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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Let's bring in Barry

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Speaker 1: rid Holtz Shall we Bloomberg opinion columnists, host of Masters

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Speaker 1: in Business on Bloomberg Radio, which I highly recommend. He's

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Speaker 1: also the founder and chairman, of course in chief investment

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Speaker 1: officer of Riddholtz Wealth Management. All right, Barry, we've got

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Speaker 1: some folks going to Congress, going to Washington, d C.

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Speaker 1: Today to talk about that all the game stop stuff.

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Speaker 1: Would it be naive of me to expect any meaningful discussion?

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Speaker 1: Dare say, maybe even some action items. What are you expecting? Um,

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Speaker 1: a lot of noise and fury and nothing, A whole

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Speaker 1: lot more heat than light, to say the least. Look,

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Speaker 1: this is really a very very specific incidents that this

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Speaker 1: is not a systemic problem. You have a whole bunch

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Speaker 1: of board people at home, you don't have access to casinos.

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Speaker 1: Take a take a message board that, by the way,

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Speaker 1: has talked about hundreds and hundreds of stocks over the

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Speaker 1: past decade, and they happen to find one that had

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Speaker 1: what not only was it under ten dollars, which means

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Speaker 1: it's pretty cheap, but it had an enormous short interest

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Speaker 1: and and uh cheap stock options and and that combination

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Speaker 1: along with free trading and the gamification of trading on

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Speaker 1: the robin. They know, yeah, that's that's right. It's you know,

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Speaker 1: not everything is going to be spent on on chicken tenders.

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Speaker 1: You've gotta leave a little money for the for that

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Speaker 1: coal option, gamma squeeze play. But you know, this is

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Speaker 1: this is really one of those things that Congress should

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Speaker 1: be focusing on big systemic problems, not whether this one

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Speaker 1: stock was pumped or dumped by this one group of

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Speaker 1: of message board officionados. The SEC is more than capable

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Speaker 1: of enforcing if if a crime was committed and pursuing it.

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Speaker 1: And yet and yet, Barry, this is the one issue, Uh,

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Speaker 1: this is the one issue that um Ted Cruz and

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Speaker 1: AOC get on the same page for. You know, what

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Speaker 1: does that tell you about? It tells you that the

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Speaker 1: most dangerous place in Washington, d C. Is between a

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Speaker 1: television camera and and some of the higher profile congress people.

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Speaker 1: That that's what it tells you that, look, you know,

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Speaker 1: there is a legitimate issue that lots of people are hurting,

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Speaker 1: and that some people are doing silly things with their

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Speaker 1: rent money because they don't see any other way to

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Speaker 1: to earn a living. Uh. That's an issue that certainly

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Speaker 1: is worthy of debate. But the specifics, the contours of

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Speaker 1: the GameStop trade are so specific to this one company.

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Speaker 1: You know, it's an outlawyer, and I don't think you

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Speaker 1: can demonstrate anything worthwhile about markets and regulation and what's

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Speaker 1: going on by holding up you know, one out of

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Speaker 1: stocks and saying, look, the system has broken. I think

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Speaker 1: hang on, I think you're ignoring one part of it.

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Speaker 1: Which I'm not saying that I buy into this theory,

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Speaker 1: but if you're, if you're into conspiracy theories, it's pretty

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Speaker 1: easy to imagine that super billionaires that were trying to

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Speaker 1: short this company to death, we're able to control robin

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Speaker 1: Hood which they pay right for traffic and then cover

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Speaker 1: it up. Well. The the other cool thing if you're

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Speaker 1: a conspiracy theorist is that those super billionaires also control Congress,

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Speaker 1: so you're never going to find out about it. But

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Speaker 1: what do you think about the possibility of any ties.

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Speaker 1: So it's wrong to call that a conspiracy theory because

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Speaker 1: various trading firms, from Citadel to some of the other

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Speaker 1: high frequency shops, they are robin Hood's customers. They're the

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Speaker 1: ones who pay robin Hood. You know, there's this illusion

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Speaker 1: that the users who are buying and selling stocks on

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Speaker 1: robin Hood are the customers. That that's wrong, that they're

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Speaker 1: the product. Their order flow is what gets sold. It's

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Speaker 1: like radio and when you ask people what what are

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Speaker 1: what is radio's product? And most people say, well, radio

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Speaker 1: sells advertising and the answer is no, radio sells an

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Speaker 1: audience to advertisers. Well, robin Hood sells an audience of

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Speaker 1: traders flow to market makers and high frequency traders who

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Speaker 1: pay them. So it really reflects a people calling this

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Speaker 1: a conspiracy theory. This is really a textbook example of

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Speaker 1: Dunning Krueger effect. These people just simply don't know how

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Speaker 1: markets operate and how trading operates. Now, I'm not saying

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Speaker 1: this is the optimal circumstance, and I'm not saying this

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Speaker 1: is better or worse than other ways of doing it.

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Speaker 1: But the simple facts are that in order to improve

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Speaker 1: both price discovery and reduce the spreads between the bid

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Speaker 1: and the order. But but bear, you're not saying that

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Speaker 1: Ken Griffin ordered Lad to stop the Reddit attack. No,

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Speaker 1: the Lad was out of capital. There are specific rules

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Speaker 1: from the SEC and you cannot allow thousands and thousands

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Speaker 1: of clients to buy billions and billions of dollars of

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Speaker 1: stock and risk having that get cut in half and

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Speaker 1: not be able to settle because you lack sufficient capital.

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Speaker 1: And to Lad's credit, he went out to Goldman Saxon

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Speaker 1: Chase and got a couple of billion dollars in one week,

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Speaker 1: and the next week picked up another three billion dollars,

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Speaker 1: but they had to put a bosch on buying more stock.

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Speaker 1: I'm not I'm not buying that, Barry. He went on

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Speaker 1: clubhouse and told Elon Musk they wanted three billion dollars,

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Speaker 1: but it took him then twelve hours to get him

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Speaker 1: down to like one five. Give me a break if

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Speaker 1: you can. If you can bargain them down like that

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Speaker 1: and going round up billions in twenty four hours, why

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Speaker 1: do you need to stop trading? Why not just we'll

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Speaker 1: continue this conversation at at a later day, will swap

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Speaker 1: conspiracy stories. Barry Ridholts, thanks so much for joining us

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Speaker 1: here at Bloomberg Opinion Collins and host a Masters in

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Speaker 1: Business on Bloomberg Radios. Also the founder, chairman and chief

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Speaker 1: investment officer of Rit Holt Well Management. Well, Matt, we

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Speaker 1: just concluded a spirited debate with our Bloomberg Opinions Barry Ridholts,

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Speaker 1: on the value of these hearings today, these game stop hearings,

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Speaker 1: Barry suggesting maybe a little bit more show uh than

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Speaker 1: any substance. But our next guest, Matt, says, game stop

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Speaker 1: hearings today, they are necessary. Se Non are all director

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Speaker 1: of the m I T Initiative on the Digital Economy

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Speaker 1: at m I T s, Professor of Management I T

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Speaker 1: Marketing and Data Science and founding partner of Manifest Capital. Uh,

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Speaker 1: sign on, thank you so much for joining us here.

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Speaker 1: You know we're really having a debate today, saying should

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Speaker 1: we even be having hearings on this issue of investor trading?

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Speaker 1: Give us your thoughts, Well, I mean I think that

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Speaker 1: we have to know more about what happened. Uh. You know,

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Speaker 1: this is in a sense an unprecedented UH, sort of

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Speaker 1: new form of crowdpower. UH. And there are multiple different

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Speaker 1: types of speech going on in the UH in the

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Speaker 1: reddit sub reddits that are driving for instance, the game

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Speaker 1: stopped stock price, and we need to know more. We

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Speaker 1: need a full SEC investigation and hearings can help as well,

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Speaker 1: because we don't know, for instance, where there people involved

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Speaker 1: in this conversation that had ties to institutional investors. While

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Speaker 1: some had funds lost money, others made a lot of money,

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Speaker 1: like black Rock I think made something like three billion dollars.

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Speaker 1: And the former CEO of Chewy was a big holder

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Speaker 1: of game Stop stock prior to the ride ton. So

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Speaker 1: we need we need to we need to know more.

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Speaker 1: You know, I've noticed, um after this, during and after this,

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Speaker 1: all of my friends from high school, who never cared

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Speaker 1: about what I did for a living started calling me

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Speaker 1: and asking me about this stock and that stock. UM.

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Speaker 1: My wife, who doesn't know anything about the market, she

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Speaker 1: thinks the word rally is funny. She said, should I

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Speaker 1: get a robin Hood account? I mean, everybody, the shoeshine

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Speaker 1: boy is getting in on this now. The question is

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Speaker 1: is that dangerous? Muhammadi Arian also asking is this causing

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Speaker 1: a danger. What are you thinking on Well, I mean,

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Speaker 1: I think that the democratization of the markets is a

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Speaker 1: good thing. I don't think that in any way we

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Speaker 1: should limit anyone's access to the markets. But I think

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Speaker 1: what we're seeing is that we don't have a full

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Speaker 1: asp on how the information ecosystem that we've created in

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Speaker 1: the last ten years or so through social media is

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Speaker 1: related to the financial ecosystem that we see. So obviously,

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Speaker 1: if there was misinformation flowing in these conversations, that would

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Speaker 1: run a foul of the sec that's pure market manipulation.

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Speaker 1: But if people are just raw rying their stock purchases

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Speaker 1: in a public way as they're buying stocks, it's not

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Speaker 1: clear that any of that is illegal in any way.

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Speaker 1: There's also a third form of communication, which is about

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Speaker 1: coordinating um stock purchasing, which is kind of akin to

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Speaker 1: collusion on the producers side, but it's not really the same.

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Speaker 1: So we have to know more, and we have to

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Speaker 1: think about the implications of the ties between the information

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Speaker 1: ecosystem that we have and the financial markets. All right,

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Speaker 1: we're rejoined by Barry rid Holtz, Bloomberg opinion columnist. Barry,

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Speaker 1: you know we're seem to sign on a row of

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Speaker 1: m I t you know, making some really valid points

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Speaker 1: about bringing and trying to get some more information here

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Speaker 1: through uh congressional hearings here, bart do you think this

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Speaker 1: is just something that the SEC can deal with and

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Speaker 1: it's just a regular old short squeeze that we've seen before. Well,

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Speaker 1: it's a combination of a regular short squeeze with a

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Speaker 1: bit of a because the stock was so cheap, and

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Speaker 1: because there was such a large run of out of

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Speaker 1: the money care options, there was also the gamma squeeze

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Speaker 1: aspect of this. I'm not sure what Congress is gonna find.

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Speaker 1: I don't know if they're the institution best equipped to

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Speaker 1: investigate this. The one caveat I would really emphasize is

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Speaker 1: the you know, Wall Street bets Unreddit. I don't really

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Speaker 1: see how this is very different than what we used

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Speaker 1: to see with the Yahoo message boards or the Raging

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Speaker 1: Bull message boards in the es that we lived through this.

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Speaker 1: Here's a question, Barry, how is it Is it the

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Speaker 1: same as you know, Facebook and Twitter being manipulated by

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Speaker 1: the Russians as has been alleged during the two thousand

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Speaker 1: sixteen election. I mean, if they could do that, if

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Speaker 1: you buy into that, Um, why couldn't they also mess

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Speaker 1: with us markets by you know, fabricating Wall Street bets

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Speaker 1: on Reddit. News flash, don't get trading ideas off of Twitter.

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Speaker 1: Let me let me write that down. I mean a

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Speaker 1: lot of this stuff is really just basic common sense.

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Speaker 1: My assumption is if I read something on Facebook or Twitter,

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Speaker 1: especially about a stock where another person might have obsested

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Speaker 1: financial interest, my immediate assumption is most of this is

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Speaker 1: probably nonsense. Now, maybe that's because I'm an old skeptic

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Speaker 1: who's been in the markets for too long, but I

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Speaker 1: think the youth kind of have to learn um information

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Speaker 1: theory and who they can trust and what's signaling? What's noise? Hey?

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Speaker 1: Sign it? You actually wrote a book on this incitled

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Speaker 1: The Hype Machine. How social media disrupts our elections, our economy,

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Speaker 1: and our health, and how we must adapt. Give you

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Speaker 1: this game stop Reddit? Uh, you know trading event as

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Speaker 1: perhaps something bigger in the economy, in our trading. How

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Speaker 1: are you kind of piecing that together? Well? I mean,

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Speaker 1: I think that a big difference between the message boards

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Speaker 1: of old and uh, the information ecosystem of today is

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Speaker 1: algorithmic amplification. You know, this information moves so fast and

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Speaker 1: scales so rapidly today and is driven by algorithms routing

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Speaker 1: information uh in different ways across the network that we

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Speaker 1: have to understand the scale, speed, and potential impact of

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Speaker 1: this information diffusion in our society today. And I think

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Speaker 1: we have to see it as a little bit different

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Speaker 1: because we're seeing almost weekly, uh, you know, ripped from

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Speaker 1: the headlines, uh, the impact of these social networks and

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Speaker 1: social media companies on our society, whether it's uh the

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Speaker 1: spread of political misinformation or coronavirus vaccine misinformation, or signing

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Speaker 1: the rise and fall of stock prices. What do you

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Speaker 1: think about the populace concern that these billionaire masters of

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Speaker 1: Wall Street were able to whip robin Hood into shape

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Speaker 1: and break the backs of you know, Joe Trader. Well,

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Speaker 1: I mean, I think that the David and Goliath story

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Speaker 1: doesn't really apply very well to game Stop. I think that, uh,

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Speaker 1: you know, anybody who understands the business model of robin

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Speaker 1: Hood knows that it makes money from institutional clients that

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Speaker 1: are providing the back ends of the trades, that they

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Speaker 1: are essentially giving commission free to the retail investors. So

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Speaker 1: I think that robin Hood has a precarious future, both

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Speaker 1: because of backlash from the retail investors when they were

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Speaker 1: not allowed to sell the game stop stock price, you

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Speaker 1: know stock they were buying, but also from the realization

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Speaker 1: that hey, maybe we are the product here and maybe

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Speaker 1: the institutional investors the client. So Barry earlier, we were

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Speaker 1: having a heated discussion about, you know, kind of whether,

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Speaker 1: uh that David Portnoy's of the world were right in

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Speaker 1: saying that, you know, the robin Hood and the other

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Speaker 1: platforms they screwed us by not allowing us to trade

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Speaker 1: and Elizabeth Warren and exactly but again that the narrative

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Speaker 1: coming from those platforms, it's like, hey, we were just

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Speaker 1: you know, doing what we have to do to meet

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Speaker 1: our margin calls. How do you come down on that? Yeah, no,

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Speaker 1: that's exactly right. So you guys touched on three really

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Speaker 1: important things. First, you know, this is a company that

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Speaker 1: has grown so rapidly robin Hood, that their their capital

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Speaker 1: base just failed to keep up with the massive run

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Speaker 1: up in the assets on their balance sheets. I clearly

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Speaker 1: think and you could see in the multiple times they

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Speaker 1: tapped various lines of credit to add capital to their

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Speaker 1: balance sheets that that was clearly a risk management process.

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Speaker 1: And and it's very imaginable that had the stock collapsed

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Speaker 1: before they had settlements done, they would have been short tens,

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Speaker 1: you know, hundreds and hundreds of millions of dollars that

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Speaker 1: they couldn't afford. So that's number one. Number two, I

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Speaker 1: totally agree with the professor about the impact of of

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Speaker 1: all the algorithmic stimulus UM. And it's not just it's

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Speaker 1: not just Twitter and Facebook. You have to look at

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Speaker 1: UH ticktock also is something that's using UH that approach

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Speaker 1: plus the gamification of stock trading, that's a very, very

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Speaker 1: dangerous combination. I love having we have Barry ritt Holtz

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Speaker 1: whose podcast as Masters of Finance, and then we have

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Speaker 1: the professor who are probably teaches Masters students at m

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Speaker 1: i T professor. One quick final question we've been talking

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Speaker 1: about T plus two, which is like you have to

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Speaker 1: use a cotton gin and a printing press UM to

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Speaker 1: verify that you bought stock these days, When are we

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Speaker 1: gonna start using blockchain and make it faster? Oh? I

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Speaker 1: think that's a great question, and I think that, uh,

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Speaker 1: it's interesting to juxtapose that with the rise of the

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Speaker 1: price of bitcoin recently, because I really think that the

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Speaker 1: major innovation. There is the blockchain. I think that you're

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Speaker 1: going to see blockchain uh sort of um become a

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Speaker 1: decentral decentralized verification technique across many different industries, and I

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Speaker 1: think it's going to spur a ton of innovation. Uh.

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Speaker 1: It's a way to keep things decentralized but also verified.

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Speaker 1: It's a way uh to to give people assurances um

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Speaker 1: that that I think could be very helpful in a

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Speaker 1: number of industries. Santana Role, thank you so much for

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Speaker 1: joining us. We really appreciate gating your perspective. Snana Role,

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Speaker 1: director of the m I T Initiative on the Digital Economy.

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Speaker 1: And Barry Ridholts, thanks for coming back again for another segment.

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Speaker 1: Barry Ridhults Bloomberg Opinion Commus, Masters in Business Podcasts and

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Speaker 1: Ridholt's Wealth Management Matt A great discussion there. We'll see

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Speaker 1: what happens on these hearings this afternoon. It should be

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Speaker 1: very interesting, folks. When I tell you that rich green

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Speaker 1: Field of Lightshed Partners is one of the leading voices

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Speaker 1: in the media, telecom and technology space, uh, take it

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Speaker 1: from me. I've been covering a space for a long

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Speaker 1: time and he really got me to rethink a lot

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Speaker 1: of my assumptions over the last several years, particularly as

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Speaker 1: it relates to media and technology converging. Rich, in my mind,

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Speaker 1: was the absolute first analyst on Wall Street to predict

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Speaker 1: the secular decline of some of these traditional media companies

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Speaker 1: due to their inability to pivot to technology such as

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Speaker 1: streaming and the Netflix of the world. And Rich joins us. Now, Rich,

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Speaker 1: thanks so much for joining us here. You've done such

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Speaker 1: a wonderful job for your clients talking about the convergence

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Speaker 1: of technology and traditional media, and now you're bringing a

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Speaker 1: fund to market to capitalize on some further trends in

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Speaker 1: that space. Tell us about it. Well, look, I think

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Speaker 1: the key for us has been you can't understand what's

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Speaker 1: happening in the public markets without understanding what's happening in

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Speaker 1: the early stage startups that are affecting the media ecosystem.

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Speaker 1: So give you an example. You know, look at look

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Speaker 1: at Facebook, right. You know, we were writing about Facebook

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Speaker 1: back in two thousand seven talking about why every media

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Speaker 1: company should be buying it literally obviously none of them did.

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Speaker 1: That was five years before Facebook went public. But look

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Speaker 1: at Facebook today versus you know, even Disney is dwarfed

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Speaker 1: by Facebook, right, and despite all of that, Disney has done,

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Speaker 1: and Disney had to go out and buy Fox to

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Speaker 1: get this, you know, to try to scale up. You know,

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Speaker 1: I think that, you know, sort of there has been

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Speaker 1: sort of a lack of understanding of the legacy media

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Speaker 1: companies of technology and it's why we're really from a

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Speaker 1: research standpoint, why we've devoted so much of our focus

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Speaker 1: to looking into the future and trying to figure out

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Speaker 1: where the media, tech and telecom sectors are going. The

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Speaker 1: natural evolution of that is, well, you see all these companies,

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Speaker 1: you're meeting, all of these companies. We want to invest

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Speaker 1: in some of these companies at the earliest stages, at

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Speaker 1: the seed level in the Series A, we're seeing the

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Speaker 1: man away as part of what we're doing on the research,

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Speaker 1: and now we can actually put capital behind them. And

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Speaker 1: so we've gone out and raised Lightshed Ventures Fund one,

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Speaker 1: which is a seventy five million dollar venture fund that's

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Speaker 1: going to invest on the private side of the TMT

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Speaker 1: ecosystem and really put our core theses that we have

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Speaker 1: for the public companies to work on the private side.

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Speaker 1: And I think both of them will be very, very

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Speaker 1: symbiotic in terms of how we leverage our learnings across

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Speaker 1: the two places. So Facebook has to be a unique

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Speaker 1: case because there are very few products used by you know,

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Speaker 1: well over a billion people. I guess water and air.

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Speaker 1: You can't really own this. Is there something that you

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Speaker 1: think is um nearly as exciting though? Is there anything

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Speaker 1: new that we don't know about that you think maybe

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Speaker 1: could be the next almost kind of close to possibly Facebook?

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Speaker 1: A guy that that's a tough one. I mean, what

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Speaker 1: what could be used by two and a half billion

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Speaker 1: people for thirty forty five mi it's today? I don't know.

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Speaker 1: I mean, look, I met Daniel e eleven years ago. Um,

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Speaker 1: you know, before they had even launched service in the US.

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Speaker 1: This is the founder of Spotify, and you know we've

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Speaker 1: been friends with Daniel ever since. And you know, following

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Speaker 1: from the earliest days the Spotify story and obviously you

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Speaker 1: know that's now grown to be a gigantic company and

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Speaker 1: a public company. Uh. And so we're always trying to

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Speaker 1: figure out where kind of where the puck is going.

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Speaker 1: I mean, right now, I'll tell you big categories that

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Speaker 1: are of interest to us. You know, you look at

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Speaker 1: what's happening in audio, I mean, I was an early

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Speaker 1: investor in one dry that just got acquired by Amazon. Obviously,

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Speaker 1: Spotify has made a lot of acquisitions in the podcast space,

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Speaker 1: So audio broadly defined, I mean, look at clubhouse and

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Speaker 1: Twitter spaces right this specifically, Yeah, Well, I'm just saying

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Speaker 1: like audio is exploding, right, Like we're all realizing that.

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Speaker 1: You know that there's this incredible opportunity in audio to

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Speaker 1: make money. You know, it's it's because you don't have

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Speaker 1: to be staring at the screen. You can do two

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Speaker 1: things at once. You can be walking, you can be

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Speaker 1: at the gym. You know, you don't have to be

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Speaker 1: staring at a screen, and so there's a lot of

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Speaker 1: incremental time spending your day that audio can fill in

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Speaker 1: a lot of value add from audio. And I think

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Speaker 1: whether it's podcasting, whether it's um, you know, kind of

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Speaker 1: live audio, the way we're seeing in clubhouse and Twitter spaces,

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Speaker 1: and I'm sure it sounds like Facebook's already moving into

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Speaker 1: that to try to copy it. I think there's a

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Speaker 1: lot of opportunities in audio that are really interesting. Again,

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Speaker 1: will any of them live up to be Facebook sized businesses.

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Speaker 1: It's way too early to know, but I think there's

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Speaker 1: tremendous value creation in the audio sphere. And then on

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Speaker 1: top of it, I'd say, this whole creator economy is fascinating, right,

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Speaker 1: I mean, we you know, it's funny in your intro

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Speaker 1: you are talking about sort of this collision of media

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Speaker 1: and tech. You know, obviously we we came up with

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Speaker 1: the hashtag probably seven years ago of good luck Bundle,

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Speaker 1: which was sort of the break part of the legacy

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Speaker 1: cable bundle, which you know, seven years ago, if we

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Speaker 1: were on Bloomberg, I think a lot of people listening

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Speaker 1: would have called us a heretic. Now it's consensus thinking

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Speaker 1: that the bundles collapsing in linear TV is going away.

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Speaker 1: But I think the logical next step to the shift

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Speaker 1: from the traditional TV to streaming TV is actually the

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Speaker 1: creator economy and watching individual creators. And I don't just mean,

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Speaker 1: you know, watching them on YouTube in the sense of

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Speaker 1: like you're watching somebody you know, uh, you know, you

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Speaker 1: do comedic stuff. It's watching somebody play a game on Twitch. Right,

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Speaker 1: It's like there's you know, it's not even just playing

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Speaker 1: the game. Obviously gaming is exploded, but watching people play

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Speaker 1: games has become massive, and you look at roadblocks in

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Speaker 1: Minecraft I mean, look roadblocks like we have to leave

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Speaker 1: it there. Rich, well, we'll bring it back just because

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Speaker 1: of the time, but will certainly bring you back and

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Speaker 1: get some more thoughts on this. We appreciate a Rich

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Speaker 1: Greenfield Partner media annalyst that light Shed partners. While the

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Speaker 1: power crisis in Texas continues, continued brutally cold weather through

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Speaker 1: the middle part of the country, extending all the way

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Speaker 1: down into the southern parts of Texas. Unprecedented cold there

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Speaker 1: really impacting the entire grid. Joe Carol Houston, bureau chief

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Speaker 1: for Bloomberg News. He joins us on the phone from Houston. Joe,

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Speaker 1: thanks so much for taking the time. I know it's

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Speaker 1: tough down there. I'd love for you to share with

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Speaker 1: our listeners what it's like on the ground in Houston,

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Speaker 1: for you and your fellow citizens down there. Well, we're

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Speaker 1: above twenty degrees fahrenheit this morning, which is uh, it's

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Speaker 1: probably the best it's been in four or five days.

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Speaker 1: It does feel like we're we're sort of on on

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Speaker 1: the back side of of what was you know, quite

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Speaker 1: a disaster. Power is coming back to in much of

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Speaker 1: the state. Um, the real challenge now is actually believe

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Speaker 1: it or not it's clean water. The water systems are

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Speaker 1: down everywhere because the power was out, and so you've

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Speaker 1: got boil orders, um, pretty much everywhere. So energy isn't uh,

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Speaker 1: I mean clearly it's not your first concern. You want

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Speaker 1: to stay warm, you want to stay healthy. Is it

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Speaker 1: possible for everyone to do that? Or is are those

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Speaker 1: two you know, may issues causing big problems. Still there's

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Speaker 1: still big problems in a in a lot of places.

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Speaker 1: But instead of five million people being without power, it's

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Speaker 1: down to about about five thousand. UM. And like I said, water,

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Speaker 1: water is becoming the big challenge because you can't you

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Speaker 1: can't go to home deepo or lows excuse me, and

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Speaker 1: buy some five gallon jugs anymore. It's all gone and

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Speaker 1: you can't find gasoline to get you to tenny stores anyways.

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Speaker 1: Grocery stores are closed or empty, fast food restaurants are

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Speaker 1: not open. Drudge stores are closed. Um. So even though

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Speaker 1: like I said, we're on the back side of it,

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Speaker 1: it's we're not all in the dark um and cold. Um,

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Speaker 1: there's still there's still quite a ways to go to

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Speaker 1: claw out of this, all right, Joe. We're several days,

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Speaker 1: four or five days into this with a little bit

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Speaker 1: of perspective here, what the heck happened? What went wrong?

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Speaker 1: We see a lot of finger pointing, but I'm not

429
00:24:53,359 --> 00:24:58,320
Speaker 1: really sure I'm getting a full picture of what happened. Yeah,

430
00:24:58,320 --> 00:25:00,640
Speaker 1: it's really, it's really and you're at the blame game

431
00:25:00,720 --> 00:25:04,160
Speaker 1: is already starting at the state and the city levels. Um.

432
00:25:05,160 --> 00:25:07,760
Speaker 1: You know, the weather was just so extreme so quickly

433
00:25:07,800 --> 00:25:11,719
Speaker 1: that the generators failed. They froze over um and so

434
00:25:11,760 --> 00:25:14,040
Speaker 1: there just wasn't enough power being produced it. So it's

435
00:25:14,080 --> 00:25:17,080
Speaker 1: it's unlike any other sort of power out. You know,

436
00:25:17,119 --> 00:25:19,560
Speaker 1: we get hurricanes here every single summer and the power

437
00:25:19,600 --> 00:25:21,720
Speaker 1: goes out because all your lines and your poles get

438
00:25:21,800 --> 00:25:24,040
Speaker 1: knocked down. This time it wasn't e meant, the poles

439
00:25:24,040 --> 00:25:25,960
Speaker 1: and the wires are fine, They didn't freeze and snap.

440
00:25:26,000 --> 00:25:28,360
Speaker 1: What happened was it just wasn't any electricity to push

441
00:25:28,440 --> 00:25:31,000
Speaker 1: through them. And so, uh, you know, the governor has

442
00:25:31,000 --> 00:25:34,240
Speaker 1: already talked about, you know, doing an investigation. We do

443
00:25:34,280 --> 00:25:36,359
Speaker 1: think there'll be some sort of a restructuring of the

444
00:25:36,400 --> 00:25:42,240
Speaker 1: of the grid. What um, medium to long term problems

445
00:25:42,280 --> 00:25:45,200
Speaker 1: do you expect from from this, Joe? I mean, you've

446
00:25:45,240 --> 00:25:48,600
Speaker 1: already talked about the immediate problems people are facing. Is

447
00:25:48,640 --> 00:25:51,359
Speaker 1: there going to be damaged that you're still trying to

448
00:25:51,400 --> 00:25:55,399
Speaker 1: sort through come summer, I think there will be a

449
00:25:55,800 --> 00:25:58,119
Speaker 1: lot of it has to do with people haven't experienced

450
00:25:58,400 --> 00:26:01,000
Speaker 1: burst pipes here before from from the cold, and so

451
00:26:01,119 --> 00:26:04,399
Speaker 1: nobody really knows what they have because it's still too

452
00:26:05,119 --> 00:26:08,119
Speaker 1: you know, too early to check. And uh, I mean,

453
00:26:08,119 --> 00:26:10,520
Speaker 1: the plumbers are going to make a fortune for sure. Um.

454
00:26:10,560 --> 00:26:13,199
Speaker 1: We already have folks coming in from other states, um

455
00:26:13,520 --> 00:26:16,760
Speaker 1: to help with the with the pipework. And you know,

456
00:26:16,760 --> 00:26:18,399
Speaker 1: it's gonna be like any sort of a post storm

457
00:26:18,520 --> 00:26:21,240
Speaker 1: rush where we're suddenly you have a lot of roopers

458
00:26:21,240 --> 00:26:22,959
Speaker 1: coming in from out of state because there's a lot

459
00:26:22,960 --> 00:26:26,240
Speaker 1: of money to make. Joe, what I learned through all

460
00:26:26,280 --> 00:26:29,560
Speaker 1: of this is how unique Texas is in terms of

461
00:26:29,640 --> 00:26:32,800
Speaker 1: its electricity. You guys have your folks in Texas has

462
00:26:32,840 --> 00:26:36,000
Speaker 1: its own separate grids, separate from the Eastern grid and

463
00:26:36,040 --> 00:26:40,159
Speaker 1: the Western grid. Is there a sense of to what

464
00:26:40,280 --> 00:26:44,920
Speaker 1: extent that independence may have contributed to the problem here.

465
00:26:45,640 --> 00:26:47,879
Speaker 1: It's still it's still early in the process, you know,

466
00:26:48,000 --> 00:26:50,520
Speaker 1: as far as anybody investigating, but definitely it's it's an

467
00:26:50,520 --> 00:26:53,560
Speaker 1: island it's a huge island. Uh, and normally it creates

468
00:26:53,560 --> 00:26:56,560
Speaker 1: more than enough power. UM. But certainly if if we

469
00:26:56,560 --> 00:27:00,160
Speaker 1: could have pulled power from Oklahoma or Louisiana, arkans Aw,

470
00:27:00,560 --> 00:27:03,200
Speaker 1: how that might have mitigated some of this. It's a big,

471
00:27:03,240 --> 00:27:08,240
Speaker 1: beautiful island of freedom and barbecued beef. I love Texas

472
00:27:08,359 --> 00:27:11,920
Speaker 1: so much. Um. On the other hand, I'm hearing reports

473
00:27:11,960 --> 00:27:14,680
Speaker 1: that a lot of people are price gouging for things

474
00:27:14,800 --> 00:27:18,280
Speaker 1: as small as bottles of water, um, to things as

475
00:27:18,280 --> 00:27:21,280
Speaker 1: big as actual electricity. Are you Are you hearing any

476
00:27:21,280 --> 00:27:24,119
Speaker 1: report to that as well? Yeah, we're hearing in an

477
00:27:24,119 --> 00:27:27,760
Speaker 1: adultal reports of of folks taking advantage of it. At

478
00:27:27,760 --> 00:27:30,000
Speaker 1: the same time, you have county officials saying, you know

479
00:27:30,119 --> 00:27:32,919
Speaker 1: that won't be tolerated. I'm not sure on the ground

480
00:27:33,280 --> 00:27:36,400
Speaker 1: how much can be done about necessities. If it's something

481
00:27:36,440 --> 00:27:40,760
Speaker 1: you need right away, you're gonna have to pay for it. Joe,

482
00:27:40,760 --> 00:27:43,760
Speaker 1: what's the latest on a sense of timing to getting

483
00:27:43,800 --> 00:27:49,760
Speaker 1: back to some form of normal water, normal, electricity normal, um,

484
00:27:50,040 --> 00:27:52,000
Speaker 1: just a little bit of normalcy in this pandemic world

485
00:27:52,040 --> 00:27:54,600
Speaker 1: for the good folks of Texas. We we have, at

486
00:27:54,640 --> 00:27:57,240
Speaker 1: least in here in South Texas, we have two more

487
00:27:57,400 --> 00:28:01,159
Speaker 1: nights of of below freezing. I think that's where we're

488
00:28:01,160 --> 00:28:03,879
Speaker 1: going to see whether the improvements we've seen in the

489
00:28:03,960 --> 00:28:07,680
Speaker 1: in the generation system can take can hold. And then

490
00:28:08,119 --> 00:28:10,679
Speaker 1: if it holds through those two freezes, and I think

491
00:28:10,840 --> 00:28:12,560
Speaker 1: then I think folks will get a little more confidence

492
00:28:12,560 --> 00:28:15,359
Speaker 1: about UM, you know, climbing out of the nineteenth century.

493
00:28:15,680 --> 00:28:18,240
Speaker 1: What kind of help, emergency help have you gotten in

494
00:28:18,320 --> 00:28:22,320
Speaker 1: their FEMA National Guard? You know, I see some terrifying

495
00:28:22,320 --> 00:28:26,399
Speaker 1: headlines on your bio page. Texas medical facilities running short

496
00:28:26,480 --> 00:28:29,400
Speaker 1: on oxygen supplies. It seems like something the army needs

497
00:28:29,440 --> 00:28:32,440
Speaker 1: to bring in. Yeah, the National the governor sent out

498
00:28:32,440 --> 00:28:34,920
Speaker 1: the National Guard two days two or three days ago,

499
00:28:35,560 --> 00:28:38,960
Speaker 1: mostly too to help evacuate uh folks, uh you know

500
00:28:39,000 --> 00:28:41,520
Speaker 1: who had no heat, to get them to warming centers.

501
00:28:41,560 --> 00:28:43,840
Speaker 1: There was something like a hunter and eighty five shelter

502
00:28:43,920 --> 00:28:46,440
Speaker 1: set up, big shelter set up around the state. UM

503
00:28:46,560 --> 00:28:48,920
Speaker 1: and and you know, last time we checked, those shelters

504
00:28:48,920 --> 00:28:51,160
Speaker 1: were all full. National Guard was still trying to find

505
00:28:51,160 --> 00:28:54,120
Speaker 1: place to put people. UM. FEMA came in with some

506
00:28:54,120 --> 00:28:57,320
Speaker 1: some some generations, you know, some some generators to help

507
00:28:57,360 --> 00:29:01,480
Speaker 1: state agencies do their thing. But that's the extent of

508
00:29:01,480 --> 00:29:03,800
Speaker 1: it right now. Hey, Joe, thanks so much for taking

509
00:29:03,840 --> 00:29:05,680
Speaker 1: some time to join us. I know you must spend

510
00:29:05,720 --> 00:29:07,840
Speaker 1: our tremendous amount of stress here as you deal with

511
00:29:07,880 --> 00:29:09,280
Speaker 1: all of this, So the best to you and your

512
00:29:09,320 --> 00:29:12,800
Speaker 1: family and all the Texans. Here's as you guys deal

513
00:29:12,840 --> 00:29:16,280
Speaker 1: with just another issue on the top of the pandemic.

514
00:29:16,320 --> 00:29:18,360
Speaker 1: As if that weren't enough. Joe Carol, he's a Houston

515
00:29:18,360 --> 00:29:20,920
Speaker 1: bureau chief for Bloomberg News, joining us on the phone

516
00:29:21,600 --> 00:29:24,600
Speaker 1: from Houston and Matt It's just brutally you think, you

517
00:29:24,600 --> 00:29:26,840
Speaker 1: know how much more can can folks take? And then

518
00:29:27,400 --> 00:29:29,640
Speaker 1: all through the Midwest from North Dakota all the way

519
00:29:29,640 --> 00:29:32,880
Speaker 1: down through Texas, just brutal, brutal weather. Uh and some

520
00:29:32,920 --> 00:29:36,400
Speaker 1: of the ramifications from a power perspective and a water perspective. Wow.

521
00:29:36,760 --> 00:29:40,360
Speaker 1: Especially you especially have to worry about those people that

522
00:29:40,680 --> 00:29:44,600
Speaker 1: um have a disability or the elderly whose kids you know,

523
00:29:44,640 --> 00:29:46,880
Speaker 1: maybe working out of state. I mean, there are a

524
00:29:46,920 --> 00:29:50,520
Speaker 1: lot of people, um who must be in dire, dire straits.

525
00:29:50,960 --> 00:29:53,120
Speaker 1: So hopefully things can turn around for those good folks soon.

526
00:29:54,520 --> 00:29:57,640
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

527
00:29:57,680 --> 00:30:00,840
Speaker 1: subscribe and listen to interviews at Apple p Podcasts, or

528
00:30:01,080 --> 00:30:04,800
Speaker 1: whatever podcast platform you prefer. I'm Matt Miller. I'm on

529
00:30:04,840 --> 00:30:08,960
Speaker 1: Twitter at Matt Miller. Yet I'm fall Sweeney. I'm on

530
00:30:08,960 --> 00:30:11,920
Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always

531
00:30:11,960 --> 00:30:13,800
Speaker 1: catch us worldwide at Bloomberg Radio