Speaker 1: This is Bloomberg business Week Inside from the reporters and
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Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebec from Bloomberg Radio.
Speaker 1: I actually think it's Elon's world and we're just living
Speaker 1: in it. This next half hour. It is all about
Speaker 1: the world's richest man. He just reclaimed that title and
Speaker 1: his world, including his marquee company, Tesla, which yesterday in
Speaker 1: Austin hosted its investor day. Kind of a dud and
Speaker 1: bummer if you base it on how shares of Tesla
Speaker 1: trading down today looking to shave some fifty billion off
Speaker 1: its market cap. Not a dud though, Elon's comments when
Speaker 1: it comes to rare earths, listen up, we need to
Speaker 1: make just a very tryant amount of hannode cathode lithium.
Speaker 1: Looking my rockside commonant, it's really the refining capacity that
Speaker 1: is the biggest choke point. Yeah, so that's why we're
Speaker 1: building a Lethian refinery and Corpus Christie. All right, you
Speaker 1: were just hearing from Elon Musk at his investor day
Speaker 1: in Austin yesterday. Actually, I'm sorry. Our next guest is
Speaker 1: with us in Austin. We've got Bloombergs Sean o'caine. He
Speaker 1: was at Tesla's investor day. He's our EV reporter joining
Speaker 1: us from Zoom in Austin, Texas. Sean, great to speak
Speaker 1: with you. Tell us your impressions. How the meeting go well? First,
Speaker 1: actually I was watching just like everybody else online. There's
Speaker 1: there's no way Tesla's letting us in to something like that,
Speaker 1: unfortunately these days. But yeah, it was meandering. I think
Speaker 1: one of the things that we appreciated from the reporting
Speaker 1: side of things, and I think even some of the
Speaker 1: analysts appreciate it as well, was just seeing a very
Speaker 1: deep roster of Tesla executives and managers and employees who
Speaker 1: were on stage speaking and also taking questions. At the end,
Speaker 1: we got some face time with Tom Jou, who is
Speaker 1: essentially arguably the number two at Tesla right now, who
Speaker 1: was must brought him over late last year from helping
Speaker 1: run Tesla China to be able to sort of straighten
Speaker 1: out some of the early problems they've had at the
Speaker 1: factory here in Austin. So seeing all of that was
Speaker 1: really helpful, and hearing some new details about some of
Speaker 1: the things that they're working on was also exciting to
Speaker 1: some of the faithful. But yeah, we didn't get as
Speaker 1: much explicit information about new products that I think some
Speaker 1: people were expecting heading into the event, which is why
Speaker 1: I think we're seeing a little bit of a dip
Speaker 1: in the price today. Was there anything that he didn't say,
Speaker 1: what was missing that you felt was critical that he
Speaker 1: left out? I mean, the big thing is really this
Speaker 1: next gen vehicle platform. I mean, it was something that
Speaker 1: he explicitly teased would be discussed on the most recent
Speaker 1: elearnings call, and we got bits and pieces about their strategy,
Speaker 1: how they're approaching building it. We learned that primarily it
Speaker 1: will be built at the new factory in Mexico that
Speaker 1: was announced earlier this week by AMLO and confirmed by
Speaker 1: Musk last night. All the way in the back end
Speaker 1: of the event during the Q and A session, So
Speaker 1: we learned a little bit about it. We understand sort
Speaker 1: of how they're thinking about making it more efficiently, making
Speaker 1: it so that more employees can work on it at
Speaker 1: a time versus their cars now. But we didn't see
Speaker 1: what it looks like we didn't really get a price
Speaker 1: tag or a price range, and they have talked about
Speaker 1: being able to use that new platform to power different
Speaker 1: types of vehicles, but they were a little fuzzy on
Speaker 1: what those types of vehicles would be. And there's also
Speaker 1: not a lot of headroom for that to begin with,
Speaker 1: because Musk said last night that he doesn't think they're
Speaker 1: going to ever make more than ten different vehicles at all,
Speaker 1: and they already have about seven either on the road
Speaker 1: or in the pipeline that we know of. So that
Speaker 1: was I think the biggest thing that we were a
Speaker 1: lot of people were looking for and didn't really get.
Speaker 1: I don't even know where to begin or think about it.
Speaker 1: I mean, it's kind of wild. I feel like it's
Speaker 1: pure Elon. But you know, the thing, what he said
Speaker 1: about the rare earth minerals, that's a big deal, Sean,
Speaker 1: because there is a huge narrative, huge reporting space at
Speaker 1: Bloomberg and otherwise, you know, watching this amid the kind
Speaker 1: of China US tensions and you know the world competing
Speaker 1: for all of these minerals. I mean, is he upending
Speaker 1: evs and batteries? I mean, I think there's a lane
Speaker 1: for that for sure. I think they're his hesitants to
Speaker 1: get into mining full bore. You know, pun not intended
Speaker 1: probably means that that's not necessarily what's going to happen
Speaker 1: in the near term. I mean, he once again stressed
Speaker 1: this call of getting any other entrepreneurs, you know, out
Speaker 1: in the world involved in this sort of process. And
Speaker 1: you know, he thinks that, you know, even though Tesla's
Speaker 1: obviously now working on its own lithium refinery here in Texas,
Speaker 1: he thinks that that's not going to be enough, and
Speaker 1: there needs to be a lot more people doing that
Speaker 1: kind of material refining of the raw material which is
Speaker 1: in abundance and really, you know, sort of at the
Speaker 1: moment and in the near term doesn't really look like
Speaker 1: the supply of that is going to be a constrain.
Speaker 1: So he really thinks that refining it is going to
Speaker 1: be the constraint, which we heard in the quote. And
Speaker 1: so you know, if they were really reaching their hands
Speaker 1: down deep all the way to the bottom of the
Speaker 1: supply chain and being the ones that themselves were pulling
Speaker 1: materials out of the ground, maybe that would be a
Speaker 1: little bit different. We know that something they've entertained just
Speaker 1: a couple of weeks ago we reported that they have
Speaker 1: been considering buying sigma lithium, which is a minor here
Speaker 1: in North America. They've had talks with Glencore in the past.
Speaker 1: I think that was reported last year or the year before,
Speaker 1: So it's something that's on their mind and something he's
Speaker 1: talked about on earning skulls. But it's not quite as
Speaker 1: full bars as it might seem. That it was interesting
Speaker 1: to hear them confirmed that they actually broke around on
Speaker 1: the site in Corpus Christophers Refinery because up until literally yesterday,
Speaker 1: I had local officials down there telling me they haven't
Speaker 1: heard a peep from them in the last couple of
Speaker 1: months and they were unsure what was actually going on.
Speaker 1: All right, John, I'm going to do a little rapid
Speaker 1: fire with you and then we can kind of build
Speaker 1: some stuff out because I feel like with Ellen, there's
Speaker 1: always so many different moving parts. Okay, so roadster just quickly,
Speaker 1: did we get anything. No, we didn't really hear anything
Speaker 1: about that, So not really sure what the status of
Speaker 1: that is at the moment. What about the truck, the
Speaker 1: which one the cyber truck or the semi cyber truck.
Speaker 1: We are continuing a pace at trying to get the
Speaker 1: first few units built here in Texas later this year,
Speaker 1: but not until next year will we see any sort
Speaker 1: of real volume production site. You know. That's about all
Speaker 1: we got it updated on last night. Twitter the company
Speaker 1: the distraction Succession, So I'm going to run Twitter while
Speaker 1: Elan does other stuff. Anything surprisingly little about Twitter last night,
Speaker 1: because Musk does love a tangent. Although I do think that,
Speaker 1: you know, Succession was maybe winked at a little bit
Speaker 1: by having Tom Ju speak and having all these other
Speaker 1: people up there, if not to say here's who's going
Speaker 1: to take over the company if I decide to leave,
Speaker 1: like I've teased in the past, but to say, you know,
Speaker 1: look at this wealth of people that we have working,
Speaker 1: these bright minds that we have working on this company,
Speaker 1: running this company, so that you know, if I do
Speaker 1: go off and get distracted by something else and buy
Speaker 1: some other company that takes up all my time and money,
Speaker 1: the company's in good hands. All right. One more, and
Speaker 1: then Maddie, it's yours Ai, because my understanding is that
Speaker 1: I forget there was a column or something I've read
Speaker 1: and it was like, wait, you know, don't worry. Ellen's
Speaker 1: kind of done with Twitter. The shiny new thing is
Speaker 1: now AI and he's got his own little group working
Speaker 1: on it. Did any of that come up, not specifically
Speaker 1: about that report, but you know, Tesla is working very
Speaker 1: hard and spending a lot of resources on developing artificial
Speaker 1: intelligence in the sense that they're using neural networks to
Speaker 1: train their software that you know, handles all their driver
Speaker 1: assistance features. Also in the Tesla robot, which we got
Speaker 1: a glimpse of again yesterday. Is still not a lot
Speaker 1: of detail about that. So they are moving forward pretty
Speaker 1: fast on some of those some of that, but we
Speaker 1: it was honestly a little bit less of a feature
Speaker 1: of last night's presentation than I expected to hear. I
Speaker 1: was really excited, but I'm so sorry by the potential
Speaker 1: cost reduction on cars. I think fifty percent targeting a
Speaker 1: fifty percent cost reduction. Can you talk a little bit
Speaker 1: about the impetus for that. Yeah, it's interesting. I think
Speaker 1: one of the funny things about it, and maybe this
Speaker 1: is factoring into the market reaction, is that last night's
Speaker 1: event was less about flash and promises and more about fundamentals.
Speaker 1: And when's the last time that we've heard, you know,
Speaker 1: an event from teslad be more about fundamentals than and
Speaker 1: promises and big ideas. Yeah, the goal with this next
Speaker 1: generation vehicle platform, based on all the learnings that Tesla's
Speaker 1: done over you know, popularizing the model Y and building
Speaker 1: it out at huge volumes at least for them, is
Speaker 1: going to be able to let them get yeah, fifty
Speaker 1: percent cost reduction upfront as far as what it's going
Speaker 1: to cost him to build that vehicle, which you know
Speaker 1: is why people are so excited about it because it
Speaker 1: means that they could substantially lower the price of whatever
Speaker 1: vehicle they build or vehicles they build out of it.
Speaker 1: And they spent a lot of a lot of time
Speaker 1: talking about how they reached some of those cost reductions,
Speaker 1: how they've reduced their footprint and become more efficient. Um,
Speaker 1: you know, the story from the beginning, since must got
Speaker 1: involved with Tesla fifteen plus years ago, has been vertical integration,
Speaker 1: and so this was really a celebration of that strategy
Speaker 1: paying off for them, one that you know has sort
Speaker 1: of other companies and other startups in this space have
Speaker 1: tried to replicate, you know, are finding out how difficult
Speaker 1: it is. Rivan's the most recent example reporting sort of
Speaker 1: lackluster earnings earlier this week and burning tons of cash,
Speaker 1: still trying to do the same kinds of things. Yeah, Sean,
Speaker 1: really really quickly, Ross Scarber, he was there, Yes, he's
Speaker 1: he you know, he's he's sort of thrown up his
Speaker 1: hands and surrendered his board bid, but he was there.
Speaker 1: He seems to be one of the ones who was
Speaker 1: most happy about the presentation and the things that Tesla discussed.
Speaker 1: And you know, we'll see where he goes from here.
Speaker 1: If I don't know, I don't know what kind of
Speaker 1: role he's going to be playing going forward, but he's
Speaker 1: certainly trying to remain one of the latter voices on
Speaker 1: the sidelines, cheering this company on. Well, he's going to
Speaker 1: join us actually tomorrow too, So you know, maybe we'll
Speaker 1: pick your brain see what you're interested in from Ross Gerbern.
Speaker 1: See see how happy is post that meeting and changes
Speaker 1: perhaps and not looking for that board seat anymore. So okay,
Speaker 1: and you're incredible. Evie Reporter up Bloomberg News via zoom
Speaker 1: in Austin. You're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live weekdays from two to five pm Eastern
Speaker 1: on Bloomberg Radio. The Bloomberg Business app band you too.
Speaker 1: You can also listen live to our flagship New York station,
Speaker 1: Just Say Alexa play Bloomberg E Love and Dirty. We
Speaker 1: gotta get to my next joy. It's a most read
Speaker 1: story on the Bloomberg and I understand why because I mean, Carol,
Speaker 1: if you could take a private jet anywhere all the time,
Speaker 1: would you do it? Yes? Yes? You had me at
Speaker 1: Hello Yes, yes, right like I don't care if it's
Speaker 1: one minute all I would do it. I would do
Speaker 1: it all the time. And that's exactly what Elon Musk
Speaker 1: is doing. We were just talking about him. He's got Tesla,
Speaker 1: he's got Twitter, he's got the challenges of being the
Speaker 1: richest man in the world. That busy schedule requires a
Speaker 1: lot of private jet time. So here with more on
Speaker 1: this wild story. It's very interactive, so you really should
Speaker 1: check it out online on the Bloomberg terminal. We've got
Speaker 1: Bloomberg News Wealth Team reporters Sophie Alexander. She's one of
Speaker 1: the three writers on this story. Sophie, thank you so
Speaker 1: much for chatting with us about this. Did this story
Speaker 1: come about because of the college kid who was tweeting
Speaker 1: about Elon's flights or did it come about with something else? Yeah,
Speaker 1: I mean, and this is one that we've been wanting
Speaker 1: to do for a while, just because of the attention
Speaker 1: that Elon's flights have gone. And I got to say that,
Speaker 1: you know, Jack Tweeeney's work in his Twitter accounts definitely
Speaker 1: brought more attention to it. And you know, I think
Speaker 1: also just the fact that Ulon was so bothered by it,
Speaker 1: it made us think, Okay, well maybe let's take it,
Speaker 1: keep it. Look here, do you just want to poke
Speaker 1: the bear? Right? Is that what's going on, Sophie? Yeah,
Speaker 1: I mean I think everyone's just curious, and you know,
Speaker 1: Jack's done a great job of cataloging where this jet
Speaker 1: has been going, and I think we just wanted to
Speaker 1: take a step back and look at what that actually
Speaker 1: means over the course of the year. Did you talk
Speaker 1: to him for the story at all or were you
Speaker 1: really just like, yeah, we're doing our own reporting, but
Speaker 1: thanks for the idea. So yeah, we've talked to Jack before.
Speaker 1: I mean, he's been doing this as a sort of
Speaker 1: side project while he's in college. But our team, our
Speaker 1: data team scraped the our data from ADBs exchange, our
Speaker 1: ADSP Exchange, excuse me, which is where Jack also gets
Speaker 1: his data. So, yeah, you know what's interesting, You know, Sophie,
Speaker 1: we talk so much, and we just talked with our
Speaker 1: own Sean o'caine about the investor meeting at Tesla yesterday.
Speaker 1: Elon is someone who has a lot on his plate
Speaker 1: and seems to you know, excel by having a lot,
Speaker 1: whether it's Solar, whether it's the Boring Company, whether it's Ai,
Speaker 1: whether it's Tessa, whether it's you know, Rockets and you
Speaker 1: know SpaceX. Having said that, the ability to have a
Speaker 1: private jet and bop around the world and have that
Speaker 1: at your beck and call kind of makes it possible.
Speaker 1: And so tell us what you guys learned in putting
Speaker 1: this together and what he's been doing. Yeah, and I
Speaker 1: should add that this is just Elon's personal jet. This
Speaker 1: isn't a SpaceX jet or the Tesla jet that by
Speaker 1: the company. But yeah, I mean, this man is moving
Speaker 1: around a lot, and I think something that's been really
Speaker 1: interesting to see in the data is just like how
Speaker 1: much more he's flying after he's acquiring Twitter, especially of
Speaker 1: course to the Bay Area that really shot up after that,
Speaker 1: and it really just off shows the tool it takes
Speaker 1: to run five companies. I'll tell you what it takes.
Speaker 1: It takes Musk's jet flying around the Earth twelve point
Speaker 1: four times last year. I was just gonna say it, like,
Speaker 1: pick your data point, and again, you really need to
Speaker 1: experience this story on the terminal because Sophie, you guys
Speaker 1: did just such a cool job visualizing this. Sophie, what's
Speaker 1: your favorite data point here about about the flights that
Speaker 1: this man is taking. I think it's kind of fun.
Speaker 1: This is less of a data point, but I think
Speaker 1: it's kind of fun to see where he's going and
Speaker 1: you can sort of math along. You know, we don't
Speaker 1: know when he's in the jet or not, but because
Speaker 1: he tweets so much, we sort of do, you know,
Speaker 1: like so we have this great globe graphics so you
Speaker 1: can see, you know, in January he's in Hawaii on
Speaker 1: Larry Ellison's Island, then he's in April, and April he's
Speaker 1: in Berlin, and then later he's in Vancouver for a
Speaker 1: TED event, and then he's in Stout Polo and then
Speaker 1: in Rome, and then later in the year he's at
Speaker 1: the World Cup. So yeah, that I think that was
Speaker 1: the most fun to that's the other thing, that's so
Speaker 1: cool that you have the tweets imbedded in the story
Speaker 1: next to the locations. Well, it's just a reminder, right
Speaker 1: of the amount of data. I mean, someone who knows
Speaker 1: so much about data and the usage of it. But
Speaker 1: you think about all the information that's out there that
Speaker 1: enables you guys to I would say fairly easily have
Speaker 1: the data to put something like this together. That's right.
Speaker 1: Ul Must doesn't engage with reporters all that much, but
Speaker 1: we all know that he does engage with Twitter a lot. Yeah.
Speaker 1: I love too that you compare him to the other
Speaker 1: billionaires flying private jets. Must comes in at the top
Speaker 1: with one hundred and seventy one flights, Zucks got one
Speaker 1: hundred and fifteen, page at eighty five, and Ellison at
Speaker 1: eighty two. It's just it's so it's I think that's
Speaker 1: really cool that you you mapped all of that out.
Speaker 1: But of course, the carbon footprint here is a really
Speaker 1: big deal. Can you talk a little bit about the
Speaker 1: impact that his flights are causing. Sure? Yeah, that's that's
Speaker 1: two thundred and twelve metric tons of greenhouse gas roughly
Speaker 1: emitted in twenty twenty two from you know that personal
Speaker 1: jet alone, and so you know when you when you
Speaker 1: hear you know, the vague statistic or the vague fact
Speaker 1: that rich people are the one percent are the biggest
Speaker 1: emitters of these greenhouse gases compared to regular folks. You know,
Speaker 1: this is a good example of that. You know, that
Speaker 1: is one hundred and forty times more than the average
Speaker 1: Americans carbon footprint. And you know, we decided to compare
Speaker 1: it to Tesla's because of course, you know Musk, and
Speaker 1: so to make that up, a Tesla Model three would
Speaker 1: have to replace an average premium just combustion car for
Speaker 1: seven million miles to make that up. Some perspective for you. Hey, um,
Speaker 1: the title on the story is Elon Musk is so
Speaker 1: busy as private jet is taking thirteen minutes flight? So
Speaker 1: what is that thirteen minute flight? That's a good question.
Speaker 1: We're not totally sure what's going on there, but there
Speaker 1: are a handful of these fifteen minute flights. You know
Speaker 1: that they're just like either circling or going from like
Speaker 1: Hawthorne to Long Beach, which was like, you know, fifteen
Speaker 1: minutes away and there. It is just like interesting to
Speaker 1: go through all this data. You're seeing all different sorts
Speaker 1: of weird stuff like that, like you know, a trip
Speaker 1: from northern California and then circling around Las Vegas and
Speaker 1: then just going back to California, so as I think
Speaker 1: he was just like going up to see the lights.
Speaker 1: But these are the kinds of things that we're not
Speaker 1: going to have that much insight into us to like
Speaker 1: why that those things are happening. I think I remember
Speaker 1: our Twitter friend, the college student, tweeting that this out
Speaker 1: when it was happening, and a lot of the response
Speaker 1: was that maybe it was like a fueling thing, or
Speaker 1: it had to do with the staffing on the airplanes.
Speaker 1: I know you just explained very well that we're not
Speaker 1: going to know the reason, But does that seem plausible
Speaker 1: to you at all? Did that come up at all
Speaker 1: in your reporting? Yeah, totally possible that these could just
Speaker 1: be routine checks. There was also a period during the
Speaker 1: year where the plane was grounded for a while, and
Speaker 1: again Sweenie speculated that that was probably for some routine maintenance.
Speaker 1: But yeah, it's possible that it's all routine. It's possible
Speaker 1: that he's also just going up for a joy ride. Sophie.
Speaker 1: You know, you are a wealth team Reporter and Elon
Speaker 1: Musk recently getting back the title of the world's richest person.
Speaker 1: And I do think about, you know, we track so
Speaker 1: much when it comes to Elon and Tesla. I think
Speaker 1: about how we used to track, um, you know, when
Speaker 1: you would say some things and then when they came true.
Speaker 1: I mean, it's just we're obsessed with him. What is
Speaker 1: it that you think for someone who, like yourself, you know,
Speaker 1: tracks the world's rich people, what is it about Elon
Speaker 1: in particular that we are just also fascinated with? I mean,
Speaker 1: he is he makes himself such a public figure by
Speaker 1: nature of tweeting and by his activities. He's a total
Speaker 1: goofball in a lot of ways, and I think people, well,
Speaker 1: there's a total cultural personality there. There's a lot of
Speaker 1: Musk supporters, of course on Twitter, who will come to
Speaker 1: defend him at an instant. I think a lot of
Speaker 1: it has to do with the products that he's producing
Speaker 1: with Tesla and SpaceX. But it's also just like a
Speaker 1: remarkable thing for one individual to say, you know what,
Speaker 1: I'm going to buy this social media company and then
Speaker 1: actually follow through on it. I mean, we live in
Speaker 1: the capitalist society. Money is power, and this man has
Speaker 1: a lot of money, Sophie, really quickly, we've got thirty
Speaker 1: seconds left. What do you think is the biggest risk
Speaker 1: factor for Elon Musk potentially dropping off that highest spot
Speaker 1: of his on the rich list. I mean, I think
Speaker 1: everyone's watching this investor day. It's all about Tesla for
Speaker 1: Elon and for as well. Yeah, and so far, you know,
Speaker 1: what are we talking about? Fifty billion dollars being shaved
Speaker 1: off the market cap of Tesla because a little bit
Speaker 1: of a dad coming off that investor meeting yesterday. Hey, Sophie,
Speaker 1: thank you so much. Sophie Alexander, Wealth team reporter at
Speaker 1: Bloomberg News, joining on the phone in New York City.
Speaker 1: As Maddie said, this is a story to really be
Speaker 1: experienced online or on the Bloomberg because it's interactive. You
Speaker 1: play around with it and there's lots of fun and
Speaker 1: interesting data points. And I'm sure Elon is just loving
Speaker 1: it that we're like obsessed with his flights. I mean,
Speaker 1: she said it so well. He got upset about people
Speaker 1: talking about his flights, and that gave us a clue, Yeah,
Speaker 1: what we should cover and to be fair like security
Speaker 1: issues that because right now I think there's a well
Speaker 1: transit the information you're listening to The Bloomberg Business Week
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Speaker 1: Eastern on Bloomberg Radio, the Bloomberg Business app band you Doo.
Speaker 1: You can also listen live to our flagship New York station,
Speaker 1: Just Say Alexa Play Bloomberg e Love and thirty. This
Speaker 1: next story has it all for US celebrities, fugitives, and
Speaker 1: even the Fuji's. On that last point, Pras Michelle, you
Speaker 1: might remember him as a Grammy Award winning rapper, longtime
Speaker 1: member of Fuji's. What you may not know is his
Speaker 1: role in a high stakes negotiation between the US and China. Carrol.
Speaker 1: That's for sure. It is the cover story of the
Speaker 1: new issue of Bloomberg Business Week. It is mind blowing
Speaker 1: by the new issue out on newstands, now online at
Speaker 1: Bloomberg dot com, slash business Week on the Bloomberg terminals.
Speaker 1: So let's get to it with Bloomberg News Investigations reporter
Speaker 1: Anthony Cormier. He joins us here in our Bloomberg Interactive
Speaker 1: broker's studio. So I feel like Anthony that this story
Speaker 1: the more it gets told, the more riveting and the
Speaker 1: more cinematic it gets, so tell us about the member
Speaker 1: of the Fuji's and the connection with one MDB. Right, So,
Speaker 1: you know, pros Michelle is one of the founding members
Speaker 1: of the Fuji's, the nineties winning, nineties Grammy winning a
Speaker 1: rap act and he meant an unassuming, baby faced Malaysian
Speaker 1: businessman in two thousand and six at a nightclub and
Speaker 1: his life changed pretty dramatically after that. That Malaysian man
Speaker 1: was Jolo, the accused financier who who's facing very serious
Speaker 1: charges of embezzling from a Malaysian sovereign fund. And we
Speaker 1: picked this story up after you know, Joelo has been
Speaker 1: charged with multiple offenses, he's at least been been accused
Speaker 1: of bazzling money, and he asks for a favor from
Speaker 1: his dear friend Praz Michelle. So many different places to
Speaker 1: go on this one, and I feel like you got
Speaker 1: to love a story that is not only being told
Speaker 1: by us and all the esteemed business outlets out there,
Speaker 1: but it's also being told by page six. So let's
Speaker 1: go to it. First of all, how did these two
Speaker 1: come together and how did Praz get so intertwined? Right? Well,
Speaker 1: Praz had a process, a connector he's the kind of
Speaker 1: guy who has friends in business and in politics and
Speaker 1: in entertainment, and he you know, he meets Jolo at
Speaker 1: a party and they slowly become friends and they begin
Speaker 1: to explore these sort of business opportunities together. And Joe
Speaker 1: found that Praz had connections to the Obama White House
Speaker 1: and what they have been accused of is using straw
Speaker 1: donors to donate to Obama's twenty twelve election campaign. Many
Speaker 1: years go by, and Proz is essentially excuse me. Joe
Speaker 1: is essentially facing a slew of charges forfeit complaints and
Speaker 1: he needs some help some representation. Turns to his dear
Speaker 1: friend Pras and he says, listen, do you have any help?
Speaker 1: How can you connect me with a lawyer with representation
Speaker 1: so I can you know, make this thing go away?
Speaker 1: And that begins the sort of you know, saga of
Speaker 1: how Proz assembles a team. He goes to an old
Speaker 1: friend who connects him with a gentleman called Elliott Broidy,
Speaker 1: who is a Republican fundraiser from California, and they put
Speaker 1: together this plan where they intend to influence the new
Speaker 1: and perhaps chaotic Trump administration. Right they're hoping that they
Speaker 1: can they can get an end there, and then things
Speaker 1: take a turn. They go and they meet with and
Speaker 1: they meet with Joe, and you know, at this meeting
Speaker 1: they're introduced to a gentleman called Sun le Jeun, who
Speaker 1: is the Vice Minister of Public Secure Pity for the
Speaker 1: People's Republic of China, and they have a big question.
Speaker 1: They want to see if the Chinese can get back
Speaker 1: a critic who's living in the US overlooking Central Park.
Speaker 1: And this gentleman's called Guo Wangli and he's begun to
Speaker 1: make all of these absurd allegations about the PRC, and
Speaker 1: the Chinese want him back, and they say to Pras
Speaker 1: and his group of friends, can you get him back?
Speaker 1: And uh, you know that that leads again to very
Speaker 1: unusual set of circumstance. Well then what does PROS do
Speaker 1: after that? But you know there's a number of things
Speaker 1: that happened between there. But one night Pros is sleeping
Speaker 1: and the Chinese, including suddenly Sun, they're in the United States.
Speaker 1: They're trying to meet with top members of the White
Speaker 1: House with the administration, and they can't get anywhere. They
Speaker 1: the meeting doesn't happen, and so they phone pros basically
Speaker 1: and say get to the Four Seasons on fifty seven one,
Speaker 1: right across from our building. Get here now, and you
Speaker 1: know he arrives. There's this very cloak dagger scene where
Speaker 1: he's told to exit the hotel and circle it twice
Speaker 1: to make sure I'm not being tailed in his bag,
Speaker 1: his phone's going a bag and he's alone in a
Speaker 1: room with two chairs. He doesn't have any idea what's
Speaker 1: going on, and he's basically like, oh my gosh, they
Speaker 1: really they can't kill me in the Four Seasons. So
Speaker 1: let's bring in the editor of Business Week, Joe whatever, Joel.
Speaker 1: I mean, I feel like we could just listen to
Speaker 1: Anthony go on and on about this because and we will,
Speaker 1: because who cares about me right now? The quote, the
Speaker 1: quote that you hit in the story was they can't
Speaker 1: kill me in the Four Seasons. Give me a T shirt?
Speaker 1: Yeah exactly, Yeah, when you get there, Yeah yeah, I'll
Speaker 1: go ahead and keep reading. And the story. There's so
Speaker 1: many dimensions of the story and it just keeps you
Speaker 1: going until the end and then you're like, wow, I
Speaker 1: can't wait to watch the movie about this. But so
Speaker 1: the next turn in this story is basically going to
Speaker 1: be when the prose goes to trial. Right, So, what
Speaker 1: are the charges against him that the US is bringing
Speaker 1: because Washington. Yeah, yeah, he faces campaign finance allegations. He
Speaker 1: faces violating what's called the Foreign ageins Registration Act, essentially
Speaker 1: acting on behalf of a foreign government. He faces some
Speaker 1: very very serious offenses. And many of the people who
Speaker 1: were also charged in this case, they've already for lack
Speaker 1: of a word, they flipped. They're cooperating with US government
Speaker 1: now against prost protestincts. He says he's innocent, says, you know,
Speaker 1: I'm not going to accept a plead to a charge
Speaker 1: I didn't commit. He plans to fight it, and uh,
Speaker 1: you know, as far as we can tell, he's going
Speaker 1: to launch a pretty vigorous offense defense. You know, I
Speaker 1: have to say, we've been looking forward to talking to you,
Speaker 1: and Joel has been like kind of teeing us up
Speaker 1: and just giving us little nuggets because part of this coverage,
Speaker 1: there's your great story, the three of you, this reporting,
Speaker 1: but there's also this incredible sidebar that talks about I
Speaker 1: said page six, right, this is a story that we've
Speaker 1: reported on all the financial journalists, but also page six
Speaker 1: because of Leonardo DiCaprio and Kim Kardashian. So tell us
Speaker 1: about that part. So you know, as the agents are
Speaker 1: as the FBI agents are pursuing Jolo, they want to
Speaker 1: find out where his money went, what he was up to,
Speaker 1: and they knew that he partied all of the time
Speaker 1: with all kinds of a list celebrities. Leonardo DiCaprio, Las Vegas,
Speaker 1: with Kim Kardashian, the record producer Swizz Beats. He gave
Speaker 1: them extraordinary gifts. He had financed the Wolf of Wall
Speaker 1: Street for Leonardo di Caprio, And so they begin to
Speaker 1: squeeze these celebrities and it's a really rarely get a
Speaker 1: look at the way the FBI treats a list celebrities.
Speaker 1: And these documents that are reporting shows how serious they
Speaker 1: took these these cases. And they brought you know, in fact,
Speaker 1: Leo in his case, they brought him, they sat him
Speaker 1: down for this this long and sort of invasive interview.
Speaker 1: They brought him back before grand jury. They went through
Speaker 1: his emails, his BlackBerry men got grilled, held ell dog.
Speaker 1: He did rectually, he did, you know, he he had
Speaker 1: quite a lot that he did remember. And then if
Speaker 1: you read the report from the FBI. There's quite a
Speaker 1: lot of documents he didn't remember either, and you know,
Speaker 1: he had a pretty long and extensive history was showing,
Speaker 1: you know, while we know the parties, I think that's
Speaker 1: been pretty widely reported. What no one has known is
Speaker 1: how close they became. Their relationship went beyond this sort
Speaker 1: of you'll finance my film and you'll come into my
Speaker 1: yacht to let's build a billion dollar movie fund. Let's
Speaker 1: build an eco resort in an on an island. Let's
Speaker 1: you know, let's get money for this or for that.
Speaker 1: And you've got Leo connecting Joe with all of his
Speaker 1: you know, his buddies. I mean, their their relationship was
Speaker 1: much closer, I think than the public has known to
Speaker 1: this point. Okay, wait, Kardashian Kim, Yes, so play some poker?
Speaker 1: Does pretty well? She plays Bakaraye actually actually pretty well. Yes,
Speaker 1: she does very well. How well does she do? And
Speaker 1: what happens with the money? She does so well that
Speaker 1: she's up three hundred and fifty thousand dollars in ship
Speaker 1: one night, chips one one night, and she her security
Speaker 1: guard effect says, you got it. Those aren't your chips.
Speaker 1: You can't take them home. She's give them back to Joel,
Speaker 1: though Joela says no, no, they're for you. She has
Speaker 1: a note to do with this many chips. She walks
Speaker 1: to the casino counter. They literally give her a bag
Speaker 1: of two hundred fifty thousand dollars in one hundred dollar bills.
Speaker 1: They put it in her garbage bag. My favorite. She
Speaker 1: puts it on her She puts it in her carry
Speaker 1: on luggage and gets on a Southwest flight back to
Speaker 1: LA which is like, Ruth, I love you Southwest. But
Speaker 1: that was I think to many of us. Right there
Speaker 1: is beautiful. You can't make it up. It is perfects.
Speaker 1: You're welcome here. All the teaming up was right on
Speaker 1: the money. Anthony, thank you so much, Well done the
Speaker 1: whole team. Your investigation. Anthony Cormier, investigations reporter at Bloomberg News.
Speaker 1: Joe Webber, the editor of Business Week. This is the
Speaker 1: cover story. It's a must red. You're gonna have fun
Speaker 1: this weekend checking it out. This is Bloomberg. This is
Speaker 1: Bloomberg Business Week inside from the reporters and editors who
Speaker 1: bring you America's most trusted business magazine plus global business, financing,
Speaker 1: tech news. The Bloomberg Business Week Podcast with Carol Messer
Speaker 1: and Tim Stenebec from Bloomberg Radio. I'm bro Bloommco a
Speaker 1: journal now. But you let me drive? Oh no, no, no no, no,
Speaker 1: who's gonna drive home? Honey? Please, I'll do the riding gravels.
Speaker 1: Let me. I want to drive. It's a good question.
Speaker 1: This is the drive to the clothes Donkmunic Well, Brian
Speaker 1: up jog Down on Bloomberg Radio. All right, got just
Speaker 1: about eighteen minutes left in today's trading session, getting ready
Speaker 1: to wrap up with the Thursday trade. We've got equities, folks,
Speaker 1: as you just heard from Charlie, we're pretty much at
Speaker 1: our HAIs of the session now, really outperforming. Nastack go
Speaker 1: up just like the SMP about nine tenths of a percent.
Speaker 1: And this is despite the Yel curve, as we talked
Speaker 1: about earlier, all along the Yeel curve, treasuries we're seeing
Speaker 1: back above four percent. So that's pretty interesting. But it
Speaker 1: has to do with Atlanta President Raphael Bostick saying the
Speaker 1: Central Bank could be in a position to pause rad
Speaker 1: hikes sometimes this summer. Is that a pivot, I don't know,
Speaker 1: but it's something to consider. It is absolutely something to
Speaker 1: consider that we are definitely going to get into with
Speaker 1: our next guest, It's time for the drive to the
Speaker 1: Clothes back with us. JJ Kinahan's CEO at IG North
Speaker 1: America on Zoom with us from Chicago. JJ, thanks so
Speaker 1: much for being here to chat with us. We're gonna
Speaker 1: talk about a lot with you, JJ, But I do
Speaker 1: want to just kick it off with that news that
Speaker 1: Carol was just talking about Bostick Today. Markets like it.
Speaker 1: Is it Dovish? What's your take? The markets do like it,
Speaker 1: but the markets have been a bit like a spoiled child,
Speaker 1: if you're going to be honest. And what I mean
Speaker 1: by that is, I don't think that in general, Chairman
Speaker 1: Powell has actually wavered much from the fact that he's
Speaker 1: going to keep raising rates until he feels that we're
Speaker 1: in a good place. And the market every time there's
Speaker 1: some hint that we won't raise at the same pace,
Speaker 1: or we'll slow down a little bit, starts to rally,
Speaker 1: people get excited, and then you know, it seems like
Speaker 1: a few weeks later, we raise rates or he says
Speaker 1: what he's going to do again, and it's almost like
Speaker 1: you keep testing them, and you know he's saying you're
Speaker 1: gonna get punished. You're gonna get punished, So we don't
Speaker 1: believe him and continue to try. But at the end
Speaker 1: of the day, I think what this does give people
Speaker 1: home for is either a pause or maybe you go
Speaker 1: to quarter point from half point, so the pace starts
Speaker 1: to slow down, and it does get the market a
Speaker 1: little bit excited. But overall, as I said, the market
Speaker 1: just hasn't really wanted to pay attention and I don't
Speaker 1: think Chairman Powell's way for a whole lot over the
Speaker 1: last year and a half. Yeah, dollar index clinging onto gains,
Speaker 1: no surprises, yields and moved up JJ and we're still
Speaker 1: holding among that four percent level when it comes to
Speaker 1: charge yield across the curve. Having said that, things are
Speaker 1: getting more expensive. We talk about it with you know,
Speaker 1: corporate real estate, We you know, talk about it with
Speaker 1: the housing market. We talk about so many different things,
Speaker 1: and yet you see that enthusiasm in the equity markets.
Speaker 1: You see a lot on your platform. What are you
Speaker 1: seeing when it comes to trades and trends? How are
Speaker 1: investors largely trading? So it's been a really interesting Carol
Speaker 1: over the last few months. What we've seen is a
Speaker 1: real switch from individual names. No surprise, right. You guys
Speaker 1: report about this all the time, that the individual names
Speaker 1: maybe don't have as much interest from the retail trader
Speaker 1: as they did, you know a year, year and a
Speaker 1: half ago. What we've seen is a lot of people
Speaker 1: trading more index based things. And what I mean by
Speaker 1: that our epos, particularly like spyqq etc. What has been
Speaker 1: interesting is this year we started to see the return
Speaker 1: of the individual name, particularly Tesla, Microsoft Apple, sort of
Speaker 1: the names you would expect, and we had that nice
Speaker 1: run over the last seven trading days. Going into today,
Speaker 1: what we had seen is that Microsoft Apple, those two
Speaker 1: protect names were down almost twenty percent in terms of
Speaker 1: the amount of trading that we had seen, and Tesla
Speaker 1: had fallen off by almost thirty percent. You know, after
Speaker 1: it's great rally until last Friday, we're starting to see
Speaker 1: a big interest again in Tesla, and to me, Tesla
Speaker 1: along with Bitcoin, to be quite honest with you, I
Speaker 1: use as real barometers of retail investor confidence because those
Speaker 1: are two stocks that definitely as people are feeling better,
Speaker 1: they start to a stock in a digital asset that
Speaker 1: as people start to feel better, they are buying more
Speaker 1: of As people are more unsure, they start to cut
Speaker 1: their trading in there or even sell them. So I
Speaker 1: think we're at a really interesting crux right now as
Speaker 1: we head into February, the middle of February and into
Speaker 1: the end of this first quarter as to will this
Speaker 1: confidence continue. But the fact is, wait, sorry, go back
Speaker 1: for a second. So JJ, what you're saying is that
Speaker 1: we saw people switch out right from individual names and
Speaker 1: trading index space was a beginning of this year. Are
Speaker 1: you talking about last year? That was the end of
Speaker 1: last year and into the beginning of this year. As
Speaker 1: this year has progressed. I'm sorry, let me be more
Speaker 1: clear in that description. As this year has progressed, we've
Speaker 1: seen more interest in individual names as we rallied those
Speaker 1: first few weeks of the year, a lot of individual names,
Speaker 1: and then Tesla, which is one that I look at
Speaker 1: a lot, is the one that fell off, and it's
Speaker 1: trading particularly over the last two weeks thirty percent until
Speaker 1: last Friday. Since last Friday, we've started to see an
Speaker 1: uptick again. I mean, you know, the week's only a
Speaker 1: few days old here, but Tesla started to pick up
Speaker 1: their trading interest again, which is a good sign to
Speaker 1: me in that the retail trader is now getting a
Speaker 1: bit more confidence in the market. And you see that
Speaker 1: similarly with Apple, kind of a similar idea. Apples us
Speaker 1: a bit of a trade a trailer behind Tesla and so.
Speaker 1: But but Tesla, it used to be Apple and Microsoft
Speaker 1: used to be the leaders that switched, where Tesla is
Speaker 1: now the leader of retail confidence. So it doesn't seem
Speaker 1: to worry you much Tesla dropping by a ton today,
Speaker 1: you're still thinking that just the volume there is a
Speaker 1: good indication. Yeah, because what you're seeing is people after
Speaker 1: when when things worrying me is when people stop buying
Speaker 1: on the drop where they're like, Okay, we'll buy some
Speaker 1: if you drop, we'll buy more. And I think one
Speaker 1: of the great lessons the retail investor has taken from
Speaker 1: the memestock craze, etc. Is to not put all their
Speaker 1: eggs in one basket, if you will, to start to
Speaker 1: trade more like a professional in that is, you know,
Speaker 1: nibble at different levels, not I have to be one.
Speaker 1: Are you starting We've only got what twelve minutes left
Speaker 1: in the session. Are you seeing buyers come back into
Speaker 1: the market for Tesla as we're getting ready to wrap
Speaker 1: up the day. Any signs of that team. Yes, we've seen, Yes,
Speaker 1: we're starting to see the stepronom. More people starting to
Speaker 1: buy test slat about stocks and some call options. And
Speaker 1: I want to broaden out a little bit because you're
Speaker 1: talking a lot about the retail investor and we're only
Speaker 1: going to have about like three seconds with you on this.
Speaker 1: What do you advise the average retail investor to do
Speaker 1: with this market? Like we are in such a weird time.
Speaker 1: What would your advice be? What should they be looking
Speaker 1: at a little bit of just what I just said,
Speaker 1: And that is whatever it is you decide to do,
Speaker 1: you only do a portion of your investment overall. This
Speaker 1: second thing is you have to be patient because we
Speaker 1: have seen this back and forth. No real reason to
Speaker 1: leave right now. In my opinion that the S and
Speaker 1: P five hundred breaks out of the thirty seven hundred
Speaker 1: on the downside forty two hundred range on the upside
Speaker 1: convincingly either way for the next month, month and a
Speaker 1: half or so. There just doesn't see empowering some you know,
Speaker 1: random weird event. Everything else happening seems to be keeping
Speaker 1: us in a range all right. Interesting, interesting, interesting, um
Speaker 1: JJ Kinahan, thank you so much, so appreciated, Chief Executive
Speaker 1: Officer of IG North America, joining us via zoom from Chicago.
Speaker 1: And this as we are seeing stocks pretty much at
Speaker 1: their highs of the session, just rolling over a little bit,
Speaker 1: but up about eight tens of a percent above the
Speaker 1: S and P and the NASDAC and Maddie, this is
Speaker 1: still as yields, you know, holding on to those for
Speaker 1: the most part, yet four percent levels across the current
Speaker 1: crazy This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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