Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. This week a gathering up
Speaker 1: global leaders on the latest geopolitical events, better than expected
Speaker 1: inflation report, and another one that says we shoppers, yet
Speaker 1: we're still out shopping. And oh yeah, Tim, right, that
Speaker 1: crypto problem continuing to unwind thanks to the collapse of
Speaker 1: ft X welve. More than that in a moment, Yeah,
Speaker 1: that teeny little company that's just sending shockwaves throughout the industry.
Speaker 1: Coming up on the program, we get a pulse check
Speaker 1: on global trade conditions. We do that with former US
Speaker 1: Commerce Secretary Carlos Gutierrez. We'll also look at the state
Speaker 1: of US China relations after a meeting between President Joe
Speaker 1: Biden and China's Sejing paying at the G twenty, and
Speaker 1: we break down a key corner of the cloud software
Speaker 1: market with the CEO of Octa All of that to home.
Speaker 1: We begin with the cover story of a Bloomberg Business
Speaker 1: Week double issue. The cover is about the crypto saga
Speaker 1: and collapse of f t X and Sam bank Man
Speaker 1: Freed that has been unfolding over the past couple of
Speaker 1: weeks and which continues to evolve and deliver headlines as
Speaker 1: we speak. Bloomberg Newscrypto reporter Oga Kariffe has been falling
Speaker 1: this so closely. She co wrote the cover. She's here
Speaker 1: to explain the fallout across the digital asset business and
Speaker 1: well beyond. This has been, of course a huge shock
Speaker 1: for everybody who's been in the crypto community for a
Speaker 1: long time, and as well as new newer investors who
Speaker 1: came in in the last couple of years. You know,
Speaker 1: it's a complete shock because some Bankman Freed or Sbfest.
Speaker 1: He was known. He was sort of considered to be
Speaker 1: one of the most sort of trustworthy, if you will,
Speaker 1: people in crypto. He was testifying in Congress, he was
Speaker 1: meeting with regulators. He had a lot of respect and
Speaker 1: a lot of a lot of weight in this industry,
Speaker 1: and all of a sudden he company has come undone
Speaker 1: a lot of respect and a lot of influence magazine
Speaker 1: covers is even he alluded to. He said he became
Speaker 1: overconfident as a result of that. All but one thing
Speaker 1: that I'm having a really hard time reconciling is the
Speaker 1: prominent backers of the company and the really sloppy, leaked
Speaker 1: balance sheet that we saw. I mean, how does a
Speaker 1: company this big have such a lack of understanding of
Speaker 1: what it has on the balance sheet? Yeah, you know,
Speaker 1: it's it's incredibly surprising. And I think what this means
Speaker 1: that is that there wasn't enough oversight. There wasn't enough
Speaker 1: due diligence that you need for a company this size
Speaker 1: with such caliber of investors. Typically you wanna for a
Speaker 1: company this size, you would have a board and you
Speaker 1: would have all kinds of you know, auditing going on
Speaker 1: and committees and you know, plenty of people who will
Speaker 1: be looking through what's going on. And what we find
Speaker 1: is that for FTX, a lot of it has been
Speaker 1: just you know, Sam bankman freed overseas in the entire operation.
Speaker 1: You know, it's interesting, you know, you note to some
Speaker 1: of the other tweets that Sam bank Benfried has has
Speaker 1: done and talked about how he messed up different words
Speaker 1: that he used and blaming poor internal labeling of accounts.
Speaker 1: This is not someone who doesn't understand right how the
Speaker 1: sophisticated financial system works. If you look about his past experience, right,
Speaker 1: this is someone who should have known. Or do we
Speaker 1: give him some room for not having better systems in place?
Speaker 1: How are we supposed to look at this? So, on
Speaker 1: the one hand, he is only thirty years old, but
Speaker 1: on the other hand, during this thirty years he has
Speaker 1: managed to do a lot. He was a trader at
Speaker 1: James Street, of course, the very highly respected quantic idea
Speaker 1: of trading firm, which gave him Wall Street cred and
Speaker 1: then he also ran Alameda since Alamda Research was his
Speaker 1: trading firm. Initially he Alameda essentially made money off of
Speaker 1: price differences so on different crypto exchanges and made quite
Speaker 1: a lot of money that way. And then he branched
Speaker 1: out into actually running a crypto exchange in twenty nineteen,
Speaker 1: and so he had a lot of experience I would
Speaker 1: think with financial matters. So what repercussions could he face.
Speaker 1: He does keep tweeting over and over again that his
Speaker 1: number one priority is making it right with customers. We'll
Speaker 1: see if he's able to do that, what consequences could
Speaker 1: he face? So in terms of his tweets, they're getting
Speaker 1: a huge backlash online because people don't trust don't trust
Speaker 1: him anymore and essentially just almost wish that he didn't
Speaker 1: even say anything because instead of this empty promises, in
Speaker 1: terms of what could happen to him, it's still unclear. Uh.
Speaker 1: You know, ft X is still in the process of
Speaker 1: filing bankruptcy of all of requisite sort of finitial bankruptcy documents.
Speaker 1: I'm sure there will be an analysis of what exactly
Speaker 1: went drawing and who's to blame. Nobody has been charged
Speaker 1: with anything yet, so so I think it's going to
Speaker 1: be a pretty long and drawn out process. But but
Speaker 1: a lot of people are kind of convinced that somebody,
Speaker 1: you know, could face charges for this. Okay, it almost
Speaker 1: feels like an uber uber case of fomo. Right. You know,
Speaker 1: as soon as he got momentum, and you know, media
Speaker 1: coverage created some of that momentum. You know, you had
Speaker 1: certain venture capitalists or Silicon Valley investors getting in and
Speaker 1: I'm sure friends were talking about, way, what do you
Speaker 1: guys onto Like, it's just you think about how the
Speaker 1: momentum and velocity that was created by SPF not giving
Speaker 1: him a pass. But you realize this can happen, you know,
Speaker 1: when there are frenetic investments that are out there. Absolutely.
Speaker 1: I think we sort of until um this year, we
Speaker 1: were in this reaching crypto bull market where you know,
Speaker 1: prices were going up like easy. Everybody, all of the
Speaker 1: venture capitalists wanted to find the next unicorn and crypto.
Speaker 1: Uh and uh when when they saw you know this,
Speaker 1: very respected investors like Sequoia, you know, backing f t X. Uh.
Speaker 1: Perhaps some of them haven't done as much due diligence. Uh.
Speaker 1: It sounds like guess they should have just to check
Speaker 1: things out. There are sort of standard processes for due
Speaker 1: diligence in any industry, but I think some of them
Speaker 1: may have been forgotten in the rush to get in.
Speaker 1: That was Bloomberg News crypto reporter Olga Careif on this
Speaker 1: week's cover story, be sure to head to Bloomberg dot
Speaker 1: com or the Bloomberg Terminal. From more on ft X
Speaker 1: and Sam Bateman, Freed and the crypto contagion. It's unbelievable, alright,
Speaker 1: coming up renewed hope for etholen relations between the world's
Speaker 1: two superpowers. What the Biden, she meeting in the G
Speaker 1: twenty means for the global economy and for the prospects
Speaker 1: of avoiding future conflict. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio.
Speaker 1: I'm absolutely believe there's need not be a new Cold War.
Speaker 1: I do not think there's any imminent attempt on the
Speaker 1: part of China to invade Taiwan, and I made it
Speaker 1: clear that our policy in Taiwan has not changed at all.
Speaker 1: That's President Joe Biden speaking at the G twenty Heads
Speaker 1: of State and Government Summit held this past week in Bali, Indonesia,
Speaker 1: about the U S. China relationship. He and Chinese President
Speaker 1: Jimping met for about three hours, greeting each other with
Speaker 1: a handshake and conciliatory remarks in which they both called
Speaker 1: for calming tensions. The two agreed to a series of
Speaker 1: goodwill gestures intended to improve ties after the first in
Speaker 1: person meeting between the leaders of the U S and
Speaker 1: China since the pandemic began. For more on where the
Speaker 1: two nations go From here, we turned to dex Or
Speaker 1: Tiff Roberts, Senior Fellow at the Atlantic Council's Agia Security
Speaker 1: Initiative and Mansfield Fellow at the University of Montana. Tiff
Speaker 1: is also the author of the Myth of Chinese Capitalism
Speaker 1: and former Bloomberg Business Week China bureau chief. We asked
Speaker 1: him what to make of President Biden's comments. Keep in mind,
Speaker 1: this comes after I think maybe seven separate statements by
Speaker 1: Biden that the US would come to the defense of
Speaker 1: Taiwan in the case of an invasion by Beijing, and
Speaker 1: uh so that not surprisingly has gotten Beijing very riled up.
Speaker 1: So Beijing, I think they would welcome this comment. On
Speaker 1: the other hand, Beijing has been saying for a while,
Speaker 1: you say one thing, you you the United States and
Speaker 1: Biden say one thing, but you you actually act in
Speaker 1: a different way, and they along with those other comments
Speaker 1: by Biden about supporting Taiwan in the military situation, there
Speaker 1: have been the repeated high level visits by various first
Speaker 1: by backing the Trump administration officials, and now those have
Speaker 1: continued to core, most recently with Pelosi's visit to Taiwan.
Speaker 1: You've written about China you know China really well, and
Speaker 1: we talked about your book The Myth of Chinese Capitalism,
Speaker 1: and I you know, about the divisive system that was
Speaker 1: there that ultimately would be very challenging to the country's
Speaker 1: development going forward. How do you see it? I mean,
Speaker 1: is is Chinese capitalism working or do you see this
Speaker 1: is a big undoing? I think they're unfortunately, you know,
Speaker 1: they have not made progress on getting the economy to
Speaker 1: work better, nor nor marketize it more. I mean, really
Speaker 1: we've seen the opposite under Sijm Ping for a number
Speaker 1: of years now, actually going back earlier, which is this
Speaker 1: increasing imposition of state control over the economy, continuing crackdown
Speaker 1: on the private sector. And you know today what they're
Speaker 1: really dealing with is, uh, they're sort of the economy
Speaker 1: is suffering under the twin weights of both the continuing
Speaker 1: COVID zero policy, which is you know, been good at
Speaker 1: preserving life in China, which is important, but it's been
Speaker 1: deadly for the for the economy, and then also the
Speaker 1: continuing property crackdown. So I would say, you know, you
Speaker 1: they continue to struggle with the economy and the policy
Speaker 1: really hasn't been going in the right direction. How are
Speaker 1: we as observers not in China. How are we as
Speaker 1: investors supposed to kind of read sometimes and move forward
Speaker 1: sometimes a step backward. Well, yeah, I think that's that's
Speaker 1: what you keep seeing, and maybe unfortunately it's too often
Speaker 1: one step forward and two steps back. And I think
Speaker 1: with the first with the COVID zero policy, I know,
Speaker 1: or the some signs of easing, obviously they're welcomed. People
Speaker 1: have referred to them as baby steps. And ultimately the
Speaker 1: challenge they face there is they announced the easy, the
Speaker 1: slight easings in COVID zero. You know, meanwhile, we've seen
Speaker 1: COVID surging across the country at Beijing, uh jung Joe,
Speaker 1: where the world's largest iPhone factory is, and down in
Speaker 1: guang Jo, and they simply can't ease up on these
Speaker 1: policies until, first of all, they have a much broader
Speaker 1: vaccination program across the country, particularly with elderly people who
Speaker 1: have a low level of vaccination there and uh and
Speaker 1: and and it's it's not gonna, you know, no matter
Speaker 1: what they say about easing, they're gonna have to pull
Speaker 1: back until they actually start to get COVID under control.
Speaker 1: What do you hear from people on the ground there
Speaker 1: right now people you're in touch with about what life
Speaker 1: is like and how things have shifted over the last
Speaker 1: couple of years. First of all, I think there is
Speaker 1: a concern, as that we were discussing about COVID zero,
Speaker 1: the rolling lockdowns of cities are continuing. I think there's
Speaker 1: growing frustration about that, even though there has been you know,
Speaker 1: there has been support earlier for for the government's efforts
Speaker 1: to try to keep people safe, but we're starting to
Speaker 1: see that, start to see fishers in that, if you will.
Speaker 1: I think the economy is a real worry about people,
Speaker 1: and there's also a growing concern about this politicization of
Speaker 1: the economy China and the US. How would you describe
Speaker 1: the relationship in the way forward? Is it a good one? Oh?
Speaker 1: I think it's actually a troubled relationship. Unfortunately, you know
Speaker 1: it's there. It's really a competitive relationship. They are both
Speaker 1: see each other very much as their number one rival
Speaker 1: for for global superpower status. So the Chinese economy, will
Speaker 1: it still be the end in the world, has relied
Speaker 1: on not not great news there. I think that, you know,
Speaker 1: because of some of the things we discussed earlier, COVID zero,
Speaker 1: policy at the crackdown on the property sector, but then
Speaker 1: larger structural issues. China is trying to make this transition
Speaker 1: from a you know, factory to the world model, which
Speaker 1: was investment in debt driven to a much more one
Speaker 1: driven by its own consumers, one driven by household consumption.
Speaker 1: And that's a really tough transition that is going to
Speaker 1: mean probably slowing growth for a number eight years to come.
Speaker 1: Are we seeing the world divided up US and its allies,
Speaker 1: China and its allies at this point? I mean I
Speaker 1: think that you know, it has been divided up. It's
Speaker 1: it's yeah, we're seeing it slide further in that direction.
Speaker 1: Two separate polls, I would say though that, uh, you know,
Speaker 1: the US has made some progress in in the last
Speaker 1: year two in terms of bringing more allies together, and
Speaker 1: you know, China has helped and in his own way
Speaker 1: on that as well. By just one example, its support
Speaker 1: for Russia related relative support for Russia related to the
Speaker 1: invasion of Ukraine has turned a lot of European countries
Speaker 1: away from China and made them feel that they have
Speaker 1: more in common with the US. So, given the answers
Speaker 1: to your rapid fire questions from Carol just now, Tiff,
Speaker 1: what does it mean for investors the stocks that traded
Speaker 1: here in the US, The A d R s of
Speaker 1: Chinese companies have really been getting beaten up over the
Speaker 1: last year and a half. What does it mean for
Speaker 1: investors who want to be in the space. Well, I'm
Speaker 1: afraid we're going to see more beating up of stocks.
Speaker 1: You know, Ali Baba for the first time ever, they
Speaker 1: just had their their massive singles Day, you know, are
Speaker 1: sort of our Black Friday of retail online retail sales,
Speaker 1: and this is the first time. Holli Baba did not
Speaker 1: announce what the figures were because they weren't very good apparently.
Speaker 1: Um I think that we're going to see, as I said,
Speaker 1: a continued slow down in the Chinese economy. We're gonna
Speaker 1: see pressures on big multinationals are already seen with companies
Speaker 1: like Apple to diversify their supply chain out of out
Speaker 1: of China. The latest you know, lockdowns in Jung Joe
Speaker 1: on the world's largest iPhone factory just show that. So
Speaker 1: I think we're gonna have to have to see sort
Speaker 1: of a rere reckoning with global portfolios and the realization
Speaker 1: that China won't be the growth driver that it has been.
Speaker 1: That was Tiff Roberts of the Atlantic Council's Agent Security Initiative.
Speaker 1: He's also Mansfield Fellow at the University of Montana, as
Speaker 1: well as former Bloomberg Business Week China Bureau chief. Morehead
Speaker 1: on the G twenty and why one former U. S
Speaker 1: Commerce secretary believes little was accomplished. That's coming up next.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the
Speaker 1: World Bloomberg eleven Rio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one of six one to San Francisco,
Speaker 1: Bloomberg nine six, to the country Sirius XM Channel one
Speaker 1: ninety and around the globe the Bloomberg Business and Bloomberg
Speaker 1: Radio dot Com. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Stenovan on Bloomberg Radio. Well,
Speaker 1: the last few years have reminded us of how the
Speaker 1: world as we know it can be turned upside down
Speaker 1: in a moment, thanks to the global pandemic, the pushback
Speaker 1: against globalization, and rising in unexpected geopolitical tensions. We felt
Speaker 1: that again this past week. This was all the backdrop
Speaker 1: of G twenty as those leaders met in Poli last week.
Speaker 1: Here the way in on what was done, or perhaps
Speaker 1: what wasn't done, is former U S Secretary of Commerce
Speaker 1: Carlos Gutierrez, who served under President George W. Bush. He's
Speaker 1: also the co founder and executive chairman of EmPATH, it's
Speaker 1: a human resources consulting firm, and he was not impressed
Speaker 1: with the progress made on some key global issues at
Speaker 1: this year's summit. Very rarely do you get any concrete decisions.
Speaker 1: One thing that the G twenty did do is issue
Speaker 1: a statement against the war in Ukraine. Although it wasn't
Speaker 1: really unanimous, said there were a couple of there was
Speaker 1: language that tended to soften the demand, let's say, on
Speaker 1: the trade side. I found their statement to be very bland,
Speaker 1: very noncommittal. They talked about trade, but they talked about
Speaker 1: trade and relation to sustainability. So anytime you see the
Speaker 1: word trade, usually see sustainability. UM. Nothing about tariffs, nothing
Speaker 1: about protectionism, really nothing about globalization. So it was a
Speaker 1: very weak endorsement of trade. UM. I agree that w
Speaker 1: t O needs reform and that goes ahead. I wish
Speaker 1: we had a reformed and strengthened w t O when
Speaker 1: all the tariffs started, But it seems to me like
Speaker 1: it's going to continue to be the status quo. How
Speaker 1: would you have advised that by an administration to go
Speaker 1: into this G twenty Yeah, I would, especially now that
Speaker 1: the mid terms are over. I would have leaned forward
Speaker 1: a lot more on the importance of trade. Maybe the
Speaker 1: administration try to get a statement in there about trade
Speaker 1: and intellectual property and technology, but probably could not get
Speaker 1: the whole group to go with it. But yes, you know,
Speaker 1: the administration has really left some big value on the table.
Speaker 1: For example, the ct P p uh A trade agreement
Speaker 1: which will bring or open up a lot of countries
Speaker 1: in Asia for US manufacturers, US companies. That was an
Speaker 1: Obama era agreement and nothing has happened. I would have
Speaker 1: aught that President Trump took it out because he was
Speaker 1: following protectionist policies, and I would have expected President Biden
Speaker 1: to come back in because it's for the good of
Speaker 1: the US. It's actually it's hard to explain because we're
Speaker 1: giving Asia essentially to China. Uh, they have our step
Speaker 1: which would unify Asia under one agreement, and the US
Speaker 1: won't be part of it. So I think what's happening
Speaker 1: is that domestic politics are overshadowing and taking over any
Speaker 1: foreign policy. But you rarely hear any foreign policy strategy,
Speaker 1: um any doctrine of sorts. It really is behaving on
Speaker 1: the basis of what works domestically. Mr Secretary does feel
Speaker 1: like we've seen a lot of nations looking inward and
Speaker 1: maybe that's the result of the pandemic or they had
Speaker 1: to take care of their own even though it was
Speaker 1: a global pandemic. Do you feel like globalization and global
Speaker 1: supply chains that era is over. There's no question that
Speaker 1: it's taken a pause, and how long that pause will
Speaker 1: last is really something to see. But companies who bring
Speaker 1: manufacturing back, while that's very welcome from the standpoint of jobs,
Speaker 1: it does raise the cost. At some point they're going
Speaker 1: to have to address that will always have lower cost
Speaker 1: foreign competition. So yes, bringing manufacturing back is a great
Speaker 1: idea domestically, but it is going to increase the cost um.
Speaker 1: Different supply chains, Longer supply chains or even supply chains
Speaker 1: closer by they're not as efficient as they were, will
Speaker 1: also impact costs. I think it's really interesting right now
Speaker 1: and this is just anecdotally, but I am seeing more
Speaker 1: out of stocks than I remember seeing any time during COVID,
Speaker 1: and that what that tells me is where are you
Speaker 1: seeing that? What are you saying? I'm I'm seeing them
Speaker 1: at pharmacies and I'm seeing at grocery stores, basically the
Speaker 1: two places where I go. And uh, it's incredible. It's
Speaker 1: just hard to find things. And the out of slash
Speaker 1: go on for a week or two, and that just
Speaker 1: means that the supply, the new supply change or what
Speaker 1: are supply change are being constructed, aren't working. We're not
Speaker 1: getting the right product to the right place at the
Speaker 1: right time. That was former US Commerce Secretary Carlos S. Gutierrez.
Speaker 1: He's also co founder and executive chairman of EmPATH. You're
Speaker 1: listening to Bloomberg Business Week. Coming up next, revelations of
Speaker 1: a toxic workplace for women in the highest echelons of
Speaker 1: Wall Street's most prestigious firm. This is not just a
Speaker 1: Goldman Sachs problem. This is a chronic problem across Wall
Speaker 1: Street and has been for generations that are in Financial
Speaker 1: journalist Bill Cohen on a hush money cover up at
Speaker 1: Goldman Sachs and his new book on the complicated history
Speaker 1: of another iconic American company, General Electric. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes. Tim Stinovy from Bloomberg Radio. Wellow next
Speaker 1: guest has written about Goldman Sachs, the fall of Bear Stearns.
Speaker 1: He's written about the Duke Lacrosse scandal. He's written about
Speaker 1: his friends. His latest subject is General Electric. And it
Speaker 1: is so great to have with us in our Bloomberg Interreactor.
Speaker 1: Broker's studio, Bill Cohen, He's a former Wall Street m
Speaker 1: and a investment banker. I think for seventeen years seventeen
Speaker 1: longtime financial journalist. He's been writing for Who's Who, a
Speaker 1: business journalism and more, including Business Week. He's author of
Speaker 1: many books, several New York Times bestsellers, former Bloomberg contributor,
Speaker 1: and I think you and I even anchored together at
Speaker 1: one point. We did good old days. Anymore, I'll just
Speaker 1: see myself out in His latest book is Power Failure,
Speaker 1: The Rise and Fall of an American Icon. Really delighted
Speaker 1: to have you in studio. First of all, how are you?
Speaker 1: I'm great, Thank you, It's great to be here. Great
Speaker 1: to be back in this building. Honestly, it is really great.
Speaker 1: Right A long time ago, you've been busy tell us
Speaker 1: about this book. Well, Uh, there seems to be a
Speaker 1: strange pattern going on, Carol. Like you know, when I
Speaker 1: wrote about Bear Stearns, was sort of a metaphorical dead
Speaker 1: body on the ground, and I wanted to know how
Speaker 1: it got there. Same thing with the Duke Lacrosse scandal. Uh,
Speaker 1: even the Goldman, I wanted to know how it avoided death. Uh.
Speaker 1: And with GE, you know, Uh, to me, it felt
Speaker 1: like also there was a dead body on the ground
Speaker 1: and I wanted to know how it got there. It's
Speaker 1: sort of like a mystery that I wanted to solve,
Speaker 1: and I felt compelled to solve it. So some for
Speaker 1: some reason, I made the crazy decision to go back
Speaker 1: to the founding of the company and try to figure
Speaker 1: out what happened. And even from the outset, things aren't
Speaker 1: exactly the way they seem. People think that, you know,
Speaker 1: Thomas Edison was the great founder of GE, but in fact,
Speaker 1: by the time his company merged with another company, another
Speaker 1: electric company, Thomas Edison was already out of the picture.
Speaker 1: He was just a small shareholder of a company that
Speaker 1: was controlled by JP Morgan and Henry Villard, with Henry
Speaker 1: Vollard being the CEO, and then it merged with Charles
Speaker 1: Coffin's uh, you know, electric company to form General Electric,
Speaker 1: and Charles Coffin became the CEO of the combined company,
Speaker 1: with Edison not even knowing about the merger, not wanting
Speaker 1: the merger, and him just like floating off, you know,
Speaker 1: over to New Jersey to you know, create some sort
Speaker 1: of limestone mining company or something. So right from the outset,
Speaker 1: and then just one more thing, because it is darn interesting,
Speaker 1: is that was? And then in three was the big
Speaker 1: financial crisis and G almost went bankrupt. And if they
Speaker 1: didn't buy their debt back at a discount, if this
Speaker 1: sounds familiar, if they didn't buy their desk debt back
Speaker 1: at a discount with permission from JP Morgan, they would
Speaker 1: have gone bankrupt. So fast forward to today, and yes,
Speaker 1: what we forward what we see with G today. How
Speaker 1: would you just where or when would you describe the
Speaker 1: turning point into you know, the quote unquote dead body
Speaker 1: that you see gees today? When did that start to die?
Speaker 1: But that, of course is the subject of much debate,
Speaker 1: sort of centered around the idea of whether sort of
Speaker 1: Jack welch uh, you know, bequeath Jeff immult a company
Speaker 1: that was not nearly as robust as Jack thought it was.
Speaker 1: Jack thought he had bequeathed them a royal flush, and
Speaker 1: Jeff thought it was, you know, kind of a losing hand.
Speaker 1: So whether that's true or whether Jack actually left, I mean,
Speaker 1: he did leave him the most valuable company in the world,
Speaker 1: the most respected company in the world. But you know,
Speaker 1: he also Jeff took over from Jack on September seven
Speaker 1: of two thousand one. G E made the engines on
Speaker 1: the jets. GEE had re ensured some of the buildings
Speaker 1: down at the World Trade Center, and they of course
Speaker 1: owned NBC Universe NBC which hadn't ran from with no
Speaker 1: advertising for you know, at least a week, costing GE
Speaker 1: hundreds of millions of dollars. So uh, and they lost
Speaker 1: some employees that day. And of course, uh, you know,
Speaker 1: everything kind of changed in governance after nine eleven. Uh.
Speaker 1: And so you know, Jeff thought he had gotten a
Speaker 1: very different set of assets and opportunities than Jack thought
Speaker 1: he had bequeathed him. But so the question is, you know,
Speaker 1: did Jeff play the hand poorly or did you know,
Speaker 1: can make wrong decisions. I think really the turning point
Speaker 1: seemed to be, uh, the financial crisis, no surprise because
Speaker 1: because you know, g E owned G Capital, which was
Speaker 1: you know, like the third or fourth largest financial institution
Speaker 1: in the country, and everybody was focused on Wall Street
Speaker 1: going down the tubes. But G Capital almost went to
Speaker 1: two down the tubes as well. Phil Cohen still with
Speaker 1: us his latest book, well known obviously to our Bloomberg
Speaker 1: audience and a former Bloomberg contributor. His latest book is
Speaker 1: called Power Failure, The Rise and Fall of an American Icon.
Speaker 1: It is about g E. I want to ask you something, though,
Speaker 1: because you've written about Goldman sachs Um and our most
Speaker 1: read story in the Bloomberg has to do with Goldman
Speaker 1: paying out a twelve million dollars or well over twelve
Speaker 1: million dollars to a partner who complained internally about a
Speaker 1: toxic workplace for women in the highest echelons of Wall
Speaker 1: Street's most prestigious firm. This is our most read story
Speaker 1: all day today. I guess what I wanted to ask
Speaker 1: you is what is the right question to be asking?
Speaker 1: Is this a Goldman stories that a Wall Street story, Like,
Speaker 1: what is it when we see something like this, which is,
Speaker 1: as our reporter said, this doesn't happen a lot, and
Speaker 1: it certainly isn't made public a lot when something like
Speaker 1: this happens. This is not just a Goldman Sachs problem.
Speaker 1: This is a chronic problem across Wall Street and has
Speaker 1: been for generations. You know, my first book was about Lizard,
Speaker 1: where I had worked for six years, and I had
Speaker 1: a chapter in their chapter fourteen called It's a White
Speaker 1: Man's World, and it basically chronicled back then. That's that
Speaker 1: book came out in two thousand seven about the way
Speaker 1: women were treated at Lizard and it was not pretty okay.
Speaker 1: In my Goldman book, I also wrote about the way
Speaker 1: women were treated at Goldman, and I think I know
Speaker 1: some of these women who just you know, who brought
Speaker 1: this lawsuit against Goldman. Uh, you know, this is a
Speaker 1: chronic problem across the industry. There's a lot of lip
Speaker 1: service paid to trying to treat people better, and not
Speaker 1: just women, but women in particular, and uh, you know,
Speaker 1: other people who don't have the opportunities they should have,
Speaker 1: you know, in this chronic you know that that goes
Speaker 1: back to sort of the original culture, of the original sins,
Speaker 1: if you will, of these firms, which were sort of
Speaker 1: like white male partnerships, and they were family owned businesses.
Speaker 1: There were small, little family owned businesses. There was a
Speaker 1: Mr Goldman, there was a Mr Sachs, there was a JP. Morgan,
Speaker 1: there were three Lizard brothers, there were Lehman brothers. So
Speaker 1: these were all family owned businesses. They were very wary
Speaker 1: of outsiders, didn't want, you know, even to marry outside
Speaker 1: the family because they were afraid of deluding the ownership
Speaker 1: and the culture that they were creating at these firms.
Speaker 1: It was a matter of trust. But of course as
Speaker 1: they got bigger and wealthier and more successful, they brought
Speaker 1: in other partners. Sometimes it works, sometimes it didn't, you know.
Speaker 1: And and at Lazard they were wary of bringing in,
Speaker 1: you know, women, They didn't think women could you know,
Speaker 1: do this work or wanted to do this work. And
Speaker 1: I remember they had one woman, and then the idea
Speaker 1: was to bring in a second one. And somebody, some
Speaker 1: fancy partners, said, why do we need a second partner,
Speaker 1: we already have one. I was a second woman, We
Speaker 1: already have one. I mean, that was the mentalities. Yeah, Okay,
Speaker 1: whatever exactly. I mean, obviously that's killis and needs to change,
Speaker 1: but it's slow to change, and even when they give
Speaker 1: lip service to it, it's slow to change because it's
Speaker 1: not a particularly you know, pleasant work environment to begin with.
Speaker 1: It's very laborious, hard work, long hours. Nobody's gonna have
Speaker 1: much sympathy for people who work on Well Street given
Speaker 1: how much they get paid. But it's not, you know,
Speaker 1: a great lifestyle. The work life balance is completely messed
Speaker 1: up and hasn't really changed dramatically. Uh you know, despite
Speaker 1: again what they say they're trying to do and pretending
Speaker 1: to try to do. So, you know, I hate to
Speaker 1: be a downer on this, but you know, the fact is,
Speaker 1: there's a long, long way to go on this. Though.
Speaker 1: I want to go back and talk a little bit
Speaker 1: about the culture at g E because for years this
Speaker 1: was a place that of cultures. Yeah, I mean, for
Speaker 1: years this was a great place to work. They talk
Speaker 1: a little bit about how the culture they're allowed for
Speaker 1: the downfall of g was it. Well, you know, my
Speaker 1: my first job out of business school, uh inn was
Speaker 1: working at G Capital financing leverage buyouts of all things,
Speaker 1: which was sort of like the last thing I would
Speaker 1: have ever expected to be doing in my life. At
Speaker 1: that point, I had been a reporter and have gone
Speaker 1: to business school, and then I was working at G
Speaker 1: Capital financing LBOs around the corner from here, and then
Speaker 1: I went and worked for the chief credit officer of
Speaker 1: G Capital up in Stanford, Connecticut. I always found g
Speaker 1: E to be, you know, quote unquote corporate. You know,
Speaker 1: I wasn't necessarily a real corporate guy, but I felt
Speaker 1: it felt corporate. You know, there were there were there
Speaker 1: were HR departments before you know, Wall Street firms at
Speaker 1: HR departments. You know, there were uh lots of benefits
Speaker 1: and perquisites. You know. You I got a company car,
Speaker 1: you know, I got to take these trips and go
Speaker 1: on golf outings and things like that, and it was
Speaker 1: sort of like raw ra and really sort of American
Speaker 1: and sort of kind of white bready, you know, and
Speaker 1: you know it's okay. Uh, you know, I like the people.
Speaker 1: I really like the people I worked with. I think
Speaker 1: they are quite unique group of people. And I really
Speaker 1: enjoyed interviewing the people for this book, and are from
Speaker 1: everybody from Jack, Jeff m malt, you know, even people
Speaker 1: like David Zaslov and David Calhoun and Dave Cody, that
Speaker 1: the David's who all have become very successful, they just
Speaker 1: loved Jack and they loved working at GE. I mean
Speaker 1: it's incredible. I mean, having worked at a bunch of
Speaker 1: Wall Street firms, you know, and interviewed a bunch of
Speaker 1: people working in all sorts of Wall Street firms, you
Speaker 1: rarely get anybody who says how excited and glad they
Speaker 1: were to be working at Wall Street. But people really
Speaker 1: liked working at GE for for a long time, or
Speaker 1: at least during this you know, phase, until things sort
Speaker 1: of unwound. That's former Bloomberg contributor and veteran financial journalist
Speaker 1: Bill Cohen. His latest book, it's on General Electric. It's
Speaker 1: called Power Failure, The Rise and Fall of an American Icon.
Speaker 1: It is out now. And that wraps up the first
Speaker 1: hour of the weekend edition to Bloomberg Business Week from
Speaker 1: Bloomberg Radio. I'm Carol Masser and I'm Tim Stanivack. Ahead
Speaker 1: in our next hour, we'll hear from the CEO of
Speaker 1: logistics software platform shipp Oh on why she sees recession ahead,
Speaker 1: and the head of the software maker Octa on the
Speaker 1: latest innovations when it comes to cloud infrastructure security. Plus
Speaker 1: why Google's moonshot lab is literally harvesting innovation right here
Speaker 1: on Earth. And then we've got a little slice of
Speaker 1: heaven from our Bloomberg Pursuits team. Stick around. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick takes Tim
Speaker 1: Stinovin on Bloomberg Radio Bloody Ahead in our second hour
Speaker 1: of the weekend edition of Bloomberg Business Week, including OCTA
Speaker 1: CEO Todd McKinnon on everything from the collapse of FTX
Speaker 1: to the broader outlook in Silicon Valley in a year
Speaker 1: that has been very very uncomto textocks and the Indus Street.
Speaker 1: Todd will tell us why his firm, though, is poised
Speaker 1: for a rebound. Plus we take a closer look at
Speaker 1: Google's famous innovation lab X and why it's so called
Speaker 1: moonshot factory is shifting toward more pedestrian projects with actual
Speaker 1: commercial applications. Our ax Chafkin has a great story in
Speaker 1: the magazine about a partnership with the fruit farming company
Speaker 1: Driskolls and Google's for a into a tech first. Up
Speaker 1: this hour, though, we've got a company that's moving things
Speaker 1: around for its e commerce customers. We're talking about the
Speaker 1: shipping platform ship Boh, which makes some one million shipments annually.
Speaker 1: We certainly love companies like this. They have a great
Speaker 1: view of the overall economy momentum of things being bought
Speaker 1: in ship just moving around, telling us what's going on
Speaker 1: in terms of economic activity. We got up with the
Speaker 1: company's co founder and CEO, Laura Baron's Woo Laura, great
Speaker 1: touch out with you once again. Um, So, you've got
Speaker 1: tons of thousands of businesses that Shippo serves. You work
Speaker 1: to use software to get them the best deals on
Speaker 1: their shipping. Give us an idea. I want to talk
Speaker 1: about business in a second, but just give us an
Speaker 1: idea of what you're seeing when it comes to the
Speaker 1: economy out there, because we're getting mixed reports from some
Speaker 1: of the biggest retailers out there. So we're a software
Speaker 1: platform that connects e commerce companies to a network of
Speaker 1: different shipping providers. So all of our customers there. They
Speaker 1: need to ship there. They're selling products on the Internet
Speaker 1: and they need to move their products from A to
Speaker 1: B to the to the customers, and we're building that
Speaker 1: that software component there. Um, the carriers are doing the
Speaker 1: heavy lifting, they're doing the shipping, and we're building the
Speaker 1: technology giving access to discounted shipping rates and just helping
Speaker 1: SMB ship like retail giants. And now to your question
Speaker 1: around what we're seeing, Um, it is it is a
Speaker 1: difficult prediction for this holiday season. I think what's what's
Speaker 1: for sure happening is that in previous years we've seen
Speaker 1: that there was a big spike around the big deal
Speaker 1: days like Black Friday and Cyber Monday, and we're seeing
Speaker 1: that change. We're seeing elevated shipping and elevated discounts just
Speaker 1: way earlier in the season, which is a very interesting track.
Speaker 1: It's interesting. We don't yeah, we don't think that there
Speaker 1: will be as big of a spike on these two
Speaker 1: big like normal deal days, but those deals are happening
Speaker 1: much earlier in the season nowadays. And um, yeah, customers
Speaker 1: or consumers are writing access to discount products earlier on.
Speaker 1: I was gonna say, Laura I mean, I had to
Speaker 1: pick up something for my daughter and she's like, hey, mom,
Speaker 1: there's already a Black Friday sale, so you can get
Speaker 1: it now now. So it's definitely happened. Having said that,
Speaker 1: I do like talking to folks like you because you
Speaker 1: do have a great indication of what's going on in
Speaker 1: the macro environment. What you are seeing in terms of
Speaker 1: activity and the upcoming holidays, does it speak recession to you.
Speaker 1: So we're for sure looking at a much softer queue
Speaker 1: for compared to previous q fors. But previous KEW fors
Speaker 1: were out of the ordinary as well, with pandemic limiting
Speaker 1: us from like going to physical stores. So this year
Speaker 1: we're seeing a little bit of back to the previous
Speaker 1: trend lines um and the kind of or below kind
Speaker 1: of that is. That is what we're expecting also because
Speaker 1: consumers still have a lot of like the job market
Speaker 1: is still going strong, consumer spending is still doing okay,
Speaker 1: but it's it's very hard to predict. I think we're
Speaker 1: like next year, we're for sure looking at a recession year,
Speaker 1: and uh, we're we're thinking that this holiday season will
Speaker 1: still be a good year for our good season for
Speaker 1: retailers remind us too. You talked about the business, and
Speaker 1: we appreciate you reminding our audience about what it is
Speaker 1: exactly that you guys do. But you do play into
Speaker 1: the e commerce sector. Who is your typical customer? Yeah,
Speaker 1: our typical customer is an SMB merchant. So SMB is
Speaker 1: between five hundred and five thousand packages a month. Um,
Speaker 1: so it's a it's a pretty right wide range here,
Speaker 1: but our our typical customerships anything from fashion to make up,
Speaker 1: anything you can buy on the internet. And um, we're
Speaker 1: we've actually seen an explosion in the SMB segment during
Speaker 1: the pandemic, like more businesses getting started, more businesses moving online.
Speaker 1: So that's the affect audience for us. And um, we're
Speaker 1: not enterprise, so Amazon and Target and Walmart are out
Speaker 1: of scope for US, but at like the smaller mid
Speaker 1: mark SMB, a mid market segment, that's our customer. What
Speaker 1: makes you so confident that we're going to see a
Speaker 1: recession next year? What's the data that you can point
Speaker 1: to that indicates that. Yeah, it looks like all indicators
Speaker 1: the tech market is softening. We're seeing rounds of layoffs
Speaker 1: in the in the tech industry that will affect o
Speaker 1: our other industries later later on as well, And um,
Speaker 1: I think that is just calling the negative spiral there
Speaker 1: to consumer spending being being worse. People are just not
Speaker 1: willing to just spend on discretionary products. Inflation is at
Speaker 1: our record high, and we've seen the gas prisis rising,
Speaker 1: So all all indications lead to a recession year next year. Um,
Speaker 1: but I'm not an economist, so fingers fingers crossed data,
Speaker 1: I'm wrong. That was Laura Baron's woo. She's the co
Speaker 1: founder and CEO of ship Oh. She mentioned that her
Speaker 1: customer basis can is mainly of SMB merchants, those being
Speaker 1: small and medium sized businesses, and it sounds like Laura
Speaker 1: is really, you know, prepared for a downturn in you
Speaker 1: feel like the tone of conversations. I felt like, to
Speaker 1: some extent, fed speakers maybe starting to think about maybe
Speaker 1: slowing down in terms of the size of rate increases,
Speaker 1: but I thought in general leaders were more and more
Speaker 1: talking about the momentums coming down. Yeah, that's certainly what
Speaker 1: it seems like analysts too. It's just a question of
Speaker 1: where the market is compared to where people think the
Speaker 1: economy is going. Exactly all right, you're listening to Bloomberg
Speaker 1: Business Week coming up. A Silicon Valley executive says he's
Speaker 1: poised to meet a growing need for businesses everywhere. Every
Speaker 1: industry across the world is trying to do more technology,
Speaker 1: whether that's adopt the innovation in the cloud, or keep
Speaker 1: secure and stop the risk of data breaches, or transformed
Speaker 1: digitally and build better customer experiences through the world world
Speaker 1: beating websites and mobile apps and identity is at the
Speaker 1: heart of that. Octa CEO Tom McKinnon joins us on
Speaker 1: the other side, This is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik
Speaker 1: from Bloomberg Radio. One of the things we love to
Speaker 1: do regularly is check with CEOs of all different types
Speaker 1: and sizes of companies for insight, yes on their businesses,
Speaker 1: but also on the macro outlook. One such company recently
Speaker 1: was Octa, which is a roughly eight billion dollar market
Speaker 1: cap company. It's an identity and access management software firm
Speaker 1: working in the cloud. Gugenheim upgraded the stock to buy
Speaker 1: earlier this month, saying the firm's valuation is quote too
Speaker 1: compelling to ignore despite challenges that will take several quarters
Speaker 1: to sort out. And Carol, you went straight to the
Speaker 1: source to find out why, Well, that means we went
Speaker 1: to the company right. Bloomberg Radio's Paul Sweeney and I
Speaker 1: caught up with Actors co founder chair in CEO Todd McKinnon.
Speaker 1: He was joining us from the company's Octane twenty two
Speaker 1: product Expo event, and as a tech exec who has
Speaker 1: a front seat on disruption and innovation, we began by
Speaker 1: asking for his reaction to some big news of that day,
Speaker 1: and that was the sudden collapse of sand Bakeman Freed's
Speaker 1: crypto exchange f t X. I think we're all watching
Speaker 1: it and we're all trying to figure out what it
Speaker 1: means for the broader ecosystem. But one thing is for sure,
Speaker 1: Silicon Valley is in a different world than it was
Speaker 1: a year ago. Everyone is making sure that we're doubling
Speaker 1: down on our most strategic and important initiatives, and maybe
Speaker 1: some of the things we were doing last year that
Speaker 1: maybe it wasn't necessary, We're we're not focusing on that
Speaker 1: as much as we are all of our core strengths,
Speaker 1: and that's why work so excited about this conference and
Speaker 1: what we can bring to the whole technology market with
Speaker 1: our world class identity products. So, Todd, I'm just looking
Speaker 1: at the f A functional on the Bloomberg terminal and
Speaker 1: it looks like Wall Street analysts have you know, thirty
Speaker 1: growth revenue for the next few years. Top line for
Speaker 1: you guys, what's driving that growth? Well, every industry across
Speaker 1: the world is trying to do more technology, whether that's
Speaker 1: adopt the innovation in the cloud, or keep secure and
Speaker 1: stop the risk of data breaches, or transformed digitally and
Speaker 1: build better stomer experiences through the world world beating websites
Speaker 1: and mobile apps and identity is at the heart of that.
Speaker 1: You need to log on employees at work and do
Speaker 1: it securely and make sure there's no fishing or any
Speaker 1: data breaches. And you need to make sure you give
Speaker 1: your customers. You're building that great new app at your company.
Speaker 1: You're getting your subscribers or your customers or your citizens
Speaker 1: online to connect to you directly. And you have to
Speaker 1: have a great app and that starts with a great
Speaker 1: logging experience. And we have our help our customers and
Speaker 1: organizations around the world do just that. You know, I
Speaker 1: seek some of that top line growth, and then I
Speaker 1: see your stock is down seventies some percent year to date.
Speaker 1: Is this just a tech washout or what's the street
Speaker 1: concerned about with with your name? I think there's a
Speaker 1: couple of things there. There's definitely valuations across the border
Speaker 1: technology you're down. And also, we took a pretty big,
Speaker 1: bold step a couple of years ago to branch out
Speaker 1: into this important new market for US. It's called the
Speaker 1: customer identity management market, which is we serve with our
Speaker 1: customer identity cloud and that acquisition. Over the past couple
Speaker 1: of quarters, there have been some execution stumbles in terms
Speaker 1: of integrating that, and we're working through those now and
Speaker 1: really excited to talk about our long term products. You're
Speaker 1: talking about that six and a half billion dollar deal,
Speaker 1: right AUTHO zero excuse me, So tell me about what
Speaker 1: kind of you know through put, if you will, that
Speaker 1: you're seeing already on that acquisition. I know it's early,
Speaker 1: but tell us about that. Well. It's, like I said,
Speaker 1: it's a really important strategic part of the market for
Speaker 1: us because traditionally identity management has been sold as part
Speaker 1: of a monolithic platform. You got it when you bought
Speaker 1: Microsoft applications or you got it when you bought applications
Speaker 1: from IBM. But on the customer identity side, there's this
Speaker 1: huge untapped potential where engineers and developers and product people
Speaker 1: they're building identity themselves. They're spending their valuable time creating
Speaker 1: log in pages and password reset functionality and multi factor authentication.
Speaker 1: But there's a better way. Every hour they spend on
Speaker 1: identity as an hour they're not spending on innovation. So
Speaker 1: we have this product, Customer Identity Cloud, which is the
Speaker 1: technology from the OS zero acquisition that can do it
Speaker 1: for them and free them up to spend every hour
Speaker 1: and every calorie they expend on great innovation and their
Speaker 1: products and not on identity, which were the experts in
Speaker 1: the macro environment right now, and the outlook for your
Speaker 1: business feels like a lot of enthusiasm, barring the crypto side,
Speaker 1: um certainly the equity side of things because of that
Speaker 1: softer inflation print. How do you see the economy and
Speaker 1: the outlook for your business, let's say over the next
Speaker 1: six to twelve months. Well, we've started oct fourteen years ago,
Speaker 1: and over the past fourteen years we've seen unprecedented growth
Speaker 1: across cloud computing. Now, cloud computing is the default computing
Speaker 1: platform for every organization in the world. We've seen security
Speaker 1: risks and the how you could avoid risks with great
Speaker 1: cyber posture. We've seen that become as important as ever
Speaker 1: and we've seen every organization want to connect with their
Speaker 1: customers online. And the macro economic environment is changing. Money.
Speaker 1: A year ago, zero interest rates, investments weren't weren't as
Speaker 1: focused and as scrutinized as they are now. And so
Speaker 1: no company, no organization, no industry is immune to that.
Speaker 1: But what's really giving us a very bright outlook for
Speaker 1: the over the long term is these trends continue. Everyone
Speaker 1: is figuring out how they can adopt the latest technology
Speaker 1: for their force. They want to build world beating customer
Speaker 1: apps because in the time of economic uncertainty, many times
Speaker 1: it's the best time to double down on innovation so
Speaker 1: you can leap ahead of your competitors. We know this.
Speaker 1: In two thousand nine when I started Octa, we took
Speaker 1: that time. There was an economic problem, but that the
Speaker 1: Great Recession, and we started Octa in this downturn, and
Speaker 1: it was a good time to focus on innovation and
Speaker 1: we we built the industry leading company because of that. Todd,
Speaker 1: How would you characterize the risk appetite in Silicon Valley
Speaker 1: these days? How would it be now versus a year ago.
Speaker 1: I think for the top end of the VC market
Speaker 1: it's as strong as ever. The overall amount of funding
Speaker 1: is way down, and you see that happening happen in
Speaker 1: these cycles. But great entrepreneurs have great ideas. They might
Speaker 1: have to work a little harder to raise that round
Speaker 1: and the valuation certainly isn't going to be as high.
Speaker 1: But the best ideas and the best entrepreneurs they're getting funding.
Speaker 1: And I think that's will always be true because there's
Speaker 1: so much potential in technology. At OCTA, we are technology enthusiasts.
Speaker 1: We believe that over the next five years as you're
Speaker 1: gonna see amazing innovation and collaboration technology and the ways
Speaker 1: to more more work more effectively and collaborate with teammates remotely.
Speaker 1: Especially on the security side as well. We think there's
Speaker 1: going to be security breakthroughs that make companies ten times
Speaker 1: more productive, which is why one of our core beliefs
Speaker 1: is that we believe in this world an open ecosystem
Speaker 1: of innovation where the best innovation can be used by
Speaker 1: any company. That's the right way forward, and that's what
Speaker 1: we're trying to build. Hey, Todd, I think people are
Speaker 1: listening and they're like, Okay, wait, what are you talking about?
Speaker 1: So how does it affect you know, people in their
Speaker 1: workspaces and everyday leaving living break it down for us,
Speaker 1: We've been through the last three years with so many
Speaker 1: people working remotely, and we we've been as an industry
Speaker 1: and as a as a collective workforce. We we've done
Speaker 1: a good job collaborating and communicating. But I think the
Speaker 1: tools that we use, whether it's chat or email or
Speaker 1: video conferencing, that they they weren't designed for this world
Speaker 1: where remote is almost the default, and working in a
Speaker 1: hybrid way in the office and remotely is the way
Speaker 1: every organ is station, every company operates. So I think
Speaker 1: when we get together in five years and we talk,
Speaker 1: we're gonna be amazed at some of the new technologies.
Speaker 1: Maybe it's virtual reality headsets, or maybe it's a new
Speaker 1: kind of collaboration software that can mix a hybrid meeting
Speaker 1: where some people are remote and some people on the
Speaker 1: from the metaverse. And I'm not making a joke like
Speaker 1: I feel like it creeps into every conversation. Is this
Speaker 1: where the metaverse maybe has a real world application. I
Speaker 1: think about the metaverse is really an evolution of the Internet.
Speaker 1: So today we use the Internet on phones and computers,
Speaker 1: but we're going to access the Internet on these VR
Speaker 1: headsets and these augmented reality devices. It's I think that's inevitable.
Speaker 1: I think it's it's a new way to interact with people,
Speaker 1: and more people over time will use these new devices.
Speaker 1: But it's the same Internet, the same way to work,
Speaker 1: the same way to collaborate, the same way to socialize
Speaker 1: as we've seen in the past. That's Todd McKinnon. He's
Speaker 1: co founder, chairman and CEO of the identity management software
Speaker 1: developer Opta. Bloomberg Radio is Paul Sweeney taking apart in
Speaker 1: there as well. Up next to Bloomberg Business Week, how
Speaker 1: Google's Moonshot lab is using it's high tech gadgets to
Speaker 1: help improve farming right here on Earth. This is Bloomberg
Speaker 1: broadcasting from the financial capital of the World Bloomberg eleven
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one oh six one to San Francisco Bloomberg nine
Speaker 1: six to the country, Sirius, XM General one nine and
Speaker 1: around the globe, the Bloomberg Business and Bloomberg Radio dot com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stenovan on Bloomberg Radio. I think innovation.
Speaker 1: You probably think about crypto, the metaverse, self driving cars
Speaker 1: from the likes of companies such as Google, and yes,
Speaker 1: some of that goes on at Google's innovation lab that's
Speaker 1: known as X so to do a few other closely
Speaker 1: guarded projects that are literally more down to earth. It's
Speaker 1: all in a story you'll find in the Technology section
Speaker 1: of the Double Issue. It's the current issue of Bloomberg
Speaker 1: Business Week. The editor of the magazine is Joe Weber.
Speaker 1: He and business we call him this Max Jaffkin, are
Speaker 1: here to explain the fruits of the tech giants, a
Speaker 1: tech efforts. So this is an effort by X, which
Speaker 1: is the quote unquote moonshot Factory of Alphabet, which is
Speaker 1: the old Google X to bring you know, essentially Google's
Speaker 1: technology to farming. Back in the day, X was really
Speaker 1: focused on these kind of sci fi type things. Like
Speaker 1: Tim was talking about, um, you had self driving cars.
Speaker 1: They were literally talking about space elevators um uh for
Speaker 1: for a while and basically over the last decade that
Speaker 1: has mostly either fallen apart or dialed back. We've seen
Speaker 1: a couple of these quote unquote moon shots be spun off,
Speaker 1: Weymo being the best and probably the biggest example, and
Speaker 1: a bunch of them falling apart. Glass fell on its face,
Speaker 1: a loon, which was the balloon internet thing didn't pan out.
Speaker 1: There was a kite, a wind powered kite thing that
Speaker 1: didn't pan out. And a bunch of things that that
Speaker 1: although they panned out, they didn't really turn into the
Speaker 1: sci fi thing in the future. Now. When you talk
Speaker 1: to the folks at X, what they say basically is
Speaker 1: like we are moving away from the kind of flashy
Speaker 1: for flashy sake and more towards real business business that
Speaker 1: could potentially drive profit for alphabet, which again a Google
Speaker 1: executive talking about profit is it's sort of a weird
Speaker 1: thing if you've been covering this industry for a long time,
Speaker 1: because you know, in the old days, the search engine
Speaker 1: just threw off so much money that they didn't even
Speaker 1: bother talking about it elsewhere in the company. But they are,
Speaker 1: and so this is so what's happening at DRIST Goals
Speaker 1: is they built these rovers they're called they're smart car
Speaker 1: sized semi autonomous tractors that drive over the field take
Speaker 1: pictures of plants. What they're lived doing, literally is is
Speaker 1: counting flowers, counting leaves and attempting to tell the farmers
Speaker 1: in this case drisk Goals, which is the largest supplier
Speaker 1: of the Big four berries, And what they're trying to
Speaker 1: do is tell them which of their plants are succeeding
Speaker 1: and which aren't. And and that's an interesting problem because
Speaker 1: although drist calls is super sophisticated, you know, they do
Speaker 1: edtic analysis of in their breeding programs, no one really
Speaker 1: knows what how the genetics correlate to the health of
Speaker 1: the plant or the harvest ability, which is like how
Speaker 1: high off the ground the berries are. And so they're
Speaker 1: basically using machine learning to deal with that. And Google
Speaker 1: uh mineral is the is the name of the project
Speaker 1: within within Google has plans to expand this to, you know,
Speaker 1: just to all sorts of areas. They've got another partnership
Speaker 1: with Syngenta, some major agribusiness um and a bunch of
Speaker 1: other partners partnerships and I think long term. You know,
Speaker 1: the play is to have some kind of cloud AI
Speaker 1: service for for the agoness. Mendel would be so happy.
Speaker 1: But what I'm wondering is when did ag tech becomes
Speaker 1: such a thing for Google or is it about profitability
Speaker 1: and maybe another revenue line. Well, I think it's a
Speaker 1: couple of things. So one is if you look in
Speaker 1: the agg space broadly, there is a lot of interesting
Speaker 1: stuff going on, even on autonomy. Probably uh egg is
Speaker 1: one of the areas where autonomy has arguably you know,
Speaker 1: gone the furthest where you have you know, self dropped
Speaker 1: John Deere and other companies kind of pursuing self driving tractors.
Speaker 1: So clearly, um, there's an opportunity there, um, And I
Speaker 1: think really what's happening Number one is alphabet is looking
Speaker 1: for any way that it can kind of broaden its scope.
Speaker 1: The last thing is when you talk to the folks
Speaker 1: at X and I spoke with Astor Teller, who is
Speaker 1: the his title as Captain of Moonshots, He's the head
Speaker 1: of the Moonshot factory. He basically says that they have
Speaker 1: been really focused on climate as a challenge as a
Speaker 1: potential moonshot, and there is a way to see these
Speaker 1: innovations in agriculture having you know, a positive impact on
Speaker 1: climate change, because if you're able to say, you know,
Speaker 1: use less fertilizer, that sort of thing, you're going to
Speaker 1: have a carbon impact. What does it actually look like
Speaker 1: in practice? And and mineral is one way that we can.
Speaker 1: But that voice is Joe Weber. He's captain of Bloomberg
Speaker 1: Business Week, captain of moonshots At. It's uh, it's like
Speaker 1: a sort of autonomous a t V. It's got rugged wheels,
Speaker 1: drives over plants very slow really, and there's like a
Speaker 1: weird little camera studio inside of the machine with flashes
Speaker 1: and stuff. It takes a picture of the plants and
Speaker 1: then goes into the cloud into this kind of AI
Speaker 1: system that is honestly not that different from the self
Speaker 1: driving car system or anything like that, and it it says, hey,
Speaker 1: like is it what is this plant? How is it doing?
Speaker 1: How likely is it to produce fruit? Um? And and
Speaker 1: hopefully in the long run that allows drist Golls to say,
Speaker 1: is this a plant worth breeding, worth worth continuing with
Speaker 1: or is it one that should be you know, cast
Speaker 1: aside in favor of other strawberry varieties. That was Business
Speaker 1: we call him this. Max Chaffkin, along with the editor
Speaker 1: of the magazine, Joel Weber, props to him for like
Speaker 1: being a straight suitor as we're all like kind of
Speaker 1: like coming out of Yeah, we tried to derail him
Speaker 1: many times and he just wouldn't play. Max is incredible,
Speaker 1: a true pro. All Right, you're listening to Bloomberg Business
Speaker 1: Week coming up, thinking about your upcoming Thanksgiving holiday feast?
Speaker 1: Then stop right here. How to be the host with
Speaker 1: the most and deliver quote a slice of heaven tiered
Speaker 1: guess at the same time. I'm sticking around for that.
Speaker 1: How about you? You You want your cake and to eat
Speaker 1: it too, and I want it delivered to. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. We turned
Speaker 1: out to our friends with Bloomberg Pursuits for a guy
Speaker 1: to holiday entertaining. And it's tough to be the host
Speaker 1: with the most if you don't have the menu to match. Luckily,
Speaker 1: we have the recipe for sweet success. We've got a
Speaker 1: list of the very best cakes and cocktails that America
Speaker 1: has to offer and you can save those home baking
Speaker 1: projects fore, or if you're like me, Carol, just never
Speaker 1: do them and instead you can just order the cakes
Speaker 1: straight to your table and focus on the drinks. Here
Speaker 1: the breakdown are a couple of our favorites. We got
Speaker 1: Bloomberg Pursuits editor Chris Rouser and our renowned food editor
Speaker 1: Kate Crater. Kate joining us from her new home in London. Chris,
Speaker 1: I want to start with you count lots of mo
Speaker 1: watering delights in this section. And something really interesting happened
Speaker 1: during the pandemic when it came to shipping cakes. Suddenly
Speaker 1: a lot more people started doing it. Yes, so a
Speaker 1: lot of people during the pandemic started baking cakes. They
Speaker 1: started baking bread, and then a lot of the rest
Speaker 1: of us looked at those people and said, and I
Speaker 1: wish I had some bread and some cake, but I
Speaker 1: am sure not baking. And we started having cakes delivered
Speaker 1: from Gold Belly and um. That has continued on even
Speaker 1: as the pandemic has lightened. UM. And every year we
Speaker 1: have a holiday entertaining section in Bloomberg Pursuits, one of
Speaker 1: our favorite sections. Kate usually takes charge. And we really
Speaker 1: wanted to do cakes this year, if we felt like
Speaker 1: everybody needed a slice of cake, So Kate picked out
Speaker 1: some of the best new and regional cakes to really
Speaker 1: highlight across the US. I want to know, Kate, how
Speaker 1: the heck do you always I'm always amazed because there's
Speaker 1: so much stuff out there. How you whittle it down? Well,
Speaker 1: you know, it's so much work and research, Carol, hold on,
Speaker 1: I tell if you're joking here, like like, it's so
Speaker 1: hard to just you know, try all these cakes and
Speaker 1: order these cakes. But it is hard, right, you know,
Speaker 1: at some point, at some point you can kind of
Speaker 1: hit cake overload. But um, but it takes all it
Speaker 1: takes a lot of research for that to happen. But
Speaker 1: it's really it's just cakes are so great, Like they
Speaker 1: look wonderful. And this is you know, around this holiday time,
Speaker 1: it's usually pie season and a lot of people will
Speaker 1: talk about pies, but people usually make those pies. And
Speaker 1: I'm like you, I will eat cakes all day, but
Speaker 1: I don't really want to make them. And so in
Speaker 1: the same with pies, Like so it's great to have
Speaker 1: a cake because it shows up like I think pies
Speaker 1: just sort of sitting on the table, but it cake
Speaker 1: stands tall, its towers over everything else. So in the
Speaker 1: pie versus cake debate, cake will always win. You're reminding
Speaker 1: me that it's time for me to do my Twitter
Speaker 1: pie pole for Thanksgiving. But having said that, so Chris,
Speaker 1: let's talk about that cake that you featured on the cover,
Speaker 1: because this looks kind of amazing. Yeah, this is a
Speaker 1: strawberry crunch cake. And um, Kate actually into reviewed the
Speaker 1: bakers in Detroit. Sokake okake Kate, what were they like? Um? So,
Speaker 1: the woman who started her name is April Anderson, and
Speaker 1: she's in Detroit. It's a place called Good Cakes and Bakes,
Speaker 1: and um it is something that's really made the city proud.
Speaker 1: Her um grandmother came from the South, from Mississippi. She
Speaker 1: was part of the great migration that came to Detroit.
Speaker 1: Um and as we wrote it, it sort of is
Speaker 1: like that kind of like made for TV movie story.
Speaker 1: And April started using some of her family's Southern recipes.
Speaker 1: But she was also very inspired by the kind of
Speaker 1: junk food that she ate growing up. So this is
Speaker 1: a little bit I don't know if you guys know it,
Speaker 1: but there were some really kind of awful but also
Speaker 1: delicious strawberry, good humor, ice cream pops. This is a
Speaker 1: little If you look at it and think of that,
Speaker 1: I think you'll see the connection it's got. It's delicious,
Speaker 1: delicious um strawberry cake interspersed with white cake and pink icing,
Speaker 1: but it's covered with crusts strawberry oreos um that gives
Speaker 1: it a like this beautiful neon pink, this neon pink color,
Speaker 1: but also this terrific textural contrasts. So it all comes
Speaker 1: together really really well. And zero calories. Man, that's see
Speaker 1: that part of the story, Carol, I have to say, um,
Speaker 1: and looking at the pictures like it's a variety of
Speaker 1: cakes and colors and shapes and styles. But you know,
Speaker 1: the coconut layer cake. I'm not a fan of coconut,
Speaker 1: but can't I always feel like you go into a bakery,
Speaker 1: you're gonna see one. Not all coconut cakes layer cakes
Speaker 1: are the same, right, No, you have to be picky
Speaker 1: about them because, like you said, a lot of bakeries
Speaker 1: have them, but some people don't put that much thought
Speaker 1: into it. And I would say, as a general rule,
Speaker 1: there are a couple of places in New York could
Speaker 1: have decent ones, but you're really well off mill ordering
Speaker 1: one from the south, and one of the places that
Speaker 1: has a really really good one is called Savanna's Candy Kitchen. Um.
Speaker 1: It's out of Georgia, obvious, and they make one where
Speaker 1: the cake is super moist and they pay attention to
Speaker 1: the butter cream and it's got like so much coconut
Speaker 1: on it it looks like the snow fell on it.
Speaker 1: It's a commanding cake. There's also the element of historical
Speaker 1: cakes here. And I don't know if I'm the only
Speaker 1: one who had this association when I read that you
Speaker 1: can actually buy JFK's wedding cake. Who had the association
Speaker 1: with the Seinfeld episode from way back in the day
Speaker 1: where Elaine eats the cake from what does it think?
Speaker 1: It's like King Edward's wedding or something? Ja Peter Minsred, Yes,
Speaker 1: and it was so the kind of a throwback from
Speaker 1: me there. But I had that that thought when I
Speaker 1: was reading this. Um, but you can actually thought, at
Speaker 1: least for me. Um. Speaking of regional differences, though, there's
Speaker 1: this beautiful cake out of Boston. Yeah, it's really great.
Speaker 1: There's um this very time honored family owned company called
Speaker 1: Montillo's Baking company, and they've been there for like seventy
Speaker 1: years and they made this, um they made this cake
Speaker 1: for JFK and Jackie Kennedy on when they got married
Speaker 1: in the nineteen fifties, and they also served at his inauguration.
Speaker 1: And this again is like a yellow cake and it's
Speaker 1: got a fruity filling and just these very like lovely
Speaker 1: looking florets of more butter cream on top, and it
Speaker 1: looks like something you'd want to serve it an event.
Speaker 1: It's it's a great cake, and like you said, it
Speaker 1: has history, but they've also they definitely are there for
Speaker 1: all the Boston events. When Tom Brady was quarterback for
Speaker 1: the Patriots, they made a twelve hundred pound cake that
Speaker 1: I think was goal post was in the same of
Speaker 1: goal posts, but kind of crazy. And of course he
Speaker 1: didn't need it, right, because doesn't he have that crazy diet.
Speaker 1: Like it's like, alright, listen, look at it. Alright, with cake,
Speaker 1: you gotta have some cocktails. And Chris, let's talk about
Speaker 1: I love this section that Kate also digs into, and
Speaker 1: this is about I'm not a cocktail maker. I don't
Speaker 1: really bake cakes, but these only take sixty seconds. This
Speaker 1: gives me hope. Chris. Yes, so there's a new book
Speaker 1: out that focus on six these second cocktails, which are
Speaker 1: cocktails that you can make in less than sixty seconds um,
Speaker 1: which really rules out some of the things that our
Speaker 1: favorite mixologists in Brooklyn are always student, you know, singing
Speaker 1: the orange peel and stuff. None of that. Um. So
Speaker 1: these are actually really great, amazing drinks to make at home.
Speaker 1: The authors are Joel Harrison and Neil Ridley UM and
Speaker 1: we loved it and picked out some of her favorite
Speaker 1: recipes from him. Yeah, they're really fun. They take some
Speaker 1: really really good shortcuts, good and smart shortcuts, Like they
Speaker 1: make an old fashioned instead of having to like stir
Speaker 1: and a sugar cube around, which obviously isn't too challenging,
Speaker 1: but it takes time. They add maple syrup and so
Speaker 1: that gives it a delicious, earthy holiday flavor. And it's
Speaker 1: also smart because people generally have a little bit of
Speaker 1: maple syrup sitting around, you know, in their cabinet, on
Speaker 1: their shelf, and so it's a good way to use
Speaker 1: up ingredients that you have to make cocktails for yourself.
Speaker 1: Because it's that time of year, because people are variably
Speaker 1: stopping by. You can literally grab a couple of bottles
Speaker 1: and mix these drinks in the time that might take
Speaker 1: you to figure out what wine you're going to pour,
Speaker 1: you know, that night. We also in the section have
Speaker 1: a festive spirits guide, which is we always kind of
Speaker 1: do a holiday gift guide for spirits. What do you
Speaker 1: give people to add to their personal home bar? Um,
Speaker 1: And we've got some great wines from our wine critic
Speaker 1: Ellen McCoy, like the two thousand fourteen Iron Horse Stargazing
Speaker 1: Couvey Brutes and some spirits too, So I would love
Speaker 1: everyone to check that out. All price points, all price points. Um.
Speaker 1: There's also some great things that I'm a big even
Speaker 1: like during the week, I love to throw candles. I
Speaker 1: don't even care if I'm having like a hamburger. I
Speaker 1: just find it really fun. So you guys have some
Speaker 1: great choices in terms of getting lit when you're having
Speaker 1: your dinner party. But I want to end We've just
Speaker 1: got a few minutes lit. I'm not talking about the alcohol,
Speaker 1: but that's that too. But um, how to be a
Speaker 1: host with the most right We've all been hosts are
Speaker 1: gone to something And Chris, what are your thoughts on
Speaker 1: this section? It was a lot of fun to go
Speaker 1: through it. So we went to Daniel Posts Sending, who's
Speaker 1: the grandson of m Only Post and he's the co
Speaker 1: president of the Emily Post Institute. She's obviously the great
Speaker 1: etiquette maven and they they've redone their book which came
Speaker 1: out just last month. Actually um and so we called him.
Speaker 1: He's an amazing resource. We call him all the sack
Speaker 1: and uh. We asked him about how to avoid major
Speaker 1: holiday pitfalls. He had some really good advice. One of
Speaker 1: the things people basically go overboard and then they forget
Speaker 1: that the point of the holidays is like interpersonal interaction
Speaker 1: and having fun is opposed to gifts and showing and
Speaker 1: so one thing he always says, you have to be
Speaker 1: willing to accept the costs of entertaining. If your tablecloths
Speaker 1: are too nice, if your glasses can't be broken, don't
Speaker 1: have people over well, you know, if you're going to
Speaker 1: get lit at a party, like wine's going to spill
Speaker 1: on the white carpet. Okay, what do you think about
Speaker 1: when you either are hosting something or you're going somewhere,
Speaker 1: What do you think about that side of the equation.
Speaker 1: I think the way that Daniel Postum setting looks at
Speaker 1: this is so engaging and really sort of makes you
Speaker 1: think like, wow, I want to entertain like um. One
Speaker 1: of his other tips is that you should you know,
Speaker 1: when people come at you with their dietary restrictions, as
Speaker 1: they endurably do, you should turn it into an opportunity
Speaker 1: and the challenge and say like, Okay, this gives me
Speaker 1: an opportunity to do this, or I'll figure out the
Speaker 1: one dish I can make. It speaks to everybody's crazy diets,
Speaker 1: but you definitely should figure out the best way forward
Speaker 1: and make sure that you addrest them because you really
Speaker 1: do want everyone to be happy when they sit down
Speaker 1: at your table. Do you have a favorite gift to
Speaker 1: get as a host? Who? Now, I want to say
Speaker 1: candles the hand. I want every one of these candles
Speaker 1: on these shelves. Al Right, guys, listen, have a wonderful
Speaker 1: holiday season, and so glad that you've given us this guy,
Speaker 1: because it's lots of ideas and thoughts. Of course, our
Speaker 1: food editor of Blueberg Pursuits Kate Creator and of course
Speaker 1: the editor of the Pursuits team and section, Chris rouser Um,
Speaker 1: Happy holidays to you, all right, That wraps up the
Speaker 1: wee get edition of Blueberg Business Week from Bloomberg Radio.
Speaker 1: Thank you so much for joining us, and thanks also
Speaker 1: to Paul Sweeney who helped us out this past week.
Speaker 1: I'm all Masser and I'm Tim Stanavak. Be sure to
Speaker 1: tune into Bloomberg Business Week Monday through Friday. It starts
Speaker 1: at two pm Wall Street Time on Bloomberg Radio. You
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Speaker 1: Quick Take, available at Bloomberg dot com, slash qt, and
Speaker 1: streaming platforms like Roku, Apple TV, Samsung TV, and more.
Speaker 1: Have a great weekend, everyone, Time for cakes and cocktails. BC.
Speaker 1: This is Bloomberg