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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is Bloomberg Intelligence with Alex Steinhl and Paul'sweenye.

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Speaker 3: The real app performance has been the US corporate high yield.

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Speaker 4: Are the companies lean enough? Have they trimmed all the fats?

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Speaker 3: The semiconductor business is a really cyclical business.

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Speaker 2: Breaking market headlines and corporate news from across the globe.

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Speaker 4: Do investors like the M and A that we've seen?

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Speaker 1: These are two.

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Speaker 3: Big time blue chip companies.

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Speaker 4: The window between the peak and cut changing super fast.

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Speaker 2: Bloomberg Intelligence with Alex Steinhl and Paul'sweenye on Bloomberg Radio.

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Speaker 3: On Today's Bloomberg Intelligence Show, we dig inside the big

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Speaker 3: business stories impacting Wall Street in the global markets.

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Speaker 4: Each and every week, we provide in depth research and

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Speaker 4: data on some of the two thousand companies and one

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Speaker 4: hundred and thirty industries our analysts cover worldwide.

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Speaker 3: Today, we'll look at a story about how seventy two

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Speaker 3: hours obliterated our Caago's capital management founder Bill Wang's thirty

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Speaker 3: six billion dollar fortune.

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Speaker 4: Plus, we're going to take an in depth look at

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Speaker 4: the global carbon market.

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Speaker 3: First, we dive into big tech and Apple. Apple's anti

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Speaker 3: trust feud with the European Union over allegedly illegal practices

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Speaker 3: on the App store Intensified.

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Speaker 4: For more on this, we were joined by Tamlin based in

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Speaker 4: Bloomberg Intelligence technology analysts, and we first asked Hamlin to

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Speaker 4: talk to us about what is happening with Apple right now.

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Speaker 5: The European Commission announced preliminary findings in an investigation into

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Speaker 5: Apple under the Digital Markets Act. This is the sweeping

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Speaker 5: new competition rules that the European Union is sort of

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Speaker 5: implemented in March of this year. The findings of this

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Speaker 5: probe relate to anti steering rules, so essentially to Apple's

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Speaker 5: rules that it has in place to sort of prevent

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Speaker 5: app developers from informing users of maybe cheaper subscription options

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Speaker 5: outside of the app store. Now this might sound familiar,

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Speaker 5: because just in early March, before the DMA took effect,

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Speaker 5: the Commission did find Apple one point eight billion euros

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Speaker 5: over sort of these same anti steering policies. Now, what

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Speaker 5: their commission said is that Apple is still not complying

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Speaker 5: now with the DMA in terms of really letting developers

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Speaker 5: freely engage with users and direct them to cheaper options. Specifically,

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Speaker 5: this kind of they want developers to be able to

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Speaker 5: market within the app and show cheaper subscriptions within that.

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Speaker 5: So it's really this kind of more pressure on those

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Speaker 5: sort of app store revenues that Apple.

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Speaker 4: So what does Apple say to that? Well, what's their

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Speaker 4: defense to that, because presuly they had months to kind

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Speaker 4: of get it together.

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Speaker 5: What do they said is they think that they do

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Speaker 5: comply with all of this. What's interesting about the DMA, though,

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Speaker 5: is that this is the DMA. The European Commission did

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Speaker 5: play a strong role in drafting these rules, and it's

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Speaker 5: also responsible for enforcing them, and there are a lot

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Speaker 5: of sort of subjective interpretations in terms of first complying

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Speaker 5: with this. So I think what we are going to

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Speaker 5: see is probably the European Commission taking a very strict

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Speaker 5: view of what's reasonable in these circumstances and probably really

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Speaker 5: try to get strict adherance here. So it's going to

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Speaker 5: be going to be up to them to decide whether

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Speaker 5: Apple is complying or not, and then Apple can then

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Speaker 5: sort of appeal to the courts. But I do think

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Speaker 5: it's pretty likely we're going to see another fine in

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Speaker 5: this and some behavioral remedies coming down the line.

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Speaker 3: We've seen this time and time again where the Europeans

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Speaker 3: just start nitpicking at these US technology companies, tam what's

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Speaker 3: the feeling within the regulatory environment of Europe as to

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Speaker 3: really what they're trying to do here, because it just

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Speaker 3: doesn't seem like it's even relevant. I mean, it just

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Speaker 3: at the end of the day, they just whether it's

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Speaker 3: Google or Facebook or they just write checks here to

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Speaker 3: make it all go away. Do European regulators recognize that

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Speaker 3: it just doesn't seem to be that material what they're doing.

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Speaker 5: Yeah, So I think if you look at this specific investigation,

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Speaker 5: you know, this is one that sort of came out

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Speaker 5: of sort of Spotify, which of course is headquartered in Europe,

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Speaker 5: and the app developers are complaining that the Apple is

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Speaker 5: squeezing them too hard. So I think in some of

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Speaker 5: these instances, Europe is trying to protect some local players

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Speaker 5: by sort of ordering a sort of loosening of these

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Speaker 5: rules that sort of maybe benefit the gatekeeper on the TNA,

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Speaker 5: which would be at Apple, Google, Microsoft brothers, and they

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Speaker 5: are sort of trying to show domestic industry that they

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Speaker 5: are trying to pry open the markets. I do think

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Speaker 5: you're right that I think at this point investors are

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Speaker 5: sort of kind of just shrugging this off. This is

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Speaker 5: just one thing after another. I will point a difference

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Speaker 5: under the DMA is that the timeline is really much

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Speaker 5: quicker than under of former case law, where it may

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Speaker 5: take three four years until you got a result after

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Speaker 5: an industiation. Here, this finding came just three months after

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Speaker 5: the inquery opened, and we're going to have sort of

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Speaker 5: a final remedial measure by early next year. So I

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Speaker 5: do think the timeline is faster. Whether or not that

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Speaker 5: this results and sort of the impact that the regulators

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Speaker 5: might be looking for, I think definitely remains to be seen.

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Speaker 5: I think investors are definitely looking a little bit of

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Speaker 5: skew at it and thinking maybe this is sort of

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Speaker 5: just more of the same.

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Speaker 3: And Alex, I mean, you know, it's really almost, maybe

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Speaker 3: even more than thirty years ago that Microsoft started going

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Speaker 3: through the same whole thing with the European Union, and

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Speaker 3: again it investors became conditioned to it's no big deal.

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Speaker 3: They just write it check and it kind of goes away.

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Speaker 3: The tobacco industry. You know, investors kind of said, put

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Speaker 3: it in context, it's not that big a deal, and

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Speaker 3: you kind of wonder, you know, given that the US

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Speaker 3: regulators have taken a very light touch to technology and

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Speaker 3: then allowing these companies to get so big. It seems

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Speaker 3: like the Europeans are trying to do what they can

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Speaker 3: to kind of rein it in, but it seems almost

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Speaker 3: too little, too late, right.

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Speaker 4: And also you can make the argument too that you know,

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Speaker 4: Europe doesn't have a lot of technology companies. They have some,

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Speaker 4: of course, like ASML for example, yes's fitty, Yeah exactly, SAP,

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Speaker 4: But I mean, can you name anymore?

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Speaker 3: No, I'm there's some.

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Speaker 4: But I think that that's kind of the point if

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Speaker 4: you take a look at you know, European stocks versus

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Speaker 4: the SMP and market cap like twenty years ago versus now,

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Speaker 4: Oh my gosh, forget that. Hey Tamlin, what's going on

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Speaker 4: with Apple in general? It seems to be making a

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Speaker 4: little bit of a comeback here. What do you make

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Speaker 4: of that?

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Speaker 5: Yeah, I mean I think some of this comes some

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Speaker 5: sort of the recent announcement to sort of build AI

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Speaker 5: into the iPhone, and maybe it made me sort of

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Speaker 5: accelerate the recycle in terms of getting people to buy

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Speaker 5: those zones. Definitely, I don't think the regulatory headwinds are

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Speaker 5: really causing it much damage right now. I will point

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Speaker 5: out that although the US is definitely, like well said,

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Speaker 5: taking a light touch approach, the one area they are

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Speaker 5: getting involved in is on sort of these apps for rules,

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Speaker 5: where where Apple's obviously been in litigation with Epic for

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Speaker 5: years and years and years. So I think on both

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Speaker 5: sides of the Atlantic, there are some pressure on those

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Speaker 5: services revenues that we might see shaking out over the

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Speaker 5: next you know, nine to eighteen months to see how

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Speaker 5: that plays.

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Speaker 3: Out our thanks to Tamlin Basin Bloomberg Intelligence Technology Channels, we.

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Speaker 4: Move next to the electric vehicle industry. This week we

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Speaker 4: heard Beijing suggested Germany's luxury car manufacturers could benefit if

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Speaker 4: Berlink convinces the European Union to drop tearraffs on Chinese

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Speaker 4: electric vehicle exports.

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Speaker 3: Beijing currently imposes a fifteen percent fee on passenger vehicles

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Speaker 3: from the block. For more on this in the State

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Speaker 3: of the ev Industry, we were joined by Steve Mann,

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Speaker 3: Bloomberg Intelligence Global Autos and Industrials Research channelists.

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Speaker 4: We first asked for his take on this week's news.

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Speaker 6: It's a big deal for the Germans, especially the luxury

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Speaker 6: automakers like BMW Mercedes and Audi, which Volkswagen owns Audi.

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Speaker 6: You know, they have about eighty percent of the market,

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Speaker 6: the luxury car market in China, so they sell a

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Speaker 6: huge amount of cars in China. About a third to

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Speaker 6: forty percent of these companies' revenues actually generate in China,

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Speaker 6: so they Yeah, so they want to make good with

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Speaker 6: the Chinese. As you know, Germany has been against the tariffs.

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Speaker 6: So if the Germans are able to get something from

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Speaker 6: China and help ease some of the terrors, or if

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Speaker 6: China can get the Germans to help them eat some

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Speaker 6: of the tariffs in the EU, I think it will

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Speaker 6: benefit you know, potentially companies like Stelentis as well, which

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Speaker 6: is which also has a new joint venture.

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Speaker 4: But here's the thing that I get confused. Is it

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Speaker 4: China's making a pitch to individual countries versus the European

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Speaker 4: Union trying to operate as one body in relation to tariffs,

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Speaker 4: and I wonder how that's going to work itself out.

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Speaker 6: Yeah, I think it's it's that divine and conquer strategy

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Speaker 6: they're taking. So, but you know, I think the Germans

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Speaker 6: probably has the most to lose out of the global

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Speaker 6: automakers here. You know, about sixteen percent of their battery

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Speaker 6: electric vehicles that are produced in China, it's actually shipped

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Speaker 6: out globally. So China plays an important part for the

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Speaker 6: BEEV market as a low cost producer. So, you know,

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Speaker 6: I don't think there's a lot of other automakers that

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Speaker 6: are you know, that have that many bev's produce in

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Speaker 6: China and sold elsewhere around the world.

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Speaker 3: And Steve Canada now gets into the game. Canada announces

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Speaker 3: planned to curb imports of Chinese made EV's. First of all,

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Speaker 3: just give us a sense of how good, how competitive

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Speaker 3: are these Chinese evs, because if you tell me they're

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Speaker 3: good vehicles, let's bring them into the market.

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Speaker 6: I don't know, Yeah, I think some if you talk

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Speaker 6: to some of the our makers, they actually have the

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Speaker 6: same thinking. Let's let's let's compete, right, I think competition

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Speaker 6: will make the whole industry better. You saw that with

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Speaker 6: Tesla being the you know, fourth or third automaker in

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Speaker 6: the US and actually helped drive a lot of the

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Speaker 6: b EV costs down. But you know, it's not surprising

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Speaker 6: that Canada is is implementing tariffs. They are part of

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Speaker 6: the US, Mexico, Canada free trade agreement, and I think,

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Speaker 6: you know, they have to close that door, that back

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Speaker 6: door where the Chinese EV's can come in. It is

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Speaker 6: very competitive. I think, you know, Chinese evs are cheap

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Speaker 6: enough that if some argue that even with the tariffs,

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Speaker 6: even with some engineering changed so that they fit the regulatory,

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Speaker 6: safety and mission rules here, is still be a very

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Speaker 6: competitive price vehicle for North America.

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Speaker 4: So then to that point, we're waiting for Mexico now,

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Speaker 4: right because I think we talked about this before. So

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Speaker 4: not only is Canada going to put tariffs on EV imports,

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Speaker 4: they're also going to curb imports of Chinese made evs.

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Speaker 4: The idea is that if Mexico doesn't have any of

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Speaker 4: those restrictions, that they can just import EV's from China

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Speaker 4: and then through Mexico go into the US. And that's

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Speaker 4: a different way of operating. When do we get that

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Speaker 4: from Mexico.

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Speaker 6: I think there are some negotiation that's happening now with

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Speaker 6: Mexico to kind of implement similar tariff. I've heard that

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Speaker 6: VOVO is already kind of lobbying. VOVO is actually part

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Speaker 6: of Chile, is actually lobbying the Mexican government to not

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Speaker 6: implement to not put tariffs in place. So then negotiations

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Speaker 6: are ongoing. I don't think we were gonna wait have

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Speaker 6: to wait too long to hear any news from that.

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Speaker 3: All right, So stepping back a little bit, give us

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Speaker 3: the latest thinking out of Detroit and other auto capitals

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Speaker 3: around the world about EV's versus the hybrids. Is the

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Speaker 3: hybrid gonna be I guess the stepping stone to a

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Speaker 3: pure EV environment? Do you think is that still the thinking?

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Speaker 6: Yeah, I think that is still the thinking. I think

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Speaker 6: with BEEV sales slowing down or growth slowing down, the

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Speaker 6: automakers do need something else to meet the cafe the

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Speaker 6: few economy regulation, the missions regulations. So hybrid is a

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Speaker 6: stopgap measure. But if you talk to the all the automakers,

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Speaker 6: there's still spending a lot of money on BEV. They

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Speaker 6: think that is the future because at the end of

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Speaker 6: the day, hybrid vehicles do still spell out pollution or

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Speaker 6: greenhouse gases. So you know, these emission standards, these few

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Speaker 6: economy standards, they're only going to get tighter and tighter. O.

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Speaker 3: Thanks to Steve man bloomerg Intelligence, Global Autos and Industrials

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Speaker 3: research channels.

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Speaker 4: Coming up, We're going to look at Bloomberg Intelligence's midyear

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Speaker 4: outlook for North American restaurants and food service companies.

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Speaker 3: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indiffer

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Speaker 3: research and data on two thousand companies and one hundred

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Speaker 3: and thirty industries. You can access Bloomberg Intelligence via Bigo

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Speaker 3: in the terminal.

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Speaker 4: I'm Paul Sweeney and I'm Alex Steele, and this is Bloomberg.

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Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on Affocarplaying and broud Auto

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Speaker 2: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 2: get your podcasts, or watch us live on YouTube.

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Speaker 4: We look next at the restaurant and food service industry.

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Speaker 4: It's Bloomberg Intelligence recently released it's midiar outlook for both

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Speaker 4: in North America.

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Speaker 3: For more on this, we were joined by Michael Halen,

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Speaker 3: Bloomberg Intelligence Senior Restaurant and Food Service. We first asked Michael,

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Speaker 3: what is expecting for the back half of the year.

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Speaker 7: Sales are probably looking a little bit better just because

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Speaker 7: than they were in the first half, because the year

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Speaker 7: over year comparisons are getting easier, higher income consumers should

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Speaker 7: have money to spend. Right, we see stock markets at

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Speaker 7: all time highs, bitcoins having a rough day, but not

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Speaker 7: far off the highs, and home prices have held in

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Speaker 7: despite the higher rates, so that those should kind of

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Speaker 7: booy restaurant sales. But on the other end, the other

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Speaker 7: end of the k, the low income consumers continue to struggle.

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Speaker 7: You know, consumers under seventy five thousand were cited by

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Speaker 7: Darden the other day on their earnings call, is struggling,

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Speaker 7: especially consumers you know that are earning less than fifty thousand.

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Speaker 7: So we have kind of a push and a pull there.

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Speaker 8: You know.

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Speaker 7: Margins are okay, you know, we would like to.

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Speaker 3: See better sales because that's really.

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Speaker 7: What drives most of the margin expansion in that business.

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Speaker 7: Right There's a lot of operating leverage in the mind model,

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Speaker 7: so maybe some modest margin expansion. Then stocks generally haven't

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Speaker 7: done so well this year. What we wrote is that

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Speaker 7: we think we're going to see a larger spread between

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Speaker 7: the stock market, you know, the market share winners and

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Speaker 7: losers this year, you know, which we've largely seen in.

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Speaker 3: The first half.

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Speaker 7: You've seen stocks like Chipotle absolutely knocked the cover off

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Speaker 7: the ball again and really appreciate where other chains like

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Speaker 7: blooming Is kind of struggled in the first half and

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Speaker 7: you've seen that stock, you know, sell off pretty precipitously.

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Speaker 3: Talk to us about California and their new minimum wage law.

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Speaker 3: What's the impact been on the fast food business.

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Speaker 4: We just have like a famous Hollywood restaurant closed because

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Speaker 4: of that, like the famous like Hollywood McDonald's.

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Speaker 7: Or something San fran Yeah, so it's not been good

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Speaker 7: so far.

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Speaker 3: April results were.

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Speaker 7: Kind of in line with the US in terms of

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Speaker 7: same slore of sales at quick service restaurants, but I

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Speaker 7: think everybody went in April and then they had got

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Speaker 7: sticker shock and they didn't return in May.

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Speaker 3: So the McDonald's are the world in the restaurants in

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Speaker 3: general in California. Are they raising prices to cover their higher.

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Speaker 7: Labor, Yeah, high single digits is typical, which is a lot,

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Speaker 7: and that's not even covering it because the traffic loss

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Speaker 7: that we've seen here in May, it's it's not even

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Speaker 7: going to cover it. So they may even have to

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Speaker 7: raise prices again if they can. Quick service California same

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Speaker 7: store sales underperformed by almost four hundred basis points in

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Speaker 7: May versus the US. Yeah, so you know what we

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Speaker 7: wrote is that we expect quick service to continue to

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Speaker 7: outperform casual dining just because it's a cheaper check. Even

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Speaker 7: though it's gotten all the bad press about the eighteen

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Speaker 7: dollars big mac meal, twenty two dollars smash burger meal,

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Speaker 7: it's still you can eat there a lot cheaper on

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Speaker 7: the value menu and stuff like that. Also, you know,

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Speaker 7: chains are starting to discount more Burger King and McDonald's

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Speaker 7: five dollars meals, things of that nature. But California is

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Speaker 7: definitely going to weigh on quick service growth throughout your

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Speaker 7: end for sure.

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Speaker 4: So as the k shape recovery grows even wider, it

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Speaker 4: feels like, so do the valuations of those companies that

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Speaker 4: service those two lines.

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Speaker 1: Is that a fair statement.

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Speaker 7: Yeah, if you're a chain that can attract high income

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Speaker 7: consumers like Chipotle has done such a good job of

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Speaker 7: doing and McDonald's has done a good job of it

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Speaker 7: as well since since the start of the pandemic.

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Speaker 4: Chipotle is their Wednesday day, Paul, It varies, but it's

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Speaker 4: seven one day week they get Chipotle.

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Speaker 3: But here's a funny Chipotle story. They got slammed in

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Speaker 3: social media for like underfilling their tacos and things like that.

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Speaker 3: Now they've gone overboard and they overfill them. So the

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Speaker 3: net result for me, instead of getting three hard tacos

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Speaker 3: with chicken and I'd give you the whole order later,

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Speaker 3: I only get two.

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Speaker 2: There you go.

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Speaker 3: So it's got to be hurting their sales. So that

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Speaker 3: is an interesting tidbit.

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Speaker 7: Thinking about doing some work into it, but we haven't

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Speaker 7: done anything yet. There was definitely some some heat and

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Speaker 7: some shade thrown at Chipotle for a little while there.

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Speaker 3: I'm going to say a year and a half ago,

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Speaker 3: somebody came in there, this kind of the beginning of

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Speaker 3: this whole AI thing, and somebody came in to this

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Speaker 3: studio said, one of the biggest areas is going to

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Speaker 3: be like, for example, drive through going through a drive

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Speaker 3: through McDonald's, it's gonna be all AI blah blah blah

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Speaker 3: blah blah. So my question to you is, are local

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Speaker 3: I don't know McDonald's or Burger Kings. Did they have

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Speaker 3: fewer employees because they're using technology or at all like that?

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Speaker 7: Well, there, they have tried to cut labor hours in

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Speaker 7: other ways. That's a goal using AI for sure. It's

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Speaker 7: been harder though at the drive through then anticipated a

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Speaker 7: lot of things just like accents, you know, you know,

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Speaker 7: something like that you know actually is has caused some

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Speaker 7: issues up they're also using AI with these cameras that

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Speaker 7: are using AI to see if orders are being packaged correctly,

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Speaker 7: you know, since takeout and delivery has become such a

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Speaker 7: big part of these businesses. But you know, one of

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Speaker 7: the companies that was doing that got caught using people

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Speaker 7: in India watching like screens.

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Speaker 2: Videos supposedly quote unquote AI. So we're not quite there

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Speaker 2: yet with the AI our.

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Speaker 3: Thanks to Michael Hanlin, Bloomberg Intelligence Senior Restaurant and food

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Speaker 3: service Analysts.

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Speaker 4: Here at Bloomberg, we'd like to keep you up to

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Speaker 4: date on all the fun, juicy Wall Street stories, and

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Speaker 4: this week we focused on the Bloomberg Big Take story

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Speaker 4: titled the Last seventy two Hours of our kegos for more.

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Speaker 3: We were joined by one of the stories authors, Shreed Nanarajen,

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Speaker 3: Bloomberg News Senior Finance reporter. We first asked Streid to

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Speaker 3: walk us through what this story is about.

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Speaker 9: This is a story that's fascinated Wall Street for much

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Speaker 9: of the last three years, right Billhong out of nowhere,

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Speaker 9: had built up such enormous wealth, had a family office,

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Speaker 9: and yet hid wealth had gone from a billion to

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Speaker 9: four billion, from four billion to thirty six billion in

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Speaker 9: a span of six months. That all collapsed very publicly

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Speaker 9: in March twenty twenty one, when in a matter of

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Speaker 9: days he lost his entire fortune. Everyone on Wall Street

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Speaker 9: has been trying to figure out what happened, how it happened,

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Speaker 9: and a lot of the details have been dribbling out

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Speaker 9: for the last few years. But over the last few

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Speaker 9: weeks any court room in downtown Manhattan, Bill Huang is

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Speaker 9: on trial. Prosecutors accused him of manipulating markets, of defrauding lenders.

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Speaker 9: But after having spent a lot of time in the courtroom,

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Speaker 9: another key takeaway from it all has been that Wall

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Speaker 9: Street doesn't look all that great. Here was someone whose

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Speaker 9: personal wealth might have been thirty six billion dollars, but

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Speaker 9: he had another one hundred and twenty five billion dollars

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Speaker 9: in borrowed money. He had a gross portfolio size of

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Speaker 9: one hundred and sixty billion dollars, making concentrated bets on

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Speaker 9: much of the same names, and all the banks were

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Speaker 9: largely caught unawares. Yes, they got vague answers, evasive answers,

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Speaker 9: but they also relied on pinky promises effectively to give

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Speaker 9: him so much firepower for his bets. And in the

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Speaker 9: end the banks were burnt badly, lost over ten billion dollars,

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Speaker 9: and one of those banks, the most badly hit credit Squeeze,

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Speaker 9: doesn't even exist anymore. And you could argue Bill Huong's

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Speaker 9: firm played a key role in that.

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Speaker 3: What I found fashionating about this article, and it's a

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Speaker 3: great minute by minute walk through a seventy two hour

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Speaker 3: period when it all kind of came to an end

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Speaker 3: for everyone involved, was that the banks did not know

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Speaker 3: that Piquang and his firm was layering on such concentrated

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Speaker 3: bets across various firms. One bank didn't know what the

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Speaker 3: other bank was doing. Therefore they didn't know the magnitude

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Speaker 3: of the exposure. How did that happen?

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Speaker 9: And look all the conversations we have, they will tell

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Speaker 9: you we're not allowed to ask if you're in the

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Speaker 9: prime brokerage business, if you're in the business of extending

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Speaker 9: leverage to your client, the client doesn't necessarily have to

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Speaker 9: tell you or show you their exact portfolio. They will

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Speaker 9: claim secrecy, they will claim proprietary information. But at the

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Speaker 9: end of the day, banks can also say, if you

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Speaker 9: don't give me as many disclosures as possible, I will

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Speaker 9: not give you that money. That never happened. These guys

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Speaker 9: would come in and say, yes, we have a diversified portfolio,

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Speaker 9: and yes, don't worry, we have all the controls in place,

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Speaker 9: and it's across a mix of names, and the banks

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Speaker 9: would believe that, yes, they expect honesty and truthful answers.

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Speaker 9: And if they didn't get that, and you can see

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Speaker 9: why the DOJ wants to go after Billhong and ArKade goes.

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Speaker 9: But just think about it for a moment. You walk

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Speaker 9: into a bank today as a retail customer and want

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Speaker 9: a ten thousand dollars loan or a mortgage, or you

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Speaker 9: are trying to get into a co op, the hoops

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Speaker 9: that one has to jump through, the signatures you have

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Speaker 9: to get. I mean, to get into a co op,

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Speaker 9: you will need three witnesses, three friends, your high school teacher,

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Speaker 9: your college professor, and so many other people.

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Speaker 4: When you're first born man, and if you're getting into

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Speaker 4: a co op.

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Speaker 9: Pretty much and in this case, he as someone who

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Speaker 9: said I would like five billion dollars in capacity, Actually,

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Speaker 9: can we increase it ten billion now? Because my portfolio

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Speaker 9: sizes increase and all the banks are doing you're sure

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Speaker 9: you're good for that, right, and we can trust you

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Speaker 9: that you're investing well and you're doing this responsibility.

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Speaker 1: Yep, yep.

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Speaker 9: Great. They didn't even require written declarations about what the

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Speaker 9: portfolio looks like. These were phone conversations and that was

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Speaker 9: convincing enough for them to extend this kind of money.

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Speaker 9: And that's why for us. Yes, the legal process will

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Speaker 9: follow its on path, and the jury of twelve New

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Speaker 9: York kers will decide whether Bill Hoong his CFO, if

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Speaker 9: they are guilty or not on the charges that have

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Speaker 9: been brought against them. But it's not a great look

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Speaker 9: for Wall three.

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Speaker 4: So in terms of Wall Street, could this happen again

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Speaker 4: or do you think now things will be rethought? Those

438
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Speaker 4: pinky swears will be by the wayside.

439
00:22:23,280 --> 00:22:24,560
Speaker 9: By the way I was told by one of the

440
00:22:24,640 --> 00:22:29,280
Speaker 9: editors that pinky swears are the highest grade of promises

441
00:22:29,280 --> 00:22:31,159
Speaker 9: out there. So if you can't rely on that, what

442
00:22:31,200 --> 00:22:34,600
Speaker 9: do you rely on. I will make the point though,

443
00:22:34,680 --> 00:22:38,720
Speaker 9: that the lack of copycats before our Chigoes or even

444
00:22:38,760 --> 00:22:43,359
Speaker 9: after our Gooes, isn't necessarily a reflection of a new

445
00:22:43,440 --> 00:22:47,680
Speaker 9: regime of banking, of strengthened controls, of great oversight. As

446
00:22:47,800 --> 00:22:50,840
Speaker 9: much as in the case of our gegos, there was

447
00:22:50,960 --> 00:22:55,440
Speaker 9: one man who was willing to take a pliant system

448
00:22:55,720 --> 00:22:58,200
Speaker 9: to the extremes. There was a lot of noise about

449
00:22:58,200 --> 00:23:00,960
Speaker 9: bringing in rules. Family offices don't face the same kind

450
00:23:01,000 --> 00:23:03,320
Speaker 9: of oversight as hatch funds, and they will talk about

451
00:23:03,440 --> 00:23:07,200
Speaker 9: what can be changed, how the rules need to be modified.

452
00:23:07,720 --> 00:23:09,520
Speaker 9: Some have been put in place, but for the most

453
00:23:09,560 --> 00:23:11,840
Speaker 9: part it's been a lot of talk, and these things

454
00:23:12,080 --> 00:23:17,280
Speaker 9: take time. The worry still remains. And look, this happened recently,

455
00:23:17,280 --> 00:23:19,360
Speaker 9: so the banks are perhaps shy of doing this with

456
00:23:19,440 --> 00:23:23,399
Speaker 9: someone else, but it's not entirely clear to me how

457
00:23:23,480 --> 00:23:27,000
Speaker 9: they avoid a repeat of this situation. If someone else

458
00:23:27,119 --> 00:23:30,760
Speaker 9: comes along and follows this, you know, you may want

459
00:23:30,760 --> 00:23:33,200
Speaker 9: to call it what might have looked like genius investing

460
00:23:33,240 --> 00:23:35,040
Speaker 9: to start with, but really at the end of it

461
00:23:35,240 --> 00:23:38,720
Speaker 9: reckless investing. If they follow the same pattern, can we

462
00:23:38,800 --> 00:23:42,520
Speaker 9: be guaranteed that they won't be a repeat? I don't know,

463
00:23:43,280 --> 00:23:46,040
Speaker 9: and Credit Swiss will tell you it doesn't even matter

464
00:23:46,080 --> 00:23:48,680
Speaker 9: because they don't they don't exist anymore to be able

465
00:23:48,720 --> 00:23:50,239
Speaker 9: to tell you if there will be a repeat or not.

466
00:23:50,320 --> 00:23:52,080
Speaker 9: That was the kind of consequence we saw from the

467
00:23:52,080 --> 00:23:53,040
Speaker 9: collapse of this one film.

468
00:23:53,760 --> 00:23:55,800
Speaker 3: Say it's how this trial is gonna go, Sery.

469
00:23:55,880 --> 00:23:59,280
Speaker 9: Well, it's fascinating. It's happening in the court room of

470
00:23:59,280 --> 00:24:02,320
Speaker 9: a ninety year old judge, right, and you have a

471
00:24:02,480 --> 00:24:05,560
Speaker 9: jury most of them, well all of them, had never

472
00:24:05,560 --> 00:24:08,080
Speaker 9: heard of Billhong or our kaid goes before. And that

473
00:24:08,160 --> 00:24:10,800
Speaker 9: kind of means that they have been getting a finance

474
00:24:10,840 --> 00:24:14,280
Speaker 9: one o one finance one on one sounds challenging in itself,

475
00:24:14,320 --> 00:24:17,040
Speaker 9: But then if the prosecutors and the defense lawyers have

476
00:24:17,040 --> 00:24:19,560
Speaker 9: to spend much of their time trying to explain security

477
00:24:19,600 --> 00:24:24,720
Speaker 9: based swaps, margin leverage, even discuss what memes talks and

478
00:24:24,760 --> 00:24:26,359
Speaker 9: what they're not, and have to define for some of

479
00:24:26,400 --> 00:24:29,640
Speaker 9: these people what Goldman Sachs is, it'll be very interesting

480
00:24:29,680 --> 00:24:32,240
Speaker 9: to see how it pans out, because when you're listening

481
00:24:32,280 --> 00:24:34,400
Speaker 9: to some of the arguments in court, when you hear

482
00:24:34,480 --> 00:24:37,960
Speaker 9: prosecutors talk about a lot of heavy investing towards close

483
00:24:38,040 --> 00:24:40,840
Speaker 9: of market, they were lifting the firm limit to try

484
00:24:40,880 --> 00:24:43,720
Speaker 9: and drive the price up, and yet on counter you

485
00:24:44,040 --> 00:24:46,840
Speaker 9: kind of understand that is how business is done on

486
00:24:46,880 --> 00:24:50,160
Speaker 9: Wall Street. I mean, some of this jargon sounds sinister,

487
00:24:50,640 --> 00:24:54,600
Speaker 9: but isn't necessarily sinister. But how we see and perceive

488
00:24:54,640 --> 00:24:57,359
Speaker 9: it doesn't matter. It's what's getting through to the jury.

489
00:24:57,520 --> 00:25:00,320
Speaker 9: The prosecution rests its case today, the defense gets another

490
00:25:00,359 --> 00:25:03,119
Speaker 9: couple of days, and after the break next week we

491
00:25:03,160 --> 00:25:05,400
Speaker 9: will come back with closing remarks and then we will

492
00:25:05,400 --> 00:25:06,919
Speaker 9: get the final liddict on this one.

493
00:25:07,119 --> 00:25:10,320
Speaker 3: Our thanks to Shri Natarajen, Bloomberg News Senior finance reporter.

494
00:25:10,640 --> 00:25:12,119
Speaker 4: I coming up on the program, We're going to look

495
00:25:12,119 --> 00:25:15,560
Speaker 4: at how the strong demand for cruises impacted Carnival's quarterly earnings.

496
00:25:15,720 --> 00:25:18,639
Speaker 3: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in

497
00:25:18,680 --> 00:25:21,000
Speaker 3: depth research and data on two thousand companies and one

498
00:25:21,080 --> 00:25:23,919
Speaker 3: hundred and thirty industries. You can access Bloomberg Intelligence via

499
00:25:24,000 --> 00:25:26,120
Speaker 3: bi go on the terminal, I'll Paul Swinging.

500
00:25:25,800 --> 00:25:26,840
Speaker 4: And am Alex Steele, and.

501
00:25:26,800 --> 00:25:27,800
Speaker 1: This is Bloomberg.

502
00:25:32,400 --> 00:25:36,280
Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live

503
00:25:36,359 --> 00:25:39,400
Speaker 2: weekdays at ten am Eastern on Apple car Play and

504
00:25:39,400 --> 00:25:42,680
Speaker 2: Android Auto with the Bloomberg Business. You can also listen

505
00:25:42,800 --> 00:25:45,920
Speaker 2: live on Amazon Alexa from our flagship New York station.

506
00:25:46,280 --> 00:25:49,040
Speaker 2: Just say Alexa Play Bloomberg eleven thirty.

507
00:25:50,160 --> 00:25:52,520
Speaker 4: We move now to the cruise line industry and Carnival.

508
00:25:52,600 --> 00:25:55,040
Speaker 4: This week, Carnival raised it's full year earnings outlook after

509
00:25:55,080 --> 00:25:57,760
Speaker 4: strong demand for cruises helped it post a surprise profit

510
00:25:57,840 --> 00:25:58,359
Speaker 4: last quarter.

511
00:25:58,600 --> 00:26:01,080
Speaker 3: For more, we were joined by Brian Egg, Bloomberg Intelligence

512
00:26:01,160 --> 00:26:02,600
Speaker 3: Senior Gaming and Lodging analyst.

513
00:26:02,840 --> 00:26:06,000
Speaker 4: We first asked Brian to make sense of Carnival's positive results.

514
00:26:06,280 --> 00:26:10,360
Speaker 10: I think what Carnival is seeing is going beyond pent

515
00:26:10,480 --> 00:26:16,000
Speaker 10: up demand from the pandemic to genuine, ongoing, sustainable, disposable

516
00:26:16,000 --> 00:26:19,000
Speaker 10: spending on leisure travel. So they're seeing it across the board.

517
00:26:19,080 --> 00:26:21,480
Speaker 10: I mean, it really is broad base. They're seeing in

518
00:26:21,520 --> 00:26:24,560
Speaker 10: Europe and North America. They're seeing it for both on

519
00:26:24,680 --> 00:26:28,600
Speaker 10: board spending and ticket fare gains. And they're seeing it

520
00:26:28,640 --> 00:26:32,280
Speaker 10: both on new hardware and you know, kind of legacy

521
00:26:32,359 --> 00:26:34,359
Speaker 10: ships as well. So it is pretty broad based.

522
00:26:34,880 --> 00:26:38,480
Speaker 3: So is it the typical cruising customer, is it new

523
00:26:38,480 --> 00:26:41,560
Speaker 3: people coming into the industry? What are they seeing here?

524
00:26:42,160 --> 00:26:45,240
Speaker 10: I think it's both. There's always a focus on new

525
00:26:45,280 --> 00:26:49,280
Speaker 10: cruise customers and marketing the value relative value of cruises

526
00:26:49,280 --> 00:26:53,280
Speaker 10: compared to other forms of vacation. I think it's really both.

527
00:26:53,960 --> 00:26:57,800
Speaker 10: And you know, different brands attract different demographics and age groups,

528
00:26:57,840 --> 00:27:00,000
Speaker 10: but you know, to the extent that it's broad based,

529
00:27:00,920 --> 00:27:02,359
Speaker 10: and it seems to be happening not only in the

530
00:27:02,400 --> 00:27:05,280
Speaker 10: first quarter, but continuing to the second quarter, and as

531
00:27:05,600 --> 00:27:07,960
Speaker 10: Alex mentioned, next year as well. You know, I think

532
00:27:07,960 --> 00:27:09,520
Speaker 10: it's we're seeing it across the board.

533
00:27:10,200 --> 00:27:13,880
Speaker 4: If we go into a real slump or if inflation

534
00:27:14,040 --> 00:27:17,800
Speaker 4: stays sticky, does that affect this sustainable leisure demand the

535
00:27:17,840 --> 00:27:20,080
Speaker 4: Carnival and you were talking about.

536
00:27:19,600 --> 00:27:23,080
Speaker 10: You know, it does. Certainly. Travel prices have increased, and

537
00:27:23,160 --> 00:27:26,080
Speaker 10: we're seeing that dismanifested of the fact that Carnival raised

538
00:27:26,080 --> 00:27:29,560
Speaker 10: its net revenue old growth outlook for twenty twenty four

539
00:27:29,680 --> 00:27:32,800
Speaker 10: from nine point five percent to ten and a quarter percent,

540
00:27:32,840 --> 00:27:35,800
Speaker 10: so they're partly benefiting from that price. But obviously, you know,

541
00:27:35,880 --> 00:27:39,240
Speaker 10: inflation cost inflation does affect the disposition of consumers. But

542
00:27:39,280 --> 00:27:42,239
Speaker 10: for now, at least, you know, the demand on the

543
00:27:42,280 --> 00:27:44,840
Speaker 10: consumer discretionary side certainly seems to be there.

544
00:27:45,760 --> 00:27:48,800
Speaker 3: How about on the cost side, I'm thinking fuel I'm

545
00:27:48,800 --> 00:27:51,879
Speaker 3: thinking labor. What's going on on the cost side for

546
00:27:52,200 --> 00:27:53,240
Speaker 3: a lot of these crews companies.

547
00:27:53,320 --> 00:27:57,359
Speaker 10: Yeah, it's a factor certainly in terms of cost positioning.

548
00:27:57,400 --> 00:27:59,959
Speaker 10: They've maintained I guess i'd say kind of a stable

549
00:28:00,080 --> 00:28:03,600
Speaker 10: full year unit cost growth out look of about four

550
00:28:03,640 --> 00:28:06,240
Speaker 10: and a half percent or so excluding the increases in

551
00:28:06,240 --> 00:28:09,240
Speaker 10: the fuel. There are some increases going on there, but

552
00:28:09,280 --> 00:28:12,640
Speaker 10: they're also to some degree being offset where they can

553
00:28:12,760 --> 00:28:18,680
Speaker 10: by operating efficiencies and you know where they can refinancing

554
00:28:18,680 --> 00:28:22,080
Speaker 10: of debt and interesting and they've also identified just operational

555
00:28:22,119 --> 00:28:26,240
Speaker 10: cost savings throughout wherever possible. So it's a challenging cost

556
00:28:26,320 --> 00:28:29,280
Speaker 10: environment generally for the economy, but they are, I think,

557
00:28:30,040 --> 00:28:33,719
Speaker 10: seeing pockets of opportunity to manage and mitigate that cost growth.

558
00:28:34,280 --> 00:28:39,040
Speaker 4: Is there a distinction between Disney Cruises and Norwegian Cruise

559
00:28:39,240 --> 00:28:40,880
Speaker 4: like the ones that take it to Iceland and the

560
00:28:40,920 --> 00:28:42,680
Speaker 4: Paul would go on versus the ones that like I

561
00:28:42,720 --> 00:28:44,800
Speaker 4: would have to go on with my kid, Like, are

562
00:28:44,800 --> 00:28:46,920
Speaker 4: there a distinction or is this like a broad stroke

563
00:28:47,280 --> 00:28:48,320
Speaker 4: for the cruise like guys.

564
00:28:48,440 --> 00:28:51,080
Speaker 10: I mean, there are so many distinction across brands to

565
00:28:51,080 --> 00:28:53,920
Speaker 10: give you some sense of it, you know, like domestically

566
00:28:54,040 --> 00:28:57,680
Speaker 10: or in terms of US brands, they saw yields up

567
00:28:58,120 --> 00:29:01,240
Speaker 10: in the quarter seven percent, European brands up twelve percent.

568
00:29:01,520 --> 00:29:04,200
Speaker 10: So it's pretty broad based, with some differences in comparisons.

569
00:29:04,400 --> 00:29:07,920
Speaker 10: I will say that the level of yield growth expectation,

570
00:29:08,080 --> 00:29:11,440
Speaker 10: it's ten percent ish, as I mentioned for Carnival, you know,

571
00:29:11,440 --> 00:29:13,000
Speaker 10: it's nine and a half percent for a while, and

572
00:29:13,040 --> 00:29:16,760
Speaker 10: it's a touch above seven percent for Norwegian. And while

573
00:29:16,760 --> 00:29:20,000
Speaker 10: there are differences across companies in terms of comparisons, I

574
00:29:20,000 --> 00:29:21,960
Speaker 10: think you can say those are roughly in the same

575
00:29:22,080 --> 00:29:26,120
Speaker 10: ballpark in terms of the inertia momentum for bookings.

576
00:29:26,640 --> 00:29:29,160
Speaker 3: This is an industry. Are they building new ships?

577
00:29:30,280 --> 00:29:32,320
Speaker 10: There are new ships in order, you know, the level

578
00:29:32,360 --> 00:29:35,280
Speaker 10: of supply growth slows down a little bit going into

579
00:29:35,320 --> 00:29:37,959
Speaker 10: next year. It's kind of like a kind of a

580
00:29:38,000 --> 00:29:41,840
Speaker 10: mid single digit long term supply growth rate, which historically

581
00:29:41,920 --> 00:29:44,200
Speaker 10: is actually a little bit more modern than what we've

582
00:29:44,240 --> 00:29:47,280
Speaker 10: seen over some past decades. So they are building new hardware,

583
00:29:47,400 --> 00:29:49,200
Speaker 10: but they're also I mean, this is kind of key

584
00:29:49,240 --> 00:29:53,160
Speaker 10: for Carnival. They have been repositioning some ships and rebranding

585
00:29:53,560 --> 00:29:56,959
Speaker 10: a lot of the former Costa and Piano Australia ships

586
00:29:57,200 --> 00:29:59,880
Speaker 10: as Carnival brands, so in addition to some new shipbuilding,

587
00:30:00,160 --> 00:30:02,920
Speaker 10: there's also some rebranding and brand positioning going on.

588
00:30:03,200 --> 00:30:05,800
Speaker 3: Our thanks to Brian Egg, Bloomberg Intelligence Senior Gaming and

589
00:30:05,880 --> 00:30:06,960
Speaker 3: Launching analysts, and we.

590
00:30:07,000 --> 00:30:09,920
Speaker 4: Have something here at Bloomberg called Bloomberg New Energy Finance.

591
00:30:09,960 --> 00:30:13,920
Speaker 4: The idea behind it is to provide data on commodities, power, transport, industries,

592
00:30:13,920 --> 00:30:16,320
Speaker 4: buildings and agriculture plus new technology.

593
00:30:16,640 --> 00:30:18,760
Speaker 3: This week we took a look at the global carbon

594
00:30:18,800 --> 00:30:20,840
Speaker 3: market and also some of the price trends in the

595
00:30:20,920 --> 00:30:22,000
Speaker 3: US and global market.

596
00:30:22,160 --> 00:30:24,960
Speaker 4: From where we are joined by Bocan Bloomberg bn EF

597
00:30:25,080 --> 00:30:26,440
Speaker 4: lead US carbon analyst.

598
00:30:26,680 --> 00:30:29,280
Speaker 3: We first asked both to define what a global carbon

599
00:30:29,320 --> 00:30:29,920
Speaker 3: market is.

600
00:30:30,560 --> 00:30:35,120
Speaker 8: Carbon market is a large market that is growing very quickly.

601
00:30:35,520 --> 00:30:38,840
Speaker 8: What I look at particularly is compliance carbon market, where

602
00:30:38,880 --> 00:30:42,000
Speaker 8: we set a cap on emissions and allow entities to.

603
00:30:42,000 --> 00:30:43,240
Speaker 1: Trade under the cap.

604
00:30:43,840 --> 00:30:46,720
Speaker 8: There are also another set of carbon market which is

605
00:30:46,840 --> 00:30:52,280
Speaker 8: more focused on voluntary obligations and voluntary commitments. But the

606
00:30:52,320 --> 00:30:55,640
Speaker 8: growing part here is really the compliance carbon markets, where

607
00:30:55,640 --> 00:30:59,080
Speaker 8: we have seen a huge increase in not only traded

608
00:30:59,160 --> 00:31:03,480
Speaker 8: value but also emissions covered. Today we have almost twenty

609
00:31:03,640 --> 00:31:08,000
Speaker 8: percent of global greenhouse gas emissions covered mainly boosted by

610
00:31:08,880 --> 00:31:15,440
Speaker 8: countries and regulators zero commitments. We have now almost one

611
00:31:15,480 --> 00:31:20,840
Speaker 8: hundred and fifty countries with net zero carbon target and

612
00:31:21,560 --> 00:31:24,320
Speaker 8: with one and forty five states and regions with a

613
00:31:24,360 --> 00:31:27,080
Speaker 8: net zero carbon target as well. And with those they

614
00:31:27,080 --> 00:31:30,760
Speaker 8: have been looking for different ways to reduce emissions, and

615
00:31:30,880 --> 00:31:34,680
Speaker 8: carbon markets particular compliance carbon markets have become one of

616
00:31:34,680 --> 00:31:37,560
Speaker 8: those tools to drive that emission reduction.

617
00:31:38,400 --> 00:31:42,240
Speaker 3: So there isn't a federal carbon market for the entire US.

618
00:31:42,320 --> 00:31:43,280
Speaker 3: It's state by state.

619
00:31:43,880 --> 00:31:46,280
Speaker 1: Yes, so right now we don't have.

620
00:31:46,280 --> 00:31:48,640
Speaker 4: To decide that which is weird because we all breed

621
00:31:48,720 --> 00:31:50,200
Speaker 4: air and it's all the same air.

622
00:31:50,560 --> 00:31:51,360
Speaker 1: That's also weird.

623
00:31:51,760 --> 00:31:54,959
Speaker 3: But somebody to explain what a carbon market is.

624
00:31:55,400 --> 00:31:58,680
Speaker 8: So the carbon market, basically it's a regular set of

625
00:31:58,800 --> 00:32:02,520
Speaker 8: target and there are two types of carbon markets. So

626
00:32:02,520 --> 00:32:04,920
Speaker 8: there's a cap and trade where the regular set a

627
00:32:04,960 --> 00:32:08,600
Speaker 8: cap and the entities under the cap trade with each other.

628
00:32:09,000 --> 00:32:10,560
Speaker 1: So the just passed for the second.

629
00:32:10,560 --> 00:32:13,440
Speaker 4: So basically that means that a company is only allowed

630
00:32:13,600 --> 00:32:16,760
Speaker 4: to have x amount of emissions, say a year, and

631
00:32:16,800 --> 00:32:18,920
Speaker 4: then if they go over that, they have to trade

632
00:32:18,960 --> 00:32:21,640
Speaker 4: those emissions and spend money buying them to then say,

633
00:32:21,640 --> 00:32:22,560
Speaker 4: look I've offset that.

634
00:32:22,960 --> 00:32:25,680
Speaker 1: Yeah, okay. It really actually depends on what kind of

635
00:32:25,760 --> 00:32:26,800
Speaker 1: carbon markets. So there are two.

636
00:32:26,880 --> 00:32:29,320
Speaker 8: Cap and trade is Basically you set a cap on

637
00:32:29,680 --> 00:32:34,840
Speaker 8: over all markets, so it's comprising of all the sectors

638
00:32:34,960 --> 00:32:37,240
Speaker 8: that you want to set a cap on. Then it

639
00:32:37,240 --> 00:32:41,040
Speaker 8: doesn't really matter which company reduces. The advantage here is

640
00:32:41,080 --> 00:32:44,320
Speaker 8: really that the one who has the cheapest abatement options

641
00:32:44,320 --> 00:32:47,080
Speaker 8: they reduce first, and those that are more hard to

642
00:32:47,120 --> 00:32:52,160
Speaker 8: abate they can basically chill and pay for the permits

643
00:32:52,200 --> 00:32:57,080
Speaker 8: to pollute. Meanwhile, the cheaper sectors would abate for them.

644
00:32:57,600 --> 00:33:00,840
Speaker 1: There are also other types of carbon market is.

645
00:33:00,840 --> 00:33:03,040
Speaker 8: The other type would be a baseliner and credit where

646
00:33:03,400 --> 00:33:06,000
Speaker 8: it's what you mentioned. You're start a baseline and then

647
00:33:06,640 --> 00:33:10,120
Speaker 8: you if you're above the baseline, you have to buy credit.

648
00:33:10,160 --> 00:33:12,480
Speaker 8: If you're below, then you can sell into that market

649
00:33:12,480 --> 00:33:13,000
Speaker 8: and make money.

650
00:33:13,040 --> 00:33:14,120
Speaker 1: Exactly exactly.

651
00:33:14,680 --> 00:33:20,760
Speaker 3: I'm just a busy Google maps Finland because bo, you

652
00:33:21,160 --> 00:33:24,360
Speaker 3: grew up in Finland. Yes, I mean I had to

653
00:33:24,400 --> 00:33:26,520
Speaker 3: Google Map because I think I kind of knew generally

654
00:33:26,560 --> 00:33:27,960
Speaker 3: part of the world where it was. But go on,

655
00:33:28,200 --> 00:33:30,640
Speaker 3: olex you continue because this is fascinating to.

656
00:33:30,760 --> 00:33:33,000
Speaker 4: But actually it's an interesting that you wind up in

657
00:33:33,000 --> 00:33:35,200
Speaker 4: this industry coming from Finland, because I feel like the

658
00:33:35,200 --> 00:33:38,120
Speaker 4: Scandinavian countries have done really well when it comes to

659
00:33:38,560 --> 00:33:41,440
Speaker 4: managing their carbon emissions. Why do you think that they've

660
00:33:41,520 --> 00:33:44,160
Speaker 4: done so well versus the rest of the world.

661
00:33:44,800 --> 00:33:46,760
Speaker 8: I think at the end of the first is that

662
00:33:47,240 --> 00:33:50,680
Speaker 8: Infinland or in Scandinavia, we have the motivations, so that

663
00:33:50,840 --> 00:33:52,800
Speaker 8: first you start with the target, and.

664
00:33:53,360 --> 00:33:56,040
Speaker 4: That's a government part right like you, they had strip

665
00:33:56,120 --> 00:33:58,120
Speaker 4: government targets and they've had them for a while.

666
00:33:57,960 --> 00:34:00,800
Speaker 8: Exactly, and then you find different tools that will guide

667
00:34:00,880 --> 00:34:04,160
Speaker 8: you help you to get to that target. So pretty

668
00:34:04,240 --> 00:34:06,760
Speaker 8: much is like a fitness plan, when you first set

669
00:34:06,760 --> 00:34:09,279
Speaker 8: your fitness target and then you find the different tools

670
00:34:09,320 --> 00:34:13,080
Speaker 8: to guide you there. And in Finland there in carbon markets,

671
00:34:13,120 --> 00:34:17,960
Speaker 8: really we can't really deliver alone those nes target or

672
00:34:18,000 --> 00:34:21,839
Speaker 8: whichever target you have set. We do work in collaboration

673
00:34:22,000 --> 00:34:27,440
Speaker 8: with other policies. For example, you usually have subsidies for

674
00:34:27,560 --> 00:34:31,080
Speaker 8: different technologies for carbon capture, hydrogen.

675
00:34:30,680 --> 00:34:31,840
Speaker 1: Or renewable energy.

676
00:34:32,120 --> 00:34:35,520
Speaker 8: In addition to having a carbon market, the advantage really

677
00:34:35,520 --> 00:34:38,080
Speaker 8: with a carbon market is that you have a price transparency.

678
00:34:38,760 --> 00:34:43,120
Speaker 8: You typically when we talk to people, they don't investors

679
00:34:43,239 --> 00:34:46,920
Speaker 8: or policy makers or just normal people in the in

680
00:34:46,960 --> 00:34:50,680
Speaker 8: the society. They don't know what the carbonization means and

681
00:34:50,200 --> 00:34:56,200
Speaker 8: what it costs, and carbon market helps there. It helps

682
00:34:56,360 --> 00:35:00,360
Speaker 8: bring that transparency and bring a number of value to

683
00:35:00,640 --> 00:35:05,480
Speaker 8: what decarbonization mean today and in the future. Particularly it's

684
00:35:05,640 --> 00:35:08,840
Speaker 8: in the future that's the area where a carbon market

685
00:35:09,080 --> 00:35:14,520
Speaker 8: can help with because what for example, those carbon prices

686
00:35:14,520 --> 00:35:18,000
Speaker 8: that you see today, we have seen just in America,

687
00:35:18,120 --> 00:35:22,840
Speaker 8: we have seen those compliance carmerace. The California's price has

688
00:35:23,040 --> 00:35:27,279
Speaker 8: doubled since twenty twenty one. Now we have drifted slightly downwards,

689
00:35:27,280 --> 00:35:29,719
Speaker 8: but we had a record of forty four dollars per

690
00:35:29,800 --> 00:35:33,200
Speaker 8: ton this year, which is quite significant. And we have

691
00:35:33,320 --> 00:35:36,680
Speaker 8: seen here in Northeast. U asked, there's the.

692
00:35:36,680 --> 00:35:38,120
Speaker 1: Power market, carbon market and.

693
00:35:38,120 --> 00:35:41,839
Speaker 8: The value has tripled since twenty twenty one, really highlighting

694
00:35:41,920 --> 00:35:45,360
Speaker 8: that the price for decarbonization has increased.

695
00:35:45,360 --> 00:35:48,160
Speaker 1: And it is important for these.

696
00:35:48,040 --> 00:35:51,760
Speaker 3: Dates about some of the huge developing economies like China,

697
00:35:51,960 --> 00:35:55,360
Speaker 3: like India. Are they worried about their carbon emissions?

698
00:35:55,400 --> 00:35:58,480
Speaker 1: Are they doing anything? Yeah? Yeah, they are healthy and

699
00:35:58,560 --> 00:35:58,960
Speaker 1: as well.

700
00:35:59,200 --> 00:36:02,120
Speaker 8: Okay, they have like China has done quite a lot

701
00:36:02,160 --> 00:36:08,160
Speaker 8: in helping the energy transition globally. Well, first, they also

702
00:36:08,239 --> 00:36:12,400
Speaker 8: have a carbon compliance carbon market they started, yeah a

703
00:36:12,440 --> 00:36:15,879
Speaker 8: few years ago, and in terms of covered emissions, it's

704
00:36:15,920 --> 00:36:17,680
Speaker 8: actually the world's largest.

705
00:36:17,920 --> 00:36:19,480
Speaker 1: Everything was trying to it's.

706
00:36:19,320 --> 00:36:24,319
Speaker 8: The largest, so it's four gigatons of emissions covered. It's

707
00:36:24,400 --> 00:36:26,920
Speaker 8: only power sector at the moment, but they are looking

708
00:36:27,000 --> 00:36:31,200
Speaker 8: into expanding it to cover industries as well, like cement.

709
00:36:31,800 --> 00:36:34,080
Speaker 8: One of the things that has also drive in this

710
00:36:35,120 --> 00:36:38,000
Speaker 8: carbon market expansion is not just the net zero targets

711
00:36:38,000 --> 00:36:41,120
Speaker 8: that we have been talking about, but also there have

712
00:36:41,280 --> 00:36:46,239
Speaker 8: been more carbon border adjustment mechanism being introduced. So you

713
00:36:46,400 --> 00:36:51,359
Speaker 8: started first with their carbon border tariff and now UK

714
00:36:51,560 --> 00:36:56,600
Speaker 8: also start is looking into setting one and announced that

715
00:36:56,760 --> 00:36:58,200
Speaker 8: last last December.

716
00:36:58,480 --> 00:37:00,239
Speaker 1: And there are also like Canon and.

717
00:37:00,239 --> 00:37:03,400
Speaker 8: Australia looking into this and US we are also looking

718
00:37:03,480 --> 00:37:06,520
Speaker 8: into it, but it's maybe hardier because we don't have

719
00:37:06,760 --> 00:37:10,000
Speaker 8: as I mentioned before, we don't have a federal carbon pricing.

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00:37:10,080 --> 00:37:10,600
Speaker 1: Yeah.

721
00:37:10,719 --> 00:37:13,200
Speaker 4: Thanks to both Ken Bloomberg b and E F lead

722
00:37:13,400 --> 00:37:14,480
Speaker 4: US carbon analyst.

723
00:37:14,840 --> 00:37:19,319
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724
00:37:19,560 --> 00:37:22,719
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725
00:37:22,760 --> 00:37:26,160
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726
00:37:26,239 --> 00:37:29,640
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727
00:37:29,760 --> 00:37:32,760
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00:37:33,000 --> 00:37:34,840
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