Brexit's Monty Python Impression Continues: Authers

I'm Lisa bram Woyds, Vince Ignarella, Bloomberg Macro Strategies, joining me here up Paul Sweeney out on a much deserved vacation. It has been an incredibly volatile period for the pound, for sterling uh today people are not sure what to make. European Union leaders are planning to offer the U hate conditional Broxit extension at this week's summit in Brussels, widely expected in markets. The question is though, going forward, what this means for what kind of Brexit we're going to get?

And to answer that question and tell us exactly what we can expect and look into the crystal ball is John Authors, who joins is here in our interactive Broker Studios. So John is the senior editor for Bloomberg Market, What do you think what's going on here? How much creed this do we put into a delay getting a better Brexit deal a delay? Well, there's no deal that's possible other than the one that Teresa May has already negotiated

without a delay. So if you have more of a positive polyannerish attitude towards this, then plainly a delay should be able to improve the ultimate outcome. So there is that element of positivity. That said, the government's strategy throughout has been to work on the assumption that any delay is going to be seen as a betrayal. That is a big part of why it doesn't want to delay if it's all possible. Uh and adds to that that the the clear Are deadline has been used as a

negotiating tactic. Now, what's interesting in the last few days is that that's deadline did appear at last to be working. We heard quite a number of very aggressively hard line pro Brexit MPs beginning to suggest that they would vote for this rather than take the risk of leaving without an odeal, or perhaps more importantly for them, taking the risk that they would end up without a Brexits at

all um. So that then leads to the very intriguing UH parliamentary drama we had yesterday when the Speaker decided that we wouldn't be able to have another vote on this unless tourism you can get another deal. I think having you wanted me to answer the question, and obviously I can't, because nobody can. I think what's most I

think what's most likely. I think what's most likely at this point is in the next week that Europe comes up with something that is enough of an excuse for Terisa May to ask for another vote, that we get one more vote, probably next week. I think the odds

are still narrowly on that vote failing. I the Brexit deal that we've got ahead of us, which from the markets is a point of view, is a very good one because it leaves Britain basically in economic terms in Europe and from the point that brick Steers terms, it's a very bad deal, but from market terms it's a very good deal. The most likely scenario is that that still narrowly gets down and at that point we have

to have a long delay. So with the delay in the potential vote next week, there's some talk that what the you will propose is making some consolation to the delay, adding that to me is deal and would that be enough to get past Barkau to give her the opportunity for a vote next week? What do you think they need to come up with something substantially different. They can't come up with something substantially different in the time available, and he won't he won't allow it anyway. I this

is we're in the realm of politics. We're in We're in a country that doesn't have a constitution. Um. This is a precedent. It's an extremely strong precedent that dates back to the very early years of James the First, who came after Elizabeth the First talking about British politics. It takes its Yeah, it's fun um that. But but the constitution. Our constitution is a fluid document, which is to say, it doesn't exist, so you can you can alter it if you absolutely have to. Berko at this

point is in a political situation. If it is obvious, um that there is will to have a vote, he probably will take an excuse to bend and vote. The other important points to note is that there are ways around it. If you really want a glorious British possibility to it is a make could always call an enter this parliamentary session and start a new one, the only problem there being that she has to get the Queen to agree to come and give a new speech, because

this is like Alice in Wonderland. This is like literally the tea party at Alice in Wonderland. If she shakes her hand like this and says abra cadabra, they can restart it. And John Burko doesn't have like to stand on this is crazy? No, why doesn't she just do that? Be it is crazy? Well, she's the Queen is a nice old lady in her nineties. We don't really want to drag her around the streets of London and sticker in the throne. It's got to wear quite a heavy

crown whilst he gives that speech. So so we've got to be polite to polite to her while we were at it. That that's that's one point. I mean. The other point is thank you, and the other point for anybody out there, thank you. The other points. The other point, which is more serious, is that you can get Parliament to vote to override the normal rule as that if

a majority of Parliament can vote to override the speaker. However, they have to be sure that that that somebody has to organize them to do that, and in principle, you can only get that if you have already assured yourself that a majority of people will actually use that vote to change their mind. I mean you're speaking about the politics. This is a rule that really hasn't been used since

I understand, Um. I think that's well, yes, but that's partly because generally speaking, if you've lost once, you don't dr going back to the world. I mean, I mean you mean giving moving on from Lewis Carroll, I've I've drawn the analogy and others have to to Terisa Ma of Terisa Ma to Monty Python's Black Nighty has both his arms and both his legs cut off and still doesn't know he's beaten, and he says, come back here and I'll bite your legs. Basic just a fasturants butter

scratch um. Most most British prime ministers are not gluttons for punishments and don't actually keep putting exactly the same vote to the MPs when they've lost already. So yes, it hasn't been in vote since then, but in general is speaking people you don't it's not something you need to invoke. People don't like losing more than once on the same issue. John Authors are Monty Python correspondent U here at Bloomberg LP, joining us here in our eleven

three our studios. John Author is a senior editor of Bloomberg Markets and h Brexit does draw natural comparisons to Louis Carroll and Monty Python. At this point, I was actually just trying to picture the Queen with their staff whacking Burko over the head for dragging her out in amazing. That's absolutely amazing. With her heavy crown, I actually think she would just give him the look of death. Absolutely, it would. It would be worth it would be it

would be worth it. I am Lisa Bramoys, Paul Sweetie on vacation, Vince Saignarella, I'm so glad to say Bloomberg Macro Strategies joining me here in our Bloomberg Interactive Brokers studios. You know, it's really interesting when you talk about recycling, do you ever wonder where does it go? Takes it? I think this is a fascinating story. It's fascinating right and and for years it was China and they have stopped taking our trash, and there is a question is

it even worth recycling anymore? And our people recycling or are frankly waste management companies just throwing the stuff away? Joining us down to discuss. Brent Bell, vice president of recycling at Waste Management based in Houston, joining us by phone. Brent, what's the answer to this? As China refuses to take our trash? Are we just throwing stuff away rather than

recycling it ourselves? Now? You know we're we're still recycling a waste management We had had to find alternative markets though, because China was accepting of the material we shipped over there in historical high years. Now they're down about three percent. So we really had to look worldwide to find other markets for the mixed paper, the cardboard, and the fiber that China was consuming for so many years. And what

are those markets? Are you? What are you're saying? We're still exporting globally, just not to China to other countries. That's that's right. So India some other parts of Southeast Asia have really stepped up. We developed those markets years ago, knowing that the dependence on China was was somewhat, Uh, you know something that we knew at some point we'd end you know, they talked about it for years, from environmental concerns due to high contamination levels on reducing the

amount of imports that they would take. And it's it's a global issue, so it's not just us to China, it's other countries going into China. We've all had to shift and find alternative markets. And then even domestically, you're seeing a lot of new expansion domestically in paper mills, which we haven't seen in decades. Are other markets more

expensive than China? So I would I would say they right now that prices are a lot lower than other than China was China is always a premium buyer for these type of materials, and other markets with it's India, Southeast Asia. Even here domestically, because of the recent oversupply situation caused by China, we haven't seen a lot lower

prices on the commodity side. So that creates a definite price and balance, right if people are paying less for it, but the cost of recycling goes up, that's the conundrum you have as to what do you do with the stuff if it just costs more to recycle than effectively

throwing it away. Exactly, today, are processing costs at our facilities, you know, exceed the value those commodities by by you know, ten to twin dollars per ton, which means that they, ultimately, the customers degenerates those materials, has to pay that difference. Where historically their business models, whether that's the municipality or commercial customer, relied on these commodity prices. It's somewhat you know, subsidize some of their budgets, and actually there was money

coming into them for so many years. Now it's money calling out to pay for the processing costs. So, Brent, there was an article in the Atlantic magazine in the past a week or so. Is this the end of recycling? That was the title of the article, and it was talking about how Americans are throwing more and more stuff away and there are fewer countries that actually want to take this stuff. You are saying, you sound constructive that you're still recycling, but is there sort of a diminishing effect?

Are people recycling less than they did, say a year ago or two? So I think the big part now is people are recycling as much or more, But some of the materials are putting in the stream is contaminated. So what we're trying to do now is go through an education program to make sure that they understand what the right materials are to put in those materials to begin with, in their in the recycling bins to begin with.

But I do think that whether you're selling material or paper mills are here in the US or India, they all expect a much higher quality of the material than ever before. So it almost seems like this should be part of the conversation that everyone speaking about about green deals and and green products. It does if we're polluting, if you will, with plastics and recyclables certainly doing other things to the environment, it's it's not a trade off. It seems like we should be getting to start where

the problem first started, right. That's right. And I think you hit the nail on the head a few minutes ago when you mentioned the supply and balance is so many. For so many years we've had our customers want to have higher diversion rates and produce more recycling. What we haven't focused heavily on that we need to is on the brands and the manufacturers to use more recycled content. We need to create that demand situation which has really

dropped off today and that's what's caused lower prices. But if we can encourage our customers to use more recycled content, to support brands that have recycled content in their in their products and packaging, that will help create this demand. It's so needed right now. Thank you so much for being with us. UH. This is a really important issue and hopefully we will hear from you again. Brent Bell is vice president of recycling at Waste Management based in Houston, Vince.

I find it fascinating because this is such a consumption based society and you have to wonder when you do spend that time sorting things into the different bins, do they just end up throwing it away? Yeah, and you know you do. That pollution issue is really important because people don't really look at all the times at what they're recycling and they said, well, if it's plastic or if it's metal, then it certainly must go in the bin,

but not necessarily. And they're also is an eddication issue with respect to cleaning some of these UH plastics or other containers. Right. We have to actually it can be really difficult, right, especially that at the grease just sort of like stays in the cracks. And then if you spend a lot of time using the water, are you wasting the water and the heat? I mean, I give this way too much. You can tell on neurotic I am yeah. Vince Signerella alongside me today Bloomberg Bacross strategist

Paul Sweeney on vacation. I am so happy you're here. Uh. We were talking about bitcoin a lot over the past eighteen months, or maybe eighteen months ago when the price of a bitcoin was more than four times as much as it is currently currently trading less than four thousand dollars each. But there is a question what is the future of cryptocurrencies as enthusiasm Waynes joining us now did it weigh in? Is Eric Lavek. He is chief executive of Ledger based in Paris, but he joins us here

in our Bloomberg Atta Active Broker Studios. Tell us a little bit about what Ledger is and how it fits into this cryptocurrency world at a time of transition. I would argue, yeah, Ledger is a security company, technology company providing with hardware, wallets and all technologies to secure a bitcoin and crypto assets. Because it's a complex asset, you need to secure it, and so we are a global leader writing solutions for individuals and enterprises. So what has

it done for your business? The fact that there has been this sort of dropped enthusiasm cbo just saying they're not going to trade futures contracts had a bit quite anymore just in the past few days. Well, we have a lot of enterprises and financial institutions working with us, and we have despite the collapse of the price in the recent months, the strategies are still very strong. So if cbo IS is stopping their futures, maybe first it can push up the price because you cannot shut it anymore.

But also most of the financial institutions have a very strong strategy for the future of crypto because it's not only decentralized crypt occurrencies, it's also the chanization and basically they really want to build a new backup fees based

on this technology. Yeah. I think we were just talking about that off the year that the fact that sebo stepped out is actually potentially a good opportunity for bitcoin to rise again because as soon as they came in with that future, it gave traders an opportunity to short the physical uh if you will, the technology physical, and and that is almost immediately after the price came down. Is now that they've stepped out, there is an opportunity for traders to get back in and play bitcoin the

way they did before. See bow Baby Sebo stepping out. But you have firms like JP Morgan Chase stepping in and saying they want to develop their own digital currency. So this is definitely a positive for you and for the future of the company. No, yeah, clearly. Uh. We have seen a lot of ups and downs when the price shoot to the moon. The sales of our hardware while it's went through the roof as well. We were planning to sell sty thousand units we and it selling

one million. So with the price going down, it's the opposite. But we see a lot of opportunities, as always saying on the enterprises because the future is really aligned with cryptocurrencies dochanization, uh, and they don't want to miss the next wave. There's an irony here that crypto assets are not physical, they are digital, and yet there is a need for a physical accessibility or or storage of a bitcoin in a way that can create security. Can you

talk a little bit about that? And now it's sort of uh, it's it's challenging for people to get the same kind of security. It is cybersetting without the physical. Yeah, contrary to what we think when we say virtual currencies, or used to say virtual currencies before crypto assets, it's in fact very physical. When you own bitcoins or any crypto assets, what you really own is the private key.

It's a piece of information. It's something that you can write on a piece of paper, something that you can even engrave in the plate of steel, input in a safe. So it's like cash or it's physical. It's like Beerer bones, and so you need to protect them. You cannot have them on your PC or your smartphone because then you can get hacked. That's why you need a secure device which is built on smart cards, which is going to

allow security. It's like a fortress for your bitcoins. So like on that subject, because I just find the whole thing fascinating. There's been so many stories of people embezzling and and I think something that is still eight fifty million dollars goes missing every year from bitcoin wallets here,

there and everywhere. If it's in your wallet, if it's in your company's wallet and somebody then does hack your phone or your computer, explain to me how that remains protected if they've they've got access to it, but they don't have access to it. Well, if you are an enterprise, you need to have governance to manage your funds. So you really when we deploy your solutions, you will have

multi signature timelocks. You will have a lot of feature that will prevent a single point of failure because when you want to manage these assets as a price, you need to have rules. And this is the technology that we are providing because if you imagine that you will have only a safe with one key, then the problem is not really I t The problem is the process because to whom do you give access to the fund?

I mean to the safe. What happens if there is a hostage situation, if the CFO runs with the safe itself. That's why you need you need these layers of governance. And when you have multi signature, then you can have like protections thanks to all the process you can put in place and just real quickly thirty seconds. Here this product the larger nano X, which is a Bluetooth enabled hardware wallet. You just introduced it at c e S

just real quick. Was there a lot of enthusiasm? Was there more than you expected or or was there waiting because of what's going on in cryptoconomy. Yeah, it was a lot of enthusiasm, which was very good because despite the drop in price, people are still using our products, and the nano X with bluetooth lows management on the go. You can have your mobile phone, your smartphone, you Apple, you Enoid, and so people are enthusiastic because they will

be able to use it much easier than before. Cryptocurrencies aren't dead yet, and people are definitely looking for ways to make sure that their assets are not stolen. Erica K, thank you so much for being with us, Chief executive officer of Ledger, normally based in Paris, but joining us here in New York. I'm Lisa Abramo. It's Vincegnarella joining me today. This is Bloomberg Paul Sweeney off today on a much deserve vacation, joining me. I'm very pleased to

say Vincegnarella, Bloomberg macro strategist. Really interesting story. Instagram is getting into e commerce. If you like it, click it and buy it actually on the site. Uh, this is new. They are unveiling this. It's already moving markets, with Shopify following the most in two weeks. Uh say after RBC said the e retailer could be hurt by the launch of this program, which is called checkout on Instagram. Sarah Fryer joining us now, who covers all things tech for Bloomberg, Sarah,

what exactly is Instagram checkout? Instagram checkout allows people to actually purchase products from their Instagram app and do it all there. In the past, they had a way for you to see a product, identify it, and then go to the retailer's website. Uh. Really, what checkout does is give Instagram a new line of revenue, a new line of business which is going to be incredibly important to the future of the company. So, Sarah, I'm getting the feeling there's gonna be a lot of butt buying on

this app. Is there is there any sort of interface that sorry, mom, I butt bought right. Um, Look, I had a mechanic by a card in an auction by accident. He was looking at it put in his pocket and then he was stuck with well, first you have to give Facebook your credit card members. I wonder how many people will want to do that. Good point, really good points.

So that I mean is that one of the is that one of the issues is that like the first thing you have to do is is turn over your well, I mean, you have to purchase something on the app. You know. Here, here's the thing. This is the most promising business besides advertising for Facebook, and advertising is what's

gotten Facebook into so much trouble. And of course I should note Instagram is owned by Facebook, um and and this is this is something they can do without having to collect data or um get built up into that system that's getting so much criticism right now. So it's good for them to try something new. It's also the news feed, the Facebook news feed is losing traction with people. Well.

But it does raise a question though on a broader level, because Facebook, the parent company of Instagram, getting your credit card information at a time when they're under increasing scrutiny, uh for failing on privacy concerns. Really yeah, I mean it The thing. The thing you have to remember though is consumers think of Instagram as a separate entity in their minds. I think of it as a separate brand. So While people might not trust Facebook, they certainly trust

and love Instagram. So it creates this weird dichotomy where Instagram is able to launch and succeed with products that Facebook maybe couldn't. So we um we're getting in Jeff Bezos face here with the Amazon and Amazon Prime with a product like this, It's very different because what Instagram's check out product is going to be about is you're scrolling for your feed, you see something that inspires you, and then you save it, maybe you shared. One of

the actions you can take is to buy it. That's very different than an Amazon where you know exactly what you want, like I want more black T shirts and you go on Amazon, you search for it and you find the best one. This is going to be about seeing things in a lifestyle setting that inspires you to look like that person. Honestly, I think it's going to be so tied to the influencer market, uh, people able to sell their own goods after they've become famous. So

more of an impulse purchase. I think more of an impulse purchase more like I want to be like that person who's wearing this dress. What does this say about Facebook strategy? More broadly, to increase revenues and sort of Claude's way back into a better, better, better opinion in the public eye. Well, Facebook is in trouble because I mean not if you look at their numbers, but if

you think about the future of their numbers. They're in trouble because news feed and Facebook itself is not going to grow at the rate it used to because it's already reached so much saturation around the world. So they have to come up with more in different business models in order to deliver to Wall Street the growth they're used to seeing. And e commerce is something that they've talked about, is is something that could work. They're also

trying things within messaging products. They're also trying maybe they'll do some some money exchange on WhatsApp, but e commerce is the one on Instagram that's most likely to actually work in advertising. Sarah, what are the additional regulatory hurdles that Facebook faces when you start talking about financial products, when you start talking about giving you over your credit card to Facebook. Well, they've done it sort of sneakily, right.

I don't know if you've ever been asked to to donate to a friends cause for their birthday on Facebook. That's a way for Facebook to get your credit card number.

I mean there there's some ways that that they've tied it in to their product that seemed very unscary, but then when you step back and think about it, you realize what you're giving away, um, and so you know, I think that that is it's not going to become totally clear to people exactly what the consequences are for these kinds of products until a couple of years later, which is what we saw happen with Facebook using developers making games on their platforms, when that didn't become a

problem until years after it was over. So what I guess the target market for this is like year olds. Yeah, it's everyone who tries to be inspired by products on Instagram, and I think it's the most natural place for people to be, uh thinking about what they want to buy. Already, people follow influencers so often for for recommendations on what to where, what to buy, what to eat, what to put on their faces. You know, there's so many makeup influencers out there, and so many of those high profile

people now have their own product lines. If you have a famous dog that you follow on Instagram, you probably see that they have merchandise you can buy that. You know, you can buy their dog face on a mug. I mean, all these things will be so much easier to do now that that Instagram has integrated shopping into it and

is taking a cut well. In other tech news, Sarah, and I'm gonna throw you a curveball, but I'm wondering if you have any opinion on this news coming out the Republican Representative Devon Juniaz of at California is suing Twitter and several of its users from more than million dollars for parity accounts of his mom, Devin uing his mom Devnu in his cow. It's just sort of interesting. It shows, I mean, let's show us how personal this is. Listen. I sat in one of these hearings. Are listened to

so many of these congressional hearings on Facebook. You know, people who are members of our government who say they're trying to hold Facebook accountable, and so often the question that gets asked is why don't I get as much reach as I used to? Why are these bad things happening to me on my account? It's basically, you know, complaints and tech support and and people's support congressional hearings on tech support love it is it is. I mean it's it's like it's like, why why don't I get

as many likes as I used to? And and it is really just like people don't understand how these algorithms work. They don't understand how these products are are built in this way that is so not not human. Uh, they're frustrated. Sarah Fryar, thank you so much for joining us. Sarah Fryar, technology reporter for Bloomberg News. Joining us from there Bloomberg nine sixties Studio in San Francisco. Thanks for listening to

the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter at PTS. I'm Lisa abram Woods. I'm on Twitter at Lisa abramo Woods. One before the podcast, you can always catch us worldwide on Bloomberg Radio