1 00:00:00,240 --> 00:00:07,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,119 --> 00:00:13,360 Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the 3 00:00:13,400 --> 00:00:16,000 Speaker 2: top stories in the coming week from our Daybreak anchors 4 00:00:16,079 --> 00:00:18,800 Speaker 2: all around the world. Straight Ahead on the program, we'll 5 00:00:18,840 --> 00:00:21,599 Speaker 2: look ahead to the final monetary policy decision from the 6 00:00:21,640 --> 00:00:24,040 Speaker 2: Fed of twenty twenty five and how that could affect 7 00:00:24,079 --> 00:00:27,640 Speaker 2: interest rates into the next year. I'm Nathan Hager in Washington. 8 00:00:27,720 --> 00:00:30,160 Speaker 3: I'm Caline Hegger in London, where we're looking ahead to 9 00:00:30,240 --> 00:00:33,320 Speaker 3: the black Hat cybersecurity conference in London. 10 00:00:33,520 --> 00:00:37,040 Speaker 4: I'm Doug Prisner looking at why China's economy is stuck 11 00:00:37,080 --> 00:00:37,880 Speaker 4: in deflation. 12 00:00:38,920 --> 00:00:42,919 Speaker 2: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 13 00:00:42,960 --> 00:00:46,000 Speaker 2: eleven three zero, New York, Bloomberg ninety nine to one. 14 00:00:45,960 --> 00:00:51,440 Speaker 4: Washington, DC, Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 15 00:00:51,840 --> 00:00:54,080 Speaker 4: Sirius XM one twenty one, and. 16 00:00:54,120 --> 00:00:56,960 Speaker 2: Around the world on Bloomberg Radio, dot Com and the 17 00:00:57,000 --> 00:01:04,760 Speaker 2: Bloomberg Business app. Good day to you. I'm Nathan Hager. 18 00:01:04,880 --> 00:01:08,679 Speaker 2: We begin today's program with the Federal Reserve. The Central 19 00:01:08,720 --> 00:01:11,320 Speaker 2: Bank holds its final two day policy meeting of twenty 20 00:01:11,360 --> 00:01:15,720 Speaker 2: twenty five this week, issuing its final monetary policy decision 21 00:01:15,720 --> 00:01:18,760 Speaker 2: of the year on Wednesday. So for more on the 22 00:01:18,800 --> 00:01:21,560 Speaker 2: path ahead four interest rates, we are very pleased to 23 00:01:21,600 --> 00:01:26,160 Speaker 2: be joined by Stuart Paul, us economist with Bloomberg Economics. Stuart, 24 00:01:26,160 --> 00:01:28,160 Speaker 2: thanks for being with us. And it seems as though 25 00:01:28,200 --> 00:01:30,560 Speaker 2: the market is all but fully priced in that we 26 00:01:30,640 --> 00:01:33,640 Speaker 2: are going to get a rate cut this week. Did 27 00:01:33,720 --> 00:01:36,440 Speaker 2: some of the private data that we've seen ahead of 28 00:01:36,440 --> 00:01:38,720 Speaker 2: this decision sort of shake any of that, bet? 29 00:01:38,800 --> 00:01:40,320 Speaker 5: I don't think so. When we look at some of 30 00:01:40,360 --> 00:01:43,560 Speaker 5: the private sector data, including the ADP report showing a 31 00:01:43,560 --> 00:01:47,040 Speaker 5: pretty cool labor market, and then some of the official 32 00:01:47,120 --> 00:01:52,480 Speaker 5: data as well, relatively weak manufacturing in the month of September, 33 00:01:53,200 --> 00:01:56,480 Speaker 5: import prices that were relatively dull. When we receive those 34 00:01:57,040 --> 00:02:01,320 Speaker 5: data points earlier last week, it basically gave the green 35 00:02:01,400 --> 00:02:03,560 Speaker 5: light for this rate cut. So I don't think that 36 00:02:03,600 --> 00:02:08,800 Speaker 5: the Fed is going to be that concerned about whether 37 00:02:08,840 --> 00:02:12,080 Speaker 5: it can defend its decision to cut when it meets 38 00:02:12,080 --> 00:02:14,720 Speaker 5: this week. I think that the bigger conversation around the 39 00:02:14,760 --> 00:02:18,160 Speaker 5: table at the FOMC meeting is going to be what 40 00:02:18,720 --> 00:02:21,480 Speaker 5: message to send to the markets and what message to 41 00:02:21,560 --> 00:02:25,160 Speaker 5: send to interested parties out there when it releases it's 42 00:02:25,200 --> 00:02:28,120 Speaker 5: summary of economic projections. I think that's where we're going 43 00:02:28,160 --> 00:02:30,560 Speaker 5: to see a more division and in fact, maybe a 44 00:02:30,560 --> 00:02:31,520 Speaker 5: little bit of confusion. 45 00:02:32,440 --> 00:02:35,560 Speaker 2: How so, I mean, I guess we have seen sort 46 00:02:35,600 --> 00:02:39,359 Speaker 2: of diversion of thinking when it comes to where policy 47 00:02:39,440 --> 00:02:42,440 Speaker 2: should go from even some of the FED speakers ahead 48 00:02:42,480 --> 00:02:45,040 Speaker 2: of this meeting. But I mean, how much of a 49 00:02:45,160 --> 00:02:47,720 Speaker 2: change could we see in the dot plot. 50 00:02:47,919 --> 00:02:50,120 Speaker 5: I think it's going to be pretty significant in twenty 51 00:02:50,160 --> 00:02:53,000 Speaker 5: twenty six. And I think that even more important than 52 00:02:53,120 --> 00:02:57,480 Speaker 5: the dispersion of dots in the dot plot included in 53 00:02:57,520 --> 00:03:01,639 Speaker 5: the summary of Economic projections, is to remember that the 54 00:03:01,720 --> 00:03:04,880 Speaker 5: voters on the FMC next year are going to be 55 00:03:04,919 --> 00:03:08,120 Speaker 5: shifting pretty dramatically. There is going to be a contingent 56 00:03:08,240 --> 00:03:13,359 Speaker 5: of hawkish regional Fed bank presidents that become voters, and 57 00:03:13,400 --> 00:03:17,079 Speaker 5: among them are Dallas FED President Laurie Logan, Cleveland FED 58 00:03:17,120 --> 00:03:20,480 Speaker 5: President Beth Hammock. Those are some folks who were among 59 00:03:20,600 --> 00:03:24,639 Speaker 5: the more hawkish, among the more hawkish and the more 60 00:03:24,800 --> 00:03:29,560 Speaker 5: vocal FED speakers over the last several months, and when 61 00:03:29,560 --> 00:03:32,000 Speaker 5: they become voters, it's going to be all the more 62 00:03:32,040 --> 00:03:34,880 Speaker 5: important to try to identify which dots they are and 63 00:03:34,920 --> 00:03:37,920 Speaker 5: I expect they're going to be among the more hawkish 64 00:03:37,960 --> 00:03:40,800 Speaker 5: cluster when we look into twenty twenty six. A lot 65 00:03:40,800 --> 00:03:44,440 Speaker 5: of attention has been put toward who the next FED 66 00:03:44,600 --> 00:03:46,760 Speaker 5: chairman is going to be. But I think then more 67 00:03:46,800 --> 00:03:50,120 Speaker 5: important actually than who the next FED chairman is is 68 00:03:50,640 --> 00:03:54,680 Speaker 5: this point about division on the FED, because we're going 69 00:03:54,680 --> 00:03:55,960 Speaker 5: to see a lot of it. We're going to see 70 00:03:55,960 --> 00:03:58,520 Speaker 5: a growing division on the FED, and. 71 00:03:58,560 --> 00:04:02,160 Speaker 2: We've even heard some concerns raised. I guess you could 72 00:04:02,240 --> 00:04:06,000 Speaker 2: say about whether that next FED chair is going to 73 00:04:06,080 --> 00:04:08,760 Speaker 2: be able to deliver the kind of rapid rate cuts 74 00:04:09,120 --> 00:04:11,720 Speaker 2: that President Trump has been looking for. We heard from 75 00:04:12,080 --> 00:04:14,440 Speaker 2: p Jim's Greg Peters just in the last couple of 76 00:04:14,480 --> 00:04:17,240 Speaker 2: days saying, even if it is Kevin has it, the 77 00:04:17,279 --> 00:04:20,640 Speaker 2: President's White House Economic advisor, he might not be able 78 00:04:20,680 --> 00:04:23,320 Speaker 2: to get that kind of consensus. How do you see it. 79 00:04:23,680 --> 00:04:25,440 Speaker 5: I think that's right. I think it's going to be 80 00:04:25,480 --> 00:04:28,880 Speaker 5: difficult for the next FED chairman to build a coalition 81 00:04:29,040 --> 00:04:31,800 Speaker 5: of voters that can show some sort of a united 82 00:04:31,880 --> 00:04:34,520 Speaker 5: front around the pace of rate cuts. I think that's 83 00:04:34,560 --> 00:04:37,760 Speaker 5: going to be true of any FED chairman. It seems 84 00:04:37,800 --> 00:04:39,520 Speaker 5: as though a lot of attention over the last week 85 00:04:39,560 --> 00:04:42,239 Speaker 5: has turned to whether or not somebody like Kevin Hassett, 86 00:04:42,320 --> 00:04:46,279 Speaker 5: someone coming from the White House, has the credibility that 87 00:04:46,920 --> 00:04:50,000 Speaker 5: the Fed will remain devoted to its two percent inflation target. 88 00:04:50,480 --> 00:04:54,920 Speaker 5: Somebody like that has the credibility to keep markets calm. 89 00:04:55,279 --> 00:04:58,200 Speaker 5: I will say that when the trial balloon was floated 90 00:04:58,680 --> 00:05:02,160 Speaker 5: a couple of weeks ago. Now regarding Kevin Hassett as 91 00:05:02,279 --> 00:05:06,800 Speaker 5: the finalist for the chairmanship, he passed the markets test 92 00:05:06,880 --> 00:05:10,480 Speaker 5: with flying colors. Equities rallied, two and ten year rates fell. 93 00:05:10,520 --> 00:05:13,120 Speaker 5: It's exactly what the White House wants to see. So 94 00:05:13,240 --> 00:05:15,480 Speaker 5: as much as we've heard chatter over the last week 95 00:05:15,600 --> 00:05:19,760 Speaker 5: questioning whether somebody like Hassett has the credibility to build 96 00:05:19,800 --> 00:05:23,240 Speaker 5: a coalition or to maintain the FEDS two percent inflation target, 97 00:05:24,240 --> 00:05:27,200 Speaker 5: it seems as though the market thinks he has enough credibility. 98 00:05:27,480 --> 00:05:30,520 Speaker 5: It seems as though to me, no matter who the 99 00:05:30,560 --> 00:05:32,919 Speaker 5: next FED chairman is, it's going to be difficult to 100 00:05:32,920 --> 00:05:36,719 Speaker 5: build a coalition. I think that's just the nature of 101 00:05:36,880 --> 00:05:40,360 Speaker 5: the evolving voting roster at the FOMC right now. 102 00:05:40,720 --> 00:05:44,440 Speaker 2: So, given the evolving roster, how much attention should the 103 00:05:44,480 --> 00:05:48,680 Speaker 2: markets be putting on chairman Powell's news conference after the 104 00:05:48,720 --> 00:05:50,400 Speaker 2: decision on Wednesday. 105 00:05:50,200 --> 00:05:52,320 Speaker 5: I think that markets will put a lot of weight 106 00:05:52,360 --> 00:05:55,800 Speaker 5: on it. Basically, no matter what, he still is the 107 00:05:55,839 --> 00:05:58,880 Speaker 5: person who will be leading the FOMC for pretty close 108 00:05:59,160 --> 00:06:02,400 Speaker 5: to six months, and I think that the question is 109 00:06:02,400 --> 00:06:05,880 Speaker 5: going to be around whether the FED will maintain any 110 00:06:05,920 --> 00:06:08,719 Speaker 5: sort of cutting pace in the first half of next year, 111 00:06:09,160 --> 00:06:12,040 Speaker 5: given the expectation that a new more dubbish chairman will 112 00:06:12,080 --> 00:06:14,640 Speaker 5: take the reins starting in May. So I think that 113 00:06:14,920 --> 00:06:19,120 Speaker 5: when we see this press conference from FED Chairman Powell 114 00:06:19,440 --> 00:06:21,960 Speaker 5: on Wednesday, the question is really going to be what's 115 00:06:22,000 --> 00:06:23,880 Speaker 5: it going to look like in January, what's it going 116 00:06:23,960 --> 00:06:25,680 Speaker 5: to look like as we get towards the end of 117 00:06:25,760 --> 00:06:30,040 Speaker 5: Q one and into Q two, What is the Board 118 00:06:30,080 --> 00:06:33,600 Speaker 5: of Governors and what are the regional Fed bank presidents 119 00:06:33,640 --> 00:06:36,160 Speaker 5: thinking about cuts in the first half of next year. 120 00:06:36,800 --> 00:06:39,880 Speaker 5: Right now, our base case in Bloomberg Economics is for 121 00:06:39,920 --> 00:06:42,520 Speaker 5: the FED to move more towards a quarterly cadence of 122 00:06:42,600 --> 00:06:45,560 Speaker 5: quarter point cuts next year, and that's based on our 123 00:06:45,720 --> 00:06:50,640 Speaker 5: expectations for economic fundamentals right now. I think that FED 124 00:06:50,720 --> 00:06:54,320 Speaker 5: Chairman Powell is going to try his best to not 125 00:06:54,480 --> 00:06:59,520 Speaker 5: show his hand in any one direction. But again when 126 00:06:59,560 --> 00:07:01,560 Speaker 5: we just at the evolving roster, it's going to be 127 00:07:01,640 --> 00:07:05,640 Speaker 5: very difficult next year to deliver quick rate cuts the 128 00:07:05,720 --> 00:07:07,040 Speaker 5: kind of the president wants. 129 00:07:07,279 --> 00:07:09,800 Speaker 2: Yeah, it is going to be a fascinating discussion and 130 00:07:09,840 --> 00:07:13,400 Speaker 2: a fascinating final decision coming up later this week. Thank 131 00:07:13,440 --> 00:07:15,440 Speaker 2: you for this, Stuart, really great having you on with us. 132 00:07:15,480 --> 00:07:19,560 Speaker 2: That is Stuart paul Us, economist with Bloomberg Economics. We 133 00:07:19,680 --> 00:07:22,800 Speaker 2: move next to more corporate earnings in the tech space. 134 00:07:22,880 --> 00:07:26,720 Speaker 2: We hear from two big names on Wednesday, Oracle and Adobe. 135 00:07:27,040 --> 00:07:30,640 Speaker 2: Let's bring in Bloomberg Intelligence technology analyst Anurag Rana from 136 00:07:30,640 --> 00:07:33,840 Speaker 2: More on this latest round of tech results. Anurag, these 137 00:07:33,880 --> 00:07:35,480 Speaker 2: are a couple of names that have kind of been 138 00:07:35,520 --> 00:07:39,120 Speaker 2: hit pretty hard lately around the question about whether artificial 139 00:07:39,120 --> 00:07:43,000 Speaker 2: intelligence valuations have gotten two stretch. So let's start with Oracle. 140 00:07:43,520 --> 00:07:45,360 Speaker 2: How high is the bar for their earnings? 141 00:07:45,560 --> 00:07:47,440 Speaker 6: So I think they have to come out and basically 142 00:07:47,520 --> 00:07:50,360 Speaker 6: explain that the big backlock of orders that they have 143 00:07:50,440 --> 00:07:54,080 Speaker 6: from open AI, how is that going to get funded 144 00:07:54,440 --> 00:07:57,720 Speaker 6: and how is that going to get recognized into revenue. 145 00:07:58,400 --> 00:08:01,920 Speaker 6: That is the single biggest question in our mind at 146 00:08:01,920 --> 00:08:04,440 Speaker 6: this point, especially when you go back and look at 147 00:08:04,440 --> 00:08:07,520 Speaker 6: the stock chart. It had a massive run up when 148 00:08:07,520 --> 00:08:11,160 Speaker 6: they Oracle announced that big order book from open Aie. 149 00:08:11,520 --> 00:08:13,800 Speaker 6: But in the last you could say, two months, two 150 00:08:13,800 --> 00:08:15,680 Speaker 6: and a half months, there has been a lot of 151 00:08:15,720 --> 00:08:18,920 Speaker 6: scrutiny in the market as to how some of this 152 00:08:19,120 --> 00:08:21,400 Speaker 6: is going to get funded, and that I think is 153 00:08:21,840 --> 00:08:24,760 Speaker 6: what has been being on the stock. So the management 154 00:08:24,800 --> 00:08:28,440 Speaker 6: has to come and explain their strategy of data center 155 00:08:28,480 --> 00:08:31,720 Speaker 6: expansion and where that money is going to come from. 156 00:08:31,960 --> 00:08:34,120 Speaker 2: Yeah, to your point, I think we saw in just 157 00:08:34,200 --> 00:08:37,520 Speaker 2: the last few days report that the cost of protecting 158 00:08:37,640 --> 00:08:41,480 Speaker 2: Oracle's debt from default at its highest level in more 159 00:08:41,520 --> 00:08:44,920 Speaker 2: than fifteen years. I mean, what kind of explanation can 160 00:08:44,960 --> 00:08:48,160 Speaker 2: we expect for how Oracle can kind of service that. 161 00:08:48,440 --> 00:08:50,000 Speaker 6: So one of the things you have to think about 162 00:08:50,000 --> 00:08:53,800 Speaker 6: it is there is a lot of investor demand for 163 00:08:53,840 --> 00:08:56,959 Speaker 6: anything that's related to data center expansion because I think 164 00:08:56,960 --> 00:09:00,200 Speaker 6: people understand that's an area where you are looking act 165 00:09:00,280 --> 00:09:03,320 Speaker 6: more and more build up over the next several years. 166 00:09:03,520 --> 00:09:06,480 Speaker 6: So you know, whether it's private credit or whether it 167 00:09:06,600 --> 00:09:09,920 Speaker 6: is private equity. A lot of these companies may be 168 00:09:10,040 --> 00:09:12,559 Speaker 6: able to fund some of that expansion. But the big 169 00:09:12,640 --> 00:09:15,160 Speaker 6: question is you know at what level, because one of 170 00:09:15,160 --> 00:09:18,520 Speaker 6: the things is open AI has talked about, you know, 171 00:09:18,679 --> 00:09:22,600 Speaker 6: several hundred billion dollar investments out in the public for 172 00:09:22,840 --> 00:09:26,040 Speaker 6: those data centers, so the appetite is not so much. 173 00:09:26,080 --> 00:09:28,880 Speaker 6: And also remember Oracle is not the one that's funding 174 00:09:28,920 --> 00:09:31,520 Speaker 6: a lot of that from their own balance sheet or 175 00:09:31,559 --> 00:09:34,080 Speaker 6: their cash flow. They go out in the market, they 176 00:09:34,440 --> 00:09:38,760 Speaker 6: raise the funds with the help of a consortium, and 177 00:09:38,800 --> 00:09:41,760 Speaker 6: that goes you know, into that special purpose vehicle that 178 00:09:41,840 --> 00:09:47,120 Speaker 6: does not impact Oracle's balance sheet directly, but at the 179 00:09:47,200 --> 00:09:48,640 Speaker 6: end of the day, they are the ones who will 180 00:09:48,640 --> 00:09:51,080 Speaker 6: be recognizing some of the revenue from it, not just 181 00:09:51,160 --> 00:09:54,480 Speaker 6: the investors. So they have to come out and explain 182 00:09:54,520 --> 00:09:55,640 Speaker 6: a bunch of these things. 183 00:09:55,960 --> 00:09:58,360 Speaker 2: Where do you see Oracle stacking up compared to some 184 00:09:58,400 --> 00:10:00,480 Speaker 2: of the other hyper scalers. I mean, think of the 185 00:10:00,520 --> 00:10:03,920 Speaker 2: Magnificent Seven all the time, and Oracle, of course isn't 186 00:10:04,000 --> 00:10:07,120 Speaker 2: part of that cohort. Is it going to stay behind? 187 00:10:07,520 --> 00:10:09,240 Speaker 6: So one of the things that we have talked about 188 00:10:09,320 --> 00:10:12,120 Speaker 6: quite a bit over the last few years when it 189 00:10:12,160 --> 00:10:15,720 Speaker 6: comes to cloud computing, there are three big players, Amazon 190 00:10:15,760 --> 00:10:18,600 Speaker 6: being the biggest one, Microsoft after that, and then Google, 191 00:10:18,920 --> 00:10:22,720 Speaker 6: you know, the third player. But because of this massive 192 00:10:22,760 --> 00:10:27,160 Speaker 6: demand for AI infrastructure and AI infrastructure workloads, Oracle has 193 00:10:27,240 --> 00:10:30,000 Speaker 6: really kicked up and become what we call us the 194 00:10:30,040 --> 00:10:33,160 Speaker 6: fourth hyperscale cloud providers. And the big question is are 195 00:10:33,200 --> 00:10:36,240 Speaker 6: they each other taking market share from each other? There 196 00:10:36,280 --> 00:10:39,080 Speaker 6: is a little bit of that going along, but at 197 00:10:39,080 --> 00:10:42,480 Speaker 6: the same time, the market has expanded very very strongly 198 00:10:42,760 --> 00:10:44,440 Speaker 6: because one of the things that you have to do 199 00:10:44,520 --> 00:10:48,200 Speaker 6: is when you're running an application like chat GPT, you 200 00:10:48,280 --> 00:10:50,760 Speaker 6: will be running on a cloud infrastructure. You typically don't 201 00:10:50,840 --> 00:10:54,840 Speaker 6: run that in somebody's internal data center. Same thing for 202 00:10:54,920 --> 00:10:57,760 Speaker 6: an enterprise when they are expanding some of these AI workloads, 203 00:10:57,960 --> 00:11:00,920 Speaker 6: cloud is usually where it's hosted. So when you take 204 00:11:00,960 --> 00:11:04,440 Speaker 6: a look at that, the the end markets, which is 205 00:11:04,640 --> 00:11:09,240 Speaker 6: cloud infrastructure, has actually grown quite nicely, which gives growth 206 00:11:09,240 --> 00:11:13,000 Speaker 6: opportunities for all foward vendors and not just one or two. 207 00:11:13,200 --> 00:11:15,520 Speaker 2: Let's talk about Adobe. Now, looking at a chart on 208 00:11:15,600 --> 00:11:19,080 Speaker 2: that stock it's kind of upper left to lower right 209 00:11:19,240 --> 00:11:23,080 Speaker 2: for the whole year here. So what are the expectations 210 00:11:23,120 --> 00:11:24,440 Speaker 2: around Adobe's results? 211 00:11:24,679 --> 00:11:27,240 Speaker 6: Yeah, I think that seems to be a big story 212 00:11:27,320 --> 00:11:29,880 Speaker 6: when it comes to Adobe, that you know their lunch 213 00:11:29,960 --> 00:11:33,720 Speaker 6: is going to get eaten up by AI related tools 214 00:11:33,760 --> 00:11:36,240 Speaker 6: that are out there, free tools. So when you look 215 00:11:36,280 --> 00:11:38,560 Speaker 6: at Adobe and you go back a few years before 216 00:11:38,559 --> 00:11:41,920 Speaker 6: the launch of any large language models, this company used 217 00:11:41,960 --> 00:11:46,120 Speaker 6: to trade even higher than Microsoft because of high free 218 00:11:46,160 --> 00:11:49,720 Speaker 6: cash flow, the perception that nothing can happen to some 219 00:11:49,800 --> 00:11:54,760 Speaker 6: of their marquee products, that is Photoshop or Acrobat, et cetera. 220 00:11:55,280 --> 00:11:58,400 Speaker 6: But what has happened is when you're seeing these free 221 00:11:58,400 --> 00:12:03,120 Speaker 6: products that can create images and videos, investors allverrid that 222 00:12:03,320 --> 00:12:05,839 Speaker 6: their code business is going to get attacked and they 223 00:12:05,840 --> 00:12:08,319 Speaker 6: won't be able to protect that. Now, when you look 224 00:12:08,360 --> 00:12:11,120 Speaker 6: at their results, at least in the last three quarters, 225 00:12:11,160 --> 00:12:15,120 Speaker 6: they have reported decent results, but at the same time, 226 00:12:15,440 --> 00:12:18,480 Speaker 6: you know they have not seen any acceleration, and I 227 00:12:18,520 --> 00:12:21,280 Speaker 6: think that's always brings that question mark. So we're going 228 00:12:21,320 --> 00:12:23,080 Speaker 6: to see that a little bit of the same thing. 229 00:12:23,480 --> 00:12:25,679 Speaker 6: They're going to come out talk about how they can 230 00:12:25,720 --> 00:12:27,880 Speaker 6: grow next year, They're going to talk about their own 231 00:12:27,920 --> 00:12:31,160 Speaker 6: AI products. The question is whether that's going to be 232 00:12:31,280 --> 00:12:34,880 Speaker 6: enough to pacify this this little fear that's out there 233 00:12:34,920 --> 00:12:38,320 Speaker 6: in the market that Adobe is a net casualty of 234 00:12:38,440 --> 00:12:40,439 Speaker 6: AI related developments. 235 00:12:40,640 --> 00:12:42,560 Speaker 2: Thanks for this on a rock, great having you with us. 236 00:12:42,679 --> 00:12:46,880 Speaker 2: That's honorog Ran, a technology analyst for Bloomberg Intelligence, and 237 00:12:46,920 --> 00:12:49,439 Speaker 2: coming up on Bloomberg Daybreak weekend, we look ahead to 238 00:12:49,480 --> 00:12:53,960 Speaker 2: the black Hat Cybersecurity Conference in London. I'm Nathan Hager, 239 00:12:54,160 --> 00:13:08,160 Speaker 2: and this is Bloomberg. This is Bloomberg day Break weekend, 240 00:13:08,200 --> 00:13:10,960 Speaker 2: our global look ahead at the top stories for investors 241 00:13:10,960 --> 00:13:13,920 Speaker 2: in the coming week. I'm Nathan Hager in Washington. Up 242 00:13:14,000 --> 00:13:16,560 Speaker 2: later in the program, we'll preview upcoming data out of 243 00:13:16,640 --> 00:13:19,680 Speaker 2: China in the health of the Chinese economy. But first, 244 00:13:19,880 --> 00:13:25,320 Speaker 2: cybersecurity challenges facing Europe are clear. Airports, businesses, financial institutions 245 00:13:25,360 --> 00:13:27,840 Speaker 2: are all at risk from an increase in cyber attacks 246 00:13:27,840 --> 00:13:31,280 Speaker 2: by criminals and state actors. That's the black drop to 247 00:13:31,320 --> 00:13:34,320 Speaker 2: the Black Hat Europe conference in London, which gathers top 248 00:13:34,320 --> 00:13:37,920 Speaker 2: professionals for briefings on modern day strategies to counter those 249 00:13:37,920 --> 00:13:41,319 Speaker 2: threats online. Let's get more from Bloomberg Daybreak Europe banker 250 00:13:41,360 --> 00:13:43,720 Speaker 2: Caroline Hepger in London, Nathan. 251 00:13:43,800 --> 00:13:47,640 Speaker 3: The Black Hat cyber Security Conference in London over the 252 00:13:47,679 --> 00:13:50,040 Speaker 3: next few days will look at the latest trends in 253 00:13:50,080 --> 00:13:54,600 Speaker 3: cyber security, as attacks are becoming increasingly costly for governments 254 00:13:54,640 --> 00:13:58,640 Speaker 3: and businesses, sometimes into the billions. Briefings will be held 255 00:13:58,679 --> 00:14:02,160 Speaker 3: on how to bolster sign defense strategies in both the 256 00:14:02,200 --> 00:14:07,280 Speaker 3: public and private sector. The Bloomberg London Tech Summit recently 257 00:14:07,679 --> 00:14:11,800 Speaker 3: featured interviews with top CEOs on how businesses can build 258 00:14:11,840 --> 00:14:17,240 Speaker 3: resilience in a rapidly changing threat landscape. Speaking at that summit, 259 00:14:17,440 --> 00:14:21,000 Speaker 3: Yevgeny Dibrov, who is the CEO of the cyber security 260 00:14:21,080 --> 00:14:25,160 Speaker 3: firm Armis, who explained why there's been such a surge 261 00:14:25,160 --> 00:14:27,640 Speaker 3: in interest in the company, the. 262 00:14:27,600 --> 00:14:30,960 Speaker 7: Great demand that we are witnessing right now because of 263 00:14:31,480 --> 00:14:38,200 Speaker 7: attacks on critical infrastructure. Basically all the geopolitical tensions Russia, Iran, 264 00:14:39,000 --> 00:14:42,480 Speaker 7: North Korea, everybody. You see a lot of targeting infrastructure, 265 00:14:42,520 --> 00:14:46,960 Speaker 7: targeting national infrastructure, the most critical areas from airports to 266 00:14:47,120 --> 00:14:50,760 Speaker 7: grids to manufacturing in the US, in the Mia, we 267 00:14:50,880 --> 00:14:53,120 Speaker 7: see a lot of UK as well. 268 00:14:53,560 --> 00:14:57,880 Speaker 3: That was Armis CEO Yevgeny Dibrov being interviewed there by 269 00:14:57,880 --> 00:15:03,200 Speaker 3: Bloomberg's senior cyber security reporter Jordan Robertson, and Jordan is 270 00:15:03,200 --> 00:15:06,520 Speaker 3: with me. Great to have you on the program. It 271 00:15:06,720 --> 00:15:12,040 Speaker 3: has been such an important and interesting year, hasn't it? 272 00:15:12,160 --> 00:15:17,280 Speaker 3: For your beat? The era of rapid digital advancement of AI. 273 00:15:17,800 --> 00:15:21,480 Speaker 3: Can you just talk to us about the elevated kind 274 00:15:21,520 --> 00:15:24,760 Speaker 3: of cyber threats levels that we're seeing in the UK 275 00:15:25,080 --> 00:15:27,320 Speaker 3: in Europe. I mean you heard it in that interview 276 00:15:27,320 --> 00:15:31,280 Speaker 3: that you did. It's everything from big companies to personal 277 00:15:31,360 --> 00:15:35,640 Speaker 3: data to airports. This ahead of discussions at black Hats. 278 00:15:35,720 --> 00:15:37,400 Speaker 8: Sure, yeah, thanks for having me on. You know, if 279 00:15:37,440 --> 00:15:39,200 Speaker 8: you take a look at the conference agenda for this 280 00:15:39,240 --> 00:15:41,160 Speaker 8: Blackhat conference, I mean, first of all, it's a very 281 00:15:41,160 --> 00:15:45,240 Speaker 8: technical conference. It's technical content for technical people, but the 282 00:15:45,400 --> 00:15:48,440 Speaker 8: overarching themes are still the same that people would kind 283 00:15:48,440 --> 00:15:50,520 Speaker 8: of recognize. And there are two main themes that are 284 00:15:50,520 --> 00:15:53,440 Speaker 8: happening in cybersecurity right now. One and perhaps the biggest 285 00:15:53,440 --> 00:15:56,880 Speaker 8: one is ransomware. Computer hacks used to be pretty secret things. 286 00:15:57,040 --> 00:16:00,440 Speaker 8: Companies by and large could keep these events secret unless 287 00:16:00,480 --> 00:16:02,400 Speaker 8: certain data was leaked, and they could prove that certain 288 00:16:02,480 --> 00:16:05,640 Speaker 8: data was leaked, personal information, things like that. But most 289 00:16:05,680 --> 00:16:08,480 Speaker 8: cyber attacks were secret and companies were allowed to do that. 290 00:16:08,800 --> 00:16:12,120 Speaker 8: You can't keep secret a ransomware attack because your business stops. 291 00:16:12,480 --> 00:16:14,320 Speaker 8: And we saw that this year with the you know, 292 00:16:14,360 --> 00:16:16,280 Speaker 8: the attacks on m ands. We saw that this year 293 00:16:16,280 --> 00:16:19,600 Speaker 8: with the attacks on Jaguar Land Rover, you know, which 294 00:16:19,600 --> 00:16:23,000 Speaker 8: brought really significant critical operations to a halt. And this 295 00:16:23,160 --> 00:16:27,000 Speaker 8: idea of ransomware, which very often is executed by by 296 00:16:27,040 --> 00:16:30,240 Speaker 8: young people, by kids. In many cases you're talking about teenagers. 297 00:16:30,520 --> 00:16:33,680 Speaker 8: You're talking about young people who connect online and kind 298 00:16:33,720 --> 00:16:36,880 Speaker 8: of I guess, get radicalized if you will, and see 299 00:16:36,880 --> 00:16:39,640 Speaker 8: this as a real business, business opportunity. There are millions 300 00:16:39,640 --> 00:16:42,600 Speaker 8: of pounds to be made through some of these hacks. 301 00:16:43,040 --> 00:16:46,280 Speaker 8: These attacks are very easy to do, they're extremely disruptive. 302 00:16:46,440 --> 00:16:48,400 Speaker 8: You can get a lot of money in extortion fees 303 00:16:48,440 --> 00:16:50,880 Speaker 8: if you're the hacker. So, you know, one of the 304 00:16:50,880 --> 00:16:54,520 Speaker 8: things that the cybersecurity industry, including this conference this coming week, 305 00:16:54,840 --> 00:16:57,479 Speaker 8: you know, is really focused on, is, you know, technically, 306 00:16:57,560 --> 00:16:59,720 Speaker 8: how do you get ahead of these attacks? Like are 307 00:16:59,760 --> 00:17:03,880 Speaker 8: there technical countermeasures you can put in place to repel 308 00:17:04,080 --> 00:17:07,120 Speaker 8: ransomware attacks? And it's a really hard problem because it's 309 00:17:07,119 --> 00:17:09,560 Speaker 8: not so simple as saying there's a bad actor on 310 00:17:09,600 --> 00:17:12,240 Speaker 8: my network, therefore they are not allowed to do anything. 311 00:17:12,680 --> 00:17:16,960 Speaker 8: Bad actors routinely impersonate real users or steel credentials of 312 00:17:17,119 --> 00:17:20,480 Speaker 8: real users. So if you're running a large network, the 313 00:17:20,520 --> 00:17:23,159 Speaker 8: biggest threat to your network is going to be somebody 314 00:17:23,160 --> 00:17:25,879 Speaker 8: on your network, that is using credentials that belong to 315 00:17:25,920 --> 00:17:28,840 Speaker 8: your employees. So very very hard problem. There are no 316 00:17:29,000 --> 00:17:32,359 Speaker 8: easy technical solutions. But that's one of the themes of 317 00:17:32,359 --> 00:17:35,440 Speaker 8: this conference, and another which is kind of a perpetual theme. 318 00:17:36,280 --> 00:17:38,480 Speaker 8: You know, ransomware is here to stay. And one of 319 00:17:38,520 --> 00:17:40,879 Speaker 8: the things I like to describe is that we didn't 320 00:17:40,880 --> 00:17:44,320 Speaker 8: have ransomware before we had crypto, Like we have crypto 321 00:17:44,400 --> 00:17:47,400 Speaker 8: and now we have ransomware, and the two are interrelated 322 00:17:47,440 --> 00:17:50,919 Speaker 8: because prior to crypto hacker, it was really hard for 323 00:17:50,920 --> 00:17:54,320 Speaker 8: hackers to get paid. They would sell data on the 324 00:17:54,400 --> 00:17:58,040 Speaker 8: dark web, and you know, they'd have fake bank accounts 325 00:17:58,040 --> 00:18:01,080 Speaker 8: and it was very, very challenging to actually collect revenue 326 00:18:01,560 --> 00:18:04,200 Speaker 8: from your hacks. But now that you have digital currencies, 327 00:18:04,200 --> 00:18:06,920 Speaker 8: that's that's what's facilitating all of these attacks and making 328 00:18:06,960 --> 00:18:10,439 Speaker 8: it easier for making it possible for criminals get paid. Okay, 329 00:18:10,560 --> 00:18:13,240 Speaker 8: the other side of the ledger are espionage attacks, as 330 00:18:13,280 --> 00:18:16,440 Speaker 8: you heard the Armiss CEO talk about, which is now 331 00:18:16,480 --> 00:18:20,760 Speaker 8: that everything is digitized from obviously from telephones to cars, 332 00:18:20,840 --> 00:18:24,439 Speaker 8: to transportation networks to you know, the power grid. You know, 333 00:18:24,480 --> 00:18:27,480 Speaker 8: everything will have a digital footprint. So every country on 334 00:18:27,520 --> 00:18:30,480 Speaker 8: the planet has intelligence services that's trying to build up 335 00:18:30,520 --> 00:18:35,040 Speaker 8: their cyber capabilities to potentially disrupt their adversaries. And you 336 00:18:35,040 --> 00:18:37,960 Speaker 8: know that can range from hacking into a power grid 337 00:18:38,280 --> 00:18:41,600 Speaker 8: and not doing anything but positioning yourself so that if 338 00:18:41,640 --> 00:18:44,760 Speaker 8: there is some sort of armed military conflict, you can 339 00:18:44,800 --> 00:18:47,720 Speaker 8: flip a switch and turn off the lights. And those 340 00:18:47,760 --> 00:18:49,879 Speaker 8: are the threats that people are trying to protect against. 341 00:18:50,080 --> 00:18:52,480 Speaker 3: Yeah, and wow, that's the kind of head spinning list, 342 00:18:52,560 --> 00:18:54,760 Speaker 3: isn't it, in terms of the threats that are out there. 343 00:18:54,840 --> 00:18:57,800 Speaker 3: And you mentioned a little bit about the difficulties of 344 00:18:57,840 --> 00:19:01,280 Speaker 3: how businesses come up, specifically business is with strategies to 345 00:19:01,320 --> 00:19:03,440 Speaker 3: try to count these attacks. Maybe we can talk about 346 00:19:03,440 --> 00:19:06,480 Speaker 3: that a bit more, because the thing that was extraordinary 347 00:19:06,560 --> 00:19:09,840 Speaker 3: about the JLR hack in the UK was that the 348 00:19:09,880 --> 00:19:14,520 Speaker 3: government agreed to an emergency loan for Jaguar land Rover 349 00:19:14,720 --> 00:19:17,320 Speaker 3: so that it could pay its suppliers. They were worried 350 00:19:17,560 --> 00:19:21,960 Speaker 3: about the fallout across the UK, and so that is 351 00:19:22,480 --> 00:19:24,040 Speaker 3: something very novel as well. 352 00:19:24,119 --> 00:19:27,240 Speaker 8: Yeah, the Jaguar hack was very significant in many ways, 353 00:19:27,440 --> 00:19:29,919 Speaker 8: and we did some pretty great coverage of it, and 354 00:19:29,960 --> 00:19:32,760 Speaker 8: as you mentioned, the most significant aspect of it was 355 00:19:33,040 --> 00:19:36,840 Speaker 8: the UK government stepped in and underwrote an emergency two 356 00:19:36,840 --> 00:19:40,360 Speaker 8: billion dollar loan to Jaguar land Rover, which by the way, 357 00:19:40,520 --> 00:19:45,400 Speaker 8: is owned by a five hundred billion dollar foreign conglomerate, Caltata. 358 00:19:46,040 --> 00:19:48,760 Speaker 8: You know, UK government underwrote that loan to bail out 359 00:19:48,760 --> 00:19:52,000 Speaker 8: the company. It's not because the parent company couldn't pay. 360 00:19:52,440 --> 00:19:56,000 Speaker 8: It was the concern that if this breach dragged out, 361 00:19:56,280 --> 00:19:58,639 Speaker 8: you'd have people out of work for a long time, 362 00:19:58,840 --> 00:20:02,240 Speaker 8: potentially forever, if the factories had to close. And it's 363 00:20:02,280 --> 00:20:04,200 Speaker 8: the first time to our knowledge that we've seen a 364 00:20:04,240 --> 00:20:08,440 Speaker 8: government underwrite a rescue of a ransomware victim, especially to 365 00:20:08,560 --> 00:20:11,840 Speaker 8: this degree. You know, governments will often send their cyber 366 00:20:11,880 --> 00:20:14,679 Speaker 8: experts into these you know, critical companies, you know, nationally 367 00:20:14,720 --> 00:20:18,240 Speaker 8: important companies to help them investigate breaches. But you know 368 00:20:18,320 --> 00:20:20,479 Speaker 8: now that the UK has kind of gotten into the 369 00:20:20,520 --> 00:20:26,040 Speaker 8: business of underwriting the rescue packages for a ransomware victim. 370 00:20:26,320 --> 00:20:28,679 Speaker 8: You know, it raises this question of precedent and it's like, 371 00:20:28,800 --> 00:20:30,760 Speaker 8: is this what we're doing now and what are the 372 00:20:30,760 --> 00:20:33,600 Speaker 8: implications of that? And I mean, to be clear, this 373 00:20:33,720 --> 00:20:36,080 Speaker 8: is a loan that needs to be repaid. But when 374 00:20:36,200 --> 00:20:39,720 Speaker 8: if you're a ransomware operator and you're a hacker. This 375 00:20:39,840 --> 00:20:42,440 Speaker 8: is the best news you could have asked for, because 376 00:20:42,800 --> 00:20:46,320 Speaker 8: you know, and you are basically guaranteed that the companies 377 00:20:46,320 --> 00:20:49,760 Speaker 8: that you are hacking will survive long enough to potentially 378 00:20:49,760 --> 00:20:51,440 Speaker 8: pay you, and that's what they're after. 379 00:20:52,160 --> 00:20:55,040 Speaker 3: Yeah, if they dissrupt things enough that there would be 380 00:20:55,040 --> 00:20:56,399 Speaker 3: a pay date at the end of it. You know, 381 00:20:56,920 --> 00:21:01,040 Speaker 3: you've also covered the threats to buy things and critical 382 00:21:01,160 --> 00:21:05,560 Speaker 3: financial infrastructure of particular interest. I imagine to our audience, 383 00:21:05,880 --> 00:21:09,960 Speaker 3: how would you quantify and characterize the increase in hacks, 384 00:21:10,320 --> 00:21:13,160 Speaker 3: especially from China, but maybe other countries. 385 00:21:13,280 --> 00:21:15,840 Speaker 8: Yeah, this is such an interesting topic because whereas ransomware 386 00:21:15,880 --> 00:21:18,600 Speaker 8: is in your face, I mean, security experts describe ransomware 387 00:21:18,920 --> 00:21:21,879 Speaker 8: as an exit strategy. The exit strategy is announcing to 388 00:21:21,920 --> 00:21:24,359 Speaker 8: the world that this has happened and then demanding payment, 389 00:21:24,560 --> 00:21:27,639 Speaker 8: so everybody sees a ransomware attack. These attacks on the 390 00:21:27,640 --> 00:21:30,800 Speaker 8: financial system, however, that we've been writing about largely are 391 00:21:30,800 --> 00:21:34,120 Speaker 8: designed to be totally invisible. And you know, what hackers 392 00:21:34,160 --> 00:21:37,040 Speaker 8: in those cases are after is not disruption. In fact, 393 00:21:37,080 --> 00:21:39,600 Speaker 8: it's the opposite. What thereafter and that in those cases 394 00:21:39,600 --> 00:21:43,600 Speaker 8: are intelligence, our information about how the financial system works. 395 00:21:43,920 --> 00:21:47,320 Speaker 8: Who's under investigation who's under investigation for sanctions and things 396 00:21:47,359 --> 00:21:50,120 Speaker 8: like that. You know, powers of the government, whatever government 397 00:21:50,160 --> 00:21:53,879 Speaker 8: that is, US, UK, wherever governments have extraordinary powers to 398 00:21:54,040 --> 00:21:57,840 Speaker 8: sanction individuals, and foreign governments that may be targets of 399 00:21:57,880 --> 00:22:02,800 Speaker 8: those investigations, are extremely interested in understanding who's on that list, 400 00:22:03,160 --> 00:22:06,359 Speaker 8: who's being investigated, what information do they have. So there's 401 00:22:06,400 --> 00:22:09,159 Speaker 8: so much, you know, reporting this year focused largely on 402 00:22:09,200 --> 00:22:12,480 Speaker 8: the US Treasury, which has suffered a series of very 403 00:22:12,520 --> 00:22:16,240 Speaker 8: devastating espionage attacks in recent years. And what we looked 404 00:22:16,280 --> 00:22:19,199 Speaker 8: at was how does the US Treasury, which has a 405 00:22:19,320 --> 00:22:23,480 Speaker 8: large cybersecurity team, which has a great budget for cybersecurity 406 00:22:23,480 --> 00:22:26,040 Speaker 8: and increased budget, you know, for this this kind of work, 407 00:22:26,359 --> 00:22:28,760 Speaker 8: how do they keep getting hacked at a very deep 408 00:22:28,920 --> 00:22:32,359 Speaker 8: level by Russia and China in particular. And the answer 409 00:22:32,359 --> 00:22:34,480 Speaker 8: is a little bit complicated. But one thing that you 410 00:22:34,560 --> 00:22:36,919 Speaker 8: take away from it is there is no silver bullet 411 00:22:36,920 --> 00:22:39,880 Speaker 8: in cybersecurity. If there were, everybody would use it. There 412 00:22:39,880 --> 00:22:43,560 Speaker 8: are best practices, there are approaches, there are techniques you 413 00:22:43,600 --> 00:22:46,679 Speaker 8: can use, but there is no silver bullet. And you know, 414 00:22:46,720 --> 00:22:49,080 Speaker 8: so what you're left with is whether it's ransomware or 415 00:22:49,119 --> 00:22:52,959 Speaker 8: whether it's an espionage attack. You know, cybersecurity is an 416 00:22:53,040 --> 00:22:56,480 Speaker 8: even more difficult problem now than it was before. Even 417 00:22:56,520 --> 00:23:00,000 Speaker 8: though we have more cybersecurity protections, we have more venus. 418 00:23:00,320 --> 00:23:02,199 Speaker 8: Like the Black aut conference, there will be it's a 419 00:23:02,320 --> 00:23:05,640 Speaker 8: vendor conference with research as part of it, so they're 420 00:23:05,680 --> 00:23:08,480 Speaker 8: going to be there selling cybersecurity technologies that you know 421 00:23:08,560 --> 00:23:11,240 Speaker 8: they all do something. But if there were a technology 422 00:23:11,240 --> 00:23:14,879 Speaker 8: that could cure cybersecurity attacks, you know, everybody would obviously 423 00:23:14,880 --> 00:23:16,800 Speaker 8: would be the most valuable company in the world. 424 00:23:16,920 --> 00:23:19,240 Speaker 3: It's the game of chase, isn't it? With all crime? 425 00:23:19,400 --> 00:23:22,600 Speaker 3: Is how you know all perhaps criminal and other activities, 426 00:23:22,640 --> 00:23:26,520 Speaker 3: how to keep pays. A final word then, too, on 427 00:23:27,080 --> 00:23:31,560 Speaker 3: AI and what difference artificial intelligence is making, because this 428 00:23:31,720 --> 00:23:34,400 Speaker 3: is another area that you've reported on in a big 429 00:23:34,440 --> 00:23:36,040 Speaker 3: way over the past few months. 430 00:23:36,040 --> 00:23:37,600 Speaker 8: So what I've what I've been doing the past couple 431 00:23:37,600 --> 00:23:39,639 Speaker 8: of years is with most sources I meet, and these 432 00:23:39,680 --> 00:23:43,400 Speaker 8: are your senior cybersecurity people at governments and companies or whatever, 433 00:23:43,520 --> 00:23:46,160 Speaker 8: and I will ask I will try to ask every 434 00:23:46,160 --> 00:23:49,840 Speaker 8: single one of them, how is your organization using AI today? 435 00:23:50,000 --> 00:23:54,240 Speaker 8: Like practical examples, not like experimenting, but like practical examples, 436 00:23:54,320 --> 00:23:58,320 Speaker 8: how are you using AI? It's been really revealing, Like 437 00:23:58,680 --> 00:24:02,240 Speaker 8: most of them have said, not really at all, very 438 00:24:02,240 --> 00:24:05,200 Speaker 8: surprising to me, with some exceptions. And the reason that's 439 00:24:05,359 --> 00:24:09,200 Speaker 8: surprising when it comes to cybersecurity, you're dealing with hackers 440 00:24:09,240 --> 00:24:11,159 Speaker 8: the way it's been explained to me. You're dealing with 441 00:24:11,200 --> 00:24:13,640 Speaker 8: hackers that in most cases are trying really really hard 442 00:24:13,680 --> 00:24:16,840 Speaker 8: not to be detected. If you're writing that code to 443 00:24:16,880 --> 00:24:19,879 Speaker 8: perform those attacks, you're not going to outsource that to 444 00:24:19,960 --> 00:24:23,000 Speaker 8: a large language model which can hallucinate and make mistakes 445 00:24:23,040 --> 00:24:25,320 Speaker 8: and maybe blow up your operation. So we're seeing that 446 00:24:25,320 --> 00:24:27,960 Speaker 8: there's not a lot of utility for these llms in 447 00:24:28,520 --> 00:24:31,879 Speaker 8: custom hacks, espionage attacks, really high level stuff. There's too 448 00:24:31,920 --> 00:24:35,800 Speaker 8: many uncertainties around it. Where we are seeing AI being 449 00:24:35,880 --> 00:24:40,000 Speaker 8: used is especially true in spamming. So if you're doing 450 00:24:40,040 --> 00:24:43,479 Speaker 8: a spam operation. It's kind of a funny story is 451 00:24:43,680 --> 00:24:48,280 Speaker 8: we're seeing increased spam activity in countries that previously didn't 452 00:24:48,280 --> 00:24:50,439 Speaker 8: have a lot of it. Japan comes up a lot, 453 00:24:50,840 --> 00:24:54,400 Speaker 8: so places where you have character based languages that are 454 00:24:54,400 --> 00:24:57,400 Speaker 8: not really used elsewhere in the world. Some of these 455 00:24:57,400 --> 00:25:01,800 Speaker 8: countries have seen very very low rates of spam for decades. 456 00:25:02,080 --> 00:25:05,080 Speaker 8: There just isn't a lot of that activity because crafting 457 00:25:05,480 --> 00:25:09,240 Speaker 8: the messages in the local language is very challenging. You 458 00:25:09,280 --> 00:25:12,199 Speaker 8: have to have subject matter experts. Large language models have 459 00:25:12,520 --> 00:25:15,199 Speaker 8: really helped the hackers in that regard, Jordren. 460 00:25:15,280 --> 00:25:18,080 Speaker 3: That means many more stories I expect from you and 461 00:25:18,119 --> 00:25:21,320 Speaker 3: from your colleagues. Thank you for being with me. Been 462 00:25:21,320 --> 00:25:26,040 Speaker 3: a hugely fascinating conversation about cyber security, Bloomberg's senior cyber 463 00:25:26,080 --> 00:25:29,679 Speaker 3: security report at children Robertson. Thank you, and we'll have 464 00:25:29,800 --> 00:25:33,280 Speaker 3: full coverage on Bloomberg Radio of developments on this topic 465 00:25:33,359 --> 00:25:37,159 Speaker 3: and the black Hat cyber security conference in London in 466 00:25:37,200 --> 00:25:40,040 Speaker 3: the coming days. I'm Caroline Hepcker here in London. You 467 00:25:40,080 --> 00:25:43,120 Speaker 3: can catch us every weekday morning for Bloomberg Daybreak Europe, 468 00:25:43,240 --> 00:25:45,840 Speaker 3: beginning at six am in London. That's one am on 469 00:25:45,880 --> 00:25:46,439 Speaker 3: wol Street. 470 00:25:46,600 --> 00:25:49,960 Speaker 2: Nathan, Thanks Caroline, and coming up on Bloomberg day Break Weekend, 471 00:25:50,040 --> 00:25:52,560 Speaker 2: we take a look at why China's economy is stuck 472 00:25:52,640 --> 00:26:07,000 Speaker 2: in deflation. I'm Nathan Hager, and this is Bloomberg. This 473 00:26:07,040 --> 00:26:09,840 Speaker 2: is Bloomberg Daybreak Weekend, our global look ahead of the 474 00:26:09,880 --> 00:26:12,520 Speaker 2: top stories for investors in the coming week. I'm Nathan 475 00:26:12,520 --> 00:26:16,479 Speaker 2: Hager in Washington. This week China releases the latest readings 476 00:26:16,520 --> 00:26:19,919 Speaker 2: on consumer and producer prices. For more, Let's go to 477 00:26:19,920 --> 00:26:22,919 Speaker 2: Bloomberg's Doug Prisner, host of the Daybreak Asia podcast. 478 00:26:23,200 --> 00:26:27,399 Speaker 4: Nathan the Chinese economy is caught in a deflationary trap, 479 00:26:27,440 --> 00:26:31,560 Speaker 4: and the factors that led to steadily declining prices appear 480 00:26:31,640 --> 00:26:35,320 Speaker 4: to be firmly entrenched. Bloomberg Economics is saying it's going 481 00:26:35,400 --> 00:26:37,960 Speaker 4: to be tough to shake and to make matters worse. 482 00:26:38,040 --> 00:26:41,080 Speaker 4: Economic growth in China in the current quarter has been weak. 483 00:26:41,560 --> 00:26:44,800 Speaker 4: Let's bring in Bloomberg economist Eric Zu, who covers China 484 00:26:44,880 --> 00:26:48,800 Speaker 4: and other economies in the Asia Pacific. Eric joins us 485 00:26:48,960 --> 00:26:51,560 Speaker 4: from Hong Kong. Eric, thank you so much for making time. 486 00:26:51,840 --> 00:26:54,760 Speaker 4: This period of deflation in China has been going on, 487 00:26:55,000 --> 00:26:58,360 Speaker 4: as we know for several years. Why the stubbornness. 488 00:26:59,080 --> 00:27:03,080 Speaker 9: I think the reason is the demand side, so the 489 00:27:03,080 --> 00:27:07,199 Speaker 9: consumer side, business side, I mean the demand domestic demand 490 00:27:07,240 --> 00:27:10,399 Speaker 9: is too weak, so it's not enough to you know, 491 00:27:10,880 --> 00:27:14,639 Speaker 9: driving and sustain inflation especially. I think a key issue 492 00:27:14,720 --> 00:27:18,240 Speaker 9: the confidence here. So we see lots of data, you know, 493 00:27:18,320 --> 00:27:23,080 Speaker 9: see the consumer they're deleveraging, corporation they're also delaverging, so 494 00:27:23,240 --> 00:27:26,560 Speaker 9: noing is willing to borrow, you know, to expand consumption 495 00:27:26,840 --> 00:27:30,159 Speaker 9: spend investment. So there are lots of downward pressure on 496 00:27:30,480 --> 00:27:34,080 Speaker 9: the pricess on the from the domestic side. So I 497 00:27:34,119 --> 00:27:38,560 Speaker 9: think so people are over anxiety, they overwork, so basically 498 00:27:39,320 --> 00:27:41,680 Speaker 9: they don't have time to consume. And at the same time, 499 00:27:41,760 --> 00:27:44,480 Speaker 9: you know, the income is slowing, you know, the job 500 00:27:44,560 --> 00:27:47,680 Speaker 9: looks are not looking great. So people are very cautious, 501 00:27:48,240 --> 00:27:52,320 Speaker 9: you know, on spending, and if they have any you know, money, 502 00:27:52,359 --> 00:27:54,880 Speaker 9: they would rather you know, say for the future. Right 503 00:27:54,920 --> 00:27:57,040 Speaker 9: in the case I lose my job or I got 504 00:27:57,080 --> 00:28:00,240 Speaker 9: income cut, so it's it's better to saving for you know, 505 00:28:00,280 --> 00:28:03,600 Speaker 9: in a certain future rather than spend whatever I have 506 00:28:03,800 --> 00:28:08,080 Speaker 9: right now. So I think that's long a deep rooted 507 00:28:08,160 --> 00:28:12,080 Speaker 9: issue which is creating a very deflationary economy right now. 508 00:28:12,200 --> 00:28:14,120 Speaker 4: At the same time, I think we need to mention 509 00:28:14,520 --> 00:28:18,440 Speaker 4: the issue of excess factory capacity, and this is something 510 00:28:18,520 --> 00:28:21,879 Speaker 4: that many of China's trading partners have been critical of China, 511 00:28:22,080 --> 00:28:24,320 Speaker 4: essentially exporting deflation. 512 00:28:25,680 --> 00:28:28,680 Speaker 9: They're you know blaming China for you know, down pins 513 00:28:28,680 --> 00:28:31,680 Speaker 9: of chief goods into their country and you know, taking 514 00:28:31,720 --> 00:28:34,720 Speaker 9: their markets. So but just at the same time, I 515 00:28:34,720 --> 00:28:37,800 Speaker 9: think the key issue is China's although trying to have 516 00:28:37,880 --> 00:28:40,640 Speaker 9: a very big domestic market, but just right now that 517 00:28:40,720 --> 00:28:43,440 Speaker 9: demand is too slow, nobody willing to spend, so they 518 00:28:43,480 --> 00:28:47,080 Speaker 9: cannot digest or the production within the country. 519 00:28:47,400 --> 00:28:50,480 Speaker 4: Under these circumstances, Eric, do you believe it's possible for 520 00:28:50,600 --> 00:28:53,600 Speaker 4: China to achieve that growth target of around five percent 521 00:28:53,840 --> 00:28:58,040 Speaker 4: or will a lot more be required in terms of stimulus. 522 00:28:59,200 --> 00:29:02,520 Speaker 9: I think in sery it's possible. You see this year, 523 00:29:02,720 --> 00:29:05,880 Speaker 9: so although the four Q the last quarter, I think 524 00:29:05,920 --> 00:29:09,240 Speaker 9: the data is quite weak, but they basically have done 525 00:29:09,320 --> 00:29:11,720 Speaker 9: that within the first three quarters or within the first 526 00:29:11,760 --> 00:29:15,120 Speaker 9: half of the year, so I think it's probably the same, 527 00:29:15,280 --> 00:29:18,600 Speaker 9: you know style next year. They want front load some stimulus, 528 00:29:18,640 --> 00:29:20,480 Speaker 9: you know, at the beginning of the year, make sure 529 00:29:20,880 --> 00:29:23,520 Speaker 9: we have a strong first half. Then on the second 530 00:29:23,600 --> 00:29:27,280 Speaker 9: half they might you know, relax the momentum a little bit. 531 00:29:27,920 --> 00:29:31,080 Speaker 9: But I think in theory we do not really think 532 00:29:31,160 --> 00:29:34,280 Speaker 9: China needs to maintain a five percent every year. So 533 00:29:34,400 --> 00:29:37,080 Speaker 9: if you look at the five year plan they just 534 00:29:37,160 --> 00:29:40,720 Speaker 9: release in October, some reading is that if you still 535 00:29:40,760 --> 00:29:44,480 Speaker 9: want to achieve the twenty thirty five, the develpment go. 536 00:29:45,040 --> 00:29:47,560 Speaker 9: I think it's a mostly you just need four point 537 00:29:47,600 --> 00:29:50,760 Speaker 9: five percent girls over the next decade. So I think 538 00:29:51,120 --> 00:29:53,920 Speaker 9: probably next year they're still going to maintain five percent 539 00:29:54,000 --> 00:29:57,920 Speaker 9: girls target, but I think further on they might gradually, 540 00:29:58,000 --> 00:30:00,320 Speaker 9: you know, be more relaxed on the girls time. It's 541 00:30:00,360 --> 00:30:03,600 Speaker 9: no longer I don't think five percent is a must 542 00:30:03,680 --> 00:30:06,320 Speaker 9: hit target. Maybe next year, but in the future years, 543 00:30:06,360 --> 00:30:09,840 Speaker 9: I think they want to give more room, even solve 544 00:30:09,880 --> 00:30:13,240 Speaker 9: the language, which means we no longer have to hit 545 00:30:13,440 --> 00:30:16,400 Speaker 9: a hot target of five percent. They might you know, 546 00:30:16,480 --> 00:30:18,680 Speaker 9: change your language like a range, right, we will have 547 00:30:18,720 --> 00:30:23,280 Speaker 9: a range target instead of a very hard five percent target. 548 00:30:23,440 --> 00:30:27,120 Speaker 4: So help me understand how the currency enters into all 549 00:30:27,160 --> 00:30:30,200 Speaker 4: of this. Lately, the Chinese you want has been stronger, 550 00:30:30,280 --> 00:30:33,960 Speaker 4: particularly against the dollar, and if anything, you would think 551 00:30:33,960 --> 00:30:36,520 Speaker 4: that authorities in China would want to slow that down 552 00:30:36,760 --> 00:30:37,160 Speaker 4: just a bit. 553 00:30:37,840 --> 00:30:40,960 Speaker 9: I don't think the government, you know, will allow a 554 00:30:41,080 --> 00:30:45,120 Speaker 9: very quick appression, just like they won't let depreciation to 555 00:30:45,240 --> 00:30:48,080 Speaker 9: happen very quickly. So I think the government is okay 556 00:30:48,240 --> 00:30:53,560 Speaker 9: with you know, appreasion, appreciation or depreciat They just don't 557 00:30:53,760 --> 00:30:57,360 Speaker 9: like hit a very sharp one way, you know movement, 558 00:30:57,840 --> 00:31:00,360 Speaker 9: so they're more like, you know, you can you know, 559 00:31:00,440 --> 00:31:03,480 Speaker 9: gradually do that. But I think that the fundamental reason 560 00:31:03,640 --> 00:31:06,960 Speaker 9: is one is the weaker dollar so globally because of 561 00:31:06,960 --> 00:31:10,160 Speaker 9: the US policy. And another thing is I think it's 562 00:31:10,240 --> 00:31:14,160 Speaker 9: some funds coming to China, you know, betting on China's 563 00:31:14,280 --> 00:31:18,320 Speaker 9: tech boom. And also the tear side, the China US 564 00:31:18,440 --> 00:31:21,840 Speaker 9: relations seems you know, in quiet a periodore right now. 565 00:31:21,880 --> 00:31:25,880 Speaker 9: So I think before the next excalation next year probably so, 566 00:31:25,920 --> 00:31:29,880 Speaker 9: I think it's will be give a window for the currency, 567 00:31:29,960 --> 00:31:33,840 Speaker 9: Chinese currency to gain stronger. But on the PBOC side, 568 00:31:33,880 --> 00:31:37,560 Speaker 9: I think they will only try to manage this to 569 00:31:37,760 --> 00:31:41,160 Speaker 9: happen in a you know, slow motion, not overnight. 570 00:31:41,640 --> 00:31:44,960 Speaker 4: So if you had to speculate on what more stimulus 571 00:31:45,000 --> 00:31:48,360 Speaker 4: might look like, give me some possibilities, what might Beijing offer? 572 00:31:50,120 --> 00:31:53,840 Speaker 9: Yeah, I think next year it's probably quite similar to 573 00:31:53,880 --> 00:31:56,320 Speaker 9: this year. I think on the monetor side, they're doing 574 00:31:56,480 --> 00:31:59,920 Speaker 9: to be some monist modest eating you know, interestry cards 575 00:32:00,280 --> 00:32:03,080 Speaker 9: and the triple our cards. I think it's more emphasis 576 00:32:03,160 --> 00:32:05,720 Speaker 9: on the fiscal side, So like this year, I think 577 00:32:05,720 --> 00:32:10,120 Speaker 9: again next year they will do some short term consumption tuments, right, 578 00:32:10,200 --> 00:32:14,880 Speaker 9: the subsidies for trading program. And also I would like 579 00:32:15,000 --> 00:32:18,520 Speaker 9: to see you know more some long term structure, you know, 580 00:32:19,360 --> 00:32:23,080 Speaker 9: measures like I just mentioned, you know, more subsidy for childcare, 581 00:32:23,200 --> 00:32:26,280 Speaker 9: for elderly care for you know, services consumption, so which 582 00:32:26,320 --> 00:32:30,520 Speaker 9: can help consumers ease their living off course burdens. So 583 00:32:30,600 --> 00:32:33,640 Speaker 9: I think if the government continued to do that this, 584 00:32:34,320 --> 00:32:36,840 Speaker 9: you know, in a sustainable way, that will give consumer 585 00:32:37,000 --> 00:32:40,240 Speaker 9: more confidence. Okay, the government really you know, cared about 586 00:32:40,240 --> 00:32:43,040 Speaker 9: consumption and they want to support us. Although the amount 587 00:32:43,160 --> 00:32:46,200 Speaker 9: may not be such big, but you add this at 588 00:32:46,320 --> 00:32:50,240 Speaker 9: that together, I think it can create you know, more 589 00:32:50,320 --> 00:32:53,600 Speaker 9: stumulus for for for the consumption next year. 590 00:32:53,920 --> 00:32:56,880 Speaker 4: As we know, the weakness of the property market has 591 00:32:56,960 --> 00:33:00,959 Speaker 4: been central to the problems with Chinese an. Can you 592 00:33:01,160 --> 00:33:05,360 Speaker 4: envision some sort of recovery that may take place, let's 593 00:33:05,400 --> 00:33:06,600 Speaker 4: say in twenty twenty six. 594 00:33:08,160 --> 00:33:12,800 Speaker 9: Depends how defire recovery. So my definition of recovery is, 595 00:33:13,040 --> 00:33:16,120 Speaker 9: you know, like the government's saying, holt in the decline. 596 00:33:16,240 --> 00:33:19,520 Speaker 9: So if we can achieve to you know, decline, you know, 597 00:33:21,160 --> 00:33:24,280 Speaker 9: decline less than this year, so I will I think 598 00:33:24,320 --> 00:33:27,720 Speaker 9: that of progress, and I think that's also the target 599 00:33:28,280 --> 00:33:31,840 Speaker 9: of the government. I think they they're okay, you know, 600 00:33:31,920 --> 00:33:34,760 Speaker 9: with the correction in the property market. But the bottom 601 00:33:34,800 --> 00:33:37,440 Speaker 9: line is there are no collapse. So as long as 602 00:33:37,480 --> 00:33:40,680 Speaker 9: you know, the adjustment is milder than this year, I 603 00:33:40,720 --> 00:33:44,240 Speaker 9: think they will feel comfortable. But that being said, I 604 00:33:44,320 --> 00:33:46,400 Speaker 9: think in the near term they still want to you know, 605 00:33:46,440 --> 00:33:49,600 Speaker 9: prevent a very sharp you know slow down, and they 606 00:33:49,640 --> 00:33:52,040 Speaker 9: want to you know, put a flaw in the market, 607 00:33:52,200 --> 00:33:55,040 Speaker 9: right so you can, you can, you can go downward, 608 00:33:55,160 --> 00:33:59,680 Speaker 9: but just like you know, five percent or ten percent down, 609 00:33:59,720 --> 00:34:02,840 Speaker 9: it's okay, but like twenty thirty percent, I think that 610 00:34:02,960 --> 00:34:06,400 Speaker 9: will create monitors for the governments. So I think we 611 00:34:06,480 --> 00:34:08,960 Speaker 9: must still see some support measures in the new term, 612 00:34:09,080 --> 00:34:13,799 Speaker 9: so some you know relaxing more mortgage relaxation and the 613 00:34:13,920 --> 00:34:17,600 Speaker 9: more you know, just reducing the transaction costs, so which 614 00:34:17,640 --> 00:34:20,040 Speaker 9: can help, you know, stimulate the demand a little bit, 615 00:34:20,120 --> 00:34:23,319 Speaker 9: you know, trying to stabilize the market. But I don't 616 00:34:23,360 --> 00:34:27,040 Speaker 9: think the correction will be over next year. We still 617 00:34:26,840 --> 00:34:29,680 Speaker 9: we're going to still see the markets down, but probably 618 00:34:30,000 --> 00:34:34,719 Speaker 9: the magnitude of downwardjustment will be bounded than this year. 619 00:34:34,800 --> 00:34:36,960 Speaker 9: So that's where still be some progress. 620 00:34:37,280 --> 00:34:39,279 Speaker 4: Eric will leave it there, thank you so very much. 621 00:34:39,280 --> 00:34:43,279 Speaker 4: Bloomberg economist Eric Ju from Hong Kong. We turn to 622 00:34:43,400 --> 00:34:47,080 Speaker 4: digital currency next and the firm you Trip. This is 623 00:34:47,080 --> 00:34:50,120 Speaker 4: a fintech platform based in Singapore and it's known for 624 00:34:50,239 --> 00:34:53,880 Speaker 4: a multi currency travel wallet. Well now you Trip is 625 00:34:53,880 --> 00:34:57,280 Speaker 4: planning an expansion into Australia as it looks to target 626 00:34:57,320 --> 00:35:00,640 Speaker 4: that outbound travel market. We caught up with you Trip 627 00:35:00,719 --> 00:35:05,000 Speaker 4: co founder and CEO Secilia Chew about her company's growth strategy. 628 00:35:05,280 --> 00:35:08,640 Speaker 4: She spoke with Bloomberg TV host April hon and Shay 629 00:35:08,640 --> 00:35:09,719 Speaker 4: on talk to us. 630 00:35:09,640 --> 00:35:12,960 Speaker 10: About why Australia. Why do you see so much opportunity 631 00:35:13,000 --> 00:35:16,680 Speaker 10: in that market? Yeah? Absolutely. You Trip is a multi 632 00:35:16,719 --> 00:35:20,160 Speaker 10: currency digital wallet that comes with a travel CUD, so 633 00:35:20,360 --> 00:35:24,160 Speaker 10: users can actually use us to buy anything online offline 634 00:35:24,360 --> 00:35:27,520 Speaker 10: around the world in any currencies at the best ethics rates. 635 00:35:28,080 --> 00:35:28,719 Speaker 1: We started a. 636 00:35:28,719 --> 00:35:32,520 Speaker 10: Business seven years ago here in Singapore twenty eighteen, and 637 00:35:32,600 --> 00:35:36,800 Speaker 10: now we are category leaders in both Singapore Thailand, serving 638 00:35:36,880 --> 00:35:41,279 Speaker 10: millions of travelers and Australia. It's a really important and 639 00:35:41,320 --> 00:35:44,640 Speaker 10: strategic market for us. What we are committed to do 640 00:35:44,800 --> 00:35:47,239 Speaker 10: is actually to invest into the market for. 641 00:35:47,200 --> 00:35:47,920 Speaker 1: The long term. 642 00:35:48,560 --> 00:35:52,600 Speaker 10: Australians love to travel, just like many of us. You know, 643 00:35:52,719 --> 00:35:56,040 Speaker 10: every year there's more than twelve million people going overseas 644 00:35:56,080 --> 00:36:00,000 Speaker 10: and spending more than fifty billion dollars on this category. 645 00:36:00,200 --> 00:36:03,680 Speaker 10: We think it's going to be such a strategic choice 646 00:36:03,680 --> 00:36:04,120 Speaker 10: for us. 647 00:36:04,040 --> 00:36:04,480 Speaker 1: To be there. 648 00:36:04,920 --> 00:36:08,600 Speaker 10: And many of the people also tends to make longer trips. 649 00:36:09,040 --> 00:36:11,799 Speaker 10: You know what we saw in Singapore Thailand, we tend 650 00:36:11,880 --> 00:36:16,239 Speaker 10: to travel about six to seven days each time. For Australians, 651 00:36:16,280 --> 00:36:19,239 Speaker 10: they like to make longer trips like fifteen days on 652 00:36:19,320 --> 00:36:22,560 Speaker 10: average each time. So I would say that, you know, 653 00:36:22,640 --> 00:36:25,359 Speaker 10: for our no fee proposition, best ethics race, we hope 654 00:36:25,360 --> 00:36:30,840 Speaker 10: we can actually make a meaningful impact on how they 655 00:36:30,920 --> 00:36:33,040 Speaker 10: travel and how they spend. That's in Australia is a 656 00:36:33,080 --> 00:36:37,480 Speaker 10: market where we do have already quite long established local 657 00:36:38,239 --> 00:36:42,359 Speaker 10: grown players. How do you expect to differentiate yourself? So 658 00:36:43,160 --> 00:36:47,960 Speaker 10: absolutely right, you know, in terms of the banks who 659 00:36:48,040 --> 00:36:51,040 Speaker 10: also might have a very similar offering to us, I 660 00:36:51,080 --> 00:36:55,160 Speaker 10: would say we differentiate ourselves with our laser focus on 661 00:36:55,200 --> 00:36:58,160 Speaker 10: the travel assignment, on the crossbord assignment. So when you 662 00:36:58,239 --> 00:37:01,600 Speaker 10: really take a look at the big banks, right, so 663 00:37:01,960 --> 00:37:04,759 Speaker 10: they do many things. They have saving products, they have 664 00:37:05,120 --> 00:37:08,960 Speaker 10: lending products, they have mortgages. They might have twenty cuts 665 00:37:09,000 --> 00:37:12,719 Speaker 10: in just the cut portfolios. So how we differentiate it's 666 00:37:12,840 --> 00:37:16,839 Speaker 10: over the last seven years we actually have created and 667 00:37:17,440 --> 00:37:23,160 Speaker 10: optimized our business model, our pricing, our partnership network, and 668 00:37:23,280 --> 00:37:27,120 Speaker 10: also our product features to be sure that we actually 669 00:37:27,200 --> 00:37:32,440 Speaker 10: offer the best and most competitive products for travelers in 670 00:37:32,520 --> 00:37:33,800 Speaker 10: any of our markets. 671 00:37:34,080 --> 00:37:36,120 Speaker 1: So, Cilia, that sounds like you're going to need a 672 00:37:36,120 --> 00:37:38,400 Speaker 1: lot of employees to do all of that. Your expansion 673 00:37:38,440 --> 00:37:41,520 Speaker 1: seems to be accelerated at this point. What does your 674 00:37:41,520 --> 00:37:44,440 Speaker 1: workforce look like? Are you hiring more white regions? Are 675 00:37:44,480 --> 00:37:46,080 Speaker 1: you putting more people in So. 676 00:37:46,600 --> 00:37:50,520 Speaker 10: A key part of our market expansion strategy is localization. 677 00:37:50,760 --> 00:37:53,560 Speaker 10: So of course, over the years, we now have three 678 00:37:53,640 --> 00:37:56,640 Speaker 10: hundred people in the business and we're growing in size. 679 00:37:57,000 --> 00:38:01,440 Speaker 10: But for Australia, we have established a office, we are 680 00:38:01,600 --> 00:38:04,360 Speaker 10: building up our team, we already have boots on the ground, 681 00:38:04,840 --> 00:38:07,439 Speaker 10: and most importantly, we are going to do much more 682 00:38:07,440 --> 00:38:09,960 Speaker 10: in the market. So we are going to have partnerships team, 683 00:38:10,040 --> 00:38:12,759 Speaker 10: we are going to have customer operations, we are going 684 00:38:12,760 --> 00:38:16,880 Speaker 10: to have product compliance, marketing, really all aspects of the business. 685 00:38:16,960 --> 00:38:20,919 Speaker 10: So I would say localization is a key aspect when 686 00:38:20,920 --> 00:38:23,799 Speaker 10: we think about our strategy going forward, when we think 687 00:38:23,800 --> 00:38:27,200 Speaker 10: about growth, because it's very important for us to show 688 00:38:27,280 --> 00:38:32,040 Speaker 10: that deep understanding and also appreciation of the local preferences 689 00:38:32,520 --> 00:38:34,120 Speaker 10: and also the local culture and people. 690 00:38:34,520 --> 00:38:37,760 Speaker 4: That was you Trip. CEO Cecilia Chew speaking with Bloomberg 691 00:38:37,800 --> 00:38:41,720 Speaker 4: TV host April Hong and Sherry On and I'm Doug Kristner. 692 00:38:41,760 --> 00:38:44,440 Speaker 4: You can catch us weekdays for the Daybreak Asia podcast. 693 00:38:44,800 --> 00:38:47,080 Speaker 4: It's available wherever you get your podcast. 694 00:38:47,400 --> 00:38:50,040 Speaker 2: Nathan, thanks Doug, and that does it for this edition 695 00:38:50,080 --> 00:38:53,040 Speaker 2: of Bloomberg day Break Weekend. Join us again Monday morning 696 00:38:53,080 --> 00:38:55,359 Speaker 2: at five am Wall Street Time for the latest sun 697 00:38:55,400 --> 00:38:58,239 Speaker 2: markets overseas and the news you need to start your day. 698 00:38:58,360 --> 00:39:01,280 Speaker 2: I'm Nathan Hager. Stay with us. Top stories and global 699 00:39:01,280 --> 00:39:03,239 Speaker 2: business headlines are coming up right now