Ford Moves In Right Direction With Euro Job Cuts: Kudla

with some in Germany. The shares of the company up two point two percent. UH, sort of showing how markets are viewing this cut jobs as you try to streamline your business, and they've been dealing with a host of issues in Europe in particular. Joining us now to get a sense of the implications of this announcement. David Kudla, chief executive officer and chief investment strategist at Mainstay Capital Management with two and a half billion dollars under management, UH,

sailing from Michigan, where for is based. Thank you so much for being with us. David. We love having you on. So let's just start with what was your initial knee jerk reaction to Ford's announcement this morning about the job cuts. Good morning, Lisa, Well we expected this, we knew this was coming. We've seen forward U continued to streamline, streamline

operations in Europe. The market there is weak overall, and uh Ford, like GM, has UH the problem of working in that middle market, selling in that middle market with a lot of their products. There's a weak market overall. UH they have strength in commercial vehicles, but they're not in the luxury car market where the money is made

in Europe, and that's the problem they suffer from. And so where General Motors decided finally to just exit by selling their Opal unit, uh Ford is trying to stay there, and the only way they can stay there is to continue to restructure, restructure, structure, and we're seeing another big, big step in that direction. It's interesting, Dave, that you mentioned GM and OPAL and I look at the stock today and I'm sure you know stock called does clearly

like this move here. Do you think Ford is considering doing a GM and just kind of getting out of the European market just seems so brutal to make a profit there. It is brutal to make a profit there. If you look, you know the the economic situation, the political environment, regulatory environment in Europe, the the the current economic environment in Europe, and you know the trouble that American automakers have had competing there. It's a very different

market from the US. And the strength of American automakers is um in in trucks UH and subs large trucks which don't which don't sell there. They're not they're not made, they're not popular in Europe, and so UH. You know, the money that's made in Europe is in luxury cars and in commercial vehicles. Now Ford has strength and commercial vehicles.

They have a partnership with BW that they're they're doing quite well with, but not really in the luxury vehicle segment that belongs to the luxury brands there in Europe, and and some some others that are imported UH. In that middle market that that's where you can struggle. But they do in the suv market, the Kuga that's sold over hundred fifty thou units last year at the Ecosport over a hundred thousand units last year. They have some

strength there. So the way they're streamlining now with the three divisions are going from there talking about maybe bringing in some you know, an iconic brand with the Mustang.

There might be some opportunity there, small opportunity in niche market, but the uh, this streamlining I think has some potential, but it's it's just a difficult market, I think for an American automaker, how do we sort of view the difficulties in the European auto market and lou in light of some of the trade tensions and the global slow down in growth up more generally, I mean, is this a part of that story or is this idiosyncratic having to do with the models that are popular and regulations

and just the sort of entrenchment of local companies there. Well that you know, that's the other part of it. Uh. You know, one of the the announcements with this is that they that that four expects to more than triple their passenger vehicle imports into Europe annually by And if you're going to triple your passenger vehicle imports into Europe annually, you need a favorable trade environment to do that, and

the current administration is made at quite difficult. So, uh, you know, you have entrenched brands there that are are there is a lot of brand loyalty on that continent. UH, and I think that's where there's been difficulty with you know, some of the brands that import there. But now you have these artificial barriers or let's call them real barriers, barriers with uh, the the trade wars that are coming up in the tariffs that that keep popping their head up,

or threats of terrorists that keep popping their head up. So, David, I know in the States there's a growing discussion about whether we have reached a peak auto in the US art there's similar discussions in Europe like that. There's similar discussions like that. But the concern in in in Europe is is that is that auto sales have just been stagnant really for for quite some time because of the

economic conditions. And for you know, GM before this and Ford for years have just been operating at a loss. They've had very few years over many years where they've had a profit. Ford had a four million dollar loss last year. And in Europe and we'll probably again this year, UH with this restructuring. UH. As we get you know, down the road, that may help, but it is just a market where there have been more years in recent year years many more years have lost than profit, and

you know, how many do you sustain that? And I think that's why GM finally decided to cut the cord with their Oval unit. David Couldla, thank you so much. David is the chief executive officer and chief investment strategist at main Stake Capital Management based in Michigan, and we love to have him on talking about the auto industry. He's really plugged in there and it's just a big, big issue for the US automakers. In Europe, we have

the Democratic debates underway. Tonight is the second night of a to night extravaganza with twenty candidates at meeting, joining us down to talk about what we heard last night. Chris Leu, former Deputy Secretary of Labor under President Obama and senior fellow at the University of Virginia's Miller Center. Chris, thank you so much for being with us. First of all, i'd love to get your impression of last night's debate. What was your thought? Well, you know, it's pretty much

what I expected. And it is one of the challenges with the format of having ten people on stage trying to share two hours. You know, if you look at the recent path of debates, they really don't have a big effect. We'll talk about them for about twenty four hours, but short of somebody making a major gaff and I didn't see that last night. Um you know, it's some candidates will move up, some will move down a little bit,

but I think it's sort of status quo. Obviously. I think Julian Castor did have a very nice night last night, and I think it will cause people to look at him a little differently. I was also frankly surprised by mare de Blasio, who came out very strong, and you know, he hasn't really had much traction in his race as well. I also thought, um uh, Centator Warned did well as also.

The challenge, however, is that you know, in this twenty four hour period, from less than twenty four before the end of one debate to the start of another debate, there's not much time and then by tomorrow we'll be talking about date debate number two. So, Chris, were you surprised at all that the candidates generally last night did not go after Senator Elizabeth Warren, who, at least on that stage, was the front runner. You know, I am a little surprised by that, and you saw and there

was a place I think certainly to do that. Um, that moment when the moderators asked them to to raise their hands whether they would eliminate private insurance of health insurance, you saw, Um, you saw Congressman Delaney a little bit kind of go after that. But I think by and large, you know, the unfortunate thing about the format, um, you know, at at about halfway through the people start cutting in

on each other. But by and large, for that first period of time when she was doing most of the speaking, the contenders are really just kind of waiting to be asked questions, So it didn't really lend itself to kind of a lot of back and forth. So you're a d n C Democratic National Committee super delegate, so you're intimately connected with the Democratic Party. And there is sort of a very big question here embedded in these debates, and that is can any of these candidates beat President Trump?

And from what you heard last night, did you feel more confident or less confident of that? I'm not sure I felt more or less confident, As I said, you know, I think look, um, I was with President or Senator about my back at two thousand and seven, we went through an endless series of debates and uh, you know, if you go back and read the press accounts of that first debate, Senator Obama was pretty underwhelming at the time.

And so look, it's early in the process. Um, candidates, you get better, and I frankly what I think is going to be more interesting for many of these candidates. They're gonna have to post their second courter of fundraising numbers at the end of June. It'll be interesting to see because that you know, it is not cheap to run some of these campaigns, and uh, some of them have had a challenge raising money in this crowded field. So you know, look, I think last night we heard

a lot of substantive debates. It was largely free of insults. Uh, it was completely free of insults. And that's kind of a mark change from I think what we saw in the Republican bates with than candidate Trump. So, Chris, I also noticed last night that the candidates didn't really attack Trump's character or maybe some of those questionable policies and actions and tweets. Do you think the sticking to the policies strategy will work against Trump? You know, look, I

think I think I think they need to do both. Um. I think it's highlighting um what UM Trump's policies, his his demeanor in office. But I think it's also UM putting forward an affirmative, positive agenda of what they're going to do on things like healthcare, education, or immigration. Largely the kind of anti Trump message I don't think really needs to be made. It's being made here in Washington

every day, is being made on the cable news networks. UM. You know, I just got back from I was in Iowa yesterday meeting with some voters, and they really want to hear about the issues that are affecting in their lives, and so, UM, I don't know that they necessarily the candidates nests that I need to draw that distinction, because it really is being made for them. You know, you started out talking about the limitations of this debate format. Is there a way that it could have been done

that would have been more effective? Uh, it's sort of lesson learned for next time, not to have two nights of ten different candidates on the stage, each having about

thirty seconds to talk. Yeah, you know, it's unfortunate because the Democratic National Committee I think was trying to address the concerns that came out of sixteen that they may have, you know, put their thumb on the scale, and so what they wanted to do very early on is create these objective criterias that everyone knew what they were, and to try to meet them. In hindsight, they probably set the criteria a little bit too low, this idea that

sixty five thousand donations could get you in UH. In this day and age, it's relatively easy to do that, and you can game it in a bunch of different ways. I think the real interesting challenge will be when they get this September, because then the donation threshold goes to a hundred and thirty thousand UH. It's also a two percent polling threshold, so I think you may likely see only you know, a dozen candidates on the debate stage

up come September. So, Chris, tonight, we have the second night of debates, and of course um uh from a vice president Joe Biden and Bernie Sanders as well the front runners. What do you expect tonight? Well, I think tonight is gonna be a fascinating contrast. I'm gonna be looking at whether um uh, Senator Sanders and Vice President

Biden go after each other. I suspect they won't, but I think what you will see is this kind of interesting um gender and generational contrast with Kamala Harrison stage along with Pete Boutigge, who, even if they're not directly going after either Sanders or Biden, provide sort of an interesting contrast for voters who want either a more diverse

candidate or a younger candidate. And who do you think is winning right now for the quote soul of the Democratic Party, the more liberal wing, the sort of further left or this interest Well, it's it's interesting that there's the contradiction between what we all see on social media and Twitter, which is clearly a much more progressive audience then and what you certainly see when you're out talking

to vote and what you see in public opinion polls. UM. But I do think which is I think more moderate? I do think it's a challenge. I think ultimately when you look at these candidates, there are some extremes, but by and large they're united in the idea that we need to do more to make the economy work for everyone. We need to do more to expand healthcare and make it um less expensive. We need to do more in terms of building up our relationships with allies. I think

it's gradations on the spectrum at this point. Chris lou thank you so much for taking the time today. Uh was she the best of luck. Chris lewis Senior Fellow at the University of Virginia Miller Center, former Deputy Secretary of Labor under President Obama. Also he is a d n C super Delegate. Has just been in Iowa talking to perspective voters. As Paul Sweeney was talking just minutes ago.

You might have heard some beeping in the background, and that's because I was up against the wall holding a smartphone in various places to try to get a size of what clothes I should be buying. And that is because Ronan Luzon is here with us. He is founder and chief executive officer of My Size, based in Israel, but joining us here in our Bloomberg Intta Active Broker Studios.

Ronan my Size, from what I could tell, is an app on your phone that allows you to buy sensors by just holding the phone in various places while I'm wearing some clothes I'm still wearing clothes to uh just tell you exactly what size you'd be in different brands to facilitate online shopping. Is that correct? Yeah? That's right? Right? Yeah,

So how much has this been adopted so far? So? Um, the company started two thousand fourteen, and we started as a publicly traded company, but we just launched the product last September in Fashion Week in New York. So we took us about four years to make this thing happen. He started as a dream as as a pro when that each and everyone of us suffer when we're buying things online. We get always the wrong size, well not always,

but we get sometimes the wrong size. And it took four years and we just launched it in last September in Fashion Week and was great. Like, retailers are looking for a solution because they're suffering for much from the online returns in the US alone, as between thirty and fifty percent returns almost every second item is being sent back. It's an abslute situation for the retailers and for us

to consumers. So we just now start kicking off. We began romping up the the adoption of the technology both on retailers and consumers alike, even though our business model is B two B. So who's paying for that technology is the retailers the consumers completely free for use and uh and and try so that everybody can download it. But who's paying for that is the retailers. So they're

paying for every what we call a fit recommendation. Us as the users as consumers when we're going online for our favorite retailer or a new retailer that we don't know ourselves, eyes before we click on the button to get our recommended size, and then when we as a my size charge to retailer for alright, So talking about the technology here again, I was working over here and you guys are over there in the corner of the studio.

He raises his eyebrows. I wasn't working and I heard a lot of buzzing and peeping and phones being way waved around. How does the technology work? So when I started that it's it was because of my my kid, now today's fifteen, but he back then was ordering things online, especially NBA suits, and it came wrong size, and I was thinking something must change here. So there was some different technologies out there, and one of them was image processing.

So you need to take a picture of yourself and then by the image it does the calculation off off of the sizing. The thing is that you need to take your clothes off. Now I would never get my kid taking a picture with naked or half naked and send it to doesn't matter how secure the server is, it will never happen, especially for women, even even for us as men, we will never do that. So I was thinking what other possibilities can be to do that.

So we took the mobile phone sensors, the same sensors that are almost every mobile phone for kids when they're playing with the phone, they moved from one place to another, it's the same sensors. It's accelerometer and the gyro that result in the mobile phone and algorithm that we've developed. So we know to take the information from the sensors when you move the phone over your body from one place to another, we know to measure the distance the

phone is moving between two points. And that's how we actually make this technology work for the apparel. So what types of companies are you working with to sort of get more online traction and and understand how to sort of limit some of these returns. So it's amazing that we've started actually demonstrating technology back in cs in two thousand seventeen, and back then the technology didn't actually work. It was more like a proof of concept. Even that

was not the best scenario. But the CSWO thousand eighteen we actually launched the the beta one, and when we watched the beta, we understood that so many retailers followed us because they have this issue of sizing and faith and they need to accommodate the problem. And starting two thousand eighteen, when we start demonstrating the actual body measurement technology that we're doing today, UM retailers start to sign up for air lies and pilots and try it out.

And today we have to to one customers that sign up with our solution. It stakes it takes time for the till one customers to start the integration. It takes it takes longer than we actually anticipated because what we see is that the retailer is not that much of a computer oriented of an I T company that can have a technology like that and start working with it as like as as we can see for the small and medium size retailer that's doing it in in a

couple of days or we they actually integrated. So it's it's takes it takes the time to integrate it, but we as well done the integration on Shopify platforms platform and light Speed platform. It's the same like Shopify, but Europe, on Europe, Netherlands, and we can see these these small ones are taking this technology and integrated within a couple of hours and they stopped working with it, and it's amazing. It's amazing product. You see how they can save returns,

which kills their business if they don't. Right, absolutely running, Thanks so much for coming on and measuring my co host here. Thank you for not measuring. As I said, I'm a forty two regular right off the rack down. Don't have to worry about me running. Lucan founder and CEO of my size. Just a really cool technology. Keep us in the loop as this thing continues to develop. It really like to kind of see how this places are very interesting technology as more and more clothing goes online.

We've talked a lot about Libra, which is the cryptocurrency, or at least it's been called a cryptocurrency. It's an idea that Facebook is putting out there, and I really am excited to bring in Aaron Brown. I always love speaking with him. He's the former managing director and head of financial market research at a q R Capital Management. But I'm especially excited today because he wrote a column as a Bloomberg opinion columnist that I found incredibly compelling. Aaron,

thank you so much for being with us. Uh. It was talking about how, in general, the bitcoin and cryptocurrency community is moving outside of the financial system that is sort of entrenched, and that Facebook was doing the exact opposite and from the top down trying to come up with some kind of monetary unit that could rival the dollar, the euro, the yend. Can you explain how that's the case. Yeah, thanks for having me. The best term for what libra

is something called digital cash. Now cash is something that it can be a dollar bill, it could be a gold coin. It can be anything that you can pass from one person to another without leaving a transaction record, and that the individual can identify, I can can validate. It's hard to counterfeit um. Bitcoin and other cryptocurrencies are much broader ideas, you know, trying to re engineer both technology of exchange and financial system or whatever. Uh. Libre

is an old idea. It's a you know, it's it's a gold coin, it's a dollar bill. It just happens to be digital, meaning that it's a number. It's not a physical piece of paper. It's not a piece of metal. Um. So in one sense, it's very conservative idea. It's just saying, Okay, let's take cash and let's let's make it digital, something that bitcoin does. But bitcoin does tons of other stuff too. I think Libra is a competitor to other forms of cash.

When I say it's a competitor to the US dollar, I don't mean the US dollar financial system, you know, with a central bank and the fat banking. I mean those physical pieces of paper that people use, whether you know, buying a cup of coffee or putting a whole bunch in a suitcase to buy a boatload of drugs. Whatever. Uh, that's what Libra is going to That's the market Libra is going to attack. So it's interesting erin we've had, you know, thinking about the bitcoin, the volatility has really

come back into that security. I sit down about eight point seven percent today. It just had this incredible run over the last couple of weeks, a couple of days, crazy trading who was actually trading this thing. Well, you know, I wrote a call about ten days ago saying the two thousand nineteen rally and bitcoin was completely different from the earlier one. It was not marked by access of volatility. It was real money. It was based on fundamentals, and

you could really you know, trace it. Uh for the last ten days made me a liar, And we're seeing not a liar just you were postulating. It turns out perhaps it's a little more volatile than that. Yeah, well we'll change. I mean, we're now seeing the last well, certainly last week, we were just seeing a lot of kinds of stuff we saw on you know, late two thousand seventeen and in previous crypto rallies. Are seeing a lot of retail investors. We're seeing real money selling, we're

seeing high volatility. We're seeing how you know, once it starts going up, there's you know, just massive people piling in, and if it starts to go down a little bit, that people pile out. Um. I hope this isn't just like a flash in the pan. I mean, I hope

this is just like a minor thing. It does seem to be connected around the libre announcement, which has no you know, I mean, it's not that tig an announcement period, and it certainly doesn't have a huge effect on the long term value of crypto, but it got a lot of people excited, and I think it got a lot of uh people piling in. So I think what we're seeing uh in late June is you know, kind of

a mini boom and bust uh. And I hope that the rest of two thousand nineteen is going to go along on a nice, steady fundamental move up or down, but not you know, based on real investors, real money and looking at the fundamentals as opposed to people afraid of missing out. Well, Aaron, I want to pick up on the idea that some people connected this to Libra

and some people who were just speculating. But Danny Masters was on our show earlier this week of coin shares, and he was saying that there is direct connection in terms of this creates a platform for people to potentially use bitcoin right right next to dollars as transfer cash, So it creates the piping for bitcoin to enter more commonplace methods of payment. Do you ascribe to that kind

of idea, Yeah, that's absolutely true. Among other things, libra is a very crypto friendly form of cash, and all the problems we've had with you know, bitcoin and financial mark and and cryptocurrencies and so on has been when people try to connect them to dollars. That's where you get the fraud. That's where you get the volatility, that's where you get the regulators upset. You know, as long as people are just using cryptocurrency in itself, it's a

very uh to day calm. You know. It's a rapidly changing technology, but it's one that has been clearly beneficial and useful. So if Libra is successful, now that's a huge if. I mean, all we really have is twenty eight logos of companies and Facebook saying they want to do it. We don't really have the kind of you know, infrastructure and commitment. I'm sorry. The other thing we do have is Facebook has invested a ton of money in

writing code and developing this. But if it is successful, it will make it much easier to use cryptocurrencies, and I think it would tame the volatility and cryptocurrency quite a bit. Aaron, how do you think the regulatory environment around crypto broadly defined, is going to evolve. I think when the Facebook made its announcement about libra that kind of perked up the ears of a lot of regulators and politicians in Washington. How do you think this is

going to evolve? You know, I think my I usually feel this. You know, we're we're going to work out to a sensible consensus. There are some real advantages. They're tremendous economic advantages to going to crypto, and libra is a much better form of cash than dollars or gold or or anything else people have used, you know, seashells or salt or big rocks. But so so it's going to happen. I think some form of global digital currency, digital cash will be around, and I think regulators will

allow the innovations and useful parts of crypto. But it also raises you know, it kind of undermines a regulatory regime. An awful lot of law, especially taxes, but also other laws are enforced through currency regulations. Uh, if everybody is using cash, you know, if there's no paper record, or at least no traceable, searchable law enforcement record of transactions, an awful lot of crimes become a lot easier. We used to have one of those common crimes we used

to have was mugging. Now people just don't carry enough cash to make mugging worthwhile. Right now, the credit cards is a huge issues switch to hacking, right so criminals are going to switch to whatever, uh whatever works for them. But so there's a tremendous amount of regulatory work that has to be done. You know, people have to agree on regulations. There are, of course many people in crypto who feel that they can do without governments and go

through it, but that's just not realistic. Very good. Thank Aaron Brown, Thank you so much. A calmness for Bloomberg Opinion talking all things trip though. Thanks for listening to the Bloomberg Penl podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa bram Woods. I'm on Twitter at Lisa bram Woods. One before the podcast, you can always catch us worldwide on Bloomberg Radio.