WEBVTT - Ferrari Hires Tech Pioneer As CEO 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.680 at Bloomberg dot com slash podcast. Now, let's get over 0:00:22.760 --> 0:00:26.920 to Michael Dean, is a Bloomberg Intelligence senior autos analysts. 0:00:26.960 --> 0:00:31.160 I probably read more of Michael Dean's research than anyone 0:00:31.200 --> 0:00:35.199 else on the Bloomberg terminal. Um now, I definitely do, 0:00:35.479 --> 0:00:38.920 and he joins us now to talk about Ferrari's news CEO. Michael, 0:00:38.960 --> 0:00:41.280 It's been a long time coming. We've been waiting for 0:00:41.800 --> 0:00:45.479 a name to replace Louis Kennellieri, and now we get 0:00:45.680 --> 0:00:49.720 um someone I never heard of from st Microelectronics who 0:00:49.760 --> 0:00:55.200 designs what like touch screen interactivity. Yes, that's right, Um. 0:00:55.240 --> 0:00:57.920 I haven't heard of him either, and he's certainly unknown 0:00:57.960 --> 0:01:01.240 to also invest this but shouldn't be a surprise because 0:01:01.280 --> 0:01:04.000 it was only back on April fifteenth that John Alcan, 0:01:04.200 --> 0:01:08.160 the Ferrari CEO and chairman at the time, said that 0:01:08.200 --> 0:01:11.039 he wanted someone with the background. So that's what we've 0:01:11.080 --> 0:01:13.959 got at the moment. All right. But you know, I'm 0:01:13.959 --> 0:01:17.200 not a car geek like Matt Miller and you and 0:01:17.280 --> 0:01:20.760 Kevin tain In. But um, I love the sound of, 0:01:21.319 --> 0:01:24.520 you know, a Ferrari wearing down the street. Here. What 0:01:24.640 --> 0:01:28.440 happens when they become electric? Yeah, that's a tough one 0:01:28.480 --> 0:01:31.320 because if you listen to the officiados, they will say, 0:01:31.400 --> 0:01:34.600 you know, we don't want electric. That certainly happened to Porsche. 0:01:35.080 --> 0:01:36.560 But we've seen with the take and it can be 0:01:36.680 --> 0:01:39.800 very successful. And we've seen from the competing luxury brands 0:01:39.840 --> 0:01:43.200 such as with Lamborghini, Bentley and Rolls Royce they all 0:01:43.240 --> 0:01:47.000 have electrification strategies. That's the way it's going. And even 0:01:47.040 --> 0:01:49.240 Ferrari have said they're going to have their first battery 0:01:49.240 --> 0:01:52.360 electric vehicle in two thousand and twenty five. You know this. 0:01:53.000 --> 0:01:56.040 Yesterday I was listening to David Weston, he was interviewing 0:01:56.200 --> 0:02:00.440 one of Ford's big execs on their new pickup truck. That, um, 0:02:00.880 --> 0:02:04.640 it looks pretty cool. It's less than twenty dollars. Um 0:02:04.720 --> 0:02:07.920 it's the Maverick. It's a small, smaller pickup truck. But 0:02:08.040 --> 0:02:09.799 it's going to be a hybrid, And David said, why 0:02:09.800 --> 0:02:12.600 didn't you go fully electric? Like doing a hybrid was 0:02:12.639 --> 0:02:15.679 almost to fail. No offense to David, but that's kind 0:02:15.680 --> 0:02:19.600 of the general. Um, that's the general thought right now. 0:02:19.720 --> 0:02:24.280 Why is fully electric considered better than the hybrid, which 0:02:24.320 --> 0:02:27.799 to me is a far better solution. Well, I think 0:02:27.800 --> 0:02:30.240 it's all to do evaluation. If you look at um 0:02:30.240 --> 0:02:34.160 where Tesla is valued and the legacy automate makers want 0:02:34.200 --> 0:02:37.320 want to have some of that sort of tech evaluation 0:02:37.400 --> 0:02:39.600 rubbing off on them, and they can't do that unless 0:02:39.600 --> 0:02:42.160 they're fully electric, or that's the perception. And that's why 0:02:42.280 --> 0:02:44.320 Volkswagen has had such a good run this year because 0:02:44.520 --> 0:02:47.480 it's jumping in with both feet in terms of full 0:02:47.560 --> 0:02:51.000 electrification and it's probably gonna overtake totaled by two thousand 0:02:51.000 --> 0:02:53.840 and twenty four. And hybrid is seen as a halfway house, 0:02:54.040 --> 0:02:57.280 you know still you know, combustion engine and only half 0:02:57.280 --> 0:03:01.120 electric and you know in a few all cars will 0:03:01.120 --> 0:03:04.800 be fully electric. I'm sure boy. All right, So Michael, 0:03:05.080 --> 0:03:08.800 where is Ferrari? You kind of suggested that they're behind 0:03:09.320 --> 0:03:12.480 some of their key competitors, like portion Lamborghinia. Is that 0:03:13.560 --> 0:03:16.800 this year has underperformed shockingly. Yeah. Yeah, I think part 0:03:16.840 --> 0:03:18.519 of the reason is because they don't have a well 0:03:18.600 --> 0:03:23.320 defined classification strategy. So their target was to have of 0:03:23.360 --> 0:03:27.080 their vehicles sold next year being hybrids. They're well behind 0:03:27.120 --> 0:03:29.560 with that. So what the new CEO has to do 0:03:29.840 --> 0:03:31.639 and what will probably happen in the first quarter of 0:03:31.720 --> 0:03:35.360 next year, has come out with a well defined electrification strategy, 0:03:35.560 --> 0:03:41.040 also a carbon neutral strategy. That's all satisfy investors. What 0:03:41.320 --> 0:03:43.800 does this mean for the super fast V twelve? Is 0:03:43.840 --> 0:03:45.760 that going to go the way of the stick shift 0:03:46.240 --> 0:03:49.600 at Ferrari? Yeah, I think so. So they just announced 0:03:49.920 --> 0:03:52.920 a special edition V twelve which sells for half a 0:03:52.960 --> 0:03:56.520 million euros, only making five hundred of them, so getting quickly. 0:03:57.640 --> 0:04:00.520 But that could be the last V twelve on Ferrari 0:04:00.920 --> 0:04:02.960 and probably the next main engine that they'll have will 0:04:03.000 --> 0:04:05.960 be a V six hybrid. Yeah, Matt, you should know. 0:04:06.000 --> 0:04:09.640 I've asked Michael Dean on many occasions in his interactions 0:04:09.640 --> 0:04:12.760 with BMW to bring back the stick shift for the 0:04:12.800 --> 0:04:15.520 five series here in America. They've discontinued it. I'm just 0:04:15.720 --> 0:04:21.720 crushed here date Michael. Michael has tried to no avail. 0:04:22.839 --> 0:04:27.440 I actually Uh. There was a time at Fiat Chrysler 0:04:27.480 --> 0:04:29.320 when I sat down with Sergio. They were just putting 0:04:29.320 --> 0:04:31.080 out the Alfa Romeo fur C and I said, why 0:04:31.080 --> 0:04:32.800 don't you make a stick shift? I mean, this is 0:04:32.880 --> 0:04:35.159 the car that needs to have a manual transmission. And 0:04:35.160 --> 0:04:37.520 he said, Matt, you and I would be the only buyers. 0:04:38.480 --> 0:04:40.800 And Michael, that's is that a is that a global trend? 0:04:40.920 --> 0:04:42.600 And mean it seems like I see more stick shifts 0:04:42.839 --> 0:04:45.719 in Europe than I do. Certainly U US you don't 0:04:45.760 --> 0:04:47.960 see CEO many of them anymore as a hit. But 0:04:48.279 --> 0:04:51.279 I would say, you know, driver Porsche taken and afterwards 0:04:51.320 --> 0:04:54.440 say that you know, electrification isn't bad for for cars 0:04:54.480 --> 0:04:58.680 going forward. I'm sure it's amazing. I haven't driven one yet, 0:04:58.720 --> 0:05:02.480 but I would miss the the roar of the scream 0:05:02.560 --> 0:05:06.640 in the terms of the boxer. Michael hind Me, Michael Dean, 0:05:06.720 --> 0:05:09.359 thank you so much for joining us. Always appreciate chatting 0:05:09.360 --> 0:05:12.560 with you with particularly Matt appreciates chatting with you talking cars. 0:05:12.560 --> 0:05:16.960 Senior analyst, he covers the European automotive business. Good Partner 0:05:17.040 --> 0:05:19.920 with Kevin Tyiny New covers the the US Auto Guys 0:05:19.920 --> 0:05:23.680 and a together put out some great global research on 0:05:23.760 --> 0:05:27.080 the global automotive business for Bloomberg Intelligence and b I 0:05:27.160 --> 0:05:29.240 Go and you can find all that good stuff there. 0:05:32.920 --> 0:05:36.680 Let's talk about cybersecurity because we've seen so many of 0:05:36.720 --> 0:05:42.160 these ransomware attacks UM, Colonial Pipeline and JBS the biggest 0:05:42.279 --> 0:05:46.640 of late UM, but we've also seen issues pop up. 0:05:46.720 --> 0:05:49.240 Yesterday it turned out to be maybe a fat finger 0:05:49.400 --> 0:05:51.599 on the part of fast Lee, but it kind of 0:05:51.600 --> 0:05:54.479 freaked out markets for a moment. We saw charts go 0:05:54.520 --> 0:05:58.120 a little bit haywire when um the Internet appeared to 0:05:58.160 --> 0:06:00.760 stop working for a moment. Shannon will Coinson joins as 0:06:00.800 --> 0:06:05.279 founder and CEO of to Go Cyber and just just 0:06:05.400 --> 0:06:08.520 in terms of what we saw yesterday, Shannon turned out 0:06:08.560 --> 0:06:11.560 to be nb D, but for for for a moment, 0:06:11.600 --> 0:06:15.560 it seemed as if something horrible may have happened. Is 0:06:15.600 --> 0:06:18.360 it possible that a cyber attack could just shut down 0:06:18.400 --> 0:06:24.240 the Worldwide Web for a little while. Absolutely, it would 0:06:24.320 --> 0:06:27.000 be interesting. And if you remember, a couple of years ago, 0:06:27.279 --> 0:06:29.560 the Internet went down on the East Coast due to 0:06:29.720 --> 0:06:33.840 another fat finger configuration error at one of the domain 0:06:34.480 --> 0:06:38.800 registry services. So it's absolutely possible either that a cyber 0:06:38.800 --> 0:06:43.279 attack or one of these engineer issues could absolutely take 0:06:43.279 --> 0:06:47.039 the Internet down. And even Russia had some issues with 0:06:47.120 --> 0:06:49.440 their Internet when they tried to do some sort of 0:06:49.440 --> 0:06:53.120 blocking of Twitter and some of the social media platforms 0:06:53.160 --> 0:06:55.880 that at their I s P. Level, Um, they actually 0:06:56.040 --> 0:06:59.320 fat fingered or made some configuration errors and took down 0:06:59.320 --> 0:07:02.800 the Internet than Russia for about half a day, I 0:07:02.839 --> 0:07:05.120 think it was. So it's key. It's key to point 0:07:05.120 --> 0:07:08.720 out that doesn't mean, um, it's not simply you know, 0:07:08.800 --> 0:07:12.680 no more cat photos on Instagram. There are ways that 0:07:12.720 --> 0:07:17.320 the Internet works, um in these times, you know that 0:07:17.320 --> 0:07:21.760 that are vital to human life, right, Yes, absolutely. I 0:07:21.800 --> 0:07:24.400 mean we live in a very connected world and we've 0:07:24.440 --> 0:07:27.840 seen this migration the to to the cloud as well 0:07:27.840 --> 0:07:32.280 as digitalization of business, so everything is connected now. Businesses 0:07:32.280 --> 0:07:37.600 are relying on Internet cloud providers to provide essential business services, 0:07:37.680 --> 0:07:42.000 and when those services aren't available, business stops. Shannon, it 0:07:42.120 --> 0:07:45.080 just seems like it's getting so much more frequent. Here, 0:07:45.200 --> 0:07:47.120 give us a sense of how much of this is 0:07:47.200 --> 0:07:51.800 just you know, a knucklehead in a garage somewhere, you know, 0:07:52.120 --> 0:07:55.800 up to no good versus maybe some state actors or 0:07:55.960 --> 0:08:00.600 organized crime. Where is this all coming from? It's definitely 0:08:00.640 --> 0:08:04.600 a combination of both the Colonial pipeline and the JBS 0:08:04.760 --> 0:08:09.480 is those are more state sponsored affiliate cyber crime groups. 0:08:09.560 --> 0:08:11.640 And then you you also have on the flip side 0:08:12.040 --> 0:08:14.960 what is known as the script kiddies, the the you know, 0:08:15.720 --> 0:08:19.760 atypical hooded, basement dwelling hacker that you know it is 0:08:19.800 --> 0:08:22.800 just going out there for fun and seeing what you know, 0:08:22.920 --> 0:08:26.400 kind of disruption or damage they can do. UM. So 0:08:26.440 --> 0:08:29.120 it's definitely a combination of both of those factors, and 0:08:29.240 --> 0:08:34.880 businesses just really need to um think about their services 0:08:35.000 --> 0:08:36.920 and what they do and how much they rely on 0:08:36.960 --> 0:08:41.920 their technology for business. In the Colonial CEOs testimony to 0:08:42.000 --> 0:08:44.960 Congress yesterday, we found out that they didn't even have 0:08:45.000 --> 0:08:48.240 a ransomware plan in place, even though they spend something 0:08:48.280 --> 0:08:51.760 like forty million dollars a year on cybersecurity. They never 0:08:51.800 --> 0:08:54.760 even considered what would happen if we got hit by 0:08:54.760 --> 0:08:58.200 a ransomware attack. They didn't even have a two step 0:08:59.080 --> 0:09:02.320 security process us. I mean, I can't even log into 0:09:02.400 --> 0:09:06.840 my computer at work without submitting my fingerprint or you know, 0:09:06.880 --> 0:09:11.440 a code from a token in any case. Um. There 0:09:11.520 --> 0:09:14.160 there's the opposite side of that, right, Like, um, the 0:09:14.200 --> 0:09:16.160 company that runs crack, and we had a great story 0:09:16.200 --> 0:09:18.920 about them. They have gone as far as to make 0:09:19.120 --> 0:09:22.600 your kids, eight year old kids sign n DA agreements 0:09:22.600 --> 0:09:25.480 when they go to company picnics, And you've got to 0:09:25.559 --> 0:09:28.839 change into everybody wears the same clothes at work UM 0:09:28.920 --> 0:09:31.760 so that they won't be able to the the bad guys, 0:09:31.800 --> 0:09:33.719 won't be able to tell exactly who you are. You've 0:09:33.720 --> 0:09:39.360 got to kill all your social media UM profiles. How 0:09:39.400 --> 0:09:43.600 far do do companies need to be going, Jen, I 0:09:43.640 --> 0:09:45.920 think it's about finding a balanced crack. It might be 0:09:45.960 --> 0:09:49.560 going a little bit over the top on their security protocols, 0:09:49.600 --> 0:09:52.560 but I think it's about finding a good balance of 0:09:52.600 --> 0:09:57.360 what makes sense and what a secure So definitely ensuring 0:09:57.559 --> 0:10:01.000 that you have two factor authentication. I mean Colonial Pipeline 0:10:01.040 --> 0:10:04.160 we found out. I think Bloomberg broke the news, but 0:10:04.520 --> 0:10:08.120 it was due to a single compromised account at Colonial 0:10:08.120 --> 0:10:13.560 Pipeline that was the factor that resulted in the ransomware 0:10:13.600 --> 0:10:17.319 attacked there. So a single employee account allowed the ransomware 0:10:17.440 --> 0:10:21.959 to be activated on the network. So enabling two factor authentication, 0:10:22.160 --> 0:10:27.240 having security protocols in place, having plans for when incidents occur, 0:10:27.880 --> 0:10:32.960 and just really finding a good balance between what will 0:10:33.040 --> 0:10:37.280 not disrupt the security the operations of the business and 0:10:37.320 --> 0:10:40.040 what's a good balance for security at the business as well, 0:10:40.160 --> 0:10:43.920 So you know, kind of a marriage of business strategy 0:10:44.000 --> 0:10:46.800 and cybersecurity strategy working together to make sure that the 0:10:46.840 --> 0:10:50.840 business can continue operating in this new digital age. Shannon, 0:10:50.840 --> 0:10:53.000 thanks so much for joining us. We really appreciate getting 0:10:53.040 --> 0:10:57.160 your thoughts on insight on this rising issue ransomware in 0:10:57.200 --> 0:11:04.800 corporate America. Shannon Wilkinson, founder and CEO of Atago Cyber Well, 0:11:04.920 --> 0:11:06.840 before you flashback, you know a little bit more than 0:11:06.880 --> 0:11:09.040 a year ago when we started this pandemic and the 0:11:09.080 --> 0:11:13.920 resulting economic contraction that we experienced was just extraordinary historic. 0:11:14.320 --> 0:11:17.120 But the recovery has been as well. As the vaccines 0:11:17.160 --> 0:11:21.599 get in across the US, the economy is reopening and 0:11:21.640 --> 0:11:23.320 we're seeing that in the stock market as well as 0:11:23.360 --> 0:11:25.839 a lot of those reopening players are working very well. 0:11:25.920 --> 0:11:28.600 For investor Brad McMillan. He's a Chief Investment Officer of 0:11:28.679 --> 0:11:31.280 Commonwealth of Financial Network. They have about two thirty two 0:11:31.720 --> 0:11:34.559 billion dollars in assets under management. So a couple of 0:11:34.600 --> 0:11:37.480 shuckles there, Brad joins us here. Brad, thanks so much 0:11:37.520 --> 0:11:39.640 for coming on. I'd love to get your thoughts here 0:11:39.880 --> 0:11:42.760 as we look back over the last fifteen years and again, 0:11:42.800 --> 0:11:45.439 the beginning of the pandemic, the contraction in the economy, 0:11:45.480 --> 0:11:49.079 and then the reopening, how are you telling your clients 0:11:49.120 --> 0:11:52.880 to position their portfolios here as this reopening seems to 0:11:52.880 --> 0:11:55.200 be really gaining some momentum here in the United States. 0:11:56.640 --> 0:11:59.560 I think it's important to put this into context because 0:12:00.120 --> 0:12:02.360 when we talk about the pullback, when we talk about 0:12:02.360 --> 0:12:05.880 the recession, yes, of course it was the pandemic, but 0:12:05.960 --> 0:12:09.680 it was really from an economic perspective, the policy response 0:12:10.400 --> 0:12:14.120 the pandemic that sunk the economy, the shutdowns. So when 0:12:14.120 --> 0:12:16.200 you look at this what we're seeing, you know, yes, 0:12:16.240 --> 0:12:20.040 we've seen a fantastic recovery. Were largely just recovering back 0:12:20.120 --> 0:12:23.439 to the previous trend line. So as we moved past 0:12:23.440 --> 0:12:27.000 the pandemic, it's about the economy, and the economy continues 0:12:27.040 --> 0:12:29.320 to do extremely well. You know, I think we've still 0:12:29.320 --> 0:12:33.040 got some more upside ahead. But wasn't there any serious 0:12:33.160 --> 0:12:39.840 damage done by the government stepping in and shutting everything down? Well, 0:12:39.880 --> 0:12:42.160 of course there was, and that was the pullback, But 0:12:42.240 --> 0:12:46.080 then the question becomes how lasting is that damage? The 0:12:46.160 --> 0:12:50.040 damage was real, and it was substantial in the short term, 0:12:50.120 --> 0:12:52.360 and if we if the government had left it at that, 0:12:52.920 --> 0:12:55.760 then we very well might be looking at the depression 0:12:55.880 --> 0:12:58.400 right now. But that's not what they did. They gave 0:12:58.600 --> 0:13:01.520 the cushion to us through that and to get us 0:13:01.559 --> 0:13:05.040 back to reopen it. And because of that, we're simply 0:13:05.040 --> 0:13:07.480 in a place where if you look a year on year, 0:13:07.800 --> 0:13:11.280 absolutely huge huge changes. If you look over the past 0:13:11.320 --> 0:13:16.600 two years, actually we're still pretty much on track. So, Brad, 0:13:16.600 --> 0:13:18.760 one of the things that you know, I think about 0:13:18.800 --> 0:13:22.600 a lot is kind of how will consumer behaviors change 0:13:22.720 --> 0:13:25.520 or will they change post pandemic as we come out 0:13:25.520 --> 0:13:27.600 on the other side of this. For example, will people 0:13:28.040 --> 0:13:30.720 go on cruise ships, Will they you know, go on 0:13:30.840 --> 0:13:33.280 planes and things like that with a go to movie theaters? 0:13:33.440 --> 0:13:35.120 How are you thinking about that? And if you made 0:13:35.160 --> 0:13:38.640 any you know, investment calls based upon what you think 0:13:38.679 --> 0:13:42.720 might be some changing consumer behaviors, well, certainly when you 0:13:42.760 --> 0:13:45.240 look at the airline numbers, you know you can make 0:13:45.280 --> 0:13:47.640 a good case that weas your travel is well on 0:13:47.679 --> 0:13:50.760 its way back. The real question there from an investment 0:13:50.760 --> 0:13:53.760 perspective is going to be our business travelers going to 0:13:53.880 --> 0:13:55.680 be coming back because that's where a lot of the 0:13:55.720 --> 0:13:58.559 profits come from, and there I think the news is 0:13:58.600 --> 0:14:01.120 a lot more mixed. So certainly when you look at 0:14:01.120 --> 0:14:03.520 the headlines, I think it's fair to say people are 0:14:03.600 --> 0:14:08.560 changing their behaviors. I don't think the the extensive use 0:14:08.800 --> 0:14:11.520 of internet shopping, for example, is going to go away. 0:14:11.559 --> 0:14:14.600 People have found out how easy that is. But more 0:14:14.720 --> 0:14:18.800 common things like restaurants, absolutely they're coming back, and I 0:14:18.840 --> 0:14:21.440 think the market has already gotten ahead of that. I 0:14:21.480 --> 0:14:24.160 don't think there's a lot of opportunity there at the moment, 0:14:24.640 --> 0:14:27.080 but certainly, you know there was some money to be 0:14:27.160 --> 0:14:29.120 made about what that, you know, six or eight months 0:14:29.160 --> 0:14:32.560 ago when the uncertainty was at a peak. So where 0:14:32.680 --> 0:14:36.160 is the opportunity. I mean, if you've got spare cash 0:14:36.480 --> 0:14:38.080 sitting around, need to put it to work, what do 0:14:38.120 --> 0:14:41.640 you do with it? I think the stock market in 0:14:41.680 --> 0:14:44.080 general is a good place because when you look at 0:14:44.600 --> 0:14:48.160 the earnings expectations and how the markets priced, we're still 0:14:48.160 --> 0:14:50.960 in a position to see earnings go up. I think 0:14:51.000 --> 0:14:55.920 healthcare there are some opportunities that still very much. We're 0:14:55.920 --> 0:14:59.960 seeing a revolution, particularly in biotech. You know that hasn't 0:15:00.040 --> 0:15:03.320 been fully appreciated yet UM some firms are now putting 0:15:03.360 --> 0:15:08.960 in UM requests to evaluate vaccines for the slow and 0:15:09.040 --> 0:15:11.440 if that comes through, I mean obviously that would be huge. 0:15:11.520 --> 0:15:14.800 So there's knowledge opportunities. If you want something that's a 0:15:14.840 --> 0:15:17.840 little bit more basic, I think financials. I think is 0:15:17.880 --> 0:15:21.640 the economy normalizes, we're going to see the interest rates normalized, 0:15:21.880 --> 0:15:23.880 and that's going to give a tail wind to financials. 0:15:23.920 --> 0:15:27.680 And I still think there's some opportunities there. So, Brad, 0:15:27.800 --> 0:15:30.680 is this economy reopens. One of the things that you know, 0:15:31.000 --> 0:15:34.800 economists are really looking closely at, certainly is the employment 0:15:35.400 --> 0:15:37.480 getting people back to work, and we're still we've had 0:15:37.520 --> 0:15:42.040 a couple of months of kind of blow expectation job numbers. 0:15:42.320 --> 0:15:44.360 How concerned are you about that? Are you concerned that 0:15:44.440 --> 0:15:47.640 perhaps something structurally may have changed in this economy where 0:15:48.120 --> 0:15:49.760 you know, some of those jobs just aren't going to 0:15:49.840 --> 0:15:53.800 come back if you go back that that's a common fear, 0:15:53.840 --> 0:15:55.880 and I don't agree with it. I was actually just 0:15:55.960 --> 0:15:58.680 looking at that this morning, because if you go back 0:15:58.720 --> 0:16:02.600 to prior crises with typically happens is people move out 0:16:02.600 --> 0:16:06.040 of the labor force. Okay, so they say, okay, it's 0:16:06.080 --> 0:16:08.520 not worth it, and then the economy starts to open up, 0:16:08.560 --> 0:16:11.040 wages start to rise again, and then they move back in. 0:16:11.480 --> 0:16:13.560 And that's exactly what we're seeing. If you look at 0:16:13.560 --> 0:16:17.080 the not in the labor force people, that's people who 0:16:17.120 --> 0:16:20.280 want a job that is right now at about the 0:16:20.320 --> 0:16:23.400 same level as the total number of jobs available. So 0:16:23.440 --> 0:16:25.640 it's just a question of getting those people back into 0:16:25.680 --> 0:16:27.920 the labor force. And if you look at that, you 0:16:27.920 --> 0:16:30.240 can see them actually that you can see that happening. 0:16:30.760 --> 0:16:32.480 So I think that's the first thing. This is a 0:16:32.480 --> 0:16:36.240 totally normal process. We've seen this movie before. I think 0:16:36.320 --> 0:16:39.160 the other thing that is getting people a little too 0:16:39.240 --> 0:16:42.120 wound up is they're saying, how do we get back 0:16:42.120 --> 0:16:46.920 to the record low unemployment levels we saw before the pandemic. Frankly, 0:16:46.920 --> 0:16:50.120 that was unusual. If you look at the averages will 0:16:50.160 --> 0:16:53.720 be if five is a pretty normal unemployment rate, we 0:16:53.760 --> 0:16:55.920 should be there in the next three to six months, 0:16:55.960 --> 0:16:58.240 and after that it's just real progress. So I think 0:16:58.240 --> 0:17:01.880 by the end of the year will be falling. Brad, 0:17:01.880 --> 0:17:04.240 thanks very much for joining us. Brad McMillan is the 0:17:04.320 --> 0:17:08.720 chief investment Officer at Commonwealth Financial Network. As Paul says, 0:17:08.760 --> 0:17:12.520 they have two hundred and thirty three billion dollars under management, 0:17:12.640 --> 0:17:17.119 looking at a continued recovery for the economy, back to 0:17:17.160 --> 0:17:19.560 the trend that we saw before the pandemic. And as 0:17:19.560 --> 0:17:23.280 he points out, that trend was very good. We were 0:17:23.320 --> 0:17:26.919 doing quite well economically before this thing hit and we 0:17:27.000 --> 0:17:35.120 shut all of our businesses down. This is Bloomberg alright, Matt. 0:17:35.160 --> 0:17:36.520 You know that one of the reasons I always love 0:17:36.600 --> 0:17:39.359 these big take stories is because they often get me 0:17:39.440 --> 0:17:42.040 to say, I didn't think of that, or you know, 0:17:42.240 --> 0:17:45.119 that's how it works. Um. This most recent story, we're 0:17:45.119 --> 0:17:47.760 talking about big oil companies. Matt. We've seen all the 0:17:47.760 --> 0:17:51.840 news shareholders forcing them to go green, you know, reduce 0:17:51.960 --> 0:17:55.800 their carbon footprint. But there's still demand out there for energy. 0:17:56.240 --> 0:17:58.840 So who's filling that void as some of the big 0:17:58.840 --> 0:18:02.320 majors pulled back? Kevin Crowley, he's a US oil reporter 0:18:02.400 --> 0:18:05.359 for Bloomberg News. He joins us with his big big 0:18:05.359 --> 0:18:08.480 take story entitled the Retreat of Excellent and the oil 0:18:08.520 --> 0:18:11.800 Majors won't stop Fast or fuel. Kevin, thanks so much 0:18:11.800 --> 0:18:14.000 for for joining us here, and I love your story 0:18:14.040 --> 0:18:16.320 here because it really goes to the issue of Okay, 0:18:16.440 --> 0:18:19.760 Exxon and Chevron and Shell and all those guys. They're 0:18:19.760 --> 0:18:23.800 pulling back on their energy footprint. But who's filling the 0:18:23.880 --> 0:18:28.520 void exactly? That's a that's a that's the big question. 0:18:28.520 --> 0:18:32.040 And really what we're saying here is it's national oil companies. 0:18:32.200 --> 0:18:35.280 So those from those from Saudi Arabia, those from Russia, 0:18:35.520 --> 0:18:39.120 those from those from parts of Africa, these are these 0:18:39.119 --> 0:18:42.000 are these are companies that um, you know, less transparent 0:18:42.280 --> 0:18:47.159 and and and have a less strong climate record UM 0:18:47.240 --> 0:18:50.680 and also m really are only beholden to their to 0:18:50.760 --> 0:18:53.400 their national governments. They do not have the same kind 0:18:53.440 --> 0:18:58.360 of shareholder pressure that the publicly listed entities have UM 0:18:58.400 --> 0:19:02.520 and so UM we by the oil majors retreating it, 0:19:02.840 --> 0:19:05.480 it opens the gates for these companies to come in 0:19:05.640 --> 0:19:09.000 and fill the gap, which will pose a new challenge 0:19:09.080 --> 0:19:12.840 for climate activists going forward. I mean, the headline could 0:19:13.080 --> 0:19:17.080 well be climate activists that oil majors shoot themselves in 0:19:17.119 --> 0:19:22.879 the foot, because basically they're they're convincing UM, you know, 0:19:22.920 --> 0:19:27.720 these publicly traded companies to hand back oil production or 0:19:27.800 --> 0:19:33.160 hand over oil production to UM Chinese nationals, Russian nationals, 0:19:33.200 --> 0:19:35.840 Middle East nationals, and they're not going to do such 0:19:35.880 --> 0:19:39.640 a great job when it comes to um shrinking their 0:19:39.640 --> 0:19:43.560 carbon footprint. Well, I think that's I think that, I 0:19:43.560 --> 0:19:45.480 think that's true, and I think, yeah, but I think 0:19:45.520 --> 0:19:48.240 I think the climate movement is focused on the oil 0:19:48.359 --> 0:19:52.200 because it's really it's the it's the lowest hanging fruit. UM. 0:19:52.359 --> 0:19:54.119 And so you know, these were these are these are 0:19:54.160 --> 0:19:57.879 companies that are beholding to their shareholders and climate activists 0:19:57.880 --> 0:20:00.560 you know, have worked over many many years to you, um, 0:20:01.200 --> 0:20:05.199 to to gain influence through through the shareholding. Mean, the 0:20:05.200 --> 0:20:10.080 most recent example was exceon Um lost three directors just 0:20:10.080 --> 0:20:12.719 just a few weeks ago as a result of growing 0:20:12.760 --> 0:20:16.480 climate climate activism. UM. But it's and it's not just 0:20:16.560 --> 0:20:20.280 the climate activist Kevin I noticed recently when Congress was 0:20:20.520 --> 0:20:25.320 questioning CEOs of the big banks, they were chiding them 0:20:25.359 --> 0:20:29.840 for doing business with big oil majors, almost throwing national 0:20:30.200 --> 0:20:36.920 um security, energy security concerns aside. But that's right, that's right, Yeah, 0:20:37.119 --> 0:20:39.879 it's it's under pressure from I mean, these or companies 0:20:39.960 --> 0:20:44.280 under pressure from from political class. They are under pressure 0:20:44.600 --> 0:20:46.120 from the from the banks who are looking to clean 0:20:46.160 --> 0:20:51.040 up their own carbon footprint, shareholders, consumers, everyone, everyone, everyone around, 0:20:51.280 --> 0:20:53.119 everyone is rounding on them. Now and I think, but 0:20:53.200 --> 0:20:55.000 I think, but I think it's it's it's really it's 0:20:55.040 --> 0:20:57.919 a They are the lowest hanging routs here, and I 0:20:57.920 --> 0:21:00.320 think the climate movement thinks that, you know, we can 0:21:00.440 --> 0:21:03.639 we can get these guys to change the Exxon Chevron's 0:21:03.640 --> 0:21:07.600 shell vps of the world, then other other other companies 0:21:07.640 --> 0:21:10.360 will will fulfall in line and will follow because while 0:21:10.400 --> 0:21:13.280 the oil majors only produce around fifteen percent of the 0:21:13.320 --> 0:21:16.320 world oil at the moment, they are at the forefront 0:21:16.600 --> 0:21:20.800 of much of the technolog technologies around and they do lead. 0:21:21.440 --> 0:21:25.159 So the thinking is that maybe you know, some of 0:21:25.240 --> 0:21:29.639 these national oil companies will start will start to follow 0:21:29.720 --> 0:21:32.560 their lead if if big oil does make a successful 0:21:32.640 --> 0:21:36.840 pivot towards greener energy. It's interesting because you know that 0:21:37.080 --> 0:21:38.960 part of your story where Exxon was getting out of 0:21:39.000 --> 0:21:42.440 an Iraqi field, and you know they tried to sell 0:21:42.520 --> 0:21:45.640 their steak, but nobody else would was even bidding forward. 0:21:45.720 --> 0:21:48.119 So then I guess Iraq had to come in and 0:21:48.200 --> 0:21:52.080 buy it, or China or China altos. Right, Well, the process, yeah, 0:21:52.080 --> 0:21:54.440 the process is ongoing, but it's actually a remarkable it's 0:21:54.440 --> 0:21:56.560 actually a remarkable turner turn of events. I mean, this 0:21:56.720 --> 0:21:58.720 was this is this is one of the prized oils 0:21:59.680 --> 0:22:03.159 after after the Second Iraq War, exons stepped into to 0:22:03.280 --> 0:22:06.239 take it, and really it hasn't really performed UM as 0:22:06.280 --> 0:22:08.360 well as they would like. If they're looking to they're 0:22:08.400 --> 0:22:10.440 looking to get out of it. But as you said, 0:22:10.480 --> 0:22:11.959 as you said, none of the none of the other 0:22:12.040 --> 0:22:15.880 majors want to take it, and their Iraq UM made 0:22:15.920 --> 0:22:19.040 a statement that actually they were interested in buying it themselves, 0:22:19.119 --> 0:22:21.920 which is which is remarkable. Really mean, whether it whether 0:22:22.000 --> 0:22:24.639 it actually happens or not, is a is another thing. 0:22:24.760 --> 0:22:28.040 But the fact that they're even considering taking taking the 0:22:28.119 --> 0:22:31.280 stake is it's quite as quite a remarkable curn of events. 0:22:31.320 --> 0:22:33.040 And of course the other option then is the the 0:22:33.160 --> 0:22:37.000 Chinese state state or backed companies. So either way, UM, 0:22:37.520 --> 0:22:40.000 this field is likely to move out of the hands 0:22:40.040 --> 0:22:42.480 of a Western super major and into the hands of 0:22:43.520 --> 0:22:47.040 UM state state backed entity, which which are far less 0:22:47.040 --> 0:22:50.240