July 9, 2025 • 24 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Norah Mulinda
Ed Ludlow, Bloomberg Technology Co-Host, discusses Linda Yaccarino stepping down as CEO of X, according to her post on X. He also previews the Sun Valley Conference.
Sally Bakewell, Bloomberg US Finance Team Leader, discusses Goldman Sachs’ plans to ask junior bankers to confirm their loyalty on a regular basis to limit advances from talent-hungry buyout firms.
Tim Craighead, Bloomberg Intelligence Chief Content Officer, discusses his research on ten companies to watch right now in Q3.
Jennifer Rie, Bloomberg Intelligence Senior Litigation Analyst, discusses Bloomberg Intelligence’s deep dive into the antitrust enforcement policies of President Donald Trump's administration.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Apple Coarclay and Android Auto with the Bloomberg
Business App. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:23):
Normal Linda Paul Sweeney live here in our Bloomberg Interactor
Broker Studio, streaming live on YouTube as well.
Speaker 3 (00:28):
Well.
Speaker 2 (00:28):
For me, being a media and entertainment background person, the
news for me today was Linda Yakarino stepping down as
chief executive officer of Elon musks x social media platform
after only two years on the job. From her days
at NBCUniversal. I knew Linda Yakarino. She's widely respected on
Wall Street in the media entertainment business. I personally was
(00:49):
surprised that she left NBCUniversal to go work for X
simply because I didn't think anybody could work for Elon
MUCKs Elon Musk because he's that hands on for the business.
We are are perfectly time to speak with a good friend,
Ed Ludlow, Bloomberg technology co host. He's in Sun Valley, Idaho,
where all of the media and tech mobils are meeting
up for a couple of days at the Allen and
(01:10):
Company conference. Ed low ed, how did this news land
in Sun Valley?
Speaker 4 (01:19):
Yeah, it's slightly surprising. It's interesting because, you know, in
her post, Yacarino framed it as a you know, mission
complete kind of turnaround process. But remember lower down in
the post she references Xai, and what's changed in recent
months is that Musk could combined x the social platform
(01:39):
with Xai, the ai company under Xai Holdings. You hit
a lot of the themes spot on pool that it
is difficult to work for Elon Musk, But the turnaround
bit that she cites in her post is one for debate.
You know, as we understand it, revenues in twenty twenty
four were down from twenty twenty three. They would look
(02:00):
like they might be up in twenty twenty five. It
was difficult to bring advertisers back to the platform, but
Yakumino had said many had returns of the platform. Elon
must being the sort of wild card about the appropriateness
I guess of advertising on that platform. But yeah, there's
a lot of ways we could go with this one.
Speaker 3 (02:20):
And I mean, you talked about you know, the volatility,
especially when we think about a lot of Musk's businesses
and what's happening inside for Linda, does it seem as
though this was just a decision waiting to happen or
what are you hearing?
Speaker 4 (02:37):
Yeah, nothing so far. We just don't know. I would
note that it's sort of the latest high profile stepping
down or departure from Elon Inc. We're seeing it happen
across Tesla. As we reported Omei d Afsha, who for
a really long time was basically Elon's chief of staff
and later had more broader responsibilities across sales and manufacturing.
(03:00):
We broke the story that he was gone out of
Tesla in SpaceX. I know that internally, you know, we
broke the story on their latest valuation yesterday. But internally
departures have kind of ramped up recently as Musk's political
activity has ramped up. It is not easy to work
for Elon Musk Like kind of how the structure works
(03:21):
at these companies is there are very capable people there.
For example, Xai Xai is a really key point here
about what's happening with x But there's a guy there
called Ross Norden, who is also kind of like the
chief of stuff, but he's doing a lot for Elon
while Elon's out doing whatever Elon's doing. But at the
end of the day, no matter how many decisions are
made by committee, by this group of very talented people
(03:42):
and all these companies, the final call is kind of
made by Elon, and that can sometimes slow things down.
It can sometimes lead to robust debate, you know, things
like that. But again, I'm super really focused on where
X fits into XAI long term. I think that's a
big factor here. And there's a hint in that Yakarino post.
Speaker 2 (04:00):
I can see them. You're out in Sun Valley, Idaho.
I love the background there. I skied that mountain many
years ago. It's fantastic out there, summer or winter. I
recommend at the Sun Valley conference out there, the Allen
and Combay conference. What's kind of the expectation for these
couple of days.
Speaker 4 (04:19):
Yeah, So it's interesting because there is a bit of
movement in TMT and that goes to the history of
this event, right, Paul, you know it so well. You know.
The news that we got is that disney Hurst might
look at selling their A and e asset, which is
the cable channels like History Channel, So that's interesting. Just
having that out there means that there's a marketplace right now.
We know that Warner Brothers is on this plan moving
(04:41):
into the middle of next year where they want to
have a split right, a standalone streaming company and a
standalone pure place studio. And we did manage to catch
up with David Aslav, the CEO of Warner brother Discovery,
who said it's kind of all on track. We don't
need any approvals, We're not really ready to talk about
the debt side of things. They also just of course
had Superman the Box Office and he was pretty pretty
(05:02):
happy about that. But I think that the signals are
that in that space media assets, there's some life and
it just takes one domino for the rest of full
if you know what I mean.
Speaker 3 (05:11):
Well, thanks so much to Ed Ludlow as we really
break down what's happening at the Sun Valley conference, and
of course that Linda Yakarino headline of her departure from X.
Speaker 1 (05:22):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business app, listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (05:36):
All right, folks, if you're sitting in front of a
turmol type in read go and over the last eight hours,
the number one read story has been about Goldman Sax
Goldman asking their analysts to swear they haven't lined up
pe jobs. I have no idea what's going on here?
And back in my day, you work two to three years,
you went and got your MBA, you came back to
this associated w your money, and then he just kind
(05:57):
of moved on and on right up? Ain't that way
right now? Sally Bigwell joins us. Bloomberg US Finance team
leader joins us Here, Sally, what's the story of Goldman
Sacks here?
Speaker 5 (06:09):
Right?
Speaker 2 (06:09):
They have to asking their associates or their analysts to swear.
Speaker 6 (06:13):
That's right, and also just to say, back in your day,
couldn't have been obviously that long ago. But yes, Goldman
Sachs is asking its incoming class of analysts to effectively
take a bit of its own kind of pledge of
allegiance to the bank and certify that every three months
they're not accepting an offer from basically a private equity firm.
Speaker 2 (06:33):
I just accepting I haven't even started Goldman Sacks, but
I've already accepted something at KKR like two years later exactly.
This is the practice. I'm interviewing at Goldman Sacks for
a job, and I'm interviewing KKR for a job. Planners gotcha?
Speaker 6 (06:47):
Okay, that makes doesn't it sound terrific honestly? But yes.
It's known as on cycle recruitment, and this is this
practice where private equity firms try and recruit incoming junior
bankers who maybe haven't even efficient got in the door
at their bank programs analyst programs, and line them up
to take on private equity jobs as soon as they
(07:07):
finish those analyst programs. And you can kind of understand
why they get this fully trained, fully formed mini junior
banker who which then they haven't had to pay a
penny to train them.
Speaker 2 (07:17):
Yep.
Speaker 3 (07:18):
I honestly feel like these big banks are always doing
something that surprises me. There's always news coming out of
these things, and I'm like, what's what's going on with
the young bankers here?
Speaker 2 (07:25):
But well, I think the reason I think the banks
have allowed this to kind of happen because who is
Goldman Sachs's biggest customers the private equity firms. You don't
want to upset them fair it's kind of a quid
pro quo. Will train these kids if they want to
go and work for you. Fine, it works for us
long term because we've got a Goldman or Morgan Stanley
(07:46):
alum that's now in KQR, and who knows where that
person will be ten years from now that could be
a big player, and it all kind of works out.
But it's got silly now, hasn't.
Speaker 3 (07:54):
Is it uncommon? I mean, are we seeing a lot
of other banks doing some of these stringent rules.
Speaker 6 (07:59):
So a few banks have started to push back. JP
Morgan was the first. In recent months, Jamie Diamond has
actually called this practice of on cycle recruitment unethical and
warned that he wanted to eliminate it because he says
it puts the junior bankers in a difficult position. They're
barely in the door at a bank and they already
have to start thinking about a career and they don't
even know at that stage what they might want, what they.
Speaker 3 (08:21):
Might be good at out of college probably as well.
Speaker 6 (08:23):
Fresh out of college, and so JP Morgan earlier this month.
It actually told incoming graduates that if they do accept
offers during their first eighteen months at the bank, they
will be fired. So it was a very clear message
and actually a lot of some private equity firms have
pulled back since then. Apollo is one, General Atlantic is another.
(08:44):
They've actually said to their candidates that they will not
be recruiting, they will not be doing this on cycle
recruiting and recruiting junior analysts.
Speaker 2 (08:53):
So early it's yeah, it's just crazy. I know, times
have changed. I mean it used to be you work
two to three years as an and I'll set investment
bank like I did, and then they literally kick you
out the door and say go get your MBA. You
go get your MBA. You come back and you double
your money and you kind of do the same jobs
twenty years ago. That in itself was kind of an
(09:14):
odd situation. But now they don't even force you to
go get an MBA because they don't want to lose you.
I mean, you know, lose you to anybody.
Speaker 3 (09:23):
So are they having trouble with recruits?
Speaker 2 (09:26):
There's twenty seven great resumes for one slot. You think
this is going to hold? Sounding thing?
Speaker 6 (09:32):
I think that's the big question. Does this spell the
end of the practice. Probably not. I think it depends
how competitive the market gets. Banks have periodically made bursts
of effort over the last ten years or so. Morgan
Stanley did back in twenty thirteen that didn't really go anywhere,
so they've tried to sort of stem this tide. Whether
it takes hold permanently, I think it's almost impossible to say.
(09:55):
It will depend on market dynamics. But this is certainly
one moment where they seem to have created this pullback
by private equity.
Speaker 3 (10:02):
From doing this. I mean, as a perspective junior banker,
can you really even scout out a different bank or
are they all doing the same thing?
Speaker 6 (10:10):
I think that's a great question, and I mean I
think this is part of the rationale for the private
equity firms are at least saying, you know that at
that stage in your career, you don't know what you're doing.
I saddenly didn't know what I was doing at that age.
I still barely do, so how can you make this
kind of decision? And also puts you in a conflict
of interest position. You know, you're in a bank, you
have access to the bank's confidential information. But you're already
(10:33):
admitted to a private equity job. I mean, that's not
a good position to be in.
Speaker 2 (10:36):
Yeah, it's tough for the for the junior people from
if that conflict of interesting and it's just it's just
a it's odd economic model. I never really understood why
they did it that way. So anyway that it's on
the Bloomberg terminal, it's probably on Bloomberg dot com by
now the number one read story at their Goldman asked
analyst to swear they haven't lined up job, so I
guess it's a pinky swear. I'm not sure how that
(10:58):
all works. But Sarah Baker joins us there and we
appreciate her reporting on that story, taking the time to
come into our studio.
Speaker 1 (11:06):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (11:20):
I do want to turn to Tim Craighead and he's
based in London. He's joining us via zoom. He's a
research director for content for Bloomberg Intelligence, and I'm looking
at this story that's out right now and lots of
really interesting illustrations, but the story is called Banking Booze
and Double seven Wheels. Ten companies to watch right now, Paul,
(11:42):
I have no idea where this is going. I'm so curious.
It's based off the headline alone. But Tim contextualizes for us,
tell us what is this list?
Speaker 5 (11:51):
Yep, sure, thanks thanks for having me on. So these
these ten ideas are all part of a broader list
of what we call focus ideas. Ideas are where are
analysts around the globe, cross regions, cross sectors have high conviction,
fundamental points of view that they think are different from
(12:11):
what the market thinks, anti consensus, and importantly, they're catalysts
coming up that we think can change market perceptions. And
these ten all have important catalysts coming up during the
third quarter. And just to put it out there, you
can see all of these focus ideas on bi focus
on the terminal.
Speaker 2 (12:31):
Tim, what I like about these ideas? You know, because
people are always looking for ideas long and short, you
guys have the ideas. And what I really like that
this research format is you have the triggers what's going
to make what has to happen in order for this
call to work on a particular stock Aston Martin. I'm
asking for Matt Miller, what's the call here on Aston Martin?
Speaker 5 (12:53):
So the call on Acid Martin. As much as I
like the cars, and obviously this is where the double
low seven reference comes from. They've got a really interesting
new lineup of vehicles, but they're short on V twelves
and notwithstanding the world of evs and all that sort
(13:15):
of stuff, the high end V twelves from Ferrari and
Lamborghini are hot. And you look at the inventory levels
of Aston Martin on the lots, they're too high. We
think that there's a capital infusion that's likely needed in
coming months, and so we actually have a cautious view
on Aston Martin from that perspective.
Speaker 3 (13:37):
Tim, you are always putting out super interesting stuff. I mean,
we had fifty companies to watch in January and then
we have the quarterly update in April, and then of
course now this story that's out loving the graphics here.
How long did it take to put us together?
Speaker 5 (13:51):
Well, it's an ongoing process of working with our analysts
in terms of where do we see these ideas come
from and then you know, our friends in BusinessWeek like
to pull together the graphics on these things. It is
a It is a good looking piece on the UH on, Bloomberg,
dot Com.
Speaker 2 (14:13):
Booze, Dago. What's the story there.
Speaker 5 (14:16):
Yeah, the Agio it ties in a little bit with
a couple of ideas here. You know, I mentioned Aston Martin.
That's obviously a high end consumer idea. And even though
we're consumed concerned about Aston Martin specifically, the high end
luxury vehicle market is good. Similarly with the Agio, high end,
high end, Booze high end spirits. They are the world's
(14:38):
largest spirits manufacturer, is doing relatively well. You know, their
recent sales trends have been robust. We think that's going
to continue to show through. There has been concern about
things like tariffs and what could be the impact, especially
from a US consumer base. We're less concerned and we're optimistic.
(15:00):
Another consumer, higher end idea you guys know and love
in the States is Dick Sporting Goods. You know, this
is a classic good old consumer's growth story where not
only do you know the store, but you might have
been in one of their new, bigger formats where they
have you know that much more kit. Their sales trends
(15:24):
continue to be quite good, despite concerns about what are
tear's going to mean for consumer here or there? So
you know those are all those are all consumer ideas.
There's certainly a common thread there.
Speaker 3 (15:36):
You mentioned Dick said, I'm looking at easy Jet, which
of course we know is a low cost British airline,
and we have a sunny outlook here. But what do
you think will be the most surprising call here for readers.
Speaker 5 (15:48):
Yeah, it's interesting in this instance. Obviously this is not
the high end consumer, this is everyday consumer. Is that
this isn't so much about the demand, which actually demand
for travel and experience continues to be pretty good. This
is more of a story on an operational basis. They're
replacing a lot of older planes with newer planes that
(16:13):
have bigger capacity and much more fuel efficient, so this
is a margin story. Easy Jet has historically lagged behind
Ryan Air at the other low cost carrier here in Europe.
We think that that's set to change.
Speaker 2 (16:27):
Tim you live and work in London, but as most
of our listeners can tell, you're not an Englishman. You're
from the Great Commonwealth of Virginia. Talk to us. Are
the tourists Is it as crazy in London this year
as it's been in recent years. What's the tourism factor
they're in London you state.
Speaker 5 (16:44):
The quick answer is yes, notwithstanding the fact that the
pound is actually pretty robust. Of late, streets are busy,
and you know it's true, it's true in the city
walk out the door here Tuesday, Wednesday, Thursday or the
New Friday has been a warm summer. But you know,
(17:07):
this is also the time for Wimbledon, and beyond that,
it's just been it's just been busy with people coming
from all over the world, whether it's China, whether it's
the US. This seems to be a hot ticket. So yeah,
it still feels pretty good.
Speaker 2 (17:23):
Yeah, I'm trying to get, you know, Audrey child Friedman,
to get the euro back to parody because I'm coming
over to Europe in the fall little vacation, little holiday.
But I mean you mentioned the pounds sterling, but the
by the euro one seventeen that gets your attention.
Speaker 5 (17:39):
Yeah, it does well. And you know, I guess from
from our perspective, and primarily Audrey's perspective, this is a
this is a week dollar story as opposed to stronger
other currency story, and we think that there's more legs
to this. You know. One of the big themes that
(18:02):
comes up on all the investor discussions or events that
I'm at is that is the long standing premise of
American exceptionalism. You pop money in US bonds, US stocks
and they take off. You know, is that holding valuations
a lot more interesting elsewhere?
Speaker 2 (18:19):
All right? Tim, great stuff has always Tim Crackett, Chief
Content Officer, Bloomberg Intelligence.
Speaker 1 (18:25):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (18:39):
Welcome back to Bloomberg Intelligence Radio. I'm Normalanda here with
Paul Sweeney, and it is Wednesday morning. We're seeing stocks
that are higher right now. We've got consumer communication services
and consumer discretionary as some of the best performing sectors
in the S and P five pund you right now.
Lots to keep an eye on today, But we want
to talk to Jennifer Ree. She is Bloomberg Intelligence Senior
(19:01):
litigation analyst. And we're going to be chatting a little
bit about the US antitrust environment and what the second
half of this year looks like. I mean, Jennifer, the
anti trust environment was pretty aggressive under the Biden administration.
We were seeing a lot of those larger companies getting
caught in the crosshairs. Here, can you set up for
us what it looks like right now one of a
new administration?
Speaker 7 (19:22):
You know, that's right, Nora. It was a really tough
four years, particularly for deal makers, and I think there
was a lot of uncertainty going into the election during
the fourth quarter of last year. But I think there
are some really good signs for those companies that want
to engage in big deals going forward. And the main
reason is because Trump's anti trust enforcers are willing to
accept settlements with a remedy to allow a bigger deal
(19:45):
to close, essentially meaning that if there's an overlapping product
and there'd be too much concentration in the market for
that product, that product line could be sold and the
larger deal can get closed. And the Buying administration essentially
refused to do that. They thought if a deal was problematic,
we're just going to sue it. And try to block it,
and it led to a lot of lawsuits, a lot
of abandonments, and a lot of deals that just didn't
(20:05):
get signed to begin with. So because we're seeing this
sign that deals can get settled, I do think we're
going to start to see more bigger deals getting signed
up in the second half and probably next year two.
Speaker 2 (20:16):
So, you know, for all these agencies within Washington, they
obviously feel the presence of President Trump very keenly. The
folks that are in charge of the Federal Trade Commission,
the Department of Justice, how much independence do you think
they have at this.
Speaker 7 (20:34):
Point, you know, Paul, probably not very much. You know,
in the past, in particular, the Federal Trade Commission was
supposed to be quite independent, and really it was because
it had five commissioners, only three of which could be
from one political party, and they needed a majority vote
to take any action with a deal. But President Trump
has fired the two Democrats, so we now have three Republicans,
(20:56):
and we have three Republicans that very much are behind
him and his political visions. So I think that they
will essentially do what they think he wants done. And
we have seen an example of that because they did
clear a deal between two huge ad agencies, OmniComm and
Interpublic with what we call a behavioral agreement, which they
(21:16):
have said that they don't tend to want to take,
agreeing that they wouldn't prevent advertisers from advertising next to
content that was right leaning or expressed conservative viewpoints that
they might not agree with. So that was very much
kind of in lined with this administration and what this
administration wants. So I do think we're going to see
alignment in terms of what these remedies are and the
(21:39):
deals that get cleared with what Trump is saying and
with what Trump wants.
Speaker 3 (21:45):
So Trump terminated two Democratic FTC commissioners back in the
first quarter of this year, and of course we know
this did raise some significant constitutional concerns in terms of
the commission's historical independence and of course enforcement effort. What
is this really signaled in terms of potential policy changes.
Speaker 7 (22:06):
Well, you know the thing is that, first of all,
we do all of these challenges are going up to
the Supreme Court, and we do think that this is
going to stick. We do think that because of some
of the other decisions about other agencies that even though
the two Democrats do have an ongoing lawsuit about their termination.
We think that probably the Supreme Court is going to
side with Trump and they are going to remain terminated.
(22:27):
For practical purposes, as I said, I don't think that
there's very much impact here because you do need a
majority vote to settle or to suit a block a deal,
so you need three out of the five. In the past,
we have seen that the FTCs operated on a very
sort of bipartisan or nonpartisan basis. We usually have a
unanimous or maybe a four to one decision, but it hasn't.
Speaker 2 (22:48):
Been that way.
Speaker 7 (22:49):
You know, starting with Biden, we were seeing a lot
of three to two decisions where along party lines, right,
So I think that we probably would have continued to
see that even if the two Democrats were still there,
you'd have the three Republicans. You'd probably get your three
to two vote to do whatever it was that the
Republican tengent wanted. So from a practical standpoint, it's not
going to have that much impact on the decision making
(23:12):
for deals of this FTC.
Speaker 2 (23:13):
Are there any deals that are currently being held up
or being scrutinized that maybe the participants are saying, oh boy,
now we're going to really sail through, and we thought
maybe on our Biden it could be a tough slide
or anything we should keep an eye on.
Speaker 7 (23:26):
You know, Paul, The one I'm really interested in is
the Google Whiz deal. And I say that because we
know this administration is no friend to big tech, and
we know that they're staying really aggressive on the monopolistic
conduct side, where Google and Apple and Amazon and Facebook
have all been sued for monopolistic conduct. And to me,
that deals very interesting because just from an anti trust perspective,
(23:47):
I don't really think it poses anti trust concerns. You
know that the concern would be that you have a
cloud company that's marrying with a cloud security company and
they could foreclose rivals. But I think that there's ample
competition on both sides, on the cloud side and the
cloud security side, that you probably don't have a very
strong theory of harm. But we know that this administration
doesn't necessarily love Google. I'm going to be interested to
(24:10):
see what happens there, but I suspect we're not going
to learn in the second half. It's probably going to
push into the beginning of next year.
Speaker 2 (24:16):
All right, Jen, thanks so much for joining us a
general senior litigation analysts for Bloomberg Intelligence. He's got the
deep dive kind of looking at the whole antitrust world
under President Trump. You can find out on the Bloomberg
turmol It's great read, detailed, long report with a lot
of good stuff in there.
Speaker 1 (24:32):
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Speaker 2 (00:23):
Normal Linda Paul Sweeney live here in our Bloomberg Interactor
Broker Studio, streaming live on YouTube as well.
Speaker 3 (00:28):
Well.
Speaker 2 (00:28):
For me, being a media and entertainment background person, the
news for me today was Linda Yakarino stepping down as
chief executive officer of Elon musks x social media platform
after only two years on the job. From her days
at NBCUniversal. I knew Linda Yakarino. She's widely respected on
Wall Street in the media entertainment business. I personally was
(00:49):
surprised that she left NBCUniversal to go work for X
simply because I didn't think anybody could work for Elon
MUCKs Elon Musk because he's that hands on for the business.
We are are perfectly time to speak with a good friend,
Ed Ludlow, Bloomberg technology co host. He's in Sun Valley, Idaho,
where all of the media and tech mobils are meeting
up for a couple of days at the Allen and
(01:10):
Company conference. Ed low ed, how did this news land
in Sun Valley?
Speaker 4 (01:19):
Yeah, it's slightly surprising. It's interesting because, you know, in
her post, Yacarino framed it as a you know, mission
complete kind of turnaround process. But remember lower down in
the post she references Xai, and what's changed in recent
months is that Musk could combined x the social platform
(01:39):
with Xai, the ai company under Xai Holdings. You hit
a lot of the themes spot on pool that it
is difficult to work for Elon Musk, But the turnaround
bit that she cites in her post is one for debate.
You know, as we understand it, revenues in twenty twenty
four were down from twenty twenty three. They would look
(02:00):
like they might be up in twenty twenty five. It
was difficult to bring advertisers back to the platform, but
Yakumino had said many had returns of the platform. Elon
must being the sort of wild card about the appropriateness
I guess of advertising on that platform. But yeah, there's
a lot of ways we could go with this one.
Speaker 3 (02:20):
And I mean, you talked about you know, the volatility,
especially when we think about a lot of Musk's businesses
and what's happening inside for Linda, does it seem as
though this was just a decision waiting to happen or
what are you hearing?
Speaker 4 (02:37):
Yeah, nothing so far. We just don't know. I would
note that it's sort of the latest high profile stepping
down or departure from Elon Inc. We're seeing it happen
across Tesla. As we reported Omei d Afsha, who for
a really long time was basically Elon's chief of staff
and later had more broader responsibilities across sales and manufacturing.
(03:00):
We broke the story that he was gone out of
Tesla in SpaceX. I know that internally, you know, we
broke the story on their latest valuation yesterday. But internally
departures have kind of ramped up recently as Musk's political
activity has ramped up. It is not easy to work
for Elon Musk Like kind of how the structure works
(03:21):
at these companies is there are very capable people there.
For example, Xai Xai is a really key point here
about what's happening with x But there's a guy there
called Ross Norden, who is also kind of like the
chief of stuff, but he's doing a lot for Elon
while Elon's out doing whatever Elon's doing. But at the
end of the day, no matter how many decisions are
made by committee, by this group of very talented people
(03:42):
and all these companies, the final call is kind of
made by Elon, and that can sometimes slow things down.
It can sometimes lead to robust debate, you know, things
like that. But again, I'm super really focused on where
X fits into XAI long term. I think that's a
big factor here. And there's a hint in that Yakarino post.
Speaker 2 (04:00):
I can see them. You're out in Sun Valley, Idaho.
I love the background there. I skied that mountain many
years ago. It's fantastic out there, summer or winter. I
recommend at the Sun Valley conference out there, the Allen
and Combay conference. What's kind of the expectation for these
couple of days.
Speaker 4 (04:19):
Yeah, So it's interesting because there is a bit of
movement in TMT and that goes to the history of
this event, right, Paul, you know it so well. You know.
The news that we got is that disney Hurst might
look at selling their A and e asset, which is
the cable channels like History Channel, So that's interesting. Just
having that out there means that there's a marketplace right now.
We know that Warner Brothers is on this plan moving
(04:41):
into the middle of next year where they want to
have a split right, a standalone streaming company and a
standalone pure place studio. And we did manage to catch
up with David Aslav, the CEO of Warner brother Discovery,
who said it's kind of all on track. We don't
need any approvals, We're not really ready to talk about
the debt side of things. They also just of course
had Superman the Box Office and he was pretty pretty
(05:02):
happy about that. But I think that the signals are
that in that space media assets, there's some life and
it just takes one domino for the rest of full
if you know what I mean.
Speaker 3 (05:11):
Well, thanks so much to Ed Ludlow as we really
break down what's happening at the Sun Valley conference, and
of course that Linda Yakarino headline of her departure from X.
Speaker 1 (05:22):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business app, listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (05:36):
All right, folks, if you're sitting in front of a
turmol type in read go and over the last eight hours,
the number one read story has been about Goldman Sax
Goldman asking their analysts to swear they haven't lined up
pe jobs. I have no idea what's going on here?
And back in my day, you work two to three years,
you went and got your MBA, you came back to
this associated w your money, and then he just kind
(05:57):
of moved on and on right up? Ain't that way
right now? Sally Bigwell joins us. Bloomberg US Finance team
leader joins us Here, Sally, what's the story of Goldman
Sacks here?
Speaker 5 (06:09):
Right?
Speaker 2 (06:09):
They have to asking their associates or their analysts to swear.
Speaker 6 (06:13):
That's right, and also just to say, back in your day,
couldn't have been obviously that long ago. But yes, Goldman
Sachs is asking its incoming class of analysts to effectively
take a bit of its own kind of pledge of
allegiance to the bank and certify that every three months
they're not accepting an offer from basically a private equity firm.
Speaker 2 (06:33):
I just accepting I haven't even started Goldman Sacks, but
I've already accepted something at KKR like two years later exactly.
This is the practice. I'm interviewing at Goldman Sacks for
a job, and I'm interviewing KKR for a job. Planners gotcha?
Speaker 6 (06:47):
Okay, that makes doesn't it sound terrific honestly? But yes.
It's known as on cycle recruitment, and this is this
practice where private equity firms try and recruit incoming junior
bankers who maybe haven't even efficient got in the door
at their bank programs analyst programs, and line them up
to take on private equity jobs as soon as they
(07:07):
finish those analyst programs. And you can kind of understand
why they get this fully trained, fully formed mini junior
banker who which then they haven't had to pay a
penny to train them.
Speaker 2 (07:17):
Yep.
Speaker 3 (07:18):
I honestly feel like these big banks are always doing
something that surprises me. There's always news coming out of
these things, and I'm like, what's what's going on with
the young bankers here?
Speaker 2 (07:25):
But well, I think the reason I think the banks
have allowed this to kind of happen because who is
Goldman Sachs's biggest customers the private equity firms. You don't
want to upset them fair it's kind of a quid
pro quo. Will train these kids if they want to
go and work for you. Fine, it works for us
long term because we've got a Goldman or Morgan Stanley
(07:46):
alum that's now in KQR, and who knows where that
person will be ten years from now that could be
a big player, and it all kind of works out.
But it's got silly now, hasn't.
Speaker 3 (07:54):
Is it uncommon? I mean, are we seeing a lot
of other banks doing some of these stringent rules.
Speaker 6 (07:59):
So a few banks have started to push back. JP
Morgan was the first. In recent months, Jamie Diamond has
actually called this practice of on cycle recruitment unethical and
warned that he wanted to eliminate it because he says
it puts the junior bankers in a difficult position. They're
barely in the door at a bank and they already
have to start thinking about a career and they don't
even know at that stage what they might want, what they.
Speaker 3 (08:21):
Might be good at out of college probably as well.
Speaker 6 (08:23):
Fresh out of college, and so JP Morgan earlier this month.
It actually told incoming graduates that if they do accept
offers during their first eighteen months at the bank, they
will be fired. So it was a very clear message
and actually a lot of some private equity firms have
pulled back since then. Apollo is one, General Atlantic is another.
(08:44):
They've actually said to their candidates that they will not
be recruiting, they will not be doing this on cycle
recruiting and recruiting junior analysts.
Speaker 2 (08:53):
So early it's yeah, it's just crazy. I know, times
have changed. I mean it used to be you work
two to three years as an and I'll set investment
bank like I did, and then they literally kick you
out the door and say go get your MBA. You
go get your MBA. You come back and you double
your money and you kind of do the same jobs
twenty years ago. That in itself was kind of an
(09:14):
odd situation. But now they don't even force you to
go get an MBA because they don't want to lose you.
I mean, you know, lose you to anybody.
Speaker 3 (09:23):
So are they having trouble with recruits?
Speaker 2 (09:26):
There's twenty seven great resumes for one slot. You think
this is going to hold? Sounding thing?
Speaker 6 (09:32):
I think that's the big question. Does this spell the
end of the practice. Probably not. I think it depends
how competitive the market gets. Banks have periodically made bursts
of effort over the last ten years or so. Morgan
Stanley did back in twenty thirteen that didn't really go anywhere,
so they've tried to sort of stem this tide. Whether
it takes hold permanently, I think it's almost impossible to say.
(09:55):
It will depend on market dynamics. But this is certainly
one moment where they seem to have created this pullback
by private equity.
Speaker 3 (10:02):
From doing this. I mean, as a perspective junior banker,
can you really even scout out a different bank or
are they all doing the same thing?
Speaker 6 (10:10):
I think that's a great question, and I mean I
think this is part of the rationale for the private
equity firms are at least saying, you know that at
that stage in your career, you don't know what you're doing.
I saddenly didn't know what I was doing at that age.
I still barely do, so how can you make this
kind of decision? And also puts you in a conflict
of interest position. You know, you're in a bank, you
have access to the bank's confidential information. But you're already
(10:33):
admitted to a private equity job. I mean, that's not
a good position to be in.
Speaker 2 (10:36):
Yeah, it's tough for the for the junior people from
if that conflict of interesting and it's just it's just
a it's odd economic model. I never really understood why
they did it that way. So anyway that it's on
the Bloomberg terminal, it's probably on Bloomberg dot com by
now the number one read story at their Goldman asked
analyst to swear they haven't lined up job, so I
guess it's a pinky swear. I'm not sure how that
(10:58):
all works. But Sarah Baker joins us there and we
appreciate her reporting on that story, taking the time to
come into our studio.
Speaker 1 (11:06):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (11:20):
I do want to turn to Tim Craighead and he's
based in London. He's joining us via zoom. He's a
research director for content for Bloomberg Intelligence, and I'm looking
at this story that's out right now and lots of
really interesting illustrations, but the story is called Banking Booze
and Double seven Wheels. Ten companies to watch right now, Paul,
(11:42):
I have no idea where this is going. I'm so curious.
It's based off the headline alone. But Tim contextualizes for us,
tell us what is this list?
Speaker 5 (11:51):
Yep, sure, thanks thanks for having me on. So these
these ten ideas are all part of a broader list
of what we call focus ideas. Ideas are where are
analysts around the globe, cross regions, cross sectors have high conviction,
fundamental points of view that they think are different from
(12:11):
what the market thinks, anti consensus, and importantly, they're catalysts
coming up that we think can change market perceptions. And
these ten all have important catalysts coming up during the
third quarter. And just to put it out there, you
can see all of these focus ideas on bi focus
on the terminal.
Speaker 2 (12:31):
Tim, what I like about these ideas? You know, because
people are always looking for ideas long and short, you
guys have the ideas. And what I really like that
this research format is you have the triggers what's going
to make what has to happen in order for this
call to work on a particular stock Aston Martin. I'm
asking for Matt Miller, what's the call here on Aston Martin?
Speaker 5 (12:53):
So the call on Acid Martin. As much as I
like the cars, and obviously this is where the double
low seven reference comes from. They've got a really interesting
new lineup of vehicles, but they're short on V twelves
and notwithstanding the world of evs and all that sort
(13:15):
of stuff, the high end V twelves from Ferrari and
Lamborghini are hot. And you look at the inventory levels
of Aston Martin on the lots, they're too high. We
think that there's a capital infusion that's likely needed in
coming months, and so we actually have a cautious view
on Aston Martin from that perspective.
Speaker 3 (13:37):
Tim, you are always putting out super interesting stuff. I mean,
we had fifty companies to watch in January and then
we have the quarterly update in April, and then of
course now this story that's out loving the graphics here.
How long did it take to put us together?
Speaker 5 (13:51):
Well, it's an ongoing process of working with our analysts
in terms of where do we see these ideas come
from and then you know, our friends in BusinessWeek like
to pull together the graphics on these things. It is
a It is a good looking piece on the UH on, Bloomberg,
dot Com.
Speaker 2 (14:13):
Booze, Dago. What's the story there.
Speaker 5 (14:16):
Yeah, the Agio it ties in a little bit with
a couple of ideas here. You know, I mentioned Aston Martin.
That's obviously a high end consumer idea. And even though
we're consumed concerned about Aston Martin specifically, the high end
luxury vehicle market is good. Similarly with the Agio, high end,
high end, Booze high end spirits. They are the world's
(14:38):
largest spirits manufacturer, is doing relatively well. You know, their
recent sales trends have been robust. We think that's going
to continue to show through. There has been concern about
things like tariffs and what could be the impact, especially
from a US consumer base. We're less concerned and we're optimistic.
(15:00):
Another consumer, higher end idea you guys know and love
in the States is Dick Sporting Goods. You know, this
is a classic good old consumer's growth story where not
only do you know the store, but you might have
been in one of their new, bigger formats where they
have you know that much more kit. Their sales trends
(15:24):
continue to be quite good, despite concerns about what are
tear's going to mean for consumer here or there? So
you know those are all those are all consumer ideas.
There's certainly a common thread there.
Speaker 3 (15:36):
You mentioned Dick said, I'm looking at easy Jet, which
of course we know is a low cost British airline,
and we have a sunny outlook here. But what do
you think will be the most surprising call here for readers.
Speaker 5 (15:48):
Yeah, it's interesting in this instance. Obviously this is not
the high end consumer, this is everyday consumer. Is that
this isn't so much about the demand, which actually demand
for travel and experience continues to be pretty good. This
is more of a story on an operational basis. They're
replacing a lot of older planes with newer planes that
(16:13):
have bigger capacity and much more fuel efficient, so this
is a margin story. Easy Jet has historically lagged behind
Ryan Air at the other low cost carrier here in Europe.
We think that that's set to change.
Speaker 2 (16:27):
Tim you live and work in London, but as most
of our listeners can tell, you're not an Englishman. You're
from the Great Commonwealth of Virginia. Talk to us. Are
the tourists Is it as crazy in London this year
as it's been in recent years. What's the tourism factor
they're in London you state.
Speaker 5 (16:44):
The quick answer is yes, notwithstanding the fact that the
pound is actually pretty robust. Of late, streets are busy,
and you know it's true, it's true in the city
walk out the door here Tuesday, Wednesday, Thursday or the
New Friday has been a warm summer. But you know,
(17:07):
this is also the time for Wimbledon, and beyond that,
it's just been it's just been busy with people coming
from all over the world, whether it's China, whether it's
the US. This seems to be a hot ticket. So yeah,
it still feels pretty good.
Speaker 2 (17:23):
Yeah, I'm trying to get, you know, Audrey child Friedman,
to get the euro back to parody because I'm coming
over to Europe in the fall little vacation, little holiday.
But I mean you mentioned the pounds sterling, but the
by the euro one seventeen that gets your attention.
Speaker 5 (17:39):
Yeah, it does well. And you know, I guess from
from our perspective, and primarily Audrey's perspective, this is a
this is a week dollar story as opposed to stronger
other currency story, and we think that there's more legs
to this. You know. One of the big themes that
(18:02):
comes up on all the investor discussions or events that
I'm at is that is the long standing premise of
American exceptionalism. You pop money in US bonds, US stocks
and they take off. You know, is that holding valuations
a lot more interesting elsewhere?
Speaker 2 (18:19):
All right? Tim, great stuff has always Tim Crackett, Chief
Content Officer, Bloomberg Intelligence.
Speaker 1 (18:25):
You're listening to the Bloomberg Intelligence Podcast. Catch us live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 3 (18:39):
Welcome back to Bloomberg Intelligence Radio. I'm Normalanda here with
Paul Sweeney, and it is Wednesday morning. We're seeing stocks
that are higher right now. We've got consumer communication services
and consumer discretionary as some of the best performing sectors
in the S and P five pund you right now.
Lots to keep an eye on today, But we want
to talk to Jennifer Ree. She is Bloomberg Intelligence Senior
(19:01):
litigation analyst. And we're going to be chatting a little
bit about the US antitrust environment and what the second
half of this year looks like. I mean, Jennifer, the
anti trust environment was pretty aggressive under the Biden administration.
We were seeing a lot of those larger companies getting
caught in the crosshairs. Here, can you set up for
us what it looks like right now one of a
new administration?
Speaker 7 (19:22):
You know, that's right, Nora. It was a really tough
four years, particularly for deal makers, and I think there
was a lot of uncertainty going into the election during
the fourth quarter of last year. But I think there
are some really good signs for those companies that want
to engage in big deals going forward. And the main
reason is because Trump's anti trust enforcers are willing to
accept settlements with a remedy to allow a bigger deal
(19:45):
to close, essentially meaning that if there's an overlapping product
and there'd be too much concentration in the market for
that product, that product line could be sold and the
larger deal can get closed. And the Buying administration essentially
refused to do that. They thought if a deal was problematic,
we're just going to sue it. And try to block it,
and it led to a lot of lawsuits, a lot
of abandonments, and a lot of deals that just didn't
(20:05):
get signed to begin with. So because we're seeing this
sign that deals can get settled, I do think we're
going to start to see more bigger deals getting signed
up in the second half and probably next year two.
Speaker 2 (20:16):
So, you know, for all these agencies within Washington, they
obviously feel the presence of President Trump very keenly. The
folks that are in charge of the Federal Trade Commission,
the Department of Justice, how much independence do you think
they have at this.
Speaker 7 (20:34):
Point, you know, Paul, probably not very much. You know,
in the past, in particular, the Federal Trade Commission was
supposed to be quite independent, and really it was because
it had five commissioners, only three of which could be
from one political party, and they needed a majority vote
to take any action with a deal. But President Trump
has fired the two Democrats, so we now have three Republicans,
(20:56):
and we have three Republicans that very much are behind
him and his political visions. So I think that they
will essentially do what they think he wants done. And
we have seen an example of that because they did
clear a deal between two huge ad agencies, OmniComm and
Interpublic with what we call a behavioral agreement, which they
(21:16):
have said that they don't tend to want to take,
agreeing that they wouldn't prevent advertisers from advertising next to
content that was right leaning or expressed conservative viewpoints that
they might not agree with. So that was very much
kind of in lined with this administration and what this
administration wants. So I do think we're going to see
alignment in terms of what these remedies are and the
(21:39):
deals that get cleared with what Trump is saying and
with what Trump wants.
Speaker 3 (21:45):
So Trump terminated two Democratic FTC commissioners back in the
first quarter of this year, and of course we know
this did raise some significant constitutional concerns in terms of
the commission's historical independence and of course enforcement effort. What
is this really signaled in terms of potential policy changes.
Speaker 7 (22:06):
Well, you know the thing is that, first of all,
we do all of these challenges are going up to
the Supreme Court, and we do think that this is
going to stick. We do think that because of some
of the other decisions about other agencies that even though
the two Democrats do have an ongoing lawsuit about their termination.
We think that probably the Supreme Court is going to
side with Trump and they are going to remain terminated.
(22:27):
For practical purposes, as I said, I don't think that
there's very much impact here because you do need a
majority vote to settle or to suit a block a deal,
so you need three out of the five. In the past,
we have seen that the FTCs operated on a very
sort of bipartisan or nonpartisan basis. We usually have a
unanimous or maybe a four to one decision, but it hasn't.
Speaker 2 (22:48):
Been that way.
Speaker 7 (22:49):
You know, starting with Biden, we were seeing a lot
of three to two decisions where along party lines, right,
So I think that we probably would have continued to
see that even if the two Democrats were still there,
you'd have the three Republicans. You'd probably get your three
to two vote to do whatever it was that the
Republican tengent wanted. So from a practical standpoint, it's not
going to have that much impact on the decision making
(23:12):
for deals of this FTC.
Speaker 2 (23:13):
Are there any deals that are currently being held up
or being scrutinized that maybe the participants are saying, oh boy,
now we're going to really sail through, and we thought
maybe on our Biden it could be a tough slide
or anything we should keep an eye on.
Speaker 7 (23:26):
You know, Paul, The one I'm really interested in is
the Google Whiz deal. And I say that because we
know this administration is no friend to big tech, and
we know that they're staying really aggressive on the monopolistic
conduct side, where Google and Apple and Amazon and Facebook
have all been sued for monopolistic conduct. And to me,
that deals very interesting because just from an anti trust perspective,
(23:47):
I don't really think it poses anti trust concerns. You
know that the concern would be that you have a
cloud company that's marrying with a cloud security company and
they could foreclose rivals. But I think that there's ample
competition on both sides, on the cloud side and the
cloud security side, that you probably don't have a very
strong theory of harm. But we know that this administration
doesn't necessarily love Google. I'm going to be interested to
(24:10):
see what happens there, but I suspect we're not going
to learn in the second half. It's probably going to
push into the beginning of next year.
Speaker 2 (24:16):
All right, Jen, thanks so much for joining us a
general senior litigation analysts for Bloomberg Intelligence. He's got the
deep dive kind of looking at the whole antitrust world
under President Trump. You can find out on the Bloomberg
turmol It's great read, detailed, long report with a lot
of good stuff in there.
Speaker 1 (24:32):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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