1 00:00:02,640 --> 00:00:05,360 Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul Sweene. You, 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma wits each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:23,680 Speaker 1: at Bloomberg dot com. Let's welcome to Jenny Leonard. Jenny's 8 00:00:23,680 --> 00:00:26,960 Speaker 1: a Bloomberg trade reporter UH and Nicholas nicka's co founder 9 00:00:27,040 --> 00:00:30,000 Speaker 1: Data Trek Research LLC. Uh and Nick is also a 10 00:00:30,040 --> 00:00:33,400 Speaker 1: Bloomberg Opinion calumnist. Jenny just wanted to get your thoughts. 11 00:00:33,440 --> 00:00:37,560 Speaker 1: I know President Trump just now made some comments about trade, um, 12 00:00:37,600 --> 00:00:41,040 Speaker 1: you know, suggesting that perhaps this September meeting may not happen. 13 00:00:41,320 --> 00:00:43,720 Speaker 1: What is your sense of kind of the next couple 14 00:00:43,720 --> 00:00:48,440 Speaker 1: of steps here between the US and China on trade. Yeah. Look, 15 00:00:48,560 --> 00:00:51,320 Speaker 1: that he said that the September meeting might be off 16 00:00:51,479 --> 00:00:53,840 Speaker 1: is actually one of the things that I noted in 17 00:00:53,840 --> 00:00:58,120 Speaker 1: my notebook as news because we've heard and when he 18 00:00:58,520 --> 00:01:01,959 Speaker 1: escalated the tariffs last week up until now the September 19 00:01:02,000 --> 00:01:05,040 Speaker 1: meeting is on. We had you know, Peter Navarro, Larry Cudlow, 20 00:01:05,080 --> 00:01:09,480 Speaker 1: everyone reinforced that narrative saying, the Chinese are still coming here. 21 00:01:09,600 --> 00:01:11,840 Speaker 1: You know, we are doing what we're doing, but we're 22 00:01:11,959 --> 00:01:13,640 Speaker 1: we still want to go back to the table and 23 00:01:13,680 --> 00:01:15,600 Speaker 1: we're hoping that China is going to make the agg 24 00:01:15,680 --> 00:01:19,240 Speaker 1: purchases that promised. So the fact that the President now said, well, 25 00:01:19,280 --> 00:01:22,080 Speaker 1: you know, if we don't have that meeting, um, then 26 00:01:22,120 --> 00:01:25,200 Speaker 1: we're still fine, that's news. At the same time, I 27 00:01:25,240 --> 00:01:27,479 Speaker 1: would say the president always is a good cop bad 28 00:01:27,480 --> 00:01:30,679 Speaker 1: cup in basically the same sentence, So you know, the 29 00:01:30,720 --> 00:01:32,800 Speaker 1: meeting might still be on, and he just wants to 30 00:01:33,240 --> 00:01:37,679 Speaker 1: basically play it both ways. So um yeah, Jenny, Jenny, 31 00:01:37,720 --> 00:01:40,720 Speaker 1: do you have a sense of whether Trump's advisors are 32 00:01:41,000 --> 00:01:43,360 Speaker 1: weighing in here on the moves that he makes when 33 00:01:43,360 --> 00:01:45,640 Speaker 1: it comes to trade or is this a complete unilateral 34 00:01:45,680 --> 00:01:50,040 Speaker 1: kind of negotiation and uh tactic. That's a good question. 35 00:01:50,120 --> 00:01:54,480 Speaker 1: I think it always depends. It's a case by case matter. Uh. 36 00:01:54,520 --> 00:01:57,400 Speaker 1: You know, for example, when you look at the currency 37 00:01:57,440 --> 00:02:02,080 Speaker 1: manipula manipulator label, Uh, there was there are meetings about this, 38 00:02:02,240 --> 00:02:05,480 Speaker 1: you know, there were meetings about currency intervention and We've 39 00:02:05,480 --> 00:02:08,520 Speaker 1: heard different narratives coming out of the White House from 40 00:02:08,840 --> 00:02:11,680 Speaker 1: Trump and his advisor Larry Cudlow, And you know, now 41 00:02:11,720 --> 00:02:14,639 Speaker 1: we have Trump saying no, he doesn't want to intervene. 42 00:02:14,720 --> 00:02:18,519 Speaker 1: We have you know, Larry Cudlow and uh Stephen manutrition 43 00:02:18,600 --> 00:02:21,160 Speaker 1: also meeting with tex c Eos trying to kind of 44 00:02:21,480 --> 00:02:24,040 Speaker 1: uh find a path forward for the WAWI licenses, and 45 00:02:24,120 --> 00:02:27,720 Speaker 1: that again was overruled by Trump, which he just um 46 00:02:27,720 --> 00:02:31,120 Speaker 1: confirmed the story that we wrote last night, saying that 47 00:02:31,160 --> 00:02:34,480 Speaker 1: there won't be any licenses coming in the near future 48 00:02:34,520 --> 00:02:37,560 Speaker 1: because China is holding off on a purchases. So you know, 49 00:02:37,680 --> 00:02:42,720 Speaker 1: he definitely appreciates a vivid debate um in front of him, 50 00:02:42,960 --> 00:02:45,639 Speaker 1: But then it's always up to him. And we hear 51 00:02:45,680 --> 00:02:48,200 Speaker 1: this from every single person we talked in the administration. 52 00:02:48,240 --> 00:02:51,760 Speaker 1: It's always up to the president. Um. So advice is 53 00:02:51,760 --> 00:02:57,040 Speaker 1: is is you know, appreciated but not necessarily followed. So, Nick, 54 00:02:57,200 --> 00:02:58,600 Speaker 1: I just want to get your thoughts here. I mean, 55 00:02:58,960 --> 00:03:00,640 Speaker 1: how do you it was clear just if you just 56 00:03:00,639 --> 00:03:04,520 Speaker 1: look at the trade Nicolas co founder of Data check Research, 57 00:03:04,560 --> 00:03:09,240 Speaker 1: which I ended unsed before. Yeah, anyway, so, um, the 58 00:03:09,639 --> 00:03:12,320 Speaker 1: so the sense Nick, is just kind of how you 59 00:03:12,360 --> 00:03:14,680 Speaker 1: think the markets we just saw this week from trading 60 00:03:14,760 --> 00:03:16,880 Speaker 1: up and down, up and down each day, trade is 61 00:03:16,960 --> 00:03:19,880 Speaker 1: really remains at the forefront of the market. How are 62 00:03:19,919 --> 00:03:21,720 Speaker 1: you thinking that trade is going to play into the 63 00:03:21,720 --> 00:03:23,760 Speaker 1: market going forward, because it doesn't appear like we're gonna 64 00:03:23,760 --> 00:03:26,720 Speaker 1: get any near term resolution. No. I agree with that, 65 00:03:26,760 --> 00:03:28,480 Speaker 1: and I would say that, you know, we're seeing a 66 00:03:28,520 --> 00:03:31,639 Speaker 1: pretty typical pattern for the year in terms of volatility, 67 00:03:31,680 --> 00:03:33,720 Speaker 1: in terms of narratives. So in the beginning of the year, 68 00:03:33,720 --> 00:03:36,520 Speaker 1: we had the Fed announcing they changed their minds on rates, 69 00:03:36,600 --> 00:03:39,880 Speaker 1: culminating in the July thirty one rate cut. That story 70 00:03:39,960 --> 00:03:42,360 Speaker 1: is played. We're done with the rate cut story in 71 00:03:42,480 --> 00:03:44,640 Speaker 1: terms of supporting stocks, and now we're going to live 72 00:03:44,680 --> 00:03:48,000 Speaker 1: and die based on trade negotiations because the other part 73 00:03:48,000 --> 00:03:51,160 Speaker 1: of the equation with the discount rate for stock earnings 74 00:03:51,280 --> 00:03:53,200 Speaker 1: is kind of off the table. So this is the 75 00:03:53,240 --> 00:03:55,400 Speaker 1: one and only issue now. So I'm trying to figure 76 00:03:55,400 --> 00:03:58,880 Speaker 1: out how much of the trade tensions have already been 77 00:03:58,920 --> 00:04:01,520 Speaker 1: baked into markets. Do you think that any sort of 78 00:04:01,560 --> 00:04:04,360 Speaker 1: complete breakdown and lack of a deal is already in 79 00:04:04,400 --> 00:04:07,320 Speaker 1: the price of stocks. I think that the majority of 80 00:04:07,320 --> 00:04:09,400 Speaker 1: it is. We did a survey of our clients just 81 00:04:09,520 --> 00:04:11,320 Speaker 1: last week and asked them when they thought a trade 82 00:04:11,320 --> 00:04:13,680 Speaker 1: deal would happen, and the majority said not until after 83 00:04:14,520 --> 00:04:17,440 Speaker 1: after the elections. And these are all professional investors, So 84 00:04:17,480 --> 00:04:20,160 Speaker 1: I would say that that expectation is largely baked in. 85 00:04:20,240 --> 00:04:22,599 Speaker 1: What's not baked in is what impact that has on 86 00:04:22,680 --> 00:04:25,440 Speaker 1: global growth in two thousand twenty one, impact that has 87 00:04:25,440 --> 00:04:28,599 Speaker 1: on earnings in two thousand twenty and to what degree 88 00:04:28,600 --> 00:04:32,960 Speaker 1: it further endangers particularly Europe in terms of over session. So, Jenny, 89 00:04:32,960 --> 00:04:34,760 Speaker 1: you want to bring you back and get your sense 90 00:04:34,800 --> 00:04:36,919 Speaker 1: of as we think about trade here. I know you 91 00:04:36,920 --> 00:04:40,520 Speaker 1: follow this very closely. Um Dan in d C. Is 92 00:04:40,560 --> 00:04:43,080 Speaker 1: this is a consensus growing that we won't get a 93 00:04:43,160 --> 00:04:49,440 Speaker 1: trade um deal probably after the election. If you listen 94 00:04:49,560 --> 00:04:53,839 Speaker 1: to the president whose advisors in the past couple weeks 95 00:04:53,839 --> 00:04:57,080 Speaker 1: and days, it seems like it because he is really 96 00:04:57,160 --> 00:04:59,800 Speaker 1: upset about the fact that, you know, it seems like 97 00:05:00,040 --> 00:05:02,240 Speaker 1: and I was trying to wait him out and waiting 98 00:05:02,279 --> 00:05:05,400 Speaker 1: for a democratic president to come in and what he says, 99 00:05:05,440 --> 00:05:08,600 Speaker 1: you know, get a get an easier pass on on 100 00:05:08,600 --> 00:05:12,200 Speaker 1: a trade deal. And the president does have other tools 101 00:05:12,200 --> 00:05:14,680 Speaker 1: in his arsenal that he hasn't used yet. So you know, 102 00:05:14,839 --> 00:05:18,160 Speaker 1: if the tariffs go forward on September one, which he 103 00:05:18,240 --> 00:05:21,400 Speaker 1: said will be uh ten percent on three billion, which 104 00:05:21,440 --> 00:05:24,840 Speaker 1: is basically the remaining imports from China, he could still 105 00:05:24,920 --> 00:05:27,160 Speaker 1: up that tear of rate from ten per cent to 106 00:05:28,160 --> 00:05:32,080 Speaker 1: or even higher, you know. And there's other um tools 107 00:05:32,160 --> 00:05:36,360 Speaker 1: that the White House has held off on uh previously 108 00:05:37,040 --> 00:05:39,960 Speaker 1: because you know, they assess their options and said this 109 00:05:40,040 --> 00:05:42,440 Speaker 1: is not the right time to do this. But those 110 00:05:42,800 --> 00:05:45,559 Speaker 1: advisors say could be back on the table. And that's 111 00:05:45,839 --> 00:05:49,800 Speaker 1: you know, something like sanctions on Chinese surveillance companies that 112 00:05:49,880 --> 00:05:52,320 Speaker 1: we've written about, you know, months ago, and that we're 113 00:05:52,480 --> 00:05:55,359 Speaker 1: put on hold because it looked better uh in in 114 00:05:55,400 --> 00:05:57,720 Speaker 1: the trade talks, and now it looks worse. So you know, 115 00:05:57,800 --> 00:06:00,640 Speaker 1: those could easily be back on the table. Jenny Leonard, 116 00:06:00,640 --> 00:06:02,240 Speaker 1: We're gonna let you get back to it, and we 117 00:06:02,279 --> 00:06:04,640 Speaker 1: really appreciate spending the time. We know you're always busy 118 00:06:05,040 --> 00:06:09,040 Speaker 1: trying to cover the the progression of these trade negotiations. 119 00:06:09,120 --> 00:06:11,960 Speaker 1: Jenny Leonard is a Bloomberg trade reporter coming to us 120 00:06:12,080 --> 00:06:14,920 Speaker 1: from Washington. D C. Nicolas still with us, Nick, I 121 00:06:14,920 --> 00:06:17,920 Speaker 1: want to get your sense of what the best trades 122 00:06:17,960 --> 00:06:21,440 Speaker 1: are given this protracted trade war that could potentially deepen 123 00:06:21,480 --> 00:06:25,080 Speaker 1: even further. What are the best assets to own right now? Okay, 124 00:06:25,120 --> 00:06:27,880 Speaker 1: so thinking about volatility now for the rest of the year, 125 00:06:27,920 --> 00:06:29,320 Speaker 1: So let's just talk about what's going to happen for 126 00:06:29,360 --> 00:06:31,480 Speaker 1: the rest of two thousand nineteen. It seems pretty clear 127 00:06:31,480 --> 00:06:33,360 Speaker 1: that you were going in for a pretty choppy period 128 00:06:33,400 --> 00:06:36,480 Speaker 1: for stocks. Bonds are not necessarily a great trade because 129 00:06:36,480 --> 00:06:40,320 Speaker 1: they've run so far, so fast and so quickly. So unfortunately, 130 00:06:40,320 --> 00:06:42,480 Speaker 1: you're not left with a lot of great options. Cash 131 00:06:42,560 --> 00:06:45,680 Speaker 1: is one option, reducing risk is one option. Gold has 132 00:06:45,720 --> 00:06:47,799 Speaker 1: been working for a whole variety of reasons and probably 133 00:06:47,839 --> 00:06:50,560 Speaker 1: should continue to do so because of negative rates in Europe. 134 00:06:51,080 --> 00:06:54,400 Speaker 1: But there is just not a great selection of choice 135 00:06:54,400 --> 00:06:57,520 Speaker 1: aside from just reducing risk, because as we saw today, 136 00:06:57,560 --> 00:06:59,560 Speaker 1: as we've seen this week, you know that the through 137 00:06:59,600 --> 00:07:02,480 Speaker 1: the whole the market story has flipped and is now 138 00:07:02,560 --> 00:07:04,400 Speaker 1: one purely about what's going to happen to the global 139 00:07:04,400 --> 00:07:07,000 Speaker 1: economy in the face of trade wars. So, Nick, even 140 00:07:07,040 --> 00:07:08,680 Speaker 1: if you want to get a little bit defensive, and 141 00:07:08,680 --> 00:07:11,640 Speaker 1: in the equity market, some of those classical defensive sectors, 142 00:07:12,000 --> 00:07:13,880 Speaker 1: you know, they kind of bringing a valuation risk that 143 00:07:13,920 --> 00:07:16,560 Speaker 1: you don't typically have historically when when you transition into 144 00:07:16,560 --> 00:07:18,120 Speaker 1: those names, how do you kind of think about the 145 00:07:18,160 --> 00:07:21,400 Speaker 1: defensive sectors, whether it's utilities or real estate. Yeah, that 146 00:07:21,560 --> 00:07:24,440 Speaker 1: is exactly the right point. You know, the classic defensive 147 00:07:24,440 --> 00:07:27,200 Speaker 1: players are already extremely rich on a p basis and 148 00:07:27,240 --> 00:07:29,600 Speaker 1: even on a yield basis in some cases. And that's 149 00:07:29,600 --> 00:07:31,080 Speaker 1: why it's hard to recommend any of them. I think, 150 00:07:31,080 --> 00:07:32,520 Speaker 1: if you have to put a finger on one, if 151 00:07:32,520 --> 00:07:35,840 Speaker 1: you really many defensive utilities of revenues are in the 152 00:07:35,880 --> 00:07:38,320 Speaker 1: US at least as no international exposure, and you get 153 00:07:38,360 --> 00:07:40,720 Speaker 1: a yield pick up. But aside from that, it's really tough. 154 00:07:40,760 --> 00:07:43,240 Speaker 1: That's why you know, we're telling clients just d risk, 155 00:07:43,520 --> 00:07:47,360 Speaker 1: take equity risk off the table. So here's the reason 156 00:07:47,400 --> 00:07:50,120 Speaker 1: why I struggle with that. You've got all these companies 157 00:07:50,120 --> 00:07:52,640 Speaker 1: that have been buying back their shares and accelerating their 158 00:07:52,640 --> 00:07:55,680 Speaker 1: purchases when the market does sell off, or at least 159 00:07:55,720 --> 00:07:59,480 Speaker 1: that's Goldman Sacks analysts have been putting out there. Doesn't 160 00:07:59,520 --> 00:08:02,400 Speaker 1: that provide I had enough of a technical boost that 161 00:08:02,560 --> 00:08:04,760 Speaker 1: stocks are going to be fine. Public equities are going 162 00:08:04,800 --> 00:08:08,920 Speaker 1: to be okay as long as there isn't a material deterioration. Yeah, 163 00:08:09,000 --> 00:08:11,560 Speaker 1: two points. First look at Q four two eighteen. Buy 164 00:08:11,600 --> 00:08:14,200 Speaker 1: backs were very heavy last year. Didn't help in Q four. 165 00:08:14,800 --> 00:08:17,880 Speaker 1: H Point number two is you're right, I mean net income. 166 00:08:18,160 --> 00:08:20,679 Speaker 1: Corporate net income basically goes into dividends and stock buybacks 167 00:08:20,720 --> 00:08:23,160 Speaker 1: and nothing else, which means that buybacks are directly quality 168 00:08:23,240 --> 00:08:26,120 Speaker 1: to stock and earnings. If you see earnings go flat, 169 00:08:26,160 --> 00:08:28,000 Speaker 1: then buy backs go flat. If you see earnings go 170 00:08:28,040 --> 00:08:30,320 Speaker 1: down ten percent, then buy backs go down fifteen because 171 00:08:30,320 --> 00:08:32,840 Speaker 1: stuff to cover the dividend. So if that's the only 172 00:08:32,920 --> 00:08:36,040 Speaker 1: leverage point, and it makes companies and stocks very beholden 173 00:08:36,080 --> 00:08:38,640 Speaker 1: to earnings outlooks, and that hasn't been great this year. 174 00:08:38,720 --> 00:08:41,520 Speaker 1: Down half a percent in the first quarter, probably flatten 175 00:08:41,600 --> 00:08:44,480 Speaker 1: Q two, Down in Q three, probably flattened Q four. 176 00:08:44,880 --> 00:08:47,839 Speaker 1: So there's really not of incremental And you know, it's 177 00:08:47,840 --> 00:08:49,320 Speaker 1: a very good point. But at the end of the day, 178 00:08:49,320 --> 00:08:51,440 Speaker 1: I still think back the Q four last year and 179 00:08:51,520 --> 00:08:54,320 Speaker 1: think that down fifteen SMP it didn't really help because 180 00:08:54,360 --> 00:08:56,600 Speaker 1: when those selling comps as it did in December, there's 181 00:08:56,640 --> 00:08:59,520 Speaker 1: not enough buy back firepower to support it. Real quick 182 00:08:59,520 --> 00:09:04,400 Speaker 1: tenset recession coming a little bit less, a little bit 183 00:09:04,480 --> 00:09:07,600 Speaker 1: less than well, that's actually with consensus. I mean, you've 184 00:09:07,600 --> 00:09:10,280 Speaker 1: got economists basically saying there's a thirty seven percent chance 185 00:09:10,320 --> 00:09:15,280 Speaker 1: I believe has a recession the next twelve months. I 186 00:09:15,280 --> 00:09:17,400 Speaker 1: actually think that might be the number according to a 187 00:09:17,480 --> 00:09:21,840 Speaker 1: recent Bloomberg survey. My mind, dads, ridiculous things sometimes, Nicholas, 188 00:09:21,840 --> 00:09:24,320 Speaker 1: thank you so much for being with us. Nicole Is 189 00:09:24,320 --> 00:09:26,400 Speaker 1: is a co founder of Data Check Research and a 190 00:09:26,440 --> 00:09:43,720 Speaker 1: Bloomberg Opinion calumnists. It is time where we check in 191 00:09:43,760 --> 00:09:48,079 Speaker 1: with our Bloomberg opinion columnists and uh in columns. Right 192 00:09:48,120 --> 00:09:50,280 Speaker 1: now we want to focus on the United Kingdom. We 193 00:09:50,360 --> 00:09:53,920 Speaker 1: got some data out this morning showing the first or 194 00:09:53,960 --> 00:09:57,800 Speaker 1: the first downturn, the first decline in growth going back 195 00:09:57,880 --> 00:10:01,120 Speaker 1: since right after the financial christ Is Terras Raphael joining 196 00:10:01,160 --> 00:10:04,439 Speaker 1: us now Bloomberg Opinion editor covering European politics and economics. 197 00:10:05,040 --> 00:10:07,360 Speaker 1: How concerning was this to you? The sort of UK 198 00:10:07,800 --> 00:10:10,640 Speaker 1: data that came out, Well, I think to some extent 199 00:10:10,800 --> 00:10:14,280 Speaker 1: this is expected and part of a broader picture that 200 00:10:14,360 --> 00:10:17,480 Speaker 1: shows that the UK is just underperforming and has been 201 00:10:17,600 --> 00:10:21,840 Speaker 1: really since the since the Brexit vote, where you know 202 00:10:22,960 --> 00:10:25,280 Speaker 1: a lot of people have noted, well, the economy hasn't 203 00:10:25,320 --> 00:10:29,800 Speaker 1: responded as negatively as many predicted before the friendum, but 204 00:10:29,960 --> 00:10:33,000 Speaker 1: really it's sacrificed a lot of potential growth and now 205 00:10:33,040 --> 00:10:35,319 Speaker 1: we're actually seeing some some real downside now that will 206 00:10:35,360 --> 00:10:39,200 Speaker 1: affect Boris Johnson, the Prime Minister who has come to 207 00:10:39,280 --> 00:10:41,760 Speaker 1: power both threatening to leave without a deal if the 208 00:10:41,800 --> 00:10:45,840 Speaker 1: European Union doesn't agree to his demands, but also delivering 209 00:10:45,880 --> 00:10:50,760 Speaker 1: this message of optimism and uh, you know, opportunity for 210 00:10:50,800 --> 00:10:54,239 Speaker 1: the country once it leaves the EU. And this complicates 211 00:10:54,280 --> 00:10:57,520 Speaker 1: the picture, and especially as I wrote today in a column, 212 00:10:57,520 --> 00:11:01,200 Speaker 1: it complicates his uh you know other big challenge, which 213 00:11:01,240 --> 00:11:03,680 Speaker 1: is keeping the United Kingdom together, which is, you know, 214 00:11:03,800 --> 00:11:07,720 Speaker 1: four constituent nations including Scotland, Wales and Northern Ireland. So 215 00:11:07,760 --> 00:11:09,600 Speaker 1: trust that's kind of where one of the go your columns. 216 00:11:09,679 --> 00:11:11,920 Speaker 1: Fascinating give us the latest on kind of how that 217 00:11:12,000 --> 00:11:15,640 Speaker 1: might play out, keeping the United Kingdom together. Well, the 218 00:11:16,240 --> 00:11:18,199 Speaker 1: news this week was that for the first time in 219 00:11:18,559 --> 00:11:21,679 Speaker 1: a couple of years, uh, the Scottish people are telling 220 00:11:21,679 --> 00:11:25,280 Speaker 1: posters that they would prefer to leave. They want a second, 221 00:11:25,679 --> 00:11:29,880 Speaker 1: a second referendum on Scottish independence. There was one inteen 222 00:11:30,360 --> 00:11:33,920 Speaker 1: Now Scotland would be hurt, uh quite substantially by Brexit, 223 00:11:34,000 --> 00:11:37,640 Speaker 1: to the tune of at least perhaps eight percent of 224 00:11:37,640 --> 00:11:42,360 Speaker 1: of Scotland's UM growth uh of Scotland's g n P 225 00:11:43,000 --> 00:11:44,880 Speaker 1: if there were to be a no deal brexit. So 226 00:11:45,440 --> 00:11:48,720 Speaker 1: you know, you would expect this to accelerate demands for 227 00:11:48,800 --> 00:11:51,800 Speaker 1: independence in Scotland. At the same time, you have Northern Ireland, 228 00:11:52,240 --> 00:11:55,680 Speaker 1: where um, the Good Friday Peace Agreement allows for the 229 00:11:55,720 --> 00:11:58,840 Speaker 1: possibility of rejoining Ireland, of having a vote to do 230 00:11:58,880 --> 00:12:01,640 Speaker 1: that if there's a majority for that. We don't see 231 00:12:01,640 --> 00:12:03,640 Speaker 1: that yet now, but you can imagine a scenario in 232 00:12:03,679 --> 00:12:06,560 Speaker 1: which the Northern Irish economy is hard hit and that 233 00:12:06,760 --> 00:12:10,080 Speaker 1: and there begins to be a clamor for uh, you know, 234 00:12:10,120 --> 00:12:12,320 Speaker 1: for what they call a border pole. I was interested 235 00:12:12,360 --> 00:12:16,040 Speaker 1: to is that the foot seat was actually not that down. 236 00:12:16,280 --> 00:12:18,679 Speaker 1: In fact, it pretty much is flat. I'm trying to 237 00:12:18,760 --> 00:12:22,280 Speaker 1: understand why markets didn't respond more severely to this, uh, 238 00:12:22,360 --> 00:12:25,800 Speaker 1: this contraction. Well, I think there's been a big question 239 00:12:26,000 --> 00:12:28,920 Speaker 1: for some time now why markets are so sanguine when 240 00:12:29,200 --> 00:12:30,640 Speaker 1: you know, the rest of us are looking at the 241 00:12:30,640 --> 00:12:33,640 Speaker 1: picture and and you know, wanting to to, you know, 242 00:12:33,679 --> 00:12:36,200 Speaker 1: sort of run for cover because it really does look 243 00:12:36,400 --> 00:12:38,720 Speaker 1: like we're heading toward a nodal Brexit. I mean one 244 00:12:38,920 --> 00:12:41,520 Speaker 1: you know possibility that there is a you know, general 245 00:12:41,640 --> 00:12:44,920 Speaker 1: strength in the UK economy. It has proved a very 246 00:12:44,920 --> 00:12:47,439 Speaker 1: resilient economy. It's you know, it's a fairly large economy 247 00:12:47,480 --> 00:12:50,520 Speaker 1: of the world's fifth largest. Um. You know. Also we 248 00:12:50,559 --> 00:12:53,679 Speaker 1: have a fair bit of um, you know, of of 249 00:12:53,760 --> 00:12:58,320 Speaker 1: bad news priced in already. UM. But uh, you know, 250 00:12:58,360 --> 00:13:01,840 Speaker 1: obviously you know, trading is I think quite quite thin 251 00:13:01,920 --> 00:13:04,080 Speaker 1: in a lot of stocks. So Terre's one of the 252 00:13:04,559 --> 00:13:08,360 Speaker 1: arguments and support of Brexit is that an independent UK 253 00:13:08,480 --> 00:13:11,280 Speaker 1: would be able to forge a strong trade deals on 254 00:13:11,320 --> 00:13:14,360 Speaker 1: its own, particularly with the United States. What are what 255 00:13:14,440 --> 00:13:16,640 Speaker 1: are those Brexit folks thinking about now, is they look 256 00:13:16,679 --> 00:13:19,480 Speaker 1: at the US trying to negotiate on and off again 257 00:13:19,520 --> 00:13:22,439 Speaker 1: with China. Um is that strength in your argument or 258 00:13:22,480 --> 00:13:24,520 Speaker 1: weaken it? I mean, I think it's been a weak 259 00:13:24,640 --> 00:13:28,079 Speaker 1: argument from the beginning, for you know, for several reasons. Um, 260 00:13:28,640 --> 00:13:31,200 Speaker 1: the the the UK is a minnow compared to the 261 00:13:31,280 --> 00:13:33,360 Speaker 1: U S which is a whale on the on the world. 262 00:13:34,080 --> 00:13:35,960 Speaker 1: Thank you so much for joining us at Bloomberg. Opinion 263 00:13:35,960 --> 00:13:57,520 Speaker 1: columnist Terras Raphael guess what treasures are rolling yet again? 264 00:13:57,640 --> 00:13:59,960 Speaker 1: Right now, tenure treasure yields all right, at the lowest 265 00:14:00,200 --> 00:14:03,280 Speaker 1: since October twenties sixteen, investors taking a look at the 266 00:14:03,400 --> 00:14:06,560 Speaker 1: escalating trade rhetoric between the US and China, taking a 267 00:14:06,600 --> 00:14:11,199 Speaker 1: look at the disappointing pp I the producer product prices UH, 268 00:14:11,440 --> 00:14:15,959 Speaker 1: the producer Price index not coming in as high as expected, 269 00:14:16,200 --> 00:14:18,719 Speaker 1: and saying that that's gonna cut rates. The question is 270 00:14:18,880 --> 00:14:21,480 Speaker 1: how much lower can yields really go? Joining us down 271 00:14:21,520 --> 00:14:24,040 Speaker 1: to discuss is Scott Kimball. He is a portfolio manager 272 00:14:24,040 --> 00:14:27,320 Speaker 1: of the Bibo tc H Core plus von Fund. He 273 00:14:27,800 --> 00:14:30,680 Speaker 1: is a portfolio manager focused on fix income for BEMO 274 00:14:30,720 --> 00:14:33,280 Speaker 1: Global Asset Management with two d and two billion dollars 275 00:14:33,320 --> 00:14:37,280 Speaker 1: under management. So, Scott, are you bullish on treasuries here? 276 00:14:37,440 --> 00:14:40,440 Speaker 1: Even after the incredible rally we've seen now? I think 277 00:14:40,440 --> 00:14:43,440 Speaker 1: what we found is that investors are are rethinking the 278 00:14:43,680 --> 00:14:46,480 Speaker 1: view on the treasury position. Uh. We've sort of always 279 00:14:46,560 --> 00:14:49,240 Speaker 1: operated with the ideas as we got closer to zero 280 00:14:49,320 --> 00:14:52,480 Speaker 1: that treasuries were just more fully valued. We've seen now 281 00:14:52,480 --> 00:14:56,080 Speaker 1: with negative rates persisting around the world, that it's really 282 00:14:56,600 --> 00:15:00,280 Speaker 1: very difficult to make a call on overall portfolio to ration. 283 00:15:00,360 --> 00:15:03,200 Speaker 1: And we're more staying neutral, not so much out of bullishness, 284 00:15:03,240 --> 00:15:05,000 Speaker 1: but by the fact that you know, within very negative 285 00:15:05,080 --> 00:15:08,520 Speaker 1: term premium and negative rates overseas. UH, it's very difficult 286 00:15:08,560 --> 00:15:10,760 Speaker 1: to make a case against treasuries in this type of 287 00:15:11,080 --> 00:15:15,560 Speaker 1: a market paradigm that we've entered. So, Scott, you've mentioned that, Um, 288 00:15:15,920 --> 00:15:20,520 Speaker 1: you think the Fed has mishandled that mid Uh, that correction, 289 00:15:20,600 --> 00:15:22,360 Speaker 1: that rate cut they just made. What do you mean 290 00:15:22,360 --> 00:15:23,560 Speaker 1: by that? What do you think they should have done? 291 00:15:24,080 --> 00:15:26,000 Speaker 1: Our our view going into this was, if you're trying 292 00:15:26,040 --> 00:15:29,920 Speaker 1: to stimulate stimulate inflation, that their policy had been rather 293 00:15:30,000 --> 00:15:33,080 Speaker 1: effective so far, and that the tightening cycle was very 294 00:15:33,080 --> 00:15:35,920 Speaker 1: prolonged and it really allowed the economy to get a 295 00:15:35,920 --> 00:15:38,800 Speaker 1: lot of traction on the street. Uh. The challenge though, 296 00:15:38,920 --> 00:15:41,160 Speaker 1: is that then when they reverse course, they used the 297 00:15:41,240 --> 00:15:44,520 Speaker 1: term mid cycle adjustment. So our our preference was not 298 00:15:44,600 --> 00:15:47,480 Speaker 1: to cut rates and not punish savers by lowering rates further, 299 00:15:47,920 --> 00:15:50,120 Speaker 1: but rather to stay the course. But now they use 300 00:15:50,160 --> 00:15:52,800 Speaker 1: the term mid cycle adjustment, and if that means what 301 00:15:52,840 --> 00:15:55,240 Speaker 1: we think they think it means, that should have been 302 00:15:55,240 --> 00:15:58,360 Speaker 1: fifty basis points, not twenty five. Doesn't do anything to 303 00:15:58,840 --> 00:16:01,520 Speaker 1: change bank activity. It certainly doesn't do anything to stimulate 304 00:16:01,520 --> 00:16:04,240 Speaker 1: credit markets. It doesn't do anything to benefit the consumer. 305 00:16:04,360 --> 00:16:06,800 Speaker 1: What all it's done is caused a forward looking path 306 00:16:06,880 --> 00:16:09,440 Speaker 1: for the FED if you look at it to sort 307 00:16:09,480 --> 00:16:12,880 Speaker 1: of have this escalator like UH decline back towards one percent, 308 00:16:12,880 --> 00:16:14,960 Speaker 1: which is not the mid cycle adjustment. That's not the 309 00:16:15,000 --> 00:16:17,200 Speaker 1: policy they wanted to to put in place, So the 310 00:16:17,240 --> 00:16:21,040 Speaker 1: market interpretation and reaction was not congruent with what their 311 00:16:21,080 --> 00:16:23,880 Speaker 1: directive was. Do you think that inflation is dead or 312 00:16:23,920 --> 00:16:27,320 Speaker 1: do you think that people are underpricing the risk of inflation? UH? 313 00:16:27,360 --> 00:16:29,760 Speaker 1: Inflation for now, in our opinion, is not going to 314 00:16:29,880 --> 00:16:32,080 Speaker 1: be too much of a of a challenge. You know, 315 00:16:32,120 --> 00:16:34,280 Speaker 1: in our our Core plus fund, we've we've exited most 316 00:16:34,280 --> 00:16:36,960 Speaker 1: of our inflation link positions and the challenge that we're 317 00:16:37,040 --> 00:16:38,840 Speaker 1: we think it, particularly as it as it relates to 318 00:16:38,880 --> 00:16:42,760 Speaker 1: the FED, is inflation. Over the long term. We'll have 319 00:16:42,840 --> 00:16:45,080 Speaker 1: mechanisms and times where it will accelerate. And we do 320 00:16:45,160 --> 00:16:47,160 Speaker 1: think this expansion in the US, although it's been the 321 00:16:47,200 --> 00:16:50,760 Speaker 1: most hated one in history, UH is pretty durable. But 322 00:16:50,840 --> 00:16:54,040 Speaker 1: the challenges the old inflation model doesn't account for things 323 00:16:54,080 --> 00:16:56,880 Speaker 1: like transparency in pricing. If you think about the power 324 00:16:56,920 --> 00:16:59,640 Speaker 1: of transparency you have from just a smartphone from a 325 00:16:59,680 --> 00:17:03,640 Speaker 1: consumer were perspective. Uh, that squeezing retail margins. It's causing 326 00:17:04,359 --> 00:17:07,480 Speaker 1: a recycling and the labor market away from retail and 327 00:17:07,480 --> 00:17:10,600 Speaker 1: all of that is very disinflationary. So for this whatever 328 00:17:10,640 --> 00:17:12,639 Speaker 1: is left in this cycle, we don't see inflation as 329 00:17:12,640 --> 00:17:15,280 Speaker 1: a problem. So, given where we are with your outlook 330 00:17:15,359 --> 00:17:17,720 Speaker 1: for the FED and inflation kind of how are you 331 00:17:17,760 --> 00:17:21,320 Speaker 1: thinking about your allocation of investment grade and high yield 332 00:17:21,320 --> 00:17:24,160 Speaker 1: and emerging markets? How do you kind of stack them? Certainly, 333 00:17:24,640 --> 00:17:26,520 Speaker 1: I'll start off by saying an area that we're not 334 00:17:26,560 --> 00:17:29,920 Speaker 1: focused on right now is emerging markets. Uh, the exposure 335 00:17:29,960 --> 00:17:33,159 Speaker 1: the global economy is already seeping into the US corporate 336 00:17:33,160 --> 00:17:35,960 Speaker 1: bond market enough that if you add emerging market debt, 337 00:17:36,359 --> 00:17:38,520 Speaker 1: the spreads and yields there are not giving you and 338 00:17:38,600 --> 00:17:42,480 Speaker 1: our our estimation the the the extra compensation you need 339 00:17:42,520 --> 00:17:46,760 Speaker 1: to include them. High yield we will acknowledge some repricing primarily, 340 00:17:46,760 --> 00:17:48,919 Speaker 1: and energy has opened up the door. If you've been 341 00:17:48,960 --> 00:17:51,320 Speaker 1: watching a few bonds, that boy, I'd like to buy 342 00:17:51,320 --> 00:17:53,080 Speaker 1: that at six, seven or eight percent, but it's been 343 00:17:53,119 --> 00:17:55,480 Speaker 1: yielding for and now it's repriced. It is a good 344 00:17:55,480 --> 00:17:59,359 Speaker 1: opportunity to to find some exposure. But on overall, and 345 00:17:59,359 --> 00:18:01,479 Speaker 1: the way we're posis shooting our fund is a focus 346 00:18:01,520 --> 00:18:04,360 Speaker 1: on investment grade. The problem is when you talk high 347 00:18:04,400 --> 00:18:07,399 Speaker 1: yield versus investment grade, people like to talk yield in 348 00:18:07,480 --> 00:18:09,800 Speaker 1: one and spread in the other. So if we look 349 00:18:09,800 --> 00:18:12,760 Speaker 1: at spread for both, the accredit spread you're getting for 350 00:18:12,840 --> 00:18:16,080 Speaker 1: high yield does really isn't really accounting for what could 351 00:18:16,160 --> 00:18:19,800 Speaker 1: be some upward pressure on on the default rate. Given 352 00:18:19,800 --> 00:18:22,679 Speaker 1: this backdrop, are you treating more or less than you 353 00:18:22,760 --> 00:18:26,320 Speaker 1: normally do? Less much too? Probably the sigrin of some 354 00:18:26,359 --> 00:18:28,280 Speaker 1: of our counterpartiess no, but this is interesting to me 355 00:18:28,320 --> 00:18:30,119 Speaker 1: because it seems like a lot of people are in 356 00:18:30,119 --> 00:18:32,440 Speaker 1: the same boat. It's sort of not not much incentive 357 00:18:32,680 --> 00:18:36,000 Speaker 1: to relation shift your portfolio around. Agree, So interesting enough. 358 00:18:36,000 --> 00:18:37,800 Speaker 1: If you look at a core plus fund, our our 359 00:18:37,840 --> 00:18:41,360 Speaker 1: average turnover statistic is about and we tend to take 360 00:18:41,400 --> 00:18:43,600 Speaker 1: on positions with a twelve to twenty four month kind 361 00:18:43,600 --> 00:18:47,520 Speaker 1: of an outlook. But even now our turnover is probably 362 00:18:47,520 --> 00:18:50,480 Speaker 1: lower or probably running closer to and to your point, 363 00:18:50,920 --> 00:18:52,919 Speaker 1: if you have a bond and you're comfortable with the 364 00:18:52,920 --> 00:18:55,359 Speaker 1: story and it's giving you a yield premium. If you 365 00:18:55,400 --> 00:18:58,240 Speaker 1: want to sell it, you have to replace it. And unfortunately, 366 00:18:58,280 --> 00:19:01,000 Speaker 1: with where credit spreads have gone on, you're looking at 367 00:19:01,040 --> 00:19:05,040 Speaker 1: a you know one s for the investment grade credit universe. 368 00:19:05,480 --> 00:19:07,679 Speaker 1: It's it's a pretty expensive time to buy from an 369 00:19:07,680 --> 00:19:10,720 Speaker 1: all in yield or spread perspective. Right, Scott Campbell, thank 370 00:19:10,720 --> 00:19:12,600 Speaker 1: you so much for joining us. We appreciate it. Scott's 371 00:19:12,640 --> 00:19:17,240 Speaker 1: portfolio manager focusing on fixed income for BEMO Global Asset Management. 372 00:19:17,240 --> 00:19:19,800 Speaker 1: He's based in Miami. He has a tan line for 373 00:19:19,880 --> 00:19:22,760 Speaker 1: his sunglasses. That's how Miami this guy is. But he 374 00:19:22,840 --> 00:19:26,159 Speaker 1: joined us here in our blue interactive jealous so he 375 00:19:26,240 --> 00:19:28,240 Speaker 1: joined to here in a Bluebriken interactive broker studio. We 376 00:19:28,400 --> 00:19:30,879 Speaker 1: appreciated making the trip up to the Big Apple, but 377 00:19:30,920 --> 00:19:32,679 Speaker 1: I'm sure he's going to be jetting back to Miami 378 00:19:33,240 --> 00:19:50,520 Speaker 1: very quickly. Well, I'm looking at some interesting data. The 379 00:19:50,600 --> 00:19:53,359 Speaker 1: cost of a data breach has risen twelve over the 380 00:19:53,400 --> 00:19:56,320 Speaker 1: past five years and now costs on average three point 381 00:19:56,440 --> 00:20:00,040 Speaker 1: nine two million dollars, and that's according to IBM. To 382 00:20:00,080 --> 00:20:03,480 Speaker 1: dig a little bit deeper into the all issues cybersecurity, 383 00:20:03,600 --> 00:20:06,280 Speaker 1: we welcome Wendy Whitmore. Wendy is a global partner and 384 00:20:06,320 --> 00:20:10,600 Speaker 1: director for x Force Threat Intelligence at IBM. She's based 385 00:20:10,640 --> 00:20:13,600 Speaker 1: in Los Angeles. Lisa and I love that title, Wendy. Wendy, 386 00:20:13,640 --> 00:20:16,280 Speaker 1: thanks so much for joining us. Um, just give us 387 00:20:16,280 --> 00:20:18,680 Speaker 1: a sense, you know, kind of what are the biggest 388 00:20:18,800 --> 00:20:24,840 Speaker 1: risk two organizations right now? Hey, Paul and Lisa. So yeah, 389 00:20:24,920 --> 00:20:27,280 Speaker 1: you know, having responded to some of the biggest breaches 390 00:20:27,320 --> 00:20:30,520 Speaker 1: in the world over the past almost twenty years, now, UM, 391 00:20:30,560 --> 00:20:32,720 Speaker 1: you know, I can tell you one thing is consistent, 392 00:20:32,880 --> 00:20:35,040 Speaker 1: and that's that if attackers can find a way to 393 00:20:35,080 --> 00:20:38,560 Speaker 1: make money from stealing data, they will. Um. That becomes 394 00:20:38,560 --> 00:20:41,679 Speaker 1: problematic today because we're in a data economy and a 395 00:20:41,720 --> 00:20:43,879 Speaker 1: lot of people aren't familiar with the fact that the 396 00:20:44,000 --> 00:20:47,760 Speaker 1: dark web actually represents the world's third largest economy coming 397 00:20:47,760 --> 00:20:50,399 Speaker 1: in and almost six trillion dollars. So what that means 398 00:20:50,480 --> 00:20:53,280 Speaker 1: is that attackers can leverage that as a forum to 399 00:20:53,400 --> 00:20:56,640 Speaker 1: share information, to buy data, to sell it. So when 400 00:20:56,680 --> 00:20:59,640 Speaker 1: we're looking at, you know, which organizations could be attacked, 401 00:20:59,640 --> 00:21:02,840 Speaker 1: what are the biggest risks? Ultimately, if an organization has 402 00:21:03,000 --> 00:21:05,439 Speaker 1: data that is of interest that could be monetized in 403 00:21:05,480 --> 00:21:08,560 Speaker 1: some way, whether it's a financial record or a healthcare record, 404 00:21:08,600 --> 00:21:11,800 Speaker 1: for example, all of that information becomes very valuable in 405 00:21:11,880 --> 00:21:14,520 Speaker 1: this type of dark web economy, and a lot of 406 00:21:14,600 --> 00:21:18,000 Speaker 1: organizations don't necessarily think of that. They look at their organization, 407 00:21:18,359 --> 00:21:21,040 Speaker 1: you know, as as in their eyes versus how an 408 00:21:21,040 --> 00:21:22,960 Speaker 1: attack or sees it in terms of kind of being 409 00:21:22,960 --> 00:21:25,840 Speaker 1: a gold mine to potentially make some money. Paul, I'm 410 00:21:25,840 --> 00:21:28,320 Speaker 1: going to force you to call me the director of 411 00:21:28,560 --> 00:21:31,800 Speaker 1: X Force Yield Intelligence, because I think that that that's 412 00:21:31,800 --> 00:21:34,119 Speaker 1: going to have to be my title. Wendy, you just 413 00:21:34,160 --> 00:21:37,320 Speaker 1: got back or you're actually you're on site at the 414 00:21:37,320 --> 00:21:40,679 Speaker 1: black Hat conference in Las Vegas, which is the world's 415 00:21:40,720 --> 00:21:44,800 Speaker 1: leading information security event. I just picture a whole lot 416 00:21:44,840 --> 00:21:47,639 Speaker 1: of people who are incredibly paranoid by nature, sitting around 417 00:21:47,640 --> 00:21:50,679 Speaker 1: and imagining worst case scenarios. What were the most hotly 418 00:21:50,720 --> 00:21:54,480 Speaker 1: debated topics there. Yeah, I think you've got an accurate 419 00:21:54,520 --> 00:21:57,080 Speaker 1: picture in your in your head, Lisa, But um, I 420 00:21:57,119 --> 00:21:59,840 Speaker 1: think kind of first and foremost is just the regular 421 00:21:59,840 --> 00:22:02,679 Speaker 1: to a landscape. Right, So we're looking at what is 422 00:22:02,720 --> 00:22:05,399 Speaker 1: going on with these fines that are raging from you know, 423 00:22:05,440 --> 00:22:08,960 Speaker 1: two million dollars upwards of five billion dollars, and that 424 00:22:09,119 --> 00:22:12,520 Speaker 1: really going to have a dramatic impact on our industry, 425 00:22:12,760 --> 00:22:16,000 Speaker 1: but ultimately on the way organizations from the CEO and 426 00:22:16,040 --> 00:22:19,760 Speaker 1: board levels on down think about investing in cyber security. Right, 427 00:22:19,800 --> 00:22:22,760 Speaker 1: Will they continue to buy more cyber insurance, will they 428 00:22:22,800 --> 00:22:26,560 Speaker 1: allocate money for fines? Will they do things like continue 429 00:22:26,600 --> 00:22:30,199 Speaker 1: to invest more proactively insecurity? UM. I think all of 430 00:22:30,200 --> 00:22:32,680 Speaker 1: those things will happen. But that's certainly a very hotly 431 00:22:32,720 --> 00:22:36,120 Speaker 1: debated topic right now. So when the following the Capital 432 00:22:36,119 --> 00:22:39,479 Speaker 1: One breached, definitely people raising the questions about the cloud 433 00:22:39,520 --> 00:22:41,600 Speaker 1: and the security of the cloud. I think Capital One 434 00:22:41,600 --> 00:22:44,240 Speaker 1: at one point was even suggesting, you know, touting that 435 00:22:44,280 --> 00:22:46,479 Speaker 1: the cloud was more secure, but that may not be 436 00:22:46,520 --> 00:22:49,399 Speaker 1: the case. How should we think about that? Well, you know, 437 00:22:49,480 --> 00:22:52,560 Speaker 1: we've got teams of people on site responding these attacks 438 00:22:52,960 --> 00:22:55,320 Speaker 1: all over the world, and some of them are cloud 439 00:22:55,320 --> 00:22:58,080 Speaker 1: based and many of them are not. UM. The reality 440 00:22:58,160 --> 00:23:00,320 Speaker 1: is that whether the data is in the cloud or not, 441 00:23:00,440 --> 00:23:02,680 Speaker 1: I think the number one thing that companies still struggle 442 00:23:02,720 --> 00:23:05,960 Speaker 1: with is actually knowing where their most sensitive data is 443 00:23:06,320 --> 00:23:09,280 Speaker 1: and ensuring that they have adequate controls and protecting that 444 00:23:09,600 --> 00:23:12,399 Speaker 1: right UM. At this point, specific to the cloud, about 445 00:23:12,400 --> 00:23:17,280 Speaker 1: forty three percent of attacks are related to misconfigured cloud databases, 446 00:23:17,560 --> 00:23:20,879 Speaker 1: So that means that you know, access is freely available 447 00:23:21,000 --> 00:23:23,360 Speaker 1: or there are some loopholes for an organization of an 448 00:23:23,359 --> 00:23:26,359 Speaker 1: outsider to get into that data. But the reality is 449 00:23:26,400 --> 00:23:28,760 Speaker 1: the number one thing is if companies can understand where 450 00:23:28,760 --> 00:23:31,400 Speaker 1: their most secure data, as sensitive data is, they can 451 00:23:31,400 --> 00:23:34,280 Speaker 1: secure it much more effectively. And at this point most 452 00:23:34,400 --> 00:23:37,800 Speaker 1: organizations just don't have the visibility needed to answer those 453 00:23:37,880 --> 00:23:41,439 Speaker 1: questions pretty quickly. What do you which industries are seeing 454 00:23:41,440 --> 00:23:45,800 Speaker 1: the biggest uptick in cyber attacks? Yeah, great question. I mean, 455 00:23:45,800 --> 00:23:49,680 Speaker 1: time and again, we always see financial services being attacked. Uh. 456 00:23:50,080 --> 00:23:52,000 Speaker 1: One of the things that we found this year though, 457 00:23:52,160 --> 00:23:55,840 Speaker 1: is that transportation actually moved from number five to number two. 458 00:23:56,160 --> 00:23:59,160 Speaker 1: So when we say that, we're talking about commercial transportation, 459 00:23:59,520 --> 00:24:04,840 Speaker 1: aviation sector, certainly travel brands as well, and we're seeing 460 00:24:04,880 --> 00:24:07,400 Speaker 1: a tremendous amount of attacks that are increasing in those 461 00:24:07,480 --> 00:24:10,119 Speaker 1: and you've certainly seen some seen some fines recently in 462 00:24:10,160 --> 00:24:13,560 Speaker 1: those sectors as well. So when day to what extent 463 00:24:13,720 --> 00:24:17,359 Speaker 1: can our data ever really be secure? I mean, I 464 00:24:17,359 --> 00:24:18,879 Speaker 1: think some people are just saying, you know what, you 465 00:24:19,000 --> 00:24:21,720 Speaker 1: just can't do everything. How shou we think about that? 466 00:24:22,800 --> 00:24:25,399 Speaker 1: It's true? I think the reality is that um the 467 00:24:25,960 --> 00:24:28,560 Speaker 1: need to secure data is not just actually on the 468 00:24:28,560 --> 00:24:31,520 Speaker 1: company side, it's also on the consumer side as well, right, 469 00:24:31,600 --> 00:24:34,040 Speaker 1: so there are things that we as consumers can do 470 00:24:34,240 --> 00:24:37,120 Speaker 1: to actually protect some of our more personal and sensitive data. 471 00:24:37,680 --> 00:24:40,639 Speaker 1: And um one of those things, for example, would be 472 00:24:40,720 --> 00:24:43,159 Speaker 1: to make sure that if you're using um, you know, 473 00:24:43,240 --> 00:24:48,119 Speaker 1: financial banking transactions, which ever institution you're using, that you're 474 00:24:48,200 --> 00:24:50,919 Speaker 1: using some sort of a two factor authentication or multi 475 00:24:50,960 --> 00:24:54,600 Speaker 1: factor authentication. And the same thing with your social media sites, 476 00:24:54,720 --> 00:24:58,119 Speaker 1: with your email accounts, all of those are now pretty 477 00:24:58,160 --> 00:25:00,520 Speaker 1: simple to manage, even for people who may not be 478 00:25:00,560 --> 00:25:03,200 Speaker 1: as technical. That's really important. And the next thing I 479 00:25:03,200 --> 00:25:05,600 Speaker 1: would say would be with password managers, so you can 480 00:25:05,720 --> 00:25:09,199 Speaker 1: use that so you're not kind of replicating you know, um, 481 00:25:09,240 --> 00:25:11,480 Speaker 1: I love my dog, for example, as your password for 482 00:25:11,520 --> 00:25:16,920 Speaker 1: every site that you use and revealed me blending. Uh. 483 00:25:17,040 --> 00:25:18,560 Speaker 1: You know. I want to go back to the image 484 00:25:18,640 --> 00:25:21,480 Speaker 1: of a group of paranoid people sitting around and wondering 485 00:25:21,640 --> 00:25:24,600 Speaker 1: what next could potentially go wrong in a worst case scenario. 486 00:25:24,680 --> 00:25:27,439 Speaker 1: And I'm wondering, what are most of the people who 487 00:25:27,480 --> 00:25:30,240 Speaker 1: are work in cybersecurity do, I mean, do they just 488 00:25:30,320 --> 00:25:34,880 Speaker 1: eliminate their presence is almost entirely from the web. Uh, 489 00:25:35,119 --> 00:25:37,439 Speaker 1: you know, it's kind of almost the opposite. It really depends. 490 00:25:37,480 --> 00:25:40,000 Speaker 1: There's certainly a group that's extremely a paranoid that never 491 00:25:40,080 --> 00:25:43,080 Speaker 1: has a presence. But the reality is for most people, 492 00:25:43,160 --> 00:25:46,480 Speaker 1: not just cybersecurity professionals, but people around the world really 493 00:25:46,480 --> 00:25:49,680 Speaker 1: need to kind of highlight their social media presence and 494 00:25:49,720 --> 00:25:53,440 Speaker 1: their online presence for career advancement. And so the reality 495 00:25:53,520 --> 00:25:56,680 Speaker 1: is that we have the same concerns everyone else does. Um, 496 00:25:56,720 --> 00:25:59,199 Speaker 1: we may be a bit more paranoid than than usual, 497 00:25:59,480 --> 00:26:01,840 Speaker 1: but we're doing things, like I mentioned, so making sure 498 00:26:01,840 --> 00:26:04,080 Speaker 1: that we're kind of taking the extra steps so that 499 00:26:04,160 --> 00:26:06,639 Speaker 1: it's a little bit more difficult. Um. The way we 500 00:26:06,680 --> 00:26:09,520 Speaker 1: communicate that to our clients, um, And it's the same 501 00:26:09,560 --> 00:26:12,639 Speaker 1: thing personal is all about limiting the impact. So if 502 00:26:12,680 --> 00:26:15,439 Speaker 1: I can make it an attack or take longer to 503 00:26:15,560 --> 00:26:18,600 Speaker 1: achieve their goal, which is usually to steal steal data 504 00:26:18,640 --> 00:26:20,880 Speaker 1: from an organization or to steal it from me personally, 505 00:26:21,080 --> 00:26:24,360 Speaker 1: and if I can buy more time um along that way, 506 00:26:24,400 --> 00:26:26,919 Speaker 1: that allows me more time to detect the attack, to 507 00:26:26,960 --> 00:26:30,000 Speaker 1: defend against it, and then ultimately to limit the impact, 508 00:26:30,040 --> 00:26:32,680 Speaker 1: which you know personally would be a limit steeling of 509 00:26:33,040 --> 00:26:36,119 Speaker 1: information but on a business side, limiting the impact of 510 00:26:36,200 --> 00:26:39,120 Speaker 1: a huge you know, theft, which translates to a tremendous 511 00:26:39,119 --> 00:26:43,000 Speaker 1: amount of money spent. Thank you so much for being 512 00:26:43,040 --> 00:26:46,159 Speaker 1: with us. We will always love having you on just 513 00:26:46,200 --> 00:26:47,840 Speaker 1: so that we can say your title, also because you 514 00:26:47,840 --> 00:26:50,800 Speaker 1: give us fabulous information. Wendy with More, Global partner and 515 00:26:50,880 --> 00:26:55,280 Speaker 1: director of the X Force Threat Intelligence at IBM, which 516 00:26:55,320 --> 00:26:59,200 Speaker 1: is a fabulous again, fabulous side. Thanks for listening to 517 00:26:59,240 --> 00:27:01,880 Speaker 1: the Bloomberg pan Ol podcast. You can subscribe and listen 518 00:27:01,960 --> 00:27:05,320 Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you prefer. 519 00:27:05,520 --> 00:27:08,160 Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. I'm 520 00:27:08,200 --> 00:27:10,960 Speaker 1: Lisa Abram Woyds. I'm on Twitter at Lisa Abram woits 521 00:27:10,960 --> 00:27:13,800 Speaker 1: one before the podcast, you can always catch us worldwide. 522 00:27:13,800 --> 00:27:14,800 Speaker 1: I'm Bloomberg Radio