WEBVTT - Bloomberg Businessweek Weekend - March 29th, 2024 0:00:01.360 --> 0:00:05.720 This is Bloomberg business Week inside from the reporters and 0:00:05.920 --> 0:00:09.719 editors who bring you America's most trusted business magazine. 0:00:09.160 --> 0:00:12.040 Plus gloom War, business finance, and tech news. 0:00:12.200 --> 0:00:16.319 The Bloomberg Business Week Podcast with Carol Messer and Tim 0:00:16.360 --> 0:00:18.680 Stenebeck from Bloomberg Radio. 0:00:20.120 --> 0:00:22.919 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:23.400 --> 0:00:25.400 It was a shortened trading week thanks to the Good 0:00:25.400 --> 0:00:28.600 Friday holiday, and yet jam packed with lots of US 0:00:28.640 --> 0:00:32.480 economic data, including the Fed's favorite take on inflation. Check 0:00:32.479 --> 0:00:35.160 out all of the data and analysis on the Bloomberg 0:00:35.240 --> 0:00:36.520 End at Bloomberg dot com. 0:00:36.560 --> 0:00:38.360 For us, we got to take on the economy and 0:00:38.479 --> 0:00:41.920 health of the lending environment courtesy of two bank CEOs, 0:00:42.159 --> 0:00:46.159 one super small and one a large cap publicly traded company. 0:00:46.280 --> 0:00:48.879 Also this week, tons of Boeing news changes in the 0:00:48.920 --> 0:00:51.640 c suite, including CEO Dave Calhoun stepping down at the 0:00:51.760 --> 0:00:54.160 end of the year. A take on Boeing and much 0:00:54.240 --> 0:00:57.440 much more from Grace Blakely, the author of Vulture Capitalism. 0:00:57.480 --> 0:00:59.720 All that to com We begin, though, with former President 0:00:59.760 --> 0:01:03.040 Dom Trump, who was in the news this week because 0:01:03.040 --> 0:01:05.520 his first criminal trial is set to start April fifteenth 0:01:05.560 --> 0:01:08.240 in Manhattan, and his bond was slashed by more than 0:01:08.240 --> 0:01:11.199 two thirds on another lawsuit, this his New York civil 0:01:11.240 --> 0:01:14.880 fraud case that handed him a crucial financial lifeline. And 0:01:14.920 --> 0:01:18.000 then there was his fortune on paper vaulting thanks to 0:01:18.080 --> 0:01:21.039 his newly public social media company. There's a lot of 0:01:21.040 --> 0:01:24.679 news carol on the former president and current Republican frind Runner. 0:01:24.680 --> 0:01:27.640 I mean, he's pretty much locked up the nomination, not officially. 0:01:27.240 --> 0:01:28.880 But yes, safe to say. 0:01:29.200 --> 0:01:30.840 I got to say, though, what will caught our attention 0:01:30.920 --> 0:01:32.920 about all of this is that a group of very 0:01:32.920 --> 0:01:35.200 well known Wall Street in Silicon Valley folks who are 0:01:35.600 --> 0:01:39.399 either overtly or quietly embracing the GOP nominee for president 0:01:39.520 --> 0:01:42.640 and the prospect of returning to the political turbulence of 0:01:42.720 --> 0:01:43.600 the Trump era. 0:01:43.959 --> 0:01:47.280 Brad Stone wrote the story. He's the editor of Bloomberg BusinessWeek. 0:01:47.280 --> 0:01:50.000 He's also the author of several books, including a couple 0:01:50.040 --> 0:01:54.120 on Amazon, The Everything Store and Amazon Unbound. Brad's story 0:01:54.160 --> 0:01:56.640 featured in the new issue of BusinessWeek magazine. It's available 0:01:56.640 --> 0:01:59.320 on newstands, on the Bloomberg terminal and at Bloomberg dot 0:01:59.320 --> 0:02:01.120 comlash business Week I. 0:02:01.040 --> 0:02:03.200 Was calling it the revolt of the Winners and this 0:02:03.480 --> 0:02:08.320 very conspicuous support among business leaders in tech and primarily 0:02:08.360 --> 0:02:12.200 on Wall Street for former President Trump. And as Tim described, 0:02:12.240 --> 0:02:14.880 there are kind of two brands of support. 0:02:15.000 --> 0:02:16.880 There's the overt support, and. 0:02:16.800 --> 0:02:20.600 So you've got Howard Lutnik of Canter Fitzgerald and John Poulsen, 0:02:22.720 --> 0:02:28.000 the hedge fund owner holding fundraisers for Trump, Nelson Peltz, 0:02:28.240 --> 0:02:34.120 Disney Foyle who endorse Trump recently, and then the more 0:02:34.320 --> 0:02:38.160 subtle forms of support. Ken Griffin from Citadel saying on 0:02:38.200 --> 0:02:40.440 TV that Trump would be good for the capital markets, 0:02:40.560 --> 0:02:44.200 and of course Elon musk on the service formerly known 0:02:44.200 --> 0:02:48.200 as Twitter almost every single day, suggesting that he's moving 0:02:48.440 --> 0:02:52.320 in a right word direction and hasn't endorsed Trump, but 0:02:52.520 --> 0:02:54.960 it is certainly putting a lot of distance between him 0:02:55.000 --> 0:02:56.040 and the current president. 0:02:56.560 --> 0:02:58.920 And as you mentioned the piece, you know he's saying, 0:02:59.000 --> 0:03:01.320 Elon muskang he has an and you won't donate to 0:03:01.320 --> 0:03:04.079 any political candidates. But certainly a lot can happen between 0:03:04.080 --> 0:03:08.040 now and November fifth, Brad. So what happened in terms 0:03:08.040 --> 0:03:11.000 of this transformation for some of these folks over the 0:03:11.080 --> 0:03:15.280 last four years. There were quite a few after January 0:03:15.360 --> 0:03:18.919 sixth who came out and distanced themselves from the former president. 0:03:19.240 --> 0:03:21.399 What has happened in your view over the last four 0:03:21.480 --> 0:03:24.240 years or over the last year to move people back 0:03:24.280 --> 0:03:25.600 to former President Trump. 0:03:25.760 --> 0:03:27.600 Yeah, No, I mean I think look, and there are 0:03:27.600 --> 0:03:30.240 plenty of business leaders who are moving in the opposite 0:03:30.280 --> 0:03:33.960 direction and endorsing or supporting President Biden. And maybe in 0:03:33.960 --> 0:03:35.520 a future column I'll look at that. 0:03:36.120 --> 0:03:38.240 But there is this movement. 0:03:38.440 --> 0:03:40.760 Another great example is Jeff Yass by the way, from 0:03:40.760 --> 0:03:47.080 Susquehanna International, the Pennsylvania billionaire who may or may not 0:03:47.280 --> 0:03:49.600 own a portion of the company that has merged with 0:03:49.680 --> 0:03:53.080 Truth Social had given Trump a potential lifeline. He was 0:03:53.120 --> 0:03:55.920 once a never Trumper and is now certainly making some 0:03:56.040 --> 0:03:59.240 news favorable to the former president. So look, I mean, 0:03:59.440 --> 0:04:01.960 I try to diagnose what's going on here. I mean, 0:04:02.000 --> 0:04:04.640 I think there's a couple things. You know, in the 0:04:05.080 --> 0:04:08.560 in the case of Jeff Yasts, maybe this is very transactional. 0:04:08.640 --> 0:04:12.040 You know, Trump has reversed his position of TikTok Yes 0:04:12.160 --> 0:04:14.920 is a major owner of Byte Dance. I do think 0:04:14.920 --> 0:04:17.520 there's a sort of material concern here with some of 0:04:17.560 --> 0:04:21.840 these billionaires looking at at Biden's economic and taxation policies 0:04:21.920 --> 0:04:25.440 and and and the idea that Biden raised in the 0:04:25.480 --> 0:04:29.359 State of the Union to to instate a billionaire tax, 0:04:29.640 --> 0:04:32.520 to increase the corporate tax rate, to roll back the 0:04:32.600 --> 0:04:36.040 higher end of some of the Trump tax cuts. There's 0:04:36.080 --> 0:04:40.400 Biden's antitrust agenda. There's the pro labor stance, and the 0:04:40.480 --> 0:04:45.160 fact that Sean Fayne from the UAW was was a 0:04:45.160 --> 0:04:46.800 guest of the White House during the State of the 0:04:46.880 --> 0:04:50.479 Union and recognized by the President. And you know, to 0:04:50.520 --> 0:04:53.039 somebody like Elon Musk who runs a non union shop, 0:04:53.120 --> 0:04:56.920 these are existential concerns. So I think we can get 0:04:56.920 --> 0:04:59.120 into what some of the emotional reasons might be, but 0:04:59.200 --> 0:05:02.200 those are perhaps some of the rational decision making that's 0:05:02.240 --> 0:05:02.960 going on right now. 0:05:03.000 --> 0:05:04.960 And I totally get the rational side. I love when 0:05:05.000 --> 0:05:07.240 you get into kind of the more emotional side of like, 0:05:07.279 --> 0:05:09.960 these guys are disruptors and they like when things kind 0:05:09.960 --> 0:05:12.680 of get it feels like unsettling. Talk about that kind 0:05:12.720 --> 0:05:15.360 of thinking and why they may be providing support for 0:05:15.720 --> 0:05:16.400 Donald Trump. 0:05:16.920 --> 0:05:19.680 Yeah, you know, I don't want to get too far 0:05:19.800 --> 0:05:23.520 into the psychologist's office with this analysis, but I think, 0:05:23.680 --> 0:05:26.520 you know, to some extent, they feel like Biden. You know, 0:05:26.640 --> 0:05:30.279 maybe the Biden administration victimized them a little bit, ran 0:05:30.480 --> 0:05:34.159 against the one percent or the point one percent, so 0:05:34.160 --> 0:05:38.320 they don't feel recognized. I think this maybe reassessment of 0:05:38.400 --> 0:05:41.840 tech power in Wall Street power over the last decade, 0:05:42.200 --> 0:05:43.680 you know, left them feeling. 0:05:43.440 --> 0:05:45.040 A little victimized. 0:05:46.360 --> 0:05:49.520 And yeah, and then there's the sense of being contrarians, 0:05:49.600 --> 0:05:52.680 being disruptors. You know, Peter Thild made this contrarian bet 0:05:53.200 --> 0:05:57.200 in twenty sixteen, and you know, to a certain extent 0:05:57.240 --> 0:05:59.120 that backfired on him, but he got a lot of 0:05:59.200 --> 0:06:01.000 mileage out of it, and he had the ear of 0:06:01.040 --> 0:06:04.400 the president back in twenty sixteen. So perhaps some of 0:06:04.440 --> 0:06:08.760 these business leaders are billionaires, see where the political wins 0:06:08.800 --> 0:06:11.520 are shifting and want to have the ear of someone 0:06:11.520 --> 0:06:16.400 who they think, despite you know, the arguments for against, 0:06:16.480 --> 0:06:19.240 it's someone you know, who they might think has a 0:06:19.279 --> 0:06:21.920 shot of winning the next election, and so they're trying 0:06:21.960 --> 0:06:23.920 to get on that side of history. I think probably 0:06:24.160 --> 0:06:26.400 for a lot of these folks, there are different reasons. 0:06:27.560 --> 0:06:30.880 But you know, I don't think that we can dismiss 0:06:30.920 --> 0:06:33.760 the pure capitalism here and the idea that some of 0:06:33.760 --> 0:06:37.080 these folks just see a better tax regime and perhaps 0:06:37.120 --> 0:06:38.800 anti trust regime under Trump. 0:06:38.640 --> 0:06:41.240 Yeah, let's talk about the anti anti trust regime, because 0:06:41.560 --> 0:06:44.520 that is one area where President Biden has you know, 0:06:44.720 --> 0:06:48.080 been I think, in his view pretty successful at this point. 0:06:48.240 --> 0:06:50.360 That's certainly a part of it, Brad. But I do 0:06:50.440 --> 0:06:53.720 wonder to what extent, you know, how these folks did 0:06:53.720 --> 0:06:56.440 over the last four years during President Biden, because Carol 0:06:56.440 --> 0:06:58.279 and I were talking about this so a little earlier, 0:06:58.279 --> 0:06:59.960 as we were preparing for this, and we're thinking to 0:07:01.040 --> 0:07:04.520 talking with each other. Well, it's not necessarily like, you know, yes, 0:07:04.560 --> 0:07:06.400 there was some rhetoric in the State of the Union, 0:07:06.480 --> 0:07:08.599 but it's not like there were policies put in place 0:07:08.600 --> 0:07:11.000 that actually hurt these folks who you write about. 0:07:12.280 --> 0:07:14.000 Yeah, and I guess that's the question I had. 0:07:14.040 --> 0:07:18.160 You know, the markets are going to determine a lot 0:07:18.160 --> 0:07:22.320 of the financial success for some of these figures. I mean, 0:07:22.360 --> 0:07:25.280 you look at like Larry Ellison of Oracle, who has 0:07:25.320 --> 0:07:30.000 been reported to be dining with President Trump as Trump 0:07:30.040 --> 0:07:34.840 looks to improve his fundraising status, and you know, like 0:07:35.680 --> 0:07:39.400 the markets like predictability and what we do know, again, 0:07:39.440 --> 0:07:41.720 I'm trying not to be political here in my analysis, 0:07:41.760 --> 0:07:43.920 but what we do know is that you know, President 0:07:43.960 --> 0:07:47.400 Trump historically and certainly it seems on the compantrail brings 0:07:47.440 --> 0:07:49.920 an element of unpredictability. 0:07:49.040 --> 0:07:51.240 And chaos, and the markets don't like that. 0:07:51.600 --> 0:07:53.640 So I do think that, you know, some of these 0:07:53.840 --> 0:07:57.040 business leaders are trying to be opportunistic and they're embracing 0:07:57.120 --> 0:08:00.320 an agent of chaos, and it will be interesting to 0:08:00.360 --> 0:08:04.280 see where that support goes, whether it waivers as we 0:08:04.320 --> 0:08:07.360 get into the real campaign season, or people are paying 0:08:07.360 --> 0:08:11.040 attention and where the former president hasn't necessarily been as 0:08:11.040 --> 0:08:13.320 scripted as perhaps some of his handlers would like. 0:08:13.480 --> 0:08:16.520 I love this line in your story. In your reporting, Brad, 0:08:16.600 --> 0:08:21.280 you say billionaires aren't all that different from Trump's main constituency, 0:08:21.640 --> 0:08:25.239 constituency of less educated, working class white households. Both groups 0:08:25.240 --> 0:08:27.880 tend to see a conspiracy by far off elites who 0:08:27.880 --> 0:08:31.600 are out to deprive them of influence, expropriate their money, 0:08:31.640 --> 0:08:35.120 and squander America's advantage abroad. Like it's interesting to see 0:08:35.520 --> 0:08:40.480 make that connection between those two groups, But I don't know, 0:08:40.520 --> 0:08:42.360 it's just kind of very interesting and fascinating, right. We 0:08:42.360 --> 0:08:44.559 could bring a lot of therapists and psychologists on this one, 0:08:44.600 --> 0:08:46.280 but it's fascinating that connection. 0:08:47.480 --> 0:08:51.120 It's one thing that I had never seen before and 0:08:51.280 --> 0:08:54.360 don't necessarily know how to interpret which is the sort 0:08:54.400 --> 0:08:56.440 of venom that's out there. And maybe I'm paying too 0:08:56.480 --> 0:09:00.480 much attention to social media among certain elites, for other elites, 0:09:00.520 --> 0:09:03.440 for academic leaders. I mean, this was came clear in 0:09:03.480 --> 0:09:08.160 the battle against Harvard's Harvard's president by Wall Street leaders 0:09:08.200 --> 0:09:12.520 like Bill Ackman, and this idea to scramble for influence. 0:09:13.160 --> 0:09:15.560 There's a great book which I'll recommend, Carroll. I know 0:09:15.559 --> 0:09:18.360 you're a big reader, but a book called End Times 0:09:18.400 --> 0:09:22.920 by Peter Turchin, where he actually somewhat apocalyptically describes the 0:09:23.040 --> 0:09:26.640 end of regimes across centuries. And one of the telling 0:09:26.840 --> 0:09:30.439 tales of moments of instability has been when the elites 0:09:30.480 --> 0:09:33.319 start competing each other and battling for influence. So I 0:09:33.559 --> 0:09:35.760 don't know, maybe that's a little bit of a downer 0:09:35.800 --> 0:09:37.160 note to introduce, but I. 0:09:37.080 --> 0:09:39.760 Feel like sounds like a sweet movie and competitors. 0:09:40.400 --> 0:09:44.200 We're not going to end on that note. Okay, we're 0:09:44.320 --> 0:09:48.960 going to I'm going to throw Look, the election can 0:09:49.000 --> 0:09:50.679 go anyway. We have no idea how it's going to 0:09:50.760 --> 0:09:53.960 go between now and November fifth, but we do know, 0:09:54.000 --> 0:09:55.840 and we do know that money plays a big role 0:09:55.880 --> 0:09:58.880 in politics. But does the support of the folks you 0:09:58.880 --> 0:10:01.360 write about Brad any idea if it actually moves the 0:10:01.400 --> 0:10:03.920 needle when it comes to what matters, which of course 0:10:04.000 --> 0:10:07.479 is turnout and votes in these swing states well. 0:10:07.280 --> 0:10:11.360 And and fundraising obviously does matter. And I'm not an 0:10:11.360 --> 0:10:13.280 expert in this, but you know, from what I read, 0:10:14.000 --> 0:10:17.319 President Biden is out raising Trump, and I think that's 0:10:17.360 --> 0:10:19.840 one of the reasons why the Trump campaign has out 0:10:20.120 --> 0:10:24.760 been there soliciting, either soliciting donations or having conversations with 0:10:24.840 --> 0:10:28.160 folks like Larry Ellison and jeff Yass. And I don't 0:10:28.240 --> 0:10:30.600 know that any of them have necessarily stepped up. I 0:10:30.640 --> 0:10:34.839 mentioned the fundraiser that Lutnik and Paulson were holding I 0:10:34.840 --> 0:10:39.040 think beginning at next month, whether that support translates to 0:10:39.160 --> 0:10:40.239 the ballot box. 0:10:40.000 --> 0:10:43.440 I mean Trump, the Trump campaign has to be careful. 0:10:43.200 --> 0:10:46.200 Right, because you don't you don't want to necessarily turn 0:10:46.240 --> 0:10:51.080 off your broad base of supporters, working class supporters by 0:10:51.160 --> 0:10:55.440 trumpeting your billionaire support. So it's a careful line that 0:10:55.480 --> 0:10:57.240 they've got to they've got to walk right. 0:10:57.280 --> 0:10:59.120 And also in an industry, I feel like the tech 0:10:59.120 --> 0:11:01.120 world really knows how to play well with their enemies, 0:11:01.160 --> 0:11:03.400 their frenemies that they often work with. So could they 0:11:03.440 --> 0:11:06.440 just be hedging as you end the story, Brad in 0:11:06.559 --> 0:11:09.000 terms of the outcome, a really great read and a 0:11:09.000 --> 0:11:12.160 really timely read. Brad, thank you really appreciate Bradstone, of course, 0:11:12.200 --> 0:11:13.679 the editor of Bloomberg BusinessWeek. 0:11:14.400 --> 0:11:17.920 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:17.960 --> 0:11:21.199 live weekday afternoons from two to five pm Easter Listen 0:11:21.240 --> 0:11:23.400 on Apple card Play and then brought auto with a 0:11:23.440 --> 0:11:27.559 Bloomberg Business act or want us live on YouTube. 0:11:27.880 --> 0:11:31.880 There's a problem. We've got a plumbing problem, and Carol, 0:11:31.920 --> 0:11:33.920 it's a cost that all of us are paying for 0:11:34.280 --> 0:11:36.760 just bite an above average salary. The pace at which 0:11:36.800 --> 0:11:40.240 the US is minting new plumbers is lagging retirements. The 0:11:40.320 --> 0:11:43.400 widening plumber deficit matters for households facing hefty charges to 0:11:43.440 --> 0:11:46.040 fix a leak. I think we've probably all been there totally. 0:11:46.120 --> 0:11:48.400 That costs what and business is trying to get new 0:11:48.400 --> 0:11:50.760 buildings completed on time and on budget. In fact, the 0:11:50.800 --> 0:11:54.000 plumbing deficit costs the US economy a whopping thirty three 0:11:54.040 --> 0:11:57.360 billion dollars in twenty twenty two. That's according to one analysis. 0:11:57.600 --> 0:11:59.960 We know all of this because Bloomberg News Global economy 0:12:00.040 --> 0:12:02.680 reporter and the Current writes about it for Bloomberg Business Week. 0:12:03.040 --> 0:12:05.720 It's the far reaching consequences of the US plumbing problem. 0:12:06.000 --> 0:12:09.120 He joins us from Washington, DC and Carol and I 0:12:09.120 --> 0:12:11.800 could not get enough of this story. Love it. And 0:12:11.800 --> 0:12:13.959 it's also something that we talk about a lot because 0:12:14.559 --> 0:12:16.800 we know how much it costs to hire a plumber. 0:12:17.360 --> 0:12:19.440 What is it about the plumbing industry that's sort of 0:12:19.600 --> 0:12:22.559 emblematic of the worker shortage that we're facing here in 0:12:22.600 --> 0:12:23.040 the US. 0:12:23.280 --> 0:12:26.400 So there are some specific kind of stigma issues around plumbing. 0:12:26.800 --> 0:12:29.080 I mean, as you know, it's such an important function 0:12:29.120 --> 0:12:31.200 that goes to the heart of our daily activities and 0:12:31.200 --> 0:12:34.840 our economy. Without plumbers, we don't have clean drinking. 0:12:34.559 --> 0:12:35.360 Water, for example. 0:12:35.679 --> 0:12:38.640 But speaking to those in the profession, the teachers and 0:12:38.679 --> 0:12:41.600 the young students who are starting on their career there, 0:12:42.559 --> 0:12:45.280 they say that it just doesn't have the appeal of 0:12:45.360 --> 0:12:49.080 o our roles because it's tough physical labor. For example, 0:12:49.640 --> 0:12:51.680 I spoke to one young plimmer who gave example of 0:12:51.679 --> 0:12:54.040 having to dig a trench in the open in the 0:12:54.040 --> 0:12:57.839 middle of summer one day, having started at five am 0:12:57.880 --> 0:13:00.880 that morning. It's seen as dirty work, perception of lying 0:13:00.880 --> 0:13:04.640 on your back fixing someone's toilet. And of course the 0:13:05.120 --> 0:13:07.960 hours aren't hours can vary, but they're not seeing as 0:13:08.000 --> 0:13:11.440 especially social compared to other roles. So when you throw 0:13:11.480 --> 0:13:14.280 all that into it and consider them this conditioning of 0:13:14.800 --> 0:13:18.079 younger people over the decades that they should gravitate towards 0:13:18.080 --> 0:13:21.360 the university away from the trades, the end res of 0:13:21.360 --> 0:13:23.800 speaking to those people in the industry is that the 0:13:24.280 --> 0:13:27.800 skilled trades like plumbing just don't feature very highly on 0:13:27.840 --> 0:13:31.080 the wish list for young students these days. In school 0:13:31.120 --> 0:13:34.280 they much prefer the university education. But the pitches you 0:13:34.280 --> 0:13:36.400 can become a plumber, get a good job, I'll have 0:13:36.480 --> 0:13:37.280 much less debt. 0:13:37.760 --> 0:13:40.520 Well, how quickly can you become a plumber and electrician? 0:13:40.559 --> 0:13:44.440 Because my understanding, And we'll sometimes have someone come into 0:13:44.440 --> 0:13:46.600 our home and it's like they've got an apprentice with them. 0:13:46.800 --> 0:13:50.359 Who has to do that for I thought a substantial 0:13:50.360 --> 0:13:52.880 period of time. But set the record straight, because is 0:13:52.880 --> 0:13:56.000 that part of the problem, That is it just taking 0:13:56.040 --> 0:13:58.199 too long to train them or allow these folks to 0:13:58.280 --> 0:13:59.320 kind of go out on their own. 0:14:00.040 --> 0:14:02.600 It is. It's a process. It's a five year process. 0:14:03.120 --> 0:14:06.800 That kind of yeah, you know, rotates between the practical 0:14:06.920 --> 0:14:10.640 laboratory work and the tuition in the school and at 0:14:10.640 --> 0:14:14.520 the same time being attached to an actual licensed plumber. 0:14:14.640 --> 0:14:15.400 So over the course, for. 0:14:15.480 --> 0:14:18.640 It is five years before they get their full certification, 0:14:18.920 --> 0:14:22.640 but along the way their wages will be increasing, and 0:14:22.880 --> 0:14:25.320 as I mentioned earlier, they are not accruing the debt 0:14:25.400 --> 0:14:27.560 they would be to have to get a you know, 0:14:27.920 --> 0:14:30.360 a life skill or trade in some other part of life. 0:14:30.480 --> 0:14:32.280 The end result when you do come out of it, 0:14:32.360 --> 0:14:36.040 you couldn't get a good job, well paying and potentially 0:14:36.080 --> 0:14:36.920 for life if you want to. 0:14:37.080 --> 0:14:38.800 That's what I wanted to hit on here is we 0:14:38.880 --> 0:14:41.400 talked so much about the student loan crisis here in 0:14:41.440 --> 0:14:44.120 the US, and I mean, my jow just drops when 0:14:44.120 --> 0:14:46.280 I talk to parents about the cost of college for 0:14:46.360 --> 0:14:48.600 their kids right now. I mean, we're talking upwards of 0:14:48.720 --> 0:14:52.160 sixty to ninety thousand dollars per year for a cost 0:14:52.160 --> 0:14:55.080 of college here in the US at some schools. And 0:14:55.480 --> 0:14:58.680 you did some looking into the apprenticeship programs some schools 0:14:58.680 --> 0:15:02.200 for this stuff. Who does it have costing total for 0:15:02.240 --> 0:15:03.320 a five year program? 0:15:03.400 --> 0:15:05.280 So let me give you the example of the plumbers 0:15:05.320 --> 0:15:08.240 and gas Fitters Local five apprenticeship school. Forgive me the 0:15:08.280 --> 0:15:09.760 seeded to read it out to get the name right. 0:15:10.040 --> 0:15:13.920 I went to that school and they pay the tuition 0:15:14.080 --> 0:15:17.360 of the students. The money comes from both the unions and. 0:15:17.400 --> 0:15:20.560 There they pay the tuition. Say that again, they pay. 0:15:20.520 --> 0:15:22.720 The situation for the students for the five years, and 0:15:22.760 --> 0:15:27.000 the students need only pay fifteen hundred US dollars each 0:15:27.240 --> 0:15:30.720 over the course of the five years. But they are 0:15:30.760 --> 0:15:32.680 also required to buy a pair of boots and the 0:15:32.760 --> 0:15:36.120 measuring tape. And this is what when you know, speak 0:15:36.120 --> 0:15:37.840 to the teachers and the students out there. This is 0:15:37.840 --> 0:15:39.880 a great appeal for them. Like you mentioned, you've got 0:15:39.880 --> 0:15:42.200 this whole political debate going on about students dead, and 0:15:42.240 --> 0:15:44.760 you have the legacy of students. 0:15:44.400 --> 0:15:47.000 Trying to pay off that debt. Well, here's a walk 0:15:47.040 --> 0:15:48.040 of life where you can go in. 0:15:47.960 --> 0:15:51.040 Get a good qualification, get a good skill set that 0:15:51.120 --> 0:15:53.640 does go beyond fixing totals by the way, and then come. 0:15:53.560 --> 0:15:55.800 Out of it relatively debt free and with a good salary. 0:15:56.000 --> 0:15:59.840 So obviously the pre apprenticeship courses that you looked into 0:16:00.520 --> 0:16:02.400 are just overflowing with students right. 0:16:02.640 --> 0:16:05.000 Well, this is where this is where the rubber hits 0:16:05.000 --> 0:16:05.280 the road. 0:16:05.360 --> 0:16:07.960 So I cited an example of a brand new a 0:16:08.000 --> 0:16:10.640 pre apprenticeship program that has been put on by community 0:16:10.680 --> 0:16:15.160 college in Maryland to deliberately attract young people to become plumbers. 0:16:15.840 --> 0:16:20.560 It's a well crypt brand new laboratory. They have eighteen 0:16:20.640 --> 0:16:25.280 seats and they have three students who have enrolled. And 0:16:25.320 --> 0:16:28.960 this is what speaks to the idea of the diplomber shortage, 0:16:29.000 --> 0:16:31.400 why people just aren't necessarily being attracted to. And again 0:16:31.520 --> 0:16:33.600 you speak to the plumbers and the teachers, they say, 0:16:33.600 --> 0:16:36.920 you've got to go into middle school upwards and condition 0:16:37.120 --> 0:16:40.400 children that A it's good to have a skill. B 0:16:40.920 --> 0:16:44.040 you don't have to it's not all about university. And 0:16:44.080 --> 0:16:46.720 then see they're making the point that schools also have 0:16:46.760 --> 0:16:49.240 to have practical classes now like would work for example, 0:16:49.280 --> 0:16:51.600 allow students to do that, and then along the way 0:16:51.600 --> 0:16:54.960 they can make up their mind whether it's university or trade. 0:16:55.000 --> 0:16:55.720 You know what they need. 0:16:56.120 --> 0:16:59.440 They just need more plumbing influencers. Okay, I'm not joking. 0:16:59.480 --> 0:17:01.680 I heard I heard Paul Brennan laugh. This is not 0:17:01.720 --> 0:17:03.960 a joke. But this is like a thing on TikTok 0:17:04.000 --> 0:17:08.040 and and Instagram and stead many influencers, influencers for every trade, 0:17:08.160 --> 0:17:11.880 for woodworking, for plumbing, for cleaning cast iron. I mean, seriously, 0:17:12.040 --> 0:17:13.000 everything is out there. 0:17:13.119 --> 0:17:15.520 Having said that, I mean you think you know. 0:17:15.600 --> 0:17:17.280 I remember like a show like This Old House, like 0:17:17.320 --> 0:17:19.760 they were trying to recruit students because nobody wanted to 0:17:19.760 --> 0:17:22.480 do construction anymore. Nobody wants to do this. I mean, 0:17:22.600 --> 0:17:23.919 but I want to go back to end it. Does 0:17:24.840 --> 0:17:27.960 someone really need five years to become a plumber? If 0:17:28.000 --> 0:17:32.680 the demand is such an issue, isn't there I don't know, 0:17:32.760 --> 0:17:34.560 Like I don't know enough about it, and I certainly 0:17:34.560 --> 0:17:36.119 want if somebody comes into my house that they do 0:17:36.160 --> 0:17:37.360 it right so that all of a sudden I don't 0:17:37.359 --> 0:17:37.879 have a flood. 0:17:39.119 --> 0:17:40.600 But does it really have to take that long? 0:17:40.680 --> 0:17:42.159 Is there any move to kind of figure out how 0:17:42.200 --> 0:17:44.880 to condense the teaching so and can get people out there? 0:17:45.280 --> 0:17:47.720 I mean, look, that's of the affair question. I'm sure 0:17:48.000 --> 0:17:49.840 that that teachers will be open to that debate. But 0:17:49.920 --> 0:17:52.199 I have to say I have a newfound respect for 0:17:52.240 --> 0:17:54.080 what they do. Happen to go along, I shadowed them 0:17:54.080 --> 0:17:56.560 in the classroom, watching what they're doing. You've got the 0:17:56.640 --> 0:18:01.760 technical cyber, which is a quantitative quotient, learning those blueprints, 0:18:02.560 --> 0:18:06.000 figuring out their math for the measurements, figuring out how 0:18:06.000 --> 0:18:08.320 to get the water flowing in the right direction, the 0:18:08.400 --> 0:18:10.640 right weight, and the right pressure. There's a whole technical 0:18:10.720 --> 0:18:14.040 side to it that I guess I wasn't fully aware of. 0:18:14.400 --> 0:18:18.560 And then there's the physical side to it, and they 0:18:18.600 --> 0:18:20.480 shared the labor side to it. 0:18:20.560 --> 0:18:23.639 So it certainly would take some time before you're fully 0:18:23.720 --> 0:18:26.359 confident that you would let this person run amok in 0:18:26.840 --> 0:18:27.240 your house. 0:18:27.960 --> 0:18:28.879 I would imagine takes a. 0:18:28.840 --> 0:18:30.680 Few years at least, But you know, whether that's four 0:18:30.800 --> 0:18:33.240 or five years, I'm sure that's probably a valid point 0:18:33.280 --> 0:18:35.000 for debate. But that's where the program seems to be 0:18:35.040 --> 0:18:35.800 said at the moment. 0:18:35.880 --> 0:18:38.200 And just in the last thirty seconds, dovetail this with 0:18:38.320 --> 0:18:41.960 your most recent reporting about just the overall worker shortage 0:18:42.000 --> 0:18:44.640 in the way that the immigration in the US needs 0:18:44.680 --> 0:18:46.600 to change in order to fill these jobs. 0:18:46.840 --> 0:18:47.520 Yeah, that's right. 0:18:47.600 --> 0:18:50.439 So these companies and especially those in constructions, say they 0:18:50.480 --> 0:18:53.600 cannot get the workers. Part of that solution, as we 0:18:53.680 --> 0:18:56.119 talked about the last time, is legal immigration. But in 0:18:56.200 --> 0:18:58.919 this case, it speaks to the idea that children at school, 0:18:59.119 --> 0:19:03.160 if they're encouraged, you learn a trade instead of university 0:19:03.359 --> 0:19:05.720 could go some way towards filling some of those skills 0:19:05.760 --> 0:19:06.600 shortages as well. 0:19:06.920 --> 0:19:10.080 Yeah, and I'm sure there's like carried out construction electrician, 0:19:10.200 --> 0:19:13.400 Like there's lots of things. And Acurran thank you as always, 0:19:13.880 --> 0:19:15.600 Global Economy reporter at Bloomberg News. 0:19:15.800 --> 0:19:18.000 They're in our DC bureau. His story featured in the. 0:19:17.960 --> 0:19:20.439 Forthcoming issue of Bloomberg Business Week magazine, but you can 0:19:20.480 --> 0:19:23.080 read it now on the Bloomberg terminal. Of course, at 0:19:23.119 --> 0:19:24.879 Bloomberg dot com slash BusinessWeek. 0:19:31.480 --> 0:19:35.320 You're listening to the Bloomberg Business Week podcast. Listen live 0:19:35.440 --> 0:19:38.600 each weekday starting at two pm Eastern on applecar Play 0:19:38.680 --> 0:19:41.520 and Androyd Auto with the Bloomberg Business App. You can 0:19:41.560 --> 0:19:44.800 also listen live on Amazon Alexa from our flagship New 0:19:44.880 --> 0:19:49.720 York station, Just say Alexa Play Bloomberg eleven thirty time 0:19:49.800 --> 0:19:50.440 for tale. 0:19:50.200 --> 0:19:52.240 Of two banks, one small and one that is a 0:19:52.320 --> 0:19:55.919 more than sixty one billion dollar market cap company. First up, 0:19:56.080 --> 0:19:58.080 the view from the small, family owned more than one 0:19:58.160 --> 0:20:01.640 hundred year old community bank, Citizens Bank of Edmund, which 0:20:01.720 --> 0:20:05.200 is based in Edmund, Oklahoma. There is one main branch 0:20:05.359 --> 0:20:08.399 online banking and they're working on programs to bring in the. 0:20:08.560 --> 0:20:11.240 Unbanked with more on the environment and a program that 0:20:11.320 --> 0:20:14.680 taps into her background. Jill Castilla, the president and CEO 0:20:14.760 --> 0:20:17.320 of Citizens Bank of edmund joined us in the studio. 0:20:17.760 --> 0:20:20.119 Jill also a US Army veteran who held a various 0:20:20.200 --> 0:20:22.880 posts at the Kansas City FED. We kicked things off 0:20:23.080 --> 0:20:27.320 asking her about seeing any signs of stress, and we finished. 0:20:27.080 --> 0:20:30.560 The year was zero pass jews, zero non accurls, and 0:20:30.680 --> 0:20:34.640 zero classified loans. Never in the history of our institution 0:20:34.840 --> 0:20:35.840 have we had those types of that. 0:20:35.920 --> 0:20:37.960 How would you have answered that question a year ago? 0:20:38.160 --> 0:20:40.280 I would have been concerned about, not so much the 0:20:40.400 --> 0:20:43.480 lending side, but just the uncertainty. One came to deposits 0:20:43.520 --> 0:20:45.879 because we had the regional banks, the stress that was 0:20:45.920 --> 0:20:50.119 happening there, and education to customers about what uninsured deposits were. 0:20:50.240 --> 0:20:51.920 We're at less than we're a right at five percent 0:20:52.040 --> 0:20:53.200 uninsured deposits. 0:20:52.880 --> 0:20:54.960 So meaning you know, ninety five percent of your deposits 0:20:55.000 --> 0:20:56.560 are insured by the FDS. 0:20:56.800 --> 0:20:59.359 That's exactly right, and so most banks like mine are 0:20:59.560 --> 0:21:02.159 like that. It was an education process. I really the 0:21:02.200 --> 0:21:05.480 confidence and the customers expressing us was quite high, and 0:21:05.520 --> 0:21:07.600 we were just at the front of being transparent and 0:21:07.720 --> 0:21:10.680 open and just accessible through that kind of transition. 0:21:11.280 --> 0:21:14.080 So you said, you've never seen this before, never, So 0:21:14.240 --> 0:21:15.159 how do you explain it. 0:21:16.040 --> 0:21:18.399 I mean, there's still so much money out there, and 0:21:18.520 --> 0:21:23.120 there's so much optimism, even with the difficulty of having 0:21:23.160 --> 0:21:27.159 the inflationary pressures affecting families. I mean, that's happening, you know, 0:21:27.280 --> 0:21:30.080 with small businesses. But I think that there was just 0:21:30.160 --> 0:21:33.200 such a we couldn't hire, you know, fast enough because 0:21:33.400 --> 0:21:36.080 there wasn't the labor force there, and so small businesses 0:21:36.119 --> 0:21:39.280 didn't overcorrect that optimism, and so I think it's kind 0:21:39.280 --> 0:21:41.760 of kept things in check. We're seeing some small business stress. 0:21:42.480 --> 0:21:44.280 You just can't You've got to have a good business 0:21:44.320 --> 0:21:46.600 plan and get product to be successful. We're there for 0:21:46.680 --> 0:21:49.399 a period of time. It was kind of a rational exuberance. 0:21:49.440 --> 0:21:50.920 Help me out though. When you say there's so much 0:21:50.960 --> 0:21:54.680 money out there, meaning what money for? What do you 0:21:54.760 --> 0:21:55.119 mean by that? 0:21:55.280 --> 0:21:57.840 There's a lot of investor money still out there that's 0:21:57.920 --> 0:22:02.040 either investing in real day or buying businesses. A lot 0:22:02.119 --> 0:22:05.360 of M and A activities that's still occurring for small businesses, 0:22:05.480 --> 0:22:08.560 and so you just still see investor optimism out in 0:22:08.600 --> 0:22:11.520 the marketplace. Not really thinking about the market, but really 0:22:11.560 --> 0:22:12.600 what's happening on the ground. 0:22:12.840 --> 0:22:15.040 They tell us more about the focus of your bank. 0:22:15.119 --> 0:22:19.880 It's a single branch employee owned in Edmund, Oklahoma. Who 0:22:19.920 --> 0:22:24.320 are your customers and what are the segments that you're 0:22:24.800 --> 0:22:26.480 not just active in but prominent in. 0:22:26.880 --> 0:22:30.040 Yeah, So's it's just your absolutely traditional community bank. If 0:22:30.040 --> 0:22:32.560 you watch It's Wonderful Life, we're basically George but it 0:22:32.680 --> 0:22:35.400 was so lovely against the backdrop that we've put it into. 0:22:35.480 --> 0:22:38.440 But go ahead, it is really interesting. So we have 0:22:38.680 --> 0:22:41.439 I mean, as our average deposit, our medium deposits right 0:22:41.440 --> 0:22:44.640 at twelve thousand dollars, so very has small deposits. 0:22:44.680 --> 0:22:45.199 They'll reach oil. 0:22:45.240 --> 0:22:48.159 This is a business a bit small businesses and consumers. 0:22:48.720 --> 0:22:51.200 I'm very kind of equal on the deposit side and 0:22:51.280 --> 0:22:53.919 in our lending we do traditional mortgages as well as 0:22:53.960 --> 0:22:55.800 small business loans and commercial real estate. 0:22:56.119 --> 0:22:59.200 On the mortgage side, with rates at roughly seven percent 0:22:59.280 --> 0:23:01.560 for a mortgage right now, how have you seen it 0:23:01.640 --> 0:23:02.520 slow down locally? 0:23:03.160 --> 0:23:05.720 It's come almost to a complete halt in some ways, 0:23:05.800 --> 0:23:08.680 but a lot of cash buyers still out there. There's 0:23:08.680 --> 0:23:10.760 still people moving into town that still need to buy 0:23:10.800 --> 0:23:13.520 a home. But then when are you looking at rents availability, 0:23:13.560 --> 0:23:16.600 which is increased lately. It used to be really difficult 0:23:16.720 --> 0:23:18.880 just in a year ago to get a house for rent. 0:23:19.320 --> 0:23:21.320 Now it's a little bit less expensive to do that 0:23:21.640 --> 0:23:22.679 and then more accessible. 0:23:22.840 --> 0:23:24.840 So your mortgage business is almost completely dried up. 0:23:24.880 --> 0:23:27.240 Oh yes, yeah, they'll worries about business very low. 0:23:27.400 --> 0:23:28.879 When do you think it'll at what rate do you 0:23:28.920 --> 0:23:29.680 think it'll come back? 0:23:29.880 --> 0:23:30.080 Yeah? 0:23:30.080 --> 0:23:30.400 I don't. 0:23:30.440 --> 0:23:32.920 I think whenever we're in the sixes, that really helps, 0:23:33.080 --> 0:23:36.280 you know, kind of momentum whenever you started walking sevens. Yeah, 0:23:36.840 --> 0:23:39.120 in the sixes, And but I think it's starting to normalize. 0:23:39.119 --> 0:23:41.320 I think the expectation has been like, well, we're around 0:23:41.440 --> 0:23:44.399 historic norms right now, and so I think relators are 0:23:44.400 --> 0:23:46.760 starting to accept that and consumers are as well. 0:23:47.040 --> 0:23:49.119 What's the upside of being a bank like you are? 0:23:49.760 --> 0:23:49.879 Right? 0:23:50.000 --> 0:23:52.160 That's kind of an anomaly right in a big bank 0:23:52.280 --> 0:23:54.560 kind of environment, certainly here in the New York metro. 0:23:55.280 --> 0:23:57.800 But there's upsides and downsides to everything. What's the upside? 0:23:57.840 --> 0:24:00.719 What's the downside? Or how you think about compety, especially 0:24:00.720 --> 0:24:04.119 in the digital space where you know, even someone who's 0:24:04.160 --> 0:24:06.600 got you know, an actual brick and mortar if you 0:24:06.720 --> 0:24:08.440 will that you've got to compete with the digital space 0:24:08.440 --> 0:24:09.800 as well, especially for a younger generation. 0:24:09.920 --> 0:24:11.479 Yeah, so it's such a great question. So we've been 0:24:11.480 --> 0:24:13.359 around for one hundred and twenty two years and our 0:24:13.400 --> 0:24:15.440 plans to be here for another one hundred years. And 0:24:15.640 --> 0:24:18.439 so where we are we are so accountable to our 0:24:18.480 --> 0:24:21.200 customer base and that accessibility. I sit in our lobby, 0:24:21.280 --> 0:24:24.119 so customers come straight into my office. But when now 0:24:24.119 --> 0:24:26.119 we're competing in the digital space. We just launched a 0:24:26.119 --> 0:24:29.160 digital bank for the military, and so this bank also 0:24:29.240 --> 0:24:31.479 three hundred and fifty million OAR bank. We just received 0:24:31.480 --> 0:24:35.320 our first patent for a completely remote self service bank. 0:24:35.560 --> 0:24:38.040 So we just because you're small doesn't mean you can't 0:24:38.040 --> 0:24:39.520 be disruptively innovative. 0:24:39.720 --> 0:24:41.280 Can you talk a little bit about that. Because you 0:24:41.359 --> 0:24:44.159 are a US Army veteran and a lot of your family, 0:24:44.800 --> 0:24:49.840 your husband served, your kids went to military academies and 0:24:49.920 --> 0:24:54.560 are serving. What are the unique needs from the military 0:24:54.600 --> 0:24:55.960 when it comes to financial services. 0:24:56.280 --> 0:24:59.320 Yeah, so soldiers, a new soldier like I was, whenever 0:24:59.359 --> 0:25:02.640 I list, many of them showed up unbanked, and that's 0:25:02.640 --> 0:25:06.000 still occurring, and they still are quite susceptible to predatory 0:25:06.080 --> 0:25:09.000 lending and they were so young. Yeah, so many, so 0:25:09.119 --> 0:25:13.440 many banks won't open independent checking accounts for seventeen year olds. 0:25:13.440 --> 0:25:16.200 They had to bring the third their parents in many 0:25:16.320 --> 0:25:18.240 come from situations in which there's not a lot of 0:25:18.280 --> 0:25:21.000 financial literacy and support around them. So it's really their 0:25:21.040 --> 0:25:23.240 first job and maybe their first job and their family 0:25:23.320 --> 0:25:26.080 and in a couple of generations. So it's really a 0:25:26.119 --> 0:25:28.359 great opportunity for us, we think, to be able to 0:25:28.800 --> 0:25:31.960 really meet someone where they are, provide financial literacy around that, 0:25:32.080 --> 0:25:35.840 and really understand this young hero coming to serve their country. 0:25:36.520 --> 0:25:38.280 How can we support them best to get them off 0:25:38.320 --> 0:25:39.240 our financial footing. 0:25:39.320 --> 0:25:39.879 I can agree. 0:25:39.920 --> 0:25:41.879 We have all these people who go fight to you know, 0:25:42.119 --> 0:25:45.719 around the world for you know, to defend democracy, defend freedom, 0:25:46.200 --> 0:25:49.480 and yet they're often left behind in so many different. 0:25:49.240 --> 0:25:52.720 Yeah, we talk so much about after they serve too, Carol. 0:25:52.480 --> 0:25:57.960 Healthcare, you know, financially, educationally, and then you're talking about banking. 0:25:58.200 --> 0:26:00.080 So tell us about how this platform will work and 0:26:00.400 --> 0:26:02.400 who will you open it to? Everyone? 0:26:03.040 --> 0:26:05.960 Yes, it's opening everyone at launched an audio military anybody, 0:26:06.040 --> 0:26:08.959 anybody in the end that qualifies for our bank account 0:26:09.000 --> 0:26:11.120 can open an account with us. It's a two minute 0:26:11.119 --> 0:26:15.440 account opening, and we're using alternative identification methods that typically 0:26:15.440 --> 0:26:17.720 aren't available in a digital bank. So if you have 0:26:17.760 --> 0:26:20.000 a tribal card, if you just have your military ID, 0:26:20.400 --> 0:26:23.320 sometimes you can't open accounts and most digital banks in 0:26:23.359 --> 0:26:25.879 that method. It also gives them an instant direct deposit 0:26:26.000 --> 0:26:28.720 form signed by me that they can text to their recruiter, 0:26:29.040 --> 0:26:31.120 so while they're sitting there, they can open their account 0:26:31.400 --> 0:26:33.159 and not have to worry about transportation. Many of these 0:26:33.200 --> 0:26:36.640 young people don't have cars, they don't have a banking relationship. 0:26:36.960 --> 0:26:40.080 They are having their wanting to enlist and so then 0:26:40.080 --> 0:26:42.440 they're having to leave and go and go to the bank. 0:26:42.320 --> 0:26:42.600 To do that. 0:26:42.800 --> 0:26:45.400 As you mentioned, you're more than a century old bank, 0:26:45.520 --> 0:26:48.760 traditional bank. How do you compete with the venture funded 0:26:48.800 --> 0:26:51.280 startups that are going after the same demographic. 0:26:51.720 --> 0:26:55.400 Yeah, I view them as a lot of great, healthy competition, 0:26:55.600 --> 0:26:57.840 and many of us are really great friends and when 0:26:57.840 --> 0:27:00.480 we learn from each other, and so we partner with 0:27:00.560 --> 0:27:03.840 a lot of venture funded startups that are in this business. 0:27:03.880 --> 0:27:06.760 I mean who we partnered with for our digital bank 0:27:06.920 --> 0:27:09.399 that we're in that space and so well you're. 0:27:09.440 --> 0:27:12.120 Because a lot of these are FinTechs that they can't 0:27:12.160 --> 0:27:14.919 necessarily call themselves banks, but they partner with banks. They 0:27:14.960 --> 0:27:17.080 doo yeah, financial services. So you've partnered with some of 0:27:17.119 --> 0:27:18.480 these FinTechs, I've. 0:27:18.280 --> 0:27:20.359 Partner and I mentor many of them. I mean it 0:27:20.480 --> 0:27:23.040 is we're cultivating that space because it's crucial to the 0:27:23.119 --> 0:27:26.760 longevity of a community bank that we have strong alliances 0:27:26.880 --> 0:27:27.960 with our fintech community. 0:27:28.160 --> 0:27:30.640 We're talking about Jill Cristilla, she's Citizens Bank of edmend 0:27:30.640 --> 0:27:33.000 president and CEO here in studio with us. Jill, as 0:27:33.040 --> 0:27:36.280 you said, for Roger, is the service right, it's a 0:27:36.320 --> 0:27:39.360 digital bank offering for military members. You said for those 0:27:39.400 --> 0:27:42.440 who qualify, what's I'm thinking at a seventeen year old, 0:27:43.040 --> 0:27:45.960 what's required for them to qualify? Because I do wonder 0:27:46.040 --> 0:27:48.879 how many we'll pass that qualification, how many will not. 0:27:49.119 --> 0:27:51.840 That is a very low barrier to introduce. So basically 0:27:51.920 --> 0:27:54.920 it's having a valid identification, that's it. Yeah, And we 0:27:55.160 --> 0:27:57.000 also verify kind of where they are to make sure 0:27:57.000 --> 0:27:58.520 that it's not a fraudulent account. 0:27:58.640 --> 0:28:00.400 So how do you make money on these accounts? 0:28:00.520 --> 0:28:00.639 Oh? 0:28:00.960 --> 0:28:03.480 That's you know, we have a model. If we do good, 0:28:03.520 --> 0:28:04.120 we'll do well. 0:28:04.480 --> 0:28:07.240 And so the focus has been build something that is amazing, 0:28:07.640 --> 0:28:09.679 and then the financials take care of ours itself. I mean, 0:28:09.720 --> 0:28:12.359 that's what's great about recharging for these accounts. They're free 0:28:12.400 --> 0:28:15.240 accounts and no, there's no fees associated with them. We 0:28:15.760 --> 0:28:19.000 do a roundup and a match. We have a really nice, 0:28:19.240 --> 0:28:22.320 healthy interest rate on savings account and so really the 0:28:22.400 --> 0:28:24.120 only way that you make money off of this type 0:28:24.160 --> 0:28:26.320 of account is through interchange revenue for. 0:28:26.359 --> 0:28:28.240 The transaction somebody swipes their cards. 0:28:28.119 --> 0:28:32.240 So benign. Yeah, we reimburse all foreign ATM fees. You know, 0:28:32.640 --> 0:28:35.119 there's no user costs associated with this. 0:28:35.400 --> 0:28:37.560 And where are you seeing the footprint right now of 0:28:37.640 --> 0:28:39.360 people adopting the accounts. 0:28:39.560 --> 0:28:43.040 Yes, so it's widespread. We have them overseas, We have 0:28:43.200 --> 0:28:45.840 veterans or living overseas their open accounts. I mean that 0:28:45.920 --> 0:28:48.440 we're targeting that entry level service members. 0:28:48.480 --> 0:28:52.040 Do you have more people getting these accounts? These I 0:28:52.080 --> 0:28:54.000 don't want to call what are they? They're not virtual accounts, 0:28:54.040 --> 0:28:55.640 but they're either online only accounts. 0:28:55.720 --> 0:28:55.880 Yeah. 0:28:55.920 --> 0:28:57.960 Do you have more people who have these accounts than 0:28:58.240 --> 0:28:59.960 customers who are walking through the door of the brand? 0:29:00.920 --> 0:29:03.760 We're we're opening out at the same pace, but we 0:29:03.880 --> 0:29:05.600 have much more accounts than our physical branch. 0:29:05.640 --> 0:29:07.440 So we do it, but eventually you probably have more. 0:29:07.560 --> 0:29:10.800 Yeah, I think I think it probably will. It's the 0:29:11.120 --> 0:29:14.760 ease and accessibility. Being able to get banked. We're previously 0:29:14.800 --> 0:29:17.080 going into bank is someone timidating. I remember growing up 0:29:17.160 --> 0:29:20.240 and being intimidated going into a staunchy bank and being 0:29:20.280 --> 0:29:21.920 able to reduce those barriers. It's good forever. 0:29:22.040 --> 0:29:22.880 You remember the first time. 0:29:23.080 --> 0:29:24.920 I actually remember my first book, but it was interesting. 0:29:25.680 --> 0:29:27.640 My parents brought me to open a checking account and 0:29:27.680 --> 0:29:29.640 I had to be with them, and yeah. 0:29:29.480 --> 0:29:31.320 It was like, but you did. You had your family 0:29:31.440 --> 0:29:32.000 do it right. 0:29:32.080 --> 0:29:33.880 And it was like to sit down with somebody and 0:29:33.960 --> 0:29:35.040 it was your birthday. 0:29:34.720 --> 0:29:37.520 Money or whatever or you know, holiday money, and like 0:29:37.720 --> 0:29:40.640 we started really early. It's what kind of breaks my 0:29:40.720 --> 0:29:43.640 heart is to hear you talk about these individuals who 0:29:44.240 --> 0:29:47.040 you know, when you talk about being you know, unbanked, 0:29:47.080 --> 0:29:49.840 if you will, it's often we're talking about emerging economies 0:29:49.920 --> 0:29:51.520 or something right, and they're trying to figure it out, 0:29:51.560 --> 0:29:52.880 and often technology comes. 0:29:52.760 --> 0:29:53.120 To the right. 0:29:53.200 --> 0:29:55.320 We're not talking about the US right, right, we're not. 0:29:55.560 --> 0:29:58.320 And so it kind of breaks my heart that there 0:29:58.400 --> 0:30:00.480 are folks. It's not a new story. 0:30:00.480 --> 0:30:02.160 And it shouldn't break my heart because I've heard it before, 0:30:02.240 --> 0:30:05.959 but that are just left behind individuals in the system. 0:30:06.120 --> 0:30:08.680 Well, I was economically vulnerable when I enlisted, and then 0:30:08.760 --> 0:30:10.840 a family member wrote checks on my account while I 0:30:10.920 --> 0:30:12.320 was gone and took all that money. And that was 0:30:12.400 --> 0:30:15.520 thirty years ago. I shared that story and a young 0:30:15.600 --> 0:30:17.160 lady came up to me and said that was me 0:30:17.360 --> 0:30:19.800 and she was eighteen years old and had just enlisted 0:30:19.800 --> 0:30:21.120 a year before and had to have her mom on 0:30:21.160 --> 0:30:23.600 our account when she opened the account. But the mom 0:30:23.680 --> 0:30:25.800 had a garnishment, so when the money posted in her 0:30:25.840 --> 0:30:28.720 bank account, it was taken. So this is a story 0:30:28.760 --> 0:30:30.880 that's gone on way too long, and so it's really 0:30:31.040 --> 0:30:33.440 we feel like no one else is coming. They've had 0:30:33.480 --> 0:30:35.040 a chance to come, and no one else is coming. 0:30:35.120 --> 0:30:36.320 So it's our job to fix it. 0:30:36.400 --> 0:30:37.680 How many people do you have so far? 0:30:38.040 --> 0:30:40.000 So we're right around about a thousand that we're serving 0:30:40.120 --> 0:30:42.640 right now. And so we are we really have small institutions, 0:30:42.640 --> 0:30:44.720 so we don't have like the huge digital marketing push 0:30:44.800 --> 0:30:47.840 that other digital banks do. We're not VC funded, but 0:30:48.000 --> 0:30:51.120 we are seeing just great receptivity on an organic basis. 0:30:52.000 --> 0:30:55.840 Community banks a community bank it's employee owned. We've seen 0:30:56.040 --> 0:30:59.240 so much consolidation in the last few years, I mean 0:30:59.280 --> 0:31:01.720 the last few decks gates in the space. Can you 0:31:01.800 --> 0:31:04.640 tell us that your bank will remain independent while you 0:31:04.720 --> 0:31:04.960 run it. 0:31:05.280 --> 0:31:07.280 I would not be here if there was anywhere in 0:31:07.320 --> 0:31:09.600 the cars that we were thinking about not being independent. 0:31:09.960 --> 0:31:11.600 We feel like we have we have this kind of 0:31:11.680 --> 0:31:14.200 audacious thought that we'll lead the way for everyone else 0:31:14.240 --> 0:31:15.800 and show it how, show them how it's done. We 0:31:15.880 --> 0:31:17.120 want to be here another century. 0:31:17.200 --> 0:31:19.760 Do you want to grow physical branches too? 0:31:20.400 --> 0:31:22.640 I sold our for physical branches and just to have 0:31:22.840 --> 0:31:25.480 the one. And that's why we invented this other space 0:31:25.600 --> 0:31:28.600 is because we had demand another geography. So now customers 0:31:28.640 --> 0:31:30.640 can walk on into our bank twenty four to seven 0:31:30.920 --> 0:31:33.520 in this little remote electron banking facility with their phone 0:31:33.840 --> 0:31:35.880 to posit up to ten thousand and cash withdraw to 0:31:35.920 --> 0:31:40.000 ten thousand cash, get rolled coin, deposit loose coin, and 0:31:40.120 --> 0:31:43.240 conduct their banking transactions twenty four seven integrated with our core. 0:31:43.360 --> 0:31:45.000 So it's like a small business ATM. 0:31:45.200 --> 0:31:46.840 I have seen some of the big banks start to 0:31:46.880 --> 0:31:47.960 do that also, Well, we. 0:31:48.040 --> 0:31:51.720 Have the patent, so they might eslore them a little bit. 0:31:52.040 --> 0:31:53.840 That I do the exact same thing. 0:31:54.880 --> 0:31:56.640 Just got about thirty seconds left here, Jill. 0:31:56.920 --> 0:31:59.640 I do think about the importance of community banks, right 0:32:00.080 --> 0:32:03.200 you see versus maybe you know what a big financial 0:32:03.280 --> 0:32:06.920 giant that is many miles away doesn't see well. 0:32:06.960 --> 0:32:09.240 And I think we get lumped into the big regional 0:32:09.280 --> 0:32:11.040 banks when we think about all the small ones are 0:32:11.080 --> 0:32:13.800 ones there less than the top twenty whenever there's four 0:32:13.840 --> 0:32:16.400 thousand of us less than a billion. We are here 0:32:16.560 --> 0:32:18.920 serving our communities every day. We're the ones supporting the 0:32:19.040 --> 0:32:22.440 little leagues that were in the grocery store aisles, accountable 0:32:22.520 --> 0:32:24.360 to our communities. So you don't need to worry about 0:32:25.160 --> 0:32:27.440 kind of what Wall Street's thoughts are on the bank, 0:32:27.520 --> 0:32:29.600 because you know what the bank is doing day in 0:32:29.640 --> 0:32:31.400 and day out. You see the loans that they're doing, 0:32:31.440 --> 0:32:33.840 You see if they're being responsible with their deposits, and 0:32:33.920 --> 0:32:36.360 you see how they're investing in building their communities. 0:32:37.160 --> 0:32:39.920 Great stuff. Interesting and come back and let us know 0:32:40.000 --> 0:32:43.720 how Roger's doing. It'd be interesting to see, really fascinating. 0:32:43.840 --> 0:32:47.480 Jill Cristilla, she's president CUF Citizens Bank of Edmund joining 0:32:47.560 --> 0:32:49.880 us here in our Bloomberg Interactive Brokers studio. 0:32:50.800 --> 0:32:54.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:32:54.360 --> 0:32:57.560 Live weekday afternoons from two to five pm Eastern Listen 0:32:57.640 --> 0:32:59.760 on Apple car Play and then brought Auto with the 0:33:00.360 --> 0:33:02.800 Business Act or What's Just Live on YouTube. 0:33:04.520 --> 0:33:07.240 And now to another perspective in banking. Someone who we 0:33:07.400 --> 0:33:11.120 also caught up with after the last FMC decision, Bill Demcheck, 0:33:11.200 --> 0:33:13.720 is chairman and CEO of P and C Financial Services. 0:33:14.240 --> 0:33:16.320 It is home to P and C Bank. P ANDC 0:33:16.440 --> 0:33:19.280 Financial has a more than sixty one billion dollar market cap. 0:33:19.440 --> 0:33:21.600 We talked about the one year anniversary since the collapse 0:33:21.680 --> 0:33:24.200 and the troubles of several regional banks. We're talking about 0:33:24.320 --> 0:33:27.840 Silicon Valley Bank, Signature Bank, First Republic, and why we've 0:33:27.880 --> 0:33:30.040 heard a lot of senior execs in the banking sector 0:33:30.080 --> 0:33:32.160 talk about the value of being boring. 0:33:32.760 --> 0:33:36.560 Look, I think banking is a little bit unique at 0:33:36.560 --> 0:33:41.000 the moment because we're in this uncertain period. You know, 0:33:41.120 --> 0:33:45.680 it's a function of ending regulation. You know, the impact 0:33:45.720 --> 0:33:48.000 of interest rates and when the Fed skin ease or 0:33:48.040 --> 0:33:49.520 not eyes, So it's a little bit different. I think 0:33:49.560 --> 0:33:53.120 the economy is kind of what you read about. It 0:33:53.240 --> 0:33:56.320 feels pretty healthy. It's slowing at the margin from a 0:33:56.440 --> 0:34:01.440 rapid base labor's good, you know it, At least inside 0:34:01.480 --> 0:34:03.680 of P and C. We're largely on the same age 0:34:03.760 --> 0:34:05.960 with hir Paul on his recent comments. 0:34:06.120 --> 0:34:08.960 What can you tell us about your customers right now? 0:34:09.400 --> 0:34:11.480 And I asked because we had a really interesting conversation 0:34:11.719 --> 0:34:14.520 with the President's CEO of Citizens Bank of edmund. I mean, 0:34:14.920 --> 0:34:18.680 this is a tiny bank in Oklahoma, one physical branch 0:34:18.760 --> 0:34:21.680 and they have an online business with a thousand customers, 0:34:21.760 --> 0:34:25.359 So I mean we're talking tiny. But Jill Castilla told 0:34:25.440 --> 0:34:28.800 us yesterday that she's never seen a better environment for 0:34:28.880 --> 0:34:31.920 her customers. Things are really really good right now. 0:34:32.320 --> 0:34:36.720 It's Jill's actually a good friend's She's not wrong. 0:34:38.160 --> 0:34:38.320 You know. 0:34:39.880 --> 0:34:42.799 On the corporate side, there's areas of weakness, but there's 0:34:42.880 --> 0:34:47.279 a lot of areas of strength, particularly as we kind 0:34:47.320 --> 0:34:53.560 of lean into manufacturing and on shoring. Again. The consumer, yeah, 0:34:53.719 --> 0:34:58.000 varies by income level. We've obviously seen basic wages increase 0:34:58.040 --> 0:35:01.840 a lot, particularly at the low level, but at the 0:35:01.920 --> 0:35:05.720 same time, we've seen the prices of their staple goods 0:35:05.840 --> 0:35:11.040 increase more compounded through time than and their wages have, 0:35:11.160 --> 0:35:13.320 even though in many instances wages of double. 0:35:14.640 --> 0:35:17.960 So you know it varies well, and you know we 0:35:18.080 --> 0:35:20.279 kicked off here, you know, Bill getting into you that 0:35:20.480 --> 0:35:22.560 one year essentially a little bit more than one year 0:35:22.560 --> 0:35:25.360 since Silicon Valley Bank and the collapse of it. Do 0:35:25.440 --> 0:35:27.480 you feel like we're out of that environment? And I 0:35:27.560 --> 0:35:29.560 think one thing we have learned is right that not 0:35:29.760 --> 0:35:32.960 every bank, not every regional, is the same and in 0:35:33.080 --> 0:35:34.200 terms of their exposure. 0:35:34.520 --> 0:35:35.920 But we're still kind of a little. 0:35:35.760 --> 0:35:38.280 Concerned about commercial real estate, not sure that we've gotten 0:35:38.280 --> 0:35:41.680 through that. So when it comes to concerns within some 0:35:41.840 --> 0:35:44.439 of the banking sector, do you think that we could 0:35:44.480 --> 0:35:47.640 see more troubles still depending on their exposures. 0:35:47.960 --> 0:35:51.040 At the margin, probably in smaller banks, most of which 0:35:51.120 --> 0:35:55.319 you will never have heard of. I think, first of all, 0:35:55.360 --> 0:35:58.160 as you know, I don't particularly like the term regional. 0:35:58.280 --> 0:36:01.200 It's not very descriptive of anything anymore, particularly in a 0:36:01.280 --> 0:36:01.959 digital age. 0:36:03.400 --> 0:36:05.720 But I'm not going to call you a super regional, 0:36:05.800 --> 0:36:07.239 which people call you sometimes. 0:36:08.600 --> 0:36:10.840 I don't know what to word national. But I know, 0:36:11.000 --> 0:36:13.520 I know you are in that campaign in the second 0:36:13.600 --> 0:36:17.080 but you know practically and you see the same numbers 0:36:17.120 --> 0:36:19.520 I do. Is banks get smaller, they tend to have 0:36:19.640 --> 0:36:23.719 a higher concentration of real estate. Their concentration of real 0:36:23.920 --> 0:36:28.880 estate tends to be more fixed rate, medium term in 0:36:29.040 --> 0:36:32.200 length and B and C properties, you know, so permanent 0:36:32.280 --> 0:36:35.279 financing on older B and C properties, which is kind 0:36:35.320 --> 0:36:37.239 of the area that's going to get hit the most 0:36:38.000 --> 0:36:42.480 in a higher rate environment with you know, increased office vacancies. 0:36:42.520 --> 0:36:45.840 But it's not a systemic issue, certainly for the for 0:36:45.960 --> 0:36:49.080 the banking industry, not for any of the names you 0:36:49.400 --> 0:36:52.840 will otherwise know, and we'll make our way through it. 0:36:53.320 --> 0:36:55.680 Well, let's talk more broadly, just about about real estate 0:36:55.719 --> 0:36:57.680 and talk to us a little bit about your own 0:36:57.880 --> 0:37:01.000 exposure to real estate and commercial real estate. How can 0:37:01.040 --> 0:37:02.080 you characterize that for us? 0:37:02.880 --> 0:37:06.040 You know, look, it's a small percentage of our total loans. 0:37:06.120 --> 0:37:08.560 That not a big percentage of our capital. 0:37:08.640 --> 0:37:10.360 We have, you know, plus or. 0:37:10.400 --> 0:37:13.280 Minus eight and a half billion, I guess in total 0:37:13.400 --> 0:37:16.680 what you would define his office. And that is where 0:37:17.080 --> 0:37:20.720 all the spotlight is starting to shine on multi family. 0:37:20.800 --> 0:37:23.279 But we're not seeing stress and multi family at the moment, 0:37:23.400 --> 0:37:27.160 notwithstanding you know, news that you might see out of 0:37:27.239 --> 0:37:30.960 New York and affordable in other places, generic multifamilies do 0:37:31.080 --> 0:37:33.759 and just fine. But inside of office, you know, say 0:37:33.800 --> 0:37:37.520 we have that eight and a half billion. There's there's 0:37:37.560 --> 0:37:40.560 about four and a half billion to five billion that 0:37:40.719 --> 0:37:44.279 is multi tenant, and that's where the problem is and 0:37:44.400 --> 0:37:47.839 we expect problems there and we're reserved quite a high 0:37:47.920 --> 0:37:51.759 level against it. Thus far as we've cycled through, you know, 0:37:51.920 --> 0:37:57.279 these projects that going on performing, we've actually been conservative 0:37:57.400 --> 0:37:59.920 and what we've been reserving, so we feel okay about it. 0:38:01.000 --> 0:38:05.439 We're heavily reserved today. It's gonna be you know, most 0:38:05.480 --> 0:38:08.520 of our stuff comes due over the next year, so 0:38:08.840 --> 0:38:11.080 you know, it's kind of project based. They come online, 0:38:11.840 --> 0:38:13.560 so we're gonna we're going to know the answer to 0:38:13.600 --> 0:38:14.960 this pretty quickly. 0:38:15.040 --> 0:38:16.480 I suspect interesting. 0:38:16.680 --> 0:38:20.800 Hey, listen, we also said that boring is something that 0:38:20.960 --> 0:38:23.040 you guys are tapping into. We've got a great chart 0:38:23.080 --> 0:38:24.759 that we can share with those who are watching right 0:38:24.800 --> 0:38:28.839 now that our producer Elizabeth is going to share out 0:38:28.880 --> 0:38:31.800 with everybody. But it talks about bank management, not just 0:38:32.000 --> 0:38:37.080 your own, but others using boring on calls this year, 0:38:37.680 --> 0:38:40.040 quarterly update calls and earnings calls. 0:38:40.160 --> 0:38:41.200 It is up a lot. 0:38:42.440 --> 0:38:44.520 Boring not a bad thing. And you guys have an 0:38:44.520 --> 0:38:48.560 advertising campaign that you are stressing that we do. 0:38:49.080 --> 0:38:52.040 I mean I'll make a couple of points. I think 0:38:52.360 --> 0:38:54.960 if you look back in history, I've talked about our 0:38:55.040 --> 0:38:57.359 bank and banking in general was kind of three yards 0:38:57.400 --> 0:39:00.640 in a cloud of dust. And you grow, you know, 0:39:00.719 --> 0:39:03.160 with GDP and if and if you're good at it, 0:39:03.320 --> 0:39:06.760 you can outpace that. But we are, by our very nature, 0:39:06.800 --> 0:39:09.440 as in industry, when you see outliers so that there 0:39:09.520 --> 0:39:12.800 tends to be something going on underneath that. And and 0:39:13.840 --> 0:39:16.080 when we think about you know, we use the word boring. 0:39:16.960 --> 0:39:19.239 I don't necessarily like to think of myself as an 0:39:19.239 --> 0:39:22.759 important person, But I didn't mean banking auto be I 0:39:22.880 --> 0:39:25.920 get it, but boring. You know, banking shouldn't be drama 0:39:26.080 --> 0:39:30.400 for our clients. It ought to be predictable, consistent. Stuff works. 0:39:30.719 --> 0:39:32.799 They know their money's safe. They don't have to read 0:39:32.800 --> 0:39:36.560 about us in the headlines. Right. That's who we are. 0:39:36.719 --> 0:39:38.200 That's how we define ourselves. 0:39:38.280 --> 0:39:38.400 You know. 0:39:38.480 --> 0:39:41.640 We we to the core of this company, to the 0:39:41.840 --> 0:39:44.160 very best of our ability. We try to do right 0:39:44.239 --> 0:39:46.520 by all of our constituents every day, and when we 0:39:46.600 --> 0:39:47.680 screw it up, we fix it. 0:39:48.040 --> 0:39:48.239 Bill. 0:39:48.239 --> 0:39:50.120 We're going to leave it on that note, but I 0:39:50.200 --> 0:39:52.680 hope we can get you back here real soon. Build Demchech, 0:39:53.080 --> 0:39:56.360 He's CEO at pn C Bank. Joining us from Pittsburgh. 0:40:02.719 --> 0:40:06.560 You're listening to the Bloomberg Business Week podcast. Listen live 0:40:06.680 --> 0:40:09.839 each weekday starting at two pm Eastern on applecar Play 0:40:09.920 --> 0:40:12.719 and Android Auto with the Bloomberg Business Ad. You can 0:40:12.800 --> 0:40:16.040 also listen live on Amazon Alexa from our flagship New 0:40:16.120 --> 0:40:19.720 York station Just Say Alexa, playing Bloomberg eleven thirty. 0:40:20.960 --> 0:40:24.799 We are living in an era of contrasts financially, politically, 0:40:25.160 --> 0:40:28.560 socially globally. For example, here in the US, feelings of 0:40:28.600 --> 0:40:32.000 financial insecurity among Americans have reached their highest point in 0:40:32.080 --> 0:40:35.320 at least a decade. That's according to Northwestern Mutual's annual 0:40:35.400 --> 0:40:38.600 Planning and Progress Survey. At the same time, household wealth 0:40:38.600 --> 0:40:41.080 in the US increased to a record last year as 0:40:41.160 --> 0:40:43.880 investors reaped the benefits of a surging stock market and 0:40:44.040 --> 0:40:45.040 higher home values. 0:40:45.200 --> 0:40:47.840 Our next guest looks at these contrasts and at the 0:40:48.040 --> 0:40:50.920 crises that the world has dealt with in the recent past, 0:40:51.320 --> 0:40:53.839 from the Great Financial Crisis to the pandemic and more. 0:40:54.320 --> 0:40:56.719 She even has a take on Boeing, which was in 0:40:56.800 --> 0:40:58.760 the news a lot this past week as it announced 0:40:58.800 --> 0:41:02.120 a major overhaul in the Sea, including CEO Dave Calhoun 0:41:02.200 --> 0:41:03.799 stepping down by the end of the year. 0:41:03.880 --> 0:41:06.759 We're talking about journalist and author Grace Blakely, who is 0:41:06.880 --> 0:41:09.120 the author of several books, including one on the Great 0:41:09.160 --> 0:41:12.759 Financial Crisis, another on the pandemic. Her new book is 0:41:13.080 --> 0:41:17.200 Vulture Capitalism, Corporate Crimes, Backdoor Bailouts, and the Death of Freedom. 0:41:17.719 --> 0:41:20.960 She joining us from the UK and began our conversation 0:41:21.440 --> 0:41:23.320 talking about crisis and capitalism. 0:41:23.520 --> 0:41:25.120 Yeah, thank you so much for having me on the show. 0:41:25.320 --> 0:41:27.040 So, really, what I'm looking at in the book, as 0:41:27.080 --> 0:41:29.640 you say, of that, I use the lens of crises 0:41:29.719 --> 0:41:34.040 to show, really expose the way that capitalism really works. 0:41:34.080 --> 0:41:35.920 Because I think that we have this idea in our 0:41:36.000 --> 0:41:38.359 heads of the economic system in which we live as 0:41:38.440 --> 0:41:41.200 kind of meaning free markets and democracy, right, that we 0:41:41.280 --> 0:41:43.920 live in these kind of free market economies and if 0:41:43.960 --> 0:41:45.840 there are problems within the market, then it's up to 0:41:45.880 --> 0:41:47.800 the government to kind of put things right. And what 0:41:47.920 --> 0:41:50.879 I show in the book is that actually capitalism most 0:41:50.920 --> 0:41:54.200 of the time doesn't mean free markets. It means concentrated 0:41:54.520 --> 0:41:55.479 monopolistic power. 0:41:55.560 --> 0:41:57.040 I don't think we're free at r do you. 0:41:58.160 --> 0:41:59.000 I really don't know. 0:41:59.440 --> 0:42:02.239 And part of the problem is that governments don't really 0:42:02.320 --> 0:42:04.560 act as a check on corporate power. Most of the 0:42:04.640 --> 0:42:08.120 time they reinforce the power of big businesses. The big 0:42:08.200 --> 0:42:11.400 example at the moment is Boeing. So Boeing's obviously been 0:42:11.520 --> 0:42:15.040 through this horrendous time, loads of corporate scandals, massive cover 0:42:15.200 --> 0:42:19.120 ups over the issues that have been besetting its claims, 0:42:19.360 --> 0:42:21.800 and it's one of the biggest recipients of corporate welfare 0:42:21.920 --> 0:42:26.360 in the US. It gets tax subsidies, it gets tax breaks, 0:42:27.400 --> 0:42:30.440 and it's got loads of those of government contracts. It 0:42:30.520 --> 0:42:34.719 got a big bailout during the pandemic, even after the 0:42:34.760 --> 0:42:36.200 seven three seven MAX disasters. 0:42:37.080 --> 0:42:40.239 I will point out, grace that Airbus, the European rival 0:42:40.320 --> 0:42:42.160 to Boeing, it is a duopoly. I think it's fair 0:42:42.200 --> 0:42:46.319 to say also also does get some of those same 0:42:46.760 --> 0:42:49.920 that same favorable treatment. It's been the subject of wto issues. 0:42:49.920 --> 0:42:52.320 Would you say that that Airbus has the same issue 0:42:52.400 --> 0:42:55.640 that Boeing does, would you characterize it the same way issues? 0:42:55.680 --> 0:42:56.120 Definitely? 0:42:56.480 --> 0:42:57.280 Yeah, yeah, totally. 0:42:57.360 --> 0:42:57.400 So. 0:42:57.520 --> 0:43:00.520 I mean I look at this actually, how these two 0:43:00.880 --> 0:43:05.040 aerospace manufacturers have become so deeply into woven with the 0:43:05.160 --> 0:43:07.800 US state on the one hand, and the European Union 0:43:08.000 --> 0:43:10.400 and various states within that on the other hand, and 0:43:10.520 --> 0:43:14.719 Airbus has also been embroiled in corruption scandals. So, you know, 0:43:14.840 --> 0:43:17.120 these two giant firms, as you say, in this duoballistic 0:43:17.239 --> 0:43:20.800 market structure, with Boeing obviously having dealt with some serious 0:43:20.840 --> 0:43:23.800 safety failings air Bus dealing with some corruption scandals. It 0:43:23.920 --> 0:43:26.600 kind of shows that this line between states and markets 0:43:26.960 --> 0:43:28.320 isn't really as clear as we'd. 0:43:28.280 --> 0:43:28.680 Like to think. 0:43:28.880 --> 0:43:32.320 It's interesting, you know, where we are often talking about 0:43:33.040 --> 0:43:35.319 our data and data privacy and control of our own 0:43:35.400 --> 0:43:38.160 data when it comes to the social media world, whether 0:43:38.239 --> 0:43:42.200 it's TikTok, whether it's other social media companies, and how 0:43:42.400 --> 0:43:45.040 our own data, which is very valuable and has made 0:43:45.120 --> 0:43:48.879 some very large market cap companies out there and made 0:43:48.960 --> 0:43:51.680 a lot of companies, if you will, very wealthy in 0:43:51.719 --> 0:43:55.560 the process. It's interesting though, that this idea of you know, 0:43:55.719 --> 0:43:59.080 kind of taking back our economy is something that you 0:43:59.200 --> 0:44:02.600 are digging into. I mean, do you not like capitalism 0:44:02.640 --> 0:44:04.160 at all? Do you think it's all bad? 0:44:05.719 --> 0:44:08.480 Well, to be clear to your listeners, I am a socialist, 0:44:08.800 --> 0:44:13.239 so I'll put that to the early I know, I know, 0:44:13.320 --> 0:44:14.799 it's kind of a bit more of a dirty word 0:44:14.880 --> 0:44:17.600 in the US, that is in the UK. But I 0:44:17.680 --> 0:44:20.400 think even if you're not a socialist or even a progressive, 0:44:20.520 --> 0:44:24.640 my analysis is still relevant because it's something that you know, libertarians, 0:44:24.680 --> 0:44:26.120 for example, have been saying in the US for a 0:44:26.200 --> 0:44:28.480 very long time. It's that we don't have real capsism, 0:44:28.560 --> 0:44:30.120 we have chromy capitalism. 0:44:30.200 --> 0:44:30.319 Right. 0:44:30.360 --> 0:44:32.640 It's a kind of perversion of a free market system. 0:44:32.960 --> 0:44:35.239 And what I show in the book, using loads of 0:44:35.360 --> 0:44:38.920 historical examples, is actually this has kind of always been 0:44:39.000 --> 0:44:41.719 the case. So it's always been the case that big 0:44:41.840 --> 0:44:45.839 businesses have worked with and through governments basically to get 0:44:45.880 --> 0:44:46.960 their way all the way back. 0:44:46.840 --> 0:44:49.600 Think of the Robert Barry It's right, or going back yet. 0:44:49.640 --> 0:44:54.040 Further, well, Grace, I think critics might say, Okay, I 0:44:54.200 --> 0:44:58.000 understand the criticisms that you have of capitalism, but show 0:44:58.120 --> 0:45:00.640 me a better system out there. Can you show us 0:45:00.680 --> 0:45:01.280 a better system? 0:45:02.480 --> 0:45:02.719 Yeah? 0:45:02.800 --> 0:45:05.759 So the third part of my book is really dedicated 0:45:06.160 --> 0:45:09.719 to thinking about alternatives, and I actually start at the 0:45:09.840 --> 0:45:12.319 grassroots and community level, because I mean, if you think 0:45:12.360 --> 0:45:14.880 about it, logically, there's this fusion of public and private 0:45:14.960 --> 0:45:16.680 power in the economy. You can't just rely on the 0:45:16.800 --> 0:45:20.200 state to do things to kind of contain what's going 0:45:20.239 --> 0:45:22.880 on the economy. So what is the alternative. You have 0:45:23.040 --> 0:45:25.560 to build people power. You have to build power from 0:45:25.600 --> 0:45:28.520 the ground up. So that means making sure that workers 0:45:28.600 --> 0:45:31.400 are able to organize within their organizations, but also have 0:45:31.520 --> 0:45:33.840 a voice within how those organizations are run. You know, 0:45:33.920 --> 0:45:37.400 when you have more democratic processes within corporations, like you know, 0:45:37.520 --> 0:45:40.560 workers on boards in Germany, for example, they actually perform 0:45:40.600 --> 0:45:43.239 a lot better and the whole system is fairer. But 0:45:43.320 --> 0:45:44.960 I also look at a lot of examples of like 0:45:45.320 --> 0:45:49.359 communities organizing in their local area to build a kind 0:45:49.360 --> 0:45:52.400 of fairer local economy. So we've got this idea of 0:45:52.480 --> 0:45:55.040 community wealth building. There are examples of this in the UK, 0:45:55.200 --> 0:45:58.560 added the US and really like you know, downtrodden places 0:45:58.719 --> 0:46:02.520 like Detroit for example, where local groups have come together 0:46:02.560 --> 0:46:06.560 and they've built cooperatives, they've built community energy companies, they 0:46:06.640 --> 0:46:09.399 build community banks, and they've started to say, how can 0:46:09.480 --> 0:46:12.440 we make our economy work for us instead of the 0:46:12.520 --> 0:46:14.360 big businesses and actually politicians. 0:46:14.640 --> 0:46:16.440 I got to say, Grace, Tim and I are having 0:46:16.480 --> 0:46:19.240 conversations in the break about your book, and you're thinking, 0:46:19.920 --> 0:46:21.120 you said, I'm a socialist. 0:46:21.239 --> 0:46:22.120 You are a socialist. 0:46:22.200 --> 0:46:22.440 I'm not. 0:46:23.160 --> 0:46:25.600 And we're talking a lot about capitalism. And in your book, 0:46:25.760 --> 0:46:28.920 like early on in the introduction, you talk specifically about 0:46:29.680 --> 0:46:33.000 capitalism and this balance between markets and planning, and that 0:46:33.239 --> 0:46:36.080 the planning part of the equation is really important, right, 0:46:36.440 --> 0:46:39.400 how it's being executed, whose interests. 0:46:39.880 --> 0:46:40.760 It is serving? 0:46:41.280 --> 0:46:43.279 And I mean, is this where kind of capitalism has 0:46:43.320 --> 0:46:46.000 gotten into trouble? There are companies out there that are 0:46:46.120 --> 0:46:51.359 great for their workers. Provide pension still great, healthcare great, 0:46:51.440 --> 0:46:55.600 this great that, Like, where did the disconnect happen? In 0:46:55.680 --> 0:46:58.640 your view that things kind of was more in the 0:46:58.719 --> 0:47:03.560 favor maybe of owners or shareholders or senior executive versus 0:47:04.120 --> 0:47:05.520 a lot of the folks. 0:47:05.280 --> 0:47:07.880 That are actually on the line doing a lot of 0:47:07.960 --> 0:47:08.279 the work. 0:47:09.840 --> 0:47:12.400 Well, we know when this big shift happened because we 0:47:12.520 --> 0:47:15.640 saw it in the inequality statistics, in the wealth that 0:47:15.760 --> 0:47:17.200 was being froud at the top of the economy, and 0:47:17.200 --> 0:47:20.000 the size of the financial sector, in things like share 0:47:20.040 --> 0:47:22.600 buybacks and dividends. All of these things started booming in 0:47:22.680 --> 0:47:26.160 the nineteen eighties when you had this big deregulation of 0:47:26.239 --> 0:47:28.960 the economy or should I say reregulation of the economy. 0:47:29.400 --> 0:47:32.319 I think there's this sense that the changes that were 0:47:32.320 --> 0:47:35.000 brought in in the nineteen eighties, so things like privatization 0:47:35.880 --> 0:47:39.120 changing to regulation, cut, tax cuts, et cetera. There's this 0:47:39.200 --> 0:47:42.600 idea that that was about shrinking the states and boosting 0:47:42.680 --> 0:47:45.480 the power of the market, and in fact, what you 0:47:45.680 --> 0:47:48.920 saw was not the state becoming smaller. It was just 0:47:49.080 --> 0:47:52.680 the state becoming smaller for some people, generally workers, and 0:47:52.920 --> 0:47:56.040 very very big for the kind of the corporate class 0:47:56.560 --> 0:48:01.440 and the financial class as well. Obvious manifestation of this 0:48:01.760 --> 0:48:04.680 was of course the massive bailouts of the banking crisis, 0:48:04.880 --> 0:48:08.000 but you saw this all throughout the pandemic as well. 0:48:08.160 --> 0:48:11.960 I did some research just looking into the astonishing levels 0:48:12.000 --> 0:48:15.120 of actually corruption I don't think there's another word for it. 0:48:15.239 --> 0:48:19.359 That characterized some of the stimulus packages in the US 0:48:19.480 --> 0:48:21.840 and also in other parts of the world, where you 0:48:22.000 --> 0:48:25.640 had you know, government funding going to firms that were 0:48:25.719 --> 0:48:29.760 owned by congress people, and then those firms donating tons 0:48:29.800 --> 0:48:32.640 of money to the re election campaigns of those congress people. 0:48:33.680 --> 0:48:36.360 So you know, this idea that the changes that we 0:48:36.520 --> 0:48:40.120 had that led to you know, rising in equality and 0:48:41.360 --> 0:48:43.040 you know, this big shift empower in the economy. 0:48:43.160 --> 0:48:45.880 But that was all legitimate that was to be. 0:48:46.000 --> 0:48:48.480 Sure, to be sure, and to be fair, and there 0:48:48.520 --> 0:48:51.360 right during the pandemic, different from many would argue what 0:48:51.520 --> 0:48:53.719 happened in the Great Financial Crisis where the money went 0:48:53.719 --> 0:48:56.120 straight to companies versus Main Street. Right, we know a 0:48:56.160 --> 0:48:57.719 lot of people losing homes and so on and so 0:48:57.920 --> 0:49:01.360 forth weren't getting the assistance that the banks were getting 0:49:01.400 --> 0:49:04.320 and other companies were getting, if you will, during the pandemic, 0:49:04.520 --> 0:49:06.799 money did go though to main Street. We still talk 0:49:06.840 --> 0:49:10.680 about it. You know that that support has stayed with 0:49:10.880 --> 0:49:14.040 a lot of individuals and households for years coming off 0:49:14.120 --> 0:49:17.279 the pandemic. So, to be fair, individuals also got it 0:49:17.640 --> 0:49:18.080 as well. 0:49:19.360 --> 0:49:23.080 Well, yes, but a lot of that just went straight 0:49:23.200 --> 0:49:25.840 through to paying back debt so ended up with the 0:49:25.880 --> 0:49:28.920 banks or paying rent, so it ended up with landlords. 0:49:29.840 --> 0:49:31.759 And actually there's this a really interesting case study of 0:49:31.920 --> 0:49:34.239 a couple of big corporate landlords in the US that 0:49:34.400 --> 0:49:37.719 received tons of government funding throughout the pandemic and were 0:49:37.800 --> 0:49:40.880 told to kind of enforce this eviction is moralorium that 0:49:40.960 --> 0:49:43.640 was supposed to be implemented. And there's this fascinating example 0:49:43.680 --> 0:49:45.200 of this corporate landlord that I look at in the 0:49:45.280 --> 0:49:49.160 book that basically used the uncertainty around the pandemic to 0:49:49.280 --> 0:49:53.960 scare people out of rental accommodation, basically telling their tenants 0:49:54.040 --> 0:49:58.239 that the evictions moreprium wasn't being enforced and they would 0:49:58.280 --> 0:50:00.840 be kicked out if they didn't leave volunteer at the 0:50:00.880 --> 0:50:03.880 same time as receiving government funding, which I think was 0:50:03.920 --> 0:50:04.400 really to. 0:50:04.480 --> 0:50:08.040 Horrifying Chris, It's so interesting to hear you, to hear 0:50:08.080 --> 0:50:12.320 you speak, and also to seek in the book. I 0:50:12.440 --> 0:50:16.880 think politically, at least here in the US, you wouldn't 0:50:16.920 --> 0:50:20.880 necessarily be surprised to hear former President Trump bring up 0:50:20.880 --> 0:50:25.640 some of these points at Rows and indeed this idea 0:50:26.000 --> 0:50:28.680 of populism that has caught on here in the United 0:50:28.719 --> 0:50:31.719 States over the last eight years or so in response 0:50:31.840 --> 0:50:34.799 to what we saw after the Great Financial Crisis. Talk 0:50:34.800 --> 0:50:37.200 a little bit about the then diagram and the sort 0:50:37.200 --> 0:50:42.080 of the strange bedfellows one could argue with socialism and 0:50:42.960 --> 0:50:45.799 the way that you describe it, and then also with populism. 0:50:47.040 --> 0:50:50.240 This is kind of why I wrote the book, because 0:50:50.560 --> 0:50:55.080 people like Donald Trump succeed when the average person feels really, 0:50:55.160 --> 0:50:57.640 really powerless, and you see this in the UK as well. 0:50:57.680 --> 0:51:01.120 You know, extremist politicians doing well. And when you ask 0:51:01.200 --> 0:51:04.040 people why they vote for these people, it's basically them saying, 0:51:04.320 --> 0:51:06.520 I don't have any control over my life. The system 0:51:06.640 --> 0:51:09.320 is rigged, so they feel powerless, and then they project 0:51:09.440 --> 0:51:12.840 their sense of political agency onto these strong figures that 0:51:12.920 --> 0:51:15.200 say I'm going to burn the whole system down. Most 0:51:15.239 --> 0:51:18.080 of the time, those strong figures, those anti establishment figures, 0:51:18.200 --> 0:51:20.279 come very much from within the establishment, and you know, 0:51:20.360 --> 0:51:22.680 people like Trump says I'm going to drain the swamp 0:51:22.920 --> 0:51:25.239 and then goes in and delivers this massive package of 0:51:25.320 --> 0:51:29.400 tax cuts that massively benefits big corporations and big businesses 0:51:29.640 --> 0:51:32.080 and does very little actually for the average American. 0:51:32.760 --> 0:51:35.439 But this anger that bubbles up. 0:51:35.400 --> 0:51:39.719 Beneath the surface of our very unequal economies ends up 0:51:39.800 --> 0:51:42.400 feeding into the rise of the far right and the 0:51:42.480 --> 0:51:46.160 rise of a kind of extremist populist politicians. If we 0:51:46.239 --> 0:51:49.759 aren't able to identify it and provide an explanation that 0:51:49.920 --> 0:51:52.960 isn't just conspiracy theories, and you know, this is such 0:51:52.960 --> 0:51:55.040 a big thing that post pandemic. If it's like conspiracy 0:51:55.080 --> 0:51:58.880 theories about who's running the world economy, and you know, 0:51:59.120 --> 0:52:01.520 like the World's Economic Forum and the great reset and things. 0:52:02.040 --> 0:52:03.600 And I think all of that feeds into this sense 0:52:03.640 --> 0:52:07.359 of like we're powerless. We know that lots of stuff 0:52:07.440 --> 0:52:09.520 is going on up there in the plows, but we 0:52:09.560 --> 0:52:10.080 don't feel that. 0:52:10.120 --> 0:52:11.600 We can control it well. 0:52:11.719 --> 0:52:14.239 And I feel like sortays like follow the money, like 0:52:14.280 --> 0:52:17.759 whenever there's money involved. It feels like that's how the 0:52:17.920 --> 0:52:21.640 gaps in many ways can often widen grace. We unfortunately 0:52:21.680 --> 0:52:23.880 only have about a minute left here, So what's the 0:52:23.960 --> 0:52:26.520 way forward in your view? If we don't want to 0:52:26.520 --> 0:52:30.840 become socialists and continue to operate under a capitalistic society? 0:52:32.680 --> 0:52:34.359 What's the way forward in your view? And got about 0:52:34.360 --> 0:52:36.160 a minute left here? So I think the key thing 0:52:36.239 --> 0:52:37.360 here is accountability. 0:52:37.680 --> 0:52:41.279 Capitalism is supposed to have markets to enforce accountability, to 0:52:41.360 --> 0:52:44.120 make sure that corporations can't get too big, that the 0:52:44.239 --> 0:52:45.920 rich can't get too rich, because there are all these 0:52:46.000 --> 0:52:49.319 checks and balances, but we don't really have those right now. 0:52:49.600 --> 0:52:52.279 So the question is how do we enforce accountability? And 0:52:52.400 --> 0:52:56.120 that has to come through real democracy, democracy and our corporations, 0:52:56.160 --> 0:52:59.800 democracy in our communities, democracy in our governments everywhere throughout 0:52:59.800 --> 0:53:01.719 the and that's really what I want to see. 0:53:01.719 --> 0:53:03.200 But if they don't want it, how do you get it? 0:53:03.239 --> 0:53:04.320 Those are the folks in power. 0:53:04.600 --> 0:53:07.280 As I remember coming off of the pandemic and George 0:53:07.320 --> 0:53:09.359 Floyd about people who said, I don't have a seat 0:53:09.360 --> 0:53:11.200 at the table to help change things, and these were 0:53:11.600 --> 0:53:15.399 black individuals, people who don't have a seat at the table. 0:53:15.440 --> 0:53:16.239 How do you change things? 0:53:16.280 --> 0:53:16.480 Again? 0:53:16.600 --> 0:53:17.960 Just about thirty seconds forgive me. 0:53:18.960 --> 0:53:21.040 You've got to make trouble. They're not going to give 0:53:21.160 --> 0:53:23.759 power away. You have to build power from the ground up. 0:53:23.800 --> 0:53:25.640 Whether you're a unionist and you want to see at 0:53:25.680 --> 0:53:27.960 the table, you've got to organize in your workplace, if 0:53:28.000 --> 0:53:31.560 in your community you're being exploited or oppressed. Again, we've 0:53:31.560 --> 0:53:34.120 got to organize. We've got to try and build alternative 0:53:34.160 --> 0:53:37.560 structures and again not just protests, but really seeing ways 0:53:37.640 --> 0:53:40.239 that communities can come together and say we're going to 0:53:40.320 --> 0:53:41.600 change the way our economy works. 0:53:41.880 --> 0:53:44.880 I feel like another relevant conversation for our times, Grace 0:53:45.680 --> 0:53:48.040 step by again, I'd love to continue with you, guys, 0:53:48.320 --> 0:53:51.719 with you specifically rather this conversation. Grace Blakeley her new 0:53:51.760 --> 0:53:55.399 book Vulture Capitalism, corporate Crimes, backdoor bailouts, and the Death 0:53:55.440 --> 0:53:55.960 of Freedom. 0:53:56.840 --> 0:53:59.040 Really interesting stuff, right, Yeah, you're. 0:53:58.880 --> 0:53:59.800 Ready to be a socialist. 0:54:00.160 --> 0:54:01.720 I'm ready to talk more to Grece. 0:54:02.360 --> 0:54:02.840 I'm ready to. 0:54:02.800 --> 0:54:04.960 Talk more to Grace too. All right, this is Bloomberg. 0:54:06.760 --> 0:54:10.239 You're listening to the Bloomberg Business Week podcast. Catch us 0:54:10.320 --> 0:54:13.520 live weekday afternoons from two to five pm Easter Listen 0:54:13.600 --> 0:54:15.759 on Apple car Play and ed Brote Auto with a 0:54:15.800 --> 0:54:18.800 Bloomberg Business app, or watch us live on YouTube. 0:54:20.640 --> 0:54:22.520 Plenty ahead in our second hour of the weekend edition 0:54:22.560 --> 0:54:25.600 to Bloomberg Business Week, including how the king of sitcoms 0:54:25.640 --> 0:54:28.600 went from writing a TV show about young scientists to 0:54:28.719 --> 0:54:32.239 helping students become scientists. We'll check in with TV writer, 0:54:32.400 --> 0:54:33.879 producer and director Chuck Lori. 0:54:34.080 --> 0:54:34.560 This was fun. 0:54:34.680 --> 0:54:35.480 This was a lot of fun. 0:54:35.560 --> 0:54:38.719 Plus the sports executive turned a theme park and experiential 0:54:38.880 --> 0:54:41.920 CEO on the theme park business and playing to consumers. 0:54:42.040 --> 0:54:44.759 And a great story from his daughter about when they 0:54:44.840 --> 0:54:47.040 had to move. But you'll just have to wait and listen. 0:54:47.400 --> 0:54:47.680 All right. 0:54:47.800 --> 0:54:50.920 In pursuits, it's the opposite of quiet luxury, but with 0:54:51.280 --> 0:54:54.040 this much speed, you may not care. What's it like 0:54:54.160 --> 0:54:56.439 to drive the three hundred and forty five thousand dollar 0:54:56.640 --> 0:55:00.640 McLaren seven fifty s Spider or hang out at a 0:55:00.680 --> 0:55:04.280 Saudi Arabian oasis and archaeological site turned master plan luxury 0:55:04.320 --> 0:55:08.520 tourism outpost our Hannah Elliott did both. She stops buying 0:55:08.719 --> 0:55:09.040 just a bit. 0:55:09.280 --> 0:55:11.400 Hey, first up this hour, Carol, have you been to 0:55:11.480 --> 0:55:12.319 Lego Land of her Op? 0:55:12.400 --> 0:55:12.560 Kay? 0:55:12.600 --> 0:55:14.480 What about the London Eye, No, it's not too late. 0:55:14.640 --> 0:55:14.839 Yeah. 0:55:14.920 --> 0:55:16.760 Now, well, these are just a couple of the entertainment 0:55:16.840 --> 0:55:20.400 destinations owned by Merlin Entertainments, formerly a publicly traded company 0:55:20.440 --> 0:55:23.280 but now with owners including Blackstone and the Canadian Pension 0:55:23.320 --> 0:55:24.359 Plan Investment Board. 0:55:24.440 --> 0:55:25.960 Yeah, they've got their hands and a lot of things 0:55:26.040 --> 0:55:27.719 and a great read on what we are all up to. 0:55:28.120 --> 0:55:30.880 It is a British entertainment company parks and attractions in 0:55:30.920 --> 0:55:34.000 twenty three countries around the world, serving more than sixty 0:55:34.120 --> 0:55:36.920 million guests per year. Scott O'Neil is the CEO at 0:55:36.960 --> 0:55:40.600 Merlin Entertainments. He was also previously president of Madison Square 0:55:40.640 --> 0:55:43.479 Garden Sports, owner of the Knicks, Rangers, Liberty and more. 0:55:44.000 --> 0:55:47.319 Also the former CEO of Harris Blitzer Sports and Entertainments, 0:55:47.360 --> 0:55:50.720 which includes the Philadelphia seventy six Ers, New Jersey Devils 0:55:50.760 --> 0:55:52.880 and more. He's seen a lot in the world of sports. 0:55:53.200 --> 0:55:55.800 We began by asking about how it was to relocate 0:55:55.920 --> 0:55:56.480 to the UK. 0:55:57.000 --> 0:56:01.040 You know, I'm pretty happy moved to the UK. It's 0:56:01.080 --> 0:56:01.880 been a big adjustment. 0:56:01.920 --> 0:56:03.320 Do you like that? I do. 0:56:03.680 --> 0:56:06.640 I didn't anticipate how challenging the move would be. 0:56:07.120 --> 0:56:10.360 I've grown up in this little bubble between New York, Philly, Connecticut, 0:56:10.400 --> 0:56:11.759 New Jersey, and. 0:56:12.400 --> 0:56:14.480 What was challenging the weather or just different. 0:56:14.640 --> 0:56:17.440 I just think, well, I have my youngest is seventeen 0:56:17.480 --> 0:56:19.440 years old, So taking a seventeen year old out, I 0:56:19.480 --> 0:56:21.279 had just have to do this one quick story. Yeah 0:56:21.600 --> 0:56:23.680 is you know, we're having that heart to heart, that 0:56:23.840 --> 0:56:27.239 father daughter connect conversation, and she she holds up her 0:56:27.280 --> 0:56:29.440 finger and points in my chest. 0:56:29.480 --> 0:56:33.800 And says, dad, let me get this straight. Your career 0:56:34.040 --> 0:56:36.759 is more important than my happiness. And she turns and 0:56:36.880 --> 0:56:38.719 just walks out of the room. And I was like, 0:56:38.880 --> 0:56:40.239 but but I love you. 0:56:40.880 --> 0:56:41.920 I mean I love you. 0:56:42.040 --> 0:56:45.560 Honey By lines up. So that transition was harder than 0:56:45.600 --> 0:56:45.919 we thought. 0:56:47.360 --> 0:56:50.320 But she's happy now in London with you. 0:56:50.480 --> 0:56:51.320 She's in London with me. 0:56:52.000 --> 0:56:56.560 She won an international basketball championship, gold medal, scholar congratulations. 0:56:56.640 --> 0:57:00.239 So she's doing great. She's thriving. My wife's happy, so yes, 0:57:00.280 --> 0:57:00.759 so life ski. 0:57:00.960 --> 0:57:02.720 Yeah, you'll can you imagine? 0:57:02.920 --> 0:57:05.080 I can tell you it very much. Boom boom, She'll 0:57:05.120 --> 0:57:08.239 never forgive you. But no, okay, no, yeah, that's okay. 0:57:09.480 --> 0:57:13.520 You know, your business is all about leisure and discretionary spending, 0:57:13.840 --> 0:57:16.600 and you've got a great view around the world because 0:57:17.080 --> 0:57:19.920 you're in what more than twenty countries at this. 0:57:19.960 --> 0:57:21.400 Point, twenty three countries. 0:57:21.560 --> 0:57:23.400 So just give us an idea of how things are 0:57:23.440 --> 0:57:25.640 going when it comes to that spending and doing stuff. 0:57:26.120 --> 0:57:27.600 Yeah, well, we're pretty fortunate. 0:57:28.440 --> 0:57:31.760 For those of us who had children in COVID, it 0:57:31.880 --> 0:57:33.919 was a little close and we couldn't leave the house. 0:57:34.840 --> 0:57:38.440 And when COVID ended, we got on planes as quickly 0:57:38.480 --> 0:57:40.640 as we could. But the one thing we were searching 0:57:40.720 --> 0:57:43.480 for was connection and meaning and memories. And we moved 0:57:43.480 --> 0:57:46.640 away from the economy of things the economy of experiences, 0:57:47.040 --> 0:57:50.000 and so we have a lot of tailwinds. It is 0:57:50.120 --> 0:57:53.400 a look, it's it's we go from Malaysia, Korea, Japan, 0:57:53.640 --> 0:57:55.920 China all the way to the US and everything in between. 0:57:56.240 --> 0:57:57.960 H and so we get to see quite a bit. 0:57:58.000 --> 0:58:01.440 So whenever people are like, how's business, I'm like, so, 0:58:01.520 --> 0:58:01.880 where is it? 0:58:01.960 --> 0:58:02.120 Back? 0:58:02.640 --> 0:58:04.800 China? Is tougher than we anticipated. 0:58:04.880 --> 0:58:07.960 We anticipated even this year of recovery a little bit 0:58:08.040 --> 0:58:09.439 quicker than it than it's come. 0:58:09.680 --> 0:58:11.480 So people are doing it or is it just a 0:58:11.720 --> 0:58:12.680 fraction of what it was. 0:58:12.760 --> 0:58:16.960 It's a slower Yeah, yeah, Domestic tourism slower. Their international 0:58:17.040 --> 0:58:18.800 tourism coming out of China is a bit more than 0:58:18.840 --> 0:58:21.680 we thought. US is still fine. The US is great, 0:58:21.720 --> 0:58:24.600 and the US consumer we're wonderful people. 0:58:25.200 --> 0:58:26.040 You know, spend money. 0:58:26.160 --> 0:58:28.800 We do love to spend money, and we love experiences 0:58:28.880 --> 0:58:30.200 and memories and fun things. 0:58:30.240 --> 0:58:33.000 So does that mean we're not pre pandemic for you guys, 0:58:33.080 --> 0:58:33.560 We're over. 0:58:33.480 --> 0:58:37.320 Pre pandemic, over pre both in terms of revenue and volume. 0:58:37.960 --> 0:58:40.520 And the UK is a little schizophrenic, very good for 0:58:40.640 --> 0:58:43.840 internationals last year. This year it's a little slower. Domestics 0:58:44.160 --> 0:58:47.480 is slow and Europe slow. Now remember we had bizarre 0:58:47.680 --> 0:58:50.360 weather last year. Okay, so you know most of our 0:58:50.400 --> 0:58:53.240 peers Disney and Universal and I know you've never most 0:58:53.280 --> 0:58:56.880 people listening maybe haven't heard of Merlin Entertainments before, but 0:58:57.000 --> 0:58:59.120 we are the number two theme parks in the tracks 0:58:59.160 --> 0:59:00.000 this business indie world. 0:59:00.240 --> 0:59:01.400 Does that frustrate you that? 0:59:01.640 --> 0:59:03.160 Like if you think about so many of those names, 0:59:03.280 --> 0:59:05.280 Lego Land, like we just went through them. I mean, 0:59:05.320 --> 0:59:09.000 they're well known, kids are great, but that the recognition 0:59:09.240 --> 0:59:09.720 it's coming. 0:59:10.040 --> 0:59:12.080 Okay, it is coming like a great chain. 0:59:12.280 --> 0:59:14.480 But it doesn't even matter if these brands aren't necessarily 0:59:14.480 --> 0:59:17.040 connected to one another. People know that Madame Tusodes is 0:59:17.080 --> 0:59:18.760 owned by the same folks who on Legoland. 0:59:18.840 --> 0:59:19.520 I think it does. 0:59:19.600 --> 0:59:22.160 I think when you talk about not to be too technical, 0:59:22.200 --> 0:59:24.360 but we are a bloomberg, you know, when you talk 0:59:24.440 --> 0:59:28.480 about ibadah meeting multiple, when you think about how do 0:59:28.520 --> 0:59:30.720 you grow your multiple? One of the things that that 0:59:30.840 --> 0:59:34.160 I think matters to Disney is their brand, you know. 0:59:34.200 --> 0:59:35.920 And I think one of the things that matters to 0:59:36.240 --> 0:59:39.320 Universal are the licensed partners, the brand ip partners. And 0:59:39.360 --> 0:59:41.720 you look at ours green you know, you take you 0:59:41.800 --> 0:59:45.040 know personally, I take Legoland and Peppa and Madame Tussaus 0:59:45.040 --> 0:59:46.840 and I put them up against there, so I and 0:59:47.080 --> 0:59:49.400 and we're dragging behind them. Now, we're we're way ahead 0:59:49.440 --> 0:59:52.120 of our the US regional theme parks like the Six 0:59:52.200 --> 0:59:55.200 Flags and the Sea Worlds and the Cedar Fairs in 0:59:55.320 --> 0:59:57.280 terms of multiple, but I think we've got to we 0:59:57.440 --> 1:00:00.840 have a journey ahead of us to to map that 1:00:01.160 --> 1:00:03.520 the brand and the experience to where. 1:00:03.360 --> 1:00:05.240 We are the movie or something like like, how do 1:00:05.320 --> 1:00:06.480 you know? I'm serious, like there. 1:00:06.480 --> 1:00:08.400 Could be some content around it, right, So we have 1:00:08.440 --> 1:00:10.640 a lot of different brands and so so we have 1:00:10.760 --> 1:00:12.840 to take a portfolio approach for sure. 1:00:13.400 --> 1:00:17.480 But yeah I did no I the Mattel CEO talk 1:00:17.520 --> 1:00:18.960 about you know, it was amazing. 1:00:19.160 --> 1:00:20.960 He's amazing, amazing executive. 1:00:20.560 --> 1:00:22.440 For sure, Just like how you kind of you know, 1:00:22.640 --> 1:00:23.520 capitalize it all of that. 1:00:24.040 --> 1:00:26.600 Yeah, well, well the whole host of things. You know, 1:00:26.680 --> 1:00:30.080 I am following a founder, Sir Nick Varney. He's knighted, 1:00:30.880 --> 1:00:33.160 and I thought to myself, could that be me someday? 1:00:33.680 --> 1:00:37.560 So like when you're doing I'll say, yes, I'm taking 1:00:37.640 --> 1:00:38.040 the job. 1:00:38.120 --> 1:00:42.280 But it's sir, I somehow don't happened. 1:00:42.480 --> 1:00:44.640 Maybe she'll have to stay at school and take a 1:00:44.760 --> 1:00:48.160 test when during the ceremony that could happen. Let's not 1:00:48.200 --> 1:00:48.800 get ahead of her. 1:00:50.040 --> 1:00:53.120 So following a founder is there's so many wonderful things. 1:00:53.160 --> 1:00:55.000 And I come from a family of founders, and my 1:00:55.080 --> 1:00:57.280 brothers and sisters of all of family, companies will only 1:00:57.320 --> 1:00:59.360 sell out and out of the five of us, and 1:00:59.800 --> 1:01:03.520 and and the magic the stuff. 1:01:03.800 --> 1:01:06.280 You can't see this on the radio, but the feel 1:01:06.440 --> 1:01:08.120 of the business that you have as a founder thirty 1:01:08.200 --> 1:01:10.280 or fashion bam. 1:01:12.120 --> 1:01:15.520 So so there's so many wonderful things and they feel 1:01:15.560 --> 1:01:16.919 the business so well, and a lot of this stuff 1:01:16.920 --> 1:01:19.600 becomes intuitive and that's hard. And they have like this 1:01:19.800 --> 1:01:22.600 father or motherly like figure, you know, like a larger 1:01:22.680 --> 1:01:24.680 than life figure, and sort of come in after that 1:01:24.800 --> 1:01:26.440 their whole host of challenges. 1:01:26.040 --> 1:01:26.919 Culturally, et cetera. 1:01:27.000 --> 1:01:31.800 With leadership, but there's also usually these gaping holes of opportunity. 1:01:32.280 --> 1:01:36.560 And because the founders have such rhythm and intuitiveness in 1:01:36.600 --> 1:01:39.040 the business, you have things that I think can really 1:01:39.160 --> 1:01:43.600 underpin future success, like digitizing the business, like driving data, 1:01:43.760 --> 1:01:47.400 like dynamic pricing, like the stuff that I've my whole 1:01:47.480 --> 1:01:50.200 life have made made a business of. Come into a 1:01:50.280 --> 1:01:52.200 new business and you think, you know, my eyes are 1:01:52.200 --> 1:01:53.560 as big as saftware as I'm thinking. 1:01:53.720 --> 1:01:55.440 Okay, there's enough opportunity. 1:01:55.040 --> 1:01:56.720 When you think about the different types of products that 1:01:56.800 --> 1:01:59.840 you offer, the different attractions that you have, what's growing 1:02:00.200 --> 1:02:03.120 and what's struggling right now, Like where's the opportunity for growth? 1:02:03.560 --> 1:02:06.280 Yeah, Well, in Lego Land, that's about forty percent of 1:02:06.360 --> 1:02:08.360 our business Lego Land Resorts. There are ten of them, 1:02:08.480 --> 1:02:16.960 three in the US, Korea, Japan, Malaysia, Dubai, Germany, Denmark, London, 1:02:17.000 --> 1:02:20.439 et cetera. We're building a one in Shanghai in China 1:02:20.480 --> 1:02:23.760 as well. It's a really good business and we have 1:02:23.960 --> 1:02:27.760 to invest in making premium. It's like, sorry, but that 1:02:27.960 --> 1:02:30.520 brand is wonderful well recognition. 1:02:30.200 --> 1:02:32.440 You know, and you know Neil's who's the CEO. 1:02:32.520 --> 1:02:35.360 They're just understands the brand and how to grow it, 1:02:35.440 --> 1:02:38.200 and their partnerships are smart and they're wonderful people. They 1:02:38.280 --> 1:02:40.960 know how to do deals and drive deals and they're 1:02:41.000 --> 1:02:44.320 one of our largest investors and so so that's an 1:02:44.440 --> 1:02:48.480 unbelievable opportunity. But we have to continue to invest, invest, invest, 1:02:48.520 --> 1:02:50.840 how do you make that more premium. That's what we're 1:02:50.880 --> 1:02:53.840 finding is like there is a flight to quality. Premium 1:02:53.920 --> 1:02:56.240 is going to matter. Our resort theme parks business a 1:02:56.280 --> 1:02:57.880 lot more complicated. It's kind of like if you can 1:02:57.920 --> 1:02:59.720 imagine a six flags dropped in Europe, that's. 1:02:59.600 --> 1:03:00.400 What we have in Europe. 1:03:01.120 --> 1:03:04.080 And I'm of the school of bigger is better. So 1:03:04.240 --> 1:03:07.000 mega resorts will matter and regional ones will really struggle. 1:03:07.160 --> 1:03:09.120 And so we're on the effort of that, and then 1:03:09.160 --> 1:03:11.640 where I think there's the max growth from us. We 1:03:11.760 --> 1:03:13.720 had over twenty percent growth in this segment. We call 1:03:13.800 --> 1:03:17.400 it gateway and London is the best example. We have 1:03:17.840 --> 1:03:20.040 two what we call must see, must do We call 1:03:20.040 --> 1:03:23.400 them anchor attractions, the London Eye by the Way and 1:03:23.480 --> 1:03:25.760 Madame Tuo Sad's the original, and then we have three 1:03:25.800 --> 1:03:29.880 other attractions. One out of every four tourists into London 1:03:30.400 --> 1:03:33.040 come to one of our attractions, and forty percent of 1:03:33.120 --> 1:03:36.080 them come to at least two. So that's what I 1:03:36.200 --> 1:03:39.920 call like cluster penetration and building those in the ten 1:03:40.000 --> 1:03:42.080 most important tourist cities in the world is where I 1:03:42.080 --> 1:03:42.680 think our growth. 1:03:42.560 --> 1:03:43.120 Is going to come from. 1:03:44.240 --> 1:03:45.760 Just got a minute left, man, I wish we had 1:03:45.800 --> 1:03:48.640 ten more money too. I got to ask you, though, 1:03:48.640 --> 1:03:51.720 with your sports background, do you miss it being actively 1:03:51.800 --> 1:03:53.600 involved in like running it, you know, a team and 1:03:53.640 --> 1:03:54.320 so and so forth. 1:03:54.400 --> 1:03:56.680 There are elements I love and miss. It's mostly about 1:03:56.720 --> 1:03:57.120 the people. 1:03:57.360 --> 1:03:59.000 Yeah, you know, in terms of when you when you 1:03:59.080 --> 1:04:02.280 hit a certain level at those jobs, it becomes a 1:04:02.400 --> 1:04:05.400 different type of job. And if you compare that type 1:04:05.400 --> 1:04:07.040 of job to this one, it's not even close. I 1:04:07.080 --> 1:04:09.680 mean I've got people purpose and scale, which is what 1:04:09.720 --> 1:04:12.320 I'm looking for. I'm like learning every day. I was 1:04:12.400 --> 1:04:14.760 in that business for so long. I knew it and 1:04:14.840 --> 1:04:16.160 I want to stretch a bit. 1:04:16.840 --> 1:04:18.600 Thirty seconds left. Are you going to add to go 1:04:18.720 --> 1:04:21.240 back to your current job? Is there stuff to add 1:04:21.280 --> 1:04:21.840 to the portfolio? 1:04:21.920 --> 1:04:22.000 Oh? 1:04:22.120 --> 1:04:24.439 Yes, so acquisitions will be coming. 1:04:24.640 --> 1:04:24.800 Yes. 1:04:24.960 --> 1:04:28.520 We just bought the Orlando I yeah, in icon Park. 1:04:28.560 --> 1:04:30.800 So if you're down in Orlando swing By, it's a 1:04:30.840 --> 1:04:35.480 great respite from the difficulty sometimes of grinding through a resort. 1:04:35.520 --> 1:04:36.960 We have a Lego Land resort down there as well. 1:04:37.640 --> 1:04:39.360 But yes, more to come and that's going to be 1:04:39.560 --> 1:04:41.600 an anchor for O Orlando Cluster. 1:04:42.040 --> 1:04:43.760 Good to know, Good to know, Come back soon. 1:04:43.840 --> 1:04:47.480 Come see me at my resorts. That daughter, I will agree, 1:04:48.120 --> 1:04:49.480 she will actually love it, but it might be a 1:04:49.520 --> 1:04:50.960 longer show. Thanks guys. 1:04:51.080 --> 1:04:53.200 Scott O'Neil, thank you so much, Chief executive officer of 1:04:53.240 --> 1:04:56.400 Merlin Entertainments. Joining us right here in our Bloomberg Interactive 1:04:56.400 --> 1:04:57.080 Brokers studio. 1:05:03.480 --> 1:05:07.320 You're listening to the Bloomberg Business Week Podcast. Listen live 1:05:07.440 --> 1:05:10.240 each weekday starting at two pm Eastern on Apple car 1:05:10.400 --> 1:05:13.280 Play and Android Auto with the Bloomberg Business app. You 1:05:13.360 --> 1:05:16.600 can also listen live on Amazon Alexa from our flagship 1:05:16.680 --> 1:05:20.480 New York station Just say Alexa playing Bloomberg eleven thirty. 1:05:22.560 --> 1:05:25.560 Oh, you know, persons in a hot tense state. The 1:05:25.680 --> 1:05:27.360 nearly fourteen million. 1:05:27.160 --> 1:05:30.560 Years ago expansion started waiting, the years began to cool, 1:05:30.600 --> 1:05:33.760 theandros began to Julieandrew Calls developed tools. 1:05:33.600 --> 1:05:36.800 We build a wand there this file, Sciences to Be 1:05:36.960 --> 1:05:39.240 unravel started. 1:05:39.280 --> 1:05:41.880 Whist the team bank All. 1:05:41.840 --> 1:05:42.960 Right, everybody, you know it well. 1:05:43.120 --> 1:05:47.880 It aired for twelve seasons September of seven to May 1:05:48.000 --> 1:05:48.800 of twenty nineteen. 1:05:48.800 --> 1:05:50.520 We're talking to him about The Big Bang Theory. 1:05:50.640 --> 1:05:50.800 Yeah. 1:05:50.840 --> 1:05:53.000 Well, he's the co creator of the head television comedy 1:05:53.080 --> 1:05:56.240 The Big Bang Theory. It's about young scientists in Southern California. 1:05:56.280 --> 1:05:58.160 As if I needed to tell any of you, the 1:05:58.240 --> 1:06:01.880 world knows and now, well, he wants to help young 1:06:02.000 --> 1:06:05.320 scientists in Southern California even more than he had earlier. 1:06:05.560 --> 1:06:08.480 Yeah, he does through his family foundation. Chuck Luri, the 1:06:08.560 --> 1:06:12.200 TV writer, director, producer, is pledging twenty four point five 1:06:12.240 --> 1:06:14.840 million to the University of California, Los Angeles to help 1:06:14.920 --> 1:06:18.400 more low income students study science and technology. This adds 1:06:18.400 --> 1:06:21.080 to a program he began back in twenty fifteen, and 1:06:21.240 --> 1:06:25.160 this donation will double the number of undergraduate scholarship recipients 1:06:25.200 --> 1:06:27.240 with financial needs to eighty each year. 1:06:27.280 --> 1:06:29.000 Tim This is according to UCLA. 1:06:29.160 --> 1:06:29.280 Well. 1:06:29.320 --> 1:06:32.320 Janet Lauren is Bloomberg News higher education finance reporter. She 1:06:32.480 --> 1:06:35.200 earlier this month wrote about Lorie's latest donation. She's with 1:06:35.320 --> 1:06:38.360 us here in the Bloomberg Interactive Brokers studio. Also joining 1:06:38.440 --> 1:06:40.480 us is Chuck Laurie, who not only co created The 1:06:40.480 --> 1:06:43.240 Big Bang Theory, but also created or co created and 1:06:43.320 --> 1:06:46.560 produced Grace under Fire, Sybil Darman, and Greg two and 1:06:46.560 --> 1:06:49.480 a Half Men, just to name a few. Chuck joins 1:06:49.560 --> 1:06:52.360 us from Los Angeles. Chuck, I do want to start 1:06:52.400 --> 1:06:54.480 with you because you've done a lot of philanthropy. You've 1:06:54.480 --> 1:06:57.840 supported STEM education in public schools before this latest donation. 1:06:58.440 --> 1:07:01.880 Give us your thinking behind the importance of STEM, especially 1:07:01.960 --> 1:07:04.360 when it comes to a world where you know we're 1:07:04.360 --> 1:07:07.600 talking about AI potentially doing a lot of the work 1:07:07.680 --> 1:07:08.000 for us. 1:07:10.160 --> 1:07:14.520 Well, when this all began, AI was not part of 1:07:14.560 --> 1:07:19.439 the conversation, so I really speak to how that changes things. 1:07:19.920 --> 1:07:25.640 But my thinking early on was very simple. We had 1:07:25.680 --> 1:07:31.560 come to understand from various news reports that children here 1:07:31.640 --> 1:07:34.680 and in England because they were watching The Big Bank 1:07:34.800 --> 1:07:40.560 Theory or showing a spike of interest in stemated stem 1:07:40.640 --> 1:07:48.680 related fields at high school and college levels. And that 1:07:48.800 --> 1:07:52.040 was remarkable because that certainly wasn't the original goal for 1:07:52.160 --> 1:07:56.040 the Big Bang Theory to change the trajectory of a 1:07:56.160 --> 1:07:58.280 young person's life. It was happening. 1:07:59.320 --> 1:08:02.040 So I have to admit, as Chuck and I talked before, 1:08:02.200 --> 1:08:05.120 my family and I are huge fans of Young Sheldon. 1:08:05.920 --> 1:08:08.880 Me too, I had not watched The Big Bang Theory. 1:08:08.960 --> 1:08:13.440 We actually was introduced to the characters from Young Sheldon. 1:08:13.560 --> 1:08:16.120 So I have only maybe watched one episode of The 1:08:16.160 --> 1:08:18.000 Big Bank Theory. So all this is new to me. 1:08:18.600 --> 1:08:21.720 But I do know a lot about college financing, and 1:08:22.600 --> 1:08:24.479 one thing Chuck had said to me when we spoke 1:08:24.520 --> 1:08:28.000 earlier about the lack of finances is something he understood 1:08:28.040 --> 1:08:31.599 extremely well because he did not finish college and carried 1:08:31.640 --> 1:08:35.120 around student loans of two thousand dollars for fifteen years, 1:08:35.520 --> 1:08:35.800 So he. 1:08:35.920 --> 1:08:40.240 Understands after fifteen years two thousand was about eight or no. 1:08:41.080 --> 1:08:45.240 Wow, Yes, that's crime the principle of a crude interest, 1:08:45.400 --> 1:08:47.559 But that's a good detail that a lot of people 1:08:47.640 --> 1:08:51.120 out there thinking about college they don't think about and 1:08:51.280 --> 1:08:54.840 what I found remarkableut this program is not only does 1:08:54.920 --> 1:08:58.519 it fun college, but it gives mentorship, which is something 1:08:58.640 --> 1:09:02.439 that is hard hard to get through college without. Could 1:09:02.439 --> 1:09:04.479 you talk a little bit about why that it was 1:09:04.600 --> 1:09:07.360 important and why is it important for you to see, 1:09:07.520 --> 1:09:10.519 you know, kids college graduate college in a reasonable amount 1:09:10.520 --> 1:09:12.600 of time, such as four years, and how difficult that 1:09:12.680 --> 1:09:12.920 can be. 1:09:14.920 --> 1:09:18.000 Well, one of the original goals that I had, for 1:09:18.120 --> 1:09:21.120 better or worse, was to keep things local so that 1:09:21.400 --> 1:09:27.080 I could participate. And local for us here in Los 1:09:27.080 --> 1:09:32.840 Angeles was UCLA, and that was absolutely aided by the 1:09:32.920 --> 1:09:36.400 fact that our science consultant on the Big Bang theory, 1:09:37.439 --> 1:09:44.720 doctor David Salzburg, was a professor of physics at UCLA, 1:09:45.479 --> 1:09:48.639 and so we already had entree to the university through 1:09:48.760 --> 1:09:58.120 David and and wanting to participate and give back. It 1:09:58.240 --> 1:10:03.639 seemed it made sense to do so so by focusing 1:10:03.840 --> 1:10:07.599 on young people who were pursuing or wanted to pursue 1:10:07.800 --> 1:10:14.600 a STEM field at UCLA, and also because it was 1:10:14.680 --> 1:10:20.240 local because it was UCLA because of David. The mentorship 1:10:20.760 --> 1:10:24.320 process was also part of this. We weren't just handing 1:10:24.400 --> 1:10:26.680 out money and saying good luck. For a lot of 1:10:26.720 --> 1:10:29.799 the kids, they were the first generation in their families 1:10:29.920 --> 1:10:33.639 to get a college education, and so they're being thrown 1:10:33.680 --> 1:10:38.160 into a thrown onto a speeding train. You right out 1:10:38.200 --> 1:10:39.839 of the gate mentorship is important. 1:10:41.080 --> 1:10:44.800 Now the information about the scholarship says there's opportunities for 1:10:44.920 --> 1:10:49.320 graduate school funding. We all know how expensive medical school 1:10:49.400 --> 1:10:51.920 could be. Can you talk about was that important to 1:10:51.960 --> 1:10:54.120 you to continue students onto this trajectory? 1:10:55.479 --> 1:10:58.960 Not initially. This thing grew over a period of almost 1:10:59.000 --> 1:11:04.200 ten years now, UH, and and when we realized that 1:11:04.360 --> 1:11:07.880 the success rate we were having with the kids going 1:11:07.960 --> 1:11:14.160 through undergraduate programs UH was phenomenal. And and that's when 1:11:14.200 --> 1:11:19.000 we decided to expand the program into graduate school. And 1:11:19.120 --> 1:11:22.080 again we were initially trying to keep the graduate school 1:11:22.200 --> 1:11:26.160 in in in the UH, in the California system so 1:11:26.360 --> 1:11:29.440 that we could again stay stay close to it and participate. 1:11:30.000 --> 1:11:32.719 Well, and I'm curious to check you know, you guys 1:11:32.760 --> 1:11:35.639 really worked hard to get the science right on the show, right, 1:11:36.160 --> 1:11:40.120 I mean that was obviously a priority. Talking about David 1:11:40.200 --> 1:11:42.720 did Well talk to us about being in that environment 1:11:43.000 --> 1:11:45.880 for you and maybe how that also shaped your thinking 1:11:45.920 --> 1:11:49.439 about where you wanted to commit money towards to help others, 1:11:51.080 --> 1:11:55.080 you know, pursue potentially you know, degrees in the STEM world. 1:11:57.040 --> 1:11:59.559 It begins with the show. The show is about UH, 1:12:00.400 --> 1:12:06.680 a group of somewhat alienated, disenfranchised geniuses and UH, you know, 1:12:06.920 --> 1:12:09.960 struggling to make their way in the world, but clinging 1:12:10.040 --> 1:12:14.240 to one another as the community basically almost a family 1:12:14.360 --> 1:12:17.240 unit in the way they treated one another, both good 1:12:17.280 --> 1:12:22.040 and bad. And so it made sense from the beginning 1:12:22.200 --> 1:12:26.479 that we we we we focus on STEM UH and 1:12:26.800 --> 1:12:29.439 UH for a couple of very practical reasons. One is 1:12:30.360 --> 1:12:34.240 the likelihood that you graduate in one of these fields 1:12:34.840 --> 1:12:39.320 you can get employed. The same can't be said with 1:12:39.479 --> 1:12:44.720 a BA in H in the humanities or communication. I 1:12:44.800 --> 1:12:46.000 think I lost you guys. 1:12:47.840 --> 1:12:50.640 At our liberal arts degrees exactly. 1:12:51.760 --> 1:12:57.720 Disappointing, But those degrees don't necessarily create a U. I 1:12:57.800 --> 1:12:59.800 get I'm losing this thing here. 1:13:00.880 --> 1:13:03.920 Don't worry you, hear you? Yeah, Yeah, we got you. 1:13:04.000 --> 1:13:06.240 Don't worry hey, yeah, go ahead. 1:13:06.240 --> 1:13:06.640 So there it is. 1:13:07.200 --> 1:13:07.559 Go ahead. 1:13:07.640 --> 1:13:12.160 So I, you know, very practically, I wanted to. I 1:13:12.280 --> 1:13:18.360 wanted the program to also, you know, help help young 1:13:18.439 --> 1:13:23.680 people who are going through you know, the journey of 1:13:23.920 --> 1:13:29.800 education to end with employability. Yeah, and and uh that 1:13:29.920 --> 1:13:33.760 may have been a little bit, but it seemed it 1:13:33.960 --> 1:13:38.839 seemed like, Uh, wouldn't it be great to graduate without 1:13:39.040 --> 1:13:41.080 debt and have a job for you? 1:13:41.479 --> 1:13:41.679 Yeah? 1:13:41.960 --> 1:13:45.000 Right, yes, yes, yes, and yes right? What did you 1:13:45.280 --> 1:13:46.680 We have about a minute and a half and then 1:13:46.720 --> 1:13:48.240 we're going to take a break and then come back 1:13:48.280 --> 1:13:50.000 and do more. But what did you study? 1:13:51.880 --> 1:13:52.280 Drugs? 1:13:53.560 --> 1:13:58.280 No, I'm not sure I have a follow up. Now, 1:13:58.320 --> 1:13:59.960 what did you really academically? 1:14:02.160 --> 1:14:06.280 I may have had, It's a dim memory. I was 1:14:06.400 --> 1:14:09.960 talking about a long time ago. There was also rock 1:14:10.040 --> 1:14:14.840 and roll and girl, but it was I think I 1:14:14.960 --> 1:14:16.960 might have been a political science major. I don't know 1:14:17.000 --> 1:14:20.760 if I ever mentioned it to anybody, But yeah, no, 1:14:21.479 --> 1:14:25.360 also a degree also, as they used to say, that 1:14:25.600 --> 1:14:28.759 degree and a token could get you right on the subway. 1:14:28.880 --> 1:14:30.200 A couple of things we want to get to, but 1:14:30.320 --> 1:14:32.599 I do want to ask you about it really stung 1:14:32.720 --> 1:14:33.920 me what you said. 1:14:34.280 --> 1:14:34.960 And Jada put in. 1:14:35.000 --> 1:14:37.440 Her story where she wrote about your donation to UCLA 1:14:38.479 --> 1:14:40.360 that you carried a student learn of about two thousand 1:14:40.479 --> 1:14:42.800 for fifteen years, and you said it it grew to 1:14:42.880 --> 1:14:46.880 eight thousand. The cost of education and this idea of 1:14:47.000 --> 1:14:48.519 you know, kids coming out of school and not having 1:14:48.560 --> 1:14:51.639 any debt that's increasingly becoming a thing of the way past. 1:14:53.000 --> 1:14:55.000 I don't know any thoughts. 1:14:54.800 --> 1:14:58.240 About it as you try to help others who are 1:14:58.479 --> 1:15:02.360 pursuing education and in STEM feels and just thinking about 1:15:02.439 --> 1:15:04.519 kind of a younger generation, how we do it better, 1:15:04.680 --> 1:15:06.439 because it just feels like it's getting out of control 1:15:06.479 --> 1:15:07.320 and not getting better. 1:15:08.800 --> 1:15:09.960 I don't have an answer to that. 1:15:10.439 --> 1:15:11.160 I just know that. 1:15:12.880 --> 1:15:15.439 When State of New York caught up. 1:15:15.360 --> 1:15:19.439 With me, they didn't catch up with me. 1:15:19.560 --> 1:15:21.640 I was very young and naive, and I don't think 1:15:21.680 --> 1:15:28.200 I understood my Social Security number was a target. But 1:15:28.720 --> 1:15:31.320 you know, I spent probably eight or nine years sending 1:15:31.439 --> 1:15:34.720 the State of New York fifty dollars a month, and 1:15:34.840 --> 1:15:39.080 that's how I got out from under it. But I know, 1:15:39.200 --> 1:15:41.640 I don't have a solution for this situation other than 1:15:41.720 --> 1:15:46.880 what we're doing, which is especially you know, seeking out 1:15:47.000 --> 1:15:53.240 kids that are not only exceptionally talented in their scholastic efforts, 1:15:53.320 --> 1:16:00.320 but high financial need, backgrounds underrepresented kids, and where the 1:16:00.360 --> 1:16:03.800 money can be puts a good use in allowing them 1:16:04.160 --> 1:16:08.160 to get that STEM education and walk out of UCLA 1:16:08.320 --> 1:16:12.880 with no debt. Is that seems like a goal worth 1:16:12.920 --> 1:16:14.200 pursuing major gift. 1:16:14.320 --> 1:16:16.479 Yeah, Hey, Chuck, I want to take a step back 1:16:16.720 --> 1:16:20.640 and just ask you about your broader philanthropy, because this 1:16:20.800 --> 1:16:22.519 is just one part of it, the big bank theory, 1:16:22.640 --> 1:16:25.920 UCLA scholars. You've got the Venice Family Clinic, Chuck, Lori 1:16:26.120 --> 1:16:29.519 Rose Avenue Health and Wellness Center. You're working on some 1:16:29.640 --> 1:16:34.000 stuff when it comes to food banks and other healthcare 1:16:34.200 --> 1:16:37.280 related causes, a trust for public land as well in 1:16:37.400 --> 1:16:40.880 the greening of schoolyards. Just give us your philosophy when 1:16:40.920 --> 1:16:43.600 it comes to this type of work, this type of philanthropy, 1:16:43.720 --> 1:16:45.400 like where do you see the biggest needs? 1:16:47.479 --> 1:16:52.080 Well, it began very personally for me. I was very 1:16:52.160 --> 1:16:55.640 ill when I was a young man, desperately ill. I 1:16:55.720 --> 1:16:59.640 did not know about free clinics. I did not know 1:16:59.640 --> 1:17:03.120 where to go. I certainly had no insurance medical insurance, 1:17:03.320 --> 1:17:04.280 and I was. 1:17:04.520 --> 1:17:04.680 I was. 1:17:04.920 --> 1:17:09.120 It was a very frightening several years, and I was 1:17:09.240 --> 1:17:14.000 very fortunate that I managed to recover. But that's that 1:17:14.160 --> 1:17:16.680 stays with you. If you can't afford to see a 1:17:16.800 --> 1:17:20.880 doctor and you need a doctor, that's a fear that 1:17:21.000 --> 1:17:24.720 I don't wish on anyone. And so that the philanthropy 1:17:24.800 --> 1:17:28.759 efforts began back in the nineties for me with Venice 1:17:28.800 --> 1:17:32.599 Family Clinic, which I wish I had actually known about 1:17:33.400 --> 1:17:37.240 when I was in my early twenties, but the idea 1:17:37.280 --> 1:17:39.760 that you could see a doctor without having any money 1:17:39.800 --> 1:17:42.120 in your pocket, I thought it was something I wanted 1:17:42.160 --> 1:17:45.080 to participate in. So I've been involved with the Venice 1:17:45.120 --> 1:17:48.519 Family Clinic for I don't know twenty five twenty six years, 1:17:49.240 --> 1:17:59.519 and that's expanded to other healthcare opportunities, and so that began, 1:18:00.000 --> 1:18:04.160 and then and then the STEM. The STEM efforts, as 1:18:04.200 --> 1:18:08.880 I said before, began really by accident when we found 1:18:08.920 --> 1:18:15.800 out that inexplicably or explicably the Big Bank theory was 1:18:16.000 --> 1:18:20.080 encouraging young people to pursue STEM research STEM fields. 1:18:20.640 --> 1:18:21.479 Uh and uh. 1:18:22.360 --> 1:18:27.080 So the thought was really quite simple, maybe we can help. Yeah, 1:18:27.200 --> 1:18:30.120 I mean, the original goal in making that show is 1:18:30.160 --> 1:18:33.360 to make people laugh. It was not to change again 1:18:33.439 --> 1:18:36.400 to change the trajectory of a young man or young 1:18:36.439 --> 1:18:40.200 woman's life, but it was doing that. So as long 1:18:40.240 --> 1:18:43.559 as I was doing that, let's participate. And that's how 1:18:43.640 --> 1:18:44.719 the scholarship started. 1:18:45.760 --> 1:18:48.360 Well, Young Sheldon has really made us laugh. 1:18:50.000 --> 1:18:50.360 By the way. 1:18:50.400 --> 1:18:54.120 I love, I absolutely love that you're watching Young Sheldon 1:18:54.200 --> 1:18:55.760 and you haven't watched The Big Bank. 1:18:55.880 --> 1:18:59.439 It's a music it's like, it's like a gay but 1:18:59.520 --> 1:19:03.519 it could be away into the original show that it's 1:19:03.520 --> 1:19:04.280 spun off from. 1:19:04.800 --> 1:19:08.480 But he's a great character, and so is doctor Sturgis. 1:19:08.560 --> 1:19:10.120 I love Doctor surget. 1:19:10.160 --> 1:19:13.840 Wally Wally, Wally Sean. Yeah, we've been so blessed with 1:19:14.040 --> 1:19:17.760 some of the casting at Begley and while Sean, it's 1:19:17.800 --> 1:19:19.720 been a terrific experience and. 1:19:19.800 --> 1:19:27.439 The university president that depiction seems entirely realistic to me. Well, 1:19:27.479 --> 1:19:31.000 how did you decide to pivot into young Sheldon and 1:19:31.600 --> 1:19:34.680 you know he finished college in what three years and 1:19:35.520 --> 1:19:38.519 the idea of going to East Texas Tech, And how 1:19:38.560 --> 1:19:40.840 did that all come about? Because it is it is 1:19:40.920 --> 1:19:43.559 a sort of a realistic path or a young genius 1:19:43.680 --> 1:19:43.840 like that. 1:19:45.600 --> 1:19:49.360 Well, the backstory of Sheldon on The Big Bang Theory 1:19:50.120 --> 1:19:53.720 was that he graduated college at fourteen or thirteen or 1:19:53.720 --> 1:19:57.599 fourteen I forget exactly, and then went to cal Tech 1:19:58.240 --> 1:20:05.680 to do postgraduate work. And so we had already laid in, 1:20:06.000 --> 1:20:11.559 you know, the backstory for Sheldon's journey graduating, graduating, high 1:20:11.560 --> 1:20:16.240 school at the age of eleven, and and uh, you know, 1:20:16.320 --> 1:20:19.120 in a in an East Texas town where they simply 1:20:19.240 --> 1:20:23.479 did not have the wherewithal to deal with a genius 1:20:23.560 --> 1:20:27.839 of that of that of that size, and East Texas 1:20:27.920 --> 1:20:31.120 Tech we invented in order to in order to keep him, 1:20:31.479 --> 1:20:33.640 you know, to keep him. Look, so we can do 1:20:33.760 --> 1:20:37.599 the show and uh, and for have him ripping through 1:20:38.360 --> 1:20:41.679 that university as well on his way to cal Tech 1:20:41.760 --> 1:20:45.720 and ultimately, as we did. If you watch The Big 1:20:45.800 --> 1:20:48.600 Bank Theory, he does win a Nobel Prize in the 1:20:48.760 --> 1:20:49.519 in the final up. 1:20:50.760 --> 1:20:51.479 We definitely get it. 1:20:51.520 --> 1:20:55.320 We're gonna work Chuck on Janet because she's got it. 1:20:55.360 --> 1:20:57.479 If she likes young Sheldon, she's gonna love The Big 1:20:57.560 --> 1:20:58.080 Bang Theory. 1:20:58.120 --> 1:21:01.200 She's got it. Like the it's like they go together. 1:21:02.920 --> 1:21:03.559 It is different. 1:21:04.400 --> 1:21:09.080 And you see that the absolute genius of that castle. 1:21:09.520 --> 1:21:14.120 Jim Parsons playing Sheldon at a later age. It's we had. 1:21:14.360 --> 1:21:17.160 We had twelve years of absolute fun making that show. 1:21:18.680 --> 1:21:21.040 Just got a minute left. Do you have a favorite 1:21:21.080 --> 1:21:24.479 moment in time considering all that you've worked on and 1:21:24.720 --> 1:21:28.040 created or co created or what have you? Just got 1:21:28.040 --> 1:21:29.639 about forty five seconds left here? 1:21:31.080 --> 1:21:33.200 Wow, that's a macro question. I know. 1:21:33.439 --> 1:21:35.720 Sorry, I'm a kind of gal. 1:21:37.200 --> 1:21:41.080 It's kind of hard to pull a favorite moment. There 1:21:41.240 --> 1:21:44.400 certainly have been moments that that have stuck with me, 1:21:46.720 --> 1:21:51.840 no one of the I'm not. Rather than specifically answer 1:21:51.960 --> 1:21:55.639 that question, what I've loved about The Big Bang Theory? 1:21:55.960 --> 1:21:56.080 Uh? 1:21:57.760 --> 1:21:59.840 And I guess you know we're talking mostly about young 1:22:00.040 --> 1:22:03.960 elden is And I think why it was attractive to 1:22:04.080 --> 1:22:08.599 young people, yeah, was if you felt this enfranchised, if 1:22:08.640 --> 1:22:12.439 you felt you're around the outside looking in, which a 1:22:12.560 --> 1:22:14.120 lot of people do, and you don't have to be 1:22:14.200 --> 1:22:18.360 a mensa participant or genius to feel that way. The 1:22:18.520 --> 1:22:23.479 show represented community, represented like minded souls helping one another, 1:22:25.280 --> 1:22:27.920 and maybe that's what was at practice to kids watch it. 1:22:28.320 --> 1:22:31.599 I think that's a great way to finish up. Listen, 1:22:31.880 --> 1:22:34.439 Thank you, and it's a great thought. Thank you so much, 1:22:34.560 --> 1:22:38.200 so appreciate it. Be well, Chuck Lori, TV writer, director, producer, 1:22:38.840 --> 1:22:41.040 co creator The Big Bang Theory, and of course our 1:22:41.120 --> 1:22:41.679 Janet Lauren. 1:22:41.760 --> 1:22:41.880 Here. 1:22:42.240 --> 1:22:43.000 This is Bloomberg. 1:22:45.080 --> 1:22:48.559 You're listening to the Bloomberg Business Week Podcast. Catch us 1:22:48.640 --> 1:22:51.840 live weekday afternoons from two to five pm Eastern. Listen 1:22:51.920 --> 1:22:54.080 on Apple card play and ed Bright Auto with a 1:22:54.120 --> 1:22:57.120 Bloomberg Business app or watch us live on YouTube. 1:22:58.840 --> 1:23:02.120 All right, everybody tim to strap in, because we are 1:23:02.160 --> 1:23:04.880 going for quite a ride, figure relatively, and we're going 1:23:04.920 --> 1:23:07.679 to kind of live vicariously through Bloomberg Auto communist Hannah 1:23:07.680 --> 1:23:08.479 Elliots always do. 1:23:08.640 --> 1:23:09.960 She gets to do the coolest stuff. 1:23:10.040 --> 1:23:11.560 I want to be Hannah when I come back in 1:23:11.600 --> 1:23:14.000 another lifetime. All right, she drove the three hundred and 1:23:14.120 --> 1:23:17.560 forty five thousand McLaren seven to fifty s Spider for 1:23:17.560 --> 1:23:21.320 a day's always Yeah, three hundred and forty five Did 1:23:21.360 --> 1:23:21.920 I say it right? 1:23:22.600 --> 1:23:24.400 I mean, it's not like it matters to us. 1:23:25.000 --> 1:23:26.719 It's almost half a million dollars. 1:23:27.720 --> 1:23:29.080 That's before tax, by the way. 1:23:29.160 --> 1:23:29.920 You know what else she did? 1:23:30.240 --> 1:23:32.719 She stopt by the resort in the remote Saudi Arabian 1:23:32.800 --> 1:23:36.000 desert where Burke is in bikinis mingled. And then there is, 1:23:36.080 --> 1:23:40.000 of course, the influential YouTuber known as supercar Blondie, who's 1:23:40.040 --> 1:23:42.559 out now to sell you a car. It's a hypercar that. 1:23:42.640 --> 1:23:44.439 Is also looks a lot like Hannah. But we'll get 1:23:44.439 --> 1:23:46.280 into that in just a moment too. It's all in 1:23:46.400 --> 1:23:49.439 this week's Pursuits. Editor pursuits. Chris Rousers here in studio 1:23:49.479 --> 1:23:52.840 along with Bloomberg auto communist Hannah Elliott joining us from 1:23:53.200 --> 1:23:55.439 La Hannah, welcome, so good to have you here with 1:23:55.560 --> 1:23:55.960 that Chris. 1:23:56.200 --> 1:23:58.800 Chris. First of all, we were trying to figure out 1:23:58.800 --> 1:24:01.519 where to start because they're all really cool stories. Did 1:24:01.560 --> 1:24:03.920 you know about supercar Blondie? I always thought that was Hannah, 1:24:03.960 --> 1:24:04.840 to be quite honest with. 1:24:04.880 --> 1:24:09.040 You, Hannah, Hannah is a blondie who doesn't just focus 1:24:09.120 --> 1:24:13.400 on supercars. She focuses on all kinds of cars. But 1:24:13.520 --> 1:24:16.400 I did I know about supercar Blondie because we cover 1:24:16.520 --> 1:24:19.200 the same kind of stuff and Hannah has knows her. 1:24:20.080 --> 1:24:25.080 But she is a very very influential YouTuber who has 1:24:25.120 --> 1:24:27.719 a huge following. Get gets up to two billion views 1:24:28.120 --> 1:24:31.599 on her contents a month, and she basically test drives 1:24:32.040 --> 1:24:37.080 and talks about and goes with celebrities to experience supercars, 1:24:37.120 --> 1:24:39.240 so very very high end cars, these ones that are 1:24:39.280 --> 1:24:43.559 in the two hundred thousand millions of dollars, and she's 1:24:43.600 --> 1:24:45.000 just very influential on that field. 1:24:45.280 --> 1:24:47.360 So Hannah, come on in here and give us an 1:24:47.400 --> 1:24:51.080 idea of making the transition. Now supercar Blondie that is 1:24:51.200 --> 1:24:54.280 from a YouTuber to somebody who actually wants to sell 1:24:54.280 --> 1:24:55.559 you a very expensive car. 1:24:55.880 --> 1:24:59.160 Yeah. I think that's actually the crux of the story. 1:24:59.280 --> 1:25:02.720 That it's the big question and the big unknown, which 1:25:02.880 --> 1:25:07.120 is can somebody who has such an enormous social media 1:25:07.160 --> 1:25:10.840 platform actually translate that into selling. We know that she 1:25:10.960 --> 1:25:12.760 can get a lot of viewers, a lot of people 1:25:12.840 --> 1:25:16.320 love her and Alex Hershey is her name, and she's 1:25:16.600 --> 1:25:20.559 an Australian, is a very smart, very hard working person. 1:25:20.840 --> 1:25:23.519 So no one's doubting that. The question is will some 1:25:23.840 --> 1:25:28.080 among those two billion monthly viewers want to buy a 1:25:28.200 --> 1:25:31.479 two million dollar Lamborghini that she's going to sell. That 1:25:31.680 --> 1:25:34.680 remains to be seen if you act. Ask Alex she 1:25:34.840 --> 1:25:38.800 says absolutely. It's not that they need to reach all 1:25:38.920 --> 1:25:41.160 of the world's billionaires all at wants to try to 1:25:41.200 --> 1:25:42.960 sell them a car. But she says with that kind 1:25:43.000 --> 1:25:46.560 of platform and footprint and access, she can find the 1:25:46.680 --> 1:25:47.400 right people. 1:25:47.600 --> 1:25:50.559 So she's launching this auction site. What is it going 1:25:50.640 --> 1:25:52.000 to be called and how's it going to work? 1:25:52.120 --> 1:25:55.599 So the auction site is called xbs Cars and it's 1:25:55.720 --> 1:25:58.680 an online auction site that will kind of run like 1:25:58.800 --> 1:26:01.760 bring a trailer. It's very different because it sells only 1:26:01.880 --> 1:26:05.320 high end cars. But in terms of live auctions that 1:26:05.520 --> 1:26:08.639 run for a week or two weeks, and in terms 1:26:08.680 --> 1:26:12.040 of having people who can comment and everyone can watch 1:26:12.120 --> 1:26:14.880 the auction taking place, it's very similar. 1:26:15.080 --> 1:26:17.240 Let's bring a trailer. I'm not familiar with that, so 1:26:17.439 --> 1:26:18.920 just give us a little bit of a reference. 1:26:19.080 --> 1:26:20.840 John doesn't spend a ton of time on bring a trailer. 1:26:21.479 --> 1:26:23.120 Every one car and that's it. 1:26:23.280 --> 1:26:25.640 Okay, my dad spends a ton of time on bring 1:26:25.720 --> 1:26:26.440 a trailer. 1:26:26.960 --> 1:26:29.599 So yes, bring a trailer. We have to say, Bring 1:26:29.680 --> 1:26:32.560 a trailer is really the model that everybody's chasing. It 1:26:32.760 --> 1:26:36.479 was the first sort of breakout auction platform to prove 1:26:36.720 --> 1:26:39.479 that people will buy cars online that they have not 1:26:39.800 --> 1:26:43.600 even seen in real life, let alone driven. Bring a 1:26:43.680 --> 1:26:46.840 Trailer was started by Randy Nannenberg in two thousand and 1:26:47.000 --> 1:26:50.760 seven and it started out slowly, but last year it 1:26:50.880 --> 1:26:55.160 reported one point four billion dollars in sales, so it's 1:26:55.320 --> 1:26:58.360 doing great, and it really has been sort of the 1:26:58.560 --> 1:27:01.920 model that has proved that this sort of thing can 1:27:02.040 --> 1:27:04.759 be done. Now, no one has done it like SBX 1:27:04.840 --> 1:27:08.280 cars and tried to do it with only really expensive, 1:27:08.360 --> 1:27:12.000 really rare hypercars. But yeah, that's what Supercar Blondie is 1:27:12.040 --> 1:27:12.719 going to attempt. 1:27:12.920 --> 1:27:15.120 I love that it comes down to basically supply demand. 1:27:15.200 --> 1:27:17.760 It's as simple as that she knows where those cars are. 1:27:17.920 --> 1:27:20.439 That's a huge part of the art auction business, like 1:27:20.520 --> 1:27:22.559 she knows where all those cars are in the world. 1:27:22.640 --> 1:27:24.600 And eventually, I think for this business to work, she 1:27:24.640 --> 1:27:26.800 needs to start doing private sales where she just connects people. 1:27:26.840 --> 1:27:29.080 All right, we want to get to one story real 1:27:29.200 --> 1:27:30.760 quickly before we move on to the last one, which 1:27:30.760 --> 1:27:32.720 we're all kind of like salivating over. But I just 1:27:32.800 --> 1:27:35.519 do wonder if ultimately the three hundred and forty five 1:27:35.560 --> 1:27:39.320 thousand dollar McLaren seven to fifty Spider might ultimately end 1:27:39.400 --> 1:27:41.640 up on her website at some point you drove it, 1:27:41.800 --> 1:27:44.080 just give us a quick thought on what that was like. 1:27:44.680 --> 1:27:47.120 This is admittedly rare air, so we have to say 1:27:47.200 --> 1:27:51.160 that McLaren, of course, is one of the most prestigious 1:27:51.240 --> 1:27:54.760 names in elite motorsport. We've all followed the McLaren F 1:27:54.840 --> 1:27:59.160 one racing team. McLaren hopes that they're racing team success 1:27:59.320 --> 1:28:01.840 and notoriety will trickle down into making us want to 1:28:01.920 --> 1:28:05.120 buy cars like this seven to fifty s Spider. This 1:28:05.560 --> 1:28:08.880 is the successor to the seven twenty s Spider and 1:28:09.040 --> 1:28:11.760 looks basically the same. If you're at all familiar with it, 1:28:11.920 --> 1:28:15.719 it looks kind of like an alien. It's very swoopy, 1:28:16.000 --> 1:28:19.679 the cabin is sort of bubble shaped, and of course, 1:28:20.040 --> 1:28:23.519 like any good supercar, it's got over seven hundred horse 1:28:23.600 --> 1:28:26.800 power twin turbocharge V eight engine. It can go there 1:28:26.840 --> 1:28:31.280 to sixty and two point seven seconds. And yeah, it's 1:28:31.479 --> 1:28:34.240 a type of thing that you know, is like a Ferrari. 1:28:34.400 --> 1:28:36.360 You can put it, put it on the line against 1:28:36.920 --> 1:28:41.040 plenty of offerings from Frari and Lamborghini. To me, it's 1:28:41.160 --> 1:28:44.160 a little clinical, you know, Mercedes McLaren is known for 1:28:44.560 --> 1:28:47.559 having a bit of a clinical nature to its cars. 1:28:47.680 --> 1:28:51.240 But if you really love that sort of robotic precision, 1:28:51.760 --> 1:28:54.439 the seven to fifty s Spider is a very fun 1:28:54.520 --> 1:28:55.040 car to drive. 1:28:55.240 --> 1:28:58.040 Okay, from McLaren to Saudi Arabia, there is a connection 1:28:58.640 --> 1:29:00.680 we promise make that can for us. 1:29:01.040 --> 1:29:04.400 The connection is I did travel to Saudi Arabia to 1:29:05.280 --> 1:29:08.439 be a part of our Bloomberg Power Players conference, and 1:29:08.600 --> 1:29:12.960 this conference was located in Jetta to discuss the growth 1:29:13.400 --> 1:29:16.840 of motor sport and other sports in Saudi Arabia. Saudi 1:29:16.840 --> 1:29:20.719 Arabia has invested billions of dollars into promoting tourism and sports. 1:29:21.400 --> 1:29:24.800 And Zach Brown, the principal of the McLaren f one 1:29:24.920 --> 1:29:29.120 racing team, joined us for the conference and we were 1:29:29.160 --> 1:29:31.080 so happy to have him. And then the Saudi Arabian 1:29:31.120 --> 1:29:33.479 Grand Prix was also held that same weekend that we 1:29:33.560 --> 1:29:35.720 had our conference, and I was really happy to go 1:29:36.400 --> 1:29:38.880 and see the Grand Prix and then also spend some 1:29:39.000 --> 1:29:42.719 time in other locales in Saudi Arabia, like this hotel 1:29:42.880 --> 1:29:43.639 in Alula. 1:29:44.120 --> 1:29:48.080 So Hannah was going for the Power Players conference Wait 1:29:48.240 --> 1:29:51.519 for Work for Work she was, well, she was, and 1:29:51.640 --> 1:29:53.599 we said, Hannah, if you're going to go there, we've 1:29:53.640 --> 1:29:55.120 got to get you to check out some of these. 1:29:55.200 --> 1:29:58.920 There's amazing, like very high luxury hotels that some have 1:29:59.000 --> 1:30:01.800 already opened. Many our about to open in Saudi because this, 1:30:01.840 --> 1:30:06.120 Hannah said, they've been investing so much in tourism. And 1:30:07.120 --> 1:30:09.400 so we said, Hannah, let's go check out this Habitas 1:30:09.479 --> 1:30:12.639 hotel in Alula. Habitas as a brand which is known 1:30:12.800 --> 1:30:14.759 for kind of coming out of the burning Men culture. 1:30:14.920 --> 1:30:18.479 Their first place was in Tulum. Very free spirit hippie 1:30:19.040 --> 1:30:22.479 does not feel like it fits in Saudi Arabia, which 1:30:22.520 --> 1:30:25.320 is famously very conservative. And since Hannah was there, we 1:30:25.400 --> 1:30:27.840 did all the visa stuff. It's difficult to get into Saudi. 1:30:27.880 --> 1:30:30.880 We said, go check out this hotel. Hannah understands that 1:30:30.960 --> 1:30:34.560 Habitas vibe, so she was like trainsplanes and automobiles. But 1:30:34.640 --> 1:30:36.040 she got over there and she checked it. 1:30:36.040 --> 1:30:37.519 Out all right. So what was it like, Hannah? 1:30:37.760 --> 1:30:41.280 It was amazing. I didn't know what to expect. I 1:30:41.360 --> 1:30:43.720 had never been to the Middle East, never been to 1:30:43.920 --> 1:30:47.840 Saudi Arabia, and I had already spent several days in Jetta, 1:30:48.320 --> 1:30:53.719 which was wonderful but pretty conservative. For instance, the hotel 1:30:54.160 --> 1:30:56.720 pool where I was staying had separate hours for. 1:30:56.760 --> 1:30:57.280 Men and women. 1:30:57.360 --> 1:30:58.800 Men and women were not allowed to be at the 1:30:58.840 --> 1:31:02.400 swimming pool at this same time. So then fast forward, 1:31:02.640 --> 1:31:05.280 I flew to Medina and then drove four hours into 1:31:05.360 --> 1:31:10.400 the desert into this old region called Allula and Habitas. 1:31:10.640 --> 1:31:14.719 The pool is a mixed pool, and it was burkes 1:31:14.760 --> 1:31:16.680 and bikinis for lack of a. 1:31:16.680 --> 1:31:20.960 Better term, seriously, and men and women, which was you 1:31:21.000 --> 1:31:22.080 can't get anywhere else there. 1:31:22.320 --> 1:31:24.400 And I have to say, you know, in Saudi Arabia, 1:31:24.800 --> 1:31:27.400 alcohol is not allowed anywhere in the country, and that 1:31:27.680 --> 1:31:31.160 also does apply to this hotel. I didn't know how 1:31:31.240 --> 1:31:33.320 serious that was. I kind of felt, well, maybe if 1:31:33.320 --> 1:31:35.560 it's a private hotel and they're calling it, you know, 1:31:35.680 --> 1:31:37.800 sort of a burning man in the desert, there would 1:31:37.800 --> 1:31:41.439 be alcohol, but no alcohol at all. But I have 1:31:41.560 --> 1:31:45.720 to say that did not encroach upon the fun and 1:31:45.880 --> 1:31:48.519 freedom that Habitas Alula had. 1:31:48.560 --> 1:31:48.840 It was. 1:31:49.040 --> 1:31:52.439 It was kind of like a boho, chic, luxury hotel 1:31:52.520 --> 1:31:54.839 that you would find in the Biza. 1:31:55.000 --> 1:31:59.200 Maybe is there any question about the success moving forward 1:31:59.240 --> 1:32:01.439 of this hotel and who it attracts, Like can it 1:32:01.520 --> 1:32:03.479 pull this off in such a conservative place? 1:32:03.840 --> 1:32:07.320 That is the question. When I was there, I did 1:32:07.400 --> 1:32:11.120 not come into contact with any other Americans. It's very 1:32:11.240 --> 1:32:14.880 difficult to get to My return trip to La took 1:32:15.000 --> 1:32:19.080 thirty two hours door to door. The visas are challenging 1:32:19.479 --> 1:32:24.680 to obtain, it's grueling, and it's expensive, so those are 1:32:24.920 --> 1:32:31.559 natural prohibitive barriers to going. You know, Habitas has really 1:32:32.080 --> 1:32:36.839 positioned these hotels as opportunities to provide jobs for locals, 1:32:37.800 --> 1:32:40.400 although I have to say when I was there, most 1:32:40.479 --> 1:32:44.360 of the staff that I encountered were from African countries 1:32:44.520 --> 1:32:47.639 or from other Arab nations. They were not from Saudi Arabia. 1:32:48.479 --> 1:32:50.719 I just actually heard from the pr that they're saying 1:32:50.800 --> 1:32:54.640 twenty nine percent of their staff are local Saudis. They 1:32:54.920 --> 1:32:58.080 probably need to increase that if they want to really 1:32:58.200 --> 1:33:01.120 make an impact in the region. And again, all of 1:33:01.200 --> 1:33:03.880 this is all of this is funded and part of 1:33:04.040 --> 1:33:07.439 the Kingdom of Saudi Arabia's effort to really promote tourism. 1:33:07.760 --> 1:33:10.960 They're not short for money, so there's a lot of 1:33:11.040 --> 1:33:12.240 money being devoted to this. 1:33:14.000 --> 1:33:17.320 And was it it was mostly Saudi families that were there, right, 1:33:17.400 --> 1:33:17.800 that's cool? 1:33:17.920 --> 1:33:22.400 Yes, yes, I can't say for sure. The people there, 1:33:23.880 --> 1:33:28.400 I had a great experience. The people there were mostly Saudi's, 1:33:28.600 --> 1:33:33.400 mostly traditional dress. There were a few bikinis from what 1:33:33.600 --> 1:33:36.560 I think were Europeans from what I can tell, and 1:33:36.680 --> 1:33:42.599 maybe Australians and then and then me, but mostly Saudi 1:33:42.720 --> 1:33:47.280 families dressed traditionally having a wonderful time. There were people 1:33:47.360 --> 1:33:52.200 having birthday parties. It was it was really interesting. So 1:33:52.360 --> 1:33:56.160 I do hope that it can continue. There's certainly a 1:33:56.280 --> 1:33:58.680 lot of effort behind it. And you want to go back, Oh, 1:33:58.800 --> 1:34:02.840 I really want to go. I recommend anybody. I mean, 1:34:03.080 --> 1:34:06.720 it's mind blowing. It's the desert itself. I have to say, 1:34:06.720 --> 1:34:09.840 if we have time. It's very close to Hegra, which 1:34:09.920 --> 1:34:11.960 is kind of like Petra. If you've heard of the 1:34:12.080 --> 1:34:16.160 tombs at Petra in Jordan. Hegra is a similar site, 1:34:16.680 --> 1:34:19.040 and it's a World Heritage site, the first one ever 1:34:19.120 --> 1:34:23.440 in Saudi Arabia with these ancient tombs. It's really phenomenal 1:34:23.520 --> 1:34:24.040 to go see. 1:34:24.160 --> 1:34:26.519 Well, the pictures in the story are pretty phenomenal as 1:34:26.560 --> 1:34:29.240 well as are you so listen? Thank you so much, 1:34:29.280 --> 1:34:30.040 really appreciate it. 1:34:30.280 --> 1:34:33.200 That's Bloomberg Pursuits Auto columnist Hannah Elliott and the editor 1:34:33.240 --> 1:34:35.479 of Pursuits, Chris Rouser. Check out more from Pursuits in 1:34:35.520 --> 1:34:38.160 the entire BusinessWeek team by heading to Bloomberg dot com. 1:34:38.280 --> 1:34:39.200 We all want to go, don't we? 1:34:39.560 --> 1:34:39.760 Yeah? 1:34:40.000 --> 1:34:41.040 Yeah, sounds amazing. 1:34:41.680 --> 1:34:46.519 This is the Bloomberg Business Week Podcast, Apple, Spotify and 1:34:46.680 --> 1:34:50.800 anywhere else you get your podcast. Listen live weekday afternoons 1:34:50.840 --> 1:34:52.600 from two to five pm Eastern. 1:34:52.479 --> 1:34:55.840 On Bloomberg dot com, the iHeartRadio app, tune In, and 1:34:55.920 --> 1:34:58.639 the Bloomberg Business App. You can also watch us live 1:34:58.760 --> 1:35:03.280 every weekday on YouTube and always on the Bloomberg jermalm 1:35:09.160 --> 1:35:09.559 Mm hmm