Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well,
Speaker 1: markets in general are pretty calm, at least if you
Speaker 1: look at the United States. Look elsewhere, not so much.
Speaker 1: In particular, I'm talking about Argentina, which today asked the
Speaker 1: i m F the International Monetary Funds to expedite and
Speaker 1: already agreed upon credit line the payments of fifty billion
Speaker 1: dollars still out there. Joining us now to talk about
Speaker 1: emerging markets and specifically some of the troubled child children
Speaker 1: within them. Damien Sassaur, chief Merging markets credit strategist here
Speaker 1: at Bloomberg Intelligence. Damien, what do you make of Argentina
Speaker 1: at this point, basically asking for help with their currency
Speaker 1: falling to a record low versus the dollar. Yeah, well,
Speaker 1: I mean Argentina has been trading heavy for a very
Speaker 1: long time now, I mean technicals have improved, but again
Speaker 1: I'm not convinced it's all clean positioning here. I mean
Speaker 1: it's fundamentals remain very very weak, declining GDP. I mean,
Speaker 1: it's going to enter its second recession in as many
Speaker 1: years this year. Rising interest rates, I mean interest rates
Speaker 1: have literally doubled. I mean, I think dollar interest rates
Speaker 1: in Argentina now are are hovering around ten percent. Uh,
Speaker 1: you're in the high if you look at local currency rates.
Speaker 1: So yeah, No, I mean rising inflation week externals, there's
Speaker 1: a lot not to like about Argentina. But interestingly enough,
Speaker 1: the past forty eight hours, I've received some interesting calls
Speaker 1: from investors, particularly advent riven investors, who are actually looking
Speaker 1: at current levels and perhaps looking to get involved, which
Speaker 1: may be a sign that you know, things might change. Uh.
Speaker 1: The reason I is because wait a minute, when when
Speaker 1: when this election took place? When when we got the
Speaker 1: new president mackri I remember distinctly people beating the drums
Speaker 1: saying this is different. You've got to get in. Argentina
Speaker 1: is going to be the best place to invest money.
Speaker 1: Oh come on, well, I mean you're right, Pim. I mean, look,
Speaker 1: I mean if you look at going into March of
Speaker 1: this year, when Iam sort of melted down. It was
Speaker 1: the largest overweight in emerging markets according to JP Morgan's
Speaker 1: Positioning survey. Right, so people were definitely long and wrong.
Speaker 1: And I think you're aut. You make a very good point.
Speaker 1: You know, people who held on on the way down
Speaker 1: in the last few months, it's gonna be very difficult
Speaker 1: for them to reload at current levels. Well, I'm just
Speaker 1: talking about credibility. Well, yeah, right, what credibility do they
Speaker 1: have when they are dealing with the second recession in
Speaker 1: two years and having defaulted what five times in the
Speaker 1: past century. I would I would argue the other thing.
Speaker 1: I would say, they've they've made quite a bit of
Speaker 1: progress in structural reforms. They've liberalized their effects rate, they've
Speaker 1: reduced export duties, they've cut fuel subsidies. I mean, they've
Speaker 1: re established times with global capital markets after being in
Speaker 1: the black for ten years. But um, but you're absolutely right.
Speaker 1: You know they want fifty billion dollars from the International
Speaker 1: Monetary Fund. Well, I mean, look, the government. If I think,
Speaker 1: I think the government would be better served if it
Speaker 1: put disinflation efforts aside, engineered a controlled real depreciation of
Speaker 1: the PAS. So with the attention of again, boosting external competitiveness,
Speaker 1: attracting FDI and and reducing the fiscal deficit. And I
Speaker 1: think that fifty billion I m F line goes a
Speaker 1: long way to giving them the support they need and
Speaker 1: the credibility they need to put through, you know, to
Speaker 1: to actually do that. Unlike Turkey, right, I mean, Turkey,
Speaker 1: you know, has shown the I m F. They've shunned
Speaker 1: their Western investors. You know, Argentina has taken a very
Speaker 1: different tack. And yet Argentina five year CDs is trading
Speaker 1: above six hundred basis points in Turkeys only at what
Speaker 1: four hundred and eighty? So where's the disconnect their? Right?
Speaker 1: I mean, I would make the case that perhaps Argentina
Speaker 1: looks relatively attractive at current levels. Interesting I think that
Speaker 1: right now I want to add not a little bit
Speaker 1: Argentina as an adysentcratic story for sure. Uh Turkey as well,
Speaker 1: both of them seeing distress. But at a time when
Speaker 1: a number of pretty big asset managers have gotten burned
Speaker 1: very badly based on Argentinean and Turkish sell offs of assets,
Speaker 1: you have to wonder is this going to lead to
Speaker 1: a broader risk off in e m just because burned once,
Speaker 1: burned twice? How many times can these people get burned
Speaker 1: before they just say, forget it, I'm going to cast
Speaker 1: You know, I don't want to play this time in
Speaker 1: a different story with Argentina because you know, we've lived
Speaker 1: through Argentina. I mean, we um guys that live through
Speaker 1: Argentina for the better part of our careers. But you know,
Speaker 1: while the pacers plunged and rates have searched, um. You know,
Speaker 1: thus far, Argentine's remain quite confident in their banking system.
Speaker 1: They have not withdrawn deposits as they have in Latin
Speaker 1: in previous crisis. Is like we're seeing in other places
Speaker 1: like Turkey and and and look, I mean cross border
Speaker 1: market funding and liquid assets remain ample in both dollars
Speaker 1: and pacias in Argentina, So the banking system remains, you know,
Speaker 1: relatively healthy. So you don't contagion either within Argentina or
Speaker 1: more broadly in emerging markets. I think I think Turkey
Speaker 1: and Argentina have Look, they're a very small part of
Speaker 1: the emerging markets, you know, and so far, yeah, we've
Speaker 1: been relatively I guess fortunate that we haven't seen contagion.
Speaker 1: It's not China it's not you know, it's not even
Speaker 1: brazila Russia. Um. But you know, I I take your point.
Speaker 1: You know, as things, you know, get worse and look,
Speaker 1: performances and perception is reality. So long as performance remains
Speaker 1: you know, low and poor. Um. You know, you know
Speaker 1: this will eventually slip into the real economy. You know.
Speaker 1: The longer that you know these economies failed to perform,
Speaker 1: the longer that they you know, they are mired in
Speaker 1: this weakness, you know, things are going to get more
Speaker 1: and more challenging and and so you're right from that perspective,
Speaker 1: but we're not quite there yet. UM. I still think
Speaker 1: that you know, Argentina, you know, can can manage their
Speaker 1: way out of this. Turkey is a different story. But Argentina,
Speaker 1: you know, I I think at current levels, it's starting
Speaker 1: to look a little bit of attractive. I sense a
Speaker 1: trip to Buenos airis in the future for Damian Sasaur.
Speaker 1: You never know, Damian Sassaura, thank you very much, Chief
Speaker 1: Emerging markets credit strategist for Bloomberg Intelligence, giving us the
Speaker 1: lowdown on investing in emerging markets. Canada's Foreign Affairs and
Speaker 1: Minister Christopher Freelan is meeting in Washington, d C with
Speaker 1: her US counterparts. This comes a day after US President
Speaker 1: Donald Trump announced a deal with Mexico on trade, and
Speaker 1: of course Canada was absent from those US Mexican discussions.
Speaker 1: Here to tell us more about this three way complicated
Speaker 1: trade agreement is Antonio Ortiz Mayna. He is a senior
Speaker 1: vice president for Albright stone Bridge Group a s G. Formerly,
Speaker 1: he served for eight years as head of Economics Affairs
Speaker 1: at the Embassy of Mexico in the United States, where
Speaker 1: he advised US companies with a presence in Mexico as
Speaker 1: well as Mexican companies doing business in the United States. Ambassador,
Speaker 1: thank you very much for being with us. Can you
Speaker 1: tell us what is so terrible about if indeed that
Speaker 1: is so Canada not being part of the negotiations between
Speaker 1: the United States and Mexico, And then why would Mexico
Speaker 1: have those negotiations solely with the US if indeed having
Speaker 1: Canada there was so important. Yes, thank you for the
Speaker 1: invitation and glad to share my views on that. First
Speaker 1: of all, I would say that even though Canada was
Speaker 1: not at the table over the past two months, let's say,
Speaker 1: after the G seven summit in Canada, where there was
Speaker 1: a fallout between Canada and the US. Canada was in
Speaker 1: a way of participating in the negotiations above all, with
Speaker 1: great consultations between Mexico and Canada, and Mexico was dealing
Speaker 1: with the US on some pretty contentious issues, I would say,
Speaker 1: chief among them the automobile rules of origin, and was
Speaker 1: that was settled. It was pretty easy for Canada to
Speaker 1: buy into that and then to deal with issues that
Speaker 1: are more three way challenges rather than bilateral issues. So
Speaker 1: that's where we stand. But the clock is sticking from
Speaker 1: now until of Friday, and I don't know what will happen.
Speaker 1: Has a lot changed really between the US and Mexico.
Speaker 1: I mean, is this deal likely to stick and is
Speaker 1: it really that different? Um, well, there there are open questions.
Speaker 1: First of all, will it be bilateral or trilateral? We
Speaker 1: will now buy Friday. And this is not trivial because
Speaker 1: under U s Trade Promotion Authority, the Congress delegated authority
Speaker 1: to US negotiators to update NAFTA, to modernize NAFTA, not
Speaker 1: to do a bilateral deal with Mexico or even another
Speaker 1: bilateral deal with Canada. Some so, some members of the
Speaker 1: House and Senate are questioning whether uh USDR has authority
Speaker 1: to submit a bilateral deal with Mexico. That's on a
Speaker 1: sort of a legal technical perspective, but even more importantly,
Speaker 1: from a substantial perspective, I don't think it would be
Speaker 1: a good idea to have a bilateral agreement. I think
Speaker 1: a trilateral agreement is much more significant from an economic perspective.
Speaker 1: So why did you believe Mexico entered into this bilateral negotiation.
Speaker 1: I think that Mexico wanted to accelerate negotiations as as
Speaker 1: much as possible to see if they could sign the
Speaker 1: agreement with the current government that will end on December one,
Speaker 1: and to do that they had to advance on a
Speaker 1: number of bilater role issues with the US, and as
Speaker 1: I mentioned, the main one was over all the rules
Speaker 1: of origin. So once they got that of out of
Speaker 1: the way, it was easier to accelerate negotiations. Our guest
Speaker 1: is Dr Antonio ortiz Amina. He is the senior vice
Speaker 1: president at albright Stone Bridge Group, previously serving as the
Speaker 1: head of Economic Affairs at the Embassy of Mexico. And
Speaker 1: nothing surprising their Doctor Ortismina from the Foreign Minister of
Speaker 1: Canada that they're having good negotiations. But what could have
Speaker 1: changed in such a brief amount of time. Is it
Speaker 1: that Canada realizes that the clock is taking in at
Speaker 1: the United States and Mexico or will go their own
Speaker 1: way with or without Canada. Well, a couple of things
Speaker 1: have happened. First the agreement on autos, which is critically
Speaker 1: important for Canada. Secondly, UH an important agreement on the
Speaker 1: sunset class. So the sunset class was an absolute deal
Speaker 1: breaker UH for both Mexico Canada. So with those two
Speaker 1: big items out of the way, I think Canada can
Speaker 1: now deal with some bilateral issues, above all supply management
Speaker 1: in their dairy industry, and then to deal with something
Speaker 1: that I think will be very complicated, and that's NAPTER
Speaker 1: chapter nineteen, which deals with unfair trade practices, dumping and subsidies.
Speaker 1: It is my understanding that Mexico on the US reached
Speaker 1: an agreement to do away with NAPTA chapter nineteen, and
Speaker 1: chapter nineteen is very important for Canada, but substantively over
Speaker 1: the endless software lumber dispute and politically so they will
Speaker 1: have to see how they can resolve that. So one
Speaker 1: thing that I'm struck by here is that President Trump
Speaker 1: is negotiating directly with Canada and with Mexico. But Congress
Speaker 1: isn't necessarily on board. So how much cloud does President
Speaker 1: Trump have in these renegotiations when Congress ultimately has to
Speaker 1: sign off and it's unclear how connected they are to
Speaker 1: to this whole process. Absolutely, they are different negotiations going
Speaker 1: on right now. So it's US Canada trade negotiations finalizing
Speaker 1: Mexico U S trade negotiations, and that trilateral negotiations, and then, uh,
Speaker 1: the executive will have to make sure that Congress accepts
Speaker 1: whatever they submit. And it is not a foregone conclusion
Speaker 1: that the Congress will accept a bilateral deal because the
Speaker 1: authority was granted to do a trilateral deal. Right. Well, yeah,
Speaker 1: but those are the legal issues that you that you
Speaker 1: mentioned previously. Now you mentioned Mexico's domestic political situation wanting
Speaker 1: to get a deal done before the new administration of
Speaker 1: Loprez Lopez Oprador takes office. Canada is also facing an election,
Speaker 1: and then we have the US mid term elections in November.
Speaker 1: Do you believe that politics is currently driving the negotiations. Yes,
Speaker 1: I do believe that politics are are to great extin
Speaker 1: driving the negotiation. And my view is that it might
Speaker 1: be more US politics rather than Mexican politics. And let
Speaker 1: me explain why. So, the upcoming Lopezo ad Or administration
Speaker 1: wants to get the NAFTA issue out of the way
Speaker 1: to focus on other domestic politics issues and additional very
Speaker 1: complicated by lateral issues with the US, including undocumented migration,
Speaker 1: cooperation and security, et cetera. So it's more of an
Speaker 1: idea that they want to close this chapter and move
Speaker 1: on to other things, rather than there being a risk
Speaker 1: that the next Mexican Congress would not ratify a new
Speaker 1: NAFTA agreement. So that is my view in terms of
Speaker 1: the Mexican politics. The US politics, I think are more
Speaker 1: complicated because the calculation by us DR has to do
Speaker 1: with the current Congress and what could be ratified by
Speaker 1: the current House and Senate. If they wait until they have,
Speaker 1: you know, the a new Senate next year, then the
Speaker 1: political calculus might change and what could have been acceptable
Speaker 1: for you know, the current Congress in terms of the
Speaker 1: Mexican concessions might not be acceptable later on. So I
Speaker 1: do have say more questions about the effect of US
Speaker 1: domestic politics on the negotiations and ratification than I do
Speaker 1: about Mexican politics. Even though there will be a change
Speaker 1: in government in Mexico. This is really compellingentis it suggests
Speaker 1: to me that everyone's going to try to expedite this
Speaker 1: through the process very quickly in order to avoid any
Speaker 1: kind of political turmoil. That that is correct, But I'm
Speaker 1: not concerned about US political turmoil than Mexican political turmoil. Yeah,
Speaker 1: Antonio Ortiz at Manna, thank you so much for being
Speaker 1: with us. Antonio Ortiz at Manna, see your vice president
Speaker 1: of the all Bright stone Bridge Group. He's also the
Speaker 1: former head of economic affairs at the Embassy of Mexico
Speaker 1: in the United States, joining us now Alex Wayne Bloomberg
Speaker 1: White House team Leader Alex. Interestingly, in response to this announcement,
Speaker 1: Io S Senator Chuck Grassley, a Republican, tweeted out that
Speaker 1: he hopes that is not the case, that this is
Speaker 1: not true, and he tweeted this to President Trump, Alex,
Speaker 1: what are we to make of all of this? So
Speaker 1: arguably the president's biggest achievement has been getting judicial nominees
Speaker 1: appointed to positions in the federal court system. He's gotten
Speaker 1: uh sixty appointments to the court system already, including appeals
Speaker 1: Court judges and a Supreme Court justice with more on
Speaker 1: the way. Probably, so the Senate Judiciary Committee Chairman, Chuck
Speaker 1: Grassley is the guy who has moved all those appointments
Speaker 1: through the process. He's worked closely with McGann. Megan gets
Speaker 1: a lot of credits on the right among conservatives and
Speaker 1: among Republican members of Congress for shepherding all these judicial appointments.
Speaker 1: And so I think that is what Grassley is concerned about,
Speaker 1: that if there is turmoil in the White House Counsel's
Speaker 1: position that the steady flow of judicial appointments may may
Speaker 1: may get a little a little bumpy. Can you give
Speaker 1: us a sense of the background to this. I mean,
Speaker 1: Don McGann is not President Trump's personal lawyer and has
Speaker 1: said he was not aware of some of the payments
Speaker 1: that were made to people to not talk about. So
Speaker 1: is that related to his decision to leave or has
Speaker 1: this been in the works for a while now? What
Speaker 1: what McGann is is involved in his UH Special Counsel
Speaker 1: Robert Mueller's investigations. He has taught extensively with the Special
Speaker 1: Counsel UH, essentially because the President gave him the green
Speaker 1: light to do so. And so McGann that the White
Speaker 1: House never expressed privilege over McGann to to limit what
Speaker 1: he said to the Special Counsel, So he's He's believed
Speaker 1: to have told Bob Mueller's folks a lot about how
Speaker 1: the early days of the White House worked, the firing
Speaker 1: of James Comey, UM, the Trump's decision making process with
Speaker 1: regard to Michael Flynn as former National Security advisor, all
Speaker 1: of those things Don McGann was very involved with and
Speaker 1: uh and has has spoken on the Special Council about UM.
Speaker 1: He and Trump have also reportedly budded heads over sort
Speaker 1: of the limits of presidential power. Trump is, I think,
Speaker 1: asked McGann to do things and McGann has had to
Speaker 1: tell him no, and that's made the President a little
Speaker 1: unhappy with him. Alex Washington is a political town. Is
Speaker 1: this a firing or a resignation something in between? I think, um,
Speaker 1: it's uh. We we don't know whether mcgannny this is coming.
Speaker 1: There was a report at Axioist this morning, uh, tip
Speaker 1: of the hat to them that said McGann was preparing
Speaker 1: to leave either after Brett Kavanaugh was confirmed to the
Speaker 1: Supreme Court or after the midterm elections. In November. But um,
Speaker 1: the President seems to have sort of quickened the pace
Speaker 1: on that departure a little bit with the tweet today.
Speaker 1: Uh So it's, UM, I don't know, it's it's sort
Speaker 1: of like a slow motion of firing or something. I'm
Speaker 1: not exactly sure. What is the role of the White
Speaker 1: House Council. What does the White House Council do? The
Speaker 1: White House Council defends the White House and the Office
Speaker 1: of the Presidency, uh and represents the White House in
Speaker 1: the Office of the Presidency in legal matters. The White
Speaker 1: House Council does not represent the President. That was apparently
Speaker 1: a misunderstanding that Donald Trump had upon entering the White House.
Speaker 1: He wanted. One thing we've we've seen reported is that
Speaker 1: he sort of thought that Don mgan was his personal attorney.
Speaker 1: And that's that's not what the White House Council does.
Speaker 1: And go ahead, going forward, who's likely to replace Don
Speaker 1: And does this expedited potential firing a Jeff Jeff Sessions
Speaker 1: that some people have been suggesting this morning. Uh, don't
Speaker 1: know that it has anything to do with Jeff Sessions.
Speaker 1: But the guy that is regarded as probably the likely
Speaker 1: successor to McGann isn't as a lawyer named Emmett Flood.
Speaker 1: He was hired earlier this year to replace Ty Cobb,
Speaker 1: who had been dealing with UH with Mueller. So Emmett
Speaker 1: Flood is now the the special counsel, the guy dealing
Speaker 1: with the special counsel investigation. He also handled UH investigations
Speaker 1: in the Clinton White House. Interestingly, UM, so he's he's
Speaker 1: not really a partisan guy and at Flood he's just
Speaker 1: a guy who strongly believes in the independence of the
Speaker 1: of the White House and in defending the president whoever
Speaker 1: it is um from investigations both by by by Counsel
Speaker 1: and the and the Justice Freman or by Congress. And
Speaker 1: this would require no approval process. Is that correct? Right?
Speaker 1: Especially the the White House Counsel is not a Senate
Speaker 1: confirmed edition. It's not. It's not a count of position.
Speaker 1: It's entirely up to the president. As far as Emmett
Speaker 1: Flood is concerned, he's got experience, as you said, in
Speaker 1: a variety of administrations. What would be his role in
Speaker 1: disappointment of judges and in the general role of being
Speaker 1: a White House counsel. I remember that he was representing
Speaker 1: at the time Vice President Dick Cheney. Uh in the
Speaker 1: lawsuit that was filed by Valerie Plaie I believe about
Speaker 1: the Plame affair about the right. So conventional wisdom is
Speaker 1: that Democrats are going to take the House in the
Speaker 1: midterm elections. And if that happens, UH, the White House
Speaker 1: can expect a flood of congressional investigations. Uh. Every subcommittee
Speaker 1: in the House with investigation investigatory powers is going to
Speaker 1: be probing one scandal or another within the Trump administration.
Speaker 1: And so Emmett Flood will be the guy if he
Speaker 1: if he assumes the job, he will be the guy
Speaker 1: who has to respond to all these investigations and fight
Speaker 1: back against them. Alex, if we could just take a
Speaker 1: step back and talk about the turnover that we've seen
Speaker 1: so far in the White House and try to draw
Speaker 1: some sort of implication from it. Is this pretty typical
Speaker 1: or is this a sign of something else? But if
Speaker 1: it's not typical, then then what can we draw from it?
Speaker 1: Is it just that President Trump is known for high
Speaker 1: turnover just generally, and this is his style? Is this
Speaker 1: good guy to work for the President is a difficult
Speaker 1: person to work for? And this is a very tumultuous
Speaker 1: White House. There has been a lot, a lot of turnover,
Speaker 1: more turnover than any previous presidency than anybody's ever looked
Speaker 1: closely at Brookings Institute has has good numbers on that um.
Speaker 1: And that's all because of the kind of guy Donald
Speaker 1: Trump is. Uh. He demands loyalty from his subordinates. Uh,
Speaker 1: he doesn't tend to show them much loyalty himself, and
Speaker 1: so a lot of people come in and out. I
Speaker 1: want to thank you very much for joining us, alex
Speaker 1: Wayne of Bloomberg sharing some insight into what's going on
Speaker 1: in the White House. Of course, Don McGan the announcement
Speaker 1: from President Donald Trump that he will be leaving his
Speaker 1: position as the White House Counsel uh sometime in the fall,
Speaker 1: based on the tweet from the President to speaking about
Speaker 1: also the appointment of Brett Kavanaugh to the US Supreme Court.
Speaker 1: Our thanks to alex Wayne joining us down to tell
Speaker 1: us all about the world of video gaming. Is Ted Pollock.
Speaker 1: He is a video game technology analyst and the co
Speaker 1: founder of The Gamer E t F G a m
Speaker 1: R E t F. Ted Pollock, thanks very much for
Speaker 1: being here. How old were you when you first played
Speaker 1: video games? Well, I think my parents brought home about
Speaker 1: age seven or eight, and have you've been playing them
Speaker 1: continuously since then? Not quite. I have a lot of
Speaker 1: different hobbies, but it's a great thing to do for
Speaker 1: your screen time, and it's it's more intellectually engaging than television.
Speaker 1: Tell me about the technology set up that many gamers have,
Speaker 1: because if you're not in the gaming world, you're not
Speaker 1: necessarily aware of the power, the complexity, the vibrancy of
Speaker 1: the graphics that are now rudimentary when it comes to
Speaker 1: a game. That's a great point. There's a huge spectrum
Speaker 1: of of systems ranging from the most powerful, which will
Speaker 1: be your gaming PCs made by companies like Dell, alien Ware, HP, Lenovo,
Speaker 1: so on and so forth. And then you go down
Speaker 1: into the PlayStation four, the Xbox one, the Nintendo Switch.
Speaker 1: You have tablet gaming, you have mobile phone gaming. There's
Speaker 1: still arcade gaming out there, you have virtual reality. Uh,
Speaker 1: just a huge spectrum of gaming. And coming up in
Speaker 1: the next three to five years, there's going to be
Speaker 1: a revolutionary change in gaming as we moved to cloud streaming.
Speaker 1: Cloud streaming is where the game is being processed on
Speaker 1: a remote server and all you need is a very
Speaker 1: low power processor to play high quality graphics. So certainly
Speaker 1: gaming has expanded dramatically, and not just from a playing perspective,
Speaker 1: but also a spectating perspective. And there's one study that
Speaker 1: you highlighted that showed that professional video gaming just in general,
Speaker 1: the industry will search just this year alone. Okay, that's
Speaker 1: the backdrop. Let's move fast forward to where we are
Speaker 1: right now. Or there's some questions, particularly in China with
Speaker 1: their decision not to approve some pretty mainstream games, and
Speaker 1: this has led to a lot of uncertainty. What's the
Speaker 1: impact of that, How how significantly should people take that? Well, China,
Speaker 1: their cultural agencies are very dringent on all sorts of media,
Speaker 1: and they they throttle certain certain media titles, certain brands,
Speaker 1: and they're also very careful about the business models that
Speaker 1: the game companies are using. There. Some of the uh,
Speaker 1: the free to play models encourage kids to perhaps play
Speaker 1: a little bit too much, so they're being careful about
Speaker 1: how they do that. But on a positive note in China, uh,
Speaker 1: there's a game company called net Dragon Websoft that just
Speaker 1: today announced six increase in earnings and they make educational games.
Speaker 1: So there's some positive things going on in China as well.
Speaker 1: It's not all bad news. So I'm looking right now
Speaker 1: at the geographic allocation of your assets in the game
Speaker 1: or e t F. China is nearly ten, the US
Speaker 1: is about thirty. Uh. How will that, how will that
Speaker 1: shift over the next couple of years from your expectations,
Speaker 1: I think that it should remain fairly stable and in
Speaker 1: those and then allocations, I gonna I'd be remiss if
Speaker 1: I didn't ask you about any fall out having to
Speaker 1: do with the tragedy in uh, Jacksonville in Florida, having
Speaker 1: to do with those public games that was NFL MAT
Speaker 1: and nineteen. I think security is important at schools, at
Speaker 1: music concerts, at any place where people gather, and that uh,
Speaker 1: you know, that's really what's going on here that you're
Speaker 1: gonna be It's gonna be a sort of the fact though,
Speaker 1: that's the operational procedure. Everybody gets wanded, Everybody goes through
Speaker 1: some kind of metal detector to check for any kind
Speaker 1: of suspicious Uh. This this could this could segue into
Speaker 1: a discussion not about the gaming industry, and but bottom
Speaker 1: line is that you have to deal with the environment
Speaker 1: that is out there currently in the current environment is
Speaker 1: that when people gather, there's a risk that someone crazy
Speaker 1: will do something bad. Just real quick. Uh. From your perspective,
Speaker 1: do you expect gaming to be a rival to, say, football,
Speaker 1: in ten years on the sports front? YEP, that's a
Speaker 1: difficult question. I think that when you look at there's
Speaker 1: there's three ways of looking at the popularity. There's there's participants,
Speaker 1: there's followers, and there's revenue. So certainly the number of
Speaker 1: followers and gaming. You have a billion people playing games
Speaker 1: globally and just a small percentage of that would be
Speaker 1: a massive amount of people. So I think gaming could
Speaker 1: definitely rival professional sports and the number of followers. Monetizing
Speaker 1: that is something that a lot of the game companies
Speaker 1: are going after and some of them are doing a
Speaker 1: really good job. Ted Pollock, thank you so much for
Speaker 1: being with us. Thanks for having me on. Ted Pollock
Speaker 1: Senior Game Menalist at John Petty Research. She's also the
Speaker 1: President portfolio manager of the fund management management co founding
Speaker 1: the Gamer et F. Thanks for listening to the Bloomberg
Speaker 1: P and L podcast. You can subscribe and listen to
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Speaker 1: I'm Pim Fox I'm on Twitter at pim Fox. I'm
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.
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