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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Tough day to be a retailer here at Lululemon, Nike,

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Speaker 2: some disappointing number of stocks taking a hit here today.

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Speaker 2: Let's get the analysis and we can do that with Goyle.

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Speaker 2: She's the senior research channels covering all things on the

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Speaker 2: retail space for Bloomberg Intelligence. Joining us from Princeton via

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Speaker 2: zoom here pun them. Let's start with Nike here, stock

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Speaker 2: off about you know, eight percent here, I guess a

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Speaker 2: tough first half outlook here in Bloomberg reportings, talking about

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Speaker 2: some competition from upstarts on and Hoka talk to us

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Speaker 2: about Nike. What did you take away today?

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Speaker 3: Sure, the outlook is definitely much weaker than we would anticipated,

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Speaker 3: but I think they're positioning themselves for longer term growth.

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Speaker 3: So they talked a lot about innovation in the air

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Speaker 3: franchise that they have and really expanding that to other sneakers, aloettes,

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Speaker 3: and we think that will position them for longer term growth.

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Speaker 3: But definitely there is a softer start to the year.

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Speaker 3: The first half of fiscal twenty twenty five will be challenging.

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Speaker 3: The light at the end of the tunnel is that

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Speaker 3: two h twenty five will be better and will end

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Speaker 3: the year on a positive note based on their expectations.

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Speaker 3: And I think the real key here is to focus

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Speaker 3: on the product innovation that they're going to bring forward

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Speaker 3: over the coming twelve to eighteen months to really see

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Speaker 3: if Nike can continue its journey to maintain its brand lead.

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Speaker 3: It is a fifty billion dollar company owned Paul, So

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Speaker 3: when you know, folks talk about on in Hoka, when

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Speaker 3: you look at the size of the two versus what

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Speaker 3: Nike has, they're still very very very small in comparison, you.

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Speaker 4: Know, put them. I look at Nike and the one

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Speaker 4: of the other stocks you're watching Lulu Lemon today really

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Speaker 4: the big decliners in the S and P five hundred

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Speaker 4: and I wonder if there's any sort of broader takeaway,

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Speaker 4: sort of a macro takeaway to be had here about

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Speaker 4: the health of the consumer, or is this very much

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Speaker 4: you know, sort of just brand specific issues for these

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Speaker 4: two or is there sort of a return to office

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Speaker 4: story still at play with these two brands at all.

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Speaker 3: I think it's a combination of a multitude of things.

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Speaker 3: So I think the first is that, yes, there is

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Speaker 3: a consumer pullback that's happening. We heard that from Adidas

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Speaker 3: and Puma tou with their softer guidance, So that's not

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Speaker 3: necessarily a big surprise of the consumers pulling back on

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Speaker 3: discretionary spend, and we saw that with better numbers at

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Speaker 3: Walmart and Amazon, where you kind of push for value

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Speaker 3: a little more. On the other hand, you do have

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Speaker 3: to worry about the product because the one thing that

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Speaker 3: Little Lemon said that was interesting is yes, traffic was

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Speaker 3: down at stores, but conversion was also weaker, and that

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Speaker 3: means that there's something happening with the product. And they

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Speaker 3: did talk about the need to really up their product

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Speaker 3: cycle and replenished to have inventory in stock because they

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Speaker 3: did see some weakness from that. So I think it's

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Speaker 3: a culmination of a pullback in the consumer the product,

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Speaker 3: and also that the app leisure market I think is

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Speaker 3: still strong. I think there's still potential there Globally, I

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Speaker 3: do think coming off from the pandemic that you will

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Speaker 3: have some normalization of a wardrobe where it's going to

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Speaker 3: be more balanced today than it was let's say two

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Speaker 3: or three years ago. Oh, it was probably eighty percent

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Speaker 3: at leisure, twenty percent work life. Today it's probably leaning

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Speaker 3: back to fifty to fifty.

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Speaker 2: So you'll be relieved to know that I am not

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Speaker 2: a Lulu Lemon customer. But talk to me about like

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Speaker 2: fashion is it? I mean, it's all a similar type

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Speaker 2: of fabric and fit. So is it just colors and

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Speaker 2: patterns and things like that? How do you change that up?

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Speaker 2: Because I know getting the fashion right is so important,

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Speaker 2: you know for the companies that.

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Speaker 3: You follow, actually fall for Lululemon. Yes, it's about getting

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Speaker 3: the color and fashion right, but it's also about the

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Speaker 3: fit and the fabric. They're a ligne pan which are

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Speaker 3: their best sellers, you know, the biggest sell on that

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Speaker 3: is the way that they fit you. They make you

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Speaker 3: look good, and every woman wants to look good. So

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Speaker 3: that's the differentiator between a Lulu Lemon yoga pant and

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Speaker 3: let's say, on Nike yoga pant. There is a difference

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Speaker 3: in the quality of the pant that you're wearing and

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Speaker 3: the fit.

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Speaker 5: That it has.

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Speaker 4: Don't kid anyone. Paul's wearing yoga pants right now. Actually

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Speaker 4: their dress pants. They have some pretty good blue Lemonas

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Speaker 4: Rice men's dress pants.

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Speaker 2: Yeah, I've got a couple of pairs of those.

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Speaker 4: Ye, put them back to Nike. One headline I saw

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Speaker 4: that kind of shocked me is that Nike was able

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Speaker 4: to get the sponsorship of the German national soccer team,

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Speaker 4: taking it away from us from Audidos.

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Speaker 2: Yeah, which which is pretty Yeah, it's pretty you.

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Speaker 4: Know, shocking for a soccer fan. I mean, you grew

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Speaker 4: up watching Audidos on the shirts of every basically every team.

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Speaker 4: But how big of a deal is that as far

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Speaker 4: as that global soccer market for Nike and sort of

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Speaker 4: this rivalry with Adidas and that sponsorship.

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Speaker 3: Yeah, look, I think it's a big win for Nike

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Speaker 3: because Adidas is a German brand and has held that

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Speaker 3: sponsorship for I believe over seventy five years. So to

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Speaker 3: lose that to Nike is a big deal and it

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Speaker 3: puts Nike on a stronger foothold across the globe in

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Speaker 3: the field of soccer. So we do think that this

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Speaker 3: is a big win for them, But make no mistake

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Speaker 3: They paid a premium for this, so it wasn't something

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Speaker 3: that they took away at a steal. They definitely paid.

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Speaker 6: Up for it.

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Speaker 2: So I did just watch or recently watch it with

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Speaker 2: the Jordan, you know, and kind of story about how

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Speaker 2: he got and the relationship with Nike and kind of

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Speaker 2: how that all plays out. But now the dollars are

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Speaker 2: just so much bigger. So you know, so put me

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Speaker 2: as you look across the Punams, I mean the Nikes

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Speaker 2: of the world, and the Adidas and the Pumas and

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Speaker 2: things things like that. Is that still a huge part

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Speaker 2: of their marketing strategies is to align themselves with teams

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Speaker 2: with individual players. Is that still as big as it

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Speaker 2: always has been.

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Speaker 3: It is as big as it's always been, But now

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Speaker 3: it's harder to come up in that playing field with

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Speaker 3: some of the major players unless you have deep pockets.

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Speaker 3: So really only Nike and Adidas can afford to spend

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Speaker 3: the money that they're spending to win these leagues and

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Speaker 3: their players. These smaller companies like Puma you mentioned and

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Speaker 3: under Armour they're making a bet on rookies. So you

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Speaker 3: saw the success that under Armour has had with the

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Speaker 3: Curry franchise, and that bet was made a long time ago.

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Speaker 3: You're not going to see these smaller brands chase after

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Speaker 3: the established, bigger players and the bigger teams because they

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Speaker 3: don't have the pockets for it. And that's where Adidas

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Speaker 3: and Nike win, and that's what makes them really keep

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Speaker 3: their number one and number two positions in the global

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Speaker 3: sportsware industry.

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Speaker 4: Well put them. How about all the other sort of

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Speaker 4: also plays out there. Is there any sign of the

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Speaker 4: dominance of these two companies being threatened at all? You know,

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Speaker 4: we see a lot of these sort of Instagram brands,

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Speaker 4: you know, in Amazon brands. Is that a threat to

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Speaker 4: these these major players in this industry?

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Speaker 1: Yet?

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Speaker 3: I'd say that the industry is broadening, right, So in

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Speaker 3: the sports where world, traditionally it was all about performance

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Speaker 3: and being on the field playing. Today it's about walking

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Speaker 3: the roads and really wearing it in your day to

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Speaker 3: day life. So competition is growing, and there is also

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Speaker 3: competition growing on the perform in side with the Hokahs

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Speaker 3: and the Odds, they're very popular shoes and they've actually

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Speaker 3: taken share in the running category. So I do think

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Speaker 3: that both Arida and Nike have to step up their

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Speaker 3: game to really add more innovation, but they're still small,

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Speaker 3: so I don't think you know Nike is at risk

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Speaker 3: of losing its number one position just yet. They win

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Speaker 3: by a wide margin. But it's something to keep an

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Speaker 3: eye on over time.

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Speaker 7: Put them.

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Speaker 2: Let's step away from these two stories, share and look

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Speaker 2: at your overall coverage. You follow a wide range of retail.

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Speaker 2: You've done that for decades. One of the top retail

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Speaker 2: analysts on the street, What are some of the stories

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Speaker 2: that you think are interesting? Now? What are you talking

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Speaker 2: to your clients about these days?

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Speaker 3: I think we're talking about the consumer a lot, right.

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Speaker 3: The consumer is clearly pulled back and what does that

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Speaker 3: mean in an election year? So we think the consumer

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Speaker 3: is going to remain soft this year. But we think

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Speaker 3: the consumer is stretching their dollars so they're looking for value.

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Speaker 3: So value will remain top of mind. But that's that

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Speaker 3: they're traveling. So it's not that we're going into a

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Speaker 3: recession by any means. They're not going to fall off

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Speaker 3: a cliff, but they're spending money where they feel that

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Speaker 3: they're getting the most bang for it, and we think

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Speaker 3: there'll be a trend that we continue.

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Speaker 2: To see as a er on I mean, is that

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Speaker 2: a Walmart slash target story or does that steer me

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Speaker 2: to the maybe the dollar stores.

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Speaker 3: I'd say, you know, the winners here would probably be

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Speaker 3: and what we've seen in the past in the fourth

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Speaker 3: quarter is the Walmarts. Right, the Walmart's where you find

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Speaker 3: value and you find a broad range of assortment and

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Speaker 3: where you have a customer that's more broad based versus

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Speaker 3: the customer of a Dollar General, where there are more

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Speaker 3: low income and they are too pressured. Walmart attracts a

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Speaker 3: broader market and they offer the value that you get.

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Speaker 2: All right, put them excellent stuff, as always put them. Boil,

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Speaker 2: senior analyst. She covers all the retail space for Bloomberg Intelligence.

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Speaker 2: We were talking about Nike and Lulu Lemons some disappointing numbers.

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Speaker 2: Nike off about eight percent, but as Michael's reporting earlier,

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Speaker 2: Lululemon off about almost eighteen percent years so a big

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Speaker 2: pullback here for those two retail names. And the question

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Speaker 2: I think a lot of people might a lot of

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Speaker 2: investors when they look at their earnings from a Nike

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Speaker 2: er Lulu Lemma, what does it tell you about the consumer?

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Speaker 4: That's yeah, And it was interesting to hear put them

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Speaker 4: talk about that how they you know, it's not just execution,

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Speaker 4: it's not just market share. Story here, it does seem

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Speaker 4: like on top of everything else, there is a little

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Speaker 4: bit of some either spending pullback or at least bargaining hunt.

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Speaker 2: And then you compare that to what you hear from

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Speaker 2: like the cruise lines. They're still backing them. Yeah, I mean,

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Speaker 2: so people are spending money, They're just spending a little

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Speaker 2: bit differently than maybe a pre pandemic. I don't know,

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Speaker 2: still on that experiential track, I guess if you will,

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Speaker 2: because again you think about some of these the theme

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Speaker 2: park operators, the cruise directors of the hotels, the casinos

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Speaker 2: still sing really good traffic.

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Speaker 2: Let's get right to it. Lee Glasgow in the house,

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Speaker 2: darkening the door. Whenever we see them walking around, we

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Speaker 2: just grab them, you know, because it's a long walk

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Speaker 2: for me down to Princeton. So anyway, Lee, you've been

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Speaker 2: covering FedEx forever. You've been covering all these logistic companies,

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Speaker 2: the rails, the trucks, all the shippers, you know, this

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Speaker 2: stuff end to end. FedEx seems to me to be

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Speaker 2: a core core story within that global logistics. What went

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Speaker 2: wrong and then what have they been doing to fix it?

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Speaker 5: Yeah, so FedEx is a is a great story, and

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Speaker 5: it's an improving story. And the reality is that over

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Speaker 5: the years it got too big for itself and it

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Speaker 5: got too fat, and there was a lot of hesitation

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Speaker 5: to combine its network. So as an air network and

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Speaker 5: a ground network. Its ground network is mostly independent contractors

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Speaker 5: and its air network are employees, so they're you know,

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Speaker 5: there's it's not easy to integrate those networks, and a

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Speaker 5: lot of analysts have always said we should integrate them,

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Speaker 5: we should integrate them, and management say, you guys don't

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Speaker 5: understand our business. We can't do that. Well, fast forward,

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Speaker 5: they're doing it. And that's their Tricolor strategy where they're

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Speaker 5: you know, which is re re redesigning their air freight

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Speaker 5: network and they're also combining their express and ground and

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Speaker 5: services business into one.

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Speaker 1: Segment.

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Speaker 5: If you will. It's pretty much everything. But they're less

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Speaker 5: than truckload business, so they're doing a lot on.

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Speaker 2: This sounds like a good old fashion we got to

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Speaker 2: restructure our business.

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Speaker 5: Yeah, and they're gonna they're gonna emerge is a lot

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Speaker 5: more efficient. They're gonna emerge is a lot more profitable,

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Speaker 5: and that's the hope. You know, their express network has

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Speaker 5: really poor margins. I mean, their margins were two point

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Speaker 5: three percent in the quarter, and that was a real

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Speaker 5: good outperformance and what the street was expecting by one

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Speaker 5: hundred and ten basis points.

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Speaker 2: Oh function, Yeah, I'm just seeing that very good. Okay,

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Speaker 2: the numbers are the numbers are good. Yeah, okay, all right,

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Speaker 2: So what's next steps for them?

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Speaker 5: So, as you heard earlier, they announced a five billion

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Speaker 5: dollar stock buy back plan. I think that gives people

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Speaker 5: confidence in management's ability to execute execution. Risk is really

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Speaker 5: the number one concern I think the street might have.

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Speaker 5: As you probably saw in the Bloomberg terminal today, everyone's

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Speaker 5: raising their price targets and their estimates for physical twenty

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Speaker 5: twenty five and beyond, and that's really driven by you know,

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Speaker 5: they're they're cutting about one point eight billion and cost

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Speaker 5: this physical year, and they're going to do about two

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Speaker 5: point two billion next And if you think about it,

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Speaker 5: one point eight billion is about five dollars and fifty

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Speaker 5: five dollars and seventy five cents per share. And this

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Speaker 5: is a stock that you know was generating fifteen dollars

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Speaker 5: in EPs. So these are sizable increases in the overall

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Speaker 5: profitability company. You know, management, they've stumbled here and there,

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Speaker 5: but it really seems this last quarter that they're executing

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Speaker 5: and they're focused, uh, and they're building confidence and sentiment

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Speaker 5: is so important when it comes to FedEx, which has

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Speaker 5: struggled in the past.

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Speaker 4: You know, Lee, when you talk about saving cutting costs

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Speaker 4: by that degree, I mean, I assume that's that's mostly

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Speaker 4: headcount to some degree. Where are they cutting jobs? Is

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Speaker 4: it just redundancy between the separate units now that they're combined,

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Speaker 4: you know, a.

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Speaker 2: Coupany like fed X.

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Speaker 4: It seems like it'd be tough to cut those union jobs,

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Speaker 4: the drivers and that sort of thing. Is it middle

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Speaker 4: managers that are that are getting.

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Speaker 5: The FedEx is a non union show except for its pilots.

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Speaker 5: Their drivers are not UNI drivers. Most of their drivers

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Speaker 5: that come to your house or actually they don't work

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Speaker 5: for FedEx in the US drivers are union right correct

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Speaker 5: with the team stairs. So where they where are they

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Speaker 5: cutting heads? Well, it's they're not really cutting that deep.

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Speaker 5: What they're doing is they're getting rid of middle management.

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Speaker 5: Like I said in the beginning, they've gotten a little fat,

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Speaker 5: so they're getting rid of some middle management. A lot

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Speaker 5: of that is through attrition, some natural attrition.

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Speaker 4: Uh.

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Speaker 5: It's it's not like what was the guy's named Jack,

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Speaker 5: the chainsaw guy coming in with, you know, destroying companies.

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Speaker 5: I think it's going to be more of a gradual shift.

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Speaker 5: And as they combine networks, they're going to figure out

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Speaker 5: what where the redundancies lie. Uh, and they're going to

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Speaker 5: benefit from, you know, reducing those redundancies. And that's through

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Speaker 5: their their drive initiative and their network two point zero

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Speaker 5: initiatives that they have out.

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Speaker 2: There as FedEx or UPS or any other global shippers

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Speaker 2: that they talked about problems getting planes like from because

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Speaker 2: we Bowing's in the news every day. Unfortunately, we have

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Speaker 2: to talk to George Ferguson every day because Bowing's always

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Speaker 2: in the news. As any of these companies have ever said,

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Speaker 2: we're not getting the planes we need to far flow.

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Speaker 5: No, that's that's not a problem because what they're doing

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Speaker 5: is they're actually, you know, FedEx is trying to downsize

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Speaker 5: its fleet because with with this whole redesign of their

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Speaker 5: air fleet, they're going to need probably less planes over time,

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Speaker 5: and those planes that they're going to be operating are

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Speaker 5: going to be operating much more efficient. They're going to

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Speaker 5: have a more density. When you talk about freight and

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Speaker 5: transportation networks, it's all about density. How much stuff do

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Speaker 5: you have in whether your truck or your train or

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Speaker 5: your plane. Uh, And so that's going to be key

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Speaker 5: for them to drive those margins higher in the express business.

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Speaker 4: You know, Leah, I've read that there's a lot of

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Speaker 4: sort of R and D looking at the automation of

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Speaker 4: package delivery.

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Speaker 2: You know, is there a.

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Speaker 4: Chance in our lifetime that we'll see you know, sort

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Speaker 4: of driverless vehicles dropping our packages off that sort of thing.

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Speaker 5: I'm a a whole huge bull on like autonomous trucks

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Speaker 5: or delivery. But you know what they will be doing

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Speaker 5: is we'll be leveraging technology and AI to make sure

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Speaker 5: a package gets into the right network and gets and

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Speaker 5: it has that delivery promise that they have whether it's

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Speaker 5: overnight or deferred. You know, what they're really and do

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Speaker 5: be doing is using technology to make sure that package

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Speaker 5: gets into the right network.

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Speaker 4: Yeah, but you don't think the technology is going to

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Speaker 4: be there to actually have a driverless type of.

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Speaker 2: Do not not anytime soon.

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Speaker 5: Maybe you know, little little niche markets they might have

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Speaker 5: and kind of just highlighting you know, those little robots

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Speaker 5: that grows that go around towns and you see pictures

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Speaker 5: of people beating up the poor little robots, right knocking

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Speaker 5: them over exactly.

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Speaker 2: So during the pandemic, Lee became, for better or worse,

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Speaker 2: kind of our supply chain grew, discovers all the companies,

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Speaker 2: like the shipping companies that get this stuff to our shore,

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Speaker 2: then the rails that take them into like you know,

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Speaker 2: Middle of America, and then the trucking companies that deliver

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Speaker 2: them to everywhere and all the all that kind of stuff.

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Speaker 2: So let's start with the rails here. I'm looking at

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Speaker 2: the trailing twelve months, these stocks have done pretty well.

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Speaker 2: I mean, you know, they're all up mid thirties percent

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Speaker 2: in NORFK, Southern CSX, Union Pacific, pretty good performance. What's

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Speaker 2: the story for the rails?

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Speaker 5: These stations Yeah, there's really not a homogeneous story with

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Speaker 5: the rails. Interestingly enough, it's really company specific. Norfolk Southern.

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Speaker 5: It's all about activists investors. You know, they're dealing with Anquora,

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Speaker 5: which is trying to kick out management and put their

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Speaker 5: own precision scheduling railroad management team in. Norfolk Southern has

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Speaker 5: come back and said, we have our own guy that

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Speaker 5: we want to put in from PSR. Some investors might be, well,

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Speaker 5: it's a little too late. You should have done that

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Speaker 5: a couple of years ago. So no matter who wins

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Speaker 5: the battle, Norfolk Southern will emerge as a much more

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Speaker 5: profitable company. And then Union Pacific another story. They had

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Speaker 5: a change in CEO Jim Venna as a PSR Persition

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Speaker 5: Scheduling railroad and guy. And for those out there, PSR

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Speaker 5: is really just six stigma for the railroads. It's just

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Speaker 5: operating really efficient networks, sweating assets, that sort of stuff.

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Speaker 5: And he's coming in and he's got, you know, his

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Speaker 5: own vision of how that railroad should operate. And then

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Speaker 5: the littlest one, even after a merger Canadian Pacific Kansas City,

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Speaker 5: you know, they have their own growth story because now

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Speaker 5: they are the only road that goes from Canada into Mexico.

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Speaker 2: It's a great story.

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Speaker 5: And so they are the only railroad that is probably

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Speaker 5: going to grow earnings in the in this last quarter,

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Speaker 5: the first quarter.

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Speaker 2: How about the truckers. I'm looking and I put up JBHT.

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Speaker 2: That's the ticker I always remember. You hit the BEQ function.

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Speaker 2: It gives you the relative valuation relative to the what's peers?

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Speaker 2: Truckers not doing as well. I'm looking at JBHD over

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Speaker 2: the trailing twelve months, it's up eighteen percent, but some

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Speaker 2: of the others are down. What's the word on the

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Speaker 2: trucking biz?

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Speaker 5: So, trucking has been not great, and that's really there's

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Speaker 5: just too much supply out there, and that excess supply

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Speaker 5: is killing the truckloads spot market, which is down, you know,

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Speaker 5: mid teens from last year, and that is weighing on

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Speaker 5: contractual rates and that's where most publicly traded trucking companies play.

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Speaker 5: Some peer play truckload carriers are like Heartland expressed. Night

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Speaker 5: Swift is a major truckload carrier, so as Werner, But

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Speaker 5: you know a lot of them don't play in that

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Speaker 5: really volatile spot market business. But it does impact their

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Speaker 5: overall earnings ability, and a lot of them have been

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Speaker 5: diversifying into less volatile Businesses Warner, for instance, it's a

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Speaker 5: big dedicated carrier, so it's more like we're going to

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Speaker 5: they'll go to Walmart and say we're going to haul

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Speaker 5: stuff for you between Chicago and New York. We'll do

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Speaker 5: ten trucks a week or between dcs and retail stores.

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Speaker 5: And they even sometimes even you know, load the shelves

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Speaker 5: at CBS. Them dedicated services. So that's one area. Freight brokerage,

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Speaker 5: which is obviously non asset and higher ROIC, which is

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Speaker 5: attractive to a lot of them. And you know when

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Speaker 5: you started with JB Hunt, JBI Hunt, their trucking company

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Speaker 5: is one of the the trucking company business is probably

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Speaker 5: one of their smallest segments. It's really an intermodal provider

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Speaker 5: and a brokerage provider and a dedicated provider.

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Speaker 3: You know.

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Speaker 2: Lee.

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Speaker 4: The other getting back to FedEx, the other big headline

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Speaker 4: was this five billion dollar share buy back. Is that

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Speaker 4: what you think has investors excited or is it more

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Speaker 4: the actual execute should end their performance?

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Speaker 5: I think is actually both. I think I think they

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Speaker 5: wouldn't have said five billion if management isn't confident on

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Speaker 5: their ability to execute. Like I said, execution risk is

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Speaker 5: high because things happen at you know, a lot of

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Speaker 5: transportation companies like to say their businesses are outside sports,

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Speaker 5: you have weather to deal with, you know. And that

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Speaker 5: was something that was really interesting during the quarter. FedEx

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Speaker 5: their express business and their Memphis hub, which is their

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Speaker 5: biggest hub, dealt with a lot of bad weather and

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Speaker 5: they were able to it really didn't impact it that much.

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Speaker 5: And a lot of people were expecting low margins on

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Speaker 5: that express business of around one percent because of the weather.

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Speaker 5: And again they see that expectation by around one hundred

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Speaker 5: and ten basis points.

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Speaker 2: All right, so that'll step back, we'll put it all together.

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Speaker 2: Supply chain, are we getting is it fixed? Are we

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Speaker 2: back to new normal? Are we back to a new normal?

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Speaker 2: If I order something, or for more importantly retail or

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Speaker 2: order something, they expect to get it by a certain date.

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Speaker 2: Are they going to get it by that date?

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Speaker 8: Yeah?

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Speaker 5: And like the biggest risks looking forward is that the

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Speaker 5: East Coast ports are negotiating with their late that's in

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Speaker 5: September that that contract comes due, and so what you

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Speaker 5: could see is some work stoppages. You know, God forbid

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Speaker 5: a strike, and that's putting a lot of retailers and

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Speaker 5: shippers unnoticed. They might be moving freight to the West coast.

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Speaker 5: They might start ordering for peak season a little earlier,

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Speaker 5: so peak could be a little lumpier if you will

437
00:21:21,400 --> 00:21:24,119
Speaker 5: start a little earlier. So I think that that's the

438
00:21:24,280 --> 00:21:27,399
Speaker 5: biggest like risk I guess down the road. Obviously, the

439
00:21:27,480 --> 00:21:30,280
Speaker 5: geopolitical stuff we can we can never guess when when

440
00:21:30,440 --> 00:21:31,479
Speaker 5: when that's going to hit the fan.

441
00:21:31,640 --> 00:21:34,280
Speaker 2: You know, during during the pandemic, we had Gene Soroka,

442
00:21:34,320 --> 00:21:36,919
Speaker 2: who runs the Port of la He was on our

443
00:21:36,960 --> 00:21:39,359
Speaker 2: show a lot. He's really helpful in understanding kind of

444
00:21:39,440 --> 00:21:41,560
Speaker 2: where these ships are from China, you know, where they

445
00:21:41,600 --> 00:21:42,919
Speaker 2: go on. How long did they have to sit out

446
00:21:42,960 --> 00:21:46,160
Speaker 2: there and import and during their work issues. I guess

447
00:21:46,160 --> 00:21:48,000
Speaker 2: I'm not sure if they actually had a strike, I

448
00:21:48,040 --> 00:21:51,560
Speaker 2: can't recall, but they lost some business to the East coast, right,

449
00:21:52,080 --> 00:21:54,840
Speaker 2: and you know he's been coming back here and kind

450
00:21:54,880 --> 00:21:57,440
Speaker 2: of trying to get that business back for ye So

451
00:21:57,560 --> 00:22:01,359
Speaker 2: it is competitive between ports. But now well I can't

452
00:22:01,359 --> 00:22:03,520
Speaker 2: even get through the Panama Canal easily right because I

453
00:22:03,560 --> 00:22:04,520
Speaker 2: got a water problem there.

454
00:22:04,560 --> 00:22:06,760
Speaker 5: You gotta we got low water go fix that.

455
00:22:07,200 --> 00:22:08,720
Speaker 2: You got to get you down there to fix that.

456
00:22:08,840 --> 00:22:10,480
Speaker 2: I mean, what do you do with a low water

457
00:22:10,800 --> 00:22:13,960
Speaker 2: in the Panama Canal? Start digging? I guess rain dance maybe,

458
00:22:15,000 --> 00:22:17,000
Speaker 2: But that's a real issue, right, Yes, it is.

459
00:22:17,160 --> 00:22:20,320
Speaker 5: And what happens is that the ships that normally transverse

460
00:22:20,720 --> 00:22:24,320
Speaker 5: across traverse across the Panama Canal can do so, but

461
00:22:24,440 --> 00:22:26,320
Speaker 5: they can do so with less freight in it, So

462
00:22:26,440 --> 00:22:31,399
Speaker 5: it weighs it down because it's it's the canal is

463
00:22:31,600 --> 00:22:35,040
Speaker 5: more shallow, so there are ships going through, but those

464
00:22:35,080 --> 00:22:37,840
Speaker 5: ships are carrying less freight, and so therefore the cost

465
00:22:37,960 --> 00:22:41,000
Speaker 5: per ton of whatever you're shipping increases.

466
00:22:41,760 --> 00:22:41,920
Speaker 1: You know.

467
00:22:42,160 --> 00:22:44,280
Speaker 5: The Sue West Canal is probably more of an issue

468
00:22:44,480 --> 00:22:45,520
Speaker 5: of what's going on there with.

469
00:22:45,520 --> 00:22:47,760
Speaker 2: The anything going through there these days.

470
00:22:48,080 --> 00:22:51,040
Speaker 5: If you're a Chinese ship or an Iranian ship.

471
00:22:50,920 --> 00:22:52,560
Speaker 2: Really don't let you go through.

472
00:22:52,800 --> 00:22:53,640
Speaker 5: They'll let you go through.

473
00:22:53,880 --> 00:22:56,000
Speaker 4: Yeah, they came out and said yesterday they won't touch them.

474
00:22:56,160 --> 00:22:56,400
Speaker 2: Yeah.

475
00:22:56,560 --> 00:22:59,159
Speaker 5: Yeah. And obviously you know, the Hoothies are aligned with

476
00:22:59,200 --> 00:23:01,879
Speaker 5: the Iranians and their Indians are partners with the Chinese

477
00:23:01,960 --> 00:23:05,080
Speaker 5: and the Russians, so I know they're able to traverse

478
00:23:05,160 --> 00:23:05,560
Speaker 5: through there.

479
00:23:05,680 --> 00:23:10,040
Speaker 2: See, I'm telling you logistics supply chain. It's fascinating to me.

480
00:23:10,240 --> 00:23:12,959
Speaker 2: And you know what, I totally during business school when

481
00:23:12,960 --> 00:23:15,080
Speaker 2: we had that class, I skipped it probably half the

482
00:23:15,119 --> 00:23:16,920
Speaker 2: time to go across and play the do golf course.

483
00:23:17,160 --> 00:23:19,240
Speaker 4: Was one of those things that no one really worried

484
00:23:19,240 --> 00:23:21,840
Speaker 4: about until you had until it was crisis time, right

485
00:23:21,840 --> 00:23:24,320
Speaker 4: And I mean Lee obviously worried about it. But Lee,

486
00:23:24,359 --> 00:23:27,480
Speaker 4: how do you think sort of you know, now that

487
00:23:27,560 --> 00:23:30,720
Speaker 4: we're on the other side of the pandemic, it was

488
00:23:30,800 --> 00:23:33,439
Speaker 4: such a crisis with logistics and supply chains.

489
00:23:34,640 --> 00:23:35,520
Speaker 2: Is there a legacy?

490
00:23:35,800 --> 00:23:37,960
Speaker 4: You know, no company wants to sort of fight the

491
00:23:38,040 --> 00:23:41,280
Speaker 4: last war, but are there sort of permanent changes that

492
00:23:41,880 --> 00:23:45,280
Speaker 4: you can look at and say, these companies have been

493
00:23:45,320 --> 00:23:48,760
Speaker 4: able to eke out some efficiencies or something about their

494
00:23:48,800 --> 00:23:51,840
Speaker 4: business that they learned a lesson from these supply chain

495
00:23:51,880 --> 00:23:53,000
Speaker 4: issues that they'll carry forward.

496
00:23:53,080 --> 00:23:53,199
Speaker 7: Right.

497
00:23:53,240 --> 00:23:55,399
Speaker 5: Well, the changes that we're seeing as an increase in

498
00:23:55,560 --> 00:23:58,920
Speaker 5: near shoring and you know, de risking, and the reality

499
00:23:59,080 --> 00:24:00,880
Speaker 5: is that this is not going to happen overnight. It's

500
00:24:00,920 --> 00:24:04,399
Speaker 5: going to be you know, like watching grass grow. You know,

501
00:24:04,400 --> 00:24:06,240
Speaker 5: it takes a long time to put a new facility

502
00:24:06,320 --> 00:24:09,440
Speaker 5: up in Mexico or even the United States for that matter.

503
00:24:09,760 --> 00:24:11,640
Speaker 5: So I think you're going to see more and more

504
00:24:11,720 --> 00:24:14,000
Speaker 5: of that, and that's a that's a net positive for

505
00:24:14,040 --> 00:24:17,240
Speaker 5: the domestic transportation companies. It's a net positive for like

506
00:24:17,359 --> 00:24:21,480
Speaker 5: I mentioned earlier, Canadian Pacific, who has operations in Mexico, Werner,

507
00:24:21,520 --> 00:24:24,360
Speaker 5: who does a lot of cross border business across Mexico.

508
00:24:24,680 --> 00:24:27,639
Speaker 5: So these are companies that will definitely benefit from that

509
00:24:27,920 --> 00:24:31,720
Speaker 5: from that movement, and it's a long term, slow secular

510
00:24:31,800 --> 00:24:33,720
Speaker 5: growth story for transportation a.

511
00:24:33,760 --> 00:24:35,960
Speaker 2: Right, Lee great Stuff is always always appreciate getting your time,

512
00:24:36,000 --> 00:24:38,919
Speaker 2: Lee Classical. He's senior Transport Logistics and Shipping on us

513
00:24:38,960 --> 00:24:40,959
Speaker 2: for Bloomberg Intelligence, Joining us life here in our Bloomberg

514
00:24:41,000 --> 00:24:42,320
Speaker 2: Interactive Brokers studio.

515
00:24:43,760 --> 00:24:47,600
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

516
00:24:47,720 --> 00:24:51,040
Speaker 1: weekdays at ten am Eastern on focarplaying then broun Otto

517
00:24:51,160 --> 00:24:54,000
Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

518
00:24:54,119 --> 00:24:57,080
Speaker 1: get your podcasts, or watch us live on YouTube.

519
00:24:58,720 --> 00:25:02,440
Speaker 2: Story out of Tesla Tesla trim's car output in China

520
00:25:03,000 --> 00:25:06,480
Speaker 2: as EV sales growth slows, and that is probably the

521
00:25:06,680 --> 00:25:09,440
Speaker 2: number one issue I would think for the stock, even

522
00:25:09,480 --> 00:25:11,000
Speaker 2: for the industry A little bit is kind of what

523
00:25:11,320 --> 00:25:15,120
Speaker 2: is the ultimate demand for electric vehicles here in near term,

524
00:25:15,160 --> 00:25:18,399
Speaker 2: but then even also going forward, Tesla stock obviously is

525
00:25:18,520 --> 00:25:20,560
Speaker 2: taking it on the chin. It's not about two percent today,

526
00:25:20,600 --> 00:25:22,720
Speaker 2: but here to date it's off about thirty two percent.

527
00:25:22,760 --> 00:25:25,720
Speaker 2: So there's real some concern out there about demands. Let's

528
00:25:25,760 --> 00:25:28,639
Speaker 2: get right to it. Steve Man, he's our global autos

529
00:25:28,720 --> 00:25:31,520
Speaker 2: research analyst for Bloomberg Intelligence. He's based out of Princeton,

530
00:25:31,520 --> 00:25:34,160
Speaker 2: New Jersey, joining us via zoom here. So Steve talked

531
00:25:34,160 --> 00:25:37,560
Speaker 2: to us about this news from Tesla trimming its output

532
00:25:37,800 --> 00:25:39,960
Speaker 2: in China. What's driving that?

533
00:25:41,680 --> 00:25:44,119
Speaker 7: Yeah, Paul, I mean the stock's down about one and

534
00:25:44,119 --> 00:25:47,600
Speaker 7: a half percent. Like you said, I think the consensus

535
00:25:47,680 --> 00:25:52,760
Speaker 7: have pretty much factored in the potential cuts in production

536
00:25:53,000 --> 00:25:56,800
Speaker 7: given the demand. I think demand I think in in

537
00:25:57,359 --> 00:26:00,639
Speaker 7: China it is slowing down. There's a lot of price cutting,

538
00:26:01,119 --> 00:26:04,520
Speaker 7: not just from Tesla but from by D and GLY.

539
00:26:05,080 --> 00:26:09,119
Speaker 7: It's a never ending price cutting cycle over there. In

540
00:26:09,200 --> 00:26:11,879
Speaker 7: the US, we're actually forecasting to be up nine percent,

541
00:26:12,000 --> 00:26:16,240
Speaker 7: definitely single digit, down from double digit growth in the

542
00:26:16,320 --> 00:26:20,800
Speaker 7: past couple of years. So you know, I think the

543
00:26:21,240 --> 00:26:25,240
Speaker 7: production cuts are probably mainly driven by the US and

544
00:26:25,280 --> 00:26:28,040
Speaker 7: the China market. European to a lesser extent.

545
00:26:29,119 --> 00:26:32,200
Speaker 4: You know, Steve, as you mentioned, BYD the big competitor

546
00:26:32,359 --> 00:26:36,639
Speaker 4: to Tesla in China. I always hear how fierce that

547
00:26:36,760 --> 00:26:39,520
Speaker 4: competition is. But I wonder how the vehicle stack up

548
00:26:39,640 --> 00:26:44,600
Speaker 4: is BYD actually making a car that is as high

549
00:26:44,680 --> 00:26:48,080
Speaker 4: performance as has all the bells and whistles of a Tesla.

550
00:26:48,359 --> 00:26:49,480
Speaker 2: Were they a little bit behind?

551
00:26:50,480 --> 00:26:53,640
Speaker 7: I think I think, you know, by D and other

552
00:26:54,119 --> 00:26:57,399
Speaker 7: local Chinese automd makers, because they're so focused in the

553
00:26:57,520 --> 00:27:00,639
Speaker 7: Chinese market. I mean, now they're starting to get you know,

554
00:27:01,400 --> 00:27:04,760
Speaker 7: kind of extend beyond the China market. You know, they

555
00:27:05,160 --> 00:27:08,160
Speaker 7: they're pretty nimble in addressing some of the needs from

556
00:27:08,200 --> 00:27:14,360
Speaker 7: the consumer consumer side, especially on the connectivity and all

557
00:27:14,359 --> 00:27:17,719
Speaker 7: the infultainment system that they have. So they are are

558
00:27:18,000 --> 00:27:20,920
Speaker 7: you know, pretty much catered to the Chinese market. They're

559
00:27:20,920 --> 00:27:25,120
Speaker 7: there a pretty good job on that. In terms of quality,

560
00:27:25,240 --> 00:27:29,480
Speaker 7: they've come up to curve quite quite quite a bit.

561
00:27:29,680 --> 00:27:32,840
Speaker 7: I think I remember covering I remember visiting the Boid

562
00:27:33,040 --> 00:27:36,520
Speaker 7: plant probably around eight nine years ago. You know, I

563
00:27:36,640 --> 00:27:41,560
Speaker 7: still see like hammers, people using hammers to punch vendors together.

564
00:27:41,720 --> 00:27:44,879
Speaker 7: But now they're you know, they've moved well beyond that,

565
00:27:45,600 --> 00:27:49,840
Speaker 7: I think, you know, not really nationalism, but you know,

566
00:27:50,000 --> 00:27:53,399
Speaker 7: with their cheaper cars with lower cost of production, the

567
00:27:53,520 --> 00:27:56,920
Speaker 7: Chinese have been very competitive and been taken market share

568
00:27:56,960 --> 00:27:57,800
Speaker 7: from foreign brands.

569
00:27:58,520 --> 00:28:01,840
Speaker 2: All right, So just what's your view kind of over

570
00:28:01,960 --> 00:28:06,639
Speaker 2: the overall demand for electric vehicles globally. The concern is

571
00:28:06,760 --> 00:28:08,080
Speaker 2: I think with a lot of investors that it is

572
00:28:08,320 --> 00:28:11,040
Speaker 2: materially slowing down. A. Do you agree with that? And B?

573
00:28:12,000 --> 00:28:13,000
Speaker 2: Why do you think that is?

574
00:28:14,880 --> 00:28:18,200
Speaker 7: It's about affordability. If you look at a lot of

575
00:28:18,240 --> 00:28:23,280
Speaker 7: the vehicles out there in the US and Europe, EV's

576
00:28:23,320 --> 00:28:27,280
Speaker 7: out there, they're really expensive. You know, they're above fifty

577
00:28:27,359 --> 00:28:30,760
Speaker 7: thousand dollars. There are a few that are below fifty.

578
00:28:31,440 --> 00:28:35,080
Speaker 7: There's not that many that are below thirty. So it's

579
00:28:35,200 --> 00:28:37,960
Speaker 7: really an affordability issues. A lot of the people that

580
00:28:38,560 --> 00:28:41,640
Speaker 7: can afford EV have, you know, and like an EV

581
00:28:41,840 --> 00:28:46,000
Speaker 7: have purchased one. But what's really exciting, I think in

582
00:28:46,120 --> 00:28:49,600
Speaker 7: the next couple of years, and I think we'll see

583
00:28:49,640 --> 00:28:54,440
Speaker 7: a potential psychicyclical improvement in evs is actually in twenty

584
00:28:54,480 --> 00:28:57,760
Speaker 7: five and twenty twenty six, when there's a whole bunch

585
00:28:57,840 --> 00:29:02,440
Speaker 7: of kind of sub thirty thousand EV's come to the marketplace,

586
00:29:02,960 --> 00:29:04,480
Speaker 7: especially in the US.

587
00:29:04,920 --> 00:29:08,760
Speaker 4: In Europe, you know, Steve, some days, anyone who is

588
00:29:08,840 --> 00:29:13,040
Speaker 4: on the X social platform might actually forget that Elon

589
00:29:13,160 --> 00:29:17,520
Speaker 4: Musk is head of Tesla and he's so focused and

590
00:29:17,800 --> 00:29:21,200
Speaker 4: active on X in these sort of culture war issues.

591
00:29:21,600 --> 00:29:24,480
Speaker 4: Is there any sign of that in the numbers yet?

592
00:29:24,760 --> 00:29:28,200
Speaker 4: As far as affecting demand, is his you know, or

593
00:29:28,320 --> 00:29:32,880
Speaker 4: his political stances moving the needle at all, turning any

594
00:29:33,240 --> 00:29:34,280
Speaker 4: potential customers off?

595
00:29:34,320 --> 00:29:34,680
Speaker 8: Do you think?

596
00:29:35,880 --> 00:29:36,160
Speaker 2: I mean?

597
00:29:36,360 --> 00:29:40,160
Speaker 7: I think yeah, I think you know, people who buy

598
00:29:40,360 --> 00:29:43,960
Speaker 7: EV's and are looking to buy a car, I think

599
00:29:44,040 --> 00:29:47,520
Speaker 7: they are disconnected for some of the rhetoric that comes

600
00:29:47,560 --> 00:29:52,400
Speaker 7: out from Elon Musk. You know, their performance in terms

601
00:29:52,440 --> 00:29:55,400
Speaker 7: of sales is actually no different than what everybody else

602
00:29:55,520 --> 00:29:58,800
Speaker 7: is seeing. So I really don't think there's a huge

603
00:29:58,880 --> 00:30:02,960
Speaker 7: impact on sales, you know, based on what he writes

604
00:30:03,040 --> 00:30:06,760
Speaker 7: on aslor, he said, what he says on interviews, not

605
00:30:06,880 --> 00:30:07,480
Speaker 7: at all talk to.

606
00:30:07,560 --> 00:30:11,520
Speaker 2: Us about the profitability of the EV car manufacturing right now.

607
00:30:11,680 --> 00:30:17,000
Speaker 2: If prices are being cut the unit profitability, what's going

608
00:30:17,040 --> 00:30:20,600
Speaker 2: on there? Because they had achieved I believe some time

609
00:30:20,640 --> 00:30:22,960
Speaker 2: ago positive unit profitability.

610
00:30:24,400 --> 00:30:27,200
Speaker 7: They have and they still are. And look, you know,

611
00:30:27,360 --> 00:30:30,440
Speaker 7: the one of the issues that was facing the industry

612
00:30:30,680 --> 00:30:34,240
Speaker 7: in the past eighteen months is price cutting, and I'm

613
00:30:34,360 --> 00:30:37,320
Speaker 7: hoping that, you know, we're right at the tail end

614
00:30:37,360 --> 00:30:42,320
Speaker 7: of it, because Tesla actually has announced price increases in

615
00:30:42,520 --> 00:30:46,560
Speaker 7: China starting April first. It's about a five percent five

616
00:30:46,640 --> 00:30:50,160
Speaker 7: to eight percent increase if you also strip out some

617
00:30:50,280 --> 00:30:53,280
Speaker 7: of the other incentives that are out there. And they're

618
00:30:53,320 --> 00:30:57,640
Speaker 7: also planning those price increases in Europe as well as

619
00:30:57,680 --> 00:31:00,000
Speaker 7: the US. And I think part of that is because

620
00:31:00,360 --> 00:31:03,640
Speaker 7: the material costs for batteries are actually have ticked up

621
00:31:03,640 --> 00:31:07,200
Speaker 7: a little bit, so, you know, the material costs for

622
00:31:07,280 --> 00:31:12,000
Speaker 7: battery increasing could be a catalyst for an end to

623
00:31:12,120 --> 00:31:14,840
Speaker 7: this seems like a never ending price cutting.

624
00:31:15,840 --> 00:31:18,760
Speaker 4: How's the cyber truck doing, Steve? Is it is it

625
00:31:18,920 --> 00:31:20,640
Speaker 4: meeting expectations.

626
00:31:21,480 --> 00:31:25,000
Speaker 7: Cyber trucks? I think it's it is meeting expectation. They're

627
00:31:25,000 --> 00:31:28,920
Speaker 7: still ramping that up. Uh, you know, sales have been

628
00:31:29,080 --> 00:31:31,840
Speaker 7: there's you know, they're trying to fill the million unit

629
00:31:31,960 --> 00:31:35,080
Speaker 7: back order. And according to you know what we're hearing

630
00:31:35,160 --> 00:31:39,200
Speaker 7: in the marketplace, the used vehicles, uh, while used vehicles

631
00:31:39,280 --> 00:31:42,840
Speaker 7: meaning a few weeks, few months old they're actually selling

632
00:31:42,960 --> 00:31:47,680
Speaker 7: at you know, two times the amount that they they

633
00:31:48,040 --> 00:31:50,080
Speaker 7: that they're selling with the new vehicles.

634
00:31:50,120 --> 00:31:50,360
Speaker 1: Wow.

635
00:31:50,560 --> 00:31:52,240
Speaker 2: Really so yeah, so I.

636
00:31:52,280 --> 00:31:55,960
Speaker 7: Think there is demand for it, but again it's not

637
00:31:56,120 --> 00:31:59,080
Speaker 7: going to be at the same volume as the Model three,

638
00:31:59,120 --> 00:32:02,320
Speaker 7: in the Model Why, where they're selling over a million units,

639
00:32:02,880 --> 00:32:05,560
Speaker 7: close to two million units. This is still going to

640
00:32:05,560 --> 00:32:10,000
Speaker 7: be relegated to the to ane market, to a smaller

641
00:32:10,040 --> 00:32:11,080
Speaker 7: group of consumers.

642
00:32:11,440 --> 00:32:13,400
Speaker 2: All right, good stuff, Steve Man, Thank you so much

643
00:32:13,440 --> 00:32:15,920
Speaker 2: for joining us. I always appreciate getting your thought. Steve Man,

644
00:32:15,960 --> 00:32:18,560
Speaker 2: Global autos analysts for Bloomberg Intelligence.

645
00:32:21,080 --> 00:32:24,920
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

646
00:32:25,040 --> 00:32:27,960
Speaker 1: weekdays at ten am Eastern on Apple car Play and

647
00:32:28,080 --> 00:32:31,320
Speaker 1: Android Auto with the Bloomberg Business. You can also listen

648
00:32:31,480 --> 00:32:34,560
Speaker 1: live on Amazon Alexa from our flagship New York station

649
00:32:34,960 --> 00:32:37,680
Speaker 1: just say Alexa playing Bloomberg eleven thirty.

650
00:32:39,000 --> 00:32:40,960
Speaker 2: All right, so we've had I'm gonna call it a

651
00:32:41,280 --> 00:32:44,360
Speaker 2: really really good week for the IPO market. A lab

652
00:32:44,440 --> 00:32:46,640
Speaker 2: which is a great particular I love that alab four

653
00:32:46,720 --> 00:32:51,960
Speaker 2: astra that stucks up again. Ipude started trading wednesday. Reddit

654
00:32:52,720 --> 00:32:55,040
Speaker 2: started trading yesterday, was up a gajillion percent. It's down

655
00:32:55,600 --> 00:32:57,720
Speaker 2: nine percent to they given a little bit back. No

656
00:32:57,800 --> 00:32:59,400
Speaker 2: big deal there, But I'm going to get into the

657
00:32:59,440 --> 00:33:02,240
Speaker 2: story here because it seemed like very well received Reddit

658
00:33:02,720 --> 00:33:07,320
Speaker 2: by the market yesterday. The IPO market. Mandy Singh Joints

659
00:33:07,400 --> 00:33:09,960
Speaker 2: is here. He pitched me hard yesterday to go in

660
00:33:10,440 --> 00:33:12,480
Speaker 2: size on this IPO. So I put a ten percent

661
00:33:12,600 --> 00:33:14,000
Speaker 2: order and I'm not sure if I got anything but

662
00:33:14,680 --> 00:33:16,920
Speaker 2: with the underwriters. But Mandy Singing joins us back here

663
00:33:16,960 --> 00:33:21,000
Speaker 2: in our Bloomberg Interactive Broker studio. So I guess Reddit

664
00:33:21,160 --> 00:33:23,160
Speaker 2: is a social media platform. You get a big audience,

665
00:33:23,160 --> 00:33:26,440
Speaker 2: you sell advertising. We've seen that game before big cap

666
00:33:26,560 --> 00:33:29,600
Speaker 2: ones or the facebooks, the Googles. The smaller caps are

667
00:33:29,640 --> 00:33:32,040
Speaker 2: the snaps and all that kind of stuff. This fits

668
00:33:32,080 --> 00:33:35,680
Speaker 2: into the smaller cap thing. Why can't they make money

669
00:33:35,680 --> 00:33:36,240
Speaker 2: on that business?

670
00:33:37,160 --> 00:33:41,680
Speaker 6: Well, one, if you compare the user base, it's still

671
00:33:42,120 --> 00:33:44,640
Speaker 6: off the size of you know, Snap in Pinterest. But

672
00:33:44,800 --> 00:33:47,680
Speaker 6: remember Snap and Pinterests are three to four times bigger

673
00:33:47,720 --> 00:33:52,480
Speaker 6: in terms of revenue. So this platform is vastly under monetized.

674
00:33:52,560 --> 00:33:53,240
Speaker 2: Why is that the thing?

675
00:33:53,560 --> 00:33:56,560
Speaker 6: Well, they never had an app platform to begin with,

676
00:33:57,000 --> 00:34:01,200
Speaker 6: and they started developing ad texts solutions over the last

677
00:34:01,240 --> 00:34:05,120
Speaker 6: five years. The most exciting thing at the roadshow was

678
00:34:05,320 --> 00:34:09,600
Speaker 6: really the data licensing business. That's what at least everyone

679
00:34:09,760 --> 00:34:12,960
Speaker 6: thinks has a lot of potential. They're not going to

680
00:34:13,000 --> 00:34:16,839
Speaker 6: take digital ads share from Meta or from Google. It's

681
00:34:16,960 --> 00:34:19,879
Speaker 6: more about what can they do in this unique data

682
00:34:20,000 --> 00:34:25,440
Speaker 6: licensing business, which if you believe in the GENAI story,

683
00:34:25,760 --> 00:34:28,759
Speaker 6: then I think there will be a time when things

684
00:34:28,960 --> 00:34:32,440
Speaker 6: investors will start looking beyond the pitent shovel semi plays,

685
00:34:32,920 --> 00:34:36,399
Speaker 6: and that's where companies that have unique user generated data

686
00:34:37,120 --> 00:34:40,879
Speaker 6: they will get a lot of attention. And we think

687
00:34:41,360 --> 00:34:44,920
Speaker 6: Reddit is uniquely positioned, so it's it's sort of refreshing

688
00:34:45,000 --> 00:34:48,800
Speaker 6: to see an IPO that goes beyond the semi plays

689
00:34:48,920 --> 00:34:52,640
Speaker 6: and the hyperscaler the max seven that is getting all

690
00:34:52,680 --> 00:34:55,040
Speaker 6: the attention, and I think that's part of the reason

691
00:34:55,120 --> 00:34:57,640
Speaker 6: why you're seeing the IPO do so well well.

692
00:34:57,719 --> 00:34:59,040
Speaker 2: Bettie, I wanted to ask you about that.

693
00:34:59,080 --> 00:35:02,360
Speaker 4: I mean, I guess the no is that a generative

694
00:35:02,520 --> 00:35:06,400
Speaker 4: AI company will license access to all the posts on

695
00:35:06,600 --> 00:35:10,200
Speaker 4: Reddit to help AI sort of learn to speak like

696
00:35:10,280 --> 00:35:12,160
Speaker 4: a human. Although I got to say from some of

697
00:35:12,200 --> 00:35:14,279
Speaker 4: the posts I've read on Reddit, I don't know how

698
00:35:14,880 --> 00:35:16,600
Speaker 4: good of an idea that is with the Wall Street

699
00:35:16,640 --> 00:35:19,440
Speaker 4: bets type of posts. But how big of a potential

700
00:35:19,760 --> 00:35:23,040
Speaker 4: sort of source of revenue for that is that for Reddit?

701
00:35:23,120 --> 00:35:25,440
Speaker 4: I mean, there's a lot of hype around AI. I'm

702
00:35:25,440 --> 00:35:27,359
Speaker 4: wondering if you can help us sort of really cut

703
00:35:27,440 --> 00:35:29,400
Speaker 4: through that and figure out how big of a business

704
00:35:29,480 --> 00:35:30,360
Speaker 4: could that be for Reddit.

705
00:35:30,800 --> 00:35:34,040
Speaker 6: Yeah, so the Google license we know is about sixty

706
00:35:34,120 --> 00:35:37,680
Speaker 6: five million dollars per year. So if you think at

707
00:35:37,800 --> 00:35:40,560
Speaker 6: least there would be eight or ten large angrige model

708
00:35:40,680 --> 00:35:43,759
Speaker 6: companies that will license the data that adds to you know,

709
00:35:43,840 --> 00:35:47,080
Speaker 6: six hundred million, it's not exclusive at all. To at

710
00:35:47,200 --> 00:35:50,239
Speaker 6: least we haven't read anything to suggest it's exclusive. So

711
00:35:50,680 --> 00:35:52,759
Speaker 6: that just goes to show that there is a lot

712
00:35:52,800 --> 00:35:55,440
Speaker 6: of potential in data licensing. And remember this is like

713
00:35:55,560 --> 00:35:58,520
Speaker 6: a ninety five percent gross margin business. They don't have

714
00:35:58,680 --> 00:36:01,120
Speaker 6: to spend any money in terms of rolling that out

715
00:36:01,200 --> 00:36:05,000
Speaker 6: as a product. So that's one. And to your earlier

716
00:36:05,080 --> 00:36:07,400
Speaker 6: point about you know, the quality of the posts and

717
00:36:07,520 --> 00:36:11,000
Speaker 6: the data that's used for training, I think one of

718
00:36:11,080 --> 00:36:14,200
Speaker 6: the things with large anguid models is not only do

719
00:36:14,280 --> 00:36:17,799
Speaker 6: you need good quality data, you actually need bad data

720
00:36:17,920 --> 00:36:22,040
Speaker 6: to put the guardrails. So it's it's and it's something

721
00:36:22,120 --> 00:36:26,719
Speaker 6: that every LLLM company is doing is iterating to their models,

722
00:36:27,160 --> 00:36:30,880
Speaker 6: making sure they're putting the right guardrails and with redded

723
00:36:30,960 --> 00:36:34,920
Speaker 6: the unique advantages. This is human curated data. This is

724
00:36:35,200 --> 00:36:39,719
Speaker 6: actual user data, not generated by machines. And obviously with

725
00:36:39,880 --> 00:36:43,240
Speaker 6: the one billion posts they get every year, this keeps,

726
00:36:43,360 --> 00:36:46,880
Speaker 6: you know, getting updated. So as an LM company, you

727
00:36:47,080 --> 00:36:49,279
Speaker 6: want to make sure you have the most up to

728
00:36:49,440 --> 00:36:53,400
Speaker 6: date user generated data to be able to design the

729
00:36:53,560 --> 00:36:56,000
Speaker 6: chat pot functionality on top of it. Whether it's good

730
00:36:56,080 --> 00:36:59,040
Speaker 6: data or bad data, you actually need both, I would argue,

731
00:36:59,320 --> 00:37:02,040
Speaker 6: because that's how you put the guardrails in. And remember

732
00:37:02,120 --> 00:37:05,320
Speaker 6: Reddit is only texts, so they don't plan the images

733
00:37:05,480 --> 00:37:08,920
Speaker 6: or videos. That's more for you know, the YouTube and

734
00:37:09,040 --> 00:37:11,520
Speaker 6: the tiktoks of the world. So this is a text

735
00:37:11,640 --> 00:37:14,400
Speaker 6: focused LLLM play and I think that's where they are

736
00:37:14,480 --> 00:37:15,400
Speaker 6: uniquely positioned.

737
00:37:16,000 --> 00:37:18,480
Speaker 2: And just on that other IPO again, ASTERI labs a

738
00:37:18,760 --> 00:37:21,840
Speaker 2: lab up about nine percent today, third day in a

739
00:37:21,920 --> 00:37:25,200
Speaker 2: row that it's been higher, so that continues to be

740
00:37:25,320 --> 00:37:28,399
Speaker 2: a really good story. So two good IPO stories this week.

741
00:37:28,400 --> 00:37:30,919
Speaker 2: Hopefully that can get some of these equity capital market

742
00:37:31,040 --> 00:37:33,320
Speaker 2: bankers off their fannies and can have to do some

743
00:37:33,400 --> 00:37:36,520
Speaker 2: more deals. I mean, that's what I'm thinking. All right,

744
00:37:36,600 --> 00:37:40,200
Speaker 2: let's switch gears Apple. I guess the question for a

745
00:37:40,239 --> 00:37:44,200
Speaker 2: lot of people is how significant is this latest round

746
00:37:44,480 --> 00:37:48,600
Speaker 2: of regulatory scrutiny, various suits by various regular regulators around

747
00:37:48,600 --> 00:37:52,760
Speaker 2: the world. How material is this to the short, intermediate,

748
00:37:52,800 --> 00:37:56,760
Speaker 2: long term investment story for Apple? Is this a nineteen

749
00:37:56,880 --> 00:37:59,880
Speaker 2: nineties Microsoft overhang which is not good for the stock

750
00:38:00,520 --> 00:38:03,560
Speaker 2: or is it something that the stock can power through.

751
00:38:04,000 --> 00:38:08,200
Speaker 6: I mean, judging by the stock reaction it did, you know,

752
00:38:08,560 --> 00:38:12,120
Speaker 6: suggest that this doesn't vote very well for Apple in

753
00:38:12,200 --> 00:38:14,680
Speaker 6: the near term, given all the attention they're getting, both

754
00:38:14,719 --> 00:38:17,800
Speaker 6: in the EU and now in the US. And I

755
00:38:17,880 --> 00:38:20,279
Speaker 6: think one of the things that happens when you come

756
00:38:20,360 --> 00:38:23,839
Speaker 6: into this kind of scrutiny is you can't make any

757
00:38:23,960 --> 00:38:27,000
Speaker 6: product changes. You can't do even tuck in deals. I mean,

758
00:38:27,239 --> 00:38:32,160
Speaker 6: I can't imagine Apple or Google buying any company. Microsoft

759
00:38:32,280 --> 00:38:35,320
Speaker 6: sort of is circumventing that by breaking a company apart

760
00:38:35,400 --> 00:38:37,680
Speaker 6: and you know, poaching all the employees as they did

761
00:38:37,760 --> 00:38:40,839
Speaker 6: with Inflection. But it just goes to show that once

762
00:38:40,920 --> 00:38:44,040
Speaker 6: you are in the cross heres like this it's very

763
00:38:44,320 --> 00:38:48,480
Speaker 6: hard to you know, roll out a new product without

764
00:38:48,560 --> 00:38:52,640
Speaker 6: getting more attention. And in this case, the monopoly argument

765
00:38:52,760 --> 00:38:55,120
Speaker 6: is really geared towards their app store.

766
00:38:55,320 --> 00:38:58,040
Speaker 2: So we all know that Epic.

767
00:38:57,800 --> 00:39:00,919
Speaker 6: Systems trial has been going on for you know, three

768
00:39:01,040 --> 00:39:04,360
Speaker 6: years almost, and even though Apple have one verdict in

769
00:39:04,440 --> 00:39:07,680
Speaker 6: their favor, it looks more and more that Apple has

770
00:39:07,800 --> 00:39:10,520
Speaker 6: to make changes to open up the platform, whether it's

771
00:39:10,600 --> 00:39:14,520
Speaker 6: third party billing or other type of changes, and to me,

772
00:39:14,760 --> 00:39:18,000
Speaker 6: that doesn't vote very well for the services line. Ultimately,

773
00:39:18,280 --> 00:39:20,920
Speaker 6: that is the high margin business, and if they have

774
00:39:21,040 --> 00:39:23,640
Speaker 6: to lower their take rates or open up the platform

775
00:39:23,680 --> 00:39:26,600
Speaker 6: to third party billings, that's going to hurt their high

776
00:39:26,680 --> 00:39:28,080
Speaker 6: margin services revenue.

777
00:39:28,640 --> 00:39:30,360
Speaker 2: What do you think a resolution would look like.

778
00:39:30,480 --> 00:39:33,279
Speaker 4: I mean, could we imagine them actually spinning off the

779
00:39:33,320 --> 00:39:35,080
Speaker 4: app store as a separate business.

780
00:39:35,600 --> 00:39:38,600
Speaker 6: Very unlikely. I mean, it's so hard to decouple app

781
00:39:38,680 --> 00:39:42,200
Speaker 6: store from how Apple's operating system is set up and

782
00:39:42,520 --> 00:39:46,920
Speaker 6: how you know, all the devices can interoperate, whether it's

783
00:39:47,000 --> 00:39:50,720
Speaker 6: your iPhone, your iPad, or MacBook. So I can't imagine

784
00:39:50,760 --> 00:39:53,640
Speaker 6: them decoupling their app store. At the same time, what

785
00:39:53,760 --> 00:39:58,160
Speaker 6: they have to do to convince their regulators is basically

786
00:39:58,239 --> 00:40:00,560
Speaker 6: a level playing field when it comes to heart party

787
00:40:00,600 --> 00:40:02,840
Speaker 6: app store. So right now, there are a number of

788
00:40:02,960 --> 00:40:08,759
Speaker 6: companies that sign up outside their apps, like namely Netflix Spotify.

789
00:40:09,200 --> 00:40:12,560
Speaker 6: Because Apple takes a thirty percent cut for every subscription

790
00:40:12,960 --> 00:40:15,920
Speaker 6: that goes through their app store. So that's where you

791
00:40:16,000 --> 00:40:19,319
Speaker 6: know they have to show to the regulators that even

792
00:40:19,400 --> 00:40:21,920
Speaker 6: if companies want to deploy their own app store with

793
00:40:22,000 --> 00:40:25,080
Speaker 6: their own building systems, Apple is open to that. And

794
00:40:25,960 --> 00:40:28,160
Speaker 6: you can move out of the Apple ecosystem to go

795
00:40:28,280 --> 00:40:31,640
Speaker 6: to Android or any other operating system. So all these

796
00:40:31,719 --> 00:40:33,920
Speaker 6: changes are what I think will happen over time.

797
00:40:34,080 --> 00:40:36,080
Speaker 2: And and you've seen great stuff. As always, he never

798
00:40:36,120 --> 00:40:38,480
Speaker 2: mails it in. He's in our Bloomberg in directive Broker Studios.

799
00:40:38,480 --> 00:40:41,880
Speaker 2: He's the senior technology channels for a Bloomberg Intelligence. Appreciate

800
00:40:41,880 --> 00:40:42,880
Speaker 2: getting some of his thoughts Here.

801
00:40:44,400 --> 00:40:48,239
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

802
00:40:48,360 --> 00:40:51,880
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

803
00:40:51,920 --> 00:40:54,680
Speaker 1: Auto with the Bloomberg Business app. You can also listen

804
00:40:54,800 --> 00:40:57,879
Speaker 1: live on Amazon Alexa from our flagship New York station,

805
00:40:58,280 --> 00:41:01,040
Speaker 1: just say Alexa playing bloom eleven thirty.

806
00:41:02,280 --> 00:41:04,120
Speaker 2: All right, there, you have a crossing the Bloomberg terminal.

807
00:41:04,280 --> 00:41:07,719
Speaker 2: House passes bill to fully fund the government and they're

808
00:41:07,719 --> 00:41:09,920
Speaker 2: sending it on to the Senate to get more on this.

809
00:41:10,040 --> 00:41:13,719
Speaker 2: Re Joined by Jenny Sheene Zeno, Professor, a Bloomberg Politics

810
00:41:13,800 --> 00:41:18,759
Speaker 2: contributor and author of American Democracy in Crisis. Jenny thinks,

811
00:41:18,800 --> 00:41:22,360
Speaker 2: so much for joining us here. I think, do we

812
00:41:22,440 --> 00:41:24,319
Speaker 2: have her yet or are we still kind of working? Okay,

813
00:41:24,360 --> 00:41:26,080
Speaker 2: we got it awesome, So what do we make of this?

814
00:41:26,200 --> 00:41:29,480
Speaker 2: I mean, thank goodness they passed this here? But anything

815
00:41:29,560 --> 00:41:31,759
Speaker 2: unusual going on here in DC? Or is this kind

816
00:41:31,800 --> 00:41:33,440
Speaker 2: of more of the same let's get it done at

817
00:41:33,440 --> 00:41:34,000
Speaker 2: the last minute.

818
00:41:35,560 --> 00:41:37,640
Speaker 8: It is more of the same. Although I have to

819
00:41:37,760 --> 00:41:40,359
Speaker 8: say this is highly unusual. We are, you know, six

820
00:41:40,560 --> 00:41:43,800
Speaker 8: months late on this bill. But since this is a

821
00:41:43,880 --> 00:41:45,920
Speaker 8: positive day, I'm going to try to be positive. They

822
00:41:46,000 --> 00:41:49,880
Speaker 8: did pass at one point two trillion dollar government funding

823
00:41:49,960 --> 00:41:52,760
Speaker 8: bill and they now are moving it to the Senate.

824
00:41:52,920 --> 00:41:55,560
Speaker 8: And of course, you know, only half of the crisis

825
00:41:55,680 --> 00:41:58,920
Speaker 8: is averted so far, because of course the Senate is

826
00:41:59,239 --> 00:42:01,720
Speaker 8: you know, they're effected to take it up pretty quickly.

827
00:42:02,160 --> 00:42:05,200
Speaker 8: But as the Senate works, any one senator can slow

828
00:42:05,320 --> 00:42:07,160
Speaker 8: this thing down. And we know there are about a

829
00:42:07,320 --> 00:42:10,480
Speaker 8: dozen amendments on the table. So you know, on the

830
00:42:10,560 --> 00:42:13,320
Speaker 8: plus side, the senators all want to leave town so

831
00:42:13,440 --> 00:42:15,319
Speaker 8: they can get their two week recess, so that may

832
00:42:15,400 --> 00:42:18,000
Speaker 8: help them push it to the finish line quicker. But

833
00:42:18,480 --> 00:42:20,600
Speaker 8: you know, we still aren't over the hunt yet, but

834
00:42:20,719 --> 00:42:22,400
Speaker 8: we are on our way, so to speak.

835
00:42:23,080 --> 00:42:26,080
Speaker 4: You know, Jen, one of the new pieces of news

836
00:42:26,160 --> 00:42:28,919
Speaker 4: that's emerged over the last few minutes is punch Bowl

837
00:42:29,040 --> 00:42:34,400
Speaker 4: is reporting that Representative Marjorie Taylor Green has filed a

838
00:42:34,520 --> 00:42:40,319
Speaker 4: motion to vacate the speakership. Does that have any risk

839
00:42:40,440 --> 00:42:42,279
Speaker 4: to this bill? I mean, I would guess not since

840
00:42:42,320 --> 00:42:44,920
Speaker 4: it's passed. But how does that fit into all of this?

841
00:42:46,280 --> 00:42:49,040
Speaker 8: Yeah? I mean we always expected this would happen, and

842
00:42:49,200 --> 00:42:52,000
Speaker 8: this has been the way that the conservatives in the

843
00:42:52,080 --> 00:42:55,759
Speaker 8: House have operated. You know, what's quite startling about this

844
00:42:56,080 --> 00:42:59,680
Speaker 8: is that this bill is probably more you know, a

845
00:42:59,719 --> 00:43:03,959
Speaker 8: little a little bit more liberal or progressive or pro democratic,

846
00:43:04,040 --> 00:43:07,439
Speaker 8: if you will, pro White House then the bill which

847
00:43:07,600 --> 00:43:11,000
Speaker 8: caused them to get rid of Kevin McCarthy. And so

848
00:43:11,440 --> 00:43:13,719
Speaker 8: you know, it is not a surprise that one or

849
00:43:13,800 --> 00:43:16,600
Speaker 8: more member of the Freedom Caucus House Freedom Caucus in

850
00:43:16,680 --> 00:43:19,600
Speaker 8: this case, Marjorie Tayler Green has filed, but you know,

851
00:43:19,760 --> 00:43:22,759
Speaker 8: at this point it won't impact this particular bill. And

852
00:43:22,960 --> 00:43:26,040
Speaker 8: Mike Johnson always knew that this was going to be

853
00:43:26,239 --> 00:43:29,960
Speaker 8: the result of him working across the aisle and of

854
00:43:30,040 --> 00:43:32,520
Speaker 8: course waving the seventy two hour rule. There was a

855
00:43:32,600 --> 00:43:35,840
Speaker 8: lot that happened in the last few days that conservatives

856
00:43:35,960 --> 00:43:39,280
Speaker 8: and Republicans who are you know, not Freedom Caucus members

857
00:43:39,600 --> 00:43:42,520
Speaker 8: didn't want, but you know, to avert a government shutdown,

858
00:43:42,880 --> 00:43:44,000
Speaker 8: this is what they had to do.

859
00:43:44,280 --> 00:43:46,279
Speaker 2: Okay, So for us amateurs who don't really know how

860
00:43:46,320 --> 00:43:48,880
Speaker 2: this plays out, is this from Marjorie Tayler Green. Is

861
00:43:48,880 --> 00:43:51,600
Speaker 2: this something that mister Johnson needs to be concerned about

862
00:43:51,719 --> 00:43:51,920
Speaker 2: or no.

863
00:43:53,280 --> 00:43:55,319
Speaker 8: You know, I don't think so at this point, if

864
00:43:55,440 --> 00:43:59,080
Speaker 8: only because who would they replace him with? So you

865
00:43:59,200 --> 00:44:02,000
Speaker 8: know this nobody wants to be Speaker of the House

866
00:44:02,040 --> 00:44:04,799
Speaker 8: at this point, So yes, it's you know, it's one

867
00:44:04,840 --> 00:44:07,640
Speaker 8: of those jobs nobody wants. So yes, you know he

868
00:44:07,760 --> 00:44:10,600
Speaker 8: has to be concerned that you know a member is

869
00:44:10,760 --> 00:44:13,640
Speaker 8: doing this, but not surprised. But the reality here is

870
00:44:13,760 --> 00:44:18,600
Speaker 8: this rule needs to change. This rule that one disgruntled member,

871
00:44:18,680 --> 00:44:21,000
Speaker 8: whether it's Matt Gates in the case of Kevin McCarthy

872
00:44:21,080 --> 00:44:23,560
Speaker 8: or Marjorie Taylor Green now or anybody else in the

873
00:44:23,640 --> 00:44:28,000
Speaker 8: future can hold up the entire House caucus in terms

874
00:44:28,000 --> 00:44:31,160
Speaker 8: of the Republican Caucus and quite frankly, in some cases,

875
00:44:31,360 --> 00:44:33,680
Speaker 8: the government. So I don't think there's much of an

876
00:44:33,680 --> 00:44:36,440
Speaker 8: appetite for this at this point. We are, you know,

877
00:44:36,800 --> 00:44:39,960
Speaker 8: so close in the midst of an election period. All

878
00:44:40,120 --> 00:44:42,760
Speaker 8: these House members have to be back in their districts

879
00:44:43,160 --> 00:44:45,719
Speaker 8: and they have to be running for reelection. So I

880
00:44:45,800 --> 00:44:49,239
Speaker 8: don't think there's an appetite. But I think next term

881
00:44:49,640 --> 00:44:52,239
Speaker 8: they really do need to change this rule that one

882
00:44:52,320 --> 00:44:55,160
Speaker 8: member can do this, because it has really made this

883
00:44:56,040 --> 00:44:57,799
Speaker 8: caucus ungovernable at this point.

884
00:44:58,960 --> 00:45:00,879
Speaker 4: And you don't you mentioned that this is a more

885
00:45:01,040 --> 00:45:05,360
Speaker 4: of a progressive leaning bill than what cost Kevin McCarthy

886
00:45:05,440 --> 00:45:08,840
Speaker 4: the speakership. What did did the Republicans give up a

887
00:45:08,960 --> 00:45:10,960
Speaker 4: lot of priorities in this bill?

888
00:45:12,440 --> 00:45:15,560
Speaker 8: You know, they did a lot of that was procedural.

889
00:45:15,800 --> 00:45:18,840
Speaker 8: For instance, having an omnibus or in this case, a

890
00:45:18,960 --> 00:45:22,880
Speaker 8: minibus bill at all was something they didn't want. Waving

891
00:45:23,000 --> 00:45:26,560
Speaker 8: the seventy two hours to review the bill something they

892
00:45:26,640 --> 00:45:30,879
Speaker 8: didn't want. Allowing people to put all of these amendments

893
00:45:31,040 --> 00:45:34,239
Speaker 8: in they didn't want, and we have seen that, so

894
00:45:34,680 --> 00:45:37,239
Speaker 8: there's a lot here, of course, you know, just looking

895
00:45:37,280 --> 00:45:40,719
Speaker 8: at one example, on something as important as immigration and

896
00:45:40,840 --> 00:45:45,320
Speaker 8: homeland security, they wanted HR two, they didn't get it.

897
00:45:45,600 --> 00:45:49,560
Speaker 8: This bill, you know, is, you know, has emboldened to

898
00:45:49,640 --> 00:45:53,880
Speaker 8: a certain extent our ability for border patrol agents and

899
00:45:53,960 --> 00:45:56,560
Speaker 8: others at the border, but it doesn't go nearly as

900
00:45:56,640 --> 00:45:59,479
Speaker 8: par in terms of securing the border as the Republicans wanted.

901
00:45:59,560 --> 00:46:02,319
Speaker 8: So they did get some up, but of course negotiation

902
00:46:02,520 --> 00:46:04,080
Speaker 8: is what you gotta do if you're in a Vice

903
00:46:04,200 --> 00:46:05,080
Speaker 8: vertise in Washington.

904
00:46:05,520 --> 00:46:07,120
Speaker 2: All right, Gene, thank you so much for joining us.

905
00:46:07,160 --> 00:46:10,560
Speaker 2: Genny Sheene Zeno, Professor, Bloomberg Politics, contributor and author of

906
00:46:10,800 --> 00:46:13,040
Speaker 2: American Democracy in Crisis.

907
00:46:13,440 --> 00:46:17,960
Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify,

908
00:46:18,160 --> 00:46:21,319
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909
00:46:21,400 --> 00:46:24,560
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910
00:46:24,880 --> 00:46:28,239
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911
00:46:28,400 --> 00:46:31,360
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912
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