The Energy Future Needs Cleaner Batteries

You can also listen to our radio show at two pm Eastern Time on the Bloomberg Radio or watch us on YouTube search Bloomberg Global News. It's the Sooner than you think issue of Bloomberg Business Week magazine, showcasing technology, really actionable insight into the near future, business in the market forces and tech innovations that really are already transforming our global economy. There is a themed him amongst some of the stories about scarcity, scarcity, excuse me, and that

includes the domestic cover story about the Goblin in the batteries. Yeah, scarcity of broadband, scarcity of water, and scarcity of cobal that we need for batteries. We're talking cobald now. Joe Weber is editor of Bloomberg Business Week. He's with us an the Blue Brick Interactive Broker Studio, and Drake Bennett is technology reporter at Bloomberg Business which he joins us

on the phone from New York City. Joel, I, I was not thinking about cobalt when I plug my phone in yesterday, when I plugged my phone in yesterday, But I certainly and yet that phone cobalt helps make it run. UM. And you know, this is our domestic cover story for the Sooners. And you think issue and I think one of the things that we were resting with and you know, as consumers, we actually wrestle with this all the time, and we're gonna wrestle with it a whole lot more

in the years to come. UM. But ultimately, like charging right in batteries, and you think about your phone and and what makes that go, it's um, you know, it's batteries. Uh. And as we look at this energy transition where we're gonna see millions more electric vehicles on the roads around the world, there's a question about how the those batteries are actually gonna gonna run uh. And cobalt is really the secret ingredient UM. And so Drake's done the story.

It is sort of magical because of these two narratives that it brings together. It's really the search for a better battery. On one hand, that might come from the ground and we need more cobalt, but it also could come from the lab and might not involve any cobalt. So so Drake, why don't you break that down for us? Yeah, no, thanks, Joel Um, Yeah exactly. I mean, I think we think

about batteries as technologies, and they are technologies. I mean, they're closer to being like a microchip than they are to being like the commodity like oil. So it makes sense that you see these dramatic drops in price and these increases in energy density and things like that. But they're very dependent on the particular chemical characteristics of particular elements,

and UM one of those is cobalt. Cobalt is particularly good as a as a cathode materials, sort of making the sort of foundation of one of the electrodes of the battery. Uh. And there are you know, most of the world. Uh. Cobalt happens to be found under UM, the democratic called Congo, which is uh, you know, unstable country, UM,

very poor working conditions in the minds. Chinese companies own a lot of the minds there, and so there's you know, incentive right there to try to diversify our supply UM. But on top of that, you know, if we are going to meaningfully make it dent and you know, if there's one point to billion internal combustion cars on the road today, if we're gonna switch some meaningful proportion of those to being electric vehicles, we're gonna need many times

more cobalt than what we currently know about UM. So, right, so there's two approaches that I look at. One is finding more so. There's a tech company UM based in Silicon Valley. It's it's these physicists and data scientists who are convinced that they can use the tools of data science UM, these powerful artificial intelligence algorithms to find deposits where traditional energy companies and traditional exploration geologists have failed.

I did. I spent a lot of time talking to these guys, and then as it happened, they were just beginning to go see if they're right. So they were One of their exploration claim blocks is in the art in the Canadian ARCT dick way up at this very tip of Quebec, and I went up there and spent some time flying around in a helicopter with one of the geologists as he went to these spots that this AI was saying looked promising and examine the rock yet

kind of primitive actually seeing what he did. He had this sledge hammer and he just break off these rocks and then get up this kind of jeweler's loop and look at them. And you know, um, yeah, very I mean, you did have a you did have a you know, Samsung tablet that he was entering stuff into. But it is this mix of this kind of very traditional geology and this these these tools that rely on enormous amounts

of computing power and advanced data science. So after after reporting out this story, Drake, are your sources optimistic that there is a solution out there? Because I think about something like this in the transition to electric vehicles, and I don't think that consumers understand that this isn't black and white, right. These batteries take serious natural resources, and even to charge at this point takes fossil fuels in

many cases. Yeah, I mean, I think you know, the other sort of the other sort of side of the coin that I wrote about was was a chemist who's basically trying to design batteries that don't need cobalt at all. So then it doesn't matter that it's all under the congo and that we don't know where we're going to get it um And I think, you know, there's ways in which these two approaches are intention but in many

ways they're complementary. And so I think, and there's you know, plenty of other folks who are looking at recycling or you know, improving the kind of processing of these ores so that you can use more marginal deposits. And so there's a bunch of approaches and I think you put those together and you you know, you are probably gonna

make a meaningful dent in this problem. I mean, having seen both sides of maybe how this plays out, what's what's your conclusion about what ultimately will happen in terms of batteries no cobalt or well, we'll find more. I think I think we will. I think both people find more, and I think you know they're they're there. They're interesting. You know examples from history, you know, oil and gas. Right, there was this idea that we had reached peak oil

forty years ago, and you know that didn't happen. But at the same time, you are already seeing the process where the amount of cobalt being used in these batteries is getting lower and lower and lower. So you know, whether or not it goes to zero, it's still gone from basically in the first with my own batteries to you know, in in some of the things being built now, and I think right to like, you know, we're talking about changes that are gonna play out over years um.

Even even for you know, best case scenario, this place that Drake visited, you know that if that became an operational mind, you know, it could take a decade before anything from that ground ends up actually powering a car. You know, so massive infrastructure we're talking about that goes into some of these projects. So it's a little bit

of everything. I think it's an incredible story and you really, you know, get into the nitty gritty of what's going on and something that I think we take for granted safe to say, well, and I think there's this misconception that I was alluding to earlier that it was immediately a green solution for someone to go buy an electric car. But when it comes to the production of it, when it comes to the battery, when it comes to charging,

it's it's not that simple, great issue. Joll Well, there's much more in there, and I think one of the through lines is looking at resources and in this case it's a battery. But um, you know there's this water one that I think is also really interesting. And you know, look, a lot of these problems are are things that humans create and now we can try and solve them. And boy, I hope we're good at innovation. Still fingers crossed, everything's crossed.

I mean, you still can't believe they are hundred twenty million Americans who don't have masters to broadband, which is another story. We talked about that one yesterday on the show All That in our weekend Bloomberg Business Week show that you can catch on Bloomberg Radio at eight a m. And, of course, check out the magazine. It is on newstands, check out Bloomberg dot com, business Week dot com, and the Bloomberg terminal. Our thanks to Drake Bennett and Business

Week editor Joel Weber. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick takes Tim Stinnovy on Bloomberg Radio. Are you are listening to Bloomberg Business Week several headlines when it comes certainly to COVID and the vaccines and boosters. In fact, we are awaiting some news from the CDCs Advisory Committee on Immunization Practice making its own recommendations about who should receive additional doses.

We know FISER getting a step forward, the FDA saying people over the age of sixty five and adults at high risk of severe COVID nineteen who already got that viser by in tech vaccine can get a booster shot. But there's a lot of information that still has to happen. Yeah, there is a lot of concern about Okay, are we to a point where we need to be encouraging boosters when there are so many holdouts for just getting that first shot exactly. So let's see what Dr Andy Pekosh

has to say. He's Professor of Molecular microbiology and Immunology at Johns Hopkins University Bloomberg School of Public Health. Of course, that school is supported by Michael R. Bloomberg, founder, Bloomberg ELP, and Bloomberg Philanthropies. Dr Pekosh back with us on the phone from Baltimore. Dr Pekosh, how are you, Oh, I'm doing great. Thanks for having me on the show. Always good to check in with you. Where are you on boosters?

At this point, It's important to note that the boosters are going to be designed just to help the very susceptible parts of the population increased our immune needing, to keep them out of the hospital or suffering from severe disease um. We heard that from the FDA last week. I've been listening in on the CDC and that's really an ongoing theme. So boosters are going to be for to keep people out of the hospital, and for a short term, they'll be focused on individuals who got the

Visor vaccine initially. But don't be surprised if you hear similar things coming from Maderna and for Johnson and Johnson in the next coming weeks, because those companies are just a few weeks behind Visor in terms of submitting their

paperwork to the FDA and the CDC. Dr Pekosh, where do you think we are as a country when it comes to the delta variant and the most recent wave that we've seen, Because there is some chatter, especially in recent days that that has indicated that some people who are doing modeling are saying the worst could be behind us. I think we've we've seen Delta make its first sweep through the population did in the summer, and at times when you know the virus isn't supposed to be spreading

as easily. So the only caveat that I have to this is, you know, we really have to see how things are going to work out now as kids are back in school, as more people are back in the workplace, as we're moving indoors into environments that's easier for the virus to spread. My one pushback, I would have to that and correct me if I'm wrong. But didn't it spread in places that we're really warm, where people would

be gathering inside anyway? Absolutely, and that's why I worry that when we get into even better conditions for the virus that the spread may kick up a little bit. I'm certainly optimistic right now. I do think the worst

is behind us with Delta. I think we're seeing the vaccines are holding their own against Delta, and so I'm confident that we'll have um not as bad a fall as we have seen in the summer, so worse behind us, But it doesn't mean that it doesn't continue to remind us that we're still in a pandemic, that we still

have to be careful. And this is where the boosters shouldn't distract us from the real goal of reducing cases by vaccinating the unvaccinated, because that's where we're going to really be be able to turn the corner on this pandemic. We need to get more people vaccinated because that's going to reduce virus spread, that's going to reduce case numbers.

It's gonna let us get rid of some of these public health and adventures that we have to have right now, because even though we've got vaccinated people, the virus is spreading so broadly and so strongly in the population that we need more than just the vaccines to protect us. What what is the best way to get those people who even up to now, when vaccines have been available for months and the incentives have been there and now we're seeing mandates, how do you get those holdouts to

get vaccinated? Yeah, I really feel that, Um, there's a good portion of the population that just here's all the rhetoric and really is just a little confused and a little bit taken aback and is not sure which way to go because, UM, the misinformation can be just as loud as the positive information. So it really comes down to communication and redoubling our efforts and the efforts of public health officials to make those more personal connections, those

small group connections. UM. I've had a lot of success talking to people in groups of two or three here at Johns Hopkins University, UH, talking to small groups in webinars UM that we advertise over Twitter. UM, making those kind of conversations so that individuals can really have that one on one with you and understand the sincerity in which you're passing along this really fantastic information about how

safe and efficacious these vaccines are. It's hard work and getting the right information is so crucial to getting us through this, uh in the right way. Hey, having said that, I've got a little bit of a were left arm, Tim, I think maybe had a sore arm a couple of weeks ago we got our flu shots. What do we need to keep uh in mind when it comes to, you know, the normal flu season, which kind of didn't really happen during the pandemic because we were all sheltering

in place. Yeah, I think this year we're really keeping our eye on influenza UM. The public health interventions really did a great job of limiting viruses like influenza, even common cold viruses UM for kids, of virus called RSV or respiratory and cecial virus. They all those viruses were really reduced during the pandemic UM. Now we're seeing some these public health interventions relaxed, and we've already seen a really big increase in rhinovirus is the common cold virus.

We're seeing a large increase in respiratories and cecial virus and kids, and those two things usually mean that we'll see influenza over the next couple of weeks. So the vaccine is important to get this year more than ever because we've gone some period of time without seeing a lot of influenzas. There's a lot of susceptibility in the population because we haven't had infections UM coming through the population. And in particular this is important for younger populations because

they're the most vulnerable. They haven't seen influenza, many of them haven't gotten a lot of influenza vaccines, and it's that population that we really want to pay attention to during the next couple of weeks. Get your flu shots exactly. No, no, not at all. Dr Anye Andy Pekos, thank you so much, Professor of Molecular Microbiology and Immunology at Johns Hopkins University, Bloomberg School of Public Health. Supported by Michael R. Bloomberg,

Founder of Bloomberg Alp and Bloomberg Philanthropies. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. We're gonna zero in on a Walt Disney company. It's been Tim actually in the news a lot this week, the stock moving as a results, and times down sometimes up, writing about the company in a Bloomberg Opinion pieces, our own Tim O'Brien's senior columnist of Bloomberg Opinion, right next to us in our interactive brokers.

So it is so good to be with you, so good to be here. So tell us about Disney, because they've been in the news a lot, bofeck talking a bunch this week. Well, Disney is wrestling with a lot of stuff at theme parks and the entertainment industry. But what I zoomed in on was it's it's increasingly close embrace with sports betting. Uh, you know Disney is the most wit what sports betting? That's right? And this is a family centric company. Um, you know, sports betting has

been booming. The Supreme Court in eighteen basically broke up Nevada's monopoly on sports betting. They've knocked down federal laws that prevented other states from adopting it. And you wed that to the Internet era where everyone can gamble on their phones or through their televisions and their living rooms, and it is ubiquitous. It's growing. A lot of the pure play sports betting companies have seen their market caps explode from two billion to twenty four billion over a

two year period. And younger men do it, and Disney wants to connect to those people. And what other property does Disney have that younger men and younger women too? But it's still it tilts towards mail. It's ESPN, the powerhouse sports network, and now ESPN is forming. It already has partnerships with companies that provide the odds. If you turn into any ESPN broadcast, you now see what once was a nomalous sports betting lines on your TV screen.

But now Disney's pondering possibly licensing deals where there would actually be bookmaking shops that have the ESPN brand. It feels so like und right, I mean, how does the company wrestle with this? This is a called the family values focused company. We talked about casinos. These are you know, sin stocks that are in the same bucket as tobacco companies in some cases well track betting right, and the image of that conjurus right, you know, historically Bob Iger

sold with this. Now, Bob Jpeck is what they have said is we would never fully bring sports gambling inside the ESPN model, meaning I guess uh that you you couldn't you know, pull, you couldn't gamble directly through any ESPN properties. But they're offering then to sort of have outside companies handle the gambling and having and the bet and they'll just take a licensing fee and both of them. You know. Bob set a version of that a couple

of years ago. Bob Jpek, who succeeded him, just this week at a Goldman conference, said we would never embed gambling in our products, but our audience likes it, our users like it and frankly, you know, cable TV, it's praying around the edges. Streaming is where it's at, and and sports gambling is a hook and do a younger audience. You could so see it though, because of ESPN and all their coverage, that it would be so easy to embed it in right if you think about it. UM,

tell us about Adam Schefter. Adam Scheckter, I'm sorry, Adam Schefter is an ax. You know he is. He is one of the He is the senior NFL insider on ESPN. His stock and trade is breaking all sorts of news and minutia and and gossipy news you can use about trades and injuries and starting lineups, the kind of stuff that sportsman fanatics really feast upon. He's got a massive Twitter following eight point two million followers. Um. He also is now investing alongside Bob Kraft, the owner of the

New England Patriot, in a little gambling startup. And well, you know, I called up ESPN and I said, do you folks have an ethics policy or guidelines about how your employees invest outside the company? And they said, we won't comment on that. Uh as to whether they had a policy or whether Schefter violated because the issue hears if you see him speaking on screen going forward, is he talking his book so to speak, if he's got

an invent spend in a gambling company. Is he offering unfiltered and objective information when he's a broadcast on ESPN. So we don't know if they're going to be putting up a disclosure, if he's going to talk about a disclosure. We don't know if he got a special exemption too. I would imagine it's you know, this is ABC we're talking about. They probably have rules in place. They ain't saying tim and saying maybe with maybe you know, million Twitter followers, then you know, you can kind of do

what you want. I also sort of wonder if they were you know, maybe they didn't know he had this investment. It was just disclosed this week. Who knows what he told his bosses. But but he has an individual if you know, if his relationship to viewers is I'm giving you pure information that helps you enjoy the game more, and then there's a group of gambles are like, well,

that also helps us make money more. And that's what it's ultimately about, right, I mean, Disney trying to figure out what is the Disney of the future and how do you create new revenue streams? Correct? So this coming out of time when investors are a little concerned about the growth of Disney US. We saw that play out in recent days. Would this be happening, Tim, this investment be happening? Do you think if we wouldn't see the decline of traditional pay TV, traditional cable TV just in

thirty seconds, sports betting is booming. So it might have happened anyway, but they get the added two for one benefit of also addressing some of their audience concerns. Do you think it would have happened if Bob Iger were still there? Possibly? Okay, so that they were certainly considering it. Um good stuff, So great to have you come back. Love it, Love it. Tim O'Brien, senior columniste, Bloomberg Opinion. I wonder if m Adam Schefter got called to the office.

Adam Schefter, could you come to the ESPN? Did you tell us about this company? Exactly? Check out Tim on Twitter at Tim O'Brien of course, Bloomberg Opinion. Seen him your columnist in our Interactor Broker Studio. I'm oh journal, Yeah, but you let me drive. Oh no, no, no, all right, please revel I want to drive. Drive by the questions, trying the drive to the globe community. Thanks, we'll drying

us Dawn on Bloomberg Radio. Isn't he just about ten minutes left in today's trading session, So just a few minutes to wrap up that Thursday trade. We are hovering near our best levels of the session. So, as Charlie mentioned, really seeing some decent gains one point three percent higher on the SMP one and a half percent higher on the Dow. And I want to more than it's not decent if you're shorting the market, because you'd be like I'd love to see a little bit of selling. Well,

you saw some one Monday. We did, but we've made back that ground in a big way. Tuxioca is CEO and partner at Cavar Capital Partners. One billion in assets under management back with us from Leewood, Kansas. Do how are you? I am right? How about you guys doing well? Doing well? It's been another I hate to use the word interesting, we overuse it, but you know there was fear in the markets on Monday. I was reading something

about JP Morgan who was talking about fun flows. E t F flows out on Monday about eleven billion, which was I think the biggest on a down day this year outside of quality options and futures expirations. And then here we are a rally and we've bounced back significantly. How do you see the internals of the market? Is it? Is it fragile? Is it confident? Is it strong? What are you see? I think it's more confident than it is fragile. It may be a little tired, right, I

think it might be calm, but not complacent. And to your point, Carol, I mean you're coming into this week off of a down week and a really bad Friday, which was a quadruple witching Friday, and you kind of this trifecta of fear that was percolating over the weekend. Obviously the evergrand news and the pros because of it having the capability to catalyze a global credit event given

kind of its precarious lending position. You've had the FED meeting, right timing and intensity of whatever tapering or tightening communication they were going to provide um all the nausea is was just mentioned in that Lumber opinion piece preceding our segment of these political debates that domestically debt ceiling concerns, all the bureaucratic bundling and continuing resolutions and throwing a

fourth deal. Right is is seasonality which seems to be getting a lot of time and attention and was even tipified in some of the fund flows that I read that you mentioned about JP Morgan earlier this week. So if you, if you have all of those things right, you you you go into a market that becomes incredibly oversold right after the Monday down down day, and it was down a thousand points about forty minutes to go, and massive futures buying came in, and then everyone hoped

for this turnaround Tuesday, and that fell flat. But then ultimately the Fed comes out and I think threads the needle yesterday and injects more optimism back into the market that carried through yesterday afternoon and all of today. Okay, I just want to go back to Evergrand because it is the market telling us that this is not going

to be a global credit event. Um. I think the market is telling us set to him, and I think a few things, right, Why why would we fear ever Grand and I think it's not so much from a Lehman like credit catastrophe, but more from a consumer demand destruction in the US and Europe and a business demand

destruction Prospects and other parts of the world. Right, China's financial stunt is still in any respects closed, but as the impact of of the purchasing power of those that are most adversely impacted over in China that could ripple through the global global economy. I actually read an awesome articles. I think it's gonna be the cover story for next week's Blueberg Business Week. Um addition, it takes a really deep dive and the evolution of evergrand It's prospects for

recovery cover actually this week. Okay, so it's in the best line I thought of the whole article was Chinese leaders speak of the goals of moderate prosperity and common prosperity, and household acculating more debt to buy multiple or luxurious homes doesn't sync with that vision. I thought that was fascinating. Right. Ultimately, it's hard to square communism and capitalism, and I think the market created a lot of ability volatility trying to

piece those together. So dips when are dips buying opportunities and when are dips a sign of the beginning of a correction? Yeah? You know, I I think and I actually keep taped on my one of my screens at work when my main man of all time, Peter Lynch and and it said more people have lost money anticipating

corrections than in the actual correction. And I think we need to adhere to that, considering time in the market, timing in the market, however, But you know what, right, I mean that that the right now is just so much cash and we've actually done a deeper die. But what does that mean? Everyone talks about ash on the sidelines, so where is this cash and where are these sidelines? But there is a lot of money that is looking

to find an entry point. And you know, this is the first five percent pullback we've had an ear and maybe that speak to the seasonality impact. It was not on a closing low, but an enter day low. We saw five point two pullbacks sne sect one last one of the nine and a half percent in September. So you have low you have you have a lot of cash, you have low interest rates. And jpology said yesterday they're gonna stay low for a while, that's in a heart

that's hardening for risk gassets. And then you have market multiples that are improving. Right see an S and P that's up for the year and it's selling at all lower a cheaper multiple than the first of the year. So where people that are concerned about a dip turning in a correction, you need to typically have you need typically have earnings rolling over and a FED policy mistake. And I don't know how we have a mistake because we have the most telegraphed and transparent FED move in history.

The next time they fed, I mean they basically I keep saying this, but they are spoon feeding us. And to be fair, Mike McKee said, j Pal did a great job yesterday. I mean the markets kind of got it, understood it, and are off and running. I agree. I mean, I think they's done a good job for quite a while, Carol.

But yeah, it seems that like ahead of every meeting, there emerges this deep seated fear that Paul is going to disclose some like alternate agenda or suggested this open Marketmitte has overtaken his influence and the market is going to left to be the left to ascertain what that all means. But he's doing everything he can, in my opinion, to spread that needle between stimulating the economy and not provoking hyperinflation. And it's a real time experiment or exercise.

But again, the transparency is is I think it's a big asset for him. All right, any nervousness out there just got about Oh gosh, of course, I mean, and we talked about this a couple months ago. Are our challenge right now and in sourcing client or investing client capital is in fixed income? Yeah, I mean, he didn't know that it's impossible to predict returns in the in the credit markets over the next twenty years that we

saw in the last twenty. So we're spending a lot of time there and of course that makes us nervous. Absolutely all right, we're gonna leave it. They're always good to check in with you. Be well, Doug Sioca. He is CEO and partner of our Capital Partners one billion in assets under management, joining us once again on the phone from Leewood, Kansas. Thanks for listening to Bloomberg Business Week.

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