WEBVTT - Surveillance: Hill Hearings Eclipsed by Op-Ed, Cirilli Reports 0:00:00.080 --> 0:00:12.960 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:28.160 Bloomberg dot Com, and of course on the Bloomberg. Yeah. 0:00:33.680 --> 0:00:36.640 Reading the press, what is clear is that everyone is 0:00:36.680 --> 0:00:39.800 now an expert on emerging markets. So let's bring in 0:00:39.880 --> 0:00:41.880 an expert on a merchant markets. The man who wrote 0:00:41.880 --> 0:00:44.519 that line, Tim Ash Blue Basset Management Senior E. M. 0:00:44.560 --> 0:00:47.040 Soft Ridge Strategist, Tim, Good morning to You're always great 0:00:47.040 --> 0:00:49.120 to catch up with you tell us what's really going on? 0:00:49.600 --> 0:00:52.680 Good morning, Yeah, I mean everyone is negative, you know, unfortunate. 0:00:52.720 --> 0:00:55.200 I've only done emergant market thirty years, so so I'm 0:00:55.240 --> 0:00:56.920 a bit of a novice and I learned every day 0:00:57.080 --> 0:00:59.360 something new. But but the reality is that, you know, 0:00:59.400 --> 0:01:02.000 there's a lot of lines around big em countries, you know, 0:01:02.040 --> 0:01:05.760 the Brazil's, Argentina's, Russia, South Africa, etcetera, that have their 0:01:05.920 --> 0:01:08.240 individual problems, but you know a lot of them is 0:01:08.240 --> 0:01:12.400 doing fine and you know, gross holding up okay. Commodity 0:01:12.400 --> 0:01:14.960 prices are fine, China's doing okay, and for the bulk 0:01:14.959 --> 0:01:16.840 of the m you know, that's kind of okay, And 0:01:17.240 --> 0:01:18.880 you know, top down, if you look at kind of 0:01:18.880 --> 0:01:22.399 systemic problems across EM, I mean you kind of struggling. 0:01:22.440 --> 0:01:24.640 I mean, I look at ratios that you know this 0:01:24.720 --> 0:01:26.680 is important. I mean if you think of things like 0:01:27.120 --> 0:01:30.400 external debt GDP, general government debt GDP come acout deficits. 0:01:30.440 --> 0:01:32.640 I mean, just imagine this all the focus on current 0:01:32.680 --> 0:01:37.000 account deficit countries like Turkey. Inaggregate across emerging markets, the 0:01:37.080 --> 0:01:40.480 average current account deficit is point nine percent of GDP. 0:01:40.680 --> 0:01:42.880 Very moderate. Right, there's a lot of e m f 0:01:43.040 --> 0:01:44.800 X movement at the moment. Currencies are coming in on 0:01:44.800 --> 0:01:47.240 a lot of pressure. BI course, countries do have big 0:01:47.240 --> 0:01:50.120 external financial requirements and FX adjustment is part of that process. 0:01:50.160 --> 0:01:53.280 But actually e m FX adjustment what should make you 0:01:53.360 --> 0:01:56.040 concerned is countries with a lot of gross external down 0:01:56.160 --> 0:01:58.720 And again the ratio of gross external debt to GDP 0:01:58.800 --> 0:02:02.280 across EM in Agria, he's only that's pretty moderate. This 0:02:02.360 --> 0:02:04.720 all sounds yeah, this all sounds great, And a lot 0:02:04.760 --> 0:02:07.600 of people have been saying this for almost a year now, 0:02:08.040 --> 0:02:11.000 and the route that we've seen has deepened. And you know, 0:02:11.040 --> 0:02:14.359 I saw this interesting chart yesterday looking at the decline 0:02:14.600 --> 0:02:18.640 in the central bank assets at the four biggest central banks, 0:02:19.000 --> 0:02:24.359 paired with the average yield on local currency emerging markets debt, 0:02:25.040 --> 0:02:28.280 and the sell off correlates with a decline in assets 0:02:28.280 --> 0:02:30.440 at the big central banks. I mean, quinn't you say 0:02:30.520 --> 0:02:32.919 that's all fine and good, but the same hand that 0:02:33.000 --> 0:02:35.480 giveth taketh away now with the pullback of some of 0:02:35.520 --> 0:02:39.639 the central banks. No, absolutely, I mean, look, the self 0:02:39.800 --> 0:02:44.520 is partially driven by FED tightening. Strong dollar. Uh, you know, 0:02:44.639 --> 0:02:47.239 em got got ahead of itself earlier in the year, 0:02:47.440 --> 0:02:50.680 was expensive. We're seeing an adjustment. The plus for me 0:02:51.440 --> 0:02:54.080 is that, say, unlike previous systemic crisis in the M 0:02:54.080 --> 0:02:58.040 say Asia n to two thousand two, where you had 0:02:58.160 --> 0:03:01.720 fixed exchange rates center of banks fighting that with using 0:03:01.720 --> 0:03:04.880 FX reserves, burning ex reserves. Actually this time around, central 0:03:04.880 --> 0:03:07.160 banks have been pretty orthodox, right, I mean, essentially they're 0:03:07.200 --> 0:03:10.760 letting currencies go, that does the adjustment on current account 0:03:10.760 --> 0:03:12.880 and external fans, and they're raising rates, which is kind 0:03:12.919 --> 0:03:15.560 of what they should do to to to to address 0:03:15.600 --> 0:03:18.519 the obviously the pass through that comes from from f 0:03:18.760 --> 0:03:22.119 X weakening, So you know FX adjustments, you know, it's painful, 0:03:22.280 --> 0:03:24.160 It grabs the headlines. Some of the moves have been 0:03:24.240 --> 0:03:26.600 very big, but it's part of the adjustment process and 0:03:26.600 --> 0:03:29.920 actually it's creating value and rates going how how it 0:03:29.960 --> 0:03:32.520 means you're getting nominal and real carry again in the end, 0:03:32.520 --> 0:03:35.800 which I think eventually will bring people back in tim 0:03:35.880 --> 0:03:38.160 How do you draw a distinction between a crisis and 0:03:38.200 --> 0:03:43.280 an aggressive adjustment of price? Well, you know, a christ 0:03:43.320 --> 0:03:45.640 I mean, at the moment it looks I mean I think, 0:03:45.720 --> 0:03:48.000 you know, you've had so many big emerging markets with 0:03:48.120 --> 0:03:51.280 challenges as I mentioned, and you know, top down, I 0:03:51.280 --> 0:03:53.160 don't I don't see a systemic problem in the end. 0:03:53.240 --> 0:03:56.000 But as with Asia, you know, if you go back 0:03:56.000 --> 0:03:58.360 to that period ninety seven to two thousand two, we 0:03:58.440 --> 0:04:01.480 had Check, we had Highland, we had As, we had 0:04:01.800 --> 0:04:05.440 a Russia, Turkey, Argentina, Brazil. I mean, it was over. 0:04:05.800 --> 0:04:07.720 Everyone was passing a baton to each other. And that's 0:04:07.760 --> 0:04:11.480 I guess the risk that said. You know, look, Argentina 0:04:11.600 --> 0:04:13.680 has gone to the Imath, it's trying to solve its problems. 0:04:13.680 --> 0:04:18.840 It's policy responces, pretty orthodox. Turkey hopefully finally the central 0:04:18.839 --> 0:04:22.400 Bank concept September of thirteen will have smelled enough Turkish 0:04:22.400 --> 0:04:25.640 coffee that they actually do what everyone has been telling 0:04:25.680 --> 0:04:27.600 them for a year to do, which is tightened policy. 0:04:28.200 --> 0:04:30.960 If they do that, you know, valuations on laure look 0:04:31.040 --> 0:04:33.360 very interesting. Rebalancing is happening. So you need a couple 0:04:33.400 --> 0:04:35.400 of these countries to turn around. If that happens, I 0:04:35.400 --> 0:04:37.760 think the moved around the end will turn you know, Tim. 0:04:37.800 --> 0:04:40.039 One thing that I'm struck by is some of the losses, 0:04:40.200 --> 0:04:45.160 particularly actively managed emerging market debt funds seven eight percent, 0:04:45.279 --> 0:04:48.080 nine percent losses in the past month. And I'm talking 0:04:48.080 --> 0:04:50.440 about some of the biggest names out there that have 0:04:50.480 --> 0:04:52.480 been managing this money. And I just have to wonder, 0:04:52.960 --> 0:04:55.440 you know, retail investors looking at those who have poured 0:04:55.480 --> 0:04:59.360 money into emerging markets. Mike, it's skittish, might withdraw You're 0:04:59.360 --> 0:05:02.640 already seeing the to this to some extent on the peripheries. 0:05:03.040 --> 0:05:06.400 To what extent could a tactical issue like that outflows 0:05:06.760 --> 0:05:10.360 really drive this regardless of whatever Turkish coffee they wake 0:05:10.440 --> 0:05:13.640 up a spell? Well, it's it's a very valid point, 0:05:14.360 --> 0:05:17.640 you know, contagion, you know, people suffering risks in Argentina, 0:05:18.360 --> 0:05:20.680 move on to I mean the problems in South Africa 0:05:20.760 --> 0:05:23.480 probably are related to to Argentina. Argentina was a very 0:05:23.520 --> 0:05:27.760 owned position. People like the story because you know, the 0:05:28.040 --> 0:05:31.040 Argentineans are finally doing what they need to do. Uh. 0:05:31.080 --> 0:05:33.560 And South Africa was again an own story and I 0:05:33.600 --> 0:05:37.080 think people you know, connected the dots there. Um, what 0:05:37.160 --> 0:05:39.159 I would say is in the end, look think about this. 0:05:39.240 --> 0:05:43.840 In the last twenty years EM the share of EM 0:05:43.839 --> 0:05:48.599 in global GDP has basically doubled to around right, And 0:05:48.640 --> 0:05:52.480 I think in the end, structurally most investors are not 0:05:52.640 --> 0:05:55.560 really invested in EM, right. I mean, it's very peripheral, 0:05:55.839 --> 0:05:57.919 and I think you know, over the longer term, people 0:05:57.960 --> 0:05:59.479 still need to put more money into EM. And this 0:05:59.520 --> 0:06:02.240 is a great oportunity because currencies have just had a 0:06:02.240 --> 0:06:05.880 big time. Remember a lot of noise around emerging markets, right, 0:06:05.920 --> 0:06:08.560 And another the question beviously was about crisis. Actually, we 0:06:08.600 --> 0:06:11.480 haven't had a credit events, a big EM credit events 0:06:11.680 --> 0:06:15.200 in a m so far. It can happen, certainly, but 0:06:15.400 --> 0:06:18.599 so far, you know, currencies are just this is part 0:06:18.640 --> 0:06:21.520 of this, this is what should happen, and we haven't 0:06:21.560 --> 0:06:23.560 seen a big EM rollover, right, And I think that's 0:06:23.600 --> 0:06:25.880 really really encouraging. So Jim, I think that some people 0:06:25.960 --> 0:06:28.400 might be listening to this, and they'll say, someone who 0:06:28.440 --> 0:06:31.560 manages emerging markets funds is recommending the people put more 0:06:31.560 --> 0:06:34.720 money into emerging markets funds. I'm wondering, from your perspective, 0:06:34.760 --> 0:06:37.960 what are you buying right now and how much personal 0:06:38.000 --> 0:06:42.400 conviction do you have that this is a good buying opportunity. Well, 0:06:42.600 --> 0:06:45.560 you know, at the moment, we are pretty neutral because 0:06:45.600 --> 0:06:47.800 we are waiting for some of those big countries to 0:06:47.839 --> 0:06:51.120 turn around. I mean, we're waiting for a resolution with 0:06:51.240 --> 0:06:52.800 Argentina in terms of the i m F. We think 0:06:52.800 --> 0:06:57.040 that's coming. Uh. You know, we think that Turkey you know, 0:06:57.880 --> 0:07:00.400 certainly has some very good corporate some very good banks. 0:07:00.440 --> 0:07:03.160 They're working really really hard to turn this story around. 0:07:03.480 --> 0:07:05.360 We need the right policy action at the top, from 0:07:05.400 --> 0:07:08.120 the top down from central bank basically, and that I 0:07:08.120 --> 0:07:13.200 think we'll we'll give a green signal also in Turkey. Um. Uh. 0:07:13.240 --> 0:07:16.000 You know South Africa's you know, it's been a contagent story. 0:07:16.560 --> 0:07:19.080 Um in the end, you know, there is a there 0:07:19.120 --> 0:07:22.680 is a deflation rate rate story there. The growth data 0:07:22.720 --> 0:07:26.440 came in very bad that you know currencies week, Uh, 0:07:26.680 --> 0:07:29.600 some great opportunities in South Africa local rates now that 0:07:29.640 --> 0:07:31.600 you know, value has been created. So I mean, look, 0:07:31.880 --> 0:07:34.960 it's all it's selective. It's about knowing the owning these 0:07:35.000 --> 0:07:39.400 country stories, knowing them really really well, feeling comfortable with them, 0:07:39.480 --> 0:07:43.600 and finding the turning point. And there are some wonderful 0:07:43.760 --> 0:07:47.360 opportunities being created this year. Remember, I mean this is 0:07:47.440 --> 0:07:50.000 really part of the m investing, right, I mean, you know, 0:07:50.080 --> 0:07:53.320 it's uh, it can be a volatile asset class. You know, 0:07:53.400 --> 0:07:56.440 we've had a couple of fantastic years. We've seen a 0:07:56.440 --> 0:08:00.400 bit of pushback. But in the end, have you got 0:08:00.440 --> 0:08:04.480 to be an EM because it's such a big part 0:08:04.520 --> 0:08:06.720 of the global economy. The answers, yes, right, you can't 0:08:06.800 --> 0:08:10.080 really ignore this asset class anymore. And I guess these 0:08:10.120 --> 0:08:12.880 are the kind of times that you know, you know, 0:08:12.920 --> 0:08:15.760 you've got to show a bit of durability and endurance 0:08:15.840 --> 0:08:19.480 and and opportunities are being created. Tomash, great to catch 0:08:19.480 --> 0:08:22.720 out with you. Blue By Asset Management, senior EM sovereign strategist, 0:08:22.720 --> 0:08:39.319 one of the experts out there in the house big 0:08:39.440 --> 0:08:43.240 tech companies. Yesterday they were actually in the Senate and 0:08:43.240 --> 0:08:46.280 they were answering questions. And right now I'm looking at 0:08:46.360 --> 0:08:49.720 Nazak leading the Klehins, But Facebook and Twitter sharers largely 0:08:49.800 --> 0:08:52.679 unchanged ahead of the open um. Do we care about 0:08:52.720 --> 0:08:56.800 these hearings? Do I care about these hearings? And they 0:08:56.840 --> 0:09:00.720 were interesting? Let's ask someone else, Christmas Angie Belly Funds 0:09:00.720 --> 0:09:02.600 at CO chief investment officer, joining us here in our 0:09:02.600 --> 0:09:05.360 eleven three studios, Chris, should we care about these? Well, 0:09:05.440 --> 0:09:08.200 yesterday was a real three ring circus in Washington, between 0:09:08.200 --> 0:09:11.280 the Kavanalt hearrings, the op ED and these hearings. A 0:09:11.320 --> 0:09:13.800 normal day, a normal day. And this comes in the 0:09:13.800 --> 0:09:18.880 context of course of Trump going after Google on Twitter 0:09:18.960 --> 0:09:22.960 and Bernie Sanders introducing the Stop Bezos Act. So big 0:09:22.960 --> 0:09:25.880 Tech is uh, one could say under under siege, but 0:09:25.920 --> 0:09:27.480 it has been for a while. I mean, is there 0:09:27.520 --> 0:09:29.640 anything that kind of came out of yesterday? No, I 0:09:29.640 --> 0:09:31.280 don't think so. And I think the fact that Google 0:09:31.640 --> 0:09:34.079 didn't show up and had a little placard on their 0:09:34.120 --> 0:09:37.200 empty chair was indicative of what they think of these hearings. 0:09:37.360 --> 0:09:42.000 But I think ultimately listen radio was regulated this medium 0:09:42.000 --> 0:09:45.280 in nineteen four over the over the post World War 0:09:45.320 --> 0:09:49.040 two era, lots of regulations in place to limit the 0:09:49.120 --> 0:09:52.440 voice of any particular broadcast television network owner. And we're 0:09:52.440 --> 0:09:54.440 just catching up now in the Internet age, and so 0:09:54.480 --> 0:09:58.880 there will be more regulation, more requirements on the on 0:09:58.920 --> 0:10:00.760 the part of the Internet come. But that's gonna have 0:10:00.760 --> 0:10:02.760 a cost associated with it. Why don't we celebrate sing 0:10:02.800 --> 0:10:06.560 the company as successful as Amazon in this country? Whant 0:10:06.559 --> 0:10:09.800 the politicians celebrating this? This is a huge success story, 0:10:10.120 --> 0:10:13.760 the envy of most in the world. It is, but 0:10:13.880 --> 0:10:16.360 it's it's a big company with a lot of influence, 0:10:16.559 --> 0:10:20.200 and um, those companies tend to be targeted by politicians. Um. 0:10:20.360 --> 0:10:25.319 So interestingly obviously that it comes from the left, um, 0:10:25.400 --> 0:10:28.800 and you know, and the right and the right, which 0:10:28.840 --> 0:10:30.880 is which? Which is what makes it interesting? But you know, 0:10:30.960 --> 0:10:33.200 you mentioned Google, you mentioned that little placard and how 0:10:33.240 --> 0:10:35.600 they felt about the hearings. Google shares are actually down 0:10:35.640 --> 0:10:38.719 nearly a percent ahead of the open today, Facebook and 0:10:38.760 --> 0:10:41.440 Twitter largely flat. Do you think that that's significant or 0:10:41.440 --> 0:10:43.480 is this just sort of noise? I think that's noise 0:10:43.520 --> 0:10:49.640 at this point. Um. You know, clearly Google survived the 0:10:49.679 --> 0:10:53.840 privacy regulation regime in Europe pretty well. And I think 0:10:53.840 --> 0:10:56.079 the the the endgame here is that the companies with 0:10:56.160 --> 0:10:59.600 scale like Google and Facebook and even Twitter are going 0:10:59.640 --> 0:11:02.040 to be the who are best able to put in 0:11:02.040 --> 0:11:05.640 the systems to comply with whatever Washington wants, and they're 0:11:05.640 --> 0:11:09.480 gonna be further entrenched by regulation. Chris, you out run 0:11:09.520 --> 0:11:12.040 Goodbelly Funds. That's a lot of money. When you look 0:11:12.080 --> 0:11:14.520 at the tech sector right now, is there any reason 0:11:14.600 --> 0:11:17.960 why you wouldn't allocate capital to that sector based on 0:11:18.000 --> 0:11:22.319 a risk of regulations somewhere somehow in the future. Well, listen, yeah, 0:11:22.320 --> 0:11:26.200 I think, uh, it is just one element of the 0:11:26.240 --> 0:11:28.200 things that we look at. Um. You know, we invest, 0:11:28.640 --> 0:11:31.839 we've invested for many, many years, decades in the cable sector, 0:11:31.800 --> 0:11:34.240 and the biggest risk to the cable sector the distribution 0:11:34.280 --> 0:11:37.960 industry has been, always will be regulation. And that's just 0:11:38.000 --> 0:11:40.360 something that you have to digest and and see if 0:11:40.360 --> 0:11:43.079 it's accounted for in the in the multiples. So right now, 0:11:43.200 --> 0:11:44.640 given the fact that you have a lot of big 0:11:44.920 --> 0:11:48.000 analysts saying things look a little heavy, maybe time to 0:11:48.000 --> 0:11:50.080 take chips off the table. What's the biggest opportunity that 0:11:50.120 --> 0:11:54.200 you see right now? Yeah, so listen, the the extended 0:11:54.240 --> 0:12:00.880 fang Facebook, Amazon, Netflix, Google, Microsoft and Apple are collectively 0:12:00.920 --> 0:12:05.000 four point four trillion. It's like the SNP. They've accounted 0:12:05.000 --> 0:12:06.640 for about half of the games in the SNP so 0:12:06.720 --> 0:12:10.280 far this year. Um, you know, those companies I think 0:12:10.600 --> 0:12:12.600 in aggregate are probably a little bit ahead of themselves. 0:12:12.600 --> 0:12:16.120 Among them, there are probably better buys, like in my view, 0:12:16.160 --> 0:12:20.480 Google than uh than say Amazon. Um, but you know, 0:12:20.520 --> 0:12:22.800 beyond that, we we we have other areas that we 0:12:22.840 --> 0:12:24.480 look at. We like the cable sector. We think there's 0:12:24.480 --> 0:12:27.440 gonna be consolidation amongst broadcast television networks. So that's an 0:12:27.440 --> 0:12:30.800 interesting area amongst others. Chris Ma greats, can't hump with 0:12:30.840 --> 0:12:32.640 you today, Thanks for dropping on the studio, can Bunny 0:12:32.640 --> 0:12:49.560 Funds co c I. Oh, the big news of the 0:12:49.640 --> 0:12:52.120 day is not in markets which are nearly flat, is 0:12:52.240 --> 0:12:55.760 Jonathan Farrow has pointed out today on several occasions. Um, 0:12:55.800 --> 0:12:57.719 it's really on the d C. It's on the DC 0:12:57.920 --> 0:13:01.360 front And that editorial who done it? As you put it, John, 0:13:01.480 --> 0:13:05.280 and Kevin's really joining us now, Chief Washington correspondent Kevin 0:13:05.480 --> 0:13:08.680 This anonymous editorial in the New York Times, written as 0:13:08.720 --> 0:13:12.240 sensibly by someone close to the president, saying that he 0:13:12.320 --> 0:13:17.319 basically is on the cusp of incompetency. What's the fallout 0:13:17.320 --> 0:13:20.600 this morning? What's the mood? Good morning? Lead of the fallout? 0:13:20.679 --> 0:13:24.200 Just within the last hour, Vice President Mike Tent's office 0:13:24.240 --> 0:13:27.920 releasing a statement saying that the Vice President was not 0:13:28.640 --> 0:13:31.920 one of the people behind the New York Times bombshell. 0:13:31.960 --> 0:13:35.520 Anonymous op ed, So the Vice President taking himself out 0:13:35.559 --> 0:13:39.839 of the equation. Meanwhile, k Kevin hold on one second, 0:13:40.120 --> 0:13:42.360 does that actually effectively take him out of the equation? 0:13:42.400 --> 0:13:43.960 I mean, these are words you don't want to say. 0:13:44.000 --> 0:13:46.200 I did not write an editorial about you, my boss, 0:13:46.440 --> 0:13:51.240 saying that you are incompetent. Sorry, what's your question? So 0:13:51.280 --> 0:13:52.880 my question is, does that actually take him out of 0:13:52.880 --> 0:13:54.840 the equation? I mean, are we going to basically see 0:13:54.840 --> 0:13:57.560 everybody in the administration just put out statements saying that 0:13:57.600 --> 0:14:01.640 they are, uh, not the author of this work. Well, 0:14:01.679 --> 0:14:04.559 that's really what they're facing now at this particular point, 0:14:04.679 --> 0:14:06.800 is is that there's a lot of questions as to 0:14:06.840 --> 0:14:09.280 who wrote it. So the Vice President felt that he 0:14:09.320 --> 0:14:11.199 needed to put out a statement. He did within the 0:14:11.280 --> 0:14:14.280 last hour. Meanwhile, the New York Times also confirming what 0:14:14.320 --> 0:14:17.760 White House Press Secretary Sarah Sanders said, which is essentially, 0:14:17.800 --> 0:14:20.720 the gender of this person is a male. So a 0:14:20.760 --> 0:14:23.960 lot of speculation this morning, the White House doubling down 0:14:24.000 --> 0:14:27.960 criticizing the New York Times, uh, supporters of our critics, 0:14:27.960 --> 0:14:30.920 supporters of the Times, critics of the president, are arguing 0:14:30.960 --> 0:14:32.800 that this is a White House on the brinks too collapse. 0:14:33.160 --> 0:14:36.280 At the moment, Kevin, it seems to be an internal crisis. 0:14:36.320 --> 0:14:39.920 We now, apparently, according to the writer of this opaed, 0:14:40.720 --> 0:14:45.160 have an administration that is governed by some anonymous, unelected 0:14:45.160 --> 0:14:48.560 officials that are trying to stop the president from doing 0:14:48.800 --> 0:14:50.640 what he wants to do. Is that essentially what we 0:14:50.680 --> 0:14:54.280 have now, Kevin. That's absolutely correct, And in fact, when 0:14:54.320 --> 0:14:57.560 you talk to sources inside of the administration, they argue, hey, 0:14:57.560 --> 0:14:59.280 wait a minute, we've been saying this all along. Just 0:14:59.440 --> 0:15:02.360 is the Duke state type of conspiracy. On the flip 0:15:02.360 --> 0:15:05.000 side of that, you have centrist Republicans as well as 0:15:05.000 --> 0:15:09.120 Democrats who were absolutely concerned. Was just at the pace 0:15:09.200 --> 0:15:12.200 in which, if it's not Bob woodwork book, it's now 0:15:12.240 --> 0:15:14.680 an anonymous op ed in the New York Times, The 0:15:14.800 --> 0:15:18.240 issue or the reissuing of the twenty fifth Amendment being 0:15:18.440 --> 0:15:21.240 talked about inside of the Beltway is not something that 0:15:21.280 --> 0:15:24.080 the administration wants to be discussing. And quite frankly, they 0:15:24.120 --> 0:15:27.040 were caught completely flatfooted. They couldn't even get a hard 0:15:27.080 --> 0:15:31.600 copy of Bob Woodwork's book until hours after this was 0:15:31.800 --> 0:15:34.240 the experts were first made published. It shows a lack 0:15:34.280 --> 0:15:37.920 of communicative strategy, and it shows that they've caught flatfooted 0:15:37.960 --> 0:15:41.160 and completely on defense. They were brought a copy of 0:15:41.200 --> 0:15:43.640 The New York Times the White House Press Office. Uh 0:15:43.680 --> 0:15:45.720 oh ed, they were brought a copy of that after 0:15:45.880 --> 0:15:49.040 a competing outlet printed it out and showed it to them. 0:15:49.880 --> 0:15:54.520 So Kevin, going forward ten, President Trump demand an unmasking 0:15:54.640 --> 0:15:58.680 of this person. Uh as he has so tweeted for 0:15:58.920 --> 0:16:02.360 the New York Times. Do uh? And if not, what's 0:16:02.440 --> 0:16:04.000 his recourse mean? What's it going to be like in 0:16:04.040 --> 0:16:06.480 the White House over the next week or two? Well, 0:16:06.520 --> 0:16:08.640 look in terms of the next twenty four hours. The 0:16:08.640 --> 0:16:10.920 President has urged in New York Times to reveal it source. 0:16:10.960 --> 0:16:13.840 I would find it hard. I highly doubt the New 0:16:13.880 --> 0:16:16.160 York Times is going to give up this source. Republicans 0:16:16.200 --> 0:16:18.920 on Capitol Hill and the supporters of the President have 0:16:19.120 --> 0:16:22.200 actually been in locks death with him. They've been echoing 0:16:22.240 --> 0:16:25.800 his criticisms at the Times and calling on the Times 0:16:25.800 --> 0:16:28.160 to reveal its source. So you know, it's caught in 0:16:28.160 --> 0:16:30.240 the back and forth right now, we don't have pulling 0:16:30.360 --> 0:16:32.920 to understand whether or not UH this is going to 0:16:33.000 --> 0:16:34.880 repose at all. The president is going to hit an 0:16:34.880 --> 0:16:38.840 aggressive midterm campaign cycle, and and hearing is on Capitol 0:16:38.880 --> 0:16:41.240 I mean, there were massive hearing yesterday on Capitol Hill, 0:16:41.520 --> 0:16:44.000 but all of that equipped by the by the reports 0:16:44.000 --> 0:16:47.000 of chaos coming out of six Pennsylvania. Kevin, I don't 0:16:47.000 --> 0:16:49.400 want to get too deep into the journalistic weeds, but 0:16:49.760 --> 0:16:52.200 something political wrote that I think is worth pointing out. 0:16:52.560 --> 0:16:55.800 There is a difference between protecting a source and protecting 0:16:56.200 --> 0:17:00.720 an anomalous author, isn't that? You know? I think that's 0:17:00.720 --> 0:17:03.680 a really really good point, And and to be honest, 0:17:03.720 --> 0:17:08.640 I think it's completely That political piece is really indicative Jonathan, 0:17:08.680 --> 0:17:10.800 of a lot of the conversations that many within the 0:17:10.840 --> 0:17:13.679 industry are having last night as well as this morning 0:17:13.760 --> 0:17:17.399 about just how The New York Times decided UH to 0:17:17.400 --> 0:17:20.480 to run this, and in particular the explanation or the 0:17:20.560 --> 0:17:24.800 lack thereof that they gave. Now, since not really giving 0:17:24.800 --> 0:17:27.920 an explanation but just posting this, they've come out with 0:17:27.960 --> 0:17:31.919 more information about how they relied on an intermediary UH 0:17:32.040 --> 0:17:35.439 to to bring forth this column to them, uh to 0:17:35.520 --> 0:17:39.000 protect everything about this source. But there's a lot of 0:17:39.080 --> 0:17:41.160 questions I think this morning that a lot of people 0:17:41.200 --> 0:17:43.760 are going to uh, a lot of conversations that are 0:17:43.760 --> 0:17:47.199 being had this morning and and uh and quite frankly, 0:17:47.200 --> 0:17:50.240 it is a very unique situation. It's unique number one, 0:17:50.560 --> 0:17:53.800 the content of the off ed and it's speak number two, 0:17:53.840 --> 0:17:57.480 as you point out about the time decision to publish 0:17:57.480 --> 0:18:02.080 something of this nature. Kevin's really really really important, important 0:18:02.119 --> 0:18:05.680 insight into this. Covin's really chief Washington correspondent covering this 0:18:05.920 --> 0:18:08.040 and everything else that's been going on in Washington, d C. 0:18:08.400 --> 0:18:24.359 For US, Thank you. Lawmakers in the U. S. Senate 0:18:24.359 --> 0:18:27.679 have raised the prospect of regulating social media platforms, and 0:18:27.720 --> 0:18:30.119 of course this came as the bosses of Twitter and 0:18:30.160 --> 0:18:33.479 Facebook testified that Russia had used their networks to interfere 0:18:33.480 --> 0:18:35.880 in elections in the US as well as other countries. 0:18:36.280 --> 0:18:39.879 Here are some of the highlights from yesterday's testimony. Russia 0:18:39.960 --> 0:18:42.920 used social media as part of the I quote, a 0:18:43.080 --> 0:18:49.240 comprehensive and multifaceted campaign too so discord undermine democratic institutions 0:18:49.920 --> 0:18:52.880 and interfere in US elections and those of our allies. 0:18:54.800 --> 0:18:57.720 We were too slow to spot this and too slow 0:18:57.760 --> 0:19:00.840 to act. We believe many people you is Twitter as 0:19:00.920 --> 0:19:04.480 a digital public square to gather from all around the 0:19:04.520 --> 0:19:07.879 world to see what's happening and have a conversation about 0:19:07.880 --> 0:19:12.399 what they see. Twitter cannot rightly serve as a public 0:19:12.440 --> 0:19:17.240 square if it's constructed around the personal opinions of its makers. 0:19:18.560 --> 0:19:21.600 We believe a key driver of a thriving public square 0:19:21.840 --> 0:19:25.840 is the fundamental human right of freedom of opinion and expression. 0:19:25.920 --> 0:19:29.520 If you ask whatever inauthentic accounts on Facebook, we believe 0:19:29.520 --> 0:19:31.560 at any point in time it's three to four percent 0:19:31.640 --> 0:19:35.520 of accounts. If we determine that people were subject to 0:19:35.680 --> 0:19:40.320 any um falsehoods or manipulation of any sort, we do 0:19:40.440 --> 0:19:43.000 need to provide them the full context of that. And 0:19:43.200 --> 0:19:46.040 this is an area of improvement for us and something 0:19:46.080 --> 0:19:48.040 that we're going to be diligent to fix. I'm deeply 0:19:48.080 --> 0:19:52.399 disappointed the Google, one of the most influential digital platforms 0:19:52.400 --> 0:19:55.400 in the world, chose not to send its own top 0:19:55.440 --> 0:19:59.880 corporate leadership to engage this committee. All right, let's bring 0:20:00.040 --> 0:20:03.320 Bloomberg Stara Fryer, usually based in San Francisco, but joining 0:20:03.359 --> 0:20:07.560 us today from Washington. Sara seems like Twitter, Facebook committed 0:20:07.600 --> 0:20:10.600 to trying to get better to explain how their algorithms 0:20:10.600 --> 0:20:14.200 are automated symptoms work and block certain content. They all 0:20:14.240 --> 0:20:17.640 agreed to work harder together. What is the next step though, 0:20:17.640 --> 0:20:22.000 in terms of actually doing something concrete, Well, this is 0:20:22.119 --> 0:20:24.119 this is sort of the culmination of a lot of 0:20:24.200 --> 0:20:28.240 investigation that the Senate Intelligence Committee has done into this 0:20:28.400 --> 0:20:31.159 issue with the companies, and I think maybe one of 0:20:31.160 --> 0:20:34.280 the more constructive steps because now the senators are very 0:20:34.440 --> 0:20:37.600 educated looking at this, and they're telling the tech companies, 0:20:37.960 --> 0:20:42.040 you need to provide more transparency for your users. When 0:20:42.080 --> 0:20:44.440 you're talking to a bot on Twitter, you should be 0:20:44.480 --> 0:20:46.680 able to know that you're talking to a bot. When 0:20:46.720 --> 0:20:50.960 you've been contacted by a campaign on Facebook that you 0:20:51.000 --> 0:20:53.080 may not see is run by a Ford agent, you 0:20:53.080 --> 0:20:55.359 should be able to know that. There should be more 0:20:55.600 --> 0:20:58.199 immediate feedback for the user in the moment and not 0:20:58.440 --> 0:21:01.840 months later saying we found this has happened to you. 0:21:02.520 --> 0:21:05.560 Uh and and the companies say that that's going to 0:21:05.680 --> 0:21:09.760 be very difficult to deliver. On Twitter even said that 0:21:09.800 --> 0:21:12.880 it's difficult for them to know what's what the difference 0:21:12.880 --> 0:21:15.800 between about account and a human account is they also 0:21:15.840 --> 0:21:18.920 have to work on issues like user verification to verify 0:21:19.000 --> 0:21:21.959 their identities. UM. They have to figure out what to 0:21:22.000 --> 0:21:25.359 do about UM. A lot of the ways that people 0:21:25.400 --> 0:21:29.240 interact with their service in terms of abuse and harassment 0:21:29.240 --> 0:21:32.199 in people's reporting of that, which is a very uh 0:21:32.680 --> 0:21:36.000 burdensome system for those people who are the victims. Yeah, 0:21:36.040 --> 0:21:38.800 and speaking ways of that users interact with the service. 0:21:38.800 --> 0:21:41.359 There was a recent Pew survey Sarah that found that 0:21:41.400 --> 0:21:44.560 only nine percent of Facebook users have downloaded their personal 0:21:44.720 --> 0:21:47.920 data from the company. But among the group those who 0:21:47.960 --> 0:21:52.840 did deleted the Facebook gap from their phone, seventy elected 0:21:52.840 --> 0:21:55.879 to adjust their privacy setting after downloading their data. So 0:21:56.160 --> 0:21:59.920 users are taking action and making some changes once they 0:22:00.320 --> 0:22:03.800 realize the extent to which Facebook has their data. We're 0:22:03.800 --> 0:22:06.160 starting to see some of that show up in the results. 0:22:07.000 --> 0:22:09.520 To what extent do you see the company's really coming 0:22:09.560 --> 0:22:12.240 back with new offerings or new ways to manage this 0:22:12.440 --> 0:22:17.280