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Today, we'll look at that fragility of the commercial mortgage backed securities market, as well as the impact that business leaders can make by advocating for safe and secure elections. Plus, with the US election just a few days away, a look at those sway US presidents have on fuel economy standards for cards, but first tech earnings. This week, Alphabet reported earnings that surpassed analyst estimates, with their cloud division seeing a thirty five percent rise in sales, while Meta
warned of a worsening AI losses. Bloomberg Intelligence senior tech analysts Man Deep Seeing breaks down the reports.
Search, Cloud, YouTube. These are three separate businesses doing extremely well at scale. I mean, double digit growth for search business is really stellar when you think of all the pressure they've been facing, you know, when it comes to new entrants like CHATGPT and Perplexity and whatnot. And everyone is of the belief that they would take at least some share from Google, at least in terms of AD revenue. Google hasn't lost any share. In fact, it's a very
healthy growth at their scale. And YouTube look fifty billion plus revenue run rate seventy thirty split between subscriptions ads is seventy and thirty percent of subscriptions and subscriptions crew, you know, twenty eight percent. I mean, just think about fifteen billion dollar subscriptions business growing twenty eight percent. That's very impressive. So and we're not even talking about wevemo here. So when you look at you know, all the businesses.
They clearly have a lot going on, and Vemo is a future bet, but something that could be huge in terms of you know, top line.
You know, it's interesting you just mentioned fifty billion of run right revenue YouTube advertising subscription. That sounds a lot like the cable television business, the cable network business. I look at Paramount, Paramount Global, you know, all those cable networks, they have thirty billion of revenue. So YouTube is significantly bigger than some of the largest advertising and subscription German media companies out there. Yeah, in a dozen years, it's just extraordinary.
I mean, you were talking about these massive and sms that Google in Alphabet obviously the parent company has been trying to catch up to the likes of obviously Microsoft and of course open Ai. Walk us through some of those investments and how they're starting to pay off.
I mean, look, in the case of Alphabet, they have huge data center investments simply because they have a giant infrastructure that's powering these big businesses. So there's a lot of internal consumption of these chips. But also the cloud business, which saw a nice acceleration, you know, sequential acceleration from twenty nine percent growth to thirty five percent growth, I would say a lot of that is driven by the
availability of GPUs in their cloud. So I'll be interested in seeing how much of Microsoft GPUs are being used for internal consumption versus what is being exposed on their Azure cloud because in my mind, Google having their own chips is making a difference in terms of their cloud growth. With Microsoft, at least they quantify the AI services contribution being ten billion dollars by next quarter, so that's huge.
Still.
You know, when it comes to Azure, the fact that growth is not accelerating like we saw with Google Cloud, it makes you wonder, you know, if capex is growing fifty percent, why is it not translating into faster Azure growth? Even though thirty three percent is a very solid number, but you want to see that acceleration which we saw
with Google. In the case of Meta and Microsoft, the expectations were higher, and I would say Meta is somewhat different in the sense that they have their all large angrid model, they have their lead when it comes to you know, generative AI, but they don't have a separate AI revenue line like you see with you know, Microsoft or with Alphabet, And that's where you know, if they say, you know, capex is going to significantly increase for twenty
twenty five without really quantifying how significant it will be. Whether it's going to be twenty percent which is the consensus number, or thirty percent of fifty percent. Nobody knows, and that's what I think created that uncertainty around Meta's
capex spen. And we saw what happened in three qu of twenty twenty two where they had a very similar print, but they actually quantified that significant and you know, the stock dropped twenty percent after that, so clearly there is some nervousness and uncertainty around their cap expin How.
Is AI impacting John Tucker justman's search results, right, I mean.
Just the nature of search is changing in the sense you can ask you know, a lot longer queries. The prompts can be infinite and length. You can you know, have a video or an image prompt. It just doesn't have to be text. So that's what Google called out, that the queries are getting a lot more complex in
nature and users are actually engaging with it. So it's not as if, you know, that's driving them to some of the platform users want to use what they call multimodal search, which is a combination of texts, videos, and images and audios. So that's why these lms are so powerful, because they give you that innate capability to search in whatever format you want and you can just throw it in that search box. So that search box is getting a lot bigger and a lot more complex on that Google page.
Our thanks to Bloomberg Intelligence senior tech analysts Man Deep saying sticking with earnings, ELI Lilly lowered its guidance due to lackluster sales of its weight loss drug zet Bound and diabetes drug Montro. Each missed estimates by nearly nine hundred million dollars. For more on the drugmaker shocking results, we were joined by bloomerg Intelligence director of Research for Global Industries and senior pharmaceutical analyst Sam Fazzelli.
When they reported we got a miss, right and I'm looking at it right now. They missed by six percent on revenue. That is not what do you do when you're a sixty pe company, right, It just that it is the world's not forgiving enough on that. Just breaking that down further, that miss was two drugs on Jarro and zep Bound, and those are the drugs that everybody talks about. This is the the obesity drugs that are on the market.
They missed.
Why did they miss The company said that it's because there was an inventory d stocking going on at some wholesalers. So people go, wait a minute, you're saying to me that demand cannot be satisfied, supply were supply limited, So why is there an inventory issue in the middle here? And of course that's what led to the question of oh my god, are we overestimating demand?
Here? Is the company overestimated it? Why? It's the world?
It sounds like with the twelve different forms of the drugs that they have.
That no one in.
This early launch phase we can call it the early launch, right, given that it's been a couple of years, is really able to manage and work out what they need to have as inventory. Because in such a massive product, you're going to have an impact on working capital, even for the wholesalers. It sounds like that that's the issue that even Lily themselves can't necessarily forecast here, right, I mean the actual details of how much of each product has made.
If that's true, then and I think you get a little with of that in the fact that Folier guidance wasn't dropped by as much as the miss that at least currently they are optimistic about picking a whole bunch of that backup in the Q four that you should not worry about. Demand you talk to any doctor you want, do they say, oh, I have no patients left to asking me for he set bound or we go viaor whatever.
So I think that's what's happening here. The difficulty in managing and thinking about how to manage your inventory.
Something I wanted to pick your brain about was when it comes to knockoffs, because we saw a huge drop in hymns in hers earlier this month, so they were so they previously were allowed to manufacture copycap drugs when they're deemed in short supplied by the FDA, But the FDA at that time said when it came to Zebound and Manjaro specifically for Eli Lily, they weren't shortage anymore.
So that's why you saw that drop there. But they still when it came to a Zempic and Wegovi when you think about Novo Nordisk, they were still able to offer compounded version actually versions of those, So I'm wondering when you think about Eli Lily versus what's happening with Novo nordis, how does that kind of come into play when you're thinking about when it comes to sort of the knockoffs and the copycat type drugs.
Yeah.
Sure, I mean I'm not even sure that people have stopped making compounded versions of zep pound and Manjara because the FDA kind of reeled back a little bit and said, oh, we're going to actually look at this again.
So I don't think that story is finished.
I think that these folks are some folks are still able to supply those from a compounded pharmacy perspective, So you know that is that's that's a lot. That's a root that the FDA does provide to people. If there's a shortage of a drug and someone else can.
Make it, well let them do it.
The interesting angle, of course, is that a whole bunch of people who are taking off the compounded pharmacists are probably paying less, and therefore if they're forced to go and take it from a prescription, they may have to pay more out of pocket. So that's not going to be a leaving a particularly good taste in folks. Mouths once that this actually happens, but it hasn't happened yet.
So and they did say on the call that this is not because there's enormous demand being fulfilled by compounded pharmacies. It's literally to do with that inventory management issue.
Where what are the companies saying Sam about getting this in an oral format? I think that might be one of the next big I guess mileposts for this type of treatment.
Yeah, I remember, Paul, there's already an oral form of this. It's called Robels's. It's from over NOTICEK. It's just a tough drug to use because you have to have it within about half an hour of eating. You can't take it too close or too far from an eating because you need an empty stomach.
Before you take the drug.
And it's a big dose and maybe the side effect profile isn't as great and the weight loss isn't as great. So people are trying to develop oral versions of these drugs, but also oral drugs that are like normal drugs, small molecules that they can swallow as a pill.
Once today, So that's coming.
So what do you think shareholders need to watch for next when it comes to especially after its outlook disappointed.
I think we need to see how Q four does. So let's hope that that they're current guidance. At least they meet it, maybe beat it, that would be nice. The issue is then we move into Q four. There's an interesting result from a clicker trial that's coming up. They've done this before. They're comparing zep bound with wig V and I suspect that they're hoping and that that data suggests that they might. They will show that it
has better weight loss. Whether the side effect profile would be better or a different time will tell, but that there are not many farmer companies do these type of head to head trials.
Did it take some Yeah.
Yeah, no, I just wanted to get real quick.
What's the latest thinking on the size of this market?
I know you guys have done a lot of work on this.
Yeah.
I think my key's latest numbers that are at ninety three billion. I don't remember exactly. It's bag well out of nothing exactly.
Our thanks to Bloomberg Intelligence, director of Research for Global Industries and senior pharmaceutical analyst Sam Fizzelli coming up on the program. The next US president will wield major power in shaping the future of electric vehicles. We'll find out in which direction each candidate wants to go. You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in dipper research and data on two thousand companies and one hundred and
thirty industries. You can access Bloomberg Intelligence via b I go on the terminal. I'm Paul Sweeney, and this is Bloomberg.
This is Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.
I'm Paul Sweeney. Alex Steele is out this week.
Each week we look at research from Bloomberg and EF previously known as New Energy Finance. They're the team at Bloomberg that tracks and analyzes the energy transition from commodities to power, transport, industries, buildings, and agricultural sectors. This week we took a look at the overall EV market and the sway US presidents have on fuel economy standards for cars. For more guests, Thost, Billy Lipschultz, and I were joined by Corey Kantor b n EF, lead US electric vehicle analyst.
You first asked Corey, how would the EV market change under each presidential candidate?
Everything from federal fuel economy standards. That's the kind of miles per gallon of new vehicles which electric vehicles help automakers achieve. To the implementation of the Inflation Reduction Act, So even though the law has passed now over two years ago, you're going to see those loans and grants from the federal government impacted all the way up to the seventy five hundred dollars Clean Car ev tax credit that people know and love in some cases.
So depending on who wins.
Obviously with the IRA, you're going to need Congresses input on that, but there are things that the Trump administration could do very early on on the implementation side to make those credits.
A bit more restrictive.
So it's going to be big, but also a split decision could have an impact too if you have, say a Republican Congress with Kamala Harris's president or vice versa, and how.
Does that actually impact the ability for these car makers to sell cars? When I look at targets of Biden administration having a certain number of evs, I'm from California, where they lay out these overly ambitious goals five six, seven years down the road and then seemingly chop them down when they get closer.
Yeah, Bailey, I mean even beyond that, there's been a kind of back and forth between California and the rest of the country for a long time, known as you know, the California Advanced Clean Cars to policy, which aims to have one hundred percent of all new sales by twenty thirty five is electric, eighty percent fully electric, twenty percent plug in hybrid. And so last time Trump was elected, there was a lot of lawsuits, a lot of uncertainty
in the market. Makes it very difficult from an automaker perspective to actually plan. And so these automakers for a long time have wanted both the carrots, which are these IRA kind of subsidies and incentives on grants and loans, and then they'd be willing to take the stick, which is the fuel economy standards.
So we have to see how it shapes out.
But from the automakers that we speak to, it's a pretty confusing policy environment. But given that the globe is moving towards electric vehicles and cleaner cars in general, they have to kind of prepare to move that way regardless, and it's just how quickly in the US are they going to move in that direction.
The Chinese are moving very aggressively. How do you expect them to do outside of China? Will there be market for Chinese evs in Europe?
In the US?
Yeah, it's a really good question, Paul.
And you know, looking at the data which we do at BNEF, you can see Chinese automakers like BYD making upground in places like Brazil, in places like Latin America, in places like Israel, you know where you might not expect to see Chinese automakers. They've been moving into Europe and there's been a pushback with all the tariffs and
back and forth there. I think that's also why the US election does have a big impact, because if there's no kind of counter bailing force coming out of the US, you see what's going on Volkswagen on the European side, it's going to maybe make the road easier for those Chinese automakers on electric to kind of shift into those export markets. Because if Tesla isn't focused on making more affordable EV's, then there's really only going to be one
major player in town. It doesn't mean, you know, that Chinese automakers are going to be the only ones who are making mass evs, but it's a pretty big transformation at the global auto market level, just like when the Japanese automakers came onto the scene.
So I think that's the way I like to think about it.
It doesn't mean that you know, EV's are going to be sold everywhere overnight, but without a kind of other major automaker, that's where I think a lot of these countries are going to turn.
And if we do see tariffs on some magnitude, yeah, what does that actually mean for the market for Elon Musk's Tesla, who he's had a very prominent role campaigning for Donald Trump as well as other companies.
I think when it comes to US tariffs, you know that could buy you. I think some time you look at the one hundred percent tariff that the buy An Administration put on Chinese EV makers. While there weren't that many Chinese EV makers selling electric vehicles here currently, Jilie Group, which owns Volvo and Pollstar, was pretty much the major automaker impacted. So that's why you saw those prices. Or the Volbo Ex thirty, which is a really popular model
globally not sold here yet. It's keeping byd Out for a little bit longer. But if the automakers like GM or Stillants or Forward aren't helped or don't move towards electric vehicles, you know, maybe.
It buys you two, three, four years.
But all the while, BYD and other Chinese automakers are making more investments in battery technology, and I think, regardless of who wins, you need to see more of those investments here on batteries because those are going to be important not only for electric vehicles but for the grid as well, and you're letting China get a major competitive advantage.
What are the US manufacturers doing? Have they pulled back on their EV investments.
We've definitely seen at a global level those EV targets moving back. I think for it in particular, you saw them move their new EV models out a couple of years, so it's less so on the dollar amount and more pushing it back.
GM has seen better EV sales.
In fact, the third quarter this year was the best in the US that they had seen to date, with the Equinox and Blazer and Lyric really taking off. To make one bright point, Bailey, your home state of California actually saw in that third quarter the best TV shriff sales they've ever had at twenty seven percent, So that's twenty three percent about almost twenty four percent fully electric, the rest plug in hybrid.
So it's pretty good. Calif Like, what's the US average?
US average has been at about ten percent now nine and a half ten percent.
Just yeah, far.
California twice twice the average. But what's significant about that is California had been stuck at about twenty five percent. Tesla actually for four quarters in a row in California has seen decline in deliveries because of I think some of the kind of Tesla or Musk fatigue, and so to see California begin to grow again from the other automakers, even if Tesla's pullback is pretty significant, we.
Stick with the automotive space first. Chinese carmaker BYD notched up another win over Tesla this week, reporting quarterly revenue that beat Tesla for the first time since the pair have gone head to head, and global electric vehicle sales well. Volkswagen announced a cost saving proposal to keep its German plants open, after announcing plans earlier in the week to close at least three factories in Germany and eliminate thousands of jobs amid struggles with poor demand in Europe and
intensifying competition in China. For more normal INNDON, I spoke with Bloomberg Intelligence senior auto analyst Steve Mann.
B y D is on a roll.
I mean, the whole EV market and China is on a role. It's displacing you know, ice vehicles, internal conventionment engine vehicles. Uh, and it's growing, you know, double digits.
You know what b I D. You know, BID.
Eclipsing Tesla's revenues. Is that's not the end of it, you know, I think the Chinese automakers have a really long term goal to really expand globally beyond their borders. Look, the Japanese are really good at controlling costs in making cars. You know, the Western automakers basically developed the current you know,
automotive market around the world. So China wants to have a stake, have a claim in the automotive industry, and EV is the way to go, and they want to and they want to sell everyone they can build, not only locally but internationally.
So, I mean, we know that Tesla has really been focus this year as we've been seeing sharers dipping into the red and then back into the green. And I'm looking at the company up about one point two percent this year. But then when I'm looking at bid, we're seeing shares up thirty one percent this year. So when you're looking at the comparison, it's definitely very drastic. What is keeping these US EV makers behind? Is it appetite from consumers? What exactly is the drag here?
That's that's a great question. I think the Chinese automakers know their consumers a lot better than the Western automakers. You know, Chinese automakers, Chinese industry, auto industry has about two hundred EV models for the mass market. You know that it's it's a lot more than what you find in the US. You know, you can probably count them with your fingers in the US in terms of number of models under you know, fifty thousand dollars. So they,
you know, the Chinese automakers know the Chinese consumer. They want cheaper evs, they want you know, cool user interface, high tech user interface, and you know, the Chinese automakers are able to deliver those what the consumer wants over there.
So talk to us about just the rest of the world.
In EV.
Consumption here, Steve, because I think it differs around the world. It feels like it's it's much weaker than expected here in the US, but other parts of the world adoptions much better. How did how did the companies think about it?
I mean, there's a there's a few things that actually are presenting our hurdles for EVA adoptions, especially in the Western hemisphere Western world. It's really the infrastructure. It's really the affordability of the vehicles. Look, you know, charging infrastructure. It's only in the US, it's only a fraction of what it is in China. And again EV models, I think EV models are lacking, you know, especially the ones
under fifty thousand. But if you look in at twenty twenty six and twenty twenty seven, you know there's gonna be a whole slew of cheaper EV models from GM, from Ford. Volkswagen's thinking about launching the ID two, which is under thirty thousands. The Lentist is doing the same thing, working with the Chinese partner, Leap Motor.
So I don't want.
To write off the you know, EV market, especially in the West, just yet. I think there are hurdles to work through the automakers are doing that. They're expanding their supply chain to make sure they're able to build the vehicles as cheap as possible and more affordable for the mass market, the general consumer.
So when we're thinking about ev companies here in the US, my main curiosity when I think about switching to an EVCR myself and I want to do that, is there enough infrastructure to support this transition. Of course, regionally maybe if you think about California, they're going to have charging stations everywhere. But it's also part of the concern is the consumer wondering whether or not they're going to be able to find a charging station as quickly as they
can find a gas station. Have there been developments there?
No, there is development there. There's a lot of charging stations going up, but we're nowhere near what we need. Like if you look at again comparing China in the US, US only, and the number of charging station in the US is only ten percent fifteen percent of what China has,
So there's still a lot more to go. So you know, there's you know, there's the Infrastructure Act that's in place to help that, but I think there needs to be more private investments a lot of the consumers today that on evs have to install chargers at home just so that they can charge and not rely on the public public infrastructure.
Our thanks to Bloomberg Intelligence. Senior Auto Adam Steve Mann. Coming up on the program, we explore the fragility of the commercial mortgage backed securities market.
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For the first time since the Great Financial Crisis, buyers have top rated commercial mortgage backed securities are suffering losses, and within this market, pain is most acute in a new breed of bonds known as single asset single bars or Sasby's. For more guess sos Chessman and I were joined by Carmen Arroyo Bloomberg News Credit reporter.
In May, we saw the first triple A bond commercial mortgage triple A bond being hit backed by a single office property, and then we started like digging into basically the data to see what other buildings could get hit and the results there's a few a ton of Like the office properties across across the US have been distressed for years, it just takes a long time for that to reach bond holders, and now it's starting to get there.
So we kind of like analyze the data. We saw at least like twelve other buildings are said to have some type of loss. Some will be at the triple A level, some will be just the investment grade portion. There's definitely a lot of more pain to come.
Which regions across the US are most vulnerable.
It's all over, It's all over the US. Actually, we saw there's buildings in New York, of course, Chicago, lays And and Cisco, but there's also buildings in Kansas City. Like it's it's kind of everywhere.
But if I'm holding a triple A bond, I expect to get paid back here. So what's happening to these bonds? Are they coming up for maturity and then the owner has to refinance the bond or how's this soft playing out?
Sure?
So every triple A bone holder thinks they're going to get paid back, that's why you buy it, But they, like a lot of these buildings have not been receiving interest on the bonds for a while, and the minute like the presoul's drop and kind of like the owners of the buildings get rid of them or like sell them. The losses are realized, and the the gist of it is that the buildings are worth like a fraction of
where they were worth like a few years ago. So there's just not enough money to pay back everyone, not even the triple A holders, and that that's the whole issue, Like the real estate is just not worth it.
When you're speaking to triple A bondholders, what are they telling you as far as why they might still be holding onto that? That's the risk reward.
I A lot of the Triple A bondholders will get some money back, like the lower trenches won't. And I'm not sure if there's some market for that type of like those type of bonds at the bit they may want.
Them, and I'm looking at I mean, you have a big take story, which means it has great graphics in addition to being.
Well reported, well sourced.
Some of these buildings, I mean New York, Chicago, La La West. I mean five fifty five West fifth Street, seven to twenty five South Figaroa.
I know that building. But these scenes are being.
Valued at significant discounts, right, and some not even covering the amount of the outstanding loan. So that's where the that's where the problems come in.
Yeah, that's the problem. And it's also like a lot of those buildings depend on one single tenant. So the minute that tenant's like, look my leads is up, I'm leaving. I want a newer office. This building is really old, the bonds just shrop in price because that's where they're getting the income.
I think anytime it comes to anything revolving around real estate, as we know very well, people want to harken back to the global financial crisis in two thousand e but this is a very different situation, especially coming out of the pandemic, and talk to us more about how this is a very small subset of the bond market.
When you're looking at this, yes, definitely, like there's definitely some type of eco to the like similar to the financial crisis in the sense that like that you don't really see losses on the principal level and triple A bonds like that hasn't happened since OAIDM. But again, like it's just a few bonds within the commercial mortgage backed securities market.
Right, So when you're speaking with your sources, I mean, what are the risks of other broader ripple effects or any sort of other red flags potentially brewing. And then maybe the off side of that where there's more optimism of what could happen.
Yeah, I think like the risk is mainly for any building that's old and that the tenants are walking, there's going to be issues. But if any new building that like you know, has a great reputation has a lot of tenants, like there's that market is kind of booming like right now in new issue markets, like buyers are like just gobbling up the dead like, so it really depends on the building.
Commentserve sense for you're reporting that the office real estate market is at are near bottom or anybody calling that or too, Yeah, a lot.
Of people are calling that. Like when we start to see the office buildings get sold, that's where we've reached the bottom and then everything is going to go up.
Is there a time period timeline as far as how long that could take.
Yeah, it can take a long time because the leases are so long that tenants may be locked in for like years. But most people are saying it's between now in the next few months.
Thanks to Bloomberg Credit reporter Carmen Arroyo. Next, we look at bank earnings. UBS posted third quarter profits that almost doubled expectations, adding to evidence that the bank's integration of Credit Suite is on track. For more guests. Alison Williams, Bloomberg Intelligence Senior Analysts, Global Banks Asset Managers breaks down the reports.
So a really strong quarter. Fundamentals look good.
I think there are some concerns about capital, but people look at their business. Sixty percent growth in their America's trading business, so wow is the word. It was a record record third quarter trading for them.
Keep in mind that third quarter tends to be weak, so.
But it was the strongest third quarter they've ever had and that was really due to cash, equities and derivatives strengths of the bank. So twenty seven percent growth really looking good and a lot of momentum coming into the fourth quarter.
The other positive for UBS.
You know, that core wealth franchise is really what sets them apart, and they did have very strong flows inflows across all the regions, especially Asia, so that's also very good. And then on the deal execution side, we also like what we're seeing there in terms of.
The cost progress.
You know, the grossed cost saves are over fifty percent the way there, so that's a positive. The non core unit, so that's you know, stuff they want to get rid of. They're making cuts there faster than expected. But capital, as I said, that was the one thing I think, you know, investors are still a little bit skittish on. They did actually take a cut to their capital ratio in the quarter basically because they voluntarily are kind of giving up
some accounting relief. So you know, I think that that's you know, that's accounting is sort of just noise in my view. But they did say that, you know, they're not sure if when they report the fourth quarter of February, if they're going to be able to give.
Guidance on buybacks.
And that's because you know, while they're executing on this deal, fundamentally, regulators you know, are concerned about the size and they may force them to hold more capital.
How representative is U B s ubs of kind of some of the other European banks, Allison, So.
It's interesting that you know, you banced versus the other banks. They are more skewed to the equities business. They have a very strong US presence, as you said, they also tend to be strong in Asia, and we really saw a lot.
Of strength their late quarter that benefited.
You know, the companies such as JP Morgan and Morgan Stanley. Deutsche Bank does not have the equities business, but they were very strong in thick But generally we did hear about strength across regions, across cash and derivatives, and derivatives is a strength for those two French banks.
We wrap up the show by looking ahead towards the US presidential elections, specifically the impact that business leaders can make by advocating for safe and secure elections. For more. Billy Lipschultz and I spoke with rhtt Budle, CEO of Public Private Strategies.
So first of all, I mean, you know, America, as we know, you know, over the last you know, set of election cycles has primarily had very safe and secure elections. And I think we're feeling confident about all the elections to date, and many of the you know, state local officius have worked very hard to prepare. I think, you know, one of the big questions is, you know, we probably will not have the exact results of the election on election night, and so you know, it might be until
Saturday or Sunday until we know an official winner. And so one of the pieces that we've been thinking a lot about is really making sure that folks are preparing for that, that they know that every vote is still being counted and that the process might just take a while.
But that is the important role of democracy, making sure every vote gets counted, and particularly for business owners, understanding that this sort of period of uncertainty is a really important moment for businesses to be able to you know, bring some calm to the market, to be able to say this is how democracy plays out, not just in the role that they play in the markets, but also
in the role that they play as community leaders. You know, for a lot of CEOs who have employees, this can be a fraught time, for example, and so it's really important to know that you know, every vote will be counted. The elections are on part of be very safe and secure, but we may have a period of uncertainty and that's okay, and we just need to understand that that might be the case. But it's an important part of letting democracy play out.
Well, I think back to twenty twenty when it took a few days, but we were still in the midst of the pandemic. Now in twenty twenty four, people will be back into the office, back at work, back on subways here in the New York and commuting around the country. How does that actually kind of impact a delayed ruling or delayed decision on who in fact will win the election, especially as we see a number of contested seats across the House and Senate.
Yeah.
Look, we're so used to having everything, you know, be so instant instantaneous. We're used to obviously having a result, you know, called on election night. The reality is, at least for the national presidential election, we expect it to be very close, and there's a number of states that probably will take a few days to make sure that
every ballot is counted. And so, you know, unlike where we were all sort of huddled in our homes around zoom screens or around TV screens before you know, we are going to have people going back into the office. And we know one of the things we learned in twenty sixteen was that, you know, elections can a lot of emotions with employees and start a lot of conversation. And the reality is is the workplace has become a
really important square for civic engagement. Right It's one of the places where people interact, they talk to each other, and so it's become increasingly important that business leaders and CEOs think about the role they can play and sort of setting the tone of the role that they can play in sort of depoliticizing things and making sure that there's a safe space. We've see in a lot of companies with employee research groups that there's the opportunity to
provide space for dialogue. And so part of the work that we've been doing under an initiative we created it's called the Business and Democracy Initiative, is we've been working with business leaders to help them prepare for this election, to not only sort of raise their voice in their communities to talk about how this is the normal part of democracy, but also to play an important role in sort of depolarizing, de escalating and making sure that everyone's
voices are heard in this process over the next few weeks.
And the business leaders that you do speak to, what is a concern level, if at all, that we have a recreation of something like January to that level.
Look, I think overall people feel that the election is going to be safe and secure and that every vote is counted. So that's that is a good point, you know.
I think generally what I hear from business leaders is, you know, increasingly, you know, risk has become an issue with just instability, and so even beyond the elections, you know, there's a broader issue with the government, for example, not being able to pass you know, funding bills that go on for years, or the debate over the debt selling for example, and not being able to reach resolution. So
there's that broader sort of risk level. You know, America, as we all know, is the most important economy in the world, and so having that certainty is really important
for business leaders. And I think over the last few years, businesses have become increasingly frustrated that the government hasn't been able to provide more stability and that partisanship is continued to sort of really, you know, make it difficult for business leaders to make decisions, especially businesses who rely upon the government for you know, a wide variety of factors. So it's a broader sort of risk appetite rather than
just in this moment. But it's definitely something that boardrooms and businesses are starting to look at our.
Thanks to Redbuddle, CEO of Public Private Strategies. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries.
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