1
00:00:00,520 --> 00:00:03,040
Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm

2
00:00:03,120 --> 00:00:05,560
Speaker 1: Jason Kelly. We're here every day bringing you the latest

3
00:00:05,600 --> 00:00:09,840
Speaker 1: news from the world of business and finance, plus technology, politics, economics,

4
00:00:09,920 --> 00:00:13,520
Speaker 1: all harnessing the power of Bloomberg Business Week reporters and editors,

5
00:00:13,560 --> 00:00:16,840
Speaker 1: not to mention our journalists and analysts more than a

6
00:00:16,880 --> 00:00:19,599
Speaker 1: hundred and twenty countries. You can download Bloomberg Business Week

7
00:00:19,640 --> 00:00:22,480
Speaker 1: on iTunes, SoundCloud, or Bloomberg dot com. You can also

8
00:00:22,560 --> 00:00:24,920
Speaker 1: listen to our radio show weekdays at two pm Eastern

9
00:00:25,079 --> 00:00:34,240
Speaker 1: only on Bloomberg Radio. Yeah. So this is a story

10
00:00:34,440 --> 00:00:37,800
Speaker 1: about workers at Google, and it's a fascinating one, Jason,

11
00:00:37,840 --> 00:00:43,360
Speaker 1: about how while Google publicly supported employees who protested company policies, quietly,

12
00:00:43,400 --> 00:00:45,440
Speaker 1: behind the scenes it was asking the US government to

13
00:00:46,159 --> 00:00:49,919
Speaker 1: narrow legal protection for workers who are organizing online. All

14
00:00:49,960 --> 00:00:52,720
Speaker 1: I gotta say is wow. Josh Idolson is labor reporter

15
00:00:52,760 --> 00:00:54,880
Speaker 1: at Bloomberg News. He joins us from our Bloomberg nine

16
00:00:54,920 --> 00:00:58,240
Speaker 1: sixties studio in San Francisco. Josh, nice to have you

17
00:00:58,280 --> 00:01:01,319
Speaker 1: here with Jason and myself. So laid out for us,

18
00:01:01,360 --> 00:01:04,360
Speaker 1: what exactly do we know about what was going on?

19
00:01:05,680 --> 00:01:11,280
Speaker 1: So Google employees drew international attention over the past year

20
00:01:11,360 --> 00:01:14,520
Speaker 1: with protests, including a walk out with thousands of people

21
00:01:15,000 --> 00:01:18,360
Speaker 1: pushing for changes to the company's governance and it's handling

22
00:01:18,440 --> 00:01:24,520
Speaker 1: of sexual misconduct. Google publicly embraced those efforts and announced

23
00:01:24,880 --> 00:01:28,920
Speaker 1: changes afterwards. What's been going on behind the scenes, however,

24
00:01:29,280 --> 00:01:33,039
Speaker 1: is in an unrelated case, Google has been asking the

25
00:01:33,120 --> 00:01:36,399
Speaker 1: National Lab Relations Board, the federal agency in the US

26
00:01:36,560 --> 00:01:41,120
Speaker 1: that protects workers rights, to undo a protection that some

27
00:01:41,200 --> 00:01:43,760
Speaker 1: of those same activists say is very important to them.

28
00:01:43,840 --> 00:01:48,440
Speaker 1: That's a legal protection for workers to engage in organizing

29
00:01:48,480 --> 00:01:53,200
Speaker 1: activities using the company email system. And this is a

30
00:01:53,200 --> 00:01:57,160
Speaker 1: big deal, both because of Google's prominence, but also presumably

31
00:01:57,640 --> 00:01:59,880
Speaker 1: as a precedent I would imagine, I mean, you look

32
00:01:59,880 --> 00:02:03,760
Speaker 1: across all sorts of labor issues, Josh, what what are

33
00:02:03,800 --> 00:02:08,160
Speaker 1: we to make of the import here? So purple communications.

34
00:02:08,200 --> 00:02:12,160
Speaker 1: The precedent in question came under the Obama era at

35
00:02:12,160 --> 00:02:17,280
Speaker 1: the Labor Board in and it's a sweeping, significant decision

36
00:02:17,400 --> 00:02:22,720
Speaker 1: that says there is, in almost all circumstances right for

37
00:02:22,760 --> 00:02:27,320
Speaker 1: employees to engage in organizing activities, not just trying to

38
00:02:27,360 --> 00:02:30,480
Speaker 1: form a union, but all kinds of collective action around

39
00:02:30,560 --> 00:02:36,359
Speaker 1: workplace issues using their employee email accounts. That's important, particularly

40
00:02:36,400 --> 00:02:40,560
Speaker 1: in situations like Google's workforce, where people are spread all

41
00:02:40,600 --> 00:02:43,200
Speaker 1: over the globe and many of them say they don't

42
00:02:43,240 --> 00:02:47,280
Speaker 1: have personal emails for each other. So what Google asked

43
00:02:47,320 --> 00:02:49,600
Speaker 1: the n l r B to do in these filings

44
00:02:49,639 --> 00:02:53,440
Speaker 1: that we obtained via FOYA is to undo the Obama

45
00:02:53,480 --> 00:02:55,880
Speaker 1: era precedent and go back to the one that was

46
00:02:55,919 --> 00:02:59,480
Speaker 1: more restrictive under George W. Bush. So what does Google

47
00:02:59,560 --> 00:03:04,000
Speaker 1: say when asked about this? Google says they are not lobbying,

48
00:03:04,160 --> 00:03:06,800
Speaker 1: and of course it depends on the definition of the

49
00:03:06,840 --> 00:03:10,919
Speaker 1: word lobbying. They say that they made the argument they

50
00:03:10,960 --> 00:03:14,800
Speaker 1: did in these legal filings as a potential defense, among

51
00:03:14,840 --> 00:03:18,800
Speaker 1: other defenses against allegations from the n lr B that

52
00:03:18,880 --> 00:03:21,720
Speaker 1: they think are unfounded. And they say that they have

53
00:03:21,919 --> 00:03:24,720
Speaker 1: one of the most open workplaces in the world and

54
00:03:24,760 --> 00:03:28,240
Speaker 1: that they have all kinds of ways for employees to

55
00:03:28,480 --> 00:03:31,679
Speaker 1: make their voice heard. Well. And it's interesting too, and

56
00:03:31,760 --> 00:03:33,880
Speaker 1: you bring this up in your story, Josh. You know,

57
00:03:34,000 --> 00:03:39,160
Speaker 1: the relationship that Google has with the US and with

58
00:03:39,200 --> 00:03:42,240
Speaker 1: its workers is sort of like triangle. Triangle of sorts

59
00:03:42,600 --> 00:03:46,400
Speaker 1: is complicated, And you bring up the idea that Google

60
00:03:46,720 --> 00:03:52,080
Speaker 1: employees protested pretty vigorously a Pentagon contract that Google had

61
00:03:52,160 --> 00:03:55,920
Speaker 1: that seemed like an important moment uh in the company's culture.

62
00:03:55,960 --> 00:03:57,680
Speaker 1: You know, you go back all the way to the

63
00:03:57,680 --> 00:04:00,680
Speaker 1: founding and don't be evil and all all the sort

64
00:04:00,680 --> 00:04:04,640
Speaker 1: of bromides that this company was founded on. Where does

65
00:04:04,680 --> 00:04:07,720
Speaker 1: it go from here and how does this company kind

66
00:04:07,720 --> 00:04:11,800
Speaker 1: of wrestle with essentially who it is and in the

67
00:04:11,800 --> 00:04:14,440
Speaker 1: face of these big questions, Well, this is a company

68
00:04:14,480 --> 00:04:17,599
Speaker 1: that's been royaled over the past year by a wave

69
00:04:17,680 --> 00:04:21,520
Speaker 1: of protest and activism from workers. Google has prided itself

70
00:04:21,600 --> 00:04:25,880
Speaker 1: on a culture of openness and room for disagreement, but

71
00:04:26,040 --> 00:04:32,360
Speaker 1: the kind of disagreement vocal, concerted public that it has

72
00:04:32,920 --> 00:04:35,880
Speaker 1: been confronted with from employees over the past year is

73
00:04:35,960 --> 00:04:39,719
Speaker 1: really in a whole different category. And the company has

74
00:04:39,720 --> 00:04:42,640
Speaker 1: had to consider issue by issue, whether it's a Pentagon

75
00:04:42,800 --> 00:04:47,760
Speaker 1: contract or treatment of subcontracted workers or sexual harassment, where

76
00:04:47,839 --> 00:04:50,640
Speaker 1: to bend and where not to in response to employees,

77
00:04:51,000 --> 00:04:56,440
Speaker 1: while at the same time confronting issues being raised by

78
00:04:56,839 --> 00:05:00,400
Speaker 1: employees at a very different place on the political spect drum,

79
00:05:00,440 --> 00:05:03,840
Speaker 1: like the one involved in this labor board case, who

80
00:05:03,839 --> 00:05:06,800
Speaker 1: claimed that Google is too left wing and two, in

81
00:05:06,839 --> 00:05:11,680
Speaker 1: their words, politically correct. And now since we published the story,

82
00:05:11,800 --> 00:05:14,800
Speaker 1: and as we were reporting the story, we heard from

83
00:05:15,000 --> 00:05:18,880
Speaker 1: people at Google and elsewhere who are upset about the

84
00:05:18,920 --> 00:05:22,200
Speaker 1: position Google took in this case and see this as

85
00:05:22,560 --> 00:05:26,719
Speaker 1: another reason for distrust between workers there and the company.

86
00:05:26,839 --> 00:05:29,480
Speaker 1: So that's something that will continue to play out well.

87
00:05:29,520 --> 00:05:32,240
Speaker 1: And what's interesting in this environment where we've talked about

88
00:05:32,680 --> 00:05:36,359
Speaker 1: that search and social media companies are under increased scrutiny

89
00:05:36,480 --> 00:05:39,320
Speaker 1: and may have to start getting ready for even more

90
00:05:39,680 --> 00:05:43,880
Speaker 1: regulatory oversight. You have that going on at the same time.

91
00:05:43,880 --> 00:05:47,200
Speaker 1: I was just reading earlier about five of the largest

92
00:05:47,279 --> 00:05:49,560
Speaker 1: use tech companies pouring a combined sixty four point two

93
00:05:49,560 --> 00:05:52,240
Speaker 1: million into federal lobbying efforts last year. This is a

94
00:05:52,279 --> 00:05:54,920
Speaker 1: new ethics report that's Google alone made up about one

95
00:05:54,960 --> 00:05:57,720
Speaker 1: third of that total, spending more than twenty one point

96
00:05:57,800 --> 00:06:01,320
Speaker 1: two million in eighteen, up seven in team percent from

97
00:06:01,360 --> 00:06:05,719
Speaker 1: the PV previous year. UM So my point is they're

98
00:06:05,800 --> 00:06:09,520
Speaker 1: having more sway and influence when it comes to Washington,

99
00:06:10,360 --> 00:06:12,680
Speaker 1: when it comes to new policies, and I just think

100
00:06:12,680 --> 00:06:18,480
Speaker 1: that's a pretty significant trend there. Absolutely, these are huge players.

101
00:06:18,520 --> 00:06:23,520
Speaker 1: They are not just scrappy little upstarts. They are corporate giants,

102
00:06:23,720 --> 00:06:27,320
Speaker 1: and they are being subjected to scrutiny by the media

103
00:06:27,400 --> 00:06:32,440
Speaker 1: and by their own employees. That sometimes involves workers who

104
00:06:32,480 --> 00:06:37,840
Speaker 1: work there coming to conclusions that what's happening really contradicts

105
00:06:37,880 --> 00:06:41,640
Speaker 1: the values they associate with the company. Josh Idolson is

106
00:06:41,839 --> 00:06:45,800
Speaker 1: one of our labor reporters following Google very closely. Here

107
00:06:45,839 --> 00:06:49,240
Speaker 1: great reporting here. You can read the story on the

108
00:06:49,240 --> 00:06:52,840
Speaker 1: Bloomberg terminal and on Bloomberg dot com. Google taking it

109
00:06:52,920 --> 00:06:55,440
Speaker 1: up with the US to try and limit protection for

110
00:06:55,640 --> 00:06:57,720
Speaker 1: some of those activist workers who have brought a lot

111
00:06:57,720 --> 00:06:59,440
Speaker 1: of big issues to the FORO their Google. And it

112
00:06:59,839 --> 00:07:02,320
Speaker 1: just goes back to kind of transparency at companies, right,

113
00:07:02,720 --> 00:07:04,200
Speaker 1: you know, you think things are getting little bit more

114
00:07:04,200 --> 00:07:07,520
Speaker 1: transparent again. You know, there's maybe some to be known

115
00:07:07,760 --> 00:07:10,400
Speaker 1: in terms of what's going on, but it's certainly fascinating

116
00:07:10,480 --> 00:07:13,280
Speaker 1: to hear this and hear what's going up maybe publicly

117
00:07:13,360 --> 00:07:15,760
Speaker 1: versus what's going on behind the scenes. You are listening

118
00:07:15,800 --> 00:07:18,920
Speaker 1: to Bloomberg Business Week, Carol Masser along with Jason Kelly,

119
00:07:19,000 --> 00:07:30,800
Speaker 1: and we are Bloomberg Radio fans. Privacy, data protection, keeping

120
00:07:30,920 --> 00:07:34,200
Speaker 1: that data and all user data private. It's key issue

121
00:07:34,360 --> 00:07:37,120
Speaker 1: in the high tech world. Let's stick at bit deeper

122
00:07:37,120 --> 00:07:39,920
Speaker 1: into that. Michelle Dentity is chief Privacy Officer of at Cisco,

123
00:07:40,080 --> 00:07:44,400
Speaker 1: joining us on the phone from Silicon Valley. Hey, Michelle, UM, yeah,

124
00:07:44,480 --> 00:07:47,720
Speaker 1: it's an interesting world and we're just talking a little

125
00:07:47,720 --> 00:07:50,640
Speaker 1: bit about Google and they have certainly been on the

126
00:07:50,760 --> 00:07:54,200
Speaker 1: radar of regulators around the globe in terms of, uh,

127
00:07:54,280 --> 00:07:57,200
Speaker 1: the amount of information being collected, the use of it.

128
00:07:57,360 --> 00:08:00,080
Speaker 1: Facebook also many companies tell us a little bit that

129
00:08:00,520 --> 00:08:03,200
Speaker 1: a report you guys recently did, and you've done it before,

130
00:08:03,800 --> 00:08:07,280
Speaker 1: your Privacy Maturity Benchmark study. What exactly did you do,

131
00:08:07,320 --> 00:08:10,280
Speaker 1: Who did you talk to him? What did you find out? Yeah,

132
00:08:10,360 --> 00:08:12,640
Speaker 1: so thank you for having us on. I've never been

133
00:08:13,440 --> 00:08:19,679
Speaker 1: introduced with Tina Turners and I'm sing first time for everything. Michelle. Yeah,

134
00:08:19,800 --> 00:08:25,160
Speaker 1: I love it, I love it. Privacy Maturely Benchmark study.

135
00:08:25,400 --> 00:08:28,000
Speaker 1: We had a couple of different questions both on upside

136
00:08:28,000 --> 00:08:32,320
Speaker 1: and downside of privacy and privacy investments. So what we did,

137
00:08:32,400 --> 00:08:34,600
Speaker 1: starting a couple of years ago, was we have a

138
00:08:34,640 --> 00:08:37,160
Speaker 1: double blind study. So this is you know, think about

139
00:08:37,200 --> 00:08:41,840
Speaker 1: this is all correlation ratherive causation necessarily, double blind study

140
00:08:41,960 --> 00:08:46,439
Speaker 1: three thousand customers around the world eighteen countries across all

141
00:08:46,480 --> 00:08:49,679
Speaker 1: major industries, So we wanted to take a very broad stripe,

142
00:08:50,360 --> 00:08:55,600
Speaker 1: asking questions about how mature they self perceived themselves to be,

143
00:08:56,160 --> 00:08:59,199
Speaker 1: and then what is the impact, So things like how

144
00:08:59,240 --> 00:09:02,080
Speaker 1: long does it take do you know do you recognize

145
00:09:02,080 --> 00:09:05,480
Speaker 1: the slowdown for business to close deals and business for

146
00:09:05,720 --> 00:09:10,079
Speaker 1: data centric things customers with questions about security and privacy,

147
00:09:10,160 --> 00:09:13,560
Speaker 1: and then are you seeing breaches? What's your downtime? How

148
00:09:13,559 --> 00:09:16,600
Speaker 1: many records are compromised? So we looked at that both

149
00:09:16,640 --> 00:09:19,800
Speaker 1: as upside to me is Wow, if I can make

150
00:09:19,800 --> 00:09:24,400
Speaker 1: it less friction less sales delays, that's a win. And

151
00:09:24,440 --> 00:09:28,640
Speaker 1: then I also want to decrease the number and length

152
00:09:28,640 --> 00:09:32,160
Speaker 1: of time that I'm having breaches. So we're finding that

153
00:09:32,320 --> 00:09:36,880
Speaker 1: the investment in privacy and in privacy governance, particularly in

154
00:09:36,880 --> 00:09:40,359
Speaker 1: a world of GDPR or the General Data Protection Regulation

155
00:09:40,400 --> 00:09:43,360
Speaker 1: out of the EU, we're starting to see people seeing

156
00:09:43,440 --> 00:09:47,800
Speaker 1: results in a total cost of breaches going down, delays

157
00:09:47,840 --> 00:09:51,480
Speaker 1: and doing business going down. And we're seeing this spread

158
00:09:51,600 --> 00:09:55,320
Speaker 1: across the globe. And so Michelle, is that owing to

159
00:09:55,720 --> 00:10:00,439
Speaker 1: companies just investing more heavily because they had to, owing

160
00:10:00,480 --> 00:10:03,160
Speaker 1: to something like g d p R, which you mentioned,

161
00:10:03,160 --> 00:10:05,560
Speaker 1: which I felt like grabbed a lot of headlines last

162
00:10:05,640 --> 00:10:09,080
Speaker 1: year and is mostly related to the EU as you said,

163
00:10:09,600 --> 00:10:13,040
Speaker 1: or is there a heightened sense that this is important

164
00:10:13,080 --> 00:10:16,560
Speaker 1: to customers and consumers are both? What's the driver here?

165
00:10:17,880 --> 00:10:20,480
Speaker 1: I want to say that it's probably both, but we

166
00:10:20,600 --> 00:10:23,800
Speaker 1: don't it's still early enough time. But I think certainly

167
00:10:23,840 --> 00:10:27,600
Speaker 1: programs like this drove awareness to GDPR and the moving

168
00:10:27,679 --> 00:10:32,480
Speaker 1: enforcement deadline of May, so there's more awareness, so more

169
00:10:32,480 --> 00:10:35,040
Speaker 1: people are saying that they're noticing data friction, they're going

170
00:10:35,160 --> 00:10:37,800
Speaker 1: to see to flow down to business with questions. So

171
00:10:37,960 --> 00:10:39,800
Speaker 1: that's on one side of just being aware of it.

172
00:10:40,080 --> 00:10:41,920
Speaker 1: And then the second thing is there are a lot

173
00:10:42,000 --> 00:10:45,360
Speaker 1: of very specific things understanding where your data was in

174
00:10:45,400 --> 00:10:48,280
Speaker 1: the world, who are your third parties who are helping

175
00:10:48,320 --> 00:10:52,200
Speaker 1: to either provide you data or consuming data, So that

176
00:10:52,240 --> 00:10:54,760
Speaker 1: awareness those controls that you had to put in place,

177
00:10:55,160 --> 00:10:58,440
Speaker 1: and really putting an executive mind to this, a strategic

178
00:10:58,520 --> 00:11:01,560
Speaker 1: mind to your data. I think it's all having very

179
00:11:01,600 --> 00:11:05,520
Speaker 1: interesting and positive results overall, but certainly spurred on by

180
00:11:05,760 --> 00:11:08,880
Speaker 1: the potentials of finds as big as four percent of

181
00:11:08,880 --> 00:11:12,559
Speaker 1: your global global intake. Hey, Michelle, just quickly one last question,

182
00:11:12,960 --> 00:11:15,240
Speaker 1: are the people that you serve it and if you

183
00:11:15,240 --> 00:11:18,200
Speaker 1: ask a question along these lines, but are they anticipating

184
00:11:18,240 --> 00:11:22,160
Speaker 1: greater regulatory oversight? I mean, obviously the gdp R is

185
00:11:22,480 --> 00:11:24,320
Speaker 1: you know, already out there, and that's a pretty big deal,

186
00:11:24,440 --> 00:11:26,720
Speaker 1: no doubt about that. But I'm just curious as we

187
00:11:26,720 --> 00:11:29,719
Speaker 1: look around the globe, are they anticipating even more oversight

188
00:11:29,960 --> 00:11:34,760
Speaker 1: when it comes to officials. Absolutely. What I've been saying is,

189
00:11:34,960 --> 00:11:37,680
Speaker 1: you know, if you like the way GDPR looks and smells,

190
00:11:37,720 --> 00:11:41,080
Speaker 1: buckle up. We're seeing countries as far as China and

191
00:11:41,120 --> 00:11:45,040
Speaker 1: Japan of saying that they are ready for g d PR.

192
00:11:45,440 --> 00:11:48,280
Speaker 1: That's not just because they have a ton of European customers.

193
00:11:48,280 --> 00:11:51,600
Speaker 1: It's really because we're anticipating this to be a global currency.

194
00:11:51,679 --> 00:11:54,920
Speaker 1: People are looking at data as leverage and power and

195
00:11:55,160 --> 00:11:59,600
Speaker 1: key asset management or drive their businesses forward. Michelle dnity

196
00:11:59,840 --> 00:12:03,000
Speaker 1: Is is the chief Privacy offered at Officer excuse me,

197
00:12:03,040 --> 00:12:05,720
Speaker 1: at Cisco, joining us on the phone from Silicon Valley.

198
00:12:05,720 --> 00:12:09,920
Speaker 1: The report is the twenty nineteen Privacy Maturity Benchmark Study.

199
00:12:09,960 --> 00:12:12,000
Speaker 1: We really appreciate your time, you know, I have to

200
00:12:12,040 --> 00:12:14,800
Speaker 1: say it does take me back to the conference we

201
00:12:14,800 --> 00:12:17,080
Speaker 1: were able to participate in down at the nine eleven

202
00:12:17,360 --> 00:12:20,720
Speaker 1: Memorial and Museum. We talked to Frank Bisignano, the CEO

203
00:12:20,760 --> 00:12:24,559
Speaker 1: of First Data UH, and you know, this is so

204
00:12:24,720 --> 00:12:27,760
Speaker 1: front and center, the amount of investment that's going in

205
00:12:27,760 --> 00:12:32,200
Speaker 1: in part because the cost both obviously reputationally but the

206
00:12:32,240 --> 00:12:35,280
Speaker 1: actual financial cost of a breach is just massive. I

207
00:12:35,280 --> 00:12:36,960
Speaker 1: always think about, was it a few years ago that

208
00:12:37,040 --> 00:12:38,800
Speaker 1: Jamie Diamond said, you know what are you know, what

209
00:12:38,880 --> 00:12:41,040
Speaker 1: are the things that kind of keep me up at night?

210
00:12:41,040 --> 00:12:43,760
Speaker 1: And it was concerns about cybersecurity and security issues, and

211
00:12:44,040 --> 00:12:46,280
Speaker 1: it has continued to be front and center when it

212
00:12:46,280 --> 00:12:49,240
Speaker 1: comes to certainly financial firms in every firm. You're listening

213
00:12:49,280 --> 00:12:52,960
Speaker 1: to Bloomberg Business Week with GARYL. Masser and Jason Kelly

214
00:12:53,320 --> 00:12:56,800
Speaker 1: on Bloomberg RADEO. So this week in the magazine, a

215
00:12:56,840 --> 00:13:00,560
Speaker 1: bunch of great stories, um, including some deep lives with

216
00:13:01,040 --> 00:13:03,360
Speaker 1: some CEOs. But we want to get into, first of all,

217
00:13:03,360 --> 00:13:06,480
Speaker 1: the cover story, which talks about the government shut in

218
00:13:06,559 --> 00:13:08,400
Speaker 1: of Churse, as we know, the longest one here in

219
00:13:08,440 --> 00:13:10,880
Speaker 1: the US on record. Jill Weber is in the house.

220
00:13:10,920 --> 00:13:13,680
Speaker 1: He's editor of Bloomberg Business Week. In our Bloomberg Interactive

221
00:13:13,720 --> 00:13:16,720
Speaker 1: Broker Studio in New York. So let's start there, because

222
00:13:16,720 --> 00:13:20,800
Speaker 1: it is a really smart story cover story by Josh Green,

223
00:13:21,240 --> 00:13:23,760
Speaker 1: who follows, you know, all things politics and watches things

224
00:13:23,800 --> 00:13:26,640
Speaker 1: from the campaign trail as well. So tell us about um,

225
00:13:26,800 --> 00:13:28,880
Speaker 1: tell us about the story. So we wanted to have

226
00:13:29,600 --> 00:13:33,200
Speaker 1: a moment to look at what feels like the only

227
00:13:33,240 --> 00:13:36,600
Speaker 1: thing any of us can kind of like watch because

228
00:13:36,600 --> 00:13:38,560
Speaker 1: it's I mean, we're sitting here and watching it on

229
00:13:38,559 --> 00:13:44,600
Speaker 1: the television for the last dates like our Brexit, and

230
00:13:44,600 --> 00:13:48,000
Speaker 1: it just kind of keeps going right, and so we

231
00:13:48,000 --> 00:13:50,880
Speaker 1: we wanted to. We ended up talking to Josh about it,

232
00:13:51,200 --> 00:13:53,200
Speaker 1: and his take was like, we gotta do a forward

233
00:13:53,240 --> 00:13:55,360
Speaker 1: look at this, but in order to look forward, we

234
00:13:55,400 --> 00:13:57,719
Speaker 1: kind of have to look backward as well. And one

235
00:13:57,720 --> 00:13:59,840
Speaker 1: of the takeaways of the article that I thought was

236
00:14:00,040 --> 00:14:02,679
Speaker 1: really interesting, and it's like, for all the tiktoks of

237
00:14:02,720 --> 00:14:05,319
Speaker 1: everything happening right now, especially as we head into this vote,

238
00:14:06,200 --> 00:14:08,280
Speaker 1: one of the reasons that this is so significant is

239
00:14:08,360 --> 00:14:10,760
Speaker 1: that for all the shutdowns that we've ever seen, this

240
00:14:10,840 --> 00:14:15,560
Speaker 1: is the first lead effectively by the executive branch. Everything

241
00:14:15,600 --> 00:14:19,080
Speaker 1: else has originated from the legislative branch, which is also

242
00:14:19,200 --> 00:14:23,240
Speaker 1: sort of ended up showing its limitations. And so when

243
00:14:23,240 --> 00:14:27,160
Speaker 1: you have this executive lead branch and you know, there's

244
00:14:27,200 --> 00:14:31,200
Speaker 1: that amazing quote that Trump said before this thing even started,

245
00:14:31,200 --> 00:14:35,040
Speaker 1: where he was willing to own this, it really has changed.

246
00:14:35,200 --> 00:14:40,440
Speaker 1: I think the dynamics that have helped to resolve previous

247
00:14:40,840 --> 00:14:44,840
Speaker 1: shutdowns and those same dynamics have changed now and no

248
00:14:44,880 --> 00:14:48,760
Speaker 1: one knows the way out. And on top of that,

249
00:14:49,640 --> 00:14:52,560
Speaker 1: now that we're post mid terms, you can see this

250
00:14:52,680 --> 00:14:57,320
Speaker 1: polarized politalization of America and there's really no center anymore.

251
00:14:57,320 --> 00:14:59,720
Speaker 1: And the center is where the resolution comes from. So

252
00:15:00,080 --> 00:15:03,480
Speaker 1: only do you have an executive led shutdown, you also

253
00:15:03,600 --> 00:15:07,000
Speaker 1: have a legislative branch that really can't find a middle.

254
00:15:07,480 --> 00:15:11,320
Speaker 1: And you know, we'll see what happens with these votes here. Momentarily,

255
00:15:12,080 --> 00:15:15,840
Speaker 1: uh my sort of hunches that this is not gonna

256
00:15:15,960 --> 00:15:18,920
Speaker 1: get resolved yet, you know, Like, and that's the bigger

257
00:15:19,120 --> 00:15:21,440
Speaker 1: takeaway with Josh is that we were sort of entered

258
00:15:21,680 --> 00:15:26,000
Speaker 1: a new era of how sideways government can go well.

259
00:15:26,040 --> 00:15:27,760
Speaker 1: And what's interesting too is I love how he digs

260
00:15:27,800 --> 00:15:30,320
Speaker 1: into Okay, the wall obviously the sticking point right now,

261
00:15:30,320 --> 00:15:32,160
Speaker 1: and you know, the president, this was a big issue

262
00:15:32,160 --> 00:15:34,280
Speaker 1: for him on the campaign trail, and so he wants

263
00:15:34,360 --> 00:15:37,000
Speaker 1: to be able to deliver it come election and say

264
00:15:37,040 --> 00:15:39,640
Speaker 1: I did it. But the thinking of thinking is that

265
00:15:39,680 --> 00:15:41,760
Speaker 1: if he doesn't get it done now, does he then

266
00:15:41,800 --> 00:15:45,080
Speaker 1: does it become part of the next argument with President Trump,

267
00:15:45,320 --> 00:15:47,760
Speaker 1: such as the debt sail And that's not that far off, right, Like,

268
00:15:47,960 --> 00:15:50,520
Speaker 1: you know, this other looming data on the horizon is

269
00:15:50,520 --> 00:15:55,120
Speaker 1: effectively March first, when the debt ceiling comes into play again.

270
00:15:55,400 --> 00:15:58,440
Speaker 1: So even if there's some resolution that we get through

271
00:15:58,480 --> 00:16:02,280
Speaker 1: this little moment right now, you know, thirty four days

272
00:16:02,400 --> 00:16:04,480
Speaker 1: or thirty eight days or forty two days or whatever

273
00:16:04,480 --> 00:16:07,880
Speaker 1: it ends up being, this could become an issue again

274
00:16:08,080 --> 00:16:11,920
Speaker 1: very very soon, right, and it's with much much greater

275
00:16:12,000 --> 00:16:14,280
Speaker 1: sticks even than what we're doing with now. And so

276
00:16:14,320 --> 00:16:16,880
Speaker 1: we commend the story to And also the cover. It's

277
00:16:16,880 --> 00:16:20,000
Speaker 1: a very arresting image. I know it grew out of

278
00:16:20,040 --> 00:16:23,600
Speaker 1: your brain, Jell. It's really really a nice cover. I

279
00:16:23,640 --> 00:16:25,240
Speaker 1: won't spoil it. And I know that you can probably

280
00:16:25,240 --> 00:16:26,880
Speaker 1: find it on your Twitter feed if you haven't tweeted

281
00:16:26,960 --> 00:16:29,000
Speaker 1: it out. Yeah, you can find it all over the interwebs.

282
00:16:29,040 --> 00:16:31,680
Speaker 1: It's become pretty pretty popular. But the idea is to

283
00:16:31,720 --> 00:16:36,000
Speaker 1: take a image of the White House and take away everything,

284
00:16:36,040 --> 00:16:39,320
Speaker 1: make it all dark except for one window for a

285
00:16:39,360 --> 00:16:44,120
Speaker 1: little flicker someone watching television and tweeting at the same

286
00:16:44,160 --> 00:16:46,600
Speaker 1: time probably, and elsewhere in the magazine you have a

287
00:16:46,640 --> 00:16:49,520
Speaker 1: great sit down with the CEO of Mars. This was

288
00:16:49,560 --> 00:16:52,560
Speaker 1: an event held right here at Bloomberg headquarters. It's a

289
00:16:52,600 --> 00:16:57,960
Speaker 1: debrief on with a CEO and a company that candidly

290
00:16:58,000 --> 00:17:00,520
Speaker 1: we all know but don't know that much about. It's

291
00:17:00,520 --> 00:17:03,600
Speaker 1: privately held and family owned, family owned, hundred and seven

292
00:17:03,680 --> 00:17:07,480
Speaker 1: years old. Unbelievable, right, a hundred seven year old company.

293
00:17:07,520 --> 00:17:10,359
Speaker 1: And when you think about the portfolio of brands that

294
00:17:10,680 --> 00:17:14,719
Speaker 1: that Mars and has, there's the really amazing ones like

295
00:17:14,760 --> 00:17:17,640
Speaker 1: the Eminem's and the Snickers and the Milky Ways that

296
00:17:17,920 --> 00:17:21,119
Speaker 1: the Twixes. You're like smiling at all this because people

297
00:17:21,160 --> 00:17:24,920
Speaker 1: have affinity for these they've ad and it's an amazing

298
00:17:25,000 --> 00:17:28,360
Speaker 1: and you know, Mars is a thirty five billion uh

299
00:17:28,480 --> 00:17:31,000
Speaker 1: business every year revenue, you know, which is amazing in

300
00:17:31,040 --> 00:17:33,439
Speaker 1: an environment where people are pushing back you feel like

301
00:17:33,480 --> 00:17:36,760
Speaker 1: against sugary things. And that gets to this bigger part

302
00:17:36,760 --> 00:17:39,879
Speaker 1: of the interview um which is absolutely worth spending some

303
00:17:39,920 --> 00:17:42,960
Speaker 1: time with, where he talks about the portfolio that they've

304
00:17:42,960 --> 00:17:45,760
Speaker 1: really expanded, and here's the thing that nobody actually knows.

305
00:17:45,800 --> 00:17:49,200
Speaker 1: I think as much as Mars is in the candy business,

306
00:17:49,560 --> 00:17:51,640
Speaker 1: it's actually always been in the pet space. And that

307
00:17:51,680 --> 00:17:54,280
Speaker 1: was that was certainly the wait what moment for me

308
00:17:54,440 --> 00:17:57,200
Speaker 1: reading this. Since the nineteen thirties, they've had a footprint

309
00:17:57,280 --> 00:18:00,520
Speaker 1: there and they've really expanded that big in this within

310
00:18:00,560 --> 00:18:03,679
Speaker 1: the last decade or so. And it's not just in

311
00:18:04,040 --> 00:18:06,160
Speaker 1: the places that you sort of would expect it to be,

312
00:18:06,720 --> 00:18:10,199
Speaker 1: pet food being one, they've also um there's a v

313
00:18:10,320 --> 00:18:12,919
Speaker 1: c A which is a veterinarian business, so they're actually

314
00:18:12,960 --> 00:18:15,720
Speaker 1: they've acquired that recently and now they're in the service space.

315
00:18:16,119 --> 00:18:19,200
Speaker 1: So it's also this broadening of the portfolio from manufacturing

316
00:18:19,240 --> 00:18:21,439
Speaker 1: based things, where he says, you know, one of the

317
00:18:21,720 --> 00:18:24,960
Speaker 1: if you really boil down our business, we take raw ingredients,

318
00:18:25,520 --> 00:18:28,040
Speaker 1: the corns and the cocoas of the world and turn

319
00:18:28,119 --> 00:18:31,399
Speaker 1: them into brand's people love. But they've also had this

320
00:18:31,480 --> 00:18:34,359
Speaker 1: whole service thing. So the bigger takeaway was he you know,

321
00:18:34,440 --> 00:18:37,520
Speaker 1: thirty five plus billion dollar business right now in ten years,

322
00:18:37,520 --> 00:18:40,600
Speaker 1: he says, that doubles. It's amazing, it's a really good read,

323
00:18:40,880 --> 00:18:44,080
Speaker 1: strong issue of the magazine. You can hear much more

324
00:18:44,119 --> 00:18:46,600
Speaker 1: about it on our weekend show, where we also got

325
00:18:46,640 --> 00:18:48,800
Speaker 1: a chance to catch up with Josh Green. That of

326
00:18:48,840 --> 00:18:52,639
Speaker 1: course airs all weekend. Read both those stories, Joel's interview

327
00:18:52,720 --> 00:18:55,560
Speaker 1: with the Mars CEO and the cover story on the

328
00:18:55,680 --> 00:18:58,520
Speaker 1: Terminal and on dot com today right, and on radio

329
00:18:58,560 --> 00:19:00,199
Speaker 1: over the weekend and on TV. We also at a

330
00:19:00,200 --> 00:19:03,399
Speaker 1: snippet of that interview that Joel did with Grant reads

331
00:19:03,440 --> 00:19:05,679
Speaker 1: so really good stuff. It's fun and you learn I

332
00:19:05,680 --> 00:19:08,040
Speaker 1: won't give it away what his favorite candies are and

333
00:19:08,080 --> 00:19:10,959
Speaker 1: whether he's left do you know left hand twixts right hand?

334
00:19:11,200 --> 00:19:13,879
Speaker 1: You can bring pets to work at Mars too, because

335
00:19:13,880 --> 00:19:16,159
Speaker 1: of their pet business. It doesn't surprise me as long

336
00:19:16,200 --> 00:19:18,239
Speaker 1: as the pets don't get into the chocolate, right, that

337
00:19:18,240 --> 00:19:27,840
Speaker 1: would be yes, that's day here is so out in

338
00:19:27,880 --> 00:19:31,280
Speaker 1: the cold. Yeah, that's how it feels when it comes

339
00:19:31,320 --> 00:19:33,720
Speaker 1: to so many government workers still out of work or

340
00:19:33,760 --> 00:19:36,959
Speaker 1: still kept away from their jobs because of this partial

341
00:19:37,040 --> 00:19:39,320
Speaker 1: US government shutdown. We did just have a headline cross

342
00:19:39,800 --> 00:19:42,919
Speaker 1: the Bloomberg about the Senate blocking the President's plan to

343
00:19:43,040 --> 00:19:45,960
Speaker 1: end the shutdown and fund his border While there were

344
00:19:46,040 --> 00:19:48,920
Speaker 1: two measures being voted on in the Senate, one put

345
00:19:49,000 --> 00:19:52,680
Speaker 1: forth by the Republicans, another by the Democrats, both expected

346
00:19:52,720 --> 00:19:55,360
Speaker 1: to fail. Let's though, get the latest on this. Kevin

347
00:19:55,400 --> 00:19:58,600
Speaker 1: Whitelaw is on top of it all US Government Deputy

348
00:19:58,600 --> 00:20:00,600
Speaker 1: Managing editor at Bloomberg News. He ones is on the

349
00:20:00,640 --> 00:20:04,720
Speaker 1: phone from our bureau in the nation's capital. So Kevin again,

350
00:20:05,040 --> 00:20:07,720
Speaker 1: here's the headline. Senate rejecting the President's plan to open

351
00:20:07,760 --> 00:20:10,320
Speaker 1: the government by vote of fifty one to forty seven.

352
00:20:10,920 --> 00:20:14,120
Speaker 1: This is kind of playing out as we expected. Yes, yes,

353
00:20:14,200 --> 00:20:16,639
Speaker 1: so far it is this UM was this requires sixty

354
00:20:16,720 --> 00:20:20,360
Speaker 1: votes to get something through the Senate um and they fell.

355
00:20:20,520 --> 00:20:23,359
Speaker 1: They fell nine short. There were several Republicans who voted

356
00:20:23,400 --> 00:20:26,080
Speaker 1: no and only one Democrat I believe who voted yes.

357
00:20:26,680 --> 00:20:31,080
Speaker 1: So you're now looking at a vote on the Democratic proposal, which,

358
00:20:31,359 --> 00:20:34,760
Speaker 1: to be to be clear, is basically essentially the same

359
00:20:34,840 --> 00:20:38,080
Speaker 1: built build at the Senate passed by voice vote last year.

360
00:20:38,880 --> 00:20:42,200
Speaker 1: UM aimed at keeping the government open through February eight.

361
00:20:42,560 --> 00:20:45,480
Speaker 1: So this was essentially a non controversial measure right before

362
00:20:45,480 --> 00:20:48,000
Speaker 1: the shutdown began, and it is expected to go down

363
00:20:48,400 --> 00:20:50,640
Speaker 1: in the vote that just started now in the House floor,

364
00:20:51,240 --> 00:20:54,200
Speaker 1: and so where where does this leave us? Kevin? I mean,

365
00:20:54,240 --> 00:20:57,119
Speaker 1: there has been some speculation, and maybe all of us

366
00:20:57,119 --> 00:20:59,720
Speaker 1: are just hoping for some optimism. But I felt like

367
00:20:59,720 --> 00:21:02,879
Speaker 1: I was reading and hearing a little bit more last

368
00:21:02,960 --> 00:21:05,679
Speaker 1: night and this morning about well, these votes are going

369
00:21:05,720 --> 00:21:09,280
Speaker 1: to fail, but maybe in that failure there is some

370
00:21:09,600 --> 00:21:14,200
Speaker 1: movement toward compromise. You saw the President relent last night

371
00:21:14,359 --> 00:21:16,879
Speaker 1: in his showdown is sort of state of the Union

372
00:21:16,960 --> 00:21:21,440
Speaker 1: showdown of sorts with Speaker Pelosi. What do you think?

373
00:21:21,440 --> 00:21:25,280
Speaker 1: What are you hearing? So? Um? Look, everyone, I think

374
00:21:25,320 --> 00:21:27,720
Speaker 1: once is looking for the motion because I want to

375
00:21:27,760 --> 00:21:31,720
Speaker 1: see it. The vote that just happened was the first

376
00:21:31,800 --> 00:21:34,320
Speaker 1: vote the Senator has taken to end the shutdown, very

377
00:21:34,440 --> 00:21:36,919
Speaker 1: first one since the shutdown started, aim at doing anything

378
00:21:36,920 --> 00:21:41,560
Speaker 1: to end it. So that qualifies his progress, I guess

379
00:21:41,600 --> 00:21:45,520
Speaker 1: in in in Washington these days, UM, I think even uh,

380
00:21:45,880 --> 00:21:48,560
Speaker 1: this at least restarts the conversation among senators about what

381
00:21:48,560 --> 00:21:50,400
Speaker 1: it might actually take to do it. You've got you're

382
00:21:50,400 --> 00:21:52,560
Speaker 1: gonna the two out the two bills, one with no

383
00:21:52,680 --> 00:21:56,680
Speaker 1: all funding UM at all, one with with UM with

384
00:21:56,960 --> 00:21:59,800
Speaker 1: five point seven for the wall. Now there's a question, Okay,

385
00:22:00,200 --> 00:22:02,920
Speaker 1: what might what might it actually take in theory that

386
00:22:02,960 --> 00:22:05,760
Speaker 1: conversation starts, You're gonna We're expecting an effort after this

387
00:22:05,840 --> 00:22:07,840
Speaker 1: vote fails by a by part as an effort by

388
00:22:07,840 --> 00:22:10,000
Speaker 1: senators to try to put an amendment on that would

389
00:22:10,560 --> 00:22:14,040
Speaker 1: reopen the government for three weeks to allow for negotiations

390
00:22:14,040 --> 00:22:17,000
Speaker 1: with the government open and to talk border security. Not

391
00:22:17,119 --> 00:22:19,840
Speaker 1: like that's expected to be any that different with voting

392
00:22:19,880 --> 00:22:22,240
Speaker 1: on right now, probably isn't going to change anything, but

393
00:22:22,320 --> 00:22:24,520
Speaker 1: you can start to see people trying to find some

394
00:22:24,600 --> 00:22:28,119
Speaker 1: way through this to get at least something of something

395
00:22:28,200 --> 00:22:31,120
Speaker 1: resembling normality back in place, at least for a period

396
00:22:31,160 --> 00:22:33,159
Speaker 1: of time. Yeah, I feel like as a citizen of

397
00:22:33,240 --> 00:22:35,840
Speaker 1: this wonderful guntry, it's a little embarrassing that we kind

398
00:22:35,840 --> 00:22:38,880
Speaker 1: of can't figure this out. Um, I'm curious, Kevin, because

399
00:22:39,000 --> 00:22:41,680
Speaker 1: we I feel like it's a little bit surprising that

400
00:22:41,720 --> 00:22:45,919
Speaker 1: we've actually seen concessions from the president, right. You know,

401
00:22:45,960 --> 00:22:47,640
Speaker 1: he wrote the book The Art of the Deal, and

402
00:22:47,960 --> 00:22:50,320
Speaker 1: you know kind of hanging you know, was standing tough,

403
00:22:50,400 --> 00:22:52,240
Speaker 1: if you will, on those issues that are important when

404
00:22:52,240 --> 00:22:54,439
Speaker 1: you're making some kind of deal. So it's interesting to

405
00:22:54,520 --> 00:22:57,560
Speaker 1: see that he, you know, made that concession to offer

406
00:22:58,240 --> 00:23:01,439
Speaker 1: an extension to the Daku program. You know that he

407
00:23:01,480 --> 00:23:05,560
Speaker 1: backed off in terms of you know, doing another place

408
00:23:05,600 --> 00:23:07,600
Speaker 1: to do the state of the Union. It's just kind

409
00:23:07,600 --> 00:23:12,320
Speaker 1: of interesting that we're seeing these moves. No, well, I mean,

410
00:23:12,640 --> 00:23:14,520
Speaker 1: you know, I think that that you've watched this thing

411
00:23:14,600 --> 00:23:16,879
Speaker 1: drag on for for a very long time, you're starting

412
00:23:16,880 --> 00:23:19,240
Speaker 1: to see people get a little worried about the optics

413
00:23:19,240 --> 00:23:23,359
Speaker 1: of how the soul is playing out. And and you know, um,

414
00:23:23,480 --> 00:23:25,800
Speaker 1: the senators on the margins in terms of the ones

415
00:23:25,800 --> 00:23:27,480
Speaker 1: basically in the middle, if you like, the sort of

416
00:23:27,480 --> 00:23:30,119
Speaker 1: more moderate Republicans and some of the more moderate Democrats

417
00:23:30,880 --> 00:23:34,680
Speaker 1: are all finding themselves in incredibly uncomfortable positions. The President

418
00:23:34,960 --> 00:23:38,840
Speaker 1: clearly feeling pressure his own way. Um, and you know,

419
00:23:38,920 --> 00:23:42,119
Speaker 1: obviously the tit for tat fight with the Speaker of

420
00:23:42,119 --> 00:23:45,960
Speaker 1: the House wasn't helping anything and wasn't getting um and

421
00:23:46,119 --> 00:23:48,560
Speaker 1: wasn't helping him in the end, So his ball numbers

422
00:23:48,560 --> 00:23:51,360
Speaker 1: have only gone down, they haven't gotten anywhere else. And

423
00:23:51,359 --> 00:23:53,879
Speaker 1: and um, you know that's uh, that's going to be

424
00:23:53,960 --> 00:23:57,800
Speaker 1: a real real problem for him. And so who who

425
00:23:57,800 --> 00:24:01,280
Speaker 1: are the primary actors who can move that beyond the president?

426
00:24:01,280 --> 00:24:04,919
Speaker 1: Because as you said, the Senate has not voted until today. Um,

427
00:24:05,080 --> 00:24:08,400
Speaker 1: you know, Majority Leader Mitch McConnell has has only recently

428
00:24:08,480 --> 00:24:11,000
Speaker 1: sort of re emerged at least in a public way

429
00:24:11,320 --> 00:24:14,640
Speaker 1: as a negotiator or a player in all this. Our

430
00:24:14,720 --> 00:24:19,040
Speaker 1: eyes on him, our eyes on the senators who may

431
00:24:19,080 --> 00:24:22,080
Speaker 1: be up for reelection or who are up for re

432
00:24:22,119 --> 00:24:24,600
Speaker 1: election in twenty that they could move on the on

433
00:24:24,640 --> 00:24:28,440
Speaker 1: the Republican side. Who are people watching? I mean, look,

434
00:24:28,520 --> 00:24:31,200
Speaker 1: everyone's actually watching. I mean the President is the ultimate,

435
00:24:31,240 --> 00:24:33,159
Speaker 1: of course, and everyone's watching because because he's gonna have

436
00:24:33,240 --> 00:24:35,320
Speaker 1: to sign something at this point where we are very

437
00:24:35,359 --> 00:24:38,960
Speaker 1: far away from a place where you're gonna see the Senate,

438
00:24:39,000 --> 00:24:42,040
Speaker 1: little in the House vote to override um of veto,

439
00:24:42,320 --> 00:24:44,960
Speaker 1: and so you know, everybody's trying to figure out where

440
00:24:44,960 --> 00:24:48,280
Speaker 1: the president is on this. This vote may or may

441
00:24:48,280 --> 00:24:50,400
Speaker 1: not be something of a warning shot, right. I mean,

442
00:24:50,480 --> 00:24:52,359
Speaker 1: we haven't seen yet how many Senators are going to

443
00:24:52,480 --> 00:24:55,159
Speaker 1: vote for this Democratic proposal. It's ongoing as we speak.

444
00:24:55,200 --> 00:24:57,320
Speaker 1: But you know, if they get within a few of

445
00:24:57,320 --> 00:24:59,440
Speaker 1: of sixty votes, and that tells you that they've got

446
00:24:59,480 --> 00:25:01,520
Speaker 1: enough to pass it, that's not enough to overwrite it.

447
00:25:01,560 --> 00:25:04,359
Speaker 1: They need sixty seven to overwrite a vetos, so you

448
00:25:04,400 --> 00:25:07,520
Speaker 1: know you're you're you at least have a beginning barometer

449
00:25:07,800 --> 00:25:10,800
Speaker 1: of of where people are and where the panic is.

450
00:25:10,840 --> 00:25:13,399
Speaker 1: We do expect several Republicans and all the Democrats to

451
00:25:13,440 --> 00:25:16,000
Speaker 1: vote for this um Democratic bill, and so that is

452
00:25:16,000 --> 00:25:18,399
Speaker 1: going to be the first sign that there are you know,

453
00:25:18,440 --> 00:25:20,840
Speaker 1: that there's a level of concern and that is only

454
00:25:20,920 --> 00:25:23,199
Speaker 1: likely to build over time. All right, Kevin, good to

455
00:25:23,280 --> 00:25:26,080
Speaker 1: check in with you. Kevin Whitelaw, us government deputy Managing

456
00:25:26,160 --> 00:25:28,359
Speaker 1: editor at Bloomberg News, on the phone from our bureau

457
00:25:28,520 --> 00:25:36,520
Speaker 1: in Washington, d C. MAC Journal. Now, but you let

458
00:25:36,520 --> 00:25:41,440
Speaker 1: me drive? Oh no, no, no no, no please, I'll do.

459
00:25:41,560 --> 00:25:48,359
Speaker 1: The writer l exp me. I want to drive, Just drive, baby,

460
00:25:51,160 --> 00:26:02,760
Speaker 1: good questions, trying the drive to the globe. That's things well,

461
00:26:02,800 --> 00:26:06,600
Speaker 1: dry us on Bloomberg Radio. It is time for the

462
00:26:06,680 --> 00:26:09,560
Speaker 1: job to the close. Eric Clarks, portfolio manager at Acubust

463
00:26:09,600 --> 00:26:14,520
Speaker 1: Global Advisors, joining us on the phone from San Francisco. So, Eric,

464
00:26:14,600 --> 00:26:17,040
Speaker 1: nice to have you here. Uh, tell us a little

465
00:26:17,040 --> 00:26:19,760
Speaker 1: bit about the investment environment and how you see it,

466
00:26:19,760 --> 00:26:21,800
Speaker 1: because it feels like there's a lot of negativity out

467
00:26:21,800 --> 00:26:24,320
Speaker 1: there when people talk about the outlook for earnings and

468
00:26:24,359 --> 00:26:28,160
Speaker 1: the outlook for the economy, how do you see it? Well, Hello,

469
00:26:28,760 --> 00:26:31,520
Speaker 1: January certainly better than the last time we spoke in

470
00:26:31,640 --> 00:26:35,080
Speaker 1: fourth quarter December was pretty bad. January is pretty good

471
00:26:35,080 --> 00:26:38,560
Speaker 1: from a stock perspective, But the data is pretty clear

472
00:26:38,680 --> 00:26:42,800
Speaker 1: it's getting less good. And I don't I'm not gonna

473
00:26:42,800 --> 00:26:45,840
Speaker 1: say recessionary, but certainly when you come off of a

474
00:26:45,880 --> 00:26:48,399
Speaker 1: great year the last couple of years, it's just getting

475
00:26:48,480 --> 00:26:51,560
Speaker 1: less good. And I think that's what prices we're figuring

476
00:26:51,600 --> 00:26:55,200
Speaker 1: out in Q four and technically now we're just retracing

477
00:26:55,240 --> 00:26:56,840
Speaker 1: back some of that stuff. But I still think we

478
00:26:56,920 --> 00:26:59,240
Speaker 1: have a lot of of news to get through economic

479
00:26:59,320 --> 00:27:02,639
Speaker 1: data that's not reported. Uh, that's probably you know, continuing

480
00:27:02,640 --> 00:27:04,440
Speaker 1: to kind of erode a little bit, and once the

481
00:27:04,960 --> 00:27:07,919
Speaker 1: government shutdown gets taken care of, I think a lot

482
00:27:07,960 --> 00:27:09,840
Speaker 1: of that news will hit the hit the tape, just

483
00:27:09,880 --> 00:27:11,760
Speaker 1: say yeah. I note. Do you say right now that

484
00:27:12,720 --> 00:27:14,840
Speaker 1: you should have as cash as a buffers up pretty

485
00:27:14,880 --> 00:27:18,920
Speaker 1: high based on what you normally would recommend? Well, normally, yeah,

486
00:27:18,920 --> 00:27:21,520
Speaker 1: I mean normally we run pretty fully invested. But um,

487
00:27:21,760 --> 00:27:24,800
Speaker 1: in about November of last year, we really just between

488
00:27:24,840 --> 00:27:28,760
Speaker 1: the volatility increasing and the earnings and the potential slow

489
00:27:28,840 --> 00:27:32,439
Speaker 1: down from from China and the tariffs, we just didn't

490
00:27:32,760 --> 00:27:34,760
Speaker 1: feel it was prudent to be fully invested. And we

491
00:27:34,840 --> 00:27:38,880
Speaker 1: still have that cushion because not a lot's change. I mean, technically,

492
00:27:38,880 --> 00:27:41,399
Speaker 1: we're all we've done is just retraced. We haven't broken

493
00:27:41,400 --> 00:27:44,360
Speaker 1: a downtrend yet, Earnings are still kind of slowing off

494
00:27:44,359 --> 00:27:46,520
Speaker 1: of really good numbers, and we still have a few

495
00:27:46,520 --> 00:27:48,800
Speaker 1: things to to take care of. So to us, it

496
00:27:48,880 --> 00:27:50,960
Speaker 1: just feels a little bit as we get into into

497
00:27:50,960 --> 00:27:53,760
Speaker 1: the heart of earnings, Um, we're sure to see some

498
00:27:54,040 --> 00:27:56,280
Speaker 1: you know, some good reports like today's semis and and

499
00:27:56,320 --> 00:27:59,200
Speaker 1: some not so good guidance and things from other industries.

500
00:27:59,200 --> 00:28:00,680
Speaker 1: So we want to have some cash on hand to

501
00:28:00,680 --> 00:28:03,280
Speaker 1: take advantage of that pullback if it happens. And so

502
00:28:03,359 --> 00:28:06,120
Speaker 1: what are you looking for? You know, when you when

503
00:28:06,160 --> 00:28:08,760
Speaker 1: you figure out sort of as as I think you've said,

504
00:28:08,800 --> 00:28:10,200
Speaker 1: sort of who the haves and the and the have

505
00:28:10,400 --> 00:28:13,520
Speaker 1: nots are, you know, where some of the value maybe

506
00:28:13,560 --> 00:28:16,240
Speaker 1: what are the main metrics are looking for their specific

507
00:28:16,400 --> 00:28:20,320
Speaker 1: sectors that you think are rapist. Yeah, I mean I

508
00:28:20,359 --> 00:28:22,800
Speaker 1: think at the end of the cycle you kind of

509
00:28:22,800 --> 00:28:26,280
Speaker 1: have a separation between the good industries that are staying

510
00:28:26,320 --> 00:28:29,520
Speaker 1: afloat and the good companies and then the ones that

511
00:28:29,560 --> 00:28:32,240
Speaker 1: are kind of the first to start falling and eroding,

512
00:28:32,280 --> 00:28:35,000
Speaker 1: and those usually your second tier companies. So well, you know,

513
00:28:35,080 --> 00:28:36,720
Speaker 1: if you look at the portfolio now, we're kind of

514
00:28:36,720 --> 00:28:40,240
Speaker 1: barbelled between the great and still continuing to do well

515
00:28:40,320 --> 00:28:43,880
Speaker 1: like a Lulu lem and a Costco Nike Live Nation

516
00:28:43,920 --> 00:28:46,200
Speaker 1: on the concert side. Even Netflix is number I thought

517
00:28:46,280 --> 00:28:49,000
Speaker 1: was pretty good, even Procter and Gamble on the consumer

518
00:28:49,040 --> 00:28:52,000
Speaker 1: staple side. So and we're barbelled on the other side

519
00:28:52,040 --> 00:28:55,560
Speaker 1: with some you know, it's been a pretty ugly last year,

520
00:28:55,720 --> 00:28:58,600
Speaker 1: and actually they're starting to be intriguing because they're cheap now,

521
00:28:58,880 --> 00:29:01,320
Speaker 1: they're well off, they're high, and you're starting to see

522
00:29:01,360 --> 00:29:03,640
Speaker 1: some inflection on the earning side that would be like

523
00:29:03,680 --> 00:29:06,720
Speaker 1: a mohawk on the flooring side. Even even home Depot

524
00:29:06,720 --> 00:29:09,120
Speaker 1: I still like Home Depot. UH. Some of the beer

525
00:29:09,160 --> 00:29:11,800
Speaker 1: companies look pretty washed out. So we owned Molson Corps

526
00:29:12,200 --> 00:29:14,560
Speaker 1: and then Johnson and Johnson had a pretty decent number,

527
00:29:14,800 --> 00:29:17,640
Speaker 1: but the stock hasn't really budded since that Talcum UH

528
00:29:17,720 --> 00:29:20,600
Speaker 1: news came out last in the fourth quarter, So there's

529
00:29:20,640 --> 00:29:23,440
Speaker 1: definitely some good opportunities on both sides. So where are

530
00:29:23,480 --> 00:29:26,120
Speaker 1: when have you been buying? Did you buy right after

531
00:29:26,240 --> 00:29:29,320
Speaker 1: Christmas Eve? Or is it more you kind of wrote

532
00:29:29,360 --> 00:29:30,880
Speaker 1: it out a little bit to see where we were going.

533
00:29:30,880 --> 00:29:34,080
Speaker 1: I'm just curious. Remember we were about thirty three percent

534
00:29:34,120 --> 00:29:36,400
Speaker 1: in cash the last time I was on. So yes,

535
00:29:36,440 --> 00:29:39,760
Speaker 1: we did put some money to work right right close

536
00:29:39,840 --> 00:29:42,080
Speaker 1: to the low. So I mean we bought some Netflix low.

537
00:29:42,160 --> 00:29:44,920
Speaker 1: We're still holding that. We bought some TJ Max and

538
00:29:45,040 --> 00:29:48,680
Speaker 1: Ross stores and five below on the retail, the discount retailers,

539
00:29:48,720 --> 00:29:51,200
Speaker 1: some of which we've traded out of that. They were

540
00:29:51,200 --> 00:29:53,800
Speaker 1: just plus gains in a really short period of time.

541
00:29:53,920 --> 00:29:56,600
Speaker 1: So we're down to about twenty I think twenty three

542
00:29:57,160 --> 00:29:59,520
Speaker 1: right now. So we put about ten percent of cash

543
00:29:59,520 --> 00:30:01,880
Speaker 1: to work, and I'm looking forward to putting more cash,

544
00:30:02,160 --> 00:30:04,320
Speaker 1: but at lower prices because I still think we need

545
00:30:04,360 --> 00:30:06,720
Speaker 1: to retrace a little bit lower. So talk to us

546
00:30:06,720 --> 00:30:09,040
Speaker 1: about a couple of those names that you mentioned. Lulu

547
00:30:09,200 --> 00:30:11,320
Speaker 1: is one that Carol and I've looked at a lot

548
00:30:11,920 --> 00:30:13,920
Speaker 1: over the years. What are you seeing There's such a

549
00:30:13,960 --> 00:30:17,920
Speaker 1: fascinating retail play but also really a lifestyle play in

550
00:30:17,920 --> 00:30:21,160
Speaker 1: a lot of ways. For sure, I mean ath Leisure.

551
00:30:21,240 --> 00:30:24,560
Speaker 1: You know, the death of ath leisure has has greatly exaggerated.

552
00:30:24,600 --> 00:30:26,360
Speaker 1: I mean, all you gotta do is look at all

553
00:30:26,400 --> 00:30:29,480
Speaker 1: these stores and see which ones are busy. Lulu was

554
00:30:29,520 --> 00:30:33,080
Speaker 1: a madhouse in the fourth quarter for holiday shopping and

555
00:30:33,120 --> 00:30:36,920
Speaker 1: they had a blowout quarter, raise, guidance, margins were strong.

556
00:30:37,440 --> 00:30:40,760
Speaker 1: So you know, there are certain companies that just are

557
00:30:40,800 --> 00:30:43,840
Speaker 1: resonating with consumers. People are willing to pay up so

558
00:30:43,880 --> 00:30:46,840
Speaker 1: they have good pricing power. And you know, the winners

559
00:30:46,920 --> 00:30:50,520
Speaker 1: probably for for are going to be those companies that

560
00:30:50,600 --> 00:30:54,280
Speaker 1: have some growth, have some ability to to keep pricing power.

561
00:30:54,880 --> 00:30:57,440
Speaker 1: UM and Lulu is certainly right up there. And you know,

562
00:30:57,440 --> 00:31:00,680
Speaker 1: obviously there's there's other names to Nike still is doing strong,

563
00:31:00,720 --> 00:31:04,120
Speaker 1: and I love Live Nation concerts. People are still willing

564
00:31:04,160 --> 00:31:06,720
Speaker 1: to pay uh to go to a concert and it's

565
00:31:06,760 --> 00:31:08,520
Speaker 1: not a cheap endeavor, but it's you know, we all

566
00:31:08,560 --> 00:31:12,040
Speaker 1: like our experiences. Isn't that amazing that the experiences thing?

567
00:31:12,160 --> 00:31:14,760
Speaker 1: I think is such an amazing point. And you know,

568
00:31:14,880 --> 00:31:18,040
Speaker 1: Jim Culture from TPG, you know, gives us his predictions

569
00:31:18,080 --> 00:31:20,560
Speaker 1: about the year ahead every year, and going back to

570
00:31:20,640 --> 00:31:24,040
Speaker 1: last year, the end of seventeen, he was betting hard

571
00:31:24,120 --> 00:31:28,080
Speaker 1: on experiences. They owned search to so lay among other things.

572
00:31:28,160 --> 00:31:30,560
Speaker 1: C A A. They're they're an owner of two. I

573
00:31:30,600 --> 00:31:33,600
Speaker 1: mean the this is this is one of these real

574
00:31:33,680 --> 00:31:37,480
Speaker 1: life sort of millennial trends, right, Eric, it is. But

575
00:31:37,520 --> 00:31:39,240
Speaker 1: you know what's funny concerts. I just read a road

576
00:31:39,240 --> 00:31:41,920
Speaker 1: A research report on Live Nation. I mean I went

577
00:31:41,960 --> 00:31:45,000
Speaker 1: to the Zach Brown Eagles concert in San Diego and

578
00:31:45,040 --> 00:31:48,320
Speaker 1: they were just as many baby boomers there, millennials and

579
00:31:48,400 --> 00:31:51,200
Speaker 1: gen xers. So you know, we we have we all

580
00:31:51,240 --> 00:31:54,680
Speaker 1: have a global passion for music. And it would not

581
00:31:54,760 --> 00:31:58,320
Speaker 1: shock me. I really think that Live Nation and Spotify

582
00:31:58,480 --> 00:32:01,600
Speaker 1: or Amazon will probably we eventually agree to get together

583
00:32:01,680 --> 00:32:05,959
Speaker 1: because interesting, it's too smart to put together the music streaming,

584
00:32:06,000 --> 00:32:08,360
Speaker 1: which is where all the growth is with the live events. Yeah,

585
00:32:08,440 --> 00:32:10,680
Speaker 1: you check out a Billy Joel concert right here at

586
00:32:10,680 --> 00:32:13,080
Speaker 1: the garden. I mean you're right, it's baby boomers and

587
00:32:13,120 --> 00:32:16,000
Speaker 1: it's their kids. Uh. You really get a mixed group

588
00:32:16,080 --> 00:32:18,240
Speaker 1: of generations. It's you know, and it's and it's a

589
00:32:18,240 --> 00:32:25,200
Speaker 1: fun baby boomers, maybe generous for the all right, it's

590
00:32:25,200 --> 00:32:28,080
Speaker 1: a great entertainment. Yeah there, But but you know it

591
00:32:28,120 --> 00:32:31,040
Speaker 1: speaks to We've had this conversation a lot, Jason about

592
00:32:31,040 --> 00:32:33,080
Speaker 1: you look at the retail environment. We had a guest

593
00:32:33,400 --> 00:32:35,360
Speaker 1: earlier this I think it was earlier this week or

594
00:32:35,400 --> 00:32:37,440
Speaker 1: was it last week? Just you know this whole idea

595
00:32:37,440 --> 00:32:39,120
Speaker 1: of you walk into a mall and you're walk into

596
00:32:39,120 --> 00:32:41,400
Speaker 1: a store, You're like, it's the same old stuff, and

597
00:32:41,520 --> 00:32:45,760
Speaker 1: I much rather spend money on an experience or going

598
00:32:45,800 --> 00:32:49,240
Speaker 1: somewhere with my family. I don't know, So I mean

599
00:32:49,280 --> 00:32:51,320
Speaker 1: that that puts a lot of pressure on retailers to

600
00:32:51,400 --> 00:32:54,160
Speaker 1: really think about the experience, and the ones that get

601
00:32:54,200 --> 00:32:57,240
Speaker 1: it right get big multiples and good stock prices, and

602
00:32:57,280 --> 00:32:59,600
Speaker 1: the ones that don't go the way of J. C.

603
00:32:59,680 --> 00:33:02,480
Speaker 1: Penny sears well. And you know this has been top

604
00:33:02,520 --> 00:33:04,160
Speaker 1: of mind for me too, and I know this is

605
00:33:04,160 --> 00:33:06,520
Speaker 1: one of your top holdings. Eric, I just got back

606
00:33:06,640 --> 00:33:09,120
Speaker 1: with my family from Disney World and the experience there,

607
00:33:09,160 --> 00:33:11,400
Speaker 1: and candidly, the amount of money that you spend for

608
00:33:11,400 --> 00:33:15,560
Speaker 1: that experience, Uh, pretty amazing. Eric Clark, portfolio manager Acuvest

609
00:33:15,560 --> 00:33:18,840
Speaker 1: Global Adviser, joining us on the phone from San Francisco.

610
00:33:18,880 --> 00:33:24,040
Speaker 1: She always catch them ears. Did not get ears the boys, Alice.

611
00:33:24,320 --> 00:33:26,960
Speaker 1: Alice did not get ears. But she has this cute

612
00:33:26,960 --> 00:33:29,440
Speaker 1: little sweatshirt that has ears on a little mini mouse things,

613
00:33:29,440 --> 00:33:33,080
Speaker 1: so she's all covered. Don't please, don't worry about how

614
00:33:33,160 --> 00:33:36,360
Speaker 1: cute Alice is all the time. She's always cute. Thanks

615
00:33:36,400 --> 00:33:38,880
Speaker 1: for listening to Bloomberg Business Week. You can subscribe to

616
00:33:38,920 --> 00:33:42,000
Speaker 1: the podcast on iTunes, SoundCloud, or Bloomberg dot com. You

617
00:33:42,000 --> 00:33:44,479
Speaker 1: can also listen to our radio show every weekday at

618
00:33:44,480 --> 00:33:46,800
Speaker 1: two pm Eastern only on Bloomberg Radio