1 00:00:00,280 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:08,600 --> 00:00:12,960 Speaker 2: This is Bloomberg Business Week Daily reporting from the magazine 3 00:00:12,960 --> 00:00:17,560 Speaker 2: that helps global leaders stay ahead with insight on the people, companies, 4 00:00:17,600 --> 00:00:22,520 Speaker 2: and trends shaping today's complex economy. Plus global business, finance 5 00:00:22,520 --> 00:00:26,240 Speaker 2: and tech news as it happens. The Bloomberg Business Weekdaily 6 00:00:26,360 --> 00:00:31,240 Speaker 2: Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 7 00:00:31,920 --> 00:00:34,760 Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 8 00:00:35,200 --> 00:00:37,960 Speaker 1: This past week, it was largely about the newsflow from 9 00:00:38,120 --> 00:00:41,760 Speaker 1: Washington to Wall Street that included an escalation in Middle 10 00:00:41,800 --> 00:00:45,120 Speaker 1: East hostilities as the US and Iran signaled a renewal 11 00:00:45,159 --> 00:00:49,000 Speaker 1: of peace talks is unlikely in the near term as 12 00:00:49,080 --> 00:00:52,560 Speaker 1: military tax continued from both sides. Also volatility in the 13 00:00:52,640 --> 00:00:56,680 Speaker 1: equity markets around semiconductors and AI related names. As the 14 00:00:56,680 --> 00:00:59,360 Speaker 1: start of the megacap earning season got underway thanks to 15 00:00:59,400 --> 00:01:02,480 Speaker 1: results from Tim, Tesla and Alphabet, many other companies came 16 00:01:02,480 --> 00:01:04,520 Speaker 1: out with results this past week. We were pretty busy 17 00:01:04,600 --> 00:01:06,720 Speaker 1: pouring over them, but we are really getting ready for 18 00:01:06,760 --> 00:01:11,000 Speaker 1: this coming week's biggest drop of quarterly results, including four 19 00:01:11,040 --> 00:01:14,040 Speaker 1: of the back seven tim So we're going to be busy. 20 00:01:14,120 --> 00:01:15,800 Speaker 3: Oh, we're going to be busy because we also have 21 00:01:15,840 --> 00:01:16,840 Speaker 3: a FED decision. 22 00:01:16,959 --> 00:01:17,720 Speaker 1: Oh yeah, there is that. 23 00:01:17,959 --> 00:01:20,560 Speaker 3: Yeah, it's the second meeting under FED chair Kevin Warsh. 24 00:01:20,680 --> 00:01:23,120 Speaker 3: Inflation concerns being fueled by the ongoing war in the 25 00:01:23,160 --> 00:01:26,160 Speaker 3: Middle East that has continued to push up oil prices. 26 00:01:26,319 --> 00:01:28,279 Speaker 3: As always, you can find the latest updates and coverage 27 00:01:28,280 --> 00:01:30,800 Speaker 3: on the Bloomberg terminal and at Bloomberg dot com. 28 00:01:30,840 --> 00:01:32,880 Speaker 1: When it comes to earnings, this past week though, we 29 00:01:32,920 --> 00:01:35,600 Speaker 1: did get a read on investors thanks to Charles Schwab, 30 00:01:35,920 --> 00:01:40,080 Speaker 1: which benefited from last quarter's market volatility and the SpaceX ipo. 31 00:01:40,600 --> 00:01:42,880 Speaker 1: We talked about it all, plus the push into prediction 32 00:01:42,959 --> 00:01:45,360 Speaker 1: markets with Charles Schwab CEO Rick Wurster. 33 00:01:45,760 --> 00:01:49,800 Speaker 3: Plus Bloomberg Auto reporter Keith Noughton reflects on four decades 34 00:01:49,920 --> 00:01:52,720 Speaker 3: on the global autobeat, all the twists and turns and 35 00:01:52,760 --> 00:01:56,400 Speaker 3: bumps in the road, everything from bailouts and buyouts Elon 36 00:01:56,440 --> 00:01:58,840 Speaker 3: and EV's and to China's coming of age. 37 00:01:59,000 --> 00:02:01,280 Speaker 1: All that to come. We begin with the state of crypto. 38 00:02:01,640 --> 00:02:04,120 Speaker 1: Robinhood is continuing. It's pushed into the world of digital 39 00:02:04,120 --> 00:02:07,640 Speaker 1: assets by expanding its services into the UK and Canada. 40 00:02:08,040 --> 00:02:10,960 Speaker 3: This is analyst at Bernstein and Piper Sandler said this 41 00:02:11,000 --> 00:02:14,280 Speaker 3: past week that Robinhood's revenue from prediction markets is set 42 00:02:14,320 --> 00:02:18,160 Speaker 3: to overshadow that from cryptocurrency trading. We were curious what 43 00:02:18,200 --> 00:02:20,160 Speaker 3: the company thought about that. For more, we caught up 44 00:02:20,200 --> 00:02:23,480 Speaker 3: with Johan Kerbrat, Senior vice president and general manager for 45 00:02:23,520 --> 00:02:26,720 Speaker 3: Crypto and International at Robinhood. We've got this decline in 46 00:02:27,320 --> 00:02:30,120 Speaker 3: crypto trading, and I think many people would argue it's 47 00:02:30,160 --> 00:02:32,520 Speaker 3: related to the price action that we've seen since October, 48 00:02:32,800 --> 00:02:35,520 Speaker 3: but at the same time a catalyst in prediction markets 49 00:02:35,520 --> 00:02:38,040 Speaker 3: with the World Cup. I'm just wondering how you're thinking 50 00:02:38,040 --> 00:02:42,119 Speaker 3: about this universe of these two different elements of trading 51 00:02:42,600 --> 00:02:45,480 Speaker 3: and how that affects your users, Like are they doing 52 00:02:45,560 --> 00:02:47,640 Speaker 3: less on crypto and more with prediction markets. 53 00:02:48,040 --> 00:02:50,160 Speaker 4: We haven't seen know data when we look at our 54 00:02:50,200 --> 00:02:54,600 Speaker 4: customer engagement on the platform. We do have contracts on 55 00:02:54,639 --> 00:02:58,000 Speaker 4: the Prediction Market platform that now related to crypto index 56 00:02:58,040 --> 00:03:01,280 Speaker 4: price and cryptoactions, But overall, I think it's just one 57 00:03:01,320 --> 00:03:03,720 Speaker 4: of this cycle where we see a bit the sentiment 58 00:03:03,919 --> 00:03:06,920 Speaker 4: in crypto a little down, and overall we are just 59 00:03:06,919 --> 00:03:09,480 Speaker 4: focusing on building new tools and new features that people 60 00:03:09,560 --> 00:03:12,720 Speaker 4: can utilize when the sentiment goes up. 61 00:03:12,919 --> 00:03:15,040 Speaker 3: So when the sentiment goes up, not if the sentiment 62 00:03:15,080 --> 00:03:16,799 Speaker 3: goes up, like you're confident it will go up. 63 00:03:16,960 --> 00:03:20,160 Speaker 4: You know, we've seen all these different cycles a lot, 64 00:03:20,520 --> 00:03:22,640 Speaker 4: and I think this is not our first time, not 65 00:03:22,680 --> 00:03:25,280 Speaker 4: off first radio, and I think the sentiment will come back. 66 00:03:25,520 --> 00:03:27,480 Speaker 4: We saw it with the launch of our robbinon chain 67 00:03:27,680 --> 00:03:31,320 Speaker 4: July first. We've seen very good metrics already one and 68 00:03:31,440 --> 00:03:34,800 Speaker 4: five million transaction on the platform. 69 00:03:34,880 --> 00:03:39,320 Speaker 3: So explain what the impetus behind that was and why 70 00:03:39,480 --> 00:03:40,320 Speaker 3: you guys launched that. 71 00:03:40,320 --> 00:03:43,080 Speaker 4: Now, Yeah, we really wanted to create an infrastructure on 72 00:03:43,120 --> 00:03:47,240 Speaker 4: a backbone for creating new products that bring the value 73 00:03:47,360 --> 00:03:52,840 Speaker 4: of defy and blockschain technology to autraditional finance systems. And 74 00:03:52,920 --> 00:03:54,920 Speaker 4: so one of the first product that we launch with 75 00:03:54,960 --> 00:03:57,920 Speaker 4: this chain is called robbion Urn that gives you approximately 76 00:03:57,960 --> 00:04:01,280 Speaker 4: seven percent on the doll out that you're lending to 77 00:04:01,320 --> 00:04:04,120 Speaker 4: the protocol. And I think it's really giving you the 78 00:04:04,160 --> 00:04:05,840 Speaker 4: best of two worlds, the high yield that you can 79 00:04:05,880 --> 00:04:08,520 Speaker 4: get from DeFi and also the simple UX and UI 80 00:04:08,600 --> 00:04:10,320 Speaker 4: that you can get from a platform like robbin Hood. 81 00:04:10,800 --> 00:04:13,600 Speaker 1: What do you want, guys, really want to be prediction markets, Crypto, 82 00:04:13,720 --> 00:04:16,480 Speaker 1: you've got a platinum card. Like, there's a lot of stuff, 83 00:04:16,920 --> 00:04:19,039 Speaker 1: and I think some our critics might say, wait, you 84 00:04:19,120 --> 00:04:21,400 Speaker 1: just kind of are chasing what seems to be popular, 85 00:04:21,640 --> 00:04:22,960 Speaker 1: So what is it that you really want to be. 86 00:04:23,680 --> 00:04:25,760 Speaker 4: I think for us, the main goal has been to 87 00:04:25,800 --> 00:04:28,640 Speaker 4: be this all in one platform for all your financial needs, 88 00:04:28,800 --> 00:04:32,280 Speaker 4: and for that you need to carry out to customers 89 00:04:32,320 --> 00:04:35,080 Speaker 4: at different stage of their life, from the very young 90 00:04:35,160 --> 00:04:38,359 Speaker 4: people that are starting to think about retirement opening their 91 00:04:38,400 --> 00:04:41,120 Speaker 4: first retirement account on robbin hood like an IRA, to 92 00:04:41,480 --> 00:04:44,799 Speaker 4: the more advanced customers that want to use identic trading 93 00:04:45,000 --> 00:04:48,760 Speaker 4: or AI tools. And also at the same time, banking 94 00:04:49,040 --> 00:04:51,120 Speaker 4: rails and credit cards are still something that you need 95 00:04:51,120 --> 00:04:52,120 Speaker 4: on a day to day basis. 96 00:04:52,520 --> 00:04:54,960 Speaker 1: But why not go to the establishment, like to say, 97 00:04:55,000 --> 00:04:56,760 Speaker 1: like we talked to the folks you know, recourster ever 98 00:04:56,760 --> 00:04:59,240 Speaker 1: at Charleshwa, but why not go to the establishment who 99 00:04:59,560 --> 00:05:02,320 Speaker 1: are all so embracing kind of the new innovation if 100 00:05:02,360 --> 00:05:03,320 Speaker 1: you will in finance. 101 00:05:03,560 --> 00:05:06,159 Speaker 4: Yeah, we're absolutely are as well. If you see our market 102 00:05:06,160 --> 00:05:10,200 Speaker 4: share and the growth of our business, it shows that 103 00:05:10,240 --> 00:05:13,120 Speaker 4: we've been able to grab some of his customer from 104 00:05:13,160 --> 00:05:16,000 Speaker 4: the more established businesses. But I think for us, it's 105 00:05:16,000 --> 00:05:21,240 Speaker 4: been important to have a wide array of features and functionalities. 106 00:05:21,320 --> 00:05:22,960 Speaker 4: If you think about our credit card, we launched a 107 00:05:22,960 --> 00:05:25,120 Speaker 4: Gold credit card. We have more than a million customer 108 00:05:25,200 --> 00:05:28,120 Speaker 4: now with his credit card. It really shows that there 109 00:05:28,120 --> 00:05:29,800 Speaker 4: are a lot of things that we are used to 110 00:05:29,880 --> 00:05:33,279 Speaker 4: on the financial side that we can disrupt. And Robin 111 00:05:33,520 --> 00:05:35,880 Speaker 4: by launching the Gold card with three percent cash back 112 00:05:35,960 --> 00:05:39,280 Speaker 4: on almost everything, really changed the way that people were 113 00:05:39,400 --> 00:05:41,440 Speaker 4: utilizing Creye cards in the business. 114 00:05:41,960 --> 00:05:44,080 Speaker 3: On the crypto side of things, we spoke to Nathan 115 00:05:44,120 --> 00:05:46,920 Speaker 3: Dean of Bloomberg Intelligence. He said he actually agreed with 116 00:05:46,960 --> 00:05:49,800 Speaker 3: Treasury Secretary Scott Passon who said that we're at the 117 00:05:49,839 --> 00:05:51,920 Speaker 3: ten yard or the one yard line, excuse me, one 118 00:05:52,000 --> 00:05:55,359 Speaker 3: yard line with the Clarity Act in the Senate. If 119 00:05:55,400 --> 00:05:58,200 Speaker 3: that passes this year, what does it mean for your business? 120 00:05:58,480 --> 00:06:01,279 Speaker 4: I think it really changed the way that we can 121 00:06:01,720 --> 00:06:03,919 Speaker 4: launch product in the US. Right now, we have a 122 00:06:04,080 --> 00:06:07,120 Speaker 4: very fragmented situation where some states will have access to 123 00:06:07,160 --> 00:06:10,479 Speaker 4: some features and not and it's something that really frustrates 124 00:06:10,480 --> 00:06:12,640 Speaker 4: our customers. So we want to be able to launch 125 00:06:12,680 --> 00:06:15,560 Speaker 4: products across the entire US the same way that we 126 00:06:15,560 --> 00:06:17,440 Speaker 4: are doing that in other region in the world, like 127 00:06:17,560 --> 00:06:20,960 Speaker 4: EU for example. The second thing is a lot of 128 00:06:20,960 --> 00:06:23,600 Speaker 4: institutions want to get into crypto. They understand that there 129 00:06:23,680 --> 00:06:26,440 Speaker 4: is a value using stable coin or toogonize that set, 130 00:06:26,880 --> 00:06:28,599 Speaker 4: but they don't want to do it for the short term. 131 00:06:28,640 --> 00:06:30,880 Speaker 4: If they don't have clear regulation, they are not going 132 00:06:30,920 --> 00:06:33,640 Speaker 4: to be able to launch a project that will take 133 00:06:33,640 --> 00:06:36,360 Speaker 4: five or six years to build. So it's really important 134 00:06:36,400 --> 00:06:38,719 Speaker 4: to get this clarity, which you know, the name of 135 00:06:38,760 --> 00:06:43,279 Speaker 4: the act is very appropriate because we can after this 136 00:06:43,400 --> 00:06:46,960 Speaker 4: bill really have a lot of institution company like Rowles 137 00:06:47,120 --> 00:06:49,120 Speaker 4: invest in a long time for blockshain technologies. 138 00:06:49,839 --> 00:06:54,040 Speaker 1: How do you think about politics and midterm elections and 139 00:06:54,200 --> 00:06:59,000 Speaker 1: changes in the administration. This is certainly an administration that 140 00:06:59,000 --> 00:07:03,359 Speaker 1: has been much more embracing, if you will, of digital assets. 141 00:07:03,400 --> 00:07:05,800 Speaker 1: But I'm just curious how you guys factored in and 142 00:07:05,839 --> 00:07:07,640 Speaker 1: think about it in terms of strategy or what you 143 00:07:07,680 --> 00:07:11,320 Speaker 1: might need to get done or think about before the midterms, 144 00:07:11,360 --> 00:07:13,040 Speaker 1: or how you're thinking about it afterwards. 145 00:07:13,280 --> 00:07:16,960 Speaker 4: Well, if you think about Robbino, it exists since twenty thirteen, right, 146 00:07:17,040 --> 00:07:20,160 Speaker 4: and so we have seen very different administration across the 147 00:07:20,200 --> 00:07:22,520 Speaker 4: existence of the company, and we are used to work 148 00:07:22,560 --> 00:07:27,120 Speaker 4: with different administration hopefully. I think this time, when you 149 00:07:27,200 --> 00:07:30,720 Speaker 4: see the entire world actually embracing cryptoregulation, you think about 150 00:07:30,840 --> 00:07:34,040 Speaker 4: MIKA in the EU, you think about the FCA in 151 00:07:34,080 --> 00:07:37,800 Speaker 4: the UK creating a new framework. We really saw a 152 00:07:37,840 --> 00:07:40,920 Speaker 4: situation with a previous administration where the US were falling 153 00:07:40,960 --> 00:07:45,120 Speaker 4: behind and companies, crypto companies wanted to actually build outside 154 00:07:45,160 --> 00:07:47,880 Speaker 4: of the US. So I think it's important that, no 155 00:07:47,920 --> 00:07:51,640 Speaker 4: matter the direction of the next administration will be that 156 00:07:51,720 --> 00:07:55,960 Speaker 4: we have comprehensive regulation to embrace the technology and make 157 00:07:56,000 --> 00:07:57,320 Speaker 4: people build in America again. 158 00:07:58,080 --> 00:08:00,840 Speaker 3: You are also over you obviously the inner national business 159 00:08:00,880 --> 00:08:05,200 Speaker 3: as well. And I'm just curious about the timeline or 160 00:08:05,240 --> 00:08:08,040 Speaker 3: the pipeline that you have for products that we may 161 00:08:08,080 --> 00:08:10,280 Speaker 3: not have in the US, but you can have overseas 162 00:08:10,960 --> 00:08:14,160 Speaker 3: or have overseas but not have here in the US, Like, 163 00:08:14,640 --> 00:08:16,440 Speaker 3: what is that breakdown right now? 164 00:08:16,760 --> 00:08:18,680 Speaker 4: Yeah, one of the main products we have over seas 165 00:08:18,720 --> 00:08:22,480 Speaker 4: and not in the US is crypto perpetuals or future perpetrols. 166 00:08:23,640 --> 00:08:28,040 Speaker 4: It's a primitive that was invented by crypto technology, and 167 00:08:28,880 --> 00:08:30,960 Speaker 4: we are seeing a lot of demand from more customers 168 00:08:31,000 --> 00:08:34,120 Speaker 4: and you see platforms that are decentralized, seeing a lot 169 00:08:34,160 --> 00:08:36,600 Speaker 4: of volume coming like a hyper liquid, like a hyper 170 00:08:36,640 --> 00:08:40,000 Speaker 4: liquid for example, in the U we have it available 171 00:08:40,160 --> 00:08:44,880 Speaker 4: for crypto contracts, but also for commodities and ETF contracts, 172 00:08:45,120 --> 00:08:47,719 Speaker 4: and it's something that we see a lot of engagement with. 173 00:08:48,000 --> 00:08:50,000 Speaker 3: Meaning you think that it would be something that could 174 00:08:50,000 --> 00:08:51,920 Speaker 3: happen here in the US at some point, I think so. 175 00:08:52,040 --> 00:08:54,320 Speaker 4: I think, you know, there are still some discussion happening 176 00:08:54,360 --> 00:08:56,680 Speaker 4: at the CFTC level, but it sounds like it's something 177 00:08:56,720 --> 00:09:00,200 Speaker 4: that we are looking to open in the US at 178 00:09:00,240 --> 00:09:03,520 Speaker 4: the regulatory level, and we have the technology ready to use, 179 00:09:03,559 --> 00:09:06,079 Speaker 4: so the day that we have clear regulation, we'll be 180 00:09:06,080 --> 00:09:06,720 Speaker 4: able to launch it. 181 00:09:06,840 --> 00:09:09,360 Speaker 3: You know, one thing that we always try to get 182 00:09:09,400 --> 00:09:11,440 Speaker 3: an understanding of is what people are doing on a 183 00:09:11,520 --> 00:09:13,880 Speaker 3: specific platform, what they're doing in different parts of the world. 184 00:09:14,000 --> 00:09:15,880 Speaker 3: We talk to a lot of folks who are managing 185 00:09:15,880 --> 00:09:20,240 Speaker 3: money and about asset allocation. What about outside of the 186 00:09:20,400 --> 00:09:23,280 Speaker 3: US demand for US stocks right now, what does that 187 00:09:23,320 --> 00:09:23,680 Speaker 3: look like? 188 00:09:24,280 --> 00:09:26,320 Speaker 4: It's still something that we are investing a lot. So 189 00:09:26,360 --> 00:09:29,760 Speaker 4: we launch or toogonized assets. We call it stock tokens 190 00:09:29,760 --> 00:09:32,640 Speaker 4: that give exposure to US stocks and ETF and in 191 00:09:32,679 --> 00:09:34,800 Speaker 4: a lot of places, including in Europe, you still have 192 00:09:34,880 --> 00:09:38,640 Speaker 4: platforms that still charge commission. For example, one of the 193 00:09:38,760 --> 00:09:41,400 Speaker 4: biggest ones still charge at least one year per transaction 194 00:09:42,000 --> 00:09:44,680 Speaker 4: when you want to buy your stock. So giving access 195 00:09:44,720 --> 00:09:47,800 Speaker 4: to the stock token has actually been a way for 196 00:09:47,840 --> 00:09:51,200 Speaker 4: them to access it without paying commission fees. We launch 197 00:09:51,240 --> 00:09:54,520 Speaker 4: actually a study with European customers and more than fifty 198 00:09:54,559 --> 00:09:56,960 Speaker 4: percent of them were interested by this type of product, 199 00:09:57,200 --> 00:09:59,080 Speaker 4: and a lot of them were interested by the fact 200 00:09:59,080 --> 00:10:01,560 Speaker 4: that you can trade them for seven as well, because 201 00:10:01,600 --> 00:10:04,200 Speaker 4: on the weekend the world doesn't stop and so the 202 00:10:04,240 --> 00:10:07,800 Speaker 4: economy also has an impact. And also the fact that 203 00:10:08,240 --> 00:10:10,800 Speaker 4: the time zone is very difficult. Right when the US 204 00:10:10,800 --> 00:10:13,520 Speaker 4: market is open is oft a night for the U. 205 00:10:14,440 --> 00:10:16,840 Speaker 4: So I think that's the kind of evolution that we'll 206 00:10:16,880 --> 00:10:20,160 Speaker 4: see from the blockshaining technology that will bring tradify into 207 00:10:20,400 --> 00:10:20,920 Speaker 4: a new world. 208 00:10:20,920 --> 00:10:23,839 Speaker 1: Basically, what about things like the SpaceX IPO and I'm 209 00:10:23,840 --> 00:10:25,920 Speaker 1: just curious how that impacted or what kind of activity 210 00:10:25,920 --> 00:10:28,400 Speaker 1: you guys saw around that, and then how you are 211 00:10:28,440 --> 00:10:32,600 Speaker 1: thinking about the upcoming IPOs, whether it's open AI roanthropic. 212 00:10:33,120 --> 00:10:36,080 Speaker 4: Yeah, we have a platform called IPO Access where customer 213 00:10:36,120 --> 00:10:40,240 Speaker 4: can actually place demand and based on what allocation we 214 00:10:40,280 --> 00:10:42,280 Speaker 4: get from the issue, we're able to distribute it to 215 00:10:42,320 --> 00:10:46,679 Speaker 4: our customers. SpaceX obviously was a large one, but it's 216 00:10:46,720 --> 00:10:49,040 Speaker 4: a platform that we were seeing more and more demand 217 00:10:49,080 --> 00:10:49,760 Speaker 4: on and I. 218 00:10:50,080 --> 00:10:52,120 Speaker 1: See a lot of demand with SpaceX. 219 00:10:52,480 --> 00:10:55,720 Speaker 4: Yeah, it was definitely one of a big demand because 220 00:10:55,720 --> 00:10:56,800 Speaker 4: of the size of the. 221 00:10:56,679 --> 00:10:58,599 Speaker 1: IPO and one of your biggest days. 222 00:10:59,120 --> 00:11:01,640 Speaker 4: I couldn't tell you the size exactly, but I think 223 00:11:01,760 --> 00:11:04,040 Speaker 4: what's interesting is seeing more and more of the demand 224 00:11:04,040 --> 00:11:07,520 Speaker 4: from a retail customer for early access to this company. 225 00:11:07,559 --> 00:11:09,559 Speaker 4: A lot of these companies are waiting longer and longer 226 00:11:09,600 --> 00:11:14,000 Speaker 4: before going public, and therefore the retail customer is not 227 00:11:14,040 --> 00:11:16,600 Speaker 4: able to also get the same upside that they were 228 00:11:16,640 --> 00:11:20,040 Speaker 4: when you know they were participating participating into the Google IPO, 229 00:11:20,080 --> 00:11:20,800 Speaker 4: for example. 230 00:11:20,600 --> 00:11:22,480 Speaker 3: What is the way what is the way to access 231 00:11:22,520 --> 00:11:25,680 Speaker 3: that in an environment where it's traditionally been restricted to 232 00:11:25,800 --> 00:11:28,840 Speaker 3: the so called accredited investors, which have you know, specific 233 00:11:28,880 --> 00:11:30,160 Speaker 3: barriers to net worth. 234 00:11:30,720 --> 00:11:32,280 Speaker 4: That's that's probably one of the things that we need 235 00:11:32,320 --> 00:11:34,640 Speaker 4: to change here in the US. If you think about 236 00:11:34,840 --> 00:11:37,880 Speaker 4: other places like in the EU, you have an assessment 237 00:11:37,960 --> 00:11:39,840 Speaker 4: test that you have to complete, so you will ask 238 00:11:39,840 --> 00:11:41,839 Speaker 4: you a questions and only if you pass this question 239 00:11:42,000 --> 00:11:44,080 Speaker 4: you're able to access this type of product. 240 00:11:44,160 --> 00:11:45,920 Speaker 3: Is it about net worth or is it it's. 241 00:11:45,800 --> 00:11:48,360 Speaker 4: About your knowledge and understanding the risk of the product. 242 00:11:48,400 --> 00:11:50,280 Speaker 4: And I think that's a very big difference because no 243 00:11:50,280 --> 00:11:52,520 Speaker 4: matter of your networks, if you understand it, it should 244 00:11:52,600 --> 00:11:55,800 Speaker 4: give you access, not necessarily just because you have a 245 00:11:55,800 --> 00:11:56,880 Speaker 4: bigger bank account. 246 00:11:57,000 --> 00:11:59,080 Speaker 1: John, we just have about forty fifty seconds here. I 247 00:11:59,120 --> 00:12:02,800 Speaker 1: mean you talked about people wanting different things on the 248 00:12:02,840 --> 00:12:05,680 Speaker 1: platform as they kind of get older, right, and different 249 00:12:05,679 --> 00:12:08,000 Speaker 1: things that you guys are offering. What is the biggest 250 00:12:08,040 --> 00:12:11,720 Speaker 1: demo that demographic on the platform or how is it changing? 251 00:12:12,280 --> 00:12:12,480 Speaker 3: Yeah? 252 00:12:12,480 --> 00:12:16,280 Speaker 4: Oh, demographic still skew on the younger side in the 253 00:12:16,320 --> 00:12:20,560 Speaker 4: thirty five to forty. But we also have new products. 254 00:12:20,600 --> 00:12:23,439 Speaker 4: For example, we launch the Trump Accounts, which allows you 255 00:12:24,040 --> 00:12:28,439 Speaker 4: to create an account for your babies and your child 256 00:12:28,920 --> 00:12:31,319 Speaker 4: And I think that's something that is very important because 257 00:12:31,400 --> 00:12:34,120 Speaker 4: it's by starting to utilize this type of platform that 258 00:12:34,200 --> 00:12:37,160 Speaker 4: you're able to start thinking about the future of your children. 259 00:12:37,320 --> 00:12:38,960 Speaker 1: Are you seeing an uptick in that? Are you seeing 260 00:12:38,960 --> 00:12:39,719 Speaker 1: activity around that? 261 00:12:39,960 --> 00:12:40,160 Speaker 3: Yeah? 262 00:12:40,160 --> 00:12:43,040 Speaker 4: Absolutely, I don't have the exact number, but you will 263 00:12:43,080 --> 00:12:46,040 Speaker 4: see that a lot of our customer we're opening accounts 264 00:12:46,080 --> 00:12:48,360 Speaker 4: for their children, and I think it's important the children 265 00:12:48,400 --> 00:12:51,280 Speaker 4: needs to learn about this to start thinking about their future. 266 00:12:51,320 --> 00:12:54,160 Speaker 3: Can you open an account for my children, Carol, I 267 00:12:54,200 --> 00:12:54,880 Speaker 3: will do anything. 268 00:12:54,960 --> 00:12:59,200 Speaker 1: Thank you absolutely. By the way, robin Hood reporting second 269 00:12:59,240 --> 00:13:00,839 Speaker 1: quarter results under twenty nine. 270 00:13:01,000 --> 00:13:04,080 Speaker 3: Johan Kerbrat, Senior vice president, general manager of Crypto and 271 00:13:04,120 --> 00:13:06,240 Speaker 3: International at Robin Hood. This is Bloomberg. 272 00:13:11,440 --> 00:13:15,240 Speaker 2: You are listening to the Bloomberg Business Weekdaily podcast. Catch 273 00:13:15,320 --> 00:13:18,480 Speaker 2: us live weekday afternoons from two to five pm Eastern. 274 00:13:18,679 --> 00:13:21,720 Speaker 2: Listen on Apple CarPlay and Android Auto with the Bloomberg 275 00:13:21,800 --> 00:13:24,520 Speaker 2: Business app, or watch US live on YouTube. 276 00:13:25,400 --> 00:13:29,119 Speaker 1: Charl Schwab reported earnings the top estimates as retail investors 277 00:13:29,160 --> 00:13:31,000 Speaker 1: continued to jump in and out of the market amid 278 00:13:31,040 --> 00:13:35,480 Speaker 1: volatility sparked by geopolitical uncertainty. Company reported a record eleven 279 00:13:35,520 --> 00:13:39,120 Speaker 1: point nine million daily average revenue trades in the second quarter, 280 00:13:39,440 --> 00:13:42,520 Speaker 1: a fifty seven percent increase from a year earlier. Tim 281 00:13:42,600 --> 00:13:45,800 Speaker 1: trading revenue also rose, climbing twenty eight percent to one 282 00:13:45,800 --> 00:13:47,120 Speaker 1: point two billion dollars. 283 00:13:46,960 --> 00:13:49,400 Speaker 3: No revenue of B two up twenty one percent. Revenue 284 00:13:49,400 --> 00:13:53,319 Speaker 3: portrayed missed the Bloomberg estimate second quarter total net new assets, 285 00:13:53,760 --> 00:13:56,160 Speaker 3: hitting one hundred and eighteen point seven billion dollars. That 286 00:13:56,320 --> 00:13:57,280 Speaker 3: was a significant feat. 287 00:13:57,559 --> 00:13:59,520 Speaker 1: We caught up with Rick Worster. He's the president and 288 00:13:59,600 --> 00:14:02,520 Speaker 1: CEO Charles Schwab. He joined us here in studio to 289 00:14:02,640 --> 00:14:04,760 Speaker 1: talk about the latest financial update. 290 00:14:05,040 --> 00:14:07,439 Speaker 5: It was a really strong quarter, and what gives us 291 00:14:07,840 --> 00:14:09,960 Speaker 5: a great amount of pride and satisfaction is that our 292 00:14:09,960 --> 00:14:12,160 Speaker 5: clients continue to trust us with more and more of 293 00:14:12,200 --> 00:14:14,800 Speaker 5: their wealth, and they continue to trust us to do 294 00:14:14,840 --> 00:14:17,200 Speaker 5: more and more for them. So they're not just coming 295 00:14:17,240 --> 00:14:20,000 Speaker 5: to us for investing in trading. Certainly, they're doing lots 296 00:14:20,000 --> 00:14:21,920 Speaker 5: of that, but they're also coming to us and asking 297 00:14:21,960 --> 00:14:25,520 Speaker 5: for help with their wealth, and they're helping for tax planning, 298 00:14:25,960 --> 00:14:29,200 Speaker 5: and they're asking for lending for us to help them 299 00:14:29,240 --> 00:14:31,360 Speaker 5: with lending. And so we're doing more to help our clients' 300 00:14:31,360 --> 00:14:33,680 Speaker 5: financial lives. Their wealth is at an all time high, 301 00:14:34,280 --> 00:14:36,640 Speaker 5: and it's a great time to be in this business 302 00:14:36,680 --> 00:14:38,440 Speaker 5: to support our clients and help them thrive. 303 00:14:38,600 --> 00:14:41,360 Speaker 3: Rick, when you say that clients are trusting Charles Schwab 304 00:14:41,400 --> 00:14:44,320 Speaker 3: with more of their wealth, where is that wealth coming from? 305 00:14:44,520 --> 00:14:47,120 Speaker 3: I mean, it is essentially a zero sum game. So 306 00:14:47,560 --> 00:14:50,720 Speaker 3: are they moving it from other platforms to you? And 307 00:14:51,000 --> 00:14:52,160 Speaker 3: sort of how do you measure that? 308 00:14:52,440 --> 00:14:54,800 Speaker 5: Well, First, I think a lot of our client wealth 309 00:14:54,840 --> 00:14:57,240 Speaker 5: is being delivered by the returns you're seeing in the market. 310 00:14:57,280 --> 00:14:59,640 Speaker 5: Over the last year of the market's up twenty one 311 00:14:59,720 --> 00:15:02,680 Speaker 5: ish I believe through June thirty and our client assets 312 00:15:02,720 --> 00:15:05,200 Speaker 5: are up about twenty two percent, So they've really participated. 313 00:15:05,240 --> 00:15:08,320 Speaker 5: Their wealth has grown. I think where their additional dollars 314 00:15:08,400 --> 00:15:11,440 Speaker 5: come from is their employment activities. Maybe they sell a house, 315 00:15:11,600 --> 00:15:15,840 Speaker 5: other investment activities outside of schwab, But with employment so strong, 316 00:15:16,160 --> 00:15:19,320 Speaker 5: it's not surprising and the market doing well, not surprising 317 00:15:19,320 --> 00:15:21,520 Speaker 5: that they continue to bring us a fair amount of assets. 318 00:15:21,720 --> 00:15:24,080 Speaker 5: The other place we see it is that we do 319 00:15:24,160 --> 00:15:28,520 Speaker 5: a lot to serve independent advisors, and independent advisors as 320 00:15:28,560 --> 00:15:31,720 Speaker 5: a group are really taking share of the advice market, 321 00:15:31,840 --> 00:15:34,160 Speaker 5: and so as they win and they bring more assets 322 00:15:34,160 --> 00:15:36,280 Speaker 5: to us, we benefit from growth. 323 00:15:36,480 --> 00:15:38,880 Speaker 1: What are they trading and what are they continuing to trade. 324 00:15:38,880 --> 00:15:41,520 Speaker 1: I'm always curious about what exactly you're seeing across the platform. 325 00:15:41,560 --> 00:15:43,640 Speaker 5: Yeah, it's been pretty interesting. Actually, I'll highlight a couple 326 00:15:43,600 --> 00:15:46,360 Speaker 5: of things. Number one, which is fascinating to me is 327 00:15:46,360 --> 00:15:48,840 Speaker 5: that we saw three and a half times more volume 328 00:15:49,280 --> 00:15:52,720 Speaker 5: on down days in the market ah, which means that 329 00:15:52,720 --> 00:15:55,200 Speaker 5: they're buying the dip okay. The other thing we've seen 330 00:15:55,400 --> 00:15:58,880 Speaker 5: is a rotation, so they went from really interest in 331 00:15:58,880 --> 00:16:01,480 Speaker 5: the mag seven to more on the AI trade and 332 00:16:01,480 --> 00:16:04,600 Speaker 5: that's been a driver of interest for our clients. And 333 00:16:04,680 --> 00:16:07,120 Speaker 5: then the final thing I'd say is that because of 334 00:16:07,240 --> 00:16:10,600 Speaker 5: some of the geopolitical risk in the markets, they are 335 00:16:10,880 --> 00:16:13,960 Speaker 5: more actively trading. So we see more frequent trading, but 336 00:16:14,000 --> 00:16:17,360 Speaker 5: the trade sizes are often smaller, and so they're making 337 00:16:17,440 --> 00:16:19,920 Speaker 5: more incremental trades because they're not exactly sure what's going 338 00:16:19,960 --> 00:16:22,400 Speaker 5: to happen with the geopolitical situation. So those are three 339 00:16:22,440 --> 00:16:24,600 Speaker 5: of the themes that we've seen with our retail traders. 340 00:16:24,640 --> 00:16:27,120 Speaker 3: How sustainable are these themes? I mean the Wall Street Journal, 341 00:16:27,160 --> 00:16:30,120 Speaker 3: I think the headline was the stock trading boom is 342 00:16:30,120 --> 00:16:33,400 Speaker 3: here to stay, citing you and your comments. Why do 343 00:16:33,400 --> 00:16:34,880 Speaker 3: you believe it's here to stay? Why do you think 344 00:16:34,880 --> 00:16:35,640 Speaker 3: it's sustainable? 345 00:16:35,800 --> 00:16:37,440 Speaker 5: Well, a couple of things. I think they're great for 346 00:16:37,520 --> 00:16:40,560 Speaker 5: our country because the more people invest at a young age, 347 00:16:40,800 --> 00:16:42,840 Speaker 5: I think the better off they are over the long run. 348 00:16:43,200 --> 00:16:46,080 Speaker 5: And we have seen a real increase in young investors. 349 00:16:46,760 --> 00:16:49,440 Speaker 5: Gen Z is forty five percent more likely to invest 350 00:16:49,440 --> 00:16:51,920 Speaker 5: by the age of twenty one than the prior generation, 351 00:16:52,440 --> 00:16:55,160 Speaker 5: so we have that. I think the second structural change 352 00:16:55,200 --> 00:16:57,800 Speaker 5: is when we went to zero on commissions and then 353 00:16:57,840 --> 00:17:00,680 Speaker 5: all the other major brokers followed. I just took away 354 00:17:00,720 --> 00:17:04,240 Speaker 5: the last barrier for investors. For people that were wealthy 355 00:17:04,240 --> 00:17:07,520 Speaker 5: and trading in hundreds of thousands, the five dollars commission 356 00:17:07,520 --> 00:17:09,520 Speaker 5: didn't mean much, but for the person who had five 357 00:17:09,560 --> 00:17:12,240 Speaker 5: thousand or a thousand, that was a barrier, and now 358 00:17:12,280 --> 00:17:14,840 Speaker 5: that's no longer a barrier. I also think AI is 359 00:17:14,880 --> 00:17:18,560 Speaker 5: helping people get more comfortable researching stocks and taking positions 360 00:17:18,600 --> 00:17:21,919 Speaker 5: and being an investor and learning about the power of compounding. 361 00:17:22,160 --> 00:17:24,359 Speaker 5: So I think it's all adding up to just more engagement. 362 00:17:24,720 --> 00:17:27,520 Speaker 5: We've seen the highest level of stock ownership of stocks 363 00:17:28,000 --> 00:17:29,800 Speaker 5: that we've seen in the last twenty years, so it's 364 00:17:29,840 --> 00:17:31,800 Speaker 5: great to see that kind of interest in market, so 365 00:17:31,880 --> 00:17:35,000 Speaker 5: you all get to participate in this. The power of 366 00:17:35,040 --> 00:17:37,679 Speaker 5: compounding is a great thing for investors, and the more 367 00:17:37,680 --> 00:17:39,439 Speaker 5: and more people that do that, the better off our 368 00:17:39,480 --> 00:17:40,000 Speaker 5: country is. 369 00:17:40,160 --> 00:17:42,480 Speaker 1: So you talked about what clients are asking for, Rick, 370 00:17:42,720 --> 00:17:45,439 Speaker 1: So do they want more sophisticated investments or are they 371 00:17:45,760 --> 00:17:47,880 Speaker 1: they're doing just fine with stocks. Are they pretty happy 372 00:17:47,920 --> 00:17:48,159 Speaker 1: with it? 373 00:17:48,400 --> 00:17:48,600 Speaker 3: Yeah. 374 00:17:48,920 --> 00:17:51,040 Speaker 5: What's great is we've got clients of all stripes and 375 00:17:51,080 --> 00:17:53,800 Speaker 5: all different well sizes. One of the real themes that 376 00:17:53,840 --> 00:17:57,399 Speaker 5: we've seen from our more wealthy clients recently is a 377 00:17:57,440 --> 00:18:00,479 Speaker 5: high degree of interest in tax related strategies. We've got 378 00:18:00,480 --> 00:18:02,959 Speaker 5: a lot of clients that have built up large positions, 379 00:18:03,400 --> 00:18:07,600 Speaker 5: often concentrated positions, and they're wanting to manage the capital 380 00:18:07,600 --> 00:18:09,879 Speaker 5: gain associated with this. The other thing we're seeing is 381 00:18:09,920 --> 00:18:12,720 Speaker 5: a real increase in pledged asset loans. So people have 382 00:18:12,720 --> 00:18:15,840 Speaker 5: built up wealth in a small number of stocks, they 383 00:18:15,880 --> 00:18:17,320 Speaker 5: want to buy a house, they want to put their 384 00:18:17,400 --> 00:18:19,359 Speaker 5: kid through college, and they don't want to have to 385 00:18:19,400 --> 00:18:21,840 Speaker 5: sell that position. What they're doing is they're taking out 386 00:18:21,840 --> 00:18:23,720 Speaker 5: a pledged asset lines so they're not having to sell 387 00:18:23,720 --> 00:18:29,000 Speaker 5: that position. So between tax aware strategies and pledged asset lines, 388 00:18:29,040 --> 00:18:32,120 Speaker 5: we're really seeing people be thoughtful about not paying big 389 00:18:32,119 --> 00:18:32,800 Speaker 5: capital gains. 390 00:18:32,960 --> 00:18:35,280 Speaker 3: Let's talk a little bit about SpaceX, because in your 391 00:18:35,280 --> 00:18:38,000 Speaker 3: commentary said you had a record trading day on the 392 00:18:38,080 --> 00:18:41,879 Speaker 3: day of the SpaceX IPO. I'm just wondering what you 393 00:18:42,000 --> 00:18:44,840 Speaker 3: learned from that to sort of prepare you and the 394 00:18:44,880 --> 00:18:48,840 Speaker 3: team for what many think is the day that Anthropic 395 00:18:49,000 --> 00:18:51,200 Speaker 3: will go public in the near future and open AI 396 00:18:51,359 --> 00:18:51,959 Speaker 3: will go publicly. 397 00:18:52,080 --> 00:18:53,280 Speaker 1: And I thought you were going to ask them about 398 00:18:53,280 --> 00:18:56,800 Speaker 1: the unlocked but we'll get to that next SpaceX. 399 00:18:57,359 --> 00:18:59,119 Speaker 5: It's so interesting to have been a part of this. 400 00:18:59,440 --> 00:19:01,960 Speaker 5: We've been around for fifty years and we've seen lots 401 00:19:02,000 --> 00:19:04,359 Speaker 5: of bear markets, lots of ball markets, the Internet boom, 402 00:19:04,440 --> 00:19:07,480 Speaker 5: all this stuff. The heaviest day of call volume we've 403 00:19:07,480 --> 00:19:10,240 Speaker 5: ever seen in the history of the firm was SpaceX. 404 00:19:10,280 --> 00:19:12,520 Speaker 1: Were you surprised? Was your team surprised? 405 00:19:12,560 --> 00:19:14,640 Speaker 5: We weren't surprised. We knew it would be a busy day, 406 00:19:14,680 --> 00:19:16,920 Speaker 5: but to be a record day in the top few 407 00:19:17,000 --> 00:19:19,080 Speaker 5: days we've ever had in terms of client interest, it's 408 00:19:19,119 --> 00:19:23,000 Speaker 5: pretty remarkable over one company, So that's great. It just 409 00:19:23,040 --> 00:19:25,679 Speaker 5: shows how engaged the retail investor is. And you know, 410 00:19:25,680 --> 00:19:27,720 Speaker 5: our clients bought it. They tried to buy as much 411 00:19:27,720 --> 00:19:29,640 Speaker 5: as they can, and you know that what they received 412 00:19:29,680 --> 00:19:32,480 Speaker 5: relative to what they put in probably wasn't what all 413 00:19:32,520 --> 00:19:35,359 Speaker 5: of them wanted. And that's probably our learnings is really 414 00:19:35,680 --> 00:19:37,359 Speaker 5: to be really clear about. 415 00:19:37,400 --> 00:19:39,840 Speaker 3: Like demand was higher from your clients for the IPO, 416 00:19:39,960 --> 00:19:41,000 Speaker 3: and they weren't able to get it. 417 00:19:40,960 --> 00:19:43,920 Speaker 5: All demand was far higher the level of retail interest. 418 00:19:44,000 --> 00:19:46,639 Speaker 5: I've never seen a level of retail interest like this 419 00:19:46,720 --> 00:19:49,200 Speaker 5: in an IPO or anything. It was off the charts, 420 00:19:49,200 --> 00:19:52,200 Speaker 5: and as a result, not everyone got the allocation they wanted. Now, 421 00:19:52,240 --> 00:19:53,880 Speaker 5: one thing we did do is we made sure everyone 422 00:19:53,920 --> 00:19:56,320 Speaker 5: got something, and so everyone walked away with some shares 423 00:19:56,359 --> 00:19:59,679 Speaker 5: and with the action in the stock. People who had 424 00:19:59,680 --> 00:20:01,840 Speaker 5: a chance to buy it actually below the stock price, 425 00:20:01,840 --> 00:20:04,159 Speaker 5: So hopefully those didn't get filled have been out there 426 00:20:04,200 --> 00:20:05,200 Speaker 5: buying if it's of interest. 427 00:20:05,400 --> 00:20:07,560 Speaker 1: Are they still buying because you know, we've seen certainly 428 00:20:07,680 --> 00:20:10,639 Speaker 1: the share price go below the IPO price for SpaceX. 429 00:20:10,680 --> 00:20:13,440 Speaker 1: We've got the unlocked coming August six, that's gonna be 430 00:20:13,440 --> 00:20:16,320 Speaker 1: two days after the company reports earnings. How are you 431 00:20:16,359 --> 00:20:17,879 Speaker 1: thinking about that or preparing for that? 432 00:20:18,080 --> 00:20:20,880 Speaker 5: Yeah, the retail investors still buying SpaceX. We still see 433 00:20:20,960 --> 00:20:24,920 Speaker 5: volume and it's largely one sided. So lots of activity 434 00:20:24,920 --> 00:20:29,000 Speaker 5: and interest in SpaceX. And maybe we should move our 435 00:20:29,080 --> 00:20:31,560 Speaker 5: headquarters to the space might be good for evaluation. 436 00:20:31,920 --> 00:20:32,600 Speaker 1: He's working on it. 437 00:20:32,680 --> 00:20:36,439 Speaker 3: He's working or go all in on AI. Right. Prediction 438 00:20:36,560 --> 00:20:39,720 Speaker 3: markets We always ask you about prediction markets and sort 439 00:20:39,760 --> 00:20:41,600 Speaker 3: of you know you've talked to us about the difference 440 00:20:41,640 --> 00:20:44,320 Speaker 3: and what you see as gambling versus what you see 441 00:20:44,359 --> 00:20:46,879 Speaker 3: as being useful prediction markets. Can you give us a 442 00:20:46,960 --> 00:20:50,160 Speaker 3: date on when and what schwap clients we'll see. 443 00:20:50,240 --> 00:20:54,200 Speaker 5: Yeah, we're working with the CBOE to make binary options available, 444 00:20:54,200 --> 00:20:56,399 Speaker 5: which would allow you to take a position on the 445 00:20:56,440 --> 00:20:59,160 Speaker 5: S and P five hundred. It's possible that may extend 446 00:20:59,160 --> 00:21:05,480 Speaker 5: into other financial related events like KPIs or certain macroeconomic indicators. 447 00:21:05,760 --> 00:21:08,280 Speaker 5: I think we're open to anything that's you can make 448 00:21:08,320 --> 00:21:11,120 Speaker 5: a link to a client's portfolios. We serve a lot 449 00:21:11,119 --> 00:21:14,119 Speaker 5: of active and very engaged traders. We want to make 450 00:21:14,160 --> 00:21:17,040 Speaker 5: sure what they have and need to be successful. So 451 00:21:17,359 --> 00:21:18,960 Speaker 5: that's where we're looking at. We don't have a timeline. 452 00:21:18,960 --> 00:21:21,440 Speaker 5: We are actively working on it. The CBOE is as well. 453 00:21:21,480 --> 00:21:24,040 Speaker 5: We will follow them and we're excited to be in 454 00:21:24,040 --> 00:21:26,200 Speaker 5: that marketplace. But don't look to be able to bet 455 00:21:26,240 --> 00:21:29,480 Speaker 5: on Taylor Swift's first child when that child is born 456 00:21:29,760 --> 00:21:30,520 Speaker 5: on our platform. 457 00:21:30,680 --> 00:21:31,960 Speaker 3: But when we speak to you in October, do you 458 00:21:32,000 --> 00:21:33,040 Speaker 3: think they'll have launched yet. 459 00:21:33,480 --> 00:21:35,400 Speaker 5: Well, we'll see in October. I mean we're working hard 460 00:21:35,440 --> 00:21:38,760 Speaker 5: at it. Cboees We're still dependent on their timeline, so 461 00:21:38,800 --> 00:21:40,760 Speaker 5: I can't get I'd love to give you a timeline, 462 00:21:40,760 --> 00:21:41,960 Speaker 5: but I really can at this point. 463 00:21:42,040 --> 00:21:43,600 Speaker 1: What if Taylor has an idea for the S and 464 00:21:43,600 --> 00:21:45,120 Speaker 1: P five hundred by the end of the year, would 465 00:21:45,160 --> 00:21:45,640 Speaker 1: that be a bet? 466 00:21:46,440 --> 00:21:48,439 Speaker 5: That would be if it's related to the S and 467 00:21:48,440 --> 00:21:49,760 Speaker 5: P five hundred, we could make it work. 468 00:21:50,200 --> 00:21:51,960 Speaker 1: What about crypto? What can you tell us about the 469 00:21:51,960 --> 00:21:55,040 Speaker 1: early reception to the Spot crypto trading roll out? What 470 00:21:55,040 --> 00:21:56,200 Speaker 1: do you guys see it well? 471 00:21:56,240 --> 00:21:58,560 Speaker 5: For us, you know, crypto's an important part of being 472 00:21:58,560 --> 00:22:00,880 Speaker 5: able to offer everything in our client and our clients 473 00:22:00,920 --> 00:22:02,920 Speaker 5: are already engaged in crypto in a big way. They've 474 00:22:02,920 --> 00:22:06,640 Speaker 5: bought the ETF, they participate in futures, they are invested 475 00:22:06,680 --> 00:22:09,840 Speaker 5: in crypto in many different ways. At Schwab, we're excited 476 00:22:09,960 --> 00:22:11,840 Speaker 5: for them if they have crypto outside the fern to 477 00:22:11,880 --> 00:22:14,040 Speaker 5: be able to bring it in. We'll make crypto available 478 00:22:14,080 --> 00:22:16,000 Speaker 5: for transfers by the end of the year. You can 479 00:22:16,040 --> 00:22:18,359 Speaker 5: buy spot crypto now with cash on our platform and 480 00:22:18,359 --> 00:22:20,879 Speaker 5: we're excited about that. You know, the level of interest 481 00:22:20,920 --> 00:22:22,959 Speaker 5: in crypto right now I think is lower than it 482 00:22:23,000 --> 00:22:25,520 Speaker 5: has been. It's really declined and full back yet, you 483 00:22:25,560 --> 00:22:28,120 Speaker 5: know some of that's related to the price action. I'm 484 00:22:28,160 --> 00:22:31,360 Speaker 5: sure there's other reasons, but the main point for us 485 00:22:31,520 --> 00:22:33,240 Speaker 5: is if our clients want it, we want to have it, 486 00:22:33,280 --> 00:22:35,280 Speaker 5: regardless of what the interest level is. 487 00:22:35,400 --> 00:22:36,960 Speaker 1: I've got to ask you a question, and we kicked 488 00:22:37,000 --> 00:22:39,560 Speaker 1: this around in the newsroom because while we're talking about crypto, 489 00:22:40,359 --> 00:22:42,000 Speaker 1: a lot has come up with the president and his 490 00:22:42,160 --> 00:22:45,480 Speaker 1: financial disclosures, and Schwab is one of the investment counts, 491 00:22:45,480 --> 00:22:48,400 Speaker 1: along with UBS and JP Morgan, And I'm just curious 492 00:22:48,400 --> 00:22:51,320 Speaker 1: as people kind of look at this, do you think 493 00:22:51,359 --> 00:22:55,200 Speaker 1: at some point Schwab might be asked to either testify 494 00:22:55,240 --> 00:22:59,120 Speaker 1: before Congress about the president's accounts or anything. Has any 495 00:22:59,119 --> 00:22:59,800 Speaker 1: of that come up? 496 00:23:00,160 --> 00:23:02,120 Speaker 5: You know, we can't talk about who our clients are, 497 00:23:02,840 --> 00:23:04,840 Speaker 5: but but what I will say is what's been reported 498 00:23:05,400 --> 00:23:10,760 Speaker 5: is that he uses a tax strategy himself, direct direct indexing, 499 00:23:10,760 --> 00:23:14,680 Speaker 5: where you can use you basically replicate an index by owning, 500 00:23:14,720 --> 00:23:17,280 Speaker 5: say three hundred stocks that are going to give you 501 00:23:17,280 --> 00:23:20,000 Speaker 5: the index return instead of holding say one position in 502 00:23:20,080 --> 00:23:22,760 Speaker 5: ETF And so if the market goes up twenty percent 503 00:23:22,800 --> 00:23:25,080 Speaker 5: a year, but you hold three hundred stocks and some 504 00:23:25,160 --> 00:23:27,879 Speaker 5: have gone down, you can sell those and replace them 505 00:23:27,920 --> 00:23:30,399 Speaker 5: with another. If Coca Cola went down over a short window, 506 00:23:30,400 --> 00:23:32,640 Speaker 5: you sell it, you put pepsi in there. You're still 507 00:23:32,640 --> 00:23:35,399 Speaker 5: tracking the index, but you've harvested a loss. It's a 508 00:23:35,560 --> 00:23:39,399 Speaker 5: very thoughtful strategy for a wealthy investor to use, and 509 00:23:39,480 --> 00:23:41,520 Speaker 5: I would just say some of the commentary around this 510 00:23:41,640 --> 00:23:44,480 Speaker 5: I did that he's timing the markets in some way 511 00:23:44,480 --> 00:23:46,959 Speaker 5: because he's sold a stock before or after he met 512 00:23:47,160 --> 00:23:51,200 Speaker 5: These strategies are run on a discretionary basis by professional 513 00:23:51,200 --> 00:23:55,040 Speaker 5: money managers with no influence from the account holder, and 514 00:23:55,080 --> 00:23:57,600 Speaker 5: the level of trading in them is very high because 515 00:23:57,600 --> 00:23:59,720 Speaker 5: they're constantly trying to pick up any loss in a 516 00:23:59,760 --> 00:24:01,600 Speaker 5: secut curity and replace it with another one. So I 517 00:24:01,640 --> 00:24:03,840 Speaker 5: think some of the reporting that tries to link this 518 00:24:03,920 --> 00:24:07,119 Speaker 5: in the farious behavior, I think is just misplaced, and. 519 00:24:07,000 --> 00:24:08,359 Speaker 1: To be fair like kind of I feel like I 520 00:24:08,440 --> 00:24:10,240 Speaker 1: left that an important line. It does feel like it's 521 00:24:10,240 --> 00:24:12,479 Speaker 1: a lot of political backlash and as we see kind 522 00:24:12,520 --> 00:24:14,720 Speaker 1: of things make their way through the news cycle. 523 00:24:15,760 --> 00:24:18,720 Speaker 5: Well, one of the things that we were pleased with 524 00:24:18,880 --> 00:24:21,640 Speaker 5: was how the reporting might have shifted from I think 525 00:24:21,680 --> 00:24:24,960 Speaker 5: the original intent that the reporting was seeking to when 526 00:24:25,200 --> 00:24:27,480 Speaker 5: the facts came out and things were explained. I think 527 00:24:27,480 --> 00:24:29,800 Speaker 5: the reporting was pretty accurate in terms of explaining what 528 00:24:29,840 --> 00:24:33,680 Speaker 5: these strategies do and why you might have active levels 529 00:24:33,680 --> 00:24:35,080 Speaker 5: of trading in a strategy like this. 530 00:24:35,320 --> 00:24:38,120 Speaker 1: Appreciate that. Just to wrap up here, we're in this environment, Rick, 531 00:24:38,200 --> 00:24:40,760 Speaker 1: where it feels like fomo in terms of a lot 532 00:24:40,760 --> 00:24:44,159 Speaker 1: of the trades and kind of chasing certain things. It 533 00:24:44,200 --> 00:24:47,159 Speaker 1: also feels like there's a lot of nervousness out there 534 00:24:47,440 --> 00:24:49,840 Speaker 1: when you look at the environment net net, I mean, 535 00:24:50,040 --> 00:24:52,199 Speaker 1: coming off of this quarter, how would you describe the 536 00:24:52,280 --> 00:24:53,160 Speaker 1: environment right now? 537 00:24:53,240 --> 00:24:56,000 Speaker 5: I still think clients are bullish, okay, but there is 538 00:24:56,080 --> 00:24:58,840 Speaker 5: some caution and you do see them taking smaller positions 539 00:24:58,880 --> 00:25:01,280 Speaker 5: than they normally would and maybe being a little more 540 00:25:01,320 --> 00:25:03,439 Speaker 5: anxious about it. But all in all, they're still bullish. 541 00:25:03,480 --> 00:25:07,640 Speaker 5: They're buying on the dips, They're going into the AI stocks. 542 00:25:07,720 --> 00:25:10,480 Speaker 5: Areas of the market that you have certainly have higher 543 00:25:10,520 --> 00:25:13,240 Speaker 5: valuations to them. So they're not shying away from risk 544 00:25:13,280 --> 00:25:15,480 Speaker 5: and they're bullish, but they're doing some with an element 545 00:25:15,520 --> 00:25:15,880 Speaker 5: of caution. 546 00:25:16,160 --> 00:25:18,080 Speaker 1: That of course was Rick Worcester. He is the president 547 00:25:18,080 --> 00:25:19,520 Speaker 1: and CEO of Charles Schwab. 548 00:25:24,680 --> 00:25:28,679 Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 549 00:25:28,760 --> 00:25:32,240 Speaker 2: live weekday afternoons from two to five pm Eastern. Listen 550 00:25:32,240 --> 00:25:35,000 Speaker 2: on Apple CarPlay and the Android Auto with the Bloomberg 551 00:25:35,040 --> 00:25:38,280 Speaker 2: Business app, or watch us live on YouTube. 552 00:25:38,720 --> 00:25:42,080 Speaker 1: WEMW pulling out of this year's Paris Car Show as 553 00:25:42,080 --> 00:25:44,760 Speaker 1: it's new CEO cut costs following a major profit warning. 554 00:25:45,040 --> 00:25:48,239 Speaker 1: Also on the Bloomberg Tesla's cyber truck maybe on its 555 00:25:48,280 --> 00:25:51,439 Speaker 1: way to becoming viewed as the greatest automotive flop of 556 00:25:51,480 --> 00:25:54,680 Speaker 1: all time, similar to the Ford Etzel, which was introduced 557 00:25:54,720 --> 00:25:56,679 Speaker 1: back in nineteen fifty seven. 558 00:25:56,760 --> 00:25:58,520 Speaker 3: There is always you know it, see a lot of 559 00:25:58,520 --> 00:25:59,680 Speaker 3: them on the road today. 560 00:26:01,200 --> 00:26:04,120 Speaker 1: No, always a lot going on in the global auto industry, 561 00:26:04,119 --> 00:26:06,280 Speaker 1: covering all the twists and turns, the tight curves of 562 00:26:06,320 --> 00:26:09,800 Speaker 1: the global auto industry, from bailouts and buyouts Elon and 563 00:26:09,880 --> 00:26:12,640 Speaker 1: Nevis to China's coming of age. Bloomberg's Keith Mountain, who 564 00:26:12,640 --> 00:26:15,119 Speaker 1: began his career back in nineteen eighty five, coming to 565 00:26:15,160 --> 00:26:17,600 Speaker 1: Bloomberg in two thousand and nine amid the Great Financial 566 00:26:17,640 --> 00:26:20,200 Speaker 1: Crisis and the Big three auto bailout. He has written 567 00:26:20,240 --> 00:26:22,080 Speaker 1: about all of it and more. We are delighted to 568 00:26:22,080 --> 00:26:23,840 Speaker 1: have him in New York. His home perch has been 569 00:26:24,440 --> 00:26:27,600 Speaker 1: in the Detroit area, but he is getting ready to 570 00:26:28,040 --> 00:26:31,400 Speaker 1: wrap up his valued and very respected career here at Bloomberg. 571 00:26:31,400 --> 00:26:33,679 Speaker 1: We can't even believe we're not going to be like 572 00:26:34,119 --> 00:26:35,680 Speaker 1: call Keith, we talk to him about it. 573 00:26:35,680 --> 00:26:37,040 Speaker 3: I can't believe they're letting you retire. 574 00:26:37,280 --> 00:26:39,880 Speaker 6: Yeah, yeah, yeah, Well you know it's time. That's time. 575 00:26:40,400 --> 00:26:44,040 Speaker 6: Every good career, career has its moment and you know, 576 00:26:44,320 --> 00:26:45,920 Speaker 6: leave out on a high note. 577 00:26:46,000 --> 00:26:48,120 Speaker 3: Well, we are really happy for you. It is sad 578 00:26:48,160 --> 00:26:50,000 Speaker 3: for us, as Carol mentioned, and we do want to 579 00:26:50,040 --> 00:26:52,320 Speaker 3: start at the beginning of your career, all the way 580 00:26:52,359 --> 00:26:56,120 Speaker 3: back in nineteen eighty five, forty one years ago. Take 581 00:26:56,200 --> 00:26:58,280 Speaker 3: us back to that time. You were at the Indianapolis 582 00:26:58,320 --> 00:27:00,439 Speaker 3: News and it's where you began your career. And I 583 00:27:00,440 --> 00:27:03,480 Speaker 3: think it's so notable because it's like that was when 584 00:27:03,680 --> 00:27:06,480 Speaker 3: so many US automakers were concerned about Japanese. 585 00:27:07,040 --> 00:27:08,640 Speaker 6: Yeah, so that was the big story in that time. 586 00:27:08,840 --> 00:27:10,679 Speaker 6: The way I got the auto beat is my business 587 00:27:10,760 --> 00:27:12,960 Speaker 6: editor at the Indianapolis News, this guy named Ed Lawler. 588 00:27:13,440 --> 00:27:16,160 Speaker 6: He said, so I grew up in Detroit. He said, 589 00:27:16,200 --> 00:27:18,080 Speaker 6: so you're from Detroit, so then you'll cover the auto 590 00:27:18,080 --> 00:27:21,520 Speaker 6: industry and it's like okay, but yeah, so you know, 591 00:27:22,320 --> 00:27:24,760 Speaker 6: it was all about the Japanese coming to American in 592 00:27:24,760 --> 00:27:27,439 Speaker 6: those days. Sounds like an echo, doesn't it. And so 593 00:27:27,520 --> 00:27:29,399 Speaker 6: one of the big stories I was covering at that 594 00:27:29,440 --> 00:27:32,199 Speaker 6: time was Toyota was looking for the location of their 595 00:27:32,240 --> 00:27:35,520 Speaker 6: first American factory India. All the states were, you know, 596 00:27:35,640 --> 00:27:39,400 Speaker 6: vying for it, Indiana included. It ended up going to Georgetown, Kentucky. 597 00:27:39,520 --> 00:27:42,560 Speaker 6: So I was there for the groundbreaking of that one 598 00:27:42,600 --> 00:27:46,560 Speaker 6: and interviewing the governor at the time, Martha Laine Collins, 599 00:27:46,720 --> 00:27:49,800 Speaker 6: and yeah, you know, and now here we are with 600 00:27:49,880 --> 00:27:51,840 Speaker 6: the when will the Chinese come to America and where 601 00:27:51,880 --> 00:27:54,159 Speaker 6: will they locate? And the states want them? And you 602 00:27:54,160 --> 00:27:55,320 Speaker 6: know it'll be very similar. 603 00:27:55,320 --> 00:27:57,440 Speaker 1: Do you remember what car are you were driving? Yeah? 604 00:27:57,480 --> 00:28:00,840 Speaker 6: In those days I had a Renault Alliance Oh wow, 605 00:28:00,840 --> 00:28:04,560 Speaker 6: made by UAW Hands and Kenosha Wisconsin, when Chrysler and 606 00:28:04,600 --> 00:28:06,040 Speaker 6: Renot had a joint venture. 607 00:28:06,160 --> 00:28:08,200 Speaker 1: Well, I'm so glad you mentioned Chrysler because one of 608 00:28:08,280 --> 00:28:12,440 Speaker 1: the icons or iconic figures of the auto industry is 609 00:28:12,520 --> 00:28:15,520 Speaker 1: Leiah Coca and we actually have a picture on nineteen 610 00:28:15,560 --> 00:28:18,200 Speaker 1: eighty nine of you with him. 611 00:28:18,400 --> 00:28:18,640 Speaker 6: Yeah. 612 00:28:19,000 --> 00:28:22,720 Speaker 1: Tell us about this moment. For those on radio, it 613 00:28:22,760 --> 00:28:27,080 Speaker 1: is Keith Norton a few years ago, a couple. 614 00:28:26,760 --> 00:28:31,399 Speaker 6: Of decades more hair, no mustache, though Leiah Coca was 615 00:28:31,840 --> 00:28:35,840 Speaker 6: like he was iconic. Yeah no, so that's obviously a 616 00:28:35,880 --> 00:28:39,280 Speaker 6: scrum and I'm clearly laughing too hard to try and 617 00:28:39,280 --> 00:28:40,240 Speaker 6: impress the chairman. 618 00:28:41,320 --> 00:28:42,200 Speaker 3: But no, he was something. 619 00:28:42,240 --> 00:28:45,360 Speaker 6: I mean, I remember when he came back from Japan, 620 00:28:46,040 --> 00:28:48,800 Speaker 6: and this is when the original George Bush had gotten 621 00:28:48,840 --> 00:28:51,080 Speaker 6: sick on the lap of the Prime Minister of Japan, 622 00:28:51,240 --> 00:28:54,040 Speaker 6: or if you remember that moment in history. So Leito 623 00:28:54,160 --> 00:28:55,880 Speaker 6: comes back and he gives a speech. 624 00:28:55,960 --> 00:29:00,160 Speaker 1: She'ms so charming amid the geopolitical backdrop today, but go ahead, it. 625 00:29:00,120 --> 00:29:02,720 Speaker 6: Goes back and gives a speech the Detroit Economic Club 626 00:29:02,760 --> 00:29:05,080 Speaker 6: all about how we should essentially, and he used this 627 00:29:05,200 --> 00:29:08,360 Speaker 6: kind of verbiage go to war with the Japanese, which 628 00:29:08,360 --> 00:29:10,120 Speaker 6: you know, given the whole World War two thing, was 629 00:29:10,160 --> 00:29:13,280 Speaker 6: probably not the right way to put it. But but 630 00:29:13,360 --> 00:29:14,360 Speaker 6: that was Leiah Coca. 631 00:29:14,440 --> 00:29:16,760 Speaker 1: He pulled no punches and had to deal with his 632 00:29:16,800 --> 00:29:17,400 Speaker 1: own crisis. 633 00:29:17,400 --> 00:29:20,480 Speaker 6: Though absolutely, I mean he kind of he saved not 634 00:29:20,680 --> 00:29:23,360 Speaker 6: more than kind of. He definitely saved Chrysler. They were 635 00:29:23,360 --> 00:29:27,120 Speaker 6: in dire straits. And remember he got fired by Henry 636 00:29:27,120 --> 00:29:30,480 Speaker 6: Ford the second right, Hank the Deuce fired him. Ayakoca's 637 00:29:30,520 --> 00:29:34,680 Speaker 6: the father of Mustang, and then he, you know, rehabilitated 638 00:29:34,760 --> 00:29:37,960 Speaker 6: himself by saving Chrysler. It was a great time to 639 00:29:37,960 --> 00:29:41,520 Speaker 6: cover the industry because there were such swashbuckling characters in 640 00:29:41,520 --> 00:29:44,720 Speaker 6: those days. Bob Lots, all these guys that just said 641 00:29:44,800 --> 00:29:45,800 Speaker 6: what was on their minds. 642 00:29:46,720 --> 00:29:49,160 Speaker 3: It wasn't all the auto industry for you, though, some 643 00:29:49,240 --> 00:29:51,960 Speaker 3: other highlights in your career. Even before coming to Bloomberg 644 00:29:52,040 --> 00:29:54,320 Speaker 3: senior correspondent a business Week, he covered the auto industry. 645 00:29:54,360 --> 00:29:57,320 Speaker 3: Your auto reported the Detroit News before Bloomberg, though you 646 00:29:57,360 --> 00:30:00,560 Speaker 3: were Detroit bureau chief for ten years. Over at Newsweek. 647 00:30:00,600 --> 00:30:02,960 Speaker 3: We recovered the auto industry there, but also some other 648 00:30:03,000 --> 00:30:05,160 Speaker 3: stories including. 649 00:30:04,960 --> 00:30:09,760 Speaker 1: Stewart and this little known man put on the cover. 650 00:30:10,160 --> 00:30:12,080 Speaker 1: Oh yeah, he's president today, Donald Trump. 651 00:30:12,160 --> 00:30:12,320 Speaker 3: Yeah. 652 00:30:12,360 --> 00:30:15,400 Speaker 6: I spent a couple of days with the Donald and Milania. 653 00:30:15,920 --> 00:30:18,240 Speaker 6: Yeah there's the cover. Yeah, that's the one I wrote for. 654 00:30:18,200 --> 00:30:18,960 Speaker 5: That was on radio. 655 00:30:19,080 --> 00:30:22,320 Speaker 1: It says it's Donald Trump back in his apprentice days. 656 00:30:22,560 --> 00:30:25,880 Speaker 6: You're fired, right, so he was. I mean, the story 657 00:30:25,920 --> 00:30:28,360 Speaker 6: on how that ended up on the cover was this 658 00:30:28,440 --> 00:30:31,160 Speaker 6: all sounds braggy, But I was talking to Jack Welch. 659 00:30:32,240 --> 00:30:33,680 Speaker 6: I did this all on one day. I was talking 660 00:30:33,680 --> 00:30:37,080 Speaker 6: to Jack Welch, former chairman of GE, and he told 661 00:30:37,080 --> 00:30:39,880 Speaker 6: me it was his favorite show to watch. He and 662 00:30:39,920 --> 00:30:42,720 Speaker 6: Susie would watch it every night and his network, right, 663 00:30:42,760 --> 00:30:46,040 Speaker 6: it's on his network. And so then and so then 664 00:30:46,240 --> 00:30:48,200 Speaker 6: we reached out to Trump. In those days, there were 665 00:30:48,200 --> 00:30:51,080 Speaker 6: no pr people. You just called his secretary and he 666 00:30:51,120 --> 00:30:54,600 Speaker 6: gets on the phone and he told me that, in 667 00:30:54,640 --> 00:30:56,760 Speaker 6: no uncertain terms, we should put him on the cover. 668 00:30:57,520 --> 00:30:59,560 Speaker 6: And I'm like, well, right now, it's just a business story. 669 00:30:59,600 --> 00:31:01,440 Speaker 6: We're going to do business during the business section. No, 670 00:31:01,680 --> 00:31:03,720 Speaker 6: you should tell Rick Smith, who was you know, the 671 00:31:03,720 --> 00:31:06,320 Speaker 6: publisher at the time, put me on the cover. And 672 00:31:06,360 --> 00:31:09,760 Speaker 6: then when it went to the the meeting that day, 673 00:31:09,880 --> 00:31:11,760 Speaker 6: the editor said, okay, let's put him on the cover. 674 00:31:11,880 --> 00:31:14,200 Speaker 6: I called him back and he said, I'm glad you listened. 675 00:31:14,280 --> 00:31:17,200 Speaker 6: So so then we both flew to mar A Lago 676 00:31:17,240 --> 00:31:18,200 Speaker 6: and hung out for a couple days. 677 00:31:18,240 --> 00:31:20,120 Speaker 3: Well what did you find about him on that on 678 00:31:20,160 --> 00:31:23,240 Speaker 3: that trip to mar A Lago? Obviously no prediction that 679 00:31:23,240 --> 00:31:25,440 Speaker 3: he would one day become president, and so well, I 680 00:31:25,520 --> 00:31:26,040 Speaker 3: mean he was. 681 00:31:26,120 --> 00:31:29,600 Speaker 6: He was a Democrat then and and he had run 682 00:31:29,800 --> 00:31:32,240 Speaker 6: as a Democrat sort of runs more of a marketing 683 00:31:32,240 --> 00:31:36,480 Speaker 6: exercise in the in the Gore Bush election, the election 684 00:31:36,560 --> 00:31:38,600 Speaker 6: of two thousands. So we talked a little bit about that, 685 00:31:38,880 --> 00:31:42,200 Speaker 6: and he and Malania at that time were engaged. They 686 00:31:42,200 --> 00:31:43,720 Speaker 6: got married a year later, and of course Bill and 687 00:31:43,760 --> 00:31:45,680 Speaker 6: Hillary were at the wedding. There's the famous picture of 688 00:31:45,720 --> 00:31:50,520 Speaker 6: the four of them together, right times. So yeah, but yeah, 689 00:31:50,520 --> 00:31:53,080 Speaker 6: he was, you know, he was the Donald. We watched 690 00:31:53,120 --> 00:31:56,400 Speaker 6: The Apprentice together and he would, you know, turn down 691 00:31:56,440 --> 00:31:59,440 Speaker 6: the sound when it was the contestants segments, and then 692 00:31:59,480 --> 00:32:01,400 Speaker 6: when he was on, he would turn it up to 693 00:32:01,440 --> 00:32:04,040 Speaker 6: a deafening volume so no one in the room could talk. 694 00:32:05,600 --> 00:32:09,480 Speaker 1: So fascinating, like the places that being a journalist takes you, 695 00:32:09,600 --> 00:32:13,560 Speaker 1: right and to certain people. All right, let's talk to 696 00:32:13,600 --> 00:32:18,040 Speaker 1: your time at Bloomberg seventeen years. You came at what 697 00:32:18,160 --> 00:32:21,120 Speaker 1: was a really difficult time for the world, for the US, 698 00:32:21,160 --> 00:32:25,520 Speaker 1: for the financial industry and for automakers, who can forget right, 699 00:32:25,680 --> 00:32:29,800 Speaker 1: the automakers being hauled before Congress, the CEOs. 700 00:32:29,600 --> 00:32:32,560 Speaker 6: Right, the bailout. Yeah, no, it was amazing because it 701 00:32:32,640 --> 00:32:35,440 Speaker 6: was right as I was leading Newsweek and starting at Bloomberg. 702 00:32:35,480 --> 00:32:37,400 Speaker 6: When I was here from my training in New York, 703 00:32:38,400 --> 00:32:42,760 Speaker 6: Obama was being inaugurated for his first term, and you know, 704 00:32:43,240 --> 00:32:45,400 Speaker 6: George W. Bush had sort of handed them behind him 705 00:32:45,440 --> 00:32:49,000 Speaker 6: to save those companies. And famously they were all asked, 706 00:32:49,080 --> 00:32:51,040 Speaker 6: you know, they'd got in trouble for oh yeah, there 707 00:32:51,080 --> 00:32:53,080 Speaker 6: we go. They got in trouble for flying in for 708 00:32:53,160 --> 00:32:56,360 Speaker 6: the hearings and they're told they should drive in for them. 709 00:32:56,400 --> 00:32:57,240 Speaker 3: So that's what they did. 710 00:32:57,320 --> 00:33:00,360 Speaker 6: They were all asked to, you know, give up their hey, 711 00:33:00,440 --> 00:33:03,280 Speaker 6: and everybody except Alan Malalley at Ford said they would. 712 00:33:03,480 --> 00:33:08,440 Speaker 6: Alan Malalley said, yeah, I'm fine. Another ones who didn't 713 00:33:08,440 --> 00:33:09,040 Speaker 6: take the bail. 714 00:33:08,920 --> 00:33:10,160 Speaker 1: I'm just gonna say they didn't did that. 715 00:33:10,320 --> 00:33:10,520 Speaker 6: Well. 716 00:33:11,000 --> 00:33:13,560 Speaker 3: A lot has happened in the auto industry since then, 717 00:33:13,560 --> 00:33:17,120 Speaker 3: and it kind of brings us to almost two today, 718 00:33:17,480 --> 00:33:19,960 Speaker 3: the rise of evs and and the way that you know, 719 00:33:20,280 --> 00:33:23,000 Speaker 3: even conversations that we had with you on our program 720 00:33:23,080 --> 00:33:25,320 Speaker 3: in the last six years at the beginning of that, 721 00:33:25,400 --> 00:33:26,800 Speaker 3: and that's that's how long I've been doing this. That's 722 00:33:26,800 --> 00:33:29,040 Speaker 3: why I went with the six year number. At the 723 00:33:29,040 --> 00:33:30,680 Speaker 3: beginning of that, we talked to you about the huge 724 00:33:30,680 --> 00:33:33,640 Speaker 3: investments that these US companies were making in EV's, how 725 00:33:33,640 --> 00:33:37,000 Speaker 3: difficult it was to get a Ford Mocky and the 726 00:33:37,040 --> 00:33:39,360 Speaker 3: wait list that a customer would have to wait on, 727 00:33:39,480 --> 00:33:42,520 Speaker 3: and getting a lightning pickup truck, And just a few 728 00:33:42,840 --> 00:33:45,440 Speaker 3: years after that, we're learning that these investments are being 729 00:33:45,480 --> 00:33:47,680 Speaker 3: paired back and the customers just aren't there for. 730 00:33:47,640 --> 00:33:49,640 Speaker 6: These It was one of the biggest misses ever. And 731 00:33:49,720 --> 00:33:54,040 Speaker 6: I think we sometimes our view of it isn't long enough. 732 00:33:54,080 --> 00:33:56,160 Speaker 6: We think, Okay, so Trump got an office and he 733 00:33:56,240 --> 00:33:58,880 Speaker 6: took away the EV incentives and that killed the market. No, 734 00:33:58,960 --> 00:34:02,880 Speaker 6: the market was withering before he got elected. Americans just 735 00:34:03,480 --> 00:34:06,600 Speaker 6: we live in a very big country, so range anxiety 736 00:34:06,720 --> 00:34:10,759 Speaker 6: is real. It's easier in other places that are more compact, 737 00:34:11,560 --> 00:34:15,320 Speaker 6: that have a better infrastructure for recharging vehicles. So, particularly 738 00:34:15,320 --> 00:34:17,279 Speaker 6: in the vast middle of the country where I live, 739 00:34:18,000 --> 00:34:20,600 Speaker 6: you know, people just aren't sold on EV's, particularly people 740 00:34:20,640 --> 00:34:23,040 Speaker 6: who drive pickup trucks. The big bust of the whole 741 00:34:23,040 --> 00:34:26,560 Speaker 6: EV American EV cycle was putting in pickup trucks first, 742 00:34:26,640 --> 00:34:30,799 Speaker 6: because if you use an EV pickup truck to tow 743 00:34:30,920 --> 00:34:33,799 Speaker 6: or haul, the battery is depleted in no time. So 744 00:34:33,880 --> 00:34:37,680 Speaker 6: it's just not practical, So everybody has taken a step back. 745 00:34:37,920 --> 00:34:39,759 Speaker 6: I actually think in some ways Trump does them a 746 00:34:39,760 --> 00:34:42,200 Speaker 6: favor because it gives them time to regroup as long 747 00:34:42,200 --> 00:34:45,400 Speaker 6: as they keep those burials to the Chinese and hopefully 748 00:34:45,440 --> 00:34:46,800 Speaker 6: they'll come up with a better solution. 749 00:34:47,800 --> 00:34:50,000 Speaker 1: You know, we have another picture of you, I believe 750 00:34:50,040 --> 00:34:52,600 Speaker 1: with Alan Malaally and this was in two thousand and nine, 751 00:34:52,719 --> 00:34:55,759 Speaker 1: former Ford CEO. You said you reminded us he didn't 752 00:34:55,800 --> 00:34:58,600 Speaker 1: take the bail out. Then where are you, guys? 753 00:34:58,880 --> 00:35:01,560 Speaker 6: We were He was in that picture being inducted into 754 00:35:01,560 --> 00:35:04,719 Speaker 6: the Automotive Hall of Fame and we're in Detroit. 755 00:35:04,760 --> 00:35:05,320 Speaker 3: I think. 756 00:35:07,200 --> 00:35:08,239 Speaker 1: Is it two thousand and nine. 757 00:35:08,440 --> 00:35:10,200 Speaker 6: Yeah, it might be a little later than that. I 758 00:35:10,640 --> 00:35:13,279 Speaker 6: think it's more at the end of his time. But 759 00:35:13,920 --> 00:35:15,560 Speaker 6: it was in two thousand and nine that he avoided 760 00:35:15,560 --> 00:35:19,680 Speaker 6: the bailout. And you know he saved Ford along with 761 00:35:20,239 --> 00:35:23,200 Speaker 6: his boss Bill Ford. Never forget the Ford family runs forward. 762 00:35:23,360 --> 00:35:25,919 Speaker 6: So but yeah, but no, he was a rock star 763 00:35:26,160 --> 00:35:29,240 Speaker 6: and he was great to work with. And he also 764 00:35:29,360 --> 00:35:31,160 Speaker 6: was one of those guys who pulled no punches and 765 00:35:31,880 --> 00:35:33,000 Speaker 6: had things on his mind. 766 00:35:33,200 --> 00:35:35,600 Speaker 1: You know, we were thinking about you. You really you're 767 00:35:35,640 --> 00:35:37,360 Speaker 1: a lot of fun to talk to and we just 768 00:35:37,560 --> 00:35:41,920 Speaker 1: love covering this world with you. You've inspired a lot of us, 769 00:35:42,360 --> 00:35:44,640 Speaker 1: and it seems like you've also inspired someone who's very 770 00:35:44,680 --> 00:35:47,200 Speaker 1: near and dear to you, your daughter. Of another picture 771 00:35:47,200 --> 00:35:49,600 Speaker 1: we want to pull up and maybe you could tell 772 00:35:49,680 --> 00:35:50,880 Speaker 1: us a little bit about this. 773 00:35:51,120 --> 00:35:51,520 Speaker 3: That's you. 774 00:35:51,680 --> 00:35:55,000 Speaker 1: For those on radio, it's Keith obviously, and then there's 775 00:35:55,000 --> 00:35:55,480 Speaker 1: your daughter. 776 00:35:55,640 --> 00:35:59,920 Speaker 6: Yeah, that's Nora behind me and we're both scrumming Jim Farley, 777 00:36:00,000 --> 00:36:02,640 Speaker 6: who is now Ford CEO. I think that's at a 778 00:36:02,640 --> 00:36:05,279 Speaker 6: New York auto show maybe in twenty nineteen. So, yeah, 779 00:36:05,320 --> 00:36:07,640 Speaker 6: Nora has worked in different places. She was also at 780 00:36:07,640 --> 00:36:10,040 Speaker 6: the Detroit News like I was. She was the Wall 781 00:36:10,080 --> 00:36:15,479 Speaker 6: Street Journal business insider. So's she's great. And it's great 782 00:36:15,480 --> 00:36:20,040 Speaker 6: to have your your child in the days with you. So's, 783 00:36:21,200 --> 00:36:22,759 Speaker 6: she's wonderful. And that was a great moment, and that 784 00:36:22,880 --> 00:36:27,680 Speaker 6: was taken. That picture was taken by Ford's chief communications officer, 785 00:36:28,080 --> 00:36:31,799 Speaker 6: Mark Truby. He was monitoring the scrum and he saw 786 00:36:31,840 --> 00:36:36,120 Speaker 6: that shot and got our voices, our faces of skepticism. 787 00:36:37,080 --> 00:36:39,480 Speaker 1: Which you sometimes have to do when you're covering an industry. 788 00:36:40,440 --> 00:36:42,920 Speaker 1: We've got to wrap up. But as you look forward 789 00:36:44,120 --> 00:36:46,439 Speaker 1: to your world and are you going to be keeping 790 00:36:46,440 --> 00:36:47,719 Speaker 1: an eye on the auto industry. 791 00:36:47,840 --> 00:36:48,960 Speaker 6: Oh me, I live in Detroit. 792 00:36:49,000 --> 00:36:49,600 Speaker 3: It's hard not to. 793 00:36:49,880 --> 00:36:51,680 Speaker 6: Yeah, well, what's your thoughts? 794 00:36:51,680 --> 00:36:53,520 Speaker 1: Like you've only got thirty to forty seconds. 795 00:36:53,200 --> 00:36:58,520 Speaker 6: Like, yeah, I think it's a really perilous time for 796 00:36:58,560 --> 00:37:02,160 Speaker 6: the American auto industry. They do need to reinvent themselves 797 00:37:02,200 --> 00:37:04,680 Speaker 6: before the Chinese arrive. And as Bill Ford said last week, 798 00:37:04,800 --> 00:37:08,680 Speaker 6: they are going to arrive. And if the American auto 799 00:37:08,719 --> 00:37:12,520 Speaker 6: industry isn't ready lower priced cars, electric vehicles, if they 800 00:37:12,560 --> 00:37:14,400 Speaker 6: aren't ready, they won't survive. 801 00:37:15,120 --> 00:37:17,120 Speaker 1: Are you driving an ev I'm not. 802 00:37:18,040 --> 00:37:21,520 Speaker 3: I'm a moss back, not even a hybrid. 803 00:37:22,000 --> 00:37:22,280 Speaker 6: No. 804 00:37:22,480 --> 00:37:24,240 Speaker 3: My brother, my older brother has a hybrid. 805 00:37:24,320 --> 00:37:25,200 Speaker 6: But yet I do not. 806 00:37:25,320 --> 00:37:29,439 Speaker 1: I keep waiting for what's the car? Here's another one. 807 00:37:29,600 --> 00:37:32,399 Speaker 1: You're a jem. We wish you well. Thank you Keith 808 00:37:32,440 --> 00:37:35,600 Speaker 1: not on Bloomberg News Auto Reporter. You will be missed, 809 00:37:36,040 --> 00:37:36,760 Speaker 1: Miss Bloomberg. 810 00:37:38,080 --> 00:37:43,440 Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, 811 00:37:43,560 --> 00:37:47,280 Speaker 2: and anywhere else you get your podcasts. Listen live weekday 812 00:37:47,320 --> 00:37:51,360 Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot Com, 813 00:37:51,400 --> 00:37:55,320 Speaker 2: the iHeartRadio app, tune In, and the Bloomberg business app. 814 00:37:55,520 --> 00:37:58,320 Speaker 2: You can also watch us live every weekday on YouTube 815 00:37:58,520 --> 00:38:00,640 Speaker 2: and always on the Bloomberg Terminal 816 00:38:07,719 --> 00:38:08,080 Speaker 3: MHM