WEBVTT - If Climate Is a Crisis, Keep Gas Prices High 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanibek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.640 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:32.360 YouTube search Bloomberg Global News present Bond making some comments 0:00:32.360 --> 0:00:34.680 today about climate change and his policy plans and the 0:00:34.720 --> 0:00:37.320 absence of congressional action and in keeping with that Tim 0:00:37.440 --> 0:00:40.320 Bloomberg opinion columnist Edward Reporter making the point that if 0:00:40.400 --> 0:00:44.040 climate is a crisis, shouldn't we keep gas prices high? 0:00:44.360 --> 0:00:47.599 Edward Report. Edwardo Porter joins us now he's a Bloomberg 0:00:47.600 --> 0:00:52.040 opinion columnist with economic policy and immigration issues, joining us 0:00:52.240 --> 0:00:54.960 in the Bloomberg Interactive at Broker Studio. EDWARDO. It's good 0:00:55.000 --> 0:00:56.920 to have you with us. This is a provocative column 0:00:56.960 --> 0:01:01.000 because you're essentially saying that old move that President Biden 0:01:01.040 --> 0:01:03.080 could make is to find a way to put a 0:01:03.160 --> 0:01:07.160 five dollar a gallon floor on gasoline prices, literally the 0:01:07.200 --> 0:01:09.480 opposite of what he's trying to do in his world 0:01:09.480 --> 0:01:12.800 travels to get you know, quote unquote allies to give 0:01:12.840 --> 0:01:15.800 us more oil. Yeah. I mean the specific number is 0:01:15.840 --> 0:01:20.520 not the issue, five for fifty whatever. But what's important 0:01:20.640 --> 0:01:24.880 to note is that high energy prices, which include high 0:01:24.959 --> 0:01:28.000 gas prices, are going to be an essential component of 0:01:28.240 --> 0:01:30.840 any solution to climate change. I mean, if we want 0:01:30.840 --> 0:01:33.479 to reduce carbon emissions, we have to make carbon fuels 0:01:33.480 --> 0:01:36.520 more expensive, and this is an opportunity. Okay, what if 0:01:36.520 --> 0:01:38.280 you said, just to push back on that a little bit, 0:01:38.480 --> 0:01:40.240 what if you said, Okay, it's all well and good, 0:01:40.400 --> 0:01:42.600 but if President Biden were to do something like that, 0:01:42.880 --> 0:01:47.240 this is such a politically toxic issue that he would 0:01:47.240 --> 0:01:52.040 get just destroyed and at the polls, because this is 0:01:52.040 --> 0:01:54.960 the number one issue that Americans care about. Indeed, I 0:01:54.960 --> 0:01:57.320 feel for the guy. This is a real tough one. 0:01:57.440 --> 0:01:59.920 But any solution to climate change is going to be 0:02:00.080 --> 0:02:03.200 politically very very complicated. I mean we've been we've been 0:02:03.200 --> 0:02:06.680 debating this issue at least since the Obama administration. And 0:02:06.720 --> 0:02:09.000 remember what happened to his cap and trade program. It 0:02:09.120 --> 0:02:11.720 just died in flames, didn't even get to the Senate, 0:02:12.520 --> 0:02:15.360 um and and and and we've been trying and failing 0:02:15.360 --> 0:02:17.760 ever since. So the question, yes, there is a very 0:02:17.760 --> 0:02:22.320 big political cost to pay. Um, but at some point 0:02:22.360 --> 0:02:24.760 this argument needs to be made and needs to be 0:02:24.800 --> 0:02:27.880 turned into policy because there is no other real solution, 0:02:28.080 --> 0:02:30.480 right or I would go, you know, none of this matters, 0:02:30.600 --> 0:02:33.359 right if the climate continues to get warmer. I mean, 0:02:33.440 --> 0:02:36.079 just look at what's going on around the globe, right Like, 0:02:36.120 --> 0:02:40.560 we debate about higher rates and margins and other stuff 0:02:40.600 --> 0:02:43.639 that's you know, uh, stressing us all out. But if 0:02:43.680 --> 0:02:46.680 the climate continues to warm, and we will have nothing 0:02:46.720 --> 0:02:49.080 to worry about because we will not be able to exist. 0:02:50.080 --> 0:02:51.799 I don't mean to get so dark, but right like, 0:02:52.280 --> 0:02:55.480 this is the crux of the major problem that faces 0:02:55.480 --> 0:02:57.120 the world right now. All right, but I mean, just 0:02:57.120 --> 0:02:59.440 look at what's going on in your across Europe just now. 0:02:59.520 --> 0:03:02.480 And you've had versions of that in Australia, the United States, 0:03:02.520 --> 0:03:05.600 and certainly in places like Indian Bangladesh. I mean, the 0:03:05.600 --> 0:03:08.359 the really the intensity of the climate emergency is amazing 0:03:08.400 --> 0:03:13.720 in terms of lives lost, crops lost, agricultural yields down, 0:03:13.960 --> 0:03:17.440 longevity shortened. I mean, the cost of this are are 0:03:17.520 --> 0:03:21.720 extremely expensive, which is in fact what justifies imposing an 0:03:21.720 --> 0:03:25.720 economic cost to to mitigate you. You cover Latin America, 0:03:25.919 --> 0:03:28.240 you cover you as economic policy, immigration. But I think 0:03:28.240 --> 0:03:30.400 about what Brazil did back in the seventies, Right, they 0:03:30.400 --> 0:03:33.080 were brought to their knees because of the energy crisis, 0:03:33.120 --> 0:03:37.000 and they basically made themselves energy independent, right, going into ethanol, 0:03:37.040 --> 0:03:40.720 sugar based ethanol. Right, they had to address it because 0:03:40.760 --> 0:03:43.800 they had to to economically survive. You know, the US 0:03:43.840 --> 0:03:47.240 has the Europe has higher taxes. When it comes to guesses, 0:03:47.480 --> 0:03:50.320 what is it that the how come the Europeans did that? 0:03:50.920 --> 0:03:52.920 What is it that? The why aren't the US doing 0:03:53.000 --> 0:03:56.480 is because we've had so much fuel and and you know, 0:03:56.480 --> 0:04:00.960 fossil fuel based fuels that we don't have to you like, 0:04:01.120 --> 0:04:03.840 what is it? Yeah, that's a big question. I mean 0:04:03.920 --> 0:04:05.720 you could answer it in a variety of ways. I 0:04:05.720 --> 0:04:09.880 think for one, Europe is much more welcoming of higher 0:04:09.920 --> 0:04:12.960 taxes in the US is in any dimension, right, whether 0:04:13.000 --> 0:04:16.560 it's taxes on energy, gasoline, or income taxes or whatnot. 0:04:16.600 --> 0:04:19.640 They pay a higher tax burden, and they accept it 0:04:19.680 --> 0:04:22.240 because they get a society that they like with that money. 0:04:22.600 --> 0:04:25.120 And the United States has always been much more hostile 0:04:25.160 --> 0:04:27.880 to that. Also, the US has gotten used to very 0:04:27.960 --> 0:04:30.080 very cheap energy for a long time. I mean it's 0:04:30.120 --> 0:04:32.440 not just now that gas in Europe is more expensive. 0:04:32.520 --> 0:04:35.120 It's oh, I mean since I've been around, since I 0:04:35.160 --> 0:04:37.440 have memory, gas prices in Europe have been way higher 0:04:37.440 --> 0:04:39.440 than they are here. Yeah, look no further than Norway, 0:04:39.480 --> 0:04:41.760 where we've seen gas prices about ten dollars a gallon, 0:04:41.800 --> 0:04:45.479 despite the fact that the country produces so much energy. Edward, 0:04:45.560 --> 0:04:47.920 before we let you go, you ransom numbers here, talk 0:04:47.960 --> 0:04:52.239 about how this would spur innovation for alternatives. I mean, well, basically, 0:04:52.279 --> 0:04:55.679 what you what happens is the moment that consuming fossil 0:04:55.720 --> 0:04:59.360 fuels becomes more expensive, you'll have businesses and households looking 0:04:59.360 --> 0:05:02.400 for alternative. It's one alternative is to use less energy, 0:05:02.400 --> 0:05:05.120 but another alternative is defined technologies that use different sorts 0:05:05.160 --> 0:05:07.320 of energies. And we've seen that. I mean, we see 0:05:07.360 --> 0:05:10.800 the amount of investment in renewable energies and a new 0:05:10.839 --> 0:05:14.640 technologies for say energy storage and whatnot has gone is 0:05:14.839 --> 0:05:19.640 way higher. Uh precisely. I mean it's it's also stimulated 0:05:19.680 --> 0:05:23.960 by by government subsidies and so forth. But the prospect 0:05:24.040 --> 0:05:27.039 of much higher fossil fuel cost is driving this. I 0:05:27.040 --> 0:05:29.800 mean you even have gas companies, energy companies that are 0:05:29.839 --> 0:05:32.760 going in to invest in nuclear fusure. Right, they know, 0:05:32.880 --> 0:05:35.080 they know, well, it's interesting and if you wonder, if 0:05:35.120 --> 0:05:37.520 you think that it's like, you know, bottomless pits in 0:05:37.600 --> 0:05:40.280 terms of fossil fuels. Javier blast has a great story 0:05:40.320 --> 0:05:42.400 and the Bloomberg talking about Saudi Arabia. They're the world's 0:05:42.400 --> 0:05:45.880 biggest creed producer and they are nearing their ceiling when 0:05:45.880 --> 0:05:47.880 it comes to output, right, So it's going to run out. 0:05:47.920 --> 0:05:50.160 We know that, no doubt about it. Um, we gotta 0:05:50.240 --> 0:05:52.840 run come back. We loved it so great to check 0:05:52.880 --> 0:05:56.880 in with Bloomberg Opinion columist Edward or Porta. This is 0:05:56.960 --> 0:06:00.600 Bloomberg Business Week with Carol Masser and blue Berg Quick 0:06:00.600 --> 0:06:04.760 Takes Tim Stinovic on Bloomberg Radio. So the Bloomberg Big 0:06:04.760 --> 0:06:07.200 Take today. It's also storing the upcoming new issue of 0:06:07.200 --> 0:06:10.040 Bloomberg Business Week add on newstands tomorrow. Already on the 0:06:10.080 --> 0:06:13.480 Bloomberg and Bloomberg dot Com Slash business Week. It's about 0:06:13.520 --> 0:06:17.840 the wonderkin quant turned crypto billionaire and his dominance and 0:06:18.040 --> 0:06:20.720 expansion in that crypto industry. We're talking about none other 0:06:20.760 --> 0:06:24.480 than Sam Bankman Freed of ft X. The story by 0:06:24.480 --> 0:06:27.000 Hannah Miller and Olga careerf As Carol mentioned, it's in 0:06:27.040 --> 0:06:30.320 the upcoming issue of Bloomberg Business Week magazine. Check it 0:06:30.320 --> 0:06:33.000 out though at the Bloomberg Terminal and at Bloomberg dot 0:06:33.040 --> 0:06:35.960 com slash a business Week. Hannah Miller is digital currencies 0:06:35.960 --> 0:06:38.560 and venture capital reporter for Bloomberg new She joins us 0:06:38.560 --> 0:06:41.839 now on the phone from our Palo Alto bureau. Hannah, 0:06:41.920 --> 0:06:43.440 really great to have you with us. We've we've talked 0:06:43.480 --> 0:06:45.720 a little bit in recent days, in recent weeks about 0:06:45.720 --> 0:06:48.480 the buying spree that Sam Bankman Freed went on over 0:06:48.520 --> 0:06:50.760 the past couple of weeks as we've seen the crypto 0:06:50.839 --> 0:06:53.479 industry just collapse or past couple of months, I should say, 0:06:53.680 --> 0:06:55.919 what are his intentions and helping prop up some of 0:06:55.920 --> 0:06:59.240 these companies and then buying them as well. Yeah, thanks 0:06:59.240 --> 0:07:02.320 so much for having so It's been a really exciting 0:07:02.360 --> 0:07:06.240 time within the crypto industry. Despite the market downturn, um 0:07:06.279 --> 0:07:09.400 Sam Bank and Fried has really spotted a lot of 0:07:09.440 --> 0:07:14.200 opportunities here to just consolidate power over the industry. Um, 0:07:14.200 --> 0:07:17.080 whether it's striking deals with block Fire or Voyage or Digital. 0:07:17.440 --> 0:07:21.760 He's really, you know, just spreading his influence within this space. 0:07:21.840 --> 0:07:23.720 All right. Remind us for those who are like, wait, 0:07:23.800 --> 0:07:26.240 who is this dude, because he really is a standout 0:07:26.240 --> 0:07:28.720 among those who are in this space, because he's he's 0:07:28.720 --> 0:07:31.040 worth a lot of money, right, he's probably lost somebody. 0:07:31.080 --> 0:07:34.800 He's still worth a lot. Yeah, he's worth about ten 0:07:34.800 --> 0:07:39.160 billion dollars currently to our Billionaires Index UM. That's about 0:07:39.160 --> 0:07:42.640 half of where his wealth was in April. Obviously, still 0:07:42.680 --> 0:07:45.400 a lot of money. But he's thirties, thirty years old. 0:07:45.560 --> 0:07:49.680 He's taken the industry by storm. His company's ft X 0:07:49.800 --> 0:07:54.880 and Alameda Research have really asserted power within the industry. Uh. 0:07:54.920 --> 0:07:57.400 They work with a lot of top names. Um f 0:07:57.560 --> 0:08:00.600 t X is one of the most used crypto exchanges 0:08:00.680 --> 0:08:02.520 in the world. So he's doing all of this out 0:08:02.520 --> 0:08:04.000 of the goodness of his heart or right, he just 0:08:04.040 --> 0:08:07.520 want to dominate and be the industry. A lot of 0:08:07.520 --> 0:08:11.239 people within the industry see him as cryptos patron saint 0:08:11.600 --> 0:08:14.520 that he is stepping in bailing out companies out of 0:08:14.520 --> 0:08:17.480 the goodness of his own heart, but others see a 0:08:17.560 --> 0:08:22.520 business motivation here. Um, he's really buying companies on the cheap. Um, 0:08:22.760 --> 0:08:26.240 he is stepping in, he's helping out. But there's also 0:08:26.280 --> 0:08:29.320 a huge advantage in expanding his own business and gaining 0:08:29.360 --> 0:08:33.800 customers all over the world, particularly in the US. It's remarkable. 0:08:33.800 --> 0:08:37.079 There's a great infographic in here that really shows the 0:08:37.120 --> 0:08:39.160 web of companies that at this point are connected to 0:08:39.200 --> 0:08:41.040 f t X, U S f t X and then 0:08:41.080 --> 0:08:45.319 Alameda Research, all connected to Sam Bankman Freed. Yeah, I'm 0:08:45.320 --> 0:08:48.640 wondering more about what Sam is like, and we you know, 0:08:48.640 --> 0:08:50.640 we've had a lot of reporting around him and some 0:08:50.720 --> 0:08:53.160 profiles of him. But you know, I think for people 0:08:53.200 --> 0:08:56.000 who might have seen his conversation yesterday with Matt Levin 0:08:56.040 --> 0:08:57.800 at the Bloomberg Crypto Summit would see that he was 0:08:57.840 --> 0:09:00.679 wearing his signature shorts and a T shirt, really dressed 0:09:00.720 --> 0:09:02.520 on like anyone else there, which has kind of become, 0:09:02.840 --> 0:09:05.360 you know, a signature for him. Tell us more about 0:09:05.600 --> 0:09:07.160 what he's like and who he is and how he 0:09:07.200 --> 0:09:11.040 got into crypto. Yeah, I know, Um, Sam is always 0:09:11.040 --> 0:09:14.360 great to talk to. We spoke to him for this story. Um. 0:09:14.480 --> 0:09:19.560 He is described by people as kind, nerdy, shy, a 0:09:19.600 --> 0:09:23.719 little bit awkward. UM, but he really has a very 0:09:23.760 --> 0:09:27.640 calculating eye when he looks at the industry. UM. He 0:09:27.920 --> 0:09:32.000 got into crypto trading UM a few years back, really 0:09:32.200 --> 0:09:35.679 sort of climbed the ranks UM in terms of trading 0:09:35.679 --> 0:09:41.160 performance with ALAM to research, and he really has become 0:09:41.200 --> 0:09:44.599 a kind of a cult figure within and within the industry. 0:09:44.640 --> 0:09:47.120 And he's also pledged to give away most of his 0:09:47.360 --> 0:09:49.920 vast personal wealth. I just love the shorts and the 0:09:49.960 --> 0:09:52.600 T shirts. Hey. Um, One thing I found interesting is that, 0:09:53.000 --> 0:09:57.160 well he's spending and buying and looking to dominate when 0:09:57.160 --> 0:09:59.080 it comes to crypto. He's passed on some of the 0:09:59.160 --> 0:10:03.600 big flops as of late. That's true. UM, we haven't 0:10:03.600 --> 0:10:07.760 our reporting that he spoke with Terra and Celsius about 0:10:07.760 --> 0:10:12.319 potential veilouts there, but he ended up passing on both. UM. 0:10:12.440 --> 0:10:15.680 So it shows that he does have a discriminating eye here. 0:10:15.840 --> 0:10:19.240 He's not just bailing out whoever. UM. You know, he's 0:10:19.240 --> 0:10:22.920 looking for advantages. He's looking at how it can help 0:10:23.040 --> 0:10:25.440 him and his companies. What about when it comes to 0:10:25.520 --> 0:10:27.920 robin Hood and his investment in robin Hood, because this 0:10:27.960 --> 0:10:29.959 one's a little bit different than the other companies. A 0:10:30.000 --> 0:10:32.600 lot of the companies that he's investment have been interested 0:10:32.640 --> 0:10:34.720 in those have been in the private markets. But robin Hood, 0:10:34.880 --> 0:10:39.240 it's probably traded and wow it has gotten beat up. Yeah. No. Um, 0:10:39.280 --> 0:10:41.640 we reported a few weeks back that he was looking 0:10:41.679 --> 0:10:45.280 into a potential takeover at robin Hood. Uh. This shows 0:10:45.360 --> 0:10:48.600 that he has his eyes beyond the crypto industry, that 0:10:48.640 --> 0:10:52.560 he's looking at sort of more traditional finance players. Um. 0:10:52.600 --> 0:10:57.000 As one of my sources said, his ambitions no no bounds. Um. 0:10:57.080 --> 0:11:00.000 So it's really exciting to see him look at other areas, 0:11:00.080 --> 0:11:02.360 is um. I mean he's even joked about buying Goldman 0:11:02.400 --> 0:11:06.080 in the past. That is wild. Well, he wants to 0:11:06.080 --> 0:11:08.640 do bigger deals. It sounds like, you know, Honna, what 0:11:08.760 --> 0:11:10.920 is it that we need to understand about this individual? 0:11:11.000 --> 0:11:14.559 As the crypto space still many who are knowledgeable understand 0:11:14.600 --> 0:11:16.560 how it works, who are entrenched in this industry say, 0:11:16.559 --> 0:11:19.920 we're very early on in terms of the impact of 0:11:19.960 --> 0:11:22.920 the digital crypto world. So why is it that we 0:11:22.960 --> 0:11:25.720 need to keep an eye on him and what he does? Well? 0:11:25.760 --> 0:11:28.599 I think with this current crypto winter, the industry is 0:11:28.640 --> 0:11:32.600 at a crossroads. A lot of people want the centralized 0:11:32.640 --> 0:11:36.239 industry where powers in the hands the people. Um that 0:11:36.280 --> 0:11:40.439 it's based on pure to pure transactions. But Sam's influence 0:11:40.480 --> 0:11:43.920 and that of FTX shows that there are clear centralized 0:11:43.960 --> 0:11:47.640 elements here, that there are major players to watch, and 0:11:47.679 --> 0:11:50.599 that they are going to have continued influence as this 0:11:50.679 --> 0:11:54.000 space grows. Speaking of influence, you mentioned that he's been 0:11:54.080 --> 0:11:56.800 using his personal wealth and he's well, he's he's also 0:11:57.240 --> 0:12:00.000 pledged to donate the vast majority of his personal wealth. 0:12:00.280 --> 0:12:01.920 What about when it comes to where he's putting his 0:12:01.960 --> 0:12:04.840 money politically right now? And if you're reporting, showed you 0:12:04.880 --> 0:12:07.800 at all what he's thinking when it comes to influence 0:12:07.800 --> 0:12:12.000 in Washington, well in he was one of the top 0:12:12.160 --> 0:12:15.960 political donors to Joe Biden during the presidential campaign, uh, 0:12:16.040 --> 0:12:19.840 falling right behind Mike Bloomberg. UM. And he's already spoken 0:12:19.840 --> 0:12:23.679 about his commitments to donating to the Democratic Party for 0:12:23.800 --> 0:12:27.600 the upcoming election of particularly if Donald Trump runs again. 0:12:27.720 --> 0:12:31.440 Michael Bloomberg, of course, the founder of Bloomberg LP, Bloomberg Philanthropies, 0:12:31.440 --> 0:12:34.080 and of course Bloomberg ALP, the home of Bloomberg Radio 0:12:34.080 --> 0:12:37.840 and Bloomberg Business Week. Um, it is interesting, So I 0:12:37.880 --> 0:12:40.719 think this is your world. So what are you watching 0:12:41.160 --> 0:12:44.839 to see in terms of what he does next? Yeah, 0:12:44.880 --> 0:12:48.160 so we already know and we reported today that f 0:12:48.280 --> 0:12:50.760 t X and f u X f t x US 0:12:51.120 --> 0:12:54.440 are looking to raise more funding UM, which was pretty 0:12:54.480 --> 0:12:57.199 interesting during this time because I've written a lot about 0:12:57.200 --> 0:13:00.920 how funding from venture to capitalists has slow um when 0:13:00.920 --> 0:13:04.679 it comes to crypto. So he is definitely looking to expand. 0:13:04.960 --> 0:13:08.960 He has also spoken about buying assets from other distress companies, 0:13:09.440 --> 0:13:12.560 even targeting bitcoin miners. Is there some nervousness? Just got 0:13:12.559 --> 0:13:14.760 a few seconds left here, Hannah that though there might 0:13:14.760 --> 0:13:17.319 be too much consolidation of the crypto world in one 0:13:17.360 --> 0:13:21.560 person's hands, especially considering that this is an industry that 0:13:21.640 --> 0:13:24.439 is supposed to be decentralized at its core, it's kind 0:13:24.440 --> 0:13:27.640 of ironic. What a great deep dive, and it is, 0:13:27.760 --> 0:13:30.120 as we said, the Bloomberg Big Take. And of course 0:13:30.160 --> 0:13:32.600 this is a story in the issue New issue at 0:13:32.640 --> 0:13:34.640 Bloomberg Business Week, which will be out on newstands but 0:13:34.679 --> 0:13:36.719 already on the Bloomberg terminal, and you can find it 0:13:36.760 --> 0:13:39.600 at Bloomberg dot com. Slash Business Week Kindah Miller Digital 0:13:39.600 --> 0:13:42.080 Currencies and Venture Capital report at Bloomberg News. On the 0:13:42.120 --> 0:13:47.200 phone from our Palo Alto bureau. You're listening to Bloomberg 0:13:47.200 --> 0:13:50.920 Business Week with Carol Messer and Bloomberg Quick Takes. Tim 0:13:50.960 --> 0:13:54.720 Stinovic on Bloomberg Radio. Check it out shares a Biog. 0:13:54.840 --> 0:13:57.800 They're down about six percent in today's trade following an 0:13:57.800 --> 0:14:01.319 earnings update this morning. The company dealing with generic competition, 0:14:01.400 --> 0:14:03.480 and yet tim it did boost its guidance for the 0:14:03.520 --> 0:14:05.880 year overall. Let's get into it with Mike Browne, managing 0:14:05.920 --> 0:14:09.720 director and biotech healthcare specialist at a baired Mike this afternoon, 0:14:09.800 --> 0:14:11.880 joining us on the phone from New York City. Mike, 0:14:11.880 --> 0:14:15.559 how are you? Um? Great, Carolyn Kim thanks writing me on. Yeah, 0:14:15.600 --> 0:14:17.040 thanks so much for joining us. Okay, we've got a 0:14:17.080 --> 0:14:19.520 few hours to dig into these results. Give us your 0:14:19.520 --> 0:14:24.560 takeaways from Biogen. Yeah. So, like most biotech stocks, clinical 0:14:24.600 --> 0:14:27.520 regulatory and strategic updates tend to be more important than 0:14:27.600 --> 0:14:30.240 quarterly earnings performance. And I think that's what you're seeing 0:14:30.240 --> 0:14:33.640 here with Biogen today. So bad. Biotech analyst Briant Scorning, 0:14:33.640 --> 0:14:36.000 in his preview note for Biogen last week, pointed out 0:14:36.040 --> 0:14:39.160 there's two main issues that investors are focused on with Biogen, 0:14:39.200 --> 0:14:42.920 and that's the CEO search, and that's also their Alzheimer's 0:14:42.920 --> 0:14:45.480 pivotal read out of volcanamat, which is expected in the fall. 0:14:45.960 --> 0:14:48.880 The lack of positive updates or positive commentary on any 0:14:48.880 --> 0:14:51.000 of these two seems to be trumping what otherwise was 0:14:51.040 --> 0:14:57.400 a really nice beaten raised by Biogen. So interested, m. Yeah, No, 0:14:57.440 --> 0:14:59.960 it's really interesting that those two things are not actually 0:15:00.000 --> 0:15:04.400 are outweighing a beaten raised quarter from the company. Yeah. 0:15:04.480 --> 0:15:06.240 And I'd also say, you know, if you take a look, 0:15:06.320 --> 0:15:09.920 you are seeing some general weakness in the larger commercial 0:15:10.000 --> 0:15:13.000 biotech stocks today as we're seeing kind of a shift, 0:15:13.040 --> 0:15:15.360 as you mentioned the biotech boom, you're seeing a shift 0:15:15.360 --> 0:15:18.760 from the safety relative safety of those cash flowing large 0:15:18.760 --> 0:15:21.400 biotech stocks into some of the riskier areas of the 0:15:21.720 --> 0:15:24.720 biotech Well well, so wait, so are you saying that 0:15:24.760 --> 0:15:28.880 there's some overall biotech industry trends that are weighing down 0:15:29.520 --> 0:15:34.640 Biogen today? Are saying Biogen is weighing down the overall industry, Yeah, Carol, 0:15:34.680 --> 0:15:36.360 I think it's a little bit of column an, a 0:15:36.360 --> 0:15:38.680 little bit of Columby the performance of biogin on their 0:15:38.720 --> 0:15:42.440 their earnings was strong. It's it's just really uh, you know, 0:15:42.560 --> 0:15:44.960 those two issues which which need to be resolved, and 0:15:45.240 --> 0:15:47.000 you know, there wasn't a whole lot of updates on 0:15:47.040 --> 0:15:51.120 the CEO search and uh for the pivotal Aislezheimer's read out, 0:15:51.120 --> 0:15:53.840 which is expecting the fall. You know, the company did 0:15:53.880 --> 0:15:56.320 point to a broad range of potential outcomes there, which 0:15:56.360 --> 0:15:59.640 I think, based on conversation with investors, maybe taken as 0:15:59.680 --> 0:16:01.800 a flame negative. So help us out here, what kind 0:16:01.840 --> 0:16:04.760 of CEO is needed for Biogen at this point? Like 0:16:05.040 --> 0:16:07.160 I just remember years ago starting out, you know, when 0:16:07.160 --> 0:16:09.600 you talked about biotech, it was just like the upstarts, 0:16:10.080 --> 0:16:12.440 you know, and it's a lot of times there wasn't 0:16:12.480 --> 0:16:14.920 a lot of uh there's a lot of top line 0:16:14.960 --> 0:16:17.240 growth maybe, but not a lot of bottom line growth. Uh. 0:16:17.480 --> 0:16:19.600 It was tricky. I mean, this is a thirty billion 0:16:19.640 --> 0:16:22.760 dollar market cap company. So, um, how do we think 0:16:22.760 --> 0:16:25.240 about these these companies and what kind of CEO is 0:16:25.360 --> 0:16:29.560 needed to take this company into its next phase. Yeah, 0:16:29.600 --> 0:16:31.680 I'll have to leave most of the commentary on Biogen 0:16:31.760 --> 0:16:34.720 going forward to our great biotech analyst Brian scorny, but 0:16:34.800 --> 0:16:37.320 certainly needs some strong leadership there as far as some 0:16:37.400 --> 0:16:39.680 of the stumbles over the past few years. Uh, but 0:16:40.040 --> 0:16:42.680 I guess only the rest we can touch base and 0:16:42.720 --> 0:16:44.480 Brian down the road. What about when it comes to 0:16:44.520 --> 0:16:48.680 the Alzheimer struck, which you pronounced so correctly, and Carol 0:16:48.720 --> 0:16:53.320 and I have struggled with for months. Yeah, I think 0:16:53.360 --> 0:16:55.760 you know it's it's similar mechanism to add you holm, 0:16:55.800 --> 0:16:57.240 which we know how it worked out, But it's a 0:16:57.240 --> 0:17:00.280 it's a highly powered study. Uh so you know, Uh, 0:17:00.600 --> 0:17:02.840 the fact is that if there isn't a fact, they've 0:17:02.840 --> 0:17:05.400 powered in enough to to have it have some positive 0:17:05.440 --> 0:17:07.680 read out. But again, the commentary today that they gave 0:17:07.960 --> 0:17:12.520 was some somewhat pointing to a broader range of potential outcomes. 0:17:12.640 --> 0:17:15.560 All right, So you are biotech healthcare specialists, So I'm 0:17:15.560 --> 0:17:17.600 just curious when it comes to the advice that maybe 0:17:17.600 --> 0:17:20.879 you give to your bigger, broader team. Is biotech a 0:17:20.960 --> 0:17:23.440 group that you think investors need to be considering at 0:17:23.440 --> 0:17:26.080 this point? And and we're specifically, as I mentioned, it's 0:17:26.119 --> 0:17:29.240 up about over the past month, so that's quite a 0:17:29.240 --> 0:17:31.639 bump to the upside. Uh. I know there's been some 0:17:31.720 --> 0:17:34.080 deal flow once again. And you know, when you think 0:17:34.080 --> 0:17:36.600 about biotech, always think about the big farmer companies where 0:17:36.600 --> 0:17:39.919 they are looking for growth in particular. So what's the 0:17:40.000 --> 0:17:42.560 investment play, Mike in your view at this point when 0:17:42.560 --> 0:17:45.760 it comes to biotech. Yeah, the big question a lot 0:17:45.760 --> 0:17:47.800 of investors have on this rally is this a bear 0:17:47.880 --> 0:17:52.720 market rally or is something that's more sustainable? And I'll say, uh, strateguous. 0:17:53.080 --> 0:17:55.720 A baired company did some really good macro research on 0:17:56.119 --> 0:17:59.879 historical kind of biotech bear market bounces and uh, you know, 0:18:00.000 --> 0:18:02.199 they tend to be very strong and very quick. So 0:18:02.240 --> 0:18:04.159 it's possibility that that's what we're seeing here in a 0:18:04.160 --> 0:18:07.119 cold fade over time. But I'll tell you our fundamental 0:18:07.160 --> 0:18:10.560 research team that Bared biotech research team did note uh, 0:18:10.600 --> 0:18:13.080 and the Weekly a couple of weeks ago that short covering, 0:18:13.119 --> 0:18:15.600 which drove a lot of the initial stages of the rally, 0:18:15.880 --> 0:18:18.960 can actually lead to institutional buying as people started having 0:18:19.040 --> 0:18:21.080 fear of missing out. Did I did I miss bottom? 0:18:21.400 --> 0:18:23.600 The stocks are still largely cheap. I mean, as much 0:18:23.600 --> 0:18:25.960 as we bounced off bottom, the XBI is still down 0:18:26.320 --> 0:18:28.760 roughly or a little bit over fift from its peak 0:18:28.800 --> 0:18:33.760 in February, so we have seen uh, some inbound calls 0:18:33.760 --> 0:18:36.720 from clients that suggests that there's some real work being done. 0:18:36.720 --> 0:18:38.639 It's something that's changed over the past few weeks. And 0:18:38.680 --> 0:18:41.760 you've also seen some fund flows shift. Where biotech was 0:18:41.840 --> 0:18:45.400 bleeding uh fund flows out for much of the year, 0:18:45.440 --> 0:18:47.320 and over the last month or so, we've seen some 0:18:47.400 --> 0:18:50.280 pretty positive inflows there, which means there's there's some real 0:18:50.320 --> 0:18:53.560 buying and biotech and could prove that this is more sustainable. 0:18:53.560 --> 0:18:56.080 All right, we gotta run. Thank you so much. Mike Prone, 0:18:56.119 --> 0:18:59.600 managing director and biotech health care Specialists at BAIRED, joining 0:18:59.720 --> 0:19:01.520 us on the phone in New York City, although he's 0:19:01.560 --> 0:19:10.240 typically based in Milwaukee. I'm mac journal Yeah, but you 0:19:10.359 --> 0:19:15.040 let me drive. Oh no, no, no no, no, honey, please, 0:19:15.119 --> 0:19:20.919 I'll do the dravels. I want to drive. It's a 0:19:20.920 --> 0:19:28.560 good question. This is the Drive to the Close music 0:19:28.680 --> 0:19:32.679 well don on Bluebird Radio. All right, let's get to it. 0:19:32.720 --> 0:19:34.440 We've just got about ten and a half minutes left 0:19:34.440 --> 0:19:36.560 in today's trading session, getting ready to wrap up that 0:19:36.600 --> 0:19:39.000 Wednesday trade, and we've got a new guest with us 0:19:39.040 --> 0:19:41.760 for the Drive to the Close. Kirk McDonald's portfolio manager 0:19:41.840 --> 0:19:44.720 at Argent Capital Management. They've got approximately three point three 0:19:44.880 --> 0:19:48.119 billion dollars in assets under management. Kirk joining us on 0:19:48.160 --> 0:19:51.640 the phone from St. Louis Kirk, how are you. I'm 0:19:51.680 --> 0:19:53.800 doing great and thanctually having me on the show, Curl 0:19:53.840 --> 0:19:55.560 and Tim, Yeah, it's good to have you with us, 0:19:55.760 --> 0:19:59.480 help us, help our our investing audience understand where the 0:19:59.520 --> 0:20:02.680 market is right now. There's this debate going on internally 0:20:02.680 --> 0:20:07.560 and externally about capitulation. Where do you fall? So um, 0:20:07.560 --> 0:20:11.040 thanks for the question, Tim, And as far as capitulation goes, So, 0:20:11.080 --> 0:20:13.560 the market, you know, had a horrible first half in 0:20:13.600 --> 0:20:16.760 the MidCap area where I where I work, it had 0:20:16.800 --> 0:20:19.960 its third worst first half since the inception of the 0:20:20.000 --> 0:20:25.639 Russell MidCap benchmark. So while capitulation may or may not 0:20:25.720 --> 0:20:28.160 be upon us when the market is down twenty one 0:20:28.440 --> 0:20:31.680 six like the Russell MidCap is, it's just an opportunity 0:20:31.760 --> 0:20:34.359 for investors like us. So at an Argent Capital Management, 0:20:34.400 --> 0:20:37.280 we're looking to invest in the right company with positive change, 0:20:37.280 --> 0:20:40.040 and that huge draw down in the market for us 0:20:40.080 --> 0:20:42.600 as positive change. We can pick up some companies we've 0:20:42.640 --> 0:20:44.400 been looking at for a long time at a much 0:20:44.400 --> 0:20:47.359 lower price. I love the MidCap space we don't really 0:20:47.359 --> 0:20:48.960 talk about it a lot. I feel like it gets 0:20:49.000 --> 0:20:51.639 lost certainly between the big and small caps. But if 0:20:51.640 --> 0:20:53.639 you look at it, uh, I'm just look at the 0:20:53.720 --> 0:20:57.240