WEBVTT - Goldman to Cut About 3,200 Jobs This Week 0:00:01.840 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:06.840 Tim Stanevik. We're here every day bringing you the latest 0:00:06.840 --> 0:00:11.000 news from the world's of business and finance, clus technology, politics, economics, 0:00:11.039 --> 0:00:14.040 all harnessing the power of Business Week reporters and editors, 0:00:14.160 --> 0:00:17.000 not to mention our journalists and analyst in more than 0:00:17.040 --> 0:00:19.960 one and twenty countries. You can download Bloomberg Business Week 0:00:20.000 --> 0:00:22.880 on iTunes, SoundCloud, or Bloomberg dot com. You can also 0:00:22.880 --> 0:00:25.000 listen to our radio show at two pm Eastern Time 0:00:25.120 --> 0:00:28.200 on Bloomberg Radio or stream us live on YouTube and 0:00:28.240 --> 0:00:31.840 Bloomberg dot com. Well, it is the most read story 0:00:31.840 --> 0:00:34.040 on the Bloomberg terminal over the last eight hours. It's 0:00:34.040 --> 0:00:37.040 a Bloomberg exclusive. Goldman Sachs embarking on one of its 0:00:37.120 --> 0:00:39.760 biggest rounds of job cuts ever, as it locks in 0:00:39.800 --> 0:00:42.839 on a plan to eliminate about thirty two hundred positions 0:00:42.920 --> 0:00:46.120 just this week, the bank's leadership going deeper than rivals 0:00:46.159 --> 0:00:49.040 to shed jobs. It's expected to start the process midweek. 0:00:49.240 --> 0:00:52.080 The total number will not exceed thirty two d according 0:00:52.080 --> 0:00:55.160 to people with knowledge of the matter. With us now, 0:00:55.360 --> 0:00:58.720 we've got Bloomberg News Finance Team leader Sally Bakewell, she's 0:00:58.760 --> 0:01:01.840 in the Bloomberg Interactive broke his studio with us. Sally, 0:01:01.880 --> 0:01:04.440 good to have you with us this afternoon. What does 0:01:04.480 --> 0:01:07.360 our investing audience need to understand about these job cuts 0:01:07.520 --> 0:01:09.399 that are going to happen at Goldman Sachs. I think 0:01:09.400 --> 0:01:11.679 there are two things. So. First of all, Goldman has 0:01:11.760 --> 0:01:14.600 not been immune to these forces that are impacting all 0:01:14.720 --> 0:01:17.399 Wall Street banks. They're all trying to contain this slump 0:01:17.400 --> 0:01:21.320 in profit and revenue um owing to tightening monetary conditions, 0:01:21.360 --> 0:01:24.640 which is slowing down deal activity UM. And you know 0:01:24.680 --> 0:01:27.840 it's really causing some key Wall Street profit engines to 0:01:27.880 --> 0:01:30.840 splutter um. And we've seen other banks let go of 0:01:30.880 --> 0:01:34.399 staff Morgan Stanley, Credit, sweez Barcleys, They've all either fired 0:01:34.440 --> 0:01:37.640 staff or announced that they plan to do so. But 0:01:37.800 --> 0:01:40.280 with Goldman, they have some more specific things here, and 0:01:40.280 --> 0:01:43.560 indeed they have gone deeper than their rivals in this pullback, 0:01:43.600 --> 0:01:47.040 at least for now. UM. They're contending with some other things. 0:01:47.040 --> 0:01:50.720 For example, they made this very costly expansion into consumer 0:01:50.760 --> 0:01:54.240 bank banking, which left that unit with deep losses. This 0:01:54.360 --> 0:01:57.760 is the Marcus unit, Alan Sacks exactly UM. And ultimately 0:01:57.760 --> 0:02:01.560 in October that unit was apped into a new business 0:02:01.560 --> 0:02:06.320 which they have called platform Solutions, and UM Shreda reported 0:02:06.520 --> 0:02:11.120 this unit is poised to report that it's it's recorded 0:02:11.160 --> 0:02:14.160 more than two billion in pretext losses. So Goldman is 0:02:14.400 --> 0:02:16.720 facing forces in the market that all Wall Street banks 0:02:16.720 --> 0:02:19.320 are forcing facing, but it's contending with a few other things. 0:02:19.360 --> 0:02:22.880 And it also had um surging head count since twenty eighteen, 0:02:23.760 --> 0:02:27.400 and no doubt these cuts have kind of walked back 0:02:27.480 --> 0:02:30.320 some of some of that. Well, that's that's what I 0:02:30.360 --> 0:02:32.120 was about to ask about, how much of this is 0:02:32.200 --> 0:02:34.760 really something that we should be worried about as kind 0:02:34.800 --> 0:02:36.240 of a canary in the coal mine for some sort 0:02:36.280 --> 0:02:39.440 of broader macroeconomic outlook when they have that kind of 0:02:39.480 --> 0:02:41.639 bloated head count to begin with, I think we're looking 0:02:41.639 --> 0:02:44.160 at a number here of head counts down thirty four 0:02:44.240 --> 0:02:48.120 percent of the end of eighteen, about four fifty people 0:02:48.320 --> 0:02:51.560 as of September. So that's that's a lot of people, 0:02:51.960 --> 0:02:56.240 it is. And those years included the pandemic, of course, 0:02:56.320 --> 0:03:00.359 where banks tried not to UM let go of any 0:03:00.400 --> 0:03:04.280 staff during that incredibly difficult time, and so we started 0:03:04.320 --> 0:03:07.239 to see that when that period ended, UM and those 0:03:07.320 --> 0:03:10.080 kind of moratoriums ended that they have started to let 0:03:10.160 --> 0:03:13.720 go of people. Um. When we speak to the banks, 0:03:14.080 --> 0:03:16.880 the message we often get is that this is more 0:03:17.040 --> 0:03:19.560 normal trimming around the edges, and it's kind of a 0:03:19.600 --> 0:03:23.000 return to those annual culls um that they used to 0:03:23.080 --> 0:03:26.480 do of underperformers. But I think with Goldman Sacks owing 0:03:26.520 --> 0:03:29.840 to these more idiosyncratic things, UM, it's a little bit 0:03:30.040 --> 0:03:31.679 you know, that's why they have had to go a 0:03:31.720 --> 0:03:34.120 little bit further than some of their rivals. Yeah. So, 0:03:34.320 --> 0:03:37.680 so talk about the consumer banking element of this because 0:03:37.920 --> 0:03:41.000 and you know you mentioned this story that's exclusit by Shrinadarajan. 0:03:41.400 --> 0:03:43.640 We've talked to him at length about it in the past, 0:03:43.760 --> 0:03:48.160 but we can't look past the weakness there. And I 0:03:48.200 --> 0:03:50.400 mean what some analysts would say is, I don't want 0:03:50.400 --> 0:03:52.480 to call it a mistake, but it certainly didn't work 0:03:52.480 --> 0:03:55.680 out the way that Goldman Sachs wanted it to. That's right, UM. 0:03:56.000 --> 0:03:58.360 And Solomon, you know, he's said that they have been 0:03:58.520 --> 0:04:02.480 dialing back their ambitions for the consumer banking UM unit 0:04:03.000 --> 0:04:06.400 and signaled that they're reviewing other business lines to manage 0:04:06.440 --> 0:04:11.120 headcount and limit costs. UM. How much we can pinpoint 0:04:11.680 --> 0:04:15.840 UM that episode UM as a result as resulting in 0:04:15.920 --> 0:04:19.880 these cuts is a bit unclear, and maybe it's stepping 0:04:19.920 --> 0:04:22.280 too far to to do so. And you know, the 0:04:22.320 --> 0:04:26.119 bank still continues plans to continue hiring UM. A Street 0:04:26.160 --> 0:04:30.640 reports it it will hire, including for the regular analyst 0:04:30.760 --> 0:04:34.960 class later this year. UM. But I think, yeah, Goldman's 0:04:35.000 --> 0:04:39.320 consumer banking for a UM, just the difficulty UM, the 0:04:39.800 --> 0:04:43.200 in getting something like that, something so ambitious and huge 0:04:43.320 --> 0:04:47.320 up and running UM and the kind of regulatory perspective 0:04:47.440 --> 0:04:49.880 for doing that, the need to the sort of things 0:04:49.960 --> 0:04:52.720 that come with consumer banking that it needed to have 0:04:52.839 --> 0:04:56.080 in place were just perhaps a bridge too far. And 0:04:56.160 --> 0:04:58.120 what about at the very top when we're talking about 0:04:58.200 --> 0:05:00.760 David Solomon, James Warman. The is kind of folks, what 0:05:00.960 --> 0:05:05.360 kind of consequences or are there any hits that they take, oh, 0:05:05.560 --> 0:05:08.080 hits that they take from this? No doubt they're getting 0:05:08.120 --> 0:05:10.600 a lot of questions, and no doubt a lot of 0:05:10.720 --> 0:05:16.520 senior leadership are pretty unhappy. Because of course, UM Investment, 0:05:16.720 --> 0:05:20.240 the investment bankers are not expecting to get particularly good 0:05:20.480 --> 0:05:25.159 bonuses this year, and those compensation discussions will happen about 0:05:25.160 --> 0:05:27.600 a week from now and again, that is something that 0:05:28.080 --> 0:05:31.480 is the same across Wall Street. Um. But the consumer 0:05:31.600 --> 0:05:36.080 banking issue fed into and bled into a lot of um, 0:05:36.520 --> 0:05:38.480 the other sort of business lines at banks, and they've 0:05:38.560 --> 0:05:39.920 ended up kind of having to take a bit of 0:05:39.960 --> 0:05:42.880 a hit for it. UM. So I'm sure questions are 0:05:42.880 --> 0:05:45.120 pretty rife right now. All right, Sally bag Well, we 0:05:45.200 --> 0:05:46.800 love it when you join us. Thank you so much 0:05:47.000 --> 0:05:50.760 for taking the time. Check out Sharinadar Rajin's story Goldman 0:05:50.800 --> 0:05:54.719 to cut about thirty jobs this week after a cost review. Again, 0:05:54.760 --> 0:05:57.480 it's a Bloomberg exclusive. It's among the most read on 0:05:57.760 --> 0:06:02.400 the Bloomberg terminal. These sees Bloomberg Business Week with Carol 0:06:02.440 --> 0:06:06.920 Messer and Tim Stanovic on Bloomberg Radio. Well, the forthcoming 0:06:06.960 --> 0:06:09.560 issue of Bloomberg Business Week, it's the year Ahead issue. 0:06:09.640 --> 0:06:11.640 It's on news stands later this week. But right now 0:06:11.839 --> 0:06:13.640 you can read one of my favorite features that the 0:06:13.720 --> 0:06:15.880 magazine does each year. It's on the Bloomberg terminal and 0:06:15.920 --> 0:06:19.000 at Bloomberg dot com slash business Week. The features based 0:06:19.080 --> 0:06:21.640 on tapping into the excellent team of analysts that we 0:06:21.720 --> 0:06:25.159 have over at Bloomberg Intelligence. That team tracking some two 0:06:25.320 --> 0:06:29.240 thousand companies and sectors that range from communications to commodities 0:06:29.279 --> 0:06:32.480 to finance and food. Now, of those, b I has 0:06:32.560 --> 0:06:35.799 identified fifty that weren't a closer look this year based 0:06:35.880 --> 0:06:39.240 on a list of focus ideas. The companies they run 0:06:39.320 --> 0:06:42.800 the gamut Adidas to vinci eBay to Portscha and more. 0:06:42.880 --> 0:06:45.120 It's also today's big take. We've got with us Bloomberg 0:06:45.160 --> 0:06:47.760 Business Week Editor Joel Webber and Business Week Solutions and 0:06:47.839 --> 0:06:50.840 Strategy Senior editor Rebecca Penty. Joel with us in the 0:06:50.839 --> 0:06:53.920 Bloomberg Interactive Broker's studio, Rebecca joining us on the phone 0:06:53.960 --> 0:06:56.240 from the UK. Joel, I want to start with you 0:06:56.360 --> 0:06:58.840 and just get an understanding from from you how this 0:06:58.960 --> 0:07:02.159 list comes together because a sub Bloomberg intelligence they follow 0:07:02.320 --> 0:07:05.000 a couple of thousand companies. Yeah, it's uh, it's a 0:07:05.160 --> 0:07:07.360 it's a feat what they do on in an given day. 0:07:07.560 --> 0:07:10.160 And one of the things that we've long done with 0:07:10.240 --> 0:07:14.440 them is this project which culminates, uh it's it's actually 0:07:14.560 --> 0:07:17.320 like months in the making and then culminates with the 0:07:17.400 --> 0:07:21.040 publication of the list UM today. We've also gone on 0:07:21.160 --> 0:07:24.280 and done quarterly installments UM that we now do. So 0:07:24.880 --> 0:07:27.200 this is uh fifty companies to watch for the year, 0:07:27.280 --> 0:07:29.880 but you'll hear us come back and ahead of every quarter, 0:07:29.960 --> 0:07:34.200 will will tell you U companies to watch this quarter. Um. 0:07:34.520 --> 0:07:40.080 But the fifty is the real deal. And what what basically, um, 0:07:40.280 --> 0:07:43.760 the team of of analysts at Bloomberg Intelligence Intelligence does 0:07:44.160 --> 0:07:46.720 is take that two thousand plus companies and push it 0:07:46.800 --> 0:07:50.520 through Excel sheets and it spits out, uh, just a 0:07:50.640 --> 0:07:53.320 couple of dozen companies that we really want to kind 0:07:53.320 --> 0:07:56.000 of talk about. And we can't tell you these are 0:07:56.040 --> 0:07:59.280 bison cells that we're not gonna do anything. Um, that 0:07:59.400 --> 0:08:03.880 foolish that much conviction. But we can look at hindsight 0:08:04.000 --> 0:08:05.840 is as a measure of that. Yeah, exactly, that's what 0:08:05.960 --> 0:08:08.800 hindsights for, right. Um, we we look we call this 0:08:08.920 --> 0:08:12.600 watch because some of them we expect will outperform and 0:08:12.800 --> 0:08:16.240 others might lack. And so it's a great little mix 0:08:16.840 --> 0:08:18.960 of companies that we just think are going to have 0:08:19.280 --> 0:08:24.160 interesting years. Um. Rebecca was one of the Business Week 0:08:24.280 --> 0:08:26.520 editors who worked closely with the I to come up 0:08:26.560 --> 0:08:29.240 with that list and refine it and turn it into 0:08:29.600 --> 0:08:32.520 the magic that it is. Rebecca, I'm curious, what was 0:08:32.640 --> 0:08:35.640 the company that m was your was the one that 0:08:35.760 --> 0:08:38.560 you liked the most on the list? Well, I think 0:08:38.880 --> 0:08:42.199 Disney and Um, it was interesting. You know, b I 0:08:42.320 --> 0:08:46.520 has these focus ideas and they you know, basically they're 0:08:46.679 --> 0:08:49.959 they're high conviction ideas of companies where they think the 0:08:50.040 --> 0:08:53.079 market is not recognizing something about the company and so 0:08:53.240 --> 0:08:56.719 either the market's undervaluing overvaluing. And Disney was one of 0:08:56.760 --> 0:08:59.800 them that was really beat up during the pandemic and 0:09:00.000 --> 0:09:03.920 and you know, continues to be beat up once recession 0:09:04.040 --> 0:09:07.280 risks started looming because of all their theme parks. And 0:09:07.360 --> 0:09:09.040 the thing that was so interesting for me is that 0:09:09.520 --> 0:09:12.920 b I had this conviction that, you know, Disney is 0:09:13.000 --> 0:09:16.240 really poised for a rebound um due to you know, 0:09:16.360 --> 0:09:21.640 restructuring and accelerating streaming strategy. And we'd already landed on 0:09:21.720 --> 0:09:24.640 Disney as a company, and then the announcement of Bob 0:09:24.679 --> 0:09:28.760 Biker's return as CEO and and so that just reinforced 0:09:29.080 --> 0:09:32.080 the view from b I that this is a company 0:09:32.160 --> 0:09:34.719 to watch. And I think, you know, the bi's view 0:09:34.800 --> 0:09:36.439 that it could be a tale of two halves for 0:09:36.800 --> 0:09:39.839 for Disney, where you know, the second half is the 0:09:39.920 --> 0:09:42.280 stronger of the two. Okay, well, if you're gonna talk 0:09:42.280 --> 0:09:45.480 about Disney, we should talk about Netflix. Um, because Netflix 0:09:45.480 --> 0:09:48.800 also on the list. Why why did Netflix make it? Uh? 0:09:48.920 --> 0:09:52.840 In that same conversation, since obviously it's been the dominant 0:09:53.240 --> 0:09:57.120 streaming video provider. Yeah, that's true, And I think this 0:09:57.280 --> 0:10:00.240 is an interesting one where um B I Z going 0:10:00.360 --> 0:10:05.079 in on net Netflix is ads supported pricing tier. For 0:10:05.160 --> 0:10:08.240 the longest time, it's been a company that's dependent on 0:10:09.080 --> 0:10:14.040 um subscriptions but not advertising, and so Ba's view is 0:10:14.120 --> 0:10:18.839 that the market isn't fully recognizing the additional revenue and 0:10:19.000 --> 0:10:22.960 sales growth that could come from that advertising, which which 0:10:23.040 --> 0:10:26.880 they see as supporting higher average revenue per user and 0:10:27.160 --> 0:10:32.839 offsetting cannabalization of subscription revenue from customers downgrading to cheaper plans. Okay, 0:10:32.880 --> 0:10:36.120 so worth mentioning that to US companies perhaps you've heard 0:10:36.160 --> 0:10:41.480 of them? Right. The other thing I love about this project, though, Rebecca, 0:10:41.800 --> 0:10:44.719 is how global it is. Right, So, in addition to 0:10:44.880 --> 0:10:49.240 some marquee American names, tell us about ones that people 0:10:49.280 --> 0:10:52.480 outside of the US might not even heard of. Yeah, well, 0:10:52.520 --> 0:10:54.680 this one was an interesting one for me. I think, 0:10:54.960 --> 0:10:57.079 you know, we often hear about China being, you know, 0:10:57.160 --> 0:11:01.000 the world's manufacturing center, but we don't often know the 0:11:01.120 --> 0:11:03.600 names of the companies that make the stuff that we use, 0:11:04.200 --> 0:11:07.000 and one of the ones featured here is t s 0:11:07.200 --> 0:11:11.599 m C. It is the world's largest semiconductor foundry. And 0:11:12.360 --> 0:11:15.800 you know, with with the recession looming, with with um 0:11:16.400 --> 0:11:20.240 the economy taking a beating, worldwide, chip making is slowing down. 0:11:20.679 --> 0:11:24.839 But blub intelligence view is that t s MC is 0:11:24.920 --> 0:11:29.040 placed to better weather the cyclical market downturn than it's 0:11:29.120 --> 0:11:32.400 piers because of its dominant industry position. Yeah, I mean 0:11:32.520 --> 0:11:36.800 it is a juggernaut, right yeah, joel Um, what about 0:11:36.840 --> 0:11:39.199 your favorite on this list? Okay, well, I'll stick with 0:11:40.200 --> 0:11:44.200 tech Um and I'm gonna I'm gonna say sons Um, 0:11:44.559 --> 0:11:48.199 the little speaker company that could. Yeah, it's truly, as 0:11:48.480 --> 0:11:50.480 we say in the blurb, it is a David versus 0:11:50.559 --> 0:11:54.120 Goliath moment. There's a patent case. It's been wrestling with 0:11:54.240 --> 0:11:57.719 Google for a really long time. As we write b 0:11:57.840 --> 0:12:01.360 I is optimistic. Optimistic sons succeed in the dispute, which 0:12:01.400 --> 0:12:04.679 goes to a jury trial in May. Uh. This has 0:12:04.720 --> 0:12:08.400 been a long time coming. Uh, this showdown has been 0:12:08.840 --> 0:12:12.360 it's years in the making. Um so nos UH has 0:12:12.520 --> 0:12:15.160 has has had its share of some challenges. If your 0:12:15.160 --> 0:12:18.000 son's user, like I am, there's some software decisions that 0:12:18.000 --> 0:12:21.200 will make you pull your hair out, like that Apple 0:12:21.200 --> 0:12:23.760 bit of which app because there's multiple apps actually in 0:12:23.880 --> 0:12:25.959 order to use different devices that don't talk to each 0:12:25.960 --> 0:12:29.040 other always. You know, is there more to talk about here? Yes? 0:12:29.120 --> 0:12:31.920 There is? But so I like this so nos one, Um, 0:12:32.200 --> 0:12:35.640 but you know that's another American company. We've done tech 0:12:35.679 --> 0:12:39.800 a little bit. Now, Rebecca, what's another international company that 0:12:40.000 --> 0:12:44.040 that jumped out to you? Okay, I'm just looking down 0:12:44.080 --> 0:12:48.120 the list I've got, which was Porch. Let's talk about 0:12:48.160 --> 0:12:52.480 Porsche exactly, which I thought. So this company went public 0:12:52.559 --> 0:12:55.679 this year. VW spent out, which is just also just 0:12:55.760 --> 0:12:58.199 an incredible I p O. But now they actually have to, like, 0:12:58.520 --> 0:13:02.240 you know, make some evs and autos I think are 0:13:03.000 --> 0:13:06.280 just a really interesting kind of your head story. We're 0:13:06.320 --> 0:13:09.559 seeing obviously the pressure on Tesla, and we're gonna have 0:13:09.800 --> 0:13:13.319 more automakers sort of show up and an attempt to 0:13:13.400 --> 0:13:16.640 hit velocity like Tesla has proven. Um, what what what 0:13:16.760 --> 0:13:19.400 a successful company can look like? And now they have 0:13:19.480 --> 0:13:22.400 to like wade through some challenges. Yeah, it's a fantastic list. 0:13:22.800 --> 0:13:25.439 Go ahead, go ahead, reaty seconds. If I could just 0:13:25.559 --> 0:13:27.839 throw one quick one back in there. We talked a 0:13:27.880 --> 0:13:30.760 lot about companies that are poised to do well on 0:13:30.880 --> 0:13:33.600 the e V game. One of them that is maybe 0:13:33.679 --> 0:13:38.200 poised to fair worse off is Allison Transmission UM, another 0:13:38.440 --> 0:13:42.319 US company. Uh, it's a truck transmission supplier. And what 0:13:42.480 --> 0:13:44.559 you may have heard about EVS is that you know, 0:13:45.000 --> 0:13:48.520 it's not just regular cars, it's also trucks. So there's 0:13:48.600 --> 0:13:51.040 heightened competition in that truck space, which is going to 0:13:51.120 --> 0:13:54.160 be at some pressure to Alison Transmission. Well, I think 0:13:54.160 --> 0:13:56.319 we only talked about ten percent of the companies that 0:13:56.400 --> 0:13:58.280 are on this list. Check it out. It's at Bloomberg 0:13:58.320 --> 0:14:01.400 dot com Slash business Week. It's also available on the 0:14:01.480 --> 0:14:04.840 Bloomberg terminal. Big thank you to Rebecca Pentty. She's Solutions 0:14:04.880 --> 0:14:08.679 and Strategy Senior editor for Bloomberg Business Week, joining us 0:14:08.679 --> 0:14:11.040 on the phone from the UK this evening for her. 0:14:11.320 --> 0:14:14.120 Also to Joel Webber, the editor of Bloomberg Business Week. 0:14:14.160 --> 0:14:16.160 He's with us right now in the Bloomberg Interactive at 0:14:16.200 --> 0:14:18.839 Broker's studio. Check out Joel on Twitter at Joel Weber Show. 0:14:18.880 --> 0:14:22.800 Rebecca's there are penty on Twitter. You're listening to Bloomberg 0:14:22.800 --> 0:14:27.880 business Week. This is Bloomberg. You're listening to Bloomberg Business 0:14:27.960 --> 0:14:31.840 Week with Carol Messier and Tim Stenevic on Bloomberg Radio. 0:14:32.080 --> 0:14:35.160 Brazil's capital of Brazilia recovering today from an insurrection by 0:14:35.280 --> 0:14:39.000 thousands of supporters of ex president Jayra Bilsonaro, who stormed 0:14:39.040 --> 0:14:42.440 the country top government institutions, leaving a trail of destruction 0:14:42.480 --> 0:14:45.720 and testing the leadership of Louise and Nascio Lula da 0:14:45.760 --> 0:14:49.880 Silva just a week after he took office. Rioters ransacked Congress, 0:14:50.080 --> 0:14:53.120 the presidential palace and the top court in Brazilia on Sunday, 0:14:53.480 --> 0:14:56.720 hoping to trigger a military intervention. It took hours for 0:14:56.800 --> 0:14:59.600 security forces to regain control of the main government buildings. 0:14:59.680 --> 0:15:02.920 Hundred were arrested throughout the night, thousands that of bolson 0:15:02.960 --> 0:15:06.280 Our supporters remained in the area. For more. We turned 0:15:06.280 --> 0:15:09.800 out to Julia Lachi, Brazil country chief for Bloomberg News. 0:15:10.120 --> 0:15:13.560 She joined us on the phone from South Holo, Brazil. Julia, 0:15:13.560 --> 0:15:16.400 good to have you with us this afternoon. Just want 0:15:16.440 --> 0:15:18.560 to get from you the latest on on what we 0:15:18.640 --> 0:15:23.920 understand about this, uh, these insurrectionists yesterday. Hi, thanks for 0:15:24.000 --> 0:15:28.360 having me. So Brasita is in really recovery. Mode Um 0:15:28.680 --> 0:15:35.720 police are gathering evidence and really um booking thousands of 0:15:35.880 --> 0:15:40.280 protesters who came back to a militant like they have 0:15:40.400 --> 0:15:43.280 been camping in front of a military facility about eight 0:15:43.400 --> 0:15:46.320 kilometers from where the protests took place, UM, and they 0:15:46.440 --> 0:15:49.120 walked back there. Thousands of them walked back there after 0:15:49.200 --> 0:15:53.560 the protests, and today they were removed and taken to 0:15:53.800 --> 0:15:57.680 police for questioning and booking. And really it's a it's 0:15:58.280 --> 0:16:00.680 a swath of evidence that police East and the and 0:16:00.800 --> 0:16:04.640 the ministries now have to go through. Lula meanwhile, is 0:16:04.800 --> 0:16:08.520 reasserting his power. He met with the chiefs of Congress, 0:16:08.640 --> 0:16:11.640 the chiefs of the Supreme Court UM today really putting 0:16:11.760 --> 0:16:20.080 up united front against these protests and Luters really and 0:16:20.240 --> 0:16:23.640 Julia this is coming of course, as Billsonarow is I 0:16:23.680 --> 0:16:26.560 believe hospitalized as well. Can he gives a little more 0:16:26.600 --> 0:16:30.040 contact with us, right? Yeah? Here in the States, Yeah, 0:16:30.120 --> 0:16:33.400 that is right. UM. Bolsonado flu to Florida right before 0:16:33.720 --> 0:16:36.359 at the end of December, right before Blula was inaugurated, 0:16:36.440 --> 0:16:41.440 which was last Sunday, UM, and he has been really 0:16:41.520 --> 0:16:44.040 just taking pictures with supporters. There's been videos of him 0:16:44.080 --> 0:16:48.720 in supermarkets at KFC. UM so really just on vacation 0:16:48.800 --> 0:16:53.560 in Florida, and today we heard that he has been hospitalized, 0:16:54.040 --> 0:16:57.680 which has been confirmed by his wife. And really Billsonado 0:16:57.720 --> 0:17:00.960 has been hospitalized many times since he was stabbed UM 0:17:01.160 --> 0:17:05.600 in eighteen on the campaign trail. It's usually UM abdominal 0:17:05.720 --> 0:17:09.600 problems that he has. SILVER were monitoring that situation and 0:17:09.720 --> 0:17:11.840 what does that mean in terms of his response. Has 0:17:11.880 --> 0:17:14.639 he responded to the protests that he's seen or has 0:17:14.640 --> 0:17:18.320 he been kind of out of commission here? He has, 0:17:18.480 --> 0:17:22.159 although he has been mostly silent since losing the election 0:17:22.200 --> 0:17:26.560 on October both UM skipping public events and on social media, 0:17:26.680 --> 0:17:29.280 which is where he always had a huge presence with 0:17:29.480 --> 0:17:33.159 him and his family. He did tweet last night UM 0:17:33.440 --> 0:17:37.800 saying these kinds of riots, these sort of demonstrations are 0:17:37.920 --> 0:17:43.120 not within the rules of the democracy, and very quickly 0:17:43.359 --> 0:17:47.840 trying to distance himself from protests because there were immediately 0:17:47.920 --> 0:17:52.280 allegations UM that he was UM you know, he helped 0:17:52.359 --> 0:17:57.200 stoke protesters and and was behind the E section. So 0:17:57.320 --> 0:18:01.800 he was very quick to deny that. UM. So we 0:18:01.880 --> 0:18:04.760 shall see what happens next with that. UM. The Justice 0:18:04.840 --> 0:18:08.240 ministers said that for at the moment he cannot be 0:18:08.800 --> 0:18:13.399 um legally responsible for what happened yesterday, but he did 0:18:13.520 --> 0:18:19.240 say politically unequivocally responsible for some of what happened yesterday. 0:18:19.520 --> 0:18:21.320 I think a lot of people when they first saw 0:18:21.400 --> 0:18:24.159 images of this, they thought of January six here in 0:18:24.240 --> 0:18:28.200 the United States, And you know, some similarities between between 0:18:28.240 --> 0:18:32.080 the two Julia UM. A different part of the conversation though, 0:18:32.119 --> 0:18:34.879 has to do with the demands of these insurrectionists. What 0:18:35.040 --> 0:18:37.840 was the commonality that tied them together, sort of apart 0:18:37.880 --> 0:18:40.239 from the idea that that Bilsonaro was the one who 0:18:40.280 --> 0:18:44.080 won the election. Yeah, I think that's the main threat 0:18:44.119 --> 0:18:46.760 they wanted to UM. You know, they refused to accept 0:18:46.800 --> 0:18:49.480 the result of the election, and they were asking for 0:18:49.560 --> 0:18:52.280 the military to intervene and keep you know, and take 0:18:52.359 --> 0:18:56.159 Lula out of office. UM. And and that was when 0:18:56.200 --> 0:18:58.840 you're right. The images were very similar to what we 0:18:58.920 --> 0:19:03.320 saw in the Capitol two years ago, almost to the date. UM. 0:19:03.480 --> 0:19:09.280 One difference that UM we saw was police initially did 0:19:09.400 --> 0:19:14.440 not really resist the protesters, unlike in the US. So 0:19:14.680 --> 0:19:19.080 they ran rampant for about two hours before reinforcements arrived 0:19:19.119 --> 0:19:21.680 and really started taking people out of the buildings. But 0:19:22.040 --> 0:19:24.840 by then, you know, the damage to work of art 0:19:24.920 --> 0:19:28.240 and really to the building structure was just countless. Another 0:19:28.320 --> 0:19:30.399 difference that that I noticed was the fact that so 0:19:30.520 --> 0:19:36.840 many protesters insurrectionists were actually arrested immediately. This is not 0:19:36.960 --> 0:19:40.119 something that happened here in the US. What do we 0:19:40.160 --> 0:19:42.240 know about the people who have been arrested and the 0:19:42.320 --> 0:19:45.359 consequences that they could face if they do if they 0:19:45.400 --> 0:19:49.359 if they are indeed found guilty. Yeah, that's right. A 0:19:49.440 --> 0:19:53.360 lot of people were arrested kind of on the act um. 0:19:53.520 --> 0:19:56.480 I think a couple of hundred. The numbers varied depending 0:19:56.560 --> 0:20:00.720 on on the the government agency that is commenting on it. 0:20:01.840 --> 0:20:04.359 But you know, it was all over social media. People 0:20:04.400 --> 0:20:08.800 were posting selfies and videos while they weren't booting the buildings. 0:20:09.440 --> 0:20:12.639 So it is a trove of evidence that police now 0:20:12.760 --> 0:20:15.680 has to go through and just keep um, you know, 0:20:15.800 --> 0:20:18.040 finding these people and arresting them. Although a lot of 0:20:18.160 --> 0:20:21.480 videos have been erased, even social media accounts have been wiped, 0:20:21.960 --> 0:20:25.360 but the Supreme Court last night ordered um that these 0:20:25.880 --> 0:20:29.439 the evidence be preserved and really started going after these 0:20:29.480 --> 0:20:31.159 people and not just the people who were there, but 0:20:31.280 --> 0:20:35.920 people who financed the act. That's been a very key 0:20:36.080 --> 0:20:41.080 point um from all authorities commenting about the aftermath of 0:20:41.160 --> 0:20:43.240 this is that they really want to go after the 0:20:43.320 --> 0:20:46.720 people who bust thousands of Boston NATO supporters over the 0:20:46.760 --> 0:20:49.760 past two days. Too busy there for these protests. So 0:20:49.880 --> 0:20:51.320 Julie talked to us a little bit about the market 0:20:51.359 --> 0:20:56.080 reaction here. Demian sasaur Our, Bloomberg Intelligence Chief Emerging Market strategist, 0:20:56.560 --> 0:20:59.000 um kind of said the look, these are emerging markets. 0:20:59.040 --> 0:21:01.359 A lot of the stupolue whole risk is actually priced in. 0:21:01.359 --> 0:21:03.880 Bloomer Economics on the other hand, saying like there could 0:21:03.920 --> 0:21:05.400 still be a lot of pain. It could shave off 0:21:05.560 --> 0:21:08.920 seven tenths of one percent when it comes to economic 0:21:09.000 --> 0:21:12.240 activity in the month of January. Is that something the 0:21:12.280 --> 0:21:17.119 markets are responding to. So when markets opened, it was 0:21:17.640 --> 0:21:21.280 really looking like a horrible day, especially considering it was 0:21:21.400 --> 0:21:25.119 such a risk one day abroad, So both stocks and 0:21:25.200 --> 0:21:29.440 the currency were underperforming massively. As the day we're on 0:21:30.119 --> 0:21:33.040 things that improved. Both the mood here improved and the 0:21:33.200 --> 0:21:36.879 risk on sentiment that we were seeing abroad kind of 0:21:36.960 --> 0:21:38.960 fade at a little bit. So in the end it 0:21:39.160 --> 0:21:41.440 wasn't as bad as it could have been. But you know, 0:21:41.560 --> 0:21:45.679 Brazilian assets have been under performing since Lola Um won 0:21:45.800 --> 0:21:51.960 the election, really because investors have begun to worry that 0:21:52.119 --> 0:21:55.000 his comments on how much he's going to spend and 0:21:55.200 --> 0:21:59.639 comments from cabinet members that he just appointed about revoking, 0:22:00.040 --> 0:22:03.480 you know, the labor reform and the pension reform, both 0:22:03.520 --> 0:22:07.160 of which investors really see a key keeping government accounts 0:22:07.160 --> 0:22:10.600 and check are really weighing on us. It's so it's 0:22:10.600 --> 0:22:13.280 a bit longer than just today, Julia, what are you 0:22:13.320 --> 0:22:16.720 watching for now? What's the smart question that our investing 0:22:16.720 --> 0:22:20.480 audience needed needs to be asking as Brazilia continues to 0:22:20.520 --> 0:22:24.520 recover from US. I think there are a few things. UM. 0:22:24.680 --> 0:22:27.399 One is will that will this happen again? Right? Um, 0:22:27.480 --> 0:22:30.800 authorities say this will never happen again, but there are 0:22:30.840 --> 0:22:35.800 still thousands of people in Brazilia. UM, so it really 0:22:35.920 --> 0:22:38.720 needs to We really need to be on the watch 0:22:38.800 --> 0:22:42.920 for a resurgence of violence and then whatever comes out 0:22:43.160 --> 0:22:48.000 of these Supreme Court requests and inquiries. There are several 0:22:48.280 --> 0:22:51.280 arrest warrants that have already been issued. We don't have 0:22:51.520 --> 0:22:56.280 names yet, but it really could shake things up in 0:22:56.440 --> 0:22:59.680 politics and in the system, depending on what they find 0:23:00.000 --> 0:23:03.440 in terms of who financed and who stoked protesters. So 0:23:03.640 --> 0:23:05.480 I think those are the main things that we're watching for, 0:23:06.200 --> 0:23:10.280