1 00:00:02,720 --> 00:00:11,440 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,560 --> 00:00:13,680 Speaker 1: with Alex Steel and Paul Sweeney. 3 00:00:13,760 --> 00:00:17,000 Speaker 2: The real ap performance has been in US corporate high yield. 4 00:00:17,160 --> 00:00:19,520 Speaker 3: Are the companies lean enough? Have they trimmed all the fats? 5 00:00:19,560 --> 00:00:23,200 Speaker 2: The semiconductor business is a really cyclical business. 6 00:00:22,840 --> 00:00:26,560 Speaker 1: Breaking market headlines and corporate news from across the globe. 7 00:00:26,600 --> 00:00:29,040 Speaker 3: Do investors like the M and A that we've seen? 8 00:00:29,240 --> 00:00:32,199 Speaker 2: These are two big time blue chip companies. 9 00:00:32,479 --> 00:00:36,279 Speaker 3: Window between the peak and cunt changing super fast. 10 00:00:36,120 --> 00:00:41,160 Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio. 11 00:00:42,479 --> 00:00:44,879 Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big 12 00:00:44,920 --> 00:00:47,680 Speaker 2: business series impacting Wall Street and the global markets. 13 00:00:47,760 --> 00:00:49,640 Speaker 3: Each and every week we provide in depth research and 14 00:00:49,720 --> 00:00:51,400 Speaker 3: data on some of the two thousand companies and in one 15 00:00:51,440 --> 00:00:54,160 Speaker 3: hundred and thirty industries our end. Let's cover worldwide. 16 00:00:54,240 --> 00:00:57,800 Speaker 2: Today we'll discuss Tesla's CEO Elon Musk relationship with President 17 00:00:57,800 --> 00:00:58,440 Speaker 2: Donald Trump. 18 00:00:58,520 --> 00:01:01,240 Speaker 3: Plus we'll look at the consequence the President Trump's America 19 00:01:01,320 --> 00:01:04,000 Speaker 3: First Investment policy on the US energy landscape. 20 00:01:04,040 --> 00:01:06,720 Speaker 2: But first we begin in the health and pharmaceutical space. 21 00:01:06,840 --> 00:01:08,800 Speaker 3: Less than three four months into twenty twenty five, the 22 00:01:08,880 --> 00:01:11,760 Speaker 3: US measle cases of outpaced last year's total, and this 23 00:01:11,840 --> 00:01:14,680 Speaker 3: comes as the worrying outbreak link to multiple desks continues 24 00:01:14,720 --> 00:01:15,160 Speaker 3: to spread. 25 00:01:15,400 --> 00:01:18,320 Speaker 2: In other news, the drugmakers Roche and Zealand It teamed 26 00:01:18,400 --> 00:01:20,800 Speaker 2: up in a five point three billion dollar pack in 27 00:01:20,840 --> 00:01:23,280 Speaker 2: a bid to challenge Nova Nordisk and Eli Lilly in 28 00:01:23,319 --> 00:01:25,160 Speaker 2: the booming market for obcit drugs. 29 00:01:25,200 --> 00:01:27,560 Speaker 3: From where we are joined by Sam Fazelli, Boomberg Intelligence, 30 00:01:27,560 --> 00:01:30,480 Speaker 3: Director of Research for Global Industries and Senior Pharmaceuticals. 31 00:01:30,880 --> 00:01:33,760 Speaker 2: First asked Sam about his immune status and how concerned 32 00:01:33,760 --> 00:01:36,080 Speaker 2: we should be about getting a meso vaccine booster. 33 00:01:36,440 --> 00:01:39,600 Speaker 4: It's not like it's rampant and everywhere, but the reality 34 00:01:39,640 --> 00:01:42,440 Speaker 4: is it worried me enough mm hmm, being all those 35 00:01:42,520 --> 00:01:44,480 Speaker 4: labels you want to give me right that, I thought, 36 00:01:44,560 --> 00:01:47,560 Speaker 4: let me go and see what my immune status is. 37 00:01:47,680 --> 00:01:49,720 Speaker 3: I'm doing that, right. I have my blood tests in 38 00:01:49,760 --> 00:01:51,520 Speaker 3: a couple of weeks, because like, why not, right? 39 00:01:52,120 --> 00:01:54,480 Speaker 5: Yeah? I just you know, so exactly what have you 40 00:01:54,480 --> 00:01:55,000 Speaker 5: got to lose? 41 00:01:55,120 --> 00:01:57,920 Speaker 4: At least I know I know that if I am 42 00:01:58,000 --> 00:02:02,040 Speaker 4: susceptible and I've got a little son, I think about 43 00:02:02,080 --> 00:02:04,000 Speaker 4: being close to him or notther etcetera, etcetera. 44 00:02:04,080 --> 00:02:06,640 Speaker 5: So I did that, So I think do we need 45 00:02:06,680 --> 00:02:09,400 Speaker 5: all to take it? Don't? I don't think so at 46 00:02:09,400 --> 00:02:09,760 Speaker 5: the minute. 47 00:02:09,760 --> 00:02:11,519 Speaker 4: I don't think this is something everybody needs to rush 48 00:02:11,560 --> 00:02:13,720 Speaker 4: out and get majority of people. 49 00:02:13,880 --> 00:02:17,680 Speaker 5: If you were vaccinated, especially post nineteen. 50 00:02:17,360 --> 00:02:22,080 Speaker 4: Sixty eight, which is all of you guys, right, you 51 00:02:22,120 --> 00:02:25,520 Speaker 4: would be immune to you know, that's a very one 52 00:02:25,560 --> 00:02:27,799 Speaker 4: of those vaccines that worked for a long long time. 53 00:02:28,040 --> 00:02:30,520 Speaker 4: So and I think my result actually says I am immune, 54 00:02:30,560 --> 00:02:30,680 Speaker 4: so I. 55 00:02:30,680 --> 00:02:34,120 Speaker 5: Shouldn't worry about it. And that's where we need to be. 56 00:02:34,240 --> 00:02:39,160 Speaker 4: The problem is we need ninety five percent immunity around 57 00:02:39,280 --> 00:02:43,760 Speaker 4: us to benefit from the herd immunity effect. You remember 58 00:02:43,800 --> 00:02:46,720 Speaker 4: that or in the pandemic we talked about that. Yeah, 59 00:02:46,880 --> 00:02:49,120 Speaker 4: And that's the problem that in some states in the 60 00:02:49,200 --> 00:02:51,920 Speaker 4: US is falling below that. In fact, I counted only 61 00:02:52,000 --> 00:02:55,280 Speaker 4: twelve or thirteen states you can count that on the 62 00:02:55,280 --> 00:02:58,800 Speaker 4: CDC website that are above the ninety five percent vaccination level. 63 00:02:59,280 --> 00:03:02,120 Speaker 4: So those are low have a risk of outbreaks, and 64 00:03:02,120 --> 00:03:06,079 Speaker 4: that's why we've been seeing that rate rising and infection 65 00:03:06,200 --> 00:03:08,919 Speaker 4: rates have been rising since twenty seventeen eighteen. There's always 66 00:03:08,919 --> 00:03:12,440 Speaker 4: some but we're dealing unfortunately with a pretty meaningful sized 67 00:03:12,440 --> 00:03:13,679 Speaker 4: eye break in Texas. 68 00:03:14,040 --> 00:03:18,920 Speaker 2: So deals last week Roche and the Zealand getting in 69 00:03:18,960 --> 00:03:20,679 Speaker 2: on a deal. What's happening with our good friends of es. 70 00:03:21,360 --> 00:03:23,160 Speaker 4: Yeah, yeah, So look, I mean we've only got two 71 00:03:23,160 --> 00:03:25,440 Speaker 4: things to talk about here, infectious diseases or rubesity. 72 00:03:25,560 --> 00:03:29,560 Speaker 5: Right, and this deal, this deal was the licensing deal, 73 00:03:29,600 --> 00:03:30,040 Speaker 5: not MNA. 74 00:03:30,440 --> 00:03:32,760 Speaker 4: So basically Roche went to this company and said, look, 75 00:03:32,840 --> 00:03:35,080 Speaker 4: we're interested in your asset and we want to do 76 00:03:35,120 --> 00:03:38,480 Speaker 4: a partnership. So Roach has taken on fifty to fifty 77 00:03:38,680 --> 00:03:39,800 Speaker 4: up to fifty to fifty. 78 00:03:39,880 --> 00:03:40,240 Speaker 5: I e. 79 00:03:40,640 --> 00:03:44,240 Speaker 4: Zealand can invest in their commercialization up to a point 80 00:03:44,280 --> 00:03:47,360 Speaker 4: of getting fifty percent of the profits, assuming they're putting 81 00:03:47,400 --> 00:03:48,600 Speaker 4: fifty percent of the costs. 82 00:03:48,720 --> 00:03:51,160 Speaker 5: Right, So, and what is it? Is it another week 83 00:03:51,120 --> 00:03:53,080 Speaker 5: go VI? Is it another zep bound? No, it's not. 84 00:03:53,560 --> 00:03:57,480 Speaker 4: It's a different mechanism, and it's supposed to work by 85 00:03:57,560 --> 00:04:00,760 Speaker 4: giving you weight loss but helping preserve of some of 86 00:04:00,800 --> 00:04:03,480 Speaker 4: the muscle mass, which I'm sure you've talked about this. 87 00:04:03,520 --> 00:04:05,120 Speaker 5: So we've talked about this several times. 88 00:04:05,520 --> 00:04:08,240 Speaker 4: You don't want to lose muscle and fat, You want 89 00:04:08,240 --> 00:04:13,640 Speaker 4: to lose fat less muscle and that's what these amylin drugs. 90 00:04:13,400 --> 00:04:14,280 Speaker 5: Potentially give you. 91 00:04:14,320 --> 00:04:18,839 Speaker 4: And of course Rashi's no newcomer to this space, right 92 00:04:19,920 --> 00:04:24,040 Speaker 4: But interestingly, what it does pose is in the future 93 00:04:24,040 --> 00:04:25,640 Speaker 4: that we're going to be looking at you and I 94 00:04:25,720 --> 00:04:27,960 Speaker 4: and Alex together, I'm sure we'll be looking talking about 95 00:04:27,960 --> 00:04:28,320 Speaker 4: this forever. 96 00:04:28,480 --> 00:04:31,080 Speaker 5: Is how do you decide what to give to what patients? 97 00:04:31,839 --> 00:04:33,680 Speaker 5: That's what the world needs to figure out. Now. 98 00:04:34,160 --> 00:04:35,880 Speaker 3: Yeah, I don't know what the answer is to that. 99 00:04:35,960 --> 00:04:38,279 Speaker 3: I'm sure the companies all have their own answer. 100 00:04:38,680 --> 00:04:40,400 Speaker 5: I'm coming back to you, Alex to figure it out. 101 00:04:40,480 --> 00:04:43,200 Speaker 3: Okay, I believe you. When we take a look at 102 00:04:43,520 --> 00:04:46,520 Speaker 3: the in the US and the level of NIH funding 103 00:04:46,560 --> 00:04:51,520 Speaker 3: that is on the chopping block, what part of the 104 00:04:51,560 --> 00:04:55,120 Speaker 3: industry do you think is most vulnerable to losing funding 105 00:04:55,520 --> 00:04:57,480 Speaker 3: and then missing out on some research? 106 00:04:57,960 --> 00:04:58,120 Speaker 5: Yep. 107 00:04:58,160 --> 00:05:00,839 Speaker 4: But so Alex, if you think about and I, it's 108 00:05:02,320 --> 00:05:06,159 Speaker 4: it's mostly majority of it, of course is biological right 109 00:05:06,240 --> 00:05:10,359 Speaker 4: National Institute's Health. So that's where I think the cuts 110 00:05:10,360 --> 00:05:12,880 Speaker 4: are coming. But it's not just about cutting people. It's 111 00:05:12,880 --> 00:05:16,080 Speaker 4: still uncertain that it creates. It's been the cutting of 112 00:05:16,680 --> 00:05:21,640 Speaker 4: overhead costs to universities. It is the fact that apparently 113 00:05:21,680 --> 00:05:24,800 Speaker 4: there'll be no not based on what I've been looking at, 114 00:05:24,839 --> 00:05:28,640 Speaker 4: but based on what I've heard, there been no patent 115 00:05:28,760 --> 00:05:33,120 Speaker 4: filings by the Institute in the past few weeks, which 116 00:05:33,360 --> 00:05:36,279 Speaker 4: could be stop filing patterns because it's expensive, or could 117 00:05:36,320 --> 00:05:38,039 Speaker 4: be we don't want to give all our ideas away 118 00:05:38,640 --> 00:05:42,600 Speaker 4: or whatever. But they are the font or found or 119 00:05:42,600 --> 00:05:47,120 Speaker 4: whatever the right phrase is, sorry of future drug development, 120 00:05:47,360 --> 00:05:49,160 Speaker 4: and they get lots of revenue back from it. 121 00:05:49,560 --> 00:05:52,520 Speaker 5: So it is. It is worrying, and I don't like 122 00:05:52,680 --> 00:05:53,640 Speaker 5: seeing what I'm seeing. 123 00:05:54,120 --> 00:05:57,400 Speaker 4: Up to twenty percent of the stuff being cut, and 124 00:05:57,720 --> 00:05:59,840 Speaker 4: we need a turn in this. We need to stop 125 00:06:00,000 --> 00:06:01,839 Speaker 4: seeing this and so that we don't feel like science 126 00:06:01,960 --> 00:06:02,599 Speaker 4: is under attack. 127 00:06:03,000 --> 00:06:05,880 Speaker 2: Our thanks to Sam Fizzelli, Bloomberg Intelligence, Director of Research 128 00:06:05,880 --> 00:06:08,359 Speaker 2: for Global Industries and senior pharmaceuticals analysts. 129 00:06:08,520 --> 00:06:10,920 Speaker 3: This week we focus on a few Bloomberg Big Take stories, 130 00:06:10,960 --> 00:06:13,839 Speaker 3: and one was titled Cancer Patients one hundred thousand dollars 131 00:06:13,839 --> 00:06:17,480 Speaker 3: bill shows chaos rockinghealthcare. You can find it on Bloomberg 132 00:06:17,520 --> 00:06:18,560 Speaker 3: dot Com and the Terminal. 133 00:06:18,800 --> 00:06:22,360 Speaker 2: The story focuses on the insurance industry, their rise in denials, 134 00:06:22,400 --> 00:06:25,000 Speaker 2: and one woman's fight to get coverage for her cancer treatment. 135 00:06:25,200 --> 00:06:25,520 Speaker 5: For more. 136 00:06:25,560 --> 00:06:28,240 Speaker 3: We spoke to John Tazzi, Bloomberg Healthcare reporter, and we 137 00:06:28,240 --> 00:06:29,960 Speaker 3: first asked John to walk us through a story in 138 00:06:30,000 --> 00:06:31,800 Speaker 3: the broader healthcare insurance industry. 139 00:06:32,000 --> 00:06:34,440 Speaker 6: This is a story of a woman who is being 140 00:06:34,440 --> 00:06:40,480 Speaker 6: treated for advanced breast cancer in Wisconsin and he sought 141 00:06:40,600 --> 00:06:45,719 Speaker 6: prior authorization from her insurance company at United Healthcare for 142 00:06:46,880 --> 00:06:51,839 Speaker 6: the treatment. She got a kind of confusing set of responses. 143 00:06:51,880 --> 00:06:54,480 Speaker 6: She got two letters on the same day, one denying 144 00:06:54,520 --> 00:06:59,719 Speaker 6: the authorization, another approving it. She got the treatment months later, 145 00:06:59,760 --> 00:07:02,560 Speaker 6: the company to kind to pay for it. She ended 146 00:07:02,600 --> 00:07:06,840 Speaker 6: up filing a lawsuit to get the treatment paid for. 147 00:07:08,120 --> 00:07:10,920 Speaker 6: The company ultimately did pay for it after the lawsuit 148 00:07:10,920 --> 00:07:13,400 Speaker 6: was filed after we inquired about it. But you know, 149 00:07:13,440 --> 00:07:18,400 Speaker 6: what this story really exemplifies is kind of what an 150 00:07:18,440 --> 00:07:25,440 Speaker 6: administrative mess the US healthcare system has become. 151 00:07:25,840 --> 00:07:27,760 Speaker 2: So, I mean, you've got a stat in here which 152 00:07:27,880 --> 00:07:31,480 Speaker 2: is just blows me away. The US healthcare system spends 153 00:07:31,520 --> 00:07:35,120 Speaker 2: as much on billing and claims processing as it does 154 00:07:35,160 --> 00:07:38,440 Speaker 2: on treating cancer. That is just extraordinary because what you 155 00:07:38,440 --> 00:07:40,720 Speaker 2: have here, as reading your story, you got two big 156 00:07:40,840 --> 00:07:45,160 Speaker 2: entities locking horns all the time that the provider of 157 00:07:45,200 --> 00:07:48,520 Speaker 2: this of the medical procedure, and then the insurance company 158 00:07:48,560 --> 00:07:51,400 Speaker 2: that has to pay for neither of them. Are you 159 00:07:51,440 --> 00:07:53,680 Speaker 2: know wallflowers? They go at it, don't they. 160 00:07:53,760 --> 00:07:56,280 Speaker 6: Yeah, So what we have is this adversarial system, right. 161 00:07:56,280 --> 00:08:00,880 Speaker 6: You have on one side, you know, hospitals, medical provis labs. 162 00:08:01,800 --> 00:08:05,120 Speaker 6: You know, we're in a free market economy where there's 163 00:08:05,200 --> 00:08:09,360 Speaker 6: no restrictions on the prices they can charge. On the 164 00:08:09,400 --> 00:08:13,120 Speaker 6: other side, we have the private insurers who are you know, 165 00:08:13,240 --> 00:08:16,560 Speaker 6: trying to constrain costs for their clients and you know, 166 00:08:16,600 --> 00:08:19,880 Speaker 6: make sure that the care given to their members is 167 00:08:19,920 --> 00:08:24,520 Speaker 6: appropriate care. And you know, it's just this conflict and 168 00:08:24,560 --> 00:08:28,560 Speaker 6: it's escalating. You know, we see data on insurance denials rising. 169 00:08:29,920 --> 00:08:36,240 Speaker 6: We see a bunch of basically companies that have gotten 170 00:08:36,320 --> 00:08:38,840 Speaker 6: into this system to help one side or the other, 171 00:08:39,000 --> 00:08:42,360 Speaker 6: or in some cases both maximize their financial advantage in 172 00:08:42,440 --> 00:08:47,959 Speaker 6: these transactions. So you have the sort of escalating conflict 173 00:08:47,960 --> 00:08:49,520 Speaker 6: that patients are often caught in the middle of. 174 00:08:50,000 --> 00:08:51,120 Speaker 3: So what's our way out of here? 175 00:08:53,400 --> 00:08:54,000 Speaker 7: Good question? 176 00:08:54,160 --> 00:08:55,959 Speaker 6: I mean, I think you know, some people would argue 177 00:08:55,960 --> 00:09:01,000 Speaker 6: that there is you know, opportunities for technology and AI 178 00:09:01,320 --> 00:09:04,000 Speaker 6: and you know, more efficient. 179 00:09:03,520 --> 00:09:07,079 Speaker 3: Processes, standardized. Yeah, technically standardized practices or. 180 00:09:07,080 --> 00:09:08,880 Speaker 6: You know, I mean, I think that would potentially go 181 00:09:08,920 --> 00:09:09,959 Speaker 6: a long way. I mean, there's been a lot of 182 00:09:09,960 --> 00:09:13,240 Speaker 6: research over a long time, over you know, over kind 183 00:09:13,240 --> 00:09:15,520 Speaker 6: of how to do this. I think what you fundamentally 184 00:09:15,520 --> 00:09:18,559 Speaker 6: get though, is like the system where incentives are are 185 00:09:18,840 --> 00:09:21,120 Speaker 6: you know, are misaligned. Like you have one side that 186 00:09:21,160 --> 00:09:23,600 Speaker 6: has an incentive to do more and to Bill Moore, 187 00:09:23,640 --> 00:09:26,960 Speaker 6: and you have another inside that has incentives to kind 188 00:09:26,960 --> 00:09:30,040 Speaker 6: of put up more restrictions or guardrails they might call 189 00:09:30,080 --> 00:09:35,960 Speaker 6: it around around care. And you know, that's sort of increasing, 190 00:09:36,120 --> 00:09:39,800 Speaker 6: and I'm not sure that there's there's sort of a 191 00:09:39,840 --> 00:09:41,520 Speaker 6: clear pathway out of it right now. 192 00:09:41,679 --> 00:09:44,160 Speaker 2: Well, one of my questions is what does this mean 193 00:09:44,200 --> 00:09:46,679 Speaker 2: for healthcare providers? It kind of I mean, and you've 194 00:09:46,679 --> 00:09:49,800 Speaker 2: got a great charting here us doctors no longer work 195 00:09:49,840 --> 00:09:52,439 Speaker 2: for themselves, And it's the percent of physicians employed by 196 00:09:52,480 --> 00:09:55,800 Speaker 2: hospitals or corporate entities. And that number was about sixty 197 00:09:55,800 --> 00:09:59,680 Speaker 2: percent back in twenty nineteen. It's over seventy five percent today. 198 00:10:00,120 --> 00:10:02,679 Speaker 2: Doctors just saying I don't I just can't deal with 199 00:10:02,679 --> 00:10:03,360 Speaker 2: this stuff anymore. 200 00:10:03,480 --> 00:10:05,640 Speaker 6: Yeah, And I think if you talk to physicians, you hear. 201 00:10:05,920 --> 00:10:10,560 Speaker 6: You know, there's a lot of compliance and sort of 202 00:10:10,640 --> 00:10:14,200 Speaker 6: like you know, investment they need to do in like 203 00:10:15,000 --> 00:10:18,040 Speaker 6: over the recent years around like electronic medical records and 204 00:10:18,760 --> 00:10:22,280 Speaker 6: you know, basically being a practicing physician has gotten a 205 00:10:22,320 --> 00:10:24,000 Speaker 6: lot more complicated and I think in some ways a 206 00:10:24,040 --> 00:10:26,720 Speaker 6: lot more expensive. In the days of just kind of 207 00:10:26,760 --> 00:10:28,760 Speaker 6: hanging your shingle when you get out of med school 208 00:10:29,000 --> 00:10:32,360 Speaker 6: and being a solo practitioner, those are over. The other 209 00:10:32,400 --> 00:10:34,960 Speaker 6: thing is that they're you know, looking for bargaining power 210 00:10:35,200 --> 00:10:37,559 Speaker 6: when they're contracting with the insurance companies. So they're joining 211 00:10:37,559 --> 00:10:40,640 Speaker 6: hospital systems, they're joining big groups, they're joining private equity 212 00:10:40,679 --> 00:10:43,400 Speaker 6: owned you know, practices. 213 00:10:44,800 --> 00:10:48,080 Speaker 3: I guess the logical question also then becomes if they're 214 00:10:48,080 --> 00:10:51,120 Speaker 3: tweaks to like entitlement programs too, Like how does that 215 00:10:52,160 --> 00:10:55,200 Speaker 3: wind up affecting this whole dynamic because of their changes 216 00:10:55,240 --> 00:10:57,880 Speaker 3: to medicate and medicare. I would assume that some providers 217 00:10:58,000 --> 00:11:00,319 Speaker 3: will lend lose money and then it makes it harder. 218 00:11:00,480 --> 00:11:03,040 Speaker 6: Yeah, I mean, I think, you know, we we will 219 00:11:03,040 --> 00:11:06,720 Speaker 6: still have to see what comes out of Washington on 220 00:11:07,600 --> 00:11:10,920 Speaker 6: that front. But you know, in general, I think providers 221 00:11:10,960 --> 00:11:14,000 Speaker 6: will tell you that they have to charge higher prices 222 00:11:14,000 --> 00:11:18,680 Speaker 6: in the private market because they are not compensated enough 223 00:11:18,720 --> 00:11:21,040 Speaker 6: by government programs. I know there's a lot of dispute 224 00:11:21,040 --> 00:11:24,160 Speaker 6: about that assertion as well from economists and and others, 225 00:11:24,200 --> 00:11:28,800 Speaker 6: but you know it, you know, for patients, particularly in 226 00:11:28,840 --> 00:11:31,240 Speaker 6: the commercial market where they you know, if you're on 227 00:11:31,320 --> 00:11:34,160 Speaker 6: Medicare Medicaid, the government sets the price more or less. 228 00:11:35,160 --> 00:11:38,120 Speaker 6: But if you're on a private plan, you know, those 229 00:11:38,160 --> 00:11:40,200 Speaker 6: prices are set in the private market. And that's why 230 00:11:40,280 --> 00:11:42,280 Speaker 6: when you know, if you do have a situation where 231 00:11:42,280 --> 00:11:45,440 Speaker 6: something isn't properly covered, you can be exposed to a 232 00:11:45,480 --> 00:11:47,680 Speaker 6: really expensive bill. 233 00:11:47,960 --> 00:11:50,960 Speaker 2: Did your did Julie Simon's the woman in your story 234 00:11:51,000 --> 00:11:53,000 Speaker 2: that you ever getting into resolution with this lawsuit here? 235 00:11:54,000 --> 00:11:57,280 Speaker 6: So the claim was paid you know again after if 236 00:11:57,280 --> 00:12:00,280 Speaker 6: you filed the laws, after we asked the company about it, 237 00:12:00,280 --> 00:12:05,920 Speaker 6: claims were you know, so that was resolved that the 238 00:12:06,080 --> 00:12:08,600 Speaker 6: lawsuit is you know, is still pendaning. 239 00:12:08,640 --> 00:12:11,440 Speaker 2: Okay, all right, Thanks to John Tozzi, Bloomberg Healthcare Reporter. 240 00:12:11,720 --> 00:12:14,960 Speaker 3: Coming up, we're gonna look at Wall Street's infamous dark pools. 241 00:12:15,200 --> 00:12:18,040 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 242 00:12:18,080 --> 00:12:20,240 Speaker 2: depth research and data on two thousand companies and one 243 00:12:20,320 --> 00:12:23,400 Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via 244 00:12:23,480 --> 00:12:24,760 Speaker 2: b I go on the terminal. 245 00:12:24,800 --> 00:12:27,480 Speaker 3: I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg. 246 00:12:34,280 --> 00:12:37,960 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 247 00:12:38,040 --> 00:12:41,120 Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android 248 00:12:41,160 --> 00:12:44,440 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 249 00:12:44,520 --> 00:12:48,040 Speaker 1: you get your podcasts, or watch us live on YouTube. 250 00:12:48,679 --> 00:12:51,560 Speaker 3: We turned to Tesla's CEO, Elon Musk and his relationship 251 00:12:51,559 --> 00:12:52,600 Speaker 3: with the Trump administration. 252 00:12:53,000 --> 00:12:56,080 Speaker 2: Tesla stock has been suffering since it's games on election Day, 253 00:12:56,280 --> 00:12:58,720 Speaker 2: and it shows that muscle relationship with President Donald Trump 254 00:12:58,800 --> 00:13:00,000 Speaker 2: is hurting his portfolio. 255 00:13:00,200 --> 00:13:02,880 Speaker 3: From whre, we spoke to Liam Denning Lumberg opinion columnists 256 00:13:02,880 --> 00:13:05,640 Speaker 3: for his piece titled how long will Musk be Welcomed 257 00:13:05,640 --> 00:13:06,439 Speaker 3: at the White House? 258 00:13:06,600 --> 00:13:08,840 Speaker 2: We first asked Liam if he is surprised that Elon 259 00:13:08,920 --> 00:13:10,880 Speaker 2: Musk has lasted this long at the White House? 260 00:13:11,000 --> 00:13:11,720 Speaker 8: You know, not really. 261 00:13:11,760 --> 00:13:14,080 Speaker 9: I mean, I know that there's this speculation that, you know, 262 00:13:14,120 --> 00:13:16,240 Speaker 9: you've got these two big egos and they're bound to 263 00:13:17,320 --> 00:13:19,400 Speaker 9: kind of explode in some kind of soup and over 264 00:13:19,559 --> 00:13:21,520 Speaker 9: at some point, I think we do have to consider 265 00:13:21,559 --> 00:13:26,120 Speaker 9: that they both still get quite a lot from this relationship. 266 00:13:26,160 --> 00:13:29,360 Speaker 9: I mean, you know, Elon Musk has the era of 267 00:13:29,679 --> 00:13:33,920 Speaker 9: the most powerful person in the world. He has through 268 00:13:34,360 --> 00:13:40,720 Speaker 9: the doge whatever that is, he has influence over all 269 00:13:40,760 --> 00:13:44,880 Speaker 9: sorts of agencies that regulate or do business with his companies. 270 00:13:44,960 --> 00:13:49,520 Speaker 9: And in return, you know, President Trump gets to bask 271 00:13:49,640 --> 00:13:52,319 Speaker 9: in the aura of this prominent businessman. 272 00:13:52,400 --> 00:13:54,520 Speaker 8: He gets campaign dollars. 273 00:13:55,040 --> 00:13:58,600 Speaker 9: You know, and he gets obviously you know, should we say, 274 00:13:58,679 --> 00:14:02,240 Speaker 9: algorithmic alignment on a big social media platform. 275 00:14:02,280 --> 00:14:04,079 Speaker 8: So there is still quite a ridic alignment. 276 00:14:05,160 --> 00:14:08,240 Speaker 9: But we have seen, you know, I think the reason 277 00:14:08,240 --> 00:14:10,320 Speaker 9: I wrote the piece is we've seen a confluence of 278 00:14:10,400 --> 00:14:14,839 Speaker 9: things that point to the risks of a business person 279 00:14:15,040 --> 00:14:20,200 Speaker 9: like Elon Musk tying himself this closely to you know, 280 00:14:20,240 --> 00:14:21,680 Speaker 9: a pretty controversial president. 281 00:14:21,920 --> 00:14:23,560 Speaker 2: Yeah, Liam put me in the camp. I was one 282 00:14:23,600 --> 00:14:27,040 Speaker 2: of those folks that said, you know, Elin will probably last, 283 00:14:27,320 --> 00:14:30,360 Speaker 2: his tenure will be measured in weeks, not months or years. 284 00:14:30,360 --> 00:14:32,160 Speaker 2: And that looks like, at least at this early stage, 285 00:14:32,200 --> 00:14:35,120 Speaker 2: I may be proven wrong, but you know, money talks here. 286 00:14:36,040 --> 00:14:39,000 Speaker 2: According to Rich go On, the Bloomberg criminal must. His 287 00:14:39,120 --> 00:14:41,680 Speaker 2: next net wealth is down one hundred and eighteen point 288 00:14:41,720 --> 00:14:46,320 Speaker 2: six billion dollars this year. Do you think he cares? 289 00:14:48,280 --> 00:14:50,480 Speaker 9: I think, you know, maybe on a kind of an 290 00:14:50,480 --> 00:14:51,720 Speaker 9: ego level that matters. 291 00:14:51,720 --> 00:14:53,680 Speaker 8: I mean, he's still worth you know. 292 00:14:53,640 --> 00:14:55,480 Speaker 9: The last time I looked up three hundred and thirteen, 293 00:14:56,560 --> 00:14:58,360 Speaker 9: so you know, he's not He's. 294 00:14:58,280 --> 00:14:59,680 Speaker 8: Obviously not going to be struggling. 295 00:14:59,760 --> 00:15:03,440 Speaker 9: But I think for me, you know, the big mover 296 00:15:03,520 --> 00:15:07,080 Speaker 9: there is Tesla obviously, because that's the the biggest asset, 297 00:15:07,200 --> 00:15:11,640 Speaker 9: it's the only really liquid one he has. You know, 298 00:15:11,720 --> 00:15:15,360 Speaker 9: his own personal indebtedness is tied to that stock, and 299 00:15:15,400 --> 00:15:17,960 Speaker 9: he used it, you know, to help buy. 300 00:15:19,520 --> 00:15:19,920 Speaker 8: Twitter. 301 00:15:20,800 --> 00:15:24,680 Speaker 9: And I think it is it is an issue because 302 00:15:24,680 --> 00:15:28,400 Speaker 9: I think what's been interesting for me with what's happened 303 00:15:28,400 --> 00:15:30,680 Speaker 9: with Tesla since the election. You know, obviously there was 304 00:15:30,680 --> 00:15:34,040 Speaker 9: that huge Trump bump in the stock, you know, worth 305 00:15:34,240 --> 00:15:37,840 Speaker 9: north of seven hundred billion dollars, which has collapsed, and 306 00:15:38,160 --> 00:15:40,320 Speaker 9: in some ways I've sort of viewed that not just 307 00:15:40,360 --> 00:15:42,160 Speaker 9: as a SOT price, but as an opinion poll. 308 00:15:42,360 --> 00:15:43,320 Speaker 8: You know, we saw this. 309 00:15:44,200 --> 00:15:49,400 Speaker 9: Really enthusiastic response, you know, based around honestly pretty nebulous 310 00:15:49,480 --> 00:15:54,680 Speaker 9: ideas that Musk's closeness to Trump would somehow translate into say, like, 311 00:15:55,400 --> 00:15:59,600 Speaker 9: you know, favorable autonomous driving legislation or something. But when 312 00:15:59,640 --> 00:16:02,760 Speaker 9: you want, there wasn't really a whole lot there, mainly 313 00:16:02,800 --> 00:16:05,560 Speaker 9: because you know, the big problem there is it's not 314 00:16:05,600 --> 00:16:09,040 Speaker 9: government regulations. The fact that Tesla still doesn't have a 315 00:16:09,080 --> 00:16:12,320 Speaker 9: commercial rogo taxi like that is the main problem. And 316 00:16:12,400 --> 00:16:17,040 Speaker 9: in the meantime, we've seen the corrosive effects of that relationship. 317 00:16:17,080 --> 00:16:21,880 Speaker 9: You know, clearly the Tesla brand is suffering in major markets. 318 00:16:21,880 --> 00:16:24,920 Speaker 9: We've seen bad numbers out of Europe, We've seen bad 319 00:16:25,040 --> 00:16:27,960 Speaker 9: numbers out of China or that may have less to. 320 00:16:27,920 --> 00:16:30,479 Speaker 8: Do with politics and more just with straight up petition. 321 00:16:30,960 --> 00:16:35,400 Speaker 9: And we've seen weakness in California, the big US EV 322 00:16:35,600 --> 00:16:38,920 Speaker 9: market building through twenty twenty four, and I honestly don't 323 00:16:38,960 --> 00:16:41,960 Speaker 9: expect that the past couple of months have helped with 324 00:16:42,040 --> 00:16:46,520 Speaker 9: sales there either. And I think as that price comes down, 325 00:16:47,360 --> 00:16:53,080 Speaker 9: it does tarnish Musk's image, it does affect him financially, 326 00:16:53,840 --> 00:16:58,440 Speaker 9: and it also points to I think lasting damage if 327 00:16:58,680 --> 00:17:02,360 Speaker 9: this relationship with Trump were to unravel in the same 328 00:17:02,360 --> 00:17:04,959 Speaker 9: way we've seen with the businessmen previously. 329 00:17:05,160 --> 00:17:07,480 Speaker 3: So I live in parks of Brooklyn. I think Liam 330 00:17:07,520 --> 00:17:10,080 Speaker 3: does too. But have you seen the teslas that are 331 00:17:10,840 --> 00:17:12,560 Speaker 3: you do know? I thought you live in Brooklyn. 332 00:17:12,400 --> 00:17:15,000 Speaker 8: Right now, I mean suburbs. 333 00:17:15,000 --> 00:17:17,040 Speaker 3: Oh he changed. Okay, he was in Brooklyn at one point. 334 00:17:17,520 --> 00:17:19,679 Speaker 3: But my point of this whole conversation is in yuppie 335 00:17:19,720 --> 00:17:22,479 Speaker 3: Brooklyn there are teslas parked on the street and I 336 00:17:22,520 --> 00:17:25,119 Speaker 3: noticed for the first time there were signs like leaflets 337 00:17:25,160 --> 00:17:27,720 Speaker 3: being put on the windshield being like cell your tesla 338 00:17:27,880 --> 00:17:30,080 Speaker 3: with like a picture of Elon Musk, because like that's 339 00:17:30,080 --> 00:17:33,200 Speaker 3: where the protest is, like only only in Parkslow when 340 00:17:33,240 --> 00:17:36,399 Speaker 3: that actually happen. Does Musk also provide a foil for 341 00:17:36,480 --> 00:17:39,240 Speaker 3: Donald Trump in terms of like Musk gets the heat 342 00:17:39,400 --> 00:17:40,040 Speaker 3: Trump doesn't. 343 00:17:40,960 --> 00:17:44,000 Speaker 9: Yeah, And you know, I think my read of the 344 00:17:44,040 --> 00:17:47,119 Speaker 9: way Musk was brought into government in this kind of, 345 00:17:48,040 --> 00:17:52,760 Speaker 9: you know, kind of slightly arms length, quasi independent role 346 00:17:52,960 --> 00:17:55,159 Speaker 9: was that that gave him a lot of freedom of 347 00:17:56,480 --> 00:17:59,560 Speaker 9: movement to act. It also meant he obviously avoided some 348 00:17:59,640 --> 00:18:02,359 Speaker 9: of the more onerous kind of Senate hearings and that 349 00:18:02,440 --> 00:18:05,639 Speaker 9: kind of thing. But I think it also gives Trump 350 00:18:05,760 --> 00:18:09,960 Speaker 9: some useful distance if at some point we were to see, 351 00:18:10,320 --> 00:18:13,399 Speaker 9: you know, some real blowback against I don't know, you know, 352 00:18:13,640 --> 00:18:17,240 Speaker 9: cuts to entitlements or if we see you know, if 353 00:18:17,240 --> 00:18:19,040 Speaker 9: we see a recession happen. 354 00:18:20,040 --> 00:18:22,520 Speaker 8: We've seen Trump, you know. 355 00:18:22,600 --> 00:18:28,040 Speaker 9: Very quickly, you know, lose patience with some of these 356 00:18:28,080 --> 00:18:29,960 Speaker 9: people he's brought in before. You know, I'm thinking of 357 00:18:30,000 --> 00:18:34,399 Speaker 9: people like the former excell and CEO Rex Tillison in 358 00:18:34,480 --> 00:18:38,560 Speaker 9: the first term. Gary Khan from Goldman Sachs. Musk's in 359 00:18:38,600 --> 00:18:41,760 Speaker 9: a different league, but he's also very close. He's not 360 00:18:42,240 --> 00:18:46,359 Speaker 9: you know, this is a whole new level of embrace 361 00:18:46,480 --> 00:18:49,200 Speaker 9: between a prominent business person and the White House. 362 00:18:49,200 --> 00:18:51,520 Speaker 3: All right, Thanks to Lilliam Denning, Bloomberg opinion columnist. 363 00:18:51,920 --> 00:18:54,240 Speaker 2: One Bloomberg Big Takes story we focused on this week 364 00:18:54,359 --> 00:18:57,439 Speaker 2: was titled Wall Street's private rooms are making dark pools 365 00:18:57,520 --> 00:18:59,919 Speaker 2: even darker. You can find it on the Bloomberg Dot 366 00:19:00,400 --> 00:19:01,240 Speaker 2: and the Terminal. 367 00:19:01,400 --> 00:19:03,520 Speaker 3: The story focuses on how Wall Street's dark pools are 368 00:19:03,560 --> 00:19:06,520 Speaker 3: becoming even more opaque with the introduction of private rooms. 369 00:19:06,760 --> 00:19:09,240 Speaker 2: These rooms allow firms to control who they trade with 370 00:19:09,359 --> 00:19:12,840 Speaker 2: and the ability to hide big equity deals from impacting prices. 371 00:19:12,920 --> 00:19:13,280 Speaker 2: For more. 372 00:19:13,280 --> 00:19:15,880 Speaker 3: We were joined by Katherine Dority, Bloomberg Finance reporter when 373 00:19:15,880 --> 00:19:18,080 Speaker 3: we first asked Catherine to remind us what dark holes 374 00:19:18,200 --> 00:19:18,680 Speaker 3: even are. 375 00:19:19,080 --> 00:19:20,919 Speaker 7: So the name is nefarious. 376 00:19:20,960 --> 00:19:23,760 Speaker 10: It sounds like there's something evil going on, but all 377 00:19:23,800 --> 00:19:27,600 Speaker 10: it really is is trying to show is the trading 378 00:19:27,640 --> 00:19:31,840 Speaker 10: that is happening off the large exchanges. That are the 379 00:19:31,880 --> 00:19:35,119 Speaker 10: lit venues that you see the trading and all the 380 00:19:35,160 --> 00:19:38,840 Speaker 10: activity happening in real time. The trading that happens off 381 00:19:38,840 --> 00:19:41,919 Speaker 10: the New York Stock Exchange off Nasdaq in these alternative 382 00:19:41,920 --> 00:19:43,600 Speaker 10: trading systems, those. 383 00:19:43,359 --> 00:19:45,400 Speaker 7: Are the proverbial dark pools. 384 00:19:45,760 --> 00:19:49,680 Speaker 10: So the trend that I've been tracking is this introduction 385 00:19:50,200 --> 00:19:53,240 Speaker 10: in the last few years of private rooms, and all 386 00:19:53,280 --> 00:19:57,400 Speaker 10: this is is segmented. It's the ability to choose who 387 00:19:57,480 --> 00:20:01,879 Speaker 10: you're interacting with and where within these dark pools. So 388 00:20:02,160 --> 00:20:04,040 Speaker 10: in many ways you can think about it as the 389 00:20:04,119 --> 00:20:05,200 Speaker 10: darker version of. 390 00:20:05,160 --> 00:20:05,840 Speaker 7: The dark pool. 391 00:20:06,160 --> 00:20:10,520 Speaker 2: What percentage of volume an equity volume is in dark 392 00:20:10,520 --> 00:20:11,840 Speaker 2: pools broadly defined. 393 00:20:11,720 --> 00:20:14,200 Speaker 10: So for the first time, off exchange trading in dark 394 00:20:14,200 --> 00:20:18,120 Speaker 10: pools has actually surpassed fifty percent, so it's become the majority, 395 00:20:18,119 --> 00:20:20,280 Speaker 10: and that was by the end of last year. So 396 00:20:20,560 --> 00:20:25,280 Speaker 10: that's another significant trend. The percentage of private room trading, 397 00:20:25,520 --> 00:20:28,760 Speaker 10: that's the big question mark, because these alternative trading systems 398 00:20:29,080 --> 00:20:32,800 Speaker 10: don't need to break out the volumes within their private rooms. 399 00:20:33,040 --> 00:20:36,880 Speaker 10: They disclose that they have private rooms, but the number 400 00:20:36,920 --> 00:20:41,480 Speaker 10: of private rooms and how much volume is actually happening trading. 401 00:20:41,240 --> 00:20:44,800 Speaker 7: Within them, that is not disclosed. So it's a big 402 00:20:44,880 --> 00:20:45,520 Speaker 7: question mark. 403 00:20:45,560 --> 00:20:48,520 Speaker 10: And when you're trading on an alternative trading system, you 404 00:20:48,640 --> 00:20:52,880 Speaker 10: may have access to ninety percent of the liquidity within 405 00:20:52,920 --> 00:20:55,800 Speaker 10: this pool because all of the trading that happens within 406 00:20:55,800 --> 00:20:58,240 Speaker 10: a private room you may not have access to. 407 00:20:59,000 --> 00:21:01,439 Speaker 3: So okay, so what are the pros and cons? So 408 00:21:01,480 --> 00:21:04,000 Speaker 3: clearly not having access to liquidity would be a con 409 00:21:04,080 --> 00:21:06,119 Speaker 3: right or not knowing what all the liquidity is. What's 410 00:21:06,200 --> 00:21:06,840 Speaker 3: the pro here? 411 00:21:07,040 --> 00:21:09,919 Speaker 10: So the users of these private rooms, the benefit that 412 00:21:09,960 --> 00:21:13,879 Speaker 10: they cite is the specificity of who you're interacting with. 413 00:21:14,200 --> 00:21:17,159 Speaker 10: It can provide certainty in terms of the quality of 414 00:21:17,280 --> 00:21:20,399 Speaker 10: trading that you're looking for. So if I say I 415 00:21:20,480 --> 00:21:23,000 Speaker 10: want to interact with Alex because I know Alex is 416 00:21:23,040 --> 00:21:24,959 Speaker 10: going to give me the best execution and I'm going 417 00:21:25,000 --> 00:21:27,320 Speaker 10: to get the best price for a certain order, this 418 00:21:27,359 --> 00:21:31,120 Speaker 10: could be because I know that you Alex can fulfill 419 00:21:31,280 --> 00:21:34,280 Speaker 10: a certain size order, or maybe it's the speed at 420 00:21:34,280 --> 00:21:36,520 Speaker 10: which I need to fill this order. If I know 421 00:21:36,800 --> 00:21:40,520 Speaker 10: that there's a particular either firm or number of firms, 422 00:21:40,520 --> 00:21:44,240 Speaker 10: it could be multiple firms in one private room, that 423 00:21:44,320 --> 00:21:47,720 Speaker 10: certainty can actually be quite comforting for a broker that's 424 00:21:47,760 --> 00:21:51,639 Speaker 10: trying to fulfill on behalf of their investor client a 425 00:21:51,640 --> 00:21:53,600 Speaker 10: big order that they don't want to send to a 426 00:21:53,640 --> 00:21:56,200 Speaker 10: public stock exchange. 427 00:21:56,280 --> 00:22:00,160 Speaker 2: An investor order comes in, well, all right, I'm I'm 428 00:22:00,200 --> 00:22:03,000 Speaker 2: the buy side client. A I want to go to 429 00:22:03,040 --> 00:22:05,080 Speaker 2: a private room. Do I go through my broker dealer, 430 00:22:05,119 --> 00:22:07,320 Speaker 2: whether it's Goldman, Saxomorg instantly and they get me into 431 00:22:07,320 --> 00:22:08,840 Speaker 2: the private room, or do I go directly into the 432 00:22:08,840 --> 00:22:09,360 Speaker 2: private room. 433 00:22:09,440 --> 00:22:11,560 Speaker 10: So, if you there are the investor, you're just sending 434 00:22:11,600 --> 00:22:14,320 Speaker 10: your order and you're broker's executing. It's up to the broker, 435 00:22:14,640 --> 00:22:18,520 Speaker 10: And many times it's the broker's algos that actually have 436 00:22:18,680 --> 00:22:22,640 Speaker 10: these private rooms set and they in an automated process. 437 00:22:22,720 --> 00:22:25,240 Speaker 7: It might go straight to the private. 438 00:22:25,000 --> 00:22:28,560 Speaker 10: Room within the alternative trading system, or it could go 439 00:22:28,600 --> 00:22:31,480 Speaker 10: to the exchange. It all depends on again, the size 440 00:22:31,520 --> 00:22:34,920 Speaker 10: of the trade, the speed. Really you're what you're trying 441 00:22:34,920 --> 00:22:36,760 Speaker 10: to do? What is your endgame? What is your goal? 442 00:22:37,520 --> 00:22:40,560 Speaker 3: So if I don't have access, though, am I losing out? 443 00:22:41,160 --> 00:22:42,600 Speaker 3: Like if I'm just trading on the regular world and 444 00:22:42,640 --> 00:22:46,639 Speaker 3: nicey like, am I losing speed or money or trade 445 00:22:46,720 --> 00:22:47,639 Speaker 3: or is it just different? 446 00:22:47,880 --> 00:22:49,720 Speaker 7: So it's the big question mark. 447 00:22:50,359 --> 00:22:52,719 Speaker 10: One of the firms that I profiled in my story 448 00:22:52,760 --> 00:22:57,080 Speaker 10: today is a minority owned broker dealer and they specifically 449 00:22:57,160 --> 00:23:00,119 Speaker 10: are looking to interact with other minority broker dealers. So 450 00:23:00,119 --> 00:23:03,080 Speaker 10: there is a room set up with only minority owned 451 00:23:03,160 --> 00:23:03,960 Speaker 10: broker dealers. 452 00:23:04,160 --> 00:23:06,480 Speaker 7: So that use case is very specific. 453 00:23:07,320 --> 00:23:10,040 Speaker 10: Obviously, if you're not a minority owned broker dealer, you 454 00:23:10,080 --> 00:23:13,080 Speaker 10: may not be invited into that room. And whether or 455 00:23:13,080 --> 00:23:16,440 Speaker 10: not that is a big con whether or not those 456 00:23:16,560 --> 00:23:19,480 Speaker 10: trades that you don't have access to are going to 457 00:23:19,560 --> 00:23:23,919 Speaker 10: impact your experience. It's still a very small sliver of 458 00:23:23,960 --> 00:23:27,719 Speaker 10: the market. The ATS is the firms that are running 459 00:23:27,800 --> 00:23:30,520 Speaker 10: these off exchange venues that I talk to in trying 460 00:23:30,560 --> 00:23:33,800 Speaker 10: to understand the actual volumes that are happening within these 461 00:23:33,840 --> 00:23:34,560 Speaker 10: private rooms. 462 00:23:34,920 --> 00:23:36,080 Speaker 7: It's very small. 463 00:23:36,160 --> 00:23:39,320 Speaker 10: It's some of them are citing five percent, it's less 464 00:23:39,359 --> 00:23:40,760 Speaker 10: than ten percent overall. 465 00:23:41,160 --> 00:23:45,760 Speaker 7: So when you think about the bigger picture here, it's. 466 00:23:45,600 --> 00:23:47,879 Speaker 10: Not as if you're losing out on half of the 467 00:23:47,920 --> 00:23:51,919 Speaker 10: trading that is occurring off exchange by no means. The 468 00:23:52,040 --> 00:23:55,359 Speaker 10: question becomes, as this trend grows and we are seeing 469 00:23:55,400 --> 00:23:59,280 Speaker 10: at pick up momentum, will it then start to impact 470 00:23:59,400 --> 00:24:01,760 Speaker 10: trading ex and then some of your questions that you're 471 00:24:01,760 --> 00:24:04,680 Speaker 10: bringing up alex those will need to be asked and 472 00:24:05,119 --> 00:24:06,520 Speaker 10: hopefully answered over time. 473 00:24:07,560 --> 00:24:09,600 Speaker 2: A big part of my job was taking the sales 474 00:24:09,600 --> 00:24:11,160 Speaker 2: trader from Alliance after drinks at night. 475 00:24:11,960 --> 00:24:14,000 Speaker 3: That you can still do that. 476 00:24:14,119 --> 00:24:15,720 Speaker 2: I don't know if you're in a dark pool, I 477 00:24:15,720 --> 00:24:17,280 Speaker 2: don't know who's who, I don't know what's going on. 478 00:24:17,280 --> 00:24:20,040 Speaker 2: I could just walk across the street, my guide Alliance, 479 00:24:20,280 --> 00:24:22,280 Speaker 2: Big Account take them out for drinks. 480 00:24:22,400 --> 00:24:22,800 Speaker 8: Booms. 481 00:24:23,400 --> 00:24:26,040 Speaker 10: The relationships and the drinks they still do matter. 482 00:24:26,200 --> 00:24:28,320 Speaker 3: So maybe you're going off for a drink with someone 483 00:24:28,600 --> 00:24:31,200 Speaker 3: in your private rooms in the It's true. 484 00:24:31,640 --> 00:24:33,040 Speaker 2: That's a big part of my game back. 485 00:24:32,920 --> 00:24:33,280 Speaker 5: In the day. 486 00:24:33,359 --> 00:24:35,840 Speaker 7: No relationship. Relationships are still. 487 00:24:35,640 --> 00:24:37,480 Speaker 2: The name of the game our thanks to Catherine Dherty, 488 00:24:37,520 --> 00:24:38,600 Speaker 2: Bloomberg Finance reporter. 489 00:24:38,880 --> 00:24:40,719 Speaker 3: Coming up in the program, I'll look at how China's 490 00:24:40,720 --> 00:24:42,720 Speaker 3: on the verge of taking over the auto industry. 491 00:24:42,920 --> 00:24:45,679 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 492 00:24:45,680 --> 00:24:47,920 Speaker 2: depth research and data on two thousand companies and one 493 00:24:47,960 --> 00:24:50,680 Speaker 2: hundred and thirty industries. You can ask the Bloomberg Intelligence 494 00:24:50,720 --> 00:24:53,400 Speaker 2: v B. I go on the terminal, I'll Paul Swingey. 495 00:24:53,080 --> 00:24:55,160 Speaker 3: And a Malex Steel and this is Bloomberg. 496 00:25:01,680 --> 00:25:05,600 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program 497 00:25:05,680 --> 00:25:08,560 Speaker 1: live weekdays at ten a m. Eastern on Apple Corplay 498 00:25:08,600 --> 00:25:11,360 Speaker 1: and Android Auto with the Bloomberg Business app. You can 499 00:25:11,400 --> 00:25:14,879 Speaker 1: also listen live on Amazon Alexa from our flagship New 500 00:25:14,960 --> 00:25:18,680 Speaker 1: York station. Just say Alexa Play Bloomberg eleven thirty. 501 00:25:19,760 --> 00:25:22,280 Speaker 3: Each week we look at research from Bloomberg n EF 502 00:25:22,280 --> 00:25:25,040 Speaker 3: previously known as New Energy Finance. They're the team at 503 00:25:25,040 --> 00:25:28,200 Speaker 3: Bloomberg that tracks and analyzes the energy transition from commodities 504 00:25:28,240 --> 00:25:31,560 Speaker 3: to power, transport, industries, buildings, and ag sectors. 505 00:25:32,000 --> 00:25:34,399 Speaker 2: This week, we looked at the consequence of President Donald 506 00:25:34,400 --> 00:25:37,680 Speaker 2: Trump's America First Investment policy on the US energy landscape. 507 00:25:37,720 --> 00:25:40,200 Speaker 3: For instance, one hundred and eleven percent of planned US 508 00:25:40,280 --> 00:25:43,840 Speaker 3: battery production is controlled by China linked firms, and Trump's 509 00:25:43,880 --> 00:25:46,320 Speaker 3: policy makes it harder for Chinese firms to invest in 510 00:25:46,359 --> 00:25:46,840 Speaker 3: the US. 511 00:25:47,119 --> 00:25:50,280 Speaker 2: As a result, efforts to scale domestic clean tech manufacturing 512 00:25:50,320 --> 00:25:52,520 Speaker 2: may be hindered for more. We were joined by Derek 513 00:25:52,560 --> 00:25:55,800 Speaker 2: flakel BNF Lead US Policy annolyst. 514 00:25:55,840 --> 00:25:58,000 Speaker 3: We first asked Derek to break down how President Trump's 515 00:25:58,000 --> 00:26:00,600 Speaker 3: new policies on investment differ from than Biden administration. 516 00:26:00,760 --> 00:26:02,840 Speaker 11: A lot of the Biden administration's policy was an attempt 517 00:26:02,840 --> 00:26:05,480 Speaker 11: to sort of catch up with that investment in technological 518 00:26:05,600 --> 00:26:07,680 Speaker 11: edge that China has, or at least compete with it better. 519 00:26:08,280 --> 00:26:10,960 Speaker 11: But the Trump administration has imposed a new policy that 520 00:26:11,040 --> 00:26:12,919 Speaker 11: might make that a little bit more complicated. When you 521 00:26:12,960 --> 00:26:15,520 Speaker 11: have firms like byd or Ghoshen in the battery space 522 00:26:15,720 --> 00:26:17,840 Speaker 11: that are sort of the technological leaders in this area, 523 00:26:18,080 --> 00:26:20,159 Speaker 11: you might think it might benefit the US economy to 524 00:26:20,200 --> 00:26:23,040 Speaker 11: have some additional investment from those companies have some technology 525 00:26:23,040 --> 00:26:25,440 Speaker 11: transfer that comes along with that. But Trump recently passed 526 00:26:25,480 --> 00:26:28,000 Speaker 11: in America First Investment policy which is designed to make 527 00:26:28,040 --> 00:26:31,080 Speaker 11: that more difficult due to the sort of growing bipartisan 528 00:26:31,080 --> 00:26:33,080 Speaker 11: security concerns around China, and there's a bit of a 529 00:26:33,080 --> 00:26:36,320 Speaker 11: trade off here. Will Trump wants reindustrialization and reinvestment in 530 00:26:36,359 --> 00:26:39,120 Speaker 11: the US. At one point, he suggested that Chinese factories 531 00:26:39,160 --> 00:26:41,159 Speaker 11: might set up in the US rather than Mexico. What 532 00:26:41,240 --> 00:26:43,560 Speaker 11: he's actually doing in practice is making that more challenging. 533 00:26:43,840 --> 00:26:48,399 Speaker 2: So what is the solution here for investment? What are 534 00:26:48,400 --> 00:26:51,879 Speaker 2: the American companies saying about their ability to meet demands 535 00:26:52,000 --> 00:26:55,680 Speaker 2: within the clean tech food chain here in the US. 536 00:26:56,280 --> 00:26:58,439 Speaker 11: Well, I think classically there's always a bit of a 537 00:26:58,440 --> 00:27:02,040 Speaker 11: division between who you're talking with import competing industries versus 538 00:27:02,040 --> 00:27:04,720 Speaker 11: import reliant industries. But a lot of the factories in 539 00:27:04,760 --> 00:27:06,920 Speaker 11: the US that are setting up in practice these are 540 00:27:07,160 --> 00:27:09,280 Speaker 11: the sort of end of the food chain. We're talking 541 00:27:09,320 --> 00:27:13,760 Speaker 11: assembling solar modules from imported ingots and wafers, or assembling 542 00:27:13,840 --> 00:27:16,200 Speaker 11: evs from some degree of imported parts, although the EV 543 00:27:16,280 --> 00:27:17,960 Speaker 11: supply chain is rather more domestic. 544 00:27:18,480 --> 00:27:20,160 Speaker 5: So depending on. 545 00:27:20,119 --> 00:27:21,840 Speaker 11: Which part of the industry you're talking about, they're going 546 00:27:21,880 --> 00:27:26,200 Speaker 11: to be looking positively or negatively at this order that set. 547 00:27:26,280 --> 00:27:29,120 Speaker 11: It's important to note that current rules still allow joint 548 00:27:29,200 --> 00:27:32,480 Speaker 11: ventures and licensing deals. Some companies, like FORB, we're counting 549 00:27:32,480 --> 00:27:34,840 Speaker 11: on using those kinds of deals to try and build 550 00:27:34,920 --> 00:27:38,080 Speaker 11: up their own technological edge and compete better. So I 551 00:27:38,119 --> 00:27:41,840 Speaker 11: think there is an understanding that companies want investment, they 552 00:27:41,880 --> 00:27:44,640 Speaker 11: want a clean, predictable environment. To some extent. This order 553 00:27:44,640 --> 00:27:47,280 Speaker 11: does try to answer those concerns by making it easier 554 00:27:47,320 --> 00:27:50,320 Speaker 11: to mitigate against some of the foreign investment concerns that 555 00:27:50,359 --> 00:27:52,720 Speaker 11: are regulated by say the Committee and Foreign Investment in 556 00:27:52,760 --> 00:27:55,440 Speaker 11: the US Sciphius. But at the end of the day, 557 00:27:55,480 --> 00:27:58,399 Speaker 11: I think this is one additional element of uncertainty in 558 00:27:58,480 --> 00:28:01,080 Speaker 11: one that's increasingly defined uncertainty. 559 00:28:01,240 --> 00:28:03,919 Speaker 3: If clean tech wasn't a word, if it was just 560 00:28:03,960 --> 00:28:06,800 Speaker 3: like tech, what would this be different? Or is the 561 00:28:06,800 --> 00:28:09,080 Speaker 3: fact that the words clean on it changes the dynamic. 562 00:28:10,080 --> 00:28:12,520 Speaker 11: I think you've seen broader sort of concerns in the 563 00:28:12,600 --> 00:28:16,080 Speaker 11: government community about Chinese investments. Certainly you hear about that 564 00:28:16,119 --> 00:28:20,920 Speaker 11: and chips, anything cybersecurity related. Technically speaking, a major trade 565 00:28:20,960 --> 00:28:23,520 Speaker 11: barrier is the connected cars rule of the Biden administration 566 00:28:23,560 --> 00:28:27,679 Speaker 11: impost saying no cars with Chinese navigational or connectivity of 567 00:28:27,720 --> 00:28:30,000 Speaker 11: software can be sold in the US market after twenty 568 00:28:30,000 --> 00:28:33,119 Speaker 11: twenty six. So I think the fact that energy is 569 00:28:33,119 --> 00:28:35,360 Speaker 11: a sort of critical sector and is specifically called out 570 00:28:35,359 --> 00:28:38,160 Speaker 11: as such in this order makes it especially sensitive. But 571 00:28:38,160 --> 00:28:40,720 Speaker 11: there's a variety of other strategic sectors where these sensitivities 572 00:28:40,760 --> 00:28:41,280 Speaker 11: also apply. 573 00:28:41,920 --> 00:28:45,440 Speaker 2: And Derek, I guess the reality, though, is that the Chinese, 574 00:28:46,040 --> 00:28:48,160 Speaker 2: in fact, are way ahead of the rest of the 575 00:28:48,160 --> 00:28:51,040 Speaker 2: world in terms of technology, so that makes it even 576 00:28:51,120 --> 00:28:54,600 Speaker 2: more difficult. What's the solution there. 577 00:28:54,920 --> 00:28:57,640 Speaker 11: Well, something the Order tries to do is compensate for 578 00:28:57,680 --> 00:29:00,800 Speaker 11: that by making it easier for unspecified US allies and 579 00:29:00,840 --> 00:29:03,720 Speaker 11: partners to invest in the US. This could include say 580 00:29:03,760 --> 00:29:05,800 Speaker 11: Japan and Korea, which are some of the other leaders 581 00:29:05,840 --> 00:29:08,440 Speaker 11: in the sector. But at the same time, that's complicated 582 00:29:08,440 --> 00:29:10,280 Speaker 11: by the fact that one there's no current list of 583 00:29:10,320 --> 00:29:13,200 Speaker 11: allies and partners and right now all those traditional alliances 584 00:29:13,200 --> 00:29:16,440 Speaker 11: and partnerships are complicated by the trade war, and two 585 00:29:17,040 --> 00:29:20,960 Speaker 11: there's not a specific set of circumstances under which those 586 00:29:20,960 --> 00:29:23,400 Speaker 11: allies and partners can get a guarantee that they'll be 587 00:29:23,600 --> 00:29:26,960 Speaker 11: allowed in. It specifically says that if there's partnerships with 588 00:29:27,040 --> 00:29:30,560 Speaker 11: Chinese companies by these US allied and partner companies, then 589 00:29:30,560 --> 00:29:34,360 Speaker 11: that could complicate their investment climate. And since places like 590 00:29:34,400 --> 00:29:39,960 Speaker 11: Panasonic or asc from Japan, or Skon LG Energy Solution 591 00:29:40,000 --> 00:29:43,200 Speaker 11: from Korea, they have commercial relationships in China, right maybe 592 00:29:43,200 --> 00:29:45,800 Speaker 11: that's supply chain, maybe that's consumption, and it's not totally 593 00:29:45,800 --> 00:29:49,040 Speaker 11: clear which of those relationships would be considered prejudicial to 594 00:29:49,200 --> 00:29:50,840 Speaker 11: their getting permission to set up in the US. 595 00:29:51,000 --> 00:29:53,880 Speaker 3: Hey Derek, what areas of the clean tech area space? 596 00:29:54,240 --> 00:29:56,600 Speaker 3: Is the US doing well in and investing the right 597 00:29:56,680 --> 00:29:59,720 Speaker 3: kind of money and like the sectors developing right? 598 00:30:00,000 --> 00:30:02,160 Speaker 11: I think that's a great question. I think, first of all, 599 00:30:02,160 --> 00:30:05,560 Speaker 11: you can sort of separate deployment and manufacturing. Deployment wise, 600 00:30:05,600 --> 00:30:08,840 Speaker 11: we're seeing an absolute boom and battery installations, solar installations, 601 00:30:09,080 --> 00:30:10,720 Speaker 11: things like wind are a little bit more affected by 602 00:30:10,720 --> 00:30:15,840 Speaker 11: interest rates, uncertainty, things like that. On the supply chain side, 603 00:30:15,920 --> 00:30:19,160 Speaker 11: there's definitely been a huge boom in battery manufacturing and 604 00:30:19,200 --> 00:30:22,680 Speaker 11: related EV investments, but as we mentioned, there's a lot 605 00:30:22,720 --> 00:30:24,760 Speaker 11: of sort of foreign involvement in those supply chains which 606 00:30:24,760 --> 00:30:27,840 Speaker 11: could be a little bitpacted by this. Lastly, I think 607 00:30:27,880 --> 00:30:31,200 Speaker 11: there are some US grown technologies, especially those related to 608 00:30:31,880 --> 00:30:34,640 Speaker 11: spin offs of oil and gas drilling for of O 609 00:30:34,840 --> 00:30:36,840 Speaker 11: energy and geothermal. He's a lot of those techniques for 610 00:30:36,880 --> 00:30:40,360 Speaker 11: geothermal drilling. Those are doing fairly well, but they're earlier 611 00:30:40,400 --> 00:30:43,040 Speaker 11: on and they're not necessarily as determinative of progress in 612 00:30:43,080 --> 00:30:45,440 Speaker 11: the energy transition right now as some of these traditional 613 00:30:45,520 --> 00:30:46,480 Speaker 11: legacy technologies. 614 00:30:46,720 --> 00:30:50,520 Speaker 2: Hey Derek, we're only two months into the second Trump administration. 615 00:30:50,640 --> 00:30:53,719 Speaker 2: But is there any consensus in your world of policy 616 00:30:54,160 --> 00:30:57,160 Speaker 2: as to whether this administration is going to be helpful 617 00:30:57,360 --> 00:31:01,240 Speaker 2: or not helpful as it relates to, you know, economic 618 00:31:01,280 --> 00:31:02,520 Speaker 2: policy in. 619 00:31:02,520 --> 00:31:05,840 Speaker 11: Green I think if we're talking about economic policy with 620 00:31:06,000 --> 00:31:09,640 Speaker 11: respect to clean energy, I think that you have to 621 00:31:09,680 --> 00:31:13,640 Speaker 11: look at the sort of broader macroeconomic uncertainties surrounding tariffs, 622 00:31:13,640 --> 00:31:17,600 Speaker 11: the impacts on interest rates. I think that creates a 623 00:31:17,600 --> 00:31:20,160 Speaker 11: bit of a cloud under all kinds of capital and 624 00:31:20,200 --> 00:31:22,920 Speaker 11: tons of investments. At the same time, there's been no 625 00:31:23,040 --> 00:31:25,320 Speaker 11: strong focus on and all of the above energy strategy 626 00:31:25,440 --> 00:31:27,680 Speaker 11: trying to support the data center build out, And while 627 00:31:27,800 --> 00:31:30,560 Speaker 11: the actions so far have concentrated heavily on oil and 628 00:31:30,600 --> 00:31:34,120 Speaker 11: gas and related infrastructure fossil fuel power plants, there is 629 00:31:34,440 --> 00:31:38,040 Speaker 11: sort of the inkling or political room for continued support 630 00:31:38,120 --> 00:31:41,080 Speaker 11: of supply expansion by all means, which, based on the 631 00:31:41,120 --> 00:31:44,959 Speaker 11: sort of interconnection cues the big expected load growth from 632 00:31:45,040 --> 00:31:49,000 Speaker 11: data centers and more, seems reasonably likely. However, it is 633 00:31:49,040 --> 00:31:50,600 Speaker 11: only two months in and I think we've really got 634 00:31:50,600 --> 00:31:52,760 Speaker 11: a wait to see how this situation develops, in which 635 00:31:52,760 --> 00:31:55,160 Speaker 11: factions of the Trump administration are more dominant in the 636 00:31:55,160 --> 00:31:55,840 Speaker 11: longer run. 637 00:31:55,680 --> 00:31:59,280 Speaker 3: All right, thanks to Derek flakel Bloomberg BANNI lead US policy. 638 00:31:58,920 --> 00:32:02,320 Speaker 2: Analystlomberg Big Takes. Story we focused on this week was 639 00:32:02,480 --> 00:32:06,080 Speaker 2: entitled China's Auto industry is Already taking over the world. 640 00:32:06,320 --> 00:32:08,600 Speaker 2: You can find it on Bloomberg dot Com and the Terminal. 641 00:32:08,760 --> 00:32:10,360 Speaker 3: The story looks at how China is on the verge 642 00:32:10,360 --> 00:32:12,160 Speaker 3: of taking over the auto industry from its rise and 643 00:32:12,200 --> 00:32:15,360 Speaker 3: electric vehicles. For more, we spoke at Chester Dawson, Bloomberg 644 00:32:15,360 --> 00:32:16,040 Speaker 3: Senior editor. 645 00:32:16,240 --> 00:32:18,640 Speaker 2: We first asked Chester about how much of the global 646 00:32:18,640 --> 00:32:20,440 Speaker 2: auto market China has right now. 647 00:32:20,840 --> 00:32:23,520 Speaker 12: It's starting from a very small base, but it's growing 648 00:32:23,600 --> 00:32:28,760 Speaker 12: very rapidly, so it's basically about three percent, but it's 649 00:32:28,800 --> 00:32:31,880 Speaker 12: forecast to grow by leaps and bounds over the next 650 00:32:31,880 --> 00:32:34,200 Speaker 12: few years. And it's really amazing when you look at 651 00:32:34,440 --> 00:32:38,320 Speaker 12: particular markets where they have a thirty percent share, like 652 00:32:38,320 --> 00:32:42,200 Speaker 12: in Chile or in Russia, where for obvious reasons, most 653 00:32:42,200 --> 00:32:45,000 Speaker 12: of the competitions pulled out, they've got over three quarters 654 00:32:45,000 --> 00:32:48,520 Speaker 12: of the market. So those are obviously, you know, kind 655 00:32:48,520 --> 00:32:53,920 Speaker 12: of outlier examples, but slowly, yet surely, almost everywhere around 656 00:32:53,960 --> 00:32:59,000 Speaker 12: the grow, particularly in emerging markets. The Chinese are gaining 657 00:32:59,000 --> 00:33:02,200 Speaker 12: more market share, gaining momentum, and often undercutting the more 658 00:33:02,320 --> 00:33:05,240 Speaker 12: established rivals. Obviously the big exception there is the US, 659 00:33:05,320 --> 00:33:07,560 Speaker 12: But elsewhere you're seeing tremendous growth. 660 00:33:07,880 --> 00:33:12,160 Speaker 2: So what has been the response by the western auto 661 00:33:12,240 --> 00:33:14,920 Speaker 2: manufactured something in the Volkswagens and the Fords of the world. 662 00:33:14,960 --> 00:33:16,760 Speaker 2: What are they doing or how are they responding to 663 00:33:16,760 --> 00:33:17,880 Speaker 2: this growth by China? 664 00:33:17,960 --> 00:33:21,480 Speaker 12: Well, it's really twofold in their home markets. Obviously, they've 665 00:33:21,640 --> 00:33:27,720 Speaker 12: sought protection by lobbying for various protectionist barriers. In many cases, 666 00:33:27,720 --> 00:33:30,240 Speaker 12: the argument is, hey, we just need a few years 667 00:33:30,240 --> 00:33:32,080 Speaker 12: of breathing room until we can get up to speed 668 00:33:32,200 --> 00:33:34,920 Speaker 12: and have a more competitive product. But we've kind of 669 00:33:34,920 --> 00:33:39,320 Speaker 12: seen how that works historically, and it's not always a 670 00:33:39,360 --> 00:33:43,880 Speaker 12: silver bullet outside of the industrialized world, because Canada and 671 00:33:44,240 --> 00:33:47,120 Speaker 12: even the U has been drawing up the drug verge 672 00:33:47,160 --> 00:33:49,960 Speaker 12: a bit for Chinese made vehicles. But you know, in 673 00:33:50,040 --> 00:33:52,520 Speaker 12: much of the rest of the world, where growth is 674 00:33:52,520 --> 00:33:56,760 Speaker 12: often fastest, the Chinese are making really impressive head roads, 675 00:33:57,120 --> 00:34:00,720 Speaker 12: and the you know, established automakers are not sitting on 676 00:34:00,760 --> 00:34:04,840 Speaker 12: their hands. They're you know, they're often trying to beat 677 00:34:04,880 --> 00:34:08,120 Speaker 12: the Chinese on price or you know, use their better 678 00:34:08,239 --> 00:34:13,320 Speaker 12: brand name, recognition and credibility, and often and sometimes working 679 00:34:13,360 --> 00:34:17,880 Speaker 12: with local dealers to pressure governments in places like say Brazil, 680 00:34:18,400 --> 00:34:21,239 Speaker 12: to throw up their own barriers that lunt some of 681 00:34:21,280 --> 00:34:22,800 Speaker 12: the in roads being made by Chinese. 682 00:34:23,000 --> 00:34:25,719 Speaker 3: This would be a silly question, but are Chinese carmakers 683 00:34:25,800 --> 00:34:29,480 Speaker 3: displacing European and US carmakers or is this like expanding 684 00:34:29,640 --> 00:34:31,000 Speaker 3: general auto market share. 685 00:34:31,680 --> 00:34:34,600 Speaker 12: You know, that's a really good question. I think it's both. 686 00:34:34,800 --> 00:34:40,560 Speaker 12: I mean, you're not seeing growth so fast that the 687 00:34:40,600 --> 00:34:43,440 Speaker 12: pies expanded to the point where everybody's getting a bit 688 00:34:43,480 --> 00:34:46,480 Speaker 12: of it. You are seeing erosion. It's not true everywhere, 689 00:34:46,520 --> 00:34:51,480 Speaker 12: but take Thailand. That's a perfect example of where that 690 00:34:51,640 --> 00:34:56,360 Speaker 12: was basically owned by the Japanese for decades, and you 691 00:34:56,360 --> 00:34:59,000 Speaker 12: know there were other automakers, Ford and others sell there too, 692 00:34:59,040 --> 00:35:02,239 Speaker 12: but it was basically no is kind of Japan's backyard 693 00:35:02,280 --> 00:35:06,240 Speaker 12: and where companies like to to sold tremendous numbers of vehicles. 694 00:35:06,719 --> 00:35:10,520 Speaker 12: The Chinese have really started to eat their lunch, so 695 00:35:10,640 --> 00:35:12,520 Speaker 12: that's happened, and you know you can see that a 696 00:35:12,560 --> 00:35:15,880 Speaker 12: little bit in places like South Africa and Brazil as well. 697 00:35:16,719 --> 00:35:20,200 Speaker 12: So yeah, the pie is still growing, but not that 698 00:35:20,640 --> 00:35:24,160 Speaker 12: not enough for everybody to gorge equally, and truly the 699 00:35:24,239 --> 00:35:26,080 Speaker 12: Chinese that are picking out, so to. 700 00:35:26,040 --> 00:35:30,080 Speaker 2: Speak, house equality of the Chinese cars. I remember when 701 00:35:30,080 --> 00:35:32,160 Speaker 2: the Japanese cars came into the US in the seventies 702 00:35:32,160 --> 00:35:34,000 Speaker 2: and eighties, the quality it was just a lot better. 703 00:35:34,120 --> 00:35:35,880 Speaker 2: It was one of the reasons they were able to 704 00:35:35,880 --> 00:35:37,600 Speaker 2: get shared. How about the Chinese quality. 705 00:35:38,120 --> 00:35:40,640 Speaker 12: That's an excellent point too, because for years the Chinese 706 00:35:40,680 --> 00:35:43,120 Speaker 12: have kind of labored under the impression that their cars 707 00:35:43,120 --> 00:35:48,400 Speaker 12: are junk, and you know, that was true until fairly recently. However, 708 00:35:49,000 --> 00:35:52,160 Speaker 12: in recent years, the Chinese have caught up and in 709 00:35:52,200 --> 00:35:55,960 Speaker 12: some cases even surpassed this technology that some of the 710 00:35:55,960 --> 00:35:59,960 Speaker 12: Western or Japanese automakers have. There's a company called Shaumi 711 00:36:00,200 --> 00:36:04,560 Speaker 12: in China that sold its first car last year and 712 00:36:05,040 --> 00:36:08,239 Speaker 12: now just bumped its capacity up to three hundred fifty 713 00:36:08,280 --> 00:36:11,000 Speaker 12: thousand a year, which is like seven times as many 714 00:36:11,040 --> 00:36:14,319 Speaker 12: as Rivian, a US startup makes. This company was making 715 00:36:14,360 --> 00:36:16,839 Speaker 12: mobile phones a couple of years ago, that was its 716 00:36:16,880 --> 00:36:18,920 Speaker 12: main claim to fame, and it's been able to move 717 00:36:18,960 --> 00:36:22,640 Speaker 12: a lot of that connectivity and technology into the confit 718 00:36:22,800 --> 00:36:25,600 Speaker 12: of the vehicle. So you're finding that not only are 719 00:36:25,719 --> 00:36:28,719 Speaker 12: Chinese cars cheaper, but oftentimes they have just as many 720 00:36:28,760 --> 00:36:33,040 Speaker 12: creature comforts, or sometimes more than the equivalent, say, GM 721 00:36:33,160 --> 00:36:35,200 Speaker 12: or Toyota or Volkswagen. All Right. 722 00:36:35,200 --> 00:36:37,440 Speaker 3: Thanks to Chester Dawson, Bloomberg Senior Editor. 723 00:36:38,040 --> 00:36:42,719 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 724 00:36:42,920 --> 00:36:46,880 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 725 00:36:47,120 --> 00:36:50,360 Speaker 1: ten am to noon Eastern on Bloomberg dot com, the 726 00:36:50,480 --> 00:36:54,360 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 727 00:36:54,360 --> 00:36:57,680 Speaker 1: can also watch us live every weekday on YouTube and 728 00:36:57,880 --> 00:36:59,800 Speaker 1: always on the Bloomberg terminal