# AI Cost Reality Check Hits Tech Stocks as Apple Hikes Price

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 26 Jun 2026, 20 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/91a737ef-ecd9-4e5b-80ed-b47501157401/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Paul Sweeney and Scarlet Fu - Ed Ludlow, BTech Anchor discusses the top tech stories. Technology stocks slumped after Apple and Microsoft raised prices for their products, stoking concern that rising component costs will curb demand for devices. Investors are reassessing whether soaring memory prices may begin to choke off spending by raising costs for electronics makers and consumers alike. Separately, OpenAI is leaning toward holding off on an initial public offering until 2027, according to the New York Times, citing three people involved in the company’s deliberations. -David Welch, Bloomberg Detroit Bureau Chief, discusses Volkswagen looking to cut tens of thousands of additional jobs. The plans include doubling staff reductions and cutting general overhead costs by €11 billion by the end of this decade. Labor leaders have pushed back against the new plans, stating they "unsettle our workforce and the regions where we operate" and vowing to oppose them with all their might. -George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense, & Airlines Analyst, discusses Boeing securing an order from China Southern Airlines valued at $3.62 billion, marking an important win for the US manufacturer after seeing orders dry up from Asia’s largest aviation market in the past decade. -Sridhar Natarajan, Bloomberg News Chief Wall Street Correspondent, discusses the latest at JPMorgan Chase. Troy Rohrbaugh was promoted to co-president at JPMorgan and will oversee the bank's consumer business. Rohrbaugh's promotion came after the departure of Marianne Lake, and he will receive a one-time award of $30 million as part of a retention bonus. The move has lifted Rohrbaugh's odds of potentially replacing Jamie Dimon as CEO, with insiders speculating on the rapid rise of Rohrbaugh and Doug Petno, who will have sole charge of the Wall Street operations. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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[0:21] Speaker 1: or watch us live on YouTube.
[0:23] Speaker 2: This memory chip shortage, it's becoming a thing. I mean
[0:27] Speaker 2: for people like me and you and our listeners and
[0:30] Speaker 2: our viewers.
[0:30] Speaker 3: Here.
[0:32] Speaker 2: Apple's raising prices for a lot of stuff now it's
[0:35] Speaker 2: starting to hit home for a lot of people. Ed
[0:36] Speaker 2: Ludlow b Tech hosts, he covers all this stuff. He's
[0:40] Speaker 2: out there in our San Francisco offers.
[0:42] Speaker 4: Ed.
[0:42] Speaker 2: I think, you know, people who weren't really paying too
[0:45] Speaker 2: much attention to this chip shortage thing. I guess they're
[0:49] Speaker 2: going to start thinking about it when they go to
[0:51] Speaker 2: their Apple store and they're gonna have they have to
[0:52] Speaker 2: pay more for some of those products. What's going on?
[0:56] Speaker 4: Yeah, you kind of nailed what's been a very recent
[1:00] Speaker 4: change in psychology of the market. We've gone from a
[1:02] Speaker 4: place in the middle of the week where Micron is
[1:04] Speaker 4: absolutely surging and the market is cheering a situation where
[1:09] Speaker 4: memory chip supply is so tight and the memory names
[1:12] Speaker 4: have pricing power to now looking at it from completely
[1:15] Speaker 4: the other perspective, from the seller of memory to now
[1:18] Speaker 4: the buyer and that Apple case study, you know, the
[1:21] Speaker 4: way that Bloomberg put it is Apple raising prices because
[1:24] Speaker 4: one single component cost is so high is an extreme measure.
[1:28] Speaker 4: And so now extrapolating out and looking at what happened
[1:31] Speaker 4: in Asia trading overnight a little bit, the trading of
[1:34] Speaker 4: this morning's market, the concern is the next step is
[1:38] Speaker 4: we come full circle and demand for consumer electronics is
[1:41] Speaker 4: dampened because of high prices, and by extension, memory ironically
[1:47] Speaker 4: sees demand dampen a bit. So it's a really sort
[1:50] Speaker 4: of circular debate the market's having with itself here.
[1:55] Speaker 5: Well, you know, when it comes to the memory chip Schwartz,
[1:57] Speaker 5: it is this something that is a hute at the
[2:00] Speaker 5: moment or is this going to be the new normal,
[2:03] Speaker 5: especially with all the demand for just from everywhere.
[2:06] Speaker 4: Essentially it's incredibly severe. So like, in very simple terms,
[2:10] Speaker 4: all these data centers that are getting built specifically within
[2:14] Speaker 4: video GPUs require lots of what's called high bandwidth memory.
[2:19] Speaker 4: High bandwidth memory is just dram. Everyday DRAM goes into
[2:22] Speaker 4: your own consumer electronics layered upon one on top of
[2:26] Speaker 4: the other. For every Nvidia GPU you have, there are
[2:28] Speaker 4: eight corresponding high bandwidth memory chips, so lots of layers
[2:31] Speaker 4: of DRAM. And because A Micron and other memory names
[2:35] Speaker 4: have pricing power, and b that those building the data
[2:38] Speaker 4: centers have lots of money, that's where the supply is
[2:41] Speaker 4: being prioritized. The net result is that the consumer electronics industry,
[2:45] Speaker 4: not just Apple Xbox, raised prices on its consoles too.
[2:48] Speaker 4: They have no choice but to pay that higher pricing
[2:52] Speaker 4: in order to secure supply. It is a very severe situation.
[2:56] Speaker 4: And you know, the weirdness was that in the moment
[3:00] Speaker 4: again there was euphoria in the markets Wednesday into Thursday.
[3:04] Speaker 4: Good for you, Micron stock surges. It's a really enviable
[3:07] Speaker 4: position to be in. And what Micron said is that
[3:10] Speaker 4: this situation is going to last for at least eighteen
[3:12] Speaker 4: months before it improves. So it's a lot for the
[3:16] Speaker 4: market to decide, like what is good news and what
[3:18] Speaker 4: is bad news.
[3:18] Speaker 2: Here ed, when we had those higher egg prices coming
[3:22] Speaker 2: under the pandemic, my genius solution was to just make
[3:24] Speaker 2: more chickens and then basically as well after the egg
[3:28] Speaker 2: prices came down that largic I don't think it's going
[3:30] Speaker 2: to apply to memory chips, will it.
[3:33] Speaker 6: So.
[3:33] Speaker 4: Historically, before this whole AI thing, memory was highly cyclical,
[3:39] Speaker 4: highly commoditized. It was an industry that went through boom
[3:42] Speaker 4: and bus. When consumers got disinterested in PCs and smartphones,
[3:47] Speaker 4: the memory market crashed, both in terms of pricing, and
[3:50] Speaker 4: so that is an industry that's so sensitive to getting
[3:53] Speaker 4: supply right. The story under this administration in particular, but
[3:57] Speaker 4: for a longer period of time, has been let's get
[3:59] Speaker 4: the these companies to build more capacity. The problem is,
[4:03] Speaker 4: what if they build all these memory chip fabs and
[4:05] Speaker 4: then demand evaporates and they're left with very large facilities
[4:08] Speaker 4: that aren't doing anything well. That would be a really
[4:11] Speaker 4: less than prudent financial move that is still there. The
[4:15] Speaker 4: difference is is that the data center demand seems to
[4:18] Speaker 4: be here forever, it has staying power. It's not as
[4:22] Speaker 4: cyclical as the consumer electronics industry has been. It's a
[4:25] Speaker 4: really hard one for them.
[4:26] Speaker 3: To get right.
[4:28] Speaker 5: All right, and let's switch gears and talk about this
[4:29] Speaker 5: open AIIPO, which may not be coming now until twenty
[4:33] Speaker 5: twenty seven.
[4:33] Speaker 7: What can you tell us about that.
[4:36] Speaker 4: I'm just looking at my bio to see if we've
[4:37] Speaker 4: published yet. We haven't. What I can say is that
[4:42] Speaker 4: it's consistent with what open ai said on June eighth
[4:46] Speaker 4: when it disclosed its confidential filing, that they would stay
[4:49] Speaker 4: private for quite a long time because they're things that
[4:52] Speaker 4: they want to do that are more achievable as a
[4:54] Speaker 4: private company. In the public company. There is a lot
[4:57] Speaker 4: going on in capital markets. As you know, we had
[4:58] Speaker 4: the biggest ip of all time in SpaceX. There is
[5:01] Speaker 4: a lot of activity in the bond market, not just SpaceX,
[5:05] Speaker 4: tapping the bond market in video as well, being the
[5:08] Speaker 4: most recent, and there is a finite pool of capital.
[5:12] Speaker 4: It's consistent that open ai would take its time. But
[5:15] Speaker 4: I think what I can say safely on air is
[5:17] Speaker 4: like I think open ai is also pretty calm about
[5:19] Speaker 4: the idea that Anthropic goes public before then, you know,
[5:23] Speaker 4: if you put it in the context of a race
[5:25] Speaker 4: between two AI companies.
[5:27] Speaker 8: Stay with us. More from Bloomberg Intelligence coming up after this.
[5:33] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[5:37] Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
[5:41] Speaker 1: with the Bloomberg Business App listen on demand wherever you
[5:44] Speaker 1: get your podcasts, or watch us live on YouTube.
[5:48] Speaker 2: Switch it over to the auto business. Wait, I saw
[5:50] Speaker 2: this headline some big numbers Volkswagon. I was cutting one
[5:54] Speaker 2: hundred thousand jobs, closing plants. That's big news, David watch
[6:00] Speaker 2: Bloomberg Detroit Bureau Chief Joints is here. Hey, what's going
[6:03] Speaker 2: on with our friends at Volkswagen. Yeah.
[6:06] Speaker 3: Look, the company's been struggling for a while now, with
[6:10] Speaker 3: revenue flatlining, profits you know, stagnant at best, and they're
[6:15] Speaker 3: facing costs from tariffs in the United States. They're facing
[6:19] Speaker 3: competition in Europe from China. In their Chinese business, you know,
[6:23] Speaker 3: like General Motors, Volkswagen is one of the first pioneers
[6:26] Speaker 3: there and the Chinese have been first off. Their companies
[6:30] Speaker 3: have waged price wars and taken up a lot of
[6:32] Speaker 3: market share. The Chinese government doesn't love foreign companies in
[6:36] Speaker 3: the market so much anymore, and it's just been tougher
[6:39] Speaker 3: for them to compete. So they're really they're seeing their
[6:41] Speaker 3: business challenged in every major market where they play. And
[6:47] Speaker 3: they've always had a massive industrial complex in Europe with
[6:51] Speaker 3: their parts units, engine units, different brands, and with the
[6:57] Speaker 3: way things are running Europe, it's always tough to cut jobs,
[7:00] Speaker 3: and so they've always kind of pushed that reckoning off
[7:03] Speaker 3: as much as possible because it's politically foreigny to go
[7:07] Speaker 3: and lay off a bunch of factory workers. And they've
[7:10] Speaker 3: got union people on their boards. The unions are very
[7:12] Speaker 3: tough over there as well, and I think they're finally
[7:16] Speaker 3: at a point where they have to really get the
[7:19] Speaker 3: company weener in order to compete with everything that's going
[7:24] Speaker 3: on around the world and keep their profits up. They're
[7:26] Speaker 3: in a tough spot and they've got a lot of
[7:28] Speaker 3: work to do. They've started some of it, but it's
[7:31] Speaker 3: going to be difficult for them going forward because it's
[7:34] Speaker 3: just it's hard in Europe to cut a lot of jobs,
[7:36] Speaker 3: and they really have earmarks some massive numbers here.
[7:39] Speaker 8: Yeah, I mean definitely.
[7:40] Speaker 5: Part of the challenge, of course, is implementing those plans
[7:44] Speaker 5: to cut labor. And as you mentioned, David, a lot
[7:46] Speaker 5: of labor leaders probably going to be pushing back on
[7:49] Speaker 5: this latest round. But how difficult would it be to
[7:52] Speaker 5: implement the plans at this stage or is the direness
[7:56] Speaker 5: of the situation kind of going to overtake any of
[7:59] Speaker 5: that issue.
[8:01] Speaker 3: It's gonna be really hard.
[8:02] Speaker 6: Uh.
[8:02] Speaker 3: You know, e gay Mental is the big German union
[8:05] Speaker 3: and they're gonna be pushing back. Volkswagen has operations in
[8:07] Speaker 3: other countries with different unions, they will push back. It's
[8:10] Speaker 3: and and politicians too, Uh. The German government doesn't love
[8:13] Speaker 3: people laying workers off either. And you know, Volkswagen's got
[8:18] Speaker 3: some government ownership with Lower Saxony, the province that that
[8:22] Speaker 3: owns some of the company. So you know, when when
[8:25] Speaker 3: you've got government kind of playing around in the business
[8:28] Speaker 3: as well with people on the board, you know, it
[8:30] Speaker 3: all becomes politically very difficult to do. And I think
[8:35] Speaker 3: they'll make some cuts, you know that, and it's clear
[8:39] Speaker 3: that they probably have to. But how much can they
[8:42] Speaker 3: they do and how fast can they do it? Those
[8:45] Speaker 3: are the big questions. You notice the stock didn't roar
[8:48] Speaker 3: on this thing. Usually when companies say they're gonna cut
[8:50] Speaker 3: a bunch of people, investors love it and the stock
[8:52] Speaker 3: goes up a lot. I think the last time I
[8:54] Speaker 3: looked at it was up like one point two percent,
[8:56] Speaker 3: which is not a big bump. And I think investors,
[8:58] Speaker 3: particularly European investors, know that these things are time consuming
[9:01] Speaker 3: and difficult to do. And look at Stollantis. You know,
[9:05] Speaker 3: they've acquired a bunch of different European brands over the years,
[9:09] Speaker 3: you know, starting with Fiat and Puggio. They bought Opal
[9:11] Speaker 3: from General Motors and put all that together and they
[9:14] Speaker 3: made honestly pretty decent sense out of it, but still
[9:17] Speaker 3: not a super profitable unit for them. And they have
[9:19] Speaker 3: leaned up, they've made it more efficient, they've cut workers,
[9:21] Speaker 3: they've merged up engines and vehicle platforms and all kinds
[9:25] Speaker 3: of hardware, but still tough to work through those stuff
[9:28] Speaker 3: over the years and undo, you know, many decades of
[9:31] Speaker 3: how these companies work in terms of their factories and
[9:35] Speaker 3: all this sort of thing.
[9:37] Speaker 8: Stay with us. More from Bloomberg Intelligence coming up after this.
[9:44] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[9:48] Speaker 1: weekdays at ten am Eastern on Apple Coarclay, and Android
[9:51] Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
[9:54] Speaker 1: you get your podcasts, or watch us live on YouTube.
[9:58] Speaker 2: I want to get real quickly to Boeing. Boeing Inc.
[10:00] Speaker 2: The deal with China Southern Airlines to sell some jets.
[10:04] Speaker 2: It's not a huge deal. Three point six billion dollars
[10:06] Speaker 2: by aerospace standards. But it's my signal, at least to me.
[10:11] Speaker 2: I'm wondering if its signals maybe an opening up of
[10:13] Speaker 2: these China market which has been kind of closed to
[10:15] Speaker 2: Boeing for maybe ten years now, and that would be
[10:18] Speaker 2: a significant positive. George Ferguson joins us. He's been covering
[10:21] Speaker 2: Boeing for decades. He's a senior aerospace, defense and airlines analysts. George,
[10:26] Speaker 2: what should we take away from this China Southern Airlines
[10:29] Speaker 2: deal with Boeing?
[10:30] Speaker 6: I think, first of all, First of all, good afternoon.
[10:35] Speaker 6: Every order is a good order, right. There used to
[10:37] Speaker 6: be a song out there. I guess every love is
[10:39] Speaker 6: good love, right, So good to see it when I
[10:45] Speaker 6: took a look at it. I've been seeing an official
[10:48] Speaker 6: announcement on Boeing site, but I've seen it reported in
[10:51] Speaker 6: some news outlets. It's Triple Seven's Triple seven freighters. You know,
[10:56] Speaker 6: Boeing's got a pretty strong product lineup in that that
[10:59] Speaker 6: Triple seven freighter. World, that's Triple seven is going to
[11:02] Speaker 6: be the biggest airplane in the sky with the new
[11:06] Speaker 6: version of it. Freighter's quite large, pack it up pretty well,
[11:12] Speaker 6: you know, so again it's a good order, but I
[11:14] Speaker 6: would have liked to have seen things like narrowbody orders.
[11:17] Speaker 6: I'd like to see seven thirty seven orders going into China.
[11:22] Speaker 6: That would get me more excited. That's a bigger portion
[11:24] Speaker 6: of the marketplace. So again good, good to see China
[11:30] Speaker 6: on the book here. But this is an airplane that
[11:32] Speaker 6: Boeing has a really strong, you know airplane to offer.
[11:38] Speaker 6: Airbus doesn't have as good good of an offering, and
[11:41] Speaker 6: so I could have seen them potentially order this even
[11:45] Speaker 6: away from the Trump visit and the you know and
[11:49] Speaker 6: hopefully the re approach.
[11:50] Speaker 5: Momp Well, George, as Paul mentioned, you know, it seems
[11:53] Speaker 5: like for years, China, the China airlines market just in
[11:57] Speaker 5: general seems to have been close off to a lot
[11:59] Speaker 5: of the outsiders. But you know, with this deal, do
[12:03] Speaker 5: you foresee some of that starting to thall And could
[12:06] Speaker 5: this be the beginning of even more deals between the
[12:10] Speaker 5: US and chin companies.
[12:11] Speaker 6: Well, so we've put actually a China calculator on the
[12:14] Speaker 6: Bloomberg terminal because we really look at that market. Prior
[12:18] Speaker 6: to the pandemic, it was the most important market in
[12:22] Speaker 6: the world I think for Boeing, and Airbus. You know,
[12:26] Speaker 6: they were selling there was over three hundred narrow bodies
[12:30] Speaker 6: going in their year. It was a significant portion of
[12:33] Speaker 6: narrowbody production. It's really slowed down, but I would say
[12:37] Speaker 6: it's still open for Airbus. Airbus has made you know
[12:41] Speaker 6: a lot of deliveries into the market and orders in
[12:44] Speaker 6: the market, and so it's been closed largely to Boeing
[12:48] Speaker 6: since the first Trump administration. I think they kind of
[12:51] Speaker 6: used the grounding of the Max. The Max crash grounding
[12:54] Speaker 6: the Max's reason not to take it. Now, China's slowed
[12:58] Speaker 6: since then considerable, and so China just doesn't need the airplanes.
[13:03] Speaker 6: We think right there, the GDP growth is, you know,
[13:06] Speaker 6: from eight percent down into the fours. Now China has
[13:11] Speaker 6: been a little bit inward looking, and you know, they're
[13:15] Speaker 6: building their own competitor to the Airbus and Boeing AIRBSA
[13:19] Speaker 6: through twenty bowing seven thirty seven, the Comac C nine
[13:22] Speaker 6: one nine that is ramped much slower than we expected.
[13:26] Speaker 6: I want to say there were some twenty some deliveries
[13:29] Speaker 6: of that last year. In time, I would expect them
[13:32] Speaker 6: to replace Boeing an Airbus orders and deliveries with that airplane.
[13:38] Speaker 6: But again, like you know, right now, the way it
[13:40] Speaker 6: looks to us is they're absolutely still buying from Airbus,
[13:45] Speaker 6: taking the majority of their deliveries from Airbus, and Boeing
[13:48] Speaker 6: has just been blocked out since the first Trump administration
[13:52] Speaker 6: where we sort of entered into the trade war, and
[13:54] Speaker 6: so that's kind of what we're looking for to lift
[13:57] Speaker 6: because it could be more opportunity for Boeing. But we
[13:59] Speaker 6: see a lot of orders on the books for Airbus.
[14:02] Speaker 6: It feels like they're pretty full with orders.
[14:04] Speaker 2: So that's why we're.
[14:05] Speaker 6: Kind of watching closely to see what they do.
[14:07] Speaker 3: Here.
[14:07] Speaker 2: George, you got about thirty seconds left. Where is Boeing
[14:09] Speaker 2: now on the monthly deliverables for seven thirty seven. It's
[14:13] Speaker 2: because you've told us in the past that's really critical
[14:15] Speaker 2: for their cash flow story.
[14:17] Speaker 6: Move into forty seven, which is what we expected midyear.
[14:20] Speaker 6: So I think go do forty seven a month in
[14:22] Speaker 6: the seven thirty seven through the end of the year,
[14:24] Speaker 6: which is quite strong. They're actually getting better performance out
[14:27] Speaker 6: of their supply chain and production build than Airbus is now,
[14:31] Speaker 6: albeit Airbuses at higher absolute levels. But Boeing's doing a
[14:36] Speaker 6: decent job at catching up right now. So it's looking nice.
[14:40] Speaker 8: Stay with us. More from Bloomberg Intelligence coming up after this.
[14:47] Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
[14:51] Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
[14:54] Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
[14:57] Speaker 1: you get your podcasts, or watch us live on into.
[15:01] Speaker 2: Three natural joints. This year, he's a chief Wall Street
[15:04] Speaker 2: correspondent for Bloomberg News. Talk to us about what's going
[15:07] Speaker 2: on at JP Morgan and who are the potential heirs
[15:11] Speaker 2: to mister Jamie Dimmon.
[15:13] Speaker 7: It's the latest iteration of Wall Street's favorite parlor game,
[15:17] Speaker 7: right who will be in position to take on the
[15:19] Speaker 7: most consequential job in American finance? Jamie Diamond has been
[15:23] Speaker 7: in that role for twenty years. He does not at
[15:26] Speaker 7: least doesn't look like he wants to step away anytime,
[15:28] Speaker 7: so he wants to be there for a few more years.
[15:30] Speaker 7: But the news yesterday helped narrow the field a little
[15:33] Speaker 7: bit from potentially three candidates to two. One long time
[15:38] Speaker 7: arguably the front runner, maryon Lake, over the last year
[15:42] Speaker 7: or so has been forced to step aside, or at
[15:45] Speaker 7: least has stepped aside, and now the two new names
[15:48] Speaker 7: in the mix are. I guess if we think.
[15:53] Speaker 2: About it, when I read it as a voluta, hey,
[15:56] Speaker 2: I got my plenty though I'm gone.
[15:58] Speaker 7: I think there's certainly a difference between the news early
[16:01] Speaker 7: lost year and this time around, because early last year,
[16:04] Speaker 7: if you remember, JP Morgan came out and said Jen Peepsak,
[16:07] Speaker 7: who's now the CEO of the bank but was widely
[16:10] Speaker 7: considered as one of the front runners to replace Diamond,
[16:13] Speaker 7: put her hand up and said, I'm not interested in
[16:16] Speaker 7: being CEO. I love my job, I'm comfortable in my skin.
[16:20] Speaker 7: I want to continue doing what I'm doing. She's still
[16:22] Speaker 7: at the bank, but she very clearly voluntarily put up
[16:25] Speaker 7: her hand and said I do not want to be
[16:26] Speaker 7: ceoh in the case of Mary and Lake, we haven't
[16:30] Speaker 7: seen any announcement to that effect. It does feel like
[16:33] Speaker 7: a Jamie in the board's decision that maybe she wasn't
[16:36] Speaker 7: in you were necessarily going to get the top job,
[16:40] Speaker 7: and that seems to have precipitated this change where now
[16:43] Speaker 7: you have Doug Petno, who will have sole charge of
[16:45] Speaker 7: all of JP Morgan's vast Wall Street operations, and Troy Robot,
[16:50] Speaker 7: the fifty six year old who's now going to be
[16:53] Speaker 7: moved to the other side, the other big pillar of
[16:55] Speaker 7: the bank, which is its sprawling consumer business, after having
[16:59] Speaker 7: run the Wall Street busines. So he's certainly getting that
[17:01] Speaker 7: cross training that Jamie definitely loves to see in his lieutenants.
[17:06] Speaker 5: Yeah well, okay, so very different portfolios now for these
[17:09] Speaker 5: human this is effectively an audition for both of them
[17:13] Speaker 5: from a top job, I would presume one hundred percent.
[17:16] Speaker 7: It's definitely an audition. Both of them have very strong
[17:18] Speaker 7: experience on the Wall Street side of the business, and
[17:21] Speaker 7: you know, you could say that is in some ways
[17:23] Speaker 7: the tougher part, because that's all about managing risk. The
[17:26] Speaker 7: retail bank, if you get it into decent shape, it
[17:30] Speaker 7: is very predictable and it ebbs and flows with the
[17:33] Speaker 7: broader macroeconomy, with the Wall Street business. Your skills as
[17:37] Speaker 7: a risk manager are extremely important. Even today, Jamie Diamond
[17:41] Speaker 7: is regarded as one of the top CEOs out there,
[17:44] Speaker 7: largely in partant thanks to the way the bank navigated
[17:48] Speaker 7: the two thousand and eight financial crisis. It came out
[17:51] Speaker 7: stronger than everyone else, and today it is fortress Jamie Diamond, right,
[17:56] Speaker 7: the fortress balance shape that they talk about it is
[17:58] Speaker 7: the most powerful bank institution in the United States. So
[18:02] Speaker 7: the Wall Street side of the business is important. But
[18:04] Speaker 7: when you if you want to be CEO, you can't
[18:07] Speaker 7: forget the retail business. That is about as important as
[18:10] Speaker 7: anything else out there. When you mess up on your
[18:14] Speaker 7: trading desk, you might get an angry call from I
[18:17] Speaker 7: don't know, Easy england Er, milandym or Steve Cohen at
[18:19] Speaker 7: zero point seventy two. But if you mess up on
[18:21] Speaker 7: the retail bank, a grief party on the other side
[18:24] Speaker 7: could very well be the President of the United States,
[18:27] Speaker 7: something that the bank is currently facing. So it's a
[18:29] Speaker 7: very important job, even if it's not as profitable as
[18:33] Speaker 7: the banking and trading site.
[18:35] Speaker 2: Right then, there were two Troy Warball and Doug pet No.
[18:40] Speaker 2: I know nothing about either With them, what should I know?
[18:43] Speaker 7: Well, the thing you should know about Troy is he
[18:45] Speaker 7: grew up in the Baltimore area. Big fan of Baltimore
[18:49] Speaker 7: area sports. He got a start in the nineteen nineties
[18:52] Speaker 7: growling pit of the Philadelphia Stock Exchange. To just the
[18:55] Speaker 7: transformation from that point to now being a heartbeat away
[18:58] Speaker 7: from one of the most important job in finance is
[19:01] Speaker 7: sort of an incredible journey complete trading veteran, came up
[19:04] Speaker 7: through the ranks, has spent most of his time there.
[19:07] Speaker 7: He is known as a little bit of a non
[19:10] Speaker 7: showy character, more risk, fusses more about market risk than
[19:15] Speaker 7: splashy leadership displays. Whereas Doug Petno, you know, smooth investment banker,
[19:21] Speaker 7: was a top energy banker, then ran the commercial bank.
[19:24] Speaker 7: Now we'll have sole charge over the commercial and investment bank.
[19:27] Speaker 7: Easy with clients, exhudes the charm of a natural leader.
[19:32] Speaker 7: But he's sixty one. And if Jamie Diamond wants to
[19:35] Speaker 7: stick around for three audios and then perhaps another couple
[19:38] Speaker 7: of years after that as chairman. Where if you have
[19:41] Speaker 7: Jamie Diamond as your chairman, are you necessarily the final say?
[19:43] Speaker 7: At any place the clock starts sticking, and you do
[19:46] Speaker 7: wonder at sixty five, does JP Morgan look at a
[19:49] Speaker 7: Doug Petno and say you're our man for the possibly
[19:52] Speaker 7: the next ten to fifteen twenty years, or do they
[19:54] Speaker 7: go with the safer Troy Robobbett.
[19:57] Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify
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