1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,160 --> 00:00:06,240 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,560 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,480 Speaker 1: and on Bloomberg dot com. Dr do A Dr Rene 7 00:00:21,640 --> 00:00:24,119 Speaker 1: do A is founder and chief medical officer of a 8 00:00:24,160 --> 00:00:26,880 Speaker 1: company called Hell h e a L. It provides on 9 00:00:26,960 --> 00:00:31,480 Speaker 1: demand telemedicine as well as some in home dr house calls, 10 00:00:31,520 --> 00:00:34,479 Speaker 1: and Dr do A joins US Now. Dr do A, 11 00:00:34,800 --> 00:00:38,839 Speaker 1: how will your company and companies like a deal with 12 00:00:38,880 --> 00:00:41,800 Speaker 1: the distribution of the vaccine? Do you have orders in? 13 00:00:41,880 --> 00:00:44,280 Speaker 1: Do you expect to be contacted? How does it all 14 00:00:44,280 --> 00:00:47,920 Speaker 1: work so so far? Thanks first of all for having 15 00:00:47,920 --> 00:00:50,720 Speaker 1: me on this show. Uh, first of all, it's it's 16 00:00:50,800 --> 00:00:53,240 Speaker 1: kind of been an interesting roll out. You know, about 17 00:00:53,240 --> 00:00:57,200 Speaker 1: a week ago, I was concerned that the logistics and 18 00:00:57,320 --> 00:00:59,680 Speaker 1: the routing of getting this vaccine around we're going to 19 00:00:59,760 --> 00:01:02,480 Speaker 1: be there very difficult. It seems that piece by piece 20 00:01:03,040 --> 00:01:05,600 Speaker 1: these items are falling into place. I was asked to 21 00:01:05,640 --> 00:01:09,840 Speaker 1: fill out some paperwork on the CDCs website to apply 22 00:01:10,040 --> 00:01:14,400 Speaker 1: for not just my medical teams, but also our patients 23 00:01:14,480 --> 00:01:18,720 Speaker 1: that we serve um to to to try to acquire 24 00:01:19,080 --> 00:01:22,200 Speaker 1: enough vaccine for those those members of the team in 25 00:01:22,560 --> 00:01:24,880 Speaker 1: each and every one of our markets. I'm waiting to 26 00:01:24,959 --> 00:01:28,400 Speaker 1: hear back, but I've been consistently following up as well 27 00:01:28,480 --> 00:01:31,760 Speaker 1: to see what's going on. I've also been seeing that 28 00:01:31,959 --> 00:01:36,000 Speaker 1: the hospitals on which I'm on staff are trying as 29 00:01:36,040 --> 00:01:38,160 Speaker 1: well to have a rollout process, and there have been 30 00:01:38,360 --> 00:01:42,679 Speaker 1: glitches with accessibility to you know, sign up forms and 31 00:01:42,840 --> 00:01:46,240 Speaker 1: email addresses and so that that's also been a very 32 00:01:46,280 --> 00:01:50,320 Speaker 1: interesting perspective as well. It's, of course, as expected, rushed, 33 00:01:50,720 --> 00:01:54,600 Speaker 1: but certainly hopefully will happen this month. So DR do 34 00:01:55,120 --> 00:01:57,280 Speaker 1: you know, it seems like what we're hearing in terms 35 00:01:57,280 --> 00:02:02,360 Speaker 1: of the rollout is healthcare workers, folks in our retirement 36 00:02:02,360 --> 00:02:05,040 Speaker 1: homes and so on, to get getting to those critical 37 00:02:05,080 --> 00:02:08,920 Speaker 1: populations initially and then out to the broader populations over time. 38 00:02:08,960 --> 00:02:12,720 Speaker 1: What is your best guess as to when the average 39 00:02:13,080 --> 00:02:18,000 Speaker 1: American out there will have access uh to this vaccine. 40 00:02:19,360 --> 00:02:22,440 Speaker 1: So the goal is to have a hundred million people 41 00:02:22,680 --> 00:02:27,239 Speaker 1: vaccinated in the first part of so I think that 42 00:02:27,400 --> 00:02:32,440 Speaker 1: by the end of summer, the average person will be vaccinated. Now, 43 00:02:32,520 --> 00:02:36,840 Speaker 1: keep in mind this vaccine is for those folks sixteen 44 00:02:36,919 --> 00:02:40,560 Speaker 1: and up, so we still have work to do for children. 45 00:02:43,639 --> 00:02:46,560 Speaker 1: Is it fine to let children be are among the 46 00:02:46,600 --> 00:02:49,760 Speaker 1: last to get this vaccine or should they be earlier? 47 00:02:51,120 --> 00:02:55,680 Speaker 1: I think with children we see a very interesting infectivity. 48 00:02:55,800 --> 00:02:58,400 Speaker 1: So you've of course read in the news and seen 49 00:02:58,440 --> 00:03:01,560 Speaker 1: in the news that children have died because of COVID. 50 00:03:01,639 --> 00:03:06,320 Speaker 1: They've certainly been infected, they're certainly carrying and transmitting. But 51 00:03:06,440 --> 00:03:10,079 Speaker 1: I think what we've also seen is the population suffering 52 00:03:10,240 --> 00:03:14,120 Speaker 1: the most are those that are elderly and immuno compromised. 53 00:03:14,160 --> 00:03:18,240 Speaker 1: And of course my colleagues on front lines are being exposed, 54 00:03:18,480 --> 00:03:21,000 Speaker 1: um in their efforts to keep people safe. So I 55 00:03:21,000 --> 00:03:26,360 Speaker 1: would say those are definitely the right priorities. So Dr Derot, 56 00:03:26,919 --> 00:03:29,679 Speaker 1: you know, in this country at least, uh, there is 57 00:03:29,720 --> 00:03:32,640 Speaker 1: a sizeable percentage of the population that just doesn't feel 58 00:03:32,680 --> 00:03:36,680 Speaker 1: comfortable with the old concept of receiving vaccines for you know, 59 00:03:36,680 --> 00:03:40,160 Speaker 1: the measles amongst and other things. Um, how do we 60 00:03:41,080 --> 00:03:45,000 Speaker 1: as a society, you know, get those people to accept 61 00:03:45,040 --> 00:03:49,440 Speaker 1: this vaccine and take this vaccine. It's such a challenging question. 62 00:03:49,600 --> 00:03:52,760 Speaker 1: We we deal with it in the routine vaccines such 63 00:03:52,840 --> 00:03:56,840 Speaker 1: as MMR as you described. And so this concept of 64 00:03:56,920 --> 00:04:01,480 Speaker 1: herd immunity, where enough people are vaccinated so that as 65 00:04:01,520 --> 00:04:05,160 Speaker 1: a population we are all protected, is the most critical 66 00:04:05,200 --> 00:04:09,040 Speaker 1: piece to our survivability. The amount of lives we have 67 00:04:09,120 --> 00:04:13,360 Speaker 1: lost with COVID is tragic, is an understatement, right, So 68 00:04:13,440 --> 00:04:16,640 Speaker 1: we all have to do our part, and even while 69 00:04:16,760 --> 00:04:20,560 Speaker 1: we are being vaccinated piece by piece, you know, population 70 00:04:20,839 --> 00:04:25,680 Speaker 1: type by population type, until we are all vaccinated effectively, 71 00:04:25,760 --> 00:04:28,800 Speaker 1: we won't have herd immunity, which means we do need 72 00:04:28,839 --> 00:04:32,520 Speaker 1: to wear masks, we do need to uh physically separate, 73 00:04:32,600 --> 00:04:35,800 Speaker 1: and these measures will go on and on until we 74 00:04:35,839 --> 00:04:40,600 Speaker 1: are safe literally from each other. At this point, Dr Dooan, 75 00:04:41,000 --> 00:04:43,520 Speaker 1: would you feel comfortable if you had vaccine going out 76 00:04:43,560 --> 00:04:45,839 Speaker 1: in company or would you still be worried that you 77 00:04:45,920 --> 00:04:49,400 Speaker 1: might be able to pass it on? So I I 78 00:04:49,480 --> 00:04:52,040 Speaker 1: plan if if I am able to get the vaccine, 79 00:04:52,080 --> 00:04:55,680 Speaker 1: I plan to take the vaccine. I plan to vaccinate 80 00:04:55,720 --> 00:04:59,599 Speaker 1: all of our medical teams and immunocompromised and elderly patients, 81 00:05:00,040 --> 00:05:02,200 Speaker 1: and I will hope that as doing in doing so, 82 00:05:02,360 --> 00:05:05,840 Speaker 1: we are doing our part to protect our communities, and 83 00:05:06,160 --> 00:05:09,120 Speaker 1: that's exactly our plan forward. Sorry, should be a little 84 00:05:09,360 --> 00:05:11,480 Speaker 1: more clear. What I meant was, would you be worried 85 00:05:11,480 --> 00:05:17,960 Speaker 1: that you could still be passing on the virus? Well, well, 86 00:05:18,040 --> 00:05:21,680 Speaker 1: so there are two vaccines that are required. The first 87 00:05:21,760 --> 00:05:26,320 Speaker 1: dose is reportedly effective, but you want a second dose. 88 00:05:26,760 --> 00:05:31,560 Speaker 1: But yes, I would continue to physically separate and wear 89 00:05:31,600 --> 00:05:35,720 Speaker 1: a mask. Not so much because I am worried about 90 00:05:35,839 --> 00:05:39,360 Speaker 1: me transmitting though of course every vaccine takes time, as 91 00:05:39,400 --> 00:05:42,320 Speaker 1: you know, to ramp up and build the immunity, but 92 00:05:42,400 --> 00:05:46,800 Speaker 1: additionally because others around me are not yet vaccinated, and 93 00:05:46,839 --> 00:05:50,720 Speaker 1: if I am carrying during that period of of immunity building, 94 00:05:50,760 --> 00:05:53,800 Speaker 1: I don't want to infect them. Dr Rene Do, thank 95 00:05:53,839 --> 00:05:56,839 Speaker 1: you so much. We really appreciate your thoughts and your expertise. 96 00:05:56,920 --> 00:05:59,880 Speaker 1: Dr Rene Do a founder and chief medical officer of 97 00:06:00,120 --> 00:06:02,760 Speaker 1: Hell joining us on the phone from Los Angeles, giving 98 00:06:02,800 --> 00:06:06,160 Speaker 1: us the latest on these vaccines which are just beginning 99 00:06:06,320 --> 00:06:09,000 Speaker 1: to roll out across the US. We're waiting for modarren 100 00:06:09,000 --> 00:06:12,039 Speaker 1: and later this week to receive it's FDA approval UH 101 00:06:12,080 --> 00:06:15,359 Speaker 1: and that can join the Visor vaccine in the marketplace. 102 00:06:15,400 --> 00:06:20,400 Speaker 1: As we build this vaccination population well, we got some 103 00:06:20,440 --> 00:06:24,640 Speaker 1: weaker than expected retail sales this morning, suggesting once again 104 00:06:24,800 --> 00:06:27,600 Speaker 1: that there is a lot of stress in the economy, 105 00:06:27,640 --> 00:06:30,120 Speaker 1: particularly with the consumer of the question is what can 106 00:06:30,520 --> 00:06:32,640 Speaker 1: the folks in Congress do? What can the Federal Reserve? 107 00:06:32,720 --> 00:06:36,239 Speaker 1: Dude kind of ease the pain. Danielle di Martino Booth 108 00:06:36,480 --> 00:06:40,120 Speaker 1: CEO and Director of Intelligence at Quill Intelligence, also a 109 00:06:40,120 --> 00:06:44,680 Speaker 1: former advisor at the Dallas Federal Reserve, any Bloomberg opinion contributor. 110 00:06:44,920 --> 00:06:47,760 Speaker 1: Also she's the author of a book entitled fed Up, 111 00:06:47,920 --> 00:06:51,040 Speaker 1: an insiders take on why the Federal Reserve is bad 112 00:06:51,160 --> 00:06:54,039 Speaker 1: for America? What do you expect, Danielle, thank you so 113 00:06:54,080 --> 00:06:56,120 Speaker 1: much for joining us. What do you expect this Federal 114 00:06:56,200 --> 00:06:59,400 Speaker 1: Reserve which is bad for America? As per your book? 115 00:06:59,400 --> 00:07:01,600 Speaker 1: What do you expect to hear from the Fed chairman 116 00:07:01,720 --> 00:07:05,800 Speaker 1: of this afternoon? Well, it'll be interesting to see what 117 00:07:05,839 --> 00:07:08,280 Speaker 1: he has to say. I think he's finally going to 118 00:07:08,360 --> 00:07:11,679 Speaker 1: get the stimulus that he wants. I I I suspect 119 00:07:11,720 --> 00:07:14,280 Speaker 1: that it's not near the price tag that he was 120 00:07:14,320 --> 00:07:17,400 Speaker 1: hoping for. Uh. You know that the Fed wants to 121 00:07:17,440 --> 00:07:23,280 Speaker 1: commit to capping longer maturity treasury yield, and it wants 122 00:07:23,320 --> 00:07:26,640 Speaker 1: to buy longer maturity treasuries to hold those prices down, 123 00:07:27,000 --> 00:07:29,720 Speaker 1: but those those yields won't seem to come up enough 124 00:07:29,760 --> 00:07:33,400 Speaker 1: for them to to launch yield curve control um. So 125 00:07:33,480 --> 00:07:36,280 Speaker 1: Bloomberg's I I Red Jersey did some fantastic work. I 126 00:07:36,280 --> 00:07:39,400 Speaker 1: hope everybody thought on what some of the possibilities would 127 00:07:39,400 --> 00:07:41,840 Speaker 1: be in terms of just the numb the amount of 128 00:07:41,880 --> 00:07:44,240 Speaker 1: bonds that that the FED can buy if they were to, 129 00:07:44,640 --> 00:07:46,760 Speaker 1: if they were to buy the entire Tips market, which 130 00:07:46,760 --> 00:07:48,600 Speaker 1: would be crazy, it would destroy the structure of the 131 00:07:48,640 --> 00:07:51,680 Speaker 1: kIPS market. There's nearly seven hundred billion more that they 132 00:07:51,720 --> 00:07:53,920 Speaker 1: could buy there. You know that that would continue to 133 00:07:53,920 --> 00:07:56,520 Speaker 1: pump up the inflation narrative. Or they could go from 134 00:07:56,760 --> 00:07:59,360 Speaker 1: you know the seven to twenty area on the yield 135 00:07:59,400 --> 00:08:02,520 Speaker 1: curve in terms of treasury maturities, and that there's another 136 00:08:02,560 --> 00:08:06,080 Speaker 1: seven hundred billions they can buy there. But again, I 137 00:08:06,360 --> 00:08:08,440 Speaker 1: think what the Fed wants more than anything else, And 138 00:08:08,480 --> 00:08:10,520 Speaker 1: we'll be looking to Janet yell and to see if 139 00:08:10,560 --> 00:08:14,200 Speaker 1: she doesn't push this is is the supply of longer 140 00:08:14,200 --> 00:08:18,800 Speaker 1: maturity treasuries itself to increase because those buckets are relatively small. 141 00:08:20,040 --> 00:08:23,120 Speaker 1: What happens if we get stimulus, but it's nine billion 142 00:08:23,240 --> 00:08:27,560 Speaker 1: or below, so less than the you know, the trillions 143 00:08:27,600 --> 00:08:30,920 Speaker 1: that Democrats wanted, but also you know, not enough for 144 00:08:31,120 --> 00:08:35,280 Speaker 1: states to to get some of the pie. Well, and 145 00:08:35,320 --> 00:08:37,960 Speaker 1: I think I think you hit the nail on the head. 146 00:08:38,000 --> 00:08:41,079 Speaker 1: They're vunny because you've seen all of these job cut 147 00:08:41,120 --> 00:08:44,400 Speaker 1: announcement announcements come out of whether it's Washington, d C. 148 00:08:44,640 --> 00:08:48,800 Speaker 1: Or San Francisco or New York around their transportation authorities. Uh. 149 00:08:48,840 --> 00:08:51,040 Speaker 1: And that's just going to make a bad problem worse 150 00:08:51,080 --> 00:08:52,800 Speaker 1: if you think about it, because so many of the 151 00:08:52,840 --> 00:08:56,280 Speaker 1: lower income workers who can't work from home are going 152 00:08:56,320 --> 00:08:59,960 Speaker 1: to have the means by which they transport themselves to work, 153 00:09:00,600 --> 00:09:03,520 Speaker 1: uh cut that much more. So. You know, the Republicans 154 00:09:03,559 --> 00:09:06,880 Speaker 1: have been very articulate in saying this is not a 155 00:09:06,960 --> 00:09:10,800 Speaker 1: stimulus package. We anticipate that the economy is going to 156 00:09:11,040 --> 00:09:15,880 Speaker 1: accelerate because of the vaccine being distributed throughout throughout the country. 157 00:09:16,040 --> 00:09:19,200 Speaker 1: So this is not stimulus, this is just pure relief. Well, 158 00:09:19,280 --> 00:09:22,800 Speaker 1: you know, this is also a foot race between now 159 00:09:22,920 --> 00:09:26,319 Speaker 1: and then and the damage that's going to be inflicted 160 00:09:26,320 --> 00:09:30,160 Speaker 1: on the economy because of this spike in hospitalizations and fatality. 161 00:09:30,679 --> 00:09:35,480 Speaker 1: The question becomes one of is their stimulus necessary the 162 00:09:35,520 --> 00:09:38,520 Speaker 1: minute Joe Biden takes office. Yeah, that's kind of where 163 00:09:38,520 --> 00:09:40,800 Speaker 1: I wanted to go, Danielle. What do you think it's 164 00:09:40,840 --> 00:09:42,920 Speaker 1: got to be presumably on the top of us to 165 00:09:42,960 --> 00:09:46,240 Speaker 1: do to do list for those first one days. What 166 00:09:46,240 --> 00:09:49,200 Speaker 1: do we know about Joe Biden his administration kind of 167 00:09:49,200 --> 00:09:53,240 Speaker 1: what they're thinking about in terms of fiscal stimulus. Well, 168 00:09:53,280 --> 00:09:56,920 Speaker 1: I certainly think that they would be huge advocates for 169 00:09:57,000 --> 00:10:00,840 Speaker 1: getting as much aid to states and locality as possible. 170 00:10:01,280 --> 00:10:04,880 Speaker 1: And you know, if I'm an a Biden administration, it's 171 00:10:04,920 --> 00:10:07,800 Speaker 1: difficult to do any planning, just as if just as 172 00:10:07,840 --> 00:10:10,800 Speaker 1: it's difficult for most of us to plan out whether 173 00:10:10,880 --> 00:10:13,360 Speaker 1: or not inflation or is coming or not because of 174 00:10:13,440 --> 00:10:17,400 Speaker 1: these two senatorial runoff elections in Georgia. And that's how 175 00:10:17,440 --> 00:10:20,480 Speaker 1: critical they've become. They will be the determinant of the 176 00:10:20,600 --> 00:10:24,320 Speaker 1: size of the next stimulus package and it's composition and 177 00:10:24,360 --> 00:10:30,000 Speaker 1: how aggressive it can be. Yeah, it's a it's it's 178 00:10:30,000 --> 00:10:32,280 Speaker 1: going to be a difficult winter, Danniel. What do you 179 00:10:32,320 --> 00:10:34,520 Speaker 1: think is priced into this market given that we've only 180 00:10:34,559 --> 00:10:40,000 Speaker 1: gone up or sideways, we've barely gone down since mart Well, 181 00:10:40,040 --> 00:10:43,280 Speaker 1: I think the market is is certainly pricing in a 182 00:10:43,960 --> 00:10:48,440 Speaker 1: best case scenario in terms of the the economy being 183 00:10:48,600 --> 00:10:52,320 Speaker 1: fully reopened by the time spring rolls around. That is 184 00:10:52,920 --> 00:10:56,600 Speaker 1: where I feel these markets are priced. For a friend 185 00:10:56,600 --> 00:11:00,160 Speaker 1: of mine, PHILLIPA Done, did some fabulous work looking at 186 00:11:00,160 --> 00:11:03,760 Speaker 1: the Schiller Cape price to earnings, the longer term price 187 00:11:03,800 --> 00:11:08,000 Speaker 1: to earnings ratio on the SMP back and right now 188 00:11:08,040 --> 00:11:12,440 Speaker 1: stocks are trading in the percentile historically. So you know, 189 00:11:12,600 --> 00:11:14,800 Speaker 1: I have to say that that that the stock market 190 00:11:14,880 --> 00:11:18,400 Speaker 1: right now is priced such that we are a fully 191 00:11:18,400 --> 00:11:23,840 Speaker 1: open economy in the headed into Q two. Um Daniel, 192 00:11:23,880 --> 00:11:28,520 Speaker 1: what do you think of Janet Yellen as a Secretary Treasury. Well, 193 00:11:28,800 --> 00:11:32,079 Speaker 1: you know, I've been openly critical of Janet Yellen because 194 00:11:32,559 --> 00:11:37,240 Speaker 1: in in higher testimonies, in statement she has she has 195 00:11:37,360 --> 00:11:40,200 Speaker 1: spoken to the fact that she didn't really understand the 196 00:11:40,440 --> 00:11:44,000 Speaker 1: makeup the structure of the financial system and did not 197 00:11:44,160 --> 00:11:47,560 Speaker 1: see the crisis coming as we were headed into the 198 00:11:47,640 --> 00:11:51,360 Speaker 1: last crisis. Uh. You know, she's a labor economist by training, 199 00:11:52,040 --> 00:11:55,600 Speaker 1: and I have my I have my my doubts as 200 00:11:55,600 --> 00:11:59,480 Speaker 1: to whether when the repo overnight repo crisis cropped up 201 00:11:59,840 --> 00:12:01,679 Speaker 1: at the end of last year when that was what 202 00:12:01,720 --> 00:12:05,199 Speaker 1: we were talking about. I don't know how well equipped 203 00:12:05,240 --> 00:12:09,679 Speaker 1: she is because of her background and I should say 204 00:12:09,720 --> 00:12:12,400 Speaker 1: lack of background in the financial markets in being able 205 00:12:12,440 --> 00:12:15,320 Speaker 1: to tackle something like that, especially because you have another 206 00:12:15,440 --> 00:12:18,800 Speaker 1: pure academic running the New York Fed, John Williams. So 207 00:12:19,160 --> 00:12:22,560 Speaker 1: I think somebody who was savvier to the structure of 208 00:12:22,600 --> 00:12:25,720 Speaker 1: the markets, the plumbing of the financial system which we've 209 00:12:25,760 --> 00:12:28,720 Speaker 1: we've discovered is so critical to the execution of quantitative 210 00:12:28,720 --> 00:12:32,520 Speaker 1: easing or quantitative tightening and the ability for the normalized 211 00:12:32,559 --> 00:12:35,480 Speaker 1: monetary policy. I would have preferred to have seen somebody 212 00:12:35,760 --> 00:12:38,720 Speaker 1: who was much more familiar with the makeup of the markets. 213 00:12:38,720 --> 00:12:42,679 Speaker 1: But of course my opinion doesn't count because most of 214 00:12:43,080 --> 00:12:45,400 Speaker 1: most of the political world knows that she will be 215 00:12:45,480 --> 00:12:49,280 Speaker 1: able to cross that aisle. Well, there's also Chris Waller, 216 00:12:49,360 --> 00:12:52,319 Speaker 1: who has not gotten through sanergy yet. So this particular 217 00:12:52,360 --> 00:12:55,400 Speaker 1: meeting goes ahead without two governors as a vacancy to 218 00:12:55,440 --> 00:12:58,520 Speaker 1: and Chris Waller, and uh, well see if that gets 219 00:12:58,559 --> 00:13:02,200 Speaker 1: resolved as well next year. Um, Danielle, I presume you 220 00:13:02,200 --> 00:13:04,040 Speaker 1: know a FED without all of its governors is not 221 00:13:04,080 --> 00:13:08,040 Speaker 1: a fully functioning FED either. Well, you do want to 222 00:13:08,120 --> 00:13:13,200 Speaker 1: have all of the voices around that table. I would say, Vannie, though, 223 00:13:13,360 --> 00:13:16,800 Speaker 1: that the leadership structure, those at the very top of 224 00:13:16,800 --> 00:13:19,960 Speaker 1: the FED right now are extremely familiar with one another, 225 00:13:20,440 --> 00:13:24,840 Speaker 1: so I wouldn't I'm not too I'm not too particularly 226 00:13:24,840 --> 00:13:27,080 Speaker 1: worried about that. One thing I would watch out for 227 00:13:27,520 --> 00:13:31,240 Speaker 1: with today's meeting, in particular, is that we forget the 228 00:13:31,360 --> 00:13:34,080 Speaker 1: last time that FED had Quie running, that they put 229 00:13:34,320 --> 00:13:37,680 Speaker 1: unemployment rate targets out there, and they had to continuously 230 00:13:37,760 --> 00:13:40,480 Speaker 1: move the goal post down further and further because they 231 00:13:40,480 --> 00:13:43,760 Speaker 1: realized the markets could not be weaned off of que. 232 00:13:44,520 --> 00:13:47,319 Speaker 1: In fact, at the time, J Powell himself said that 233 00:13:47,400 --> 00:13:49,959 Speaker 1: Quie had become habits forming to to the market. I 234 00:13:50,000 --> 00:13:52,280 Speaker 1: wouldn't be surprised if they tried to put another target 235 00:13:52,280 --> 00:13:54,800 Speaker 1: out there, like the unemployment rate today that we that 236 00:13:54,840 --> 00:13:58,079 Speaker 1: we didn't see some dissenting voices there on that committee. 237 00:13:59,360 --> 00:14:02,400 Speaker 1: Danielle's thank you for that. Always some sobering advice there 238 00:14:02,440 --> 00:14:05,520 Speaker 1: from daniel D. Martino, Booth CEO and Director of Intelligence 239 00:14:05,520 --> 00:14:11,600 Speaker 1: at Quill Intelligence, coming to us from Dallas, Texas. Well, 240 00:14:11,640 --> 00:14:14,200 Speaker 1: we've been talking about the consumer whole year, really, but 241 00:14:14,720 --> 00:14:17,640 Speaker 1: this morning we got retail sales data that we're a 242 00:14:17,760 --> 00:14:21,840 Speaker 1: little bit less positive than we were anticipating so advanced 243 00:14:21,840 --> 00:14:24,080 Speaker 1: month of a month, they were down one point one percent. 244 00:14:24,360 --> 00:14:26,120 Speaker 1: Economists were looking for them to be just down point 245 00:14:26,160 --> 00:14:28,680 Speaker 1: three percent. The control group was down a half a percent. 246 00:14:29,000 --> 00:14:31,800 Speaker 1: Economist were looking for that to be positive. Let's bring 247 00:14:31,800 --> 00:14:36,760 Speaker 1: in somebody who handles consumers money their cash, and through 248 00:14:36,880 --> 00:14:40,280 Speaker 1: his bank allows them to keep that cash on deposit 249 00:14:40,400 --> 00:14:42,960 Speaker 1: if they wish. Brendan Coughland is head of consumer banking 250 00:14:43,000 --> 00:14:45,840 Speaker 1: at Citizens Bank, and he's coming to us from Providence, 251 00:14:45,920 --> 00:14:48,880 Speaker 1: Rhode Island today. So, Brendan, what have you seen with 252 00:14:49,000 --> 00:14:51,400 Speaker 1: the amount of savings in your bank right now and 253 00:14:51,480 --> 00:14:56,000 Speaker 1: whether it's increasing or decreasing. Yeah, we've seen very healthy 254 00:14:56,040 --> 00:14:59,360 Speaker 1: savings by the consumer. Uh. We're certainly not out of 255 00:14:59,400 --> 00:15:02,280 Speaker 1: the woods yet with the economy, and Q one is 256 00:15:02,560 --> 00:15:05,600 Speaker 1: certainly going to be a bit rough until the economy 257 00:15:05,640 --> 00:15:09,400 Speaker 1: fully reopens. But the consumer has been very resilient through 258 00:15:09,440 --> 00:15:12,520 Speaker 1: all this. In fact, much better than expected. Savings are 259 00:15:12,520 --> 00:15:16,320 Speaker 1: really piling up through stimulus and with the economy shutting 260 00:15:16,320 --> 00:15:19,240 Speaker 1: down in general, spending as you as you teased, and 261 00:15:19,280 --> 00:15:21,880 Speaker 1: the open has been a little off. Having said that, 262 00:15:22,520 --> 00:15:25,640 Speaker 1: what we're seeing is a real recovery on both credit 263 00:15:25,640 --> 00:15:29,240 Speaker 1: card spending and debit cards spending. So debit cards spending 264 00:15:29,640 --> 00:15:32,760 Speaker 1: is actually up about fifteen percent right now year or 265 00:15:32,760 --> 00:15:35,760 Speaker 1: a year on a dollar basis, and flatish on units. 266 00:15:35,760 --> 00:15:38,200 Speaker 1: So customers aren't going to the grocery store two times 267 00:15:38,240 --> 00:15:41,880 Speaker 1: a week, they're consolidating that into one one trip, and 268 00:15:41,880 --> 00:15:44,320 Speaker 1: they're spending a little bit more. And credit cards have 269 00:15:44,480 --> 00:15:46,800 Speaker 1: actually come all the way back up to slightly positive 270 00:15:46,840 --> 00:15:50,040 Speaker 1: year over year, So we're seeing consumer confidence come back 271 00:15:50,080 --> 00:15:52,640 Speaker 1: a little bit in their behaviors around spending, which is 272 00:15:52,640 --> 00:15:55,120 Speaker 1: certainly a good sign. Brendon, what are you seeing in 273 00:15:55,200 --> 00:15:58,920 Speaker 1: terms of credit quality out there right now? Yeah, I 274 00:15:59,240 --> 00:16:02,240 Speaker 1: have been, isn't lea surprised non credit quality And as 275 00:16:02,240 --> 00:16:04,680 Speaker 1: I said a second ago, we're certainly not out of 276 00:16:04,680 --> 00:16:09,080 Speaker 1: the woods yet, but we um we do have very 277 00:16:09,080 --> 00:16:12,280 Speaker 1: positive indicators on a relative basis on credit. So at 278 00:16:12,400 --> 00:16:16,200 Speaker 1: its worst, we had eight percent of our portfolio in forbearance, 279 00:16:16,240 --> 00:16:19,120 Speaker 1: which means uh, the customers taking a break from making 280 00:16:19,120 --> 00:16:22,680 Speaker 1: their payments. That has geared down to about one point 281 00:16:22,840 --> 00:16:26,200 Speaker 1: five percent, so the vast majority of customers have left 282 00:16:26,240 --> 00:16:29,880 Speaker 1: forbearance status. At the same time, our delinquency rates have 283 00:16:29,880 --> 00:16:32,880 Speaker 1: actually gone down, not up, and so as these customers 284 00:16:32,880 --> 00:16:36,280 Speaker 1: have migrated back into repayment, the vast, vast majority are 285 00:16:36,360 --> 00:16:39,680 Speaker 1: landing on their feet, which is a very very good fine. 286 00:16:39,760 --> 00:16:42,280 Speaker 1: So the remainder of customers are going to transition off 287 00:16:42,680 --> 00:16:45,560 Speaker 1: through December and into January. So we'll have to help 288 00:16:45,600 --> 00:16:48,640 Speaker 1: them make sure the remainder land on their feet. And certainly, uh, 289 00:16:48,760 --> 00:16:51,640 Speaker 1: some of the stimulus talks out there could really help 290 00:16:52,000 --> 00:16:55,240 Speaker 1: make sure that's the case. What kind of loans are 291 00:16:55,320 --> 00:16:58,560 Speaker 1: being asked for brendon Our companies that are looking for 292 00:16:58,640 --> 00:17:01,880 Speaker 1: you know, fresh or extend the lines of credits, still 293 00:17:02,000 --> 00:17:04,399 Speaker 1: doing that, or you know, have they decided to just 294 00:17:04,600 --> 00:17:09,520 Speaker 1: close their business and mortgages. Yeah, so um um. On 295 00:17:09,560 --> 00:17:12,240 Speaker 1: the commercial side of the bank and with our small businesses, 296 00:17:12,320 --> 00:17:15,120 Speaker 1: certainly we saw a lot of them draw down at 297 00:17:15,160 --> 00:17:18,119 Speaker 1: the height of the anxiety in April and May a 298 00:17:18,160 --> 00:17:20,479 Speaker 1: lot of that has gone back away. Liquidity is very 299 00:17:20,520 --> 00:17:23,280 Speaker 1: strong with our businesses, both in the mid corporate and 300 00:17:23,440 --> 00:17:26,480 Speaker 1: small business space. Um so that's kind of coming back 301 00:17:26,520 --> 00:17:30,960 Speaker 1: to normal. We on the consumer side, we've seen actually 302 00:17:30,960 --> 00:17:34,600 Speaker 1: pretty significant loan demand this year, and it's really led 303 00:17:35,119 --> 00:17:37,960 Speaker 1: by two spots. Of course, mortgage is booming. We're having 304 00:17:38,320 --> 00:17:41,720 Speaker 1: a stellar year in UH in mortgages. The market could 305 00:17:41,760 --> 00:17:45,119 Speaker 1: hit four trillion this year in mortgage originations, which is 306 00:17:45,280 --> 00:17:48,760 Speaker 1: incredibly high, probably the largest year on record for mortgage 307 00:17:48,800 --> 00:17:52,400 Speaker 1: originations just given the speed of rate drop that happened. 308 00:17:52,440 --> 00:17:55,720 Speaker 1: And citizens is doing quite well UM in in the 309 00:17:55,760 --> 00:17:59,159 Speaker 1: mortgage space taking market share. We're we we will potentially 310 00:17:59,160 --> 00:18:02,600 Speaker 1: get close to fifth billion in mortgage originations UH this year, 311 00:18:02,640 --> 00:18:04,760 Speaker 1: so very very strong year. The other product that has 312 00:18:04,800 --> 00:18:08,080 Speaker 1: stimulated a ton of demand is student loan refinancing. As 313 00:18:08,200 --> 00:18:11,119 Speaker 1: rates drop, a lot more customers have been placed in 314 00:18:11,160 --> 00:18:13,240 Speaker 1: the money, if you will, so there the rates offered 315 00:18:13,240 --> 00:18:15,760 Speaker 1: today are much better than what they have today, and 316 00:18:15,760 --> 00:18:18,879 Speaker 1: they're refinancing and restructuring their debt for payment savings, and 317 00:18:18,880 --> 00:18:21,840 Speaker 1: of course, refinancing your student loan debt or your mortgage 318 00:18:21,880 --> 00:18:24,040 Speaker 1: is in some ways a form of stimulus for the 319 00:18:24,040 --> 00:18:26,680 Speaker 1: customer to put extra money in their pockets every month 320 00:18:26,880 --> 00:18:29,080 Speaker 1: and be able to help stimulate more spending and some 321 00:18:29,119 --> 00:18:32,680 Speaker 1: of the savings that we've seen customers accelerate. Brendon talk 322 00:18:32,680 --> 00:18:35,639 Speaker 1: to us about digital banking. I for one, has really 323 00:18:35,720 --> 00:18:39,640 Speaker 1: ramped up my digital banking game during this pandemic. I'm 324 00:18:39,640 --> 00:18:42,840 Speaker 1: suspecting other people have as well. Do you expect that 325 00:18:42,880 --> 00:18:45,920 Speaker 1: to be a big trend going forward? Yeah, I do. 326 00:18:46,280 --> 00:18:49,280 Speaker 1: Digital banking has been a trend that's been increasing for 327 00:18:50,080 --> 00:18:53,280 Speaker 1: some time now, and this UH, the COVID period has 328 00:18:53,480 --> 00:18:58,680 Speaker 1: has massively accelerated UM digital banking activities. So our digital 329 00:18:58,720 --> 00:19:03,760 Speaker 1: metrics are up over and a relatively short period of time, 330 00:19:04,200 --> 00:19:07,720 Speaker 1: our brick and mortar banking is down about the same 331 00:19:07,760 --> 00:19:10,920 Speaker 1: amount UH and and so what we're seeing is that 332 00:19:11,040 --> 00:19:15,199 Speaker 1: customers are engaging with the digital UM mobile app to 333 00:19:15,240 --> 00:19:18,640 Speaker 1: do their transactional banking much more frequently. They still want 334 00:19:18,640 --> 00:19:21,320 Speaker 1: to talk to humans when they have a big life event, 335 00:19:21,359 --> 00:19:23,600 Speaker 1: when they want to talk about retirement or their mortgage. 336 00:19:23,600 --> 00:19:26,320 Speaker 1: So it's very very important our brick and mortar strategy 337 00:19:26,320 --> 00:19:28,960 Speaker 1: and our human interactions will be foundational to our our 338 00:19:29,000 --> 00:19:32,080 Speaker 1: strategy and the industry going forward. But digital banking is 339 00:19:32,080 --> 00:19:34,439 Speaker 1: accelerating at quite a clip, which which poses a lot 340 00:19:34,480 --> 00:19:36,800 Speaker 1: of questions for retail banks. What should be the size 341 00:19:36,800 --> 00:19:39,240 Speaker 1: of your brick and mortar network? UM, You know, do 342 00:19:39,240 --> 00:19:41,440 Speaker 1: you have to upscale your colleagues to have them step 343 00:19:41,520 --> 00:19:44,560 Speaker 1: up to more advice based banking versus transactional banking is 344 00:19:44,600 --> 00:19:48,200 Speaker 1: all that moves to a self serve model. Wow, Brandon, 345 00:19:48,240 --> 00:19:50,880 Speaker 1: thanks so much for journeyings. We appreciate it. Brendan Coughlin, 346 00:19:51,119 --> 00:19:53,880 Speaker 1: head of consumer banking for Citizens Bank. It is based 347 00:19:53,880 --> 00:19:57,040 Speaker 1: in Providence Road Island, giving us a sense of that growth, 348 00:19:57,119 --> 00:20:00,040 Speaker 1: Vonny in The shift to from bricks and mortars to 349 00:20:00,119 --> 00:20:02,400 Speaker 1: digital is just a fascinating and it seems like it's 350 00:20:02,400 --> 00:20:05,640 Speaker 1: going to be long term for sure, and it's going 351 00:20:05,680 --> 00:20:07,160 Speaker 1: to be interesting to see what happens to all those 352 00:20:07,280 --> 00:20:10,280 Speaker 1: hs BC branches that are closing down. Will other banks 353 00:20:10,280 --> 00:20:12,360 Speaker 1: make a bid? But you know, will there be any need? 354 00:20:12,400 --> 00:20:14,440 Speaker 1: If there's going to be such a shift from big 355 00:20:14,440 --> 00:20:16,440 Speaker 1: and mortar to digital, what's what will become of that? 356 00:20:16,840 --> 00:20:20,160 Speaker 1: Realist exactly? I know, Just again speaking for myself, I've 357 00:20:20,160 --> 00:20:22,479 Speaker 1: stepped up and done a lot more digital banking more 358 00:20:22,520 --> 00:20:27,359 Speaker 1: than I did pre pandemic. Well, big in the US 359 00:20:27,440 --> 00:20:31,800 Speaker 1: technology companies think Amazon, Apple, Google, Facebook, they've been facing 360 00:20:31,880 --> 00:20:34,800 Speaker 1: much higher levels of regulatory scrutiny. Here in the US. 361 00:20:34,840 --> 00:20:37,080 Speaker 1: We have the Federal Trade Commission, the Department of Justice 362 00:20:37,359 --> 00:20:40,240 Speaker 1: looking at those big tech names. Now that European Union 363 00:20:40,800 --> 00:20:43,760 Speaker 1: it wants new powers to curb tech companies dominance. To 364 00:20:43,800 --> 00:20:45,760 Speaker 1: get some more color on this, we welcome Alex web 365 00:20:46,160 --> 00:20:49,520 Speaker 1: European technology and media columns for Bloomberg Opinion. He joins 366 00:20:49,600 --> 00:20:51,600 Speaker 1: us on the phone from London. Alex, thanks so much 367 00:20:51,640 --> 00:20:54,320 Speaker 1: for joining us here. That the European Union has long 368 00:20:54,560 --> 00:20:58,760 Speaker 1: had a history of tightly monitoring US technology companies. What 369 00:20:58,760 --> 00:21:00,439 Speaker 1: are they looking to do now for some of these 370 00:21:00,480 --> 00:21:05,480 Speaker 1: big tech giants. So there are two proposals to regulation 371 00:21:05,640 --> 00:21:08,520 Speaker 1: which are called spectively, the Digital Markets Act and the 372 00:21:08,520 --> 00:21:14,000 Speaker 1: Innitial Services Act. And one will classify big companies essentially 373 00:21:14,000 --> 00:21:16,840 Speaker 1: that there are ones you can think of um as 374 00:21:16,960 --> 00:21:20,480 Speaker 1: gatekeepers and will there then subject them to particular rules 375 00:21:20,520 --> 00:21:24,159 Speaker 1: which will make it harder to do some acquisitions and 376 00:21:24,320 --> 00:21:28,040 Speaker 1: protect smaller companies that operate on their platforms. And the 377 00:21:28,080 --> 00:21:31,919 Speaker 1: punishments that they can be imposed are fines of up 378 00:21:31,960 --> 00:21:35,240 Speaker 1: to ten percent of revenue and your revenue and in 379 00:21:35,280 --> 00:21:39,800 Speaker 1: the worst case scenario, forced divestments of businesses, which but 380 00:21:39,920 --> 00:21:43,480 Speaker 1: that it was a very extreme scenario. Letters, So it's 381 00:21:43,560 --> 00:21:46,439 Speaker 1: sort of coming added from all sides. If you like, 382 00:21:47,000 --> 00:21:49,399 Speaker 1: I mean it will be successful. How can the companies 383 00:21:49,440 --> 00:21:54,800 Speaker 1: block some of this from happening? Well, so Firstly, it's 384 00:21:54,800 --> 00:21:56,760 Speaker 1: gonna be passed. It's gonna be passed by the European 385 00:21:56,800 --> 00:22:00,960 Speaker 1: Parliament and the Council. That's likely to take about a year, 386 00:22:01,440 --> 00:22:03,119 Speaker 1: and then it will take another six months to come 387 00:22:03,160 --> 00:22:04,959 Speaker 1: to effect. There is going to be a huge lobbying 388 00:22:05,000 --> 00:22:08,359 Speaker 1: effort on the part of these companies. Um, it is 389 00:22:08,400 --> 00:22:11,440 Speaker 1: not a question of really blocking of the European Parliament 390 00:22:12,240 --> 00:22:15,679 Speaker 1: or the European Commission. It's a question of actually just 391 00:22:15,760 --> 00:22:18,680 Speaker 1: ensuring that you're buy by the rules and then the 392 00:22:18,720 --> 00:22:22,200 Speaker 1: europe then there will be no impetus to actually force 393 00:22:22,240 --> 00:22:24,800 Speaker 1: a breakup. You know, the way that these rules work 394 00:22:25,080 --> 00:22:28,320 Speaker 1: is that if you give a regulator the power to 395 00:22:28,359 --> 00:22:30,880 Speaker 1: break a company up in an ideal world, they don't 396 00:22:30,920 --> 00:22:34,440 Speaker 1: need to because the threat of the breakup is enough 397 00:22:34,520 --> 00:22:37,639 Speaker 1: to change company's behavior. And that is you know, we 398 00:22:37,720 --> 00:22:41,680 Speaker 1: have seen time and again instances of the big tech 399 00:22:41,760 --> 00:22:46,040 Speaker 1: companies pursuing seemingly anti competitive behavior. They're now being pursued 400 00:22:46,080 --> 00:22:47,760 Speaker 1: for that in the US as well as in Europe 401 00:22:47,760 --> 00:22:51,680 Speaker 1: and Australia and elsewhere. And this is just giving the 402 00:22:51,720 --> 00:22:57,159 Speaker 1: European Commission more power and more tools to punish the 403 00:22:57,200 --> 00:22:59,960 Speaker 1: companies when they overset the mark because clearly the deterr 404 00:23:00,040 --> 00:23:03,239 Speaker 1: and hasn't been adequate until now. So, Alex, I'm old 405 00:23:03,320 --> 00:23:06,600 Speaker 1: enough to remember the European Union really coming down on 406 00:23:06,720 --> 00:23:10,200 Speaker 1: Microsoft about twenty five years ago, and I think investors 407 00:23:10,280 --> 00:23:13,080 Speaker 1: learn from that that, you know, the European Union, it's 408 00:23:13,119 --> 00:23:15,320 Speaker 1: not that big a deal. It's a fine here, it's 409 00:23:15,359 --> 00:23:19,040 Speaker 1: a fine there. It's not that big a deal. Why 410 00:23:19,240 --> 00:23:21,760 Speaker 1: would this be any different. It just seems like the 411 00:23:21,800 --> 00:23:26,200 Speaker 1: European Union is doesn't have much power beyond just leveling 412 00:23:26,440 --> 00:23:30,360 Speaker 1: some fines. Well, I think that's exactly the problem, that 413 00:23:30,359 --> 00:23:36,080 Speaker 1: that previously they have concentrated UM on remedies, which are 414 00:23:36,359 --> 00:23:40,119 Speaker 1: as you say, finds, rather than behavioral remedies, which seek 415 00:23:40,160 --> 00:23:42,840 Speaker 1: to change the way the company's clus in the name behave, 416 00:23:43,440 --> 00:23:46,280 Speaker 1: and the US has leaning historically a lot more on 417 00:23:46,320 --> 00:23:50,800 Speaker 1: behavioral remedies of trying to change the way that those um, 418 00:23:50,840 --> 00:23:54,080 Speaker 1: those those companies go about their business. UM. Now, if 419 00:23:54,160 --> 00:23:57,639 Speaker 1: behavior remedies in extreme don't work, then you lean on 420 00:23:57,720 --> 00:24:00,959 Speaker 1: structural remedies where you can force companies to divest their 421 00:24:01,000 --> 00:24:05,760 Speaker 1: businesses and um that is something where the European Commission 422 00:24:06,119 --> 00:24:09,159 Speaker 1: has has been wary about taking actions in the past 423 00:24:09,480 --> 00:24:11,679 Speaker 1: that this gives them, in extreme cases, the power to 424 00:24:11,720 --> 00:24:15,159 Speaker 1: do it in the future. So the fine could now 425 00:24:15,200 --> 00:24:17,920 Speaker 1: be up to ten percent of revenue. Is that enough 426 00:24:17,920 --> 00:24:21,159 Speaker 1: of a deterrent for the likes of Amazon, Facebook, Apple, 427 00:24:21,920 --> 00:24:24,200 Speaker 1: I mean other finds They've been quite happy to pay 428 00:24:24,200 --> 00:24:26,280 Speaker 1: and carry on with their business. But would a ten 429 00:24:26,320 --> 00:24:30,040 Speaker 1: percent of revenue fine really dentist their balance street? So 430 00:24:30,160 --> 00:24:33,800 Speaker 1: we're just in of itself. Know, these companies average free 431 00:24:33,800 --> 00:24:40,439 Speaker 1: cash revenue each year. If um, they you know, break rules, 432 00:24:40,520 --> 00:24:43,600 Speaker 1: then they could place a one off fine center revenue 433 00:24:43,920 --> 00:24:48,640 Speaker 1: or um, you know, daily finds of revenue. And if 434 00:24:48,640 --> 00:24:54,159 Speaker 1: they continue to to break the rules, that's when the 435 00:24:54,160 --> 00:24:58,520 Speaker 1: Commission has said that they will consider forcing divestments of business. 436 00:24:58,640 --> 00:25:00,560 Speaker 1: And that's when it starts to get you know, there's 437 00:25:00,640 --> 00:25:04,640 Speaker 1: sort of the really start to get really serious essentially, 438 00:25:04,720 --> 00:25:08,000 Speaker 1: and that is something that inevitably these companies will want 439 00:25:08,040 --> 00:25:12,400 Speaker 1: to avoid. Alex you know, is there a sense across 440 00:25:12,560 --> 00:25:18,000 Speaker 1: Europe broadly defined, why there hasn't been more technology companies 441 00:25:18,560 --> 00:25:21,480 Speaker 1: uh kind of created across Europe? I mean, yes, we 442 00:25:21,520 --> 00:25:24,359 Speaker 1: have a couple of big big ones like SAP and 443 00:25:24,640 --> 00:25:27,359 Speaker 1: so on and ericson, but just generally speaking, why the 444 00:25:27,520 --> 00:25:33,680 Speaker 1: technology companies. Development across Europe has been not nearly anywhere 445 00:25:33,680 --> 00:25:35,960 Speaker 1: as it's been, say the United States, even in just 446 00:25:36,040 --> 00:25:40,800 Speaker 1: Silicon Valley. I mean it's a very simple reason. Really, 447 00:25:40,840 --> 00:25:42,600 Speaker 1: there are any number of big factors. You know, the 448 00:25:42,600 --> 00:25:45,360 Speaker 1: Silicon Valley of course has standard and you know, concentration, 449 00:25:45,400 --> 00:25:47,840 Speaker 1: eventual capital all usk the same. But also the US 450 00:25:48,119 --> 00:25:51,560 Speaker 1: has one single addressable market that speaks the same language. 451 00:25:51,600 --> 00:25:54,119 Speaker 1: You know, you can launch in the US and you 452 00:25:54,240 --> 00:25:58,959 Speaker 1: are immediately in front of three million people. Um In Europe, 453 00:25:59,040 --> 00:26:00,720 Speaker 1: you know, there are a bunch of different app stores 454 00:26:01,240 --> 00:26:04,200 Speaker 1: for Apple, there are a bunch of different languages that 455 00:26:04,240 --> 00:26:07,200 Speaker 1: are spoken. There are you know, as much as it's 456 00:26:07,400 --> 00:26:09,440 Speaker 1: theory a single market and practice it can be a 457 00:26:09,480 --> 00:26:12,280 Speaker 1: little bit more complicated than that gives American companies a 458 00:26:12,400 --> 00:26:15,000 Speaker 1: huge advantage. And the companies that have proved successful are 459 00:26:15,000 --> 00:26:17,600 Speaker 1: the ones from Europe that have scaled immediately into the US. 460 00:26:17,640 --> 00:26:21,040 Speaker 1: Think about Spotify, Swedish company now the biggest music streaming 461 00:26:21,080 --> 00:26:23,040 Speaker 1: company in the world. So that I think is the 462 00:26:23,080 --> 00:26:24,879 Speaker 1: singular answer that is part of the US for the 463 00:26:24,920 --> 00:26:28,280 Speaker 1: europe to compete. I'm sure the teams of lawyers at 464 00:26:28,280 --> 00:26:30,560 Speaker 1: all these big companies are looking at all of the 465 00:26:30,640 --> 00:26:34,280 Speaker 1: different options, including actually divesting parts of their business. Alex, 466 00:26:34,480 --> 00:26:37,760 Speaker 1: do you know about any of these discussions or any 467 00:26:37,840 --> 00:26:39,719 Speaker 1: of the parts of any of the businesses that might 468 00:26:39,800 --> 00:26:44,359 Speaker 1: be up for discussion. Well, it's it's unlikely that these 469 00:26:44,400 --> 00:26:47,240 Speaker 1: companies going to voluntarily divest businesses. There was a report 470 00:26:47,280 --> 00:26:49,760 Speaker 1: in the Journal earlier this year that there had been 471 00:26:49,840 --> 00:26:53,960 Speaker 1: discussions at Google informally about perhaps selling part of their 472 00:26:54,000 --> 00:26:58,560 Speaker 1: advertising businesses, business that places ads on third party websites 473 00:26:59,040 --> 00:27:01,280 Speaker 1: that you know, would maybe addressed some of the concerns 474 00:27:01,280 --> 00:27:03,920 Speaker 1: about an acquisition that Google did more than a decade ago, 475 00:27:04,240 --> 00:27:07,479 Speaker 1: which beefed up that business and in hindsight looks as 476 00:27:07,520 --> 00:27:11,199 Speaker 1: though it probably shouldn't have been passed. Um doesn't look 477 00:27:11,200 --> 00:27:13,720 Speaker 1: as they Facebook is they're going to sell voluntarily? What's 478 00:27:13,760 --> 00:27:17,960 Speaker 1: that for Instagram? Absolutely not, But there maybe are things 479 00:27:18,040 --> 00:27:20,560 Speaker 1: around the edges which as a sign of good will 480 00:27:20,720 --> 00:27:25,280 Speaker 1: or to take defang some of the plan incended to 481 00:27:25,400 --> 00:27:29,280 Speaker 1: defang some of the attacks room from regulators, that might 482 00:27:29,320 --> 00:27:34,080 Speaker 1: be feasible, but nothing significant. So just real quickly, is 483 00:27:34,119 --> 00:27:38,160 Speaker 1: there an expectation that this will pass? Alex, Yes, absolutely, 484 00:27:38,240 --> 00:27:42,639 Speaker 1: there's huge political will behind this In Europe. Opposition perhaps 485 00:27:42,640 --> 00:27:46,080 Speaker 1: some Ireland, unsurprisingly given that a lot of these companies 486 00:27:46,080 --> 00:27:49,720 Speaker 1: have their European HQs there. But broadly speaking, um, this 487 00:27:49,960 --> 00:27:52,080 Speaker 1: is something that you know there might be changes, and 488 00:27:52,080 --> 00:27:53,720 Speaker 1: there will be changed with the course the next year, 489 00:27:54,119 --> 00:27:57,159 Speaker 1: but the trust of it looks like it will get 490 00:27:57,200 --> 00:27:59,520 Speaker 1: through European Parliament and of course, as we know, the 491 00:27:59,560 --> 00:28:02,560 Speaker 1: European Union and I TRUST chief Margareta Vestiga is well 492 00:28:02,760 --> 00:28:04,960 Speaker 1: versed in all of this language and well well able 493 00:28:05,000 --> 00:28:07,560 Speaker 1: to take on these companies. Alex, thank you for all 494 00:28:07,640 --> 00:28:09,960 Speaker 1: was giving in touch with us on what's going on 495 00:28:10,119 --> 00:28:13,359 Speaker 1: with these major major Silicon Valley companies. Alex Web is 496 00:28:13,359 --> 00:28:17,560 Speaker 1: European technology and media columnist for Bloomberg Opinion. But of 497 00:28:17,640 --> 00:28:19,320 Speaker 1: course a lot of that has to do with the 498 00:28:19,440 --> 00:28:22,520 Speaker 1: big American companies as well. As he said, they're all 499 00:28:22,640 --> 00:28:25,920 Speaker 1: based in Europe to they've headquarters in Ireland and some 500 00:28:26,080 --> 00:28:29,640 Speaker 1: of them in other parts of Europe as well. Thanks 501 00:28:29,680 --> 00:28:32,920 Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and 502 00:28:33,040 --> 00:28:36,800 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 503 00:28:36,880 --> 00:28:40,280 Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn, 504 00:28:40,480 --> 00:28:42,800 Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 505 00:28:42,880 --> 00:28:45,560 Speaker 1: Before the podcast, you can always catch us worldwide at 506 00:28:45,600 --> 00:28:46,320 Speaker 1: Bloomberg Radio