1
00:00:02,520 --> 00:00:17,280
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:20,360 --> 00:00:23,119
Speaker 2: This is Wall Street Week. I'm David Weston, bringing you

3
00:00:23,200 --> 00:00:26,920
Speaker 2: stories of capitalism. President Trump's visit to the FED did

4
00:00:26,920 --> 00:00:30,800
Speaker 2: not influence the Fed's decision. Our special contributor Larry Summers

5
00:00:30,840 --> 00:00:32,960
Speaker 2: gives us his take on the difference between what the

6
00:00:33,000 --> 00:00:35,840
Speaker 2: White House and the Central Bank think the economy needs.

7
00:00:36,800 --> 00:00:40,080
Speaker 2: Plus the Battle for the Sky one thousand miles up.

8
00:00:40,560 --> 00:00:43,600
Speaker 2: Elon Musk is way ahead in launching his network of

9
00:00:43,720 --> 00:00:47,519
Speaker 2: low earth orbital satellites to connect the globe. Can anyone

10
00:00:47,600 --> 00:00:52,199
Speaker 2: catch him? And looking to markets to help address climate change,

11
00:00:52,520 --> 00:00:56,000
Speaker 2: Tom Montag of Rubicon Carbon explains his big deal with

12
00:00:56,080 --> 00:01:01,760
Speaker 2: Microsoft and his high hopes for voluntary carbon markets. But

13
00:01:01,880 --> 00:01:04,920
Speaker 2: we start with the question on everyone's mind on Wall

14
00:01:04,920 --> 00:01:08,560
Speaker 2: Street this week, just how bad might these tariffs turn

15
00:01:08,600 --> 00:01:12,120
Speaker 2: out to be? On the August first deadline? John Dedario

16
00:01:12,360 --> 00:01:15,240
Speaker 2: is CEO of the music company founded by his grandfather

17
00:01:15,360 --> 00:01:16,360
Speaker 2: that bears his name.

18
00:01:17,080 --> 00:01:19,040
Speaker 3: We're dealing with it right now in a big way.

19
00:01:19,640 --> 00:01:23,120
Speaker 3: So for example, last year we estimate that the total

20
00:01:23,200 --> 00:01:26,120
Speaker 3: amount on tariffs that we paid for both raw materials

21
00:01:26,120 --> 00:01:28,440
Speaker 3: and finished goods that were imported in the US to

22
00:01:28,440 --> 00:01:30,960
Speaker 3: the tune of roughly about seven hundred thousand dollars. Based

23
00:01:31,000 --> 00:01:33,200
Speaker 3: on the incremental tariffs that we're dealing with this year,

24
00:01:33,319 --> 00:01:35,039
Speaker 3: that's going to triple. It's going to be close to

25
00:01:35,080 --> 00:01:37,000
Speaker 3: two point two million, is what we're estimating by the

26
00:01:37,080 --> 00:01:39,399
Speaker 3: end of the year will be paying in incremental.

27
00:01:38,959 --> 00:01:41,280
Speaker 4: Tariffs, So that's a big threat to us.

28
00:01:41,920 --> 00:01:45,360
Speaker 2: Didario is the largest company in the world specializing in

29
00:01:45,400 --> 00:01:49,680
Speaker 2: the design, manufacture, and distribution of accessories for musical instruments,

30
00:01:50,200 --> 00:01:53,840
Speaker 2: everything from strings for guitars and violins, to drumsticks and

31
00:01:53,920 --> 00:01:58,120
Speaker 2: drumheads and snare wires for drums, to reads and mouthpieces

32
00:01:58,160 --> 00:01:58,960
Speaker 2: for woodwinds.

33
00:01:59,800 --> 00:02:02,880
Speaker 5: The factory, we're producing seven hundred and fifty thousand strings

34
00:02:02,880 --> 00:02:05,680
Speaker 5: per day on average. We use a wide range of materials,

35
00:02:05,880 --> 00:02:08,000
Speaker 5: both for the core or the foundation of the string,

36
00:02:08,000 --> 00:02:10,960
Speaker 5: as well as rap wires, which include nickel plated steel,

37
00:02:11,000 --> 00:02:14,559
Speaker 5: fot for bronze, titanium, silver, and in some cases gold.

38
00:02:14,880 --> 00:02:18,920
Speaker 2: The company traces its origins to seventeenth century Italy, moving

39
00:02:18,919 --> 00:02:21,560
Speaker 2: to the United States at the start of the twentieth century.

40
00:02:22,040 --> 00:02:24,200
Speaker 3: In nineteen oh five, there was an earthquake in the

41
00:02:24,200 --> 00:02:28,079
Speaker 3: town of Sally, and my great grandfather, Charles Dario emigrated

42
00:02:28,080 --> 00:02:30,560
Speaker 3: to the US at that time, and what he did

43
00:02:30,680 --> 00:02:34,120
Speaker 3: is he imported strings from his family and sent money

44
00:02:34,120 --> 00:02:36,600
Speaker 3: home to help them rebuild their homes literally. And then

45
00:02:36,639 --> 00:02:39,160
Speaker 3: when World War II came about it because of all

46
00:02:39,160 --> 00:02:41,240
Speaker 3: the trade embargoes, he had forced his hand to start

47
00:02:41,240 --> 00:02:44,320
Speaker 3: making strings himself in his basement in the Story of Queens.

48
00:02:44,360 --> 00:02:46,880
Speaker 3: And my family's been making strings in the US ever since.

49
00:02:47,520 --> 00:02:50,040
Speaker 2: So how big is your company in terms of employees.

50
00:02:50,639 --> 00:02:53,920
Speaker 3: In terms of employees, it's eleven hundred globally, majority of

51
00:02:53,919 --> 00:02:56,080
Speaker 3: which are here in Farmingdale, New York. Roughly about eight

52
00:02:56,160 --> 00:02:58,200
Speaker 3: hundred of those eleven hundred based here in New York.

53
00:02:58,320 --> 00:03:01,520
Speaker 3: And as far as the revenues can, we are roughly

54
00:03:01,520 --> 00:03:03,320
Speaker 3: about two hundred and forty million annually.

55
00:03:03,840 --> 00:03:06,400
Speaker 2: So tell us about the inputs. First of all, as

56
00:03:06,440 --> 00:03:11,919
Speaker 2: you manufacture strings, drumsticks, drumheads, reads, where do you get

57
00:03:11,919 --> 00:03:12,639
Speaker 2: the materials?

58
00:03:13,320 --> 00:03:17,640
Speaker 3: It comes from a wide variety of location. So starting

59
00:03:17,680 --> 00:03:21,560
Speaker 3: with the read business, we literally import the raw material

60
00:03:21,600 --> 00:03:24,240
Speaker 3: from our own plantations, which are based in the south

61
00:03:24,280 --> 00:03:27,040
Speaker 3: of France and in Argentina. So what we do is

62
00:03:27,080 --> 00:03:30,280
Speaker 3: we harvest cane from our own fields in those countries

63
00:03:31,000 --> 00:03:34,040
Speaker 3: and we pross them down into what we call splits,

64
00:03:34,080 --> 00:03:36,400
Speaker 3: and then we ship those splits to here into New

65
00:03:36,480 --> 00:03:40,320
Speaker 3: York where we pross them into finished reads. And then

66
00:03:40,440 --> 00:03:43,760
Speaker 3: when you look at the string business, we actually manufacture

67
00:03:43,800 --> 00:03:47,640
Speaker 3: the majority of our own raw materials. We source steal

68
00:03:47,720 --> 00:03:50,480
Speaker 3: rod from a variety of US sources, and then we

69
00:03:50,560 --> 00:03:53,280
Speaker 3: draw them down to find sizes that we subsequently used

70
00:03:53,320 --> 00:03:56,880
Speaker 3: to make strings. And then, of course, you know, there's

71
00:03:57,000 --> 00:03:58,960
Speaker 3: a very small percentage of our business. In fact, about

72
00:03:58,960 --> 00:04:02,320
Speaker 3: five percent of our business represents finished goods that we

73
00:04:02,680 --> 00:04:03,760
Speaker 3: source from overseas.

74
00:04:04,360 --> 00:04:07,360
Speaker 4: Ninety five percent is what we make is in the States.

75
00:04:07,400 --> 00:04:10,640
Speaker 3: But what we do source, of course, is predominantly from China,

76
00:04:11,000 --> 00:04:13,720
Speaker 3: and it ranges from a variety of accessories like tuners

77
00:04:13,760 --> 00:04:18,240
Speaker 3: and capos and instrument cables, and so that that's again

78
00:04:18,279 --> 00:04:19,880
Speaker 3: a small part of our business, but a very important

79
00:04:19,880 --> 00:04:20,600
Speaker 3: part of our business.

80
00:04:20,800 --> 00:04:23,160
Speaker 2: That's on the input side. What are the outputs? How

81
00:04:23,240 --> 00:04:25,480
Speaker 2: much of your product do you sell in the United States?

82
00:04:25,680 --> 00:04:26,640
Speaker 2: How much overseas?

83
00:04:27,040 --> 00:04:31,280
Speaker 3: So roughly fifty to fifty US and international. And what

84
00:04:31,320 --> 00:04:34,480
Speaker 3: we do internationally is we actually distribute our products in

85
00:04:34,480 --> 00:04:37,240
Speaker 3: over one hundred and thirty countries around the world, and

86
00:04:37,320 --> 00:04:39,440
Speaker 3: many of those markets we actually have our own distribution

87
00:04:39,560 --> 00:04:43,120
Speaker 3: company established, where we have sales marketing people on the

88
00:04:43,160 --> 00:04:46,800
Speaker 3: ground and we have our own logistics operations. So in fact,

89
00:04:46,920 --> 00:04:50,080
Speaker 3: our own distribution companies internationally control about fifty percent of

90
00:04:50,080 --> 00:04:51,960
Speaker 3: our international business and totality.

91
00:04:52,960 --> 00:04:56,760
Speaker 2: Given to Dario's dependence on imports and exports, it's no

92
00:04:56,920 --> 00:04:59,839
Speaker 2: surprise that dealing with new tariffs can have a profound

93
00:05:00,080 --> 00:05:03,560
Speaker 2: fact done its business. But John Dedario and his colleagues

94
00:05:03,600 --> 00:05:06,360
Speaker 2: are figuring out ways to cope with the changes.

95
00:05:07,400 --> 00:05:10,440
Speaker 3: Fortunately, though, we've done some hard work on onshoring a

96
00:05:10,480 --> 00:05:11,560
Speaker 3: lot of products.

97
00:05:11,240 --> 00:05:12,880
Speaker 4: That we previously sourced overseas.

98
00:05:13,520 --> 00:05:16,520
Speaker 3: So for example, just before the pandemic, we started our

99
00:05:16,520 --> 00:05:19,520
Speaker 3: own injection molding factory here in New York, and ever

100
00:05:19,560 --> 00:05:23,039
Speaker 3: since we've been gradually bringing products back from China to

101
00:05:23,080 --> 00:05:23,599
Speaker 3: the States.

102
00:05:23,880 --> 00:05:25,159
Speaker 4: So we did that before COVID.

103
00:05:25,720 --> 00:05:27,960
Speaker 3: During COVID, because of all the supply chain disruptures, it

104
00:05:28,000 --> 00:05:31,560
Speaker 3: actually forced us to accelerate the onshoring of things and

105
00:05:31,640 --> 00:05:34,919
Speaker 3: that's continued until now. So it's this onshoing initiative that

106
00:05:34,960 --> 00:05:37,479
Speaker 3: we've embarked on has really served us well, both through

107
00:05:37,520 --> 00:05:40,679
Speaker 3: COVID as well as now through the trade war. Certainly,

108
00:05:40,720 --> 00:05:44,320
Speaker 3: we're still running up against tariffs on products and raw

109
00:05:44,360 --> 00:05:47,599
Speaker 3: materials that we still source, but definitely to a lesser extent.

110
00:05:48,080 --> 00:05:50,560
Speaker 2: One of the goals stated by the Trump administration of

111
00:05:50,720 --> 00:05:54,480
Speaker 2: tariffs is to increase more onshoring, as it's called, really

112
00:05:54,800 --> 00:05:58,080
Speaker 2: production here in the United States. What percentage of that

113
00:05:58,120 --> 00:06:00,359
Speaker 2: tripling that you talked about in your cost do you

114
00:06:00,360 --> 00:06:02,120
Speaker 2: think you can take care of by onshowing?

115
00:06:03,600 --> 00:06:07,320
Speaker 3: I definitely think there's more opportunities to ensure additional products

116
00:06:07,320 --> 00:06:10,640
Speaker 3: and additional parts. I think we could pretty much cut

117
00:06:10,680 --> 00:06:13,039
Speaker 3: that tariff bill in half if we put our minds

118
00:06:13,080 --> 00:06:15,440
Speaker 3: to it. The thing is, though most companies don't think

119
00:06:15,520 --> 00:06:18,680
Speaker 3: that's possible. And what we've done is we've taken a

120
00:06:18,720 --> 00:06:21,839
Speaker 3: hard look at the total cost of ownership of actually

121
00:06:21,960 --> 00:06:24,880
Speaker 3: being in control of the manufacturing here, and at the

122
00:06:24,960 --> 00:06:26,520
Speaker 3: end of the day, it really makes a lot more

123
00:06:26,600 --> 00:06:28,480
Speaker 3: sense for us to do it here in terms of

124
00:06:28,520 --> 00:06:32,720
Speaker 3: control and in terms of quality and of course costsentertainment.

125
00:06:33,560 --> 00:06:35,960
Speaker 2: That reminds me of what happened I think during the

126
00:06:35,960 --> 00:06:39,920
Speaker 2: pandemic when companies. US companies had to redo their supply

127
00:06:40,040 --> 00:06:43,000
Speaker 2: chains and in some ways may have come out stronger.

128
00:06:43,160 --> 00:06:45,800
Speaker 2: Do you think you may come out stronger because of

129
00:06:45,800 --> 00:06:46,839
Speaker 2: the terror pressures.

130
00:06:47,400 --> 00:06:50,000
Speaker 3: I totally think so. I mean, we looked at COVID

131
00:06:50,400 --> 00:06:52,719
Speaker 3: not as a threat, but as an opportunity. As a company,

132
00:06:53,279 --> 00:06:55,840
Speaker 3: we're fortunate to have a very strong balance sheet, so

133
00:06:55,920 --> 00:06:58,120
Speaker 3: it served us well in getting through COVID and made

134
00:06:58,160 --> 00:07:00,240
Speaker 3: us a stronger company. And I definitely see this is

135
00:07:00,240 --> 00:07:02,680
Speaker 3: an opportunity to do the same. And as I mentioned before,

136
00:07:02,720 --> 00:07:05,680
Speaker 3: it's motivating us even more to ensure things that we

137
00:07:05,720 --> 00:07:08,680
Speaker 3: can control and of course then mitigate tariffs as a result.

138
00:07:09,160 --> 00:07:12,400
Speaker 2: Are you feeling margin pressure? Are you able to raise prices?

139
00:07:12,440 --> 00:07:13,520
Speaker 2: How do you accommodate that?

140
00:07:14,080 --> 00:07:16,160
Speaker 3: It really depends because we go to market with such

141
00:07:16,200 --> 00:07:19,720
Speaker 3: a wide variety of products, So in some cases we

142
00:07:19,760 --> 00:07:21,960
Speaker 3: could get away with a price increase to mitigate the

143
00:07:22,360 --> 00:07:24,640
Speaker 3: impact of tariffs. In other cases, it's just too competitive

144
00:07:24,680 --> 00:07:27,280
Speaker 3: for us to do that, so we sacrifice margin to

145
00:07:27,320 --> 00:07:28,640
Speaker 3: retain our market share.

146
00:07:29,040 --> 00:07:31,960
Speaker 2: In those examples, we've been talking about the effective tariffs

147
00:07:32,000 --> 00:07:35,160
Speaker 2: on inputs. What about exports? Because you do export, as

148
00:07:35,160 --> 00:07:38,360
Speaker 2: you say, about fifty percent of your product. How might

149
00:07:38,440 --> 00:07:41,400
Speaker 2: the trade disruptions actually affect your ability to export?

150
00:07:41,800 --> 00:07:45,640
Speaker 3: Well, you know, China is really a great example. Ten

151
00:07:45,720 --> 00:07:48,880
Speaker 3: years ago, we start our own distribution company in Shanghai.

152
00:07:49,600 --> 00:07:52,920
Speaker 3: The original objective of that distribution company was to help

153
00:07:53,000 --> 00:07:57,000
Speaker 3: us mitigate counterfeiting of our strings. So we have a

154
00:07:57,040 --> 00:07:58,800
Speaker 3: team of about a dozen people on the ground there

155
00:07:58,840 --> 00:08:00,760
Speaker 3: that keep their eyes in the years open for counterfeits

156
00:08:00,760 --> 00:08:02,840
Speaker 3: that are in market and really do a great job

157
00:08:02,840 --> 00:08:03,400
Speaker 3: of controlling that.

158
00:08:04,560 --> 00:08:06,600
Speaker 4: And so by also another reason why we.

159
00:08:06,560 --> 00:08:08,680
Speaker 3: Start our own distribution company there is to be more

160
00:08:08,720 --> 00:08:14,080
Speaker 3: competitive against Chinese brands. So when China imposed retaliatory tariffs

161
00:08:14,120 --> 00:08:17,320
Speaker 3: on our products going into China, it was a major

162
00:08:17,320 --> 00:08:19,400
Speaker 3: threat to our Chinese business. I mean, we're talking about

163
00:08:19,400 --> 00:08:21,640
Speaker 3: a business that's anywhere between five and ten million dollars

164
00:08:21,640 --> 00:08:24,320
Speaker 3: in an annual basis that suddenly is in jeopardy and

165
00:08:24,360 --> 00:08:27,120
Speaker 3: it made its difficult to compete with Chinese brands in market.

166
00:08:27,520 --> 00:08:31,760
Speaker 2: You have a successful business by all descriptions. It's not

167
00:08:31,840 --> 00:08:33,920
Speaker 2: the biggest business in the United States. There are big

168
00:08:33,960 --> 00:08:37,679
Speaker 2: PUBLICA traded companies. How do you think your ability to

169
00:08:37,720 --> 00:08:40,120
Speaker 2: respond to chairs are different from some of the big

170
00:08:40,280 --> 00:08:42,800
Speaker 2: public traded companies, Maybe better, maybe worse.

171
00:08:43,559 --> 00:08:45,480
Speaker 3: Well, you know, as a family business, one of the

172
00:08:45,480 --> 00:08:47,480
Speaker 3: great things about it is we can be very nimble

173
00:08:48,240 --> 00:08:52,040
Speaker 3: we're not interested in the short term, you know, financial benefit,

174
00:08:52,320 --> 00:08:55,480
Speaker 3: where our goal as a family is to have a sustainable,

175
00:08:55,559 --> 00:08:59,800
Speaker 3: successful business for many generations. So having that mindset allows

176
00:08:59,880 --> 00:09:02,760
Speaker 3: us to stay flexible and we can pivot when we

177
00:09:02,800 --> 00:09:05,040
Speaker 3: need to when the market conditions change.

178
00:09:05,840 --> 00:09:08,920
Speaker 2: The Dario is just one example of a global company

179
00:09:08,960 --> 00:09:12,319
Speaker 2: coming to terms with the Trump Administration's new approach to trade.

180
00:09:13,080 --> 00:09:16,559
Speaker 6: Companies are trying to cope with the impact of the trade.

181
00:09:16,280 --> 00:09:20,679
Speaker 2: Will Maxim Darmay is a senior economist at Alliance Trade,

182
00:09:21,080 --> 00:09:25,680
Speaker 2: which recently surveyed four five hundred companies across China, the EU,

183
00:09:26,000 --> 00:09:29,520
Speaker 2: the UK, and the US about how they are adapting

184
00:09:29,559 --> 00:09:31,440
Speaker 2: to tariff uncertainty.

185
00:09:31,760 --> 00:09:35,200
Speaker 6: US films are absorbing the cost into their markings, so

186
00:09:35,240 --> 00:09:38,280
Speaker 6: we're not really see the impact on inflation. That being said,

187
00:09:38,559 --> 00:09:41,120
Speaker 6: I think it's going to take very soon before we

188
00:09:41,120 --> 00:09:43,880
Speaker 6: start to see some impact on US inflation. I think

189
00:09:43,880 --> 00:09:45,520
Speaker 6: it's going to come very soon, by the fall at

190
00:09:45,520 --> 00:09:51,040
Speaker 6: the latest, because now inventories are running superlow, so you know,

191
00:09:51,080 --> 00:09:54,960
Speaker 6: at some points, I think US retailios, US host STOs

192
00:09:55,120 --> 00:09:58,280
Speaker 6: are going to start to pass on the cost of

193
00:09:58,320 --> 00:10:01,320
Speaker 6: the tariffs onto the consumer all the more so.

194
00:10:01,640 --> 00:10:02,440
Speaker 2: But now we have.

195
00:10:02,559 --> 00:10:05,520
Speaker 6: You know, turfs are pretty much being settled with bu,

196
00:10:05,720 --> 00:10:09,480
Speaker 6: with Japan, perhaps soon with Korea. So now businesses start

197
00:10:09,520 --> 00:10:11,920
Speaker 6: to know more or less what is going to be

198
00:10:11,960 --> 00:10:15,360
Speaker 6: the you know, the set turffs fifteen percent for the U,

199
00:10:15,440 --> 00:10:19,000
Speaker 6: fifteen percent for Japan, ten percent for the UK. So

200
00:10:19,040 --> 00:10:22,000
Speaker 6: now companies are more visibility, so they will start to

201
00:10:22,080 --> 00:10:28,040
Speaker 6: really pass on slowly into the prices the tips.

202
00:10:27,880 --> 00:10:31,480
Speaker 2: So as firms look to adjust their supply chains. Is

203
00:10:31,520 --> 00:10:34,199
Speaker 2: one of the alternatives actually manufacturing on shore in the

204
00:10:34,280 --> 00:10:36,920
Speaker 2: United States, which was after our President Trump's.

205
00:10:36,559 --> 00:10:41,280
Speaker 6: Goal, it is yeah, well it's really up to set

206
00:10:41,280 --> 00:10:44,120
Speaker 6: this point whether this goal will will succeed, right, it

207
00:10:44,120 --> 00:10:46,240
Speaker 6: would take many years. Well I can say is you know,

208
00:10:46,280 --> 00:10:50,080
Speaker 6: businesses tend to make the decisions, their investment decision over a.

209
00:10:50,120 --> 00:10:51,240
Speaker 4: Long time horizons.

210
00:10:51,240 --> 00:10:53,640
Speaker 6: So who knows is going to be after President Trump.

211
00:10:53,960 --> 00:10:55,880
Speaker 6: Maybe all these tarists are going to be removed or

212
00:10:55,880 --> 00:10:58,920
Speaker 6: some mystarius will be removed by the next president or

213
00:10:58,960 --> 00:11:03,120
Speaker 6: the next administration. So I'm quite skeptical, you know, but

214
00:11:03,559 --> 00:11:06,280
Speaker 6: you know, a full blow and restowing will happen into

215
00:11:06,360 --> 00:11:09,800
Speaker 6: the United States. That being said, potentially I think we

216
00:11:09,840 --> 00:11:13,800
Speaker 6: could see a couple of sectors starting to wishore a

217
00:11:13,840 --> 00:11:16,679
Speaker 6: little bit, so we could see some success happening in

218
00:11:16,679 --> 00:11:18,000
Speaker 6: the next couple of years.

219
00:11:18,200 --> 00:11:21,240
Speaker 2: As companies rerout their supply change, particularly when it comes

220
00:11:21,280 --> 00:11:23,720
Speaker 2: from China through a third country in the United States.

221
00:11:23,840 --> 00:11:26,480
Speaker 2: Does that mean some countries are benefiting actually from the

222
00:11:26,480 --> 00:11:28,400
Speaker 2: tariffs because they're getting more business.

223
00:11:28,600 --> 00:11:32,560
Speaker 6: China is going to remain central stage to the supply chain,

224
00:11:32,600 --> 00:11:36,840
Speaker 6: to the manufacturing supply chains. But other countries in Southeast Asia,

225
00:11:36,920 --> 00:11:39,120
Speaker 6: Southeast Asia, perhaps a little bit in Europe as well,

226
00:11:39,360 --> 00:11:43,160
Speaker 6: and North Africa as well, could benefit, could really get

227
00:11:43,160 --> 00:11:45,280
Speaker 6: a little bit of value added, if it makes sense.

228
00:11:47,559 --> 00:11:49,959
Speaker 2: Coming up, the FED is watching for the effects of

229
00:11:50,000 --> 00:11:53,920
Speaker 2: President Trump's policies. Our special contributor Larry Summers tells us

230
00:11:53,960 --> 00:12:01,280
Speaker 2: what the Central Bank's decision means for the economy. This

231
00:12:01,559 --> 00:12:04,520
Speaker 2: is a story about pressure. This week, the FED held

232
00:12:04,559 --> 00:12:07,600
Speaker 2: its July meeting, just a week after President Trump visited

233
00:12:07,679 --> 00:12:10,040
Speaker 2: Chair J. Powell at his office to tell him what

234
00:12:10,080 --> 00:12:11,839
Speaker 2: he thinks the Central Bank should do.

235
00:12:12,679 --> 00:12:15,199
Speaker 4: Too late, Too late, Pale, because he's always too late.

236
00:12:15,280 --> 00:12:16,880
Speaker 7: My I allowed to appoint myself at the FED.

237
00:12:16,920 --> 00:12:18,920
Speaker 2: I do a much better job than these people.

238
00:12:19,080 --> 00:12:21,080
Speaker 7: Well, I'd love him to lower interest rates.

239
00:12:22,280 --> 00:12:23,200
Speaker 1: Other than that, what.

240
00:12:23,120 --> 00:12:23,760
Speaker 7: Can I tell you?

241
00:12:23,960 --> 00:12:27,040
Speaker 2: But the President's visit did not persuade FED Chair Poal

242
00:12:27,320 --> 00:12:31,040
Speaker 2: to lower rates, at least not yet. Today, the Federal

243
00:12:31,040 --> 00:12:33,920
Speaker 2: Open Market Committee decided to leave our policy.

244
00:12:33,480 --> 00:12:34,760
Speaker 8: Interest rate unchanged.

245
00:12:35,120 --> 00:12:37,000
Speaker 2: We have made no decisions about September.

246
00:12:37,040 --> 00:12:38,520
Speaker 8: We don't do that in advance.

247
00:12:39,880 --> 00:12:43,079
Speaker 2: Special contributor Larry Summers joins us with what he expects

248
00:12:43,080 --> 00:12:45,640
Speaker 2: for the US economy. With President Trump and the FED

249
00:12:45,720 --> 00:12:47,680
Speaker 2: Chair on opposite sides.

250
00:12:48,920 --> 00:12:52,000
Speaker 7: There certainly are some risks of a downturn. There are

251
00:12:52,040 --> 00:12:57,240
Speaker 7: also some inflationary risks coming from the tariffs, coming from

252
00:12:57,520 --> 00:13:02,760
Speaker 7: general economic strength, and so he decided not to commit

253
00:13:03,200 --> 00:13:06,640
Speaker 7: but to preserve flexibility. I think that was the right

254
00:13:07,440 --> 00:13:12,400
Speaker 7: course of action for him to take. If the economy

255
00:13:12,440 --> 00:13:16,960
Speaker 7: turns down, there's the scope to cut rates very rapidly,

256
00:13:17,400 --> 00:13:20,520
Speaker 7: But if inflation's a problem, there's a risk of a

257
00:13:20,600 --> 00:13:25,640
Speaker 7: loss of credibility. If you're a responsible FED official, you've

258
00:13:25,640 --> 00:13:28,439
Speaker 7: got to remember that you got nervous about the economy

259
00:13:28,520 --> 00:13:32,880
Speaker 7: last September. You cut rates by fifty basis points, and

260
00:13:32,920 --> 00:13:36,920
Speaker 7: the upshot was a seventy five basis point increase in

261
00:13:36,960 --> 00:13:41,520
Speaker 7: the subsequent two months. In the tenure rate, which fed

262
00:13:41,559 --> 00:13:46,679
Speaker 7: through into a major increase in mortgage rates. So I

263
00:13:46,720 --> 00:13:50,960
Speaker 7: think what the Fed did was the prudent thing under

264
00:13:51,559 --> 00:13:56,719
Speaker 7: the circumstances. I wouldn't be wouldn't surprise me greatly if

265
00:13:56,760 --> 00:14:01,520
Speaker 7: it turned out that the economy had slow and we

266
00:14:01,640 --> 00:14:05,960
Speaker 7: wish we had cut rage now. But if that error

267
00:14:06,000 --> 00:14:10,160
Speaker 7: has been made, it's an easily correctable error, Whereas if

268
00:14:10,200 --> 00:14:16,440
Speaker 7: you made the opposite error and sacrificed credibility by moving excessively,

269
00:14:17,000 --> 00:14:20,760
Speaker 7: that would be a much more damaging and difficult to

270
00:14:20,880 --> 00:14:24,400
Speaker 7: reverse error. I think the other thing that needs to

271
00:14:24,440 --> 00:14:28,760
Speaker 7: be said here is you can argue both sides, as

272
00:14:28,800 --> 00:14:31,440
Speaker 7: I just did, about whether we should have a quarter

273
00:14:31,720 --> 00:14:34,280
Speaker 7: point rate cut in July, whether we should have two

274
00:14:34,400 --> 00:14:38,040
Speaker 7: rate cuts this year or three rates cuts this year.

275
00:14:38,800 --> 00:14:44,280
Speaker 7: I don't know of any economist who sees merit in

276
00:14:44,360 --> 00:14:47,880
Speaker 7: the president's idea that rates should be cut to the

277
00:14:47,960 --> 00:14:52,560
Speaker 7: one percent range, and I would want to hear what

278
00:14:53,200 --> 00:14:58,880
Speaker 7: his colleagues in the administration give as a rationale for

279
00:14:59,520 --> 00:15:05,160
Speaker 7: that kind of theory of interest rate setting, which, given

280
00:15:05,280 --> 00:15:11,480
Speaker 7: the current rather happy state of markets and rather strong economy,

281
00:15:12,000 --> 00:15:16,240
Speaker 7: seems to me to be a very very dangerous one.

282
00:15:16,960 --> 00:15:21,640
Speaker 7: That would course a major loss of credibility.

283
00:15:21,760 --> 00:15:24,080
Speaker 2: Perhaps Cherrpwell got it right, but he had at least

284
00:15:24,120 --> 00:15:25,960
Speaker 2: two of his colleagues who disagreed with him. He had

285
00:15:25,960 --> 00:15:28,560
Speaker 2: two dissenters for the first time since nineteen ninety three.

286
00:15:28,600 --> 00:15:30,520
Speaker 2: It's been a long time. So we had two dissenters,

287
00:15:30,880 --> 00:15:33,440
Speaker 2: and they weren't asking for a three hundred basis point

288
00:15:33,520 --> 00:15:36,320
Speaker 2: right cut. Maybe the twenty five basis point cut. But

289
00:15:36,400 --> 00:15:37,800
Speaker 2: what do you think that they're seeing. We're not.

290
00:15:38,480 --> 00:15:42,080
Speaker 7: I think they I don't think it's a complete coincidence

291
00:15:42,800 --> 00:15:48,240
Speaker 7: that who they were appointed by and in what context

292
00:15:49,360 --> 00:15:52,320
Speaker 7: that may not be a complete coincidence in terms of

293
00:15:52,440 --> 00:15:57,680
Speaker 7: understanding what's going on. Look, I think their argument is

294
00:15:57,920 --> 00:16:03,600
Speaker 7: that under the surface there's substantial economic weakness and it's

295
00:16:03,680 --> 00:16:10,240
Speaker 7: important to get ahead of the weakness. And my reaction is,

296
00:16:11,040 --> 00:16:14,840
Speaker 7: if that comes to be a prevailing judgment, the market

297
00:16:14,880 --> 00:16:18,200
Speaker 7: will do it do that itself, and it's the two

298
00:16:18,280 --> 00:16:20,400
Speaker 7: year rate and the five year rate and the ten

299
00:16:20,520 --> 00:16:24,280
Speaker 7: year rate that's more important for the behavior of demand,

300
00:16:25,040 --> 00:16:28,000
Speaker 7: and that to the extent the market doesn't do it itself,

301
00:16:28,440 --> 00:16:30,440
Speaker 7: the Fed will be able to do it six weeks

302
00:16:30,520 --> 00:16:37,240
Speaker 7: from now and be able to be more energetic if

303
00:16:37,280 --> 00:16:41,440
Speaker 7: that proved necessary. So I don't think there's any kind

304
00:16:41,480 --> 00:16:45,240
Speaker 7: of urgent need for the cut, and I think we

305
00:16:45,440 --> 00:16:49,680
Speaker 7: are a bit playing with fire. We have a central

306
00:16:49,720 --> 00:16:56,479
Speaker 7: bank that missed the last inflation badly. We have increased

307
00:16:56,560 --> 00:17:04,160
Speaker 7: politicization of everything finance. We have tariffs that are pushing

308
00:17:04,280 --> 00:17:10,080
Speaker 7: up prices, we have epic budget deficits. We've had a

309
00:17:10,160 --> 00:17:16,639
Speaker 7: period when the dollar has declined substantially. So a moment

310
00:17:16,840 --> 00:17:19,679
Speaker 7: like that seems to me to be a moment to

311
00:17:19,960 --> 00:17:24,280
Speaker 7: err on the side of preserving credibility rather than take

312
00:17:24,480 --> 00:17:31,000
Speaker 7: chances that could put a credibility risk. And that's why

313
00:17:31,080 --> 00:17:38,679
Speaker 7: I disagree with the judgments of Governor's Waller and Bowman.

314
00:17:39,000 --> 00:17:40,960
Speaker 2: One of the reasons for the Fed not to act

315
00:17:41,040 --> 00:17:44,600
Speaker 2: right now is uncertainty because of tariffs and tar Palla

316
00:17:44,640 --> 00:17:46,840
Speaker 2: address that that is taking some time to really be

317
00:17:46,920 --> 00:17:50,240
Speaker 2: reflected in the real economy. What everyone thinks of those tariffs,

318
00:17:50,280 --> 00:17:52,800
Speaker 2: and you've talked about it in this program before. We

319
00:17:52,920 --> 00:17:54,760
Speaker 2: have to admit President Trump has gotten a lot of

320
00:17:54,800 --> 00:17:56,720
Speaker 2: tariff deals done in a fairly short time.

321
00:17:57,640 --> 00:18:02,719
Speaker 7: Yeah, But the difficulty, David, from my perspective, is that

322
00:18:02,760 --> 00:18:08,600
Speaker 7: they're mostly self inflicted wounds. They're mostly putting taxes on

323
00:18:09,400 --> 00:18:13,760
Speaker 7: that raise the prices that American consumers pay, not just

324
00:18:13,840 --> 00:18:17,919
Speaker 7: on imported goods, but on the goods that compete with

325
00:18:18,440 --> 00:18:23,879
Speaker 7: imported goods. Affordability is the most important economic issue is

326
00:18:23,960 --> 00:18:29,200
Speaker 7: judged by American families, and tariffs are a direct attack

327
00:18:29,840 --> 00:18:35,440
Speaker 7: on the affordability of things that bought people buy. Tariffs

328
00:18:35,480 --> 00:18:41,480
Speaker 7: are also a blow to American manufacturing, because we're tariffing

329
00:18:42,040 --> 00:18:47,240
Speaker 7: the inputs on which our manufacturers depend. When we raise

330
00:18:47,280 --> 00:18:50,840
Speaker 7: the price of steel or aluminum, we make it more

331
00:18:50,880 --> 00:18:58,000
Speaker 7: costly to make cars. We make constructing homes more costly

332
00:18:58,440 --> 00:19:02,280
Speaker 7: at a time when we have a housing shortage. So

333
00:19:02,800 --> 00:19:06,760
Speaker 7: it seems to me that this idea that tariffs are

334
00:19:06,840 --> 00:19:12,800
Speaker 7: going to be somehow the salvation of the manufacturing sector

335
00:19:13,440 --> 00:19:19,520
Speaker 7: is not an idea that is seriously supported by analytical

336
00:19:19,800 --> 00:19:26,000
Speaker 7: work or by real evidence, And most of the economists

337
00:19:26,000 --> 00:19:30,280
Speaker 7: with expertise in this area who study it conclude that

338
00:19:30,560 --> 00:19:35,960
Speaker 7: probably it's as likely that this program will hurt manufacturing

339
00:19:36,480 --> 00:19:39,600
Speaker 7: as that it will help manufacturing, and that the one

340
00:19:39,640 --> 00:19:43,720
Speaker 7: thing that is certain is that it will raise prices

341
00:19:43,800 --> 00:19:48,760
Speaker 7: and reduce affordability, whether that increase in prices will be

342
00:19:48,840 --> 00:19:53,199
Speaker 7: a spiral of continuing inflation or one off. That's a

343
00:19:53,240 --> 00:19:56,120
Speaker 7: hard thing to judge, and it may well be only

344
00:19:56,160 --> 00:19:59,800
Speaker 7: a one off. But why would we want to have

345
00:20:00,119 --> 00:20:05,280
Speaker 7: of the major objective of American negotiation with our closest

346
00:20:05,320 --> 00:20:10,720
Speaker 7: allies be to impose something on them that they hate

347
00:20:11,560 --> 00:20:15,399
Speaker 7: in order to raise the prices of the goods that

348
00:20:15,520 --> 00:20:20,480
Speaker 7: American families buy. So I just don't get it.

349
00:20:20,720 --> 00:20:22,480
Speaker 2: President Trump has made no secret the fact that we

350
00:20:22,480 --> 00:20:25,719
Speaker 2: should expect a different FED chair come next May at

351
00:20:25,720 --> 00:20:29,560
Speaker 2: the expiration of Chair Pal's term. That raises the question

352
00:20:29,600 --> 00:20:31,720
Speaker 2: whether Chair Powell will stay on, because he has another

353
00:20:31,760 --> 00:20:34,120
Speaker 2: two years to remain on the board if he chooses.

354
00:20:34,800 --> 00:20:37,720
Speaker 2: Secretary Vessent has made no secret the fact that he

355
00:20:37,760 --> 00:20:40,840
Speaker 2: thinks it would be appropriate or even you would encourage

356
00:20:40,920 --> 00:20:43,760
Speaker 2: him to leave the board. Secretary Defenser was asked that

357
00:20:43,760 --> 00:20:46,000
Speaker 2: the news comfortability, he just refused to address it. What

358
00:20:46,000 --> 00:20:47,280
Speaker 2: do you think about that issue?

359
00:20:47,880 --> 00:20:55,000
Speaker 7: I don't understand why anybody would who was involved in

360
00:20:55,080 --> 00:21:00,280
Speaker 7: a complex set of negotiations and bargains would give up

361
00:21:00,280 --> 00:21:06,480
Speaker 7: any flexibility by making any prior commitments to people who

362
00:21:06,520 --> 00:21:10,320
Speaker 7: are bashing them every day. So I don't know what

363
00:21:11,000 --> 00:21:14,119
Speaker 7: Chair Powell will do. I suspect Chair Powell doesn't know

364
00:21:14,640 --> 00:21:18,920
Speaker 7: what he will do. It'll depend upon aspects of his life,

365
00:21:19,000 --> 00:21:21,920
Speaker 7: I imagine, and it will depend on who the next

366
00:21:22,000 --> 00:21:26,840
Speaker 7: FED chair is and what the sense is of how

367
00:21:26,880 --> 00:21:30,639
Speaker 7: the FED is going to operate going forward. But I

368
00:21:30,680 --> 00:21:34,680
Speaker 7: don't see any reason at all for why he should

369
00:21:34,880 --> 00:21:40,280
Speaker 7: prejudge that question anymore than you should prejudge the question

370
00:21:40,400 --> 00:21:42,359
Speaker 7: of how long you're going to do Wall Street Week,

371
00:21:42,480 --> 00:21:45,280
Speaker 7: or I should prejudge the question of how long I'm

372
00:21:45,320 --> 00:21:47,760
Speaker 7: going to be a professor At Harvard.

373
00:21:49,359 --> 00:21:52,480
Speaker 2: We had the one big beautiful bill, the one thousand

374
00:21:52,560 --> 00:21:57,480
Speaker 2: dollars setting aside investment for each new child born. You

375
00:21:57,520 --> 00:21:59,760
Speaker 2: and I've talked about that before, about whether that's enough

376
00:21:59,800 --> 00:22:01,920
Speaker 2: money and what the administrative costs are. But we now

377
00:22:01,920 --> 00:22:04,680
Speaker 2: have Secuary Bestent suggesting. I think he called it perhaps

378
00:22:04,720 --> 00:22:09,760
Speaker 2: a backdoor way of shoring up retirement savings and earnings

379
00:22:09,800 --> 00:22:12,520
Speaker 2: for people in the out years. What do you think

380
00:22:12,520 --> 00:22:14,560
Speaker 2: about that at a time when social security is under

381
00:22:14,600 --> 00:22:15,520
Speaker 2: increasing pressure.

382
00:22:15,800 --> 00:22:19,640
Speaker 7: I was surprised that Secretary Investment made the comment. I

383
00:22:19,720 --> 00:22:23,400
Speaker 7: was not surprised that having made the comment, he has

384
00:22:24,200 --> 00:22:28,880
Speaker 7: been backing off it since then. By trying to suggest

385
00:22:29,000 --> 00:22:33,080
Speaker 7: that it all goes together. But I think he got

386
00:22:33,119 --> 00:22:38,159
Speaker 7: the thinking right the first time. There's a philosophy of

387
00:22:38,240 --> 00:22:43,320
Speaker 7: individualism that believes in just making people take responsibility for

388
00:22:43,400 --> 00:22:49,520
Speaker 7: their own security and rejects the idea of public cooperation

389
00:22:50,359 --> 00:22:55,119
Speaker 7: for old age insurance. And that's something that Republicans have

390
00:22:55,840 --> 00:23:00,920
Speaker 7: always flirted with, and I think he was seeing another

391
00:23:01,000 --> 00:23:06,879
Speaker 7: example of that. I am very nervous about this program.

392
00:23:07,520 --> 00:23:12,200
Speaker 7: My prediction is that when somebody doesn't accounting five years

393
00:23:12,240 --> 00:23:18,159
Speaker 7: from now, the level of payments made to various financial

394
00:23:18,240 --> 00:23:22,760
Speaker 7: firms and information technology companies to keep track of these

395
00:23:22,760 --> 00:23:26,560
Speaker 7: accounts is going to be very large relative to the

396
00:23:26,600 --> 00:23:31,400
Speaker 7: amount of spending or the amount of support that American

397
00:23:32,000 --> 00:23:38,399
Speaker 7: families received. And that's always been the achilles heel of

398
00:23:38,600 --> 00:23:41,919
Speaker 7: social security privatization.

399
00:23:43,880 --> 00:23:47,080
Speaker 2: Coming up the latest space race. This time it's covering

400
00:23:47,160 --> 00:23:50,280
Speaker 2: the globe and Elon Musk is way out in front.

401
00:23:50,840 --> 00:23:57,439
Speaker 2: That's next on Wall Street Week. This is a story

402
00:23:57,480 --> 00:24:00,320
Speaker 2: about a space race, not the one to be first

403
00:24:00,359 --> 00:24:06,520
Speaker 2: to put a man on the Moon nearly fifty years ago,

404
00:24:07,960 --> 00:24:10,719
Speaker 2: not even the one Elon Musk is running now to

405
00:24:10,720 --> 00:24:13,240
Speaker 2: put humans on Mars in the next few years.

406
00:24:13,600 --> 00:24:16,480
Speaker 9: Just over two years, we'll be selling our first uncrude

407
00:24:16,680 --> 00:24:17,640
Speaker 9: starship Surmis.

408
00:24:17,960 --> 00:24:21,159
Speaker 10: Then we'll send humans two years after that.

409
00:24:24,800 --> 00:24:28,000
Speaker 2: This is a space race much closer to Earth one,

410
00:24:28,200 --> 00:24:31,520
Speaker 2: just a few hundred miles over our heads. It's being

411
00:24:31,600 --> 00:24:34,520
Speaker 2: run in the world of Low Earth Orbit or LEO,

412
00:24:35,080 --> 00:24:38,720
Speaker 2: and what's at stake is potentially connecting everyone on the planet,

413
00:24:39,160 --> 00:24:41,240
Speaker 2: including hard to reach bit and.

414
00:24:41,320 --> 00:24:45,760
Speaker 11: Lift Go SpaceX Go Darling. The stack of sixty Starling

415
00:24:45,840 --> 00:24:50,399
Speaker 11: satellites have successfully deployed from second stage.

416
00:24:51,160 --> 00:24:55,000
Speaker 12: This is just a providing connectivity again in places where

417
00:24:55,520 --> 00:24:57,119
Speaker 12: you don't get it to other means.

418
00:24:57,359 --> 00:25:00,800
Speaker 13: It's a much better solution than trying to bring fiber

419
00:25:00,920 --> 00:25:03,080
Speaker 13: to really really remote locations.

420
00:25:03,200 --> 00:25:03,800
Speaker 6: It's exciting.

421
00:25:04,000 --> 00:25:05,520
Speaker 11: You never know what the next big thing is.

422
00:25:06,200 --> 00:25:09,800
Speaker 2: The battle for Leo's satellite supremacy is on for private

423
00:25:09,840 --> 00:25:14,480
Speaker 2: companies and governments. Goldman Sachs values the market at fifteen

424
00:25:14,480 --> 00:25:17,359
Speaker 2: billion dollars but expects it to grow to one hundred

425
00:25:17,440 --> 00:25:21,719
Speaker 2: eight billion dollars by twenty thirty five. And though it

426
00:25:21,800 --> 00:25:24,439
Speaker 2: may be a competition right now, it looks like a

427
00:25:24,520 --> 00:25:28,639
Speaker 2: race between several tortoises and one hair way out in front.

428
00:25:29,200 --> 00:25:32,800
Speaker 2: That hare is named Starlink. And it's owned by Elon

429
00:25:32,960 --> 00:25:34,200
Speaker 2: Musk's SpaceX.

430
00:25:34,640 --> 00:25:38,360
Speaker 13: It's seventy six hundred satellites today, they're expecting to get

431
00:25:38,400 --> 00:25:40,440
Speaker 13: to as many as forty eight thousand satellites.

432
00:25:40,760 --> 00:25:43,840
Speaker 2: Craig Moffitt is the co founder and senior analyst at

433
00:25:43,880 --> 00:25:47,760
Speaker 2: Moffat Nathanson. He says Musk is so far ahead it

434
00:25:47,840 --> 00:25:50,280
Speaker 2: might be difficult for anyone to close the gap.

435
00:25:50,680 --> 00:25:53,760
Speaker 13: Starlink is probably the biggest part of SpaceX at the moment,

436
00:25:53,880 --> 00:25:57,919
Speaker 13: and a part that investors seem to value the most highly.

437
00:25:58,240 --> 00:26:01,359
Speaker 13: But it is integraally tied to the rest of the

438
00:26:01,400 --> 00:26:04,320
Speaker 13: SpaceX business, which is the rockets and launches and all

439
00:26:04,359 --> 00:26:09,280
Speaker 13: that sort of thing. The starlink business itself, providing Internet

440
00:26:09,320 --> 00:26:13,119
Speaker 13: access primarily to rural areas and again obviously not just

441
00:26:13,200 --> 00:26:17,240
Speaker 13: the United States but globally, is enormously benefited by the

442
00:26:17,280 --> 00:26:21,040
Speaker 13: fact that it's connected to a satellite launch business.

443
00:26:21,359 --> 00:26:22,120
Speaker 14: Making one of.

444
00:26:22,080 --> 00:26:25,440
Speaker 13: These satellites costs quarter of a million to half a

445
00:26:25,480 --> 00:26:29,840
Speaker 13: million dollars. Launching them adds another quarter to half a

446
00:26:29,880 --> 00:26:33,520
Speaker 13: million dollars of costs to each individual satellite.

447
00:26:33,600 --> 00:26:36,440
Speaker 2: If the goal is connecting the world, why are LEO

448
00:26:36,560 --> 00:26:39,639
Speaker 2: satellites the best way to get there, we travel to

449
00:26:39,760 --> 00:26:43,800
Speaker 2: MIT's Aeronautics and Astronautics Department to find out from Professor

450
00:26:43,960 --> 00:26:48,720
Speaker 2: Kerry Kahoy, whose specialty is satellite engineering and communications.

451
00:26:49,320 --> 00:26:53,359
Speaker 11: Most people refer to orbit as orbits that are closer

452
00:26:53,400 --> 00:26:57,359
Speaker 11: to Earth. You need to be above about three hundred

453
00:26:57,400 --> 00:27:00,879
Speaker 11: kilometers to stay in orbit without dropping out due to

454
00:27:00,880 --> 00:27:03,639
Speaker 11: atmosphere drag right away, so it can go higher. It

455
00:27:03,680 --> 00:27:06,160
Speaker 11: goes up to about one thousand kilometers to twelve hundred

456
00:27:06,240 --> 00:27:08,680
Speaker 11: kilometers when you're in lower th orbit. If you're looking

457
00:27:08,680 --> 00:27:11,359
Speaker 11: at a satellite go across the sky, it takes about

458
00:27:11,359 --> 00:27:14,280
Speaker 11: ten minutes to go from horizon to horizon, and then

459
00:27:14,320 --> 00:27:17,399
Speaker 11: if you go high enough up it's geostationary orbit, where

460
00:27:17,680 --> 00:27:19,840
Speaker 11: the speed of the satellite going around the Earth is

461
00:27:19,880 --> 00:27:22,479
Speaker 11: actually the same as the rotation of the Earth, and

462
00:27:22,560 --> 00:27:26,000
Speaker 11: so they're always overhead in the same spot, which has

463
00:27:26,040 --> 00:27:29,359
Speaker 11: a lot of advantages for communications because you never have

464
00:27:29,400 --> 00:27:31,040
Speaker 11: to worry about where they are. They're always right where

465
00:27:31,080 --> 00:27:34,200
Speaker 11: you left them above you. They're much further away than

466
00:27:34,280 --> 00:27:37,560
Speaker 11: lowerth orbits. One of the things that is a benefit

467
00:27:37,840 --> 00:27:40,760
Speaker 11: for lower orbit is it's so much closer to the Earth.

468
00:27:40,840 --> 00:27:45,400
Speaker 11: It only takes like one hundred milliseconds or less to

469
00:27:45,640 --> 00:27:48,320
Speaker 11: get a signal from the satellite down to the Earth,

470
00:27:48,400 --> 00:27:51,280
Speaker 11: or a round trip time. When you're talking about going

471
00:27:51,440 --> 00:27:55,800
Speaker 11: up to geostationary orbit, that's often large fractions of a second.

472
00:27:56,440 --> 00:27:59,040
Speaker 2: It's not just the size and proximity to Earth that

473
00:27:59,160 --> 00:28:03,359
Speaker 2: makes leos special, it's also the cost. A single GEO

474
00:28:03,480 --> 00:28:07,159
Speaker 2: satellite can be up to one thousand times more expensive

475
00:28:07,160 --> 00:28:10,480
Speaker 2: than a LEO satellite to manufacture. On the other hand,

476
00:28:10,800 --> 00:28:13,160
Speaker 2: it costs a lot more over time to keep those

477
00:28:13,280 --> 00:28:14,800
Speaker 2: LEO satellites up there.

478
00:28:14,680 --> 00:28:19,160
Speaker 11: And working in lower thorbit unless you have a lot

479
00:28:19,160 --> 00:28:22,160
Speaker 11: of propulsion on board and ways to keep yourself fighting

480
00:28:22,200 --> 00:28:25,240
Speaker 11: atmosphere drive. So lower thorbit is above the atmosphere, but

481
00:28:25,320 --> 00:28:27,920
Speaker 11: there's just enough that it starts to slow you down

482
00:28:28,000 --> 00:28:30,520
Speaker 11: and decrease your orbit energy and pull you in until

483
00:28:30,560 --> 00:28:33,520
Speaker 11: you re enter and burn up. Unless they're higher and

484
00:28:33,640 --> 00:28:36,200
Speaker 11: have bigger fuel tanks on board and more propellant to

485
00:28:36,280 --> 00:28:38,640
Speaker 11: keep them up for longer. You know, the heavier you

486
00:28:38,680 --> 00:28:42,080
Speaker 11: make them, the more it costs to launch them, and liptop.

487
00:28:42,000 --> 00:28:45,400
Speaker 13: You have to be launching as many as twenty five

488
00:28:45,480 --> 00:28:48,400
Speaker 13: percent of your satellites every year just to maintain the

489
00:28:48,480 --> 00:28:52,920
Speaker 13: replacement cost of the constellation. So you're talking about launching

490
00:28:52,960 --> 00:28:57,520
Speaker 13: twelve thousand satellites a year just to keep the existing

491
00:28:57,600 --> 00:29:02,120
Speaker 13: constellation operating. That's those kinds of costs are staggering.

492
00:29:02,800 --> 00:29:06,920
Speaker 2: Starlink has what looks like an overwhelming lead in LEO satellites,

493
00:29:07,360 --> 00:29:10,240
Speaker 2: but it's not the only horse in the race. Jeff

494
00:29:10,280 --> 00:29:13,320
Speaker 2: Bezos Project Kuiper is trying at least to get on

495
00:29:13,360 --> 00:29:16,480
Speaker 2: the track, though it's had to deal with manufacturing issues

496
00:29:16,480 --> 00:29:20,760
Speaker 2: and launch delays earlier this year, currently leaving its constellation

497
00:29:20,880 --> 00:29:25,160
Speaker 2: with fewer than eighty satellites in orbit compared with Musk's

498
00:29:24,640 --> 00:29:26,320
Speaker 2: six hundred plus.

499
00:29:27,240 --> 00:29:31,400
Speaker 13: When you see someone like Amazon's Project Kuyper planning a

500
00:29:31,560 --> 00:29:36,960
Speaker 13: second US centered started constellation that will occupy very much

501
00:29:37,080 --> 00:29:41,120
Speaker 13: the same competitive niche as Starlink, it's really hard to

502
00:29:41,160 --> 00:29:43,560
Speaker 13: see why that makes any sense and why there are

503
00:29:43,600 --> 00:29:46,400
Speaker 13: any returns available to Amazon.

504
00:29:47,080 --> 00:29:50,560
Speaker 2: A STARLEK competitor that's much further along than Kuyper comes

505
00:29:50,560 --> 00:29:54,840
Speaker 2: from Europe. One Web launched its first operational LEO satellite

506
00:29:54,880 --> 00:29:59,000
Speaker 2: the same year as Starlink. European satellite operator Utlesat acquired

507
00:29:59,080 --> 00:30:02,320
Speaker 2: one Web in twenty twenty three and currently operates its

508
00:30:02,360 --> 00:30:05,960
Speaker 2: own constellation of about six hundred and forty satellites, and

509
00:30:06,080 --> 00:30:09,200
Speaker 2: one web is pursuing a strategy that goes beyond LEO

510
00:30:09,320 --> 00:30:10,360
Speaker 2: satellites alone.

511
00:30:11,200 --> 00:30:14,840
Speaker 12: We are the only satellite that has both the GEO

512
00:30:14,960 --> 00:30:17,480
Speaker 12: and the LEO, and in fact quite a number of them,

513
00:30:17,560 --> 00:30:21,240
Speaker 12: because we have thirty five in GEO and over six

514
00:30:21,360 --> 00:30:22,400
Speaker 12: hundred in LEO.

515
00:30:22,800 --> 00:30:26,800
Speaker 2: Jean Ubert Lenat is the chief strategy and Resources officer

516
00:30:26,880 --> 00:30:30,040
Speaker 2: at UTLESAD, and it's not just the combination of GEO

517
00:30:30,200 --> 00:30:33,120
Speaker 2: and LEO satellites that he thinks sets his company on

518
00:30:33,200 --> 00:30:37,200
Speaker 2: a different path from Starlink. It's also the market they serve.

519
00:30:38,080 --> 00:30:42,560
Speaker 12: Starling does address the consumer market, meaning that they do

520
00:30:42,640 --> 00:30:45,720
Speaker 12: need much more capacity to actually serve all those customers.

521
00:30:46,280 --> 00:30:52,320
Speaker 12: We are providing very basic but important connectivity to businesses,

522
00:30:52,360 --> 00:30:55,320
Speaker 12: to government. What is very important to understand this, we

523
00:30:55,360 --> 00:30:56,760
Speaker 12: are not in the consumer market.

524
00:30:56,960 --> 00:30:59,640
Speaker 8: We have right now just north of five.

525
00:30:59,440 --> 00:31:03,880
Speaker 12: Billion in total globally of connectivity in B to B

526
00:31:04,640 --> 00:31:08,520
Speaker 12: and this is going to grow at least three times

527
00:31:08,600 --> 00:31:12,360
Speaker 12: between now and basically twenty thirty three, where it should

528
00:31:12,360 --> 00:31:16,200
Speaker 12: be close to fifteen billion at by the time. But

529
00:31:16,320 --> 00:31:19,520
Speaker 12: more importantly, the LEO connectivity is really what is going

530
00:31:19,560 --> 00:31:23,040
Speaker 12: to drive this market. So the LEO connectivity right now

531
00:31:23,080 --> 00:31:26,400
Speaker 12: in B to B is only around two billion as

532
00:31:26,480 --> 00:31:29,480
Speaker 12: we speak this year expected to be there whereas we

533
00:31:29,560 --> 00:31:32,080
Speaker 12: do expect it will be north of ten billion pro

534
00:31:32,280 --> 00:31:35,240
Speaker 12: eleven or twelve billion by the same year of twenty

535
00:31:35,280 --> 00:31:38,840
Speaker 12: to thirty three, meaning that it will just multiplier be

536
00:31:38,920 --> 00:31:40,920
Speaker 12: multiplied fivefold for that period.

537
00:31:41,760 --> 00:31:45,520
Speaker 2: One Web, a subsidiary of Budle SAD, manages its constellation

538
00:31:45,640 --> 00:31:47,160
Speaker 2: out of its London office.

539
00:31:47,560 --> 00:31:51,880
Speaker 10: I lead a team that has one main objective, which

540
00:31:51,960 --> 00:31:55,080
Speaker 10: is uptime, so guaranteeing that our customers are actually always

541
00:31:55,080 --> 00:31:58,600
Speaker 10: able to connect to the service that we provide wherever

542
00:31:58,640 --> 00:32:00,440
Speaker 10: they are. And the role of the team here is

543
00:32:00,440 --> 00:32:03,680
Speaker 10: actually to guarantee that the system works at the top

544
00:32:03,840 --> 00:32:06,880
Speaker 10: performance and in the leivers a high speed and the

545
00:32:06,880 --> 00:32:10,040
Speaker 10: low latency that the constellation is supposed to provide.

546
00:32:10,840 --> 00:32:13,400
Speaker 2: One Web also differs from starlink in the way it

547
00:32:13,440 --> 00:32:17,080
Speaker 2: gets its satellites into orbit. One Web has no rockets

548
00:32:17,120 --> 00:32:20,000
Speaker 2: of its own, so it relies instead on other firms

549
00:32:20,000 --> 00:32:24,520
Speaker 2: for its launches, including you guessed it, Musk's SpaceX.

550
00:32:24,080 --> 00:32:27,560
Speaker 11: One, Web SAD, Delta two and Delta six. Separation confirmed.

551
00:32:27,960 --> 00:32:32,000
Speaker 2: In fact, it is SpaceX's advances in reusable rockets that

552
00:32:32,080 --> 00:32:33,800
Speaker 2: have transformed the industry.

553
00:32:34,400 --> 00:32:37,040
Speaker 11: Launch costs used to be very high and it used

554
00:32:37,040 --> 00:32:39,360
Speaker 11: to be very difficult to get things into orbit. So

555
00:32:39,480 --> 00:32:43,560
Speaker 11: the reduction in cost of launch partly driven by the

556
00:32:43,560 --> 00:32:47,120
Speaker 11: reusable launch vehicles that SpaceX has developed with you know,

557
00:32:47,160 --> 00:32:48,360
Speaker 11: for example Falcon nine.

558
00:32:48,880 --> 00:32:52,360
Speaker 2: Both SpaceX and one Web have close relations with governments,

559
00:32:52,800 --> 00:32:57,120
Speaker 2: SpaceX through US government contracts and one Web through partial

560
00:32:57,200 --> 00:33:01,520
Speaker 2: government ownership. In mid June, the UK government announced plans

561
00:33:01,520 --> 00:33:04,920
Speaker 2: to invest one hundred and sixty three million euros in Utelsat,

562
00:33:05,160 --> 00:33:08,560
Speaker 2: joining France and other investors in a major funding round,

563
00:33:08,960 --> 00:33:12,320
Speaker 2: bringing the total rays to one point five billion euros

564
00:33:12,720 --> 00:33:16,240
Speaker 2: or one point eight billion dollars. What are your capital

565
00:33:16,280 --> 00:33:18,520
Speaker 2: needs going forward as you see it, We.

566
00:33:18,520 --> 00:33:22,800
Speaker 12: Have, indeed our plans to invest four billion euros of

567
00:33:22,840 --> 00:33:26,680
Speaker 12: CAPEX between now and twenty twenty nine, and those four

568
00:33:26,680 --> 00:33:31,800
Speaker 12: billion disease essentially a large part to replace our current

569
00:33:31,920 --> 00:33:36,040
Speaker 12: LEO constellation. LEO satellites have a smaller lifetime of around

570
00:33:36,120 --> 00:33:38,800
Speaker 12: seven years, so we'll have to replace those ones by

571
00:33:38,880 --> 00:33:43,400
Speaker 12: twenty twenty eight, so bulk of that CAPEX is precisely

572
00:33:43,560 --> 00:33:45,760
Speaker 12: for that replacement.

573
00:33:46,560 --> 00:33:49,440
Speaker 2: The LEO satellite race is on and Starlink is way

574
00:33:49,480 --> 00:33:52,080
Speaker 2: out in front. But how big is the prize for

575
00:33:52,160 --> 00:33:55,880
Speaker 2: winning the race? How good a business is this? Even

576
00:33:55,920 --> 00:33:58,640
Speaker 2: for the leader Starlink, It looks like it might not

577
00:33:58,760 --> 00:34:01,440
Speaker 2: be as profitable as Musk originally thought.

578
00:34:01,760 --> 00:34:04,880
Speaker 13: Roughly half of the cost is in the rocketry segment.

579
00:34:05,240 --> 00:34:08,120
Speaker 13: The original concept was that they would have a big

580
00:34:08,200 --> 00:34:11,920
Speaker 13: leg up because they could put these satellites into the

581
00:34:11,960 --> 00:34:15,120
Speaker 13: payloads of rockets that were going up for other customers,

582
00:34:15,120 --> 00:34:18,439
Speaker 13: whether it's NASA or other governments, and then they could

583
00:34:18,440 --> 00:34:22,680
Speaker 13: add their own satellites cheaply to these payloads. It hasn't

584
00:34:22,719 --> 00:34:26,439
Speaker 13: worked out that way. Virtually every single rocket launch thus

585
00:34:26,480 --> 00:34:30,239
Speaker 13: far has been a dedicated rocket launch solely for the

586
00:34:30,280 --> 00:34:35,040
Speaker 13: purpose of launching Starlink satellites. So the cost structure is

587
00:34:35,160 --> 00:34:37,239
Speaker 13: quite a bit higher than you might have imagined it

588
00:34:37,320 --> 00:34:39,280
Speaker 13: was going to be m lipped off.

589
00:34:39,560 --> 00:34:41,880
Speaker 2: And in the end, how much room at the finish

590
00:34:41,920 --> 00:34:44,759
Speaker 2: line is there for competitors in the LEO space race.

591
00:34:45,400 --> 00:34:47,640
Speaker 2: Is there room for more than one or is it

592
00:34:47,680 --> 00:34:51,160
Speaker 2: a natural monopoly given the capital investment required and the

593
00:34:51,239 --> 00:34:52,800
Speaker 2: limited market to be served.

594
00:34:53,280 --> 00:34:56,480
Speaker 12: We do believe that in the future they will be

595
00:34:56,560 --> 00:35:01,200
Speaker 12: probably four or five, maybe six players, not more. There

596
00:35:01,280 --> 00:35:04,840
Speaker 12: is clearly room for those players because precisely the demand

597
00:35:04,880 --> 00:35:07,960
Speaker 12: for connectivity, as you and I can experience every day,

598
00:35:08,600 --> 00:35:10,200
Speaker 12: is just growing and growing.

599
00:35:10,360 --> 00:35:14,000
Speaker 13: The revenue opportunity is almost certainly going to keep being

600
00:35:14,040 --> 00:35:17,600
Speaker 13: divided up because of all of these quasi economic logic

601
00:35:17,680 --> 00:35:22,759
Speaker 13: that's more geopolitical and military logic instead, and ultimately it

602
00:35:22,800 --> 00:35:25,839
Speaker 13: means you'll always have more competitors in this business than

603
00:35:25,880 --> 00:35:28,080
Speaker 13: the economics would dictate, makes any sense.

604
00:35:28,360 --> 00:35:33,000
Speaker 11: It's very exciting to see it growing like this, to

605
00:35:33,040 --> 00:35:38,279
Speaker 11: see remote access without terrestrial infrastructure needed, that is a

606
00:35:38,440 --> 00:35:40,600
Speaker 11: very interesting and exciting growth area.

607
00:35:41,400 --> 00:35:43,840
Speaker 2: We've come a long way since the days of Sputnik

608
00:35:44,080 --> 00:35:47,440
Speaker 2: and Gemini and the Space Shuttle, days when we waited

609
00:35:47,520 --> 00:35:51,440
Speaker 2: months for each launch, days when only governments could compete.

610
00:35:52,000 --> 00:35:55,680
Speaker 2: Now there are launches nearly every day from private and

611
00:35:55,800 --> 00:35:59,719
Speaker 2: government players, making the question not who will win, but

612
00:35:59,760 --> 00:36:05,680
Speaker 2: what trophy the winner will take home. Up next, we

613
00:36:05,760 --> 00:36:09,640
Speaker 2: turn from satellites to adapting to climate change. Tom Montag

614
00:36:09,719 --> 00:36:13,200
Speaker 2: of Rubicon Carbon makes his case for liquid and transparent,

615
00:36:13,320 --> 00:36:21,560
Speaker 2: voluntary carbon markets making the difference. This is a story

616
00:36:21,560 --> 00:36:25,160
Speaker 2: about carrots and sticks, and whether we need both if

617
00:36:25,200 --> 00:36:29,080
Speaker 2: we're to make real progress on climate change. Various governments

618
00:36:29,120 --> 00:36:32,200
Speaker 2: have tried their hand at reducing carbon emissions, from setting

619
00:36:32,239 --> 00:36:35,760
Speaker 2: limits to providing billions of dollars in incentives to go green,

620
00:36:36,680 --> 00:36:39,120
Speaker 2: but President Trump's return of the Oval Office has put

621
00:36:39,160 --> 00:36:41,799
Speaker 2: climate change on something of a back burner for the

622
00:36:41,920 --> 00:36:42,600
Speaker 2: US government.

623
00:36:43,880 --> 00:36:46,759
Speaker 7: I terminated the ridiculous green news scam.

624
00:36:47,360 --> 00:36:50,480
Speaker 4: I withdrew from the unfair Paris Climate.

625
00:36:50,120 --> 00:36:54,320
Speaker 10: Accord, which was costing US trillions of dollars.

626
00:36:55,760 --> 00:36:59,279
Speaker 2: While governments try their various approaches and adjust them from

627
00:36:59,280 --> 00:37:03,480
Speaker 2: time to time, the challenges from climate change just keep increasing,

628
00:37:03,920 --> 00:37:06,799
Speaker 2: with the world sending over thirty five billion tons of

629
00:37:06,840 --> 00:37:10,520
Speaker 2: carbon into the atmosphere every year and the average global

630
00:37:10,560 --> 00:37:13,960
Speaker 2: surface temperature in twenty twenty four two point three degrees

631
00:37:14,040 --> 00:37:18,360
Speaker 2: fahrenheit above the twentieth century average, which raises the question

632
00:37:18,440 --> 00:37:22,160
Speaker 2: whether private markets may help the situation, with or without

633
00:37:22,360 --> 00:37:23,640
Speaker 2: active government support.

634
00:37:24,320 --> 00:37:28,800
Speaker 14: It's about financing climate and that's a complicated problem because

635
00:37:28,800 --> 00:37:30,760
Speaker 14: it's going to take trillions of dollars.

636
00:37:31,840 --> 00:37:34,400
Speaker 2: After serving as vice chair of Bank of America and

637
00:37:34,600 --> 00:37:38,520
Speaker 2: Venucan is now chair of Rubicon Carbon, a carbon credit

638
00:37:38,560 --> 00:37:41,040
Speaker 2: management firm run by TPG.

639
00:37:41,440 --> 00:37:44,160
Speaker 14: So it's a piece of the puzzle. I think it's

640
00:37:44,200 --> 00:37:47,040
Speaker 14: an effective one. It could be a lot more effective

641
00:37:47,040 --> 00:37:51,960
Speaker 14: than it's been. But I think as European market matures,

642
00:37:52,640 --> 00:37:55,000
Speaker 14: as the American market matures, and I know there are

643
00:37:55,040 --> 00:37:57,440
Speaker 14: issues read at the moment, but nonetheless I think that

644
00:37:57,560 --> 00:38:00,880
Speaker 14: we will see it as a component and an important

645
00:38:00,880 --> 00:38:05,120
Speaker 14: component in the capital stack that will underwrite this change.

646
00:38:05,640 --> 00:38:08,920
Speaker 2: Lambert Schneider has studied carbon credit markets at the UKO

647
00:38:09,160 --> 00:38:12,359
Speaker 2: Institute in Freiberg, Germany, and is co author of an

648
00:38:12,360 --> 00:38:17,880
Speaker 2: OECD paper on the interplay between voluntary and compliance carbon markets.

649
00:38:18,640 --> 00:38:23,360
Speaker 9: Carbon credits is an instrument where someone a private entity

650
00:38:23,880 --> 00:38:28,920
Speaker 9: or public entity can invest in mitigation projects and climate

651
00:38:29,239 --> 00:38:33,040
Speaker 9: and then claim the emission reductions like A practical example

652
00:38:33,080 --> 00:38:36,640
Speaker 9: would be if a company invests in an upforestation project

653
00:38:36,680 --> 00:38:40,919
Speaker 9: somewhere the trees go, they absorb SU two, and then

654
00:38:41,000 --> 00:38:44,200
Speaker 9: for each ton of U two that is absorbed, a

655
00:38:44,239 --> 00:38:47,359
Speaker 9: ton of carbon credit is being issued. And then these

656
00:38:47,400 --> 00:38:51,799
Speaker 9: carbon credits can, for example, be used to achieve voluntary

657
00:38:51,800 --> 00:38:56,760
Speaker 9: climate goals. Prominent examples is avoiding deforestations. And then there

658
00:38:56,800 --> 00:39:01,719
Speaker 9: are projects which burn greenhouse gasses waste, greenose gases, their

659
00:39:01,800 --> 00:39:05,480
Speaker 9: projects which use renewal energies, and there are also projects

660
00:39:05,480 --> 00:39:09,040
Speaker 9: who suck se you two out of the atmosphere, like

661
00:39:09,160 --> 00:39:15,799
Speaker 9: for example, direct air capture and carbon sequestration in geological reservoirs.

662
00:39:15,840 --> 00:39:18,680
Speaker 9: So you take ze two out of the atmosphere and

663
00:39:18,719 --> 00:39:22,120
Speaker 9: then you store it underground. So many companies have set

664
00:39:23,239 --> 00:39:26,640
Speaker 9: voluntary mitigation targets. They have said, we want to do

665
00:39:26,760 --> 00:39:30,320
Speaker 9: action beyond reducing our own emissions, to do beyond value

666
00:39:30,400 --> 00:39:35,040
Speaker 9: chain mitigation and compliance markets are markets that are established

667
00:39:35,080 --> 00:39:40,560
Speaker 9: by governments or multilateral organizations where companies have an obligation

668
00:39:40,840 --> 00:39:45,720
Speaker 9: to meet certain targets or quotas. The most prominent example

669
00:39:45,760 --> 00:39:50,480
Speaker 9: for a compliance market is international aviation. Under the International

670
00:39:50,520 --> 00:39:55,680
Speaker 9: Civil Aviation Organization, airline operators must compensate part of their emissions,

671
00:39:56,200 --> 00:39:59,120
Speaker 9: and so each airline needs to purchase a certain number

672
00:39:59,120 --> 00:40:00,000
Speaker 9: of carbon credits.

673
00:40:00,880 --> 00:40:04,040
Speaker 2: Despite the promise of carbon credit markets, they have yet

674
00:40:04,080 --> 00:40:05,680
Speaker 2: to live up to their full potential.

675
00:40:05,960 --> 00:40:07,839
Speaker 8: I would say they have not developed the way that

676
00:40:07,840 --> 00:40:10,520
Speaker 8: we had hoped. It's been pretty flat market quite frankly,

677
00:40:10,520 --> 00:40:12,439
Speaker 8: for the last four years or so.

678
00:40:13,000 --> 00:40:16,480
Speaker 2: Tom Montag was a colleague of Antonukan as COO of

679
00:40:16,520 --> 00:40:19,840
Speaker 2: Bank of America and President of Global Banking and Markets.

680
00:40:20,360 --> 00:40:23,040
Speaker 2: Since twenty twenty two, he has been the CEO of

681
00:40:23,120 --> 00:40:27,520
Speaker 2: TPG's Rubicon Carbon, working with the firm's Rise Climate Fund,

682
00:40:27,760 --> 00:40:31,479
Speaker 2: chaired by former Treasury Secretary Hank Paulson and with Chief

683
00:40:31,600 --> 00:40:35,920
Speaker 2: Science Officer and Nobel Prize winner doctor Jennifer Jenkins.

684
00:40:36,160 --> 00:40:39,200
Speaker 8: When you do a carbon project, David, you go to

685
00:40:39,360 --> 00:40:44,640
Speaker 8: registries and get They give you carbon credits based on

686
00:40:44,719 --> 00:40:47,040
Speaker 8: their read of your project and where it is and

687
00:40:47,080 --> 00:40:49,600
Speaker 8: what it's doing, and in retrospect some of the projects

688
00:40:49,680 --> 00:40:52,560
Speaker 8: US baselines that weren't so good and other things like

689
00:40:52,600 --> 00:40:56,040
Speaker 8: that that led to them being overstated, too many credits

690
00:40:56,080 --> 00:40:56,640
Speaker 8: being issued.

691
00:40:56,800 --> 00:41:00,200
Speaker 14: The early days of carbon credits were there were problems.

692
00:41:00,440 --> 00:41:04,279
Speaker 14: There are problems with verification of what the project was.

693
00:41:04,320 --> 00:41:06,880
Speaker 14: The project itself may have had some issues, and those

694
00:41:06,920 --> 00:41:10,480
Speaker 14: that were validating it, developing it, and selling it may

695
00:41:10,480 --> 00:41:13,000
Speaker 14: have had some issues. A few years ago, it was

696
00:41:13,040 --> 00:41:16,040
Speaker 14: imagined that it could be two hundred billion dollars. It's

697
00:41:16,840 --> 00:41:19,399
Speaker 14: a fraction of that, a very small fraction of that,

698
00:41:19,800 --> 00:41:21,920
Speaker 14: and we need to do some things to make a change.

699
00:41:21,960 --> 00:41:25,240
Speaker 14: We need to have standards, We need to have rating

700
00:41:25,280 --> 00:41:28,080
Speaker 14: agencies in the same way you would have any financial market,

701
00:41:28,640 --> 00:41:31,400
Speaker 14: you have to have a developer or manufacturer of the product.

702
00:41:31,440 --> 00:41:34,200
Speaker 14: You have to have a broker, you have to have

703
00:41:34,480 --> 00:41:37,799
Speaker 14: a rating agency. Governments will get involved, and then you

704
00:41:38,239 --> 00:41:40,680
Speaker 14: have to create a larger market. But those things are

705
00:41:40,680 --> 00:41:43,840
Speaker 14: happening on a small scale now. And I mentioned Europe.

706
00:41:43,840 --> 00:41:46,759
Speaker 14: Europe is going to require it, and in requiring it,

707
00:41:47,000 --> 00:41:49,600
Speaker 14: where they sort of did the stick not the carrot,

708
00:41:50,239 --> 00:41:52,520
Speaker 14: they're beginning to think about what's the carrot here.

709
00:41:52,680 --> 00:41:56,600
Speaker 9: There's a new mechanism and that standard is really more

710
00:41:56,640 --> 00:42:01,160
Speaker 9: ambitious than anything that we had before. Tries to draw

711
00:42:01,280 --> 00:42:04,640
Speaker 9: on the lessons learned from the past and to avoid

712
00:42:04,719 --> 00:42:07,239
Speaker 9: the mistakes that will be made in the voluntary cam

713
00:42:07,360 --> 00:42:09,080
Speaker 9: market and set a higher bar.

714
00:42:09,560 --> 00:42:13,200
Speaker 2: So what does rubicon carbon bring to this that's needed.

715
00:42:13,480 --> 00:42:15,840
Speaker 8: We came a kind of an institutional backing with you know,

716
00:42:15,880 --> 00:42:19,239
Speaker 8: an Finucan and I coming from Bank of America and

717
00:42:19,320 --> 00:42:23,239
Speaker 8: TPG funding it. We have a filter. Everything we show

718
00:42:23,280 --> 00:42:25,720
Speaker 8: and do go through our science team gets a score.

719
00:42:25,800 --> 00:42:30,120
Speaker 8: So we bring the quality and the transparency that people

720
00:42:30,200 --> 00:42:32,160
Speaker 8: need to invest in the markets. One of the things

721
00:42:32,200 --> 00:42:34,480
Speaker 8: we're trying to do is to develop a product that

722
00:42:34,560 --> 00:42:37,320
Speaker 8: makes it more liquid and transparent for people that don't

723
00:42:37,360 --> 00:42:41,319
Speaker 8: have the infrastructure or need to understand these projects and

724
00:42:41,360 --> 00:42:43,240
Speaker 8: where the risk of these projects and where they are.

725
00:42:43,440 --> 00:42:44,960
Speaker 8: It isn't like a stock where you can get a

726
00:42:44,960 --> 00:42:47,279
Speaker 8: prospectus and just read it and they're in. You know,

727
00:42:47,320 --> 00:42:51,640
Speaker 8: these are very complex areas with different systems and new technologies,

728
00:42:52,080 --> 00:42:54,960
Speaker 8: and so we kind of developed two new projects to

729
00:42:55,000 --> 00:42:57,600
Speaker 8: do that. One is we call the rubicon carbon ton.

730
00:42:57,640 --> 00:43:00,200
Speaker 8: It's like an ETF. If you buy tons of the

731
00:43:00,280 --> 00:43:03,719
Speaker 8: rubicon carbon ton and we have them in nature or

732
00:43:03,840 --> 00:43:07,640
Speaker 8: we call super pollutants or removals, then you get a

733
00:43:07,680 --> 00:43:12,080
Speaker 8: portfolio of curated tons underneath that that were always managing

734
00:43:12,120 --> 00:43:14,160
Speaker 8: as we go. We just did an the other first

735
00:43:14,160 --> 00:43:17,120
Speaker 8: of its kind of rubicon rated ton, and that was

736
00:43:17,440 --> 00:43:21,160
Speaker 8: a ton of a portfolio of credits that are rated

737
00:43:21,200 --> 00:43:23,200
Speaker 8: not only by our guys, but by B zero, which

738
00:43:23,239 --> 00:43:26,680
Speaker 8: is kind of the moodies of rating carbon projects.

739
00:43:28,160 --> 00:43:30,760
Speaker 2: In order to create a market for trading carbon credits,

740
00:43:30,920 --> 00:43:33,600
Speaker 2: there has to be some way to translate the climate

741
00:43:33,600 --> 00:43:36,960
Speaker 2: effects across a wide array of activities, all of which

742
00:43:37,000 --> 00:43:40,279
Speaker 2: can reduce carbon released into the atmosphere, but in very

743
00:43:40,320 --> 00:43:41,200
Speaker 2: different ways.

744
00:43:42,040 --> 00:43:44,799
Speaker 8: There's a whole list of different kinds of projects and

745
00:43:44,840 --> 00:43:47,880
Speaker 8: things that can range from literally filtering out of the

746
00:43:47,920 --> 00:43:50,920
Speaker 8: filters that take carbon out of the environment, which is expensive,

747
00:43:51,280 --> 00:43:54,560
Speaker 8: to what they call biochar, which is high temperature burning

748
00:43:54,880 --> 00:43:57,480
Speaker 8: of biomass that is stored in the ground instead of

749
00:43:57,680 --> 00:44:03,160
Speaker 8: decaying into the environment. There's a reforestation where we're replanting

750
00:44:03,239 --> 00:44:06,839
Speaker 8: degraded land, and there's methane capture or gas capture its

751
00:44:06,840 --> 00:44:11,280
Speaker 8: source and destruction. So that wide range and the prices

752
00:44:11,280 --> 00:44:13,799
Speaker 8: of those david can be from anywhere from you know,

753
00:44:14,880 --> 00:44:17,400
Speaker 8: five dollars to hundreds of dollars.

754
00:44:17,640 --> 00:44:20,680
Speaker 2: Do you at rubicon carbon yourself or do you pay

755
00:44:20,719 --> 00:44:23,000
Speaker 2: somebody else to go back and audit to see whether

756
00:44:23,040 --> 00:44:25,160
Speaker 2: the farmer planted the tree and the trees there.

757
00:44:25,239 --> 00:44:28,080
Speaker 8: We do a lot of work. You know, satellite imagery

758
00:44:28,160 --> 00:44:30,960
Speaker 8: is amazing these days, so you can really get granular

759
00:44:31,320 --> 00:44:33,360
Speaker 8: in what you can see. So we do a combination

760
00:44:33,440 --> 00:44:37,000
Speaker 8: of site visits and also we buy the best satellite

761
00:44:37,040 --> 00:44:39,720
Speaker 8: imagery you can possibly find to check on the trees

762
00:44:39,760 --> 00:44:41,880
Speaker 8: and what the tree cover is, have they been planted,

763
00:44:41,920 --> 00:44:44,040
Speaker 8: are they still there? All those types of things.

764
00:44:44,120 --> 00:44:46,400
Speaker 2: There has been some changes in various governments, including the

765
00:44:46,480 --> 00:44:49,760
Speaker 2: United States and some of the governments seem to backing

766
00:44:49,800 --> 00:44:53,080
Speaker 2: off some of the commitments on climate. Is that hurting

767
00:44:53,120 --> 00:44:53,600
Speaker 2: your business?

768
00:44:54,280 --> 00:44:55,920
Speaker 8: I think it would help our business at the end

769
00:44:55,920 --> 00:44:58,440
Speaker 8: of the day, because people will realize the government's not

770
00:44:58,480 --> 00:45:00,480
Speaker 8: going to do it for them.

771
00:45:00,800 --> 00:45:04,719
Speaker 2: To its credit, Rubicon Carbon has not one very significant

772
00:45:04,760 --> 00:45:08,880
Speaker 2: deal a Microsoft purchase of carbon removal credits.

773
00:45:08,920 --> 00:45:11,919
Speaker 14: A big deal like Microsoft really matters because first of all,

774
00:45:11,960 --> 00:45:15,720
Speaker 14: it's huge. It's eighteen million tons in five hundred square

775
00:45:15,760 --> 00:45:20,719
Speaker 14: miles of carbon sequestration and reduction, and it's called an

776
00:45:20,719 --> 00:45:23,480
Speaker 14: off take deal where they're buying it over a series

777
00:45:23,520 --> 00:45:27,480
Speaker 14: of years. I also think that there is an appreciation that,

778
00:45:28,160 --> 00:45:31,560
Speaker 14: particularly with technology companies, but not just technology companies, we

779
00:45:31,600 --> 00:45:34,600
Speaker 14: need more energy and we need all energy. So the

780
00:45:34,680 --> 00:45:39,720
Speaker 14: idea that we would incentivizing those to do more production

781
00:45:39,800 --> 00:45:44,640
Speaker 14: and clean energy along with perhaps more traditional energy seems

782
00:45:44,680 --> 00:45:47,319
Speaker 14: like we're tying a hand behind the American back. I

783
00:45:47,480 --> 00:45:50,920
Speaker 14: do think we are capitalists and there is a market

784
00:45:50,920 --> 00:45:53,480
Speaker 14: opportunity we would not want to miss, and we surely

785
00:45:53,560 --> 00:45:55,160
Speaker 14: don't want China to go ahead of us.

786
00:45:56,400 --> 00:46:00,960
Speaker 2: Carbon markets need transparency, standards and depth, but even then

787
00:46:01,120 --> 00:46:03,560
Speaker 2: they're only as good as the difference they make in

788
00:46:03,600 --> 00:46:07,640
Speaker 2: the real world, and Rubicon Carbon already has some projects

789
00:46:07,680 --> 00:46:11,160
Speaker 2: starting to make a difference in reducing net carbon emissions.

790
00:46:11,400 --> 00:46:15,760
Speaker 14: You're taking barren land and creating a nature based solution,

791
00:46:16,680 --> 00:46:19,560
Speaker 14: so imagine something that has gone to waste that is

792
00:46:19,600 --> 00:46:23,560
Speaker 14: now productive again. Or direct air capture is the idea

793
00:46:23,600 --> 00:46:28,400
Speaker 14: of that you're capturing the carbon emissions. So either of

794
00:46:28,440 --> 00:46:30,919
Speaker 14: those are certainly a creative. I think that you're going

795
00:46:31,000 --> 00:46:34,400
Speaker 14: to see work on farmland where they will work with

796
00:46:34,480 --> 00:46:37,120
Speaker 14: farmers in the years to come, particularly in Europe, of

797
00:46:37,600 --> 00:46:41,200
Speaker 14: generating carbon credits by farming a little bit differently in

798
00:46:41,239 --> 00:46:45,520
Speaker 14: a regenerative way and measuring the soil and how the

799
00:46:45,520 --> 00:46:48,560
Speaker 14: better use of soil, the better use of less water

800
00:46:48,680 --> 00:46:50,520
Speaker 14: is going to be a creative. But we have a

801
00:46:50,560 --> 00:46:53,400
Speaker 14: project called spec Boom that we're working on. It's in

802
00:46:53,480 --> 00:46:58,000
Speaker 14: South Africa. It's three forestation of an area. Spec Boom

803
00:46:58,040 --> 00:47:00,440
Speaker 14: is actually a plant we along with a couple of

804
00:47:00,560 --> 00:47:04,399
Speaker 14: other funders, are putting capital in so that they can

805
00:47:04,520 --> 00:47:07,560
Speaker 14: build and grow this. I'd like to just say one

806
00:47:07,560 --> 00:47:11,320
Speaker 14: thing about climate change. It's about clean energy, it's about

807
00:47:11,920 --> 00:47:14,799
Speaker 14: enough water for the world, and it's about being able

808
00:47:14,840 --> 00:47:18,279
Speaker 14: to breathe clean air. This isn't about politicizing anything. It's

809
00:47:18,320 --> 00:47:21,640
Speaker 14: just the reality that the science community tells us. We're capitalists,

810
00:47:21,640 --> 00:47:23,879
Speaker 14: so we like to take advantage of something that could

811
00:47:23,880 --> 00:47:27,000
Speaker 14: have capital returns. And I think this will.

812
00:47:28,760 --> 00:47:31,080
Speaker 2: Coming up next. What does it take to put your

813
00:47:31,160 --> 00:47:39,560
Speaker 2: work into outer space? They often say it doesn't take

814
00:47:39,600 --> 00:47:43,080
Speaker 2: a rocket scientist, but what if it does. What does

815
00:47:43,120 --> 00:47:45,640
Speaker 2: it take to make a career in launching vehicles into

816
00:47:45,719 --> 00:47:50,120
Speaker 2: outer space? Aero astro professor Kerry Kahoy of MIT tells

817
00:47:50,160 --> 00:47:52,520
Speaker 2: her story of what got her started and what she

818
00:47:52,640 --> 00:47:54,160
Speaker 2: finds most exciting.

819
00:47:55,280 --> 00:48:00,640
Speaker 11: So I was working in college and I there on

820
00:48:01,040 --> 00:48:05,200
Speaker 11: federal work study, so you know, had to get funding

821
00:48:05,320 --> 00:48:07,879
Speaker 11: to go to college and didn't didn't have another way

822
00:48:07,920 --> 00:48:10,000
Speaker 11: to do it. And so I'd been working in the

823
00:48:10,080 --> 00:48:15,120
Speaker 11: libraries and I saw this advertisement for somebody need an

824
00:48:15,160 --> 00:48:18,120
Speaker 11: undergraduate researcher to help with a Mars rover program. And

825
00:48:18,160 --> 00:48:20,480
Speaker 11: that turned out to be professor Steve Squire's at Cornell,

826
00:48:20,560 --> 00:48:23,640
Speaker 11: who ended up launching the Mars rovers. So I started

827
00:48:23,640 --> 00:48:27,680
Speaker 11: interning with him and was working on Mars rovers with

828
00:48:27,719 --> 00:48:30,440
Speaker 11: Steve Squires for a while. And then I was in

829
00:48:30,520 --> 00:48:33,640
Speaker 11: electrical engineering and got into satellites, went to grad.

830
00:48:33,440 --> 00:48:33,880
Speaker 10: School on that.

831
00:48:34,040 --> 00:48:35,640
Speaker 11: So that's kind of how I got involved. It was

832
00:48:35,960 --> 00:48:37,800
Speaker 11: it seemed like a cooler job. I love being in

833
00:48:37,800 --> 00:48:39,440
Speaker 11: the library. Don't get me wrong, I'm book room in

834
00:48:39,480 --> 00:48:43,520
Speaker 11: My first word was book but like, but the rovers

835
00:48:43,719 --> 00:48:44,319
Speaker 11: were a lot of fun.

836
00:48:44,400 --> 00:48:46,719
Speaker 2: But you love this, you love satellites.

837
00:48:46,760 --> 00:48:52,520
Speaker 11: Why it is challenging. It is one of the most

838
00:48:52,600 --> 00:48:56,120
Speaker 11: mentally challenging, toughest fields I've ever been in, because when

839
00:48:56,239 --> 00:49:00,840
Speaker 11: it breaks, it is gone, and it is really hard

840
00:49:01,280 --> 00:49:05,759
Speaker 11: to obtain funding, get funding to do it, get the

841
00:49:05,760 --> 00:49:08,680
Speaker 11: hardware built, have it working, get it to the rocket,

842
00:49:08,800 --> 00:49:11,400
Speaker 11: have it to survive the rocket launch, get up to orbit,

843
00:49:11,520 --> 00:49:14,920
Speaker 11: and then you're able to do things and get perspectives

844
00:49:14,960 --> 00:49:17,560
Speaker 11: that really there's no other way to do it. And

845
00:49:17,600 --> 00:49:22,360
Speaker 11: you're also able to answer science questions like for astronomers

846
00:49:22,400 --> 00:49:25,399
Speaker 11: and astrophysicists or people who are doing remote sensing on Earth,

847
00:49:25,400 --> 00:49:27,920
Speaker 11: that you can't get that data any other way, And

848
00:49:28,040 --> 00:49:31,120
Speaker 11: that part's really rewarding. Watching a rocket launch is worth

849
00:49:31,800 --> 00:49:34,360
Speaker 11: a good five years of working your butt off. I

850
00:49:34,400 --> 00:49:36,120
Speaker 11: would say, like if I had to give the trade,

851
00:49:36,160 --> 00:49:39,720
Speaker 11: like just having old rocket launched, feeling the last and

852
00:49:39,880 --> 00:49:43,400
Speaker 11: watching knowing that you know your spacecraft is on there,

853
00:49:43,440 --> 00:49:44,879
Speaker 11: and then you have to run back and make sure

854
00:49:44,880 --> 00:49:46,920
Speaker 11: it works. But like that it's on there and it's

855
00:49:46,920 --> 00:49:49,239
Speaker 11: going up is like one of the coolest feelings ever.

856
00:49:49,360 --> 00:49:52,280
Speaker 11: So there's a lot of joy and pride and skill

857
00:49:52,320 --> 00:49:55,759
Speaker 11: building and challenge in the field. So that that's one

858
00:49:55,800 --> 00:49:57,839
Speaker 11: of the reasons why I love it.

859
00:49:58,640 --> 00:50:00,360
Speaker 2: As you do your work here at MIT, can you

860
00:50:00,400 --> 00:50:02,239
Speaker 2: see what the next big thing is likely to be?

861
00:50:03,680 --> 00:50:06,279
Speaker 11: It's exciting. You never know what the next big thing is.

862
00:50:06,320 --> 00:50:08,239
Speaker 11: That Some of the things that I think are exciting

863
00:50:08,320 --> 00:50:12,240
Speaker 11: are the ability of satellites to communicate directly to cell phones.

864
00:50:12,280 --> 00:50:12,440
Speaker 7: Now.

865
00:50:12,440 --> 00:50:15,680
Speaker 11: I know iridium and the iridium phones have been a

866
00:50:15,680 --> 00:50:20,160
Speaker 11: thing for a while, but directing connecting directly to existing

867
00:50:20,360 --> 00:50:26,600
Speaker 11: consumer electronics without modification your iPhone is happening, and so

868
00:50:26,640 --> 00:50:29,799
Speaker 11: they're essentially showing There are multiple companies now who are

869
00:50:29,840 --> 00:50:32,400
Speaker 11: starting to show that you can actually take the technology

870
00:50:32,440 --> 00:50:35,200
Speaker 11: that are normal cell towers on the ground and put

871
00:50:35,200 --> 00:50:37,880
Speaker 11: them in lower orbit and they will work with your phone.

872
00:50:38,360 --> 00:50:40,719
Speaker 11: And so we have some search and rescue signals and

873
00:50:40,760 --> 00:50:44,600
Speaker 11: partnerships between companies like Apple, Global Star, and there are

874
00:50:44,640 --> 00:50:46,760
Speaker 11: a few other companies that are working in this space

875
00:50:46,800 --> 00:50:49,160
Speaker 11: to do direct to cell phone. I think that's going

876
00:50:49,239 --> 00:50:53,799
Speaker 11: to be really interesting as time evolves, especially as we

877
00:50:53,840 --> 00:50:57,320
Speaker 11: have more autonomous vehicles and people are you know, needing

878
00:50:57,440 --> 00:51:00,480
Speaker 11: entertainment and data and in different places because they have

879
00:51:00,520 --> 00:51:04,760
Speaker 11: more time to use it. I think also on orbit

880
00:51:05,600 --> 00:51:07,959
Speaker 11: getting to the point where we have more compute on orbit.

881
00:51:08,080 --> 00:51:13,640
Speaker 11: Right now, satellites mostly are run by not very sophisticated computers.

882
00:51:13,840 --> 00:51:16,399
Speaker 11: They're they're getting better and they're starting to use more

883
00:51:16,719 --> 00:51:21,240
Speaker 11: commercial technology, more of the Nvidia chips and md chips

884
00:51:21,239 --> 00:51:26,799
Speaker 11: on orbit. But when we're developing, it's really hard to

885
00:51:27,239 --> 00:51:29,879
Speaker 11: only just take pictures and then send them all down

886
00:51:29,920 --> 00:51:31,720
Speaker 11: to the ground. So you have a lot of data

887
00:51:31,760 --> 00:51:34,799
Speaker 11: that the normal mode of operations, you take a lot

888
00:51:34,840 --> 00:51:38,160
Speaker 11: of data and you communicate it by radio usually because

889
00:51:38,160 --> 00:51:41,200
Speaker 11: of weather, all down to the ground, and then you

890
00:51:41,239 --> 00:51:43,879
Speaker 11: process it on the ground and then you tell your

891
00:51:43,880 --> 00:51:46,280
Speaker 11: title it's what to do next. So there's a cycle

892
00:51:46,360 --> 00:51:48,839
Speaker 11: of getting data down to the ground, and it's hard

893
00:51:48,840 --> 00:51:52,000
Speaker 11: to get data down to the ground. Getting frequency lescenses

894
00:51:52,040 --> 00:51:55,840
Speaker 11: is difficult, it's expensive, requires a lot of management, requires

895
00:51:55,880 --> 00:51:59,200
Speaker 11: a lot of power on board. So putting computers on

896
00:51:59,239 --> 00:52:03,839
Speaker 11: board that can serve on board and running now some

897
00:52:03,880 --> 00:52:06,040
Speaker 11: of the new AI models, so you can take the

898
00:52:06,080 --> 00:52:09,440
Speaker 11: picture on board. You have a model that can decide

899
00:52:09,440 --> 00:52:11,120
Speaker 11: whether or not what you wanted in the picture is

900
00:52:11,120 --> 00:52:13,719
Speaker 11: in the picture. If it's in the picture, it prioritizes it.

901
00:52:13,760 --> 00:52:15,319
Speaker 11: If it's not in the picture, it throws it out.

902
00:52:15,360 --> 00:52:17,520
Speaker 11: If it's a cloudy picture, it throws it out and

903
00:52:17,600 --> 00:52:20,160
Speaker 11: saves only the things you really wanted and then sends

904
00:52:20,160 --> 00:52:23,720
Speaker 11: it back down. Also, getting the satellites to communicate between

905
00:52:23,760 --> 00:52:26,239
Speaker 11: each other so that they can tell each other, hey,

906
00:52:26,440 --> 00:52:28,920
Speaker 11: I finished this task, here's the next, and in the

907
00:52:28,920 --> 00:52:31,040
Speaker 11: task lists passed back to you, kind of like playing

908
00:52:31,080 --> 00:52:33,960
Speaker 11: tag instead of waiting for that satellite to tell the

909
00:52:33,960 --> 00:52:36,560
Speaker 11: ground and the ground to tell everybody what the new

910
00:52:36,600 --> 00:52:40,440
Speaker 11: plan is. So being able to replan, retask, and to

911
00:52:40,440 --> 00:52:42,360
Speaker 11: be able to make decisions about what is good and

912
00:52:42,440 --> 00:52:45,160
Speaker 11: bad data dynamically will be new and exciting.

913
00:52:45,880 --> 00:52:48,040
Speaker 2: One of the things Professor Klhoy and her team of

914
00:52:48,080 --> 00:52:50,720
Speaker 2: grad students are working on is a sort of robot

915
00:52:50,920 --> 00:52:54,120
Speaker 2: that can be launched into orbit and then assemble satellites

916
00:52:54,160 --> 00:52:56,960
Speaker 2: in space to avoid the rough and tumble of the

917
00:52:57,040 --> 00:52:57,920
Speaker 2: launch itself.

918
00:52:59,000 --> 00:53:02,600
Speaker 11: All right, So this is a project that's called orbital locker.

919
00:53:04,360 --> 00:53:07,480
Speaker 11: One of the challenges about space is that you have

920
00:53:07,560 --> 00:53:09,560
Speaker 11: to get everything to orbit, and to get to orbit

921
00:53:09,680 --> 00:53:15,600
Speaker 11: has to go in a rocket, and rockets are very vibrating, dynamic, loud,

922
00:53:15,880 --> 00:53:19,279
Speaker 11: they shake everything a lot. So the launch, during the launch, yeah,

923
00:53:19,280 --> 00:53:21,520
Speaker 11: it's for those first couple it's only a couple of minutes,

924
00:53:21,920 --> 00:53:25,600
Speaker 11: but they're very important minutes. And so everything we do

925
00:53:25,640 --> 00:53:28,799
Speaker 11: about satellites we pack them in tight. We glue everything down.

926
00:53:28,840 --> 00:53:32,880
Speaker 11: Everything's tied down, latched down, you know, locked in, so

927
00:53:32,920 --> 00:53:37,879
Speaker 11: that nothing breaks most of the time when it's going

928
00:53:37,960 --> 00:53:40,800
Speaker 11: up in the rocket. And then when we get to orbit,

929
00:53:41,080 --> 00:53:43,600
Speaker 11: the you know, firing opens. We get to orbit, the

930
00:53:43,600 --> 00:53:47,000
Speaker 11: satellite is deployed, it's in orbit, the solar panels will unfurl,

931
00:53:48,239 --> 00:53:51,399
Speaker 11: but you basically have the thing you built on the ground.

932
00:53:52,520 --> 00:53:55,080
Speaker 11: What we were thinking is, wouldn't it be great if

933
00:53:55,160 --> 00:54:02,760
Speaker 11: you could put a platform in orbit that was packed

934
00:54:02,800 --> 00:54:05,280
Speaker 11: with things that don't break when they're on a rocket,

935
00:54:05,320 --> 00:54:09,279
Speaker 11: So very simple components that you can just stow away,

936
00:54:09,320 --> 00:54:12,120
Speaker 11: and you have these kind of robust robots that can

937
00:54:12,239 --> 00:54:15,040
Speaker 11: unpack it themselves. But then they can build whatever they

938
00:54:15,080 --> 00:54:17,720
Speaker 11: want once they get up on orbit. There's no shaking.

939
00:54:18,000 --> 00:54:19,480
Speaker 11: Once you're on orbit, it's very quiet.

940
00:54:19,520 --> 00:54:20,280
Speaker 2: So you have a kit.

941
00:54:20,480 --> 00:54:22,799
Speaker 11: Yeah, it's like a kit. It's a kit where the

942
00:54:22,840 --> 00:54:25,359
Speaker 11: only thing that has to survive the rocket launch are

943
00:54:25,600 --> 00:54:30,000
Speaker 11: these xyz so three axis robots that move around and

944
00:54:30,040 --> 00:54:34,200
Speaker 11: an arm that snaps everything together. And as long as

945
00:54:34,360 --> 00:54:38,200
Speaker 11: these elements are robust enough to not get destroyed or

946
00:54:38,280 --> 00:54:41,399
Speaker 11: damaged in the launch, you can go up to orbit

947
00:54:41,480 --> 00:54:43,200
Speaker 11: and build something as big as you want.

948
00:54:43,400 --> 00:54:45,480
Speaker 2: But you have to program in advance with the robot

949
00:54:45,600 --> 00:54:47,480
Speaker 2: has to assemble in what ordering things trying.

950
00:54:47,600 --> 00:54:50,560
Speaker 11: Yes, so there's a lot of algorithm work and software work.

951
00:54:51,040 --> 00:54:53,920
Speaker 11: But the nice part about this is the platform on

952
00:54:54,040 --> 00:54:57,040
Speaker 11: orbit you can still talk to you can reprogram things

953
00:54:57,080 --> 00:54:59,160
Speaker 11: on orbit, you can give it different directions if you

954
00:54:59,200 --> 00:55:01,600
Speaker 11: want to. You just to make sure you kind of

955
00:55:01,600 --> 00:55:03,480
Speaker 11: know what's in your warehouse. So it's kind of like

956
00:55:03,640 --> 00:55:07,680
Speaker 11: almost a warehouse of hardware that you could use on

957
00:55:07,800 --> 00:55:10,960
Speaker 11: orbit to assemble things and deploy them and make them

958
00:55:10,960 --> 00:55:13,680
Speaker 11: as big and as complicated as you want without having

959
00:55:13,719 --> 00:55:18,000
Speaker 11: to fit in the you know, the couple meters I think,

960
00:55:18,440 --> 00:55:21,200
Speaker 11: you know, if we get starship up to six meters

961
00:55:21,360 --> 00:55:23,359
Speaker 11: of space that you have in a rocket, you could

962
00:55:23,360 --> 00:55:26,359
Speaker 11: go well beyond that and not have to pre plan

963
00:55:26,440 --> 00:55:29,600
Speaker 11: everything to unfurl and deploy. You could just build it

964
00:55:29,680 --> 00:55:31,640
Speaker 11: the way you wanted it as big as you wanted.

965
00:55:32,320 --> 00:55:34,000
Speaker 4: Once you get up there, is this a prototype?

966
00:55:34,080 --> 00:55:36,759
Speaker 11: Is this actually a prototype? So this this has been

967
00:55:36,880 --> 00:55:39,680
Speaker 11: used so this recently in May, it was on a

968
00:55:39,760 --> 00:55:42,880
Speaker 11: zero gravity launch, so the graduate students James and Lila

969
00:55:43,000 --> 00:55:45,120
Speaker 11: who are working on it to get on one of

970
00:55:45,160 --> 00:55:49,000
Speaker 11: those planes that do the parabolic flights and so you

971
00:55:49,080 --> 00:55:52,719
Speaker 11: have micro gravity for you know, a few seconds thirty

972
00:55:52,760 --> 00:55:54,760
Speaker 11: seconds at a time, and so they had the robot

973
00:55:54,760 --> 00:55:59,120
Speaker 11: working there and they actually learned a lot about cord management.

974
00:55:59,200 --> 00:56:03,680
Speaker 11: So wires don't behave they don't lay down like this

975
00:56:03,719 --> 00:56:05,759
Speaker 11: when they're in gravity, like they're kind of held down,

976
00:56:05,840 --> 00:56:07,680
Speaker 11: but when they're on orbit they move around a lot more.

977
00:56:07,680 --> 00:56:10,560
Speaker 11: And so we had to update our wire management systems.

978
00:56:11,440 --> 00:56:13,880
Speaker 11: And then we'd like to get this to be a

979
00:56:13,920 --> 00:56:16,439
Speaker 11: prototype on orbit on the space station, so it could

980
00:56:16,440 --> 00:56:18,719
Speaker 11: be inside the station and we could start to demonstrate

981
00:56:18,719 --> 00:56:21,640
Speaker 11: it or on a free flyer on its own satellite later.

982
00:56:21,719 --> 00:56:22,760
Speaker 11: So that that's kind of what we're.

983
00:56:22,640 --> 00:56:26,479
Speaker 2: Hoping that does it for us here at Wall Street Week,

984
00:56:26,680 --> 00:56:29,840
Speaker 2: I'm David Weston. See you next week for more stories

985
00:56:29,880 --> 00:56:45,840
Speaker 2: of capitalism.