Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I rememberly checking San Francisco and this is
Speaker 1: Bloomberg Technology. Coming up in the next hour is the
Speaker 1: war stock selloff in two years, a late afternoon drop
Speaker 1: after a surprisingly high inflation report. Tech hit hard. We'll
Speaker 1: tell you how. Plus Twitter shareholders of Proof must forty
Speaker 1: four billion dollar buyout, as the former head of security
Speaker 1: testifies on Capitol Hill saying Twitter's executives are misleading the
Speaker 1: public and security risks are a ticking time bomb. What
Speaker 1: it means for Musk's attempt to get out of the deal,
Speaker 1: and my one on one with Melinda French Gates on
Speaker 1: a new report from the Gates Foundation that shows the
Speaker 1: Wall isn't doing so great. We also talk about the
Speaker 1: changing philanthropic landscape, how she's taking action post route, and
Speaker 1: her relationship with Billy. We're gonna get to all of
Speaker 1: that in a moment before let's stick further into the
Speaker 1: cell off of what it means. Victoria Green is the
Speaker 1: chief investment officer at g Squared Private while she joins us. Now, Victoria,
Speaker 1: what do you make of this, and so suddenly in
Speaker 1: the session. Uh, today was when a reality met expectations
Speaker 1: on inflation, and I think the market had gone into this.
Speaker 1: Maybe the Fed isn't pivoting, but we're definitely a peak inflation,
Speaker 1: and today was a wake up and a cold slap
Speaker 1: that inflation is still here and it's very, very sticky inflation.
Speaker 1: There's no on your just about energy. I think the
Speaker 1: surprise on food and housing, medical expenses, veterinary care, A
Speaker 1: lot of areas that we thought was getting better really
Speaker 1: were it. So I think today was a step back
Speaker 1: into the reality. The number one, the Fed's gonna go
Speaker 1: seventy five bass points, Number two four present terminal rate
Speaker 1: maybe too low. And number three we're still in a
Speaker 1: sticky inflationary environment that may prove the difficult to bring down,
Speaker 1: especially food prices. Right now, what do you make of
Speaker 1: what happened with tech? In particular? What distinguishes the tech
Speaker 1: part of this sell off from the rest of the
Speaker 1: sell off? Sure, so tech stocks tend to be very
Speaker 1: growthy stocks, higher multiples, promising higher than the market growth, right,
Speaker 1: That's why you buy them. They're supposed to grow faster,
Speaker 1: but you're paying more today for a dollar future earnings,
Speaker 1: And every time you see something like this for real
Speaker 1: rates arising, the fattest hiking. It really kind of checks
Speaker 1: of how long the duration stock do you want? You
Speaker 1: kind of want stocks that are awarding you for owning
Speaker 1: them now, and most tech stocks tend to be needing
Speaker 1: growth and promising further future growth. So right now it's
Speaker 1: kind of a show me, like what can what what
Speaker 1: kind of income can you produce for me? How successful
Speaker 1: are you? And you didn't see anybody that was immune
Speaker 1: from me today. It was a total washout on tech
Speaker 1: and and any of them, including the apples and the
Speaker 1: market stofts of the world. But you have to consider
Speaker 1: very blea chip tech stocks did not hold up well,
Speaker 1: and we saw like the semiconductor sector really takes some
Speaker 1: more pain today, and I think a lot of that
Speaker 1: is repressing expectations for global growth. The fact we're going
Speaker 1: to be in a high key inflationary environment and the
Speaker 1: fact that it's a very very very high probability this
Speaker 1: continues to slow down, and that puts pressure. Like we
Speaker 1: saw with the video, if we see PC and gaming slowdown,
Speaker 1: people are not upgrading their computers as frequently that's just
Speaker 1: gonna put pressure on a heating the growth multiples they
Speaker 1: need to go because the worst thing you want to
Speaker 1: do is own a growth stuff that stopped growing, because
Speaker 1: then what do you really own your own add So
Speaker 1: the big question is, of course, are the market is
Speaker 1: going to be back up tomorrow? What do you think?
Speaker 1: Or is this could today be some sort of turning
Speaker 1: point to a further drop, a more prolonged drop in market. Yeah,
Speaker 1: we unfortunately do see this as a bear market rally
Speaker 1: that we're going to retest our lows. You know, we
Speaker 1: did see the supports hold around thirty nine on the
Speaker 1: SFP five hundred, so you do have a little bit
Speaker 1: of a support there. But I think as we digest,
Speaker 1: you really have about a week now between now and
Speaker 1: when the Fed speaks, and I think people are going
Speaker 1: to get very nervous about what the Fed's gonna to do.
Speaker 1: You saw some traders talking about a hundred basis points,
Speaker 1: you know, is it gonna be fifty and fifty to
Speaker 1: end out the year? And this really this reality of
Speaker 1: the tightening cycle. And then step back, not just about
Speaker 1: the United States, but about what other economies around the
Speaker 1: world they're doing, how much they're tightening rates. What that
Speaker 1: may do for adjustable rate mortgages. You know in the
Speaker 1: US we're only about seven percent adjustable right now, but
Speaker 1: now in Australia, the UK, Spain, they're very much higher
Speaker 1: adjustable rate and they're gonna be hit with these industrates.
Speaker 1: So I think it's too early to buy the dip.
Speaker 1: At some point we'll hit oversold again, but I think
Speaker 1: we're gonna retest down to the thirty six hundreds. You
Speaker 1: might get a relief rally, but don't get fomo about
Speaker 1: the market going up. I think you've got more downside pressure.
Speaker 1: So how are you deciding or changing uh potential decisions
Speaker 1: about where you park your money and how much of
Speaker 1: it goes into growthy uh to use your word tech
Speaker 1: and not. I think right now it's more of the
Speaker 1: value play the blue chip pelly. We want stocks that
Speaker 1: have defensible motes, you know, what are their cash flow
Speaker 1: is gonna look like if the world continues to slow.
Speaker 1: The problem with the core inflation rising is it really
Speaker 1: directly pressures the consumers. There's nowhere to hide, doesn't matter
Speaker 1: if you're eating out or at the grocery store. You know,
Speaker 1: when we have some factors that are gonna make food worse.
Speaker 1: You know the Avian flu that has caused the shortage,
Speaker 1: so eggs and chicken are more expensive. I think you
Speaker 1: really want to hide in quality stocks. Also, the land
Speaker 1: of Tina, right, there is no alternative. As these treasury
Speaker 1: yields come up suddenly, you kind of do have an
Speaker 1: alternative to park some in some really short tragury bills.
Speaker 1: Don't wanna take any duration risk. But if you look
Speaker 1: across the landscape, you now jury what bills yielding well
Speaker 1: above the average diving and yield, and we know those
Speaker 1: are gonna keep coming up. So the world of Tina
Speaker 1: is also rotating, and you may see a flight to safety.
Speaker 1: You saw the tear yields hit the highest in fifteen years.
Speaker 1: You're seeing a lot of pressure on the rates market.
Speaker 1: But if you hide at that very short end, you
Speaker 1: may be able to make some money as you wait
Speaker 1: out the worst of this. All right, Victoria Green g
Speaker 1: Squared Private Wealth. Always good to have you, Victoria, Thanks
Speaker 1: for breaking it down. Coming up all you needed out
Speaker 1: about cestimony from the Twitter whistle blower and what it
Speaker 1: means for Elon Musk. That is next. This is Bloomberg
Speaker 1: It took me maybe thirty minutes to reach out to
Speaker 1: an employee and say, what do we know about this person?
Speaker 1: And then it only took that person maybe ten minutes
Speaker 1: to get back to me and said, Okay, here's who
Speaker 1: they are. This is the address where they live, this
Speaker 1: is where they are physically at this moment. They're on
Speaker 1: their phone. We know their phone number. We also know
Speaker 1: all of the other accounts that they've tried to set
Speaker 1: up on the system and hide, and we know who
Speaker 1: they are on the other social media platforms as well.
Speaker 1: It was an edge of your seat kind of testimony
Speaker 1: from former Twitter executive turn whistleblower Peter's at cos at Co,
Speaker 1: slamming Twitter's management, it's operations, and calling its security risks
Speaker 1: a ticking time bomb. Here's some of what told the
Speaker 1: Senate Judiciary Committee Twitter leadership is misleading the public, lawmakers, regulators,
Speaker 1: and even its own board of directors. What I discovered
Speaker 1: when I joined Twitter was that this enormously influential company
Speaker 1: was over a decade behind industry security standards. To put
Speaker 1: it bluntly, Twitter leadership ignored ignored its engineers because key
Speaker 1: parts of leadership lacked the competency to understand the scope
Speaker 1: of the problem. But more importantly, their executive incentives led
Speaker 1: them to prioritize profits over security. They don't know what
Speaker 1: data they have, where it lives, or where it came from,
Speaker 1: and so unsurprisingly they can't protect it. And this leads
Speaker 1: to the second problem, which is the employees then have
Speaker 1: to have too much access to too much data and
Speaker 1: to too many systems. There was not an easy ability
Speaker 1: for me to mind which engineers had logged into which
Speaker 1: systems and what and what data that they had accessed.
Speaker 1: I did explain this to Mr Dorsey. My understanding is
Speaker 1: he did not understand this prior to bringing me in,
Speaker 1: and that was one of the reasons that he was
Speaker 1: understand it. Now. I believe after seeing CEO, does he
Speaker 1: understand this? Um? I believe since he has been there
Speaker 1: for ten years and rose up through the ranks in engineering,
Speaker 1: and he has talked to the engineers and they have
Speaker 1: told that yes. I believe. Yes. I'm reminded of one
Speaker 1: conversation with an executive when I said, I am confident
Speaker 1: that we have a foreign agent, and their response was, well,
Speaker 1: since we already have one, what does it matter if
Speaker 1: we have more? Let's keep growing the office here to
Speaker 1: discuss Adam Kovakovitch, Chamber of Progress founder and CEO, as
Speaker 1: well as Bloomberg's own Alex Borenka, who covered the hearing
Speaker 1: today on our live blog. Adam, I want to start
Speaker 1: with you. What was your initial reaction to Za Those
Speaker 1: testimony seemed like not a good day for Twitter. Yeah,
Speaker 1: he claimed that the company's security was lacking. I think
Speaker 1: the company, we know the company has disputed that in detail,
Speaker 1: and others have pointed out it was his responsibility to
Speaker 1: strengthen and security. This role. This question of whether the
Speaker 1: company's security is sufficient, I think will ultimately be one
Speaker 1: for the Federal Trade Commission to determine. I will say
Speaker 1: that when I worked with in tech companies, you know,
Speaker 1: no company lights have likes having their internal disputes and
Speaker 1: challenges are publicly. That may be especially true here given
Speaker 1: that there were clearly conflicts between Peter's Echo and Paragua Aggerwal,
Speaker 1: But ideally even the dust settles companies can often learn
Speaker 1: from criticism and improve from it. I think with with
Speaker 1: security that it's a hard topic because despite the kind
Speaker 1: of the political table pounding, the reality is nuanced. Twitter
Speaker 1: has had a few high profile hacks, but they're they're
Speaker 1: not a regular occurrence. And I think in the realm
Speaker 1: of security, you know, every day without a hack, of
Speaker 1: which Twitter has had many, is a success. Of course,
Speaker 1: there's no prize for a day without without breaches? Could
Speaker 1: could most companies in including Twitter do more to improve security?
Speaker 1: Almost certainly? Does Twitter do security better than most companies?
Speaker 1: Almost certainly, Alex, what were your big takeaways about, you know,
Speaker 1: sort of the big revelations here, and uh, you know
Speaker 1: what this might actually mean for its dispute with Elon Musk,
Speaker 1: given that it didn't seem like bots and spam, which
Speaker 1: his his his main point of contention really came up. Yeah,
Speaker 1: so I'll start with the takeaways that are not Musk related.
Speaker 1: Related to what Adam was saying. There was allowed a
Speaker 1: lot of political table pounding and a lot of calls
Speaker 1: for increase enforcement, increase regulation, and Emily, there are some
Speaker 1: kind of surprising allies in those calls. You saw folks
Speaker 1: like Lindsay Graham, the Republican from South Carolina, aligning with
Speaker 1: Elizabeth Warren, the Democrat from Massachusetts, saying we're working on
Speaker 1: something to um better regulate tech companies. Your word, Amy
Speaker 1: Klobuchar and Chuck Grassley also lean into this idea, and
Speaker 1: Senator Blumenthal actually suggests that maybe we need a new
Speaker 1: regulatory agency to regulate big tech. All of that is
Speaker 1: very much in the realm of d C, and this
Speaker 1: ongoing conversation of the role of big tech and UH
Speaker 1: where regulation comes in. The Ellen Musk part UM kind
Speaker 1: of plays into a little bit of that. What we
Speaker 1: heard from Zach Coo in terms of UM what he
Speaker 1: described as almost a cultural UM kind of aspect of
Speaker 1: the company, where he said the company kind of fights fires,
Speaker 1: moves from fire to fire. UM was the quote, makes
Speaker 1: short term changes. Isn't thinking long term about security? They're
Speaker 1: only really thinking long term about growing revenue and users.
Speaker 1: So UM, that point right there, Emily, even though it's
Speaker 1: not specifically UM one of the three reasons why Ellen
Speaker 1: has given to back out of the deal UM, I
Speaker 1: think that would be the one that Musk might be
Speaker 1: most interested in. He has kind of leaned on this
Speaker 1: idea that the board, UM and the executives have misrepresented data.
Speaker 1: So while we didn't hear a lot about bots or
Speaker 1: spam accounts, that cultural element might be the one that
Speaker 1: we see pulled into the argument that Musk is poised
Speaker 1: to take into court in October. Interesting, Adam, what do
Speaker 1: you make of that? Are Bloomberg Intelligence analysts have concluded
Speaker 1: they don't think this testimony will have a material adverse
Speaker 1: impact on Twitter's attempt to hold Musk to this deal.
Speaker 1: They still think there's a seventy seven zero percent chance
Speaker 1: this deal goes through. Um, you know, what do you
Speaker 1: think about what zach Co said that could potentially rise
Speaker 1: to the level of impacting whether or not this still
Speaker 1: happens at all. Well, I'm not a stock analyst, I
Speaker 1: do agree. One of the things that was surprising to
Speaker 1: me was the extent to which the bots question really
Speaker 1: didn't come up today. And that was surprising to me
Speaker 1: because in the past of the things we have seen
Speaker 1: a lot of is particularly Republicans in Congress, fairly eager
Speaker 1: to uh talk about Twitter in a way that you know,
Speaker 1: is very much in line with Musk's goals, And so
Speaker 1: that was a bit of a surprise for me. But
Speaker 1: I don't think that I you know, I think that
Speaker 1: that is really a separate process, right And what was
Speaker 1: unique to me about this was interesting because I compared
Speaker 1: this a lot to the Francis Howgan testimony last year
Speaker 1: around Facebook, which I think led policymakers to introduce a
Speaker 1: number of bills. There were eight different bills introduced last
Speaker 1: year as a result of the Howgan testimony, mostly dealing
Speaker 1: with social media. But today's testimony was really uniquely about
Speaker 1: Twitter and its security practices. I think that question is
Speaker 1: most likely to be looked at in great to tail
Speaker 1: by the Federal Trade Commission. And then the question of
Speaker 1: bots really, which didn't come up today, is, as we know,
Speaker 1: a central question of the litigation that that the companies
Speaker 1: engaged with musque. So I don't think that there wasn't
Speaker 1: anything necessarily new today that came out of the hearing
Speaker 1: that I think changes the direction of the litigation. Well,
Speaker 1: and comparing it to Frances how testimony, UM, you know
Speaker 1: that was really impactful, seemed to have a significantly adverse
Speaker 1: effect on h Facebook, which you know has since changed
Speaker 1: its name, has been you know, still working on um
Speaker 1: trying to clean up its reputation in part in response
Speaker 1: to that and of course other things. Um, you know,
Speaker 1: one more question about the Elon Musk part of this
Speaker 1: um Alex Twitter has responded saying that they stand ready
Speaker 1: and willing to complete the merger with Elon Musk. They say,
Speaker 1: point six percent of shareholders today approved Elon Musk doing
Speaker 1: this deal. That was expected. But you know, Twitter still,
Speaker 1: Twitter still saying we're gonna make this happen whether you
Speaker 1: like it or not. Yeah, it's a it's a funny situation, Emily, right, Um,
Speaker 1: where the owner could be a man who has now
Speaker 1: had three ticks in the IDOL want to do this
Speaker 1: deal bucket. Um. I think that that shareholder approval that
Speaker 1: you saw today is significant. Um. It was expected, but
Speaker 1: it is significant. UM that at least that very large
Speaker 1: majority thinks that this is the best kind of path
Speaker 1: forward for shareholder value for this company. Um. But certainly,
Speaker 1: Emily will we'll be following the play by play going
Speaker 1: into October. We've already seen a little bit of drama.
Speaker 1: The judge coming to Mosque seeing you need to give
Speaker 1: up your text messages. Uh, the judge going to Twitter
Speaker 1: saying you need to reveal more data. So they're certainly
Speaker 1: going to be UM more fencing back and forth as
Speaker 1: we go into the next couple of months here. Um,
Speaker 1: but this at least is kind of another checkbox for
Speaker 1: this deal to continue. To that litigious end that we're
Speaker 1: set on right now. Now, Adam, one of the interesting
Speaker 1: things that Zacho said is that Twitter is more concerned
Speaker 1: about foreign regulators than US regulators. What did you make
Speaker 1: of that? And and and if it'll goed, uh, potentially
Speaker 1: the FTC into taking more aggressive action or other regulators. Yeah,
Speaker 1: as you as you point out, the FTC has an
Speaker 1: existing consent decree that's eleven years old with Twitter. It
Speaker 1: will surely take a close look at whether um it
Speaker 1: is living under the terms of that. But I don't
Speaker 1: think there's any doubt. One of the things that was
Speaker 1: a big topic of conversation today was whether the federal
Speaker 1: government has enough resources. You saw Lindsay Graham talking about
Speaker 1: let's create a new agency, but the reality is that
Speaker 1: we're not funding the agencies we have. The FTC. Last
Speaker 1: year there was a proposal, for example, by the Biden
Speaker 1: administration to create a whole new bureau at the FTC
Speaker 1: focusing on privacy and data security. And that's a very
Speaker 1: good idea, but unfortunately Republicans killed that proposal right that
Speaker 1: was going to be a billion dollars and more funding,
Speaker 1: including some of the same Republicans who were complaining today
Speaker 1: about the FTC not doing enough. So there's a lot
Speaker 1: more policymakers can do. They can also pass a consumer
Speaker 1: privacy bill. They've been stalling on that, and the FTC
Speaker 1: has been looking at this question of issuing more comprehensive
Speaker 1: data security rules for all company needs to follow. They've
Speaker 1: been reluctant to do that. They prefer and said to
Speaker 1: reach settlements with individual companies, but the problem is that
Speaker 1: doesn't set clear security rules for other companies to follow.
Speaker 1: They've just recently kicked off a rulemaking and I think
Speaker 1: there's a good case to be made that rulemaking should
Speaker 1: focus as much on data security as on privacy. Uh, Alex,
Speaker 1: what's next? Uh, we're now about a month away from
Speaker 1: the day that this trial is supposed to start. Elon
Speaker 1: Musk the Twitter, Yeah we are. What's next is going
Speaker 1: to be continuing this kind of evidentiary process for them
Speaker 1: against this backdrop of what's going on in d C. Emily, Um,
Speaker 1: you know there's a home in security hearing tomorrow where
Speaker 1: one of Twitter's executives will be there alongside Meta YouTube
Speaker 1: and TikTok execs as well. So I think for Twitter
Speaker 1: they'll have these kind of um dueling perhaps distractions, um,
Speaker 1: big ones at that for whether or not this deal
Speaker 1: gets done. With Musk, we saw that Musk was walking today.
Speaker 1: He was tweeting, perhaps a little bit cheekily. But we
Speaker 1: do know that with Elon Musk sometimes the jokes do
Speaker 1: turn serious. Um. So I'm sure that there will be
Speaker 1: continue to be um kind of bobs and weaves on
Speaker 1: that side of the deal as well, in as in
Speaker 1: d C. In terms of if there is any kind
Speaker 1: of action here, um to Adam's point, after Francis Howgan,
Speaker 1: the Facebook whistle blower, did um, you know, go down
Speaker 1: to Washington. There are a lot of bills proposed. There
Speaker 1: hasn't been a ton of significant changes yet. So if
Speaker 1: there is any moves on the kind of political worry
Speaker 1: side on data privacy, um, if history is any guide,
Speaker 1: those might be a little bit slower than what we
Speaker 1: might see on the than the the deal that is
Speaker 1: expected to go to court in October. All right, bloombergs
Speaker 1: Alex Barnka, Adam Kovakovich of the Chamber of Progress, thank
Speaker 1: you both for your commentary today. Obviously, we're going to
Speaker 1: continue to watch every twist and term Meta says it
Speaker 1: needs its rivals to share some of their most closely
Speaker 1: held secrets in order to defend its antitrust suit. Meta
Speaker 1: has subpoenut a hundred thirty two companies for documents, including snap,
Speaker 1: TikTok and Clubhouse, and it says this will help its
Speaker 1: argument against the FTC lawsuit claiming the company has a
Speaker 1: monopoly in social networking. A trial isn't likely until at
Speaker 1: the earliest. And it was a huge night for streamers,
Speaker 1: particularly HBO and Apple at the Emmy's last Night Warner Brothers, Discovery,
Speaker 1: It's HBO taking home twelve awards, mostly thanks to Succession
Speaker 1: and White, Lotus and Apple to call the Top Comedy
Speaker 1: Award for ted Lass, Netflix scoring three Emmy wins, including
Speaker 1: Outstanding Lead Actor for Squid Game. The Emmys have become
Speaker 1: a focal point of the competition between the largest media
Speaker 1: and tech companies and their streaming services. Welcome back to
Speaker 1: Bombre Technology and Emily Check in San Francisco. Let's Dick
Speaker 1: with the techdown turn bringing Robert camp Will, portfolio manager
Speaker 1: at Upholdings. Robert, how are you moving your money around
Speaker 1: right now after a day like today? Well relative to
Speaker 1: earlier this year when we kept watching tech fall today,
Speaker 1: the entire market fell with it, So that's a little
Speaker 1: bit of a different setup for investors. And you've you've
Speaker 1: got a lot of investor conferences going on right now
Speaker 1: that software companies are reporting reasonably strong numbers. They're not
Speaker 1: softening their guidance, they're not pre announcing a bad quarter.
Speaker 1: So we have we have yet to hear on the
Speaker 1: micro side of things from what companies are reporting that
Speaker 1: things have in fact worsen. But what what you're continuing
Speaker 1: to see is these multiples are moving around really fast.
Speaker 1: And you know that came from the ten year interest
Speaker 1: rate expectations being the highest they've been in twelve years,
Speaker 1: and so we've seeing that hit tech the hardest because
Speaker 1: as as you've covered, you know these boltics will come
Speaker 1: down a lot. But we still see some pockets of
Speaker 1: expensiveness in tech, So we don't think the market is
Speaker 1: necessarily bottomed everywhere. Where are the pockets. Well, you've got
Speaker 1: Snowflake still at at at thirty times revenue, and it's
Speaker 1: a it's an excellent company with an excellent product, and
Speaker 1: their customers are really excited about giving the company more money,
Speaker 1: but they're also plowing every dollar of gross profit into
Speaker 1: sales and marketing. So as we've been talking more about
Speaker 1: this profitless tech um, we've been we've been seeing the
Speaker 1: tech universe splinter here a bit where you've got companies that,
Speaker 1: let's say streaming and e commerce that have been showing
Speaker 1: low returns on investment for for years now, and it's
Speaker 1: unlikely that that those companies are going to recover because
Speaker 1: Amazon building another fulfillment center is not actually generating a
Speaker 1: lot of cash flow back to Amazon. But on the
Speaker 1: other side of the spectrum, with what Meta is building,
Speaker 1: with what's Google, Google's building every dollar that Google puts
Speaker 1: into capex or new head count, they see sixty more
Speaker 1: cents of operating cash in the next year. So we
Speaker 1: see two worlds forming within the tech universe here with
Speaker 1: with with those that are generating, you know, real incremental
Speaker 1: positive returns and are rapidly shifting our portfolio there as
Speaker 1: quickly as we can. So the question remains, of course,
Speaker 1: how much worse is this gonna get. I mean, a
Speaker 1: lot of people thought that, you know, J. Powell was bluffing,
Speaker 1: and I wonder if this is some vindication for him
Speaker 1: and for the FED, and does it make you more
Speaker 1: inclined to say, yes, we're heading into a recession. Well too,
Speaker 1: if we're going to talk economics, it does the more
Speaker 1: credibility that J. Powell has, uh, the better off the
Speaker 1: US dollar is, and what it would happen since his
Speaker 1: last couple of hawkish comments was he said, no matter
Speaker 1: how things maybe looking like they're going to improve, I'm
Speaker 1: gonna stay stubborn with my interest rate hikes. And what
Speaker 1: the market did over the past few weeks is they
Speaker 1: heard those comments, they thought, wow, is inflation really going
Speaker 1: to get better? Because that's good for everybody. And you
Speaker 1: saw the market trade up. We were up almost five
Speaker 1: and a half percent this month going into today, and
Speaker 1: now we're starting over today as if the month is
Speaker 1: starting all over again. So I think that that J.
Speaker 1: Paul has absolutely rebuilt some of the credibility that he
Speaker 1: lost in being behind the curve, you know, a year
Speaker 1: or so ago. And you know, if he's able to
Speaker 1: sustain that, we're going to have a stronger dollar. And
Speaker 1: that's that's a great, great news for for all domestic
Speaker 1: investors here. So what do you think happens tomorrow? Right?
Speaker 1: You know we're all wondering, is this is this a
Speaker 1: bottom is do we have further to fall or are
Speaker 1: we going to swing? You know, do we swing back
Speaker 1: into the green? And today's just a blip in reaction
Speaker 1: to this, you know, bad inflation data, um the you know,
Speaker 1: we we we we do our best to analyze the present,
Speaker 1: not predict the future. The market does have a funny
Speaker 1: way of of of going in the opposite direction that
Speaker 1: it did the day before, though rarely in the same magnitude.
Speaker 1: There's also a ton of studies out there that also
Speaker 1: talk about the night effect and how you know, most
Speaker 1: of the money that's actually made in the stock market
Speaker 1: happens when the stock market is closed, and that very
Speaker 1: well could happen in a situation like this if if
Speaker 1: folks come in tomorrow thinking the market is oversold. But
Speaker 1: you look at where we are in the quarter, it's
Speaker 1: we're nearing the end of September, We're nearing the end
Speaker 1: of the third quarter. Companies are gonna we're about four
Speaker 1: to five weeks away from another earning season. Uh. And
Speaker 1: that's a really important one because we're now in that
Speaker 1: period of the year where you're already seeing growth rates accelerate.
Speaker 1: Adobe has been reporting e commerce numbers that have been
Speaker 1: accelerating over the year before. Uh, they've been reporting relatively
Speaker 1: low price inflation in digital goods specifically. So what you're
Speaker 1: gonna be looking for in these earnings calls just a
Speaker 1: month or so away is that businesses are continuing to
Speaker 1: report strong numbers in spite of some pretty challenging macro headlines. UH.
Speaker 1: And so we're reasonably we feel reasonably good about the
Speaker 1: businesses that that we're owning here going into the fourth quarter.
Speaker 1: And you don't get a lot of opportunities to buy
Speaker 1: companies of this magnitude, with these growth rates and these
Speaker 1: cash flow margins that you know, a lot of the
Speaker 1: tech space is offering right now. Robert Cantwell Upholdings Portfolio Manager,
Speaker 1: always going to have you here. Robert, thank you for
Speaker 1: stopping by coming up. Traditional finance and blockchain collide. What
Speaker 1: is behind the new pilot project from Swift, the global
Speaker 1: secure messaging system for financial institutions, and what it means
Speaker 1: for people moving money everywhere? Mr is Bloomberg. It's time
Speaker 1: now for our crypto reported big news the world of
Speaker 1: finance today. Big news Swift, the messaging system used by
Speaker 1: financial institutions globally to convey instructions on tens of millions
Speaker 1: of transactions every day is testing out blockchain. Our crypto
Speaker 1: contributationally Bostic has more on the Shanale. What exactly happened today. Well,
Speaker 1: the idea here is that blockchain can be a key
Speaker 1: piece here of what is critical financial infrastructure. When you
Speaker 1: think about Swift, you don't think about a day to
Speaker 1: day emily, because it's really underlying the entire global financial system,
Speaker 1: barring a few regions as we know, remember a certain
Speaker 1: Russian banks were caught off in Swift in the wake
Speaker 1: of the start of the war in Ukraine. But remember
Speaker 1: this does connect banks globally. It is essentially a lifeline
Speaker 1: between the banks in terms of being a messaging system
Speaker 1: and a way to really kind of track what's going
Speaker 1: on among different firms across countries around the world, hundreds
Speaker 1: of countries and thousands of messages routinely. So why does
Speaker 1: blockchain matter Because this is something that is involving the
Speaker 1: fintech company Symbiont. It is involving City Group, which is
Speaker 1: one of the largest transaction banks in the world that
Speaker 1: also is one of the most global banks in the world,
Speaker 1: Vanguard Northern Trust. And remember these are all companies that
Speaker 1: deal a lot with the safety and security of just
Speaker 1: the movement of assets around the world. So the testing
Speaker 1: of blockchade would really be a potential to really upgrade
Speaker 1: critical infrastructure simply with how messaging and communication works just
Speaker 1: across financial institutions of so many types across the world.
Speaker 1: So how long will this pilot be running and if
Speaker 1: it works, could we see a potential big change in
Speaker 1: the underlying technology here. Yeah, and listen, remember the reason
Speaker 1: I brought up the Russia issue as well is because
Speaker 1: when they were really cut off in certain institutions were
Speaker 1: cut off from Swift, there was a lot of concern
Speaker 1: emily about Russia China really developing their own type of
Speaker 1: Swift or arrival to Swift, to be able to develop
Speaker 1: their own critical infrastructure by means of technology UH and
Speaker 1: other infrastructure to really start to communicate to build a
Speaker 1: new essentially financial system. And you do see some traces
Speaker 1: of that and some acceleration of that this year. So
Speaker 1: the idea of using blockchain to really strengthen infrastructure among
Speaker 1: the Swift system itself is their potential. Yeah. Absolutely, But
Speaker 1: you know, when you think about blockchain itself, there is
Speaker 1: a huge debate in the fintech community, in the banking community,
Speaker 1: is blockchain the best technology to really be used to
Speaker 1: communicate among all of these entities, and is it the safest,
Speaker 1: is it the most secure, Because that's what it comes
Speaker 1: down to at the end, at the end of the day,
Speaker 1: I remember, this is a way to really kind of
Speaker 1: put the network together. But at the end of the day,
Speaker 1: the banks and the financial institutions themselves are responsible for
Speaker 1: the data and the safe and security of that data.
Speaker 1: So there are some applications that can really be helpful
Speaker 1: in the future clarity tracking that data in terms of
Speaker 1: the firms themselves taking a look and seeing what's possible
Speaker 1: in terms of a money laundering fraud within their own firm.
Speaker 1: But again they have to make that decision emily if
Speaker 1: blockchain is the best means to do it. Fascinating. Thank
Speaker 1: you for breaking down that some of this is wonky
Speaker 1: stuff and helping us better understand it. Bloom Works, Shannelli
Speaker 1: bossik As always appreciate it. Melinda French Gates says the
Speaker 1: pandemic has stalled progress on critical issues like poverty and
Speaker 1: climate change, calling gender inequality the most alarming that's coming
Speaker 1: from new findings in the Goalkeepers Report released by the
Speaker 1: Bill of Melinda Gates Foundation. Back in March of last year,
Speaker 1: French Gates told me women weren't in crisis as the
Speaker 1: pandemic dragged on. I asked her about the state of women. Now,
Speaker 1: take a listen to what she had to say. I
Speaker 1: would say, still in crisis. You know, women's livelihoods were
Speaker 1: destroyed by the pandemic. Whether you were in the informal
Speaker 1: sector maybe in South Africa, or whether you have a job.
Speaker 1: Women are saying I can't do my job at the
Speaker 1: same intensity as before or at all. If I don't
Speaker 1: have safe and affordable childcare, that is just a problem.
Speaker 1: And so we've pushed women out of the workforce, and
Speaker 1: we have so many girls across the world who are
Speaker 1: not in school anymore. How could a recession or a
Speaker 1: prolonged economic downturn make this worse, Well, it could mean,
Speaker 1: I mean inflation also makes it worse. Right, So that
Speaker 1: economic downturn, the fact that it's you know, more expensive
Speaker 1: to get food or to get fuel, means that we
Speaker 1: are seeing already more hunger around the world. And we're
Speaker 1: seeing because of the Ukrainian crisis. You know, there's less
Speaker 1: food to support Africa, and so we're seeing even more
Speaker 1: families in a state of hunger, and particularly women. Of
Speaker 1: all the people who are food insecure, three out of
Speaker 1: five or women. The report doesn't mention the overturning of
Speaker 1: Row versus Way, but you have made clear that you
Speaker 1: think America has taken a huge step backwards. What is
Speaker 1: the Foundation doing to support abortion rights? What are you
Speaker 1: doing at Pivotal to to support abortion rights? And you
Speaker 1: know where do you think the work and the urgency
Speaker 1: needs to be focused. Well, at the Foundation, we're continuing
Speaker 1: to work on family planning and that's for low and
Speaker 1: middle income countries because women are still crying out for that.
Speaker 1: And at Pivotal, I'm really focused on how do we
Speaker 1: get more women in political positions of power in the
Speaker 1: United States. We would not have these laws overturned if
Speaker 1: we had more females in our House of Congress and
Speaker 1: in our Senate. Of that, I'm certain now when it
Speaker 1: comes to the Foundation, you and Bill have said that
Speaker 1: if you found you could no longer work together, that
Speaker 1: you would step down as co chair. Bye. How is
Speaker 1: your working dynamic evolved? Are you finding that you can
Speaker 1: continue to work together, and do you think you'll still
Speaker 1: be there next year when that deadline comes. So Bill
Speaker 1: and I have worked effectively together for a very long time,
Speaker 1: including while we were going through a difficult time in
Speaker 1: our family life and through a divorce. We showed up.
Speaker 1: We worked then and during the pandemic, and we do today.
Speaker 1: We now have a board. We met for the first
Speaker 1: time with our Board of trustees last week in person,
Speaker 1: and what I think they would all tell you is
Speaker 1: that Bill and Melinda remain completely committed to this institution
Speaker 1: and to working effectively together. And that's what we're doing today.
Speaker 1: So how is the board going? I know you added
Speaker 1: a few new board members up to four. You said
Speaker 1: you would might consider adding more. How has that changed
Speaker 1: the dynamic and do you think you'll add any additional members?
Speaker 1: I think for right now we have the board that
Speaker 1: we would like to have, and that's fantastic. We met
Speaker 1: for the first time, and the way it's changing the
Speaker 1: dynamic is they're pushing on our thinking and that's what
Speaker 1: we wanted from a board, and we wanted good governance.
Speaker 1: It was just time. Know Bill and I aren't getting
Speaker 1: any younger. And what I know is that the board
Speaker 1: asked fantastic questions last week about resource allocation, about partners,
Speaker 1: about our internal teams and how we're working and incentivating
Speaker 1: and motivating them. So I'm really looking forward to even
Speaker 1: more discussions with the board. I want to get back
Speaker 1: to that Gate's Foundation report, the Goalkeeper's Report, which finds
Speaker 1: that almost every indicator of the un sustainable Development goals
Speaker 1: is off track for achieving them. By Jamie's Immerman joins
Speaker 1: us now. She leads the Foundation's work to increase low
Speaker 1: income women's economic empowerment through access to and use of
Speaker 1: digital financial services. Jamie, thank you so much for joining us.
Speaker 1: So what is your big takeaway from this report, aside
Speaker 1: from we're moving way too slow? Yeah, thanks Emily. So,
Speaker 1: I think looking at the Goalkeeper's Report that came out today,
Speaker 1: we are seeing big takeaway is that women have been
Speaker 1: taking a major hit. Gender equality UH is stalling and
Speaker 1: falling behind. Melinda said, it's so well, and we are
Speaker 1: in a state right now where the hits just keep coming.
Speaker 1: We've got inflation UH, floods in Pakistan, climate related crises,
Speaker 1: food and security, and we're really looking for ways that
Speaker 1: we can find new tools and interventions that can help
Speaker 1: us overcome some of these really difficult situations that we're
Speaker 1: finding ourselves in, UM, the pressures that women are facing
Speaker 1: in labor force participation, in ability to recover looking for
Speaker 1: those points of light um in the darkness, as Melinda
Speaker 1: had said, And I think you know, the one point
Speaker 1: that we are actually seeing progress that we got to
Speaker 1: highlight in that Goalkeeper's report in gender equality is around
Speaker 1: financial access. And for the first time since we've been
Speaker 1: tracking this data and recording this data, we actually are
Speaker 1: in the last year seeing the gender gap and financial
Speaker 1: inclusion narrowing. And that's during even this really challenging time. UH.
Speaker 1: And it looks like a lot of that is due
Speaker 1: to growth of mobile money, especially in developing countries and
Speaker 1: UH women taking up mobile money services in the last
Speaker 1: couple of years. Talk to us about what you mean
Speaker 1: by mobile money, because you're talking about this as a
Speaker 1: tool that can help increase gender equity. What do you
Speaker 1: mean by that and how does it work? How is
Speaker 1: it working? Yeah, So mobile money is essentially a basic
Speaker 1: financial product that you can access on a basic phone
Speaker 1: with basic connectivity. That's essentially a service that is in
Speaker 1: large part provided by your network operator. UH. And so
Speaker 1: it is a financial tool UM that where you can
Speaker 1: receive money, send money, maybe even save a little bit
Speaker 1: of money. And in the developing world, tons of interesting
Speaker 1: innovations that are half being UM with mobile money, where
Speaker 1: it's connecting to other types of UH tools and things
Speaker 1: that women need, like the ability to pay for healthcare services,
Speaker 1: to pay her children's education fees, to buy goods and services,
Speaker 1: to sell her own goods and services if she has
Speaker 1: a small business, pay utility bills, UM, even pay your
Speaker 1: toll UM when you're driving down the highway in Nairobi.
Speaker 1: So it's a it's a it's an alternative to bank
Speaker 1: based financial services that we're seeing in the developing world,
Speaker 1: and it's and it's very popular because the barriers to
Speaker 1: entry for a mobile money account are much lower than
Speaker 1: a bank account, and there are you know, the majority
Speaker 1: of people in the world still eight four have a phone,
Speaker 1: whether it's a basic phone all the way to a
Speaker 1: smartphone in their hand, So you can bank on your
Speaker 1: phone without it being a bank account that usually has
Speaker 1: more stringent requirements for opening that account, and those types
Speaker 1: of stringent requirements tend to be disadvantages for women. Well,
Speaker 1: it's good to know that on at least one measure,
Speaker 1: things are getting better. That's said. You know, horrible day
Speaker 1: in the public markets today. You know, new numbers that
Speaker 1: show inflation is still rising. Um, how much do you
Speaker 1: worry a prolonged downturn could set women back even further
Speaker 1: than they've already been set back. Yeah? Absolutely, I mean
Speaker 1: we're seeing a lot of pressure on women, I know.
Speaker 1: I think what we're seeing is that digital tools and
Speaker 1: being able to participate in the digital economy and the
Speaker 1: new digital future that we see coming. And we saw
Speaker 1: massive acceleration of digitization globally in the last couple of years.
Speaker 1: It is going to be through being able to fully
Speaker 1: participate equally in the economy of the future that is
Speaker 1: going to help move us from them just trying to
Speaker 1: keep track and not fall too far behind and maybe
Speaker 1: recover a little bit to be actually becoming like a resilient,
Speaker 1: robust economy and society. And that's true everywhere in the world.
Speaker 1: So we need a gender equal digital future. We need
Speaker 1: to have women on equal footing with both access to
Speaker 1: digital tools, access to digital the digital economy, and equal
Speaker 1: footing on the ability to use the digital tools that
Speaker 1: are out there. UM. And that are coming, and I
Speaker 1: think through all of that is where we're going to
Speaker 1: see a lot of acceleration in the pace of change.
Speaker 1: We saw mobile money accelerating the last couple of years
Speaker 1: because we found ways to make it accessible to women
Speaker 1: to meet their needs to try to get that equality
Speaker 1: and access, and it's helped women not only get through
Speaker 1: this challenging time, but to actually recover out of it.
Speaker 1: And so I think it's going to be a kind
Speaker 1: of a multi all hands on deck approach that we're
Speaker 1: going to have to take in order to ensure that
Speaker 1: the tools of the future are things that are in
Speaker 1: women's hands and made for women. And I think that
Speaker 1: that's going to be what gets us through to the
Speaker 1: next uh more resilient future that we're gonna need to
Speaker 1: find yourself, well, here is to progress and faster progress.
Speaker 1: Thanks for shining a light on this. Jamie's Immerman, Deputy
Speaker 1: director of Digital Connectivity and Gender Equality at the Gates Foundation.
Speaker 1: That doesn't For this edition of the show, I'm Emily Chang.
Speaker 1: This is Bloomberg