WEBVTT - Bloomberg Businessweek Weekend - September 29th, 2023 0:00:01.360 --> 0:00:06.240 This is Bloomberg BusinessWeek Inside from the reporters and editors 0:00:06.240 --> 0:00:09.799 who bring you America's most trusted business magazine. Plus gloom 0:00:09.840 --> 0:00:13.680 Ole Business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.760 --> 0:00:22.639 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:22.920 --> 0:00:25.720 Investors still mulling over the higher for longer US interest 0:00:25.760 --> 0:00:29.760 rate world meantime, the FTC not mulling over, but rather 0:00:29.800 --> 0:00:33.200 pulling the trigger and suing Amazon in a long anticipated 0:00:33.240 --> 0:00:37.239 antitrust case, accusing the e commerce giant of monopolizing online 0:00:37.240 --> 0:00:41.159 marketplace services. Startup investor Steve Caase, co founder of AOL, 0:00:41.200 --> 0:00:44.559 of course, weighs in and explains why targeting some of 0:00:44.640 --> 0:00:46.160 big tech makes sense. 0:00:46.440 --> 0:00:50.280 Also ahead our cover story on another tech giant, Alphabet, 0:00:50.479 --> 0:00:53.440 and why law enforcement requests for Google user data is 0:00:53.520 --> 0:00:56.840 raising some serious privacy concerns. Plus, we talk with one 0:00:56.880 --> 0:01:00.000 of the producers of the newly released feature film Dumb Money, 0:01:00.280 --> 0:01:03.000 which portrays some of our most talked about financial titans 0:01:03.320 --> 0:01:05.319 and the main street investors who took them for a 0:01:05.440 --> 0:01:07.040 multi billion dollar ride. 0:01:07.160 --> 0:01:09.560 Unbelievable. All of that to come and we begin with 0:01:09.600 --> 0:01:12.959 the big picture money markets and the macro environment, and 0:01:13.000 --> 0:01:15.959 how we assess the worries of investors and traders, especially 0:01:16.000 --> 0:01:18.759 when it comes to sticky inflation and a federal reserve 0:01:18.800 --> 0:01:20.959 that has hell bent on getting inflation back to its 0:01:21.000 --> 0:01:23.959 two percent target. These worries continue to play out in 0:01:24.000 --> 0:01:27.600 a trade where stocks move lower and US treasury yields higher. 0:01:28.000 --> 0:01:29.880 With us as someone who thinks about it all and 0:01:30.080 --> 0:01:31.360 connects the dots. 0:01:31.200 --> 0:01:33.880 Peter Atwater, he's adjunct professor of economics at William and 0:01:33.920 --> 0:01:36.520 Mary who before that worked in financial services and with 0:01:36.600 --> 0:01:39.080 hedge funds. You might recall it he coined Carol the 0:01:39.160 --> 0:01:40.880 term key shape recovery. 0:01:41.080 --> 0:01:42.880 Yeah, he did. Indeed, he was recently on to talk 0:01:42.880 --> 0:01:45.600 about his new book, The Confidence Map, which came out 0:01:45.640 --> 0:01:48.360 in July. So delighted to have you back. How are you, 0:01:48.560 --> 0:01:49.800 I'm doing great, Great. 0:01:49.640 --> 0:01:50.000 To be here. 0:01:50.080 --> 0:01:52.320 Well, it's great to have you here. How are you 0:01:52.360 --> 0:01:54.080 thinking about kind of the things that are coming at 0:01:54.120 --> 0:01:56.320 investors right now and just the world at large. 0:01:56.400 --> 0:01:59.040 Well, you know, there's a lot coming at investors. But 0:01:59.040 --> 0:02:02.400 what's been so strike to me about the past couple 0:02:02.480 --> 0:02:06.760 of weeks is the absence of emotion We've watched the 0:02:07.080 --> 0:02:10.400 sell off in bonds, we've watched the sell off in stocks, 0:02:10.440 --> 0:02:15.680 We've watched oil prices rise, and there's this remarkable at 0:02:15.720 --> 0:02:19.800 ease that investors seem to have, even though markets have 0:02:19.880 --> 0:02:22.760 gotten over sold er in the case of oil, over bought, 0:02:23.240 --> 0:02:28.960 and it's really inconsistent to me with what prices would suggest. 0:02:29.520 --> 0:02:33.480 So I'm perplexed that people are taking all of this 0:02:33.760 --> 0:02:36.560 as commonly as they are, particularly because it wasn't, you know, 0:02:36.639 --> 0:02:39.560 six months ago interest rates were at this level and 0:02:39.639 --> 0:02:42.880 people were panicking about the banks, and it's a big 0:02:42.919 --> 0:02:43.519 gone today. 0:02:44.080 --> 0:02:45.400 So what do you attribute that to. 0:02:46.280 --> 0:02:51.120 I am a little worried about real complacence behavior on 0:02:51.160 --> 0:02:58.240 the part of investors, because there's no sense of that 0:02:58.320 --> 0:03:02.880 things could get worse, whether in terms of the economy 0:03:02.880 --> 0:03:08.360 itself or higher interest rates or inflation. There's almost this 0:03:08.520 --> 0:03:12.880 sense of, Okay, this is what it is. Until the 0:03:12.960 --> 0:03:17.320 economy gives us signals that it's weakening, or until the 0:03:17.400 --> 0:03:21.600 consumer rolls over, we're going to count on some sort 0:03:21.600 --> 0:03:24.320 of miraculous landing of this. 0:03:24.760 --> 0:03:26.360 One thing that caroly and I talked about this week 0:03:26.520 --> 0:03:28.840 was the depletion that we're seeing when it comes to 0:03:29.160 --> 0:03:32.560 the cash savings of Americans right Castle baleat Castle balance sheets. 0:03:32.600 --> 0:03:35.040 I mean pretty much everyone except the top twenty percent 0:03:35.440 --> 0:03:38.440 has run out of that excess cash savings that they had. Yeah, 0:03:38.440 --> 0:03:40.200 I mean the pandemic and post pandemic. 0:03:40.240 --> 0:03:42.200 I worry about those at the low end where the 0:03:42.240 --> 0:03:45.560 cash ran out a long time ago. I think it's 0:03:45.600 --> 0:03:48.280 interesting that folks are only taking note of it now, 0:03:48.720 --> 0:03:53.080 But for those at the bottom, this is a phenomenon 0:03:53.080 --> 0:03:56.760 that's now more than a year old, and so you're 0:03:56.800 --> 0:04:00.920 starting to see that roll into delinquency rates. It's particularly 0:04:00.920 --> 0:04:04.080 in automobile loans and credit card loans, and the automobile 0:04:04.120 --> 0:04:09.760 loan one worries me because, particularly for low income individuals, 0:04:10.000 --> 0:04:13.280 the car is the job, and they don't have the 0:04:13.360 --> 0:04:16.240 flexibility of work from home that many above do. 0:04:16.760 --> 0:04:18.560 Are you comfortable with some of the data points that 0:04:18.600 --> 0:04:21.280 are out there, including the labor statistics here in the 0:04:21.360 --> 0:04:22.000 United States? 0:04:22.080 --> 0:04:26.240 You know, I'm comfortable with the statistics. But what is 0:04:26.440 --> 0:04:31.120 clear even with these statistics is that jobs are not 0:04:31.279 --> 0:04:38.440 equating to confidence, and that you've seen no material improvement 0:04:38.560 --> 0:04:41.880 in mood even though jobs have come back and people 0:04:41.920 --> 0:04:46.719 are working more. And so I think we do ourselves 0:04:46.760 --> 0:04:49.839 a disservice to think that having a job is going 0:04:49.880 --> 0:04:50.960 to boost confidence. 0:04:51.040 --> 0:04:52.480 I think it's funny because I think Tim and I 0:04:52.520 --> 0:04:54.520 talk a lot about like the things that we're paying 0:04:54.520 --> 0:04:59.680 for in life right now, whether it's homes or rates. 0:04:59.320 --> 0:05:03.599 On, you know, buying a home right insurance is super expensive. 0:05:03.120 --> 0:05:06.880 Now cool, Like everything seems super expensive right now. Yeah, 0:05:06.920 --> 0:05:09.159 and then we have jobs and we feel pretty confident. 0:05:09.240 --> 0:05:11.039 This is these are the things that are at the 0:05:11.160 --> 0:05:14.400 low end of the hierarchy of need. So we're not 0:05:14.520 --> 0:05:18.280 talking about luxury goods where you can do with or without. 0:05:18.600 --> 0:05:21.960 We're talking about essentials, and so that creates this sense 0:05:22.000 --> 0:05:26.680 of vulnerability where people feel hostage to either the price 0:05:26.680 --> 0:05:29.360 scarcity or the supply scarcity or the demand scarcity. 0:05:29.480 --> 0:05:32.200 Everything you're talking about we could have talked about six 0:05:32.240 --> 0:05:35.040 months ago. We could have talked about in January before 0:05:35.279 --> 0:05:36.880 the run up of close to twenty percent on the 0:05:36.920 --> 0:05:39.000 S and P five hundred this year, which by the way, 0:05:39.040 --> 0:05:42.160 has now been pretty much cut in half at this point. So, Peter, 0:05:42.240 --> 0:05:45.359 what were people ignoring and what is it portend for 0:05:45.440 --> 0:05:45.920 the future. 0:05:46.440 --> 0:05:49.000 So if I look at the markets over the last 0:05:49.000 --> 0:05:54.520 six months, I think the indices are masking what's really 0:05:54.560 --> 0:05:58.680 going on, which is this enormous stratification where the low 0:05:58.800 --> 0:06:03.240 end russells small cap stocks or barely I don't know 0:06:03.320 --> 0:06:04.800 this afternoon if they're up for the years. 0:06:04.800 --> 0:06:05.599 Talk about this all the time. 0:06:05.839 --> 0:06:08.200 We talk about the small shops so forma, and this 0:06:08.279 --> 0:06:12.520 is an indication of declining confidence and declining success for 0:06:13.279 --> 0:06:19.280 small businesses. And so I worry that investors, by pouring 0:06:19.360 --> 0:06:24.400 money into the Thoroughbreds, into the Amazon and Apple and 0:06:24.480 --> 0:06:30.680 Google and Microsoft, are being misled by the fact that 0:06:30.839 --> 0:06:35.239 things are troublesome below the surface the other four hundred 0:06:35.240 --> 0:06:36.239 and ninety five companies. 0:06:36.279 --> 0:06:38.039 The other thing I guess I would go to is 0:06:38.040 --> 0:06:40.640 that when we talk about rates, and we constantly keep going, well, 0:06:40.680 --> 0:06:44.120 you know, highest rates at SO seven or the eight time, 0:06:44.640 --> 0:06:47.160 and that time really felt like the bottom was going 0:06:47.200 --> 0:06:50.400 to come out from under us. It doesn't necessarily feel 0:06:50.440 --> 0:06:54.359 like that time today that bad. But then again, is 0:06:54.400 --> 0:06:57.280 it because we're not necessarily really reading what's going on 0:06:57.440 --> 0:06:58.360 or were missing things? 0:06:58.800 --> 0:07:02.440 Yeah, and I think we're still in this unwind from 0:07:02.960 --> 0:07:07.760 negative interest rates two years ago, and so we tend 0:07:07.800 --> 0:07:11.120 to look at it on an absolute basis, but it's 0:07:11.160 --> 0:07:13.960 going to be interesting to see how balanced investors feel 0:07:14.000 --> 0:07:16.200 when they get their statements at the end of the 0:07:16.280 --> 0:07:19.040 quarter where both their stock portfolios. 0:07:19.080 --> 0:07:20.160 You're done. 0:07:20.840 --> 0:07:22.240 I was gonna say a lot of people who don't 0:07:22.240 --> 0:07:24.480 wait to get the statements, They you know, log in 0:07:24.520 --> 0:07:25.240 when they see red. 0:07:25.320 --> 0:07:28.520 I check periodically, but you're right, it's like a reality 0:07:28.600 --> 0:07:31.240 check of like, it's again a reminder not everything goes up, 0:07:32.320 --> 0:07:35.640 but when we do go like, is there something though 0:07:35.680 --> 0:07:38.240 significant when we do make those references back to two 0:07:38.320 --> 0:07:40.600 thousand and seven, two thousand and eight, which was such 0:07:40.640 --> 0:07:44.480 a significant time in this country as well as certainly 0:07:44.520 --> 0:07:48.920 within the financial market universe, is it are we setting 0:07:48.960 --> 0:07:52.120 up for a period another period that's as rough as 0:07:52.120 --> 0:07:53.800 some of the stuff we went through there in terms 0:07:53.840 --> 0:07:54.600 of the markets. 0:07:54.880 --> 0:07:59.160 So I think what's been so interesting in the past 0:07:59.200 --> 0:08:04.840 two years is we're seeing a concurrent unwinding of extreme 0:08:04.920 --> 0:08:08.760 sentiment in both stocks and bonds. The trade isn't risk 0:08:08.840 --> 0:08:12.800 on versus risk off, it's risk one versus risk out, 0:08:13.560 --> 0:08:16.120 and you're seeing that in the growth in money market funds, 0:08:16.120 --> 0:08:20.280 where money is leaving the market outright, and that's a 0:08:20.400 --> 0:08:23.520 trend we need to keep a lot of attention on 0:08:24.200 --> 0:08:28.200 because you know seven oh eight, other than a few 0:08:28.240 --> 0:08:32.440 weeks there was this rotation into bonds out of stocks, 0:08:33.360 --> 0:08:36.800 and that we're not seeing that, even though yields are 0:08:37.160 --> 0:08:39.800 significantly higher than they were recent one. 0:08:39.800 --> 0:08:40.640 So where's the money going. 0:08:40.720 --> 0:08:42.400 It's going into money market funds over. 0:08:42.240 --> 0:08:44.280 Five percent and a money market fund you've just said 0:08:44.280 --> 0:08:47.440 it there until you know, and you're earning more than 0:08:47.520 --> 0:08:48.480 ten year yields today. 0:08:48.480 --> 0:08:51.760 I mean, so it's a really it's cash has become 0:08:51.800 --> 0:08:56.679 a viable alternative. And as I said, with stocks and 0:08:56.720 --> 0:09:01.840 bonds moving down in price together, that it could start 0:09:01.840 --> 0:09:06.640 to feed upon its well stay that way. Who knows, 0:09:07.080 --> 0:09:07.800 who knows. 0:09:08.360 --> 0:09:09.880 But I mean at a certain point, bonds are going 0:09:09.920 --> 0:09:11.840 to become attractive to some of these people, right. 0:09:12.360 --> 0:09:18.600 So that's the question. If bonds were a bubble, if 0:09:19.280 --> 0:09:26.280 negative interest rates were a sign of extreme sentiment, then 0:09:26.320 --> 0:09:30.960 we're likely to see that rising rates. Falling prices don't 0:09:31.080 --> 0:09:35.160 draw a crowd. That we've seen everybody who is going 0:09:35.200 --> 0:09:38.240 to buy a bond did, and much as you see 0:09:38.280 --> 0:09:43.199 when stock market bubbles unwined, lower price doesn't draw anybody. 0:09:43.720 --> 0:09:48.920 You get the occasional bounces, but it's a perpetual unwinding machine. 0:09:49.040 --> 0:09:51.440 Is it safe to say? And I think you mentioned 0:09:51.440 --> 0:09:54.720 this earlier. We've never come out of a pandemic, We've 0:09:54.760 --> 0:09:56.679 never come out of a time period like this. We 0:09:56.760 --> 0:09:58.960 don't really ultimately know how it all settles. 0:09:59.280 --> 0:09:59.920 We don't. 0:10:00.400 --> 0:10:04.480 But let me create a bull case here. You talk 0:10:04.480 --> 0:10:06.600 out of both sides of my mouth and economists. That's 0:10:07.679 --> 0:10:11.800 the we talked about all this cash going into all 0:10:11.840 --> 0:10:15.440 the money going into money markets, that then becomes a 0:10:15.440 --> 0:10:21.559 potential source for further enthusiasm. If sentiment were to bottom. 0:10:21.760 --> 0:10:24.360 The cash on the side of the sideline, and. 0:10:24.280 --> 0:10:26.800 There's a lot of it, I mean, there's an enormous 0:10:26.840 --> 0:10:30.000 amount of cash sitting there, and so you could have 0:10:30.120 --> 0:10:34.280 this powerful reversal where the crowd says that was it, 0:10:34.840 --> 0:10:37.600 that was as bad as it got, and we're back 0:10:37.640 --> 0:10:38.200 to the races. 0:10:38.280 --> 0:10:39.599 I mean, if you're saying that, like the S and 0:10:39.600 --> 0:10:41.840 P five hundred, at forty five hundred, you were regretting 0:10:41.840 --> 0:10:43.559 not putting some money in. Now it's at forty two 0:10:43.600 --> 0:10:46.160 hundred and you're like, Okay, maybe it's time or there 0:10:46.200 --> 0:10:47.079 could be further to go. 0:10:47.600 --> 0:10:49.880 Well, and I can create a bull scenario, which is 0:10:50.440 --> 0:10:53.360 if the dollar is then going to fall, you start 0:10:53.360 --> 0:10:57.920 to see a declining dollar, that's a huge tailwind for 0:10:58.000 --> 0:10:58.840 these megacaps. 0:10:59.240 --> 0:11:01.920 With us, as Bloomberg News congressional reporter Eric Wahlson on 0:11:02.000 --> 0:11:04.280 the phone at the Capitol in Washington, d C. Still 0:11:04.280 --> 0:11:07.000 with us, Peter Atwater as a professor of economics at 0:11:07.000 --> 0:11:10.640 William and Mary and author of the Confidence Matt and Eric, 0:11:10.640 --> 0:11:12.960 I want to start with you give us some color 0:11:12.960 --> 0:11:15.520 about what are you hearing. What's the environment in and 0:11:15.559 --> 0:11:18.520 around the Capitol as we count down to that possible shutdown. 0:11:19.640 --> 0:11:21.360 Well, you know, I think really the focus is on 0:11:21.480 --> 0:11:24.640 the House, where even longtime Republican aids and operators are saying, 0:11:24.640 --> 0:11:27.680 it's just chaos. They haven't seen anything like it. It's 0:11:27.679 --> 0:11:30.000 just an inability really of the House Republicans to come 0:11:30.000 --> 0:11:32.960 together on even an offer. You know, they've proposed a 0:11:33.120 --> 0:11:36.080 stop gap spending bill of between thirty one days or 0:11:36.120 --> 0:11:38.480 forty five days, try to attach that to some border 0:11:38.520 --> 0:11:43.040 security position provisions and make the President come to terms 0:11:43.400 --> 0:11:45.760 on a border deal. But they can't even really get 0:11:45.800 --> 0:11:47.840 the votes to pass that, So they're not even off 0:11:47.920 --> 0:11:51.160 of first base here. And the meanwhile, the Senate's moving 0:11:51.160 --> 0:11:55.080 forward with his bipartisan deal. You know, it's about six 0:11:55.120 --> 0:11:58.720 billion dollars in Ukraine aid six billions for disaster funds 0:11:58.760 --> 0:12:01.240 the government for forty seven. Now, you know, if the 0:12:01.280 --> 0:12:03.840 Senate passes that, which it likely could do by Sunday, 0:12:03.960 --> 0:12:06.760 a government shutdown has already started. There'd be a lot 0:12:06.760 --> 0:12:09.240 of pressure on McCarthy to bring that up, but he 0:12:09.320 --> 0:12:11.720 told his conference he's not going to bring that up today, 0:12:12.120 --> 0:12:13.760 and so we're really heading to a shutdown. 0:12:13.920 --> 0:12:15.880 Eric, you've seen this play out before. So just give 0:12:15.920 --> 0:12:17.679 us an idea of if the government does shut down, 0:12:17.760 --> 0:12:19.480 or maybe we say at this point when the government 0:12:19.480 --> 0:12:23.360 does shut down, help us by looking into your crystal 0:12:23.400 --> 0:12:25.760 ball and giving us an idea of when things open 0:12:25.840 --> 0:12:27.320 up back open up again. 0:12:28.120 --> 0:12:30.600 Well, one in tricking possibility is that House Modern it's 0:12:30.840 --> 0:12:32.960 conductive rebellion. Put a couple of stories on the Boomberg 0:12:33.000 --> 0:12:35.840 about that. They have some procedural mechanisms on's called the 0:12:35.840 --> 0:12:39.600 discharge petition where they could within about nine legislative days, 0:12:39.640 --> 0:12:42.920 force a vote against speakers wishes on that Senate bill 0:12:43.000 --> 0:12:45.480 or on their own rival plan, which would actually extend 0:12:45.559 --> 0:12:48.679 government counting to January eleventh. You know, to Vida is 0:12:48.679 --> 0:12:50.760 a betrayal of the party but they are arguing, well, 0:12:50.880 --> 0:12:53.400 be a lot of the Conservatives a vote against the 0:12:53.400 --> 0:12:56.880 which party speaker candidate, and vote against House rules and 0:12:56.960 --> 0:13:00.240 other things, so they've also shown disloyalty. So, you know, 0:13:00.280 --> 0:13:03.280 Mike Lawler of New York, one of the moderate Biden 0:13:03.320 --> 0:13:06.200 district Republicans leading that effort. He can probably bring along 0:13:06.679 --> 0:13:09.280 five other New York Republicans to help him, and that's 0:13:09.280 --> 0:13:11.240 all it's truly needed to trigger this process. So it 0:13:11.280 --> 0:13:13.480 could be as little as nine days for our way, 0:13:13.480 --> 0:13:16.120 as the Speaker could try to thwart that. You know, 0:13:16.280 --> 0:13:19.120 on the other hand, I could see a resolution quicker. 0:13:19.640 --> 0:13:22.320 It just really depends on really on these moderates and 0:13:22.320 --> 0:13:25.400 where the Speaker ultimately decides, you know, just the shut 0:13:25.400 --> 0:13:28.120 does it's not worth the pain, not worth risking the House. 0:13:28.320 --> 0:13:30.800 He could face emotion nowst him at that point to 0:13:30.840 --> 0:13:33.600 be up to Democrats whether they bail him out. You know, 0:13:33.600 --> 0:13:37.240 there's probably enough Conservatives that he would you know, be 0:13:37.320 --> 0:13:39.120 able to be ousted without democratic help. 0:13:39.400 --> 0:13:41.800 The political process. As we said earlier when we began 0:13:41.840 --> 0:13:44.480 talking with Peter Atwater at the top of the broadcast, Peter, 0:13:44.559 --> 0:13:46.480 one of the things that's on the minds of investors 0:13:46.559 --> 0:13:48.880 is his potential for a government shut down. There is 0:13:49.040 --> 0:13:54.679 potentially an impact when you don't have government programs, the 0:13:54.720 --> 0:13:58.480 expenditures going out, you don't have employees being paid. There's 0:13:58.520 --> 0:14:00.319 an impact. I mean, how do you think about it? 0:14:00.320 --> 0:14:01.800 Think abou William and Mary. They spend a lot of 0:14:01.800 --> 0:14:04.200 time in terms of policy and the connection of policy 0:14:04.200 --> 0:14:05.640 and economic impacts. 0:14:05.840 --> 0:14:06.000 Yeah. 0:14:06.040 --> 0:14:09.439 So I often say that policy makers follow mood, and 0:14:09.600 --> 0:14:13.040 this is policy makers in me here now mode. The 0:14:13.080 --> 0:14:18.320 only thing they care about is their individual survival. And 0:14:18.640 --> 0:14:22.760 with mood falling is indicated by the markets, that's going 0:14:22.800 --> 0:14:28.640 to make getting a resolution together very difficult until there 0:14:28.720 --> 0:14:35.200 is ultimately capitulation where some group is led to believe 0:14:35.360 --> 0:14:39.400 that they're vulnerable in this process. And what we see 0:14:39.440 --> 0:14:44.360 today is a lot of between the gerrymandering and the 0:14:45.840 --> 0:14:49.520 heavy one statedness that we have in terms of political alignment, 0:14:50.600 --> 0:14:54.080 that vulnerability is not showing up anywhere anytime soon. 0:14:55.480 --> 0:14:58.000 So, Peter, your book is called the Confidence Map, Charting 0:14:58.000 --> 0:15:00.520 a Path from Chaos to Clarity. As a word, I 0:15:00.560 --> 0:15:03.000 think a lot of people would associate with what's going 0:15:03.040 --> 0:15:04.920 on at least in Washington right now. Eric, you might 0:15:05.800 --> 0:15:09.480 agree or disagree. I don't know, do Americans still look 0:15:09.480 --> 0:15:12.360 for confidence in the government or if we kind of said, 0:15:12.400 --> 0:15:14.720 you know what, it's not happening. 0:15:15.000 --> 0:15:17.240 The bond market would say they don't. I mean that 0:15:17.560 --> 0:15:24.480 the markets yawn over what's happening in Washington is remarkable 0:15:24.480 --> 0:15:28.320 to me, but that is the nature of the investing 0:15:28.360 --> 0:15:28.880 crowd to do. 0:15:29.080 --> 0:15:30.600 But is it yawning because they know it's going to 0:15:30.640 --> 0:15:32.880 get resolved and it's happened before. 0:15:32.960 --> 0:15:36.000 Yeah, yeah, I think we're numb to it. But therein 0:15:36.120 --> 0:15:41.360 lies the danger that that belief that ultimately Congress comes 0:15:41.360 --> 0:15:47.640 to its senses is based on the past and the environment. 0:15:47.680 --> 0:15:50.360 The mood environment, at least right now, suggests that that 0:15:50.440 --> 0:15:52.200 may not be the best assumption. 0:15:52.520 --> 0:15:54.240 Eric, come on back in here, because I do it 0:15:54.320 --> 0:15:55.920 was interesting what Peter said, Like, I do think that 0:15:55.960 --> 0:15:57.560 there is such a big yawn. I think if I 0:15:57.560 --> 0:15:59.240 brought this up with a lot of my family members, 0:15:59.240 --> 0:16:01.120 they'd be like, yeah, okay, tell me something I care about. 0:16:01.720 --> 0:16:05.480 But I do wonder Eric, in terms of do members 0:16:05.480 --> 0:16:08.560 of Congress are they getting calls from their constituents. I mean, 0:16:08.680 --> 0:16:11.040 I'm sure corporate folks might be if they're not going 0:16:11.080 --> 0:16:13.880 to get some kind of you know, government contract payout 0:16:13.960 --> 0:16:17.320 or something. But I just wonder, do lawmakers here from 0:16:17.640 --> 0:16:20.200 the voting members of the US. 0:16:20.840 --> 0:16:22.480 Well, you know, some of them say that they aren't 0:16:22.520 --> 0:16:24.480 hearing some of them say they are. But I would 0:16:24.480 --> 0:16:25.840 say we have a couple of really good things in 0:16:25.840 --> 0:16:27.880 the terminal right now. One is a great story which 0:16:27.920 --> 0:16:32.000 talks about which lawmakers have the most federal workers in 0:16:32.040 --> 0:16:34.320 their district, and one of them is bat Gates is 0:16:34.360 --> 0:16:37.240 leading that the government shutdown charge. He has the third 0:16:37.320 --> 0:16:40.960 most number of federal workers in his district. So you know, 0:16:41.040 --> 0:16:43.760 these are people who are not necessarily acting in the 0:16:43.960 --> 0:16:46.800 interests of their constituents. I'd also point out another story 0:16:46.800 --> 0:16:49.840 I wrote on the terminal, which is about the economic impact. 0:16:49.880 --> 0:16:54.080 You know, we discovered big of Bloomberg government data at 0:16:54.120 --> 0:16:56.840 one point nine billion dollars per day and lost or 0:16:56.880 --> 0:17:00.000 delayed revenue to federal contractors, and that is going to grow. 0:17:00.000 --> 0:17:02.480 So you're going to see service contractors laid off and 0:17:02.520 --> 0:17:05.679 never get back pay. You're going to see production lines disrupted. 0:17:06.119 --> 0:17:08.639 And who we talked to in that story, basically, you know, 0:17:08.720 --> 0:17:10.200 they said, you know, this is the time with high 0:17:10.240 --> 0:17:12.840 inflation I interest rate, you're going to see a cash 0:17:12.840 --> 0:17:15.080 flow crunch some of these small contractors. You're going to 0:17:15.119 --> 0:17:17.800 see some companies even go bailly up in a six 0:17:17.880 --> 0:17:20.119 to seven week shutdown. So, you know, I think the 0:17:20.160 --> 0:17:22.760 longer it goes on, the longer the clamor the bigger 0:17:22.760 --> 0:17:26.120 the pain. As your guests said, you know, and someone's 0:17:26.160 --> 0:17:27.240 going to have to capitulate. 0:17:27.720 --> 0:17:29.520 Eric, you know that is such a really good point. 0:17:29.600 --> 0:17:31.719 I mean, Peter, I do think about that. Smaller companies, man, 0:17:31.800 --> 0:17:35.040 they live I feel like from money into money out, 0:17:35.080 --> 0:17:37.200 like they just live from day to day in terms 0:17:37.240 --> 0:17:40.000 of their you know, financial books, if you will. I mean, 0:17:40.119 --> 0:17:41.639 that is a possible cost to all of this. 0:17:42.040 --> 0:17:42.240 Yeah. 0:17:42.280 --> 0:17:46.399 Well, and I think it's yet another moment where those 0:17:46.440 --> 0:17:50.080 on the left and the right fail to appreciate the 0:17:50.160 --> 0:17:54.400 vulnerability of those at the bottom and business and individually 0:17:55.160 --> 0:18:00.960 and ultimately the potential that that those at the bottom 0:18:01.040 --> 0:18:03.159 say enough of both left and right. 0:18:03.880 --> 0:18:06.560 What happens when or if that happens, Peter. 0:18:06.840 --> 0:18:12.560 So, I think you start to see grassroots movements where 0:18:13.000 --> 0:18:20.080 you see pockets of both red and blue individuals and 0:18:20.119 --> 0:18:22.520 businesses that the low ends say we've had enough. 0:18:22.760 --> 0:18:24.959 I feel like you need to occupy Wall Street or 0:18:24.960 --> 0:18:26.480 occupy corporate America. 0:18:26.600 --> 0:18:28.000 You know to what I mean, maybe that was the 0:18:28.040 --> 0:18:29.680 Tea Party, or maybe it was the rise of Trump 0:18:29.680 --> 0:18:30.480 in twenty sixteen. 0:18:31.080 --> 0:18:34.840 But I think that and Eric may want to weigh 0:18:34.880 --> 0:18:40.720 in on this, is that the environment today is uniting. 0:18:41.040 --> 0:18:45.200 Well, uniting everybody it goes. 0:18:44.840 --> 0:18:46.800 With similar vulnerabilities. 0:18:47.000 --> 0:18:49.639 Well, Eric, we've got only about twenty five seconds. What 0:18:49.720 --> 0:18:52.080 do you say to that about unifying people? 0:18:52.320 --> 0:18:54.399 I think one of the interesting things is how split 0:18:54.440 --> 0:18:56.760 America is. You've got almost a fifty to fifty country, 0:18:56.800 --> 0:18:59.080 and that's why the House is the margin is so small, 0:18:59.119 --> 0:19:01.280 and that's what's really cool. The problem here is that 0:19:01.320 --> 0:19:05.240 you McCarthy's majority. If he had twenty seat majority, this 0:19:05.320 --> 0:19:07.359 would be the issue we're seeing today. The fact is 0:19:07.400 --> 0:19:10.560 he's only lose four and there's a very small number 0:19:10.640 --> 0:19:13.080 five to seven who are basically saying, you know, we 0:19:13.160 --> 0:19:16.000 won't vote for this starting position CR. So I think 0:19:16.040 --> 0:19:19.440 that's that's an element of it to the small House majority, right, 0:19:19.600 --> 0:19:21.960 and you know, his personal skills, Nancy Pelosi had a 0:19:21.960 --> 0:19:24.919 small majority to get more through. You know, he just 0:19:25.000 --> 0:19:26.800 isn't able to get those last couple of votes that 0:19:26.800 --> 0:19:27.240 he needs. 0:19:27.320 --> 0:19:29.080 Eric Watson, we know you're busy Thank you so much. 0:19:29.080 --> 0:19:32.320 Congression reporter at Bloomberg News, Peter Atwater, President Financial Insights, 0:19:32.320 --> 0:19:34.440 and check out his book, of course, The Confidence Map. 0:19:34.480 --> 0:19:35.520 Thank you so much. 0:19:35.920 --> 0:19:39.480 You're listening to the Bloomberg Business Week podcast. Catch us 0:19:39.520 --> 0:19:42.879 live weekday afternoons from three to six Eastern Listen on 0:19:42.920 --> 0:19:46.960 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, 0:19:47.240 --> 0:19:48.920 or watch us live on YouTube. 0:19:50.080 --> 0:19:53.320 D Cass chairman and CEO at his investment from Revolution, 0:19:53.480 --> 0:19:56.040 co founder of course of AOL which at its peak 0:19:56.200 --> 0:19:59.000 nearly half of Internet users in the US used AOL, 0:19:59.320 --> 0:20:01.680 so really just game changer, and he's back with us 0:20:02.200 --> 0:20:04.720 on zoom from Washington, DC. Steve, it is great to 0:20:04.720 --> 0:20:07.560 have you back here with Tim and myself on Bloomberg 0:20:07.600 --> 0:20:09.960 Business Week. You know, it's been a year since you 0:20:10.000 --> 0:20:13.720 published Rise of the Rest, How entrepreneurs and surprising places 0:20:13.760 --> 0:20:16.879 are building the New American Dream. It's now out in paperback. 0:20:17.560 --> 0:20:20.640 How is the entrepreneurial spirit and the American dream doing 0:20:20.680 --> 0:20:22.440 in your view in the pursuit of it? 0:20:23.080 --> 0:20:25.720 Well, I think entrepreneurship continues to be alive and well, 0:20:25.720 --> 0:20:27.760 and the message of the Rise of the Rest book 0:20:27.840 --> 0:20:30.240 is it just isn't alive and well just in places 0:20:30.280 --> 0:20:32.840 like Silicon Valley, it's placed all around the country. They're 0:20:32.920 --> 0:20:37.280 developing a strong startup ecosystems, and that's helpful because entrepreneurs 0:20:37.280 --> 0:20:40.359 who historically would would have to feel like they left 0:20:40.560 --> 0:20:42.119 to leave where they were from to go to the 0:20:42.200 --> 0:20:44.119 coast to be part of the innovation of come and 0:20:44.119 --> 0:20:46.720 now can stay and build and scale there and great 0:20:46.840 --> 0:20:49.520 jobs there. So it's been great to see the momentum 0:20:49.600 --> 0:20:52.000 over the last decade since we started Rise of the Rest, 0:20:52.280 --> 0:20:55.040 the pandemic has certainly been an accelerant, almost a tipping 0:20:55.080 --> 0:20:58.120 point in terms of more people decided to move other places. 0:20:58.160 --> 0:21:01.080 So it's seen a dispersion of talent and spursion of capital, 0:21:01.320 --> 0:21:02.960 and a lot of great ideas that are really kind 0:21:02.960 --> 0:21:06.440 of reimagining healthcare and food and agriculture and financial services 0:21:06.480 --> 0:21:09.959 and transportation and education. Some of the most important aspects 0:21:10.000 --> 0:21:11.960 of our lives and some of the biggest industries are 0:21:12.200 --> 0:21:14.800 really up for grabs in this next next phase. 0:21:15.280 --> 0:21:16.520 Rise of the Rest is the name of the book, 0:21:16.560 --> 0:21:18.320 it's the name of the seed fund as well. Steve, 0:21:18.960 --> 0:21:21.440 what about rise of the rates that we've seen over 0:21:21.480 --> 0:21:25.080 this year to what extent is that hurting the startups 0:21:25.080 --> 0:21:27.560 that you talk to when you interact with well. 0:21:27.440 --> 0:21:31.120 Certainly when rates are higher, you know, there's a little 0:21:31.119 --> 0:21:33.280 bit of a pullback in terms of the stock market 0:21:33.359 --> 0:21:35.879 valuations as we've seen, and they're therefore a pullback in 0:21:35.960 --> 0:21:39.600 terms of particularly the late stage private market valuations, the 0:21:39.640 --> 0:21:42.840 pre IPO valuations. So we've seen that dynamic or the 0:21:42.880 --> 0:21:44.800 last eighteen months or so, which frankly I think is 0:21:45.160 --> 0:21:47.760 healthy and not all that unexpected a couple of years ago. 0:21:47.800 --> 0:21:50.360 Things we're getting a little frothy in that later stage, 0:21:50.560 --> 0:21:53.840 and so we're seeing a correction at the growth stage 0:21:53.880 --> 0:21:56.919 of the market. On the earlier seed side, it's not 0:21:57.000 --> 0:21:59.159 quite the same impact, and particularly in these rises of 0:21:59.160 --> 0:22:02.840 the rest cities. Valuations of the seed investments we've done 0:22:02.840 --> 0:22:04.560 with our rides the Rest Fund, and so far we've 0:22:04.560 --> 0:22:07.040 done two hundred over two hundred investments in one hundred 0:22:07.040 --> 0:22:09.800 different cities, valuations tend to be about half of what 0:22:09.840 --> 0:22:13.919 the valuations are for comparable companies at the seed stage. 0:22:13.960 --> 0:22:17.240 In places like Silicon Valley, it's a classics supply and demand. 0:22:17.280 --> 0:22:20.480 So much capitals focused on a venture capital focused on 0:22:20.520 --> 0:22:23.040 Silicon Valley, not enough on other parts of the country, 0:22:23.119 --> 0:22:26.640 so that dynamics still creates a great opportunity for investors 0:22:26.640 --> 0:22:29.440 who are willing to do the extra work to identify 0:22:29.960 --> 0:22:34.199 promising entrepreneurs tackling big industries in dozens of cities all 0:22:34.200 --> 0:22:34.840 around the country. 0:22:34.920 --> 0:22:36.520 Well, and that's a really good point that you talked 0:22:36.520 --> 0:22:39.240 about all the innovation that's going on in other cities 0:22:39.280 --> 0:22:42.240 beyond Silicon Valley. Having said that, the collapse of Silicon 0:22:42.320 --> 0:22:46.240 Valley Bank and the fallout, what did you see as 0:22:46.280 --> 0:22:48.280 a result of that in terms of the work that 0:22:48.320 --> 0:22:50.360 you're doing, the investments that you're doing or none. 0:22:50.640 --> 0:22:53.280 There was a problem, no, no question. Even though it's 0:22:53.280 --> 0:22:57.040 called Silicon Valley Bank or SVB, actually bank startups all 0:22:57.080 --> 0:22:59.520 over the country, not just in Silicon Valley, and about 0:22:59.560 --> 0:23:03.000 half of the startups, about half of the venture firms 0:23:03.040 --> 0:23:07.040 in America or back by banks by SVB. So it's 0:23:07.080 --> 0:23:10.240 been very unhelpful. A number of firms are trying to 0:23:10.280 --> 0:23:13.119 fill the void and offer different products and services to 0:23:13.160 --> 0:23:16.480 both the venture funds and to the entrepreneurs, but it's 0:23:16.480 --> 0:23:17.920 certainly been a negative this year. 0:23:18.200 --> 0:23:20.520 And one thing we really wanted to ask you and 0:23:21.080 --> 0:23:23.320 was about what's going on in terms of regulation. We've 0:23:23.320 --> 0:23:25.840 been talking a lot about the FTC suit against Amazon, 0:23:25.960 --> 0:23:29.159 right anti trust case. We've all been kind of waiting 0:23:29.200 --> 0:23:34.280 for this, and the accusations are that Amazon is monopolizing 0:23:34.520 --> 0:23:37.800 the online marketplace services by degrading quality for shoppers and 0:23:37.840 --> 0:23:41.200 overcharging sellers. How do you think about this. 0:23:41.280 --> 0:23:43.400 Well, I haven't read the actual case obviously, as you said, 0:23:43.440 --> 0:23:46.000 it's been expected for some time. The FTC has gotten 0:23:46.000 --> 0:23:49.840 more aggressive on big tech and good is that. 0:23:49.800 --> 0:23:51.000 Good that they've got a big. 0:23:50.840 --> 0:23:53.800 More more scrutiny of big tech and it gets healthy. 0:23:53.840 --> 0:23:56.640 My focus, as you know, is around the new companies, 0:23:56.640 --> 0:23:59.520 the entrepreneurs, the insurgents that want to take on some 0:23:59.600 --> 0:24:02.520 of the big incumbents, and making sure that there's an 0:24:02.640 --> 0:24:06.520 environment that allows innovation to flourish, entrepreneurs to be successful, 0:24:06.840 --> 0:24:09.600 including in areas of e commerce. Or have a similar 0:24:09.640 --> 0:24:13.400 case with with Google on some issues related to the search. 0:24:13.480 --> 0:24:16.320 I think that scrutiny is appropriate. Exactly what happens in 0:24:16.359 --> 0:24:18.639 each court case obviously needs to kind of just you know, 0:24:18.920 --> 0:24:21.120 have to see how it plays out. But I think 0:24:21.119 --> 0:24:23.040 it is important that we make sure we're airing on 0:24:23.080 --> 0:24:26.200 the site as a nation of making sure entrepreneurship can 0:24:26.280 --> 0:24:29.679 flourish everywhere, and big tech doesn't just get bigger, including 0:24:29.720 --> 0:24:31.240 by the way, with AI. One of the one of 0:24:31.240 --> 0:24:34.040 the big debates here in Washington around AI as it 0:24:34.080 --> 0:24:36.359 gets more attention, is is it going to end up 0:24:36.359 --> 0:24:38.879 being a few big companies getting even bigger, or is 0:24:38.880 --> 0:24:41.639 it going to be a broader, more dispersed innovation ecosystem 0:24:41.640 --> 0:24:44.160 a little bit more on the open source side. And 0:24:44.240 --> 0:24:45.919 so I will see how that plays out over the 0:24:46.280 --> 0:24:49.240 coming year. But the Internet's not so important. Technology so important. 0:24:49.320 --> 0:24:52.800 Every industry really is now tech enabled. Every company really 0:24:52.840 --> 0:24:54.919 is in some ways a tech company. It's not at 0:24:54.920 --> 0:24:57.320 all surprising that there's more anti trust scrutiny. 0:24:57.520 --> 0:25:00.159 Did it never feel like to you that AOL were 0:25:00.280 --> 0:25:03.920 days of founding and running AOL was so big that 0:25:04.240 --> 0:25:06.280 it could have faced more antitrust scrutiny. 0:25:06.800 --> 0:25:10.400 No, we actually did, and some of the News Corp 0:25:10.480 --> 0:25:12.800 And others at one point, you know, filed suit saying 0:25:13.240 --> 0:25:15.520 had too much control of the Internet. And even when 0:25:15.560 --> 0:25:18.000 we merged with Time Warner, the Microsoft at and T 0:25:18.080 --> 0:25:20.159 others were trying to block the deal with that, you know, 0:25:20.200 --> 0:25:22.960 that argument. And so in that particular case, obviously I 0:25:23.000 --> 0:25:25.280 hate to say it, but for a whole host of reasons, 0:25:25.720 --> 0:25:28.639 AOL failed. By the wayside, new entrants including you know, 0:25:28.680 --> 0:25:31.680 Google and Facebook and others kind of you know, took over. 0:25:32.200 --> 0:25:34.600 And it's because those news companies were able to start, 0:25:34.600 --> 0:25:36.720 They were able to raise the venture capital or not 0:25:36.840 --> 0:25:39.760 barriers to entry to allow them to start. So that's 0:25:39.760 --> 0:25:43.320 the philosophy we need going forward. Celebrate the successes we 0:25:43.400 --> 0:25:45.440 have in our country, including some of these great companies 0:25:45.440 --> 0:25:48.359 Amazon and Google and so many many others, But how 0:25:48.359 --> 0:25:51.320 do we make sure we're also creating environments so more 0:25:51.520 --> 0:25:54.000 of those companies can be the big companies of tomorrow, 0:25:54.080 --> 0:25:56.639 not just on the coast, not just in Silicon Valley, 0:25:56.840 --> 0:25:58.800 but all over the country, which obviously why I wrote 0:25:58.800 --> 0:25:59.760 the book Rise of the Rest. 0:26:00.080 --> 0:26:01.000 So how do we do that? 0:26:01.080 --> 0:26:01.280 Though? 0:26:01.320 --> 0:26:04.560 I mean, we spoke to Diana Henriquez last week, who know, 0:26:04.680 --> 0:26:07.520 compared the power companies of the nineteen twenties and nineteen 0:26:07.520 --> 0:26:10.159 thirties and the regulation of the power companies to the 0:26:10.200 --> 0:26:12.480 tech companies, the huge tech giants today, and she says 0:26:12.520 --> 0:26:16.199 government needs to get involved with them. What does the 0:26:16.240 --> 0:26:18.879 government need to do in order to ensure that the 0:26:18.920 --> 0:26:20.920 rest can rise well? 0:26:20.960 --> 0:26:23.960 I'm marketing, I'm coach sharing the National Advisory Council on 0:26:24.040 --> 0:26:27.320 Innovation and Entrepreneurship here here in Washington, and we're working 0:26:27.400 --> 0:26:30.560 on a National Entrepreneurship Strategy, which we'll be releasing later 0:26:30.600 --> 0:26:33.000 this year. And there's a number of facets to it. 0:26:33.080 --> 0:26:36.840 Some relate that the talent, including immigration policy. Some relate 0:26:36.880 --> 0:26:39.679 to access to capital, including some of the work around 0:26:40.000 --> 0:26:42.440 Rise the rest some of it relates to making sure 0:26:42.720 --> 0:26:45.800 you know, there's continued investment in regional hubs. Congress passed 0:26:45.840 --> 0:26:47.840 the Chips and Science Act a couple of years ago 0:26:48.200 --> 0:26:50.960 and authorized ten billion dollars for regional hubs, with its 0:26:51.040 --> 0:26:53.680 only so far appropriated five hundred million dollars of it. 0:26:54.040 --> 0:26:56.840 Someone's making sure America continues to invest in the R 0:26:56.880 --> 0:26:59.159 and D, the technologies of the future to create the 0:26:59.200 --> 0:27:02.080 industries of the future. So there's many facets to it, 0:27:02.119 --> 0:27:05.080 but the overarching theme, I think is how do you 0:27:05.119 --> 0:27:08.000 make sure this next generational entrepreneurs can start and scale 0:27:08.040 --> 0:27:10.600 and do it anywhere in the country, not just a 0:27:10.640 --> 0:27:13.320 few big companies being able to innovate, or only people 0:27:13.320 --> 0:27:15.560 in a few places like Selictated Valley. So it's trying 0:27:15.560 --> 0:27:18.200 to create a more inclusive innovation economy has to be 0:27:18.280 --> 0:27:19.600 a key part of the answer. 0:27:19.800 --> 0:27:22.160 Steve. We're often so critical of other countries and their 0:27:22.200 --> 0:27:24.960 supportive industries. I'm thinking about China specifically, But you know, 0:27:24.960 --> 0:27:27.240 we are increasingly seeing the US, whether it's in the 0:27:27.280 --> 0:27:30.879 semiconductor space, whether it's in the EV or the energy 0:27:30.920 --> 0:27:35.080 transition support industries here in the United States. Should we, 0:27:35.440 --> 0:27:37.439 especially when it comes to some of the more newer 0:27:37.560 --> 0:27:38.560 innovative areas. 0:27:38.960 --> 0:27:41.640 Yes, and again there's sort of this long debate about 0:27:41.640 --> 0:27:44.440 industrial policy, long debate about how much of a role 0:27:44.440 --> 0:27:47.159 should government play. But the reality is the Internet wouldn't 0:27:47.160 --> 0:27:50.360 exist if the government hadn't funded you know, Darper Research 0:27:50.359 --> 0:27:52.800 Agency a half a century ago and then open it up, 0:27:52.800 --> 0:27:55.920 commercialized access to the Internet, and broken up the phone 0:27:55.920 --> 0:27:58.639 company so the costs of communications came down. There are 0:27:58.680 --> 0:28:02.280 a number of decisions that unleashed the Internet. So having 0:28:02.320 --> 0:28:04.960 that government role I think is important. That we the 0:28:04.960 --> 0:28:07.879 innovators need to respect the role of policy makers. I 0:28:07.880 --> 0:28:10.480 actually think in the next decade the two mega themes 0:28:10.520 --> 0:28:13.320 are going to be place and policy. That we're focused 0:28:13.480 --> 0:28:16.280 here at revolution around place, particularly rise the rest. We 0:28:16.320 --> 0:28:18.080 think a lot of the big companies that tomorrow will 0:28:18.080 --> 0:28:21.440 have a policy aspect to them because of the nature 0:28:21.480 --> 0:28:24.119 of the industries up for grabs, and because Congress has 0:28:24.160 --> 0:28:27.879 passed legislation about three trillion dollars of legislation, the Chips 0:28:27.880 --> 0:28:31.280 and Science Act, the Inflation Reduction Act, the Bipartisan Infrastructure 0:28:31.320 --> 0:28:34.159 Bill that's going to really invest in these industries in 0:28:34.160 --> 0:28:37.200 a big way and create opportunities for investors as well 0:28:37.240 --> 0:28:39.920 as ensuring that America has the right infrastructure, has the 0:28:40.000 --> 0:28:43.400 right technologies to continue to be the most innovative entrepreneurs 0:28:43.480 --> 0:28:43.800 in the world. 0:28:43.920 --> 0:28:45.640 Got to say, Steve, every time you're on you just 0:28:45.720 --> 0:28:48.280 leave us wanting more. So come back soon and good 0:28:48.360 --> 0:28:50.880 luck with the paperbook, a paperback version, I should say, 0:28:50.880 --> 0:28:52.240 a rise of the rest entrepreal. 0:28:52.280 --> 0:28:52.640 Thank you? 0:28:52.880 --> 0:28:56.000 Okay, if you well how entrepreneurs and surprising places are 0:28:56.000 --> 0:28:58.600 building the new American dream. Of course, the case. 0:29:03.840 --> 0:29:07.400 You're listening to the Bloomberg Business Week podcast. Catch us 0:29:07.440 --> 0:29:10.800 live weekday afternoons from three to six Eastern Listen on 0:29:10.840 --> 0:29:14.880 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 0:29:15.160 --> 0:29:17.440 or watch us live on YouTube. 0:29:18.320 --> 0:29:25.680 Boys, all right, this next story safe to say we're 0:29:25.680 --> 0:29:28.840 trying to figure out exactly who may be the bad actors. Here, 0:29:29.080 --> 0:29:33.000 you can say bad boys, bad boys. Step back first. Google, 0:29:33.040 --> 0:29:35.760 as you know, maintains one of the world's most comprehensive 0:29:35.800 --> 0:29:39.120 repositories of location information. It can often estimate a user's 0:29:39.160 --> 0:29:43.200 we'reabouts to within several feet. The company mainly gathers this 0:29:43.320 --> 0:29:47.760 information to sell advertising, but in recent years police started 0:29:47.760 --> 0:29:50.080 dipping into it to further their investigations. 0:29:50.160 --> 0:29:53.160 Yeah, the company's trove of user data now attracts thousands 0:29:53.160 --> 0:29:55.760 of requests from law enforcement across the US in cases 0:29:55.840 --> 0:29:58.840 large and small. Police say the warrants can unearth valuable 0:29:58.920 --> 0:30:01.280 leads when the textas are at a but to get 0:30:01.280 --> 0:30:04.440 those leads, cops often have to rummage through Google data 0:30:04.800 --> 0:30:06.880 on people who had nothing to do with a crime call. 0:30:07.000 --> 0:30:08.920 There's a lot of information there for them to go over. 0:30:09.080 --> 0:30:12.080 To better understand this process and its consequences, we dive 0:30:12.120 --> 0:30:14.240 into this week's Bloomberg Business Week cover story with our 0:30:14.240 --> 0:30:17.120 Bloomberg News tech team of Julia Love and Davey Alba, 0:30:17.200 --> 0:30:19.080 as well as the editor of the magazine, jel Weber. 0:30:19.280 --> 0:30:22.120 Jill's here in our Bloomberg Interactor Brokers Studio, Julia out 0:30:22.160 --> 0:30:24.480 there in our San Francisco bureau and Davy on the 0:30:24.480 --> 0:30:26.840 phone from Stanford, California. As you said, it's the cover 0:30:26.960 --> 0:30:30.000 story in the new issue on newstands online, and of 0:30:30.040 --> 0:30:32.360 course on the Bloomberg jail killer story. 0:30:33.000 --> 0:30:36.360 Julia, Davey and company have been working on this for 0:30:36.760 --> 0:30:39.520 a while and I from the moment I found out 0:30:39.520 --> 0:30:43.960 about it, I was like, tell me everything. And it 0:30:44.080 --> 0:30:48.160 required just a ton of data and analysis for us 0:30:48.200 --> 0:30:50.440 to actually be able to look at this story. But 0:30:50.480 --> 0:30:54.920 what it revealed is that there's a troubling element to 0:30:55.040 --> 0:31:00.880 how law enforcement has turned increasingly to Google over the 0:31:00.920 --> 0:31:04.760 past couple years, and the location history that people have 0:31:05.840 --> 0:31:09.440 on their phone search data, all of that is basically 0:31:09.480 --> 0:31:13.440 become a tool that can reverse engineer people who are 0:31:13.480 --> 0:31:19.200 at scenes of crimes, and sometimes being at a location 0:31:19.360 --> 0:31:21.960 nerolocation does not actually mean that you did the crime. 0:31:21.960 --> 0:31:24.520 And that's sort of where it gets interesting and where 0:31:25.520 --> 0:31:29.880 privacy experts in particular are a little terrified of how 0:31:29.920 --> 0:31:33.240 this is actually shaping up in the real world. So Julia, 0:31:33.320 --> 0:31:35.720 let's start with you. How did you, how did how 0:31:35.720 --> 0:31:39.720 did you happen upon this story? And where did where 0:31:39.760 --> 0:31:41.600 did you have to go? In order to piece it 0:31:41.600 --> 0:31:42.080 all together. 0:31:43.800 --> 0:31:46.960 Sure, well, in the wake of the Supreme Court's decision 0:31:47.240 --> 0:31:49.800 to overturn Roe versus Way, there was a lot of 0:31:49.840 --> 0:31:52.800 interest in how law enforcement would use all of the 0:31:52.880 --> 0:31:56.600 data that Goodle has about us, and so we wanted 0:31:56.600 --> 0:31:59.520 to look at the search warrants that police are submitting 0:31:59.560 --> 0:32:02.760 to DOODLE because we knew that that was the best 0:32:02.800 --> 0:32:05.280 way that we could get a handle on what was 0:32:05.280 --> 0:32:08.640 actually happening. And so to do that, Davy and I 0:32:09.080 --> 0:32:12.560 and our colleges fanned out to different courthouses around the 0:32:12.600 --> 0:32:16.720 country and we just took it page by page, thumbing 0:32:16.760 --> 0:32:20.640 through these warrants, identifying the ones that were submitted to DOODLE, 0:32:21.000 --> 0:32:23.800 and then scrutinizing them to see the nature of the 0:32:23.840 --> 0:32:26.480 case and what cops ultimately got. 0:32:26.720 --> 0:32:29.200 So give us an example of how this has played 0:32:29.200 --> 0:32:30.880 out in the real world. 0:32:32.520 --> 0:32:35.560 So one interesting example, there was a young detective in 0:32:35.640 --> 0:32:36.520 North Carolina. 0:32:36.680 --> 0:32:38.360 He's getting ready for work. 0:32:38.800 --> 0:32:41.040 He leaves his car running and he comes out and 0:32:41.240 --> 0:32:43.480 the car's gone and inside is. 0:32:43.480 --> 0:32:45.880 Set the car herene. 0:32:47.080 --> 0:32:49.240 Yes, it's a personal vehicle. 0:32:49.480 --> 0:32:53.200 Yeah, but but but there's gear inside and it's done. 0:32:53.520 --> 0:32:55.760 And you know, the department tells him you know, they're 0:32:55.800 --> 0:32:58.920 very supportive. They reassure him it'll be all right. But 0:32:58.960 --> 0:33:01.640 then they go to work and they turned to Google. 0:33:02.240 --> 0:33:07.600 They send them a warrant for everyone who's devices were 0:33:07.840 --> 0:33:12.680 near the place where the vehicle disappeared, and they also 0:33:12.880 --> 0:33:16.680 asked for information about people who searched for the model 0:33:16.960 --> 0:33:20.520 of the radio. And Goodle told us that they didn't 0:33:20.520 --> 0:33:24.800 provide search data, but they did provide some location data. 0:33:25.000 --> 0:33:27.640 And so this is, you know, just a real world. 0:33:27.400 --> 0:33:32.360 Example of how property crimes are attracting these requests. 0:33:32.400 --> 0:33:34.320 And obviously with that information, they were able to get 0:33:34.320 --> 0:33:36.520 the radio back, right, they were. 0:33:36.400 --> 0:33:39.240 Not the radio outstanding, you see. 0:33:40.440 --> 0:33:42.520 So Davey, come on in on this, because what it 0:33:42.560 --> 0:33:44.880 really turns upside down, And you guys lay this out 0:33:45.080 --> 0:33:48.000 so clearly in the story. The idea of a search warrant, right, 0:33:48.080 --> 0:33:52.400 would be typically on an individual, right, And now you've 0:33:52.400 --> 0:33:55.400 got thanks to Google, you can take a location and 0:33:55.480 --> 0:33:58.479 kind of search for information. But it feels like it 0:33:58.560 --> 0:34:02.400 opens up that information can reach a wider swath potentially 0:34:02.440 --> 0:34:05.920 of individuals, some who may not at all be connected 0:34:05.960 --> 0:34:08.439 to a possible crime. So come on in on that. 0:34:09.719 --> 0:34:14.560 Yeah, absolutely, So tech companies hold a lot of data 0:34:14.640 --> 0:34:19.799 on people. That's no surprise. But usually when you think 0:34:19.840 --> 0:34:24.160 of search warrants in the traditional sense, you would think, okay, 0:34:24.200 --> 0:34:27.640 police are looking at this one suspect, let's go and 0:34:27.800 --> 0:34:31.720 learn more about them, and maybe we'll serve a search 0:34:31.760 --> 0:34:35.360 warrant to a company to get information on a particular 0:34:35.400 --> 0:34:41.839 individual a suspect. In this case, police are using the 0:34:41.840 --> 0:34:48.600 most basic parameters to even jumpstart sort of leads when 0:34:48.640 --> 0:34:52.520 they don't have any leads. So they'll they'll, for instance, 0:34:53.239 --> 0:34:59.319 give for location coordinates. These are just x y coordinates 0:34:59.360 --> 0:35:02.879 on a map, and then within these four points you'll 0:35:02.960 --> 0:35:07.120 draw like a little polygon. And then they will say 0:35:08.320 --> 0:35:13.799 to a judge, like, we have reasonable expectations that there 0:35:13.840 --> 0:35:17.440 will be a criminal that we can find within this 0:35:18.760 --> 0:35:22.600 area if you sign off on this warrant for a 0:35:22.600 --> 0:35:26.319 certain period of time. So that's Geofen's warrants. And then 0:35:26.680 --> 0:35:32.080 you know, police are also increasingly using search warrants, keyword 0:35:32.160 --> 0:35:36.319 search warrants, I should say, which are you know, sort 0:35:36.320 --> 0:35:41.440 of warrants that are served to Google to try to 0:35:41.480 --> 0:35:45.759 surface people who have googled a certain term. So in 0:35:45.800 --> 0:35:48.480 one of the cases that we covered in our story, 0:35:49.600 --> 0:35:52.919 there was a terrible crime. It was an arson and 0:35:53.800 --> 0:35:59.879 a family died in this fire. And what investigators did 0:36:00.280 --> 0:36:03.480 was go to Google and say, hey, did anyone search 0:36:03.560 --> 0:36:09.239 for this address? So so that that yielded some some 0:36:09.320 --> 0:36:10.799 suspects in that case, Well. 0:36:10.719 --> 0:36:13.360 Let's let's stick with that one, because that one hasn't 0:36:13.400 --> 0:36:16.319 totally played out yet, and it gets to I think 0:36:16.360 --> 0:36:19.280 maybe the ultimate tension in the story, right. 0:36:20.640 --> 0:36:25.880 Yeah, absolutely, that that one. You know, the Colorado Supreme 0:36:25.960 --> 0:36:29.839 Court is going to rule on it. We don't know 0:36:29.920 --> 0:36:32.799 exactly when, but we're expecting it to come down at 0:36:32.800 --> 0:36:38.200 some point this year to just sort of decide whether 0:36:38.400 --> 0:36:44.239 or not Google providing that data to investigators was an 0:36:44.400 --> 0:36:48.040 overreach on the investigator's part. And and if you think 0:36:48.080 --> 0:36:54.600 about especially searching on Google, that is just so many 0:36:54.719 --> 0:36:59.080 people that that could ensnare you know, going back to 0:36:59.120 --> 0:37:03.440 the example that Julia mentioned at the at the very beginning, 0:37:04.600 --> 0:37:08.600 they police had served Google with a warrant for anyone 0:37:08.680 --> 0:37:14.319 searching on this particular car radio model, and Google did 0:37:14.360 --> 0:37:17.120 not turn over data in that case, to be clear, 0:37:17.640 --> 0:37:22.799 but you could imagine people like radio enthusiasts who might 0:37:22.840 --> 0:37:28.160 be searching for a particular radio model completely innocently who 0:37:28.200 --> 0:37:31.560 could potentially get swept up in one of these warrants. 0:37:32.440 --> 0:37:37.120 So I'm guessing privacy experts have something to say about 0:37:37.120 --> 0:37:42.239 this and activists because you know, if Carol, tim and 0:37:42.280 --> 0:37:46.280 I get swept up in the same search, I didn't 0:37:46.280 --> 0:37:50.520 do it. Okay, truly I didn't do it, but I did. 0:37:51.320 --> 0:37:54.160 I'm making fun of something that is incredibly serious. But 0:37:54.400 --> 0:37:57.080 what do the privacy advocates have to say about all 0:37:57.120 --> 0:37:57.239 of this? 0:37:58.040 --> 0:37:59.000 Julie, you want to come back? 0:37:59.120 --> 0:38:04.160 Yeah, yeah, So privacy advocates are very concerned about both 0:38:04.160 --> 0:38:06.799 of these techniques. You know, the thing is, if there's 0:38:06.840 --> 0:38:10.399 no suspect involved, then the only way that goodle can 0:38:10.480 --> 0:38:15.600 provide a list of hits is to search everyone's data. 0:38:15.760 --> 0:38:19.480 And so law enforcement will receive, you know, a short 0:38:19.480 --> 0:38:22.920 list of people who fit the criteria, and they then 0:38:23.080 --> 0:38:27.000 have to go through and identify who they think, you know, 0:38:27.120 --> 0:38:32.280 might be their suspect. But everyday, people who had nothing 0:38:32.360 --> 0:38:36.080 to do with the crime are often swept up by 0:38:36.120 --> 0:38:39.400 these by these warrants, and so I think that's really 0:38:39.560 --> 0:38:45.000 the heart of privacy advocates concerns, and legislation has been 0:38:45.080 --> 0:38:49.279 proposed in California and New York that would ban the 0:38:49.360 --> 0:38:53.879 police from seeking these warrants of Google. The legislation has 0:38:53.960 --> 0:38:58.279 stalled so far, but activists are still hoping to get 0:38:58.320 --> 0:39:01.800 something done on that front. And the Colorado case would 0:39:01.800 --> 0:39:04.440 also be the first time that a court weighs in 0:39:04.920 --> 0:39:09.120 on the on the constitutionality of that keyword search technique. 0:39:09.440 --> 0:39:11.600 Okay, so how does Google feel all about this? 0:39:13.280 --> 0:39:15.960 It puts them in a difficult spot. You know, these 0:39:16.160 --> 0:39:20.120 are court orders. They're they're not optional. Goodle has to 0:39:20.160 --> 0:39:23.400 comply and they often are important cases. 0:39:24.160 --> 0:39:28.120 However, safe driving user privacy is you. 0:39:28.080 --> 0:39:30.759 Know, a tey responsibility that they have, and so they 0:39:31.160 --> 0:39:33.520 have to walk a very fine line there. 0:39:34.760 --> 0:39:36.920 Okay, so what about insight? 0:39:37.040 --> 0:39:40.200 There's the official Google response, and then there's what you 0:39:40.239 --> 0:39:43.520 were able to report from within the company with some 0:39:43.560 --> 0:39:44.920 great reporting. 0:39:44.960 --> 0:39:47.080 What did what did some of those sources reveal? 0:39:47.920 --> 0:39:51.200 Yeah, so we we found that there there's a department 0:39:51.280 --> 0:39:55.319 within Goodle that's responsible for scrutinizing these requests. It's a 0:39:55.400 --> 0:39:59.840 midst of lawyers and l I S specialists and the 0:40:00.000 --> 0:40:02.000 as specialists, you know, the rank and file. 0:40:02.440 --> 0:40:04.800 There are often just a few years out of college. 0:40:04.960 --> 0:40:08.840 Some of them harbor dreams of becoming a lawyer, and 0:40:09.000 --> 0:40:12.040 I think they're often quite motivated by, you know, this 0:40:12.200 --> 0:40:16.840 job of really scrutinizing law enforcement requests. We heard of 0:40:16.920 --> 0:40:19.799 examples in which they were really just looking for any 0:40:19.880 --> 0:40:23.719 reason to send the request back to law enforcement. In 0:40:23.760 --> 0:40:27.520 one case, you know, an officer might send a request 0:40:27.560 --> 0:40:31.799 for email from an account ending in at gmail dot com. 0:40:31.800 --> 0:40:33.640 But if the officer has a typo, if. 0:40:33.560 --> 0:40:37.160 They say at gamble dot com, that's a note, they 0:40:37.200 --> 0:40:41.480 would send that request back. But nonetheless, if it's been 0:40:41.520 --> 0:40:43.520 signed off by a judge, you know, eventually they're going 0:40:43.600 --> 0:40:44.240 to get something. 0:40:44.640 --> 0:40:48.279 And by the way, LI s legal investigation support. I 0:40:48.320 --> 0:40:51.719 find this just fascinating because it's like Google's kind of 0:40:51.960 --> 0:40:55.000 their hands are tied here, right, Like, yeah, if law 0:40:55.040 --> 0:40:57.200 enforcement asks for something, a judge signs off on it, 0:40:57.239 --> 0:40:59.279 they're going to have to comply. But I love that 0:40:59.320 --> 0:41:02.600 there's like this element within the company that's like, you 0:41:02.760 --> 0:41:05.120 spilled Gmail wrong, You're not going to get. 0:41:05.040 --> 0:41:05.759 To what you're asking for. 0:41:05.840 --> 0:41:07.560 I once spilled Gmail wrong when I'm trying to pay 0:41:07.560 --> 0:41:10.160 a traffic ticket. So I parking ticket, so I had 0:41:10.160 --> 0:41:11.960 to pay it twice. Oh yeah, because I got a 0:41:12.000 --> 0:41:13.759 late fee for it. So never I always check how 0:41:13.800 --> 0:41:14.279 I spelled you. 0:41:14.320 --> 0:41:18.040 But the point is once they give information on case like, 0:41:18.480 --> 0:41:20.440 how can they pick and choose right? Like once the 0:41:20.520 --> 0:41:23.600 door is open like you do wonder if they're asked 0:41:23.760 --> 0:41:25.560 and requested as long as they get the Gmail right, 0:41:26.280 --> 0:41:29.800 you know, do they just have to do it? Julia? 0:41:30.800 --> 0:41:31.239 Yes, you know. 0:41:31.280 --> 0:41:35.000 I think there's an old dodge in Silitan Valley. If 0:41:35.000 --> 0:41:37.960 you build it, they will come, they say. Essentially, if 0:41:38.000 --> 0:41:42.200 you collect this data, law enforcement will come knocking and 0:41:43.120 --> 0:41:46.120 they will eventually find a way to get it. And 0:41:46.200 --> 0:41:48.280 so I think that's just the heart of this issue. 0:41:48.640 --> 0:41:52.960 Google collects this data in large part because it helps 0:41:53.000 --> 0:41:57.319 them sell advertising, and as a result they they are 0:41:57.360 --> 0:41:58.560 in this uncomfortable position. 0:41:58.880 --> 0:42:01.840 Davy all will come back in here. I always wonder 0:42:01.920 --> 0:42:04.200 when you know people work on a story like this 0:42:04.239 --> 0:42:06.720 and learn so much about how our information is collected, 0:42:07.200 --> 0:42:09.760 are you going to change the way you use these services? 0:42:09.800 --> 0:42:13.480 Perch after reading the story, I want to change the 0:42:13.520 --> 0:42:14.840 way I use these services. 0:42:16.000 --> 0:42:18.600 Well, yeah, I mean I think it's it's a good 0:42:18.640 --> 0:42:21.480 reminder to all of us to take a look at 0:42:21.480 --> 0:42:26.920 our opt out slash opt in options on our settings 0:42:26.960 --> 0:42:30.759 for various Google services. You know, Google told us that 0:42:31.520 --> 0:42:35.720 this one product that they particularly use to store location data, 0:42:35.920 --> 0:42:40.560 called location History, is off by default, but there they 0:42:40.600 --> 0:42:45.040 do send notifications to people to sort of suggest, hey, 0:42:45.080 --> 0:42:47.359 do you want to turn this feature on? It could 0:42:47.360 --> 0:42:50.439 help you in all sorts of ways. For instance, if 0:42:50.440 --> 0:42:53.000 you wanted to remember where you were last week, or 0:42:53.040 --> 0:42:57.160 see how many miles you've traveled, or just kind of 0:42:57.400 --> 0:43:01.600 have a cool record of where you've been and you 0:43:01.640 --> 0:43:05.080 know what places you visited, right, And I think that 0:43:05.080 --> 0:43:09.000 that's not always clear when you're seeing these like features 0:43:09.120 --> 0:43:12.919 pitched to you, that there could be privacy consequences there. 0:43:13.080 --> 0:43:14.400 I just want to end on in a big number. 0:43:14.680 --> 0:43:18.319 Google says it received a record sixty four hundred and 0:43:18.320 --> 0:43:21.359 seventy two search worms in the US last year. That's 0:43:21.400 --> 0:43:24.000 more than double number from twenty nineteen. 0:43:24.120 --> 0:43:27.400 So this is the vanvo the use all right, Julia Love, 0:43:27.520 --> 0:43:30.920 David Alban of course, Jill Weber, this is the cover story. 0:43:31.080 --> 0:43:33.880 Check it out. Lots of details in that story. 0:43:34.880 --> 0:43:38.480 You're listening to the Bloomberg Business Week podcast. Catch us 0:43:38.480 --> 0:43:42.520 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:43:42.719 --> 0:43:46.000 the Bloomberg Business app and YouTube. You can also listen 0:43:46.080 --> 0:43:49.200 live on Amazon Alexa from our flagship New York station. 0:43:49.640 --> 0:43:53.920 Just say Alexa play Bloomberg eleven thirty. 0:43:54.560 --> 0:43:58.000 We've got a great guest to get into what's going 0:43:58.000 --> 0:44:00.280 on when it comes to technology, but really the glolobal 0:44:00.280 --> 0:44:03.359 battle among the three dominant digital powers when it comes 0:44:03.440 --> 0:44:05.799 to regulating the space and influencing it. 0:44:06.120 --> 0:44:08.520 It's the subject of a brand new book, Digital Empires, 0:44:08.560 --> 0:44:12.360 The Global Battle to Regulate Technology, written by a new Bradford, 0:44:12.480 --> 0:44:15.760 Professor at Columbia Law School and senior scholar at Columbia 0:44:15.840 --> 0:44:18.360 Business School. The book of follow up to her book 0:44:18.400 --> 0:44:21.359 The Brussels Effect, a term that she coined. She joins 0:44:21.440 --> 0:44:24.359 us on a zoom here in New York City. It's 0:44:24.360 --> 0:44:26.400 good to have you with us, professor, How are you good? 0:44:26.480 --> 0:44:27.799 Thank you so much for having me. 0:44:28.080 --> 0:44:31.719 Well, thanks so much for joining us. So interesting. We 0:44:31.760 --> 0:44:34.799 talked about regulating technology last week. That Diana Henriquez, who 0:44:34.840 --> 0:44:38.120 wrote a book about the Well's written many books, but 0:44:38.160 --> 0:44:42.160 her most recent book is about the SEC and the 0:44:42.200 --> 0:44:45.000 development of the SEC under FDR. And we asked her 0:44:45.040 --> 0:44:47.640 what you know that what needs to be regulated in 0:44:47.680 --> 0:44:50.879 this day and age, and without hesitation, she said it 0:44:50.320 --> 0:44:53.200 was technology and I'm wondering, how are you looking at 0:44:53.200 --> 0:44:55.960 that through the lens of your book, especially outside of 0:44:55.960 --> 0:44:56.720 the United States. 0:44:56.920 --> 0:45:00.600 Yeah, so they certainly is a growing consensus the world 0:45:00.640 --> 0:45:04.440 that technology needs rules and the governments do need to 0:45:04.480 --> 0:45:08.160 step in, but there is no consensus what those rules 0:45:08.200 --> 0:45:11.040 really ought to look like. So in the book, I 0:45:11.200 --> 0:45:14.520 argue that there are three prominent ways to think about 0:45:14.800 --> 0:45:19.120 governing technology. There is the American market driven way, there 0:45:19.160 --> 0:45:22.600 is that Chinese state driven way, and then there's a third, 0:45:22.680 --> 0:45:25.480 the European rights driven regulatory model. 0:45:26.400 --> 0:45:28.960 Talk about the European one because that's kind of freshener 0:45:29.880 --> 0:45:32.040 in our thoughts because of what Apple did with its 0:45:32.560 --> 0:45:35.359 new USB C connector, because that's the result of. 0:45:35.320 --> 0:45:40.040 Regulation, absolutely, and that was one of those manifestations of 0:45:40.080 --> 0:45:43.040 the Brussels effect, whereby rules that are set in the 0:45:43.080 --> 0:45:47.400 European Union find their way into the global production and 0:45:47.520 --> 0:45:51.239 global conduct of the tech companies. But basically, unlike the 0:45:51.280 --> 0:45:56.040 Americans that really have focused on free market, free internet 0:45:56.400 --> 0:46:01.040 and sort of maximizing the opportunities for innovation, the Chinese 0:46:01.200 --> 0:46:03.520 and that really want to bring the state there to 0:46:03.719 --> 0:46:09.080 leverage technology, including to maintain political control. The European rights 0:46:09.120 --> 0:46:13.479 driven models starts from this presumption that digital revolution needs 0:46:13.480 --> 0:46:18.719 to be human centric, the preservation of the democratic structures 0:46:18.719 --> 0:46:22.520 of the society, the fundamental rights of the individuals take 0:46:22.600 --> 0:46:26.440 the center stage, but also incorporates this notion of a 0:46:26.520 --> 0:46:30.759 more fair digital economy so that we redistribute some of 0:46:30.800 --> 0:46:34.759 the gains from the tech companies to the smaller players, 0:46:35.040 --> 0:46:37.960 to users, and to the public at large. 0:46:38.160 --> 0:46:42.040 So, Professor Bradford, do you is it kind of going 0:46:42.080 --> 0:46:44.160 to follow the same path as we've seen to some 0:46:44.280 --> 0:46:49.360 extent with climate regulation and oversight, And also even I 0:46:49.360 --> 0:46:54.000 feel like global regulatory oversight when it comes to markets, 0:46:54.000 --> 0:46:56.279 it does feel like the EU leads away on a 0:46:56.280 --> 0:46:59.600 lot of stuff. So that is exactly right. 0:47:00.080 --> 0:47:04.439 Europeans have consistently just shown that they are much more 0:47:04.480 --> 0:47:08.680 comfortable with government intervening and much more skeptical with the 0:47:08.719 --> 0:47:12.120 idea that markets on their own, left to their own devices, 0:47:12.360 --> 0:47:15.759 would generate optimal outcomes. So the Europeans have been the 0:47:15.760 --> 0:47:20.200 forderunners when it comes to regulating food safety, consuming the 0:47:20.320 --> 0:47:25.080 protection the environment, the battle to mitigate climate change, and 0:47:25.160 --> 0:47:28.040 now I think one of the newest frontiers has been 0:47:28.120 --> 0:47:32.040 the regulation of technology, where again the Europeans are showing 0:47:32.040 --> 0:47:32.359 the way. 0:47:32.760 --> 0:47:35.040 Why is it so important that we'd be having this 0:47:35.120 --> 0:47:36.160 discussion right now? 0:47:36.520 --> 0:47:38.960 So I think that if you just look at the 0:47:39.160 --> 0:47:43.680 vast power of these tech companies, they have the economic power, 0:47:44.120 --> 0:47:49.880 political power, informational power, cultural power. They're really shaping the 0:47:50.000 --> 0:47:53.200 societies and the lives of individuals around the world. 0:47:53.280 --> 0:47:55.120 And I will say just for a second, when we 0:47:55.120 --> 0:47:57.600 had Diana Henrikson, when we'd ask for who are the 0:47:57.640 --> 0:48:01.839 power brokers back in the nineteen twenty it was industrialists, right, 0:48:02.239 --> 0:48:04.760 and she made the point of the power brokers today 0:48:04.760 --> 0:48:07.080 are those that are in control of data, whether it's 0:48:07.120 --> 0:48:10.759 Google or you know, Amazon, pick your company, but they 0:48:10.760 --> 0:48:13.239 are the power brokers. But anyway, go ahead and continue. 0:48:13.560 --> 0:48:15.680 That is exactly right, and that is one of the 0:48:15.680 --> 0:48:19.279 main concerns that the Europeans in particular take the view 0:48:19.640 --> 0:48:23.600 that we cannot let these companies to be the power brokers, 0:48:23.880 --> 0:48:26.640 that we need to then bind them to the rule 0:48:26.680 --> 0:48:30.600 of law and subject they conduct to democratic oversights. So 0:48:30.640 --> 0:48:33.520 we do need to bring the governments that are representing 0:48:33.520 --> 0:48:36.600 the people back to the table and then sort of 0:48:36.640 --> 0:48:39.280 directing the course of our digital economy. 0:48:39.520 --> 0:48:41.319 Based on the books that you've written, the research that 0:48:41.320 --> 0:48:45.040 you've done the work that you've done, which approach is 0:48:45.080 --> 0:48:45.520 the best? 0:48:45.800 --> 0:48:46.400 So look, I. 0:48:46.960 --> 0:48:51.920 Am a believer in the digital transformation needing a liberal, 0:48:52.080 --> 0:48:55.359 democratic foundation, So there is no way that I can 0:48:55.560 --> 0:49:00.239 endorse the Chinese digital authoritarian model. I think that is 0:49:00.280 --> 0:49:06.680 too oppressive. It infringes individual rights and liberties and subjects 0:49:06.680 --> 0:49:11.319 population to massive and as surveillance. So I have many 0:49:11.400 --> 0:49:14.560 issues with the Chinese model, even though I must recognize 0:49:14.600 --> 0:49:19.040 that China has done really well in devel developing technologies 0:49:19.320 --> 0:49:23.360 even without having freedom as the foundation of the society. 0:49:23.719 --> 0:49:27.080 But if the Chinese model is too oppressive, I think 0:49:27.120 --> 0:49:30.919 the American model can be viewed as too permissive, and 0:49:30.960 --> 0:49:34.840 it has really failed to step in to protect the 0:49:34.880 --> 0:49:38.960 fundamental rights to protect our data and just placed too 0:49:39.040 --> 0:49:41.920 much of the trust in tech companies that have then 0:49:42.040 --> 0:49:45.640 failed to carry out their task as guardians of our 0:49:45.760 --> 0:49:50.040 data and protectors of the digital space. So that really 0:49:50.120 --> 0:49:53.160 leaves the European model as the one that I think 0:49:53.200 --> 0:49:58.480 best advances public interests and checks the corporate power and 0:49:58.640 --> 0:50:02.480 ultimately then leads to aa more sort of fear thriving 0:50:02.760 --> 0:50:03.680 discal society. 0:50:03.960 --> 0:50:07.040 So does the EU and the US align on this 0:50:07.160 --> 0:50:09.360 because it sounds like that's what needs to happen. 0:50:09.840 --> 0:50:14.279 I think that is exactly right, that ultimately you would 0:50:14.360 --> 0:50:17.719 need both the US and the EO to join forces 0:50:17.760 --> 0:50:21.080 and align behind a sort of same set of principles 0:50:21.080 --> 0:50:24.080 for that governance model to be effected. And I would 0:50:24.120 --> 0:50:27.320 say that there is a shift underway in the US. 0:50:27.400 --> 0:50:32.080 So the US itself is now starting to rethink it's 0:50:32.239 --> 0:50:37.000 technol libertarian commitments and starting to ask whether the markets 0:50:37.080 --> 0:50:42.440 really are capable of governing the digital economy. And you 0:50:42.480 --> 0:50:45.719 see the public opinion both shifting. You see that many 0:50:45.840 --> 0:50:50.040 bills being proposed in Congress, and that indicates that there 0:50:50.120 --> 0:50:54.200 certainly is a different conversation about technology that is much 0:50:54.280 --> 0:50:57.799 more closer to the European rights driven model than what 0:50:57.840 --> 0:50:58.880 we've seen in the past. 0:50:59.360 --> 0:51:03.000 You write right that this battle over digital quote will 0:51:03.040 --> 0:51:06.239 ultimately determine the soul of the digital economy, defining what 0:51:06.320 --> 0:51:08.360 kind of society we will live in for years and 0:51:08.440 --> 0:51:13.200 decades to come, in a battle that the US nor 0:51:13.239 --> 0:51:18.000 the EU can afford to lose. If we don't get 0:51:18.000 --> 0:51:18.680 this right. 0:51:18.640 --> 0:51:22.520 Then what so what ultimately to me is at stake here? 0:51:22.560 --> 0:51:26.880 The biggest battle is really about liberal democracy, and I 0:51:26.920 --> 0:51:30.840 think the US and the EU should remember that liberal 0:51:30.880 --> 0:51:34.440 democracy can be lost in one of two ways. So 0:51:34.560 --> 0:51:37.440 one is if the US and EU will lose the 0:51:37.480 --> 0:51:42.640 horizontal battle to China and the world is turning more authoritarian. 0:51:43.160 --> 0:51:46.120 But also if the US and the EU you lose 0:51:46.200 --> 0:51:49.960 the vertical battle to the tech companies and fail to 0:51:50.000 --> 0:51:54.360 effectively control them, because if that happens, then the true 0:51:54.480 --> 0:51:58.879 digital empires are either the authoritarians or then the tech 0:51:58.920 --> 0:52:03.960 companies either. So Luisa's sustainable for anybody who believes in 0:52:04.160 --> 0:52:05.239 liberal democracy. 0:52:05.440 --> 0:52:07.360 You know, it's interesting, Carol, I say this over and 0:52:07.400 --> 0:52:09.359 over again, but if there's you know, there's not much 0:52:09.360 --> 0:52:12.920 that unites Democrats and Republicans here in the US and Congress. 0:52:13.200 --> 0:52:14.120 This does bring them together. 0:52:14.200 --> 0:52:16.719 It does at least the idea of regulating big tech 0:52:16.800 --> 0:52:19.080 right quote unquote regulating big tech the way they want 0:52:19.120 --> 0:52:21.000 to do it is certainly different, and the reasons why 0:52:21.040 --> 0:52:22.759 are different, but you know, they want to do it. 0:52:22.760 --> 0:52:24.360 It's a really good point. And I also feel like 0:52:24.360 --> 0:52:26.359 there's a fair amount of streaming services out there, are 0:52:26.400 --> 0:52:29.239 streaming series out there that reminds you when data takes over, 0:52:29.480 --> 0:52:32.960 like kind of what happens to our world Professor Bradford, 0:52:32.960 --> 0:52:34.680 thank you so much, really appreciate the time with you. 0:52:34.680 --> 0:52:38.120 A new Bradford, Professor at Columbia Law School, Senior Scholar 0:52:38.239 --> 0:52:41.279 at Columbia Business School on zoo from New York City. 0:52:41.320 --> 0:52:43.400 Her new book, Digital Empire is the global battle to 0:52:43.480 --> 0:52:46.120 regulate technology. 0:52:48.880 --> 0:52:52.440 You're listening to the Bloomberg Business Week podcast. Catch us 0:52:52.480 --> 0:52:55.839 live weekday afternoons from three to six Eastern Listen on 0:52:55.880 --> 0:52:59.920 Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, 0:53:00.200 --> 0:53:02.520 or watched us live on YouTube. 0:53:03.120 --> 0:53:05.080 Plenty ahead in our second hour of the weekend edition 0:53:05.120 --> 0:53:08.920 of Bloomberg Business Week, including lots of laughs with Caroline Hirsch, she, 0:53:09.040 --> 0:53:11.719 of course the founder of Caroline's on Broadway on her 0:53:11.800 --> 0:53:15.240 next act, also a business travel primmer from our Bloomberg 0:53:15.280 --> 0:53:18.200 Pursuits team, and the bank failure that rocked a tiny 0:53:18.280 --> 0:53:22.080 Kansas town which may have involved pig butchering the crypto version. 0:53:22.360 --> 0:53:25.560 First up this hour, though art imitating life once again 0:53:25.920 --> 0:53:28.399 Dumb Money in Theaters earlier this month. It's the real 0:53:28.440 --> 0:53:31.040 life story brought to the big screen of the working 0:53:31.040 --> 0:53:34.719 class redditors who became investors during the pandemic, making and 0:53:34.760 --> 0:53:37.680 losing lots of money and turning Wall Street upside down 0:53:37.840 --> 0:53:38.560 in the process. 0:53:38.600 --> 0:53:40.440 I recently caught up with Aaron Ryder, one of the 0:53:40.440 --> 0:53:42.799 film's co producers, to get the backstory of how this 0:53:42.840 --> 0:53:45.600 project came together in the midst of the COVID pandemic 0:53:45.840 --> 0:53:47.000 and memestock mania. 0:53:47.600 --> 0:53:50.319 Yowd up, everybody growing kitty here, I'm going to pick 0:53:50.320 --> 0:53:52.520 a stock and talk about why I think it's interesting, 0:53:52.640 --> 0:53:55.320 and that stock is game stock. 0:53:58.080 --> 0:53:59.960 Retailed traders have hooked into games stock. 0:54:00.280 --> 0:54:02.719 I think they think it's a good investment. It looks 0:54:02.760 --> 0:54:04.560 like there's one guy driving all the buying. 0:54:05.160 --> 0:54:06.000 Who is the shot? 0:54:07.920 --> 0:54:08.279 All right? 0:54:08.320 --> 0:54:12.400 Well, art imitating life once again this week, opening nationally today, 0:54:12.480 --> 0:54:14.399 Dumb Money, the real life story brought to the big 0:54:14.440 --> 0:54:17.839 screen of the working class redditors who became investors during 0:54:17.880 --> 0:54:21.399 the pandemic making and I'm guess I'm losing some money 0:54:21.400 --> 0:54:24.320 along the way as well, and perhaps even more interestingly 0:54:24.360 --> 0:54:27.040 and shockingly, turning Wall Street upside down. Jess. We were 0:54:27.239 --> 0:54:29.680 living this day to day as it played out during 0:54:29.719 --> 0:54:30.760 the pandemic. 0:54:30.400 --> 0:54:33.839 Especially when you think of GME for GameStop, amc all 0:54:33.840 --> 0:54:36.160 these names that come to mind that we're just taking 0:54:36.200 --> 0:54:37.720 off in the beginning. 0:54:37.320 --> 0:54:39.440 Of twenty twenty one, right out of nowhere, and like 0:54:39.480 --> 0:54:42.200 it was like, wait's what we're going here? Fundamentals? Who 0:54:42.239 --> 0:54:45.120 cares out the window? All right, So let's get to it. 0:54:45.640 --> 0:54:48.359 Because Aaron Ryder is producer of Dumb Money, as we said, 0:54:48.360 --> 0:54:52.520 this movie opening nationally today. He joins us on Zoom 0:54:52.520 --> 0:54:54.600 in Los Angeles, aeron No Stranger to the Big Screen. 0:54:54.640 --> 0:54:59.240 Among other things. He of course did producer Christopher Nolan's Memento, 0:54:59.400 --> 0:55:02.759 So really good to have him here. Welcome, welcome erin 0:55:04.080 --> 0:55:07.600 big day, big movie. We all lived it, so we've 0:55:07.640 --> 0:55:09.480 all been talking about a big time in the newsroom. 0:55:09.520 --> 0:55:12.080 Looking at your trailer, there's a word in it that 0:55:12.080 --> 0:55:13.759 we sometimes say in the newsroom, but it was said 0:55:13.760 --> 0:55:16.400 a lot in the trailer because it was a crazy time. 0:55:16.440 --> 0:55:20.160 What was the spark catalyst, media headline conversation that got 0:55:20.160 --> 0:55:22.640 your attention, made you want to do a movie about this? 0:55:24.239 --> 0:55:26.080 Well, first off, thanks for having me CoA to talk 0:55:26.080 --> 0:55:30.880 to you guys. So I was in Montreal up in 0:55:31.000 --> 0:55:34.719 quarantine when this was all going down in January twenty 0:55:34.760 --> 0:55:38.160 twenty one. Back then it was before the vaccines, as 0:55:38.160 --> 0:55:40.560 you probably remember, and when you went from the United 0:55:40.560 --> 0:55:42.600 States and Canada, you had to do a fourteen day 0:55:42.640 --> 0:55:46.520 state mandated quarantine. So I was pretty much glued to 0:55:46.560 --> 0:55:49.400 the internet just hearing all these headlines and seeing everything 0:55:49.400 --> 0:55:52.560 that was going down, and I could not escape all 0:55:52.600 --> 0:55:55.120 of this news about the store that I kind of 0:55:55.200 --> 0:55:57.880 knew about when you go to the mall and why 0:55:58.000 --> 0:56:01.040 it's stock was going through the roof. It was you know, 0:56:01.080 --> 0:56:03.200 you guys were covering it. It was everywhere, and so 0:56:03.320 --> 0:56:04.879 it was hard to ignore it. 0:56:05.960 --> 0:56:08.560 So how do you take something that right? It was 0:56:08.600 --> 0:56:10.000 in our face and all of us were trying to 0:56:10.000 --> 0:56:11.439 make sense of it. So how do you say, Wow, 0:56:11.480 --> 0:56:13.880 that's really interesting and it's a conversation with your buddies, 0:56:13.960 --> 0:56:16.279 versus I want to do something more with it, so 0:56:16.360 --> 0:56:17.000 take us there. 0:56:18.040 --> 0:56:21.040 Well, I had got this great phone call from a 0:56:21.080 --> 0:56:24.160 guy named Kevin Lark, who happened to own the studio 0:56:24.320 --> 0:56:26.000 that I have a deal with or how to deal 0:56:26.040 --> 0:56:29.120 with at the time, and he basically was like, look, 0:56:29.120 --> 0:56:31.879 I think there's a movie here. And the amazing thing 0:56:31.920 --> 0:56:34.480 about this, you know, not just because it was in 0:56:34.520 --> 0:56:36.719 the headlines. Not every headline will make a great movie, 0:56:36.760 --> 0:56:40.640 but there was this great David versus Goliath theme woven 0:56:40.760 --> 0:56:41.439 throughout this. 0:56:41.719 --> 0:56:44.600 And you know, it wasn't just me or Kevin or 0:56:44.600 --> 0:56:46.319 anyone else that thought there could be a movie here. 0:56:46.680 --> 0:56:49.600 Half of Hollywood was chasing the story, thinking that it 0:56:49.640 --> 0:56:52.520 could be a great idea for film, and so it 0:56:52.520 --> 0:56:55.040 became a real race to try to get the rights 0:56:55.080 --> 0:56:58.080 to a book or a podcast to serve as the 0:56:58.120 --> 0:56:59.360 basis for that story. 0:57:00.200 --> 0:57:04.920 You also, from what I understand, track down Ben Mezrich's 0:57:05.000 --> 0:57:08.200 book Dumb Money Adventures of a Day Trader, which is 0:57:08.200 --> 0:57:10.439 what the film is based on. So I'm just get 0:57:10.520 --> 0:57:12.640 us there, like, how did that did you reach out to? 0:57:12.840 --> 0:57:13.120 Or no? 0:57:13.280 --> 0:57:13.480 Ben? 0:57:14.520 --> 0:57:16.080 It was kind of an amazing moment. 0:57:16.160 --> 0:57:18.440 You know, I'd heard this rumor that Ben, who had 0:57:18.440 --> 0:57:20.880 written you know, he's covered so many of these things 0:57:20.880 --> 0:57:23.240 in his career, has written books on so many great 0:57:23.240 --> 0:57:26.200 topics that've been turned into great movies, including the Social Network, 0:57:26.680 --> 0:57:28.840 And so I heard that Ben had a book proposal 0:57:29.480 --> 0:57:32.120 and everyone was after it. So I kind of found 0:57:32.120 --> 0:57:35.040 my way into the heart of his agent and convinced 0:57:35.080 --> 0:57:37.440 him get me a copy of the seven page book 0:57:37.480 --> 0:57:40.440 proposal that he was currently writing on the on the 0:57:40.480 --> 0:57:42.080 phenomenon that we were all watching. 0:57:42.240 --> 0:57:45.160 So I heard about it, and you know, and did 0:57:45.200 --> 0:57:46.400 what us producers do. 0:57:46.480 --> 0:57:50.760 We chased material and good ideas and got this book proposal, 0:57:50.880 --> 0:57:52.800 and you know, it was all kind of there. You 0:57:52.800 --> 0:57:56.240 could feel how you could easily turn the story into 0:57:56.280 --> 0:57:59.080 a narrative for a film that would capture an audience. 0:57:59.120 --> 0:58:02.960 So that getting that thing and working with Ben, who 0:58:02.960 --> 0:58:06.000 could not have been a better you know, architect of 0:58:06.040 --> 0:58:06.760 a story like this. 0:58:07.000 --> 0:58:08.760 You know, thank you Wall Street. Right, it just kind 0:58:08.760 --> 0:58:10.640 of continues to give and give, whether it's the Great 0:58:10.680 --> 0:58:13.680 financial crisis, whether it's tech bubbles, whether it's the creation 0:58:13.760 --> 0:58:17.680 of some incredible companies, Like there's just unbelievable stories. Having 0:58:17.760 --> 0:58:20.240 said that, like when you look at something like what 0:58:20.400 --> 0:58:22.680 happened during this meme stock Eras, there's a lot of 0:58:22.720 --> 0:58:25.400 stories in it. There's you know, just the trading element. 0:58:25.520 --> 0:58:28.360 There's the individuals who were involved who were not the 0:58:28.560 --> 0:58:33.640 normal people Aaron that we here at Bloomberg typically write about. 0:58:34.920 --> 0:58:36.640 No, it was your one hundred percent right. 0:58:36.720 --> 0:58:38.800 It was like in this moment, as we were all 0:58:38.840 --> 0:58:41.160 trapped in our homes, maybe with a little bit more 0:58:41.160 --> 0:58:43.480 money from the stimulus check that you got, and we 0:58:43.480 --> 0:58:45.160 were glued to you know, we did not have the 0:58:45.200 --> 0:58:48.360 connectivity to our friends or our family. We began to 0:58:48.400 --> 0:58:51.760 form communities online and I feel like this moment was 0:58:51.800 --> 0:58:55.520 like the moment that Wall Street was gamified and in 0:58:55.600 --> 0:58:59.680 some ways democratize, where people that normally hadn't been in 0:58:59.720 --> 0:59:02.320 bested on Wall Street and paying attention to these sort 0:59:02.320 --> 0:59:05.960 of things. They gathered around this movement and an army gathered, 0:59:06.160 --> 0:59:08.520 and I feel like this was the first time that 0:59:08.640 --> 0:59:11.640 you saw that, and Wall Street felt the impact of 0:59:11.840 --> 0:59:13.320 that army that gathered. 0:59:14.120 --> 0:59:15.960 How did you think about, like what the stories you 0:59:16.000 --> 0:59:19.160 wanted to tell specifically, right, because it's really fun to 0:59:19.200 --> 0:59:21.840 look at the trailer and I was thinking about you know, 0:59:22.040 --> 0:59:27.080 Ken Griffin and you know others that are certainly individuals 0:59:27.120 --> 0:59:30.640 that we talk about all the time here, Steve Cohen, 0:59:30.720 --> 0:59:35.000 Gabe Plotkin. So there's you know, the establishment side of it. 0:59:35.120 --> 0:59:38.800 Then there's the redditors in terms of you know, these people, 0:59:38.880 --> 0:59:42.600 their worlds were changing dramatically. So just as you approach 0:59:42.680 --> 0:59:45.160 this project, what were the stories you wanted to make 0:59:45.160 --> 0:59:46.200 sure you got out there? 0:59:47.160 --> 0:59:48.600 Well, it's a great question. 0:59:48.720 --> 0:59:52.080 You know, we really wanted to make this movie about 0:59:52.160 --> 0:59:54.600 it for those people that were on the reddit boards, 0:59:54.640 --> 0:59:56.880 the people that were involved in this and got involved, 0:59:57.280 --> 0:59:59.880 and you know, it starts with Keith Gill Roaring Kitty. 1:00:00.120 --> 1:00:03.640 He was in large part the face of this movement 1:00:03.800 --> 1:00:06.680 and the person that we all kind of identified with 1:00:06.760 --> 1:00:09.440 the game stuff phenomena, So you knew he had to 1:00:09.440 --> 1:00:12.360 be a you know, the focal point of a lot 1:00:12.400 --> 1:00:16.160 of the story, and any very much he is. I 1:00:16.160 --> 1:00:18.920 mean that's where it all kind of started. So and 1:00:18.960 --> 1:00:20.960 then it was really Ben's book and the research that 1:00:21.040 --> 1:00:24.960 he did, and Lauren and Rebecca are two screenwriters who 1:00:25.000 --> 1:00:27.320 were able to kind of do a bunch of research 1:00:27.400 --> 1:00:30.440 and find these real people who went through this experience, 1:00:30.600 --> 1:00:33.440 and there's so many. The hard part was kind of 1:00:33.440 --> 1:00:36.760 discerning the people that were involved with us and finding 1:00:36.840 --> 1:00:39.360 there's really great stories that had a satisfying ending to 1:00:39.440 --> 1:00:41.240 him or had a little bit of tragedy to him, 1:00:41.400 --> 1:00:43.560 with the things that would make a good movie. You know, 1:00:43.600 --> 1:00:46.120 we weren't making a documentary here. What we're trying to 1:00:46.160 --> 1:00:49.400 do is make something that shows this moment in time 1:00:49.400 --> 1:00:51.320 that we all lived through. But it was actually really 1:00:51.680 --> 1:00:54.280 a fun moment because we'd never seen anything like this before. 1:00:54.400 --> 1:00:55.960 I'm curious who you talked to. I remember talking to 1:00:56.000 --> 1:00:58.520 Oliver Stone about Wall Street and then the sequel of 1:00:58.640 --> 1:01:00.320 like who did you talk to? To get the feel? 1:01:00.400 --> 1:01:02.160 Even the same thing with Billions, like we've done a 1:01:02.200 --> 1:01:04.560 panel here at Bloomberg and the guys like who did 1:01:04.560 --> 1:01:07.080 you because they really did talk to, you know, folks 1:01:07.080 --> 1:01:08.880 on Wall Street really to kind of get the feel 1:01:08.920 --> 1:01:11.040 and make sure they were accurate. Who did you talk to? 1:01:11.360 --> 1:01:12.000 In making this? 1:01:12.240 --> 1:01:14.760 Well, you know, look, there's so much stuff that's out 1:01:14.800 --> 1:01:17.560 there true right now. Yeah, there's so much stuff that 1:01:17.640 --> 1:01:19.200 you can learn, and there's so many things in the 1:01:19.240 --> 1:01:21.880 headlines because everybody was talking about this, and when you 1:01:21.920 --> 1:01:25.000 go see the movie, it's a very easy film to understand. 1:01:25.000 --> 1:01:27.600 You do not have to be an investor in Wall 1:01:27.600 --> 1:01:29.840 Street to understand this movie, nor do you have to 1:01:29.840 --> 1:01:32.280 be some sort of economics major to understand what was 1:01:32.320 --> 1:01:34.840 going on here. It's a movie for the everyman, and 1:01:34.840 --> 1:01:37.680 that's really important in their construction of it. We didn't 1:01:37.720 --> 1:01:41.000 want to be, you know, weighing this down with jargon 1:01:41.040 --> 1:01:44.520 about you know, the economy or jargon about like investing 1:01:44.520 --> 1:01:46.000 in that sort of thing. We're trying to make it 1:01:46.160 --> 1:01:49.280 for and every man. So we took that approach, and 1:01:49.320 --> 1:01:52.280 so in our research. It was really focusing on the 1:01:52.320 --> 1:01:55.360 everyday people and how they look at the at investing 1:01:55.360 --> 1:01:56.960 and how they look at the stock market and how 1:01:56.960 --> 1:01:59.240 they maybe even see that the system may very well 1:01:59.240 --> 1:01:59.640 be ripped. 1:02:00.200 --> 1:02:02.640 And I was wondering, when you were, you know, certainly 1:02:02.640 --> 1:02:04.560 reading the headlines like the rest of us, did you 1:02:04.840 --> 1:02:07.320 did you trade in any of these? Did you actually 1:02:07.360 --> 1:02:11.440 participate in any of this in terms of the market trade. 1:02:11.560 --> 1:02:13.120 It's really funny actually. 1:02:12.840 --> 1:02:15.040 Because I had You're going to say, yeah, aren't you? 1:02:15.160 --> 1:02:17.919 Yeah, Yeah, I totally am. You know, I actually got 1:02:17.960 --> 1:02:20.800 my Robinhood account. I wanted to understand how it worked 1:02:20.840 --> 1:02:24.560 and how it operated, so I got involved with robin 1:02:24.560 --> 1:02:26.760 Hood and I wanted to see how people were doing it. 1:02:26.840 --> 1:02:28.520 So I very much participated. 1:02:28.560 --> 1:02:30.520 I got involved with that and I started buy a 1:02:30.560 --> 1:02:32.479 couple of shares here and there, just kind of see 1:02:32.720 --> 1:02:35.160 how the everyman was going about and I needed to 1:02:35.240 --> 1:02:39.000 understand how the apparatus worked as well. So yeah, I 1:02:39.040 --> 1:02:41.919 got I got deep in it. And I think there's 1:02:41.920 --> 1:02:44.560 no other way to read the understand it unless you're doing. 1:02:44.600 --> 1:02:47.440 Yeah, I totally agreed. Did you make money in the process. 1:02:48.680 --> 1:02:50.600 I can't. I don't even can tell you how much 1:02:50.640 --> 1:02:51.280 money I lost? 1:02:52.800 --> 1:02:55.720 Well, and that's part of it. What's really kind of wild, though, 1:02:55.760 --> 1:02:59.240 these individuals who started to be honest with you, Like 1:02:59.280 --> 1:03:00.920 I just remember on a day when we'd have to 1:03:00.920 --> 1:03:02.520 like highlight a stock and it obviously we're going to 1:03:02.600 --> 1:03:04.800 highlight these because they were moving in such a dramatic 1:03:04.840 --> 1:03:08.560 way in a market where you know, these were names 1:03:08.560 --> 1:03:10.880 and individuals who were shaping the overall trade. It was 1:03:10.880 --> 1:03:14.000 pretty phenomenal. Aaron, don't go anywhere, because I'm curious about 1:03:14.960 --> 1:03:18.160 the actors that were lined up and just as the 1:03:18.520 --> 1:03:21.720 movie progressed, just what you were kind of feeling and 1:03:21.800 --> 1:03:24.200 the feedback you were getting. And I'm also curious about 1:03:24.560 --> 1:03:27.960 the real life Steve Cohen's or Gaye Plotkins or Ken Griffin, 1:03:28.000 --> 1:03:29.640 if you've heard from any of them. So hang on, 1:03:29.720 --> 1:03:31.080 we're going to come back to you in just a moment. 1:03:31.080 --> 1:03:34.120 We're going to continue with Aaron Ryder, producer of Dumb Money, 1:03:34.200 --> 1:03:36.240 on Zoom from Los Angeles. I have to say, Jess, 1:03:36.280 --> 1:03:39.520 I haven't seen the movie yet either have I, But 1:03:39.520 --> 1:03:41.960 but I was thinking about, like you were here right 1:03:42.080 --> 1:03:45.400 with all of our Wall Street team and reporting on things, 1:03:45.400 --> 1:03:46.680 and it was just kind of crazy. 1:03:46.840 --> 1:03:49.840 It really was wild, and you couldn't stop following it, 1:03:49.880 --> 1:03:51.920 and obviously as a reporter I had to, but I 1:03:51.920 --> 1:03:53.720 mean I couldn't take my eyes off of it, even 1:03:53.760 --> 1:03:55.120 when I was not reporting on it. 1:03:55.200 --> 1:03:57.520 And then there was a reckoning because the regulators got involved. 1:03:57.520 --> 1:03:59.720 So we hadn't come back to Aaron Ryder in just 1:03:59.720 --> 1:04:02.000 a moment with the producer of dub Money. Delight to 1:04:02.000 --> 1:04:04.360 still have with us. Aaron Ryder, producer of Dub Money, 1:04:04.640 --> 1:04:07.640 on Zoom and Los Angeles, the movie opening up nationally 1:04:07.800 --> 1:04:11.160 on this Friday, Aaron, How easy was it to make 1:04:11.240 --> 1:04:14.840 this movie in terms of financially getting the funding? 1:04:16.680 --> 1:04:19.080 Well, you know, no movie is ever easy to make. 1:04:19.120 --> 1:04:21.439 It's a bit of a miracle when we actually pull 1:04:21.520 --> 1:04:24.480 it off. This one, it was a little bit complicated. 1:04:24.520 --> 1:04:27.840 We started out with it. I had to deal with 1:04:27.840 --> 1:04:31.000 the studio MGM, and we started to make the movie 1:04:31.040 --> 1:04:34.600 with them. But somewhere along the way about in pre production, 1:04:34.840 --> 1:04:37.760 MGM had sold themselves to Amazon, and that's when things 1:04:37.760 --> 1:04:41.400 got a bit more complicated. Let's say, just because you know, 1:04:41.440 --> 1:04:44.680 you have this brand new giant entity that takes over 1:04:44.720 --> 1:04:47.000 a movie studio and everything kind of slowed down. So 1:04:48.320 --> 1:04:52.560 we were not able to move forward under that that 1:04:52.760 --> 1:04:55.560 sort of deal that we had made, so we went 1:04:55.560 --> 1:04:59.080 out and found ourselves independent financiers, and we found an 1:04:59.200 --> 1:05:03.360 excellent partner with a company called black Bear and Teddy Schwartzman. 1:05:03.520 --> 1:05:05.880 It came on as our partner and we made the 1:05:05.880 --> 1:05:06.480 film together. 1:05:06.720 --> 1:05:10.160 So it started out as a studio movie, ended up independent, 1:05:10.160 --> 1:05:13.080 and then we found a home with a studio with Sony, 1:05:13.240 --> 1:05:14.960 So that's that's how it came together. 1:05:15.080 --> 1:05:17.080 I have to jump in because if Schwartzman sounds familiar 1:05:17.080 --> 1:05:19.960 to our audience, which it certainly does, Steve Schwartzman, of course, 1:05:20.040 --> 1:05:23.840 is his father, Steve Schwartzman. I've talked to him. He's 1:05:23.880 --> 1:05:26.200 the co founder or founder i should say, a Blackstone, 1:05:26.520 --> 1:05:30.280 the private equity giant. So it's kind of interesting to 1:05:30.320 --> 1:05:33.360 have that funding behind this film and a film that 1:05:33.440 --> 1:05:37.120 also kind of makes a little fun of right the 1:05:37.160 --> 1:05:39.919 hedge fund dudes, I mean they really, you know, kind 1:05:39.920 --> 1:05:44.600 of really were caught off guard during this whole you 1:05:44.600 --> 1:05:47.800 know process, if you will, of the meme stock craze. 1:05:47.800 --> 1:05:49.200 A lot of them were you know, shorting some of 1:05:49.240 --> 1:05:52.680 these names, and it really was uncomfortable for them. I'm 1:05:52.720 --> 1:05:57.200 curious about how you thought about their portrayal in the movie. 1:05:58.360 --> 1:06:00.840 Well, you know, look, these are real people. 1:06:00.880 --> 1:06:03.760 Obviously, we did a really good job at trying to 1:06:03.760 --> 1:06:07.480 tell the truth here, and our job is first and 1:06:07.520 --> 1:06:11.360 foremost to make a really compelling and entertaining movie, and 1:06:11.880 --> 1:06:14.200 just so happens that the subject matter made it very 1:06:14.240 --> 1:06:16.480 easy for us to be able to do that. So 1:06:16.800 --> 1:06:20.280 you know, we weren't out to try to overly vilify anybody. 1:06:20.640 --> 1:06:22.360 It was just to tell an honest story of what 1:06:22.480 --> 1:06:24.520 happened in this one particular. 1:06:24.080 --> 1:06:24.840 Moment in time. 1:06:25.600 --> 1:06:28.360 Well, exactly. Talk to us too about the actors. The 1:06:28.400 --> 1:06:32.680 lineup is pretty amazing, Paul, Pete, David, Yeah, talk to 1:06:32.760 --> 1:06:33.600 us about this cast. 1:06:34.560 --> 1:06:35.200 Sure, sure. 1:06:35.240 --> 1:06:38.480 I mean, look, it all started with Paul Dano, because 1:06:39.120 --> 1:06:41.640 you know, the face of this movement, as we said before, 1:06:41.880 --> 1:06:44.560 is Keith Gill and who's going to play that. He's 1:06:44.760 --> 1:06:48.800 iconic now, and so Paul is somebody that both Craig 1:06:48.840 --> 1:06:51.240 and I really had been trying to find something to 1:06:51.320 --> 1:06:53.720 do with. He's just an exceptional actor and he just 1:06:53.760 --> 1:06:55.960 embodies you feel to such a degree. He's got this 1:06:56.080 --> 1:06:58.600 great sense of humor and energy to him, and I 1:06:58.600 --> 1:07:00.520 think you'll see Paul in the way you've never seen 1:07:00.600 --> 1:07:02.320 him before, And as far as the rest of the 1:07:02.360 --> 1:07:05.400 cast goes, it's an embarrassment. 1:07:04.880 --> 1:07:06.680 Of riches, to be honest with you. We have such 1:07:06.680 --> 1:07:07.920 a great lineup. 1:07:07.840 --> 1:07:11.600 Mostly people that have been friends that myself or Craig 1:07:11.880 --> 1:07:14.680 have worked with in the past, you know, between Seth 1:07:14.760 --> 1:07:19.800 Rogan and Nick Offerman, Pete Davidson, Shalan Woodley, It's it's 1:07:20.040 --> 1:07:24.720 kind of a remarkable ensemble and one I'm really proud 1:07:24.760 --> 1:07:27.120 of in a testament to the fact I think everybody 1:07:27.240 --> 1:07:30.160 knew this story in one way or another wanted to 1:07:30.160 --> 1:07:30.760 get involved. 1:07:31.280 --> 1:07:34.040 I love that. Is it a little frustrating with the 1:07:34.080 --> 1:07:38.480 Hollywood Actors Strike that these this incredible lineup of actors 1:07:38.760 --> 1:07:40.360 can't be out there talking about the movie. 1:07:41.720 --> 1:07:43.360 A little frustrating, might be. 1:07:43.320 --> 1:07:49.400 An understatele Sorry, yeah, it's it is. It's it's unfortunate, 1:07:49.520 --> 1:07:52.320 But we feel like this moment is the moment for 1:07:52.400 --> 1:07:55.320 this movie. Given what's going on in the country, the 1:07:55.360 --> 1:07:58.480 division we have, the fact that we all live through this, 1:07:58.840 --> 1:08:00.720 it just feels like this is the right kind of 1:08:00.920 --> 1:08:03.880 movement and right kind of moment for a film like this, 1:08:04.200 --> 1:08:06.640 you know, And I think it's reflected in the strikes 1:08:06.640 --> 1:08:08.480 that you're seeing all throughout the country, not just in 1:08:09.040 --> 1:08:11.600 in my uh in my line of work with the 1:08:11.640 --> 1:08:13.000 actors and the writers going a. 1:08:13.000 --> 1:08:15.120 Strict but the you know, the auto workers and everyone else. 1:08:15.120 --> 1:08:18.400 There's a lot of disparity out there, and I feel 1:08:18.400 --> 1:08:22.639 like this movie does a good job of highlighting that. 1:08:23.000 --> 1:08:25.640 So we've felt like now's the time to show this 1:08:25.720 --> 1:08:26.320 to the world. 1:08:26.640 --> 1:08:29.200 And yes, it's disappointing not to have actors there because 1:08:29.320 --> 1:08:31.400 we went through the journey with them and it's always 1:08:31.400 --> 1:08:33.080 a lot of fun to go out and promote a movie. 1:08:33.400 --> 1:08:35.840 But it's still it seems to be generating a lot 1:08:35.840 --> 1:08:37.880 of interest. I like to think that, you know, what 1:08:37.880 --> 1:08:38.840 do we need the actors for? 1:08:39.000 --> 1:08:43.960 Right, Wow, out your phone's ringing, Aaron No, it's interesting. Well, 1:08:44.000 --> 1:08:46.000 the Times I thought said it really well too. They said, 1:08:46.040 --> 1:08:48.920 you know, you're a movie about a populist uprising, right, 1:08:49.040 --> 1:08:52.719 these you know, kind of small retail investors, These guys 1:08:52.760 --> 1:08:54.919 just kind of doing their thing on Reddit and elsewhere 1:08:55.080 --> 1:08:59.360 and really kind of bringing down the establishment in terms 1:08:59.439 --> 1:09:01.760 of the trading environment. And you think about these hedge 1:09:01.760 --> 1:09:04.920 fund titans like it's pretty remarkable. But you as you say, 1:09:05.040 --> 1:09:08.880 like we also are seeing workers really step out and 1:09:08.920 --> 1:09:11.880 speak up for their own rights. In terms of Hollywood, 1:09:12.160 --> 1:09:14.160 what is it that, you know, I think about our audience, 1:09:14.240 --> 1:09:17.880 a smart audience, so needs to understand about what's really 1:09:17.920 --> 1:09:20.000 happening there at those picket lines. In a world where 1:09:20.080 --> 1:09:22.320 we're talking a lot about, you know, the next level 1:09:22.320 --> 1:09:25.360 of artificial intelligence and what kind of jobs that takes 1:09:25.400 --> 1:09:27.920 out and what it means for the creative world. 1:09:29.240 --> 1:09:30.600 I think it's you know, we look, we. 1:09:32.080 --> 1:09:34.840 Reached the moment, an inflection point, if you will, and 1:09:35.360 --> 1:09:36.519 most industries go through it. 1:09:36.600 --> 1:09:39.080 The entertainment industry certainly has its moments as well. 1:09:39.080 --> 1:09:41.080 It happened back in the early sixties when the reactors 1:09:41.080 --> 1:09:43.639 went on strikes about residuals and that sort of thing, 1:09:44.160 --> 1:09:47.320 as television became more and more prominent, And we're in 1:09:47.400 --> 1:09:50.599 that moment right now, and it's in a large part 1:09:50.640 --> 1:09:52.599 it was probably going to happen a couple of years ago, 1:09:52.600 --> 1:09:56.000 but the pandemic disruptive things, and so this was a 1:09:56.080 --> 1:09:58.680 moment that was bound to happen with this, you know, 1:09:58.720 --> 1:10:01.679 the proliferation of stream and that sort of thing changing 1:10:01.680 --> 1:10:04.639 our business dramatically, which it has, and so with that 1:10:04.680 --> 1:10:07.960 sort of change comes to recalibration of how people are 1:10:08.080 --> 1:10:12.519 paytent and what fair wages mean. And so, you know, 1:10:12.720 --> 1:10:15.000 not just in this industry, but I think in multiple 1:10:15.040 --> 1:10:19.720 industries across this country. So we're in that moment right 1:10:19.760 --> 1:10:22.400 now and we're all feeling and I hope it things 1:10:22.400 --> 1:10:25.280 settle sooner than later and we find that common ground 1:10:25.280 --> 1:10:27.599 of fairness so everybody can get back to work. 1:10:27.800 --> 1:10:29.320 You just have about a minute and a half left here. 1:10:29.360 --> 1:10:31.080 Is there for a favorite moment of yours in terms 1:10:31.120 --> 1:10:35.320 of making the movie or you know, the process. I 1:10:35.360 --> 1:10:37.160 know it's hard for you to be like, yeah, it's 1:10:37.240 --> 1:10:40.000 my favorites, my baby or my latest baby, but is 1:10:40.040 --> 1:10:42.639 there you know, take us a little bit behind the scenes. 1:10:43.479 --> 1:10:46.639 It's two things, you know, Like it's hard, as we said, 1:10:46.640 --> 1:10:48.879 it's hard making the film and pulling all these elements 1:10:48.880 --> 1:10:51.040 together and takes a lot of energy and certainly a 1:10:51.080 --> 1:10:53.600 lot of money. And you have to hope that the 1:10:53.640 --> 1:10:56.519 movie gods smile upon you. But for me, it's always 1:10:56.520 --> 1:10:59.120 two moments in any given films. It's the moment when 1:10:59.160 --> 1:11:01.160 you pull the whole thing together on the first day 1:11:01.479 --> 1:11:04.400 of photography, and I think about it all the way 1:11:04.400 --> 1:11:06.599 to the first moment made up until now, and when 1:11:06.600 --> 1:11:09.240 you're standing behind the director and you got the whole 1:11:09.280 --> 1:11:12.040 everybody ready to go, and the director kind of says 1:11:12.120 --> 1:11:15.200 action to me, It's like, I feel like a moment 1:11:15.280 --> 1:11:18.559 of triumph in that moment, thinking Okay, well this is 1:11:18.600 --> 1:11:22.439 happening now and this story will be indelible. Those kinds 1:11:22.439 --> 1:11:24.599 of moments are never lost to me. The second part 1:11:24.640 --> 1:11:27.760 is when you show your film the first time in 1:11:27.800 --> 1:11:29.960 front of a large audience, like we had the opportunity 1:11:30.000 --> 1:11:33.200 to do in Toronto, and have an audience received the 1:11:33.240 --> 1:11:35.880 film the way it did, with a standing ovation the 1:11:35.960 --> 1:11:39.280 way we had, and just see how people really enjoyed 1:11:39.280 --> 1:11:41.479 the film, there's nothing more rewarding. 1:11:41.960 --> 1:11:43.720 Well, we're looking forward to see it. I have to 1:11:43.720 --> 1:11:45.760 say I haven't seen it yet, but I will. I 1:11:45.760 --> 1:11:49.519 certainly lived it reporting on it. So fascinating to see 1:11:49.640 --> 1:11:51.960 the interpretation that you guys did, because it really was 1:11:52.439 --> 1:11:55.240 a remarkable moment in time for anybody who's been watching 1:11:55.280 --> 1:11:58.240 Financial Mark it's another remarkable moment in time and good 1:11:58.280 --> 1:12:00.599 to see you guys put it to the big screen. Aaron, 1:12:00.640 --> 1:12:03.120 good luck with it. Aaron Ryder, producer of dub Money 1:12:03.160 --> 1:12:06.600 as we said, opening nationally on the big screen, so 1:12:06.880 --> 1:12:08.800 check it out. He's joining us, of course on zoom 1:12:08.800 --> 1:12:10.320 In Los Angeles. 1:12:10.439 --> 1:12:14.000 You're listening to the Bloomberg Business Week podcast. Catch us 1:12:14.040 --> 1:12:18.000 live weekday afternoons from three to six Easter on Bloomberg Radio, 1:12:18.240 --> 1:12:21.519 the Bloomberg Business App and YouTube. You can also listen 1:12:21.640 --> 1:12:24.719 live on Amazon Alexa from our flagship New York station, 1:12:25.200 --> 1:12:27.960 Just say Alexa play Bloomberg eleven thirty. 1:12:30.240 --> 1:12:34.080 Make them lad, make him loud, don't you know? 1:12:34.240 --> 1:12:35.559 Everyone wants to lave? 1:12:35.760 --> 1:12:39.360 Yeah, Zoe, everybody. Let's make him laugh and laugh a 1:12:39.400 --> 1:12:42.799 bit more. I mean, I gotta say, it's not always easy, 1:12:43.960 --> 1:12:46.040 considering the news flow and the stresses that are out 1:12:46.040 --> 1:12:48.920 there right. Economic, personal are otherwise kind of love that 1:12:49.040 --> 1:12:50.360 from singing in the rain. 1:12:51.200 --> 1:12:53.519 You know what though, that's o'nor, But it's actually good 1:12:53.560 --> 1:12:53.960 to laugh. 1:12:54.160 --> 1:12:54.400 I know. 1:12:54.960 --> 1:12:57.559 Okay, So where is good for us? We are nerds, 1:12:57.600 --> 1:13:02.360 but speak for you usself. The Mayo Clinic points out 1:13:02.400 --> 1:13:04.840 that when it comes to relieving stress, more giggles and 1:13:04.880 --> 1:13:07.439 gufaws are just what the doctor ordered, noting that a 1:13:07.439 --> 1:13:09.760 good laugh has great short term effects. When you start 1:13:09.760 --> 1:13:11.800 to laugh, it doesn't just lighten your load mentally, it 1:13:11.840 --> 1:13:16.040 actually induces physical changes in your body, including stimulating your organs, 1:13:16.080 --> 1:13:18.960 soothing tension, improving your immune system. So everybody in the 1:13:19.000 --> 1:13:21.160 control room, you better be laughing no more. 1:13:21.240 --> 1:13:23.919 Yeah, I better go to the Comedy Festival. The seventeenth 1:13:23.960 --> 1:13:26.720 annual New York Comedy Festival, Yes, about. 1:13:26.439 --> 1:13:29.080 To get underway in early November. A legend in the 1:13:29.080 --> 1:13:31.360 world of comedy is with us today in our studio, 1:13:31.439 --> 1:13:34.479 Caroline Hirsch, founder of Caroline's on Broadway. Of course you 1:13:34.560 --> 1:13:38.080 know that she's here in our Bloomberg Interactive Brokers studio. Welcome, Welcome, 1:13:38.120 --> 1:13:40.120 welcome back. How are you good. 1:13:40.160 --> 1:13:42.080 I'm good, So we have quite the medicine for you. 1:13:42.600 --> 1:13:43.960 The New Comedy Festival. 1:13:44.040 --> 1:13:45.240 My voice doesn't usually sound like this. 1:13:46.200 --> 1:13:50.360 Festival number third, the twelfth we've extended this year. We're 1:13:50.400 --> 1:13:53.920 ten days straight, probably about one hundred and fifty shows, 1:13:53.920 --> 1:13:57.280 still counting. We're still adding, we're still putting people together, 1:13:57.400 --> 1:14:01.320 so still announcing new shows coming up, twenty two theater shows. 1:14:01.439 --> 1:14:02.920 So we're very very happy. 1:14:03.040 --> 1:14:05.400 Carolyn. I just had family in from Texas, and you 1:14:05.400 --> 1:14:06.479 know what they did. They did a bunch of things 1:14:06.520 --> 1:14:08.280 around New York. It was a short weekend they went 1:14:08.320 --> 1:14:11.200 to a comedy show. People want to experience things. How 1:14:11.240 --> 1:14:14.320 did you guys think about that? Are you seeing increased 1:14:14.400 --> 1:14:16.120 demand or a lot of demand coming out of the 1:14:16.160 --> 1:14:18.400 pandemic of people just wanting to go to things like 1:14:18.439 --> 1:14:19.040 comedy shows. 1:14:19.160 --> 1:14:20.760 Well, I think the general people want to go to 1:14:20.760 --> 1:14:23.400 live events, and I think live events are like the 1:14:23.439 --> 1:14:26.360 big thing right now. So look, when we put tickets 1:14:26.360 --> 1:14:30.080 on sale, we got a really really robust kind of 1:14:30.160 --> 1:14:33.400 reaction to it. So ticket sales are really really good. 1:14:33.680 --> 1:14:35.519 That's good, it's good. 1:14:35.600 --> 1:14:36.400 It's good for New York. 1:14:36.439 --> 1:14:43.840 Okay, at Madison Square Garden, Shane Gillis at Carnegie Hall, 1:14:43.920 --> 1:14:47.840 Mateo Lange and me Carr Anthony just all at Carnegie Hall. 1:14:49.040 --> 1:14:50.920 And you know what happens that, you know, people go 1:14:50.960 --> 1:14:52.960 to Carnegie Hall and then they'll go to the restaurant 1:14:53.000 --> 1:14:55.439 across the street. Right, So what we do is bring 1:14:55.520 --> 1:14:58.360 this stimulus to New York City, which we're always happy 1:14:58.400 --> 1:14:59.880 to do, and we have a lot of fun with 1:15:00.080 --> 1:15:02.040 doing it. And then we have you know, we we 1:15:02.120 --> 1:15:04.719 have britt Goldstein. Do you know him from Ted Lasso? 1:15:05.120 --> 1:15:07.360 So he's doing a lot of him at the beach. Wait, 1:15:07.439 --> 1:15:09.040 can we all say what he says, Oh, no, we 1:15:09.080 --> 1:15:09.719 can't say that. 1:15:09.640 --> 1:15:12.559 On air, can't we you can you can't. You can't 1:15:13.160 --> 1:15:13.800 be your last show. 1:15:13.840 --> 1:15:15.200 We do say it a lot of the news, but 1:15:15.280 --> 1:15:17.479 go ahead. He's so great. 1:15:17.720 --> 1:15:17.960 Yeah. 1:15:17.960 --> 1:15:20.240 And then we have you know, we we have a 1:15:20.280 --> 1:15:23.280 big event which is Stand Up for Heroes, which kind 1:15:23.280 --> 1:15:26.120 of opens up the festival this year on November sixth. 1:15:26.600 --> 1:15:30.000 So we have Jimmy Carr there, Tracy Morgan, Rita Wilson 1:15:30.040 --> 1:15:37.080 will be singing, Shane Gillis, Ronnie Chang, John Stewart who's 1:15:37.360 --> 1:15:41.599 a constant there, and also Josh Grobin and John Mellencamp. 1:15:41.880 --> 1:15:43.080 So that is quite as shore. 1:15:43.120 --> 1:15:45.600 Are they doing comedy? 1:15:45.320 --> 1:15:45.880 Are singing? 1:15:46.600 --> 1:15:46.760 Yeah? 1:15:46.840 --> 1:15:48.800 This thing okay, that's okod. 1:15:48.800 --> 1:15:50.200 How do you think about when you put it together? 1:15:50.240 --> 1:15:53.639 Seventeen years and running? Talk to us about like how 1:15:53.640 --> 1:15:54.280 it's evolved. 1:15:54.360 --> 1:15:57.840 Oh, it's nineteen years forgive me years and seventeen years 1:15:58.240 --> 1:16:02.760 for the Stand Up for Heroes. But it's nineteen years, 1:16:02.760 --> 1:16:05.519 sixt year. We're having a big, big blowout the twentieth 1:16:05.640 --> 1:16:06.519 year in New York City. 1:16:06.600 --> 1:16:06.920 Wow. 1:16:07.200 --> 1:16:09.479 You know we start the day after we finish here, 1:16:09.520 --> 1:16:12.080 we start for next year. Actually, we're trying to secure 1:16:12.360 --> 1:16:15.040 venues ready for next year, you know, our big shows 1:16:15.080 --> 1:16:18.120 at Madison Square Garden. So we do that constantly. 1:16:18.640 --> 1:16:20.840 You know, it's we don't often because we have a 1:16:20.960 --> 1:16:22.679 global audience here on the program. 1:16:22.720 --> 1:16:23.840 We really, yeah, we do. 1:16:24.000 --> 1:16:25.439 I had no idea that's some comedy for you. 1:16:26.680 --> 1:16:29.280 Kidding looking into the control room and see if you 1:16:29.320 --> 1:16:31.920 can sit. They're not laughing in there. I know, I 1:16:31.960 --> 1:16:35.040 know to my day job, but we do, and we 1:16:35.120 --> 1:16:37.400 you know, we have a national audience as well. So 1:16:37.400 --> 1:16:39.519 why are we talking about something here in New York. Well, 1:16:39.520 --> 1:16:41.360 because a lot of people from all over the world 1:16:41.400 --> 1:16:43.240 and all over the country come to this. Talk a 1:16:43.280 --> 1:16:45.920 little bit about who this attracts and sort of where 1:16:45.920 --> 1:16:48.040 New York is right now in the comedy scene, because 1:16:48.240 --> 1:16:50.120 you know, there are people who are saying, you know, okay, 1:16:50.560 --> 1:16:53.040 La is you know a classic place for comedy. You've 1:16:53.040 --> 1:16:55.960 got Joe Rogan and Austin doing his thing, you know, 1:16:56.000 --> 1:16:59.040 trying to make Austin comedy happen. Where do you stand 1:16:59.040 --> 1:16:59.320 on all this? 1:17:00.120 --> 1:17:03.720 You know you can never negate New York. Yeah you can't. 1:17:03.760 --> 1:17:05.880 You can't take the New Yorker New Yorker. 1:17:06.479 --> 1:17:09.240 No, it's here, it's here, It's here. It's where it starts. 1:17:09.400 --> 1:17:11.439 This is where you get the creative juices. This is 1:17:11.439 --> 1:17:14.240 where you get the ideas they you know, the whole 1:17:14.240 --> 1:17:16.439 thing with La was that, you know, which is not 1:17:16.680 --> 1:17:18.760 so quite in fashion right now, is to go out 1:17:18.800 --> 1:17:21.439 there to get your sitcom. That's that's not really happening 1:17:21.520 --> 1:17:22.280 anymore now. 1:17:22.280 --> 1:17:24.760 It's nice happening the last five months without the writers strike. 1:17:24.840 --> 1:17:26.599 I can tell you that I guess they're a bad 1:17:26.680 --> 1:17:28.200 That's a really good point because you did see a 1:17:28.240 --> 1:17:31.040 lot of comics for a long time, right get a 1:17:31.080 --> 1:17:34.000 series and then just move to television. It's kind of not. 1:17:34.000 --> 1:17:36.400 Happening now at the touring that goes on. When you 1:17:36.479 --> 1:17:39.280 have a great special that's on TV, you take that 1:17:39.400 --> 1:17:42.080 and you go on the road, and that's your millions 1:17:42.080 --> 1:17:44.840 of dollars that these people, you know, comedians are making 1:17:44.840 --> 1:17:48.400 on the road. When you're selling out Beacon Theaters, Carnegie Hall, 1:17:48.439 --> 1:17:51.040 when you're selling out the Garden. This is this is 1:17:51.120 --> 1:17:54.599 like this is big bucks, you know. So it's it's 1:17:54.600 --> 1:17:57.040 it's a big, big business for a lot of people 1:17:57.080 --> 1:17:58.880 that have really you know, made it and are able 1:17:58.880 --> 1:17:59.960 to tour around the country. 1:18:00.040 --> 1:18:02.160 Can we talk about the business of comedy and I 1:18:02.200 --> 1:18:06.200 think about you know, last December, your iconic club, right, 1:18:06.360 --> 1:18:10.040 you did not renew your lease it's spot in Times Square. 1:18:10.080 --> 1:18:10.920 How hard was that? 1:18:12.439 --> 1:18:12.640 You know? 1:18:12.720 --> 1:18:14.920 I wanted to stay, and then there was a part 1:18:14.960 --> 1:18:17.599 of me which did not want to stay because of 1:18:17.760 --> 1:18:19.800 the way. And I don't want to put down Time 1:18:19.880 --> 1:18:23.240 Square because I went there thirty years ago to build 1:18:23.240 --> 1:18:26.440 it up and I was part of that, the renovation 1:18:26.880 --> 1:18:30.280 of Times here and the renewal of Times Square. So 1:18:30.479 --> 1:18:31.960 I'm not going to put it down. But things were 1:18:32.040 --> 1:18:34.760 changing there. The city was changing there. I felt that 1:18:34.800 --> 1:18:40.720 after COVID, the whole seascape there was changing. And I said, 1:18:40.840 --> 1:18:43.760 let me step back. I own the brand. I want 1:18:43.800 --> 1:18:46.120 to take the brand. I'm extending it through the festival 1:18:46.439 --> 1:18:48.519 and then we have other ideas where we're going with that. 1:18:48.680 --> 1:18:50.880 Okay, yeah, give us some of those other ideas. 1:18:50.960 --> 1:18:53.400 Yeah, well, you know, we're taking the Carolines brand and 1:18:53.479 --> 1:18:56.040 you know, kind of producing content and putting it out 1:18:56.080 --> 1:18:59.600 there and specials and everything else that we do with 1:18:59.680 --> 1:19:01.719 comedy on a grander scale. 1:19:01.800 --> 1:19:03.240 I mean, it really was the end of an era 1:19:03.439 --> 1:19:04.920 for you not to renew your leaves there. 1:19:06.120 --> 1:19:09.679 Well, yeah, I was lived thirty years in Time Square. 1:19:09.800 --> 1:19:12.439 So I mean Tom Square changed a lot in thirty years, 1:19:12.479 --> 1:19:14.000 and it changed a lot just in a few years 1:19:14.080 --> 1:19:16.400 because of the pandemic. Talk to us a little bit 1:19:16.400 --> 1:19:19.320 about the you know, what happened, and the decision making process, 1:19:19.320 --> 1:19:21.160 and the external factor is there too, Okay? 1:19:21.160 --> 1:19:24.479 So obviously I went to my landlord and I go, listen, 1:19:24.520 --> 1:19:27.719 we need some relief here. You know, things have changed 1:19:27.760 --> 1:19:30.320 a lot, so can you He goes, no, Actually, we 1:19:30.439 --> 1:19:32.880 really want to raise the rent. So I said, oh, 1:19:33.040 --> 1:19:34.920 but you know, there's so many repairs that have to 1:19:34.920 --> 1:19:37.439 be done. I'm here for thirty years, you know, air conditioning, 1:19:37.439 --> 1:19:41.400 electrical work, just things needed to be upgraded. And he said, well, 1:19:41.479 --> 1:19:44.160 that's just what the deal is. And I tried very 1:19:44.200 --> 1:19:46.160 hard to stay there, and then I just said, well, 1:19:46.240 --> 1:19:47.360 I'm out of here now at this moment. 1:19:47.400 --> 1:19:47.559 Done. 1:19:47.600 --> 1:19:49.280 Did you have other things to do you? Did you 1:19:49.280 --> 1:19:50.840 look for other play other physical space. 1:19:51.479 --> 1:19:54.840 No, but I have to tell you that we had 1:19:54.880 --> 1:19:58.639 so much press when we closed that so many real 1:19:58.760 --> 1:20:01.880 estate developers called me. He said, I have spaces for 1:20:01.960 --> 1:20:04.040 you and I will help you build it out. 1:20:04.320 --> 1:20:05.240 So why didn't you do it? 1:20:05.240 --> 1:20:07.400 Well, we're in the I'm in the process of taking 1:20:07.400 --> 1:20:10.360 it all in and deciding what the next big move in. 1:20:10.760 --> 1:20:12.880 It's not it'll be four wolves, but it'd be something 1:20:12.960 --> 1:20:13.479 very different. 1:20:13.560 --> 1:20:14.240 What a great feel? 1:20:14.360 --> 1:20:15.320 That is pretty cool? 1:20:15.600 --> 1:20:16.679 Right? Great? 1:20:16.720 --> 1:20:19.240 So this is like it to be continued. You'll come 1:20:19.240 --> 1:20:23.640 back in like two months, three months, four weeks. Can 1:20:23.840 --> 1:20:27.880 ask me what do you find funny today? Are you oh, 1:20:31.000 --> 1:20:32.880 oh my god, we need laughter? What do you find 1:20:32.880 --> 1:20:33.599 funny today? 1:20:33.720 --> 1:20:34.360 You know what it is? 1:20:34.520 --> 1:20:37.280 You know what I find funny is that it's almost 1:20:37.360 --> 1:20:40.040 the point when a joke is it reaches the point 1:20:40.040 --> 1:20:43.280 where it it is such a great joke that it 1:20:43.360 --> 1:20:46.519 hits the point that it's almost politically not correct. And 1:20:46.600 --> 1:20:52.520 those kind of shows, those kind of jokes are brilliant 1:20:51.880 --> 1:20:54.640 to get to that line, make your point, but not 1:20:54.720 --> 1:20:55.040 go there. 1:20:55.160 --> 1:20:57.760 Remember where we could say it's a joke people. 1:20:57.680 --> 1:21:00.519 So you can still say that, No you can't. 1:21:00.680 --> 1:21:01.519 It's no tough. 1:21:01.680 --> 1:21:05.400 Yeah, it doesn't matter. If you know Netflix staff walk 1:21:05.479 --> 1:21:09.839 out over, you know your your special, You're still selling 1:21:09.840 --> 1:21:12.439 out arenas across the country. I'm talking about Dave Chappelle here, 1:21:12.840 --> 1:21:13.439 that's truth. 1:21:13.640 --> 1:21:14.000 Yeah. 1:21:14.160 --> 1:21:15.360 Is it tough for comics today? 1:21:15.400 --> 1:21:15.559 Though? 1:21:15.680 --> 1:21:18.599 I don't think so. I just think I just think 1:21:18.640 --> 1:21:21.280 that they need to stay on a steady, straight path. 1:21:21.560 --> 1:21:24.920 And I think that they do realize that that things 1:21:24.960 --> 1:21:27.800 could be offensive. And I think that, Look, I've seen 1:21:28.000 --> 1:21:30.280 a lot of male comics change a lot of stuff. 1:21:30.320 --> 1:21:32.479 What they used to say, they wouldn't dare say that. 1:21:32.720 --> 1:21:35.120 I mean, they get strangled by every woman in the audience. 1:21:35.400 --> 1:21:37.800 But things have changed like that, and I think people are, 1:21:38.200 --> 1:21:41.080 you know, mindful of other people like that. Like we 1:21:41.080 --> 1:21:42.560 were just talking before I walked in here. I was 1:21:42.600 --> 1:21:45.559 talking about Don Rickles today. We said, oh my god, 1:21:45.680 --> 1:21:48.280 he couldn't insult people like that today. 1:21:48.439 --> 1:21:50.080 That's a good point. 1:21:50.160 --> 1:21:50.960 It was a joke. 1:21:51.520 --> 1:21:53.559 Don Rickles, D mart and all those guys like. 1:21:53.840 --> 1:21:55.639 You think self censorship is real. 1:21:57.280 --> 1:21:59.880 I think I think it is. I think it is, 1:22:00.479 --> 1:22:04.120 but to a good self censorship, not anything like I 1:22:04.200 --> 1:22:07.280 think it's good. But it's that brilliant joke that may 1:22:07.360 --> 1:22:10.160 cross the line but doesn't. And those are the greatest, 1:22:10.960 --> 1:22:13.880 the still get away with stuff, who can really push 1:22:13.920 --> 1:22:17.240 it are there? Certainly well gave Dave Schelle can ali 1:22:17.280 --> 1:22:21.960 Wan Can. That's a woman that can hit that mark 1:22:22.560 --> 1:22:25.400 of not crossing the line but through us on the line. 1:22:25.880 --> 1:22:28.640 My turn where you're going, Okay, go. I want to 1:22:28.680 --> 1:22:34.360 know your opinion, Caroline, about the role of comedy clubs today. 1:22:34.600 --> 1:22:38.439 Given that there's YouTube, there's TikTok, there are all these 1:22:38.479 --> 1:22:41.800 places where comedians, up and coming comedians can post their 1:22:41.800 --> 1:22:44.000 content and build a following there. 1:22:44.680 --> 1:22:46.519 That's a good thing. That's a good thing for clubs 1:22:46.880 --> 1:22:49.960 because when they build the following, then they get booked 1:22:49.960 --> 1:22:52.479 into the club and they make really nice money and 1:22:52.479 --> 1:22:55.759 everybody's happy because they sell out. So it's also still 1:22:55.800 --> 1:22:58.800 that live experience. People still want it. They want to 1:22:58.800 --> 1:23:01.120 go in that room with you and me and all 1:23:01.200 --> 1:23:03.880 laugh together. That's what they want. That's the thing about 1:23:03.920 --> 1:23:06.519 what makes a joke, It's that the community is sitting 1:23:06.520 --> 1:23:08.920 there saying, oh God, that happened to me too, and 1:23:08.960 --> 1:23:11.680 you laugh. So it's all part of that live experience. 1:23:11.720 --> 1:23:14.080 And I'm seeing that with the festival as everything is. 1:23:14.240 --> 1:23:17.880 You know, these everybody in the festival has a terrific 1:23:18.120 --> 1:23:21.320 online following. I mean they millions of people huge, but 1:23:22.040 --> 1:23:23.639 they want to go out and see them. The same 1:23:23.680 --> 1:23:25.880 thing that happened when years ago, when you had that 1:23:25.960 --> 1:23:29.320 great HBO special that built you up so that when 1:23:29.360 --> 1:23:32.120 you toured around you would sell out, right, So that's 1:23:32.160 --> 1:23:33.880 all money in the bank for the performers. 1:23:33.920 --> 1:23:36.519 The nineteenth annually, that how many festival this November. I'm 1:23:36.520 --> 1:23:39.360 giving you a shameless plug. Hey, listen, take us back, 1:23:39.400 --> 1:23:42.840 because you've been doing this a long time. Back in 1:23:42.880 --> 1:23:45.559 the early eighties you began, I mean, Jay Leno, Jerry Seinfeld, 1:23:45.560 --> 1:23:49.000 Pee Herman, Billy Crystal, Robin Williams, Sandra Bernard, I know, 1:23:49.560 --> 1:23:52.160 Chris Raight, I know it breaks our heart right like 1:23:52.200 --> 1:23:56.560 these are people that were funny like no other and 1:23:57.920 --> 1:24:00.919 changed I think the way we see comedy, enjoy comedy. 1:24:01.320 --> 1:24:04.040 But in the early day, is everyone funny out of 1:24:04.040 --> 1:24:04.400 the gate? 1:24:05.920 --> 1:24:08.160 Well you see, you know we were just talking about 1:24:08.200 --> 1:24:10.639 Bill Maher So you know, Bill started at my little 1:24:10.640 --> 1:24:13.240 club on eighth Avenue. But of course you grow over 1:24:13.240 --> 1:24:16.400 the years, Jerry Seinfeld, you grow over the years. Jay Leno, 1:24:16.720 --> 1:24:19.720 grow over the years. But Jay has always been this 1:24:20.120 --> 1:24:21.800 menshi guy. 1:24:21.840 --> 1:24:25.040 What ja tours like four days a week now, probably every. 1:24:24.840 --> 1:24:28.200 Weekend he's doing something, you know, And so Jerry Zeipfel, 1:24:28.560 --> 1:24:31.640 you missed. Every weekend he's probably somewhere doing two or 1:24:31.680 --> 1:24:34.360 three shows back home again during the week and that's 1:24:34.479 --> 1:24:37.040 really his life because he loves what he's doing. 1:24:37.120 --> 1:24:39.320 What do you remember from these guys in the early days, 1:24:40.400 --> 1:24:40.680 you know. 1:24:40.680 --> 1:24:42.680 We were all so new to it. It was like, 1:24:42.880 --> 1:24:45.040 you know, when I opened Carolines, it was like the 1:24:45.040 --> 1:24:47.519 first headliner club in New York City. It was like 1:24:47.560 --> 1:24:50.000 a yuppie that word yuppie. We're going back to the 1:24:50.040 --> 1:24:54.000 eighties yuppie nightclub that opened up. And it was the day. 1:24:54.040 --> 1:24:56.479 It was when David Letterman was at twelve thirty at night. 1:24:56.840 --> 1:24:59.160 Jay Leno would be at my club and he'd say like, oh, 1:24:59.200 --> 1:25:02.080 I'm appearing at Alliance. It gave us this national play 1:25:02.120 --> 1:25:04.320 around the country, and that kind of set up the club. 1:25:04.320 --> 1:25:07.000 And I remember, you know, Paul Rubens pee wee harmon 1:25:07.080 --> 1:25:09.599 bringing him to New York. I have such fond memories 1:25:09.600 --> 1:25:13.120 of him. And you know, I didn't up until he 1:25:13.280 --> 1:25:16.640 was texting me on my birthday, sending me birthday videos 1:25:16.760 --> 1:25:19.679 up until the end saying listen, we need to FaceTime soon. 1:25:20.080 --> 1:25:22.800 Are you coming to LA I'm not coming to New York. 1:25:23.080 --> 1:25:26.240 Didn't tell me he wasn't feeling well, because I would. 1:25:26.400 --> 1:25:28.280 We would always, like you know, text each other back 1:25:28.280 --> 1:25:29.960 and forth, and I had no idea he was sick, 1:25:30.760 --> 1:25:33.559 but he brought a show to New York. In New York, 1:25:34.000 --> 1:25:36.960 they conceived Pee Wee's Big Adventure. He was going to 1:25:37.040 --> 1:25:40.040 ride his bike from LA to New York City with 1:25:40.080 --> 1:25:44.400 this unknown director at that time, Tim Burton Khunew. But 1:25:44.520 --> 1:25:46.720 you know that's that's what Paul had. He had that 1:25:47.200 --> 1:25:50.680 creative part of him. Those comedians that I worked with 1:25:50.720 --> 1:25:53.080 from the beginning all went on. Look at Jerry and 1:25:53.160 --> 1:25:57.439 Larry David show seinfeldt, oh, my god, earth shattering. You 1:25:57.479 --> 1:25:59.200 know we still say we were just talking about it 1:25:59.280 --> 1:26:01.800 last night. I still turn it on and see an 1:26:01.960 --> 1:26:03.040 episode I haven't seen. 1:26:03.240 --> 1:26:05.760 Right, well, I always make references to Stein felt like 1:26:06.120 --> 1:26:06.720 I've seen them all. 1:26:06.720 --> 1:26:08.760 I gotta tell you, Okay, so we only have a 1:26:08.760 --> 1:26:11.960 minute left, Caroline. But comedians who have made it love 1:26:12.040 --> 1:26:14.160 to say that in order for comedian to make it, 1:26:14.200 --> 1:26:17.439 you've got a bomb. Give us some stories of some 1:26:17.600 --> 1:26:19.439 prominent bombs that you've witnessed in your bag. 1:26:19.520 --> 1:26:22.040 How about Larry David And he would say, oh, to 1:26:22.080 --> 1:26:23.479 the audience, they're just terrible. 1:26:23.720 --> 1:26:25.920 And he didn't do that well or twice. 1:26:26.040 --> 1:26:29.639 He did that all over see that I can see 1:26:29.640 --> 1:26:29.960 the curve. 1:26:32.080 --> 1:26:33.880 They're terrible, They're terrible. 1:26:34.040 --> 1:26:36.840 They bomb, I gotta say, and what you've done for 1:26:36.960 --> 1:26:39.519 women comedians right when they were just so far in 1:26:39.560 --> 1:26:43.280 few and just to see everyone out there today, it's incredible. 1:26:43.400 --> 1:26:47.200 You are incredible. Come back anytime. Let us know the news. 1:26:47.240 --> 1:26:49.599 If you land somewhere, okay, you can share it with us, 1:26:50.240 --> 1:26:52.440 and good luck again. Remind us when the festival. 1:26:52.080 --> 1:26:54.479 Is November third to the twelfth. Go to New York 1:26:54.479 --> 1:26:57.479 Comedy Festival dot com and you would be amazed to 1:26:57.479 --> 1:26:59.759 see how many shows are listed there to go see 1:27:00.080 --> 1:27:00.920 and have a great time. 1:27:01.280 --> 1:27:03.880 Thank you so much, good luck, be wellome Caroline Hursh, 1:27:03.880 --> 1:27:05.920 founder of Carolines of course on Broadway. Here in our 1:27:05.920 --> 1:27:10.280 Bloomberg Interactive Broker Studio, Carol Masser, Tim Stanevek. We're not funny, 1:27:10.280 --> 1:27:13.720 but she is anterlineup. This is Bloomberg. 1:27:17.280 --> 1:27:20.840 You're listening to the Bloomberg Business Week podcast. Catch us 1:27:20.880 --> 1:27:25.000 live weekday afternoons from three to six Eastern on Bloomberg Radio, 1:27:25.120 --> 1:27:28.360 the Bloomberg Business App, and YouTube. You can also listen 1:27:28.479 --> 1:27:31.599 live on Amazon Alexa from our flagship New York station, 1:27:32.040 --> 1:27:35.080 Just say Alexa, play Bloomberg eleven thirty. 1:27:36.560 --> 1:27:36.760 Time. 1:27:36.840 --> 1:27:38.240 Now for a bit of luxury with our friends from 1:27:38.280 --> 1:27:41.080 Bloomberg Pursuits and this week's issue of Bloomberg Business Week 1:27:41.080 --> 1:27:44.400 magazine includes the return of the Business Travel special, highlighted 1:27:44.439 --> 1:27:46.959 by the debut of a series called two Night Minimum. 1:27:47.040 --> 1:27:49.479 It's your personal travel guide to some of the world's 1:27:49.479 --> 1:27:52.479 most iconic destinations, design for those who want to get 1:27:52.479 --> 1:27:54.360 to know the heart of a place in a pretty 1:27:54.360 --> 1:27:56.960 short time, whether they're in town for business or they're 1:27:57.000 --> 1:27:59.600 just passing through or making a weekend more of it. 1:27:59.760 --> 1:28:03.240 Yeah, absolutely, we have the dynamic do Bloomberg Pursuits editor 1:28:03.280 --> 1:28:06.640 Chris Rouser and Bloomberg News travels are Nikki Eckstein. Our 1:28:06.680 --> 1:28:09.280 first installment to Night Minimum comes courtesy of one of 1:28:09.320 --> 1:28:12.640 our favorite reporters, Brandon Presser, who whisks us to the 1:28:12.680 --> 1:28:15.320 Spanish capital of Madrid. But we also do want to 1:28:15.320 --> 1:28:17.639 point out that this sectual Pursuits coincides with the launch 1:28:17.640 --> 1:28:19.880 of Bloomberg Travel. It's a department, Nikki, that you have 1:28:19.960 --> 1:28:23.840 been overseeing and you're bringing together Pursuits content with coverage 1:28:24.000 --> 1:28:26.760 from all our different teams around Bloomberg. Can you just 1:28:26.800 --> 1:28:27.800 tell us a little bit about that? 1:28:28.000 --> 1:28:30.000 Yeah? So, do you want to hear our official tagline, 1:28:30.040 --> 1:28:32.439 I love our highle tagline the new hub for globe 1:28:32.479 --> 1:28:35.200 trotting leaders, covering everything from the business of travel to 1:28:35.240 --> 1:28:38.800 the most worthwhile experiences that money can buy. So you've 1:28:38.800 --> 1:28:41.439 known and loved the most worthwhile experiences that money can buy. 1:28:41.479 --> 1:28:43.800 That's always been the pursuits travel, Emma. We love to 1:28:43.800 --> 1:28:45.559 tell you how to spend your money well all around 1:28:45.600 --> 1:28:49.000 the world. But now I think really, ever since the pandemic, 1:28:49.000 --> 1:28:52.360 we've really attuned our geeze to how important travel is 1:28:52.400 --> 1:28:54.839 as a pillar of the global economy, and we're really 1:28:54.920 --> 1:28:58.120 broadening our scope to think about that and how it 1:28:58.160 --> 1:29:02.439 affects government people. Economy is job INFLA and you know, 1:29:02.560 --> 1:29:05.519 all of these topics have a really really clear relation 1:29:05.600 --> 1:29:07.760 point to travel in the travel economy, and so our 1:29:07.840 --> 1:29:11.680 coverage is inclusive of all of those things. Now it 1:29:11.720 --> 1:29:13.879 has been for a while, and now it's more organized, 1:29:13.920 --> 1:29:16.000 you can find it more easily Bloomberg dot com. Blush 1:29:16.080 --> 1:29:18.559 Travel is a really exciting effort. I'm so proud to 1:29:18.560 --> 1:29:19.080 be leading it. 1:29:19.320 --> 1:29:21.120 Well, it's really cool. And then do you think about Chris, 1:29:21.120 --> 1:29:23.080 how much time you know Tim and I on a 1:29:23.160 --> 1:29:25.519 daily basis talk about the travel industry and the importance 1:29:25.520 --> 1:29:26.679 of it to the global economy. 1:29:26.960 --> 1:29:28.960 Yes, yeah, I mean it's one of the biggest industries 1:29:28.960 --> 1:29:31.719 in the world, and Nikki is taking charge in making 1:29:31.760 --> 1:29:34.200 Bloomberg like really cover it the way we cover all 1:29:34.240 --> 1:29:39.200 these other industries, and also giving smarter tools for travel, 1:29:39.479 --> 1:29:42.559 like you know, we're just the way you think about travel, 1:29:42.720 --> 1:29:44.559 how you can be a better like steward of the 1:29:44.560 --> 1:29:47.080 world as you travel, but also how you can save money. 1:29:47.360 --> 1:29:51.080 Well, Nikki, let's start by heading to Madrid, because as 1:29:51.520 --> 1:29:55.519 you and Brandon Wright in the piece, it's kind of 1:29:55.560 --> 1:29:58.679 not known as a place of you know, a destination 1:29:58.760 --> 1:30:01.000 in the same way that Barcelona in the past has been. 1:30:01.240 --> 1:30:04.519 I mean, you're absolutely right. Barcelona has always been the 1:30:04.600 --> 1:30:07.559 kind of capital of cool and culture and all things 1:30:07.800 --> 1:30:10.880 hip and fabulous in Spain, and Madrid has really been 1:30:10.880 --> 1:30:12.840 the seat of government and banking, and I think it's 1:30:12.880 --> 1:30:16.040 been seen as more staid by comparison. But I've noticed 1:30:16.120 --> 1:30:19.240 and I think Chris you've definitely noticed this too. We've 1:30:19.240 --> 1:30:22.120 talked about it. In the last year or two, everyone 1:30:22.280 --> 1:30:25.320 is going to Madrid. Madrid is suddenly the coolest place, 1:30:25.479 --> 1:30:29.080 maybe like all of Europe. It's really had this incredible 1:30:29.120 --> 1:30:32.679 resurgence and as we've learned some of it. A lot 1:30:32.680 --> 1:30:35.920 of it has to do because people from broader Latin 1:30:35.920 --> 1:30:38.360 America have made it their new home. Amid the pandemic, 1:30:38.400 --> 1:30:40.320 a lot of people move to Madrid. It brought in 1:30:40.320 --> 1:30:42.960 an influx of foreign investment, a lot of tech startups 1:30:43.040 --> 1:30:45.559 moved to Madrid, and it's just juiced the energy in 1:30:45.560 --> 1:30:49.000 that capital made it a far more vibrant, cosmopolitan place. 1:30:49.080 --> 1:30:49.400 All right. 1:30:49.479 --> 1:30:51.400 So if we've got a couple of days, like, how 1:30:51.439 --> 1:30:52.639 do we think about approaching it? 1:30:53.240 --> 1:30:55.639 So our guide really allows you to pick and choose 1:30:55.640 --> 1:30:58.240 your own adventure, depending on what your priorities are and 1:30:58.280 --> 1:30:59.400 how you want to spend your time. 1:31:00.000 --> 1:31:00.400 One of my. 1:31:00.360 --> 1:31:04.160 Favorite things about it is the section of activities, the 1:31:04.240 --> 1:31:07.360 kind of classic C and do section of a travel guide. 1:31:07.720 --> 1:31:10.280 We've switched it up in a way that's just way 1:31:10.320 --> 1:31:15.559 more efficient and plugged in. So everybody goes to ls Throw, 1:31:15.720 --> 1:31:19.840 the sprawling flea market near the Pusai Ord, and people 1:31:19.920 --> 1:31:21.880 usually go on the weekends and it's like a rat 1:31:22.040 --> 1:31:25.920 race of anteeking. But our version of this is, don't 1:31:25.960 --> 1:31:29.400 do that. Go on a weekday. There are two beautiful 1:31:29.439 --> 1:31:34.479 shopping arcades, Galla Das Picered and Noel Gallerias intersto two streets, 1:31:34.520 --> 1:31:37.479 basically that you can prioritize. You've given me the exact 1:31:37.680 --> 1:31:40.479 shop to go to, and we've told you the best 1:31:40.600 --> 1:31:44.600 things in those shops to buy, in this case, beautiful ceramics, 1:31:44.680 --> 1:31:48.120 little hand towels, things that will actually fit in your suitcase. 1:31:48.280 --> 1:31:50.000 One of my favorite things in city guides is when 1:31:50.200 --> 1:31:52.840 you when someone tells you what neighborhood to walk around, 1:31:53.400 --> 1:31:54.680 because that's kind of what I want to do when 1:31:54.720 --> 1:31:56.120 I'm in a city. Especially they don't have a lot 1:31:56.160 --> 1:31:58.560 of time, and so we tell people to, you know, 1:31:59.439 --> 1:32:02.960 walk around on Barrio de la Laetras or Chambourrie. And 1:32:03.080 --> 1:32:05.280 also like the Prado. You can't go to Madrid without 1:32:05.280 --> 1:32:07.439 going to the Prado. We tell you the shortcuts and 1:32:07.560 --> 1:32:09.840 like what to do, what the if you have limited time? 1:32:10.280 --> 1:32:11.920 Which I love because you go in there and it's 1:32:11.960 --> 1:32:13.960 like the biggest museum ever and you it's like how 1:32:14.040 --> 1:32:16.040 do I even do it? And then we've got restaurants 1:32:16.080 --> 1:32:18.160 and hotels, so we've really got everything. And then like 1:32:18.280 --> 1:32:20.519 day trips too, so we've really got everything you need 1:32:20.600 --> 1:32:21.439 to know for a weekend. 1:32:21.680 --> 1:32:23.800 Nikki, let's talk about some of those restaurants because the 1:32:23.880 --> 1:32:24.600 food there is. 1:32:24.640 --> 1:32:27.040 Not to be missed, and it's probably not what you 1:32:27.200 --> 1:32:29.760 expect either. Like, of course, there's all of the top 1:32:29.880 --> 1:32:32.040 us crawling, and one of the things that I love 1:32:32.160 --> 1:32:34.840 is that we're not just giving you like a single 1:32:34.880 --> 1:32:36.360 place to go get top us. We're giving you an 1:32:36.479 --> 1:32:38.960 entire kind of neighborhood. We outline a whole tap us 1:32:39.000 --> 1:32:42.120 crawl in Malasanna, for instance, with numerous stops and telling 1:32:42.120 --> 1:32:44.080 you exactly how to do it most efficiently. But then 1:32:44.080 --> 1:32:46.920 there's also places like Salm and Guru, which literally looks 1:32:46.960 --> 1:32:49.200 like the inside of a manga comic book and it's 1:32:49.240 --> 1:32:53.400 just amazing, super hypermodern and the futuristic cocktail bar with 1:32:53.520 --> 1:32:56.679 an Asian inspired menu. Go there at risk of missing 1:32:56.720 --> 1:32:58.640 your dinner reservation because it's just so much fun to 1:32:58.720 --> 1:33:02.879 be there. And then there's place says like Lennia. For instance, 1:33:03.120 --> 1:33:05.439 there's this one chef in Madrid that owns all of 1:33:05.479 --> 1:33:07.720 the best restaurants in the city. We've picked out the 1:33:07.840 --> 1:33:10.480 best one in his empire. It's Lenia. It's the steakhouse 1:33:10.880 --> 1:33:14.240 and everything is done very dramatically with table side flare 1:33:14.439 --> 1:33:16.679 and fois gras is disguised to look like a little 1:33:16.720 --> 1:33:20.600 Granny's my apple. The steaks are smoked. It seems just 1:33:20.760 --> 1:33:23.559 like the best place ever. So we've kind of curated 1:33:23.640 --> 1:33:26.360 it that way. Pick the best restaurant from the chef 1:33:26.400 --> 1:33:28.760 that has all the restaurants, pick the one street to 1:33:28.840 --> 1:33:29.519 go for top us. 1:33:29.720 --> 1:33:31.639 It's like a great guide right when you just don't 1:33:31.680 --> 1:33:33.040 have a lot of time and you can really just 1:33:33.400 --> 1:33:35.400 figure out the things to do. I love it, love it, 1:33:35.520 --> 1:33:38.120 love it. The other thing I don't, actually, on the 1:33:38.160 --> 1:33:39.920 flip side, don't love is all the fees I play 1:33:40.080 --> 1:33:43.280 pay when I'm traveling. You guys, Chris get into that 1:33:43.360 --> 1:33:46.080 as well, So talk to us about what you covered. 1:33:46.360 --> 1:33:48.280 We have this writer Ramsey who is a genius on 1:33:48.400 --> 1:33:50.920 points and miles and fine finding discounts and how to 1:33:51.160 --> 1:33:52.240 sort of efficiently. 1:33:52.120 --> 1:33:53.080 You guys calling him. 1:33:55.560 --> 1:33:57.200 Well, yeah, we had some long. 1:33:57.080 --> 1:34:00.120 Talks after Delta changed their sky miles rules, you know, 1:34:00.200 --> 1:34:02.639 so he went through and like went through to find 1:34:02.680 --> 1:34:05.160 these hidden fees because there's actually like legislation coming through. 1:34:05.200 --> 1:34:08.520 Biden has made as a priority to make increasing transparency 1:34:08.560 --> 1:34:10.559 on fees like hotel fees. You show up, you thought 1:34:10.560 --> 1:34:12.000 you were paying one thing, and then there's like all 1:34:12.040 --> 1:34:14.200 these fees that are more this is like. 1:34:14.240 --> 1:34:15.000 A resort fee. 1:34:15.240 --> 1:34:17.439 Yeah, like airline fees. 1:34:17.479 --> 1:34:19.080 So many times you go to a work conference, right, 1:34:19.120 --> 1:34:20.960 and there's like the resort fee that we're never going 1:34:21.040 --> 1:34:21.360 to like. 1:34:21.760 --> 1:34:23.240 I know, it makes you seem like you're at the spot. 1:34:23.320 --> 1:34:23.519 I don't. 1:34:23.720 --> 1:34:25.400 I was concerned about it when I travel for work. 1:34:26.320 --> 1:34:28.719 Okay, So you know what, I have worked at companies 1:34:28.800 --> 1:34:31.000 where you have a very sick perdem and those types 1:34:31.040 --> 1:34:33.479 of things can be really, really sticky, even for business 1:34:33.479 --> 1:34:34.479 paper wars, I will say. 1:34:34.680 --> 1:34:37.200 So Ramsey goes through and talks about airline fees, how 1:34:37.240 --> 1:34:39.320 to avoid them, fees for checking bags, things like that, 1:34:39.720 --> 1:34:43.800 resort fees, currency conversion fees. What's actually I travel a 1:34:43.880 --> 1:34:46.000 lot and I actually never know what to do when 1:34:46.040 --> 1:34:47.960 it says, okay, you're in a foreign country, do you 1:34:47.960 --> 1:34:49.080 want to pay in dollars or do you want to 1:34:49.240 --> 1:34:49.679 do euros? 1:34:49.800 --> 1:34:51.880 You pay in euros exactly. And I didn't know that 1:34:52.000 --> 1:34:54.080 until reading this, because you pay see. 1:34:53.960 --> 1:34:55.040 Right for that version. 1:34:55.120 --> 1:34:56.040 I know what's wrong with them. 1:34:56.479 --> 1:35:00.439 So there he's like, I can't talk to you, nikky. 1:35:00.439 --> 1:35:03.720 It's all like Chris Chris, or I'd go anywhere out 1:35:03.720 --> 1:35:05.120 of the US like, let's be honest. 1:35:05.240 --> 1:35:07.400 You know, we do this funny thing sometimes in our 1:35:07.439 --> 1:35:09.640 department where we have to ask people who sit around us, 1:35:09.680 --> 1:35:10.120 did you know this? 1:35:10.360 --> 1:35:10.479 Is this? 1:35:10.640 --> 1:35:13.559 News? Is this new to you? And dynamic currency these 1:35:13.680 --> 1:35:15.160 is one of the things that I always knew, but 1:35:15.240 --> 1:35:17.360 I took for granted how little known this is and 1:35:18.120 --> 1:35:21.040 I didn't realize exactly why it happens. And so what 1:35:21.120 --> 1:35:24.200 happens is when you pay in dollars, you're automatically being 1:35:24.280 --> 1:35:26.800 charged a convergency that's built into that price, and it's 1:35:26.880 --> 1:35:29.120 usually between two and three percent. And if you pay 1:35:29.200 --> 1:35:31.559 two and three percent extra on all of your expenses 1:35:31.600 --> 1:35:34.520 across your travels, that adds up meaningfully. 1:35:34.920 --> 1:35:35.240 All right. 1:35:35.320 --> 1:35:37.560 There's a lot more advice too, when it comes to 1:35:38.160 --> 1:35:41.320 the value add attacks, which I know about doing, and what. 1:35:41.439 --> 1:35:42.240 About the digital one? 1:35:42.320 --> 1:35:44.479 Through about that kiss? 1:35:44.640 --> 1:35:45.559 Didn't know that one? 1:35:46.600 --> 1:35:51.200 Really great advice. There's also some great coverage on weekender bags. 1:35:51.280 --> 1:35:52.880 Weekender bags, Did I say that correctly? 1:35:53.000 --> 1:35:53.200 Yeah? 1:35:53.200 --> 1:35:53.439 We can. 1:35:53.600 --> 1:35:56.799 Weekender bags some really nice posh ones, to be quite honest. 1:35:57.400 --> 1:36:00.240 And then there's also like those great little cues. My 1:36:00.360 --> 1:36:02.240 daughter's really into that, like when packing, like you put 1:36:02.320 --> 1:36:02.920 them into cubes. 1:36:03.040 --> 1:36:05.320 Packing cubes are a thing that I know that I 1:36:05.360 --> 1:36:08.439 should use, and I don't like. It's like a healthcare FSA, 1:36:08.600 --> 1:36:09.439 Like I know it's. 1:36:09.400 --> 1:36:10.680 A thing that we're supposed to use. 1:36:10.720 --> 1:36:14.800 It can help you with Nikitch, but I just after 1:36:14.880 --> 1:36:17.080 we did this story, I just bought some for my husband. Okay. 1:36:17.439 --> 1:36:19.960 I love that you really I would packing cube your 1:36:20.040 --> 1:36:22.280 belief system. I feel like, can you either live and 1:36:22.360 --> 1:36:24.800 die by your packing cube or it just doesn't work 1:36:24.800 --> 1:36:26.880 for you at all. Not a taking tube person, but 1:36:26.920 --> 1:36:29.280 I know so many people who literally cannot go on 1:36:29.320 --> 1:36:30.759 a trip without putting everything into cube. 1:36:30.800 --> 1:36:32.320 I think it's a good idea. I just haven't done 1:36:32.320 --> 1:36:35.439 it yet. All right, guys, listen, great coverage, great kickoff, 1:36:35.840 --> 1:36:37.439 and so good to be talking with you all again. 1:36:37.520 --> 1:36:40.360 Our thanks to Bloomberg Pursuits editor Chris Rouser and Bloomberg 1:36:40.400 --> 1:36:42.200 News Travels are Nikki Eckstein. 1:36:42.720 --> 1:36:46.240 You're listening to the Bloomberg Business Week podcast. Catch us 1:36:46.320 --> 1:36:49.600 live weekday afternoons from three to six Eastern Listen on 1:36:49.720 --> 1:36:53.720 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 1:36:54.080 --> 1:36:55.719 or watch us live on YouTube. 1:36:56.960 --> 1:36:59.280 The author of the Piece of Into Albright Wealth Team 1:36:59.280 --> 1:37:02.040 reporter for Blouem News. She is on zoom from Kansas, 1:37:02.360 --> 1:37:04.880 and then here in our studio the editor of Bluemberg BusinessWeek, 1:37:05.280 --> 1:37:08.599 Jill Weber. Jill, this feels like a perfect Business Week strue. 1:37:08.640 --> 1:37:10.320 But tell us about how it came. 1:37:10.240 --> 1:37:14.439 To you all, Amanda. So, we have had a number 1:37:14.479 --> 1:37:17.800 of bank failures this year. Obviously, that was the theme 1:37:17.840 --> 1:37:21.240 that we were all over as an institution at Bloomberg 1:37:21.760 --> 1:37:23.439 earlier in the year, and a lot of those were 1:37:23.479 --> 1:37:27.439 the middle size American banks. What stood out about this 1:37:27.640 --> 1:37:32.360 one was Amanda's reporting because it wasn't for the usual 1:37:32.520 --> 1:37:34.280 reasons that we saw with. 1:37:34.439 --> 1:37:37.439 Silicon Flight Bank, or wasn't a bank run. 1:37:37.520 --> 1:37:39.160 It wasn't a bank run, you know, it wasn't any 1:37:39.200 --> 1:37:42.920 of that. It was because the CEO maybe did some 1:37:44.479 --> 1:37:48.280 unwise decisions with crypto, right, Amanda. 1:37:48.160 --> 1:37:51.880 Yes, that's exactly right. And that's one thing that even 1:37:51.920 --> 1:37:55.360 from the jump, people in Kansas stress that this wasn't 1:37:56.000 --> 1:37:59.400 some bigger issue with Kansas banking or something specific to 1:37:59.479 --> 1:38:04.160 the state. Was a very idiosynocratic and specific situation, and 1:38:04.320 --> 1:38:07.560 my reporting definitely supports that as well. So it was 1:38:08.760 --> 1:38:11.960 different from earlier this year, but also a very interesting 1:38:12.040 --> 1:38:13.160 case on its own, all. 1:38:13.040 --> 1:38:15.439 Right, So let's get into the details. Amanda tell us 1:38:15.479 --> 1:38:16.719 about Shan Hayes. 1:38:17.160 --> 1:38:20.200 So he is the CEO of this bank, Heartland tri 1:38:20.280 --> 1:38:24.960 State Bank. He's the longtime CEO. He's worked there and 1:38:25.120 --> 1:38:27.960 different iterations of the bank. Basically, he got his career there. 1:38:28.000 --> 1:38:31.800 He started as an agricultural loan and IT officer at 1:38:31.960 --> 1:38:34.720 a bank under a previous name, and so he is 1:38:34.840 --> 1:38:38.479 really just a kind of towering figure in this very 1:38:38.600 --> 1:38:42.040 very small city in Kansas. I went to the city. 1:38:42.200 --> 1:38:45.280 It's a very far drive, but once you get there, 1:38:45.360 --> 1:38:47.320 everyone kind of knows each other, and so they all 1:38:47.400 --> 1:38:50.120 knew about Shane, and they all knew about the bank. 1:38:50.600 --> 1:38:54.760 They were all still talking about it and all eager 1:38:54.840 --> 1:38:56.519 to talk to a reporter about it, even if they 1:38:56.560 --> 1:38:59.600 didn't want their name used. Everyone was kind of a 1:38:59.680 --> 1:39:02.040 buzz in the town about this, and you know, everyone 1:39:02.080 --> 1:39:04.320 had kind of different Sorry to jump the gun a 1:39:04.320 --> 1:39:06.280 little bit, but everyone had a little bit of different 1:39:06.320 --> 1:39:09.639 reactions about it, which we can definitely talk about. But essentially, 1:39:09.720 --> 1:39:12.519 Shane was this big figure within the community. But he 1:39:12.640 --> 1:39:16.759 was also a pretty important figure within Kansas banking across 1:39:16.840 --> 1:39:20.640 the state bankers in Kansas and surrounding states all know 1:39:20.720 --> 1:39:22.960 who he is because he has this role on the 1:39:23.080 --> 1:39:26.280 Kansas Bankers Association, or he previously had a role in 1:39:26.280 --> 1:39:29.600 the Kansas Bankers Association. He was the chairman, and he 1:39:29.680 --> 1:39:34.120 also worked with the American Bankers Association in different capacities 1:39:34.200 --> 1:39:36.240 for them, and as part of that he would go 1:39:36.600 --> 1:39:39.880 to Capitol Hill. You know, we point out at this story. 1:39:39.640 --> 1:39:41.679 Then blowdown because we want to know what happened. 1:39:41.800 --> 1:39:44.160 Yeah, I mean, how did this guy with so much 1:39:44.200 --> 1:39:49.000 experience find find himself asking one of his customers for 1:39:49.120 --> 1:39:50.400 twelve million dollars in cash? 1:39:50.400 --> 1:39:51.160 How does that happen? 1:39:52.160 --> 1:39:54.880 Yes, I jumped the gun, was excited to talk about 1:39:54.920 --> 1:40:00.519 the story. So it's atory basically one of my basically 1:40:00.640 --> 1:40:04.640 in reporting it, I got a tip that essentially this 1:40:04.840 --> 1:40:08.000 meeting had taken place where the CEO had asked one 1:40:08.040 --> 1:40:13.160 of his wealthiest clients for twelve million dollars. During that meeting, 1:40:14.880 --> 1:40:18.479 Based on my reporting, it's basically he asked if he 1:40:18.520 --> 1:40:20.880 could have twelve million dollars and indicated that it was 1:40:20.960 --> 1:40:25.120 his personal money that was locked up in this crypto 1:40:25.200 --> 1:40:27.479 app and you know, in order to get it out, 1:40:27.880 --> 1:40:29.800 he needed to put more money in and that's kind 1:40:29.840 --> 1:40:33.640 of even though we don't know exactly the specifics of 1:40:33.760 --> 1:40:36.800 how this all came to be with the crypto app 1:40:36.840 --> 1:40:38.360 and how he ended up putting it in and who 1:40:38.439 --> 1:40:40.800 directed him to do that, et cetera, And it might 1:40:40.840 --> 1:40:43.439 take a while to figure that out. But if anyone 1:40:43.560 --> 1:40:45.200 needs my phone number, let me know. 1:40:45.360 --> 1:40:48.400 But it's a good reporter, man. 1:40:50.720 --> 1:40:55.640 They're parallels to pig butchering scams, where you know, he 1:40:55.720 --> 1:40:58.040 said he knew someone who was helping him with crypto 1:40:58.160 --> 1:41:02.679 investments basically, and in pig butchering, usually they find someone 1:41:02.960 --> 1:41:06.240 and they are encouraging them to put money into a 1:41:07.160 --> 1:41:10.599 sometimes fraudulent crypto app. They say, just put a little 1:41:10.600 --> 1:41:12.599 more in and we can get you your money out. 1:41:12.680 --> 1:41:15.120 Maybe there's an issue with taxes or the wired didn't 1:41:15.160 --> 1:41:19.000 go through. Try again, and it's it's really really sad. 1:41:19.320 --> 1:41:19.800 You know, what's it? 1:41:19.920 --> 1:41:22.840 What's it like when you're driving out there and and 1:41:22.920 --> 1:41:25.080 then you you get there and what are the vibes 1:41:25.560 --> 1:41:27.479 in a town like this when something. 1:41:27.320 --> 1:41:27.880 Like this happens. 1:41:28.360 --> 1:41:32.000 Yeah, So the drive out there, I really felt like 1:41:32.080 --> 1:41:34.639 in order to report the story, I needed to go there. 1:41:36.280 --> 1:41:39.960 And you know, it's it's a pretty you know, sparsely 1:41:40.040 --> 1:41:41.679 populated town. It's very. 1:41:43.200 --> 1:41:43.400 Even. 1:41:43.479 --> 1:41:45.639 The layout is very insular, like you can drive around 1:41:45.640 --> 1:41:48.400 all the neighborhoods and it's all kind of connected. Like 1:41:48.479 --> 1:41:50.040 I felt like I was able to get a pretty 1:41:50.080 --> 1:41:52.160 good feel for what the town was like, even just 1:41:52.240 --> 1:41:53.559 being there for like two days. 1:41:54.680 --> 1:41:56.280 People there are so so nice. 1:41:58.040 --> 1:42:00.920 Very few people wanted their name to have anything to 1:42:01.000 --> 1:42:03.120 do with this story because of the sensitivities of it, 1:42:03.680 --> 1:42:06.000 but they were eager to talk about it, like I said, 1:42:06.080 --> 1:42:09.400 because I think, you know, some people are very disappointed 1:42:09.439 --> 1:42:12.160 and upset. Some people are just straight up like they 1:42:12.200 --> 1:42:14.479 want the full scoop, they want to know what happened. 1:42:14.560 --> 1:42:17.960 They're eager for the gossip. So everyone had kind of 1:42:18.040 --> 1:42:21.320 a different perspective, And you know, this is a community 1:42:21.400 --> 1:42:24.479 where everyone kind of knows each other. When I was there, 1:42:24.720 --> 1:42:27.080 I wasn't sure if people like knew that I was 1:42:27.120 --> 1:42:29.240 a stranger, but it did seem like some people kind 1:42:29.280 --> 1:42:31.559 of vibe about me and kind of may have known 1:42:31.600 --> 1:42:34.799 that I was a reporter. So it was really helpful 1:42:34.840 --> 1:42:36.639 to go there and get a sense of the community 1:42:36.720 --> 1:42:40.080 and just how it really is a very kind community. 1:42:40.120 --> 1:42:44.320 And so I think that's why people are very disappointed 1:42:44.800 --> 1:42:47.800 by what happened, because I mean, Shane was part of that, 1:42:47.920 --> 1:42:49.519 He was part of the community. He was known as 1:42:49.560 --> 1:42:51.880 such a nice person, and you know, I talked to 1:42:51.920 --> 1:42:54.439 someone who described him as like assault of the earth 1:42:54.479 --> 1:42:56.720 human being, and I think some people still have that 1:42:56.840 --> 1:42:59.360 view about him. Basically, people want to think the best 1:42:59.400 --> 1:43:01.599 of him in this situation. They want to know if 1:43:01.640 --> 1:43:04.559 he was trying to help the bank. They really want 1:43:04.600 --> 1:43:08.439 to understand, like why this would happen. And so I 1:43:08.520 --> 1:43:10.320 have a feeling this story won't be the last story 1:43:10.320 --> 1:43:13.599 we write about it, because it seems like there's maybe 1:43:13.680 --> 1:43:14.400 more to the story. 1:43:15.320 --> 1:43:19.920 So I'm curious also about so many things in this 1:43:20.080 --> 1:43:22.160 like do we know what kind of crypto it was? 1:43:22.479 --> 1:43:22.519 Like? 1:43:22.840 --> 1:43:25.000 What what you know? 1:43:25.280 --> 1:43:28.240 How long was he potentially involved in this? 1:43:28.320 --> 1:43:30.559 And then also now there's a new bank in town, 1:43:30.840 --> 1:43:33.320 So what's it like to have, you know, a bank 1:43:33.560 --> 1:43:35.840 fixture of this community in the form of Heartland tri 1:43:35.920 --> 1:43:37.840 State Bank, and then all of a sudden, it's like 1:43:37.920 --> 1:43:41.400 crypto scam FDIIC steps in and now we get a new, 1:43:42.120 --> 1:43:44.960 you know, not quite as local bank on your doorstep. 1:43:45.120 --> 1:43:48.280 Definitely, I think that's a big concern within the industry. 1:43:48.640 --> 1:43:51.559 I didn't know this before reporting this, but there's been 1:43:51.600 --> 1:43:54.320 a major consolidation of community banks in the US over 1:43:54.400 --> 1:43:57.200 the past few decades. And so the role that community 1:43:57.320 --> 1:43:59.640 banks play in a town like Elkhart, where you know, 1:43:59.680 --> 1:44:02.280 there's a Bank of America there, they're able to step 1:44:02.360 --> 1:44:06.080 in and provide credit to farmers or local business owners 1:44:06.160 --> 1:44:09.280 that they know personally, and they're able to kind of 1:44:09.600 --> 1:44:13.519 gauge the economic conditions locally there. They're able to gauge, 1:44:13.600 --> 1:44:15.800 you know, whether this person is trustworthy, and if they 1:44:16.240 --> 1:44:17.840 believe in the person, they can give them this loan, 1:44:17.880 --> 1:44:20.960 they'll pay it back. They're able to use like soft 1:44:21.880 --> 1:44:25.360 soft information to kind of develop their lending. And I 1:44:25.479 --> 1:44:28.439 talked to a professor, Jeremy Kress at the University of Michigan, 1:44:28.479 --> 1:44:32.040 who talked about just kind of how there's studies that 1:44:32.120 --> 1:44:34.280 show when you lose a community bank, there's less small 1:44:34.320 --> 1:44:37.760 business lending, there's less wage growth, there's all these like 1:44:37.840 --> 1:44:41.479 knock on effects that happen when a community bank is lost. 1:44:41.520 --> 1:44:43.760 So even though this other bank has come in, they 1:44:43.880 --> 1:44:46.760 said that they're not laying off any employees, you know, 1:44:46.800 --> 1:44:50.840 they basically said it's business as usual. The more that 1:44:50.920 --> 1:44:54.400 this happens. It seems like there are impacts, and I 1:44:54.479 --> 1:44:57.040 think with Elkhart, I would be interested for someone to 1:44:57.120 --> 1:44:59.400 come back in in five years and see did anything 1:44:59.479 --> 1:45:01.920 change with the new owner? How was this affected the 1:45:02.000 --> 1:45:03.160 local economy which. 1:45:03.040 --> 1:45:08.120 Is very very act based, Amanda, I'm wondering what Shane 1:45:08.360 --> 1:45:11.439 Haynes is up to now. You started talking about what 1:45:11.479 --> 1:45:14.880 he was doing before this happened, but what's happened to 1:45:14.960 --> 1:45:15.240 him now? 1:45:17.160 --> 1:45:22.400 He's very quiet. People around town have seen him, and 1:45:22.520 --> 1:45:26.800 I think, you know, they are just as curious as 1:45:26.880 --> 1:45:32.160 me about his perspective on things. But we don't We 1:45:32.240 --> 1:45:36.559 don't really know his view on what happened. 1:45:36.960 --> 1:45:38.839 I mean, do we still not know really what happened? 1:45:39.920 --> 1:45:42.479 Is that safe to say we know what. 1:45:42.560 --> 1:45:44.920 I've been able to report, Sir, I'm being careful with that, No, no, 1:45:45.040 --> 1:45:48.639 I yeah, that's fair. There's still a lot of questions 1:45:48.760 --> 1:45:51.280 like that I have about the story, which is why 1:45:51.320 --> 1:45:55.519 I was joking about people calling me. But you know, 1:45:56.240 --> 1:45:59.519 I'm curious if there was a person who if it 1:46:00.080 --> 1:46:02.240 like some of this is the story of what happened, 1:46:02.280 --> 1:46:06.559 because I've heard from sources, but truly the only person 1:46:06.600 --> 1:46:10.120 who can really speak to the full story is Shane himself. 1:46:10.560 --> 1:46:12.880 You know, if there was actually another person helping him 1:46:12.920 --> 1:46:17.599 do this, I'm curious about that. And so yeah, yeah, 1:46:17.840 --> 1:46:20.640 it's something that I'm now that I've been to Elkhart 1:46:20.760 --> 1:46:23.160 and talk to all these people, I feel very committed 1:46:23.200 --> 1:46:26.120 to like reporting on this, and sorry, parts of the 1:46:26.160 --> 1:46:29.519 story are work in progress, but I definitely think in 1:46:29.640 --> 1:46:33.080 the coming weeks and months, like we'll know more. But 1:46:33.400 --> 1:46:36.200 it seems like more of a sad story than anything 1:46:36.360 --> 1:46:39.960 because people involved who are shareholders or you know, they 1:46:40.040 --> 1:46:42.000 don't seem to think that the shareholders are going. 1:46:42.000 --> 1:46:44.200 To get Yeah, like in a small town like this, 1:46:44.479 --> 1:46:46.760 it just feels like it's a it's a thing that's 1:46:46.800 --> 1:46:49.960 going to probably rock people, and there's gonna be a 1:46:50.040 --> 1:46:52.840 lot of interesting nuance that will play out. 1:46:52.920 --> 1:46:54.519 And obviously, like there are. 1:46:54.520 --> 1:46:57.200 Elements of the story that remain sort of a mystery 1:46:57.240 --> 1:47:00.320 and we'll see what some of this ongoing sort of 1:47:00.400 --> 1:47:03.320 investigative kind of qualities on Earth is. 1:47:04.360 --> 1:47:07.880 Is Amanda going to be finding herself driving on Route 1:47:07.880 --> 1:47:08.400 fifty six. 1:47:08.479 --> 1:47:13.120 I mean, Amanda, Joel, You've got you know, some some 1:47:13.280 --> 1:47:16.600 cornfields to cover there, you know, so you just just 1:47:16.720 --> 1:47:18.799 keep driving driving west I guess. 1:47:18.800 --> 1:47:20.720 This is Joel's face, Amanda. This is Joel's favorite place 1:47:20.760 --> 1:47:22.559 to assigned stories live on air. 1:47:22.680 --> 1:47:23.200 Just a HEADSETE. 1:47:23.200 --> 1:47:28.680 It's good that you're nearby, right, So yeah, it's to me, 1:47:28.800 --> 1:47:31.360 it's just like it is an amazing story. Obviously, bank 1:47:31.400 --> 1:47:33.840 failures have been a thing this year, and like here 1:47:33.880 --> 1:47:36.920 we are yet again, only for slightly different, different circumstances. 1:47:37.000 --> 1:47:41.639 We don't usually see this combination of things together in America. 1:47:41.720 --> 1:47:43.800 Well, I think anyway, what stuck out to me so 1:47:43.920 --> 1:47:46.519 much about this story, Joel is the fact that this 1:47:46.720 --> 1:47:50.200 person was not only in financial services, but it was 1:47:50.280 --> 1:47:52.800 the head of a bank. And you don't speak it right, 1:47:53.000 --> 1:47:54.680 and then you don't think about people who fall for 1:47:54.800 --> 1:47:58.280 things like this as being you know, this quote unquote sophisticated. 1:47:58.320 --> 1:47:59.720 But it shows you know, again again we don't know 1:47:59.760 --> 1:48:02.240 the d tales of what it is, but that cryptoscams 1:48:02.280 --> 1:48:03.720 can hit anyone, and in. 1:48:03.800 --> 1:48:05.680 A small town like this, where you know, it's a 1:48:06.000 --> 1:48:09.800 kind of a fixture of the community. And Amanda also 1:48:09.880 --> 1:48:15.479 did some great reporting in the story about how vocal 1:48:15.560 --> 1:48:17.960 he was in d C about the importance of having 1:48:18.040 --> 1:48:22.639 these small hometown style banks and and you know, in general, 1:48:22.720 --> 1:48:25.120 when we start to lose that element, I think there's 1:48:25.320 --> 1:48:28.519 you just that's part of America, right, like it's it's 1:48:28.560 --> 1:48:30.719 a wonderful life, right, Like that's what we do here. 1:48:30.800 --> 1:48:33.599 Right, and so important to communities. I was also thinking, Amanda, 1:48:33.800 --> 1:48:35.600 you know, Thanksgiving and the holidays are going to be 1:48:35.680 --> 1:48:38.880 fun around the Haynes family, right because there were a 1:48:38.920 --> 1:48:42.200 lot of family members that were shareholders in that bank, 1:48:42.760 --> 1:48:45.000 and that makes it you know, you've got you know, 1:48:45.120 --> 1:48:47.679 you know the depositors, right, they're going to be they're 1:48:47.680 --> 1:48:49.960 going to be made whole because of the fdi C. 1:48:50.720 --> 1:48:53.400 But if you were a shareholder in the bank, that 1:48:53.560 --> 1:48:55.240 was a different story exactly. 1:48:55.360 --> 1:48:59.320 I feel like that's where the tragedy of the story lies. 1:48:59.400 --> 1:49:03.680 And also that tension because you know, the shareholders all 1:49:03.760 --> 1:49:06.120 know each other, their neighbors, they've known each other for 1:49:06.160 --> 1:49:08.680 a long time, and a lot of them, this was 1:49:08.760 --> 1:49:10.360 just something I picked up while I was in town, 1:49:10.560 --> 1:49:14.680 was a lot of them are ones that are not 1:49:14.960 --> 1:49:18.720 named in the FED document. They my reporting indicates that 1:49:18.760 --> 1:49:21.240 a lot of them might be older women who are retirees, 1:49:22.320 --> 1:49:25.680 maybe widowers, And it's just tragic because imagine if you 1:49:25.760 --> 1:49:27.880 put your four oh one k or. You know, you 1:49:27.960 --> 1:49:31.240 put them in this bank stock and you trusted, you 1:49:31.320 --> 1:49:33.320 trusted what you were investing in because you know the 1:49:33.360 --> 1:49:36.880 people involved. And I think that's where this story is 1:49:37.040 --> 1:49:38.640 just very, very sad and. 1:49:39.280 --> 1:49:40.800 Goes back to the importance of what Jill, what you 1:49:40.840 --> 1:49:42.439 were talking about this. You know, you have these small 1:49:42.479 --> 1:49:45.000 banks and these small ears of the of the country, 1:49:45.080 --> 1:49:46.160 and they're really important. 1:49:46.560 --> 1:49:48.120 Just if I come to you and I'm like, hey, 1:49:48.200 --> 1:49:51.000 I need twelve million dollars for a week, I'll get 1:49:51.040 --> 1:49:51.679 you one million. 1:49:51.720 --> 1:49:53.120 I'm good for it. Just say no. 1:49:53.280 --> 1:49:54.840 Well, if I had twelve million dollars to give you, 1:49:55.800 --> 1:49:57.640 no offense, but I wouldn't be hanging out with you. 1:49:57.680 --> 1:49:57.880 Guys. 1:50:00.080 --> 1:50:03.439 Amazing story. We hope the phone starts ringing off the commando. 1:50:03.479 --> 1:50:06.280 All right, Wealth Team reporter for Bloomberg News and Jel Webber. 1:50:06.400 --> 1:50:06.680 Thank you. 1:50:07.479 --> 1:50:12.080 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:50:12.280 --> 1:50:15.960 and anywhere else you get your podcasts. Listen live weekday 1:50:16.000 --> 1:50:19.439 afternoons from three to six Eastern on Bloomberg dot Com, 1:50:19.680 --> 1:50:22.960 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:50:23.040 --> 1:50:25.960 You can also watch us live every weekday on YouTube 1:50:26.240 --> 1:50:28.200 and always on the Bloomberg terminal