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Brexit, Trade, Consumer Tech · Bloomberg Intelligence

0:02
Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you
0:05
Speaker 1: along with my co host Lisa Brahma Waits. Each day
0:07
Speaker 1: we bring you the most noteworthy and useful interviews for
0:10
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
0:17
Speaker 1: at Bloomberg dot com. Right now, let's turn to Maria today.
0:23
Speaker 1: Oh she is an E. M. E. A reporter for
0:26
Speaker 1: Bloomberg News and Bloomberg Television. She joins us on the
0:28
Speaker 1: phone from Brussels. Maria, thank you so much for joining us.
0:31
Speaker 1: Give us your thoughts on what we heard from uh
0:34
Speaker 1: speaker bark How this morning. That's right, So essentially there
0:38
Speaker 1: was a lot of hype build into this, but I
0:40
Speaker 1: think it's not been surprising that he's decided the vote
0:44
Speaker 1: cannot happen today, just purely on the basis that is
0:46
Speaker 1: so similar to what was presented and delayed on Saturday,
0:50
Speaker 1: and therefore there is no meaningful vote today, which, to
0:53
Speaker 1: kind of distripboy the jargon, it basically means the Brexit
0:55
Speaker 1: deal which was agreed between the UK and the EU
0:59
Speaker 1: last week Thursday, after a very long, very difficult negotiation,
1:03
Speaker 1: cannot be voted today. And of course the tricky bit
1:06
Speaker 1: on this is that that deal between the EU and
1:09
Speaker 1: the UK is worth nothing unless it can clear the
1:12
Speaker 1: House of Commons. We've been here before many times, It's
1:15
Speaker 1: been rejected many times. And the issue here, of course
1:18
Speaker 1: is that we're running up against a very hard deadline,
1:21
Speaker 1: which is thirty one for the UK to crash out
1:23
Speaker 1: without a deal. Indeed, this does seem like the expected outcome,
1:29
Speaker 1: as the pound is now basically unchanged from before the vote.
1:35
Speaker 1: So I guess that Maria, what will it take for
1:38
Speaker 1: markets to be surprised here? Because it seems to be
1:41
Speaker 1: baked in that Parliament will debate this, some people might
1:45
Speaker 1: raise a couple issues, it might get tweaked, and then
1:47
Speaker 1: people will vote and it will go through as planned exactly.
1:51
Speaker 1: And I think there's a number of things, um that
1:53
Speaker 1: are being priced in and to sterling now. And based
1:56
Speaker 1: on the analysts that I've spoken to today, they point
1:59
Speaker 1: to two things. And want is the fact that it
2:00
Speaker 1: does seem that the Prime Minister UH may not have
2:03
Speaker 1: the votes he needs now, but they do feel he
2:05
Speaker 1: will get them at one point, So this is the
2:08
Speaker 1: closest we've actually ever been to the deal passing. And
2:11
Speaker 1: then the other issue, which is also very apparent now
2:14
Speaker 1: is the fact that the threat of a no deal
2:16
Speaker 1: brexit also seems very unlikely because the Europeans could deny time,
2:21
Speaker 1: they could deny an extension, and principle they all have
2:23
Speaker 1: to agree to it, and if they didn't want to,
2:25
Speaker 1: they would say, well, I'm sorry, but you don't get
2:27
Speaker 1: more time and you crash out. But the reality is,
2:30
Speaker 1: when you look at every single European summit that we've
2:32
Speaker 1: covered every time we've been here, the Europeans don't want
2:35
Speaker 1: to be blamed for a no deal breakfit. They don't
2:37
Speaker 1: want to push a prime minister who's close to perhaps
2:39
Speaker 1: getting this deal and force everyone into a chaotic exit
2:43
Speaker 1: from the EU. They Alvays said the best way to
2:46
Speaker 1: leave is with a deal. So the market is looking
2:48
Speaker 1: at those two things. The prime minister that is edge
2:50
Speaker 1: and closer to winning the vote, even if it was
2:54
Speaker 1: delayed on Saturday, is then delayed again today, but also
2:56
Speaker 1: the fact that the EU will probably give more time
2:58
Speaker 1: and they don't want to go no deal either. So Marian,
3:01
Speaker 1: what we did not get a vote today, clearly, Um,
3:04
Speaker 1: what our next steps would you say over the next
3:06
Speaker 1: several days. Well, there's a huge bill that the government
3:10
Speaker 1: needs to put forward, which is all the legislation going
3:12
Speaker 1: into Brexit, and then's also a possibility for other MPs
3:16
Speaker 1: to try to amend that deal, and that's perhaps when
3:19
Speaker 1: it gets difficult for the government because one of the
3:21
Speaker 1: things that the poor Johnson said is that he does
3:24
Speaker 1: not want to be put in a position where his
3:27
Speaker 1: deal gets amended so many times that it becomes meaningless.
3:31
Speaker 1: So that is perhaps a source of tension there. And
3:34
Speaker 1: of course we also know that he's trying to push
3:36
Speaker 1: for a general election, and that is again another factor
3:40
Speaker 1: that the market has priced in and to stern, which
3:42
Speaker 1: is the fact that if we do go to a
3:43
Speaker 1: new election, although the situation is very volatile, the polls
3:46
Speaker 1: would suggest that he would increase his majority and that
3:49
Speaker 1: makes passing anything much more easy. So I want to
3:52
Speaker 1: talk about the theatrics of this, because John Burco is
3:56
Speaker 1: a genius when it comes to the theatrics. His voice
3:59
Speaker 1: absolutely has the inflections. I loved how right before he
4:02
Speaker 1: made the decision, he paused, he castigated someone for for
4:06
Speaker 1: for for for delaying him, but he paused, and he
4:09
Speaker 1: you know, really laid it out. Uh and and you
4:12
Speaker 1: know with perfect timing. How how has this sort of
4:16
Speaker 1: event risen him in a way that he hadn't previously
4:20
Speaker 1: been I mean, who is John Burko? I mean he
4:23
Speaker 1: he has definitely become a star and and and everyone
4:27
Speaker 1: knows who this man is. But also I think the
4:29
Speaker 1: fact that he has become so well known has also
4:32
Speaker 1: put him on the spot. And there is a lot
4:34
Speaker 1: of criticism in terms of what is driving his decisions
4:37
Speaker 1: and his motivations. And I'm sure you know just as
4:39
Speaker 1: well as I do that in many occasions he has
4:42
Speaker 1: been criticized for being seen as to remaining is allowing
4:47
Speaker 1: the remaining side of the parliament. You should, by the way,
4:51
Speaker 1: you should trademark that remaining but go on. But um
4:55
Speaker 1: and and that has become an istion and and it's
4:57
Speaker 1: and it's obviously an obstacle today for the premise to
5:00
Speaker 1: put this vote um quickly to vote, which he wants
5:03
Speaker 1: to do. But it was also an issue for the
5:05
Speaker 1: reason may And you're right, there's a lot of optics.
5:07
Speaker 1: There's a lot of theatrical moves that we see and
5:10
Speaker 1: we saw also a lot of UM optics on Saturday
5:13
Speaker 1: when the Prime Minister sent out three letters which essentially
5:15
Speaker 1: contradicted each other to the EU, one of which he
5:18
Speaker 1: asked for more time than another one which he said
5:20
Speaker 1: I actually don't want more time, and then a third
5:22
Speaker 1: one in which he said if I do get an extension,
5:25
Speaker 1: it's going to be bad for us both. So I
5:27
Speaker 1: think we're used to this, and what it highlights is
5:29
Speaker 1: aid this is still a country is very divided, but
5:32
Speaker 1: to h there's many scenars that could still play out,
5:35
Speaker 1: and of course you have the the the general alection,
5:37
Speaker 1: which is still very much looming on everyone. So everyone
5:39
Speaker 1: wants to be seen as fighting for something and for
5:42
Speaker 1: the EU. I guess at this point, after three years
5:45
Speaker 1: of a lot of back and forth, they're just not
5:46
Speaker 1: surprised by any of this anymore. They do think that
5:49
Speaker 1: this is almost a country that has become so difficult
5:52
Speaker 1: to read and there is no clarity coming out of
5:55
Speaker 1: UM the Parliament. Which is interesting for for the EU side, however,
5:59
Speaker 1: is that the perception around Brexit has really changed. At
6:02
Speaker 1: the start of the year, you could hear many voices
6:04
Speaker 1: is still felt Brexit could be undone who's still pushed
6:07
Speaker 1: for a second referendum. But at this point you do
6:09
Speaker 1: get a sense that the Europeans just want to get
6:11
Speaker 1: it done with, especially because there is a new Commission,
6:14
Speaker 1: there is a different set of priorities and in a
6:18
Speaker 1: different agenda, and they feel like right now is probably
6:20
Speaker 1: the time to move on. All right, Finally, Maria, just quickly,
6:24
Speaker 1: is a couple thirty one a real date or do
6:26
Speaker 1: you think there will be an extension beyond that? Well,
6:28
Speaker 1: the truth is when you look at Brexit, all of
6:30
Speaker 1: these UH deadlines have become completely meaningless. They every time
6:34
Speaker 1: we've been in a make or break moment, there's been
6:36
Speaker 1: more time. Granted, if you look at the legislation now
6:39
Speaker 1: and if you look at the UK law, well, the
6:41
Speaker 1: UK would crash out without a deal in a week's
6:44
Speaker 1: time if it doesn't get that extension. The question is,
6:47
Speaker 1: with that extension, which has now been asked, would it
6:50
Speaker 1: would that be rejected by the Europeans. Well, you heard
6:53
Speaker 1: from Eminuel Macron and Jean Call do you occur the
6:54
Speaker 1: head of the European Commission last week that they do
6:56
Speaker 1: not see a need for more time because there is
6:59
Speaker 1: a new deal that We're for everyone, but the reality
7:02
Speaker 1: is if you don't give more time, the UK would
7:04
Speaker 1: crash out, and that's something that nobody wants. I guess
7:07
Speaker 1: the debate is around the length of the extension. Do
7:10
Speaker 1: you just go for a short technical extension and the
7:12
Speaker 1: hope that that can focus everyone's minds and get the
7:15
Speaker 1: legislation you need in order to leave, or do you
7:18
Speaker 1: actually go, well, you know, we need more time, and
7:20
Speaker 1: then that opens many other scenarios, which, as you know,
7:23
Speaker 1: the vote, the people's vote, second referendum and so on.
7:26
Speaker 1: But it's tricker for the Europeans because they do not
7:28
Speaker 1: want to be seen as interfering in the politics. Maria today,
7:31
Speaker 1: I thank you so much for joining us, and you're
7:33
Speaker 1: very busy in Brussels right now with all that's going on.
7:35
Speaker 1: Thank you so much. Maria covers the Europe for Bloomberg
7:39
Speaker 1: Television and Bloomberg News. She joins us on the phone
7:41
Speaker 1: from Brussels. Well, it looks like the US and miner
8:00
Speaker 1: are making some headway on what is being coined Phase
8:04
Speaker 1: one type of trade deal. To get the latest we
8:07
Speaker 1: welcome Troy Gaski, Partner co Chief Investment Officer, Senior Portfolio
8:12
Speaker 1: manager at Skybridge. So Troy again, it looks like there
8:16
Speaker 1: is sub movement. We're having trade delegations go back and forth.
8:19
Speaker 1: What is your sense of how the US China trade
8:22
Speaker 1: negotiations are going right now? Well, the good news is
8:26
Speaker 1: it looks like there's at least a short term to
8:28
Speaker 1: ton and that was really being priced into market. So
8:31
Speaker 1: a week ago, in terms of the left tail, the
8:34
Speaker 1: probability of escalation or a significantly negative outcome went down
8:38
Speaker 1: and that's why I saw markets rally because we think
8:41
Speaker 1: what's going on here is markets are trying to focus
8:44
Speaker 1: on the fact that both for the US and China
8:47
Speaker 1: UH clearly they're both interested in having some type of
8:51
Speaker 1: uh lack of deterioration and at least a face saving
8:54
Speaker 1: deal focused on agriculture and energy and then pushing back
8:57
Speaker 1: the thornier issues of IP STAFT and s SO support
9:00
Speaker 1: into the post election and so we don't think the
9:03
Speaker 1: coast is necessarily clear, but the probability of dramatic escalation
9:08
Speaker 1: has gone down significantly, which we think has led to
9:11
Speaker 1: the rallying markets late last week. Are you buying or
9:13
Speaker 1: selling anything based on that development? Well, yeah, so from
9:17
Speaker 1: our perspective on the margin. You know, a trade reconciliation
9:21
Speaker 1: or at least lack of escalation should lead to a
9:24
Speaker 1: steeper yel curve, which should lead to better NIM, which
9:26
Speaker 1: should lead to better bank credit quality. So we have
9:29
Speaker 1: a significant exposure in regional community bank credit. And when
9:32
Speaker 1: we're looking into next year, a lot of the focus
9:35
Speaker 1: on the outcome will be do interest rates continue to
9:37
Speaker 1: drop or to at least stabilize here And so certainly
9:41
Speaker 1: a right tail outcome or at least less escalation will
9:44
Speaker 1: lead to better growth, better earnings, better NIM, which means
9:48
Speaker 1: will more than likely continue to run those exposures as
9:51
Speaker 1: opposed to cutting them. So try from the perspective of China,
9:55
Speaker 1: what do you think the calculus is for China right now?
9:58
Speaker 1: That seems like, you know, we were close to a
10:00
Speaker 1: deal earlier in the year that might have had a
10:02
Speaker 1: little bit of meat on the bone, but now both
10:05
Speaker 1: sides seem to have pulled back. You think that they
10:06
Speaker 1: are let's do a deal now, even if it's a
10:09
Speaker 1: light deal, or let's just push it. Well, look from
10:13
Speaker 1: there's two calculus, right, There's the Trump calculus and the
10:16
Speaker 1: China perspective, right, and you know, as time has gone on.
10:20
Speaker 1: We think it's become clear and clear to China that,
10:24
Speaker 1: you know, if Trump loses reelection, right then they're gonna
10:27
Speaker 1: have to deal with Warren, Pelosi and Schumer, who are
10:30
Speaker 1: far more hawkish on China than even Trump. And to
10:32
Speaker 1: give Pelosi and Humor credit their entire political careers, they've
10:35
Speaker 1: been hawkish on China in terms of trade and the
10:38
Speaker 1: impact on the middle of the working class. And now
10:41
Speaker 1: you know, there's basically a non elite bipartisan consensus that
10:44
Speaker 1: China has to be addressed. It's one of the few
10:47
Speaker 1: areas of bipartisan consensus that we see, you know, whether
10:50
Speaker 1: you're in the Bay Area of California or in the Midwest,
10:54
Speaker 1: um and that China has to be addressed. So as
10:57
Speaker 1: China's economy continues to deteriorate in the contract election, you know,
11:01
Speaker 1: start to come into sharp relief, it's become more apparent,
11:04
Speaker 1: we think, to China that's in their best interests to
11:07
Speaker 1: de escalate the conflicts sooner rather than later. That doesn't
11:10
Speaker 1: mean we have a sweeping agreement on s o E
11:12
Speaker 1: support and I p SF, but it seemed like earlier
11:15
Speaker 1: in the year they were willing to roll the dice
11:17
Speaker 1: that if enough pain was inflicted on the U. S economy,
11:21
Speaker 1: particularly the farm belt and the rust belt, that would
11:24
Speaker 1: cause Trump in the American political system to capitulate. But
11:28
Speaker 1: as time's gone on, they're realizing that what lurks around
11:31
Speaker 1: the corner maybe a more severe confrontation if the folks
11:34
Speaker 1: like Marco Rubio or Elizabeth Warren or Human Pelosi are
11:38
Speaker 1: driving the policy discussions. So one thing that you knowed
11:42
Speaker 1: is that just simply a Phase one kind of deal
11:46
Speaker 1: that de escalates isn't really enough at this point to
11:50
Speaker 1: undo some of the damage of the uncertainty that we've
11:52
Speaker 1: seen around trade. What would it take to reverse some
11:56
Speaker 1: of the economic damage that you see being in lected
12:00
Speaker 1: by how long the trade scribblers has carried been carried out? Yeah,
12:04
Speaker 1: I think it's at this point it's going to be
12:05
Speaker 1: more comprehensive. So we need phase one right where at
12:08
Speaker 1: least you addressed the trade balance in ways that have
12:13
Speaker 1: teeth that markets can actually analyze. It's not some vague
12:16
Speaker 1: promise coming out of a White House meeting. And then
12:18
Speaker 1: you need to see some contours of how whether it's
12:21
Speaker 1: reconciliation panels or some type of w T O in
12:25
Speaker 1: internal w t O mechanism, meaning it would be outside
12:28
Speaker 1: the w t O but just focused on the China
12:30
Speaker 1: and US administration to address ongoing trade conflict. UM. And
12:34
Speaker 1: then from there I think we would need some Brexit
12:36
Speaker 1: resolution and then also a better understanding of how the
12:41
Speaker 1: contours of the one policy coming out of DC will
12:45
Speaker 1: look like. UM, So it's not just a trade reconciliation
12:49
Speaker 1: at this point. UM, it would also be Brexit plus
12:52
Speaker 1: some idea of policy coming from one. If we got
12:56
Speaker 1: all three of those, which again at this stage looks unlikely,
12:59
Speaker 1: and next month or so you could see CAPEX bounce
13:02
Speaker 1: back up to roughly five percent, maybe three to five,
13:05
Speaker 1: which is a healthy growth rate, certainly much better than
13:08
Speaker 1: the contraction we're seeing today. But it's you're really hard
13:11
Speaker 1: pressed to see what would lead to the high single
13:14
Speaker 1: digit growth rates that we enjoyed very briefly in late
13:17
Speaker 1: seventeen early eighteen, given the dramatic slowing a global growth. So,
13:22
Speaker 1: you know, I think, for the time being is a
13:24
Speaker 1: market participant. The best you can hope for us the escalation,
13:28
Speaker 1: a gradual return of investor and CEO confidence, and then
13:32
Speaker 1: some chance to grow it close to two percent again
13:35
Speaker 1: over the next six to nine months. More than likely
13:38
Speaker 1: that will be stuck in this one and a half
13:39
Speaker 1: to two percent range for the foreseeable future. Unfortunately, Troy,
13:43
Speaker 1: I ask you, thank you so much for being with us.
13:45
Speaker 1: Troy Gayski is a partner, co chief investment Officer and
13:49
Speaker 1: senior portfolio manager at Skybridge Capital. All Right, well, the
14:10
Speaker 1: costs for the drugmakers associated with the opioid crisis are
14:14
Speaker 1: really starting to add up. We had some more news today,
14:17
Speaker 1: some more fines. Let's get the latest from Max Neeson,
14:20
Speaker 1: Max's biotech, farm and healthcare calumnist for Bloomberg Opinion. Joins
14:23
Speaker 1: us here in our Bloomberg Interactive Broker studio. So another
14:27
Speaker 1: set of fines coming down, some litigation still out there, Max,
14:30
Speaker 1: what's the latest year? Yeah? Absolutely, So. This was a
14:33
Speaker 1: settlement for the three largest distributor drug distributors in the
14:37
Speaker 1: country and have with two Ohio counties. This is the
14:41
Speaker 1: first federal trial of you know, trying to assigned blame
14:46
Speaker 1: and extract damages over the opioid crisis. Basically, what this
14:50
Speaker 1: does is delay a trial that that was would have
14:53
Speaker 1: been potentially um troublesome or or led to a large
14:56
Speaker 1: verdict UM and and lets them work on a large
15:00
Speaker 1: your settlement works. That's still going on, I think for
15:03
Speaker 1: for other drug makers have already settled with these two counties.
15:06
Speaker 1: It just sort of kicks the can so they can
15:09
Speaker 1: try to come up with a broader resolution that you know,
15:11
Speaker 1: there's still thousands upon thousands of these suits out there
15:14
Speaker 1: and they still need to work that out. It seemed
15:16
Speaker 1: like they were getting close to a deal that might
15:18
Speaker 1: have been valued at as much as fifty billion dollars,
15:21
Speaker 1: but UM that kind of fell apart due to apparently
15:23
Speaker 1: some objections from from local and county governments. Do we
15:26
Speaker 1: have a sense of how big the settlement has to
15:29
Speaker 1: be to sort of remove the uncertainty? I mean, what
15:32
Speaker 1: sort of the brank breakpoint of when the settlement doesn't
15:36
Speaker 1: necessarily get received as good news by simply taking away
15:40
Speaker 1: the uncertainty of these opioid cases. You know, I think
15:44
Speaker 1: there's there's still a good amount of room before we
15:46
Speaker 1: get there, just because I think UM shareholders are just
15:50
Speaker 1: sort of so hungry for relief when it gets to
15:53
Speaker 1: the point for some of these drug makers that have
15:55
Speaker 1: heavy debtloads that you know, it starts to make solvency
15:58
Speaker 1: or our meeting credit evidence a little little risky, then
16:02
Speaker 1: then you might see a break point. But but I
16:03
Speaker 1: think there's some wiggle room, especially when it comes to
16:06
Speaker 1: the distributors and and uh, a company like Johnson and Johnson,
16:09
Speaker 1: which can afford pretty much anything. I think you've got
16:12
Speaker 1: a way to go before it would be seen as
16:14
Speaker 1: anything but relief. So, Max, are we at this stage
16:17
Speaker 1: now where we want to get all these thousands of
16:19
Speaker 1: suits together, wrap them all up, and then get all
16:23
Speaker 1: the companies that are on the hook here and then
16:26
Speaker 1: assigned blame and get one massive global settlement. Is that
16:29
Speaker 1: kind of the goal here? That's exactly the goal. And
16:32
Speaker 1: and that that was sort of one of the explicit
16:34
Speaker 1: goals of the judge that they've consolidated all of these
16:37
Speaker 1: suits under just because you know, then you actually get
16:40
Speaker 1: money into communities more rapidly. Um, you know, you resolve
16:44
Speaker 1: this uncertain instead of dragging it out over you know,
16:46
Speaker 1: years and years in many cases, which there's a lot
16:49
Speaker 1: of variation and um generally you know, not not all
16:53
Speaker 1: that productive for anybody involved. So that that's the hope,
16:56
Speaker 1: and there still seems to be a chance of it happening.
16:58
Speaker 1: It just isn't gonna come this morning, is I think
17:00
Speaker 1: some investors were hoping, which is why you see shares
17:03
Speaker 1: of the distributors and Inteva down today. So far, Where
17:06
Speaker 1: is the money going? Is it going to people who
17:09
Speaker 1: had loved ones who died or who lost productivity as
17:12
Speaker 1: a result of addictions, or is it going to municipalities.
17:15
Speaker 1: It generally will be going to municipalities, although you know,
17:19
Speaker 1: it depends on the structure of the settlement. Um, all
17:22
Speaker 1: of that still to be worked out. Well, we'll see
17:24
Speaker 1: that in the details. Um. You know. I think that's
17:27
Speaker 1: really the fascinating thing to think about, is what comes next?
17:30
Speaker 1: How do you actually direct that money in a productive way? Um?
17:34
Speaker 1: I I hope that that happens. But what what what?
17:38
Speaker 1: What would be productive? I mean in my opinion, and
17:41
Speaker 1: I think it would have to be coupled with some
17:43
Speaker 1: some reforms as to how we actually spend money on
17:46
Speaker 1: opio treatment the first place, and and a dramatic increase
17:49
Speaker 1: in investment in making medication assisted treatment more more available.
17:55
Speaker 1: There's sort of a stigma against it, um, you know,
17:58
Speaker 1: because we have the sort of twelves a a based
18:01
Speaker 1: model where it's abstinence or nothing, and there's been just
18:04
Speaker 1: resistance communities to having things like method o clinics or
18:08
Speaker 1: or making it really easy for doctors to to prescribe
18:10
Speaker 1: and administer that sort of medication. But it works. UM,
18:14
Speaker 1: that's the important thing. It's been shown over and over
18:16
Speaker 1: again to be one of the few things. You know,
18:18
Speaker 1: opioddiction changes your brain chemistry. You have to account for that. UM,
18:22
Speaker 1: just going to a treatment center and and you know,
18:24
Speaker 1: just squaring off you need medication, you need to help
18:27
Speaker 1: in many cases and making that more available, making safe
18:30
Speaker 1: injection sites available, these things that that are are a
18:33
Speaker 1: little more controversial but more effective. UM. That needs to happen.
18:37
Speaker 1: If the money goes there, then then great. But if it, UM,
18:40
Speaker 1: if it just sort of gets wrapped up, you know,
18:42
Speaker 1: goes to financing other things and municipalities, then it won't
18:46
Speaker 1: be quite as effective. So we'll see Max News and
18:48
Speaker 1: thank you so much for joining us. I'm sure we'll
18:50
Speaker 1: be talking about this repeatedly as these cases go on.
19:06
Speaker 1: If you've ever wanted to watch someone else watch a
19:10
Speaker 1: movie or a show to see their reaction, this next
19:13
Speaker 1: guest has you covered. And we're so glad to bring
19:16
Speaker 1: in Derek Forbes chief executive officer of Stardust, which is
19:19
Speaker 1: a very cool name I have to say here in
19:21
Speaker 1: our interactive broker studios. Can you just start by saying
19:24
Speaker 1: what is Stardust? Hey, guys, thanks for having me on. Yes. So,
19:27
Speaker 1: startusts a social media app all about movies and TV
19:30
Speaker 1: shows where you can talk about the latest episodes you've
19:33
Speaker 1: been watching, find out what people had to say about
19:35
Speaker 1: movies and theaters, and figure out what you want to
19:37
Speaker 1: watch next. So who is on it gives a sense
19:40
Speaker 1: of kind of who is on this app and who
19:43
Speaker 1: do you want to be on this app? Yeah, so,
19:45
Speaker 1: I guess there's a whole lot of entertainment fans on
19:47
Speaker 1: their passionate entertainment fans that love talking about shows they've
19:51
Speaker 1: been watching, obsessing about the latest episode. You know, think
19:55
Speaker 1: Game of Thrones people got really into it. They like
19:57
Speaker 1: to talk about what happened on the episode, what was
19:59
Speaker 1: going to happen next week, predictions, theories, as well as
20:02
Speaker 1: just hearing analysis and figuring out what they might like
20:05
Speaker 1: to watch next. So how many people have actually downloaded
20:10
Speaker 1: the app? Yeah, so we're around about a hundred thousand
20:12
Speaker 1: users at the moment. It's pretty new we're really just
20:15
Speaker 1: starting to get going with our marketing efforts now and
20:17
Speaker 1: hoping to get that in front of a much larger audience.
20:20
Speaker 1: And I guess that that there's sort of a flip
20:22
Speaker 1: side to this, which is the more information you get
20:25
Speaker 1: as to what people like, how they talk about films,
20:29
Speaker 1: that it can be monetized, right, that data. Yeah, Well,
20:34
Speaker 1: the whole idea of this came from hearing from a
20:36
Speaker 1: lot of film and TV executives that every time they
20:39
Speaker 1: come out with a new title, it's a whole exercise
20:42
Speaker 1: to try and find an audience for that and then
20:44
Speaker 1: reach those people to get in front of them. What
20:47
Speaker 1: we can do with Stardust is is help connects new
20:50
Speaker 1: titles with audiences that are actually going to really like it.
20:52
Speaker 1: And so, yes, it's using that data, but we see
20:55
Speaker 1: it as really benign way of using that data because
20:57
Speaker 1: we're helping people to find content that they're going to
21:00
Speaker 1: they like. Um. One of the new features we've just
21:04
Speaker 1: released is really exciting. It's it uses machine learning and
21:08
Speaker 1: based on all of your ratings of movies and TV
21:11
Speaker 1: shows that you put in, it will give you a
21:13
Speaker 1: set of a few titles every week that you're going
21:15
Speaker 1: to really love watching UM and we we've found that
21:18
Speaker 1: people have been really stoked with some of the recommendations
21:21
Speaker 1: they've had. So how do you work with the content creators,
21:24
Speaker 1: the TV networks, the movie studios. What's your relationship with them,
21:27
Speaker 1: because I would think they would want to work with
21:30
Speaker 1: you to again try to reach an audience. Absolutely. Yeah,
21:34
Speaker 1: we have great relationships with a number of the big
21:37
Speaker 1: studios and we're starting to work on some initiatives with
21:40
Speaker 1: them in terms of promoting their titles into users of
21:44
Speaker 1: the app, and then also helping to to use videos
21:48
Speaker 1: from our app of people talking about titles to to
21:50
Speaker 1: help promote their movies on other forms of social media
21:53
Speaker 1: and platforms. How do you make money right now? We're
21:56
Speaker 1: pre revenue, so we don't right now, but we have
22:00
Speaker 1: a plan and it's going to be all about getting
22:04
Speaker 1: titles in front of audiences and and that's very valuable
22:06
Speaker 1: to studios to connect their UM their releases with an audience.
22:12
Speaker 1: So we've actually seen some pushback from investors with companies
22:17
Speaker 1: that have an idea but that don't make money yet.
22:20
Speaker 1: How do investors handle what you're giving them? Yeah, it's
22:25
Speaker 1: a great question, and I think with a social media
22:28
Speaker 1: like this, it's all about the user numbers, and it's
22:31
Speaker 1: all about how engaged those users are and how strongly
22:34
Speaker 1: they're retained. If you have eyeballs that are regularly coming
22:37
Speaker 1: back to an app, then there is no question that
22:39
Speaker 1: there is value in that in terms of its ability
22:42
Speaker 1: to draw users attention to a product. H and UM.
22:48
Speaker 1: And I think that you know, unlike some of these
22:49
Speaker 1: other horror stories that you've seen recently, there aren't all
22:52
Speaker 1: of the same costs associated where you're kind of like
22:54
Speaker 1: throwing money out the window wherever user you get, right,
22:57
Speaker 1: So this sounds like an advertising driven model at some
23:00
Speaker 1: point based upon audience. So that to me means you're
23:04
Speaker 1: competing against anybody else who's trying to get eyeballs and
23:06
Speaker 1: advertising and things like that. So you know, a Facebook
23:10
Speaker 1: for example, or on Instagram. So how do you kind
23:12
Speaker 1: of position your app versus maybe some of the bigger ones. Yeah,
23:16
Speaker 1: great question. And so startus is specialized. So it's because
23:20
Speaker 1: it's all about movies and TV. UM. It's a place
23:22
Speaker 1: where you can go and get richer information about the
23:25
Speaker 1: titles that you're interested in UM and connect with people
23:28
Speaker 1: who are also interested in it and and I think
23:31
Speaker 1: that's that's at the heart of the draw. Also, we've
23:35
Speaker 1: done a really good job of making it anti troll.
23:37
Speaker 1: And so if you want to go there and talk
23:39
Speaker 1: about The Mandalorian when that show comes out in a
23:42
Speaker 1: few weeks time, and follow it episode by episode, you
23:46
Speaker 1: can do so in a place where you're not going
23:47
Speaker 1: to get like attacked or have like random people posting
23:50
Speaker 1: hateful comments. We're going to keep the conversation about the
23:53
Speaker 1: show well. Thank you so much for being with us,
23:56
Speaker 1: Derek Forbes, I really appreciate it. Derek Forbes, chief executive
23:59
Speaker 1: officer of start US, twining us here in our interactive
24:02
Speaker 1: broker Studios. Thanks for listening to the Bloomberg P and
24:05
Speaker 1: L podcast. You can subscribe and listen to interviews at
24:08
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Paul Sweeney.
24:11
Speaker 1: I'm on Twitter at pt Sweeney. I'm Lisa Abram Woyds.
24:14
Speaker 1: I'm on Twitter at Lisa A. Bram Woods One. Before
24:17
Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg
24:19
Speaker 1: Radio