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 Messier 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 past week highlighted by
Speaker 1: the fomc's final meeting of Federal Reserve Chairman Jerome Powell
Speaker 1: calling inflation the biggest threat to America's economic recovery, and
Speaker 1: the Central Bank signaling a series of interest rate hikes
Speaker 1: on the horizon, the latest market twist, and what our
Speaker 1: Business Week team is dubbing investing's wildest year ever. That's
Speaker 1: the subject of our cover story, which we'll get to
Speaker 1: in just a moment, And ahead on the broadcast, we're
Speaker 1: gonna sit down with Raj Rajer Rottenham. He once ran
Speaker 1: a seven billion dollar hedge fund before receiving the longest
Speaker 1: prison sens ever handed out for insider trading. Now he's
Speaker 1: defending his actions that put him behind bars in a
Speaker 1: new book, Uneven Justice. The plot to sink Gallia plus
Speaker 1: the head of the World Valent Tourism Council on what
Speaker 1: the Akron variant means for a multi trillion dollar industry.
Speaker 1: All of that to come. We begin with our cover
Speaker 1: story this week, a takeover in the finance section of
Speaker 1: the magazine. It's a detailed look at a year that's
Speaker 1: market headlines dominated by retail traders, meme stocks, cryptocurrency SPACs.
Speaker 1: We got some celebrities in there as well, Delvis breakdown
Speaker 1: one filled with fear, fascination, and greed. We turned to
Speaker 1: Bloomberg Market senior editor Mike Reagan and Personal Finance reporter
Speaker 1: Mr Lena got Fapolu. Alright, Mike, let's start with you.
Speaker 1: How do we make sense of the convergence of popular
Speaker 1: culture and modern finance. I gotta say, it feels like
Speaker 1: it was a year like no other. Yeah, it really
Speaker 1: was a unique year, A crazy year. I guess that's
Speaker 1: why they got me involved. A good fit, right, But
Speaker 1: you know, I do think that the fascinating thing is
Speaker 1: how investing, especially in sort of the crypto and the
Speaker 1: real speculative parts of the stock market, sort of overtook
Speaker 1: pop culture to some degree this year. I mean, there's
Speaker 1: a lot of things that kind of led up to that.
Speaker 1: I think the elimination of commissions at the online brokerages
Speaker 1: a couple of years ago played a part of the role. Obviously,
Speaker 1: this kind of helicopter money coming from the government and
Speaker 1: people being forced to save rather than spend gave people
Speaker 1: a lot of free cash. But to me, the really
Speaker 1: fascinating thing is, you know, look that we basically forced
Speaker 1: everyone to go home and isolate themselves. And you'd think, well,
Speaker 1: what would that cause people to do. You'd think you
Speaker 1: would cause them to kind of become loners and and
Speaker 1: sort of self reflective. But instead, all these online communities
Speaker 1: really just grew and grew and grew and started thriving.
Speaker 1: So to me, I think when you invest now you
Speaker 1: have to sort of consider this as a fundamental driver
Speaker 1: of investing is how powerful are the communities that are
Speaker 1: backing some of this assets, you know, whether it be
Speaker 1: a MC a cult stock stock like that, or something
Speaker 1: like shiba, you know, or doge coin. If you get
Speaker 1: enough people tweeting about it and posting on Reddit about
Speaker 1: it and telling their friends about it, that fundamental value
Speaker 1: of that community suddenly is what it's the price of
Speaker 1: the asset one thing that I find so fascinating about
Speaker 1: this is it's it's it's not just you know, the
Speaker 1: retail traders, the people who are new to this, who
Speaker 1: entered the market this year, that are that are having
Speaker 1: an impact. Mr Lanny Gofapulu, come on in here, because
Speaker 1: you've spent a good part of the past year talking
Speaker 1: to retail investors and talking to people who perhaps even
Speaker 1: left careers on Wall Street to pursue the n f
Speaker 1: T boom. Tell us about one of these folks. You
Speaker 1: talked to, Sergio Silva, who worked at Barclay's in equity
Speaker 1: sales before he left to get into crypto. Yeah, he's
Speaker 1: just one of the many examples of people that you know,
Speaker 1: we've spoken to this year, and when Business came to
Speaker 1: me and asked me to find some voices to sort
Speaker 1: of portray what Mike explained earlier has happened this year.
Speaker 1: Really it was just a plethora of folks. There are
Speaker 1: so many stories out there of people who have come
Speaker 1: in contact with all of these obscure financial vehicles that
Speaker 1: came into play this year. In Sergio is just one
Speaker 1: example of the many folks who chose to leave their
Speaker 1: traditional Wall streets you know, banking jobs and turn to
Speaker 1: you know, ride this this this wave um of of
Speaker 1: n f t s of crypto full time. And so
Speaker 1: Sergio was basically sitting at home during the pandemic and
Speaker 1: he was, you know, in all these Twitter discord telegram
Speaker 1: chats of people talking. He stumbled upon a crypto punk
Speaker 1: project and he decided to buy one. And for those
Speaker 1: who don't know what crypto punks are, it's these small,
Speaker 1: pixelated uh n f t s that are human like
Speaker 1: um pixelated characters, and they are used as digital avatars
Speaker 1: for anyone who you know, spend a lot of time online.
Speaker 1: He bought one of those very very you know, cheap
Speaker 1: worth you know, a couple of hundred dollars, and the
Speaker 1: value of those crypto punks now is, you know, the
Speaker 1: cheapest one is around three hundred thousand dollars. And so
Speaker 1: after that, for him, it was, you know, off to
Speaker 1: the races. But Mike, I think about like traditional Wall
Speaker 1: to who are like you know, puffing and huffing and whatever,
Speaker 1: you know, to catch up with like this new wave
Speaker 1: of investing, they've got to be watching. I mean, I
Speaker 1: think about the Wall Street ros are like, wait, I
Speaker 1: don't get it, but I gotta get in. Yeah, absolutely,
Speaker 1: And there's been this evolution of thought. You know. Originally,
Speaker 1: I think most of Wall Street sort of rolled their
Speaker 1: eyes at the notion of crypto and thought it was
Speaker 1: a scam and thought Google. And he's the best example.
Speaker 1: You follow his comments through the years, and the next
Speaker 1: thing he's like, all right, well, if our clients want
Speaker 1: to trade it, will trade it, you know. And and
Speaker 1: Wall Street has sort of been pulled along by this movement.
Speaker 1: And to me, I think, you know, there's something to
Speaker 1: be said about knowing, being honest with yourself and knowing
Speaker 1: what you don't know about the future. And it's it's
Speaker 1: easy to roll your eye at something like a crypto
Speaker 1: punk or an f T, but when you start to
Speaker 1: think about what's possible in the n f T space.
Speaker 1: The one example I always give is this thing called
Speaker 1: z racing. And I this isn't in the story, but
Speaker 1: you know there are n f T s that are
Speaker 1: basically digital thoroughbred race horses, right, so you can raise
Speaker 1: them against each other, you can breathe them, there's prize money,
Speaker 1: you put up stakes, so you know, an n f
Speaker 1: T isn't just a jpeg of a funny picture. There's
Speaker 1: there's a lot that can be packaged into an R
Speaker 1: and I think where that's really going, that smart contract
Speaker 1: idea of it. So the crypto punks that the board apes,
Speaker 1: you know, I think they they're kind of the ground
Speaker 1: floor and people thinking, well, maybe this is sort of
Speaker 1: will be sort of the nostalgia of the future where
Speaker 1: people realize the value of n f T s and
Speaker 1: and you know, look back at these as sort of
Speaker 1: the collector's item of this beginning of this movement. Well,
Speaker 1: big thank you to Mr Lanna you got Fapulu. She's
Speaker 1: our personal finance reporter here at Bloomberg News. Also thanks
Speaker 1: to Bloomberg Market Senior editor Michael Reagan. They worked on
Speaker 1: this week's cover story, a finance section takeover. Check it
Speaker 1: out at Bloomberg dot com on the terminal and of
Speaker 1: course in Business Week magazine. Coming up next, which region
Speaker 1: of the globe will be the first to see business
Speaker 1: travel return and force. You're listening to Bloomberg Business Week,
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes. Tim Stenovik from Bloomberg Radio.
Speaker 1: Shares of hotels restaurants and leisure stocks. We know they
Speaker 1: have bounced around this year. Their volatility often dependent on
Speaker 1: the pandemic headlines at any given day. Tim Well, to
Speaker 1: give us a global snapshot of the travel and tourism industry,
Speaker 1: we turned to Julia Simpson. She's President and CEO of
Speaker 1: the World Travel and Tourism Council. It's a volunteer organization
Speaker 1: of business leaders and companies. It's actually chaired by someone
Speaker 1: who we've spoken to in the past, Carnival CEO Arnold Donald. Yeah,
Speaker 1: we have indeed now Julia she joined us from London,
Speaker 1: where the w TTC is based, just as we were
Speaker 1: beginning to digest the potential impact of the omicron variant
Speaker 1: on a sector, as we said, already ravaged by COVID.
Speaker 1: Probably while global GDP went down maybe about five point
Speaker 1: four percent in travel and tourism, we were hit by
Speaker 1: nearly fifty percent. So an industry that was worth nine
Speaker 1: trillion as globally was cut down to about four point
Speaker 1: six billion. That's last year. Now, we do a lot
Speaker 1: of researcher economic research with Oxford Economics, and we've been
Speaker 1: charting where this might go to. And I'm going to
Speaker 1: give you some usig again in a minute, but pre
Speaker 1: the latest strain of covid um, we were looking at
Speaker 1: getting back to maybe globally eighty five percent eighty percent
Speaker 1: recovery if there aren't further restrictions by the end of
Speaker 1: twenty twenty two. UM. In the US, actually the picture
Speaker 1: is looking a bit brighter UM. TIM. The the actual
Speaker 1: value of travel and tourism to the US pre the pandemic,
Speaker 1: taking twenty nineteen as a baseline, was about one point
Speaker 1: eight billion dollars. You took slightly less of a hit
Speaker 1: at around minds forty one in twenty that's mostly because
Speaker 1: of the strength of your domestic traveling to is a market,
Speaker 1: and so you sort of got fled down to about
Speaker 1: one point one billion dollars. Now, the good news is
Speaker 1: UM this year you're expected to grow slightly ahead of
Speaker 1: the global picture by about thirty six percent, So that's
Speaker 1: slightly better. And then if things were to continue and
Speaker 1: this I think there's big messages for governments here, but
Speaker 1: if things were to continue benignly or in the way
Speaker 1: we're seeing them now, you could get back to actually
Speaker 1: in a good time exceed your pre pandemic g d
Speaker 1: P well you do. That's the kind of numbers if
Speaker 1: you like, right, Julia, And you do think about the
Speaker 1: pent up demand because you know, people can't can't retake
Speaker 1: the trips that they missed during the pandemic, but they
Speaker 1: can certainly go out and take a talent trims once
Speaker 1: they feel confident about moving forward. You mentioned government. I mean,
Speaker 1: the w TTC works with governments to raise issues and
Speaker 1: some of the industry's concerns when it comes to travel.
Speaker 1: And these are what are or what is the top
Speaker 1: one or two concerns of the industry right now that
Speaker 1: you all are bringing to global government officials. Yeah, exactly,
Speaker 1: we've been raising the government's globally. First of all, a
Speaker 1: total lack of international coordination surrounding travel within the pandemic.
Speaker 1: You understand, when a pandemic hits the country, governments naturally
Speaker 1: look inwards. They're worried about their own citizens. This is
Speaker 1: completely natural and normal. But as we sort of look
Speaker 1: up above the parapet and reach hands across the ocean, again,
Speaker 1: the severe lack of international coordination in terms of, you know,
Speaker 1: what is accepted and what the rules are. So that's
Speaker 1: one problem. Another problem is we see these severe travel
Speaker 1: restrictions suddenly coming down. So I'll give you a really
Speaker 1: good example. When the new variant was identified in South Africa,
Speaker 1: a lot of countries immediately left to barring anybody from
Speaker 1: certain countries in the southern parts of Africa coming to
Speaker 1: Europe and coming to other parts of the world. But
Speaker 1: the irony is that the very own World Health Organization
Speaker 1: w h O as we call it, um they were saying, yeah,
Speaker 1: it was a variant of concern, but they said that
Speaker 1: closing Frances has absolutely no impact and they shouldn't be
Speaker 1: doing it, and the economic costs of livelihoods and people
Speaker 1: can actually far outstrip the impact of the pandemics. So
Speaker 1: lack of coordination, severe travel restrictions. And also obviously the
Speaker 1: golden the golden bullet he or the silver bullet is
Speaker 1: the vaccination levels. You know, sooner we can get the
Speaker 1: world vaccinated, can all get vaccinated? That is our greatest
Speaker 1: um uh, you know, prevention to this illness. So yeah,
Speaker 1: just in about a minute and a half, what is
Speaker 1: going on in Larding because we all were watching the
Speaker 1: UK Prime Minister Boris Johnson his press conference yesterday and
Speaker 1: covid takening of restrictions once again in the UK mandating masks,
Speaker 1: encouraging homeworking. Um, what are you hearing from your members
Speaker 1: of your community about that specifically and London specifically, because
Speaker 1: I know you're concerned about those those travel restrictions. Yes. Absolutely,
Speaker 1: the good news for travel and tourism is there haven't
Speaker 1: been any further restrictions are emanating from the UK government.
Speaker 1: So I think they've recognized what I was saying earlier
Speaker 1: that once variant of this of COVID is actually in
Speaker 1: your community, it's absolutely pointless trying to put in front.
Speaker 1: Is so good news for travel and tourism. No, no
Speaker 1: further restrictions there, which is great. Um. I think what
Speaker 1: they want to do is to try and restrict a
Speaker 1: little bit gatherings of people. And they're saying that you
Speaker 1: can go to work if you you have to be
Speaker 1: there in person, but if you can find an alternative
Speaker 1: and work from home. They're just saying for a period
Speaker 1: because as we know that the latest variants seems to
Speaker 1: be slightly more infectious and travel faster. Um, so they're
Speaker 1: just being cautious. I think it's more cautious and dramatic,
Speaker 1: if I'm completely honest, because life is still carrying on
Speaker 1: pretty normally. You know, I can get on the Metro,
Speaker 1: the underground, tubes and trains. Do people wear masks on
Speaker 1: the underground, you wear masks, So that's what you do
Speaker 1: on public, on any kind of transport, you wear a mark. Well,
Speaker 1: if you go into a shop, football stadiums, in fact,
Speaker 1: I'm going to see you. Well we call it soccer
Speaker 1: here my soccer. I'm going to a soccer matcher this
Speaker 1: weekend and I will be able to join you know
Speaker 1: a lot of tens of thousands of people, but I'd
Speaker 1: be wearing a mask, and I'm probably going to be
Speaker 1: for my COVID vaccination certificate. Julia. You before you had
Speaker 1: this role, you were at i A g Or International
Speaker 1: Airlines Group. It's the parent company of British Airways, Iberia
Speaker 1: air Linguists Welling. And it was just a few months
Speaker 1: ago that you that you left that company. And I
Speaker 1: want you to take us back to March when the
Speaker 1: world fell apart because of COVID, but also international travel
Speaker 1: in domestic travel just dried up. Take us back to
Speaker 1: what it was like to be at a large airline. Yeah,
Speaker 1: well it was. It was pretty horrific really to be
Speaker 1: honest with you, because we actually saw all business almost
Speaker 1: come to a stand still. And I think aviation is
Speaker 1: very adaptable and it's very good at dealing with crisis.
Speaker 1: I mean, it's obviously had the most tragic and horrendous
Speaker 1: crisis of nine eleven, but then you know, we've had
Speaker 1: financial crisis and we're really really resilient. And what I
Speaker 1: thought was great about I a G is, you know,
Speaker 1: we made sure that we had good, strong capital behind us.
Speaker 1: And I'm not, you know, up to date with all
Speaker 1: their numbers now, but I know that you know, when
Speaker 1: I was there, there was ten billions UK sterling in
Speaker 1: the bank, and we make sure that we were resilient
Speaker 1: with stand That was Julia Simpson, President and CEO of
Speaker 1: the World Travel and Tourism Council. Still at a Bloomberg
Speaker 1: Business Week and insane look at what happens when a
Speaker 1: hospital system is stretched beyond its limits. The ripple effects
Speaker 1: of an under vaccinated population in America's heartland are detailed. Next,
Speaker 1: this is Bloomberg broadcasting from the financial capital of the World,
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one O six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the Country Sirius XM Chado one
Speaker 1: nineteen and around the globe, the Bloomberg Business app and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week. Business
Speaker 1: Week has had many covers this year on a pandemic.
Speaker 1: It's been incredible to coverage now. A story that caught
Speaker 1: our attention this week was a Bloomberg big take. It
Speaker 1: was also one of our most read stories on the
Speaker 1: Bloomberg terminal throughout the week. It took us to Kentucky
Speaker 1: and that state's hospital system, illustrating how unvaccinated Americans are
Speaker 1: fueling the country's latest wave of COVID infections. Bloomberg News
Speaker 1: US Healthcare Senior editor Drew Armstrong tells us it's pushing
Speaker 1: some medical facilities past the brink. He visited three different
Speaker 1: ones across the Bluegrass state during the summer as it
Speaker 1: was coming off its biggest surge in cases, the Delta variant.
Speaker 1: He saw some really startling things. Drew joined us in
Speaker 1: studio to give us a sense of how bad it
Speaker 1: can get when areas with fewer healthcare resources and low
Speaker 1: inoculation rates get bombarded by the virus. What you see is,
Speaker 1: you know, first of all, they still have COVID patients
Speaker 1: who are in the hospital there. And and these people
Speaker 1: are very, very sick. I mean, you know, Um, they
Speaker 1: had a patient code, which means either they're harder the
Speaker 1: long stopped working. Um while I was there finishing open
Speaker 1: interview with one of the doctors, she went sprinting down
Speaker 1: the hall to take care of her patient. Um. You
Speaker 1: see these people and how ill they are. I mean,
Speaker 1: I you know, set outside a room, one of the
Speaker 1: isolation rooms, and watch demand on a high flow oxygen
Speaker 1: mask and he is, you know, gasping for breath into
Speaker 1: this thing. Um, you know, but he's taking these little
Speaker 1: gulps of air. And and there's no way other to
Speaker 1: say it is that it looks like this person is
Speaker 1: suffocating to death right in front of your eyes. And
Speaker 1: and that is what this disease does. And he saw
Speaker 1: patients on ventilators, patients on heartlong bypass Machi means it
Speaker 1: is really horrific. And then outside the hospital it's like
Speaker 1: nothing's ever happened. I got I have a million questions.
Speaker 1: First of all, it reminds us that, you know, we're
Speaker 1: far from being over this pandemic, right, and it still
Speaker 1: impacts these people largely in vaccinated people. Yeah, almost all
Speaker 1: of them are um. I mean, you know, it was
Speaker 1: interesting to talk to the caregivers in this case because
Speaker 1: they said the first wave that they dealt with pretty
Speaker 1: much everybody in the hospital old, frail, exactly the people
Speaker 1: you would think would be part hit virus. Yeah, this
Speaker 1: is over the win. This is the last winter about
Speaker 1: a year ago when when the whole yeah, exactly pre
Speaker 1: vaccine vulnerable population. This time around, they said, these are
Speaker 1: the young people thirties, forties, fifties, you know, type of
Speaker 1: relatively healthy people, typical Americans you'd see walking around there
Speaker 1: in the Walmart or the Kroger. And those were the
Speaker 1: people that were in the hospital this time. And because
Speaker 1: that's really who the unvaccinated are in Kentucky as well.
Speaker 1: I mean, you look at the vaccination rates. You have
Speaker 1: a county, let's say it as a vaccination rate, it's
Speaker 1: really a lie because that's almost all the older population.
Speaker 1: The younger groups are very very unvaccinated there. When I
Speaker 1: was reading this piece, drew one big takeaway from me
Speaker 1: was what happens to a health system when it is overwhelmed.
Speaker 1: You write about a policy that has only been invoked
Speaker 1: a few times at one of the hospitals where they
Speaker 1: essentially tell an incoming ambulance that, hey, we don't have
Speaker 1: any room here for your patient. You have to take
Speaker 1: this patient somewhere else. Talk a little bit about the
Speaker 1: toll this takes on healthcare workers that hold this takes
Speaker 1: on on hospitals, and how somebody who may have a
Speaker 1: heart attack, who may have a stroke, something completely unrelated
Speaker 1: to COVID might actually die as a result of a
Speaker 1: hospital being overwhelmed from COVID patients who potentially are't vaccinated. Yeah,
Speaker 1: just to set this up, I mean, I think it's
Speaker 1: important to remember that, you know, US healthcare and hospitals
Speaker 1: in particular, it's not like they have a ton of
Speaker 1: excess capacity. I mean, these are businesses, whether they're nonprofits
Speaker 1: or for profits, I mean, these are businesses. They run
Speaker 1: pretty lean, and we run an assumption that if we
Speaker 1: walk into a hospital, we're gonna be taking care and
Speaker 1: you typically will be I mean, you know, but they
Speaker 1: but they do that by kind of very carefully running
Speaker 1: it around, you know, eighty or nine percent capacity all
Speaker 1: the time. There is not a lot of extra room.
Speaker 1: The system is built for a disaster, but it's built
Speaker 1: for a disaster like a chemical plant explosion or a
Speaker 1: big crash on the interstate where it's you know, people
Speaker 1: come in, they get hurt, and they're out. And it's
Speaker 1: also built for patients who come in the hospital and
Speaker 1: then leave the hospital. And that's really critical because you know,
Speaker 1: a patient who get sick and comes into the su
Speaker 1: typically in there for you know, a few days. These
Speaker 1: COVID patients sit in these beds for weeks, and so
Speaker 1: you know, you have hospitals do have an option when
Speaker 1: things are getting really bad as to mention they go
Speaker 1: they do what's called going on divert sending a message
Speaker 1: to all the local ambulances. He don't come here, go
Speaker 1: to the hospital thirty minutes down the road, now, you know.
Speaker 1: And and that's a case where d e R is
Speaker 1: so backed up there saying we can't take anybody, gotta
Speaker 1: we gotta hit pause for a few hours. Now. What
Speaker 1: happens though, when your e R is overwhelmed with COVID patients,
Speaker 1: e er down the road is overul with COVID patients.
Speaker 1: They are down the road from that is overworld with
Speaker 1: COVID patients, because that's what happened there, and they went
Speaker 1: on you know, this is a hospital in London, Kentucky's
Speaker 1: about seventy five miles south of Lexington. They serve a
Speaker 1: lot of Appalachian counties, and they had gone on diverts
Speaker 1: the third or fourth time that they'd gone on divert
Speaker 1: in August. Before that, twenty years, they only got to
Speaker 1: divert twice. Once it was a bomb throughout the other
Speaker 1: time it's a tornado. And they were on DIVERT once
Speaker 1: again because they had thirty people backed up in the
Speaker 1: waiting room and they had another you know, twenty or
Speaker 1: thirty people in the yard waiting for beds upstairs who
Speaker 1: needed to be admitted. They went to divert and then
Speaker 1: they did it for two hours, and they looked around
Speaker 1: the rest of the region. They said, all the hospitals
Speaker 1: around us starting divert as well because they're overwhelmed with
Speaker 1: quote patients. That was Bloomberg News US Healthcare Senior editor
Speaker 1: Drew Arms draw some graphic details as America continues to
Speaker 1: deal with the latest rise in COVID cases. We're listening
Speaker 1: to Bloomberg Business Week coming up next, we turn our
Speaker 1: attention to a success story born out of the nation's
Speaker 1: ongoing health crisis and the pandemic fixes that made a
Speaker 1: beloved New York restaurant more profitable than ever. It's a
Speaker 1: tale of small business triumph. We'll get that on the
Speaker 1: other side. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik
Speaker 1: from Bloomberg Radio. It has not been easy running a
Speaker 1: restaurant during the pandemic. We know that, and yet one
Speaker 1: dining establishment on New York City's Lower East Side is
Speaker 1: not only surviving COVID, Tim, it's becoming more profitable than ever.
Speaker 1: Here with that story is Joshua Breustein Technology editor at
Speaker 1: a Business Week. He's got a feature in this week's
Speaker 1: issue of the magazine about the popular vegetable only eatery
Speaker 1: Dirt Candy. They're also very pleased to have the restaurant's
Speaker 1: owner and chef, Amanda Cohen with us as well. So Josh,
Speaker 1: let's get it off with you. How did you discover
Speaker 1: dirt Candy and why did you write this piece? I'm
Speaker 1: just curious about like the pitch to Joe Weber the
Speaker 1: technology or exactly well, I'm I'm a technology editor but
Speaker 1: also New Yorker, and I was really interested, as the
Speaker 1: pandemic looked like it was waning this spring, to see
Speaker 1: how restaurants would, after all they had been through, kind
Speaker 1: of get back on track. UM. I'm a vegetarian, so
Speaker 1: dirt Candy was very much on my radar screen. And
Speaker 1: I was also interested in talking to Amanda about UM
Speaker 1: about her experiences, because she's been out in the forefront
Speaker 1: talking about labor issues, UM in the industry, UM and
Speaker 1: kind of pushing the business model in various ways. And
Speaker 1: so I thought that, you know, she'd have some really
Speaker 1: interesting things to say about sort of reshaping a restaurant
Speaker 1: at this interesting time. And also I could you know,
Speaker 1: go there and get to eat some good foods. Say
Speaker 1: it was this really just about getting some really great meals.
Speaker 1: Let's bring amand in. I thought a good place to
Speaker 1: start would be, you know, when we first UM, when
Speaker 1: we first started talking, you you know, you were just
Speaker 1: coming out of what seemed to be, you know, one
Speaker 1: stage and into the next one. And over the last
Speaker 1: couple of months, it seems like UM thing has worked
Speaker 1: out maybe surprisingly well for you in certain ways, And
Speaker 1: I'm wondering if you could talk about just the factors
Speaker 1: that went into where you find yourself now and and
Speaker 1: how things ended up being maybe better than expected and
Speaker 1: also continue to be a challenge. Yeah. I mean, I
Speaker 1: had no idea that this is where I was gonna
Speaker 1: end up. Um, you know, I started, Uh, I don't know,
Speaker 1: part five my pandemic experience, with the idea that we
Speaker 1: had to change the restaurant. We weren't going to survive,
Speaker 1: and we were, we were surviving pre pandemics, but always
Speaker 1: on the edge. And I had sort of made a
Speaker 1: promise to myself and my staff that we were gonna
Speaker 1: start trying to figure out how to actually run the
Speaker 1: restaurant like a business and a passion project that was
Speaker 1: always petering on the edge. And uh, we changed how
Speaker 1: we paid our staff, we changed our pricing, we changed
Speaker 1: the culture of the restaurant, and in a huge surprise,
Speaker 1: I think that all of us we are still here
Speaker 1: and we are actually doing really well. It's the first
Speaker 1: time in my thirteen years of running this restaurant, but
Speaker 1: I actually feel like I'm running a business. The changes
Speaker 1: that you've made They're not the conventional ones that we
Speaker 1: see with a lot of restaurants that have survived and
Speaker 1: thrived during the pandemic. It's not like you went all
Speaker 1: in on delivery or you know, everyone's eating outside, right,
Speaker 1: these are these are changes that aren't conventional. I think
Speaker 1: we went against the wisdom and breathe their prices and um,
Speaker 1: we really sorted double down on changing how we involved
Speaker 1: our staff in the restaurant and how we paid them.
Speaker 1: And for a restaurant my size, we now offer health
Speaker 1: insurance and all kinds of extra funest benefits like extra
Speaker 1: sixt days and extra um holidays. And because of that,
Speaker 1: unlike most restaurants, we don't see this labor shortage in
Speaker 1: the restaurants that we aren't having a problem getting staff,
Speaker 1: and we're also not getting having a problem getting customers.
Speaker 1: Which is probably the biggest surprise of all is that
Speaker 1: customers have really embraced these changes. Well, that's interesting too,
Speaker 1: and I'm curious, like, what was the kind of feedback
Speaker 1: you were getting from your workers, from your customers, you know,
Speaker 1: in terms of helping you shape the way to move
Speaker 1: forward during this pandemic. Well, I think what we realized
Speaker 1: during the last year and a half eighteen months with that,
Speaker 1: customers actually liked us, but also they really wanted to
Speaker 1: support restaurants, and um, you know, the last year, everybody
Speaker 1: learns a lot more about restaurants. There were tons of
Speaker 1: articles and news pieces and um, you saw like sort
Speaker 1: of chefs and restaurant turns and the news constantly talk
Speaker 1: to me about what it meant to run a restaurant
Speaker 1: and how much it costs. And I think from what
Speaker 1: that fourth wall of restaurants got broken down a little, uh,
Speaker 1: and so customers were I think customers sort of for
Speaker 1: the first time, really wanted to spend their money somewhere
Speaker 1: where it can do it can make a difference, and
Speaker 1: it's not just about the food. But they were there
Speaker 1: to really support the people who worked in the restaurant
Speaker 1: and people who ran the restaurant. And great pandemic. We
Speaker 1: were often called overpriced. We're an expensive vegetarian restaurant, and
Speaker 1: now we're called expensive, And to me, that's this huge
Speaker 1: difference of how sort of guests are looking at us
Speaker 1: and they want to spend that money at our restaurant.
Speaker 1: We are busier than we have ever been. Amanda, you
Speaker 1: said that you haven't had trouble with the labor shortages
Speaker 1: we've heard about, um, you know throughout the restaurant industry
Speaker 1: and beyond. I was interested in when you said, you know,
Speaker 1: obviously you you laid off basically your entire staff at
Speaker 1: the beginning of the pandemic and then came back to
Speaker 1: all of them and said, you know, we're gonna offer
Speaker 1: you a lot more money. We're going to offer you
Speaker 1: the chance to find a health insurance um. But it
Speaker 1: wasn't actually them who came back to staff the restaurant, right, Like,
Speaker 1: basically your previous staff just kind of disappeared to the winds.
Speaker 1: Can you talk about that a little bit? So I
Speaker 1: was fortunate enough to keep my managers on, and if
Speaker 1: I hadn't been able to keep them on, I think
Speaker 1: we would have closed because I couldn't even really reopen
Speaker 1: this restaurant from scratch. Did everybody the twenty nine others
Speaker 1: who I laid off, they they did sort of decide
Speaker 1: to either leave the restaurant industry or a lot of
Speaker 1: them moved home. They were quite young. Um, we've always
Speaker 1: had a pretty young staff, and this time around we
Speaker 1: did hire again very young and almost three workers. But
Speaker 1: who were really interested in sort of working at a
Speaker 1: place so that didn't feel just like a job, that
Speaker 1: felt that they could contribute something more than just their
Speaker 1: labor too, And that is their voice and how we
Speaker 1: run the restaurant. Your experience. Is it changing? You're thinking
Speaker 1: about what really makes a profitable restaurant? Um, maybe for
Speaker 1: the future, do we have to kind of readjust are
Speaker 1: thinking about what works really in the restaurant industry. I
Speaker 1: think we do, and I think if restaurants are going
Speaker 1: to survive, UM, we all have to sort of start
Speaker 1: contributing a lot more to them. They can't be looked
Speaker 1: at it just these disposable places, um that are always
Speaker 1: going to be there, because we learned throughout the pandemic
Speaker 1: they're not. And it you know, so many restaurants closed,
Speaker 1: so many people lost their life savings with their restaurants.
Speaker 1: And the only way that this industry can go forward.
Speaker 1: And you know, pre pandemic, we talked about it as
Speaker 1: an industry certainly, you know, restaurants did, but it wasn't
Speaker 1: really It was very disjointed. And the pandemic really brought
Speaker 1: restaurant together. And I think everybody sort of read thinking
Speaker 1: what it means to run a restaurant, how to be
Speaker 1: more financially stable for everybody. And that's a two way
Speaker 1: conversation for maybe a three way conversation between you, your employees,
Speaker 1: and your customers, because customers have to buy into this
Speaker 1: idea that restaurants aren't disposable. They you can't. They have
Speaker 1: to start paying more for the ability to eat out
Speaker 1: in restaurants and on all restaurants. UM, I think there's like, uh,
Speaker 1: certainly like food desserts where restaurants should be cheap and uh,
Speaker 1: you should be able to always have access to food,
Speaker 1: but like a restaurant like mine, which I considered more
Speaker 1: of a luxury, uh, you have to be willing to
Speaker 1: pay for it. Even before the pandemic, you were doing
Speaker 1: supplemental work to make ends meet and because the restaurant
Speaker 1: wasn't actually doing that. And I'm wondering if even in
Speaker 1: the story he talks about you're you're working on a
Speaker 1: menu for for a college as as some consulting work.
Speaker 1: I'm wondering, if you envision moving forward with this new model,
Speaker 1: you can make dirt candy totally sustainable and you can
Speaker 1: drop that consulting work. Well, I could or why would
Speaker 1: I want to. I don't know. You sound busy, but yeah,
Speaker 1: I actually think that. UM, certainly, for the next couple
Speaker 1: of years, I don't have to put in any extra
Speaker 1: money to the restaurant. It is fully sustainable on its own.
Speaker 1: You know, pre pandemics, we were probably maybe if we
Speaker 1: were lucky, at like a one percent margin or zero
Speaker 1: percent profits, maybe sometimes negative profits. We always sort of
Speaker 1: had enough money in the bank and I was always
Speaker 1: able to put enough in to make sure that we
Speaker 1: were able to survive. But right now we're working in
Speaker 1: around five to seven percent in our profit margin, which
Speaker 1: is huge. It's such a difference. So you read your prices,
Speaker 1: but you also raised wages and there were other things
Speaker 1: that you managed to figure out that sort of tinkered
Speaker 1: with your formula and made you more profitable. UM. Can
Speaker 1: you talk a little bit more about those things, Amanda,
Speaker 1: and what other ways you were able to, you know,
Speaker 1: squeeze more out of out of the business. We started
Speaker 1: squeezing a lot more out of the business as as
Speaker 1: opposed to our employees. And the number one factor that
Speaker 1: I changed was our our food costs. So before the
Speaker 1: year and a half ago free pandemic, UM, we were
Speaker 1: probably hovering around, which actually in the restaurant industry isn't bad.
Speaker 1: And your costs were on food. Yeah, um, and now
Speaker 1: we're dying around, which is that that's where we're making
Speaker 1: our money. That's the huge savings every month, and out
Speaker 1: of that, I'm able to pay my staff so much
Speaker 1: more than i was beforehand. It's really great to hear
Speaker 1: what you say. Because we talk about being more sustainable,
Speaker 1: more efficient, you really have figured it out and as
Speaker 1: a result have become more profitable. What a great story.
Speaker 1: It's featured in this week's issue of Bloomberg Business Week magazine.
Speaker 1: Comes courtesy of technology editor slash food ficionado Joshua Boosting,
Speaker 1: and of course our thanks to uh the owner and
Speaker 1: chef of New York City restaurant Dirt Candy Amanda Cohen.
Speaker 1: Really great to have you both, Thanks so much. Hey,
Speaker 1: let's tell do it at the next restaurant next time. Exactly.
Speaker 1: I'm into cucumbers, tasty menu. Let's do it all right.
Speaker 1: That wraps up the first hour of the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser
Speaker 1: and I'm Tim Stanebeck. Ahead of our next hour. Raj
Speaker 1: Roger Ottenham received the longest prison sentence ever handed out
Speaker 1: for insider trading. Now he's a free man and he
Speaker 1: says prosecutor has got his case all wrong. We talked
Speaker 1: to the former head of Galleon Group and you do
Speaker 1: not want to miss the conversation. And also the CEO
Speaker 1: of online mental health care startups Cerebral, joining us on
Speaker 1: the heels of the company's latest funding round. It's now
Speaker 1: valued at almost five billion dollars plus. The federal government's
Speaker 1: efforts to counter Chinese espionage in America CAB not only
Speaker 1: produced a few convictions, they've also drawn complaints about racism
Speaker 1: and FBI misconduct. That story ahead. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week inside from the reporters and editors
Speaker 1: who bring you America's most trusted business magazine, plus global business,
Speaker 1: finance and tech news As it happened. Sloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. I am Carol Masser and I'm Tim stun
Speaker 1: Plennyhead in our second hour of the weekend edition of
Speaker 1: Bloomberg Business Week, including an in depth conversation with Raj
Speaker 1: Raj Rottenham. He's the former hedge fund titan who spent
Speaker 1: seven and a half years in prison for his role
Speaker 1: in a landmark insider trading scheme. Now he's here to
Speaker 1: tell his side of the story. Plus a conversation with
Speaker 1: the CEO of Cerebral, an online mental health start up
Speaker 1: with backing from soft Bank that's valued and nearly five
Speaker 1: billion dollars. First up this hour a story you'll find
Speaker 1: online at business Week dot com and of course, on
Speaker 1: the Bloomberg terminal. It's about a three year old Department
Speaker 1: of Justice program that's produced a few convictions lots of complaints,
Speaker 1: though about racism and FBI misconduct. Bloomberg News senior investigations
Speaker 1: writer Sheridan Prosso wrote the story on the dj so
Speaker 1: called China Initiative. She joined us along with business Week
Speaker 1: editor Joel Weber to explain why attempts to root out
Speaker 1: Chinese spies inside American corporations and research labs have often
Speaker 1: been futile. I looked at the indictments that had been
Speaker 1: announced or unsealed since the China INITIPI was launched, and
Speaker 1: this was a big sweeping effort. Uh, you know, the
Speaker 1: FBI got up, the FBI director got up, ahead of
Speaker 1: the Department of Justice got up. They all said, we
Speaker 1: this is a huge problem. China is stealing our state
Speaker 1: secrets and taking the back to China. We're going to
Speaker 1: root this out of America with a big sweeping effort
Speaker 1: to do so. Now, only about fifty fifty or so
Speaker 1: announcement indictments have been announced since then. Took to look
Speaker 1: closely at the cases. They've hardly found any spies at all.
Speaker 1: The largest number of cases, it's about thirty eight percent
Speaker 1: of the total, have been against professors, researchers, academics who
Speaker 1: do research in laboratories, who also, you know, may teach
Speaker 1: a class in China or go give some lectures there. Uh,
Speaker 1: they've been charged with fraud for not disclosing, not checking
Speaker 1: off a box that they have done that. And yet
Speaker 1: the disclosure violence, the disclosure rules are very unclear as
Speaker 1: to who they were supposed to disclose that too, and
Speaker 1: and and how and so. In the cases that have
Speaker 1: actually been charged of been virtually none of them has
Speaker 1: been charged with spying. There's only twenty of those cases
Speaker 1: that actually do allege any economic espionage of whatsoever. One
Speaker 1: of those professors is Franklin Tower. You profile in the piece,
Speaker 1: explain why you chose his story and what he's been
Speaker 1: charged with. So, Franklin Tower was the very first professor
Speaker 1: to be dieted under the initiative, and he is charged
Speaker 1: with fraud for failing to take off a box that
Speaker 1: says he had a conflict of interest. What he actually
Speaker 1: did do, according to his defense attorney, is that he
Speaker 1: was looking for a job in China and he was
Speaker 1: emailing back and forth with a university he's teaching at
Speaker 1: the University of Kansas, and he's, uh, he actually just
Speaker 1: was kind of, you know, exploring, gee, what what would
Speaker 1: be the possibility as if I went back to China. Now,
Speaker 1: according to his defense, he never signed any contract, he
Speaker 1: never actually did teach in China, and he decided not
Speaker 1: to take the job. He just, you know, resumed his
Speaker 1: teaching duties in Kansas. But when the FBI actually conducted
Speaker 1: a search of his emails, and that search, the defense
Speaker 1: attorneys tried to get ruled out because in fact it
Speaker 1: was they've charged that the FBI actually engaged in his
Speaker 1: conduct and actually doing a search of his emails because
Speaker 1: there was he was accused he got into a dispute
Speaker 1: with a co author over in a research paper, was
Speaker 1: accused by the co author of not giving proper credit
Speaker 1: and then the co author said, I'm going to report
Speaker 1: you as a spy to the FBI. She said about
Speaker 1: an email that was revealed in the court cases. And
Speaker 1: so as a result of that, the FBI got a warrant,
Speaker 1: found that the that the professor had had this correspondence
Speaker 1: with the university back in China, and now he's being
Speaker 1: charged with a felony fraud, which carries a sentence of
Speaker 1: twenty years in prison. So you you mentioned of fraud
Speaker 1: there um and in general almost uh none of these
Speaker 1: individuals have been accused of spying, but there have been
Speaker 1: cases of academic researchers and professors just failing to disclose
Speaker 1: their affiliations. So so walk us through. You know what,
Speaker 1: how the Department of Justice is actually dealt with what
Speaker 1: they what they've actually found for the first place, to
Speaker 1: go to trial of all of these cases against researchers,
Speaker 1: there was there were six cases dropped in uh In
Speaker 1: over the summertime. A number of the case is just
Speaker 1: simply haven't held up when they've gone to court. The
Speaker 1: very first one that did go to court in June,
Speaker 1: that was a professor at the University of Tennessee in Knoxville.
Speaker 1: He actually was the first trial ended in a mistrial.
Speaker 1: The Deparmanent of Justice decided to rebring the case, and
Speaker 1: then the judge actually didn't even let that go to
Speaker 1: a jury. He just issued a directed verdict in September
Speaker 1: that basically said, look, this guy didn't do anything wrong.
Speaker 1: There's no evidence of fraud here. He was supposed to
Speaker 1: have disclosed if he made more than ten thousand dollars
Speaker 1: in outside lecturing from universities in China, which he had
Speaker 1: done over a summer when he wasn't teaching the He
Speaker 1: actually earned only three thousand dollars, and yet he was
Speaker 1: charged anyway. So that case actually was the judge issued
Speaker 1: a rebuke essentially to the prosecutor's end to the FBI
Speaker 1: that there wasn't enough evidence here to to charge this
Speaker 1: person with fraud whatsoever. And virtually half of the cases
Speaker 1: that have been brought against these researchers have been dropped,
Speaker 1: so they're just really not standing up in court. We have.
Speaker 1: The latest case actually to go to trial is that
Speaker 1: of Charles Leeward at Harvard University. His trial started yesterday
Speaker 1: and that is going to be ongoing in the coming weeks.
Speaker 1: It's going to be very interesting to see what happens
Speaker 1: in that case. He's accused of lying to Harvard University
Speaker 1: about some teaching and research that he was doing at
Speaker 1: a university back in China. That was Bloomberg New Senior
Speaker 1: Investigations writer shared in Prosso along with Business We Get
Speaker 1: It or Joel Webber. Sherry's story can be found on
Speaker 1: the Bloomberg terminal and online at business week dot com.
Speaker 1: You're listening to Bloomberg business Week. Coming up, a mental
Speaker 1: health services startup is now worth nearly five billion dollars
Speaker 1: thanks to the latest funding round led by soft Bank
Speaker 1: Vision Fund. Too, we'll talk with Cerebral's founder and CEO,
Speaker 1: Kyle Robertson and later convicted insider trader Raj ros Rottenham
Speaker 1: defends the actions that sent him to prison. We have
Speaker 1: a conversation with him just ahead. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Bloomberg Quick
Speaker 1: Takes Tim Stenovan from Bloomberg Radio. Early this month, Bloomberg
Speaker 1: Senior reporter Jillian Tan brought us a story about Cerebral.
Speaker 1: It's a startup that provides mental health services all online.
Speaker 1: The company said its valuation roughly quadruple to four point
Speaker 1: eight billion dollars after raising three million dollars in an
Speaker 1: equity funding round led by soft Bank Vision Fund Too. Yeah,
Speaker 1: that'll get your attention. We caught up a Cerebral founder
Speaker 1: and CEO, Kyle Robertson. He says the goal is to
Speaker 1: make Cerebral and in network provider with every health plan
Speaker 1: in all fifty states. He's already lined up a bunch
Speaker 1: of partnerships and also to become a one stop shop
Speaker 1: for mental healthcare across the globe. I think the historical
Speaker 1: stigma around access to high quality mental health care has
Speaker 1: been really problematic. Right, Um, you have millions, really tens
Speaker 1: of millions of Americans who historically have suffered from mental
Speaker 1: health challenges and the vast majority of them haven't and
Speaker 1: the help that they deserved and need it right, And
Speaker 1: I think that the pandemic, coupled with a cultural shift
Speaker 1: and recognition that anyone can face mental health challenges and
Speaker 1: there shouldn't be a stigma around it, has been really powerful,
Speaker 1: and so I think you know Naomi Osaka, the famous
Speaker 1: tennis players, while Simone Biles is now our chief impact officer.
Speaker 1: It's a rebrawl UM coming out and saying, hey, you know,
Speaker 1: I'm not okay, right, I can't continue doing this. And
Speaker 1: and seeing public figures like that say hey, it's okay
Speaker 1: to not be okay and it's okay to get the
Speaker 1: help you deserve and need has been really really powerful
Speaker 1: UM from a de sigmatization perspective, and that's really a
Speaker 1: big part of our mission. It's a rebrawl. It's destigmatizing
Speaker 1: access to high quality mental health care so that everyone
Speaker 1: will get the care they deserve a need. So we're
Speaker 1: really excited. Go ahead. No, And what I was curious about, So, Kyle,
Speaker 1: what's your approach? I mean, we all know kind of
Speaker 1: the traditional pro to guests to getting UM mental mental care,
Speaker 1: mental healthcare. What's your approach specifically? How is it different? Yes?
Speaker 1: I think for us, it's really about building the one
Speaker 1: stop shop for high quality mental healthcare. So whether you
Speaker 1: need you know, wellness, meditation, clinical care, whether that be
Speaker 1: medication management, therapy, counseling, being able to access that from
Speaker 1: home right via telemedicine is really what Cerebral is fundamentally
Speaker 1: about an unlocking supply of clinicians and lock stuff with
Speaker 1: demands such that we can take way times from traditional
Speaker 1: way times up two three months to quite literally minutes. Right.
Speaker 1: So we have something called instant live visits where we're
Speaker 1: able to know exactly how many clinicians we need at
Speaker 1: a given time, with what licenses, with what specialization, such
Speaker 1: that a client or consumer of behavioral healthcare can come
Speaker 1: on too Cerebral sign up and actually be seen by
Speaker 1: a licensed clinician within fifteen minutes. What are the guardrails
Speaker 1: that are up because if if you're talking about prescribe
Speaker 1: medication as well, UM, what are the ways that you
Speaker 1: know you avoid abuse? Yeah? I think I think one
Speaker 1: important thing to think about, right is the distinction between
Speaker 1: telemedicine and in person care, right. And I think historically
Speaker 1: there has been a bias against telemedicine despite the fact
Speaker 1: that all of the clinical research supports that telemedicine outcomes
Speaker 1: are equal are actually better UM and our chief medical officer,
Speaker 1: Dr David Moe Harvard Tain Psychiatrists actually recently published a
Speaker 1: white paper highlighting our outcomes and highlighting the fact that
Speaker 1: you know outcomes as measured by symptom based rating scales
Speaker 1: like the PHQ, the Gods, the I s I are
Speaker 1: actually equal or better with telemedicine. UM. There absolutely need
Speaker 1: to be guard rails in place, and there absolutely are
Speaker 1: for Cerebroll and other telemedicine organizations. But I think it's
Speaker 1: important this recognition supported by clinical research that telemedicine actually
Speaker 1: leads to equal or better outcomes. The most importantly that
Speaker 1: are access to care. Jillian's story has this great picture
Speaker 1: of you there with Simone Biles, Olympic gymnast, incredible UM
Speaker 1: athlete who walked away from the Olympics putting her mental
Speaker 1: health above her crust for gold. Uh. It really stood
Speaker 1: out and she you know, I think it created and
Speaker 1: sparked a lot of conversations. I know, certainly for us
Speaker 1: in our newsroom, talk us about the interactions and conversations
Speaker 1: you've had with her and understanding maybe as somebody who's
Speaker 1: running a company, but really understanding you know, what's involved
Speaker 1: and what's needed really by those who are trying to
Speaker 1: improve their mental well being. Absolutely, you know, I think
Speaker 1: I think Simone's voice when in Tokyo she said I'm
Speaker 1: going to stop here right, my mental health is more
Speaker 1: important than gold medals. It was really powerful, right, It
Speaker 1: was really powerful for a lot of people, myself included
Speaker 1: as the CEO of a mental health company. Right. I
Speaker 1: actually was sitting in a hospital bed this summer, um
Speaker 1: because I was suffering from a mersa pneumonia infection when
Speaker 1: I was watching the Olympics, and my mental health was suffering. Right,
Speaker 1: Being locked up in a hospital bed, right, not knowing
Speaker 1: what was going to happen. And seeing her say, right, um,
Speaker 1: my mental health is more important here and I'm going
Speaker 1: to stop was so powerful for me. And I think
Speaker 1: when I saw that, and when our organization saw that,
Speaker 1: we knew we had to partner with Simone, Right. We
Speaker 1: knew we had to partner with Simone to tell the
Speaker 1: world that taking care of your mental health is more
Speaker 1: important than anything, right, and that it needs to be prioritized,
Speaker 1: it needs to be distigmatized, and people need to get
Speaker 1: access to the care they deserve. And me, and that's
Speaker 1: what our organization is all about. That's what's the Rude
Speaker 1: role is about. Um. So we're we're really excited to
Speaker 1: be partnered with Simone as our Chief Impact Officer. And
Speaker 1: you know, even though we've only been working with her
Speaker 1: for a few months, she's had an incredible impact. So
Speaker 1: curious about the relationships that you have with clinicians, with
Speaker 1: with providers, and how you're able to treat people in
Speaker 1: different parts of the country because there are there is
Speaker 1: this patchwork of rules and regulations. I mean, correct me
Speaker 1: if I'm wrong. Doctor has to be licensed in a
Speaker 1: certain state? Correct, that's right. Yes, so there are licensing requirements,
Speaker 1: but one of the benefits of telemedicine is that particularly
Speaker 1: in rural areas where there's not a lot of access
Speaker 1: to high quality mental health care. Right. A small town
Speaker 1: in Appalachia may not even have a psychiatrist, right, Um,
Speaker 1: so we can get folks connected to the right level
Speaker 1: of care for them. Does the clinician need a state license?
Speaker 1: Generally the answer to that is yes. However, our clinicians
Speaker 1: are largely cross licensed across multiple states, so they may
Speaker 1: not have to sit in the same state that the
Speaker 1: patient that they're providing care to is sitting in, right,
Speaker 1: but they do have to be licensed. That said, there
Speaker 1: isn't a movement today towards universal license ar right, you know,
Speaker 1: we believe that it is a positive movement and that
Speaker 1: it would be good for society right because it is
Speaker 1: a lot more efficient um and there's no reason that
Speaker 1: with the proliferization of telemedicine that a clinician who's licensed
Speaker 1: in California but not licensed in New York or Georgia
Speaker 1: shouldn't be able to provide care to a patient there, right,
Speaker 1: So it's definitely something we believe in, but we do
Speaker 1: take advantage of licensing clinicians up in states that they're
Speaker 1: not physically nonstiled it. That's Kyle Robertson. He's the founder
Speaker 1: and CEO of the online mental healthcare platform Cerebral. Still
Speaker 1: to comme on Bloomberg Business Week. A group that can
Speaker 1: get overlooked when it comes to gaining access to healthcare
Speaker 1: and other services. We're talking about the nation's homeless. Our
Speaker 1: next guest is the driving force behind an organization that
Speaker 1: seeks to help those in need with basic hygiene, and
Speaker 1: the story behind the organization is one you've got to hear.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the World,
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one does San Francisco,
Speaker 1: Bloomberg nine sixty to the country, Sirius XM Chado one
Speaker 1: nineteen and around the globe of Bloomberg Business app and
Speaker 1: Bloomberg Radio dot com. This is Bloomberg Business Week. Late
Speaker 1: last month, we talked with Ali Goldstein, Laureal Paris USA President,
Speaker 1: about the company's Women of Worth program. It highlights women
Speaker 1: who are agents of change and addressing some of our
Speaker 1: most pressing social issues, sometimes because it's something they experienced firsthand. Yeah,
Speaker 1: we were lucky enough to have one of those women
Speaker 1: join us in studio as part of our Bloomberg Business
Speaker 1: Week radio and YouTube simulcast Women of Worth. Honorie Brianna Daniel.
Speaker 1: She's the founder of the Street Team movement, so tim
Speaker 1: It's a nonprofit. It provides free items related to personal hygiene,
Speaker 1: so we're talking about things like soap and laundry detergent.
Speaker 1: This goes to homeless people and it all happens using
Speaker 1: vending machines. Brianna actually decided to take action after voluntarily
Speaker 1: living on the streets of Orlando for more than a month.
Speaker 1: She did this quite a few years ago, and she
Speaker 1: did this with the idea to to better understand what
Speaker 1: homeless people experience each and every day. Consistent programming was
Speaker 1: something that was needed, specifically for hygiene. There was no
Speaker 1: one that was out there providing laundry services. We didn't
Speaker 1: have consistent access to showers. There was something that was
Speaker 1: there was a gap. So Street Team Movement ultimately did
Speaker 1: become a gap filler because we saw a need and
Speaker 1: we went in there just dominated Brianna. I always think
Speaker 1: people people often think, well, the solution is put people
Speaker 1: in shelters or have them to shelters, and that that's
Speaker 1: how they do. But there's a lot of people who
Speaker 1: don't because a lot of times shelters aren't a great
Speaker 1: place to be. They're they're not a great place to be,
Speaker 1: especially for a homeless woman with children. There are oftentimes
Speaker 1: people with criminal records in there. There's oftentimes people that
Speaker 1: are their their pedophiles in there, and it's it's tough
Speaker 1: um first being in the situation of being homeless, but
Speaker 1: also trying to protect your family, trying to protect the
Speaker 1: innocence of your kids. So oftentimes you know you're you're
Speaker 1: uh lad to make tough choices when you're out on
Speaker 1: the street's, especially as a woman talk a little bit
Speaker 1: about the Women of Worth and being an honor ee
Speaker 1: there because, as Carol mentioned, when we did speak to
Speaker 1: the folks from Loreal just a couple of weeks ago,
Speaker 1: we learned about this amazing network of people who come
Speaker 1: together and you know, in the more than fifteen years
Speaker 1: that the that Loreal has been doing this, it sort
Speaker 1: of turns into this idea of staying in touch with
Speaker 1: this this amazing group of women and people all over
Speaker 1: the country who create this network. Absolutely and you use
Speaker 1: the correct word to it's it's the network. It's it's
Speaker 1: absolutely amazing, over a hundred and sixty women strong. So
Speaker 1: to be a part of this fantastic uh, not just
Speaker 1: the Woman of Worth organization, but just the Loreal Paris
Speaker 1: previous honorees and really just being able to connect with them,
Speaker 1: seeing what they have taken away from the program and
Speaker 1: what they're doing, it's just, honestly, it's is such an
Speaker 1: honor all right. I want to take you back though,
Speaker 1: I tell me about you know, you said you've lived
Speaker 1: alongside Florida's homeless population for more than a month. How
Speaker 1: do you do something like that and and and how
Speaker 1: do you do that without being offensive or it's uncomfortable
Speaker 1: for people who are are living on the street, Like,
Speaker 1: how do you do that? Tell me about that? So, honestly, Carol,
Speaker 1: it's it was more so I was young. So at
Speaker 1: the time, I was twenty years old when this happened,
Speaker 1: and our homeless friends just wrote me off. I thought
Speaker 1: it was a teenage runaway. So I just I kept
Speaker 1: to myself a lot of times. I asked a lot
Speaker 1: of questions, but more so came from a place of
Speaker 1: just ignorance. I didn't know what I didn't know, and
Speaker 1: there were people that were willing to come alongside me
Speaker 1: and help me. Let me know what time of certain
Speaker 1: organizations are coming out and they're providing food, or what
Speaker 1: shelters are providing showers, what days is happening. Uh, when
Speaker 1: is someone doing haircuts or anything? You know. So they
Speaker 1: really were able to come in and and let me
Speaker 1: know the ropes, so to say. While I was out there,
Speaker 1: and it was it was incredibly scary, especially being a
Speaker 1: single woman on the streets, just because you were there
Speaker 1: at night. Yes, that first I didn't sleep. I want
Speaker 1: to say the first two and a half days I
Speaker 1: didn't sleep until I found a place to actually sleep.
Speaker 1: So it was really great in theory until it gets
Speaker 1: dark and downtown is completely deserted and it's it's just
Speaker 1: you standing there with a backpack and no plan, and
Speaker 1: that's what it becomes completely real to you that you
Speaker 1: have some you have some choices to make, and thankfully
Speaker 1: ended up finding a really safe place to sleep during
Speaker 1: the rest of the time that I was out there.
Speaker 1: But it was it was incredibly, incredibly scary. What did
Speaker 1: you learn about? Look, this is a crisis happening throughout
Speaker 1: our country. What are some policies, What are some messages
Speaker 1: for policymakers about understanding homeless, the homeless population, and how
Speaker 1: we can actually combat it. Yeah, that's a really great question.
Speaker 1: And that was actually one of the biggest struggles for
Speaker 1: us our first year's UM What Street Team Movement, inc.
Speaker 1: And it was speaking to our policymakers and letting them
Speaker 1: know that what we provide as hygiene, it's not a luxury,
Speaker 1: it is a necessity. And I remember standing in a
Speaker 1: council's amazing that you even have to say that, right,
Speaker 1: it was it was so insane and I and I said, okay,
Speaker 1: show of hands, who showered today? And every hand went
Speaker 1: up and I said, stop showering. If it's such a luxury,
Speaker 1: just stop doing it. You can't because you know you
Speaker 1: need to do it. You know you have to brush
Speaker 1: your teeth. You know there's things that you need to
Speaker 1: have access to. And it's not just a health issue,
Speaker 1: it's not just a health crisis. It's confidence, it's self worth.
Speaker 1: That's Brianna Daniel. She's the founder of Street Team Movement.
Speaker 1: Also a loreal Paris USA Women of Worth honoree for
Speaker 1: really loved that program. You're listening to Bloomberg Business Week.
Speaker 1: Coming up, the man who prosecutors say was in the
Speaker 1: middle of the largest hedge fund insider trading ring in
Speaker 1: US history. He wants to set the record straight. Raj Rogeratum,
Speaker 1: the former CEO and co founder of the Galleon Group,
Speaker 1: tells us what he thinks the SEC got wrong and
Speaker 1: how he survived behind bars. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: Takes Tim Stinovich from Bloomberg Radio. Roj Roger Rottenham was
Speaker 1: the co founder of the technology hedge fund Galleon Group,
Speaker 1: which at one time managed more than seven billion dollars.
Speaker 1: He was really, you know, near the top of his world,
Speaker 1: really though until he wasn't. I mean, think back to
Speaker 1: a few years ago. You remember the headlines. He was
Speaker 1: arrested in charge with insider trading back in October of
Speaker 1: two thousand nine. Later, he was found guilty of fourteen
Speaker 1: counts stemming from a seven year plot to trade on
Speaker 1: inside information from corporate executives, bankers, consultants, traders, and others.
Speaker 1: And then he did jail time. He served seven and
Speaker 1: a half years of an eleven year prison sentence for
Speaker 1: his role in what prosecutors say was one of America's
Speaker 1: largest ever hedge fund insider trading rings. Roger Rottenham was
Speaker 1: released in twenty nineteen. He's now out with a book
Speaker 1: that details his experience and what he says authorities got
Speaker 1: wrong in the case. It's called uneven Justice. Plot to
Speaker 1: sink Galllean Rods joined us at our Bloomberg interacted Broker's studio.
Speaker 1: He began by recounting the day he was first taken
Speaker 1: into custody. It was on his son's thirteen birthday. If
Speaker 1: you had asked me that morning, one of the hundred
Speaker 1: things you worry about inside the trading was not one
Speaker 1: of them. If you had asked me the FBI guys
Speaker 1: doing a good job, but the prosecutors are doing a job,
Speaker 1: good job, I would have said yes. I didn't know
Speaker 1: anybody who went to prison, nor did I know anybody
Speaker 1: who knew anybody who went to prison. So when I
Speaker 1: got that knock on the door at approximately six or
Speaker 1: seven o'clock, kids, kids in the house, I opened it
Speaker 1: and I saw this sea of blue um jackets with
Speaker 1: the FBI with guns drawn, and they said are you
Speaker 1: Raj Rader Ratnam And I said yes, and they said
Speaker 1: you're on the rest. I said what for? And they said,
Speaker 1: we can't tell you, and then started the first in
Speaker 1: a series of misconduct. They told me that I couldn't
Speaker 1: I won't see my son for twenty five years. They said,
Speaker 1: take a good look at your wife. She looks happy
Speaker 1: because she can spend all the money, and then handcuffed
Speaker 1: me and took me down in their car to the
Speaker 1: FBI offices. We were talking when you came in, Raj,
Speaker 1: about when you actually had time to write this book,
Speaker 1: and you said you wrote some of that and you
Speaker 1: wrote it when when you were in prison? What what?
Speaker 1: What was it like, you know, I wrote of the
Speaker 1: book by hand in prison, and as I told you,
Speaker 1: I have tremendous respect for Shakespeare and authors of that
Speaker 1: generation because you couldn't move paragraphs around, you couldn't do
Speaker 1: spell checks, you know. But when it's a project that
Speaker 1: you're passionate about, uh, it's easy. I started writing one
Speaker 1: hour a day, then two hours and three hours, and
Speaker 1: I was exhausted after four hours. It's it's most authors
Speaker 1: will say that, I have to say, just picking back
Speaker 1: on what Tim asked, one of the things that as
Speaker 1: our newsroom knows that you were coming in to talk
Speaker 1: with us, one of the questions that so many people
Speaker 1: ask me is that, you know, ask him, what was
Speaker 1: jail like? Jail was? I would say, if I had
Speaker 1: to say it in one with spartan, um, you know
Speaker 1: I went to boarding he mistreated at all, Well not really,
Speaker 1: but you know I went to boarding school in a
Speaker 1: different country, foreign country, at the age of eleven, and
Speaker 1: that life was spartan. But you get used to it. Now.
Speaker 1: You have to be smart because in jail, like in
Speaker 1: the jungles of Africa, there are predators that tried to
Speaker 1: prey on you, try to get money from you, and
Speaker 1: you have to stand your ground and you know, give
Speaker 1: the impression that you're not going to be bullied. Did
Speaker 1: you ever run into um Rah Grypta because he he
Speaker 1: was the former government sex director. He was convicted of
Speaker 1: insider trading, of passing illegal tips to you. He went
Speaker 1: to that same Massachusetts prison. Did you run into him?
Speaker 1: Did you guys have conversations? You know, we had breakfast
Speaker 1: every day. Did we played scrabble? We played bridge? So
Speaker 1: I wonder as you look back at what happened, how
Speaker 1: it evolved, would you have done anything differently in terms
Speaker 1: of how you ran your fund um and how you
Speaker 1: ran things there? No, caroll I, I don't regret anything.
Speaker 1: Let me just explain. The SEC interviewed twenty four Galleon analysts,
Speaker 1: and all of them said, we didn't see anything that's wrong.
Speaker 1: When you run a company with hundred and eighty people,
Speaker 1: somebody would see something if you did something wrong. I
Speaker 1: think what happened was the law enforcement people did not
Speaker 1: understand the hedge fund industry or the investment industry. What
Speaker 1: we do all day long is talk about stocks. I
Speaker 1: had thirty five analysts, really highly educated, highly skilled, that
Speaker 1: we were spending a forty million dollars a year. That
Speaker 1: was the a drock of my analysis and my trading.
Speaker 1: Now you might ask me why do you talk to
Speaker 1: other people. You talk to other people because you want
Speaker 1: to know what's in the market, What are people chatting about?
Speaker 1: And is your view different from that of my trades
Speaker 1: that they alleged. We had an existing pre positions before
Speaker 1: the alleged trip. At that time, the U S Attorney,
Speaker 1: Mr pret Barara came up with his own theory of
Speaker 1: what insided trading should be or that even he prosecuted.
Speaker 1: Five years after my conviction, the second Circuit firmly rejected
Speaker 1: his theory, saying that the person who did the trade
Speaker 1: or the tip should have known the tipper should have
Speaker 1: known that the tipper was violating a fiduciary responsibility and
Speaker 1: should have given a benefit. Soon after that, we've had
Speaker 1: a very few inside a trading cases. Rush. Might be
Speaker 1: some listening right now and just asking the question why
Speaker 1: why we are interviewing you? You do, of course I
Speaker 1: have a book out, But what would you say to
Speaker 1: somebody who says, you know, even after these convictions, why
Speaker 1: why should people listen to you? Okay, let me just
Speaker 1: take a step back, and then I'll answer your question.
Speaker 1: Number One, all proceeds of the book are going to charity,
Speaker 1: so I'm not trying to get richer. I'm not getting
Speaker 1: rich out of it. Number two, this is not about
Speaker 1: rach Rach Ratnam. This is about a bigger issue. It's
Speaker 1: social justice. And I had a front row seat. I was.
Speaker 1: They came into my apartment early in the morning. They
Speaker 1: arrested me. I went to trial. You know that of
Speaker 1: the people who are alleged plea bargain, I knew there
Speaker 1: was a trial penalty, which is too exces sentence when
Speaker 1: you if you, if you pre bargain, and I spend
Speaker 1: time in prison. Right. The reason I'm writing this book
Speaker 1: is to begin to discus on the biggest social justice issue.
Speaker 1: Number One, the FBI lied in the affricat to get
Speaker 1: a white tap on me, right, and the judge allowed it.
Speaker 1: The FBI lied and the judge allowed it. Every single
Speaker 1: American should be concerned, You, Tim and Cattle, you should
Speaker 1: be concerned that the FBI can lie and listen on
Speaker 1: to you. The second point is there are no checks
Speaker 1: and balances for law enforcement with its prosecutors or FBI agents.
Speaker 1: I want to jump in because hence this really explains
Speaker 1: and you go into it all of this in your
Speaker 1: book on even justice, hence the title UM. And I
Speaker 1: think we could probably go for hours, and I think
Speaker 1: it's productive that we do UM, certainly as journalists and
Speaker 1: just as society, to look into measures in terms of
Speaker 1: how law enforcement operates. We certainly had a lot of
Speaker 1: conversations coming off of George Floyd over the last couple
Speaker 1: of years and just others, case after case on Wall
Speaker 1: Street or elsewhere. I guess the point is bottom line.
Speaker 1: You know, many would argue that the case against you
Speaker 1: was solid. Uh, we've seen another to go to jail
Speaker 1: right as a result connected with it. We think about
Speaker 1: a nil kumar um and I'm just wondering, I mean,
Speaker 1: do you argue in the end that you were innocent,
Speaker 1: that you that there wasn't something, There wasn't insider trading,
Speaker 1: there wasn't information that was going on, or are you
Speaker 1: concerned about the process good or bad. But that got
Speaker 1: to a case that many said was very solid against you,
Speaker 1: and you were convicted, and you tried to appeal it
Speaker 1: and it it still was undone. It was a great
Speaker 1: questions and let me answer right. As an American, I
Speaker 1: accept the jury's verdict. Number Two. Three years later, in
Speaker 1: a case against a co conspirator of mine, with the
Speaker 1: same stocks, the same district, southern district, the same cooperating witnesses,
Speaker 1: a jury found that person innocent. A different jury M
Speaker 1: I'm sure you're gonna ask me why. That's because Alma,
Speaker 1: the government's chief witnessed, totally recanted on his testimony and
Speaker 1: said I didn't give large any information that was useful,
Speaker 1: and that's in the court documents. Five years later, as
Speaker 1: I said, the second circuit reversed pre Barara's position, and
Speaker 1: one last point, Mr Barrara himself in assembled the task
Speaker 1: force with some of the same judges in my case
Speaker 1: and some prosecutors, and the conclusion was the loss of
Speaker 1: Monkey and this tremendous confusion of the market participants. Now,
Speaker 1: as a market participant, I welcome rules. I want the
Speaker 1: rules to be followed not only by the market participants,
Speaker 1: but the authorities. Do you feel like regulators, you know,
Speaker 1: don't really have enough information, don't really understand the way
Speaker 1: markets work. Are they just getting so complicated and intricate
Speaker 1: that it is tough to regulate? Well, I think I
Speaker 1: can already talk about case. I don't think they understood
Speaker 1: the rules and the life of an investor. Number two
Speaker 1: in the enthusiasm to bring a lot of cases, because
Speaker 1: remember this was in the aftermarket of the financial crisis,
Speaker 1: correct and made off and all of that. They wanted
Speaker 1: somebody that because the public was crying for blood. They
Speaker 1: didn't go after any of the big banks criminally, although
Speaker 1: they tried. Many would argue that the prosecute you prosecutors
Speaker 1: were looking certainly into the big banks, they didn't look
Speaker 1: hard enough. That was Raj Raj Rodam, the former CEO
Speaker 1: and co founder of the Galleon Group. His new book,
Speaker 1: Uneven Justice, The Plot to Saint Galllean is out now,
Speaker 1: really working on getting his side out there, but also
Speaker 1: interesting to hear that, yeah he's an investor, he's uh
Speaker 1: and in crypto too, Yeah exactly. All right. That wraps
Speaker 1: up the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thanks so much for joining us. I'm Carol Masser and
Speaker 1: I'm Tim Stanovik. Be sure to tune into Bloomberg Business
Speaker 1: Week Monday through Friday. It starts at two pm Wall
Speaker 1: Street Time on Bloomberg Radio. You can also watch our
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Speaker 1: Have a great weekend. Stay safe everyone. This is Bloomberg