0:02

Welcome to the Bloomberg Penel podcast. I'm

0:04

Paul Sweene. You, along with my co host Lisa Brahma

0:06

wits each day we bring you the most noteworthy

0:09

and useful interviews for you and your money. Whether

0:11

at the grocery store or the trading floor. Find

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or wherever you listen to podcasts, as well as at Bloomberg

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dot com.

0:21

Let's welcome to Jenny Leonard. Jenny's a Bloomberg

0:24

trade reporter UH and Nicholas nicka's

0:26

co founder Data Trek Research LLC. Uh

0:29

and Nick is also a Bloomberg Opinion calumnist.

0:31

Jenny just wanted to get your thoughts. I know

0:33

President Trump just now made some comments

0:36

about trade, um, you know, suggesting

0:38

that perhaps this September meeting may not happen.

0:41

What is your sense of kind of the next couple

0:43

of steps here between the US

0:45

and China on trade. Yeah.

0:48

Look, that he said that the September meeting

0:50

might be off is actually one of the

0:52

things that I noted in my notebook as

0:54

news because we've heard and

0:57

when he escalated the tariffs last

1:00

week up until now the September meeting

1:02

is on. We had you know, Peter Navarro, Larry

1:04

Cudlow, everyone reinforced that

1:06

narrative saying, the Chinese are still

1:08

coming here. You know, we are doing what

1:11

we're doing, but we're we still want to go back to

1:13

the table and we're hoping that China is going to

1:15

make the agg purchases that promised. So

1:17

the fact that the President now said, well, you

1:19

know, if we don't have that meeting, um,

1:21

then we're still fine, that's news.

1:24

At the same time, I would say the president always

1:26

is a good cop bad cup in basically the

1:28

same sentence, So you know, the

1:30

meeting might still be on, and he just wants to

1:33

basically play it both ways. So um

1:36

yeah, Jenny, Jenny, do you have a sense

1:38

of whether Trump's advisors

1:40

are weighing in here on the moves

1:42

that he makes when it comes to trade or is this a complete

1:45

unilateral kind of negotiation and uh

1:47

tactic. That's a good question.

1:50

I think it always depends. It's a case

1:52

by case matter. Uh.

1:54

You know, for example, when you look at the

1:56

currency manipula manipulator label,

1:59

Uh, there was there are meetings about

2:01

this, you know, there were meetings about currency intervention

2:04

and We've heard different narratives

2:07

coming out of the White House from Trump

2:09

and his advisor Larry Cudlow, And you

2:11

know, now we have Trump saying no, he doesn't want

2:14

to intervene. We have you know, Larry

2:16

Cudlow and uh Stephen manutrition

2:18

also meeting with tex c Eos trying

2:20

to kind of uh find a path forward

2:22

for the WAWI licenses, and that again

2:25

was overruled by Trump, which he just

2:27

um confirmed the story that we wrote

2:29

last night, saying that there won't

2:31

be any licenses coming in the

2:33

near future because China is holding off

2:35

on a purchases. So you know, he definitely

2:39

appreciates a vivid debate um

2:41

in front of him, But then it's

2:44

always up to him. And we hear this from every

2:46

single person we talked in the administration. It's

2:48

always up to the president. Um.

2:50

So advice is is is you

2:53

know, appreciated but not

2:55

necessarily followed. So, Nick, I just want to

2:57

get your thoughts here. I mean, how do you it was

3:00

clear just if you just look at the trade Nicolas

3:03

co founder of Data check Research, which I ended

3:05

unsed before. Yeah, anyway,

3:08

so, um, the so the sense

3:10

Nick, is just kind of how you

3:12

think the markets we just saw this week from trading

3:14

up and down, up and down each day, trade

3:16

is really remains at the forefront of the market. How

3:19

are you thinking that trade is going to play into the

3:21

market going forward, because it doesn't appear like we're gonna

3:23

get any near term resolution. No.

3:26

I agree with that, and I would say that, you know, we're

3:28

seeing a pretty typical pattern for the

3:30

year in terms of volatility, in terms of narratives.

3:32

So in the beginning of the year, we had the Fed announcing

3:35

they changed their minds on rates, culminating in

3:37

the July thirty one rate cut. That

3:39

story is played. We're done with the rate

3:41

cut story in terms of supporting stocks, and now

3:43

we're going to live and die based on trade

3:46

negotiations because the other part of the equation

3:48

with the discount rate for stock earnings

3:51

is kind of off the table. So this is the one

3:53

and only issue now. So I'm trying to figure out

3:55

how much of the trade

3:57

tensions have already been baked into markets. Do you

4:00

think that any sort of complete breakdown

4:02

and lack of a deal is already in the

4:04

price of stocks. I think

4:06

that the majority of it is. We did a survey of our

4:08

clients just last week and asked them when

4:10

they thought a trade deal would happen, and the majority said

4:12

not until after after the elections.

4:15

And these are all professional investors, So

4:17

I would say that that expectation is largely

4:19

baked in. What's not baked in is what impact

4:22

that has on global growth in two

4:24

thousand twenty one, impact that has on earnings in

4:26

two thousand twenty and to what degree

4:28

it further endangers particularly Europe

4:30

in terms of over session. So, Jenny,

4:32

you want to bring you back and get your sense of as

4:35

we think about trade here. I know you follow this very

4:37

closely. Um Dan in d C. Is

4:40

this is a consensus growing that we won't

4:42

get a trade um deal

4:45

probably after the election. If

4:48

you listen to the president whose

4:50

advisors in the past couple

4:53

weeks and days, it seems

4:55

like it because he is really upset

4:57

about the fact that, you know, it seems

4:59

like and I was trying to wait him out and

5:01

waiting for a democratic president

5:04

to come in and what he says, you know, get

5:06

a get an easier pass on

5:08

on a trade deal. And the president does

5:11

have other tools in his arsenal that he hasn't

5:13

used yet. So you know, if the tariffs

5:15

go forward on September one, which

5:18

he said will be uh ten percent on

5:20

three billion, which is basically the remaining

5:22

imports from China, he could

5:24

still up that tear of rate from ten

5:26

per cent to or even higher,

5:28

you know. And there's other um

5:31

tools that the White House has

5:34

held off on uh previously

5:37

because you know, they assess their options

5:39

and said this is not the right time to do this. But

5:42

those advisors say could

5:44

be back on the table. And that's you know, something

5:46

like sanctions on Chinese surveillance

5:49

companies that we've written about, you know, months

5:51

ago, and that we're put on hold because

5:53

it looked better uh in in the trade

5:55

talks, and now it looks worse. So you know, those

5:58

could easily be back on the table. Jenny

6:00

Leonard, We're gonna let you get back to it, and we really

6:02

appreciate spending the time. We know you're always busy

6:05

trying to cover the the progression

6:07

of these trade negotiations. Jenny Leonard is a Bloomberg

6:10

trade reporter coming to us from

6:12

Washington. D C. Nicolas still with

6:14

us, Nick, I want to get your sense of

6:16

what the best trades are given this protracted

6:19

trade war that could potentially deepen

6:21

even further. What are the best assets

6:23

to own right now? Okay, so thinking

6:25

about volatility now for the rest of the year,

6:27

So let's just talk about what's going to happen for the rest of two thousand

6:30

nineteen. It seems pretty clear that you were going in for

6:32

a pretty choppy period for stocks. Bonds

6:34

are not necessarily a great trade because they've run

6:37

so far, so fast and so quickly.

6:39

So unfortunately, you're not left with a lot of great

6:41

options. Cash is one option, reducing

6:43

risk is one option. Gold has been

6:45

working for a whole variety of reasons and probably should

6:48

continue to do so because of negative rates in

6:50

Europe. But there is just

6:52

not a great selection of choice aside

6:54

from just reducing risk, because as

6:56

we saw today, as we've seen this week, you know that

6:59

the through the whole the market story has

7:01

flipped and is now one purely

7:03

about what's going to happen to the global economy in the face

7:05

of trade wars. So, Nick, even if you want

7:07

to get a little bit defensive, and in the equity market,

7:09

some of those classical defensive sectors, you

7:12

know, they kind of bringing a valuation risk that you don't

7:14

typically have historically when when you transition

7:16

into those names, how do you kind of think about the defensive

7:18

sectors, whether it's utilities or real estate.

7:21

Yeah, that is exactly the right point. You know,

7:23

the classic defensive players are already

7:25

extremely rich on a p basis and

7:27

even on a yield basis in some cases. And

7:29

that's why it's hard to recommend any of them. I think, if you have to

7:31

put a finger on one, if you really many defensive utilities

7:35

of revenues are in the US at least as no international

7:37

exposure, and you get a yield pick up. But

7:39

aside from that, it's really tough. That's why you

7:41

know, we're telling clients just d risk, take

7:43

equity risk off the table. So

7:46

here's the reason why I struggle with that.

7:48

You've got all these companies that have been buying

7:50

back their shares and accelerating their purchases

7:53

when the market does sell off, or

7:55

at least that's Goldman Sacks analysts have

7:57

been putting out there. Doesn't that

7:59

provide I had enough of a technical boost

8:02

that stocks are going to be fine. Public equities

8:04

are going to be okay as long as there

8:06

isn't a material deterioration. Yeah,

8:09

two points. First look at Q four two eighteen.

8:11

Buy backs were very heavy last year. Didn't help

8:13

in Q four. H Point number

8:15

two is you're right, I mean net income.

8:18

Corporate net income basically goes into dividends and stock

8:20

buybacks and nothing else, which means that buybacks

8:22

are directly quality to stock and earnings. If

8:24

you see earnings go flat, then buy backs go

8:26

flat. If you see earnings go down ten percent, then buy

8:29

backs go down fifteen because stuff to cover the dividend.

8:31

So if that's the only leverage point, and it

8:33

makes companies and stocks very beholden

8:36

to earnings outlooks, and that hasn't been great

8:38

this year. Down half a percent in the first quarter,

8:40

probably flatten Q two, Down in Q three,

8:43

probably flattened Q four. So there's really

8:45

not of incremental And you know, it's

8:47

a very good point. But at the end of the day, I still think back

8:49

the Q four last year and think that down

8:52

fifteen SMP it didn't really help

8:54

because when those selling comps as it did in December,

8:56

there's not enough buy back firepower to support

8:58

it. Real quick tenset recession

9:00

coming a

9:03

little bit less, a little bit less

9:04

than well, that's actually with

9:06

consensus. I mean, you've got economists basically saying

9:08

there's a thirty seven percent chance I believe has

9:13

a recession the next twelve months. I actually think that

9:15

might be the number according to a recent Bloomberg

9:18

survey. My mind, dads, ridiculous

9:20

things sometimes, Nicholas, thank you so much for being

9:22

with us. Nicole Is is a co founder

9:25

of Data Check Research and a Bloomberg Opinion

9:27

calumnists. It

9:42

is time where we check in with our Bloomberg opinion

9:45

columnists and uh in columns.

9:47

Right now we want to focus on the United Kingdom.

9:50

We got some data out this morning showing

9:52

the first or the first downturn,

9:55

the first decline in growth

9:57

going back since right after the

9:59

financial christ Is Terras Raphael joining us

10:01

now Bloomberg Opinion editor covering European politics

10:03

and economics. How concerning

10:06

was this to you? The sort of UK data

10:08

that came out, Well, I think to some extent

10:10

this is expected and part

10:13

of a broader picture that shows that the UK

10:15

is just underperforming and has been

10:17

really since the since

10:19

the Brexit vote, where you know a

10:23

lot of people have noted, well, the economy hasn't

10:25

responded as negatively as many predicted

10:27

before the friendum, but

10:29

really it's sacrificed a lot

10:31

of potential growth and now we're actually seeing some

10:34

some real downside now that will affect Boris Johnson,

10:36

the Prime Minister who has come

10:39

to power both threatening to leave without

10:41

a deal if the European Union doesn't agree to his demands,

10:43

but also delivering

10:45

this message of optimism

10:48

and uh, you know, opportunity

10:50

for the country once it leaves

10:52

the EU. And this complicates the picture,

10:55

and especially as I wrote today in a

10:57

column, it complicates his uh

11:00

you know other big challenge, which is keeping the United

11:02

Kingdom together, which is, you know, four constituent

11:04

nations including Scotland, Wales and Northern

11:06

Ireland. So trust that's kind of where one of the

11:08

go your columns. Fascinating give us the latest

11:11

on kind of how that might play out, keeping

11:13

the United Kingdom together. Well,

11:15

the news this week was that for the

11:17

first time in a couple of years, uh,

11:19

the Scottish people are telling posters

11:22

that they would prefer to leave.

11:24

They want a second, a second referendum

11:27

on Scottish independence. There was one inteen

11:30

Now Scotland would be hurt, uh quite

11:32

substantially by Brexit, to the tune of at

11:34

least perhaps eight percent of

11:37

of Scotland's UM growth

11:40

uh of Scotland's g n P

11:43

if there were to be a no deal brexit. So you

11:45

know, you would expect this to accelerate

11:48

demands for independence in Scotland.

11:50

At the same time, you have Northern Ireland, where

11:52

um, the Good Friday Peace Agreement

11:55

allows for the possibility of rejoining

11:57

Ireland, of having a vote to do that if there's

11:59

a majority for that. We don't see

12:01

that yet now, but you can imagine a scenario in

12:03

which the Northern Irish economy is hard hit

12:06

and that and there begins to be a clamor

12:08

for uh, you know, for what they call a border

12:11

pole. I was interested to is that the foot

12:13

seat was actually not that down.

12:16

In fact, it pretty much is flat. I'm

12:18

trying to understand why markets didn't

12:20

respond more severely to this, uh, this contraction.

12:23

Well, I think there's been a big question

12:26

for some time now why markets are so

12:28

sanguine when you know, the rest of us are

12:30

looking at the picture and and you know,

12:32

wanting to to, you know, sort of run

12:34

for cover because it really does look like

12:36

we're heading toward a nodal Brexit. I mean one

12:38

you know possibility that there is a you know, general

12:41

strength in the UK economy.

12:43

It has proved a very resilient economy. It's

12:46

you know, it's a fairly large economy of the world's fifth

12:48

largest. Um. You know. Also

12:50

we have a fair bit of um, you

12:52

know, of of bad news priced

12:54

in already. UM. But

12:57

uh, you know, obviously you know, trading

12:59

is I think quite quite thin

13:01

in a lot of stocks. So Terre's one of

13:03

the arguments and support of Brexit is

13:06

that an independent UK

13:08

would be able to forge a strong

13:10

trade deals on its own, particularly with the United

13:12

States. What are what are those

13:14

Brexit folks thinking about now, is they look at

13:17

the US trying to negotiate on and

13:19

off again with China. Um

13:21

is that strength in your argument or weaken it? I

13:23

mean, I think it's been a weak argument from the

13:25

beginning, for you know, for several reasons.

13:27

Um, the the the UK is

13:30

a minnow compared to the U S which is a whale

13:32

on the on the world. Thank you so

13:34

much for joining us at Bloomberg. Opinion columnist Terras

13:36

Raphael guess

13:55

what treasures are rolling yet again?

13:57

Right now, tenure treasure yields all right, at the lowest

14:00

since October twenties sixteen, investors

14:02

taking a look at the escalating trade rhetoric between

14:04

the US and China, taking a look at

14:07

the disappointing pp I the producer

14:09

product prices UH, the

14:12

producer Price index not coming

14:14

in as high as expected, and saying that that's

14:16

gonna cut rates. The question is how

14:19

much lower can yields really go? Joining

14:21

us down to discuss is Scott Kimball. He is a

14:23

portfolio manager of the Bibo tc H Core

14:26

plus von Fund. He is a

14:28

portfolio manager focused on fix income for BEMO

14:30

Global Asset Management with two d and two

14:32

billion dollars under management. So, Scott,

14:35

are you bullish on treasuries here?

14:37

Even after the incredible rally we've seen now?

14:40

I think what we found is that investors are are

14:42

rethinking the view on the treasury

14:44

position. Uh. We've sort of always operated

14:46

with the ideas as we got closer to zero

14:49

that treasuries were just more fully valued. We've

14:52

seen now with negative rates persisting around

14:54

the world, that it's really very

14:56

difficult to make a call on overall

14:59

portfolio to ration. And we're more staying

15:01

neutral, not so much out of bullishness, but by

15:03

the fact that you know, within very negative term premium

15:05

and negative rates overseas. UH, it's

15:07

very difficult to make a case against treasuries

15:10

in this type of a market paradigm that

15:12

we've entered. So, Scott, you've

15:14

mentioned that, Um, you think the Fed

15:16

has mishandled that mid Uh,

15:19

that correction, that rate cut they just made.

15:22

What do you mean by that? What do you think they should have done? Our

15:24

our view going into this was, if you're trying to stimulate

15:26

stimulate inflation, that their

15:28

policy had been rather effective so

15:31

far, and that the tightening cycle was very prolonged

15:33

and it really allowed the economy to

15:35

get a lot of traction on the street. Uh.

15:38

The challenge though, is that then when they reverse

15:40

course, they used the term mid cycle adjustment.

15:43

So our our preference was not to cut rates

15:45

and not punish savers by lowering rates

15:47

further, but rather to stay the course.

15:49

But now they use the term mid cycle adjustment, and

15:51

if that means what we think they think

15:53

it means, that should have been fifty basis

15:55

points, not twenty five. Doesn't do anything

15:58

to change bank activity. It certainly

16:00

doesn't do anything to stimulate credit markets. It

16:02

doesn't do anything to benefit the consumer. What all

16:04

it's done is caused a forward looking path for

16:07

the FED if you look at it to

16:09

sort of have this escalator like UH decline

16:11

back towards one percent, which is not the mid cycle

16:14

adjustment. That's not the policy they wanted to

16:16

to put in place, So the market interpretation and reaction

16:19

was not congruent with what their directive

16:21

was. Do you think that inflation is dead

16:23

or do you think that people are underpricing the risk of inflation?

16:27

UH? Inflation for now, in our opinion,

16:29

is not going to be too much of a of a

16:31

challenge. You know, in our our Core plus fund, we've

16:33

we've exited most of our inflation link positions

16:36

and the challenge that we're we think it, particularly as

16:38

it as it relates to the FED, is inflation.

16:41

Over the long term. We'll have mechanisms

16:43

and times where it will accelerate. And we do think

16:45

this expansion in the US, although it's been the most

16:47

hated one in history, UH is

16:49

pretty durable. But the challenges the

16:51

old inflation model doesn't account for things

16:54

like transparency in pricing. If you think

16:56

about the power of transparency you have

16:58

from just a smartphone from a consumer were perspective.

17:01

Uh, that squeezing retail margins. It's causing

17:04

a recycling and the labor market

17:06

away from retail and all of that is very disinflationary.

17:09

So for this whatever is left in this cycle, we

17:11

don't see inflation as a problem. So,

17:13

given where we are with your outlook for the

17:16

FED and inflation kind of how are you thinking about

17:18

your allocation of investment grade

17:20

and high yield and emerging markets? How do you kind

17:22

of stack them? Certainly, I'll

17:24

start off by saying an area that we're not focused

17:26

on right now is emerging markets. Uh, the

17:29

exposure the global economy is already

17:31

seeping into the US corporate bond market

17:33

enough that if you add emerging market debt,

17:36

the spreads and yields there are not giving you and

17:38

our our estimation the the the

17:41

extra compensation you need to include them.

17:44

High yield we will acknowledge some repricing

17:46

primarily, and energy has opened up the door. If

17:48

you've been watching a few bonds, that boy,

17:50

I'd like to buy that at six, seven or eight percent, but

17:52

it's been yielding for and now it's repriced. It

17:55

is a good opportunity to to find some exposure.

17:58

But on overall, and the way we're posis shooting

18:00

our fund is a focus on investment grade.

18:03

The problem is when you talk high yield versus investment

18:05

grade, people like to talk yield in one

18:07

and spread in the other. So if we look

18:09

at spread for both, the accredit spread you're

18:11

getting for high yield does really

18:14

isn't really accounting for what could

18:16

be some upward pressure on on the

18:18

default rate. Given this backdrop,

18:20

are you treating more or less than you normally

18:23

do? Less much too?

18:25

Probably the sigrin of some of our counterpartiess no, but

18:27

this is interesting to me because it seems like a lot of people

18:29

are in the same boat. It's sort of not not much

18:31

incentive to relation shift your portfolio around.

18:34

Agree, So interesting enough. If you look at

18:36

a core plus fund, our our average turnover statistic

18:39

is about and we tend to take

18:41

on positions with a twelve to twenty four month

18:43

kind of an outlook. But even now

18:46

our turnover is probably lower or probably running

18:48

closer to and to your point,

18:50

if you have a bond and you're comfortable with the

18:52

story and it's giving you a yield premium.

18:55

If you want to sell it, you have to replace it. And

18:57

unfortunately, with where credit spreads have gone

19:00

on, you're looking at a you know one

19:03

s for the investment grade credit universe.

19:05

It's it's a pretty expensive time to buy from

19:07

an all in yield or spread perspective. Right,

19:09

Scott Campbell, thank you so much for joining us. We appreciate

19:12

it. Scott's portfolio manager focusing on fixed

19:14

income for BEMO Global

19:16

Asset Management. He's based in Miami. He

19:18

has a tan line for his sunglasses. That's

19:21

how Miami this guy is. But he joined

19:23

us here in our blue interactive jealous so

19:26

he joined to here in a Bluebriken interactive broker studio.

19:28

We appreciated making the trip up to the

19:30

Big Apple, but I'm sure he's going to be jetting back

19:32

to Miami very quickly. Well,

19:48

I'm looking at some interesting data. The cost

19:50

of a data breach has risen twelve over

19:53

the past five years and now costs on average

19:55

three point nine two million

19:57

dollars, and that's according to IBM.

20:00

To dig a little bit deeper into the all

20:02

issues cybersecurity, we welcome

20:04

Wendy Whitmore. Wendy is a global partner

20:06

and director for x Force Threat

20:08

Intelligence at IBM. She's based in

20:10

Los Angeles. Lisa and I love that title, Wendy.

20:13

Wendy, thanks so much for joining us. Um,

20:15

just give us a sense, you know, kind of what are

20:17

the biggest risk two organizations

20:21

right now? Hey,

20:23

Paul and Lisa. So yeah, you know, having

20:25

responded to some of the biggest breaches in the world

20:28

over the past almost twenty years, now, UM,

20:30

you know, I can tell you one thing is consistent,

20:32

and that's that if attackers can find a way

20:34

to make money from stealing data, they

20:37

will. Um. That becomes problematic

20:39

today because we're in a data economy and

20:41

a lot of people aren't familiar with the fact that

20:43

the dark web actually represents the world's

20:46

third largest economy coming in and almost

20:48

six trillion dollars. So what that means

20:50

is that attackers can leverage that as a

20:52

forum to share information, to buy

20:54

data, to sell it. So when we're looking

20:57

at, you know, which organizations could be attacked,

20:59

what are the biggest risks? Ultimately, if

21:01

an organization has data that is of

21:03

interest that could be monetized in some way,

21:06

whether it's a financial record or a healthcare

21:08

record, for example, all of that information

21:10

becomes very valuable in this type of dark

21:12

web economy, and a lot of organizations

21:15

don't necessarily think of that. They look at their

21:17

organization, you know, as as in their

21:19

eyes versus how an attack or sees

21:21

it in terms of kind of being a gold mine to potentially

21:24

make some money. Paul, I'm going to force

21:26

you to call me the director of X Force

21:29

Yield Intelligence, because I think that that

21:31

that's going to have to be my title. Wendy, you

21:34

just got back or you're actually you're

21:36

on site at the black Hat conference

21:38

in Las Vegas, which is the world's

21:40

leading information security event.

21:43

I just picture a whole lot of people who are incredibly

21:46

paranoid by nature, sitting around and imagining

21:48

worst case scenarios. What were the most hotly

21:50

debated topics there. Yeah,

21:53

I think you've got an accurate picture in your in

21:55

your head, Lisa, But um, I think

21:57

kind of first and foremost is just the regular

21:59

to a landscape. Right, So we're looking

22:01

at what is going on with these fines that

22:04

are raging from you know, two million

22:06

dollars upwards of five billion dollars,

22:08

and that really going to have a dramatic

22:10

impact on our industry, but

22:13

ultimately on the way organizations from

22:15

the CEO and board levels on down think

22:17

about investing in cyber security. Right,

22:19

Will they continue to buy more cyber

22:21

insurance, will they allocate money

22:24

for fines? Will they do things like continue

22:26

to invest more proactively insecurity? UM.

22:29

I think all of those things will happen. But that's

22:31

certainly a very hotly debated topic right

22:33

now. So when the following the

22:35

Capital One breached, definitely people raising

22:38

the questions about the cloud and the security

22:40

of the cloud. I think Capital One at one point was even

22:42

suggesting, you know, touting that the cloud

22:44

was more secure, but that may not be the case.

22:46

How should we think about that? Well,

22:49

you know, we've got teams of people on site

22:51

responding these attacks all over the

22:53

world, and some of them are cloud based

22:55

and many of them are not. UM. The reality

22:58

is that whether the data is in the cloud or not,

23:00

I think the number one thing that companies still struggle

23:02

with is actually knowing where their

23:04

most sensitive data is and ensuring

23:07

that they have adequate controls and protecting

23:09

that right UM. At this point, specific

23:11

to the cloud, about forty three percent

23:13

of attacks are related to misconfigured

23:16

cloud databases, So that means that

23:18

you know, access is freely available

23:21

or there are some loopholes for an organization of

23:23

an outsider to get into that data.

23:25

But the reality is the number one thing is if

23:27

companies can understand where their most secure data,

23:29

as sensitive data is, they can secure

23:31

it much more effectively. And at this point

23:34

most organizations just don't have the visibility

23:36

needed to answer those questions

23:38

pretty quickly. What do you which industries

23:40

are seeing the biggest uptick in cyber

23:43

attacks? Yeah, great

23:45

question. I mean, time and again, we always see

23:47

financial services being attacked. Uh.

23:50

One of the things that we found this year though, is

23:52

that transportation actually moved from

23:54

number five to number two. So when

23:56

we say that, we're talking about commercial transportation,

23:59

aviation sector, certainly travel

24:03

brands as well, and we're seeing a tremendous

24:05

amount of attacks that are increasing in those and

24:07

you've certainly seen some seen some fines recently

24:10

in those sectors as well. So

24:12

when day to what extent can our data

24:14

ever really be secure? I

24:16

mean, I think some people are just saying, you know what, you

24:19

just can't do everything. How shou

24:21

we think about that? It's true?

24:23

I think the reality is that um the need

24:26

to secure data is not just actually

24:28

on the company side, it's also on the consumer

24:30

side as well, right, so there are things that

24:32

we as consumers can do to actually protect

24:35

some of our more personal and sensitive data. And

24:38

um one of those things, for example, would

24:40

be to make sure that if you're using

24:42

um, you know, financial banking transactions,

24:45

which ever institution you're using,

24:47

that you're using some sort of a two factor authentication

24:50

or multi factor authentication. And the

24:52

same thing with your social media sites, with

24:54

your email accounts, all

24:57

of those are now pretty simple to manage,

24:59

even for people who may not be as technical. That's

25:01

really important. And the next thing I would say would

25:03

be with password managers, so you can use

25:05

that so you're not kind of replicating

25:08

you know, um, I love my dog, for

25:10

example, as your password for every site that

25:12

you use and revealed me blending.

25:16

Uh. You know. I want to go back to the image of

25:18

a group of paranoid people sitting around and

25:21

wondering what next could potentially

25:23

go wrong in a worst case scenario. And I'm wondering,

25:25

what are most of the people who are work

25:28

in cybersecurity do, I mean, do they just

25:30

eliminate their presence is almost entirely

25:32

from the web. Uh,

25:35

you know, it's kind of almost the opposite. It really depends.

25:37

There's certainly a group that's extremely a paranoid

25:39

that never has a presence. But the reality

25:42

is for most people, not just cybersecurity

25:44

professionals, but people around the world really

25:46

need to kind of highlight their social

25:48

media presence and their online presence for

25:51

career advancement. And so the reality

25:53

is that we have the same concerns everyone

25:55

else does. Um, we may be a bit more

25:57

paranoid than than usual, but we're

25:59

doing things, like I mentioned, so making sure

26:01

that we're kind of taking the extra steps so

26:04

that it's a little bit more difficult. Um.

26:06

The way we communicate that to our clients,

26:08

um, And it's the same thing personal is all

26:10

about limiting the impact. So if I

26:12

can make it an attack or take longer

26:15

to achieve their goal, which is usually

26:17

to steal steal data from an organization

26:19

or to steal it from me personally, and if I can

26:21

buy more time um along

26:24

that way, that allows me more time to detect

26:26

the attack, to defend against it, and then ultimately

26:28

to limit the impact, which you know personally

26:31

would be a limit steeling of information

26:33

but on a business side, limiting the impact

26:36

of a huge you know, theft, which translates

26:38

to a tremendous amount of money spent. Thank

26:42

you so much for being with us. We will

26:44

always love having you on just so that we can

26:46

say your title, also because you give us fabulous information.

26:49

Wendy with More, Global partner and director

26:51

of the X Force Threat Intelligence

26:54

at IBM, which is a fabulous

26:56

again, fabulous side. Thanks

26:58

for listening to the Bloomberg pan Ol podcast. You

27:00

can subscribe and listen to interviews at Apple

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Podcasts or whatever podcast platform you prefer.

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I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

27:08

I'm Lisa Abram Woyds. I'm on Twitter at Lisa

27:10

Abram woits one before the podcast, you

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can always catch us worldwide. I'm Bloomberg

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