WEBVTT - Oracle and Walmart’s Deal for TikTok 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors. 0:00:14.440 --> 0:00:16.439 And of course Carol that's part of a team of 0:00:16.520 --> 0:00:19.959 twenty seven hundred journalists and analysts the more than a 0:00:20.040 --> 0:00:22.959 hundred and twenty countries and Jason. You can download Bloomberg 0:00:22.960 --> 0:00:26.079 Business Week on iTunes, SoundCloud, bl Bloomberg dot com. You 0:00:26.079 --> 0:00:28.280 can also listen to our radio show at two pm 0:00:28.320 --> 0:00:31.159 Eastern on Bloomberg Radio every weekday, or watch us on 0:00:31.200 --> 0:00:35.800 YouTube by searching Bloomberg Global News. Let's set the Business 0:00:35.800 --> 0:00:39.080 Week agenda, now a lot on it. Gina Martin Adams, 0:00:39.159 --> 0:00:42.160 Chief Equity Strategies for Bloomberg Intelligence. She's in New Jersey, 0:00:42.240 --> 0:00:44.600 as is Stave Wilson, Stocks Editor, author of the Chart 0:00:44.960 --> 0:00:47.240 and Stock of the Day. Gina, I want to start 0:00:47.280 --> 0:00:52.519 with you because it's a pretty gloomy picture across all 0:00:52.520 --> 0:00:55.760 the major indices. What are you seeing as you and 0:00:55.800 --> 0:00:59.400 your team really break it down? What's the big driver here? Yeah? 0:00:59.600 --> 0:01:02.600 I think it's have to articulate one driver or another. 0:01:02.800 --> 0:01:06.160 The SMP five opened this week testing key levels. We 0:01:06.200 --> 0:01:08.640 saw the index crush through its fifty day moving average 0:01:08.640 --> 0:01:10.360 as of Friday, so we knew we were in for 0:01:10.400 --> 0:01:14.520 some continuation of the corrective process when we woke up 0:01:14.560 --> 0:01:18.400 this morning. Irrespective of some of the news, in particular 0:01:18.520 --> 0:01:22.400 the news on Financial Spector and maybe some dubious nefarious 0:01:22.480 --> 0:01:27.280 behavior among participants being potentially pretty dangerous for that space, 0:01:27.480 --> 0:01:30.120 has been the big news of today, and that may 0:01:30.160 --> 0:01:33.200 have contributed to a broader a broader sell off than 0:01:33.440 --> 0:01:37.200 would have been likely otherwise. But I'd say the technicals 0:01:37.200 --> 0:01:39.319 were set up for a rough day to continue today. 0:01:39.440 --> 0:01:43.000 Now we may be looking at finally a capitulation point, 0:01:43.120 --> 0:01:45.480 which you know, for the first time since the end 0:01:45.480 --> 0:01:47.680 of August, we can say the index is nearing over 0:01:47.720 --> 0:01:50.800 soul levels. Um, so we want to watch through the 0:01:50.840 --> 0:01:53.160 clothes to see how broad the correction is. If we 0:01:53.200 --> 0:01:55.720 get to a fourteen day moving average or a fourteen 0:01:55.760 --> 0:01:59.560 day rs I back near over souled levels, that could 0:01:59.560 --> 0:02:02.280 represent a buying point for capital that's been looking to 0:02:02.360 --> 0:02:05.880 get into this market but waiting for an appropriate time 0:02:05.920 --> 0:02:08.040 to do so. Dave Wilson come on in on what 0:02:08.080 --> 0:02:10.560 you're seeing in the trade today. You know, there are 0:02:10.560 --> 0:02:13.680 a couple of things that jump out besides what's going 0:02:13.720 --> 0:02:16.400 on with the banks. You know, after this report from 0:02:16.400 --> 0:02:20.440 the International Consortium of Investigative Journalists talking about you know, 0:02:20.480 --> 0:02:25.840 how they may be handling or not handling suspicious transactions properly. So, 0:02:26.400 --> 0:02:29.120 uh that that's a piece of it. Beyond that, I mean, 0:02:29.160 --> 0:02:33.119 you look at what's going on with hospitals and with 0:02:33.360 --> 0:02:36.919 health insurers. All this so tied up with what happens 0:02:36.960 --> 0:02:40.440 to the Affordable Care Act now that the Supreme Court 0:02:40.520 --> 0:02:43.480 Justice Ruth Bader Ginsburg has passed, and you know, we 0:02:43.520 --> 0:02:46.440 may get a successor before election day, which would mean 0:02:46.600 --> 0:02:49.600 we'd have a successor when a week after election day 0:02:49.840 --> 0:02:52.200 the High Court here's arguments by the states trying to 0:02:52.240 --> 0:02:55.560 get rid of Obamacare. So you know, those stocks are 0:02:55.840 --> 0:02:59.080 especially weak in today's trading. And then there's the saga 0:02:59.160 --> 0:03:03.040 of Nicola, the electric truck developer, and yeah, the do 0:03:03.080 --> 0:03:06.480 you wonder they're sitting at General Motors saying whose the 0:03:06.639 --> 0:03:09.959 idea was this? I mean, they're still they're still more 0:03:10.000 --> 0:03:11.600 to know and I don't want to, you know, kind 0:03:11.600 --> 0:03:14.040 of they aren't doing it at GM. I can assure 0:03:14.080 --> 0:03:16.799 you GM shareholders at least some of them are asking 0:03:16.840 --> 0:03:20.720 that question. Because while Nichola is down nineteen percent, GM's 0:03:20.760 --> 0:03:22.639 off more than five and a half percent. And there's 0:03:22.680 --> 0:03:26.040 another company that's already working with Nicholas, c NH Industrial. 0:03:26.360 --> 0:03:29.360 Now they're big in two tractors and you know other 0:03:29.440 --> 0:03:33.880 types of sort of industrial machines. CNH is down almost 0:03:33.960 --> 0:03:37.120 eight percent. So there's definitely a toll being taken that 0:03:37.240 --> 0:03:41.280 goes beyond you know, this development stage company. And and 0:03:41.320 --> 0:03:43.640 so that's another one that jumps out, especially because Nicola 0:03:43.760 --> 0:03:45.960 is the product of, you know, a deal with one 0:03:46.000 --> 0:03:49.920 of these special persents, acquisition companies, backs, blank check companies, 0:03:49.960 --> 0:03:54.160 calling what you will, real black eye. Absolutely, we've been 0:03:54.160 --> 0:03:57.760 talking about those a ton uh Gina Martin Adams before 0:03:57.760 --> 0:04:00.680 we let you go the election, Paul Ticks, Is that 0:04:00.720 --> 0:04:06.160 starting to weigh on this market in a more meaningful way? Yeah, well, politics, 0:04:06.240 --> 0:04:10.440 I think they've already highlighted the Ginsburg passing and what 0:04:10.480 --> 0:04:12.720 that may mean for the Supreme Court and the a 0:04:12.880 --> 0:04:17.560 c a um sort of battle upcoming. So there certainly 0:04:17.680 --> 0:04:20.480 is a portion of politics. I would also say, though 0:04:21.160 --> 0:04:24.160 the election is absolutely getting priced into Vic's futures. I mean, 0:04:24.279 --> 0:04:27.720 we've seen over the last month VIX futures for November 0:04:27.760 --> 0:04:30.400 getting even more expensive than October, which says to me 0:04:30.480 --> 0:04:32.960 the market is trying to price for a very uncertain 0:04:33.200 --> 0:04:37.120 or highly followtile election season lasting right through the end 0:04:37.160 --> 0:04:39.000 of November, which would be very unusual. So I do 0:04:39.040 --> 0:04:41.880 you think it's part of this? But obviously there are 0:04:41.880 --> 0:04:43.760 a lot of moving parts, and it all started with 0:04:43.839 --> 0:04:46.400 the deflation of a mini tech bubble which is now 0:04:46.440 --> 0:04:50.080 extending into other issues. Right, all right, well, good, good 0:04:50.080 --> 0:04:52.359 context as always, Thank you so much. Gina Martin Adams, 0:04:52.440 --> 0:04:56.040 chief equity strategist for Bloomberg Intelligence, along with Dave Wilson, 0:04:56.080 --> 0:05:01.240 Stocks editor for Bloomberg, both joining us from New Jersey. 0:05:01.320 --> 0:05:04.920 This is Bloomberg Business Week with Carol Masser and Jason 0:05:05.000 --> 0:05:09.480 Kelly on Bloomberg Radio. One of the best stories and 0:05:09.600 --> 0:05:12.400 one of the best reporters. Candidly, I just love talking 0:05:12.440 --> 0:05:15.279 to him, love reading his stuff. Jeff Green, Managing Diversity 0:05:15.360 --> 0:05:17.800 reporter for Bloomberg. He joins us on the phone for 0:05:17.920 --> 0:05:20.280 Michigan to talk about a story it's in the upcoming 0:05:20.720 --> 0:05:24.000 edition of the magazine. It's about Southern Bank Corps. It's 0:05:24.080 --> 0:05:27.920 CEO named Darren Williams. He joins me as well as 0:05:28.040 --> 0:05:31.200 Joel Webber, the editor of Bloomberg Business Week. So Joel 0:05:31.279 --> 0:05:33.839 part of the equality issue, I believe, and this is 0:05:33.880 --> 0:05:37.919 a really really important piece of the puzzle when it 0:05:38.000 --> 0:05:43.360 comes to undoing a lot of the systemic racism, candidly 0:05:44.040 --> 0:05:47.320 going after the wealth gap and the lending gap to 0:05:47.440 --> 0:05:51.320 a large extent, that's right. And so Darren Williams um 0:05:51.440 --> 0:05:56.719 one of finances only black CEOs, and he's a CEO 0:05:56.920 --> 0:06:00.000 of of Southern Bank Corps, which Jeff is gonna tell 0:06:00.200 --> 0:06:02.400 about more in a second. What I found so interesting 0:06:02.400 --> 0:06:05.680 about this was it's like there's this void um in 0:06:05.720 --> 0:06:10.000 the country, uh, in the South in particular, where there 0:06:10.000 --> 0:06:15.880 are thousands of underbanked people and that has obviously limited 0:06:15.880 --> 0:06:19.000 their ability to not only get capital but also you know, 0:06:19.400 --> 0:06:23.640 move up in society. And that's a problem that UM 0:06:23.960 --> 0:06:28.839 UH Darren has sort of recognized and that UH Southern 0:06:28.839 --> 0:06:32.720 Bank work has moved to solve UM. And Jeff how 0:06:32.839 --> 0:06:35.680 I talked to us about how he's going about addressing 0:06:35.800 --> 0:06:39.480 this problem. Yeah, Well, it's it's really interesting that you know, 0:06:39.800 --> 0:06:43.240 it's the under underbanked about a quarter of the population, 0:06:43.279 --> 0:06:46.960 and they're predominantly they tend to skew heavily black UM 0:06:47.080 --> 0:06:50.400 and people of color in general, but mostly black UM. 0:06:50.440 --> 0:06:53.760 And it's the kind of thing that's somewhat hidden and 0:06:53.960 --> 0:06:56.919 it's a little bit intractable attractable because these are people 0:06:56.960 --> 0:06:59.839 that banks really can't lend money to, and thus they 0:06:59.839 --> 0:07:02.120 in up going to payday lenders, which makes them even 0:07:02.800 --> 0:07:05.039 higher credit risk because they have they have so much debt. 0:07:05.080 --> 0:07:08.320 So what there in and Southern we're trying to do, 0:07:08.400 --> 0:07:10.240 even before the pandemic, was a figure out a way 0:07:10.240 --> 0:07:12.240 to sort of bridge this, to bring these people into 0:07:12.240 --> 0:07:14.840 the banking system, help them to trust the banks, give 0:07:14.920 --> 0:07:18.200 them some sense that what they're doing with the payday lenders, 0:07:18.560 --> 0:07:20.360 they're never going to gain sort of the wealth that 0:07:20.400 --> 0:07:22.400 you get. You can't get a house, you can't get 0:07:22.400 --> 0:07:25.240 a mortgage until you kind of straighten that stuff out. 0:07:25.280 --> 0:07:27.520 So like that's his big goal is to put more 0:07:27.600 --> 0:07:29.640 people in a position to be able to have a 0:07:29.680 --> 0:07:32.200 bank account, gang credit and ultimately have a mortgage and 0:07:32.240 --> 0:07:35.920 have something we're wealth as accrued. And it was interesting 0:07:35.960 --> 0:07:38.520 because we started doing this a year ago, prior to 0:07:38.560 --> 0:07:41.480 the pandemic and the big frustrating thing for him was 0:07:42.320 --> 0:07:44.360 it was sort of in the background, and it was like, 0:07:44.400 --> 0:07:46.120 you knew this was a problem, you knew it was 0:07:46.160 --> 0:07:47.960 sucking the life out of people, but it was really 0:07:47.960 --> 0:07:51.800 hard for people to sort of understand just how momentous 0:07:51.840 --> 0:07:55.800 it was. And you know, then the pandemic hits, and 0:07:55.920 --> 0:07:57.920 you know, front and center are people dying at three 0:07:57.960 --> 0:08:00.720 times the rate in black communities, and it's like you 0:08:00.800 --> 0:08:04.240 start to say, Wow, this is not just esoteric philosophical discussion. 0:08:04.280 --> 0:08:07.240 This is life and death, and the death is really 0:08:07.320 --> 0:08:10.440 stunning to a lot of a lot of Americans. Well, 0:08:10.480 --> 0:08:13.360 and Jeff, I think then on top of that, in 0:08:13.400 --> 0:08:16.320 the aftermath of the killing of George Floyd and and 0:08:16.400 --> 0:08:20.559 this reckoning, this long overdue reckoning around all of those 0:08:20.560 --> 0:08:23.880 issues that you described, around the wealth gap that's been 0:08:23.920 --> 0:08:26.000 brought to the foe by the likes of John Rodgers 0:08:26.040 --> 0:08:30.320 over at Ariel and others. And I do wonder, you 0:08:30.320 --> 0:08:34.920 know how Darren Williams sees this and sort of to 0:08:34.960 --> 0:08:38.120 your point, like this has been hiding in plain sight 0:08:38.200 --> 0:08:40.560 for a long time. He's happy for the attention, but 0:08:41.360 --> 0:08:43.360 what do we do about What does he say we 0:08:43.400 --> 0:08:45.360 should be doing. What is he doing to sort of 0:08:45.360 --> 0:08:49.960 help the cause. Well, the solution that both you know, 0:08:50.080 --> 0:08:52.760 he sees because he is his bank is called the 0:08:52.800 --> 0:08:56.280 Consumer Development Financial Institution, which is sort of a specially 0:08:56.360 --> 0:08:58.959 chartered bank that is designed to try and bring money 0:08:58.960 --> 0:09:02.840 and you know, loans and financial wherewithal to the poorest 0:09:02.960 --> 0:09:06.640 people in the country. Um. It was something actually created 0:09:06.640 --> 0:09:09.240 by President Clinton in ninety four and the and Southern 0:09:09.360 --> 0:09:11.440 was the model for Hillary. Clinton was on the first 0:09:11.520 --> 0:09:14.160 version of the the Southern Board when it was formed, you know, 0:09:14.400 --> 0:09:16.240 more than a quarter century ago, so it's like a 0:09:16.320 --> 0:09:19.520 long standing pieces. This is not a new struggle. But 0:09:19.640 --> 0:09:22.120 his idea is to use the c d fys more effectively. 0:09:22.160 --> 0:09:24.320 In fact, Bank of America and Goldman Sachs were on 0:09:24.320 --> 0:09:26.959 a call with him and President Trump basically saying we 0:09:27.000 --> 0:09:28.720 need to do this, we need to do more of this. 0:09:28.800 --> 0:09:30.559 And it led to a big infusion of money to 0:09:30.679 --> 0:09:32.559 the c d f ies. And that is sort of 0:09:32.600 --> 0:09:35.319 the question is will discontinue. I mean, it was in 0:09:35.360 --> 0:09:38.840 a crisis moment, the paycheck Protection Plan was not getting 0:09:38.840 --> 0:09:40.880 to the people that needed to because the big banks 0:09:40.880 --> 0:09:44.120 didn't have the infrastructure. Meanwhile, here's Darren Williams working on 0:09:44.120 --> 0:09:46.880 the weekend with his staff getting you know, wrote fifty 0:09:46.960 --> 0:09:49.680 checks when other people hadn't even got an application yet. 0:09:49.720 --> 0:09:52.000 So that's sort of his hope is that now people 0:09:52.080 --> 0:09:53.800 know the c d I fis are, they're the big 0:09:53.800 --> 0:09:56.640 banks have kind of thrown some money their way. Netflix 0:09:56.720 --> 0:09:59.920 is involved, Google's involved. Will you get this to contin 0:10:00.080 --> 0:10:02.480 new so the focus stays on the c d fys. 0:10:02.600 --> 0:10:05.240 More money is available so they can do more loans. 0:10:05.240 --> 0:10:06.760 I mean that's the only way it works is they 0:10:06.800 --> 0:10:10.240 need basically below market rate money that they can then 0:10:10.400 --> 0:10:15.079 lend out to keep this moving. So Jeff, there there's 0:10:15.600 --> 0:10:18.000 a thousand of the c d f I s um 0:10:18.280 --> 0:10:21.240 out there that are in a position to help UM, 0:10:21.280 --> 0:10:24.440 and it's all been modeled on on on basically Williams 0:10:24.440 --> 0:10:26.800 and sort of in the model that they've adapted. I'm 0:10:26.800 --> 0:10:31.840 also curious what other ideas he has for how we 0:10:31.840 --> 0:10:35.920 could be helping UM vulnerable Americans right now. Well, I 0:10:35.920 --> 0:10:38.439 mean one of the key things is credit education. They 0:10:38.440 --> 0:10:40.000 were doing this. I mean I went with them to 0:10:40.040 --> 0:10:43.640 a class in this little town site in uh, you know, 0:10:43.840 --> 0:10:46.720 just off a cotton field, just you know, middle of nowhere. 0:10:46.760 --> 0:10:50.720 But twenty people. They're learning about credit and how it 0:10:50.760 --> 0:10:53.160 works and how interest cruise and debt and all those 0:10:53.200 --> 0:10:55.760 sorts of things. Basically just right at the grassroots level, 0:10:56.120 --> 0:11:01.360 trying to teach people, um, you know, how to get 0:11:01.360 --> 0:11:03.640 their finances in order. And then at the end of that, 0:11:03.720 --> 0:11:05.880 they would give them this nine percent loan, which you know, 0:11:05.920 --> 0:11:08.880 keep in mind, a payday loan is around, you know 0:11:08.920 --> 0:11:11.319 if you don't pay it off right away. So this 0:11:11.520 --> 0:11:15.200 nine percent loan at the time UM that they would keep, 0:11:15.400 --> 0:11:17.120 they would pay half of it, half of it would 0:11:17.120 --> 0:11:18.640 be available for them to pay bills and half to 0:11:18.840 --> 0:11:20.840 be held in sort of like a certificate of deposit. 0:11:21.080 --> 0:11:22.800 And that was like one of the tools. I mean, 0:11:22.800 --> 0:11:24.719 there's lots of things that he's basically saying, you need 0:11:24.760 --> 0:11:27.960 to just do the block and tackling UM in the 0:11:28.000 --> 0:11:30.040 communities to keep this going. And a lot of the 0:11:30.080 --> 0:11:31.800 big banks have pulled out, and he's like, great, you 0:11:31.840 --> 0:11:33.640 don't want to deal with it, Give me more money 0:11:34.080 --> 0:11:35.360 so that I can deal with this, so I can 0:11:35.400 --> 0:11:37.079 get the money to the people that needed, I can 0:11:37.080 --> 0:11:40.760 focus on the hardest hit communities UM with more effectiveness, 0:11:41.200 --> 0:11:44.600 right right, Well, And it's interesting and I highly recommend 0:11:44.640 --> 0:11:47.080 people read this story because there's an aspect of this 0:11:47.160 --> 0:11:49.679 and you alluded to this, Jeff, around the payday lenders. 0:11:49.760 --> 0:11:54.160 That's a really important piece to understand. The delta in 0:11:54.440 --> 0:11:58.280 the interest rates there is massive and game changing in 0:11:58.320 --> 0:12:00.600 a lot of ways. It's a terrific piece to reporting. 0:12:00.679 --> 0:12:04.119 As always from Jeff Green, Managing Diversity reporter for Bloomberg. 0:12:04.400 --> 0:12:07.320 He joined me on the phone from Michigan. Check out 0:12:07.360 --> 0:12:10.240 that story in the upcoming issue of Bloomberg Business Week. 0:12:10.440 --> 0:12:13.120 Can read it now on the Bloomberg and Bloomberg dot Com. 0:12:13.120 --> 0:12:15.520 My thanks as well to Joel Webber, the editor of 0:12:15.720 --> 0:12:20.120 Bloomberg Business Week. He joined from Massachusetts. This is Bloomberg 0:12:20.160 --> 0:12:24.600 Business Week with GARYL. Masser and Jason Kelly on Bloomberg Radio. 0:12:26.360 --> 0:12:29.120 All right, you are listening to Bloomberg Business Week, kicking 0:12:29.120 --> 0:12:32.560 off the three pm Wall Street time. Our Let's do 0:12:32.600 --> 0:12:35.880 a little business week economics if we can. Andy Brown 0:12:36.080 --> 0:12:38.880 is with this, editorial director for Bloomberg New Economy, joining 0:12:38.920 --> 0:12:41.440 us on the phone from New Hampshire, picking up where 0:12:41.440 --> 0:12:45.120 Doug Chrisner just left off. When it comes to TikTok 0:12:45.320 --> 0:12:48.800 Man this deal, and we've talked about it before, Andy 0:12:49.080 --> 0:12:53.640 is just headspinning, head scratching, however you want to put it. 0:12:53.640 --> 0:12:57.199 It's nothing like we've ever seen before, and it ain't 0:12:57.320 --> 0:13:00.640 over when it comes to getting done. What's the most 0:13:00.720 --> 0:13:05.000 important thing we need to understand about this because as 0:13:05.040 --> 0:13:07.240 I look at it at least, and I think you 0:13:07.280 --> 0:13:10.440 may agree, it's kind of a mess. It is a 0:13:10.559 --> 0:13:15.360 complete debacle and has been really right from the very beginning. 0:13:16.040 --> 0:13:19.280 And stuck in the middle of this U S China 0:13:20.360 --> 0:13:25.920 geo political tug of war is a company and investors 0:13:26.000 --> 0:13:29.480 that are desperately trying to figure a way out. On 0:13:29.520 --> 0:13:33.040 the one hand, they this is TikTok and its parent 0:13:33.480 --> 0:13:36.880 bike Dance. On the one hand, they've got the Chinese government, 0:13:36.960 --> 0:13:41.120 which essentially looks at what's happening as a politically inspired 0:13:41.280 --> 0:13:45.840 smash and grab raid by the Trump administration, and on 0:13:45.880 --> 0:13:50.000 the other hand by the Trump administration UM which is 0:13:50.320 --> 0:13:53.680 using the TikTok issue and we chat as a chip 0:13:53.960 --> 0:13:58.240 or as a bargaining chip in uh in in domestic politics, 0:13:58.320 --> 0:14:04.480 essentially beating up on China as a vote getting vote, 0:14:04.559 --> 0:14:08.319 vote getting ploy. And so they've been twisting this way 0:14:08.400 --> 0:14:11.760 and that way, and it now looks like this deal 0:14:11.880 --> 0:14:14.960 that they stitched together, which by the way, gets Trump 0:14:15.000 --> 0:14:17.760 almost nothing of what he wanted in the first place 0:14:17.800 --> 0:14:21.760 out of it. Um, and even that deal now looks shaky. 0:14:21.840 --> 0:14:24.240 It's not at all sure that the Chinese side are 0:14:24.280 --> 0:14:26.360 going to sign off on it, or whether Trump himself 0:14:26.800 --> 0:14:32.800 is satisfied with it, and so, knowing the intricacies of 0:14:32.880 --> 0:14:37.800 the governments and that nexus between the national governments and 0:14:37.920 --> 0:14:40.920 the national champions as it were, both of which I 0:14:40.920 --> 0:14:44.320 think you can argue you have on either side here. 0:14:45.480 --> 0:14:48.720 What went wrong? Was this just sort of too hard, 0:14:48.840 --> 0:14:52.920 too fast, or was everybody not on board to begin with? 0:14:53.040 --> 0:14:55.880 Like what do you make of it again, especially knowing 0:14:55.920 --> 0:14:58.640 some of the nuances of how each side interacts with 0:14:58.680 --> 0:15:04.520 the other. Well, it just the whole deal is is unprecedented. Um. 0:15:04.600 --> 0:15:07.320 We've never had a company caught up in this way 0:15:07.360 --> 0:15:12.480 before with kind of m and a UM being dictated 0:15:12.680 --> 0:15:16.359 literally out of the out of the Oval office. Um. 0:15:16.520 --> 0:15:21.120 So it's it's incredibly it's incredibly difficult. There are so 0:15:21.160 --> 0:15:25.200 many constituencies that need to be satisfied. Um. And in 0:15:25.240 --> 0:15:27.880 the end it looks like nobody is gonna be so. 0:15:27.880 --> 0:15:29.560 So Trump came into this, he said, look, I've got 0:15:29.560 --> 0:15:32.000 three things. Number One, this TikTok has got to be 0:15:32.040 --> 0:15:34.560 owned by a US company. Number Two, we have to 0:15:34.600 --> 0:15:38.600 make the data secure UM so that doesn't foll into 0:15:38.640 --> 0:15:40.720 the hands of the Chinese companist party and they have 0:15:40.800 --> 0:15:44.440 all this personal data on on on the US population. 0:15:44.880 --> 0:15:47.360 And three we want to have a big chunk of change. 0:15:47.600 --> 0:15:51.080 They're going to make a big payment to the U. S. Treasury. Well, actually, 0:15:51.160 --> 0:15:53.960 even under this new deal, any percent of the company 0:15:54.000 --> 0:15:55.600 after the I p O if it i p O 0:15:55.720 --> 0:15:57.480 S is still going to be owned by by byke 0:15:57.560 --> 0:16:02.680 Dance UM. The algorithm UM are going to be open 0:16:02.720 --> 0:16:08.120 to inspection by Oracle, the trusted technology partner. But it 0:16:08.240 --> 0:16:10.960 won't they won't in that sense sort of belong to 0:16:11.120 --> 0:16:14.360 any U S entity. Bite does has them and asked 0:16:14.360 --> 0:16:18.360 for this five billion dollar payment that Trump talks about. Um. 0:16:18.440 --> 0:16:19.880 You know, it turns out that this is kind of 0:16:19.960 --> 0:16:22.600 tax that they were going to be paying anyway to 0:16:22.800 --> 0:16:25.320 the U. S. Government. And there's some sort of vague, 0:16:25.400 --> 0:16:28.800 nebulous promise that they'll come up with a kind of 0:16:29.040 --> 0:16:32.760 some kind of patriotic education program, whatever that may mean 0:16:33.040 --> 0:16:36.880 for for US kids. UM. So, so he's got he's 0:16:36.920 --> 0:16:39.240 got actually very little of what he pushed for. So 0:16:39.320 --> 0:16:43.760 if if your concern with national security, this deal doesn't 0:16:43.840 --> 0:16:47.280 really do it for you, And so as you widen 0:16:47.320 --> 0:16:49.560 the aperture a little bit and think about this from 0:16:49.600 --> 0:16:54.920 the context of ongoing tensions, ongoing negotiations around trade and 0:16:54.960 --> 0:16:57.760 the broader relationship when the U with between the U 0:16:57.800 --> 0:17:00.640 S and China, what does this tell you? You know, 0:17:00.800 --> 0:17:04.280 if you're a Chinese company and you're thinking about making 0:17:04.320 --> 0:17:08.760 an investment in the US, um you're thinking strategically indeed 0:17:08.800 --> 0:17:11.880 about your global position. Or if you're an American company 0:17:11.880 --> 0:17:14.679 now and you're thinking about, you know, the China market 0:17:14.760 --> 0:17:17.280 and how you should be positioned there. This should really 0:17:17.280 --> 0:17:21.840 worry you because because it has been so unpredictable. I mean, 0:17:21.920 --> 0:17:26.760 we're in we're in uncharted territory. Um, there are no 0:17:27.760 --> 0:17:30.080 there are no real rules, at least under the old system, 0:17:30.119 --> 0:17:33.720 the CIFIERS system, this sort of you know, the screening process. Um, 0:17:33.760 --> 0:17:36.640 it was somewhat predictable. You knew what you were getting into. 0:17:36.640 --> 0:17:38.880 A lot of deals didn't get done because companies thought 0:17:38.880 --> 0:17:40.480 to themselves, well, it's not going to get through the 0:17:40.560 --> 0:17:43.320 U S screening committee, so we won't bother. This one 0:17:43.400 --> 0:17:47.600 just came right out of left field in surprise, surprise everybody. 0:17:48.520 --> 0:17:51.639 And so on the other side, if you're a US 0:17:51.760 --> 0:17:56.680 tech company, what do you think about this? Well? So, 0:17:57.080 --> 0:18:00.560 and actually it's not just tech right now, there's there's uh, 0:18:00.600 --> 0:18:03.639 there's a lot of talk about an entities list. So 0:18:03.680 --> 0:18:05.879 the Chinese could actually come up with a list of 0:18:05.920 --> 0:18:11.760 companies that could be subject to retribution, not necessarily US companies, 0:18:11.800 --> 0:18:18.520 So that could include tech companies, but banks, um, trading companies. Um. 0:18:18.560 --> 0:18:22.040 You know, China hasn't retaliated so far because it really 0:18:22.080 --> 0:18:26.400 needs foreign investment, it needs foreign technology. Um. But but 0:18:26.560 --> 0:18:29.840 you know, pushed, pushed far enough, they actually could start 0:18:29.880 --> 0:18:33.880 to take action against US companies, international companies in China. Wow. 0:18:34.160 --> 0:18:37.160 All right, Andy Brown, thank you so much. Andy Brown, 0:18:37.200 --> 0:18:41.360 of course is the editorial director for Bloomberg New Economy. 0:18:41.520 --> 0:18:44.200 He has been breaking down this deal trying to make 0:18:44.240 --> 0:18:46.320 sense of it alongside the rest of us. I have 0:18:46.480 --> 0:18:49.560 to say, Uh, this is something we've watched incredibly closely. 0:18:49.560 --> 0:18:56.720 We've had a global team working on it from all angles, corporate, dealmaking, political, international. 0:18:57.200 --> 0:19:01.399 It has touched all boxes and cantinues to evolve and 0:19:01.480 --> 0:19:04.080 change in this week. Seems like it will be a 0:19:04.119 --> 0:19:06.919 big week when it comes to that deal happening or 0:19:06.960 --> 0:19:09.520 not happening, And obviously a lot of it just comes 0:19:09.560 --> 0:19:12.480 down to the President United States and what he decides 0:19:12.520 --> 0:19:16.040 to do when it comes to TikTok our. Thanks to 0:19:16.080 --> 0:19:19.720 Andy Brown. This is Bloomberg Business Week with Carol Masser 0:19:19.840 --> 0:19:24.320 and Jason Kelly on Bloomberg Radio. Happy to welcome to 0:19:24.480 --> 0:19:28.159 this program. Pete Stavros, he's co head of America's for 0:19:28.359 --> 0:19:31.280 Private Equity for KKR. Heard of it. It's one of 0:19:31.320 --> 0:19:34.200 the best known private equity firms, and it's a firm 0:19:34.240 --> 0:19:36.919 that has been talking a lot over the past years 0:19:37.040 --> 0:19:41.040 about its various stakeholders, and that includes employees. At a 0:19:41.160 --> 0:19:46.320 time when we're more and more concerned about all of 0:19:46.359 --> 0:19:50.159 the constituencies involved in a company. Pete, you've got some 0:19:50.240 --> 0:19:52.520 news today to share with us about what you're doing 0:19:52.800 --> 0:19:56.479 with some of your portfolio companies. First, welcome, tell us 0:19:56.480 --> 0:20:02.520 what's going on at Ingersol RAMD. Thanks for having me, Jason. 0:20:02.640 --> 0:20:06.359 So today we celebrated a hundred and fifty million dollar 0:20:06.720 --> 0:20:10.280 equity award to non members of management. So these are 0:20:10.320 --> 0:20:13.800 mostly hourly employees who work in our factories and our 0:20:13.800 --> 0:20:17.840 distribution centers and earning ourly hourly wage. This is on 0:20:17.920 --> 0:20:20.879 top of a hundred million dollar grant we did at 0:20:20.880 --> 0:20:24.200 our I p O in two thousand and seventeen, which 0:20:24.240 --> 0:20:26.880 because the stock has performed so well, is now worth 0:20:26.880 --> 0:20:29.320 about a hundred and seventy eight million dollars. So you 0:20:29.600 --> 0:20:32.160 add both those up, it's more than three hundred million 0:20:32.160 --> 0:20:35.480 dollars of equity in the hands of hourly workers, and 0:20:35.960 --> 0:20:40.680 so very meaningful financially. And you know, we've got lots 0:20:40.680 --> 0:20:43.080 of kind of personal stories we've been able to to 0:20:43.240 --> 0:20:45.800 hear firsthand in terms of what it's meant for them, 0:20:46.040 --> 0:20:48.760 and then just as importantly in terms of outcomes for 0:20:49.440 --> 0:20:52.680 companies and for our investors. You know, we see higher 0:20:52.680 --> 0:20:56.520 employee engagement, better returns, better results, and better outcomes for 0:20:56.520 --> 0:20:59.400 our investors. Well, and let's talk about the personal side 0:20:59.400 --> 0:21:01.240 of this, and I'm going to start with you, because 0:21:01.560 --> 0:21:06.040 part of the genesis of this, I think is your 0:21:06.040 --> 0:21:09.240 own history and sort of growing up and understanding the 0:21:09.280 --> 0:21:13.440 industrial landscape, not just as now an investor, but as 0:21:13.480 --> 0:21:18.360 a kid from from your dad. Yeah, that's right. My 0:21:18.359 --> 0:21:20.840 my dad was a construction worker. He operated a road 0:21:20.880 --> 0:21:24.600 grader for his whole career in Chicago earned an hourly wage, 0:21:25.200 --> 0:21:27.800 and you know, I just saw firsthand the lack of 0:21:27.840 --> 0:21:30.239 incentive alignment. And if you think about it, if you're 0:21:30.240 --> 0:21:33.000 an hourly employee, really all you care about are getting 0:21:33.040 --> 0:21:35.800 more hours, so that can be at the expense of efficiency. 0:21:35.800 --> 0:21:38.080 If you're too efficient, you may work fewer hours and 0:21:38.160 --> 0:21:42.520 earn less money. And there was just constant conflict around hours. 0:21:42.520 --> 0:21:46.000 And my dad always dreamt about, you know, shared ownership 0:21:46.119 --> 0:21:50.080 or profit sharing at his um construction company with his union, 0:21:50.640 --> 0:21:53.320 and you know, unfortunately never happened, but that's certainly really 0:21:53.320 --> 0:21:56.720 stuck with me. And then as a graduate student, you know, 0:21:56.840 --> 0:21:59.159 years later, this is not still twenty years ago, but 0:21:59.720 --> 0:22:02.680 as as a young adult in graduate school, you get 0:22:02.680 --> 0:22:05.000 a lot of flexibility to study what interests you. And 0:22:05.000 --> 0:22:08.040 I had an opportunity to study broad based ownership for 0:22:08.119 --> 0:22:10.679