WEBVTT - Bankman-Fried's Fall as Crypto King 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.360 --> 0:00:09.840 you the latest news from the worlds of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.720 --> 0:00:17.200 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:19.680 analyst in more than one and twenty countries. You can 0:00:19.680 --> 0:00:23.279 download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.440 --> 0:00:25.239 You can also listen to our radio show at two 0:00:25.239 --> 0:00:27.920 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.960 --> 0:00:31.640 YouTube search Bloomberg glovel News. You know it's a big 0:00:31.640 --> 0:00:33.640 story in our world when we create a daily, running 0:00:33.640 --> 0:00:36.159 and constantly updating report on the Bloomberg and we have 0:00:36.320 --> 0:00:38.640 and are when it comes to the dramatic collapse of 0:00:38.680 --> 0:00:41.840 Sam bankman Fried's FTX crypto exchange, which wiped out about 0:00:41.840 --> 0:00:45.080 two hundred billion in crypto market value. So let's get 0:00:45.120 --> 0:00:47.760 the latest on this constantly evolving story. We got with 0:00:47.840 --> 0:00:50.880 us Katie graifel Che's Bloomberg and the News senior markets reporter, 0:00:50.920 --> 0:00:52.760 also the co host of Crypto I r L on 0:00:52.960 --> 0:00:54.800 Bloomberg quick take. She's with us right now in the 0:00:54.800 --> 0:00:58.080 Bloomberg Interactive Brokers studio. So, Katie, over the weekend, I 0:00:58.120 --> 0:00:59.840 don't know about you, but I was glued to Twitter 0:01:00.000 --> 0:01:02.120 in a really unhealthy way. Why, I know, more so 0:01:02.160 --> 0:01:05.520 than usual. I mean, wait, you you were, You knew 0:01:05.520 --> 0:01:08.200 that I was. I think it for both of us 0:01:08.319 --> 0:01:11.120 more so than usual, glued to Twitter in an unhealthy way. 0:01:11.280 --> 0:01:14.280 Part of the reason why is because Sam Bankman Freed 0:01:14.720 --> 0:01:17.679 is tweeting's tweeting right now. I know he's tweeting this 0:01:17.760 --> 0:01:20.000 kind of cryptic thing, write the word what, and then 0:01:20.040 --> 0:01:22.320 he's spelling out in one letter at a time, H 0:01:22.440 --> 0:01:27.200 A P P, which seems to be you know what happened? Yeah, yeah, So, 0:01:27.319 --> 0:01:29.280 I mean it makes sense that you're glued to Twitter 0:01:29.319 --> 0:01:31.360 because a lot of this is playing out over Twitter. 0:01:31.440 --> 0:01:33.480 You think back to this time last week, you had 0:01:33.480 --> 0:01:37.360 CZ and Sam Bankman Freed s SPF tweeting at each other. 0:01:37.680 --> 0:01:41.400 That's where this all started. And uh, it's just such 0:01:41.440 --> 0:01:46.120 an evolving, fast evolving story. It's hard to keep up. 0:01:46.880 --> 0:01:49.440 But where are we? Where are we right now? I mean, 0:01:49.480 --> 0:01:51.640 we know that f t X is under investigation. We 0:01:51.680 --> 0:01:56.280 know that regulators or rather enforcement in the Bahamas have 0:01:56.400 --> 0:01:58.480 spoken to Sam Bankman Freed. If you look at what's 0:01:58.480 --> 0:02:02.520 happening over at buying Nance CEO, c Z is apparently 0:02:02.560 --> 0:02:05.840 setting up this recovery funds, but he hasn't really offered 0:02:05.880 --> 0:02:08.960 any details on what that means. It's a little bit 0:02:09.000 --> 0:02:10.960 of a victory. I heard somebody in the newsroom whose 0:02:11.000 --> 0:02:13.720 name will will not be mentioned. So what is it 0:02:13.760 --> 0:02:16.240 like all of a sudden finances like the Federal Reserve 0:02:16.360 --> 0:02:18.840 for like, alright, the lender of last resort? Is this 0:02:18.960 --> 0:02:21.000 like their duty to do this? I don't know, But 0:02:21.040 --> 0:02:23.000 in any case, cz is definitely taking a bit of 0:02:23.040 --> 0:02:26.239 a victory lap here calling out the bad actors. But 0:02:26.320 --> 0:02:28.200 the question everyone wants to know is what is the 0:02:28.240 --> 0:02:30.919 next shoe to drop? And no one really knows what 0:02:30.919 --> 0:02:32.600 do you mean by that, like another crypto firm to 0:02:32.600 --> 0:02:35.000 go under layoffs? What are you talking about that exactly? 0:02:35.000 --> 0:02:36.920 I mean A lot of attention is being paid to 0:02:37.320 --> 0:02:41.799 crypto dot com for example, that's another exchange mistakenly sent 0:02:42.000 --> 0:02:44.639 something to the tune of four hundred million. I think 0:02:44.639 --> 0:02:47.720 it was worth of ether to the wrong addressed. So 0:02:47.840 --> 0:02:50.480 people are watching all the other exchanges right now. You 0:02:50.520 --> 0:02:52.959 have a lot of attention being paid to the lenders 0:02:52.960 --> 0:02:56.679 such as Block five, which is owned by ft X 0:02:56.800 --> 0:02:59.639 or not owned by They had gotten a rescue line 0:02:59.840 --> 0:03:04.000 for um F t X. So right after this news broke, 0:03:04.000 --> 0:03:06.359 everyone was looking at blocked by. They did halt withdrawals. 0:03:07.080 --> 0:03:09.880 What happens with Genesis, one of the biggest remaining lenders 0:03:09.919 --> 0:03:12.519 remains to be seen. And just who has exposure? I 0:03:12.560 --> 0:03:15.600 mean that's the drip feed of news. Uh. The crypto market. 0:03:15.600 --> 0:03:17.280 If I look at our monitor on the Bloomberg, I mean, 0:03:17.280 --> 0:03:20.120 it looks like it has stabilized, at least for the moment. Right, 0:03:20.160 --> 0:03:22.680 We're not losing ground today. We've got what bitcoin. I know, 0:03:22.760 --> 0:03:25.600 you were on air with me and just watching bitcoin, 0:03:25.800 --> 0:03:27.960 you know, go down and down go, you know further, 0:03:28.040 --> 0:03:31.280 it's below seventeen thousand, but above sixteen thousand. See, that's 0:03:31.320 --> 0:03:33.600 the thing. I think that's one of the I don't know. 0:03:33.639 --> 0:03:35.920 Everything is interesting right now, but it's more maybe one 0:03:35.960 --> 0:03:39.000 of the more puzzling things is why isn't bitcoin down more? Uh, 0:03:39.040 --> 0:03:42.080 there's it's obviously down a lot. It's already fallen a lot. 0:03:42.200 --> 0:03:45.760 This here, but I don't know. I have said this 0:03:45.800 --> 0:03:47.400 a few different times. If you had told me that 0:03:47.440 --> 0:03:50.520 f t X was going to file for bankruptcy, I 0:03:50.520 --> 0:03:53.000 would have said, okay, that I mean bitcoin below ten 0:03:53.080 --> 0:03:56.320 thousand obviously did not happen. I was wrong. What does 0:03:56.360 --> 0:03:58.960 this mean for? I mean, I don't They've been articles 0:03:59.000 --> 0:04:02.360 over the weekend about potential repercussions at Sam Bateman Freed 0:04:02.560 --> 0:04:06.200 could see. But I'm thinking bigger picture here, Katie, like 0:04:06.240 --> 0:04:08.480 what it means for Since he was the face of crypto, 0:04:08.800 --> 0:04:11.960 his face was literally on advertisements in San Francisco. F 0:04:12.280 --> 0:04:15.080 f t X was on the Miami Stadium. Crypto dot 0:04:15.160 --> 0:04:17.559 com is on the Staples formerly known as the Staple 0:04:17.600 --> 0:04:20.599 Centers Crypto dot com. I mean, what does it all mean. 0:04:21.200 --> 0:04:25.360 I think it's important to watch what's happening. In terms 0:04:25.400 --> 0:04:27.799 of the exchanges. There was a story on the Bloomberg 0:04:27.839 --> 0:04:31.240 today that exchanges of seeing billions of dollars in outflows. 0:04:31.279 --> 0:04:33.600 I think you're seeing a big retreat among holders. They 0:04:33.600 --> 0:04:35.800 want to take their money off exchanges, they want a 0:04:35.839 --> 0:04:39.120 gold to cold storage, they want control of their keys. 0:04:39.160 --> 0:04:43.960 This big centralization that we've seen in crypto, which you know, 0:04:44.120 --> 0:04:45.719 there's been a lot of jokes like, oh, it's not 0:04:45.760 --> 0:04:48.839 so decentralized after all. But maybe you're seeing sort of 0:04:48.839 --> 0:04:52.240 the unraveling of that because you are seeing this big 0:04:52.400 --> 0:04:56.040 push that people don't want to be on exchanges anymore. 0:04:56.040 --> 0:04:58.240 They want to have control of their keys, control of 0:04:58.240 --> 0:05:00.520 their bitcoins. What I thought it was supposed to be 0:05:00.520 --> 0:05:02.760 about initially, When I think about it, when you start 0:05:02.800 --> 0:05:06.919 to get other players involved, it becomes a different thing exactly. 0:05:07.000 --> 0:05:08.720 I think. I think it was part of the growing 0:05:08.760 --> 0:05:12.760 pains of trying to create new investors in the cryptosphere, 0:05:12.960 --> 0:05:17.440 was this push towards centralization. So I think that's going 0:05:17.480 --> 0:05:19.360 to be one of the storylines to watch over the 0:05:19.360 --> 0:05:22.039 next few months. I also wonder what it means for 0:05:22.080 --> 0:05:24.880 the other firms that SPF and f t X went 0:05:24.960 --> 0:05:27.320 to quote unquote rescued right. He was seen as the 0:05:27.320 --> 0:05:31.520 white Knight, and with the collapse of three arrows, for example, Voyager, 0:05:32.160 --> 0:05:35.200 and you know what happens to those firms. Yeah, I 0:05:35.240 --> 0:05:36.880 wish I had an answer. One of the ways I 0:05:36.920 --> 0:05:40.280 phrased it, maybe it was one of you earlier today 0:05:40.320 --> 0:05:43.120 I can't even remember. Is basically it would be easier 0:05:43.720 --> 0:05:48.680 to talk about the projects that SPF or Alimato or 0:05:48.720 --> 0:05:51.360 f t X wasn't involved with if you think about 0:05:51.680 --> 0:05:54.160 not involved exactly, if you think about the extent he 0:05:54.279 --> 0:05:57.400 had so many he had tentacles in almost every corner 0:05:57.560 --> 0:06:00.880 of the space. And there's a great you know, right 0:06:00.960 --> 0:06:02.600 up in the Financial Times over the weekend. And then 0:06:02.600 --> 0:06:04.560 Matt Levine took it on today with the balance sheet 0:06:04.839 --> 0:06:08.039 of Serum I had not even heard of. I had neither. 0:06:08.760 --> 0:06:11.120 But also the Robin Hood Steak, which is, you know, 0:06:11.360 --> 0:06:14.520 among the most valuable assets of the company has It's amazing. 0:06:14.600 --> 0:06:18.400 I believe it was nine hundred nine billion dollars in liabilities, 0:06:18.440 --> 0:06:22.240 nine hundred million nine million in liquid assets. I'm not 0:06:22.400 --> 0:06:24.760 great at maths, but it doesn't seem to add up. 0:06:24.800 --> 0:06:26.560 There's a hole there. Well, and you do wonder if 0:06:26.560 --> 0:06:32.120 there was more regulatory oversight would this have happened. I 0:06:32.120 --> 0:06:35.960 don't say the R word degulation. I mean, we're not 0:06:36.000 --> 0:06:38.640 even talking about the U S company. That's another question. 0:06:38.680 --> 0:06:40.440 I have not enough for the time we have left. 0:06:40.800 --> 0:06:43.599 Bahamas Based filed in the US for bankruptcy. I don't 0:06:43.600 --> 0:06:46.000 know why, how does that work? I don't know. God, 0:06:46.040 --> 0:06:48.320 the world is a funny place. As Katie said, a 0:06:48.360 --> 0:06:50.800 lot of things interesting in this one Katy Greifeld, Thank 0:06:50.839 --> 0:06:53.440 you so much. She is Bloomberg New Senior Markets reporter 0:06:53.760 --> 0:06:57.920 and so much more. This is Bloomberg. This is Bloomberg 0:06:57.920 --> 0:07:01.600 Business Week with Carol Masser and Bloomberg Quick Takes Tim 0:07:01.680 --> 0:07:05.520 Stinovic on Bloomberg Radio. We'll walk into an Apple store 0:07:05.560 --> 0:07:07.200 and you know what, You're going to get, white oak 0:07:07.320 --> 0:07:10.000 tables and eat rows at stores all around the globe. 0:07:10.000 --> 0:07:13.480 And yet what we're starting to see some differences actually 0:07:13.480 --> 0:07:16.000 at some stores as Apple retail workers, Tim are starting 0:07:16.000 --> 0:07:18.240 to union. Not interestingly enough, it's kind of mirroring what's 0:07:18.240 --> 0:07:21.200 happening at other companies and other stores around the country. 0:07:21.400 --> 0:07:24.960 We got Josh Idolson all over it in Bloomberg business Week. 0:07:25.040 --> 0:07:26.880 His story is featured in the upcoming issue of Business 0:07:26.880 --> 0:07:28.520 Week magazine. You can read it now though on the 0:07:28.520 --> 0:07:31.680 Bloomberg terminal and at bloomberg dot com slash of business Week. 0:07:31.760 --> 0:07:34.160 Josh joins us on the phone from San Francisco. He's 0:07:34.160 --> 0:07:36.640 a labor reporter for Bloomberg News. Also with us right 0:07:36.640 --> 0:07:39.040 now is Joel Webber. He's the editor of Bloomberg Business Week. 0:07:39.040 --> 0:07:42.560 He's with us in the Bloomberg Interactive Broker's studio So, Joel, 0:07:42.600 --> 0:07:45.040 what happened here? I thought the Apple Genius Bar and 0:07:45.240 --> 0:07:49.560 the Apple store were great places to work. So Apple 0:07:49.640 --> 0:07:55.840 obviously the world's most valuable UH company. UM. And the 0:07:55.880 --> 0:07:58.480 thing that I think we've all assumed with that UM 0:07:58.640 --> 0:08:01.640 is that it is this great place to work UM. 0:08:01.720 --> 0:08:06.120 And the stores themselves, UM. You know, there's corporate and 0:08:06.160 --> 0:08:10.120 then there's store. UM has never really felt like a 0:08:10.160 --> 0:08:14.320 retail environment. It's felt like a high concept UH store 0:08:15.280 --> 0:08:19.400 where you know, you you have these objects of desire 0:08:19.640 --> 0:08:23.360 that are on display in a very curated place, and 0:08:23.520 --> 0:08:26.200 you know, obviously if you have a problem with those products, 0:08:26.240 --> 0:08:28.360 you have to go there. But it's never really felt 0:08:28.400 --> 0:08:30.880 like a retail job. But now the thing that's happened, 0:08:31.040 --> 0:08:33.720 and what Josh is reporting is based on, is that 0:08:34.480 --> 0:08:38.600 rit large corporate America is going through this thing with 0:08:39.360 --> 0:08:44.600 labor and unionization has really stepped up. And we've seen 0:08:44.640 --> 0:08:48.760 it at Amazon, We've seen it at Starbucks, as Josh 0:08:48.800 --> 0:08:52.680 writes about UH, and now we're even beginning to see 0:08:52.679 --> 0:08:57.160 it at Apple specifically in the stores. So Josh, bring 0:08:57.280 --> 0:09:02.040 us up to speed what's changed in the stores. Workers 0:09:02.080 --> 0:09:04.480 who have been in these stories a long time. Today, 0:09:04.679 --> 0:09:09.000 the culture has really transformed, and that these jobs in 0:09:09.120 --> 0:09:12.040 Apple stores have started to feel a lot more like 0:09:12.200 --> 0:09:17.400 retail jobs, in particular because of concerns about understaffing, an 0:09:17.400 --> 0:09:22.559 issue that workers say gets blamed by management on workers 0:09:22.600 --> 0:09:26.480 for calling out up sick and with upselling, this pressure 0:09:26.960 --> 0:09:30.880 to get people to spend more money, including getting people 0:09:30.920 --> 0:09:34.280 who came in with the device they wanted fix too 0:09:34.280 --> 0:09:38.320 instead traded in and buy something new what the company 0:09:38.360 --> 0:09:44.599 calls an ownership opportunity, and workers have described ways that 0:09:44.600 --> 0:09:49.000 that performance on selling stuff to customers is measured, and 0:09:49.040 --> 0:09:53.360 that those measurements actually are shared with coworkers, whether it's 0:09:53.400 --> 0:09:56.320 an email or on the wall in the break room 0:09:56.440 --> 0:10:01.000 and can be marked and read. If you're say statistics 0:10:01.040 --> 0:10:03.800 are below where the company wants them to be. What 0:10:03.840 --> 0:10:05.959 was that a shift that happened recently or is it 0:10:06.000 --> 0:10:08.400 a shift that's just coming into relief right now? I mean, 0:10:08.679 --> 0:10:13.040 where do we attribute this to and when? So? Workers 0:10:13.080 --> 0:10:16.280 say that things began to change after Tim Cook took 0:10:16.360 --> 0:10:19.000 over in two thousand eleven and have changed in a 0:10:19.000 --> 0:10:22.880 more accelerated way since Dear Joe O'Brien, the head of 0:10:22.960 --> 0:10:28.640 retail for Apple, took that position. In workers describe things 0:10:28.760 --> 0:10:33.199 like bingo game to try to get you to sell 0:10:33.960 --> 0:10:39.720 Apple devices, like the stylists, and the experience of being 0:10:39.840 --> 0:10:43.520 chided or having your commitment to the company question because 0:10:43.520 --> 0:10:47.160 you missed a chance to upsell a customer about purchasing 0:10:47.200 --> 0:10:50.640 Apple Care. And some workers who've been there a long 0:10:50.679 --> 0:10:54.080 time really feel like unionization is the path to try 0:10:54.120 --> 0:10:56.439 to protect the values that the company is supposed to 0:10:56.520 --> 0:11:00.320 stand for and the vision of what that worked places 0:11:00.400 --> 0:11:03.040 like for workers and for customers that drew them to 0:11:03.160 --> 0:11:05.520 the company in the first place. I gotta say, Josh, 0:11:05.520 --> 0:11:07.480 it feels like, you know, going to buy a car 0:11:07.640 --> 0:11:09.280 like a million years ago, and they, you know, were 0:11:09.280 --> 0:11:12.800 selling you the roof, the rust undercoding, you know, make 0:11:12.840 --> 0:11:14.280 sure you kind of throw it in. That's what it 0:11:14.320 --> 0:11:17.400 felt like, and it felt so on Apple. Having said 0:11:17.400 --> 0:11:20.920 that in your story, you say Apple's overall control over 0:11:20.960 --> 0:11:25.680 its workforce um as having problems. It's really on multiple fronts. 0:11:25.800 --> 0:11:28.839 What's going on at Apple more broadly, you know, whether 0:11:28.840 --> 0:11:31.480 it's Fox Con, whether it's you talk about the maps 0:11:31.520 --> 0:11:33.760 at there's a lot of stuff going on. It feels 0:11:33.800 --> 0:11:37.360 like when it comes to Apple workers, there's been scrutiny 0:11:37.480 --> 0:11:42.320 for a long time about Apple's international supply chain. More recently, 0:11:42.320 --> 0:11:47.000 we've seen Apple contract workers speaking up, including at an 0:11:47.120 --> 0:11:51.040 office that they call a black site, where workers said 0:11:51.080 --> 0:11:54.640 there were restrictions on even talking to direct employees of Apple. 0:11:55.040 --> 0:11:58.000 We saw during the pandemic some of the software workers 0:11:58.400 --> 0:12:03.840 becoming outspoken about issues from sexual harassment to return to 0:12:03.880 --> 0:12:08.720 work pressure, to safety, and these struggles are connected. In fact, 0:12:09.160 --> 0:12:12.360 some of the software workers who alleged they were forced 0:12:12.400 --> 0:12:14.600 out of the company took road trips and went and 0:12:14.679 --> 0:12:18.640 visited the Apple stores and gave out cards with QR 0:12:18.720 --> 0:12:21.520 codes to encourage the retail workers to get in touch 0:12:21.600 --> 0:12:24.880 with union organizers. So, Josh, I know some of this 0:12:25.000 --> 0:12:28.280 is uh opique, but you know the stores themselves, Like, 0:12:28.320 --> 0:12:32.680 how big of a of a of a portion of 0:12:32.679 --> 0:12:36.200 the company's bottom line do the stores account for? Because ultimately, 0:12:36.880 --> 0:12:39.520 one of the reasons that I thought this story was significant, 0:12:39.600 --> 0:12:41.839 He's like, look like, we're almost in the holidays here. 0:12:41.960 --> 0:12:45.160 You're gonna go holiday shopping an Apple store. You're gonna 0:12:45.240 --> 0:12:49.480 between air pods and you know iPads, and you know, 0:12:49.520 --> 0:12:52.400 more often than not you might find yourself walking through 0:12:52.400 --> 0:12:56.520 an Apple store. So, so how much of the company's revenue, 0:12:56.559 --> 0:13:00.240 which is considerable um gets broken out into sort of 0:13:00.280 --> 0:13:05.079 the retail bucket in general. So Apple does not disclose 0:13:05.120 --> 0:13:07.880 how much of its sales happen in the stores versus 0:13:08.000 --> 0:13:12.400 online and or other people's stores, but it reported record 0:13:12.840 --> 0:13:17.080 fourth quarter revenue, most of it from selling products, and 0:13:17.559 --> 0:13:21.360 as the story discusses, these stores have played a pivotal 0:13:21.440 --> 0:13:25.760 role in getting people comfortable with and excited about Apple's 0:13:25.760 --> 0:13:28.240 products and building a sense of loyalty and connection to 0:13:28.320 --> 0:13:32.240 the brand. As one expert it to me, the store 0:13:32.280 --> 0:13:34.800 is also a temple to worship at the altar of 0:13:35.080 --> 0:13:39.000 the Apple brand. I in researching this story, read an 0:13:39.040 --> 0:13:42.760 article about the launch of the Apple store in taws 0:13:42.760 --> 0:13:45.880 in Maryland, the one that now more than a decade later, 0:13:45.960 --> 0:13:50.920 has unionized. Where Apple is talking about these stores is 0:13:51.160 --> 0:13:53.679 a place for people to get to know this company 0:13:53.679 --> 0:13:56.199 that at the time had a much smaller market share. 0:13:56.280 --> 0:14:01.319 Now Apple's market share has shot up for personal computers, 0:14:01.320 --> 0:14:04.679 and more importantly, they now have a majority market share 0:14:04.679 --> 0:14:09.319 in the US for that iPhone, And there's an incalculable 0:14:09.440 --> 0:14:12.520 role that the Apple store has played in building that 0:14:12.600 --> 0:14:17.079 relationship with customers. And it's a relationship that some workers 0:14:17.240 --> 0:14:21.080 feel is being undermined by this pressure to squeeze more 0:14:21.120 --> 0:14:23.800 money out of those customers and at the same time 0:14:23.840 --> 0:14:28.520 to squeeze more labor out of these overstretched workers. Well, 0:14:28.600 --> 0:14:31.120 it's a great story, and I know in the upcoming 0:14:31.160 --> 0:14:33.440 issue of Bloomberg Business Week untill be out later on 0:14:33.560 --> 0:14:37.240 this week or thanks to Josh Idolson, Josh's labor reporter, 0:14:37.320 --> 0:14:39.800 Bloomberg News with us on the phone and via zoom 0:14:39.840 --> 0:14:42.400 from San Francisco, and of course our thanks to the 0:14:42.480 --> 0:14:44.560 editor of Bloomberg Business Week, Joel Webber. And again you 0:14:44.560 --> 0:14:47.360 can also find this story at Bloomberg dot com Slash 0:14:47.400 --> 0:14:50.480 business Week can always on the Bloomberg terminal. But interesting 0:14:50.480 --> 0:14:52.440 in terms of the evolution of what we're seeing here 0:14:52.440 --> 0:14:54.720 at Apple, Yeah, and also just interesting seeing in the 0:14:54.720 --> 0:14:57.240 broader context of what's happening with the other companies that 0:14:57.400 --> 0:14:59.680 Josh mentioned, including what's going on in Amazon, what's going 0:14:59.720 --> 0:15:02.840 on Starbucks, um Stars especially another one of those places 0:15:02.840 --> 0:15:04.840 where widely seen is a great place to work. You're 0:15:04.880 --> 0:15:08.840 listening to Bloomberg Business Week with Carol Messer and Bloomberg 0:15:08.920 --> 0:15:12.840 Quick Takes Tim Stinovic on Bloomberg Radio. Fill among our 0:15:12.880 --> 0:15:16.480 most read today how Presidents Joe Biden Jim Ping of 0:15:16.640 --> 0:15:19.240 China gree to a series of goodwill gestures intended to 0:15:19.280 --> 0:15:22.400 improve ties between their countries after the first in person 0:15:22.400 --> 0:15:24.640 meeting between the leaders of the U S and China 0:15:24.920 --> 0:15:28.400 since the pandemic began. Well. President Biden, speaking earlier today 0:15:28.400 --> 0:15:31.880 from Bali, on the possibility of China taking over Taiwan, 0:15:33.120 --> 0:15:36.200 I'm absolutely believe there's need not be a new Cold War. 0:15:36.560 --> 0:15:39.400 I do not think there's any imminent of attempt on 0:15:39.440 --> 0:15:43.280 the part of China to invade Taiwan, and I made 0:15:43.280 --> 0:15:46.040 it clear that our policy in Taiwan has not changed 0:15:46.160 --> 0:15:49.280 at all. That was President Biden, speaking to the press 0:15:49.320 --> 0:15:52.480 after meeting with China's President Shi jing Ping earlier today. 0:15:52.520 --> 0:15:55.040 I got a great guest with us. Dexter Tiff Roberts 0:15:55.120 --> 0:15:57.160 is back with us. He's senior Fellow for the Mansfield 0:15:57.200 --> 0:15:59.720 Center at the University of Montana, also senior Fellow at 0:15:59.720 --> 0:16:03.480 the Antic Council's Asian Security Initiative. Also former Bloomberg Business 0:16:03.480 --> 0:16:05.920 Week China bureau chief and the author of the book 0:16:05.960 --> 0:16:08.600 The Myth of Chinese Capitalism, The Worker, the Factory, in 0:16:08.640 --> 0:16:11.280 the Future of the World. He joins us via zoom 0:16:11.320 --> 0:16:13.680 from a Zola this afternoon. Dexter, good to have you 0:16:13.840 --> 0:16:16.200 back with us. What did you make of President Biden's 0:16:16.240 --> 0:16:20.040 comments following his first in person meeting UH since in 0:16:20.240 --> 0:16:24.360 years with President Chijin Ping. Yeah, well, clearly he's trying 0:16:24.400 --> 0:16:29.000 to reassure Beijing that the policy hasn't changed. And you 0:16:29.080 --> 0:16:32.280 have to keep in mind this comes after I think 0:16:32.320 --> 0:16:36.840 maybe seven separate statements by Biden that the US would 0:16:36.880 --> 0:16:40.040 come to the defense of Taiwan in the case of 0:16:40.080 --> 0:16:45.240 an invasion by Beijing and UH so that not surprisingly 0:16:45.360 --> 0:16:48.880 has gotten Beijing very riled up. So Beijing, I think 0:16:49.000 --> 0:16:52.520 they would welcome this comment, this UH support for the 0:16:52.560 --> 0:16:55.520 one child policy. On the other hand, Beijing has been 0:16:55.520 --> 0:16:58.400 saying for a while, you say one thing, you you 0:16:58.560 --> 0:17:01.840 the United States and Biden say one thing, but you 0:17:01.840 --> 0:17:05.040 you actually act in a different way, and they along 0:17:05.080 --> 0:17:08.080 with those other comments by Biden about supporting Taiwan in 0:17:08.080 --> 0:17:11.560 the military situation, there have been the repeated high level 0:17:11.640 --> 0:17:15.400 visits by various first by backing the Trump administration officials, 0:17:15.560 --> 0:17:18.399 and now those have continued a course, most recently with 0:17:18.880 --> 0:17:23.879 Pelosi's visit to Taiwan. Hey, you know, Tiff you've written 0:17:23.880 --> 0:17:26.520 about China. You know China really well, and we talked 0:17:26.520 --> 0:17:29.400 about the book, your book, The Myth of Chinese Capitalism, 0:17:29.400 --> 0:17:32.840 and you know about the divisive system that was there 0:17:32.920 --> 0:17:37.560 that ultimately you know, would be very challenging to the 0:17:37.600 --> 0:17:41.120 country's development going forward. How do you see it? I mean, 0:17:41.240 --> 0:17:44.200 is is Chinese capitalism working or do you see this 0:17:44.280 --> 0:17:47.480 is a big undoing kind of the news flow that 0:17:47.520 --> 0:17:50.240 we've seen out of China over the last month or so. 0:17:52.000 --> 0:17:55.040 I think they're unfortunately, you know, they have not made 0:17:55.080 --> 0:17:58.840 progress on getting the economy to work better, nor nor 0:17:58.920 --> 0:18:02.280 marketize it war I mean, really we've seen the opposite 0:18:02.760 --> 0:18:05.760 under Sijing Ping for a number of years now, actually 0:18:05.760 --> 0:18:10.080 going back earlier, which is this increasing imposition of state 0:18:10.119 --> 0:18:14.400 control over the economy, continuing crackdown on the private sector. 0:18:14.680 --> 0:18:17.880 And you know today what they're really dealing with is, uh, 0:18:17.920 --> 0:18:20.920 they're sort of the economy is suffering under the twin 0:18:21.000 --> 0:18:25.439 weights of both the continuing COVID zero policy, which is 0:18:25.560 --> 0:18:29.040 you know, been good at preserving life in China, which 0:18:29.040 --> 0:18:32.000 is important, but it's been deadly for the for the economy, 0:18:32.240 --> 0:18:35.520 and then also the continuing property crackdown. So I would 0:18:35.520 --> 0:18:39.399 say you know, you they continue to uh struggle with 0:18:39.440 --> 0:18:42.159 the economy and the policy really hasn't been going in 0:18:42.160 --> 0:18:44.159 the right direction. Well, how do you take because we 0:18:44.240 --> 0:18:46.440 actually talked about how Chinese a d R as a 0:18:46.520 --> 0:18:48.720 train in the US. Today we're rallying and this is 0:18:48.760 --> 0:18:51.640 because we saw a couple of things, um, some easing 0:18:51.840 --> 0:18:56.120 and help for the troubled and indebted Chinese property sector. 0:18:56.119 --> 0:18:57.920 And then on Friday we got news about maybe easing 0:18:57.920 --> 0:19:00.240 of COVID nineteen. But it does feel like a back 0:19:00.240 --> 0:19:04.480 and forth with policy. So how are we as observers 0:19:04.520 --> 0:19:07.280 not in China, how are we as investors supposed to 0:19:07.320 --> 0:19:12.600 kind of read sometimes and move forward sometimes a step backward. Well, yeah, 0:19:12.640 --> 0:19:14.680 I think that's that's what you keep seeing, and maybe 0:19:14.720 --> 0:19:17.920 unfortunately it's too often one step forward and two steps back. 0:19:18.119 --> 0:19:21.680 And I think with the first with the COVID zero policy, 0:19:22.040 --> 0:19:26.040 I know, or the some signs of easing, obviously they're welcomed. 0:19:26.359 --> 0:19:31.800 People uh have referred to them as baby steps um. 0:19:31.840 --> 0:19:36.280 And ultimately the challenge they face there is they you know, 0:19:36.359 --> 0:19:39.800 they announced the easy, the slight easings in COVID zero. 0:19:40.480 --> 0:19:44.720 You know, meanwhile, we've seen COVID surging across the country Beijing, 0:19:45.400 --> 0:19:49.040 uh Jung Joe, where the world's largest iPhone factory is, 0:19:49.320 --> 0:19:53.040 and down in Guangzhou. And they simply can't ease up 0:19:53.040 --> 0:19:55.919 on these policies until first of all, they have a 0:19:56.000 --> 0:19:59.800 much broader vaccination program across the country, particularly with elderly 0:19:59.840 --> 0:20:02.440 p people who have a low level of vaccination there, 0:20:02.880 --> 0:20:05.639 and uh and and and it's it's not gonna you know, 0:20:05.680 --> 0:20:08.760 no matter what they say about easing, They're gonna have 0:20:08.800 --> 0:20:11.560 to pull back until they actually start to get COVID 0:20:11.640 --> 0:20:14.720 under control. I think the art money to bet maybe 0:20:14.720 --> 0:20:18.479 on certainly no serious easing until after the National People's 0:20:18.520 --> 0:20:20.920 Congress next March. Wow, that's quite a bit of time, 0:20:20.960 --> 0:20:22.920 although it has been you know, close to three years 0:20:22.920 --> 0:20:25.440 at this point that they've been dealing with this. Hey, Dexter, 0:20:25.520 --> 0:20:27.119 just in the last minute that we have. You know, 0:20:27.160 --> 0:20:29.800 you lived in Beijing for what two decades when you 0:20:29.800 --> 0:20:33.400 were with Bloomberg Business Week and writing your book, Um, 0:20:33.760 --> 0:20:35.879 did what do you hear from people on the ground 0:20:36.080 --> 0:20:38.359 there right now, people you're in touch with about what 0:20:38.400 --> 0:20:41.280 life is like and how things have shifted over the 0:20:41.359 --> 0:20:44.800 last couple of years. Well, you know, first of all, 0:20:44.840 --> 0:20:47.119 I think there is a concern as that we were 0:20:47.119 --> 0:20:52.439 discussing about COVID zero, the rolling lockdowns of cities are continuing. 0:20:52.760 --> 0:20:56.000 I think there's growing frustration about that, even though there 0:20:56.000 --> 0:20:59.200 has been you know, there has been support earlier for 0:20:59.200 --> 0:21:01.720 for the gun Ru's efforts to try to keep people safe, 0:21:01.880 --> 0:21:05.160 but we're starting to see that, start to see fishers 0:21:05.160 --> 0:21:07.600 in that, if you will. I think the economy is 0:21:07.640 --> 0:21:11.000 a real worry about people, and there's also a growing 0:21:11.040 --> 0:21:14.399 concern about this politicization of the economy, this feeling that 0:21:14.800 --> 0:21:18.640 uh that politics comes first and you know, the private private, 0:21:18.800 --> 0:21:21.280 private entrepreneurs and else where. I have to bend to that. Hey, Ti, 0:21:21.280 --> 0:21:22.720 if I want to ask you kind of some rapid 0:21:22.720 --> 0:21:25.720 fire questions if I can so China and the U S. 0:21:25.720 --> 0:21:27.760 How would you describe the relationship in the way forward? 0:21:27.840 --> 0:21:31.280 Is it a good one? Oh? I think it's actually 0:21:31.600 --> 0:21:36.160 a troubled relationship. Unfortunately, you know it's there. It's really 0:21:36.200 --> 0:21:40.800 a competitive relationship. They are both see each other very 0:21:40.880 --> 0:21:45.200 much as their number one rival for for global superpower status. 0:21:45.600 --> 0:21:47.639 And you know, despite what they might say in meetings 0:21:47.680 --> 0:21:51.000 like the one yesterday between Biden, Biden and She, that 0:21:51.000 --> 0:21:54.000