Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube and now also on Bloomberg Quick Take. Well, a
Speaker 1: most read story today on the Bloomberg in fact, several
Speaker 1: of the most read stores in the Bloomberg Today or
Speaker 1: again about the crumbling empire of Sam Bankman Freed. What
Speaker 1: in particular, though, Tim, is about the lawyers for the
Speaker 1: now bankrupt from f t X and concerns about its founder.
Speaker 1: It's a legal angle to this story, you right, Remember
Speaker 1: yesterday afternoon we've got some headlines on the Bloomberg terminal.
Speaker 1: They said that f t X was coming out and
Speaker 1: saying that Bankman Freed, Sam BigMan Freed has no ongoing
Speaker 1: role at f t X and he does not speak
Speaker 1: on behalf of f t X, f t x U
Speaker 1: s or or Alameda. And I made the comment that
Speaker 1: if you're bankruptcy attorney handling this bankruptcy, you probably don't
Speaker 1: want to see him tweeting the way that he's been tweeting.
Speaker 1: And it turns out, Um, that's actually the case. We
Speaker 1: got Steven Church with us. He's bankruptcy reporter for Bloomberg News.
Speaker 1: He joins us via zoom from our Wilmington, Delaware bureau. Stephen,
Speaker 1: we're getting some insight into what the lawyers for f
Speaker 1: t X um the case that they're making, and what
Speaker 1: they're coming out and saying in terms of the mess
Speaker 1: that they have to clean up. Right now, what do
Speaker 1: we learned this morning? Oh, we learned the main thing
Speaker 1: was that the lawyers believe that there was a huge
Speaker 1: mess that was unprecedented in terms of its corporate controls.
Speaker 1: Hold on, hold on, When you say unprecedented, you mean unprecedented.
Speaker 1: I mean we're talking en Ron world, Colm, Like, what
Speaker 1: are we talking here? Like going all the way? That's like,
Speaker 1: let's look at it this way. Um, and Ron was
Speaker 1: probably one of the worst corporate scandals corporate fraud scandals
Speaker 1: UM in US history, among the worst. The man who
Speaker 1: was charged with cleaning that up is now the CEO
Speaker 1: of f t X, and he says it's the worst
Speaker 1: thing he's ever seen. So, Steve Stephen, is it unprecedented
Speaker 1: in terms of lack of controls or non existent controls? Um?
Speaker 1: I think it'd be unprecedented in terms of the weak
Speaker 1: or and in some cases non existent controls, is what
Speaker 1: he's arguing. UM. The main thing that happened, uh, well
Speaker 1: to two big things happened this morning. They filed two
Speaker 1: important pieces of the two important court documents. One laid
Speaker 1: out the case for why they're in court, what the
Speaker 1: problem is, and how they hope to solve it, although
Speaker 1: they didn't have much detail on how they hope. Uh.
Speaker 1: The other thing they did was unusual. They asked the
Speaker 1: judge in Delaware to prevent the regulators in UM in
Speaker 1: Bahamas from taking control of the case in any way.
Speaker 1: So does that mean that it ensures that it will
Speaker 1: be handled in US bankruptcy court? Uh? No, it'll be
Speaker 1: split they the way these cases typically work because you
Speaker 1: have a giant, UH conglomerate that's you have a giant
Speaker 1: business that touches all corners of the planet. That's the
Speaker 1: way this one is. Usually the different courts work together,
Speaker 1: they get a protocol together, and they agree on how
Speaker 1: to handle creditors, how to handle lawsuits. We're at the
Speaker 1: beginning stages of this. The Bahamas case UH is smaller
Speaker 1: than the US case in terms of the in terms
Speaker 1: of the entities that are covered by it, So we're
Speaker 1: just at the beginning of it. Most likely the US
Speaker 1: will the U S Court here in Delaware will take
Speaker 1: the lead on that the lawyers in charge of that
Speaker 1: case have been complaining about um Uh. The way the
Speaker 1: former CEO has handled himself the last few days. Are
Speaker 1: we going to see him on on the stand? Unlikely?
Speaker 1: I doubt if he. If he will appear in the
Speaker 1: stand in the bankruptcy case, he would obviously be a
Speaker 1: hustile witness at that point because the lawyers are fighting
Speaker 1: with him about some of the things that he's been saying. UH.
Speaker 1: More likely you'll see the current CEO, the man who
Speaker 1: is in charge of of of and RON a few
Speaker 1: years go, take the witness stand if necessary. Over the
Speaker 1: last next few weeks. Steven, what happens to SPF. What
Speaker 1: could happen to SPF? That's the question everybody wants answered. Well,
Speaker 1: we know that in Manhattan, the U. S. Attorney's Office
Speaker 1: there is investigating the company. I got to believe that
Speaker 1: they will look at him specifically, so he may face
Speaker 1: criminal criminal at least a criminal investigation. There's no telling
Speaker 1: whether or not he'll be charged. Obviously it's way too early.
Speaker 1: But there's also an investigation in the Bahamas that's going
Speaker 1: forward as well. So one of the things that in
Speaker 1: the bankruptcy court is very likely to happen is the
Speaker 1: creditors will turn their sights on him and say, what
Speaker 1: money have you got given to us? You caused the problem.
Speaker 1: That's pretty routine in big cases where you have a
Speaker 1: scandal involving the CEO. Yeah, it's so fascinating. Um, you know,
Speaker 1: I think about this, Stephen, because you know, initially, I
Speaker 1: feel like in the earlier days of crypto we talked
Speaker 1: about the ability to avoid regulators and the law enforcement.
Speaker 1: We know subsequent to that that there is ways to
Speaker 1: track it all down despite what we thought was a
Speaker 1: lack of transparency. But will there be some difficulties and
Speaker 1: maybe understanding the relationships um among all the entities under
Speaker 1: f t x UH and in SPFS empire, or do
Speaker 1: you do I guess does law enforcement? The lawyers feel
Speaker 1: like they're going to be able to uncover a lot.
Speaker 1: I would not bet against all of the forces arrayed
Speaker 1: against SPF right now. These are very good lawyers and
Speaker 1: experienced investigators on both the Bahamian side and in the
Speaker 1: U S side. So they will probably be able to
Speaker 1: unravel much of it now, whether or not there are
Speaker 1: certain black boxes they can never get their hands on,
Speaker 1: that's possible, but I would guess that they'll be able to.
Speaker 1: They'll be able to lay blame where they think it
Speaker 1: should be, and they'll bring actions in court. Remember, creditors
Speaker 1: lost a lot of money, and so it's in many
Speaker 1: of those creditors interest to find cash that is hidden
Speaker 1: or UH lies in an asset somewhere. So there's a
Speaker 1: lot of money backing the lawyers who are trying to
Speaker 1: get back much of the money that was lost. When
Speaker 1: you say much just in the last thirty seconds that
Speaker 1: we have with you, what's it's hard to it's hard
Speaker 1: to estimate this and see the future. Of course, Steve
Speaker 1: and I would never ask you to do that, But
Speaker 1: what's a realistic expectation that customers could have. I it's
Speaker 1: way too early for me to to talk about that. Obviously,
Speaker 1: billions are at stake in this case. We don't even
Speaker 1: know how much money the U is actually that regulators
Speaker 1: and the lawyers can get their hands on. We don't
Speaker 1: know how much money will roll into the bankruptcy court
Speaker 1: that the bankruptcy court can then distribute. The lawyers said
Speaker 1: in their court papers they're collecting hundreds of millions of
Speaker 1: dollars or they think they've identified hundreds of billions of dollars. Right,
Speaker 1: all right, Well, we so appreciate your reporting. Stephen Church,
Speaker 1: bankruptcy reporter at Bloomberg News on zoom from our Wilmington,
Speaker 1: Delaware bureau. You're listening and watching Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio. The world continues to include COVID,
Speaker 1: which we know in some parts of the roles such
Speaker 1: as Johnic really continue to be a drag on economic
Speaker 1: growth and getting back to a more normal way of life.
Speaker 1: I will say, Tim, it does feel like in New
Speaker 1: York City as I was coming up, uh in the
Speaker 1: World Trade Center. I mean, there are a lot of
Speaker 1: people coming off the trains this morning. He does feel
Speaker 1: more back to normal, Yeah, especially on a Thursday Friday.
Speaker 1: We'll see if that's another story. Does get quiet, does
Speaker 1: get a little quieter. Hey, let's get into it and
Speaker 1: talk all things pandemic and other respiratory viruses as well.
Speaker 1: We've got Dr kosert a Lot joining us, Associate Professor
Speaker 1: of International Health at Johns Hopkins Bloomberg School of Public Health.
Speaker 1: The Johns Hopkins Bloomberg School Public Health is supported by
Speaker 1: Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropy US.
Speaker 1: A doctor to Lot joins us on the phone from
Speaker 1: Baltimore this afternoon. Dr Tolot, good to have you back
Speaker 1: with us. I want to start with this idea of um,
Speaker 1: what I talked about just in the tease that right there,
Speaker 1: this idea of a triple demic right now. I don't
Speaker 1: know about you, but I did not hear about rs
Speaker 1: V overwhelming hospitals, especially in pediatric areas, until this year.
Speaker 1: What's different about this year, Well, we haven't heard it
Speaker 1: quite so bad either. What's different about this year. There's
Speaker 1: a couple of things. UM. The first is this RSC
Speaker 1: season it's much earlier than we usually see it. UM.
Speaker 1: Usually RSC is a wintertime virus. We see it filling
Speaker 1: up pediatric hospitals in January and February, not in October
Speaker 1: and November. UM, so it's it's much earlier. And in addition,
Speaker 1: there's many more cases. UM. RSC season has been altered
Speaker 1: because of COVID, So when we were all staying home
Speaker 1: and when we were all wearing masks and kids we're
Speaker 1: not going to school, RSC really disappeared for for the
Speaker 1: better part of two winters. UM. Last year we had
Speaker 1: a big RSP surge in the summer and then it
Speaker 1: went away in the fall, which was really unusual. UM.
Speaker 1: And this year it started in the fall and it's
Speaker 1: much much higher. And part of the reason why it's
Speaker 1: so high is because so many people have not seen
Speaker 1: our as the in several years, our immunity has waned.
Speaker 1: We have cold like large numbers of babies who and
Speaker 1: young children who have never had it, so now everybody
Speaker 1: is getting it all at this tame. Yeah, that's scary stuff.
Speaker 1: My cousin has you know three year old who was
Speaker 1: in the hospital for five days with RSP thankfully is
Speaker 1: okay right now, Um, Dr Tolts, So what are we
Speaker 1: What are we to do as parents? What are we
Speaker 1: to do as we had to the holiday season recommendations. Well, um,
Speaker 1: you know, if you're six, stay home, if your child
Speaker 1: is sick, keep them home from school. Um, if they're
Speaker 1: old enough to be wearing masks, this might be a
Speaker 1: good time to be wearing a mask. Um. Unfortunately, we
Speaker 1: don't have vaccines for RSC yet, but hopefully we'll have
Speaker 1: at least adult ARC vaccines in the next few years. Um.
Speaker 1: We um, wash your hands, you know, all the good
Speaker 1: public health things that we've been told for for many
Speaker 1: years during cold and flu season. Dr tolt just got
Speaker 1: about a couple of minutes left here. So now we've
Speaker 1: got four vaccines COVID nineteen vaccines just switching gears here
Speaker 1: that are available in the US. You've got the Fizer
Speaker 1: bion tech and then the Maderna which are emin R
Speaker 1: messenger RNA vaccines. You've got nervavacs COVID nineteen vaccine is
Speaker 1: a protein subunit vaccine. And then you've got j and
Speaker 1: Jay's Jansen vaccine a viral vector vaccine and can be
Speaker 1: given in some situations. UM of a really nice listener
Speaker 1: is messaging us and his name is Michael, and he's saying,
Speaker 1: I'm wondering if novavax is as effective as the other
Speaker 1: vaccines for covid um. The Novavax vaccine was evaluated and
Speaker 1: seen to be very effective at preventing UM severe disease,
Speaker 1: how realizations and death, just like the other vaccines. Currently,
Speaker 1: the Novovaks booster is just a UM. It's the single
Speaker 1: strain UM, whereas the MR and A vaccines are now
Speaker 1: being given as two strains. The bi valent vaccine UM
Speaker 1: that is targeting the the omicon strains UM. But nova
Speaker 1: vacs does work very well and if you prefer to
Speaker 1: get more traditional vaccine UM, the novavax vaccine could be
Speaker 1: a good fit for you. If you want the bi
Speaker 1: valent vaccine to get the best filmacon protection that UM,
Speaker 1: then the m R and A vaccines might be a
Speaker 1: good place. Well. In just thirty seconds, because I took UM,
Speaker 1: I've been fiser all the way and I took the
Speaker 1: fifth vaccine and felt like I had covid for twenty
Speaker 1: four hours. He's also asking just to follow is there
Speaker 1: less of a chance for side effects or milder side effects?
Speaker 1: And just got about thirty seconds from the novavaxx. Yeah,
Speaker 1: the side effects maybe a little bit milder, yes, because um,
Speaker 1: but but the but the side effects generally are very
Speaker 1: short lived, no matter vaccine you get. Hand are um,
Speaker 1: you know, a small pipe to pay for being protected
Speaker 1: against COVID? Totally agree for me. It was like twenty
Speaker 1: four hours and I kind of bounce back. Um, we
Speaker 1: thank you, Michael, our viewer listener thanks you as well.
Speaker 1: Dr kosar to a Lot, Associate Professor of International Health
Speaker 1: at Johns Hopkins Bloomberg School of Public Health. And as
Speaker 1: we remind you, it is supported by Michael R. Bloomberg, Founder,
Speaker 1: Bloomberg LP and Bloomberg Philanthropies. Uh. She was joining us
Speaker 1: on the phone from Baltimore. This is Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick takes Tim Stinovic on
Speaker 1: Bloomberg Radio. As travelers get ready like Tim to to
Speaker 1: to take to the air at the holiday season gets underway,
Speaker 1: are Allan Levin in the new issue of Bloomberg Business
Speaker 1: Week takes a look at the glamorous air charter market
Speaker 1: the dark corners of that market. That is a story,
Speaker 1: by the way, also the Bloomberg Big take. Are you
Speaker 1: applying that I'm going to fly on a private jet
Speaker 1: somewhere for between forty and seventy thousand dollars for a
Speaker 1: round trip between the East Coast and the West coast.
Speaker 1: Ever works for you, I'm not going to be doing that,
Speaker 1: And especially after reading the story, I think it raises
Speaker 1: a lot of questions about what the charter industry looks like.
Speaker 1: We've got Joe Webber, the editor of Bloomberg Business Week
Speaker 1: with us in the Bloomberg Interactive Broker studio, and also
Speaker 1: Alan Levin Aviation Safety and f a reporter for Bloomberg News.
Speaker 1: He joins us on the phone from our Washington, d C. Bureau, Joel,
Speaker 1: I want to kick it over to you and just
Speaker 1: make a distinction at the beginning of the conversation about
Speaker 1: how we define illicit charter flights, because the definition is
Speaker 1: it's it's kind of murky, right, And that's why, um,
Speaker 1: I think the story is scary a right, Like I
Speaker 1: think people are getting on planes that they assume are
Speaker 1: fine and in the worst case scenarios. As Alan's reporting shows,
Speaker 1: UM learning in in disastrous ways that they're that they're
Speaker 1: not UM and it is murky UM. And that's I'll
Speaker 1: let Alan actually think the question in terms of like
Speaker 1: illuminating the very specific question that you have. But the
Speaker 1: bigger thing to me is just I think there are
Speaker 1: private private aviation has become almost sort of the shadow
Speaker 1: world that is very attractive. You can get places far easier,
Speaker 1: and all you need is a little bit more money
Speaker 1: than flying via normal one and it has revealed. Alan's
Speaker 1: reporting here reveals that it comes with a host of
Speaker 1: problems and worries. Alan. Yeah, yeah, that's that's correct, Um.
Speaker 1: And you know, in our world today, we can you
Speaker 1: assume when you get in, if you call an uber
Speaker 1: or you're getting a taxi, that it's sort of been
Speaker 1: vetted by the government. It's not perfect, but at least
Speaker 1: you know they're looking at it, and I think they're
Speaker 1: That assumption carries over into the charter world, not at least,
Speaker 1: you know, at least in part it's due to the
Speaker 1: fact that there are lots of apps you can get
Speaker 1: that will get you a charter flight, and some people
Speaker 1: just assume it's the same thing, but it's but unless
Speaker 1: you know what you're doing, it's really hard to tell
Speaker 1: the legitimate operators from the the ones who are not licensed,
Speaker 1: and you know, in some cases are really cutting corners
Speaker 1: on safety. I'm sorry, I'm just having like FTX flashbacks
Speaker 1: regulators and your accountability. You assume that parent has a
Speaker 1: fancy app that you know, and that it has ads
Speaker 1: that it's going to be okay. So this is really interesting.
Speaker 1: There's this also this this part in the piece, Allan,
Speaker 1: and you have just some you know, really heart wrenching examples.
Speaker 1: Marcy Wilhelm is somebody who spoke to you for the piece,
Speaker 1: tell us about her experience flying privately. Yeah, let me
Speaker 1: just start by saying, I've been covering air crashes for
Speaker 1: a couple of decades now, and this is really one
Speaker 1: of the most heart wrenching ones. Um, Marcy is was amazing,
Speaker 1: had an amazing success story. She had founded uh co,
Speaker 1: founded a healthcare company, and they'd sold it for almost
Speaker 1: two hundred million dollars. Was back in she'd been hired
Speaker 1: to be the CEO of the successor company, and um,
Speaker 1: you know, she had was going away on a long
Speaker 1: weekend to Nantucket with some friends from her house in Florida.
Speaker 1: They stopped in uh, South Carolina to pick up some
Speaker 1: some folks, and the plane essentially did not have breaks.
Speaker 1: And it's a fairly big corporate jet um with high
Speaker 1: speeds compared to some other planes, and it just went
Speaker 1: screaming off the end of the runway down an embankment
Speaker 1: and broke into pieces, killed both pilots and Marsien and
Speaker 1: her husband were both severely injured. And the what investigators
Speaker 1: came to learn very quickly was that the plane never
Speaker 1: should have been in service on many different levels. For
Speaker 1: one thing, uh, Marcy booked the fight on a legitimate
Speaker 1: charter operator, but they're required to um uh have you know,
Speaker 1: put each and every aircraft on their certification. This aircraft
Speaker 1: was not um But beyond that, it had dozens of
Speaker 1: maintenance items that weren't complete, most notably the brakes. And
Speaker 1: the most stunning thing of all is a mechanic had
Speaker 1: noticed that the brakes weren't working had put a bright
Speaker 1: orange placard kind of a sticky note if you will,
Speaker 1: on the brake panel right in front of the pilot's
Speaker 1: faces that said inoperable. Technically it said in op which
Speaker 1: is whatever you know, that's what everyone in aviation, no elemine,
Speaker 1: they should know what that means. And they still landed
Speaker 1: without the brakes and had this accident. How is this
Speaker 1: happening still in the year of our Lord? Like how? How?
Speaker 1: And why? What? What? What are the blind spots here?
Speaker 1: So you know, in the legitimate air charter world, I
Speaker 1: don't want to leave listeners confused. In the legitimate world,
Speaker 1: there is a ton of f a oversight. It's not perfect.
Speaker 1: Occasionally we see flaws, but you know, they're they're required
Speaker 1: to do everything from pilot training to drug testing employees,
Speaker 1: on and on and on. But there's a good, uh
Speaker 1: twenty thousand or so private jets that are privately owned
Speaker 1: in the US, and you know, let's say our business
Speaker 1: and you bought this jet and suddenly the costs of
Speaker 1: maintenance are adding up. You might say, well, geez, why
Speaker 1: don't we just rent it out, you know, to somebody.
Speaker 1: And if you do that, you're not following all those
Speaker 1: safety measures that the legitimate guys do. And from the
Speaker 1: outside of the plane it's almost impossible to tell the difference.
Speaker 1: And I guess I'm just wondering, why does it all
Speaker 1: fall through, you know, the hands of regulators or the
Speaker 1: f a A ultimately, UM, but I can see where
Speaker 1: the cracks are. So what's your advice to folks out
Speaker 1: there who might be interested in chartering. Well, it turns out, UM,
Speaker 1: the f a A partly in a reaction to this
Speaker 1: a few years ago, be in publishing a list of
Speaker 1: all the aircraft that are legitimately licensed to carry people
Speaker 1: for hire. So you can look that up. You have
Speaker 1: to go to if you google f a A Air
Speaker 1: charter Safety, you'll find a link to it. UH. There's
Speaker 1: a trade group that UM has been very involved in
Speaker 1: this as well. And there are also several private companies
Speaker 1: that do auditing of charter companies, UH sort of save
Speaker 1: the customer the hassle of doing that UM. And so
Speaker 1: so there are definitely ways to figure out who's legit
Speaker 1: and who's not. And we teased UM earlier that there's
Speaker 1: a connection between j B. Fox and uh BA Hollywood
Speaker 1: producer Peter Gruber, also the NBA and I think the NHL.
Speaker 1: So UM highly recommend that you check out this story
Speaker 1: in the upcoming issue of Bloomberg Business Week. Also on
Speaker 1: the Bloomberg terminal and at Bloomberg dot com because it's
Speaker 1: a um a really important one and a lot of
Speaker 1: detail there. From Allan Levin, our Aviation Safety and f
Speaker 1: A reporter, Allen, thank you. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic
Speaker 1: on Bloomberg Radio. Alex Barenka, technology reporter at Bloomberg News.
Speaker 1: She's got a great story in the new double issue
Speaker 1: of Bloomberg Business Week dealing with metal platforms. Alex is
Speaker 1: with us via zoom in l A. So, Alex, good
Speaker 1: to have you here. Tell us about your story. Yeah. So,
Speaker 1: we've heard a lot of kind of anger at the
Speaker 1: general economic conditions from all of the Internet companies like
Speaker 1: Meta that depend on digital ads, blaming the economy for
Speaker 1: the really bad quarters they've had over the last six
Speaker 1: months or so. This weekend in Business Week, I'm writing
Speaker 1: that there might be kind of a bigger reason that
Speaker 1: Meta in particulars ad business. Um, it has a big
Speaker 1: hole in it, and that pole is shaped like Apple.
Speaker 1: About a year ago, Apple changed its privacy policies for
Speaker 1: the iPhone that made ads on social media both harder
Speaker 1: to target specific people and harder to track the return
Speaker 1: on the spend on those ads, and a year in
Speaker 1: Meta has estimated that that's had a ten billion dollar
Speaker 1: hit on its pad business. And you know, myself and
Speaker 1: a lot of the analysts and insiders I spoke for
Speaker 1: this story would also argue that that's what's dragging Meta
Speaker 1: down to potentially it's there. It's third quite straight quarter
Speaker 1: of revenue declines. It's more Apple than the economy. UM
Speaker 1: and I tried to break that down for folks this week. Well,
Speaker 1: there's a stark chart included in your piece that shows
Speaker 1: how other companies are faring or projected to fair between
Speaker 1: two uh. TikTok, according to e Marketer, has a projected
Speaker 1: change of one fifty versus Meta down at the bottom
Speaker 1: of which protect a change of negative. Why is TikTok
Speaker 1: able to capitalize on something when you know they're using
Speaker 1: the same hardware and the same operating systems to deliver
Speaker 1: those ads. I think there's two key reasons so Meta,
Speaker 1: as you mentioned Facebook, Instagram, those are metas companies have
Speaker 1: historically been based on who you know your friend graph
Speaker 1: is how they derive kind of insights on you. Um
Speaker 1: and plus the information that they were able to glean
Speaker 1: from Apple to make sure that advertisers are reaching the
Speaker 1: people they want to reach. Picktok, on the other hand,
Speaker 1: Um has built out an ai UM kind of focused
Speaker 1: recommendation engine that is derived on our users interests, so
Speaker 1: they know more about you than just who you know.
Speaker 1: They know who you're actually interested in. That is some
Speaker 1: of the information UM it's not quite apples to apples
Speaker 1: that Meta has lost, So TikTok has been able to
Speaker 1: kind of really lean into this interest based recommendations. Uh.
Speaker 1: That idea interros based recommendations is also where Meta is
Speaker 1: spending a lot of money to kind of chasten too that. Now,
Speaker 1: the one caveat I would give is Meta is still
Speaker 1: an advertising giant. They're still expected to bran about a
Speaker 1: hundred and sixteen billion dollars in report this year. TikTok
Speaker 1: is only about a tenth of that. So there is
Speaker 1: some kind of um youth in growth there um for TikTok.
Speaker 1: But that is kind of the big reason UM that
Speaker 1: folks might be looking too platforms where they can target
Speaker 1: people a little bit more effectively than maybe what's been
Speaker 1: lost on Facebook and Instagram. I gotta say, Alex one
Speaker 1: of the lines I love in your story, you say
Speaker 1: the company has no experience managing decline. There's something to
Speaker 1: be said. I mean, this is a company that has
Speaker 1: been on fire, maybe a little bit of a you know,
Speaker 1: trouble about that. I p o initially but figured it
Speaker 1: out right in the ship. But when things start to
Speaker 1: go wrong, like you might not have a playbook or
Speaker 1: the people in place to be like, well wait, how
Speaker 1: do we fix this right? And you remember just last
Speaker 1: week they laid off Force and their biggest layoff ever.
Speaker 1: So this is a company now that's going to be
Speaker 1: expected to do more with less. So this Apple thing
Speaker 1: is a big problem, But there are a lot of
Speaker 1: other problems that Meta. You have the economic conditions, you
Speaker 1: have the scrutiny on the political power that Facebook and
Speaker 1: Instagram have on the world. You have this big bet
Speaker 1: that Mark Zuckerberg is making trying to build a virtual
Speaker 1: reality world called the Metaverse and funneling ten billion dollars
Speaker 1: a year into that direction. So there's a lot going
Speaker 1: on there. And now it's going on with eleven thousand people,
Speaker 1: fewer than just two weeks ago. So it seems like
Speaker 1: they're really going to have to kind of buckle down.
Speaker 1: We've heard internally that you know, there's still some restructuring
Speaker 1: going on. Um that you know, this is the first
Speaker 1: time that a lot of employees are being pushed to
Speaker 1: a level of efficiency and lead this UM than they
Speaker 1: ever have before. So this will definitely be one to
Speaker 1: watch as they kind of juggle both coming back from
Speaker 1: these changes that Apple forced upon their business, battling economic conditions,
Speaker 1: and trying to paint the future of computing in the metaverse. Hey, Alex,
Speaker 1: kind of want to throw a little bit of a
Speaker 1: curveball at you because it's, you know, not necessarily what
Speaker 1: your most recent pieces about, but I know you've done
Speaker 1: so much reporting about this. I'm wondering what small businesses
Speaker 1: think of this change, because they're the ones who have
Speaker 1: done a lot of advertising historically on meta platforms including
Speaker 1: Facebook and Instagram, and now ostensibly it's more difficult for
Speaker 1: them to target their potential customers. Yep, throw those curveballs away. Um.
Speaker 1: I will say basicstes have been okay. Um, they've spent
Speaker 1: more on like newspapers or buying ads on TV channels.
Speaker 1: So the big companies can do that because they have
Speaker 1: the budgets. Small businesses have kind of historically been stuck
Speaker 1: with two options with basically meta or Google alphabets um
Speaker 1: search ads when it comes to reaching customers on the Internet.
Speaker 1: So they've been the folks who basically have had to
Speaker 1: kind of go roll with the punches here, and that's
Speaker 1: also why we think there's been such a big decline
Speaker 1: in overall ad spending. Those are the folks that kind
Speaker 1: of have to pull back because they can't write, say
Speaker 1: a half a million dollar check to advertise on something
Speaker 1: like Hulu. They're kind of start reaching customers on the
Speaker 1: Internet and it's gotten a lot more expensive because the
Speaker 1: targeting is less effective. So those folks are the ones
Speaker 1: um that are probably impacting it the biggest from a
Speaker 1: pure quantity perspective. That's the majority of metas advertisers. So
Speaker 1: small businesses also, you know, are probably looking to places
Speaker 1: like TikTok and other properties where they can spend the
Speaker 1: small budgets they have to find the customers that they want.
Speaker 1: Alex Farenka really appreciate it. I'm probably a journal yeah,
Speaker 1: but you let me drive No, no, all right, please, gravels.
Speaker 1: I want to try. It's good questions. This is the
Speaker 1: drive to the clothes on Bluebird Radio. All right, we
Speaker 1: have just about ten minutes left in today's trading session.
Speaker 1: Bouncing around here on the equity trade. Same story when
Speaker 1: it comes to the yield trade. I think as investors
Speaker 1: go from FED conversation to FED conversation right now in
Speaker 1: terms of stock specifically, as Charlie mentioned, definitely off our
Speaker 1: loads of the session, and we're seeing a leg up
Speaker 1: tim here in our final minutes of trading. We are,
Speaker 1: but volume is really low right now, the SMP down,
Speaker 1: volume down. People are already start anything about that Thanksgiving holiday,
Speaker 1: But you don't want to ask Charlie Massimo all about
Speaker 1: his senior vice president and financial advisor at the Wealth
Speaker 1: Enhancement Group on the phone from Blue Point in New York. Charlie,
Speaker 1: good to have you back with us. How are you.
Speaker 1: I'm great, Thanks, thanks for having me. It's always yeah. Hey,
Speaker 1: So what are investors waiting for? Why are they on
Speaker 1: the sidelines? Yeah? I think the Fed's confusing the heck
Speaker 1: out of everybody with comments and just there's just fiction.
Speaker 1: Yeah yeah. I think there's just a lack of conviction
Speaker 1: on which way we want to go, and I think
Speaker 1: people are just waiting for the next next data point
Speaker 1: to make a decision on where they want to put
Speaker 1: their money. Well, where would you want to put your
Speaker 1: money right now if you had to put some new
Speaker 1: money to work? As I think there's so many positive
Speaker 1: things happening in the market right now despite what we
Speaker 1: read in the headlines, and you know, you have you
Speaker 1: have an inflation which is which is coming down without
Speaker 1: seeing any deterioration in the labor market, which is a
Speaker 1: really positive indication and something that FED is certainly going
Speaker 1: to pay attention to. I think you have uh SMP
Speaker 1: five companies with they're so flush with cash um which
Speaker 1: means that we probably will see increase in dividends coming along.
Speaker 1: So I'm I'm huge um proponent of value stocks that
Speaker 1: are going to show increased dividends and really going to
Speaker 1: pay people to wait while we see a real turnaround
Speaker 1: in the market. Can you name any specific value sucks
Speaker 1: that you have your eye on right now? Yeah? Again,
Speaker 1: I think when you see any any any um um
Speaker 1: stots like Target that are beat up, these are great
Speaker 1: companies right and when you can buy a company twenty
Speaker 1: cheaper than where they were just a year ago, you
Speaker 1: have to take advantage of it, because again I think
Speaker 1: in the year two years from today, these companies are
Speaker 1: going to be significantly higher. And again I've always said this,
Speaker 1: this is not when you become shy of investing in
Speaker 1: the market. This is when you become very aggressive and
Speaker 1: buy some of these great American companies. So it raises
Speaker 1: the question about whether or not you think we have further,
Speaker 1: you know, further losses ahead of us, Like, is there
Speaker 1: going to be a better time to get into the market,
Speaker 1: maybe in the first half of three Well, listen there
Speaker 1: there there You can always you can always debate when
Speaker 1: is the right time, and I think as an individual
Speaker 1: investor you have to see where you are in your
Speaker 1: own time frame. But again, you know when these companies
Speaker 1: we spoke probably about two months ago when the market
Speaker 1: was about ten percent lower than where it is today.
Speaker 1: So again, was that a good time to invest it
Speaker 1: we hit bottom? You know, I think when you look
Speaker 1: at the market, it's much more positive and much more
Speaker 1: constructive now, meaning the lows are are much better than
Speaker 1: what we've seen a year ago, in a week ago
Speaker 1: or two weeks ago, and the highs are pretty significant
Speaker 1: on updates. So I think we're starting to see a
Speaker 1: market that is trying to find direction, but the direction
Speaker 1: is much more positive than negative right now. Yeah, it
Speaker 1: is kind of It's so funnairs. Just look at the
Speaker 1: home builders, the home building index, which is certainly a
Speaker 1: laggard in today's market. It's down about two percent if
Speaker 1: you look at the S and P Supercomposite Homebuilding Index,
Speaker 1: but you know, it's been bouncing around a lot, and
Speaker 1: I understand the housing data feels like it's a little
Speaker 1: bit more to the downside, but the group is still
Speaker 1: up fift since October twenty. I always feel like there's
Speaker 1: mixed signals in this market. So Charlie, what do you
Speaker 1: most monitor for getting an idea of maybe where valuations
Speaker 1: should be and where the market will ultimately go, Because
Speaker 1: it does sound like you have some optimism for the
Speaker 1: trade in Yeah, not only three and certainly beyond. I mean,
Speaker 1: when you think about some of the staggering numbers, you know,
Speaker 1: I was just reading today that the Brookings Institution projects
Speaker 1: up between about one point six billion people will enter
Speaker 1: the middle class. I mean, that's that's significant. So you
Speaker 1: think as they enter the middle class, and these great
Speaker 1: companies that will continue to prosper from this growth in
Speaker 1: our in our economy, and in our world. So it's
Speaker 1: really not one specific place that I'm looking. I'm just
Speaker 1: looking as a general, as a market as a whole
Speaker 1: that as as we continue to see these numbers improved,
Speaker 1: it's just an amazing opportunity for the companies across the
Speaker 1: board really to see increased values at a significant clip. Okay,
Speaker 1: So Charlie, I want to go back to FED speakers
Speaker 1: because we talked about him a lot here, of course,
Speaker 1: and we try to dissect all of their comments. And
Speaker 1: I'm wondering, if you take everyone who you've heard from
Speaker 1: over the last a few days or so, um, the
Speaker 1: message that you're seeing is the one that's broadly showing
Speaker 1: that we're going to see an easing of rad hikes
Speaker 1: come December and the early part of or is it
Speaker 1: one that says there's still more work to do? Well?
Speaker 1: I think over the short term there's probably still more
Speaker 1: work to do, and and and that's not because of inflation. Um,
Speaker 1: not slowing or slowing down, because we are. But I
Speaker 1: think it's really the FED that's trying to be overly
Speaker 1: aggressive in this market. You know what he's done already,
Speaker 1: and I agree with what he's been doing, because again,
Speaker 1: a short term bear market is much worse than long
Speaker 1: term inflation for this economy. So I agree with what
Speaker 1: he's doing, but I think now it's time to let
Speaker 1: all these raises seep into the market and slow down
Speaker 1: to What I'd love to see him say is that
Speaker 1: we may have more work to go, but we're going
Speaker 1: to slow down the pace and we're gonna wait to
Speaker 1: see that make that that our increases in yields are
Speaker 1: really helping the inflation slow down. That's what I'm hoping
Speaker 1: he says. I don't know if he'll say that, but
Speaker 1: I think that would be a huge positive indication for
Speaker 1: the market. You know, Charlie, we've talked about this before
Speaker 1: with you because you and what you do at your firm,
Speaker 1: you specialize in planning for families impacted by autism, and
Speaker 1: you know, these are families that really have to make
Speaker 1: sure that they've got investments in place. So I do
Speaker 1: think in an environment where we feel like things keep
Speaker 1: coming at us left and right, longer term, you know,
Speaker 1: what do you see as the best bets? Yeah, again,
Speaker 1: it's a it's a really great point, and I think
Speaker 1: that you have to take a deep breath as an
Speaker 1: investor and really measure where you are from a risk
Speaker 1: tolerant standpoint. You know, in the past few years it
Speaker 1: was great to own technology, but now you have some
Speaker 1: of those companies down thirty so you've lost three to
Speaker 1: five years of growth in one year or in less
Speaker 1: than one Does that ever come back? It will, but
Speaker 1: it's going to lag the rest of the markets. Like
Speaker 1: is it going to look like the dot com bust
Speaker 1: of the late nineties early two thousands and take a decade?
Speaker 1: I mean not that I don't think it's back to
Speaker 1: Some of these companies have real earnings versus dot Com
Speaker 1: where they had no earnings at all. So I think
Speaker 1: we have companies like Amazon that are having a difficult
Speaker 1: time that will still show some significant earnings moving forward.
Speaker 1: But I do think again you get getting back to
Speaker 1: the point of Carl. You have to be you have
Speaker 1: to look at the market and say, hey, where am
Speaker 1: I going to get the steadiest growth, not get the
Speaker 1: big ups and downs. And I think the steady growth
Speaker 1: is being broad based, not overweighting in any industry and collector.
Speaker 1: And again I know value was out of favor, but again,
Speaker 1: over time value would be more than the more consistent
Speaker 1: All right, well, Charlie, thank you so much. Have a
Speaker 1: good Thanksgiving. Charlie Massimo, Senior VP, Financial Advisor and Wealth
Speaker 1: Enhancement Group, on the phone from Blue Point, New York.
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