WEBVTT - Bloomberg Businessweek Weekend - January 19th, 2024 0:00:01.520 --> 0:00:05.920 This is Bloomberg business Week Inside from the reporters and 0:00:06.080 --> 0:00:09.639 editors who bring you America's most trusted business magazine, plus 0:00:09.720 --> 0:00:13.600 gloom War, business finance, and tech news. The Bloomberg Business 0:00:13.600 --> 0:00:18.800 Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.320 --> 0:00:23.240 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:23.520 --> 0:00:25.880 It was a holiday shortened week for many, but that 0:00:25.920 --> 0:00:28.639 didn't make it any less busy. As we kicked off 0:00:28.840 --> 0:00:32.080 with a decisive victory for Donald Trump in the Iowa Caucuses. 0:00:32.440 --> 0:00:35.320 We got more big banker innings and a strong US 0:00:35.360 --> 0:00:37.760 retail sales report. Yep, we were all out shopping in 0:00:37.760 --> 0:00:40.959 the month of December. And we also got daily headlines 0:00:40.960 --> 0:00:44.239 over what some have described as escalating tensions in the 0:00:44.240 --> 0:00:47.120 Middle East. This a main topic that was on the 0:00:47.159 --> 0:00:48.879 minds of the folks at the annual meeting of the 0:00:48.880 --> 0:00:50.880 World Economic Forum in Davos. 0:00:51.120 --> 0:00:54.680 On that in Davos this past week, Robert Garrett, CEO 0:00:54.840 --> 0:00:57.800 of Hackensack Meridian Health it's one of the largest healthcare 0:00:57.840 --> 0:01:00.360 systems in New Jersey. Well, he's stopped by to give 0:01:00.440 --> 0:01:03.400 us a check up on global healthcare, including the role 0:01:03.600 --> 0:01:04.080 of AI. 0:01:04.280 --> 0:01:05.199 It is everywhere. 0:01:05.400 --> 0:01:07.480 Also this week a big deal in the chip space 0:01:07.560 --> 0:01:10.480 involving two companies that really are in household names, and 0:01:10.560 --> 0:01:12.600 yet the deal one of the largest in the last 0:01:12.640 --> 0:01:13.759 twelve months plus. 0:01:13.760 --> 0:01:16.039 From bitcoin to back to work, We've got the five 0:01:16.120 --> 0:01:19.039 ETFs to watch in twenty twenty four, and a little 0:01:19.040 --> 0:01:21.440 bit later on we got Peak Ski co founders Andy 0:01:21.480 --> 0:01:24.600 Wirth and Olympic and World Championship gold medalist Body Miller 0:01:24.800 --> 0:01:26.480 on disrupting the ski industry. 0:01:26.560 --> 0:01:27.760 Yeah, that was a fun conversation. 0:01:28.040 --> 0:01:29.560 All right, all of that to come, We begin with 0:01:29.600 --> 0:01:32.480 the World Economic Forums annual meeting in Davos, where some 0:01:32.560 --> 0:01:35.560 of the conversations there help shape this week's narrative. This 0:01:35.720 --> 0:01:39.040 year's theme rebuilding trust, and they were asking leaders who 0:01:39.080 --> 0:01:41.440 were there. Will the coming year be a period of 0:01:41.520 --> 0:01:44.240 perma crisis or will twenty twenty four be a time 0:01:44.280 --> 0:01:46.600 for resolution, resilience and recovery. 0:01:46.760 --> 0:01:49.160 There's some reason to look at the glasses half full. 0:01:49.520 --> 0:01:51.920 Maybe it's all to talk about a soft landing scenario 0:01:51.960 --> 0:01:54.279 and rate cuts, But on the other hand, is reported 0:01:54.280 --> 0:01:56.680 out in a Bloomberg Big Take this week, if the 0:01:56.680 --> 0:01:59.320 pessimists have their way, there are plenty of year ahead 0:01:59.400 --> 0:02:01.200 risks to get keep leaders awake at night. 0:02:01.400 --> 0:02:02.080 That's for sure. 0:02:02.200 --> 0:02:04.880 That story, by the way, a collaboration between Bloomberg News 0:02:04.880 --> 0:02:08.639 and Bloomberg Economics. Bloomberg News Global Economics editor Ben Holland 0:02:08.720 --> 0:02:09.519 joined us with more. 0:02:09.840 --> 0:02:13.520 Yeah, we started from the point that the pessimists have 0:02:14.200 --> 0:02:16.920 tended to get things right in recent years, and so 0:02:17.440 --> 0:02:20.239 obviously after a few years in which we've had, starting 0:02:20.280 --> 0:02:22.400 with the pandemic, it was pretty clear to see all 0:02:22.400 --> 0:02:24.720 the things that could go wrong. And I think where 0:02:24.720 --> 0:02:28.519 we started was the two major conflicts that are still 0:02:28.600 --> 0:02:32.480 unfolding in twenty twenty four with no evident and in 0:02:32.639 --> 0:02:35.000 sight most of all them, add least which is dominating 0:02:35.040 --> 0:02:37.519 our headlines every day. I think that was kind of 0:02:37.560 --> 0:02:39.600 the starting point for global. 0:02:39.320 --> 0:02:40.040 Risks this year. 0:02:40.280 --> 0:02:40.480 Yeah. 0:02:40.480 --> 0:02:42.320 I think a lot of people, certainly if you would 0:02:42.320 --> 0:02:44.960 go back a year, did not see that coming. And 0:02:45.000 --> 0:02:48.280 at this point we are what more than one hundred 0:02:48.360 --> 0:02:53.480 days into Israel's and the Israeli gods of war. But 0:02:53.520 --> 0:02:58.720 the threat is not just within that region. Then it's 0:02:58.760 --> 0:03:04.320 a threat that is really concerns a wider, more global 0:03:05.600 --> 0:03:07.760 wide or more global involvement of this war. 0:03:08.320 --> 0:03:08.560 Yeah. 0:03:08.600 --> 0:03:11.080 So I think whenever you talk about a conflict in 0:03:11.120 --> 0:03:14.480 the Middle East. The vector by which people think that 0:03:14.480 --> 0:03:17.720 that's likely to affect world economy or that could in 0:03:17.760 --> 0:03:20.960 the worst case affect the world economy is of course 0:03:21.080 --> 0:03:24.560 via energy prices, and we haven't really seen that in 0:03:24.600 --> 0:03:27.560 the as you say, in one hundred days of the 0:03:27.600 --> 0:03:31.240 conflict in Gaza so far. But the risk that oil 0:03:31.280 --> 0:03:33.320 markets have been worried about, of course, was that the 0:03:33.360 --> 0:03:36.000 conflict could escalate, and I think it's hard to say 0:03:36.600 --> 0:03:39.200 after one hundred days, even though it perhaps in fact 0:03:39.320 --> 0:03:41.720 did not escalate in the way that people fit, it's 0:03:41.760 --> 0:03:43.640 hard to say that the risk has gone any less. 0:03:44.600 --> 0:03:46.040 And when we look at what's been happening in the 0:03:46.040 --> 0:03:49.240 Red Sea in the last week or so, you could 0:03:49.240 --> 0:03:51.880 actually easily argue that it's got more. And not only that, 0:03:51.920 --> 0:03:55.120 but in addition to the biggest risk of all Middle 0:03:55.120 --> 0:03:58.400 East conflicts, which is an effect on the world economy 0:03:58.480 --> 0:04:01.440 via oil prices, you now have a very clear risk 0:04:01.520 --> 0:04:05.320 of some kind of effect shipping prices also because we 0:04:05.400 --> 0:04:08.560 are seeing disruption too a very important trade route, and 0:04:08.600 --> 0:04:11.040 it's not really clear that anybody can do a whole 0:04:11.080 --> 0:04:11.680 lot about it. 0:04:11.880 --> 0:04:13.960 Yeah, it certainly feels like, you know, every day we 0:04:14.000 --> 0:04:16.280 see the headlines, we talk about the Red Sea, we 0:04:16.320 --> 0:04:19.560 talk about you know, those giant ships, you know, pausing 0:04:19.680 --> 0:04:21.880 or taking a longer route, a more costly route. But 0:04:21.920 --> 0:04:25.640 it does feel like as attacks seem to escalate, dare 0:04:25.680 --> 0:04:27.800 I say it, it does feel like we're just kind 0:04:27.800 --> 0:04:31.000 of waiting to see does it go truly the escalation 0:04:31.200 --> 0:04:35.520 route or does Folks somehow global leaders say Okay, we 0:04:35.560 --> 0:04:38.240 got to stop this before it just you know, takes 0:04:38.240 --> 0:04:40.000 off and running and we really are kind of in 0:04:40.040 --> 0:04:42.320 a third World war, if you will, even though some 0:04:42.520 --> 0:04:45.479 might say that we already are there. Hey, I want 0:04:45.480 --> 0:04:47.120 to go to the FED because we just talked about 0:04:47.120 --> 0:04:49.479 it with our TV colleagues, the FED getting it wrong. 0:04:49.520 --> 0:04:53.000 It does feel like the markets are kind of pulling 0:04:53.080 --> 0:04:58.640 back from expectations of an aggressive FED sometimes, and we 0:04:58.720 --> 0:05:01.960 keep getting warnings from FEDS if they could get this 0:05:02.000 --> 0:05:03.560 wrong or could they. 0:05:04.000 --> 0:05:06.440 The FED and any central bank can always can always 0:05:06.480 --> 0:05:07.279 get it wrong, of course. 0:05:07.360 --> 0:05:07.560 Yeah. 0:05:07.600 --> 0:05:09.640 So what we found interesting when we were looking at 0:05:09.640 --> 0:05:12.000 the risks from the point of view central bank policy 0:05:12.920 --> 0:05:16.159 particularly was the comparison between the US and Europe. I 0:05:16.200 --> 0:05:19.680 think where obviously, in both cases you've had very subessential 0:05:19.920 --> 0:05:22.760 interest rate increases the kind of policy that should slow 0:05:22.800 --> 0:05:25.719 down the economy, And in either case, has it really 0:05:26.480 --> 0:05:28.440 led to the kind of drastic slow down that you 0:05:28.520 --> 0:05:31.440 might have expected if you plugged in quite that big 0:05:32.440 --> 0:05:34.200 interest rate hike into the models. 0:05:34.560 --> 0:05:35.839 And we kind of felt that there were. 0:05:35.680 --> 0:05:39.279 Two different risks going on in the US versus Europe. 0:05:39.320 --> 0:05:41.640 And in the US it seemed that maybe a bigger 0:05:41.720 --> 0:05:43.680 risk was that just the thing didn't work, you know, 0:05:44.000 --> 0:05:46.159 it didn't slow down the economy all that much. It 0:05:46.240 --> 0:05:48.880 might actually start heating up again in ways that the 0:05:48.920 --> 0:05:51.120 FED doesn't like. And of course what we talked about 0:05:51.200 --> 0:05:54.280 with the Middle East conflict and to shipping costs or 0:05:54.400 --> 0:05:57.039 energy costs, that could play into that too. And so 0:05:57.160 --> 0:05:59.320 you might have a risk that the FED that things 0:05:59.320 --> 0:06:02.760 it's done, realizes at some point in twenty four that 0:06:02.880 --> 0:06:05.520 maybe it isn't done. Whereas in Europe you seem to 0:06:05.520 --> 0:06:07.160 have kind of the opposite risk, which was a central 0:06:07.200 --> 0:06:11.000 bank that's done a lot, economy slowed down, but it 0:06:11.120 --> 0:06:13.080 did not come to a kind of juttering hope. But 0:06:13.240 --> 0:06:15.680 what if it's all still in the pipeline, you know, 0:06:15.760 --> 0:06:19.120 the famous long variable lags of monetary policy. What if 0:06:19.120 --> 0:06:21.360 in Europe. That stuff is still yet to bite in 0:06:21.400 --> 0:06:24.560 a big way. That is what could lead to a 0:06:24.640 --> 0:06:25.920 sharpest slow down in Europe. 0:06:25.960 --> 0:06:29.640 And twenty four hey Ben in the piece you guys 0:06:29.680 --> 0:06:34.320 mentioned this natural language processing model that captures FED speaker sentiment. 0:06:35.240 --> 0:06:38.880 This is cool. What does it show and how does 0:06:38.880 --> 0:06:39.400 this work? 0:06:40.240 --> 0:06:45.119 It's a kind of linguistic analysis of what FED people 0:06:45.120 --> 0:06:47.720 are saying, quite literally with a waiting attached to the 0:06:47.839 --> 0:06:51.440 various words that they use. It's based on news reports, 0:06:52.320 --> 0:06:55.360 but based on thousands of news stories that come out 0:06:55.400 --> 0:06:59.520 with direct comments from FED speaking because it's an attempt 0:06:59.800 --> 0:07:03.000 to gauge, you know, if you could, if you could 0:07:03.040 --> 0:07:05.560 literally measure their worst to see how that you know, 0:07:05.600 --> 0:07:10.720 whether they're tilting in the hawchesh or dubbish direction based 0:07:10.760 --> 0:07:13.800 on the use of certain keywords, certain kind of phrases 0:07:13.880 --> 0:07:14.720 that come into play. 0:07:14.840 --> 0:07:15.640 What would it tell you? 0:07:16.240 --> 0:07:18.160 And what it tells you I think is pretty clear 0:07:18.200 --> 0:07:20.600 in the chart and the story, which is that yes, 0:07:20.640 --> 0:07:23.920 they're pivoted, but the pivot has a long way to 0:07:23.960 --> 0:07:27.880 go before it actually gets into the area of you know, yeah, 0:07:27.920 --> 0:07:29.520 we're about to cut raids. 0:07:29.240 --> 0:07:32.600 All right, Let's get to also one of the largest 0:07:32.600 --> 0:07:34.440 economies out there and we're talking about China. 0:07:34.840 --> 0:07:35.680 Twenty twenty three. 0:07:35.720 --> 0:07:37.800 We all thought, Okay, that's going to be the year China. 0:07:37.560 --> 0:07:38.400 Comes roaring back. 0:07:38.440 --> 0:07:42.720 It did not, you guys, note it still looks a 0:07:42.760 --> 0:07:43.640 little bit wobbly. 0:07:45.840 --> 0:07:50.320 Yeah, the risk of the long running real estate crisis there, 0:07:50.360 --> 0:07:54.320 which of course in other countries like Japan in the 0:07:54.600 --> 0:07:56.880 in the nineties and the United States in two thousand 0:07:56.880 --> 0:07:59.520 and eight. I think it's on everyone's mind that, you know, 0:07:59.800 --> 0:08:03.080 really as they crunch can lead to a deeper financial crisis. 0:08:03.800 --> 0:08:08.880 Hasn't happened in China, and what you've had a disappointing rebound, 0:08:09.480 --> 0:08:12.320 but the risks this year, we think it kind of 0:08:12.320 --> 0:08:15.640 tilted to the downside in China and the selling point 0:08:15.680 --> 0:08:16.480 is not great anyway. 0:08:17.240 --> 0:08:19.160 So we don't have time then to get to everything 0:08:19.200 --> 0:08:20.720 on the list here, but I want to give you 0:08:20.760 --> 0:08:22.680 the choice to go where you want to go. And 0:08:23.280 --> 0:08:26.120 what are audience watching and listening right now needs to 0:08:26.160 --> 0:08:27.440 know about the year ahead. 0:08:27.800 --> 0:08:29.760 Well, you know, a couple of to try and end 0:08:29.760 --> 0:08:32.280 on a bright note here in the piece, we basically 0:08:33.760 --> 0:08:36.280 focused on the things that can go wrong, and obviously 0:08:36.320 --> 0:08:38.440 there's a lot that can go wrong. It was kind 0:08:38.440 --> 0:08:40.920 of interesting to look at a couple of coonomies where 0:08:41.080 --> 0:08:42.960 you feel like, you know, most things that could go 0:08:43.000 --> 0:08:46.320 wrong already have gone wrong, which is Turkey in Argentina, 0:08:47.559 --> 0:08:51.360 and both of them are still facing very severe challenges, 0:08:51.840 --> 0:08:56.600 but just the possibility that those countries might turn a corner. 0:08:57.200 --> 0:09:01.160 There's been a long time incoming. In Argentina still that 0:09:01.800 --> 0:09:03.600 you know, their inflation rate is above two hundred percent 0:09:03.679 --> 0:09:05.880 and there is a substantial risk that it kind of 0:09:05.960 --> 0:09:10.040 takes off even from there. But after a radical change 0:09:10.040 --> 0:09:12.280 of policy and with some support from the IMFF, it 0:09:12.480 --> 0:09:15.040 does seem possible that they could turn the corner. This 0:09:15.080 --> 0:09:18.040 here in Turkey has also done a kind of you 0:09:18.160 --> 0:09:22.200 turn away from its very orthodox policies. It looks now 0:09:22.320 --> 0:09:26.360 like things might be stabilising there. So that's let's highlight 0:09:26.400 --> 0:09:27.520 those as the kind of things. 0:09:28.040 --> 0:09:29.679 Right, final thoughts twenty seconds. 0:09:29.760 --> 0:09:32.240 Risks are risks, right, they may not play out, and 0:09:32.280 --> 0:09:33.800 we need to remember that, right. 0:09:34.040 --> 0:09:36.600 That would be the best good outcome, I think, is 0:09:36.600 --> 0:09:37.800 if none of the bad outcomes. 0:09:38.120 --> 0:09:39.760 Yeah, yeah, I'm. 0:09:39.640 --> 0:09:41.760 Going to I mean, the guys are out of are 0:09:41.800 --> 0:09:44.199 the individuals in Davos right now are seeing the glasses 0:09:44.200 --> 0:09:46.320 half full of their feeling they're seeing a lot of 0:09:46.320 --> 0:09:48.120 resilience despite. 0:09:47.679 --> 0:09:48.720 This list of risks. 0:09:48.720 --> 0:09:54.720 Well, that's why, well said, Well said, Ben, thank you 0:09:54.720 --> 0:09:57.280 so much. We really appreciate Ben Holland, Global Economics editor 0:09:57.280 --> 0:10:00.800 at Bloomberg News on zoom from Washington, DC. This is 0:10:00.800 --> 0:10:03.719 the Bloomberg Big Take, which you can catch on the 0:10:03.760 --> 0:10:07.679 Bloomberg also at Bloomberg dot com slash Big Take, and 0:10:07.720 --> 0:10:10.280 you can read more of those stores and other big takes. 0:10:10.360 --> 0:10:13.480 Always love it. It's a big think piece which we can. 0:10:13.400 --> 0:10:16.080 Apply across a lot of great year ahead pieces. 0:10:16.559 --> 0:10:17.280 A lot of risks. 0:10:18.000 --> 0:10:20.520 Maybe cross my fingers, cross my toes, they don't come out. 0:10:21.960 --> 0:10:25.559 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:25.559 --> 0:10:28.920 live weekday afternoons from three to six Eastern Listen on 0:10:29.000 --> 0:10:33.040 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, 0:10:33.320 --> 0:10:35.600 or watch us live on YouTube. 0:10:36.320 --> 0:10:38.040 Well, we talk about it all the time, just how 0:10:38.040 --> 0:10:41.360 big a contributor it is to the economy, and we're 0:10:41.360 --> 0:10:44.760 talking about healthcare. Spending on health accounted for seventeen point 0:10:44.840 --> 0:10:47.120 three percent of US GDP and twenty twenty two for 0:10:47.160 --> 0:10:50.040 a total of four and a half trillion. That's according 0:10:50.080 --> 0:10:52.760 to the centers for Medicare and also Medicaid services Tim. 0:10:52.840 --> 0:10:54.680 Yeah. Last week we got the numbers from the BLA 0:10:54.800 --> 0:10:57.560 self Care adding thirty eight thousand jobs in December second 0:10:57.559 --> 0:10:59.440 and hiring only to the government. 0:11:00.000 --> 0:11:00.400 A lot of. 0:11:00.320 --> 0:11:02.040 Money, yeah, a lot of people. 0:11:02.240 --> 0:11:02.560 Yeah. 0:11:02.640 --> 0:11:04.280 When it comes to healthcare in the US. 0:11:04.200 --> 0:11:05.959 We got a lot of questions. So we think about 0:11:06.080 --> 0:11:08.480 how will AI transform this. What about the role of 0:11:08.480 --> 0:11:11.360 private equity in the hospital and healthcare space? Will it 0:11:11.400 --> 0:11:14.600 cut costs and most importantly improve patient outcomes. We've got 0:11:14.640 --> 0:11:18.040 a great guest to really take a big view perspective 0:11:18.160 --> 0:11:21.239 on this. Robert Carrott is chief executive officer of Hackensack 0:11:21.520 --> 0:11:24.280 Meridian Health. I know the system well, a New Jersey 0:11:24.280 --> 0:11:27.200 based hospital network eighteen hospitals, seven thousand doctors in more 0:11:27.240 --> 0:11:30.000 than five hundred locations that provide care. He is also 0:11:30.160 --> 0:11:34.199 chair of World Economic Forum Health and Healthcare Governor's Community, 0:11:34.640 --> 0:11:37.120 and before he heads over to Davos for next week, 0:11:37.160 --> 0:11:39.400 he joins us here in the blueberg A Directive Broker studio. 0:11:39.679 --> 0:11:41.160 Happy New Year, Nice to have you back. 0:11:41.200 --> 0:11:42.440 How are you I am great? 0:11:42.480 --> 0:11:44.360 Happy New Year to both of you. 0:11:44.600 --> 0:11:46.800 Great to be back to It does feelk it feels 0:11:46.840 --> 0:11:48.280 good to be back. It feels like we're kind of 0:11:48.280 --> 0:11:51.920 back to normal, as they say, because. 0:11:51.679 --> 0:11:54.080 We all just get COVID once a year, and you 0:11:54.120 --> 0:11:55.760 know COVID. 0:11:55.480 --> 0:11:58.880 For my routine, right, it is kind of weird. 0:11:59.760 --> 0:12:01.520 So let's start with Davos. 0:12:01.559 --> 0:12:03.760 You're getting over there, you're heading over there. What's top 0:12:03.760 --> 0:12:04.400 of mind for you? 0:12:04.920 --> 0:12:08.120 So you know, as in this new role as chair 0:12:08.160 --> 0:12:09.400 of the Healthcare. 0:12:09.120 --> 0:12:11.120 Going what does that mean? What exactly is that? 0:12:11.240 --> 0:12:15.560 So what that is is we convene healthcare stakeholders and 0:12:15.600 --> 0:12:19.040 we decide what the priority topic or topics should be. 0:12:19.280 --> 0:12:23.199 And as the chair, I have to really convene that group. 0:12:23.240 --> 0:12:25.760 There's a steering committee, and then I have to actually 0:12:25.800 --> 0:12:29.280 chair the meetings that actually take place there. So this year, 0:12:29.720 --> 0:12:31.959 when we thought about all of the topics over the 0:12:32.000 --> 0:12:35.560 last few years, there was health equity and the inequity 0:12:35.640 --> 0:12:40.160 that exists in you know, underserved countries versus the western countries. 0:12:40.320 --> 0:12:43.360 I think like a thirty year gap in life expectancy 0:12:43.400 --> 0:12:47.120 as one example. Then we thought about healthcare access and 0:12:47.160 --> 0:12:51.120 not having equal access across the globe to healthcare and 0:12:51.160 --> 0:12:55.240 healthcare programs. We thought about climate change and the impact 0:12:55.280 --> 0:12:59.600 climate change has on health, and then we thought about 0:13:00.000 --> 0:13:04.200 moving healthcare outcomes and adding more value to the healthcare system, 0:13:04.400 --> 0:13:07.120 all of those. If you think about all those four topics, 0:13:07.240 --> 0:13:10.880 they all are going to be so impacted by what 0:13:11.080 --> 0:13:15.000 is really the most profound innovation of of our our. 0:13:15.080 --> 0:13:15.640 Don't say it. 0:13:15.679 --> 0:13:17.240 Don't go there, don't go there, I won't. 0:13:17.679 --> 0:13:24.680 I'm tempted everything bitcoin bitcoin, Yeah, yeah, health bitcoin Is 0:13:24.679 --> 0:13:25.480 that what you're going to say? 0:13:25.520 --> 0:13:25.680 You know? 0:13:26.000 --> 0:13:28.360 Okay, yeah, the way they say it's the penicillin of 0:13:28.400 --> 0:13:31.360 our generation. But you know what, So so we thought 0:13:31.360 --> 0:13:34.080 AI really did make sense because it really wraps around 0:13:34.120 --> 0:13:37.760 all four topics. So the Steering Committee, we had those discussions, 0:13:38.360 --> 0:13:40.680 they agreed, and so what's going to happen at DAVOS 0:13:40.720 --> 0:13:44.640 is we're going to have a discussion from some of 0:13:44.679 --> 0:13:49.600 the stakeholders pharmaceutical company CEOs as well as device CEOs, 0:13:49.679 --> 0:13:54.120 the device maker CEOs, healthcare systems CEOs as well as 0:13:54.160 --> 0:13:58.640 insurers all around the table hearing about AI. What their 0:13:58.679 --> 0:14:01.400 their take is, what where the impacts are going to be, 0:14:01.640 --> 0:14:03.680 what the pitfalls might be, what safeguards we have to 0:14:03.679 --> 0:14:05.840 set up. Then we're going to bring in the policy makers. 0:14:05.840 --> 0:14:08.360 So we're going to have health ministers from different parts 0:14:08.360 --> 0:14:10.360 of the world come in. We're going to hear from 0:14:10.360 --> 0:14:15.079 their perspective. Then the policymakers leave the room and the 0:14:15.120 --> 0:14:18.400 governors get back together and we break out into small 0:14:18.440 --> 0:14:20.760 groups and we decide what our action plan is going 0:14:20.800 --> 0:14:23.120 to be going forward. And we leave there not just 0:14:23.200 --> 0:14:26.000 with what the problems are or what the challenge, what 0:14:26.080 --> 0:14:29.200 are the solutions. And I'm committed as the chair to 0:14:29.760 --> 0:14:32.400 meet once a month following Davos. So it's not going 0:14:32.440 --> 0:14:33.880 to be something that's going to be put on the 0:14:33.880 --> 0:14:36.800 back burner till next January. It's going to be talked about. 0:14:37.040 --> 0:14:40.400 Okay. So you've thought a lot about AI and healthcare, 0:14:41.760 --> 0:14:43.160 help us understand I mean, I think a lot of 0:14:43.200 --> 0:14:45.680 people have experienced with chat GBT and understanding what generative 0:14:45.680 --> 0:14:48.080 AI can do. But apply that to healthcare space for us, 0:14:48.080 --> 0:14:49.840 and if you think about the world that you want 0:14:49.880 --> 0:14:52.000 to see in five to ten years, paint that picture 0:14:52.040 --> 0:14:53.800 for us. What does it actually look like if AI 0:14:53.840 --> 0:14:54.760 has helped healthcare? 0:14:54.920 --> 0:14:58.240 Well, the first thing I would say, tim is really 0:14:58.360 --> 0:15:03.360 identification of disease earlier. I think that really probably will 0:15:03.400 --> 0:15:07.000 be the most profound impact. And we're already seeing some 0:15:07.000 --> 0:15:11.040 some case studies and some pilot programs that are indicating 0:15:11.080 --> 0:15:14.880 some potentially some some breakthroughs there. You know, at Hackensack 0:15:15.200 --> 0:15:20.120 Meridian as an example, we have we have a pilot 0:15:20.160 --> 0:15:25.680 going on now that is identifying stage three kidney disease earlier. 0:15:26.280 --> 0:15:29.760 And that's that has some profound impact because if you 0:15:29.840 --> 0:15:34.680 can really identify it early enough and apply some prevention. 0:15:34.800 --> 0:15:36.480 But how does it how does it do that? 0:15:36.680 --> 0:15:41.040 Like, well, the technical pieces through through algorithms and patient data, 0:15:41.360 --> 0:15:42.200 they're able to. 0:15:42.440 --> 0:15:45.080 So basically the correct me if I'm wrong, the patient 0:15:45.120 --> 0:15:47.080 will come in and be asked a series of questions 0:15:47.320 --> 0:15:50.320 and the answers to those questions would determine, would go 0:15:50.400 --> 0:15:51.720 through some sort of algorithm and. 0:15:51.840 --> 0:15:54.760 And come back and say, Okay, this patient, you know, 0:15:54.920 --> 0:15:58.120 in three years from now is likely to have you know, 0:15:58.280 --> 0:15:59.080 advanced kidney. 0:15:59.200 --> 0:16:02.000 That's interesting because I a doctor could do the same 0:16:02.000 --> 0:16:02.760 thing right. 0:16:02.600 --> 0:16:05.480 Well, they don't always have all the tools at their disposal. 0:16:06.080 --> 0:16:13.400 This could aggregate imaging, it could aggregate patient data, family history, demographics. 0:16:13.240 --> 0:16:16.600 It's just a lot for a clinician to really do so. 0:16:16.560 --> 0:16:18.680 Almost like having a massive spreadsheet and putting all the 0:16:18.760 --> 0:16:22.320 endpoints and from different sources and just saying almost like 0:16:22.360 --> 0:16:25.480 a probability study, if you will statistically and say you're 0:16:25.520 --> 0:16:27.560 more likely to have these problems. 0:16:27.720 --> 0:16:30.040 Another good example, you know to your question, tim is 0:16:30.680 --> 0:16:34.360 in radiology and imaging. So a radiologist has to read 0:16:34.400 --> 0:16:36.560 an average radiologist in a given day has to read 0:16:36.680 --> 0:16:40.160 like one hundred and fifty scans through AI. They're able 0:16:40.240 --> 0:16:44.320 to then tell the radiologists these three or five need 0:16:44.560 --> 0:16:49.760 priority based on based on the patient's history, the data 0:16:49.800 --> 0:16:52.480 in the medical record, and the scan itself. You need 0:16:52.520 --> 0:16:55.320 to pay attention to these because they may need treatment 0:16:55.520 --> 0:16:59.360 earlier on. So that's really that's been really really helpful. 0:17:00.120 --> 0:17:02.600 When I think about AI in the future, I think 0:17:02.640 --> 0:17:06.080 about some of the clinical outcomes that can approve. There's 0:17:06.119 --> 0:17:07.880 also the efficiency side too, which. 0:17:07.840 --> 0:17:09.480 Is hang on for a second, because I want to 0:17:09.480 --> 0:17:11.040 bring one element into it. Just because we have a 0:17:11.080 --> 0:17:15.080 headline crossing the Bloomberg, UK Prime Minister rehis SUNAC authorizing 0:17:15.160 --> 0:17:17.960 joint military strikes with the US against the Huthi rebels 0:17:17.960 --> 0:17:20.960 in Yemen, and his cabinet approved, according to a person 0:17:21.000 --> 0:17:23.640 familiar with the matter, as the Allies looked to deter 0:17:23.760 --> 0:17:27.639 further attacks commercial vessels in the Red Sea, so his 0:17:27.760 --> 0:17:30.720 cabinet approving the decision on a conference call today air 0:17:30.760 --> 0:17:34.200 strikes possibly as soon as later in the evening, according 0:17:34.240 --> 0:17:38.119 to those familiar. So we continue to see heightened tensions 0:17:38.160 --> 0:17:40.080 in the Middle East. The reason I wanted to jump in, 0:17:40.160 --> 0:17:42.480 Robert is that I do feel like there's going to 0:17:42.480 --> 0:17:45.200 be a lot of conversations in Davos about risk that's 0:17:45.240 --> 0:17:45.640 out there. 0:17:45.640 --> 0:17:49.159 We've got two big wars. You talk to geopolitical. 0:17:48.480 --> 0:17:53.119 Strategies and they say, actually, there's about one hundred levels 0:17:53.119 --> 0:17:55.920 of kind of some kind of outbursts or activity, smaller 0:17:55.960 --> 0:17:59.879 ones attacks around the world. Some say we're already a 0:18:00.080 --> 0:18:02.480 world at war. So when you look at the healthcare 0:18:02.560 --> 0:18:05.640 issues that, yes, are so important to ministers, how are 0:18:05.640 --> 0:18:08.920 they going to think about prioritizing that the money, the need, 0:18:09.000 --> 0:18:12.640 the efforts when you've got some really serious situations going 0:18:12.640 --> 0:18:13.240 on right now. 0:18:13.280 --> 0:18:15.000 I mean it's going to be it's going to be 0:18:15.080 --> 0:18:18.000 a challenge, no doubt, for even in the US. I 0:18:18.000 --> 0:18:21.120 think in terms of, you know, our budgetary priorities right right. 0:18:21.040 --> 0:18:23.359 And even after coming off of a global pandemic that 0:18:23.400 --> 0:18:25.520 shut the world down. It's interesting how things can be 0:18:25.560 --> 0:18:26.360 put to the side. 0:18:26.440 --> 0:18:28.479 But you know, if you think about it, you know, 0:18:28.600 --> 0:18:30.919 just in terms of even climate change and its impact 0:18:31.000 --> 0:18:34.160 on health. I mean, that's going to continue to get 0:18:34.359 --> 0:18:36.919 worse and worse. I mean I saw a statistic just 0:18:36.960 --> 0:18:39.200 the other day that I think between the years twenty 0:18:39.280 --> 0:18:42.480 thirty and twenty fifty, two hundred and fifty thousand more 0:18:42.600 --> 0:18:46.040 people each year will die around the globe because of 0:18:46.320 --> 0:18:50.120 climate changes impact on health and healthcare. So we can't 0:18:50.119 --> 0:18:54.320 ignore those problems as we have these these geopolitical crises 0:18:54.359 --> 0:18:54.760 out there. 0:18:54.880 --> 0:18:57.000 But it does make it harder right to make countries 0:18:57.000 --> 0:18:59.160 and ministers to kind of get their initiatives. 0:18:58.720 --> 0:19:01.200 Absolutely, and that's why you know, our voice as as 0:19:01.200 --> 0:19:04.160 a healthcare provider has to get even louder and say, okay, 0:19:04.240 --> 0:19:06.840 you know what, we understand your challenged and you have 0:19:06.960 --> 0:19:09.600 you know, these immediate issues, and there's a war in 0:19:09.600 --> 0:19:11.439 the Middle East, and we have Ukraine, and we have 0:19:11.520 --> 0:19:14.199 all these other situations out there, but we have to 0:19:14.320 --> 0:19:17.199 we can't ignore everything else. I mean one of the 0:19:17.400 --> 0:19:17.880 one of the. 0:19:18.640 --> 0:19:20.280 Just about thirty seconds and then we'll come back and 0:19:20.320 --> 0:19:20.720 talk more. 0:19:20.880 --> 0:19:23.520 Yeah, just just quickly carel One of the lessons from 0:19:23.600 --> 0:19:26.080 COVID was that too much was probably put on that 0:19:26.200 --> 0:19:30.040 back burner, Like as an example, in healthcare, people people 0:19:30.080 --> 0:19:33.080 didn't come in for their their screenings, and you know, 0:19:33.080 --> 0:19:35.920 we're seeing higher rates of cancer, higher rates of cardiac disease, 0:19:36.000 --> 0:19:38.760 higher rates of diabetes because of that. So I think, 0:19:38.800 --> 0:19:42.040 what's what's what the lesson learned for me is, Hey, 0:19:42.359 --> 0:19:44.480 you know what, We're always going to have some crisis, 0:19:44.520 --> 0:19:47.760 but we need to be multifaceted and we need to 0:19:48.000 --> 0:19:50.760 pay attention to multitude of issues. 0:19:50.840 --> 0:19:54.360 One thing I want to ask you about money in hospitals. 0:19:54.840 --> 0:19:57.680 We've done a lot of reporting about it. Private equity 0:19:57.960 --> 0:20:00.919 owning about thirty percent of for profit high hospitals. A 0:20:00.960 --> 0:20:04.240 lot of them are in rural areas of the United States. 0:20:04.560 --> 0:20:06.920 You guys are a nonprofit, right correct? 0:20:07.200 --> 0:20:11.000 What's the difference and what advantages do help me understand 0:20:11.720 --> 0:20:13.400 being a nonprofit hospital. 0:20:13.000 --> 0:20:17.199 Nonprofit hospital, you are tax exempt and your you have 0:20:17.240 --> 0:20:21.800 a mission to serve your communities. You have to have 0:20:21.840 --> 0:20:25.760 a board that's representative of those communities, so you don't 0:20:25.760 --> 0:20:30.240 have you don't have stockholders or shareholders that you have 0:20:30.359 --> 0:20:33.960 to to report to. In any margin or any profit 0:20:34.080 --> 0:20:37.720 that we make as a non for profit gets really 0:20:37.840 --> 0:20:41.560 reinvested in the in the health system, whether that's through 0:20:41.640 --> 0:20:45.959 capital investments to improve infrastructure, or new programs or services, 0:20:46.480 --> 0:20:49.280 or our people, our thirty six thousand team members. 0:20:49.359 --> 0:20:50.760 So what do you make of all the money that 0:20:50.880 --> 0:20:54.880 is going into the for profit hospital system? Because you've 0:20:54.880 --> 0:20:56.840 seen some of the horror stories we've reported on it 0:20:56.840 --> 0:20:58.280 here at Bloomberg, good or bad? 0:20:58.800 --> 0:21:01.280 You know, I think it's it's a mixed bag. It's 0:21:01.359 --> 0:21:03.080 how I would put it. Let me let me explain 0:21:03.160 --> 0:21:06.840 that I think it's in on the good side. Coming 0:21:06.840 --> 0:21:10.160 out of COVID, so many hospitals and even in health 0:21:10.200 --> 0:21:14.360 systems were stressed, particularly in rural areas, and they would 0:21:14.359 --> 0:21:17.800 have closed if it wasn't for maybe some some for 0:21:17.960 --> 0:21:22.119 profits or private equity coming in and and helping to 0:21:22.440 --> 0:21:23.080 bail it out. 0:21:23.920 --> 0:21:24.119 You know. 0:21:24.200 --> 0:21:27.320 The problem, of course is you know, where where, what's 0:21:27.440 --> 0:21:30.719 what's the mission, what's the where's the where's the priority? 0:21:31.720 --> 0:21:35.680 I do think that private equity is is probably here 0:21:35.720 --> 0:21:38.840 to stay in health care for for some period of time. 0:21:39.320 --> 0:21:42.480 So I look at it as if it's if it's 0:21:42.520 --> 0:21:45.560 coming to my market, coming to New Jersey, private equity 0:21:45.840 --> 0:21:49.040 companies which they have, they're gonna they're gonna be there 0:21:49.040 --> 0:21:54.560 with or without Hackensack Meridian Health partnership. So I actually 0:21:54.640 --> 0:21:56.959 am looking for ways that maybe we can partner and 0:21:57.000 --> 0:22:00.600 maybe yes, so maybe there are some joint venture oportunities 0:22:00.680 --> 0:22:05.760 where our mission still will stay true, but we'll be 0:22:05.760 --> 0:22:09.639 able to provide some services and programs and have a 0:22:09.680 --> 0:22:12.240 partner that can help us provide them. So one example 0:22:12.280 --> 0:22:14.840 of that is we recently announced a partnership with a 0:22:14.880 --> 0:22:17.400 company called One Medical, which is you guys are probably 0:22:17.400 --> 0:22:20.320 familiar with them. They're part of the Amazon On network. 0:22:20.440 --> 0:22:22.840 They were coming to New Jersey again with or without 0:22:22.840 --> 0:22:27.440 Hackensack Meridian Health. They are a group of primary care providers. 0:22:27.480 --> 0:22:29.760 We do have a shortage of primary care physicians in 0:22:29.800 --> 0:22:33.280 New Jersey, so we thought it's best to partner with 0:22:33.320 --> 0:22:36.160 them to make the One Medical Group part of our 0:22:36.240 --> 0:22:39.119 medical group at Hackensack Meridian Health. And we're able to 0:22:39.160 --> 0:22:41.680 expand primary care coverage and we're going to be opening 0:22:41.760 --> 0:22:44.960 up new primary care centers throughout New Jersey with One Medical. 0:22:45.800 --> 0:22:48.240 So that's an example where I think it can be 0:22:48.320 --> 0:22:49.320 it can be positive. 0:22:49.520 --> 0:22:53.480 Do you worry though, that the interests of a private 0:22:53.520 --> 0:22:58.760 equity firm aren't necessarily aligned with high quality patient outcomes? 0:22:59.359 --> 0:23:02.120 I do do tim, and that's why I think that 0:23:02.320 --> 0:23:05.439 you know, where wherever possible, if there's ways that we 0:23:05.560 --> 0:23:09.359 can partner and keep the not for profit mission in healthcare, 0:23:09.800 --> 0:23:12.960 I think that's that's that's positive. Now, of course, you 0:23:13.000 --> 0:23:14.680 know there's going to be give and take if you 0:23:14.840 --> 0:23:18.159 if you do have a true joint venture. But we 0:23:18.200 --> 0:23:20.960 would only find I mean, from our perspective, we would 0:23:20.960 --> 0:23:23.959 only want to partner with UH with a company that 0:23:24.400 --> 0:23:28.480 shares our values and our mission. But yes, I'm basically 0:23:28.560 --> 0:23:32.520 you know, unchecked. I think that private equity may not 0:23:33.000 --> 0:23:37.040 necessarily have the same interest as a not for profit 0:23:37.080 --> 0:23:37.920 health system. 0:23:37.680 --> 0:23:40.600 When you look at the data, which ownership structure has 0:23:40.640 --> 0:23:41.800 the best patient outcomes? 0:23:42.600 --> 0:23:46.040 I still think the not for profit hospitals and the 0:23:46.119 --> 0:23:49.240 not for profit health systems have the best patient outcomes 0:23:49.280 --> 0:23:52.840 that I that I've seen, and that that's patient quality 0:23:53.040 --> 0:23:58.960 and patient safety data. Now, maybe from an efficiency perspective, 0:23:59.040 --> 0:24:01.639 some private equity and some for profits do have a 0:24:01.840 --> 0:24:04.760 you know, a decent track record, so they're let the 0:24:04.800 --> 0:24:08.280 stay might be lower, their readmission rate might be a lower, 0:24:08.320 --> 0:24:10.960 and those are those are important factors. But you know 0:24:11.040 --> 0:24:13.760 what I consider most important are you know, quality and 0:24:13.800 --> 0:24:15.679 patient safety outcomes. 0:24:15.800 --> 0:24:19.040 You know when you you talked about in New Jersey 0:24:19.200 --> 0:24:22.119 that there's not enough primary care doctors, and I do 0:24:22.200 --> 0:24:24.080 wonder I'm going to be a little crazy, But are 0:24:24.080 --> 0:24:26.879 we getting to a point where it feels like we 0:24:27.000 --> 0:24:30.120 keep talking tim right with guests about shortage of healthcare 0:24:30.119 --> 0:24:34.639 workers nurses. We've been talking about that for years, like 0:24:34.640 --> 0:24:37.480 a little bit of a hunger game scenario where where 0:24:37.480 --> 0:24:39.960 it's going to be really rough to find the care 0:24:40.160 --> 0:24:41.760 and the right people that you need to do. 0:24:41.800 --> 0:24:43.160 I feel very dust in New York. 0:24:43.200 --> 0:24:46.720 But still the doctors who I know are are so 0:24:46.800 --> 0:24:50.600 burned out. Yes, and they're not. They're early in their careers. Yeah, 0:24:50.640 --> 0:24:53.800 the work that they do is so important, but they're not. 0:24:53.840 --> 0:24:57.200 It's not like you know these other jobs where people, oh, 0:24:57.240 --> 0:24:58.720 now they only have to go into the office three 0:24:58.800 --> 0:25:00.800 days a week. Now your doc, you have to be 0:25:00.920 --> 0:25:03.920 on site, you're on call on weekends. Like, yes, their 0:25:04.000 --> 0:25:06.680 compensation is good, but it is tough work. 0:25:06.760 --> 0:25:09.960 The burnout actually got much worse as a result of COVID. 0:25:10.240 --> 0:25:15.000 So we when we've done our surveying, we see that, 0:25:15.160 --> 0:25:18.440 you know, with doctors and nurses, but the statistic nationally 0:25:19.040 --> 0:25:21.879 is one out of five nurses, as an example, have 0:25:22.040 --> 0:25:25.200 left the profession since COVID And what's even more scary 0:25:25.240 --> 0:25:29.280 than that is one out of three in recent surveys 0:25:29.640 --> 0:25:32.840 are saying they're seriously thinking about leaving the profession. So 0:25:32.880 --> 0:25:35.359 we already, as as Carol said, we already started with 0:25:35.600 --> 0:25:39.400 a nursing shortage. The one thing that's common to doctors 0:25:39.400 --> 0:25:43.399 and nurses in terms of burnout is they are burnt 0:25:43.400 --> 0:25:46.960 out and frustrated with all the administrative tasks that they 0:25:46.960 --> 0:25:49.400 have to do that take them away from direct patient care. 0:25:49.640 --> 0:25:51.840 So that's where technology will come in. 0:25:52.160 --> 0:25:53.760 When does it come because we've been talking about why 0:25:53.800 --> 0:25:56.520 can't I just walk in with a card and here's 0:25:56.560 --> 0:25:59.080 all my information, here's all my latest tests, and just 0:25:59.240 --> 0:26:01.480 use that. You know, hop it, you got it, and 0:26:01.520 --> 0:26:05.399 it gets updated. It Absolutely maybe that's what we should create. 0:26:05.560 --> 0:26:06.880 It absolutely should be that way. 0:26:06.880 --> 0:26:07.760 But I'll tell you one. 0:26:07.600 --> 0:26:10.359 Technology then just about forty seconds, okay, one technology that 0:26:10.560 --> 0:26:14.520 is coming into fruition now that we're doing a hacken 0:26:14.560 --> 0:26:16.440 second Rarny we're piloting it's going to be rolled out 0:26:16.440 --> 0:26:21.680 and that's virtual nursing. So through remote connections, virtual nurse 0:26:21.720 --> 0:26:25.000 can help the bedside nurse and they can do a 0:26:25.000 --> 0:26:27.480 lot of the administrative tasks, the things the charting, the 0:26:27.680 --> 0:26:32.760 admission and discharge charting that needs to be done, which 0:26:32.800 --> 0:26:35.400 frees up the bedside nurse to spend more time with the. 0:26:35.320 --> 0:26:36.679 Patients actually care for the patient. 0:26:36.760 --> 0:26:39.440 Actually, and we're doing that with physicians too, where they're 0:26:39.480 --> 0:26:42.879 able to spend more time with patients. That's that to me, 0:26:42.960 --> 0:26:44.240 should be the major focus. 0:26:44.359 --> 0:26:46.399 Well, a million more questions we have, Tim and I 0:26:46.440 --> 0:26:48.200 really get into the healthcare space, lots of things. 0:26:48.480 --> 0:26:50.160 So hopefully you will come back soon. 0:26:50.760 --> 0:26:51.600 I sure will. 0:26:51.640 --> 0:26:52.680 We would love to have. 0:26:52.640 --> 0:26:55.399 A safe trip to Davos. Thanks very much well Robert Garrett, 0:26:55.400 --> 0:26:57.760 and good luck with everything. Robert Garrett, Chief executive Officer 0:26:57.760 --> 0:27:00.480 of Hackensack. We're Ridian Health, as we said, of World 0:27:00.480 --> 0:27:02.880 Economic Forum, Health and Healthcare Governor's community. 0:27:03.160 --> 0:27:12.639 This bloom you're listening to the Bloomberg Business Week podcast. 0:27:12.880 --> 0:27:15.960 Catch us live weekday afternoons from three to six Easter 0:27:16.240 --> 0:27:20.000 on Bloomberg Radio, the Bloomberg Business App, and YouTube. You 0:27:20.040 --> 0:27:23.320 can also listen live on Amazon Alexa from our flagship 0:27:23.359 --> 0:27:27.280 New York station. Just say Alexa play Bloomberg eleven thirty. 0:27:30.440 --> 0:27:35.760 I'm putting all my eggs in one basket. 0:27:37.040 --> 0:27:40.800 You know, when we think about baskets of stocks, we. 0:27:40.840 --> 0:27:42.040 Used to think about mutual. 0:27:41.800 --> 0:27:44.000 Folks, we did, but alas no more. 0:27:44.480 --> 0:27:47.960 Now we think about ETFs. And as I mentioned earlier, Carol, 0:27:48.240 --> 0:27:50.760 this year's already a huge year for ETFs thanks to 0:27:50.840 --> 0:27:54.520 last week's SEC approval of eleven This spot, well, we 0:27:54.560 --> 0:27:56.640 get approval jefs, we did. 0:27:56.480 --> 0:27:57.400 Lash text sarcasts. 0:27:58.080 --> 0:28:00.600 We got approval you know, via tweet that ended up 0:28:00.640 --> 0:28:03.119 not being correct. I don't know if can't remember that. 0:28:03.160 --> 0:28:05.080 What a week it was, and then the next day 0:28:05.200 --> 0:28:07.879 the actual approval came. But there's so much more to 0:28:07.960 --> 0:28:10.800 ETFs than the shiny new bitcoin ETFs. 0:28:10.880 --> 0:28:14.280 Yes, indeed, Unfortunately, the team that covers ETFs at Bloomberg Intelligence, 0:28:14.359 --> 0:28:18.199 led by senior analyst Eric balchunis who hopefully got some 0:28:18.280 --> 0:28:21.600 sleep over the weekend, while that team, led by Eric 0:28:21.680 --> 0:28:24.760 whittled their global list of two dozen picks down to 0:28:25.280 --> 0:28:25.960 just a handful. 0:28:26.119 --> 0:28:28.600 The story featured in the year Ahead issue of BusinessWeek magazine, 0:28:28.600 --> 0:28:31.240 which is available now on newsstands, on the Bloomberg Terminal 0:28:31.240 --> 0:28:34.159 and at Bloomberg dot com slash BusinessWeek. This story, by 0:28:34.160 --> 0:28:38.640 the way, written none other than Bloomberg BusinessWeek editor Joel Weber. 0:28:38.920 --> 0:28:41.880 Joel's here in the Bloomberg Interactive Brokers studio with us. 0:28:42.160 --> 0:28:44.920 Also with us is Eric Balchunis, senior ETF analyst for 0:28:44.920 --> 0:28:47.840 Bloomberg Intelligence. He joins us on zoom in Philadelphia. 0:28:47.960 --> 0:28:50.400 Joel, if you know how to write a story? 0:28:50.560 --> 0:28:53.640 Yeah, it's amazing. Come on, you have time. Jeez, you 0:28:53.680 --> 0:28:55.320 have time for a story? Oh, come on. 0:28:55.480 --> 0:28:57.680 So Eric and I co host this podcast and we've 0:28:57.680 --> 0:29:00.000 been doing it for years called Trillia. 0:29:00.240 --> 0:29:01.400 You lovet we. 0:29:01.600 --> 0:29:04.080 You know, it's just this thing. It's an er I 0:29:04.080 --> 0:29:06.800 think it's Eric's theory of everything. Like if if you 0:29:06.800 --> 0:29:09.080 could kind of like put it, put the universe into 0:29:09.160 --> 0:29:13.160 one thing, the ETF would explain Eric and investment investing 0:29:13.160 --> 0:29:16.400 in all kinds of other stuff. That's what working on 0:29:16.440 --> 0:29:18.640 trillions with him for me has felt like. And so 0:29:18.840 --> 0:29:21.400 it becomes a really interesting way to kind of like think, 0:29:21.440 --> 0:29:26.080 look at finance and investing and there are there's just 0:29:26.160 --> 0:29:28.760 more and more interest in it. We named it Trillions 0:29:28.800 --> 0:29:31.720 because every year there's more trillions that go. 0:29:31.680 --> 0:29:32.440 Into these things. 0:29:32.480 --> 0:29:36.360 You can still talk about mutual funds. We actually make 0:29:36.440 --> 0:29:40.600 time occasionally on Trillions to do so, uh, and we 0:29:40.680 --> 0:29:43.320 also do this episode every year that we have not 0:29:43.520 --> 0:29:46.600 had a chance to talk about yet. And if you're 0:29:46.920 --> 0:29:48.800 if you'd like to listen to the whole thing, you 0:29:48.880 --> 0:29:52.480 can do so wherever you listen to podcasts. But for 0:29:52.680 --> 0:29:55.760 the year Ahead issue, I took that conversation and kind 0:29:55.760 --> 0:29:58.880 of whittled it down to just a handful. And while 0:29:58.880 --> 0:30:01.719 we were first talking about, you know, we didn't have 0:30:01.800 --> 0:30:05.600 an approved ETF for bitcoin, for spot bitcoin, and then 0:30:05.720 --> 0:30:07.480 last week happened and it was just like we got 0:30:07.520 --> 0:30:09.239 to talk about this with Eric a little bit as 0:30:09.280 --> 0:30:11.880 well as some of these other ones. So Eric, you 0:30:12.440 --> 0:30:15.000 I quote you in the story because you say, by 0:30:15.520 --> 0:30:17.880 what march. By the end of March, we're going to 0:30:17.960 --> 0:30:21.520 know who the winner of the race is sec led 0:30:21.560 --> 0:30:23.880 a lot of ETFs out at first, who's the early 0:30:24.640 --> 0:30:26.040 who's got the early lead? 0:30:26.200 --> 0:30:29.080 Okay, So I've separated the ten launches into what I 0:30:29.120 --> 0:30:34.880 call the Newborn nine and GBTC because it's different being 0:30:34.920 --> 0:30:37.320 a newborn in the ETF world, Joel. As you know, 0:30:37.440 --> 0:30:40.520 we called the terodome. It's a tough industry, so being 0:30:40.560 --> 0:30:43.680 a newborn is a different playing field. GBTC was a 0:30:43.720 --> 0:30:47.200 trust that existed, had thirty billion dollars in assets and 0:30:47.240 --> 0:30:49.400 a bunch of volume, and it converted into an ETF. 0:30:49.440 --> 0:30:52.880 So it came over with like ammunition, right, and all 0:30:52.960 --> 0:30:56.240 kinds of supplies into the tarotome. So if you if 0:30:56.240 --> 0:30:58.280 you look at all of them, GBTC still has the 0:30:58.280 --> 0:31:02.280 most assets and volume, but of the newborn nine, Blackrock, 0:31:02.480 --> 0:31:05.000 no shocker, is in the lead. Fidelity a close second 0:31:05.440 --> 0:31:08.160 arc bit wise, you know, jockeying for the third position. 0:31:08.680 --> 0:31:10.640 But a lot of them are doing well, Like if 0:31:10.680 --> 0:31:12.240 you look at the volume of even like the least 0:31:12.280 --> 0:31:14.920 traded one, which I believe is the Wisdom Tree, it 0:31:15.200 --> 0:31:18.040 did six ten million dollars in the first two days. 0:31:18.440 --> 0:31:20.800 That would be a big hit, a big day for 0:31:20.920 --> 0:31:24.360 any regular new ETF. So a lot of them has 0:31:24.440 --> 0:31:26.880 traded over ten billion dollars in the first three days. 0:31:27.240 --> 0:31:31.800 Unbelievable action in these ETFs. But Blackrock looking like the 0:31:31.880 --> 0:31:35.920 early favorite to be sort of the GLD of bitcoin, 0:31:35.960 --> 0:31:40.040 but it's got to overtake GBTC, which again came in 0:31:40.080 --> 0:31:42.400 with all this assets and volume and still has more. 0:31:42.520 --> 0:31:45.920 There's a story though on the Bloomberg that talks about 0:31:45.920 --> 0:31:49.920 investors pulling over half a billion dollars from the gray 0:31:49.920 --> 0:31:53.480 scale Bitcoin trust in the first days of trading as 0:31:53.480 --> 0:31:54.080 an ATF. 0:31:54.160 --> 0:31:55.880 Is that significant or how do you read that? 0:31:56.080 --> 0:31:56.280 Eric? 0:31:57.040 --> 0:32:00.480 Yeah, so this is a big situation. So the Newborn nine, 0:32:00.560 --> 0:32:03.640 all the volume is inflows pretty much because there's nobody 0:32:03.680 --> 0:32:06.400 with shares to sell because they didn't exist, right. So 0:32:06.880 --> 0:32:09.600 the GBTC, however, are people who probably want to get out. 0:32:09.680 --> 0:32:11.040 Now that's said, you have to take a tax sit 0:32:11.040 --> 0:32:12.560 if you want to get out. So I don't think 0:32:12.640 --> 0:32:15.000 all twenty six billion as it stands now we're going 0:32:15.040 --> 0:32:16.760 to get out. But there could be some people who 0:32:16.760 --> 0:32:20.040 want to get out take the tax hit. Now it's 0:32:20.040 --> 0:32:21.600 a long story short, but they can't go right into 0:32:21.600 --> 0:32:22.880 the new ETF. So that's why I think a lot 0:32:22.920 --> 0:32:26.080 of the new funds into the newborns are new money, 0:32:26.480 --> 0:32:30.040 some maybe GBTC refugees. But over time, I do believe 0:32:30.080 --> 0:32:32.959 GBTC will be like a slowly melting ice cube and 0:32:33.000 --> 0:32:35.520 the Newborn nine will build up and at some point 0:32:35.520 --> 0:32:38.440 they'll probably be it. They'll both settle a little bit. 0:32:38.840 --> 0:32:40.840 But there is an interesting dynamic of play that you 0:32:40.880 --> 0:32:43.400 don't normally see. And so if I had to guess, 0:32:43.440 --> 0:32:46.480 I'd say gbtcc's you know, four or five billion of 0:32:46.480 --> 0:32:48.960 outflows in the first couple months and then kind of 0:32:48.960 --> 0:32:49.520 settles down. 0:32:49.680 --> 0:32:52.280 Isn't it bigger than an ice cube? Though, it's like 0:32:52.320 --> 0:32:53.280 more like a glacier. 0:32:54.200 --> 0:32:56.520 It's a glacier. Yeah, twenty six billion. I mean I 0:32:56.560 --> 0:32:59.360 believe that makes GBTC like the top three biggest holder 0:32:59.400 --> 0:33:03.600 of bitcoin on Earth. So yeah, it is total glacier. 0:33:05.040 --> 0:33:06.520 Glacier changed. 0:33:06.640 --> 0:33:14.600 Yeah, yeah, hey, uh sorry taking over the show, guys, 0:33:17.080 --> 0:33:20.600 this is a trillion podcast. Eric, I got a question. 0:33:20.640 --> 0:33:23.440 I'm curious if you look at the eleven different uh 0:33:24.000 --> 0:33:27.960 spot bay ETFs, should they all have the exact same 0:33:28.040 --> 0:33:31.479 performance every single day because they're tracking the exact same thing, 0:33:31.600 --> 0:33:34.560 like v O O and S P Y for example, 0:33:34.640 --> 0:33:36.800 that track the S and P five hundred. Shouldn't they 0:33:36.800 --> 0:33:37.720 have the same performance? 0:33:38.600 --> 0:33:40.760 Yeah, it should be very close. The only thing you 0:33:40.840 --> 0:33:42.960 might find difference this is what the premium discount the 0:33:43.000 --> 0:33:45.360 price to the Navy. There's been like, I don't know, 0:33:45.400 --> 0:33:48.640 a thirty basis point swing between them, but again these 0:33:48.680 --> 0:33:51.800 are minor points. We were a little worried that the 0:33:52.240 --> 0:33:54.320 price in the NAB would be a little further apart, 0:33:54.760 --> 0:33:58.320 which is a sign that arbitrage and the mechanics of 0:33:58.440 --> 0:34:00.680 the ETF were more difficult because you can only do 0:34:00.760 --> 0:34:04.800 cash creations. Long story short, everything looks pretty good. So 0:34:05.200 --> 0:34:08.200 the dollars you buy it at, like I think, ib 0:34:08.440 --> 0:34:11.080 ibit start at twenty five dollars. Another one might be 0:34:11.120 --> 0:34:14.200 trading at fifty, but the percentage day on each that 0:34:14.320 --> 0:34:17.480 it changes each day should be pretty much lining up 0:34:18.000 --> 0:34:20.120 minus ten twenty BIPs basis points. 0:34:21.360 --> 0:34:22.879 You know, the other thing that I wanted to ask 0:34:22.920 --> 0:34:25.560 you about is trading volumes, because I thought that was 0:34:25.600 --> 0:34:29.640 a really interesting insight. Here you said, don't don't look 0:34:29.680 --> 0:34:32.800 at you know, assets under your management, and obviously GBTC 0:34:32.960 --> 0:34:36.120 is representated of that. But why are trading volumes the 0:34:36.200 --> 0:34:40.080 thing that you all are watching as you evaluate these 0:34:40.160 --> 0:34:41.439 new newborn nine. 0:34:42.680 --> 0:34:46.680 Yeah, because you need two things for a new category 0:34:47.040 --> 0:34:49.400 to have long term growth. You need volume and you 0:34:49.480 --> 0:34:52.600 need low fees. These have both because we already saw 0:34:52.600 --> 0:34:54.279 the few war breakout. You can get them all between 0:34:54.320 --> 0:34:57.320 twenty and thirty basis points even before they were approved, 0:34:57.600 --> 0:35:00.879 even before if few war happened before the race even 0:35:00.960 --> 0:35:06.799 started again, wild stuff. The volume is crucial because when 0:35:06.840 --> 0:35:09.480 you're an investor, an ETF investor, ready, advisor and institution. 0:35:10.719 --> 0:35:14.480 Volume is like a party with people there. No volume 0:35:14.640 --> 0:35:16.040 is like someone who invites you to a party, but 0:35:16.080 --> 0:35:19.680 there's nobody going. And it's just the general way does 0:35:19.840 --> 0:35:22.200 You don't need volume to buy an ETF, but people 0:35:22.360 --> 0:35:25.440 just like to see liquidity. And so when liquidity forms 0:35:25.440 --> 0:35:27.520 around these ETFs, and it's hard because it has to 0:35:27.560 --> 0:35:30.960 grow naturally. Assets you can just shove in there, but 0:35:31.200 --> 0:35:34.279 volume only grows in nature, and so it's harder and 0:35:34.360 --> 0:35:36.640 more covetive. But once you get liquidity, you get more 0:35:36.719 --> 0:35:40.520 liquidity because liquidity attracts the bigger fish because they like 0:35:40.560 --> 0:35:42.600 to go in and not have impact costs. So as 0:35:42.640 --> 0:35:44.680 you get more and more liquid you get bigger and 0:35:44.719 --> 0:35:47.279 bigger fish and more and more liquidity. And I think 0:35:47.360 --> 0:35:49.800 the volume the start that they're off to is really 0:35:49.920 --> 0:35:52.680 really good. It shows that you will find a comfort 0:35:52.760 --> 0:35:55.400 level to any investor pretty quickly. Again, I got the 0:35:55.440 --> 0:35:57.200 low fees, I got the liquidity, and I'm off and 0:35:57.239 --> 0:35:59.279 get this stat I just ran the numbers of the 0:35:59.280 --> 0:36:03.400 five hundred each launched last year. These bitcoin ETFs are 0:36:03.440 --> 0:36:07.120 are already averaging three times. Would all five hundred of 0:36:07.160 --> 0:36:11.080 those traded today. So again the numbers are just outrageously 0:36:11.200 --> 0:36:12.520 high for these products. 0:36:12.960 --> 0:36:15.160 Okay, so do you want to keep talking about bitcoin 0:36:15.200 --> 0:36:16.440 ETFs or do you want to talk about it? 0:36:17.080 --> 0:36:17.600 Let's move on. 0:36:18.400 --> 0:36:23.920 Theyfe words, there's amazingly there are other things. 0:36:24.640 --> 0:36:27.120 Interventions are coming from me. I know it. My friends, 0:36:27.160 --> 0:36:28.680 I can hear them talking about my back. 0:36:28.920 --> 0:36:32.800 Okay, I want to talk about the small caps ETF 0:36:33.480 --> 0:36:38.000 CALF and why that's been an interesting one that stuck 0:36:38.040 --> 0:36:38.320 out to you. 0:36:38.840 --> 0:36:42.400 Yeah, because small caps were left behind last year and 0:36:42.719 --> 0:36:45.440 honestly a lot of the last decade. And here's this 0:36:45.600 --> 0:36:48.560 small cap ETF CALF that did better than the S 0:36:48.640 --> 0:36:49.319 and P last year. 0:36:50.000 --> 0:36:51.160 So that just blew my mind. 0:36:51.200 --> 0:36:53.400 How can a group of small caps actually beat the 0:36:53.640 --> 0:36:56.360 large caps? And the way they did it was they 0:36:56.440 --> 0:36:59.440 looked it's a ETF that looks at cash flow, and 0:36:59.520 --> 0:37:02.000 why looking at cash flow you get to more quality 0:37:02.080 --> 0:37:04.320 small caps, you get to the quality factor. And the 0:37:04.400 --> 0:37:07.840 quality factor was the best of all the quantitative factors 0:37:07.920 --> 0:37:10.279 last year, so it was enough to lift it above 0:37:10.360 --> 0:37:12.520 large So I thought it was interesting. Also, the CTF 0:37:12.600 --> 0:37:15.480 has seen flows for the past forty four months. It 0:37:15.600 --> 0:37:18.760 is decimated. The Russell two thousand which is its index. 0:37:18.800 --> 0:37:20.080 Like I said, it beat the large caps, so you 0:37:20.160 --> 0:37:22.759 know it's decimating the small caps in general. And I 0:37:22.800 --> 0:37:25.279 think when people think of small caps this year, the 0:37:25.320 --> 0:37:27.480 big word on the street is it's time for them 0:37:27.520 --> 0:37:30.160 to play catch up. Well, here's some that already are 0:37:30.239 --> 0:37:32.239 off to a good start, so we wanted to look 0:37:32.280 --> 0:37:33.560 at it. We also want to know if it could 0:37:33.680 --> 0:37:36.520 keep these flows going, because these kind of flows for 0:37:36.560 --> 0:37:38.839 an ETF, it's like Indy like not a Big three, 0:37:39.480 --> 0:37:42.360 are really unusual, and so it was also an indie 0:37:42.400 --> 0:37:43.960 feel good hit of last year, So that's why I 0:37:44.040 --> 0:37:44.320 chose it. 0:37:44.600 --> 0:37:47.319 Okay for my transition to the next ETF, I want 0:37:47.320 --> 0:37:49.080 to bring up a news story that was just published 0:37:49.120 --> 0:37:53.120 in the last fifteen minutes or so. Blackstone's defaulted NYC 0:37:53.239 --> 0:37:56.480 office loan is for sale at a fifty percent discount. 0:37:56.560 --> 0:37:59.080 Right now, we're certainly seeing some stress when it comes 0:37:59.160 --> 0:38:04.040 to Ker real Estate. As the return to work, despite 0:38:04.120 --> 0:38:06.600 Joel's all of Joel's best efforts to get everybody in the. 0:38:06.640 --> 0:38:08.680 Office, I'm going propaganda campaign. 0:38:09.080 --> 0:38:09.759 It's working for me. 0:38:09.880 --> 0:38:10.920 Matt Uh. 0:38:11.320 --> 0:38:13.520 There's a way to bet. There's a way to bet 0:38:13.600 --> 0:38:16.800 on returning to work. Eric how do you do that 0:38:16.960 --> 0:38:19.680 with a desk? Is the ticker that makes sense? 0:38:20.200 --> 0:38:23.640 Yeah, this was a classic thematic ETF. My colleague Athanasias 0:38:23.680 --> 0:38:26.040 chowse it. So this is the Van Neck office in 0:38:26.120 --> 0:38:29.840 commercial reate ETFU. And basically this is a play on 0:38:30.160 --> 0:38:34.200 return to office. Commercial real estate has really lagged the 0:38:35.120 --> 0:38:37.440 real estate stocks in general or the index for real 0:38:37.560 --> 0:38:40.920 estate stocks. So here you have a laggard and you 0:38:41.040 --> 0:38:43.360 have a trend of like all these companies wanted to 0:38:43.520 --> 0:38:46.239 feel back in the office, and so you know that 0:38:46.880 --> 0:38:48.959 we're interested to see if this thing sort of plays 0:38:49.040 --> 0:38:51.800 catch up, because even if the real estate index is flat, 0:38:51.840 --> 0:38:54.640 if this plays ketch up, you get a bump. Plus, 0:38:54.760 --> 0:38:56.520 it was a novel way to slice and dice the 0:38:56.560 --> 0:39:00.680 real estate market. So it's got Boston prop parties. Uh, 0:39:01.000 --> 0:39:03.719 Vernado are the top two holdings, and a lot of 0:39:03.719 --> 0:39:06.120 people use Vernado as sort of the proxy already for 0:39:06.239 --> 0:39:08.480 the return to office. So that's the top holding, so 0:39:08.600 --> 0:39:10.239 you get a lot of that stock. 0:39:10.000 --> 0:39:10.440 In there as well. 0:39:10.520 --> 0:39:12.600 I think it's just interesting, Like I can't speak to 0:39:12.680 --> 0:39:16.800 the Blackstone story necessarily, but there has been this perception that, 0:39:17.000 --> 0:39:20.680 you know, commercial real estate is down and out and 0:39:21.680 --> 0:39:24.680 no amount of rto can help it, but like slowly 0:39:24.760 --> 0:39:28.439 but surely, like there's at some point it becomes like, wow, 0:39:28.560 --> 0:39:32.800 maybe this is a contrarian investment opportunity. And what's amazing 0:39:32.840 --> 0:39:35.760 about that ETF which is brand new. It's like ETF 0:39:35.800 --> 0:39:37.920 can take a whole trade and just like package it 0:39:38.040 --> 0:39:40.799 into a ticker that you can trade. 0:39:40.560 --> 0:39:42.200 Like a like a stock if we get a lower 0:39:42.239 --> 0:39:44.440 rate environment. So it's incredible, right, and make it much 0:39:44.480 --> 0:39:46.080 easier for this these firms. 0:39:46.160 --> 0:39:50.800 Yeah, yeah, Okay, here's another interesting one, especially off of 0:39:50.920 --> 0:39:53.680 last year where you had this Magnificent seven and the 0:39:53.800 --> 0:39:56.080 tech companies just ran away with it. Eric, what is 0:39:56.120 --> 0:40:00.520 Afanasios Uh put forward as a as another way to 0:40:00.600 --> 0:40:02.759 think about tech perhaps in twenty twenty four. 0:40:03.160 --> 0:40:06.880 Yeah, So this is the Investco SMP five hundred equal 0:40:06.920 --> 0:40:10.920 weight Tech RSPT. So equal weighting is a way to 0:40:11.040 --> 0:40:15.800 sort of like take out any kind of imbalance in 0:40:15.920 --> 0:40:18.200 your index, and so people like it. Whether it's the 0:40:18.280 --> 0:40:20.880 SMP equal weighted, this is Tech equal weighted. So you 0:40:21.000 --> 0:40:23.480 get all of the big Magnificent seven, most of them, 0:40:24.040 --> 0:40:26.560 but you get them at one percent or two percent 0:40:26.640 --> 0:40:28.759 weighting each, so you get a little bit more of 0:40:28.800 --> 0:40:31.640 an overweight to the tech stocks that haven't done so well. 0:40:31.680 --> 0:40:36.640 So overall we're calling this sort of like the methadone 0:40:36.760 --> 0:40:38.840 version of the cues, right, And there's many. 0:40:38.719 --> 0:40:39.320 Ways to do this. 0:40:40.120 --> 0:40:42.920 Many people are figuring out how to get off of 0:40:43.120 --> 0:40:47.719 the sort of reliance on these seven stocks, yet they 0:40:47.800 --> 0:40:51.960 want to stay invested in equities. So we've got NASDAK 0:40:52.280 --> 0:40:54.399 covered call is a way to do it. You've got 0:40:54.520 --> 0:40:56.759 equal weighting is another way to do it, midcaps or 0:40:56.760 --> 0:40:58.920 another way to do it. So we think there'll be 0:40:59.160 --> 0:41:01.319 a movement of flow was away from the market cap 0:41:01.360 --> 0:41:03.440 weighted indexes a little bit this year to these types 0:41:03.480 --> 0:41:07.160 of less magnificent seven up ETFs. 0:41:06.840 --> 0:41:09.000 Still get the tech but just you know that goal 0:41:09.080 --> 0:41:11.759 waiting kind of makes it all fat well obviously, Yeah, 0:41:12.880 --> 0:41:13.320 and then. 0:41:13.560 --> 0:41:15.640 Oh, I mentioned if we actually get a FED that 0:41:15.719 --> 0:41:17.879 cuts rates. Here there's a treasury play here. 0:41:18.440 --> 0:41:21.279 Yeah, this is TUA. This is designed by hedge fund 0:41:21.320 --> 0:41:25.680 people who start a company called Simplify, and it's I 0:41:25.880 --> 0:41:27.640 like it because these products are really interesting. This is 0:41:27.680 --> 0:41:30.120 almost like five times leverage short end of the curve. 0:41:30.239 --> 0:41:32.719 So because you're short in five it's not that much, 0:41:33.160 --> 0:41:34.640 but it's a it's a it's a kind of a 0:41:34.680 --> 0:41:38.040 strategy that you might find pimp Goo doing for institutions 0:41:38.360 --> 0:41:40.680 or a hedge fund. Two is the ticker, and this 0:41:40.800 --> 0:41:44.960 company has gotten a lot of actual institutional investors, which 0:41:45.000 --> 0:41:47.440 is rare for a small company, and so I like 0:41:47.520 --> 0:41:50.200 to highlight it because a lot of ETFs they don't 0:41:50.239 --> 0:41:53.839 just package different asset classes, they package like people. I mean, 0:41:53.880 --> 0:41:57.400 these are hedge fund brains designing funds. And TUA is 0:41:57.440 --> 0:41:59.920 their biggest hit so far. And if the rates fall, 0:42:00.000 --> 0:42:00.719 all this should pop. 0:42:01.080 --> 0:42:02.680 Hey, Eric, make sure to tell your friends and family 0:42:02.719 --> 0:42:04.960 you talked about stuff today other than bitcoin et apps. 0:42:05.000 --> 0:42:06.160 Okay, my name is Eric. 0:42:07.040 --> 0:42:09.080 Clip. Hopefully they they turn it to a clip all 0:42:09.120 --> 0:42:09.880 four it to my friends. 0:42:09.960 --> 0:42:12.239 Okay, good, you definitely sound like I got sleep, so 0:42:12.840 --> 0:42:13.520 really good stuff. 0:42:13.680 --> 0:42:15.880 This is so much fun. The two of you are 0:42:15.960 --> 0:42:17.880 pretty you know, we should do a podcasts. 0:42:18.160 --> 0:42:19.560 You know, it's called tillions. 0:42:20.680 --> 0:42:24.160 Podcast about GNIS and of course Jill Webber. This is Bloomberg. 0:42:24.600 --> 0:42:28.120 You're listening to the Bloomberg Business Week podcast. Catch us 0:42:28.200 --> 0:42:31.480 live weekday afternoons from three to six Eastern Listen on 0:42:31.600 --> 0:42:35.280 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business 0:42:35.360 --> 0:42:37.600 app or watch us live on YouTube. 0:42:39.160 --> 0:42:42.560 Chip design company Synopsis screen to buy software developer Answers 0:42:42.640 --> 0:42:45.040 for about thirty four billion in a cash and stock deal, 0:42:45.840 --> 0:42:47.840 marking one of the largest deals announced worldwide in the 0:42:47.880 --> 0:42:50.400 past year. I just want to point out that Answers 0:42:50.440 --> 0:42:53.360 shares were down five point five percent today, Synopsis was 0:42:53.480 --> 0:42:54.160 up three percent. 0:42:54.440 --> 0:42:57.560 Yeah, maybe because the deal Francis came in below prior 0:42:57.680 --> 0:43:00.600 reported levels. That's according to some ann lists who we 0:43:00.640 --> 0:43:04.040 spoke to here at Bloomberg News. Secondly, Carol Advanced micro 0:43:04.120 --> 0:43:07.319 Devices AMD shares rallying out performing the socks a big time, 0:43:07.640 --> 0:43:10.160 the chipmaker trading at its highest in more than two years, 0:43:10.200 --> 0:43:12.279 as Barkley's raised its price target on the stock to 0:43:12.360 --> 0:43:15.560 two hundred dollars from one hundred and twenty dollars, seeing 0:43:15.680 --> 0:43:18.080 AI as a primary driver of growth. 0:43:17.880 --> 0:43:20.520 Basically saying it's not just about Nvidia, because maybe they 0:43:20.560 --> 0:43:21.160 can't do it all. 0:43:21.440 --> 0:43:23.080 I do want to point out that's pretty happy about 0:43:23.080 --> 0:43:23.840 that AMD. 0:43:23.719 --> 0:43:25.440 Number one gainer in the S and P five hundred 0:43:25.440 --> 0:43:27.359 and the Nasdaq one hundred. All right, so let's get 0:43:27.440 --> 0:43:30.759 into it with Bloomberg News Managing editor of Technology and 0:43:30.800 --> 0:43:35.600 Global Cybersecurity here at Bloomberg News is Lindawan. She's here 0:43:35.640 --> 0:43:37.240 in our Bloomberg Interactive Broker studio. 0:43:37.320 --> 0:43:39.160 A lot going on. Let's first talk about the deal. 0:43:40.200 --> 0:43:42.120 These are not companies that I feel like when we 0:43:42.239 --> 0:43:45.240 talk about Sami's do we typically talk about these two companies. 0:43:45.480 --> 0:43:46.600 Tell us about them and what we know. 0:43:46.880 --> 0:43:49.080 Nobody knows about these companies outside of these walls. 0:43:49.160 --> 0:43:51.560 Okay, So can I just say I'm so glad you 0:43:51.640 --> 0:43:54.280 said that. What I'm like, Okay, this is a thirty 0:43:54.320 --> 0:43:56.400 four billion dollar deal, and yes, there have been mumblings 0:43:56.440 --> 0:43:58.239 about this over the past week or so. Yeah, and 0:43:58.280 --> 0:44:00.600 I was like, I should know about the This is 0:44:00.600 --> 0:44:01.080 a big deal. 0:44:01.400 --> 0:44:03.000 This was sixty one percent yea last year. 0:44:03.040 --> 0:44:05.160 By the way, that's right, It's a good gainer. I mean, 0:44:05.600 --> 0:44:06.279 there's a good reason. 0:44:06.360 --> 0:44:06.480 Right. 0:44:06.560 --> 0:44:10.760 So Synopsis owns this very specialized part of the chips 0:44:10.840 --> 0:44:13.759 supply chain, which, as you know, is critical to the world. 0:44:13.840 --> 0:44:16.799 Chips are in everything. They're in televisions, they're in refrigerators, 0:44:16.800 --> 0:44:20.239 they're in cars, they're in like AI compute, you know. 0:44:21.640 --> 0:44:24.920 And Synopsis doesn't make the chips. Synopsis doesn't even make 0:44:25.480 --> 0:44:28.520 the chip machines that make the chips. Synopsis makes the 0:44:28.719 --> 0:44:33.000 software that flows into the machines that then makes the chips. 0:44:33.040 --> 0:44:36.240 And there are very few companies that are in that space, 0:44:36.320 --> 0:44:39.919 so they already have a really good market share in there. 0:44:40.080 --> 0:44:43.719 And this investment, this thirty four billion dollar deal, what 0:44:43.880 --> 0:44:47.959 that does is it increases their stack, so to speak, 0:44:48.000 --> 0:44:51.040 in the technology world. So they're not just designing the 0:44:51.160 --> 0:44:53.839 software that makes the chips, but they're able to now 0:44:54.000 --> 0:44:59.880 integrate this company ansis that builds models that allows men 0:45:00.000 --> 0:45:04.680 manufacturers of everything from cars to like aircraft's defence devices 0:45:04.760 --> 0:45:09.120 and military equipment to model how that equipment is going 0:45:09.160 --> 0:45:12.160 to be used in the real world. So imagine taking 0:45:12.200 --> 0:45:14.440 this like chip design company and merging it with this 0:45:14.719 --> 0:45:18.240 modeling software, and you have like a very powerful combination 0:45:18.440 --> 0:45:19.880 that can go after even. 0:45:19.719 --> 0:45:22.000 Bigger market people one stop shopping. It feels like that's 0:45:22.080 --> 0:45:22.680 right companies. 0:45:22.800 --> 0:45:25.279 Yeah you need your chips, Carol, you know where to go, right? 0:45:25.480 --> 0:45:27.200 We do you do all your chip shopping there? 0:45:27.960 --> 0:45:28.160 Yeah? 0:45:28.239 --> 0:45:29.320 Last time I went chip shopping. 0:45:29.320 --> 0:45:31.000 But it's really it's well, you know, it's funny. I 0:45:31.120 --> 0:45:34.760 love the supply chain analysis function on the Bloomberg and ansays, 0:45:34.960 --> 0:45:39.799 I mean customers are Caterpillar, Boeing, Rose, Royce, Lenovo, HUAWEIH, 0:45:40.080 --> 0:45:42.759 the military, like all of them. Right, And then I'm 0:45:42.800 --> 0:45:46.759 looking at Synopsis, and I'm looking at a lot of 0:45:46.840 --> 0:45:48.600 companies that I don't actually know. 0:45:48.960 --> 0:45:51.160 Oh, well, you just you just mentioned a M D 0:45:51.880 --> 0:45:55.600 m D all the all the major chip manufacturers of 0:45:55.680 --> 0:45:59.360 the world are going to use a contel like Synops Intel. 0:45:59.480 --> 0:46:01.560 That's right, and Ancess. 0:46:01.719 --> 0:46:03.640 Now I see that a customer, they have a. 0:46:04.000 --> 0:46:06.400 Song relationship with each other. What they would say, and 0:46:06.480 --> 0:46:08.520 I think they said it during their call earlier this 0:46:08.680 --> 0:46:11.120 morning when they announced the deal, is that this is 0:46:11.280 --> 0:46:13.560 like years in the making, like they have been using 0:46:13.640 --> 0:46:15.560 each other's technology for quite some time. 0:46:16.440 --> 0:46:21.240 Regulatory problems, regulatory issues, right, because we're interesting. Synopsis rallied, 0:46:21.480 --> 0:46:23.839 which was the acquirer, which is not what you typically see, 0:46:24.200 --> 0:46:25.960 and then answers as the target went down. 0:46:26.080 --> 0:46:30.560 Both moves are counterintuitive to some extent, exactly what you mentioned, 0:46:30.640 --> 0:46:33.239 which is the fact that like the price it's going 0:46:33.360 --> 0:46:36.480 for is less than what the market had expected. There 0:46:36.520 --> 0:46:39.360 were some reports, not from US, there were some reports 0:46:39.400 --> 0:46:41.680 out there about the fact that ances could end up 0:46:41.680 --> 0:46:44.399 going for like four hundred dollars per share and ended 0:46:44.480 --> 0:46:47.120 up going below that. So that's one reason. But another 0:46:47.200 --> 0:46:50.120 reason is exactly what you said. So another reason, of 0:46:50.200 --> 0:46:53.360 course is the regulatory concern over having these two companies 0:46:53.440 --> 0:46:56.959 merge together. That's a pretty powerful market force, and whether 0:46:57.080 --> 0:47:00.440 it gets past the CFTC and other regulatory h we 0:47:00.520 --> 0:47:03.800 don't know. And then there's the geopolitical pressure of China. 0:47:04.200 --> 0:47:07.520 Right will China, a big consumer who has a say 0:47:07.560 --> 0:47:09.800 in these kinds of mergers, even if they're two American 0:47:09.920 --> 0:47:12.319 companies sign off on a deal like this that would 0:47:12.400 --> 0:47:16.480 create a powerful company within here, you know, within these bounds. 0:47:16.600 --> 0:47:18.640 That's surprising to me. Why would China have a say here? 0:47:18.880 --> 0:47:23.320 It's super surprising. I didn't learn this until like another 0:47:23.480 --> 0:47:26.920 deal that involved two other technology companies ended up getting 0:47:27.600 --> 0:47:31.640 ended up falling apart earlier this year. China is a 0:47:31.840 --> 0:47:35.920 major consumer of all things around the world because it 0:47:36.080 --> 0:47:40.480 has huge buying power. It actually has say, an influence 0:47:41.000 --> 0:47:45.160 and approval processes in place for mergers of companies that 0:47:45.480 --> 0:47:48.080 serve the country. That's interesting even if they're outside of 0:47:48.160 --> 0:47:48.520 the country. 0:47:48.680 --> 0:47:52.680 So I did the FAGO function on the Bloomberg terminal 0:47:52.920 --> 0:47:55.120 literally FAGO, And what you can do is you can 0:47:55.200 --> 0:47:58.239 pull up the financial analysis by geography and you can 0:47:58.320 --> 0:48:01.919 see that. In fact, for Synopsis, at least fifteen point 0:48:01.960 --> 0:48:04.480 two percent of the company's revenue in twenty twenty three, 0:48:04.560 --> 0:48:08.640 a fiscal year ended in October, came from China. 0:48:08.840 --> 0:48:11.280 That's exactly right. And actually, in an interview with Bloomberg 0:48:11.360 --> 0:48:14.879 Television not too long ago, Synopsis even said the then 0:48:15.080 --> 0:48:18.879 outgoing CEO of Synopsis said we would be selling even 0:48:18.960 --> 0:48:22.319 more to China. China would represent an even larger share 0:48:22.400 --> 0:48:24.800 of our market if it weren't for the restrictions that 0:48:24.880 --> 0:48:28.200 the US has placed on exports of chip technology and 0:48:28.400 --> 0:48:30.240 chips themselves to that country. 0:48:30.400 --> 0:48:33.399 And it doesn't look like Ansis gets a significant portion 0:48:33.480 --> 0:48:35.640 of revenue from China at this point. 0:48:35.680 --> 0:48:37.920 It's not, but it will, yeah, right, So once it's 0:48:37.920 --> 0:48:39.960 a part of the company, I mean for Synopsis, it 0:48:40.040 --> 0:48:42.160 opens up a ton of different markets for them, right 0:48:42.200 --> 0:48:45.080 that they haven't already played in. So I don't know, net, 0:48:45.120 --> 0:48:47.600 how are you thinking about this? Is this likely to 0:48:47.719 --> 0:48:50.200 happen or we're gonna have to be patient or I 0:48:50.239 --> 0:48:52.759 don't know. How do you think about it? As an analyst? 0:48:53.080 --> 0:48:54.719 I know you can't say yes or no in terms 0:48:54.760 --> 0:48:55.600 of it's going to happen, But. 0:48:56.440 --> 0:48:58.720 So hard to call whether it's actually going to happen. 0:48:58.800 --> 0:49:00.520 But I'll point you to two things. The one, there 0:49:00.600 --> 0:49:05.760 was a very large murderer in aviation today that faced 0:49:05.800 --> 0:49:08.560 some anti trust pushback. 0:49:09.840 --> 0:49:11.600 Talked about right right. 0:49:12.080 --> 0:49:14.719 But on top of that, I will also point you. 0:49:14.760 --> 0:49:17.560 To because they were concerned about anti competitive Would this 0:49:17.680 --> 0:49:18.640 be anti competitive? 0:49:18.680 --> 0:49:21.160 That's the question, right and and they raised that as 0:49:21.280 --> 0:49:24.240 like a potential concern as part of their conversation today 0:49:24.320 --> 0:49:26.400 with investors. But the other thing I'll point you to 0:49:27.239 --> 0:49:30.600 is the estimated closure closing date of this deal is 0:49:30.719 --> 0:49:34.360 the first half of twenty twenty five in the in 0:49:34.480 --> 0:49:37.400 the market's mind, that just points to the fact that 0:49:37.440 --> 0:49:39.680 they are anticipating a potential You. 0:49:39.800 --> 0:49:42.000 Never want a deal to take a year to close. 0:49:42.160 --> 0:49:45.800 I mean even from selling a condo. You know, somewhere 0:49:45.840 --> 0:49:47.520 in the in the US, a realtor is going to 0:49:47.560 --> 0:49:50.200 say to you, let's get this thing closed as soon 0:49:50.239 --> 0:49:53.080 as possible, Bee, because the longer we wait, the more 0:49:53.360 --> 0:49:55.000 this deal can fall in my hand. 0:49:55.120 --> 0:49:58.320 Yeah, we do have an election here in November. 0:49:58.360 --> 0:49:59.799 Are you raising your hand because you want to talk Carol? 0:50:00.200 --> 0:50:00.359 Yeah? 0:50:00.400 --> 0:50:02.960 Okay, is it the expectation that about that election we'll 0:50:02.960 --> 0:50:05.200 get through an election, we'll have a new administration. 0:50:05.560 --> 0:50:06.239 Is that part of it. 0:50:06.560 --> 0:50:09.360 That's an interesting strategy. I hadn't even thought about it. 0:50:09.520 --> 0:50:12.279 Will we be ushering in a different c OFDC that 0:50:12.480 --> 0:50:15.719 is more like merger friendly? I don't know. It's not 0:50:15.920 --> 0:50:17.600 like the Trump administration was. 0:50:17.760 --> 0:50:20.480 Both of them had pushing in terms of China, but 0:50:20.560 --> 0:50:21.640 you never know, right. 0:50:21.640 --> 0:50:23.600 Yeah, that's a dangerous game to play. If that's the 0:50:23.680 --> 0:50:26.120 reason why they're scheduling the closing for first half of 0:50:26.160 --> 0:50:26.800 twenty twenty. 0:50:26.640 --> 0:50:28.719 Five, I don't know. It's just weird. It's a long time. 0:50:29.400 --> 0:50:30.680 Uh quickly, can we move? 0:50:30.760 --> 0:50:33.880 Yeah, go ahead, Can you can talk? Yeah, permission granted, 0:50:34.000 --> 0:50:34.920 I'm giving you permission. 0:50:35.000 --> 0:50:37.359 AMD number one gainer in the S and P five hundred, 0:50:37.400 --> 0:50:38.239 the Nasdaq one hundred. 0:50:38.320 --> 0:50:38.799 I loved what. 0:50:40.400 --> 0:50:42.800 Barclays had to say, and part of it was I 0:50:42.880 --> 0:50:45.640 lost all my notes. But basically and video, yep, it's 0:50:45.680 --> 0:50:47.600 been the chip company we talk about when we think 0:50:47.600 --> 0:50:50.520 about AI, but basically saying maybe they can't do all 0:50:50.600 --> 0:50:53.640 of it, Like the ecosystem that AI is creating, that 0:50:53.680 --> 0:50:55.560 you're going to need more players are shaking your head. 0:50:55.840 --> 0:50:57.839 It was always a crazy phenomenon to be that only 0:50:57.920 --> 0:51:00.120 in video would enjoy an AI bump. It was so 0:51:00.600 --> 0:51:03.879 because we would throw all these other chip companies out there, like, hey, 0:51:04.280 --> 0:51:07.560 remember AMD, Remember you know all of these other companies 0:51:07.600 --> 0:51:10.360 that also and for some reason in video was just 0:51:10.440 --> 0:51:12.560 eating up all that. I mean, they have first mover advantage, 0:51:12.560 --> 0:51:15.120 but first mover advantage only takes you so far. At 0:51:15.200 --> 0:51:17.279 some point, others crowd that area and you have to 0:51:17.320 --> 0:51:19.640 figure out how to continually innovate. And you just had 0:51:19.680 --> 0:51:21.759 AMD like come out with this new and video chip 0:51:21.840 --> 0:51:23.759 rival right like it was only a matter of time 0:51:23.800 --> 0:51:25.279 before everyone woke up to that. I'm just like a 0:51:25.320 --> 0:51:26.360 little surprised that it took that. 0:51:26.480 --> 0:51:28.200 Barkway said, the desire to have a second source what 0:51:28.320 --> 0:51:31.239 overwhelmed difficulties for the software ecosystem. Is there anybody else 0:51:31.280 --> 0:51:33.200 in addition to AM do that you think we should 0:51:33.200 --> 0:51:34.799 be watching in terms of the chip space. 0:51:34.640 --> 0:51:36.600 Like is there any money that should pile into any 0:51:36.600 --> 0:51:37.480 other part financials? 0:51:37.640 --> 0:51:40.120 I know you can't, I won't touch it, but that 0:51:40.200 --> 0:51:41.320 we have on our radar. 0:51:41.520 --> 0:51:44.359 Maxim is like another you know, chips company that comes 0:51:44.440 --> 0:51:47.680 up every once in a while. I will leave it 0:51:47.719 --> 0:51:49.560 there because I don't want anybody to end up trading 0:51:49.600 --> 0:51:52.400 on my on my stuck advice. But but you know 0:51:52.480 --> 0:51:54.920 there are others in the space, and you know, uh, 0:51:55.080 --> 0:51:58.359 frankly arm is a publicly listed company right now. They 0:51:58.719 --> 0:52:02.279 like they market their IPO on the hopes of an 0:52:02.280 --> 0:52:04.920 AI bump, So like there's another one that could be 0:52:05.000 --> 0:52:05.680 a potential play. 0:52:05.760 --> 0:52:07.440 Our producers, right, we have to have you on. That 0:52:07.560 --> 0:52:07.879 was great. 0:52:08.280 --> 0:52:11.880 Thank you so much, Bloomberg News Managing Editor of Technology 0:52:11.880 --> 0:52:13.960 and Global Security, Linda Want, Thank you so much. 0:52:14.040 --> 0:52:14.239 Lynn. 0:52:22.080 --> 0:52:25.600 You're listening to the Bloomberg Business Week podcast. Catch us 0:52:25.680 --> 0:52:29.640 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:52:29.880 --> 0:52:33.120 the Bloomberg Business app, and YouTube. You can also listen 0:52:33.280 --> 0:52:36.359 live on Amazon Alexa from our flagship New York station, 0:52:36.840 --> 0:52:39.840 Just say Alexa play Bloomberg eleven thirty. 0:52:40.960 --> 0:52:42.879 Plenty ahead in our second hour of the weekend edition 0:52:42.920 --> 0:52:46.279 of Bloomberg Business Week, including top travel destinations this year 0:52:46.400 --> 0:52:47.960 and folks, it's not only. 0:52:47.800 --> 0:52:50.759 About people heading to Italy, know that there's anything wrong 0:52:50.800 --> 0:52:51.000 with that. 0:52:51.320 --> 0:52:54.000 Plus, speaking of travel, for all you ski buffs out there, 0:52:54.200 --> 0:52:56.520 we speak with ski legend Body Miller about his new 0:52:56.560 --> 0:52:59.960 ski company that could jump turn the entire ski industry. 0:53:00.320 --> 0:53:03.200 And we revisit the most anti climactic New Year's Eve 0:53:03.360 --> 0:53:06.080 of them all. Y two K, we're taking a trip yep, 0:53:06.280 --> 0:53:07.600 back to nineteen ninety nine. 0:53:08.000 --> 0:53:10.600 And speaking of trips, first up this hour this week, 0:53:10.680 --> 0:53:14.440 we headed to California Forever. It's a massive project funded 0:53:14.440 --> 0:53:17.200 by a bunch of billionaires. You'll know their names, venture 0:53:17.239 --> 0:53:20.640 capitalist Marc Andreesen LinkedIn co founder Rie Hoffman. They've all 0:53:20.680 --> 0:53:23.760 spent about nine hundred million dollars together to buy sixty 0:53:23.840 --> 0:53:28.200 two thousand acres in Solano County, California. It's just northeast 0:53:28.280 --> 0:53:30.520 of San Francisco, and full transparency. 0:53:30.560 --> 0:53:32.440 They haven't built anything yet, but their plan is to 0:53:32.480 --> 0:53:35.480 create a new city that's self sufficient and sustainable while 0:53:35.520 --> 0:53:38.960 addressing the Bay Arias dire housing shortage. The vision is 0:53:39.000 --> 0:53:40.040 a walkable community. 0:53:40.160 --> 0:53:41.239 So easy, peasy right now? 0:53:41.320 --> 0:53:44.680 Oh yeah, development in California always so easy, Not so fast. 0:53:44.760 --> 0:53:47.840 The plan has sparked fierce opposition from local residents, farmers, 0:53:47.920 --> 0:53:51.960 and politicians, who accused the developer of using shady tactics 0:53:52.320 --> 0:53:54.120 and suing those who stood. 0:53:53.840 --> 0:53:54.200 In the way. 0:53:54.360 --> 0:53:56.399 Writing about it in what was a most read story 0:53:56.440 --> 0:53:59.360 on the Bloomberg this past week, Bloomberg News California Bureau 0:53:59.440 --> 0:54:02.040 Chief Karen Breslau, who joined us from her car. 0:54:02.840 --> 0:54:05.120 I have pulled over. I'm across the street from the 0:54:05.239 --> 0:54:11.440 future City, which is now just these these enormous wind turbines. 0:54:11.480 --> 0:54:14.279 It's actually a beautiful day out here. It's it's been raining, 0:54:14.360 --> 0:54:16.920 so everything's green and the sky is blue, and the 0:54:17.000 --> 0:54:19.319 wind turbines are turning, and it does look it does 0:54:19.440 --> 0:54:20.240 look quite idyllic. 0:54:20.480 --> 0:54:22.319 So piece of cake. They can build it, no. 0:54:22.440 --> 0:54:23.520 Problems, no problem. 0:54:24.040 --> 0:54:25.359 It's nineteen degrees where we are. 0:54:25.600 --> 0:54:30.000 We kind of don't like you right now, Karen, I'll 0:54:30.080 --> 0:54:34.120 keep it to myself, okay, So tell us about this project, 0:54:34.320 --> 0:54:35.880 give us a little bit of the who, what we are, 0:54:35.920 --> 0:54:38.760 and why, just for those who might not be familiar. 0:54:38.520 --> 0:54:40.960 Of course. So we're in Solano County, which is of 0:54:41.040 --> 0:54:45.360 the very excerbs of the of the San Francisco Bay Area. 0:54:45.480 --> 0:54:50.040 This is still a largely rural community, some subdivisions, and 0:54:50.080 --> 0:54:54.960 we're about halfway between the Bay, between San Francisco and Sacramento. 0:54:55.480 --> 0:55:00.960 And this area became a subject of fascinations Solano in 0:55:01.040 --> 0:55:05.360 the last few years. A mysterious land buyer started snapping 0:55:05.480 --> 0:55:10.440 up parcels of land for often very inflated prices, and 0:55:10.560 --> 0:55:13.520 nobody knew who this individual was or individuals. They were 0:55:13.560 --> 0:55:17.880 operating under a mysterious name Flannery and Associates, which has 0:55:18.000 --> 0:55:21.240 just taken off a street sign in this in this county. 0:55:22.320 --> 0:55:27.240 And they were basically the investors were outed last summer. 0:55:28.480 --> 0:55:32.000 And it's all the boldface names you mentioned. It's it's 0:55:32.120 --> 0:55:37.919 Mike Moritz, Loreene pal Jobs, Mark Andresen Reid Hoffman, who's 0:55:37.960 --> 0:55:42.320 who of Silicon Valley investors, And they poured what we 0:55:42.600 --> 0:55:46.440 now you know, so far nine hundred million dollars into 0:55:47.680 --> 0:55:51.920 a as yet unseen new city that will be you know, 0:55:52.120 --> 0:55:55.560 literally supposed to be, you know, stood up in what 0:55:55.680 --> 0:55:58.800 are now you know, fields used for grazing and wind power. 0:55:59.200 --> 0:56:03.000 And the idea is to build this green new city. 0:56:03.360 --> 0:56:05.759 It's part of the new urbanist movement, which is to 0:56:05.840 --> 0:56:11.960 have walkable neighborhoods. In introducing their plans today, you know, 0:56:12.040 --> 0:56:15.360 the developers, the planners talked about creating what sounds like 0:56:15.400 --> 0:56:18.000 a dream to most Californians, which is a place where 0:56:18.040 --> 0:56:20.800 you can walk to anywhere you want to be in 0:56:20.840 --> 0:56:22.920 any given day in ten minutes. So that could be 0:56:23.000 --> 0:56:26.000 your job. It could be your child's school, it could 0:56:26.040 --> 0:56:29.399 be a library of barbershop, a cafe, or your place 0:56:29.440 --> 0:56:31.040 of employment or your own small. 0:56:30.880 --> 0:56:33.239 It's very left fron City, Like I think about that 0:56:33.800 --> 0:56:36.560 concept prought back right, Like you know, Sam left Freck 0:56:36.600 --> 0:56:40.680 and I cross the water from here in Jersey City, 0:56:40.719 --> 0:56:43.239 downtown Jersey that whole idea that they left Rack did 0:56:43.239 --> 0:56:45.920 the same thing the family. This whole Newport area where 0:56:45.960 --> 0:56:49.680 you could live, work, there are schools, everything you could. 0:56:49.480 --> 0:56:50.440 Coldly get to. 0:56:50.600 --> 0:56:52.880 Would Karen talk about the opposite thing, Yeah, talk a 0:56:52.920 --> 0:56:55.080 little bit about opposition and how this is going to 0:56:55.200 --> 0:56:55.839 a vote now. 0:56:56.560 --> 0:57:00.560 Yeah, So there are the reason that the opposition is 0:57:00.680 --> 0:57:03.440 very important is because in California, and particularly in this county, 0:57:04.160 --> 0:57:08.400 it's governed by a land use measure that was designed 0:57:08.440 --> 0:57:11.919 in the nineteen eighties to prevent sprawl. And so none 0:57:11.960 --> 0:57:15.520 of this land is zoned for housing or manufacturing or 0:57:16.360 --> 0:57:18.240 you know, technology or any of the things that the 0:57:18.560 --> 0:57:21.240 that the planners would like to have. So they have 0:57:21.400 --> 0:57:24.200 to go to the voters and get their approval to 0:57:24.440 --> 0:57:28.320 change the county zoning regulations. The problem here is that 0:57:28.360 --> 0:57:32.560 they have alienated already some key constituencies. One would be 0:57:32.680 --> 0:57:35.600 you know the farmers who who comprise a large part 0:57:35.640 --> 0:57:38.760 of the population here, and as you mentioned in your 0:57:38.840 --> 0:57:43.440 in your intro, you know, the organizers, the developers have 0:57:43.640 --> 0:57:48.040 sued several of the farmers claiming collusion and price fixing 0:57:48.320 --> 0:57:51.240 simply because they wanted they didn't want to, you know, 0:57:51.280 --> 0:57:53.360 they wanted a high price for their property. Once they 0:57:53.400 --> 0:57:56.360 saw that that, you know that the farmer next door 0:57:56.440 --> 0:57:59.400 got more. So it's kind of supply and demand. So 0:57:59.480 --> 0:58:04.880 there's a very contentious lawsuit. They've also terribly irritated two 0:58:04.960 --> 0:58:08.480 local members of Congress, John Garmendi and Mike Thompson, who 0:58:08.560 --> 0:58:12.480 represent this area that are very close to Travis Air 0:58:12.520 --> 0:58:14.520 Force Base, which is the largest air force base on 0:58:14.560 --> 0:58:17.000 the West Coast and a key gateway to the Pacific. 0:58:17.080 --> 0:58:19.560 So there were some national security concerns when they were 0:58:20.000 --> 0:58:24.120 in stealth mode. And then the conservationists in this area 0:58:24.560 --> 0:58:29.600 are wondering, why would you not infill the existing small 0:58:29.680 --> 0:58:32.920 cities in this county rather than carving a brand new 0:58:33.000 --> 0:58:39.080 one out of farmland. They're accusing the developers of creating 0:58:39.480 --> 0:58:43.040 sprawl or planning sprawl, rather than you know, this utopian 0:58:43.120 --> 0:58:46.400 green city, which is what they unveiled today. 0:58:46.640 --> 0:58:49.640 Who These are venture capitalists, you know, they're used to 0:58:49.720 --> 0:58:53.160 putting money into things and making an incredible return. Is 0:58:53.520 --> 0:58:55.880 that the plan for this city? I mean, cities are 0:58:56.240 --> 0:59:01.320 public good they're owned by the residents. Any one, how 0:59:01.360 --> 0:59:03.480 does the governrice work here? We have about a minute left, 0:59:03.480 --> 0:59:04.840 but explain how that would work here? 0:59:05.240 --> 0:59:07.720 Yeah, so that the planner of this whole operation is 0:59:07.720 --> 0:59:10.760 a thirty six year old guy named Ian Shromak who's 0:59:10.800 --> 0:59:12.920 originally from the Czech Republic and has spent some time 0:59:12.960 --> 0:59:15.480 in gold and socks, you know, some startups. You know, 0:59:15.600 --> 0:59:17.160 how's the Silicon Valley thing going on? 0:59:17.800 --> 0:59:18.360 And he. 0:59:20.520 --> 0:59:23.440 Keeps saying, you know, my investors, this is patient capital. Well, 0:59:23.480 --> 0:59:25.880 if there's one thing, Silicon Valley isn't known for its 0:59:25.960 --> 0:59:30.120 patient capital. But trumk, it's the planner he's talking about, 0:59:30.160 --> 0:59:33.360 you know, a fifty year time frame before this community 0:59:33.480 --> 0:59:37.040 is fully built out. And so this is not I mean, 0:59:37.360 --> 0:59:40.040 you know, he said, I hope I'll retire off of 0:59:40.120 --> 0:59:42.960 this project. This guy's in his thirties. So the time 0:59:43.000 --> 0:59:45.960 frame for building a city, you know, in history it's 0:59:46.040 --> 0:59:48.560 centuries or millennia, and in this case they're talking about 0:59:48.560 --> 0:59:51.840 fifty years, which is pretty fast by city building standards. 0:59:52.240 --> 0:59:54.120 But that I think that is really one of the 0:59:54.240 --> 0:59:56.840 unanswered questions is what, you know, what kind of return 0:59:56.920 --> 0:59:59.800 on investment are they expecting and what is the timeframe 0:59:59.880 --> 1:00:02.640 is to prove a concept, which is that we can 1:00:03.000 --> 1:00:04.640 go back to the you know, go back to the 1:00:04.720 --> 1:00:09.040 future and recreate American walkable American cities like we saw, 1:00:09.440 --> 1:00:11.600 you know, in the early nineteenth century. There is there 1:00:11.680 --> 1:00:14.200 is a kind of a nostalgia piece to this when 1:00:14.240 --> 1:00:16.960 you you know, fused with green energy. 1:00:17.320 --> 1:00:19.040 We would love to talk about forever. You've got to 1:00:19.080 --> 1:00:21.480 come back, get back to your reporting. We really appreciate 1:00:21.520 --> 1:00:24.959 you joining us. Bloomberg is California Bureau Chief Karen joining 1:00:25.080 --> 1:00:26.120 us from Solana County. 1:00:26.480 --> 1:00:30.000 You're listening to the Bloomberg Business Week podcast. Catch us 1:00:30.120 --> 1:00:33.400 live weekday afternoons from three to six Eastern Listen on 1:00:33.480 --> 1:00:37.480 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 1:00:37.840 --> 1:00:39.480 or watch us live on YouTube. 1:00:40.480 --> 1:00:43.480 Were airlines dots falling for another day this after they 1:00:43.520 --> 1:00:46.640 got absolutely hammered on Friday. Back then, Carol, the SMP 1:00:46.720 --> 1:00:50.240 gage of airlines declined the most in nineteen months United's all, 1:00:50.280 --> 1:00:53.160 more than ten percent Delta fell nine percent. American Airlines 1:00:53.280 --> 1:00:56.120 fell nine point five percent. This all a result of 1:00:56.200 --> 1:00:59.240 Delta lowering its profit forecast for the full year, which 1:00:59.400 --> 1:01:01.920 really understand, of course, the challenges the broader industry faces 1:01:01.960 --> 1:01:05.560 when it comes back to recapturing that pre pandemic performance. 1:01:05.640 --> 1:01:07.560 Yeah, like you said, the group overall down seven point 1:01:07.600 --> 1:01:09.840 six percent on Friday, then another one point three percent 1:01:09.880 --> 1:01:10.640 in today's session. 1:01:10.680 --> 1:01:12.680 All right, so concern lingers. 1:01:12.360 --> 1:01:14.440 Even after what was the busiest day ever for US 1:01:14.520 --> 1:01:17.240 air travel just a few months ago. We're talking about 1:01:17.240 --> 1:01:19.800 the Sunday after Thanksgiving, So all right, what's going on? 1:01:20.120 --> 1:01:22.560 Yeah, Haley Berg is back with us. She's lead economist 1:01:22.680 --> 1:01:25.720 for the travel app Hopper. That app analyzes trillions of 1:01:25.800 --> 1:01:29.080 data points i e. Prices on flights, car rentals, and 1:01:29.120 --> 1:01:31.640 hotels to make predictions about how much tickets are going 1:01:31.720 --> 1:01:35.439 to cost. Haley joins us on Zoom from Boston. Haley, 1:01:35.520 --> 1:01:38.160 good to have you back with us. So what gives here? 1:01:38.240 --> 1:01:40.520 Because Hopper says that more than three quarters of Americans 1:01:40.520 --> 1:01:42.480 are going to spend the same or even more on 1:01:42.640 --> 1:01:44.560 travel this coming year. So why are we hearing the 1:01:44.800 --> 1:01:46.360 gloominess when it comes to airlines? 1:01:46.760 --> 1:01:46.920 You know? 1:01:47.040 --> 1:01:49.800 One of the biggest sticking points for prices in the 1:01:49.920 --> 1:01:53.480 last three or four years has been supplied. There have 1:01:53.680 --> 1:01:56.960 not been enough seats to book, and that's why fares 1:01:57.000 --> 1:01:59.240 have been so incredibly high over the past few years. 1:01:59.320 --> 1:02:02.680 Think back to some twenty twenty two domestic airfare the 1:02:02.800 --> 1:02:05.040 highest that we had seen in all of our history 1:02:05.280 --> 1:02:09.520 at Hopper. So supply is now exceeding where it was 1:02:09.720 --> 1:02:12.880 in twenty nineteen. A lot of it is exceeding now 1:02:12.920 --> 1:02:15.840 on international routes. So part of this is just the 1:02:15.960 --> 1:02:20.000 equation of travelers are looking for low prices. There are 1:02:20.080 --> 1:02:22.920 more seats available to books, so they have more options. 1:02:23.080 --> 1:02:26.320 A lot of those options are low cost carriers who 1:02:26.400 --> 1:02:29.240 may have entered or expanded in the last two years. 1:02:29.760 --> 1:02:33.000 All of that is putting downward pressure on prices. Despite 1:02:33.080 --> 1:02:36.000 the fact that fifty percent of our users at Hopper 1:02:36.160 --> 1:02:38.400 are expecting to travel more this year than they did 1:02:38.520 --> 1:02:38.880 last year. 1:02:39.040 --> 1:02:41.200 Is that true domestic versus international travel. 1:02:41.640 --> 1:02:45.440 Yes, we're seeing a tremendous amount of demand for international travel, 1:02:45.760 --> 1:02:50.000 especially among younger travelers, and they're not just hitting the 1:02:50.720 --> 1:02:52.600 London and Paris. 1:02:52.360 --> 1:02:52.880 Of the world. 1:02:53.000 --> 1:02:56.320 They're really going to more off the beaten track destinations, 1:02:56.800 --> 1:02:59.920 destinations where there might be deals or just more unique experience, 1:03:00.000 --> 1:03:03.760 and says, so still very strong demand on international capacity 1:03:03.800 --> 1:03:06.760 there has been slower to recover. Prices to Europe are 1:03:06.800 --> 1:03:10.640 recovering because we've seen capacity added back there. Prices trans 1:03:10.760 --> 1:03:13.880 Pacific very different story. They still remain thirty to sixty 1:03:13.960 --> 1:03:16.920 percent higher because capacity has been slow to recover there. 1:03:17.360 --> 1:03:19.200 What about when it comes to other parts of the 1:03:19.240 --> 1:03:22.440 travel experience? Hotels? I couldn't believe how expensive hotels were 1:03:22.520 --> 1:03:25.040 in the fall when Carol and I were traveling, but 1:03:25.120 --> 1:03:27.440 it was so I couldn't believe how expensive it was. 1:03:28.360 --> 1:03:30.080 What's it going to look like this year? 1:03:30.440 --> 1:03:33.680 You're not alone in feeling like accommodation prices have been 1:03:33.880 --> 1:03:37.600 incredibly high. They have been, and we're expecting them to 1:03:37.760 --> 1:03:41.480 stay about the same this year. If we do see improvement, 1:03:41.520 --> 1:03:44.400 it would probably be towards summer or the second half 1:03:44.440 --> 1:03:47.680 of the year. But yes, demand for travel remains high, 1:03:47.800 --> 1:03:52.600 and that means that hotel stays vacation rentals, especially in 1:03:52.640 --> 1:03:55.600 those peak markets, they're selling out, and that means that 1:03:55.680 --> 1:03:58.280 if you're not booking far enough in advance, you're probably 1:03:58.320 --> 1:04:01.960 seeing an incredibly high prices. What We always recommend is 1:04:02.160 --> 1:04:05.280 for hotels in particular, if you're headed to a big city, 1:04:05.360 --> 1:04:08.240 book at the last minute, that's when those perishable rooms 1:04:08.280 --> 1:04:10.280 are going to go on sale. You're headed to a 1:04:10.360 --> 1:04:12.640 leisure destination, you go to Miami, you're doing a spring 1:04:12.680 --> 1:04:15.760 break trip. Book that very far in advance, couple months, 1:04:15.960 --> 1:04:18.360 because that's when prices will be lowest, when that availability 1:04:18.440 --> 1:04:18.960 is still high. 1:04:19.680 --> 1:04:21.520 What are you looking at, Carol, No, I'm just kind 1:04:21.560 --> 1:04:25.400 of now I'm thinking, are you think No, it's just 1:04:25.560 --> 1:04:28.720 interesting and I just wonder you know what you're seeing. 1:04:28.880 --> 1:04:31.480 We've got a great chart for our folks who are 1:04:31.480 --> 1:04:34.440 watching on YouTube and a streaming service. 1:04:34.480 --> 1:04:35.080 I'm just not sure. 1:04:35.280 --> 1:04:38.240 So if you're basically it says, if you're thinking about 1:04:38.920 --> 1:04:41.000 the main vacation plan you want to take in twenty 1:04:41.080 --> 1:04:43.439 twenty four, and this comes courtesy of our Bloomberg Intelligence team, 1:04:43.560 --> 1:04:45.800 if the costs exceeds your plan budget, what will you do? 1:04:46.520 --> 1:04:48.880 Twelve percent are going to look for a cheaper destination, 1:04:49.040 --> 1:04:52.640 fifteen percent are going to look I guess at attractions 1:04:52.640 --> 1:04:55.360 and maybe what they're spending there. Forty five percent will 1:04:55.400 --> 1:04:56.240 increase their budgets. 1:04:56.240 --> 1:04:58.200 Oh that's just tax and if you're just listening to 1:04:58.320 --> 1:05:00.320 us and not watching. The forty five percent is like, 1:05:00.520 --> 1:05:03.000 you know, the possible changes of your budget ex seeds plan. 1:05:03.920 --> 1:05:06.400 The majority of almost the majority of people, almost half 1:05:06.440 --> 1:05:08.480 the people said they'll just increase magic. 1:05:08.640 --> 1:05:11.040 Yeah, I mean that's bullish, but yeah, it's bullish. But 1:05:11.120 --> 1:05:13.280 it's also interesting when we just did a story about 1:05:13.440 --> 1:05:15.640 where if people found that they had what a ten percent. 1:05:15.440 --> 1:05:17.040 Bump in income er, Yeah, they pay down debt. 1:05:17.040 --> 1:05:18.520 They're going to pay down debt. So help me. 1:05:18.600 --> 1:05:20.880 Are you talking about I don't know what are you seeing? 1:05:21.440 --> 1:05:25.400 Higher end traveler, a bigger pocketbook, lower end? 1:05:25.480 --> 1:05:26.360 Is there any differences? 1:05:26.880 --> 1:05:29.720 There are a few things happening. So our Hopper users 1:05:29.760 --> 1:05:33.520 are primarily millennial in gen Z and seventy seven percent 1:05:33.600 --> 1:05:35.800 of them say that they are going to spend the 1:05:35.880 --> 1:05:38.880 same or more on travel this year. And there's really 1:05:38.960 --> 1:05:44.200 two schools here. One is our millennial generation. They built wealth. 1:05:44.560 --> 1:05:47.320 They are coming out, many of them of a few 1:05:47.360 --> 1:05:51.120 years of savings. Those who were in advantageous positions headed 1:05:51.200 --> 1:05:54.760 into the pandemic. They are spending more on travel. A 1:05:54.920 --> 1:05:58.440 larger proportion of their wealth is going towards trips, vacations. 1:05:58.560 --> 1:06:02.120 They have credit cards that allow them to gain points. 1:06:02.320 --> 1:06:05.680 The more they book they are loyal So this group 1:06:06.000 --> 1:06:09.360 is absolutely spending more and traveling more. And then on 1:06:09.480 --> 1:06:13.720 the flip side, we have incredibly priced conscious travelers more 1:06:13.760 --> 1:06:16.520 on the gen Z and what they're doing. They're taking 1:06:16.600 --> 1:06:19.120 their travel budget and they're saying, can I get two 1:06:19.200 --> 1:06:21.880 trips out of my budget from last year that might 1:06:21.920 --> 1:06:22.720 have been one trip? 1:06:23.200 --> 1:06:24.240 And we often see this. 1:06:24.480 --> 1:06:28.439 Travelers are skipping the trip to Miami and they're going 1:06:28.520 --> 1:06:30.800 to a destination in Puerto Rico that might be a 1:06:30.880 --> 1:06:34.640 whole lot less expensive and flight and in country expenses, 1:06:34.760 --> 1:06:38.320 So there is some optimization within the budget. That's absolutely happening. 1:06:38.400 --> 1:06:40.520 We see that a lot among Copper users because they're 1:06:40.600 --> 1:06:41.240 very pricensit. 1:06:41.400 --> 1:06:44.880 Okay, very briefly, we have top domestic and top international locations. 1:06:45.480 --> 1:06:48.200 Your top domestic locations. We got a list of them. 1:06:48.480 --> 1:06:51.040 We're about to show on the screen which one sticks 1:06:51.040 --> 1:06:52.080 out to you of these five. 1:06:52.160 --> 1:06:55.760 Here, I would say that Orlando is always a big one. 1:06:56.200 --> 1:06:59.840 It's popular, not just for those Disney trips, but all 1:07:00.080 --> 1:07:03.320 so for Port of Orlando starting on cruises, which as 1:07:03.400 --> 1:07:05.760 we know, are coming back you know, in the last 1:07:05.920 --> 1:07:09.280 year or two. So Orlando's always a big one, in 1:07:09.400 --> 1:07:12.600 part because no matter how much demand we see going there, 1:07:12.760 --> 1:07:16.560 prices are low. It's inaccessible and affordable place. 1:07:16.360 --> 1:07:17.760 To visit and international. 1:07:17.880 --> 1:07:25.760 Your top international locations Cancun, Mexico, Dominican Republic, London, England, Rome, Italy, Tokyo, Japan. 1:07:26.680 --> 1:07:28.640 That's kind of a mixed bag. Just got about fifteen 1:07:28.680 --> 1:07:29.280 seconds left. 1:07:29.320 --> 1:07:34.400 Any thoughts on that those tropical destinations are inexpensive alternatives 1:07:34.440 --> 1:07:36.880 to some of those longer hauled trips. But really this 1:07:37.040 --> 1:07:39.440 year is going to be all about Tokyo and the 1:07:39.560 --> 1:07:40.240 return to Asia. 1:07:40.400 --> 1:07:40.640 Wow. 1:07:40.920 --> 1:07:41.760 Wow, that's cool to do. 1:07:42.400 --> 1:07:45.200 That's interesting. Where are you going me? 1:07:45.560 --> 1:07:48.840 Yeah, we don't have anything planned. Oh I'll probably go 1:07:48.920 --> 1:07:49.680 to the American West. 1:07:49.920 --> 1:07:51.160 Oh that's what you said that earlier. 1:07:51.360 --> 1:07:53.560 All right, Haley Burg, lead economist at Hopper, Thank you 1:07:53.640 --> 1:07:53.960 so much. 1:07:54.040 --> 1:07:54.560 That was fun. 1:07:54.680 --> 1:07:55.400 This is Bloomberg. 1:07:58.480 --> 1:08:02.000 You're listening to the Bloomberg Business Week podcast. Catch us 1:08:02.120 --> 1:08:06.080 live weekday afternoons from three to six Eastern on Bloomberg Radio, 1:08:06.320 --> 1:08:09.560 the Bloomberg Business App, and YouTube. You can also listen 1:08:09.680 --> 1:08:12.800 live on Amazon Alexa from our flagship New York station, 1:08:13.240 --> 1:08:16.000 Just say Alexa play Bloomberg eleven thirty. 1:08:17.479 --> 1:08:20.760 Well, each fall, Bloomberg Pursuits does a ski takeover. They 1:08:20.840 --> 1:08:22.760 highlight where to ski and what gear to use for 1:08:22.840 --> 1:08:25.960 the upcoming season. So in last season's takeover, we sent 1:08:26.040 --> 1:08:29.519 BusinessWeek contributor Gordy Megros to trough out some skis from 1:08:29.520 --> 1:08:33.439 a new company called Peak Ski Company, based in Montana, 1:08:33.520 --> 1:08:36.160 co founded by ski racing legend Body Miller. So here's 1:08:36.160 --> 1:08:38.479 what Gordy wrote after spending all day on the skis, Carol, 1:08:38.920 --> 1:08:41.559 Typically skis require a certain amount of speed and pressure 1:08:41.600 --> 1:08:44.200 to engage the tip and initiate the turn, but these 1:08:44.320 --> 1:08:47.600 carved without having to apply that force at speed on 1:08:47.680 --> 1:08:49.519 the steeps. They held the turn like a race ski, 1:08:49.920 --> 1:08:52.360 and in bumps and slush they were quick and forgiving. 1:08:53.000 --> 1:08:56.960 Not once did I feel off balance, he continued. Anybody 1:08:57.000 --> 1:08:59.760 could use these skis. Beginners would love them because they're 1:08:59.760 --> 1:09:02.880 easy to turn. Experts would two because they still can 1:09:02.920 --> 1:09:05.759 ski aggressively and feel solid underfoot. 1:09:05.880 --> 1:09:07.760 It's a great feel of what these two gentlemen are 1:09:07.840 --> 1:09:09.880 up to. So let's talk more about the skis with 1:09:10.040 --> 1:09:12.920 the co founders of the company, Andy Worth and Body Miller. 1:09:13.040 --> 1:09:16.040 Andy also CEO and president of Peak Ski Company. He 1:09:16.120 --> 1:09:18.920 joins us from Bozeman, Montana. Body, by the way, of course, 1:09:18.960 --> 1:09:21.840 you know him, Olympic and World Championship, gold medalist many 1:09:21.920 --> 1:09:25.080 times over and the chief innovation officer at Peak Ski company. 1:09:25.160 --> 1:09:27.519 He joins us on zoom from Big Sky, Montana. Guys, 1:09:28.080 --> 1:09:29.720 so great to have you here with us. 1:09:29.840 --> 1:09:30.080 Body. 1:09:30.160 --> 1:09:30.880 Let me start with you. 1:09:31.280 --> 1:09:34.000 How did this all come together to create Peak Ski 1:09:35.320 --> 1:09:36.519 and why did you want to do it? 1:09:39.280 --> 1:09:42.120 Well, I've been obviously in skiing since I was grow 1:09:42.160 --> 1:09:45.839 a little and had exposure to a lot of different companies, 1:09:45.880 --> 1:09:48.400 started on K two and ben Fisher, then Rosen Goold 1:09:48.479 --> 1:09:51.000 and Atomic, then Head for eight or ten years. 1:09:51.080 --> 1:09:53.720 So being in the race rooms and. 1:09:53.800 --> 1:09:56.240 Seeing the economics of the way the ski companies worked 1:09:56.320 --> 1:10:01.320 and the challenging aspects of the construction method was kind 1:10:01.360 --> 1:10:07.320 of frustrating for me. It's pretty, it's pretty, it's pretty analogue, 1:10:07.840 --> 1:10:09.920 and they're sort of stuck in a lot of ways. 1:10:10.000 --> 1:10:12.479 We didn't really change much in the ski world. We 1:10:12.600 --> 1:10:16.000 were changing skis all the time, prototyping, but just watching 1:10:16.080 --> 1:10:18.320 what was happening in the consumer market and then sort 1:10:18.320 --> 1:10:22.080 of understanding the business model of you know, those companies 1:10:22.120 --> 1:10:25.680 as I was with them. It was it seemed really 1:10:25.760 --> 1:10:27.639 unlikely that I would go into the hard goods side 1:10:27.680 --> 1:10:29.439 of the business. I know Andy felt the same way. 1:10:29.520 --> 1:10:33.040 We both kind of came into this as skeptics or contrarians, 1:10:34.200 --> 1:10:36.200 but as we dove into it a little bit more. 1:10:36.280 --> 1:10:39.320 I mean, I always wanted to bring better skis to 1:10:39.479 --> 1:10:42.880 the consumer market. There's a big gap between World Cup 1:10:42.960 --> 1:10:45.439 skis and the rest and World Cup skis, granted, are 1:10:45.560 --> 1:10:49.640 specifically designed for racing and hard snow, really smooth, you know, 1:10:49.800 --> 1:10:54.600 perfectly prepared hills, which obviously wouldn't apply as well to 1:10:54.840 --> 1:10:57.920 your consumer, just because the hill's always a little messed up, 1:10:58.000 --> 1:10:58.479 puffs the. 1:10:58.439 --> 1:11:01.679 Snow and nothing as manicured like we get in World Cup. 1:11:01.720 --> 1:11:05.040 But my goal was to bring really good skis to 1:11:05.120 --> 1:11:08.439 the market. And then as I sort of Andy and 1:11:08.479 --> 1:11:10.360 I evolved through this, I had a connection with a 1:11:10.400 --> 1:11:13.920 company in Germany, a good friend of mine, and I'd 1:11:13.920 --> 1:11:17.760 always wanted to sort of modernize the manufacturing process, and 1:11:17.840 --> 1:11:19.760 I think I don't know that Andy and I would 1:11:19.760 --> 1:11:21.560 have done it had we just had the model of 1:11:21.640 --> 1:11:23.360 doing what we're doing right now, which is, you know, 1:11:23.600 --> 1:11:26.759 building skis and selling them direct consumer. It's a fine business, 1:11:26.840 --> 1:11:29.920 but it's the scalability is a little bit problematic in 1:11:30.080 --> 1:11:34.160 this case. The real sort of enticing part was re 1:11:34.320 --> 1:11:37.840 engineering the manufacturing process so that instead of forty five 1:11:37.880 --> 1:11:40.400 minutes to build a ski and it's glue and they 1:11:40.760 --> 1:11:42.960 you know, for those of you who don't know, it's 1:11:42.960 --> 1:11:45.800 a bit like making a sandwich. They call it a 1:11:45.840 --> 1:11:48.360 sandwich construction. It's a lot of different layers laid up 1:11:48.400 --> 1:11:51.080 with blue or pore impregnated with blue, and then you 1:11:51.280 --> 1:11:53.960 compress it and cook it in a press. It takes 1:11:54.000 --> 1:11:58.120 about forty minutes or so right now, which is why 1:11:58.800 --> 1:12:01.920 they've been building skis for next winter already right now, 1:12:02.040 --> 1:12:04.280 because that's how long it takes to build a million 1:12:04.320 --> 1:12:05.160 pairs of ski set. 1:12:05.680 --> 1:12:08.160 And we have a manufacturing process that. 1:12:08.200 --> 1:12:11.280 We're in the in the in the works on where 1:12:11.360 --> 1:12:14.000 we can build a ski in somewhere around ten seconds 1:12:14.160 --> 1:12:16.439 and no blue, so we'll be able to recycle it 1:12:17.240 --> 1:12:19.200 the same machine that it constructs it will take it 1:12:19.240 --> 1:12:22.240 apart and we can retask those materials. So well, that 1:12:22.439 --> 1:12:24.280 was the part that really got us excited. That was 1:12:24.320 --> 1:12:26.160 sort of the why of doing this. 1:12:26.240 --> 1:12:28.000 I want to talk we'll talk, Yeah, I want to 1:12:28.040 --> 1:12:28.600 talk more about that. 1:12:28.640 --> 1:12:30.760 But I hopefully that's what that's where the home run is. 1:12:31.120 --> 1:12:33.160 I want to bring in Andy Worth here because he's 1:12:33.240 --> 1:12:36.400 a many your veteran of the ski industry, having run 1:12:36.520 --> 1:12:40.040 some huge mountains here in the US Squad Valley for 1:12:40.280 --> 1:12:45.000 many years, worked at Interest before that. Andy, U talk 1:12:45.040 --> 1:12:48.040 about the business here and the financing of this. It's 1:12:48.080 --> 1:12:50.800 a little confusing to me about who the investors are 1:12:50.960 --> 1:12:54.040 and who you raised money from and how much money 1:12:54.040 --> 1:12:55.960 you've raised. So give us the details on the business 1:12:56.000 --> 1:12:58.800 side here, and you know the reception that you've gotten 1:12:58.840 --> 1:13:00.240 from as you go out and try to raise money 1:13:00.280 --> 1:13:00.439 for this. 1:13:00.800 --> 1:13:02.439 Thank you very much for that lead. But I didn't 1:13:02.479 --> 1:13:04.120 I should have thought you guys were going to refer 1:13:04.200 --> 1:13:07.160 to Gordy's article on us. We were recipients of that 1:13:07.280 --> 1:13:11.200 in November pleasantly and certainly a respected writer and certainly 1:13:11.200 --> 1:13:14.200 writing for Bloomberg. That's a great lead out relative to 1:13:14.240 --> 1:13:16.760 the business. As Body and I Body mentioned, we were 1:13:16.800 --> 1:13:18.720 both retired about four years ago. I worked in the 1:13:18.760 --> 1:13:21.040 private equity world and also running a bunch of ski resorts. 1:13:21.040 --> 1:13:26.639 As you know, we came out this business with ventrarian approaches. 1:13:26.680 --> 1:13:30.920 The understatement skeptical in many ways. But after doing a 1:13:31.200 --> 1:13:33.720 great deal of research and realizing that what body had 1:13:33.800 --> 1:13:37.120 in his mind was something that could provide an exceptional product, 1:13:37.320 --> 1:13:40.000 new type of product to the market. And we had 1:13:40.000 --> 1:13:42.760 these strategic initiatives on which we were working and we 1:13:42.840 --> 1:13:45.960 commenced building the company, standing it up so to speak, 1:13:46.160 --> 1:13:49.120 and launched in April last year. And Tom, to your point, 1:13:49.600 --> 1:13:52.519 we had established an initial pre cash valuation based on 1:13:53.000 --> 1:13:57.559 pro forma EBITDA on a three year basis and pretty 1:13:57.600 --> 1:14:00.200 contemporary multiples from what I was able to glean from 1:14:00.240 --> 1:14:04.439 other companies. That pre cash valuation was thirteen million small company. 1:14:05.400 --> 1:14:09.400 And then we raised completed eight million dollars raised about 1:14:09.880 --> 1:14:13.120 gosh three four months ago, so postcash twenty one and 1:14:13.240 --> 1:14:17.479 in this case we're currently raising funds through Republic Capital. 1:14:17.880 --> 1:14:21.439 This is crowdfunding, basically a safe note, and it has 1:14:21.479 --> 1:14:25.000 our enterprise value at thirty five million. The reason being, Tom, 1:14:25.120 --> 1:14:28.000 is the we have a clear line of sight now 1:14:28.040 --> 1:14:30.519 on these strategic initiatives. The core of the business are 1:14:30.560 --> 1:14:34.799 the skis and that's what prompted and supports that initial 1:14:34.840 --> 1:14:39.000 fund raising effort and the valuations to which I mentioned 1:14:39.920 --> 1:14:43.240 that I referred to. In this case, we're starting to 1:14:43.280 --> 1:14:45.920 get a clean line of sight on the three strategic initiatives, 1:14:46.320 --> 1:14:51.000 which include technology integration. It's extreme innovation across all levels. 1:14:51.080 --> 1:14:55.480 But technology integration through peak Locate, which is this proprietary 1:14:55.520 --> 1:14:57.120 device we're inserting in the skis Wait. 1:14:57.120 --> 1:14:57.439 Wait, so. 1:14:59.400 --> 1:14:59.960 We're bloomber. 1:15:00.040 --> 1:15:01.800 So we get a little wonky about the financial side 1:15:01.800 --> 1:15:04.320 of it. So it's interesting, So do you guys continue 1:15:04.360 --> 1:15:07.760 along these ways? Is there venture capital money also in it? 1:15:07.920 --> 1:15:09.439 Is the goal to eventually go public? 1:15:09.560 --> 1:15:11.720 Like, how do you think about it? 1:15:11.880 --> 1:15:16.800 Andy, Yeah, No, A great question, of course, and not 1:15:16.880 --> 1:15:20.120 surprisingly on this format. But I think really we're focused 1:15:20.160 --> 1:15:23.080 on right now is advancing on these strategic initiatives, and 1:15:23.240 --> 1:15:27.120 then lessons learned in other acquisition environments in my old 1:15:27.240 --> 1:15:30.880 career is We're going to advance on these initiatives and 1:15:30.960 --> 1:15:32.759 I can get to the point where we can generate 1:15:32.880 --> 1:15:36.479 substantial value for our current investors and investors coming in 1:15:36.560 --> 1:15:41.240 through republic. In this mechanism, we don't have a you 1:15:41.360 --> 1:15:43.760 can't speak to any exit strategy because we're focused on 1:15:43.800 --> 1:15:46.080 an execution right now. Yeah, but we know that we 1:15:46.200 --> 1:15:48.679 can take the value of the business right now thirty 1:15:48.720 --> 1:15:50.519 five million up substantially from here. 1:15:50.600 --> 1:15:52.280 Well, it's interesting, but it come on back in because 1:15:52.280 --> 1:15:54.479 Tim and I were talking when we were prepping for this, 1:15:54.560 --> 1:15:57.320 because Tim's a ski are really into this. Were you 1:15:57.439 --> 1:16:00.720 guys profitable, Like it can be hard to go up 1:16:01.200 --> 1:16:03.560 against the establishment, and you learned a lot about the 1:16:03.680 --> 1:16:07.439 industry and the mechanics and kind of I love what 1:16:07.520 --> 1:16:10.280 you said the economics of the way ski companies work. 1:16:10.280 --> 1:16:12.600 You probably learned a lot about it, which can be 1:16:13.240 --> 1:16:15.840 tough to go against though. Also so I'm just curious, 1:16:15.840 --> 1:16:17.600 were you guys profitable in the first year? I mean, 1:16:17.640 --> 1:16:19.360 how are you looking for about it? And we've got 1:16:19.360 --> 1:16:20.720 about a minute then we're going to come back and 1:16:20.760 --> 1:16:21.280 talk some more. 1:16:21.680 --> 1:16:24.120 Okay, go ahead. 1:16:24.439 --> 1:16:27.360 The typical sales channel that everyone's locked into is really 1:16:27.400 --> 1:16:29.760 the problem. So Andy and I addressed that by going 1:16:29.880 --> 1:16:36.160 direct consumer profitability. We ended up not being profitable year one, 1:16:36.400 --> 1:16:41.320 which was frustrating, but also given the nature of startups, 1:16:41.520 --> 1:16:44.559 was not terribly surprising. But the margins are really good 1:16:44.680 --> 1:16:46.960 when you sell direct. Obviously, the margins are much better. 1:16:47.000 --> 1:16:49.000 You don't have to sell two hundred thousand pairs of 1:16:49.040 --> 1:16:52.960 skis to be breaking even. So I mean, Andy, I'll 1:16:53.000 --> 1:16:56.120 let you fill in, but the really positive stuff we 1:16:56.160 --> 1:16:58.280 took out a year one outweighed the fact that we 1:16:58.439 --> 1:17:01.680 had some quality control issues and just I guess you'd call. 1:17:01.680 --> 1:17:02.439 Him growing days. 1:17:03.280 --> 1:17:05.679 Well, and hang on for a second, because we're gonna 1:17:05.680 --> 1:17:07.599 we've got to do some news and we don't want 1:17:07.600 --> 1:17:09.360 you to get cut off, so we're going to continue 1:17:09.400 --> 1:17:11.599 this and get you to weigh in on that aspect 1:17:11.640 --> 1:17:12.120 of the business. 1:17:12.120 --> 1:17:12.680 When we come back. 1:17:12.680 --> 1:17:15.560 We're talking with Andy Wirth and Body Miller, as we 1:17:15.600 --> 1:17:18.799 said of the Peak Ski Company co founders. Andy also CEO, 1:17:19.000 --> 1:17:22.200 Body also chief innovation officer. And there was a great 1:17:22.360 --> 1:17:24.360 story that was written by Bloomberg business Week that really 1:17:24.360 --> 1:17:27.880 gives you details about what they set out to do, 1:17:28.040 --> 1:17:30.200 what Body set out to do, and it is interesting. 1:17:30.280 --> 1:17:32.160 I love when you know he obviously has learned a 1:17:32.200 --> 1:17:35.160 lot about the business and how they were doing it, 1:17:35.240 --> 1:17:37.479 and just this idea of being able to manufacture much 1:17:37.520 --> 1:17:40.080 more quickly changes the mathematical business. 1:17:40.200 --> 1:17:43.000 And also what skis worked for him when he was young, 1:17:43.080 --> 1:17:45.200 when he was racing. So we'll get into all that. 1:17:45.520 --> 1:17:48.000 Let's get right back to Andy Wirth, CEO and president 1:17:48.080 --> 1:17:50.679 of Peak Ski Company, and Body Miller, Olympic and World 1:17:50.760 --> 1:17:54.240 Championship gold medalist and the chief innovation officer at Peak 1:17:54.400 --> 1:17:57.280 Ski Company. They join us on Zoom from Montana. Buddy, 1:17:57.280 --> 1:17:58.760 I want to go back to you because I was 1:17:58.760 --> 1:18:00.760 struck when you said after the first year you were 1:18:00.800 --> 1:18:05.120 frustrated about not being profitable. But I mean, it's really 1:18:05.200 --> 1:18:07.320 tough for a startup, and I think the expectation to 1:18:07.680 --> 1:18:09.879 actually be profitable after one year. I mean, look at Amazon, 1:18:10.200 --> 1:18:13.200 for example, it took more than a decade to regularly 1:18:13.280 --> 1:18:16.320 become profitable quarter after quarter. Why were you expecting to 1:18:16.360 --> 1:18:17.599 be profitable after the first year. 1:18:18.320 --> 1:18:18.720 I'd sort of. 1:18:18.760 --> 1:18:21.880 Touched on the margins, the margins if we'd you know, 1:18:22.040 --> 1:18:24.840 that we didn't model out quite a bit. Andy's a 1:18:24.920 --> 1:18:27.320 bit of a quant and you know, I always like 1:18:27.400 --> 1:18:30.840 to to sort of use all of our experience and 1:18:30.920 --> 1:18:32.760 knowledge it and feel like either of us were very 1:18:32.880 --> 1:18:33.800 naive coming into this. 1:18:34.400 --> 1:18:37.160 But the margins on our on our product are good, 1:18:37.240 --> 1:18:37.880 and we're. 1:18:38.000 --> 1:18:40.840 Selling right in kind of the sweet spot of where 1:18:41.040 --> 1:18:44.759 you know, they typically net out for a high quality, 1:18:45.000 --> 1:18:49.000 you know, small handmade ski company. But the challenge was 1:18:49.240 --> 1:18:51.840 was quality control. It's just it's a byproduct of the 1:18:51.920 --> 1:18:56.479 manufacturing process itself. It's just very inexact. You're using materials 1:18:56.560 --> 1:18:59.040 that have variances to them, and the assembly process is 1:18:59.439 --> 1:19:03.360 pretty as I said, it's analog, and so there's us 1:19:03.439 --> 1:19:04.400 being direct consumer. 1:19:04.479 --> 1:19:06.000 We didn't feel like we had the. 1:19:07.720 --> 1:19:10.800 Latitude to give anything but perfect skis to people, so 1:19:10.880 --> 1:19:14.280 we ended up with a lot. I don't I think 1:19:14.320 --> 1:19:16.960 it was close to thirty percent of our inventory didn't 1:19:17.040 --> 1:19:22.639 pass the QC inspection of the manufacturer. So it wasn't 1:19:22.680 --> 1:19:25.000 enough snitpicking. It was just the reality and that that 1:19:25.240 --> 1:19:26.679 was way outside of our modeling. 1:19:26.920 --> 1:19:28.160 And you know, that was tough. 1:19:28.240 --> 1:19:30.800 But the great news is we sold. We sold through, 1:19:31.040 --> 1:19:33.800 you know, mid ninety percent of the inventory we had, 1:19:35.120 --> 1:19:37.920 which was basically, you know, above or right the ear 1:19:37.960 --> 1:19:40.360 where we projected. So all of our projections that we 1:19:40.400 --> 1:19:43.440 could control were good, and that would have led to profitability. 1:19:43.520 --> 1:19:45.680 The part that was the problem was we didn't have 1:19:45.840 --> 1:19:50.200 the inventory to sell to get our numbers. But you know, again, 1:19:50.280 --> 1:19:53.800 that's part of the inspiration or the drive to re 1:19:54.000 --> 1:19:59.799 engineer the manufacturing process because everybody wants better stuff, quicker, cheaper, 1:20:00.400 --> 1:20:03.679 and more precise, and that's we're sort of delivering. 1:20:03.840 --> 1:20:06.080 Hey, Andy, come on back in here, because you're building 1:20:06.120 --> 1:20:09.280 this business with Body. I'm wondering where else you can 1:20:09.360 --> 1:20:11.439 go here? Because I know you guys were talking about 1:20:11.600 --> 1:20:15.080 doing a Body Miller Ski academy. You end up pulling 1:20:15.120 --> 1:20:17.519 the plug on the Gramby Ranch location in Colorado back 1:20:17.560 --> 1:20:19.920 in twenty twenty two. Where else can you guys go 1:20:20.040 --> 1:20:20.840 as a partnership. 1:20:21.200 --> 1:20:23.400 Well, kind of the sky's a limit. As they say, 1:20:23.880 --> 1:20:26.920 we neither of us feel like retired guys nowadays. I 1:20:26.920 --> 1:20:30.320 can tell you that's for darn sure. We come at 1:20:30.479 --> 1:20:33.120 this business, in this effort with a great deal of 1:20:33.200 --> 1:20:36.479 passion for the outdoors the mountains, certainly from the ski industry. 1:20:36.520 --> 1:20:40.000 Different angles of attack, but similar ethos and way of 1:20:40.080 --> 1:20:42.840 approaching things. There's a couple of different ventures that we 1:20:42.960 --> 1:20:46.040 have that we're taking on and considering right now. All 1:20:46.120 --> 1:20:48.919 of our emphasis and focuses on Peak, and the primary 1:20:49.000 --> 1:20:51.200 reason being is coming back to this re engineering of 1:20:51.280 --> 1:20:54.200 the entire process by which skis are made that puts 1:20:54.280 --> 1:20:56.680 us in a position to be three four years down 1:20:56.720 --> 1:21:00.240 the road having our machinery process that we with a 1:21:00.280 --> 1:21:03.320 smile on our face, we call Treadstone because it is, 1:21:03.600 --> 1:21:06.880 you know, fairly confidential information that we're working with with 1:21:07.000 --> 1:21:09.920 this group in Germany. But nonetheless it's it's something that 1:21:10.200 --> 1:21:12.280 we anticipate be in a place where we can have 1:21:12.320 --> 1:21:15.120 thirty thirty five forty percent of the world's market share 1:21:15.160 --> 1:21:17.800 made on our machines and our process. And that is 1:21:17.960 --> 1:21:21.679 where when I mentioned value creation, that's where it comes 1:21:21.920 --> 1:21:22.439 into play. 1:21:22.560 --> 1:21:24.599 So does that mean Andy, you'll be making you guys 1:21:24.640 --> 1:21:28.480 will be making skis for other companies, other brands. 1:21:28.560 --> 1:21:32.120 Yes, ma'am. In fact, it might be interested to know 1:21:32.280 --> 1:21:34.839 my best effort at Yogi Bearism is the least important 1:21:34.880 --> 1:21:36.960 thing about our company or the skis, but they're critical, 1:21:37.000 --> 1:21:39.479 and the reason being the skis are critical. But at 1:21:39.479 --> 1:21:42.000 the same time, we're in this to the innovation for 1:21:42.080 --> 1:21:44.719 the innovation on so many different fronts, including the process. 1:21:44.920 --> 1:21:47.880 Right. So body, it's like becoming the Luxotica of skiing, right, Like, 1:21:48.040 --> 1:21:49.640 you don't care what the brand is, but if you 1:21:49.720 --> 1:21:52.679 can improve the process, that's okay. 1:21:53.240 --> 1:21:55.880 Or being like a what is it a founder talking about? 1:21:56.280 --> 1:21:59.400 Yeah, you're talking about really established companies. But the irony 1:21:59.520 --> 1:22:02.519 is besides it's attaching and incredible people. Andy and I 1:22:02.600 --> 1:22:05.320 are big fans of many of the companies that we're 1:22:05.320 --> 1:22:08.600 competing against, and in this way, We're not looking to 1:22:08.640 --> 1:22:12.040 steal market share from them, because at a certain point 1:22:12.080 --> 1:22:15.760 it becomes annoying to manage logistics. In this case, our 1:22:15.840 --> 1:22:20.080 goal is to have ten purchase orders and be delivering 1:22:20.280 --> 1:22:23.120 two million pairs of skis, and they advantage that. I 1:22:23.160 --> 1:22:25.640 think I don't see it stopping there, because we can 1:22:25.720 --> 1:22:28.360 deliver them for twenty or thirty or forty dollars less 1:22:28.400 --> 1:22:31.559 than they make them for themselves. Now, Plus they can 1:22:31.680 --> 1:22:34.920 divest of all their other sort of liabilities. Even though 1:22:34.920 --> 1:22:36.480 a lot of their equipment's amoritized. 1:22:36.920 --> 1:22:37.840 They're just they. 1:22:37.880 --> 1:22:40.400 Understand that there's a lot of fluff there, there's a 1:22:40.439 --> 1:22:42.599 lot of loss. 1:22:43.479 --> 1:22:45.439 We can we can clean that up as well as 1:22:45.479 --> 1:22:48.720 there's things like gray market skis that you know, there's 1:22:49.200 --> 1:22:51.040 a little bit of the inventory is out of control. 1:22:51.160 --> 1:22:53.200 So I think I don't see it stopping. 1:22:53.280 --> 1:22:55.320 I can't see a company saying, hey, build us these 1:22:55.360 --> 1:22:57.200 five hundred thousand pairs and we're going to build the 1:22:57.280 --> 1:23:00.679 other five hundred thousand for forty dollars more and deal 1:23:00.720 --> 1:23:01.920 with percent way. 1:23:02.000 --> 1:23:05.120 Yes, their accountenants or the whole financial team might say, 1:23:05.200 --> 1:23:08.320 oh wait, I mean let's talk about that, guys. The 1:23:08.400 --> 1:23:10.679 impact of climate change body and the lack of snow. 1:23:10.840 --> 1:23:13.400 How are you incorporating that risk and reality into your business? 1:23:13.439 --> 1:23:15.080 I mean, we've finally seen some snow here in New 1:23:15.120 --> 1:23:19.879 York City, but it's barely a sprinkling here. But innovating 1:23:19.920 --> 1:23:21.960 with the idea that more and more skiers maybe skiing 1:23:22.040 --> 1:23:23.800 on man made snow, how does that come into it? 1:23:23.840 --> 1:23:25.800 And body? We've got about thirty forty seconds here. 1:23:26.240 --> 1:23:29.160 Yeah, it's you know, it's just the reality that we're facing. 1:23:29.360 --> 1:23:33.000 I think the ski industry is remarkably healthy. You know, 1:23:33.360 --> 1:23:35.960 I don't think it's an immediate thing for the ski industry. 1:23:36.000 --> 1:23:38.760 I think it's certainly important that we'd be dealing with 1:23:38.840 --> 1:23:42.200 it and addressing it, and in our company, recyclability of 1:23:42.320 --> 1:23:45.400 the skis is a huge part of the technology we're 1:23:45.439 --> 1:23:47.960 working with as well. So, you know, I think I 1:23:48.040 --> 1:23:50.280 don't see it being a massive problem. But you are 1:23:50.360 --> 1:23:52.240 going to have years like this year where it's been 1:23:52.360 --> 1:23:54.200 really tough at the beginning of the season's been tough. 1:23:54.400 --> 1:23:57.599 But do you innovate differently body, Do you make different 1:23:57.600 --> 1:24:00.360 types of skis because of maybe more man made snow? 1:24:00.880 --> 1:24:03.120 No, not really, I mean you think a man made 1:24:03.160 --> 1:24:05.840 snow is on piece you know, and then there's off 1:24:05.880 --> 1:24:08.439 piece skis, and yes, the trend has been going much wider, 1:24:08.560 --> 1:24:10.960 so we certainly address that end of the market where 1:24:11.000 --> 1:24:15.080 it's on groomers on piece skis, but the reality is 1:24:15.120 --> 1:24:16.760 there's a huge demand across the board. 1:24:16.920 --> 1:24:19.280 Right, Hey, Andy, we got about thirty seconds left. I 1:24:19.320 --> 1:24:21.080 want to give you the last word here and just 1:24:21.200 --> 1:24:23.439 ask you what's top of mind as we begin the 1:24:23.520 --> 1:24:26.000 year here and you guys are trying to build this company. 1:24:26.360 --> 1:24:28.240 I appreciate that, Tim, and it got to augment with 1:24:28.360 --> 1:24:31.080 point here is that the climate change matter is something 1:24:31.120 --> 1:24:34.560 that's an exigent threat for us overall. And what we 1:24:34.760 --> 1:24:37.240 do is number one, we reduce our footprint. Number Two, 1:24:37.240 --> 1:24:39.840 we're doing everything we can with this process to actually 1:24:39.920 --> 1:24:42.920 localize where skis are made. And so that's a pretty 1:24:42.960 --> 1:24:47.240 substantial contribution in favor of that. But relative to Peak 1:24:47.280 --> 1:24:49.880 and what we're doing emphasize the fact that we have 1:24:50.000 --> 1:24:54.160 Body and he's got this brilliant mental level, creative mind 1:24:54.360 --> 1:24:57.280 that is unique. It's almost like Chuck Yeger working. It's 1:24:57.360 --> 1:25:00.799 Lucky Martin on the mock Capable airplane back in the forties. 1:25:01.120 --> 1:25:03.519 He's got this unique ability to be an engineer but 1:25:03.600 --> 1:25:06.400 at the same time put those well skid on snow 1:25:06.479 --> 1:25:08.519 that what enables us to take up this all over. 1:25:08.560 --> 1:25:09.240 The nice compliment. 1:25:09.560 --> 1:25:11.840 Very cool. Thank you guys for joining us. Andy Worth, 1:25:11.920 --> 1:25:14.240 CEO and President of Peak Ski Company and Body Miller, 1:25:14.439 --> 1:25:17.519 Olympic and World Championship gold medalist and Chief Innovation Officer 1:25:17.560 --> 1:25:18.120 at Peak Ski. 1:25:19.040 --> 1:25:22.559 You're listening to the Bloomberg Business Week podcast. Catch us 1:25:22.640 --> 1:25:25.960 live weekday afternoons from three to six Eastern Listen on 1:25:26.040 --> 1:25:30.040 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 1:25:30.400 --> 1:25:32.040 or watch us live on YouTube. 1:25:33.320 --> 1:25:35.599 But Carol, you remember y two k right? 1:25:35.840 --> 1:25:36.080 Really? 1:25:36.160 --> 1:25:36.320 Really? 1:25:36.360 --> 1:25:38.320 Heod We were actually working here at Bloomberg. 1:25:38.439 --> 1:25:39.920 Yeah, I think I just started. 1:25:41.160 --> 1:25:43.760 And one of the things that we were thinking about 1:25:43.840 --> 1:25:46.639 big time was what happens when we go from nineteen 1:25:46.720 --> 1:25:49.280 ninety nine to two thousand and Apparently that can be 1:25:49.479 --> 1:25:55.560 somewhat difficult, sophisticated, complicated when it comes to technology and 1:25:55.680 --> 1:25:56.599 computing devices. 1:25:56.680 --> 1:25:57.439 Like what does that mean? 1:25:57.560 --> 1:25:57.640 Right? 1:25:57.720 --> 1:26:00.120 You go from a year that you specified by with 1:26:00.160 --> 1:26:02.000 two digits to office and you really needed all four? 1:26:02.560 --> 1:26:02.760 Yes? 1:26:02.800 --> 1:26:04.000 Hey, can I just tell you that. 1:26:04.120 --> 1:26:06.760 We were all of us in the news team. We 1:26:06.880 --> 1:26:10.200 went home We were given walkie talkies and everything because 1:26:10.200 --> 1:26:11.760 we thought in case the phones don't work, and we 1:26:11.840 --> 1:26:14.679 had to be ready for when in I guess Asia, 1:26:14.720 --> 1:26:17.880 or whenever it struck two thousand around the globe first 1:26:18.320 --> 1:26:20.040 for like the world to come undone, and I got 1:26:20.160 --> 1:26:22.240 to sell un like I remember, like we're waiting, We're waiting. 1:26:22.560 --> 1:26:23.360 Nothing happened. 1:26:23.560 --> 1:26:25.880 Nothing happened. Well, a new HBO documentary it takes us 1:26:26.040 --> 1:26:29.040 back to that time. It's called time Bomb y two K. 1:26:29.720 --> 1:26:30.439 Why two K? 1:26:31.000 --> 1:26:34.400 Whyks agreed using two digits rather than four made good 1:26:34.520 --> 1:26:35.600 economic sense, But. 1:26:35.720 --> 1:26:38.360 When workers advanced clocks to the year two thousand, the 1:26:38.439 --> 1:26:39.479 world could melt down. 1:26:41.400 --> 1:26:42.439 Our systems are broken. 1:26:42.680 --> 1:26:44.519 We've got a problem with a couple of digits. 1:26:45.360 --> 1:26:46.040 This has to be. 1:26:46.120 --> 1:26:49.200 Solved, all right. That was a clip just from time 1:26:49.280 --> 1:26:53.080 Bomb y two K, new documentary on HBO taking us 1:26:53.120 --> 1:26:56.560 back to the years ahead of Y two K and 1:26:56.640 --> 1:26:59.759 all the chaos and prepping and fears about power grids, 1:26:59.760 --> 1:27:02.920 family nuclear arsenals being at risks, planes falling out of 1:27:02.960 --> 1:27:06.080 the sky. People were very worried. Carol Well, Brian Becker, 1:27:06.160 --> 1:27:09.719 and Marley MacDonald are the documentary filmmakers and producers behind 1:27:09.880 --> 1:27:12.360 time bomb y two K. They join us on Zoom 1:27:12.800 --> 1:27:15.599 from New York. Good to have you both with us 1:27:15.720 --> 1:27:19.439 this afternoon, Brian, I want to start with you, why 1:27:19.560 --> 1:27:23.760 make a documentary about Y two K? Twenty four years later? 1:27:24.400 --> 1:27:29.160 So, when Marlee and I first thought of this idea 1:27:29.560 --> 1:27:32.479 and started looking into it, it was the summer of 1:27:32.520 --> 1:27:36.080 twenty twenty, and the first images you see when you 1:27:36.200 --> 1:27:41.719 google back y TK are shots of empty grocery store 1:27:41.840 --> 1:27:48.679 shelves and people checking out pallettes of water and toilet 1:27:48.760 --> 1:27:51.920 paper at the supermarket, and people in line at the 1:27:52.000 --> 1:27:58.040 gun store. And those images felt awfully familiar to us, 1:27:58.240 --> 1:28:01.840 as given the reality we were living through in the 1:28:01.960 --> 1:28:05.600 depths of the pandemic. We knew there was a countdown, 1:28:06.200 --> 1:28:11.400 We knew from our research that there was extensive footage 1:28:11.439 --> 1:28:15.240 and media coverage of the event, and kind of living 1:28:15.320 --> 1:28:18.479 in that moment of the pandemic made us realize that 1:28:19.360 --> 1:28:21.439 it wasn't just a countdown. It wasn't just something that 1:28:21.520 --> 1:28:23.479 we lived through and then had mostly forgotten about. It 1:28:23.600 --> 1:28:26.719 also had we thought lessons for our present moment. 1:28:26.920 --> 1:28:29.400 Well, I gotta say, Marley, I just remember doing interviews, 1:28:30.320 --> 1:28:33.759 you know, leading up to it. In every conversation certainly 1:28:33.760 --> 1:28:35.559 if it was even just a general market and interview, 1:28:35.600 --> 1:28:37.439 it was like, okay, so how are you guys planning 1:28:37.479 --> 1:28:39.840 for Y two K? And concerns that you know, if 1:28:39.840 --> 1:28:42.439 things come undone and you know we can't track investments 1:28:42.520 --> 1:28:45.400 or market stone, you know, work properly. Having said that, 1:28:45.520 --> 1:28:48.160 when you and Brian went to pitch this, where people like, wait, wait, 1:28:48.360 --> 1:28:49.200 what was Y two K? 1:28:49.360 --> 1:28:50.639 Because it's a long. 1:28:50.560 --> 1:28:55.640 Time ago, definitely, well, everyone who lived through it remembers it, 1:28:55.840 --> 1:28:58.639 which definitely works in our favor when pitching this around 1:28:58.920 --> 1:29:01.679 and was a really actual part of making this project. 1:29:01.720 --> 1:29:03.679 When you tell someone you're working on a movie about 1:29:03.720 --> 1:29:06.320 Why Duke, everyone has to tell you what they were 1:29:06.360 --> 1:29:08.120 doing New Year's Eve nineteen ninety nine. 1:29:08.640 --> 1:29:10.439 But I just tell you one of my producers I think, 1:29:10.520 --> 1:29:14.120 was in kindergarten, so that kind of like at home. Anyway, 1:29:14.200 --> 1:29:16.520 continue please, Yeah, Brian. 1:29:16.280 --> 1:29:19.080 And I became historians of what everyone was doing on 1:29:19.160 --> 1:29:21.599 New Year's Eve nineteen ninety nine. But when we first 1:29:21.600 --> 1:29:24.040 started looking into the project, you know, the first question 1:29:24.160 --> 1:29:27.360 that comes up is was this a joker? Was this real? 1:29:27.880 --> 1:29:30.040 And you know a lot of people remember why cho 1:29:30.120 --> 1:29:32.160 K as a hoax? And it took us months of 1:29:32.240 --> 1:29:34.760 research to come to the conclusion that it was a 1:29:34.960 --> 1:29:38.080 very real problem that was solved. And we did that 1:29:38.200 --> 1:29:40.760 by talking to a lot of computer programmers and talking 1:29:40.800 --> 1:29:42.760 to a lot of people who actually worked. 1:29:42.520 --> 1:29:43.120 On the issue. 1:29:43.760 --> 1:29:46.760 And so we knew we could kind of reclaim this 1:29:47.040 --> 1:29:50.599 narrative in this movie and shine a light on all 1:29:50.680 --> 1:29:53.000 the work and labor that went into actually fixing this 1:29:53.200 --> 1:29:54.000 very real problem. 1:29:54.280 --> 1:29:57.599 Mart Marley, can you talk about the style here? I enjoyed, 1:29:57.720 --> 1:30:00.479 I enjoyed the film, but I was so prize to 1:30:00.560 --> 1:30:03.720 see the way that the documentary was structured in the 1:30:03.840 --> 1:30:08.320 sense that there's no narrator, and it's nobody looking back 1:30:08.439 --> 1:30:13.080 or remembering, or there are no recollections. It's purely based 1:30:13.200 --> 1:30:18.200 on archival footage on videos that were sold at the time. 1:30:18.840 --> 1:30:22.719 News reports, home videos talk a little bit about building 1:30:22.760 --> 1:30:23.479 it in that sense. 1:30:24.840 --> 1:30:26.800 Yeah, So we knew we wanted to do it all 1:30:26.960 --> 1:30:32.759 archival from the jump, because one, there was just enough footage. 1:30:32.840 --> 1:30:35.320 There was a lot of footage, and when we first 1:30:35.320 --> 1:30:38.200 started working with the material, we realized that, you know, 1:30:38.320 --> 1:30:41.040 everything was sort of there, and that if we kept 1:30:41.080 --> 1:30:44.120 it in the world of all archival, we could really 1:30:44.360 --> 1:30:47.639 kind of make this countdown feel more present, tense, feel 1:30:47.760 --> 1:30:50.920 like a time capsule of that actual moment. And Brian 1:30:51.160 --> 1:30:54.080 is an archival producer and found you know, along with 1:30:54.160 --> 1:30:56.479 our team all of that footage. We ended up with 1:30:56.600 --> 1:30:59.400 over seven hundred hours of footage, And as far as 1:30:59.479 --> 1:31:01.519 the structure of the film goes, we knew that we 1:31:01.640 --> 1:31:03.960 wanted to sort of replicate the way that Y two 1:31:04.040 --> 1:31:06.679 K worked in the world. So starting with the technical 1:31:06.760 --> 1:31:10.080 problem watching it sort of radiate out of cubicles and 1:31:10.200 --> 1:31:14.519 into the social consciousness, and then follow that to sort 1:31:14.520 --> 1:31:17.280 of the fringes of America, And we knew we had 1:31:17.320 --> 1:31:18.040 to get to midnight. 1:31:18.080 --> 1:31:19.920 At some point as you went through the footage and 1:31:19.960 --> 1:31:22.000 you guys were gathering at Brian, I mean, what was 1:31:22.040 --> 1:31:23.599 it that kind of jumped out? Was there certain things 1:31:23.600 --> 1:31:25.280 that like, oh my god, Like it was just kind 1:31:25.280 --> 1:31:28.800 of interesting because there was real nervousness about how there's 1:31:28.840 --> 1:31:29.439 my play out? 1:31:29.840 --> 1:31:33.400 Yeah, I mean there's a certain attraction always to footage 1:31:33.640 --> 1:31:37.240 that is kind of unbelievable to watch in the present, 1:31:37.520 --> 1:31:42.479 whether it be you know, a tape made by a militia. 1:31:43.520 --> 1:31:45.320 Titled why to K? 1:31:45.520 --> 1:31:47.599 Why Should I Care? I don't even on a computer. 1:31:48.080 --> 1:31:51.280 But I think what we really started looking for most 1:31:51.280 --> 1:31:55.360 specifically in the footage were moments that could clearly tether 1:31:55.560 --> 1:32:01.160 us from present to past, because we didn't include interviews 1:32:01.240 --> 1:32:04.080 with individuals in the present day. We were looking for 1:32:04.320 --> 1:32:08.839 kind of moments of emotion or introspection or relevance between 1:32:09.040 --> 1:32:12.800 them and now. But of course, you know, when Matt 1:32:12.880 --> 1:32:17.880 Damon is recorded speaking about the nuclear arsenal and his 1:32:18.040 --> 1:32:22.040 fear of the nuclear arsenal potentially shutting down, you kind 1:32:22.080 --> 1:32:24.439 of have to also include things like that in. 1:32:24.479 --> 1:32:26.880 Your movie, A very young Matt Damon promoting at the 1:32:26.920 --> 1:32:30.679 time the talented mister Ripley. I should note, Hey, Brian, 1:32:31.479 --> 1:32:33.360 did you hear have you heard from any of these 1:32:33.439 --> 1:32:37.320 folks who were featured in this Yes. 1:32:37.360 --> 1:32:41.200 Thanks for asking that we actually have relationships with all 1:32:41.520 --> 1:32:44.440 of the individuals who we built scenes. 1:32:44.120 --> 1:32:45.759 Around in this film. 1:32:45.840 --> 1:32:50.360 It didn't feel fair for us to include their historic 1:32:50.800 --> 1:32:55.479 likenesses in our feature without talking to them first to 1:32:55.600 --> 1:33:00.120 gauge what Y t U K meant to them. So, 1:33:00.360 --> 1:33:04.639 for example, Peter Diager, who is one of the first 1:33:04.720 --> 1:33:07.920 individuals who kind of brought White TK to the public's attention. 1:33:08.640 --> 1:33:12.679 I spent two days in his basement with him outside 1:33:12.720 --> 1:33:17.160 of Toronto. He just published a new book focused on 1:33:17.560 --> 1:33:21.800 computer management. And we just appeared on Peter's podcast about 1:33:21.920 --> 1:33:26.280 y TUK, which I can plug here. Candace Turner, who 1:33:26.320 --> 1:33:29.479 in the film calls herself Farmer Jane. I emailed with 1:33:29.680 --> 1:33:33.719 Candace this morning and I went to her farm in Sarcoxi, Missouri. 1:33:34.640 --> 1:33:39.080 She moved there or she lived there in events in 1:33:39.160 --> 1:33:41.080 the lead up to y TK, and she still lives 1:33:41.080 --> 1:33:43.120 on that very same farm. I went to her mud 1:33:43.240 --> 1:33:46.519 room and came back to New York with some VH 1:33:46.680 --> 1:33:51.120 tape VHS tapes of hers toscin ins in d C. 1:33:51.320 --> 1:33:53.519 So we do have relationships with these people. 1:33:53.680 --> 1:33:56.040 You know, it's interesting, Brian and Marley that it's been 1:33:56.080 --> 1:33:59.800 a week where Tim and I have been talking a 1:33:59.840 --> 1:34:01.600 lot about the risks. 1:34:01.320 --> 1:34:02.160 In twenty twenty four. 1:34:02.200 --> 1:34:03.600 We certainly did at the end of last year and 1:34:03.600 --> 1:34:06.800 into the new year, but this week, you know, some 1:34:06.920 --> 1:34:10.960 of the concerns were big time. The November elections and 1:34:11.040 --> 1:34:15.560 basically the US against itself geopolitics certainly came up, and 1:34:16.080 --> 1:34:19.760 it made Tim and I think about how your documentary 1:34:19.840 --> 1:34:23.200 kind of ends up. We're essentially just before midnight in 1:34:23.240 --> 1:34:28.519 the US December thirty first, nineteen ninety nine. You have 1:34:28.640 --> 1:34:35.320 Boris Yeltsin, right, conceding power to Vladimir Putin, who would 1:34:35.320 --> 1:34:38.960 take over to lead what was then what the Soviet Union, Right. 1:34:40.920 --> 1:34:43.479 It was just Russia. Yeah, and there's this ominous sort 1:34:43.520 --> 1:34:45.880 of moment from the newscaster that says, you know, Putin 1:34:46.000 --> 1:34:49.479 wants this to be a strong Russia, but has no 1:34:49.600 --> 1:34:52.719 ambitions beyond like for expansion and to get bigger. 1:34:52.840 --> 1:34:55.439 Here we are twenty four years later, and we know 1:34:55.520 --> 1:34:56.360 that that's very different. 1:34:56.400 --> 1:34:58.439 But I do wonder how you guys are thinking about 1:34:58.479 --> 1:35:01.639 having gone through this process, about some of the risks 1:35:02.120 --> 1:35:05.479 and the concerns that are out there today, and coming 1:35:05.479 --> 1:35:08.160 off a global pandemic that really made us all realize 1:35:08.320 --> 1:35:12.400 whoa our life can change dramatically, and our lives are 1:35:12.479 --> 1:35:13.000 at risk. 1:35:14.520 --> 1:35:17.040 Yeah, you know, it's an interesting thing. So our movie 1:35:17.120 --> 1:35:20.320 actually premiered at a festival last March, and during the 1:35:20.400 --> 1:35:22.479 Q and a's at that time, a lot of the 1:35:22.600 --> 1:35:25.720 questions were relating our film to COVID. Then sometime over 1:35:25.800 --> 1:35:28.519 the summer, the question started to become about the threat 1:35:28.600 --> 1:35:32.840 of AI, and so it's interesting to kind of see how. 1:35:32.760 --> 1:35:35.160 This movie moves through the world as. 1:35:35.160 --> 1:35:39.040 It continues, you know, going through different existential threats, and 1:35:39.120 --> 1:35:40.960 that's I think what we wanted to do with this 1:35:41.080 --> 1:35:45.120 film is really examined the ways in which America faces 1:35:45.360 --> 1:35:50.640 existential threats and kind of the focus on how interconnected 1:35:50.800 --> 1:35:54.400 and dependent we are on each other and really highlighting 1:35:54.479 --> 1:35:57.880 that aspect of getting through things like Y two K or. 1:35:58.040 --> 1:36:03.360 COVID time, I think that we collectively go through an 1:36:03.400 --> 1:36:08.480 experience that will somehow bring us closer together as citizens. 1:36:08.880 --> 1:36:11.400 I turn out to be wrong. I felt this way 1:36:11.479 --> 1:36:13.600 during COVID. That's sort of like everybody was in this 1:36:13.680 --> 1:36:15.720 together and it would be in this uniting force. And 1:36:16.320 --> 1:36:18.400 I look at the landscape right now, Brian, and I 1:36:18.479 --> 1:36:21.720 think that we've never been more divided ever than we 1:36:21.840 --> 1:36:22.519 have been right now. 1:36:23.240 --> 1:36:27.679 I feel the same too, Tim. Why two K almost 1:36:27.720 --> 1:36:32.840 feels like this dry run in which we actually did 1:36:32.960 --> 1:36:35.680 succeed in solving a problem and then, of course, in 1:36:35.880 --> 1:36:40.000 very American fashion, quickly dismissed it as a joke or 1:36:40.080 --> 1:36:43.160 as a hoax after we went through it. It almost 1:36:43.360 --> 1:36:46.600 feels as if we worked on it so well and 1:36:46.840 --> 1:36:50.519 solved it to an extent that we would have learned 1:36:50.680 --> 1:36:54.080 more if more things went wrong after the clockstruck midnight 1:36:54.120 --> 1:36:57.720 on New Year's Eve nineteen ninety nine. Instead, we kind 1:36:57.720 --> 1:37:00.439 of missed this opportunity to think so much about how 1:37:00.479 --> 1:37:04.439 our lives had come to depend upon technology and also 1:37:04.960 --> 1:37:06.200 on each other to an extent. 1:37:06.720 --> 1:37:08.519 You know, it's kind of interesting on a day where 1:37:09.880 --> 1:37:15.320 safe to say, we all got fooled about the approval 1:37:15.360 --> 1:37:19.479 by the SEC of a spot bitcoin etf where a 1:37:19.560 --> 1:37:24.040 headline crossed on Twitter from the official SEC account, and 1:37:24.120 --> 1:37:26.760 then ten minutes later the chair of the SEC comes 1:37:26.760 --> 1:37:29.160 out and said, Nope, that's not correct. They have not 1:37:29.280 --> 1:37:34.240 received approval and that the SEC Twitter account was compromised. 1:37:34.439 --> 1:37:39.400 You just realize how quickly and how vulnerable we are 1:37:39.840 --> 1:37:43.560 and reliant on technology, and how things can be misconstrued, 1:37:43.680 --> 1:37:45.720 got wrong, and you just, I don't know, when you 1:37:45.760 --> 1:37:47.840 start to extrapolate that, you just wonder kind of tim 1:37:47.920 --> 1:37:48.760 where we could go with this. 1:37:49.080 --> 1:37:51.400 Yeah, and also, you know, it was so interesting to 1:37:51.439 --> 1:37:53.479 see that the way technology is shifted, and you know, 1:37:53.520 --> 1:37:56.799 it's been a quarter century roughly since this time period, 1:37:56.880 --> 1:38:00.280 but the technology shifts that we've seen have been absolutely massive. Yeah, 1:38:00.560 --> 1:38:03.920 Marley at also Alliance, Yeah, Alliance is, and it's and 1:38:04.560 --> 1:38:07.680 there's this picture. There's a picture painted Marley in the 1:38:07.720 --> 1:38:11.320 nineteen nineties about the optimism about technology. And I'm wondering 1:38:11.479 --> 1:38:14.600 if you think that the optimism that these folks in 1:38:14.640 --> 1:38:17.880 the nineties talked about and alluded to about school children 1:38:17.920 --> 1:38:20.800 being able to access information at any time has actually 1:38:20.920 --> 1:38:25.080 manifested in something that looks optimistic or looks, you know, scary. 1:38:25.120 --> 1:38:28.040 I mean, there's there's talk about parents being concerned about TikTok, 1:38:28.120 --> 1:38:31.000 mental health and social media, government control of this stuff. 1:38:31.120 --> 1:38:32.160 I mean, what are your thoughts there? 1:38:32.560 --> 1:38:36.000 Certainly I'm I'm very concerned with the state of our 1:38:36.040 --> 1:38:39.080 relationship to technology, and I think that was something that 1:38:39.160 --> 1:38:42.160 we really wanted to sort of capture that techno optimism 1:38:42.280 --> 1:38:44.800 of the nineties in our film. You know, this was 1:38:44.920 --> 1:38:48.280 the first time that people were really welcoming computers into 1:38:48.360 --> 1:38:50.600 their lives. You know, it was at their office or 1:38:50.680 --> 1:38:52.840 in their home for the first time. But I think 1:38:52.880 --> 1:38:56.240 what YGK revealed is just how dependent we actually already 1:38:56.320 --> 1:38:59.640 were on computer systems that we weren't seeing, you know, 1:38:59.800 --> 1:39:02.640 to get on the train or how we get the 1:39:02.760 --> 1:39:06.160 news in the morning. Like everything had already been kind 1:39:06.200 --> 1:39:09.360 of operated by these giant systems, but we hadn't come 1:39:09.439 --> 1:39:11.320 face to face with that. So I think y GK 1:39:11.520 --> 1:39:16.400 was an interesting moment for kind of deconstructing our reliance 1:39:16.520 --> 1:39:20.280 on technology. But yeah, as far as where we've come today, 1:39:20.360 --> 1:39:22.600 you know, we've only gone deeper in that hole. Like 1:39:22.680 --> 1:39:26.080 Brian says, it could have been a moment where we 1:39:26.160 --> 1:39:28.960 had pivoted and maybe taken a different route. But because 1:39:29.000 --> 1:39:30.760 we did get in front of the problem and solve it, 1:39:31.240 --> 1:39:33.880 we've just gone further and further down this road. And 1:39:33.960 --> 1:39:35.880 if something like this were to happen today, you know, 1:39:36.280 --> 1:39:37.679 the same questions would arise. 1:39:38.360 --> 1:39:40.600 Hey, we only have about thirty seconds left, Brian, But 1:39:40.680 --> 1:39:42.040 I want to give you the last word. What's the 1:39:43.000 --> 1:39:44.120 next thing you guys are working on. 1:39:44.680 --> 1:39:48.559 I'm working on a film about the rise and fall 1:39:48.680 --> 1:39:53.120 of the American Enclosed shopping mall. And Marle olpasity to 1:39:53.160 --> 1:39:53.880 describe what you're. 1:39:53.720 --> 1:39:57.320 Working out I'm working on. I'm developing a film based 1:39:57.400 --> 1:40:00.800 on the archives at the Museum of Natural History and 1:40:01.439 --> 1:40:03.599 the origins of natural history museums. 1:40:04.360 --> 1:40:06.560 Very cool, big thank you to both of you for 1:40:06.720 --> 1:40:10.040 joining us. Everybody check out the new film. It's on HBO. 1:40:10.680 --> 1:40:13.519 It is all about y two K. It's called time Bomb. 1:40:13.600 --> 1:40:13.960 Y two K. 1:40:14.080 --> 1:40:16.360 A big thank you to our guest Brian Becker and 1:40:16.400 --> 1:40:19.800 Marley McDonald, documentary filmmakers and producers behind time Bomb. 1:40:20.200 --> 1:40:24.800 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:40:25.000 --> 1:40:28.719 and anywhere else you get your podcast. Listen live weekday 1:40:28.720 --> 1:40:32.160 afternoons from three to six Eastern on Bloomberg dot com, 1:40:32.400 --> 1:40:35.639 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:40:35.760 --> 1:40:38.679 You can also watch us live every weekday on YouTube 1:40:38.960 --> 1:40:41.200 and always on the Bloomberg journalone