WEBVTT - Bloomberg Businessweek Weekend – September 22nd, 2023 0:00:01.360 --> 0:00:05.720 This is Bloomberg business Week Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.440 --> 0:00:23.239 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:23.440 --> 0:00:26.479 Guess another FED meeting that went as expected with the 0:00:26.480 --> 0:00:29.320 Central Bank holding firm for now in terms of interest rates, 0:00:29.360 --> 0:00:32.800 but they did tim ratchet down expectations for rate cuts. 0:00:33.120 --> 0:00:36.280 We also had the UN General Assembly in session, coinciding 0:00:36.320 --> 0:00:39.000 with New York City's annual Climate Week summit, and that 0:00:39.120 --> 0:00:42.080 gave us a really great chance to tap into some 0:00:42.280 --> 0:00:46.720 unique leaders on sustainability, including Energy Impact Partners founder Hans 0:00:46.800 --> 0:00:51.120 Koebler and Cisco's Chief People, Policy and Purpose Officer Franksutis. 0:00:51.200 --> 0:00:52.880 We'll hear more from both this hour. 0:00:53.120 --> 0:00:55.560 We mentioned Anga in session this week. That's the UN 0:00:55.640 --> 0:00:59.240 General Assembly. A notable absence was Chinese President Shijin Ping. 0:00:59.520 --> 0:01:02.240 China continues to dominate the headlines in twenty twenty three, 0:01:02.280 --> 0:01:05.800 with concerns about its economy, its outsized contribution to global emissions, 0:01:06.080 --> 0:01:08.160 and those lingering tensions with the us. 0:01:08.319 --> 0:01:11.480 First up on our program legendary short seller and longtime 0:01:11.560 --> 0:01:15.279 China bear Jim Chenos. He is someone who raised concerns 0:01:15.280 --> 0:01:18.280 about China's ghost cities years ago. We were always talking 0:01:18.319 --> 0:01:20.600 to him about it, and even as the country's central 0:01:20.640 --> 0:01:23.520 bank says it has sufficient policy space to support an 0:01:23.520 --> 0:01:27.039 economic recovery, Cheno's remains a bit skeptical. 0:01:27.080 --> 0:01:30.160 Bloomberg, Simone Foxman and I welcome Chenos to our studios 0:01:30.200 --> 0:01:32.280 a bit earlier this month, and we began with his 0:01:32.360 --> 0:01:35.080 apprehension over the world's second largest economy. 0:01:35.160 --> 0:01:37.759 Please to bring in our next guest, Jim Chanos. He's 0:01:37.800 --> 0:01:40.080 the founder of Chenos and Company. Thanks so much for 0:01:40.160 --> 0:01:44.240 joining us. He's in studio or Intero Interactive Broker's studio. 0:01:44.640 --> 0:01:48.960 He says China's on a treadmill to hell and shared 0:01:48.960 --> 0:01:51.800 those concerns with the House of Representative Select Committee on 0:01:52.080 --> 0:01:55.760 the Chinese Communist Party this week. Talk to me about 0:01:55.880 --> 0:01:58.120 the hearing, you know, were you able to kind of 0:01:58.160 --> 0:02:00.480 get a sense of whether or not and I know 0:02:00.520 --> 0:02:02.480 you weren't there physically in person, but you did. 0:02:02.360 --> 0:02:03.800 Offer your insight. 0:02:03.840 --> 0:02:06.880 Were you able to get it a sense on what 0:02:06.920 --> 0:02:08.960 the committee's doing? Are they going to be successful. Are 0:02:09.000 --> 0:02:09.760 they going to do anything? 0:02:09.840 --> 0:02:11.359 In fact that's. 0:02:11.240 --> 0:02:14.200 Above my pay grade? And thanks for having me as 0:02:14.720 --> 0:02:18.959 to the politics in Washington, And I do think that 0:02:19.320 --> 0:02:23.960 the Committee is doing good work in calling attention to 0:02:24.000 --> 0:02:27.919 these issues. And you know, we've been we've been pretty 0:02:27.960 --> 0:02:31.520 negative on China now for a better part of thirteen years. 0:02:32.120 --> 0:02:36.000 And I think that the risks that China poses have 0:02:36.400 --> 0:02:42.400 morphed from purely financial to now beyond that into the 0:02:42.440 --> 0:02:45.760 political realm and the national security realm, and I think 0:02:45.800 --> 0:02:51.400 that makes this a bigger story. And the economic model 0:02:51.560 --> 0:02:55.480 risks as to how China sort of deals with those 0:02:56.000 --> 0:02:57.799 may in fact affect the politics. 0:02:58.520 --> 0:03:02.840 Yeah, does the contagens spread beyond what I think most 0:03:02.840 --> 0:03:04.440 people are expecting at this point. 0:03:04.960 --> 0:03:08.840 The good news is is that the risks to the 0:03:08.880 --> 0:03:12.360 real estate market and the economic model do not have 0:03:12.440 --> 0:03:16.160 a lot of direct contagent risks to Western banks and 0:03:16.200 --> 0:03:21.079 particularly American banks. Where the risks are are in our 0:03:21.120 --> 0:03:27.320 equity and debt investments that various funds hold, pension funds hold, 0:03:28.000 --> 0:03:33.680 retail investors hold, and I think that's the bigger issue 0:03:33.720 --> 0:03:37.120 as opposed to a two thousand and eight type transmission 0:03:37.480 --> 0:03:41.000 from their real estate bubble. Bursting to everyone's real estate 0:03:41.040 --> 0:03:44.800 bubble bursting. They can keep that internal, but it's a 0:03:44.840 --> 0:03:45.560 big problem. 0:03:46.040 --> 0:03:49.160 What are the threats beyond an economic collapse or a 0:03:49.200 --> 0:03:53.920 property collapse in China, I'm talking geopolitical threats, national security threats. 0:03:54.200 --> 0:03:55.760 What's the stuff that keeps you up at night? 0:03:56.120 --> 0:04:00.200 Well, the morphing from spending on the additional high speed 0:04:00.280 --> 0:04:03.160 rail link that's unprofitable, or the next apartment building and 0:04:03.200 --> 0:04:06.440 putting up and basically building another aircraft carrier. You know, 0:04:06.520 --> 0:04:11.840 the classic nineteen thirty scenario where a number of countries 0:04:11.960 --> 0:04:15.160 you know, ramped up their defense spending as a way 0:04:15.200 --> 0:04:18.359 to stimulate and we know how that ended. And so 0:04:18.600 --> 0:04:21.279 I think that that we saw reports even today. I 0:04:21.320 --> 0:04:24.960 mentioned it earlier that Chinese defense spending may be a 0:04:24.960 --> 0:04:28.000 lot greater than we think, you know, as high as 0:04:28.040 --> 0:04:31.440 four percent of GDP. The US is three percent of GDP. 0:04:32.680 --> 0:04:36.320 So they are spending more money. It used to be 0:04:36.400 --> 0:04:42.960 directed internally with internal security systems and that, but increasingly 0:04:43.040 --> 0:04:46.520 now it's hard to miss that it's also external with 0:04:46.640 --> 0:04:51.880 the Blue Water Navy and increased tensions around Taiwan. 0:04:51.920 --> 0:04:53.440 Well, let's talk about that. I mean, how much of 0:04:53.720 --> 0:04:57.000 a concern do you think that is right now, an 0:04:57.000 --> 0:04:58.080 invasion of Taiwan. 0:04:59.080 --> 0:05:03.160 Well, as I said earlier, I think the real risk 0:05:03.279 --> 0:05:07.200 is something something happens, right, an incident, that's that's unexpected, right. 0:05:07.440 --> 0:05:11.000 You have now ships transversing, crossing each other's bios, you 0:05:11.040 --> 0:05:14.120 have a lot of aircraft in the area, and all 0:05:14.200 --> 0:05:16.440 we need is someone you know, a pilot to make 0:05:16.480 --> 0:05:20.800 a mistake or get scared, or you know, a mishap 0:05:20.839 --> 0:05:22.760 of someone, and then you have an you have an 0:05:22.760 --> 0:05:28.280 international incident, and and that's I think as the temperature 0:05:28.320 --> 0:05:31.039 kind of rises in the in South China Sea, I 0:05:31.040 --> 0:05:35.120 think that's the real risk as opposed to a premeditated 0:05:35.640 --> 0:05:38.479 you know, attack on a Western country or Western ally. 0:05:39.080 --> 0:05:42.440 So you want to short China potentially, We've been short. 0:05:42.560 --> 0:05:46.839 We've been short China for for years. You know, paradoxically, 0:05:46.880 --> 0:05:50.000 we're less short China now than we were ten twelve 0:05:50.040 --> 0:05:53.760 years ago because China has gone nowhere. I mean, the 0:05:53.800 --> 0:05:57.960 stock market has basically been flat for twelve years, and 0:05:58.120 --> 0:06:00.600 as every other stock market is. 0:06:00.839 --> 0:06:01.960 Tripled or quadrupled. 0:06:02.520 --> 0:06:05.880 So it's been a very poor place for Western investors 0:06:05.880 --> 0:06:08.680 to part their money for years, not just the last 0:06:08.720 --> 0:06:11.920 twelve years, but really for the last twenty years, and 0:06:12.360 --> 0:06:14.599 I think that's going to continue to be the case. 0:06:14.680 --> 0:06:19.359 Broadly speaking, China does not treat Western capital very well. 0:06:19.920 --> 0:06:21.600 How are you betting against China right now? 0:06:22.320 --> 0:06:25.400 We have some direct shorts in the financial area, We 0:06:25.440 --> 0:06:30.440 have some indirect shorts that depend on China for a 0:06:30.480 --> 0:06:34.040 fair amount of their revenues. But as I said, our 0:06:34.080 --> 0:06:37.920 direct shorts are probably no more than four or five 0:06:38.320 --> 0:06:42.520 six percent of our portfolio. In twenty ten eleven it 0:06:42.560 --> 0:06:43.520 was above twenty percent. 0:06:43.920 --> 0:06:45.440 We've spent a lot of time over the past few 0:06:45.480 --> 0:06:48.440 months talking about the struggles of the Chinese economy and 0:06:48.560 --> 0:06:51.480 the data that we get, or the lack thereof of 0:06:51.600 --> 0:06:53.919 data that we get. Jim, what evidence do you have 0:06:54.000 --> 0:06:56.960 that the Chinese economy is actually worse than what Beijing 0:06:57.080 --> 0:06:58.880 says or what markets already believe. 0:06:59.080 --> 0:07:01.760 The funny thing is is that if you have an 0:07:01.800 --> 0:07:06.080 investment driven economic model, which they do, the GDP is 0:07:06.160 --> 0:07:10.760 actually accurate. I noticed something over the weekend that Michael 0:07:10.920 --> 0:07:15.320 Pettis pointed out that in an investment driven model GDP, 0:07:15.760 --> 0:07:19.600 growth is actually an input, it's not the residual, which 0:07:19.600 --> 0:07:22.880 I think is a really interesting observation. That is I've 0:07:22.920 --> 0:07:26.480 always joked that China's the only major developed economy that 0:07:26.600 --> 0:07:30.320 knows its annual GDP on January one of that year. Yeah, 0:07:30.960 --> 0:07:33.440 and so you know, whatever the numbers needs to be, 0:07:34.200 --> 0:07:37.080 they will put enough stimulus in terms of new investment 0:07:37.120 --> 0:07:41.679 to hit that number, give or take. So I don't 0:07:41.760 --> 0:07:45.440 quibble with the quality with the actual numbers they're putting out, 0:07:45.800 --> 0:07:48.040 but it's the quality of the numbers, if you will, 0:07:48.080 --> 0:07:52.680 that if you never write off bad investments, the actual 0:07:52.800 --> 0:07:55.720 costs to GDP are sitting in your banking system in 0:07:55.800 --> 0:07:58.280 terms of bad deaths, and you have to either inflate 0:07:58.320 --> 0:08:01.840 that away or recapitalize your banking system. And so that's 0:08:01.920 --> 0:08:07.120 the nexus of this economic model with economic growth, and 0:08:07.920 --> 0:08:11.320 it's a banking issue ultimately. And so I think that 0:08:11.320 --> 0:08:15.040 that that's where I worry that as long as the 0:08:15.040 --> 0:08:18.240 bank's never write off the bad debts, that's where the quality, 0:08:18.760 --> 0:08:20.920 if you will, of disclosure is poor. 0:08:21.200 --> 0:08:24.080 The rm IPO your thoughts on the valuation. 0:08:24.880 --> 0:08:27.640 It seems a bit high, are you? 0:08:27.720 --> 0:08:29.280 Are you not convinced by the Aihi? 0:08:30.560 --> 0:08:33.000 I think it's what one hundred and twenty times earnings 0:08:33.000 --> 0:08:37.000 and fifth, I think revenues are two and a half 0:08:37.000 --> 0:08:39.160 billion and went out at a sixty billion. 0:08:38.920 --> 0:08:41.400 Dollar evaluation, and twenty five percent of its revenues come 0:08:41.400 --> 0:08:41.840 from China. 0:08:42.040 --> 0:08:45.280 Yeah, so so twenty five twenty almost twenty five times 0:08:45.280 --> 0:08:47.800 revenue seems a little steep. But what do I know? 0:08:48.080 --> 0:08:48.880 Are you going to shorten it? 0:08:49.480 --> 0:08:54.400 Well, you can't yet, so it's a limited float, but 0:08:54.520 --> 0:08:58.120 I'm sure at some point we'll we'll crack open the perspectus. 0:08:58.240 --> 0:09:01.839 Have you been thinking about shorting in Nvidia? No, no, no, 0:09:01.960 --> 0:09:02.880 don't get in the way of that. 0:09:03.200 --> 0:09:05.280 We have we have things that are that are perceived 0:09:05.320 --> 0:09:07.760 as AI plays, that are that are trading much more 0:09:07.800 --> 0:09:11.880 expensive than in video does so it's so no need 0:09:11.920 --> 0:09:12.800 to go after the OG. 0:09:13.600 --> 0:09:17.000 What kind of opportunities has this opened up? As someone 0:09:17.040 --> 0:09:20.439 who looks at the market with a very critical eye. 0:09:20.400 --> 0:09:23.040 Well, I think anytime we see one of these these 0:09:23.080 --> 0:09:26.400 tectonic shifts in new technology, like the Internet in the nineties, 0:09:27.000 --> 0:09:31.240 people at first embrace everything, everything is going to benefit. 0:09:32.240 --> 0:09:35.000 But what you find out, of course, is that when 0:09:35.040 --> 0:09:40.439 it's truly truly a major shift, is that those technologies 0:09:41.280 --> 0:09:44.600 end up harming as many businesses as they create. And 0:09:44.640 --> 0:09:47.440 so if you think about the companies that were in 0:09:47.480 --> 0:09:52.480 the business of distributing analog physical products that became digitized. 0:09:53.440 --> 0:09:57.520 They went away, Blockbuster Video, Eastern Kodak, I mean, companies 0:09:57.559 --> 0:09:58.679 like that, record stores. 0:09:58.840 --> 0:10:00.080 I mean, and I. 0:10:00.600 --> 0:10:04.240 Suspect that if AI is as big as most people 0:10:04.280 --> 0:10:07.679 think it will be, you will see lots of businesses 0:10:07.760 --> 0:10:10.679 that had moats find out that the motes have been breached. 0:10:11.240 --> 0:10:14.880 So your software as a service, What prevents a corporation 0:10:15.120 --> 0:10:20.440 from having AI design its own software for various different applications, right, 0:10:20.480 --> 0:10:25.120 and and there's lots of things that suddenly you don't 0:10:25.160 --> 0:10:29.319 think about. I kind of joked a little bit a 0:10:29.360 --> 0:10:32.640 few months ago when IBM CEO came out and said 0:10:32.679 --> 0:10:36.199 that that AI might may make some of the IBM 0:10:36.280 --> 0:10:39.559 workforce redundant, and I joked, well, what happens when the 0:10:39.600 --> 0:10:41.680 clients find that same thing out? 0:10:42.120 --> 0:10:45.200 Yeah, I mean, that's that's a really good point. I 0:10:45.200 --> 0:10:46.920 want to shift gears a little bit and talk about 0:10:47.000 --> 0:10:50.160 your strategy around shorting and what you're seeing in the 0:10:50.160 --> 0:10:52.720 market today. I think a lot of people, of course, 0:10:53.400 --> 0:10:57.680 understand your history with being a fraud hunter and going 0:10:57.679 --> 0:11:01.199 after companies like Enron in the past. Wondering if over 0:11:01.200 --> 0:11:05.400 the last few decades with regulatory changes, you've seen fraud 0:11:05.480 --> 0:11:09.400 reduced or are there increased instances of potential fraud out there? 0:11:09.720 --> 0:11:11.720 I've called this the golden Age of fraud. I think 0:11:11.720 --> 0:11:14.440 there's more fraud in the financial markets now than there 0:11:14.640 --> 0:11:18.240 has ever been. Why And I teach a course in 0:11:18.280 --> 0:11:22.040 the history of financial market fraud, So the cycles go 0:11:22.160 --> 0:11:24.520 back to the late seventeenth century. 0:11:25.280 --> 0:11:25.720 I think that. 0:11:27.679 --> 0:11:28.760 It always changes. 0:11:28.960 --> 0:11:32.520 But what really has me bothered now is that a 0:11:32.559 --> 0:11:35.040 lot of it hides in plain sight in the way 0:11:35.160 --> 0:11:40.720 in which companies report their business and their metrics. So 0:11:41.480 --> 0:11:46.559 prior to say, ten years ago, you really had to 0:11:46.920 --> 0:11:49.960 sort of if a company was making unusual changes to 0:11:50.000 --> 0:11:53.040 its earning statements, you know, they would have to explain 0:11:53.120 --> 0:11:57.400 it away. And nowadays, adjusted earnings are basically the norm, 0:11:57.880 --> 0:12:00.120 and companies add back all kinds of things that they 0:12:00.200 --> 0:12:04.960 don't don't really a little expense. Oh it's amazing. Coinbase 0:12:05.280 --> 0:12:07.839 in the fourth quarter of last year, I think share 0:12:07.840 --> 0:12:10.600 based comp was almost eighty percent of revenues, and they 0:12:10.679 --> 0:12:11.320 just added it. 0:12:11.240 --> 0:12:13.600 Back, I mean, and so yeah, we go back to 0:12:13.640 --> 0:12:15.679 the we work. Why we work didn't go public the 0:12:15.720 --> 0:12:18.960 first time community adjusted ebit, Yeah, that was at this 0:12:19.000 --> 0:12:21.000 point it's a joke. But then it wasn't a joke. 0:12:21.080 --> 0:12:23.679 I know, and investors lost a lot of money. And 0:12:23.840 --> 0:12:26.920 the sec you know, promised kind of a crackdown on 0:12:26.960 --> 0:12:30.200 this a number of years ago. They admonished companies as 0:12:30.240 --> 0:12:34.440 are called to not lead with these kinds of results. 0:12:35.000 --> 0:12:37.520 But I mean, you know, for god's sakes, General Electric 0:12:37.600 --> 0:12:40.680 in the first quarter had sixteen pages of adjustments and 0:12:40.760 --> 0:12:44.319 its earnings release. I mean it's really you know, and 0:12:44.400 --> 0:12:48.120 companies that just take restructuring charges annually. Every year they 0:12:48.160 --> 0:12:51.040 take a restructuring charge. Well, if you take it every year, 0:12:51.160 --> 0:12:55.000 it's it's recurring. And I think that that in Silicon 0:12:55.080 --> 0:12:58.080 Valley is in particular, you know, pretty bad at this 0:12:58.640 --> 0:13:01.520 where companies that lose hundred millions of dollars every quarter 0:13:01.920 --> 0:13:06.280 are reporting you know, break even adjusted profits and so 0:13:06.320 --> 0:13:09.400 you just wonder if they're really businesses or are they 0:13:09.760 --> 0:13:11.160 executive enrichment. 0:13:10.800 --> 0:13:15.640 Schemes question mark for you, you know, Although this is 0:13:15.640 --> 0:13:18.080 the gold nag of fraud, activist activity is dropped by 0:13:18.120 --> 0:13:21.280 eighty five percent since it hit a peak in twenty fifteen. 0:13:21.280 --> 0:13:25.720 These are numbers from Direct Market Intelligence. Yeah, answered the 0:13:25.840 --> 0:13:28.120 question I posed just before the break I mean is 0:13:28.160 --> 0:13:30.280 the error of the short seller behind us. 0:13:32.080 --> 0:13:36.360 I think everybody asks that during every bull market, you know, 0:13:36.480 --> 0:13:38.760 nineteen ninety nine and early two thousand and it was 0:13:38.800 --> 0:13:41.439 the same sort of question, you know, will short selling 0:13:41.480 --> 0:13:43.560 ever work? And it's sort of the corollary, does value 0:13:43.600 --> 0:13:46.520 investing ever work? Again? You know, when people pay higher 0:13:46.520 --> 0:13:50.440 and higher prices for questionable corporate assets, and the question 0:13:50.559 --> 0:13:55.600 is is yeah, generally, yeah, it comes back and businesses 0:13:55.840 --> 0:13:59.920 generally find their true value over time. I mean, just 0:14:00.000 --> 0:14:02.520 look at the Meme stock you know, run up and 0:14:03.200 --> 0:14:08.280 now disaster from twenty twenty one to today, and there 0:14:08.320 --> 0:14:09.880 was no price too high to pay for some of 0:14:09.920 --> 0:14:13.599 these stocks because they had a short position, and ultimately 0:14:13.679 --> 0:14:16.360 most of them have come crashing down to earth. 0:14:16.559 --> 0:14:19.000 Well we'll get back to that specific one in a second, 0:14:19.040 --> 0:14:22.160 but first I want to ask about the I guess 0:14:22.320 --> 0:14:25.040 rising short seller in the market right now, Nate Anderson 0:14:25.080 --> 0:14:29.240 and Hindenburg. He's been big bets against a Donnie or 0:14:29.320 --> 0:14:33.040 rather he's said very public negative things about a Donnie 0:14:33.240 --> 0:14:36.920 Icon enterprises. You know, do you see eye to eye 0:14:36.920 --> 0:14:38.400 with some of the calls that he's made. 0:14:38.840 --> 0:14:42.600 Look, I think Nate and Hindenberg have done great work 0:14:42.640 --> 0:14:47.600 on a number of names, Nicola and others, and you'd 0:14:47.600 --> 0:14:49.560 be wise to at least hear what they have to say, 0:14:49.640 --> 0:14:52.400 even if you don't agree with it, if it's well 0:14:52.440 --> 0:14:57.960 researched and like anything, you know, stock prices are are 0:14:58.120 --> 0:15:01.560 opinions based on facts, and so at the end of 0:15:01.640 --> 0:15:05.400 the day, it's essential for a marketplace, whether they're positive facts. 0:15:05.240 --> 0:15:06.040 Or negative facts. 0:15:06.320 --> 0:15:08.480 And if you're a good investor, you know it behooves 0:15:08.520 --> 0:15:11.560 you to to basically hear both sides of any story. 0:15:12.200 --> 0:15:14.040 We'd be remiss if I didn't ask for an update 0:15:14.040 --> 0:15:16.080 from you on Tesla shares up one hundred and twenty 0:15:16.080 --> 0:15:17.040 four percent this year. 0:15:17.880 --> 0:15:22.520 Yeah, we are short Tesla. We remained short. It's one 0:15:22.560 --> 0:15:26.320 of our one of our forty four positions that we 0:15:26.440 --> 0:15:33.560 have look Tesla is in many ways, I think epitomizes 0:15:33.600 --> 0:15:37.040 this bull market. It's a hopes and dream stock. It's 0:15:37.080 --> 0:15:41.840 trading at seventy five times earnings, which aren't growing anymore. 0:15:43.720 --> 0:15:45.840 It looks like revenues are going to be challenged in 0:15:45.920 --> 0:15:49.840 terms of growth. So it's now again an AI story 0:15:49.920 --> 0:15:53.640 or Robotaxi story, or a battery story, or a robotics story. 0:15:54.080 --> 0:15:56.840 It's it's whatever you want it to be, and it 0:15:56.880 --> 0:15:59.280 reminds me a lot of Cisco back in nineteen ninety 0:15:59.360 --> 0:16:02.720 nine and two thousand, where Cisco was a networking company. 0:16:03.360 --> 0:16:06.200 Tesla is a car company, but Cisco was going to 0:16:06.200 --> 0:16:09.240 get into everything else that had anything to do with 0:16:09.280 --> 0:16:12.320 the Internet, and people put a higher and hire multiple 0:16:12.600 --> 0:16:16.960 on it, and ultimately Cisco did okay, but the stock 0:16:17.040 --> 0:16:19.080 price dropped ninety percent. 0:16:19.920 --> 0:16:21.560 I'm going to do a quick lightning round of some 0:16:21.600 --> 0:16:25.200 stuff that has been reported that you are are have 0:16:25.280 --> 0:16:28.280 been short recently. Just have me yes or nos. If 0:16:28.280 --> 0:16:32.760 you're still short digital realty Trust, we are short the 0:16:32.840 --> 0:16:35.440 data centers sl Green real. 0:16:35.280 --> 0:16:38.800 Too, sl Green is. We are short commercial real estate. 0:16:38.840 --> 0:16:43.120 Okay, Tesla, you said Sun Run, you said the. 0:16:44.880 --> 0:16:50.040 Solar leasing companies. I've called them science projects. They're absolutely hysterical. 0:16:50.120 --> 0:16:53.120 They lose hundreds of millions of dollars, huge negative free 0:16:53.200 --> 0:16:57.440 cash flow. And getting back to our early conversation about metrics, 0:16:57.440 --> 0:17:01.680 they report rather than on a regular P and L, 0:17:02.000 --> 0:17:05.080 which would be embarrassing, they report these net present value 0:17:05.119 --> 0:17:08.800 calculations based on the panels they put up on people's 0:17:08.880 --> 0:17:11.719 roofs and It's absolutely hilarious the way they do it, 0:17:12.200 --> 0:17:14.840 and I think investors are going to, you know, find 0:17:14.880 --> 0:17:15.800 out the hard way about it. 0:17:15.840 --> 0:17:17.600 All right, Jim, We're gonna spend the last forty seconds 0:17:17.640 --> 0:17:20.040 with you getting your thoughts on what you're watching, what 0:17:20.080 --> 0:17:22.639 you're streaming, what you're doing, and what you're seeing at 0:17:22.680 --> 0:17:25.240 the movie theater. New movie out, Dumb Money. It's got 0:17:25.280 --> 0:17:26.880 me Davidson in it, It's got Seth. 0:17:26.720 --> 0:17:27.360 Rogan in it. 0:17:29.080 --> 0:17:30.240 Are you going to see it? Have you seen it? 0:17:30.240 --> 0:17:31.240 It's all about memestocks. 0:17:31.359 --> 0:17:35.080 I told one of your colleagues earlier, I don't see 0:17:35.119 --> 0:17:38.159 the need since I lived done money five days a 0:17:38.200 --> 0:17:42.080 week in the marketplace. So at some point I'm sure 0:17:42.080 --> 0:17:45.760 I'll see it. I you know, I think it celebrates 0:17:45.920 --> 0:17:49.639 the memestock investors winning over you know, Wall Street and 0:17:50.640 --> 0:17:53.440 the evil hedge funds. The sad thing is is that 0:17:53.560 --> 0:17:57.359 most of those memestock investors have lost large amounts of money, 0:17:57.400 --> 0:18:00.840 you know, chasing these ideas, because, as we pointed out, 0:18:01.080 --> 0:18:03.200 a lot of these companies came crashing down to earth 0:18:04.160 --> 0:18:06.480 and in some cases have already gone bankrupt. 0:18:06.720 --> 0:18:09.159 Hey, Jim, really appreciate you taking the time and joining us, 0:18:09.200 --> 0:18:11.600 especially for such a long period of time. Jim Chanos, 0:18:11.600 --> 0:18:14.640 the founder of Chenos and Company, legendary short seller. Here 0:18:14.680 --> 0:18:16.879 in our Bloomberg Interactive Broker Studio. 0:18:16.960 --> 0:18:20.560 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:20.560 --> 0:18:23.919 live weekday afternoons from three to six Eastern Listen on 0:18:24.000 --> 0:18:28.040 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, 0:18:28.320 --> 0:18:30.600 or watch us live on YouTube. 0:18:31.560 --> 0:18:34.600 You and Week Climate Week Global Citizen coming up this weekend. 0:18:34.640 --> 0:18:36.679 There is a lot going on in and around New 0:18:36.760 --> 0:18:38.679 York City right now. There's a lot going on for 0:18:38.720 --> 0:18:42.479 companies too, which with the un and all of this, 0:18:42.560 --> 0:18:45.159 though here in New York City specifically, it means a 0:18:45.160 --> 0:18:47.480 lot of global leaders come here and we get to 0:18:47.560 --> 0:18:50.320 check in with them. Among them Franco Sudas. She's executive 0:18:50.359 --> 0:18:53.600 vice president and chief People Policy Purpose Officer at Cisco Systems. 0:18:54.000 --> 0:18:56.160 Delighted to have her back here in our Bloomberg Interactive 0:18:56.160 --> 0:18:58.640 Broker Studio. Hello, how are you good? 0:18:58.680 --> 0:18:59.960 It's great to be with you again. 0:19:00.080 --> 0:19:02.040 It's great to have you here. We have a nice 0:19:02.080 --> 0:19:03.760 tonk of time. But I want to start with because 0:19:03.760 --> 0:19:05.760 I always like to do, because you are, you know, 0:19:05.880 --> 0:19:08.280 front seat with what's going on at the company, and 0:19:08.280 --> 0:19:10.640 what's going on in the environment. How would you describe 0:19:10.760 --> 0:19:13.440 You've seen what you've been at Cisco twenty seven years. 0:19:13.520 --> 0:19:15.879 That's correct, Yeah, it's amazing. You've seen a lot of 0:19:15.880 --> 0:19:19.040 different business cycles, and you've seen the technology world change 0:19:19.440 --> 0:19:21.840 in different cycles there. How would you describe today's environment? 0:19:22.400 --> 0:19:25.040 I would say it's incredibly dynamic. I think that our 0:19:25.080 --> 0:19:28.879 customers view technology a little differently than they did I 0:19:28.880 --> 0:19:31.000 would say even three or four years ago. I think 0:19:31.000 --> 0:19:35.840 there's an understanding that digitization and technology is an enabler 0:19:35.880 --> 0:19:38.560 for their success, and as a result of that, I 0:19:38.560 --> 0:19:40.720 think it changes a lot of the conversations that we're 0:19:40.760 --> 0:19:44.000 having with our customers. Even a good example of that 0:19:44.080 --> 0:19:48.200 is on the sustainability front. Whereas I think I would 0:19:48.200 --> 0:19:51.439 say five years ago, our customers were looking at the 0:19:51.520 --> 0:19:54.439 checklist like what do they need to do from a 0:19:54.480 --> 0:19:57.680 regulation perspective and what they believed was coming, I think 0:19:57.720 --> 0:20:00.800 now there's some really good discussions around how to sustainability 0:20:00.840 --> 0:20:04.160 intersect either with their business, their technology, what they're doing, 0:20:04.200 --> 0:20:06.600 what is the opportunity in that? And I think as 0:20:06.600 --> 0:20:08.560 a result of that, a lot of the conversations that 0:20:08.560 --> 0:20:12.920 we're having about whether it's modernizing infrastructure or security, has 0:20:12.960 --> 0:20:14.880 a little bit of a longer tail than it did 0:20:14.920 --> 0:20:15.480 once before. 0:20:15.600 --> 0:20:17.480 That's interesting. Is it a good business environment? 0:20:17.520 --> 0:20:18.760 Though? I think it. 0:20:18.960 --> 0:20:21.120 What's the right word, what's the right adjective to use? 0:20:21.280 --> 0:20:23.480 I think dynamic to be honest, I think. 0:20:23.320 --> 0:20:25.280 What is dynamicase dynamics to me sounds upbeat. 0:20:25.960 --> 0:20:28.800 Yeah, you know, I think it is upbeat in that 0:20:29.640 --> 0:20:33.639 technology is front and center. I think our customers are 0:20:33.680 --> 0:20:36.560 coming to us and we're coming to them to figure 0:20:36.600 --> 0:20:38.920 out solutions, and I think as long as we're having 0:20:38.960 --> 0:20:42.640 those conversations, it makes us better. I think there are 0:20:42.800 --> 0:20:46.159 a lot of dynamics that businesses are responding to that 0:20:46.200 --> 0:20:48.000 I wouldn't put in the positive category. 0:20:48.119 --> 0:20:48.840 What are some of those? 0:20:49.240 --> 0:20:49.359 So? 0:20:49.560 --> 0:20:51.959 I mean, it's everything from the fact that we still 0:20:52.080 --> 0:20:55.880 have a war on the ground in Europe. I think 0:20:56.760 --> 0:20:59.440 leaders are still trying to figure out how they want 0:20:59.440 --> 0:21:02.360 to work. In a meeting earlier today, and I will 0:21:02.400 --> 0:21:04.119 tell you there was not a lot of love for 0:21:04.200 --> 0:21:06.600 what I would consider hybrid work. I think leaders are 0:21:06.600 --> 0:21:09.040 trying to figure out what's the right way to work. 0:21:09.400 --> 0:21:11.600 My people want something a little bit different than I do. 0:21:11.800 --> 0:21:13.360 That's an interesting dynamic as well. 0:21:13.560 --> 0:21:15.159 Describe that when you say there's not a lot of 0:21:15.280 --> 0:21:16.679 love and what were you hearing? 0:21:17.640 --> 0:21:20.520 I think what I hear, and it's understandable is that 0:21:20.600 --> 0:21:23.400 in some cases, I think leaders want to go back 0:21:23.440 --> 0:21:25.919 to something that was a bit more predictable. Right, so 0:21:26.520 --> 0:21:28.240 you know we would all come in three or four 0:21:28.520 --> 0:21:31.359 days a week, and you know we would do our 0:21:31.440 --> 0:21:33.480 jobs five. 0:21:33.359 --> 0:21:36.119 Or six days absolute twenty nineteen's. 0:21:37.080 --> 0:21:41.280 And what's interesting is that I think from a business perspective, 0:21:41.920 --> 0:21:43.720 it would be so much easier if there was a 0:21:43.760 --> 0:21:45.920 one size fits all. But the truth of the matter 0:21:46.000 --> 0:21:49.000 with work is that depending on your job, depending on 0:21:49.080 --> 0:21:51.920 where you work, who you work with, there's so many 0:21:51.920 --> 0:21:54.840 different flavors. And I think that's an example of a 0:21:54.920 --> 0:21:57.920 dynamic that leaders are having to deal with and really 0:21:58.000 --> 0:21:59.280 think through what makes the most sense. 0:21:59.520 --> 0:22:02.080 What would you tell leaders because and correct me if 0:22:02.119 --> 0:22:05.280 I'm wrong, but Cisco has been doing hybrid and make 0:22:05.400 --> 0:22:08.080 depend you know, people have a lot of flexibility for 0:22:08.600 --> 0:22:12.240 pre pandemic for years. So what would you tell leaders 0:22:12.480 --> 0:22:14.600 about what works, what doesn't, why it makes sense? 0:22:14.640 --> 0:22:14.840 Why? 0:22:15.040 --> 0:22:15.159 What? 0:22:15.680 --> 0:22:16.439 What would you say? 0:22:16.520 --> 0:22:18.920 I would tell leaders to focus on the work, because 0:22:19.000 --> 0:22:23.119 I think work will guide on how we need to 0:22:23.160 --> 0:22:26.159 come together. But I would also tell leaders that I 0:22:26.200 --> 0:22:29.280 think all of us are now event planners because I 0:22:29.280 --> 0:22:31.400 think we have to think about the events that bring 0:22:31.480 --> 0:22:34.000 our teams together, that build the culture that we need 0:22:34.040 --> 0:22:36.480 to have to ensure that we have the connections that 0:22:36.520 --> 0:22:38.920 we need. But I don't think it's a one size 0:22:38.920 --> 0:22:41.600 fits all. I actually don't think that whatever we create 0:22:42.000 --> 0:22:44.520 this month may be applicable next month. I think there's 0:22:44.560 --> 0:22:46.919 just a tad bit more agility in how we work, 0:22:47.320 --> 0:22:49.240 and as leaders, I think we have to work hard 0:22:49.280 --> 0:22:51.920 to really understand what does success look like? And do 0:22:51.960 --> 0:22:54.600 I have key measures that allow me to understand whether 0:22:54.680 --> 0:22:56.040 or not my teams are doing what we need them 0:22:56.040 --> 0:22:56.280 to do. 0:22:56.680 --> 0:23:00.359 Has it helped you in terms of finding work? And 0:23:00.400 --> 0:23:02.399 I'm very curious what you have to say about the 0:23:02.440 --> 0:23:06.200 labor market. We're seeing signs of some softening. But I'm 0:23:06.240 --> 0:23:08.960 just curious how being flexible helps you and then what 0:23:09.000 --> 0:23:10.800 you are seeing overall in terms of labor market. 0:23:11.119 --> 0:23:13.160 It can help you, but you have to be really 0:23:13.200 --> 0:23:17.239 deliberate with what you want that team environment to look like. 0:23:17.280 --> 0:23:20.240 So as an example, there are some of our areas 0:23:20.240 --> 0:23:23.080 from a technology perspective where we want the best of 0:23:23.160 --> 0:23:25.760 the best, and we're happy with wherever they are in 0:23:25.760 --> 0:23:27.760 the world, and we have the technology for them to 0:23:27.840 --> 0:23:31.040 join us via video, and so we don't worry about 0:23:31.040 --> 0:23:33.119 the fact that they may be remote from other members 0:23:33.119 --> 0:23:36.359 of the team. But that's a deliberate choice. But I 0:23:36.400 --> 0:23:39.480 think when you have a level of flexibility, it's just 0:23:39.480 --> 0:23:41.840 going to allow you to cast a wider net on 0:23:41.880 --> 0:23:43.080 who you bring into the company. 0:23:43.160 --> 0:23:46.720 How do you create those spontaneous moments that you know, 0:23:46.760 --> 0:23:49.679 those water cooler moments here at Bloomberg, those pantry moments. 0:23:49.720 --> 0:23:52.240 I mean, Joe Weber, editor at Bloomberg BusinessWeek, tells us 0:23:52.320 --> 0:23:56.479 every week that some article, even a cover story, is 0:23:56.520 --> 0:23:59.000 the result of just bumping into one of the reporters 0:23:59.119 --> 0:24:01.520 of the pantry, rolling over to somebody's desk exactly. 0:24:01.800 --> 0:24:04.760 I think it takes work remotely. And this is the 0:24:04.840 --> 0:24:07.320 rub I will tell you, like this was a long 0:24:07.320 --> 0:24:09.480 time ago. I'm gonna say like fifteen or twenty years ago. 0:24:09.800 --> 0:24:13.440 I remember I created something called the virtual Hallway conversation 0:24:13.560 --> 0:24:15.199 because I had a team that was all over the 0:24:15.240 --> 0:24:19.639 world and we would schedule this ten minute quick sync 0:24:20.400 --> 0:24:22.800 and the only rule was we couldn't talk about work 0:24:22.840 --> 0:24:25.359 for the first few minutes because sometimes we bumping should 0:24:25.440 --> 0:24:27.680 in the hallway, we just talk about like how your kids. 0:24:27.520 --> 0:24:28.040 What are you doing? 0:24:28.680 --> 0:24:30.480 So I guess what I would say is we do 0:24:30.760 --> 0:24:33.240 have to work hard to create that when you have 0:24:33.359 --> 0:24:35.800 flex it doesn't mean that you don't come in. I 0:24:35.880 --> 0:24:38.080 think you just have to be really thoughtful when people 0:24:38.280 --> 0:24:38.600 come in. 0:24:38.920 --> 0:24:40.560 What is the best use of our time? 0:24:40.880 --> 0:24:44.000 Would you say there's a little softening of the labor market, you. 0:24:44.040 --> 0:24:47.399 Know, it's interesting I would say that despite the fact 0:24:47.560 --> 0:24:52.159 that there is some softening, boy, the talent market is 0:24:52.200 --> 0:24:55.399 still hot in many many areas, and I look at 0:24:55.440 --> 0:24:59.600 an area like security as an example. Globally, the belief 0:24:59.680 --> 0:25:02.480 is still that there are four million security roles that 0:25:02.560 --> 0:25:06.040 are still open and that we can't find the talent 0:25:06.160 --> 0:25:08.240 for those roles. The other thing that we understand is 0:25:08.280 --> 0:25:08.639 about you. 0:25:08.880 --> 0:25:10.480 Those Would you say you have roles that are open 0:25:10.560 --> 0:25:10.760 that you. 0:25:11.480 --> 0:25:14.520 I would say that we're always looking for amazing talent. 0:25:14.680 --> 0:25:18.119 But I think around the world there's some struggle getting 0:25:18.240 --> 0:25:20.639 to people that have some of the skills. On the 0:25:20.720 --> 0:25:24.200 security side, About half of those roles are more entry level, 0:25:24.240 --> 0:25:26.400 and so for us, what that means is there's such 0:25:26.440 --> 0:25:29.600 an opportunity to train up talent and really help them 0:25:29.600 --> 0:25:30.760 get the skills that get them started. 0:25:30.800 --> 0:25:32.720 How do you start? How do you train up that 0:25:32.840 --> 0:25:36.239 talent earlier in their careers, earlier in their lives? I mean, 0:25:36.480 --> 0:25:38.720 where does this start within our education system? 0:25:40.040 --> 0:25:41.960 You know, it's interesting because if you look at the 0:25:42.200 --> 0:25:46.119 US President Biden, I think about nine months ago, convened 0:25:46.520 --> 0:25:49.680 a group of leaders together against the backdrop of security. 0:25:49.960 --> 0:25:53.720 And the approach that the team was taking was to 0:25:53.880 --> 0:25:57.120 look at what are the security skills that everyone needs 0:25:57.200 --> 0:26:01.360 to have? What are the security skills that own many 0:26:01.520 --> 0:26:04.119 need to have? And then a few, right, And so 0:26:04.200 --> 0:26:06.240 when you get to the few, you are talking about 0:26:06.320 --> 0:26:09.639 your chief security officers, the top of the top. But 0:26:09.920 --> 0:26:12.239 for all, what you're talking about is maybe we need 0:26:12.320 --> 0:26:15.920 to start to teach our students in elementary school about 0:26:16.119 --> 0:26:20.080 passwords and how to be secure, and so absolutely start 0:26:20.400 --> 0:26:22.399 really early, to be honest. And then I think the 0:26:22.480 --> 0:26:24.240 other thing that I would say is when I look 0:26:24.240 --> 0:26:27.440 at Cisco and other tech companies, we used to spend 0:26:27.440 --> 0:26:32.160 a lot of time at high schools and now we're 0:26:32.200 --> 0:26:34.280 taking that down to elementary school as well. So I 0:26:34.359 --> 0:26:36.200 do think we need to start earlier and earlier, and 0:26:36.320 --> 0:26:37.160 especially for girls. 0:26:37.600 --> 0:26:39.960 That is fascinating. Hey, listen, we've got about a minute 0:26:39.960 --> 0:26:42.280 and a half left here. You guys at Cisco, you've 0:26:42.320 --> 0:26:45.880 had ESG initiatives and missions and goals for a long time. 0:26:46.160 --> 0:26:48.440 Remind us a little bit about the impact that that 0:26:48.680 --> 0:26:53.240 has had on the company financially and just overall in 0:26:53.359 --> 0:26:54.560 terms of the cultural environment. 0:26:55.200 --> 0:26:57.560 The impact is significant. So it was about three years 0:26:57.600 --> 0:27:00.560 ago that we created our new purpose to power Inclusive 0:27:00.640 --> 0:27:04.280 Future for All, and that really started to guide everything 0:27:04.400 --> 0:27:08.399 that we do across the company from a sustainability perspective. 0:27:08.560 --> 0:27:12.959 We launched about a year ago our net zero goals 0:27:13.000 --> 0:27:15.160 for Scope one and Scope two, which is twenty twenty five, 0:27:15.280 --> 0:27:18.399 Scope three which is twenty forty. We now have an 0:27:18.520 --> 0:27:22.639 SPTI approved plan, which basically means that we have a 0:27:22.680 --> 0:27:26.680 scientific plan that has been reviewed and approved. I say 0:27:26.760 --> 0:27:30.680 all of this because I think that inclusive future means 0:27:30.760 --> 0:27:33.840 we need to have a livable planet. That inclusive future 0:27:33.920 --> 0:27:36.879 means we need to have really good people practices within 0:27:36.960 --> 0:27:40.639 the company and to influence communities more broadly, and that 0:27:40.680 --> 0:27:43.200 we're doing everything we can from a digital divide perspective, 0:27:43.800 --> 0:27:48.360 I do think, Carol, that how we focus on sustainability 0:27:48.680 --> 0:27:50.520 will be an amazing business for Cisco. 0:27:50.640 --> 0:27:50.800 Two. 0:27:50.960 --> 0:27:54.119 So as an example, some of our technology now is 0:27:54.200 --> 0:27:57.320 so much more energy efficient with higher bandwidth, like our 0:27:57.320 --> 0:28:01.480 Silicon one products, and that's a great growth business for us. 0:28:01.600 --> 0:28:03.320 But it's going to save our customers a ton of 0:28:03.400 --> 0:28:05.679 energy on the other side, and that's the opportunity. 0:28:05.840 --> 0:28:05.959 Well. 0:28:06.000 --> 0:28:07.520 And I do think about when you've got the hottest 0:28:07.600 --> 0:28:09.680 year on record, like how that kind of shapes and 0:28:09.760 --> 0:28:12.840 whether that makes companies like yourself even rethink, you know, 0:28:13.200 --> 0:28:14.720 is it sooner that you try to do this against 0:28:14.720 --> 0:28:16.840 do you think about maybe trying to get there even sooner? 0:28:17.000 --> 0:28:19.359 We have to, and I think the technology and our 0:28:19.440 --> 0:28:21.160 people will push us to do that, which is great. 0:28:22.240 --> 0:28:23.760 I know you're going to be involved in Global citizen 0:28:23.840 --> 0:28:26.639 you guys always are. I'm so grateful for you finding 0:28:26.680 --> 0:28:28.800 time for us. Thank you, Thank you. Frank Asudas. She's 0:28:28.840 --> 0:28:32.080 executive EP, Chief People Policy Purpose Officer at Cisco Systems. 0:28:32.080 --> 0:28:39.880 Here in studio, you're listening to the Bloomberg Business Week podcast. 0:28:40.160 --> 0:28:43.200 Catch us live weekday afternoons from three to six Easter 0:28:43.560 --> 0:28:47.240 on Bloomberg Radio. The Bloomberg business app and YouTube. You 0:28:47.360 --> 0:28:50.560 can also listen live on Amazon Alexa from our flagship 0:28:50.680 --> 0:28:54.480 New York station. Just say Alexa, play Bloomberg eleven. 0:28:54.280 --> 0:28:58.480 Thirty Climate Week in New York against the backdrop of 0:28:58.520 --> 0:29:01.040 the seventy eighth session of the General Assembly. You know 0:29:01.120 --> 0:29:02.240 that we've been talking about it. 0:29:03.240 --> 0:29:03.800 They have. 0:29:04.120 --> 0:29:08.600 The UN has identified seventeen specific SDG sustainable Development goals, 0:29:08.840 --> 0:29:12.160 including building out resilient technology infrastructure, and to get there 0:29:12.320 --> 0:29:15.280 and reach some of those seventeen SDGs, the UN has 0:29:15.360 --> 0:29:19.400 highlighted high impact initiatives, among them unlocking the Data Dividend, 0:29:19.680 --> 0:29:22.560 which our next guests participated in an event that happened 0:29:23.080 --> 0:29:26.200 here this week with us is Johannes Ulting, Executive head 0:29:26.200 --> 0:29:28.440 of the Partnership in Statistics for Development in the twenty 0:29:28.520 --> 0:29:31.960 first Century. The acronym is Paris twenty one, which is 0:29:32.000 --> 0:29:34.720 hosted by the OSD in Paris. I have to say 0:29:34.760 --> 0:29:38.520 that Johanna's former member of the UN Secretary General's Expert 0:29:38.560 --> 0:29:42.440 Group on the Data Revolution. He's a development economist, expertise 0:29:42.480 --> 0:29:45.480 and employment, social protection, healthcare, financing and gender. He's looked 0:29:45.480 --> 0:29:47.160 at the world in a lot of different ways and 0:29:47.200 --> 0:29:49.680 we were delighted to have him here in our Bloomberg 0:29:49.720 --> 0:29:50.880 Interactive Broker's studio. 0:29:50.920 --> 0:29:53.320 Welcome, Welcome, Thank you very much for inviting me. 0:29:53.480 --> 0:29:55.560 Well, thank you. And I've learned about PARIS twenty one 0:29:55.600 --> 0:29:58.239 because my daughter has done an internship with you all 0:29:58.360 --> 0:30:00.800 this summer. So full transparency, but I've learned a lot. 0:30:00.920 --> 0:30:03.120 Tell us though, in your words, your mission and your goals, 0:30:03.160 --> 0:30:04.080 what you guys are all about. 0:30:04.760 --> 0:30:08.440 PARIS twenty one stands for Partnership in Statistics in Development 0:30:08.560 --> 0:30:12.160 for the twenty first century. We basically do three things. 0:30:12.360 --> 0:30:17.360 We help countries with technical capacity development National statistical offices, 0:30:17.880 --> 0:30:22.120 so we help training of managers in statistical offices in 0:30:22.240 --> 0:30:26.520 poor countries like Wanda and others, so we organize trainings. 0:30:26.960 --> 0:30:30.240 We help with coordination in many parts of when you 0:30:30.400 --> 0:30:34.240 produce data, there are many ministries involved, there are development 0:30:34.320 --> 0:30:38.320 agencies involved, and we help them with to get coordinated. 0:30:38.880 --> 0:30:40.640 And last, but not least, we do advocacy. 0:30:40.680 --> 0:30:44.440 And you just mentioned the UNGA week, the SDG summit, 0:30:45.000 --> 0:30:47.760 and we do advocacy for more and better funding for 0:30:47.920 --> 0:30:48.880 data and statistics. 0:30:49.120 --> 0:30:51.320 Well, what's interesting in a world that's overrun with data, 0:30:51.360 --> 0:30:54.480 we just assume it's good. Well, we don't stand it's good. 0:30:54.520 --> 0:30:57.920 We talk about bias data and kind of dirty data, 0:30:58.000 --> 0:31:00.840 not great data. But not all data is good, not 0:31:00.960 --> 0:31:04.800 all data is productive or useful, right, And so you 0:31:04.880 --> 0:31:08.960 guys are involved in that in helping countries develop infrastructure 0:31:09.000 --> 0:31:11.680 so that they can actually accumulate their own data sets. 0:31:11.920 --> 0:31:13.760 Correct is absolutely correct. 0:31:13.800 --> 0:31:16.480 I think what is a bit difficult sometimes to understand 0:31:16.600 --> 0:31:18.320 is on the one hand we have a data tsunami. 0:31:18.400 --> 0:31:22.240 We have all these data digital data, which is very good, 0:31:22.320 --> 0:31:26.800 which is feeding artificial intelligence and innovation. On the other hand, 0:31:26.920 --> 0:31:30.360 we have and on the other hand we have data gaps, 0:31:30.800 --> 0:31:33.440 terrible data gaps, and in some countries we don't even 0:31:33.480 --> 0:31:35.880 know of how many people in a country are living. 0:31:36.240 --> 0:31:40.520 We have difficulties to measure burst rates and to register 0:31:40.640 --> 0:31:43.320 those people. We have a lot of data gaps in 0:31:43.360 --> 0:31:48.080 the SDGs. We in particular on climate change or gender equality, 0:31:48.200 --> 0:31:52.000 we are literally flying blind. So we are supporting as 0:31:52.080 --> 0:31:55.880 paras twenty one with our partners to close those data gaps, 0:31:56.160 --> 0:31:59.560 to be able to do better decisions, but also to 0:31:59.680 --> 0:32:02.240 hold oh our government's accountable. I think that's also a 0:32:02.320 --> 0:32:05.480 very important aspect of this. So that if you say 0:32:05.640 --> 0:32:08.000 you want to reduce poverty in a given country by 0:32:08.040 --> 0:32:10.600 six percent. You want to have the start point and 0:32:10.720 --> 0:32:12.440 the endpoint, and you want to see if this is 0:32:12.520 --> 0:32:12.920 on track. 0:32:13.240 --> 0:32:15.960 We've talked a lot this year about AI and the 0:32:16.200 --> 0:32:19.040 impact that AI is having on companies whose stocks are 0:32:19.040 --> 0:32:21.840 publicly traded. What about when it comes to your work 0:32:21.880 --> 0:32:23.840 and how you can use AI to make sense of 0:32:23.880 --> 0:32:27.000 this data and help these poorer countries actually make positive change? 0:32:27.120 --> 0:32:27.640 Are you using it? 0:32:28.120 --> 0:32:29.200 An excellent question. 0:32:29.360 --> 0:32:31.360 I mean, what we see is that there are two 0:32:31.520 --> 0:32:33.600 I mean we often talk about silos, right, I mean, 0:32:33.680 --> 0:32:36.160 and this is a real sile of On the one hand, 0:32:36.240 --> 0:32:38.360 we have people talking about the data that you were 0:32:38.440 --> 0:32:42.720 just mentioning, feeding into the algorithms and that supporting these 0:32:42.800 --> 0:32:45.600 AI driven innovation, and on the other hand, we have 0:32:45.760 --> 0:32:49.120 data for development, which is an owned space by itself, 0:32:49.200 --> 0:32:51.440 and there's not enough crossover. If you look at the 0:32:51.800 --> 0:32:54.360 G twenty statement at the last one, there is a 0:32:54.400 --> 0:32:57.000 working group on Data for development and there's a working 0:32:57.040 --> 0:32:58.120 group on digital data. 0:32:58.400 --> 0:33:01.720 So there is yet not enough overlap. I think it's 0:33:01.880 --> 0:33:02.920 it's about to close. 0:33:03.040 --> 0:33:06.920 And artificial intelligent for the public good is of course 0:33:07.040 --> 0:33:09.760 very important, but also the quality of the data that 0:33:09.880 --> 0:33:14.880 you feed into it is essential, garbage in, garbage out exactly. 0:33:15.000 --> 0:33:18.960 So the quality of the data to help countries produce 0:33:20.280 --> 0:33:25.200 verified quality statistics even is very essential and often unfortunately 0:33:25.960 --> 0:33:26.880 not in the spotlight. 0:33:27.000 --> 0:33:29.280 Well, you can't have transformative I'm stealing words from you 0:33:29.320 --> 0:33:31.760 guys by transformative policy without transformative data. 0:33:31.840 --> 0:33:35.120 Correct, absolutely correct. Yeah, Well, and I'm. 0:33:35.000 --> 0:33:37.480 Curious about you know, in a world where there's lots 0:33:37.480 --> 0:33:40.000 of stress points, I'm thinking, you know, the hottest world, 0:33:40.280 --> 0:33:42.160 You're right, hottest temperatures on record, So there's a lot 0:33:42.240 --> 0:33:44.200 going you know, a lot of focus on climate, but 0:33:45.040 --> 0:33:48.320 investment in infrastructure systems so that the data collection is better. 0:33:48.480 --> 0:33:49.160 How tough is that? 0:33:49.360 --> 0:33:51.600 To get the money going where it needs to go? 0:33:52.560 --> 0:33:56.040 That's, unfortunately, is a very very difficult exercise. So we 0:33:56.160 --> 0:34:00.360 currently spend around six seven hundred million on data insteadistics 0:34:00.360 --> 0:34:05.000 from Official Development aid ODA AID and this is less 0:34:05.160 --> 0:34:07.479 than a percentage point since here. So we would need 0:34:07.560 --> 0:34:11.719 to ramp up significantly the international support for data and statistics. 0:34:12.160 --> 0:34:15.480 But we also need to convince countries to invest part 0:34:15.560 --> 0:34:19.400 of their taxpayers' money, domestic resources into it and the payoff. 0:34:19.480 --> 0:34:21.560 I mean, the thing is if I invest into a hospital, 0:34:21.600 --> 0:34:23.400 if you're a minister, what would you do? Would you 0:34:23.520 --> 0:34:26.680 invest in a hospital, or in vaccination or education, or 0:34:26.719 --> 0:34:29.480 would you invest in a national statistical office? We're probably 0:34:29.560 --> 0:34:31.480 the first, Yeah, because then you can show after two 0:34:31.600 --> 0:34:35.520 three years is done. These benefits for investment in national 0:34:35.560 --> 0:34:39.160 statistical systems will only take time. The benefit will take 0:34:39.239 --> 0:34:42.160 time ten fifteen years later. They feed into everything else. 0:34:42.320 --> 0:34:42.880 Sell us on it. 0:34:43.200 --> 0:34:44.719 You know, if you're trying to sell a minister on 0:34:44.800 --> 0:34:45.839 making this investment. 0:34:45.520 --> 0:34:45.960 How do you do it? 0:34:46.080 --> 0:34:48.040 What's the cost by not making those investments? 0:34:48.800 --> 0:34:51.160 What we say is if you want to have I mean, 0:34:51.239 --> 0:34:54.120 for instance, economic growth, I mean it's very critical to 0:34:54.239 --> 0:34:58.120 have very good understanding about key economic indicators right, and 0:34:58.239 --> 0:35:02.000 if those are not sort of measured in your country, 0:35:02.080 --> 0:35:03.600 you will not be able to, first off all, to 0:35:03.680 --> 0:35:06.760 make very good decisions. You will not invest your public 0:35:06.840 --> 0:35:09.680 resources very efficiently. You are not even able to tell 0:35:09.719 --> 0:35:12.640 you if you do it or not. So in that sense, 0:35:12.680 --> 0:35:14.400 we are not asking for a lot of money. It's 0:35:14.520 --> 0:35:17.640 it's pe nuts. It's literally pe nuts, and there are 0:35:17.640 --> 0:35:19.720 a lot of we have a lot of good tools 0:35:19.760 --> 0:35:23.480 attend to help. So I think for a minister, and 0:35:23.520 --> 0:35:26.239 many planning ministers actually know this and they are behind this. 0:35:26.960 --> 0:35:29.680 It's sometimes just the politics behind which is a bit difficult. 0:35:29.800 --> 0:35:33.640 No politics, But what's interesting but the amount of investment 0:35:33.680 --> 0:35:35.320 decisions that are made up of like all of the 0:35:35.600 --> 0:35:38.640 US economic statistics or global statistics right in the developed world. 0:35:39.320 --> 0:35:41.240 We've got about a minute and a half left, Johanna's 0:35:41.400 --> 0:35:41.600 you know. 0:35:42.640 --> 0:35:44.279 A lot of times a little more. 0:35:44.320 --> 0:35:46.520 Sorry, Okay, you know, it's been that kind of crazy day. 0:35:46.800 --> 0:35:49.120 So I think about, like our audience who's listening, a 0:35:49.160 --> 0:35:53.000 smart financial investment audience, what is it that they need 0:35:53.080 --> 0:35:57.360 to understand about again the importance of it and potentially 0:35:57.440 --> 0:36:01.640 the payoff. What's being missed by not accurately having data 0:36:02.239 --> 0:36:03.440 on a lot of different countries. 0:36:03.640 --> 0:36:05.719 I think we have to talk about the opportunities and 0:36:05.840 --> 0:36:09.200 the investment opportunities we will have next year in Meddelin 0:36:09.320 --> 0:36:12.760 or World Data Forum. So all your listeners, your community 0:36:13.160 --> 0:36:16.279 is quarterly invited because we are working more and more 0:36:16.360 --> 0:36:19.040 with the private sector, of course with the big companies 0:36:19.360 --> 0:36:21.399 that have a lot of data that make those data. Also, 0:36:21.440 --> 0:36:24.040 because we were asking about AI, I will later today 0:36:24.120 --> 0:36:27.160 attend by Google and I for Public Good. There are 0:36:27.200 --> 0:36:30.600 many other companies who are actively engaging I think they 0:36:30.640 --> 0:36:32.960 could do a little bit more though, and also sees 0:36:33.000 --> 0:36:35.000 it as a public good. So I think for the 0:36:35.840 --> 0:36:39.320 many of our colleagues and partners from the private sector, 0:36:39.320 --> 0:36:42.560 I interested. So are civil society organizations, by the way, 0:36:42.840 --> 0:36:45.640 and to bring them together in multi partnership, that's the 0:36:45.840 --> 0:36:49.560 partnership part is very important. 0:36:50.000 --> 0:36:52.200 How can we make the data collection easier from the 0:36:52.280 --> 0:36:55.680 perspective of these countries, And I'm thinking about public private 0:36:55.719 --> 0:36:58.480 partnership specifically. I mean, think about the data that a 0:36:58.560 --> 0:37:02.400 mobile phone company has about what somebody does on their 0:37:02.440 --> 0:37:05.319 phone transactions that they make. I mean, you can get 0:37:05.440 --> 0:37:08.480 really granular information that can tell stories about an economy. 0:37:09.360 --> 0:37:11.959 What's the role of a private company and in working 0:37:12.000 --> 0:37:13.880 with the government to provide that data because there are 0:37:13.920 --> 0:37:15.120 some privacy concerns too. 0:37:16.120 --> 0:37:18.440 It's on point exactly how you say. On the one hand, 0:37:18.480 --> 0:37:20.800 I mean this we call this public private partnership, and 0:37:20.880 --> 0:37:24.760 there are some really very nice public private partnership out 0:37:24.800 --> 0:37:29.839 there where telephone companies share confidentially and secured the data. 0:37:30.160 --> 0:37:32.160 But of course it's a business risk as well. I mean, 0:37:32.200 --> 0:37:34.480 and you have to see what has happened to this 0:37:34.640 --> 0:37:36.960 data and so on and so forth. But there are 0:37:37.080 --> 0:37:40.799 some very good, promising examples of how what we call 0:37:40.920 --> 0:37:44.440 big data, specifically on geospatial data is used, for instance, 0:37:44.480 --> 0:37:49.680 on poverty mapping, day and night satellite imagery. So you 0:37:49.760 --> 0:37:53.600 can look at a given country and you can compare 0:37:54.200 --> 0:37:57.200 the light nights, and you can compare it with a day, 0:37:57.360 --> 0:38:00.400 and then you can make a sort of calculation do 0:38:00.560 --> 0:38:01.200 these people. 0:38:01.040 --> 0:38:02.360 Have light electricity or not? 0:38:02.440 --> 0:38:05.680 And from this with other data, you can estimate how 0:38:05.760 --> 0:38:08.040 poor people are and you also know for your investors 0:38:08.280 --> 0:38:11.360 where maybe you can put some infrastructure to solve this problem. 0:38:12.160 --> 0:38:14.120 And that's what I was thinking about. It was interesting. 0:38:14.160 --> 0:38:18.200 I was over at the earth Shot Prize Bloomberg Philanthropy's event, 0:38:18.320 --> 0:38:20.360 and we talked with some of the finalists of the 0:38:20.400 --> 0:38:22.480 earth Shot Prize, and they've come up with different ways 0:38:22.520 --> 0:38:24.879 to decarbonize the world. And one of the things, let's 0:38:24.880 --> 0:38:26.600 talk about what you're doing, But then it's like, what's 0:38:26.640 --> 0:38:29.800 the impact. Talk to us about some of either the 0:38:29.920 --> 0:38:33.160 data sets that you have helped accumulate and what it 0:38:33.280 --> 0:38:35.160 has led to if you give us some examples. 0:38:35.560 --> 0:38:38.000 Of course, I mean we have been we do a 0:38:38.040 --> 0:38:40.239 lot of country work, and in specific the one area 0:38:40.280 --> 0:38:43.200 which is very important it's on gender. So in some 0:38:43.360 --> 0:38:46.320 parts of this world, I mean through our support in 0:38:46.440 --> 0:38:51.920 the MALIDIVS in Colombia, in Africa, in many countries we 0:38:52.040 --> 0:38:56.120 have no more sex disaggregated data, which is fantastic for 0:38:56.480 --> 0:38:57.520 many different purposes. 0:38:57.640 --> 0:39:00.560 I mean this feels so basic, right, yeah, absolutely, I. 0:39:00.600 --> 0:39:02.880 Mean to sort of to know of how many men 0:39:02.960 --> 0:39:06.759 and women there are children. So we have quite a 0:39:06.800 --> 0:39:09.880 couple of countries where we can show success, where we 0:39:09.960 --> 0:39:13.839 can show impact, and this impact is leading governments also 0:39:13.920 --> 0:39:16.400 to invest more into data and statistics. 0:39:16.480 --> 0:39:20.160 So you can say the glass is maybe more half 0:39:20.200 --> 0:39:21.840 full than half empty in our area. 0:39:22.280 --> 0:39:24.480 But through these events like what we have here at 0:39:24.560 --> 0:39:26.920 the highest level that we had the DSG, I mean 0:39:26.960 --> 0:39:29.440 A Mohamed was opening the High Impact Initiative. We had 0:39:29.440 --> 0:39:33.160 another event just a breakfast on seven am in the morning, 0:39:33.480 --> 0:39:34.320 full room. 0:39:34.640 --> 0:39:38.000 Very very important people. So there is more consideration for 0:39:38.480 --> 0:39:38.960 the topic. 0:39:39.440 --> 0:39:42.919 And I'm rather optimistic than for the next eight years 0:39:42.960 --> 0:39:44.880 that we can give it a big push and we 0:39:44.960 --> 0:39:47.680 will be able to convince more people that this is 0:39:47.719 --> 0:39:49.880 an important part of the development nexus. 0:39:50.040 --> 0:39:53.359 Johannas you talked about Google and Like or the media, 0:39:53.400 --> 0:39:56.040 you're going that you've had or the conversations you've had, 0:39:56.239 --> 0:39:59.960 and I do wonder about how much increasingly the private 0:40:00.200 --> 0:40:02.040 sector complain all of this. It's interesting. We had a 0:40:02.080 --> 0:40:07.200 guest yesterday and we talked about the Roaring twenties and 0:40:07.320 --> 0:40:10.120 the crash and FDR, and we talked about who were 0:40:10.160 --> 0:40:12.400 the power brokers back then, and it was you know, 0:40:12.480 --> 0:40:15.759 the Carnegie and you know those kind of folks who 0:40:15.800 --> 0:40:21.040 are industrialists. Today's power brokers are the data CEOs and 0:40:21.160 --> 0:40:24.120 the data companies. What you are trying to do, does 0:40:24.160 --> 0:40:26.960 it increasingly have to come from the private sector or 0:40:27.080 --> 0:40:31.759 does that not necessarily give you the purest data that 0:40:31.840 --> 0:40:32.120 you want. 0:40:32.800 --> 0:40:36.560 I try, it's a very very important question. They have 0:40:36.800 --> 0:40:38.919 so much they have so much data, but of course 0:40:39.000 --> 0:40:41.600 data is also linked to power, and it has lots 0:40:41.640 --> 0:40:44.600 of questions about confidentiality. It's about the use to safe 0:40:44.680 --> 0:40:47.359 use of the data. And of course these companies want 0:40:47.400 --> 0:40:49.959 to make business. What we are talking here is about 0:40:50.000 --> 0:40:53.320 a public good. So if you talk specifically about a 0:40:53.400 --> 0:40:57.080 specific subcutory like official statistics, I would say this should 0:40:57.239 --> 0:41:00.560 stay in the hand of governments. There are certain criteria, 0:41:00.719 --> 0:41:02.839 we have principles for how to produce those things. 0:41:03.000 --> 0:41:03.799 Is a public good. 0:41:04.200 --> 0:41:06.400 We don't know what happens to those data, but I 0:41:06.440 --> 0:41:10.800 think some of these data is just essential for the government, 0:41:11.040 --> 0:41:14.799 for private sector, for civil society as well, to see 0:41:14.840 --> 0:41:18.480 where a country stands, how is it about the education system. 0:41:18.600 --> 0:41:21.359 So to leave this to the private sector, I don't 0:41:21.400 --> 0:41:24.320 think it's a good idea to have the private sector 0:41:24.480 --> 0:41:28.000 feed into those official statistics. That's a very different question. 0:41:28.600 --> 0:41:31.040 We need to be on the same level playing field. 0:41:31.120 --> 0:41:33.520 And we just talked about the numbers. If you look 0:41:33.560 --> 0:41:36.080 at the budget of an official statistical office in a 0:41:36.120 --> 0:41:39.160 poor country and you compare it with any other private 0:41:39.239 --> 0:41:41.359 sector of funding, it's very. 0:41:41.360 --> 0:41:44.320 Clear where the power relate, how the power relationship is. 0:41:44.440 --> 0:41:46.560 We'll invest your money, not flow in if you don't 0:41:46.600 --> 0:41:50.960 have those data sets well, to some make sense, that'ship. 0:41:50.360 --> 0:41:52.520 Absolutely, I mean it's flowing in. 0:41:52.719 --> 0:41:56.080 But then we make in some countries where we this 0:41:56.320 --> 0:41:59.359 birth registration that I mentioned be registration. 0:42:00.360 --> 0:42:01.520 This is terrible. 0:42:01.600 --> 0:42:04.759 Mistakes are possible, and and also sort of investments that 0:42:04.840 --> 0:42:08.560 are not sort of leading to the estimated results. I 0:42:08.600 --> 0:42:10.719 mean the middle class for instance, you want to know 0:42:10.880 --> 0:42:13.720 as a as an investor, the middle class in India 0:42:13.880 --> 0:42:15.280 is it is it five hundred million. 0:42:15.360 --> 0:42:16.480 Now how big is it actually? 0:42:17.160 --> 0:42:18.319 Do you always trust the data? 0:42:19.080 --> 0:42:19.120 No? 0:42:19.760 --> 0:42:21.719 No, not at all. I mean there is, I mean 0:42:21.800 --> 0:42:24.440 there were no, but there is. 0:42:25.120 --> 0:42:27.680 Calling out individual countries specifically or feel free. 0:42:27.560 --> 0:42:29.279 To Yeah, I mean that there are. 0:42:29.719 --> 0:42:32.279 Can they can talk about the past even the developed markets, right, 0:42:32.360 --> 0:42:34.359 we questioned some of the There. 0:42:34.320 --> 0:42:37.720 Are two examples that very well known and it's Greece 0:42:38.280 --> 0:42:41.200 and also Argentina at some point in the past, and 0:42:41.520 --> 0:42:46.000 there was about the inflation CPI, which is very well documented. 0:42:46.480 --> 0:42:48.920 So the the good thing is that there is a 0:42:49.280 --> 0:42:52.680 trusted community that would call out those misbehavior. 0:42:53.640 --> 0:42:57.440 There's also a misunderstanding sometimes there is not one choose 0:42:57.560 --> 0:42:59.880 in the data that is not It's not chous. It's 0:43:00.040 --> 0:43:00.840 what's important is. 0:43:01.239 --> 0:43:04.239 You make it very clear that you buy to statistical 0:43:04.320 --> 0:43:07.120 standards and that the data is sort of produced with 0:43:07.200 --> 0:43:09.359 a certain quality standards, and you make it very open 0:43:09.560 --> 0:43:11.960 and then you can start a debate about it, which 0:43:12.040 --> 0:43:15.680 is really more fascinating than you sometimes tend to believe. 0:43:15.800 --> 0:43:17.680 I know, for my daughter christ you don't work with 0:43:17.760 --> 0:43:23.040 you guys in gender? Why gender versus healthcare versus employment 0:43:23.239 --> 0:43:26.680 versus financing or how do you choose where you want 0:43:26.719 --> 0:43:29.240 to focus on how does that or is that determined 0:43:29.239 --> 0:43:31.840 by the money that comes in in somebody's interest, or 0:43:32.120 --> 0:43:34.280 how do you figure because there's so many probably different ways. 0:43:34.120 --> 0:43:34.400 You could go. 0:43:35.040 --> 0:43:39.279 Absolutely, I mean the demand is immense. I think many 0:43:39.360 --> 0:43:43.120 of the questions around gender are underpinning every other sector. 0:43:43.200 --> 0:43:45.520 If you look at development, we look often at sectors, 0:43:45.560 --> 0:43:47.480 we look at agriculture, we look at health, we look 0:43:47.480 --> 0:43:50.560 at education. If you try to improve all those sectors, 0:43:50.600 --> 0:43:54.920 and the SDGs have seventeen different quote unquote sectors, gender 0:43:55.040 --> 0:43:57.520 is underpinning everything. I mean in terms of if you 0:43:57.600 --> 0:44:01.080 invest in good investment in gender statists, which could be 0:44:01.200 --> 0:44:05.279 I mean sex disaggregated data, but also access to gender 0:44:05.360 --> 0:44:09.080 based violence, which is important to document as well. 0:44:09.440 --> 0:44:11.440 So it's underpinning all other sectors. 0:44:11.480 --> 0:44:13.560 And what you ought to probably have talked about quite 0:44:13.560 --> 0:44:16.680 a lot in the show is about the economic benefit 0:44:17.239 --> 0:44:21.320 to use the potential of women's empowerment, in particular for instance, 0:44:21.360 --> 0:44:26.080 to access to ownership rights of resources, land, credit, insurance. 0:44:26.440 --> 0:44:29.239 So once you unlock this potential, once you have an 0:44:29.239 --> 0:44:33.239 opportunity and you know how many women have access to 0:44:33.360 --> 0:44:35.880 land and what kind of land and credit and education, 0:44:36.320 --> 0:44:38.919 this will help you to make targeted investment and which 0:44:39.000 --> 0:44:42.400 helps for all other sectors. So it's a huge multiplier effect. 0:44:42.960 --> 0:44:46.279 Next to there's an intrinsic value that women and men 0:44:46.320 --> 0:44:47.320 should be treated equally. 0:44:47.800 --> 0:44:50.560 Okay, what about when it comes to data collection and 0:44:50.840 --> 0:44:53.719 how different countries are collecting data? Are you seeing you know, 0:44:53.800 --> 0:44:56.480 in terms of developing countries where they don't necessarily have 0:44:56.560 --> 0:45:00.880 the infrastructure built in. Are you seeing them in technologies 0:45:00.920 --> 0:45:04.040 that are so called lead frogging technologies that allow them 0:45:04.120 --> 0:45:07.040 to sort of bypass the big infrastructure investments that were 0:45:07.320 --> 0:45:09.520 made in the past. And I'm thinking, like, you know, 0:45:10.320 --> 0:45:14.279 ways to provide internet to folks without wireline broadband, you know, 0:45:14.360 --> 0:45:17.560 without actually digging holes, using satellites, being able to use 0:45:17.640 --> 0:45:20.960 data collection instead of launching satellites, use drones for example. 0:45:21.440 --> 0:45:25.080 This is happening and I'm personally I collected myself when 0:45:25.080 --> 0:45:28.000 I did my master's thesis. I went to a couple 0:45:28.080 --> 0:45:30.680 of countries and collected data from my own seasons. So 0:45:31.040 --> 0:45:33.600 I was working with national statistical offices and we had 0:45:33.719 --> 0:45:36.399 these paper forms. So you went with a paper form 0:45:36.480 --> 0:45:38.960 with a questionnaire and you asked all these questions and. 0:45:38.960 --> 0:45:40.640 Then you went back and then you had to type 0:45:40.680 --> 0:45:44.000 it in. I have seen statistical office packed with lots 0:45:44.080 --> 0:45:49.480 of paper and it looks like in your office. Moreness anyway, So. 0:45:51.680 --> 0:45:55.920 This is changing now using mobile phones and copies and 0:45:56.040 --> 0:45:59.920 and and different forms of basically collecting the data electronic. 0:46:00.480 --> 0:46:02.919 And this is happening even in poor countries, so there 0:46:03.000 --> 0:46:05.000 are technolog You said it very nicely. 0:46:05.080 --> 0:46:07.360 You said, this leap frogging is happening. I mean we 0:46:07.480 --> 0:46:08.200 are not seeing. 0:46:08.520 --> 0:46:11.239 We also work at the OECD with of course rich 0:46:11.920 --> 0:46:15.360 country statistical offices, and you can really see the difference 0:46:15.440 --> 0:46:18.520 of how national Statistical office in particular in these middle 0:46:18.560 --> 0:46:24.359 income categories like Philippines eventually Ghana, Columbia, how they jump 0:46:24.520 --> 0:46:27.879 over this and how they change the infrastructure and through 0:46:28.440 --> 0:46:30.600 very different forms of using modern technologies. 0:46:30.640 --> 0:46:32.799 And this is really how very very nice to see. 0:46:32.960 --> 0:46:34.879 Well, I know in our prop call I said, you're 0:46:34.920 --> 0:46:36.960 kind of open able window is something that we are 0:46:37.080 --> 0:46:39.080 not necessarily aware of and we just take for granted 0:46:39.080 --> 0:46:41.600 that there's so much data everywhere. So this was really enlightening. 0:46:41.640 --> 0:46:43.239 Thank you so much, Thank you so much. 0:46:43.320 --> 0:46:46.400 Safe time to be here, so enjoyed it. Johannes Shutin, 0:46:46.680 --> 0:46:49.760 his executive head of the partnership in Statistics for Development 0:46:49.840 --> 0:46:52.600 in the twenty first century aka Paris twenty one. This 0:46:52.680 --> 0:46:53.200 is start. 0:46:54.560 --> 0:46:58.080 You're listening to the Bloomberg Business Week podcast. Catch us 0:46:58.160 --> 0:47:02.080 live weekday afternoons from three six Eastern Listen on Bloomberg 0:47:02.120 --> 0:47:05.560 dot com, the iHeartRadio app and the Bloomberg Business App, 0:47:05.880 --> 0:47:07.520 or watch us live on YouTube. 0:47:08.480 --> 0:47:10.400 This next voice is going to sound familiar because we 0:47:10.480 --> 0:47:12.520 caught up with him at the Milkin Institute Global Conference 0:47:12.560 --> 0:47:14.560 earlier this year. So great to have back with us 0:47:14.640 --> 0:47:17.440 in studio. Hans Kobler. He's found her managing partner of 0:47:17.640 --> 0:47:20.800 Energy Impact Partners. They have about three billion in assets 0:47:20.880 --> 0:47:23.600 under management. They invest in clean energy technologies and they 0:47:23.680 --> 0:47:27.840 help deploy them through partnerships with companies trying to decarbonize. 0:47:28.040 --> 0:47:30.040 He is in town for Climate Week, and as I said, 0:47:30.040 --> 0:47:31.960 he's here in our Bloomberg Interactive Broker Student and I 0:47:32.320 --> 0:47:33.560 have you here with him and myself. 0:47:33.680 --> 0:47:34.279 Great being here. 0:47:34.440 --> 0:47:35.960 Welcome back. Come on close to the mic because you 0:47:36.000 --> 0:47:39.640 want to make sure we can hear you the energy transition. 0:47:39.960 --> 0:47:41.279 Let's start basic. How's it going. 0:47:41.680 --> 0:47:44.120 It's going well, it's picking up momentum. We had the 0:47:44.160 --> 0:47:47.560 first year in history that more money will spent on 0:47:47.600 --> 0:47:50.480 the energy transition than on traditional energy one point one trillion. 0:47:50.560 --> 0:47:52.759 So the momentum misbuilding. 0:47:52.400 --> 0:47:53.080 A tipping point. 0:47:53.520 --> 0:47:56.359 It's a tipping point, it's but it's the beginning. It's 0:47:56.360 --> 0:47:59.080 the first inning of a long, long race. You know, 0:47:59.160 --> 0:48:01.440 if you believe McKay and some forecast, we will need 0:48:01.600 --> 0:48:04.160 eight nine trillion dollars a year one hundred and fifty trillion. 0:48:04.560 --> 0:48:07.080 That's fifteen internets or one and a half times a 0:48:07.120 --> 0:48:09.520 global economy. Spend there in the next few decades a lot. 0:48:09.960 --> 0:48:12.560 That's a lot, and we may or we may not 0:48:12.640 --> 0:48:15.440 get there, but we are taking it serious. So it's 0:48:15.520 --> 0:48:16.360 picking up momentum. 0:48:16.840 --> 0:48:18.600 Well, one thing that I think about when it comes 0:48:18.640 --> 0:48:21.120 to the energy transition is the role of nuclear power. 0:48:21.560 --> 0:48:25.240 And here in the US it's a really checkered history. 0:48:25.320 --> 0:48:27.560 It's a really checkered past. It's very expensive for US 0:48:27.600 --> 0:48:31.040 to build nuclear power plants. They're always cost overruns, and 0:48:31.120 --> 0:48:34.400 then you have the legacy of Fukushima, three Mile Island 0:48:34.440 --> 0:48:35.040 in Chernobyl. 0:48:35.160 --> 0:48:38.480 What are your thoughts on nuclear I think so we 0:48:39.200 --> 0:48:42.040 have a lot of corporate partners in our investor group. 0:48:42.120 --> 0:48:44.279 The Southern Company was the last one here to try 0:48:44.360 --> 0:48:47.480 to build a nuclear pend that finally got them all online. 0:48:47.160 --> 0:48:47.799 Which is great. 0:48:48.760 --> 0:48:51.920 We have edf as an investor that had fifty five 0:48:52.040 --> 0:48:53.920 in the country running and half of them didn't work. 0:48:54.160 --> 0:48:58.360 They when they shut down the Russian gas and Tepko 0:48:58.480 --> 0:49:03.359 was an investor too, so nuclear. You know, the clean 0:49:03.560 --> 0:49:07.560 energy transition is amazing and a lot will be winded solar, 0:49:07.600 --> 0:49:10.680 but you need the baseload and nuclear is still the 0:49:11.239 --> 0:49:13.080 best way to get to the baseload. So I think 0:49:13.080 --> 0:49:16.040 it's critical to keep that in the arsenal. I'm from 0:49:16.080 --> 0:49:18.680 Germany originally. I think you can tell tell the accent. 0:49:18.840 --> 0:49:21.759 You know, the probably the greenest country that has most 0:49:21.800 --> 0:49:25.960 ambitions to go clean. They spend a tonne and they 0:49:26.000 --> 0:49:26.920 shut down there, which is. 0:49:26.920 --> 0:49:30.360 A stupid thing to do. It's I mean, is this reversible? 0:49:31.520 --> 0:49:32.200 Yeah, but it's hard. 0:49:32.360 --> 0:49:33.239 It's hard. 0:49:33.239 --> 0:49:35.479 Once you shut down an industry, you have to build 0:49:35.560 --> 0:49:40.120 up the talent to build new to build new nuclear plants. 0:49:40.120 --> 0:49:43.200 You can, but I guess, can we transition to net 0:49:43.280 --> 0:49:44.160 zero without nuclear? 0:49:44.280 --> 0:49:44.400 Right? 0:49:44.520 --> 0:49:45.040 How crucial? 0:49:45.120 --> 0:49:45.600 Is it hard? 0:49:46.320 --> 0:49:50.640 The transition to net zero is not only converting what 0:49:50.800 --> 0:49:54.160 we have today, but to deal with the demand that 0:49:54.239 --> 0:49:57.600 we are facing. We have had a flat demand curve 0:49:57.640 --> 0:50:02.319 in this country for twenty years. We are now electrifying transportation. 0:50:02.800 --> 0:50:06.800 We're building data centers running on AI where one Google search, 0:50:08.000 --> 0:50:10.680 where one AI search is taking about fifty two hundred 0:50:10.680 --> 0:50:15.080 times more power than a Google search. So you're talking 0:50:15.080 --> 0:50:19.160 about doubling the infrastructure that we've built over one hundred years. 0:50:19.600 --> 0:50:21.000 You know, Musk is out there saying no, no, no, 0:50:21.640 --> 0:50:23.640 whatever you are calculated, it's going to be tripled. 0:50:23.680 --> 0:50:24.560 So you need a lot of. 0:50:24.560 --> 0:50:27.560 Electrons and so there is not one solution for that. 0:50:27.719 --> 0:50:30.680 That means we have to use different tools in the 0:50:30.760 --> 0:50:33.359 toolkit to get there and get there a lot faster 0:50:33.480 --> 0:50:34.000 than we have been. 0:50:34.960 --> 0:50:39.920 But can we do it this energy transformation without nuclear? 0:50:41.920 --> 0:50:43.800 Yes, but I think it would be a lot cheaper 0:50:44.120 --> 0:50:46.160 if we did it with nuclear. And at the end 0:50:46.160 --> 0:50:48.040 of the day, you know, we have to address something 0:50:48.080 --> 0:50:50.680 that we call in the industry trial emma. Everyone wants 0:50:50.760 --> 0:50:55.040 to go clean, but but when you face not having 0:50:55.120 --> 0:50:59.880 power at all, security reliability gets on the on the horizon. 0:51:00.560 --> 0:51:03.160 And when the Germans pay twelve times more for natural 0:51:03.239 --> 0:51:06.120 gas than the Americans and four times more for electricity, 0:51:06.160 --> 0:51:09.080 then affordability comes in right. So that's an equation. This 0:51:09.280 --> 0:51:11.520 trilemma is an equation very difficult. 0:51:11.200 --> 0:51:14.160 But also motivation perhaps to invest in renewable sources that 0:51:14.320 --> 0:51:15.600 in the long run are less expensive. 0:51:15.680 --> 0:51:18.239 Absolutely, but in a way in our view, the only 0:51:18.320 --> 0:51:21.400 way to solve that equation of this trilemma is to 0:51:21.560 --> 0:51:25.480 really to apply innovation. That means you need new technologies, 0:51:25.520 --> 0:51:29.120 great technologies, and you need to collaborate. You need to 0:51:29.480 --> 0:51:34.960 involve the incumbents. The existing infrastructure sits on, sit on 0:51:35.080 --> 0:51:38.000 trillions of dollars of investments that we have to help 0:51:38.080 --> 0:51:40.040 them get there faster. That's, by the way, it's a 0:51:40.080 --> 0:51:42.080 business model that we have where we team up with 0:51:42.200 --> 0:51:45.600 corporates and bring them together in a room with the 0:51:45.680 --> 0:51:49.040 innovators and the capital to forge those alliances to accelerate 0:51:49.120 --> 0:51:54.319 that transition. It's look, everybody wants to see the rosy sky, 0:51:54.480 --> 0:51:56.640 but you've got to be pragmatic about it. And that 0:51:56.840 --> 0:51:59.640 means that means we got to work together and work 0:51:59.719 --> 0:52:00.920 fast and harder than. 0:52:00.880 --> 0:52:01.520 We have in the past. 0:52:01.640 --> 0:52:04.440 So when you have those conversations and those collaborations, what 0:52:04.680 --> 0:52:07.560 is it that you speak most about. Tim brought up 0:52:07.640 --> 0:52:09.640 nuclear right, and we feel like it has become such 0:52:09.640 --> 0:52:12.560 a no no is it nuclear, is it hydro, is 0:52:12.600 --> 0:52:13.080 it solar? 0:52:13.239 --> 0:52:13.400 Is it? 0:52:13.920 --> 0:52:13.960 Like? 0:52:14.080 --> 0:52:16.239 What is it that you guys spend a lot of 0:52:16.280 --> 0:52:17.520 time talking about with your partners? 0:52:17.760 --> 0:52:22.080 Yeah, yes, yeah, yeah, yes. So it is a complex undertaking. 0:52:22.120 --> 0:52:24.920 We need to decarbonize supply, We need to create a 0:52:24.960 --> 0:52:27.480 lot more supplies. So that's one Folcus there. The second 0:52:27.520 --> 0:52:30.839 one is we need to create sustainable demand. That means 0:52:30.920 --> 0:52:35.720 electrifying a lot of the industries, from transportation to home heating, 0:52:35.960 --> 0:52:39.200 to the data centers, indoor agriculture. And then you have 0:52:39.280 --> 0:52:41.920 to deal with the high intermittency you create. So I 0:52:42.040 --> 0:52:44.600 was just telling you it's two to three times more 0:52:44.800 --> 0:52:47.719 power that we need, but at its peak it could 0:52:47.760 --> 0:52:49.640 be five times as much. You know, it's like building 0:52:49.920 --> 0:52:52.880 a church for Easter Sunday, and we've got to somehow 0:52:52.920 --> 0:52:55.279 we have to balance that, and that means you have 0:52:55.360 --> 0:52:57.920 to invest in transmission distribution, which is very difficult. 0:52:58.040 --> 0:52:58.200 Right. 0:52:58.320 --> 0:53:01.040 It took fifteen years to get the clean electrons from 0:53:01.120 --> 0:53:03.640 Canada through two of the greenest states to New York. 0:53:03.640 --> 0:53:06.880 Because nobody wants to build anything in their backyard. You 0:53:07.000 --> 0:53:09.200 build storage and great technologies are coming up. You an 0:53:09.200 --> 0:53:11.239 investor in form you investor in power and so, but 0:53:11.400 --> 0:53:14.560 that's a lot of space that is needed. Takes some time, 0:53:15.239 --> 0:53:19.800 or you digitize the communication between the customer and the 0:53:19.920 --> 0:53:22.000 supply and you tell them, look, don't charge your car 0:53:22.040 --> 0:53:24.520 at six o'clock to it at midnight. It turned down. 0:53:25.120 --> 0:53:25.840 It's nice. 0:53:27.560 --> 0:53:27.719 Years. 0:53:27.800 --> 0:53:29.880 Just don't cool right now because everybody's cooling. 0:53:30.000 --> 0:53:32.200 Can I ask you, is only about thirty seconds left here? 0:53:32.320 --> 0:53:36.400 Would you invest in a fossil fuel energy company? No, 0:53:36.400 --> 0:53:39.000 oil and gas company? No, you wouldn't anymore. 0:53:39.320 --> 0:53:42.000 No, even though there's going to be doing for some people. 0:53:42.120 --> 0:53:44.920 You know, look, we need certainly natural gas form. 0:53:45.000 --> 0:53:46.359 I know you're kind of talking your book because that's 0:53:46.360 --> 0:53:46.680 the way we. 0:53:46.880 --> 0:53:49.400 Need natural gas for a long long time. But we 0:53:49.600 --> 0:53:52.400 personally would not invest. We are fun focused on you know. 0:53:52.440 --> 0:53:56.000 We are an Article nine fund. We invest in things 0:53:56.040 --> 0:53:57.480 that decarbonize the globally. 0:53:57.640 --> 0:53:59.000 But if you weren't, would you, if. 0:53:58.880 --> 0:54:00.640 I was a financial investor, would Okay? 0:54:00.920 --> 0:54:04.200 All right, love having you come here, always provocative. I 0:54:04.239 --> 0:54:04.920 always learned something. 0:54:05.000 --> 0:54:06.760 Come back soon, yeah, well do Hans. 0:54:06.600 --> 0:54:08.760 Kobler, he's founding Do you took a founder of managing 0:54:08.800 --> 0:54:16.120 partner Energy Impact Partners? Here in our studio, you're. 0:54:16.000 --> 0:54:19.560 Listening to the Bloomberg Business Week Podcast. Catch us live 0:54:19.680 --> 0:54:23.319 weekday afternoons from three to six Eastern on Bloomberg Radio, 0:54:23.560 --> 0:54:26.439 the Bloomberg Business app, and you too. You can also 0:54:26.560 --> 0:54:30.040 listen live on Amazon Alexa from our flagship New York station, 0:54:30.480 --> 0:54:33.240 Just say Alexa play Bloomberg eleven thirty. 0:54:36.840 --> 0:54:44.440 Get all right, Well, there is definitely working in a 0:54:44.520 --> 0:54:47.160 coal mine, and if you think about our history, right, 0:54:47.560 --> 0:54:48.560 not good conditions. 0:54:49.320 --> 0:54:52.920 Yeah, and there's also working low wag low wage retail 0:54:53.000 --> 0:54:54.960 jobs here in the United States in twenty twenty. 0:54:54.800 --> 0:54:56.400 Three, Carol mean, like at a dollar General. 0:54:56.480 --> 0:54:57.719 That's exactly what I'm talking about. 0:54:57.800 --> 0:54:59.640 Yeah, maybe not exactly like working in a coal mine. 0:54:59.680 --> 0:55:02.080 But yeah, wait until we get into the story. Because 0:55:02.520 --> 0:55:06.279 ck based on this week's Bloomberg Business Week cover story, 0:55:06.280 --> 0:55:08.600 it also happens to be today's Bloomberg Big Take. You 0:55:08.680 --> 0:55:12.440 will find things like rat infestations, blocked fire exits, expired 0:55:12.520 --> 0:55:16.120 kids food, macheti wielding, and watermelon throwing shoppers. It sounds funny, 0:55:16.120 --> 0:55:18.480 but it's really not a lot of nightmares at the 0:55:18.520 --> 0:55:20.600 biggest dollar chained tim in the United States. 0:55:20.760 --> 0:55:23.360 With more on the story, which is reported out by Bloomberg, 0:55:23.440 --> 0:55:26.560 Josh Eedelson, and Brendan Case. Let's bring in Brandon, Bloomberg 0:55:26.600 --> 0:55:29.080 News US retail reporter joining us on zoom in our 0:55:29.160 --> 0:55:31.879 Dallas bureau along with the editor of Bloomberg Business Week, 0:55:31.960 --> 0:55:34.960 Joel Weber here in our Bloomberg Interactive Broker's studio. The story, 0:55:35.000 --> 0:55:36.960 by the way, it is in the new issue of 0:55:36.960 --> 0:55:39.400 Bloomberg Business a week. It's available on newstands tomorrow. You 0:55:39.480 --> 0:55:41.239 can already read it though on the Bloomberg Terminal and 0:55:41.280 --> 0:55:43.520 at Bloomberg dot com Slash BusinessWeek one of the most 0:55:43.560 --> 0:55:47.400 read stories on the Bloomberg terminal today. Joel, this is 0:55:47.440 --> 0:55:51.600 a deeply reported story with disturbing anecdote after disturbing anecdote. 0:55:51.920 --> 0:55:53.320 How does something like this come together? 0:55:53.480 --> 0:55:56.840 Who knew that a story, a story like this that 0:55:57.080 --> 0:56:01.759 has really changed a lot of American shop I think 0:56:02.520 --> 0:56:05.040 I had this signed to it, and so one of 0:56:05.080 --> 0:56:08.080 the things that struck me about it is that we've 0:56:08.160 --> 0:56:11.399 talked I think for generation now about you know, how 0:56:11.440 --> 0:56:14.320 big of a presence Walmart has had in America, and 0:56:14.440 --> 0:56:16.920 it actually is like the story that Walmart sort of 0:56:17.880 --> 0:56:21.239 I think, you know, propelled into America for like these 0:56:21.280 --> 0:56:26.640 big box stores and changing small town America Dollar General 0:56:26.719 --> 0:56:29.600 has actually taken a lot of that farther now. The 0:56:29.680 --> 0:56:32.520 stores have a much, much, much smaller footprint, which we 0:56:32.600 --> 0:56:36.200 described in the store in the story. The price points 0:56:36.280 --> 0:56:40.640 are amazingly affordable and seemingly inflation proof. As we also 0:56:40.719 --> 0:56:44.719 point out in the story. The cost of all of this, though, 0:56:44.920 --> 0:56:49.360 is that it turns out to be a really troubling 0:56:49.440 --> 0:56:52.480 place to work and the people who actually work in 0:56:52.560 --> 0:56:56.759 the stores a retail job. Wow, the stuff that they've 0:56:56.880 --> 0:57:01.239 gone through. So Brendan Josh Unilson, but was the lead 0:57:01.239 --> 0:57:04.600 writer on this Brendan case also intimately familiar with it. Brendan, 0:57:04.680 --> 0:57:08.759 what was the what was the reporting tidbit that made 0:57:08.800 --> 0:57:10.880 you made you and Josh just really want to dig 0:57:10.960 --> 0:57:11.200 into this. 0:57:11.600 --> 0:57:13.960 There were a couple of things, and one of them 0:57:14.280 --> 0:57:16.920 was what we say at the very beginning of the story, 0:57:17.040 --> 0:57:19.520 which was that if you look at a lot of 0:57:19.640 --> 0:57:24.560 the fines that the Labor Department, through OSHA, has levied 0:57:24.600 --> 0:57:27.160 against Dollar General, one of the things that keeps coming 0:57:27.240 --> 0:57:30.480 up over and over again is blocked exits, which obviously 0:57:31.360 --> 0:57:34.120 matters a lot to OSHA. It harks back to the 0:57:34.440 --> 0:57:38.280 Triangle shirtwaist factory fire in New York the thing that. 0:57:38.720 --> 0:57:42.080 One thing that surprised us was talking with an employee 0:57:42.320 --> 0:57:45.960 in New Orleans who said that in his case, the 0:57:46.000 --> 0:57:48.560 blocked exits were no accident. In fact, a manager had 0:57:48.600 --> 0:57:51.920 told him to purposely block exits to try to cut 0:57:51.960 --> 0:57:53.640 down on shoplifting make it harder to get out of 0:57:53.640 --> 0:57:54.000 the store. 0:57:55.080 --> 0:57:55.720 That was one thing. 0:57:55.800 --> 0:58:00.200 Another thing that jumped out was just the lack of 0:58:01.720 --> 0:58:04.400 you know, heating and air conditioning. And we talked with 0:58:04.520 --> 0:58:08.200 people who had put ice packs down their pants when 0:58:08.240 --> 0:58:12.280 it got hot, wore you know, multiple coats and layers 0:58:12.440 --> 0:58:16.880 when it got cold, and one regional manager who you know, 0:58:17.000 --> 0:58:18.760 was fairly high up in the company who told us 0:58:18.840 --> 0:58:21.920 that she was just really shocked by how difficult it 0:58:22.120 --> 0:58:26.880 was to get to get funding for basic maintenance, basic upkeep. 0:58:27.440 --> 0:58:29.880 On top of all that, there's this sense that Dollar 0:58:30.000 --> 0:58:33.680 General has just been in this incredible growth strategy. So 0:58:33.840 --> 0:58:36.600 talk about how it's kind of swept the country a 0:58:36.600 --> 0:58:36.960 little bit. 0:58:37.000 --> 0:58:39.400 Brendan, Yeah, and it's really it's really amazing how fast 0:58:39.440 --> 0:58:42.200 it's grown. To your point, it's a little bit sort 0:58:42.240 --> 0:58:44.200 of a creature of the Walmart era. You know, Walmart 0:58:44.280 --> 0:58:46.960 comes in and it wipes out a lot of retailers 0:58:47.000 --> 0:58:50.400 across the country and leaves a landscape that if you're 0:58:50.440 --> 0:58:53.800 not close to a Walmart or have a easy access 0:58:53.840 --> 0:58:56.520 to a car, you might not have as many retailers 0:58:56.640 --> 0:58:59.360 that you know as you had before. And so in 0:58:59.600 --> 0:59:04.600 Swoop Dollar General and many of its rivals, and you know, 0:59:04.760 --> 0:59:07.760 opens up stores to the tune of typically you know, 0:59:07.840 --> 0:59:10.520 one thousand a year, and so you know, they've got 0:59:10.720 --> 0:59:14.440 more than nineteen thousand locations around the country right now. 0:59:14.880 --> 0:59:17.760 You compare that with a little more than five thousand 0:59:17.880 --> 0:59:21.840 for Walmart, including the Sam's Club locations, and you start 0:59:21.920 --> 0:59:25.040 to get a sense of how ubiqulus it is, especially 0:59:25.160 --> 0:59:28.920 in smaller towns. About about eighty percent of its stores 0:59:29.040 --> 0:59:32.360 are in towns of twenty thousand people or fewer. And 0:59:32.880 --> 0:59:35.960 you know, if you if you drive through you know, 0:59:36.080 --> 0:59:40.080 through the countryside in many states, particularly the Southeast, but 0:59:40.280 --> 0:59:42.520 in many other parts of the country as well, you'll see, 0:59:42.920 --> 0:59:44.000 you know, store after store. 0:59:44.480 --> 0:59:47.919 We talked about the block fire exits. Can we also 0:59:48.000 --> 0:59:50.760 talk about the Bagwana because there's some of that in 0:59:50.840 --> 0:59:51.800 the story, Brendan. 0:59:51.880 --> 0:59:53.640 Saying since he came in the state House. 0:59:53.600 --> 0:59:58.040 I was waiting to do that transition there. How crazy 0:59:58.480 --> 1:00:00.840 are some of the reporting details that you found. 1:00:01.400 --> 1:00:05.640 Yeah, you know, the the issue of animals getting into 1:00:05.680 --> 1:00:11.280 the stores and befouling the merchandise is something that also 1:00:11.480 --> 1:00:15.160 came up over and over again. You know, there was 1:00:15.320 --> 1:00:20.480 one there was one case in Oklahoma where birds got 1:00:20.560 --> 1:00:24.320 in and you know, used sections of the store as 1:00:25.000 --> 1:00:28.080 you know, as a as a bathroom. And the store 1:00:28.160 --> 1:00:31.280 manager there told us that he was told to just 1:00:31.680 --> 1:00:34.600 take the merchandise home, wash it in your washing machine 1:00:34.600 --> 1:00:36.640 if you have to, and bring it back and put 1:00:36.680 --> 1:00:37.600 it back on the shelves. 1:00:38.960 --> 1:00:39.080 You know. 1:00:39.160 --> 1:00:44.200 There was another another instance in which there was an 1:00:44.280 --> 1:00:49.000 Iowa store there was a worry about asbestos, but after inspection, 1:00:50.080 --> 1:00:54.400 you know, some state inspectors found out that it wasn't asbestos. 1:00:54.480 --> 1:00:57.240 That was the good news. The bad news was that 1:00:57.360 --> 1:01:00.680 it was stained from bad feces. I mean, this is 1:01:00.720 --> 1:01:01.439 all over a wall. 1:01:01.720 --> 1:01:06.280 It's pages and pages of disturbing anecdotes, but disturbing experiences 1:01:06.360 --> 1:01:08.439 that employees have had. I mean, one thing that really 1:01:08.480 --> 1:01:11.240 stuck out to me was the employee who you know, 1:01:11.360 --> 1:01:13.760 there's one employee in the store. The employee asking a 1:01:13.840 --> 1:01:17.400 customer to watch the store, well, he or she went 1:01:17.440 --> 1:01:19.560 to the bathroom I mean, the thing that I was 1:01:19.640 --> 1:01:25.720 thinking through throughout this piece is is that this is 1:01:25.840 --> 1:01:31.720 working for Dollar General. They're making a calculation that they 1:01:31.760 --> 1:01:36.680 can allow their stores to reach this condition, pay their 1:01:36.680 --> 1:01:40.480 employees this wage, have this few of employees in a 1:01:40.560 --> 1:01:44.280 single store because it's worked, especially over the past five years. 1:01:44.840 --> 1:01:47.919 Yeah, it's really worked for a long time, and they've had, 1:01:48.240 --> 1:01:51.280 you know, from a financial standpoint, a really strong record 1:01:51.480 --> 1:01:55.080 of sales increases and profit increases. One thing they're good 1:01:55.080 --> 1:01:57.320 at doing this is not true of all retailers, is 1:01:57.400 --> 1:02:01.040 opening new stores and fairly immediately having them contribute to 1:02:01.120 --> 1:02:05.120 the to the bottom line. This year has been a 1:02:05.240 --> 1:02:07.960 different story for for for Dollar General, at least from 1:02:08.000 --> 1:02:11.120 a stock market perspective, where the shares have come way down. 1:02:11.560 --> 1:02:13.800 They've cut the profit forecast a couple of times. One 1:02:13.840 --> 1:02:16.600 of the big problems, obviously, is just the financial precors 1:02:16.680 --> 1:02:19.720 on on their customer base, which skews towards the lower 1:02:19.800 --> 1:02:24.600 income UH end of the spectrum. They have said, however, 1:02:25.200 --> 1:02:29.160 that they're going to spend more on labor UH and 1:02:29.480 --> 1:02:31.520 and that's at least, you know, that's that's certainly an 1:02:31.560 --> 1:02:37.120 acknowledgment that the store conditions are not where they want them, uh, 1:02:37.360 --> 1:02:39.880 and that they're they're they're they're not to spend money 1:02:40.000 --> 1:02:42.680 to try to improve things this year. Another thing that's 1:02:42.720 --> 1:02:45.760 driving that I think is just a stepped up competitive threat. 1:02:45.840 --> 1:02:48.280 For years, Dollar General was known as, you know, the 1:02:48.320 --> 1:02:53.160 big successful dollar store chain. Dollar Tree, its closest rival, 1:02:53.280 --> 1:02:56.240 was sort of an also ran. That company is in 1:02:56.240 --> 1:02:59.000 the middle of a turnaround and so you know, seems 1:02:59.040 --> 1:03:02.720 to be becoming a stronger competitor. And then you've got Walmart, 1:03:02.880 --> 1:03:05.920 which lost some ground to the dollar stores in the 1:03:06.040 --> 1:03:09.880 wake of the Great Recession. Really doesn't want that to 1:03:09.960 --> 1:03:13.400 happen again if the economy slows down and is rolling 1:03:13.440 --> 1:03:16.040 out a lot of initiatives, whether it's you know, pricing 1:03:16.320 --> 1:03:19.040 or delivery services that are designed to sort of counter 1:03:20.080 --> 1:03:21.400 competition on the lower end. 1:03:21.800 --> 1:03:25.400 Hey, Brendan, and the stock, as you said, down more 1:03:25.440 --> 1:03:27.840 than fifty percent this year, you know, trading at a 1:03:27.880 --> 1:03:31.400 fifty two week low. What does the company say about. 1:03:31.160 --> 1:03:31.480 All of this. 1:03:32.280 --> 1:03:35.920 They reported earnings a couple weeks ago and you know, 1:03:36.000 --> 1:03:41.960 again cut their profit forecast. And interestingly, they had initially 1:03:42.000 --> 1:03:44.000 said that we're going to spend an extra one hundred 1:03:44.040 --> 1:03:49.000 million dollars on labor this year. They moved that number 1:03:49.080 --> 1:03:52.840 up to one hundred and fifty million last month, so 1:03:53.040 --> 1:03:56.840 clearly engaging with the idea that for their own customers, 1:03:56.920 --> 1:03:59.920 their own workers. You know, there are some things that 1:04:00.080 --> 1:04:04.120 are falling short right now. Whether that's enough remains a 1:04:04.200 --> 1:04:05.080 big question mark. 1:04:05.240 --> 1:04:06.760 But what I mean, but what I mean about all 1:04:06.800 --> 1:04:08.800 these specific things, I mean, this is pretty gross for 1:04:08.920 --> 1:04:12.040 workers and unsafe for workers. And you know, we talked 1:04:12.080 --> 1:04:16.320 about the New Orleans worker who were blocking you know, 1:04:16.440 --> 1:04:19.800 the fire exits, and there was a fire. Unfortunately nobody 1:04:19.960 --> 1:04:23.400 was there. But this stuff continues, and I'm curious that 1:04:23.480 --> 1:04:25.520 the company addressed any of these specifics. 1:04:26.200 --> 1:04:30.800 The company told us in a pretty we we sent 1:04:30.920 --> 1:04:33.080 them a very detailed inquiry. They got back to us 1:04:33.240 --> 1:04:38.080 with with with a significant reply that that, you know, 1:04:38.240 --> 1:04:42.080 repeated things they've said in the past which have to 1:04:42.160 --> 1:04:46.480 do with them saying that they want to provide stores 1:04:46.600 --> 1:04:49.160 that are safe to work in, they want to provide 1:04:49.200 --> 1:04:52.800 opportunity for their workers. I think that a lot of 1:04:52.880 --> 1:04:56.400 the details and the story show the ways in which 1:04:57.560 --> 1:05:01.640 they've come up short in those those goals. The extra 1:05:01.760 --> 1:05:08.080 investment they're making suggests that you know, they they they 1:05:08.560 --> 1:05:11.400 you know, they're sort of acknowledging some of the shortcomings, 1:05:12.520 --> 1:05:15.680 but again, you know, like whether that turns out to 1:05:15.760 --> 1:05:18.480 be enough to really kind of turn things around. I 1:05:18.520 --> 1:05:21.440 think the proof will be in the putting and this is. 1:05:21.480 --> 1:05:24.120 In the story, but it really does kind of culminate 1:05:24.160 --> 1:05:28.440 with a shareholder meeting where employees really did get their attention. 1:05:28.680 --> 1:05:32.160 So we'll see where that leads. I do think, you know, Brendan, 1:05:32.400 --> 1:05:36.000 when you just look at the incredible performance that the 1:05:36.720 --> 1:05:39.720 company has had on the stock market really until this year, 1:05:40.280 --> 1:05:43.800 what's happened? Because you would think, like, with the economy 1:05:43.840 --> 1:05:46.400 being where it is, inflation being where it is, this 1:05:46.560 --> 1:05:50.360 looks like a pretty good value proposition to an American consumer. 1:05:50.560 --> 1:05:52.720 And yet you know, you look at that share price 1:05:52.800 --> 1:05:55.720 and it's like, you know, the ceiling of bat Iguano 1:05:55.880 --> 1:05:58.920 fell apart and everything fell apart. What's happened? 1:05:59.160 --> 1:06:02.960 I pointed to say. And one of them is tougher competition. 1:06:03.280 --> 1:06:05.720 I think Dollar Tree, you know, Dollar Tree brought in 1:06:05.840 --> 1:06:09.160 a former CEO of Dollar General with backing from an 1:06:09.160 --> 1:06:14.200 activist investor, Mental Ridge. They're comparable sales numbers suggest that 1:06:14.400 --> 1:06:17.720 they're getting some traction there that people, you know, consumers 1:06:17.800 --> 1:06:22.720 out there are noticing improvements and responding. That's one thing. 1:06:23.120 --> 1:06:27.680 Another thing is the holy issue of trade down. You 1:06:28.040 --> 1:06:32.520 you know, in the wake of the financial crisis, you 1:06:32.680 --> 1:06:36.280 had a lot of trade down from middle income, higher 1:06:36.360 --> 1:06:39.320 income people doing just what you say, saying, you know, look, 1:06:39.400 --> 1:06:41.240 that's going to be a great bargain. I'm going to 1:06:41.280 --> 1:06:44.600 buy more stuff at Dollar General or Dollar Tree or 1:06:44.640 --> 1:06:47.600 other dollar stores. I think you're seeing a lot less 1:06:47.640 --> 1:06:50.280 of that right now, and where you're seeing it is 1:06:50.360 --> 1:06:54.040 in Walmart. And so I think that whether it's competition 1:06:54.240 --> 1:06:59.880 from small box stores like other dollar stores, or competition 1:07:00.080 --> 1:07:02.520 from the really big ones out there, I think Dollar 1:07:02.600 --> 1:07:04.919 General is under a lot more pressure than it used 1:07:04.920 --> 1:07:07.520 to be now. At the same time, you know, by 1:07:07.560 --> 1:07:10.120 its own admission, it has this issue with store conditions. 1:07:11.120 --> 1:07:14.200 You know, can it fix the store conditions. It's fixing 1:07:14.240 --> 1:07:16.080 the store condition is going to be good enough to 1:07:16.160 --> 1:07:18.880 get back some of that business and get back onto 1:07:19.560 --> 1:07:23.520 a growth path in terms of comparable sales store by store. 1:07:24.240 --> 1:07:25.320 I mean, that's an open question. 1:07:25.520 --> 1:07:27.640 I just think about too, that these stores do play 1:07:27.640 --> 1:07:30.800 a role. That there are small communities around the country 1:07:30.920 --> 1:07:31.800 right that don't. 1:07:31.640 --> 1:07:34.960 Have anything, don't and as the story also documents like 1:07:35.040 --> 1:07:37.920 some of these communities have actually resisted having Dollar General 1:07:38.000 --> 1:07:41.000 come in, have lost some of those battles, So there's 1:07:41.040 --> 1:07:43.960 this tension there. I also just think the moment that 1:07:44.280 --> 1:07:47.040 we seem to be at with labor in this country, with. 1:07:47.240 --> 1:07:50.400 UAW doing what it's doing, Hollywood doing what it's doing. 1:07:50.960 --> 1:07:53.520 Just to look at retail for a second and be like, oh, yeah, 1:07:53.600 --> 1:07:57.120 there's this world that I don't think we talk about 1:07:57.200 --> 1:08:00.000 enough Business Week, but this is, you know, a landscape 1:08:00.320 --> 1:08:02.760 of what America really looks like, and the people who 1:08:02.800 --> 1:08:05.640 are in the front lines actually dealing with some of 1:08:05.680 --> 1:08:08.000 these issues that you know, you don't expect to have 1:08:08.080 --> 1:08:10.440 to deal with a machete wielding customer, and yet at 1:08:10.520 --> 1:08:13.040 Dollar General, that's part of your job description. 1:08:13.000 --> 1:08:14.200 Even if you don't get training for it. 1:08:15.280 --> 1:08:16.200 It's not in the training. 1:08:16.400 --> 1:08:16.880 No, it's not. 1:08:17.120 --> 1:08:19.360 It mean that point we laugh, but it's disturbing and 1:08:19.439 --> 1:08:22.679 it's real for some folks. Incredible cover story Brendan Case, 1:08:22.840 --> 1:08:25.080 Bloomberg News US retail repert. Of course, the editor of 1:08:25.120 --> 1:08:28.400 Bloomberg Business Week magazine, Joel Weber, this is the cover story. 1:08:30.000 --> 1:08:33.519 You're listening to the Bloomberg Business Week podcast. Catch us 1:08:33.600 --> 1:08:36.880 live weekday afternoons from three to six Eastern Listen on 1:08:37.000 --> 1:08:41.000 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, 1:08:41.320 --> 1:08:43.000 or watch us live on YouTube. 1:08:53.320 --> 1:08:53.439 Ah. 1:08:53.560 --> 1:08:56.519 Yes, indeed we did write about real things. But he 1:08:56.640 --> 1:08:58.000 also told some great tales. 1:08:58.160 --> 1:09:00.800 Yeah he sure he sure did. We'll talk about Yeah. 1:09:01.120 --> 1:09:06.000 A contrarian conversationalist and an iconic writer controversialist too. Yes, 1:09:09.040 --> 1:09:12.639 focused on status it's dark side humiliation is. Nonfiction works 1:09:13.040 --> 1:09:16.400 included tales of psychedelic dropping hippies, such as the electric 1:09:16.439 --> 1:09:19.080 kool Aid acid test. You talked about that, reading it 1:09:19.200 --> 1:09:19.719 in high. 1:09:19.600 --> 1:09:20.839 School, college college. 1:09:21.000 --> 1:09:21.200 Yeah. 1:09:21.800 --> 1:09:23.080 Class on the sixth dies pretty cool. 1:09:23.080 --> 1:09:25.639 Class, risk taking astronauts the right stuff, which was made 1:09:25.680 --> 1:09:29.799 into an incredible movie. We're at the forefront of new journalism, 1:09:29.880 --> 1:09:32.599 blending literary flair with immersive reporting. 1:09:33.040 --> 1:09:36.160 His portrait of the Downfall of Entitled bond Trader Sherman 1:09:36.280 --> 1:09:38.880 McCoy and the Bonfire of the Vanities, his first novel, 1:09:39.280 --> 1:09:42.559 came to define an entire era, so writes our next guest, 1:09:42.920 --> 1:09:46.680 Joe Mysak, editor of Bloomberg Brief Municipal Market. Joe over 1:09:46.720 --> 1:09:48.840 the last year spent many hours digging through the two 1:09:48.920 --> 1:09:51.680 hundred and thirty six boxes stacked in the vaults of 1:09:51.720 --> 1:09:54.360 the New York Public Library's main building, Carol in Manhattan, 1:09:54.680 --> 1:09:56.080 the archives of Tom Wolfe. 1:09:56.120 --> 1:09:57.680 His story about what he found is featured in the 1:09:57.720 --> 1:10:00.799 Remark section of the upcoming issue of Bloomberg Business Magazine. 1:10:00.880 --> 1:10:03.360 Kind of reads like its own literary tale. You can 1:10:03.400 --> 1:10:05.800 read it now at the Bloomberg Terminal, of course, in 1:10:05.840 --> 1:10:10.000 at Bloomberg dot com slash BusinessWeek. Joe is here in 1:10:10.120 --> 1:10:14.400 our Bloomberg Interactive Brokers studio, So talk to us. First 1:10:14.400 --> 1:10:17.120 of all, I'm just curious, what was the pitch meeting 1:10:17.920 --> 1:10:20.880 to Joel in doing this, or did Joel come to 1:10:20.880 --> 1:10:22.560 you and say, Joe, you got to do this? Or 1:10:22.600 --> 1:10:23.400 how did this come about? 1:10:24.320 --> 1:10:29.240 No, I discovered this, you know, this little episode of 1:10:29.400 --> 1:10:34.439 literary history. I found a letter in the archives from 1:10:35.760 --> 1:10:39.360 Tom Wolfe's. Tom wolf had been a trustee at Saint 1:10:39.439 --> 1:10:43.000 Christopher's School in Richmond, had gone there, graduated nights at 1:10:43.040 --> 1:10:48.000 forty seven, and there's a letter from the headmaster there saying, 1:10:48.439 --> 1:10:52.120 you know, I wish you'd give this guy, Kirk Maturn 1:10:52.280 --> 1:10:56.120 a call. He gave us a very nice bequest, and 1:10:56.760 --> 1:11:00.160 as you know, we're starting up our ramping up our 1:11:00.280 --> 1:11:05.519 endowment campaign. Okay, so you know, the archives are spread 1:11:05.600 --> 1:11:08.280 out in a lot of different boxes, so that's not 1:11:08.640 --> 1:11:12.360 perfectly chronological. So you're going through them and saying, ah, 1:11:12.600 --> 1:11:17.040 here here, then this must be connected here and and 1:11:17.240 --> 1:11:19.080 just like all of a sudden, you know, when I 1:11:19.200 --> 1:11:23.400 saw this guy's response back to you know, Tom Wolf 1:11:23.400 --> 1:11:26.760 writes him and says, thank you for this. This is wonderful. 1:11:26.840 --> 1:11:30.639 As you know, we're starting up our endowment. Maturn gets 1:11:30.720 --> 1:11:35.880 back to him and on his lazard fare stationery says, wow, 1:11:35.960 --> 1:11:40.040 you know, thank you so much for your nice letter. 1:11:40.720 --> 1:11:43.519 And you know, why don't we have lunch sometime And 1:11:43.840 --> 1:11:46.240 you know, not just us, but I have some friends 1:11:46.280 --> 1:11:48.200 on the street who'd like to meet you too, And 1:11:48.240 --> 1:11:50.639 I'm not going to put you on a podium. Let's 1:11:50.720 --> 1:11:53.000 just have an informal lunch. And he sets up this 1:11:53.200 --> 1:11:57.840 lunch at the twenty one club now shuddered unfortunately, and 1:11:58.840 --> 1:12:02.200 you know there's a separate for that. And you know, 1:12:02.560 --> 1:12:09.000 then on one of the other letters, Tom writes or 1:12:09.439 --> 1:12:12.760 you know, starts drafting a reply saying, you know, your 1:12:13.120 --> 1:12:16.800 your friends were fascinating and they clued me into this 1:12:17.360 --> 1:12:20.120 world that I knew nothing about. So I put all 1:12:20.120 --> 1:12:23.479 this together and I said, wait a minute. This guy, 1:12:24.000 --> 1:12:28.879 Kirk Mattern, is the guy who was responsible for Sherman McCoy, 1:12:30.040 --> 1:12:36.160 the protagonist of Bonfire the Vanities, becoming a Wall Street trader. 1:12:36.400 --> 1:12:41.640 He had been in the Rolling Stone series and it 1:12:42.000 --> 1:12:44.320 went I think for about twenty seven. 1:12:45.280 --> 1:12:48.720 The serialized version of serialized version of Bonfire. 1:12:49.040 --> 1:12:52.040 Tom was writing it against deadline all the time he 1:12:52.160 --> 1:12:56.519 had been a writer. And the title of his book, 1:12:56.800 --> 1:12:59.479 and it was never quite defined what it was, was 1:12:59.560 --> 1:13:03.120 called A Man in Slices, which, of course is funny 1:13:03.160 --> 1:13:06.000 because Tom Wolf's third novel is called A Man in 1:13:06.120 --> 1:13:07.160 full So. 1:13:07.760 --> 1:13:11.800 Joe, you call him Tom, Yeah, like you know him? Well, 1:13:12.280 --> 1:13:15.800 you know, how did you find yourself at the New 1:13:15.840 --> 1:13:19.559 York Public Library looking through Tom Wolf's mail Tom wolves 1:13:19.680 --> 1:13:23.320 mail over the last year and tell us how you 1:13:23.400 --> 1:13:25.640 came to know him over your career and over over his. 1:13:26.240 --> 1:13:29.719 Well, okay, I was I was in search of There's 1:13:29.760 --> 1:13:34.360 a there's a couple of lines of Bonfire where Sherman 1:13:34.479 --> 1:13:38.639 McCoy's daughter asks him, and this is in the published 1:13:38.760 --> 1:13:43.000 version of the book. Book says, Daddy, what do you do? 1:13:43.479 --> 1:13:45.920 What do you do, daddy, what do you do all day? 1:13:46.800 --> 1:13:51.040 And Sherman McCoy starts to fumble around, and finally his wife, 1:13:52.080 --> 1:13:55.960 Judy says, and I got this, and she says, what 1:13:56.040 --> 1:14:01.000 daddy does is he slices the cake and he hands 1:14:01.120 --> 1:14:05.439 out slices and Daddy gets to keep the crumbs. And 1:14:05.560 --> 1:14:07.920 so Sharon recoiled. You know, I was completely humiliated by 1:14:07.960 --> 1:14:10.400 this and like thinking, like, wow, the crumbs and at that, 1:14:10.720 --> 1:14:14.559 you know they're out in Southampton right then? And uh 1:14:14.960 --> 1:14:20.120 so I remember I asked Tom one night we're having 1:14:20.160 --> 1:14:25.080 dinner at Ben Benson's, also now closed. I asked him, 1:14:25.080 --> 1:14:26.360 I said, who came up with that? 1:14:26.479 --> 1:14:27.200 Did you come up with that? 1:14:27.560 --> 1:14:31.880 And he goes, no, Desmond Fitzgerald? And I remember the 1:14:32.000 --> 1:14:36.200 name Desmond Fitzgerald. But you know, I, you know, last 1:14:36.320 --> 1:14:39.479 summer I said, wow, remember that. I bet that'd be 1:14:39.520 --> 1:14:41.720 a nice column. Let me go to his papers and 1:14:41.760 --> 1:14:44.120 see if I could find that. Sure, how difficult could 1:14:44.160 --> 1:14:48.320 it be? Well? Very difficult, because jos I said, two 1:14:48.479 --> 1:14:51.160 hundred and thirty six boxes. And you know you don't 1:14:51.479 --> 1:14:54.000 you're not just faced with him. You have to request 1:14:54.560 --> 1:14:57.879 different boxes, and you know, so it's the whole process 1:14:59.080 --> 1:15:02.640 so I'm I'm looking, I'm looking, and I didn't find that, 1:15:02.840 --> 1:15:06.599 but I found Kirk Maturn. And so then Kirk Macturn's 1:15:06.640 --> 1:15:10.240 son works on Wall Street. And I said, well, wait 1:15:10.240 --> 1:15:13.400 a minute, this can't be that Kirk Maturn, this is 1:15:13.439 --> 1:15:17.360 the Sun. So I emailed him cautiously and I said, 1:15:17.560 --> 1:15:19.719 you know, I don't know if your father is still alive, 1:15:20.000 --> 1:15:24.960 but I'm looking to find out this information and chat 1:15:25.080 --> 1:15:26.880 with him bit. And he goes, oh, sure, let me 1:15:26.960 --> 1:15:28.639 find out if you know, if you'd like to chat 1:15:28.720 --> 1:15:32.800 he's retired for him, And he got back to me 1:15:32.840 --> 1:15:35.760 and said, yeah, here's his email address. So then I 1:15:35.920 --> 1:15:39.559 got to calm him up. And you know, I just like, basically, 1:15:40.120 --> 1:15:43.640 you're the guy. You were the guy who changed the 1:15:43.720 --> 1:15:46.840 course of literary history, really, because if you think about it, 1:15:47.160 --> 1:15:49.280 on the one hand, if you have you know, here's 1:15:49.320 --> 1:15:53.600 a novel about a writer of a man in slices, 1:15:54.240 --> 1:15:59.160 or this entire chaotic scene of what did he put 1:15:59.520 --> 1:16:03.120 men baying for money on, you know, the floor of 1:16:03.200 --> 1:16:07.040 this Wall Street securities firm? And of course you know, 1:16:07.520 --> 1:16:11.280 Bonfire was not a particularly good movie, but the Wall 1:16:11.320 --> 1:16:16.280 Street scenes really captured people's imagination because all of a sudden, 1:16:16.439 --> 1:16:21.040 it's like this whole world is shown to you, and 1:16:21.680 --> 1:16:25.759 you know, one of the parts of this you know project. 1:16:25.840 --> 1:16:29.160 As I was doing it, Kirk Maturn set up a 1:16:29.479 --> 1:16:34.679 meeting at to go to Solomon Brothers during the Treasury 1:16:34.800 --> 1:16:38.880 Bond auction so that Tom could just watch it and 1:16:39.080 --> 1:16:41.479 witness it. And of course, you know, it was this 1:16:41.640 --> 1:16:45.519 wild thing. And it happened that Michael Lewis, was working 1:16:45.600 --> 1:16:49.719 at Solomon Brothers at that time, had not yet written 1:16:49.840 --> 1:16:53.880 Liarus Poker obviously. Uh So that's you know, that was 1:16:54.200 --> 1:16:56.760 why I was searching through the papers. And as I 1:16:56.840 --> 1:16:59.439 was searching through the papers, I mean, I became sort 1:16:59.439 --> 1:17:01.800 of a because you know. 1:17:01.880 --> 1:17:03.960 You go through every box. 1:17:04.560 --> 1:17:08.000 Yeah, in every box, there's there's a little surprise, like 1:17:08.040 --> 1:17:11.959 a little presence ie, you know, like Okay, for example, 1:17:12.160 --> 1:17:19.800 for example, Carol, it's Tom did this anthology called The 1:17:19.840 --> 1:17:25.640 New Journalism. And there's an introduction basically made up of 1:17:25.720 --> 1:17:30.240 a couple of pieces he wrote for New York Magazine 1:17:30.479 --> 1:17:35.000 and for Esquire. But there's all you know, And and 1:17:36.040 --> 1:17:40.000 what happened was I thought he just took those three 1:17:40.120 --> 1:17:45.880 parts and cobbled them together. No, Instead, there's this manuscript 1:17:47.680 --> 1:17:52.240 hundreds of pages, probably maybe even thousands of pages because 1:17:52.280 --> 1:17:57.760 the Tom Wolf writing was rewriting. Uh, and it includes 1:17:57.960 --> 1:18:04.400 this entire maybe two hundred pages of all about his 1:18:04.600 --> 1:18:08.320 time at Yale in graduate school, which he has never 1:18:08.400 --> 1:18:11.959 written about before. But there it is in the boxes 1:18:12.360 --> 1:18:15.160 at the New York Public Library. Tom did not like 1:18:15.280 --> 1:18:16.120 graduate school. 1:18:16.320 --> 1:18:18.519 Yea, I just said this picture of Joe just like 1:18:18.640 --> 1:18:21.160 surrounded by all this stuff. I don't know, maybe some 1:18:21.280 --> 1:18:22.160 coffee on the ground. 1:18:24.080 --> 1:18:26.759 Listen and public library. 1:18:27.600 --> 1:18:32.240 Very we're talking with Joe Maysak. Also of course in 1:18:32.320 --> 1:18:34.880 our studios Joe Webber, editor of Bloomberg Business WEEKND you know, Joe, 1:18:34.920 --> 1:18:38.800 We're just listening to Joe just unfold this tale of 1:18:38.960 --> 1:18:42.559 what he found out, uh and uh how it led 1:18:42.600 --> 1:18:45.600 to this most famous fictional bond trader, right that was 1:18:45.680 --> 1:18:47.320 in Bonfire of the Vanities. 1:18:49.600 --> 1:18:50.120 Do you need me? 1:18:50.280 --> 1:18:51.679 Because he was he was great. 1:18:53.479 --> 1:18:57.479 We always thinking about like when this was inspiring and 1:18:57.640 --> 1:18:59.680 just telling you the story and just I mean what 1:18:59.800 --> 1:19:00.280 you like. 1:19:00.520 --> 1:19:03.000 We weren't there for Bloomberg BusinessWeek, Joe, right, like, this 1:19:03.160 --> 1:19:05.960 is the piece that you wrote is a is a 1:19:06.400 --> 1:19:08.400 product of you being there, the research that you did. 1:19:08.439 --> 1:19:09.800 But Joel tell us how it came together. 1:19:10.640 --> 1:19:13.720 Joe wrote this story. I was like, why why do 1:19:13.800 --> 1:19:16.160 we need to know about Tom Wolf now, like, didn't 1:19:16.160 --> 1:19:23.720 he die? And then I'll wait a minute years documentary. Yeah, 1:19:23.880 --> 1:19:26.040 And and the documentary was the reason that I was like, 1:19:26.080 --> 1:19:28.880 you know, there's a reason that this matters now, right, 1:19:29.000 --> 1:19:31.479 And it's because Michael Lewis went to the same archive 1:19:32.240 --> 1:19:34.560 and wrote this story and he happened to write it 1:19:35.640 --> 1:19:41.120 before Tom Wolf died, And at the premiere on Friday, 1:19:41.160 --> 1:19:43.760 he actually said that he wanted to write it so 1:19:43.840 --> 1:19:46.639 that he could like see Tom's reaction to the story. 1:19:47.439 --> 1:19:50.360 We didn't get that that luxury, so we had to 1:19:50.560 --> 1:19:53.800 deal with that afterward. But I think because Joe had 1:19:53.840 --> 1:19:55.680 written the story and spent so much time in the 1:19:55.800 --> 1:19:59.360 archive and and look, in this world, in the Bloomberg world, 1:20:00.040 --> 1:20:02.479 Bonfire of the Vanities is a big deal, like that 1:20:02.680 --> 1:20:06.040 is it still feels like a foundational thing. And so 1:20:06.600 --> 1:20:10.240 the fact that Joe like found this little nugget that 1:20:10.479 --> 1:20:14.800 like first draft wasn't even really about the bond market, 1:20:14.880 --> 1:20:18.360 I was like, that is awesome, So that's that's what matters. 1:20:18.439 --> 1:20:20.120 It just felt like there's a little bit of history 1:20:20.160 --> 1:20:23.560 that we were able to to do to you know, 1:20:23.640 --> 1:20:26.360 provide a significant insight on and that was one hundred 1:20:26.360 --> 1:20:27.320 and fifty percent. 1:20:27.479 --> 1:20:30.720 Joe, what other archives are you questing to spend time? 1:20:31.240 --> 1:20:33.639 Well, you know about Jackie. 1:20:33.760 --> 1:20:37.439 I heard that Gay Talise has quite an archive in 1:20:37.640 --> 1:20:38.759 the bottom of his house. 1:20:39.520 --> 1:20:40.679 Yeah, so that's. 1:20:40.479 --> 1:20:42.560 Going to the New York City Pilot Public viboraries, so 1:20:42.600 --> 1:20:43.760 you can get to it right right. 1:20:44.640 --> 1:20:46.479 What else did you find out about tum Wulf Because 1:20:46.479 --> 1:20:50.000 you did find out more about Oh, he became almost 1:20:50.120 --> 1:20:52.240 one of the characters that he has written about. 1:20:53.240 --> 1:20:57.040 You know, there's so much in in the the archive 1:20:57.200 --> 1:21:01.600 that you it's it's really it's it's an education in 1:21:01.840 --> 1:21:05.839 certainly journalism history. You know, for example, I came across 1:21:05.920 --> 1:21:08.559 this piece that he wrote first of that he pitched 1:21:08.760 --> 1:21:11.680 he set like a twenty seven page pitch letter to 1:21:12.120 --> 1:21:15.120 the Saturday Evening Post, which in nineteen sixty two was 1:21:15.240 --> 1:21:18.880 quite a legitimate magazine, and he included this, you know, 1:21:19.080 --> 1:21:22.559 a pitch for an article about a status life in Washington, 1:21:22.680 --> 1:21:25.000 d c. Because at that point he was working for 1:21:25.080 --> 1:21:29.639 the Washington Post. And you know, he sends this pitch 1:21:29.720 --> 1:21:35.679 letter and then apparently later on sends the completed story, 1:21:36.280 --> 1:21:41.240 and there's a thirty five forty page article about status 1:21:41.360 --> 1:21:45.720 life in Washington and the Kennedy administration. And I was 1:21:45.800 --> 1:21:48.479 never run the Saturday Evening Post. It's never run anywhere. 1:21:49.360 --> 1:21:53.560 So you just keep coming across these little presence and 1:21:53.960 --> 1:21:56.200 you know, this wasn't published, This wasn't published. 1:21:56.320 --> 1:21:57.840 Isn't this something unbelievable? 1:21:57.920 --> 1:21:59.800 I mean, is there going to be just opportunity for 1:22:00.840 --> 1:22:02.759 a book of the unpublished works of Tom Wolfe? 1:22:02.920 --> 1:22:06.120 Oh? I think you know, not only the unpublished, the 1:22:06.520 --> 1:22:11.600 un kind of unpublished work, but the uncollected work. So 1:22:11.760 --> 1:22:16.280 many of his book reviews are really insightful where he 1:22:17.360 --> 1:22:20.599 you know, he really tells you what he's thinking, including 1:22:20.680 --> 1:22:25.000 this entire evisceration of Norn Mailer. Incredible. 1:22:25.720 --> 1:22:28.559 That was an interesting part of just how much tension 1:22:28.600 --> 1:22:31.720 there was. And you know, if you're interested at all 1:22:31.760 --> 1:22:34.200 in this, it's worth checking out this documentary, which in 1:22:34.280 --> 1:22:35.879 New York is that i f C called. 1:22:35.720 --> 1:22:37.479 Radical wolf great stuff. 1:22:37.720 --> 1:22:38.519 You could go on and on. 1:22:38.800 --> 1:22:41.639 This story sounds like you need to write a book. 1:22:41.920 --> 1:22:44.040 I'm just telling you you've got nothing to do. I mean, 1:22:44.040 --> 1:22:45.880 if t has been in the archives, just go write 1:22:45.880 --> 1:22:49.240 the book. Joe my sack, of course, and Joel Weber. 1:22:49.360 --> 1:22:51.799 Check this out remark section of the upcoming new magazine. 1:22:53.280 --> 1:22:56.800 You're listening to the Bloomberg Business Week podcast. Catch us 1:22:56.880 --> 1:23:00.880 live weekday afternoons from three to six Easter Bloomberg Radio, 1:23:01.080 --> 1:23:04.320 the Bloomberg Business app, and YouTube. You can also listen 1:23:04.479 --> 1:23:07.559 live on Amazon Alexa from our flagship New York station, 1:23:08.040 --> 1:23:11.080 Just Say Alexa, Play Bloomberg eleven thirty. 1:23:12.560 --> 1:23:14.719 Well, her next guest is an author of many books, 1:23:14.760 --> 1:23:17.040 including the New York Times bestseller The Wizard of Lies, 1:23:17.160 --> 1:23:19.680 Bernie Madoff, and the Death of Trust. That book made 1:23:19.720 --> 1:23:22.000 into an HBO film. It starred Robert de Niro and 1:23:22.080 --> 1:23:24.880 Michelle Pfeiffer. She also spent more than twenty years at 1:23:24.880 --> 1:23:26.760 The New York Times, where she was a finalist for 1:23:26.840 --> 1:23:27.640 the Pulitzer. 1:23:27.320 --> 1:23:27.960 Per Can I tell you? 1:23:28.800 --> 1:23:31.479 Robert de Niro for years leading up to with Tribeca, 1:23:31.680 --> 1:23:33.240 kept asking him when are you going to do maidof 1:23:33.280 --> 1:23:34.240 When are you going to do Meido? 1:23:34.560 --> 1:23:35.880 And then he did it, and then he did it. 1:23:35.920 --> 1:23:36.559 Anyway, go ahead. 1:23:36.680 --> 1:23:37.759 She got him to do Madoff. 1:23:37.880 --> 1:23:38.240 She did. 1:23:39.000 --> 1:23:41.599 Her most recent book is Taming the Street, The Old Guard, 1:23:41.720 --> 1:23:44.479 The New Deal, and FDR's Fight to regulate capitalism. It 1:23:44.520 --> 1:23:47.400 came out last week. It's an exploration of financial regulation 1:23:47.560 --> 1:23:49.839 during the New Deal, a period of time that included 1:23:49.880 --> 1:23:53.040 the creation of the SEC. The Financial Times called the 1:23:53.040 --> 1:23:56.080 book quote riveting and timely, and I've got to agree. 1:23:56.479 --> 1:23:58.520 We're very pleased to have with us. Diana B. Henriquez 1:23:58.600 --> 1:24:02.639 here in our Bloomberg Interact broker's studio. Full disclosure, Diana 1:24:02.760 --> 1:24:05.720 did give me my first job in business journalism when 1:24:05.760 --> 1:24:08.439 I was a research assistant on The Wizard of Lies 1:24:08.520 --> 1:24:11.040 back in graduate school. Diana, welcome, It's good. 1:24:10.920 --> 1:24:12.400 To see you in doors. You can I just say 1:24:12.479 --> 1:24:12.680 thank you. 1:24:13.439 --> 1:24:15.640 You've turned out pretty well. I think my judgment was 1:24:15.720 --> 1:24:16.360 pretty great. 1:24:17.360 --> 1:24:20.719 Well, thanks so much so. Carol and I were talking 1:24:20.720 --> 1:24:23.679 about this just because in the last three hours, basically 1:24:23.720 --> 1:24:26.000 like everything we see today reminds us of the Roaring 1:24:26.040 --> 1:24:27.759 twenties and what was happening. 1:24:28.040 --> 1:24:30.960 Isn't it remarkable? It is remarkable deja boo all over again, 1:24:31.000 --> 1:24:32.760 as the old joke does. But you know, these are 1:24:32.800 --> 1:24:40.280 our roaring twenties and the press to deregulate, to reduce 1:24:40.360 --> 1:24:44.720 the fetters on unfedtered capitalism. Some of the arguments that 1:24:44.800 --> 1:24:48.160 I see in the press today were lifted from Calvin Coolidge, 1:24:48.160 --> 1:24:51.840 almost word for word, Comma for comma. It's amazing how 1:24:52.439 --> 1:24:56.880 the arguments, the defenses against regulation that emerged in the 1:24:56.960 --> 1:24:59.719 twenties and thirties are have resurfaced today. 1:25:00.000 --> 1:25:03.240 But it's not just the arguments against regulation. It's also 1:25:04.080 --> 1:25:06.800 the concentration of wealth that we're seeing. 1:25:06.840 --> 1:25:10.480 That's what I thought was concentration of wealth, the disparity 1:25:10.680 --> 1:25:13.559 of wealth, the amount of income growth it is going 1:25:13.640 --> 1:25:17.640 to the top one percent, the stagnation of average and 1:25:17.760 --> 1:25:22.200 ordinary workers' incomes. All of that is straight out of 1:25:22.240 --> 1:25:27.240 the nineteen twenties. We're seeing technologies disrupting major industry. Same 1:25:27.479 --> 1:25:34.080 in the nineteen twenties. Major changes in manufacturing wiped out 1:25:34.120 --> 1:25:36.160 three million jobs at the beginning of the twenties, and 1:25:36.439 --> 1:25:37.840 a million of them never came back. 1:25:37.960 --> 1:25:40.400 So, Dana, does it make you because it's interesting because 1:25:40.400 --> 1:25:42.120 we just talked a lot about AI today and the 1:25:42.200 --> 1:25:44.879 disruption there again. I mean, it's kind of a constant narrative. 1:25:45.080 --> 1:25:47.639 But does it make you say, listen, the world, the economy, 1:25:47.720 --> 1:25:50.479 the market, business, it's cyclical, we go through these changes 1:25:50.600 --> 1:25:51.600 or does it know? 1:25:51.640 --> 1:25:53.960 How do you think about I think the market is 1:25:54.160 --> 1:25:59.000 always going to be a very sensitive barometer of a 1:25:59.120 --> 1:26:03.640 disruptive change. And whether that disruptive change is radio as 1:26:03.720 --> 1:26:06.720 it was in the nineteen twenties, which was changing the 1:26:06.760 --> 1:26:11.000 way newspapers operated, changing the whole landscape of mass communication, 1:26:11.360 --> 1:26:14.519 but whether it's AI arriving at a time when finance 1:26:14.640 --> 1:26:21.759 is already highly automated. But the reliance of the market 1:26:21.880 --> 1:26:25.120 on the status quo, considering that it makes its money 1:26:25.160 --> 1:26:28.600 because things change, right, It is amazing to me that 1:26:28.640 --> 1:26:31.439 everyone thinks it's going to stay the same. And indeed 1:26:31.479 --> 1:26:35.200 they did in nineteen twenty eight twenty nine, right up 1:26:35.280 --> 1:26:38.479 until October of nineteen twenty nine, they said, oh this 1:26:38.640 --> 1:26:41.920 is this is a perfect world. And for the pudocrats, 1:26:41.960 --> 1:26:44.960 it was a perfect world. And it's always going to 1:26:45.080 --> 1:26:48.400 change in within the next decade. As I detail in 1:26:48.479 --> 1:26:50.599 that that's the stretch of time I cover in Taming 1:26:50.640 --> 1:26:53.320 the Street nineteen twenty nine to nineteen thirty nine, The 1:26:53.479 --> 1:26:55.040 world turned upside down? 1:26:55.320 --> 1:26:56.360 Can I ask how you got there? 1:26:56.479 --> 1:26:57.360 Like, how did you say? 1:26:58.040 --> 1:27:00.240 You obviously could write about probably anything in every thing. 1:27:00.520 --> 1:27:02.360 So what is it that said I got to do this? 1:27:02.920 --> 1:27:05.439 Oh? You know, I fell in love with the story 1:27:05.640 --> 1:27:08.559 of Richard Whitney the Fall of the Great New York 1:27:08.600 --> 1:27:11.599 Stock Exchange President when I first started covering Wall Street, 1:27:12.120 --> 1:27:16.719 you know, back in the Pleistocene era, stopped and I said, gosh, 1:27:16.840 --> 1:27:19.720 what a tale. And it had been included in a 1:27:19.920 --> 1:27:24.000 kind of episodic anecdotal book called Once in Gaulconda by 1:27:24.080 --> 1:27:27.559 John Brooks, which I loved, and I ducked it away, 1:27:27.760 --> 1:27:32.479 tucked it away, and always thought that that period of 1:27:32.680 --> 1:27:37.960 creation of market regulation would have been fascinating to live through. 1:27:38.200 --> 1:27:41.080 But what really peaked my interest, Caroline, was the two 1:27:41.120 --> 1:27:42.320 thousand and eight meltdown. 1:27:42.960 --> 1:27:43.080 You know. 1:27:43.200 --> 1:27:44.840 I was going to work at the New York Times 1:27:44.960 --> 1:27:46.599 every day in the fall of two thousand and eight 1:27:46.640 --> 1:27:49.439 after Lehman Brothers closed, wondering if that would be the 1:27:49.520 --> 1:27:53.000 day the ATMs went dark. And I was aware, as 1:27:53.080 --> 1:27:57.360 an amateur financial historian, that I was living through history. 1:27:57.880 --> 1:28:00.439 I was living through events that would be his historic 1:28:01.000 --> 1:28:03.920 in the financial history of the country. And I said, 1:28:04.000 --> 1:28:07.840 you know, people going through nineteen twenty nine felt this way, 1:28:08.720 --> 1:28:13.479 what an incredible experience they had. So but that kind 1:28:13.520 --> 1:28:16.000 of began to crystallize what I wanted to do. Then, 1:28:16.080 --> 1:28:18.840 of course, Bernie Madoff happened in two thousand and eight, 1:28:19.160 --> 1:28:21.519 and my life went off in a different path. And 1:28:21.640 --> 1:28:25.680 then the thirtieth anniversary of the nineteen eighty seven crash came, well, 1:28:25.720 --> 1:28:28.240 that got me closer to twenty nine, because, of course, 1:28:28.360 --> 1:28:30.720 the eighty seven crash was the worst day in Wall 1:28:30.760 --> 1:28:35.360 Street history, eclipsing the worst days of nineteen twenty nine. 1:28:36.000 --> 1:28:39.479 And finally, when that book was done, I said, I 1:28:39.560 --> 1:28:42.240 think it's time. So I started work on this book 1:28:42.240 --> 1:28:45.160 about five years ago, when no one ever mentioned the 1:28:45.280 --> 1:28:48.599 New Deal, when it was as if Roosevelt had never existed. 1:28:49.080 --> 1:28:53.080 But I'm digging, digging into the story and seeing more 1:28:53.120 --> 1:28:54.120 and more parallels. 1:28:54.360 --> 1:28:56.559 And then as the last five years. 1:28:56.439 --> 1:29:00.800 Have unfolded, it is as if the puzzle pieces that 1:29:01.080 --> 1:29:04.360 matched the nineteen twenties and thirties just dropped into place. 1:29:04.439 --> 1:29:06.040 It's pretty so it was amazing. 1:29:06.200 --> 1:29:09.080 Yeah, Well, let's talk about the political environment here in 1:29:09.160 --> 1:29:13.280 which FDR came into office, because you note in the 1:29:13.280 --> 1:29:16.880 book that it's quote alarming political discontent erupting from the 1:29:16.960 --> 1:29:20.320 extreme left and the radical right. I thought to myself 1:29:20.320 --> 1:29:22.639 when I read that sounds familiar. Are you talking about 1:29:22.680 --> 1:29:24.960 twenty twenty one? Are you talking about twenty twenty. 1:29:25.320 --> 1:29:28.439 No, I'm talking about nineteen twenty eight, twenty nine, thirty 1:29:28.520 --> 1:29:33.320 thirty one, thirty two. The right, the suffering in this country. First, 1:29:34.479 --> 1:29:37.760 we can't even take it in today, but twenty five 1:29:37.840 --> 1:29:41.120 percent of the workforce was out of work in those days. 1:29:41.160 --> 1:29:43.760 That was thirteen million people. But imagine that one out 1:29:43.800 --> 1:29:45.720 of every four people you know doesn't have a job. 1:29:46.080 --> 1:29:48.599 Many of them haven't had a job in years. People 1:29:48.640 --> 1:29:53.280 are living in caves in Central Park, there are scavenging landfields, fields, 1:29:53.439 --> 1:29:57.519 The degree of suffering in the country is reaching such 1:29:57.680 --> 1:30:02.120 a point that it's at powder keg waiting to explode. 1:30:02.680 --> 1:30:06.720 From the left, you have increasingly militant communist interests that 1:30:06.840 --> 1:30:10.960 are eager to harness this worker anger and outrage to 1:30:11.360 --> 1:30:14.479 make gains in the political system. And that, of course 1:30:14.600 --> 1:30:18.240 alarms the industrialists and captains of capitalism on the right, 1:30:18.320 --> 1:30:22.240 who are fearful of labor uniting with communists. And they 1:30:22.320 --> 1:30:26.880 start looking longingly at Italy and Germany, which have been 1:30:26.960 --> 1:30:29.759 under fascist control in Italy's case for more than a decade, 1:30:29.880 --> 1:30:33.160 and they say, hmm, they've got some pretty good ideas 1:30:33.280 --> 1:30:36.920 over there. Look how they're getting their economy going. Look 1:30:37.120 --> 1:30:41.360 how they're managing their labor unions, locking them up. But 1:30:41.800 --> 1:30:45.760 so you've got these two tensions, and you've got a 1:30:45.840 --> 1:30:50.120 man who steps in FDR and says, if democracy can't 1:30:50.280 --> 1:30:54.040 fix this, people are going to give up on democracy. 1:30:54.479 --> 1:30:57.880 And so this is one last chance for democracy to 1:30:58.000 --> 1:31:00.880 relieve this suffering and give people hope. And that's what 1:31:01.040 --> 1:31:02.120 carried him into office. 1:31:02.439 --> 1:31:09.360 The ties between capitalism democracy like it's tortured. It's important. 1:31:10.320 --> 1:31:13.880 It's actually so simple as FDR saw it. And I 1:31:13.960 --> 1:31:17.479 didn't see it this way until I read speeches of his. 1:31:18.280 --> 1:31:21.919 When he signed the bill creating the sec he said. 1:31:22.560 --> 1:31:25.240 Wait, said it again, the bill creating the SEC An 1:31:25.280 --> 1:31:27.479 institution we take for granted. Yeah, well, and we. 1:31:27.520 --> 1:31:31.519 Take the FDIC for granted. That didn't exist before we 1:31:31.640 --> 1:31:36.960 had lived our entire lives hell protection. Yes, right. So 1:31:37.720 --> 1:31:45.840 he saw that a healthy democracy required well regulated markets 1:31:45.920 --> 1:31:50.160 that seemed fair. He believed that if the average American 1:31:50.360 --> 1:31:54.720 didn't feel he could get a fair shake in the economy, 1:31:55.520 --> 1:31:59.760 he would not support the democracy. And so to him, 1:32:00.400 --> 1:32:03.720 the two were completely wetted. And so if I say, 1:32:04.200 --> 1:32:06.080 a lot of people are saying you with democracies on 1:32:06.120 --> 1:32:09.799 the ballot in twenty twenty four. I'm saying, yeah, financial 1:32:09.920 --> 1:32:12.479 regulation is on the ballot in twenty twenty four to 1:32:12.560 --> 1:32:18.959 two because they are inextricably linked. The fairness of the economy, 1:32:19.000 --> 1:32:23.120 in the eyes of the average American is what sustains 1:32:23.280 --> 1:32:29.040 support for this democratic experiment, and Roosevelt saw that almost break. 1:32:30.040 --> 1:32:34.240 There's an anecdote which I love. It's perhaps apocryphal, but 1:32:34.479 --> 1:32:37.120 I love it anyway. A visitor of the White House 1:32:37.200 --> 1:32:39.640 right after Roosevelt was sworn in at the depths of 1:32:39.680 --> 1:32:42.439 the depression, said well, you know, if you can cure 1:32:42.479 --> 1:32:45.600 this depression, mister president, you'll be our greatest president. But 1:32:45.720 --> 1:32:49.160 if you fail, you'll be our worst president. And Roosevelt 1:32:49.200 --> 1:32:51.599 corrected it and me said, no, if I fail, I'll 1:32:51.640 --> 1:32:55.519 be our last president. To the perspective of the people 1:32:55.640 --> 1:32:57.719 at the time, it was that desperate. 1:32:58.080 --> 1:33:01.439 That's journalist and author Diana Beinry. Her latest book is 1:33:01.479 --> 1:33:04.280 out now. It's called Taming the Street, The Old Guard, 1:33:04.439 --> 1:33:07.720 the New Deal, and FDR's fight to regulate American capitalism. 1:33:07.840 --> 1:33:10.599 You're listening to Bloomberg Business Week. We just talked regulation 1:33:10.760 --> 1:33:13.000 on Wall Street, while coming up next we'll turn to 1:33:13.040 --> 1:33:16.519 another hot button policy issue, controlling our Southern border. 1:33:16.760 --> 1:33:20.160 Chef John Fraser discusses what immigration flows mean for America's 1:33:20.200 --> 1:33:22.960 hospitality labor force. This is Bloomberg. 1:33:23.479 --> 1:33:27.000 You're listening to the Bloomberg Business Week Podcast. Catch us 1:33:27.080 --> 1:33:30.360 live weekday afternoons from three to six Eastern Listen on 1:33:30.479 --> 1:33:34.479 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 1:33:34.800 --> 1:33:36.479 or watch us live on YouTube. 1:33:37.439 --> 1:33:39.960 Well, Jess, I'd love having restaurant tours on our program 1:33:40.080 --> 1:33:43.080 because well, I love food, and sometimes if you're here 1:33:43.080 --> 1:33:46.920 in person, they bring us foods. It's really fun. But 1:33:47.040 --> 1:33:49.240 also I love speaking to them about the business, how 1:33:49.320 --> 1:33:51.280 much food costs, how tough or how easy it is 1:33:51.400 --> 1:33:53.760 to get employees, and of course customer demand. It can 1:33:53.800 --> 1:33:56.080 tell us just a lot about how the economy is 1:33:56.120 --> 1:33:58.240 doing in different parts of the country. Very please to 1:33:58.280 --> 1:34:01.040 ab with us this afternoon, John Fraser. He's a restaurant 1:34:01.080 --> 1:34:03.839 tour of Michelin starred chef. He's the founder of JF Restaurants. 1:34:04.120 --> 1:34:07.439 They've got fifteen restaurants with more than four hundred employees 1:34:07.439 --> 1:34:10.559 around New York City, Long Island, during California, in LA. 1:34:10.680 --> 1:34:14.240 They've got places in Florida as well. He's also got 1:34:14.360 --> 1:34:16.960 a YouTube series called Silent Chef, which we're going to 1:34:17.000 --> 1:34:19.600 talk about as well. Chef John Fraser joins us on 1:34:19.680 --> 1:34:22.960 a zoom from New York City. Chef, how are you great? 1:34:23.040 --> 1:34:24.000 Thank you, thanks for having me. 1:34:24.120 --> 1:34:26.519 Yeah, it's really good to have you with us. First, 1:34:26.600 --> 1:34:29.439 just give us an update on the state of the business. 1:34:29.560 --> 1:34:31.679 What are you seeing right now across your different restaurants 1:34:31.720 --> 1:34:32.240 and concepts. 1:34:33.360 --> 1:34:37.120 Yeah, you know, it's really city by city. New York City, 1:34:37.120 --> 1:34:40.160 as everyone knows, kind of is a really seasonal business. 1:34:41.360 --> 1:34:43.719 Our New York City restaurants who were up from last 1:34:43.760 --> 1:34:46.479 summer for sure. We'll know in a couple of days 1:34:46.560 --> 1:34:48.840 kind of how much. But we do see a bit 1:34:48.880 --> 1:34:50.720 of a little always in the second heading into the 1:34:50.800 --> 1:34:52.639 third quarter, and then we ramp up into the fourth, 1:34:52.680 --> 1:34:57.960 which is by far our best around Florida. Also, seasonal 1:34:58.040 --> 1:35:01.120 dips happen in the summertime, and we're really really strong 1:35:01.200 --> 1:35:05.160 demand across the hotel properties out in Long Island, as 1:35:05.200 --> 1:35:07.679 you know, that's that's where it all happens in the summertime. 1:35:07.680 --> 1:35:10.960 It's a seasonal business, and we've been rocking. We'll probably 1:35:11.040 --> 1:35:13.840 go until around the end of October and then we'll 1:35:13.880 --> 1:35:15.080 settle into the winter months. 1:35:15.479 --> 1:35:18.160 Well, what about getting employees. If we were to speak 1:35:18.160 --> 1:35:19.560 to you two years ago, I know you would have 1:35:19.800 --> 1:35:22.559 said it's tough to find employees to uh, to work 1:35:22.600 --> 1:35:25.160 in the restaurants. Tell us about how tough it is 1:35:25.240 --> 1:35:28.320 to get those employees, and then also tell us about 1:35:29.360 --> 1:35:31.120 food costs and if they're going down. 1:35:32.200 --> 1:35:35.599 Yeah, Starting with food costs, I mean, we have seen 1:35:35.800 --> 1:35:39.439 a drastic decrease in our food cost as supply chain 1:35:39.520 --> 1:35:43.639 has gotten better. You know, thankfully we're able to pass 1:35:43.760 --> 1:35:46.439 that along to our guests, and we're seeing that across 1:35:46.479 --> 1:35:49.040 all of our restaurants in all of our markets. The 1:35:49.320 --> 1:35:53.320 food hike, the food cost hikes were kind of universal. 1:35:53.400 --> 1:35:55.600 It didn't matter market to market. Eggs we're still, you know, 1:35:55.680 --> 1:35:58.559 wildly expensive. Gas was wildly expensive. That was all passed 1:35:58.600 --> 1:36:00.920 on to us and there for our guests. So from 1:36:00.960 --> 1:36:05.240 a food cost perspective, we're seeing things drastically reduced. There 1:36:05.320 --> 1:36:08.080 still are some pockets, I would say, a lot of 1:36:08.120 --> 1:36:10.920 proteins like beef I still very very high. I'm not 1:36:10.960 --> 1:36:12.840 sure that's ever going to get better. To be honest 1:36:12.880 --> 1:36:15.000 with you, it may just be a change in the 1:36:15.080 --> 1:36:16.840 way that we construct our menus in the way that 1:36:16.920 --> 1:36:18.160 our guests actually eat. 1:36:19.200 --> 1:36:21.920 From a labor perspective, we are starting to see some uptick. 1:36:22.280 --> 1:36:25.479 We've we've hired on let's call re hired a lot 1:36:25.520 --> 1:36:28.760 of people that were pre pandemic hospitality employees. So in 1:36:28.840 --> 1:36:31.360 other words, we're bringing folks in that who have had 1:36:31.600 --> 1:36:33.960 experience in the past, whereas I would send in the 1:36:34.040 --> 1:36:36.840 last couple of years we were training from zero, which 1:36:36.960 --> 1:36:40.160 is fantastic for us, and I think that that guest 1:36:40.240 --> 1:36:42.439 experience is drastically improved in that way. 1:36:43.320 --> 1:36:44.439 I still think that we. 1:36:45.920 --> 1:36:48.800 You know, hot topic, you know, when we figure out 1:36:48.880 --> 1:36:53.760 a sensible kind of reaction to our borders, that will 1:36:53.800 --> 1:36:56.120 be kind of the last domino for us to fall 1:36:56.479 --> 1:36:58.439 in order to equalize and be able to pass as 1:36:58.479 --> 1:36:59.599 savings on to our guests. 1:37:00.160 --> 1:37:02.559 So in your view, do you really think the economy 1:37:02.680 --> 1:37:03.120 is slowing? 1:37:03.760 --> 1:37:07.280 In my view, well, compared to what right, compared to 1:37:07.360 --> 1:37:11.719 a year ago, we're drastically up from last year compared 1:37:11.720 --> 1:37:14.880 to two years ago. Obviously, what I would say is 1:37:14.960 --> 1:37:17.280 what we're seeing is the sort of bifurcation of spending. 1:37:17.840 --> 1:37:20.080 We'll have some folks that join us who, let's say, 1:37:20.120 --> 1:37:22.800 are not big spenders. They're out for an experience, and 1:37:22.880 --> 1:37:25.600 then we'll have some folks who are clearly out to 1:37:26.000 --> 1:37:28.000 party and have a great time and who will have 1:37:28.080 --> 1:37:30.040 a drastic spend. So what I would say is, I'm 1:37:30.080 --> 1:37:32.720 starting to see a split of sort of people that 1:37:32.800 --> 1:37:35.280 are willing to kind of separate with those those dollars 1:37:35.320 --> 1:37:38.800 and people that are remaining sort of tight. But we 1:37:38.960 --> 1:37:41.400 have not seen a drop in reservations, which for us 1:37:41.560 --> 1:37:42.439 is kind of the tell. 1:37:42.760 --> 1:37:44.639 Hey, go back to chef what you were saying about 1:37:44.640 --> 1:37:47.600 immigration and border policy here and connect that to what 1:37:47.720 --> 1:37:48.479 you see at restaurant. 1:37:48.479 --> 1:37:52.400 At the restaurants, well, you know, I can only speak 1:37:52.400 --> 1:37:55.000 from my experience, and it's anecdotal, right, I don't I'm 1:37:55.040 --> 1:37:56.720 not coming from a place of data. But I can 1:37:56.760 --> 1:37:59.000 tell you who our applicants are, and I can tell 1:37:59.000 --> 1:38:02.240 you where they're from. What we used to have is 1:38:02.400 --> 1:38:05.120 quite a bit of Latino applicants, especially in the back 1:38:05.160 --> 1:38:08.320 of the house, and that has changed. We are now 1:38:08.760 --> 1:38:11.680 not as not employing as many, and a lot of 1:38:11.720 --> 1:38:14.679 those that we are employing our first time hospitality employees. 1:38:15.120 --> 1:38:17.519 So I'm not sure if there was a move around 1:38:17.560 --> 1:38:20.000 the United States and move back home to their home countries. 1:38:20.560 --> 1:38:24.280 But I can tell you that the hospitality workforce is 1:38:24.320 --> 1:38:27.040 severely understaffed and that would make a. 1:38:27.160 --> 1:38:28.160 Huge chunk for us. 1:38:29.760 --> 1:38:31.720 It has to be sensible, but it has to be soon, 1:38:32.680 --> 1:38:36.360 and that would probably mark a drastic change in your 1:38:36.400 --> 1:38:39.040 guest experience, its being better and the price that we 1:38:39.120 --> 1:38:39.639 have to charge. 1:38:40.280 --> 1:38:42.519 That's so interesting to hear, and because I think that 1:38:43.200 --> 1:38:45.920 part of the conversation often gets lost when we talk 1:38:45.960 --> 1:38:49.720 about immigration policy, because it's so polarizing when you have 1:38:49.800 --> 1:38:53.920 Democrats and Republicans fighting about it, and it actually sounds 1:38:54.000 --> 1:38:57.080 very clear from you. I'm wondering if you do any 1:38:57.160 --> 1:39:01.000 work in telling your local legislator about this, if you've 1:39:01.080 --> 1:39:04.320 partnered with any other restaurants to talk about this, because 1:39:04.320 --> 1:39:05.960 there are serious economic implications here. 1:39:07.439 --> 1:39:09.960 It is, it is polarizing, and I think that you know, 1:39:10.120 --> 1:39:12.560 I'm a small business owner and I'm I'm I'm not 1:39:12.680 --> 1:39:15.360 coming at it from a political point of view. It's 1:39:15.400 --> 1:39:18.840 simply spaces that we need filled. We do some work 1:39:18.880 --> 1:39:21.280 with our local folks in each one of our markets. 1:39:21.520 --> 1:39:23.040 We do a lot of work also in some of 1:39:23.120 --> 1:39:28.080 the training and onboarding of folks. You know, unfortunately, you know, 1:39:28.120 --> 1:39:31.360 the hospitality industry is one it is the largest employer 1:39:31.439 --> 1:39:34.400 in America. But our voice is not quite as unified 1:39:34.400 --> 1:39:36.920 as I think it probably could be nationally. And that 1:39:37.000 --> 1:39:39.200 could just be you know, a difference between states and 1:39:39.439 --> 1:39:42.120 and and also the competition in between. 1:39:42.240 --> 1:39:43.680 You know, small businesses. 1:39:43.880 --> 1:39:48.000 Talk to us about your YouTube series thank you. 1:39:48.560 --> 1:39:51.000 So, you know, during COVID, for the first time I 1:39:51.120 --> 1:39:55.360 had some some some some free time in probably twenty years, 1:39:55.800 --> 1:39:59.040 and I was looking around the media landscape of on 1:39:59.200 --> 1:40:01.559 the food scene, what's happening. And what I was finding 1:40:01.640 --> 1:40:03.080 is a lot of what was out there didn't speak 1:40:03.080 --> 1:40:05.680 to me. It was a lot of sort of how to, 1:40:06.680 --> 1:40:10.439 a lot of you know, a lack of why, a 1:40:10.520 --> 1:40:13.160 lack of why cook this way? Or why why this produce? 1:40:13.280 --> 1:40:16.840 And and I felt like that storytelling it's inside of me. 1:40:16.960 --> 1:40:19.280 It's how we weren't our restaurants. It's how we construct 1:40:19.320 --> 1:40:22.000 our menus and our concepts. But I didn't see it 1:40:22.080 --> 1:40:24.679 in the media. And so I wrote some short stories 1:40:24.800 --> 1:40:27.479 and I was lucky enough to get linked up with 1:40:27.880 --> 1:40:30.479 Jose Andres Media who who was a co producer and 1:40:30.560 --> 1:40:31.240 produced these. 1:40:32.720 --> 1:40:34.920 These pieces. You know, it's. 1:40:34.800 --> 1:40:38.599 Storytelling in the very simplest way. There's no talking, there's 1:40:38.760 --> 1:40:41.599 some music and ambient and it's sort of the chef's journey. 1:40:42.080 --> 1:40:44.840 The chef's journeys is about community, and it's about bringing 1:40:44.880 --> 1:40:47.280 people around a table. And I'm lucky enough to be 1:40:47.320 --> 1:40:50.240 able to be connected with these incredible farmers and fishers 1:40:50.320 --> 1:40:53.280 and wine makers and cheesemongers, and I really wanted to 1:40:53.360 --> 1:40:56.120 tell their story but in a way that was perhaps 1:40:56.240 --> 1:40:58.479 not loud and imbasticking in your face, but a little 1:40:58.520 --> 1:41:01.720 bit more subdued. Is about connectivity and mindfulness. 1:41:01.880 --> 1:41:04.599 How do you do this in a way that without talking? 1:41:05.360 --> 1:41:07.720 I think the visual is is quite impactful. 1:41:09.200 --> 1:41:11.519 We really spent a lot of time thinking about the 1:41:11.560 --> 1:41:14.000 best way to tell a story without words, and hopefully 1:41:14.080 --> 1:41:15.880 what that does is it brings a viewer in and 1:41:15.920 --> 1:41:19.439 they fill in the story. I mean, I would throw 1:41:19.479 --> 1:41:21.240 the question back to you, have you ever made a 1:41:21.320 --> 1:41:22.280 recipe off. 1:41:22.160 --> 1:41:23.600 Of something that you saw on television? 1:41:24.760 --> 1:41:27.840 I have, yeah, but it always requires me to go 1:41:28.000 --> 1:41:29.920 back and like google it because it's just the way 1:41:29.960 --> 1:41:32.680 my brain works, like inspired by it, you. 1:41:32.680 --> 1:41:34.000 Know, right? 1:41:34.479 --> 1:41:36.639 And I think that that's kind of what this series 1:41:36.720 --> 1:41:38.800 is supposed to do. It's supposed to inspire you to 1:41:38.880 --> 1:41:42.200 lean into where did those tomatoes come? From and how 1:41:42.280 --> 1:41:46.200 are they being used. Not necessarily how to treat the 1:41:46.280 --> 1:41:48.320 tomato and cut one inch and that sort of thing, 1:41:48.320 --> 1:41:51.880 because I frankly quite boring. I want to know where 1:41:52.240 --> 1:41:55.240 it come from and what was the life cycle of 1:41:55.280 --> 1:41:57.840 the tomato, not necessarily one inch or two inches. I 1:41:57.960 --> 1:42:02.040 find that actually most people would would say no to 1:42:02.120 --> 1:42:04.080 that answer that they don't cook from what they see 1:42:04.120 --> 1:42:08.320 on television. It's entertainment, and the style of entertainment that 1:42:08.439 --> 1:42:12.040 we're hoping to bring here with our partnership with Calm 1:42:13.040 --> 1:42:15.080 is one of mindfulness and connectivity. 1:42:15.360 --> 1:42:17.960 Yeah, once I get my cooking back calfs back on, 1:42:18.200 --> 1:42:19.800 I will definitely be doing this. 1:42:20.200 --> 1:42:24.479 I'm curious how you pick a particular food for each segment. 1:42:25.040 --> 1:42:28.280 Right, So what this series does is it focuses on 1:42:28.360 --> 1:42:31.960 a very small radius of locality. So within a couple 1:42:32.000 --> 1:42:34.520 of miles in Long Island, there's a small town called Southold, 1:42:35.000 --> 1:42:38.160 and inside of that there's a biodynamic farm called KK 1:42:39.120 --> 1:42:42.920 there is an oyster fishery called Little Ram and there's 1:42:42.960 --> 1:42:44.480 a cheesemonger called Coptapano. 1:42:44.880 --> 1:42:46.880 And what I really wanted to do is sort of 1:42:47.000 --> 1:42:48.080 bring you into this place. 1:42:48.160 --> 1:42:51.400 It's very special and dear to me and show you 1:42:51.520 --> 1:42:53.720 kind of what happens within a very small radius and 1:42:53.800 --> 1:42:56.800 a very intense kind of time as well. Summer of 1:42:57.160 --> 1:42:59.760 one year ago, basically summer of twenty twenty two. 1:43:00.600 --> 1:43:03.320 Hey, John, before we let you go, I am not 1:43:03.920 --> 1:43:07.599 very good in the kitchen. I gotta be honest. However, 1:43:07.760 --> 1:43:12.200 I loved the Bear, and I'm wondering if the popularity 1:43:12.240 --> 1:43:14.800 around the FX series The Bear has led to an 1:43:14.840 --> 1:43:17.160 increase in people just like wondering what happens in the kitchen, 1:43:17.560 --> 1:43:17.720 you know. 1:43:17.920 --> 1:43:21.679 I think I think there's a lot of conversation around 1:43:22.400 --> 1:43:26.439 also not only sort of the personality of a cook 1:43:26.720 --> 1:43:30.160 or what happens during a service. Yeah, so it's beyond 1:43:30.280 --> 1:43:33.160 the kind of recipes and sort of the action, but 1:43:33.280 --> 1:43:35.599 also the kind of the people that are producing those 1:43:35.680 --> 1:43:38.160 things and the kind of pressures that they're in. I'm 1:43:38.200 --> 1:43:40.120 thankful for that story to be out there because I 1:43:40.160 --> 1:43:42.519 think it's one that's it needed to be told. 1:43:43.360 --> 1:43:45.599 But also when you've got like a good looking dude 1:43:45.680 --> 1:43:46.160 cooking and. 1:43:46.200 --> 1:43:49.960 Screaming and yelling, there's like great inspiration that hopefully will 1:43:50.000 --> 1:43:51.400 come to more folks joining us. 1:43:51.960 --> 1:43:53.840 John Fraser, a restaurant ur and chef. He's the founder. 1:43:53.880 --> 1:43:55.920 If you have restaurants, we love it when you join us. 1:43:56.080 --> 1:43:56.679 Thanks so much. 1:43:58.280 --> 1:44:02.880 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:44:03.080 --> 1:44:06.759 and anywhere else you get your podcasts. Listen live weekday 1:44:06.800 --> 1:44:10.240 afternoons from three to six Eastern on Bloomberg dot com, 1:44:10.479 --> 1:44:13.760 the iHeartRadio app, tune In, and the Bloomberg Business app. 1:44:13.840 --> 1:44:16.759 You can also watch us live every weekday on YouTube 1:44:17.040 --> 1:44:19.040 and always on the Bloomberg terminal