Transcripts For BLOOMBERG Bloomberg Best 20240714

Confidence vote, it has to be the first couple of days that parliament returns. Sort throughs another barrage of earnings reports. The large numbers are catching up. We are calling get the star worlds worse stumble. Ultimately, china and the u. S. Are aligned at the hit economically. I dont think the feds job is to make sure there is never a recession. It is all straight ahead on bloomberg best. Hello and welcome. This is bloomberg best. Lets start with a day by day look at the top headlines. After donald trump announced new tariffs on china last week, beijing bowed to retaliate and the response sent shockwaves through global markets. Stocks in the red this morning on the fears that the u. S. China trade war an fell after chinas yu below the seven per dollar level, the weakest in a decade. Meanwhile, china has state owned enterprises for american agricultural products. What is china trying to signal today . They are sending a message that they are going to up the ante when it comes to trade war and what they can do on the currency side of things. We have had news that they are not willing to buy u. S. Agriculture products. President spoke this morning and this is his response to the issue. He said china dropped the price of their currency to an almost historic low. It is called currency manipulation. This is a major violation which will greatly weaken china over time. Here we go again. China would not use foreign exchanges at all and saying in a statement, i am fully confident that the yuan will remain a strong currency amid external uncertainties. Youre looking at a sea of bright red across europe. Is it fair to say that markets did not see the chinese as fleeting in this way . The currency is seen as a last resort. We have heard time and time again from china that they would not weaponize the yuan. China hit back in a way that is very impactful and is catching a lot of peoples attention. Tariffs ais make the 100 certainty . We were hearing from u. S. Administration officials that if the chinese would go ahead and deliver some big buys of soybeans and other agricultural goods, may these tariffs would be avoided. It is not going to go down that route. It has kind of lost hope for a deal. That seems to be what the markets are latching onto. U. S. Stocks are latching toward the heading toward the biggest selloff. The dow down more than 900 points. The dow moves 735 points. The Trump Administration had formally formerly labeled china a currency manipulator. In response, china has taken stops to slow the u. S. Dissent by fixing the currency to below seven per dollar. The u. S. Labeling china a currency manipulator, this has significance, does it not . The semblance is significant in terms about the rapid deterioration of relations between the u. S. And china. In terms of the impact, the actual impact on china, it is limited. A sethis does is triggers of negotiations and conversations between the u. S. And imf about what china is doing. Of course, there are potential penalties that the u. S. Can impose on china. China already faces significant u. S. Tariffs. What we are seeing is a message from the pboc that the yuan has not become a oneway bet. It is a shot across the bowels. The stock market bounced back today. I am feeling that maybe this is recoverable after all. It is hard to see how that happens when people get doug in. It becomes a personal confrontation between the chinese president and trump. Neither person wants to back down and lose face. Trade should not be personalized that way and i am afraid that is what happened. Central banks have taken center stage today. The yuan has cut its rates by an unprecedented 35 basis points. In new zealand, the fed announced a larger than expected rate cut there. 50 basis points. Central banks are really willing to go big. Sayingjames bullard there is no reason to pile on rate cuts. Markets dont seem to be buying that. Traders are pricing at 100 basis points at rate cuts from the fed over the next year, that will be on top of the production we got in july. Is central message banks are willing to go big. They are worried about what might happen. They are trying to file personal advantage. They are not going to say it but they want to weaken their currency so they have exports going into whatever happens. The problem is that everybody if everybody goes in that direction, you have a currency war that leads everyone into recession. I am looking at the u. S. Three months, 10 your curve. Surge isarch much more into negative territory. Still down 34. 5 basis points below zero. If that isnt an inverted curve, i dont know what is. Is the biggest five date drop since 2011 for the 10 year. The speed of that move is something that speaks to how entrenched the lower forever stance with regards to policy rates are. If that is the global backdrop, it is just a matter of time until that continues to way on the u. S. Do we have this trade war but the Global Economy is in even worse position going into it then we had thought. U. S. 30 year yields closing in on their lowest level ever. What would it take for that to happen . Is probably not around the corner. What it would take is a serious downturn in the economy, a recession in which the fed would take the rates all the way down to zero. At that stage, we may well have seen negative yields in the u. S. , as we are seeing them in many other parts of the world. Afte. Yuan rose it is the first time in over a decade that the pboc set the reference rate weaker than seven per dollar. Does this mean we have seen stabilization in the yuan, why has the market taken it that way . The key take away from today is they fixed it stronger than the market anticipated. The signal is sure, they are allowed to move in a certain direction. They want to keep something of a floor under it too. They have been preaching they want to keep it stable. They dont want to let perceptions run away, in terms of a oneway bet on the yuan. We have equities extending. Up to 2 . Can you believe that it is just monday . No. Prices contracted for the first time in nearly three years. As you say, producer prices, those factory prices dropping 0. 3 for the month of july, below the forecast. Suggests is that profit for some of these Industrial Companies will be squeeze. There is divergence between the factory prices and Consumer Prices. You saw Consumer Prices taking up 2. 8 . To post something of a conundrum for policy makers terms of any stimulus, additional stimulus they pump into the system as the trade picture looks more unsent uncertain. The white house is holding u. S. Bout licenses for companies to restart businesses with huawei. This comes after beijing said they were hoping for purchases of u. S. Farming goods. Does this show an increase of willingness on the part of the u. S. To find a way to negotiate with china . It is another sign that things are falling apart. We had two all the branches coming out of the g20. There was going to be some limited resumption of business with huawei. On the chinese side, it was going to be a resumption of agricultural purposes. We have seen both of those the taken away. That is not a good sign that we have these talks in september that her scheduled. Big questions over whether they will actually go ahead. Ahead, as we review the week on bloomberg best, howard marks shares his thoughts during a wild week for global markets. Weighs in onummers the risk of currency wars. Up next, more of the weeks top is this headlines with earnings reports. With the debt they have and the stock price where it is, it will be difficult to do another deal. This is bloomberg. Nejra this is bloomberg best. I am nejra cehic. Lets continue our global tour of the weeks top business stories with a deep dive into a flood of earnings reports. Hsbc was among several european banks releasing results. They surprised with an executive shakeup. John center is stepping down as chief executive hsbc. His surprise departure happens after 18 months in the top job. That is as the Bank Announces a Share Buyback of up to 1 billion. We had heard the possibility of differences. How much of the focus will be at someone who can shakeup the u. S. And asian franchises . That was unexpected. According to reporting they may potentially look outside as well for the First Time Ever for hsbc. We may see a ceo that is not coming from the institution. That will be a big change for the bank. The u. S. Businesses a hot topic for the bank because returns have not been very positive there. They also have liquidity they would like to use. The business is not very competitive compared to the big u. S. Banks. There are few decisions that need to be taken. Commerzbank says it is becoming tougher to reach a target for higher profit this year. The Bank Reported a fourth straight quarter of falling revenue. Global trade tensions hit commerzbanks key corporate client unit in particular and operating profit fell. How hard is that to do business in this negative rate environment . It is getting harder to a certain extent, especially if you believe a forecast like this. On the other hand, i think it is a reflection of what we have are seeing over the last year. The question is not how hard is that, the question is what do you have to offer to counter the issues . And i think to a certain extent growing with customers has been a very successful way of dealing with it for the last year and quarter. Abn amro has beaten its estimates on the bottom line and says it is well placed to boost payouts the second year. 693 Million Euros at the bank gain market share in mortgages. The group did warn that lower Interest Rates are having an impact on margins. Please tell me you can see a glint of light on the revenue story at abn . Good morning. Our results are good this quarter. Our revenue is good. Particularly on the net income interest side. Despite low rates our Net Interest Income was up quarter on quarter and year on year. There are few oneoff in the area. We see our nii Net Interest Income underlying pretty stable. But over time, quarter on quarter, you will see the effect of low rates impacting deposit margins. That is why we have called that out this morning. Operating income for the First Quarter that beat the highest estimate. This comes as the banks vision fund expanded its Financial Technology portfolio with a 200 million funding rounds. What honda did to the Auto Industry in the 1970s, softbank is doing to the entire Venture Capital community now. It is probably the most disruptive Japanese Organization since japanese autos came in and disrupted the u. S. Auto market. You are hot, cloudbased sass company and your raising 50 million at a premoney valuation of 100 million. Softbank comes in and says will give you 150 million premoney valuation but we are investing 100 million. And by the way if you do not say yes and 48 hours, youre going to the Second Player in the space and giving them 100 million. You are seeing american vc funds that used the former masters of the universe elbowed out of the way by softbank. It is the disruptor in the space. Uber with second results including a 5. 2 billion loss. Sales, bookings, and monthly users all missing estimates. Shares down to the lowest levels since may. What are your biggest takeaways . The bookings and wide growth look good. It was just a revenue miss and part of that was the use of subsidies in ridesharing and for deliveries. And their free delivery. That is where they have been using subsidies and seeing pricing pressure. Food deliver is a fragmented market. On the core ridesharing side theyre doing fine. It is just the numbers are catching up and bookings are up 37 . To me it looks fine. Shares of lyft are higher after the Company Reported a secondquarter loss and sales better than what analysts expected. The overall numbers are good. Is that impact the profitability . Lyft wants to see moving towards the path of profitability. The adjusted loss numbers are better than expected. What is really key here is that lift is saying, we think our annual numbers are going to be in some cases hundreds of millions of dollars better than we expected. They are sort of improving their forecast. They beat analyst expectations. Thats why we are seeing this reaction. Shares plummeting in late trading. The result fell short of analyst estimates. Earnings squeezed by falling themepark attendance, spending on new streaming services, and a costly flop of a movie inherited in the acquisition of fox. I dont understand. Disney opened the most anticipated themepark attraction ever, star wars. Attendance dropped . Yeah. We are calling it the star wars stumble. Weve written about this. There were social media posts saying, theres nobody on main street. Theres no wait for these rides. There were a lot of explanations given. Bob eisner had a mea culpa. He said, we tried to hard to limit attendance because we thought the crowds were going to be so big. They had a reservation system for the attraction. People just stayed away. The same thing at walt disney world. People were staying away because they are waiting for that galaxies edged open later this month. As a group is weighing offers to sell some of its businesses with the ceo saying units with no clear future cant keep earning money. This comes amid an economic slowdown in germany which is added to concerns for the industrial conglomerate. Its market cap has been cut in half in the past 12 months. Theres a possibility the group could lose its place in the dax. It will present ahead with plans to lift its elevator business. Are all these moves that youve announced today going to be enough to turn the company around . I clearly think so. If you take a look behind the current figures, you see some Strong Development as well. Although the overall numbers are clearly distorted by the weak Automotive Industry and the problems in steel. You see that in elevator. We improved margin in one quarter. We are clearly looking ahead. That weekend fulfill our guidance for the full year. We have seen a turnaround in the margin. Kraft heinz is feeling the heat from wall street. The packaged food company plunging at one point nearly 16 to a record low after reporting earnings for the First Time Since february. The results were disappointing. Its a rough welcome for the new ceo who said, the level of decline we experienced in the first half of the year is nothing we should find acceptable moving forward. There are definitely problems here. Going forward one of the Biggest Challenges is that they are in a tough position as far as making a major acquisition. That was always the goal here. Going back to february of 2017. They tried to buy unilever. They couldve gone back to cutting costs which is what they do best. With the debt and stock price where it is, it will be very difficult to do another deal. That leaves the new ceo to try to get these brands growing. When you look at their brands, theres a lot of stuff there that is out of step with where the consumer is these days. Nejra this is bloomberg best. Global markets took a onetwo punch this week from escalating trade tensions and steepening Central Bank Rate cuts. In a conversation on thursday, oaktree capitals howard marks told Erik Schatzker how he thinks things will play out. Usually, we stimulate the economy when its doing poorly and we want to wake it up from the doldrums. We generally dont stimulate the economy after 10 good years. We usually accept that there will be an ebb and flow to the cycle and that there might be a justified recession. We have the lowest Unemployment Rate in 50 years. You usually dont stimulate at that time. The point is that the fed can stimulate. Should it do so . Is it the feds job properly . I get the feeling you dont think it should. I get the feeling, no. I dont think the feds job is to make sure theres never a recession. What the fed chair tends to say, and jay powell said it last month, i have a quote in there from september 2007 where they said we will do what it takes to keep the expansion going. Is it the feds job to keep the expansion going forever . I dont than so. So. I dont think so. If i ran the fed, im not applying for the job, when the economy is roaring, i would try to cool it off so theres not too much inflation. When its really weak and not creating jobs, i would stimulate it. In between, i would leave it alone. If the fed keeps cutting rates, what does that mean for investors . The 10year is at 175. Bonds are paying 3 . High yield is on the order of 6 . It means that savers and lenders and people with money are going to have trouble getting good returns. All the returns emanate from the base rate which is what the fed says. The lower it is, the lower the perspective return on everything is. The process of lowering the rates causes assets to inflate. There will be more wealth piled up by the people who have assets. Itll be harder for people who just have a little bit of savings to get a return. Nejra coming up on bloomberg best, more of the weeks top stories in business and finance. Conflict continues on the streets of hong kong. A bloomberg scoop explains why Asset Managers are on the break of crisis. Brink of crisis. More compelling conversations. Malaysias foreign minister says his country will become Collateral Damage in the trade war with china. Its very unfair. You are being a big bully. Nejra this is bloomberg. We believe in education built for all people. This is bloomberg best. Im nejra cehic. Nominated the discussion this week, and while the u. S. And china are the antagonist, other nations are feeling economic fallout. Foreign investor says he the thing we are most worried about is should there be iflaterally sanctions, and we continue to trade with china. We want ton is continue trading. Some of the countries are deemed as having deficits, the likes of china, germany, china, those area, malaysia, among those in the top, could be in the likes of india. Are you concerned that the u. S. Will take action against them . Yes, but if this thing were to happen, then we just have to tell them you are just being very unfair and a big bully. Do you think u. S. Will buy that . The Trump Administration decision to label china a currency manipulation raise the currency raise the temperature. Among those who raise their eyebrows was our guest, he discussed this on daybreak. Now declaring china to be a manipulator raises the specter of some kind of further retaliation, raises the specter of a situation where it will be more difficult to on ground on grounds of pride for china to demands and. S. Aerefore raises the risks of cycle of financial conflict, and that is coming at a time when we are already 10 years into expansion when the fed had already recognized growing widths to the current expansion, and when given how low Interest Rates already are, if there were to be a downturn, there is much less room for monitoring policy to act than has been the case larry, you mentioned a designation by secretary mnuchin yesterday, was there justification for it . You saw the pboc really weekend yuan. Te for the no i dont think there was much justification. Currency manipulation is a legitimate issue. We tend to say that a currency is being manipulated and a few conditions are met. In the country in question is renting a substantial surplus. China used to run a substantial trade surplus. It does not any longer. In the country in question is trying to get its currency, when it is selling its currency into the market to push its value down. Beencent months china has entering the market not to sell its currency but to buy its currency. China has been propping it up. When you are propping up your currency, you are not running a trade surplus for you are not manipulating the currency on any definition that is understood and accepted in the financial community. European banks struggle as a Central Banks push rates lower and lawyer. This week we had commerce banks cfo speaking frankly. Matt asked him about what he would say to paul he might policy makers about rates and impacts. What really changes if you lower the rates by another 10 or 20 basis points . Is there any house that you want to buy or whatever . From my point of view, its unclear what the benefit of this lower rate is. Nevertheless, if it happens, you need to deal with it. It will put up additional pressure on the sector in general. Theill need to see how answers can look like. The idea is they have no choice, because of the issues, that helps your customers continue in business. Does that not make sense to you . In general that makes sense. Thats what the benefit of the last year is. His the question is, does the additional create an effect or the Collateral Damages which it also produces, do they really outweigh the positives . Fiscal sidet is the of things . I spoke with a lot of schultz last week. He said there is no cryan financial crisis. Germany doesnt need additional spending. Hes not going to boost his spend on infrastructure. Think germany needs to do that . . No i dont think theres anything we can see right now. The economy is growing this year , at a much slower pace. We will probably see some contraction in q2. We are still going for Something Like a growth rate like a percent for next year. At least that is the latest expectation. In that sense, doing a Fiscal Stimulus Program would be helpful and will come especially for the industrial basis, but in total i think you need to wait what is being done on the Monetary Policy side. It is unclear whether you can really add with additional stimulus. Finally, a view of the weekend markets, Erik Schatzker set down for an exclusive conversation with henry mcveigh. China istely, i dont going to do a large devaluation. They are trying to build a consumer economy. If you weaken your currency, that hurts you. They are sending a shot that they have other tools to match what President Trump is doing on the tariff front. Speaking of other tools, lets talk about that. If this situation escalates, what happens . Experts s. Halt exports of technology to china . Bydoes china retaliate cutting off experts of rare earths . Economy in thes. Military . I think you will see a pullback in capex from all sides. Most executives are watching the situation. One of the facts that we feel strongly about, if you had all of the terrace and then you say trump does auto tariffs on top of that, that is still less of an impact than a 10 pullback in capex. So theres less capital coming into venture and less in real estate. How long until western capital is no longer welcome in china . Is a coldople say it war, its not like it was with the u. S. And russia. China and the u. S. Are aligned at the hip economically. The idea that chinas massive consumption population not want goods is unfounded. Thats not going to happen. What you need to do is aligned with the government and the private sector need that expertise. I think youll see a bifurcation where some Companies Double down on capex and they can really partner with the chinese economy to do well. There will be others that fold their tents. This is bloomberg best. Im nejra cehic. Lets resume our wrapup of the weeks top news in business, finance, and politics in hong kong. Protests show no signs of abating. Disruptions in hong kong are entering a ninth straight week. Thousands of protesters have moved to shut down the Asian Financial hub, leaving traffic stalled, subways in operable. Over 100 flights were canceled. This is a movement that is not slowing down because they feel that the government is not listening to them. Really, bringing a city of 7 million to its knees. It was too full. They called for a general strike. Thats what this banner they have been handing out. Strike at work, school, the market. All the while, keep the pressure on chief executive carrie lam to withdraw that controversial extradition bill, which kicked off all of these protests. On the other hand, you have a hardcore protesters who have pitched battles between protesters and police. We heard from carrie lam, and she says the protesters are ruining hong kong. The protesters say they will not back down. Jeremy corbyn is hardening plans to block a no deal brexit. He signals he will call a confidence vote in the Prime Minister when Parliament Resumes in september. He has until september 18 to show we can command a majority in the house of commons. The following day is the last date to trigger a general election before the brexit deadline. What do we know about what has to happen when it parliament wants to block no deal . The timeframe is extremely tight. That is why, if theres going to be a confidence vote, it has to be the first couple days that parliament returns. After that, we are in slightly uncharted territory. In terms of how the fixed Term Parliament act plays out, the 14day window applies to johnson to try to form a new government. It also allows tory rebels, labor to form a coalition that would prove that they have the majority as well. Therefore, it will be an intense period of horsetrading, and what can people coalesce around a single position. Britains economy saw a surprise contraction last quarter as manufacturing shrank. That sent the pound following and raises the stakes for Boris Johnsons government as it seeks a fast exit from the european union. Its a bracing reminder to Boris Johnson about what the markets do. In the end, its all fine having this great laugh because no deal brexit and talking about boosterism and you need to get ready, put money aside, and all these things. Actually, no deal brexit, there isnt an economist on the planet who thinks that will not be a painful moment. Matteo sal vini is pulling the plug on italys ruling coalition. He has called for early elections, saying the government has no longer got a majority. That sent italian yields surging. And, the spread widening. The first question needing resolved is when is this parliamentary debate going to take place . Its the midst of summer vacation. Parliament is on recess right now, technically. They have to be called back. Salvi is pushing for them to get back in their seats next week. And have a vote as soon as possible on this. It looks like he has the sufficient votes to bring down this government. Its a matter of time. The indian Prime Minister is promising a new era in kashmir after revoking its special status following seven decades of autonomy. He says it will rid the region of separatism and terrorism. What was the thrust of his argument . Hes saying that hes bringing kashmir into the mainstream governance of india. So, no longer will it be a state with its own separate autonomy. Instead, it will be subject to the same laws and regulations as the rest of india. He says it will eliminate corruption and domestic politics. For kashmiris, it has been a days long curfew, phone and internet blackouts, and have seen thousands of extra troops streaming into the valley. They are worried about what is to come. Asset managers are facing an existential crisis. Investors have been shifting their money into passive funds for years. This push has led to the loss of thousands of jobs and forced largescale consolidation. The industry is on the brink of a shakeout. Only the strongest will survive area what surprises did you find in your research . The industry is struggling. They have been pushed to a tipping point. Active managers have been charging too much for subpar returns for too long. Investors are voting with their feet and pouring out money for passive funds for some time. Its a fraction of the cost of active managers. In some cases, they have outperformed. Industrywide, that has led to fee compression. Thousands of job cuts of the Asset Managers, and wide consolidation. Smaller players will continue to be absorbed by the larger competitors. Some may disappear. Wall streets trading desks endured the worst first half in a decade. Bonds are poised to take a hit. This is leading to a collective 5 billion drop in firsthalf trading revenue at wall streets major banks. It was the worst first half in over a decade when the banks reported, a couple weeks ago, we saw that. We also saw cuts across the industry. Here, these traders are getting less and also they are reducing headcount. That can reduce the cost to keep these things profitable in a lower revenue environment. Hedge funds and private equity might go up a bit. As much as 5 on positive inflows. Then, we also have retail and commercial bankers who could also see as much as a 5 increase, and that is because that side of the bank has really been driving profits at these big banks. Thats while the Capital Market site is having more muted revenues. Crude oil is extending losses for a third day. Brent crude has lost almost 5 over the last two sessions. It entered a bear market on tuesday. Though the trade war between u. S. And china continues to escalate, oil is a major casualty. The trade war is dominating any moves in energy markets. West texas intermediate, the u. S. Benchmark, is down 0. 5 today. It fell 1. 9 yesterday. Brent, the global benchmark, has fallen 20 since an april peak. It moved into a bear market yesterday. If donald trump implements the additional trade tariffs he has threatened that would be scheduled to start on september 1, a lot of analysts have speculated that china would slap tariffs on u. S. Crude imports. That is the next factor people are looking at. It certainly could have a larger economic impact. Thats what people are looking to next in energy markets. Oil prices are rebounding after bloomberg reported that saudi arabia said it is considering all options to stem the decline. The gains halt a threeday slide in crude prices. The biggest tool that saudi arabia has is managing supply. But, if you look at whats happening under opec plus agreement already, they are cutting more than what they agreed to. Whether they have extra wiggle room to cut supply there is a big question. The details are vague. They are talking about using all options. They are talking about speaking to other producers. We dont know who they are or what those options are at the moment. Gold staging a comeback, rallying to the highest level since 2013, topping 1500 as demand for the traditional haven rises. Gold up 17 year to date. Gold is an interesting one. You are looking at other commodities. Gold has performed really well. Thats because it is traditionally a safe haven investment. At a time where we face things like the trade war, the chance of a no deal brexit later this year, tensions in the middle east, just to name a few of what we are facing right now, it is no wonder that investors are flocking to precious metals. The philippines is the latest to join the wave of Central Banks cutting rates to encounter growing economic risks. The governor there told bloomberg he sees further easing coming as soon as next month. Right now, what we are contemplating is another rate cut of 25 basis points. It could come in as early as september or it could be in the fourth quarter. We intend to cut further our reserve requirement. As you know, we started easing from 2018 and 2016 now. Another possible 100 basis points cuts before the end of the year. We see volatility. It is certainly in certain asset classes. This is the volatility and correlation analysis tool. This is about fx markets and the level of implied volatility. In particular, im focused on the part that says range, the blue dots and red dots. The blue dots are ahead of the average red dots. The now implied volatility is higher than the average. I want to go to a bloomberg insight terminal function, everyone worldwide uses it. All you need to know is that this is what the pros look at, the curves. The two tens, the threemonth 10, and the headline this morning is the 210 spread breaking to basis points. It is flattening out with a vengeance. There are about 30,000 functions on the bloomberg. We always enjoy showing you our favorites on bloomberg television. Maybe they will become your favorites. Heres another function you will useful, quic go. It will lead you to quick takes where you can get fast insight into timely topics. Heres a quick take from this week. They can litter sidewalks, menace pedestrians, and endanger their writers lives. Over the past year, electric scooters have popped up in cities around the world, inviting a wary public to hop a ride as regulators scramble to regulate them. This may come as a surprise that the escooters could be exactly what trafficked cities need. This is your bloomberg quick take on these scooters. Download an app, find a scooter, unlock it and go for a ride. When you are done, leave it behind. Rides can cost less than two dollars. There is bird, lime, and both uber and lyft have scooters now. They are new. By their essence, they are all over the place. If you are not using them, they get in your way. Because people are just learning how to use them, they tend to ride them in obnoxious ways. In a lot of places, they have become a symbol of the Technology Industry which annoys people. At launch, cities like cleveland banned them. San francisco halted operation for several months to create a permit system that caps the number of scooters allowed. Bird and lime offer scooters in more than 40 cities. Despite the controversy, escooters have their defenders. In dense urban areas, cars arent the fastest way to get around. Mehdi cities have turned to bike share systems and dedicated bike lanes because they take up less space than cars. Some urban planners see escooters as part of the future of city transportation. The hope would be that you would eliminate shorter car trips. That would get a lot of cars off the road, create protective lanes and so on. That would in turn drive the demand for scooters. A virtuous cycle. Despite bird and lime being valued at more than 1 billion, it is too early to tell if they will become viable businesses. The things you look at is how long it takes to pay off a vehicle and how long a vehicle stays on the road. We dont know exactly how much this is. It does seem like you can pay these things off fairly quickly. They are relatively inexpensive. They get completely trashed very quickly. You will take your of your own bike or car. No one ever washes a rental car. That was just one of the many quick takes you can find on the bloomberg. You can find them at bloomberg. Com, along with all of the latest Business News and analysis 24 hours a day. That will be all for bloomberg best this week. Thank you so much for watching. I am nejra cehic. This is bloomberg. Emily im emily chang and this is the best of bloomberg technology. Coming up, this week, two Mass Shootings in the u. S. Left dozens dead. President trump has called on social Media Companies to do more to identify mass shooters before they strike. One of the gunmen posted a manifesto online. We talk with ellen pao, the former ceo of reddit. Plus, uber and lyft post earnings