Twitter Faces Slippery Slope With Fact-Checking: SocialFlow CEO

at Twitter after it began fact checking his tweets. Lots of questions in the marketplace. That's knocking in part, knocking down the nast back off about one point eight percent today. The question is can the president do that? Jim Anderson, CEO of Social Flow, based in New York City, has some answers for social Flow and full disclosure. Social Flow is a platform used by Bloomberg for social media purposes. Jim,

thanks so much for joining us here. So an interesting response by the President to the fact checking that was instituted by Twitter. I guess the basic question is what can there does it really do well? It's a great, great question, Paul, I mean there's so much to unpack

in this story. I guess the first thing I'll say is that Twitter's labeled of President Trump's tweets were around the tweets about baloting by mail, not the conspiracy about that Joe Scarborough having had something to do with the death of a former staffer. And and that's an interesting distinction, because so much of the energy yesterday was around, oh goodness, this is a terrible tweet. How could President Trump do this? What's Twitter gonna do? And and notably, they did not

do anything. They didn't play for that tweets, they didn't remove it, they didn't do anything. They instead focused on an area around mail and balancing, which is its own set of controversy. So that's the first thing I would notice. I think they felt like they were on more solid ground with the mail in balloting than they were about the Joe Scarborough, which I'm struggling to understand. What Twitter is.

Is it a media platform? Well, it is a platform, I think, you know, you sort of wrapped up in that question is what is a media platform? What is the company? And certainly you've seen Facebook and Twitter both say they are not media companies, and they certainly don't fit the traditional definition. You know, they don't. The FCC doesn't define them as a media company. They don't print a newspaper. But that being said, those are both amazingly

successful advertising sales platforms. That's not how we normally as consumers think about them. We think about the Twitter or the Facebook experience. But you know, they derive almost acent of their revenue from advertising. So if you define media platform as one that sells advertising, well then they certainly fit that definition. I think part of what we're all wrestling with is that they're not They're not like anything we've historically had when it comes to radio and television

and newspapers. There's there's something really different. So I guess it kind of makes a question, what, ultimately do you think the responsibility is of the facebooks of the world and the Twitters of the world and the other social media companies who in large part just you know, it's user generated content. Do they have a responsibility to fact check? Well, they have a responsibility to society, I'll say responsibility to

fact check. You know that the challenge with fact checking is, you know, we would all love to think that facts are wonderfully objective things, and in some cases they are right. It's it's Wednesday today in New York City, at least it may be a different day, and if you go across the date line, etcetera. But we're not talking about

those kinds of objective facts. We're talking about conspiracy theories and in you into and all you really need to do is turn on any of the other more traditional media, turn on television, and depending on the channel in which you consume your news, you're gonna get very very different answers. So I think it's a very slippery slope for the

platforms to start getting into fact checking. And I think, you know, it's it's tough to understand how yesterday's decisions by Twitter to label two of Donald Trump's tweets is going to turn out well for them. I mean, you already saw the blowback from him and from his campaign, and I suspect they're going to get a tremendous amount

of criticism. Um And so it's a it's almost a no win situation for the platforms to say, hey, I'm I'm going to be the one who does the fact check and I'm going to label or or remove content

doesn't meet my standards. Well, and I guess the other side of this story is Facebook, And there was a report in the Wall Street Journal yesterday about how even Facebook's own experts found that, yes, the platform has actually enhanced divisions in the country and across the world and sort of created an increased partisanship, and that the platform could do something about it, but chose not to because ultimately it drove traffic. That was a business decision, and

it seems in contrast to what Twitter is doing. Should Facebook be rewarded for that, at least with respect to shares and with respect to the way that it's perceived, given the fact that it does have some social responsibility, but it also has a responsibility twits shareholders. Yeah, it's interesting.

I read that same article and I've I've seen commentary about that, and you know, I think anybody objectively, you don't have to be inside of Facebook to note that it can be used for divisive topics and tends to, at least in some cases and ease polarization. Um, you know,

saying that they did it curry for their business interests. Yes, they do have an obligation to their their shareholders, but I think there's a missing piece of that, which is once they start doing that, especially if they talk about how they're going to start policing speech or fact checking or uh, you know, removing contents. I mean, they's a remarkably splicy, slippery slope. And again I'm going to go

back to the no win scenario. The minute they start talking about doing that, they get highlighted for being inconsistent, being unfair, manipulating elections, you know, all kinds of things like that that, yes, will hurt their business, but also I think they're just a very untenable position for them, and I think that's one of the reasons why you saw Facebook go down the route of creating effectively what they like to call their Supreme Court um, which is

some a non Facebook controlled body that will help them be the sort of the arbitr of these types of decitions. But like any supreme court, like our U S. Supreme Court, these this arbitration and these decisions happen well well after the fact. I mean these we're talking years down the road, I would imagine, before these kinds of things get hashed out. So, uh, Jim, I mean TV extent, there is some movement to regulate

some of the social media platforms. Is it something that would come from the Federal Communications Commission or the courts? How would it even be affected? Do you think, Yeah, it's a great question. I mean you're talking significant jurisdictional issues, but I don't immediately jump to the jurisdictional issues. I've gone to the politics of it. Right, So it's politically, uh, sort of advantageous for President Trump right now to talk

about regulating the platforms. But you know, historically Republicans and Conservatives have not been heavy on regulations. So you sort of getting what the headlines are, which is, you know, somebody saying we should regulate these platforms, and then the devil is truly of the details. You know, do you really expect a Republican president of Republican control Senate, got

a Democratic House. Do we expect you know, sort of bipartisan consensus to come uh, in terms of how those platforms are regulated, I will say, I mean it is interesting they get criticized from both fines. Right, You've got Democrats criticizing these platforms for sort of one set of issues, Republicans can criticizing for a related set of issues, coming

at it from very different signs. So there is bipartisan um agitation, for lack of a better word, whether that emerges in consensus, in which agencies, or how that regulation will play out. I think that, you know, it's going to be years in the making, and probably antitrust is the most likely issue to really come to the four at least for facebooks, not so much for Twitter. Jim Anderson,

thank you so much for weighing in. Jim Manderson, chief executive officer of Social Flow in New York and just for full disclosure of Social Flow is a platform used by Bloomberg for social media purposes. Interesting to see the reaction in shares on Twitter, the response to President Trump's request, or basically his his criticism of Twitter. Some people were saying, we'll sell Twitter shares, and then other people were saying

quickly that they would buy them. It became a partisan issue whether you bought or sold Twitter shares, and I guess that the conclusion today, Paul has been self for now. I guess that's right. Yeah, interesting, it would be I think just really a can of worms here, so, uh, you know, I think it's a really difficult thing to manage and too for these social media companies free speech.

We are approaching the summer and then the fall when students return to college campuses around the country, except that this year there's a high likelihood that they will not be doing so, which raises a question of whether parents really want to be paying and students themselves want to be taking out loans to pay colleges when they cannot

get the full college experience. Joining us now to discuss this and what the future is for higher education in general is Robert kelch In, Associate professor of the Department of Education, Leadership, Management, and Policy at Seton Hall University, as well as Janet Lauren, Endowment's reporter for Bloomberg News. Robert, I want to start with you, how big of an existential threat is COVID nineteen and the likelihood that many campuses will not open in the fall to higher education.

It's a serious risk to many college campuses because students may not pay as much intuition, and colleges that have students living on campus won't get that incredibly important revenue from room and board. So, Jennet, let's put this into maybe financial perspective a little bit. Here. A lot of this big universities with multibillion dollar downmands, they're likely to be able to weather this pandemic risk better than others. But I'm thinking about the secondary and even smaller colleges

and universities. How at risk do you think they are from an economic perspective. Well, before we get to the second tier colleges, just don't forget that. Harvard also said that they all they have a one point two billion dollar budget deficit over to some two um academic years, and Northwestern also talked about its budget deficits. So it's the biggest colleges with the biggest endowments are not necessarily immune. Uh. These are the schools that quickly paid out room and

board refunds. Uh. And we've also seen that colleges have had to cancel somewhat lucrative summer programs which helped fill their campuses. So that's one step. You know, most colleges are not going to be immune to anything. And certainly the second tier colleges UM, you know, they're they're having to think about who's going to be coming to fill

their classes. As the top tier colleges, you know, take other kids off the waitlist, the second tier colleges may find that the kids that they thought were coming in in the fall may not be there. And certainly, tuition revenue is a huge part of most college budgets. Certainly the wealthiest colleges like a Princeton Amherst College, more than half of their budgets come from endowment um investment income. However,

most schools are very reliant on tuition to make their budgets. Robert, there's a question here, how much is this going to be a temporary shock for universe these particularly the ones that have more robust endowments and are better weathered or

sort of hunker down to weather this storm. And how much does this shift the whole conversation around higher education where we've seen incredible inflation of the tuition bills over time, and you mean, this is a lot of people saying maybe we need to rethink this and some of these colleges don't need to exist in the short term. This put some incredible pressure on colleges to hold a line on tuition even as they're spending more money to get

college campuses ready for students in the full world. Will many colleges go out of business from this? The answer is probably not that many it'll be small private colleges serving a few hundred students, but most public colleges will go on even if they're hit hard by losses and state funding, and most midsized private colleges will find a way through, even though it would be a difficult few

years to come. Jennet, we've seen some big, big universities, UM, you know, Harvard, Brown, m I, t H coming to the bond market. How how has higher education generally been received in the credit markets and kind of how's the outlook today for some of these institutions. Well, these schools are still very highly rated, they have very high demand, and they're taking advantage of low interest rates UM, and there chances are the the institutions you just named are

going to continue to be around for a very long time. So, you know, I think there's still been demand for that debt um, you know, considering where their market position is. Robert, do you think that online education should cost the same amount as the in person type? Online education will end up costing about the same amount unless a college can get up to massive scale because you're still interacting with faculty.

Good technology is expensive. You don't have some of the in person facilities, but the tuition price ends up typically being about the same for good online versus good in person education. That's kind of shocking to me because I would think that the classroom, the the amount of people that could potentially be a participant in the online course, the overhead seems like it would be a lot less.

Why am I wrong? Most of the overhead here is people, And if you want interaction between students and professors, you need faculty to do that, and good technology for learning management systems and working with students online is also expensive. Although there are returns if you can get large class or large universities doing this, like an Arizona State, but most smaller colleges doing this for one or two semesters

just won't see that economy of scale. Jenet. Can any of the I'm thinking more about the private colleges and universities. Can they expect any support in terms of fiscal support fiscal stimulus UM the government. Well, we've already seen UM universities such as you know, Harvard, Princeton, Stanford saying they were declining, you know, to accept their share of federal stimulus stimulus money early on. You know, mid a lot

of criticism. UM. I also did a story about the p p P money that some uh, small colleges, we're not sure if they were allowed to apply for it because of the requirement on workers and their student student workers had been counted even though you know they had all gone home. UM. So you know, depending on if the smaller colleges um do uh you know, meet the threshold for employees, they could get some money from the p p P, you know, because they really are small businesses.

Robert Kelchin, thank you so much for joining us. Robert Kelchin, Associate pressor, Professor, the Partner of Education Leadership Management Policy at Seton Hall University UH in New Jersey and China. Lauren a Downance reporter for Bloomberg News on the phone, really fascinating discussion there. I would think I kind of agree with you, Lisa. I would think just intuitively, there would be a discount for online versus being on campus. Yeah, I'm going to pray for that. I mean, it sounds

like that's not going to be the case. And honestly, it's good to have people paid for what they offer. Still, as a parent, the idea of having a little bit of deflation in that intuition payments not the worst thing in the world. I do want to bring you this headline crossing that the US will not certify Hong Kong's autonomy. That's basically throws into question whether that region will continue to get special trading status, sort of first step to

dessertisfying them again. Paul, though this the question in my mind is who will that hurt more? The U s for Beijing, the people in Hong Kong. Yeah, we're coming back to that discussion that that we've had prior to the pandemic. It's about the trade wars and who really gets hurt the most. Who can weather a disruption in the relationship more the US are China. Looks like we're

about to find out on a bit different front. About a month ago, Paul, everyone was talking about the transformation in the way that we've viewed society on the heels of COVID nineteen, and that particularly applied to the auto industry, where sales have plunged and are expected to plunge by twenty per cent. Is that really accurate though? How much will we see permanent changes to the auto industry as

a result of the pandemic? Kevin Tynan has been following the senior autos analyst for Bloomberg Intelligence, Kevin, what's your take here? Are there permanent changes they're going to take hold of the auto industry as a result of the pandemic? I think so? Um, you know, but I don't think it's structural in the way that two thousand and eight two tho nine was. I think there will be improvements to processes, and whether that's at the manufacturing level or

at the retail sales level. That that I would say this crisis sort of accelerated. But but you know, in terms of a tear down and rebuild of the entire automotive process from the build to the sale, you know, I think that's a little bit overstated, So Kevin, I you know, one point before the pandemic, there was a reasonable discussion about whether we as a US society had reached peak auto, you know, with Uber another ride sharing companies, UH, the fact that more and more young people were moving

to urban centers where they can depend more on mass transportation. There was really a debate about peak auto in this country.

Where do you think we are as it relates to that, How do you think about long term auto demand in this country, Yeah, I think, you know, and looking at the numbers in terms of vehicle registrations by state, which is something I was just you know, I was just compiling that data, and you know, there is a definitive trend to less private vehicle ownership and that's over you know, a decade or so. Um, you know, in terms of the fear of mass transit or the fear of ride hailing.

I feel like, you know, there's probably some temporary effect of that, but at the same time, I don't think you're gonna get private vehicle ownership and storage and repair and maintenance and insurance for people that live in urban areas. It just doesn't make sense, you know. And I just looked at it total cost of ownership on a new vehicle, which is roughly about thirty eight nine thou dollars over five years all in on the cost is about nineties

thousand dollars. So, uh, you know, it just doesn't make sense for for that sort of structural shift to private vehicle ownership for a lot of cities, uh and people. So so maybe a little bit and maybe for a short term, but over the longer stretch, I think that move away from vehicle ownership is probably going to continue. Greg, Jared has a question for you. He wants to pick up a cheap car on the Hurts liquidation that we've all been expecting, given the fact that they've filed for bankruptcy.

Are we going to see that? Yeah, you know, and I've looked at this and I don't think and I get this question a lot obviously since Friday. Um, Look, I don't think it affects the new vehicle market. Right. These are off rental vehicles, so maybe there's a little bit of an impact and residual value in the pre owned market. But I would even argue that the pre

owned buyer. Uh maybe there's a small subsegment or a niche of that market that may be an off rental buyer, but pre owned buyers are probably going to gravitate more to the off lease a little bit higher quality, a little higher technology, better equipped vehicles than you know, sort of this rental car uh dump. But I see that, as you know, the lowest end of the of the pre owned market where buyers would be. So I don't see it causing a ripple all the way up to

the new vehicle market. Kavin just give us a sense of the relative health from a bounce seat liquidity perspective of the big US automakers right now. Yeah, liquidity seems to be okay in terms of how long we think the downturn less and again very different than oh eight oh nine, which started as really a banking crisis and credit markets were frozen. You couldn't bet a mortgage, you

couldn't get a car loan. This is not that the automo makers couldn't take down any you know, any additional liquidity. So this isn't really that And I think, you know, we're looking at you know, the consensus for May is already back to a ten, which is funny almost to say, but from you know, in eight six to a ten in a month, if that's the beginning of the trend of recovery, uh, it would seem to say that the

worst is behind. So if this is the inflection point which was April, you know, then I would say that that there should be no issues going forward in terms of liquidity on the balance sheet for for the large automakers. Kevin, thanks so much for joining us. We appreciate that update on the auto industry. Kevin Tynan, He's the senior auto's analyst for Bloomberg Intelligence. He's been covering the auto industry

for decades at least. It's just some anecdotal evidence. I was uh meeting with a buddy mine last weekend who manages an auto dealership, and he kind of confirmed, uh, what Kevin was saying that kind of that March April time frame was the trough there because they weren't able to even have anybody into their dealership. Now they're booking appointments. Uh, and and these said sales are running about of normal, which was a big improvement from that March April time frame,

So hoping that can continue. There is some pent up demand out there. He was saying, people were buying cars, they are leasing cars, uh, just at obviously reduced rape. But in terms of the trough, it seems to have

been hit in March and April. So you know, if that is in fact the case, maybe the auto industry had kind of weather the storm here and may do a little bit better than say, uh, you know, some of the cruise lines or some of the airlines of some of the other consumer facing businesses that likely will have to deal with a longer rebound than maybe some other industries. Well, do you do sports gambling? I do not. Okay,

that doesn't surprise me. Evidently the people who do a sports gambling have migrated over to the stock market, and we've heard this reported increasingly. There was actually a great story looking at that in the Financial Times with some data about brokerage accounts and what we're seeing, which really raises a question about the sentiment in the retail sector. Sure, the betters, but also mom and pop investors who are looking at the wild swings and wondering what to make

of it. Joining us now, someone with a front row seat to that sentiment, Julia carl Carlson, founder and chief executive officer of Financial Freedom Wealth Management Group, joining us from Newport, Oregon. Julia, we're so glad to have you on the show. Really important to get a sense of the retail component, especially since a lot of people are saying that this aspect of the market is accounting for a greater proportion of the sentiment right now than others.

Can you give us a sense of the retail client that you deal with and where their mind is at right now. Yeah, thanks for having me, Lisa and Paul. You know clients what I am feeling are calmer now. And I think this definitely is perspective on where you are at in the country. We are in organ it's rule and I think given the magnitude of the rally that's happened off of the March twenty three lows, clients

are actually pleasantly surprised looking at their account values. And I think some of the some of our clients that chose not to look back in March and we're you know, either fearful or just saying I'm gonna just not watch. When we say encourage them to go in and look, it's really not that bad. They do look and they're like, wow, I am surprised. So we are seeing Um. I would say the best word for it is a sense of

calmness out there. It's interesting enjoy a sense of calmness here in the financial markets with Lee, Lise and I often comment that you know a little bit of surprise in how the market has rebounded off of the bottom um given some of the dire economic news that we get in terms of jobless claims and GDP princes and so on and so forth. Has your clients and are they were they on kind of the risk curve here.

As you talk to them, I will are they willing to take take on a little bit more risk, maybe shift from bonds into equities, or maybe get a little bit more further out on the risk curve for some of their investments. Well, I don't know if we I would say adding risk at this point, but we definitely when the market was um low, we were rebalancing, and so they were they and putting into positions where they were putting them the position to capture more of the

upside as it recovered. And so I would say, no, we're not adding risk because most of our clients are in retirement. They want they've built their wells, they want that more moderate portfolio that aren't going to be, you know,

subject to these wild swings. And although we do feel very confident in the long term opportunity and equities that that those remain attractive, especially compared to the alternative like cash or fixed income, we're not we're not necessarily willing to say let's add risk at this point because most likely there may be a pullback here in the shorter term. I wonder if sixty forty still works given how low bond fields are Are you still recommending that kind of

allocation to bonds as a hedge. Well, I would say yes, we are in line in alignment with a sixty forty, although we don't expect a lot from that forty moving forward. It's more for that stability and peace of mind part of the portfolio. So joy we saw bank Rate came out with a study recently that about of working or recently unemployed adults with retirement savings have either tapped into or planned to tap into the retirement funds as an

immediate source of income because of the pandemic. Have you seen that from your client base? You know, we haven't. When I read that statistic, I was wondering, what was the statistic before all this happened, and but it sounds like it's it's in regards to you know, the people that have lost their jobs or have been um on unemployment. I mean, for the most part, even our clients that

are still working, they're spending less. And our clients that are in retirement are actually stopping their r m d s because they can, and they are reducing that monthly income just because they're not traveling. They're not out, uh, spending the money that they were, you know, three or four short months ago. Just looking forward, What are you looking for in order to advise your clients perhaps to take a little risk off the table and temper their

expectations for the year. Well, I think that the amount of stimulus that's come into not only now in the US, but worldwide. You know, I think that that is what we're seeing in the in the stock market rallies and I but we're also I think pricing in that we are going back to work, that we will get a vaccine. We're pricing in all of these perfect scenarios that um, you know, there's going to be something that rocks about

and and comes in and and has a pullback. So I we always recommend that you stay invested per your risk profile, per your or um financial objective, and wouldn't necessarily say let's add risk um because there is still uncertainty and how this will all play out. Julia, thanks so much for joining us. We appreciate your perspective. Julia Carlson, founder and CEO Financial Freedom Wealth Management, located in a beautiful Newport, Oregon, right on the coast. They're beautiful part

of the country. Kind of saying, stay the course here. Um, you know, the rebound has been pronounced coming off of that initial sell off, but the joy was suggesting, you know, stay the course. There's certainly could be some more volatility, but certainly stay invested. 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 pt Sweeney. I'm Lisa

abram Woyds. I'm on Twitter at Lisa A. Bramwoits one before the podcast, you can always catch us worldwide. I'm Bloomberg Radio