1 00:00:02,120 --> 00:00:05,960 Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul Sweeney. 2 00:00:06,040 --> 00:00:09,240 Speaker 2: The real air performance has been the US corporate high yield. 3 00:00:09,400 --> 00:00:11,799 Speaker 3: Are the companies lean enough? Have they trimmed all the fats? 4 00:00:11,840 --> 00:00:15,640 Speaker 2: The semiconductor business is a really cyclical business. 5 00:00:15,160 --> 00:00:18,680 Speaker 1: Breaking market headlines and corporate news from across the globe. 6 00:00:18,760 --> 00:00:21,400 Speaker 4: Do investors like the M and A that we've seen? 7 00:00:21,640 --> 00:00:24,680 Speaker 2: These are two big time blue chip companies. 8 00:00:24,800 --> 00:00:28,440 Speaker 3: The window between the peak and cut changing super fast. 9 00:00:28,600 --> 00:00:33,240 Speaker 1: Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio. 10 00:00:36,360 --> 00:00:38,440 Speaker 5: I'm Paul Sweeney. Alex Steel is out this week. 11 00:00:38,520 --> 00:00:40,879 Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big 12 00:00:40,880 --> 00:00:42,240 Speaker 2: business stories impacting Wall. 13 00:00:42,080 --> 00:00:43,360 Speaker 5: Street and the global markets. 14 00:00:43,680 --> 00:00:45,600 Speaker 2: Each and every week we provide in depth research and 15 00:00:45,680 --> 00:00:47,279 Speaker 2: data on some of the two thousand companies in one 16 00:00:47,360 --> 00:00:48,879 Speaker 2: hundred and thirty industries around on. 17 00:00:49,000 --> 00:00:50,239 Speaker 5: Is covered worldwide. 18 00:00:50,479 --> 00:00:53,240 Speaker 2: Today, we'll look at that fragility of the commercial mortgage 19 00:00:53,240 --> 00:00:55,600 Speaker 2: backed securities market, as well as the impact that business 20 00:00:55,720 --> 00:00:59,760 Speaker 2: leaders can make by advocating for safe and secure elections. Plus, 21 00:01:00,200 --> 00:01:03,040 Speaker 2: with the US election just a few days away, a 22 00:01:03,120 --> 00:01:05,959 Speaker 2: look at those sway US presidents have on fuel economy 23 00:01:05,959 --> 00:01:10,000 Speaker 2: standards for cards, but first tech earnings. This week, Alphabet 24 00:01:10,080 --> 00:01:13,360 Speaker 2: reported earnings that surpassed analyst estimates, with their cloud division 25 00:01:13,360 --> 00:01:16,360 Speaker 2: seeing a thirty five percent rise in sales, while Meta 26 00:01:16,440 --> 00:01:20,360 Speaker 2: warned of a worsening AI losses. Bloomberg Intelligence senior tech 27 00:01:20,480 --> 00:01:23,360 Speaker 2: analysts Man Deep Seeing breaks down the reports. 28 00:01:24,000 --> 00:01:29,960 Speaker 6: Search, Cloud, YouTube. These are three separate businesses doing extremely 29 00:01:30,040 --> 00:01:33,199 Speaker 6: well at scale. I mean, double digit growth for search 30 00:01:33,280 --> 00:01:37,240 Speaker 6: business is really stellar when you think of all the 31 00:01:37,319 --> 00:01:39,840 Speaker 6: pressure they've been facing, you know, when it comes to 32 00:01:40,720 --> 00:01:45,759 Speaker 6: new entrants like CHATGPT and Perplexity and whatnot. And everyone 33 00:01:46,600 --> 00:01:48,480 Speaker 6: is of the belief that they would take at least 34 00:01:48,520 --> 00:01:53,200 Speaker 6: some share from Google, at least in terms of AD revenue. 35 00:01:53,320 --> 00:01:56,440 Speaker 6: Google hasn't lost any share. In fact, it's a very 36 00:01:56,480 --> 00:02:00,400 Speaker 6: healthy growth at their scale. And YouTube look fifty billion 37 00:02:00,440 --> 00:02:05,760 Speaker 6: plus revenue run rate seventy thirty split between subscriptions ads 38 00:02:06,120 --> 00:02:09,720 Speaker 6: is seventy and thirty percent of subscriptions and subscriptions crew, 39 00:02:10,320 --> 00:02:12,920 Speaker 6: you know, twenty eight percent. I mean, just think about 40 00:02:13,360 --> 00:02:16,960 Speaker 6: fifteen billion dollar subscriptions business growing twenty eight percent. That's 41 00:02:17,240 --> 00:02:20,560 Speaker 6: very impressive. So and we're not even talking about wevemo here. 42 00:02:20,840 --> 00:02:23,680 Speaker 6: So when you look at you know, all the businesses. 43 00:02:24,040 --> 00:02:27,120 Speaker 6: They clearly have a lot going on, and Vemo is 44 00:02:27,160 --> 00:02:30,360 Speaker 6: a future bet, but something that could be huge in 45 00:02:30,440 --> 00:02:31,800 Speaker 6: terms of you know, top line. 46 00:02:31,880 --> 00:02:33,600 Speaker 2: You know, it's interesting you just mentioned fifty billion of 47 00:02:33,639 --> 00:02:37,680 Speaker 2: run right revenue YouTube advertising subscription. That sounds a lot 48 00:02:37,760 --> 00:02:41,640 Speaker 2: like the cable television business, the cable network business. I 49 00:02:41,680 --> 00:02:46,200 Speaker 2: look at Paramount, Paramount Global, you know, all those cable networks, 50 00:02:46,560 --> 00:02:50,840 Speaker 2: they have thirty billion of revenue. So YouTube is significantly 51 00:02:50,880 --> 00:02:54,560 Speaker 2: bigger than some of the largest advertising and subscription German 52 00:02:54,600 --> 00:02:57,560 Speaker 2: media companies out there. Yeah, in a dozen years, it's 53 00:02:57,600 --> 00:02:58,320 Speaker 2: just extraordinary. 54 00:02:58,320 --> 00:03:00,520 Speaker 4: I mean, you were talking about these massive and sms 55 00:03:00,560 --> 00:03:03,280 Speaker 4: that Google in Alphabet obviously the parent company has been 56 00:03:03,280 --> 00:03:05,760 Speaker 4: trying to catch up to the likes of obviously Microsoft 57 00:03:05,960 --> 00:03:08,280 Speaker 4: and of course open Ai. Walk us through some of 58 00:03:08,320 --> 00:03:10,320 Speaker 4: those investments and how they're starting to pay off. 59 00:03:11,240 --> 00:03:14,720 Speaker 6: I mean, look, in the case of Alphabet, they have 60 00:03:15,080 --> 00:03:19,640 Speaker 6: huge data center investments simply because they have a giant 61 00:03:19,680 --> 00:03:24,480 Speaker 6: infrastructure that's powering these big businesses. So there's a lot 62 00:03:24,520 --> 00:03:28,760 Speaker 6: of internal consumption of these chips. But also the cloud business, 63 00:03:28,800 --> 00:03:32,359 Speaker 6: which saw a nice acceleration, you know, sequential acceleration from 64 00:03:32,360 --> 00:03:35,680 Speaker 6: twenty nine percent growth to thirty five percent growth, I 65 00:03:35,680 --> 00:03:39,160 Speaker 6: would say a lot of that is driven by the 66 00:03:39,200 --> 00:03:43,440 Speaker 6: availability of GPUs in their cloud. So I'll be interested 67 00:03:43,480 --> 00:03:47,280 Speaker 6: in seeing how much of Microsoft GPUs are being used 68 00:03:47,280 --> 00:03:50,640 Speaker 6: for internal consumption versus what is being exposed on their 69 00:03:50,680 --> 00:03:54,640 Speaker 6: Azure cloud because in my mind, Google having their own 70 00:03:54,720 --> 00:03:58,200 Speaker 6: chips is making a difference in terms of their cloud growth. 71 00:03:58,240 --> 00:04:02,680 Speaker 6: With Microsoft, at least they quantify the AI services contribution 72 00:04:02,880 --> 00:04:06,120 Speaker 6: being ten billion dollars by next quarter, so that's huge. 73 00:04:06,600 --> 00:04:06,960 Speaker 7: Still. 74 00:04:07,000 --> 00:04:10,040 Speaker 6: You know, when it comes to Azure, the fact that 75 00:04:10,600 --> 00:04:14,120 Speaker 6: growth is not accelerating like we saw with Google Cloud, 76 00:04:14,600 --> 00:04:17,039 Speaker 6: it makes you wonder, you know, if capex is growing 77 00:04:17,080 --> 00:04:21,920 Speaker 6: fifty percent, why is it not translating into faster Azure growth? 78 00:04:21,920 --> 00:04:24,839 Speaker 6: Even though thirty three percent is a very solid number, 79 00:04:25,080 --> 00:04:27,520 Speaker 6: but you want to see that acceleration which we saw 80 00:04:27,600 --> 00:04:31,320 Speaker 6: with Google. In the case of Meta and Microsoft, the 81 00:04:31,400 --> 00:04:35,599 Speaker 6: expectations were higher, and I would say Meta is somewhat 82 00:04:35,600 --> 00:04:38,919 Speaker 6: different in the sense that they have their all large 83 00:04:38,920 --> 00:04:41,560 Speaker 6: angrid model, they have their lead when it comes to 84 00:04:42,200 --> 00:04:45,039 Speaker 6: you know, generative AI, but they don't have a separate 85 00:04:45,160 --> 00:04:48,800 Speaker 6: AI revenue line like you see with you know, Microsoft 86 00:04:48,960 --> 00:04:53,120 Speaker 6: or with Alphabet, And that's where you know, if they say, 87 00:04:53,160 --> 00:04:56,080 Speaker 6: you know, capex is going to significantly increase for twenty 88 00:04:56,160 --> 00:05:00,960 Speaker 6: twenty five without really quantifying how significant it will be. 89 00:05:01,040 --> 00:05:03,039 Speaker 6: Whether it's going to be twenty percent which is the 90 00:05:03,080 --> 00:05:06,520 Speaker 6: consensus number, or thirty percent of fifty percent. Nobody knows, 91 00:05:07,000 --> 00:05:11,400 Speaker 6: and that's what I think created that uncertainty around Meta's 92 00:05:11,440 --> 00:05:13,919 Speaker 6: capex spen. And we saw what happened in three qu 93 00:05:14,160 --> 00:05:17,080 Speaker 6: of twenty twenty two where they had a very similar print, 94 00:05:17,440 --> 00:05:20,280 Speaker 6: but they actually quantified that significant and you know, the 95 00:05:20,400 --> 00:05:24,479 Speaker 6: stock dropped twenty percent after that, so clearly there is 96 00:05:24,560 --> 00:05:27,960 Speaker 6: some nervousness and uncertainty around their cap expin How. 97 00:05:27,880 --> 00:05:34,000 Speaker 2: Is AI impacting John Tucker justman's search results, right, I mean. 98 00:05:34,000 --> 00:05:36,800 Speaker 6: Just the nature of search is changing in the sense 99 00:05:36,880 --> 00:05:41,359 Speaker 6: you can ask you know, a lot longer queries. The 100 00:05:41,480 --> 00:05:45,560 Speaker 6: prompts can be infinite and length. You can you know, 101 00:05:45,640 --> 00:05:48,839 Speaker 6: have a video or an image prompt. It just doesn't 102 00:05:48,920 --> 00:05:52,279 Speaker 6: have to be text. So that's what Google called out, 103 00:05:52,279 --> 00:05:54,680 Speaker 6: that the queries are getting a lot more complex in 104 00:05:54,760 --> 00:05:57,680 Speaker 6: nature and users are actually engaging with it. So it's 105 00:05:57,720 --> 00:05:59,760 Speaker 6: not as if, you know, that's driving them to some 106 00:05:59,800 --> 00:06:02,760 Speaker 6: of the platform users want to use what they call 107 00:06:02,960 --> 00:06:07,680 Speaker 6: multimodal search, which is a combination of texts, videos, and 108 00:06:07,760 --> 00:06:12,360 Speaker 6: images and audios. So that's why these lms are so powerful, 109 00:06:12,440 --> 00:06:16,040 Speaker 6: because they give you that innate capability to search in 110 00:06:16,160 --> 00:06:18,719 Speaker 6: whatever format you want and you can just throw it 111 00:06:18,800 --> 00:06:21,960 Speaker 6: in that search box. So that search box is getting 112 00:06:22,000 --> 00:06:25,080 Speaker 6: a lot bigger and a lot more complex on that 113 00:06:25,160 --> 00:06:25,880 Speaker 6: Google page. 114 00:06:25,960 --> 00:06:28,480 Speaker 2: Our thanks to Bloomberg Intelligence senior tech analysts Man Deep 115 00:06:28,480 --> 00:06:31,680 Speaker 2: saying sticking with earnings, ELI Lilly lowered its guidance due 116 00:06:31,680 --> 00:06:34,760 Speaker 2: to lackluster sales of its weight loss drug zet Bound 117 00:06:35,160 --> 00:06:39,240 Speaker 2: and diabetes drug Montro. Each missed estimates by nearly nine 118 00:06:39,320 --> 00:06:42,200 Speaker 2: hundred million dollars. For more on the drugmaker shocking results, 119 00:06:42,440 --> 00:06:44,760 Speaker 2: we were joined by bloomerg Intelligence director of Research for 120 00:06:44,800 --> 00:06:48,400 Speaker 2: Global Industries and senior pharmaceutical analyst Sam Fazzelli. 121 00:06:48,240 --> 00:06:51,520 Speaker 8: When they reported we got a miss, right and I'm 122 00:06:51,520 --> 00:06:53,920 Speaker 8: looking at it right now. They missed by six percent 123 00:06:54,000 --> 00:06:56,960 Speaker 8: on revenue. That is not what do you do when 124 00:06:57,000 --> 00:07:00,240 Speaker 8: you're a sixty pe company, right, It just that it 125 00:07:00,640 --> 00:07:03,480 Speaker 8: is the world's not forgiving enough on that. Just breaking 126 00:07:03,520 --> 00:07:06,119 Speaker 8: that down further, that miss was two drugs on Jarro 127 00:07:06,480 --> 00:07:09,120 Speaker 8: and zep Bound, and those are the drugs that everybody 128 00:07:09,120 --> 00:07:13,640 Speaker 8: talks about. This is the the obesity drugs that are 129 00:07:13,680 --> 00:07:14,160 Speaker 8: on the market. 130 00:07:14,480 --> 00:07:15,000 Speaker 9: They missed. 131 00:07:15,040 --> 00:07:17,640 Speaker 8: Why did they miss The company said that it's because 132 00:07:18,160 --> 00:07:21,960 Speaker 8: there was an inventory d stocking going on at some wholesalers. 133 00:07:22,240 --> 00:07:25,200 Speaker 8: So people go, wait a minute, you're saying to me 134 00:07:25,400 --> 00:07:31,320 Speaker 8: that demand cannot be satisfied, supply were supply limited, So 135 00:07:31,400 --> 00:07:33,800 Speaker 8: why is there an inventory issue in the middle here? 136 00:07:34,400 --> 00:07:36,760 Speaker 8: And of course that's what led to the question of 137 00:07:36,880 --> 00:07:39,520 Speaker 8: oh my god, are we overestimating demand? 138 00:07:39,520 --> 00:07:42,640 Speaker 9: Here? Is the company overestimated it? Why? It's the world? 139 00:07:42,840 --> 00:07:46,960 Speaker 8: It sounds like with the twelve different forms of the 140 00:07:47,040 --> 00:07:48,160 Speaker 8: drugs that they have. 141 00:07:48,760 --> 00:07:50,120 Speaker 9: That no one in. 142 00:07:50,120 --> 00:07:53,400 Speaker 8: This early launch phase we can call it the early launch, right, 143 00:07:53,480 --> 00:07:56,240 Speaker 8: given that it's been a couple of years, is really 144 00:07:56,280 --> 00:07:59,600 Speaker 8: able to manage and work out what they need to 145 00:07:59,640 --> 00:08:03,680 Speaker 8: have as inventory. Because in such a massive product, you're 146 00:08:03,680 --> 00:08:06,720 Speaker 8: going to have an impact on working capital, even for 147 00:08:06,760 --> 00:08:10,480 Speaker 8: the wholesalers. It sounds like that that's the issue that 148 00:08:10,560 --> 00:08:14,440 Speaker 8: even Lily themselves can't necessarily forecast here, right, I mean 149 00:08:14,520 --> 00:08:17,760 Speaker 8: the actual details of how much of each product has made. 150 00:08:18,000 --> 00:08:20,480 Speaker 8: If that's true, then and I think you get a 151 00:08:20,480 --> 00:08:23,400 Speaker 8: little with of that in the fact that Folier guidance 152 00:08:23,600 --> 00:08:26,760 Speaker 8: wasn't dropped by as much as the miss that at 153 00:08:26,840 --> 00:08:30,320 Speaker 8: least currently they are optimistic about picking a whole bunch 154 00:08:30,360 --> 00:08:32,720 Speaker 8: of that backup in the Q four that you should 155 00:08:32,760 --> 00:08:35,160 Speaker 8: not worry about. Demand you talk to any doctor you want, 156 00:08:35,960 --> 00:08:38,160 Speaker 8: do they say, oh, I have no patients left to 157 00:08:38,240 --> 00:08:40,679 Speaker 8: asking me for he set bound or we go viaor whatever. 158 00:08:40,800 --> 00:08:44,880 Speaker 8: So I think that's what's happening here. The difficulty in 159 00:08:45,000 --> 00:08:47,880 Speaker 8: managing and thinking about how to manage your inventory. 160 00:08:48,440 --> 00:08:50,400 Speaker 4: Something I wanted to pick your brain about was when 161 00:08:50,400 --> 00:08:52,720 Speaker 4: it comes to knockoffs, because we saw a huge drop 162 00:08:52,760 --> 00:08:56,280 Speaker 4: in hymns in hers earlier this month, so they were 163 00:08:56,400 --> 00:08:59,760 Speaker 4: so they previously were allowed to manufacture copycap drugs when 164 00:08:59,760 --> 00:09:02,320 Speaker 4: they're deemed in short supplied by the FDA, But the 165 00:09:02,400 --> 00:09:04,600 Speaker 4: FDA at that time said when it came to Zebound 166 00:09:04,600 --> 00:09:07,600 Speaker 4: and Manjaro specifically for Eli Lily, they weren't shortage anymore. 167 00:09:07,720 --> 00:09:09,360 Speaker 4: So that's why you saw that drop there. But they 168 00:09:09,480 --> 00:09:12,360 Speaker 4: still when it came to a Zempic and Wegovi when 169 00:09:12,400 --> 00:09:14,760 Speaker 4: you think about Novo Nordisk, they were still able to 170 00:09:14,800 --> 00:09:18,640 Speaker 4: offer compounded version actually versions of those, So I'm wondering 171 00:09:18,640 --> 00:09:21,280 Speaker 4: when you think about Eli Lily versus what's happening with 172 00:09:21,400 --> 00:09:23,920 Speaker 4: Novo nordis, how does that kind of come into play 173 00:09:23,960 --> 00:09:26,160 Speaker 4: when you're thinking about when it comes to sort of 174 00:09:26,160 --> 00:09:28,280 Speaker 4: the knockoffs and the copycat type drugs. 175 00:09:28,720 --> 00:09:28,920 Speaker 9: Yeah. 176 00:09:28,960 --> 00:09:32,080 Speaker 8: Sure, I mean I'm not even sure that people have 177 00:09:32,160 --> 00:09:36,720 Speaker 8: stopped making compounded versions of zep pound and Manjara because 178 00:09:36,760 --> 00:09:39,840 Speaker 8: the FDA kind of reeled back a little bit and said, oh, 179 00:09:39,880 --> 00:09:41,280 Speaker 8: we're going to actually look at this again. 180 00:09:41,400 --> 00:09:43,400 Speaker 9: So I don't think that story is finished. 181 00:09:43,440 --> 00:09:45,800 Speaker 8: I think that these folks are some folks are still 182 00:09:45,840 --> 00:09:49,600 Speaker 8: able to supply those from a compounded pharmacy perspective, So 183 00:09:50,480 --> 00:09:54,040 Speaker 8: you know that is that's that's a lot. That's a 184 00:09:54,240 --> 00:09:56,560 Speaker 8: root that the FDA does provide to people. If there's 185 00:09:56,559 --> 00:09:58,400 Speaker 8: a shortage of a drug and someone else can. 186 00:09:58,320 --> 00:10:00,199 Speaker 9: Make it, well let them do it. 187 00:10:00,280 --> 00:10:02,680 Speaker 8: The interesting angle, of course, is that a whole bunch 188 00:10:02,720 --> 00:10:05,880 Speaker 8: of people who are taking off the compounded pharmacists are 189 00:10:06,080 --> 00:10:09,880 Speaker 8: probably paying less, and therefore if they're forced to go 190 00:10:09,920 --> 00:10:11,880 Speaker 8: and take it from a prescription, they may have to 191 00:10:11,880 --> 00:10:13,800 Speaker 8: pay more out of pocket. So that's not going to 192 00:10:13,800 --> 00:10:17,360 Speaker 8: be a leaving a particularly good taste in folks. Mouths 193 00:10:17,679 --> 00:10:21,880 Speaker 8: once that this actually happens, but it hasn't happened yet. 194 00:10:21,920 --> 00:10:23,840 Speaker 8: So and they did say on the call that this 195 00:10:23,960 --> 00:10:28,319 Speaker 8: is not because there's enormous demand being fulfilled by compounded pharmacies. 196 00:10:28,760 --> 00:10:32,960 Speaker 8: It's literally to do with that inventory management issue. 197 00:10:33,840 --> 00:10:36,320 Speaker 2: Where what are the companies saying Sam about getting this 198 00:10:36,360 --> 00:10:38,280 Speaker 2: in an oral format? I think that might be one 199 00:10:38,320 --> 00:10:41,920 Speaker 2: of the next big I guess mileposts for this type 200 00:10:41,960 --> 00:10:42,720 Speaker 2: of treatment. 201 00:10:43,920 --> 00:10:46,440 Speaker 8: Yeah, I remember, Paul, there's already an oral form of this. 202 00:10:46,559 --> 00:10:49,400 Speaker 8: It's called Robels's. It's from over NOTICEK. It's just a 203 00:10:49,440 --> 00:10:51,280 Speaker 8: tough drug to use because you have to have it 204 00:10:51,360 --> 00:10:54,040 Speaker 8: within about half an hour of eating. You can't take 205 00:10:54,080 --> 00:10:57,080 Speaker 8: it too close or too far from an eating because 206 00:10:57,120 --> 00:10:58,800 Speaker 8: you need an empty stomach. 207 00:10:58,440 --> 00:10:59,360 Speaker 9: Before you take the drug. 208 00:10:59,400 --> 00:11:01,720 Speaker 8: And it's a big dose and maybe the side effect 209 00:11:01,760 --> 00:11:03,959 Speaker 8: profile isn't as great and the weight loss isn't as great. 210 00:11:04,000 --> 00:11:08,400 Speaker 8: So people are trying to develop oral versions of these drugs, 211 00:11:08,400 --> 00:11:12,559 Speaker 8: but also oral drugs that are like normal drugs, small 212 00:11:12,600 --> 00:11:14,160 Speaker 8: molecules that they can swallow as a pill. 213 00:11:14,200 --> 00:11:15,680 Speaker 9: Once today, So that's coming. 214 00:11:16,160 --> 00:11:18,280 Speaker 4: So what do you think shareholders need to watch for 215 00:11:18,480 --> 00:11:21,439 Speaker 4: next when it comes to especially after its outlook disappointed. 216 00:11:23,400 --> 00:11:25,520 Speaker 8: I think we need to see how Q four does. 217 00:11:26,000 --> 00:11:30,240 Speaker 8: So let's hope that that they're current guidance. At least 218 00:11:30,240 --> 00:11:32,640 Speaker 8: they meet it, maybe beat it, that would be nice. 219 00:11:33,880 --> 00:11:37,120 Speaker 8: The issue is then we move into Q four. There's 220 00:11:37,120 --> 00:11:39,640 Speaker 8: an interesting result from a clicker trial that's coming up. 221 00:11:39,679 --> 00:11:42,800 Speaker 8: They've done this before. They're comparing zep bound with wig 222 00:11:43,000 --> 00:11:47,280 Speaker 8: V and I suspect that they're hoping and that that 223 00:11:47,480 --> 00:11:50,040 Speaker 8: data suggests that they might. They will show that it 224 00:11:50,120 --> 00:11:53,840 Speaker 8: has better weight loss. Whether the side effect profile would 225 00:11:53,840 --> 00:11:55,920 Speaker 8: be better or a different time will tell, but that 226 00:11:56,160 --> 00:11:58,600 Speaker 8: there are not many farmer companies do these type of 227 00:11:58,800 --> 00:11:59,760 Speaker 8: head to head trials. 228 00:12:00,600 --> 00:12:02,440 Speaker 9: Did it take some Yeah. 229 00:12:02,320 --> 00:12:04,040 Speaker 5: Yeah, no, I just wanted to get real quick. 230 00:12:04,120 --> 00:12:06,960 Speaker 2: What's the latest thinking on the size of this market? 231 00:12:07,000 --> 00:12:08,120 Speaker 5: I know you guys have done a lot of work 232 00:12:08,160 --> 00:12:08,360 Speaker 5: on this. 233 00:12:09,440 --> 00:12:09,640 Speaker 9: Yeah. 234 00:12:09,679 --> 00:12:12,120 Speaker 8: I think my key's latest numbers that are at ninety 235 00:12:12,160 --> 00:12:16,160 Speaker 8: three billion. I don't remember exactly. It's bag well out 236 00:12:16,200 --> 00:12:17,520 Speaker 8: of nothing exactly. 237 00:12:17,280 --> 00:12:19,920 Speaker 2: Our thanks to Bloomberg Intelligence, director of Research for Global 238 00:12:19,920 --> 00:12:23,280 Speaker 2: Industries and senior pharmaceutical analyst Sam Fizzelli coming up on 239 00:12:23,280 --> 00:12:26,160 Speaker 2: the program. The next US president will wield major power 240 00:12:26,160 --> 00:12:28,760 Speaker 2: in shaping the future of electric vehicles. We'll find out 241 00:12:29,120 --> 00:12:32,160 Speaker 2: in which direction each candidate wants to go. You're listening 242 00:12:32,200 --> 00:12:35,280 Speaker 2: to Bloomberg Intelligence on Bloomberg Radio, providing in dipper research 243 00:12:35,320 --> 00:12:37,199 Speaker 2: and data on two thousand companies and one hundred and 244 00:12:37,240 --> 00:12:40,200 Speaker 2: thirty industries. You can access Bloomberg Intelligence via b I 245 00:12:40,240 --> 00:12:43,199 Speaker 2: go on the terminal. I'm Paul Sweeney, and this is Bloomberg. 246 00:12:48,120 --> 00:12:52,520 Speaker 1: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney 247 00:12:52,800 --> 00:12:54,439 Speaker 1: on Bloomberg Radio. 248 00:12:56,280 --> 00:12:58,480 Speaker 5: I'm Paul Sweeney. Alex Steele is out this week. 249 00:12:58,559 --> 00:13:01,120 Speaker 2: Each week we look at research from Bloomberg and EF 250 00:13:01,160 --> 00:13:03,840 Speaker 2: previously known as New Energy Finance. They're the team at 251 00:13:03,840 --> 00:13:07,040 Speaker 2: Bloomberg that tracks and analyzes the energy transition from commodities 252 00:13:07,080 --> 00:13:11,559 Speaker 2: to power, transport, industries, buildings, and agricultural sectors. This week 253 00:13:11,640 --> 00:13:14,120 Speaker 2: we took a look at the overall EV market and 254 00:13:14,160 --> 00:13:17,440 Speaker 2: the sway US presidents have on fuel economy standards for cars. 255 00:13:17,720 --> 00:13:20,160 Speaker 2: For more guests, Thost, Billy Lipschultz, and I were joined 256 00:13:20,160 --> 00:13:23,920 Speaker 2: by Corey Kantor b n EF, lead US electric vehicle analyst. 257 00:13:24,200 --> 00:13:26,840 Speaker 2: You first asked Corey, how would the EV market change 258 00:13:26,880 --> 00:13:28,320 Speaker 2: under each presidential candidate? 259 00:13:28,600 --> 00:13:32,000 Speaker 10: Everything from federal fuel economy standards. That's the kind of 260 00:13:32,240 --> 00:13:35,000 Speaker 10: miles per gallon of new vehicles which electric vehicles help 261 00:13:35,040 --> 00:13:39,840 Speaker 10: automakers achieve. To the implementation of the Inflation Reduction Act, 262 00:13:39,880 --> 00:13:42,439 Speaker 10: So even though the law has passed now over two 263 00:13:42,520 --> 00:13:44,680 Speaker 10: years ago, you're going to see those loans and grants 264 00:13:44,679 --> 00:13:47,280 Speaker 10: from the federal government impacted all the way up to 265 00:13:47,480 --> 00:13:50,680 Speaker 10: the seventy five hundred dollars Clean Car ev tax credit 266 00:13:50,760 --> 00:13:53,400 Speaker 10: that people know and love in some cases. 267 00:13:53,480 --> 00:13:55,079 Speaker 7: So depending on who wins. 268 00:13:55,120 --> 00:13:57,680 Speaker 10: Obviously with the IRA, you're going to need Congresses input 269 00:13:57,720 --> 00:13:59,680 Speaker 10: on that, but there are things that the Trump administration 270 00:13:59,720 --> 00:14:02,320 Speaker 10: could do very early on on the implementation side to 271 00:14:02,320 --> 00:14:03,559 Speaker 10: make those credits. 272 00:14:03,280 --> 00:14:04,360 Speaker 7: A bit more restrictive. 273 00:14:04,520 --> 00:14:07,320 Speaker 10: So it's going to be big, but also a split 274 00:14:07,400 --> 00:14:09,640 Speaker 10: decision could have an impact too if you have, say 275 00:14:09,640 --> 00:14:13,160 Speaker 10: a Republican Congress with Kamala Harris's president or vice versa, 276 00:14:13,600 --> 00:14:14,040 Speaker 10: and how. 277 00:14:13,880 --> 00:14:16,959 Speaker 11: Does that actually impact the ability for these car makers 278 00:14:17,000 --> 00:14:20,280 Speaker 11: to sell cars? When I look at targets of Biden 279 00:14:20,280 --> 00:14:23,119 Speaker 11: administration having a certain number of evs, I'm from California, 280 00:14:23,160 --> 00:14:25,800 Speaker 11: where they lay out these overly ambitious goals five six, 281 00:14:25,880 --> 00:14:28,240 Speaker 11: seven years down the road and then seemingly chop them 282 00:14:28,280 --> 00:14:29,480 Speaker 11: down when they get closer. 283 00:14:29,680 --> 00:14:31,880 Speaker 10: Yeah, Bailey, I mean even beyond that, there's been a 284 00:14:31,960 --> 00:14:34,160 Speaker 10: kind of back and forth between California and the rest 285 00:14:34,160 --> 00:14:36,160 Speaker 10: of the country for a long time, known as you know, 286 00:14:36,200 --> 00:14:41,080 Speaker 10: the California Advanced Clean Cars to policy, which aims to 287 00:14:41,080 --> 00:14:42,920 Speaker 10: have one hundred percent of all new sales by twenty 288 00:14:43,000 --> 00:14:45,840 Speaker 10: thirty five is electric, eighty percent fully electric, twenty percent 289 00:14:46,080 --> 00:14:48,680 Speaker 10: plug in hybrid. And so last time Trump was elected, 290 00:14:49,040 --> 00:14:51,320 Speaker 10: there was a lot of lawsuits, a lot of uncertainty 291 00:14:51,360 --> 00:14:53,560 Speaker 10: in the market. Makes it very difficult from an automaker 292 00:14:53,600 --> 00:14:56,960 Speaker 10: perspective to actually plan. And so these automakers for a 293 00:14:57,000 --> 00:14:59,200 Speaker 10: long time have wanted both the carrots, which are these 294 00:14:59,240 --> 00:15:02,200 Speaker 10: IRA kind of subsidies and incentives on grants and loans, 295 00:15:02,560 --> 00:15:04,280 Speaker 10: and then they'd be willing to take the stick, which 296 00:15:04,320 --> 00:15:05,880 Speaker 10: is the fuel economy standards. 297 00:15:06,080 --> 00:15:07,840 Speaker 7: So we have to see how it shapes out. 298 00:15:07,880 --> 00:15:10,440 Speaker 10: But from the automakers that we speak to, it's a 299 00:15:10,480 --> 00:15:13,920 Speaker 10: pretty confusing policy environment. But given that the globe is 300 00:15:13,960 --> 00:15:16,880 Speaker 10: moving towards electric vehicles and cleaner cars in general, they 301 00:15:16,920 --> 00:15:19,080 Speaker 10: have to kind of prepare to move that way regardless, 302 00:15:19,080 --> 00:15:21,000 Speaker 10: and it's just how quickly in the US are they 303 00:15:21,040 --> 00:15:22,040 Speaker 10: going to move in that direction. 304 00:15:22,640 --> 00:15:25,800 Speaker 2: The Chinese are moving very aggressively. How do you expect 305 00:15:25,800 --> 00:15:29,160 Speaker 2: them to do outside of China? Will there be market 306 00:15:29,200 --> 00:15:31,520 Speaker 2: for Chinese evs in Europe? 307 00:15:31,760 --> 00:15:32,480 Speaker 5: In the US? 308 00:15:32,880 --> 00:15:34,280 Speaker 7: Yeah, it's a really good question, Paul. 309 00:15:34,360 --> 00:15:36,160 Speaker 10: And you know, looking at the data which we do 310 00:15:36,200 --> 00:15:39,800 Speaker 10: at BNEF, you can see Chinese automakers like BYD making 311 00:15:40,000 --> 00:15:43,280 Speaker 10: upground in places like Brazil, in places like Latin America, 312 00:15:43,360 --> 00:15:45,400 Speaker 10: in places like Israel, you know where you might not 313 00:15:45,520 --> 00:15:49,760 Speaker 10: expect to see Chinese automakers. They've been moving into Europe 314 00:15:50,000 --> 00:15:51,880 Speaker 10: and there's been a pushback with all the tariffs and 315 00:15:51,880 --> 00:15:53,880 Speaker 10: back and forth there. I think that's also why the 316 00:15:53,960 --> 00:15:56,040 Speaker 10: US election does have a big impact, because if there's 317 00:15:56,040 --> 00:15:59,080 Speaker 10: no kind of counter bailing force coming out of the US, 318 00:15:59,160 --> 00:16:02,000 Speaker 10: you see what's going on Volkswagen on the European side, 319 00:16:02,120 --> 00:16:04,320 Speaker 10: it's going to maybe make the road easier for those 320 00:16:04,400 --> 00:16:07,520 Speaker 10: Chinese automakers on electric to kind of shift into those 321 00:16:07,520 --> 00:16:10,800 Speaker 10: export markets. Because if Tesla isn't focused on making more 322 00:16:11,040 --> 00:16:13,600 Speaker 10: affordable EV's, then there's really only going to be one 323 00:16:13,600 --> 00:16:15,960 Speaker 10: major player in town. It doesn't mean, you know, that 324 00:16:16,680 --> 00:16:18,600 Speaker 10: Chinese automakers are going to be the only ones who 325 00:16:18,600 --> 00:16:22,400 Speaker 10: are making mass evs, but it's a pretty big transformation 326 00:16:22,480 --> 00:16:24,840 Speaker 10: at the global auto market level, just like when the 327 00:16:24,920 --> 00:16:26,600 Speaker 10: Japanese automakers came onto the scene. 328 00:16:26,640 --> 00:16:27,880 Speaker 7: So I think that's the way I like to think 329 00:16:27,880 --> 00:16:28,280 Speaker 7: about it. 330 00:16:28,160 --> 00:16:30,240 Speaker 10: It doesn't mean that you know, EV's are going to 331 00:16:30,280 --> 00:16:33,160 Speaker 10: be sold everywhere overnight, but without a kind of other 332 00:16:33,240 --> 00:16:35,560 Speaker 10: major automaker, that's where I think a lot of these 333 00:16:35,560 --> 00:16:36,440 Speaker 10: countries are going to turn. 334 00:16:36,880 --> 00:16:41,040 Speaker 11: And if we do see tariffs on some magnitude, yeah, 335 00:16:41,120 --> 00:16:44,320 Speaker 11: what does that actually mean for the market for Elon 336 00:16:44,440 --> 00:16:47,560 Speaker 11: Musk's Tesla, who he's had a very prominent role campaigning 337 00:16:47,600 --> 00:16:49,480 Speaker 11: for Donald Trump as well as other companies. 338 00:16:49,960 --> 00:16:52,240 Speaker 10: I think when it comes to US tariffs, you know 339 00:16:52,280 --> 00:16:54,680 Speaker 10: that could buy you. I think some time you look 340 00:16:54,720 --> 00:16:57,120 Speaker 10: at the one hundred percent tariff that the buy An 341 00:16:57,120 --> 00:17:00,040 Speaker 10: Administration put on Chinese EV makers. While there weren't that 342 00:17:00,080 --> 00:17:03,640 Speaker 10: many Chinese EV makers selling electric vehicles here currently, Jilie Group, 343 00:17:03,640 --> 00:17:06,600 Speaker 10: which owns Volvo and Pollstar, was pretty much the major 344 00:17:06,920 --> 00:17:09,760 Speaker 10: automaker impacted. So that's why you saw those prices. Or 345 00:17:09,920 --> 00:17:12,280 Speaker 10: the Volbo Ex thirty, which is a really popular model 346 00:17:12,400 --> 00:17:15,920 Speaker 10: globally not sold here yet. It's keeping byd Out for 347 00:17:15,960 --> 00:17:18,760 Speaker 10: a little bit longer. But if the automakers like GM 348 00:17:18,840 --> 00:17:21,800 Speaker 10: or Stillants or Forward aren't helped or don't move towards 349 00:17:21,800 --> 00:17:23,320 Speaker 10: electric vehicles, you know, maybe. 350 00:17:23,080 --> 00:17:24,919 Speaker 7: It buys you two, three, four years. 351 00:17:25,080 --> 00:17:28,080 Speaker 10: But all the while, BYD and other Chinese automakers are 352 00:17:28,119 --> 00:17:31,200 Speaker 10: making more investments in battery technology, and I think, regardless 353 00:17:31,200 --> 00:17:32,760 Speaker 10: of who wins, you need to see more of those 354 00:17:32,800 --> 00:17:35,280 Speaker 10: investments here on batteries because those are going to be 355 00:17:35,280 --> 00:17:37,760 Speaker 10: important not only for electric vehicles but for the grid 356 00:17:37,800 --> 00:17:40,640 Speaker 10: as well, and you're letting China get a major competitive advantage. 357 00:17:40,840 --> 00:17:44,080 Speaker 2: What are the US manufacturers doing? Have they pulled back 358 00:17:44,119 --> 00:17:45,200 Speaker 2: on their EV investments. 359 00:17:45,480 --> 00:17:47,960 Speaker 10: We've definitely seen at a global level those EV targets 360 00:17:47,960 --> 00:17:50,480 Speaker 10: moving back. I think for it in particular, you saw 361 00:17:50,520 --> 00:17:53,080 Speaker 10: them move their new EV models out a couple of years, 362 00:17:53,119 --> 00:17:55,280 Speaker 10: so it's less so on the dollar amount and more 363 00:17:55,320 --> 00:17:56,320 Speaker 10: pushing it back. 364 00:17:56,760 --> 00:17:58,280 Speaker 7: GM has seen better EV sales. 365 00:17:58,320 --> 00:17:59,960 Speaker 10: In fact, the third quarter this year was the best 366 00:18:00,280 --> 00:18:02,080 Speaker 10: in the US that they had seen to date, with 367 00:18:02,160 --> 00:18:05,440 Speaker 10: the Equinox and Blazer and Lyric really taking off. To 368 00:18:05,800 --> 00:18:08,280 Speaker 10: make one bright point, Bailey, your home state of California 369 00:18:08,320 --> 00:18:10,760 Speaker 10: actually saw in that third quarter the best TV shriff 370 00:18:10,800 --> 00:18:13,680 Speaker 10: sales they've ever had at twenty seven percent, So that's 371 00:18:13,880 --> 00:18:17,040 Speaker 10: twenty three percent about almost twenty four percent fully electric, 372 00:18:17,080 --> 00:18:18,119 Speaker 10: the rest plug in hybrid. 373 00:18:19,119 --> 00:18:21,520 Speaker 5: So it's pretty good. Calif Like, what's the US average? 374 00:18:21,680 --> 00:18:24,880 Speaker 10: US average has been at about ten percent now nine 375 00:18:24,920 --> 00:18:25,639 Speaker 10: and a half ten percent. 376 00:18:25,840 --> 00:18:26,760 Speaker 9: Just yeah, far. 377 00:18:27,280 --> 00:18:30,760 Speaker 10: California twice twice the average. But what's significant about that 378 00:18:30,800 --> 00:18:33,480 Speaker 10: is California had been stuck at about twenty five percent. 379 00:18:33,960 --> 00:18:36,679 Speaker 10: Tesla actually for four quarters in a row in California 380 00:18:36,720 --> 00:18:40,920 Speaker 10: has seen decline in deliveries because of I think some 381 00:18:40,960 --> 00:18:44,120 Speaker 10: of the kind of Tesla or Musk fatigue, and so 382 00:18:44,160 --> 00:18:47,199 Speaker 10: to see California begin to grow again from the other automakers, 383 00:18:47,200 --> 00:18:49,760 Speaker 10: even if Tesla's pullback is pretty significant, we. 384 00:18:49,760 --> 00:18:53,440 Speaker 2: Stick with the automotive space first. Chinese carmaker BYD notched 385 00:18:53,520 --> 00:18:56,760 Speaker 2: up another win over Tesla this week, reporting quarterly revenue 386 00:18:56,760 --> 00:18:58,720 Speaker 2: that beat Tesla for the first time since the pair 387 00:18:58,760 --> 00:19:02,560 Speaker 2: have gone head to head, and global electric vehicle sales well. 388 00:19:02,640 --> 00:19:05,320 Speaker 2: Volkswagen announced a cost saving proposal to keep its German 389 00:19:05,400 --> 00:19:08,639 Speaker 2: plants open, after announcing plans earlier in the week to 390 00:19:08,640 --> 00:19:11,240 Speaker 2: close at least three factories in Germany and eliminate thousands 391 00:19:11,320 --> 00:19:14,199 Speaker 2: of jobs amid struggles with poor demand in Europe and 392 00:19:14,240 --> 00:19:17,800 Speaker 2: intensifying competition in China. For more normal INNDON, I spoke 393 00:19:17,840 --> 00:19:20,600 Speaker 2: with Bloomberg Intelligence senior auto analyst Steve Mann. 394 00:19:20,880 --> 00:19:22,119 Speaker 5: B y D is on a roll. 395 00:19:22,880 --> 00:19:25,560 Speaker 12: I mean, the whole EV market and China is on 396 00:19:25,600 --> 00:19:30,120 Speaker 12: a role. It's displacing you know, ice vehicles, internal conventionment 397 00:19:30,200 --> 00:19:33,960 Speaker 12: engine vehicles. Uh, and it's growing, you know, double digits. 398 00:19:34,440 --> 00:19:36,520 Speaker 7: You know what b I D. You know, BID. 399 00:19:36,240 --> 00:19:39,560 Speaker 12: Eclipsing Tesla's revenues. Is that's not the end of it, 400 00:19:40,240 --> 00:19:44,120 Speaker 12: you know, I think the Chinese automakers have a really 401 00:19:44,119 --> 00:19:49,000 Speaker 12: long term goal to really expand globally beyond their borders. Look, 402 00:19:49,119 --> 00:19:53,600 Speaker 12: the Japanese are really good at controlling costs in making cars. 403 00:19:54,560 --> 00:19:59,160 Speaker 12: You know, the Western automakers basically developed the current you know, 404 00:19:59,359 --> 00:20:04,800 Speaker 12: automotive market around the world. So China wants to have 405 00:20:04,840 --> 00:20:09,359 Speaker 12: a stake, have a claim in the automotive industry, and 406 00:20:09,480 --> 00:20:10,960 Speaker 12: EV is the way to go, and they want to 407 00:20:11,359 --> 00:20:14,840 Speaker 12: and they want to sell everyone they can build, not 408 00:20:14,880 --> 00:20:17,760 Speaker 12: only locally but internationally. 409 00:20:18,400 --> 00:20:20,000 Speaker 13: So, I mean, we know that Tesla has really been 410 00:20:20,119 --> 00:20:23,120 Speaker 13: focus this year as we've been seeing sharers dipping into 411 00:20:23,160 --> 00:20:24,720 Speaker 13: the red and then back into the green. And I'm 412 00:20:24,760 --> 00:20:27,679 Speaker 13: looking at the company up about one point two percent 413 00:20:27,760 --> 00:20:29,720 Speaker 13: this year. But then when I'm looking at bid, we're 414 00:20:29,720 --> 00:20:32,639 Speaker 13: seeing shares up thirty one percent this year. So when 415 00:20:32,680 --> 00:20:35,639 Speaker 13: you're looking at the comparison, it's definitely very drastic. What 416 00:20:35,760 --> 00:20:40,399 Speaker 13: is keeping these US EV makers behind? Is it appetite 417 00:20:40,440 --> 00:20:43,040 Speaker 13: from consumers? What exactly is the drag here? 418 00:20:43,800 --> 00:20:47,440 Speaker 12: That's that's a great question. I think the Chinese automakers 419 00:20:47,920 --> 00:20:52,360 Speaker 12: know their consumers a lot better than the Western automakers. 420 00:20:53,000 --> 00:20:57,919 Speaker 12: You know, Chinese automakers, Chinese industry, auto industry has about 421 00:20:57,960 --> 00:21:02,720 Speaker 12: two hundred EV models for the mass market. You know 422 00:21:02,760 --> 00:21:04,840 Speaker 12: that it's it's a lot more than what you find 423 00:21:04,880 --> 00:21:07,320 Speaker 12: in the US. You know, you can probably count them 424 00:21:07,680 --> 00:21:10,399 Speaker 12: with your fingers in the US in terms of number 425 00:21:10,720 --> 00:21:15,080 Speaker 12: of models under you know, fifty thousand dollars. So they, 426 00:21:15,480 --> 00:21:19,560 Speaker 12: you know, the Chinese automakers know the Chinese consumer. They 427 00:21:19,600 --> 00:21:24,760 Speaker 12: want cheaper evs, they want you know, cool user interface, 428 00:21:25,440 --> 00:21:29,159 Speaker 12: high tech user interface, and you know, the Chinese automakers 429 00:21:29,200 --> 00:21:33,600 Speaker 12: are able to deliver those what the consumer wants over there. 430 00:21:35,160 --> 00:21:38,280 Speaker 2: So talk to us about just the rest of the world. 431 00:21:38,280 --> 00:21:38,840 Speaker 7: In EV. 432 00:21:40,400 --> 00:21:43,400 Speaker 2: Consumption here, Steve, because I think it differs around the world. 433 00:21:43,400 --> 00:21:46,360 Speaker 2: It feels like it's it's much weaker than expected here 434 00:21:46,359 --> 00:21:48,879 Speaker 2: in the US, but other parts of the world adoptions 435 00:21:48,960 --> 00:21:52,200 Speaker 2: much better. How did how did the companies think about it? 436 00:21:52,960 --> 00:21:55,280 Speaker 12: I mean, there's a there's a few things that actually 437 00:21:55,800 --> 00:21:58,920 Speaker 12: are presenting our hurdles for EVA adoptions, especially in the 438 00:21:59,000 --> 00:22:05,040 Speaker 12: Western hemisphere Western world. It's really the infrastructure. It's really 439 00:22:05,080 --> 00:22:11,200 Speaker 12: the affordability of the vehicles. Look, you know, charging infrastructure. 440 00:22:11,320 --> 00:22:14,840 Speaker 12: It's only in the US, it's only a fraction of 441 00:22:14,880 --> 00:22:18,879 Speaker 12: what it is in China. And again EV models, I 442 00:22:18,920 --> 00:22:22,639 Speaker 12: think EV models are lacking, you know, especially the ones 443 00:22:22,800 --> 00:22:25,560 Speaker 12: under fifty thousand. But if you look in at twenty 444 00:22:25,600 --> 00:22:29,200 Speaker 12: twenty six and twenty twenty seven, you know there's gonna 445 00:22:29,200 --> 00:22:32,560 Speaker 12: be a whole slew of cheaper EV models from GM, 446 00:22:32,680 --> 00:22:37,280 Speaker 12: from Ford. Volkswagen's thinking about launching the ID two, which 447 00:22:37,320 --> 00:22:40,200 Speaker 12: is under thirty thousands. The Lentist is doing the same thing, 448 00:22:40,320 --> 00:22:43,359 Speaker 12: working with the Chinese partner, Leap Motor. 449 00:22:43,840 --> 00:22:45,439 Speaker 5: So I don't want. 450 00:22:45,320 --> 00:22:50,600 Speaker 12: To write off the you know, EV market, especially in 451 00:22:50,640 --> 00:22:53,320 Speaker 12: the West, just yet. I think there are hurdles to 452 00:22:53,400 --> 00:22:57,400 Speaker 12: work through the automakers are doing that. They're expanding their 453 00:22:57,400 --> 00:23:00,080 Speaker 12: supply chain to make sure they're able to build the 454 00:23:00,200 --> 00:23:04,520 Speaker 12: vehicles as cheap as possible and more affordable for the 455 00:23:05,480 --> 00:23:07,000 Speaker 12: mass market, the general consumer. 456 00:23:07,880 --> 00:23:10,639 Speaker 13: So when we're thinking about ev companies here in the US, 457 00:23:11,160 --> 00:23:14,040 Speaker 13: my main curiosity when I think about switching to an 458 00:23:14,080 --> 00:23:16,800 Speaker 13: EVCR myself and I want to do that, is there 459 00:23:16,920 --> 00:23:20,480 Speaker 13: enough infrastructure to support this transition. Of course, regionally maybe 460 00:23:20,520 --> 00:23:22,359 Speaker 13: if you think about California, they're going to have charging 461 00:23:22,400 --> 00:23:25,040 Speaker 13: stations everywhere. But it's also part of the concern is 462 00:23:25,080 --> 00:23:27,240 Speaker 13: the consumer wondering whether or not they're going to be 463 00:23:27,280 --> 00:23:29,119 Speaker 13: able to find a charging station as quickly as they 464 00:23:29,160 --> 00:23:31,880 Speaker 13: can find a gas station. Have there been developments there? 465 00:23:32,800 --> 00:23:35,879 Speaker 12: No, there is development there. There's a lot of charging 466 00:23:36,440 --> 00:23:40,600 Speaker 12: stations going up, but we're nowhere near what we need. 467 00:23:40,720 --> 00:23:44,720 Speaker 12: Like if you look at again comparing China in the US, 468 00:23:45,720 --> 00:23:48,720 Speaker 12: US only, and the number of charging station in the 469 00:23:48,840 --> 00:23:52,080 Speaker 12: US is only ten percent fifteen percent of what China has, 470 00:23:52,520 --> 00:23:57,480 Speaker 12: So there's still a lot more to go. So you know, 471 00:23:57,640 --> 00:24:00,520 Speaker 12: there's you know, there's the Infrastructure Act that's in place 472 00:24:00,600 --> 00:24:03,240 Speaker 12: to help that, but I think there needs to be 473 00:24:03,480 --> 00:24:07,359 Speaker 12: more private investments a lot of the consumers today that 474 00:24:07,480 --> 00:24:11,840 Speaker 12: on evs have to install chargers at home just so 475 00:24:11,880 --> 00:24:14,480 Speaker 12: that they can charge and not rely on the public 476 00:24:14,800 --> 00:24:15,960 Speaker 12: public infrastructure. 477 00:24:16,280 --> 00:24:19,000 Speaker 2: Our thanks to Bloomberg Intelligence. Senior Auto Adam Steve Mann. 478 00:24:19,240 --> 00:24:21,720 Speaker 2: Coming up on the program, we explore the fragility of 479 00:24:21,800 --> 00:24:23,920 Speaker 2: the commercial mortgage backed securities market. 480 00:24:24,160 --> 00:24:25,560 Speaker 5: You're listening to Bloomberg. 481 00:24:25,160 --> 00:24:28,119 Speaker 2: Intelligence on Bloomberg Radio, providing in research and data on 482 00:24:28,160 --> 00:24:30,960 Speaker 2: two thousand companies in one hundred and thirty industries. You 483 00:24:30,960 --> 00:24:33,960 Speaker 2: can access Bloomberg Intelligence via b I go on the terminal. 484 00:24:34,119 --> 00:24:36,320 Speaker 2: I'm Paul Sweeney. It's thirty minutes past the hour. 485 00:24:36,640 --> 00:24:37,639 Speaker 5: This is Bloomberg. 486 00:24:42,600 --> 00:24:46,560 Speaker 1: You're listening to Bloomberg Intelligence with Alex Steel and Paul 487 00:24:46,600 --> 00:24:49,040 Speaker 1: Sweeney on Bloomberg Radio. 488 00:24:50,119 --> 00:24:52,640 Speaker 5: I'm Paul Sweeney. Alex Steel is off this week. 489 00:24:52,840 --> 00:24:55,520 Speaker 2: For the first time since the Great Financial Crisis, buyers 490 00:24:55,560 --> 00:24:58,800 Speaker 2: have top rated commercial mortgage backed securities are suffering losses, 491 00:24:59,040 --> 00:25:01,239 Speaker 2: and within this market, pain is most acute in a 492 00:25:01,280 --> 00:25:04,840 Speaker 2: new breed of bonds known as single asset single bars 493 00:25:04,960 --> 00:25:07,800 Speaker 2: or Sasby's. For more guess sos Chessman and I were 494 00:25:07,840 --> 00:25:10,639 Speaker 2: joined by Carmen Arroyo Bloomberg News Credit reporter. 495 00:25:11,000 --> 00:25:14,320 Speaker 3: In May, we saw the first triple A bond commercial 496 00:25:14,359 --> 00:25:17,800 Speaker 3: mortgage triple A bond being hit backed by a single 497 00:25:17,840 --> 00:25:21,119 Speaker 3: office property, and then we started like digging into basically 498 00:25:21,200 --> 00:25:23,400 Speaker 3: the data to see what other buildings could get hit 499 00:25:23,440 --> 00:25:27,199 Speaker 3: and the results there's a few a ton of Like 500 00:25:27,240 --> 00:25:30,240 Speaker 3: the office properties across across the US have been distressed 501 00:25:30,280 --> 00:25:33,919 Speaker 3: for years, it just takes a long time for that 502 00:25:34,000 --> 00:25:36,879 Speaker 3: to reach bond holders, and now it's starting to get there. 503 00:25:37,800 --> 00:25:39,600 Speaker 3: So we kind of like analyze the data. We saw 504 00:25:39,640 --> 00:25:42,800 Speaker 3: at least like twelve other buildings are said to have 505 00:25:42,840 --> 00:25:45,359 Speaker 3: some type of loss. Some will be at the triple 506 00:25:45,400 --> 00:25:48,160 Speaker 3: A level, some will be just the investment grade portion. 507 00:25:49,000 --> 00:25:50,640 Speaker 3: There's definitely a lot of more pain to come. 508 00:25:50,960 --> 00:25:53,679 Speaker 4: Which regions across the US are most vulnerable. 509 00:25:54,480 --> 00:25:57,280 Speaker 3: It's all over, It's all over the US. Actually, we 510 00:25:57,320 --> 00:25:59,840 Speaker 3: saw there's buildings in New York, of course, Chicago, lays 511 00:25:59,840 --> 00:26:02,720 Speaker 3: And and Cisco, but there's also buildings in Kansas City. 512 00:26:02,760 --> 00:26:04,160 Speaker 3: Like it's it's kind of everywhere. 513 00:26:05,240 --> 00:26:08,800 Speaker 2: But if I'm holding a triple A bond, I expect 514 00:26:08,800 --> 00:26:12,479 Speaker 2: to get paid back here. So what's happening to these bonds? 515 00:26:12,480 --> 00:26:15,080 Speaker 2: Are they coming up for maturity and then the owner 516 00:26:15,119 --> 00:26:17,760 Speaker 2: has to refinance the bond or how's this soft playing out? 517 00:26:18,160 --> 00:26:18,440 Speaker 7: Sure? 518 00:26:18,480 --> 00:26:21,119 Speaker 3: So every triple A bone holder thinks they're going to 519 00:26:21,160 --> 00:26:25,600 Speaker 3: get paid back, that's why you buy it, But they, 520 00:26:25,800 --> 00:26:27,800 Speaker 3: like a lot of these buildings have not been receiving 521 00:26:27,840 --> 00:26:30,720 Speaker 3: interest on the bonds for a while, and the minute 522 00:26:30,760 --> 00:26:33,639 Speaker 3: like the presoul's drop and kind of like the owners 523 00:26:33,640 --> 00:26:36,760 Speaker 3: of the buildings get rid of them or like sell them. 524 00:26:37,000 --> 00:26:41,640 Speaker 3: The losses are realized, and the the gist of it 525 00:26:41,680 --> 00:26:44,080 Speaker 3: is that the buildings are worth like a fraction of 526 00:26:44,080 --> 00:26:45,960 Speaker 3: where they were worth like a few years ago. So 527 00:26:46,000 --> 00:26:48,919 Speaker 3: there's just not enough money to pay back everyone, not 528 00:26:48,960 --> 00:26:51,439 Speaker 3: even the triple A holders, and that that's the whole issue, 529 00:26:51,480 --> 00:26:53,600 Speaker 3: Like the real estate is just not worth it. 530 00:26:53,720 --> 00:26:56,159 Speaker 4: When you're speaking to triple A bondholders, what are they 531 00:26:56,240 --> 00:26:58,280 Speaker 4: telling you as far as why they might still be 532 00:26:58,320 --> 00:27:00,800 Speaker 4: holding onto that? That's the risk reward. 533 00:27:01,680 --> 00:27:04,520 Speaker 3: I A lot of the Triple A bondholders will get 534 00:27:04,560 --> 00:27:09,360 Speaker 3: some money back, like the lower trenches won't. And I'm 535 00:27:09,359 --> 00:27:11,960 Speaker 3: not sure if there's some market for that type of 536 00:27:12,000 --> 00:27:14,960 Speaker 3: like those type of bonds at the bit they may want. 537 00:27:14,720 --> 00:27:16,639 Speaker 2: Them, and I'm looking at I mean, you have a 538 00:27:17,000 --> 00:27:19,159 Speaker 2: big take story, which means it has great graphics in 539 00:27:19,160 --> 00:27:20,000 Speaker 2: addition to being. 540 00:27:19,920 --> 00:27:21,240 Speaker 5: Well reported, well sourced. 541 00:27:21,600 --> 00:27:23,840 Speaker 2: Some of these buildings, I mean New York, Chicago, La 542 00:27:24,160 --> 00:27:26,320 Speaker 2: La West. I mean five fifty five West fifth Street, 543 00:27:26,359 --> 00:27:27,840 Speaker 2: seven to twenty five South Figaroa. 544 00:27:27,960 --> 00:27:30,240 Speaker 5: I know that building. But these scenes are being. 545 00:27:30,119 --> 00:27:33,960 Speaker 2: Valued at significant discounts, right, and some not even covering 546 00:27:33,960 --> 00:27:37,159 Speaker 2: the amount of the outstanding loan. So that's where the 547 00:27:37,720 --> 00:27:38,880 Speaker 2: that's where the problems come in. 548 00:27:39,040 --> 00:27:41,199 Speaker 3: Yeah, that's the problem. And it's also like a lot 549 00:27:41,200 --> 00:27:43,479 Speaker 3: of those buildings depend on one single tenant. So the 550 00:27:43,520 --> 00:27:46,800 Speaker 3: minute that tenant's like, look my leads is up, I'm leaving. 551 00:27:46,840 --> 00:27:49,480 Speaker 3: I want a newer office. This building is really old, 552 00:27:50,359 --> 00:27:53,280 Speaker 3: the bonds just shrop in price because that's where they're 553 00:27:53,280 --> 00:27:54,000 Speaker 3: getting the income. 554 00:27:54,240 --> 00:27:57,600 Speaker 4: I think anytime it comes to anything revolving around real estate, 555 00:27:57,680 --> 00:27:59,680 Speaker 4: as we know very well, people want to harken back 556 00:27:59,720 --> 00:28:01,760 Speaker 4: to the global financial crisis in two thousand e but 557 00:28:01,840 --> 00:28:04,679 Speaker 4: this is a very different situation, especially coming out of 558 00:28:04,680 --> 00:28:06,600 Speaker 4: the pandemic, and talk to us more about how this 559 00:28:06,640 --> 00:28:09,720 Speaker 4: is a very small subset of the bond market. 560 00:28:09,440 --> 00:28:12,040 Speaker 3: When you're looking at this, yes, definitely, like there's definitely 561 00:28:12,040 --> 00:28:14,080 Speaker 3: some type of eco to the like similar to the 562 00:28:14,080 --> 00:28:16,440 Speaker 3: financial crisis in the sense that like that you don't 563 00:28:16,480 --> 00:28:18,600 Speaker 3: really see losses on the principal level and triple A 564 00:28:18,680 --> 00:28:22,439 Speaker 3: bonds like that hasn't happened since OAIDM. But again, like 565 00:28:22,480 --> 00:28:25,280 Speaker 3: it's just a few bonds within the commercial mortgage backed 566 00:28:25,280 --> 00:28:26,440 Speaker 3: securities market. 567 00:28:26,480 --> 00:28:28,320 Speaker 4: Right, So when you're speaking with your sources, I mean, 568 00:28:28,400 --> 00:28:31,399 Speaker 4: what are the risks of other broader ripple effects or 569 00:28:31,400 --> 00:28:34,040 Speaker 4: any sort of other red flags potentially brewing. And then 570 00:28:34,040 --> 00:28:36,840 Speaker 4: maybe the off side of that where there's more optimism 571 00:28:36,920 --> 00:28:37,760 Speaker 4: of what could happen. 572 00:28:38,200 --> 00:28:40,520 Speaker 3: Yeah, I think like the risk is mainly for any 573 00:28:40,520 --> 00:28:44,400 Speaker 3: building that's old and that the tenants are walking, there's 574 00:28:44,440 --> 00:28:47,120 Speaker 3: going to be issues. But if any new building that 575 00:28:47,240 --> 00:28:49,680 Speaker 3: like you know, has a great reputation has a lot 576 00:28:49,760 --> 00:28:52,640 Speaker 3: of tenants, like there's that market is kind of booming 577 00:28:52,720 --> 00:28:55,480 Speaker 3: like right now in new issue markets, like buyers are 578 00:28:55,520 --> 00:28:58,040 Speaker 3: like just gobbling up the dead like, so it really 579 00:28:58,040 --> 00:28:59,240 Speaker 3: depends on the building. 580 00:28:59,040 --> 00:29:02,360 Speaker 2: Commentserve sense for you're reporting that the office real estate 581 00:29:02,400 --> 00:29:05,160 Speaker 2: market is at are near bottom or anybody calling that 582 00:29:05,280 --> 00:29:06,440 Speaker 2: or too, Yeah, a lot. 583 00:29:06,400 --> 00:29:08,400 Speaker 3: Of people are calling that. Like when we start to 584 00:29:08,440 --> 00:29:12,600 Speaker 3: see the office buildings get sold, that's where we've reached 585 00:29:12,640 --> 00:29:14,560 Speaker 3: the bottom and then everything is going to go up. 586 00:29:14,640 --> 00:29:17,640 Speaker 4: Is there a time period timeline as far as how 587 00:29:17,680 --> 00:29:18,400 Speaker 4: long that could take. 588 00:29:18,520 --> 00:29:21,560 Speaker 3: Yeah, it can take a long time because the leases 589 00:29:21,600 --> 00:29:24,040 Speaker 3: are so long that tenants may be locked in for 590 00:29:24,080 --> 00:29:27,440 Speaker 3: like years. But most people are saying it's between now 591 00:29:27,440 --> 00:29:28,480 Speaker 3: in the next few months. 592 00:29:28,800 --> 00:29:31,960 Speaker 2: Thanks to Bloomberg Credit reporter Carmen Arroyo. Next, we look 593 00:29:32,000 --> 00:29:35,000 Speaker 2: at bank earnings. UBS posted third quarter profits that almost 594 00:29:35,040 --> 00:29:38,480 Speaker 2: doubled expectations, adding to evidence that the bank's integration of 595 00:29:38,480 --> 00:29:42,080 Speaker 2: Credit Suite is on track. For more guests. Alison Williams, 596 00:29:42,240 --> 00:29:46,080 Speaker 2: Bloomberg Intelligence Senior Analysts, Global Banks Asset Managers breaks down 597 00:29:46,120 --> 00:29:46,680 Speaker 2: the reports. 598 00:29:47,080 --> 00:29:50,120 Speaker 14: So a really strong quarter. Fundamentals look good. 599 00:29:50,320 --> 00:29:53,680 Speaker 15: I think there are some concerns about capital, but people 600 00:29:53,720 --> 00:29:58,200 Speaker 15: look at their business. Sixty percent growth in their America's 601 00:29:58,960 --> 00:30:02,720 Speaker 15: trading business, so wow is the word. It was a 602 00:30:02,880 --> 00:30:06,480 Speaker 15: record record third quarter trading for them. 603 00:30:06,600 --> 00:30:09,040 Speaker 14: Keep in mind that third quarter tends to be weak, so. 604 00:30:10,400 --> 00:30:13,960 Speaker 15: But it was the strongest third quarter they've ever had 605 00:30:14,080 --> 00:30:17,240 Speaker 15: and that was really due to cash, equities and derivatives 606 00:30:18,120 --> 00:30:21,280 Speaker 15: strengths of the bank. So twenty seven percent growth really 607 00:30:22,200 --> 00:30:24,480 Speaker 15: looking good and a lot of momentum coming into the 608 00:30:24,520 --> 00:30:25,120 Speaker 15: fourth quarter. 609 00:30:25,600 --> 00:30:27,240 Speaker 14: The other positive for UBS. 610 00:30:27,320 --> 00:30:31,960 Speaker 15: You know, that core wealth franchise is really what sets 611 00:30:32,000 --> 00:30:36,640 Speaker 15: them apart, and they did have very strong flows inflows 612 00:30:36,680 --> 00:30:40,760 Speaker 15: across all the regions, especially Asia, so that's also very good. 613 00:30:41,200 --> 00:30:44,240 Speaker 15: And then on the deal execution side, we also like 614 00:30:44,320 --> 00:30:46,440 Speaker 15: what we're seeing there in terms of. 615 00:30:46,320 --> 00:30:47,920 Speaker 14: The cost progress. 616 00:30:48,200 --> 00:30:51,320 Speaker 15: You know, the grossed cost saves are over fifty percent 617 00:30:52,320 --> 00:30:55,920 Speaker 15: the way there, so that's a positive. The non core unit, 618 00:30:56,040 --> 00:30:57,840 Speaker 15: so that's you know, stuff they want to get rid of. 619 00:30:58,320 --> 00:31:02,400 Speaker 15: They're making cuts there faster than expected. But capital, as 620 00:31:02,400 --> 00:31:04,400 Speaker 15: I said, that was the one thing I think, you know, 621 00:31:04,440 --> 00:31:07,360 Speaker 15: investors are still a little bit skittish on. They did 622 00:31:08,080 --> 00:31:12,640 Speaker 15: actually take a cut to their capital ratio in the 623 00:31:12,720 --> 00:31:16,720 Speaker 15: quarter basically because they voluntarily are kind of giving up 624 00:31:16,880 --> 00:31:20,440 Speaker 15: some accounting relief. So you know, I think that that's 625 00:31:20,480 --> 00:31:24,280 Speaker 15: you know, that's accounting is sort of just noise in 626 00:31:24,360 --> 00:31:28,440 Speaker 15: my view. But they did say that, you know, they're 627 00:31:28,480 --> 00:31:31,360 Speaker 15: not sure if when they report the fourth quarter of February, 628 00:31:31,640 --> 00:31:32,760 Speaker 15: if they're going to be able to give. 629 00:31:32,680 --> 00:31:33,920 Speaker 14: Guidance on buybacks. 630 00:31:34,480 --> 00:31:39,880 Speaker 15: And that's because you know, while they're executing on this deal, fundamentally, 631 00:31:40,880 --> 00:31:43,840 Speaker 15: regulators you know, are concerned about the size and they 632 00:31:43,880 --> 00:31:45,640 Speaker 15: may force them to hold more capital. 633 00:31:46,120 --> 00:31:48,680 Speaker 2: How representative is U B s ubs of kind of 634 00:31:48,720 --> 00:31:52,280 Speaker 2: some of the other European banks, Allison, So. 635 00:31:52,760 --> 00:31:56,880 Speaker 15: It's interesting that you know, you banced versus the other banks. 636 00:31:56,880 --> 00:32:00,280 Speaker 15: They are more skewed to the equities business. They have 637 00:32:00,320 --> 00:32:03,480 Speaker 15: a very strong US presence, as you said, they also 638 00:32:03,520 --> 00:32:05,800 Speaker 15: tend to be strong in Asia, and we really saw 639 00:32:05,880 --> 00:32:06,360 Speaker 15: a lot. 640 00:32:06,160 --> 00:32:08,800 Speaker 14: Of strength their late quarter that benefited. 641 00:32:08,840 --> 00:32:12,400 Speaker 15: You know, the companies such as JP Morgan and Morgan Stanley. 642 00:32:13,120 --> 00:32:15,760 Speaker 15: Deutsche Bank does not have the equities business, but they 643 00:32:15,800 --> 00:32:19,080 Speaker 15: were very strong in thick But generally we did hear 644 00:32:19,360 --> 00:32:24,400 Speaker 15: about strength across regions, across cash and derivatives, and derivatives 645 00:32:24,600 --> 00:32:27,240 Speaker 15: is a strength for those two French banks. 646 00:32:27,360 --> 00:32:29,240 Speaker 2: We wrap up the show by looking ahead towards the 647 00:32:29,320 --> 00:32:33,080 Speaker 2: US presidential elections, specifically the impact that business leaders can 648 00:32:33,120 --> 00:32:36,280 Speaker 2: make by advocating for safe and secure elections. For more. 649 00:32:36,480 --> 00:32:39,800 Speaker 2: Billy Lipschultz and I spoke with rhtt Budle, CEO of 650 00:32:39,880 --> 00:32:41,480 Speaker 2: Public Private Strategies. 651 00:32:41,600 --> 00:32:43,400 Speaker 16: So first of all, I mean, you know, America, as 652 00:32:43,440 --> 00:32:46,200 Speaker 16: we know, you know, over the last you know, set 653 00:32:46,200 --> 00:32:49,720 Speaker 16: of election cycles has primarily had very safe and secure elections. 654 00:32:49,720 --> 00:32:53,280 Speaker 16: And I think we're feeling confident about all the elections 655 00:32:53,280 --> 00:32:55,880 Speaker 16: to date, and many of the you know, state local 656 00:32:55,880 --> 00:32:58,960 Speaker 16: officius have worked very hard to prepare. I think, you know, 657 00:32:59,000 --> 00:33:03,160 Speaker 16: one of the big questions is, you know, we probably 658 00:33:03,200 --> 00:33:05,600 Speaker 16: will not have the exact results of the election on 659 00:33:05,640 --> 00:33:08,400 Speaker 16: election night, and so you know, it might be until 660 00:33:08,400 --> 00:33:10,960 Speaker 16: Saturday or Sunday until we know an official winner. And 661 00:33:11,000 --> 00:33:12,720 Speaker 16: so one of the pieces that we've been thinking a 662 00:33:12,760 --> 00:33:15,400 Speaker 16: lot about is really making sure that folks are preparing 663 00:33:15,440 --> 00:33:17,320 Speaker 16: for that, that they know that every vote is still 664 00:33:17,360 --> 00:33:20,280 Speaker 16: being counted and that the process might just take a while. 665 00:33:20,320 --> 00:33:22,880 Speaker 16: But that is the important role of democracy, making sure 666 00:33:22,920 --> 00:33:26,920 Speaker 16: every vote gets counted, and particularly for business owners, understanding 667 00:33:26,960 --> 00:33:29,880 Speaker 16: that this sort of period of uncertainty is a really 668 00:33:29,880 --> 00:33:32,600 Speaker 16: important moment for businesses to be able to you know, 669 00:33:32,640 --> 00:33:34,760 Speaker 16: bring some calm to the market, to be able to 670 00:33:34,800 --> 00:33:37,440 Speaker 16: say this is how democracy plays out, not just in 671 00:33:37,480 --> 00:33:38,920 Speaker 16: the role that they play in the markets, but also 672 00:33:38,960 --> 00:33:41,240 Speaker 16: in the role that they play as community leaders. You know, 673 00:33:41,280 --> 00:33:43,440 Speaker 16: for a lot of CEOs who have employees, this can 674 00:33:43,480 --> 00:33:46,200 Speaker 16: be a fraught time, for example, and so it's really 675 00:33:46,280 --> 00:33:49,400 Speaker 16: important to know that you know, every vote will be counted. 676 00:33:49,600 --> 00:33:51,960 Speaker 16: The elections are on part of be very safe and secure, 677 00:33:52,400 --> 00:33:54,680 Speaker 16: but we may have a period of uncertainty and that's okay, 678 00:33:55,000 --> 00:33:57,800 Speaker 16: and we just need to understand that that might be 679 00:33:57,840 --> 00:34:01,000 Speaker 16: the case. But it's an important part of letting democracy 680 00:34:01,000 --> 00:34:01,360 Speaker 16: play out. 681 00:34:01,680 --> 00:34:04,080 Speaker 11: Well, I think back to twenty twenty when it took 682 00:34:04,120 --> 00:34:06,240 Speaker 11: a few days, but we were still in the midst 683 00:34:06,320 --> 00:34:08,960 Speaker 11: of the pandemic. Now in twenty twenty four, people will 684 00:34:09,000 --> 00:34:11,480 Speaker 11: be back into the office, back at work, back on 685 00:34:11,800 --> 00:34:14,680 Speaker 11: subways here in the New York and commuting around the country. 686 00:34:15,040 --> 00:34:19,320 Speaker 11: How does that actually kind of impact a delayed ruling 687 00:34:19,360 --> 00:34:22,040 Speaker 11: or delayed decision on who in fact will win the election, 688 00:34:22,160 --> 00:34:25,440 Speaker 11: especially as we see a number of contested seats across 689 00:34:25,719 --> 00:34:26,480 Speaker 11: the House and Senate. 690 00:34:27,040 --> 00:34:27,279 Speaker 5: Yeah. 691 00:34:27,320 --> 00:34:29,640 Speaker 16: Look, we're so used to having everything, you know, be 692 00:34:29,800 --> 00:34:33,040 Speaker 16: so instant instantaneous. We're used to obviously having a result, 693 00:34:33,120 --> 00:34:35,480 Speaker 16: you know, called on election night. The reality is, at 694 00:34:35,560 --> 00:34:38,640 Speaker 16: least for the national presidential election, we expect it to 695 00:34:38,680 --> 00:34:41,319 Speaker 16: be very close, and there's a number of states that 696 00:34:41,480 --> 00:34:43,759 Speaker 16: probably will take a few days to make sure that 697 00:34:43,800 --> 00:34:47,479 Speaker 16: every ballot is counted. And so, you know, unlike where 698 00:34:47,480 --> 00:34:49,440 Speaker 16: we were all sort of huddled in our homes around 699 00:34:49,520 --> 00:34:53,120 Speaker 16: zoom screens or around TV screens before you know, we 700 00:34:53,160 --> 00:34:55,080 Speaker 16: are going to have people going back into the office. 701 00:34:55,440 --> 00:34:57,520 Speaker 16: And we know one of the things we learned in 702 00:34:57,520 --> 00:35:00,440 Speaker 16: twenty sixteen was that, you know, elections can a lot 703 00:35:00,440 --> 00:35:03,440 Speaker 16: of emotions with employees and start a lot of conversation. 704 00:35:04,000 --> 00:35:06,719 Speaker 16: And the reality is is the workplace has become a 705 00:35:06,760 --> 00:35:09,680 Speaker 16: really important square for civic engagement. Right It's one of 706 00:35:09,680 --> 00:35:12,000 Speaker 16: the places where people interact, they talk to each other, 707 00:35:12,280 --> 00:35:15,040 Speaker 16: and so it's become increasingly important that business leaders and 708 00:35:15,120 --> 00:35:17,160 Speaker 16: CEOs think about the role they can play and sort 709 00:35:17,200 --> 00:35:19,319 Speaker 16: of setting the tone of the role that they can 710 00:35:19,360 --> 00:35:22,040 Speaker 16: play in sort of depoliticizing things and making sure that 711 00:35:22,080 --> 00:35:24,440 Speaker 16: there's a safe space. We've see in a lot of 712 00:35:24,440 --> 00:35:27,640 Speaker 16: companies with employee research groups that there's the opportunity to 713 00:35:27,680 --> 00:35:30,560 Speaker 16: provide space for dialogue. And so part of the work 714 00:35:30,560 --> 00:35:32,879 Speaker 16: that we've been doing under an initiative we created it's 715 00:35:32,880 --> 00:35:35,720 Speaker 16: called the Business and Democracy Initiative, is we've been working 716 00:35:35,719 --> 00:35:38,080 Speaker 16: with business leaders to help them prepare for this election, 717 00:35:38,680 --> 00:35:40,440 Speaker 16: to not only sort of raise their voice in their 718 00:35:40,440 --> 00:35:42,680 Speaker 16: communities to talk about how this is the normal part 719 00:35:42,719 --> 00:35:45,279 Speaker 16: of democracy, but also to play an important role in 720 00:35:45,320 --> 00:35:48,960 Speaker 16: sort of depolarizing, de escalating and making sure that everyone's 721 00:35:49,040 --> 00:35:51,919 Speaker 16: voices are heard in this process over the next few weeks. 722 00:35:52,440 --> 00:35:55,200 Speaker 2: And the business leaders that you do speak to, what 723 00:35:55,320 --> 00:35:57,319 Speaker 2: is a concern level, if at all, that we have 724 00:35:57,520 --> 00:36:01,200 Speaker 2: a recreation of something like January to that level. 725 00:36:01,719 --> 00:36:03,960 Speaker 16: Look, I think overall people feel that the election is 726 00:36:03,960 --> 00:36:05,520 Speaker 16: going to be safe and secure and that every vote 727 00:36:05,600 --> 00:36:08,520 Speaker 16: is counted. So that's that is a good point, you know. 728 00:36:08,640 --> 00:36:11,520 Speaker 16: I think generally what I hear from business leaders is, 729 00:36:11,560 --> 00:36:15,280 Speaker 16: you know, increasingly, you know, risk has become an issue 730 00:36:15,480 --> 00:36:18,880 Speaker 16: with just instability, and so even beyond the elections, you know, 731 00:36:19,080 --> 00:36:21,640 Speaker 16: there's a broader issue with the government, for example, not 732 00:36:21,840 --> 00:36:24,239 Speaker 16: being able to pass you know, funding bills that go 733 00:36:24,320 --> 00:36:27,320 Speaker 16: on for years, or the debate over the debt selling 734 00:36:27,360 --> 00:36:30,239 Speaker 16: for example, and not being able to reach resolution. So 735 00:36:30,280 --> 00:36:33,560 Speaker 16: there's that broader sort of risk level. You know, America, 736 00:36:33,560 --> 00:36:35,319 Speaker 16: as we all know, is the most important economy in 737 00:36:35,360 --> 00:36:37,840 Speaker 16: the world, and so having that certainty is really important 738 00:36:37,880 --> 00:36:40,560 Speaker 16: for business leaders. And I think over the last few years, 739 00:36:40,600 --> 00:36:44,040 Speaker 16: businesses have become increasingly frustrated that the government hasn't been 740 00:36:44,080 --> 00:36:47,760 Speaker 16: able to provide more stability and that partisanship is continued 741 00:36:47,840 --> 00:36:50,279 Speaker 16: to sort of really, you know, make it difficult for 742 00:36:50,320 --> 00:36:53,680 Speaker 16: business leaders to make decisions, especially businesses who rely upon 743 00:36:53,719 --> 00:36:56,440 Speaker 16: the government for you know, a wide variety of factors. 744 00:36:56,480 --> 00:36:59,440 Speaker 16: So it's a broader sort of risk appetite rather than 745 00:36:59,560 --> 00:37:02,440 Speaker 16: just in this moment. But it's definitely something that boardrooms 746 00:37:02,480 --> 00:37:04,640 Speaker 16: and businesses are starting to look at our. 747 00:37:04,560 --> 00:37:08,120 Speaker 2: Thanks to Redbuddle, CEO of Public Private Strategies. That's this 748 00:37:08,160 --> 00:37:11,080 Speaker 2: week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in 749 00:37:11,120 --> 00:37:13,600 Speaker 2: depth research and data on two thousand companies and one 750 00:37:13,719 --> 00:37:14,800 Speaker 2: hundred and thirty industries. 751 00:37:15,000 --> 00:37:15,520 Speaker 5: And remember it. 752 00:37:15,719 --> 00:37:18,440 Speaker 2: You can access Bloomberg Intelligence via Bigo on the terminal. 753 00:37:18,560 --> 00:37:21,640 Speaker 2: I'm Paul Sweeney. Stay with us. Today's top stories and 754 00:37:21,680 --> 00:37:23,839 Speaker 2: global business headlines are coming up right now.