WEBVTT - IPO Outlook and UAW Strikes 0:00:01.440 --> 0:00:05.080 From Mahard where Innovation of Money and Power Collie in 0:00:05.200 --> 0:00:06.720 Silicon Valley, NBM. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:25.280 --> 0:00:27.440 I'm Caroline. He had of Rumberge's world headquarters in New York. 0:00:27.600 --> 0:00:30.280 Ed Ludlow, He's off. This is Bruebag technology coming up 0:00:30.440 --> 0:00:33.400 well as the market's drop. We'll talk all things ipo 0:00:33.720 --> 0:00:36.440 ARM completes the biggest of the instacart gives up to 0:00:36.440 --> 0:00:38.720 go public next week. We have so much more ahead 0:00:38.920 --> 0:00:40.840 and we'll talk the state of fintech with a former 0:00:40.920 --> 0:00:44.040 CEO of so far as his company joins others in 0:00:44.120 --> 0:00:48.720 withdrawing applications for banking charters. Why, plus how will the 0:00:48.800 --> 0:00:53.360 uaw's unprecedented strikes impact automakers and the electric vehicle market. 0:00:53.800 --> 0:00:56.680 An ARM still managing to treadwater buck the trend. We're 0:00:56.680 --> 0:00:59.240 at more than two percent after its initial public offering, 0:00:59.240 --> 0:01:02.040 and let's stick with that theme. The comeback. It's here 0:01:02.440 --> 0:01:04.720 and of course this week was the biggest debut of 0:01:04.800 --> 0:01:06.679 the year. We of course were speaking with the CEO, 0:01:06.760 --> 0:01:09.560 Renee Has, who was confident in the outlook for his business. 0:01:11.560 --> 0:01:14.000 We also have a very unique business model that gives 0:01:14.040 --> 0:01:16.440 us the ability to have a very very good vision 0:01:16.560 --> 0:01:18.839 in the future in terms of when people use our products. 0:01:19.080 --> 0:01:22.200 So relative to our confidence in the outlook, we have 0:01:22.240 --> 0:01:24.319 a very very high confidence that the growth rate that 0:01:24.360 --> 0:01:25.720 we have talked about will be sustained. 0:01:27.920 --> 0:01:30.440 So how do your syncratic was that event or how 0:01:30.480 --> 0:01:32.200 can we read across the rest of the IPO's Katie 0:01:32.240 --> 0:01:34.480 Roof is here in New York discuss it all. You 0:01:34.560 --> 0:01:38.760 are the person who marries venture backed businesses as well 0:01:38.760 --> 0:01:40.800 as M and A as well as into the public 0:01:40.800 --> 0:01:43.520 markets and the banks, and I'm ultimately interested as to 0:01:43.560 --> 0:01:45.720 how your sources are saying this read across for armor 0:01:45.760 --> 0:01:48.240 is for the likes of instacrat, for Clevio and other 0:01:48.240 --> 0:01:50.240 companies that want to hit this market running. 0:01:50.080 --> 0:01:51.720 Well, the IPO window is open. 0:01:51.880 --> 0:01:55.080 We've been talking about this for almost two years. You know, 0:01:55.160 --> 0:01:58.120 tech IPAs came to a halt in late twenty twenty one, 0:01:58.440 --> 0:02:01.360 and arm is just been the first big one and 0:02:01.400 --> 0:02:04.400 it went well. It went up twenty five percent, which 0:02:04.440 --> 0:02:06.600 is you know where they often aimed for these things 0:02:06.600 --> 0:02:09.640 to go. So, you know, we saw instacart they raised 0:02:09.680 --> 0:02:14.320 their price range probably partly because of this. It shows 0:02:14.320 --> 0:02:18.200 that there's public investor enthusiasm. Of course, ARM and instacart 0:02:18.200 --> 0:02:22.080 are very different companies, but bankers are still going to 0:02:22.160 --> 0:02:26.440 argue that this is, you know, a sign of tech enthusiasm. Broadly, 0:02:26.720 --> 0:02:30.200 instacart raised their range from twenty six to twenty eight 0:02:30.360 --> 0:02:32.280 to twenty eight to thirty. At the top of that 0:02:32.400 --> 0:02:34.680 range they would be ten billion dollars on a fully 0:02:34.680 --> 0:02:37.480 deleuted basis, so still lower than where they were, but 0:02:37.600 --> 0:02:38.600 better than where they were hoping. 0:02:38.600 --> 0:02:39.320 A few days ago. 0:02:40.400 --> 0:02:43.800 One we hear the reports of just how hands on 0:02:44.280 --> 0:02:47.520 Massa was in this process, and the idea that maybe 0:02:48.000 --> 0:02:51.519 he decided to undershoot in the overall price range that 0:02:51.560 --> 0:02:53.520 he could have got for the shares, leave money on 0:02:53.560 --> 0:02:55.760 the table to get that pop. I mean, we'd like 0:02:55.760 --> 0:02:58.000 you to see that replicated by the others that want to 0:02:58.040 --> 0:03:01.359 come to this market. How how difficult to balancing act. 0:03:01.320 --> 0:03:04.280 Is this at the moment, So what happened was pretty 0:03:04.360 --> 0:03:06.920 unusual where they thought, you know, they could have priced 0:03:06.919 --> 0:03:08.840 a banker spot that they could have priced the company 0:03:09.000 --> 0:03:11.959 at fifty two a share, but ARM went with fifty one, 0:03:12.080 --> 0:03:15.000 partly because Masa just wanted to ensure, you know, a 0:03:15.040 --> 0:03:16.800 big pop on the first day, but of course that 0:03:16.840 --> 0:03:19.919 means that a little less money was raised for the company. 0:03:20.560 --> 0:03:23.240 I would say usually companies are going to take the 0:03:23.280 --> 0:03:28.160 banker recommendation where whatever it may be. They do these 0:03:28.240 --> 0:03:31.480 pops to incentivize new investors for taking a risk on 0:03:31.560 --> 0:03:34.000 day one. Otherwise, why would you invest on day one? 0:03:34.000 --> 0:03:37.720 You'd wait until and see how it went. But you know, 0:03:37.760 --> 0:03:40.040 if you leave, if you do too much of a pop, 0:03:40.120 --> 0:03:43.280 then that's more that the company could have raised, So 0:03:43.560 --> 0:03:45.520 they try to time it. But of course it's all 0:03:45.560 --> 0:03:47.760 just a guess. They do these road shows where they're 0:03:47.960 --> 0:03:50.839 talking to all these public investors trying to figure out 0:03:51.000 --> 0:03:52.960 what they're going to buy, how much they're going to buy, 0:03:53.120 --> 0:03:55.840 and it. You know, they do some math, but it's 0:03:55.880 --> 0:03:56.440 also a lot of. 0:03:56.400 --> 0:03:59.360 Guessing, and they've gotten art of a guess that you 0:03:59.400 --> 0:04:01.920 were just telling me before that. Well, the CFO of 0:04:02.000 --> 0:04:06.040 instacart knows these banking worlds well, having come from Goldman. 0:04:06.040 --> 0:04:09.360 Yeah, exactly. Nick Giovanni, the CFO of Instacart, he used 0:04:09.360 --> 0:04:13.600 to run Gordman's TMT, their investment banking group for tech, 0:04:13.720 --> 0:04:16.640 so he was the one praising all these tech IPOs 0:04:16.680 --> 0:04:19.520 in the past. So if there's anyone that knows how 0:04:19.560 --> 0:04:22.279 to optimize Instacar's success, it would be him. 0:04:23.000 --> 0:04:25.400 All lies on him or lives in Clavio as well. 0:04:25.600 --> 0:04:28.159 For next week, we wait with beta breath, Katie Rufe, 0:04:28.160 --> 0:04:29.760 We thank you for being here and save trip back 0:04:29.760 --> 0:04:32.680 to La. Meanwhile, well, let's dig into more broadly the 0:04:32.720 --> 0:04:35.320 market here and sentiment around technology names as we look 0:04:35.360 --> 0:04:37.239 for this IPO window to be back up and running 0:04:37.240 --> 0:04:40.360 with Laura Cooper black Rock, senior macro strategist for ices EMEA, 0:04:41.160 --> 0:04:44.359 indeed a former strategist over here at Bloomberg as well. Laura, 0:04:44.400 --> 0:04:47.800 and I'm interested as to you're in the world of ETFs, 0:04:47.800 --> 0:04:49.680 So what's so interesting about the ARM listing? And I 0:04:49.720 --> 0:04:52.039 know you can't go into individual names, but it's like 0:04:52.240 --> 0:04:54.479 not going to get into ETFs more broadly as it 0:04:54.520 --> 0:04:56.840 is an ADR of course a foreign company, but also 0:04:57.400 --> 0:05:01.960 very small floats overall. What sort of focus are you're 0:05:01.960 --> 0:05:05.479 putting for your clients on these new companies to come 0:05:05.480 --> 0:05:06.040 to the market. 0:05:07.160 --> 0:05:09.359 Well, I think probably what's the most interesting is that 0:05:09.360 --> 0:05:12.760 we've seen a fairly muted IPO backdrop this year. It 0:05:12.839 --> 0:05:15.039 has been a little bit stronger than last year, but 0:05:15.160 --> 0:05:17.880 well below the levels that we saw back in twenty 0:05:17.920 --> 0:05:20.480 twenty one, for example. And I think this reflects a 0:05:20.520 --> 0:05:23.040 couple of factors. One is the fact that we are 0:05:23.080 --> 0:05:28.200 in this environment of heightened macro uncertainty. Investors have uncertainty 0:05:28.320 --> 0:05:31.680 about wherely where rates are going, what's the growth dynamics 0:05:31.720 --> 0:05:33.960 going to be, like, will this actually be a profitable 0:05:34.040 --> 0:05:37.720 type of backdrop to enter into this market? And then second, 0:05:37.839 --> 0:05:42.720 I think there's this greater scrutiny around valuations because investors 0:05:42.760 --> 0:05:46.240 aren't necessarily chasing the next big growth stock, but it's 0:05:46.320 --> 0:05:49.640 really about looking at those margins, looking at the profitability 0:05:49.680 --> 0:05:53.159 and demand dynamics to gauge is this actually you know 0:05:53.279 --> 0:05:55.599 something we want to invest in at this uncertain time. 0:05:56.080 --> 0:05:59.640 Uncertainty also geopolitical in when we think of the China 0:05:59.680 --> 0:06:02.640 expose that ANAM has, we also think of the AI 0:06:02.800 --> 0:06:06.120 hype that was satisfying at that moment. How much is 0:06:06.200 --> 0:06:10.960 artificial intelligence leaning into the valuation conundrum for many of 0:06:11.000 --> 0:06:11.560 your clients. 0:06:12.560 --> 0:06:15.680 I think certainly the AI hype has been a key 0:06:15.920 --> 0:06:18.880 driver around just the outperformance that we've seen in some 0:06:18.960 --> 0:06:21.599 of those US tech stocks a year to date, Yes, 0:06:21.640 --> 0:06:24.599 we have seen that come off a bit in recent weeks, 0:06:24.839 --> 0:06:28.719 but I think underlying this AI euphoria there is still 0:06:28.800 --> 0:06:31.640 strong fundamentals, and it's one of the reasons why we 0:06:31.760 --> 0:06:36.479 do see artificial intelligence as a key secular megaporce over 0:06:36.520 --> 0:06:40.080 the coming years. If we think about the profitability backdrop, 0:06:40.200 --> 0:06:43.280 this was clearly coming through in earnings. These are really 0:06:43.360 --> 0:06:46.400 those companies that can generate the type of earnings that 0:06:46.440 --> 0:06:49.680 investors are demanding. If we look at earnings estimates for 0:06:49.720 --> 0:06:52.680 the next twelve months, they're sitting at about that fifteen 0:06:52.720 --> 0:06:56.520 percent mark. That's well above other sectors, and it's probably 0:06:56.520 --> 0:06:59.960 the only sector that can actually meet those earnings expectations. 0:07:00.279 --> 0:07:04.400 So as those earnings potentially are justified in the coming quarters, 0:07:04.640 --> 0:07:07.400 we do think there's further scope for this tech rally 0:07:07.440 --> 0:07:10.679 to run. Even as we start to see probably greater 0:07:10.800 --> 0:07:14.400 bouts of volatility around some of the negative headlines coming through, 0:07:14.680 --> 0:07:17.720 it doesn't really curb what we still see as a 0:07:17.760 --> 0:07:21.000 favorable long term demand backdrop for these tech stocks. 0:07:21.240 --> 0:07:21.920 Go global. 0:07:22.120 --> 0:07:25.120 As of course, you currently sit in that NEA role 0:07:25.320 --> 0:07:27.520 and I'm looking at technology on the stock six hundred, 0:07:27.560 --> 0:07:30.840 the worst performing sector over the last three months overall, 0:07:30.920 --> 0:07:33.400 it's one of the worst performing on the day as well. Laura, 0:07:33.480 --> 0:07:36.760 how global is this view that technology is a sected 0:07:36.800 --> 0:07:37.160 to be in. 0:07:38.640 --> 0:07:41.040 I think it really depends on where we're going to 0:07:41.160 --> 0:07:44.600 see those beneficiaries from some of the long term trends 0:07:44.640 --> 0:07:47.760 around for example, re shoring in some of that semiconductor 0:07:47.800 --> 0:07:50.960 space that is probably tilted a little bit more towards 0:07:51.000 --> 0:07:54.680 the US, but it really does reflect this market concentration, 0:07:54.920 --> 0:07:57.960 So that's leaning US probably more of a US equity 0:07:58.000 --> 0:08:00.880 tilt over Europe at this juncture. But if we think 0:08:00.920 --> 0:08:03.160 about kind of broader in the tech space, it's not 0:08:03.200 --> 0:08:05.560 really known to be kind of the driver of those 0:08:05.600 --> 0:08:08.880 European benchmarks. So I think overall, when we look at 0:08:08.920 --> 0:08:13.560 positioning in these tech stocks, it's probably tilted towards the US. 0:08:13.760 --> 0:08:17.000 That's probably where it's going to be the greatest demand resiliency. 0:08:17.360 --> 0:08:20.600 But for example, semiconductors is a very strong conviction call 0:08:20.680 --> 0:08:24.280 for US on the back of these medium term AI dynamics, 0:08:24.560 --> 0:08:28.040 and that we advocate for taking a global exposure because 0:08:28.040 --> 0:08:31.000 we do think there's pockets of opportunity and really not 0:08:31.360 --> 0:08:34.200 taking too much of a concentrated risk because some of 0:08:34.200 --> 0:08:37.720 those geopolitical fragmentations could arise and we don't want to 0:08:37.720 --> 0:08:41.760 have any particular exposure in that broader semiconductor space. 0:08:42.679 --> 0:08:44.640 Good on the day. If you're looking at the socks, 0:08:44.840 --> 0:08:48.119 I'm interested in digging into some of the individual intricacies 0:08:48.160 --> 0:08:50.920 of what makes an AI company an AI company for you, 0:08:51.040 --> 0:08:54.120 or indeed an AI opportunity. Which are the areas of 0:08:54.160 --> 0:08:56.280 application that you think is most profuitful. 0:08:57.480 --> 0:09:00.560 Well, I think there's really three ways of framing artificial 0:09:00.600 --> 0:09:05.120 intelligence from an investment perspective. The first would be around, Okay, 0:09:05.200 --> 0:09:08.880 how does AI actually boost a company's earnings? How are 0:09:08.960 --> 0:09:11.880 we going to see this kind of change pricing models, 0:09:11.920 --> 0:09:16.160 revenue growth going forward, Particularly if we think about software providers, 0:09:16.240 --> 0:09:18.200 how are they actually going to deploy this to the 0:09:18.200 --> 0:09:21.839 broader landscape. So those companies that have actually been able 0:09:21.920 --> 0:09:25.520 to secure AI patents actually have seen an increase in 0:09:25.559 --> 0:09:29.080 their economic value, so they're already showcasing the impact of 0:09:29.120 --> 0:09:32.079 AI at the company level. Then we can think about, okay, 0:09:32.120 --> 0:09:35.840 how is AI going to impact operational efficiency? Are we 0:09:35.920 --> 0:09:39.840 going to see more streamlined businesses, more cost cuts, or 0:09:39.960 --> 0:09:42.080 the other side of that, are we going to see 0:09:42.120 --> 0:09:46.720 this AI generated boom drive this efficiency, this productivity gains 0:09:46.760 --> 0:09:50.120 that in turn will have some benefits for some of 0:09:50.120 --> 0:09:52.880 these companies. And then third, I think is probably the 0:09:52.960 --> 0:09:55.800 key question that we've been asked by clients more recently, 0:09:56.240 --> 0:09:59.440 is really around how is AI going to disrupt this 0:09:59.600 --> 0:10:02.600 on a sector basis? So which of those sectors are 0:10:02.640 --> 0:10:05.960 going to be the greatest beneficiaries. Some are quite obvious, 0:10:06.000 --> 0:10:10.040 for example, the software providers, semiconductors as well if we 0:10:10.080 --> 0:10:14.000 think the next step around cybersecurity, some of those proprietary 0:10:14.080 --> 0:10:17.160 data providers. But it's also the thing about healthcare, medical 0:10:17.160 --> 0:10:19.880 device innovation, in the legal field, where are we going 0:10:19.880 --> 0:10:23.440 to see a disruptions. So it's about capturing those areas 0:10:23.480 --> 0:10:25.840 where we think is not actually in the price yet, 0:10:25.880 --> 0:10:28.640 but they're probably going to be net beneficiaries. As is 0:10:28.679 --> 0:10:29.679 AI trend. 0:10:29.440 --> 0:10:34.080 Unfolds still totally all encompassing this AI conversation or a 0:10:34.120 --> 0:10:36.880 cooper create us some time with you happy weekend, of course, 0:10:36.920 --> 0:10:40.080 a black roll meanwhile coming up well before AI, we're 0:10:40.080 --> 0:10:41.920 all talking about the hype around crypto. We're going to 0:10:41.960 --> 0:10:44.040 go back to that hype, but talk about its application 0:10:44.200 --> 0:10:47.120 right now, and indeed, more broadly, where we're seeing fintech 0:10:47.160 --> 0:10:52.079 firms finding some concerns around actually wanting to become banks. 0:10:52.480 --> 0:10:54.959 We'll discuss with a figure co founder of Mike Cagney. 0:10:55.160 --> 0:11:10.040 That's next. This is Bloomback. Now we wait with Beta 0:11:10.120 --> 0:11:12.600 breath for potentially a statement coming from the White House. 0:11:12.640 --> 0:11:14.880 President Biden going to be speaking about the strike action 0:11:15.000 --> 0:11:18.160 currently underway. We know it's actually kind of been a 0:11:18.200 --> 0:11:21.079 focus across many in industry, but members of the moment 0:11:21.160 --> 0:11:25.760 united at Auto Workers Union, they voted to strikers midnight 0:11:26.120 --> 0:11:29.160 after negotiations with what Fords, Atlantist General Motors they all 0:11:29.160 --> 0:11:31.840 fell through. In fact, GM CEO Mary Barrow weighed in 0:11:31.920 --> 0:11:34.040 earlier today on Blue Make Tevitlevision. Take a listen. 0:11:35.400 --> 0:11:37.240 I will say we're ready for this. You know, as 0:11:37.280 --> 0:11:40.160 we've dealt with the COVID and dealt with the semiconductor 0:11:40.200 --> 0:11:43.160 shortage as well as other supply chain challenges that have 0:11:43.559 --> 0:11:46.600 you know, continued to persist from COVID. Our team knows 0:11:46.640 --> 0:11:49.360 how to manage these situations. They're staying agile and we're 0:11:49.360 --> 0:11:50.880 going to do what's right for the company. We're going 0:11:50.920 --> 0:11:52.440 to make sure everyone stays safe. 0:11:52.960 --> 0:11:55.160 We now can go to the White House. We understand 0:11:55.160 --> 0:11:57.160 where President Biden is addressing the nation. 0:11:58.720 --> 0:12:01.760 Began the last few weeks and over the last the 0:12:01.800 --> 0:12:07.240 past decade, auto companies have seen record profits, including the 0:12:07.280 --> 0:12:10.960 last few years, because of the extraordinary skill and sacrifices 0:12:11.000 --> 0:12:14.840 of the UAW workers. Those record profits have not been 0:12:14.960 --> 0:12:18.880 shared fairly, in my view, with those workers. Just as 0:12:18.920 --> 0:12:22.040 the Treasury Department has released the report pointing out that 0:12:22.120 --> 0:12:25.160 the most Comperhence report ever dealing with how unions are 0:12:25.240 --> 0:12:29.200 good for both union workers and non union workers to 0:12:29.400 --> 0:12:30.679 the annual overall economy. 0:12:31.440 --> 0:12:33.160 Unions raise workers wages, they. 0:12:33.080 --> 0:12:38.360 Said, incomes, increase home ownership, increased retirement savors, increase access 0:12:38.440 --> 0:12:42.960 to critical benefits like sickly and childcare, and reduced inequality, 0:12:43.480 --> 0:12:46.720 all of which strengthen our economy for all workers. That's 0:12:46.800 --> 0:12:52.120 because unions. Unions raised standards across the workplaces and entire industries, 0:12:52.679 --> 0:12:56.240 pushing up wages and strengthening benefits for everyone. That's why 0:12:56.280 --> 0:12:59.840 strong unions are critical. They're growing economy and growing from 0:12:59.880 --> 0:13:03.000 the middle out the bottom up, not the top down. 0:13:03.720 --> 0:13:06.760 That's especially true as we transition to a clean energy future, 0:13:06.760 --> 0:13:09.400 which are in the process of doing. I believe that 0:13:09.440 --> 0:13:13.000 transition should be fair and a win win for issued me, 0:13:13.480 --> 0:13:17.040 for auto workers and auto companies. But I also believe 0:13:17.120 --> 0:13:20.560 in the contract agreement must lead to a vibrant, made 0:13:20.600 --> 0:13:24.360 in America future that promotes good, strong, middle class jobs 0:13:24.679 --> 0:13:27.720 that workers can raise a family on, where the UAW 0:13:27.880 --> 0:13:30.840 remains at the heart of auto economy, and where the 0:13:30.840 --> 0:13:34.200 Big three companies continue to lead an innovation, excellence, quality 0:13:34.240 --> 0:13:38.920 and leadership. Last night, after negotiations broke down, the UAW 0:13:39.000 --> 0:13:42.520 announced the targeted strike and a few Big three auto plants. 0:13:43.760 --> 0:13:47.079 Let's be clear, no one wants to strike. Say it again, 0:13:47.160 --> 0:13:50.040 no one wants to strike. But I respect workers right 0:13:50.080 --> 0:13:52.960 to use their options under the collective bargaining system, and 0:13:53.000 --> 0:13:57.559 I understand the worker's frustration over generations. Auto workers sacrifice 0:13:57.559 --> 0:14:00.520 so much to keep the industry alive and strong, especially 0:14:00.679 --> 0:14:04.440 the economic crisis and the pandemic. Workers deserve a fair 0:14:04.520 --> 0:14:06.920 share of the benefits they help create for an enterprise. 0:14:07.600 --> 0:14:10.280 I do appreciate that the parties have been working around 0:14:10.320 --> 0:14:12.920 the clock, and when I first call them at the 0:14:13.080 --> 0:14:15.520 very first day of the negotiation, I said, please stay 0:14:15.520 --> 0:14:17.960 at the table as long as you can to try 0:14:18.000 --> 0:14:21.640 to work this out. And they've been around the clock, 0:14:21.680 --> 0:14:24.160 and the companies have made some significant offers. 0:14:24.520 --> 0:14:25.280 But I believe they. 0:14:25.200 --> 0:14:28.760 Should go further to ensure record corporate profits mean record 0:14:28.880 --> 0:14:33.120 contracts for the UAWM stated again, record corporate profits which 0:14:33.160 --> 0:14:36.720 they have should be shared by record contracts for the 0:14:36.840 --> 0:14:40.240 uaw And just as we were building an economy of 0:14:40.280 --> 0:14:41.480 the future, we. 0:14:41.440 --> 0:14:43.080 Need labor agreements for the future. 0:14:43.600 --> 0:14:46.320 It's my hope that the parties can returned the negotiation 0:14:46.440 --> 0:14:50.080 table to forge a win win agreement to continue our 0:14:50.120 --> 0:14:54.000 active engagement. I'm deplug dispatching two members of my team 0:14:54.040 --> 0:14:57.640 to Detroit, Acting Labor Secretary Julie Schue and White House 0:14:57.680 --> 0:15:00.000 Senior Advisor Gene Sperling. Both of them have been involved 0:15:00.040 --> 0:15:03.360 loutching now to offer their full support for the parties 0:15:03.360 --> 0:15:07.000 and reaching a contract. The bottom line is that auto 0:15:07.000 --> 0:15:11.080 workers help create America's middle class. They deserve a contract 0:15:11.600 --> 0:15:14.840 that sustains them in the middle class. So thank you 0:15:14.960 --> 0:15:16.520 very much. It's on. I'm going to say thanks you. 0:15:17.400 --> 0:15:20.280 You can directly involved in negotiations, should Hunter get a 0:15:20.320 --> 0:15:20.640 part in. 0:15:20.760 --> 0:15:24.400 Mister President President Joe Biden there speaking on the uaw 0:15:24.560 --> 0:15:28.080 workers strike, really reiterating that the workers have his support. 0:15:28.200 --> 0:15:31.160 Nobody wants to strike, he says, but they are dispatching 0:15:31.200 --> 0:15:33.600 officials to offer support in the talks, and he wants 0:15:33.640 --> 0:15:37.320 the parties to return to the negotiating table and reach 0:15:37.360 --> 0:15:39.400 an agreement that he says would be a win win. 0:15:40.080 --> 0:15:42.720 Let's first and almost then go out to Washington. I 0:15:42.800 --> 0:15:45.240 think we have Katie Lion standing by just to wrap 0:15:45.320 --> 0:15:47.560 up what is quite a difficult balancing act for the 0:15:47.560 --> 0:15:51.160 president because he wants to be pro worker, pro union, 0:15:51.320 --> 0:15:53.520 but also wants to be pro ev transition. 0:15:54.920 --> 0:15:57.440 Yeah, that's exactly right, Caroline, and you certainly see that 0:15:57.520 --> 0:16:00.680 pro union sentiment coming through in the remarks he just made, 0:16:00.720 --> 0:16:03.880 among many other things, him saying that they should go 0:16:03.960 --> 0:16:06.960 further because record corporate profits should be shared with a 0:16:07.040 --> 0:16:10.680 record contract for the United Auto Workers, saying that autoworkers 0:16:10.680 --> 0:16:12.760 help build the middle class and deserve a contract that 0:16:12.800 --> 0:16:16.000 helps sustain them and the middle class. So clearly trying 0:16:16.040 --> 0:16:18.360 to be on the side of the union here, even 0:16:18.400 --> 0:16:21.080 as he says that nobody does want to strike, because 0:16:21.080 --> 0:16:24.360 that strike also puts the other objective this administration has, 0:16:24.440 --> 0:16:26.600 or one of them, at least, Caroline, which you alluded to. 0:16:26.840 --> 0:16:29.920 They're desire for a clean energy economy of transition to 0:16:29.960 --> 0:16:33.240 EVS potentially at risk depending on how long this strike goes. 0:16:33.320 --> 0:16:36.280 Remember this is an administration that, through the Inflation Reduction Act, 0:16:36.400 --> 0:16:39.600 is offering massive subsidies on new electric vehicle sales. It 0:16:39.640 --> 0:16:42.160 also has a goal of having half of all vehicle 0:16:42.200 --> 0:16:46.280 sales new vehicle sales by twenty thirty be electric. So 0:16:46.360 --> 0:16:49.440 these two goals are really in conflict here for this administration, 0:16:49.480 --> 0:16:51.760 it is a very difficult line to walk, but obviously 0:16:52.000 --> 0:16:54.120 what they ultimately want at the end of the day 0:16:54.240 --> 0:16:57.040 is this conflict resolved, which is why he is dispatching 0:16:57.080 --> 0:17:01.000 both being Spurling and acting Labor Secretary. Julie's to Detroit. 0:17:01.680 --> 0:17:04.119 Perfect wrap up, Thank you so much, Kaylie. Lions on 0:17:04.160 --> 0:17:06.440 the ground in Washington. Let's get you more contacts from 0:17:06.440 --> 0:17:08.359 the auto perspective for a moment as well, being most 0:17:08.400 --> 0:17:11.960 Gabrielle coomfolos with us and Gabby. What's what's so interesting 0:17:12.080 --> 0:17:14.560 is I immediately think of Tesla in all of this 0:17:14.680 --> 0:17:18.080 ev race and of course doesn't work with unionized workers. 0:17:18.160 --> 0:17:20.639 So how much is this going to be affecting basically 0:17:20.640 --> 0:17:25.080 the competition against Tesla of this moment, If Ford, if Stilantis, 0:17:25.280 --> 0:17:28.399 if GM are affected by such strikes. 0:17:28.320 --> 0:17:30.880 Yeah, you know, I think it does make it even 0:17:30.960 --> 0:17:34.600 harder for the Detroit three to compete with Tesla, at 0:17:34.680 --> 0:17:38.600 least in this moment, because you know, they are plowing 0:17:38.680 --> 0:17:41.880 all those record profits and you know these record car 0:17:42.240 --> 0:17:45.040 car prices we've been paying, they've been putting that money 0:17:45.320 --> 0:17:50.240 into battery plants, into designing new electric vehicles. So but 0:17:50.359 --> 0:17:52.040 they have a long way to go to catch up 0:17:52.040 --> 0:17:54.639 with Tesla. Tesla has a ten year head start. And 0:17:54.720 --> 0:17:56.600 let's not forget about even though we don't see a 0:17:56.600 --> 0:17:59.280 lot of Chinese automakers here in the US, they are 0:17:59.560 --> 0:18:01.520 you know, not on the door around the world, So 0:18:01.560 --> 0:18:05.919 they are under a lot of pressure, and you know, 0:18:06.200 --> 0:18:09.439 it's attention because I think what the problem is that 0:18:09.480 --> 0:18:11.840 the automakers for the last ten years have kind of 0:18:12.080 --> 0:18:14.479 you know, after two thousand and eight, they kind of 0:18:14.640 --> 0:18:16.880 that was it. They got the monkey off their back. 0:18:16.920 --> 0:18:19.440 You know, they had mass they really you know, at 0:18:19.440 --> 0:18:21.879 the bargaining table in two thousand and seven or at a 0:18:21.920 --> 0:18:26.560 financial crisis, the workers really sacrificed a lot, and I 0:18:26.560 --> 0:18:28.320 think the automakers kind of thought that was the end 0:18:28.359 --> 0:18:30.320 of the story and we're moving on now. And I 0:18:30.320 --> 0:18:33.680 think what Sean Fayn the UAW is doing is showing them, hey, 0:18:33.720 --> 0:18:36.080 not so fast, you're not we're not going to agree 0:18:36.200 --> 0:18:38.880 that this you know now or and over man, that's 0:18:39.000 --> 0:18:39.680 what's happening. 0:18:40.160 --> 0:18:43.159 A new tactic at work, new leader to carry a 0:18:43.160 --> 0:18:44.920 couple of absolutely brilliant to talk to you. Thank you 0:18:45.040 --> 0:18:47.679 very much. Indeed, we're going to do a hard pivot 0:18:47.680 --> 0:18:49.919 now we're going to return back to a conversation that 0:18:50.040 --> 0:18:54.560 is much more about tech, but actually largely maybe about regulation, 0:18:54.600 --> 0:18:57.760 about an administration, and it's desired to be adopting blockchain 0:18:57.880 --> 0:18:59.800 companies in particular. We just want to be talking to 0:18:59.800 --> 0:19:03.040 the chain firm Figure, in the latest fintech company actually 0:19:03.119 --> 0:19:05.840 to withdraw its application for a bank charter, a move 0:19:05.920 --> 0:19:08.960 made after years of waiting for answers from US financial 0:19:08.960 --> 0:19:11.760 regulators joining us. I'm very peace to welcome Mike Cagney, 0:19:11.760 --> 0:19:14.119 here's the former CEO of SOFI, co founder of Figure, 0:19:14.400 --> 0:19:17.840 which uses blockchain to build financial products such as loan origination, 0:19:17.920 --> 0:19:20.600 for example. But also very pleased to welcome Shananali Bessett 0:19:20.640 --> 0:19:23.200 to the shows. Help bring about this interview, and I think, 0:19:23.520 --> 0:19:26.440 first and foremost a great article that you've helped pen 0:19:27.000 --> 0:19:29.720 in other media. At the moment, Mike just talking about 0:19:29.760 --> 0:19:33.119 the decision making process of not becoming a bank, and 0:19:33.240 --> 0:19:35.159 it is in large part because of regulators. 0:19:35.840 --> 0:19:38.840 Well, it's really around the state of regulation with blockchain, 0:19:39.040 --> 0:19:41.439 and the Figure is a Blochain holding company. We have 0:19:41.440 --> 0:19:44.360 two Blochain centric businesses one and lending one in markets 0:19:44.560 --> 0:19:47.359 and we have over two hundred state licenses. So you 0:19:47.359 --> 0:19:49.480 can see the appeal of having a national charter and 0:19:49.560 --> 0:19:51.359 not having to deal with the overhead of two hundred 0:19:51.359 --> 0:19:54.440 state licenses. Also the ability to have liabilities to fund 0:19:54.440 --> 0:19:57.280 the assets that you generate. But Figure fundamentally is a 0:19:57.280 --> 0:19:59.720 market's business and are lending business is more of a 0:19:59.760 --> 0:20:02.399 means to an end to build that marketplace out, and 0:20:02.440 --> 0:20:05.520 we felt without clear identification of what we could and 0:20:05.520 --> 0:20:07.919 couldn't do as a bank, it didn't make sense for 0:20:08.000 --> 0:20:09.880 us to move forward. There were other reasons as well, 0:20:09.920 --> 0:20:11.240 but that was the key one. 0:20:11.280 --> 0:20:13.000 I'm curious what you think this means about the future 0:20:13.000 --> 0:20:16.080 of financial technology. Your alma mater so far is really 0:20:16.160 --> 0:20:18.560 leaning into the idea of being a bigger and bigger bank. 0:20:18.720 --> 0:20:21.119 You have the regional banking system that may not be 0:20:21.280 --> 0:20:24.200 the ultimate form of capital for people like you moving forward, 0:20:24.560 --> 0:20:26.960 So what role do the upstarts start to play. 0:20:27.400 --> 0:20:29.560 So I think you're in a macro trend right now 0:20:29.640 --> 0:20:32.280 where the banks are contracting credit and that would be 0:20:32.320 --> 0:20:34.840 exacerbated in the basal three M game went through that 0:20:34.840 --> 0:20:37.000 that's unlikely to happen at least you know, with the 0:20:37.040 --> 0:20:40.200 current regulatory or the legislative position. But you're in a 0:20:40.240 --> 0:20:42.920 situation you're aspected where banks are pulling back. You're also 0:20:42.960 --> 0:20:45.880 in a situation where the asset liability ratio, where banks 0:20:45.880 --> 0:20:48.360 traditionally have at least over the last several years, especially 0:20:48.359 --> 0:20:51.480