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Bloomberg Intelligence with Alex Steinhl and Paul'sweenye on Bloomberg Radio.

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On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street in the global markets.

On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street in the global markets.

Each and every week, we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.

Each and every week, we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.

Today, we'll look at a story about how seventy two hours obliterated our Caago's capital management founder Bill Wang's thirty six billion dollar fortune.

Today, we'll look at a story about how seventy two hours obliterated our Caago's capital management founder Bill Wang's thirty six billion dollar fortune.

Plus, we're going to take an in depth look at the global carbon market.

Plus, we're going to take an in depth look at the global carbon market.

First, we dive into big tech and Apple. Apple's anti trust feud with the European Union over allegedly illegal practices on the App store Intensified.

First, we dive into big tech and Apple. Apple's anti trust feud with the European Union over allegedly illegal practices on the App store Intensified.

For more on this, we were joined by Tamlin based in Bloomberg Intelligence technology analysts, and we first asked Hamlin to talk to us about what is happening with Apple right now.

For more on this, we were joined by Tamlin based in Bloomberg Intelligence technology analysts, and we first asked Hamlin to talk to us about what is happening with Apple right now.

The European Commission announced preliminary findings in an investigation into Apple under the Digital Markets Act. This is the sweeping new competition rules that the European Union is sort of implemented in March of this year. The findings of this probe relate to anti steering rules, so essentially to Apple's rules that it has in place to sort of prevent app developers from informing users of maybe cheaper subscription options outside of the app store. Now this might sound familiar, because just in early March, before the DMA took effect, the Commission did find Apple one point eight billion euros over sort of these same anti steering policies. Now, what their commission said is that Apple is still not complying now with the DMA in terms of really letting developers freely engage with users and direct them to cheaper options. Specifically, this kind of they want developers to be able to market within the app and show cheaper subscriptions within that. So it's really this kind of more pressure on those sort of app store revenues that Apple.

The European Commission announced preliminary findings in an investigation into Apple under the Digital Markets Act. This is the sweeping new competition rules that the European Union is sort of implemented in March of this year. The findings of this probe relate to anti steering rules, so essentially to Apple's rules that it has in place to sort of prevent app developers from informing users of maybe cheaper subscription options outside of the app store. Now this might sound familiar, because just in early March, before the DMA took effect, the Commission did find Apple one point eight billion euros over sort of these same anti steering policies. Now, what their commission said is that Apple is still not complying now with the DMA in terms of really letting developers freely engage with users and direct them to cheaper options. Specifically, this kind of they want developers to be able to market within the app and show cheaper subscriptions within that. So it's really this kind of more pressure on those sort of app store revenues that Apple.

So what does Apple say to that? Well, what's their defense to that, because presuly they had months to kind of get it together.

So what does Apple say to that? Well, what's their defense to that, because presuly they had months to kind of get it together.

What do they said is they think that they do comply with all of this. What's interesting about the DMA, though, is that this is the DMA. The European Commission did play a strong role in drafting these rules, and it's also responsible for enforcing them, and there are a lot of sort of subjective interpretations in terms of first complying with this. So I think what we are going to see is probably the European Commission taking a very strict view of what's reasonable in these circumstances and probably really try to get strict adherance here. So it's going to be going to be up to them to decide whether Apple is complying or not, and then Apple can then sort of appeal to the courts. But I do think it's pretty likely we're going to see another fine in this and some behavioral remedies coming down the line.

What do they said is they think that they do comply with all of this. What's interesting about the DMA, though, is that this is the DMA. The European Commission did play a strong role in drafting these rules, and it's also responsible for enforcing them, and there are a lot of sort of subjective interpretations in terms of first complying with this. So I think what we are going to see is probably the European Commission taking a very strict view of what's reasonable in these circumstances and probably really try to get strict adherance here. So it's going to be going to be up to them to decide whether Apple is complying or not, and then Apple can then sort of appeal to the courts. But I do think it's pretty likely we're going to see another fine in this and some behavioral remedies coming down the line.

We've seen this time and time again where the Europeans just start nitpicking at these US technology companies, tam what's the feeling within the regulatory environment of Europe as to really what they're trying to do here, because it just doesn't seem like it's even relevant. I mean, it just at the end of the day, they just whether it's Google or Facebook or they just write checks here to make it all go away. Do European regulators recognize that it just doesn't seem to be that material what they're doing.

We've seen this time and time again where the Europeans just start nitpicking at these US technology companies, tam what's the feeling within the regulatory environment of Europe as to really what they're trying to do here, because it just doesn't seem like it's even relevant. I mean, it just at the end of the day, they just whether it's Google or Facebook or they just write checks here to make it all go away. Do European regulators recognize that it just doesn't seem to be that material what they're doing.

Yeah, So I think if you look at this specific investigation, you know, this is one that sort of came out of sort of Spotify, which of course is headquartered in Europe, and the app developers are complaining that the Apple is squeezing them too hard. So I think in some of these instances, Europe is trying to protect some local players by sort of ordering a sort of loosening of these rules that sort of maybe benefit the gatekeeper on the TNA, which would be at Apple, Google, Microsoft brothers, and they are sort of trying to show domestic industry that they are trying to pry open the markets. I do think you're right that I think at this point investors are sort of kind of just shrugging this off. This is just one thing after another. I will point a difference under the DMA is that the timeline is really much quicker than under of former case law, where it may take three four years until you got a result after an industiation. Here, this finding came just three months after the inquery opened, and we're going to have sort of a final remedial measure by early next year. So I do think the timeline is faster. Whether or not that this results and sort of the impact that the regulators might be looking for, I think definitely remains to be seen. I think investors are definitely looking a little bit of skew at it and thinking maybe this is sort of just more of the same.

Yeah, So I think if you look at this specific investigation, you know, this is one that sort of came out of sort of Spotify, which of course is headquartered in Europe, and the app developers are complaining that the Apple is squeezing them too hard. So I think in some of these instances, Europe is trying to protect some local players by sort of ordering a sort of loosening of these rules that sort of maybe benefit the gatekeeper on the TNA, which would be at Apple, Google, Microsoft brothers, and they are sort of trying to show domestic industry that they are trying to pry open the markets. I do think you're right that I think at this point investors are sort of kind of just shrugging this off. This is just one thing after another. I will point a difference under the DMA is that the timeline is really much quicker than under of former case law, where it may take three four years until you got a result after an industiation. Here, this finding came just three months after the inquery opened, and we're going to have sort of a final remedial measure by early next year. So I do think the timeline is faster. Whether or not that this results and sort of the impact that the regulators might be looking for, I think definitely remains to be seen. I think investors are definitely looking a little bit of skew at it and thinking maybe this is sort of just more of the same.

And Alex, I mean, you know, it's really almost, maybe even more than thirty years ago that Microsoft started going through the same whole thing with the European Union, and again it investors became conditioned to it's no big deal. They just write it check and it kind of goes away. The tobacco industry. You know, investors kind of said, put it in context, it's not that big a deal, and you kind of wonder, you know, given that the US regulators have taken a very light touch to technology and then allowing these companies to get so big. It seems like the Europeans are trying to do what they can to kind of rein it in, but it seems almost too little, too late, right.

And Alex, I mean, you know, it's really almost, maybe even more than thirty years ago that Microsoft started going through the same whole thing with the European Union, and again it investors became conditioned to it's no big deal. They just write it check and it kind of goes away. The tobacco industry. You know, investors kind of said, put it in context, it's not that big a deal, and you kind of wonder, you know, given that the US regulators have taken a very light touch to technology and then allowing these companies to get so big. It seems like the Europeans are trying to do what they can to kind of rein it in, but it seems almost too little, too late, right.

And also you can make the argument too that you know, Europe doesn't have a lot of technology companies. They have some, of course, like ASML for example, yes's fitty, Yeah exactly, SAP, But I mean, can you name anymore?

And also you can make the argument too that you know, Europe doesn't have a lot of technology companies. They have some, of course, like ASML for example, yes's fitty, Yeah exactly, SAP, But I mean, can you name anymore?

No, I'm there's some.

No, I'm there's some.

But I think that that's kind of the point if you take a look at you know, European stocks versus the SMP and market cap like twenty years ago versus now, Oh my gosh, forget that. Hey Tamlin, what's going on with Apple in general? It seems to be making a little bit of a comeback here. What do you make of that?

But I think that that's kind of the point if you take a look at you know, European stocks versus the SMP and market cap like twenty years ago versus now, Oh my gosh, forget that. Hey Tamlin, what's going on with Apple in general? It seems to be making a little bit of a comeback here. What do you make of that?

Yeah, I mean I think some of this comes some sort of the recent announcement to sort of build AI into the iPhone, and maybe it made me sort of accelerate the recycle in terms of getting people to buy those zones. Definitely, I don't think the regulatory headwinds are really causing it much damage right now. I will point out that although the US is definitely, like well said, taking a light touch approach, the one area they are getting involved in is on sort of these apps for rules, where where Apple's obviously been in litigation with Epic for years and years and years. So I think on both sides of the Atlantic, there are some pressure on those services revenues that we might see shaking out over the next you know, nine to eighteen months to see how that plays.

Yeah, I mean I think some of this comes some sort of the recent announcement to sort of build AI into the iPhone, and maybe it made me sort of accelerate the recycle in terms of getting people to buy those zones. Definitely, I don't think the regulatory headwinds are really causing it much damage right now. I will point out that although the US is definitely, like well said, taking a light touch approach, the one area they are getting involved in is on sort of these apps for rules, where where Apple's obviously been in litigation with Epic for years and years and years. So I think on both sides of the Atlantic, there are some pressure on those services revenues that we might see shaking out over the next you know, nine to eighteen months to see how that plays.

Out our thanks to Tamlin Basin Bloomberg Intelligence Technology Channels, we.

Out our thanks to Tamlin Basin Bloomberg Intelligence Technology Channels, we.

Move next to the electric vehicle industry. This week we heard Beijing suggested Germany's luxury car manufacturers could benefit if Berlink convinces the European Union to drop tearraffs on Chinese electric vehicle exports.

Move next to the electric vehicle industry. This week we heard Beijing suggested Germany's luxury car manufacturers could benefit if Berlink convinces the European Union to drop tearraffs on Chinese electric vehicle exports.

Beijing currently imposes a fifteen percent fee on passenger vehicles from the block. For more on this in the State of the ev Industry, we were joined by Steve Mann, Bloomberg Intelligence Global Autos and Industrials Research channelists.

Beijing currently imposes a fifteen percent fee on passenger vehicles from the block. For more on this in the State of the ev Industry, we were joined by Steve Mann, Bloomberg Intelligence Global Autos and Industrials Research channelists.

We first asked for his take on this week's news.

We first asked for his take on this week's news.

It's a big deal for the Germans, especially the luxury automakers like BMW Mercedes and Audi, which Volkswagen owns Audi. You know, they have about eighty percent of the market, the luxury car market in China, so they sell a huge amount of cars in China. About a third to forty percent of these companies' revenues actually generate in China, so they Yeah, so they want to make good with the Chinese. As you know, Germany has been against the tariffs. So if the Germans are able to get something from China and help ease some of the terrors, or if China can get the Germans to help them eat some of the tariffs in the EU, I think it will benefit you know, potentially companies like Stelentis as well, which is which also has a new joint venture.

It's a big deal for the Germans, especially the luxury automakers like BMW Mercedes and Audi, which Volkswagen owns Audi. You know, they have about eighty percent of the market, the luxury car market in China, so they sell a huge amount of cars in China. About a third to forty percent of these companies' revenues actually generate in China, so they Yeah, so they want to make good with the Chinese. As you know, Germany has been against the tariffs. So if the Germans are able to get something from China and help ease some of the terrors, or if China can get the Germans to help them eat some of the tariffs in the EU, I think it will benefit you know, potentially companies like Stelentis as well, which is which also has a new joint venture.

But here's the thing that I get confused. Is it China's making a pitch to individual countries versus the European Union trying to operate as one body in relation to tariffs, and I wonder how that's going to work itself out.

But here's the thing that I get confused. Is it China's making a pitch to individual countries versus the European Union trying to operate as one body in relation to tariffs, and I wonder how that's going to work itself out.

Yeah, I think it's it's that divine and conquer strategy they're taking. So, but you know, I think the Germans probably has the most to lose out of the global automakers here. You know, about sixteen percent of their battery electric vehicles that are produced in China, it's actually shipped out globally. So China plays an important part for the BEEV market as a low cost producer. So, you know, I don't think there's a lot of other automakers that are you know, that have that many bev's produce in China and sold elsewhere around the world.

Yeah, I think it's it's that divine and conquer strategy they're taking. So, but you know, I think the Germans probably has the most to lose out of the global automakers here. You know, about sixteen percent of their battery electric vehicles that are produced in China, it's actually shipped out globally. So China plays an important part for the BEEV market as a low cost producer. So, you know, I don't think there's a lot of other automakers that are you know, that have that many bev's produce in China and sold elsewhere around the world.

And Steve Canada now gets into the game. Canada announces planned to curb imports of Chinese made EV's. First of all, just give us a sense of how good, how competitive are these Chinese evs, because if you tell me they're good vehicles, let's bring them into the market.

And Steve Canada now gets into the game. Canada announces planned to curb imports of Chinese made EV's. First of all, just give us a sense of how good, how competitive are these Chinese evs, because if you tell me they're good vehicles, let's bring them into the market.

I don't know, Yeah, I think some if you talk to some of the our makers, they actually have the same thinking. Let's let's let's compete, right, I think competition will make the whole industry better. You saw that with Tesla being the you know, fourth or third automaker in the US and actually helped drive a lot of the b EV costs down. But you know, it's not surprising that Canada is is implementing tariffs. They are part of the US, Mexico, Canada free trade agreement, and I think, you know, they have to close that door, that back door where the Chinese EV's can come in. It is very competitive. I think, you know, Chinese evs are cheap enough that if some argue that even with the tariffs, even with some engineering changed so that they fit the regulatory, safety and mission rules here, is still be a very competitive price vehicle for North America.

I don't know, Yeah, I think some if you talk to some of the our makers, they actually have the same thinking. Let's let's let's compete, right, I think competition will make the whole industry better. You saw that with Tesla being the you know, fourth or third automaker in the US and actually helped drive a lot of the b EV costs down. But you know, it's not surprising that Canada is is implementing tariffs. They are part of the US, Mexico, Canada free trade agreement, and I think, you know, they have to close that door, that back door where the Chinese EV's can come in. It is very competitive. I think, you know, Chinese evs are cheap enough that if some argue that even with the tariffs, even with some engineering changed so that they fit the regulatory, safety and mission rules here, is still be a very competitive price vehicle for North America.

So then to that point, we're waiting for Mexico now, right because I think we talked about this before. So not only is Canada going to put tariffs on EV imports, they're also going to curb imports of Chinese made evs. The idea is that if Mexico doesn't have any of those restrictions, that they can just import EV's from China and then through Mexico go into the US. And that's a different way of operating. When do we get that from Mexico.

So then to that point, we're waiting for Mexico now, right because I think we talked about this before. So not only is Canada going to put tariffs on EV imports, they're also going to curb imports of Chinese made evs. The idea is that if Mexico doesn't have any of those restrictions, that they can just import EV's from China and then through Mexico go into the US. And that's a different way of operating. When do we get that from Mexico.

I think there are some negotiation that's happening now with Mexico to kind of implement similar tariff. I've heard that VOVO is already kind of lobbying. VOVO is actually part of Chile, is actually lobbying the Mexican government to not implement to not put tariffs in place. So then negotiations are ongoing. I don't think we were gonna wait have to wait too long to hear any news from that.

I think there are some negotiation that's happening now with Mexico to kind of implement similar tariff. I've heard that VOVO is already kind of lobbying. VOVO is actually part of Chile, is actually lobbying the Mexican government to not implement to not put tariffs in place. So then negotiations are ongoing. I don't think we were gonna wait have to wait too long to hear any news from that.

All right, So stepping back a little bit, give us the latest thinking out of Detroit and other auto capitals around the world about EV's versus the hybrids. Is the hybrid gonna be I guess the stepping stone to a pure EV environment? Do you think is that still the thinking?

All right, So stepping back a little bit, give us the latest thinking out of Detroit and other auto capitals around the world about EV's versus the hybrids. Is the hybrid gonna be I guess the stepping stone to a pure EV environment? Do you think is that still the thinking?

Yeah, I think that is still the thinking. I think with BEEV sales slowing down or growth slowing down, the automakers do need something else to meet the cafe the few economy regulation, the missions regulations. So hybrid is a stopgap measure. But if you talk to the all the automakers, there's still spending a lot of money on BEV. They think that is the future because at the end of the day, hybrid vehicles do still spell out pollution or greenhouse gases. So you know, these emission standards, these few economy standards, they're only going to get tighter and tighter. O.

Yeah, I think that is still the thinking. I think with BEEV sales slowing down or growth slowing down, the automakers do need something else to meet the cafe the few economy regulation, the missions regulations. So hybrid is a stopgap measure. But if you talk to the all the automakers, there's still spending a lot of money on BEV. They think that is the future because at the end of the day, hybrid vehicles do still spell out pollution or greenhouse gases. So you know, these emission standards, these few economy standards, they're only going to get tighter and tighter. O.

Thanks to Steve man bloomerg Intelligence, Global Autos and Industrials research channels.

Thanks to Steve man bloomerg Intelligence, Global Autos and Industrials research channels.

Coming up, We're going to look at Bloomberg Intelligence's midyear outlook for North American restaurants and food service companies.

Coming up, We're going to look at Bloomberg Intelligence's midyear outlook for North American restaurants and food service companies.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indiffer research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via Bigo in the terminal.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indiffer research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via Bigo in the terminal.

I'm Paul Sweeney and I'm Alex Steele, and this is Bloomberg.

I'm Paul Sweeney and I'm Alex Steele, and this is Bloomberg.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Affocarplaying and broud Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Affocarplaying and broud Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

We look next at the restaurant and food service industry. It's Bloomberg Intelligence recently released it's midiar outlook for both in North America.

We look next at the restaurant and food service industry. It's Bloomberg Intelligence recently released it's midiar outlook for both in North America.

For more on this, we were joined by Michael Halen, Bloomberg Intelligence Senior Restaurant and Food Service. We first asked Michael, what is expecting for the back half of the year.

For more on this, we were joined by Michael Halen, Bloomberg Intelligence Senior Restaurant and Food Service. We first asked Michael, what is expecting for the back half of the year.

Sales are probably looking a little bit better just because than they were in the first half, because the year over year comparisons are getting easier, higher income consumers should have money to spend. Right, we see stock markets at all time highs, bitcoins having a rough day, but not far off the highs, and home prices have held in despite the higher rates, so that those should kind of booy restaurant sales. But on the other end, the other end of the k, the low income consumers continue to struggle. You know, consumers under seventy five thousand were cited by Darden the other day on their earnings call, is struggling, especially consumers you know that are earning less than fifty thousand. So we have kind of a push and a pull there.

Sales are probably looking a little bit better just because than they were in the first half, because the year over year comparisons are getting easier, higher income consumers should have money to spend. Right, we see stock markets at all time highs, bitcoins having a rough day, but not far off the highs, and home prices have held in despite the higher rates, so that those should kind of booy restaurant sales. But on the other end, the other end of the k, the low income consumers continue to struggle. You know, consumers under seventy five thousand were cited by Darden the other day on their earnings call, is struggling, especially consumers you know that are earning less than fifty thousand. So we have kind of a push and a pull there.

You know.

You know.

Margins are okay, you know, we would like to.

Margins are okay, you know, we would like to.

See better sales because that's really.

See better sales because that's really.

What drives most of the margin expansion in that business. Right There's a lot of operating leverage in the mind model, so maybe some modest margin expansion. Then stocks generally haven't done so well this year. What we wrote is that we think we're going to see a larger spread between the stock market, you know, the market share winners and losers this year, you know, which we've largely seen in.

What drives most of the margin expansion in that business. Right There's a lot of operating leverage in the mind model, so maybe some modest margin expansion. Then stocks generally haven't done so well this year. What we wrote is that we think we're going to see a larger spread between the stock market, you know, the market share winners and losers this year, you know, which we've largely seen in.

The first half.

The first half.

You've seen stocks like Chipotle absolutely knocked the cover off the ball again and really appreciate where other chains like blooming Is kind of struggled in the first half and you've seen that stock, you know, sell off pretty precipitously.

You've seen stocks like Chipotle absolutely knocked the cover off the ball again and really appreciate where other chains like blooming Is kind of struggled in the first half and you've seen that stock, you know, sell off pretty precipitously.

Talk to us about California and their new minimum wage law. What's the impact been on the fast food business.

Talk to us about California and their new minimum wage law. What's the impact been on the fast food business.

We just have like a famous Hollywood restaurant closed because of that, like the famous like Hollywood McDonald's.

We just have like a famous Hollywood restaurant closed because of that, like the famous like Hollywood McDonald's.

Or something San fran Yeah, so it's not been good so far.

Or something San fran Yeah, so it's not been good so far.

April results were.

April results were.

Kind of in line with the US in terms of same slore of sales at quick service restaurants, but I think everybody went in April and then they had got sticker shock and they didn't return in May.

Kind of in line with the US in terms of same slore of sales at quick service restaurants, but I think everybody went in April and then they had got sticker shock and they didn't return in May.

So the McDonald's are the world in the restaurants in general in California. Are they raising prices to cover their higher.

So the McDonald's are the world in the restaurants in general in California. Are they raising prices to cover their higher.

Labor, Yeah, high single digits is typical, which is a lot, and that's not even covering it because the traffic loss that we've seen here in May, it's it's not even going to cover it. So they may even have to raise prices again if they can. Quick service California same store sales underperformed by almost four hundred basis points in May versus the US. Yeah, so you know what we wrote is that we expect quick service to continue to outperform casual dining just because it's a cheaper check. Even though it's gotten all the bad press about the eighteen dollars big mac meal, twenty two dollars smash burger meal, it's still you can eat there a lot cheaper on the value menu and stuff like that. Also, you know, chains are starting to discount more Burger King and McDonald's five dollars meals, things of that nature. But California is definitely going to weigh on quick service growth throughout your end for sure.

Labor, Yeah, high single digits is typical, which is a lot, and that's not even covering it because the traffic loss that we've seen here in May, it's it's not even going to cover it. So they may even have to raise prices again if they can. Quick service California same store sales underperformed by almost four hundred basis points in May versus the US. Yeah, so you know what we wrote is that we expect quick service to continue to outperform casual dining just because it's a cheaper check. Even though it's gotten all the bad press about the eighteen dollars big mac meal, twenty two dollars smash burger meal, it's still you can eat there a lot cheaper on the value menu and stuff like that. Also, you know, chains are starting to discount more Burger King and McDonald's five dollars meals, things of that nature. But California is definitely going to weigh on quick service growth throughout your end for sure.

So as the k shape recovery grows even wider, it feels like, so do the valuations of those companies that service those two lines.

So as the k shape recovery grows even wider, it feels like, so do the valuations of those companies that service those two lines.

Is that a fair statement.

Is that a fair statement.

Yeah, if you're a chain that can attract high income consumers like Chipotle has done such a good job of doing and McDonald's has done a good job of it as well since since the start of the pandemic.

Yeah, if you're a chain that can attract high income consumers like Chipotle has done such a good job of doing and McDonald's has done a good job of it as well since since the start of the pandemic.

Chipotle is their Wednesday day, Paul, It varies, but it's seven one day week they get Chipotle.

Chipotle is their Wednesday day, Paul, It varies, but it's seven one day week they get Chipotle.

But here's a funny Chipotle story. They got slammed in social media for like underfilling their tacos and things like that. Now they've gone overboard and they overfill them. So the net result for me, instead of getting three hard tacos with chicken and I'd give you the whole order later, I only get two.

But here's a funny Chipotle story. They got slammed in social media for like underfilling their tacos and things like that. Now they've gone overboard and they overfill them. So the net result for me, instead of getting three hard tacos with chicken and I'd give you the whole order later, I only get two.

There you go.

There you go.

So it's got to be hurting their sales. So that is an interesting tidbit.

So it's got to be hurting their sales. So that is an interesting tidbit.

Thinking about doing some work into it, but we haven't done anything yet. There was definitely some some heat and some shade thrown at Chipotle for a little while there.

Thinking about doing some work into it, but we haven't done anything yet. There was definitely some some heat and some shade thrown at Chipotle for a little while there.

I'm going to say a year and a half ago, somebody came in there, this kind of the beginning of this whole AI thing, and somebody came in to this studio said, one of the biggest areas is going to be like, for example, drive through going through a drive through McDonald's, it's gonna be all AI blah blah blah blah blah. So my question to you is, are local I don't know McDonald's or Burger Kings. Did they have fewer employees because they're using technology or at all like that?

I'm going to say a year and a half ago, somebody came in there, this kind of the beginning of this whole AI thing, and somebody came in to this studio said, one of the biggest areas is going to be like, for example, drive through going through a drive through McDonald's, it's gonna be all AI blah blah blah blah blah. So my question to you is, are local I don't know McDonald's or Burger Kings. Did they have fewer employees because they're using technology or at all like that?

Well, there, they have tried to cut labor hours in other ways. That's a goal using AI for sure. It's been harder though at the drive through then anticipated a lot of things just like accents, you know, you know, something like that you know actually is has caused some issues up they're also using AI with these cameras that are using AI to see if orders are being packaged correctly, you know, since takeout and delivery has become such a big part of these businesses. But you know, one of the companies that was doing that got caught using people in India watching like screens.

Well, there, they have tried to cut labor hours in other ways. That's a goal using AI for sure. It's been harder though at the drive through then anticipated a lot of things just like accents, you know, you know, something like that you know actually is has caused some issues up they're also using AI with these cameras that are using AI to see if orders are being packaged correctly, you know, since takeout and delivery has become such a big part of these businesses. But you know, one of the companies that was doing that got caught using people in India watching like screens.

Videos supposedly quote unquote AI. So we're not quite there yet with the AI our.

Videos supposedly quote unquote AI. So we're not quite there yet with the AI our.

Thanks to Michael Hanlin, Bloomberg Intelligence Senior Restaurant and food service Analysts.

Thanks to Michael Hanlin, Bloomberg Intelligence Senior Restaurant and food service Analysts.

Here at Bloomberg, we'd like to keep you up to date on all the fun, juicy Wall Street stories, and this week we focused on the Bloomberg Big Take story titled the Last seventy two Hours of our kegos for more.

Here at Bloomberg, we'd like to keep you up to date on all the fun, juicy Wall Street stories, and this week we focused on the Bloomberg Big Take story titled the Last seventy two Hours of our kegos for more.

We were joined by one of the stories authors, Shreed Nanarajen, Bloomberg News Senior Finance reporter. We first asked Streid to walk us through what this story is about.

We were joined by one of the stories authors, Shreed Nanarajen, Bloomberg News Senior Finance reporter. We first asked Streid to walk us through what this story is about.

This is a story that's fascinated Wall Street for much of the last three years, right Billhong out of nowhere, had built up such enormous wealth, had a family office, and yet hid wealth had gone from a billion to four billion, from four billion to thirty six billion in a span of six months. That all collapsed very publicly in March twenty twenty one, when in a matter of days he lost his entire fortune. Everyone on Wall Street has been trying to figure out what happened, how it happened, and a lot of the details have been dribbling out for the last few years. But over the last few weeks any court room in downtown Manhattan, Bill Huang is on trial. Prosecutors accused him of manipulating markets, of defrauding lenders. But after having spent a lot of time in the courtroom, another key takeaway from it all has been that Wall Street doesn't look all that great. Here was someone whose personal wealth might have been thirty six billion dollars, but he had another one hundred and twenty five billion dollars in borrowed money. He had a gross portfolio size of one hundred and sixty billion dollars, making concentrated bets on much of the same names, and all the banks were largely caught unawares. Yes, they got vague answers, evasive answers, but they also relied on pinky promises effectively to give him so much firepower for his bets. And in the end the banks were burnt badly, lost over ten billion dollars, and one of those banks, the most badly hit credit Squeeze, doesn't even exist anymore. And you could argue Bill Huong's firm played a key role in that.

This is a story that's fascinated Wall Street for much of the last three years, right Billhong out of nowhere, had built up such enormous wealth, had a family office, and yet hid wealth had gone from a billion to four billion, from four billion to thirty six billion in a span of six months. That all collapsed very publicly in March twenty twenty one, when in a matter of days he lost his entire fortune. Everyone on Wall Street has been trying to figure out what happened, how it happened, and a lot of the details have been dribbling out for the last few years. But over the last few weeks any court room in downtown Manhattan, Bill Huang is on trial. Prosecutors accused him of manipulating markets, of defrauding lenders. But after having spent a lot of time in the courtroom, another key takeaway from it all has been that Wall Street doesn't look all that great. Here was someone whose personal wealth might have been thirty six billion dollars, but he had another one hundred and twenty five billion dollars in borrowed money. He had a gross portfolio size of one hundred and sixty billion dollars, making concentrated bets on much of the same names, and all the banks were largely caught unawares. Yes, they got vague answers, evasive answers, but they also relied on pinky promises effectively to give him so much firepower for his bets. And in the end the banks were burnt badly, lost over ten billion dollars, and one of those banks, the most badly hit credit Squeeze, doesn't even exist anymore. And you could argue Bill Huong's firm played a key role in that.

What I found fashionating about this article, and it's a great minute by minute walk through a seventy two hour period when it all kind of came to an end for everyone involved, was that the banks did not know that Piquang and his firm was layering on such concentrated bets across various firms. One bank didn't know what the other bank was doing. Therefore they didn't know the magnitude of the exposure. How did that happen?

What I found fashionating about this article, and it's a great minute by minute walk through a seventy two hour period when it all kind of came to an end for everyone involved, was that the banks did not know that Piquang and his firm was layering on such concentrated bets across various firms. One bank didn't know what the other bank was doing. Therefore they didn't know the magnitude of the exposure. How did that happen?

And look all the conversations we have, they will tell you we're not allowed to ask if you're in the prime brokerage business, if you're in the business of extending leverage to your client, the client doesn't necessarily have to tell you or show you their exact portfolio. They will claim secrecy, they will claim proprietary information. But at the end of the day, banks can also say, if you don't give me as many disclosures as possible, I will not give you that money. That never happened. These guys would come in and say, yes, we have a diversified portfolio, and yes, don't worry, we have all the controls in place, and it's across a mix of names, and the banks would believe that, yes, they expect honesty and truthful answers. And if they didn't get that, and you can see why the DOJ wants to go after Billhong and ArKade goes. But just think about it for a moment. You walk into a bank today as a retail customer and want a ten thousand dollars loan or a mortgage, or you are trying to get into a co op, the hoops that one has to jump through, the signatures you have to get. I mean, to get into a co op, you will need three witnesses, three friends, your high school teacher, your college professor, and so many other people.

And look all the conversations we have, they will tell you we're not allowed to ask if you're in the prime brokerage business, if you're in the business of extending leverage to your client, the client doesn't necessarily have to tell you or show you their exact portfolio. They will claim secrecy, they will claim proprietary information. But at the end of the day, banks can also say, if you don't give me as many disclosures as possible, I will not give you that money. That never happened. These guys would come in and say, yes, we have a diversified portfolio, and yes, don't worry, we have all the controls in place, and it's across a mix of names, and the banks would believe that, yes, they expect honesty and truthful answers. And if they didn't get that, and you can see why the DOJ wants to go after Billhong and ArKade goes. But just think about it for a moment. You walk into a bank today as a retail customer and want a ten thousand dollars loan or a mortgage, or you are trying to get into a co op, the hoops that one has to jump through, the signatures you have to get. I mean, to get into a co op, you will need three witnesses, three friends, your high school teacher, your college professor, and so many other people.

When you're first born man, and if you're getting into a co op.

When you're first born man, and if you're getting into a co op.

Pretty much and in this case, he as someone who said I would like five billion dollars in capacity, Actually, can we increase it ten billion now? Because my portfolio sizes increase and all the banks are doing you're sure you're good for that, right, and we can trust you that you're investing well and you're doing this responsibility.

Pretty much and in this case, he as someone who said I would like five billion dollars in capacity, Actually, can we increase it ten billion now? Because my portfolio sizes increase and all the banks are doing you're sure you're good for that, right, and we can trust you that you're investing well and you're doing this responsibility.

Yep, yep.

Yep, yep.

Great. They didn't even require written declarations about what the portfolio looks like. These were phone conversations and that was convincing enough for them to extend this kind of money. And that's why for us. Yes, the legal process will follow its on path, and the jury of twelve New York kers will decide whether Bill Hoong his CFO, if they are guilty or not on the charges that have been brought against them. But it's not a great look for Wall three.

Great. They didn't even require written declarations about what the portfolio looks like. These were phone conversations and that was convincing enough for them to extend this kind of money. And that's why for us. Yes, the legal process will follow its on path, and the jury of twelve New York kers will decide whether Bill Hoong his CFO, if they are guilty or not on the charges that have been brought against them. But it's not a great look for Wall three.

So in terms of Wall Street, could this happen again or do you think now things will be rethought? Those pinky swears will be by the wayside.

So in terms of Wall Street, could this happen again or do you think now things will be rethought? Those pinky swears will be by the wayside.

By the way I was told by one of the editors that pinky swears are the highest grade of promises out there. So if you can't rely on that, what do you rely on. I will make the point though, that the lack of copycats before our Chigoes or even after our Gooes, isn't necessarily a reflection of a new regime of banking, of strengthened controls, of great oversight. As much as in the case of our gegos, there was one man who was willing to take a pliant system to the extremes. There was a lot of noise about bringing in rules. Family offices don't face the same kind of oversight as hatch funds, and they will talk about what can be changed, how the rules need to be modified. Some have been put in place, but for the most part it's been a lot of talk, and these things take time. The worry still remains. And look, this happened recently, so the banks are perhaps shy of doing this with someone else, but it's not entirely clear to me how they avoid a repeat of this situation. If someone else comes along and follows this, you know, you may want to call it what might have looked like genius investing to start with, but really at the end of it reckless investing. If they follow the same pattern, can we be guaranteed that they won't be a repeat? I don't know, and Credit Swiss will tell you it doesn't even matter because they don't they don't exist anymore to be able to tell you if there will be a repeat or not. That was the kind of consequence we saw from the collapse of this one film.

By the way I was told by one of the editors that pinky swears are the highest grade of promises out there. So if you can't rely on that, what do you rely on. I will make the point though, that the lack of copycats before our Chigoes or even after our Gooes, isn't necessarily a reflection of a new regime of banking, of strengthened controls, of great oversight. As much as in the case of our gegos, there was one man who was willing to take a pliant system to the extremes. There was a lot of noise about bringing in rules. Family offices don't face the same kind of oversight as hatch funds, and they will talk about what can be changed, how the rules need to be modified. Some have been put in place, but for the most part it's been a lot of talk, and these things take time. The worry still remains. And look, this happened recently, so the banks are perhaps shy of doing this with someone else, but it's not entirely clear to me how they avoid a repeat of this situation. If someone else comes along and follows this, you know, you may want to call it what might have looked like genius investing to start with, but really at the end of it reckless investing. If they follow the same pattern, can we be guaranteed that they won't be a repeat? I don't know, and Credit Swiss will tell you it doesn't even matter because they don't they don't exist anymore to be able to tell you if there will be a repeat or not. That was the kind of consequence we saw from the collapse of this one film.

Say it's how this trial is gonna go, Sery.

Say it's how this trial is gonna go, Sery.

Well, it's fascinating. It's happening in the court room of a ninety year old judge, right, and you have a jury most of them, well all of them, had never heard of Billhong or our kaid goes before. And that kind of means that they have been getting a finance one o one finance one on one sounds challenging in itself, But then if the prosecutors and the defense lawyers have to spend much of their time trying to explain security based swaps, margin leverage, even discuss what memes talks and what they're not, and have to define for some of these people what Goldman Sachs is, it'll be very interesting to see how it pans out, because when you're listening to some of the arguments in court, when you hear prosecutors talk about a lot of heavy investing towards close of market, they were lifting the firm limit to try and drive the price up, and yet on counter you kind of understand that is how business is done on Wall Street. I mean, some of this jargon sounds sinister, but isn't necessarily sinister. But how we see and perceive it doesn't matter. It's what's getting through to the jury. The prosecution rests its case today, the defense gets another couple of days, and after the break next week we will come back with closing remarks and then we will get the final liddict on this one.

Well, it's fascinating. It's happening in the court room of a ninety year old judge, right, and you have a jury most of them, well all of them, had never heard of Billhong or our kaid goes before. And that kind of means that they have been getting a finance one o one finance one on one sounds challenging in itself, But then if the prosecutors and the defense lawyers have to spend much of their time trying to explain security based swaps, margin leverage, even discuss what memes talks and what they're not, and have to define for some of these people what Goldman Sachs is, it'll be very interesting to see how it pans out, because when you're listening to some of the arguments in court, when you hear prosecutors talk about a lot of heavy investing towards close of market, they were lifting the firm limit to try and drive the price up, and yet on counter you kind of understand that is how business is done on Wall Street. I mean, some of this jargon sounds sinister, but isn't necessarily sinister. But how we see and perceive it doesn't matter. It's what's getting through to the jury. The prosecution rests its case today, the defense gets another couple of days, and after the break next week we will come back with closing remarks and then we will get the final liddict on this one.

Our thanks to Shri Natarajen, Bloomberg News Senior finance reporter.

Our thanks to Shri Natarajen, Bloomberg News Senior finance reporter.

I coming up on the program, We're going to look at how the strong demand for cruises impacted Carnival's quarterly earnings.

I coming up on the program, We're going to look at how the strong demand for cruises impacted Carnival's quarterly earnings.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via bi go on the terminal, I'll Paul Swinging.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on two thousand companies and one hundred and thirty industries. You can access Bloomberg Intelligence via bi go on the terminal, I'll Paul Swinging.

And am Alex Steele, and.

And am Alex Steele, and.

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You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.

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We move now to the cruise line industry and Carnival. This week, Carnival raised it's full year earnings outlook after strong demand for cruises helped it post a surprise profit last quarter.

We move now to the cruise line industry and Carnival. This week, Carnival raised it's full year earnings outlook after strong demand for cruises helped it post a surprise profit last quarter.

For more, we were joined by Brian Egg, Bloomberg Intelligence Senior Gaming and Lodging analyst.

For more, we were joined by Brian Egg, Bloomberg Intelligence Senior Gaming and Lodging analyst.

We first asked Brian to make sense of Carnival's positive results.

We first asked Brian to make sense of Carnival's positive results.

I think what Carnival is seeing is going beyond pent up demand from the pandemic to genuine, ongoing, sustainable, disposable spending on leisure travel. So they're seeing it across the board. I mean, it really is broad base. They're seeing in Europe and North America. They're seeing it for both on board spending and ticket fare gains. And they're seeing it both on new hardware and you know, kind of legacy ships as well. So it is pretty broad based.

I think what Carnival is seeing is going beyond pent up demand from the pandemic to genuine, ongoing, sustainable, disposable spending on leisure travel. So they're seeing it across the board. I mean, it really is broad base. They're seeing in Europe and North America. They're seeing it for both on board spending and ticket fare gains. And they're seeing it both on new hardware and you know, kind of legacy ships as well. So it is pretty broad based.

So is it the typical cruising customer, is it new people coming into the industry? What are they seeing here?

So is it the typical cruising customer, is it new people coming into the industry? What are they seeing here?

I think it's both. There's always a focus on new cruise customers and marketing the value relative value of cruises compared to other forms of vacation. I think it's really both. And you know, different brands attract different demographics and age groups, but you know, to the extent that it's broad based, and it seems to be happening not only in the first quarter, but continuing to the second quarter, and as Alex mentioned, next year as well. You know, I think it's we're seeing it across the board.

I think it's both. There's always a focus on new cruise customers and marketing the value relative value of cruises compared to other forms of vacation. I think it's really both. And you know, different brands attract different demographics and age groups, but you know, to the extent that it's broad based, and it seems to be happening not only in the first quarter, but continuing to the second quarter, and as Alex mentioned, next year as well. You know, I think it's we're seeing it across the board.

If we go into a real slump or if inflation stays sticky, does that affect this sustainable leisure demand the Carnival and you were talking about.

If we go into a real slump or if inflation stays sticky, does that affect this sustainable leisure demand the Carnival and you were talking about.

You know, it does. Certainly. Travel prices have increased, and we're seeing that dismanifested of the fact that Carnival raised its net revenue old growth outlook for twenty twenty four from nine point five percent to ten and a quarter percent, so they're partly benefiting from that price. But obviously, you know, inflation cost inflation does affect the disposition of consumers. But for now, at least, you know, the demand on the consumer discretionary side certainly seems to be there.

You know, it does. Certainly. Travel prices have increased, and we're seeing that dismanifested of the fact that Carnival raised its net revenue old growth outlook for twenty twenty four from nine point five percent to ten and a quarter percent, so they're partly benefiting from that price. But obviously, you know, inflation cost inflation does affect the disposition of consumers. But for now, at least, you know, the demand on the consumer discretionary side certainly seems to be there.

How about on the cost side, I'm thinking fuel I'm thinking labor. What's going on on the cost side for a lot of these crews companies.

How about on the cost side, I'm thinking fuel I'm thinking labor. What's going on on the cost side for a lot of these crews companies.

Yeah, it's a factor certainly in terms of cost positioning. They've maintained I guess i'd say kind of a stable full year unit cost growth out look of about four and a half percent or so excluding the increases in the fuel. There are some increases going on there, but they're also to some degree being offset where they can by operating efficiencies and you know where they can refinancing of debt and interesting and they've also identified just operational cost savings throughout wherever possible. So it's a challenging cost environment generally for the economy, but they are, I think, seeing pockets of opportunity to manage and mitigate that cost growth.

Yeah, it's a factor certainly in terms of cost positioning. They've maintained I guess i'd say kind of a stable full year unit cost growth out look of about four and a half percent or so excluding the increases in the fuel. There are some increases going on there, but they're also to some degree being offset where they can by operating efficiencies and you know where they can refinancing of debt and interesting and they've also identified just operational cost savings throughout wherever possible. So it's a challenging cost environment generally for the economy, but they are, I think, seeing pockets of opportunity to manage and mitigate that cost growth.

Is there a distinction between Disney Cruises and Norwegian Cruise like the ones that take it to Iceland and the Paul would go on versus the ones that like I would have to go on with my kid, Like, are there a distinction or is this like a broad stroke for the cruise like guys.

Is there a distinction between Disney Cruises and Norwegian Cruise like the ones that take it to Iceland and the Paul would go on versus the ones that like I would have to go on with my kid, Like, are there a distinction or is this like a broad stroke for the cruise like guys.

I mean, there are so many distinction across brands to give you some sense of it, you know, like domestically or in terms of US brands, they saw yields up in the quarter seven percent, European brands up twelve percent. So it's pretty broad based, with some differences in comparisons. I will say that the level of yield growth expectation, it's ten percent ish, as I mentioned for Carnival, you know, it's nine and a half percent for a while, and it's a touch above seven percent for Norwegian. And while there are differences across companies in terms of comparisons, I think you can say those are roughly in the same ballpark in terms of the inertia momentum for bookings.

I mean, there are so many distinction across brands to give you some sense of it, you know, like domestically or in terms of US brands, they saw yields up in the quarter seven percent, European brands up twelve percent. So it's pretty broad based, with some differences in comparisons. I will say that the level of yield growth expectation, it's ten percent ish, as I mentioned for Carnival, you know, it's nine and a half percent for a while, and it's a touch above seven percent for Norwegian. And while there are differences across companies in terms of comparisons, I think you can say those are roughly in the same ballpark in terms of the inertia momentum for bookings.

This is an industry. Are they building new ships?

This is an industry. Are they building new ships?

There are new ships in order, you know, the level of supply growth slows down a little bit going into next year. It's kind of like a kind of a mid single digit long term supply growth rate, which historically is actually a little bit more modern than what we've seen over some past decades. So they are building new hardware, but they're also I mean, this is kind of key for Carnival. They have been repositioning some ships and rebranding a lot of the former Costa and Piano Australia ships as Carnival brands, so in addition to some new shipbuilding, there's also some rebranding and brand positioning going on.

There are new ships in order, you know, the level of supply growth slows down a little bit going into next year. It's kind of like a kind of a mid single digit long term supply growth rate, which historically is actually a little bit more modern than what we've seen over some past decades. So they are building new hardware, but they're also I mean, this is kind of key for Carnival. They have been repositioning some ships and rebranding a lot of the former Costa and Piano Australia ships as Carnival brands, so in addition to some new shipbuilding, there's also some rebranding and brand positioning going on.

Our thanks to Brian Egg, Bloomberg Intelligence Senior Gaming and Launching analysts, and we.

Our thanks to Brian Egg, Bloomberg Intelligence Senior Gaming and Launching analysts, and we.

Have something here at Bloomberg called Bloomberg New Energy Finance. The idea behind it is to provide data on commodities, power, transport, industries, buildings and agriculture plus new technology.

Have something here at Bloomberg called Bloomberg New Energy Finance. The idea behind it is to provide data on commodities, power, transport, industries, buildings and agriculture plus new technology.

This week we took a look at the global carbon market and also some of the price trends in the US and global market.

This week we took a look at the global carbon market and also some of the price trends in the US and global market.

From where we are joined by Bocan Bloomberg bn EF lead US carbon analyst.

From where we are joined by Bocan Bloomberg bn EF lead US carbon analyst.

We first asked both to define what a global carbon market is.

We first asked both to define what a global carbon market is.

Carbon market is a large market that is growing very quickly. What I look at particularly is compliance carbon market, where we set a cap on emissions and allow entities to.

Carbon market is a large market that is growing very quickly. What I look at particularly is compliance carbon market, where we set a cap on emissions and allow entities to.

Trade under the cap.

Trade under the cap.

There are also another set of carbon market which is more focused on voluntary obligations and voluntary commitments. But the growing part here is really the compliance carbon markets, where we have seen a huge increase in not only traded value but also emissions covered. Today we have almost twenty percent of global greenhouse gas emissions covered mainly boosted by countries and regulators zero commitments. We have now almost one hundred and fifty countries with net zero carbon target and with one and forty five states and regions with a net zero carbon target as well. And with those they have been looking for different ways to reduce emissions, and carbon markets particular compliance carbon markets have become one of those tools to drive that emission reduction.

There are also another set of carbon market which is more focused on voluntary obligations and voluntary commitments. But the growing part here is really the compliance carbon markets, where we have seen a huge increase in not only traded value but also emissions covered. Today we have almost twenty percent of global greenhouse gas emissions covered mainly boosted by countries and regulators zero commitments. We have now almost one hundred and fifty countries with net zero carbon target and with one and forty five states and regions with a net zero carbon target as well. And with those they have been looking for different ways to reduce emissions, and carbon markets particular compliance carbon markets have become one of those tools to drive that emission reduction.

So there isn't a federal carbon market for the entire US. It's state by state.

So there isn't a federal carbon market for the entire US. It's state by state.

Yes, so right now we don't have.

Yes, so right now we don't have.

To decide that which is weird because we all breed air and it's all the same air.

To decide that which is weird because we all breed air and it's all the same air.

That's also weird.

That's also weird.

But somebody to explain what a carbon market is.

But somebody to explain what a carbon market is.

So the carbon market, basically it's a regular set of target and there are two types of carbon markets. So there's a cap and trade where the regular set a cap and the entities under the cap trade with each other.

So the carbon market, basically it's a regular set of target and there are two types of carbon markets. So there's a cap and trade where the regular set a cap and the entities under the cap trade with each other.

So the just passed for the second.

So the just passed for the second.

So basically that means that a company is only allowed to have x amount of emissions, say a year, and then if they go over that, they have to trade those emissions and spend money buying them to then say, look I've offset that.

So basically that means that a company is only allowed to have x amount of emissions, say a year, and then if they go over that, they have to trade those emissions and spend money buying them to then say, look I've offset that.

Yeah, okay. It really actually depends on what kind of carbon markets. So there are two.

Yeah, okay. It really actually depends on what kind of carbon markets. So there are two.

Cap and trade is Basically you set a cap on over all markets, so it's comprising of all the sectors that you want to set a cap on. Then it doesn't really matter which company reduces. The advantage here is really that the one who has the cheapest abatement options they reduce first, and those that are more hard to abate they can basically chill and pay for the permits to pollute. Meanwhile, the cheaper sectors would abate for them.

Cap and trade is Basically you set a cap on over all markets, so it's comprising of all the sectors that you want to set a cap on. Then it doesn't really matter which company reduces. The advantage here is really that the one who has the cheapest abatement options they reduce first, and those that are more hard to abate they can basically chill and pay for the permits to pollute. Meanwhile, the cheaper sectors would abate for them.

There are also other types of carbon market is.

There are also other types of carbon market is.

The other type would be a baseliner and credit where it's what you mentioned. You're start a baseline and then you if you're above the baseline, you have to buy credit. If you're below, then you can sell into that market and make money.

The other type would be a baseliner and credit where it's what you mentioned. You're start a baseline and then you if you're above the baseline, you have to buy credit. If you're below, then you can sell into that market and make money.

Exactly exactly.

Exactly exactly.

I'm just a busy Google maps Finland because bo, you grew up in Finland. Yes, I mean I had to Google Map because I think I kind of knew generally part of the world where it was. But go on, olex you continue because this is fascinating to.

I'm just a busy Google maps Finland because bo, you grew up in Finland. Yes, I mean I had to Google Map because I think I kind of knew generally part of the world where it was. But go on, olex you continue because this is fascinating to.

But actually it's an interesting that you wind up in this industry coming from Finland, because I feel like the Scandinavian countries have done really well when it comes to managing their carbon emissions. Why do you think that they've done so well versus the rest of the world.

But actually it's an interesting that you wind up in this industry coming from Finland, because I feel like the Scandinavian countries have done really well when it comes to managing their carbon emissions. Why do you think that they've done so well versus the rest of the world.

I think at the end of the first is that Infinland or in Scandinavia, we have the motivations, so that first you start with the target, and.

I think at the end of the first is that Infinland or in Scandinavia, we have the motivations, so that first you start with the target, and.

That's a government part right like you, they had strip government targets and they've had them for a while.

That's a government part right like you, they had strip government targets and they've had them for a while.

Exactly, and then you find different tools that will guide you help you to get to that target. So pretty much is like a fitness plan, when you first set your fitness target and then you find the different tools to guide you there. And in Finland there in carbon markets, really we can't really deliver alone those nes target or whichever target you have set. We do work in collaboration with other policies. For example, you usually have subsidies for different technologies for carbon capture, hydrogen.

Exactly, and then you find different tools that will guide you help you to get to that target. So pretty much is like a fitness plan, when you first set your fitness target and then you find the different tools to guide you there. And in Finland there in carbon markets, really we can't really deliver alone those nes target or whichever target you have set. We do work in collaboration with other policies. For example, you usually have subsidies for different technologies for carbon capture, hydrogen.

Or renewable energy.

Or renewable energy.

In addition to having a carbon market, the advantage really with a carbon market is that you have a price transparency. You typically when we talk to people, they don't investors or policy makers or just normal people in the in the society. They don't know what the carbonization means and what it costs, and carbon market helps there. It helps bring that transparency and bring a number of value to what decarbonization mean today and in the future. Particularly it's in the future that's the area where a carbon market can help with because what for example, those carbon prices that you see today, we have seen just in America, we have seen those compliance carmerace. The California's price has doubled since twenty twenty one. Now we have drifted slightly downwards, but we had a record of forty four dollars per ton this year, which is quite significant. And we have seen here in Northeast. U asked, there's the.

In addition to having a carbon market, the advantage really with a carbon market is that you have a price transparency. You typically when we talk to people, they don't investors or policy makers or just normal people in the in the society. They don't know what the carbonization means and what it costs, and carbon market helps there. It helps bring that transparency and bring a number of value to what decarbonization mean today and in the future. Particularly it's in the future that's the area where a carbon market can help with because what for example, those carbon prices that you see today, we have seen just in America, we have seen those compliance carmerace. The California's price has doubled since twenty twenty one. Now we have drifted slightly downwards, but we had a record of forty four dollars per ton this year, which is quite significant. And we have seen here in Northeast. U asked, there's the.

Power market, carbon market and.

Power market, carbon market and.

The value has tripled since twenty twenty one, really highlighting that the price for decarbonization has increased.

The value has tripled since twenty twenty one, really highlighting that the price for decarbonization has increased.

And it is important for these.

And it is important for these.

Dates about some of the huge developing economies like China, like India. Are they worried about their carbon emissions?

Dates about some of the huge developing economies like China, like India. Are they worried about their carbon emissions?

Are they doing anything? Yeah? Yeah, they are healthy and as well.

Are they doing anything? Yeah? Yeah, they are healthy and as well.

Okay, they have like China has done quite a lot in helping the energy transition globally. Well, first, they also have a carbon compliance carbon market they started, yeah a few years ago, and in terms of covered emissions, it's actually the world's largest.

Okay, they have like China has done quite a lot in helping the energy transition globally. Well, first, they also have a carbon compliance carbon market they started, yeah a few years ago, and in terms of covered emissions, it's actually the world's largest.

Everything was trying to it's.

Everything was trying to it's.

The largest, so it's four gigatons of emissions covered. It's only power sector at the moment, but they are looking into expanding it to cover industries as well, like cement. One of the things that has also drive in this carbon market expansion is not just the net zero targets that we have been talking about, but also there have been more carbon border adjustment mechanism being introduced. So you started first with their carbon border tariff and now UK also start is looking into setting one and announced that last last December.

The largest, so it's four gigatons of emissions covered. It's only power sector at the moment, but they are looking into expanding it to cover industries as well, like cement. One of the things that has also drive in this carbon market expansion is not just the net zero targets that we have been talking about, but also there have been more carbon border adjustment mechanism being introduced. So you started first with their carbon border tariff and now UK also start is looking into setting one and announced that last last December.

And there are also like Canon and.

And there are also like Canon and.

Australia looking into this and US we are also looking into it, but it's maybe hardier because we don't have as I mentioned before, we don't have a federal carbon pricing.

Australia looking into this and US we are also looking into it, but it's maybe hardier because we don't have as I mentioned before, we don't have a federal carbon pricing.

Yeah.

Yeah.

Thanks to both Ken Bloomberg b and E F lead US carbon analyst.

Thanks to both Ken Bloomberg b and E F lead US carbon analyst.

This is the Bloomberg Intelligence podcast, available on Apples, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on bloomberg dot com, the iHeartRadio app tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal

This is the Bloomberg Intelligence podcast, available on Apples, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on bloomberg dot com, the iHeartRadio app tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal