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Trump’s UN Address Targets Regime Change In Iran: Cohen · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim
• 0:08
  Speaker 1: Fox along with my co host Lisa A. Bramowitz. Each
• 0:11
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• 0:30
  Speaker 1: Let's bring Ariel Cohen back in here, senior fellow at
• 0:32
  Speaker 1: the Atlantic Council. What stuck out to you? First of all,
• 0:37
  Speaker 1: this was a very strong message against what I would
• 0:44
  Speaker 1: call the globalists. Uh, this is the world of the
• 0:48
  Speaker 1: mosaic of independent nations. I think Steve Bannon would have
• 0:53
  Speaker 1: been proud of this speech. Um. The President is strengthening
• 0:59
  Speaker 1: the sovereignty against global government. He says, the United States
• 1:05
  Speaker 1: does not recognize the International Criminal Court, we will not
• 1:08
  Speaker 1: join the International the UN Compact, and refugees, et cetera.
• 1:14
  Speaker 1: He is not against cooperating with the United Nations, He
• 1:17
  Speaker 1: just wants America to do it on our own terms.
• 1:21
  Speaker 1: Arial Other topics include OPEC and oil prices, as well
• 1:27
  Speaker 1: as China and trade negotiations. I wonder if you could
• 1:31
  Speaker 1: comment on the relationship that the President is setting out
• 1:35
  Speaker 1: between the United States and OPEC as a organization that
• 1:40
  Speaker 1: he describes as controlling oil prices. Absolutely. I had the
• 1:46
  Speaker 1: privilege to testify before the US Congress on the legislation
• 1:50
  Speaker 1: called NOPECK no opec UH and this is something that
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  Speaker 1: is encouraged by the White House. Apparently the President you
• 2:00
  Speaker 1: OPEC for what it is, the cartel that by opening
• 2:06
  Speaker 1: or closing this spigot can regulate the prices, and OPEC
• 2:10
  Speaker 1: is now expanding. Russia and Saudi Arabia are working closely together,
• 2:15
  Speaker 1: and this was interesting because he mentioned um the Russian
• 2:21
  Speaker 1: pipeline that goes into Germany, the natural gas pipeline, but
• 2:26
  Speaker 1: he did not mention Russia. Contrasted what was going on
• 2:29
  Speaker 1: in Germany and their energy policy with the energy policy
• 2:34
  Speaker 1: that exists in Poland. He spoke about how OPEC is
• 2:37
  Speaker 1: ripping off the rest of the world. Well, let's distinguish
• 2:41
  Speaker 1: between gas and oil. Russia is corporating with ope in
• 2:45
  Speaker 1: Saudi Arabia on oil. And it was interesting that he
• 2:49
  Speaker 1: mentioned Saudi Arabia amongst very few US allies. You mentioned India,
• 2:54
  Speaker 1: you mentioned Israel. No surprises here. He mentioned Poland which
• 2:59
  Speaker 1: is an important in the election with the ethnic and
• 3:02
  Speaker 1: Polish American vote. But he did mention Saudi Arabia as
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  Speaker 1: an ally at the same time nashing OPEC and Saudia,
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  Speaker 1: of course is the founding member and the market maker
• 3:13
  Speaker 1: in Ope. That there was a dichotomy and a paradox
• 3:17
  Speaker 1: right there. Um I think he will push Opic not
• 3:21
  Speaker 1: to um diminish oil production. He wants oil prices lower
• 3:27
  Speaker 1: than they are now. So Ariel, I want to go
• 3:29
  Speaker 1: back to something that you said initially, that that that
• 3:32
  Speaker 1: Steven would be proud of this speech and that it
• 3:34
  Speaker 1: was rejection of globalism. And I'm just wondering if you
• 3:37
  Speaker 1: can sort of put historic perspective on u N Assembly
• 3:42
  Speaker 1: addresses by presidents. How instructive have they been about policies
• 3:47
  Speaker 1: and sort of how seminal are they in signaling sort
• 3:50
  Speaker 1: of complete see change in in in policies versus just
• 3:54
  Speaker 1: sort of pomp and circumstance. I think that in this speech,
• 4:00
  Speaker 1: in particular, we see the strongest language possible about Iran.
• 4:05
  Speaker 1: The president is hoping that on the fourth of November,
• 4:09
  Speaker 1: when the sanctions on Iran kick in the second round
• 4:13
  Speaker 1: of sanctions uh and Iran is driven to lose its
• 4:17
  Speaker 1: oil exporting opportunities. UM, we will move towards UH. Possibly.
• 4:25
  Speaker 1: I think they're not saying that, but they're thinking about it,
• 4:27
  Speaker 1: regime changing Iran because that regime will have UM will
• 4:32
  Speaker 1: run out of money, and people are already sending a
• 4:36
  Speaker 1: very strong signal to Tehran that they do not want
• 4:40
  Speaker 1: to continue like that. So that's the main message UM.
• 4:44
  Speaker 1: In terms of other things, the terror forwards China, I
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  Speaker 1: think this was very important again in the context of
• 4:51
  Speaker 1: the elections, to the President's UM core vater base. He's saying,
• 4:57
  Speaker 1: you lost jobs, Steel industry lost one whatever jobs US
• 5:02
  Speaker 1: lost sixty seconds. So this is a core UM voter
• 5:07
  Speaker 1: based message to the American voters. Thank you so much
• 5:11
  Speaker 1: for being with us, Aero Cohen. We really appreciate your insights,
• 5:13
  Speaker 1: Aero Cohen. So you're fellow at the Atlantic Council joining us.
• 5:17
  Speaker 1: Following the speech of President Trump delivered at the UN
• 5:20
  Speaker 1: General Council, we're broadcasting live from the Bloomberg Interactor Broker's Studios.
• 5:35
  Speaker 1: I'm Pim Fox along with my co host Lisa Abramowitz.
• 5:38
  Speaker 1: Our topic now is emerging markets. Our guest Phil Taures,
• 5:42
  Speaker 1: Global co head of emerging markets at Agon Asset Management.
• 5:46
  Speaker 1: He joins us here in our eleven three oh studios.
• 5:48
  Speaker 1: Phil Tours, thank you very much for coming in. Argentina's
• 5:52
  Speaker 1: paso taking a tumble this coming after the president of
• 5:56
  Speaker 1: the country's central Bank, Luis ca Puto, resigned. They have
• 6:00
  Speaker 1: tapped a economist for a replacement. Why would you still
• 6:04
  Speaker 1: be bullish if indeed you are on Argentina. Great to
• 6:08
  Speaker 1: be here with you. UM, it's obviously breaking news. We're
• 6:11
  Speaker 1: trying to figure out exactly what the implications are at
• 6:13
  Speaker 1: the moment, but markets seem to be taking in stride
• 6:16
  Speaker 1: at least on the external credit UH and the and
• 6:19
  Speaker 1: the currency. Again, still trying to figure out exactly implications
• 6:23
  Speaker 1: and UH and the policy changes that they might come back.
• 6:27
  Speaker 1: So when you're investing Phil in this market Argentina, Brazil, UH,
• 6:33
  Speaker 1: how do you factor in the liquidity issues? Because this morning,
• 6:36
  Speaker 1: right after the announcement came out about the Argentinian Central bankhead,
• 6:39
  Speaker 1: there was zero trading in the local Argentinian peso market.
• 6:44
  Speaker 1: That's concerning It's an a liquid market in general, so
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  Speaker 1: this is something we think is generally factored into the prices.
• 6:51
  Speaker 1: So as investors that take medium to long term, we
• 6:56
  Speaker 1: can absorb some of the liquidity in some of these markets.
• 6:59
  Speaker 1: But we try to look through a lot of the
• 7:01
  Speaker 1: the ups and downs, and this was this was a
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  Speaker 1: steep drop that that the markets reacted. Just to go
• 7:07
  Speaker 1: back to what you talked about with Argentina, are you
• 7:09
  Speaker 1: really looking for the International Monetary Fund to come in
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  Speaker 1: with some extra money and then that will help everybody's
• 7:14
  Speaker 1: investment thesis. No, I think what we're really looking for
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  Speaker 1: is policy change and in a continuation of good ideas,
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  Speaker 1: and if they can deliver on primarily getting to a
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  Speaker 1: balanced budget in the next year, we think that goes
• 7:29
  Speaker 1: a long way to securing the investment thesis of most
• 7:33
  Speaker 1: people that like this market. So I want to talk
• 7:35
  Speaker 1: about what you're buying currently. What was the most recent
• 7:38
  Speaker 1: sort of position that you took with conviction in emerging markets?
• 7:43
  Speaker 1: So I'll just rattle off a couple of our of
• 7:45
  Speaker 1: our favorite trades UM and let's say the last month. UM,
• 7:49
  Speaker 1: we've liked Senegal, We've liked Ivory Coast, Turkey, Argentina, have
• 7:53
  Speaker 1: been some some favorites. Those those A've been buying Turkey
• 7:58
  Speaker 1: over the summer. That was that was one of our
• 8:00
  Speaker 1: our more interesting favorite traits. Yeah. Interesting. I just have
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  Speaker 1: to wonder, as a company that over sees more than
• 8:07
  Speaker 1: a hundred billion dollars of assets and you have a
• 8:09
  Speaker 1: lot of money to deploy, how much can you really
• 8:12
  Speaker 1: go into a place like Senegal or some of the
• 8:15
  Speaker 1: countries with less dead or less you know, sort of
• 8:18
  Speaker 1: smaller markets, considering that you'll be a dominant player potentially. Well, first,
• 8:23
  Speaker 1: a hundred billion dollars is not our total allocation to
• 8:25
  Speaker 1: emerging markets, so we're not trying to deploy all of that.
• 8:28
  Speaker 1: But some of these markets have some reasonable liquidity we
• 8:32
  Speaker 1: can put We can put money to work fairly easily.
• 8:35
  Speaker 1: Just looking at, for example, one of the Senegal government bonds,
• 8:38
  Speaker 1: they are down about six and a quarter percent since
• 8:41
  Speaker 1: the beginning of the year. Are you buying these things
• 8:43
  Speaker 1: for yield or for capital appreciation? Capital appreciation, although yield
• 8:48
  Speaker 1: is going to be a big part of it. UM.
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  Speaker 1: So we got involved in Senegal sometime late summer after
• 8:55
  Speaker 1: a lot of that, after a lot of that decline,
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  Speaker 1: they had issued some new debt. The market did received
• 9:00
  Speaker 1: that terribly well. UM as a mix of adding new
• 9:04
  Speaker 1: debt stock and it was just an unfavorable time for
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  Speaker 1: markets in general. Primarily, what we thought was, it's a
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  Speaker 1: value situation, good economy, stable, kind of a model democracy,
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  Speaker 1: and it got cheap. So I have to wonder. It
• 9:17
  Speaker 1: sounds like you're taking risk and you're somewhat optimistic about
• 9:21
  Speaker 1: emerging markets generally. How does the FED play into this,
• 9:24
  Speaker 1: especially as they prepared to raise rates possibly tomorrow. Yeah,
• 9:28
  Speaker 1: the Fed historically at least our our view on how
• 9:32
  Speaker 1: the emerging markets have reacted to FED hiking cycle. If
• 9:36
  Speaker 1: it's matched with growth, then the emerging markets can typically
• 9:41
  Speaker 1: do pretty well. If not sideways, which with high yield
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  Speaker 1: is just a fine market. UM. To the extent that
• 9:47
  Speaker 1: the FED is hiking um too to cut growth right,
• 9:52
  Speaker 1: to put it into a recession or environment because they're
• 9:55
  Speaker 1: concerned but inflation, then that's bad. Um. We think we're
• 9:59
  Speaker 1: in the former ironment and UH and maintain a reasonably
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  Speaker 1: optimistic feed on most of these markets. Really interesting, Phil Torres,
• 10:05
  Speaker 1: thank you so much for being with us. Philterress, Global
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  Speaker 1: cohead of Emerging Markets and Director of Emerging Markets Research
• 10:10
  Speaker 1: at a GUN USA Asset Management with a hundred billion
• 10:14
  Speaker 1: dollars under management three hundred billion dollars under management worldwide
• 10:18
  Speaker 1: at the Global firm. We are broadcasting live from the
• 10:31
  Speaker 1: Bloomberg Interactor Broker's Studios. I'm Pim Fox along with Lisa Abramowitz.
• 10:35
  Speaker 1: Earlier today, President Donald Trump, speaking before the UN General Assembly,
• 10:40
  Speaker 1: said that China is taking advantage of the US on trade.
• 10:44
  Speaker 1: Here to tell us more about how companies are responding
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  Speaker 1: to the situation is Richard Chambers. He is the president
• 10:50
  Speaker 1: and the chief executive of the Institute of Internal Auditors.
• 10:54
  Speaker 1: They're based in Altamont Springs, Florida. He joins us here
• 10:57
  Speaker 1: in our eleven three oh studios. Richard Chain, thank you
• 11:00
  Speaker 1: very much for being here. You've written that US corporations
• 11:03
  Speaker 1: may have as a false sense of security regarding the
• 11:08
  Speaker 1: effects of trade uh confrontation between the United States and China.
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  Speaker 1: Explain why you believe that to be so well, you know,
• 11:15
  Speaker 1: as we've been first of all, thank you for having
• 11:17
  Speaker 1: me uh today. It's it's great to be here. As
• 11:20
  Speaker 1: we so often comment, when these risks start to emerge, UH,
• 11:25
  Speaker 1: there's a there's sort of an initial sense of of
• 11:28
  Speaker 1: denial that is, oh, this can't possibly get that bad,
• 11:31
  Speaker 1: and it's not going to create problems for us. Unfortunately,
• 11:35
  Speaker 1: sometimes that ends up happening. So as we've been surveying
• 11:38
  Speaker 1: at the heads of internal audit and publicly trading companies
• 11:41
  Speaker 1: and and other organizations, we're sort of seeing some of
• 11:44
  Speaker 1: that initial sense of denial, like, oh, well, this is
• 11:47
  Speaker 1: not going to really have a significant impact on our company,
• 11:50
  Speaker 1: so we're not gonna worry too much about it. And
• 11:53
  Speaker 1: that's the problem a lot of times is that you
• 11:56
  Speaker 1: see the storm approaching, but you don't respond until the
• 11:59
  Speaker 1: winds are picking up. What gives you confidence that the
• 12:02
  Speaker 1: storm is picking up in a way that companies are
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  Speaker 1: not recognizing, well, I think there have been plenty of
• 12:08
  Speaker 1: There's been plenty of articles and other publications in the
• 12:11
  Speaker 1: past week that have pointed out that, particularly in consumer
• 12:15
  Speaker 1: products and retail, the the impact of the tariffs on
• 12:20
  Speaker 1: all the products that are going to be imported are
• 12:22
  Speaker 1: going to UH have an impact in terms of the
• 12:25
  Speaker 1: cost of the products. UH will likely impact demand. As
• 12:30
  Speaker 1: refrigerators get more expensive or dishwashers get more expensive, that's
• 12:34
  Speaker 1: going to have an impact on the demand. So, particularly
• 12:37
  Speaker 1: in industries like retail and consumer products, there's certainly plenty
• 12:42
  Speaker 1: of evidence that this is going to have an impact
• 12:45
  Speaker 1: and you're not seeing that reflected by the CEOs, right, Yeah.
• 12:49
  Speaker 1: What we're seeing at this point is, uh, you know,
• 12:51
  Speaker 1: when we ask chief audit executives, heads of internal audit,
• 12:56
  Speaker 1: is this a significant risk for your company, we're still
• 12:58
  Speaker 1: giving an overwhelming response, No, we don't see this as
• 13:01
  Speaker 1: a significant risk at this point. Now, when when we
• 13:05
  Speaker 1: ask what what does your company think the risk of
• 13:07
  Speaker 1: the overall economy would be, almost sixty percent of them
• 13:11
  Speaker 1: responded to a survey last week that their companies think
• 13:14
  Speaker 1: there would be a significant risk of the overall economy.
• 13:17
  Speaker 1: But it seems to be one of those yeah, but
• 13:19
  Speaker 1: it's not gonna affect me kind of denials. I think,
• 13:22
  Speaker 1: do they understand that there's a contradiction and trying to
• 13:25
  Speaker 1: hold those two positions, or do you believe that, perhaps
• 13:27
  Speaker 1: for competitive reasons, they're just not willing to disclose to
• 13:30
  Speaker 1: you how worried or concerned or prepared they are. I
• 13:36
  Speaker 1: think it may be. I think it may be the former,
• 13:39
  Speaker 1: because we see this. I think one of the last
• 13:41
  Speaker 1: times I visited with you guys, we talked about the
• 13:44
  Speaker 1: me too movement and how slow companies were to recognize
• 13:48
  Speaker 1: the risk that that presents. I see a common thread
• 13:51
  Speaker 1: here in that when risks begin to emerge, there there's
• 13:55
  Speaker 1: sort of a reluctance to look at what is the
• 13:58
  Speaker 1: downstream impact of this risk. So if if in fact
• 14:02
  Speaker 1: the tariffs are implemented to the extent that it appears
• 14:05
  Speaker 1: they are going to be, what will come next? And
• 14:08
  Speaker 1: then what could happen after that? And oh, by the way,
• 14:10
  Speaker 1: how could that impact our company, our workforce, our investment um.
• 14:14
  Speaker 1: And that's what I think happens all too often, is
• 14:17
  Speaker 1: that when it comes to risk management, there's a slow
• 14:20
  Speaker 1: reluctance to accept that a risk may be very, very detrimental.
• 14:24
  Speaker 1: I want to shift gears a little bit. We were
• 14:27
  Speaker 1: talking yesterday with the Harvard professor who said that the
• 14:30
  Speaker 1: current market resembles something of a bubble in terms of
• 14:33
  Speaker 1: sentiment anyway, that is when accounting shenanigans are more likely
• 14:39
  Speaker 1: to happen when capital is flowing freely. To what degree
• 14:43
  Speaker 1: are you concerned that that is currently going on, where
• 14:46
  Speaker 1: perhaps when sort of the tide rolls back and credit
• 14:49
  Speaker 1: isn't as free flowing, we could see some serious problems. Well,
• 14:53
  Speaker 1: we've seen in the past when the economy started to
• 14:58
  Speaker 1: show signs of some sort of upheave. Uh, that there
• 15:01
  Speaker 1: is a lot of pressure and analyst expectations are put
• 15:05
  Speaker 1: out there. Companies have to meet those analyst expectations where
• 15:08
  Speaker 1: they get punished in the market. That's when we see
• 15:10
  Speaker 1: the risks start to rise of perhaps fraudulent financial reporting.
• 15:16
  Speaker 1: I think since the last major round of scandals where
• 15:19
  Speaker 1: fraudulent financial reporting was at the route back in the
• 15:22
  Speaker 1: early two thousand's, we have a lot more regulation and
• 15:26
  Speaker 1: control in place, but I still wouldn't say that are
• 15:29
  Speaker 1: still wouldn't put it out of the realm of possibility.
• 15:32
  Speaker 1: And so once again, when likelihood starts to go up,
• 15:35
  Speaker 1: that's one of the components of risk assessment. That's when
• 15:37
  Speaker 1: you need to start getting concerned. Are you at all
• 15:39
  Speaker 1: concerned about the tone that is reflected by the behavior
• 15:43
  Speaker 1: of people in Congress? And I'm talking about the House
• 15:46
  Speaker 1: of Representatives as well as senators and even those people
• 15:51
  Speaker 1: in the government and the way that they relate to
• 15:54
  Speaker 1: each other and using those as examples, you know, it's
• 15:58
  Speaker 1: it's interesting. I posted a blog last week about civility
• 16:01
  Speaker 1: in the boardroom. Uh, it seems to be the only place,
• 16:04
  Speaker 1: perhaps where there's still a lot of civility. Maybe too much,
• 16:07
  Speaker 1: and that board members don't challenge each other. But the
• 16:09
  Speaker 1: point I made is we're living in a society today
• 16:11
  Speaker 1: where civility seems to be held in much less high regard.
• 16:16
  Speaker 1: If if, if you can um and so I do think,
• 16:20
  Speaker 1: and I spent quite a bit of time in Washington
• 16:22
  Speaker 1: during my days as a federal employee. I do think
• 16:25
  Speaker 1: that the tone in Washington has definitely deteriorated in the
• 16:29
  Speaker 1: last few years, and and that comes from all sides.
• 16:32
  Speaker 1: I don't think that any one party or anyone group
• 16:35
  Speaker 1: is to blame. I think that's part of the challenge
• 16:38
  Speaker 1: that we face in society. Just real quick. When you
• 16:41
  Speaker 1: talk to auditors who are going around and checking out corporations,
• 16:45
  Speaker 1: is there anything that you've been hearing from them that
• 16:47
  Speaker 1: we haven't discussed that surprised you ums in terms of
• 16:52
  Speaker 1: like reviewing companies and sort of their position and whether
• 16:55
  Speaker 1: they're stronger than they seem or weaker than they seem
• 16:57
  Speaker 1: or No. I don't think that I've I've I've gotten
• 17:01
  Speaker 1: any indication from the internal auditors that there's a lot
• 17:05
  Speaker 1: of miss there. I do think that the internal auditors
• 17:08
  Speaker 1: sometimes are uh, they get caught up in the culture
• 17:11
  Speaker 1: of their organization maybe and they're a little slower to
• 17:14
  Speaker 1: recognize emerging risk. And it's one of the things that
• 17:16
  Speaker 1: we're always coaching them is that they have to be
• 17:18
  Speaker 1: able to detect the thunder before the storm, because if
• 17:22
  Speaker 1: they don't, then once once the real risks emerge, it's
• 17:26
  Speaker 1: going to be well, where were the internal auditors? And
• 17:29
  Speaker 1: it's very, very important that they get on in front
• 17:30
  Speaker 1: of these risks. Richard Chambers, thank you so much for
• 17:33
  Speaker 1: being with us. Thank you Richard Chambers as President chief
• 17:36
  Speaker 1: executive of the Institute of Internal Auditors. We are broadcasting
• 17:49
  Speaker 1: live from the Bloomberg Interactive Studios here at Bloomberg's World
• 17:53
  Speaker 1: headquarters in New York City. Facebook what is going on there?
• 17:57
  Speaker 1: Down at three quarters of one percent today after Instagram's
• 18:01
  Speaker 1: founders left the firm citing disagreements, with Facebook's leader joining
• 18:06
  Speaker 1: us now Shara Ovid, Bloomberg opinion columnists covering all things tech, Shira,
• 18:11
  Speaker 1: how bad is this for Facebook? Because frankly, actually, stock
• 18:14
  Speaker 1: traders are taking it relatively and stride, considering the Instagram
• 18:17
  Speaker 1: really is a profit engine or potential one for Facebook. Yeah,
• 18:21
  Speaker 1: I'm a little bit surprised at the relatively modest stock
• 18:24
  Speaker 1: declined to be honest. The look, the truth is, it's
• 18:27
  Speaker 1: gonna be hard to know how big a deal this
• 18:30
  Speaker 1: really is because it's going to be measured in what
• 18:33
  Speaker 1: doesn't Instagram do or what opportunities this Instagram miss if
• 18:37
  Speaker 1: it's distracted for a while by this leadership vacuum, or
• 18:41
  Speaker 1: as in fact, it loses some of its kind of
• 18:44
  Speaker 1: essential essence of Instagram nous. Well, sure, what exactly is
• 18:49
  Speaker 1: the problem with the two founders leaving. They've been there
• 18:52
  Speaker 1: for six years. What do they do on a day
• 18:55
  Speaker 1: to day basis that someone else can't do? Yeah? Fair enough.
• 18:59
  Speaker 1: I mean, look it, it's not uncommon right for a
• 19:02
  Speaker 1: company to acquire another company and then for the CEOs
• 19:06
  Speaker 1: or the founders of those acquired companies to eventually leave. Um. So,
• 19:10
  Speaker 1: I don't want to say this is some kind of
• 19:12
  Speaker 1: you know, criminal matter and things like that, but um,
• 19:16
  Speaker 1: it's true that both Instagram founders were had leadership positions
• 19:21
  Speaker 1: inside of Instagram. They had set up Instagram as this
• 19:24
  Speaker 1: kind of semi autonomous unit inside of Facebook, which I
• 19:28
  Speaker 1: think was important to the product independence of Instagram. Um,
• 19:34
  Speaker 1: and you know, they had leadership roles in Shepherd ng
• 19:38
  Speaker 1: Instagram through this kind of important period of growth for
• 19:41
  Speaker 1: the company. So yeah, there are plenty of executives at
• 19:44
  Speaker 1: Facebook who can fill the void. But I don't want
• 19:48
  Speaker 1: to downplay the importance of of Kevin Susterman Mike Krieger,
• 19:52
  Speaker 1: the two founders who at least until now had important
• 19:56
  Speaker 1: leadership roles and Instagram as well. Him is your daughter
• 19:59
  Speaker 1: on Facebook? Is your daughter on Instagram? Oh? Your strike
• 20:05
  Speaker 1: two strike too? That means that you're a better parents.
• 20:07
  Speaker 1: And I I found out the other night that my
• 20:09
  Speaker 1: son had signed up for Instagram. Who he's nine, um,
• 20:12
  Speaker 1: and he is not signed up for Facebook. Um. But
• 20:16
  Speaker 1: he was out there liking photographs and having followers, etcetera
• 20:20
  Speaker 1: very alarming whole host of other issues. But Sira, it
• 20:23
  Speaker 1: is notable to me that he signs up for Instagram,
• 20:26
  Speaker 1: and that's where that's where the actions act. Can you
• 20:28
  Speaker 1: give as a sense of just how much faster it's
• 20:30
  Speaker 1: growing and how much more dominant it's becoming as far
• 20:33
  Speaker 1: as a revenue driver than Facebook's really uh eponymous platform. Well,
• 20:39
  Speaker 1: we don't exactly know how fast it's growing because Facebook
• 20:43
  Speaker 1: keeps that data uh private, but it's certainly growing much
• 20:48
  Speaker 1: faster than the main Facebook social network cap which has
• 20:54
  Speaker 1: more than two billion users every month. So is there
• 20:57
  Speaker 1: is a limit to growth when you have you know,
• 20:59
  Speaker 1: a significant chunk of the world's population already using Facebook.
• 21:03
  Speaker 1: But it's clear that Instagram is an important growth trajectory,
• 21:07
  Speaker 1: both in terms of users. UM. We see in North
• 21:11
  Speaker 1: America the number of daily users on Facebook main Facebook
• 21:15
  Speaker 1: has flatlined recently, and that's a dangerous development for Facebook.
• 21:20
  Speaker 1: North America is not where the majority of users are,
• 21:24
  Speaker 1: but it is where the majority of ad revenue is,
• 21:27
  Speaker 1: and that's important for Facebook. And we've also seen that
• 21:30
  Speaker 1: as Facebook Facebook has some user growth issues, Facebook has
• 21:35
  Speaker 1: dialed up the number of advertisements on Instagram and pointed
• 21:39
  Speaker 1: a lot of advertisers too, the migration of users to
• 21:44
  Speaker 1: Instagram and their embrace of this relative still relatively novel
• 21:49
  Speaker 1: format that's popular on Instagram called stories, which is this
• 21:53
  Speaker 1: um kind of ephemeral diaries um composed of videos, short videos,
• 21:58
  Speaker 1: and photos. So Facebook is enormously important to the growth
• 22:03
  Speaker 1: strategy at Facebook, and losing these founders is not great
• 22:08
  Speaker 1: for what's been the most important growth asset at Facebook. Okay,
• 22:13
  Speaker 1: just to set the record right, I mean the two
• 22:15
  Speaker 1: founders sold Instagram to Facebook six years ago. Facebook paid
• 22:22
  Speaker 1: seven hundred and fifteen million dollars. At the time, the
• 22:27
  Speaker 1: company had thirteen employees and thirty million registered users. Now
• 22:31
  Speaker 1: they've got a billion people using Instagram each month, and
• 22:35
  Speaker 1: Bloomberg Intelligence analysis said that Instagram is worth more than
• 22:41
  Speaker 1: a hundred billion dollars. So it's not the same company
• 22:45
  Speaker 1: they sold to Facebook anymore. It's definitely not the same company.
• 22:48
  Speaker 1: And look both sides, both Facebook and the Instagram founders
• 22:53
  Speaker 1: deserve credit for that huge jump in in in assumed
• 22:58
  Speaker 1: valuation for Instagram. There's no way. Well, I can't say
• 23:01
  Speaker 1: that for sure. It would have been hard, I think
• 23:04
  Speaker 1: for Instagram to become such a valuable company outside of
• 23:08
  Speaker 1: Facebook's corporate umbrella. But at the same time, it wasn't
• 23:12
  Speaker 1: like Facebook's credit for the growing usage and evaluation of
• 23:18
  Speaker 1: Instagram under its auspices. Well done. Thank you very much.
• 23:22
  Speaker 1: Shira over Day are Bloomberg opinion columnists for all things
• 23:25
  Speaker 1: related to the world of technology. Thanks for listening to
• 23:32
  Speaker 1: the Bloomberg P and L podcast. You can subscribe and
• 23:35
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  Speaker 1: pim Fox. I'm on Twitter at Lisa Abramo. It's one
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