1 00:00:05,800 --> 00:00:08,719 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Bramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:32,159 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. If 7 00:00:32,159 --> 00:00:34,239 Speaker 1: you thought the Brexit was over, you were wrong. We 8 00:00:34,320 --> 00:00:38,240 Speaker 1: actually got that vote yesterday against Theresa May, prime Minister 9 00:00:38,360 --> 00:00:42,840 Speaker 1: of the United Kingdom, against her plan for Brexit. Not surprising, however, 10 00:00:42,840 --> 00:00:47,040 Speaker 1: it was surprising the magnitude of her loss. Today she 11 00:00:47,080 --> 00:00:50,519 Speaker 1: faces a no confidence vote. The pound up against the 12 00:00:50,520 --> 00:00:52,760 Speaker 1: euro and the dollar. Go figure on that one. Joining 13 00:00:52,800 --> 00:00:55,400 Speaker 1: us now to explain what we should look for and 14 00:00:55,440 --> 00:00:57,840 Speaker 1: whether we're going to soon come out of this Brexit malaise. 15 00:00:58,040 --> 00:01:01,600 Speaker 1: Dr Sam nap President of em Are Global Ventures, joining 16 00:01:01,680 --> 00:01:05,640 Speaker 1: us here in our BLOOMBERGNNA Active Brokers Studios. So, Dr 17 00:01:05,680 --> 00:01:08,559 Speaker 1: and natapoff, what do you think will happen today? Well, 18 00:01:09,280 --> 00:01:12,600 Speaker 1: remember what happened yesterday, Prime Minister Theresa May suffered an 19 00:01:12,640 --> 00:01:16,840 Speaker 1: historic political defeat. Today she in about four hours she's 20 00:01:16,840 --> 00:01:19,280 Speaker 1: going to have a vote of no confidence and these 21 00:01:19,319 --> 00:01:21,920 Speaker 1: don't happen very often. The last one happened twenty four 22 00:01:22,000 --> 00:01:24,320 Speaker 1: years ago, and the last time someone lost one was 23 00:01:24,400 --> 00:01:28,200 Speaker 1: forty years ago. If she loses the vote today, which 24 00:01:28,240 --> 00:01:31,040 Speaker 1: is very unlikely, she'll probably win it by about ten votes. 25 00:01:31,400 --> 00:01:33,840 Speaker 1: If she loses it today, the pound could drop by 26 00:01:33,840 --> 00:01:37,480 Speaker 1: between five and ten percent. This is a totally unpredictable, 27 00:01:37,560 --> 00:01:40,840 Speaker 1: unpredicted event, and the capital and financial markets would go 28 00:01:40,840 --> 00:01:44,280 Speaker 1: and say, so, let's say that she does win, as 29 00:01:44,319 --> 00:01:47,480 Speaker 1: you say, by ten or twelve votes. Boy, where do 30 00:01:47,520 --> 00:01:50,520 Speaker 1: we go next here? Well, now there are only three 31 00:01:51,040 --> 00:01:54,160 Speaker 1: there's only three options for Britain right now. There's a 32 00:01:54,240 --> 00:01:59,800 Speaker 1: modified deal Brexit, a no deal Brexit, or no Brexit. Now, 33 00:02:00,200 --> 00:02:02,480 Speaker 1: the problem is in Britain is that each one of 34 00:02:02,520 --> 00:02:05,280 Speaker 1: these groups thinks that they have victory within their grasp. 35 00:02:05,680 --> 00:02:07,840 Speaker 1: There reason may think that, you know, as we get 36 00:02:07,840 --> 00:02:10,560 Speaker 1: closer to March twenty nine, the day that Britain actually 37 00:02:10,639 --> 00:02:14,360 Speaker 1: formally leaves the EU, recalcitrant MPs will come back to 38 00:02:14,440 --> 00:02:17,799 Speaker 1: her side and vote her deal through in some form. 39 00:02:17,840 --> 00:02:20,679 Speaker 1: The Brexiteers who want Britain to go back to their 40 00:02:20,720 --> 00:02:25,560 Speaker 1: pre lapse arian form they are are desperate for this, 41 00:02:25,880 --> 00:02:29,200 Speaker 1: you know, purifying no deal Brexit until they can go 42 00:02:29,240 --> 00:02:31,720 Speaker 1: back and be Britain of the nineteenth century. And the 43 00:02:31,800 --> 00:02:36,600 Speaker 1: remainders are desperate to redo the referendum, and they're thinking 44 00:02:36,760 --> 00:02:38,960 Speaker 1: this is a huge step forward towards a second referendum. 45 00:02:38,960 --> 00:02:41,640 Speaker 1: Do you think that's going to happen. I actually think 46 00:02:41,680 --> 00:02:44,160 Speaker 1: that Britain will stay in the European Union in some form, 47 00:02:44,200 --> 00:02:46,760 Speaker 1: whether it's a Norway Plus which is a lesser version 48 00:02:47,040 --> 00:02:49,920 Speaker 1: of membership, or there'll be a second referendum. But that 49 00:02:50,000 --> 00:02:52,840 Speaker 1: brings us back to the vote of no confidence today again. 50 00:02:53,000 --> 00:02:55,680 Speaker 1: The Labor Party in Jeremy Corbyn, it's leader, brought this 51 00:02:56,040 --> 00:02:58,480 Speaker 1: brought this vote today, which is the first one in 52 00:02:58,480 --> 00:03:02,080 Speaker 1: twenty four years. It's very rare. His party said they're 53 00:03:02,320 --> 00:03:05,080 Speaker 1: open to bringing more of them in the near future. 54 00:03:05,520 --> 00:03:07,639 Speaker 1: What that means is that the Labor Party has committed 55 00:03:07,840 --> 00:03:10,440 Speaker 1: more towards trying to get a new general election than 56 00:03:10,480 --> 00:03:13,360 Speaker 1: pushing for a second referendum. For some reason, I've always 57 00:03:13,360 --> 00:03:16,120 Speaker 1: felt a second referendum is kind of where the country 58 00:03:16,200 --> 00:03:20,079 Speaker 1: should go, given the greater knowledge of what is really entails. 59 00:03:20,120 --> 00:03:23,080 Speaker 1: But that doesn't that may may not happen what side 60 00:03:23,320 --> 00:03:28,720 Speaker 1: do you think of? This argument will move first towards accommodation. 61 00:03:30,919 --> 00:03:34,000 Speaker 1: The problem with Brexit is that it has only two constants. 62 00:03:34,280 --> 00:03:38,400 Speaker 1: It's totally irrational and totally unpredictable. Uh. A lot of 63 00:03:38,440 --> 00:03:42,800 Speaker 1: the opponents of a second referendum UM have an argument 64 00:03:42,880 --> 00:03:45,960 Speaker 1: that Trump supporters here would would would support, which is, 65 00:03:46,160 --> 00:03:48,920 Speaker 1: we had to vote, the country spoke, we got an outcome, 66 00:03:49,040 --> 00:03:52,240 Speaker 1: and now you want to revisit it. Donald Trump is president, 67 00:03:52,680 --> 00:03:54,800 Speaker 1: get used to it. Well, hold on, if you if 68 00:03:54,840 --> 00:03:58,400 Speaker 1: they did hold another referendum, do you think that most 69 00:03:58,440 --> 00:04:01,680 Speaker 1: people in the United Kingdom would vote against Brexit? Now 70 00:04:01,760 --> 00:04:04,200 Speaker 1: there seems to be in in polling and people have 71 00:04:04,240 --> 00:04:09,160 Speaker 1: pulled this extensively, about a fifty one percentage in favor 72 00:04:09,200 --> 00:04:13,000 Speaker 1: of remain. Now now that the the the facts are 73 00:04:13,000 --> 00:04:17,040 Speaker 1: coming out. The amazing thing about the Brexit referendum was 74 00:04:17,080 --> 00:04:21,839 Speaker 1: that the Leave folks campaigned on things that weren't true 75 00:04:21,960 --> 00:04:24,479 Speaker 1: and rubbish the things that were. Now we are in 76 00:04:24,640 --> 00:04:28,120 Speaker 1: exactly the reverse situation. So what is your sense of 77 00:04:28,360 --> 00:04:32,479 Speaker 1: timing here? I see discussions about delays and delays? Is 78 00:04:32,520 --> 00:04:34,800 Speaker 1: that the mode written now? Or do you expect something 79 00:04:34,880 --> 00:04:37,280 Speaker 1: quickly to happen? One way or the other. Theresa May 80 00:04:37,400 --> 00:04:40,960 Speaker 1: is required on Monday to provide her Plan B for 81 00:04:41,040 --> 00:04:45,000 Speaker 1: what comes next. Uh. In many ways, Theresa May is 82 00:04:45,040 --> 00:04:47,960 Speaker 1: no longer in charge of this process because she's Prime 83 00:04:48,000 --> 00:04:51,880 Speaker 1: Minister in name only, with enormously diminished powers of executive office, 84 00:04:52,279 --> 00:04:54,880 Speaker 1: much the same way that Donald Trump is as president 85 00:04:55,080 --> 00:04:58,560 Speaker 1: after the election. Now he's balanced by the House of 86 00:04:58,600 --> 00:05:03,440 Speaker 1: Representatives led by nance Dallassandro Pelosi. So we're not going 87 00:05:03,520 --> 00:05:06,160 Speaker 1: to explain all that right now, but there's a backstory. 88 00:05:06,279 --> 00:05:10,000 Speaker 1: But um on Monday, Theresa May will put out a 89 00:05:10,000 --> 00:05:13,560 Speaker 1: new plan and it won't be terribly relevant because she's 90 00:05:13,560 --> 00:05:16,000 Speaker 1: already so damaged and in a normal year she would 91 00:05:16,040 --> 00:05:18,520 Speaker 1: have been she would have resigned yesterday. But we're not 92 00:05:18,560 --> 00:05:20,960 Speaker 1: in a normal year. This isn't in a normal situation, 93 00:05:20,960 --> 00:05:23,080 Speaker 1: and no one can predict what comes next. Here's my question, 94 00:05:23,120 --> 00:05:25,960 Speaker 1: at what point will the European Unions say we want 95 00:05:26,000 --> 00:05:28,920 Speaker 1: to be negotiating with Prime Minister May. She has shown 96 00:05:28,960 --> 00:05:31,560 Speaker 1: her grit, she has shown stomach through all of the 97 00:05:31,680 --> 00:05:35,440 Speaker 1: jeers and the and the rowdy meetings in Parliament. We 98 00:05:35,480 --> 00:05:37,760 Speaker 1: want to deal with them, so so let's throw her 99 00:05:37,760 --> 00:05:40,120 Speaker 1: a bone. We don't want to be dealing with Corbin. 100 00:05:41,000 --> 00:05:44,000 Speaker 1: Is that likely? No, it's not, You're like, no, that 101 00:05:44,120 --> 00:05:46,560 Speaker 1: not because the European Union doesn't want to get involved 102 00:05:46,560 --> 00:05:50,640 Speaker 1: in internal British politics, because not even Britain's understand internal 103 00:05:50,640 --> 00:05:53,080 Speaker 1: British politics. And I'll just remind you that back in 104 00:05:54,240 --> 00:05:58,360 Speaker 1: when Margaret Thatcher went under a leadership challenge, she won 105 00:05:58,440 --> 00:06:00,919 Speaker 1: the first vote, the first out, but not by that 106 00:06:01,000 --> 00:06:03,680 Speaker 1: much and she said, I fight on, I fight to win. 107 00:06:04,240 --> 00:06:07,279 Speaker 1: Twenty four hours she resigned. Theresa May's on very thin nice. 108 00:06:07,400 --> 00:06:10,920 Speaker 1: Is there any scenario where the EU would accommodate anything 109 00:06:10,960 --> 00:06:12,800 Speaker 1: at this point just to get a deal done? Are 110 00:06:12,800 --> 00:06:14,480 Speaker 1: they just gonna let the Britain's figure it out? They 111 00:06:14,520 --> 00:06:16,280 Speaker 1: probably want this to fail, right as sort of an 112 00:06:16,320 --> 00:06:18,800 Speaker 1: example to the rest of the Nation's Well, yeah, you 113 00:06:18,800 --> 00:06:20,680 Speaker 1: have to remember what Britain brings to the table for 114 00:06:20,720 --> 00:06:22,919 Speaker 1: the EU, which is considerable. One is Britain as a 115 00:06:22,960 --> 00:06:25,640 Speaker 1: net contributor to the EU budget. They give more money 116 00:06:25,720 --> 00:06:28,080 Speaker 1: to Brussels than they take and that's not true of 117 00:06:28,120 --> 00:06:31,080 Speaker 1: a lot of the members of the European Union. Secondly, 118 00:06:31,360 --> 00:06:35,080 Speaker 1: Britain is the second largest economy and an important economic 119 00:06:35,120 --> 00:06:38,840 Speaker 1: part and home to the europe to the European capital Um, 120 00:06:38,960 --> 00:06:43,880 Speaker 1: the European financial capital. But also important, let's just say 121 00:06:44,000 --> 00:06:46,440 Speaker 1: still is and is moving. But the final thing is 122 00:06:46,600 --> 00:06:49,560 Speaker 1: there are social and legal issues within the European Union. 123 00:06:49,560 --> 00:06:53,159 Speaker 1: Their Eastern European members are becoming a little bit more authoritarian. 124 00:06:53,320 --> 00:06:56,039 Speaker 1: And Britain has long been a pillar of the rule 125 00:06:56,080 --> 00:06:58,520 Speaker 1: of law and and it's importance that EU wants to 126 00:06:58,600 --> 00:07:01,240 Speaker 1: keep Britain in. If Britain wants to stay in. It's 127 00:07:01,240 --> 00:07:03,840 Speaker 1: just Brussels has no idea what Britain wants right now. Wow, 128 00:07:04,040 --> 00:07:06,080 Speaker 1: this is something. Uh, you know we're gonna be talking 129 00:07:06,080 --> 00:07:07,680 Speaker 1: about this, We've been talking about for over two and 130 00:07:07,680 --> 00:07:09,760 Speaker 1: a half years. It's just it's not gonna go away. 131 00:07:10,280 --> 00:07:11,920 Speaker 1: And here we go. All I know is I think 132 00:07:11,960 --> 00:07:15,320 Speaker 1: we're gonna be having Sam uh Not in our studios 133 00:07:15,360 --> 00:07:18,480 Speaker 1: more often going forward, just because it's never gonna end. Uh. 134 00:07:18,720 --> 00:07:22,600 Speaker 1: Thanks Dr Sam not a president Empire Global Ventures. Uh 135 00:07:22,720 --> 00:07:40,320 Speaker 1: here with us in the Bloomberg Interactive Broker studio. So 136 00:07:40,400 --> 00:07:44,000 Speaker 1: let's talk a little Netflix. Netflix is reporting earnings tomorrow 137 00:07:44,080 --> 00:07:47,480 Speaker 1: after the close. Stocks had a phenomenal run. What else 138 00:07:47,600 --> 00:07:49,880 Speaker 1: is new? It's up? Uh, I guess you know, thirty 139 00:07:49,920 --> 00:07:52,760 Speaker 1: percent year to date, up about six over the last 140 00:07:52,760 --> 00:07:55,720 Speaker 1: twelve months, so stock continues to perform extremely well. The 141 00:07:55,720 --> 00:08:00,200 Speaker 1: company announced yesterday a significant price increase, the four one 142 00:08:00,240 --> 00:08:03,160 Speaker 1: we've seen recently. Uh and stock traded up on that news. 143 00:08:03,200 --> 00:08:06,440 Speaker 1: So let's get some more color on Netflix with Mark 144 00:08:06,480 --> 00:08:11,120 Speaker 1: Douglas Marcus the CEO of Steelhouse. It's based in Los Angeles, California, 145 00:08:11,160 --> 00:08:13,720 Speaker 1: but Marcus with us is here at the Bloomberg eleven 146 00:08:13,720 --> 00:08:17,000 Speaker 1: three oh Studios. Mark, welcome. What do you make of 147 00:08:17,120 --> 00:08:20,040 Speaker 1: the price increase? That was an aggressive price increase yesterday. 148 00:08:20,160 --> 00:08:23,880 Speaker 1: What does it tell you about the company and its future? Yeah, so, 149 00:08:23,920 --> 00:08:27,200 Speaker 1: I think in the immediate literally tomorrow, I think it's 150 00:08:27,240 --> 00:08:31,040 Speaker 1: an indicator, a pretty strong indicator that they're gonna report 151 00:08:31,120 --> 00:08:33,839 Speaker 1: really good numbers. I don't think. I don't think most 152 00:08:33,880 --> 00:08:38,280 Speaker 1: people would basically report something that could make people think 153 00:08:38,320 --> 00:08:41,000 Speaker 1: that maybe they might the growth might slow, and then 154 00:08:41,160 --> 00:08:44,120 Speaker 1: report slower numbers. So I'm betting that they report really 155 00:08:44,120 --> 00:08:46,719 Speaker 1: good earnings. I think. The other thing is is that 156 00:08:46,840 --> 00:08:48,800 Speaker 1: I think there's no place else for you to go 157 00:08:49,120 --> 00:08:52,560 Speaker 1: as a consumer. Netflix is the for everyone I know, 158 00:08:52,920 --> 00:08:57,280 Speaker 1: Netflix and in their numbers, the first place to go. Second, 159 00:08:57,400 --> 00:08:59,720 Speaker 1: I want to because I want to push back Disney 160 00:09:00,160 --> 00:09:03,559 Speaker 1: coming out with their own streaming service, supposedly the Netflix 161 00:09:03,640 --> 00:09:06,599 Speaker 1: killer right this year, and they're gonna take some of 162 00:09:06,640 --> 00:09:09,880 Speaker 1: their movies off of Netflix rotation. Is that going to 163 00:09:10,000 --> 00:09:11,880 Speaker 1: matter or you think no, it doesn't matter that Disney 164 00:09:11,920 --> 00:09:15,640 Speaker 1: is now irrelevant. I think that basically the consumers have 165 00:09:15,679 --> 00:09:17,840 Speaker 1: a short list and starts with Netflix. That's where the 166 00:09:17,880 --> 00:09:21,120 Speaker 1: money goes first. A monthly subscription is less than the 167 00:09:21,160 --> 00:09:24,280 Speaker 1: cost of a single movie. It's increasingly all new, all 168 00:09:24,320 --> 00:09:27,840 Speaker 1: original content. They crushed it with bird Box at the 169 00:09:27,920 --> 00:09:29,720 Speaker 1: end of the year. Another reason why I think they're 170 00:09:29,720 --> 00:09:33,120 Speaker 1: going to report really good numbers and then everything after 171 00:09:33,160 --> 00:09:34,720 Speaker 1: that is where do I go next? Do I go 172 00:09:34,800 --> 00:09:36,679 Speaker 1: to Hulu? Do I go to Disney? You don't have 173 00:09:36,760 --> 00:09:41,240 Speaker 1: kids to you? I actually do. But they're not Disney age, 174 00:09:43,480 --> 00:09:48,680 Speaker 1: the Netflix age. So from the computer, from the competitive 175 00:09:48,720 --> 00:09:51,960 Speaker 1: lent landscape perspective, You're right. Netflix has been it. They've 176 00:09:51,960 --> 00:09:54,120 Speaker 1: been first to market. They've got the market share a 177 00:09:54,160 --> 00:09:57,680 Speaker 1: hundred thirty seven million subscribers globally. Everybody else is playing catchup. 178 00:09:58,160 --> 00:10:01,040 Speaker 1: But I'll come back to what I heard from some 179 00:10:01,080 --> 00:10:03,800 Speaker 1: of the Redstone thirty years ago, where content is king 180 00:10:04,160 --> 00:10:08,120 Speaker 1: the big media companies are pulling their content off of Netflix. Uh, 181 00:10:08,360 --> 00:10:11,160 Speaker 1: Disney doubles down the twenty one century Fox acquisition, so 182 00:10:11,240 --> 00:10:14,080 Speaker 1: it loads up it's it's content. It does feel like 183 00:10:14,120 --> 00:10:17,959 Speaker 1: the competitive landscape in ten is going to be materially 184 00:10:17,960 --> 00:10:21,120 Speaker 1: more difficult for Netflix, and it's been in the past. Yeah, 185 00:10:21,160 --> 00:10:24,120 Speaker 1: but I think they look, you know, Toyota and Ferrari 186 00:10:24,200 --> 00:10:28,600 Speaker 1: don't compete right the the you can it's where money 187 00:10:28,600 --> 00:10:30,960 Speaker 1: goes to a number of these companies. Where does it 188 00:10:31,000 --> 00:10:33,880 Speaker 1: go from consumers? Where does it go first? Where's it 189 00:10:33,920 --> 00:10:36,679 Speaker 1: go second? Where does it go third? Until you see 190 00:10:36,760 --> 00:10:40,760 Speaker 1: people saying I'm going to cancel my Netflix subscription to 191 00:10:40,840 --> 00:10:44,840 Speaker 1: get a Disney subscription, then not really competing. So you 192 00:10:44,880 --> 00:10:48,560 Speaker 1: think there's a the marketplace can support two or three 193 00:10:48,600 --> 00:10:52,720 Speaker 1: or four. Yeah. I would be concerned about NBC Universal, 194 00:10:53,040 --> 00:10:55,160 Speaker 1: like I wouldn't be concerned about Hulu. I wouldn't be 195 00:10:55,160 --> 00:10:58,160 Speaker 1: concerned about Disney. I wouldn't be concerned about Netflix. So 196 00:10:58,280 --> 00:11:03,000 Speaker 1: let's talk about, um my fixed expenses. How much can 197 00:11:03,160 --> 00:11:07,000 Speaker 1: Netflix raise prices before people push back? In other words, 198 00:11:07,160 --> 00:11:08,839 Speaker 1: a year from now, could they say, you know what, 199 00:11:09,240 --> 00:11:13,080 Speaker 1: you love our stuff so much? A month? I think 200 00:11:13,160 --> 00:11:17,000 Speaker 1: that their next price increase is very quiet. There was 201 00:11:17,040 --> 00:11:20,480 Speaker 1: a meme, so bird Box spawned all these memes on 202 00:11:20,559 --> 00:11:23,560 Speaker 1: Instagram and other social media. One of the funniest ones 203 00:11:23,720 --> 00:11:27,079 Speaker 1: was how those forty five million people watch bird Box 204 00:11:27,120 --> 00:11:31,480 Speaker 1: with twelve Netflix accounts? Right, so everyone knows is sharing accounts. 205 00:11:31,520 --> 00:11:34,960 Speaker 1: I think Netflix's next price increases to start locking down 206 00:11:35,000 --> 00:11:38,560 Speaker 1: the ability to share the accounts starting to drive consumers 207 00:11:38,559 --> 00:11:41,320 Speaker 1: who are borrowing accounts to buy. How do they do 208 00:11:41,360 --> 00:11:43,559 Speaker 1: that and why haven't they done it already? Well, because 209 00:11:43,600 --> 00:11:46,720 Speaker 1: it's a form of free trial to to basically allow 210 00:11:46,920 --> 00:11:49,679 Speaker 1: accounts to be as easily shared. There's a little bit 211 00:11:49,679 --> 00:11:52,920 Speaker 1: of control on it, but for the most part, every 212 00:11:52,960 --> 00:11:55,640 Speaker 1: you can easily get access to Netflix account without paying 213 00:11:55,640 --> 00:11:59,280 Speaker 1: for it. The locking it down technically is is pretty easy. 214 00:11:59,400 --> 00:12:02,520 Speaker 1: Hulu does it. So I think their next price increases 215 00:12:02,600 --> 00:12:06,800 Speaker 1: not announced. It's just it's harder to share, which creates 216 00:12:06,840 --> 00:12:10,320 Speaker 1: more subscribers. I would I'm bullish on Netflix. I would 217 00:12:10,360 --> 00:12:13,880 Speaker 1: be that that that's a whole another increase in revenue 218 00:12:13,920 --> 00:12:17,679 Speaker 1: that's not accounted for. They still have so many levels 219 00:12:17,720 --> 00:12:20,600 Speaker 1: to push. They're basically the biggest production company in the world. 220 00:12:20,800 --> 00:12:22,200 Speaker 1: Let's go to that point. That you know, on the 221 00:12:22,240 --> 00:12:24,400 Speaker 1: other side of the income statement, where it's not just 222 00:12:24,480 --> 00:12:27,160 Speaker 1: a revenue story, it's a call story. And they're spending 223 00:12:27,360 --> 00:12:30,840 Speaker 1: like drunken sailors in Hollywood. The Ted Serrando's checkbook is open, 224 00:12:30,880 --> 00:12:33,360 Speaker 1: nobody spends more money. Nobody's got a bigger check book 225 00:12:33,600 --> 00:12:35,400 Speaker 1: is there, and they have no free cash flow. By 226 00:12:35,400 --> 00:12:37,040 Speaker 1: the way, they can't pay for it, so they're going 227 00:12:37,040 --> 00:12:38,840 Speaker 1: to the bond market. Is there a point where you 228 00:12:38,880 --> 00:12:42,439 Speaker 1: get concerned that they're spending too much? Um, Well, they 229 00:12:42,520 --> 00:12:45,720 Speaker 1: just generated another billion dollars in cash annually with the 230 00:12:45,760 --> 00:12:49,280 Speaker 1: price increase they announced yesterday. I mean, that's the that's 231 00:12:49,320 --> 00:12:52,400 Speaker 1: the that is the long term concern they I think 232 00:12:52,400 --> 00:12:55,840 Speaker 1: they have twelve billion dollars in debt um they're negative 233 00:12:55,880 --> 00:12:59,239 Speaker 1: cash flow three billion dollars a year. But they're expanding 234 00:12:59,240 --> 00:13:03,280 Speaker 1: their user bay rapidly. And you know that they added 235 00:13:03,280 --> 00:13:06,160 Speaker 1: a billion dollars in cash all jess with Essay's announcement, 236 00:13:06,440 --> 00:13:11,160 Speaker 1: assuming that there's no consumers don't leave, so you know 237 00:13:11,200 --> 00:13:13,880 Speaker 1: they're managing it for now. Two or three years from now, 238 00:13:13,960 --> 00:13:15,600 Speaker 1: I might be a little more concerned. I think for 239 00:13:15,640 --> 00:13:18,560 Speaker 1: the foreseeable future, they have a lot of levers to 240 00:13:18,640 --> 00:13:22,960 Speaker 1: continue to generate subscriptions and generate cash in literally ten seconds. 241 00:13:23,000 --> 00:13:26,240 Speaker 1: Who's their biggest competitor. I think Disney is the biggest competitors, 242 00:13:26,280 --> 00:13:28,760 Speaker 1: so they're not they can't really compete, but they can compete. 243 00:13:28,880 --> 00:13:31,319 Speaker 1: They can compete, but I don't think they take subscriptions 244 00:13:31,320 --> 00:13:34,000 Speaker 1: away yet. But they are the number two. They become 245 00:13:34,040 --> 00:13:36,199 Speaker 1: the number two choice. Mark Douglas, thank you so much 246 00:13:36,200 --> 00:13:38,199 Speaker 1: for being with us. Always a pleasure. Mark Douglas is 247 00:13:38,240 --> 00:13:40,760 Speaker 1: chief executive of Steelhouse based in Los Angeles, but he 248 00:13:40,840 --> 00:14:00,240 Speaker 1: joins us here in our Bloomberg Interactive Broker's studios. You know, 249 00:14:00,280 --> 00:14:02,840 Speaker 1: one of the fastest growing segments of the consumer products 250 00:14:02,840 --> 00:14:06,000 Speaker 1: business has been the cannabis sector. UH. We have thirty 251 00:14:06,040 --> 00:14:07,840 Speaker 1: eight states approximately in the US right now that have 252 00:14:07,960 --> 00:14:12,679 Speaker 1: legalized cannabis. There's companies coming public, much greater awareness and 253 00:14:12,840 --> 00:14:17,120 Speaker 1: acceptance of legal cannabis. UH. Joining us today is Kevin Hart, 254 00:14:17,160 --> 00:14:20,520 Speaker 1: founder and CEO of green Check Verified out of New Haven, Connecticut. 255 00:14:20,520 --> 00:14:22,600 Speaker 1: He joins us in the Bloomberg eleven three oh studios 256 00:14:22,840 --> 00:14:24,360 Speaker 1: to talk to us a little bit about what how 257 00:14:24,440 --> 00:14:27,200 Speaker 1: his company is playing in the food chain, if you will, 258 00:14:27,240 --> 00:14:29,600 Speaker 1: of the legal cannabis business. So, Kevin, thanks for being 259 00:14:29,600 --> 00:14:32,680 Speaker 1: here with us real quick, you give us our listeners 260 00:14:32,760 --> 00:14:35,360 Speaker 1: kind of the thirty second elevator pitch for what your 261 00:14:35,400 --> 00:14:38,680 Speaker 1: company doesn't, how you fit into the ecosystem. Sure, we 262 00:14:38,800 --> 00:14:41,920 Speaker 1: recognize three years ago that you know, the banking for 263 00:14:41,960 --> 00:14:44,480 Speaker 1: the cannabis industry was believed to be illegal, and that's 264 00:14:44,480 --> 00:14:47,400 Speaker 1: simply not true. It's it's legal within the states where 265 00:14:47,400 --> 00:14:50,200 Speaker 1: those programs are compliant and they're recognized to the number 266 00:14:50,240 --> 00:14:53,520 Speaker 1: that you said. The challenges, it's just very complex and 267 00:14:53,640 --> 00:14:57,360 Speaker 1: very expensive for state charter banks and financial institutions, which 268 00:14:57,440 --> 00:15:00,200 Speaker 1: means it's impossible for a cannabis business to actually be 269 00:15:00,240 --> 00:15:02,920 Speaker 1: able to do this. So you have these two independent, 270 00:15:03,040 --> 00:15:06,000 Speaker 1: highly regulated industries that really don't know much about each 271 00:15:06,000 --> 00:15:08,640 Speaker 1: other but would love to work together. That screams the 272 00:15:08,640 --> 00:15:12,480 Speaker 1: opportunity for technology. So we developed the technology framework of 273 00:15:12,560 --> 00:15:15,440 Speaker 1: platform and web AP that integrates all the rules and 274 00:15:15,480 --> 00:15:18,840 Speaker 1: regulations at the local level that the cannabis business operates on. 275 00:15:19,280 --> 00:15:23,359 Speaker 1: We monitor their them for compliance. We monitor every individual 276 00:15:23,480 --> 00:15:27,240 Speaker 1: transaction at the dollar level, and therefore that information has 277 00:15:27,280 --> 00:15:30,920 Speaker 1: passed along to the financial institutions so they can review 278 00:15:30,960 --> 00:15:34,400 Speaker 1: the money bring it into deposit accounts and financial institutions, 279 00:15:34,400 --> 00:15:37,000 Speaker 1: state charter banks and credit unions are dying for new 280 00:15:37,000 --> 00:15:40,760 Speaker 1: deposit dollars. It's a challenged industry because of the bigger banks. 281 00:15:41,120 --> 00:15:43,360 Speaker 1: They can bring that money in and they can pass 282 00:15:43,480 --> 00:15:46,720 Speaker 1: their rules and their risk profile internally, and then they 283 00:15:46,760 --> 00:15:48,880 Speaker 1: can pass that information back all the way through to 284 00:15:48,960 --> 00:15:51,360 Speaker 1: the exam cycle on the back end. So it is 285 00:15:51,400 --> 00:15:57,440 Speaker 1: a holistic, integrated, horizontal approach to attacking the banking challenge. 286 00:15:57,680 --> 00:16:01,320 Speaker 1: And we work within the banking system, not around it. Okay, 287 00:16:01,360 --> 00:16:04,760 Speaker 1: So rather than just saying we'll use bitcoin, right, you're saying, actually, 288 00:16:04,800 --> 00:16:07,600 Speaker 1: here is an ecosystem that can that can perhaps be 289 00:16:07,680 --> 00:16:10,840 Speaker 1: sustainable within the existing financial world. What I'm trying to 290 00:16:10,920 --> 00:16:13,840 Speaker 1: understand is first of all, how you make money, who 291 00:16:13,920 --> 00:16:16,240 Speaker 1: pays you? And then second of all, is it just 292 00:16:16,480 --> 00:16:21,160 Speaker 1: state and local UH financial firms that adhere to this 293 00:16:21,280 --> 00:16:24,040 Speaker 1: sort of local guidance from the rules or can it 294 00:16:24,120 --> 00:16:26,040 Speaker 1: be the JP Morgan to Bank America On the back 295 00:16:26,120 --> 00:16:29,200 Speaker 1: end here, the larger financial institutions aren't going to get 296 00:16:29,240 --> 00:16:32,280 Speaker 1: involved in this industry yet, it's not worth the reputational risk. 297 00:16:32,360 --> 00:16:34,760 Speaker 1: And you know candidly, they just don't have the monitoring 298 00:16:34,800 --> 00:16:38,640 Speaker 1: ability of those individual transactions and the rules and regulations 299 00:16:38,680 --> 00:16:40,960 Speaker 1: at that local level. Um. You know, at some point 300 00:16:41,000 --> 00:16:44,440 Speaker 1: in time is laws change and regulations evolve. I think 301 00:16:44,480 --> 00:16:46,800 Speaker 1: we'll see the bigger banks getting involved. You can't deny 302 00:16:46,920 --> 00:16:49,560 Speaker 1: the size of the industry and the growth, but not today. 303 00:16:49,640 --> 00:16:51,680 Speaker 1: And so this is a ripe opportunity for those state 304 00:16:51,760 --> 00:16:56,200 Speaker 1: charter banks, great unions that are looking for new deposit dollars. Um. 305 00:16:56,240 --> 00:16:58,040 Speaker 1: You know there are the reason why Bitcoin and the 306 00:16:58,080 --> 00:17:02,520 Speaker 1: others don't participate is, you know, it's it's complex enough. 307 00:17:02,600 --> 00:17:05,000 Speaker 1: You take non regulated currencies and you add that to 308 00:17:05,040 --> 00:17:07,119 Speaker 1: the mix, and that's just gonna push people farther and 309 00:17:07,160 --> 00:17:10,760 Speaker 1: farther away. So you know, this is about monitoring cash. 310 00:17:11,080 --> 00:17:13,399 Speaker 1: You know, it's eight plus percent of the transactions are 311 00:17:13,400 --> 00:17:17,080 Speaker 1: still done in cash. This is an essentially cash intensive business. 312 00:17:17,359 --> 00:17:20,439 Speaker 1: Where do you get your cash? Our fee structure is 313 00:17:20,440 --> 00:17:24,360 Speaker 1: based upon the dispensary. They pay a nominal fee structure. 314 00:17:24,359 --> 00:17:26,439 Speaker 1: It's cheaper than the cost of a debit or credit 315 00:17:26,440 --> 00:17:29,520 Speaker 1: card transaction fee. And we also have a tiered pricing 316 00:17:29,600 --> 00:17:32,440 Speaker 1: structure with the financial institutions, so we do collective fee 317 00:17:32,440 --> 00:17:35,399 Speaker 1: on both ends, but it's still cheaper than the cost 318 00:17:35,440 --> 00:17:39,040 Speaker 1: of cash. So how are the local financial institutions viewing 319 00:17:39,080 --> 00:17:42,880 Speaker 1: the cannabis business. Are they receptive to it? Are they 320 00:17:42,880 --> 00:17:46,480 Speaker 1: still resistant to it? Does your presence and your regulatory 321 00:17:46,480 --> 00:17:49,840 Speaker 1: framework help ease that? Where are they in the general? Okay, 322 00:17:49,880 --> 00:17:52,240 Speaker 1: I'll do business with the local cannabist company. It's a 323 00:17:52,280 --> 00:17:54,879 Speaker 1: fascinating process that we've been involved with so far. We 324 00:17:54,920 --> 00:17:57,080 Speaker 1: knew we had to not convince, but we knew we 325 00:17:57,119 --> 00:17:58,800 Speaker 1: had to be able to position our value to the 326 00:17:58,840 --> 00:18:02,760 Speaker 1: financial institution. And to date, the street will end. And 327 00:18:02,800 --> 00:18:04,919 Speaker 1: you know, I'm a sports person. I believe in hot streaks. 328 00:18:04,920 --> 00:18:08,280 Speaker 1: The street will end. Every financial institution that we've had 329 00:18:08,320 --> 00:18:11,639 Speaker 1: conversations with and demo this platform too, has asked us 330 00:18:11,640 --> 00:18:14,920 Speaker 1: for an exclusive on the product and the geography there. 331 00:18:14,920 --> 00:18:17,480 Speaker 1: And I've been selling enterprise software for forty years and 332 00:18:17,560 --> 00:18:20,560 Speaker 1: been involved. Nobody's ever done that before. So this is 333 00:18:20,600 --> 00:18:24,040 Speaker 1: compliance software, but it's compliance that comes with new business. 334 00:18:24,320 --> 00:18:27,280 Speaker 1: It actually comes with the deposit dollars attached to it, 335 00:18:27,560 --> 00:18:30,719 Speaker 1: and they see those opportunities, so they're very excited about it. 336 00:18:31,000 --> 00:18:34,520 Speaker 1: So what's the longer term plan for green check Verified. 337 00:18:34,560 --> 00:18:36,720 Speaker 1: I'm just wondering, do you see this is eventually being 338 00:18:36,840 --> 00:18:40,760 Speaker 1: acquired by a major bank when the reputational risk goes away, 339 00:18:40,840 --> 00:18:43,800 Speaker 1: or will there be an I p o UM. We 340 00:18:43,880 --> 00:18:46,239 Speaker 1: look at all those options. I'm a big believer to 341 00:18:46,400 --> 00:18:48,199 Speaker 1: begin with the end of mind and you always have 342 00:18:48,280 --> 00:18:50,280 Speaker 1: to keep your options open as to what you might 343 00:18:50,280 --> 00:18:53,080 Speaker 1: do from a company perspective. But our goal right now 344 00:18:53,160 --> 00:18:56,719 Speaker 1: is to continue our growth trajectory. We started our national 345 00:18:56,800 --> 00:18:59,680 Speaker 1: launch that's rolling out. We're in fifteen states right now, 346 00:18:59,680 --> 00:19:04,280 Speaker 1: and for levels of conversation and implementation, we'll see where 347 00:19:04,280 --> 00:19:07,120 Speaker 1: the market goes. There will be some changes as things 348 00:19:07,160 --> 00:19:12,080 Speaker 1: involve in Washington, but legalization and State's Right Act actually 349 00:19:12,080 --> 00:19:14,720 Speaker 1: are going to become an accelerant for us because the 350 00:19:14,760 --> 00:19:16,800 Speaker 1: Treasury is never going to turn a green line onto 351 00:19:16,800 --> 00:19:19,040 Speaker 1: banking and all the black market money that's out there. 352 00:19:19,480 --> 00:19:24,160 Speaker 1: And I wonder if actually federal law legalizing marijuana fight 353 00:19:24,280 --> 00:19:27,280 Speaker 1: her no, and it will actually help Okay, it will 354 00:19:27,359 --> 00:19:30,160 Speaker 1: actually help us. All right, Well, we'll have to continue 355 00:19:30,200 --> 00:19:32,760 Speaker 1: exactly how that would help you at another time. Unfortunately 356 00:19:33,000 --> 00:19:35,760 Speaker 1: out of time. But Kevin Hart, really interesting having you on. 357 00:19:35,840 --> 00:19:37,760 Speaker 1: Thank you for being with us. It's important to kind 358 00:19:37,760 --> 00:19:41,480 Speaker 1: of look at the infrastructure of the cannabis industry. I 359 00:19:41,880 --> 00:19:44,440 Speaker 1: speak to so many people on Wall Street who say, Gosh, 360 00:19:44,480 --> 00:19:48,400 Speaker 1: I coul should have gotten into cannabis, not training play 361 00:19:48,160 --> 00:19:51,080 Speaker 1: and consumer. Kevin Hart is a founder and chief executive 362 00:19:51,080 --> 00:19:54,320 Speaker 1: officer of green Check Verified, which is based in New Haven, 363 00:19:54,320 --> 00:19:59,119 Speaker 1: Connecticuty choices here in our New York City headquarters of 364 00:19:59,200 --> 00:20:19,760 Speaker 1: Bloomberg LP. Lisa, I think we're on day if I'm 365 00:20:19,800 --> 00:20:23,720 Speaker 1: not mistaken of this partial government shutdown. And obviously, in 366 00:20:23,720 --> 00:20:27,200 Speaker 1: addition to the question of how long will it last? Uh? 367 00:20:27,200 --> 00:20:29,359 Speaker 1: And is there any end in sight? The question is 368 00:20:29,880 --> 00:20:32,200 Speaker 1: can it get any worse than what we're seeing right now? 369 00:20:32,200 --> 00:20:35,160 Speaker 1: It looks like President Trump has ordered thousands of federal 370 00:20:35,200 --> 00:20:39,160 Speaker 1: employees back to work, most notably without pay. But let's 371 00:20:39,200 --> 00:20:43,680 Speaker 1: bring in Chris Flavel, Bloomberg policy reporter for Bloomberg News. 372 00:20:43,720 --> 00:20:46,960 Speaker 1: He's at studio in Washington, d C. And he's out 373 00:20:46,960 --> 00:20:49,159 Speaker 1: with a story on this topic. So, Chris, thanks so 374 00:20:49,280 --> 00:20:52,560 Speaker 1: much for joining us. You know, where do you think, uh, 375 00:20:52,640 --> 00:20:56,000 Speaker 1: this shutdown goes maybe over the near term, the next 376 00:20:56,160 --> 00:20:58,960 Speaker 1: week or so. Yeah. So we've got a story where 377 00:20:59,000 --> 00:21:01,719 Speaker 1: we put that to people who follow this stuff and 378 00:21:01,760 --> 00:21:04,760 Speaker 1: to people inside and around government. And there's a list 379 00:21:04,880 --> 00:21:06,480 Speaker 1: and I would, you know, I'd be folly to try 380 00:21:06,480 --> 00:21:08,840 Speaker 1: and say here are the scariest things. But one that 381 00:21:09,040 --> 00:21:12,359 Speaker 1: certainly is alarming is what happens to government workers who 382 00:21:12,440 --> 00:21:15,800 Speaker 1: decide they just no longer want to be working for free. 383 00:21:16,080 --> 00:21:19,080 Speaker 1: You mentioned that the president has ordered more federal employees 384 00:21:19,440 --> 00:21:22,360 Speaker 1: back to work, even though they're not paid. That's certainly 385 00:21:22,400 --> 00:21:24,480 Speaker 1: one way of addressing this. But the problem that we're 386 00:21:24,520 --> 00:21:27,959 Speaker 1: told is really concerning people at senior levels of government 387 00:21:28,400 --> 00:21:31,000 Speaker 1: is what if people in vital functions like T s 388 00:21:31,040 --> 00:21:34,560 Speaker 1: A just stop showing up. They can call in sick, 389 00:21:34,760 --> 00:21:37,119 Speaker 1: they can quit, they can do anything else, but if 390 00:21:37,119 --> 00:21:40,320 Speaker 1: they're not they're doing their job, really vital functions start 391 00:21:40,400 --> 00:21:43,360 Speaker 1: to stop, whether that is food inspection, whether it's people 392 00:21:43,400 --> 00:21:46,400 Speaker 1: getting on planes, whether it's prison guards. And we've never 393 00:21:46,440 --> 00:21:48,520 Speaker 1: been here before, so we're not really sure if it 394 00:21:48,520 --> 00:21:51,680 Speaker 1: goes on weeks or even months, how they'll respond. Well, 395 00:21:51,720 --> 00:21:53,760 Speaker 1: And Chris, I mean, we haven't we seen that to 396 00:21:53,760 --> 00:21:56,880 Speaker 1: some accent already with the lines at uh it sort 397 00:21:56,880 --> 00:22:01,240 Speaker 1: of security checkouts at airports, T S agents showing up. Yeah, 398 00:22:01,280 --> 00:22:03,600 Speaker 1: that's a great example. So the latest figures I heard 399 00:22:03,680 --> 00:22:06,520 Speaker 1: yesterday where I think somewhere in the neighborhood of seven 400 00:22:06,560 --> 00:22:10,920 Speaker 1: percent of workers calling in sick. That's almost three times 401 00:22:10,960 --> 00:22:14,199 Speaker 1: the typical number. Look at the chaos we've seen with 402 00:22:14,320 --> 00:22:20,639 Speaker 1: just seven percent of workers not showing up imagines ten fifty. Uh, 403 00:22:20,800 --> 00:22:23,359 Speaker 1: it's really I don't want to suggest we're predicting it. 404 00:22:23,440 --> 00:22:26,480 Speaker 1: No one knows. I think the concern is there's nothing 405 00:22:26,640 --> 00:22:29,960 Speaker 1: really stopping that from happening, and if it does, I 406 00:22:30,000 --> 00:22:32,439 Speaker 1: don't know what, if anything, the government can do to 407 00:22:32,480 --> 00:22:34,439 Speaker 1: deal with it. What are some of the areas and 408 00:22:34,480 --> 00:22:37,200 Speaker 1: your reporting that you found that you know might be 409 00:22:37,800 --> 00:22:41,359 Speaker 1: you know, the most problematic for Americans. Um, you know 410 00:22:41,480 --> 00:22:42,879 Speaker 1: we mentioned T s A. What are some of the 411 00:22:42,920 --> 00:22:45,800 Speaker 1: other parts of government that could be impacted? Certainly if 412 00:22:45,800 --> 00:22:49,480 Speaker 1: you're looking at the sort of the wide spread impacts, 413 00:22:49,560 --> 00:22:52,480 Speaker 1: food stamps are a huge issue. The administration has found 414 00:22:52,480 --> 00:22:54,520 Speaker 1: a way to keep on sending food stamps for now, 415 00:22:54,920 --> 00:22:58,399 Speaker 1: it's made clear that that can't continue forever, perhaps through February. 416 00:22:58,760 --> 00:23:01,920 Speaker 1: There's an enormous share of American families that rely on 417 00:23:02,000 --> 00:23:04,480 Speaker 1: food stamps, thirty eight million people. They account for ten 418 00:23:05,280 --> 00:23:08,080 Speaker 1: of all food people buy in stores and take them 419 00:23:08,080 --> 00:23:10,439 Speaker 1: to eat. If those food stands stopped it would be 420 00:23:10,600 --> 00:23:15,240 Speaker 1: catastrophic for a significant share American families housing support. There's 421 00:23:15,280 --> 00:23:19,520 Speaker 1: a huge number of housing families that need help getting housing. 422 00:23:19,600 --> 00:23:22,600 Speaker 1: If that couldn't be processed anymore because HUD the anecy 423 00:23:22,640 --> 00:23:25,960 Speaker 1: in charge could no longer work, that be very traumatic. 424 00:23:26,320 --> 00:23:28,200 Speaker 1: And then company and batch. This is a big deal 425 00:23:28,240 --> 00:23:30,720 Speaker 1: because we don't really know what happens when, for example, 426 00:23:30,800 --> 00:23:34,000 Speaker 1: I p O stop, when the patent office closes. These 427 00:23:34,000 --> 00:23:36,919 Speaker 1: are things that we haven't really experienced, so we're, in 428 00:23:36,960 --> 00:23:40,040 Speaker 1: a sense we're speculating, but based on pretty good information. 429 00:23:40,119 --> 00:23:42,640 Speaker 1: The core of it is a lot of these agencies 430 00:23:42,640 --> 00:23:45,760 Speaker 1: have sort of clever workarounds that will keep them performing 431 00:23:46,240 --> 00:23:49,280 Speaker 1: vital functions for a certain amount of time, but not forever, 432 00:23:49,440 --> 00:23:52,320 Speaker 1: and we're approaching that limit. So I should give you 433 00:23:52,400 --> 00:23:54,920 Speaker 1: a sense of some of the numbers behind this. Ian Bremer, 434 00:23:54,960 --> 00:23:57,240 Speaker 1: who is the president of your Asia group, just tweeting 435 00:23:57,280 --> 00:23:59,080 Speaker 1: out this data from the New York Times. The typical 436 00:23:59,080 --> 00:24:01,919 Speaker 1: federal worker has five thousand dollars in pay since the 437 00:24:01,960 --> 00:24:05,359 Speaker 1: shutdown began. That's a total of two hundred million dollars 438 00:24:05,359 --> 00:24:08,800 Speaker 1: and unpaid wages each work day. I'm just wondering what 439 00:24:08,880 --> 00:24:11,960 Speaker 1: President Trump's power actually is to order people to go 440 00:24:12,000 --> 00:24:14,040 Speaker 1: to work even though they're not being paid. So this 441 00:24:14,119 --> 00:24:16,520 Speaker 1: is before the courts. Yesterday here in d see a 442 00:24:16,560 --> 00:24:21,200 Speaker 1: federal judge dismissed for now a request by a union 443 00:24:21,200 --> 00:24:25,000 Speaker 1: of federal employees to insist that they be paid. So 444 00:24:25,040 --> 00:24:27,159 Speaker 1: that is still winding its way through the courts. But 445 00:24:27,320 --> 00:24:30,040 Speaker 1: look at a legitimate question, right what is the limit 446 00:24:30,200 --> 00:24:32,720 Speaker 1: of the government's legal ability to order people to work 447 00:24:33,000 --> 00:24:35,800 Speaker 1: without pay and for how long? Even if that gets 448 00:24:35,880 --> 00:24:38,320 Speaker 1: worked out, you still have the issue of funding right now. 449 00:24:38,400 --> 00:24:39,960 Speaker 1: One thing that we looked at in our story is 450 00:24:40,000 --> 00:24:43,280 Speaker 1: the federal government is an enormous landlord. They pay out 451 00:24:43,320 --> 00:24:46,800 Speaker 1: almost half a billion dollars in rent every month to 452 00:24:46,920 --> 00:24:49,600 Speaker 1: landlords around the country. That could stop as the g 453 00:24:49,800 --> 00:24:52,480 Speaker 1: s A either runs out of workers to process those 454 00:24:52,560 --> 00:24:56,160 Speaker 1: checks or money to pay that rent. So again, sort 455 00:24:56,160 --> 00:24:59,000 Speaker 1: of a cascading effect in ways that we can guess 456 00:24:59,040 --> 00:25:01,800 Speaker 1: at but won't really know until it happens. So, Chris, 457 00:25:01,880 --> 00:25:04,200 Speaker 1: and you're reporting just real quickly. Did you get any 458 00:25:04,240 --> 00:25:08,800 Speaker 1: sense anywhere that these mounting, exponentially mounting problems are weighing 459 00:25:08,840 --> 00:25:10,440 Speaker 1: on Congress at all one one way or the other 460 00:25:10,480 --> 00:25:12,960 Speaker 1: to get a deal done. You know. It's it's so 461 00:25:13,359 --> 00:25:15,480 Speaker 1: it strikes me as a black box. It's hard to 462 00:25:15,520 --> 00:25:17,879 Speaker 1: see a link between how bad things are in the 463 00:25:17,920 --> 00:25:20,840 Speaker 1: real world and what's happening in Congress. Uh, And and 464 00:25:20,920 --> 00:25:25,320 Speaker 1: it would seem just impossible to meaningfully predict what's going 465 00:25:25,359 --> 00:25:27,240 Speaker 1: to happen. The one thing we can say from our 466 00:25:27,240 --> 00:25:30,639 Speaker 1: reporting is these effects are real. Uh, They're bigger than before, 467 00:25:30,880 --> 00:25:34,639 Speaker 1: and they affect really almost every facet of the economy 468 00:25:34,680 --> 00:25:39,159 Speaker 1: and the country. So certainly, Uh, they are painful for 469 00:25:39,200 --> 00:25:42,280 Speaker 1: a lot of people and extremely so for many and 470 00:25:42,320 --> 00:25:45,040 Speaker 1: they will again just get worse. Chris, I'm shocked that 471 00:25:45,040 --> 00:25:46,719 Speaker 1: you didn't want to go out there and speculate what 472 00:25:46,760 --> 00:25:48,879 Speaker 1: Congress is going to do. Next time you come on, 473 00:25:48,920 --> 00:25:51,200 Speaker 1: we expect you to have a full eight ball prediction 474 00:25:51,440 --> 00:25:53,840 Speaker 1: of what's going to happen in Washington. Thank you. I 475 00:25:53,880 --> 00:25:57,520 Speaker 1: appreciate that. Chris Flavell is policy reporter for Bloomberg News 476 00:25:57,560 --> 00:26:00,119 Speaker 1: down in the nation's capital, Washington, d C. Where at 477 00:26:00,520 --> 00:26:06,480 Speaker 1: One Studios are Thanks for listening to the Bloomberg P 478 00:26:06,600 --> 00:26:09,560 Speaker 1: and L podcast. You can subscribe and listen to interviews 479 00:26:09,600 --> 00:26:13,639 Speaker 1: at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. 480 00:26:14,040 --> 00:26:17,640 Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm 481 00:26:17,640 --> 00:26:20,960 Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast. 482 00:26:21,000 --> 00:26:23,600 Speaker 1: You can always catch us worldwide on Bloomberg Radio