WEBVTT - Powell Signals Downshift Likely Next Month 0:00:01.840 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.320 --> 0:00:09.800 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all furnishing the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.640 analyst in more than one and twenty countries. You can 0:00:19.680 --> 0:00:23.239 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.440 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:31.680 YouTube and now also on Bloomberg Quick Take. All right, 0:00:31.760 --> 0:00:33.360 we've got our team back in New York. We're in 0:00:33.400 --> 0:00:35.280 San Francisco. Now we're going to head Tare Bureau in 0:00:35.320 --> 0:00:37.720 Atlanta because we've got one of the smart voices when 0:00:37.720 --> 0:00:40.960 it comes to J. Powell and the Federal Reserve. J K. J. Powell's, 0:00:41.000 --> 0:00:44.440 you know, speaking at Brookings taking questions. So let's bring 0:00:44.479 --> 0:00:47.760 in Bloomberg News Economic reporters Steve Matthews. He is in 0:00:47.880 --> 0:00:50.720 our Atlanta bureau, So Steve, good to have you here. 0:00:51.120 --> 0:00:54.840 Let's talk about J. Powell. What was the most important 0:00:55.040 --> 0:00:57.560 thing he said today, whether it was in his speech 0:00:57.880 --> 0:01:00.520 or in his Q and A, Well, I think the 0:01:01.440 --> 0:01:03.720 a couple of things. I mean, what the markets took 0:01:03.720 --> 0:01:07.360 away from this was obviously kind of locked in on December. 0:01:07.400 --> 0:01:09.920 You're gonna get a fifty basis point. Like he didn't 0:01:09.959 --> 0:01:12.959 say that specifically, but if you read between the lines, 0:01:13.319 --> 0:01:15.840 he all but said that, yes, we're gonna get fifty. 0:01:16.120 --> 0:01:20.480 It's time to start slowing the pace of of rate hikes. 0:01:21.400 --> 0:01:25.160 But he also said, you know, he repeated, and these 0:01:25.200 --> 0:01:30.640 are themes from the past press conference at the November meeting, 0:01:31.319 --> 0:01:33.640 that you could have rates that are higher than what 0:01:33.720 --> 0:01:37.320 they had been expecting before. So you could have in 0:01:37.440 --> 0:01:40.960 the dot plot in December rates moving up a bit 0:01:41.040 --> 0:01:45.080 from where they were in September. To me, the thing 0:01:45.160 --> 0:01:48.200 that jumped out was the way he was framing the 0:01:48.240 --> 0:01:52.640 fight against inflation. He said, they're basically three types of inflation. 0:01:53.160 --> 0:01:56.960 You have goods inflation, where there's been a lot of progress. 0:01:57.440 --> 0:02:01.000 There was COVID disruption, now that is easying. You have 0:02:01.120 --> 0:02:05.600 housing uh inflation and you know that's going to continue. 0:02:06.080 --> 0:02:09.480 But if you look at new leases that they've already 0:02:09.520 --> 0:02:12.600 started to come down. So there's was a lot of 0:02:12.600 --> 0:02:16.799 optimism there and then the third area with services inflation, 0:02:17.480 --> 0:02:20.280 and that was the area where there was, you know, 0:02:20.360 --> 0:02:23.480 a very uncertain outlook that whether things are going to 0:02:23.520 --> 0:02:28.040 get better or not, and that often, uh was you know, 0:02:28.440 --> 0:02:30.919 that was where I was talking about the labor market. 0:02:31.000 --> 0:02:34.200 There were being too tight labor market and that contributing 0:02:34.240 --> 0:02:37.679 to wage pressures and inflation. Well, that's exactly where I 0:02:37.720 --> 0:02:39.720 want to go, Steve, because something that stuck out to 0:02:39.760 --> 0:02:43.280 me from Palace comments was what he said about the 0:02:43.400 --> 0:02:46.680 labor market, the idea that immigration is well below pre 0:02:46.760 --> 0:02:49.440 pandemic levels, we still got workers on the sidelines due 0:02:49.440 --> 0:02:52.760 to COVID. And then there was this the what millions 0:02:52.800 --> 0:02:56.840 of Americans who left the workforce early during the pandemic, 0:02:56.880 --> 0:03:00.680 these so called pandemic era retirements. What stuck out to 0:03:00.720 --> 0:03:03.359 you from the perspective of the supply side here because 0:03:03.720 --> 0:03:06.360 it seems like he needs to bring down demand rather 0:03:06.400 --> 0:03:09.360 than increased supply when it comes to labor, because that's 0:03:09.440 --> 0:03:12.760 just not happening. Yeah, that was really fascinating because he 0:03:12.800 --> 0:03:16.000 was saying, if you look at where the Congressional Budget 0:03:16.040 --> 0:03:19.640 Office was projecting the size of the labor force before 0:03:19.800 --> 0:03:23.440 the COVID pandemic that where they are right now is 0:03:23.480 --> 0:03:27.560 several million jobs short of where they were expected to be, 0:03:28.080 --> 0:03:30.840 and there are lots of reasons for that. Early retirements 0:03:31.160 --> 0:03:35.600 was one, the amount of COVID deaths, and long COVID 0:03:35.760 --> 0:03:40.600 was another area. But that and immigration, as you point out, 0:03:40.680 --> 0:03:44.400 was has been disappointing, and he was He was kind 0:03:44.400 --> 0:03:48.880 of called on Congress too and fiscal policymakers to do something. 0:03:48.880 --> 0:03:51.960 He said, we could affect the demand, we can't affect 0:03:52.080 --> 0:03:56.480 labor supply. And I'm not going to endorse any specific idea, 0:03:56.960 --> 0:03:59.720 but it's something that would really help the economy if 0:04:00.040 --> 0:04:03.800 coal policymakers would address the supply of labor. So, you know, 0:04:04.600 --> 0:04:07.160 we'll see if that happens. Steve, you and I have 0:04:07.200 --> 0:04:08.960 been around the block a few times. Tim as too 0:04:09.000 --> 0:04:11.960 a little bit, but I do think they But I 0:04:12.000 --> 0:04:14.720 do think the immigration story is something we've talked about 0:04:14.800 --> 0:04:18.480 for years in terms of, you know, change it, make 0:04:18.520 --> 0:04:20.320 it legal, bring them into the economy. There are a 0:04:20.360 --> 0:04:23.080 lot of jobs that immigrants coming to the United States 0:04:23.160 --> 0:04:25.440 would love to have that we're not able to fill 0:04:25.480 --> 0:04:28.080 at this point. So, like it's been an old thing, 0:04:28.640 --> 0:04:31.200 but it requires legislation and policy, and I don't know 0:04:31.200 --> 0:04:35.320 if we're going to get that. Yeah, you know, we 0:04:35.320 --> 0:04:37.919 we all have been around for quite a long time 0:04:38.240 --> 0:04:40.680 because this has been a constant theme. I mean I 0:04:40.720 --> 0:04:44.480 remember Ben Bernanky talking about it, and the Richard Fisher, 0:04:44.560 --> 0:04:49.360 the former Dallas Fed president, made controversial remarks basically calling 0:04:49.400 --> 0:04:53.920 for more immigration. And and clearly there are jobs that 0:04:54.160 --> 0:04:57.880 you know are going unfilled because they're not being filled 0:04:57.920 --> 0:05:01.680 by American workers. Americans don't want these particular jobs, are 0:05:01.760 --> 0:05:05.840 are not skilled for them. And you know why we're 0:05:05.880 --> 0:05:09.080 not bringing more people in. It's just it's it's it's 0:05:09.120 --> 0:05:13.440 not a mystery. It's because Congress is you know, decided 0:05:13.480 --> 0:05:15.760 not to do anything about it, and right now it's 0:05:15.880 --> 0:05:20.000 it's just they're just continuing debate, alright. So I know 0:05:20.120 --> 0:05:22.320 it's like, you know, what have you done for me today? 0:05:22.480 --> 0:05:24.120 Or what have you done for me lately? We got 0:05:24.120 --> 0:05:26.880 through j Pal very important. We saw the markets react. 0:05:27.200 --> 0:05:29.960 How important is Friday's jobs report based on what we 0:05:30.000 --> 0:05:32.839 heard from J Powell today? I think it is. It 0:05:33.000 --> 0:05:36.560 is important, and it's not important for the December rate hike. 0:05:37.000 --> 0:05:41.840 It's really now they're setting expectations for what happens in February. 0:05:42.120 --> 0:05:44.720 The next big debate you're gonna hear the FED is 0:05:45.080 --> 0:05:47.600 not about December. That's pretty much a done deal, abs 0:05:47.800 --> 0:05:50.800 there being some shock, but it's about do you do 0:05:50.880 --> 0:05:55.080 fifty basis points in February or do you do And 0:05:55.279 --> 0:05:57.880 you know, if you do, then that kind of sets 0:05:58.120 --> 0:06:00.800 at least the possibility that you could pause for a 0:06:00.800 --> 0:06:05.000 while or or do another twenty five. So you know, 0:06:05.279 --> 0:06:08.720 the next debate is going to be very much about 0:06:08.800 --> 0:06:12.680 the early February meeting. Alright, I gotta dig into something 0:06:12.720 --> 0:06:14.920 you said, pause for a while. It makes me think 0:06:14.960 --> 0:06:17.680 of what j Powell said, you know, staying at restrictive 0:06:17.760 --> 0:06:20.719 levels for some time, and the way he ended his speech, 0:06:20.720 --> 0:06:25.840 we still have more work to do. What does sometime mean? Yeah, 0:06:25.880 --> 0:06:28.360 that's a good that's a really good question, because it's 0:06:28.400 --> 0:06:33.280 like they are setting up the idea that UH rate 0:06:33.360 --> 0:06:36.000 hikes are going to slow, but they're going to continue, 0:06:36.040 --> 0:06:39.320 and what's important is how high do they go and 0:06:39.360 --> 0:06:41.960 for how long? And they're kind of trying to set 0:06:42.000 --> 0:06:44.960 the narrative that it's going to be higher for longer, 0:06:46.000 --> 0:06:49.520 but they're not really defining that. But you know, you 0:06:49.800 --> 0:06:53.720 will get some definition in the December dot plot, which 0:06:53.720 --> 0:06:57.440 will suggest that they plan to hold rates very high 0:06:57.520 --> 0:07:02.159 for at least all of three So I think that 0:07:02.160 --> 0:07:04.719 that is how they are looking at it. A difference 0:07:04.720 --> 0:07:06.760 to what Gina marn Adams told us yesterday where she 0:07:06.800 --> 0:07:08.920 thinks that they'll see a cut of fifty basis points 0:07:09.000 --> 0:07:12.760 due to a recession. Carol, Yeah, that's interesting. So where 0:07:12.760 --> 0:07:14.360 do we go with that? Steve? What are you hearing 0:07:14.360 --> 0:07:16.720 about in terms of he was asked about certainly the 0:07:16.720 --> 0:07:19.680 economic outlook and recession. He seems to believe that he 0:07:19.680 --> 0:07:21.880 can still get a soft landing. So how do you 0:07:21.920 --> 0:07:23.640 think about it? And the reporting that you were doing 0:07:23.640 --> 0:07:27.040 on the FED. Well, it's interesting they're talking about a 0:07:27.080 --> 0:07:30.600 soft landing because we're still having three point seven percent 0:07:30.680 --> 0:07:34.080 unemployment right which is a very tight labor market. If 0:07:34.120 --> 0:07:38.520 you look at GDP now, the Atlanta Feds GDP tracker, 0:07:39.000 --> 0:07:42.000 it's tracking at over four percent for the fourth quarter. 0:07:42.080 --> 0:07:44.520 It was interesting, he was The Big Book came out 0:07:44.560 --> 0:07:47.840 today as well. It was pointing towards fairly, you know, 0:07:48.320 --> 0:07:52.400 dismal growth in in the most recent period, but that's 0:07:52.440 --> 0:07:57.120 not what the GDP trackers are showing. So, I mean, 0:07:57.400 --> 0:08:00.800 I think the case for a soft landing is there's 0:08:00.840 --> 0:08:04.440 so much momentum right now. Uh, the labor market can 0:08:04.480 --> 0:08:08.720 take some hits and will still continue to grow. And 0:08:08.920 --> 0:08:14.120 there's so much excess cash one on household balance sheets, uh, 0:08:14.200 --> 0:08:19.920 still from from the COVID cutbacks and from stimulus and 0:08:20.000 --> 0:08:22.560 on state and local governments, that you know that there's 0:08:22.640 --> 0:08:25.320 reason to believe that there's gonna be a lot of momentum. 0:08:25.920 --> 0:08:32.160 Uh into heyconds, Steve left with you. What economic data 0:08:32.200 --> 0:08:34.679 have we gotten recently that is not working in the 0:08:34.679 --> 0:08:37.679 feds favor? Because Jolts certainly is uh. And then a 0:08:37.720 --> 0:08:40.800 slowdown in job gains on Friday will work in its favor. 0:08:40.840 --> 0:08:43.760 But what hasn't worked in its favor? You know that 0:08:43.920 --> 0:08:47.920 that's an interesting uh question. I mean, I would say, 0:08:48.000 --> 0:08:51.720 really the big thing is the headline inflation numbers have 0:08:51.840 --> 0:08:55.120 not come down. They continued to be disappointing that you've 0:08:55.120 --> 0:08:59.240 had a S pointed out one good month, but uh, 0:08:59.600 --> 0:09:05.160 you know you're still seeing much higher inflation, and and 0:09:05.320 --> 0:09:10.480 while jobs are showing some improvement in moderation, Uh, it's 0:09:10.520 --> 0:09:14.560 still running, you know, twice as high as the payrolls 0:09:14.559 --> 0:09:16.760 are running, twice as high as as the FED would 0:09:16.800 --> 0:09:19.400 like yeah, and the Fed lucky that at least the 0:09:19.440 --> 0:09:21.240 labor market is held on to strength that gives them 0:09:21.280 --> 0:09:24.439 still some room to work on those inflation number. Steve Matthews, 0:09:24.440 --> 0:09:26.839 thank you so much. As always, he's economic supporter of 0:09:26.840 --> 0:09:30.439 Bloomberg News. Joining us from our bureau in Atlanta. This 0:09:30.720 --> 0:09:34.480 is Bloomberg Business Week with Carol Messer and Bloomberg Quick 0:09:34.520 --> 0:09:38.360 Takes Tim Stinovic on Bloomberg Radio. We do want to 0:09:38.400 --> 0:09:41.200 get though to the cover of Bloomberg Business Week, which 0:09:41.200 --> 0:09:43.920 also happens to be this week's Bloomberg Big Take, or 0:09:43.920 --> 0:09:46.240 I should say Today's Bloomberg Big Take. And to say 0:09:46.240 --> 0:09:49.280 it's a troubling story is certainly an understatement. The story 0:09:49.559 --> 0:09:53.680 Tim about TikTok It's viral challenges that children are actually 0:09:53.800 --> 0:09:56.360 dying front with more. We're joined by Bloomberg Business Week 0:09:56.480 --> 0:09:58.480 editor Joel Weber, who joins us on the access line 0:09:58.480 --> 0:10:01.079 from Brooklyn, New York. So with us is Bloomberg News 0:10:01.120 --> 0:10:05.040 investigative reporter Olivia Carville. She's with us from the Bloomberg 0:10:05.080 --> 0:10:09.040 Interactive Broker's studio in Manhattan. Joel, I want to start 0:10:09.080 --> 0:10:12.319 with you the blackout challenge. It's something that children are 0:10:12.480 --> 0:10:15.840 dying from the question Olivia tried to answer here is 0:10:16.000 --> 0:10:18.560 why isn't the world's most popular app We're talking TikTok 0:10:18.640 --> 0:10:23.600 here doing more to protect them. Yeah, so blackout challenge 0:10:23.840 --> 0:10:28.680 um has been this viral um uh sensation really that 0:10:28.679 --> 0:10:31.800 it's taken off on social media, and you know, TikTok 0:10:31.840 --> 0:10:34.760 is not the only platform where it's been a thing. 0:10:35.440 --> 0:10:40.840 But what makes TikTok and the story really troubling is 0:10:41.960 --> 0:10:45.520 the algorithm that has really turned TikTok into the world's 0:10:45.559 --> 0:10:50.640 most popular app is incredibly value, very very powerful, and 0:10:50.880 --> 0:10:55.760 it's so good at servicing content. Um. But TikTok itself 0:10:56.520 --> 0:11:00.839 extremely popular, popular with young kids, but had no way 0:11:00.960 --> 0:11:04.440 of determining whether or not a kid is actually old 0:11:04.520 --> 0:11:06.880 enough to be using the app, and that's led to 0:11:06.960 --> 0:11:12.840 some really, really frightening situations. And personally, it's one of 0:11:12.840 --> 0:11:14.840 these stories. After I read it, I took away my 0:11:14.920 --> 0:11:16.920 son's devices and was like, you will never see the 0:11:16.960 --> 0:11:21.440 internet ever again. And I feel I say that lighthearted, 0:11:22.280 --> 0:11:24.640 but for real, like this is one of these things 0:11:24.640 --> 0:11:28.400 that everyone just assumes, um that you you you know, 0:11:28.480 --> 0:11:30.680 the kids are are not going to find themselves in 0:11:30.800 --> 0:11:34.680 places that they're not supposed to be and just truly harolding. 0:11:34.920 --> 0:11:39.680 How scary some of these corners can become. Um, Olivia, 0:11:39.920 --> 0:11:42.400 bring us into how you went about reporting this story, 0:11:42.559 --> 0:11:48.200 because um, it really involves some tragic, tragic elements. Yeah, 0:11:48.200 --> 0:11:52.360 it does. I started reporting this pace by trying to 0:11:52.400 --> 0:11:56.360 get a sense of what happens inside TikTok. After a 0:11:56.640 --> 0:12:00.960 child dies participating in an online challenge, and maybe there's 0:12:01.000 --> 0:12:05.240 been a headline and some local news reports connecting TikTok 0:12:05.320 --> 0:12:08.280 to that death, how does the company respond and what 0:12:08.440 --> 0:12:12.520 happens internally? And the way to answer that question was 0:12:12.600 --> 0:12:15.920 to try and build sources on their trust and safety team. 0:12:15.960 --> 0:12:19.080 This is the team that is built within TikTok to 0:12:19.880 --> 0:12:23.120 handle the worst case scenarios. These are the fixes of 0:12:23.160 --> 0:12:25.120 the Internet, the people who come in and clean up 0:12:25.160 --> 0:12:28.480 the mess, protect the company's reputation, but also try and 0:12:28.559 --> 0:12:32.440 protect users. And I spoke to more than two dozen 0:12:32.559 --> 0:12:35.800 current and former trust and safety insiders to get a 0:12:35.840 --> 0:12:39.560 sense of what happens at TikTok in the aftermath of 0:12:39.679 --> 0:12:42.920 a really tragic incident like this, and that's how we 0:12:42.920 --> 0:12:45.480 were able to tell the story is really through the 0:12:45.559 --> 0:12:49.400 lens of that trust and safety team. Well, speaking of 0:12:49.520 --> 0:12:52.720 the tragic side of this, your piece starts out with 0:12:53.520 --> 0:12:57.760 just the tragic story of Ariannia Royo. Can you share that, 0:12:58.520 --> 0:13:01.400 share her story and what her family has gone through. 0:13:02.120 --> 0:13:04.800 Arianni was a nine year old girl. She lived down 0:13:04.840 --> 0:13:09.200 in Milwaukee, Wisconsin, and she loved TikTok. You know, this 0:13:09.320 --> 0:13:12.120 is the most popular app in the world, and it 0:13:12.240 --> 0:13:16.680 is hard to deny the success of um of this company. 0:13:17.360 --> 0:13:21.560 Seventy percent of teenagers in America are using TikTok and 0:13:21.559 --> 0:13:24.240 they're using it more than all of the other apps 0:13:24.240 --> 0:13:29.960 out there, Facebook, Snapchat, YouTube, Twitter. So Ariane, like most kids, 0:13:30.200 --> 0:13:32.880 fell in love with TikTok and she was using the 0:13:32.880 --> 0:13:36.719 platform on a daily basis, and she really enjoyed participating 0:13:36.880 --> 0:13:41.000 in the trending challenges. She would do things like hold 0:13:41.040 --> 0:13:44.120 water in her mouth until you start giggling, really kind 0:13:44.120 --> 0:13:48.800 of harmless, fun joking challenges. But in February of last year, 0:13:49.120 --> 0:13:52.720 she attempted the Blackout challenge, which is where children try 0:13:52.760 --> 0:13:56.360 and choke themselves with household objects until they black out 0:13:56.920 --> 0:13:59.679 and then filmed the adrenaline rush or the high they 0:13:59.720 --> 0:14:04.400 get regaining consciousness. But at the age of nine, Ariani 0:14:04.600 --> 0:14:09.480 unfortunately was unable to help herself or to save herself. 0:14:09.520 --> 0:14:12.160 She had choked herself with a metal dog leash and 0:14:12.840 --> 0:14:19.240 she tragically died. So Olivia obviously TikTok is aware that 0:14:19.640 --> 0:14:22.640 there's a challenge here and that these have happened, there's 0:14:22.680 --> 0:14:25.880 been lawsuits. What does the company have to say about it? 0:14:25.920 --> 0:14:28.880 And and what's their what's their official response? And then 0:14:28.920 --> 0:14:32.280 what what are what are others saying about that response? Yeah, 0:14:32.320 --> 0:14:35.600 I mean, these these dangerous challenges bounce across platforms. They 0:14:35.640 --> 0:14:38.120 exist on TikTok, but they exist on all the others 0:14:38.120 --> 0:14:42.520 as well, and users actually try and sidestep safety restrictions 0:14:42.560 --> 0:14:46.960 by doing things like misspelling keywords. So rather than writing 0:14:47.000 --> 0:14:51.040 blackout challenge, which has been banned on TikTok, they'll right 0:14:51.440 --> 0:14:54.440 black out with a zero and try and get around 0:14:54.480 --> 0:14:58.040 the the artificial intelligence or the systems that have been 0:14:58.080 --> 0:15:01.560 set up to try and protect kids. So TikTok really 0:15:01.600 --> 0:15:04.920 doesn't want this content on its platform. It's done what 0:15:05.000 --> 0:15:07.680 it can to train its moderators to take down any 0:15:07.720 --> 0:15:12.080 content relating to the blackout challenge, and it also prevents 0:15:12.080 --> 0:15:14.840 anyone from being able to search for Blackout Challenge related 0:15:14.880 --> 0:15:18.560 content in the app, and it's set those um those 0:15:18.600 --> 0:15:21.680 features in place, those safety restrictions in place at the 0:15:21.760 --> 0:15:24.040 start of last year after the first ten year old 0:15:24.040 --> 0:15:29.080 girl died attempting this particular challenge. But unfortunately, kids are 0:15:29.160 --> 0:15:31.640 smart and they know how to get around these and 0:15:31.840 --> 0:15:34.440 you know, these safety restrictions, and they're doing that, and 0:15:34.480 --> 0:15:38.280 that means that the challenges continuing to spread across social 0:15:38.320 --> 0:15:42.000 media platforms. And the most recent cases that we could 0:15:42.080 --> 0:15:45.800 find of deaths associated to the blackout challenge was August 0:15:45.840 --> 0:15:49.080 of this year. So despite all of those safety features 0:15:49.080 --> 0:15:54.360 being implemented, the deaths have kept happening. Olivia have to say, 0:15:54.360 --> 0:15:56.760 I've had a million questions come to mind, the responsibility 0:15:56.800 --> 0:15:59.960 of the company, you know, making sure kids aren't there, 0:16:00.720 --> 0:16:03.160 you know, platform and having access to content that they 0:16:03.160 --> 0:16:05.640 shouldn't have, and where are the martyr readers like watching 0:16:05.680 --> 0:16:08.320 all of this. We're a regulator, so where do you 0:16:08.360 --> 0:16:10.280 think we need to go from here to get on 0:16:10.320 --> 0:16:13.320 top of this. Well, that question of age verification is 0:16:13.360 --> 0:16:15.080 like the elephant in the room. This is one of 0:16:15.120 --> 0:16:18.080 the hardest things for these social media platforms to do. 0:16:18.520 --> 0:16:21.240 How can you tell the exact age of the person 0:16:21.320 --> 0:16:24.200 who was on the app, you know, using that device, 0:16:24.800 --> 0:16:28.520 and don't forget that children's content is allowed on TikTok. 0:16:29.040 --> 0:16:33.040 You can film your children or your siblings who are 0:16:33.120 --> 0:16:36.640 under the age of thirteen and post about it. Every 0:16:36.640 --> 0:16:40.080 social media platform in the US at least has a 0:16:40.160 --> 0:16:42.120 rule that says you have to be over the age 0:16:42.120 --> 0:16:45.600 of thirteen to use the product. This, you know, they 0:16:45.600 --> 0:16:48.760 call it within the industry the age gate, and it's 0:16:48.920 --> 0:16:51.760 very hard to enforce that, so these companies are trying 0:16:51.760 --> 0:16:53.600 to find ways around it. But this is one of 0:16:53.600 --> 0:16:57.800 the biggest challenges that social media platforms face. An incredible 0:16:57.840 --> 0:17:01.320 story this is Bloomberg has been this week with Carol 0:17:01.400 --> 0:17:05.840 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:17:06.400 --> 0:17:09.040 One thing we wanted to get to is a story 0:17:09.040 --> 0:17:11.560 that's also in Bloomberg Business Week in the upcoming new issue. 0:17:12.000 --> 0:17:16.000 And what's interesting is this has to do with um Avatar, 0:17:16.080 --> 0:17:18.040 which I think is kind of interesting. Tim coming off 0:17:18.440 --> 0:17:21.119 getting to go into our plane yesterday right at JFK, 0:17:21.320 --> 0:17:26.199 they're spending money on advertising. There were tons of posters 0:17:26.240 --> 0:17:30.040 about the Avatar sequel, and and you and I started saying, yeah, 0:17:30.040 --> 0:17:31.879 go ahead, Well we were saying, wait, is this a 0:17:31.920 --> 0:17:34.760 Fox movies? This a Disney movie? Well, this gets to 0:17:34.800 --> 0:17:37.560 a story. It's a confusing but a lot changed about 0:17:37.600 --> 0:17:40.000 three years ago. Let's get to it with Felix Gillette, 0:17:40.040 --> 0:17:42.760 Media Entertainment and Telecom editor for Bloomberg Business Week. He's 0:17:42.760 --> 0:17:45.760 also the author of It's Not TV, The Spectacular Rise, Revolution, 0:17:45.800 --> 0:17:47.680 and Future of HBO. He joins us live from the 0:17:47.680 --> 0:17:50.560 Bloomberg Interactive Broker Studio. First of all, Felix, I had 0:17:50.600 --> 0:17:52.439 no idea until I read your piece that this was 0:17:52.480 --> 0:17:55.720 the top grossing movie of all time. Uh. I saw 0:17:55.720 --> 0:17:57.560 it and I don't even remember what it was about. 0:17:58.000 --> 0:18:01.200 That's how much of an impact. Why was this Why 0:18:01.280 --> 0:18:03.960 was this movie so hot? Uh? You know, I think 0:18:04.160 --> 0:18:06.800 part of it was the technology at that point. Everyone 0:18:06.880 --> 0:18:09.320 was so excited to see it in three D and 0:18:09.359 --> 0:18:11.960 people were making all these grand predictions about there would 0:18:12.040 --> 0:18:15.160 never be anything except three D movies in the future 0:18:15.160 --> 0:18:19.119 based on this movie, and that didn't reappen, but people 0:18:19.440 --> 0:18:22.399 did see it in droves. One thing I do remember, 0:18:22.400 --> 0:18:24.880 I'm not joking. The thing I remember about it as 0:18:24.920 --> 0:18:26.280 I saw it in New York City before I even 0:18:26.320 --> 0:18:28.840 moved to New York. It was like twenty five dollars 0:18:28.880 --> 0:18:31.080 to see it in three D and in imax and 0:18:31.119 --> 0:18:33.760 that was what two thousand nine I think yep, thirteen 0:18:33.880 --> 0:18:39.520 years ago. So okay, so breakfast forward to today. Yeah. 0:18:39.560 --> 0:18:42.600 So now this is a big moment, uh, for the 0:18:42.640 --> 0:18:45.440 Avatar franchise. This is the first if it goes well. 0:18:45.880 --> 0:18:48.280 James Cameron, the director, has said he's going to make 0:18:48.320 --> 0:18:52.320 five of these. Um and the Avatar three has already 0:18:52.400 --> 0:18:55.680 been partly shot. Um, you know, every two years will 0:18:55.680 --> 0:18:59.920 be another Avatar sequel and uh, it's a huge bed 0:19:00.160 --> 0:19:03.640 for now Disney. The first one was made by Fox 0:19:03.840 --> 0:19:07.640 and then since then Disney has acquired Fox. And it's 0:19:07.680 --> 0:19:10.120 this crazy moment for Disney where you know, the share 0:19:10.160 --> 0:19:12.119 price has been down this year. They just got rid 0:19:12.160 --> 0:19:16.040 of their former CEO, brought back his predecessor, bibe Igor. 0:19:16.400 --> 0:19:19.359 Bob Iger is the one who made the deal to 0:19:19.359 --> 0:19:23.920 acquire Fox, which brought Avatar into the Disney family. Um, 0:19:24.040 --> 0:19:25.840 so this is a big moment. They spend a huge 0:19:25.840 --> 0:19:28.240 amount of money. I think four hundred million dollars is 0:19:28.440 --> 0:19:31.360 on the production alone, plus a couple hundred million more 0:19:31.400 --> 0:19:35.880 to market this, and uh it better be huge. Yeah. 0:19:35.920 --> 0:19:37.760 I was just gonna say, let's do some simple math. 0:19:37.800 --> 0:19:39.920 So if it made about three billion back in two 0:19:39.920 --> 0:19:44.119 thousand nine, Disney paid wet Felix seventy one billion to 0:19:44.240 --> 0:19:48.040 bring twenty one century Fox into the Magic Kingdom three 0:19:48.119 --> 0:19:50.520 years ago. So what have we got to do three 0:19:50.760 --> 0:19:54.840 into seventy one? So we're talking about twenty movies or 0:19:54.840 --> 0:19:59.840 so forty years to have one of these every two years. Um, yeah, 0:19:59.880 --> 0:20:02.040 I mean they think, you know, James Cameron has this 0:20:02.080 --> 0:20:09.159 incredible track record of movies, Blockbusters, Titanic, True Lies, Terminator, 0:20:09.960 --> 0:20:12.000 so it's it's a good it's always good to bet 0:20:12.080 --> 0:20:15.000 with James Cameron. Um. You know, this is an odd 0:20:15.000 --> 0:20:18.000 one because it's unusual for a really successful movie to 0:20:18.080 --> 0:20:21.439 go thirteen years before a sequel comes out. Um, it 0:20:21.520 --> 0:20:26.520 was delayed several times COVID among other things. And there's 0:20:26.560 --> 0:20:30.800 not a huge um amount of you know, there's no 0:20:30.880 --> 0:20:33.439 TV shows, there's nothing, there's not a lot of merchandise 0:20:33.480 --> 0:20:37.840 out there for Avatar, So in some ways it is unusual. Yeah, well, 0:20:37.920 --> 0:20:40.000 sorry to jump in. One thing that I'm a little 0:20:40.440 --> 0:20:45.480 confused about is the relationship between Avatar and Disney pre 0:20:45.880 --> 0:20:48.480 the assets of twenty century Fox that were sold your 0:20:48.520 --> 0:20:52.600 twentieth century Fox that were sold to um Disney. Yeah, 0:20:52.600 --> 0:20:58.320 Disney actually made based on licensing the Avatar I p 0:20:58.800 --> 0:21:01.600 in Florida, and which is one of the ways that 0:21:01.640 --> 0:21:06.240 I think that they, you know, wanted to acquire Fox. 0:21:06.280 --> 0:21:09.720 I mean it made sense get Avatar under the Disney roof. Fully. 0:21:10.320 --> 0:21:14.119 That park is you know, still pretty popular, um and 0:21:14.440 --> 0:21:17.840 it's pretty much the existing you know. You go and 0:21:17.880 --> 0:21:21.280 see Pandor, which is the moon where Avatar, you know, 0:21:21.359 --> 0:21:24.000 this world that Avatar brought to life, and they think 0:21:24.040 --> 0:21:26.639 that's what James Cameron brings. Don't give it away, Felix 0:21:26.800 --> 0:21:29.360 Carol hasn't seen it yet. Kind of sound like an Avatar. 0:21:33.160 --> 0:21:35.840 It's not Smurf, so the small blue people. So that's 0:21:35.840 --> 0:21:38.240 the you know, we gotta make that first leap. Um. 0:21:38.320 --> 0:21:41.840 But yeah, it brings this whole exist, this whole world 0:21:41.840 --> 0:21:44.120 to life. This one is underwater. That's the big new 0:21:44.160 --> 0:21:46.920 thing that's different from the first one. They've released three 0:21:46.960 --> 0:21:49.600 trailers that look super cool. They invented all sorts of 0:21:49.640 --> 0:21:53.080 cameras that cast learned how to do deep diving and 0:21:53.400 --> 0:21:56.240 hold their breath for minutes. Um. But it's gonna be 0:21:56.240 --> 0:22:00.879 crazy special effects, a big universe. Yea, so maybe Nemo 0:22:01.000 --> 0:22:03.600 can meet Pandora like underwater? Is there like is that 0:22:03.640 --> 0:22:06.399 where we see the collaboration? Got ten seconds left? Is 0:22:06.400 --> 0:22:08.959 this a kind of franchise though that they can do parks, 0:22:08.960 --> 0:22:11.760 they can do merchandizing really quickly. Yes, they want to 0:22:11.760 --> 0:22:13.520 do it all. They want to expand this thing and 0:22:13.600 --> 0:22:18.240 expand it, expand it and alright. Felix Gelette, Media Entertainment 0:22:18.280 --> 0:22:20.560 and Telecom editor for Bloomberg Business Week. Also check out 0:22:20.600 --> 0:22:23.240 his new book, It's Not TV. The Spectacular, Rise, Revolution 0:22:23.480 --> 0:22:25.600 and Future of HBO. We've got a trip. We'll go 0:22:25.640 --> 0:22:28.760 see the movie together. You're listening to Bloomberg Business Week 0:22:28.960 --> 0:22:32.919 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:22:33.080 --> 0:22:36.800 Bloomberg Radio. All Right, everybody, just about twelve minutes to go, 0:22:36.920 --> 0:22:39.800 just under until we get to that closing bell. We'll 0:22:39.800 --> 0:22:43.320 talk with our TV colleagues for simulcast coverage. But in 0:22:43.359 --> 0:22:45.760 the meantime, stocks, as you just heard from Charlie, they're 0:22:45.760 --> 0:22:47.359 holding on to their best levels. We've got quite a 0:22:47.440 --> 0:22:50.240 rally under way of stocks have come roaring back following 0:22:50.320 --> 0:22:53.000 j Powell's comments, and we've seen yields which backed off 0:22:53.400 --> 0:22:56.800 as a result of potentially maybe an easing in terms 0:22:56.800 --> 0:22:58.960