Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
Speaker 1: with Alex Steel and Paul Sweeney.
Speaker 2: The real ap performance has been in US corporate high yield.
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Speaker 1: Breaking market headlines and corporate news from across the globe.
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Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big
Speaker 2: business series impacting Wall Street and the global markets.
Speaker 3: Each and every week we provide in depth research and
Speaker 3: data on some of the two thousand companies and in one
Speaker 3: hundred and thirty industries our end. Let's cover worldwide.
Speaker 2: Today we'll discuss Tesla's CEO Elon Musk relationship with President
Speaker 2: Donald Trump.
Speaker 3: Plus we'll look at the consequence the President Trump's America
Speaker 3: First Investment policy on the US energy landscape.
Speaker 2: But first we begin in the health and pharmaceutical space.
Speaker 3: Less than three four months into twenty twenty five, the
Speaker 3: US measle cases of outpaced last year's total, and this
Speaker 3: comes as the worrying outbreak link to multiple desks continues
Speaker 3: to spread.
Speaker 2: In other news, the drugmakers Roche and Zealand It teamed
Speaker 2: up in a five point three billion dollar pack in
Speaker 2: a bid to challenge Nova Nordisk and Eli Lilly in
Speaker 2: the booming market for obcit drugs.
Speaker 3: From where we are joined by Sam Fazelli, Boomberg Intelligence,
Speaker 3: Director of Research for Global Industries and Senior Pharmaceuticals.
Speaker 2: First asked Sam about his immune status and how concerned
Speaker 2: we should be about getting a meso vaccine booster.
Speaker 4: It's not like it's rampant and everywhere, but the reality
Speaker 4: is it worried me enough mm hmm, being all those
Speaker 4: labels you want to give me right that, I thought,
Speaker 4: let me go and see what my immune status is.
Speaker 3: I'm doing that, right. I have my blood tests in
Speaker 3: a couple of weeks, because like, why not, right?
Speaker 5: Yeah? I just you know, so exactly what have you
Speaker 5: got to lose?
Speaker 4: At least I know I know that if I am
Speaker 4: susceptible and I've got a little son, I think about
Speaker 4: being close to him or notther etcetera, etcetera.
Speaker 5: So I did that, So I think do we need
Speaker 5: all to take it? Don't? I don't think so at
Speaker 5: the minute.
Speaker 4: I don't think this is something everybody needs to rush
Speaker 4: out and get majority of people.
Speaker 5: If you were vaccinated, especially post nineteen.
Speaker 4: Sixty eight, which is all of you guys, right, you
Speaker 4: would be immune to you know, that's a very one
Speaker 4: of those vaccines that worked for a long long time.
Speaker 4: So and I think my result actually says I am immune,
Speaker 4: so I.
Speaker 5: Shouldn't worry about it. And that's where we need to be.
Speaker 4: The problem is we need ninety five percent immunity around
Speaker 4: us to benefit from the herd immunity effect. You remember
Speaker 4: that or in the pandemic we talked about that. Yeah,
Speaker 4: And that's the problem that in some states in the
Speaker 4: US is falling below that. In fact, I counted only
Speaker 4: twelve or thirteen states you can count that on the
Speaker 4: CDC website that are above the ninety five percent vaccination level.
Speaker 4: So those are low have a risk of outbreaks, and
Speaker 4: that's why we've been seeing that rate rising and infection
Speaker 4: rates have been rising since twenty seventeen eighteen. There's always
Speaker 4: some but we're dealing unfortunately with a pretty meaningful sized
Speaker 4: eye break in Texas.
Speaker 2: So deals last week Roche and the Zealand getting in
Speaker 2: on a deal. What's happening with our good friends of es.
Speaker 4: Yeah, yeah, So look, I mean we've only got two
Speaker 4: things to talk about here, infectious diseases or rubesity.
Speaker 5: Right, and this deal, this deal was the licensing deal,
Speaker 5: not MNA.
Speaker 4: So basically Roche went to this company and said, look,
Speaker 4: we're interested in your asset and we want to do
Speaker 4: a partnership. So Roach has taken on fifty to fifty
Speaker 4: up to fifty to fifty.
Speaker 5: I e.
Speaker 4: Zealand can invest in their commercialization up to a point
Speaker 4: of getting fifty percent of the profits, assuming they're putting
Speaker 4: fifty percent of the costs.
Speaker 5: Right, So, and what is it? Is it another week
Speaker 5: go VI? Is it another zep bound? No, it's not.
Speaker 4: It's a different mechanism, and it's supposed to work by
Speaker 4: giving you weight loss but helping preserve of some of
Speaker 4: the muscle mass, which I'm sure you've talked about this.
Speaker 5: So we've talked about this several times.
Speaker 4: You don't want to lose muscle and fat, You want
Speaker 4: to lose fat less muscle and that's what these amylin drugs.
Speaker 5: Potentially give you.
Speaker 4: And of course Rashi's no newcomer to this space, right
Speaker 4: But interestingly, what it does pose is in the future
Speaker 4: that we're going to be looking at you and I
Speaker 4: and Alex together, I'm sure we'll be looking talking about
Speaker 4: this forever.
Speaker 5: Is how do you decide what to give to what patients?
Speaker 5: That's what the world needs to figure out. Now.
Speaker 3: Yeah, I don't know what the answer is to that.
Speaker 3: I'm sure the companies all have their own answer.
Speaker 5: I'm coming back to you, Alex to figure it out.
Speaker 3: Okay, I believe you. When we take a look at
Speaker 3: the in the US and the level of NIH funding
Speaker 3: that is on the chopping block, what part of the
Speaker 3: industry do you think is most vulnerable to losing funding
Speaker 3: and then missing out on some research?
Speaker 5: Yep.
Speaker 4: But so Alex, if you think about and I, it's
Speaker 4: it's mostly majority of it, of course is biological right
Speaker 4: National Institute's Health. So that's where I think the cuts
Speaker 4: are coming. But it's not just about cutting people. It's
Speaker 4: still uncertain that it creates. It's been the cutting of
Speaker 4: overhead costs to universities. It is the fact that apparently
Speaker 4: there'll be no not based on what I've been looking at,
Speaker 4: but based on what I've heard, there been no patent
Speaker 4: filings by the Institute in the past few weeks, which
Speaker 4: could be stop filing patterns because it's expensive, or could
Speaker 4: be we don't want to give all our ideas away
Speaker 4: or whatever. But they are the font or found or
Speaker 4: whatever the right phrase is, sorry of future drug development,
Speaker 4: and they get lots of revenue back from it.
Speaker 5: So it is. It is worrying, and I don't like
Speaker 5: seeing what I'm seeing.
Speaker 4: Up to twenty percent of the stuff being cut, and
Speaker 4: we need a turn in this. We need to stop
Speaker 4: seeing this and so that we don't feel like science
Speaker 4: is under attack.
Speaker 2: Our thanks to Sam Fizzelli, Bloomberg Intelligence, Director of Research
Speaker 2: for Global Industries and senior pharmaceuticals analysts.
Speaker 3: This week we focus on a few Bloomberg Big Take stories,
Speaker 3: and one was titled Cancer Patients one hundred thousand dollars
Speaker 3: bill shows chaos rockinghealthcare. You can find it on Bloomberg
Speaker 3: dot Com and the Terminal.
Speaker 2: The story focuses on the insurance industry, their rise in denials,
Speaker 2: and one woman's fight to get coverage for her cancer treatment.
Speaker 5: For more.
Speaker 3: We spoke to John Tazzi, Bloomberg Healthcare reporter, and we
Speaker 3: first asked John to walk us through a story in
Speaker 3: the broader healthcare insurance industry.
Speaker 6: This is a story of a woman who is being
Speaker 6: treated for advanced breast cancer in Wisconsin and he sought
Speaker 6: prior authorization from her insurance company at United Healthcare for
Speaker 6: the treatment. She got a kind of confusing set of responses.
Speaker 6: She got two letters on the same day, one denying
Speaker 6: the authorization, another approving it. She got the treatment months later,
Speaker 6: the company to kind to pay for it. She ended
Speaker 6: up filing a lawsuit to get the treatment paid for.
Speaker 6: The company ultimately did pay for it after the lawsuit
Speaker 6: was filed after we inquired about it. But you know,
Speaker 6: what this story really exemplifies is kind of what an
Speaker 6: administrative mess the US healthcare system has become.
Speaker 2: So, I mean, you've got a stat in here which
Speaker 2: is just blows me away. The US healthcare system spends
Speaker 2: as much on billing and claims processing as it does
Speaker 2: on treating cancer. That is just extraordinary because what you
Speaker 2: have here, as reading your story, you got two big
Speaker 2: entities locking horns all the time that the provider of
Speaker 2: this of the medical procedure, and then the insurance company
Speaker 2: that has to pay for neither of them. Are you
Speaker 2: know wallflowers? They go at it, don't they.
Speaker 6: Yeah, So what we have is this adversarial system, right.
Speaker 6: You have on one side, you know, hospitals, medical provis labs.
Speaker 6: You know, we're in a free market economy where there's
Speaker 6: no restrictions on the prices they can charge. On the
Speaker 6: other side, we have the private insurers who are you know,
Speaker 6: trying to constrain costs for their clients and you know,
Speaker 6: make sure that the care given to their members is
Speaker 6: appropriate care. And you know, it's just this conflict and
Speaker 6: it's escalating. You know, we see data on insurance denials rising.
Speaker 6: We see a bunch of basically companies that have gotten
Speaker 6: into this system to help one side or the other,
Speaker 6: or in some cases both maximize their financial advantage in
Speaker 6: these transactions. So you have the sort of escalating conflict
Speaker 6: that patients are often caught in the middle of.
Speaker 3: So what's our way out of here?
Speaker 7: Good question?
Speaker 6: I mean, I think you know, some people would argue
Speaker 6: that there is you know, opportunities for technology and AI
Speaker 6: and you know, more efficient.
Speaker 3: Processes, standardized. Yeah, technically standardized practices or.
Speaker 6: You know, I mean, I think that would potentially go
Speaker 6: a long way. I mean, there's been a lot of
Speaker 6: research over a long time, over you know, over kind
Speaker 6: of how to do this. I think what you fundamentally
Speaker 6: get though, is like the system where incentives are are
Speaker 6: you know, are misaligned. Like you have one side that
Speaker 6: has an incentive to do more and to Bill Moore,
Speaker 6: and you have another inside that has incentives to kind
Speaker 6: of put up more restrictions or guardrails they might call
Speaker 6: it around around care. And you know, that's sort of increasing,
Speaker 6: and I'm not sure that there's there's sort of a
Speaker 6: clear pathway out of it right now.
Speaker 2: Well, one of my questions is what does this mean
Speaker 2: for healthcare providers? It kind of I mean, and you've
Speaker 2: got a great charting here us doctors no longer work
Speaker 2: for themselves, And it's the percent of physicians employed by
Speaker 2: hospitals or corporate entities. And that number was about sixty
Speaker 2: percent back in twenty nineteen. It's over seventy five percent today.
Speaker 2: Doctors just saying I don't I just can't deal with
Speaker 2: this stuff anymore.
Speaker 6: Yeah, And I think if you talk to physicians, you hear.
Speaker 6: You know, there's a lot of compliance and sort of
Speaker 6: like you know, investment they need to do in like
Speaker 6: over the recent years around like electronic medical records and
Speaker 6: you know, basically being a practicing physician has gotten a
Speaker 6: lot more complicated and I think in some ways a
Speaker 6: lot more expensive. In the days of just kind of
Speaker 6: hanging your shingle when you get out of med school
Speaker 6: and being a solo practitioner, those are over. The other
Speaker 6: thing is that they're you know, looking for bargaining power
Speaker 6: when they're contracting with the insurance companies. So they're joining
Speaker 6: hospital systems, they're joining big groups, they're joining private equity
Speaker 6: owned you know, practices.
Speaker 3: I guess the logical question also then becomes if they're
Speaker 3: tweaks to like entitlement programs too, Like how does that
Speaker 3: wind up affecting this whole dynamic because of their changes
Speaker 3: to medicate and medicare. I would assume that some providers
Speaker 3: will lend lose money and then it makes it harder.
Speaker 6: Yeah, I mean, I think, you know, we we will
Speaker 6: still have to see what comes out of Washington on
Speaker 6: that front. But you know, in general, I think providers
Speaker 6: will tell you that they have to charge higher prices
Speaker 6: in the private market because they are not compensated enough
Speaker 6: by government programs. I know there's a lot of dispute
Speaker 6: about that assertion as well from economists and and others,
Speaker 6: but you know it, you know, for patients, particularly in
Speaker 6: the commercial market where they you know, if you're on
Speaker 6: Medicare Medicaid, the government sets the price more or less.
Speaker 6: But if you're on a private plan, you know, those
Speaker 6: prices are set in the private market. And that's why
Speaker 6: when you know, if you do have a situation where
Speaker 6: something isn't properly covered, you can be exposed to a
Speaker 6: really expensive bill.
Speaker 2: Did your did Julie Simon's the woman in your story
Speaker 2: that you ever getting into resolution with this lawsuit here?
Speaker 6: So the claim was paid you know again after if
Speaker 6: you filed the laws, after we asked the company about it,
Speaker 6: claims were you know, so that was resolved that the
Speaker 6: lawsuit is you know, is still pendaning.
Speaker 2: Okay, all right, Thanks to John Tozzi, Bloomberg Healthcare Reporter.
Speaker 3: Coming up, we're gonna look at Wall Street's infamous dark pools.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
Speaker 2: depth research and data on two thousand companies and one
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
Speaker 2: b I go on the terminal.
Speaker 3: I'm Paul Sweeney and I'm Alex Steel, and this is Bloomberg.
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Speaker 3: We turned to Tesla's CEO, Elon Musk and his relationship
Speaker 3: with the Trump administration.
Speaker 2: Tesla stock has been suffering since it's games on election Day,
Speaker 2: and it shows that muscle relationship with President Donald Trump
Speaker 2: is hurting his portfolio.
Speaker 3: From whre, we spoke to Liam Denning Lumberg opinion columnists
Speaker 3: for his piece titled how long will Musk be Welcomed
Speaker 3: at the White House?
Speaker 2: We first asked Liam if he is surprised that Elon
Speaker 2: Musk has lasted this long at the White House?
Speaker 8: You know, not really.
Speaker 9: I mean, I know that there's this speculation that, you know,
Speaker 9: you've got these two big egos and they're bound to
Speaker 9: kind of explode in some kind of soup and over
Speaker 9: at some point, I think we do have to consider
Speaker 9: that they both still get quite a lot from this relationship.
Speaker 9: I mean, you know, Elon Musk has the era of
Speaker 9: the most powerful person in the world. He has through
Speaker 9: the doge whatever that is, he has influence over all
Speaker 9: sorts of agencies that regulate or do business with his companies.
Speaker 9: And in return, you know, President Trump gets to bask
Speaker 9: in the aura of this prominent businessman.
Speaker 8: He gets campaign dollars.
Speaker 9: You know, and he gets obviously you know, should we say,
Speaker 9: algorithmic alignment on a big social media platform.
Speaker 8: So there is still quite a ridic alignment.
Speaker 9: But we have seen, you know, I think the reason
Speaker 9: I wrote the piece is we've seen a confluence of
Speaker 9: things that point to the risks of a business person
Speaker 9: like Elon Musk tying himself this closely to you know,
Speaker 9: a pretty controversial president.
Speaker 2: Yeah, Liam put me in the camp. I was one
Speaker 2: of those folks that said, you know, Elin will probably last,
Speaker 2: his tenure will be measured in weeks, not months or years.
Speaker 2: And that looks like, at least at this early stage,
Speaker 2: I may be proven wrong, but you know, money talks here.
Speaker 2: According to Rich go On, the Bloomberg criminal must. His
Speaker 2: next net wealth is down one hundred and eighteen point
Speaker 2: six billion dollars this year. Do you think he cares?
Speaker 9: I think, you know, maybe on a kind of an
Speaker 9: ego level that matters.
Speaker 8: I mean, he's still worth you know.
Speaker 9: The last time I looked up three hundred and thirteen,
Speaker 9: so you know, he's not He's.
Speaker 8: Obviously not going to be struggling.
Speaker 9: But I think for me, you know, the big mover
Speaker 9: there is Tesla obviously, because that's the the biggest asset,
Speaker 9: it's the only really liquid one he has. You know,
Speaker 9: his own personal indebtedness is tied to that stock, and
Speaker 9: he used it, you know, to help buy.
Speaker 8: Twitter.
Speaker 9: And I think it is it is an issue because
Speaker 9: I think what's been interesting for me with what's happened
Speaker 9: with Tesla since the election. You know, obviously there was
Speaker 9: that huge Trump bump in the stock, you know, worth
Speaker 9: north of seven hundred billion dollars, which has collapsed, and
Speaker 9: in some ways I've sort of viewed that not just
Speaker 9: as a SOT price, but as an opinion poll.
Speaker 8: You know, we saw this.
Speaker 9: Really enthusiastic response, you know, based around honestly pretty nebulous
Speaker 9: ideas that Musk's closeness to Trump would somehow translate into say, like,
Speaker 9: you know, favorable autonomous driving legislation or something. But when
Speaker 9: you want, there wasn't really a whole lot there, mainly
Speaker 9: because you know, the big problem there is it's not
Speaker 9: government regulations. The fact that Tesla still doesn't have a
Speaker 9: commercial rogo taxi like that is the main problem. And
Speaker 9: in the meantime, we've seen the corrosive effects of that relationship.
Speaker 9: You know, clearly the Tesla brand is suffering in major markets.
Speaker 9: We've seen bad numbers out of Europe, We've seen bad
Speaker 9: numbers out of China or that may have less to.
Speaker 8: Do with politics and more just with straight up petition.
Speaker 9: And we've seen weakness in California, the big US EV
Speaker 9: market building through twenty twenty four, and I honestly don't
Speaker 9: expect that the past couple of months have helped with
Speaker 9: sales there either. And I think as that price comes down,
Speaker 9: it does tarnish Musk's image, it does affect him financially,
Speaker 9: and it also points to I think lasting damage if
Speaker 9: this relationship with Trump were to unravel in the same
Speaker 9: way we've seen with the businessmen previously.
Speaker 3: So I live in parks of Brooklyn. I think Liam
Speaker 3: does too. But have you seen the teslas that are
Speaker 3: you do know? I thought you live in Brooklyn.
Speaker 8: Right now, I mean suburbs.
Speaker 3: Oh he changed. Okay, he was in Brooklyn at one point.
Speaker 3: But my point of this whole conversation is in yuppie
Speaker 3: Brooklyn there are teslas parked on the street and I
Speaker 3: noticed for the first time there were signs like leaflets
Speaker 3: being put on the windshield being like cell your tesla
Speaker 3: with like a picture of Elon Musk, because like that's
Speaker 3: where the protest is, like only only in Parkslow when
Speaker 3: that actually happen. Does Musk also provide a foil for
Speaker 3: Donald Trump in terms of like Musk gets the heat
Speaker 3: Trump doesn't.
Speaker 9: Yeah, And you know, I think my read of the
Speaker 9: way Musk was brought into government in this kind of,
Speaker 9: you know, kind of slightly arms length, quasi independent role
Speaker 9: was that that gave him a lot of freedom of
Speaker 9: movement to act. It also meant he obviously avoided some
Speaker 9: of the more onerous kind of Senate hearings and that
Speaker 9: kind of thing. But I think it also gives Trump
Speaker 9: some useful distance if at some point we were to see,
Speaker 9: you know, some real blowback against I don't know, you know,
Speaker 9: cuts to entitlements or if we see you know, if
Speaker 9: we see a recession happen.
Speaker 8: We've seen Trump, you know.
Speaker 9: Very quickly, you know, lose patience with some of these
Speaker 9: people he's brought in before. You know, I'm thinking of
Speaker 9: people like the former excell and CEO Rex Tillison in
Speaker 9: the first term. Gary Khan from Goldman Sachs. Musk's in
Speaker 9: a different league, but he's also very close. He's not
Speaker 9: you know, this is a whole new level of embrace
Speaker 9: between a prominent business person and the White House.
Speaker 3: All right, Thanks to Lilliam Denning, Bloomberg opinion columnist.
Speaker 2: One Bloomberg Big Takes story we focused on this week
Speaker 2: was titled Wall Street's private rooms are making dark pools
Speaker 2: even darker. You can find it on the Bloomberg Dot
Speaker 2: and the Terminal.
Speaker 3: The story focuses on how Wall Street's dark pools are
Speaker 3: becoming even more opaque with the introduction of private rooms.
Speaker 2: These rooms allow firms to control who they trade with
Speaker 2: and the ability to hide big equity deals from impacting prices.
Speaker 2: For more.
Speaker 3: We were joined by Katherine Dority, Bloomberg Finance reporter when
Speaker 3: we first asked Catherine to remind us what dark holes
Speaker 3: even are.
Speaker 7: So the name is nefarious.
Speaker 10: It sounds like there's something evil going on, but all
Speaker 10: it really is is trying to show is the trading
Speaker 10: that is happening off the large exchanges. That are the
Speaker 10: lit venues that you see the trading and all the
Speaker 10: activity happening in real time. The trading that happens off
Speaker 10: the New York Stock Exchange off Nasdaq in these alternative
Speaker 10: trading systems, those.
Speaker 7: Are the proverbial dark pools.
Speaker 10: So the trend that I've been tracking is this introduction
Speaker 10: in the last few years of private rooms, and all
Speaker 10: this is is segmented. It's the ability to choose who
Speaker 10: you're interacting with and where within these dark pools. So
Speaker 10: in many ways you can think about it as the
Speaker 10: darker version of.
Speaker 7: The dark pool.
Speaker 2: What percentage of volume an equity volume is in dark
Speaker 2: pools broadly defined.
Speaker 10: So for the first time, off exchange trading in dark
Speaker 10: pools has actually surpassed fifty percent, so it's become the majority,
Speaker 10: and that was by the end of last year. So
Speaker 10: that's another significant trend. The percentage of private room trading,
Speaker 10: that's the big question mark, because these alternative trading systems
Speaker 10: don't need to break out the volumes within their private rooms.
Speaker 10: They disclose that they have private rooms, but the number
Speaker 10: of private rooms and how much volume is actually happening trading.
Speaker 7: Within them, that is not disclosed. So it's a big
Speaker 7: question mark.
Speaker 10: And when you're trading on an alternative trading system, you
Speaker 10: may have access to ninety percent of the liquidity within
Speaker 10: this pool because all of the trading that happens within
Speaker 10: a private room you may not have access to.
Speaker 3: So okay, so what are the pros and cons? So
Speaker 3: clearly not having access to liquidity would be a con
Speaker 3: right or not knowing what all the liquidity is. What's
Speaker 3: the pro here?
Speaker 10: So the users of these private rooms, the benefit that
Speaker 10: they cite is the specificity of who you're interacting with.
Speaker 10: It can provide certainty in terms of the quality of
Speaker 10: trading that you're looking for. So if I say I
Speaker 10: want to interact with Alex because I know Alex is
Speaker 10: going to give me the best execution and I'm going
Speaker 10: to get the best price for a certain order, this
Speaker 10: could be because I know that you Alex can fulfill
Speaker 10: a certain size order, or maybe it's the speed at
Speaker 10: which I need to fill this order. If I know
Speaker 10: that there's a particular either firm or number of firms,
Speaker 10: it could be multiple firms in one private room, that
Speaker 10: certainty can actually be quite comforting for a broker that's
Speaker 10: trying to fulfill on behalf of their investor client a
Speaker 10: big order that they don't want to send to a
Speaker 10: public stock exchange.
Speaker 2: An investor order comes in, well, all right, I'm I'm
Speaker 2: the buy side client. A I want to go to
Speaker 2: a private room. Do I go through my broker dealer,
Speaker 2: whether it's Goldman, Saxomorg instantly and they get me into
Speaker 2: the private room, or do I go directly into the
Speaker 2: private room.
Speaker 10: So, if you there are the investor, you're just sending
Speaker 10: your order and you're broker's executing. It's up to the broker,
Speaker 10: And many times it's the broker's algos that actually have
Speaker 10: these private rooms set and they in an automated process.
Speaker 7: It might go straight to the private.
Speaker 10: Room within the alternative trading system, or it could go
Speaker 10: to the exchange. It all depends on again, the size
Speaker 10: of the trade, the speed. Really you're what you're trying
Speaker 10: to do? What is your endgame? What is your goal?
Speaker 3: So if I don't have access, though, am I losing out?
Speaker 3: Like if I'm just trading on the regular world and
Speaker 3: nicey like, am I losing speed or money or trade
Speaker 3: or is it just different?
Speaker 7: So it's the big question mark.
Speaker 10: One of the firms that I profiled in my story
Speaker 10: today is a minority owned broker dealer and they specifically
Speaker 10: are looking to interact with other minority broker dealers. So
Speaker 10: there is a room set up with only minority owned
Speaker 10: broker dealers.
Speaker 7: So that use case is very specific.
Speaker 10: Obviously, if you're not a minority owned broker dealer, you
Speaker 10: may not be invited into that room. And whether or
Speaker 10: not that is a big con whether or not those
Speaker 10: trades that you don't have access to are going to
Speaker 10: impact your experience. It's still a very small sliver of
Speaker 10: the market. The ATS is the firms that are running
Speaker 10: these off exchange venues that I talk to in trying
Speaker 10: to understand the actual volumes that are happening within these
Speaker 10: private rooms.
Speaker 7: It's very small.
Speaker 10: It's some of them are citing five percent, it's less
Speaker 10: than ten percent overall.
Speaker 7: So when you think about the bigger picture here, it's.
Speaker 10: Not as if you're losing out on half of the
Speaker 10: trading that is occurring off exchange by no means. The
Speaker 10: question becomes, as this trend grows and we are seeing
Speaker 10: at pick up momentum, will it then start to impact
Speaker 10: trading ex and then some of your questions that you're
Speaker 10: bringing up alex those will need to be asked and
Speaker 10: hopefully answered over time.
Speaker 2: A big part of my job was taking the sales
Speaker 2: trader from Alliance after drinks at night.
Speaker 3: That you can still do that.
Speaker 2: I don't know if you're in a dark pool, I
Speaker 2: don't know who's who, I don't know what's going on.
Speaker 2: I could just walk across the street, my guide Alliance,
Speaker 2: Big Account take them out for drinks.
Speaker 8: Booms.
Speaker 10: The relationships and the drinks they still do matter.
Speaker 3: So maybe you're going off for a drink with someone
Speaker 3: in your private rooms in the It's true.
Speaker 2: That's a big part of my game back.
Speaker 5: In the day.
Speaker 7: No relationship. Relationships are still.
Speaker 2: The name of the game our thanks to Catherine Dherty,
Speaker 2: Bloomberg Finance reporter.
Speaker 3: Coming up in the program, I'll look at how China's
Speaker 3: on the verge of taking over the auto industry.
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
Speaker 2: depth research and data on two thousand companies and one
Speaker 2: hundred and thirty industries. You can ask the Bloomberg Intelligence
Speaker 2: v B. I go on the terminal, I'll Paul Swingey.
Speaker 3: And a Malex Steel and this is Bloomberg.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program
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Speaker 3: Each week we look at research from Bloomberg n EF
Speaker 3: previously known as New Energy Finance. They're the team at
Speaker 3: Bloomberg that tracks and analyzes the energy transition from commodities
Speaker 3: to power, transport, industries, buildings, and ag sectors.
Speaker 2: This week, we looked at the consequence of President Donald
Speaker 2: Trump's America First Investment policy on the US energy landscape.
Speaker 3: For instance, one hundred and eleven percent of planned US
Speaker 3: battery production is controlled by China linked firms, and Trump's
Speaker 3: policy makes it harder for Chinese firms to invest in
Speaker 3: the US.
Speaker 2: As a result, efforts to scale domestic clean tech manufacturing
Speaker 2: may be hindered for more. We were joined by Derek
Speaker 2: flakel BNF Lead US Policy annolyst.
Speaker 3: We first asked Derek to break down how President Trump's
Speaker 3: new policies on investment differ from than Biden administration.
Speaker 11: A lot of the Biden administration's policy was an attempt
Speaker 11: to sort of catch up with that investment in technological
Speaker 11: edge that China has, or at least compete with it better.
Speaker 11: But the Trump administration has imposed a new policy that
Speaker 11: might make that a little bit more complicated. When you
Speaker 11: have firms like byd or Ghoshen in the battery space
Speaker 11: that are sort of the technological leaders in this area,
Speaker 11: you might think it might benefit the US economy to
Speaker 11: have some additional investment from those companies have some technology
Speaker 11: transfer that comes along with that. But Trump recently passed
Speaker 11: in America First Investment policy which is designed to make
Speaker 11: that more difficult due to the sort of growing bipartisan
Speaker 11: security concerns around China, and there's a bit of a
Speaker 11: trade off here. Will Trump wants reindustrialization and reinvestment in
Speaker 11: the US. At one point, he suggested that Chinese factories
Speaker 11: might set up in the US rather than Mexico. What
Speaker 11: he's actually doing in practice is making that more challenging.
Speaker 2: So what is the solution here for investment? What are
Speaker 2: the American companies saying about their ability to meet demands
Speaker 2: within the clean tech food chain here in the US.
Speaker 11: Well, I think classically there's always a bit of a
Speaker 11: division between who you're talking with import competing industries versus
Speaker 11: import reliant industries. But a lot of the factories in
Speaker 11: the US that are setting up in practice these are
Speaker 11: the sort of end of the food chain. We're talking
Speaker 11: assembling solar modules from imported ingots and wafers, or assembling
Speaker 11: evs from some degree of imported parts, although the EV
Speaker 11: supply chain is rather more domestic.
Speaker 5: So depending on.
Speaker 11: Which part of the industry you're talking about, they're going
Speaker 11: to be looking positively or negatively at this order that set.
Speaker 11: It's important to note that current rules still allow joint
Speaker 11: ventures and licensing deals. Some companies, like FORB, we're counting
Speaker 11: on using those kinds of deals to try and build
Speaker 11: up their own technological edge and compete better. So I
Speaker 11: think there is an understanding that companies want investment, they
Speaker 11: want a clean, predictable environment. To some extent. This order
Speaker 11: does try to answer those concerns by making it easier
Speaker 11: to mitigate against some of the foreign investment concerns that
Speaker 11: are regulated by say the Committee and Foreign Investment in
Speaker 11: the US Sciphius. But at the end of the day,
Speaker 11: I think this is one additional element of uncertainty in
Speaker 11: one that's increasingly defined uncertainty.
Speaker 3: If clean tech wasn't a word, if it was just
Speaker 3: like tech, what would this be different? Or is the
Speaker 3: fact that the words clean on it changes the dynamic.
Speaker 11: I think you've seen broader sort of concerns in the
Speaker 11: government community about Chinese investments. Certainly you hear about that
Speaker 11: and chips, anything cybersecurity related. Technically speaking, a major trade
Speaker 11: barrier is the connected cars rule of the Biden administration
Speaker 11: impost saying no cars with Chinese navigational or connectivity of
Speaker 11: software can be sold in the US market after twenty
Speaker 11: twenty six. So I think the fact that energy is
Speaker 11: a sort of critical sector and is specifically called out
Speaker 11: as such in this order makes it especially sensitive. But
Speaker 11: there's a variety of other strategic sectors where these sensitivities
Speaker 11: also apply.
Speaker 2: And Derek, I guess the reality, though, is that the Chinese,
Speaker 2: in fact, are way ahead of the rest of the
Speaker 2: world in terms of technology, so that makes it even
Speaker 2: more difficult. What's the solution there.
Speaker 11: Well, something the Order tries to do is compensate for
Speaker 11: that by making it easier for unspecified US allies and
Speaker 11: partners to invest in the US. This could include say
Speaker 11: Japan and Korea, which are some of the other leaders
Speaker 11: in the sector. But at the same time, that's complicated
Speaker 11: by the fact that one there's no current list of
Speaker 11: allies and partners and right now all those traditional alliances
Speaker 11: and partnerships are complicated by the trade war, and two
Speaker 11: there's not a specific set of circumstances under which those
Speaker 11: allies and partners can get a guarantee that they'll be
Speaker 11: allowed in. It specifically says that if there's partnerships with
Speaker 11: Chinese companies by these US allied and partner companies, then
Speaker 11: that could complicate their investment climate. And since places like
Speaker 11: Panasonic or asc from Japan, or Skon LG Energy Solution
Speaker 11: from Korea, they have commercial relationships in China, right maybe
Speaker 11: that's supply chain, maybe that's consumption, and it's not totally
Speaker 11: clear which of those relationships would be considered prejudicial to
Speaker 11: their getting permission to set up in the US.
Speaker 3: Hey Derek, what areas of the clean tech area space?
Speaker 3: Is the US doing well in and investing the right
Speaker 3: kind of money and like the sectors developing right?
Speaker 11: I think that's a great question. I think, first of all,
Speaker 11: you can sort of separate deployment and manufacturing. Deployment wise,
Speaker 11: we're seeing an absolute boom and battery installations, solar installations,
Speaker 11: things like wind are a little bit more affected by
Speaker 11: interest rates, uncertainty, things like that. On the supply chain side,
Speaker 11: there's definitely been a huge boom in battery manufacturing and
Speaker 11: related EV investments, but as we mentioned, there's a lot
Speaker 11: of sort of foreign involvement in those supply chains which
Speaker 11: could be a little bitpacted by this. Lastly, I think
Speaker 11: there are some US grown technologies, especially those related to
Speaker 11: spin offs of oil and gas drilling for of O
Speaker 11: energy and geothermal. He's a lot of those techniques for
Speaker 11: geothermal drilling. Those are doing fairly well, but they're earlier
Speaker 11: on and they're not necessarily as determinative of progress in
Speaker 11: the energy transition right now as some of these traditional
Speaker 11: legacy technologies.
Speaker 2: Hey Derek, we're only two months into the second Trump administration.
Speaker 2: But is there any consensus in your world of policy
Speaker 2: as to whether this administration is going to be helpful
Speaker 2: or not helpful as it relates to, you know, economic
Speaker 2: policy in.
Speaker 11: Green I think if we're talking about economic policy with
Speaker 11: respect to clean energy, I think that you have to
Speaker 11: look at the sort of broader macroeconomic uncertainties surrounding tariffs,
Speaker 11: the impacts on interest rates. I think that creates a
Speaker 11: bit of a cloud under all kinds of capital and
Speaker 11: tons of investments. At the same time, there's been no
Speaker 11: strong focus on and all of the above energy strategy
Speaker 11: trying to support the data center build out, And while
Speaker 11: the actions so far have concentrated heavily on oil and
Speaker 11: gas and related infrastructure fossil fuel power plants, there is
Speaker 11: sort of the inkling or political room for continued support
Speaker 11: of supply expansion by all means, which, based on the
Speaker 11: sort of interconnection cues the big expected load growth from
Speaker 11: data centers and more, seems reasonably likely. However, it is
Speaker 11: only two months in and I think we've really got
Speaker 11: a wait to see how this situation develops, in which
Speaker 11: factions of the Trump administration are more dominant in the
Speaker 11: longer run.
Speaker 3: All right, thanks to Derek flakel Bloomberg BANNI lead US policy.
Speaker 2: Analystlomberg Big Takes. Story we focused on this week was
Speaker 2: entitled China's Auto industry is Already taking over the world.
Speaker 2: You can find it on Bloomberg dot Com and the Terminal.
Speaker 3: The story looks at how China is on the verge
Speaker 3: of taking over the auto industry from its rise and
Speaker 3: electric vehicles. For more, we spoke at Chester Dawson, Bloomberg
Speaker 3: Senior editor.
Speaker 2: We first asked Chester about how much of the global
Speaker 2: auto market China has right now.
Speaker 12: It's starting from a very small base, but it's growing
Speaker 12: very rapidly, so it's basically about three percent, but it's
Speaker 12: forecast to grow by leaps and bounds over the next
Speaker 12: few years. And it's really amazing when you look at
Speaker 12: particular markets where they have a thirty percent share, like
Speaker 12: in Chile or in Russia, where for obvious reasons, most
Speaker 12: of the competitions pulled out, they've got over three quarters
Speaker 12: of the market. So those are obviously, you know, kind
Speaker 12: of outlier examples, but slowly, yet surely, almost everywhere around
Speaker 12: the grow, particularly in emerging markets. The Chinese are gaining
Speaker 12: more market share, gaining momentum, and often undercutting the more
Speaker 12: established rivals. Obviously the big exception there is the US,
Speaker 12: But elsewhere you're seeing tremendous growth.
Speaker 2: So what has been the response by the western auto
Speaker 2: manufactured something in the Volkswagens and the Fords of the world.
Speaker 2: What are they doing or how are they responding to
Speaker 2: this growth by China?
Speaker 12: Well, it's really twofold in their home markets. Obviously, they've
Speaker 12: sought protection by lobbying for various protectionist barriers. In many cases,
Speaker 12: the argument is, hey, we just need a few years
Speaker 12: of breathing room until we can get up to speed
Speaker 12: and have a more competitive product. But we've kind of
Speaker 12: seen how that works historically, and it's not always a
Speaker 12: silver bullet outside of the industrialized world, because Canada and
Speaker 12: even the U has been drawing up the drug verge
Speaker 12: a bit for Chinese made vehicles. But you know, in
Speaker 12: much of the rest of the world, where growth is
Speaker 12: often fastest, the Chinese are making really impressive head roads,
Speaker 12: and the you know, established automakers are not sitting on
Speaker 12: their hands. They're you know, they're often trying to beat
Speaker 12: the Chinese on price or you know, use their better
Speaker 12: brand name, recognition and credibility, and often and sometimes working
Speaker 12: with local dealers to pressure governments in places like say Brazil,
Speaker 12: to throw up their own barriers that lunt some of
Speaker 12: the in roads being made by Chinese.
Speaker 3: This would be a silly question, but are Chinese carmakers
Speaker 3: displacing European and US carmakers or is this like expanding
Speaker 3: general auto market share.
Speaker 12: You know, that's a really good question. I think it's both.
Speaker 12: I mean, you're not seeing growth so fast that the
Speaker 12: pies expanded to the point where everybody's getting a bit
Speaker 12: of it. You are seeing erosion. It's not true everywhere,
Speaker 12: but take Thailand. That's a perfect example of where that
Speaker 12: was basically owned by the Japanese for decades, and you
Speaker 12: know there were other automakers, Ford and others sell there too,
Speaker 12: but it was basically no is kind of Japan's backyard
Speaker 12: and where companies like to to sold tremendous numbers of vehicles.
Speaker 12: The Chinese have really started to eat their lunch, so
Speaker 12: that's happened, and you know you can see that a
Speaker 12: little bit in places like South Africa and Brazil as well.
Speaker 12: So yeah, the pie is still growing, but not that
Speaker 12: not enough for everybody to gorge equally, and truly the
Speaker 12: Chinese that are picking out, so to.
Speaker 2: Speak, house equality of the Chinese cars. I remember when
Speaker 2: the Japanese cars came into the US in the seventies
Speaker 2: and eighties, the quality it was just a lot better.
Speaker 2: It was one of the reasons they were able to
Speaker 2: get shared. How about the Chinese quality.
Speaker 12: That's an excellent point too, because for years the Chinese
Speaker 12: have kind of labored under the impression that their cars
Speaker 12: are junk, and you know, that was true until fairly recently. However,
Speaker 12: in recent years, the Chinese have caught up and in
Speaker 12: some cases even surpassed this technology that some of the
Speaker 12: Western or Japanese automakers have. There's a company called Shaumi
Speaker 12: in China that sold its first car last year and
Speaker 12: now just bumped its capacity up to three hundred fifty
Speaker 12: thousand a year, which is like seven times as many
Speaker 12: as Rivian, a US startup makes. This company was making
Speaker 12: mobile phones a couple of years ago, that was its
Speaker 12: main claim to fame, and it's been able to move
Speaker 12: a lot of that connectivity and technology into the confit
Speaker 12: of the vehicle. So you're finding that not only are
Speaker 12: Chinese cars cheaper, but oftentimes they have just as many
Speaker 12: creature comforts, or sometimes more than the equivalent, say, GM
Speaker 12: or Toyota or Volkswagen. All Right.
Speaker 3: Thanks to Chester Dawson, Bloomberg Senior Editor.
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