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Speaker 3: I don't know fixed income market. I feel like I
Speaker 3: can just sit around in my two year US Government
Speaker 3: Treasury bond and get four point two percent.
Speaker 4: I don't need to be here and take credit risk.
Speaker 4: I don't know.
Speaker 3: I don't some people may want to take a little
Speaker 3: bit more risk. Kathy Jones maybe one of them. She's
Speaker 3: chief fixed income strategist for Charles Swabs. She jointsu here
Speaker 3: on our Bloomberg Interactive Brokers studio.
Speaker 4: So Kathy and we sit back here.
Speaker 3: Fixed gum actually has some green on the screen and
Speaker 3: total return in twenty twenty four. You guys actually made
Speaker 3: some money this year. And fixed income I mean twenty
Speaker 3: twenty two brutal. I mean, let's be honest, what do
Speaker 3: we do in twenty twenty five, because there's a lot
Speaker 3: of unknowns out there?
Speaker 4: Kathy, Yeah, I.
Speaker 5: Would say when we were putting together our outlook this
Speaker 5: time around, you know, we try to model out various factors,
Speaker 5: and this is probably one of the hardest years of
Speaker 5: my career to model out because there's so many policies
Speaker 5: that are up in the air that is really hard
Speaker 5: to predict how it's going to come out. But our
Speaker 5: status is really that the rates have very little room
Speaker 5: to go much lower at this stage of the game.
Speaker 5: We should get a couple of more fed rate cuts,
Speaker 5: but not nearly as much as we were expecting before.
Speaker 5: And long rates are kind of well priced right here.
Speaker 5: If you look at the ten year yield, it's probably
Speaker 5: pretty close to fair value. And then you have all
Speaker 5: these uncertainties, which is the word of the year, I
Speaker 5: think around trade, tariffs, immigration, taxes, all these policies. It
Speaker 5: could affect the growth and inflation outlook. That keeps us
Speaker 5: kind of cautious.
Speaker 6: Shawn don And and Nana Wong here at Bloomberg have a
Speaker 6: great piece how kind of tapping into that uncertainty and
Speaker 6: looking at sort of how this might play out when
Speaker 6: it comes to tariffs. When it comes to trade policy,
Speaker 6: they write that the drama has started immediately, tariffs may
Speaker 6: build more gradually. What is your sense of how this
Speaker 6: rolls out? And I know, there's a lot of speculation
Speaker 6: about how inherently inflationary. A lot of this might be,
Speaker 6: how are you thinking through a again, how the policies
Speaker 6: are rolled out, if in fact they are and be
Speaker 6: what that might mean for inflation in this country.
Speaker 5: Yeah, I think there's the one basic question is is
Speaker 5: this a negotiating strategy or is this for real? So
Speaker 5: far it sounds like it's for real. It sounds like
Speaker 5: something the president believes in, and so some sort of
Speaker 5: tariff is likely to be imposed on somebody early on.
Speaker 5: We're assuming China will be first up. We may get
Speaker 5: some negotiations on Mexico, Canada, et cetera. But some level
Speaker 5: of tariff seems likely to us. So we're looking at
Speaker 5: that as a one time shot on inflation. So it
Speaker 5: doesn't necessarily build inflation over time, but it definitely we
Speaker 5: will raise the price of those imported goods. At the
Speaker 5: same time, it tends to slow economic growth, so you
Speaker 5: have this kind of dueling force that comes from tariffs.
Speaker 5: But we are assuming some inflation impact at least in
Speaker 5: the early part of the year, middle part of the year.
Speaker 3: I mean, to me, it seems like from an inflation
Speaker 3: risk situation, the actual immigration policy might be the most impactful,
Speaker 3: it seems, because I just know a couple of restaurant
Speaker 3: owners that I know in town. They're saying, for the
Speaker 3: first time in several years, they're fully employed. Their kitchen,
Speaker 3: they got everybody they need in their kitchen, their dishwashers,
Speaker 3: the bus boys and.
Speaker 4: All that kind of thing.
Speaker 3: And I don't know, you take that away, and that
Speaker 3: could be problematic because I would think that's a relatively
Speaker 3: big part of the nation's labor force at this point.
Speaker 4: How does that work?
Speaker 5: Yeah, if the proposals that have been put on the
Speaker 5: table were implemented, we'd probably lose about eight percent, up
Speaker 5: to eight percent.
Speaker 4: Of the workforce.
Speaker 5: A lot in an aging workforce, with people my age
Speaker 5: and older retiring out. And that's not an announcement, but
Speaker 5: that's going to happen. It is happening of the baby boomers,
Speaker 5: and you need workers to replace them. So far in
Speaker 5: recent years it's been immigrants who have replaced them. So
Speaker 5: you end up with this hole in the labor force
Speaker 5: and you can't grow as quickly. So on the one hand,
Speaker 5: wages would probably have to rise to attract people who
Speaker 5: aren't in the labor force. On the other hand, you
Speaker 5: can't grow as fast because you don't have the workforce
Speaker 5: to produce goods and services to grow faster. So it is,
Speaker 5: I would agree. Longer term, it is a bigger issue,
Speaker 5: probably than tariffs.
Speaker 6: We're all dealing with this uncertainty. You're doing it in
Speaker 6: your outlook, and certainly Fed church Rown Powell is doing
Speaker 6: it too, even if he's so studiously shied away from
Speaker 6: talking about it at the last FED meeting. He's got
Speaker 6: another event this week, moderated sit down on Wednesday, and
Speaker 6: then we're looking ahead to the next FED meeting after that.
Speaker 6: Does he have to address this more? The way that
Speaker 6: he and his colleagues are thinking through all of the uncertainty.
Speaker 6: We're going to get that summary of economic projections at
Speaker 6: the next meeting, how do they factor in all that
Speaker 6: we don't know of what might happen here in the
Speaker 6: months ahead.
Speaker 5: Well, I do think the dot plot and the rest
Speaker 5: of the Summary of Economic protection is going to be
Speaker 5: really interesting this time around, and certainly will change because
Speaker 5: if you think back to September, it was an entirely
Speaker 5: different kind of economic outlook and political outlook, policy outlook.
Speaker 5: So I think it will change I think they're probably
Speaker 5: busily trying to model out some of these things themselves
Speaker 5: and figure out what that means. But I doubt that
Speaker 5: he will talk about that at this stage of the game.
Speaker 5: We'll find out about that later. But my assumption is
Speaker 5: they're going to be much more cautious about rate cuts
Speaker 5: than they had been before because A the economy has
Speaker 5: been more resilient than we thought in September, and B
Speaker 5: we have all these uncertainties on the horizon.
Speaker 3: You're to date twenty twenty four the best performance in
Speaker 3: your world fixed income, US corporate high yield, and US
Speaker 3: leverage loan index. That surprises me a little bit because
Speaker 3: I know there's concerns throughout the year of maybe recession,
Speaker 3: yet the risk your parts of the market were just
Speaker 3: really performing.
Speaker 5: Yeah, so well, we did have a more resilient economy,
Speaker 5: so that helped. And it's the power of the coupon.
Speaker 5: So if you have a coupon of six seven eight percent,
Speaker 5: and even if things sort of hold steady, you're going
Speaker 5: to perform pretty well. And I think this year, when
Speaker 5: you look at the total return of various asset classes,
Speaker 5: a lot of them are in line with the coupon
Speaker 5: the average coupon of the year, and that's kind of
Speaker 5: what we're looking at.
Speaker 6: Can I ask you lastly just about the strength of
Speaker 6: the dollar going forward and what you're thinking about when
Speaker 6: it comes to four x and currency. And we had
Speaker 6: this kind of another announcement over the weekend from the
Speaker 6: President elect about bricks countries trying to rival a dollar.
Speaker 6: Kind of wonder where that came from. I'm sure we'll
Speaker 6: talk about that more when Davian Sasa was here in
Speaker 6: a bit. But what's your sense of sort of what
Speaker 6: dollar strength looks like if these policies, if immigration and tariffs,
Speaker 6: if those policies are put in to effect, what does
Speaker 6: that mean for the US dollar.
Speaker 5: It means it stays strong and goes higher. It'd be
Speaker 5: very difficult for the dollar to push the dollar down
Speaker 5: at this stage of the game. If you have those
Speaker 5: sorts of policies in place and you know the dollar
Speaker 5: is near if you look, I would use the Bloomberg
Speaker 5: Dollar Index. I prefer to the DXY myself because it's
Speaker 5: more broad based. It's nearly out of fifteen year high.
Speaker 5: We're almost back to those spike highs in twenty twenty two,
Speaker 5: and that's driven largely by the outperformance of the economy
Speaker 5: and the wide interest rate differentials.
Speaker 4: I doubt those.
Speaker 5: Things will change in twenty twenty five, and actually tariffs
Speaker 5: will only give it another boost to the upside.
Speaker 3: Kathy, thank you so much for joining us, as always
Speaker 3: appreciated Kathy Jones. She's chief fixed income strategist for Charles Schwab.
Speaker 3: The fixed income folks actually making some money at this year.
Speaker 4: Love that.
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Speaker 3: The appointments from President Electrump continue to come fast and furious.
Speaker 3: Cash Bettel FBI director appoint e is probably one of
Speaker 3: the latest show of the weekend. Henrietta Tres joined to
Speaker 3: She's a manager partner of Vada Partners. Henriette again kind
Speaker 3: of putting some of these appointments selections in context. What
Speaker 3: is President Electrump trying to do here with his cabinet?
Speaker 3: What is his strategy do you think at this point?
Speaker 7: I think it's definitely signaling that he wants to hit
Speaker 7: the ground running as soon as he gets sworn.
Speaker 8: Into office January twentieth.
Speaker 7: The most important things to me are the nomination of
Speaker 7: Kevin Hassett and Jameson Greer. Those are the names that
Speaker 7: were floaded last week for USTR, which is going to
Speaker 7: be most critical for putting the tarifs into place. We
Speaker 7: know we have the Treasury Secretary into play. Some of
Speaker 7: these other names, whether it's Rka Junior or Matt Gates,
Speaker 7: and those guys are sort of fallen by the wayside,
Speaker 7: will be contentious as they go through, as I imagine
Speaker 7: Cash Battel will be as well. But I would say
Speaker 7: keep our eyes on the prize, focus on USTR, and
Speaker 7: see also that they're potentially telegraphing to businesses to prepare
Speaker 7: for these tariffs in advance as opposed to waiting for
Speaker 7: January twentieth and an implementation date of additional tariffs. That's
Speaker 7: maybe the biggest thing for me right now, with the
Speaker 7: early naming of these nominees.
Speaker 6: Let's take each of those in kind. Let's start with
Speaker 6: Kevin Hassett. He was in the first Trump administration. He
Speaker 6: came up with this thing called the Hassett principle. When
Speaker 6: it came to tariffs, sort of focusing on where those
Speaker 6: tariffs might be applied, who might be exempt from them.
Speaker 6: How does his work change if he's now a part
Speaker 6: of this next administration. I mean, I look at just
Speaker 6: through the panoply of people that the President elect has
Speaker 6: picked to be on his economic team, and we've seen
Speaker 6: kind of the fighting or early on before they were
Speaker 6: even named, and one wonders if that's going to move
Speaker 6: over into the cabinet room as well. But sticking with
Speaker 6: Kevin Hassett, what role does he play in shaping the
Speaker 6: direction of Donald Trump's economic policy in this next term.
Speaker 7: Important thing to me right now is that he has
Speaker 7: a relationship with lawmakers on Capitol Hill that exceeds that
Speaker 7: of Scott Bessont or Howard Lutnick. And I think when
Speaker 7: I am worried about next year is obviously the tax
Speaker 7: bill and then the tariffs that are part of that.
Speaker 7: In that Donald Trump has said the tires will pay
Speaker 7: for the four point six trillion dollar extension of the
Speaker 7: existing tax rates.
Speaker 8: So when Bessett, excuse me, when.
Speaker 7: Hassett is up on the hill trying to talk with
Speaker 7: staff and get this tax bill written, one of the
Speaker 7: key components that he's going to be involved in is
Speaker 7: getting them to agree to include tariffs in the tax bill.
Speaker 7: That's a very big deal. That's the only way to
Speaker 7: score it, so that tax legislation can be physically offset
Speaker 7: in the same piece of legislation by the tariffs.
Speaker 8: So I think Hassett will pay.
Speaker 7: Play a really important role there as well as USTR Henrietta.
Speaker 3: What's the role of the United States Senate here in
Speaker 3: confirming some of these nominations, look at some of the
Speaker 3: more contentious ones that may become down.
Speaker 7: You know, they're pretty much already trying to compel the
Speaker 7: Trump administration to give them names that can get through
Speaker 7: and get through quickly. We know that historically you get
Speaker 7: through you know, the Secretary of State, Defense and Treasury
Speaker 7: pretty quickly, you know, just days after the president is
Speaker 7: sworn in. So they're trying to, you know, sort out
Speaker 7: the week from the chaff as early as possible so
Speaker 7: they can keep their eyes on the prize, get started
Speaker 7: on the president's agenda as soon as he gets sworn
Speaker 7: into office. So I think a lot of their back
Speaker 7: room discussion is trying to say, look, thank you for
Speaker 7: giving us these names. Some of these guys cannot get through.
Speaker 7: I think it's underappreciated how slim the Republican margin is
Speaker 7: going into next year. We have a number of Senators
Speaker 7: who are going to be up for reelection or potentially retiring,
Speaker 7: or have come in as freshmen who will be willing
Speaker 7: to challenge the president on these nominations.
Speaker 8: As we've already.
Speaker 6: Seen, we're back playing this game of trying to keep
Speaker 6: track of all of the social media posts from the
Speaker 6: President elect, and one of them from a few weeks
Speaker 6: back had to do with recess appointments and him urging
Speaker 6: senators to allow for them to happen, presumably because that
Speaker 6: would forestall have to go through a lot of the
Speaker 6: confirmation process where perhaps some controversial material might come out
Speaker 6: and things could get gummed up. Where does that stand?
Speaker 6: How resonant was that message from the President elect with
Speaker 6: Republican members of the US Senate.
Speaker 7: The United States senators do not like to be told
Speaker 7: what to do. I can tell you that firsthand, have
Speaker 7: you work there. I think a lot of the enthusiasm
Speaker 7: for the recess appointment idea came from House members who
Speaker 7: are much closely tethered to President Electrump. So you saw
Speaker 7: a lot of support for the idea from House Republicans
Speaker 7: in Trump's orbit, but major pushback from the Senate. They
Speaker 7: don't go on recess specifically for this reason, that and
Speaker 7: the Pocket veto. So I do not expect the Senate
Speaker 7: to voluntarily step aside. And I think even if the
Speaker 7: President tried to force the issue, which is allowable under
Speaker 7: obscure clauses of the Constitution, the House and Senate would
Speaker 7: collaborate to make sure that didn't occur.
Speaker 4: Henrietta, what's the concern, if any, in Washington about some.
Speaker 3: Of the the experience levels for some of these appointments.
Speaker 3: Some people are questioning whether they are appropriately experienced to
Speaker 3: run some of these larger institutions in Washington?
Speaker 4: What's that? Is there a feeling of developing in DC?
Speaker 7: You know, what I hear is a lot of adjucta
Speaker 7: from you know, the Defense departments for example, about some
Speaker 7: of these incoming appointees who have real access to GRIND
Speaker 7: and want to get rid of Navy admirals for example,
Speaker 7: or you know, get rid of major prosecutors at the FBI.
Speaker 7: That conversation, that narrative is obviously very real. I think
Speaker 7: you saw it with the President Biden's decision to pardon
Speaker 7: Hunter Biden.
Speaker 8: You know they're taking this very very seriously.
Speaker 7: The names that Trump is putting out there are the
Speaker 7: names of folks who have advocated mostly on Fox News
Speaker 7: for years now for really aggressive change at the admiral
Speaker 7: level in military ranks, you know, getting rid of any
Speaker 7: of these seasoned army generals who maybe we're too quote
Speaker 7: unquote woke for.
Speaker 8: The Trump administration and the people that they're about to announce.
Speaker 7: So there's a lot of consternation within those specific military groups.
Speaker 7: And I think that's probably the most noticeable thing I've
Speaker 7: picked up in the last couple of weeks.
Speaker 6: You mentioned a few minutes ago Jamison Greer, who was
Speaker 6: a Bob Litthheiser acolyte. He was the chief of staff
Speaker 6: to the US Trade Representative during the first Trump term.
Speaker 6: He's now being appointed or nominated to be the next
Speaker 6: US trade representative. It makes me want to ask you
Speaker 6: about Bob Leittheiser, somebody whose name has been bandied about
Speaker 6: a lot but does not yet have an appointment or
Speaker 6: a nomination in this administration. What do you make of that?
Speaker 6: And I know he was sort of seen as somebody
Speaker 6: who might be a Commerce secretary. Obviously, Howard Lutnik is
Speaker 6: the person who got the nod for that job. In
Speaker 6: this next term, where does he land and what does
Speaker 6: it say to you that he hasn't gotten the spot yet.
Speaker 7: Well, I think there's a lot of conflicting factors here
Speaker 7: and a lot of this is sort of palace injury.
Speaker 7: But Bob Liteheiser was the architect of the Section three
Speaker 7: oh one tariffs against China. He is the one who
Speaker 7: delivered the Phase one trade agreement in February of twenty
Speaker 7: twenty that got the US and China to sort of
Speaker 7: temporarily pause the escalation of the trade war, have China
Speaker 7: commit to buying eighty billion dollars a year over the
Speaker 7: next two years of additional agriculture purchases. And ultimately China
Speaker 7: did not deliver on that. And so one of the
Speaker 7: big differences, and we're seeing it picked up in reporting
Speaker 7: right now, is that Lightheiser was going to go buy
Speaker 7: the book and use the enforcement mechanism in the Phase
Speaker 7: one trade agreement, which would have put tarriffs on in
Speaker 7: the late April May June time horizon, giving businesses a
Speaker 7: period of time to pull forward their purchases, get products
Speaker 7: over from China and get them into the US system,
Speaker 7: and advance of these tariffs going into effect. The fact
Speaker 7: that Bob Lightheiser is not going to be there, in
Speaker 7: which I guess, is where we are right now. I'm
Speaker 7: still sort of quasi optimistic that there might be a
Speaker 7: trades our role, but the fact that he's not there
Speaker 7: suggests to me that maybe Trump thinks that between Lutnik
Speaker 7: and in Jameson Greer and Kevin Hassett, they can sort
Speaker 7: of disregard that Phase one trade agreement imporcement mechanism and
Speaker 7: go right into tariff's. I think that's probably our main
Speaker 7: takeaway this morning that I'll be talking about with clients.
Speaker 8: I don't know why there's.
Speaker 7: An expectation that these tariffs aren't serious, or to the
Speaker 7: alternative narrative that the market's responding to other factors right now,
Speaker 7: but in general, I'm concerned and growing increasingly concerned that
Speaker 7: we won't have somebody who's buy the books like Leithheiser.
Speaker 7: Next year. We'll have folks who are much more eager
Speaker 7: to even get more aggressive than he was in his
Speaker 7: first term, which will put tariffs on earlier.
Speaker 3: Henrietta, just briefly here, what's between now and inauguration day?
Speaker 3: What do we have to look forward to again coming
Speaker 3: out of this Trump administration and waiting The most.
Speaker 7: Important thing is what's happening in the Senate and House
Speaker 7: budget committees. We're going to get a big deficit number
Speaker 7: for their authorization and the reconciliation bill that will tell
Speaker 7: us how big the tax bill is going to be
Speaker 7: next year. That number could come out as early as
Speaker 7: the next couple weeks. The Trump administration is going to
Speaker 7: do its own thing on executive orders and immigration and
Speaker 7: tariffs and all that, But the real meat for the
Speaker 7: investment community is going to come out of the budget committees,
Speaker 7: which is lucky but true, and we should know that
Speaker 7: in the next couple weeks.
Speaker 8: That deficit number is really all I'm waiting for.
Speaker 4: Henrietta, Thank you so much for joining us. Always get
Speaker 4: a little bit smarter when chatting with you.
Speaker 3: Henrietta Triz, Managing partner at Veda Partners, Getting the latest
Speaker 3: coming out of Washington, DC room.
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Speaker 3: Apparently influencers on the Internet have important impacts on what
Speaker 3: people bought. I didn't really know that it recent, Lisa.
Speaker 3: That's the thing out there, as opposed to a thirty
Speaker 3: second in on television or a billboard by the side
Speaker 3: of the road or add in your magazine.
Speaker 4: That's not how it's done.
Speaker 6: The future is here.
Speaker 4: The future is here.
Speaker 3: So that goes to the issue of what's quality information
Speaker 3: out there in the world on the web and what
Speaker 3: is disinformation. Our next guest thinks about this stuff. Lisa Kaplan,
Speaker 3: CEO of a Lithium, and she joins us here in
Speaker 3: a Bloomberg Interactive broker studio. Talk to us about Alithia.
Speaker 3: What do you guys do, who are your clients?
Speaker 4: What's the work that you guys do.
Speaker 9: Thanks so much for having me, Lisa Caplan, Founder and
Speaker 9: CEO of Alethia. We are a technology company that detects
Speaker 9: and mitigates instances of online risk stemming from everything from
Speaker 9: misinformation and disinformation. So thank foreign state adversaries to also
Speaker 9: looking at where are there risks of things like boycott,
Speaker 9: short seller attacks, other risks that can be developed online
Speaker 9: that pose serious business continuity challenges. We predominantly work with
Speaker 9: the Fortune one thousand to be able to help them
Speaker 9: understand how is it that they are being talked about,
Speaker 9: where are these risks emerging, and what is it they
Speaker 9: can actually do to get out in front of these
Speaker 9: different types of challenges.
Speaker 6: Talk a bit more about the kind of disinformation that
Speaker 6: we're seeing. We talk about it a lot in the
Speaker 6: context of the news and journalisms of what people are
Speaker 6: exposed to when it comes to current events. So here
Speaker 6: in this kind of corporate setting or with retail, who's
Speaker 6: perpetrating it, What does it look like? How widespread an
Speaker 6: issue is this for some of the companies with whom
Speaker 6: you work.
Speaker 9: When we talk about miss and disinformation, what we're really
Speaker 9: talking about is the ability to weaponize information online, and
Speaker 9: that's always something that's conducted by an individual or a
Speaker 9: group of individuals in order to achieve their goal. Oftentimes
Speaker 9: we'll see things, especially in the retail sector, things like
Speaker 9: calls for boycotts. Obviously, December is a big month for retail.
Speaker 9: People need to do well ahead of the holidays. And
Speaker 9: one of the things that we're seeing that's actually an
Speaker 9: interesting development, and it actually i would say started really
Speaker 9: in twenty fifteen twenty sixteen, but it's changed how it forms.
Speaker 9: Is the idea of boycotting certain companies because of perceived
Speaker 9: political donations. We are starting to observe, and this again
Speaker 9: in twenty sixteen after President Trump was elected, individuals and
Speaker 9: activists calling to boycott or divest certain companies based on
Speaker 9: whether or not they made donations in support of one
Speaker 9: political candidate or another. We're seeing that again today, and
Speaker 9: we're seeing both influencers on the left and the right
Speaker 9: call for boycott's based on political donations. We are seeing
Speaker 9: what I would call manipulative attacks as well, which are
Speaker 9: when different accounts or different actors are seeking to essentially
Speaker 9: gain curation algorithms trying to make it seem as though
Speaker 9: their perspective is quote unquote newsier because it looks like
Speaker 9: more people are talking about these different trends or these
Speaker 9: different companies are calling for boycott, when in reality it
Speaker 9: may just be a very small group of very vocal
Speaker 9: individuals versus actual customers of these companies.
Speaker 3: We've seen some pretty significant. Companies kind of walk away
Speaker 3: just in the last several months of their DEI diversity,
Speaker 3: equity and inclusion initiatives that maybe they just started, even
Speaker 3: in the last two or three years. I'm surprised that
Speaker 3: companies take political stands one way or the others. Michael
Speaker 3: Jordan famously said back in the day, Republicans buy sneakers too,
Speaker 3: Why do companies even bother doing that stuff in the
Speaker 3: first place.
Speaker 9: So, a lot of DEI programs really started in earnest
Speaker 9: as a recruiting and a retention tool, the ability to
Speaker 9: be able to make sure that you're getting the best
Speaker 9: possible talent you have a diverse customer base you want
Speaker 9: to have, or an employee and a team that actually
Speaker 9: reflects that diversity. What we're seeing now is certain activists
Speaker 9: calling into question whether or not that actually benefits the shareholder.
Speaker 9: And so what we've observed is that there's a small
Speaker 9: group of activists who are creating a lot of content
Speaker 9: and a lot of pressure on companies to essentially get
Speaker 9: rid of their DEI programs. What we've observed is oftentimes
Speaker 9: these attacks, while they start online, what will end up
Speaker 9: happening is your executive will actually get outreach from these
Speaker 9: individuals before they publicly go after you. We always recommend
Speaker 9: that organizations seek to understand first where are your customers,
Speaker 9: your employees, and your shareholders add on this issue, it
Speaker 9: can feel really overwhelming and really alarming when you get
Speaker 9: this type of outreach, but having that data to understand
Speaker 9: what are the equities that you're trying to preserve as
Speaker 9: a private company, both in terms of making sure that
Speaker 9: your team wants to continue to work at your organization.
Speaker 9: If this is something that they care about, you should
Speaker 9: have that in mind and be prepared from an internal
Speaker 9: communications perspective. Second, where are your customers? On this issue,
Speaker 9: we have seen DEIBUS to target companies on everything ranging
Speaker 9: from Pride back in twenty nineteen, twenty twenty to today,
Speaker 9: and we also are seeing, for example, shareholders call into
Speaker 9: question whether or not DEI programs are effective. Companies that
Speaker 9: have data and data ready to share are often the
Speaker 9: best position to deal with these types of risks and
Speaker 9: navigate through the new media ecosystem.
Speaker 6: I would like to ask you just about whose job
Speaker 6: it is to police disinformation in the corporate side of things.
Speaker 6: And I've been reading this book about Twitter's recent history
Speaker 6: by Ryan mc Andckay Conger, and something they resurfaced was
Speaker 6: that moment back in twenty twenty two, I think when
Speaker 6: somebody created a fake Eli Lilly account on Twitter now
Speaker 6: x and said insulin was going to be free, and
Speaker 6: we saw all of that, all the insanity that follow
Speaker 6: that bad day for the same bad day if you're right, yeah,
Speaker 6: but you had Twitter like really doing very little to
Speaker 6: stop that from happening. And so I guess what I'm
Speaker 6: curious about is you're like, how this is policed, and
Speaker 6: how it's policed in a world where there aren't really
Speaker 6: on a lot of these sites the mechanisms in place
Speaker 6: to kind of sort through what's legitimate and what's not.
Speaker 9: So our philosophy and why we exist as a company
Speaker 9: is because as a democracy, we're not comfortable with the
Speaker 9: idea that governments would police social media data. What people
Speaker 9: are saying online that's protected speech. We also understand that
Speaker 9: for social media platforms, to your point, this is a
Speaker 9: cost center, and so the necessary resource investment to protect
Speaker 9: the fortune one thousand isn't going to be happening from
Speaker 9: internal cost centers at these platforms. That's just not their model.
Speaker 9: That means that the cost is actually on these private
Speaker 9: companies to be able to identify these risks and get
Speaker 9: out in front of them prior to them becoming a
Speaker 9: Level ten crisis. A couple examples of this is when
Speaker 9: we see not just that Eli Lelly example, which I
Speaker 9: think is a great example of what can happen when
Speaker 9: an individual pulls a stunt off. Basically it comes and
Speaker 9: goes in about twenty four hours, and the biggest driver
Speaker 9: is actually the news cycle talking about it. What we
Speaker 9: look for is more, where is that slow drip narrative
Speaker 9: that comes data point by data point that causes people
Speaker 9: to believe something or maybe take an action or have
Speaker 9: a perception that may not be true. It's a lot
Speaker 9: easier for companies to get out in front of that
Speaker 9: if they can catch the narrative when it first starts
Speaker 9: versus wait for it to be trending on one of
Speaker 9: these mainstream platforms.
Speaker 4: I mean, I can't imagine.
Speaker 3: It's just with the speed of social media and the
Speaker 3: velocity that these things take off, I don't know. I mean,
Speaker 3: if you're a board memory, I don't know how you
Speaker 3: sleep and they think about some of these risks there, Lisa.
Speaker 4: Kaplin, thank you so much for joining us.
Speaker 3: Lisa Kaplin, she's the see of a Lithia, talking about
Speaker 3: disinformation and how it impacts many parts of our lives
Speaker 3: and including the economics of a lot of companies out
Speaker 3: there as well.
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 2: starting at seven am Eastern on applecar Play and Android
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Speaker 2: Bloomberg terminal.
Speaker 3: All right, folks, your deadly look at the front pages
Speaker 3: around the world. Police mateo newspapers.
Speaker 4: What do you got for us?
Speaker 1: All right, so did either of you indulge in the
Speaker 1: Black Friday shopping?
Speaker 10: Did you go in store? Online?
Speaker 6: Nothing like those stores? Nothing, nothing, absolutely clear.
Speaker 10: Okay, See I'm the loser. I woke up at.
Speaker 4: The tradition in the morning. You know you did not,
Speaker 4: And I went.
Speaker 1: To the Jersey Shore Outlets, Yes you did, which opened
Speaker 1: at six and I got there like six forty five
Speaker 1: parking lot was.
Speaker 4: Almost already no kidding.
Speaker 10: Okay, wow, But here's the thing.
Speaker 1: This new data that's out It shows that a lot
Speaker 1: of those bargain hungry, you know, American shoppers they didn't
Speaker 1: do that. They skipped out of the instore shopping. They
Speaker 1: went online on Black Friday. This is from mash of cards.
Speaker 1: Sales brick and mortar stores grew just seven ten percent
Speaker 1: year over year, that's according to those preliminary estimates, but
Speaker 1: e commerce sales increased by fourteen.
Speaker 10: Point six percent online. So you see the difference there.
Speaker 1: I mean this Adobe tally also would showed that Americans
Speaker 1: spent about ten point eight billion online on Friday. That's
Speaker 1: ten percent more than a year earlier. And then today's
Speaker 1: Cyber Monday.
Speaker 6: So see this is I have a problem with this
Speaker 6: because you're right, like Friday has now become Black Friday's
Speaker 6: become an online thing, and then we have Cyber Monday
Speaker 6: as well. I don't understand the utility of the Cyber
Speaker 6: Monday on.
Speaker 3: The head, but there are still people like likek Smith
Speaker 3: Tato that get up and go to the stores. Now
Speaker 3: I have to ask, did you go by yourself or
Speaker 3: did anybody company?
Speaker 10: You know, the whole family came.
Speaker 4: No way.
Speaker 10: And here's the thing.
Speaker 4: Not the soldiers. He did not get out, No he
Speaker 4: did not.
Speaker 10: Yes, my son was sleeping. But here's the thing. You
Speaker 10: go and it's like you look online and it's.
Speaker 1: The same exact deal, like the forty percent off you
Speaker 1: go in the store, you get the forty percent online
Speaker 1: the same exact time, but you do save on the
Speaker 1: shipping if you go in stories just want one thing,
Speaker 1: you know, So if you get.
Speaker 4: A couple, So did you get stuff?
Speaker 1: We did, Yeah, we and they bonded up and oh
Speaker 1: my gosh, we're delirious and the rest of the day
Speaker 1: was shot. But it's exactly okay, but more people actually
Speaker 1: are doing it. But you're right, you're seeing this like
Speaker 1: blending from like Black Friday, which started like a week before,
Speaker 1: you know, because people started putting out their sales. So anyway,
Speaker 1: which brings me to my next story is about the return. Okay,
Speaker 1: so when people start returning, if you notice there's a
Speaker 1: lot of fine print now, like a lot of the
Speaker 1: retailers are cracking down on how consumers send their items back,
Speaker 1: but a lot of shoppers are saying, you know what,
Speaker 1: we're not going to deal with it. Wall Street Journal,
Speaker 1: they say shoppers are pushing back. Some have stopped buying
Speaker 1: from retailers that charge for those returns. It doesn't seem
Speaker 1: to be affecting months because we just heard those master
Speaker 1: card figures.
Speaker 5: Right.
Speaker 10: But the debate is, here's the reason.
Speaker 1: Retailers saying they need stricter policies because returns and return
Speaker 1: fraud is starting to eat into their profit interest. So
Speaker 1: that's why they need to do that. But the shoppers
Speaker 1: are saying, you know what, the sizing is inconsistent, so
Speaker 1: I have to order three sizes to try them on
Speaker 1: and then return the other two you know afterwards.
Speaker 4: It the return stuff though.
Speaker 10: I mean with Amazon, it's easy.
Speaker 1: You just kind of do it and you print out
Speaker 1: the receipt, you take it to the UPS store. You
Speaker 1: don't even have to package it, and they just send.
Speaker 10: It off for you.
Speaker 4: Right, that's Amazon deal.
Speaker 10: But that's an Amazon.
Speaker 1: But a lot of the store, let's say, like a
Speaker 1: Sex withth Avenue or like a North Sum or a Macy's,
Speaker 1: they're starting to change the way they do it.
Speaker 10: Yeah, it's costing them money. And with the fraud.
Speaker 1: I didn't even realize that the frauds in returns.
Speaker 3: If you're buying all line you're particularly clothes, yeah, you're
Speaker 3: taking a risk there.
Speaker 4: But people do it, right, People do it.
Speaker 1: People do it, especially if you like they said the sizing.
Speaker 1: You don't know what size, so you're like, well, I'll
Speaker 1: just order a small ani medium and then I'll return whatever,
Speaker 1: just to it.
Speaker 4: Okay, Good to know, Good to know.
Speaker 10: Okay.
Speaker 1: This next one is an Indian steelmaker planning to launch
Speaker 1: its own EV brand, So it's JSW. They're telling the
Speaker 1: Financial Times that they want to manufacture the EV's in India,
Speaker 1: sell them in India. But it's it's a growing market.
Speaker 1: You have EV makers in India like Tata Motors, Mahindra,
Speaker 1: Ola Electric, so there's a growing market for it. Apparently
Speaker 1: this is according to SMP Global Mobility. Electric car sales
Speaker 1: in India total only about one hundred thousand years per year.
Speaker 1: That's about two percent of the passenger car market. But
Speaker 1: sales they're starting to take off with more affluent Indian customers.
Speaker 1: So that's how that change is starting. So they're saying
Speaker 1: they want to get in on the action.
Speaker 10: So that's JSW. They're a steel maker.
Speaker 4: Why do you want to get into the auto business?
Speaker 4: I have no idea.
Speaker 6: Well, it's a huge market, right, I mean that's ther Felmaker.
Speaker 3: I mean, I don't know, I mean I think I mean,
Speaker 3: you look at all these auto companies. I don't know
Speaker 3: how an investors don't know how to evaluate this transition
Speaker 3: from you know, internal combustion to EV. And if you're
Speaker 3: a General Motors, Ford, Volkswagen and investor, I don't think
Speaker 3: you have a clear view. That's why they're trading where
Speaker 3: they're trading, because I think the real question globally is
Speaker 3: what's the demand for.
Speaker 6: These things and how long is that transition going to take?
Speaker 9: Right?
Speaker 6: I mean, there's a sense that it's going to happen
Speaker 6: really quickly, and we've seen all these European automakers now
Speaker 6: saying hold.
Speaker 4: Up, we're not going to do it. We're not going
Speaker 4: to do it cleanly.
Speaker 6: We're going to keep making these internal combustion engines for
Speaker 6: a while.
Speaker 4: I'm not going to pay a premium for an EV.
Speaker 3: So when I was searching for the Beamer, the guys
Speaker 3: that I can put you in a EV, but it's
Speaker 3: a thirty percent premium.
Speaker 4: Like Y zero yea. I can care less about that
Speaker 4: stuff than you.
Speaker 6: Is your Vesper electric?
Speaker 2: No?
Speaker 4: No, the Vespa is fifty ccs pure raw in exactly
Speaker 4: so anyway, that's it. I was cruising on the best.
Speaker 4: I'm sure all right, what else we.
Speaker 10: Got last one.
Speaker 1: So Lebron James, you know, famous Basketball Paper, is doing great,
Speaker 1: but his media company actually lost twenty eight million dollars
Speaker 1: in twenty twenty three.
Speaker 10: This was in Bloomberg's screen Time newsletter. Check it out.
Speaker 1: This is according to Yeah, so Lucashaw. They got their
Speaker 1: hands on some documents that showed that. But it shows
Speaker 1: Hollywood production companies they've grown over the past decade to
Speaker 1: serve the growing demands of streaming services.
Speaker 10: But now you see as Paul always.
Speaker 1: Talks about streaming services cutting back in production, looking closely
Speaker 1: at their budgets. So that's why you're starting to see
Speaker 1: this change. But apparently he lost out pretty big in
Speaker 1: twenty twenty three. I mean, he's doing quite well for himself.
Speaker 1: I don't want to put that out there too, but
Speaker 1: you see film TV businesses started by celebrities, they're struggling
Speaker 1: to start to make a profit right now because I.
Speaker 4: Don't know why, they just don't do what they used
Speaker 4: to do.
Speaker 3: Just go buy a restaurant if you want to throw
Speaker 3: your money away, or dealers, car dealership, card dealership. I mean,
Speaker 3: any manager that allows these athletes or film sticks to
Speaker 3: do anything but stocks and bonds, and maybe I'll give
Speaker 3: you five percent of your money to be stupid with
Speaker 3: and go buy a restaurant or go, you know, start
Speaker 3: a media company where Disney and Warner Brothers Discovery struggle
Speaker 3: to make money.
Speaker 4: I just don't get it.
Speaker 6: I love this line from Lucas. Producing good movies and
Speaker 6: TV shows is hard, and having a celebrity producer does
Speaker 6: not guarantee success.
Speaker 3: Good cave exactly well, I mean here, I mean, I
Speaker 3: don't know if how much you guys pay attention to
Speaker 3: has been the credits, look at the producers and executive
Speaker 3: prowser executive producer is I'm going to give you this
Speaker 3: executive producer title. Yeah, no economics, but you can then
Speaker 3: say you're a producer, all right. That is newspapers from
Speaker 3: Lisa Matteo, always a coveted spot in the lineup here.
Speaker 2: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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