LGBTQ Authentic Inclusion In Advertising

the Gay and Lesbian Alliance Against Defamation. I know it's Pride Week in New York, and I think it's Pride month generally. We have UH flags all over the place. I've got a lapel pin that I was given um a couple of weeks ago, and visibility is just huge here. Um. I think that not only on Wall Street, and not only on the coast, but really across the middle of the country and now on to at least this continent here in Europe, people are really recognizing and selling and

celebrating gay pride. Rich Um, am I wrong in that this has become just just a massive event? Um? Is it? Is it completely Uh? I don't want to say completely accepted, but is it is it celebrated now by a majority of the people across the Western world. Yeah, we've definitely seen lgbt Q acceptance grow over recent years. You can see, uh, the NFL player Karl from the Las Vegas Raiders, as he came out earlier this week, there wasn't a backlash

from his teammates or from the NFL. There was acceptance and that's a great Everybody wanted to buy the jersey right best selling jersey this week. That was great news UM, and I think pride is that moment when you see the community stand up and be very visible throughout the year,

but you also see our allies stand up. And what's great about UM this year as we're seeing allies from all areas of business, whether it's financial or B two C companies, UM companies are stepping up, and I think that's because not only our community expects to see that, but the allies of our community expect to see brands that UM stand with and for LGBTQ people. Yeah. Rich,

that's kind of where I wanted to go. I've spent my career studying the media industry, so I'm fascinating by your visibility project that you launch with Procter and Gamble looking at advertising and marketing towards this community. What are

some of the big findings you guys had. Yeah, and so I've been with GLAD since two thousand and eight, and GLAD does a lot of work creating public campaigns for ways people could take action, but most of our workers behind the scenes with media companies, with Hollywood and more and more, with brands and advertisers to leverage that reach of media and the power of media to affect change, to tell the stories that are going to create a difference.

And with Procter and Gamble, the world's largest advertiser, We've been working with them for the last few years, and UM last month launched the Visibility projects because they've stepped up as a corporate allied to LGBTQ people to say we want to create resources for the advertising industry and

for brands to get lgbt Q inclusion. Right when I started a Glass, there was a lot of hesitation from brands to include gay dads in in an ad or to include LGBTQ people in public communications because people brands were worried about an anti lgbt Q backlash. This year, we released research with Proctor and Gamble that found that we we surveyed brand executives and exacts at ad agencies and found that the exects were not worried about that

anti lgbt Q backlash. They were worried about the community seeing their um, their campaigns, and their ads as authentic. So with Procter and Gamble, we said, let's create some resources. Because advertising is very powerful and reaches people that need to see LGBTQ people and here our stories. That's the power of brands and ads. But let's create create some resources and best practices to do it right. Bottom line is you've got really a tail wind here in two

thousand Where are we two thousand twenty one? But glad was found because the New York Post and really a lot of media had to samatory ins and stationalized h IVY and AIDS coverage. What are the biggest problems that you're fighting today, Rich Um, biggest problems right now? So our our team is exhausted this year because we have been battling back against over two hundred anti LGBTQ pieces of legislation introduced just this year in states around the country.

Eight states moved to ban transgender youth from participating in sports, even though every leading medical association said that was not necessary, and teachers groups and brands also spoke out against those bills as well. And then our community has been pushing for decades for the Equality Act, which is now installed in the Senate, largely because of the filibuster. The Equality Act would write non discrimination um and protect LGBTQ people

against discrimination on a federal level. Right now, there's this patchwork of laws around the country that determine whether or not we can be served a piece of cake, whether or not our families can be turned to way from a doctor just because of who we are. And we need that Equality Act to create one non discrimination law on a federal level. And Rich, thanks so much for taking the time to join us. We really appreciate getting

your thoughts. Rich Ferraro, he's the chief communications officer for GLAD that's a gay and Lesbian Alliance against a defamation doing some important work there and as he said, kind of exhausting year dealing with the various legislations across various states here, but it's good to get some time from rich. Really rich people in America don't have to pay taxes, they figure their way out of it usually, but those of us in the middle class end up working for

Uncle Sam pretty much half the year. That's why Congress gave us the roth I r A. It allows us a little bit of a break when the taxman cometh, and poor people like Peter Thiel have figured out a great way to use it. Let's bring in Ben Steberman right now. Personal finance reporter Fort Bloomberg News. Um, poor Peter put some worthless shares in his roth IRA and now he's got a little bit of a nest egg a Ben. Yeah, it's it's it's it's a it's a small one. Um. Yeah, he he really has has seems

to have played the system here. Um. You know, Pro Publica got these tax records, so they're able to tell this story that stretches back to when PayPal was a privately a private company. It was a startup, and what Peter Field did was take a less than two million,

almost two million shares of that private company. They were valued to just a tenth of a cent at that time, and he was able to put them in an IRA and say, oh, it's only you know, less than two thousand dollars which was a contribution limit at that time less than two thousand dollars. It's this legal, I can put this money into it a roth ira um. The next year, the value of those share sword um to like four million. I get. Some observers would say they

were always worth more than that. This is an artificially low valuation he was using. And now he he sort of moved that those investments from from PayPal, which paid off handsomely, and then into Facebook, and then into palent here and into all these other investorsments that he's gotten rich on, and he now has this five billion dollar pool of money that he never has to pay taxes on. Wow. I was looking at my I RAS and four one case recently and feeling pretty good about myself until I

saw your story. Ben. I'm like, all right, Peter Teal's got me be here. When I first read your story, Ben, I said, all right, there's a scam here. This is something that the I R S is going to have to take a look at. But in reality, it doesn't seem like he did anything wrong. Umber the valuation. I want to point out, Ben, it wasn't the tenth of a cent those PayPal shares were valued at one one

thousand of assent um. So the question is was that a fair valuation for the one point seven million shares of PayPal that he put into his wrath R I R A and a reminder to listeners, I mean, we all know, sadly, because it's so painful, you can contribute at most two thousand dollars a year to this vehicle. The PayPal was already getting going at this point. Deel head Um are already lent. He'd lent like a hundred

thousand dollars to start up. It's hard to believe that that that was what the shares were worth, given the fact that you know, just a few months later they attracted a bunch of investors. I think the value the firm at millions of dollars. So so yet that is

the part that's a little fishy. The problem is that um, the I R S just doesn't have hasn't had the resources to go in and and argue with rich people about what the valuations of these things should be, so that they're just completely outgunned and they just just don't have the resources. So is this something that the I R S is looking at? I mean, again, it seems like a one off. It seems like a good trade.

I mean, what are you hearing from the I R S. Well, there is, um the I R S has limited tools, Like I think the I R S has started to track this more at least and figure out exactly how many. Like six seven years ago, they had no idea how many of these accounts were out there. Now they actually have some rewarding requirements. So so they've they've They've started

to compile some data. What what the real forum that I'm watching is Congress, because um, there's a chance that Congress could um try to rein these in by saying okay over a certain limit, a roth Ira is no longer no longer avoids taxes and tries to force some of these back onto the tax books. I just want to point out, Ben, if you uptake this story. So uh So, Peter Teal partnered with others to start PayPal.

Elon Musk was one of those others, right, And I remember back in this is when they were valuing the shares at a cent. Elon Musk bought a million dollar McLaren F one supercar at the time with his with his PayPal riches, So there were already some people that were giving the business a fair value because there were only sixty two of those cars in the world and he got one somehow. You knew that, Matt. Yeah, you tell everything to that, McLaren. All right, Ben, thanks so

much for that. We appreciated. Ben Stephen, personal finance editor for Bloomberg Musical. Alright, Matt, let's talk technology here. We know we've it's kind of gotten a little bit under the radar in terms of performance as people have been rotating into some of the cyclical names on the reopening. But for me, for I kind of feel like you can't take your eye off the technology ball because that's the long term future in our next guest is an expert.

Why do I say expert? Is I remember this guest when she was a young analyst as I was back at Pain Webber way back in the day. We're talking to eighties man, So we go way back. Erica Clark Technology Equity portfolio manager Jennison Associates, one of the best firms on the street for a long time. Erica, thanks

so much for joining us here. Um, I know you don't remember, but again, we started way back in today at Pain Webber you were doing technology there, I was doing actually transportation, but Paul was wearing suspenders with slicked back hair. Absolutely, that was the day of Gordon Gecko, so we were doing that. Erica talked to us about

your view of technology. Where should that be in the average investor's portfolio, because it had been such a driver for portfolios really since the financial crisis, But let's take a little bit of a back seat recently. Well, gosh, thanks so much for such a warm welcome. UM, I'm delayed to be chatting with you today. And you know,

technology is really, I think the place to be. And what's interesting from my perspective is that every company has become a technology company, whether you're a transportation company, whether you're a consumer company. Every company has to use technology today to be relevant and disrupted in the marketplace. UM, and those that are not effectively using technology are not

keeping up. And we see this time and time again, UM as we meet with companies that the companies that are really reaching out to use technology do tend to be share gainers and disruptors and have greater positioning in

the marketplace relative to their peers. So UM Peter Oppenheimer last week, I think in a no doubt of Goldman Sachs said that this disinflationary secular trend that we've been watching for the past couple of decades has contributed to a concentration and narrow in a narrower group of these kind of must own stocks. We all know what they are right, and there was a similar group in the in the in the seventies with the nifty fifty UM, but that this kind of leadership might change if we

see a secular change towards an inflationary environment. What do you think about that? Well, first, I would say I don't think that there has been any change in our belief that technology is the ultimate inflation fighter. And I think there's two real legs behind that. One is that technology does drastically improved productivity. It helps people do the things in their lives that they want to do more

efficiently UM. And then secondly, I think that the cost side of the equation continues to be brought down by technology, whether it be just bring it down the cost of inputs or even labor. So for example, we've seen the elimination of the broker value in so many different sectors, whether it be buying a plane ticket, planning a trip, finding a taxi or getting a ride share UM, or even finding someone to do small jobs owns your house.

You're able to really price those out using technology avenues UM, and that ultimately does bring down inflation. So, Erica, where are you and your team doing the most work here? Where do you find the most opportunities the most value in that text stack? Well, you mentioned before that there were the bigger caps names and then you know one, and how does that relate to some of the smaller names.

I think it's better to look at the end markets and find opportunities there, and I would draw your attention to three that I think are particularly important. The number one, I would say would be artificial intelligence. And what that really is is looking at big realms of data and being able to quickly identify trends within those big realms of data. And that can be using everything from cybersecurity to identify security breaches to drug companies that are looking

at trend is in data to find new drugs. UM. You've seen some of the big drug companies come up with drugs much much more quickly than they have in the past by using AI. So AI is artificial intelligence is one of the most important sectors to look at right now. I would say the second is e commerce. We're still at a very early phase and e commerce and all the digital payments associated with that and the

advertising opportunities associate with e commerces. That's still a very big global opportunity with many companies position to do very

well in that segment. And the third segment I would mention would be energy efficiency, not just utilities moving away from using coal to alternative energies, whether it be solar or hydrogen, but also the actual appliances, whether they're used in the home or in the office or in any kind of commercial space, moving to more efficient ways of using energy, to bring down ergy costs, by using sensors,

by using robotics. These are the areas that we see as having the best long tails for growth over the next decade. Erica great to get your take on tech. Erica Clower is technology equity portfolio manager over at Jennison Associates. Talking to us about really the stocks I think that we all know and seemingly everyone owns and everyone thinks of when you when you talk about the finishing over the last nine months, though it's they've kind of fallen

a little bit below the redar screens. People have been playing the reopening trade, but man, the long term growth story still there is. Erica said, yeah, absolutely great to get your take. Erica, thanks for joining us. Hoping get you back again. This is Bloomberg after the closed. Today the Federal Reserve will release the results of its stress tests, and you think about the financial crisis coming out of that.

These were really really big deals and I think they're still kind of important because it goes to the issue of returning cash the shareholders, and these stress tests are are pretty important. So when we talk about anything on the banking front, we go to our expert. That's Alison Williams. She's in a senior banks analysts for Bloomberg Intelligence. He covers all the financials. She has for decades, both on for Bloomberg Intelligence and then before that Morgan Stanley Investment

Management in New York, where she was an analyst there. Allison, what are the key things here that bank investors are looking for when the stress tests are released? Here for the clothes today, So the key thing we'll be looking for today along with um other investors and analysts. UM, are you know, what are the stressed capital losses in

the test? So they these tests have evolved and UM basically what happens with the test now is UM the regulators look at what that stress capital losses, UH, you know sort of bucket is, so basically, how does your capital change from today to the worst point right? And then based on that they set a requirement and then as long as you meet that requirement, you can basically,

you know, do as you like. So it's a lot different than in the previous test where the banks had to ask for a dividend and a very specific buyback program. And in fact, we already have buyback programs across several banks. So really what we learned today is, you know, will banks be able to execute on those programs? UM, and we may get you know, sort of a signal in terms of how much capital they can return from here. How much that was gonna be my question? How much

do we expect? I think I saw a number on a hundred sixty billion dollars yesterday, Yeah, so I think um so. Arnold Cucuta, who covers the credit side of the banks UH, calculates about a hundred and fifty billion of excess capital um. When we look at that amount UM, we agree with his calculation obviously, but we would also note that when we look at what Dember, you can have disagreements' work is very good. We we can we can disagree, but we actually agree in this in this instance.

So I think we agree on the access capital and I think we also agree that if you look at the December tests, UM, you know, Goldman performed much better in that test. Morgan Stanley perform much better in that test. This test is going to look a bit more like that test in the sense that we're going to be much it's it's a much harsher test of things like commercial real estate and credit cards. So that's that's not

sort of where those banks are focused. And if we do mirror that test, Goldman, Sachs and Morgan Stanley are both going to see their UM you know, requirement drop and so they should be able to return capital shareholders. And and again, so Arnold and I aren't the only ones thinking this. I think a lot of people are expecting Goldman to get some relief, and so if they don't, that would obviously be a negative surprise. And and by the way, Goldman and Morgan Stanley should both get relieved.

It's just a little bit more critical for Goldman because Morgan Stanley has much more excess capital. So elsewhere are you know, dividend yields now for some of these big banks and where do you think they should be? So that's a great question because we really think that, um, you know, Bank of America is sort of going to

set the standard, if you will, going forward. So Ever, since the Global financial crisis, we've had banks sort of marching up their dividends and you know, someone like Wells Fargo had gotten to sort of payout right, and that was similar to what we saw prior to the Global financial crisis. However, Bank of America said, you know, we're gonna walk up our dividends, but we never want to cut our dividends again. Uh, you know, and we've done

the work in UM. Dividend payout looks to us like something that's you know, on the safer side of things. And what we saw on this UM pandemic, we did see limiting of dividends and we did see Wells Fargo have to cut their dividend. As the fed UM basically set a precedent by saying you know what and until, you know, until things get better. We appreciate that you've cut the buybacks, but we also want you to limit

your payout too for quarter trailing earnings. So Wells Fargo had to cut UM, and so I think and a lot of regionals. You know, it was also a little bit of a nail bier, but with all the stimulus

and the fast recovery, things turned out great. But we think that banks are going to sort of factor this into their forward thinking in terms of, you know, no one wants to be in a position to cut their dividend, and so we do expect Wells Fargo is gonna have the biggest increase, right but they're coming from you know, sort of their cut levels, so they're still catching up a little bit. So still healthy dividend deeald Um. You know city group we think could could have a three

percent yields um. You know some that's sort of similar to that's basically where they are today. Um. We don't think that's going to change much. JP Morgan City smaller increases UM Morgan Staion, Goldman Sachs. Maybe walking it up a little bit UM to get closer to that, you know, to Jewish percent level. JP Morgan, by the way, is the only bank that's a little bit over that um. And we expect again just sort of a nudge up there. Now prevalent are buy backs in the banking industry compared

to other others. And I noticed that, you know, share buy backs for the overall market hit a high I think two eighteen, but they've come down substantially since then. Does that bounce back up after this? So keep in mind that these banks um basically we're very conservative with capital um. Again, we talked about sort of the plausas during the pandemic, so they have access and so and and also at least, you know, the bigger banks that

I cover somewhat limited in their acquisitions. You know, they they because of their deposit bases, they can't go out and by other depository institutions they have done things like by asset management and the like. But we do expect that payouts for the big banks, the big universal banks that cover, are going to exceed a hundred percent for a period of time as they're working down some of

that excess that they've built up. I would say that again, a difference in this year's test is that a lot of regionals don't have to participate, but we do expect those regionals to pay over again, be a little bit more cautious. On the dividend side, UM Herman Chan has said that he expects the third to increase their dividend, but maybe not anyone else. And then on the trust banks covered by Paul Goberg, he's also looking for over a dent capital return. So I think investors are are

are pretty bolish looking at the year ahead. But by the way, do you keep your eye on European banks because it's been a hot topic over the last few weeks for investors, and you know, the idea is that they're going to raise payouts as well, which could bring them close are to UM the kind of games we've seen for US banks. But I look today at UH share price to book value, and US banks are trading it.

You know, European banks still six, right, and so I think UM so so again, the banks obviously in the US have done very well. UM City Group is still trading below book values, so we expect they're gonna skew more towards UM buy backs. UM in general more towards buy backs. But on the Europeans. I would say so

two key things. So one, what's interesting in the stress test this year, It's going to be the first time that banks like Credit Suite and Deutsche Bank don't have to worry about a qualitative objective and so that's interesting because we've had articles issues at Deutsche Bank. So I think they're breathing as of release that they don't it's an incremental risk, but one they don't have to worry about, all right. Of course they have other issues as well.

You mentioned Arch and Credit Suites. UH is definitely among the most read stories every day here in Europe. Allison Williams, Senior bank analyst. This is Bloomberg. 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 and on Fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio.