Meta Veteran Steps Into COO Role (Podcast)

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. There is a new top lieutenant in town at MET I don't know if you've noticed. Uh. We got to find out who it is and what it means for the company. This is a story by Bloomberg News Technology Report of Kurt Wagner writing about it for Bloomberg Business Week, which is online oft Bloomberg dot

com slash business Week also on the Bloomberg terminal. So let's get the story from Bloomberg News Big Tech team leader Sarah Fryar. She joins us on the phone in San Francisco. Sarah, by the way, author of No Filter, the inside story of Instagram. It's a great story for a summer read. All right, Sarah, So, who is the snow top lieutenant that we need to know about? He is the most important person at Facebook. You've never heard

of um if you've heard of him at all. Actually, it might be from the documents that came out of congressional investigations or perhaps the Data league by Francis Hougan, the whistleblower, the Facebook whistle blower. And that's because HEAVIERA Levan. He's He's been involved in everything, every every big strategic move.

He was the head of growth, so all of the big acquisition UM that mattered, the What's App acquisition, for the Onavo acquisition, which is another very important acquisition that UM allowed Facebook to track how competitors apps were being used by people on their mobile phones, like a really good tool for crushing the competition. All of that has come to light in the antitrust hearings. How do your

early wanted? Essentially Mark Zuckerberg's favorite fixer of big problems, and the biggest problem that always seems to matter to Zuckerberg's the most is growth and UM. So now he needs to come on as as Kurtwright and fix the business as poo, the role vacated by Cheryl famber So as Mark Zuckerberg's favorite fixer. What do you think is number one in his priority list to fix right now?

It's it's really about the business model. Looks. Meta had its first quarter of revenue decline ever as a public company in this most recent quarter, and they have to figure out how to get the advertising business back on

track UM. But they also have to figure out how to make money off of this this pie in the sky vision for the metaverse UM, which may or may not happen, But it's where Zuckerberg pointing a lot of the talent at Facebook, a lot of investment a Facebook, he really needs the metaverse to work because that's the future, the platform that um Mr Olivan works so hard to build too incredible prominence around the world. Now it has more than the world more than half of the world's

Internet connection population. There's really just not that much further to grow. And it's not like Facebook can buy it's way to more growth because of all the antitrust pressure. So that's why they have to build out the metaverse, and they have not figured out how they're going to make money off of it. They haven't figured out how they're going to get people to want to use it,

So there's there's a lot of big questions looming for Meta. Meanwhile, the stock has has lost more than half its value UM and it's a it's just a critical time for the company. So, Sarah, can we equate him to someone else at either part over either at Microsoft or at Google, like you know, or even Apple. I feel like we didn't really know a ton about Tim Cook, you know, for a long and all of a sudden, you know, he's obviously been very key to what's been going on

in the company as the CEO. Now, but I mean, is there somebody else's to look on valid that we can liken this This guy too, I think maybe maybe the most similar to and I say that only because he's very much a data guy. He grew up in in Facebook's engineering culture, and a lot of the decisions that he has UM that he has put into motion have come from understanding how UM people are using Facebook products and using competitors products, and how they should adjust

their behavior UM to to fit to that. And another reason that I'd compare him to soundar is just because of his international background UM as a person from from Spain, he who speaks many languages, by the way, not just Spanish. UM. He has a sense of how people use Facebook products or don't use them for that matter, around the rest

of the world. And he's really been key at pushing the company into UM broader thinking about about how to build UM you know, in places with load data UM where people have to to purchase their their data unlike in the US UM by by the minute or by

the bid. So so I think that he UM he has pushed things like what's that in part because of his personal experience talking to family internationally, understanding how people UM you know live in non Facebook centric worlds and sir, like you already said, we don't know much, we don't We don't see him a lot Olivan and in the story uh Kurt writes that Olivan rarely speaks publicly or post to Facebook or Instagram, but he's had a hand

in all of Facebook's major competitive battles and acquisitions. What has been his biggest stamp on the company thus far? People always ask me, like, you know, they don't think that facebooks are very innovative company, Like, what is Facebook actually built? Like they they bought Instagram, they bought WhatsApp, they copy snatch at the copy TikTok, TikTok. What are they actually built? And my answer is their growth strategy. That is the thing that has been innovative about Facebook,

this grow at all cost strategy. That that really Javier Levan is the is the brainchild behind like he's He's the person who pushed a lot of this UM aggressive UM methods for making sure that people join Facebook UM and and joined Facebook is an alternative to competitors and make sure that if anything's ever broken in the app that prevents people from staying there or spending more time there,

that they fix it quickly. UM and all of that mechanisms of push notifications and UM getting people to to really become so attached to these products. All those little moves add up and they all come from this growth team that he led for so long. But on his agenda is growth, Right, he doesn't have to deal with maybe the Washington stuff, the policy stuff. It's all about making sure this company grows. Just got about twenty five seconds left, right, and that's been the problem too. Right.

He has built this company to the to the point where it has these incredible blind spots because of its size and maybe didn't think about those things while growing. Yeah, it's a really it's a really good point. Hey, Sarah, thank you so much. Sarah Fryer, she's big tech team leader at Bloomberg News. Check out our book No Filter,

The inside story of Instagram. This story written by Bloomberg News technology reporter Kurt Wagner from Bloomberg Business Week, which you can find online on the Bloomberg terminal, so be sure to check it out. You're listening to Bloomberg Business Week with Carol Masher and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well on the Bloomberg Today is a story about how Ether is surgery and anticipation of a groundbreaking software upgrade to its blockchain. This is something you've

been following, right, like all that's going on? Yeah, yeah, it's interesting. So Ether, Uh, it's the Ethereum blockchain is the second most popular blockchain, second of course to Bitcoin, and the token attached to the etherium blockchain. Ether has absolutely been on fire since about mid June because everyone's waiting for the merge. The long awaited merge basically moving from proof of work mining, which is very, very energy intensive.

You've heard a lot of that criticism centered around Bitcoin moving from proof of work to a proof of steak, which would require a lot less energy. Okay, so this is a big deal. Bottom. It's a big deal to Katie because she understands this stuff all right. So in our weekly crypto segment, Natalie Brunel is a journalist, podcaster, adjunct Professor of Advanced Communication and Visual Storytelling at the University of Southern California Annenburg School for Communication in Journalism.

She joins Katie and myself on the phone from San Diego. Is also host of Hard Money. So Natalie, good to have you here with Katie and myself. UM, talk to us a little bit about you know, Katie was talking about ether and Ethereum. We follow the crypto markets on a regular basis. Um, what's top of mind for you? Hi? Well,

thank you so much for having me. Top of mind always for me is a bitcoin and making sure I can educate as many people as I can about the power of this rising computer network and and the savings technology potential in a world where you can look at you know, consumer spending and saving. Spending is in an all time high when it comes to credit and saving

is at an all time low. And we really need a form of money that can't be manipulated, It can't be inflated the way that our current monetary system works. And so I'm very passionate about bitcoin, and so i've been I've been happy about the recent rally, you know, it's shot up about in July, but I still think that there's going to be more choppinus volatility and pain ahead as the said tries to aggressively, you know, hike,

race and fight and inflation. So I I don't see if reaching our all time highs any anytime soon, but I do think it's the best long term bet that we have out there. Why do you think that? Because, I mean, I really enjoy following the crypto markets. I speak to a lot of people within the crypto industry, but I feel like bitcoin is kind of lost its narrative in terms of it being of inflation, hedge being a store of value. I'm wondering what you see is

very exciting about this moment. Yeah, So two things I'll say about that, As far as the inflation hedge, you really have to step back and think about the time frame you're examining bitcoin from, because over the last ten years is outperformed every stock index with outperformed precious metals gold, um and so and and really outperformed real estate as well. So it's pretty much been the best performing asset as

it grows in adoption and awareness. So in the short time frame when when everything's falling, we have major stocks falling, industries, falling, real estate. Now finally to drawing, all right, I've got to jump in because stocks have actually bounced back. And I think many would say, including a lot of people you know, within the crypto industry, that we are so early in on this that it's like the very very early days of the Internet. So I feel like Internet,

excuse me. So I feel like, well, we talk about, you know, investors getting involved in this, we have to be cautious. That's why we recommend something called dollar cost averaging, Right, we don't want people to sit there and risk their entire life savings on something that they're not familiar with.

Bitcoin requires a lot of study and it's difficult to explain it in a sound bite, but what it's trying to ultimately fix is what is broken in the monetary system, this manipulation of money that leads to capital being allocated really to the people at the top at the expense of everybody else. The money printing, that the fact that we are so far in debt and we have nothing, We have no alternative other than bitcoin that can solve

a lot of these issues. So if you think that there's even a one to five percent chance that bitcoin could, um you know, become an asset that overtakes, say a potentillion dollar market cap like gold or even more, then it's something that you might think about allocating one to five percent of your portfolio to. Um you know that this isn't something would like to like that, Natalie, we

don't have much time left. So I want to jump in and ask why bitcoin, Because if we further this internet sort of tech boom of the early two thousand's metaphor, there was Amazon and there was pets dot com. So why bitcoin when you look across the entire landscape of all the different coins and tokens out there. Sure so bitcoin is the decentralized, secure and scalable blockchain, whereas things that you mentioned Amazon, tech dot com ultimately those are

centralized forces. Bitcoin is like the Internet. It's a protocol. It's in the same way. I believe it's going to be as revolutionary in terms of freedom and the ability to gain prosperity as the Internet was. Um you can send value from one part of the world to another, it settles almost instantly with no third party, and it gives access to eight billion people to have a form

of digital property wha for example. Well, so there are a lot of questions that remain as far as the long term consensus model in terms of how how are these tokens going to be released, what is going to be the supply, what are the rules surrounding that? There

are so many unanswered questions. Whereas Bitcoin has been proven for the last thirteen years to be a decentralized and secure network that is secured by energy um the difficulty adjustment that the brilliancy of the programming that's to Toshi invented. It has never been hacked, and it is the one form of I would say, you know, hard money that comes in a digital format that people can start to

allocate their savings to and watch it grow over time. Right, Well, I feel like this is a conversation will continue to have, certainly for a long time. Natalie Brunell, thank you so much. A Jack professor over at University of Southern California, host of Hard Money. I'm rolling journal. Yeah, but you let me drive? No, no, all right, please, I'll do gravels. I want to try. It's the question drive in the

ride to the Clobell on Bluebird Radio. All right, everybody, just about ten and a half minutes left in today's trading session. We are getting ready to wrap up the trading day and the trading week. A lot of news coming out of certainly Washington. Conton continue to track the unceiling or it looks like the release of that warrant that led to the search, the FBI search of former President Donald Trump's home, so we'll continue to track that. In the meantime, the markets, we've really seen a risk

trade on. So great to have back with us once again. Doug ram mc chief investment officer of the Luther Group. His core investment found up about four percent in the past month, nearly six percent on average annually over the past five years. He's based in Minneapolis, and he joins us on the phone from there. Doug good to have you here with us. I do want to talk markets, that's your world. But I gotta ask you all this news um regarding the FBI search former President Donald's home

in Florida, Uh, the investigations. How how does political news are the upcoming midterms factor into your thinking about investment strategy if at all? Uh? Well, from time to time, UH, political developments can influence our analysis. And I think, uh to use the president in question, I mean the Trump bump back in the fall of upon his election was incredible. Uh. Just I mean the bounce in business confidence associated with I think more so UH pro business rhetoric maybe in

some cases than policy. It was enormous. As I recall, the Russell two thousand was up about two in a month following that election, and it really did usher in sort of a new uh phase of you know, what had been a pretty slow economic expansion. So that's you know, one very clear example in my career that I can

think of. But something like this is just a little bit more noisy now in terms of uh, the mid term year, there there is a very strong historical tendency for mid term years to be difficult, and this year has been no exception, and especially like the middle the middle six months of a mid term year have been host to just I mean a statistically out of line

number of major market lows. UM. Now the good news is and again, and this is a pattern I've seen throughout my career, began right around that mid term election time in early November. You flip from a very negative historical pattern to a very positive one. So who knows, you know, maybe markets get smarter over time, and maybe they're anticipating that strong seasonal pattern that's due to arrive

later this year. We'll tell us a little bit about that strong seasonal pattern because as you know, probably better than most, it's been a pretty rocky vaultl year so far for the SP five and most financial asset classes. Uh, it has been and I think, uh, you know, the Fed policy turn along with maybe the fiscal policy turn that's been unappreciated, uh, to swing from I think, you know what, the extreme and we had a deficit that was close to g d P and uh it's now

down to a little over four percent. So the dull to not just in monetary policy, but in fiscal policy this year is enormous. And you know, I am impressed with the way that you know, after sliding through the first five months of the year, Uh, we've had this impressive bounce back. Now that being said, I mean, if we close where we are, well, it's only five minutes, so I bet pretty uh heavily on that we'll be

up about sixteen and a half percent. Here the average bear market rally of any bear market that's had one, not all bear markets even have a bear market rally, but the average bear market rally more than ten percent has been fifteen and a half percent unfolding in forty trading days. Well, this one is about sixteen and a half percent in thirty nine trade days, so you're right

on the average. So so well, I don't know, this one's been very impressive, and you know, we are certainly one to look at what the charts are doing, and I think, uh, today's close. You know, it'll go while to get these numbers, but I think we look at uh two or three, Well, let's surrounded up to three breadthrust measures that we've done a lot of work on

and have come to trust. I think at least one of those is going to trigger with today's action, which is provocative because um, these signals are almost never seen, uh during an ongoing bear market. So in terms of magnitude, um, you know, we've seen these bear market rallies of this size and length before, but in terms of its internal strength, um, this one is is standing out. So bear market rally, no new boat market or or continuation with the pandemic

being a major blip. Well, we are Look, we've I mean, because we run longs and shorts in our tactical fund um we have I mean our net equity exposure. We've let it right up alongside uh, this rally. I mean that being said, we're still pretty defensive at net equity exposure, but it's been powerful enough that we've decided just to let it ride. And I'm still not inclined, even though I do think ultimately this is a cyclical bear market

that's got further room to run. Um. You know, maybe we'll hold off on trimming in equity exposure yet for a few more weeks, just given the power of this thing. And it really gets back to the likelihood that policy remains tight even with inflation very likely to have peaked. Well, Doug, take this a little bit cross asset for us and wrap in the yield curve, which, of course the twos tends yield curve deeply inverted. At this point we only

have about forty seconds. But what is the signal there? Uh, it's an early pre recession signal. What we've found in terms of economic forecast team is that using a shorter term yield uh, like the three months rather than the two year, and comparing that to the tenure that spread the tenure minus three months is a much better economic forecaster. So we haven't seen that invert yet. It's gotten close, but to us that's really when the recession countdown would begin.

Um and then there's usually a lag time between that inversion in the ten versus three months and the actual recession. So this could be an opportunity for someone who's very fleet footed and uh maybe has more risk tolerance than we do on our core fund to chase this world for a while. But again that's not my recommendations. All right, we gotta run. Hey listen, Doug, have a great weekend. Doug Ramsey, chief investment Officer of the Loophole Group. Thanks

for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud or Bloomberg Dot com and you can also listen to our radio show at two pm Eastern on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News m