WEBVTT - Bloomberg Businessweek Weekend - July 30th, 2021 0:00:01.080 --> 0:00:05.440 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.160 global business finance and tech news as it happened. Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.279 Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend 0:00:21.400 --> 0:00:24.119 edition of Bloomberg Business Week. It was a week chock 0:00:24.200 --> 0:00:27.639 full of big tech earnings and also continued Chinese crackdown 0:00:27.720 --> 0:00:31.800 on its technology and education sectors that unleashed shock waves 0:00:31.800 --> 0:00:35.239 across global markets, erasing at one point more than seven 0:00:35.479 --> 0:00:38.760 fifty billion dollars in value from US listed Chinese stocks 0:00:38.800 --> 0:00:41.400 over the course tim of just five months. Yeah, you 0:00:41.479 --> 0:00:44.560 mentioned a huge week of earnings on learnings front, Caroll, 0:00:44.640 --> 0:00:48.200 Tesla beating and that included its first one billion dollar 0:00:48.280 --> 0:00:51.519 quarter of net income, and yet Elon Musk's comments on 0:00:51.600 --> 0:00:55.360 chips supplies and production hurdles bummed out investors. One investor 0:00:55.400 --> 0:00:58.360 who's owned Tesla shares and its cars ways in. He's 0:00:58.360 --> 0:01:00.560 really well known to our audience. We're talk about Rosco, 0:01:00.640 --> 0:01:04.479 where he's always a fun and engaging conversation. We also 0:01:04.480 --> 0:01:06.560 got to talk about what's going on in the Amazon 0:01:06.800 --> 0:01:09.119 rainforest and why it's a problem for us. All I've 0:01:09.120 --> 0:01:12.360 got to say this story is a dark one. It's 0:01:12.520 --> 0:01:15.840 entitled Last Days of the Rainforest, and both you and I, um, 0:01:15.959 --> 0:01:18.080 we're really upset about it. Yeah. It's one of those 0:01:18.120 --> 0:01:19.920 stories that you read and you think to yourself, what 0:01:20.000 --> 0:01:22.920 could I be doing to actually help this situation? Because 0:01:22.959 --> 0:01:25.280 it's a global story. It affects all of us, even 0:01:25.280 --> 0:01:28.000 though it's based in the Amazon exactly. And what's interesting is, 0:01:28.080 --> 0:01:32.720 you know, we talk about climate change, the importance of companies, institutions, government. 0:01:33.400 --> 0:01:37.240 This is the Brazilian government though, making it possible from 0:01:37.280 --> 0:01:39.760 more deforestation to happen. You know, one point that I 0:01:39.840 --> 0:01:43.280 found really interesting and to be honest, deeply troubling. Carol 0:01:43.560 --> 0:01:46.560 I tweeted about this. Some scientists are suggesting that the 0:01:46.640 --> 0:01:49.600 Amazon is is now close to a tipping point at 0:01:49.640 --> 0:01:52.720 which it will become a savannah rather than a rainforest. 0:01:52.760 --> 0:01:54.760 So what that means is it's going to pump greenhouse 0:01:54.800 --> 0:01:58.480 gases into the atmosphere instead of pulling them down in 0:01:58.480 --> 0:02:00.960 These so called flying rivers are bands of moisture in 0:02:01.000 --> 0:02:03.960 the air that bring rainfall to the continent. Those are 0:02:03.960 --> 0:02:06.560 going to dry up. As many as ten thousand species 0:02:06.960 --> 0:02:10.240 maybe at risk of dying off. It's awful. Yeah, it's terrible. Listen. 0:02:10.280 --> 0:02:12.480 We're going to hear more from the reporter a little 0:02:12.520 --> 0:02:15.000 bit later on. Jessica Bryce, she's going to join us, 0:02:15.040 --> 0:02:17.519 but this is really a problem for us all. We're 0:02:17.520 --> 0:02:20.120 also gonna hear from Harvey Mason Jr. The CEO of 0:02:20.160 --> 0:02:22.480 the Recording Academy. He's going to talk about a new 0:02:22.520 --> 0:02:25.120 tune and tone for the Academy. They've had their own 0:02:25.160 --> 0:02:27.960 problems to him. We know the Grammys, which has come 0:02:28.040 --> 0:02:32.639 under some criticism in terms of diversity inclusion. So we're 0:02:32.639 --> 0:02:34.240 going to find out what he's up to. All of 0:02:34.280 --> 0:02:36.119 that to come, and we begin though with a look 0:02:36.120 --> 0:02:38.960 at this week's issue of Bloomberg Business Week magazine. The 0:02:39.000 --> 0:02:42.079 cover story. We're gonna talk a lot about this later on. 0:02:42.360 --> 0:02:45.280 It's all about Beijing sweeping crackdowns on its tech and 0:02:45.400 --> 0:02:49.440 education sectors, and also the Chinese media and regulators trying 0:02:49.480 --> 0:02:52.840 to walk it back a bit to calm investor concerns. 0:02:52.880 --> 0:02:56.280 This cover could not be time better for what we've 0:02:56.320 --> 0:02:58.640 seen in the Chinese markets over the last couple of weeks. 0:02:58.639 --> 0:03:02.160 To cover itself, moved, asked, and obey the party. This 0:03:02.240 --> 0:03:04.120 was one of our main market stories this week. How 0:03:04.200 --> 0:03:07.360 many times did we live on air through our market 0:03:07.400 --> 0:03:10.760 closes talk about what was going on with Chinese companies 0:03:10.800 --> 0:03:12.320 listed here in the U S A d r s 0:03:12.400 --> 0:03:16.040 that sold off and they bounced back because of the oversight, 0:03:16.120 --> 0:03:19.320 increased government oversight when it comes to Chinese big tech, 0:03:19.400 --> 0:03:22.200 and also they're at private education companies. And then it 0:03:22.240 --> 0:03:23.800 was interesting that all of a sudden they started to 0:03:23.840 --> 0:03:25.920 walk it back a little bit because I think they 0:03:25.919 --> 0:03:29.880 got a little bit nervous about the international investment community 0:03:29.919 --> 0:03:32.600 maybe pulling back and looking at China differently from an 0:03:32.639 --> 0:03:35.600 investment perspective. Yeah, we did just see also some of 0:03:35.600 --> 0:03:39.120 those concerns a little bit of contagious sweep into US 0:03:39.240 --> 0:03:42.520 markets and global markets as well. And I think there 0:03:42.520 --> 0:03:45.520 are some really interesting questions raised in the piece about 0:03:45.520 --> 0:03:48.240 what it means for American tech companies and what U 0:03:48.360 --> 0:03:51.240 S regulators and US investors can learn from the way 0:03:51.280 --> 0:03:53.920 that Chinese regulators are cracking down on these companies. What 0:03:53.960 --> 0:03:57.280 does it mean in the evolution of megacap tech companies, 0:03:57.560 --> 0:03:59.960 how they're treated here in the US and the story 0:04:00.160 --> 0:04:02.160 Chinese maybe going in their own direction, setting up their 0:04:02.200 --> 0:04:05.280 own new code. Speaking of new codes, we are still 0:04:05.320 --> 0:04:06.800 trying to figure out how the heck do we get 0:04:06.840 --> 0:04:09.280 back to work. Okay, we're here, we are here. We've 0:04:09.280 --> 0:04:14.280 been here for months during the pandemic. What's interesting is 0:04:14.320 --> 0:04:17.160 we were all looking at companies increasingly saying, hey, workers, 0:04:17.600 --> 0:04:19.800 fall is coming, we want you back. You're going to 0:04:19.880 --> 0:04:21.800 be back, And then all of a sudden, we started 0:04:21.800 --> 0:04:25.640 to see speaking of walking back things companies, whether it's Google, 0:04:25.640 --> 0:04:29.680 whether it's Apple, whether it's Twitter, walking back expectations for 0:04:29.760 --> 0:04:32.520 when they want their workers back in the office. I 0:04:32.560 --> 0:04:34.200 think there are a lot more questions right now than 0:04:34.200 --> 0:04:36.880 there are answers about what a distributed workforce looks like, 0:04:37.080 --> 0:04:39.000 what it means for people to be back in the office, 0:04:39.040 --> 0:04:40.800 when they'll be back in the office, who they're going 0:04:40.839 --> 0:04:43.520 to be around. One of the most sought after management 0:04:43.600 --> 0:04:45.359 jobs right now. There's an article about this in the 0:04:45.360 --> 0:04:48.200 current issue of Bloomberg Business Week. It's about people who 0:04:48.200 --> 0:04:51.920 are leading large, far flung teams through uncharted waters. It's 0:04:51.920 --> 0:04:54.520 the remote works are and it's potentially a shortcut to 0:04:54.520 --> 0:04:57.080 the c suite for rising professionals right and as our 0:04:57.080 --> 0:04:59.200 reporter writes about it, it's not a job you could 0:04:59.200 --> 0:05:01.200 have predicted six seen months ago. But here we are. 0:05:01.240 --> 0:05:03.680 And of course, the reason we're talking about this and 0:05:03.920 --> 0:05:07.239 companies walking back their expectations for opening up their offices 0:05:07.560 --> 0:05:10.440 is because of the rise of COVID cases, because of 0:05:10.440 --> 0:05:12.680 the delta variant. We've seen it in the hot spots 0:05:12.720 --> 0:05:15.080 around the world, and we're seeing in hot spots around 0:05:15.120 --> 0:05:17.000 the United States as well. I saw tweet from one 0:05:17.040 --> 0:05:19.080 of our colleagues. She wrote on Twitter, it was nice 0:05:19.120 --> 0:05:20.920 for that little two week period when we thought the 0:05:20.960 --> 0:05:23.880 pandemic was behind us, and it certainly feels like in 0:05:23.920 --> 0:05:26.160 recent weeks it hasn't been. And that's because of the 0:05:26.240 --> 0:05:28.599 rise of the delta variant, the changes in CDC guidance 0:05:28.600 --> 0:05:30.919 that we got earlier this week, and as you just mentioned, 0:05:31.000 --> 0:05:33.479 the way that companies are responding. Sorry, if you're really 0:05:33.480 --> 0:05:35.880 down and depressed, don't go anywhere, because we have some 0:05:36.000 --> 0:05:38.400 uplifting things we're going to cover as well, people who 0:05:38.440 --> 0:05:41.839 are disrupting our world. Check out the magazine because in 0:05:41.880 --> 0:05:45.240 this week's issue, in the Pursuit section is some fun 0:05:45.279 --> 0:05:47.560 things to maybe bring a smile to your face, including 0:05:47.760 --> 0:05:50.520 can I get drunk on this? Yeah, A heap of 0:05:50.600 --> 0:05:53.880 new alcohol infused ice creams are cooling down summer just 0:05:54.000 --> 0:05:57.000 in time for August. We're talking about boozy ice creams. Uh. 0:05:57.040 --> 0:06:00.320 And so what's really wonderful is our k Crater, who 0:06:00.440 --> 0:06:04.559 is our food editor here at Bloomberg Pursuits, basically giving 0:06:04.600 --> 0:06:09.040 you some recipes to make some really cool boozy drinks. 0:06:09.279 --> 0:06:11.719 Ice cream included, yeah, ice cream soda. We can also 0:06:11.760 --> 0:06:13.800 make an ice cream sandwich, milkshake, and of course the 0:06:13.800 --> 0:06:16.720 whiskey vanilla ice cream. We also take a look at 0:06:16.800 --> 0:06:19.880 some other things in Pursuit, talking about the travel agent 0:06:19.960 --> 0:06:22.680 being back on certainties and the friendly skies is forcing 0:06:22.760 --> 0:06:25.960 vacation planners to rethink the value of a professional long 0:06:26.040 --> 0:06:28.120 thought departed. How many times you want to go on 0:06:28.160 --> 0:06:30.240 a trip, you just loook it on an app And 0:06:30.279 --> 0:06:32.680 that's how we've been doing it. But because of the pandemic, 0:06:32.720 --> 0:06:36.039 because of other situations, it's trickier and so maybe we 0:06:36.080 --> 0:06:37.960 need to travel agent again. All that and more in 0:06:37.960 --> 0:06:40.680 the current edition of Bloomberg Business Week, and that new 0:06:40.720 --> 0:06:42.920 issue it is on news stands, online and on the 0:06:42.960 --> 0:06:44.880 Bloomberg We're gonna cover some of the stories over the 0:06:44.920 --> 0:06:46.800 next couple of hours, but be sure to pick up 0:06:46.839 --> 0:06:49.520 the magazine as well. You are listening to Bloomberg Business 0:06:49.520 --> 0:06:52.720 Week coming up, Tesla beats Elon tweets well, Tim, that's 0:06:52.720 --> 0:06:55.520 always a giving and one Tesla shareholder weighs in on 0:06:55.560 --> 0:06:57.919 the tech company that makes evs, at least that's what 0:06:58.000 --> 0:07:09.120 he calls it. This is Bloomberg, This is Bloomberg Business 0:07:09.160 --> 0:07:12.880 Week with Carol Messer and Bloomberg Quick Takes. Tim Spinovik 0:07:13.120 --> 0:07:17.400 from Bloomberg Radio. Among the big earnings this week, Tesla, 0:07:17.600 --> 0:07:20.800 even with second quarter profit in sales exceeding estimates. Tim, 0:07:20.840 --> 0:07:24.600 it was CEO Elon Musk's cautionary hints from the investor 0:07:24.640 --> 0:07:26.960 call that really swede investors kind of sent the stock 0:07:27.000 --> 0:07:30.280 a little bit lower. Musk also highlighted the unpredictability of 0:07:30.320 --> 0:07:33.680 chip supplies and the hurdles he expects in ramping production 0:07:33.720 --> 0:07:36.560 at two new factories in Austin and Berlin later this year. 0:07:36.640 --> 0:07:39.120 It was though the electric vehicle maker's first one billion 0:07:39.160 --> 0:07:41.679 dollar quarter of net income. A favorite voice of ours 0:07:41.680 --> 0:07:44.120 to talk about Tesla as Ross Gerber He's president and 0:07:44.240 --> 0:07:47.560 CEO of gerber Kawasaki Wealth and Investment management. He did 0:07:47.560 --> 0:07:49.760 talk all things Tesla, Carol, but we did get him 0:07:49.760 --> 0:07:52.160 to weigh in on the moves in Chinese stocks and 0:07:52.320 --> 0:07:54.720 Beijing intervention as well. Take a listen. I think one 0:07:54.760 --> 0:07:57.000 of the main things Tesla does differently is they make 0:07:57.040 --> 0:07:58.880 a lot of their own stuff. You know. It was like, 0:07:59.440 --> 0:08:03.040 if something they're lacking, they'll just make it. So they 0:08:03.040 --> 0:08:06.000 can make chips, they can make parts, they can make seats, 0:08:06.480 --> 0:08:09.880 and so they're very adaptable to the environment that they're in. 0:08:10.240 --> 0:08:13.040 And they also have I think of superior positions with 0:08:13.160 --> 0:08:16.560 their supply chains because they tend to order very aggressively 0:08:16.600 --> 0:08:19.720 in long term, so they're sort of an advantage to 0:08:19.800 --> 0:08:23.640 keeping Tesla happy in the supply chain. This bitcoin related 0:08:23.720 --> 0:08:26.880 impairment of twenty three million dollars seems like not a 0:08:26.880 --> 0:08:29.320 lot when they've got cash and cash equivalent of over 0:08:29.360 --> 0:08:32.880 sixteen billion. But how should we as investors, How should 0:08:32.920 --> 0:08:37.840 we as Bloomberg Radio listeners, how should we read that 0:08:38.200 --> 0:08:41.360 um I would pay almost zero attention to the bitcoin 0:08:41.480 --> 0:08:43.840 element of Tesla. I think it's a distraction from what 0:08:43.920 --> 0:08:47.360 they're real success really is. Right now, Bitcoin's rally back 0:08:47.360 --> 0:08:50.079 now to forty, so you can say that he's up 0:08:50.120 --> 0:08:52.920 on this bitcoin now from when this was even reported. 0:08:52.960 --> 0:08:55.480 But because it's so volatible in the way it's accounted 0:08:55.520 --> 0:09:00.839 for as an intangible asset these these it's sort of irrelevant. 0:09:00.920 --> 0:09:03.560 I think, Okay, well, that's good to know. UM expects 0:09:03.600 --> 0:09:06.480 car deliveries to grow more than fifty percent this year, 0:09:07.000 --> 0:09:09.240 on track to build the Model Y in Austin Berlin 0:09:09.360 --> 0:09:13.559 this year. Part supply has strong influence on deliveries. I'm 0:09:13.600 --> 0:09:16.920 just reading through raw some of the headlines working to 0:09:17.000 --> 0:09:22.360 drive down costs, increase production rate. What's what's important there? Well, 0:09:22.400 --> 0:09:26.360 this is really where Tesla gets interesting, because if you've 0:09:26.360 --> 0:09:30.280 seen recently, they've really added a little bit to the 0:09:30.320 --> 0:09:33.920 price of the Model Y and the models and and 0:09:33.920 --> 0:09:38.400 and so they're able to that's basically margin increase versus 0:09:38.440 --> 0:09:42.319 what I thought was really offsetting an increasing costs. So 0:09:42.440 --> 0:09:44.800 I think what we're really seeing is Tesla hitting on 0:09:44.880 --> 0:09:48.560 all cylinders from a production level and efficiency level. What 0:09:48.600 --> 0:09:51.800 about shifting the launch of the semi truck program to two. 0:09:51.880 --> 0:09:53.319 I mean, this is a company in kind of the 0:09:53.360 --> 0:09:56.920 earlier days, right, we would often see delays and changes 0:09:56.960 --> 0:10:00.440 in terms of getting stuff out there. How important is 0:10:00.480 --> 0:10:03.560 that to the company going forward, and does it delay 0:10:03.640 --> 0:10:07.600 bother them? I mean, it doesn't bother me because I 0:10:07.640 --> 0:10:11.439 expect it. I think it's annoying because obviously the product 0:10:11.520 --> 0:10:15.079 is a transformative product in a very important market. You know, 0:10:15.720 --> 0:10:17.880 as an investor in my firm and now my new 0:10:17.880 --> 0:10:21.720 e T F g K, we're very into this climate 0:10:21.880 --> 0:10:24.559 change trade, which is investing in things they're gonna make 0:10:24.720 --> 0:10:26.959 our climate better, and the semi truck is one of 0:10:27.000 --> 0:10:30.040 the more important products to really help climate because of 0:10:30.080 --> 0:10:34.080 the enormous pollution, enormous deed for transportation across the country. 0:10:34.120 --> 0:10:37.120 So so every day that that's you know, delayed, is 0:10:37.200 --> 0:10:40.160 in a way a cost to Tesla because the demand 0:10:40.480 --> 0:10:43.520 will be so huge for these vehicles. But the problem 0:10:43.559 --> 0:10:46.040 is they need the new cells to be working to 0:10:46.120 --> 0:10:48.280 really get the performance out of the semi truck, and 0:10:48.320 --> 0:10:51.199 that's why it's delayed, because they really need to get 0:10:51.200 --> 0:10:55.280 this this new cell production line up and stable, uh, 0:10:55.320 --> 0:10:57.240 and that will really allow the truck to be just 0:10:57.400 --> 0:11:00.040 mind blowing. So so it's annoying in one sense, but 0:11:00.120 --> 0:11:02.880 on the other sense, the ultimate result will be amazing. 0:11:02.920 --> 0:11:04.959 So it's just part of the Tesla experience and you 0:11:05.080 --> 0:11:07.760 just you know, chill and wait for tapp you know, 0:11:08.840 --> 0:11:11.679 listen it will help. I'm going through too. I'm looking 0:11:11.679 --> 0:11:16.520 through our blog for what's going on in China specifically, 0:11:16.960 --> 0:11:18.840 what are you hearing, what are you seeing? What do 0:11:18.920 --> 0:11:21.000 we need to be smart about when it comes to 0:11:21.120 --> 0:11:24.280 what's expected to be and should be right? A really 0:11:24.280 --> 0:11:28.280 important market for this company. It does make me worried 0:11:28.320 --> 0:11:30.560 that China is such a huge market for several of 0:11:30.559 --> 0:11:34.520 our positions, Apple and Tesla, for example. But I also 0:11:34.600 --> 0:11:37.920 think that this is more about power than hurting let's 0:11:37.920 --> 0:11:40.960 say US companies for no reason. This is about she 0:11:41.440 --> 0:11:45.120 keeping control in China from the billionaire capitalists that have 0:11:45.280 --> 0:11:50.079 been so successful and keeping people in check more than 0:11:50.120 --> 0:11:53.080 I think hurting let's say a US company that's providing 0:11:53.080 --> 0:11:55.160 a lot of benefits to China in the e V 0:11:55.280 --> 0:11:58.360 business and through the technology sharing that they're having. So 0:11:58.600 --> 0:12:02.240 I'm worry need a little bit about Apple and Tesla 0:12:02.320 --> 0:12:04.960 in particular some of the businesses we do in China, 0:12:05.040 --> 0:12:08.720 but but not so much so in that I would 0:12:08.760 --> 0:12:11.319 take any action from it. But we're watching it closely. 0:12:11.360 --> 0:12:14.480 But if you're in these Chinese companies, I mean it's 0:12:14.559 --> 0:12:17.000 you've got to move on it's not a good situation. 0:12:17.240 --> 0:12:21.240 What if the Chinese market ultimately isn't as open for 0:12:21.280 --> 0:12:26.959 Tesla going forward, How does that fundamentally change the dynamics 0:12:27.040 --> 0:12:30.000 of a company that is now a six hundred thirty 0:12:30.000 --> 0:12:32.320 three billion dollar market cap company. Well, I think it 0:12:32.320 --> 0:12:35.280 would ultimately just hurt China because Tesla will sell their 0:12:35.320 --> 0:12:38.800 cars in Europe, the US, Latin America, in the If 0:12:38.880 --> 0:12:41.120 China wants to be a competitive market, they need to 0:12:41.120 --> 0:12:42.760 be in the evy game. And they're also in the 0:12:42.800 --> 0:12:45.840 e V game simply because of the weather and the 0:12:45.840 --> 0:12:48.760 the effects it's had on China, whether it be flooding 0:12:48.920 --> 0:12:52.240 or other issues that they're having. So China has a 0:12:52.320 --> 0:12:55.080 huge incentive to keep EV market growing and to be 0:12:55.120 --> 0:12:57.640 a leader in this market. And so if they create 0:12:57.720 --> 0:13:00.840 issues for Tessa, that would actually hurt there to be 0:13:00.960 --> 0:13:04.199 leaders in this market. So I see it as the opposite. 0:13:04.440 --> 0:13:06.600 I think they're trying to stay real cozy with Tesla 0:13:06.840 --> 0:13:09.840 to learn as much as possible to be to dominate 0:13:09.920 --> 0:13:14.000 this technology and become a massive EV player in China. 0:13:14.320 --> 0:13:17.920 EV companies are the best in the world behind Tesla. Yeah, 0:13:18.040 --> 0:13:20.360 all right, So that's a really really good take on 0:13:20.400 --> 0:13:23.400 that go back to Chinese companies US investors. Do you 0:13:23.440 --> 0:13:26.120 think ultimately that's not going to be a place for 0:13:26.160 --> 0:13:29.280 them to be or not a smart place in your view. Well, 0:13:30.160 --> 0:13:32.679 we were debating as this a buy or to sell right, 0:13:33.360 --> 0:13:36.200 stox got real cheap, and we like to buy stocks 0:13:36.200 --> 0:13:40.200 when they get real hammered. And everybody thinks the world's ending. Um. 0:13:40.280 --> 0:13:43.400 But I'm not a big fan of foreign investment in 0:13:43.440 --> 0:13:46.400 general because of the lack of visibility, especially in China, 0:13:46.679 --> 0:13:49.160 that firms like mine have. Like I can go to 0:13:49.240 --> 0:13:51.760 Tesla's factory right now, they'll show me all around, just 0:13:51.800 --> 0:13:53.840 like they show you. But I can't go to a 0:13:53.920 --> 0:13:57.319 Chinese factory and have them show me around. Um, they 0:13:57.320 --> 0:13:59.720 won't do that in most cases. So I think that 0:14:01.000 --> 0:14:06.080 we've entered this point where the communist control of China 0:14:06.240 --> 0:14:12.240 is more important than promoting capitalism. And and this shift 0:14:12.520 --> 0:14:15.120 that we've been seeing from she whether it's aggressive approach 0:14:15.160 --> 0:14:20.080 to Hong Kong and certainly Taiwan, um, it's almost a 0:14:20.160 --> 0:14:25.560 belligerence to the rest of the world's capitalist system. And 0:14:25.560 --> 0:14:28.320 and I think investing in China has a new risk. 0:14:28.640 --> 0:14:31.560 And also what really was the thing at my firm 0:14:31.840 --> 0:14:34.520 was the E s G side of it. Just basically 0:14:34.560 --> 0:14:39.720 owning these companies is just not right because the Chinese 0:14:39.800 --> 0:14:43.280 government is just it's not the form of capitalism that 0:14:43.360 --> 0:14:47.360 we invest in. So I think investors need to assess 0:14:47.760 --> 0:14:49.520 whether or not they can make money. Here is at 0:14:49.560 --> 0:14:51.680 the issue if do I want to be a part 0:14:51.680 --> 0:14:53.800 of it. That was Ross Gerber, president and CEO of 0:14:53.800 --> 0:14:57.120 Gerber Kawasaki Wealth and Investment Management. Still ahead on Bloomberg 0:14:57.120 --> 0:15:00.320 Business Week, we take you to South America af stating 0:15:00.360 --> 0:15:03.360 and disturbing story in the magazine, a crisis for natural 0:15:03.400 --> 0:15:07.960 resources in the Amazon rainforest. That's next. This is Bloomberg 0:15:11.760 --> 0:15:15.600 broadcasting from the financial capital of the world, Bloomberg Eleve 0:15:15.680 --> 0:15:18.840 in Frio in New York to Washington, d C. Bloomberg 0:15:19.840 --> 0:15:23.040 to Boston, Bloomberg one O six one to San Francisco, 0:15:23.120 --> 0:15:26.560 Bloomberg nine sixty to the country Sirius XM Chado one 0:15:26.640 --> 0:15:29.800 nineteen and around the globe the Bloomberg Business app and 0:15:29.840 --> 0:15:35.600 Bloomberg Radio dot Com. This is Bloomberg Business Week. Okay, 0:15:35.640 --> 0:15:38.120 this may rightfully freak you out. It is about the 0:15:38.200 --> 0:15:41.760 last days of the rainforest. Yes, that rainforest so crucial 0:15:41.800 --> 0:15:44.600 to the global environment. Many species on Earth. I mean, 0:15:44.800 --> 0:15:47.840 it is so important to all of us living on Earth. Yeah, 0:15:47.920 --> 0:15:51.080 it is something that affects the entire planet, not just 0:15:51.320 --> 0:15:53.960 Brazil in South America. The story in the magazine is 0:15:54.000 --> 0:15:56.680 about how the Brazilian Amazon is approaching the point of 0:15:56.680 --> 0:16:00.239 no return and the government there is fanning the flames. 0:16:00.520 --> 0:16:03.440 Here's more from Bloomberg Senior editor for Latin America Jessica 0:16:03.480 --> 0:16:06.480 Bryce and Bloomberg Business Week Magazine editor Joel Weber. This 0:16:06.560 --> 0:16:08.840 is a gut wrenching story. I kind of can't think 0:16:08.880 --> 0:16:13.320 of something that has bigger global implications than um losing 0:16:13.720 --> 0:16:18.080 the Amazon. And what Jessica's story shows is that it's 0:16:18.240 --> 0:16:21.560 actually it's really nuanced, and I think that is one thing. 0:16:21.600 --> 0:16:23.920 If you spend some time with the story, you will 0:16:23.960 --> 0:16:26.680 come away with some of that nuance. And the story 0:16:26.720 --> 0:16:29.840 started as a as a data project and then became 0:16:30.280 --> 0:16:32.840 probably one of the most compelling stories UM I've ever 0:16:32.840 --> 0:16:35.120 published as the editor of Business Week. You know, the 0:16:35.160 --> 0:16:37.440 thing that I think it shows more than anything is 0:16:37.520 --> 0:16:42.240 that there is a official land grab policy that is 0:16:42.280 --> 0:16:46.760 happening in Brazil, and it's allowing the rainforest to basically 0:16:47.360 --> 0:16:51.840 get turned into grassland where cattle can be raised, which 0:16:51.880 --> 0:16:53.840 is about the worst one eight that we can do 0:16:54.040 --> 0:16:57.400 for the planet, as you can imagine. So, so Jessica, 0:16:57.440 --> 0:17:00.800 walk us through, um where you started this object and 0:17:00.960 --> 0:17:02.880 what you learned along the way. Yeah. I started the 0:17:02.880 --> 0:17:06.560 project really looking at the data behind DeForest Station, trying 0:17:06.560 --> 0:17:08.840 to figure out, you know, we've been struggling with this 0:17:08.920 --> 0:17:11.719 issue for decades now, and why is it still something 0:17:11.760 --> 0:17:14.720 that we're we're seeing? Why is why is it not 0:17:14.880 --> 0:17:17.560 something that the world is able to to stop? Why 0:17:17.640 --> 0:17:20.520 is the Brazil government not stopping it? Um? So I 0:17:20.520 --> 0:17:22.800 started looking at the data of who's actually doing it, 0:17:22.840 --> 0:17:24.960 and it took me in directions that I had never 0:17:25.000 --> 0:17:27.600 really expected. I mean, it's it is such a nuanced 0:17:27.600 --> 0:17:31.000 story to such a complicated story. And what it comes 0:17:31.040 --> 0:17:34.360 down to is, you know, the folks on the ground, uh, 0:17:34.400 --> 0:17:37.640 for decades, they've been told that deforestation is a good thing, 0:17:37.760 --> 0:17:40.399 that they need to deforce the land, and in fact, 0:17:40.440 --> 0:17:44.000 in some cases, um, they were you know, handed plots 0:17:44.000 --> 0:17:46.359 and if they didn't deforce the land, they risk losing 0:17:46.400 --> 0:17:49.639 those plots. And so that culture has really stuck in 0:17:50.200 --> 0:17:52.680 the Amazon and the folks there now, which a lot 0:17:52.720 --> 0:17:57.000 of them are incredibly poor. The government keeps that policy 0:17:57.040 --> 0:18:01.520 alive because it helps pump this and this cleared land 0:18:01.680 --> 0:18:05.320 into industrial farming operations that feed the world. This is 0:18:05.359 --> 0:18:07.440 such a big part of it, right, supporting the people 0:18:07.440 --> 0:18:10.240 who live in a country and area, right. And so 0:18:10.320 --> 0:18:13.040 there's as you just explained that on one hand, but 0:18:13.080 --> 0:18:15.679 at the same time we're talking about the existence of 0:18:16.080 --> 0:18:20.400 the global population and protecting the rainforest. It's a policy 0:18:20.480 --> 0:18:23.399 that's not just from President Bosonaro. It's been around for 0:18:23.440 --> 0:18:26.200 a while. It has been around for a while. Um 0:18:26.280 --> 0:18:30.480 during the dictatorship of the government really prioritized giving it 0:18:30.520 --> 0:18:34.639 to big landowners, big industry. Um. And then so you 0:18:34.680 --> 0:18:37.159 have this population of people who have been working the 0:18:37.240 --> 0:18:42.280 lands for for generations and they and so when the 0:18:42.359 --> 0:18:46.000 democracy came about, uh, the government decided to give them 0:18:46.000 --> 0:18:48.160 small plots of land. So that was in the constitution. 0:18:48.560 --> 0:18:52.640 What we saw is that to governments prior to Bolsonado, 0:18:52.720 --> 0:18:55.200 they moved the needle for they said, okay, so will 0:18:55.240 --> 0:19:01.199 amnesty more recent deforestation, will amnesty bigger deforestation. Now, what 0:19:01.240 --> 0:19:03.520 the government wants to do is sort of take that too, 0:19:03.920 --> 0:19:07.920 like uh, just a very scary, a very scary next 0:19:07.920 --> 0:19:11.480 step and say, okay, we're going to start amnestying more 0:19:11.560 --> 0:19:14.439 recent defour station as recently as two thousand and twelve. 0:19:14.480 --> 0:19:19.119 Both Sinnardo did wanted amnesty as recently as two thousand eighteen. Um, 0:19:19.160 --> 0:19:20.720 but we're not even going to check it. We're going 0:19:20.760 --> 0:19:22.720 to do it all by satellite. And so it really 0:19:22.760 --> 0:19:27.040 opens the door to almost sixteen million hectares of of 0:19:27.040 --> 0:19:31.040 of new Amazon land that could be amnesty. Basically, this 0:19:31.160 --> 0:19:33.879 is stolen public land that could be amnestying. Can you 0:19:33.920 --> 0:19:37.119 make the connection for people who live thousands of miles 0:19:37.119 --> 0:19:40.400 away from the Amazon about just why it is so 0:19:40.440 --> 0:19:44.000 important not just for Brazil, but for our own health, 0:19:44.040 --> 0:19:46.040 because that was one of the most striking parts of 0:19:46.040 --> 0:19:48.919 the story for me. Right, So, we're reaching a point 0:19:48.960 --> 0:19:51.359 where the Amazon, which has always been considered sort of 0:19:51.400 --> 0:19:54.320 the lungs of the world, it's turning into savannah. It's 0:19:54.359 --> 0:19:58.359 that it's at risk of turning into savannah, and instead 0:19:58.560 --> 0:20:03.000 of of cleaning the earth air, it's actually accelerating climate 0:20:03.080 --> 0:20:05.320 change and in some cases where the burns are the worst, 0:20:05.320 --> 0:20:08.000 it's actually pumping more carbon dioxide into the air than 0:20:08.040 --> 0:20:11.439 it can absorb. Um. Now, if it turns into savannah, 0:20:11.440 --> 0:20:14.240 what happens, we lose ten thousand species are at risk. 0:20:14.920 --> 0:20:18.679 But also the Amazon helps regulate the entire the weather 0:20:19.200 --> 0:20:22.560 patterns here in the in in South America, and South 0:20:22.560 --> 0:20:25.800 America produces a lot of food for the world. There's 0:20:25.840 --> 0:20:28.879 a combination of factors that are really sort of scary. 0:20:29.000 --> 0:20:32.000 Not only does it, you know, contribute to climate change, 0:20:32.480 --> 0:20:35.480 it can you contributes to more pollution in the air, 0:20:35.520 --> 0:20:38.640 but it also changes our weather patterns region that makes 0:20:38.680 --> 0:20:40.639 a lot of food for the world. And so it 0:20:40.800 --> 0:20:43.160 is quite shocking what what we're looking at. And that's 0:20:43.160 --> 0:20:46.440 Bloomberg's Jessica Bryce and Bloomberg business Week magazine editor Joel 0:20:46.440 --> 0:20:49.640 Webber highly recommends you read the entire story. It's online 0:20:49.680 --> 0:20:52.800 on the Bloomberg and on newstands. You're listening to Bloomberg 0:20:52.840 --> 0:20:55.960 Business Week. Up next, the pandemics impact on the recording 0:20:55.960 --> 0:20:59.000 industry and moves to make it more diverse and inclusive, 0:20:59.320 --> 0:21:02.800 lead by one of its most influential figures, Harvey Mason Jr. 0:21:03.000 --> 0:21:13.040 That's coming up next. This is Bloomberg. You're listening to 0:21:13.160 --> 0:21:17.040 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. 0:21:17.160 --> 0:21:22.200