1 00:00:02,920 --> 00:00:12,600 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Intelligence 2 00:00:12,640 --> 00:00:14,360 Speaker 1: with Alex Steinhl and Paul Sweeney. 3 00:00:14,520 --> 00:00:17,720 Speaker 2: The real app performance has been in US corporate high yield. 4 00:00:17,880 --> 00:00:19,040 Speaker 3: Are the companies lean enough? 5 00:00:19,040 --> 00:00:20,279 Speaker 4: Have they trimmed all the fats? 6 00:00:20,320 --> 00:00:24,119 Speaker 2: The semiconductor business is a really cyclical business. 7 00:00:23,640 --> 00:00:27,160 Speaker 1: Breaking market headlines and corporate news from across the globe. 8 00:00:27,240 --> 00:00:29,880 Speaker 3: Do investors like the M and A that we've seen? 9 00:00:30,080 --> 00:00:33,159 Speaker 2: These are two big time blue chip companies. 10 00:00:33,280 --> 00:00:36,920 Speaker 3: The window between the peak and cut changing super fast. 11 00:00:37,080 --> 00:00:40,920 Speaker 1: Bloomberg Intelligence with Alex Steinhl and Paul'sweeny. 12 00:00:40,479 --> 00:00:44,960 Speaker 5: On Bloomberg Radio. I'm Paul sween and I'm John Tucker 13 00:00:45,000 --> 00:00:46,520 Speaker 5: filling in for Alex Steele. 14 00:00:46,400 --> 00:00:49,200 Speaker 2: On today's Bloomberg Intellivision show. We dig inside the big 15 00:00:49,200 --> 00:00:52,200 Speaker 2: business stories impacting Wall Street and global markets. 16 00:00:51,960 --> 00:00:54,360 Speaker 5: Each and head. Every week, we provide in depth research 17 00:00:54,400 --> 00:00:56,880 Speaker 5: and data on some of the two thousand companies at 18 00:00:56,880 --> 00:00:59,960 Speaker 5: one hundred and thirty industries our analysts cover worldwide. 19 00:01:00,520 --> 00:01:03,400 Speaker 2: Today, we'll look at why Berkshire Hathaway's cash pile has 20 00:01:03,440 --> 00:01:04,880 Speaker 2: reached a record plus. 21 00:01:04,880 --> 00:01:08,160 Speaker 5: We'll discuss where wind and solar energy storage will be 22 00:01:08,360 --> 00:01:09,480 Speaker 5: within the next decade. 23 00:01:09,600 --> 00:01:11,760 Speaker 2: But first we begin with our top story, the twenty 24 00:01:11,800 --> 00:01:15,160 Speaker 2: twenty four US election. This week, Donald Trump was elected 25 00:01:15,160 --> 00:01:17,760 Speaker 2: the forty seventh President of the United States, reclaiming the 26 00:01:17,760 --> 00:01:20,959 Speaker 2: White House and pulling off a stunning political comeback. 27 00:01:20,840 --> 00:01:23,800 Speaker 5: If heated Vice President Kamala Harris after she replaced an 28 00:01:23,840 --> 00:01:27,040 Speaker 5: unpopular President Joe Biden in the campaign's final months. 29 00:01:27,280 --> 00:01:30,360 Speaker 2: For more on Donald Trump's election, guest host Damian Sasara 30 00:01:30,400 --> 00:01:33,319 Speaker 2: and I were joined by Nathan Dean, Bloomberg Intelligence Senior 31 00:01:33,319 --> 00:01:36,520 Speaker 2: policy analyst. We first asked Nathan how Trump's future presidency 32 00:01:36,560 --> 00:01:38,679 Speaker 2: will impact different industries like banks. 33 00:01:39,120 --> 00:01:41,280 Speaker 6: With the financial services industry, it all came down to 34 00:01:41,319 --> 00:01:43,760 Speaker 6: this rule called the Basel three end game. You know, 35 00:01:43,800 --> 00:01:45,960 Speaker 6: as outlined by the FED. You're talking about a nine 36 00:01:46,000 --> 00:01:49,000 Speaker 6: percent increase for the GESIPS, the Bank America JP Morgan's 37 00:01:49,000 --> 00:01:51,240 Speaker 6: of you will about three to four percent in terms 38 00:01:51,320 --> 00:01:54,440 Speaker 6: of the regional banks. Now, with President Trump winning the 39 00:01:54,480 --> 00:01:56,480 Speaker 6: office of the control of the currency is likely going 40 00:01:56,480 --> 00:01:59,000 Speaker 6: to flip on day one of next year. So this 41 00:01:59,080 --> 00:02:02,320 Speaker 6: rule is effective indefinitely delayed. You know this, you would 42 00:02:02,360 --> 00:02:05,279 Speaker 6: need to FED, the OCC and the FDIC to move forward. 43 00:02:05,280 --> 00:02:07,520 Speaker 6: Now we think at thirty percent chance of it being 44 00:02:07,520 --> 00:02:09,760 Speaker 6: finalized by twenty twenty six. The reason why we're not 45 00:02:09,880 --> 00:02:12,560 Speaker 6: down to zero is because there is potential out there 46 00:02:12,639 --> 00:02:15,840 Speaker 6: that a Republican led regulator may try and move forth 47 00:02:15,880 --> 00:02:18,040 Speaker 6: with it. But the idea is going to be completely different, 48 00:02:18,040 --> 00:02:20,160 Speaker 6: and they're going to essentially start from scratch. So if 49 00:02:20,200 --> 00:02:23,040 Speaker 6: you're talking about capital requirements on a global scale, remember 50 00:02:23,080 --> 00:02:25,440 Speaker 6: the European banks have already implemented their version of this. 51 00:02:25,840 --> 00:02:28,160 Speaker 6: There could be some questions here on if the Americans 52 00:02:28,160 --> 00:02:30,200 Speaker 6: aren't going to do this, why should the Europeans on 53 00:02:30,200 --> 00:02:32,280 Speaker 6: these same sides. So certainly a lot to play here 54 00:02:32,320 --> 00:02:35,320 Speaker 6: in terms of the you know, deregulatory efforts amongst the 55 00:02:35,400 --> 00:02:36,160 Speaker 6: investment banks. 56 00:02:36,360 --> 00:02:38,720 Speaker 7: Nathan Dean, you are the consummate Washington insider. When I 57 00:02:38,760 --> 00:02:41,240 Speaker 7: need to get my what ifs answered about what's happening 58 00:02:41,320 --> 00:02:44,120 Speaker 7: in Washington, I call you. So I have a question here, 59 00:02:44,240 --> 00:02:47,160 Speaker 7: What name should I be looking at more closely than others? 60 00:02:47,440 --> 00:02:50,480 Speaker 7: Bill Lackman, Elon Musk's got Bess and Howard Luckneck. I mean, 61 00:02:50,520 --> 00:02:52,440 Speaker 7: talk to us about what the potential for a Trump 62 00:02:52,520 --> 00:02:54,040 Speaker 7: cabinet may very well look like. 63 00:02:55,000 --> 00:02:58,200 Speaker 6: Yeah, so you know, obviously the big question is you're 64 00:02:58,200 --> 00:03:01,800 Speaker 6: going to get the Wall Street President Trump? Or are 65 00:03:01,840 --> 00:03:04,040 Speaker 6: you going to get a populist President Trump? And that's 66 00:03:04,040 --> 00:03:06,080 Speaker 6: the question that I don't think anybody really has an 67 00:03:06,080 --> 00:03:08,120 Speaker 6: answer to, because you know, for example, at the SEC, 68 00:03:08,600 --> 00:03:10,560 Speaker 6: you know you have Commissioner Hester Purse, who I think 69 00:03:10,600 --> 00:03:14,160 Speaker 6: would be a very popular SEC chair coming from more 70 00:03:14,200 --> 00:03:16,680 Speaker 6: of the conservative wing the populist side of the party. 71 00:03:16,880 --> 00:03:18,480 Speaker 6: But then there's also going to be folks like former 72 00:03:18,560 --> 00:03:20,760 Speaker 6: JA Clayton. You know, obviously his name's been in there 73 00:03:20,800 --> 00:03:24,440 Speaker 6: for a Treasury but you know, somebody like a disciple, 74 00:03:24,480 --> 00:03:27,480 Speaker 6: if you will, a commissioner or chairman Clayton could be 75 00:03:27,480 --> 00:03:29,600 Speaker 6: also a named at the SEC. So the question that 76 00:03:29,639 --> 00:03:31,360 Speaker 6: we have, and we should find out about this more 77 00:03:31,360 --> 00:03:32,760 Speaker 6: over the next few weeks, is are you going to 78 00:03:32,800 --> 00:03:35,280 Speaker 6: get the populist Trump? Are the Wall Street Trump? And 79 00:03:35,360 --> 00:03:37,480 Speaker 6: I think you're probably going to get a combination of 80 00:03:37,520 --> 00:03:40,880 Speaker 6: the both, where if President Trump cares about your issue 81 00:03:40,920 --> 00:03:44,000 Speaker 6: in terms of he specifically wants to be involved, you'll 82 00:03:44,000 --> 00:03:46,720 Speaker 6: get a populist Trump. If it's something where he's happy 83 00:03:46,720 --> 00:03:48,960 Speaker 6: to delegate to other folks in Washington, then I think 84 00:03:49,160 --> 00:03:50,280 Speaker 6: you may get a Wall Street Trump. 85 00:03:50,320 --> 00:03:52,120 Speaker 7: Well ly than it took a long time for Trump 86 00:03:52,200 --> 00:03:54,320 Speaker 7: to pick his cabinet and his players back the first 87 00:03:54,360 --> 00:03:56,600 Speaker 7: time around. Apparently he's much more prepared this time. Talk 88 00:03:56,600 --> 00:03:58,600 Speaker 7: to us about timing around some of those selections. When 89 00:03:58,600 --> 00:03:59,800 Speaker 7: can we expect to hear something there? 90 00:04:00,400 --> 00:04:02,520 Speaker 6: Yeah, so I think you're gonna hear it, probably before 91 00:04:02,680 --> 00:04:04,840 Speaker 6: probably within the next few weeks. I mean to your point, 92 00:04:04,920 --> 00:04:07,240 Speaker 6: you know, they've been talking about this for some time. 93 00:04:07,240 --> 00:04:09,320 Speaker 6: But I would also note that the Republican Senate is 94 00:04:09,320 --> 00:04:11,880 Speaker 6: gonna be able to confirm a lot of President Trump's 95 00:04:11,880 --> 00:04:14,520 Speaker 6: appointees on a much quicker basis than if you were 96 00:04:14,560 --> 00:04:16,680 Speaker 6: to have a Democrat controlled Senate or even a fifty 97 00:04:16,960 --> 00:04:19,440 Speaker 6: or fifty one. Now why do we care about this, Well, 98 00:04:19,480 --> 00:04:22,240 Speaker 6: because the faster that those regulatory leaders come in place, 99 00:04:22,640 --> 00:04:25,479 Speaker 6: the faster they can start these deregulatory efforts. You know, 100 00:04:25,640 --> 00:04:27,640 Speaker 6: a regulatory leader, for the most part, can't just come 101 00:04:27,680 --> 00:04:30,200 Speaker 6: in and say, right, this regulation, we're going to just 102 00:04:30,240 --> 00:04:31,640 Speaker 6: completely roll it back on day one. 103 00:04:31,839 --> 00:04:32,599 Speaker 2: It's gonna take. 104 00:04:32,520 --> 00:04:35,240 Speaker 6: Nine months, twelve months, if not even two years to 105 00:04:35,320 --> 00:04:37,440 Speaker 6: move forth on that effort. So the quicker those regulatory 106 00:04:37,520 --> 00:04:40,159 Speaker 6: leaders come in place, the quicker the de regulatory effort 107 00:04:40,200 --> 00:04:40,760 Speaker 6: can take place. 108 00:04:41,120 --> 00:04:43,919 Speaker 2: Nathan, President elect Trump is se had lame duck president? 109 00:04:44,279 --> 00:04:45,440 Speaker 2: Is that a fair way to look at it? 110 00:04:46,160 --> 00:04:46,400 Speaker 1: Now? 111 00:04:46,480 --> 00:04:48,960 Speaker 6: So generally, and I say this generally, in the second 112 00:04:49,040 --> 00:04:51,839 Speaker 6: term of a presidential term, if you will, I think 113 00:04:51,880 --> 00:04:54,880 Speaker 6: President Obama or President George W. Bush, you usually have 114 00:04:54,920 --> 00:04:58,240 Speaker 6: about eighteen months to expend your political capital. First one 115 00:04:58,279 --> 00:05:00,480 Speaker 6: hundred days of the presidency is critical. But as soon 116 00:05:00,520 --> 00:05:03,200 Speaker 6: as Congress begins to think about their mid term elections 117 00:05:03,200 --> 00:05:05,640 Speaker 6: and then as the result when they come back, you know, 118 00:05:05,680 --> 00:05:07,520 Speaker 6: why should they stick their necks out for the president 119 00:05:07,560 --> 00:05:09,640 Speaker 6: who's going to be gone? So what do presidents tend 120 00:05:09,680 --> 00:05:11,479 Speaker 6: to do. They tend to go internationally, and they tend 121 00:05:11,480 --> 00:05:13,520 Speaker 6: to travel because the power of the presidency is more 122 00:05:13,560 --> 00:05:15,920 Speaker 6: powerful there. So, you know, we do think President Trump 123 00:05:16,000 --> 00:05:18,200 Speaker 6: is going to be spending a lot of time abroad, Ukraine, 124 00:05:18,360 --> 00:05:21,000 Speaker 6: Middle East, for example, China. There's a lot of stuff 125 00:05:21,040 --> 00:05:23,000 Speaker 6: that he can do there. But I wouldn't call him 126 00:05:23,000 --> 00:05:25,080 Speaker 6: a lame duck just yet, because again, the power of 127 00:05:25,120 --> 00:05:26,560 Speaker 6: the presidency is more powerful there. 128 00:05:26,839 --> 00:05:30,119 Speaker 7: You know that China tariffs are coming. You're betting, man, 129 00:05:30,320 --> 00:05:32,600 Speaker 7: what kind of tariff regime do you think we're entering into? 130 00:05:32,680 --> 00:05:34,599 Speaker 7: Is it going to be that ten percent broad is 131 00:05:34,600 --> 00:05:36,720 Speaker 7: it going to be sixty percent on China? What are 132 00:05:36,720 --> 00:05:37,119 Speaker 7: you hearing? 133 00:05:37,800 --> 00:05:40,000 Speaker 6: So this is where I think the process of tariff 134 00:05:40,120 --> 00:05:43,240 Speaker 6: is key. Now, remember, let's just say January twentieth, President 135 00:05:43,240 --> 00:05:45,320 Speaker 6: comes in. You see a red line over the terminal. 136 00:05:45,400 --> 00:05:47,880 Speaker 6: You say, President Trump signs an executive order saying tariffs 137 00:05:47,920 --> 00:05:50,680 Speaker 6: are coming. In the language of that executive order, however, 138 00:05:50,760 --> 00:05:52,680 Speaker 6: I think you'll see language that says the tariff is 139 00:05:52,720 --> 00:05:54,520 Speaker 6: not coming for two hundred and seventy days or three 140 00:05:54,560 --> 00:05:57,920 Speaker 6: hundred and sixty five days. Why, Because tariffs are negotiation tools. 141 00:05:58,000 --> 00:06:00,360 Speaker 6: President Trump doesn't know what the reciprocal tariff on China 142 00:06:00,440 --> 00:06:03,000 Speaker 6: from China would be, and President Trump wants to use 143 00:06:03,040 --> 00:06:05,480 Speaker 6: this as a negotiation. So I think there's going to 144 00:06:05,520 --> 00:06:08,120 Speaker 6: be language in there allowing flexibility. Allowed President Trump to 145 00:06:08,120 --> 00:06:10,720 Speaker 6: come back and say, ah, maybe not sixty percent, maybe 146 00:06:10,720 --> 00:06:12,360 Speaker 6: we'll go to ten percent because China gave us a 147 00:06:12,360 --> 00:06:14,599 Speaker 6: win or something like that. So what we're saying is 148 00:06:14,880 --> 00:06:16,680 Speaker 6: watch out for that headline risk in the first or 149 00:06:16,720 --> 00:06:19,120 Speaker 6: second quarter of next year. But then you're gonna get 150 00:06:19,160 --> 00:06:22,119 Speaker 6: probably six months to actually truly understand what that tariff 151 00:06:22,160 --> 00:06:23,960 Speaker 6: will look like before it goes into fruition. 152 00:06:24,279 --> 00:06:24,560 Speaker 4: All right. 153 00:06:24,600 --> 00:06:28,200 Speaker 5: Thanks to Nathan Dean, Bloomberg Intelligence Senior policy analyst. 154 00:06:28,440 --> 00:06:31,039 Speaker 2: Staying on the US election guest host Damian Sasaur and 155 00:06:31,080 --> 00:06:34,080 Speaker 2: I were joined by Wendy Schuller, professor at Brown University. 156 00:06:34,360 --> 00:06:36,200 Speaker 2: She gave us her take on the twenty twenty four 157 00:06:36,320 --> 00:06:39,640 Speaker 2: US election, along with some of its political ramifications. And 158 00:06:39,720 --> 00:06:42,479 Speaker 2: we first asked Wendy, what happens next for the Democratic 159 00:06:42,480 --> 00:06:43,880 Speaker 2: Party during a Trump presidency? 160 00:06:44,320 --> 00:06:45,880 Speaker 8: Well, you have to ask yourself why. 161 00:06:46,000 --> 00:06:49,720 Speaker 9: You know, popular incumbent senators have been reelected before could 162 00:06:49,760 --> 00:06:53,520 Speaker 9: not withstand the red wave, and so you can attribute 163 00:06:53,520 --> 00:06:56,600 Speaker 9: it to Trump charisma the Trump followers. We can do 164 00:06:56,680 --> 00:06:59,200 Speaker 9: that if we want to as observers, but you know 165 00:06:59,240 --> 00:07:04,440 Speaker 9: this and deep, This reaction across voters, across different kinds 166 00:07:04,440 --> 00:07:08,320 Speaker 9: of voters, from different backgrounds, different ages. This ran deep, 167 00:07:08,520 --> 00:07:10,960 Speaker 9: and it was a signal that said, we don't like 168 00:07:11,080 --> 00:07:13,800 Speaker 9: the policies that you're enacting, So what can they do? 169 00:07:13,960 --> 00:07:16,800 Speaker 8: I think it's informative to go back to Obama. Obama 170 00:07:17,040 --> 00:07:18,760 Speaker 8: had a much stricter border. 171 00:07:18,480 --> 00:07:21,480 Speaker 9: Policy than Joe Biden, and I think he did that 172 00:07:21,600 --> 00:07:24,120 Speaker 9: because he sensed there wasn't enough support in America for 173 00:07:24,200 --> 00:07:27,160 Speaker 9: something more liberal and more open, so you can say 174 00:07:27,160 --> 00:07:29,720 Speaker 9: to yourselves, the Democrats closed the border for too late. 175 00:07:30,240 --> 00:07:32,600 Speaker 9: The Democrats didn't push hard enough to get those interest 176 00:07:32,640 --> 00:07:35,720 Speaker 9: rates down. The Democrats didn't pay attention to the price 177 00:07:35,760 --> 00:07:39,080 Speaker 9: of eggs, and that's unusual for the Democrats, who usually 178 00:07:39,160 --> 00:07:41,320 Speaker 9: care a lot about the price of eggs. So I 179 00:07:41,320 --> 00:07:45,000 Speaker 9: think this is not necessarily a reboot completely, but they 180 00:07:45,000 --> 00:07:47,240 Speaker 9: have got to meet the voter where the voter is. 181 00:07:47,560 --> 00:07:49,720 Speaker 8: The voter was not with the Democratic Party. 182 00:07:49,960 --> 00:07:51,720 Speaker 7: Wendy, you mention the border, and let's look ahead here. 183 00:07:51,720 --> 00:07:53,440 Speaker 7: Trump is about to embark on what many believed to 184 00:07:53,440 --> 00:07:58,000 Speaker 7: be the largest deportation program in US history. How does 185 00:07:58,000 --> 00:08:00,160 Speaker 7: he expect to round them all up? And does he 186 00:08:00,200 --> 00:08:01,560 Speaker 7: intend to send him. 187 00:08:02,160 --> 00:08:05,000 Speaker 9: Well, you know Trump, Trump always surprises us in the 188 00:08:05,040 --> 00:08:06,120 Speaker 9: sense that he'll sort of. 189 00:08:06,040 --> 00:08:08,120 Speaker 8: Go off the ranch and then I'll kind of moderate. 190 00:08:08,520 --> 00:08:08,680 Speaker 1: You know. 191 00:08:08,720 --> 00:08:11,320 Speaker 8: The idea is how long does Trump want to be president? 192 00:08:11,400 --> 00:08:15,200 Speaker 9: You know, he's constitutionally prohibited from electing, being elected, and serving, 193 00:08:15,480 --> 00:08:18,240 Speaker 9: not from running, and so you know, does he want 194 00:08:18,280 --> 00:08:19,480 Speaker 9: to last long time? 195 00:08:19,680 --> 00:08:21,920 Speaker 8: Maybe get rid of the twenty second Amendment. I don't 196 00:08:21,960 --> 00:08:24,000 Speaker 8: know what he plans, but I think he. 197 00:08:23,960 --> 00:08:27,520 Speaker 9: Will scale this idea back especially since the border has 198 00:08:27,560 --> 00:08:31,480 Speaker 9: been shut down and you know, undocumented migration has slowed 199 00:08:31,560 --> 00:08:32,120 Speaker 9: so much. 200 00:08:32,440 --> 00:08:34,480 Speaker 8: Does he really have to do this? Does he have 201 00:08:34,559 --> 00:08:37,240 Speaker 8: to disrupt the country this way? You know, he could 202 00:08:37,280 --> 00:08:39,520 Speaker 8: do some of it, but I don't think the pressure's on. 203 00:08:39,520 --> 00:08:41,800 Speaker 9: Him to do all of it, because Biden has already 204 00:08:41,800 --> 00:08:44,040 Speaker 9: taken this step and he'll keep that policy in place. 205 00:08:44,320 --> 00:08:46,120 Speaker 7: Wendy, you mention the twenty second Amendment. You're not the 206 00:08:46,120 --> 00:08:47,679 Speaker 7: first one to talk about it, but you know what 207 00:08:47,800 --> 00:08:49,800 Speaker 7: I'm most interested in, and it's the FED right. And 208 00:08:49,800 --> 00:08:52,320 Speaker 7: Trump has made no secret about his intention to have 209 00:08:52,360 --> 00:08:54,960 Speaker 7: a greater say and monetary policy here in the US. 210 00:08:55,080 --> 00:08:57,400 Speaker 7: My question for you is what legal mechanisms can Trump 211 00:08:57,400 --> 00:08:59,599 Speaker 7: take advantage of in order for the to give the 212 00:08:59,600 --> 00:09:02,680 Speaker 7: over LA Office more control. More saying monetary policy, well, 213 00:09:02,720 --> 00:09:03,400 Speaker 7: I mean the. 214 00:09:03,320 --> 00:09:04,280 Speaker 8: Federal Reserve Act. 215 00:09:04,320 --> 00:09:06,400 Speaker 9: I mean literally the Act creating Federal Reserve and all 216 00:09:06,440 --> 00:09:08,040 Speaker 9: the bills that have come you know after that and 217 00:09:08,040 --> 00:09:11,000 Speaker 9: reauthorizing it. You know, that's something that's been sort of 218 00:09:11,000 --> 00:09:16,959 Speaker 9: a partnership with private monetary institutions, banks and the federal government. 219 00:09:17,080 --> 00:09:19,679 Speaker 9: And the thing about Donald Trump is gonna need cash, right, 220 00:09:19,760 --> 00:09:22,600 Speaker 9: you can't, you know, you can't crash the government and 221 00:09:22,640 --> 00:09:26,200 Speaker 9: crash the economy by the federal government running out of cash. 222 00:09:26,360 --> 00:09:29,760 Speaker 9: So there is a symbiotic relationship between really big banks 223 00:09:29,800 --> 00:09:32,720 Speaker 9: and the Federal Reserve itself and the success of a president. 224 00:09:33,040 --> 00:09:35,920 Speaker 8: So there's going to have to be negotiations there. But 225 00:09:36,040 --> 00:09:36,839 Speaker 8: I don't think the. 226 00:09:36,800 --> 00:09:38,440 Speaker 9: Heads of big banks you're just going to hand over 227 00:09:38,520 --> 00:09:40,240 Speaker 9: the keys of the kingdom to the president of the 228 00:09:40,320 --> 00:09:42,240 Speaker 9: United States and amount of who they are, and so 229 00:09:42,320 --> 00:09:44,840 Speaker 9: that will be a negotiation, and Trump fancies himself as 230 00:09:44,840 --> 00:09:45,840 Speaker 9: a very good negotiator. 231 00:09:46,480 --> 00:09:48,920 Speaker 2: Wendy, does Kamala Harris have it future as a leader 232 00:09:48,920 --> 00:09:51,400 Speaker 2: of the Democratic Party. I'm thinking maybe in four years time. 233 00:09:52,120 --> 00:09:52,400 Speaker 2: I think. 234 00:09:52,559 --> 00:09:55,040 Speaker 9: I think, all things considered, she ran a good campaign 235 00:09:55,160 --> 00:09:57,679 Speaker 9: what she was given, the time frame that she had 236 00:09:57,720 --> 00:10:00,240 Speaker 9: to work within, and her balancing act of trying to 237 00:10:00,280 --> 00:10:03,160 Speaker 9: separate from the Biden record and also present some sort 238 00:10:03,160 --> 00:10:06,240 Speaker 9: of plan for the future and bringing in and solidifying 239 00:10:06,360 --> 00:10:09,800 Speaker 9: particularly younger women, even older women. I think there's still 240 00:10:09,800 --> 00:10:12,920 Speaker 9: a block and a constituency that she can tap if 241 00:10:12,960 --> 00:10:15,480 Speaker 9: she wanted to run again. I just don't see this 242 00:10:15,559 --> 00:10:18,199 Speaker 9: as a Kamala Harris failed campaign. I see it as 243 00:10:18,360 --> 00:10:21,760 Speaker 9: Trump being a former president and energizing their base and 244 00:10:21,800 --> 00:10:24,760 Speaker 9: not making the same campaign mistakes they did in twenty twenty, 245 00:10:24,960 --> 00:10:27,840 Speaker 9: and the Biden record. I don't know if anybody could 246 00:10:27,880 --> 00:10:29,520 Speaker 9: have won in the face of those numbers. 247 00:10:29,720 --> 00:10:31,559 Speaker 7: Wendy, I wonder if you could shift your attention here 248 00:10:31,600 --> 00:10:34,600 Speaker 7: to what's going on in Ukraine. Obviously, Zelenski was the 249 00:10:34,600 --> 00:10:38,000 Speaker 7: firebrand who rejected Trump's request for information on Hunter Biden's 250 00:10:38,040 --> 00:10:41,000 Speaker 7: dealings back during his first tenure. And what comes next 251 00:10:41,440 --> 00:10:44,960 Speaker 7: for the Ukraine, for Zelenski, for Central Europe, and for 252 00:10:45,040 --> 00:10:46,559 Speaker 7: Russia under a Trump administration. 253 00:10:47,840 --> 00:10:50,160 Speaker 9: Well, I think Trump is a fan of Putin, and 254 00:10:50,200 --> 00:10:52,559 Speaker 9: I think Trump has said before that he thinks there's 255 00:10:52,600 --> 00:10:55,599 Speaker 9: a deal that can be reached. So my guess is 256 00:10:55,640 --> 00:10:57,480 Speaker 9: Trump says, listen, we're not going to send you the 257 00:10:57,480 --> 00:11:00,199 Speaker 9: same kind of weaponry, We're not going to support the 258 00:11:00,240 --> 00:11:03,240 Speaker 9: same way. Go to the table, cut a deal, give 259 00:11:03,320 --> 00:11:05,640 Speaker 9: up crimea I mean literally, these are the things that 260 00:11:05,679 --> 00:11:08,000 Speaker 9: he'll say. And maybe we'll make sure that more of 261 00:11:08,040 --> 00:11:09,880 Speaker 9: your people don't get killed. I mean, I think that's 262 00:11:09,920 --> 00:11:11,880 Speaker 9: what we'll do. And in the Middle East, you know, 263 00:11:11,960 --> 00:11:13,760 Speaker 9: I think people who think that he'll be a diehard 264 00:11:13,760 --> 00:11:16,480 Speaker 9: suborn of Israel maybe, but he may go to the 265 00:11:16,480 --> 00:11:18,120 Speaker 9: Saudia's and say, what kind of deal you want to 266 00:11:18,160 --> 00:11:20,559 Speaker 9: cut to get this thing over with against Iran. I mean, 267 00:11:20,760 --> 00:11:23,400 Speaker 9: he wants to make deals and be the hero. And 268 00:11:23,400 --> 00:11:25,840 Speaker 9: that's something we've seen before and we'll see again. So 269 00:11:25,960 --> 00:11:28,719 Speaker 9: whatever whoever's dealing with him has to be able to 270 00:11:28,760 --> 00:11:30,720 Speaker 9: give him some sort of victory he can walk away with. 271 00:11:30,960 --> 00:11:33,719 Speaker 5: All right, thanks to Wendy Schilder, professor at Brown University. 272 00:11:34,000 --> 00:11:35,760 Speaker 5: Coming up, we're going to talk more on why Donald 273 00:11:35,800 --> 00:11:39,200 Speaker 5: Trump winning the US presidency is leaving banks hopeful. 274 00:11:39,480 --> 00:11:42,360 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 275 00:11:42,400 --> 00:11:44,760 Speaker 2: depth research and data on two thousand companies in one 276 00:11:44,840 --> 00:11:47,920 Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via 277 00:11:47,960 --> 00:11:49,040 Speaker 2: b I go on the terminal. 278 00:11:49,080 --> 00:11:52,479 Speaker 5: I'm Paul Sweeney and I'm John Tucker. This is Bloomberg. 279 00:12:01,640 --> 00:12:05,520 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 280 00:12:05,600 --> 00:12:08,280 Speaker 1: weekdays at ten am Eastern on Apple car Play and 281 00:12:08,280 --> 00:12:11,360 Speaker 1: Android Auto with the Bloomberg Business App. Listen on demand 282 00:12:11,360 --> 00:12:15,679 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 283 00:12:16,520 --> 00:12:17,559 Speaker 2: I'm Paul Sween. 284 00:12:17,400 --> 00:12:19,640 Speaker 5: And I'm John Tucker. Filling in for Alex Steele. 285 00:12:19,800 --> 00:12:22,360 Speaker 2: We continue with another conversation related to the twenty twenty 286 00:12:22,360 --> 00:12:23,320 Speaker 2: four US election. 287 00:12:23,520 --> 00:12:26,600 Speaker 5: This week, Donald Trump was elected forty seventh president of 288 00:12:26,600 --> 00:12:30,160 Speaker 5: the United States, and according to Bloomberg Intelligence Research, Trump's 289 00:12:30,240 --> 00:12:33,439 Speaker 5: victory is giving banks optimism for less regulation. 290 00:12:33,960 --> 00:12:35,400 Speaker 2: For more on this, John and I were joined by 291 00:12:35,440 --> 00:12:38,760 Speaker 2: Alison Williams, Bloomberg Intelligence senior analysts covering the global banks. 292 00:12:38,960 --> 00:12:42,319 Speaker 5: We first asked Allison why bank shares rallied afternoons of 293 00:12:42,400 --> 00:12:44,200 Speaker 5: Donald Trump becoming president elect. 294 00:12:44,720 --> 00:12:47,880 Speaker 10: So we see three things. So the big one is 295 00:12:48,360 --> 00:12:54,040 Speaker 10: less regulation. Secondly higher industrates, and then third we really 296 00:12:54,080 --> 00:12:56,880 Speaker 10: see some momentum for fee revenue, which has really been 297 00:12:56,960 --> 00:13:00,959 Speaker 10: powering the big banks that I cover. So the regulation 298 00:13:01,640 --> 00:13:04,680 Speaker 10: is the big one, and it's not just some of 299 00:13:04,720 --> 00:13:07,800 Speaker 10: the specific issues for the banks as a whole in 300 00:13:07,800 --> 00:13:10,200 Speaker 10: one or two banks, but it is just, you know, 301 00:13:10,240 --> 00:13:12,400 Speaker 10: the feeling that the pendulum can swing the other way 302 00:13:12,480 --> 00:13:15,760 Speaker 10: right so that there won't be new regulations and that 303 00:13:15,840 --> 00:13:17,960 Speaker 10: some of the things that are sort of in the 304 00:13:18,000 --> 00:13:21,920 Speaker 10: pipeline could be watered down or pushed out. That baso 305 00:13:21,920 --> 00:13:25,240 Speaker 10: three endgame has been the big one for the largest banks. 306 00:13:25,960 --> 00:13:31,160 Speaker 10: And you know, basil dictates that all jurisdictions around the 307 00:13:31,200 --> 00:13:34,440 Speaker 10: world have to do some form of implementation. But the 308 00:13:34,559 --> 00:13:37,000 Speaker 10: US proposal that came out in twenty twenty three was 309 00:13:37,800 --> 00:13:40,840 Speaker 10: really much stricter than we saw in other regions. We 310 00:13:40,960 --> 00:13:43,800 Speaker 10: had already had some expectations that that would be watered 311 00:13:43,840 --> 00:13:47,320 Speaker 10: down from you know, comments that Powell had made and 312 00:13:47,400 --> 00:13:50,800 Speaker 10: also comments from bar in September, so some of that 313 00:13:50,880 --> 00:13:52,680 Speaker 10: was sort of in the stocks, but I think the 314 00:13:52,720 --> 00:13:58,400 Speaker 10: feeling is, you know, from our regulatory group that the 315 00:13:58,440 --> 00:14:01,680 Speaker 10: things could either get pushed further out or they could 316 00:14:01,720 --> 00:14:04,320 Speaker 10: be water down even further. And so that's good for 317 00:14:04,360 --> 00:14:07,440 Speaker 10: the banks because their excess capital is something like five 318 00:14:07,480 --> 00:14:11,440 Speaker 10: to fifteen percent of their market caps. So definitely that 319 00:14:11,640 --> 00:14:14,800 Speaker 10: was something aiding City Group in Wells Fargo as well 320 00:14:14,840 --> 00:14:18,680 Speaker 10: as someone like Morgan, Stanley and Goldman, where even with 321 00:14:18,760 --> 00:14:21,960 Speaker 10: the water even with the sort of lighter touch in September, 322 00:14:22,680 --> 00:14:24,880 Speaker 10: they were still going to have a deficit in their capital. 323 00:14:25,000 --> 00:14:26,680 Speaker 10: So some positive news. 324 00:14:26,440 --> 00:14:27,120 Speaker 2: On that front. 325 00:14:27,440 --> 00:14:30,600 Speaker 10: Also, as you know, you know, Wells Fargo has had 326 00:14:30,640 --> 00:14:33,080 Speaker 10: this asset cap for a long time. City Group there's 327 00:14:33,120 --> 00:14:37,200 Speaker 10: been some concerns, especially around when they reported their results, 328 00:14:37,200 --> 00:14:40,840 Speaker 10: that they could face more scrutiny, So just a particular 329 00:14:40,920 --> 00:14:45,120 Speaker 10: easing I think also benefited those couple of banks. And 330 00:14:45,160 --> 00:14:48,120 Speaker 10: then there are some other things related to card and 331 00:14:48,160 --> 00:14:51,680 Speaker 10: consumer and finance as well. On the interest rate funds, 332 00:14:51,880 --> 00:14:55,360 Speaker 10: all these banks are positioned for higher rates, so we 333 00:14:55,480 --> 00:14:57,800 Speaker 10: know that, you know, we'll be watching the FED in 334 00:14:57,880 --> 00:15:01,600 Speaker 10: terms of short term rates. I think in general that 335 00:15:02,280 --> 00:15:04,920 Speaker 10: also got a lift. And then finally from our viewpoint, 336 00:15:05,560 --> 00:15:07,880 Speaker 10: the big thing is that we see momentum and fees 337 00:15:07,880 --> 00:15:10,120 Speaker 10: and that's been a huge boost to the earnings for 338 00:15:10,200 --> 00:15:10,760 Speaker 10: these banks. 339 00:15:10,840 --> 00:15:15,040 Speaker 5: Just back to the Buzzo three endgame rules, the idea 340 00:15:15,200 --> 00:15:17,920 Speaker 5: is give me the dummies version. You had to set 341 00:15:17,960 --> 00:15:22,200 Speaker 5: aside more capital basically in case things went south, so 342 00:15:22,280 --> 00:15:27,920 Speaker 5: the financial institutions wouldn't ruin the economy, right, So that's 343 00:15:27,960 --> 00:15:31,720 Speaker 5: freed up. Does that now go back to shareholders? Is 344 00:15:31,720 --> 00:15:32,400 Speaker 5: that the idea? 345 00:15:33,480 --> 00:15:37,560 Speaker 10: That is the idea, and so Boso three endgame rules. So, 346 00:15:38,000 --> 00:15:40,400 Speaker 10: as you know, Baso three is something that sort of 347 00:15:40,800 --> 00:15:44,400 Speaker 10: came after the financial crisis, and there's been many iterations. 348 00:15:44,440 --> 00:15:47,680 Speaker 10: Thus the reference to this last set of rules as 349 00:15:47,880 --> 00:15:51,760 Speaker 10: endgame and basically what that dictated was that as they 350 00:15:51,800 --> 00:15:55,800 Speaker 10: measure their risk weighted assets, there would be big increases 351 00:15:55,840 --> 00:15:58,800 Speaker 10: in that, and thus they'd be having to hire a 352 00:15:58,840 --> 00:16:03,720 Speaker 10: hole more capital against that. And so based on third 353 00:16:03,800 --> 00:16:08,960 Speaker 10: quarter earnings and fourth quarter requirements, their excess capital was 354 00:16:08,960 --> 00:16:12,480 Speaker 10: five to fifteen percent of their market cap. Under the 355 00:16:12,520 --> 00:16:16,840 Speaker 10: Basil three rules, that would turn to deficits across the bank, 356 00:16:16,920 --> 00:16:19,920 Speaker 10: so they would have to find a way to increase 357 00:16:19,960 --> 00:16:23,000 Speaker 10: their capital. There is a timeline, so they probably would 358 00:16:23,000 --> 00:16:26,400 Speaker 10: have done that through internal capital generation. But to your point, 359 00:16:26,480 --> 00:16:28,480 Speaker 10: they that would have been capital that they could not 360 00:16:28,520 --> 00:16:29,520 Speaker 10: return to shareholders. 361 00:16:29,640 --> 00:16:33,120 Speaker 5: Can I just who has the most capital to be 362 00:16:33,200 --> 00:16:34,880 Speaker 5: returned to shareholders? 363 00:16:35,680 --> 00:16:40,680 Speaker 10: Well, based on the requirements today, City Group, their excess 364 00:16:40,720 --> 00:16:43,440 Speaker 10: capital is something like fifteen percent of. 365 00:16:43,360 --> 00:16:44,440 Speaker 2: Their market cap. 366 00:16:45,120 --> 00:16:48,240 Speaker 10: Okay, all right, And I would and I would point 367 00:16:48,240 --> 00:16:52,440 Speaker 10: out also that you know these banks have and so 368 00:16:52,520 --> 00:16:55,080 Speaker 10: by the way, like the banks do sort of target 369 00:16:55,400 --> 00:16:58,320 Speaker 10: holding a buffer to the requirements. So there's a little 370 00:16:58,360 --> 00:17:00,720 Speaker 10: bit of that, but I think you know, in general, 371 00:17:01,520 --> 00:17:05,080 Speaker 10: it is the fact that buybacks will likely go up. 372 00:17:05,160 --> 00:17:07,959 Speaker 10: These banks already have buyback programs in place so they 373 00:17:08,000 --> 00:17:11,240 Speaker 10: can execute on them. But it's also the math. If 374 00:17:11,240 --> 00:17:14,320 Speaker 10: you have higher equity, your return on equity is going 375 00:17:14,400 --> 00:17:17,639 Speaker 10: to be lower, and that's how investors value stock. So 376 00:17:18,320 --> 00:17:22,880 Speaker 10: there is definitely the higher buybacks, but also I think 377 00:17:22,960 --> 00:17:27,040 Speaker 10: it is the sentiment that is helping bank multiples. This 378 00:17:27,119 --> 00:17:31,480 Speaker 10: specific regulation, but also less regulation in general. One other 379 00:17:31,520 --> 00:17:34,320 Speaker 10: area I didn't talk about with regard to regulation is 380 00:17:34,400 --> 00:17:37,080 Speaker 10: less antitrust. So that's good for M and A and 381 00:17:37,119 --> 00:17:40,320 Speaker 10: that's really why you saw Goldman and Morgan Stanley very 382 00:17:40,600 --> 00:17:42,000 Speaker 10: the stocks reacting to that. 383 00:17:42,600 --> 00:17:42,840 Speaker 8: All right. 384 00:17:42,840 --> 00:17:46,560 Speaker 5: Thanks to Alison Williams, Bloomberg Intelligence Senior analysts Global banks 385 00:17:46,600 --> 00:17:47,720 Speaker 5: and asset Managers. 386 00:17:48,119 --> 00:17:50,879 Speaker 2: Each week we look at research from Bloomberg n EF 387 00:17:51,000 --> 00:17:53,520 Speaker 2: previously known as New Energy Finance. They're the team at 388 00:17:53,520 --> 00:17:57,240 Speaker 2: Bloomberg that tracks and analyzes the energy transition from commodities 389 00:17:57,280 --> 00:18:01,119 Speaker 2: to power, transport, industries, buildings, and agri cultural sectors. This 390 00:18:01,200 --> 00:18:03,560 Speaker 2: week we took a look at Bloomberg neef's outlook for 391 00:18:03,640 --> 00:18:06,600 Speaker 2: wind and solar energy storage over the next ten years. 392 00:18:06,720 --> 00:18:09,760 Speaker 2: Guest host Jess Mett and I were joined by Yao Sachini, 393 00:18:09,920 --> 00:18:13,080 Speaker 2: Bloomberg NEF head of Energy Storage. We first asked her 394 00:18:13,359 --> 00:18:16,160 Speaker 2: where we are in terms of energy storage just. 395 00:18:16,119 --> 00:18:18,159 Speaker 11: For some context, and we're going to talk about some 396 00:18:18,200 --> 00:18:20,720 Speaker 11: of the analysis that we actually published around the clean 397 00:18:20,840 --> 00:18:25,200 Speaker 11: energy market outlook specifically look at the US for some contexts. 398 00:18:25,240 --> 00:18:27,800 Speaker 11: There's just been a lot of investment that's been pouring 399 00:18:27,800 --> 00:18:30,879 Speaker 11: into clean power segments. We've seen a lot of that 400 00:18:30,920 --> 00:18:34,240 Speaker 11: accelerated over the last I guess two years, and since 401 00:18:34,280 --> 00:18:37,520 Speaker 11: then Inflation Reduction Act passed, facilitating a lot of new 402 00:18:37,560 --> 00:18:40,760 Speaker 11: investments into wind, solar and storage sectors, which are the 403 00:18:40,760 --> 00:18:44,120 Speaker 11: sectors that we cover in that particular report. There's about 404 00:18:45,119 --> 00:18:48,840 Speaker 11: there's about three hundred billion dollars invested across these sectors 405 00:18:48,840 --> 00:18:52,760 Speaker 11: a wind, solar, storage, and other clean transportation and other 406 00:18:52,800 --> 00:18:57,200 Speaker 11: sectors in twenty twenty three. That's about twenty two percent 407 00:18:57,280 --> 00:18:59,639 Speaker 11: higher than we saw in previous years. And then what 408 00:18:59,640 --> 00:19:01,520 Speaker 11: we were doing this report is to have a twenty 409 00:19:01,520 --> 00:19:03,800 Speaker 11: thirty five view, So in the next decade, what do 410 00:19:03,840 --> 00:19:08,640 Speaker 11: we investments and capacity editions look like around these clean sectors. 411 00:19:09,320 --> 00:19:12,080 Speaker 11: There is actually a lot that's that's bound to happen 412 00:19:12,200 --> 00:19:15,040 Speaker 11: in terms of just what's committed to date happening over 413 00:19:15,040 --> 00:19:18,679 Speaker 11: the next few years, and that's likely to unlock a 414 00:19:18,680 --> 00:19:20,919 Speaker 11: lot more investment over the twenty thirty five period. 415 00:19:21,200 --> 00:19:23,679 Speaker 2: Are the risks to some of those moneies that have 416 00:19:23,720 --> 00:19:25,440 Speaker 2: already been committed ear marked. 417 00:19:26,359 --> 00:19:29,280 Speaker 11: Yeah, So what we did, I guess the way we 418 00:19:29,320 --> 00:19:31,240 Speaker 11: think about it is to look at what is our 419 00:19:31,280 --> 00:19:34,439 Speaker 11: expectation in the market out to twenty thirty five. So 420 00:19:34,480 --> 00:19:37,240 Speaker 11: for some context, our expectation in terms of our forecast 421 00:19:37,280 --> 00:19:41,080 Speaker 11: for winds, solar and storage installations is about one point 422 00:19:41,160 --> 00:19:45,680 Speaker 11: one tarrawat of new yeah, new capacity editions out to 423 00:19:45,760 --> 00:19:49,919 Speaker 11: twenty thirty five. For context, in the US power grid, 424 00:19:50,600 --> 00:19:52,480 Speaker 11: as of the end of twenty twenty three, there was 425 00:19:52,640 --> 00:19:57,679 Speaker 11: about one point two terrawat of cumulative installed power generation capacity. 426 00:19:57,960 --> 00:20:00,879 Speaker 11: So essentially we're about doubling in terms of capacity in 427 00:20:00,920 --> 00:20:03,680 Speaker 11: the grid out to twenty thirty five. But that addition 428 00:20:03,840 --> 00:20:06,000 Speaker 11: is just from when solar and storage, which is really 429 00:20:06,040 --> 00:20:09,439 Speaker 11: impressive in terms of the risk factors to your question. 430 00:20:10,200 --> 00:20:13,560 Speaker 11: So the way we were investigating that in the report, 431 00:20:13,680 --> 00:20:15,760 Speaker 11: or analyze that in the report is to try to 432 00:20:15,800 --> 00:20:19,000 Speaker 11: think about us in the worst case scenario. So there's 433 00:20:19,040 --> 00:20:21,119 Speaker 11: a lot of investment that's already been committed at the 434 00:20:21,160 --> 00:20:23,720 Speaker 11: back of the investment tax credits and some of the 435 00:20:23,760 --> 00:20:27,160 Speaker 11: other incentives in the Inflation Reduction Act, but we wanted 436 00:20:27,200 --> 00:20:30,560 Speaker 11: to look at Okay, so what happens if these incentives, 437 00:20:30,560 --> 00:20:35,200 Speaker 11: so the investment tax credit actually gets repealed right away, 438 00:20:35,480 --> 00:20:37,760 Speaker 11: which is of course a worst case scenario. It's not 439 00:20:37,880 --> 00:20:40,119 Speaker 11: our expectation of what will happen, but it gives us 440 00:20:40,160 --> 00:20:44,600 Speaker 11: some benchmark of what could happen. And under that scenario, 441 00:20:44,680 --> 00:20:47,200 Speaker 11: it's about a seventeen percent decline, so it's a fifth 442 00:20:47,560 --> 00:20:50,520 Speaker 11: of capacity that gets dropped or not built in the 443 00:20:50,560 --> 00:20:54,640 Speaker 11: twenty thirty five timeframe. One additional component is like if 444 00:20:54,680 --> 00:20:57,520 Speaker 11: that actually would were to happen, is that projects would 445 00:20:57,560 --> 00:21:00,080 Speaker 11: try to rush to try to be built before that 446 00:21:01,240 --> 00:21:03,520 Speaker 11: step down happens, which could happen in the end of 447 00:21:03,520 --> 00:21:06,040 Speaker 11: twenty twenty six or the end of twenty twenty five. 448 00:21:06,520 --> 00:21:09,600 Speaker 11: So essentially there's a rush to build. A decline in 449 00:21:09,640 --> 00:21:11,640 Speaker 11: the market, and then the market picks up up again, 450 00:21:11,720 --> 00:21:13,720 Speaker 11: but not at the same rate or not to the 451 00:21:13,760 --> 00:21:16,640 Speaker 11: same degree as it would in a non repeal scenario. 452 00:21:16,800 --> 00:21:17,800 Speaker 11: So that's how we looked at. 453 00:21:17,720 --> 00:21:20,600 Speaker 4: That walk us through the key fundamentals that you think 454 00:21:20,640 --> 00:21:22,880 Speaker 4: have helped build the industry. 455 00:21:23,000 --> 00:21:26,520 Speaker 11: Absolutely, so, I think we're obviously in an acceleration mode 456 00:21:26,560 --> 00:21:29,320 Speaker 11: at the moment. It's almost like certain key elements are 457 00:21:29,400 --> 00:21:31,879 Speaker 11: keeping the market from growing as quickly as it could. 458 00:21:32,440 --> 00:21:35,359 Speaker 11: But in terms of the fundamentals in the past, major 459 00:21:35,440 --> 00:21:38,119 Speaker 11: one is the fact that the cost of wind, solar, 460 00:21:38,160 --> 00:21:41,200 Speaker 11: and storage and batteries has come down significantly over the 461 00:21:41,280 --> 00:21:45,640 Speaker 11: last decades. That's really made the cost of these technologies 462 00:21:45,640 --> 00:21:50,359 Speaker 11: competitive against conventional generation, conventional fossil fuel generators in the 463 00:21:50,480 --> 00:21:53,879 Speaker 11: US that would be trying to displace gas. And we 464 00:21:53,920 --> 00:21:55,920 Speaker 11: do see in most of the markets of the US 465 00:21:56,000 --> 00:21:58,800 Speaker 11: wind and solar are competitive against gas. Of course, they 466 00:21:58,800 --> 00:22:01,720 Speaker 11: don't deliver energy at all, like twenty four to seven, 467 00:22:01,760 --> 00:22:05,160 Speaker 11: and that's where batteries comes in. So the cost of batteries, 468 00:22:05,480 --> 00:22:09,080 Speaker 11: like specifically lithiuman batteries has fallen by more than ninety 469 00:22:09,119 --> 00:22:11,520 Speaker 11: percent over the last decade, which is significant. 470 00:22:11,680 --> 00:22:14,200 Speaker 2: How's the US doing you quote some really big numbers 471 00:22:14,200 --> 00:22:17,880 Speaker 2: here in terms of investment in tara watts and all those. 472 00:22:18,320 --> 00:22:20,320 Speaker 2: How are we versus the rest of the world in 473 00:22:20,400 --> 00:22:22,680 Speaker 2: terms of, you know, just in terms of really embracing 474 00:22:23,040 --> 00:22:23,840 Speaker 2: cleaner energy. 475 00:22:24,560 --> 00:22:27,720 Speaker 11: Yeah, so on a country level basis, the US is 476 00:22:27,760 --> 00:22:31,000 Speaker 11: probably second in terms of staffed investments in these sectors. 477 00:22:31,359 --> 00:22:34,080 Speaker 11: That's because China is really the giant in terms of 478 00:22:34,119 --> 00:22:37,920 Speaker 11: attracting new investment into wins, solar and even batteries segments. 479 00:22:38,840 --> 00:22:40,680 Speaker 11: And there's a bit of a pickup game in terms 480 00:22:40,720 --> 00:22:42,400 Speaker 11: of some of the key segments in terms of the 481 00:22:42,440 --> 00:22:45,840 Speaker 11: manufacturing side, so the supply chain and trying to invest 482 00:22:45,880 --> 00:22:48,520 Speaker 11: that and bring that into the US. With mixed levels 483 00:22:48,520 --> 00:22:52,399 Speaker 11: of comparative success across different sectors. 484 00:22:52,240 --> 00:22:56,080 Speaker 4: What should we expect for wind and solar capacity build 485 00:22:56,200 --> 00:22:59,160 Speaker 4: in twenty twenty five for those forecasts. 486 00:22:58,880 --> 00:23:01,720 Speaker 11: Yeah, so we're expecting most of them to grow. That's 487 00:23:01,720 --> 00:23:05,800 Speaker 11: certainly true for solar and storage. When when more or 488 00:23:05,880 --> 00:23:11,280 Speaker 11: less keeping a pace, generally, our expectation is that there 489 00:23:11,320 --> 00:23:14,760 Speaker 11: will be more investment going in. And that's because there's 490 00:23:14,800 --> 00:23:16,760 Speaker 11: just a lot of projects in the pipeline that are 491 00:23:16,960 --> 00:23:21,199 Speaker 11: essentially contracted to meet utility demands. So a lot of 492 00:23:21,240 --> 00:23:24,080 Speaker 11: the US utilities have been you know, contracting working in 493 00:23:24,160 --> 00:23:27,760 Speaker 11: power because they, as I said, they're cheaper, but also 494 00:23:27,800 --> 00:23:31,800 Speaker 11: because they might have some specific goals in order to decarbonize. 495 00:23:32,359 --> 00:23:36,280 Speaker 11: I guess the other factors is just the corporate side. 496 00:23:36,359 --> 00:23:38,680 Speaker 11: So a lot of the you know, the Amazons and Googles, 497 00:23:38,680 --> 00:23:42,440 Speaker 11: these companies have increasingly also been looking for cleaner portfolios 498 00:23:42,760 --> 00:23:45,879 Speaker 11: of energy generation to be meeting their demand. 499 00:23:46,080 --> 00:23:49,560 Speaker 2: Thanks to ye Josa Kenny Bloomberg, any head of energy storage. 500 00:23:49,680 --> 00:23:51,520 Speaker 5: Coming up on a program, we're going to break down 501 00:23:51,600 --> 00:23:55,080 Speaker 5: why Berkshire Hathaways cash pile has reached a record. 502 00:23:55,200 --> 00:23:57,840 Speaker 2: You're listening to the Bloomberg Intelligence on Bloomberg Radio, providing 503 00:23:57,840 --> 00:24:00,159 Speaker 2: in depth research and data on two thousand companies in 504 00:24:00,160 --> 00:24:03,160 Speaker 2: one hundred and thirty industries. You can access Bloomberg Intelligence 505 00:24:03,240 --> 00:24:04,439 Speaker 2: via bi go on the terminal. 506 00:24:04,480 --> 00:24:08,000 Speaker 5: I'm Paul Sweeney and I'm John Tucker, and this is Bloomberg. 507 00:24:12,720 --> 00:24:16,600 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 508 00:24:16,680 --> 00:24:20,240 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 509 00:24:20,240 --> 00:24:23,000 Speaker 1: Otto with the Bloomberg Business app. You can also listen 510 00:24:23,119 --> 00:24:26,200 Speaker 1: live on Amazon Alexa from our flagship New York station. 511 00:24:26,600 --> 00:24:29,320 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 512 00:24:30,640 --> 00:24:33,040 Speaker 5: I'm Paul Sweeney and I'm John Tucker filling in for 513 00:24:33,119 --> 00:24:33,840 Speaker 5: Alex Steele. 514 00:24:34,000 --> 00:24:36,719 Speaker 2: We moved out of corporate earnings. Berkshire Hathaway recently reported 515 00:24:36,760 --> 00:24:39,680 Speaker 2: third quarter earnings and said that it's cash power reached 516 00:24:39,680 --> 00:24:42,000 Speaker 2: three hundred and twenty five billion dollars in the third quarter. 517 00:24:42,280 --> 00:24:45,840 Speaker 5: And this comes as Berkshire's CEO Warren Buffett continued to 518 00:24:45,920 --> 00:24:49,639 Speaker 5: refrain from major acquisitions while trimming some of the most 519 00:24:49,760 --> 00:24:51,760 Speaker 5: significant equity stakes for. 520 00:24:51,680 --> 00:24:53,400 Speaker 2: More at guests, Hos, Jess, Mett, and I were joined 521 00:24:53,440 --> 00:24:56,960 Speaker 2: by Matthew Palizola, Bloomberg Intelligence Senior analyst P and C 522 00:24:57,240 --> 00:25:00,360 Speaker 2: Insurance for First asked Matthew to break down berkshire most 523 00:25:00,400 --> 00:25:01,000 Speaker 2: recent quarter. 524 00:25:01,280 --> 00:25:03,080 Speaker 12: When you look at their earnings, there's a couple of 525 00:25:03,320 --> 00:25:08,080 Speaker 12: layers you have to unpeel. First, their gap earnings were 526 00:25:08,320 --> 00:25:12,640 Speaker 12: swayed by investment changes. Buffett himself has said, you kind 527 00:25:12,640 --> 00:25:14,280 Speaker 12: of just throw that out. We don't really look at that. 528 00:25:14,280 --> 00:25:16,679 Speaker 12: It was like twenty six I think billion versus an 529 00:25:16,680 --> 00:25:20,000 Speaker 12: eleven billion loss in the year ago. Those numbers are 530 00:25:20,080 --> 00:25:23,240 Speaker 12: a little bit irrelevant. The next part is their earnings 531 00:25:23,280 --> 00:25:26,159 Speaker 12: from operating companies. Those, if you look at just the 532 00:25:26,240 --> 00:25:28,439 Speaker 12: number they give you, those were down about six percent. 533 00:25:28,920 --> 00:25:31,760 Speaker 12: What happened there, though, was they have a lot of 534 00:25:31,840 --> 00:25:34,520 Speaker 12: yen debt and there was a big four x loss 535 00:25:34,640 --> 00:25:38,719 Speaker 12: in there, so peel that back. The operating company's earnings 536 00:25:38,720 --> 00:25:41,960 Speaker 12: were up a little bit, which is less than I expected. 537 00:25:42,440 --> 00:25:49,359 Speaker 12: The insurance operation had a couple of unforeseen negatives in it, 538 00:25:49,640 --> 00:25:52,119 Speaker 12: and that really turned it down, some of them I 539 00:25:52,160 --> 00:25:54,960 Speaker 12: don't think are ongoing things. But that was really the 540 00:25:55,000 --> 00:25:57,400 Speaker 12: negative variance was in the insurance business. 541 00:25:57,680 --> 00:26:00,520 Speaker 4: Something because we were actually chatting about this earlier when 542 00:26:00,520 --> 00:26:03,800 Speaker 4: it came to the percent of their cash pilot Berkshire Hathaway. 543 00:26:03,880 --> 00:26:05,439 Speaker 4: So the last time it was around this high, the 544 00:26:05,480 --> 00:26:08,399 Speaker 4: stock market continued to move on to records over the 545 00:26:08,400 --> 00:26:10,919 Speaker 4: following fifty two weeks, but then the last time on 546 00:26:10,960 --> 00:26:13,560 Speaker 4: this opposite into that the lowest percent of cash he 547 00:26:13,640 --> 00:26:16,080 Speaker 4: had at any time over the past decade was right 548 00:26:16,119 --> 00:26:18,439 Speaker 4: when the S and P five hundred briefly peid in 549 00:26:18,720 --> 00:26:22,240 Speaker 4: twenty twenty one. So what's your thoughts whenever you're kind 550 00:26:22,240 --> 00:26:24,560 Speaker 4: of thinking about what this could mean more broadly for 551 00:26:24,640 --> 00:26:27,840 Speaker 4: where like major indexes and equities could potentially be headed. 552 00:26:27,920 --> 00:26:31,399 Speaker 12: Yeah, so, I mean Buffett is a more of a 553 00:26:31,560 --> 00:26:34,879 Speaker 12: time in than timing of the market right clearly, So 554 00:26:36,520 --> 00:26:41,640 Speaker 12: I don't think he's making big moves on large expectations 555 00:26:41,640 --> 00:26:42,080 Speaker 12: on the market. 556 00:26:42,119 --> 00:26:42,560 Speaker 8: If you look what. 557 00:26:42,560 --> 00:26:45,040 Speaker 12: Happened, they sold about twenty two billion dollars worth of 558 00:26:45,080 --> 00:26:48,840 Speaker 12: Apple stock in the quarter. That's along with about nine 559 00:26:48,880 --> 00:26:51,040 Speaker 12: and a half billion worth of Bank of America stock 560 00:26:51,080 --> 00:26:54,480 Speaker 12: in the quarter. I don't think you look at that 561 00:26:54,520 --> 00:26:57,040 Speaker 12: and say, Okay, he's completely parish on everything in the market. 562 00:26:57,200 --> 00:26:59,560 Speaker 12: I think those were, you know, unique things. They were 563 00:26:59,640 --> 00:27:03,400 Speaker 12: highly concentrated in Apple. Their Apple position is down seventy 564 00:27:03,440 --> 00:27:07,040 Speaker 12: percent from its high in terms of the shares they own, 565 00:27:07,480 --> 00:27:10,639 Speaker 12: so I think those things were unique to the stocks 566 00:27:10,640 --> 00:27:14,479 Speaker 12: they own. Buffett has repeatedly talked about taxes going up. 567 00:27:14,520 --> 00:27:18,040 Speaker 12: I don't think it's even an election cycle now, but 568 00:27:18,119 --> 00:27:21,360 Speaker 12: he's just saying even longer term, there's probably only one 569 00:27:21,400 --> 00:27:24,439 Speaker 12: direction taxes are going for us, and that's up. So 570 00:27:24,520 --> 00:27:27,520 Speaker 12: you'd not be surprised to see them taking large gains 571 00:27:27,560 --> 00:27:28,080 Speaker 12: off the board. 572 00:27:28,960 --> 00:27:32,200 Speaker 2: So three twenty five billion dollars, is there any realistic 573 00:27:32,280 --> 00:27:36,480 Speaker 2: scenario for deploying that capital over a multi year period. 574 00:27:36,680 --> 00:27:38,960 Speaker 12: You know, it's tough. They are limited in how much 575 00:27:39,000 --> 00:27:41,360 Speaker 12: shares they can buy back just on the float. 576 00:27:42,760 --> 00:27:43,439 Speaker 5: We had wrote. 577 00:27:43,920 --> 00:27:46,760 Speaker 12: You know, it's tough to see them doing a tens 578 00:27:46,800 --> 00:27:51,240 Speaker 12: of billion dollar acquisition. There is the ownership in Chubb 579 00:27:51,240 --> 00:27:54,919 Speaker 12: out there, which is you know, perhaps the megadeal that 580 00:27:55,040 --> 00:27:59,280 Speaker 12: may or may not ever happen if they do something. 581 00:27:59,280 --> 00:28:01,480 Speaker 12: They bought Allegation, which was an insurance company kind of 582 00:28:01,480 --> 00:28:03,960 Speaker 12: conglomerate a couple years ago that was about twelve billion dollars. 583 00:28:04,760 --> 00:28:06,760 Speaker 12: It seems like that's going to be the max on 584 00:28:06,760 --> 00:28:09,440 Speaker 12: what they're going to do. But if I could predict 585 00:28:09,440 --> 00:28:11,359 Speaker 12: a Buffet would do, I'd be on an island somewhere. 586 00:28:11,440 --> 00:28:13,320 Speaker 2: So but no dividend. 587 00:28:14,080 --> 00:28:16,040 Speaker 12: There will not be a dividend as long as Warren 588 00:28:16,080 --> 00:28:18,679 Speaker 12: Buffett is sitting in all is that? I mean, I 589 00:28:18,680 --> 00:28:21,440 Speaker 12: think he likes getting them, he doesn't like paying them. 590 00:28:21,480 --> 00:28:21,800 Speaker 2: He says. 591 00:28:22,040 --> 00:28:25,560 Speaker 12: You know, look I and I would agree with him. 592 00:28:25,800 --> 00:28:28,880 Speaker 12: I'm better off holding this money than giving it. Your 593 00:28:28,880 --> 00:28:30,880 Speaker 12: return on a divid end is going to be less 594 00:28:30,920 --> 00:28:34,120 Speaker 12: than my return investing it. That probably hasn't been true 595 00:28:34,160 --> 00:28:36,919 Speaker 12: actually recently, but I think that's his mindset. 596 00:28:37,160 --> 00:28:39,360 Speaker 4: You were mentioning about how claims they were years ago 597 00:28:39,400 --> 00:28:42,440 Speaker 4: are costing them more than expected. Walk us through that dynamic. 598 00:28:42,560 --> 00:28:45,760 Speaker 12: Sure, So this is called reserve development. So what happens 599 00:28:45,840 --> 00:28:49,360 Speaker 12: is insurance companies like so for example, Geico, they write auto, 600 00:28:49,640 --> 00:28:51,640 Speaker 12: some home, well not really home, but they'll write auto. 601 00:28:52,200 --> 00:28:53,880 Speaker 12: You're either going to have a car accident in a 602 00:28:53,960 --> 00:28:56,840 Speaker 12: year or you're not. But they'll write some liability business 603 00:28:56,920 --> 00:28:59,960 Speaker 12: where you may have a claim and that you might 604 00:29:00,080 --> 00:29:03,000 Speaker 12: find out and they claim years into the future. And 605 00:29:03,640 --> 00:29:05,840 Speaker 12: what is happening is you set up a reserve for 606 00:29:05,880 --> 00:29:09,200 Speaker 12: that and that reserve could be wrong or they're almost 607 00:29:09,240 --> 00:29:11,600 Speaker 12: always wrong right, but it could be wrong too low 608 00:29:11,720 --> 00:29:14,480 Speaker 12: or wrong too high. And what had happened in the 609 00:29:14,560 --> 00:29:19,200 Speaker 12: quarter was their reserve for their primary insurance business, A 610 00:29:19,240 --> 00:29:23,200 Speaker 12: specific unit of it was quite wrong and there's there's 611 00:29:23,280 --> 00:29:26,040 Speaker 12: new management took over that unit, and usually when that happens, 612 00:29:26,080 --> 00:29:29,080 Speaker 12: they add to their reserves. If this was if this 613 00:29:29,240 --> 00:29:32,840 Speaker 12: was just a you know, XYZ insurance company, this would 614 00:29:32,880 --> 00:29:35,960 Speaker 12: be really bad. But it's Berkshire. Their financial strength is 615 00:29:36,400 --> 00:29:40,280 Speaker 12: so superior to anything you might see that it's kind 616 00:29:40,280 --> 00:29:40,560 Speaker 12: of just. 617 00:29:40,520 --> 00:29:44,280 Speaker 5: A blip, all right. Thanks to Matthew Pallazola, Bloomberg Intelligence 618 00:29:44,280 --> 00:29:46,480 Speaker 5: senior analysts P and C Insurance, it. 619 00:29:46,560 --> 00:29:49,680 Speaker 2: Turned out to a recent deal in the data security business. 620 00:29:49,880 --> 00:29:52,560 Speaker 5: Sofas agreed to buy secure Works for eight dollars fifty 621 00:29:52,600 --> 00:29:55,440 Speaker 5: cents a share in cash at evaluation of eight hundred 622 00:29:55,480 --> 00:29:57,320 Speaker 5: fifty nine million dollars for more. 623 00:29:57,360 --> 00:29:59,560 Speaker 2: Guest host MLI, Grifeo and I were joined by Secure 624 00:29:59,560 --> 00:30:02,760 Speaker 2: Works c CEO Wendy Thomas. We first asked Wendy to 625 00:30:02,800 --> 00:30:05,800 Speaker 2: talk to us about why secure Works sold to sofos. 626 00:30:06,040 --> 00:30:10,440 Speaker 13: This is a strategic combination of two longtime security market leaders, 627 00:30:10,720 --> 00:30:14,440 Speaker 13: and so when you think about combining are two agnostic, 628 00:30:14,600 --> 00:30:19,760 Speaker 13: very open platforms, decades of cybersecurity experience, and strong brands 629 00:30:19,760 --> 00:30:22,920 Speaker 13: in the space. This is a way to really scale 630 00:30:23,040 --> 00:30:25,480 Speaker 13: up and defeat the adversary at scale. 631 00:30:25,760 --> 00:30:29,680 Speaker 3: What does it say about the current market for cybersecurity 632 00:30:29,720 --> 00:30:33,560 Speaker 3: companies that this acquisition is going through. 633 00:30:33,840 --> 00:30:38,800 Speaker 13: The market is really looking for a single partner for cybersecurity, 634 00:30:38,880 --> 00:30:43,000 Speaker 13: sort of a consolidated platform play that a one organization 635 00:30:43,080 --> 00:30:47,320 Speaker 13: can increasingly address multiple use cases for their security needs, 636 00:30:47,680 --> 00:30:53,320 Speaker 13: from being proactive about vulnerability management to reactive to detection 637 00:30:53,400 --> 00:30:56,880 Speaker 13: and response capabilities all the way to AI powered platforms 638 00:30:56,920 --> 00:30:59,600 Speaker 13: that can predict the next cyber attack. And so the 639 00:30:59,640 --> 00:31:02,360 Speaker 13: scale all of R and D required to make that 640 00:31:02,400 --> 00:31:07,480 Speaker 13: a reality for customers is one that requires scale in organizations. 641 00:31:07,840 --> 00:31:12,200 Speaker 13: So to take two cash low positive growing leaders in 642 00:31:12,240 --> 00:31:15,120 Speaker 13: the space and put them together means more scaled R 643 00:31:15,120 --> 00:31:18,080 Speaker 13: and D to be better, faster, stronger for customers. 644 00:31:18,560 --> 00:31:21,640 Speaker 2: What are your customers doing with cybersecurity these days in 645 00:31:21,720 --> 00:31:23,880 Speaker 2: terms of their spending their investment. 646 00:31:24,200 --> 00:31:28,680 Speaker 13: They are increasingly moving from what I would call preventative 647 00:31:28,800 --> 00:31:35,400 Speaker 13: cybersecurity investments to proactive cybersecurity posture and risk management. This 648 00:31:35,440 --> 00:31:40,080 Speaker 13: is all about moving towards increasing prevention and the reason 649 00:31:40,200 --> 00:31:43,560 Speaker 13: is that dwell times of thread actors in an organization's 650 00:31:43,680 --> 00:31:48,800 Speaker 13: environment have gone from months to days to now hours. 651 00:31:49,240 --> 00:31:52,120 Speaker 13: So with the power of an AI powered platform, in 652 00:31:52,280 --> 00:31:56,600 Speaker 13: order to really be able to keep constant visibility about 653 00:31:56,640 --> 00:32:01,760 Speaker 13: potential holes in their attacks, right those unlocked doors, as 654 00:32:01,800 --> 00:32:05,080 Speaker 13: I like to talk about, it requires technology to do that, 655 00:32:05,520 --> 00:32:09,600 Speaker 13: technology to detect that someone's rattling that door handle, and 656 00:32:09,640 --> 00:32:13,800 Speaker 13: the ability to immediately protect the organization from someone getting 657 00:32:13,800 --> 00:32:17,760 Speaker 13: in and taking those valuable data assets or encrypting their 658 00:32:17,800 --> 00:32:19,000 Speaker 13: systems with ransomware. 659 00:32:20,080 --> 00:32:23,200 Speaker 3: So you're using an AI powered you're an AI powered 660 00:32:23,200 --> 00:32:27,640 Speaker 3: security platform. I'm wondering how difficult it is right now 661 00:32:27,680 --> 00:32:31,760 Speaker 3: to be a company that's using AI when it seems 662 00:32:31,800 --> 00:32:35,920 Speaker 3: like demand is outpacing supply. Is that a challenge for 663 00:32:36,120 --> 00:32:36,600 Speaker 3: you guys? 664 00:32:38,200 --> 00:32:41,200 Speaker 13: Well, if you think about AI, that's a pretty broad category. 665 00:32:41,400 --> 00:32:45,840 Speaker 13: And while you know, natural language processing and generative AI 666 00:32:46,040 --> 00:32:48,479 Speaker 13: is the is the hot topic right now, and it 667 00:32:48,600 --> 00:32:52,120 Speaker 13: has its place in security in terms of things like 668 00:32:52,400 --> 00:32:57,480 Speaker 13: changing cybersecurity detections into readable language of what's going on 669 00:32:57,560 --> 00:33:01,160 Speaker 13: to a business person. We've been using AI for a 670 00:33:01,280 --> 00:33:03,760 Speaker 13: very long time in our platform. We started building it 671 00:33:03,800 --> 00:33:08,080 Speaker 13: in twenty seventeen for things like machine learning, deep learning, 672 00:33:08,080 --> 00:33:12,080 Speaker 13: statistical learning, in order to sort through tremendous amounts of 673 00:33:12,160 --> 00:33:15,600 Speaker 13: data and find patterns of behavior that we can match 674 00:33:15,680 --> 00:33:17,760 Speaker 13: to thread actors, the way that they try to come 675 00:33:17,760 --> 00:33:20,800 Speaker 13: into an environment, the software that they use in those 676 00:33:20,840 --> 00:33:23,920 Speaker 13: tactics and techniques, and a platform like that that can 677 00:33:23,920 --> 00:33:26,440 Speaker 13: filter through a lot of data and find those patterns 678 00:33:26,880 --> 00:33:29,800 Speaker 13: is the key to being able to protect an organization. 679 00:33:30,280 --> 00:33:33,920 Speaker 13: So it's home built for both sofas and for secure 680 00:33:33,960 --> 00:33:37,400 Speaker 13: works their hub platform and our Tage's platform. It just 681 00:33:37,440 --> 00:33:39,080 Speaker 13: makes a ton of sense to be able to take 682 00:33:39,120 --> 00:33:41,000 Speaker 13: the best of both worlds and put those together. 683 00:33:41,200 --> 00:33:41,560 Speaker 1: All right. 684 00:33:41,640 --> 00:33:44,360 Speaker 2: So you and I, Wendy, we first chatted back in 685 00:33:44,400 --> 00:33:46,440 Speaker 2: twenty twenty one. How is your company? How has the 686 00:33:46,480 --> 00:33:48,680 Speaker 2: industry changed over the last several years. 687 00:33:48,960 --> 00:33:52,080 Speaker 13: The industry is, I think, on a path for the 688 00:33:52,120 --> 00:33:56,440 Speaker 13: first long time to really consolidate, and that is frankly 689 00:33:56,480 --> 00:33:59,080 Speaker 13: as a result of customer demand to be able to 690 00:33:59,360 --> 00:34:06,360 Speaker 13: run a holistic security program. Understand frankly, quantify their risk, 691 00:34:07,240 --> 00:34:10,640 Speaker 13: demonstrate where they've protected against that risk, and then have 692 00:34:10,840 --> 00:34:15,560 Speaker 13: the accountability around who is attacking their environment and how 693 00:34:15,560 --> 00:34:18,120 Speaker 13: they've protected against it for their boards and c suite. 694 00:34:19,120 --> 00:34:22,880 Speaker 13: It's become a boardroom topic for the last couple of years, 695 00:34:23,360 --> 00:34:26,160 Speaker 13: and so the ability of a security professional to elevate 696 00:34:26,400 --> 00:34:30,120 Speaker 13: sort of a technical pursuit into the language of business 697 00:34:30,120 --> 00:34:32,759 Speaker 13: and risk. It's probably the biggest change that I've seen 698 00:34:32,800 --> 00:34:33,880 Speaker 13: over the last few years. 699 00:34:34,239 --> 00:34:36,359 Speaker 3: I want to zoom out and just talk about the 700 00:34:36,400 --> 00:34:40,560 Speaker 3: cyber industry more broadly and how different corporation should be 701 00:34:40,640 --> 00:34:46,120 Speaker 3: thinking about the current state of threat to their businesses 702 00:34:46,200 --> 00:34:49,719 Speaker 3: when it comes to cybersecurity. Are we worse off than 703 00:34:49,760 --> 00:34:53,520 Speaker 3: we were maybe five years ago as hackers get more advanced. 704 00:34:53,920 --> 00:34:57,359 Speaker 13: I would say that the great things about AI that 705 00:34:57,400 --> 00:35:01,960 Speaker 13: have enabled us as businesses security companies to leverage the 706 00:35:02,000 --> 00:35:05,080 Speaker 13: power of that AI has also represented a certain amount 707 00:35:05,120 --> 00:35:08,760 Speaker 13: of peril in terms of empowering those thread actors as well, 708 00:35:09,160 --> 00:35:13,719 Speaker 13: and whether it's nation states or cyber criminals who are involved, 709 00:35:13,960 --> 00:35:18,440 Speaker 13: their ability to use the same sort of natural language 710 00:35:18,560 --> 00:35:22,440 Speaker 13: processing technologies to make that phishing email much more believable. 711 00:35:22,480 --> 00:35:25,000 Speaker 13: It really does look like it's coming from your bank 712 00:35:25,600 --> 00:35:30,200 Speaker 13: or from a vendor that you use. And so the 713 00:35:30,719 --> 00:35:35,480 Speaker 13: last line of defense, always beyond technology, is people, and 714 00:35:35,520 --> 00:35:38,320 Speaker 13: the need for all of us to become more educated 715 00:35:38,360 --> 00:35:43,120 Speaker 13: and just cyber aware is more important than ever. So 716 00:35:43,320 --> 00:35:47,160 Speaker 13: there's always that human edge that can make the difference 717 00:35:47,239 --> 00:35:49,960 Speaker 13: on top of technology to keep us all a little 718 00:35:50,000 --> 00:35:53,000 Speaker 13: bit safer. When cyber criminals cannot make money off of 719 00:35:53,520 --> 00:35:56,880 Speaker 13: global citizens, then we start to break that economic model, 720 00:35:57,120 --> 00:35:57,400 Speaker 13: all right. 721 00:35:57,440 --> 00:36:00,280 Speaker 5: Thanks to Secure Work CEO Wendy Thomas. 722 00:36:00,160 --> 00:36:04,680 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify, 723 00:36:04,880 --> 00:36:08,080 Speaker 1: and anywhere else you get your podcasts. Listen live each 724 00:36:08,120 --> 00:36:11,480 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 725 00:36:11,600 --> 00:36:15,000 Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app. 726 00:36:15,120 --> 00:36:18,120 Speaker 1: You can also watch us live every weekday on YouTube 727 00:36:18,320 --> 00:36:20,200 Speaker 1: and always on the Bloomberg terminal.