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Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you

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Speaker 1: along with my co host Lisa Brahmawitz. Each day we

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Speaker 1: bring you the most noteworthy and useful interviews for you

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Speaker 1: and your money, whether at the grocery store or the

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Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast

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Speaker 1: or wherever you listen to podcasts, as well as at

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Speaker 1: Bloomberg dot com. We'll trade tensions between the US and

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Speaker 1: some of its leading trading partners continued to escalate. First

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Speaker 1: it was China, uh, then Mexico and now India. To

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Speaker 1: get a sense of where we go next, we welcome

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Speaker 1: our next guest, end Nordvig, founder in CEO of Exante

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Speaker 1: Data LLC, also a chief strategist there at Exante based

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Speaker 1: in New York City, YenS, Thanks so much for joining us. Um.

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Speaker 1: It just seems like these concentric circles of ever growing

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Speaker 1: trade tensions continue to widen. What is your sense of

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Speaker 1: how this will play out for US economic growth? Yeah,

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Speaker 1: I have to say it's rudy Stantin to be a

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Speaker 1: so a big compounding effect in the sense that, okay,

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Speaker 1: maybe the US economy could sort of take one trade

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Speaker 1: war but when you start to have multiple trade wars

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Speaker 1: at the same time, it becomes much harder to handle.

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Speaker 1: So obviously, having a small amount of tariffs on as

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Speaker 1: a small portion of trade is one thing, and we

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Speaker 1: had that initially with the steel terroriffs. But we're starting

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Speaker 1: to look at a situation where we could have tariffs

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Speaker 1: on all imports from China. And the process that we're

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Speaker 1: in now with Mexico starts from a low level of terrorists,

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Speaker 1: but it is potentially on all goods ramping up to

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Speaker 1: so if this goes the wrong way, we're really looking

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Speaker 1: at a situation where you have tariffs on a very,

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Speaker 1: very big number of imports. And most of the research

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Speaker 1: has coming out on how this feed through into the

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Speaker 1: economy suggests that US consumers pay really the bulk of

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Speaker 1: the bill, and that's how you you get a really

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Speaker 1: big negative impact on the US economy. What's interesting to

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Speaker 1: me and is where the havens have been. I mean,

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Speaker 1: we've seen people flood into the dollar, the broad Dollar

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Speaker 1: index gaining about a half a percentage point last month. Meanwhile,

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Speaker 1: we're also seeing people flood into US treasury, so US

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Speaker 1: the sort of biggest beneficiary. UH, so far do you

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Speaker 1: think that's going to continue. Yes. I think when you

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Speaker 1: had the US China tension really driving things, it made

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Speaker 1: some sense that there was a sort of positive dollar

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Speaker 1: effect for a period of time, and that was linked

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Speaker 1: to the fact that, Okay, China is a big part

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Speaker 1: of the global economy, so the global growth situation with

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Speaker 1: the terra rate and also the Chinese currency is such

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Speaker 1: a big drive of global currency markets that if the

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Speaker 1: Chinese currency was weakening, it was going to essentially push

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Speaker 1: a lot of other currencies down with it and sort

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Speaker 1: of implicitly generate dollar strength. But I think one once

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Speaker 1: you escalate the trade war to include Mexico, it becomes

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Speaker 1: different because number one day, the hit to the U

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Speaker 1: s economy is disproportionate larger, in part because Mexico has

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Speaker 1: more imports from the US that they can retaliate against,

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Speaker 1: but also just because those two effects start to stack

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Speaker 1: up to on top of each other and and the

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Speaker 1: FED really is forced to respond more forcefully. And that's

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Speaker 1: what you're started to see obviously in FED pricing having

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Speaker 1: moved very aggressively. So now not only are we pricing

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Speaker 1: a FED cut by September, but we're really starting to

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Speaker 1: pry a high probability that the Fed will be forced

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Speaker 1: to move sooner than that. It's a pretty extraordinarily quick shift.

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Speaker 1: And the rate moves are now such that that the

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Speaker 1: dollar is starting to take a hit, And I think,

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Speaker 1: right this so and I think the problem is that

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Speaker 1: we've we've come from a period where the dollar has

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Speaker 1: been strong for about a year, So momentum starts to turn,

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Speaker 1: there could be a lot of technical adjust ones that

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Speaker 1: that can really put the dollar on quite a bit

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Speaker 1: of pressure. And today might be a really important day

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Speaker 1: because the euros down to move. Gold is having a

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Speaker 1: very big move today, which is typically a reflection of

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Speaker 1: the broader dollar direction. So it's a quite important day

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Speaker 1: for the currency market today, I would argue. So, yeah,

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Speaker 1: staying with the currency markets, the when we think about China,

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Speaker 1: in particular the trade tensions there to what extent I mean,

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Speaker 1: historically the Japanese yen has been perceived as a safe haven.

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Speaker 1: Do you still consider that to be the case? Yes,

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Speaker 1: I think the yen has has clearly participated in this

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Speaker 1: UH dynamic over the last few sessions where the dollar

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Speaker 1: is trading on the back foot, and that has generated

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Speaker 1: a decent size move. Thow on dollar yen. It's not

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Speaker 1: like a big break from the range we've seen the

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Speaker 1: last couple of years. We've sort of been in a

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Speaker 1: in a one oh five one of fifteen range, which

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Speaker 1: is relatively now a range over the last two three years.

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Speaker 1: So the big question is whether we're gonna really break

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Speaker 1: out of that range. And I think there's two big

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Speaker 1: questions that The one question is, okay, a Japanese investor

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Speaker 1: is going to start to hitch the US assets Differently

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Speaker 1: if we're looking at potentially a big slow adown in

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Speaker 1: US growth and the fail actually cutting rates, So that's

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Speaker 1: something that that certainly will come into play if if

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Speaker 1: the FED really delivers and they carry involved in in

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Speaker 1: in this trade and therefore the cost of hedging comes down.

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Speaker 1: And then the other thing that that's really important to

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Speaker 1: the end is Japanese companies have been on a bit

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Speaker 1: of a buying spree in terms of buying up other

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Speaker 1: companies around the world m and a activity that could

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Speaker 1: be in question if we have a real sort of

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Speaker 1: tense global environment, and that would also see the end

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Speaker 1: strength and if that outflow stops. So I think there's

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Speaker 1: a chance we can break out of this range. The

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Speaker 1: big thing to watch in the short term is is

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Speaker 1: this theme of escalation sticking, Like are we going to

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Speaker 1: have the escalation on June ten with the tariffs actually

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Speaker 1: coming into effect in relation to Mexico, and then are

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Speaker 1: we going to have some kind of positive headlines at

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Speaker 1: the G twenty meeting when when it takes place in

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Speaker 1: Japan at the end of the month, or are we

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Speaker 1: just going to literally move to the full blown trade

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Speaker 1: war versus China. I think those are the really key

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Speaker 1: things to watch there. How much for the dollar weaken

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Speaker 1: in your view? So I think if if the FED

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Speaker 1: is really delivering cuts here in coming months, and we

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Speaker 1: have an environment where where perhaps the Chinese actually hold

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Speaker 1: their currency, so that's a key one. But if the

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Speaker 1: Chinese don't allow their currency to move, then I think

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Speaker 1: we're in an environment where the dollar can weaken meaningfully.

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Speaker 1: But if the Chinese allow their currency to break seven,

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Speaker 1: so a depreciation beyond what they've allowed in recent years,

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Speaker 1: then you have a sort of tricky situation with as

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Speaker 1: dollar bearish impulse from the FED, but actually accounts of

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Speaker 1: force from the direction of the Chinese currency. So it's

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Speaker 1: absolutely crucial whether the Chinese are going to hold the

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Speaker 1: currency here as they've done in recent weeks, or whether

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Speaker 1: they're going to allow a break of seven if we

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Speaker 1: move to a full blown trade war. So yeah, it's

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Speaker 1: just given the uncertainty surrounding global trade, are there pockets

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Speaker 1: of relative safety that you're looking at in terms of currencies? Um, well,

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Speaker 1: I think I think one thing that's been very interesting

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Speaker 1: over the last week or so that I actually think

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Speaker 1: can continue is that we're now seeing that emerging market

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Speaker 1: currencies that had a really bad year over the last

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Speaker 1: year or so can actually start to perform better. So, um,

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Speaker 1: it's it's a situation where we have a sort of

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Speaker 1: bearish positioning in e M space that is now perhaps

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Speaker 1: too bare if we have a much low environment for

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Speaker 1: global yields, So I think EM currencies can start to

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Speaker 1: ironically do better, especially relative to other risk asses. So

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Speaker 1: for example, if to compare with the S and P,

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Speaker 1: I think currencies can do better. Nord Vig, thank you

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Speaker 1: so much for being with us. A really interesting call

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Speaker 1: there about how emerging market currencies will do well as

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Speaker 1: yields continue to go lower here in the United States.

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Speaker 1: YenS nord vigas founder and chief executive officer of Exante Data,

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Speaker 1: also chief strategist at Elexante Advisors. There's been a market

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Speaker 1: shift in sentiment from oh, China and the US will

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Speaker 1: come to some sort of deal to what will it

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Speaker 1: protracted trade war look like? Joining us now to think

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Speaker 1: about that is Carl Weinberg, Founder in chief international economist

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Speaker 1: at High Frequency Economics. Carl, let's start and fast forward

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Speaker 1: making some assumptions that trade wars rage on, the market

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Speaker 1: keeps declining, and an economic downturn ensues. What does that

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Speaker 1: economic downturn look like? Well, good morning, Lisa Um. You know,

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Speaker 1: the economic downturn that we're looking at worldwide right now

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Speaker 1: is a little bit broader than trade, but than the

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Speaker 1: trade wars, but it all has its roots in trade,

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Speaker 1: which is now flatter declining depending on the metric you

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Speaker 1: look at worldwide, and you know, companies that export are

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Speaker 1: the ones that are affected. First. Tariffs affect consumers make

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Speaker 1: them a little bit less reluctant to buy stuff because

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Speaker 1: they have less disposable income, is they're they're spending power

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Speaker 1: goes down. But the first reel hit is probably going

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Speaker 1: to be on the side of corporations that are going

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Speaker 1: to face supply chain issues. They're going to face cost

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Speaker 1: issues and then that will lead to financial market implications. So,

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Speaker 1: Dr Winberg, we got some disappointing US manufacturing data out today,

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Speaker 1: give us a sense of to the extent that these

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Speaker 1: trade skirmishes uncertainties continue, maybe even expand. If you think

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Speaker 1: about you know, India as well now being in the crosshairs,

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Speaker 1: how do you think the manufacturing community around the world

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Speaker 1: will respond, Good morning, Paul. Yes, everybody has got to

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Speaker 1: be alarmed by this because the expansion of the U. S.

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Speaker 1: Administration's tariff i'll call a tariff aggression to borrow language

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Speaker 1: from the Chinese UM basically undermines the confidence that companies

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Speaker 1: of all kinds all around the world face and making

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Speaker 1: business plans and decisions. They don't really know the cost

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Speaker 1: structure that they're going to face, they don't really know

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Speaker 1: the trade and the tariff regime, and as the FedEx

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Speaker 1: example indicates, they don't even know if they're going to

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Speaker 1: be constrained in their business. Enterprises and companies that resist

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Speaker 1: the tariff advances by the United States, the tariff increases.

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Speaker 1: So it's a general role of uncertainty, it's a role

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Speaker 1: of profit compression, and it's certainly in these uncertain times,

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Speaker 1: it's one that causes companies to cut back on investment

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Speaker 1: until the all clears, and of course that's always bad

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Speaker 1: for the world economy. You were saying earlier that there

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Speaker 1: will be financial market implications. Basically, the market's going to

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Speaker 1: sell off. Risk assets are going to sell off in

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Speaker 1: this scenario. How much is this going to be a crash? Like, yeah, Well,

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Speaker 1: you know, I was listening to Bloomberg Radio as I

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Speaker 1: was driving into the office this morning and heard you

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Speaker 1: guys talking about individual companies and the impacts that this

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Speaker 1: is having on their earnings forecasts, on their profit forecast,

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Speaker 1: on their general rural view of the world in there,

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Speaker 1: and their guidance to markets. So this is really how

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Speaker 1: it begins, you know, crashes. You know, I'm not in

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Speaker 1: the business of predicting crashes. You know, I don't think

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Speaker 1: we have to have a stock market crash. The stock

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Speaker 1: market is certainly high enough that some kind of correction

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Speaker 1: is probably coming anyway. This just increases the odds of

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Speaker 1: that happening. But a crash, you know that that's not

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Speaker 1: my domain to predict it. I don't have anything on

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Speaker 1: my horizon that will cause a crash. Dr Weinberg, I

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Speaker 1: think I have a straightforward question here. Who pays for tariffs? Oh,

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Speaker 1: that's a really straightforward question, very refreshing also because the

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Speaker 1: Trump administration has it all wrong when they raise tariffs

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Speaker 1: on things that come from China. You pay the tariffs, right,

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Speaker 1: not the Chinese. Now, the Chinese may lose themselves to

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Speaker 1: the United States, but since the exports are growing between

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Speaker 1: oh say, five and ten percent per year anyhow, they're

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Speaker 1: probably going to sell whatever they don't sell to you

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Speaker 1: to somebody else and um. In terms of the counterfeariling tariffs,

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Speaker 1: the Chinese have been very careful to tariff things for

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Speaker 1: which they consumers at home have a lot of substitutes,

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Speaker 1: like soybeans. Think by soybeans from any number of countries

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Speaker 1: in the world. They just buy less from the U. S. Farmer,

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Speaker 1: and the U. S. Farmer is the one who pays

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Speaker 1: the tariff. So at the end of the day, when

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Speaker 1: you go out to buy your iPad and you can't

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Speaker 1: buy it from any source other than China, you end

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Speaker 1: up paying the tariff. Your income to spend on other

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Speaker 1: things is reduced, and you're the one who then has

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Speaker 1: the vote to determine whether or not this regime is

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Speaker 1: going to continue. So one sort of theory, and President

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Speaker 1: Trump has put this out, is that eventually companies will

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Speaker 1: rejigger their supply chains so they don't rely on countries

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Speaker 1: that are the most tariff And this is sort of

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Speaker 1: the point of putting on these levies. I guess my

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Speaker 1: question is, you know, how do you respond to people

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Speaker 1: who say, look, this is temporary in order to get

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Speaker 1: the trading situation more fair, and then the US will

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Speaker 1: prosper as a result of it. A Lisa, you sound

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Speaker 1: like a Wall Street economist. You know, at the end

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Speaker 1: of the day, everything's going to be all right. But

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Speaker 1: until we get there, all right, we have to survive,

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Speaker 1: al right. A company who supply chain is interrupted today

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Speaker 1: has to live until tomorrow to be able to take

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Speaker 1: advantages of whatever is coming better and tomorrow. We economists

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Speaker 1: are always guilty of ignoring transition costs and transition obstacles

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Speaker 1: as we talk about one new situation being better than another.

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Speaker 1: You know, maybe we will or maybe we won't be

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Speaker 1: better off tomorrow. We can debate that forever. But for

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Speaker 1: a car company that has to source parts from a

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Speaker 1: country that can no longer trade with or at a

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Speaker 1: twenty higher costs. That's a problem for survival today. That's

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Speaker 1: a problem for pricing today, for profits today, for making

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Speaker 1: payroll today, for hiring and firing workers today. And that's

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Speaker 1: really what we're talking about in the financial markets, isn't it.

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Speaker 1: It's today? So Dr Weinberg, are the particular industries that

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Speaker 1: you think are most at risk here? In? It's just

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Speaker 1: a rising and trade tension environment. Um is there anything

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Speaker 1: particularly that I think investor should be looking out for. Well,

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Speaker 1: you know, I can hide behind my role as a

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Speaker 1: macro economist and say that I don't look at industries,

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Speaker 1: but as a macro economist, what I can say is

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Speaker 1: that pretty much every industry, whether it's manufacturing or services,

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Speaker 1: today has gone global. Pretty much all industries, pretty much

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Speaker 1: all companies have some kind of linkage to the rest

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Speaker 1: of the world, and therefore every company is vulnerable to

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Speaker 1: um uh these uh this tariff regime and um I

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Speaker 1: can't even think of any exceptions of a pure domestic

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Speaker 1: company that purely sources things domestically. I mean, even if

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Speaker 1: you just use a laptop computer to do your books.

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Speaker 1: You know, Joe the plumber is vulnerable to higher tariffs

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Speaker 1: on that computer that he does his books on because

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Speaker 1: of the tariff things. So we're all subject to this

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Speaker 1: in one way or another, all industries, al sectors, all people,

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Speaker 1: no place to hide. One thing that I find interesting

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Speaker 1: is the question of who's going to suffer more, the

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Speaker 1: US or emerging markets, including China. We have PIMCO coming

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Speaker 1: out and saying investors are underestimating the value in emerging

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Speaker 1: market stocks. Do you think that right now developing markets

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Speaker 1: are going to be less hard hit than the United States? Well,

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Speaker 1: you know, the developing markets. I mean, let's look at China. Alright.

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Speaker 1: China makes a wide variety of stuff, and the United

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Speaker 1: States is only about fift of its export market, and

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Speaker 1: it's not going to lose all its exports of the

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Speaker 1: United States. For sure, Americans will pay more for the

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Speaker 1: stuff that they can't get from somewhere else. However, all right,

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Speaker 1: a lot of the stuff that they won't sell here

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Speaker 1: in the United States. They've got eight five percent of

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Speaker 1: the world to sell their stuff too. Now, China is

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Speaker 1: an extraordinary case because of the diversity of its products.

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Speaker 1: But whether you're selling you know, broad based commodities or

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Speaker 1: high end manufactured goods. If you're any country in the world,

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Speaker 1: you can sell it probably to somebody else if you

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Speaker 1: can't sell it in the United States. And that's really

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Speaker 1: one of the flaws in the strategy. Unilateral attacks on

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Speaker 1: countries like this when you're not the biggest dominant player

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Speaker 1: in the world anymore, that is a strategic error in

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Speaker 1: my opinion, Dr Carl Weinberg, thank you so much. Dr

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Speaker 1: Weinberger's that found their in chief international economists at High

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Speaker 1: Frequency Economics. I think a couple of takeaways there are.

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Speaker 1: Number one, trade wars are bad um and number two,

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Speaker 1: tariffs ultimately are paid by the consumer, neither of which

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Speaker 1: is good for a global economic growth. Let's talk clean

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Speaker 1: energy for the home. In the US, buildings account for

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Speaker 1: nearly of all carbon emissions, and one company has a

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Speaker 1: plan to curb those emissions. Kathy Hannon is the CEO

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Speaker 1: and co founder of Dandelion Energy. Dandelion Energy is a

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Speaker 1: spin out company of Google x and as the nation's

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Speaker 1: leading home geothermal company. Kathy, thanks so much for joining us.

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Speaker 1: So just tell us a little bit about dandelions technology

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Speaker 1: and how it kind of works. I'd be happy to so.

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Speaker 1: Dandelion installs residential geothermal systems. These are systems heating and

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Speaker 1: cooling systems that get placed in the home, usually where

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Speaker 1: the furnace used to be, and they have what are

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Speaker 1: called ground loops. So these are pipes that we install

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Speaker 1: in the ground and they let that heat pump gather

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Speaker 1: heat from the ground to heat the home in the

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Speaker 1: winter and then push heat into the ground to cool

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Speaker 1: the home in the summer. So they're very inexpensive to operate,

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Speaker 1: very quiet, and a lot of homeowners have started switching

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Speaker 1: from there from their furnaces. Can you give us a

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Speaker 1: sense of just how big adoption has been so far? Absolutely? So.

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Speaker 1: The company actually started selling our product UM a little

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Speaker 1: bit less than a year ago, and we already have

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Speaker 1: hundreds of customers in New York, which is the market

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Speaker 1: we serve today. So if I were to do this

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Speaker 1: to my home, what's my out of pocket costs and

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Speaker 1: what are my hopeful savings? Absolutely well, UM out of

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Speaker 1: pocket costs tend to be around eighteen to twenty thousand dollars,

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Speaker 1: which sounds like a lot, but when you consider that

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Speaker 1: UM many homeowners are spending three thousand, four thousand dollars

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Speaker 1: a year on fuel, oil or propane um. That payback

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Speaker 1: period tends to be very very fast, and we offer financing,

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Speaker 1: so actually most of our homeowners choose to pay nothing

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Speaker 1: up front, so zero cost, and then UM they pay

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Speaker 1: off the system over time and the repayment amount each

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Speaker 1: month is less than what they would have been spending

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Speaker 1: to eat their home otherwise, so they're actually coming out

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Speaker 1: ahead every single month that they have the system. One

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Speaker 1: thing that I find really interesting about this company is

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Speaker 1: that it's to spin out from Google X, which is

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Speaker 1: where all moonshot ideas are born at Google and you

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Speaker 1: worked there before becoming the CEO and co founder of

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Speaker 1: Dandeline Energy. Why did you decide to spin it out?

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Speaker 1: So we made the decision with Google X to spin

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Speaker 1: it out because this company really UM was ready. It

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Speaker 1: was ready to start selling products to homeowners. And what

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Speaker 1: Google X specializes in as research and development UM moonshot

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Speaker 1: projects that can take a decade to come to fruition,

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Speaker 1: but then when they do, they change the world. And

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Speaker 1: for this project, we didn't need that decade. We UM

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Speaker 1: we were ready to start selling the product, so we

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Speaker 1: decided to been it out and started to sell. So

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Speaker 1: talking about this, the German Geothermal market is it? I mean,

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Speaker 1: how big is it? How fast is it growing? Um,

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Speaker 1: just give us a sense of what the market looks like. Well, today,

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Speaker 1: it is actually quite a small market in the sense

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Speaker 1: that very few homeowners get to enjoy geothermal heating and cooling.

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Speaker 1: And I would say many homeowners haven't really heard about

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Speaker 1: it even, which is a shame because there's just so

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Speaker 1: much money that homeowners could save if they were to

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Speaker 1: adopt the technology. What's been preventing it from being larger

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Speaker 1: in the past has been it's been too expensive. So

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Speaker 1: a typical system in the past has cost fifty or more,

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Speaker 1: which is just out of range for almost everyone. Um.

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Speaker 1: But the heating and cooling market couldn't be bigger. So

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Speaker 1: all of us spend so much money, especially in climates

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Speaker 1: that get cold in the winter, on heating, and that

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Speaker 1: market is hundreds of billions of dollars. What was it

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Speaker 1: like working at Google x Oh it was fantastic. So

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Speaker 1: my job, which I was so lucky to have, I

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Speaker 1: was a rapid evaluator is what we called it. So

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Speaker 1: what that meant is I got to explore new opportunities

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Speaker 1: for Google to invest in technologies that could have a

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Speaker 1: huge impact and become huge businesses someday. And I think

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Speaker 1: one of the great things about X is just the

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Speaker 1: intellectual freedom that we were given to do that sort

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Speaker 1: of thing, and then also, of course the quality of

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Speaker 1: the people that we got to work with. Who So

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Speaker 1: when you think about the Google lex is you know,

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Speaker 1: I guess investors, when I think about Google X, it

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Speaker 1: really is these moon shots. How many projects are roughly

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Speaker 1: being worked on, I guess, or how many you know

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Speaker 1: at any given time, and then I guess you just

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Speaker 1: decide when it's time to spin out, right, Yeah, So

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Speaker 1: the way it works is at the very early stages,

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Speaker 1: things are just an idea. So it's really you know,

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Speaker 1: there are there are hundreds of ideas getting batted around

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Speaker 1: at any given time, but most of them, as you

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Speaker 1: can imagine, make it very far because part of the

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Speaker 1: process it access to identify as quickly as possible. Why

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Speaker 1: I give an idea is doomed not to work. So

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Speaker 1: we're trained to be optimists, but optimists who are always

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Speaker 1: looking for the fatal flaw. Because opportunity costs is such

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Speaker 1: a real thing, especially at a place like Google with

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Speaker 1: so many resources, So the areas that are most ripe

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Speaker 1: for disruption energy. You pinpointed, is are there any others

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Speaker 1: that are sort of high areas of interest? Well, I

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Speaker 1: haven't been there for two years, so I can't speak

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Speaker 1: about the areas of interest there today, but I know

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Speaker 1: that UM we were always very attentive to trends and technology,

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Speaker 1: so you can imagine that UM areas like artificial intelligence, robotics, UM,

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Speaker 1: you know, maybe maybe agriculture, maybe bio. I think all

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Speaker 1: of those areas we're just seeing such rapid development that

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Speaker 1: I wouldn't be surprised if they were fertile ones for acts.

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Speaker 1: Kathy Hannon, thank you so much for being with us.

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Speaker 1: Kathy Hannon, chief executive officer and co founder of Dandelion Energy,

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Speaker 1: looking at the trapped heat in the ground as a

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Speaker 1: potential source of energy and depositor of energy in the

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Speaker 1: summertime as a way to have a more green way

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Speaker 1: of heating your home. Alphabet shares falling today at nearly

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Speaker 1: six percent, currently down five point one percent, five point

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Speaker 1: seven percent. Excuse me. This comes as the Department of

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Speaker 1: Justice in the United States is considering an antitrust probe

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Speaker 1: into the company. Very interesting development. Sharre OVERDA Bloomberg Opinion

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Speaker 1: columnist joining us here, What do you make of this?

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Speaker 1: Why now? I think that's a very good question, and

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Speaker 1: it remains to be seen. Look, there's obviously a different

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Speaker 1: administration in Washington, and the tech companies, including Google, are

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Speaker 1: also getting big, bigger every day, and more powerful every day,

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Speaker 1: and officials in government, including the head of the Department

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Speaker 1: of Justice, have signaled an interest in the size and

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Speaker 1: power of big tech companies, although I think people like

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Speaker 1: Attorney General Bill Barr have been quick to note that

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Speaker 1: looks size itself is not an antitrust violation, but how

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Speaker 1: you use your power can be. That's interesting because I

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Speaker 1: think it's obviously a big issue for Google today. But

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Speaker 1: as you suggest this, I think investors probably are also

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Speaker 1: concerned that they're just looking at tech more broadly, given

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Speaker 1: how some mean, is that really a risk out there?

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Speaker 1: From what you know? I mean to me, Look, this

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Speaker 1: is one of the biggest risks of any of these

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Speaker 1: large US tech companies, is the possibility of continued, persistent,

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Speaker 1: permanent political and rap aleatory pressure. You were seeing today

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Speaker 1: right that both Amazon and Facebook have a little bit

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Speaker 1: of a stock declined today. There was news out of

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Speaker 1: Washington over the weekend that you know, the Department of

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Speaker 1: Justice in the FCC have sort of d vied up

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Speaker 1: responsibility or the d o J is sort of taking

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Speaker 1: responsibility for Google and the Federal Trade Commission, Sorr said, FCC,

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00:25:20,600 --> 00:25:24,159
Speaker 1: the Federal Trade Commission has taken responsibility of Amazon. So

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00:25:24,200 --> 00:25:27,000
Speaker 1: that suggests that there may also be kind of regulatory

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00:25:27,040 --> 00:25:30,720
Speaker 1: interest looking at Amazon. And I think that the share

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00:25:30,760 --> 00:25:34,800
Speaker 1: price of Amazon today reflects that possibility. Which segments of

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00:25:34,840 --> 00:25:39,040
Speaker 1: Alphabet's business are most likely to come under particular scrutiny.

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Speaker 1: You are shaking your head. It could be anything, right, Look,

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00:25:43,760 --> 00:25:46,919
Speaker 1: so there is some precedent here, right, The Google or

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00:25:47,359 --> 00:25:50,760
Speaker 1: Google's parent company, Alphabet has been fined multiple times by

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Speaker 1: European anti trust regulators, and that was over a number

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00:25:54,000 --> 00:25:57,480
Speaker 1: of issues, including UM the way that Google sort of

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00:25:57,880 --> 00:26:02,520
Speaker 1: tied its Android smart phone operating system to other aspects

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00:26:02,520 --> 00:26:07,280
Speaker 1: of its business, including UM, it's it's apps, and it's

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00:26:07,480 --> 00:26:11,479
Speaker 1: Chrome browser for smartphones. There was a fine related to

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00:26:11,520 --> 00:26:18,119
Speaker 1: how Google UM handles Internet shopping and other kind of

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00:26:18,160 --> 00:26:24,159
Speaker 1: comparison internet shopping engines. The Federal Trade Commission investigated Google

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00:26:24,200 --> 00:26:28,440
Speaker 1: for possible antitrust investigation violations more than six years ago,

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00:26:28,640 --> 00:26:31,760
Speaker 1: and it looked at a number of issues, including Google

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00:26:31,840 --> 00:26:37,520
Speaker 1: kind of scraping information without permission from other Internet providers

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Speaker 1: including Yelp and trip Advisor to sort of improve Google

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00:26:41,440 --> 00:26:44,680
Speaker 1: search results. So look, the d o J could look

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00:26:44,720 --> 00:26:47,879
Speaker 1: at any of those things, or really anything, I guess,

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00:26:48,240 --> 00:26:51,120
Speaker 1: you know, taking a look at it from Google's perspective,

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00:26:51,119 --> 00:26:53,200
Speaker 1: they can probably just come back to regulators around the

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00:26:53,240 --> 00:26:55,440
Speaker 1: world and say, hey, we built the best mouse trap

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00:26:55,560 --> 00:26:58,440
Speaker 1: out there. That's why we have seven year per share

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Speaker 1: of church queries. But that doesn't seem to be winning

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Speaker 1: the day here. I think that is there a sense

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Speaker 1: that maybe that argument has to change that yet it's

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Speaker 1: not just that their substitutes, but you guys maybe just

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Speaker 1: mishandle your market dominance. So I think that's a great question.

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Speaker 1: And look at the Google is very practiced now at

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Speaker 1: dealing with these kind of anti monopoly concerns and regulations.

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Speaker 1: And Google's line has always been, as you said, we

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Speaker 1: built a better mouse trap. Competition is just one click away,

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Speaker 1: as their kind of favorite phrase. And it is hard,

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00:27:32,600 --> 00:27:37,240
Speaker 1: right because you can't necessarily point to direct consumer harm

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00:27:37,320 --> 00:27:41,000
Speaker 1: because Google provides Internet services that are free and a

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00:27:41,040 --> 00:27:43,440
Speaker 1: lot of billions of people use them around the world,

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00:27:43,520 --> 00:27:46,560
Speaker 1: and they're valuable, But what regulators look at as well,

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00:27:46,680 --> 00:27:48,920
Speaker 1: or what they might look at as well is Okay,

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00:27:49,000 --> 00:27:52,040
Speaker 1: let's play the long game here. If Google manages to

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00:27:52,119 --> 00:27:55,399
Speaker 1: kind of put out of business or guest stranglehold on

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00:27:55,640 --> 00:27:59,240
Speaker 1: lots of aspects of internet advertising or lots of of

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00:27:59,320 --> 00:28:04,320
Speaker 1: aspects of information online, does that harm consumers? Or is

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00:28:04,359 --> 00:28:09,199
Speaker 1: Google doing things um that basically abuse its power in

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Speaker 1: such a way that it crushes competitors. And the problem

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00:28:12,960 --> 00:28:15,199
Speaker 1: with anti trust and investigations is that they're broad and

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00:28:15,280 --> 00:28:18,920
Speaker 1: you just don't know what the investigators will find interesting.

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Speaker 1: Sure of a day Bloomberg Opinion colums covering all things

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Speaker 1: tech for us coming in at the last minute to

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Speaker 1: give us some color on Google. Thanks for listening to

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Speaker 1: the Bloomberg P and L podcast. You can subscribe and

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00:28:28,280 --> 00:28:31,440
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform

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00:28:31,480 --> 00:28:34,560
Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney.

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00:28:34,600 --> 00:28:37,480
Speaker 1: I'm Lisa abram Woyds. I'm on Twitter at Lisa Abramoyit's

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00:28:37,560 --> 00:28:40,400
Speaker 1: one before the podcast. You can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio