Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: plus technology, politics, economics, all partnessing the power of Business
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Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. You know. As the Russian
Speaker 1: War in Ukraine continues on now in its seventh week,
Speaker 1: I couldn't help but being drawn back to the early
Speaker 1: March cover story of Bloomberg Business Week, one in which
Speaker 1: Bloomberg's Mark Champion wrote about Vladimir Putin and how after
Speaker 1: a quick victory did not seem likely, that his endgame
Speaker 1: seemed to be reducing Ukraine to rubble, and as we
Speaker 1: see the destruction that grows every day, that endgames seems inevitable. Meantime,
Speaker 1: Ukraine President Voladimir Zelensky on CBS is sixty minutes last
Speaker 1: night about what NATO nations have done so far for
Speaker 1: his country. I just want to say that for your
Speaker 1: support and support first of all for people, because all
Speaker 1: the people, all the nations, first of all, they push
Speaker 1: their leaders. It's not about it's not only about your country,
Speaker 1: it's about our country, it's about all the world. That
Speaker 1: was President of Ukraine Voladimir Zelinsky on sixty minutes yesterday.
Speaker 1: Let's get now to a crucial voice. You've heard her
Speaker 1: on our air waves before. We're talking about Natalie Darresco.
Speaker 1: She's former Ukraine finance minister. She served in that position
Speaker 1: from She was born here in the US, but she
Speaker 1: spent her after her twenties. After she was educated here,
Speaker 1: she moved back to Ukraine and lived there. She's now
Speaker 1: executive director of the Financial Oversight and Management Board for
Speaker 1: Puerto Rico. She joins us now on the phone from
Speaker 1: San Juan, Puerto Rico. Natalie, good to have you back
Speaker 1: with us. How are you, Thank you, TIV, thank you
Speaker 1: for having me. Hey. Well, you know it's been a
Speaker 1: few weeks since we've gotten to speak with you, and
Speaker 1: I just want to start with getting an understanding of
Speaker 1: what you're hearing for your friends who are on the
Speaker 1: ground in Ukraine. You spent so many years of your
Speaker 1: life there and you, you know, presumably continue to talk
Speaker 1: to folks there. What are you hearing? Absolutely, I have
Speaker 1: in touch all the time. I guess it's really important
Speaker 1: to note that with all of the news of the
Speaker 1: horrendous atrocities um and the impending what appears to be
Speaker 1: massive invasion in the East, Ukrainians are actually, you know,
Speaker 1: facing this with immense courage, and that courage is leading
Speaker 1: them to start rebuilding. So even in the towns of
Speaker 1: Ping and Buscha that have been destroyed recently, the work
Speaker 1: has begun already to remove debris, to build back the
Speaker 1: bridge that have been blown up, to restore, rebuild electricity,
Speaker 1: heat and water. The government is focused on getting planting started.
Speaker 1: This is the spring planting season for agriculture. As you know,
Speaker 1: Ukraine is one of the largest agricultural exporters in the world,
Speaker 1: and businesses are moving facilities to western Ukraine where the
Speaker 1: war has not had as much of an impact, and
Speaker 1: restarting manufacturing to the extent that they can. And so
Speaker 1: what you're seeing is this kind of response to the
Speaker 1: horrors and the tragedies with even greater courage and intent
Speaker 1: to we build, we knew and normalize, and so I
Speaker 1: think it's it's it's an amazing combination of human dignity encourage.
Speaker 1: It's like hard to even get your head around that, right.
Speaker 1: I'm kind of in awe right that they're planning for
Speaker 1: the future and you know, moving forward, um, with so
Speaker 1: many questions to yet to be answered. Natalie, I know
Speaker 1: your focus is, you know, economic and financial situations, but
Speaker 1: obviously all of that weaves into politics, military, economy, it's
Speaker 1: all interwoven. Having said that, how do you see this
Speaker 1: situation overall? Is the West at war with Russia already? Well,
Speaker 1: I think the important thing, Carol, is that Putin is
Speaker 1: that war with the West already, and he always has been,
Speaker 1: and he's been very here about it. And so whether
Speaker 1: or not any of our Western allies believe that they
Speaker 1: are or not, the fact is that Putin believes he is,
Speaker 1: and so we are all in this together. This is
Speaker 1: about his attempt is not only to destroy Ukraine, which
Speaker 1: is clear a genocide of the Ukrainian people, which he's
Speaker 1: had published in articles, but it's also about destroying the
Speaker 1: liberal world order. The democratic world that we all take
Speaker 1: for granted every day, and that enables us to live
Speaker 1: in in peace and freedom. And so we are fighting
Speaker 1: an autocrat who wishes to destroy our system. And that's
Speaker 1: why that's why you know, in the end, it really
Speaker 1: is up to all of the allies, up to the
Speaker 1: democratic nations of the world, to support Ukraine in this battle,
Speaker 1: because Ukraine has to prevail. If Ukraine does not prevail,
Speaker 1: we as a democratic world do not prevail. Well, that's
Speaker 1: what I wanted to ask you. And I was listening
Speaker 1: to the Ukrainian president on sixty minutes last night, and
Speaker 1: I'm just is there he can't give in on anything,
Speaker 1: Like I'm thinking if there are talks or peace talks,
Speaker 1: they've already given in right Ukraine. You were there with
Speaker 1: Crimea and the Carimean peninsula. So at this point, can
Speaker 1: the Ukrainian presidents say, yep, I'm willing to give up
Speaker 1: this or if he does, is that a loss for
Speaker 1: the West overall? And and then it just means we
Speaker 1: will probably see President Putin come back in another aggressive
Speaker 1: mood sometime and move and sometime in the future. I
Speaker 1: think that that's exactly what's happened we all kind of said,
Speaker 1: just sit back. After he invaded an illegally annexed Crimea,
Speaker 1: then he invaded Dunbas. We held them to the line
Speaker 1: for eight years, but the war continued and it was
Speaker 1: not enough. Putin's aims are not territorial. Russia's an enormous country.
Speaker 1: It doesn't require any more territory for its population or
Speaker 1: for its economy. This is not about territory. And um,
Speaker 1: I think the course thing for Western countries and for
Speaker 1: all of us is to enable Ukraine to prevail. And
Speaker 1: and that you know, that doesn't mean that they shouldn't
Speaker 1: be different out of talks, but it means that we
Speaker 1: should focus on giving Ukraine the weapons they need to
Speaker 1: defeat and to prevail in this war, the sanctions to
Speaker 1: reduce uh the Russian ability to finance the war, getting
Speaker 1: our businesses to boycott the Russian economy and not finance
Speaker 1: this war against Ukraine. And then with that leverage, if
Speaker 1: in with that leverage, when they're prevailing, talks can take
Speaker 1: place and something can be achieved in those diplomatic talks.
Speaker 1: So be it piece is always welcome, but the first
Speaker 1: thing to focus on is not the talks and the
Speaker 1: outcome of the talks. The first thing needs to focus
Speaker 1: on getting Ukraine strong enough to prevail with weapons, sanctions
Speaker 1: and boycott and then uh and then hoping that that
Speaker 1: enables talks to be successful. Natalie Darresco stand stand by,
Speaker 1: because we're gonna come back with you. We're gonna do
Speaker 1: some news and then we're gonna come back with the
Speaker 1: former Ukraine finance minister. She served in that role from sixteen.
Speaker 1: She's executive director of the Financial Oversight and Management Board
Speaker 1: for Puerto Rico. Joining us from San Juan in Puerto Rico.
Speaker 1: We're talking Natalie Darresco. Yeah, curious to as the Austrian
Speaker 1: chancellor meeting with President Putin, who are the global leaders
Speaker 1: that he might listen to in this situation. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right,
Speaker 1: want to get back to our guest with us is
Speaker 1: Natalie Jarresco, former Ukraine Minister of Finance. That was from
Speaker 1: twenties sixteen. As we remind you, during that initial Russian
Speaker 1: invasion and occupation of Ukraine. She's also the executive director
Speaker 1: of the Financial Oversight and Management Board for Puerto Rico.
Speaker 1: And you might recall we mention this too, that she
Speaker 1: was the subject of a Bloomberg Business Week story back
Speaker 1: in It was entitled the American Woman who stands between
Speaker 1: Putin and Ukraine. She's still with us on the phone
Speaker 1: from San Juan, Puerto Rico. Hey, Natalie, does anybody anymore
Speaker 1: stand between the world and Vladimir Putin? Well, Carol, what's
Speaker 1: a good question, Um, does anyone standing between? I think
Speaker 1: that are those who are trying not to choose, and
Speaker 1: I think that it's it's it's quite sad if you
Speaker 1: look at a country like India, one of the largest
Speaker 1: greatest democracies in the world. Um, they're abstaining on critical
Speaker 1: UN votes, and they are continuing to trade with Russia.
Speaker 1: They're continuing to buy Russian oil, They're continuing to avoid
Speaker 1: applying any sanctions. I think closer to home, to be
Speaker 1: frank with you, I'm disappointed that so many companies, so
Speaker 1: many American companies, companies like City and Mars and Coke
Speaker 1: Industries refused to boycott the Russian market, continue to make
Speaker 1: announcements that they feel they have a need to continue
Speaker 1: serving the Russian people in the Russian market at a
Speaker 1: time when their tax revenues are going directly into financing
Speaker 1: this war. And I think that it's it's it's harmful,
Speaker 1: it's pitiful, especially when US taxpayers are being asked to
Speaker 1: contribute to fighting the war and defending Natalie. Do you
Speaker 1: think the sanctions work? And I asked that looking at
Speaker 1: the data we got a couple of weeks ago that
Speaker 1: show how high Putin's approval rating is now more in
Speaker 1: a recent poll, do the sanctions seemed to be working?
Speaker 1: I think the sanctions are working, but we don't have
Speaker 1: enough of them. So the sanctions worked to crimp the
Speaker 1: financial system. Uh, the problem is that we haven't done enough,
Speaker 1: and so we've We've sanctioned a handful of banks. We've
Speaker 1: removed a handful of the banks off the swift system,
Speaker 1: but not all three hundred. I'm of the belief that
Speaker 1: every day counts and we need to do much broader,
Speaker 1: much deeper sanctions. I think it's important the export controls
Speaker 1: are working. You're seeing that in the defense industry in Russia.
Speaker 1: Some um, some items they're not being able to be
Speaker 1: manufactured anymore because they don't have the imported parts. So
Speaker 1: over time some of the sanctions will work. I think
Speaker 1: the challenge is that it's not working fast enough, and
Speaker 1: for for Ukrainians every day thousands of lives and immense destruction.
Speaker 1: So there's much more we can do in sanctions, not
Speaker 1: just in the banking sector, but clearly in the energy sector,
Speaker 1: and that has a lot to do with europe Um
Speaker 1: purchasing oil and gas. US europe purchasing oil and gas
Speaker 1: is the single greatest financing tool of Russia and until
Speaker 1: that ceases, that that that money continues to be used
Speaker 1: to keep the Russian economy alive. I mentioned that the
Speaker 1: Austria Chancellor is meeting with Vladimir Putin. Who if any
Speaker 1: one or of of global leaders that are out there
Speaker 1: does have sway with Vladimir Putin, you know, I haven't.
Speaker 1: I haven't seen anyone to have that kind of sway.
Speaker 1: I'm always hopeful every conversation, uh, you know, has a
Speaker 1: brain of hope. I think President Makhan has faced uh
Speaker 1: you know, had multiple conversations, a long conversations and got nowhere,
Speaker 1: not even in the most basic attempts to establish a
Speaker 1: humanitarian corridor out of Maryupo, a city in the southeast
Speaker 1: of Ukraine that has been absolutely destroyed and where people
Speaker 1: are unable to leave safely. UM. So I don't believe
Speaker 1: that that the Austrian Chancellor will have a greater effect.
Speaker 1: It doesn't mean you shouldn't try. Everyone's try, But I
Speaker 1: don't believe that those conversations are timely right now, in
Speaker 1: that Putin is not feeling the pressure yet of the sanctions.
Speaker 1: He's not yet feeling the pressure that he needs to
Speaker 1: feel in order to take this conversation seriously, What about
Speaker 1: um President of China Modi of India. Could they have
Speaker 1: some sway? Should they have some sway? I would guess
Speaker 1: the president she had, given the close friendship that he
Speaker 1: and Putin apparently have, UH, potentially could have that type
Speaker 1: of effect. And I would hope that the Chinese over
Speaker 1: time start to see that although they've been more or
Speaker 1: less supportive of of Putin in this war, that this
Speaker 1: is not going to help the Chinese, and that now
Speaker 1: the global economy and the unity that the Western democracies
Speaker 1: have shown is something that I don't think they all expected. Uh.
Speaker 1: And I don't believe that this continued war is good
Speaker 1: for the global economy. It's certainly not good for food prices.
Speaker 1: Uh see, it's certainly not good for steel prices, It's
Speaker 1: not good for a variety of things that both the
Speaker 1: Chinese and the Indians US should be looking forward and
Speaker 1: understanding that the cost, the oupen global cost of this
Speaker 1: war is going to be great for them, not only
Speaker 1: for Ukraine. Natalie, we only have thirty seconds left. But
Speaker 1: about six weeks ago you joined us, and you were
Speaker 1: optimistic when a lot of people were pessimistic about the
Speaker 1: Ukrainians defending Kiev. What's the conversation that we're having six
Speaker 1: weeks from now. Uh, definitely optimistic that Ukraine encourage fighting
Speaker 1: and Ukrainian forces will prevail. The unfortunate thing is is
Speaker 1: what the cost will be of that prevailing. But the
Speaker 1: Ukrainian people are fighting for their very existence and there
Speaker 1: is no other route. Thank you so much, Natalie for
Speaker 1: for joining us. And uh, certainly what you are seeing
Speaker 1: on the ground, what you're hearing. I think it's remarkable
Speaker 1: that they're planting. We've talked about, you know, the importance
Speaker 1: to the grain market right and feeding the world, and
Speaker 1: that's the important part of their economy and interesting to
Speaker 1: see to him them kind of moving forward there on that.
Speaker 1: You know, I encourage everyone to go back and read
Speaker 1: that cover story that Juan Natalie Duresco just learning so
Speaker 1: much about what she's done in Ukraine and her background,
Speaker 1: really gets a good understanding of what her role was
Speaker 1: today too. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. I
Speaker 1: want to get to today's Bloomberg Big Take. It's a
Speaker 1: story about how, after billions of dollars being spent in
Speaker 1: a decade of time, going by the Amazon drone delivery
Speaker 1: programmed him still not off the ground. Yeah. I couldn't
Speaker 1: put this one down. It's by Spencer Sober, and it
Speaker 1: is I read it last night. It came out yesterday
Speaker 1: at five pm, and I read it. You know, I
Speaker 1: saved it for last night and I stayed up until
Speaker 1: the end. Uh and Matt Day wrote this story. Spencer
Speaker 1: Sober is technology and e commerce reporter at a Bloomberg News.
Speaker 1: He joins us now on the phone from Seattle. Spencer,
Speaker 1: I actually remember it like it was yesterday. It was
Speaker 1: night before Cyber Monday. It was the Sunday after Thanksgiving,
Speaker 1: Jeff Bezos goes on sixty minutes he does an interview
Speaker 1: with Charlie Rose and he says, within the next few years,
Speaker 1: we are going to be able to get drone packages
Speaker 1: deliver via drones. Yet, Spencer, here we are and it
Speaker 1: hasn't happened yet. Yeah, you know what happened? All right? Well? Yeah,
Speaker 1: I mean, they they spent a lot of money, um,
Speaker 1: and a big part of the problem is that they
Speaker 1: they tried to think of the ideal use case, which
Speaker 1: would be a drone that can go about fifteen miles
Speaker 1: around trip and carry a payload of about five pounds.
Speaker 1: So right now they've got a drone design that's about
Speaker 1: eighty five pounds, which is huge compared to some of
Speaker 1: the rival things out there that are significantly smaller. But
Speaker 1: they needed that to pack a sufficient battery and sufficient
Speaker 1: you know, with sufficient power to fly that distance and
Speaker 1: carry that payload. And what's happened is that they had
Speaker 1: to go with this tricky design that kind of fluctuates
Speaker 1: between going up and down like a helicopter and going
Speaker 1: forward like an airplane, and they just had a really
Speaker 1: difficult time nailing that design. And one of the things
Speaker 1: we highlighted in the story was a really bad brush
Speaker 1: fire last summer that happened after one of these things malfunctioned.
Speaker 1: And then they're supposed to be different safety mechanisms that
Speaker 1: kick in after a motor failure. But this thing has
Speaker 1: six propellers on it, and one of the motors conked
Speaker 1: out and it couldn't recuperate it recuperate from that, and it,
Speaker 1: you know, carremed a hundred and sixty feet down from
Speaker 1: the sky and crashed into the ground and ignited this
Speaker 1: big brush fire. And this is at a time when
Speaker 1: Amazon is trying to prove to the Federal Aviation Administration
Speaker 1: that these things are safe. So, um, yeah, there's still
Speaker 1: still a long way off, a long way off. And
Speaker 1: we know there's a lot of competition because Amazon is
Speaker 1: not the only one looking to put drones into the sky.
Speaker 1: Let's bring in Bloomberg Business Week editor Joe Webber here
Speaker 1: in our interactive broker studio. Uh, what's up to out
Speaker 1: for you here? Well, you know, I just think it's
Speaker 1: it is one of those great corporate dramas that you
Speaker 1: have to be curious about because it's Amazon, and like
Speaker 1: anything happening inside the Amazon Uh, you know, executive suites
Speaker 1: is interesting. But that competition that Carol mentioned Spencer, who
Speaker 1: who are the other competitors who are attempting to crack
Speaker 1: this or who already have even Well, you have a
Speaker 1: ton of startups. Uh, you also have Google, you know
Speaker 1: Google's wing Um, you have ups Walmart. There's a lot
Speaker 1: of deepocketive rivals poking at this and and in fairness
Speaker 1: to Amazon, we have to look at the capabilities. So
Speaker 1: some of the startups and things are looking at maybe
Speaker 1: like a a function where it's on a hospital campus
Speaker 1: or a corporate campus or a college campus, you know,
Speaker 1: where there might be less risk of going over um,
Speaker 1: you know, uninformed participants where which would happen in more
Speaker 1: of a public setting. But there's just a lot of
Speaker 1: people looking at at the potential use cases. And what
Speaker 1: Amazon is doing is being the most ambitious and saying
Speaker 1: we want to be able to deliver as many people
Speaker 1: using this technology as possible and deliver the widest variety
Speaker 1: of products as possible. So how does the f feel
Speaker 1: about all this? Well, they haven't commented specifically on what's
Speaker 1: happened with Amazon. They certainly had some reports and what
Speaker 1: was telling was the in the brushwire crash. They did
Speaker 1: question the airworthiness of this, of this vehicle that Amazon's
Speaker 1: put together, this pound um drone with with six propellers,
Speaker 1: because because so many things failed. You know, you generally
Speaker 1: planes are designed to be able to still maneuver after
Speaker 1: something fails and still safely land after something fails, and
Speaker 1: this thing was just a complete breakdown of all of
Speaker 1: those all of those systems, which was alarming to the
Speaker 1: f a A. And so that is a big setback
Speaker 1: because basically the the f a A, they they're learning
Speaker 1: from industry right now. They're looking at all the different
Speaker 1: folks that are conducting tests, and they're assessing the safetiness
Speaker 1: of all of the different vehicles and and as they're assured,
Speaker 1: then they'll gradually let these things be tested in more
Speaker 1: populous areas. But as it stands, Amazon still relegated to
Speaker 1: UH to the boonies. You know, it's doing tests out
Speaker 1: in eastern Oregon where you know, which is largely agricultural
Speaker 1: areas surrounding this this airport in a in a very
Speaker 1: sterile environment. What did you learn about Amazon's commitment to
Speaker 1: this moving forward? Because the business opportunity spencer, as you write,
Speaker 1: is absolutely huge. What it could do is essentially eliminate
Speaker 1: the need for paying delivery drivers and get consumers getting
Speaker 1: their their packages within thirty minutes or less in much
Speaker 1: of the country. Yeah, I mean that's the big commitment
Speaker 1: is uh. Bezos in particular has always been after this
Speaker 1: notion of making Amazon is as convenient as a quick
Speaker 1: trip to the store. And depending on where you live it, uh,
Speaker 1: it still doesn't meet that. You know, I I live
Speaker 1: in the suburbs of Seattle, and I've got a Target,
Speaker 1: and I've actually got two Targets and two Walmarts in
Speaker 1: a costco, all within a fifteen and drive, you know, so,
Speaker 1: so ordering on Amazon is still taking longer to get
Speaker 1: that item if I can find it at a store nearby.
Speaker 1: This is the answer to that. And uh, you know,
Speaker 1: if you can get it down to down to thirty minutes.
Speaker 1: But again it's a question of, um, how broadly it
Speaker 1: can be deploted, deployed, because the only thing that justifies
Speaker 1: this investment, it's not a worthwhile investment if you can
Speaker 1: deliver something to a farmer here and there. You know,
Speaker 1: you need to be able to deploy this in densely
Speaker 1: populated suburban areas and potentially even cities, and that's the
Speaker 1: only way it makes sense. And so that's the uh,
Speaker 1: you know, the big question right now is will that
Speaker 1: ever happen? Spencer, You guys UM did an investigation thorough
Speaker 1: internal documents, government reports. What was the takeaway? Do you
Speaker 1: feel from the conversations and the stuff that you read
Speaker 1: that you do feel like Amazon is valuing maybe production
Speaker 1: over safety here. Well, that's the feeling of many of
Speaker 1: the people who are on the front lines doing these tests.
Speaker 1: And that's where there's tension. Is there's people and in
Speaker 1: offices who earn the most money, um, and have goals
Speaker 1: that they have to make and they're you know, cracking
Speaker 1: the whip. And then there are people out on the
Speaker 1: front lines who are conducting these tests and seeing these
Speaker 1: things crashing down, and a lot of them are just saying, look,
Speaker 1: I would not want this thing flying over my house
Speaker 1: or my children, um. And and some concerns there and they,
Speaker 1: I mean, they it's the point they even like, we'll
Speaker 1: bring their vehicles and duck into their cars. Uh. You know,
Speaker 1: they have their their cars on standby just in case
Speaker 1: they need something to to take cover in. And they
Speaker 1: you know, those are alarming things for something that, um,
Speaker 1: they're trying to get more approval to do testing more
Speaker 1: closer to people and be on the line of site
Speaker 1: of of drone operators and that sort of thing. That it's, uh,
Speaker 1: it's still a long way off. What do you most
Speaker 1: look forward to getting delivered by drone really quickly? I nothing.
Speaker 1: I like to how eighty five pounds flying around me air.
Speaker 1: I'm a little a little caustious to Spencer. Thank you.
Speaker 1: Spencer Soaper, technology and e commerce reporter at Bloomberg News.
Speaker 1: Check out his stories of Bloomberg Big Take in our
Speaker 1: thanks to Jill Webber, editor of Bloomberg business Week. This
Speaker 1: is Bloomberg business Week. You're listening to Bloomberg Radio. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. So we've been
Speaker 1: watching shares of Tesla. Let me just bring them. Well,
Speaker 1: they were down pre market on this news you were.
Speaker 1: They're still down about four A few things. We had
Speaker 1: Tesla exporting just sixty cars produced at the shang Hi factory.
Speaker 1: That was in March, a record low, A strong domestic
Speaker 1: demands sucked up most of the output. And then, of
Speaker 1: course you have what is a most read on the
Speaker 1: Bloomberg about Elon muss saying thanks no thanks to a
Speaker 1: Twitter board seat, Yeah, rejecting that offer to a join
Speaker 1: the board in a surprise twice. So a week ago
Speaker 1: we were talking about him buying more than nine percent
Speaker 1: of outstanding shares of Twitter, and a week later a
Speaker 1: lot has changed. Let's get into it with Dana Hole,
Speaker 1: technology reporter at Bloomberg. Here she joins us on the
Speaker 1: phone from our San Francisco bureau. Okay, Dana, the plot pickens. Uh,
Speaker 1: this is never a dull moment in your world, whether
Speaker 1: it's Tesla, Twitter, or Elon Musk or all of the above. Um,
Speaker 1: what does Elon Musk? What can he do with Twitter
Speaker 1: now that he is no longer? Uh? I don't want
Speaker 1: to say on the board, but like a candidate for
Speaker 1: the board, or we know he's not joining the board now. Well,
Speaker 1: now maybe that's a better way to put it. Now
Speaker 1: he can buy a lot more shares. I mean there
Speaker 1: was a you know, so when he was offered the
Speaker 1: board seat, there was a cap in place where he
Speaker 1: could know he couldn't buy more than fourteen point nine percent.
Speaker 1: Now that he's not joining the board, I mean, there's
Speaker 1: no limit to him of buying and buying additional shares.
Speaker 1: So it's led a lot of speculation like what is
Speaker 1: Elon doing? Is he going to do like a hostile takeover?
Speaker 1: Like what you know, I mean, we would we would
Speaker 1: love to know. We're trying to, you know, very eager
Speaker 1: to get to the bottom of what exactly happened. And
Speaker 1: it's the whole timing of everything was just so strange.
Speaker 1: It's like he'd closes the stage in the sec filoting,
Speaker 1: he's offered a board seat, you know, and then late
Speaker 1: last night, the CEO of Twitter says, well, actually he's
Speaker 1: not joining the board. But then if he went to
Speaker 1: Twitter's website, they already had him listed as a board member.
Speaker 1: And it's like, did he just not want to go
Speaker 1: through the training to be a board member? Did he?
Speaker 1: You know, bristled the idea of a background check, Like
Speaker 1: the whole wording of the state was very odd. Okay,
Speaker 1: so you know, and I look at the rich go
Speaker 1: on the Bloomberg terminal. Elon Musk is the wealthiest person
Speaker 1: in the world. He's got an net worth of two
Speaker 1: sixty point one billion dollars. Just today, with Tesla's decline
Speaker 1: in stock price, he's worth seven point five billion dollars less.
Speaker 1: Does he care about his investment in monetary value or
Speaker 1: is he just having fun here because he has so
Speaker 1: much money he could literally afford to buy all of
Speaker 1: Twitter and do whatever he wants with it. I mean, yeah,
Speaker 1: I think that he's got you know, he's got a
Speaker 1: lot of money and he has He is very interested
Speaker 1: in the media. I mean he always has been. He is,
Speaker 1: you know, he reads a lot. He is the most active,
Speaker 1: one of the most of users of the service. He
Speaker 1: jokes around about having a news site called Pravada. You know,
Speaker 1: he you know, I mean he's he's like, he's you know,
Speaker 1: I think he's he's genuinely interested in this. But why
Speaker 1: what led to the turnaround about like thanks but no thanks? Um?
Speaker 1: I don't really understand what happened there, Like did he
Speaker 1: just you know, was he just board? I mean, did
Speaker 1: he just sort of decided like, actually, I'm really busy
Speaker 1: writing my other four companies or like or or was
Speaker 1: there such an uproar within Twitter that that that they
Speaker 1: were going to make it tougher for him? I don't
Speaker 1: really know, We don't really know exactly what happened, but
Speaker 1: but this certainly paves the way for him to continue
Speaker 1: to be an influence. I mean, you know, he's not
Speaker 1: encumbered by a board seed. He could just be an
Speaker 1: activist shareholder. Well, you know what exactly happened, Danna, It's
Speaker 1: that he actually now wants to get into mining and
Speaker 1: refining lithium and all that good stuff. I mean, how
Speaker 1: do you What I left talking about you is you're
Speaker 1: someone who has covered him for a long time and
Speaker 1: seeing his trajectory and the growth of him and things
Speaker 1: coming out and or him saying things and trying kind
Speaker 1: of weed through to find out what sticks and what doesn't.
Speaker 1: How do you kind of determine what sticks and what
Speaker 1: doesn't in this environment right now? I mean, that's it is.
Speaker 1: It is a challenge because you know, I know as
Speaker 1: much as everyone else does in terms of like, you know,
Speaker 1: there's sort of what he tweets and then there's what
Speaker 1: he says. So for example, I think what's fascinating is
Speaker 1: he spent the whole weekend tweeting about his plans for Twitter,
Speaker 1: you know, the Blue Service and they should turn the
Speaker 1: headquarters into a homeless shelter. And then we find out
Speaker 1: late late Sunday night that he actually turned the board
Speaker 1: seat down on Saturday. And now he's deleted some of
Speaker 1: those tweets about Twitter. So, like the whole TikTok on
Speaker 1: the timing of all of this, I just fascinated as
Speaker 1: to what what sort of led him to turn down
Speaker 1: a seat then continue to kind of criticize the platform
Speaker 1: then delete the tweets, like I mean, and I don't
Speaker 1: really know. I mean, it's not like I'm talking to
Speaker 1: him on the phone. I mean, so give the ring um.
Speaker 1: But I just think it's like, you know, this is
Speaker 1: a man who has a wide variety of interests and
Speaker 1: he hyperfixates and but then he also moves on and
Speaker 1: you know it's like flavor of the month. So I mean,
Speaker 1: so that he's always been had his hand in many
Speaker 1: different pots and like this is just another one. And
Speaker 1: I think that his wealth and his um, I mean,
Speaker 1: he's definitely empire building for sure. Well, Dan, I'm seeing
Speaker 1: a lot of tweets today from Twitter employees who have
Speaker 1: been holding back with how they felt about it. In
Speaker 1: some primity prominent ones sort of reading a sigh of
Speaker 1: relief here. Can you explain what's going on internally on Twitter? Yeah,
Speaker 1: I mean I think what you're seeing people saying publicly
Speaker 1: is that they, you know, they're relieved that he's not
Speaker 1: joining the board. That he would have had a real
Speaker 1: impact on their culture. And you know that the Twitter
Speaker 1: culture is kind of unique, and how do you absorb
Speaker 1: a big personality like Ellen. I mean, he's you know,
Speaker 1: he would dominate no matter what. And um, so I
Speaker 1: think that maybe some police who didn't feel didn't feel
Speaker 1: comfortable speaking publicly about him being appointed to the board
Speaker 1: or or uh, you know, nominated for the board, are
Speaker 1: now kind of saying publicly that they're glad it's not happening. Hey,
Speaker 1: just quickly, twenty seconds the news out of China the
Speaker 1: cars produced at the Shanghai factory. Just really quickly. What
Speaker 1: do we need to know? Well, the Shaka factory is
Speaker 1: so closed as far as I know, because of this
Speaker 1: COVID lockdown. So I think, um, it'll be really interesting
Speaker 1: to see how that impacts production in the quarter that
Speaker 1: we're currently in. Alright, good stuff as always, Danna, Thank you,
Speaker 1: Danna Hall. She is technology put up Bloomberg News on
Speaker 1: the phone from our San Francisco bureau. As we mentioned,
Speaker 1: watching shares of Twitter just one of the kind of
Speaker 1: big tech if you will, names under pressure stocks down
Speaker 1: about four three seven cents a share. Stock is down
Speaker 1: about seven percent so far this year. You are listening
Speaker 1: to Bloomberg Radio. Yeah, but you let me drive, all right? Please? Right?
Speaker 1: I want to dry good question this drive to the
Speaker 1: clothes on Bloomberg Radio. All right. I'm just gonna say,
Speaker 1: if Monday is any example, we're gonna be like wrecked
Speaker 1: by the time we get to Thursday. It's a short
Speaker 1: and holiday week. But you and I are both like
Speaker 1: you know, so the the exchanges are closed on Friday.
Speaker 1: That's why we're not here on Friday. But a lot
Speaker 1: of people, including my wife, who works for the city,
Speaker 1: don't have the day off. Well that's what happens when
Speaker 1: you work in anything connected to the financial market. Yeah, sorry, wife, Yeah, hello,
Speaker 1: But here's here's why that's notable, because I feel like
Speaker 1: she has so many other days off that I don't get. Well,
Speaker 1: it's a market. I always think at the beginning of
Speaker 1: the year, I'm always like, okay, now what our market days?
Speaker 1: Market holidays are like the bare minimum? I mean she
Speaker 1: works for the city, so she gets quite a few
Speaker 1: more holidays, but not this one exactly. All right, folks,
Speaker 1: we are hovering near a lowers. You hear Charlie Pellett
Speaker 1: talk about it. We really have seen uh, kind of
Speaker 1: some selling here into the clothes. You've got about nine
Speaker 1: minutes left in the trading session. It's a week that's
Speaker 1: gonna be chock full of economic news. We've talked about
Speaker 1: it a lot. That's cp I print tomorrow. It is
Speaker 1: expected to be a rough one. But as our Bloomberg
Speaker 1: Economics team have been writing, Tim, you and I've been
Speaker 1: talking about it, We've read it, uh that this could
Speaker 1: maybe be peak inflation, and then maybe we start to
Speaker 1: see inflations start to normalize. I think certainly a lot
Speaker 1: of whatever that is, we welcome that news. Let's see
Speaker 1: what our next guest has to think about it. Megan
Speaker 1: Hornaman is chief investment officer at Verden's Capital at Advisors.
Speaker 1: Megan joins us on the access line from Hunt Valley, Maryland. Megan,
Speaker 1: how are you. I'm great, how are you? We're doing well?
Speaker 1: Thanks a lot um markets not doing so well today.
Speaker 1: I've seen quite a bit of selling into the clothes here,
Speaker 1: and I'm wondering how you're reading into it. I think
Speaker 1: your prior guests also mentioned that that there is a
Speaker 1: lot of economic data coming out this week, not just
Speaker 1: different c p I p p I reports, but also
Speaker 1: keep in mind retail sales will be out later this week.
Speaker 1: You combine that with an ECB meeting as well, and
Speaker 1: then the kickoff to earning season, there's a lot for
Speaker 1: investors to digest right now. Well, they've been kind of
Speaker 1: whips all this quarter to start anyway, Megan, earning season
Speaker 1: is definitely on your mind. We were reading through your research, Um,
Speaker 1: how can that? And our Gina Martin Adams of Bloomberg Intelligence,
Speaker 1: who follows the equity markets, she too has been talking
Speaker 1: about earnings estimates, how they've been going up for the
Speaker 1: first quarter but also the second quarter and third quarter,
Speaker 1: and that how this could really be, you know, certainly
Speaker 1: maybe a game change or when it comes to sentiment,
Speaker 1: what are your expectations for earnings as they get underway?
Speaker 1: Of course with a big bank starting this week, so
Speaker 1: the the estimates are for the growth to slow considerably
Speaker 1: compared to what we saw last year. But that's okay. Um,
Speaker 1: typically earnings to end up beating by you know, three
Speaker 1: to five percent, so we think it can be a
Speaker 1: solid earning season. But this is really the point where
Speaker 1: investors can also just get back to fundamentals. The first
Speaker 1: quarter and even starting off, you know, the past couple
Speaker 1: of weeks, we've seen sentiment really tested by a complete
Speaker 1: pivot by the Federal Reserve. Um. We've also seen the
Speaker 1: war in Russian Ukraine not ending, inflation and issue. So
Speaker 1: we have to get back to the fundamentals and actually
Speaker 1: listen to the CEOs of what they're seeing on the
Speaker 1: grounds as far as the future about corporate earning. Okay,
Speaker 1: so what specifically are you going to be looking to
Speaker 1: hear from CEOs? I always like you learn hearing from
Speaker 1: the banks because they have such a good idea of
Speaker 1: how the economy is. They have all that real time
Speaker 1: data that shows credit card spend and what their customers
Speaker 1: are purchasing. What do you look for specifically, Yes, So
Speaker 1: from the bank perspective, we we've already seen consumer credit rise.
Speaker 1: Last week we saw one of the biggest jumps on
Speaker 1: record and consumer credit, so we know that consumers are
Speaker 1: starting to feel the paine of higher prices and they
Speaker 1: are turning to credit card debt, so you get that
Speaker 1: indication from financials, and will also look to see what
Speaker 1: kind of losses they take from any exposure to Russian
Speaker 1: businesses as well. But some of the more important things
Speaker 1: that we're going to look at is regarding the supply
Speaker 1: chain or company seeing any thawing in that, because there
Speaker 1: have been some initial signs them. Economic data that we've
Speaker 1: seen with some optimism that we might see a turnaround
Speaker 1: here in the second half of this year cannot help
Speaker 1: because that can also maybe helpily be some of the
Speaker 1: inflation pressures. So we'll look from that perspective as well.
Speaker 1: What's unusual in the market trade for you right now? Unusual?
Speaker 1: I think right now we're seeing that energy prices have
Speaker 1: really come down quite a bit. You're seeing oil prices
Speaker 1: come down significantly, but you're not seeing that also coincide
Speaker 1: with a decline in inflation expectations. So there's some disconnect
Speaker 1: there just from the economic standpoint, And what does that
Speaker 1: tell you? You You know, there's a little disconnects. It's funny.
Speaker 1: I was reading something uh In earlier about just kind
Speaker 1: of various disconnects within the market, whether it's between what
Speaker 1: bonds and the stock market are telling you and and
Speaker 1: other things. When we do have kind of disconnections in
Speaker 1: our financial markets, is it just kind of a sign
Speaker 1: of uncertainty, We're just planning, not quite sure what comes next. Well, yes,
Speaker 1: it can be a sign of speculation. But I do
Speaker 1: think if ultimately things revert to where they needed they
Speaker 1: should be. So I do think that if energy prices
Speaker 1: continue to come under pressure, that you will see some
Speaker 1: of the inflation expectations pull back. Right now, there's a
Speaker 1: lot of information this week that will get and more
Speaker 1: indication to see where we are in inflation. Your prior
Speaker 1: guests had mentioned that we might be get into the
Speaker 1: peak growth levels. I do think we will see peak
Speaker 1: growth levels this year, but we will be settling into
Speaker 1: a more higher inflationary environment. So you what you used
Speaker 1: to be careful of how you're exposed in your portfolios,
Speaker 1: making sure that you're looking at those areas that aren't
Speaker 1: overly priced right now. That's the one thing that we
Speaker 1: would recommend investors to do. Uh specific names or or
Speaker 1: or sectors that you can give us, at least in
Speaker 1: the short term. I think one thing that you have
Speaker 1: to look at, and this this very high period of
Speaker 1: uncertainty is are you position the true way that you
Speaker 1: want to be. So some of the areas that have
Speaker 1: been really beat up. Look at some of these, you know,
Speaker 1: this small cap area, the mid cap area, the international area.
Speaker 1: These have significantly lagged actually the large cap value side
Speaker 1: of the market this year. Look at those. Make sure
Speaker 1: that your asset allocation is in line with where you
Speaker 1: want to be, because I would guess that the majority
Speaker 1: of these areas are out of line. So it may
Speaker 1: be a good time maybe sell some of those managers
Speaker 1: or areas that have done so well to bring them
Speaker 1: back in line with where your asset allocations should be,
Speaker 1: and maybe buying some those really beaten down areas of
Speaker 1: the market. What about fixed income, What's what's the smart
Speaker 1: play right now? You gotta stay short and defensive with
Speaker 1: this income. I mean, that's the only thing from a
Speaker 1: duration standpoint. And we have some some weakness in the
Speaker 1: credit markets and investment grade and high yield, but not
Speaker 1: enough to warrant really taking some sort of a tactical
Speaker 1: move there. Eventually yields will rise enough that they'll start
Speaker 1: to compete with some of the returns in the equity market.
Speaker 1: I just don't think we're there right now. So for now,
Speaker 1: stay defensive, sure term floating grain instruments, and then just
Speaker 1: keep an eye on credit to see if that does
Speaker 1: present some opportunities. Okay, Uh, Carol mentioned the CPI. We
Speaker 1: get the number tomorrow? Is this the peak for inflation?
Speaker 1: Do we get it from March? I think that you know,
Speaker 1: whether it's mortar well, I think we still probably have
Speaker 1: a couple of our minds. I mean maybe and with
Speaker 1: with some so i'd surprise. Remember, we're not really rolling
Speaker 1: off the energy yet. That's what second half of the
Speaker 1: year story. But I do think in the second half
Speaker 1: of this year that we'll be looking at very different
Speaker 1: your your growth numbers. Yeah, that's what lorretta meister Mester said,
Speaker 1: maybe later this year and certainly into next year, that
Speaker 1: maybe we start to see kind of a more like
Speaker 1: two percent number, that magic number. Big difference from where
Speaker 1: we are. Hey, we gotta run. Megan Horneman, thank you
Speaker 1: so much, Chief investment officer at the wealth advisory and
Speaker 1: multi family office firm Verdon's Capital, on the phone from
Speaker 1: Hunt Valley, Maryland. Thanks for listening to Bloomberg Business Week.
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