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Very Worried About 'Powder Keg' Brewing In US: Terrorism Expert Watts · Bloomberg Intelligence

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  Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,
• 0:05
  Speaker 1: along with my co host Lisa Brahma wits each day
• 0:07
  Speaker 1: we bring you the most noteworthy and useful interviews for
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  Speaker 1: you and your money. Whether at the grocery store or
• 0:12
  Speaker 1: the trading floor, find a Bloomberg Penl podcast on Apple
• 0:15
  Speaker 1: podcast or wherever you listen to podcasts, as well as
• 0:18
  Speaker 1: at Bloomberg dot com. Mayor Bill de Blasio, as well
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  Speaker 1: as Governor Cuomo of New York and President Trump alike
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  Speaker 1: all pointed to extremist elements that infiltrated a number of
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  Speaker 1: the protests around the country is instigating much of the violence.
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  Speaker 1: It went so far as President Trump recommending that Antifa,
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  Speaker 1: one of the groups that has been pinpointed designated a
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  Speaker 1: terrorist organization, joining us now to discuss this as well
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  Speaker 1: as next steps when it comes to the social unrest
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  Speaker 1: that we're seeing across the nation. As Clint Watt's a
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  Speaker 1: Distinguished Research Fellow at Foreign Policy Research Institute, also Senior
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  Speaker 1: Fellow at the Center for Cyber and Homeland Security at
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  Speaker 1: George Washington University, and a former FBI agent in the
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  Speaker 1: Counter Terrorism Units, clan so glad to be able to
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  Speaker 1: speak with you today. What do you make of these
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  Speaker 1: allegations that there were rogue anarchist factions infiltrated the protests.
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  Speaker 1: Does that seem to hold truth to you based on
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  Speaker 1: what you know? Yeah, thanks for having me. You know
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  Speaker 1: it increased this very fuzzy and convenient narrative. I think
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  Speaker 1: for a lot of leaders to just blame outsiders or
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  Speaker 1: extremists without getting into any specifics, and that can get
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  Speaker 1: really dangerous. It's not unheard of for any protest movement
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  Speaker 1: to have, regardless of the political orientation, some sort of
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  Speaker 1: extremist element within it that's conducting violence. Are trying to
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  Speaker 1: mobilize people to violence, and we've seen this over many decades.
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  Speaker 1: But the way it's been kind of cart blanche labeled
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  Speaker 1: as extremists or people from not here becoming the agitators
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  Speaker 1: really overplays I think to a degree that a lot
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  Speaker 1: of this is a protest movement, you know, that is
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  Speaker 1: based on something that we've seen over many years um
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  Speaker 1: and that yeah, sure they're going to people mobilizing towards violence,
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  Speaker 1: but I don't know what that group is, And so
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  Speaker 1: Antifa gets thrown in as a sort of label. But
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  Speaker 1: have you worked on this for a good while now
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  Speaker 1: and searching out information on ANTIFA. It is not the
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  Speaker 1: organized terrorist or extremist organization the way we tend to
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  Speaker 1: think of other groups in the past, and there's no
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  Speaker 1: real leader or specific organization. It's really just a collective
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  Speaker 1: name thrown onto a movement. So if your law enforcement
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  Speaker 1: and you're trying to deal with this, I don't think
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  Speaker 1: it really helps anything. And it's also not an official
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  Speaker 1: organization of any any real substantial size. Clint, how much
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  Speaker 1: staying power do you think some of these protests have.
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  Speaker 1: We've seen this in the past, unfortunately, um when you
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  Speaker 1: know other African American men have been subjected to you know,
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  Speaker 1: police brutality or other issues along those lines. We've seen
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  Speaker 1: this in the past. How much staying power do you
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  Speaker 1: think this particular movement has. I think in this case
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  Speaker 1: there are a lot of other drivers that are keeping
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  Speaker 1: it going that we haven't seen before. One, a lot
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  Speaker 1: of people are out of work and have been for
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  Speaker 1: quite some time, and hostilities and political partisanship have really
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  Speaker 1: divided the country over the last two to three months.
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  Speaker 1: I think the second thing is you've got extreme economic
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  Speaker 1: inequality right now. You know you have markets at are
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  Speaker 1: very high level at a time when unemployment is at
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  Speaker 1: an all time high, you know, at least in my lifetime.
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  Speaker 1: And then you add on to that it's an election year.
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  Speaker 1: You've got a powder keg like I've not seen in
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  Speaker 1: any time and since I've been born, which will potentially
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  Speaker 1: power these movements. You've also seen a very uh, militarized
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  Speaker 1: and aggressive response to the protest in certain cities. You've
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  Speaker 1: seen journalists being targeted or tax potentially, and you've seen
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  Speaker 1: this also take off in social media at a time
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  Speaker 1: when our foreign adversaries are trying to amplify and show
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  Speaker 1: discord inside the United States, and there's plenty of available
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  Speaker 1: content to do that. So I think this could go
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  Speaker 1: on for quite some time just looking at how many
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  Speaker 1: factors are compounding at the same time. So what could
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  Speaker 1: actually be done to stop it? Usually the solution for
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  Speaker 1: this is cool heads and leadership, And sadly, we're not
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  Speaker 1: at a point in our country right now where that's
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  Speaker 1: coming to fold. You're seeing, actually you're seeing politicians calling
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  Speaker 1: for use of extreme force on protesters, not sort of
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  Speaker 1: let's have some calm and come together. On several occasions
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  Speaker 1: yesterday you did see law enforcement leaders, sheriff's, you know, chiefs,
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  Speaker 1: trying to walk with the protesters, trying to mobilize. You've
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  Speaker 1: also seen protesters turning on the more extremist elements are
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  Speaker 1: you know, doing property damage or trying to inside violence.
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  Speaker 1: And so you're seeing some pushback that gets less coverage
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  Speaker 1: in the news, and it gets less social media shares,
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  Speaker 1: but it is out there. So what I'm hoping is
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  Speaker 1: that the political leaders won't use this divisiveness for their
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  Speaker 1: own political gain and realize that we're really at a
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  Speaker 1: turning point in the country where there's such distrust between
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  Speaker 1: law enforcement in the public, between institutions, the elected leaders
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  Speaker 1: in the public, that we're really at a dangerous point.
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  Speaker 1: Where my biggest concern right now is, you know, it's
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  Speaker 1: been twenty plus years since we had an Oklahoma City bombing, UM,
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  Speaker 1: but the conditions for this from many different directions are
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  Speaker 1: very high right now in terms of the outbreak of
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  Speaker 1: large lots of violence or very specific attacks on institutions, officials,
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  Speaker 1: law enforcement, or the public. UM. So I'm worried right
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  Speaker 1: now in ways I've never been worried before. Glenn, I
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  Speaker 1: gotta say, I think we all are worried, and I
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  Speaker 1: will just say, Paul, in full disclosure, there was a
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  Speaker 1: pretty serious altercation outside my apartment building that I was watching,
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  Speaker 1: and there were just as many individuals on the protests
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  Speaker 1: side who were carrying away fellow protesters to de escalate
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  Speaker 1: the situation, and you saw police officers also showing the
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  Speaker 1: strat I mean, there were a lot of responsible actors too.
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  Speaker 1: And I think that it is true, Paul, that we
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  Speaker 1: often do not cover that as much because it's not
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  Speaker 1: the thing that stands out from the whole scenario, but
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  Speaker 1: definitely is something that exists. Yeah, Clint, just one final
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  Speaker 1: thing here. I mean, much like the pandemic, the response
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  Speaker 1: to the pandemic, we're not seeing much leadership at the
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  Speaker 1: federal level here as it relates to these uh civil issues.
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  Speaker 1: It's kind of left to governors and really to the mayors,
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  Speaker 1: the frontline mayors. Is that problematic in and of itself?
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  Speaker 1: I think it is at this point because these are cities, towns, mayors,
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  Speaker 1: governors that have been under intense stress for three months
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  Speaker 1: and the resources have already been absolutely you know, plundered
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  Speaker 1: responding to COVID nineteen, and so if you look at
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  Speaker 1: New York City. This is three straight months of intense
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  Speaker 1: stress on the public system. UH law enforcement and emergency
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  Speaker 1: and responders are fighting a twin battle. You know, We've
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  Speaker 1: got the pandemic on one side, and you've got this
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  Speaker 1: sort of protest movements and spikes to violence on the other.
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  Speaker 1: And they're exhausted and worn out. And you look at
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  Speaker 1: healthcare workers, they've been fighting the battle for the country
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  Speaker 1: over the last three months. If you look at law
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  Speaker 1: enforcement first responders, they've been tied up in this. And
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  Speaker 1: so I think nerves are are afraid and intentions are
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  Speaker 1: going to remain high because we've asked a lot of
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  Speaker 1: these public servants and at the same point, the public
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  Speaker 1: UH needs our help and you can see that with
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  Speaker 1: the protests that are out there. We've had a serious
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  Speaker 1: problem about UH African Americans dying, you know, over many years,
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  Speaker 1: and it's really come to ahead. I think at this point,
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  Speaker 1: I think right. Clint Watts, thank you so much for
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  Speaker 1: jo me as Clint Watts is a Distinguished Research Fellow
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  Speaker 1: for the Foreign Policy Research Institute, also Senior Fellows the
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  Speaker 1: Center for Cyber and Homegown Security at George Washington University.
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  Speaker 1: Is also the author of the book Messing with the Enemy,
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  Speaker 1: giving us some much needed perspective on this rising civil
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  Speaker 1: unrest that is once again gripped this country and sweeping
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  Speaker 1: across the country. And will keep up to date on
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  Speaker 1: that news. You're listening to Bloomberg Markets with Lisa Abrama,
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  Speaker 1: Eds and Paul Sweeney on Bloomberg Radio. Well, there are
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  Speaker 1: so many cross currents for investors to discount these days.
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  Speaker 1: It's just been an extraordinary time in the markets. Of course,
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  Speaker 1: the pandemic and the economic fallout from the pandemic we've
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  Speaker 1: now had over the weekend. Uh, you know, rising levels
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  Speaker 1: of civil unrest that we've not seen in this country
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  Speaker 1: for decades. And and now even with the US China
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  Speaker 1: trade deal, we have that Phase one deal, but it
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  Speaker 1: looks like that could be facing some rough water. So
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  Speaker 1: really some major major cross currents for markets to digest.
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  Speaker 1: To get a sense of what's happening in the currency markets,
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  Speaker 1: most liquid markets, we welcome Dr Win Thin, Global head
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  Speaker 1: Currency Strategy at Brown Brothers Harriman, uh when thanks so
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  Speaker 1: much for joining us here give us a sense of
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  Speaker 1: how the currency markets have been digesting all of these
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  Speaker 1: cross currents of news. Just really over the last several
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  Speaker 1: days as we take a look at some of the
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  Speaker 1: major currencies. Of course, well, first of all, thanks again
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  Speaker 1: for for having me on UM. It's always a pleasure. Uh,
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  Speaker 1: you know, Like like other markets, I think, as you mentioned,
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  Speaker 1: there's just so many things that just um, you know,
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  Speaker 1: I think we've had these bounds of risk on, risk off,
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  Speaker 1: mostly tied to the US China tensions. And I think
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  Speaker 1: last late last week, it looked like in President Trump
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  Speaker 1: is gonna hold the press comments on Friday's announced some
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  Speaker 1: very significant measures. Markets got very nervous, equity spell dollar strengthened,
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  Speaker 1: But it turns to be much ado about nothing um.
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  Speaker 1: And I think what the signals to us to the
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  Speaker 1: FX markets is that despite all this tough talk, Mr
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  Speaker 1: Trump is I think unwilling to risk going down that
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  Speaker 1: road of trade war again. You know, we saw how
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  Speaker 1: how harmful it was for the markets last year, and
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  Speaker 1: going into the elections in November. I think it's uh,
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  Speaker 1: you know, I think it's a very risky strategy and
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  Speaker 1: to be something he stepped back that said. I think
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  Speaker 1: what I think it was interesting because China basically gave
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  Speaker 1: him a reminder that he's playing very We can just
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  Speaker 1: overnight China. It was reportedly Chinese authorities UM instructed their
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  Speaker 1: importers not to UH to pause their purchase of soybeans
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  Speaker 1: and perhaps pork from the US. So there's still risks
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  Speaker 1: the head UM, but it appears that the US China
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  Speaker 1: attentions may not be as bad as as previously thought.
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  Speaker 1: That's negative to dollar. That's that's positive for emerging markets
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  Speaker 1: and and and sort of the growth sensitive currencies such
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  Speaker 1: as the dollar block and scandies. So we're seeing now
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  Speaker 1: the dollar the week is to versus the basket of
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  Speaker 1: its pure currencies since early March. I'm struggling to understand.
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  Speaker 1: Is this just a risk on trade or is this
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  Speaker 1: some sort of comment on the US deficit and policy. Well,
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  Speaker 1: it's hard to separate the two. UM. I think the
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  Speaker 1: main drivers for the currency markets is the is the
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  Speaker 1: relative UH stance of the central banks, and really the
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  Speaker 1: dollars been on his back foot ever since. The FIT
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  Speaker 1: took very aggressive actions since March UH to basically have
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  Speaker 1: unlimited kwi UM zero rates, direct lendings, corporate sector. All
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  Speaker 1: that is is I think positive for the US economy
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  Speaker 1: long term, but near term negative for the dollar. Now,
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  Speaker 1: why do I say near term, well, I think other
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  Speaker 1: central banks are going to go down that road. The
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  Speaker 1: e CV meets Thursday, they're why they expected to increase
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  Speaker 1: their qui UM by five billion euros. Other central banks
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  Speaker 1: have really gone down the similar road um. But you know,
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  Speaker 1: for now the dollars we're being punished the most we
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  Speaker 1: saw that back during the financial crisis. I think there'll
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  Speaker 1: be some catch up. But to your point, there are
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  Speaker 1: other negatives now that are sort of looming ahead. One
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  Speaker 1: is that, for sure, the fiscal deficit of the US.
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  Speaker 1: These tensions, I'm not quite sure how to play them,
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  Speaker 1: and I don't think the market quite knows how to
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  Speaker 1: play them. We know there's gonna be social cost, economic costs,
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  Speaker 1: little cost, but they're not quite clear at this point.
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  Speaker 1: So Dr Thinn, I mean, I'm looking at the yuan
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  Speaker 1: right now at UH seven point one two seven. How
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  Speaker 1: much of a deal big deal should we make out
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  Speaker 1: of the wand being above what is historically it's as
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  Speaker 1: seven level in terms of pegging, Well, I think all
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  Speaker 1: eyes were on on that pair last week when it
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  Speaker 1: was threatening to breach the seventh twenty level. You know,
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  Speaker 1: these are levels we haven't seen since last September when
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  Speaker 1: you know, really at the height of the trade war.
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  Speaker 1: So we're still elevated. Um, you know, we're off that high.
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  Speaker 1: But you know, to me, it tells me that, okay,
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  Speaker 1: Marcus aren't quite quite on board with the Okay, the
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  Speaker 1: tensions are off the off the table. Um, it's something
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  Speaker 1: to keep an eye on. Um. But if you look elsewhere,
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  Speaker 1: the emerging market currents are saying, okay, you know, full
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  Speaker 1: speed ahead. Well, you know, things are looking good. You know.
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  Speaker 1: To me, the thing you know, I'm always you know,
• 12:53
  Speaker 1: sort of always look like the sort of contrarian viewpoints
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  Speaker 1: to me is, look, things tensions are okay. But you know,
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  Speaker 1: in China's data is stabilizing. But we had data out
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  Speaker 1: of Korea overnight exports and inputs are both contracting over
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  Speaker 1: twenty year over year still in May, despite what seems
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  Speaker 1: to be stabilizing in China. So my only warning to
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  Speaker 1: everyone who's piling onto this risk trade is that you know,
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  Speaker 1: we're far, far far from you know, actual growth. You know,
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  Speaker 1: we have still the risk of a second wave, but
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  Speaker 1: even without that, the globe economy still has a big
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  Speaker 1: hold a dig out of And I'm not so optimistic
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  Speaker 1: at some of these markets are saying, so what's your
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  Speaker 1: highest conviction call right now? My highest conviction call um
• 13:36
  Speaker 1: I would at this point, UH be lightning up e M.
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  Speaker 1: I don't think this is where e M should be
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  Speaker 1: given these risks. I decided, so I think this over
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  Speaker 1: This rallying emerging market currencies is overdone. Uh, Brazilian Real,
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  Speaker 1: Turkish Lyre, South African rand, these are all very risky
• 13:52
  Speaker 1: currencies that you really have no business being at levels
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  Speaker 1: they are right now. So you know, the worst maybe
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  Speaker 1: behind us, but again you know it's it's happy days
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  Speaker 1: are are still very far away from us. Uh. When
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  Speaker 1: how do you think about some of the European currencies here?
• 14:05
  Speaker 1: Looking at the pound and the euro uh putting some
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  Speaker 1: strength today. Yeah, that's I mean, that's another that that
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  Speaker 1: I probably my second highest conviction cause. And that's that's
• 14:16
  Speaker 1: Sterling is overdone. Uh. Look that we have the next
• 14:19
  Speaker 1: round of Brexit deal breakfit talks begin this week virtually
• 14:23
  Speaker 1: between the EU and the UK. They're very very far
• 14:26
  Speaker 1: apart on the deal they made the last meeting them
• 14:30
  Speaker 1: back in May. If if anything, took a step backwards,
• 14:32
  Speaker 1: because hard feelings things are very hurt coming out of
• 14:35
  Speaker 1: that and that's not a way to go forward. So
• 14:37
  Speaker 1: I think markets are underestimating the cause the risk of
• 14:41
  Speaker 1: a hard Brexit. The transition period ends into Sember thirty one.
• 14:44
  Speaker 1: If they can't come up with some quart of some
• 14:46
  Speaker 1: sort of deal before then UK goes crashing out, it's
• 14:49
  Speaker 1: gonna be very disruptive. Um. You know, I think the
• 14:52
  Speaker 1: pound tells me that the current I would say that
• 14:55
  Speaker 1: some sort of deal or extensions being priced in um.
• 14:58
  Speaker 1: But given how know that the UK is already dealing
• 15:01
  Speaker 1: with the pandemic and the you too, and to think
• 15:04
  Speaker 1: that they can get some sort of complicated trades you'll
• 15:07
  Speaker 1: done by the end of the year is to me
• 15:08
  Speaker 1: it's very very optimistic and I think misguided. And then
• 15:12
  Speaker 1: thank you so much for being with US Global head
• 15:14
  Speaker 1: of Currency Strategy at Brown Brothers Harriman. I gotta say
• 15:18
  Speaker 1: hearing Brexit actually fills me with nostalgia and it's ridiculous,
• 15:22
  Speaker 1: but I actually want to be talking about Brexit right
• 15:24
  Speaker 1: now given some of the other issues that had really
• 15:28
  Speaker 1: interesting though to hear Dr Thinn's ideas on emerging market
• 15:32
  Speaker 1: currencies right now, because that trade does seem to be
• 15:34
  Speaker 1: gaining steam a lot of people saying that the declines
• 15:37
  Speaker 1: and the currencies have been overdone, and yet here we
• 15:40
  Speaker 1: are facing a lot of unknowns at a time when
• 15:44
  Speaker 1: people are are moving out of the dollar into these
• 15:46
  Speaker 1: riskier assets. This is Bloomberg Markets with Lisa Ronald DS
• 15:54
  Speaker 1: and Paul's Wheeney on Bloomberg Radio. We don't talk enough
• 15:58
  Speaker 1: about reachs, but that has certainly been an area where
• 16:01
  Speaker 1: investors have consistently looked for dividend returns yield returns to
• 16:08
  Speaker 1: get a sense of what's going on in that market.
• 16:09
  Speaker 1: Given all the uncertainty we are seeing across asset classes,
• 16:12
  Speaker 1: We're welcome to have uh Emon Breven Loup, lead portfolio
• 16:16
  Speaker 1: manager of high income Equities and Global Rates at tc
• 16:19
  Speaker 1: W t c W maynow is a huge firm out
• 16:22
  Speaker 1: on the West Coast, two and twelve billion in assets firm.
• 16:25
  Speaker 1: Why uh, and and thanks so much for joining us here.
• 16:28
  Speaker 1: Give us a sense of how reads as a group
• 16:31
  Speaker 1: have performed over the last several months when we've seen
• 16:34
  Speaker 1: just unprecedented volatility. Sure well, thank you very much for
• 16:39
  Speaker 1: having me. Um. As you said, the sector has been
• 16:42
  Speaker 1: extremely volatile. The sector as a whole is down about
• 16:46
  Speaker 1: here to date, lagging d S and t by about
• 16:51
  Speaker 1: so it's definitely underperformed by a very meaningful amount. Well,
• 16:54
  Speaker 1: let's talk about the bifurcation within the reach segment. We have,
• 16:58
  Speaker 1: for example, commercial real estate, major cities under pressure as
• 17:01
  Speaker 1: people work from home and amid a host of other
• 17:04
  Speaker 1: issues raising questions about the centers of cities, and then
• 17:08
  Speaker 1: you have more suburban areas. Where do you see the
• 17:11
  Speaker 1: value right now? Well, that's a great question, and thank
• 17:14
  Speaker 1: you for asking that. You know, bafrication is definitely correct.
• 17:17
  Speaker 1: You know, people think of recent real estate perhaps as
• 17:21
  Speaker 1: uniform group and they're anything but so within the space data,
• 17:26
  Speaker 1: centers and towers have actually are performed very meaningfully. They're
• 17:30
  Speaker 1: up about um well as you would imagine, you know,
• 17:33
  Speaker 1: those sectors that are closer to the epicenter of the
• 17:36
  Speaker 1: of the pandemic, things like regional malls or hotels, you know,
• 17:40
  Speaker 1: down fifty year to date. Um. You know, our viewpoint
• 17:44
  Speaker 1: is that the pandemic is really accelerated certain secular trends
• 17:49
  Speaker 1: that were in the midst of being played out, and
• 17:51
  Speaker 1: you know, we envisioned that the same dynamics are going
• 17:54
  Speaker 1: to essentially prevail over the at least medium to long
• 17:57
  Speaker 1: term here. Um, so you know, we can continue to
• 18:00
  Speaker 1: see the towers, the data centers, the industrial space as
• 18:04
  Speaker 1: as benefiting from substantial tail winds, while you know, retail
• 18:08
  Speaker 1: really in all forms being really challenged. So let's talk
• 18:12
  Speaker 1: about office space. You know, this pandemic has changed the
• 18:15
  Speaker 1: way many work a lot more working from home here,
• 18:19
  Speaker 1: you're thinking about the office space segment. Is that a
• 18:22
  Speaker 1: net winner or net loser as we come out of
• 18:24
  Speaker 1: this pandemic? You think, yeah, you know, so that's a
• 18:27
  Speaker 1: that's a big question out there in the in the
• 18:29
  Speaker 1: you know, in the sector. You know, my personal belief
• 18:32
  Speaker 1: is that they're going to be net losers. And I
• 18:34
  Speaker 1: think by and large the success of work from home
• 18:37
  Speaker 1: models as as really surprised people. Um. You know, I
• 18:41
  Speaker 1: envisioned that, you know, going forward, that there's going to
• 18:44
  Speaker 1: be less demand for CBD you know, central business district
• 18:48
  Speaker 1: office space, and I think that's going to really put
• 18:50
  Speaker 1: pressure on pricing and rents for for those landlords. What
• 18:54
  Speaker 1: about multi family homes department buildings. Yes, so so similarly,
• 18:59
  Speaker 1: the SAIDs think the uh, you know, the demands there
• 19:03
  Speaker 1: from a secular standpoint is likely to be strong. But
• 19:07
  Speaker 1: I believe that the central business district versus perifer perif
• 19:10
  Speaker 1: free mix might be impacted. Um. I mean you know
• 19:13
  Speaker 1: you're seeing you know, the protests of course on TV,
• 19:17
  Speaker 1: you know, pretty graphic videos being shared. The first order
• 19:21
  Speaker 1: effects are are are are pretty clear, you know, with
• 19:23
  Speaker 1: regards to retail and the damage that that's going to
• 19:26
  Speaker 1: cause their um you know, increased concessions on behalf of
• 19:30
  Speaker 1: tenants from landlords. Um. I think the secondary impact there
• 19:34
  Speaker 1: is going to be, you know, certainly used the protest
• 19:36
  Speaker 1: persist perhaps the tilting of the premium you know, central
• 19:40
  Speaker 1: business district over perif free, that premium may not be
• 19:43
  Speaker 1: as pronounced on a go forward basis. So about some
• 19:47
  Speaker 1: of the we've heard stories about businesses not being able
• 19:50
  Speaker 1: to pay their rent and you know, ultimately, you know,
• 19:53
  Speaker 1: as we head into the third month here, ultimately that
• 19:55
  Speaker 1: impacts uh some reads. Where are you seeing signs of
• 19:58
  Speaker 1: stress in the read market right now? Wow? Yes? So
• 20:03
  Speaker 1: it's really all over, you know, except for those areas
• 20:07
  Speaker 1: that do benefit from you know, work from home models,
• 20:10
  Speaker 1: so you know, except for um towers, data centers and industrials.
• 20:15
  Speaker 1: Industrials you can think of these as as warehouses owners
• 20:18
  Speaker 1: to you know, things like Amazon distribution center and so
• 20:21
  Speaker 1: so forth. It's really been everywhere, Paul. So the office space,
• 20:26
  Speaker 1: you know, is in the midst of being redefined. Um.
• 20:29
  Speaker 1: The retails, you know, as we mentioned, is in the epicenter.
• 20:33
  Speaker 1: Hotels and lodging for sure. You know, all leisure activities
• 20:37
  Speaker 1: essentially ceased. So I think these are questions that are
• 20:40
  Speaker 1: going to be answered over you know, over kind of
• 20:42
  Speaker 1: a near to medium term time frame. You know, how
• 20:44
  Speaker 1: much demand instruction is there. Thanks for listening to the podcast,
• 20:48
  Speaker 1: and you can subscribe and listen to interviews that Apple
• 20:50
  Speaker 1: podcast or whatever podcast platform you prefer on Twitter. Finally,
• 20:56
  Speaker 1: brown Woids, I'm on Twitter at least one for the
• 20:59
  Speaker 1: podcast can always catch us worldwide and revert back to
• 21:03
  Speaker 1: those long term secular drivers than everybody's driven the space.
• 21:07
  Speaker 1: You know, things like big data and ability. You know,
• 21:09
  Speaker 1: these are big tuns impacting the broader markets e commerce,
• 21:14
  Speaker 1: also certain nascent as teams such as artificial intelligence, you know, astronomy,
• 21:19
  Speaker 1: striving technology. Um, you know, those are really the things
• 21:22
  Speaker 1: that I think, over a long term, have the potential
• 21:25
  Speaker 1: to shape you know, the dynamics with den real estate.
• 21:28
  Speaker 1: We have to get you back on a lot more
• 21:29
  Speaker 1: to talk about, including low interest rates and how that
• 21:33
  Speaker 1: may also affect the picture in demand for a variety
• 21:36
  Speaker 1: of different real estate Iman Brive and Lou thank you
• 21:38
  Speaker 1: so much for being with us, lead portfolio manager of
• 21:40
  Speaker 1: tc W High Income Equities and TCW Global Reads. Definitely
• 21:45
  Speaker 1: a a multifaceted area, the real estate Investment trust area,
• 21:51
  Speaker 1: as not all real estate is even I will say
• 21:54
  Speaker 1: it has been notably positive outside of cities in terms
• 21:57
  Speaker 1: of demand for housing, in terms of p while not
• 22:00
  Speaker 1: wanting to sell their homes and a lot of people
• 22:03
  Speaker 1: wanting to buy them. It'll be interesting to see whether
• 22:05
  Speaker 1: that continues as the downturn makes its way forward. A
• 22:09
  Speaker 1: lot of unknowns right now, Paul, Yeah, a lot of
• 22:11
  Speaker 1: people fleeing cities, Lisa going for the suburbs, whether it's
• 22:14
  Speaker 1: you know, short term rentals or long term buys. A
• 22:16
  Speaker 1: little bit of demand they're coming out of the pandemic. Yeah,
• 22:19
  Speaker 1: although we've seen this movie before, don't count New York
• 22:22
  Speaker 1: City or all of big cities out just yet. This
• 22:26
  Speaker 1: is Bloomberg Markets with Lisa Bramowitz and Paul Sweeney on
• 22:30
  Speaker 1: Bloomberg Radio. Well, the COVID pandemic has acted as an
• 22:34
  Speaker 1: accelerant on a lot of trends that were in effect
• 22:38
  Speaker 1: ahead of this apocle or crisis, however you want to
• 22:42
  Speaker 1: put it. And there is a question about the advertising sector,
• 22:45
  Speaker 1: and particularly online, what it has done in that space.
• 22:50
  Speaker 1: Joining us now as Scott Kessler, Global Sector lead for Technology,
• 22:53
  Speaker 1: Media and Telecommunications at Third Bridge in New York, Scott,
• 22:57
  Speaker 1: thank you so much for being with us. I want
• 23:00
  Speaker 1: to start there, and you've talked a little bit about
• 23:02
  Speaker 1: how we're seeing that acceleration in a sea change amid
• 23:06
  Speaker 1: online advertising. Can you talk a little bit about what
• 23:09
  Speaker 1: you're seeing. Yeah, thanks all. At least though, so you know,
• 23:13
  Speaker 1: a Third Bridge, what we do is we talk with
• 23:15
  Speaker 1: sea level executives and industry experts to get a sense
• 23:19
  Speaker 1: of what's going on in the world and try to
• 23:21
  Speaker 1: understand what's going to happen next. And based on the
• 23:23
  Speaker 1: conversations that we have, it's pretty obvious that in March
• 23:27
  Speaker 1: we saw lockdowns across the country that caused a lot
• 23:32
  Speaker 1: of advertisers to retrench and retrench very significantly, and so
• 23:37
  Speaker 1: we saw demand for advertising and related pricing um really
• 23:41
  Speaker 1: declining precipitously and bottoming out um to a large extent
• 23:45
  Speaker 1: in March, we've seen um continuing improvement, it seems um
• 23:52
  Speaker 1: through the last week or two UM. And the question
• 23:56
  Speaker 1: really now is how long will the rebound be. People
• 24:03
  Speaker 1: were talking to indicate that it might take a while
• 24:07
  Speaker 1: next year back until we see a stronger um resurgence
• 24:13
  Speaker 1: in demand for even digital and social media advertising. So, Scott,
• 24:18
  Speaker 1: you've been covering the media and TMT space for decades.
• 24:22
  Speaker 1: Is your sense here that this pandemic and the change
• 24:25
  Speaker 1: in consumer behavior is is it really going to accelerate
• 24:29
  Speaker 1: the death of more traditional media as a dollars shift
• 24:33
  Speaker 1: from you know kind of on you know, from uh,
• 24:37
  Speaker 1: analog to online. Yeah. So, Paul, the way I think
• 24:41
  Speaker 1: that it makes sense to think about is, you know,
• 24:45
  Speaker 1: we're talking to a lot of people, and I think
• 24:47
  Speaker 1: all of them are in agreement on a couple of things.
• 24:50
  Speaker 1: One is that what's happening now is causing advertisers to
• 24:55
  Speaker 1: re examine how they allocate capital for advertising purposes, and
• 24:59
  Speaker 1: it's caused and acceleration to shift from traditional media to
• 25:07
  Speaker 1: digital media. And then in addition to that, it seems
• 25:11
  Speaker 1: like folks are gravitating towards you know, those large, very
• 25:17
  Speaker 1: strong and very impactful platforms like Google and like Facebook,
• 25:23
  Speaker 1: and perhaps not as much so with ones that are
• 25:26
  Speaker 1: more experimental in nature like a snapchat or Twitter, for example, Scott,
• 25:33
  Speaker 1: as we speak or speaking against a backdrop of growing
• 25:36
  Speaker 1: tension and a host of different issues in this transforming world,
• 25:39
  Speaker 1: including a lot of social tension, and we're seeing a
• 25:43
  Speaker 1: lot of these online companies, these platforms come really at
• 25:47
  Speaker 1: the crosshairs of it. I'm thinking of Twitter, for example,
• 25:50
  Speaker 1: putting on a warning to one of President Trump's Twitter posts.
• 25:54
  Speaker 1: What is the responsibility of these social media platforms in
• 25:59
  Speaker 1: terms of siding which advertisements they allow onto their site.
• 26:04
  Speaker 1: Do they have an obligation on any level or frankly
• 26:08
  Speaker 1: the right to say we want this ad, we don't
• 26:11
  Speaker 1: want that ad. Yeah, you know, at least it's the
• 26:16
  Speaker 1: tough topic of our time at this point, among others,
• 26:20
  Speaker 1: um And I would say is that it seems like
• 26:25
  Speaker 1: this is going to be a discussion that's going to
• 26:27
  Speaker 1: take place, you know, not for days or weeks, but
• 26:30
  Speaker 1: probably for months and months. I think it's fair to say, though,
• 26:33
  Speaker 1: that this is something that people need to think about,
• 26:36
  Speaker 1: and I don't have you have to be honest, if
• 26:40
  Speaker 1: it makes sense for letting consumers, so to speak, decide,
• 26:44
  Speaker 1: or if the platforms have to become more involved in
• 26:49
  Speaker 1: determining something is truthful and whether something needs to be
• 26:53
  Speaker 1: fact checked comprehensively. Scott, thanks so much for joining us.
• 26:57
  Speaker 1: We appreciate your input as we. Scott Kessler, global Sector
• 27:02
  Speaker 1: lead for Technology, Media and Telecommunications at Third Bridge, spent
• 27:06
  Speaker 1: decades at SMP as an analyst covering TMT knows what
• 27:10
  Speaker 1: he's talking about. LESA. I think you raised a really
• 27:12
  Speaker 1: important point, and it's something you know. Scott suggested that
• 27:15
  Speaker 1: this industry needs to get ahead of very quickly because
• 27:18
  Speaker 1: before the pandemic there was growing uh you know, I
• 27:21
  Speaker 1: think uh momentum for the social media industry and technology
• 27:25
  Speaker 1: broader uh to come under some regulatory scrutiny that maybe
• 27:28
  Speaker 1: had had escaped in the past, um and to the
• 27:31
  Speaker 1: extent that they don't get their house in order that
• 27:34
  Speaker 1: they definitely faced uh, some risk of greater federal um,
• 27:39
  Speaker 1: you know, I think oversight. Yeah, although I want to
• 27:41
  Speaker 1: say that the message from markets has not been that.
• 27:43
  Speaker 1: The rest of message from markets has been the more
• 27:46
  Speaker 1: that they are a free market platform and allow whatever
• 27:49
  Speaker 1: however on their website, the better their platform rather the better, right.
• 27:53
  Speaker 1: I mean, we saw this on Facebook versus Twitter, with
• 27:55
  Speaker 1: response to how they addressed some of the more provocative
• 27:59
  Speaker 1: statements from different leaders. That's that's honestly. In markets, the
• 28:02
  Speaker 1: answer was Facebook did it right, Twitter did it wrong.
• 28:05
  Speaker 1: The social obligation piece, whatever that may be, and it's
• 28:07
  Speaker 1: very controversial, would have to come from a regulatory stance,
• 28:11
  Speaker 1: and that's very difficult to see happening in short order,
• 28:13
  Speaker 1: certainly heading into an election year, certainly amid the backdrop
• 28:16
  Speaker 1: of a recession. So I think that that's sort of
• 28:18
  Speaker 1: the calculus that we're seeing playing out in markets right now. Yeah,
• 28:21
  Speaker 1: exactly right. Again, heading heading into the pandemic, there was
• 28:24
  Speaker 1: some uh building momentum for some regulation that obviously, because
• 28:27
  Speaker 1: of all the other things going on, Lisa has taken
• 28:30
  Speaker 1: a back burner stance. So again technology continues to royal.
• 28:34
  Speaker 1: But again, it's gonna be interesting to see how some
• 28:36
  Speaker 1: of these social networking platforms handle the upcoming election, because
• 28:40
  Speaker 1: clearly focus is going to be on them their behavior
• 28:44
  Speaker 1: and to the extent that they are impacted or allow
• 28:48
  Speaker 1: their platforms to impact the upcoming election, that will be
• 28:51
  Speaker 1: a clear issue for Washington. Thanks for listening. To the
• 28:56
  Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
• 28:58
  Speaker 1: to interviews at Apple Podcast or whatever podcast platform you prefer.
• 29:02
  Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa
• 29:05
  Speaker 1: Abram Wohit's I'm on Twitter at Lisa Abram whits one.
• 29:08
  Speaker 1: Before the podcast, you can always catch us worldwide. I'm
• 29:11
  Speaker 1: Bloomberg Radio