WEBVTT - Warner Bros Reopens Talks as Paramount Signals Higher Bid

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 2>It is Tuesday, but there's still a lot of mmah

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<v Speaker 2>to talk about Tuesday. Yeah, murder Tuesday. Although this one's

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<v Speaker 2>been like in the works for so long. Now Warner

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<v Speaker 2>Brothers Paramount Netflix looks like Warner Brothers is now open

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<v Speaker 2>to a paramount bid, a little bit more open than

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<v Speaker 2>it was before. It is reopening talks with Paramount as

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<v Speaker 2>Paramount signals a higher bid, but has not actually raised.

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<v Speaker 3>I'm glad you've been You reported it correctly because they

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<v Speaker 3>haven't raised their summit yet.

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<v Speaker 2>They said, you know, we could, so I guess that's

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<v Speaker 2>good enough for them to reopen discussion. Stephen Flynn is

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<v Speaker 2>our senior credit end list on this developing story. So Stephen,

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<v Speaker 2>how are you looking at this development?

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<v Speaker 4>Yeah?

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<v Speaker 5>So you think a couple of weeks ago, on February tenth,

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<v Speaker 5>Paramount actually came out. They reiterated a thirty dollars per

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<v Speaker 5>share cash offer for the entire Warner Brothers Discovery, but

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<v Speaker 5>they did add in a few other things. Number One,

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<v Speaker 5>they said that they would pay the two point eight

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<v Speaker 5>billion dollar termination fee that Warner Brothers would owe Netflix

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<v Speaker 5>for breaking that deal. They'd said that they would help

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<v Speaker 5>with the fifteen billion dollars of bridge loan that Warner

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<v Speaker 5>Brothers has outstanding from a bond tendor.

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<v Speaker 4>Deal that they did mid last year.

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<v Speaker 5>They'd also fully reimburse Warner Brother's Discovery for a potential

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<v Speaker 5>one point five billion dollar fee that Warner Brothers could

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<v Speaker 5>owe certain bond holders if they do not do a

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<v Speaker 5>debt exchange by the end of this year. So this

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<v Speaker 5>is a complicated story that keeps getting more and more

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<v Speaker 5>layers of complexity on top of it.

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<v Speaker 3>Remind us, Steve, if Paramount were to win this deal

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<v Speaker 3>for Warner brother this would be a very highly indebted company.

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<v Speaker 6>You guys don't like that.

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<v Speaker 5>Correct, Yes, So, Warner Brothers Discovery would have about eighty

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<v Speaker 5>five billion dollars of total debt pro form for this deal,

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<v Speaker 5>a combination of Paramount and Warner Brothers. Right, So, Warner

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<v Speaker 5>Brothers has about thirty one billion dollars a debt Paramount

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<v Speaker 5>has about fifteen. This deal would add about thirty nine,

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<v Speaker 5>so you're talking about eighty five billion. If you just

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<v Speaker 5>look at the combined EBITDAT for both Warner Brothers and

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<v Speaker 5>Paramount for twenty twenty six combined, they're about twelve billion dollars,

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<v Speaker 5>you know, just just space math, you're talking seven times levers.

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<v Speaker 4>That's obviously huge.

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<v Speaker 5>But Warner Brothers Paramount expect about six billion dollars of

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<v Speaker 5>cost synergies. So if you give them credit for that,

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<v Speaker 5>that turns it gives you about eighteen billion dollars.

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<v Speaker 4>VIPA DOT still get you credit well over four times

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<v Speaker 4>synergy credit.

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<v Speaker 6>You guys are pretty stinchy.

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<v Speaker 5>Well, yeah, we can give it, but we give you

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<v Speaker 5>a certain amount of time to actually show it.

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<v Speaker 4>Right.

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<v Speaker 5>So, and this is really important because what will the

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<v Speaker 5>rating agencies do and for the fifty four billion dollars

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<v Speaker 5>of debt financing that they have in place to support

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<v Speaker 5>this deal, to what extent will it be ahead of

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<v Speaker 5>the other debt through either guarantees and or security. So

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<v Speaker 5>if you could argue that it is ahead of all

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<v Speaker 5>the other debt and you give them pro former credit

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<v Speaker 5>for the synergies, you're talking about three times leverage through

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<v Speaker 5>that fifty four billion dollars, which could potentially get you

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<v Speaker 5>IG credit ratings. Right, So if we look at Charter

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<v Speaker 5>as a comparable, So Charter for many years had a

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<v Speaker 5>total net leverage target of four to four and a

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<v Speaker 5>half times, but they had.

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<v Speaker 4>A split capital structure.

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<v Speaker 5>The secure bond debt was IG, the unsecured debt was

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<v Speaker 5>high yield, and the secure debt they kept that a

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<v Speaker 5>little bit over three times. And so if you use

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<v Speaker 5>that as a comp and give them credit for the synergies,

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<v Speaker 5>you know, you could say that.

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<v Speaker 4>There's a lot of ifs there. Yes, there is, there's

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<v Speaker 4>a lot of ifs there.

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<v Speaker 6>That Starter's cash a little better and I like that.

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<v Speaker 5>Yeah, but you know, pro form powermount Warner Brothers should

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<v Speaker 5>generate a lot of free cash flow, and they, you know,

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<v Speaker 5>they should.

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<v Speaker 4>I assume they will commit to use all that to

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<v Speaker 4>reduce the debt.

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<v Speaker 5>And typically grating agencies will give the company a few

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<v Speaker 5>years to kind of hit their targets and show the delaveraging.

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<v Speaker 2>So Warner Brothers when it merged with Discovery also took

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<v Speaker 2>on a lot of debt. How does this potential Warner

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<v Speaker 2>Brothers and paramount debt profile look compared to what Warner

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<v Speaker 2>Brothers look like after emerging.

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<v Speaker 5>You know, it's total in thinking about the leverage, it's

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<v Speaker 5>not too different.

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<v Speaker 4>But let's hope that this works better, right, So, because

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<v Speaker 4>it didn't.

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<v Speaker 2>Work so well and Zoslov was kind of just preoccupied

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<v Speaker 2>with bringing down the debt for years.

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<v Speaker 5>Correct, correct, So when they emerged Discovery with Warner Brothers,

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<v Speaker 5>they purchased it from AT and T effectively and it

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<v Speaker 5>had a high leverage and they promised to d lever

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<v Speaker 5>and it did not deliver as quickly as anticipated. So

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<v Speaker 5>then that's when last summer you had the whole announcement

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<v Speaker 5>of the split and they decided to launch a tenor

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<v Speaker 5>off or where they got some new financing in place

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<v Speaker 5>and told the existing bond holders will buy the bonds

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<v Speaker 5>back from you. But you know, you're taking some pretty

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<v Speaker 5>big haircuts to the mount that you're owed, and they

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<v Speaker 5>still had very good participation.

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<v Speaker 4>Stay with us.

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<v Speaker 6>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Coarclay, and Android

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<v Speaker 3>Anthropics PPC talks about extending and contract with the Pentagon

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<v Speaker 3>are being held up over additional protections to the artificial

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<v Speaker 3>intelligence company wants to put on its clawed tool.

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<v Speaker 6>Absolutely no idea what that means.

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<v Speaker 3>Mandeep Seeing does mandep Seeing, Global Tech research head for

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<v Speaker 3>Bloomberg Intelligence, what's going on with our friends at Anthropic

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<v Speaker 3>because I know they do a lot of work with

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<v Speaker 3>the US government.

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<v Speaker 7>Yeah, and look, I think Palenteer is the company that

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<v Speaker 7>really made a name for themselves in the kind of

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<v Speaker 7>work that all these LLM companies are being tasked to

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<v Speaker 7>do for the Department of War. And look, it's going

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<v Speaker 7>beyond analytics now. So what Palenteer did was you could

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<v Speaker 7>look at unstructured data like the GPS coordinates tie intelligence

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<v Speaker 7>in terms of you know, finding about some source or

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<v Speaker 7>some entity, and that was heavily used in a variety

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<v Speaker 7>of use cases. Now, I think these llms are trained

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<v Speaker 7>on we know, fifteen trillion tokens and they can ingest

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<v Speaker 7>large amounts of data and do analytics at a level.

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<v Speaker 4>That you know, we have not seen.

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<v Speaker 7>So in this case, the company Inthropic has talked about

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<v Speaker 7>their AI constitution or in other words, putting guardrails around

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<v Speaker 7>the kind of surveillance activities they want the llms to do.

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<v Speaker 7>And obviously from a government perspective, they want to do

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<v Speaker 7>whatever it takes from a national security perspective. So I

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<v Speaker 7>think that's where there is a discussion going around the

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<v Speaker 7>kind of guardrails that they want to see and the

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<v Speaker 7>level of I guess work that the government wants them

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<v Speaker 7>to do.

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<v Speaker 2>Okay, So the Department of Defense or a Department of

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<v Speaker 2>War as it's now known, this relationship with Anthropic, it's

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<v Speaker 2>not limited to just using anthropics models, is it, Because

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<v Speaker 2>it wants to make sure that it's got kind of

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<v Speaker 2>a wide source of AI large language models to draw from.

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<v Speaker 2>So what is that relationship like with I don't know, chat,

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<v Speaker 2>GPT or Gemini or even Grock.

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<v Speaker 7>Yeah, all of these companies have a contract with the

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<v Speaker 7>Department of War and like for example XAI is Grock

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<v Speaker 7>has a two hundred million dollar contract. So you know,

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<v Speaker 7>the department is using all the possible tools that are available,

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<v Speaker 7>and from that perspective, Enthropic is one of them, but

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<v Speaker 7>no one else like chatchipt hasn't talked about you know,

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<v Speaker 7>guardrails in such a big way as Entthropic has, So

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<v Speaker 7>that's the big distinction. And obviously SpaceX is a defense

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<v Speaker 7>contractor for the Department, and now with Xai merger, I

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<v Speaker 7>think they can do more work around the drone side.

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<v Speaker 7>So at the end of the day, I think you

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<v Speaker 7>have to think of it from a geopolitical standpoint. What

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<v Speaker 7>China is doing, you know, with that infrastructure and similar concepts,

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<v Speaker 7>and what I think the US defense is looking to

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<v Speaker 7>do in terms of surveillance and national security interests. And

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<v Speaker 7>these llms will play a pivotal role because, as I said,

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<v Speaker 7>they can help you find that needle in the haystack

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<v Speaker 7>that the current technology wasn't able to do.

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<v Speaker 6>Who Isntropic? Who are these people?

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<v Speaker 7>Well, they just raised thirty billion dollars in their latest

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<v Speaker 7>funding round sound fundraiser, and they'll most likely go public

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<v Speaker 7>this year. There is a very high likelihood of both

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<v Speaker 7>and Tropic and open Ai going public. And that's why

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<v Speaker 7>you know they're out there in terms of establishing the

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<v Speaker 7>use cases and the utility is not just a coding agent.

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<v Speaker 7>They want to show you know that they are addressing

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<v Speaker 7>a lot more areas in terms of you know, where

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<v Speaker 7>these models are touching and the companies that they are

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<v Speaker 7>interfacing with, So there is a very high chance that

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<v Speaker 7>we'll see IPOs.

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<v Speaker 4>Stay with us.

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<v Speaker 6>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:09:08.880 --> 0:09:11.920
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:09:11.960 --> 0:09:15.280
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:09:15.320 --> 0:09:18.440
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 3>I' let's switch gears to the healthcare space, and to

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<v Speaker 3>do that on a Tuesday morning, we check in with

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<v Speaker 3>Sam Fazelli, director of Research for Global Industries and a

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<v Speaker 3>senior pharmaceuticals analyst for Bloomberg Intelligence.

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<v Speaker 6>He's based over there in London.

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<v Speaker 3>So Sam, I see that Moderna and Merk they're working

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<v Speaker 3>together on a melanoma drug.

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<v Speaker 6>Here, cancer drug. What's the status there?

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<v Speaker 8>Yeah, so Paul, thanks for having me back on. Look,

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<v Speaker 8>they have a trial coming up which is a very

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<v Speaker 8>innovative approach to trying to treat cancer. I e. I'm

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<v Speaker 8>going to take miss a drug that releases your immune

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<v Speaker 8>system and at the same time I'm going to give

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<v Speaker 8>it stuff from your tumors so that you can recognize

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<v Speaker 8>the tumors. So you got vaccine, that's what a vaccine is, right,

0:10:02.360 --> 0:10:05.880
<v Speaker 8>and the immunotherapy drug y true that everybody's used to.

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<v Speaker 8>And they've had some really strong Phase two data that's

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<v Speaker 8>come out. So what we've done here is that we've

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<v Speaker 8>gone and have a look. That's one of the key

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<v Speaker 8>catalysts for twenty twenty six and everyone's waiting for this

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<v Speaker 8>trial to read that as to what are the chances

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<v Speaker 8>of what are the issues that this trial might face?

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<v Speaker 8>You know, that's our job, right We look for problems,

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<v Speaker 8>look for trying to measure up if there's any risk here,

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<v Speaker 8>and we've identified three. One is that the phase two

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<v Speaker 8>data wasn't as easy to interpret because the control army

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<v Speaker 8>in it. That initial data that looked great didn't behave

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<v Speaker 8>as we thought it should have done. The second issue

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<v Speaker 8>is that in the Phase three they're unrolling some healthier patients.

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<v Speaker 8>What is that going to? Can you therefore use the

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<v Speaker 8>phase two to bridge your thoughts to the phase three?

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<v Speaker 8>And on top of that, here's an interesting part. Who

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<v Speaker 8>makes COVID shots well, Fizer, BioNTech, and Moderna. Another study

0:10:58.080 --> 0:11:01.200
<v Speaker 8>showed that if you use COVID shots within one hundred days,

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<v Speaker 8>of one of these immadiotherapy drives in cancer patients, they

0:11:05.640 --> 0:11:09.360
<v Speaker 8>survive longer, they have better survival rates. What if that

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<v Speaker 8>happened in the MODERNA trial the control arm has COVID

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<v Speaker 8>shots in it, and that lifts up the survival if

0:11:16.800 --> 0:11:19.400
<v Speaker 8>that data was correct. So all these things makes us

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<v Speaker 8>a little bit worried about this data coming. And of

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<v Speaker 8>course WADERNA has other issues to deal with, which I'm

0:11:23.840 --> 0:11:25.240
<v Speaker 8>sure you're going to come up to, which is that

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<v Speaker 8>i FDA rejection to accepting their file for the flu vaccine,

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<v Speaker 8>which is blew my mind.

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<v Speaker 3>I have to.

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<v Speaker 2>Say, well, this administration doesn't like vaccines period. So and

0:11:36.720 --> 0:11:39.319
<v Speaker 2>it's been a brutal flu season, right Sam, I mean

0:11:39.360 --> 0:11:42.000
<v Speaker 2>it's nothing kind. I mean I think something like twenty

0:11:42.000 --> 0:11:44.040
<v Speaker 2>two million Americans have fallen ill to the flu.

0:11:44.920 --> 0:11:46.920
<v Speaker 8>Yeah, they have, and to be just called it. The

0:11:47.000 --> 0:11:50.920
<v Speaker 8>issue is now they're deciding what flu vaccine to give

0:11:50.960 --> 0:11:53.800
<v Speaker 8>us in the US and Europe in a couple of

0:11:53.840 --> 0:11:57.720
<v Speaker 8>months of bicht in nine months time, as nonsense. This

0:11:57.880 --> 0:11:59.840
<v Speaker 8>is the flu. These are viruses. They change all the time.

0:12:00.160 --> 0:12:00.680
<v Speaker 2>We've learned that.

0:12:00.840 --> 0:12:04.040
<v Speaker 8>Right, here's a technology that could have potentially enabled you

0:12:04.440 --> 0:12:07.959
<v Speaker 8>M R and A vaccines to react much quicker, nearer

0:12:08.080 --> 0:12:10.920
<v Speaker 8>the time, when you know what training need to target.

0:12:11.840 --> 0:12:14.679
<v Speaker 8>This could have been the approval that the world needs.

0:12:14.720 --> 0:12:16.720
<v Speaker 8>I mean, in this world we need to be able

0:12:16.760 --> 0:12:19.240
<v Speaker 8>to deal with these infectious is that we've learned our lessons,

0:12:19.280 --> 0:12:22.880
<v Speaker 8>haven't we. Unfortunately, the person at the head of the

0:12:24.440 --> 0:12:28.600
<v Speaker 8>division of the of the FDA called Sieber, made a

0:12:28.640 --> 0:12:32.640
<v Speaker 8>decision unilaterally by the look of it, based on what

0:12:32.720 --> 0:12:37.080
<v Speaker 8>people have reported, that he doesn't want to review this

0:12:37.160 --> 0:12:41.440
<v Speaker 8>file having they Mona had all the right things in place,

0:12:41.760 --> 0:12:46.240
<v Speaker 8>they had discussed with the FDA, they had the allowance

0:12:46.280 --> 0:12:48.160
<v Speaker 8>to go ahead, They did the trial that's in line

0:12:48.200 --> 0:12:50.960
<v Speaker 8>with other people's trials. It just doesn't make any sense.

0:12:50.960 --> 0:12:53.960
<v Speaker 8>And I tell you what that really worries me about

0:12:54.160 --> 0:12:56.920
<v Speaker 8>any company interacting with the FDA. How can you know

0:12:57.600 --> 0:12:59.840
<v Speaker 8>that you're not going to get a next week or

0:13:00.000 --> 0:13:02.400
<v Speaker 8>six months, or ten months or twelve months down the road,

0:13:02.720 --> 0:13:05.160
<v Speaker 8>a random rejection despite the discussions you've had.

0:13:06.080 --> 0:13:11.680
<v Speaker 3>So how are these big healthcare companies, pharmaceutical companies, biotech companies,

0:13:12.280 --> 0:13:14.320
<v Speaker 3>how are they dealing with the FDA? Because it seems

0:13:14.320 --> 0:13:16.840
<v Speaker 3>to be a very difficult relationship at the moment.

0:13:18.240 --> 0:13:20.600
<v Speaker 8>Paul only a week before we were talking about the

0:13:20.679 --> 0:13:22.760
<v Speaker 8>FDA showing its teeth when he came out and said,

0:13:22.960 --> 0:13:25.520
<v Speaker 8>HYMN says to stop selling copycat drugs, which it had

0:13:25.600 --> 0:13:28.560
<v Speaker 8>no right to sell. And now we have this this

0:13:28.840 --> 0:13:32.679
<v Speaker 8>uncertainty is a problem, and they're all trying to manage it.

0:13:33.040 --> 0:13:35.679
<v Speaker 8>The larger companies can manage it because they have teams

0:13:35.720 --> 0:13:39.880
<v Speaker 8>of people, et cetera. But it's the biotechs that suffer

0:13:39.960 --> 0:13:43.360
<v Speaker 8>because they have limited amounts of cash on a relative basis,

0:13:43.559 --> 0:13:45.600
<v Speaker 8>and we've had several of these things that have hit

0:13:45.640 --> 0:13:50.160
<v Speaker 8>the block with regards to irregulatory pushback, which you didn't

0:13:50.200 --> 0:13:52.439
<v Speaker 8>expect to have. So it is a problem for the

0:13:52.480 --> 0:13:54.720
<v Speaker 8>biotech sector're more than the pharmacy.

0:13:55.559 --> 0:13:56.160
<v Speaker 4>Stay with us.

0:13:56.360 --> 0:13:57.960
<v Speaker 6>More from Bloomberg Intelligence coming up.

0:14:01.720 --> 0:14:05.400
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:14:05.480 --> 0:14:08.880
<v Speaker 1>weekdays at ten am Eastern on Applecarplay and Android Auto

0:14:08.960 --> 0:14:12.040
<v Speaker 1>with the Bloomberg Business app. Listen on demand wherever you

0:14:12.080 --> 0:14:15.080
<v Speaker 1>get your podcasts, or watch us live on YouTube.

0:14:16.080 --> 0:14:18.440
<v Speaker 3>Let's switch gears here talk about the real estate business

0:14:18.480 --> 0:14:19.720
<v Speaker 3>here in the United States. We can do that with

0:14:19.760 --> 0:14:23.760
<v Speaker 3>Jeff Langboun. He's to read analyst for the US Is

0:14:23.800 --> 0:14:24.880
<v Speaker 3>it all just data.

0:14:24.680 --> 0:14:25.760
<v Speaker 6>Centers today, Jeff?

0:14:25.840 --> 0:14:27.120
<v Speaker 3>Is that all people want to talk to you about

0:14:27.160 --> 0:14:30.800
<v Speaker 3>because it seems like that's the AI play in real estate.

0:14:31.480 --> 0:14:34.280
<v Speaker 9>Well, that's that's one way to play AI from a

0:14:34.320 --> 0:14:37.240
<v Speaker 9>positive perspective, okay, But right now what people are thinking

0:14:37.240 --> 0:14:39.160
<v Speaker 9>about is what the impact is going to be on

0:14:39.560 --> 0:14:43.200
<v Speaker 9>office space If AI makes all of these industries that

0:14:43.760 --> 0:14:47.120
<v Speaker 9>lease office space irrelevant, Okay, what does that mean for

0:14:47.200 --> 0:14:51.840
<v Speaker 9>demand for space? And you know, we saw last week

0:14:52.520 --> 0:14:54.640
<v Speaker 9>that you know, that started with software and then it

0:14:54.680 --> 0:14:57.840
<v Speaker 9>went to you know, industry after industry and ended up

0:14:57.880 --> 0:14:59.880
<v Speaker 9>with the real estate brokers and eventually the office roads

0:15:00.400 --> 0:15:01.160
<v Speaker 9>getting hit hard.

0:15:01.640 --> 0:15:03.640
<v Speaker 2>So so far, this is just kind of fear that's

0:15:03.680 --> 0:15:06.760
<v Speaker 2>wafting across the market. Have we actually seen any evidence

0:15:06.880 --> 0:15:07.600
<v Speaker 2>of this happening.

0:15:07.720 --> 0:15:10.040
<v Speaker 9>Not yet, And in fact, we've seen some of the opposite.

0:15:11.000 --> 0:15:16.040
<v Speaker 9>Leasing velocity has been at the highest level since before

0:15:16.080 --> 0:15:18.640
<v Speaker 9>the pandemic in markets like New York and San Francisco.

0:15:19.360 --> 0:15:22.960
<v Speaker 9>The reats that we follow, names like sl Green Bornado,

0:15:23.040 --> 0:15:27.160
<v Speaker 9>Boston properties are now BXP. These guys are reporting very

0:15:27.160 --> 0:15:29.960
<v Speaker 9>strong leasing volumes. We're starting to see occupancies tick up

0:15:30.000 --> 0:15:33.560
<v Speaker 9>off the bottom in their portfolios, and you know, one

0:15:33.600 --> 0:15:35.640
<v Speaker 9>of the one of the dynamics at play is that

0:15:35.840 --> 0:15:40.240
<v Speaker 9>AI firms are leasing space as they grow, and to

0:15:40.280 --> 0:15:45.280
<v Speaker 9>the extent that companies being impacted by AI start to

0:15:45.320 --> 0:15:47.560
<v Speaker 9>receive a little bit, there's an offset there.

0:15:48.240 --> 0:15:53.200
<v Speaker 3>So your office rate stocks last week sold off on

0:15:53.360 --> 0:15:53.840
<v Speaker 3>this fear.

0:15:54.480 --> 0:15:56.200
<v Speaker 9>Yeah, and it's not a new fear. I mean, it's

0:15:56.600 --> 0:16:00.320
<v Speaker 9>it's been at play for some time now. You know,

0:16:01.240 --> 0:16:04.840
<v Speaker 9>work from home kind of worked its way through and

0:16:04.960 --> 0:16:08.440
<v Speaker 9>everyone kind of got comfortable with where hybrid kind of

0:16:08.440 --> 0:16:10.960
<v Speaker 9>settled in, and then you know, what was the next

0:16:10.960 --> 0:16:12.880
<v Speaker 9>thing to hit office? And it was this And it's

0:16:12.880 --> 0:16:15.280
<v Speaker 9>been you know, it's been out there for probably a

0:16:15.280 --> 0:16:17.560
<v Speaker 9>couple of quarters. Now, what is the impact going to be?

0:16:18.000 --> 0:16:22.040
<v Speaker 9>But last week when when software rolled over, it's just compounded.

0:16:23.840 --> 0:16:27.400
<v Speaker 2>Is this something where because of the evidence that companies

0:16:27.440 --> 0:16:29.320
<v Speaker 2>are still leased in quite a bit of space, that

0:16:29.320 --> 0:16:32.360
<v Speaker 2>we're going to see a just as sharp recovery.

0:16:33.440 --> 0:16:38.480
<v Speaker 9>Well, that's possible, but you know, there's also the risk

0:16:38.600 --> 0:16:43.360
<v Speaker 9>that you know, the equity markets are turbulent and forecasting right,

0:16:43.440 --> 0:16:45.840
<v Speaker 9>and so there is the possibility that there will be

0:16:46.640 --> 0:16:50.200
<v Speaker 9>negative leasing news to come. It's certainly not showing up

0:16:50.200 --> 0:16:53.000
<v Speaker 9>in the numbers now. And we do think and this

0:16:53.120 --> 0:16:55.240
<v Speaker 9>is backed up by some survey work that we just

0:16:55.280 --> 0:16:57.840
<v Speaker 9>did last week of office workers in both New York

0:16:57.840 --> 0:17:00.440
<v Speaker 9>and San Francisco. We actually think that they're there's still

0:17:00.560 --> 0:17:03.960
<v Speaker 9>a period of time to come where firms are actually

0:17:04.080 --> 0:17:08.560
<v Speaker 9>leasing more space, they're expanding their headcount to try and

0:17:08.560 --> 0:17:11.639
<v Speaker 9>figure out how to take advantage of AI and to

0:17:11.680 --> 0:17:16.399
<v Speaker 9>grow their business. And that could actually, you know, I

0:17:16.440 --> 0:17:19.480
<v Speaker 9>don't know about a sharp snapback, but it could you know,

0:17:19.560 --> 0:17:22.200
<v Speaker 9>prolong the positive vibes for some time.

0:17:22.280 --> 0:17:24.199
<v Speaker 6>What's the sector of the remarket that you like the

0:17:24.240 --> 0:17:24.920
<v Speaker 6>most right now?

0:17:25.280 --> 0:17:29.440
<v Speaker 9>Senior housing is I mean, you know, it's it's the

0:17:29.920 --> 0:17:36.000
<v Speaker 9>one aspect where you cannot refute the demand story at all.

0:17:36.400 --> 0:17:39.399
<v Speaker 9>And at the same time, where real estate guys typically

0:17:39.600 --> 0:17:42.720
<v Speaker 9>love to build what to take advantage of those demand stories.

0:17:42.960 --> 0:17:45.760
<v Speaker 9>There's not a there's not much senior housing coming out

0:17:45.760 --> 0:17:48.879
<v Speaker 9>of the ground, so there's a huge supply demand imbalance.

0:17:49.080 --> 0:17:51.640
<v Speaker 2>Okay, but is senior housing more attractive in certain markets

0:17:51.640 --> 0:17:53.800
<v Speaker 2>over other markets? How do you pick between winners and

0:17:53.800 --> 0:17:55.200
<v Speaker 2>losers when it comes to senior housing.

0:17:55.280 --> 0:17:58.720
<v Speaker 9>It's really more about the local operator than it is

0:17:58.760 --> 0:18:01.960
<v Speaker 9>about the specific market. I mean, obviously if you're in

0:18:02.000 --> 0:18:06.000
<v Speaker 9>a place where you know, the economics aren't as strong

0:18:06.040 --> 0:18:10.440
<v Speaker 9>and you don't have this affluent a potential resident base,

0:18:10.520 --> 0:18:13.120
<v Speaker 9>and that's going to you know, potentially impact but.

0:18:13.600 --> 0:18:16.560
<v Speaker 4>Local strong, local operators.

0:18:17.880 --> 0:18:19.680
<v Speaker 9>When there's not a lot of supply coming out of

0:18:19.720 --> 0:18:22.080
<v Speaker 9>the ground, and you know you basically just have an

0:18:22.240 --> 0:18:26.159
<v Speaker 9>aging American population that is going to need housing solutions.

0:18:26.520 --> 0:18:29.440
<v Speaker 9>It's really a play across the board thirty seconds. Why

0:18:29.480 --> 0:18:33.760
<v Speaker 9>isn't there the supply cost of capital is still a

0:18:33.800 --> 0:18:37.240
<v Speaker 9>little bit elevated, and it's tough to get It's tough

0:18:37.240 --> 0:18:40.760
<v Speaker 9>for developers to get capital and and underwrite new deals

0:18:40.760 --> 0:18:43.760
<v Speaker 9>to make sense. Really, man, you want to you want

0:18:43.800 --> 0:18:46.159
<v Speaker 9>to start putting capital to work. Yeah, I'm sure there

0:18:46.160 --> 0:18:48.919
<v Speaker 9>are developers who would who would take your money.

0:18:48.960 --> 0:18:53.679
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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