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DraftKings, Tech, Marijuana, and Steve Cohen (Podcast) · Bloomberg Intelligence

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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
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Speaker 1: my co host Matt Miller. Every business day we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Well, the most read story,
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Speaker 1: has Matt Miller pointed out to me, is from our
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Speaker 1: good friends in Zirch, Credit Swiss Group. Are there, then, sir,
0:28
Speaker 1: not Geneva? Right, that's where the base Yeah, they're both
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Speaker 1: in Zurich. Okay, alright. Credit Swiss Group offered to buy
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Speaker 1: back up the three billion dollars of its own debt
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Speaker 1: and a move aimed to coming investor Jitters ahead of
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Speaker 1: the unveiling of a crucial strategy revamp later this month.
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Speaker 1: Let's bring in Allison Williams. She's our senior banks analyst
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Speaker 1: of Bloomberg Intelligence. She's been coming the banking industry on
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Speaker 1: a global basis for decades. So, Alison, what does this
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Speaker 1: mean to you? What does this mean for I guess
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Speaker 1: equity investors, for creditors here for Credit Swiss, I think
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Speaker 1: like like a lot of things that have happened over
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Speaker 1: the past week, it's it's sort of more symbolic than
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Speaker 1: anything else. It is a way for them to come
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Speaker 1: out and say that, you know, we have ample liquidity
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Speaker 1: in a way that people will believe if you will
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Speaker 1: so as we know, um, over many years, when banks
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Speaker 1: come out and say they don't need capital, they have liquidity,
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Speaker 1: it ends up sometimes having the opposite effect, which is
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Speaker 1: actually what we saw earlier this week in an effort
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Speaker 1: to calm things. It didn't And by coming out today
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Speaker 1: and doing this offer, they're showing that they do have
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Speaker 1: you know, they do have ample liquidity, that's not the issue,
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Speaker 1: and you are seeing the intended effect, which is some
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Speaker 1: studying in the stock and bonds in fact on a
1:48
Speaker 1: very red screen today. Um, the stock is up it
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Speaker 1: it was doing better earlier in the day. Is there
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Speaker 1: is there an actual playbook like did John cry and
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Speaker 1: have a leather bound book that he handed over to
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Speaker 1: the leadership at Credit Squeeze because Deutsche Bank did the
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Speaker 1: exact same thing. Um, right when right when they're uh,
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Speaker 1: you know when when there was a concern about liquidity
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Speaker 1: of the German bank, Well, and I think it is UM.
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Speaker 1: You know, I think it is a tactical move UM
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Speaker 1: to study things. I do think that the situations are
2:23
Speaker 1: are a little bit different in the sense that UM,
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Speaker 1: you know, credit sweet perhaps as a little bit a
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Speaker 1: little bit more to build on if you look at
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Speaker 1: their some of their higher returning businesses, UM, whereas UH
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Speaker 1: Deutsche Bank, I think, you know, their their portfolio is
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Speaker 1: under what was under a lot more pressure, and you know,
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Speaker 1: after three years of restructuring, I think they're finally coming
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Speaker 1: out of it, which is a positive UM. But both banks.
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Speaker 1: The similarity is when you come out and we've been
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Speaker 1: talking about this this week, when you come out and
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Speaker 1: say we're gonna come out with a plan it's going
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Speaker 1: to be in several weeks and UM without saying it
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Speaker 1: investors knowing that that might include a capital raise. It's
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Speaker 1: it's uncertainty and it's sort of UM obviously can can
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Speaker 1: recap it in a tough market. And so I think
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Speaker 1: also having this news come out on a Friday, UM,
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Speaker 1: you know, we'll make for a much less stressful and
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Speaker 1: must less uncertain weekend. Hopefully UM that when we saw
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Speaker 1: last weekend when there were a lot of stories and
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Speaker 1: a lot of posts going around and they come out
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Speaker 1: in uh, you know, two weeks and say we need
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Speaker 1: to raise five billion dollars after they just blew three
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Speaker 1: billion dollars on their own debt. Well again, I think
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Speaker 1: that to the extent, you know, the issue with credit
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Speaker 1: sueets right now is the bargaining position that they're in
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Speaker 1: in terms of, uh, you know, the price that they're
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Speaker 1: going to pay if you will to issue that capital
3:52
Speaker 1: right so as the stacko's lower gets less attractive, and
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Speaker 1: also negotiations that they might be having with a potential
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Speaker 1: buyers or investors UM the investment bank to securitized product
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Speaker 1: group UM is something that they would like to get
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Speaker 1: external capital. It seems like that makes the most sense
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Speaker 1: if they can get a good price. The markets are
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Speaker 1: obviously UM putting them in a bad position. I think
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Speaker 1: if they can study things and sort of improve their
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Speaker 1: negotiating position and give themselves the couple of weeks that
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Speaker 1: they need to really put together a solid plan, because
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Speaker 1: if they're going to come out and raise capital, you know,
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Speaker 1: they're they're going to want a credible plan to offer
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Speaker 1: to investors who are going to give them that capital. Alison,
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Speaker 1: is there any appetite at all within the Swiss government
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Speaker 1: to maybe permit ubs and credit Swiss to ever merge.
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Speaker 1: I believe that's unlikely. Um. You know, we've always said,
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Speaker 1: you know, not impossible, but very unlikely. If you think
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Speaker 1: about ubs and credit suits and the size of those
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Speaker 1: banks in particular related to the Swiss economy U. Um,
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Speaker 1: it's really outside versus some of the bigger banks we
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Speaker 1: have here. So we have much bigger banks, but we
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Speaker 1: also have a much bigger economy, and for that reason,
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Speaker 1: the Swiss regulators have sort of bigger capital requirements for
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Speaker 1: these banks, um. Because the two each on their own
5:19
Speaker 1: are so significant to the economy. So I think it
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Speaker 1: would be tougher um to think about, you know, the
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Speaker 1: pair together. To the extent though that credit Sweeze is
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Speaker 1: going to reduce its bounce sheet, reduce some of these
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Speaker 1: investment backing activities, perhaps that does clear something clear the
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Speaker 1: way for something down the road. Um. But again I
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Speaker 1: guess we'll have to see what the new credit sweeze
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Speaker 1: is going to look like. Where's the where's the office
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Speaker 1: down town? Where's the New York office? Madisone levin Madison Avenue?
5:48
Speaker 1: Fantastic building? Is it? A big restaurant right there. We
5:55
Speaker 1: used to go there, like you know, when it just opened,
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Speaker 1: it wasn't anything, so we'd go down there to scrap
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Speaker 1: dinner after work. And now you it's again one of
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Speaker 1: the top restaurants around period. So I don't know. They
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Speaker 1: have a great New York City office. Credit Swiss. First
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Speaker 1: Boston is a great place to work for me, a
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Speaker 1: good memories. But I have to admit, and I've spoken
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Speaker 1: to Allison a lot about this, it just seems like
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Speaker 1: every two or three or four years they blow themselves up,
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Speaker 1: and that goes back thirty years as far as I
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Speaker 1: can recall, Allison Williams, thanks so much for joining us.
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Speaker 1: Allison covers all the big banks for Bloomberg Intelligence. She's
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Speaker 1: based in our Princeton office, and she's been doing that
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Speaker 1: for decades. Before she was at Bloomberg in Tellgent, she
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Speaker 1: was at Morgan Stanley Investment Management the by side, and
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Speaker 1: they owned huge steaks in all of the big financial
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Speaker 1: institutions across the world, and Allison was the analyst supporting
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Speaker 1: all that stuff. So we appreciate getting her thoughts here.
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Speaker 1: Credit Swiss. Trying to steady the ship. Gonna have a
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Speaker 1: new strategy coming out later this month, and we'll be
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Speaker 1: covering that as well. All Right, sports gambling, sports betting
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Speaker 1: in sport, it is just a huge business. You know,
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Speaker 1: it's a real business. When Bloomberg actually has a TV show,
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Speaker 1: Bloomberg Television talking about the business of sports betting, and
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Speaker 1: it is in the news this week again, ESPN is
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Speaker 1: said to be near a large partnership with Draft Kings. Uh,
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Speaker 1: that's getting a lot of interest. We want to talk
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Speaker 1: about that. We're gonna be with Kaylee Lines. She is
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Speaker 1: a Bloomberg Television anchor for us and joining us and
7:24
Speaker 1: she's here in our Bloomberg interactor Brooker studio. Joining us
7:26
Speaker 1: on the phone is Keith Rung and Athan. She covers
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Speaker 1: all things media and against her better judgment, she has
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Speaker 1: had to learn about the gambling business and the gaming
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Speaker 1: business because of Mickey Mouse is getting into it. You've
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Speaker 1: gotta pay attention, Kaylee. That's the crazy part, right part
7:41
Speaker 1: is getting into an addictive vice that Bruin's families exactly
7:44
Speaker 1: and go figure, that's how the world's changed. So Kaylee,
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Speaker 1: let's start there. Talk to us about the sports betting business.
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Speaker 1: First of all, talk to us about that and it
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Speaker 1: talks about how your show addresses it. Yeah. So the
7:54
Speaker 1: show is called The Lineup. It's on Friday nights and
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Speaker 1: Saturday mornings on Bloomberg Television and it essentially just at
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Speaker 1: sports bets historically what has paid off for different leagues,
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Speaker 1: but then also just the business of betting, because it
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Speaker 1: is huge and this is why you're seeing ESPN having
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Speaker 1: a growing interest. When you look at the handle, which
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Speaker 1: is the total dollar amounts that spent on sports wagers
8:14
Speaker 1: in the US, it could reach a hundred billion dollars
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Speaker 1: this year because you've had legalization. Now it's getting legalized
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Speaker 1: in more and more states, and it's just this incredible
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Speaker 1: boom and a lot of people are looking to take
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Speaker 1: advantage of it. And we thought that was something worthy
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Speaker 1: of digging into more. And we haven't even gotten into
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Speaker 1: betting the way other cultures. Yeah. I mean, if you
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Speaker 1: grew up in the UK, you understand spread betting by
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Speaker 1: the time you entered school. Well, they have sixty years
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Speaker 1: of history on their side. It's it's relatively new here
8:40
Speaker 1: in the US exactly. So so what is this going
8:43
Speaker 1: to Farrell walked by, He's like, yep, that's Barrel knows
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Speaker 1: how to do it. Uh, what does this mean for
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Speaker 1: for ESPN, for Disney? I mean, are we going to
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Speaker 1: be able to place bets on ESPN dot Com. No.
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Speaker 1: I don't think that's what they're trying to do here, Matt.
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Speaker 1: I think it's really what what they want to do
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Speaker 1: is license their name out to a sports book. They're
9:07
Speaker 1: not looking to actually create a sports book per se,
9:09
Speaker 1: because there's just too many operational, too many regulatory headaches
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Speaker 1: associated with that. Rather, I think what they're looking to do,
9:14
Speaker 1: and this has kind of been in the news now
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Speaker 1: for almost a year. I think they've been looking to
9:18
Speaker 1: partner with some of the sports book operators their Draft Kings,
9:21
Speaker 1: of course in the news today. Um just kind of
9:24
Speaker 1: licensing out their name and probably integrating um, you know,
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Speaker 1: odds data with the ESPN broadcast. Basically kind of a
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Speaker 1: win win for both because it widens the audience for
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Speaker 1: both the Draft Kings as well as for ESPN. So,
9:40
Speaker 1: you know, Gith, I guess you know, the media companies,
9:42
Speaker 1: they're you know, obviously always looking for new revenue streams,
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Speaker 1: whether it's advertising from some of these sports books or
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Speaker 1: doing you know, a deal actually getting you know, in
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Speaker 1: bed if you will, with with the DraftKings in this
9:54
Speaker 1: particular example, how the media companies kind of changed their
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Speaker 1: view of just kind of sports betting because boy, for
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Speaker 1: the longest time it was taboo. Oh absolutely, Pole, You're
10:05
Speaker 1: absolutely right about that. I mean, it kind of goes
10:08
Speaker 1: against the grain a little bit of you know, Disney's
10:11
Speaker 1: you know, family friendly ethos if you will. But they
10:14
Speaker 1: do realize that they're leaving money on the table here.
10:16
Speaker 1: So if you just kind of look at some of
10:18
Speaker 1: the financials for ESPN, ESPN will bring in about thirteen
10:22
Speaker 1: and a half billion dollars in revenue for the for
10:25
Speaker 1: the Walt Disney Company about four point q billion by
10:28
Speaker 1: our calculations of EBITDA. That's going to be about of
10:31
Speaker 1: the pair and companies, so a pretty sizable number. The
10:35
Speaker 1: problem though, is that ESPN is losing subscribers just like
10:39
Speaker 1: the left the rest of the cable network ecosystem, and
10:43
Speaker 1: we actually estimate that they're even down, maybe down by
10:45
Speaker 1: about so they have to come up. So there are
10:49
Speaker 1: two things here. They have to come up with new
10:51
Speaker 1: cost cutting incentives, and they've done that, so they let
10:53
Speaker 1: go of the Big ten rights. For instance, they let
10:56
Speaker 1: go of I P. L. Cricket rights in India, but
10:59
Speaker 1: they also have to look to grow their revenue and
11:01
Speaker 1: that's exactly what this is about, monetizing their audiences, trying
11:05
Speaker 1: to find new streams of revenue. As you pointed out,
11:09
Speaker 1: so um kylie, when you're anchoring the lineup, what do
11:12
Speaker 1: you uh with with Damian Sassaur too, who is a
11:16
Speaker 1: maniac on this stuff. He is so knowledgeable on this
11:19
Speaker 1: whole sports betting thing. I mean, you get him started,
11:22
Speaker 1: he can't stop. But how deep does it go? It's
11:24
Speaker 1: not just about betting if like the Cowboys win against
11:27
Speaker 1: the Giants, right, I mean, it's so much more complex
11:29
Speaker 1: than that. Yeah, I mean you can get really granular
11:32
Speaker 1: with these things. There are simple money line bets where
11:34
Speaker 1: you're just betting on who's going to win and who's
11:36
Speaker 1: going to lose. And we have troves and troves of
11:38
Speaker 1: historical data from our partners sport Radar that help us
11:40
Speaker 1: analyze historically when you look over the course of say
11:43
Speaker 1: ten seasons, when usually those bets will pay off. But
11:46
Speaker 1: you can bet on anything. You can bet on what
11:48
Speaker 1: color the gator rate is going to be when it
11:49
Speaker 1: gets dumped on the coach ahead at the end of
11:51
Speaker 1: the game. I mean it gets, it gets super super granular,
11:54
Speaker 1: and it's the barrier to entry right now is really low.
11:57
Speaker 1: You can do this on mobile. You can do it
12:00
Speaker 1: basically anywhere except for the states were legal. But regulation
12:03
Speaker 1: is changing. Is it still changing or have we gotten
12:06
Speaker 1: to a point where we think it's we understand it well.
12:09
Speaker 1: It is now legal in a number of states, really
12:12
Speaker 1: the only big ones that haven't come online yet or
12:14
Speaker 1: Texas in California, but you can do it here in
12:16
Speaker 1: New York. Um. And so it definitely is still a
12:19
Speaker 1: nascent industry and that this only has been legal for
12:22
Speaker 1: several number of years, and obviously it will evolve. But
12:25
Speaker 1: just the fact that you can do it and people
12:26
Speaker 1: are taking advantage of doing it and you're seeing the
12:29
Speaker 1: growth is kind of kind of the point here. And
12:32
Speaker 1: what we're trying to see z on and so we
12:34
Speaker 1: we've got you know, ESPN, you know, kind of dipping
12:37
Speaker 1: its toe into this business, maybe even more than dipping it. Still.
12:39
Speaker 1: How about some of the other networks, whether it's Fox
12:41
Speaker 1: or CBS or NBC. Have you seen any moves on
12:44
Speaker 1: their part? Yeah, actually they all have some stake. Um,
12:50
Speaker 1: you know, in a bedding platform. So Fox actually has
12:52
Speaker 1: been really aggressive I think on on this front. They
12:56
Speaker 1: have a deal with a flutter um and uh you
13:00
Speaker 1: know which owns fan Duel here in the US, UM
13:04
Speaker 1: and they have all they all they have almost a
13:06
Speaker 1: four percent stake, but they're right now actually in arbituation
13:09
Speaker 1: because UM about how to kind of exercise their options there.
13:14
Speaker 1: So that's a little bit you know, we don't know
13:15
Speaker 1: exactly how that's going to stay out. But all of
13:17
Speaker 1: these media companies they know that, UM, you know this
13:20
Speaker 1: is there is a huge growth opportunity here. You know, NBC,
13:24
Speaker 1: UM has you know again um uh an agreement with
13:28
Speaker 1: points that sort of CBS. They all have these small agreements,
13:32
Speaker 1: but remember there are some regular regulatory issues, so they
13:35
Speaker 1: can't cross like a five percent stake because that's when
13:38
Speaker 1: they kind of trigger that uh that regulation. UM. But
13:43
Speaker 1: definitely everybody is kind of trying to find new ways
13:46
Speaker 1: of monetizing their audiences and their broadcast. So one of
13:49
Speaker 1: the biggest obviously DraftKings is huge flutter You just mentioned
13:54
Speaker 1: fan Duel. We all know about UM. What are the
13:57
Speaker 1: other big betting companies up there and are they are
14:01
Speaker 1: all or the most part based in London for you. Yeah,
14:07
Speaker 1: I mean there there are a number and you are
14:10
Speaker 1: seeing some consolidation as well, where UK based companies are
14:13
Speaker 1: starting to make oppositions here in the US to capitalize
14:15
Speaker 1: on the fact that you now have a growing US
14:18
Speaker 1: market for this as well. So there's a ton of
14:20
Speaker 1: sports books out there. Obviously, DraftKings, FanDuel are among the
14:23
Speaker 1: big ones that you will see every day. But you're
14:26
Speaker 1: probably going to see more pop up because this is
14:28
Speaker 1: something including Disney in the ESPN, everybody's looking at exactly
14:31
Speaker 1: all right, Kaylee Lines, thank you so much. Katie Line's
14:34
Speaker 1: anchor for Bloomberg News, joinings here on a Bloomberg Interactive
14:36
Speaker 1: Brook which on the show again seven pm and eleven
14:39
Speaker 1: pm Saturday, Friday night and Friday night, seven am and
14:42
Speaker 1: eleven am Saturday morning. Oh, seven pmm pm tonight, seven
14:47
Speaker 1: am and eleven am Tomorrow morning. Very good. And Ethan
14:50
Speaker 1: Rockhan she's Bloomberg Intelligence. She covers all things media for
14:53
Speaker 1: Bloomberg Intelligence. Now's that really feeling to paying here today?
15:00
Speaker 1: Off two and a half percent here, it's got a
15:02
Speaker 1: sense of what's going on with technology. We're gonna focus
15:04
Speaker 1: a little bit on Amazon as well. And we can
15:06
Speaker 1: do that because we've got some really smart people at Bloomberg,
15:09
Speaker 1: including Bloomberg News Equity supporter Jess Met and she joins
15:12
Speaker 1: us here in our Bloomberg Interactive Broker studio and put
15:14
Speaker 1: him Goyle Senior analystics she covers all the retailing stuff
15:17
Speaker 1: for Bloomberg Intelligence, and then you can imagine spends a
15:20
Speaker 1: lot of time on that thing called Amazon, just because
15:23
Speaker 1: give us a sense kind of what we're seeing out there.
15:25
Speaker 1: For for tech stocks, we really comes down to what
15:27
Speaker 1: we're seeing in the pain in chip stocks. And right
15:31
Speaker 1: now we're coming into today the Philadelphia Semiconductor Index, which
15:35
Speaker 1: has plunged this year, had actually been up nearly nine
15:39
Speaker 1: percent for the week, but with today's losses, it's basically
15:42
Speaker 1: cut those gains in half. And really what's happened is
15:45
Speaker 1: once Samsung reported basically it's first profit drops since twenty nineteen,
15:49
Speaker 1: it really just just showing the depth of the global
15:52
Speaker 1: PC and memory chip downturn and also advanced micro devices.
15:56
Speaker 1: They had a preliminary third quarter sales that basically missed
15:59
Speaker 1: projects by more than one billion dollars, and so that's
16:02
Speaker 1: really weighing on chip stocks, and like I mentioned already
16:05
Speaker 1: down when you're looking at the Philadelphia semi Conductor index
16:08
Speaker 1: this year, which would be the most since two thousand eight,
16:10
Speaker 1: and just looking more broadly, if you're looking at a
16:13
Speaker 1: video ticker symbol n v d A down about five
16:16
Speaker 1: percent today. Also looking over at micro not down quite
16:19
Speaker 1: as much, but ticker symbol M you that's stock down
16:21
Speaker 1: about two percent. But still even if that's UM index
16:25
Speaker 1: does continue to post games this week, that would snap
16:27
Speaker 1: three straight weeks of losses. But if you pull it
16:29
Speaker 1: back over the past two months, that index is only
16:32
Speaker 1: close higher for two weeks in the past eight weeks,
16:34
Speaker 1: so really showing the pain there that's happening in chip stocks.
16:37
Speaker 1: It also this highlights how little I know about the
16:40
Speaker 1: micro chip industry because you know they go in your cars. Though, yeah,
16:44
Speaker 1: my truck stood on the lot with tho others for
16:50
Speaker 1: months because they couldn't find the right chips to like
16:53
Speaker 1: control lane, keep assist. And yet they're made. They've made
16:57
Speaker 1: way too many chips for PCs, so these things are
16:59
Speaker 1: not fungible, right, So you went from a chip shortage
17:03
Speaker 1: to now a chip glut. But still in cars there's
17:06
Speaker 1: a chip shortage, so still there's an automotive chip shortage.
17:08
Speaker 1: They can't get enough of them. Rivan especially is having problems.
17:12
Speaker 1: Tesla had problems to Obviously the incumbent players are still
17:16
Speaker 1: grappling with the issues. And yet I can't think of
17:20
Speaker 1: PC makers but a sir, I guess has gotten way
17:24
Speaker 1: too many. The chip makers should have sent most of
17:26
Speaker 1: them over to Tesla and held back the ones that
17:29
Speaker 1: they were making for IBM. And they've also still been
17:32
Speaker 1: dealing with those rising prices. And obviously weaker economies has
17:36
Speaker 1: heard consumption and they're also obviously also not helped by
17:39
Speaker 1: the Federal Reserve and other central banks really having this
17:41
Speaker 1: aggressive stance on their monetary policy. But then another factor
17:45
Speaker 1: is when it comes to the dynamic between Washington and
17:48
Speaker 1: Beijing and the export restrictions on China, which obviously is
17:51
Speaker 1: a top consumer of chips. Interesting enough, though Morgan Stanley
17:55
Speaker 1: had not necessarily called the bottom and chip stocks, but
17:57
Speaker 1: thinks that we're getting closer. They were looking more when
18:00
Speaker 1: looking basically at the price to earnings ratio. So the
18:03
Speaker 1: Philadelphia Index is priced at fourteen a half times earnings
18:06
Speaker 1: right now, and that's eleven percent discount to its average
18:09
Speaker 1: multiple around sixteen for the past decades, so they're keeping
18:12
Speaker 1: a close eye on that, but still those corner of
18:14
Speaker 1: the market today really feeling the pain. And when put
18:17
Speaker 1: Um Goyle, Bloomberg's intelligence retail anild started her coverage of
18:21
Speaker 1: the retail space years ago at Goldman Sachs, a little
18:24
Speaker 1: firm downtown, she never thought she'd be talking technology, but
18:28
Speaker 1: then this whole thing called e commerce came along and
18:31
Speaker 1: she has been becoming an astute technology analyst as well.
18:36
Speaker 1: So put them when you think about your industry, what
18:40
Speaker 1: Amazon has done to the retail industry, this whole e
18:44
Speaker 1: commerce thing has really become front and center. What's the
18:48
Speaker 1: status of e commerce in the retail space? Yeah, e
18:51
Speaker 1: commerce is still front and center. You know, there's been
18:53
Speaker 1: a lot of discussion about e commerce flowing, and yes,
18:57
Speaker 1: coming off of pandemic level, there will be some slow
18:59
Speaker 1: to out, but let that not be mistaken for the
19:02
Speaker 1: growth that's still ahead for e commerce. E Commerce is
19:05
Speaker 1: still very under penetrated in the US. Why not even
19:08
Speaker 1: at a third of US retail sales coming from e commerce,
19:11
Speaker 1: which we think we'll get there in just a matter
19:14
Speaker 1: of three years. So right now we're about a quarter
19:17
Speaker 1: of total retail sales are from the e commerce world,
19:20
Speaker 1: but that number is steadily increasing, and you know, this
19:23
Speaker 1: year maybe a little slower given the tougher comparisons, but
19:26
Speaker 1: next year and going forward, we do expect e commerce
19:29
Speaker 1: to return to healthy, high single digit double EDGIT games.
19:33
Speaker 1: I've been uh, the pandemic has transformed the way my
19:36
Speaker 1: family shops, and I'm sure that's the case for most
19:38
Speaker 1: families in America. I get now far more goods on
19:42
Speaker 1: Amazon than I ever had um in the pre pandemic
19:46
Speaker 1: years combined. UM and I've been waiting for a drone
19:50
Speaker 1: or a robot to drop off one of my packages.
19:53
Speaker 1: Is it never going to happen to them? I wouldn't
19:56
Speaker 1: say never, but I don't think you'll happen in the
19:59
Speaker 1: next you years. I think you know, as you know,
20:02
Speaker 1: they've been testing the drone concept for years now, and
20:05
Speaker 1: the hawks that they've placed on the scout just goes
20:08
Speaker 1: to show that either it's not economical, either it's not
20:11
Speaker 1: fast enough, or it's just not being received well by customers. Yet.
20:15
Speaker 1: Maybe the customer isn't ready for a drone to pull
20:18
Speaker 1: up into their driveway, navigate around their cards, find the door,
20:22
Speaker 1: and drop things off, right. I don't know if we
20:24
Speaker 1: have that sophistication, I would I promised to double my
20:27
Speaker 1: purchases of Amazon delivers my stuff with a robot, because
20:31
Speaker 1: that would be awesome. Alright, So just just real quickly here,
20:36
Speaker 1: when you think about the text SOX, is it all
20:37
Speaker 1: just the FED and where rates are going? I mean,
20:40
Speaker 1: that obviously is a big part of that, just because
20:43
Speaker 1: when you're thinking about the direction of interest rates and
20:45
Speaker 1: how that incorporates to their future profits and obviously in
20:48
Speaker 1: turn their stock prices, that is a big thing. But also,
20:51
Speaker 1: like I was mentioned before, the recent tensions between the
20:53
Speaker 1: US and China that could actually worsen the imbalance when
20:57
Speaker 1: you're looking at what's happening with supply into me and
21:00
Speaker 1: so part of it is the fat and then part
21:02
Speaker 1: of it is also issues going on with just geopolitics
21:05
Speaker 1: and again stem conductor stocks. They're the most cyclical part
21:07
Speaker 1: of technology because of the boom and bus nature of
21:10
Speaker 1: chip demand. All right, Jess Manton, thank you so much.
21:12
Speaker 1: We appreciate that. Jeff Matt and Bloomberg News equities reporter
21:15
Speaker 1: and put him Coyle senior analyst. She covers to US
21:17
Speaker 1: retailing with Bloomberg Intelligence, and she covers Amazon, so that
21:21
Speaker 1: means she is all over the technology that is transforming retail.
21:25
Speaker 1: And maybe someday a drone will deliver a package to
21:29
Speaker 1: Matt Miller's house. So no, but no day soon because
21:32
Speaker 1: Amazon has canceled their project for cost cutting reasons lately.
21:36
Speaker 1: Really yeah, that's that's the whole story. There were slow
21:39
Speaker 1: moving cooler sized scout that they've been testing since nineteen
21:43
Speaker 1: is suspending at a million trucks on the road so
21:46
Speaker 1: they can get it done well. President Biden's pardoning of
21:52
Speaker 1: all people convicted of simple marijuana possession under federal law
21:57
Speaker 1: marks a significant shift of the president's stance on cannabis.
22:00
Speaker 1: And it's got kindable stocks definitely moving here. It's Jackomen
22:04
Speaker 1: Jason Wilson. He's a cannabis research and banking expert for
22:07
Speaker 1: et F Managers Group. And Jason, before we get start,
22:09
Speaker 1: I just want to point off our audience that you
22:11
Speaker 1: are a member of the Canadian were a member of
22:13
Speaker 1: the Canadian Forces, and you were recipient of the Gulf
22:15
Speaker 1: of Kuwait Metal awarded for your engagement in direct combat
22:18
Speaker 1: during the Gulf War of nineteen nine. You want to
22:20
Speaker 1: remember remember that well. So, Jason, first of all, thanks
22:23
Speaker 1: for your service here. Um, we appreciate you taking the
22:25
Speaker 1: time to join us. Thanks for having me on. I
22:28
Speaker 1: appreciate it. You bet. Is this a major shift for
22:31
Speaker 1: the Biden administration? Do you think, I mean, the stocks
22:33
Speaker 1: are kind of suggesting it is. How do you guys
22:36
Speaker 1: think about that? Yeah, I mean, it's it's it's definitely
22:39
Speaker 1: a shift. I mean, notwithstanding the campaign promises regarding you know,
22:46
Speaker 1: canvas reform Biden made in twenty we really didn't see
22:50
Speaker 1: anything from him and and not you know, there's been
22:52
Speaker 1: lots of movement in Congress obviously, uh, primarily in the House,
22:56
Speaker 1: but also in the Senate, and and you know, so
22:58
Speaker 1: to have this affirmation from Biden, it's it's it's really uplifting. Um.
23:03
Speaker 1: So it's it's, you know, again, affirmation that if we
23:05
Speaker 1: can get something through Congress, we can see some real
23:08
Speaker 1: progress exactly. I mean a lot of things here need
23:10
Speaker 1: to change. I don't know, a lot of people realize
23:13
Speaker 1: that that weed is a Schedule one drug. I mean,
23:17
Speaker 1: that's the worst kind of drug in terms of the
23:19
Speaker 1: way the federal government rates these things, meaning it has
23:22
Speaker 1: a high potential for addiction. And there's no currently accepted
23:26
Speaker 1: medical use. As you move on down the list schedule too,
23:30
Speaker 1: you get things like you know, morphine and dem roll
23:32
Speaker 1: Schedule three, you get like steroids and ketamine special K
23:37
Speaker 1: Schedule four like xan x and probably the most abused
23:41
Speaker 1: drugs in America, right, I mean, why is why is
23:44
Speaker 1: this plant a Schedule one drug? Is that going to change?
23:50
Speaker 1: You know, it's definitely going to change. There seems to
23:53
Speaker 1: be no question. In fact. You know, obviously having the
23:57
Speaker 1: the the executive action on on the Federal Party is
24:00
Speaker 1: incredible news. But also in that release was the fact
24:03
Speaker 1: that he's instructed President Biden's instructed the Attorney General and
24:07
Speaker 1: the Secretary of um uh, you know, of of Health
24:11
Speaker 1: and Human Services to actually look at reclassification because you know,
24:16
Speaker 1: even even President Biden said it all that's just made
24:18
Speaker 1: no sense. It's a failed system. The laws are wrong,
24:21
Speaker 1: the federal it's just not working, and we need to
24:24
Speaker 1: look at at least reclassification. Yeah. Um, we also have
24:28
Speaker 1: a Safe Banking Act, um that legislation that that needs
24:33
Speaker 1: to get passed here. Um you advise m J. That's
24:37
Speaker 1: the alternative harvest e T F and and other e
24:40
Speaker 1: T s I believe in terms of how to deal
24:43
Speaker 1: with the regulation. Are we going to see safe banking pass?
24:46
Speaker 1: Because without that, it's very difficult for these companies with
24:51
Speaker 1: you know, uh millions or even billions in revenue to
24:55
Speaker 1: to move around the financial system. Yeah, there's definitely bipartisan
25:01
Speaker 1: support for no question. I mean that the divide hasn't
25:05
Speaker 1: been whether or not we should have cannabis reform. That
25:08
Speaker 1: the divide has been to what extent? How far do
25:12
Speaker 1: we go? And and you know, um, if you look
25:15
Speaker 1: at Shumor's bill at the c I o A, it's
25:18
Speaker 1: just so it's been so far reaching, and there's to
25:22
Speaker 1: date been really not a willingness to compromise on on
25:26
Speaker 1: on more incremental reform. But you know that's changed in
25:28
Speaker 1: the last few weeks or a few months, and there
25:31
Speaker 1: there is more expectation that there will be compromised and
25:33
Speaker 1: we'll actually see something more along the lines of safe
25:36
Speaker 1: banking plus. And then when you obviously, when you add
25:39
Speaker 1: the the president's actions yesterday, it's it's gonna add a
25:44
Speaker 1: little bit more fuel to fire that what we will
25:46
Speaker 1: actually see progress on that front. Jason, what's been the
25:49
Speaker 1: experience of Canada and and and their laws and kind
25:52
Speaker 1: of how they deal with it. Yeah, it's been it's
25:55
Speaker 1: been positive. I mean, at the end of the day,
25:58
Speaker 1: there's there's always this. It takes time to to move
26:01
Speaker 1: from the illicit market to the legal market. Um, but
26:05
Speaker 1: you know it's it's the industry is growing. Quarter after quarter.
26:09
Speaker 1: We continue to increase sales the quarter after quarter, we
26:12
Speaker 1: continue to take away from the illicit market. You know,
26:15
Speaker 1: we haven't seen the evils that many predicted. Uh. And
26:19
Speaker 1: you know, the biggest thing we're dealing with right now
26:21
Speaker 1: in Canada, and you were talking about this about other
26:22
Speaker 1: drugs and where they where they sit on the c
26:25
Speaker 1: s A. The biggest issues we're dealing with right now
26:27
Speaker 1: are you know, the opioid overdoses, ventanyl addictions, things of
26:31
Speaker 1: that nature. Like that's that's the issue. And you know
26:35
Speaker 1: we're seeing that that cannabis is a means to get
26:39
Speaker 1: off of those, not a gateway to those. Yeah. Ventanyl. Yeah,
26:43
Speaker 1: that's bad, bad stuff, horrible, right it is. I mean
26:47
Speaker 1: if heroin doesn't do it for you, then you move
26:49
Speaker 1: to fentyl. That's right, that's that's a very bad problem.
26:53
Speaker 1: But I mean people should notice stay away from that stuff.
26:56
Speaker 1: All right, Jason, thank you so much for joining us.
26:57
Speaker 1: Jason Wilson, he's cannabis research and banking expert for the
27:01
Speaker 1: E t F Managers Group. And again, they're definitely some
27:04
Speaker 1: movement there yesterday from President Biden's partnering of all people
27:08
Speaker 1: convicative simple marijuana possession under federal law. That marks a
27:12
Speaker 1: significant shift in the President's recent stance on cannabis. So
27:15
Speaker 1: a lot of folks in the cannabis business are, you know,
27:18
Speaker 1: hoping that perhaps this could be a catalyst for more
27:20
Speaker 1: sweeping deregulation at the federal level. This is the Big Take,
27:25
Speaker 1: the best of Bloomberg's in depth, original reporting from around
27:29
Speaker 1: the globe. This is a really fast moving story that's
27:32
Speaker 1: caused a lot of outrage among investors. This is so fascinating.
27:36
Speaker 1: The market shutdown in a way it's never done before.
27:38
Speaker 1: That's gonna have consequences for years to come. The Big
27:41
Speaker 1: Take on Bloomberg Radio. All Right, you know how much
27:47
Speaker 1: Matt and I love these Big Take stories from Bloomberg
27:49
Speaker 1: News because they're a the topics are usually really really cool, uh,
27:53
Speaker 1: and then they dig deep and they you can just
27:55
Speaker 1: tell they throw the resources at it. We get some
27:57
Speaker 1: really in depth, deep reporting on some really cool topics today. Boy,
28:02
Speaker 1: no different. Steve Cohen's new edge is bringing hedge fund
28:06
Speaker 1: moneyball to the Mets. And the Mets are actually in
28:09
Speaker 1: the playoffs this year, uh in you know, and probably
28:13
Speaker 1: the first one. No, I think they've been. They've been
28:16
Speaker 1: in the team. Okay, yeah. So anyway, so what we've
28:19
Speaker 1: got here is we've got Kathy Burton, she's a reporter
28:22
Speaker 1: on this story for Bloomberg News. Tom Maloney, editor with
28:25
Speaker 1: Bloomberg News. They both joined us in the Bloomberg Interactive
28:28
Speaker 1: Broker Studio the B and people do not phone it in, Matt.
28:31
Speaker 1: They're actually in here getting the job done over there.
28:37
Speaker 1: This is pretty empty. Kathy, Steve Cohen, I know him
28:40
Speaker 1: as the hedge fund uh Titan on Wall Street from
28:43
Speaker 1: my days on the street. Uh, but he's also the
28:46
Speaker 1: owner of the Mets. Here talked to us about Steve Cohen,
28:49
Speaker 1: what he's done with this franchise. Well, basically, Steve has
28:52
Speaker 1: thrown a lot of his billions of dollars at the
28:56
Speaker 1: team and that's what's made the difference this year. So
29:00
Speaker 1: but he's but he's been a fan. So was when
29:03
Speaker 1: they were in the World Series, not the playoffs. But
29:06
Speaker 1: he's been a fan since then, right, I mean since
29:09
Speaker 1: he was a little kid. Yeah. So I think this
29:11
Speaker 1: is so cool because in our financial bubble, uh Tom,
29:17
Speaker 1: where we only care about you know, business news, we
29:21
Speaker 1: know Steve Cohen as the big hedge fund guy who
29:25
Speaker 1: maybe used too much of an edge, right and got
29:27
Speaker 1: into legal trouble. He's kind of a bad guy because
29:30
Speaker 1: he pushed the limits a little bit too much, but
29:32
Speaker 1: obviously everyone was pushing the limits. He got caught. UM
29:36
Speaker 1: in baseball. You know, Baseball fans don't think of him
29:39
Speaker 1: that way, right. They think of this guy, especially if
29:41
Speaker 1: you're a Mets fan, as somebody with a lot of
29:43
Speaker 1: money who came in um to help for them make
29:47
Speaker 1: their franchise a winner. They probably love him absolutely, and
29:51
Speaker 1: I think that's you know, that's what he says was
29:54
Speaker 1: the primary reason why he bought the Mets was to
29:56
Speaker 1: try to bring joy to millions of people. Um. But
30:00
Speaker 1: it's it's certainly he you know, people Mets fans, they
30:03
Speaker 1: love him. At the baseball owners maybe not so much
30:06
Speaker 1: because he's spending you know, fortune. He's got the highest
30:10
Speaker 1: payroll in the league right now, and it's taken the
30:12
Speaker 1: Mets to the postseason for the first time. So Cathy
30:17
Speaker 1: talked to us about, like, do you think Steve Cohen
30:19
Speaker 1: is actually trying to kind of revamp his reputation? Is
30:23
Speaker 1: was his legacy, if you will, by the ownership of
30:26
Speaker 1: such a you know, a marquee franchise. I don't actually
30:32
Speaker 1: partly because Steve. You know, Steve was never um charged
30:37
Speaker 1: with with wrongdoing. His firm paid a fine, a record fine, UM.
30:45
Speaker 1: But I think he really did do it for the
30:49
Speaker 1: reasons that Tom just said. But but it has been
30:52
Speaker 1: a benefit of all this that people don't um think
30:57
Speaker 1: of him anymore because of the record find he paid. UM.
31:02
Speaker 1: Tom found a really cool stat that showed that UM,
31:07
Speaker 1: since he owned the Mets, there were twenty three mentions
31:10
Speaker 1: of Steve Cohen with insider trading and more than two
31:13
Speaker 1: thousand as owner of the Yeah, if that's his goal.
31:19
Speaker 1: But he's this seems like a guy who's going to
31:20
Speaker 1: be competitive in whatever realm. I mean, if you put
31:23
Speaker 1: him on the squash court, he's gonna throw an elbow.
31:25
Speaker 1: If you put him in hedge funds, he's going to
31:26
Speaker 1: try and use whatever edge he can. And if you
31:29
Speaker 1: put him in baseball. He's going to spend as much
31:31
Speaker 1: as he can to win, right, Is that how you
31:33
Speaker 1: frame him? Yeah? Absolutely, And I think when we talk
31:35
Speaker 1: about the reasons why he bought it, I mean, yeah,
31:37
Speaker 1: he wants to bring joy, but I think he's a
31:39
Speaker 1: competitive guy and he wants to win, and I think
31:41
Speaker 1: he enjoys it and he likes learning about something new.
31:44
Speaker 1: You know. He talked to We spoke to Billy Eppla,
31:46
Speaker 1: the general manager, and he talked about how involved you know,
31:50
Speaker 1: not necessarily interfering or anything like that, but the Cohen
31:53
Speaker 1: asked smart questions and he likes to learn and he
31:56
Speaker 1: likes to quiz him and figure things out. And I
31:59
Speaker 1: think that's a big reason why he bought it as well,
32:01
Speaker 1: was like a new challenge of this, is there any
32:03
Speaker 1: kind of you know, Moneyball was the last great baseball story.
32:08
Speaker 1: Michael Lewis wrote the book and then um Brad Pitt
32:11
Speaker 1: and Jonah Hill were awesome in the movie, but that
32:14
Speaker 1: they were cash strapped, right, Um, it seems like Steve
32:17
Speaker 1: Cohen would use that kind of mathematical analysis. He has
32:21
Speaker 1: always been a baseball fan, and then he was a
32:23
Speaker 1: Wall Street guy. They're all like that. Um, but he
32:26
Speaker 1: has the money to spend, so does he do like
32:28
Speaker 1: kind of a moneyball on steroids for lack of a
32:31
Speaker 1: better term. Um, it's kind of funny that they do
32:36
Speaker 1: lend a few people to the organization, to to the
32:40
Speaker 1: Mets to do some sort of to do some sort
32:46
Speaker 1: of projects to bring them basically up to speed, because
32:50
Speaker 1: the Wilpons never invested in that sort of quantitative analysis.
32:55
Speaker 1: But interestingly, they're not trying to be the quantiest team
33:00
Speaker 1: really league. Yeah, I think they're they're doing sort of
33:03
Speaker 1: man plus machine. Interesting, Tom, Do we have any sense
33:06
Speaker 1: of what Steve Cohen's kind of how he allocates his
33:10
Speaker 1: time these days between his point seventy two hedge fun
33:13
Speaker 1: between the Mets and maybe whatever whatever else he's doing,
33:15
Speaker 1: because it seems like philanthropy. He's not a collector. I mean,
33:18
Speaker 1: he's still trading every day. What do we know about it?
33:21
Speaker 1: He says, he's still trading every day. He still runs
33:23
Speaker 1: a book, his own book at point seventy two, but
33:26
Speaker 1: it's a lot smaller than it used to be. He's
33:29
Speaker 1: only trading during us hours. He's not you know, sitting
33:32
Speaker 1: there worrying about what's going on. In London, what's going
33:34
Speaker 1: on in Asia overnight? So his work day is shorter
33:38
Speaker 1: than it used to be. It's interesting, point seventy two
33:41
Speaker 1: manages more money than it's ever managed before. Um so
33:45
Speaker 1: the firm's grown, but it's kind of gotten more institutionalized,
33:48
Speaker 1: and he's not making all the decisions anymore. And I
33:52
Speaker 1: think after hours he's he's focused shifts to baseball. He's
33:56
Speaker 1: you know, he speaks to Billy Eppler at least once
33:59
Speaker 1: a week, while on once a week, and then every
34:01
Speaker 1: time there's any kind of transaction guys going up to
34:04
Speaker 1: the majors, going down in the minor leagues or whatever,
34:06
Speaker 1: you know, he's consulted on that. And so I think,
34:09
Speaker 1: you know, there's a he's got more stuff going on
34:13
Speaker 1: than just trading seven, which I think is what his
34:16
Speaker 1: life used to be. Does he talk to all of
34:19
Speaker 1: the players, Cathy? Does he say, hey, do you even
34:21
Speaker 1: know how to play this? No? I don't think he
34:25
Speaker 1: talks to the players that much. I mean, he definitely
34:28
Speaker 1: talks to the general manager a bit. Yeah, But I
34:32
Speaker 1: saw him, like you know, down at the Braves last weekend.
34:35
Speaker 1: He they had a new player coming up, Alvarez and
34:38
Speaker 1: he was like, you know, giving him some words of encouragement,
34:40
Speaker 1: saying don't stress about it. I think he likes that
34:43
Speaker 1: element of as well for sure. All Right, great stuff
34:46
Speaker 1: the Big Take story. Matt and I are big fans
34:48
Speaker 1: of the Big Take, and this one was a great one.
34:50
Speaker 1: Stevie Cohen and the match take a read. You can
34:53
Speaker 1: find out Bloomberg dot com slash Big Take, or you
34:55
Speaker 1: can also do it and I Big Take and I
34:57
Speaker 1: Big Take on the terminal. On the terminal, we appreciate that. Uh.
35:00
Speaker 1: Kathy Burton, hedge fund reporter Bloomberg News and Tom Maloney,
35:03
Speaker 1: editor with Bloomberg News. Thanks for listening to the Bloomberg
35:07
Speaker 1: Markets podcast. You can subscribe and listen to interviews with
35:11
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
35:16
Speaker 1: I'm on Twitter at Matt Miller three. On False Sweeney,
35:20
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you
35:23
Speaker 1: can always catch us worldwide at Bloomberg Radio