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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,

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Speaker 1: along with my co host Lisa Brahma wits each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penil podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. We are amidst the longest economic

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Speaker 1: cycle on record. The FED is certainly in the dobish mode.

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Speaker 1: Trade risk appears to be on the back burner, at

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Speaker 1: least for now. So the question is what do investors

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Speaker 1: do after that phenomenal first half of the year. To

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Speaker 1: help us guide us for the second half, we welcome

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Speaker 1: our good friend Tom Kennedy Thomas, Global head of Macro

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Speaker 1: and fixed Income Strategy at JP Morgan Private Bank. They

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Speaker 1: have lots of money under management. Uh. Tom joins us

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Speaker 1: here on our Bloomberg Interactive Brokers studio. Trust me, they

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Speaker 1: have lots of money, the tech tech tons good jillions Jullian.

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Speaker 1: So Tom, what do we do here? Again? A great

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Speaker 1: first half of the year, Probably a tendency for a

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Speaker 1: lot of investors is to protect act what they made.

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Speaker 1: If that's what somebody comes to, what do you tell them, Yeah,

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Speaker 1: come to me a lot to ask that. I think

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Speaker 1: it's all right. Question you get. Protection can come in

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Speaker 1: lots of shapes and sizes, right, I want to protect

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Speaker 1: myself by still staying invested. I think adding longer maturity

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Speaker 1: bonds UH is a great port portfolio hedge. Common pushback

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Speaker 1: eels are so low, Tom, why would I do that? Well,

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Speaker 1: they could go lower and maybe we want to talk

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Speaker 1: about that. The other pieces are gold. I think historically

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Speaker 1: has been a great late cycle play and it protects you.

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Speaker 1: My My only pushback there is it doesn't have any

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Speaker 1: yield to it, so it's a pure protection play. And

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Speaker 1: then what we have seen most on the first half

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Speaker 1: of the of the year was forward steep in their trades,

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Speaker 1: the place where the spread between a two year treasury

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Speaker 1: and a tenure treasury would would steep in a down

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Speaker 1: down draft scenario, but the forward market was relatively flat,

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Speaker 1: so we had people positioning to protect their portfolio for

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Speaker 1: a world where the Fed had to cut aggressively and

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Speaker 1: steep in the curve. They were using that as a

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Speaker 1: portfolio hedge could get lots of leverage in that trade. Um,

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Speaker 1: that trade I think has largely played out. The forward

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Speaker 1: market is steepening already, so I think this is still

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Speaker 1: a good trade, but it's not going to protect your

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Speaker 1: portfolio the same way we thought it would earlier in

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Speaker 1: the year. So you're not recommending bitcoin, No, we're not.

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Speaker 1: That's not part of our two kit at the moment.

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Speaker 1: And I'll pause there alright, seem might become want to

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Speaker 1: want to look for I do have to wonder what

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Speaker 1: you're expecting for Friday. We do get that payrolls number,

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Speaker 1: and the market certainly is positioned for three basis point

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Speaker 1: rate cuts by December. What do we need to see

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Speaker 1: in order to maintain calm on Friday? Yeah, the calm

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Speaker 1: number I think is north of to one fifty, roughly

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Speaker 1: around consensus. Um. I think you see anything under a hundred,

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Speaker 1: and I think you have to start to think, well,

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Speaker 1: what does the Fed do in July? Is it? Do

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Speaker 1: we have to start the price twenty five basis point

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Speaker 1: cut in July? This conversation, I think gets gets very

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Speaker 1: myopically focused. What does the Fed do in July? The

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Speaker 1: base case, I think at this point has to be

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Speaker 1: that they cut twenty five basis points. Inflation expectations are low.

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Speaker 1: Growth is rolling over. But most importantly, the Fed hasn't

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Speaker 1: pushed back on this. They have not pushed back on

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Speaker 1: financial market pricing, So that should tell us that they

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Speaker 1: are relatively comfortable with the way the market is pricing

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Speaker 1: at this point. Um between now and then Power will

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Speaker 1: speak one more time, and assuming Friday's job job report

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Speaker 1: is okay, I think you'll have actually Powell lean into

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Speaker 1: and say, you know, what is okay with fifty is unlikely? Okay?

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Speaker 1: So what's the big risk on Friday? Oh? I think

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Speaker 1: the risk is that we start to see a crack

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Speaker 1: in the in the labor market. This has been the

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Speaker 1: foundation of the argument that there's no emergency happening right now.

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Speaker 1: The Fed's gonna cut, but it's doing it because it's

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Speaker 1: a recognition maybe that they hiked one or two times

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Speaker 1: too many last year. They're gonna get get down towards

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Speaker 1: a lower neutral rate. If the consumers cracks, which it

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Speaker 1: tends to be the last piece to crack um that

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Speaker 1: argument that they're they're they're only gonna hike sorry, excuse me,

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Speaker 1: only gonna cut one or two times looks less likely,

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Speaker 1: and it's more likely they'll have to cut aggressively. UM

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Speaker 1: So I think that's the real risk scenario. All right,

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Speaker 1: that's a good, good some ready for the FED. Let's

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Speaker 1: go across to Europe. We have a new ECB president,

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Speaker 1: Christine the Guard. What does that mean for you and

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Speaker 1: for markets? Do you think I think we just priced

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Speaker 1: out a hawkish leadership from the e c B. That's

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Speaker 1: got to be step number one recognition. Um. From what

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Speaker 1: we can deduce from her is that she's likely to

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Speaker 1: be supportive of accommodation for from the ECB going forward,

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Speaker 1: given the limited impact we've we've seen in her past statements.

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Speaker 1: Kind Of an interesting fact if we remember before ECB

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Speaker 1: instituted QUI the I m F report that year, six

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Speaker 1: months before QUWEE came out, she suggested in there that

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Speaker 1: que was warranted if inflation remained low for a long time.

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Speaker 1: So she even favored unconventional tools back in. I don't

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Speaker 1: see anything and what she said since then that would

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Speaker 1: suggest otherwise. So that's definitely encouraging the doves over in Europe.

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Speaker 1: I do want to just bring me this headline at

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Speaker 1: President Trump just tweeting that China and Europe are playing

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Speaker 1: a big currency manipulation game. You are seeing the dollar

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Speaker 1: move a bit on this UH weaketting a touch against

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Speaker 1: its major peers. I'm wondering how the dollar plays in here.

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Speaker 1: If the dollar does continue to weaken, is that supportive

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Speaker 1: for US bonds or not? Considering the fact that a

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Speaker 1: lot of Japanese investors are coming in an unhedged basis. Yeah,

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Speaker 1: this question gets tough that the monetary policy accommodation is

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Speaker 1: globally competitive at this point. So I think you have

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Speaker 1: to answer the where will currency go question with who

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Speaker 1: has more ammunition? Who has more ability to ease financial conditions?

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Speaker 1: Is it Japan? Probably not? In the developed world? Is

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Speaker 1: it Europe? Probably not, It's probably the FED. So between

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Speaker 1: your your timing, now, where does flight to quality come

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Speaker 1: into play? If you hit a downdrafting growth that's substantial

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Speaker 1: versus a FED that's trying to ease financial conditions to

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Speaker 1: prevent that from happening. So I think we're in a

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Speaker 1: period now where the dollar is likely to be um

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Speaker 1: biased to depreciate. But you're you're you're talking about a

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Speaker 1: timing game now, I think, and to be very clear,

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Speaker 1: my base case is not that we hit UH substantial

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Speaker 1: downdrafting growth over the next six to twelve months, but

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Speaker 1: we do. We do place a one and three chance

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Speaker 1: of that happening UH in the next six to twelve months.

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Speaker 1: It's quite high. Tom Kennedy, You'll have to come back

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Speaker 1: after July four holiday and elucidate more of your opinions,

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Speaker 1: because I've got a lot more questions. Tom Kennedy, Global

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Speaker 1: head of Macro and Fixing Strategy at JP Morgan Private Bank. Well,

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Speaker 1: Christine Lagarde, head of the i m F, is poised

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Speaker 1: to take the home of the European Central Bank after

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Speaker 1: Mario dragging leaves in October with us to help us

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Speaker 1: break this down. As Irene Finelle Higman, she is an

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Speaker 1: adjunct professor of International Affairs at Columbia University in New

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Speaker 1: York City. I mean, thanks so much for having us

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Speaker 1: to what extent was this announcement of miss Laguard a surprise? UM?

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Speaker 1: I think it was, first of all, thank you for

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Speaker 1: letting me come back on Bloomberg to discuss this. UM.

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Speaker 1: I think that this was a surprise, But at the

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Speaker 1: same time, everyone thinks it's a very smart choice. It

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Speaker 1: was a surprise because it was assumed that this would

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Speaker 1: go to a more conventional or traditional high level economist

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Speaker 1: or other head of a central bank. However, I want

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Speaker 1: to make one point because one of the comments has

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Speaker 1: centered that Madame Lagat would bring more political expertise rather

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Speaker 1: than economic central bank expertise. However, it's important to remember

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Speaker 1: that following the sovereign debt crisis in Europe from two

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Speaker 1: thousand ten to two thousand and fourteen, this was a

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Speaker 1: very unique time where for the first time, the I

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Speaker 1: m F under before that DSK and Lagoud, the e

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Speaker 1: c B under Tricia and and Hagi and the EU

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Speaker 1: Commission had to work extremely closely together for the famous

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Speaker 1: Troika to try to bail out these countries, both on

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Speaker 1: the sovereign nation basis and on the banking sector. So

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Speaker 1: the relationship and knowledge and connectivity between the I m

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Speaker 1: F and the e c B is far deeper than

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Speaker 1: it would have been in other circumstances. I mean, this

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Speaker 1: is a really interesting point, and I have to wonder

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Speaker 1: there have been a lot of comments about her nomination,

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Speaker 1: about Christine Lagard's nomination saying in general, being the head

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Speaker 1: of a central bank is becoming increasingly a political role

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Speaker 1: in less of an economics role. I'm wondering, given the

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Speaker 1: backdrop that is unique to the European Union, do you

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Speaker 1: think that is a leap too far and that this

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Speaker 1: really is an ECB specific necessity for a political kind

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Speaker 1: of figure rather than simply an economics one. I think

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Speaker 1: it's a combination. Um. I think clearly the e c

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Speaker 1: B right now has had marvelous leadership under Draggy, but

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Speaker 1: even more important, the e c B has taken on

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Speaker 1: a mandate and an expanded scope of functions far beyond

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Speaker 1: its original mandate pure price stability and monetary policy. Under

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Speaker 1: the new banking Union in Europe. The ECB today is

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Speaker 1: very much in the same position as the said on

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Speaker 1: having both extensive and expansive supervisory and monitoring power over

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Speaker 1: the major banks in the Eurozone area and in of

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Speaker 1: course all European banking sectors. So this already puts it

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Speaker 1: in a different position where clearly inter relationship between governments

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Speaker 1: and between the banks and the national central banks is

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Speaker 1: much tighter, is much greater than it would have been.

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Speaker 1: Whether this supplies more to the e c B uh

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Speaker 1: than elsewhere, that may be the case because of the

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Speaker 1: unique structure of the Eurozone, and also because a brand

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Speaker 1: new new commission is now also coming into play post crisis.

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Speaker 1: So I think all of these factors played together that

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Speaker 1: there is no longer a way to nicely compartmentalize the

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Speaker 1: economic side on the political side. So, Professor, what do

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Speaker 1: you think Madame Lagar's goals and strategy will be when she,

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Speaker 1: assuming she assumes this position. I think she will probably

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Speaker 1: follow very closely uh the Druggy both methodology and policy. Uh.

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Speaker 1: There seems to be very much a continuation UH. She

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Speaker 1: herself has uh seems to have had an expansive you

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Speaker 1: of the role of major both multilateral and central banks

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Speaker 1: in helping UH to stabilize economies maintaining stability, taking a

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Speaker 1: very cautious approach, not to assume that economies are, particularly

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Speaker 1: in Europe, suddenly doing well enough for anything dramatic to occur.

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Speaker 1: Yet at the same time, she will have to be

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Speaker 1: very careful because they're not that many tools left in

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Speaker 1: a sense, uh for the ECB to play with. UH.

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Speaker 1: So there I think she will need expert economic advice

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Speaker 1: on the technical side, But what will be very important

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Speaker 1: is to first of all established prestige and total credibility

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Speaker 1: in the markets, particularly in Europe, which I think she

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Speaker 1: has because of her contact, because of her connection with

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Speaker 1: the different governments and what she accomplished at the I M. S.

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Speaker 1: I think also she will be in a very interesting

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Speaker 1: position along with the new heads at the EU Commission

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Speaker 1: and Council, of dealing with Brexit, because Brexit is not

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Speaker 1: only the political set of issues, but it's very much

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Speaker 1: also the set of issues or what policy will the

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Speaker 1: Bank of England take, What will be the into relationship

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Speaker 1: between the ECB and the Bank of England, what maybe

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Speaker 1: the impact, So she will immediately be thrown much more

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Speaker 1: into that, and it will also be a question of

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Speaker 1: basically very carefully and slowly monitoring growth in Europe. So

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Speaker 1: I guess as you're talking about the need for the

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Speaker 1: sort of political savvy, I'm struck by the counter argument

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Speaker 1: to this, the idea the more political essential bankhead gets,

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Speaker 1: the less economic focus it will become in the more

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Speaker 1: frankly arbitrary policy will become more hinged on the popular

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Speaker 1: sentiment of the time. And I'm just wondering, you know,

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Speaker 1: precedent in terms of an increasingly political central bank that

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Speaker 1: gives you comfort rather than pause. I'm not sure that

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Speaker 1: the central bank or any central bank will necessarily respond

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Speaker 1: to more popular sentiment. And in fact, if anything we've

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Speaker 1: ability to push back on sudden and acute political pressure.

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Speaker 1: So I think that if it's an issue of suddenly

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Speaker 1: seeing the central Bank the e c B is functioning

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Speaker 1: as an arm of German policy, I don't think that

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Speaker 1: will be the case. Um. I think right now what

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Speaker 1: it does show is a tighter German French partnership which

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Speaker 1: clearly brilliantly orchestrated, bringing in a German woman now as

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Speaker 1: a new Urslabander Lean as a new EU Commissioner president

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Speaker 1: and Christine Lagat at the ECB. That's one element, which yes,

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Speaker 1: is more political, but fundamentally what we saw with Droggy,

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Speaker 1: what we seem to have seen all along with the FED,

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Speaker 1: they seem to be very cautious and more responding to

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Speaker 1: in fact all of the economic facts, rather than responding

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Speaker 1: more at hoc to any particular sentiment. Irene Finelnigman, thank

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Speaker 1: you so much for joining us today. Irene finel Hanigman.

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Speaker 1: Is an adject professor of International Affairs at Columbia University

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Speaker 1: in New York, talking about Christine Lagarde's nomination to head

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Speaker 1: the ECB. Initially, when we talked about blockchain, it was

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Speaker 1: a sort of sexy, unknown thing that was going to

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Speaker 1: lead to the disruption of traditional currencies. Now it has

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Speaker 1: actually got a little bit more on the back burner,

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Speaker 1: and yet it has been increasingly adopted as a mainstay

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Speaker 1: for a lot of industries, and here to talk about it.

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Speaker 1: I'm so glad to say, as Bridget of Redlagon, she

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Speaker 1: is Senior vice president of Global Industries, Clients, Platforms and

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Speaker 1: Blockchain for IBM. Bridget, thank you so much for being

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Speaker 1: with us. Can you first just talk a little bit

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Speaker 1: about the adoption of blockchain across a variety of industries

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Speaker 1: so far? Yes, thanks Lisa for having me on the show.

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Speaker 1: Stem so happy to talk about it. So Yes, there's

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Speaker 1: been a lot of hype, as you said, around the

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Speaker 1: crypto and elements on the currency elements of blockchain, but

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Speaker 1: the real aspect of blockchain allows is very complex. Um

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Speaker 1: multi party processes or workflows between customers, competitors and industries

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Speaker 1: can be safely stored and exchanged in a way that

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Speaker 1: they can be shared between all participants and once something

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Speaker 1: is put on a blockchain, it can't be changed. We

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Speaker 1: could talk about it being immutable, which means that anything

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Speaker 1: that needs to show provenance will actually work fantastically on

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Speaker 1: a blockchain. So um, we are working with many enterprise

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Speaker 1: blockchains across diverse industries like shipping, which we've got some

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Speaker 1: big news I'll talk to you about later, but also

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Speaker 1: trust and provenance for food and food safety, diamonds and jewelry,

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Speaker 1: commodities trading UM and energy trading off a grid, UM,

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Speaker 1: carbon credits, plastic recycling. Um. So it's really in real

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Speaker 1: life aspects for big, big industries like food and and shipping,

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Speaker 1: but also small industries like microfinance in Kenya where we

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Speaker 1: actually have a microfinance blockchain. So particularly excited to see

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Speaker 1: the real work, so particulous a sense of how blockchain

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Speaker 1: is being used in the global shipping supply chain. Yes,

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Speaker 1: so so that that that poll so so Actually, just

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Speaker 1: yesterday we announced that our trade lanes are shipping blockchain

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Speaker 1: for the shipping industry has An. We've announced that we

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Speaker 1: have two new members, Huppuck Lloyd and O N. E.

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Speaker 1: And this follows the news in May that CMA, CGM

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Speaker 1: and Mediterranean Shipping Company would be on the platform. We

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Speaker 1: started this a couple of years ago with MIRSK and

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Speaker 1: we are now in a situation where fifteen ocean carrier

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Speaker 1: lines are on the blockchain called trade lens Are blockchain,

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Speaker 1: and more than half of the world's ocean container cargo

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Speaker 1: will be available on this block chain. So so with

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Speaker 1: a users already, a hundred participants already. So why is

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Speaker 1: this important and what's the blockchain impact? Well, if you

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Speaker 1: think about it, nine of everything we use every day

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Speaker 1: is shipped over the oceans. It is the most primary

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Speaker 1: area of transport. And there's an estimate that around twenty

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Speaker 1: pc of the cost of shipping an item is in documents,

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Speaker 1: um and time wasted because of poor documentation. So an average,

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Speaker 1: an average simple shipment will have around two hundred documents exchange,

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Speaker 1: around three hundred different people involved, all on paper, all

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Speaker 1: on different systems. And so what we are able to

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Speaker 1: do is we've created an integrated, trusted blockchain platform where

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Speaker 1: every participant in the shipping cycle to think about a

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Speaker 1: freight forwarder, the person who's shipping the goods, the carriers

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Speaker 1: the customs, the ports, the the carrier, the land carrier

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Speaker 1: will all share that data on the block blockchain and

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Speaker 1: be able to instantly and there's kind of like one

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Speaker 1: version of the truths. So what that allows you to do, right,

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Speaker 1: is that anyone can quickly pinpoint where their cargo is

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Speaker 1: located the state of its availability. That reduces portant terminal congestion,

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Speaker 1: reduces time for truckers, reduces customs and inspections delays um

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Speaker 1: and ultimately shortens the lead time. So then so we

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Speaker 1: go ahead. I really wanted to just pick up on

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Speaker 1: one point. You said that twenty of shipping costs stem

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Speaker 1: from the documentation process, and I'm just wondering if you

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Speaker 1: could address how much you expect using the blockchain for

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Speaker 1: the shipping industry could reduce the cost. So so we

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Speaker 1: we we We are using data actually supplied by the

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Speaker 1: World Economic Forum, and the World Economic Forum believes that

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Speaker 1: reducing barriers within the international supply chain, which means really

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Speaker 1: the things I've talked about, you know, speeding speeding up,

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Speaker 1: reducing documentation, improving lead times, reducing delays, using spoilage because

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Speaker 1: things are sitting there. There's a view that that could

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Speaker 1: um increase GDP worldwide GDP by five and total trade

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Speaker 1: volume by fifteen percent. So those are those are those

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Speaker 1: are significant. Um if you think about economic impact factors,

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Speaker 1: both in terms of reducing costs but also um increasing

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Speaker 1: inclusion for people to be able to actually ship globally

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Speaker 1: and to export um so so again, using the World

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Speaker 1: Economic Forum, there's an estimate that improved these kinds of

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Speaker 1: improvements would improve by around fifteen percent. So we were

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Speaker 1: were we are, we are, we are we are. One

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Speaker 1: of the reasons I think that the whole industry is

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Speaker 1: is really stepping up and getting involved in this blockchain

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Speaker 1: is because it does benefit every participant in this ecosystem

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Speaker 1: to solve a problem it couldn't be solved in another way.

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Speaker 1: That is fascinating. I mean, the five percent GDP left

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Speaker 1: would be uh, you know, monumental. What the see how

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Speaker 1: that plays our Bridget Vancrology and think you so much.

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Speaker 1: Bridget is senior vice president of Global Industries, Clients, Platforms,

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Speaker 1: and Blockchain for IBM. Broadcom tries again after the debacle

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Speaker 1: with Qualcom. Broadcom now in advanced talks to buy cybersecurity

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Speaker 1: from Symantec Corporation. Cybersecurity obviously a very hot field right now,

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Speaker 1: given how many threats there are from hackers. Joining us

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Speaker 1: now to talk about the deal, Man Deep Sing, senior

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Speaker 1: tech industry analyst for Bloomberg Intelligence, very much in the

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Speaker 1: office and present and analyzing this deal onto this pre

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Speaker 1: July four day in New York City. So, uh, Man Deep,

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Speaker 1: what can you tell us about this deal that you

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Speaker 1: find most interesting? Well, this steal is very similar to

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Speaker 1: what Broadcom did with c A last year, and Water

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Speaker 1: tells you is the company is trying to diversify from

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Speaker 1: hardware to software. It's fairly obvious this deal has the

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Speaker 1: exact same characteristics. Four billion dollars in revenue from Semantic

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Speaker 1: and the company Semantic has been, you know, under performing

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Speaker 1: for the last three years. When you look at the

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Speaker 1: cybersecurity market, which is extremely fragmented, Semantic hasn't been able

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Speaker 1: to turn itself around. They have had four CEO changes

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Speaker 1: and now you know they don't even have a permanent CEO.

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Speaker 1: So it looks like it's right in the playbook of

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Speaker 1: hawkt Hand, the CEO of Broadcam. He really could execute

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Speaker 1: on this one. And there are some synergies that obviously

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Speaker 1: will come about when this deal gets announced or these

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Speaker 1: Broadcom folks are really active on the M and A front.

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Speaker 1: I mean, is Lisa mentioned Qualcom that deal was blocked

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Speaker 1: by President Trump, but they bought ce A last year.

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Speaker 1: Is the street backing up this management in this board

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Speaker 1: in terms of this aggressive acquisition policy? They are and

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Speaker 1: Broadcom is a serial acquirer. You can see that. You know,

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Speaker 1: It's something that I feel it's in the DNA of

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Speaker 1: the company, and they execute very well. So if this

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Speaker 1: anybody out there, you know, and when it comes to

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Speaker 1: large tech that can really turn around Semantic and fix it,

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Speaker 1: it's going to be Broadcom. And and so from that perspective,

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Speaker 1: it makes a lot of sense when you talk about

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Speaker 1: synergies what are they because I do think of Broadcom

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Speaker 1: as being a hardware story and I think of Semantic

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Speaker 1: as being a software company. Sure, so what Broadcom has

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Speaker 1: showed with CIA integration is obviously there are some revenue

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Speaker 1: synergies because they cater to an enterprise customer base. So

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Speaker 1: Semantex's revenue half of it comes from enterprise. So over

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Speaker 1: there you could see now that Broadcom has a footprint

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Speaker 1: and infrastructure software with CIA integration, they can really leverage

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Speaker 1: Semantic on the enterprise side. On the consumer side, which

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Speaker 1: is Semantec's flagship Norton product and the Lifelog business, I'm

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Speaker 1: not sure if there are any imminent synergies, especially on

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Speaker 1: the revenue side. On the cost side, yes, there are

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Speaker 1: some synergies that will come about simply because this company

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Speaker 1: is too big. Their skills in marketing expenses are very

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Speaker 1: high for Semantic, and you can see there are some

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Speaker 1: cost synergies over there. So obviously this deal has not

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Speaker 1: been announced. Speculating that it will occur any senses to evaluation.

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Speaker 1: I'm just looking at Broadcom stockdown about almost four percent today. Um,

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Speaker 1: is there a risk here that they might overpay? Well,

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Speaker 1: one thing is they're more likely to go for a

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Speaker 1: stock deal simply because Broadcom trads at about five to

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Speaker 1: six time sales. Semantech trads at about three to four

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Speaker 1: time sales. So I can see, you know, why a

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Speaker 1: Broadcom may be interested in using their stock more. And

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Speaker 1: we've seen that salesforce, you know, buying tablet with an

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Speaker 1: all stock offer. So given the leverage situation with Broadcom,

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Speaker 1: they're more likely to use some stock here. One thing

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Speaker 1: I'm curious about is why is Broadcom so aggressive. Why

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Speaker 1: is their playbook acquisitions to such a degree. Well, look

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Speaker 1: at it this way. Broadcom's DNA at the company is

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Speaker 1: built around hardware. They're really trying to you know, uh

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Speaker 1: and and hardware businesses have lower ebit dum margins operating margins,

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Speaker 1: so I think what software gives them. In this case,

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Speaker 1: Semantech has operating margins over thirty So now with c

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Speaker 1: A and Semantech broadcomps operating margin profile goes up simply

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Speaker 1: because software businesses are attractive. So are we going to

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Speaker 1: see more M and A here in the security cybersecurity space?

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Speaker 1: I mean, Lisa correctly pointed out that, boy, it's it's

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Speaker 1: a hot area. Do you think it's going to see

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Speaker 1: more consolidation there? Absolutely? Cybersecurity is one area in the

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Speaker 1: of the software market that's very fragmented. There are new

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Speaker 1: attacks happening every day, there are new companies popping up

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Speaker 1: every day that solve those attacks. And you know, the

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Speaker 1: fragmentation is a nightmare for enterprises because they're just putting

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Speaker 1: band aids, you know, putting one solution on top of another.

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Speaker 1: And from an enterprise perspective, they want to see some

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Speaker 1: consolidation in the cybersecurity space. So if you've already seen

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Speaker 1: the likes of Paul Altel and Fortnet, and you know

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Speaker 1: the next gen firewall security companies being acquisitive, you're gonna

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Speaker 1: see more of fit. I think with this deal, I

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Speaker 1: feel like people just want to throw all the smart

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Speaker 1: people in cybersecurity programming in a room and say, just

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Speaker 1: go figure out what's next. I say, if I were

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Speaker 1: a young engineer coming out of school, I'd be like,

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Speaker 1: I'm gonna be a forget the app thing. I'm gonna

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Speaker 1: be a cybersecurity expert, because that's just like a growth

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Speaker 1: second industry for I can't forever. Do you have time

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Speaker 1: to have lunch with my son? Of course? Excellent men,

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Speaker 1: Deep saying thank you so much. Mendep Has, senior tech

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Speaker 1: industry annalyst for Bloomberg Intelligence. Thanks for listening to the

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Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa

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