WEBVTT - Bloomberg Businessweek Weekend - April 21st, 2023 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:22.520 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio sad. 0:00:24.239 --> 0:00:24.439 By. 0:00:27.240 --> 0:00:29.640 So we're gonna talk a little bit about those boring 0:00:29.640 --> 0:00:32.400 old savings accounts. I'm gonna slow it down a little bit, everybody. 0:00:32.920 --> 0:00:35.600 The new we show, Bloomberg BusinessWeek is out on newsstands. 0:00:35.600 --> 0:00:37.760 This will all make sense in a moment. Be patient. 0:00:38.159 --> 0:00:40.919 It's on newsstands, online, a Bloomberg dot com slash BusinessWeek, 0:00:40.960 --> 0:00:43.240 and of course on the Bloomberg. And we're talking about 0:00:43.240 --> 0:00:45.840 this week's domestic covery, which is something that the big 0:00:45.880 --> 0:00:47.800 bank CEOs over the past week or so have been 0:00:47.800 --> 0:00:51.040 asked about paying up more on bank savings accounts, which 0:00:51.080 --> 0:00:55.040 are increasingly looking pretty interesting. As a surgeon interest rates 0:00:55.080 --> 0:00:57.320 has waited on some of the more speculative corners of 0:00:57.440 --> 0:00:59.560 financial markets. Let's get more on this story. It's the 0:00:59.600 --> 0:01:02.840 remarks in a new issue and we get to uh, 0:01:02.960 --> 0:01:05.600 of course, and it is the domestic cover. As I 0:01:05.600 --> 0:01:08.960 said earlier, Uh, the editor of Bloomberg BusinessWeek magazine, Joel 0:01:08.959 --> 0:01:12.640 Weber and Bloomberg Market senior editor Mike Reigan both actually 0:01:12.720 --> 0:01:15.399 Jill visit our studio. Mike is there on zoom from 0:01:15.440 --> 0:01:19.039 New Jersey. Joe, we're you know, we constantly say we're 0:01:19.040 --> 0:01:19.479 living in there. 0:01:19.520 --> 0:01:22.319 You're saving all your love forming. Uh, it's it's a 0:01:22.360 --> 0:01:27.720 whit the Houston favorite of mine. Yes, Deep Deep This week, 0:01:29.680 --> 0:01:35.199 so we've been perhaps you've noticed some offers from all 0:01:35.200 --> 0:01:37.760 over the place about how you can get four percent 0:01:37.920 --> 0:01:42.559 savings and Apple had that news betterments out with four 0:01:42.600 --> 0:01:46.840 point three five. Mike, do you remember when I could 0:01:46.880 --> 0:01:51.520 like invest in uh, you know, like a MC or 0:01:52.440 --> 0:01:55.640 pictures of digital apes and get rich really quickly. And 0:01:55.680 --> 0:01:57.960 it seems like the exact opposite is the cell now. 0:01:59.120 --> 0:02:02.840 Yeah, absolutely, you know, Joel, the fascinating thing is in 0:02:02.840 --> 0:02:06.760 that sort of twelve thirteen years of rock bottom interest 0:02:06.840 --> 0:02:10.760 rates after the financial crisis, the banks kind of trained 0:02:10.840 --> 0:02:14.400 us all to forget about the whole notion of you know, 0:02:14.400 --> 0:02:17.359 they're supposed to be paying us money to give them 0:02:17.480 --> 0:02:21.680 our savings. It's really a fascinating I think period in history, 0:02:21.760 --> 0:02:26.840 really a historical because you know, never have interest rates 0:02:26.840 --> 0:02:29.200 stayed that low. For that long, and even when the 0:02:29.240 --> 0:02:33.160 Federal Reserve started raising interest rates in twenty seventeen and 0:02:33.280 --> 0:02:35.200 twenty and eighteen, it was. 0:02:35.200 --> 0:02:38.160 A very gradual, slow rise, and. 0:02:38.080 --> 0:02:41.840 The banks didn't exactly react quickly to it by raising 0:02:41.840 --> 0:02:44.320 their own deposit rates, even though they were now able 0:02:44.360 --> 0:02:46.120 to make a little bit more money. 0:02:46.560 --> 0:02:49.320 You know, in the credit markets and whatnot. 0:02:50.120 --> 0:02:53.160 This time, it's a whole different scenario because that rise 0:02:53.200 --> 0:02:57.880 from the Federal Reserve has been so aggressive, so rapid, 0:02:57.919 --> 0:03:00.919 that a lot of banks have really reacted quickly to it. 0:03:01.919 --> 0:03:04.840 And you know, as you pointed out, Apple, sort of 0:03:05.200 --> 0:03:08.240 that news landed right as we were polishing off this story, 0:03:08.280 --> 0:03:11.600 so it was good timing on that. But the other 0:03:11.639 --> 0:03:15.080 fascinating thing is that not all banks have yet to 0:03:15.080 --> 0:03:18.040 do it. You know, you look at your basic savings 0:03:18.040 --> 0:03:20.799 account at Chase or Bank of America, they're still at 0:03:20.880 --> 0:03:25.120 literally zero point zero one percent on a savings account. 0:03:25.600 --> 0:03:27.359 And there's a variety of reasons for that. You know, 0:03:27.400 --> 0:03:30.320 they have a lot of much more diverse business other 0:03:30.400 --> 0:03:34.640 sources of funding than bank deposits, but that disparity is 0:03:34.680 --> 0:03:38.320 really fascinating. You know, zero point zero one percent to 0:03:38.600 --> 0:03:42.680 some banks, UFB Direct a small online bank offering above 0:03:42.720 --> 0:03:45.440 five percent, and now Apple and Goldman getting into the 0:03:45.440 --> 0:03:49.320 business offering over four percent. So it's it's a very 0:03:49.880 --> 0:03:54.160 dramatic and sort of newly competitive environment for banks to 0:03:55.120 --> 0:03:57.640 compete for these deposits, like like they haven't really had 0:03:57.680 --> 0:04:01.160 to do since before the global financial crisis in two 0:04:01.160 --> 0:04:01.800 thousand and eight. 0:04:01.880 --> 0:04:03.840 Mike, should they be? And I guess I ask because, 0:04:03.880 --> 0:04:07.160 as you say, you know, it's not the old fashioned 0:04:07.200 --> 0:04:10.360 bank of you know, taking deposits and loan out to 0:04:10.640 --> 0:04:13.200 the neighborhood, you know, to buy homes, to buy things, 0:04:13.200 --> 0:04:16.000 and so on and so forth. The big banks today 0:04:16.000 --> 0:04:18.840 are much more complicated financial entities and they have a 0:04:18.880 --> 0:04:21.440 lot of different ways to make money. Do they care, 0:04:21.800 --> 0:04:24.400 maybe this is a naive question. Do they care whether 0:04:24.480 --> 0:04:27.560 or not they have those individual customer deposits? How important 0:04:27.600 --> 0:04:28.880 is that to a bank? 0:04:29.600 --> 0:04:31.320 Well, you know, I think the bigger you get, the 0:04:31.360 --> 0:04:35.960 more diversified your businesses, the less pressure you're feeling, you know, 0:04:36.040 --> 0:04:38.000 especially when you look at a bank like JP Morgan 0:04:38.080 --> 0:04:42.039 Chase that saw actually saw a flood of deposits in 0:04:42.080 --> 0:04:45.080 the first quarter because of the concern about the smaller 0:04:45.200 --> 0:04:45.880 regional banks. 0:04:45.920 --> 0:04:47.240 But the smaller you get. 0:04:47.240 --> 0:04:50.800 The more you are closer to that standard banking model 0:04:51.040 --> 0:04:55.200 of you know, borrowing low and lending high. I think 0:04:55.200 --> 0:04:59.719 the more pressure you're feeling because the average consumer and businesses. 0:04:59.800 --> 0:05:02.200 Even more importantly, I've woken up to this idea that 0:05:02.240 --> 0:05:04.479 there's a better rate out there. Now it's finally worth 0:05:04.880 --> 0:05:07.880 my time and effort to sort of break up with my. 0:05:07.839 --> 0:05:08.960 Bank, switch banks. 0:05:10.040 --> 0:05:13.000 And the less I think many banks want to confront 0:05:13.080 --> 0:05:14.920 right now is a drop in deposits. 0:05:14.920 --> 0:05:16.720 I mean that ultimately. 0:05:16.520 --> 0:05:17.360 Didn't go over well. 0:05:18.000 --> 0:05:19.800 It didn't go over well, it didn't go over well 0:05:19.920 --> 0:05:20.760 Silicon Valley back. 0:05:20.800 --> 0:05:27.640 Now, that's obviously an exaggerated situation, but bank deposits in 0:05:27.800 --> 0:05:31.839 aggregate all US commercial banks dropped last year for the 0:05:31.880 --> 0:05:36.120 first time since like the nineteen forties, So that the 0:05:36.200 --> 0:05:40.760 competition is real, and not all banks have raised their rates. 0:05:40.839 --> 0:05:42.720 But I think there's more to come. You know, there's 0:05:42.960 --> 0:05:48.080 this competition. It isn't over. There will be more banks 0:05:48.080 --> 0:05:50.440 reacting and raising rates, you know, if not to four 0:05:50.520 --> 0:05:54.839 or five percent, certainly the era of rock bottom interest 0:05:54.920 --> 0:05:58.320 rates on savings deposits, I think is really coming to 0:05:58.360 --> 0:05:59.160 a pretty swift end. 0:05:59.240 --> 0:05:59.400 You know. 0:05:59.440 --> 0:06:02.080 The thing they have going for them, though, is a 0:06:02.080 --> 0:06:06.760 inertia Mike. It's like really hard to pull out, you know, 0:06:07.279 --> 0:06:11.880 out of a bank where you've been banking forever and 0:06:11.920 --> 0:06:14.640 maybe you've got all those auto payments set up and 0:06:14.880 --> 0:06:18.479 auto checks and to like actually, you know, move from 0:06:18.480 --> 0:06:22.000 one institution to another, even going after you know, bank 0:06:22.120 --> 0:06:25.280 rates five point oh two percent. As great as that sound, 0:06:25.360 --> 0:06:28.040 that's your thing. Like, man, inertia is a hard thing 0:06:28.080 --> 0:06:31.080 to overcome, So like, you know, what incentive do the 0:06:31.120 --> 0:06:33.360 banks really have to do this? 0:06:33.640 --> 0:06:35.240 I believe they call it stickiness? 0:06:35.320 --> 0:06:38.880 Yeah, stickiness right, yeah, you know, And that's we're kind 0:06:38.920 --> 0:06:41.159 of in that phase now where the inertia I think 0:06:41.279 --> 0:06:42.960 is still a big thing. 0:06:43.360 --> 0:06:46.760 You know, say you have ten thousand dollars in savings. 0:06:47.200 --> 0:06:50.360 If you're if you get a five percent rate on that, 0:06:50.360 --> 0:06:51.880 you're talking about five hundred bucks. 0:06:51.880 --> 0:06:54.800 So is it worth it for you for five hundred bucks. 0:06:54.960 --> 0:06:58.880 To really, as you point out, go through and take 0:06:58.920 --> 0:07:03.240 the effort and possibly have to rejigger all your automatic 0:07:03.279 --> 0:07:07.279 payments and stuff. But you know, the higher that savings 0:07:07.320 --> 0:07:10.480 goes up, if you have you know, one hundred thousand 0:07:10.480 --> 0:07:13.120 dollars and all of a sudden you're talking about five 0:07:13.160 --> 0:07:16.560 thousand dollars a year, Well, you know, it might. 0:07:16.440 --> 0:07:16.840 Be worth it. 0:07:16.840 --> 0:07:18.720 It's probably worth it, And I think that's a calculation 0:07:19.040 --> 0:07:22.880 that a lot of just average mom and pops are 0:07:22.880 --> 0:07:26.400 doing around the country right now, and businesses as well well. 0:07:26.400 --> 0:07:29.080 Also that five hundred dollars, as an investor would tell you, 0:07:29.120 --> 0:07:31.360 if you put that back into your Schwab brokerage, that 0:07:31.400 --> 0:07:33.880 could be a lot more in the decades to come. 0:07:33.960 --> 0:07:36.160 But I want to ask you about how to suss 0:07:36.160 --> 0:07:38.960 out these high old savings accounts. I get fed constant 0:07:39.000 --> 0:07:41.920 ads about a variety of different high old savings accounts. 0:07:42.040 --> 0:07:44.200 My friends and I are always having this discussion of 0:07:44.240 --> 0:07:45.320 what to do with our savings. 0:07:45.360 --> 0:07:47.440 Do they look like the cover of Bloomberg Business Week, 0:07:47.440 --> 0:07:52.559 which is the number four flexing with cool look very weird? 0:07:53.600 --> 0:07:56.080 They look way less cool and way more sketchy, which 0:07:56.120 --> 0:07:58.880 is why I'm concerned about me and my friends getting 0:07:58.920 --> 0:08:02.680 scammed by non FDIC insured high yield savings account Do 0:08:02.720 --> 0:08:04.200 you have any advice for us? 0:08:04.680 --> 0:08:07.120 Yeah, I mean, I think you know that's a great point. Obviously, 0:08:07.120 --> 0:08:11.440 you make sure you're dealing with a FDIC insured bank, 0:08:11.520 --> 0:08:15.080 which chah, they all all the banks are more or 0:08:15.160 --> 0:08:18.360 less FDIC insured now. But you know, I'm sure if 0:08:18.360 --> 0:08:21.000 you starch hard enough on the internet you'll find some 0:08:21.040 --> 0:08:25.640 sketchy operators that aren't actually insured, you know, especially if 0:08:25.640 --> 0:08:28.680 you're you know, dipping a tone of the crypto market 0:08:28.680 --> 0:08:30.760 and that sort of thing. But you know, the other 0:08:30.800 --> 0:08:33.680 important thing is, well, what is You know that FDIC 0:08:34.120 --> 0:08:37.240 limit is two hundred and fifty thousand dollars, So if 0:08:37.280 --> 0:08:40.800 you're talking about moving an amount of money greater than that, 0:08:40.880 --> 0:08:43.720 you have to think about it a little bit harder. 0:08:43.480 --> 0:08:43.720 And. 0:08:45.120 --> 0:08:48.000 You know, perhaps split it up over a couple banks, 0:08:48.080 --> 0:08:51.040 or go to a money market mutual fund, which isn't 0:08:51.160 --> 0:08:54.079 fdi C in sort, but they have a very strong 0:08:54.280 --> 0:08:57.960 history of being pretty reliable. You know, I don't think 0:08:58.160 --> 0:08:59.760 I could be wrong about this, but I don't think. 0:08:59.640 --> 0:09:02.080 Of money market fund has ever actually failed in the US. 0:09:02.120 --> 0:09:05.080 You know, the reserve fund in the financial crisis, UH 0:09:05.400 --> 0:09:08.959 broke the book reading. You know, your assets dropped a 0:09:08.960 --> 0:09:13.199 little bit, but you know, so yeah, you got to 0:09:13.240 --> 0:09:16.360 do your research. And you know, some accounts require minimum balance, 0:09:16.480 --> 0:09:19.240 some don't. If you're talking about a CD or what 0:09:19.280 --> 0:09:21.640 they call time deposit, you might have to lock up 0:09:21.679 --> 0:09:24.040 your money for a year or two years something like that. 0:09:24.120 --> 0:09:26.520 So you know, it's it's a good time to read 0:09:26.520 --> 0:09:27.440 the fine print for once. 0:09:27.800 --> 0:09:30.760 Yeah, it also just makes me think, like I mean 0:09:30.760 --> 0:09:33.920 that fine print, like is there is there some fine 0:09:33.960 --> 0:09:35.040 print that we haven't thought. 0:09:34.840 --> 0:09:37.040 About for a while even, you know, And. 0:09:36.679 --> 0:09:39.760 I'm like, there's there's basis points with some of this stuff, 0:09:39.800 --> 0:09:43.360 Like so is there you know when the when the 0:09:43.400 --> 0:09:46.760 Reagan family sits down and assesses their options, you know what, 0:09:46.760 --> 0:09:49.679 what are you just going straight for the north of 0:09:49.720 --> 0:09:53.200 five percent, Mike, or are you somewhere north south of that? 0:09:54.200 --> 0:09:54.480 Well? 0:09:54.840 --> 0:09:58.040 I think what's fascinating to me is that there is 0:09:58.080 --> 0:10:01.960 this skepticism and this you know, it's too good to 0:10:02.000 --> 0:10:06.720 be true mentality towards towards a four percent savings rate 0:10:06.800 --> 0:10:09.400 when you know, I'm dating. 0:10:09.160 --> 0:10:10.120 Myself here a little bit. 0:10:10.160 --> 0:10:12.440 But you know, I remember back in the eighties, I mean, 0:10:12.920 --> 0:10:15.160 you know, you expected to get paid on your deposits, 0:10:15.200 --> 0:10:16.800 you know, and you shocked around and. 0:10:16.760 --> 0:10:18.679 Found that best that best yield. 0:10:18.760 --> 0:10:21.240 I remember taking my nickels and dimes from the paper 0:10:21.320 --> 0:10:23.079 route and put them in the bank knowing I, you know, 0:10:23.160 --> 0:10:25.880 I get a nice yield on it. So a little 0:10:25.920 --> 0:10:29.640 skepticism is healthy. But I think in the sort of 0:10:29.679 --> 0:10:34.400 spectrum of investments bank savings account you know, I would. 0:10:34.360 --> 0:10:36.720 As boring as it gets, is as. 0:10:36.559 --> 0:10:40.720 Boring and probably as safe as it gets. Granted, you know, 0:10:40.720 --> 0:10:44.120 if you're under that FDIC limit, especially that two hundred 0:10:44.120 --> 0:10:46.360 and fifty thousand dollars limit now there is there there 0:10:46.520 --> 0:10:50.719 was sort of this paranoia that erupted when SVB and 0:10:51.000 --> 0:10:53.760 the other two went under that you know, the the 0:10:53.960 --> 0:10:56.440 fd I C might not have enough money in its 0:10:56.480 --> 0:11:00.920 own accounts to cover to ensure the positive if if 0:11:00.920 --> 0:11:04.240 the dominoes keep falling at enough banks go under. I 0:11:04.240 --> 0:11:08.320 think that's subsided a little bit just because of. 0:11:08.160 --> 0:11:10.520 The programs that have been put in place. And also 0:11:10.760 --> 0:11:14.280 to me, I think, you know, the FDIC. 0:11:14.120 --> 0:11:17.440 Is such an important institution to this country that even 0:11:17.480 --> 0:11:20.840 though we have this you know, pro wrestling version of 0:11:20.880 --> 0:11:23.199 politics going on right now, where you. 0:11:23.160 --> 0:11:24.160 Know, anything could happen. 0:11:24.200 --> 0:11:27.240 We might default on treategeries in a few months. I 0:11:27.240 --> 0:11:30.000 think that FDIC is so important that it would, you know, 0:11:30.040 --> 0:11:33.560 if it were to not live up to its obligations, 0:11:33.640 --> 0:11:35.959 that the damage on both sides of the political aisle 0:11:36.000 --> 0:11:38.680 would be so great that they actually would you know, 0:11:38.760 --> 0:11:39.160 do what. 0:11:39.040 --> 0:11:44.040 It takes to keep it afloat. So I think, you know, I. 0:11:43.160 --> 0:11:45.280 Talk about a crisis of confidence if that. 0:11:45.320 --> 0:11:49.400 Happened, absolutely absolutely yeah, and I you know, knock on wood, 0:11:49.559 --> 0:11:51.960 and I you know, I hope I'm not proved wrong 0:11:52.000 --> 0:11:54.040 about that, but I think, you know, it is such 0:11:54.040 --> 0:11:58.720 a you know, important bedrock of the entire US financial 0:11:58.720 --> 0:12:02.320 system that even in the toxic political environment we're in 0:12:02.400 --> 0:12:03.360 right now, I think they'd. 0:12:03.200 --> 0:12:05.360 Find a way to to to keep it going. 0:12:05.440 --> 0:12:10.000 Okay, So if it's point zero one percent on basic 0:12:10.080 --> 0:12:14.839 savings deposits at banks, Bank of America or or Chase, 0:12:14.960 --> 0:12:17.400 you know, like Mike Wake, what what's it gonna be? 0:12:17.920 --> 0:12:20.280 Is it gonna go point zero five? Or are they 0:12:20.280 --> 0:12:23.560 going to go to you know, zero point one? 0:12:24.000 --> 0:12:27.400 You know, I think right now the CEOs that those 0:12:27.440 --> 0:12:30.880 banks are kind of sussing out exactly what they're gonna 0:12:30.920 --> 0:12:33.199 have to do because you. 0:12:33.160 --> 0:12:35.040 Know, for one thing that the one big. 0:12:34.840 --> 0:12:39.520 Competition for banks is money market mutual funds. Right because 0:12:39.520 --> 0:12:42.439 they're they invest in short term securities, they're able to 0:12:42.480 --> 0:12:45.319 be much more nimbler in raising and lowering rates. 0:12:45.480 --> 0:12:46.120 As need be. 0:12:46.760 --> 0:12:49.480 You know, uh, JP Morgan's got money market funds most 0:12:49.520 --> 0:12:52.600 of your big banks have these, So if they're leaving 0:12:52.720 --> 0:12:54.880 deposits on one side of the business, but they're going 0:12:54.920 --> 0:12:57.679 into the the other side, it's not as acute of 0:12:57.720 --> 0:13:01.680 an issue as your smaller traditional bank that really needs 0:13:01.720 --> 0:13:03.560 that traditional savings. 0:13:03.080 --> 0:13:03.559 To posit it. 0:13:03.720 --> 0:13:06.120 So, you know, I think I think the pressure is 0:13:06.160 --> 0:13:10.360 going to be much greater on the more simpler, uh 0:13:10.600 --> 0:13:13.840 you know right, borrow, borrow low, and lend high type 0:13:13.880 --> 0:13:17.400 of banks then the more diversified sort of financial supermarket banks. 0:13:17.480 --> 0:13:19.719 Although you know, we did see that headline on the 0:13:19.720 --> 0:13:22.440 Blueberg money market funds have the biggest weekly outflow since 0:13:22.480 --> 0:13:25.880 twenty twenty from the Investment Company Institute. So yeah, no, 0:13:26.000 --> 0:13:28.080 but I mean banks maybe getting squeezed. You know what 0:13:28.120 --> 0:13:29.880 I really want to know, Mike, did you pose for 0:13:29.960 --> 0:13:32.600 the cover story at that stroll? 0:13:32.679 --> 0:13:38.040 I think you didn't recognize the as it's not mine us. 0:13:37.640 --> 0:13:40.760 Going through a men's health phase cover design. 0:13:40.880 --> 0:13:44.960 There there were many versions of that cover that existed 0:13:45.000 --> 0:13:46.880 before we got to that one, and I'm just so 0:13:46.960 --> 0:13:49.520 glad that it became weirder than where we were because 0:13:49.520 --> 0:13:51.000 it was pretty weird, and then it got. 0:13:51.040 --> 0:13:53.520 Even Weirderam, Like, what is it? 0:13:53.600 --> 0:13:53.880 Text? 0:13:54.520 --> 0:13:57.080 You just don't. Sometimes there's just questions that you don't 0:13:57.080 --> 0:13:58.000 want to know the answer to it. 0:13:58.160 --> 0:14:04.040 But uh skipped right from Men's Health Inspiration to Crack magazine. 0:14:04.400 --> 0:14:07.080 So the Business Week After Dark podcast. Catch it on 0:14:07.120 --> 0:14:07.840 your podcast. 0:14:08.120 --> 0:14:10.280 You look too closely at the apps, it just gets 0:14:10.360 --> 0:14:11.959 your life gets really weird, really quickly. 0:14:12.200 --> 0:14:12.760 Oh my god. 0:14:12.960 --> 0:14:15.480 It all right, all right, guys, thank you so much. 0:14:15.920 --> 0:14:18.439 It is the domestic cover story Bloomberg Business Week, which 0:14:18.520 --> 0:14:21.000 is add on newsstands, online at Bloomberg dot com, Slash 0:14:21.040 --> 0:14:23.440 BusinessWeek and of course on the Bloomberg Mike Reigan, thank 0:14:23.480 --> 0:14:25.800 you so much. Senior editor, lead blogger for the Bloomberg 0:14:25.880 --> 0:14:28.800 Markets Live blog on zoom from New Jersey. Joe Webber, 0:14:28.840 --> 0:14:30.600 of course, the editor Bloomberg Business Week. Are you really 0:14:30.640 --> 0:14:32.200 on some kind of health wellness figs? 0:14:33.080 --> 0:14:37.960 Uh sure, sure, I mean I work out. I'm intermittent 0:14:38.000 --> 0:14:39.880 fasting sometimes, you know, it's all true. 0:14:40.200 --> 0:14:44.040 Fasting, a little fasting. All right, You are listening and 0:14:44.080 --> 0:14:45.480 watching Bloomberg Business Week. 0:14:46.080 --> 0:14:49.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:14:49.680 --> 0:14:52.400 live weekdays from two to five pm Eastern. 0:14:52.240 --> 0:14:55.600 On Bloomberg Radio, the Bloomberg Business app, and you too. 0:14:55.840 --> 0:14:58.880 You can also listen live to our flagship New York station, 0:14:59.440 --> 0:15:04.440 Just say Alexa, play Bloomberg eleven thirty, Oh. 0:15:04.400 --> 0:15:08.080 My ladies, Pop Yo, bets with it, Pop. 0:15:09.440 --> 0:15:10.680 Poply sap. 0:15:11.360 --> 0:15:13.120 All right, everybody. We've just been talking a little bit 0:15:13.120 --> 0:15:15.840 about the markets and some of the stocks on the move, 0:15:15.960 --> 0:15:19.240 and once again we're seeing shares of WW International rally 0:15:19.520 --> 0:15:21.680 another eleven and a half percent as we speak, up 0:15:21.720 --> 0:15:24.080 more than twenty two percent earlier in this session. But 0:15:24.160 --> 0:15:27.000 keep in mind, this is a stock that has almost 0:15:27.080 --> 0:15:30.240 doubled in the week alone, all largely on the news 0:15:30.240 --> 0:15:32.440 of the company's plan and then this week closing of 0:15:32.480 --> 0:15:35.360 its acquisition of a telehealth provider that will help it 0:15:35.400 --> 0:15:37.960 access the growing market for new OBCD drugs. 0:15:38.000 --> 0:15:38.480 We knew we. 0:15:38.440 --> 0:15:40.600 Wanted to hear more, so we wanted to go straight 0:15:40.600 --> 0:15:43.280 to the source. Joining us is the CEO of WW, 0:15:43.600 --> 0:15:46.960 Sima Sistani. She is co founder and a former CEO 0:15:47.160 --> 0:15:49.880 of also the social platform House Party, took off during 0:15:49.880 --> 0:15:53.760 the pandemic. She was also a senior leader at Epic Games. Sima, 0:15:53.840 --> 0:15:55.760 it is so nice to have you here with us. 0:15:56.120 --> 0:15:57.920 Great to be talking with you. How are you. 0:15:59.120 --> 0:16:01.800 I'm great, Thank you. It's nice to be here too. 0:16:02.200 --> 0:16:04.320 There's a lot going on, a lot of conversations and 0:16:04.360 --> 0:16:06.800 certainly within the analyst community and even in our newsroom 0:16:06.840 --> 0:16:09.560 about what you are doing at the company. Stock, as 0:16:09.560 --> 0:16:11.440 we said, has been on a tear. You completed the 0:16:11.480 --> 0:16:15.840 acquisition of Sequence, the telehealth provider. It sounds like you 0:16:15.880 --> 0:16:19.000 are getting into the weight loss drug business. Why why 0:16:19.040 --> 0:16:19.360 are you? 0:16:22.000 --> 0:16:24.760 Look, we're in the midst of an evolving landscape and 0:16:24.880 --> 0:16:29.560 how the medical community and many consumers view obesity and 0:16:29.760 --> 0:16:34.320 overweight I believe that the zeitgeist is changing and more 0:16:34.360 --> 0:16:39.000 people are now recognizing obesity as a chronic condition, understanding 0:16:39.000 --> 0:16:44.240 its causes, including not just behavior but also biology, and 0:16:44.520 --> 0:16:49.560 there's an increasing openness to clinical interventions to help. And 0:16:49.880 --> 0:16:53.840 we have a next generation of medications that is really 0:16:53.920 --> 0:16:57.760 game changing. And so when I joined over a year ago, 0:16:58.520 --> 0:17:02.720 I guess just over or ago we were talking about yes, 0:17:02.800 --> 0:17:06.440 thank you, thank you. We started talking about the possibility 0:17:07.080 --> 0:17:12.679 of building or buying around new modalities, and it was 0:17:12.840 --> 0:17:16.080 clear that these medications were going to be a paradigm 0:17:16.080 --> 0:17:18.000 shift in our industry. So it was really a no 0:17:18.080 --> 0:17:20.479 brainer to enter the space. 0:17:20.760 --> 0:17:22.640 So I guess what we're all wondering then, is what's 0:17:22.680 --> 0:17:25.800 the relationship between the weight Watcher's core businesses We've all 0:17:25.840 --> 0:17:29.560 known it, and then the telemedicine medicine company excuse me 0:17:29.800 --> 0:17:32.399 that you're acquiring. Is it a case of thinking about 0:17:32.560 --> 0:17:37.200 current WW members getting into our getting onto weight loss drugs, 0:17:37.280 --> 0:17:40.280 or that the telemedicine company ultimately will help you attract 0:17:40.320 --> 0:17:42.840 more WW customers. How does it kind of work or 0:17:42.840 --> 0:17:44.640 how do you see it working out or both? 0:17:44.680 --> 0:17:48.280 Perhaps yes, So let me take a step back. When 0:17:48.359 --> 0:17:51.560 we evaluated the space, we looked at over thirty different 0:17:51.680 --> 0:17:56.160 startups and it's mostly startups that are in this landscape, 0:17:56.520 --> 0:18:00.240 and we landed on Sequence because they have built a 0:18:00.320 --> 0:18:03.920 tech stack better than anyone else. This is these these 0:18:03.960 --> 0:18:08.919 medications are really expensive and Sequence had built out a 0:18:08.960 --> 0:18:13.800 pre authorization engine, so essentially putting the insurance process on 0:18:13.880 --> 0:18:17.480 tech rails, and we thought that that was unique and 0:18:18.000 --> 0:18:21.920 great IP and would allow us the ability to scale. 0:18:23.000 --> 0:18:27.400 In addition to that, they have a really delightful user experience. 0:18:28.200 --> 0:18:31.760 The you know, it is a subscription business where you're 0:18:31.840 --> 0:18:36.680 essentially signing up for the care team model. These are 0:18:37.040 --> 0:18:41.960 complicated medications. It's not like getting an D script where 0:18:42.000 --> 0:18:45.399 you can just you know, take a pill and close 0:18:45.440 --> 0:18:48.520 your eyes. You have to tie trace the dosage along 0:18:48.600 --> 0:18:51.040 your weight loss journey. And there's a lot of different 0:18:51.040 --> 0:18:53.960 symptoms to manage, and so Sequence has a care team model. 0:18:54.000 --> 0:18:57.240 It's like having you know, the clinician, fitness and structure 0:18:57.240 --> 0:18:59.840 and nutritionists all in your pocket like in a whatapp. 0:19:00.040 --> 0:19:03.680 And then on the other side is the clinician platform, 0:19:04.480 --> 0:19:07.800 which had a really high MPs and UH in in 0:19:08.000 --> 0:19:11.280 the ability for clinicians to feel that they have the 0:19:11.359 --> 0:19:15.359 appropriate tool to help the members. So between that and 0:19:15.400 --> 0:19:18.439 the right sort of values and alignment, we thought, okay, 0:19:18.600 --> 0:19:21.320 this is a business that it will help us achieve 0:19:21.400 --> 0:19:25.160 our overall mission, which you know, at our mission is 0:19:25.320 --> 0:19:30.000 to we are currently the global leader and weight loss management. 0:19:30.040 --> 0:19:32.359 We want to continue to be that and connect people 0:19:32.440 --> 0:19:35.960 through healthy habits no matter which pathway they choose, whether 0:19:36.000 --> 0:19:39.720 it's through behavior change, whether it's through clinical and potentially 0:19:39.760 --> 0:19:44.680 functional as well, and and our and and so therefore 0:19:45.240 --> 0:19:48.800 you know, the Sequence was Sequence was a great uh 0:19:49.480 --> 0:19:52.080 match for us to be able to provide our members, 0:19:52.320 --> 0:19:55.280 uh you know, and and new members any option along 0:19:55.320 --> 0:19:57.919 the way. But I think the biggest clarification in this 0:19:58.080 --> 0:20:01.160 is I've heard a lot of this in ovation about oh, 0:20:01.200 --> 0:20:03.280 this is a pivot, but that's not it. This is 0:20:03.320 --> 0:20:08.440 an and these medications are all delivered alongside a behavior 0:20:08.480 --> 0:20:09.200 change program. 0:20:09.400 --> 0:20:11.479 Well, Sima, I just want to pick up on that 0:20:11.520 --> 0:20:14.240 because it's such an important point and I hate to interrupt, 0:20:14.320 --> 0:20:17.560 but I am curious about you talk about the importance 0:20:17.560 --> 0:20:19.840 of this not being viewed as a pivot. But as 0:20:19.880 --> 0:20:22.520 you I'm sure incredibly familiar, there is a bit of 0:20:22.560 --> 0:20:26.159 a controversy around ozebic, So I'm curious if you can 0:20:26.200 --> 0:20:29.320 share with us and our listeners, what is your criteria 0:20:29.440 --> 0:20:32.000 around prescribing it, Because there are a lot of people 0:20:32.000 --> 0:20:34.800 who might fit the BMI minimum, but they may not 0:20:34.960 --> 0:20:38.399 have the underlying health conditions as well, So what is 0:20:38.440 --> 0:20:41.040 your definition of who should be taking it? 0:20:41.119 --> 0:20:44.960 Yeah, thank you for that question. So, going back to 0:20:45.119 --> 0:20:48.639 the sequence being the right values and alignment, you need 0:20:48.680 --> 0:20:53.119 to prescribe these medications only when medically appropriate, which means 0:20:53.119 --> 0:20:55.800 that you have a BMI of twenty seven or hire 0:20:55.960 --> 0:21:00.520 with a rate related condition or BMI of thirty or higher, 0:21:00.560 --> 0:21:02.600 and even in that case, there might be other reasons 0:21:02.600 --> 0:21:07.600 why it's not medically appropriate. And if the clinician who 0:21:07.640 --> 0:21:09.800 we do not employ by the way, I think that 0:21:09.800 --> 0:21:12.800 it's important for us to have that separation if we 0:21:12.800 --> 0:21:16.600 don't make any money money on the prescription itself, if 0:21:16.640 --> 0:21:20.120 the clinician determines it is medically appropriate, that's where our 0:21:20.200 --> 0:21:24.919 subscription model comes into play, where we actually provide the 0:21:24.960 --> 0:21:28.679 support system in addition to trying to help the member 0:21:28.720 --> 0:21:31.520 get the medication ensured. 0:21:31.880 --> 0:21:32.359 So see me. 0:21:32.760 --> 0:21:34.720 I know you mentioned you don't make money off of it, 0:21:34.800 --> 0:21:38.040 but when you're thinking about your customer base as a CEO, 0:21:38.560 --> 0:21:41.720 are you thinking that the majority of the new customers 0:21:41.760 --> 0:21:43.720 you're going to get off of this deal are going 0:21:43.800 --> 0:21:47.600 to be people who are interested specifically in ozembic. 0:21:49.160 --> 0:21:49.360 No. 0:21:49.440 --> 0:21:53.920 I think that they come first of all, there's a 0:21:53.960 --> 0:21:59.720 wide range of medications that are are that are in 0:22:00.200 --> 0:22:03.600 the space. The only one right ones right now that 0:22:03.680 --> 0:22:07.120 are actually on label for weight loss is with gob 0:22:07.240 --> 0:22:11.600 and fixendas. There are some generics as well, they're just 0:22:11.640 --> 0:22:14.359 not the GLP ones that people are speaking to. And 0:22:14.400 --> 0:22:18.680 then obviously ozempic off label, where when again the clinician 0:22:18.720 --> 0:22:22.679 has deemed it appropriate. I think that people are looking 0:22:22.720 --> 0:22:26.760 for clinical intervention and the benefit of the combination with 0:22:26.800 --> 0:22:30.360 weight watchers is when it is not medically appropriate, then 0:22:30.560 --> 0:22:34.280 we have a way to push those members to weight Watchers, 0:22:34.320 --> 0:22:37.119 and vice versa. If somebody is coming to weight Watchers, 0:22:37.920 --> 0:22:42.040 is above the BMI threshold and is interested in a 0:22:42.119 --> 0:22:44.800 medical intervention, then we can point them to Sequence. 0:22:45.359 --> 0:22:47.600 So what do you think it does ultimately to you know, 0:22:47.680 --> 0:22:50.080 you know, a metric, A key metric for your company 0:22:50.080 --> 0:22:53.280 has always been the subscriber base, which has been you know, 0:22:53.440 --> 0:22:55.439 shrinking in recent years. We did see a pop certainly 0:22:55.480 --> 0:22:58.680 online during the pandemic, but the in person meetings right 0:22:58.680 --> 0:23:00.920 have also come down. What do you think this collaboration 0:23:01.000 --> 0:23:04.960 is acquisition will do in terms of that subscriber base. 0:23:05.000 --> 0:23:06.800 Do you have any thoughts in terms of projections there. 0:23:09.160 --> 0:23:11.280 Well, I can't speak to that today. We'll report our 0:23:11.320 --> 0:23:14.000 Q one results in early May. I can say that 0:23:14.080 --> 0:23:16.639 on March sixth earnings call we said we expected to 0:23:16.720 --> 0:23:19.040 end Q one with four million subscribers. 0:23:19.240 --> 0:23:21.440 Okay, but I would assume, I know, you can't maybe 0:23:21.440 --> 0:23:23.159 talk about you would assume that you're going to be 0:23:23.160 --> 0:23:28.320 able to tap into, you know, the acquisition in terms 0:23:28.359 --> 0:23:30.960 of its access, and that it will grow your subscriber base. 0:23:32.240 --> 0:23:35.480 Well, I think that part of the reason that you know, 0:23:35.520 --> 0:23:40.719 we think that this acquisition made sense is around the 0:23:40.720 --> 0:23:44.919 the CAC efficiencies that we can achieve. The sequence business 0:23:45.000 --> 0:23:48.920 when we acquired it had twenty four thousand active members 0:23:49.000 --> 0:23:52.919 and that was without any paid marketing. So you could 0:23:53.160 --> 0:23:57.800 imagine that there is a real opportunity when a business 0:23:57.920 --> 0:24:00.359 like ours is investing a lot in paid mark getting 0:24:00.359 --> 0:24:06.639 to basically to create at CAx efficiencies. Also, we have 0:24:06.720 --> 0:24:10.399 a B to B side of our business where we 0:24:10.440 --> 0:24:15.320 are partnering with employers to provide weight watchers, and so 0:24:15.359 --> 0:24:18.800 there are ways for us to help increase access around 0:24:18.840 --> 0:24:20.480 these medications, certainly. 0:24:20.440 --> 0:24:22.600 And I appreciate that. And the reason I ask is 0:24:22.640 --> 0:24:24.879 there's a lot of analysts writing about it, talking about, 0:24:25.040 --> 0:24:28.800 you know, how much your subscriber base could could increase 0:24:29.119 --> 0:24:31.400 or as a result of this, now that there's maybe 0:24:31.440 --> 0:24:33.119 six million or eleven million, Like I'm hearing a lot 0:24:33.119 --> 0:24:34.560 of numbers out there, so just trying to get a 0:24:34.560 --> 0:24:35.919 feel I am. 0:24:36.119 --> 0:24:38.919 I mean, it's still a very small population who is 0:24:38.920 --> 0:24:41.600 actually able to access and I think that's a bigger 0:24:41.640 --> 0:24:45.280 conversation that we need to be having, and that's the 0:24:45.320 --> 0:24:51.080 sort of the clickbait nature of these medications has unlocked 0:24:51.280 --> 0:24:56.480 an opportunity for us to have the important conversation, which 0:24:56.520 --> 0:24:59.800 is around chronic weight management treatments for people living with obesity. 0:25:00.240 --> 0:25:03.600 And there's a lot of stigma still associated with these 0:25:03.680 --> 0:25:07.399 as quote unquote weight loss drugs, and we're losing the 0:25:08.640 --> 0:25:14.800 underlined critical importance that these are medications for people living 0:25:14.840 --> 0:25:16.200 with a chronic disease. 0:25:16.720 --> 0:25:19.199 Well to your point on that, Seema, I know that 0:25:19.240 --> 0:25:21.440 you're also familiar with the fact that there are shortages 0:25:21.480 --> 0:25:26.120 of ozembic, specifically for people with diabetes who are using it. 0:25:26.200 --> 0:25:29.600 Can you talk a little bit about your thinking around, 0:25:30.320 --> 0:25:33.840 you know, promoting ozembic given that we are dealing with 0:25:33.880 --> 0:25:35.040 those shortages as well. 0:25:35.480 --> 0:25:38.800 So there are a couple of things. One is that 0:25:38.880 --> 0:25:41.720 the nova Ortis has come out and said that there 0:25:41.760 --> 0:25:46.400 are no longer any supply chain issues with ozembic. Secondly, 0:25:46.520 --> 0:25:50.800 is we're not promoting ozembic. We are promoting access to 0:25:50.840 --> 0:25:56.119 a clinical intervention. Now what the clinician actually prescribes is 0:25:56.840 --> 0:25:59.720 a different question, but I think even in that question 0:26:00.640 --> 0:26:03.159 lies a little bit of the concern of are we 0:26:03.280 --> 0:26:07.040 pitting people with diabetes versus people who are living with 0:26:07.080 --> 0:26:10.359 overweight and overweight and obesity and would we be saying 0:26:10.359 --> 0:26:12.919 the same thing if these were medications for people with 0:26:13.040 --> 0:26:17.160 cancer or for people with heart disease, because guess what, 0:26:17.320 --> 0:26:19.680 obesity is the leading cause of both of those things. 0:26:19.720 --> 0:26:23.720 So I think that that's that's the conversation, is to 0:26:23.880 --> 0:26:29.760 really have us level up right how we perceive overweight 0:26:29.800 --> 0:26:31.280 and obesity in our society. 0:26:31.359 --> 0:26:33.280 All Right, We're going to leave it there, seemit. Thank 0:26:33.320 --> 0:26:35.399 you so much. I feel like a very smart interview 0:26:35.440 --> 0:26:36.920 in terms of answering a lot of the questions that 0:26:36.960 --> 0:26:37.800 are out there about this. 0:26:41.520 --> 0:26:45.080 You're listening to the Bloomberg Business Week podcast. Catch us 0:26:45.119 --> 0:26:47.960 live weekdays from two to five pm Eastern. 0:26:47.680 --> 0:26:51.080 On Bloomberg Radio, the Bloomberg Business app, and YouTube. 0:26:51.280 --> 0:26:54.320 You can also listen live to our flagship New York station, 0:26:54.880 --> 0:26:58.120 Just Say Alexa, play Bloomberg eleven thirty. 0:26:59.320 --> 0:27:01.720 And that's no. He's in for Tim Stanvic along with 0:27:01.840 --> 0:27:04.439 Carol Masser. Let's turn to the lead feature in this 0:27:04.480 --> 0:27:07.879 week's issue of Bloomberg Business Week. Also a recent Bloomberg 0:27:08.000 --> 0:27:11.080 Big Take, a heart wrenching look at TikTok and it's 0:27:11.200 --> 0:27:14.040 ongoing trust and seeming safety issues. 0:27:14.119 --> 0:27:15.920 In the third part of her series on the super 0:27:15.960 --> 0:27:20.400 popular social media app Bloomberg investigative reporter Olivia carvill looks 0:27:20.400 --> 0:27:23.359 at how its algorithm has led some teenagers down rabbit 0:27:23.400 --> 0:27:27.720 holes related to body image, self harm, depression, and even suicide. 0:27:27.880 --> 0:27:30.840 TikTok says it's making improvements as it now faces a 0:27:30.880 --> 0:27:34.679 flood of lawsuits after multiple user deaths. Olivia joins us 0:27:34.680 --> 0:27:38.040 now with more another incredible piece of reporting by you. 0:27:38.200 --> 0:27:41.639 So take us through the individual and the family that 0:27:41.680 --> 0:27:42.920 you look at and what happened. 0:27:43.480 --> 0:27:47.240 This story was focused on the death of a sixteen 0:27:47.280 --> 0:27:50.040 year old boy. His name was Chase Nesca and he 0:27:50.080 --> 0:27:53.680 grew up in Long Island and a small hamlet called Bayport. 0:27:54.240 --> 0:27:57.000 And he, or at least his parents felt like he 0:27:57.040 --> 0:28:01.359 had no history of mental illness. He was very successful 0:28:01.560 --> 0:28:05.040 in schooling. He was excelling academically. He was a high 0:28:05.080 --> 0:28:09.520 honors student. He was also excelling athletically. He was in 0:28:09.680 --> 0:28:13.960 three different soccer teams, playing for the Olympic Prep development team, 0:28:14.320 --> 0:28:17.080 his high school team, swimming for his high school. So 0:28:17.200 --> 0:28:20.280 he was showing signs of you know, success even at 0:28:20.280 --> 0:28:22.880 the young age of sixteen, and he had a big 0:28:22.920 --> 0:28:26.240 group of friends. Wasn't involved in drugs or alcohol, but 0:28:26.680 --> 0:28:30.400 in February of twenty twenty two. He took his own 0:28:30.440 --> 0:28:35.200 life and his family, his friends, his soccer coach, his teachers, 0:28:35.240 --> 0:28:37.399 a lot of them I spoke to, and the word 0:28:37.560 --> 0:28:41.040 that I heard over and over again was blindsided. They 0:28:41.040 --> 0:28:44.040 had no idea how or why this had happened. They 0:28:44.320 --> 0:28:48.360 felt like Chase hadn't shown any signs that he was struggling. 0:28:49.040 --> 0:28:52.280 And his mum, she was looking for answers. She didn't 0:28:52.400 --> 0:28:55.720 understand what had gone wrong, and so when she got 0:28:55.720 --> 0:28:58.360 his cell phone back from the police and she realized 0:28:58.400 --> 0:29:00.520 that it still she could turn it on. You know, 0:29:00.600 --> 0:29:03.040 she struggled to gain access to the account because it 0:29:03.080 --> 0:29:05.640 had a pass code on it. So she spent two 0:29:05.640 --> 0:29:08.560 weeks just trying to open up some of his social 0:29:08.600 --> 0:29:11.320 media accounts, just because she was looking for a clue 0:29:11.560 --> 0:29:14.760 what had happened to her son. What couldn't she see 0:29:15.080 --> 0:29:17.640 And when she was finally able to gain access to 0:29:17.680 --> 0:29:21.440 his TikTok account, what she found was a barrage of 0:29:22.000 --> 0:29:29.880 videos that promoted and glorified depression, anxiety, unrequited love, and suicide. 0:29:30.360 --> 0:29:33.480 I've seen some of these videos and they are heartbreaking 0:29:33.560 --> 0:29:37.400 to watch. It's not just the caption that says death 0:29:37.520 --> 0:29:40.840 is a gift or the perfect ending, or take the 0:29:40.880 --> 0:29:44.160 pain away, or I want to die. It is the 0:29:44.280 --> 0:29:47.840 sad music overlaid with the image as well can be 0:29:48.000 --> 0:29:51.480 really hard to watch them. And so when she opened 0:29:51.520 --> 0:29:54.719 his TikTok account, she saw what he had seen, and 0:29:54.760 --> 0:29:57.880 she also saw what the algorithm was continuing to push 0:29:57.960 --> 0:30:01.400 his account, which was a steady stre of depression, anxiety, 0:30:01.440 --> 0:30:04.560 and suicide content. And that is still happening to this day. 0:30:04.600 --> 0:30:05.720 So what did that make you want to do? 0:30:06.080 --> 0:30:06.240 Well? 0:30:06.240 --> 0:30:08.960 When I started out reporting this story, as you mentioned 0:30:08.960 --> 0:30:11.280 earlier as the third part of a series on TikTok, 0:30:11.320 --> 0:30:14.280 I've been focused on child safety on the app, and 0:30:14.320 --> 0:30:17.720 what I've heard throughout the year I've spent researching this 0:30:17.840 --> 0:30:22.160 company is concerns about the algorithm, the fact that we 0:30:22.240 --> 0:30:25.520 don't understand how it works, and a billion people around 0:30:25.520 --> 0:30:29.240 the world use this platform, including kids, and there's a 0:30:29.280 --> 0:30:33.480 lot of concern externally about a lack of transparency around 0:30:33.800 --> 0:30:37.240 what drives the algorithm, what power is it? And what 0:30:37.280 --> 0:30:40.040 I wanted to understand is what happens inside the company, 0:30:40.400 --> 0:30:45.040 how to internal TikTok employees feel about this recommendation engine, 0:30:45.280 --> 0:30:47.959 and what I came to learn is that that secrecy 0:30:48.880 --> 0:30:53.320 runs deep internally, even inside the company. The people who 0:30:53.320 --> 0:30:57.680 are working to protect kids online, the Trust and Safety 0:30:57.720 --> 0:31:01.520 team that's sole responsibility is to try and keep children 0:31:01.600 --> 0:31:05.200 and users of the product safe, even they don't understand 0:31:05.200 --> 0:31:06.520 how the algorithm works. 0:31:07.160 --> 0:31:10.760 And going back to originally what happened with Chas, do 0:31:10.800 --> 0:31:14.680 we have an understanding of how the algorithm for him 0:31:14.840 --> 0:31:16.040 came to be what it. 0:31:16.080 --> 0:31:19.000 Was because he's not here and he can't tell us that. 0:31:19.600 --> 0:31:23.200 I haven't been able to understand why his account turned 0:31:23.280 --> 0:31:26.720 so dark or so sad. But it was through twenty 0:31:26.920 --> 0:31:29.560 twenty one that his friends, they said that he had 0:31:29.600 --> 0:31:33.960 been sending them all kind of funny videos, sports related videos, 0:31:34.040 --> 0:31:37.200 joking videos, and then towards the end of that year, 0:31:37.640 --> 0:31:40.520 some of the content he was sending them was sad. 0:31:40.760 --> 0:31:45.240 It was depression related, anxiety related, and they didn't understand why. 0:31:45.760 --> 0:31:49.480 But I did talk to some young people who experienced 0:31:49.480 --> 0:31:53.360 a similar situation with eating disordered content who were able 0:31:53.400 --> 0:31:56.520 to tell me their experience of using the product. And 0:31:56.880 --> 0:32:00.880 these were two teenage girls who both had a strikingly 0:32:01.040 --> 0:32:05.400 similar situation where they started using TikTok and they would 0:32:05.400 --> 0:32:10.640 watch sports videos, cheerleading dance videos. They noticed that what 0:32:10.680 --> 0:32:14.600 they were seen started to change slightly. It became healthy 0:32:14.680 --> 0:32:17.920 recipes or EBB workouts, and then it turned into how 0:32:17.920 --> 0:32:20.160 to make your legs look skinnier, how to eat less 0:32:20.200 --> 0:32:23.320 calories in a day. And those two girls both told 0:32:23.360 --> 0:32:27.440 me independently in different interviews, I didn't search for this stuff. 0:32:27.560 --> 0:32:29.160 It just all of a sudden appeared. 0:32:29.280 --> 0:32:31.640 What I want to do is shift gears into how 0:32:31.680 --> 0:32:35.160 this happens. What the company says, is it a case 0:32:35.360 --> 0:32:38.360 of and the employees or the former employees of TikTok 0:32:38.360 --> 0:32:41.120 that you talked to, who wanted who knew something wasn't 0:32:41.200 --> 0:32:44.760 quite right, and they couldn't even get answers internally. So 0:32:45.120 --> 0:32:47.040 what is it that we got on that side of things? 0:32:47.240 --> 0:32:49.440 Yeah? Sure, And it is important to point out that 0:32:49.560 --> 0:32:53.160 suicide is complex. Nowhere in the story am I saying 0:32:53.200 --> 0:32:56.600 that TikTok is to blame. There's a difference between causation 0:32:56.800 --> 0:32:59.440 and correlation. So what I was able to find is 0:32:59.720 --> 0:33:02.760 what Chase saw before he died, and some of those 0:33:02.880 --> 0:33:07.880 videos included the specific method he used to die. What 0:33:08.000 --> 0:33:10.640 the company said is they've been working on this issue 0:33:10.640 --> 0:33:13.720 for years back in twenty twenty one, they pushed out 0:33:13.720 --> 0:33:16.080 a press release saying they were going to try and 0:33:16.200 --> 0:33:20.640 stop repetitive streams of videos about sad content, whether that's 0:33:20.640 --> 0:33:24.720 eating disordered content, depression content, suicide content. They were going 0:33:24.800 --> 0:33:27.520 to break that up and try and create a more 0:33:27.560 --> 0:33:31.680 diverse experience for the viewer. And I asked them, what's 0:33:31.720 --> 0:33:35.280 happened since you haven't sent out any updates since you 0:33:35.400 --> 0:33:37.880 said you were working on this two years ago, And 0:33:38.000 --> 0:33:40.400 they did push out a press release before we published 0:33:40.440 --> 0:33:43.040 it came out in March sixteenth, saying that they had 0:33:43.080 --> 0:33:46.920 made fifteen system updates over the past year to try 0:33:46.960 --> 0:33:50.040 and make the algorithm safer, to try and break up 0:33:50.320 --> 0:33:54.280 those steady streams of content. But what Chase NASCAR's account 0:33:54.360 --> 0:33:58.080 shows is in some cases it hasn't worked. And I 0:33:58.160 --> 0:34:00.000 wanted to understand why. 0:34:00.080 --> 0:34:02.040 Did you feel like, since you've been reporting this out 0:34:02.080 --> 0:34:04.280 for a long time and doing the investigative work, do 0:34:04.320 --> 0:34:06.880 you feel like what you're getting from the company is 0:34:06.920 --> 0:34:09.759 sufficient based on also than the conversations you're having with 0:34:09.800 --> 0:34:13.839 former TikTok employees about their own internal struggles to kind 0:34:13.840 --> 0:34:16.719 of understand this algorithm, especially when they saw things that 0:34:16.960 --> 0:34:17.840 maybe were a mess. 0:34:18.280 --> 0:34:20.840 I feel like there's a disconnect between what I'm hearing 0:34:20.840 --> 0:34:24.360 from the company's communications team and what I'm hearing from 0:34:24.640 --> 0:34:27.800 former employees and insiders who worked on trust and safety. 0:34:28.239 --> 0:34:31.120 I will say that trust and safety is a huge 0:34:31.160 --> 0:34:34.800 department at TikTok. They have forty thousand people working there, 0:34:35.160 --> 0:34:38.359 and it's likely that some teams or departments feel frustrated 0:34:39.280 --> 0:34:42.400 at certain times. We need to remember that this company 0:34:42.440 --> 0:34:46.759 has exploded into popularity. It was created in twenty seventeen. 0:34:47.200 --> 0:34:50.279 It hit the world stage in twenty eighteen. We're five 0:34:50.360 --> 0:34:53.280 years on from that and a billion people use the platform. 0:34:53.280 --> 0:34:57.080 But in China things are limited, so things can be 0:34:57.200 --> 0:34:58.000 done right. 0:34:58.360 --> 0:35:00.719 Well, in China, it's a different app app it's called 0:35:00.760 --> 0:35:01.719 dou Yin, and. 0:35:01.800 --> 0:35:04.799 Could they apply some of the same principles to the 0:35:04.840 --> 0:35:06.200 app in the US well. 0:35:06.200 --> 0:35:09.000 I asked that question of the trust and safety insiders, 0:35:09.200 --> 0:35:12.560 and TikTok CEO was hammered on this point during the 0:35:12.560 --> 0:35:15.960 congressional hearing. Why is it that the app you serve 0:35:16.120 --> 0:35:19.560 to people in China called dou Yin. It's also owned 0:35:19.560 --> 0:35:22.520 by Byteedance, It's a sister product at TikTok, and I 0:35:22.600 --> 0:35:25.400 understand that they share some of the same source code. 0:35:25.600 --> 0:35:29.440 Why does that app send content about museum exhibitions or 0:35:29.480 --> 0:35:32.600 science experiments and it has a limit of kids are 0:35:32.600 --> 0:35:34.759 only allowed to be on it for forty minutes a day. 0:35:35.000 --> 0:35:37.480 Why do you send the spinach version of the app 0:35:37.560 --> 0:35:40.600 to kids in China? And you know, the fentanyl version 0:35:40.600 --> 0:35:42.560 of the app to people in the US, which is 0:35:42.560 --> 0:35:46.359 what some lawmakers have described TikTok as. And you know 0:35:46.640 --> 0:35:48.520 what I heard from the company is that these are 0:35:48.560 --> 0:35:53.040 different apps serving different communities or serving different countries, and 0:35:53.080 --> 0:35:57.279 they are governed by different regulatory issues and policies. And 0:35:57.320 --> 0:36:00.080 I will say that even the trust and safety insiders 0:36:00.120 --> 0:36:03.360 I talked to did feel like the dou yin version 0:36:03.400 --> 0:36:05.719 of the app would not work in America because it 0:36:05.760 --> 0:36:08.200 would be a censored version of the app, and kids 0:36:08.200 --> 0:36:10.680 wouldn't think it was cool. No one would use it 0:36:10.719 --> 0:36:13.719 if you just sent kind of steam related, you know, 0:36:13.960 --> 0:36:15.080 educational content. 0:36:15.280 --> 0:36:17.960 Hence the debate that's out there. So appreciate all the 0:36:18.000 --> 0:36:19.879 reporting you doing this. It makes us smarter and makes 0:36:19.960 --> 0:36:22.080 us figure out kind of where we need to be 0:36:22.160 --> 0:36:23.800 when it comes to social media, which is such a 0:36:23.800 --> 0:36:26.759 big part of our world. Oliver, Thank you so appreciate it. 0:36:26.880 --> 0:36:29.600 Bloomberg News investigative reporter Olivia Carville. 0:36:29.880 --> 0:36:33.440 You're listening to the Bloomberg Business Week podcast. Catch us 0:36:33.480 --> 0:36:37.080 live weekdays from two to five pm Easter on Bloomberg Radio, 0:36:37.360 --> 0:36:40.240 the Bloomberg Business App, and you too. You can also 0:36:40.320 --> 0:36:43.640 listen live to our flagship New York station, Just say 0:36:43.760 --> 0:36:46.160 Alexa play Bloomberg eleven thirty. 0:36:47.360 --> 0:36:50.000 So you know, all of you been listening and watching 0:36:50.000 --> 0:36:52.200 throughout the week. We've had a focus in honor of 0:36:52.239 --> 0:36:54.400 birthday that is this Saturday. All this week we've been 0:36:54.440 --> 0:36:58.520 tapping into our climate, talking about sustainable food production and agriculture, 0:36:58.920 --> 0:37:02.040 eliminating food and as a result, helping to reduce the 0:37:02.080 --> 0:37:05.360 massive negative contribution that ag and food waste make to 0:37:05.480 --> 0:37:09.839 climate change waste generally. You know, Maddie, it is a 0:37:09.880 --> 0:37:12.279 big risk to our planet. We all make a lot 0:37:12.280 --> 0:37:14.359 of garbage and it's just really hurting us. 0:37:14.520 --> 0:37:16.520 No, it's so true, and I think there's a lot 0:37:16.560 --> 0:37:21.040 of misconceptions about recycling, and the Recycling Partnership has some 0:37:21.120 --> 0:37:23.640 thoughts on how we can all be better stewards of 0:37:23.719 --> 0:37:26.160 our planet. So here to tell us all about it 0:37:26.200 --> 0:37:29.720 is the CEO of the Recycling Partnership Keith Harrison joining 0:37:29.800 --> 0:37:32.719 us in our Bloomberg Interactive Broker's studio. Thank you so 0:37:32.880 --> 0:37:35.279 much for coming in person to sit with us. 0:37:35.400 --> 0:37:37.640 It's great to be here today, loving this. 0:37:37.960 --> 0:37:38.640 How are you doing. 0:37:38.920 --> 0:37:41.120 Oh, it's been a beautiful day in New York City. 0:37:41.160 --> 0:37:43.279 I've been walking all around glad to be here. 0:37:43.800 --> 0:37:46.360 Well, we were so excited to have you in person 0:37:46.440 --> 0:37:49.920 with us. Give us like the top line here, recycling 0:37:50.920 --> 0:37:51.520 does it work? 0:37:52.400 --> 0:37:55.640 So worthy effort, also worth the effort of improving it. 0:37:56.160 --> 0:37:59.160 Recycling Partnership is a nonprofit and I built us nine 0:37:59.239 --> 0:38:02.040 years ago because I knew we needed a better option. 0:38:02.160 --> 0:38:04.000 We needed a better system in the US, and that's 0:38:04.000 --> 0:38:04.520 what we're after. 0:38:04.640 --> 0:38:07.160 We'll go backwards because I remember growing up in our 0:38:07.160 --> 0:38:09.200 grade school, we did paper drives all the time and 0:38:09.560 --> 0:38:12.080 my family we you know, stored our papers, tied them 0:38:12.120 --> 0:38:13.720 up and brought them in, you know, a huge station 0:38:13.800 --> 0:38:18.200 wagon full of papers. What is it that hasn't been working? 0:38:18.200 --> 0:38:19.800 Because we've been doing this for a long time. We 0:38:19.840 --> 0:38:22.640 all have offices where we separate out garbage. Go to 0:38:22.640 --> 0:38:25.960 different states and they separate things multiple ways depending on 0:38:25.960 --> 0:38:30.080 the state that you live in. What hasn't been happening. 0:38:30.120 --> 0:38:31.840 So take us back there and give us kind of 0:38:31.840 --> 0:38:33.200 a snippet of what's going on. 0:38:33.480 --> 0:38:36.680 We all learned about recycling in third grade. We understood 0:38:36.680 --> 0:38:38.680 that it was good for the planet, good to do, 0:38:38.880 --> 0:38:41.719 put your bottle, your can in the bin, take your 0:38:41.719 --> 0:38:44.800 papers back for the drive. So why are we still 0:38:44.920 --> 0:38:49.120 talking about this? Well, I have a quiz for you. You're ready, Yeah, 0:38:49.239 --> 0:38:52.920 I'm ready. How many recycling programs are there in the US? 0:38:53.960 --> 0:38:55.440 Oh my god, I have no idea? 0:38:55.560 --> 0:39:00.080 Tons nine thousand different recycling programs. So when you're like, 0:39:00.120 --> 0:39:02.960 why can I recycle that here but not there? What happens? 0:39:03.520 --> 0:39:06.560 Why is that nine thousand? Now? I bet a lot 0:39:06.560 --> 0:39:09.799 of people listening to this story think about supply chains, 0:39:09.840 --> 0:39:13.279 thinks about business. If we pull back and we understand, like, 0:39:13.360 --> 0:39:17.279 what is recycling? At its core? It's a feedstock for manufacturing. 0:39:17.840 --> 0:39:22.839 What feeds feedstock starts at nine thousand different points. That 0:39:23.040 --> 0:39:26.600 is a really tricky supply chain. So when we ask 0:39:26.600 --> 0:39:29.960 ourselves why isn't recycling working like we want, we have 0:39:30.040 --> 0:39:31.799 to ask have we really built it? Or has it 0:39:31.920 --> 0:39:35.560 organically grown? Answer is a second right, it's grown over time? 0:39:35.680 --> 0:39:37.359 Is it basically because states could do what they want, 0:39:37.400 --> 0:39:38.439 cities could do what they want. 0:39:38.560 --> 0:39:40.960 Is it just as simple as nine thousand different do 0:39:41.040 --> 0:39:44.040 what you want? And that's the way that we work, right. 0:39:44.120 --> 0:39:46.720 Communities are different. We travel from one place to another, 0:39:46.840 --> 0:39:49.880 and some do some things better than others. And we've 0:39:49.880 --> 0:39:53.080 put recycling on the backs of communities. And I think 0:39:53.120 --> 0:39:55.560 it's time to ask should they be paying for that? 0:39:55.800 --> 0:39:58.040 Is that their job? We all want it to just 0:39:58.160 --> 0:40:01.680 work better. So would make it work better? Well, there's 0:40:01.719 --> 0:40:03.919 an important role for policy to play here. 0:40:04.160 --> 0:40:06.600 So what would be the dream if you got to be, 0:40:06.840 --> 0:40:08.080 you know, the president tomorrow? 0:40:08.200 --> 0:40:09.080 What would it look like? 0:40:09.239 --> 0:40:12.120 I have written that down. I think about that a lot. 0:40:12.200 --> 0:40:14.799 So what does good recycling look like? It means a 0:40:14.800 --> 0:40:18.120 couple of things. One everyone can. Right now, forty million 0:40:18.160 --> 0:40:21.640 American families cannot equitably recycle. They have to drive it, 0:40:21.640 --> 0:40:23.319 they have to pay more, They just can't do it 0:40:23.400 --> 0:40:28.760 that forty million households. So one everyone can. Two everyone does. 0:40:28.880 --> 0:40:30.920 And they know what to put in. They trust it. 0:40:31.239 --> 0:40:33.960 They know what to do with those yogurt cups, those boxes. 0:40:34.200 --> 0:40:34.800 They understand. 0:40:35.000 --> 0:40:36.880 We don't. I still don't know whether I'm supposed to 0:40:36.960 --> 0:40:40.480 rinse them out. I still do and you feel stressed 0:40:40.480 --> 0:40:43.520 out about it, right, I'm really serious, Like I'm like, oh, 0:40:43.520 --> 0:40:45.479 this isn't going to be recycled, so like you know. 0:40:45.440 --> 0:40:48.160 But so so in the future everyone can everyone does 0:40:48.239 --> 0:40:51.120 because you know, clean and dry in the bin. Don't 0:40:51.200 --> 0:40:53.600 overstress about it and what goes in. That's the goal 0:40:53.640 --> 0:40:55.479 of what we're working towards. But we're not there yet. 0:40:55.640 --> 0:40:58.319 We can go deepch what is your question in the 0:40:58.640 --> 0:40:59.680 but lean and the dry. 0:41:00.160 --> 0:41:03.759 Does everything that should that is divided up, that is 0:41:03.800 --> 0:41:07.359 clean and dried in the bin? Does it actually get recycled? 0:41:07.760 --> 0:41:09.680 That's the big question And I think that's on the 0:41:09.719 --> 0:41:12.800 mind of public. Can I trust that this is worth 0:41:12.880 --> 0:41:13.400 my effort? 0:41:13.760 --> 0:41:15.399 And can I ask you? Can I just tell you why? 0:41:15.440 --> 0:41:21.360 Because our kitchilll and team wrote a Bloomberg BusinessWeek's story 0:41:21.680 --> 0:41:24.320 I think it was last month. It tracked a plastic 0:41:24.360 --> 0:41:29.000 bag's two thousand mile journey across season continents quote revealing 0:41:29.040 --> 0:41:32.480 another world of contractors, brokers and exporters and a messy 0:41:32.520 --> 0:41:35.560 reality that looks like a less like a virtuous cycle 0:41:35.600 --> 0:41:37.479 and more like passing the buck. Those were the words 0:41:37.480 --> 0:41:40.759 of our Kitchell who wrote this story. It was incredible 0:41:41.400 --> 0:41:44.440 so it didn't go where we all thought it was 0:41:44.480 --> 0:41:44.959 going to go. 0:41:45.000 --> 0:41:47.960 And in that case, it did not go as smoothly 0:41:47.960 --> 0:41:50.239 as anyone would want it to go. Is that the ideal? No, 0:41:50.440 --> 0:41:53.200 So in the system that we design, everyone can, everyone does, 0:41:53.280 --> 0:41:55.759 and we know the fate that you can trust that 0:41:55.800 --> 0:41:58.720 it turns into something new. So for every one story 0:41:58.760 --> 0:42:01.520 of things not going well like that, there are a 0:42:01.640 --> 0:42:04.560 zillion stories of things going well. Yogurt cups turning into 0:42:04.600 --> 0:42:09.479 car parts, cans turning into more cans, plastic bottles turning 0:42:09.520 --> 0:42:12.560 into carpet. But the public, here's one story about that, 0:42:12.640 --> 0:42:16.040 and they think, WHOA, I've been tricked. And everyone is 0:42:16.120 --> 0:42:18.640 so careful, you know, has their ear open for a 0:42:18.680 --> 0:42:21.399 trick right now. So it's a scary time. So why 0:42:21.440 --> 0:42:25.319 did that bag turn out that way? I think it's 0:42:25.320 --> 0:42:29.080 because we don't have a system. We have this loosely connected, 0:42:29.400 --> 0:42:33.160 highly dependent network that we think of as one thing recycling, 0:42:33.880 --> 0:42:36.719 but it's actually a whole bunch of stuff. Now, the 0:42:36.760 --> 0:42:39.040 fact that it left the US to go get recycled 0:42:39.040 --> 0:42:42.960 somewhere is that innately bad. No, not at the not necessarily. 0:42:43.000 --> 0:42:46.520 There's lots of recyclables imported and exported just like there 0:42:46.560 --> 0:42:50.840 are purses imported and exported everything, So recyclables function like 0:42:50.880 --> 0:42:54.480 that too. But do we need more oversight into how 0:42:54.560 --> 0:42:57.640 things are designed for recycling, how the systems are run, 0:42:57.680 --> 0:43:00.760 and who pays for them? One hundred percent? That's policy 0:43:01.680 --> 0:43:02.600 and that policy. 0:43:02.960 --> 0:43:04.839 Is that something that you would hope for at the 0:43:04.880 --> 0:43:08.640 federal level or where do you expect to see that shift? 0:43:09.160 --> 0:43:11.560 Well, right now we're seeing it at the state level. 0:43:11.640 --> 0:43:15.960 Four states, California and Colorado, Oregon, and Maine have passed 0:43:16.040 --> 0:43:20.839 extended even bigger extended producer responsibility. And so what that 0:43:20.960 --> 0:43:23.920 means if you're a producer a company that makes packaging, 0:43:24.560 --> 0:43:27.279 you are responsible for putting money into a kitty that 0:43:27.360 --> 0:43:30.200 makes sure that the system in that state can take it. 0:43:30.680 --> 0:43:33.920 And there's variable fees, so if it's designed for cyclability, 0:43:33.920 --> 0:43:36.279 you pay less. If it's not, you pay more. But 0:43:36.440 --> 0:43:40.359 what it's doing is shifting the economics to say, one 0:43:40.400 --> 0:43:42.840 we need a better system, two we need a stuff 0:43:42.880 --> 0:43:45.680 designed for that system, and the economics of it need 0:43:45.719 --> 0:43:50.160 to deliver the returns both for the planet and our pockets. 0:43:50.440 --> 0:43:52.320 Keith, I want to ask you, Oh, I'm sorry. 0:43:52.320 --> 0:43:55.080 No, it's it sounds like the pain that is on 0:43:55.360 --> 0:43:56.840 the company, not the consumer. 0:43:57.320 --> 0:44:00.400 Right shifting. We're shifting that. We're saying company, it's not 0:44:00.480 --> 0:44:03.840 just enough to design it to be recycled. Company, we 0:44:03.920 --> 0:44:05.759 need you to be there to make sure that it 0:44:05.880 --> 0:44:08.680 actually happens and putting. 0:44:08.440 --> 0:44:11.160 How do we do that though as a company. 0:44:11.280 --> 0:44:14.040 Well, it's through a network. This is why I think 0:44:14.080 --> 0:44:17.440 the Recycling Partnership is pretty interesting. So we're a nonprofit 0:44:17.640 --> 0:44:20.400 and we're funded almost entirely by corporate entities, and a 0:44:20.440 --> 0:44:22.480 lot of times you could say, wait a minute, then 0:44:22.520 --> 0:44:25.120 who's calling the shots here? But I think we need 0:44:25.120 --> 0:44:29.480 more nonprofits like the Recycling Partnership because we were designed 0:44:29.480 --> 0:44:32.560 to insist and assist. Now, what does that mean? When 0:44:32.560 --> 0:44:35.600 a company makes a pledge to recycle more, we say, great, 0:44:35.880 --> 0:44:39.120 we want to help you do that, but we don't 0:44:39.280 --> 0:44:42.319 we know that that's not your subject matter expertise, that's 0:44:42.360 --> 0:44:44.160 our So we're going to insist you get there and 0:44:44.160 --> 0:44:46.200 we're going to assist help you do it. We bring 0:44:46.239 --> 0:44:49.480 in subject matter experts. So I think you need transparency, 0:44:49.520 --> 0:44:52.400 you need data, you need open books to really see 0:44:52.400 --> 0:44:55.240 that the material is going where it should be going 0:44:55.480 --> 0:44:56.480 in the recycling system. 0:44:56.480 --> 0:44:58.719 Do you feel like and we're talking with Keith Harrison, 0:44:59.000 --> 0:45:01.319 CEO of the Recycling Partnership here in studio. We've got 0:45:01.320 --> 0:45:02.960 about a minute then we'll come back and talk some more. 0:45:02.960 --> 0:45:06.319 But I do wonder you know ESG certainly under the 0:45:06.360 --> 0:45:08.959 microscope and for good reasons, as we try to really 0:45:09.120 --> 0:45:12.319 create more transparency. Are we moving? Is there a will 0:45:12.360 --> 0:45:15.399 to move towards greater transparency when it comes to things 0:45:15.440 --> 0:45:18.200 like recycling, whether what a company is doing, and really 0:45:18.239 --> 0:45:21.760 the impact of understanding versus just you should be recycled. 0:45:21.800 --> 0:45:23.880 We create products that can be recycled, but you know, 0:45:23.920 --> 0:45:27.160 once it leaves, you know, a company or manufacturer, it's 0:45:27.320 --> 0:45:28.080 out of their hands. 0:45:28.360 --> 0:45:28.520 Right. 0:45:28.600 --> 0:45:31.680 I think that that call for transparency is across the board, 0:45:31.719 --> 0:45:34.160 and it's not just how is a product design, but 0:45:34.280 --> 0:45:36.680 what's the system there? And how do you follow Just 0:45:36.680 --> 0:45:39.160 like you said earlier that they follow those plastic bags, 0:45:39.320 --> 0:45:41.319 how do we follow it all the way through and 0:45:41.360 --> 0:45:44.600 make sure what we intend to happen happens. And that's 0:45:44.600 --> 0:45:48.160 how you present prevent greenwashing. But that's also critical to 0:45:48.719 --> 0:45:51.640 a healthy system, which is what we want. Recycling will 0:45:51.680 --> 0:45:54.440 protect the natural resources. We all need this to happen. 0:45:54.800 --> 0:45:58.240 But it's calling out for better controls and better oversight. 0:45:58.400 --> 0:46:02.640 But your groceries keyth they in those reusable bags that 0:46:02.680 --> 0:46:04.880 are supposed to be great for our environment. But we 0:46:04.880 --> 0:46:07.840 were saying, I am personally drowning in these reusable bags. 0:46:07.840 --> 0:46:11.640 I know that's an incredibly privileged, privileged position to be in, 0:46:11.719 --> 0:46:13.080 but what do I do? 0:46:13.840 --> 0:46:16.080 Right? So I think this is the very nature of 0:46:16.400 --> 0:46:19.520 this conversation. Right, people want to do the right thing, 0:46:19.800 --> 0:46:21.680 but it's pretty easy to say, I don't want to 0:46:21.760 --> 0:46:24.160 choose the plastic container, so I'm going to choose paper. 0:46:24.200 --> 0:46:26.120 I don't want to use the single use bag, I mean, 0:46:26.200 --> 0:46:29.600 use a cloth one. But then the sticks actually get 0:46:29.680 --> 0:46:32.479 higher when you get up up the chain on heavy 0:46:32.560 --> 0:46:35.719 duty materials, and so the responsibility of making sure that 0:46:35.760 --> 0:46:38.880 you do something is there with those reusable grocery bags. 0:46:39.000 --> 0:46:41.879 I would have to look for a donation place for that, 0:46:41.920 --> 0:46:42.560 but I think them. 0:46:43.200 --> 0:46:45.560 So I guess the question is like, have we exchanged 0:46:45.680 --> 0:46:48.040 a bad problem for a even bigger problems? 0:46:48.040 --> 0:46:52.000 I think we have, And it's all rooted in the 0:46:52.200 --> 0:46:53.840 we want to buy our way out of this or 0:46:53.920 --> 0:46:56.759 we need We're not We're looking for the quick fix, 0:46:56.800 --> 0:47:00.719 when really what our society relies on is convenience and 0:47:00.880 --> 0:47:03.839 serving busy people. Every person listening to this show right 0:47:03.880 --> 0:47:06.600 now has a million things going on between their company, 0:47:06.680 --> 0:47:09.880 their family, their next steps, and they don't need to 0:47:09.920 --> 0:47:12.560 be spending time worrying about do I need to rinse 0:47:12.600 --> 0:47:14.440 my peanut butter container or do I just put it 0:47:14.440 --> 0:47:17.480 in the bin. And that's why that's why the recycling 0:47:17.520 --> 0:47:20.560 Partnership exists, is we're trying to pull together the public 0:47:20.600 --> 0:47:23.600 and the private sectors and overhaul this whole system so 0:47:23.960 --> 0:47:26.479 this public doesn't have to think about recycling all the time. 0:47:26.719 --> 0:47:29.120 The system exists. The system exists, so you can just 0:47:29.160 --> 0:47:31.760 recycle without thinking. And here's how you get here. Okay, 0:47:31.840 --> 0:47:34.960 one you pass legislation that you change is the economics, 0:47:35.040 --> 0:47:39.239 that communities aren't carrying the bill carrying this on their backs, 0:47:39.239 --> 0:47:42.080 that they're not paying for this, that the economics are 0:47:42.200 --> 0:47:44.319 paid for by the same companies that are producing it. 0:47:44.840 --> 0:47:48.520 Make that whole system better organized to make sure that 0:47:48.560 --> 0:47:51.640 what's designed for recycling is recovered. So we're going to 0:47:51.760 --> 0:47:53.520 not just hope for the best, but we're going to 0:47:53.600 --> 0:47:55.240 make sure that it's designed and recovered. 0:47:55.239 --> 0:47:55.479 There. 0:47:55.680 --> 0:47:58.640 Now, we did a report. We answered this question, what 0:47:59.000 --> 0:48:02.080 would it take to fix the US recycling system. Now, 0:48:02.080 --> 0:48:04.960 how do I define that? Can people recycle? Do people 0:48:04.960 --> 0:48:08.839 will recycle? And is the infrastructure there? The price tig 0:48:09.320 --> 0:48:14.160 seventeen billion dollars. What we can find seventeen billion dollars 0:48:14.200 --> 0:48:18.319 And here's the deal, thirty billion dollar return, A thirty 0:48:18.360 --> 0:48:22.359 billion dollar return in resource conservation and US jobs. I 0:48:22.360 --> 0:48:25.040 think that's an investment we can't afford not to make. 0:48:25.440 --> 0:48:28.040 And you know what, we could do it in five 0:48:28.160 --> 0:48:31.160 years and talk about something else. What would you like 0:48:31.200 --> 0:48:31.759 to talk about? 0:48:31.840 --> 0:48:36.280 Well, what I'm curious is would you go to Washington 0:48:36.400 --> 0:48:38.879 or talk to somebody in Washington? Is there any will 0:48:38.960 --> 0:48:42.319 to do something like this? It's not expensive, but I'm 0:48:42.360 --> 0:48:42.920 just curious. 0:48:43.000 --> 0:48:45.520 So I've worked in recycling for twenty five years. I 0:48:46.840 --> 0:48:49.080 ran a recycling program. I worked for the State of 0:48:49.120 --> 0:48:53.040 North Carolina doing grants. I was a contractor with Boozellen 0:48:53.080 --> 0:48:55.920 working on EPA stuff. So I've worked all across the 0:48:55.960 --> 0:48:59.719 different sectors. And what I found is that everyone wants 0:48:59.719 --> 0:49:02.439 to say outcome, just make it work, but everyone wants 0:49:02.480 --> 0:49:04.799 it for a different reason. And so we need a 0:49:04.840 --> 0:49:08.040 marriage counselor like someone who's saying, this is what our 0:49:08.080 --> 0:49:11.200 words mean and for the first time though in this 0:49:11.320 --> 0:49:13.799 twenty five years of working on this, it's only been 0:49:13.840 --> 0:49:17.120 the last two three years that federal policy makers have 0:49:17.200 --> 0:49:19.719 been saying, Hey, what's my role in it? And I 0:49:19.760 --> 0:49:22.840 think that's great. So there is a huge role for 0:49:22.920 --> 0:49:26.960 federal policy because, as I said before, break four states 0:49:26.960 --> 0:49:31.320 have passed state level policy. But that's a hodgepodge approach 0:49:31.440 --> 0:49:34.319 that's better than the nine thousand different programs we have now. 0:49:34.600 --> 0:49:37.279 But think about what happens if we have one one 0:49:37.320 --> 0:49:40.160 where things are designed for system, things are recovered, and 0:49:40.280 --> 0:49:44.440 we get to address things like equitable access the environmental 0:49:44.520 --> 0:49:47.640 justice component of equal services. 0:49:47.320 --> 0:49:50.839 So is the marriage counselor potentially the EPA and or 0:49:50.880 --> 0:49:55.040 the SEC. So you kind of dealing with publicly traded 0:49:55.040 --> 0:49:57.399 companies that there's a component that they're measured on, which 0:49:57.440 --> 0:50:00.439 is something we talk a lot about, and it comes 0:50:00.480 --> 0:50:03.000 to environmental impact and kind of doing it right, and 0:50:03.040 --> 0:50:05.800 recycling certainly could be a big part of it, probably should, 0:50:06.120 --> 0:50:08.000 And then the EPA, I don't know, like, how do 0:50:08.080 --> 0:50:09.640 you see it that it plays out. 0:50:09.840 --> 0:50:11.800 I think there's a there's probably a lot of marriage 0:50:11.840 --> 0:50:15.520 counselors here, the recycling partnership as a nonprofit is one 0:50:15.560 --> 0:50:19.040 that pulls together the public and the private sector, big company, 0:50:19.040 --> 0:50:24.120 small companies, every human in this country. But I think 0:50:24.160 --> 0:50:26.319 there is a role for regulation, there is a role 0:50:26.360 --> 0:50:29.160 for standards. I'm really interested in data. How do we 0:50:29.239 --> 0:50:34.200 measure progress, transparency for the flow of material. You know, 0:50:34.640 --> 0:50:38.160 I'm keeping an eye on the UN Global Plastics Treaty. 0:50:38.280 --> 0:50:41.440 That's going to be a legally binding instrument to align 0:50:41.600 --> 0:50:44.279 for some common standards. I think that if I was 0:50:44.360 --> 0:50:47.040 running a company that made stuff, I'd have my eye 0:50:47.080 --> 0:50:49.839 on that because it's gonna have what is that? So, 0:50:49.880 --> 0:50:53.680 the UN Global Plastics Treaty. I'm headed to Paris next 0:50:53.719 --> 0:50:55.759 month for the second I in C so that the 0:50:55.880 --> 0:51:02.320 International Negotiating Committee of this globally binding plat plastic pollution 0:51:02.520 --> 0:51:05.640 reduction instrument. And what that means is we can't just 0:51:05.719 --> 0:51:08.239 keep trying to solve things here and there. We need 0:51:08.280 --> 0:51:12.920 to have a common approach across countries. And so will 0:51:13.040 --> 0:51:16.080 the UN have something that's really his teeth in it. 0:51:16.160 --> 0:51:20.319 That's yet to be seen. But what is happening is 0:51:20.360 --> 0:51:23.719 that companies are paying attention of do I want to 0:51:23.760 --> 0:51:26.160 wait to be told what to do? Or do I 0:51:26.239 --> 0:51:29.040 want to do that now, and that's the questions we get. 0:51:29.120 --> 0:51:33.280 So we work with nearly one hundred major global companies 0:51:33.640 --> 0:51:36.359 that either make stuff we use every day or sell 0:51:36.400 --> 0:51:39.640 stuff we use every day, and they are aligning on 0:51:39.719 --> 0:51:40.480 common goals. 0:51:40.600 --> 0:51:43.440 What are they doing? What is the biggest the change 0:51:43.480 --> 0:51:44.279 you're seeing that make? 0:51:44.680 --> 0:51:48.440 So the biggest change is that they're understanding it's not 0:51:48.520 --> 0:51:51.480 just what they do inside their four walls, but what 0:51:51.520 --> 0:51:55.560 they do outside of their four walls, meaning what happens 0:51:55.600 --> 0:51:58.160 to the bags inside your apartment, or what happens with 0:51:58.239 --> 0:52:02.520 your paper that your family makes that it has somewhere 0:52:02.520 --> 0:52:05.680 to go. So the biggest shift I see is our 0:52:05.800 --> 0:52:07.759 companies who are saying, Okay, I need to make sure 0:52:07.840 --> 0:52:11.480 that the infrastructure is there, otherwise my goals will not 0:52:11.560 --> 0:52:14.080 be met, not because I didn't design something, but because 0:52:14.800 --> 0:52:18.160 those forty million American families just can't do it. If 0:52:18.160 --> 0:52:20.880 we can't do it, then don't tell the public to 0:52:20.960 --> 0:52:21.880 do it. Right? 0:52:22.000 --> 0:52:23.840 Is it going to mean ultimately we continue kind of 0:52:23.840 --> 0:52:26.480 doing what we're doing, but just amp it up and 0:52:26.640 --> 0:52:29.960 maybe there's more divisions of plastic glass. I don't know. 0:52:30.080 --> 0:52:31.839 And then there is a place and just got about 0:52:31.840 --> 0:52:33.319 thirty seconds I'm just trying to well. 0:52:33.400 --> 0:52:35.600 So out of ESD, you know, the thing that worries 0:52:35.640 --> 0:52:38.200 me most out of ESG is just this hot pot 0:52:38.360 --> 0:52:41.120 of opportunities where people are throwing money at, you know, 0:52:41.400 --> 0:52:43.920 venture ideas here and there that don't ladder up to 0:52:43.960 --> 0:52:45.920 system change. I think we have to stop and pause, 0:52:46.320 --> 0:52:49.280 use things like federal policy and the und Global Plastic 0:52:49.280 --> 0:52:53.040 Streaty to create consistency and shine a light on measurable 0:52:53.080 --> 0:52:55.040 transparent parency for change. 0:52:56.239 --> 0:52:58.839 Can we do like biggest mistake consumers make? 0:52:58.920 --> 0:53:05.280 Oh quick, right, I'm ready? Oh well, I think let's 0:53:05.280 --> 0:53:07.759 do some real fast so pizza boxes. Put them in 0:53:08.040 --> 0:53:12.719 caps on bottles, leave them on. I clean and dry 0:53:12.800 --> 0:53:14.480 on your materials, but you don't have to run them 0:53:14.480 --> 0:53:18.200 through the dishwasher. And the number one thing is, if 0:53:18.200 --> 0:53:20.920 you're in New York City, you use bags to recycle 0:53:21.200 --> 0:53:24.560 outside your apartment, but in most places in the country, 0:53:25.239 --> 0:53:28.920 don't bag your recyclables inside your cart. Leave them loose. 0:53:29.480 --> 0:53:32.080 That's the best way to make sure that those all 0:53:32.160 --> 0:53:34.879 those beautiful recyclables get turned into something else. 0:53:35.000 --> 0:53:36.840 Just throw them in a can and just empty. 0:53:37.040 --> 0:53:39.319 Just throw them in your recycling bin, your recycling cart, 0:53:39.440 --> 0:53:40.120 keep them empty. 0:53:40.440 --> 0:53:44.200 Really cool stuff thank you, come back after Paris Harrison, 0:53:44.320 --> 0:53:45.880 CEO of the Recycling Partnership. 0:53:45.920 --> 0:53:53.279 Here in studio, you're listening to the Bloomberg Business Week Podcast. 0:53:53.520 --> 0:53:56.520 Catch us live weekdays from two to five pm Easter. 0:53:56.560 --> 0:53:59.799 On Bloomberg Radio, the Bloomberg Business App, and you too. 0:54:00.160 --> 0:54:02.919 You can also listen live to our flagship New York 0:54:02.960 --> 0:54:10.200 station Just Say Alexa, Play Bloomberg e Love and thirty Soles. 0:54:10.440 --> 0:54:12.719 Wait, Joe spar you. 0:54:14.480 --> 0:54:17.839 Spa spa too? 0:54:19.760 --> 0:54:21.759 All right, it is the game that was designed to 0:54:21.800 --> 0:54:25.880 be random chaos, elegantly rendered in circular motion. We are 0:54:25.920 --> 0:54:29.319 talking about Roulette, and even so it's the game that 0:54:29.560 --> 0:54:31.680 you're supposedly not being able to win. But even so, 0:54:31.719 --> 0:54:34.760 gamblers have come up with plenty of elaborate mathematical systems 0:54:34.760 --> 0:54:37.360 to beat it, thanks to a journey that includes a mathematician, 0:54:37.560 --> 0:54:41.120 a gambling pioneer, an MIT professor, dreams of a utopian 0:54:41.120 --> 0:54:44.719 community of hippie investors funded by gambling profits, and so 0:54:45.120 --> 0:54:45.799 much more. 0:54:45.880 --> 0:54:45.960 So. 0:54:46.040 --> 0:54:49.320 Let's get to the current cover story of Bloomberg Business 0:54:49.320 --> 0:54:52.439 Week and with us as Kitchillel, Bloomberg BusinessWeek Senior writer, 0:54:52.600 --> 0:54:55.480 with us on zoom from London and also with us 0:54:55.520 --> 0:54:57.960 the editor of Bloomberg Business Week, Jill Weber. He's here 0:54:58.000 --> 0:54:59.920 in our Bloomberg Interactive Broker studio. 0:55:00.239 --> 0:55:00.399 Jill. 0:55:00.480 --> 0:55:02.560 I feel like this is once again a story, a 0:55:02.600 --> 0:55:05.239 cover story. Everyone in the newsroom seems to be talking 0:55:05.239 --> 0:55:06.719 about it. My husband's like, hey, did you see this 0:55:06.760 --> 0:55:08.959 cool story from war Work business Week. I'm like, yeah, 0:55:09.040 --> 0:55:11.080 I know, it's about Roulette. 0:55:11.840 --> 0:55:16.120 Yeah, And you know, there are some games out there 0:55:16.160 --> 0:55:20.000 that I think are just, you know, renowned at being 0:55:20.239 --> 0:55:23.520 good ways to lose money. And so I think there 0:55:23.600 --> 0:55:29.680 is a universal appeal to stories about Roulette, and also 0:55:29.880 --> 0:55:34.880 a universal peal whenever someone you know may have beaten Roulette. 0:55:35.000 --> 0:55:38.239 And so when Kit kind of surfaced and said that 0:55:38.280 --> 0:55:40.759 he was interested in this space and had found a 0:55:40.840 --> 0:55:44.680 character that deserved a narrative, I said, Okay, tell me, 0:55:44.840 --> 0:55:47.319 tell me more, tell me more. And that let him 0:55:47.360 --> 0:55:50.399 down a little bit of a rabbit hole. And when 0:55:50.960 --> 0:55:53.960 he came out of the rabbit hole, he had maybe 0:55:54.120 --> 0:55:56.879 one of the most memorable stories that I published in 0:55:57.120 --> 0:56:03.080 my career. And I'm curious to hear again from you kid. 0:56:03.239 --> 0:56:05.280 Where did that story begin? 0:56:07.200 --> 0:56:09.919 Hey, Joel, So I heard a few years ago from 0:56:09.960 --> 0:56:14.040 another professional gambler, that it was possible, at least in theory, 0:56:14.640 --> 0:56:17.279 to beat roulette, but it was a bit of a 0:56:17.320 --> 0:56:20.800 struggle to find clear examples of that happening, especially of 0:56:20.880 --> 0:56:23.799 people making money beating roulette. And so I did a 0:56:23.840 --> 0:56:27.360 troll through old newspaper reports and I came across this 0:56:27.640 --> 0:56:32.680 two decade old article in the British newspapers about a 0:56:32.760 --> 0:56:37.040 gang of guys from the Balkans, from Serbia Montenegro who 0:56:37.040 --> 0:56:40.880 had used a laser to take one point three million 0:56:41.040 --> 0:56:44.640 pounds in roulette games playing at the Ritz casino in London. 0:56:45.440 --> 0:56:47.960 It didn't have their names or any other details really. 0:56:48.120 --> 0:56:49.759 But as soon as I saw it, I kind of 0:56:49.840 --> 0:56:51.840 I had to know more about it, and so that 0:56:51.920 --> 0:56:53.799 set me off on a journey to sort of find 0:56:53.840 --> 0:56:57.200 out exactly who these guys were and how they've done it. 0:56:57.640 --> 0:57:02.680 Okay, how would you go about using a laser in theory, 0:57:02.760 --> 0:57:07.240 because it turns out that maybe that wasn't used well. 0:57:07.360 --> 0:57:08.640 The laser was a red herring. 0:57:08.680 --> 0:57:10.800 It was a sort of a mistake that the British 0:57:10.840 --> 0:57:13.360 police made at the time because they didn't know what 0:57:13.400 --> 0:57:15.640 they were looking at. Because very few people do know 0:57:15.640 --> 0:57:18.720 the secrets of how to beat roulette, but the secret 0:57:18.800 --> 0:57:22.680 of really long term success in the game is being 0:57:22.680 --> 0:57:26.200 able to make a pretty good prediction about where that 0:57:26.240 --> 0:57:28.520 ball is going to settle. You don't have to get 0:57:28.520 --> 0:57:31.480 it exactly right. You just have to be slightly better 0:57:31.520 --> 0:57:33.240 than average. If you can pick a settler of the 0:57:33.240 --> 0:57:36.000 wheel and it's likely to settle there, you've got a 0:57:36.000 --> 0:57:37.680 good chance of making some money. 0:57:38.080 --> 0:57:39.800 We're only like one minute in Kit. 0:57:39.880 --> 0:57:42.280 You can't give away all the secrets yet as you 0:57:42.600 --> 0:57:45.080 hold off on that, so so just push paths there 0:57:46.160 --> 0:57:51.400 long narrative, gotta delay suspense, Kit, I do want to 0:57:51.800 --> 0:57:55.760 I want to know more about the casino that this 0:57:55.800 --> 0:57:58.480 went down out, Like take us, take us back to 0:57:58.960 --> 0:58:02.080 London's West End and give us a sense of the vibe. 0:58:02.120 --> 0:58:04.080 And you know, the other thing to know here is like, 0:58:04.120 --> 0:58:06.280 you know, in casinos, I typically think of. 0:58:06.240 --> 0:58:07.720 Blackjack as the way to beat the house. 0:58:07.760 --> 0:58:10.880 So like, what is what are how does how does 0:58:10.960 --> 0:58:14.640 roulette rank in terms of what my odds are as 0:58:14.680 --> 0:58:17.560 a normal person walking into you know, take on the house? 0:58:18.440 --> 0:58:22.840 Okay, Well, the London casinos scene is very different to Vegas. 0:58:23.000 --> 0:58:26.520 It's you know, it's high end, extremely high end members. 0:58:26.560 --> 0:58:30.400 Only the normal crowd in a in a London. 0:58:30.200 --> 0:58:33.680 Casino you know of a Saturday evening will include billionaires, 0:58:33.720 --> 0:58:41.480 hedge fund managers, olive archs. It's it's very fancy, but 0:58:41.560 --> 0:58:43.200 the stakes are high as well. You can bet a 0:58:43.240 --> 0:58:44.920 lot of money and with lots of money there and 0:58:44.960 --> 0:58:48.440 not attract too much attention, which is why gamblers like it. 0:58:48.480 --> 0:58:52.520 For the roulette roulette versus blackjack. The house edge in 0:58:52.600 --> 0:58:56.160 blackjack is pretty small, and so is the house edge 0:58:56.200 --> 0:58:59.000 in roulette. Although it seems like a very random game 0:58:59.040 --> 0:59:02.000 that you can have little chance of winning, the advantage 0:59:02.000 --> 0:59:02.680 the house. 0:59:02.440 --> 0:59:05.160 Has over the player is only about two or three percent. 0:59:06.280 --> 0:59:09.120 So, like I say, it's achievable in terms of you know, 0:59:09.120 --> 0:59:10.520 if you want to win some money. 0:59:10.360 --> 0:59:13.800 If you're Nico Tosa, tell us about this individual, then 0:59:13.840 --> 0:59:14.800 you do actually. 0:59:14.560 --> 0:59:17.960 Win some who walked into that you know, high end London, 0:59:18.000 --> 0:59:20.640 West End casino and sort of changed the game. 0:59:20.680 --> 0:59:25.080 What happened, Well, most most gamblers who use these methods 0:59:25.120 --> 0:59:27.680 are terrified of getting caught, so they'll go into a 0:59:27.680 --> 0:59:30.800 casino a better few thousand, win a few thousand, and 0:59:30.840 --> 0:59:34.880 try and leave for anyone notice what they're doing. Nicotosa 0:59:35.040 --> 0:59:37.520 has the opposite approach. He tried to win as much 0:59:37.560 --> 0:59:40.720 money as he possibly can space of time as he can. 0:59:42.960 --> 0:59:43.640 That's his way. 0:59:43.960 --> 0:59:46.920 And so you know, actually from a standing start of 0:59:46.920 --> 0:59:49.400 about two or three thousand pounds, he got to one 0:59:49.400 --> 0:59:52.040 point three million and only a few nights play. So 0:59:52.080 --> 0:59:54.800 of course that attracts attention, but you know, in his 0:59:54.880 --> 0:59:56.280 mind he doesn't mind the attention. 0:59:56.400 --> 0:59:57.520 He's one of the good guys. 0:59:58.200 --> 1:00:00.160 He says, he's not cheating and it's his right go 1:00:00.200 --> 1:00:01.360 and play roulette as he wants. 1:00:01.600 --> 1:00:03.760 So has that spurred other people to use a similar 1:00:03.800 --> 1:00:06.080 type of strategy when you see a number like that. 1:00:06.160 --> 1:00:08.440 As far as how much somebody could be raaking in like. 1:00:08.400 --> 1:00:11.320 That, well, I don't know if that's the case. 1:00:12.320 --> 1:00:14.800 It certainly spurred the casinos to get their act together 1:00:14.880 --> 1:00:18.240 and try and make their wheels a bit less predictable, 1:00:18.640 --> 1:00:22.040 and we saw widespread changes to the design of roulette 1:00:22.040 --> 1:00:27.880 wheels in response to the Nikotosa event. But in terms 1:00:27.920 --> 1:00:30.160 of how many people actually had the knowledge of how 1:00:30.200 --> 1:00:31.800 to do this and were able to pull it off, 1:00:32.080 --> 1:00:33.440 that number was small back then. 1:00:33.480 --> 1:00:34.440 It's still small now. 1:00:35.000 --> 1:00:35.160 Kit. 1:00:35.240 --> 1:00:37.720 What's really cool, though, is and you do go step 1:00:37.720 --> 1:00:39.680 by step. We've all learned so much, but this whole 1:00:39.720 --> 1:00:44.040 idea when you play roulette, like really watching and watching. 1:00:43.760 --> 1:00:46.800 The spin, are you going to go there? Are you 1:00:46.840 --> 1:00:47.479 going to give it away? 1:00:47.520 --> 1:00:55.400 Now with the editor of Business. 1:00:54.680 --> 1:00:56.439 Kit Let's frame it. 1:00:57.200 --> 1:01:03.640 There have been countless matt peticians, physicists, you know, anybody 1:01:03.800 --> 1:01:06.880 who thinks they can crack this, looks at Roulette and 1:01:06.880 --> 1:01:09.640 as like we can crack this. But like Nikotos has 1:01:09.640 --> 1:01:11.920 seemed to have found a different way. So walk us 1:01:11.920 --> 1:01:13.960 through what he found. 1:01:14.480 --> 1:01:16.640 Well, he found, like all the other people who have 1:01:16.720 --> 1:01:20.840 tried this, that roulette is actually more predictable than you imagine. 1:01:20.480 --> 1:01:24.560 It to be. And the people who first made this 1:01:24.720 --> 1:01:30.760 discovery were scientists from MIT and Stanford working in physics laboratories, 1:01:31.200 --> 1:01:33.400 collecting data about the movement of the will and the 1:01:33.400 --> 1:01:34.439 movement of the ball and. 1:01:34.360 --> 1:01:37.920 Calculating gravity and friction. And it took them years to 1:01:37.960 --> 1:01:39.960 work out actually, yes, it was possible to make a 1:01:40.000 --> 1:01:42.600 basic prediction, but none of them managed to make any money. 1:01:42.760 --> 1:01:45.280 That was decades ago, that was back in the nineteen sixties. 1:01:47.080 --> 1:01:51.360 Using roughly the same technique, you know, Nkotosa seems to 1:01:51.440 --> 1:01:53.920 have achieved what almost no one else has done, which 1:01:53.960 --> 1:01:55.480 is turned it into a living in a career, and 1:01:55.520 --> 1:01:58.000 he's made you know, millions upon millions of dollars over 1:01:58.000 --> 1:01:58.720 the years doing this. 1:01:59.400 --> 1:02:03.240 Okay, you, like I said, you went down that rabbit. 1:02:03.040 --> 1:02:08.080 Hole, Mari, where else did this rabbit hole take you? 1:02:08.120 --> 1:02:09.680 Because you did get to talk to some of those 1:02:09.720 --> 1:02:13.919 mathematicians and physicists and and and yet you know, here 1:02:14.000 --> 1:02:16.480 was this guy with none of that background who just 1:02:16.720 --> 1:02:20.160 figured it, figured it out right, and talk to us 1:02:20.160 --> 1:02:21.920 about what that even looked like at the table when 1:02:21.920 --> 1:02:22.600 he plays. 1:02:23.000 --> 1:02:25.040 Okay, I mean, I think the most interesting thing that 1:02:25.120 --> 1:02:28.680 I discovered going down this rabbit hole was, of course, 1:02:28.680 --> 1:02:32.160 these days, most roulette is played online, and that's actually 1:02:32.160 --> 1:02:35.520 handled a big advantage to predictive players because if you 1:02:35.600 --> 1:02:37.560 want to use predictive software, if you want to have 1:02:37.640 --> 1:02:41.200 some program running in the background, your computer watching the screen, 1:02:41.200 --> 1:02:43.840 if you're playing roulette online, there's very little casinos can 1:02:43.840 --> 1:02:46.800 do about it. And there are people doing this right now. 1:02:47.120 --> 1:02:49.520 They'll be playing were playing roulette online and will have 1:02:49.560 --> 1:02:54.400 a program churning away, making incredibly complicated calculations and winning money. 1:02:54.160 --> 1:02:56.600 In real time. That just blew my mind that that's 1:02:56.640 --> 1:02:57.560 possible now. 1:02:57.640 --> 1:03:00.560 Nico Toasta says that his technique is much simpler. He 1:03:00.720 --> 1:03:03.280 just you know, he asked him what his secret was 1:03:03.320 --> 1:03:05.840 and he said one word, practice, And then he showed 1:03:05.840 --> 1:03:07.680 me a picture of the ret world that he keeps 1:03:07.680 --> 1:03:09.760 in his house and he just sits and watches it 1:03:09.800 --> 1:03:11.880 over and over again, thousands and thousands of times. 1:03:12.200 --> 1:03:15.040 Wait, so take us there too, because you tracked him 1:03:15.080 --> 1:03:15.800 down right. 1:03:16.280 --> 1:03:18.840 Yeah, he wasn't easy to find. I mean, professional gamblers, 1:03:19.920 --> 1:03:22.280 they spend a lot of time trying not to be discovered. 1:03:22.320 --> 1:03:25.160 It's very bad for their jobs in the day jobs 1:03:25.520 --> 1:03:26.200 to be well. 1:03:26.120 --> 1:03:29.479 Miss alive, go figure having working fingers. 1:03:29.480 --> 1:03:30.320 Well, the casinos. 1:03:30.320 --> 1:03:33.240 The casinos keep lists of people that you know, they 1:03:33.240 --> 1:03:36.560 call them problem gamblers, but really they're just people who 1:03:36.560 --> 1:03:38.240 can come and make money at their expense, so they 1:03:38.240 --> 1:03:41.040 try very hard to keep them out. So, you know, 1:03:41.080 --> 1:03:42.920 he works, He's worked very hard over the years not 1:03:42.960 --> 1:03:45.720 to attract any attention. So he probably wasn't delighted to 1:03:45.760 --> 1:03:48.240 hear from me. But I did manage to track him 1:03:48.240 --> 1:03:50.960 down to the place that he lives in Croatia, and 1:03:51.000 --> 1:03:53.520 he sort of reluctantly sat with me and we talked. 1:03:53.280 --> 1:03:55.840 Through what he'd done at the Ritz all those years ago. 1:03:56.360 --> 1:03:59.600 Do you buy it that there were no gadgets or anything. 1:04:00.080 --> 1:04:03.320 After you spent six months in you know, investigating this, 1:04:03.400 --> 1:04:05.080 doing this story, talking to lots of people, and then 1:04:05.080 --> 1:04:07.960 talking to him, do you buy it that it was 1:04:08.160 --> 1:04:10.560 just he was really good at making these cars. 1:04:10.760 --> 1:04:13.080 I think I do believe him. 1:04:13.400 --> 1:04:16.600 My reason for that is that even if you've got 1:04:16.600 --> 1:04:19.360 a very small computer and you're very good at hiding it, 1:04:20.640 --> 1:04:24.800 playing for twenty years, getting busted dozens of times, because 1:04:24.840 --> 1:04:27.120 you know, it's all over the world, getting arrested a 1:04:27.120 --> 1:04:32.800 few times, it's very likely that at some point someone will. 1:04:32.640 --> 1:04:34.080 Catch you in the act of the device. 1:04:34.560 --> 1:04:36.480 They'll find it in your shoe or your belt or 1:04:36.520 --> 1:04:39.240 your pocket. And in all the twenty years Nikots has 1:04:39.280 --> 1:04:41.600 been playing, and I know dozens of occasions when he's 1:04:41.600 --> 1:04:45.080 been caught, they've never found anything on him. So for me, 1:04:45.200 --> 1:04:48.440 that's pretty strong, a pretty good indication that he is 1:04:48.480 --> 1:04:52.080 coming the truth or that he's just got an exceptionally 1:04:52.120 --> 1:04:53.440 clever way of hiding his computer. 1:04:53.600 --> 1:04:54.160 One of the two. 1:04:55.560 --> 1:04:58.880 It does make me wonder, kid like you going down 1:04:59.360 --> 1:05:03.600 this rabbit or and I've sent you down some similar 1:05:03.600 --> 1:05:07.120 ones before, all of which are amazing, Like what did 1:05:07.200 --> 1:05:11.960 you learn about Roulette? And Nico like bringing all together. 1:05:12.000 --> 1:05:14.640 What were the things that you know captivated you as 1:05:14.680 --> 1:05:16.120 you worked on this well. 1:05:16.080 --> 1:05:17.880 And the first thing is that you know that you 1:05:17.880 --> 1:05:19.440 can beat a game like roulette. 1:05:19.480 --> 1:05:21.880 You know, I've played roulette like everyone else in casinos, 1:05:21.880 --> 1:05:24.120 and it just looks like the kind of game where 1:05:24.160 --> 1:05:27.640 you can't possibly get an advantage. But there's a certain 1:05:27.720 --> 1:05:31.800 kind of mindset to advantage gamblers who do this for 1:05:31.840 --> 1:05:35.720 a living, and it's kind of like an approach that 1:05:36.800 --> 1:05:39.880 relies on getting a tiny advantage. 1:05:39.440 --> 1:05:41.400 Out of the house and exploiting it over a long 1:05:41.440 --> 1:05:42.120 period of time. 1:05:42.440 --> 1:05:44.680 You know, they don't just go and win one or 1:05:44.680 --> 1:05:48.400 two hands of poker or blackjack. They have to they 1:05:48.440 --> 1:05:50.200 have to get a small edge and then grind it 1:05:50.200 --> 1:05:51.280 out over a period of time. 1:05:51.560 --> 1:05:52.920 So it's a job just like any other. 1:05:53.040 --> 1:05:56.400 It's incredibly difficult and it takes enormous amount of dedication 1:05:56.560 --> 1:05:57.960 skill to make it pay. 1:05:58.280 --> 1:06:01.800 Do all the houses now basically say we're on to 1:06:01.920 --> 1:06:04.400 you or can we all just take charge? 1:06:04.920 --> 1:06:05.680 Yeah? 1:06:05.720 --> 1:06:08.520 Well, you know, a cynical part of me suspects that 1:06:09.280 --> 1:06:13.160 casino businesses won't be terribly upset that the secret about 1:06:13.240 --> 1:06:16.960 roulette is has sort of hit the headlines again, because 1:06:17.200 --> 1:06:19.440 you know, for the one or two or three players 1:06:19.440 --> 1:06:22.720 that actually are capable of beating these games, there are 1:06:22.760 --> 1:06:24.600 going to be one or two hundred more who think 1:06:24.640 --> 1:06:28.280 they can, but actually they can't. There's a there's an 1:06:28.280 --> 1:06:30.600 old quote going back decades of one of the Vegas 1:06:30.640 --> 1:06:33.720 casino owners who says, you know, we welcome system players. 1:06:33.720 --> 1:06:35.720 We roll out our red carpet for them. You know, 1:06:35.960 --> 1:06:38.440 anything that gets people through the door playing roulette, probably 1:06:38.440 --> 1:06:39.760 losing money is fine by them. 1:06:39.840 --> 1:06:45.560 Bloomber business week, good for business. Okay, get on that note. 1:06:45.720 --> 1:06:49.360 How much Roulette was played in researching this article? 1:06:50.800 --> 1:06:52.000 Zero games of roulette? 1:06:52.080 --> 1:06:53.600 Okay, just just watched it. 1:06:54.680 --> 1:06:55.480 I just watched it. 1:06:55.840 --> 1:06:59.040 Not very good at gambling, Yeah, no, neither am I 1:06:59.080 --> 1:07:02.520 You know so from I just think the the allure 1:07:02.560 --> 1:07:03.360 of stuff. 1:07:03.040 --> 1:07:04.280 Like this, it's just there. 1:07:04.600 --> 1:07:08.640 Every once in a while we find stories that deeply 1:07:08.680 --> 1:07:11.280 resonate with people, and like this has been one of them. 1:07:11.320 --> 1:07:13.520 And to see how many people have read it so far, 1:07:14.240 --> 1:07:17.560 the time spent in the article, it's just I'm very 1:07:17.640 --> 1:07:21.000 much drawn to stories like this where there's something that 1:07:21.240 --> 1:07:24.560 we're fascinated by and somebody somewhere out there has spent 1:07:24.640 --> 1:07:25.080 a lot of. 1:07:25.040 --> 1:07:27.280 Time thinking about it, much more than you have. 1:07:27.600 --> 1:07:30.439 Well, I'm gonna be curious, like the gambling institutions around 1:07:30.440 --> 1:07:32.080 the globe like and all of a sudden, Roulette playing 1:07:32.280 --> 1:07:35.400 is up as a result of this kit. Thank you 1:07:35.520 --> 1:07:37.520 so much. We know it's late where you are, and 1:07:37.960 --> 1:07:40.600 so appreciate getting to talk with you directly about it. Kishialel, 1:07:40.960 --> 1:07:43.720 Senior writer at Bloomberg News. Joel is right, like everything 1:07:43.720 --> 1:07:47.240 he does, It's just incredible. On zoom from London and Joel, 1:07:47.280 --> 1:07:49.920 thank you so much. Joell Webber, editor at Bloomberg BusinessWeek. 1:07:49.920 --> 1:07:52.520 Here in our interactive broker studio. It is the cover 1:07:53.000 --> 1:07:55.440 story how to Beat Roulette of the current issue at 1:07:55.480 --> 1:07:58.840 Bloomberg BusinessWeek, Now on newstands, online at Bloomberg dot com, 1:07:58.880 --> 1:08:01.000 slash BusinessWeek, and on the Bloomberg you're. 1:08:00.840 --> 1:08:04.440 Listening to the Bloomberg Business Week Podcast. Catch us live 1:08:04.520 --> 1:08:07.080 weekdays from two to five pm Eastern. 1:08:06.720 --> 1:08:10.080 On Bloomberg Radio, the Bloomberg Business App, and you too. 1:08:10.360 --> 1:08:13.080 You can also listen live to our flagship New York 1:08:13.120 --> 1:08:16.840 station Just Say Alexa Play Bloomberg Eleve Them thirty. 1:08:25.640 --> 1:08:25.840 Yeah. 1:08:26.360 --> 1:08:29.680 Thank you Generative AI and chat ChiPT. You've given us 1:08:29.840 --> 1:08:32.600 all a lot to talk about and to talk to. 1:08:32.920 --> 1:08:35.040 I actould say I was actually playing with it. This weekend, 1:08:35.720 --> 1:08:39.600 the world definitely all in on AI, specifically generative artificial intelligence, 1:08:39.680 --> 1:08:42.920 you know, AI algorithms that generate new outputs based on 1:08:43.000 --> 1:08:45.200 the data that they have been trained on. That's being 1:08:45.320 --> 1:08:49.240 used to come up with meal plans, create art, write essays, 1:08:49.360 --> 1:08:51.720 term papers, teach robots, and as during the upcoming issue 1:08:51.720 --> 1:08:55.000 of Bloomberg BusinessWeek points out for therapy as well. So 1:08:55.120 --> 1:08:57.200 let's get to it. This story in the new issue 1:08:57.520 --> 1:08:59.679 that'll be on newstands later on this week, already online 1:09:00.040 --> 1:09:02.880 burg dot com slash BusinessWeek on the Bloomberg terminal. Let's 1:09:03.160 --> 1:09:05.479 get into it. Let's talk therapy. Entering the era of 1:09:05.600 --> 1:09:08.599 chatbots with us. Is Bloomberg News AI reporter Rachel Metz 1:09:08.960 --> 1:09:11.439 here in studio along with the editor of Bloomberg BusinessWeek, 1:09:11.520 --> 1:09:13.960 Joel Weber. It is every Are you real? Are you 1:09:14.040 --> 1:09:15.120 a chat GP tape? 1:09:15.920 --> 1:09:16.200 I am? 1:09:16.479 --> 1:09:19.840 I am real as far as I know. But the 1:09:20.160 --> 1:09:24.559 conversations that people are having with chet dvt's also real. 1:09:25.280 --> 1:09:26.679 Uh would you like that? Transition? 1:09:26.800 --> 1:09:31.439 Is conversations are real and you can ask it anything, 1:09:31.560 --> 1:09:34.439 and people are and they're making all kinds of stuff, 1:09:35.439 --> 1:09:38.800 and you know, there's all kinds of questions about anxieties 1:09:39.120 --> 1:09:41.800 of what's going to happen to jobs and all kinds 1:09:41.800 --> 1:09:44.000 of other stuff. But the thing that I was really 1:09:44.080 --> 1:09:46.720 drawn to with Rachel's story, which reminded me a little 1:09:46.760 --> 1:09:49.479 bit of a Ellen Hewitt story that we did not 1:09:49.600 --> 1:09:53.880 so long ago, also a little bit about what where 1:09:53.960 --> 1:09:57.120 AI can go unexpected places? 1:09:57.280 --> 1:09:58.639 This was one of those as well. 1:09:59.400 --> 1:10:02.400 So what's happened because people are actually starting to use 1:10:02.439 --> 1:10:06.719 it in some very deeply personal places. 1:10:07.240 --> 1:10:10.519 Yeah, No, it's it's been interesting to watch people are 1:10:10.560 --> 1:10:13.479 finding all kinds of ways to use chat GPT. And 1:10:13.920 --> 1:10:16.000 one thing that some people are trying out right now 1:10:16.320 --> 1:10:19.679 that I started to notice is using it not really 1:10:19.760 --> 1:10:22.720 I haven't seen people really replacing therapy with it, like 1:10:22.760 --> 1:10:25.439 if you're seeing a human therapist, but using it to 1:10:25.560 --> 1:10:29.880 solve occasional problems, or realizing that for them there's something 1:10:29.920 --> 1:10:31.760 about it that seems to be helpful to them, at 1:10:31.840 --> 1:10:33.360 least with the people that I spoke to, which I 1:10:33.360 --> 1:10:34.080 thought was really neat. 1:10:34.560 --> 1:10:38.320 So was this an intended use for what chat gpt? 1:10:39.040 --> 1:10:42.120 This is not an intended use case. It is a 1:10:42.280 --> 1:10:44.360 general use chatbot. 1:10:44.840 --> 1:10:47.880 It is not meant for that specifically, and in fact, 1:10:47.920 --> 1:10:51.840 if you look at open aiyes terms of use, they 1:10:51.920 --> 1:10:55.200 don't want it to be used for very specific medical 1:10:55.280 --> 1:10:57.680 use cases like diagnosing an illness or something like that. 1:10:59.280 --> 1:11:01.439 Shame of them. I mean Google doctor, I mean, like 1:11:01.520 --> 1:11:03.000 how many times writes up that goes up? 1:11:03.080 --> 1:11:04.559 I mean they know people are going to go all 1:11:04.600 --> 1:11:07.760 these crazy places, right, I mean I think that if 1:11:07.840 --> 1:11:11.080 you're able to use it and find it helpful, that 1:11:11.320 --> 1:11:14.639 I think that that's interesting and that I was actually 1:11:14.680 --> 1:11:16.560 a little surprised because initially my first thought was this 1:11:16.640 --> 1:11:20.559 sounds like a really scary, bad idea, But then as I. 1:11:20.600 --> 1:11:23.439 Talked to people, I it was it's much more nuanced 1:11:23.479 --> 1:11:23.680 than that. 1:11:24.160 --> 1:11:24.720 It help them. 1:11:25.600 --> 1:11:27.760 Yeah, in a couple cases, although there was one. There's 1:11:27.800 --> 1:11:30.240 one person I spoke to who said, you know, it 1:11:30.360 --> 1:11:34.200 was like saying the right things, but I just couldn't 1:11:34.200 --> 1:11:35.880 get into it because I knew I wasn't talking to 1:11:36.320 --> 1:11:38.720 a person. But I also think it's really important to 1:11:39.160 --> 1:11:42.360 not think of it as an either or situation. Like 1:11:42.439 --> 1:11:45.080 it's not like you might one day have a human 1:11:45.200 --> 1:11:49.160 therapist or a robotherapist. It's possible this could be used 1:11:49.200 --> 1:11:51.960 as Margaret Mitchell at hucking Face said, perhaps it could 1:11:51.960 --> 1:11:54.160 be used to help train people that answer phones for 1:11:54.320 --> 1:11:58.240 crisis lines that could help them to help more people 1:11:58.600 --> 1:12:00.679 at a time. And those kinds of people are vital 1:12:00.840 --> 1:12:03.120 and you could totally use more of them. This could 1:12:03.120 --> 1:12:05.519 be a way to make them more able to help people, 1:12:05.720 --> 1:12:06.639 which I thought was kind of cool. 1:12:06.880 --> 1:12:09.519 It feels like the there's like some empathy. 1:12:09.640 --> 1:12:11.439 It's like built into this of like I know what 1:12:11.520 --> 1:12:13.680 you're going through, Like there's got to be like a 1:12:14.000 --> 1:12:17.680 chat GBT training course and in terms of just like 1:12:17.840 --> 1:12:21.360 making sure people feel like they're being heard, right, But so, 1:12:21.439 --> 1:12:23.479 what did you hear from the people that you spoke to, 1:12:23.640 --> 1:12:26.559 and like what led them to hear and are they 1:12:26.680 --> 1:12:30.040 doing it instead of humans or in addition to real 1:12:30.160 --> 1:12:31.600 therapy not instead. 1:12:31.240 --> 1:12:34.120 Of One of the people that I spoke to, Milo 1:12:34.720 --> 1:12:37.320 has a therapist, happened to miss the therapy appointment and 1:12:37.640 --> 1:12:40.799 had seen somebody on Twitter saying it was really helpful 1:12:40.840 --> 1:12:43.000 to them, and Milo was like, Hey, I'll just give 1:12:43.040 --> 1:12:45.960 this a try, and then found it really helpful and 1:12:46.280 --> 1:12:50.280 has used it repeatedly since then. Not everybody will feel 1:12:50.280 --> 1:12:51.840 that way, Obviously, I loved your. 1:12:51.760 --> 1:12:53.439 Story that you talked to us tell us about that 1:12:53.479 --> 1:12:55.760 one of the earliest chatbots, Eliza, Right, So this takes 1:12:55.840 --> 1:12:57.320 us back to what the nineteen sixties. 1:12:57.760 --> 1:12:58.400 This was new to me. 1:12:58.479 --> 1:12:59.120 I did not have this. 1:12:59.280 --> 1:12:59.640 I didn't know. 1:13:00.160 --> 1:13:05.240 So Eliza was a supposed to mimic like a Rogerian 1:13:05.600 --> 1:13:09.600 style therapy, which is like, I guess, very like self reflective. 1:13:09.840 --> 1:13:11.519 You know, why do you think that? 1:13:11.720 --> 1:13:15.360 Or you know those kinds of like reflective questions. That 1:13:15.520 --> 1:13:19.519 was a much much simpler style of chatbot, which you 1:13:19.560 --> 1:13:23.320 would you would say something and it would be looking 1:13:23.360 --> 1:13:25.160 at or you would type something in that case, and 1:13:25.400 --> 1:13:28.120 it would be looking specifically for keywords that could be 1:13:28.200 --> 1:13:31.440 tied to certain types of answers. 1:13:31.880 --> 1:13:33.800 You know what makes me That's the other thing. Like 1:13:34.040 --> 1:13:36.240 nineteen sixties, we keep thinking of this chatbot is kind 1:13:36.240 --> 1:13:38.799 of this whole big new thing, and I keep googling 1:13:38.880 --> 1:13:41.720 and trying like origins of artificial intelligence, like I want 1:13:41.760 --> 1:13:44.120 to know more because I'm trying to Rachel get my 1:13:44.160 --> 1:13:45.760 head around, like why all of a sudden are we 1:13:45.880 --> 1:13:49.360 just this is such an explosion, right, because it doesn't 1:13:49.400 --> 1:13:50.760 sound like it's totally new. 1:13:50.960 --> 1:13:53.680 It's not new. I think some of what's new is 1:13:54.120 --> 1:13:56.800 the style. You can think of AI as having like 1:13:56.880 --> 1:13:59.679 different kinds of architecture. I think of it. An architecture 1:13:59.760 --> 1:14:01.280 is a word you'll see a lot in a lot 1:14:01.320 --> 1:14:04.559 of academic papers. So architecture with buildings, there's all different 1:14:04.600 --> 1:14:07.439 kinds of buildings, right. Similarly, in AI, you have different 1:14:07.479 --> 1:14:11.200 styles of putting these AI systems together, and this generative 1:14:12.000 --> 1:14:15.439 style is newer and being able to do that is 1:14:15.720 --> 1:14:18.280 a newer thing, and it gets us closer to it 1:14:18.360 --> 1:14:21.479 makes it makes these systems better at mimicking human speech, 1:14:21.920 --> 1:14:24.439 but it doesn't it's not actually, you know, it isn't 1:14:24.520 --> 1:14:28.080 human in any way. It's essentially using math in a 1:14:28.160 --> 1:14:31.599 way that gets you to look at the answer and say, oh, 1:14:32.120 --> 1:14:34.040 you know, that looks like something a person could say. 1:14:34.000 --> 1:14:34.479 Kind of close. 1:14:34.600 --> 1:14:36.920 Yeah, man, that's the creepy part of it. 1:14:37.280 --> 1:14:40.000 Another thing that I learned in this story is that 1:14:40.120 --> 1:14:44.160 there are chatbots that focus on mental health, yes, as 1:14:44.200 --> 1:14:48.640 opposed to chat gibt that can can do whatever it does, right, 1:14:48.760 --> 1:14:52.960 but so robot wisa, what are those and what are 1:14:52.960 --> 1:14:53.280 they doing? 1:14:53.880 --> 1:14:56.960 Those do exist, They've been out for a while in 1:14:57.080 --> 1:15:01.360 this space, and people can pay for them, and that 1:15:01.560 --> 1:15:05.720 those can potentially also be helpful to people. So so 1:15:05.840 --> 1:15:08.120 it is kind of interesting, right that those things already exist, 1:15:08.240 --> 1:15:10.240 but people are saying, let me try this. I mean, 1:15:10.320 --> 1:15:13.240 this is very easy to access. It's exciting in many 1:15:13.280 --> 1:15:16.040 ways because it's new. So I think it's going to 1:15:16.040 --> 1:15:18.360 be like a lot of different applications of chatchept where 1:15:18.360 --> 1:15:21.200 we kind of have to see how the dust settles 1:15:21.400 --> 1:15:23.880 and if people actually are using it for this and 1:15:23.960 --> 1:15:24.400 other things. 1:15:25.160 --> 1:15:27.240 Carol brought up the nineteen sixties. It made me also 1:15:27.280 --> 1:15:30.160 think of in the nineteen nineties with ask Jeeves, which 1:15:30.240 --> 1:15:33.080 was obviously right, people kind of forget about that, but 1:15:33.120 --> 1:15:36.000 it was sort of this whole forget about people don't 1:15:36.040 --> 1:15:39.719 forget about Jeeves. But interesting during these other time periods 1:15:39.720 --> 1:15:42.000 where we've seen different things like this, when we think 1:15:42.040 --> 1:15:44.840 this is like something very new but interesting that we've 1:15:45.000 --> 1:15:48.160 kind of had different irradiations in a way and in 1:15:48.160 --> 1:15:48.599 the past. 1:15:49.040 --> 1:15:52.519 Yeah, I mean, I think people like to personalize and 1:15:52.840 --> 1:15:58.479 anthropomorphize technology, and sometimes sometimes that could be totally fine. 1:15:59.320 --> 1:16:02.280 Sometimes that can go a little bit awry, like Rumba 1:16:02.400 --> 1:16:05.679 for instance, like people treat them a little bit like pets, perhaps, 1:16:05.800 --> 1:16:09.959 you know, and that's obviously it is a pet stuck. 1:16:13.200 --> 1:16:13.960 Part of the family. 1:16:14.479 --> 1:16:16.760 Hey, I have one that has a name, so you 1:16:16.840 --> 1:16:17.599 we're not all crazy. 1:16:18.000 --> 1:16:20.519 No, but it is interesting about you know this, I 1:16:20.720 --> 1:16:24.040 am curious how effective or what are the medical community, 1:16:24.120 --> 1:16:26.240 like are people weighing in about because I just think 1:16:26.240 --> 1:16:30.120 about there's some very serious illnesses out there, and I'm 1:16:30.160 --> 1:16:32.920 just wondering ken a chat GPT pick up some of 1:16:32.960 --> 1:16:35.720 the nuances of somebody who obviously needs some serious help. 1:16:36.280 --> 1:16:40.600 I talked to a professor who is also a clinical psychologist. 1:16:41.760 --> 1:16:45.200 He can he can imagine a future in which this 1:16:45.439 --> 1:16:49.519 might be useful for helping people along with human therapy 1:16:50.600 --> 1:16:53.320 right now. He was like, no, no, like this. You know, 1:16:53.439 --> 1:16:56.679 this is not for somebody who's got a serious mental 1:16:56.760 --> 1:16:59.600 health condition. This is not the way to go like 1:17:00.080 --> 1:17:02.000 so low. But he also but at the same time, 1:17:02.640 --> 1:17:06.679 he was saying that he could understand why people would 1:17:06.760 --> 1:17:09.479 find it helpful to talk to or at least or pleasant. 1:17:09.479 --> 1:17:13.719 I can't remember exactly what He's right potentially well, unless 1:17:14.200 --> 1:17:16.080 I mean, it depends. If you want to talk to 1:17:17.360 --> 1:17:19.479 a chatbot like GPT four, you're gonna have to pay 1:17:19.520 --> 1:17:19.680 for it. 1:17:19.840 --> 1:17:27.760 That's true, right, business, So you only curious about some 1:17:27.880 --> 1:17:31.920 of the privacy implications here, because I would think if 1:17:31.960 --> 1:17:34.760 I were letting my chatbot talk to people, I'd want 1:17:34.800 --> 1:17:37.479 to know how that chatbot was doing in a situation 1:17:37.680 --> 1:17:37.840 like this. 1:17:38.200 --> 1:17:40.920 And and also you know, obviously that opens up a. 1:17:40.960 --> 1:17:43.560 Can of worms for what the privacy implications looks like 1:17:43.640 --> 1:17:44.720 on the AI front as well. 1:17:44.800 --> 1:17:47.360 So has anybody been talking about her looking into any 1:17:47.400 --> 1:17:47.560 of that? 1:17:48.120 --> 1:17:50.400 Yeah, I mean I think that one of the people 1:17:50.439 --> 1:17:53.439 I spoke with, Margaret Mitchell also, she's from Hugging Face. 1:17:54.280 --> 1:17:56.200 That was something that she mentioned to me. And it's 1:17:56.240 --> 1:17:59.160 something that as like as a reporter, but also as 1:17:59.320 --> 1:18:01.120 a human who likes to use a lot of different 1:18:01.160 --> 1:18:04.200 technology products. I also think about a lot. When I 1:18:04.400 --> 1:18:08.400 use chat GPT myself, I try to avoid giving it 1:18:08.560 --> 1:18:12.760 any kinds of personally identifying information. And I think I've 1:18:12.800 --> 1:18:15.720 told many people the same. I just I don't feel 1:18:15.720 --> 1:18:19.680 comfortable doing that. I know that open ai reviews users conversations. 1:18:21.040 --> 1:18:22.960 You can delete your account if you don't want them 1:18:23.000 --> 1:18:24.360 to have your data, but that can take up to 1:18:24.400 --> 1:18:26.160 four weeks according to their terms of service. 1:18:26.240 --> 1:18:28.400 Doesn't this feel like all the tech CEOs are like, Yeah, no, 1:18:28.520 --> 1:18:31.880 my kids, I don't want them play with computers. Rachel 1:18:31.880 --> 1:18:34.880 says that, yeah, I don't do this. What's interesting too 1:18:34.960 --> 1:18:37.320 though in terms of data though, right, because if you 1:18:37.400 --> 1:18:41.240 put anything personal down there, that's how this all works, right, 1:18:41.600 --> 1:18:44.240 uses the data to kind of get smarter and smarter 1:18:44.320 --> 1:18:44.800 if you will. 1:18:45.320 --> 1:18:49.760 Yeah, your data is helping could help train future iterations 1:18:49.800 --> 1:18:49.960 of this. 1:18:50.160 --> 1:18:51.760 Sure, so you have to remember it's in there. 1:18:53.479 --> 1:18:57.000 It's sticky, sticky chats, you could describe it. 1:18:57.040 --> 1:18:59.240 I actually did use it myself, like a week ago 1:18:59.400 --> 1:19:02.360 to I haven't told anyone in my family this. I 1:19:02.479 --> 1:19:06.360 used it to to sort of talk through an argument, 1:19:07.160 --> 1:19:10.320 and I didn't give it any personally identifying details. I 1:19:10.360 --> 1:19:12.000 feel like you can if you spend a minute thinking 1:19:12.040 --> 1:19:12.519 about it, you. 1:19:12.560 --> 1:19:14.280 Can totally do that. 1:19:14.479 --> 1:19:15.280 Or is it helpful? 1:19:16.439 --> 1:19:16.639 Yeah? 1:19:16.680 --> 1:19:17.360 Actually it was. 1:19:17.760 --> 1:19:19.680 I mean in the way that can I help you 1:19:19.720 --> 1:19:20.800 reason with a seven year old? 1:19:21.320 --> 1:19:24.240 No, I haven't tried it with anything about my kids. 1:19:24.320 --> 1:19:25.600 That's like you write it in and then like you 1:19:25.640 --> 1:19:26.479 don't get a response. 1:19:27.840 --> 1:19:29.200 We don't have enough data on that's. 1:19:29.320 --> 1:19:31.680 Yeah, it was helpful to be reflective, But you know what, 1:19:31.840 --> 1:19:34.400 Eliza might have been able to be similarly help me 1:19:34.479 --> 1:19:35.599 be similarly reflective. 1:19:35.600 --> 1:19:36.519 I don't know, right. 1:19:38.880 --> 1:19:40.519 When the answer is when did you go let it down? 1:19:40.920 --> 1:19:41.080 Yeah? 1:19:41.640 --> 1:19:42.360 Why do you think that? 1:19:43.360 --> 1:19:44.760 You know, I have to I feel like this has 1:19:44.800 --> 1:19:46.720 been an interesting week. There are sixty minutes to another 1:19:46.800 --> 1:19:48.720 couple of pieces, and they were really leaning into and 1:19:48.760 --> 1:19:52.320 obviously talking to the head of Alphabet, Sundar Pichai about what. 1:19:52.400 --> 1:19:53.000 They are doing. 1:19:53.479 --> 1:19:55.880 And it's interesting, Like on Twitter, I was getting you know, 1:19:55.920 --> 1:19:57.599 I put out those pieces and people are like, wait, 1:19:57.760 --> 1:19:59.559 you know, everybody's like, oh my god, it's the end 1:19:59.560 --> 1:20:01.960 of the world. Well, how do you, as somebody who 1:20:02.120 --> 1:20:04.160 is obviously in a whole other plane when it comes 1:20:04.200 --> 1:20:06.519 to AI understanding talking to the voices who are in it, 1:20:06.960 --> 1:20:09.120 how do you see it? Because it does feel like 1:20:09.160 --> 1:20:11.599 headlines are coming at as fast and furiously, whether it's 1:20:11.640 --> 1:20:13.360 on therapy, whether it's on something else. 1:20:14.000 --> 1:20:18.599 I try to remember to take a deep breath and like, honestly, 1:20:18.720 --> 1:20:22.000 like just kind of okay, and let's kind of look 1:20:22.040 --> 1:20:25.320 at the reality of what these things can do. On 1:20:25.439 --> 1:20:29.320 the one hand, we have AI systems that are increasingly 1:20:29.520 --> 1:20:33.120 powerful and can do some really interesting things, or perhaps 1:20:33.320 --> 1:20:35.280 in the near future, could do some really interesting things. 1:20:36.160 --> 1:20:39.479 Various cool medical applications like helping detect certain kinds of cancer. 1:20:40.400 --> 1:20:43.120 Things like that I think many people can agree are great. 1:20:43.800 --> 1:20:45.200 On the other hand, there's a lot of things we 1:20:45.360 --> 1:20:47.559 need to keep an eye out for and some harms 1:20:47.560 --> 1:20:51.439 that are already here. I don't think that this is 1:20:52.400 --> 1:20:55.480 agi artificial general intelligence. 1:20:55.640 --> 1:20:56.320 We are not there. 1:20:57.240 --> 1:20:59.400 And also a lot of these things aren't an inevitability. 1:20:59.439 --> 1:21:01.439 I think we have to or official general intelligence, like 1:21:01.520 --> 1:21:04.519 creating up stuff like creating another Jeel, creating another me 1:21:04.680 --> 1:21:04.960 kind of thing. 1:21:05.040 --> 1:21:05.759 No, that's not happening. 1:21:05.800 --> 1:21:08.760 Okay, that's okay, Okay, No. 1:21:08.840 --> 1:21:10.240 I think I think a lot of it is trying 1:21:10.240 --> 1:21:13.679 to keep into respective where are we which is still 1:21:13.760 --> 1:21:16.759 this is still early days, even though AI in various 1:21:16.840 --> 1:21:18.799 forms has existed for many decades. 1:21:18.840 --> 1:21:22.960 At this point, where else are you interested in watching 1:21:23.720 --> 1:21:27.719 chet GBT go into and sort of you know, maybe 1:21:27.800 --> 1:21:30.479 let's say disrupt That word. 1:21:31.000 --> 1:21:34.360 Disrupt interesting, I mean it has it has a bit 1:21:34.520 --> 1:21:39.479 of a honesty problem. We we need systems like this 1:21:39.760 --> 1:21:42.400 that can be a little bit more reliable as far 1:21:42.640 --> 1:21:45.920 as you ask it a question and you get an 1:21:45.920 --> 1:21:47.880 answer that you then don't have to spend a really 1:21:47.960 --> 1:21:51.719 long time like confirming checking yeah, And that gets harder 1:21:51.800 --> 1:21:54.400 as if you're wanting right, Yeah, well yeah, if you're googling, 1:21:54.520 --> 1:21:56.880 and if you're asking a complicated question, you might have 1:21:56.920 --> 1:21:59.040 a whole bunch of different things. Then that you're like, okay. 1:21:59.280 --> 1:22:00.960 If you're asking it for like a list of things, 1:22:01.000 --> 1:22:02.360 for instance, then you're like, okay, I have to run 1:22:02.400 --> 1:22:04.200 down everything on this list to make sure you know 1:22:04.320 --> 1:22:08.599 it's all accurate. So if we can get in that direction, 1:22:08.800 --> 1:22:12.559 I think it could be really interesting for maybe there's 1:22:12.600 --> 1:22:14.440 some interesting finance applications. 1:22:14.920 --> 1:22:15.800 I love that it lies. 1:22:16.640 --> 1:22:18.439 It's sometimes that's useful, though, you. 1:22:21.120 --> 1:22:26.000 Are I am just a simple as. 1:22:27.880 --> 1:22:30.240 It's a fascinating world and we are all obsessed with 1:22:30.400 --> 1:22:32.760 it and obsessed with you and really your take on 1:22:32.880 --> 1:22:35.240 it and reporting. So thank you so much. Rachel Metz. 1:22:35.439 --> 1:22:38.080 She's aar reporter here at Bloomberg News in our interactive 1:22:38.120 --> 1:22:40.760 Brokers studio along with the editor of Bloomberg Business Week, 1:22:40.840 --> 1:22:44.519 Jill Weber. This story talk therapy, entering the era of chatbots. 1:22:44.560 --> 1:22:46.519 It's going to be the new issue of Bloomberg Business Week, 1:22:46.840 --> 1:22:49.880 add on newsstands, online already at Bloomberg dot Cossage business 1:22:49.920 --> 1:22:52.840 Week and of course on the Bloomberg terminal. Check it out. 1:22:53.160 --> 1:22:54.200 This is Bloomberg. 1:22:58.560 --> 1:23:02.080 You're listening to the Bloomberg Business Week podcast. Catch us 1:23:02.160 --> 1:23:05.800 live weekdays from two to five pm Easter on Bloomberg Radio, 1:23:06.040 --> 1:23:08.880 the Bloomberg Business app and you too. You can also 1:23:09.000 --> 1:23:12.280 listen live to our flagship New York station, Just say 1:23:12.439 --> 1:23:14.840 Alexa play Bloomberg eleven thirty. 1:23:16.680 --> 1:23:19.000 I'm Carol Master, along with Madison Mills, who's in for 1:23:19.160 --> 1:23:21.679 Tim Well. A new issue of Bloomberg Business Week is out, 1:23:21.840 --> 1:23:25.080 so too, of course, is the Pursuit section, devoted to 1:23:25.160 --> 1:23:28.640 all things that can bring us bliss, like burnout retreats. 1:23:28.320 --> 1:23:30.720 And also the best cameras to use for all of 1:23:30.840 --> 1:23:34.960 us would be influencers, and New York's most exclusive new restaurant, 1:23:35.000 --> 1:23:37.320 Amex's Black Card members only club. 1:23:37.360 --> 1:23:39.320 Weeah, good luck getting in unless you have a black cart. 1:23:39.400 --> 1:23:39.680 All right. 1:23:39.720 --> 1:23:42.120 The Pursuit section and team, led by the editor Pursuits 1:23:42.200 --> 1:23:44.760 Chris Rouser. All right, Chris, let's get to the opener though, 1:23:44.800 --> 1:23:48.320 of the section. Burnout retreats apparently the hot new thing, 1:23:48.520 --> 1:23:51.120 and Maddy and I were like reading through this and saying, yeah. 1:23:50.960 --> 1:23:51.240 Let's go. 1:23:52.000 --> 1:23:52.200 Yeah. 1:23:52.439 --> 1:23:56.280 So the trend here is that really high end spas 1:23:56.520 --> 1:24:00.559 and rehab clinics are now hosting treatments just for burnout, 1:24:00.600 --> 1:24:03.439 which is when you're at your wits end with work, 1:24:03.520 --> 1:24:06.519 cortisol levels in your body are really high. It's beginning 1:24:06.560 --> 1:24:07.439 to affect your health. 1:24:07.520 --> 1:24:10.040 It's an actual science thing, right, like medical thing. 1:24:10.600 --> 1:24:14.360 And people since the pandemic started, people have been complaining 1:24:14.400 --> 1:24:16.280 about it a lot more and a lot of these 1:24:16.320 --> 1:24:19.360 are expensive. So you know, more than three quarters of 1:24:19.400 --> 1:24:22.240 white collar workers told Deloitte last March they were suffering 1:24:22.280 --> 1:24:25.240 from burnout and have said they regularly felt physical and 1:24:25.320 --> 1:24:29.320 mentally exhausted. And fifty nine percent of Americans overall have 1:24:29.439 --> 1:24:32.240 feelings of burnout, because let's be honest, we all feel burnout. 1:24:33.160 --> 1:24:35.920 And yeah, you know, raise your hands if you're a 1:24:36.080 --> 1:24:37.320 burned out brands up here. 1:24:37.400 --> 1:24:40.000 Yeah, and so there are. You know, these spas and 1:24:40.080 --> 1:24:43.200 places are sort of taking after the like drug and 1:24:43.240 --> 1:24:45.880 alcohol rehab programs, which is like you need to unplug 1:24:45.920 --> 1:24:47.680 from your life completely. You need to stop, we need 1:24:47.800 --> 1:24:50.439 to do some medical treatment. You need to basically have 1:24:50.520 --> 1:24:51.640 someone tell you what to do all day so you 1:24:51.680 --> 1:24:53.280 don't have to make any decisions and you can really 1:24:53.320 --> 1:24:53.960 take time off. 1:24:54.600 --> 1:24:56.559 So it's more than a spot. It's not about getting 1:24:56.560 --> 1:24:57.400 a massage right. 1:24:57.520 --> 1:24:59.640 Right, No, it's it's definitely a lot more. There's a 1:24:59.680 --> 1:25:03.759 lot of medical treatments, a lot of Eastern medicine treatments 1:25:03.960 --> 1:25:06.760 and and and some of them are in very nice 1:25:06.800 --> 1:25:09.160 places if you can afford it, like the Four Seasons 1:25:09.800 --> 1:25:10.200 sense A. 1:25:11.840 --> 1:25:12.479 In Hawaii. 1:25:13.560 --> 1:25:15.479 You're talking about Larry Ellison's by. 1:25:15.479 --> 1:25:18.120 Larry's Allison's Island exactly, and you can there, you can 1:25:18.200 --> 1:25:22.080 do a thirty day sabbatical package, which is just like 1:25:22.200 --> 1:25:24.400 it's a mega month of They start off with a 1:25:24.439 --> 1:25:29.200 thermographic scan to find asymmetries, muscle stress pain points, and 1:25:29.280 --> 1:25:31.080 then they go from there and it costs twenty five 1:25:31.080 --> 1:25:32.160 thousand dollars for a month. 1:25:32.720 --> 1:25:34.760 It is for a month. Come on, that's really that's 1:25:34.800 --> 1:25:35.000 a lot. 1:25:35.120 --> 1:25:38.559 Yeah, what's the best one that we could afford? 1:25:39.400 --> 1:25:41.920 Yeah, that's an interesting question. I mean, so one of 1:25:42.000 --> 1:25:44.880 the things about like being like, Okay, you're burned out, 1:25:44.920 --> 1:25:47.080 you need to do a burnout retreat. It's an extreme 1:25:47.200 --> 1:25:49.920 luxury even to be able, Yeah, to like check out 1:25:50.040 --> 1:25:52.240 for a week, let alone a month, which is like 1:25:52.280 --> 1:25:54.280 who can honestly, who can do that? That's like a 1:25:54.360 --> 1:25:57.960 real luxury. At the Raffles in London, They have a 1:25:58.080 --> 1:26:00.240 training program where it's almost kind of like a check 1:26:00.280 --> 1:26:01.920 in every day or once a week with a trainer 1:26:02.760 --> 1:26:05.880 who you go in, they do some tests, they tell you, 1:26:05.880 --> 1:26:08.760 you know, what workout to do, or even maybe okay, 1:26:08.800 --> 1:26:10.599 you know you're really stressed out today, don't work out, 1:26:10.680 --> 1:26:13.280 that's just going to add to your your cortisol levels. 1:26:13.680 --> 1:26:16.360 Let's do some mindfulness, let's do some other treatments. Let's 1:26:16.479 --> 1:26:19.320 let's do what you need right now. And getting these 1:26:19.400 --> 1:26:21.840 practices into your life going forward is really how you're 1:26:21.880 --> 1:26:24.360 going to fix burnout. Like everybody, Studies show that, like 1:26:24.439 --> 1:26:26.240 a vacation is great, but then when you get back 1:26:26.280 --> 1:26:28.200 from the vacation, within three weeks, you're back to where 1:26:28.200 --> 1:26:30.479 you were before. And a lot of these places are 1:26:30.520 --> 1:26:34.120 going to teach you mindfulness techniques. Also, you know, there's 1:26:34.160 --> 1:26:36.479 life coaching to help you reorganize your life, figure out 1:26:36.479 --> 1:26:37.800 how to get some of these things off your plate. 1:26:38.160 --> 1:26:38.400 All that. 1:26:38.760 --> 1:26:40.920 Yeah, I love that. There Also there's one place, I 1:26:40.920 --> 1:26:43.960 guess looking into holding events on yachts in Croatia this fall. 1:26:44.400 --> 1:26:46.160 Yeah, you know a lot of this is for white 1:26:46.200 --> 1:26:49.760 collar wipe out of it can be some of it 1:26:49.880 --> 1:26:52.400 can be used by you know anyone that a thing 1:26:52.439 --> 1:26:52.920 white color. 1:26:53.200 --> 1:26:53.920 We made it up. 1:26:54.040 --> 1:26:55.920 It's a thing that we wanted, a T shirt. 1:26:55.960 --> 1:26:58.720 I wanted t shirt. It's really fascinating. I have to 1:26:58.800 --> 1:27:00.600 say this week on the Week in so we have 1:27:00.720 --> 1:27:03.120 two segments these burnout retreats and then we have another 1:27:03.200 --> 1:27:06.760 segment on microstresses. So yeah, I mean you can feel 1:27:06.800 --> 1:27:08.240 it hear I feel like we hear it with all 1:27:08.320 --> 1:27:11.160 of our colleagues constantly. Part of I think what's stressing 1:27:11.240 --> 1:27:12.960 us out? Like where shall we go? Where shall we go? 1:27:13.120 --> 1:27:15.880 The cameras influencers use. I think it's interesting that I 1:27:15.920 --> 1:27:18.719 feel like there's this constant pressure on us to also 1:27:19.240 --> 1:27:21.080 do things out on social media, but you do get 1:27:21.120 --> 1:27:23.160 to the right cameras to use right. 1:27:23.280 --> 1:27:25.599 Yes, there's a lot of pressure to make content, especially 1:27:25.640 --> 1:27:28.599 among young people. And you know, one of the interesting 1:27:28.680 --> 1:27:32.400 trends among younger people who are just who are on 1:27:32.479 --> 1:27:34.680 social media or creating content is they want to use 1:27:34.760 --> 1:27:37.080 kind of a camera that feels like analog. There's really 1:27:37.720 --> 1:27:41.599 a wave of people buying cameras that have analog features. 1:27:41.640 --> 1:27:44.799 So like a lens that you hold you can twist knobs, dials, 1:27:45.720 --> 1:27:48.120 different lenses that you can exchange which takes a lot 1:27:48.160 --> 1:27:50.599 of training for people who are just used to pointing 1:27:50.640 --> 1:27:53.240 and clicking with the phone. But the Fujifilm X one 1:27:53.320 --> 1:27:55.640 hundred V was sort of sort of blew up on 1:27:55.720 --> 1:27:58.320 TikTok last November and the company had to stop on 1:27:58.560 --> 1:28:01.160 orders because so many people wanted to get the camera 1:28:01.280 --> 1:28:04.040 that the influencers were using. And it's it normally costs 1:28:04.080 --> 1:28:06.360 like fourteen hundred dollars and now you have to get 1:28:06.400 --> 1:28:08.519 it on the secondary market. It's like twice sixth mounts. 1:28:08.760 --> 1:28:11.920 Everyone has one and they're bringing it out to like 1:28:12.120 --> 1:28:15.200 the have you seen them out everybody? Seriously, all of 1:28:15.280 --> 1:28:17.200 my friends have one. I'm such a loser for not 1:28:17.320 --> 1:28:19.400 having one, Like I need to get on it, Chris. 1:28:19.680 --> 1:28:21.720 But it is interesting with like I noticed with a 1:28:21.800 --> 1:28:24.040 younger generation or like my daughter, like they all want 1:28:24.080 --> 1:28:26.519 to go back to like older cameras or like the disposed, 1:28:26.600 --> 1:28:28.840 Like it's just interesting, like they're off their phone. 1:28:28.960 --> 1:28:31.920 That's true, and you know exactly, someone runs around a 1:28:31.920 --> 1:28:34.040 party with a Polaroid and like everybody loves it. And 1:28:34.120 --> 1:28:36.080 it also feels grown up to own a camera. It's 1:28:36.080 --> 1:28:38.920 like a lot of times people's first adult purchase. But 1:28:39.160 --> 1:28:41.400 Sony and some of the other cameras companies that make 1:28:41.439 --> 1:28:44.120 these also say like it helps that they're cute, you 1:28:44.200 --> 1:28:48.880 know the look. They're fun to like to carry around. 1:28:48.600 --> 1:28:50.400 If you want to be grown up by an end table. 1:28:50.479 --> 1:28:52.200 We don't have time for this story, but check it out. 1:28:52.760 --> 1:28:55.560 Yes, the end table is the best supporting actor in 1:28:55.640 --> 1:28:58.800 a room. Sometimes it's your favorite character. Don't forget about them. 1:28:58.880 --> 1:29:00.800 There's one that actually looks like a character. Because we 1:29:00.920 --> 1:29:03.360 have to get to this story about the American Express 1:29:03.439 --> 1:29:07.120 is impossible to book a new clubhouse in New York City. 1:29:07.200 --> 1:29:09.559 Tell us about it, so you know how. American Express 1:29:09.640 --> 1:29:11.960 has the Centurion Card otherwise known as the Black Card, 1:29:11.960 --> 1:29:14.680 which is an invitation only card. It's for a very 1:29:14.800 --> 1:29:19.200 high spend annual spend fees. And they opened a restaurant 1:29:19.200 --> 1:29:21.479 on the fifty fifth floor of one Vanderbilt Tower, which 1:29:21.520 --> 1:29:23.920 is right by Grand Central, And it's a restaurant in 1:29:23.960 --> 1:29:27.840 sort of lounge area and it's only accessible to Centurion 1:29:27.920 --> 1:29:30.720 card holders and a small number of reservations that you 1:29:30.760 --> 1:29:33.519 can get through Rezi, which is also owned by American Express. 1:29:34.439 --> 1:29:37.360 The chef is Daniel ballude I rode the elevator up 1:29:37.360 --> 1:29:40.360 with Daniel Ballud and you get to the fifty fifth 1:29:40.400 --> 1:29:45.439 floor and the views are bananas. They're insane because there's 1:29:45.479 --> 1:29:47.200 not a lot of restaurants in Midtown that are at 1:29:47.200 --> 1:29:48.439 a high level. You can go to the top of 1:29:48.479 --> 1:29:50.160 the rock, you can go to the Rainbow Room, and 1:29:50.280 --> 1:29:52.840 that's sort of it. Like offices are that high. So 1:29:52.960 --> 1:29:54.960 you're just not used to being like looking out the 1:29:55.040 --> 1:29:58.120 window at the arches of the Chrysler Building like eye 1:29:58.200 --> 1:30:00.720 to eye, and then you know, all way downtown and 1:30:00.760 --> 1:30:01.599 then all the way. 1:30:01.520 --> 1:30:01.960 Up the park. 1:30:02.360 --> 1:30:05.720 So the food, the food is great, but really you're 1:30:05.800 --> 1:30:07.920 you feel like you're in a really special place. And 1:30:08.520 --> 1:30:11.920 it's been it's been full of cardholders like they've been. 1:30:12.040 --> 1:30:14.719 They've been doing really well with reservations. We've been checking 1:30:14.760 --> 1:30:16.120 to see if you can get in on Rezi and 1:30:16.240 --> 1:30:18.160 we have not seen any tables, but they say you can. 1:30:18.400 --> 1:30:19.800 I just want to know, did you wear a navy 1:30:19.920 --> 1:30:20.799 or linen blazer? 1:30:22.320 --> 1:30:25.000 So Nikki and Justin on our team went and when 1:30:25.000 --> 1:30:26.840 they did the review that's in the section they went 1:30:26.880 --> 1:30:28.439 before I did, and they were looking around and they 1:30:28.439 --> 1:30:30.280 were like, wow, it's really like a lot of dudes 1:30:30.520 --> 1:30:34.479 with expensive watches in like sort of electric blue suits. Okay, 1:30:34.720 --> 1:30:36.200 when I went, I will say it was not it 1:30:36.320 --> 1:30:38.240 was more. It was just a real mix of people. 1:30:38.479 --> 1:30:40.439 It was definitely a mix of people who like work 1:30:40.439 --> 1:30:42.200 hard for a living and then people who like don't 1:30:42.479 --> 1:30:45.800 maybe don't work for a living. It was good, it 1:30:45.920 --> 1:30:48.320 was great. I had a burger like a Waggu burger, 1:30:48.360 --> 1:30:50.680 which was good. They did a Wagu tartar at the 1:30:50.720 --> 1:30:52.519 table where they bring the cart and they mix it up, 1:30:52.560 --> 1:30:57.720 which was There was this lobster pasta which was completely unbelievable. Yeah, 1:30:57.720 --> 1:30:59.920 the food is in standing blue. It's like you can't miss. 1:31:00.040 --> 1:31:02.280 What did it cost? And I know if you have 1:31:02.400 --> 1:31:02.720 to ask. 1:31:02.800 --> 1:31:04.160 It's like the use. 1:31:04.560 --> 1:31:06.720 When they first opened, there were no prices on the menu, 1:31:06.800 --> 1:31:07.400 but there were when. 1:31:07.320 --> 1:31:07.680 I was there. 1:31:08.600 --> 1:31:10.880 It wasn't crazy, Like the burger was twenty eight dollars, 1:31:10.960 --> 1:31:13.920 which is not nothing, but for New York that's not bad. 1:31:14.040 --> 1:31:16.040 And then they kind of went up to like fifty 1:31:16.080 --> 1:31:18.240 sixty dollars for the entrees, and then at dinner it's 1:31:18.240 --> 1:31:20.400 a price like a fixed price menu, and that it's 1:31:20.439 --> 1:31:21.000 more expensive. 1:31:21.000 --> 1:31:23.800 All right, do we have a spring nos? I know, Yeah, 1:31:23.840 --> 1:31:24.360 what's what's up? 1:31:24.439 --> 1:31:25.639 It was like getting into Fortnite. 1:31:26.320 --> 1:31:29.360 I tell you, Daniel can probably get you away just 1:31:29.400 --> 1:31:32.679 real quickly. Laser show. I love any like these equipment 1:31:32.720 --> 1:31:33.720 that you can get home. 1:31:33.960 --> 1:31:37.400 Well, the Lima laser is like the kind of laser 1:31:37.479 --> 1:31:39.880 treatment that you would go to a dermatologist and get. Yeah, 1:31:40.439 --> 1:31:43.840 and it it sparks regeneration and builds protein in your skin. 1:31:43.920 --> 1:31:49.240 Basically cues your skin to like regenerate like from fresh 1:31:49.600 --> 1:31:52.400 and Hannah Elliott, who you guys know, tested it out. 1:31:53.200 --> 1:31:55.679 You use it every day for fifteen minutes, which is onerous. 1:31:56.960 --> 1:31:59.479 Her skin looks incredible. Really, She and I are both 1:31:59.560 --> 1:32:01.800 like skin people and we talk about it all the time. 1:32:02.240 --> 1:32:04.280 And she lives in La She came back to New 1:32:04.360 --> 1:32:05.800 York after a couple months of using this and I 1:32:05.920 --> 1:32:07.120 was like, oh my god, Hannah. 1:32:06.840 --> 1:32:07.160 This is it. 1:32:07.560 --> 1:32:08.880 So are you using it now? 1:32:09.120 --> 1:32:12.760 Well it's twenty seven hundred dollars so no, and you 1:32:12.760 --> 1:32:18.280 already want the story. Hannah has the sample, but it's legit. 1:32:18.439 --> 1:32:20.920 It really works, and needs to give it to loaned 1:32:21.439 --> 1:32:22.200 around the office. 1:32:22.240 --> 1:32:23.640 That's right, to be. 1:32:23.680 --> 1:32:27.280 Fair, to be fair, another great section, So much fun, Chris, 1:32:27.320 --> 1:32:28.400 Thank you, we really appreciate it. 1:32:28.560 --> 1:32:30.760 Yeah, we feel like you have the coolest job in 1:32:30.800 --> 1:32:33.679 the world. Chris, also known as the editor of Bloomberg 1:32:33.720 --> 1:32:34.840 pursuits Chris Rouser. 1:32:35.560 --> 1:32:39.080 You're listening to the Bloomberg Business Week Podcast. Catch us 1:32:39.160 --> 1:32:41.840 live weekdays from two to five pm Eastern. 1:32:41.720 --> 1:32:45.040 On Bloomberg Radio, the Bloomberg Business App, and you too. 1:32:45.320 --> 1:32:48.360 You can also listen live to our flagship New York station, 1:32:48.920 --> 1:32:51.840 Just Say Alexa play Bloomberg You Love Them thirty. 1:32:53.360 --> 1:32:55.759 It does seem like the stress is starting to ease, 1:32:56.600 --> 1:32:59.120 certainly how investors see it based on what we are 1:32:59.160 --> 1:33:02.640 getting from the big thanks and more importantly from those regionals. 1:33:02.760 --> 1:33:05.439 And our next guest knows a lot about stress, writes 1:33:05.479 --> 1:33:08.799 about it in a new book. Karen Dylan is editorial 1:33:08.840 --> 1:33:12.400 director at the Family Business Advisory firm Banyan Global Family 1:33:12.479 --> 1:33:15.920 Business Advisor's former editor of the Harvard Business Review. She's 1:33:15.960 --> 1:33:18.200 got a new book out, The micro Stress Effect, How 1:33:18.240 --> 1:33:20.519 little things pile up and become big problems, and what 1:33:20.640 --> 1:33:24.000 to do about it. She is on Zoom in Boston. Karen, 1:33:24.000 --> 1:33:27.200 I feel like it's a timely topic, considering the stress 1:33:27.240 --> 1:33:30.599 that seems to come at investors on a daily basis. 1:33:31.120 --> 1:33:33.320 Having said that, tell us about the book. What are 1:33:33.400 --> 1:33:36.480 micro stresses and some of the research you did specifically 1:33:36.600 --> 1:33:38.519 for to figure it out and what we can do 1:33:38.640 --> 1:33:39.200 to manage it. 1:33:39.720 --> 1:33:41.080 Sure, I'm glad to be here. 1:33:41.280 --> 1:33:43.519 So even just listening to the pre evil before it 1:33:43.600 --> 1:33:45.960 came on is stressful. There's no questions. We're all kind 1:33:45.960 --> 1:33:47.880 of swimming in the sea of stress all the time. 1:33:48.240 --> 1:33:50.280 But what we're talking about with our research is something 1:33:50.320 --> 1:33:52.679 a little bit different that most of us don't notice. 1:33:52.720 --> 1:33:54.080 We don't even know how to talk about it. 1:33:54.200 --> 1:33:56.479 We know how to talk about stock market stress and 1:33:56.920 --> 1:33:58.760 political stress and things like that, but we don't know 1:33:58.840 --> 1:34:02.080 how to talk about what we ended up calling microstress. 1:34:02.520 --> 1:34:04.840 And this is a particular thing that we observed in. 1:34:04.960 --> 1:34:08.759 Research with high performers, where originally the research was intended 1:34:08.800 --> 1:34:10.439 to look at what did they do better than the 1:34:10.479 --> 1:34:12.760 rest of us, How do they work more effectively with 1:34:12.840 --> 1:34:16.320 other people? How do they maintain their status as high performers? 1:34:16.640 --> 1:34:20.000 And we interviewed three hundred men and women equal numbers 1:34:20.360 --> 1:34:23.320 who were dubbed high performers by their organizations to try 1:34:23.360 --> 1:34:26.080 to get at those best practices. And then early on 1:34:26.280 --> 1:34:28.640 in our research we started to notice after a bit 1:34:28.720 --> 1:34:31.560 of the veneer had gone off in the interview that 1:34:31.680 --> 1:34:34.640 little by little became clear that even these high performers 1:34:34.880 --> 1:34:36.320 were kind of barely hanging on. 1:34:36.560 --> 1:34:37.479 They were swimming on. 1:34:37.560 --> 1:34:40.759 What we ultimately called microstress, things that are so brief 1:34:40.880 --> 1:34:43.559 and so invisible to us that we barely notice them. 1:34:43.880 --> 1:34:45.840 What cumulatively they add up? 1:34:46.120 --> 1:34:48.519 And what specifically, can you give us a few examples, 1:34:48.600 --> 1:34:50.479 how does that sort of permeate in our day to 1:34:50.600 --> 1:34:52.880 day lives? Like what specifically would be an example of 1:34:52.960 --> 1:34:53.720 a microstress? 1:34:54.200 --> 1:34:56.040 Sure, so we put them in three buckets, and I 1:34:56.080 --> 1:34:58.000 think you'll relate to all three of them, but in 1:34:58.080 --> 1:35:01.840 three categories. One or microstress is that drain your personal capacity, 1:35:02.120 --> 1:35:03.479 your ability to get things done. 1:35:03.760 --> 1:35:05.640 And a really good example of that is. 1:35:06.160 --> 1:35:09.360 Having unpredictable behavior from a person in authority, a boss 1:35:09.439 --> 1:35:11.960 or a manager, not a toxic boss or a jerk, 1:35:12.040 --> 1:35:14.360 but maybe a boss who stops you in the hallway 1:35:14.479 --> 1:35:14.960 to say. 1:35:14.840 --> 1:35:16.960 He's got a new idea and are you supposed to 1:35:16.960 --> 1:35:18.920 be pursuing that or not? Are you putting other things 1:35:18.920 --> 1:35:19.479 aside or not? 1:35:19.680 --> 1:35:22.640 Just not one hundred percent always knowing what's expected of 1:35:22.720 --> 1:35:26.200 you from the person above, or having a surgeon responsibility 1:35:26.200 --> 1:35:29.440 as a worker at home. That's category one personal capacity 1:35:30.040 --> 1:35:32.080 or another one that I think most of us experience 1:35:32.120 --> 1:35:35.720 in some way, or micro stresses that deplete our emotional reserve. So, 1:35:35.920 --> 1:35:39.160 for example, if you work around people who are just 1:35:39.240 --> 1:35:41.840 always stressed out, even if you're not stressed out, the 1:35:41.960 --> 1:35:45.200 secondhand stress from them is going to affect you. Micro 1:35:45.280 --> 1:35:48.040 Stresses are things that happen in our interactions with other 1:35:48.160 --> 1:35:50.760 people that are so brief and so baked into our 1:35:50.880 --> 1:35:54.120 day that you literally barely remember them. And individually they're 1:35:54.160 --> 1:35:57.000 all manageable, but what happens is they layer up over 1:35:57.080 --> 1:35:59.280 the day, over the week, over the month, and they 1:35:59.320 --> 1:36:00.800 actually take your real big toll on you. 1:36:01.120 --> 1:36:03.800 All Right, So media can be a very stressful world 1:36:03.800 --> 1:36:06.479 because it's just the way it is. So what is 1:36:06.560 --> 1:36:09.200 the connection? And some of us thrive on it. I 1:36:09.240 --> 1:36:11.040 mean I kind of like it when it's fast and furious, 1:36:11.160 --> 1:36:13.200 but not that isn't always the case, and you can't 1:36:13.240 --> 1:36:14.960 do that for one hundred percent of the time, otherwise 1:36:15.000 --> 1:36:16.920 you're just going to kind of pass out. But having 1:36:17.000 --> 1:36:21.360 said that, what is the relationship between stress and productivity? 1:36:21.400 --> 1:36:24.599 There's got to be probably this interesting balance, right, because 1:36:24.600 --> 1:36:26.479 a little bit of stress gets the adrenaline going and 1:36:26.560 --> 1:36:29.799 can kind of in some ways maybe make you more productive. 1:36:29.880 --> 1:36:32.040 But I'm guessing too much, and that's not good. 1:36:32.520 --> 1:36:34.200 Too much of that is definitely not good. 1:36:34.240 --> 1:36:36.400 And again we started with high performers, So we started 1:36:36.439 --> 1:36:39.280 with people who were already seen widely seen as being 1:36:39.360 --> 1:36:40.519 better than the rest of us. 1:36:40.720 --> 1:36:42.000 They were just really good at doing a. 1:36:42.000 --> 1:36:43.720 Lot of work, being effective collaborators. 1:36:43.960 --> 1:36:46.599 But as we started to peel back, we realized even they. 1:36:46.680 --> 1:36:50.000 Really were almost overwhelmed by all this warm micro stress, 1:36:50.040 --> 1:36:52.839 to the point where it potentially threatened to derail their careers. 1:36:53.120 --> 1:36:55.880 What happens is you're always in reactive mode. 1:36:55.880 --> 1:36:57.160 You're always you know, you open. 1:36:57.000 --> 1:36:58.960 Your email first thing in the morning, and you're already 1:36:59.000 --> 1:37:01.960 feeling overwhelmed behind as opposed to any of us trying 1:37:02.040 --> 1:37:04.360 to shape and plant our day, and we're thinking about 1:37:04.400 --> 1:37:06.880 which balls can we get away with dropping, rather than 1:37:07.160 --> 1:37:08.760 how do I do my best work today or what 1:37:08.840 --> 1:37:10.200 do I actually want to focus on today. 1:37:10.240 --> 1:37:11.320 It makes you in a. 1:37:11.360 --> 1:37:14.840 Reactive posture rather than a proactive posture, and none of 1:37:14.920 --> 1:37:16.840 us do our best work when we're always trying to 1:37:16.880 --> 1:37:19.519 figure out again which balls can we get away with dropping? 1:37:19.520 --> 1:37:20.519 Because we can't do it all. 1:37:20.880 --> 1:37:24.479 What are the financial repercussions for letting micro stresses add up? 1:37:25.360 --> 1:37:29.839 Well, Financially, it's not good for who you are. You're 1:37:29.920 --> 1:37:32.519 not going to be at your best, most effective you are. 1:37:32.760 --> 1:37:35.480 Potentially even one of the micro stresses that we identified 1:37:35.640 --> 1:37:38.160 is pressure to pursue goals that are out of sync 1:37:38.200 --> 1:37:39.200 with your personal values. 1:37:39.280 --> 1:37:41.640 So it also career wise work that could be a 1:37:41.680 --> 1:37:42.719 detriment correct career. 1:37:42.680 --> 1:37:45.439 Correct, it could indeed, if you are always sort of 1:37:45.479 --> 1:37:48.800 pursuing what someone else's version of success is and it's 1:37:48.880 --> 1:37:51.040 never feeling comfortable to you, or it's never who you are, 1:37:51.600 --> 1:37:53.559 you're never going to thrive really in the long run. 1:37:53.640 --> 1:37:55.320 You may you may have a good run five or 1:37:55.360 --> 1:37:57.400 seven years, but at some point you're going to realize 1:37:57.439 --> 1:37:59.400 this is not who I want to be. So you're 1:37:59.439 --> 1:38:02.160 not going to be your best. You're probably career wise 1:38:02.280 --> 1:38:03.680 not going to thrive in the way that you want 1:38:03.720 --> 1:38:04.040 to thrive. 1:38:04.320 --> 1:38:04.920 And the most. 1:38:04.760 --> 1:38:07.920 Importantly of all, you're you're not gonna like who you are. Eventually, 1:38:08.000 --> 1:38:10.280 it's going to kind of either way, you just small ways. 1:38:10.360 --> 1:38:13.000 So none of us are our best when microstress is 1:38:13.120 --> 1:38:13.760 overwhelming us. 1:38:13.840 --> 1:38:15.960 And I like Karen, how you make the distinction certainly 1:38:15.960 --> 1:38:19.959 the book Between Stress, Microstress and Secondary micro Stresses thirty seconds. 1:38:20.320 --> 1:38:22.160 One piece of advice for those folks who are listening 1:38:22.160 --> 1:38:22.360 to this. 1:38:23.439 --> 1:38:26.120 One piece of advice is to actually stop and have 1:38:26.400 --> 1:38:29.439 five minute clarification conversations with the people that you work with. 1:38:29.680 --> 1:38:31.680 So many of us were moving so quickly, and we're 1:38:31.680 --> 1:38:34.640 working with ever shifting cast of characters, people who are 1:38:34.680 --> 1:38:36.320 new at colleagues and things like that. We don't know 1:38:36.360 --> 1:38:38.719 how to work together very well, and we assume things, 1:38:38.800 --> 1:38:40.679 and that can lead to all kinds of micro stresses, 1:38:40.760 --> 1:38:44.120 just misalignments or small performance misses. So literally take five 1:38:44.160 --> 1:38:47.720 minutes at the end of meetings and just clarify who, what, when, 1:38:48.120 --> 1:38:49.000 what's the next step? 1:38:49.080 --> 1:38:52.040 Don't that simple step can make a really big difference in. 1:38:52.080 --> 1:38:54.519 Your Workstrogical we do that sometimes in the newsroom where 1:38:54.520 --> 1:38:56.800 you're having conflicting stories. It's like, hey, everybody, get over 1:38:56.880 --> 1:38:59.680 here and for three minutes, let's set everything straight. K 1:39:00.000 --> 1:39:03.559 and thanks and a very timely conversation. Karen Dylan, Editorial 1:39:03.640 --> 1:39:06.519 Director and the Microstress Effect, her book. 1:39:07.280 --> 1:39:07.880 This is the. 1:39:07.920 --> 1:39:12.679 Bloomberg Business Week podcast, available on Apple, Spotify and anywhere 1:39:12.720 --> 1:39:16.040 else you can get your podcasts. Listen live each weekday 1:39:16.120 --> 1:39:17.800 starting at two pm Eastern. 1:39:17.600 --> 1:39:20.920 On Bloomberg dot Com, the iHeartRadio app tune In, and 1:39:21.040 --> 1:39:22.280 the Bloomberg Business app. 1:39:22.439 --> 1:39:25.200 You can also watch us live on Bloomberg Quick Take 1:39:25.400 --> 1:39:28.719 every weekday on YouTube and always on the Bloomberg terminal