1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,240 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Kind the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,440 Speaker 1: and on Bloomberg dot com. Well, I know what keeps 7 00:00:21,440 --> 00:00:24,560 Speaker 1: Boeing flying higher, and that is the Boeing Max, which 8 00:00:24,560 --> 00:00:26,400 Speaker 1: has been cleared to fly by the f A A. 9 00:00:26,520 --> 00:00:29,720 Speaker 1: George Ferguson, let's bring you in senior aerospace, defense and 10 00:00:29,840 --> 00:00:34,360 Speaker 1: airlines analysts for Bloomberg Intelligence. You know what, twenty months 11 00:00:34,400 --> 00:00:36,480 Speaker 1: in the making, and there were a few hurdles along 12 00:00:36,520 --> 00:00:39,480 Speaker 1: the way. But twenty months is that good enough time frame? 13 00:00:39,600 --> 00:00:45,319 Speaker 1: Is that sort of reasonable? Booing would have opted for 14 00:00:45,360 --> 00:00:48,440 Speaker 1: a much shorter time frame, So I don't know. Hopefully 15 00:00:49,800 --> 00:00:52,839 Speaker 1: things like the Max grunning don't become regular occasions, so 16 00:00:52,920 --> 00:00:56,600 Speaker 1: we have I guess timing for it. I think Bowing 17 00:00:56,640 --> 00:00:59,640 Speaker 1: again would have wanted to be much shorter. And frank 18 00:00:59,720 --> 00:01:02,360 Speaker 1: I think if if they would have been more focused 19 00:01:02,360 --> 00:01:04,759 Speaker 1: on the problem in earlier days, it wouldn't have taken 20 00:01:04,760 --> 00:01:07,119 Speaker 1: as long, George, what does it mean from a cash 21 00:01:07,120 --> 00:01:09,959 Speaker 1: respective here to get this thing approved? It's my understanding 22 00:01:10,040 --> 00:01:14,240 Speaker 1: that Bowing doesn't get paid until they deliver the aircraft. Yeah, 23 00:01:14,240 --> 00:01:16,520 Speaker 1: so you know, we think that what this UH could 24 00:01:16,560 --> 00:01:22,479 Speaker 1: provide up is a chance for going to be cash positive. Uh. 25 00:01:22,520 --> 00:01:25,680 Speaker 1: You know what we're anticipating as boone could deliver up 26 00:01:25,720 --> 00:01:28,560 Speaker 1: the thirty matches a month, so probably deliver maybe three 27 00:01:28,560 --> 00:01:31,959 Speaker 1: and sixty airplanes next year. I think you need to 28 00:01:32,000 --> 00:01:37,160 Speaker 1: see China authorized the airplane and Chinese airlines be willing 29 00:01:37,200 --> 00:01:40,840 Speaker 1: to take some airplanes because Chinese air travels bouncing back 30 00:01:40,920 --> 00:01:43,480 Speaker 1: faster than any around the world. Bowing has four and 31 00:01:43,560 --> 00:01:46,360 Speaker 1: fifty of these airplanes on the ground right now. We 32 00:01:46,480 --> 00:01:49,480 Speaker 1: estimate the cash value of those airplanes, besides the deposit 33 00:01:49,560 --> 00:01:53,960 Speaker 1: they've already received from airlines, is north of twelve billion dollars. 34 00:01:54,320 --> 00:01:58,080 Speaker 1: So from a cash generation standpoint, this this really changes. UH, 35 00:01:58,200 --> 00:02:01,800 Speaker 1: this changes the cash Outlooking Bowing, how many were ordered, 36 00:02:01,960 --> 00:02:05,640 Speaker 1: how many will be delivered, and how many orders were canceled? George, 37 00:02:06,880 --> 00:02:10,840 Speaker 1: So we've seen some cancelations. I don't have all those 38 00:02:10,880 --> 00:02:13,040 Speaker 1: numbers for the right the tip of my fingers here, 39 00:02:13,040 --> 00:02:16,960 Speaker 1: but we've seen some cancelations, but largely from less soars. 40 00:02:17,880 --> 00:02:20,280 Speaker 1: Less oars are usually the people to cancel if they 41 00:02:20,280 --> 00:02:23,639 Speaker 1: have any sort of out because less oars by airplanes 42 00:02:23,639 --> 00:02:25,440 Speaker 1: in the hopes that there's not going to be enough 43 00:02:25,480 --> 00:02:28,040 Speaker 1: airplanes in the world and they can come in when 44 00:02:28,040 --> 00:02:29,800 Speaker 1: they when they buy speculative and they come in, then 45 00:02:29,800 --> 00:02:31,880 Speaker 1: they offer those airplanes to airlines that are need to 46 00:02:31,960 --> 00:02:35,080 Speaker 1: lift that world just doesn't exist for the next bunch 47 00:02:35,080 --> 00:02:36,840 Speaker 1: of years. And so if you're a less or and 48 00:02:36,880 --> 00:02:39,400 Speaker 1: he would a shot to cancel, you did. We're more 49 00:02:39,400 --> 00:02:42,920 Speaker 1: concerned about deferrals right. Airlines will definitely ask bowing to 50 00:02:43,000 --> 00:02:47,520 Speaker 1: slow down deliveries to the airlines. You don't see that um, 51 00:02:47,680 --> 00:02:50,200 Speaker 1: you know, and sort of as cancelations because those are 52 00:02:50,280 --> 00:02:53,480 Speaker 1: quiet discussions they're having behind behind the scenes, and but 53 00:02:53,560 --> 00:02:56,600 Speaker 1: we know those are going on. We've heard even companies 54 00:02:56,600 --> 00:03:00,359 Speaker 1: like Southwest pushing out some of their deliveries and that's 55 00:03:00,360 --> 00:03:03,320 Speaker 1: why we think, you know, if Boling could deliver thirty 56 00:03:03,480 --> 00:03:08,160 Speaker 1: months of max is, that still would be a little 57 00:03:08,160 --> 00:03:11,480 Speaker 1: bit less than sorry, a little bit more than half 58 00:03:11,600 --> 00:03:16,160 Speaker 1: of what there toptic delivery rates would have been back 59 00:03:16,240 --> 00:03:19,600 Speaker 1: inten when they're planning to go to fifty seven, so 60 00:03:19,639 --> 00:03:22,840 Speaker 1: that the pain is still large, that the industry is 61 00:03:23,600 --> 00:03:28,640 Speaker 1: nowhere near sort of those heavy days of night. But again, 62 00:03:28,639 --> 00:03:32,320 Speaker 1: I think the real authorization gets them back into the 63 00:03:32,360 --> 00:03:35,840 Speaker 1: business of delivering their most important cash generating airplane, which 64 00:03:35,880 --> 00:03:39,520 Speaker 1: is which is very important. George, you mentioned China. Where 65 00:03:39,600 --> 00:03:41,760 Speaker 1: are we in terms of or where is bowling in 66 00:03:41,840 --> 00:03:43,840 Speaker 1: terms of getting approval to fly in China because you 67 00:03:43,880 --> 00:03:47,080 Speaker 1: mentioned their air traffic is coming back more so than 68 00:03:47,120 --> 00:03:50,320 Speaker 1: the rest of the world. So we haven't seen any 69 00:03:50,400 --> 00:03:53,280 Speaker 1: reports out of the Chinese authorities about what they're ready 70 00:03:53,360 --> 00:03:56,680 Speaker 1: to whether they're ready to let the Max fly again 71 00:03:56,720 --> 00:04:00,640 Speaker 1: in China. And I suspect that this part of this 72 00:04:00,720 --> 00:04:05,200 Speaker 1: question maybe wrapped around trade issues as well. Right you know, 73 00:04:05,280 --> 00:04:08,520 Speaker 1: China and the US not really very happy with each 74 00:04:08,560 --> 00:04:11,520 Speaker 1: other right now on the trade front, and so one 75 00:04:11,520 --> 00:04:13,400 Speaker 1: of the things we're looking at is as a as 76 00:04:13,440 --> 00:04:17,320 Speaker 1: a the president potential administration looks like it's going to 77 00:04:17,440 --> 00:04:21,280 Speaker 1: change in Washington. You could have a Biden presidency. Is 78 00:04:21,360 --> 00:04:25,120 Speaker 1: a potential approachment with the U S and China that 79 00:04:25,279 --> 00:04:28,920 Speaker 1: could allow airplanes to start get delivered back into China. 80 00:04:29,520 --> 00:04:31,600 Speaker 1: You remember, there's a there's a trying to trade deal 81 00:04:31,640 --> 00:04:35,000 Speaker 1: that was signed by the Trump administration. The Chinese don't 82 00:04:35,040 --> 00:04:38,640 Speaker 1: look like they were fulfilling the purchases that they said 83 00:04:38,640 --> 00:04:41,920 Speaker 1: they would. Seems impossible for them to do it now. 84 00:04:42,279 --> 00:04:44,960 Speaker 1: We also wonder if that trade deal might not get 85 00:04:45,200 --> 00:04:48,359 Speaker 1: sort of re energized and pushed a year, and that 86 00:04:48,520 --> 00:04:50,960 Speaker 1: as well could be could be a spur to get 87 00:04:51,200 --> 00:04:54,360 Speaker 1: more airplanes delivered into China. The Chinese absolutely need to 88 00:04:54,360 --> 00:04:56,680 Speaker 1: be taking gooing airplanes to meet the terms of that 89 00:04:56,760 --> 00:04:59,440 Speaker 1: trade deal. But right now that trade deals in some 90 00:04:59,560 --> 00:05:02,840 Speaker 1: sort of dove land. Sarah Pontac, who is still with 91 00:05:02,839 --> 00:05:06,560 Speaker 1: Wilson Studio, the Chinese yuan is trading off shore at 92 00:05:06,600 --> 00:05:10,080 Speaker 1: six fifty seventy. We've literally seen it full off a 93 00:05:10,120 --> 00:05:12,240 Speaker 1: fifth in the last you know, a few weeks. It 94 00:05:12,360 --> 00:05:15,560 Speaker 1: was at seven but higher than seven seven twenty at 95 00:05:15,839 --> 00:05:20,280 Speaker 1: some point earlier this year. What's behind this water Stratagists saying, right, 96 00:05:20,320 --> 00:05:23,320 Speaker 1: we really have the lowest sense about June. Just to 97 00:05:23,400 --> 00:05:26,680 Speaker 1: put this in historical perspective, what strategists are saying is 98 00:05:26,760 --> 00:05:28,440 Speaker 1: that some of this does have to do with the 99 00:05:28,520 --> 00:05:31,520 Speaker 1: outcome of the presidential election. Sure, we are still dealing 100 00:05:31,560 --> 00:05:33,440 Speaker 1: with the contested election, but the idea that you're going 101 00:05:33,520 --> 00:05:36,640 Speaker 1: to have a Biden presidency and a return more so 102 00:05:36,920 --> 00:05:40,800 Speaker 1: to geo political status quo, and where we still might 103 00:05:40,960 --> 00:05:44,479 Speaker 1: have some tensions back and forth with US and China, 104 00:05:44,560 --> 00:05:47,400 Speaker 1: even on the trade front, it likely will not look 105 00:05:47,560 --> 00:05:51,960 Speaker 1: like it did under the President Trump administration. So that 106 00:05:52,400 --> 00:05:55,240 Speaker 1: is really coming to gear on this also just the 107 00:05:55,320 --> 00:05:58,160 Speaker 1: fact that if we look at the Chinese economy, we 108 00:05:58,320 --> 00:06:01,240 Speaker 1: have seen a lift late. They do seem to have 109 00:06:01,360 --> 00:06:05,960 Speaker 1: gotten the virus under control more so than Western countries 110 00:06:06,080 --> 00:06:08,400 Speaker 1: like Europe in the US as well, that could be 111 00:06:08,480 --> 00:06:11,240 Speaker 1: playing playing a role to But mostly what I typically 112 00:06:11,320 --> 00:06:14,320 Speaker 1: here is bringing it back to geopolitical tensions and the 113 00:06:14,400 --> 00:06:18,960 Speaker 1: results of the election to hey, George. Longer term for Boeing, here, 114 00:06:19,600 --> 00:06:23,640 Speaker 1: what's the hit to you know, their reputation in the marketplace, 115 00:06:23,760 --> 00:06:26,160 Speaker 1: their competitive position in the marketplace. I mean, I know 116 00:06:26,240 --> 00:06:30,720 Speaker 1: it's essentially a duopoly air Bus and Boeing, But as 117 00:06:30,760 --> 00:06:33,760 Speaker 1: some permanent or maybe at least some long term competitive 118 00:06:33,839 --> 00:06:36,560 Speaker 1: damage been done to the Boeing company and its products, 119 00:06:38,080 --> 00:06:40,320 Speaker 1: I think for for sure for the next bunch of years. 120 00:06:40,480 --> 00:06:44,000 Speaker 1: You know this hurts for reputational standpoint, I guess in 121 00:06:44,120 --> 00:06:47,080 Speaker 1: time it sort of it seems like all things sade, 122 00:06:47,240 --> 00:06:49,400 Speaker 1: you know. I think a bunch of years ago before 123 00:06:49,440 --> 00:06:52,360 Speaker 1: the Max with the n G and the air Bus 124 00:06:52,920 --> 00:06:58,160 Speaker 1: CEO for those of us that do inside baseball on airplane, 125 00:06:58,200 --> 00:07:00,919 Speaker 1: that's the that's the immediate predecessors to the latest airplanes. 126 00:07:01,600 --> 00:07:04,719 Speaker 1: The seven thirty seven looked like it had a slight 127 00:07:04,839 --> 00:07:09,080 Speaker 1: advantage over the old Airbus CEO. They had a couple 128 00:07:09,080 --> 00:07:11,040 Speaker 1: of extra seats and their efficiency seemed to be a 129 00:07:11,080 --> 00:07:13,200 Speaker 1: little bit better, and so they look like they had 130 00:07:13,240 --> 00:07:16,640 Speaker 1: a slight advantage. In the world we're in now, it 131 00:07:16,680 --> 00:07:18,920 Speaker 1: looks like Airbus might have a slight advantage and the 132 00:07:19,040 --> 00:07:23,920 Speaker 1: narrow body air aircraft arena with the three Neo, which 133 00:07:23,960 --> 00:07:27,440 Speaker 1: had larger fan sizes, a little better efficiency, and it's 134 00:07:27,480 --> 00:07:30,200 Speaker 1: prepared to take those bigger fan sizes in the future. 135 00:07:30,880 --> 00:07:33,320 Speaker 1: So I think bowings at a point where they really 136 00:07:33,360 --> 00:07:37,040 Speaker 1: need to think about the competitiveness of the seven thirty seven, 137 00:07:37,160 --> 00:07:40,480 Speaker 1: and they need to guard their reputation, and so I 138 00:07:40,600 --> 00:07:42,320 Speaker 1: think that they got to start thinking about how they're 139 00:07:42,320 --> 00:07:46,320 Speaker 1: gonna come forth with a new narrow body seven thirty 140 00:07:46,360 --> 00:07:49,360 Speaker 1: seven and one that can be maybe get another leg 141 00:07:49,440 --> 00:07:52,200 Speaker 1: up on Airbus. Of course, Airbus won't let that go 142 00:07:52,360 --> 00:07:55,200 Speaker 1: without a without a fighting shore. George, who is responsible 143 00:07:55,280 --> 00:07:57,440 Speaker 1: for getting people into the plane. Is that the airlines 144 00:07:57,440 --> 00:08:00,880 Speaker 1: who have already ordered and used the on Pready seven Max. 145 00:08:00,960 --> 00:08:03,120 Speaker 1: Or is it up to Bowing to put a campaign 146 00:08:03,160 --> 00:08:04,920 Speaker 1: into the works that makes it seem like it's a 147 00:08:04,960 --> 00:08:08,400 Speaker 1: great airplane to write on. I think it will be 148 00:08:08,520 --> 00:08:11,600 Speaker 1: both right. There's some airlines that are absolutely bowing customers. 149 00:08:12,440 --> 00:08:14,960 Speaker 1: They fly all bowing fleets. It's absolutely in their interest 150 00:08:15,040 --> 00:08:18,280 Speaker 1: to get customers comfortable with the Max, their buyers of 151 00:08:18,320 --> 00:08:20,920 Speaker 1: the Max. To even switch to the to an airbust 152 00:08:20,960 --> 00:08:23,040 Speaker 1: product would would sort of, you know, create a lot 153 00:08:23,080 --> 00:08:26,720 Speaker 1: of upheaval these companies, companies like Southwest, companies like Ryan Air. 154 00:08:26,840 --> 00:08:29,360 Speaker 1: But at the same time, Boeing, even though they're one 155 00:08:29,440 --> 00:08:34,040 Speaker 1: removed from the flying public, they really need to bolster 156 00:08:34,160 --> 00:08:36,960 Speaker 1: the reputation of this airplane, and the airplane has really 157 00:08:37,000 --> 00:08:39,960 Speaker 1: been reviewed extensively by the f a A. I think 158 00:08:40,000 --> 00:08:43,079 Speaker 1: they've got to bring that forward to the consumer. And 159 00:08:43,240 --> 00:08:46,120 Speaker 1: the training regiment for getting pilots back in the cockpit 160 00:08:46,679 --> 00:08:49,240 Speaker 1: on the Max is a little more intense, and it 161 00:08:49,280 --> 00:08:52,720 Speaker 1: would be for a typical what we call typewriting um 162 00:08:53,360 --> 00:08:56,760 Speaker 1: type similar typewrated airplane, and so I think Bowing Boeing 163 00:08:56,960 --> 00:09:00,079 Speaker 1: and the airlines need to bring forth this information to 164 00:09:00,160 --> 00:09:02,600 Speaker 1: the flying public could be comfortable flying the airplane again 165 00:09:03,000 --> 00:09:06,760 Speaker 1: and they don't suffer any demand problems because of that. Hey, sir, 166 00:09:06,840 --> 00:09:08,959 Speaker 1: I just want to brought more broadly, what do you 167 00:09:09,040 --> 00:09:12,480 Speaker 1: think are the kind of next catalyst for investors? What 168 00:09:12,559 --> 00:09:14,320 Speaker 1: are the investors looking at? Now? We've kind of gotten 169 00:09:14,360 --> 00:09:16,760 Speaker 1: through you know, some we've gotten through earnings, we kind 170 00:09:16,760 --> 00:09:18,520 Speaker 1: of know where the FED is, where you've got some 171 00:09:19,240 --> 00:09:21,360 Speaker 1: idea of the vaccine timing. What do you think the 172 00:09:21,400 --> 00:09:24,240 Speaker 1: market's looking at? I'd say, as of right now, likely 173 00:09:24,480 --> 00:09:27,200 Speaker 1: what's going to be the next catalyst for any maybe 174 00:09:27,280 --> 00:09:30,120 Speaker 1: short term moves in the market would be the development 175 00:09:30,160 --> 00:09:33,319 Speaker 1: in the trajectory of COVID nineteen cases and restrictions. We 176 00:09:33,400 --> 00:09:36,040 Speaker 1: have not gotten to the point where restrictions have really 177 00:09:36,080 --> 00:09:38,319 Speaker 1: been ramped up to the point where we're going to 178 00:09:38,400 --> 00:09:41,000 Speaker 1: see a drastic effect on an economy like we saw 179 00:09:41,040 --> 00:09:43,679 Speaker 1: back in March. But what's going to happen as we 180 00:09:43,760 --> 00:09:47,079 Speaker 1: get into the winter months. Granted though you are able 181 00:09:47,120 --> 00:09:49,439 Speaker 1: to look further out, knowing that there is a vaccine, 182 00:09:49,480 --> 00:09:51,880 Speaker 1: there and on that front, that means there are very 183 00:09:52,040 --> 00:09:55,199 Speaker 1: high expectations for a growth rebound, not just on the 184 00:09:55,280 --> 00:09:57,520 Speaker 1: economic front, but when it comes to earnings too. If 185 00:09:57,559 --> 00:10:00,839 Speaker 1: you look at expectations for one off its Q one 186 00:10:00,920 --> 00:10:03,920 Speaker 1: Q two. Granted you have much easier comps because we 187 00:10:04,000 --> 00:10:06,240 Speaker 1: saw numbers just fall off a cliff this year in 188 00:10:06,320 --> 00:10:08,719 Speaker 1: the wake of the coronavirus in that first quarantine. But 189 00:10:08,920 --> 00:10:12,559 Speaker 1: if we do not see markets, especially cyclical areas of 190 00:10:12,600 --> 00:10:14,800 Speaker 1: the market, because that's where the most year over year 191 00:10:14,800 --> 00:10:18,319 Speaker 1: growth is really expected, if that doesn't live up to expectations, 192 00:10:18,440 --> 00:10:21,679 Speaker 1: that could certainly provide a catalyst for some volatility and 193 00:10:21,920 --> 00:10:24,400 Speaker 1: some moving around here. At the point that we got 194 00:10:24,760 --> 00:10:27,800 Speaker 1: inventories crude oil inventories that came in much much less 195 00:10:27,840 --> 00:10:30,600 Speaker 1: than expected. The market was looking for one point two 196 00:10:30,640 --> 00:10:33,800 Speaker 1: four million barrels. We got seven sixty nine, and that's 197 00:10:33,800 --> 00:10:36,000 Speaker 1: giving another little boost to the price of oil zero, 198 00:10:36,080 --> 00:10:38,760 Speaker 1: which is now you know, close to forty two dollars 199 00:10:38,800 --> 00:10:40,959 Speaker 1: a barrel. But we're really just in this range, and 200 00:10:41,040 --> 00:10:45,320 Speaker 1: I guess OPAK is the next catalyst there. Yeah. Absolutely, 201 00:10:45,600 --> 00:10:47,439 Speaker 1: When we look at oil, it's pretty amazing to see 202 00:10:47,480 --> 00:10:48,920 Speaker 1: we have a third day of gains today w t 203 00:10:49,000 --> 00:10:51,520 Speaker 1: I crude oil up more than one also on track 204 00:10:51,640 --> 00:10:54,240 Speaker 1: for a third week of gains. So we have seen 205 00:10:54,280 --> 00:10:56,160 Speaker 1: this sustained move higher. Right now we look at w 206 00:10:56,360 --> 00:11:00,000 Speaker 1: t I crude oil barrel that's the highest and September. 207 00:11:00,360 --> 00:11:02,959 Speaker 1: So we have not been able to completely break out, 208 00:11:03,080 --> 00:11:06,120 Speaker 1: but it does seem as though OPEC and its allies 209 00:11:06,320 --> 00:11:10,240 Speaker 1: do at least they're aware of the issues right now 210 00:11:10,640 --> 00:11:14,680 Speaker 1: on the table as it relates to demand. However, again 211 00:11:14,880 --> 00:11:17,600 Speaker 1: there is just plenty of optimism and the focus really 212 00:11:17,640 --> 00:11:21,320 Speaker 1: here on that is on the positive side. Okay, Sarah contact, 213 00:11:21,320 --> 00:11:23,120 Speaker 1: thank you so much for joining us. We always appreciate 214 00:11:23,160 --> 00:11:25,960 Speaker 1: your thoughts on the markets from a cross asset perspective. 215 00:11:26,200 --> 00:11:29,280 Speaker 1: Sarah Pontac cross As reporter for Bloomberg News and George Ferguson, 216 00:11:29,640 --> 00:11:32,920 Speaker 1: Senior Aerospace and Airlines Analyst for Bloomberg Intelligence. We get 217 00:11:33,080 --> 00:11:36,280 Speaker 1: up to speed on the Boeing News. We appreciate you. 218 00:11:39,360 --> 00:11:41,920 Speaker 1: We've heard a lot about Sparks this year. They've become 219 00:11:42,120 --> 00:11:44,960 Speaker 1: the vehicle of choice for people to raise and then 220 00:11:45,440 --> 00:11:47,959 Speaker 1: hopefully look for a company to go public with. Well, 221 00:11:48,360 --> 00:11:50,920 Speaker 1: one of those companies that went public via a successful 222 00:11:51,000 --> 00:11:54,440 Speaker 1: spak yesterday, it was EOS and it is trading today 223 00:11:54,520 --> 00:11:57,480 Speaker 1: on the NAZAC. E O s E is the ticker 224 00:11:57,920 --> 00:11:59,880 Speaker 1: and it's of more than eleven percent right now. So 225 00:12:00,000 --> 00:12:03,360 Speaker 1: EOS Energy Enterprises is the full title and the CEO 226 00:12:03,559 --> 00:12:06,240 Speaker 1: is Joe mastra Angelo. So Joe explained to what first, 227 00:12:06,320 --> 00:12:10,400 Speaker 1: what EOS Energy Enterprises does. Yeah, so thanks for the 228 00:12:10,440 --> 00:12:15,040 Speaker 1: time today. We're we're a stationary energy storage company that 229 00:12:15,280 --> 00:12:19,000 Speaker 1: focuses on helping take out the intermittency of renewables and 230 00:12:19,120 --> 00:12:22,880 Speaker 1: the power grid, micro grid applications and eventually a residential 231 00:12:23,120 --> 00:12:25,800 Speaker 1: um system. Just to clarified, do you mean it like 232 00:12:25,880 --> 00:12:29,000 Speaker 1: a battery company, Yes, we're bad. We're battery company that 233 00:12:29,280 --> 00:12:35,920 Speaker 1: we build zinc bromean based batteries for stationary energy storage. Alright, 234 00:12:36,040 --> 00:12:39,719 Speaker 1: so zinc based energy storage battery. That's different from what 235 00:12:39,880 --> 00:12:42,439 Speaker 1: I think most of the markets used to, which is 236 00:12:43,120 --> 00:12:46,040 Speaker 1: um you know, a lithium ion battery. Tell us the 237 00:12:46,120 --> 00:12:49,360 Speaker 1: difference between the two and maybe the advantages of your 238 00:12:49,400 --> 00:12:53,920 Speaker 1: product versus the traditional I guess lithium ion batteries. Yes, so, 239 00:12:54,080 --> 00:12:56,599 Speaker 1: so first off, you start off with the with the 240 00:12:56,840 --> 00:12:59,200 Speaker 1: with the raw materials that go into the battery, which 241 00:12:59,240 --> 00:13:02,880 Speaker 1: are all earth abundant no conflict materials, no rare earths, 242 00:13:02,920 --> 00:13:06,080 Speaker 1: no toxic materials in the battery widely available so very 243 00:13:06,160 --> 00:13:10,320 Speaker 1: limited um supply chain constraints. The battery is not only 244 00:13:10,840 --> 00:13:14,720 Speaker 1: sustainable throughout its lifetime, where it can operate from temperatures 245 00:13:14,800 --> 00:13:18,320 Speaker 1: as low as minus twenty degree C up to fifty 246 00:13:18,360 --> 00:13:21,680 Speaker 1: degrees C, so very wide operate upbrating range without any 247 00:13:22,000 --> 00:13:25,000 Speaker 1: um incremental heating or cooling. And then lastly, at the 248 00:13:25,080 --> 00:13:27,120 Speaker 1: end of its useful life in fifteen to twenty years, 249 00:13:27,559 --> 00:13:30,320 Speaker 1: the battery is fully recyclable back back to its original 250 00:13:30,360 --> 00:13:33,920 Speaker 1: components to be reused in something else. Sounds pretty phenomenal. 251 00:13:34,120 --> 00:13:36,680 Speaker 1: Why did you decide to go public via a spack 252 00:13:37,040 --> 00:13:40,839 Speaker 1: and you know who's involved in the spat Yeah, so 253 00:13:41,000 --> 00:13:43,560 Speaker 1: so so it's a great question. So we um were 254 00:13:43,640 --> 00:13:47,400 Speaker 1: were We worked with b Riley Financial. We went through 255 00:13:47,480 --> 00:13:48,840 Speaker 1: the you know, we were we were in the midst 256 00:13:48,880 --> 00:13:51,320 Speaker 1: of a fundraising round and had met with the team 257 00:13:51,360 --> 00:13:53,679 Speaker 1: from b Riley and we really found a good, a 258 00:13:53,720 --> 00:13:56,160 Speaker 1: good mesh up in what they saw the strategy of 259 00:13:56,200 --> 00:13:58,199 Speaker 1: our company, in the capital that we could get to 260 00:13:58,440 --> 00:14:00,920 Speaker 1: to grow the company. So as we looked the options 261 00:14:00,920 --> 00:14:03,079 Speaker 1: in front of us, this was the best way for 262 00:14:03,200 --> 00:14:05,160 Speaker 1: us to get the story out about how we're going 263 00:14:05,200 --> 00:14:08,080 Speaker 1: to grow the company for the future. Have a partner 264 00:14:08,120 --> 00:14:10,680 Speaker 1: and sponsor who believed in the strategy of the company 265 00:14:11,040 --> 00:14:12,679 Speaker 1: and coming out of this back now we have enough 266 00:14:12,720 --> 00:14:14,640 Speaker 1: capital to grow the company over the long term and 267 00:14:14,679 --> 00:14:17,880 Speaker 1: take it to profitability and casual positive So, Joe, when 268 00:14:17,880 --> 00:14:20,280 Speaker 1: people think of, you know, battery storage, sometimes I think 269 00:14:20,320 --> 00:14:24,680 Speaker 1: of Tesla. Is Tesla a potential customer of years or 270 00:14:24,760 --> 00:14:27,040 Speaker 1: a competitor of yours? How did they How do you 271 00:14:27,120 --> 00:14:30,480 Speaker 1: kind of position yourself visa be Tesla? Yeah, so, so 272 00:14:30,680 --> 00:14:33,720 Speaker 1: when you think about Tesla UM, we we both compete 273 00:14:33,760 --> 00:14:35,960 Speaker 1: in the same space. It's a it's a very wide 274 00:14:36,040 --> 00:14:39,280 Speaker 1: space when you look at the applications UM that we 275 00:14:39,400 --> 00:14:41,320 Speaker 1: go after. You know, when you think about lithium IAM, 276 00:14:41,400 --> 00:14:43,600 Speaker 1: which is the core of the of the of the 277 00:14:43,680 --> 00:14:46,880 Speaker 1: Tesla product, and other and other competitors out there, very 278 00:14:46,920 --> 00:14:50,239 Speaker 1: competitive when you when you're under two hours of discharge 279 00:14:50,240 --> 00:14:52,960 Speaker 1: from from the system, So using the system to charge 280 00:14:53,040 --> 00:14:55,000 Speaker 1: up and then putting that power back on the system 281 00:14:55,320 --> 00:14:58,120 Speaker 1: in zero to two hours beca my entighly competitive. The 282 00:14:58,200 --> 00:15:01,080 Speaker 1: way our company was founded and the way our technology 283 00:15:01,200 --> 00:15:03,120 Speaker 1: is developed over the last twelve years. Is we do 284 00:15:03,280 --> 00:15:06,480 Speaker 1: longer duration discharge, so we can do anything from three 285 00:15:06,560 --> 00:15:09,760 Speaker 1: hours up to twelve hours of energy usage. And when 286 00:15:09,800 --> 00:15:13,280 Speaker 1: you get above the four hour mark, we're highly competitive 287 00:15:13,280 --> 00:15:17,000 Speaker 1: against any other technology out in the marketplace. It's a 288 00:15:17,080 --> 00:15:20,520 Speaker 1: sort of it's almost like a series of churches, right 289 00:15:20,680 --> 00:15:22,720 Speaker 1: You you belong to one or you belong to the other. 290 00:15:22,920 --> 00:15:26,480 Speaker 1: You sort of pick your poison and that's it. Right. Well, 291 00:15:26,680 --> 00:15:29,800 Speaker 1: I mean, look, the energy the energy industry is always 292 00:15:29,800 --> 00:15:31,840 Speaker 1: going to have a mix of technologies to be able 293 00:15:31,920 --> 00:15:34,040 Speaker 1: to deliver the demands that you know that we all 294 00:15:34,320 --> 00:15:36,760 Speaker 1: that we all expect from modern life. And we're one 295 00:15:36,800 --> 00:15:39,480 Speaker 1: of those technologies that fits into a very large segment 296 00:15:39,560 --> 00:15:41,600 Speaker 1: of the market. So I think you could see both. 297 00:15:41,640 --> 00:15:43,400 Speaker 1: I don't. I don't think it's it's a it's a 298 00:15:43,680 --> 00:15:47,920 Speaker 1: it's an either or at an end. So Joe who 299 00:15:48,120 --> 00:15:51,680 Speaker 1: gives a sense of kind of who your customers are? Right? So, 300 00:15:51,920 --> 00:15:54,240 Speaker 1: so we we we we have systems in the field 301 00:15:54,360 --> 00:15:58,360 Speaker 1: now with some of the um per eminent utilities in 302 00:15:58,360 --> 00:16:01,840 Speaker 1: the United States. We have test systems with energy. We're 303 00:16:01,880 --> 00:16:05,160 Speaker 1: working with PFC and g so we work across utilities landscape. 304 00:16:05,400 --> 00:16:09,840 Speaker 1: We also do work with renewable renewable power companies company 305 00:16:09,920 --> 00:16:13,240 Speaker 1: called pecka t. We just announced a large agreement with 306 00:16:13,360 --> 00:16:15,320 Speaker 1: them a couple of weeks ago. And then we also 307 00:16:15,360 --> 00:16:18,000 Speaker 1: do micrograde applications. You know, we're we're doing a micrograde 308 00:16:18,000 --> 00:16:21,760 Speaker 1: application working through the Shell Foundation in Nigeria where we 309 00:16:21,880 --> 00:16:24,800 Speaker 1: really see the technology being great in that application because 310 00:16:24,800 --> 00:16:26,800 Speaker 1: of the safety and operability of it to be able 311 00:16:26,840 --> 00:16:29,640 Speaker 1: to power remote villages and be able to bring power 312 00:16:29,720 --> 00:16:31,840 Speaker 1: to the people in the world that don't have it. Joe, 313 00:16:32,000 --> 00:16:33,880 Speaker 1: final questions, we don't have much time, but what will 314 00:16:33,920 --> 00:16:35,360 Speaker 1: you do with the money where I eased in particular, 315 00:16:36,320 --> 00:16:39,560 Speaker 1: so uh go from a company that has a proven 316 00:16:39,600 --> 00:16:42,160 Speaker 1: product in the manufacturing process to a scale company. So 317 00:16:42,680 --> 00:16:45,680 Speaker 1: a lot we'll go into scaling up our factory in Pittsburgh, Pennsylvania, 318 00:16:45,720 --> 00:16:49,200 Speaker 1: where we're gonna we're gonna increase the throughput of that facility, 319 00:16:49,240 --> 00:16:52,280 Speaker 1: building out our team both on the commercial side and 320 00:16:52,520 --> 00:16:56,120 Speaker 1: also on the project side, and then lastly financing projects 321 00:16:56,160 --> 00:16:58,600 Speaker 1: where we look at this is a big opportunity to 322 00:16:58,720 --> 00:17:01,680 Speaker 1: be able to accelerate the application of energy storage in 323 00:17:01,720 --> 00:17:06,199 Speaker 1: the marketplace by bringing our own financing to the projects. Hey, Joe, 324 00:17:06,240 --> 00:17:08,560 Speaker 1: thanks so much. For joining us to really appreciate congratulations 325 00:17:08,640 --> 00:17:12,560 Speaker 1: on getting public Joe Master Angelo, CEO of EOS Energy 326 00:17:12,840 --> 00:17:18,359 Speaker 1: Enterprises that went public yesterday via US back Dog Duncan 327 00:17:18,720 --> 00:17:20,720 Speaker 1: almost a funny amail to talk a little bit about 328 00:17:20,760 --> 00:17:23,359 Speaker 1: these housing numbers which have been on fire today and 329 00:17:24,080 --> 00:17:27,440 Speaker 1: also most recently, so Doug talked to us, how do 330 00:17:27,560 --> 00:17:31,440 Speaker 1: we continue to have such demand when people are, you know, 331 00:17:31,960 --> 00:17:34,080 Speaker 1: out of a job to the tune of ten million 332 00:17:34,160 --> 00:17:37,760 Speaker 1: of them. The job loss has been heavily concentrated in 333 00:17:38,920 --> 00:17:42,919 Speaker 1: work categories which are hourly wage workers in the service sector, 334 00:17:43,640 --> 00:17:47,399 Speaker 1: particularly in areas that are discretionary spending by middle and 335 00:17:47,520 --> 00:17:52,000 Speaker 1: upper income households. Those UH workers tend to be more 336 00:17:52,080 --> 00:17:57,119 Speaker 1: heavily concentrated in apartments as opposed to ownership. So if 337 00:17:57,600 --> 00:18:01,879 Speaker 1: you are a person with a salary UH and that 338 00:18:02,119 --> 00:18:04,760 Speaker 1: job has been stable, you're not in the service sector. 339 00:18:05,160 --> 00:18:07,480 Speaker 1: With the interest rates where they are, this is a 340 00:18:07,600 --> 00:18:10,680 Speaker 1: great time to consider locking in a long term, very low, 341 00:18:10,960 --> 00:18:15,960 Speaker 1: historically low interest rate and and buy a house. So, Doug, 342 00:18:16,000 --> 00:18:19,439 Speaker 1: are we revising up our view of or your your 343 00:18:19,520 --> 00:18:21,800 Speaker 1: view of kind of just housing starts and and just 344 00:18:22,200 --> 00:18:24,200 Speaker 1: the whole housing market, because it just seems to be 345 00:18:24,760 --> 00:18:30,200 Speaker 1: an extraordinarily bright spot and an otherwise very difficult economy. Yeah, 346 00:18:30,240 --> 00:18:33,320 Speaker 1: there's two or three things going on. One is the 347 00:18:33,359 --> 00:18:36,680 Speaker 1: millennials are at peak home buying and they tend to 348 00:18:36,760 --> 00:18:40,040 Speaker 1: be more in the salaried space, so they're younger, they've 349 00:18:40,080 --> 00:18:43,840 Speaker 1: been a building families. They're now thinking about buying homes 350 00:18:44,000 --> 00:18:47,800 Speaker 1: moving out of apartments. Second one is that to the 351 00:18:47,920 --> 00:18:50,240 Speaker 1: extent that you live in an apartment in a densely 352 00:18:50,400 --> 00:18:54,840 Speaker 1: populated area and you have concerns about the continuing related 353 00:18:54,880 --> 00:18:57,119 Speaker 1: to the virus, this might be a great time to 354 00:18:57,200 --> 00:19:02,080 Speaker 1: be moving toward the suburban markets and less density. And 355 00:19:02,119 --> 00:19:05,200 Speaker 1: then the third is if you're an older household that 356 00:19:05,359 --> 00:19:08,800 Speaker 1: already owns a home and could conceptually sell that house, 357 00:19:09,200 --> 00:19:11,639 Speaker 1: you might not be so anxious to do that today 358 00:19:11,720 --> 00:19:14,720 Speaker 1: because people would come to visit the house walk through 359 00:19:14,800 --> 00:19:16,720 Speaker 1: carrying the virus, and you might be on a higher 360 00:19:16,800 --> 00:19:21,000 Speaker 1: risk category. So to supply in the existing homes is 361 00:19:21,119 --> 00:19:25,399 Speaker 1: actually at historic lows, leading to very strong starts and 362 00:19:25,560 --> 00:19:28,800 Speaker 1: construction of new homes to meet that shift in demand. 363 00:19:29,760 --> 00:19:32,800 Speaker 1: Are we beginning to see that slowed down? Was today 364 00:19:32,920 --> 00:19:35,200 Speaker 1: the first sign of that where we saw building permits 365 00:19:35,280 --> 00:19:37,800 Speaker 1: come in flat for October, much less than the one 366 00:19:37,840 --> 00:19:43,120 Speaker 1: pot anticipated, and September's number was revised lower to four 367 00:19:43,200 --> 00:19:46,480 Speaker 1: point seven. So building permits obviously the first sign of 368 00:19:47,240 --> 00:19:51,840 Speaker 1: future building. Yes, I think that's that's an accurate assessment. 369 00:19:52,160 --> 00:19:55,600 Speaker 1: One thing to recall is that the virus really hit 370 00:19:55,680 --> 00:19:58,840 Speaker 1: the economy in the March April time frame, which is 371 00:19:58,920 --> 00:20:03,119 Speaker 1: typically the peak homebuying season in the year. So we 372 00:20:03,359 --> 00:20:07,040 Speaker 1: moved what's the normal cyclical peak back in the year 373 00:20:07,200 --> 00:20:11,480 Speaker 1: to the to the late summer and early fall. So 374 00:20:11,640 --> 00:20:16,280 Speaker 1: we've been writing that shift of the of the demand cycle, 375 00:20:16,800 --> 00:20:18,880 Speaker 1: and now I think we're starting to see the work 376 00:20:18,920 --> 00:20:22,160 Speaker 1: off of that. To your point about the flattening out 377 00:20:22,280 --> 00:20:27,240 Speaker 1: of permits, Doug, how's the mortgage original origination market today? 378 00:20:27,400 --> 00:20:31,439 Speaker 1: Are lenders writing mortgages? How tough is it to get 379 00:20:31,480 --> 00:20:36,360 Speaker 1: a mortgage? How's that looking? Well? The criteria to qualify 380 00:20:36,440 --> 00:20:40,760 Speaker 1: for a mortgage have been tightened with the concern about 381 00:20:40,880 --> 00:20:47,480 Speaker 1: employment characteristics, but not not dramatically tightened, and the volumes 382 00:20:47,560 --> 00:20:49,840 Speaker 1: of business that are being done are going to be 383 00:20:50,000 --> 00:20:53,520 Speaker 1: all time records. From a nominal dollar perspective, we expect 384 00:20:53,640 --> 00:20:59,119 Speaker 1: in four point one trillion dollars of mortgage production uh. 385 00:20:59,200 --> 00:21:02,040 Speaker 1: And of course lot of that, about two point six 386 00:21:02,160 --> 00:21:05,960 Speaker 1: trillion of that will be refinancing activity. That is, people 387 00:21:06,000 --> 00:21:08,240 Speaker 1: who already have a mortgage who have taken advantage of 388 00:21:08,320 --> 00:21:11,159 Speaker 1: these historically low interest rates to refinance it at a 389 00:21:11,240 --> 00:21:14,640 Speaker 1: lower rate. That will continue into next year. The total 390 00:21:14,720 --> 00:21:16,800 Speaker 1: numbers will fall up, but they will still be at 391 00:21:16,920 --> 00:21:19,840 Speaker 1: very high levels. And one thing to bear in mind 392 00:21:20,119 --> 00:21:23,439 Speaker 1: is even if pen your treasury rates were to move up, 393 00:21:23,480 --> 00:21:26,760 Speaker 1: which they have a little bit recently, the spreads in 394 00:21:26,880 --> 00:21:30,879 Speaker 1: that market suggests that lenders could narrow the spreads and 395 00:21:30,960 --> 00:21:35,200 Speaker 1: hold mortgage rates where they are, which would continue the 396 00:21:36,080 --> 00:21:39,920 Speaker 1: benefits to consumers and through next year. Doug, what's happening 397 00:21:39,960 --> 00:21:44,680 Speaker 1: to credit quality out there? Well, the one question on 398 00:21:44,840 --> 00:21:51,000 Speaker 1: the credit quality front is relates to the forbearances for 399 00:21:51,119 --> 00:21:54,320 Speaker 1: those who do have a mortgage and did lose a 400 00:21:54,400 --> 00:21:58,400 Speaker 1: job or saw a serious truncation of their income through 401 00:21:59,040 --> 00:22:03,040 Speaker 1: reduced overtime time our bonuses. So there was an initial 402 00:22:03,200 --> 00:22:07,520 Speaker 1: surge in people who applied for the very easy terms 403 00:22:07,600 --> 00:22:10,640 Speaker 1: to take forbearance. Actually a lot of those folks were 404 00:22:10,680 --> 00:22:15,320 Speaker 1: doing that on a precautionary basis. We've done some surveys 405 00:22:15,359 --> 00:22:17,320 Speaker 1: of them and they said well, we we took it 406 00:22:17,400 --> 00:22:19,800 Speaker 1: because it was easier to take on the chance that 407 00:22:19,880 --> 00:22:22,920 Speaker 1: we might lose our job. But now the job seems 408 00:22:22,960 --> 00:22:25,960 Speaker 1: to be stable, so we've we've become current again. There's 409 00:22:26,000 --> 00:22:28,920 Speaker 1: still a segment of borrowers who are in forbearance have 410 00:22:29,119 --> 00:22:32,760 Speaker 1: lost jobs or truncated income that we will start to 411 00:22:32,840 --> 00:22:35,720 Speaker 1: see play out in the first quarter of next year, 412 00:22:36,240 --> 00:22:38,879 Speaker 1: and in many cases, if they can't bring a current 413 00:22:38,960 --> 00:22:41,520 Speaker 1: the loan will be modified to payment terms that they 414 00:22:41,600 --> 00:22:46,919 Speaker 1: can that they can maintain. Dog thank you for the updates. Housing, 415 00:22:46,960 --> 00:22:49,080 Speaker 1: of course always on our mind. Dug Duncan, Chief columnists 416 00:22:49,080 --> 00:22:54,040 Speaker 1: add Funny May joining us there. Well, as we all 417 00:22:54,240 --> 00:22:58,879 Speaker 1: work from home, learn from home. It's putting additional focus 418 00:22:59,000 --> 00:23:02,200 Speaker 1: on cyber security, and our next guest says that quantum 419 00:23:02,280 --> 00:23:06,600 Speaker 1: technology is going to accelerate that concerned. Alan Mechler, managing 420 00:23:06,680 --> 00:23:10,440 Speaker 1: partner for Asamam Adventures, also CEO of three d R Holdings, 421 00:23:11,119 --> 00:23:15,560 Speaker 1: joins us here. Alan talk to us about quantum technology 422 00:23:16,160 --> 00:23:18,679 Speaker 1: and kind of what that is and what that may 423 00:23:18,800 --> 00:23:26,160 Speaker 1: mean for cybersecurity going forward. It's quite complicated. Okay, we've 424 00:23:26,160 --> 00:23:31,680 Speaker 1: got seven minutes here. Yes, Well, the the the quantum 425 00:23:31,760 --> 00:23:36,040 Speaker 1: revolution is upon US, I should say quantum technology revolution. 426 00:23:36,280 --> 00:23:39,720 Speaker 1: The word quantum could be obviously used for a lot 427 00:23:39,800 --> 00:23:46,120 Speaker 1: of things, but quantum computing and quantum technology are going 428 00:23:46,200 --> 00:23:50,800 Speaker 1: to be able to do calculations and solve problems and 429 00:23:51,240 --> 00:23:55,240 Speaker 1: for industries um but also will cause problems because the 430 00:23:55,480 --> 00:24:00,879 Speaker 1: computing power is um, almost science fiction like in terms 431 00:24:00,960 --> 00:24:04,240 Speaker 1: of how much it can do compared to the largest 432 00:24:04,760 --> 00:24:10,480 Speaker 1: supercomputer today and what that means of course from cybersecurity 433 00:24:10,720 --> 00:24:18,639 Speaker 1: and particularly financial security keywords, passwords or whatever, uh cyber 434 00:24:18,760 --> 00:24:23,879 Speaker 1: cyber Uh, there's tremendous worry about what what could happen 435 00:24:24,960 --> 00:24:28,520 Speaker 1: when when these computers so to speak come online, which 436 00:24:28,600 --> 00:24:34,159 Speaker 1: still is several years away. What about now? What is 437 00:24:34,200 --> 00:24:39,480 Speaker 1: the situation right now? Well, right now there technically is 438 00:24:39,640 --> 00:24:45,280 Speaker 1: not a quantum computer as what is in terms of 439 00:24:45,320 --> 00:24:51,240 Speaker 1: what's projected. The basis for defining a quantum computer or 440 00:24:51,440 --> 00:24:54,320 Speaker 1: the ability for it to do whatever it needs you 441 00:24:54,440 --> 00:24:57,920 Speaker 1: wanted to do, is based on the number of cubits, 442 00:24:58,160 --> 00:25:03,119 Speaker 1: which is a measurement um in terms of what bits 443 00:25:03,200 --> 00:25:06,800 Speaker 1: were bits are to a computer today which I think 444 00:25:06,840 --> 00:25:11,320 Speaker 1: we're all familiar with. Cubits are what are the equivalent 445 00:25:12,200 --> 00:25:16,320 Speaker 1: for a quantum computer. It is estimated that at least 446 00:25:16,359 --> 00:25:20,240 Speaker 1: a thousand cubits would have to be created or programmed 447 00:25:20,400 --> 00:25:24,800 Speaker 1: from any manufacturer for a quantum computer to be online 448 00:25:24,840 --> 00:25:28,560 Speaker 1: and ready to go at this particular point in time. 449 00:25:29,600 --> 00:25:35,040 Speaker 1: Company like IBM, for example, UM has as it's working 450 00:25:35,119 --> 00:25:40,160 Speaker 1: towards creating a quantum computer, has about fifty to sixty 451 00:25:40,359 --> 00:25:46,560 Speaker 1: that have been have been programmed. UM. Now, one can 452 00:25:46,640 --> 00:25:51,400 Speaker 1: do things with that, but until you get to a thousand, 453 00:25:52,280 --> 00:25:58,240 Speaker 1: which probably according to IBM and recently chatting with Bob Sutter, 454 00:25:58,359 --> 00:26:02,320 Speaker 1: who who runs the program up at IBM, UH, that's 455 00:26:02,400 --> 00:26:07,359 Speaker 1: probably projected for them two thousand twenty three UM to 456 00:26:07,520 --> 00:26:14,280 Speaker 1: get to a situation where a quantum computer would be 457 00:26:15,280 --> 00:26:20,679 Speaker 1: totally online, ready to go, we're projecting two thousand, uh, 458 00:26:20,840 --> 00:26:23,800 Speaker 1: two thousand thirty, so you know, ten years from now. 459 00:26:24,920 --> 00:26:28,240 Speaker 1: So Alan, what we've seen over the last I don't 460 00:26:28,280 --> 00:26:30,360 Speaker 1: know decade or so, but certainly accelerated over the last 461 00:26:30,400 --> 00:26:33,760 Speaker 1: four years is is kind of a cold technology cold 462 00:26:33,800 --> 00:26:38,240 Speaker 1: war between China and the West as it relates to 463 00:26:38,359 --> 00:26:42,400 Speaker 1: quantum technology. Is that something that is also developing upon 464 00:26:42,480 --> 00:26:47,680 Speaker 1: those lines. Actually, I'd say it's terrifying um in terms 465 00:26:47,760 --> 00:26:52,200 Speaker 1: of what China is supposedly doing compared to what we're 466 00:26:52,240 --> 00:26:57,560 Speaker 1: doing or other so called Western countries um neutral countries 467 00:26:57,600 --> 00:27:01,160 Speaker 1: around the world. We obviously so they don't have complete 468 00:27:01,200 --> 00:27:05,639 Speaker 1: information about China's investment, but we do know that they 469 00:27:05,760 --> 00:27:11,240 Speaker 1: have created the equivalent of campuses or universities, I think 470 00:27:11,320 --> 00:27:15,080 Speaker 1: tanks just just to study what what what what they 471 00:27:15,160 --> 00:27:18,320 Speaker 1: can do or what could be done with quantum. My 472 00:27:18,520 --> 00:27:22,760 Speaker 1: understanding is they've invested well north of five to ten 473 00:27:22,840 --> 00:27:28,879 Speaker 1: billion dollars already and are literally driven to dominate in 474 00:27:29,000 --> 00:27:35,320 Speaker 1: this area. And unfortunately, um forgetting whatever your politics, my politics, 475 00:27:35,440 --> 00:27:42,200 Speaker 1: or anyone's politics might be. Instead of worrying about you 476 00:27:42,320 --> 00:27:46,600 Speaker 1: know which side of the fence turon a Democrat Republican, 477 00:27:47,280 --> 00:27:50,080 Speaker 1: this country should be worrying more about what the Chinese 478 00:27:50,119 --> 00:27:54,600 Speaker 1: are doing in uh quantum technology and and uh we 479 00:27:54,680 --> 00:27:59,040 Speaker 1: should really get cracking. I know that the Biden administration 480 00:27:59,200 --> 00:28:04,159 Speaker 1: is already an bounced several hundred million dollars towards further 481 00:28:04,600 --> 00:28:09,800 Speaker 1: research into quantum um, but that's a really just a 482 00:28:10,000 --> 00:28:13,520 Speaker 1: pittance in terms of what's probably needed compared to what 483 00:28:13,640 --> 00:28:17,680 Speaker 1: the Chinese are Because whoever has dominance in quantum or 484 00:28:17,800 --> 00:28:23,359 Speaker 1: gets their first could really raise havoc with um being 485 00:28:23,440 --> 00:28:28,399 Speaker 1: able to crack computer systems, financial networks and and the like. 486 00:28:29,200 --> 00:28:31,760 Speaker 1: So needless to say, that's pretty terrifying. If in fact 487 00:28:31,840 --> 00:28:36,359 Speaker 1: the Chinese have saved years and years and years and 488 00:28:36,440 --> 00:28:41,440 Speaker 1: developed developing fighter planes stealth technology. Just think what they 489 00:28:41,480 --> 00:28:45,520 Speaker 1: can do if they come up with this next type 490 00:28:45,600 --> 00:28:49,400 Speaker 1: of computing power um, which they will at this point 491 00:28:49,840 --> 00:28:53,000 Speaker 1: way before we will in this country. Well, you have 492 00:28:53,080 --> 00:28:55,120 Speaker 1: to tell us what you're invested in so we can 493 00:28:55,600 --> 00:29:00,240 Speaker 1: watch out for the future. All right, Well, it's it's 494 00:29:00,280 --> 00:29:04,560 Speaker 1: definitely uh. As I say, the press hasn't really picked 495 00:29:04,640 --> 00:29:06,800 Speaker 1: us up yet at all. You know, what companies are 496 00:29:06,840 --> 00:29:12,080 Speaker 1: you invested in? Alan Well? Um. In terms of myself, 497 00:29:12,680 --> 00:29:18,560 Speaker 1: I do two things. I create a research in this 498 00:29:18,800 --> 00:29:24,520 Speaker 1: area called Inside Quantum Technology, and we also do events. 499 00:29:24,600 --> 00:29:28,440 Speaker 1: We just had an event with six people from thirty 500 00:29:28,480 --> 00:29:32,760 Speaker 1: countries around the world with the seventies speakers UM. But 501 00:29:33,360 --> 00:29:37,160 Speaker 1: in terms of investing, the the investing that I do 502 00:29:37,400 --> 00:29:41,560 Speaker 1: on a venture capital basis, it's a different thing for 503 00:29:41,720 --> 00:29:44,240 Speaker 1: quantum because any anyone who is and and there are 504 00:29:44,320 --> 00:29:47,280 Speaker 1: hundreds of millions being invested every month in this uh 505 00:29:47,480 --> 00:29:51,200 Speaker 1: in this in this area. But you really have to 506 00:29:51,280 --> 00:29:54,760 Speaker 1: look out ten you know, ten fifteen twenty years if 507 00:29:54,800 --> 00:29:58,480 Speaker 1: you make an investment and venture capital. H So, while 508 00:29:58,600 --> 00:30:02,800 Speaker 1: I cover this from a media perspective, I'm not really investing, 509 00:30:02,840 --> 00:30:07,160 Speaker 1: although certainly I'm I'm watching because my horizon is more 510 00:30:07,280 --> 00:30:11,160 Speaker 1: like five years or seven years, not ten fifteen twenty years. 511 00:30:12,000 --> 00:30:14,480 Speaker 1: All right, And for anyone interested, there is a list 512 00:30:14,520 --> 00:30:16,560 Speaker 1: of the types of companies that you do invest in 513 00:30:17,320 --> 00:30:20,200 Speaker 1: in terms of private equity in sort of an exitent 514 00:30:20,240 --> 00:30:23,360 Speaker 1: fight ten years at your website, asimov Ventures dot com. 515 00:30:23,840 --> 00:30:26,720 Speaker 1: Our thanks to you for joining us today. Fascinating discussion 516 00:30:26,760 --> 00:30:31,160 Speaker 1: there with Alan Mecker of Asimov Adventures and decades of 517 00:30:31,240 --> 00:30:36,600 Speaker 1: experience in the most modern elements of computing and computing technology. 518 00:30:37,880 --> 00:30:41,280 Speaker 1: Thanks for listening to Bloomberg Markets podcast. You can subscribe 519 00:30:41,360 --> 00:30:44,840 Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast 520 00:30:44,920 --> 00:30:48,120 Speaker 1: platform you prefer. I'm Bonnie Quinn. I'm on Twitter at 521 00:30:48,160 --> 00:30:50,480 Speaker 1: Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at 522 00:30:50,520 --> 00:30:53,400 Speaker 1: pt Sweeney. Before the podcast, you can always catch us 523 00:30:53,440 --> 00:30:54,800 Speaker 1: worldwide at Bloomberg Radio.