 0:10:30.359 there in especially if you're interviewing for a job remotely 0:10:30.720 --> 0:10:33.160 and then only to arrive and realize that, like, maybe 0:10:33.160 --> 0:10:35.920 you made a mistake. Was that the theme that that 0:10:36.679 --> 0:10:38.680 sort of tied together the people you spoke to who 0:10:38.679 --> 0:10:40.880 regretted making the jump, that they didn't get a good 0:10:40.880 --> 0:10:44.319 idea of what they were in for because perhaps they 0:10:44.320 --> 0:10:47.480 interviewed remotely, or they only got to know people remotely 0:10:47.520 --> 0:10:50.720 before they started their job. Yeah, and I think as well. 0:10:50.840 --> 0:10:53.240 I mean, some of it too is that there's such 0:10:53.800 --> 0:10:56.520 demand for challenge right now. The way that these interview 0:10:56.559 --> 0:11:00.400 problems are going is on such a tighter timeline. I mean, 0:11:00.520 --> 0:11:03.880 you can really make these switch its happen a lot faster. 0:11:04.160 --> 0:11:06.960 So that could also perhaps me that maybe you're not 0:11:07.040 --> 0:11:10.600 talking to as many people as you normally would before 0:11:10.600 --> 0:11:13.560 taking a new job that you're only meeting with perhaps 0:11:13.600 --> 0:11:18.160 to select few managers or teammates um before you sign 0:11:18.280 --> 0:11:21.679 that offer letters. So that could also perhaps um be 0:11:22.000 --> 0:11:24.319 part of the equation here. You gotta say, Molly, a 0:11:24.400 --> 0:11:26.680 very cool data set that you guys worked on with LinkedIn, 0:11:26.840 --> 0:11:28.760 because I think this is one of the big questions 0:11:28.760 --> 0:11:30.600 Tim and I talked about it. There's so many different 0:11:30.600 --> 0:11:33.640 stories the financial community of people saying Yep, everybody's going 0:11:33.640 --> 0:11:35.439 to come back to the office, and then Credit Sweets 0:11:35.760 --> 0:11:37.640 CEO saying, now we're going to see a lot more 0:11:37.640 --> 0:11:40.440 people working from home. And it's just one of those things, 0:11:40.600 --> 0:11:43.040 right Tim, that it's we won't know until a few 0:11:43.120 --> 0:11:45.160 years after. We won't know maybe in a year AGW. 0:11:45.280 --> 0:11:47.319 I've said this repeatedly. I think it had so much 0:11:47.400 --> 0:11:49.000 us to do with the tight labor market that we're 0:11:49.000 --> 0:11:51.680 in right now, and if we start to see slack there, 0:11:51.840 --> 0:11:54.560 then employees are calling the shots rather than employers, right 0:11:54.679 --> 0:11:57.600 it changes dramatics. We actually had a related story on 0:11:57.640 --> 0:12:00.640 this also out today's UM from some other data that 0:12:00.880 --> 0:12:02.720 UM from our Future of Work crew that we were 0:12:02.720 --> 0:12:05.320 able to track down that you know, a lot of 0:12:05.320 --> 0:12:07.880 the people who are very hell bent on getting workers 0:12:07.880 --> 0:12:10.240 back in the office claim that it's been for connectivity. 0:12:10.360 --> 0:12:12.599 But back to the workers who are coming into the 0:12:12.640 --> 0:12:15.679 ones who came connected of all, Yeah, ask me right, 0:12:15.760 --> 0:12:18.840 or ask us, ask us we were workers. I should say, Hey, 0:12:18.840 --> 0:12:21.560 Molly Smith, thank you so much. Molly is Economic editor 0:12:21.600 --> 0:12:26.160 at Bloomberg News. This is Bloomberg Business Week with Carol 0:12:26.200 --> 0:12:31.200 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, 0:12:31.200 --> 0:12:33.679 remember yesterday we talked about the Bloomberg Big Take and 0:12:33.679 --> 0:12:36.160 how the global energy shortage sets the stage for hot 0:12:36.160 --> 0:12:38.280 and deadly summer. Well, we kind of have part two 0:12:38.280 --> 0:12:40.559 of this we do. Joining us now is Will Wade, 0:12:40.559 --> 0:12:43.559 Power and Renewable Energy editor for Bloomberg News. Will's with 0:12:43.640 --> 0:12:46.080 us in the Bloomberg Interactive Broker Studio. He's got a 0:12:46.080 --> 0:12:48.760 piece in the upcoming issue of Business Week magazine, but 0:12:48.760 --> 0:12:50.880 you can read it now on the Bloomberg terminal and 0:12:50.920 --> 0:12:53.560 at Bloomberg dot com slash a Business Week. It's about 0:12:53.640 --> 0:12:56.760 us consumers facing a summer of pain when it comes 0:12:56.800 --> 0:13:00.280 to the power bill. This is heat and gas surge. Well, 0:13:00.280 --> 0:13:02.080 I read a story like, well, I want to start 0:13:02.080 --> 0:13:04.240 by just you giving us the numbers. How how how 0:13:04.320 --> 0:13:06.760 ugly is it going to get for Americans out there 0:13:06.760 --> 0:13:10.640 this summer as they crank the A C. Oh really ugly. Oh. 0:13:10.720 --> 0:13:13.959 The number we're using now is your utility bill this 0:13:14.000 --> 0:13:17.760 summer could be about the year ago. But the thing 0:13:17.840 --> 0:13:21.479 is that's based on natural gas prices, and that's assuming 0:13:21.520 --> 0:13:24.600 gases at eight bucks, and right now it's almost nine bucks. 0:13:25.080 --> 0:13:27.439 So that means the utility bill could be even higher 0:13:27.440 --> 0:13:30.720 than and that was already high. I'm gonna become my father. 0:13:30.840 --> 0:13:33.439 I can just see this like the air conditioner turn off, 0:13:33.440 --> 0:13:35.280 the lights go up in the pool kind of thing 0:13:35.320 --> 0:13:39.040 like cool offesomehow if you have a pool? I'm coming over. No, 0:13:39.200 --> 0:13:42.760 I don't write now. So here's the here's the crazy thing. 0:13:42.760 --> 0:13:45.559 I wrote a story just like this in March, based 0:13:45.559 --> 0:13:48.679 on January numbers, and that story basically said the same thing, Hey, 0:13:48.679 --> 0:13:51.400 your utility bill is gonna be really high because of 0:13:51.480 --> 0:13:54.520 natural gas prices and passing through the consumer, and people 0:13:54.559 --> 0:13:56.520 are upset about it. Then and the number then, was 0:13:56.559 --> 0:13:59.600 that prices are gonna be like higher. I'm just doing 0:13:59.600 --> 0:14:02.200 the same story because the same things are happening, all right, Joel. 0:14:02.240 --> 0:14:04.960 Remember Joe Weber's here, editor of Bloomberg business Week magazine. 0:14:04.960 --> 0:14:06.680 Remember when we had just so much nat gas It 0:14:06.760 --> 0:14:10.800 was just so cheap and everybody a year ago, yeah, 0:14:10.880 --> 0:14:13.120 three bucks a year ago. It's almost nine bucks now. 0:14:13.720 --> 0:14:18.840 Who made money on that trade? By the way, gas traders? Traders? Yeah, 0:14:18.960 --> 0:14:22.720 So where are we going to be? Come like fall 0:14:23.400 --> 0:14:25.840 could be close to nine, could be close to nine 0:14:25.840 --> 0:14:27.800 through much of the next year, according to the forward 0:14:27.840 --> 0:14:29.960 curve I was looking at. But the thing is gas 0:14:30.040 --> 0:14:34.400 was between like two and three bucks from one. It 0:14:34.520 --> 0:14:39.080 is just spiked since last summer. So are the supplies there? Is? 0:14:39.080 --> 0:14:43.920 It just crazy crazy demand. It's kind of a combination 0:14:43.960 --> 0:14:45.600 of the two. And it really goes back to COVID 0:14:46.000 --> 0:14:48.760 because the first thing that happened in COVID was electricity 0:14:48.800 --> 0:14:52.600 con assumption went down because everybody started saying home, so 0:14:52.720 --> 0:14:56.880 the gas producers cut back on production. And then last 0:14:56.920 --> 0:14:59.240 summer everybody came out of their houses, and all the 0:14:59.280 --> 0:15:03.160 factories and all cis started going back into work, and 0:15:03.280 --> 0:15:06.760 electricity demands started shooting up, but there wasn't enough gas 0:15:06.760 --> 0:15:10.440 and coal too, So now we've got a shortage of fuel. Well, 0:15:10.480 --> 0:15:12.840 how do how do we get here? Just? I mean 0:15:13.280 --> 0:15:16.120 generations ago? Well, what are the policy decisions that have 0:15:16.160 --> 0:15:19.520 been made where we're not really m yeah, I'm just 0:15:19.520 --> 0:15:24.360 thinking about you know it, We're have availability of solar 0:15:24.440 --> 0:15:28.640 right now. Nuclear plants are just essentially gone because there 0:15:28.720 --> 0:15:32.080 was you know, widespread outrage about those. Uh, I mean, 0:15:32.080 --> 0:15:33.880 how do we get out of this mess? Well, it's 0:15:33.920 --> 0:15:36.040 interesting you mentioned nuclear. That's like one of the next 0:15:36.080 --> 0:15:38.440 big stories we're working on is whether or not nuclear 0:15:38.800 --> 0:15:40.720 is going to be important to carry us out of this. 0:15:40.840 --> 0:15:43.800 There's a big debate about that right now. Um. In 0:15:43.920 --> 0:15:46.760 terms of policy, people right now are pressing for more 0:15:47.160 --> 0:15:49.960 fossil fuel production. They say we need this right now, 0:15:50.080 --> 0:15:53.960 And it's true, we really do need this electricity right now. 0:15:54.480 --> 0:15:56.720 But thinking about fossil fuels is the way to save 0:15:56.800 --> 0:15:58.960 us is really short term thinking. Well, and I feel 0:15:58.960 --> 0:16:00.760 like that's part of the discussion comeing out of Davos 0:16:00.880 --> 0:16:03.160 right now in terms of we can't give up on 0:16:03.200 --> 0:16:07.320 our climate change metrics. Um, it's just too to devastating 0:16:07.360 --> 0:16:10.080 if we do so. Consumers are just basically gonna have 0:16:10.120 --> 0:16:11.760 to grin and bear it. Right, there's no way out 0:16:11.760 --> 0:16:13.360 of this. If you want your A C, You're gonna 0:16:13.360 --> 0:16:16.800 have to pay for it. Everybody knows that companies are 0:16:16.840 --> 0:16:20.600 thrilled at the extra money that's coming in. Well, the 0:16:20.600 --> 0:16:23.280 first part of yes, consumers is gonna can't wait for 0:16:23.280 --> 0:16:27.560 the early storms of November already. Right, Well, consumers do 0:16:27.640 --> 0:16:29.120 have to grin and bear it. They don't really have 0:16:29.160 --> 0:16:31.640 a whole lot of choice. The way the utility bill 0:16:31.720 --> 0:16:34.560 system is designed is the cost of that fuel just 0:16:34.560 --> 0:16:37.240 passes straight through the consumers. But they get mad at 0:16:37.280 --> 0:16:40.080 their utilities that you know, that's who the bill comes from. 0:16:40.080 --> 0:16:43.320 But it's not really the utilities fault. So I'm just 0:16:43.360 --> 0:16:46.600 gonna guess something's gonna break this summer. It's gonna be 0:16:46.640 --> 0:16:49.600 a grid somewhere. There's gonna be a brown out something, 0:16:50.200 --> 0:16:52.120 and then d C is gonna be like how did 0:16:52.160 --> 0:16:54.520 we ever get here? Right, and like, what's gonna what's 0:16:54.520 --> 0:16:59.760 gonna change? After a brutal summer, people might get more 0:17:00.000 --> 0:17:03.040 said about it. We might see some outrage in the elections. 0:17:03.040 --> 0:17:05.359 Did you see the hurricane forecast that came out this morning? 0:17:05.359 --> 0:17:08.399 And talked about it did our seventh straight year of 0:17:08.440 --> 0:17:11.720 more hurricanes than normal. Yeah, so I mean like layer 0:17:11.720 --> 0:17:13.720 and I mean we keep talking about whether it's the 0:17:13.720 --> 0:17:16.760 food crisis, whether it's i mean just pick its supply chains, 0:17:16.800 --> 0:17:19.640 it's you know, geopolitical, there's just this like perfect storm 0:17:19.800 --> 0:17:24.040 that continues to impact our world. No pun intended. Well, 0:17:24.080 --> 0:17:27.280 it's it's the it's the right phrase. Everything seems to 0:17:27.320 --> 0:17:29.760 be close to the breaking point. Well, as you point 0:17:29.760 --> 0:17:33.640 out this story, well this hits lower income Americans disproportionately 0:17:33.760 --> 0:17:38.359 because a larger portion of their income goes to costs 0:17:38.400 --> 0:17:41.480 such as these. They don't have as much discretionary income. 0:17:41.920 --> 0:17:45.239 And as you write, you could stop driving places if 0:17:45.240 --> 0:17:47.800 there's demand destruction there. But if it's over a hundred 0:17:47.840 --> 0:17:51.720 degrees somewhere and you know you need to cool where 0:17:51.760 --> 0:17:54.240 you live, that your conditioner is going to stay on. Absolutely, 0:17:54.280 --> 0:17:58.320 that's a safety issue. And that is that's another impact 0:17:58.440 --> 0:18:01.760 of climate change, because we've got these heat waves that 0:18:02.000 --> 0:18:04.680 used to bring things up to nine degrees and people 0:18:04.680 --> 0:18:06.560 to go, oh this is really hot. Now it's a 0:18:06.640 --> 0:18:10.200 hundred and ten degrees and people die. Yeah, it's pretty remarkable. 0:18:10.480 --> 0:18:14.680 My brother lives in Seattle and he had never used 0:18:15.000 --> 0:18:17.560 None of the houses in Seattle have air conditioner and 0:18:17.800 --> 0:18:21.320 he just got installed. They know they do now, Yeah, 0:18:21.320 --> 0:18:23.400 they're all getting them installed right now because they need 0:18:23.400 --> 0:18:28.040 it from Oregon. And like last summer, you know, the 0:18:28.480 --> 0:18:31.440 heat dum hit and if you didn't have a c 0:18:31.800 --> 0:18:34.400 you did, you know, or you hope you did early on. 0:18:34.720 --> 0:18:36.960 And it's lethal. I mean, this is scary stuff, Like 0:18:37.440 --> 0:18:41.320 it's truly. Uh, it hurt your wallet and you know 0:18:41.400 --> 0:18:45.080 it it is you know, can can kill you. But 0:18:45.480 --> 0:18:47.719 the the interesting thing that I think here too is like, 0:18:47.880 --> 0:18:51.040 well we were we wrote a story, uh a couple 0:18:51.040 --> 0:18:53.119 of months ago now about how Europe was going to 0:18:53.200 --> 0:18:56.520 feel the pain, and it was like, oh, it's their problem, 0:18:56.800 --> 0:19:00.399 you know, their system, so screwy. Uh, they didn't have 0:19:00.440 --> 0:19:02.760 the foresight. And here we are and it's you know, 0:19:02.800 --> 0:19:05.040 the boomerang effect and and it's going to happen in 0:19:05.080 --> 0:19:08.320 America right Like, so is there any are there any 0:19:08.400 --> 0:19:10.880 lessons to be learned from from Europe that apply over 0:19:10.920 --> 0:19:14.480 here from that experience. Europe's in a really tight spot 0:19:14.560 --> 0:19:18.399 these days. They've got their own electricity shortages, partly because 0:19:18.440 --> 0:19:21.200 of whether or not they're going to continue getting fuel 0:19:21.240 --> 0:19:24.720 from Russia. France for some reason, has a lot of 0:19:24.800 --> 0:19:27.399 nuclear power plants that are suddenly offline this spring, and 0:19:27.640 --> 0:19:30.639 they're facing electricity shortages too. That's why we're shipping so 0:19:30.760 --> 0:19:33.640 much gas over there, which is just another reason why 0:19:33.680 --> 0:19:35.720 we have less gas here and the price of gas 0:19:35.720 --> 0:19:37.480 goes up. Is that likely to change? Is they're gonna 0:19:37.480 --> 0:19:39.800 be political pressure potentially? I mean we just we see 0:19:39.800 --> 0:19:42.960 it with India with food, you know, right doing export controls. 0:19:43.000 --> 0:19:45.480 Could we see that here? Not likely. I've been seeing 0:19:45.480 --> 0:19:47.719 both sides of that debate. Don't ship the gas over 0:19:47.760 --> 0:19:49.600 there because we need it. But if we don't ship 0:19:49.600 --> 0:19:51.240 the gas over there, then they're going to have more 0:19:51.240 --> 0:19:54.720 electricity shortages, and our friends and allies will be unhappy 0:19:54.760 --> 0:19:56.760 with us, and we don't like that. Remember when we 0:19:56.760 --> 0:20:01.040 didn't export anything, like you know, like those days last year. 0:20:01.640 --> 0:20:04.320 Sorry what we were calling. We're thinking about this, like 0:20:04.320 --> 0:20:08.080 will wait is our Bloom and Doom editor. Sorry, great title. 0:20:08.520 --> 0:20:10.600 I'm really sorry about that. I'll put that in for 0:20:10.640 --> 0:20:17.000 you business cards, well, like thunderstorms, will wait, though he 0:20:17.119 --> 0:20:20.800 is power renewable Energy editor at Bloomberg News. Check out 0:20:20.800 --> 0:20:23.040 this story the upcoming issue of Bloomberg Business Week magazine 0:20:23.080 --> 0:20:25.240 online on the Bloomberg Until Weber, of course, editor of 0:20:25.280 --> 0:20:28.480 Bloomberg Business Week, both in our Interactive workers studio. You 0:20:28.600 --> 0:20:34.000 are listening to Bloomberg Radio. You're listening to Bloomberg Business 0:20:34.080 --> 0:20:37.920 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 0:20:38.400 --> 0:20:41.040 on Bloomberg Radio. We'll not sure if you've noticed, but 0:20:41.080 --> 0:20:43.680 retail credit is having its worst months in this march 0:20:43.720 --> 0:20:46.520 of stung by blow ups at the likes of Party 0:20:46.560 --> 0:20:49.600 City and Carvona, and last week's bad Walmart and Target 0:20:49.600 --> 0:20:53.160 News triggered an avalanche avalhanche in bonds from high street 0:20:53.240 --> 0:20:56.600 names including Macy's, Michael's Bath and body Works, so many 0:20:56.680 --> 0:20:59.400