Speaker 1: This is Bloomberg business Week Inside from the reporters and
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Speaker 2: Global business, finance and tech news.
Speaker 1: The Bloomberg Business Week Podcast with Carol Messer and Tim
Speaker 1: Stenebeck from Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: A very busy few days in global markets on Capitol
Speaker 3: Hill and in geopolitics in the US, we got data
Speaker 3: showing inflation easing and growth softening, and we also saw
Speaker 3: Congress coming to terms on a temporary funding measure to
Speaker 3: avert a government shutdown.
Speaker 4: The agreement delayed a partisan clash over federal spending until
Speaker 4: the new year, well leaving out emergency a to allies
Speaker 4: Ukraine and israel I had this hour, we'll look at
Speaker 4: the Warren Gaza through an economic lens and then discuss
Speaker 4: what hundreds of global leaders fear most as the two
Speaker 4: hot wars.
Speaker 3: Ray John Overshadowing all of that, however, was the San
Speaker 3: Francisco summit between US President Joe Biden and his Chinese
Speaker 3: counterpart Ji Jimping, And that is where we begin.
Speaker 4: After an hour's long meeting Wednesday, she dined with business
Speaker 4: leaders alongside the Apex Summit and made some welcome remarks,
Speaker 4: saying China wants to be friends with the United States.
Speaker 4: He also stated that his nation won't fight a cold
Speaker 4: or hot war with anyone. It was one of his
Speaker 4: clearest remarks yet, proclaiming a desire for peaceful ties between
Speaker 4: the world's two largest economies.
Speaker 3: President Biden meanwhile said the talks yielded progress and repairing
Speaker 3: strained ties between the two superpowers, while reiterating that he
Speaker 3: considers you a dictator in an apparent off the cuff
Speaker 3: from Mark. But keep in mind, apparently it's not the
Speaker 3: first time he has said that, basically making the distinction
Speaker 3: between how the Chinese government is run and how the
Speaker 3: US government is run. Well, a lot to digest here
Speaker 3: and to help us interpret what we saw and heard
Speaker 3: from the two leaders. We welcome back David Riedl. He's
Speaker 3: president and founder of Retal Research Group. David, really great
Speaker 3: to have you back so timely. This meeting significant or
Speaker 3: just a photo op, which many would also say has
Speaker 3: value in seeing these two leaders together and on US
Speaker 3: soil specifically, Yeah.
Speaker 5: That's exactly right. I'm not denigrating the photo op. That's
Speaker 5: an important part of diplomacy. But I think some important
Speaker 5: things have happened here. I think a floor has been
Speaker 5: put in the relationship. I think things stop getting worse,
Speaker 5: and I think we have the building blocks of recreating
Speaker 5: at least a functioning US China relationship, which is very
Speaker 5: important for us, for them, and for the rest of
Speaker 5: the world.
Speaker 4: Well point out what in the past couple of years
Speaker 4: has not been functioning, and what you think now that
Speaker 4: there is a floor in the relationship will start functioning soon.
Speaker 5: David Well, the most dangerous thing is ongoing disputes in
Speaker 5: the South China Sea and in.
Speaker 6: The Taiwan Straits.
Speaker 5: You may remember that China lost an international court ruling
Speaker 5: that they ate where they lay claim to most of
Speaker 5: the South China Sea all the way to the borders
Speaker 5: with the Philippines and Vietnam and other allies of the US,
Speaker 5: really saying that that is essentially part of their country
Speaker 5: and no one should pass through it without their permission. Also,
Speaker 5: the Taiwan Straits, they've determined that that is what they
Speaker 5: consider an inland waterway which is part of their country.
Speaker 5: And those are things, of course, that the US strongly
Speaker 5: disagrees with, as does most of the rest of the world,
Speaker 5: and they've been conducting these freedom of navigation acts, which
Speaker 5: have really rankled China because we've continued to sail warships
Speaker 5: through both the Straits and the South China See and
Speaker 5: that's caused a lot of problems. That's actually one of
Speaker 5: the more important things that was accomplished here begin the
Speaker 5: re establishment of military communications. So I think the first
Speaker 5: thing that's hopefully off the table is some sort of miscoup,
Speaker 5: calculation or accident or problem that results in an actual
Speaker 5: military conflict because of an accident in one of those
Speaker 5: two areas.
Speaker 6: That's something that's gone really wrong.
Speaker 5: Trade policy, other things about rhetoric in both political systems
Speaker 5: have been troublesome but real. The danger in the South
Speaker 5: China Sea and the Taiwan Straight has been my main concern.
Speaker 3: So, like a relationship that goes bad, you can have
Speaker 3: where the two individuals don't talk, or at least they're talking,
Speaker 3: and so you get to a better way.
Speaker 7: Is that kind of where we are with the US
Speaker 7: and China right now.
Speaker 6: That's exactly right, and they're talking at every level.
Speaker 5: You know, it's important that Biden and She sit down,
Speaker 5: but it's also important that the high level officials, sit down,
Speaker 5: middle level officials, people up and down the trade and
Speaker 5: commerce arena as well as the military arena. So communication
Speaker 5: and connection at every level is critical to avoiding a problem.
Speaker 7: Panda diplomacy that is going to go there.
Speaker 8: We lost the look we.
Speaker 3: Have had the pandas leaving the US been here for
Speaker 3: decades now maybe coming back.
Speaker 7: Are we right to laugh? Or that sharing of something
Speaker 7: that is native and unique to China so important and
Speaker 7: a big deal.
Speaker 5: You know, I'm reminded of how important it was during
Speaker 5: the nineteen seventies when we were first establishing contact with
Speaker 5: China what they call ping pong diplomacy. And you can,
Speaker 5: you know, you can sort of nicker at the idea
Speaker 5: of ping pong players founding forming the basis of a
Speaker 5: relationship between two great, two large, very large economies like this.
Speaker 5: But it is important to have those person to person
Speaker 5: connections and that sort of sentiment.
Speaker 6: Pandas are a part of the of.
Speaker 5: The the quiver of resources that China has, and I
Speaker 5: am glad for one to see them using it.
Speaker 6: But let's look for other ties.
Speaker 5: Ties between students and researchers and scientists and so and
Speaker 5: so forth.
Speaker 6: That's what really can help.
Speaker 5: That's what helped build the original relationship and can rebuild
Speaker 5: it now.
Speaker 4: But where are we with the panda diplomacy Because what
Speaker 4: happened recently was China took back it's pandas, and now
Speaker 4: we had she yesterday talking about potentially sending them back
Speaker 4: to the US. It seems like, I mean, was he
Speaker 4: using this for leverage that recently?
Speaker 5: You know, I think that the pannas are always on
Speaker 5: loan as you know, our pieces and so and so
Speaker 5: forth between different countries, so it is their right and
Speaker 5: progative to take them back.
Speaker 6: I'm not exactly sure what's burred that.
Speaker 5: It might have been a moment of national pride or
Speaker 5: something that led them to do that last year or
Speaker 5: just a few months ago. But the idea that he's
Speaker 5: opening back up to sending other panda, sending more pandas
Speaker 5: back to US Zeos, I think is an important next step.
Speaker 3: Hey David, what does the narrative or headlines get right
Speaker 3: about this relationship?
Speaker 7: What does it get wrong?
Speaker 5: It's super complicated and very synergistic. We both need each other.
Speaker 5: We need them for large workforce, the ability to produce
Speaker 5: things like iPhones and other pieces of technology that are
Speaker 5: in all of our pockets and on all of our desks.
Speaker 5: We absolutely China for that. They need us to be
Speaker 5: part of the group that it consumes their products and
Speaker 5: keeps their workers busy. We need them to buy our
Speaker 5: US treasuries and things like that, and they need us
Speaker 5: to provide a place to put some of the reserves
Speaker 5: in the savings that they have in their country.
Speaker 6: We need each other, you know.
Speaker 3: I believe it was Arshinelli Bask in our conversation with
Speaker 3: Citadel's Ken Griffin this week who where he basically said,
Speaker 3: just imagine if TSMC just cuts off its supply of
Speaker 3: chips to the world, everything shuts down, Every production line
Speaker 3: shuts down. You know, we talk about Apple the close
Speaker 3: connectivity between the two nations, but you think about TSMC,
Speaker 3: It just you know, provides chips for everybody.
Speaker 5: And that is actually absolutely the most critical part of
Speaker 5: the US channel relationship going forward. Taiwan and what happens there.
Speaker 5: You know, we have stuck to a one China policy
Speaker 5: where we recognize just the government in Beijing and don't
Speaker 5: have official recognition of the government Taiwan. We don't recognize
Speaker 5: China's claim to Taiwan, but we just don't talk about that.
Speaker 5: She of course says that he wants to fold Taiwan
Speaker 5: sort back into the Motherland, as he would refer to it,
Speaker 5: and apparently during the communicate the discussions, she said, look,
Speaker 5: piece is all well and good, but at some point
Speaker 5: we need to move towards resolution more generally. So I
Speaker 5: don't think, you know, this is certainly not off the table.
Speaker 5: Maybe it's not pressing this month or the next, sorry,
Speaker 5: this year or the next couple of years, but China
Speaker 5: does have their eyes on Taiwan, and TSMC makes that
Speaker 5: a super complicated situation for the US as well as
Speaker 5: the rest.
Speaker 6: Of the world.
Speaker 3: Speaking of tables, there are a lot of people who
Speaker 3: shared a very important table with President g last night.
Speaker 4: Yeah, well, certainly a who's who of executives there yesterday,
Speaker 4: not just at the dinner.
Speaker 1: Right.
Speaker 4: Elon Musk wasn't there at the dinner. Mark Benioff wasn't there,
Speaker 4: but they did sort of a drive by greeting during
Speaker 4: the cocktail hour. We had Sander Pichaya b Alphabet City's
Speaker 4: Jane Frasier. Larry Fink was at President She's table. Tim
Speaker 4: Cook of Apple, of course, who didn't know, by the way, Carroll,
Speaker 4: if he was actually going to bet.
Speaker 7: He didn't think he was going to come on.
Speaker 8: He was in China.
Speaker 4: Twice this year.
Speaker 2: He was there.
Speaker 4: He's going to be explained to us. You know, the
Speaker 4: takeaways from who was there last night, and who wasn't
Speaker 4: there last night, and who was at at she's table.
Speaker 8: Well he is the.
Speaker 5: Interest saying that how important financial services were in that.
Speaker 5: That actually struck me how many financial services people were
Speaker 5: there because that's an area where US banks were involved early.
Speaker 5: Some of them got burnt. But it's a growing part
Speaker 5: of the of the Chinese economy, and of course a
Speaker 5: huge part of US services exports into China, so that's
Speaker 5: a important balancing part of our of our good goods
Speaker 5: deficit with China is our services. So I keep an
Speaker 5: eye on the financial services industry. That's pretty interesting to me.
Speaker 5: I'm not surprised that Cook was there. He knows what's
Speaker 5: important to him in his future at Apple.
Speaker 7: It's like I think I can move my schedule around.
Speaker 3: Yeah, of course, I'll make it happen. I'll make it happen. David,
Speaker 3: Thank you so appreciate it. David Reedel, President of Retal
Speaker 3: research on zoom in San Francisco.
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Speaker 3: Master Low with Tim Stanevik life here on Bloomberg Business
Speaker 3: Week Bloomberg News. You might have caught this story over
Speaker 3: the weekend talking about the cost of the war between
Speaker 3: Israel and Hamas. Obviously the cost to lives, no way
Speaker 3: to measure that, no doubt about it. But it also
Speaker 3: has an economic cost, and Israel's war gets to mass
Speaker 3: costing the economy about two hundred and sixty million dollars
Speaker 3: every day. It's become more expensive for Israel than first
Speaker 3: predicted and is putting a strain on Israel's public finances.
Speaker 4: We have with us near Barkad right now for Israel
Speaker 4: Minister of Economy. He was the mayor of Jerusalem from
Speaker 4: two thousand and eight to twenty nineteen. Before that, served
Speaker 4: as a member of the Jerusalem City Council. He's got
Speaker 4: a background in tech, though, having founded an antivirus software
Speaker 4: company back in the nineteen eighties. He was also the
Speaker 4: first chairperson Carol of Checkpoints Software Technologies. It's the American
Speaker 4: Israeli IT security company that's listed here in the US.
Speaker 3: On the next deck, mister minister, thank you so much
Speaker 3: for coming with us. Tell us how I think we're
Speaker 3: going to get your mic on for you. There you go.
Speaker 3: First of all, welcome, welcome, Thank you for being with us.
Speaker 3: You do have to be thinking about there are some nervousness,
Speaker 3: certainly among investors in terms of the Israeli economy. What
Speaker 3: can you tell us about it today and where you
Speaker 3: see it going from here?
Speaker 9: Well, thank you for hosting me. I think we have
Speaker 9: to have the perspective.
Speaker 8: First. We imagine you have a neighbor.
Speaker 9: That goes and rapes your wife, takes your child and
Speaker 9: puts it in an oven, and then it takes your
Speaker 9: children hostage. This is a neighbor that wants to wipe
Speaker 9: out Israel off the map. We have fourteen hundred people killed, murdered,
Speaker 9: and two hundred and thirty nine abducted and now are hostages. Okay,
Speaker 9: so Israel has made a decision They're going to wipe
Speaker 9: these monsters off the map, off the face of the earth.
Speaker 8: By the way, the.
Speaker 9: Radical Islamic jihadists are not only threatening Israel, They're threatening
Speaker 9: all over the world. We're on the same line, Israel
Speaker 9: and the US, as this is a big Satan where
Speaker 9: the little Satan and Europe is also in the same line.
Speaker 9: So we're not just fighting our own battle. We're fighting
Speaker 9: a battle between good and evil, between the West, civilized
Speaker 9: world and radical Islamis jihadis that want to kill everyone else.
Speaker 9: I'm saying this because this is the perspective. We're going
Speaker 9: to win this war. We're gonna wipe them off the
Speaker 9: face of the earth like the world did with the
Speaker 9: Nazis after, you know, at the tail end of the
Speaker 9: Second World War. And once we do that, and we
Speaker 9: will do that, the world is going to be a
Speaker 9: much much better world for everyone, not just for Israel.
Speaker 9: And so you have to look at the economic perspective
Speaker 9: as a derivative of that goal. So yeah, we're now
Speaker 9: focusing our energy in our economy on the war, where
Speaker 9: it's going to cost us two to three percent of
Speaker 9: the GDP, which is something that Israel could relatively easier manage.
Speaker 9: We had sixty percent debt to GDP entering this war.
Speaker 3: And let me forgive me, because you know, second, that
Speaker 3: should have been like our second or third or fourth question,
Speaker 3: because obviously our hearts and our minds go out to
Speaker 3: what's been happening and the conflict on both sides, and
Speaker 3: it seems like we've had many conversations about trying to
Speaker 3: figure a better way forward for what's going on there.
Speaker 3: And you know, when we start talking about the future,
Speaker 3: people like, well, wait, we've got to figure out what's
Speaker 3: going on right now and deal with it, the situation.
Speaker 3: And so let me go back there and say, when
Speaker 3: you think this conflict, this war will be done.
Speaker 8: Well, we're taking time because we don't want collateral damage.
Speaker 8: We have to deal with.
Speaker 7: We's already been collateral damage well.
Speaker 9: And the reason and no, there's no collateral damage on
Speaker 9: our side. It's an intent to kill Israelis and wipe
Speaker 9: us off the map. We don't want to target innocent civilians.
Speaker 9: We deal with Hamasa hiding behind you know, in our shelters.
Speaker 9: We put our citizens in Gaza. The militants use the
Speaker 9: shelter and they don't care about their civilians.
Speaker 8: They don't care.
Speaker 9: Actually they're using as human shields. We hide our we
Speaker 9: protect our civilians they don't, and so entering Gaza, focusing
Speaker 9: on the militants that are by the way, using the
Speaker 9: hostages as human shields. It's a challenge. So we're taking
Speaker 9: our time. We want to make sure that we only
Speaker 9: hit the militants and enable the people to leave the
Speaker 9: northern part of Gaza, you know, their quarters, helping them
Speaker 9: go to the southern part. Because we don't we care
Speaker 9: about every human life, every human life, and we don't
Speaker 9: feel comfortable if there's collateral damage.
Speaker 8: That's why we're taking our time and the war. We
Speaker 8: will win this war. There's no doubt in my mind.
Speaker 4: What happens, what happens to Gaza when, as you say,
Speaker 4: you win that war, who ends up ruling Gaza.
Speaker 9: Anybody that says that in its charter is not to
Speaker 9: wipe Israel off the map. Hamas will not be there
Speaker 9: after this war. We're waiting to see. You know, Israel
Speaker 9: struck a peace deal with Egypt, which was our biggest
Speaker 9: enemy at the time. They recognize the State of Israel
Speaker 9: our right of existence, and we have forty years peace
Speaker 9: with them. Similarly with Jordan we have twenty five years piece.
Speaker 9: I remember I was seven years old when they attacked
Speaker 9: us in sixty seven, okay, but we came to terms
Speaker 9: with them. We have the Abraham Accords, and hopefully expand
Speaker 9: that once somebody will come in Gaza and recognize the
Speaker 9: right of the state of Visul to live and seek peace,
Speaker 9: we will collaborate with them like we did in the past.
Speaker 9: If they continue to say and their charter is destruction
Speaker 9: of Israel, will fight them until we beat them, and
Speaker 9: we'll wait for somebody to come and replace those radical
Speaker 9: jihadis that will seek peace.
Speaker 7: What is the economic way forward?
Speaker 3: And no one would dispute hamas terrorists, right that must
Speaker 3: be put to an end, not Palestinians that are there
Speaker 3: in Gaza. So what is the economic way forward for
Speaker 3: Israel and Palestinians to exist economically we're both thrive because
Speaker 3: many would argue that that's not the situation for many
Speaker 3: in Gaza right now.
Speaker 9: So see, there are good examples of how we collaborate.
Speaker 9: Until October seventh, we had one hundred and twenty thousand
Speaker 9: Palestinians that used to cross the fence every day and
Speaker 9: work in Israel, Okay.
Speaker 3: And we've had tech entrepreneurs who have talked about working
Speaker 3: you know, Israeli tech entrepreneurs who have worked with individuals
Speaker 3: in God right.
Speaker 9: We believe in civil separation, they should manage their lives,
Speaker 9: and we believe in collaboration on the economic side. At
Speaker 9: least we did until October seventh. Now it's much more
Speaker 9: challenging because there's a deep concern between ISRAELA.
Speaker 8: We don't trust our neighbors. We don't trust our.
Speaker 9: Neighbors, and it's a could you imagine going through what
Speaker 9: we did in October seven and trying to go back
Speaker 9: to before October seven, It's not going to happen. And
Speaker 9: so what we were more optimistic on economic collaboration, they
Speaker 9: it's very difficult to work well.
Speaker 3: In an economic situation where both sides benefited as well,
Speaker 3: of course, and there was thriving because many would argue,
Speaker 3: we see it certainly in the US and not apples
Speaker 3: to apples, But you know when people feel like they're
Speaker 3: economically left behind, that's when chaos candidates come out. So
Speaker 3: that's what I'm trying to understand. Many would argue there
Speaker 3: needs to be two states where two separate states can
Speaker 3: thrive economically on their own.
Speaker 8: Let me give you a statistic.
Speaker 9: Jeans really average salary is fifty four thousand dollars on average.
Speaker 9: The Arabs relies is probably close thirty five to forty
Speaker 9: thousand dollars average salary the Palestinians they used to cross
Speaker 9: the fence every day was sixteen thousan dollars. The pedacedes
Speaker 9: of the work and collaborate in Judean and Samaria with
Speaker 9: the Jewish cities and.
Speaker 8: Towns was about eleven to twelve thousand.
Speaker 9: In the Judean Samari the Arab side was about seven thousand,
Speaker 9: and Gaza before the war was three thousand dollars a.
Speaker 8: Person a year.
Speaker 9: So that demonstrates that the more they collaborate with the
Speaker 9: Jewish state, the better off they are. And we want
Speaker 9: to collaborate. We wanted to collaborate, but they have to decide.
Speaker 9: If they want to wipe us off the map, we
Speaker 9: will fight them until we take them off the face
Speaker 9: of the earth.
Speaker 8: It's their decision to make.
Speaker 9: Our hands are always open to collaborate and create peace,
Speaker 9: and we have peace with the Arab countries. It's their
Speaker 9: decision to make. If they want to fight, they'll lose.
Speaker 9: If they want to collaborate, we will.
Speaker 4: Mister minister, I want to ask about these art.
Speaker 3: You're not talking homoster dragon, Palestinians right to collaborate talking.
Speaker 9: Anybody that wants to wipe us off the map of
Speaker 9: the Earth will haunt them down until they raise the
Speaker 9: white flag.
Speaker 4: In the economy, I wanted to ask about the coalition funds,
Speaker 4: this discretionary spending that's earmarked to the five parties of
Speaker 4: Netanyahu's government. Do you think those should be scaled back
Speaker 4: to make more room for war financing?
Speaker 9: Right now, we have a unity government, and I think
Speaker 9: one of the biggest challenges we have is expanding unity
Speaker 9: government throughout the war and after the war. One of
Speaker 9: the biggest challenges we have is unification. And when you
Speaker 9: have unification, people make concessions to each other to a
Speaker 9: degree that we all agree on how to create the budget.
Speaker 9: So I think that you were going to see in
Speaker 9: twenty twenty four we're restructuring the budget to focus on
Speaker 9: the war and to focus on economic growth. Immediately after,
Speaker 9: we will make the concessions needed so that everyone's happy.
Speaker 4: These are pretty controversial payments, three point six billion dollars
Speaker 4: worth of transfers. They were approved last May. They're partly
Speaker 4: going toward religious schools, some of those schools are exempt
Speaker 4: from teaching subjects like English and math. Where do you
Speaker 4: fall in this debate?
Speaker 9: As I said earlier, there's no doubt in my mind
Speaker 9: that we will expand the coalition.
Speaker 8: We need to expand the collision.
Speaker 9: And when you do that, there's more collaboration, more consideration,
Speaker 9: and you do things with wide acceptance.
Speaker 8: That is what's going to happen.
Speaker 9: In other words, we'll agree together on how to focus
Speaker 9: the funds on the necessary challenges Israel has.
Speaker 3: How complicated or how is this become complicated? If I
Speaker 3: think about the cost to ensure Israeli bonds right, sovereign
Speaker 3: bonds against a default more than double what it was
Speaker 3: before the war began, So how is that complicating the mission?
Speaker 3: As you think about the economy after well.
Speaker 9: I think smart money understands that after a war there's
Speaker 9: usually thriving entrepreneurship. Extremely if you look at the past wars,
Speaker 9: people when they go to war, they become very creative.
Speaker 8: You'll see an array of.
Speaker 9: New companies, not just in the defense side. I think
Speaker 9: Israel's mastered the defensive and how to come up with
Speaker 9: new creative ideas. We've tested the new space war and
Speaker 9: a couple of other things. And I think you're going
Speaker 9: to see a lot of interest around the world on
Speaker 9: Israeli technology exiting from the war. I believe you already
Speaker 9: see more and more Israelis go back to business doing
Speaker 9: their own you know business like before we had six
Speaker 9: percent loss of labor now or less than three percent,
Speaker 9: and it's becoming such account.
Speaker 4: Is that because of soldiers who are being deployed.
Speaker 9: Both soldiers, schools were out, so parents needed to stay
Speaker 9: with their children.
Speaker 4: But what is the effect on the economy when you
Speaker 4: know you have hundreds of thousands of Israelis are who
Speaker 4: are fighting rather than working.
Speaker 9: So I said, short term, it's probably going to cost
Speaker 9: us two to three percent of the GDP, so our
Speaker 9: debt to GDP will go from sixty to sixty three.
Speaker 9: We have buffer, We have the capability to deal with
Speaker 9: this because of our tech sector. The tech sector in
Speaker 9: Israel is sort of an isolated, independent sector and usually
Speaker 9: we don't lose a day of delivery on the tech side,
Speaker 9: so the companies are used to having some of the
Speaker 9: people in the reserves. This is something that I remember
Speaker 9: when I was in a company commander and the paratroopers,
Speaker 9: I did seven years reserve duty. That's on top of
Speaker 9: the six years on regular army, and then the people
Speaker 9: filled in for me, and you know, when I was
Speaker 9: away doing whatever I needed to do. There is a
Speaker 9: redundancy in the way we work in the tech side,
Speaker 9: and I think that the tech side looking into the
Speaker 9: future is one of the best bets smart.
Speaker 8: Money can make.
Speaker 9: I've just had a few meetings today with some entrepreneur
Speaker 9: investors and they all understand that this is a good
Speaker 9: opportunity to buy.
Speaker 4: Do they feel differently about investing in his real because
Speaker 4: of stability.
Speaker 10: No.
Speaker 9: On the contrary, they understand that if you look back
Speaker 9: at the history of Israel throughout the wars, no one
Speaker 9: has liver, never lost a day of delivery.
Speaker 4: It does feel a little different though, And forgive me,
Speaker 4: I haven't been there in years, but you know, when
Speaker 4: I visited is Reel years ago, there weren't rockets that
Speaker 4: could reach Tel Aviv. And then in the beginning of
Speaker 4: this and Tel Aviv felt totally cut off from areas
Speaker 4: of conflict. That's not the case right now.
Speaker 9: Well, I was in Tel Aviv a week and a
Speaker 9: half ago. Two weeks ago, there was sirens. We went
Speaker 9: into the safe room and came back and everyone's used
Speaker 9: to moving on with their lives. I mean, we're Israelis.
Speaker 9: We understand how to get you know, how to challenge.
Speaker 9: We have a challenging neighborhood, a tough neighborhood, but we're
Speaker 9: tougher than them, and we know to be good with
Speaker 9: the good guys and extremely aggressive with the bad guys,
Speaker 9: and we know how to differentiate between the two. And
Speaker 9: I think that that's you know, the smart people in
Speaker 9: the room understand that. You know, there's a lot of
Speaker 9: people that are moving with the waves, you know, ups
Speaker 9: and downs, and they hear the news and they but
Speaker 9: the guys I speak to understand the competitive advantage Israel
Speaker 9: has in the tech side. They see that we have
Speaker 9: ten thousand startups. That's one to every thousand Israeli is
Speaker 9: there's a startup by far, the highest ratio in the
Speaker 9: world of entrepreneurship. We have eighteen hundred startups and health
Speaker 9: life sciences alone, leading in security, cybersecurity, and now with
Speaker 9: all of the after this war, you're going to see
Speaker 9: a huge growth in many many sectors that Israel has
Speaker 9: and once we beat Hamas, it's going to be one
Speaker 9: of the safest areas to invest in the South, and
Speaker 9: people are already saying to me, we want to move
Speaker 9: to the south to show those monsters that they're lost
Speaker 9: big time because right in that region in the South,
Speaker 9: there's going to be I believe, huge growth and interest
Speaker 9: of residents and businesses.
Speaker 3: Minister Barcott ask you, though, when Prime Minister Benjamin Netnah
Speaker 3: who says he's committed to paying whatever economic price this
Speaker 3: war exacts on us, though it does that though give
Speaker 3: people pause when they get a little concerned about some
Speaker 3: of the instability, and we've certainly seen it play out
Speaker 3: in the markets.
Speaker 7: Does that make it a little bit more complicated?
Speaker 8: There's full consensus payment in Israel.
Speaker 3: Everyone understands the mission and doesn't question that. But when
Speaker 3: he says whatever economic price for investors, they have this
Speaker 3: ability to make a dividing line between maybe what they
Speaker 3: perceive is what's right and also though what what makes
Speaker 3: sense from an investment perspective. I hate to be so
Speaker 3: black and white just got tight five seconds here.
Speaker 9: Where if there's no security, there's no economy. So security
Speaker 9: is one step before economy, and that's why we're willing
Speaker 9: to put all of what would need to do to
Speaker 9: bring security back to the to the southern region, and
Speaker 9: then we have to deal with the northern region and
Speaker 9: other threats.
Speaker 3: Thank you so much, appreciate it. Near Barcott He is
Speaker 3: the Israel Minister of Economy.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: live on Amazon Alexa from our flagship New York station.
Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 7: Well, we want to switch.
Speaker 3: Gears to a story that's in the upcoming new issue
Speaker 3: of Bloomberg BusinessWeek. It's about the smuggling networks that ferry
Speaker 3: migrant over the US Mexico border. They've long relied on
Speaker 3: vulnerable Americans to do the driver, figuring that they are
Speaker 3: the people most inclined to risk criminal charges for quick cash.
Speaker 3: After all, drivers can be paid thousands of dollars per passenger.
Speaker 6: Yeah.
Speaker 4: In fact, in such cities as Tucson and Corpus Christi, Texas,
Speaker 4: recruiters troll homeless shelters, welfare offices, and secondhand cell phone
Speaker 4: shops for prospective drivers. But real world recruit is time
Speaker 4: consuming and tedious, and now those recruiters have turned to
Speaker 4: a more efficient tool carol social media.
Speaker 11: They have.
Speaker 8: Indeed.
Speaker 3: Julia Love is a technology reporter at Bloomberg News. In
Speaker 3: the new issue at Bloomberg Business Week on newsstands tomorrow,
Speaker 3: she writes about the cartel backed networks that are using Snapchat,
Speaker 3: TikTok and some other apps to entice drivers into transporting migrants.
Speaker 3: She joins us from our San Francisco bureau. Jill Weber
Speaker 3: is the editor of Bloomberg Business Week. He joins us
Speaker 3: here in our interactive broker studio. As we mentioned, it's
Speaker 3: in the upcoming new issue on newsstands tomorrow, but also
Speaker 3: online at Bloomberg dot com, Slash BusinessWeek and already on
Speaker 3: the Bloomberg terminal.
Speaker 7: A bit of a sober story, a real story.
Speaker 12: Very much so. It's actually kind of a sequel to
Speaker 12: a story that Julia wrote earlier in the year, which
Speaker 12: was just a magnificent feature about an American coyote. And
Speaker 12: we kept in touch because we really wanted to see
Speaker 12: what else she could find and loan and behold, this
Speaker 12: one connects directly to her beat and and it shows that,
Speaker 12: you know, the tech companies that are the platforms that
Speaker 12: so many of us use to talk with one another
Speaker 12: are also a way that cartel back groups are recruiting coyotes.
Speaker 12: So take us to the border and how this plays out, Julia.
Speaker 13: Essentially, human smuggling networks need a lot of drivers to
Speaker 13: transport migrants after they cross into the United States on
Speaker 13: the last light of the journey, and they have long
Speaker 13: recruited vulnerable US citizens to do this work. In the past,
Speaker 13: they would recruit people in person at bars. They would
Speaker 13: also go to homeless shelters, you know, places where they
Speaker 13: knew they could find people who were in a tough spot.
Speaker 13: But now social media is enabling them to do that
Speaker 13: with much greater efficiency.
Speaker 8: How do they.
Speaker 4: Find, Julia, these people on social media? You highlight a
Speaker 4: few of them in your story. It's again incredible recording.
Speaker 4: I really encourage our body go read it. But how
Speaker 4: do these orchestrators actually find these people on social media?
Speaker 13: It's a midst of different techniques. Sometimes they will post
Speaker 13: ads that appear briefly that users respond to. The post
Speaker 13: might say something like want to make quick cash, message
Speaker 13: me drivers needed. Other times they will reach out to
Speaker 13: people proactively. There's certain types of users who they seem
Speaker 13: to target. Young Men are a desirable demographic. They see
Speaker 13: them as a little bit more impulsive and willing to
Speaker 13: take a risk. And so our main character for this
Speaker 13: story is a young man who was recruited on Snapchat.
Speaker 13: He had been struggling to pay his bills and when
Speaker 13: he got this offer to make you know, a few
Speaker 13: thousand dollars, he found it enticing.
Speaker 7: Did he do it?
Speaker 3: Tell us about the process, like how he found out about,
Speaker 3: you know, kind of what it was all about, or
Speaker 3: what he thought it was about, and then maybe what
Speaker 3: it really was about.
Speaker 13: Yeah, so he gets a message on Snapchat, you know,
Speaker 13: asking if he wants to make some easy money, and
Speaker 13: then he expresses interest, and the conversation is then shifted
Speaker 13: to WhatsApp where it becomes clear that he will be
Speaker 13: transporting migrants and he has some reservations, but he ultimately
Speaker 13: decides to do it, you know, under under some pressure
Speaker 13: from the recruiter. And Yeah, he sets out on a
Speaker 13: trip and he's he's arrested on his very first drive,
Speaker 13: which is often how these.
Speaker 12: Trips end, which is, you know, such a sober way
Speaker 12: for this to go. But I'm curious because he even
Speaker 12: thought about maybe not doing it as he was considering it, right,
Speaker 12: and he was appro you know, some of his friends
Speaker 12: were approached too, right, and so what drew him to
Speaker 12: ultimately do this.
Speaker 13: So what defense lawyers have really understored to me is that,
Speaker 13: you know, these smuggling networks are ultimately they operate with
Speaker 13: the permission of the cartels, their criminal groups, and so
Speaker 13: you can't really back out of this work. You know,
Speaker 13: they often desert desert pressure.
Speaker 5: You know, there's a.
Speaker 13: Huge power and balance between these young people and the
Speaker 13: folks who are recruiting them. And so that's that's what
Speaker 13: happened to our main character. He did have second thoughts,
Speaker 13: but the the recruiter, you know, send him his address
Speaker 13: and just indicated, you know, you're going to go through
Speaker 13: with this.
Speaker 4: I mean, how do they find like it's it's kind
Speaker 4: of scary stuff here because one, you're dealing with the
Speaker 4: cartel or cartel backed group, I should say, Julia. Two
Speaker 4: they already know this identifying information about someone. So in
Speaker 4: that case, he certainly felt pressured to move forward with it.
Speaker 4: Your technology reporter too, so and this is the story
Speaker 4: is much about technology and the way that that's certainly
Speaker 4: changed many many lives. What do the tech companies say
Speaker 4: about the way these platforms are being used?
Speaker 13: So the tech companies stress that this issue is a
Speaker 13: priority to them, that they do not allow human smuggling
Speaker 13: on their platforms, that they're working closely with law enforcement
Speaker 13: and doing everything they can. But workers tell me that
Speaker 13: behind the scenes, you know, these trust and safety teams
Speaker 13: are tasked with so many big issues elections, child safety,
Speaker 13: and so it's tough for them to find the resources
Speaker 13: for a problem like this, and it can be a
Speaker 13: tough thing to get to the bottom of. You know,
Speaker 13: the posts use veiled language, it can be a little
Speaker 13: bit tricky at stale to determine, you know, will are
Speaker 13: they trying to recruit a coyote or are they recruiting
Speaker 13: a private chauffeir, And so, yeah, it's tough.
Speaker 3: Well, and you know what I thought was interesting is
Speaker 3: and you include this in your story, Tulia, is that
Speaker 3: you make a point of like this stuff we post
Speaker 3: on social media can actually make you a target for recruiters.
Speaker 7: Talk to us a little bit about that oversharing.
Speaker 13: Right, Yeah, yeah, So one story that we feature in
Speaker 13: the piece is a young woman in the Phoenix area
Speaker 13: who she was a single mom going through a very
Speaker 13: tough time, and she's approached by an acquaintance on Facebook
Speaker 13: who asks if she wants to make some extra money.
Speaker 13: And so I think that's just an example of how,
Speaker 13: you know, young people can kind of unwittingly make themselves smarts.
Speaker 12: What about the companies and all of this, Julie, Because
Speaker 12: obviously the a company like Snap or Meta like I mean,
Speaker 12: and you could almost use any messaging platform to you know, post,
Speaker 12: you know, and lure people into this kind of underworld.
Speaker 12: What are the companies capable of doing? What do we
Speaker 12: know about what they have I've done? And how are
Speaker 12: they limited?
Speaker 13: Yeah, so the companies can certainly moderate content. They filter
Speaker 13: by emoji and keywords. So one emoji that's often used
Speaker 13: in these cases is an emoji of a little chicken,
Speaker 13: which stands for poytos slain for migrants used along the border.
Speaker 13: So there are some tools they can use, and yet
Speaker 13: the posts really seem to be proliferating. Law enforcements frustrated.
Speaker 13: They do feel like there's more that the companies could
Speaker 13: be doing, and lawmakers have been done to pay attention
Speaker 13: to this issue. Kirsten Cinema, a senator in Arizona, has
Speaker 13: proposed a bill that would make it easier for companies
Speaker 13: to report these posts to law enforcement. And so, you know,
Speaker 13: I think there really is pressure on the companies to
Speaker 13: deterb the activity, all.
Speaker 3: Right, And while Kim Kardashian probably doesn't have to be worried,
Speaker 3: there are some influencers that are out there on social
Speaker 3: media that have been targeted as well well and recruited.
Speaker 7: Talk to us about this, yes.
Speaker 13: So there it does seem that the networks are interested
Speaker 13: in having their message boosted by people who already do
Speaker 13: have a large following online. And so there's one case
Speaker 13: we know in the story where there was a young
Speaker 13: rapper in southern Arizona who had a big following on
Speaker 13: social media and he was ultimately hired to be a
Speaker 13: recruiter and to you know, post and coordinate these jobs
Speaker 13: on on social media. And you know, his defense lawyer
Speaker 13: maintains that he was targeted like anyone else that the
Speaker 13: that they appealed to his to his vanity. And he's
Speaker 13: now in prison.
Speaker 7: Yeah, thirty six months sentenced in federal prison.
Speaker 12: So what's it like when you go down to you
Speaker 12: know Arizona, and I mean you did spend some time
Speaker 12: in the courthouse there, like, how how many of these
Speaker 12: cases are coming through and what kind of luck is
Speaker 12: law enforcement having in actually cracking down.
Speaker 13: Yes, so I spent about a week in southern Arizona.
Speaker 13: It was really striking to be in the courthouse. It
Speaker 13: felt like, you know, at least half of the judge's
Speaker 13: calendars were filled up with these tases defendants being indicted
Speaker 13: and sentenced. And I also went for a ride along
Speaker 13: with a local sheriff's deputy who was trying to catch
Speaker 13: human smuggling drivers in the act. He didn't have any
Speaker 13: luck during my ride along with him, but he was
Speaker 13: kind of longingly looking at his phone on Snapchat where
Speaker 13: he could see the posts in action, and the challenge
Speaker 13: was just was just actually finding those drivers.
Speaker 4: Hey, can you talk Julia a little more about how
Speaker 4: how you reported this story. I mean, don't give away
Speaker 4: all your secrets here, but how you reported it and
Speaker 4: how this got on your radar post the American coyote
Speaker 4: story that you wrote earlier this year.
Speaker 14: Sure.
Speaker 13: Yeah, Well, so I was previously a foreign correspondent in
Speaker 13: Mexico and one of the big revelations of my time
Speaker 13: at the border was just realizing that the operations of
Speaker 13: these human smuggling networks extended really deep into the United States,
Speaker 13: and so I just became really fascinated by that shadow economy.
Speaker 13: And I have spent a lot of time looking through
Speaker 13: court cases and those became kind of the seeds of
Speaker 13: my reporting.
Speaker 5: Juliet.
Speaker 7: One thing I wonder is it working though?
Speaker 3: Are a lot of individuals ultimately getting smuggled in a
Speaker 3: lot of immigrants or and you get into this in
Speaker 3: the story too, that law enforcement there's some really easy
Speaker 3: red flags when they know someone is doing it, like
Speaker 3: out of state licenses. But I'm just curious if it is, though,
Speaker 3: ultimately successful and bringing word they even know or if
Speaker 3: they even know right.
Speaker 13: Yeah, it's a tough problem. I think law enforcement feels
Speaker 13: like they only apprehend a tiny fraction of the cars
Speaker 13: that are transporting migrants. And yet for these young drivers
Speaker 13: who you know, don't really know their way, you know,
Speaker 13: there is a good chance they'll get todd especially if
Speaker 13: they if they go out on multiple drives. And if
Speaker 13: you're offered, you know, the chance to make a few
Speaker 13: thousand dollars, well, not only will you be enticed to
Speaker 13: do it once, but you might very well decide to
Speaker 13: try your hand.
Speaker 10: Editor again.
Speaker 8: What are the.
Speaker 4: Economics here, Julia? When it starts with the person who's
Speaker 4: paying to be smuggled across the border, they these people
Speaker 4: certainly save money for a very long period of time.
Speaker 4: Who are they paying? How much do and to what
Speaker 4: extent do the cartels sort of take that and I'm
Speaker 4: kind of wondering, like how it ends up being a
Speaker 4: couple thousand dollars per person when it gets to that
Speaker 4: actual driver.
Speaker 13: Yeah, so prices for the journey to the United States
Speaker 13: have really skyrocketed. It all depends on where migrants who
Speaker 13: you know, are departing from those who are coming from
Speaker 13: outside of the Americas pay a lot more. But the
Speaker 13: the money is kind of, you know, partitioned out along
Speaker 13: the way. Typically that there's a fee that goes directly
Speaker 13: to the cartels in order to cross the border, and
Speaker 13: then the drivers ultimately will be paid a certain rate.
Speaker 13: Oftentimes it's per passenger, and I've seen that really run
Speaker 13: the dam it. I think it depends a lot on
Speaker 13: the on the driver's bargaining ability and and lawyers tell
Speaker 13: me that especially with these with these young drivers. They
Speaker 13: often aren't paid the wage that they're that they're promised
Speaker 13: when they do complete the job, and I think the
Speaker 13: attitude is essentially you know, well, what are you going
Speaker 13: to do about it?
Speaker 12: We've been talking about the border forever and I just
Speaker 12: think that it's so interesting that there's this little wrinkle
Speaker 12: in it, which is, you know, how does technology fit
Speaker 12: into this? Well, listening maps that you use for everything
Speaker 12: else are the ones that are being used to basically
Speaker 12: bait people into making a couple bucks. And you know,
Speaker 12: also that side of this of like less about the
Speaker 12: migrants more about Americans being drawn into this is also
Speaker 12: super interesting.
Speaker 3: Yeah, exactly, and right taking the risk, right to make
Speaker 3: some money.
Speaker 8: As this whole new generation of Kent.
Speaker 3: It's funny that you said about the apps I've seen
Speaker 3: about WhatsApp, right, because a lot of times the conversation
Speaker 3: switches to that and I think about, okay, so what's
Speaker 3: their responsibility encrypted in all of it?
Speaker 7: I understand write, but it's just it's interesting. Julia.
Speaker 3: Thank you so much taking us to a place that
Speaker 3: many of us will never see or understand, but you.
Speaker 7: Certainly have shed a lot of light on it.
Speaker 3: Till you live love excuse me, of course, technology reporter
Speaker 3: of Bloomberg News in our San Francisco bureau are thanks
Speaker 3: to Jill Weber, the.
Speaker 7: Editor of Bloomberg Business Week.
Speaker 1: Cool.
Speaker 6: You're welcome.
Speaker 7: Yeah, thank you, Thank you. The story and the new ish.
Speaker 7: It's on newstands tomorrow.
Speaker 3: It's already online at Bloomberg dot com slash business weekend
Speaker 3: of course, always on the Bloomberg terminal.
Speaker 7: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen.
Speaker 2: On Bloomberg dot com, the iHeartRadio app, and.
Speaker 1: The Bloomberg Business App, or watch us live on YouTube.
Speaker 3: Former US Secretary of State Hillary Clinton criticized Chinese President
Speaker 3: Jijiping's decision to keep power for longer than the two
Speaker 3: terms of his immediate predecessors, while Citadel founder Ken Griffin
Speaker 3: slammed the US for excessive debt and spending at the
Speaker 3: Bloomberg New Economy Forum in Singapore, which just wrapped up
Speaker 3: it's sixth annual event in Singapore. Talking with Ken Griffin
Speaker 3: and more, Bloomberg New Economy editorial director Eric Shatsker, who
Speaker 3: joins us back from another world win, World win event,
Speaker 3: he joins us here in your interactor, Brokers, do do
Speaker 3: you know.
Speaker 7: What time you're on right now?
Speaker 14: I know what the clock says. I'm not sure. My
Speaker 14: body feels the same way.
Speaker 7: Just getting back yesterday, four hundred and fifty leaders from
Speaker 7: across the region, the public and private sector.
Speaker 8: That's right.
Speaker 7: Tell us about this event.
Speaker 3: Remind us, you, guys, bridge the divide between East and West,
Speaker 3: as you like to say, and so much.
Speaker 14: More, not just between East and west, global North, global South.
Speaker 14: It is our flagship event, the biggest event, the most
Speaker 14: high profile event we at Bloomberg hold every year. It was,
Speaker 14: as you say, in Singapore. We've had it in Singapore
Speaker 14: four times now, in Beijing once, and there's a possibility
Speaker 14: we take it back to Beijing, but obviously the conditions
Speaker 14: under which we would do so are quite challenging. At
Speaker 14: the moment. We spent a lot of time talking about
Speaker 14: the US China relationship. It's on the minds of pretty
Speaker 14: much everybody, right. We had so many CEOs come to Singapore, HSBC, UBS, Volvo, Franklin, Templeton, McCrory,
Speaker 14: the list goes on. Some big name investors you mentioned
Speaker 14: Ken Griffin. I would also add Mark Karney, right, who
Speaker 14: is He happens to be the chairman of our board,
Speaker 14: but he's also the chairman of the board of Brookfield
Speaker 14: Asset Management. Lim Choo Kiat who's the CEO of g
Speaker 14: I C, the gigantic Singaporean sovereign wealth manager. Some technologists,
Speaker 14: the fascinating guy Nubar Afayon who's the co founder of Maderna.
Speaker 14: You may have spoken to him in the past. Jeffrey Katzenberg,
Speaker 14: the Hollywood mogul who's now moved into technology investing. Kai
Speaker 14: Fu Lee whom you know, one of the pioneers and
Speaker 14: artificial intelligence. It all added up to an amazing three
Speaker 14: days of programming, great one on one interviews, great conversations,
Speaker 14: great breakout sessions off the stage.
Speaker 4: Hey, Eric, you mentioned you know certainly US China relations
Speaker 4: being a focus, not just there, but certainly for us
Speaker 4: this week with potentially I think you know it's actually
Speaker 4: going to happen all but happened already President Biden and
Speaker 4: President chijiin Ping meeting on Wednesday in San Francisco. But
Speaker 4: it also happened against the backdrop of Israel and Hamas
Speaker 4: and Israel's war against Tamas and vice versa. What did
Speaker 4: you hear from leaders around the world when it came
Speaker 4: to Israel.
Speaker 14: Well, I would say this, a year ago, we were
Speaker 14: talking about the war in Ukraine. We're still talking about
Speaker 14: the war in Ukraine. It's still happening. Tragically. What the
Speaker 14: attack on Israel by Hamas and Israel's subsequent offensive against
Speaker 14: Tamas in Gaza has done is complicate the geopolitical backdrop.
Speaker 14: It has made geopolitics are always unpredictable and always unmanageable.
Speaker 14: But now that you have two wars going on and
Speaker 14: the possibility of something else breaking out on say a
Speaker 14: third front, if you will, and I'm not going to
Speaker 14: predict what that might be, but there are lots of
Speaker 14: people thinking that perhaps Vladimir Putin, or perhaps even Chi
Speaker 14: Jinping or you know, North Korea, might decide to take
Speaker 14: advantage of the fact that the US is stretched on
Speaker 14: a couple of fronts and try to open up a third.
Speaker 14: It really is world of incalculable outcomes. Geopolitics, unlike say
Speaker 14: interest rate risk right is pretty much, at least at
Speaker 14: at a top level like that impossible to hedge, and
Speaker 14: that is a major concern for the CEOs, multinational leaders
Speaker 14: you know who attended the forum. They're trying to run
Speaker 14: companies in this kind of a climate. And also for
Speaker 14: public sector leaders this heads of state or the senior
Speaker 14: ministers who who talked about the difficulty of trying to
Speaker 14: you know, create economic policy, foreign policy in this kind
Speaker 14: of an environment.
Speaker 3: Was there a feeling or takeaway in terms of tone
Speaker 3: of nervousness, concern that this does kind of get out
Speaker 3: of control? In terms of the geopolitics that are there
Speaker 3: are feeling that you know, smarter heads figure it their.
Speaker 7: Way, would say, just lots of questions.
Speaker 14: The point around which there seems to be little doubt
Speaker 14: is that there is a greater chance of things getting,
Speaker 14: as you put it, out of control than perhaps at
Speaker 14: any point maybe since before maybe since before the Second
Speaker 14: World War. Certainly, you know, if you look at global
Speaker 14: relations since then, you know, maybe since the Cuban missile crisis.
Speaker 14: It feels as uncertain then now as it perhaps did
Speaker 14: at any point since then.
Speaker 3: We have had more guests who talk about a World
Speaker 3: War three than I feel like I've had in a
Speaker 3: loge so much rational people. Yeah, just because of there's
Speaker 3: so many kind of flashpoints around the world.
Speaker 14: What Ken Griffin told me, and I think sums it up,
Speaker 14: is that the peace dividend is at the end of
Speaker 14: the road. This period of time that we enjoyed since
Speaker 14: the Second World War, the so called Pax Americana, where
Speaker 14: US hegemity even during the Cold War, made the world
Speaker 14: a relatively safe place.
Speaker 1: Right.
Speaker 14: If you look at the continuity of human history, very
Speaker 14: rarely have you had a seventy five year period in
Speaker 14: which there were no major wars. And in his mind,
Speaker 14: all of the benefits that we enjoyed of that peace
Speaker 14: dividend are now very quickly coming to an interest rates arising.
Speaker 14: For example, geopolitical risk, as we've discussed, is intensifying. Globalization
Speaker 14: is in reverse. All of these things that were features
Speaker 14: of that post war environment are now changing, and they're
Speaker 14: changing at a very rapid clip. And the world is
Speaker 14: to a large degree both companies and governments unprepared for
Speaker 14: change at that pace.
Speaker 4: How should we be looking at the meeting later this
Speaker 4: week by President Biden and President Chijin Ping at San Francisco,
Speaker 4: I mean.
Speaker 8: That has to be It looks like progress on the surface.
Speaker 14: Yes, the best I think the best way to look
Speaker 14: at it was through the lens that the Singaporean Foreign
Speaker 14: Minister actually described, which is the lens of whether believe
Speaker 14: it or not. He said, the weather is improving, but
Speaker 14: the climate is not in terms of US China relations,
Speaker 14: and so it feels better, but on the underlying trend
Speaker 14: is still negative. And we had a bit of a
Speaker 14: preview of what President she might say in San Francisco,
Speaker 14: because Vice President Han Jong of China came to the
Speaker 14: New Economy Form and delivered a speech, and in it
Speaker 14: he he wistfully, I would say, called for, or at
Speaker 14: least hoped for a return to what now feels like
Speaker 14: a time of one's distant memory, which is to say,
Speaker 14: the pre pandemic period when let's say, before the Trump
Speaker 14: tariffs were first levied, everyone seemed to be getting along,
Speaker 14: you know, the the chimerica, remember that portmanteau. He said,
Speaker 14: and I'm going to quote him directly. We need to
Speaker 14: follow the laws of economics, support multilateralism, promote the free
Speaker 14: flow of production actors in the global market, and build
Speaker 14: industrial and supply chains that are convenient, efficient and secure.
Speaker 14: He sounds like a nineteen nineties free trader.
Speaker 5: Right.
Speaker 14: That era is over and we're not going back there
Speaker 14: is simply nowhere near enough trust between the United States
Speaker 14: or the West and China for anyone to feel compelled
Speaker 14: to rely on that unidirectional, effectively flow of trade that
Speaker 14: we had after or at least at the moment of
Speaker 14: peak globalization. Whenever that was twenty sixteen, twenty seventeen, twenty eighteen,
Speaker 14: it was certainly prependem and I think many.
Speaker 3: Would argue President gi has also got his sites on
Speaker 3: a different way forward.
Speaker 14: Well, China is changing, right, the Chinese economy is changing,
Speaker 14: and in fact, Chinese companies. I don't know whether this
Speaker 14: is necessarily a reflection of Chinese government policy or just
Speaker 14: a reality for Chinese companies, but China isn't waiting for
Speaker 14: the world to come to its s door step any longer.
Speaker 14: You know, Foreign direct investment is into China is plumbing,
Speaker 14: and it's the Chinese companies that are actually being able
Speaker 14: to invest, whether it be here in the United States.
Speaker 14: They are a number of examples of Chinese companies being active,
Speaker 14: for example in evs and in particular the battery sector
Speaker 14: or other parts of the world.
Speaker 3: Well, certainly gives us a lot to think about, and
Speaker 3: you just put it all together so well, and I
Speaker 3: highly recommend for folks to just head to the Bloomberg
Speaker 3: or Bloomberg dot com and check out some of the
Speaker 3: interviews from Bloomberg New Economy. Welcome back, Thank you, Bloeberg
Speaker 3: New Economy editorial director Eric Shatsker.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
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Speaker 3: Thirty plenty ahead in our second hour of the weekend
Speaker 3: edition of Bloomberg Business Week, including an MIT scientist who's
Speaker 3: developed a playbook for the brightest minds looking to innovate
Speaker 3: their way to six and who.
Speaker 7: Aren't afraid of being labeled as geeks.
Speaker 4: It's kind of okay, yeah, it totally is the geek way. Plus,
Speaker 4: we delve into the secret history of women in the
Speaker 4: Central Intelligence Agency from the Cold War era to the
Speaker 4: hunt for Osama bin Laden.
Speaker 3: Leave it to women to get it done, all right.
Speaker 3: First up this hour, the cover story of the new
Speaker 3: double issue of Bloomberg BusinessWeek magazine, It's on newstands now
Speaker 3: on the Bloomberg Terminal, an online at Bloomberg dot com
Speaker 3: slash BusinessWeek. It's the culmination of an eleven month investigation
Speaker 3: into a secret of London hedge fund manager who doubles
Speaker 3: as a deep sea treasure hunter.
Speaker 4: The financier has a marshal to high tech operation to
Speaker 4: recover lost pieces of history spanning centuries and entire civilizations
Speaker 4: from oceans around the globe, and he's managed to keep
Speaker 4: in this remarkable enterprise a secret until now. For more,
Speaker 4: let's welcome in Bloomberg News senior writer Kit Schillell and
Speaker 4: once again the editor of Bloomberg BusinessWeek, Joel Weber. Joel,
Speaker 4: I couldn't put this story down. It's got everything. Anonymous billionaire,
Speaker 4: state of the art technology, and treasure fever. Not anonymous anymore, Yes,
Speaker 4: not anonymous anymore. But tax Breaks is kind of where
Speaker 4: it starts.
Speaker 12: Kind of started there and look like Kit Chillil and
Speaker 12: company on this one. Just incredible team.
Speaker 8: Uh it does.
Speaker 12: There's so much mystery in this and I think Kit,
Speaker 12: as at his best, is like a heat seeking missile
Speaker 12: for these mystery mysteries like this.
Speaker 8: Everything happens underwater.
Speaker 14: Here.
Speaker 12: Mostly there's a few things that have ended up in courts,
Speaker 12: which I'm sure we'll talk a little bit about. Uh,
Speaker 12: there's rivalries, Uh, there's treasure. But here's the name that
Speaker 12: you'll never heard of before, Anthony Clake, and he's a
Speaker 12: forty three year old hedge fund executive in London. How
Speaker 12: did he get into the space and how much does
Speaker 12: he like, uh to get in the water kit?
Speaker 15: Yeah, hi guys, Hi, Anthony Clake. There's actually a bit
Speaker 15: of a history in the city of London of adventurous
Speaker 15: business people, bankers, hedge fund types going after sunken treasure
Speaker 15: in the pursuit of profits. But around the turn of
Speaker 15: the century, an ingenious asset manager came up with an
Speaker 15: idea of not only having fun looking for treasure at
Speaker 15: the bottom of the sea, pulling out Spanish coins and
Speaker 15: want to RaSE they could find, but they could also
Speaker 15: get a nice tax break as well with the British government.
Speaker 15: So they structured all these schemes and that got a
Speaker 15: whole you know, hundreds of people in the city interested
Speaker 15: in the idea of shipwreck harancing for profits. Now, these
Speaker 15: tax schemes kind of died a depth and they never
Speaker 15: really went anywhere. But it was through those initiatives that
Speaker 15: Anthony Klake and the guys at Marshall waste which is
Speaker 15: a huge hedge fund. First, I guess they first came
Speaker 15: to the idea that they could make some money doing this.
Speaker 12: Is it clear how much money has been made at
Speaker 12: the bottom of the ocean, but these.
Speaker 15: I meaning nothing about nothing about any of this is clear.
Speaker 15: You know. One of the things the if you're a
Speaker 15: wreck hunter, everyone wants to know what you're up to,
Speaker 15: because basically, once you find some valuable stuff on the seafloor,
Speaker 15: it's kind of yours to do what you want with really,
Speaker 15: so if you find it, it's top secret, you know what,
Speaker 15: anyone to know where it is. You want to be
Speaker 15: able to come back later and collect it. So they
Speaker 15: go to great lengths to kind of disguise what they're doing.
Speaker 15: So it was incredibly difficult to piece together all the
Speaker 15: different wrecks that that Anthony Klake has found. But you know,
Speaker 15: we call him Lord of the Deep in the in
Speaker 15: the story. If anyone can lay play to that title,
Speaker 15: it's him. He's found thirty or more ship wrecks. The
Speaker 15: value of the stuff that he's found thousands of men
Speaker 15: to see runs into billions of dollars. You know, he's
Speaker 15: right at the very top.
Speaker 4: Okay, but it's not like he's jumping off a ship
Speaker 4: and diving into the water to find these things. The
Speaker 4: way he's doing it is extremely technical. It's high tech.
Speaker 4: It involves some very expensive gear. Kit tell us how
Speaker 4: he does it, Well, I'd.
Speaker 15: Kind of assumed he was a yacht guy who he's
Speaker 15: one of these people. He's always out on his yacht
Speaker 15: or a sailing boat. That's not him at all as
Speaker 15: far as I can I can tell, and speaking to
Speaker 15: people who work with him, he doesn't even really like
Speaker 15: the sea, doesn't go out on the boats. He sees
Speaker 15: this as kind of a tech game, a data game.
Speaker 15: He sees getting to the bottom of the ocean as
Speaker 15: a technical and data challenge that he can solve better
Speaker 15: than anyone else. And so he's built this, this sort
Speaker 15: of swarm of undersea robots, well beating technology, side scammed sonar.
Speaker 15: He's got artificially intelligent software. He deploys it all and
Speaker 15: that kind of what makes him so good at what
Speaker 15: he does.
Speaker 7: But not every.
Speaker 3: Exploration kit turns out to either find something or you know,
Speaker 3: create a lot of money for him or returns if
Speaker 3: you will, or even if he finds something right, it
Speaker 3: doesn't necessarily means he owns it.
Speaker 6: Yeah, it's contentious stuff this.
Speaker 15: You know, governments don't really like it when rich guys
Speaker 15: with expensive boats come pushing around in the you know,
Speaker 15: outside their terwial waters looking for old shipwrecks. You know,
Speaker 15: in anoised people, you tend to get attracted, You tend
Speaker 15: to attract the attention of the local coastguard to come
Speaker 15: out and ask what you're doing. So Claque's guys have
Speaker 15: been arrested at a bunch of different places. Now I
Speaker 15: should say none of this is illegal, you know, there's
Speaker 15: no law against especially in international water going and salvaging shipwrecks.
Speaker 15: But ownership is a very difficult issue. All the staff
Speaker 15: that sinks to the bottle of the ocean ships was
Speaker 15: once owned by someone, and all those people have a
Speaker 15: potential legal claim to that cargo whenever it's pulled to
Speaker 15: the surface. So there's an expression that modern shipwreck hunting
Speaker 15: is done in the courtroom. And sometimes when you you
Speaker 15: know you can, you can recover fifteen million dollars worth
Speaker 15: of gold and then spend ten years in courts trying.
Speaker 10: To keep it.
Speaker 12: Okay, well you got my attention there with gold at
Speaker 12: the bottom of the ocean. What's an example or or
Speaker 12: multiple examples that you uncovered in your reporting about what
Speaker 12: kind of stuff Click is looking for down there?
Speaker 6: Well, he runs the gamut.
Speaker 15: Really, you know, of course, there are three millionship wrecks
Speaker 15: in the ocean going back thousands of years, so there's
Speaker 15: all sorts of good stuff down there. He's found ming
Speaker 15: vases down there, He's found like Spanish to balloons, jewelry.
Speaker 6: And more straightforward.
Speaker 15: You know, cargo of cut silver coins from the Bombay
Speaker 15: Mint that sank in the Second World War and just
Speaker 15: you know, was just left untouched for years. You know,
Speaker 15: you can pull those to the surface and smelt them
Speaker 15: down and sell them, and you've got let's say, twenty
Speaker 15: million dollars worth of silver. So there's a whole range
Speaker 15: of different things.
Speaker 8: Okay, So.
Speaker 12: No one's known this guy, but you managed to find
Speaker 12: him and get him to talk to you. What did
Speaker 12: you learn and how did you get him to talk
Speaker 12: to you?
Speaker 15: Actually, how did I get him to talk to me?
Speaker 15: You know, he's spent a long time avoiding scrutiny. He
Speaker 15: works really hard to keep his name out of the
Speaker 15: public domain.
Speaker 3: You know.
Speaker 15: The kind of invisibility that he has is an act
Speaker 15: of will. He has chosen to remain in the shadows.
Speaker 13: You know.
Speaker 15: We came to him and just basically said, look, we're
Speaker 15: writing about shipwrecks and your business. Would you like to
Speaker 15: explain sort of the complexities to us? And so we
Speaker 15: had an interesting brief conversation where he talks me to
Speaker 15: through what he's been doing over the last few years.
Speaker 15: But one thing he wasn't really able to answer. One
Speaker 15: thing I still don't really know, is you know, why
Speaker 15: go to all this trouble. He works at a sixty
Speaker 15: two billion dollar hedge funds. He doesn't need extra money
Speaker 15: from shipwrecks. He claims not to be particularly interested in
Speaker 15: the historical side of things, so he's still kind of
Speaker 15: an enigmatic character.
Speaker 7: You've been there in the Ocean Infinity control room. Is
Speaker 7: that correct?
Speaker 15: It was one of my colleagues, Olivia got a tour. Yes,
Speaker 15: it's an amazing high tech facility. It looks like a
Speaker 15: sort of an e gaming areader. There's his giant shairs
Speaker 15: and sort of Xbox style controllers, and it's from that
Speaker 15: room they can they can remotely control under what's a
Speaker 15: vehicle's robotic submarines. They're even building a fleet of new
Speaker 15: ships now that can be completely unmanned, that can just
Speaker 15: be at sea controlled from their HQ.
Speaker 4: Hey, Kit, he told you that he thinks the world
Speaker 4: has reached peak shipwreck and come out the other side
Speaker 4: based on your reporting. Do you think that's true? Do
Speaker 4: you believe him?
Speaker 15: I mean, look, people have been doing this for hundreds
Speaker 15: of years and the tech is just getting better and
Speaker 15: better and better.
Speaker 6: Do I think that.
Speaker 15: If one of his robot submarines uncovered a very interesting
Speaker 15: looking shipwreck that he thought might yield some interesting material, do.
Speaker 6: I think he'd go for it? Yes?
Speaker 15: Absolutely, I do. It's irresistible once you get the once
Speaker 15: you get interested in this stuff, once you get hooked,
Speaker 15: it's treasure fever. You have to go back.
Speaker 12: Okay, Kit, So any sense of what might be on
Speaker 12: his wish list for the next treasure hunt.
Speaker 15: That I don't. You can play an interesting game with
Speaker 15: Ocean Affinity, which is his company. Those vessels used the
Speaker 15: AIS satellite location system, so you can actually see where
Speaker 15: they are in the world, and we played this game
Speaker 15: with a couple of ships that are charted by Ocean
Speaker 15: Affinity or owned by Ocean Affinity, and sure enough they
Speaker 15: were running ladder search formations in places where there are
Speaker 15: lots of shipwrecks. You now, we don't know what they
Speaker 15: were doing. Ocean Affinity doesn't share what they do for
Speaker 15: their clients. They like to treat.
Speaker 6: Their client copy and chelte very seriously.
Speaker 15: So they could have been there just looking for undersea
Speaker 15: cables or you know, looking for oil and gas or
Speaker 15: something as simple as that. But you know who knows.
Speaker 3: It's an unbloo pirates, really cool, unbelievable story. Bloomberg News
Speaker 3: senior writer Kitchillell joining us on Zoom from London. Kit
Speaker 3: thank you so much for being here with us. Angel Webber,
Speaker 3: of course, the editor of Bloomberg Business Week, joining us
Speaker 3: in studio.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from three six Eastern Listen.
Speaker 2: On Bloomberg dot com, the iHeartRadio app, and the.
Speaker 1: Bloomberg Business app, or watch us live on YouTube.
Speaker 7: We want to talk AI. We want to talk innovation,
Speaker 7: kind of talk the next big thing.
Speaker 4: Yeah, we got a great guest to do that. Andrew
Speaker 4: McAfee as Principal Research scientist at MITS. He's out there
Speaker 4: of a new book, The Geek Way, The radical mindset
Speaker 4: that drives Extraordinary results. He's also the visiting a visiting
Speaker 4: Fella or the visiting fellow, the only one in tech
Speaker 4: and society at Google, where he's working with Google on
Speaker 4: research related to the societal impacts of generitive AI. The
Speaker 4: book is called The Geek Way. What is the geek Way?
Speaker 6: The Geekway is an upgrade to the company.
Speaker 11: It's a better set of philosophies and practices for running
Speaker 11: this thing we call a company. And I decided to
Speaker 11: write the book because I kept on seeing in industry
Speaker 11: after industry the disruptors were beating the incumbents at their
Speaker 11: own game. And I thought that was a really important
Speaker 11: phenomenon and I wanted to understand it. And it turned
Speaker 11: into this book.
Speaker 3: Hey, listen, the word geek Like you're such a geek. Oh,
Speaker 3: i'ms being so geeky, you know, like we kind of
Speaker 3: toss it around.
Speaker 7: But what exactly do you mean? I know, you've got
Speaker 7: four norms to.
Speaker 3: Talk about the geek Way. I mean, is that how
Speaker 3: you define it no.
Speaker 11: And this is a really important question because when I
Speaker 11: was a kid, geek was an insult, and it was
Speaker 11: usually when somebody who was way too into computers. So
Speaker 11: I was guilty of that. And the thing that makes
Speaker 11: me happy is that the definition has broadened out and
Speaker 11: I don't think it's an insult anymore. A geek is
Speaker 11: somebody with two characteristics. They get obsessed with a really
Speaker 11: hard problem. They're tenacious, they can't let it go. And
Speaker 11: if their solutions are unconventional or outside the mainstream, they
Speaker 11: don't care. So my shorthand phrase for a geek these
Speaker 11: days is any kind of obsessive maverick. And the geeks
Speaker 11: that I wrote the book about are the geeks that
Speaker 11: got obsessed with this really hard problem of how do
Speaker 11: you run and keep succeeding with a company in today's
Speaker 11: really uncertain, turbulent environment.
Speaker 16: So elon musk A geek, geek, big geek, not perfect,
Speaker 16: not by any stretch, but a here's deeply to a
Speaker 16: couple of these norms that I talk about in the
Speaker 16: geek way.
Speaker 3: Well let's get to those norms. There's four of them, speed, ownership, science,
Speaker 3: and openness. Speed you're talking about not doing necessarily something fast.
Speaker 3: But you do something, create it in a meaningful way,
Speaker 3: and then you get useful feedback on it. I feel
Speaker 3: like it's every time I get like, hey, an iOS
Speaker 3: update or something i I'm helping with that speeds.
Speaker 6: That's exactly right.
Speaker 11: And of all the norms, Elon and his companies epitomize
Speaker 11: speed the most. For me, Tesla is willing to blow
Speaker 11: up rockets. Now, no people are on those rockets, and
Speaker 11: they don't have any loss of life yet, but they
Speaker 11: will iterate and get feedback and learn from reality and
Speaker 11: learn from physics and blow things up. And their results
Speaker 11: really speak for themselves. And if you look at Tesla
Speaker 11: and it's market value and its ability to build affordable
Speaker 11: electric cars profitably, they are clearly disrupting the entire inhuman
Speaker 11: automotive industry and taking it into a different chapter.
Speaker 4: What about Tim Cook? Is Tim Cook a geek?
Speaker 7: Tim Cook is a geek.
Speaker 11: Apple is a very secretive company, and in some ways
Speaker 11: that are a little hard to penetrate. But one thing
Speaker 11: that I learned about Apple, in addition to being very
Speaker 11: fond of this iterative approach, they also followed the norm,
Speaker 11: the great geek norm of science and what I mean
Speaker 11: by that is not do a bunch of fancy statistical
Speaker 11: ab tests or anything, but settle your arguments based on evidence.
Speaker 11: And there's a wonderful story about that portrait mode on
Speaker 11: the iPhone and the fact that the background is blurry
Speaker 11: and you can control the blur when you're setting up
Speaker 11: the photo. There is a debated Apple and they're rolling
Speaker 11: out that feature about whether we should have the ability
Speaker 11: to control the blur in advance or only see the
Speaker 11: effects after we take the picture. Someone in a big
Speaker 11: meeting did a demo of the feature where you can
Speaker 11: preview the blur, and that's settled the argument. That's what
Speaker 11: science is. It's an evidence based argument. The geeks love
Speaker 11: to argue and they love evidence, right.
Speaker 7: I love that one. You write about a lot in
Speaker 7: the book, which is really interesting.
Speaker 3: The other thing I like is openness, which you know,
Speaker 3: you've got to be able to share.
Speaker 7: Be open to.
Speaker 3: Well, wait a minute, maybe we should do something a
Speaker 3: little bit differently, or and maybe we have to change.
Speaker 3: It's so easy to be defensive with, you know, with
Speaker 3: anything you do.
Speaker 7: Talk us a little bit more about this.
Speaker 11: Yeah, and maybe I'm wrong, and maybe we need to
Speaker 11: pivot and maybe this thing that I've invested a ton
Speaker 11: in and this thing that I'm hanging my reputation on
Speaker 11: is not the right answering we need to change. So
Speaker 11: for me, openness is just about exactly the opposite of defensiveness,
Speaker 11: of clinging to what you have and never letting it go.
Speaker 11: And that defensiveness is very clearly tied to an attitude
Speaker 11: inside a company of winning all the time, of just winning,
Speaker 11: winning the argument, winning the day, winning whatever. I don't
Speaker 11: think it's a coincidence that Jack Welch's autobiography was called
Speaker 11: winning and walking away from that. And it's not that
Speaker 11: the Geeks love losing. These these are incredibly tough competitors,
Speaker 11: but they realize that if you're going to win over
Speaker 11: the long haul, you have to take risks. You have
Speaker 11: to fail sometimes, you have to not punish people when
Speaker 11: they are failing. And I think it's amazing that Jeff
Speaker 11: Bezos and one of his shareholder letters a few years
Speaker 11: ago said, look, if we are not incubating multi billion
Speaker 11: dollars inside Amazon right now, we are not innovating at
Speaker 11: the right scale. We are not taking enough risks. Now
Speaker 11: it looks like Alexa was one of those multi billion
Speaker 11: dollar failures, but the culture at Amazon is one that
Speaker 11: not only tolerates that, but in any cases celebrates it.
Speaker 4: One of those maybe that I don't know if we
Speaker 4: can consider it a failure at this point, but one
Speaker 4: of those that wasn't a failure was AWS and the
Speaker 4: guy who was charged and tasks with building that out
Speaker 4: is none other than Andy Jassey, who's now the CEO
Speaker 4: of Amazon. Okay, so Andrew, tell us about some folks
Speaker 4: who maybe aren't geeks that you've come across in your research,
Speaker 4: who are high profile and we've heard of.
Speaker 11: I mean, you can look at the unbelievable lyee short
Speaker 11: lifespan of Quibi, which was this short video streaming quickly
Speaker 11: launched with fair.
Speaker 7: We all watched it from our homes during the pandemic,
Speaker 7: but go ahead.
Speaker 8: No, we didn't. That's why. That's why it is.
Speaker 6: We didn't watch it.
Speaker 7: Tube and Hit took, but not Quibi very much.
Speaker 11: But think about that. Jeffrey Katzenberg, who's the founder of it,
Speaker 11: is an actual Hollywood vision area, a huge string of
Speaker 11: tape measure home runs in that industry. He drafted a
Speaker 11: recruited Meg Whitman to be the CEO of Quibi. They
Speaker 11: raised coming on two billion dollars to execute Katzenberg's vision
Speaker 11: of short form entertainment. Now, they didn't do geeky things.
Speaker 11: They didn't listen to a lot of evidence, they weren't
Speaker 11: very open to changes in direction. They didn't build a
Speaker 11: beta of their product. They just realized this full vision
Speaker 11: and released it out there into the world, and it
Speaker 11: lasted as a live streaming platform less than two hundred
Speaker 11: days before they announced the shutdown of it. It was
Speaker 11: just this really old fashioned approach where you just kind
Speaker 11: of blindly follow the vision of the leader, come hell
Speaker 11: or high water. And I contrast that with Netflix, which
Speaker 11: is funded by this complete outsider to the entertainment industry
Speaker 11: and is now disrupting that industry even as we speak.
Speaker 7: Fascinating.
Speaker 3: Is there some thought in terms of AI, we're all like,
Speaker 3: agog it feels like over artificial intelligence.
Speaker 7: Yeah, my John Tucker's looking at me. Yeah, a guy,
Speaker 7: thank you. But how do you think about it? Especially?
Speaker 3: Is there a geek to follow when it comes to
Speaker 3: AI that you think is going to be on it.
Speaker 11: Well, I think first of all that this period that
Speaker 11: we're living through of unreal science fiction progress with AI
Speaker 11: and in particular this latest chapter of Generative AI. These
Speaker 11: are some of the most powerful tools we humans have
Speaker 11: ever invented to help us accomplish our goals. We're living
Speaker 11: through an astonishing period of innovation. Now what kinds of
Speaker 11: companies are going to be successful at harnessing that technology.
Speaker 11: I think they're geek companies. This technology is so new,
Speaker 11: it's deeply weird. The future is very uncertain. I think
Speaker 11: maybe the only way, but certainly the best way that
Speaker 11: you're going to get smart about it and learn how
Speaker 11: to use AI and generator AI is by following this
Speaker 11: geeky approach of taking a little risk, trying something, getting feedback, iterating,
Speaker 11: moving into the future. That way, I'll be astonished if
Speaker 11: AIAH helps the people still following the industrial era playbook
Speaker 11: come back against the geeks. I do not appredict.
Speaker 7: I'm so dyna ask you about metaverse, but we've run
Speaker 7: out of time. You're going to have to come back.
Speaker 7: This was fascinating.
Speaker 3: Andrew McAfee, Principal Research signs at MIT. His book is
Speaker 3: called The Geekway, The radical mindset that drives extraordinary, extraordinary results,
Speaker 3: extraordinary work, extraordinary too, really fascinating right in terms of
Speaker 3: how you look at things.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen.
Speaker 2: On Bloomberg dot com, the iHeartRadio app, and the Bloomberg
Speaker 2: Business or watch us live on YouTube.
Speaker 7: We've got a great interview before we head into the weekend.
Speaker 4: Yeah, I'm really excited about this one. I think when
Speaker 4: people think of the work that the CIA did, you know,
Speaker 4: in the second half of the twentieth century, they probably
Speaker 4: think of the movies that they've seen, you know, spycraft
Speaker 4: carried out during the Cold War. A lot of the
Speaker 4: main characters, perhaps all of them, were men. I mean,
Speaker 4: think about the network of the men at the top
Speaker 4: good point of the CIA, Alan Dolas, White, Vandenberg.
Speaker 7: Then at the top not women.
Speaker 4: Well, let's get to our next guest. Actually, because she
Speaker 4: discovered that there was another network at the CIA, one
Speaker 4: built by women.
Speaker 1: Here's what she wrote.
Speaker 6: Quote.
Speaker 4: These women, like the men, were manipulators and operatives by
Speaker 4: instinct and training. During the Cold War and into the
Speaker 4: modern era, women worked alone and together, laboring in secret,
Speaker 4: running operations against the adversary as well as striking. Often
Speaker 4: the organization they worked for love.
Speaker 3: This please to have with us, Liza Monday. She's the
Speaker 3: author of the new book The Sisterhood, the Secret History
Speaker 3: of Women at the CIA, as well four other books,
Speaker 3: including the New York Times bestseller Code Girls.
Speaker 7: She joins us on Zoom from Washington, DC. Eliza, so
Speaker 7: great to have you here with us.
Speaker 3: You know, women have been a part of the CIA
Speaker 3: since its inception in nineteen forty seven, just after World
Speaker 3: War Two. They've been around. It's funny, though, that we
Speaker 3: really haven't heard that much about it. Tell us how
Speaker 3: you got kind of turned onto this story.
Speaker 7: Yes, and thank you so much for having me.
Speaker 10: Women have been around in American intelligence and espionage, even
Speaker 10: since before nineteen forty seven, when.
Speaker 7: The CIA was created.
Speaker 10: My book, just as you said, my last book, Code Girls,
Speaker 10: about women who came to Washington during the war to
Speaker 10: work as codebreakers. There were more than ten thousand of
Speaker 10: those women. That's really what turned me on to this
Speaker 10: next book, because there was a parallel cohort of women
Speaker 10: who came to Washington and then faned all over the
Speaker 10: world during World War Two, the most famous of them
Speaker 10: as the future chef Julia Child, who built America. Because
Speaker 10: espionage agency during the war, it was called the Office
Speaker 10: of Strategic Services.
Speaker 7: After the war that that would morph into the CIA.
Speaker 10: So there were women building our intelligence capabilities during World
Speaker 10: War Two, which was very very important, women working in Europe,
Speaker 10: women working in China, women working back in Washington, d c.
Speaker 10: And then and then when the CIA was created, the
Speaker 10: architects of the institution knew that they needed women to.
Speaker 7: In some cases to run the vaults. They were called
Speaker 7: the vault women.
Speaker 10: People forget that when you're out, when spies are out
Speaker 10: collecting intelligence, all the intelligence has to get passed back
Speaker 10: to headquarters and it has to be kept track of.
Speaker 10: And now, of course the CIA has a remarkable database
Speaker 10: of intelligence information going back for decades. So that was
Speaker 10: that that was sort of where they thought they could
Speaker 10: keep the women channeled. But in fact, just as you
Speaker 10: all sort of teased there, there were also women who
Speaker 10: joined the clandestine Service who insisted that their gifts and
Speaker 10: talents lay in spycraft on the street, and who proved
Speaker 10: that women, far from being incapable of spycraft, which was
Speaker 10: essentially what was said about them, proved in many cases
Speaker 10: to be better or at least to do it differently,
Speaker 10: because if you're an inc if you're a woman in
Speaker 10: the nineteen sixties seventies, you're likely to be inconspicuous, underestimated
Speaker 10: as you move, as you move about the streets, and
Speaker 10: that turned out to be needless to say, a great
Speaker 10: advantage if you're a spy.
Speaker 4: What were the ways that women came into spying, like
Speaker 4: how did they get recruited or how did they join
Speaker 4: the CIA and then sort of rise through the ranks.
Speaker 10: Yes, that's a great question. So during the Cold War era, women,
Speaker 10: even college graduates, were often hired as clerks as GS four.
Speaker 10: So one of the one of the principal women in
Speaker 10: my book, Heidi August, was hired out of college as
Speaker 10: a clerk. She was handed the same pamphlet she had
Speaker 10: been given as a kid when she wrote the CIA
Speaker 10: at age eleven, So even at this point she was
Speaker 10: a political science major. They made her start as a
Speaker 10: clerk basically running stations overseas, and her logistical gifts were
Speaker 10: such that she learned really on the job.
Speaker 7: You know, she was in Cambodia, she was in Libya.
Speaker 10: She watched the uprising, the coup by more Marcadafi in Libya.
Speaker 10: She was the first American officer to see that. But
Speaker 10: it took her ten years to battle her way into
Speaker 10: the spy ranks at the CIA, to convince the old
Speaker 10: boys to let her flip from being a clerk and
Speaker 10: essentially doing the work for her bosses to being an
Speaker 10: operative and a spy herself. And I don't want to
Speaker 10: give away too many spoilers from the book, but her
Speaker 10: feminine techniques in some cases of realizing that women in
Speaker 10: foreign countries could be very effective assets, that women who
Speaker 10: were secretaries and clerks in offices overseas had access to
Speaker 10: as much information as she had had when she was
Speaker 10: a clerk. And so she looked at an asset is
Speaker 10: the person who is a foreign national who essentially commitssed
Speaker 10: treason by passing their country's information to the United States.
Speaker 10: She realized that women in offices had access to a
Speaker 10: lot of information, and she, let's just say, she proceeded
Speaker 10: accordingly with remarkable success.
Speaker 1: Yeah.
Speaker 3: What surprised you so much in doing this book in
Speaker 3: terms of as you found out and kind of unfolded
Speaker 3: all of these different stories.
Speaker 10: It surprised me how many stories there were. It surprised
Speaker 10: me how essential women had been to American spycraft during
Speaker 10: the Cold War, when obviously the contest was with the
Speaker 10: Soviet Union and nuclear war was at stake, and the
Speaker 10: resourceful mass of women working, you know, often in very lonely,
Speaker 10: lonely places where you have a lot of you know,
Speaker 10: sort of decision sole decision making power over your operations
Speaker 10: and the way you're going.
Speaker 7: To proceed the ingenious way.
Speaker 10: I will say also that one thing that surprised me
Speaker 10: was the was the importance that wives played during the
Speaker 10: Cold War. There's a chapter in the book called Housewife Cover.
Speaker 7: And many of the.
Speaker 10: Male spies who were sent overceives to places like Moscow,
Speaker 10: which were very difficult places to operate because CIA officers
Speaker 10: are suspected. CIA officers were being surveiled all the time
Speaker 10: by their KGB counterparts, and so a lot of the
Speaker 10: work of spycraft was simply shaking the surveillance, and wives
Speaker 10: were absolutely critical. Wives could pick up what's called a
Speaker 10: dead drop, a message that's left in some you know,
Speaker 10: under a park bench or somewhere. There was one CAAA wife,
Speaker 10: Shirley Sulik, who in Moscow would always carry a huge
Speaker 10: purse and she would let fall from her purse you know,
Speaker 10: lips or pen.
Speaker 7: And then she would sweep up the dead drop to
Speaker 7: help out her husband. So I assist for her husband, right, yeah, yeah,
Speaker 7: full partner. Really it was.
Speaker 10: And again you're incosbituous. They think you're just a housewived.
Speaker 10: I think you're an important well you're not being in.
Speaker 4: General, though, do spies know Do spies spouses know what
Speaker 4: their spouses are doing?
Speaker 6: In general?
Speaker 10: I know these women did, but yes, sure, yeah, a
Speaker 10: spouse would know that you're that your spouse is a
Speaker 10: CIA officer. You wouldn't know that, you wouldn't, necessarily in
Speaker 10: in sort of safer postings, the spouse wouldn't know where
Speaker 10: where their CIA officer husband or now wife, husband.
Speaker 7: Or wife was was going, you know, for days at
Speaker 7: a time sometimes.
Speaker 10: So that was one thing that surprised me and and
Speaker 10: the the book also talks about some very famous female
Speaker 10: led teams. The team of counterintelligence officers who pinpointed al
Speaker 10: Rich Aims Rick Ames as the mole who was giving
Speaker 10: away the identities of our Soviet assets. That was a
Speaker 10: predominantly female team of basically hunters back at headquarters who
Speaker 10: were determined to figure out who was causing the death
Speaker 10: of these Soviet agents, and again, like my character of
Speaker 10: Heidi August, they were able to spot something that their
Speaker 10: male colleagues had not spotted, which is namely the trader
Speaker 10: who was in their own ranks an old boy.
Speaker 3: Are there common traits that make a certain a woman
Speaker 3: good for intelligence work? Is there something you know about
Speaker 3: women in particular? Is it just that they're unassuming, that
Speaker 3: you know, kind of out in the world that people
Speaker 3: just don't think that they're going to be doing intelligence work.
Speaker 3: Is that what just makes them generally good? Or is
Speaker 3: there a trait that women are very specialized? I guess
Speaker 3: that that makes it even better.
Speaker 7: Yeah.
Speaker 10: So, so inconspicuousness is helpful when you're moving around the streets,
Speaker 10: but also arguably uh women's caretaking experience. People forget that
Speaker 10: that when a CIA officer recruits an asset, someone who
Speaker 10: will pass the secrets, this person is going to be
Speaker 10: doing it regularly over a long period of time, and
Speaker 10: they might have, you know, difficulties psychologically or in their
Speaker 10: personal life, and so they have to be what's called handled.
Speaker 10: You have to handle your asset for a period of
Speaker 10: a couple of years and watch out for their well being.
Speaker 7: And the women that I.
Speaker 10: Interviewed felt that they had certain feminine skills of empathy
Speaker 10: and instinct, the ability to tell if someone was in
Speaker 10: a good mental state or not. And so I think
Speaker 10: it is arguable that those kind of female traits, along
Speaker 10: with the ability to, as I said, to spot potential
Speaker 10: assets that that that your male colleagues might not have
Speaker 10: it might not have noticed. So I think both of
Speaker 10: those traits can be very helpful. And also learning how
Speaker 10: to play certain roles. Some of you know case officers
Speaker 10: CIA case officers are also often very young. They're often
Speaker 10: in their twenties. The case officers are there out recruiting
Speaker 10: and so to appear sort of young and harmless and like, hey,
Speaker 10: could you explain to me how that rocket system works? Like,
Speaker 10: you know, to invite, I mean, if I may to
Speaker 10: invite man's plaining is love it honored?
Speaker 7: The verb that they use is elicit. That's your goal
Speaker 7: is to elicit information.
Speaker 10: And so the women would definitely invite man's plaining as
Speaker 10: a way of eliciting information about all sorts of you know,
Speaker 10: rock weaponry, like the oldest.
Speaker 8: Trick in the l No.
Speaker 3: No, it's like the Barbie movie right where the Barbie
Speaker 3: movies like, how do you like, you know, kind of
Speaker 3: get the men off course, it's like, could you.
Speaker 7: Explain how the remote works? Like exactly, and it really
Speaker 7: does work? Does work?
Speaker 4: Hey, Liza, tell me about the reporting process here. You've
Speaker 4: spent years as a reporter. You've written four other books
Speaker 4: in addition to this one. Talked to about the reporting process,
Speaker 4: who you spoke to, who you weren't able to speak to,
Speaker 4: and how you got the information.
Speaker 10: Well. I interviewed a lot of women's spies from different generations,
Speaker 10: women who started as clerks or were recruited in the
Speaker 10: nineteen sixties, even in the nineteen fifties. So because one
Speaker 10: of the things I wanted to show was how the
Speaker 10: women over a course of generations did build a network,
Speaker 10: did build a sisterhood. The CIA is a very clubby place.
Speaker 10: It always has been. It runs on networks. It's an
Speaker 10: institution where there's a lot of you have to watch
Speaker 10: out for your colleagues. There's potentially undermining from your colleagues,
Speaker 10: and so it is important to have allies and to
Speaker 10: have a network of people who will watch your back.
Speaker 10: And it took women a long time to build that.
Speaker 10: So I interviewed women from all generations about their spy work.
Speaker 10: I also interviewed women who retired more recently who worked
Speaker 10: as analysts. So it's important to remember that during the
Speaker 10: nineteen eighties, so the Cold War is still going on
Speaker 10: and the anti Communist struggle is really sort of where
Speaker 10: you want to be in the top jobs. But there
Speaker 10: was a group of women who were who became early
Speaker 10: on interested in counter terrorism. The terrible plane hijackings of
Speaker 10: the nineteen eighties, the emergence of these terrorist groups. People
Speaker 10: may remember the locker be bombing, the bombing of PanAm.
Speaker 10: Women were very troubled by the deaths of civilians, by
Speaker 10: the willingness of terrorists to kill civilians, women, children, college students,
Speaker 10: and so there was a group of women who began
Speaker 10: looking at this before it was prestigious to do so
Speaker 10: at the agency, and who were in place, and who
Speaker 10: were calling attention to the threat posed by a little
Speaker 10: known terrorist group called al Qaeda, you know, as early
Speaker 10: as the nineteen nineties, and struggling to make their voices heard,
Speaker 10: and that was frustrating for them. And because of the
Speaker 10: techniques that they pioneered. It was the team much later,
Speaker 10: the team of targeters, this new job at the CIA
Speaker 10: that entailed man hunting, tracking down terras all over the world.
Speaker 7: It was a predominant least.
Speaker 10: It was a strikingly female team of targeters who pinpointed
Speaker 10: the location of Osama bin Laden that led to the
Speaker 10: successful raid on the compound. And I did interview women
Speaker 10: who participated in that hunt who are still at the
Speaker 10: CIA active office.
Speaker 4: That's a perfect segue of what I wanted to ask
Speaker 4: was how you navigated around stuff that's still classified versus
Speaker 4: stuff that's not classified. I mean, you spoke to people
Speaker 4: who are still at the CIA, so they couldn't tell
Speaker 4: you everything.
Speaker 7: They couldn't tell me everything.
Speaker 10: But I had an extensive interview in the presence of
Speaker 10: a public affairs office and officer, and they knew what
Speaker 10: they could tell me and what they couldn't. And you know,
Speaker 10: and that's twenty that's getting to be not old news
Speaker 10: because I don't think the CIA considers anything old news.
Speaker 10: And certainly some of the officers are involved today, you know,
Speaker 10: in the counter terrorism effort. But they could they could
Speaker 10: reveal about that operation. I mean, there have been books
Speaker 10: written about that operation in the compound, so they could
Speaker 10: certainly talk about the role that the targeters played in
Speaker 10: that operation.
Speaker 3: Hey, Liza, just have about a minute left. How dangerous
Speaker 3: were some of these women, you know, the situations that
Speaker 3: they were, they found themselves in.
Speaker 10: Very dangerous and they were working in you know, the
Speaker 10: counter terrorism effort is a very dangerous one.
Speaker 7: These are jobs in lonely outposts.
Speaker 10: One of the young women case officers I interviewed who
Speaker 10: worked in Africa, she was one of her assignments was
Speaker 10: to help bring home the Nigerian school schoolgirls who were
Speaker 10: captured by the terrorist group Boko Haram. So it was
Speaker 10: the humanitarian mission. And when she was stationed at a
Speaker 10: lonely outpost, you know, she had a glock and she
Speaker 10: was given fifty rounds of ammunition and they told her,
Speaker 10: you know, forty nine or for the enemy, and then
Speaker 10: the last one would be for you.
Speaker 1: And so it was.
Speaker 10: It was she it was extraordinarily difficult work and lowly
Speaker 10: and she describes it as being the most important work
Speaker 10: that she's ever done in her career.
Speaker 3: What an amazing book, What an amazing you know, just
Speaker 3: the stuff that goes on that we're just not aware of,
Speaker 3: just really really fat fascinating.
Speaker 4: Eliza Quickly next book what's it going to be?
Speaker 7: Where do you go?
Speaker 10: I've got some I've got some envelops at home that
Speaker 10: are the results of some Freedom of Information Act requests
Speaker 10: that I placed two years ago before the pandemic.
Speaker 7: So I just want to open them and see what's
Speaker 7: in them. Love it, Love it.
Speaker 3: As we said, come back when it's out in paperback.
Speaker 3: We'd love to continue this conversation with you. Eliza Mundy,
Speaker 3: her new book, The Sisterhood, The Secret History of Women
Speaker 3: at the CIA, joining us on Zoom from Washington, d C.
Speaker 7: The whole Contrull Control Room, which was just like on
Speaker 7: that last response that the last answer.
Speaker 8: Was like what yeah, really cool stuff.
Speaker 7: All right, this is Bloomberg Radio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 4: Our next guest is actually working to change that and
Speaker 4: make financial services more accessible to recent immigrants, in addition
Speaker 4: to minority owned businesses and individuals. Kate Howe spent more
Speaker 4: than a dozen years on Wall Street before she left
Speaker 4: us start Happy Mango, a company that's doings that. Kate,
Speaker 4: who's also CEO of Happy Mango, joins us here in
Speaker 4: the Bloomberg Interactive Brokers studio.
Speaker 7: Kate, how are you very good?
Speaker 17: Thank you for having me.
Speaker 4: I want to get to your journey to start Happy
Speaker 4: Mango in a few minutes, but first I want to
Speaker 4: just get an update from you on what you're seeing
Speaker 4: out there, if you're actually starting to see improvement here,
Speaker 4: and tell us a little bit about what Happy Mango does.
Speaker 17: Sure, so, Happy Mango is a technology company. We provide
Speaker 17: technology to financial institutions that include banks and not for
Speaker 17: profit financial organizations, and many of them are considered CDFIs,
Speaker 17: which stands for Community development financial Institutions.
Speaker 4: So is it a B to B or are consumers
Speaker 4: actually interacting with Happy Mango?
Speaker 17: Yes to both questions. Okay, So it's a B to
Speaker 17: B to see kind of technology platform where we serve
Speaker 17: and provide technology to the financial institutions which use Happy
Speaker 17: Mangal's online platform to make affordable credit accessible to individuals
Speaker 17: who struggle to get access to credit.
Speaker 3: So to Tim's question, what are you seeing that among
Speaker 3: those consumers are they strapped are in terms of their
Speaker 3: financial situation? Just helps us give an idea maybe with
Speaker 3: this sector is seeing in terms of the economic outlook
Speaker 3: and market outlook.
Speaker 17: So actually, well, I you know the market out look,
Speaker 17: there's a lot of bad news out there right now,
Speaker 17: but what we're seeing on our platform is actually kind
Speaker 17: of encouraging. So when we first started Happy Mangal in
Speaker 17: around two thousand sixteen, our target consumer borrowers were the
Speaker 17: low to moderate income markets, people who have no credit
Speaker 17: or have very low credit, who are struggling to get
Speaker 17: a personal loan or credit card. So we provide technology
Speaker 17: to help these community based financial institutions to extend affordable
Speaker 17: credit to this segment of the market. But over time,
Speaker 17: especially starting after the pandemic, we are seeing more consumers
Speaker 17: from immigrants, which is how we started this segment. Right
Speaker 17: right now, almost forty percent of our borrowers were not
Speaker 17: from originally from the United States. These are recent immigrants
Speaker 17: from displaced area being displaced from their home places, from Afghanistan,
Speaker 17: from certain countries in Africa, from South America as well,
Speaker 17: and we're seeing a lot of immigrants starting to use
Speaker 17: happy Mango with the help of our clients who help
Speaker 17: not get access to credit, and they are using these
Speaker 17: low OANs to get a home, to build a business,
Speaker 17: to buy their first car, to help them settle in
Speaker 17: their new home.
Speaker 7: So financial identity of sorts right.
Speaker 17: Yes, exactly, how do you?
Speaker 7: How do you help them though?
Speaker 3: Help me understand make the jump for me in terms
Speaker 3: of what your platform does that makes a bank or
Speaker 3: a credit union feel comfortable to lend to people who
Speaker 3: don't really have a financials If you will.
Speaker 17: That's a great question. So when we first started, our
Speaker 17: first client was a bank that was based in the
Speaker 17: Bronx Spring Bank. You might have heard of them. It's
Speaker 17: a very small community bank. But what they're trying, what
Speaker 17: they saw in their community is that a lot of
Speaker 17: their depositors, a lot of their customers are struggling to
Speaker 17: get access to credit. They have to go to payday
Speaker 17: lenders or rent to own right they pay three hundred
Speaker 17: four hundred percent APR. These are the non bank financially
Speaker 17: non bank exactly pay day lenders and then they oftentimes
Speaker 17: these bars will have.
Speaker 7: To say, OK, crks, Oh wait, can I say that?
Speaker 11: Come on?
Speaker 7: The rates are crazy, but anyway, please continue.
Speaker 17: So in lead or technical terms out maybe correct in both.
Speaker 17: But so our client Spring Bank, saw there is a need.
Speaker 17: They want to change that. They want to get their
Speaker 17: customers out of these dead traps, and they want to
Speaker 17: start a loan program for their customers, a small dollar
Speaker 17: affordable consumer loom. But when they were trying to do that,
Speaker 17: the conventional underwriting software that's available, they could not lend
Speaker 17: to anyone because everyone pretty much get turned off, turned
Speaker 17: down because the way the software is cross it's all
Speaker 17: based on credit score.
Speaker 3: This is something we talked about like home ownership. A
Speaker 3: lot of individuals don't have homes, but they rent and
Speaker 3: they consistently pay their rent. Better metric for folks who
Speaker 3: are on bank or underbanked.
Speaker 7: That's true, that's true.
Speaker 17: There are so many There should be so many ways
Speaker 17: to measure someone's credit worthiness, right, but conventional way is
Speaker 17: just a credit score. So that didn't really have help
Speaker 17: Spring Bank.
Speaker 7: That's how it first started.
Speaker 17: We helped h them to develop a way to measure
Speaker 17: someone's ability to pay, not just looking at their credit score.
Speaker 4: How does your business work? How do you make make money?
Speaker 17: So we our clients are the banks and credit unions
Speaker 17: or so our clients would pay us for a subscription fee,
Speaker 17: and then then the user is completely free for their
Speaker 17: customers to use Happy Mangle.
Speaker 3: When when somebody is on the platform or once a
Speaker 3: bank using your particular platform and or credit union and
Speaker 3: then give someone a loan or what have you, what's
Speaker 3: the I guess default rate or I'm trying to figure
Speaker 3: what's the metric? Is there a metric that you guys
Speaker 3: can say, we do we measure default rate default rate?
Speaker 3: What will be your guest fault rate for someone who
Speaker 3: doesn't have a.
Speaker 7: Credit score.
Speaker 4: Less than less than for somebody who uses these traditional
Speaker 4: banking services quote unquote, and.
Speaker 7: What would that them or be goshi.
Speaker 17: It's less than five percent. It's like these individuals who
Speaker 17: don't have credit scores, they work really hard to build
Speaker 17: up their credit.
Speaker 4: Is it less than their bank counterparts or perhaps people
Speaker 4: who do have a credit history.
Speaker 17: Yeah, I think if we use credit card default grade
Speaker 17: as a proxy, the credit card you fault grade right
Speaker 17: now is higher than five percent. So it's really about
Speaker 17: the customers you work with and the relationship you're building
Speaker 17: in this process. And if I were lender, Happy Manga
Speaker 17: is not a lender. We provide technology for lenders, but
Speaker 17: if I were a lender, I would lend to the
Speaker 17: kind of customers we lend.
Speaker 7: How all day long? All right, we get twenty five seconds.
Speaker 7: Why is it Happy Mango?
Speaker 10: Oh?
Speaker 7: Real quickly?
Speaker 17: Okay, so Happy Mango it's really the nickname of me
Speaker 17: and my husband.
Speaker 7: And guess who is happy and who's mango?
Speaker 8: Lootes?
Speaker 4: Sound good?
Speaker 9: I love it?
Speaker 7: Yeah, that's good. We need to be a good story there.
Speaker 3: We had to ask Kate really interesting, come back and
Speaker 3: let us know how things are going well?
Speaker 7: Do thank you Kate?
Speaker 3: How she's found her and chief executive officer of Happy Mango,
Speaker 3: which we now know the origin of her company. Here
Speaker 3: in studio, you're listening and watching Bloomberg BusinessWeek, and this
Speaker 3: is Bloomberg.
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