Lawmakers Take Shot At Apple, Google App Stores

at Bloomberg dot com slash podcast. Well, we've been talking about it for the last several years about what appears to be a growing regulatory oversight, a heavier hand on the part of the U S regulators and US lawmakers against big tech here. Historically they've taken a very light touch, but the scenes in recent years a little bit more heavier Handless check in on that story, Jen Ry, senior litigation annalyst for Bloomberg Intelligence, joins us here in the

Bloomberg Interactive Broker Studio. So, Jen, again, it seems like, you know, there's definitely been a heavier hand here by a lot of these regulators, and right now they're looking at the apps. I'm thinking about the app store, the Google App Store, the Apple App Store. Uh, that's a big revenue source for those company. Is what's converse looking at? You know, It's funny it we have been talking about

this for a couple of years, Paullen. It seemed like it was really all about Google and Facebook in the beginning, and then suddenly, you know, there was a lot of focus on Apple and Google and their app stores and their their walled gardens, so to speak, for their mobile phones. What this UM Open Apps Market Act is looking to do is take away some of the prohibitions and restrictions

that Apple and Google utilizes with app developers. So, in other words, you can only a user can only download an app from the official app store of that mobile system. You have to use the payment systems. If you buy an app or you make an in app purchase, you have to use the Google or Apple payment system. And also there may be some use of the data of rivals to support or promote or develop their own products

that are also within their own app stores. So what Congress is trying to do is break that down and force competition that would lower the rates which are the Google and Apple and Apple charge app developers, and seemingly that would bring the price down for users of apps. Do these kind of UM regulations also govern physical stores. For example, if I opened uh chain of drug stores

across the US. Would I have to allow certain products sold in my drug store and have um the margins that I charge regulated, and need to allow certain people access to my data, etcetera. This particular regulation would not because it defines covered companies, and really it's defined so specifically that it really only means Apple and Google within

this context. But you know, what you raise is a really good point because you ask why these companies, particularly when we don't regulate other industries in that in this manner, And we haven't really regulated other industries in this manner because government hasn't wanted to intrude on business models and business strategies and the way companies operate in the free market. And so I think for that reason, you know, I

do think that there will be some pushback. Well, there's a lot of momentum here right to reform antitrust laws and regular gatekeeper platforms. I do think there will be some pushback, and if something gets enacted, I would see it as a water down version of what we're looking at here. When I first read about this, it seemed like a solution in search of a problem. Is there

widespread pushback from consumers that apps are too expensive. You know, there really isn't but consumers just may not understand the framework, and that that's really what some of the competitors are arguing, like Spotify or Match or Epic Games that really have problems with these prohibitions of these companies. They're arguing that consumers just don't really know that they're paying more because Apple and Google charge the developers so much more and

that's passed down to consumers. But it really raised such a good question because it's not really something of all the things that Congress could be doing and regulating and legislating, it isn't really something that there's been a big consumer uproar over UM. There are a lot of lawsuits and there are other bills in the House and incentive that

would seek to do the same kind of thing. In particular, a lot of litigation right now against both Google and Apple, but it is mostly brought by companies and not by people. There are some I should say that there is a class action by consumers, but I think the broader push here in the litigation is by developers and also by

by states. Yeah, those are three apps that I don't use UM, but I can understand also that Congress does want to try and just limit the powers of these gigantic tech companies because they're so big and have such a wide reach. Right, That's right, And I think and if you think about what the pushes, the bipartisan push here, it's why I tend to think these versions of the bills we're seeing today aren't the ones that will get enacted.

If something gets enacted, because you have Democrats, particularly the progressive wing on one side, that are really about just curbing dominance and curbing monopoly power. A lot of the Republicans, not all, but a lot of the Republicans are more concerned about what they view as censorship, that the power of these companies has led to censorship of conservative viewpoints, and they're more interested in regulating to prevent that kind

of conduct. And I think, because you have bipartisan interest, but coming from two different perspectives, you may see some trouble when it comes to trying to get the sixty votes you need in the Senate to enact any of this. All right, jen great having you on, and I hope we can get you back because you're very good at

what you do. Jennifer E. Is a senior litigation analyst for US out of Bloomberg Intelligence, talking about the latest attempts to reduce the power of Apple and Google and really about the lawsuits they've been brought by a number of companies in one class action lawsuit UM by consumers as well to try and regulate the app stores UM

and the businesses in general. Well, you know, speaking for myself, one of the silver linings of this pandemic is just to heighten my appreciation for the biotech industry, for the pharmaceutical industry. I mean, coming up with multiple vaccines in record time and getting them uh distributed as they have has just been extraordinary. So just amazing work being done in the biotech UH industry, and a lot of those investors know very well, uh kind of what's getting done.

Let's check in with one of those companies, Florian Brand, CEO and co founder of biotech company at Thai based UH in Germany. The symbol NASTAC symbols A T A I. If you've got a terminal in front of you there about three percent today. They recently reported some uh some results. Floria, thanks so much for joining us here. Tell us about your company. What is a thaie focusing on right now. Sure and thanks for having us UM today. I'm sorry.

Um SO it ties the clinical stage U bio pharma company, so basically a drop development company developing novative novel trements from mentality disorders. And you mentioned covid UM and experienced that during covid those numbers of people suffering from mental

health in cases have unfortunately really um skyrocketed. So we're in this for developing novel innovative treatments UM and also look at previously stigmatized compounds such as psychedelic compounds to really um improve the current existing standard of care to um ya make it make patients that suffer from mental health disorders and globally that's roughly billion that make them, make them more more more effective, develop more effective options

for them, UM so that they can can get better treatments. So when you talk, I mean there has been for decades talk about using psychedelics like psilocybin or LSD to treat various issues UM from mental health issues to alcoholism. What are you talking about specifically, um so, we're among others are also looking at um A psilocybin um, but more broadly also at d MT and other molecules that are considered psychedelics also at a at an the answerer

of of ketamine UM. So indeed, to your point, they have been well researched over the last decades, starting as early as in the fifties and sixties UM where they actually already showed interesting and very compelling promising UM signals

that they're very relevant UM drugs treating psychiatric diseases. But then mainly due to political reasons that research slowed down due to the declaration of mixings war and drug and then most recently with very promising studies out of John Hopkins in Baltimore and Imperial College in London, there's more and more kind of a spotlight in the academic world

showing really the promise of those compounds. And then around around that time seen that's also when we decided to to start a time to really put more money in vigorously researching those compounds UM to really demonstrate that their safe andificacious for mental disorders are to treat mentality disorders. Yeah, floor, and it seems to me, you know, we haven't heard much about psychedelics really since arguably the sixties and maybe the seventies, So what's what has been the whole psychedelicy

for yourself? Exactly right, I will. I was in college in the nineties and I heard a lot about them that. Yeah, so what has been the use case for psychedelics historically and kind of how are you perhaps repurposing that? Um so indeed, I mean some countries that have been actually legal for medical use. UM. Again, I think that the

backup flash was really driven by political motives. I mean there's this anti hippie movement, uh kind of Timothy Leary going a little bit too to uh, a little bit overboard. It's kind of advocating that's kind of there and everyone should take it. We're taking a very scientific approach here and demonstrating that they're given in the right set and settings and in patient treatment supervised by a therapist, they can be truly helping people suffering from from these diseases.

And I think that's important to emphasize that we really rigorously researching those in with modern samners, and that's why we're running various polinical trials at different stages UM to basically generate the data for the FDA and also later on payers to make those therapies of imbursable. Again, you're we're not in this for recreational use and overhyping this,

no really developing your medical compounds. It's funny that we vilified UM psychedelics, but UM we have no problem prescribing way too much oxyconton, right, and I wonder if UM you can use these, especially to treat addiction. I think that was one of the bright spots that I remember reading a lot about absolutely so UM the opio crisis, especially especially relevant for for the US, and we see from from year to year also that the death toll

of use this order rising. Unfortunately, We're developing one very interesting compound called Eyebel Game that has historically be you has been used to kind of ritualistic settings from kind of indigenous people, but also have been administed in clinical settings um UH for for patients in Latin America, and has shown then based on case studies, showing great potential. So there's a lot of anecdotal evidence and that this can be really an interesting therapy for people really suffering

from addiction. All Right, Florian Brand, thank you so much for joining us. Really appreciate you taking the time of Florian Brand. He's the CEO and co founder of biopharmaceutical company a Taie symbol a t AI based in Germany. They're focusing on the psychedelic side of the market and stocks up about three percent today. Uh they went public at fifteen is trading just a little bit above fourteen

dollars to share of three percent. They reported some uh our financial results just recently, so too good to get his thoughts on that market. Looking at the ten year treasury one point to three eight percent, where does a good fixed income investor go to get return? Let's go to r J. Gall and asked that question. He's a senior portfolio manager head of the Admiserable bond group it federated Hermes based in Pittsburgh. They had a couple of

shekels under management. Let's call it total assets on management six billion. R J, thanks so much for joining us here. Um, you know, tax exempt or taxable? Where do I go for yield today? How much ris should I be taking? Well? The yield can be hard to come by, certainly in a historic sense, yields are are basically a record lows and muni spreads of titan massively both taxable and taxing.

That markets thematically have seen low quality credit massively outperformed UH, and that UM is something that that I think a number of active managers certainly we felt was apt to happen as the UM at least the improvement in the pandemic picture, which recently has been complicated by the delta variant, but nevertheless, the economic reopening a strong tail wind to the returns to credit, whether it be intact sex after

taxable bond markets. Looking forward, given the yield moves, given the spreads have compressed, UH, there seems to be a little pause in that. Over the last month or so, high yield corporates, for example, have started printing somewhat weaker returns. In the muni space, spread teams have stagnated. You still get your incremental carry your income UM, which is better, but you're you're losing out UM. You're not getting the

price and appreciation that we have before. It's certainly gotten a little murkier going forward, and the delta variant is probably the main reason at this point in time. Are you getting paid for the risk? Howard marks Um told Eric Shatzker a couple of weeks ago, he thought, you know, three basis points sounds very little, but he wasn't as concerned about default risks and felt he was being paid

um in line with the risk he was taking. Are high yield group is a very strong group in the company, with a lot of success in various strategies, and our our multisector total on fund we started of a sleeve approach. So when we allocate myndy to high yield, our high yield guys management and they tell me, UM, they still

like the market. We still are overweight relative to our benchmarks. Uh. The prospect of return is obviously lower than what we've experienced in the last you know, six to twelve months, for sure, but the incidents of default is expected to be very very low. Corporate profits just printed a lot of favorable news across a variety of sectors. Now everybody

says that's backward looking. Yeah it is, but it's the most recent momentum that we have built up economically heading into what could be a dicey late summer and fall. As the delta variant clearly a roding on sentiment. Look at the Michigan consumer sentiment numbers. UM. I think corporations are now struggling with return to office in addition to supply chain challenges and various echoes of the of the

first wave of the pandemic that we're all still going through. UM, we're still optimistic that credit is an avenue towards our performance. Uh not the least of which contributing factor the that is still at zero, still buying bonds, suppressing returns on high quality fixed income, and that is helping to boost returns to low quality. We don't think of recessions in

the offing. We might have a hiccup, it might be a little bit of headwind compared to what we expected because the delta variant, but we still like credit on economic momentum and corporate corporate performance. I didn't I didn't mean to get us off the Muni track. Paul is obsessed with Muni's absolutely. I I love the new Jersey Meunis. We just can't get me yields r J. How about inflation here, r J? I mean that is a concern.

It isn't even more more of a concern for this market, say a month ago, and perhaps people getting more and more into that transitory camp. How do you guys think about that? UM, We've been firmly in the camp that it will be less, it won't be as transitory as Chairman Powell expects UM. I think even those at the FED, I mean, you can sense over the last eight weeks there was a softening of the transitory UM desk beating for a while there it was going to be transitory,

and it was almost like they wanted to guarantee it. UM. But if you look at the f OMC speeches, if you look at the minutes or not the minute, excuse me, the summary of eaconomic projections and the risk around their inflation outlook was skewed to the upside. I think that it's pretty clear that the inflation story is still evolving in such a way that we think that the Fed will prove to have overplayed the transitory card UH, and that some of this inflation is gonna last and echo

for a while. UH. It's one of the reasons why we are still short duration UM a little less so than we were, say, six day weeks ago, but we still believe that you'll should be heating someone higher to compensate for the inflation risk that is clearly higher today than then it was expected to be. I think on the part of the FED and on the part of many of the markets. Right now, the market doesn't seem

to care that much about that. Uh, you know, you've had some deceleration in the month over month, Prince that that's good. The second derivative went negative. That fits the FEDS framework of transit story. But we don't believe we're gonna get reset back towards the fedced target rate of two percent. We're going to probably overshoot it more than

they would like. And we think as a bond investor, you know, owning treasuries for example, we we should ask for a little bit more, ye know, than we think rates should be heading higher. The delta variant and its impact on the gross trajectory the obvious key risk. I do think the Afghanistan story is a very difficult story on many fronts, but I don't think it's an economic

or a market problem. When is you know, considering the phenomenal history of the Michigan Wolverines that their performance over the past few years, over the deck last decade really has been dismal, When are they going to field a really winning team? R J. I just you know, I have to warn you. Matthew is from the state of Ohio. Uh, yeah, that you came from. Are you a Hire State fan? Is that what you're trying to tell me, sir? Yeah, Well,

I mean I like winning teams. You know. Well, you know I I used to bristle at these kinds of comments. I have to say that the it's been a little humbling the Michigan football performance of late um, I would say this, I think that you basically when Harbaugh came in, there were expectations he was going to get us into the college football Championship, get into the playoff, or whatever iteration of it that we're on. I'm gonna have to

cut you off. Well, here in the Bloomberg Radio studio here Bloomberg h Q in Europe, it got lots of the cable network video streams up and running at all times just to keep on top of the news and lots of images and video of chaotic chaos going on

in Afghanistan, particularly at the airport in Cobble. Right now, let's get the latest from Bill Ferries, he's a national security team leader for Bloomberg News, joining us on the phone from Washington, d C. Bill, Again, this is not the way I don't think anybody wanted it to go.

But perhaps this is should not be that surprising. What is the latest from your warding about what is going on in Afghanistan, particularly in Cobble Well, as you mentioned, there have been some scenes of real chaos and confusion at the airport. Is people storm the runway, some trying to grab onto US military planes as they were taxing. Um. I mean up is now reporting that there have been

seven people killed at the airport so far. I think on the U s side, people were waiting to see how the President Biden uh finds a way to address the situation. The administration is pushed back a lot um in terms of saying that you know, they expected the Afghan military to put up much more of a fight against the Taliban, and even as a lot of analysts thought that the Taliban might eventually take control, I don't think there was anyone even a week ago predicting that

something would happen this quickly. That said, the US has spent twenty years building up the Afghan military, So if anyone should have known how prepared they were to fight or not, you would think it would have been the US commanders in the field. Yeah, I mean, I would say from reading through the Afghan paper, Afghanistan papers and

reporting across the various news organizations. UM, it looks like the Taliban started to negotiate with Afghan army and police personnel at the beginning of the year or the end of last year. So the Taliban already knew that they had these entry points. And UM, a lot of these Afghan officials weren't getting paid for the last six months of the last nine months, so clearly, UM, you could

see how their loyalty would weaken. What happens now, UM in terms of getting people out, I know the president's UM team said they're gonna send what five thousand troops to the US to to the Kabul airport. Um, is that still the case? And how are they planning on who are they planning on taking out? Well, right, it's actually up to six thousand now that they said, we'll be in play by by at some point tomorrow on Tuesday. UH. And their job is to secure some sort of a

perimeter around the airport. And they still have diplomats, they still have Afghan translators and other aids that they are rushing out. It's not just in the US, the UK is also running flights in and out of Kabbal the big the big question, and I think the problem that the US has here is that if you know you're someone who's trying to get out, whether you might be an Afghan translator who worked with NATO forces for years but in a more remote province, you would have to

get yourself to Kabbo. At this point, there are no exit points um in Afghanistan except the airport. If you try to cross the land border, you're going through Taliban

setpoint for that at that stage. So I think that's going to be the question is how well can the US and allies get their own people and their aids out, and then of course what happens to for instance, women and uh and and children's rights and country We we all remember what that was like under the Taliban, and there's already reports of human rights abuses in some of

these Taliban controlled areas. UN Security Councils having an emergency session on that issue right now, um and that's going to be one of the bigger questions in the days ahead. It's so damaging to the US credibility right to have um U S forces so publicly abandoned, these people who put their trust in the United States military, and I just really leave them hanging. How how does a president who wanted to telegraph the message America's back to work

with the world, how does he handle that? Without a doubt, It's it's perhaps the biggest crisis that Joe Biden the space that he took office. He ran as a candidate in part on his you know, three decades of experience on the on the Senate Foreign Relations Committee, his time as a vice president UM, and you know, really as

a foreign policy expert. And again, I think there were a lot of people who would have said, yes, the Taliban will eventually win this, but nobody thought it would happen this uh, this quickly, and it makes the administration look like it didn't really have a plan for how to secure the withdrawal, to get its allies out in time. We have six thousand troops going into the airport by tomorrow. That's more troops than we've had for four or five

years UH in Afghanistan. So, you know, a few weeks last months of the president, Biden was saying there was no way we would see this kind of a situation. We have it faster than anyone expected Bill. I guess what's going through my Twitter feed at the moment as it released to Afghanistan is the lack of communication from the White House, particularly from the President. What do we know about when he will address this issue publicly? We are his national security advice in this morning that you

will address it soon. We know he's been up at Camp David. I think we're all looking to see whether uh he tries to give a speech to the nation from there, whether he comes back to Washington. We have not seen a lot of his top advisors. It was his national security advisor who was on TV this morning, But we haven't, you know, except for the Sunday shows, we haven't seen a lot of Tony Lincoln, Secretary of State,

or Lloyd Austin, Secretary of Defense. They've got a lot to work on, of course, but I think you would expect to see them putting their face forward a lot more in the coming hours. And Tony B. Lincoln um said he considers the administration considered the mission in Afghanistan success going after those who harbored nine eleven terrorists. What are the chances that the Taliban harbor's terrorists again, or that the vacuum is filled with you know, um, Chinese

or Iranian power. I think for sure you're going to see foreign powers thinking a stronger interest. I mean when you look at hoop orders Afghanistan, just starting with China and Russia, they first of all, they have their own security concerns. Um, there were four that China had fast up its military presence a little bit on its shared border. Uh. And for sure, Pakistan, of course, which is a close ally of China, is going to be even more involved

than it than it already has been. The Taliban, their comments so far have been a little bit more moderate. Um. They've been saying that they want to have some sort of a discussion about the political future of the country. But I think realistically people are not going to put a lot of stock on that. Actions will speak much

louder than words. And and and the Taliban have a history of of of running you know what was internationally condemned as a as A as a fairly brutal regime when it will help power in the late ninety nineties, all right, It's just a horrible situation. And I'm sure there will be plenty time for blame to go around after but it would be uh, you hope that American, British, German, French forces can get in there and save the people that their trust into the Allied forces. Bill, thanks so

much for joining us. Bill Ferries is National Security Team leader for US here at Bloomberg News, joining us out of Washington, d C. Talking about the UM still developing, but just tragic, tragic situation. The images of people jumping onto air force planes and trying to run on the outside of the aircraft are really horrifying. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews of Apple Podcasts or whatever podcast platform you prefer.

I'm Matt Miller. I'm on Twitter at Matt Miller three. On Ball Sweeney, I'm on Twitter at pt Sweeney. Before the podcast. You can always catch us worldwide at Bloomberg Radio.