WEBVTT - Bloomberg Businessweek Weekend - July 28th, 2023 0:00:01.360 --> 0:00:05.720 This is Bloomberg business Week Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.800 --> 0:00:22.720 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:23.000 --> 0:00:25.439 It was a busy summer week that included another FED 0:00:25.520 --> 0:00:28.639 rate hike, a regional bank takeover, a historic run of 0:00:28.680 --> 0:00:31.200 gains for the Dow, and a batch of earnings from 0:00:31.320 --> 0:00:35.479 megacaps you know, Microsoft, Alphabet and Meta, and the subject 0:00:35.479 --> 0:00:37.800 of AI and the cloud came up in those reports, 0:00:38.120 --> 0:00:40.800 and on that in the magazine, a story about big 0:00:40.880 --> 0:00:44.440 data centers and their use of a very precious commodity. 0:00:44.840 --> 0:00:47.160 That story coming right up. And speaking of the big 0:00:47.200 --> 0:00:50.360 tech companies, Amazon reports this coming week, and a range 0:00:50.360 --> 0:00:52.800 of topics may come up on the call, including what 0:00:53.159 --> 0:00:56.320 might be the most intrusive scrutiny in the company's history. 0:00:56.800 --> 0:00:59.320 Plus we'll talk with the CEO of Mattel on earnings, 0:00:59.320 --> 0:01:01.960 a key figure leaving the c suite, and whether that 0:01:02.080 --> 0:01:05.840 Hollywood labor dispute is hurting the toy maker's film ambitions 0:01:06.000 --> 0:01:08.880 even as Barbie keeps breaking it in at the box office. 0:01:09.080 --> 0:01:11.040 All of that to come, We begin with a lesson 0:01:11.120 --> 0:01:14.360 in behavioral economics from one of the pioneers in the field. 0:01:14.680 --> 0:01:17.520 Peter Atwater is an adjunct professor of economics at William 0:01:17.520 --> 0:01:20.800 and Mary. He coined the term CA shaped recovery. He's 0:01:20.840 --> 0:01:23.919 here to help us navigate these unusual economic and market 0:01:23.959 --> 0:01:27.200 times with his new book, The Confidence Map, Charting a 0:01:27.240 --> 0:01:30.280 Path from Chaos to Clarity. We began by asking for 0:01:30.319 --> 0:01:33.400 his reaction to the latest round of US monetary policy 0:01:33.400 --> 0:01:37.000 tightening from j Powell and the FED this past Wednesday. Tim, 0:01:37.040 --> 0:01:39.319 no doubt about it. We're living in interesting economic and 0:01:39.360 --> 0:01:42.920 market times. We're coming off a pandemic unprecedented, and we're 0:01:42.920 --> 0:01:46.600 going to talk about that word, unprecedented. Stimulus and easing 0:01:46.640 --> 0:01:48.720 to ensure the function of the financial system and really 0:01:48.960 --> 0:01:51.680 to help protect the livelihoods of many. The end result 0:01:52.160 --> 0:01:55.000 an economy that stopped short then was revved up again 0:01:55.320 --> 0:01:58.320 big time. But we got persistent inflation which has come 0:01:58.400 --> 0:02:01.840 down less. It was an interesting time. It was the 0:02:01.840 --> 0:02:05.160 backdrop certainly for the FED the last couple of years, 0:02:05.240 --> 0:02:07.240 but it's a recovery too. That wasn't felt by all, 0:02:07.320 --> 0:02:09.600 and that was something that was coined the Case Shaped 0:02:09.639 --> 0:02:11.320 Recovery by our next guest. 0:02:11.520 --> 0:02:13.399 And so with all of that going on and more, 0:02:13.440 --> 0:02:14.960 we are so delighted to have with us in our 0:02:14.960 --> 0:02:18.640 Bloomberg Interactive Broker's studio Peter Atwater. He's Adjunct Professor of 0:02:18.639 --> 0:02:21.400 Economics at William and Mary. He's a former banker and 0:02:21.440 --> 0:02:24.120 someone who spent many years in financial services and in 0:02:24.160 --> 0:02:27.560 the securitization of assets. He's been a financial consultant, and 0:02:27.600 --> 0:02:29.720 he's also got a way forward for all of us 0:02:29.720 --> 0:02:32.040 thanks to his brand new book out brand new book. 0:02:32.080 --> 0:02:34.200 It came out this week. It's called The Confidence Map, 0:02:34.560 --> 0:02:37.480 Charting a Path from Chaos to Clarity. It's a book 0:02:37.480 --> 0:02:39.919 that our very own Mike Reagan says is a great 0:02:40.120 --> 0:02:41.000 beach read. 0:02:40.880 --> 0:02:42.000 Which is a big endorsement. 0:02:43.560 --> 0:02:44.119 Welcome Peter. 0:02:44.160 --> 0:02:46.040 It's good to have you in the studio and congratulations 0:02:46.040 --> 0:02:46.399 on the book. 0:02:46.480 --> 0:02:47.680 Thanks so much, Tim and Carol. 0:02:47.720 --> 0:02:48.320 Great to be here. 0:02:48.360 --> 0:02:50.080 Well, it's so great to have you here. First up, 0:02:50.120 --> 0:02:52.040 we would be remiss if we didn't ask you about 0:02:52.040 --> 0:02:53.840 the FED meeting and what you make of it, Anything 0:02:53.919 --> 0:02:57.280 unusual or telling, especially as you think about your book. 0:02:58.040 --> 0:03:00.960 Yeah, it was the lack of unusual to day. This 0:03:01.160 --> 0:03:03.600 was like a dive that hit the water and there 0:03:03.680 --> 0:03:07.959 was no splash. You know, Normally after a FED announcement 0:03:08.320 --> 0:03:12.799 there's a lot of battling in social media and different takes. 0:03:13.000 --> 0:03:14.239 There were no takes today. 0:03:14.320 --> 0:03:15.200 It was kind of boring. 0:03:15.880 --> 0:03:20.320 It was beyond boring. This was nothing about nothing today. 0:03:21.000 --> 0:03:24.760 And it's been interesting because in the last couple of weeks, 0:03:25.000 --> 0:03:29.720 we've seen investors take everything off the worry list, and 0:03:29.760 --> 0:03:32.720 I think this came off the worry list too. There 0:03:33.080 --> 0:03:35.800 is a sense that everything is going to be okay. 0:03:35.840 --> 0:03:38.800 We're not worried about a recession. Inflation looks like it's 0:03:38.840 --> 0:03:40.840 going to keep coming down or is coming down to 0:03:40.880 --> 0:03:44.840 a reasonable level. And if I have a take from today, 0:03:45.480 --> 0:03:49.360 it's this sense of where's the shoe that's going to 0:03:49.480 --> 0:03:50.040 drop next. 0:03:50.120 --> 0:03:53.120 Yeah, it's sort of like a complacency. And I think 0:03:53.120 --> 0:03:56.000 it was Tom Keen who was asking Diane Swank about 0:03:56.200 --> 0:03:59.760 parallels to what we saw before the Nasdaq crash in 0:03:59.760 --> 0:04:00.920 there two thousands. 0:04:01.120 --> 0:04:04.440 Yeah, this is what's been interesting on the NASTAC front 0:04:04.480 --> 0:04:09.320 is we've seen investors racing into all these abstract stocks 0:04:10.040 --> 0:04:14.040 two years ago the SPACs, and that that NFT Mania 0:04:14.080 --> 0:04:21.080 this year they're charging into the stalwarts, the thoroughbreds that 0:04:21.120 --> 0:04:25.000 are well tested, you know, Apple, that the Magnificent Seven, 0:04:25.560 --> 0:04:28.640 and that to me is an indicator that we're not 0:04:28.839 --> 0:04:32.720 as risk taking as we were a couple of years ago. 0:04:33.080 --> 0:04:36.479 That we're looking for certainty in the companies that we're 0:04:36.520 --> 0:04:40.800 investing in and too much possibility scares us. 0:04:41.279 --> 0:04:43.800 Take us to the confidence quadrant, then, all right, this 0:04:43.880 --> 0:04:46.559 is your book and explain this because there's stress center 0:04:46.640 --> 0:04:49.479 versus comfort zone, passenger seat versus launch pan. But I 0:04:49.560 --> 0:04:52.200 love this and you, as you write, can kind of 0:04:52.200 --> 0:04:54.600 apply to anything and everything. So take us to is 0:04:54.800 --> 0:04:56.720 should we be in the stress center a comfort zone 0:04:56.760 --> 0:04:59.520 right now? Because it does feel like there's so much 0:04:59.720 --> 0:05:02.440 grow both in terms of optimism, whether it's S and 0:05:02.480 --> 0:05:05.600 P strategists or economistsying a recession to help us out. 0:05:05.880 --> 0:05:08.359 Yes, So for the benefit of your listeners, this is 0:05:08.400 --> 0:05:10.640 a book that looks at the impact of certainty and 0:05:10.680 --> 0:05:13.960 control and the choices we make because we use the 0:05:14.000 --> 0:05:15.680 word confidence all the time and we don't know what 0:05:15.720 --> 0:05:18.200 it means. And so what I tried to do is 0:05:18.240 --> 0:05:21.080 to really dig into it. And those two things are 0:05:21.120 --> 0:05:23.839 really important. I need to know what's coming and I 0:05:23.960 --> 0:05:26.080 need to feel like I'm prepared for that. That's what 0:05:26.279 --> 0:05:29.480 creates confidence. And I would say that if I. 0:05:29.440 --> 0:05:31.240 Look at it, so does not elon musk confidence. 0:05:31.720 --> 0:05:35.080 No, that's confidence theater. That's that's and that's you know, 0:05:35.279 --> 0:05:37.159 and we see a lot of that, and maybe too 0:05:37.240 --> 0:05:39.000 much of it, And I worry that a lot of 0:05:39.040 --> 0:05:41.159 people think that that's what you need to be confidence. 0:05:41.160 --> 0:05:43.640 It's like no, no, no, that's an act. That's a show 0:05:43.720 --> 0:05:44.680 that people put on. 0:05:44.720 --> 0:05:48.680 Really well, So can you explain the framework that you 0:05:48.760 --> 0:05:51.760 developed here and what to do if you find yourself 0:05:52.440 --> 0:05:53.800 basically in the wrong quadrant? 0:05:54.000 --> 0:05:54.279 Yeah. 0:05:54.320 --> 0:05:59.200 So the framework takes confidence or takes certainty and control 0:05:59.360 --> 0:06:01.840 and puts them on two oxes. It's a simple four 0:06:02.240 --> 0:06:07.239 box chart, and none of them is inherently good or bad, 0:06:07.760 --> 0:06:10.920 but they but we feel very different in them. And 0:06:11.000 --> 0:06:13.760 I would say today most investors feel like they're in 0:06:13.800 --> 0:06:16.680 the comfort zone. Things feel easy. It's like they've been 0:06:16.760 --> 0:06:19.640 they're driving on a clear highway on a clear day. 0:06:19.760 --> 0:06:23.680 And that's both good and bad. Because the more confident 0:06:23.720 --> 0:06:25.839 we are, the less we think, the less we pay attention. 0:06:26.520 --> 0:06:28.720 And so that's a big risk, and we also take 0:06:28.800 --> 0:06:32.920 more risk than we should, and that's that's the potential 0:06:33.960 --> 0:06:37.440 consequence that we need to consider. But I also then 0:06:37.480 --> 0:06:39.719 look at the consumer, and there are a lot of 0:06:39.720 --> 0:06:42.760 consumers in the stress centry today, particularly those who are 0:06:42.760 --> 0:06:45.560 trying to buy a house, are buying a car, because 0:06:45.800 --> 0:06:49.360 interest rates have been very punitive to those at the bottom. 0:06:50.040 --> 0:06:52.280 Those at the top, it's been wonderful. Cash is now 0:06:52.360 --> 0:06:56.400 earning four percent, five percent, But for those at the bottom, 0:06:56.720 --> 0:07:00.640 there's been a real, a real headwind. That's that's come 0:07:00.680 --> 0:07:04.400 about because they're on a payment they paid by month, 0:07:05.240 --> 0:07:09.240 and these heights and interest rates have made their lives 0:07:09.320 --> 0:07:10.320 far more expensive. 0:07:10.880 --> 0:07:13.200 So why is it important though to understand kind of 0:07:13.280 --> 0:07:17.240 where you are, whether you're too complacent or you're comfortable, 0:07:17.760 --> 0:07:19.840 or whether you're stressed out? Like why is it important? 0:07:19.840 --> 0:07:22.320 And I think about you know, when you think about stress, 0:07:22.360 --> 0:07:24.960 we've been there a lot, as in a market environment, 0:07:25.080 --> 0:07:27.840 in an economic environment where it's the pandemic nine to eleven, 0:07:28.720 --> 0:07:30.400 the Great financial crisis. 0:07:30.040 --> 0:07:33.000 Right like help me out here, Yeah, So we forget that. 0:07:33.280 --> 0:07:36.720 Real life moves us around, so we can be in 0:07:36.760 --> 0:07:39.440 the stress center in one moment and then be in 0:07:39.480 --> 0:07:42.480 the comfort zone the next but we forget that when 0:07:42.480 --> 0:07:44.560 we're in the stress center. If you go back to 0:07:44.600 --> 0:07:48.720 the COVID, we were catastrophizing that the end of the 0:07:48.720 --> 0:07:52.840 world was here, and we forget that as we're moving 0:07:52.880 --> 0:07:57.240 into the stress center and panics occurring. Panic is almost 0:07:57.240 --> 0:07:59.600 God's way of telling us the worst is behind us, 0:08:00.360 --> 0:08:03.320 and certainly that's proven over and over in the markets, 0:08:03.760 --> 0:08:07.520 but we fall victim to it, and we respond impulsively 0:08:07.560 --> 0:08:11.760 and emotionally, rather than stepping back to say, oh, panic 0:08:11.880 --> 0:08:16.200 means we're nearing a low in confidence, and rather than 0:08:16.600 --> 0:08:18.880 throwing the baby out with the bath water, we should 0:08:18.880 --> 0:08:21.840 be preparing for what's coming next, because it's going to 0:08:21.920 --> 0:08:22.880 surprise everybody. 0:08:24.160 --> 0:08:25.480 So how do we do that right now in the 0:08:25.520 --> 0:08:28.160 context of this run up that we've seen in the markets? 0:08:28.440 --> 0:08:30.640 How does an investor use these tools? 0:08:30.920 --> 0:08:33.840 I think investors need to look and see that our 0:08:33.920 --> 0:08:38.720 preferences have changed. We're getting more conservative behind the scenes, 0:08:38.800 --> 0:08:42.000 even though the indices are moving to record highs. So 0:08:42.040 --> 0:08:44.959 you want to recognize that while we're in the comfort zone, 0:08:45.040 --> 0:08:51.400 we're nowhere near as craving possibility and abstraction as we 0:08:51.400 --> 0:08:56.200 were two years ago. And also appreciate that there's an 0:08:56.440 --> 0:09:01.959 enormous disconnect between market confidence today and main street confidence, 0:09:02.600 --> 0:09:06.240 and with wealth so concentrated in so few hands, that 0:09:06.600 --> 0:09:11.040 tension will certainly play out if the economy turns down. 0:09:11.320 --> 0:09:14.679 You know, I always think if we're in the comfort zone, 0:09:14.800 --> 0:09:20.040 we don't anticipate a recession, and that becomes really dangerous 0:09:20.120 --> 0:09:22.880 when we all think that moment has passed. 0:09:22.920 --> 0:09:24.280 Well, it's so interesting that you say that, because I 0:09:24.280 --> 0:09:26.440 think about how much we talk about consumer sentiment, our 0:09:26.480 --> 0:09:29.880 consumer confidence, our business sentiment and business confidence. Right, these 0:09:29.920 --> 0:09:33.680 things can certainly shape our actions and certainly as investors 0:09:33.679 --> 0:09:36.400 are expectations of kind of where assets should go. 0:09:36.640 --> 0:09:40.280 Yeah, they how we think out, how we feel shapes 0:09:40.320 --> 0:09:43.800 our actions also shapes the stories we tell, and so 0:09:44.160 --> 0:09:47.680 the narrative, the narrative, The narrative is simply a reflection 0:09:47.800 --> 0:09:51.600 on how we feel. And here again the narrative today 0:09:52.160 --> 0:09:53.600 is the coast is clear. 0:09:53.720 --> 0:09:54.120 Relax. 0:09:55.920 --> 0:09:58.440 If there's going to be a recession, it's going to 0:09:58.520 --> 0:10:03.960 be shallow if it. Inflations come down considerably from where 0:10:04.000 --> 0:10:08.319 we were, and so we're investors are looking out ahead 0:10:08.760 --> 0:10:12.840 and not appreciating that risks come out of nowhere. 0:10:12.920 --> 0:10:14.079 Well, that's what I was going to say, and well, 0:10:14.120 --> 0:10:15.320 we've got to do a little bit of news. But 0:10:15.520 --> 0:10:17.160 you know, when you're in the comfort zone and you're 0:10:17.240 --> 0:10:18.800 kind of relaxed, I mean, this is when all of 0:10:18.840 --> 0:10:21.200 a sudden there's a regional bank problem or there's a 0:10:21.200 --> 0:10:24.240 cryptical lapse, right like those are. So it feels like 0:10:24.280 --> 0:10:27.960 what you're saying is we can kind of anticipate, maybe 0:10:28.200 --> 0:10:30.520 not exactly what's going to go wrong, but that's something's 0:10:30.559 --> 0:10:33.320 going to wrong go wrong, absolutely, and we can kind 0:10:33.320 --> 0:10:35.320 of figure it out. Could we anticipate that a burning 0:10:35.400 --> 0:10:36.400 made off was going to happen? 0:10:36.960 --> 0:10:40.080 Yeah, because the more confident we are, the less we scrutinize, 0:10:40.240 --> 0:10:43.960 and we fall a victim to content at both extremes 0:10:44.160 --> 0:10:49.320 financial fomo a fomo, and it loads in confidence we 0:10:49.360 --> 0:10:50.400 follow the wrong people. 0:10:50.960 --> 0:10:52.760 I want to get right back to Peter Attwater, his 0:10:52.880 --> 0:10:55.679 new book The Confidence Map, Charting a Path from Chaos 0:10:55.880 --> 0:10:59.720 to Clarity. A professor at William and Mary so I said, 0:10:59.720 --> 0:11:02.800 I'm events being unprecedented. Do you know that they are 0:11:02.920 --> 0:11:07.520 entirely predictable? Is that true? Even black Swans are entirely predictable. 0:11:08.440 --> 0:11:11.079 If you look at the backdrop of how people feel. 0:11:11.360 --> 0:11:15.040 They're much more predictable than we realize. The means may change, 0:11:15.520 --> 0:11:20.080 but extremely vulnerable people always do the same five things. 0:11:20.360 --> 0:11:24.200 People who are extremely confident have a similar series of 0:11:24.280 --> 0:11:28.120 things that they do. And so if I know how 0:11:28.200 --> 0:11:32.160 people feel, I'm not going to be nearly as surprised 0:11:32.200 --> 0:11:35.520 by what they do. And I live this with my 0:11:35.600 --> 0:11:38.280 class as COVID was beginning to take hold, and we 0:11:38.280 --> 0:11:41.040 would every week we would say is confidence higher or lower? 0:11:41.480 --> 0:11:44.600 And if it got lower and lower, and each week 0:11:44.600 --> 0:11:46.840 they would say, so, if since it's lower, what are 0:11:46.880 --> 0:11:50.680 people going to do next? And as we approached March, 0:11:51.120 --> 0:11:53.280 they were the ones who told me, professor, you need 0:11:53.360 --> 0:11:55.920 to pack everything up for spring break, and because we're 0:11:55.920 --> 0:11:58.520 not going to come back if confidence continues to fall. 0:11:59.360 --> 0:12:05.240 And so we tend to overlook that confidence is changing. 0:12:05.440 --> 0:12:10.040 Our choices change, and there are clear connections between what 0:12:10.080 --> 0:12:14.960 we want and what we feel. And we look at 0:12:15.000 --> 0:12:21.560 events as being the event, not the decisions made moment 0:12:21.720 --> 0:12:25.520 before the event. If I think about nine to eleven, 0:12:25.559 --> 0:12:28.960 we would say that caused American confidence to fall, But 0:12:29.040 --> 0:12:31.719 if you look at the backdrop, confidence in them add 0:12:31.800 --> 0:12:35.400 least was really low and so you could understand why 0:12:35.440 --> 0:12:39.319 people who are feeling hopeless might undertake that samely with 0:12:39.800 --> 0:12:40.720 the Arab spring. 0:12:41.040 --> 0:12:44.400 So a skeptic of your framework might say, it's very 0:12:44.400 --> 0:12:46.200 easy to connect the dots when you look back, but 0:12:46.240 --> 0:12:49.040 how do we look forward and use this framework to 0:12:49.040 --> 0:12:49.840 predict the future. 0:12:50.000 --> 0:12:53.680 So that's what I try to do with investors in 0:12:53.720 --> 0:12:57.800 real time with corporate executives in trying to help them 0:12:58.040 --> 0:13:03.520 to realize that the choices are being are changing quickly 0:13:04.080 --> 0:13:07.520 based on how we feel. And I found myself in 0:13:07.559 --> 0:13:13.360 COVID working with corporations trying to rejigger their messages because 0:13:13.360 --> 0:13:17.560 when we lack confidence, we need simplicity, We crave nostalgia, 0:13:18.160 --> 0:13:21.360 and so you can if we can watch as people 0:13:21.400 --> 0:13:25.280 are changing their mood, we can better anticipate what to 0:13:25.360 --> 0:13:27.800 do in response. And that was one of the things 0:13:27.800 --> 0:13:32.280 that emergency room doctors and first responders really showed me 0:13:32.640 --> 0:13:35.080 that these are things you can prepare for and train 0:13:35.520 --> 0:13:38.040 to anticipate how to behave in a crisis. 0:13:38.480 --> 0:13:41.160 Right there, many of them were prepared for trauma, right 0:13:41.200 --> 0:13:43.640 so in that when it came so okay, I'm thinking 0:13:43.679 --> 0:13:45.920 people are at home, or they're driving, are they're going 0:13:45.960 --> 0:13:49.480 to download this podcast or download this later as a podcast, 0:13:49.480 --> 0:13:51.480 and they're like, Okay, so how do I apply that 0:13:52.040 --> 0:13:55.000 to investing and how should I be thinking it about 0:13:55.040 --> 0:13:56.520 it in today's market environment. 0:13:56.840 --> 0:13:59.000 So one of the things I think investors need to 0:13:59.040 --> 0:14:05.200 be careful about today is the historical relationship between stocks 0:14:05.200 --> 0:14:09.920 and bonds seems to have broken down. That we think 0:14:09.960 --> 0:14:13.080 of this in terms of a diversified pool, that owning 0:14:13.120 --> 0:14:16.800 stocks helps you because they do better when stocks do worse. 0:14:17.280 --> 0:14:22.280 And the reality is that not that long ago, confidence 0:14:22.320 --> 0:14:26.280 in both stocks and bonds was staggeringly high. We had 0:14:26.320 --> 0:14:29.960 trillions of dollars worth of negative yielding bonds at the 0:14:30.000 --> 0:14:33.920 same time we're stampeding into crypto and all of these 0:14:34.120 --> 0:14:39.880 crazy things, and we didn't realize that every piece of 0:14:39.920 --> 0:14:44.480 that pie, that diversified pie, was piping hot. So you 0:14:44.600 --> 0:14:49.560 need to think about not historical correlations, but how do 0:14:49.640 --> 0:14:54.960 investors feel about what you own? Because you want to 0:14:55.000 --> 0:14:58.400 own people, you want to own hopeless at the same time, 0:14:58.520 --> 0:15:01.240 you want to own things that we're excited because it's 0:15:01.320 --> 0:15:05.560 tomorrow land and having a mix of moods in your portfolio, 0:15:05.640 --> 0:15:08.320 because that's where the real benefit of diversification comes from. 0:15:08.360 --> 0:15:10.520 A mix of moods, A mix of moods. 0:15:10.640 --> 0:15:12.600 It's interesting like that. 0:15:12.640 --> 0:15:14.000 I mean, what does a mix of moods look like? 0:15:14.040 --> 0:15:16.920 Obviously it depends on your age and your risk tolerance. 0:15:17.000 --> 0:15:19.520 But how do you take a mood and apply that 0:15:19.600 --> 0:15:21.760 to an ETF or to a fund or to a stock. 0:15:22.160 --> 0:15:24.440 Well, price is a great way to discover it, because 0:15:24.480 --> 0:15:27.880 I think prices market prices are a barometer of mood. 0:15:28.480 --> 0:15:30.960 So you could have looked at the price of natural 0:15:31.000 --> 0:15:34.360 gas last summer and scene that. You know, we were 0:15:34.440 --> 0:15:37.400 terrified that there was going to be enormous scarcity, and 0:15:37.480 --> 0:15:43.320 now there's immense complacency in that sector, that there's views 0:15:43.320 --> 0:15:47.120 of abundance forever. And so you want to be thinking 0:15:47.160 --> 0:15:51.400 about where is there intense scarcity, where are people stampeding 0:15:51.440 --> 0:15:52.760 in and where they stampeding out? 0:15:52.800 --> 0:15:56.200 All right, I'm going to go dark for you, charting 0:15:56.240 --> 0:15:59.080 a path from chaos to clarity. I feel like climate 0:15:59.200 --> 0:16:04.480 change is one of those. This is an existential question 0:16:04.560 --> 0:16:06.680 for all of us in situation. So how do you 0:16:06.720 --> 0:16:07.520 think about that? 0:16:08.240 --> 0:16:12.920 So climate change is a very abstract concept, and if 0:16:12.960 --> 0:16:16.840 you look at our eagerness to address climate change, it 0:16:17.280 --> 0:16:20.320 migrates with our level of confidence, And what you'll find 0:16:20.440 --> 0:16:24.240 is that when confidence is high, we want to tackle 0:16:24.360 --> 0:16:29.440 climate change proactively, that our focus is prevent the problem. 0:16:30.000 --> 0:16:33.200 And when confidence falls, our response to climate change is 0:16:33.600 --> 0:16:37.080 we need to deal with the consequences of having not 0:16:37.240 --> 0:16:41.360 dealt with it. And so if confidence falls, I think 0:16:41.400 --> 0:16:45.800 you'll start to see that our interest in solving it 0:16:45.840 --> 0:16:48.880 is swapped out for our need to address the fact 0:16:48.960 --> 0:16:53.880 that we didn't. And so that's a behavioral change because 0:16:53.920 --> 0:16:59.920 we move from abstract possibility to immediate need and vulnerability. 0:17:00.200 --> 0:17:02.240 I just because it's just it's all I think about. 0:17:02.320 --> 0:17:03.360 But then a lot. 0:17:03.280 --> 0:17:06.480 Ability effects different people depending on where they live, if 0:17:06.520 --> 0:17:08.600 they live, and I think maybe one thing that changes 0:17:08.840 --> 0:17:11.200 was when you know, the skies over so much of 0:17:12.240 --> 0:17:14.400 this part of the country turned red a few months 0:17:14.400 --> 0:17:17.359 ago because of Canadian wildfires. I mean, we're in an 0:17:17.400 --> 0:17:19.800 area that's not traditionally affected by wildfires, but we're seeing 0:17:19.800 --> 0:17:20.520 the effects of that. 0:17:20.840 --> 0:17:25.800 Yeah, so we need abstract vulnerabilities to become real. Think 0:17:25.840 --> 0:17:28.960 about COVID. COVID did not become real for most Americans 0:17:29.080 --> 0:17:32.560 until March eleventh, the night the Tom Hanks and Rudy 0:17:32.600 --> 0:17:34.440 Gobert were the. 0:17:34.400 --> 0:17:38.200 Headlines and the NBA. 0:17:37.119 --> 0:17:41.800 And suddenly that was the tipping point and boom. We 0:17:41.840 --> 0:17:44.840 all felt it and you could see it. 0:17:44.560 --> 0:17:45.600 It was like a. 0:17:45.560 --> 0:17:48.520 Wildfire of a shift in sentiment. 0:17:48.600 --> 0:17:50.159 It's so true for so long we're like, it's not 0:17:50.200 --> 0:17:51.359 going to be our problem. It's not going to be 0:17:51.359 --> 0:17:55.360 our problems that all the stories went along with that. Yeah, 0:17:55.400 --> 0:17:57.000 And I have to say, as a journalist or you know, 0:17:57.040 --> 0:17:58.880 it felt kind of stupid, like on the other side, 0:17:58.880 --> 0:18:02.080 like how did we what is this when we're thinking 0:18:02.320 --> 0:18:05.520 how could this not impact us? Thank you so much, 0:18:06.320 --> 0:18:08.720 Peter Atwater, Thank you so much. Such a treat to 0:18:08.720 --> 0:18:10.520 have you in studio. The book is the Confidence Map, 0:18:10.600 --> 0:18:13.520 charting a path from chaos to Clarity. I'm actually heading 0:18:13.520 --> 0:18:15.280 to a beach, so I'm taking this with me because 0:18:15.280 --> 0:18:16.840 I've just done a little bit of reading, but I 0:18:16.840 --> 0:18:18.880 want to read it which just came out Carol, I know, Peter, 0:18:18.960 --> 0:18:20.879 Thank you, good luck with it. Come back soon. This 0:18:21.000 --> 0:18:21.560 is Bloomberg. 0:18:22.000 --> 0:18:25.560 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:25.600 --> 0:18:29.080 live weekday afternoons from three to six Eastern Listen on. 0:18:29.000 --> 0:18:31.840 Bloomberg dot com, the iHeartRadio app, and the. 0:18:31.800 --> 0:18:35.639 Bloomberg Business app, or watch us live on YouTube. 0:18:36.840 --> 0:18:40.120 We have been focusing big time on Megacap tech earnings, 0:18:40.480 --> 0:18:43.160 Microsoft Alphabet, You got Amazon next week, and as they report, 0:18:43.480 --> 0:18:46.359 we always focus on a very key metric, tim and 0:18:46.400 --> 0:18:49.119 it is all about their cloud business. We did that 0:18:49.200 --> 0:18:51.640 last night with Microsoft. A little bit of a disappointment. 0:18:51.720 --> 0:18:54.280 It's a big business we know when it comes to cloud. 0:18:54.800 --> 0:18:56.480 And as a new story in Business Week notes, the 0:18:56.480 --> 0:19:00.000 cloud is part of an ecosystem that consumes many resources, 0:19:00.080 --> 0:19:00.840 including water. 0:19:01.080 --> 0:19:03.200 Yeah, this was really surprising to me because I've heard 0:19:03.200 --> 0:19:05.600 the cloud consumes a lot of energy. Check out this 0:19:05.640 --> 0:19:07.720 story in the new issue. It's on newstands later this week. 0:19:07.760 --> 0:19:10.240 It's already online at Bloomberg dot com. Slash business Week 0:19:10.359 --> 0:19:12.560 is of course on the Bloomberg terminal. It's also among 0:19:12.600 --> 0:19:14.840 the most read on the terminal today. The editor on 0:19:14.880 --> 0:19:18.359 the story, Bloomberg BusinessWeek Technology editor Joshua breustein with us 0:19:18.400 --> 0:19:22.040 here in our Bloomberg Interactive broker's studio. It's incredible to 0:19:22.040 --> 0:19:24.240 see this story. We knew view that they use a 0:19:24.240 --> 0:19:27.320 lot of energy, but water, Just how much water do 0:19:27.400 --> 0:19:28.240 data centers use? 0:19:29.160 --> 0:19:29.480 Well? 0:19:30.200 --> 0:19:32.600 Data centers are Actually it's a bit of a question 0:19:32.720 --> 0:19:35.400 because tech companies haven't generally been reporting on how much 0:19:35.440 --> 0:19:38.840 water their data centers are using. As you said, electricity 0:19:38.840 --> 0:19:41.040 has been a big deal. But basically what happens is 0:19:41.560 --> 0:19:45.040 you have these computer servers running, they're running very hot, 0:19:45.160 --> 0:19:49.240 and they use water to cool them down. As an example, 0:19:49.480 --> 0:19:53.200 Meta is planning on building a data center in a 0:19:53.440 --> 0:19:57.240 drought stricken area of Spain and it's expected to use 0:19:57.280 --> 0:20:00.280 about six hundred and sixty five million liters year. 0:20:01.160 --> 0:20:04.840 So let's talk geography here because the story goes into 0:20:05.400 --> 0:20:09.400 why these data centers are located where they are. Why 0:20:09.440 --> 0:20:12.240 not put this somewhere near that's not drought stricken. 0:20:13.320 --> 0:20:16.080 Yeah, it's a good question. I think they're looking for 0:20:16.119 --> 0:20:18.200 a couple of things. When you're citing a data center, 0:20:18.280 --> 0:20:21.720 you want access to cheap electricity, you want access to water, 0:20:21.840 --> 0:20:25.520 and you want access to a government that will allow 0:20:25.560 --> 0:20:27.960 you to build a data center. And what you found 0:20:28.000 --> 0:20:31.080 is that some areas where there is plentiful water have 0:20:31.200 --> 0:20:36.720 started to oppose these data centers exactly for the tax 0:20:36.720 --> 0:20:37.800 they put on resources. 0:20:38.480 --> 0:20:40.159 I thought what was really interesting is a quote in 0:20:40.160 --> 0:20:41.800 the story that says people don't realize that the cloud 0:20:41.840 --> 0:20:43.760 is real, that it is part of an ecosystem that 0:20:43.760 --> 0:20:46.840 consumes many resources. I mean, you're right, we're learning. Like 0:20:47.000 --> 0:20:49.000 we all talk about cloud and we just think it's 0:20:49.119 --> 0:20:51.360 just where our photos go. And if your a business, 0:20:51.400 --> 0:20:53.560 just a lot of information goes. And all we know 0:20:53.680 --> 0:20:56.960 is with AI, it's going to be even more in demand. Correct, 0:20:57.320 --> 0:20:59.360 And so we're going to continue to see data centers 0:20:59.400 --> 0:21:03.080 all around the world, if you will. And there are 0:21:03.200 --> 0:21:04.120 costs to. 0:21:04.160 --> 0:21:08.000 That, Yeah, absolutely, I think like that with so much 0:21:08.000 --> 0:21:10.480 things with tech, it just seems so clean, so easy, 0:21:11.040 --> 0:21:13.320 and then behind it there's a lot going on that 0:21:13.400 --> 0:21:15.719 we don't have to think about if we don't want to. 0:21:15.960 --> 0:21:16.960 What are companies doing? 0:21:16.960 --> 0:21:17.120 Though? 0:21:17.160 --> 0:21:20.919 So listen, And I'm curious about the oversight Joshua, Like, 0:21:21.520 --> 0:21:25.159 aren't companies they talk about being green and sustainable, So 0:21:25.240 --> 0:21:27.800 what's the oversight of understanding the impact if you build 0:21:27.800 --> 0:21:29.919 a data center here? This is what it's going to 0:21:29.960 --> 0:21:30.840 mean for the environment. 0:21:31.880 --> 0:21:32.080 Yeah. 0:21:32.119 --> 0:21:36.240 So obviously there are different environmental review processes and different jurisdictions, 0:21:36.720 --> 0:21:40.680 and the tech companies are saying that they do care 0:21:40.760 --> 0:21:43.760 a lot about the environmental impacts. Obviously, if they can 0:21:43.800 --> 0:21:46.960 cut down on energy use, on water use, it will 0:21:46.960 --> 0:21:50.080 also make their data centers cheaper. So all of the 0:21:50.080 --> 0:21:54.160 companies are working on ways to reduce water consumption, and 0:21:54.560 --> 0:21:56.480 I think what you see is that they are getting 0:21:56.480 --> 0:21:59.240 more efficient at this, but the problem is their capacity. 0:21:59.480 --> 0:22:02.240 Their need for capacity is growing so much faster than 0:22:02.280 --> 0:22:05.280 their ability to increase efficiency that overall it's going up. 0:22:05.480 --> 0:22:07.800 This seems well, my thoughts are going in a lot 0:22:07.800 --> 0:22:10.480 of different places right now, Joshua, But it seems like 0:22:10.680 --> 0:22:12.639 the type of problem that tech could solve. 0:22:12.960 --> 0:22:13.120 Right. 0:22:13.400 --> 0:22:17.760 Can't you create something that doesn't need to be cool? 0:22:17.760 --> 0:22:21.439 It's like a nuclear power plant core? Can you create 0:22:21.480 --> 0:22:24.919 something that doesn't create as much heat? This seems like 0:22:25.280 --> 0:22:27.560 there's some brilliant person somewhere who's going to be able 0:22:27.560 --> 0:22:29.639 to do this and it just hasn't happened yet. Am 0:22:29.680 --> 0:22:30.600 I being too optimistic? 0:22:31.040 --> 0:22:31.240 Yeah? 0:22:31.280 --> 0:22:33.800 I mean I think that there is a limit to 0:22:34.440 --> 0:22:37.040 how much to how much you can get this down. 0:22:37.080 --> 0:22:40.280 I mean, these things are running computers, They use power, 0:22:40.720 --> 0:22:43.360 they create heat. You have to deal with that, and 0:22:43.680 --> 0:22:46.760 there are efforts to make these things more energy efficient. 0:22:46.800 --> 0:22:51.040 The question is can they beat the can't? 0:22:51.119 --> 0:22:51.680 It's a race? 0:22:51.760 --> 0:22:55.199 Basically, their capacity needs are growing up. They need to 0:22:55.280 --> 0:22:57.800 come up with better ways to do it and like, who's. 0:22:57.520 --> 0:22:58.920 Going to get their first And it's not like the water, 0:22:59.040 --> 0:23:01.119 it's not like the water gets run through this and 0:23:01.160 --> 0:23:03.440 then you know, it's just warm water. On the other side, 0:23:03.480 --> 0:23:06.560 you talk about water just evaporating into the atmosphere as 0:23:06.560 --> 0:23:08.560 a result of this cooling process. 0:23:08.800 --> 0:23:11.280 Yeah, that's a big way that the consumption happens is 0:23:11.320 --> 0:23:14.560 actually the data centers use the water the water evaporates 0:23:14.560 --> 0:23:15.879 as a way to cool them down, and then the 0:23:15.880 --> 0:23:18.399 water is you know, effectively gone on site. 0:23:18.520 --> 0:23:21.119 Tell us about the conversation. I want to take a 0:23:21.119 --> 0:23:25.000 step back because we often when we talk with Jill Weber, 0:23:25.040 --> 0:23:26.639 the editor of the magazine, it's like, how does this 0:23:26.760 --> 0:23:28.520 story come to be and how do you guys what's 0:23:28.560 --> 0:23:31.320 the conversation in the newsroom that ultimately leads to what 0:23:31.359 --> 0:23:36.800 we are reading today. What was the germination of the story. 0:23:37.320 --> 0:23:40.520 Yeah, well, obviously this came out of Europe. There's been 0:23:40.800 --> 0:23:43.840 a lot of talk about the effects on drought and 0:23:43.880 --> 0:23:47.600 heat in Europe this summer, and there is one large 0:23:47.680 --> 0:23:50.159 data center that I mentioned that Meta is planning in Spain, 0:23:50.960 --> 0:23:54.000 and because it's happening in an area that's really being 0:23:54.080 --> 0:23:56.960 hard hit, there's a lot of questions around that data 0:23:57.000 --> 0:23:59.920 center in particular, and when you look at that conflict, 0:24:00.119 --> 0:24:02.320 you quickly realize that this is a stand in for 0:24:02.359 --> 0:24:04.959 a larger conflict that's happening in a lot of different places. 0:24:05.040 --> 0:24:07.439 It's kind of amazing because you, well are not amazing 0:24:07.480 --> 0:24:10.719 because you understand governments they want these facilities built. Right, 0:24:10.760 --> 0:24:15.800 It typically means economic impact, right or jobs created in 0:24:15.880 --> 0:24:17.760 data centers. I guess right, there's a fair amount of 0:24:17.760 --> 0:24:18.399 people in there. 0:24:18.960 --> 0:24:21.520 Yeah, I think there's some question about how much how 0:24:21.520 --> 0:24:23.399 many jobs are created by data centers. Obviously, if you 0:24:23.400 --> 0:24:25.760 think about what a data center is, the whole ideas 0:24:25.800 --> 0:24:28.480 that it is running not with people, but just running 0:24:28.480 --> 0:24:29.560 computer right service. 0:24:29.560 --> 0:24:32.159 But the doing but the construction of them takes local labor, 0:24:32.280 --> 0:24:33.520 and it creates tax revenue. 0:24:33.600 --> 0:24:36.120 Absolutely, there is some economic impact here and that's why 0:24:36.119 --> 0:24:39.000 people want them. And also just sort of overall, I 0:24:39.040 --> 0:24:42.159 think tech is an economic driver and this is a 0:24:42.200 --> 0:24:44.600 part of the infrastructure that has to be cited somewhere. 0:24:44.680 --> 0:24:46.280 You probably have to have the data center set right 0:24:46.320 --> 0:24:48.640 closer to kind of where some of the activity maybe 0:24:48.720 --> 0:24:51.560 is also happening. Can you take us to a photo 0:24:53.280 --> 0:24:56.359 the umbrellas. This is umbrellas in Spain. It's how you 0:24:56.400 --> 0:25:00.280 guys wrap up the story. But it's a canopy to 0:25:00.280 --> 0:25:03.440 protect locals, you know, And it was kind of interesting 0:25:04.240 --> 0:25:07.200 in terms of I guess, I don't know, to help 0:25:07.240 --> 0:25:08.840 the environment, I don't know. 0:25:09.600 --> 0:25:11.919 Yeah, I think we were just trying to show like 0:25:12.640 --> 0:25:16.600 how panicked people are in this area and like how 0:25:16.720 --> 0:25:18.760 much people are trying to come up with ways to 0:25:18.880 --> 0:25:22.160 even deal with the you know, the activity that's already there. 0:25:23.080 --> 0:25:26.440 This is really straining everyone, and you know, adding a 0:25:26.520 --> 0:25:29.600 data center is just an extra complication to the mix. 0:25:29.720 --> 0:25:31.480 It still seems like to me there could be just 0:25:31.520 --> 0:25:33.800 better places for data centers in the. 0:25:33.680 --> 0:25:34.680 World, like Norway. 0:25:35.080 --> 0:25:38.240 Well, Norway has expensive energy, I think is what is 0:25:38.280 --> 0:25:40.280 what the article said, Correct me if I'm wrong, Joshua. 0:25:40.640 --> 0:25:43.280 And the amounts of water, but lots of water exactly. 0:25:43.680 --> 0:25:45.800 Isn't there a place where there's you know, lots of 0:25:45.840 --> 0:25:48.760 water and hydro. I mean, I think of the bitcoin 0:25:48.840 --> 0:25:51.919 mining issue as well, and you know, when we talk 0:25:51.960 --> 0:25:54.680 about the energy, and some would call it waste some wooden, 0:25:55.560 --> 0:25:57.680 but there are places where you could co locate these 0:25:57.680 --> 0:25:59.720 facilities that would be a lot more, would have a 0:25:59.760 --> 0:26:02.240 better environmental impact, perhaps near renewable sources. 0:26:02.600 --> 0:26:04.480 Yeah, absolutely, I think that's what people are looking for. 0:26:04.600 --> 0:26:06.800 And when you mentioned bitcoin mining and so that's not 0:26:07.119 --> 0:26:10.160 even a related issue, that is the same issue. I mean, 0:26:10.240 --> 0:26:14.760 bitcoin mining operations are data centers. So you want to locate, 0:26:14.840 --> 0:26:18.280 as you said, in places with large amounts of renewable energy. 0:26:18.320 --> 0:26:22.359 Oftentimes that is hydro electricity, So those can be places 0:26:22.359 --> 0:26:25.280 where there's also plentiful water. But when you have a 0:26:25.320 --> 0:26:27.480 need for so many data centers and they need to 0:26:27.480 --> 0:26:30.120 be geographically spread out, you're going to end up going 0:26:30.119 --> 0:26:31.840 into a lot of places with different tensions. 0:26:31.960 --> 0:26:34.120 I do feel like Europe's going to ultimately lead the way, 0:26:34.160 --> 0:26:36.439 like they do on so much in terms of oversight 0:26:36.920 --> 0:26:39.400 and regulation. So where does it go from here at 0:26:39.400 --> 0:26:41.560 this point? I mean, you guys are certainly putting it 0:26:42.000 --> 0:26:45.080 on the radar by writing this story, but I'm just curious. 0:26:45.200 --> 0:26:48.240 It hasn't been something we talk a ton about, and 0:26:48.280 --> 0:26:50.640 I just wonder when it becomes one of those things 0:26:50.640 --> 0:26:53.080 that lawmakers and policy makers globally you're like, well, wait 0:26:53.080 --> 0:26:54.280 a minute, we got to think about this. 0:26:54.680 --> 0:26:56.040 Yeah, I think this is going to be an issue 0:26:56.040 --> 0:26:58.840 that you'll be hearing about more as resources continue to 0:26:58.920 --> 0:26:59.880 be taxed more and more. 0:27:00.080 --> 0:27:02.520 Yeah, especially with AI. Like I love the I don't 0:27:02.560 --> 0:27:04.160 know that I love it, but what it says about 0:27:04.160 --> 0:27:06.520 AI that the chips that they use for AI generate 0:27:06.920 --> 0:27:08.800 lots and lots of more more heat. 0:27:08.880 --> 0:27:10.760 In the reporting for this story, I'm wondering if and 0:27:10.760 --> 0:27:12.359 you were the editor on the story, but I'm wondering 0:27:12.359 --> 0:27:15.240 if if you know, we found that there are some 0:27:15.400 --> 0:27:20.160 governments that are so enthusiastic about this despite the environmental consequences. 0:27:19.880 --> 0:27:22.600 And we should note in the piece, it's not like 0:27:22.640 --> 0:27:24.520 these companies are coming in and advertising the fact that 0:27:24.520 --> 0:27:28.000 these are data centers. You know, the author's right that 0:27:28.359 --> 0:27:30.439 these things just look like they could be warehouses. They 0:27:30.480 --> 0:27:32.439 look like any other huge building, industrial building. 0:27:33.160 --> 0:27:33.400 Yeah. 0:27:33.400 --> 0:27:33.920 Absolutely. 0:27:33.960 --> 0:27:37.360 I don't think that this is something that the companies 0:27:37.400 --> 0:27:39.919 that are building them are necessarily wanting to go in 0:27:39.960 --> 0:27:41.879 and make a big show of things. They're just trying 0:27:41.920 --> 0:27:44.240 to set these things up and quietly go about their 0:27:44.280 --> 0:27:46.320 business and maybe talk about They really want to talk 0:27:46.320 --> 0:27:48.840 about more of the consumer facing things that people might 0:27:48.920 --> 0:27:50.240 care about or even notice. 0:27:50.280 --> 0:27:52.080 You know what's so interesting too is I was thinking 0:27:52.080 --> 0:27:53.680 a lot about Apple when I was reading this story, 0:27:53.720 --> 0:27:56.080 and a few years ago, Apple decided to when when 0:27:56.200 --> 0:27:59.679 the materials that go into phones, that go into chips 0:28:00.200 --> 0:28:03.200 came under such scrutiny the mining practices around those, Apple 0:28:03.240 --> 0:28:05.280 decided to make changes to the way it discloses its 0:28:05.280 --> 0:28:07.440 supply chain. And you can read all this on their website. 0:28:07.560 --> 0:28:11.640 But I haven't heard anything about data center usage and transparency. 0:28:11.720 --> 0:28:13.960 There is that something we're going to see a demand for. 0:28:14.600 --> 0:28:16.240 I think we're already seeing a demand for it. I 0:28:16.240 --> 0:28:18.440 think that came up in this story is what you 0:28:18.520 --> 0:28:21.639 see government saying to tech companies is well, you have 0:28:21.720 --> 0:28:25.480 to at least tell us more about how you're using water, 0:28:26.000 --> 0:28:28.240 if just so at the least we can plan for 0:28:28.280 --> 0:28:31.720 what you're doing. And obviously once they see those stats, 0:28:31.760 --> 0:28:33.080 they may want to say, well, you've got to come 0:28:33.119 --> 0:28:35.920 up with a way to use less. And the first 0:28:35.920 --> 0:28:38.000 thing to do is just get the information right. 0:28:38.000 --> 0:28:40.640 And carbon offsets don't do it. Yeah, it's like my 0:28:40.720 --> 0:28:42.960 big pet peeve, as of like, because it doesn't. 0:28:43.280 --> 0:28:45.840 It just kind of well, there is an interesting parallel 0:28:45.840 --> 0:28:48.080 to carbon offsets, which is that if we use this water, 0:28:48.160 --> 0:28:51.240 we will restore water. We will restore water somehow. And 0:28:51.280 --> 0:28:53.880 you run into a lot of the same issues where well, 0:28:53.880 --> 0:28:55.360 where is it going to be restored? How's that going 0:28:55.440 --> 0:28:55.720 to work? 0:28:55.760 --> 0:28:56.240 Exactly? 0:28:56.360 --> 0:28:59.200 No, it's like, stop doing the bad stuff. I'm sorry. 0:28:59.400 --> 0:29:02.840 I just think for how we we've the Corent off sets. 0:29:02.880 --> 0:29:04.760 It's the answer to everything. It's like, no, stop doing 0:29:04.800 --> 0:29:07.760 the bad stuff right at this point. No, But and 0:29:07.840 --> 0:29:10.200 I think about again, you know, there's just going to 0:29:10.240 --> 0:29:11.680 be more and more of these around the world, So 0:29:11.800 --> 0:29:13.760 you just think, Okay, this is just going to become 0:29:14.160 --> 0:29:17.000 a much more serious problem, especially if you look at 0:29:17.000 --> 0:29:19.360 the summer we're having in terms of the weather, right, 0:29:19.440 --> 0:29:23.040 and the impact of that. Absolutely all right, great story. 0:29:23.080 --> 0:29:25.280 I think twice about saving your photos to the cloud, Carol, 0:29:27.080 --> 0:29:30.280 You just you're just not winning as a consumer. 0:29:29.920 --> 0:29:33.240 It's if you think about like your your car, your footprint. 0:29:33.600 --> 0:29:34.360 This is part of it. 0:29:34.400 --> 0:29:37.080 I just got to notice that eighty five percent full 0:29:37.120 --> 0:29:38.400 on Google Storage. 0:29:39.720 --> 0:29:40.720 We need more clouds. 0:29:41.160 --> 0:29:44.760 It gotta buy some more cloud Yeah, it's really fascinating. Anyway, 0:29:44.880 --> 0:29:46.760 Thank you so much for bringing us the story. Absolutely 0:29:47.080 --> 0:29:50.520 so appreciate it. Joshua Brustin. He is technology editor and 0:29:50.640 --> 0:29:54.560 oversees the Tech section of Bloomberg BusinessWeek magazine. This story 0:29:54.720 --> 0:29:57.800 is in the New issue. It's coming out on newsstands tomorrow. 0:29:57.840 --> 0:30:00.120 It's already on the Bloomberg and of course at Bloomberg Dot. 0:30:00.440 --> 0:30:02.880 But I feel like all the climate stuff that's coming out, 0:30:02.920 --> 0:30:05.520 like you're just getting different pieces about, you know, our 0:30:05.560 --> 0:30:06.800 impact on our world. 0:30:06.960 --> 0:30:08.520 Yeah, and again, this is one of those things that 0:30:08.520 --> 0:30:10.719 you don't necessarily think about the environmental impact of what 0:30:10.760 --> 0:30:12.520 you're doing on your phone or what you're doing with 0:30:12.560 --> 0:30:14.440 your digital life and the real world impact that it 0:30:14.480 --> 0:30:17.240 has because these things are not actual things, right. These 0:30:17.240 --> 0:30:19.720 photos are digital, they're not you know, and it's not 0:30:19.760 --> 0:30:22.440 just photos, right, it's like AI powered in the cloud. 0:30:22.400 --> 0:30:25.080 It's everything. Can I ask you one thing? Did you 0:30:25.240 --> 0:30:28.480 oh did what did the companies say or does it 0:30:28.560 --> 0:30:29.320 just kind of like. 0:30:29.600 --> 0:30:32.320 Well, what the companies say is we know that climate 0:30:32.360 --> 0:30:34.000 change is real, we know it's a big deal, and 0:30:34.040 --> 0:30:35.880 we're working really hard to be more efficient at this 0:30:35.920 --> 0:30:38.360 which I think is true. Yeah, they are trying to 0:30:38.360 --> 0:30:40.760 come up with ways to use less water and energy, 0:30:41.200 --> 0:30:44.040 but they're also coming up with ways to put AI 0:30:44.120 --> 0:30:44.600 into everything. 0:30:44.720 --> 0:30:46.960 Is it only water though? That does it? That cools it? 0:30:47.040 --> 0:30:50.080 Like at this point, Yeah, that the main that those 0:30:50.080 --> 0:30:50.960 are the main techniques. 0:30:51.040 --> 0:30:53.960 Yeah, So while we still have you, I do want 0:30:53.960 --> 0:30:55.600 to say that there's a good there's a really good 0:30:55.680 --> 0:30:59.280 quantity way to quantify how much water is being used. 0:30:59.320 --> 0:31:01.640 And there's a team at the University of California Riverside, 0:31:01.640 --> 0:31:04.680 and this is in the piece. They've calculated that every 0:31:04.720 --> 0:31:07.840 short conversation of twenty to fifty questions and answers with 0:31:07.960 --> 0:31:11.960 chat GPT represents about five hundred milli liters of water. 0:31:12.400 --> 0:31:15.360 So stop doing it, Matt Miller. Stop talking with chat GPT. 0:31:15.600 --> 0:31:17.280 If you're just ask a few a questions, you're just 0:31:17.320 --> 0:31:19.880 watering the sidewalk when you do that, just pouring water 0:31:19.920 --> 0:31:20.480 out onto the CEM. 0:31:20.720 --> 0:31:24.200 Just stop it. Everybody, thank you, We really appreciate it. 0:31:24.240 --> 0:31:27.200 Joshua Bustin, as we said, technology editor at Bloomberg Business Week, 0:31:27.720 --> 0:31:30.120 And of course the new issue is coming out coming up. 0:31:30.120 --> 0:31:34.360 We've got a really treat for everyone. He's certainly a 0:31:34.440 --> 0:31:36.920 friend of the show. We're talking about Peter atwater over 0:31:36.960 --> 0:31:40.240 at William and Mary, but former banker, someone who understands 0:31:40.280 --> 0:31:42.760 how Wall Street and the financial markets work and financial 0:31:42.840 --> 0:31:45.720 services works. And he's got a new book. It's about 0:31:45.800 --> 0:31:48.000 the Confidence Map, and you're going to have to draw 0:31:48.160 --> 0:31:48.920 a square. 0:31:49.600 --> 0:31:51.520 I love this because it offers a framework for how 0:31:51.560 --> 0:31:54.040 to think about decision making, how to think about decisions 0:31:54.080 --> 0:31:55.400 that you make in your life. He made a really 0:31:55.400 --> 0:31:57.920 big decision when he was forty five and left financial 0:31:57.960 --> 0:32:01.800 services and decided to research confidence instead. And I think 0:32:01.800 --> 0:32:03.760 it's fair to say this this book is the product 0:32:03.800 --> 0:32:05.560 of that sort of second act that he's had. 0:32:05.640 --> 0:32:07.760 Speaking of decisions, we'll maybe ask him two a little 0:32:07.760 --> 0:32:09.960 bit about what he makes about the FOMC decision. 0:32:10.000 --> 0:32:10.840 Oh that's a good idea. 0:32:11.120 --> 0:32:12.440 Yeah, I just see what he has to say, and 0:32:12.480 --> 0:32:14.600 then we'll kind of broaden it out. All right, You 0:32:14.640 --> 0:32:17.040 are listening and watching Bloomberg Business Week. Carol Master, long it, 0:32:17.080 --> 0:32:18.400 Tim Stanic, This is Bloomberg. 0:32:23.080 --> 0:32:26.680 You're listening to the Bloomberg Business Week podcast. Catch us 0:32:26.680 --> 0:32:30.160 live weekday afternoons from three to six Eastern Listen. 0:32:29.920 --> 0:32:33.400 On Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:32:33.440 --> 0:32:36.240 Business App, or watch us live on YouTube. 0:32:36.800 --> 0:32:38.360 Can you talk about it? We all talk about a 0:32:38.360 --> 0:32:40.959 few certainties in life, right, death taxes, and the American 0:32:41.000 --> 0:32:43.120 healthcare system is, for lack of a better word, it's 0:32:43.200 --> 0:32:47.640 a mess. Yeah, like disruption, innovation. Come on, come do something. 0:32:47.760 --> 0:32:50.720 So remember, we have the Affordable Care Act Obamacare, right, right, 0:32:50.720 --> 0:32:54.280 that's supposed to solve all of the problems for uninsured Americans. Well, 0:32:54.280 --> 0:32:57.520 guess what. In twenty twenty one, nearly thirty million people, 0:32:57.520 --> 0:32:59.760 more than eight percent of the US population, didn't have 0:32:59.800 --> 0:33:02.440 help insurance. That's according to the US Census Bureau. Now, 0:33:02.440 --> 0:33:04.479 don't get me wrong, this is a lot better than 0:33:04.560 --> 0:33:07.240 things were in the decade leading up to the Affordable 0:33:07.240 --> 0:33:10.080 Care Act, when more than fifteen percent of people did 0:33:10.080 --> 0:33:12.280 not have health insurance. But this is still millions of 0:33:12.280 --> 0:33:13.200 people who are at risk. 0:33:13.320 --> 0:33:15.520 It's a lot of people in a very rich or 0:33:15.560 --> 0:33:18.880 so we're told, wealthy country. So let's get to one 0:33:18.920 --> 0:33:22.400 of the co authors, Amy Finkelstein. She is a professor 0:33:22.400 --> 0:33:25.600 of economics at MIT, director of the Healthcare Program at 0:33:25.600 --> 0:33:27.920 the National Bureau of Economic Research, and among other things, 0:33:27.960 --> 0:33:35.000 a twenty eighteen MacArthur fellow. And actually get a genius grant. Correct, Yeah, 0:33:35.120 --> 0:33:35.640 that's correct. 0:33:36.000 --> 0:33:37.640 I don't know if the geniuses are supposed to call 0:33:37.680 --> 0:33:39.640 them genius grants. That's for just us lay people. 0:33:39.680 --> 0:33:42.800 Carrol, We're going to call you a geni. We've been 0:33:42.840 --> 0:33:45.880 calling it teasing you up. She is on Zoom in 0:33:45.960 --> 0:33:47.600 Cambridge on them. 0:33:47.800 --> 0:33:49.240 Well, I got to tell you it's going to take 0:33:49.240 --> 0:33:51.320 a genius to figure out healthcare in this country. 0:33:51.320 --> 0:33:53.120 So we're lucky to have you help us. Help us 0:33:53.160 --> 0:33:54.760 because you know, Tim and I talk with a lot 0:33:54.800 --> 0:33:57.080 of folks and we talk about disruption, innovation, We've got 0:33:57.120 --> 0:34:00.000 the metaphorse coming, we've got generative AI, all these wonderful 0:34:00.080 --> 0:34:03.160 things coming at us, and yet it still feels like 0:34:03.960 --> 0:34:07.280 in some ways healthcare is way behind the times. How 0:34:07.280 --> 0:34:08.719 do you see it? How do you think about it? 0:34:08.960 --> 0:34:12.360 Yeah, thanks a lot for having me on. I'd say, 0:34:12.719 --> 0:34:14.719 you know, we didn't my co author Lauran and av 0:34:14.760 --> 0:34:18.040 and I didn't go into this thinking about disruption, but 0:34:18.120 --> 0:34:21.160 we concluded that it was the only solution. And part 0:34:21.200 --> 0:34:24.279 of the reason is related to that fact that you 0:34:24.360 --> 0:34:27.520 started with that thirty million Americans are one in ten 0:34:27.560 --> 0:34:31.239 Americans under sixty five lack health insurance at any given moment. 0:34:31.600 --> 0:34:35.400 That gets talked about endlessly, But a really, really important 0:34:35.440 --> 0:34:38.799 statistic that gets very little coverage is the fact that 0:34:39.200 --> 0:34:42.400 more than twice as many Americans, in fact, one in 0:34:42.560 --> 0:34:46.640 four Americans under sixty five will have some period of 0:34:46.719 --> 0:34:48.360 time without health insurance. 0:34:48.400 --> 0:34:49.279 Coverage over a. 0:34:49.200 --> 0:34:53.120 Two year period. In other words, health insurance, whose very 0:34:53.120 --> 0:34:56.160 purpose is to be secure and certain, is in fact 0:34:56.239 --> 0:34:59.120 highly uncertain. We all live if we are lucky enough 0:34:59.160 --> 0:35:01.880 to have health insurance with the risk of losing. 0:35:01.520 --> 0:35:04.640 That coverage is that because it's tied to our jobs. 0:35:05.560 --> 0:35:08.560 For people with employer provided health insurance, that you know 0:35:08.640 --> 0:35:11.080 half about half of the population that haves that Yes, 0:35:11.200 --> 0:35:15.680 For people with publicly provided health insurance, the risk is 0:35:16.200 --> 0:35:19.759 like Medicaid or Medicare for certain diseases, the risk is 0:35:19.800 --> 0:35:23.360 you can lose your coverage if your income changes, or 0:35:23.400 --> 0:35:27.000 you get older, or you have a disease specific coverage 0:35:27.040 --> 0:35:29.440 program and you get cured of that disease, or and 0:35:29.480 --> 0:35:32.719 this is kind of the most heartbreaking part, or you 0:35:32.760 --> 0:35:35.760 can simply lose your coverage because you fail to realize 0:35:35.760 --> 0:35:37.920 that you need it to file forms to demonstrate that 0:35:37.960 --> 0:35:41.439 you're still eligible under some income category. And that's why 0:35:41.480 --> 0:35:46.560 we realized further patches and incremental reform won't work. We 0:35:46.719 --> 0:35:50.000 have to tear this down and start over. Because whenever 0:35:50.040 --> 0:35:53.440 you have different pathways to eligibility and coverage through a 0:35:53.480 --> 0:35:56.440 myriad of programs, you're going to have gaps at the themes, 0:35:56.440 --> 0:35:58.120 and that's where people are falling through. 0:35:58.239 --> 0:36:01.000 All right, So the professor Finglestein could wave your magic 0:36:01.080 --> 0:36:03.879 wand and change one thing that you think would be 0:36:04.000 --> 0:36:07.080 a game changer in terms of improving healthcare in the 0:36:07.160 --> 0:36:10.040 United States. What would it be? I'm just curious, who 0:36:10.040 --> 0:36:12.120 would you wave the magic wand over? Is it the 0:36:12.160 --> 0:36:14.720 health insurance is Is it politicians? 0:36:14.840 --> 0:36:15.040 Is it? 0:36:15.080 --> 0:36:15.160 What? 0:36:15.840 --> 0:36:21.520 To fix our coverage problem? We need automatic universal basic 0:36:21.640 --> 0:36:25.960 coverage that's free for everyone, no patient payments, and then 0:36:26.320 --> 0:36:28.759 the option to buy supplemental coverage if you want more 0:36:28.800 --> 0:36:29.480 than the basic. 0:36:29.920 --> 0:36:32.680 Is this sounds forgive me, I'm not sixty five, but 0:36:32.920 --> 0:36:36.719 my parents are over sixty five, and this sounds like medicare. 0:36:37.320 --> 0:36:42.000 It may sound like Medicare, it's not. Here's one very 0:36:42.040 --> 0:36:44.120 important difference, and that I think a lot of the 0:36:44.120 --> 0:36:48.040 proponents of Medicare for all don't realize that Medicare for 0:36:48.200 --> 0:36:52.480 some is actually very very incomplete insurance. So, for example, 0:36:52.880 --> 0:36:56.400 for doctor visits, people have to pay twenty percent of 0:36:56.440 --> 0:36:59.960 the doctor bill out of their own pocket, with no limit, 0:37:00.200 --> 0:37:03.280 no cap. So you can, if you're unfortunate enough to 0:37:03.320 --> 0:37:05.480 be quite ill, you have cancer, say and you rack 0:37:05.560 --> 0:37:08.319 up lots of physicians visits and bills. You can be 0:37:08.360 --> 0:37:11.400 on the hook for tens of thousands of dollars that 0:37:11.440 --> 0:37:15.040 you have to pay despite having coverage. A startling fact 0:37:15.160 --> 0:37:17.600 is not only that there's enormous amounts of medical debt 0:37:17.600 --> 0:37:20.279 in the United States, but that three fifths of that 0:37:20.600 --> 0:37:23.839 is incurred by people who have health insurance. So in 0:37:23.880 --> 0:37:26.120 that sense, our plan would be much better than the 0:37:26.160 --> 0:37:29.919 current Medicare plan and there'd be no risk of having 0:37:29.960 --> 0:37:32.640 to pay anything out of pocket. On the other hand, 0:37:33.160 --> 0:37:36.319 because we are realists at least in the economic in 0:37:36.400 --> 0:37:40.000 terms of the economics, we have that coverage be much 0:37:40.040 --> 0:37:42.960 more basic than the current Medicare coverage. People are so 0:37:43.120 --> 0:37:46.759 concerned about Medicare costs growing so fast and going through 0:37:46.800 --> 0:37:49.719 the roof One reason they do that is because there's 0:37:49.920 --> 0:37:54.560 no budget constraint on the system. Patients want care, physicians 0:37:54.560 --> 0:37:57.279 are willing to provide it. There's no gatekeeper on the 0:37:57.320 --> 0:38:00.440 back end saying no, maybe we need to, you know, 0:38:00.520 --> 0:38:02.640 check to make sure you really need that CT scam 0:38:02.680 --> 0:38:04.839 because you came in with a headache. So we would 0:38:04.880 --> 0:38:07.719 have much more constraints on the nature of the care 0:38:07.840 --> 0:38:11.320 that's provided, But anything that was provided would be completely free. 0:38:11.400 --> 0:38:13.759 So how do we help you know, you know where 0:38:13.760 --> 0:38:17.319 that gets to, like people making decisions about who gets what, like, 0:38:17.400 --> 0:38:20.600 how do we make sure that is done in a 0:38:20.640 --> 0:38:21.240 pure way. 0:38:22.480 --> 0:38:24.440 That's a good question. So the first thing I want 0:38:24.480 --> 0:38:28.000 to emphasize is that the whole point of a universal 0:38:28.040 --> 0:38:32.840 basic health insurance system is to fulfill the social commitment 0:38:32.880 --> 0:38:35.359 that we clearly have and it's revealed by all our 0:38:35.400 --> 0:38:39.879 patchwork policies to provide essential medical care when people are ill, 0:38:39.960 --> 0:38:42.520 regardless of their ability to pay for it. And so 0:38:42.600 --> 0:38:45.920 the basic coverage has to cover what's medically essential, but 0:38:46.000 --> 0:38:48.480 it doesn't have to cover things that we all might 0:38:48.680 --> 0:38:52.719 like but that aren't actually essential medical care, such as 0:38:52.840 --> 0:38:55.600 you know, so you can have longer wait times for 0:38:56.440 --> 0:39:01.600 non urgent care, you can have a fewer fewer amenities 0:39:01.640 --> 0:39:04.520 of the non medical part, you know, like more people 0:39:04.560 --> 0:39:07.120 to a hospital room or and this is what other 0:39:07.200 --> 0:39:11.200 countries do. Countries like Singapore or Australia, they provide universal 0:39:11.239 --> 0:39:13.879 basic coverage, but if you want a private hospital room 0:39:14.200 --> 0:39:16.799 or good hospital food, that's what you pay extra for. 0:39:16.920 --> 0:39:18.880 I will say, like, there was one point my husband 0:39:19.239 --> 0:39:21.560 got ill over in the UK and we were initially 0:39:21.600 --> 0:39:26.280 in I guess their public system and right and yeah, 0:39:26.560 --> 0:39:28.120 and it was a ton of people in a room 0:39:28.160 --> 0:39:29.720 and you had to get up to get your own food. 0:39:30.560 --> 0:39:33.120 It wasn't great, I'm going to be quite honest. And 0:39:33.480 --> 0:39:36.080 he was with an employer who pulled him out and 0:39:36.320 --> 0:39:39.840 put him over to a hospital that is was like 0:39:39.880 --> 0:39:43.600 a nice hotel and you know, got a bunch of 0:39:43.640 --> 0:39:45.719 tests that they could do as soon as he walked in. 0:39:46.960 --> 0:39:49.120 Although we had to see the finance person. That was 0:39:49.160 --> 0:39:50.640 the first person we saw to make sure that it 0:39:50.680 --> 0:39:52.040 was going to be paid for. Like, it was just 0:39:52.160 --> 0:39:56.680 such a contrast. And I guess, so I'm trying to understand, 0:39:57.400 --> 0:40:01.280 you know, how we move forward and get to something 0:40:01.320 --> 0:40:04.800 where more people are getting better care, and I'm wondering, 0:40:04.840 --> 0:40:05.840 how do we pay for all of this? 0:40:06.760 --> 0:40:10.839 So I think those are related questions. The example we 0:40:10.880 --> 0:40:13.960 give in the book is, you know, how do we 0:40:14.040 --> 0:40:18.000 fulfill our obligation obligations but without you know, all the 0:40:18.080 --> 0:40:21.000 extra stuff. So your husband's example is a perfect one. 0:40:21.560 --> 0:40:24.520 It's it's I can totally understand why you liked going 0:40:24.520 --> 0:40:27.319 outside of the system more you had, you know, a 0:40:27.320 --> 0:40:30.960 private room, more convenience, et cetera. But I think our 0:40:31.000 --> 0:40:35.120 commitment as a society is not to provide everyone with luxury, 0:40:35.200 --> 0:40:37.960 high end medical care, such as your husband was fortunate 0:40:38.040 --> 0:40:41.319 to receive, but to provide essential medical care. And that's 0:40:41.360 --> 0:40:44.920 also how we keep the price down. So if you 0:40:45.160 --> 0:40:47.080 are fortunate enough to be able to afford it, and 0:40:47.120 --> 0:40:50.839 you want to buy those extra amenities, that's great, but 0:40:50.880 --> 0:40:53.279 that's not what we're committed to as a society. We're 0:40:53.320 --> 0:40:56.719 not committed to providing a luxury experience. We're committed to 0:40:56.760 --> 0:40:59.680 providing essential medical care. And as we discuss in the book, 0:40:59.800 --> 0:41:01.319 that's also how we keep the price tag. 0:41:01.400 --> 0:41:01.839 Guy great. 0:41:02.120 --> 0:41:04.960 And I certainly wasn't arguing in favor of the other 0:41:05.000 --> 0:41:07.600 because he wasn't fixed. He was basically just fixed enough 0:41:07.600 --> 0:41:08.840 to get on a plan and come back home to 0:41:08.840 --> 0:41:11.760 the United States. But it was just such a contrast, 0:41:11.800 --> 0:41:13.359 and I was trying to get my head around, like, 0:41:13.880 --> 0:41:17.600 how do we figure this out? Professor Finkelstein, don't go anywhere. 0:41:17.600 --> 0:41:19.480 We want to continue this conversation. We are talking with 0:41:19.560 --> 0:41:22.440 Amy Finkelstein. She is a co author of a new 0:41:22.440 --> 0:41:25.280 book it's called We've Got You Covered, Rebooting American Healthcare. 0:41:25.560 --> 0:41:29.600 Professor of Economics at MIT, and director of Healthcare Program 0:41:29.680 --> 0:41:31.960 at the National Bureau of Economic Research. I mean, really 0:41:32.000 --> 0:41:34.440 is coming at this from just checking all the boxes 0:41:34.640 --> 0:41:37.000 of someone I think who needs to understand how to 0:41:37.040 --> 0:41:37.400 fix this. 0:41:37.600 --> 0:41:39.239 She's at the NBER. I wonder if she can tell 0:41:39.280 --> 0:41:40.240 us if there's a recession. 0:41:40.760 --> 0:41:44.040 That's our next question. Carol Masser along with Tim Stenovik 0:41:44.080 --> 0:41:46.560 here on Bloomberg Business Week, and we want to get 0:41:46.560 --> 0:41:49.600 back to Amy Finkelstein. She's co author We've Got You 0:41:49.640 --> 0:41:53.840 Covered Rebooting American Healthcare, Professor of economics at MIT, director 0:41:53.880 --> 0:41:56.840 of the Healthcare Program at the National Bureau of Economic Research. 0:41:57.200 --> 0:42:00.080 And as we mentioned earlier at twenty eighteen, MacArthur fell 0:42:00.320 --> 0:42:03.440 on Zoom in Cambridge. So do you know is it 0:42:03.440 --> 0:42:05.359 a recession? Is a recession coming. 0:42:07.080 --> 0:42:08.200 That? Acist? 0:42:08.520 --> 0:42:11.120 We had a great Bloomberg story a few months ago. 0:42:11.400 --> 0:42:15.440 Amy and the group of folks at the NBER were 0:42:15.440 --> 0:42:18.359 described as eggheads, who are the ones who decide whether 0:42:18.440 --> 0:42:20.279 or not we're in a recession. So I guess we'll 0:42:20.280 --> 0:42:23.480 have to go to you for how we fix American healthcare. 0:42:23.840 --> 0:42:25.360 What' just the egghead on health? 0:42:25.719 --> 0:42:28.320 Hey, that's good enough for us. We appreciate that. What 0:42:28.520 --> 0:42:32.719 is the one country that is doing this the best every. 0:42:32.719 --> 0:42:35.919 High income country, but the US is doing it much 0:42:35.960 --> 0:42:38.279 better than we are. None of them do are doing 0:42:38.320 --> 0:42:39.920 it exactly as we propose. 0:42:40.200 --> 0:42:42.640 Which one is closest not a fair question. 0:42:42.840 --> 0:42:45.480 We're like some of them in some dimensions and like 0:42:45.520 --> 0:42:47.399 others on others. What I can say that every other 0:42:47.480 --> 0:42:49.800 high income country is doing, which is what we propose, 0:42:50.320 --> 0:42:55.759 is automatic universal basic coverage and the option to supplement 0:42:55.920 --> 0:42:58.719 or top it up if you want more. And the 0:42:58.760 --> 0:43:01.600 third element, which is really key, a budget that is 0:43:01.680 --> 0:43:04.600 enforced in terms of how much can be spent by 0:43:04.600 --> 0:43:07.880 the taxpayer on healthcare. One thing that's shocking about the 0:43:08.000 --> 0:43:11.120 US system is there is no healthcare budget in the 0:43:11.160 --> 0:43:14.040 sense of what a budget really means. A budget constraint, 0:43:14.080 --> 0:43:16.799 an amount that you can't spend beyond. When people talk 0:43:16.800 --> 0:43:20.000 about the Medicare budget, they mean how much Medicare has 0:43:20.040 --> 0:43:23.640 spent or will spend, not the cap on how much 0:43:23.640 --> 0:43:26.480 it can spend. So we need to enforce a budget 0:43:26.719 --> 0:43:29.840 and use that taxpayer money that we've allocated to provide 0:43:30.000 --> 0:43:34.520 universal basic coverage. Now you ask which country we're like, Well, 0:43:34.840 --> 0:43:38.160 in one dimension, we're very much like the UK and 0:43:38.239 --> 0:43:42.960 Canada in having absolutely, no patient copays in the basic coverage. 0:43:43.200 --> 0:43:45.520 No patients don't have to pay anything out of pocket. 0:43:45.760 --> 0:43:48.239 On the other hand, in terms of the design of 0:43:48.239 --> 0:43:51.040 the supplemental coverage, we very much don't want to do 0:43:51.080 --> 0:43:52.960 it the way the UK does it, but we want 0:43:53.000 --> 0:43:55.880 to do it the way say Singapore or Australia do it, 0:43:55.920 --> 0:43:58.839 where you can just pay the extra cost to top 0:43:58.920 --> 0:44:01.719 up upgrading, you know, to business class. You don't have 0:44:01.760 --> 0:44:04.680 to repurchase the entire ticket to get a little extra 0:44:04.760 --> 0:44:06.800 ligruy and just pay for the additional cost. 0:44:07.320 --> 0:44:12.160 But doesn't that create again inequities because obviously not everybody 0:44:12.160 --> 0:44:14.799 can can upspend if you will. 0:44:15.760 --> 0:44:20.160 Absolutely, we you know, we see the key mission of 0:44:20.880 --> 0:44:23.880 health care policy to make sure that everyone has access 0:44:23.920 --> 0:44:28.359 to essential medical care, regardless of resources. And beyond that. 0:44:28.760 --> 0:44:32.840 We tolerate inequality in you know, the supplemental and the 0:44:32.880 --> 0:44:36.400 same way we tolerate inequality in other aspects of our society, 0:44:36.600 --> 0:44:39.719 you know, housing, food, et cetera. Our proposals about a 0:44:39.760 --> 0:44:43.720 floor not a ceiling. And one thing that's really important 0:44:43.760 --> 0:44:45.560 to understand because I know that makes a lot of 0:44:45.560 --> 0:44:50.280 people uncomfortable because however we feel about inequality in say clothing, 0:44:50.640 --> 0:44:53.800 you know, many people feel rightly that the health is different, 0:44:53.840 --> 0:44:56.120 that it occupies a, you know, a sort of special 0:44:56.160 --> 0:44:59.320 place in our moral firmament. One of the things we 0:44:59.360 --> 0:45:01.200 make very clear in the book is that there's an 0:45:01.360 --> 0:45:04.520 enormous body of research that makes it clear that, as 0:45:04.560 --> 0:45:08.080 counterintuitive as it may seem, if you're concerned, and you 0:45:08.120 --> 0:45:11.319 should be about the shocking health disparities it exists in 0:45:11.320 --> 0:45:14.120 the United States between high end low income, between black 0:45:14.120 --> 0:45:18.040 and white, health insurance policy is simply not the lever 0:45:18.200 --> 0:45:21.200 to lean on health insurance would make reform would have 0:45:21.320 --> 0:45:25.880 little effect on those health disparities. And probably the clearest 0:45:25.880 --> 0:45:28.480 way to see that is from work that some economists 0:45:28.520 --> 0:45:32.520 have done ich In Chen Maria Poliakova and Petra Parson, 0:45:32.760 --> 0:45:34.919 who shows it in a country like Sweden, And there's 0:45:34.960 --> 0:45:38.759 other work showing this in Norway, despite universal health insurance 0:45:38.880 --> 0:45:43.520 and cradle to the grave social safety net, the health 0:45:43.520 --> 0:45:48.600 inequality across the income distribution is as large in say, Sweden, 0:45:48.640 --> 0:45:49.200 as it is in. 0:45:49.120 --> 0:45:52.719 The United Wow, that's surprising to hear. So, yeah, if 0:45:52.760 --> 0:45:55.560 you look, I have two questions for you, one yes 0:45:55.680 --> 0:45:56.880 or no. But you can also tell me it's not 0:45:56.920 --> 0:45:59.239 a fair question. Do doctors in the US make too 0:45:59.280 --> 0:45:59.800 much money? 0:46:01.560 --> 0:46:03.440 It's not relevant to our proposal. 0:46:03.719 --> 0:46:05.640 So that's my next question. When you look at the 0:46:06.000 --> 0:46:09.120 when you look at the value chain across patient access, 0:46:09.160 --> 0:46:11.839 and you know you hear the stat thrown around all 0:46:11.840 --> 0:46:13.840 the time that you know, a fifth of our GDP 0:46:14.040 --> 0:46:17.759 goes to healthcare costs. Where is that money going? Who 0:46:17.840 --> 0:46:19.520 is getting that money? Who doesn't deserve it. 0:46:21.960 --> 0:46:25.400 One of the key things about our proposal is to 0:46:25.520 --> 0:46:28.839 realize that you can separate the question of how do 0:46:28.880 --> 0:46:31.360 we make sure that everyone has access to es central 0:46:31.400 --> 0:46:35.320 medical care regardless of resources, from the very hard questions 0:46:35.320 --> 0:46:40.160 that you're raising about how to fix you know, healthcare spending, 0:46:40.200 --> 0:46:42.240 how to make sure that we can you know, spend 0:46:42.320 --> 0:46:45.759 less and still achieve good outcomes. The coverage problem turns 0:46:45.760 --> 0:46:47.439 out to be a really easy one. As I said, 0:46:47.480 --> 0:46:50.400 basically every other high income country has done it. The 0:46:50.680 --> 0:46:53.160 question you're asking, which is a good question, is one 0:46:53.200 --> 0:46:55.359 that no one knows the answer to, and I don't 0:46:55.400 --> 0:46:59.200 care what they're claiming. It's a very very hard problem. 0:46:59.440 --> 0:47:02.319 But the way we can afford it is to realize that, yes, 0:47:02.400 --> 0:47:04.880 that statistic you said is right. We spend twice as 0:47:04.960 --> 0:47:07.640 much as any other country on healthcare fifth of our 0:47:07.640 --> 0:47:10.520 economy as a share of the economy, but only half 0:47:10.560 --> 0:47:14.000 of that is publicly funded. So taxpayer dollars in the 0:47:14.120 --> 0:47:17.720 US are not more than in other countries. We're already 0:47:17.760 --> 0:47:20.799 paying for universal coverage through the tax system. We're just 0:47:20.840 --> 0:47:21.680 not getting it all. 0:47:21.680 --> 0:47:23.560 Right, So just got about a minute left here, so 0:47:24.160 --> 0:47:27.640 forgive me, and I'm just maybe a little brain day, 0:47:28.600 --> 0:47:33.560 But I mean, so, what's the step one towards what 0:47:33.600 --> 0:47:37.719 you are talking about? What would we have to change? 0:47:38.680 --> 0:47:39.279 What is it? 0:47:40.040 --> 0:47:43.120 We'd have to completely tear down the current system and 0:47:43.200 --> 0:47:47.040 build system in quotations, the current patchwork of policies we 0:47:47.080 --> 0:47:50.400 have in place and actually design and build a coherent, 0:47:50.800 --> 0:47:52.320 automatic universal. 0:47:51.920 --> 0:47:55.879 Basically, how does that start? Is it politics? Is it politicians? 0:47:56.000 --> 0:47:57.920 Is it the private sector? How do we start? 0:47:58.960 --> 0:48:00.000 It's public policies? 0:48:00.040 --> 0:48:02.480 So, yes, we need it, we need it. We're waiting 0:48:02.520 --> 0:48:04.800 for the first, you know, would be presidential candidate to 0:48:04.840 --> 0:48:07.160 sign on board for our plan. The book just came 0:48:07.200 --> 0:48:08.800 out today, so you know, I'm willing to give it 0:48:08.840 --> 0:48:09.439 a week or two. 0:48:10.160 --> 0:48:11.920 I guess what, you know, and listen, I wish we 0:48:12.000 --> 0:48:15.080 had more time because this is a really I think difficult. 0:48:15.239 --> 0:48:17.200 I always feel like health care and education, these are 0:48:17.200 --> 0:48:20.120 the two things that really need some disruption to happen 0:48:20.120 --> 0:48:22.160 in But healthcare, I feel like there's so much money 0:48:22.200 --> 0:48:26.960 in it. You know that it complicates it? 0:48:27.000 --> 0:48:27.480 Is that fair? 0:48:27.520 --> 0:48:30.160 I just got about fifteen seconds. It complicates it, right. 0:48:31.000 --> 0:48:33.359 It does. But once we agree on the solution, then 0:48:33.360 --> 0:48:35.799 we can start trying to figure out how to achieve it. 0:48:35.840 --> 0:48:37.080 I got to say, I love a book that says 0:48:37.080 --> 0:48:39.239 more than fifty shades of gray, but it has to 0:48:39.360 --> 0:48:43.399 do what's going to be considered, you know, kind of 0:48:44.160 --> 0:48:48.840 basic coverage, right, what things go? Fertility treatments is it basic? 0:48:49.120 --> 0:48:53.799 I don't know, physical therapy anyway. Amy Finkelstein, incredible. Check 0:48:53.800 --> 0:48:54.239 out the book. 0:48:54.239 --> 0:48:58.279 Everybody, you're listening to the Bloomberg Business Week podcast cat 0:48:58.440 --> 0:49:02.040 just live weekday afternoons from three to six Eastern Listen. 0:49:01.840 --> 0:49:04.839 On Bloomberg dot com, the iHeartRadio app, and the. 0:49:04.800 --> 0:49:08.000 Bloomberg Business App, or watch us live on YouTube. 0:49:08.840 --> 0:49:10.440 All right, we're going to talk a little bit about 0:49:11.239 --> 0:49:17.600 those who work specifically at Amazon their fulfillment centers, because 0:49:18.080 --> 0:49:20.520 it is a subject of a story that's in the 0:49:20.600 --> 0:49:23.400 upcoming new issue of Bloomberg BusinessWeek, And you got to 0:49:23.480 --> 0:49:25.279 keep in mind that coming up this month there are 0:49:25.360 --> 0:49:29.920 hearings into Amazon's labor practices in Washington State, just the 0:49:29.960 --> 0:49:33.720 beginning of a widening government crackdown on the company's safety record. 0:49:33.760 --> 0:49:37.239 That I guess many would argue, Matt, that they are 0:49:37.280 --> 0:49:41.000 the most intrusive scrutiny in the company's history, that is, 0:49:41.120 --> 0:49:43.960 the investigation into them. 0:49:44.360 --> 0:49:48.799 So you mean that they are monitoring these employees with 0:49:49.360 --> 0:49:54.680 cameras and electronic devices, really watching what they were doing 0:49:55.600 --> 0:50:00.359 to see how difficult a job it can be at 0:50:00.400 --> 0:50:03.800 an Amazon fulfillment fulfillment center sounds like such. 0:50:03.600 --> 0:50:05.200 A we're fulfilling. 0:50:05.280 --> 0:50:08.919 I'm trashing that term. Come on, it's a warehouse, all marketing. 0:50:08.600 --> 0:50:13.600 It's all marketing, data, democratization, right, finances? All right, So 0:50:13.680 --> 0:50:15.600 let's get to the two reporters who wrote it. This story, 0:50:15.640 --> 0:50:17.320 as we said, featured in the upcoming new issue of 0:50:17.320 --> 0:50:20.600 Bloomberg Business Week on newsstands later this week, already online 0:50:20.600 --> 0:50:22.600 at Bloomberg dot com, slash BusinessWeek, and of course on 0:50:22.640 --> 0:50:24.600 the Bloomberg terminal. So let's get to it with Bloomberg 0:50:24.640 --> 0:50:27.600 News Technology and e Commerce reporter Spencer Soper on the 0:50:27.640 --> 0:50:30.840 phone in Seattle and Josh Idelson, labor reporter at Bloomberg 0:50:30.920 --> 0:50:33.920 News on Zoom in San Francisco. Spencer, let me kick 0:50:33.920 --> 0:50:35.759 it off with you, because you take us back. You 0:50:35.880 --> 0:50:39.040 kick off the story and take us to December twenty 0:50:39.120 --> 0:50:41.560 twenty one. Tell us a little bit about what was 0:50:41.600 --> 0:50:42.000 going on. 0:50:43.640 --> 0:50:48.480 Yeah, so that's when state inspectors and so these will 0:50:48.520 --> 0:50:51.320 be people with Washington State Department of Labor and Industry, 0:50:52.400 --> 0:50:56.600 based on some concerns, including media reports about warehouse injuries 0:50:56.640 --> 0:50:59.880 as well as the injury rate at the facility itself, 0:51:01.080 --> 0:51:05.000 entered and looked around and in a huge little investigation, 0:51:05.160 --> 0:51:08.399 they'll bring cameras and survey the workplace. And ordinarily these 0:51:08.400 --> 0:51:11.239 things don't even escalate to this point of contention. It's 0:51:11.280 --> 0:51:14.600 more like a cooperative thing where an employer wants to 0:51:14.600 --> 0:51:17.080 know how to solve injuries. But in this case, they 0:51:17.080 --> 0:51:19.680 actually had a court order to enter the warehouse in 0:51:19.719 --> 0:51:24.399 Amazon's home state of Washington. Use electronic devices to put 0:51:24.440 --> 0:51:27.080 on workers and measure all kinds of things like how 0:51:27.120 --> 0:51:31.320 frequently they stoop and bend and twist, and calculate the 0:51:32.239 --> 0:51:35.959 rates that they're performing lifts every minute or every hour, 0:51:36.840 --> 0:51:42.240 and basically just surveying this workplace for ergonomic risk because 0:51:42.239 --> 0:51:45.600 they're trying to find out and answer questions what can 0:51:45.640 --> 0:51:49.280 be done. There's a high level of injury in this workplace. 0:51:49.880 --> 0:51:51.680 What can we do to make it safer? 0:51:52.120 --> 0:51:55.040 Yeah, I mean, I've been in a lot of car 0:51:55.800 --> 0:51:59.759 factories and you'll always see signs that say, like, you know, 0:52:00.239 --> 0:52:03.520 sixteen days without an injury, right, and they count higher 0:52:03.560 --> 0:52:07.960 and hire. But at Amazon warehouses, nearly one hundred people 0:52:07.960 --> 0:52:09.759 are injured every single day. 0:52:10.000 --> 0:52:10.439 That's a lot. 0:52:10.520 --> 0:52:12.800 And Josh, it doesn't make much sense to me from 0:52:12.800 --> 0:52:17.000 the business perspective. Don't they want to keep their staff 0:52:18.000 --> 0:52:21.560 from getting injured, because if you hurt yourself on the job, 0:52:21.640 --> 0:52:23.680 then you're out not for like a day or two, 0:52:23.800 --> 0:52:24.879 but for a month or two. 0:52:26.560 --> 0:52:29.879 Well, Amazon, of course says that they are working hard 0:52:29.920 --> 0:52:34.200 to prevent their staff from being injured. We talk to people, 0:52:34.239 --> 0:52:38.760 including one of the ergonomists from the state of Washington 0:52:38.800 --> 0:52:43.960 who's testifying in this proceeding, and a warehouse safety equipment 0:52:44.080 --> 0:52:48.160 makers director who argue that there are things the company 0:52:48.200 --> 0:52:50.560 could be doing and it's not doing. And as you 0:52:50.640 --> 0:52:53.840 say that those would save the company money. It costs 0:52:53.960 --> 0:52:57.920 money to have people out injured. It costs money to 0:52:57.960 --> 0:53:02.319 bring in new employees. Now, the measures that are being 0:53:02.520 --> 0:53:06.560 urged by Washington State would also cost the company money, 0:53:06.719 --> 0:53:11.560 both because of operational changes and because fundamentally, this case 0:53:11.600 --> 0:53:14.240 in Washington State is partly about the pace of work, 0:53:14.320 --> 0:53:17.480 an issue that has dogged Amazon for years now, This 0:53:17.680 --> 0:53:21.680 question of how much the company expects workers to do 0:53:22.000 --> 0:53:26.440 in an hour and how that expectation impacts the likelihood 0:53:26.480 --> 0:53:27.560 of getting hurt. 0:53:28.400 --> 0:53:30.359 Well, this goes to the core right there. But their 0:53:30.440 --> 0:53:33.440 business model is really on trial, is what you guys 0:53:33.520 --> 0:53:35.879 report about. And Spencer, I mean so much we talked 0:53:35.880 --> 0:53:38.480 about all the time. We've all gotten used to I 0:53:38.640 --> 0:53:40.400 order and I get the next day or get it 0:53:40.400 --> 0:53:42.360 in two days, like we just all expect that. But 0:53:42.719 --> 0:53:46.279 that puts a lot of pressure right on Amazon workers 0:53:46.360 --> 0:53:47.799 to really churn stuff out. 0:53:49.280 --> 0:53:53.520 Yeah, and so there's a variety of jobs and tasks 0:53:53.760 --> 0:53:56.319 right and Amazon it's tough to get them to pin 0:53:56.440 --> 0:53:59.120 down a specific quota because I say, it kind of 0:53:59.160 --> 0:54:02.080 moves around depending on how people are performing in their 0:54:02.120 --> 0:54:04.960 own operations and stuff. But what's coming out and what 0:54:05.040 --> 0:54:09.000 Amazon is acknowledging is saying, listen, if someone's in our 0:54:09.040 --> 0:54:12.600 warehouse performing a job, and their pace of work is 0:54:13.239 --> 0:54:17.160 you know, below ninety five percent of what their peers 0:54:17.200 --> 0:54:20.000 are doing. That you know, that's the only thing that's 0:54:20.040 --> 0:54:22.960 going to trigger them getting spoken to. And what the 0:54:22.960 --> 0:54:26.440 state is saying is like, listen, that's a little bit 0:54:26.480 --> 0:54:30.560 too tight of a work expectation because you have pretty 0:54:30.600 --> 0:54:36.120 broad difference in the physical capabilities and the stamina of 0:54:36.680 --> 0:54:39.160 a workforce. You know, that's going to range from kids 0:54:39.160 --> 0:54:41.960 fresh out of high school, you know, to people in 0:54:41.960 --> 0:54:49.960 their fifties and sixties. So it's basically their operation is 0:54:49.520 --> 0:54:54.120 on trial, and the main question is is it safe? 0:54:54.160 --> 0:54:56.279 And if the answer to that is no, how can 0:54:56.320 --> 0:54:58.240 it be how can it be made more safe? 0:54:58.400 --> 0:54:58.520 Well? 0:54:58.520 --> 0:55:01.359 And they found that they're not safe in a lot 0:55:01.440 --> 0:55:04.040 in a lot of these cases, right. And by the way, 0:55:04.440 --> 0:55:09.920 they use extremely high tech gear to monitor the workers. 0:55:11.040 --> 0:55:14.400 I guess they have a Dutch company x Sense technology 0:55:15.320 --> 0:55:18.360 that that makes these motion sensors that they were putting 0:55:18.360 --> 0:55:23.919 on Amazon employees arms or legs or whatever. I thought 0:55:23.960 --> 0:55:26.239 they were gonna start using gear like that to help 0:55:26.280 --> 0:55:29.160 these workers do their jobs. Like ten years ago, I 0:55:29.200 --> 0:55:31.560 did a piece about robotics that would help you at 0:55:31.600 --> 0:55:35.279 a Mason, Right, yeah, Josh, do they not have this 0:55:35.400 --> 0:55:38.840 kind of tech or Spencer, I mean, are they putting 0:55:38.960 --> 0:55:43.200 is Amazon putting any you know, mechanical helpers in place. 0:55:44.040 --> 0:55:45.439 I don't know which one of you is a better 0:55:45.440 --> 0:55:47.799 person to ask for these for these questions. Oh right, Josh, 0:55:47.840 --> 0:55:48.359 I'll go with you. 0:55:50.480 --> 0:55:53.360 I would defer to Spencer on what the Okay, we'll. 0:55:53.239 --> 0:55:53.880 Go with Spencer. 0:55:54.080 --> 0:55:58.919 Spencer, Spencer, Yeah, yeah, I can answer that. And so, yes, 0:55:58.960 --> 0:56:02.279 there are there's a lot of automation within Amazon warehouses, 0:56:02.600 --> 0:56:05.400 and a lot of it is just focused on pushing 0:56:05.440 --> 0:56:08.319 product through the facility as quickly as possible. They have 0:56:08.440 --> 0:56:11.680 robots that shuffle things around. You're a worker, you might 0:56:11.719 --> 0:56:14.240 be if you're a picker, which is someone who's actually 0:56:14.560 --> 0:56:17.719 you know, you ordered a toothbrush on Amazon. I'm a picker. 0:56:17.760 --> 0:56:19.880 I'm going to be the one who actually retrieves that 0:56:19.920 --> 0:56:22.960 from a bin. A robot will bring that bin to 0:56:23.080 --> 0:56:25.640 me and I will retrieve that item that you've ordered. 0:56:25.960 --> 0:56:29.080 So there are robots and automation in there, but there's 0:56:29.080 --> 0:56:31.480 still extra things, and some of it is very simple. 0:56:31.800 --> 0:56:34.640 Like so, the hearings actually began today and I've been 0:56:34.680 --> 0:56:37.080 watching them, and one thing coming up is, hey, they've 0:56:37.120 --> 0:56:40.040 got they've got step ladders, which help people if they're 0:56:40.040 --> 0:56:42.920 going to minimize like reaching over your head, which is 0:56:42.960 --> 0:56:45.360 a very serious hazard if you're reaching a high above 0:56:45.360 --> 0:56:49.360 your head to grab a box. But the step ladders 0:56:49.360 --> 0:56:51.920 they're using aren't tall enough. They need to be taller. 0:56:52.160 --> 0:56:54.279 So some of these things are very aren't high tech 0:56:54.320 --> 0:56:59.320 at all, fairly simple solutions and also just rotating workers 0:56:59.360 --> 0:57:02.520 through different jobs. And the state inspector who is testifying 0:57:02.520 --> 0:57:06.120 today said he found no schedule of an actual rotation 0:57:06.560 --> 0:57:08.240 and that it just seemed to be kind of willy nilly, 0:57:08.600 --> 0:57:12.360 you know. So again, it's not necessarily high tech solutions. 0:57:12.400 --> 0:57:14.880 Some of them are. Some of them require investment, but 0:57:14.960 --> 0:57:18.440 some are pretty simple, things like step letterers and shifting 0:57:18.440 --> 0:57:19.479 people through different roles. 0:57:19.560 --> 0:57:21.160 Well, and you get into some of the different roles, 0:57:21.200 --> 0:57:25.680 the stuffers, fluid loaders, those who place outbound packages onto trucks, 0:57:25.720 --> 0:57:28.520 the stuffers who unload boxes from trucks. I mean, some 0:57:28.600 --> 0:57:31.720 of this is repetitive. It's probably pretty heavy one way. 0:57:31.640 --> 0:57:34.640 A mandatory overtime. By the way, don't forget right that 0:57:34.720 --> 0:57:36.720 they're not these are not eight hour no right. 0:57:36.760 --> 0:57:39.160 They might go really long. What I want to ask you, though, 0:57:39.280 --> 0:57:44.120 josh is has the law not kept up with kind 0:57:44.160 --> 0:57:47.640 of the way how we work has evolved. I mean, 0:57:47.680 --> 0:57:50.080 first of all, we've had assembly lines for a long time. 0:57:50.240 --> 0:57:53.000 This is a different type of assembly line, if you will. 0:57:53.200 --> 0:57:55.959 But I'm just wondering what the law has said, labor law. 0:57:57.080 --> 0:57:57.360 Well. 0:57:57.480 --> 0:58:00.000 One of the things that's interesting about this case is 0:57:59.840 --> 0:58:03.040 in several decades, it's one of the only times that 0:58:03.120 --> 0:58:08.320 there's a trial about ergonomic issues, and there is no 0:58:08.680 --> 0:58:13.240 really specific federal ergonomic standard, which is not something. 0:58:12.960 --> 0:58:13.760 No one has thought of. 0:58:13.920 --> 0:58:17.760 In fact, there were efforts in parallel a couple decades 0:58:17.800 --> 0:58:21.600 ago in Washington State and at the federal level there 0:58:21.680 --> 0:58:25.520 were what would have been ergonomic rules put in place, 0:58:25.600 --> 0:58:29.800 which then were swept away quickly because at the federal level, 0:58:30.280 --> 0:58:35.240 when George W. Bush won the two thousand election, the 0:58:35.320 --> 0:58:39.440 Republicans in Congress and President Bush used the Congressional Review 0:58:39.480 --> 0:58:43.280 Act to undo Clinton's new ergonomic rules. In inl on 0:58:43.440 --> 0:58:46.760 Washington State, there was actually a voter referendum to undo 0:58:46.920 --> 0:58:51.280 ergonomics rules. That means that instead, at the state and 0:58:51.360 --> 0:58:54.880 federal level, the enforcers are stuck using what's called the 0:58:55.000 --> 0:58:58.320 General Duty Clause in federal law, which is a more 0:58:58.400 --> 0:59:04.560 general requirement that the employer avoid hazards that are known 0:59:04.720 --> 0:59:08.840 and could cause serious harm. Of course, there's tremendous debate 0:59:09.040 --> 0:59:13.240 about what would count as such a violation, and we're 0:59:13.280 --> 0:59:16.640 going to see that play out in Washington State in 0:59:16.680 --> 0:59:18.680 this trial over the coming days. 0:59:19.160 --> 0:59:21.760 You know, it's interesting they had one of the senators 0:59:21.880 --> 0:59:25.000 quoted in the story says that she I think it 0:59:25.040 --> 0:59:27.280 was a She is one of those people who loves 0:59:27.280 --> 0:59:29.560 getting her box the next day, right, right, and now 0:59:29.600 --> 0:59:34.760 she feels guilty. But that's still achievable. It would seem 0:59:34.840 --> 0:59:38.520 to me, you just don't make one person, you know, 0:59:39.760 --> 0:59:45.040 pack two hundred boxes, you know, for twelve hours a day. So, Spencer, 0:59:45.120 --> 0:59:47.600 did you look at that, like if it's possible for 0:59:47.640 --> 0:59:51.560 Amazon to still achieve the same end with just you know, 0:59:51.640 --> 0:59:56.479 maybe more employees or more centers, or is the only 0:59:56.520 --> 0:59:58.360 answer to slow things down a little bit? 0:59:59.600 --> 1:00:03.880 Yeah, it's a it's a critical question, and I don't know, 1:00:04.320 --> 1:00:08.960 because the bottom line is Amazon basically has made you know, 1:00:09.000 --> 1:00:12.320 think about this. You used to drive to the store yourself, 1:00:13.040 --> 1:00:16.240 You used to walk yourself to the aisle to get 1:00:16.280 --> 1:00:18.640 the item. You needed, you would walk that aisle to 1:00:18.680 --> 1:00:21.120 a cash register, you would pay someone for that item, 1:00:21.160 --> 1:00:24.439 you would drive it home. Right, So basically stores were 1:00:24.440 --> 1:00:27.120 relying kind of meeting you half way to get you 1:00:27.200 --> 1:00:31.000 the product. Amazon is doing you know, all of that, 1:00:31.200 --> 1:00:33.880 saving you that trip to the store. They're using you know, 1:00:34.440 --> 1:00:38.480 another worker, paying them gas, you know, paying you know, 1:00:38.520 --> 1:00:40.600 the gas for the vehicle, the trip to your house, 1:00:40.880 --> 1:00:42.840 all that stuff, and doing it at a price that's 1:00:42.880 --> 1:00:46.760 competitive of you going to a store that's very difficult 1:00:46.800 --> 1:00:49.080 to pull off. And if you start turning knobs and 1:00:49.120 --> 1:00:54.200 increasing costs, this thing could could unravel. So that's that 1:00:54.280 --> 1:00:57.240 is that is the critical question. Can this business be 1:00:57.440 --> 1:01:00.520 done in a way that is comparable to to going 1:01:00.520 --> 1:01:03.480 to the store at the same cost or is it 1:01:03.520 --> 1:01:05.200 more of like a boutique service that you're gonna have 1:01:05.200 --> 1:01:07.480 to pay a little extra forcuse just because the cost 1:01:07.560 --> 1:01:08.960 of doing it safely is higher. 1:01:09.520 --> 1:01:13.280 Hey, real quickly, Josh, how quickly or how long is 1:01:13.280 --> 1:01:17.000 this trial expected to last? Just got about twenty five seconds. 1:01:17.080 --> 1:01:22.000 So the trial will be going on for weeks and 1:01:22.040 --> 1:01:24.840 then there is a potential appeals process that could drag 1:01:24.920 --> 1:01:26.480 this on far into the future. 1:01:26.720 --> 1:01:28.439 All Right, so we'll be talking about it for a while. 1:01:28.440 --> 1:01:30.680 All right, guys, thank you so much. Bloomberg News Technology 1:01:30.680 --> 1:01:33.520 and e commerce reporter Spencer Soaper joining us on the 1:01:33.560 --> 1:01:36.200 phone in Seattle. Josh Iidlson, labor reporter at Bloomberg News 1:01:36.200 --> 1:01:38.640 on Zoom in San Francisco. As we said this story 1:01:38.680 --> 1:01:40.680 in the upcoming new issue Bloomberg Business Week, I do 1:01:40.720 --> 1:01:42.520 wonder Matt, like, do they have to rethink their business 1:01:42.560 --> 1:01:45.080 model and start to say, well, maybe take long what. 1:01:45.320 --> 1:01:48.800 Or should we pay more if we want, you know, 1:01:48.920 --> 1:01:50.360 instant fulfillment? 1:01:51.040 --> 1:01:52.720 We used to, but we used to do that. Think 1:01:52.720 --> 1:01:55.080 about it, if you wanted something right away or overnight, like 1:01:55.120 --> 1:01:56.520 you would have to pay a company. 1:01:56.760 --> 1:01:59.080 I still do, I think I think you do more 1:01:59.160 --> 1:02:01.960 and more often. I was just ordering, for example, cricket 1:02:02.000 --> 1:02:04.840 shirts out of Austin, Texas, and they have a more 1:02:05.080 --> 1:02:06.920 normal like it takes a week or two for the 1:02:06.960 --> 1:02:08.600 shirts to get to you. If you want a faster 1:02:09.000 --> 1:02:11.000 you pay an extra twenty or thirty dollars. And I 1:02:11.040 --> 1:02:13.280 think a lot more companies are going back to that 1:02:13.440 --> 1:02:15.880 rather than promising you next day delivery. 1:02:15.720 --> 1:02:17.720 Right, And maybe we all just manage our expectations. And 1:02:17.720 --> 1:02:19.600 I have to have everything the next day. All right, 1:02:19.640 --> 1:02:20.400 this is Bloomberg. 1:02:26.280 --> 1:02:29.840 You're listening to the Bloomberg Business Week Podcast. Catch us 1:02:29.880 --> 1:02:33.920 live weekday afternoons from three to six Easter on Bloomberg Radio, 1:02:34.120 --> 1:02:37.400 the Bloomberg Business App and YouTube. You can also listen 1:02:37.480 --> 1:02:40.600 live on Amazon Alexa from our flagship New York station, 1:02:41.040 --> 1:02:43.800 Just say Alexa play Bloomberg eleven. 1:02:43.520 --> 1:02:46.880 Thirty Plenty ahead in our second hour of the weekend 1:02:47.000 --> 1:02:49.640 edition of Bloomberg Business Week, including fun with the maker 1:02:49.680 --> 1:02:52.520 of Ken and Barbie. Mattel CEO inon cries on the 1:02:52.560 --> 1:02:55.760 movie The Toy Business and losing a topic Zech, plus 1:02:55.760 --> 1:02:58.480 a classically trained French chef who is big time into 1:02:58.480 --> 1:03:02.240 the vegetarian space, including plant based seafood. We talked with 1:03:02.280 --> 1:03:05.439 the founder of Conscious Foods, also joining us, Laura ray Dickey. 1:03:05.560 --> 1:03:07.320 She's the CEO of the more than eighty year old 1:03:07.320 --> 1:03:11.360 family run franchise Dicky's Barbecue Restaurants. First up this hour, 1:03:11.480 --> 1:03:15.000 Mattel reported sales and profit that beat analyst expectations, but 1:03:15.040 --> 1:03:17.640 it didn't get much help from Barbie, the fashion doll 1:03:17.680 --> 1:03:19.560 that was the focus of the top movie in the 1:03:19.600 --> 1:03:23.360 world last weekend. Those earnings came out late Wednesday, just 1:03:23.560 --> 1:03:26.320 hours after we got word that Richard Dixon, the MATEL 1:03:26.400 --> 1:03:30.360 chief operating officer who oversaw a recent Barbie turnaround, will 1:03:30.400 --> 1:03:34.000 become CEO of The Gap next month with more on 1:03:34.080 --> 1:03:36.120 all things Mattel. We were delighted to have back with 1:03:36.200 --> 1:03:39.720 us in on Cries, Chairman and CEO of Mattel. First 1:03:39.760 --> 1:03:42.920 of all, congratulations on Barbie, because we have been talking 1:03:42.960 --> 1:03:45.520 about that with you for a while. I almost feel 1:03:45.560 --> 1:03:48.720 like since the beginning and your strategy of bringing Mattel 1:03:48.800 --> 1:03:51.200 toys to life, what does the success of the movie 1:03:51.640 --> 1:03:53.640 mean to you and the company. 1:03:53.680 --> 1:03:55.840 Yes, that's right, Carol, Then thank you for having me 1:03:55.880 --> 1:03:59.360 on the show. As you remember from the very beginning, 1:03:59.480 --> 1:04:03.440 this was never about just making a movie. This was 1:04:03.480 --> 1:04:09.120 about creating a cultural event, a societal moment, and we 1:04:09.160 --> 1:04:12.720 could not be happier where we are today with such 1:04:12.760 --> 1:04:15.400 strong performance right out of the gate the first week, 1:04:16.400 --> 1:04:20.240 with over five hundred million dollars in growth in box 1:04:20.280 --> 1:04:27.360 office receipts, and more importantly the audience reaction, with people 1:04:27.440 --> 1:04:30.680 going two and even three times already in the first 1:04:30.720 --> 1:04:34.720 week to see the movie, a very broad audience including Man, 1:04:35.440 --> 1:04:42.520 and a very strong performance internationally that is stronger than 1:04:42.560 --> 1:04:44.280 the US, and it's not because the US is not 1:04:44.400 --> 1:04:48.760 doing well. It's just a very strong performance across the world. 1:04:48.920 --> 1:04:55.360 And all in all, it really is an exciting moment 1:04:55.440 --> 1:04:59.400 and a showcase for the cultural resonance of our brands, 1:05:01.120 --> 1:05:06.160 our ability to attract and collaborate with top creative talent 1:05:06.840 --> 1:05:13.800 and marketing and demand creation capabilities to create what is now, 1:05:14.400 --> 1:05:15.760 you know, a cultural phenomenon. 1:05:15.800 --> 1:05:17.440 You know what does it mean for merchandise? I mean, 1:05:17.480 --> 1:05:19.600 I've actually bought some Barbie products, to be quite honest, 1:05:19.640 --> 1:05:21.800 I grew up with Barbie's, introduced them to my daughter, 1:05:21.880 --> 1:05:26.080 My older sisters introduced me to them, and it's nostalgic 1:05:26.320 --> 1:05:29.160 for me. But I also have been in the stores 1:05:29.240 --> 1:05:34.800 where all ages are snapping out products. How how does 1:05:34.840 --> 1:05:37.720 that move the needle for you guys financially as well? 1:05:38.160 --> 1:05:40.880 All those Yeah, well, it's see incredible take up of 1:05:40.960 --> 1:05:46.920 the movie related merchandise. We have handing been sixty more 1:05:46.920 --> 1:05:50.600 than having a sixty five different consumer product partners, different 1:05:51.000 --> 1:05:54.400 different industry, different products all over the world, and we're 1:05:54.400 --> 1:05:58.160 seeing incredible excitement and as you say, you know, product 1:05:58.240 --> 1:06:02.000 is setting out quickly. This is a movie related merchandise. 1:06:02.120 --> 1:06:05.720 Does it financially have a material financial material impact on 1:06:05.760 --> 1:06:07.840 you guys, Well. 1:06:08.200 --> 1:06:11.280 We haven't broken it out, but this is already part 1:06:11.320 --> 1:06:14.440 of what we expect will be an uplift in Barbie 1:06:14.520 --> 1:06:17.640 sales in the second half. This is really where it 1:06:17.760 --> 1:06:20.800 kicked in. And of course don't forget the Hello effect 1:06:20.840 --> 1:06:27.240 on the overall Barbie brand with the significant improvement in 1:06:27.400 --> 1:06:32.160 consumer demand already in the third quarter, and expect Barbie 1:06:32.720 --> 1:06:37.720 to grow in the third quarter and and the full year. 1:06:38.280 --> 1:06:41.160 Nan you called it a cultural moment, and certainly that 1:06:41.200 --> 1:06:44.200 means that it can polarize some people, at least here 1:06:44.200 --> 1:06:46.960 in the United States. Got to ask about the high 1:06:47.000 --> 1:06:50.560 profile people on the right who've criticized the film. Ben 1:06:50.560 --> 1:06:53.640 Shapiro made this forty minute YouTube video. It's been viewed 1:06:53.680 --> 1:06:56.240 nearly two million times. He says he destroys the movie. 1:06:56.240 --> 1:06:59.520 He actually burns Barbies in it. Elon Musk says, if 1:06:59.560 --> 1:07:01.960 you take a sh every time Barbie says the word patriarchy, 1:07:02.280 --> 1:07:04.800 you'll pass out before the movie ends. How do you 1:07:04.800 --> 1:07:06.960 react to that criticism? 1:07:07.440 --> 1:07:11.680 Barbie has been a flag carrier for diversity and inclusivity. 1:07:12.280 --> 1:07:16.840 Barbie inspired the limitless potential in every girl, and and 1:07:17.200 --> 1:07:20.040 the genius of Greta is what she did. She took 1:07:20.080 --> 1:07:24.360 this message, you know that that focuses on female empowerment 1:07:25.080 --> 1:07:29.560 and made this movie appealing and relevant to everyone, and 1:07:29.680 --> 1:07:33.120 people who go to the movie, you know, whether you're 1:07:33.560 --> 1:07:37.680 a Barbie fan or or you know, or looking to 1:07:37.680 --> 1:07:41.640 be entertained and inspired by by a modern day interpretation 1:07:41.760 --> 1:07:45.080 of one of the most iconic brands in modern culture. 1:07:45.640 --> 1:07:50.120 This movie Will Will Will Be, Will Be, Will Be 1:07:50.160 --> 1:07:52.720 an experience for you. And what we believe is this 1:07:52.760 --> 1:07:57.200 movie will recontextualize the way people think of Barbie and 1:07:57.240 --> 1:08:01.560 what Barbie means for the world. And we could not 1:08:01.680 --> 1:08:05.520 be more proud of the of the messages and the 1:08:05.640 --> 1:08:08.480 unique voice that Greta has in this movie. 1:08:08.720 --> 1:08:11.400 Well, and I'm curious too, does it mean that we're 1:08:11.400 --> 1:08:13.480 going to see a Barbie sequel? Or is it a 1:08:13.520 --> 1:08:16.120 case of you guys move on to other toys? 1:08:17.439 --> 1:08:19.240 You know, we have an announced sequel, and you know, 1:08:19.240 --> 1:08:21.320 we're still barely a week into the religion. 1:08:22.280 --> 1:08:24.720 But how we journalists are, We're like, okay, now, now, 1:08:24.760 --> 1:08:25.599 what what's next? 1:08:26.400 --> 1:08:28.719 You know, you're not alone, You're not alone and asking 1:08:28.760 --> 1:08:32.240 the question. But of course you know, it's such a success, 1:08:32.280 --> 1:08:35.800 such a phenomenal success, you know, of course we'd be 1:08:35.840 --> 1:08:40.479 looking to extend, extend this, and we've always said that 1:08:40.520 --> 1:08:42.800 our goal is not this is broadly not just about 1:08:42.800 --> 1:08:45.880 Barbie is We're not looking to create single movies, but 1:08:46.000 --> 1:08:50.080 to build film franchises for the long term. And of 1:08:50.120 --> 1:08:53.360 course this is part of our strategy in terms of 1:08:53.400 --> 1:08:55.880 capturing the full value from our intellectual properties. 1:08:56.200 --> 1:08:59.120 You know, does that intellectual property be it in movies 1:08:59.200 --> 1:09:02.200 or streaming series or what have you. How you guys, 1:09:02.360 --> 1:09:06.040 you know, whichever ways you go, does that ultimately become 1:09:06.800 --> 1:09:09.480 a big generator of revenues. 1:09:11.080 --> 1:09:15.840 We absolutely said that our strategy in capturing the full 1:09:15.920 --> 1:09:19.240 value of our IP outside the toy isle can be 1:09:19.439 --> 1:09:23.400 meaningful in success, you know, and we're looking to scale this. 1:09:23.400 --> 1:09:26.880 This is not just about a movie or a TV series. 1:09:26.920 --> 1:09:31.000 This is about participating in the highly accreative business verticals 1:09:31.360 --> 1:09:34.960 outside the toy isle that are all driven by big franchises, 1:09:35.080 --> 1:09:38.920 big brands, and in some cases these verticals are larger 1:09:38.960 --> 1:09:42.479 than the toy industry. So we believe that we have 1:09:44.560 --> 1:09:49.600 you know, the assets, the capabilities, the relationship and with 1:09:49.680 --> 1:09:52.960 the Barbie movie, this really positions us in a very 1:09:52.960 --> 1:09:57.720 strong way as a key player that can participate in this, 1:09:58.880 --> 1:10:03.559 in these verticals and create meaningfully shareholder value and build 1:10:03.720 --> 1:10:04.960 a meaningful business out of this. 1:10:05.320 --> 1:10:07.120 You know, It's like Carol said, this has been a 1:10:07.160 --> 1:10:09.519 busy week for you. Got to ask about the big 1:10:09.560 --> 1:10:12.519 news yesterday the co president and CEO Richard Dixon moving 1:10:12.560 --> 1:10:16.160 on to be CEO of the Gap. Let's get your 1:10:16.160 --> 1:10:17.760 comments on that. How big of a loss is this 1:10:17.800 --> 1:10:18.360 for the company. 1:10:19.520 --> 1:10:21.800 Richard is a friend and has been a great colleague 1:10:22.760 --> 1:10:25.960 and partner for me since I joined the company. But 1:10:26.560 --> 1:10:32.120 one of Richard's biggest accomplishments is that we built a 1:10:32.400 --> 1:10:37.520 very very strong team of leaders, of designers, of innovators, 1:10:37.600 --> 1:10:42.599 of creative talent within the company and the executives who 1:10:42.640 --> 1:10:47.280 take over from Richard. Between Lisa McKnight, who has been 1:10:47.880 --> 1:10:51.040 the head of Barbie since twenty and sixteen and very 1:10:51.120 --> 1:10:56.720 much manage the transformation together with Richard and the head 1:10:56.720 --> 1:10:59.320 of Dools in twenty nineteen. And Josh Silverman, who has 1:10:59.360 --> 1:11:03.320 been a Disney for twenty years that is now where 1:11:03.360 --> 1:11:09.240 he oversaw all of business third party relationships with licensees, 1:11:09.280 --> 1:11:11.839 now running our non point commercial activities. 1:11:11.920 --> 1:11:12.559 So You're not worried. 1:11:14.040 --> 1:11:17.080 Two world class leaders really taking charge and we could 1:11:17.120 --> 1:11:21.280 not be more confident of our team. He's running this business, 1:11:21.320 --> 1:11:21.599 you know. 1:11:21.560 --> 1:11:23.479 On ten seconds, got to be quick. Did you give 1:11:23.520 --> 1:11:26.080 tips to Will Farrell on playing a CEO of Mattel? 1:11:27.560 --> 1:11:30.120 I can learn a lot from him on the comedy side, 1:11:30.160 --> 1:11:33.599 but I'm a big fan and it's great to see 1:11:33.680 --> 1:11:34.599 him playing the role. 1:11:34.840 --> 1:11:38.640 Well, congratulations and we're looking forward to following more of 1:11:38.640 --> 1:11:40.880 this story and what comes next. In on christ Gairman 1:11:40.920 --> 1:11:43.080 and chief executive officer at Mattel, on the phone from 1:11:43.080 --> 1:11:45.480 elsin Gundo, California. This is Bloomberg. 1:11:45.880 --> 1:11:49.439 You're listening to the Bloomberg Business Week podcast. Catch us 1:11:49.479 --> 1:11:52.960 live weekday afternoons from three to six Eastern Listen. 1:11:52.720 --> 1:11:56.720 On Bloomberg dot com, the iHeartRadio app and the Bloomberg. 1:11:56.240 --> 1:11:59.479 Business app, or what's just live on YouTube. 1:12:00.000 --> 1:12:01.640 We're gonna talk about something different right now. We have 1:12:01.680 --> 1:12:02.760 a really cool guess or. 1:12:02.720 --> 1:12:04.320 The same, depending on your pet. 1:12:04.520 --> 1:12:07.439 That's true. He has bicycled more than thirty four hundred 1:12:07.439 --> 1:12:11.639 miles from Montreal to the Pacific Ocean. Classically trained French chef, 1:12:12.040 --> 1:12:14.439 he's founded a couple of food companies, he has sold them. 1:12:14.439 --> 1:12:16.519 He has spent more than three decades thinking about the 1:12:16.600 --> 1:12:20.200 vegetarian food world, creating everything from a veggie hot dog 1:12:20.320 --> 1:12:22.759 and more. Matt, so he knows the space. 1:12:23.320 --> 1:12:27.320 All right, I'm interested. I'm very interested to hear about 1:12:27.320 --> 1:12:30.639 this because I would love to be a vegetarian if 1:12:30.680 --> 1:12:33.679 I could. The way we treat, especially factory farm, which 1:12:33.720 --> 1:12:38.200 is almost all of our animals, from cows to chickens, 1:12:38.400 --> 1:12:39.560 is disgusting. 1:12:39.920 --> 1:12:40.679 Yeah, processes. 1:12:40.720 --> 1:12:45.000 On the other hand, meat is so yummy and it's 1:12:45.040 --> 1:12:45.839 packed with protein. 1:12:45.960 --> 1:12:46.120 Right. 1:12:46.280 --> 1:12:49.320 Also yummy is seafood, and he's now got a new 1:12:49.400 --> 1:12:52.960 venture involving vegan seafood. It's known as Conscious Foods. So 1:12:53.080 --> 1:12:56.360 with us is chef Eve Potfinn. He's present and founder 1:12:56.400 --> 1:12:59.360 of Garden. I believe I'm saying it, I hopefully correctly 1:13:00.000 --> 1:13:03.560 Conscious Food with Us on Zoom from Vancouver, British Columbia. 1:13:03.600 --> 1:13:06.200 And forgive me if I've mispronounced. I studied a lot 1:13:06.280 --> 1:13:07.839 of Spanish, not a lot of French. 1:13:09.720 --> 1:13:11.559 Next, well, it's a famous name here in New York, 1:13:11.600 --> 1:13:13.360 pot Dan, you know, yes, it is? 1:13:13.439 --> 1:13:13.800 It is? 1:13:14.280 --> 1:13:18.280 That is true. Welcome, Welcome, tell us a little bit 1:13:18.360 --> 1:13:22.200 about yourself because you have done some really interesting stuff, 1:13:22.240 --> 1:13:24.559 and you've really spent a lot of time on you know, 1:13:24.600 --> 1:13:26.960 the vegetarian world and the plant based food world. 1:13:27.000 --> 1:13:32.040 Hot come well, Matt, I'm like you. I'm a flexitarian, 1:13:32.520 --> 1:13:37.519 so you know, I believe there's you should always try 1:13:37.560 --> 1:13:40.160 to make a contribution for a bit of world. And 1:13:40.280 --> 1:13:44.360 so I was, like you said, a trained chef, and 1:13:45.040 --> 1:13:48.960 somehow I humble into the plant based business. And for 1:13:49.040 --> 1:13:51.880 the last over thirty years I've been developing different brand 1:13:51.920 --> 1:13:57.679 and very excited to present Conscious Conscious with a Cave today. 1:13:57.760 --> 1:14:00.839 So we're a new innovative brand. We're on a mission 1:14:00.880 --> 1:14:04.519 to change the way that people eat by providing a 1:14:04.560 --> 1:14:08.639 line of frozen sushi or NIGHERI and Poke boll that 1:14:09.080 --> 1:14:12.559 this is close to my heart, that it tastes good first, 1:14:13.120 --> 1:14:15.799 and it's good for the people, good for the planet, 1:14:15.880 --> 1:14:19.240 and we're so excited to launch our nationwide with folk 1:14:19.320 --> 1:14:20.519 Food this week. 1:14:21.200 --> 1:14:23.760 I mean, it's I think an issue that's close to 1:14:23.760 --> 1:14:25.839 our hearts as well. Carol and I are both scuba 1:14:25.880 --> 1:14:31.400 divers and we've all seen the problems. All of us 1:14:31.400 --> 1:14:35.559 that have been underwater have seen the problems that giant 1:14:35.840 --> 1:14:41.000 fishing expeditions create and then for a while I thought, Okay, well, 1:14:41.040 --> 1:14:44.240 factory farm salmon, that must be a better alternative. Turns 1:14:44.240 --> 1:14:47.280 out it really isn't because they don't do a good 1:14:47.360 --> 1:14:52.160 job of raising those fish either. But the taste has 1:14:52.200 --> 1:14:55.280 been a problem for me. I've only tried artificial you know, 1:14:55.360 --> 1:14:59.360 plant based beef burgers like Impossible Burger or what's the 1:14:59.439 --> 1:15:03.479 other one beyond beyond meat. I couldn't really stomach either 1:15:03.520 --> 1:15:08.320 one of them. So how do you overcome that problem? 1:15:08.760 --> 1:15:11.759 And that's why I'm so excited to be here talking 1:15:11.800 --> 1:15:15.599 to you, Matthew Caroll, because evidently you are conscious, You 1:15:15.840 --> 1:15:20.280 are aware of your environment and the way the younger 1:15:20.320 --> 1:15:24.599 population today they vote with them mout and they say, well, 1:15:24.640 --> 1:15:26.840 I want a better future, So it has to be 1:15:26.880 --> 1:15:30.920 something that tastes good, it's good for the environment. And 1:15:31.000 --> 1:15:33.920 another thing that we're excited about conscious is that we 1:15:34.120 --> 1:15:37.840 have price parity. So a lot of the company that 1:15:37.920 --> 1:15:40.400 you mentioned before, I think it's something like twenty percent 1:15:40.439 --> 1:15:43.439 of the population that would like to incorporate plant based 1:15:44.439 --> 1:15:47.639 protein in their diet, but they say it's too expensive. Well, 1:15:47.640 --> 1:15:50.720 with the person I think of this new generation innovative 1:15:50.760 --> 1:15:54.640 brand that it's price parity it's not a more expensive 1:15:54.720 --> 1:15:59.440 than nutuitional traditional protein, but because of my chef background, 1:16:00.479 --> 1:16:03.920 it has to taste good. And a consumer now they're 1:16:03.960 --> 1:16:09.400 looking for sustainable choice that are affordable, and so you 1:16:09.439 --> 1:16:13.280 can go to Whole Food and buy a California role, 1:16:14.920 --> 1:16:19.200 a Japanese courreer, the gary or salmon poke bol and 1:16:19.240 --> 1:16:21.519 it's going to cost you seven ninety nine or eight 1:16:21.640 --> 1:16:23.920 ninety nine. You don't have to break the bank to 1:16:23.960 --> 1:16:24.760 eat consciously. 1:16:24.840 --> 1:16:27.360 Now, I guess the one thing too I will go 1:16:27.439 --> 1:16:29.720 back to is things like impossible and beyond me. What 1:16:29.800 --> 1:16:33.559 I had had a problem with Eve is that there 1:16:33.640 --> 1:16:36.760 was a lot of sodium in them, and to me, 1:16:36.880 --> 1:16:41.000 that wasn't I think of planet based proteins and I 1:16:41.040 --> 1:16:44.080 think healthier and less impact on the environment. Like it 1:16:44.360 --> 1:16:46.000 has to take off a bunch of boxes for me 1:16:46.479 --> 1:16:48.840 in order and it has to taste good. So tell 1:16:48.920 --> 1:16:53.680 us about the nutritional value or some of the metrics 1:16:54.720 --> 1:16:56.400 so that if I turn over the box, what am 1:16:56.400 --> 1:16:58.760 I going to see when it comes to sodium or whatever. 1:16:58.840 --> 1:17:00.639 The way there's a lot of boxes has to tick 1:17:01.000 --> 1:17:04.599 better for the environment, Yep. It has to cost the 1:17:04.640 --> 1:17:10.200 same or around the same, right, it's got to taste good, 1:17:10.840 --> 1:17:14.559 and it's got to be good for you because obviously, Eve, 1:17:14.800 --> 1:17:17.640 you know, there's a lot of protein and meat and 1:17:17.680 --> 1:17:20.479 it's not packed with salt, as Carol says. 1:17:20.280 --> 1:17:25.240 Yeah, totally right, And so we are looking and Matt, 1:17:25.800 --> 1:17:28.920 You're totally right. You know, in our lifetime, we know 1:17:29.080 --> 1:17:32.000 that somewhere in the next twenty thirty years we're going 1:17:32.080 --> 1:17:34.800 to drive elect a car or any other form of 1:17:35.320 --> 1:17:39.320 car that is not fueled by petroleum. But it's the 1:17:39.320 --> 1:17:42.360 same thing in our life. We know most of the farm, 1:17:42.760 --> 1:17:44.240 most of the official's going to EAT's going to be 1:17:44.280 --> 1:17:47.759 farm farm raised, and you know, a lot of salmon 1:17:47.800 --> 1:17:50.759 in the market went now it's artificial color, artificial flavor, 1:17:50.800 --> 1:17:53.720 et cetera. So we're on a mission to change the 1:17:53.720 --> 1:17:56.640 way we eat. I said earlier, is because we have 1:17:56.760 --> 1:18:00.280 a third of the sodium of traditional sushi that you 1:18:00.320 --> 1:18:04.439 eat in the supermarket, we have less fat, and we 1:18:04.560 --> 1:18:10.080 have ingredient that are easily recognizable. So our tuna as 1:18:10.120 --> 1:18:14.040 first ingredients is organic tomato. The second one is conjact. 1:18:14.200 --> 1:18:19.599 Conjact is a mood vegetable that has tremendous dietary fiber 1:18:20.160 --> 1:18:24.120 and it's good for you. So yes, there's many books 1:18:24.640 --> 1:18:28.439 that the customer is looking. First of all is the price. Well, 1:18:28.600 --> 1:18:31.240 we take care of that one. Nutritional We have about 1:18:31.320 --> 1:18:36.439 half of the protein right now that salmon or tuna has. 1:18:36.800 --> 1:18:39.640 But it's okay. Most people don't buy just because of 1:18:39.680 --> 1:18:42.200 the protein, they buy because of the whole package. But 1:18:42.240 --> 1:18:45.519 we are working very closely to trying to increase the 1:18:45.640 --> 1:18:51.200 level of protein. No artificial ingredient, non gmo, organic ingredients, etc. 1:18:51.600 --> 1:18:55.120 So I think we've done a good job putting the package. 1:18:55.160 --> 1:18:58.960 But most important, it's convenient. My wife likes to say 1:18:59.080 --> 1:19:02.720 frozen to me in five minutes. So and people ask 1:19:02.800 --> 1:19:05.200 me that why do youse in sushi? Well there's twenty 1:19:05.280 --> 1:19:09.439 thousand sushi restaurant in North America. There's a need for 1:19:09.520 --> 1:19:11.440 it to have it in your freeze. 1:19:11.640 --> 1:19:13.760 But you know, something like salmon, right, I go for 1:19:13.840 --> 1:19:16.880 it because of the omega three fatty acids. Right, that's 1:19:16.920 --> 1:19:19.920 good for me, and I would rather you know, kind 1:19:19.960 --> 1:19:22.080 of grew up with a family. You know, everything in 1:19:22.160 --> 1:19:26.000 moderation and better to eat as true to how it 1:19:26.160 --> 1:19:31.160 is grown or cultivated, hopefully and do less of it. 1:19:31.280 --> 1:19:33.120 So do I get that benefit? 1:19:34.120 --> 1:19:38.559 You do? We have only got three comes from different sorts. 1:19:38.760 --> 1:19:42.280 One of them is the fish oil, but it's also 1:19:42.600 --> 1:19:48.479 vegetable oil that we incorporate in our product that has 1:19:48.680 --> 1:19:51.720 the same level as ome got three that you have 1:19:51.960 --> 1:19:53.360 in traditional. 1:19:52.800 --> 1:19:56.439 Fish Interesting, really interesting, are. 1:19:56.360 --> 1:19:59.719 You I'm convinced. I'll tell you what. I'm convinced enough. 1:20:00.880 --> 1:20:03.439 We have a whole Foods right down here. Try on 1:20:03.520 --> 1:20:06.200 third and fifty seventh. I'll walk down there and get 1:20:06.240 --> 1:20:06.920 some for sure. 1:20:07.400 --> 1:20:08.040 Yeah, I'm right. 1:20:09.320 --> 1:20:12.639 Just follow the instruction, very tree easy way to prepare 1:20:12.640 --> 1:20:15.920 it microwave one minute. If you don't like microwave, you 1:20:15.960 --> 1:20:20.080 can put the patent pending packaging in hot water for 1:20:20.320 --> 1:20:23.640 eight minutes, or you could leave it at room temperature 1:20:23.640 --> 1:20:24.160 and it sweady. 1:20:24.160 --> 1:20:28.240 Polunch, We're talking with Eve Puffin, president and founder of 1:20:28.320 --> 1:20:33.120 Conscious Foods, on Zoom from Vancouver, British Columbia. Hey, one 1:20:33.120 --> 1:20:34.680 thing I wanted to ask you. I mean, Matt and 1:20:34.720 --> 1:20:36.679 I talk a lot about food and just the way 1:20:36.720 --> 1:20:39.880 we produce things and trying to feed this world, and 1:20:40.000 --> 1:20:42.240 a lot of the ways that we do it are 1:20:42.360 --> 1:20:44.720 not great for the environment. There's also a lot of 1:20:44.760 --> 1:20:49.080 food waste. And there's an interesting Bloomberg opinion columnist that 1:20:49.160 --> 1:20:52.040 talks about big food should be esg's next target. Basically, 1:20:52.080 --> 1:20:56.040 just going after the alter processed food makers. 1:20:55.760 --> 1:20:59.559 Should be esg's first target. Should have been esg's first target, 1:20:59.600 --> 1:21:04.120 because if you do, you want to stop carbon emissions, right, 1:21:04.240 --> 1:21:07.639 you got to go after the beef industry, even before 1:21:07.760 --> 1:21:10.040 you go after the internal combustion engine. 1:21:10.200 --> 1:21:13.760 So how do you think about all of this? You know, 1:21:13.760 --> 1:21:16.839 you've been working in the food industry for a long time. 1:21:17.520 --> 1:21:19.720 How do you think about it? And what is a 1:21:19.760 --> 1:21:20.799 better way forward? 1:21:22.560 --> 1:21:27.360 Well, it's about diversity. You know. Last year August, we 1:21:28.240 --> 1:21:33.920 reached a milestone of eight billion in population. We know that, 1:21:34.680 --> 1:21:37.800 and that's what's one of the reasons. You know, I 1:21:37.920 --> 1:21:42.559 have a younger daughter. When she was born not that 1:21:42.720 --> 1:21:45.559 long ago, twenty five years ago, the population was three 1:21:45.600 --> 1:21:48.599 point seven billion. Now we're at eight and we're going 1:21:48.640 --> 1:21:52.879 to be at ten billion. So and that was my idea, 1:21:52.960 --> 1:21:54.640 and I said, it makes a lot of sense. We know, 1:21:55.120 --> 1:21:58.000 and taking Vancouver Simon reached the price of thirty dollars 1:21:58.080 --> 1:22:01.680 a pound this summer, So traditional protein is going to 1:22:01.720 --> 1:22:04.760 go higher and higher in price, So why not diversify 1:22:04.840 --> 1:22:08.320 the protein and use the plant base, you know, and 1:22:08.360 --> 1:22:13.320 the question is having manufactured and processor like the innovator 1:22:13.400 --> 1:22:17.479 that takes those protein, the p protein, all the different 1:22:17.520 --> 1:22:20.040 sourts of protein, put it in a way and forming 1:22:20.080 --> 1:22:23.799 in the shape that people are accustomed to. Because people 1:22:23.840 --> 1:22:27.840 won't start feeding themselves lentil and chickpea and a thing 1:22:27.960 --> 1:22:31.680 like this is too complicated. So and that's what we do. 1:22:31.720 --> 1:22:35.800 We use traditional sushi and we make our own snow 1:22:35.840 --> 1:22:38.679 crab or on now on salmon. And I'm really excited 1:22:38.680 --> 1:22:41.120 for you, Matt, to go try it because you're going 1:22:41.160 --> 1:22:46.760 to say, Wow, this tastes great. And I feel very 1:22:46.760 --> 1:22:49.920 proud about what we accomplish. And I think the world 1:22:50.000 --> 1:22:53.160 is changing. The younger population is voting with them out 1:22:53.160 --> 1:22:56.040 and I think it's a question of using all our 1:22:56.160 --> 1:22:58.679 source of protein. That is what we're going to find 1:22:58.960 --> 1:23:02.840 a solution, not beef, not just seafood, but using the 1:23:02.920 --> 1:23:06.880 protein from a variety of sorts. Seaweed is fantastic source 1:23:06.920 --> 1:23:07.760 of protein. 1:23:08.520 --> 1:23:13.160 All right. So and the sushi, it's packed full of protein. 1:23:13.520 --> 1:23:17.000 What's the protein and the calorie value of that of 1:23:17.000 --> 1:23:19.040 that sushi those California roles. 1:23:20.320 --> 1:23:23.640 Calorie is about three hundred and fifty calorie for eight 1:23:23.760 --> 1:23:28.880 coin and it's about you know, traditional sushi is about 1:23:28.920 --> 1:23:33.040 eight percent protein. This is about four percent. So but 1:23:33.160 --> 1:23:36.439 most people don't go to the sushi and say I'm 1:23:36.479 --> 1:23:42.120 eating there because of protein. Most people have too much 1:23:42.200 --> 1:23:46.240 protein and dead dye. That's that's that's the reality. So 1:23:46.320 --> 1:23:49.879 I think it's more about nutrition. What you bring nutrition, 1:23:50.000 --> 1:23:53.960 and I think our product is pack of nutrition. We 1:23:54.120 --> 1:23:57.280 have all the vitamin d A, b et cetera that 1:23:57.400 --> 1:24:00.640 your body need, so and it. But most important is 1:24:00.760 --> 1:24:04.320 what we're offering is convenience. You can have sushi on 1:24:04.439 --> 1:24:07.200 a giary, poke bol at lunch, dinner, smack, have a 1:24:07.240 --> 1:24:10.920 party with your friend, so having the product available in 1:24:10.960 --> 1:24:14.519 your freezer and ready in five minutes. And it's about 1:24:14.560 --> 1:24:17.800 giving a choice to the consumer that whenever you want, 1:24:18.000 --> 1:24:20.519 you can have a product that you like. Like I 1:24:20.560 --> 1:24:24.200 said earlier, twenty thousand sushi, five thousand, poke bowl, wrestlant, 1:24:24.439 --> 1:24:24.800 there's a. 1:24:24.760 --> 1:24:28.880 Market for so Eve as demand. Let's assume that this 1:24:29.080 --> 1:24:32.719 takes off and as demand picks up, can you keep 1:24:32.760 --> 1:24:36.040 it at the cost level that you have now or 1:24:36.080 --> 1:24:40.000 will just like with kind of regular food, it just 1:24:40.040 --> 1:24:42.839 feels like, as you said, the growing population, like demand 1:24:42.920 --> 1:24:45.519 just has gotten out of control. And as the developed 1:24:45.560 --> 1:24:49.080 world has a much more or the developing world has 1:24:49.120 --> 1:24:51.479 more of a developed diet, like right, there's more demand 1:24:51.479 --> 1:24:54.800 of that traditional food thing. So the cost, I'm just 1:24:54.920 --> 1:24:58.920 curious about the process and the cost as demand ramps up. 1:24:59.560 --> 1:25:04.120 One of the main inputs pease, Well, the rice comes 1:25:04.160 --> 1:25:05.400 from California. 1:25:05.520 --> 1:25:09.439 All our vegetables are from British Columbia, so we're trying 1:25:09.439 --> 1:25:12.400 to buy local as possible. But we have a thirty 1:25:12.400 --> 1:25:17.960 four thousand square feet facility in Vancouver. Over here we 1:25:18.040 --> 1:25:22.120 can produce four thousand row an hour, so that's a 1:25:22.160 --> 1:25:24.679 pair amount of volume. But our plan is to open 1:25:24.720 --> 1:25:28.840 a factory or a processing facility in the US, one 1:25:28.920 --> 1:25:33.280 in Asia, and one in Europe. So your question, Carol 1:25:33.439 --> 1:25:37.200 is more about ingredient. Has you increased the demand? Well, 1:25:37.200 --> 1:25:42.000 the view with root vegetable is you can grow more, 1:25:42.280 --> 1:25:45.599 you know, from a I'm not anti beef, I'm not 1:25:45.760 --> 1:25:51.920 anti fish, but it's just it's not a logical way 1:25:51.960 --> 1:25:55.200 to grow your protein. It takes eighteen months to raise 1:25:55.200 --> 1:25:58.040 a cattle and half of the you know, take you 1:25:58.360 --> 1:26:00.840 feed it more than what you get at the end, 1:26:00.840 --> 1:26:03.360 so versus the plant based protein. That's why it makes 1:26:03.720 --> 1:26:04.760 so much sense. 1:26:04.520 --> 1:26:07.920 Even with climate change, even with climate change making it 1:26:08.000 --> 1:26:10.240 sometimes more problematic or difficult. 1:26:10.439 --> 1:26:14.080 And depending what you're growing, Carol, you see if you're 1:26:14.120 --> 1:26:18.120 growing more corn or more wheat or more soy. But 1:26:19.080 --> 1:26:22.599 you know, there's a lot of place in Asia, for example, 1:26:22.680 --> 1:26:27.280 that's where the root vegetable conscious. It's all over Asia. 1:26:27.439 --> 1:26:30.920 But rice, there's lots of room to grow rice and 1:26:31.000 --> 1:26:33.400 so and you need to you need to eat something. 1:26:33.439 --> 1:26:36.000 You know, at one point people asking me why in 1:26:36.040 --> 1:26:38.800 my previous business, why are you using wheat or soy? 1:26:38.800 --> 1:26:41.000 Except what I said, I don't use nil, I don't 1:26:41.080 --> 1:26:43.120 use dairy, I don't use egg. You need to eat 1:26:43.120 --> 1:26:47.280 food something you can't just live with with water and air. 1:26:47.439 --> 1:26:50.040 And I think the food we grow, the food we 1:26:50.400 --> 1:26:54.960 use that conscious is very good. And yes, it's sustainable. 1:26:56.280 --> 1:26:58.120 Interesting, all right, we're going to leave it on that note. 1:26:58.160 --> 1:27:02.040 Really really fascinating. And I do feel like more and 1:27:02.120 --> 1:27:06.720 more we continue to see the food space slowly being disrupted, 1:27:06.720 --> 1:27:07.479 if you will. 1:27:07.520 --> 1:27:10.280 Yeah, well, And I also the deeper I look into it, 1:27:10.280 --> 1:27:13.479 the more problems I have with the way our food 1:27:13.600 --> 1:27:18.080 is produced or farmed or caught. And as I said, 1:27:18.080 --> 1:27:20.799 you know, salmon is one of the biggest conundrums because 1:27:20.840 --> 1:27:23.559 I don't want to support industrial fishing and I don't 1:27:23.560 --> 1:27:27.559 want to support the factory farming of salmon, but I 1:27:27.640 --> 1:27:28.439 love salmon. 1:27:28.680 --> 1:27:29.920 There was just a story did you see at the 1:27:29.960 --> 1:27:32.599 New York Times about the fate of Alaska's king salmon 1:27:32.760 --> 1:27:35.920 and starving orcas at orcas like don't have enough food, 1:27:36.160 --> 1:27:37.760 and so they're trying to figure out what to do, 1:27:37.840 --> 1:27:41.120 and they're thinking about maybe that we have to stop 1:27:41.160 --> 1:27:43.680 fishing them. But then you've got, you know, folks that 1:27:43.760 --> 1:27:44.360 rely on it. 1:27:44.360 --> 1:27:46.679 For we can't and you can't, they won't stop. 1:27:47.280 --> 1:27:50.720 I don't know, it's just tricky. Eve. Thank you so much, 1:27:50.800 --> 1:27:53.240 really appreciate it, Eve Pop, and hopefully you'll come back 1:27:53.280 --> 1:27:55.080 soon and give us an update on the business. President 1:27:55.120 --> 1:27:58.320 and founder of Conscious Foods. Showing us on zoom from Vancouver, 1:27:58.560 --> 1:28:02.559 British Columbia. 1:28:06.640 --> 1:28:10.200 You're listening to the Bloomberg Business Week podcast. Catch us 1:28:10.240 --> 1:28:14.280 live weekday afternoons from three to six Easter on Bloomberg Radio, 1:28:14.479 --> 1:28:17.759 the Bloomberg Business app, and YouTube. You can also listen 1:28:17.840 --> 1:28:20.960 live on Amazon Alexa from our flagship New York station, 1:28:21.400 --> 1:28:24.160 Just say Alexa Play Bloomberg eleven thirty. 1:28:26.040 --> 1:28:27.559 So we're gonna take a little bit of a break 1:28:27.560 --> 1:28:30.360 from earnings from FED, talk from yeal curves. And because 1:28:30.360 --> 1:28:31.799 it's summer, we're gonna talk some barbecue. 1:28:31.840 --> 1:28:35.479 Okay with that, Well, I mean not, It's not just 1:28:35.560 --> 1:28:39.000 like a summer fun session, right, because this actually is 1:28:39.280 --> 1:28:43.639 very closely connected to markets, to inflation, to the FED, 1:28:44.000 --> 1:28:46.040 because the costs have been soaring. 1:28:46.200 --> 1:28:48.880 I just said we're gonna take a break. Okay, gosh, okay, 1:28:49.000 --> 1:28:52.040 can you just follow my lead? Okay, all right, let's 1:28:52.040 --> 1:28:52.360 get to it. 1:28:52.400 --> 1:28:52.639 Lower. 1:28:52.680 --> 1:28:54.400 Ray Dickie is with us. She's CEO of the more 1:28:54.400 --> 1:28:57.240 than eighty year old family run barbecue franchise business, Dicky's 1:28:57.240 --> 1:29:00.960 Barbecue Restaurant. It's based in Dallas. Six hundred and fifty 1:29:01.000 --> 1:29:05.639 Dickeys Barbecue pits locations in forty four US dates eight 1:29:05.720 --> 1:29:07.800 other countries. I want to confirm some of these numbers 1:29:07.840 --> 1:29:10.320 with her. Laura joining us on Zoom in Texas. Laura 1:29:10.360 --> 1:29:13.160 is so delighted to have you here with Matt and myself. 1:29:13.200 --> 1:29:14.679 And I hate to say it, I'm going to say 1:29:14.760 --> 1:29:20.679 he is right because labor beef, this is certainly our world. 1:29:20.760 --> 1:29:23.200 First of all the business of barbecue. How's it going? 1:29:23.280 --> 1:29:24.040 Tell us about it. 1:29:24.640 --> 1:29:26.840 You know, in general, the business of barbecue is good, 1:29:27.040 --> 1:29:30.360 but you are absolutely right, those macroeconomic factors that you 1:29:30.479 --> 1:29:32.639 see and you talk about every day all the time 1:29:32.880 --> 1:29:35.800 are definitely affecting us because you know, I hate to 1:29:35.800 --> 1:29:38.679 say this for Duncan, but America runs on trucks actually, 1:29:39.080 --> 1:29:42.360 and so every part of the supply chain has stress 1:29:42.439 --> 1:29:45.240 for us, whether that's it's all the fuel costs, labor 1:29:45.280 --> 1:29:48.880 costs are beef packers, for example, going to a shorter 1:29:49.000 --> 1:29:52.200 work week is directly affecting the price of beef in 1:29:52.240 --> 1:29:54.479 the market. You know, the beef average this year has 1:29:54.479 --> 1:29:57.519 been out about about four dollars and eighty three cents. 1:29:57.560 --> 1:29:59.599 That's about two cents higher than it was in an 1:29:59.600 --> 1:30:02.519 all time last year. You know, our price actually is 1:30:02.560 --> 1:30:05.280 about three thirty four pound because of our purchasing power, 1:30:05.560 --> 1:30:08.120 we're actually with the number of restaurants that we have 1:30:08.960 --> 1:30:12.719 one of the largest, the largest purchaser of beef brisket 1:30:12.840 --> 1:30:16.040 in the country in the restaurant space. And so you know, 1:30:16.160 --> 1:30:19.360 we really really feel that food inflation. And so while 1:30:19.400 --> 1:30:22.400 business is good, we've certainly had to be very proactive. 1:30:23.000 --> 1:30:26.000 We've taken many reductions, you know, actually in our eighty 1:30:26.040 --> 1:30:28.880 two year history, and this is the largest menu reduction 1:30:28.960 --> 1:30:31.479 we've ever taken. We've cut our menu by forty one 1:30:31.560 --> 1:30:35.000 percent to fight food inflation, to keep from passing on 1:30:35.360 --> 1:30:37.320 all of those costs to our guests. 1:30:37.400 --> 1:30:42.519 So certainly, chet, let me, let's let's try and break 1:30:42.520 --> 1:30:46.880 this down a little bit. Because so first of all, 1:30:46.920 --> 1:30:49.880 on your menu, when you see prices of beef, I 1:30:49.880 --> 1:30:54.400 think have risen a lot more than pork, has risen 1:30:54.439 --> 1:30:57.160 more than chicken. If i'm if I'm not mistaken, I 1:30:57.200 --> 1:31:00.120 know that feed costs are much higher than cattle, it 1:31:00.200 --> 1:31:04.320 is smaller. And so what does this mean for your menu? 1:31:04.439 --> 1:31:07.280 Do you raise the price then of your beef products? 1:31:07.360 --> 1:31:10.559 Are people choosing more chicken? Are you trying to offer 1:31:10.640 --> 1:31:15.400 more interesting chicken, you know, entrees so that people take 1:31:15.400 --> 1:31:17.800 those instead of pork? How does it? How do you 1:31:17.840 --> 1:31:18.320 work it out? 1:31:19.320 --> 1:31:21.760 Absolutely well? So, first, you're absolutely right, beef has been 1:31:21.760 --> 1:31:24.880 the most effective. It has the largest market cycle, if 1:31:24.880 --> 1:31:27.320 you will, it's actually a ten year cycle, but the 1:31:27.400 --> 1:31:30.360 last three years or really make the most difference in 1:31:30.760 --> 1:31:33.040 that price per pound that you're seeing when you pay 1:31:33.120 --> 1:31:35.560 you go to the grocery store, you certainly go to restaurants, 1:31:35.600 --> 1:31:37.639 and so that price per pound hid an all time 1:31:37.760 --> 1:31:40.599 high last year, and again we're two cents above that 1:31:41.600 --> 1:31:44.600 this year, and we expect that to stay stable, but 1:31:44.680 --> 1:31:47.080 in order to you know, not pass all of that 1:31:47.200 --> 1:31:50.080 onto guests, which there's certainly a tolerance that that market 1:31:50.120 --> 1:31:53.080 tolerance that guests just can't simply absorb you price yourself 1:31:53.120 --> 1:31:55.479 out of the market. So we certainly do shift to pork. 1:31:55.520 --> 1:31:57.679 It's certainly that for us the summer of pulled pork, 1:31:57.680 --> 1:32:00.519 if you will. We have a wonderful pulled pork sandwich, 1:32:00.760 --> 1:32:04.320 our kicken comeback sandwich, which is great pulled pork with 1:32:04.360 --> 1:32:08.360 some wonderful kicking comeback claw on it. And we're doing 1:32:08.439 --> 1:32:11.760 that intentionally to guide guests towards pork. Chicken is in 1:32:11.840 --> 1:32:14.160 a good place. It's still high, but not as high 1:32:14.200 --> 1:32:16.679 as it has been. It's about three dollars and sixty 1:32:16.720 --> 1:32:19.120 two cents a pound right now. It's certainly taken a 1:32:19.160 --> 1:32:21.960 break from its high two years ago. And you can 1:32:22.040 --> 1:32:24.439 see the influx of the wing business as well as 1:32:24.479 --> 1:32:26.680 the Avian flu and some other things like that, but 1:32:26.800 --> 1:32:29.640 chicken has just a much shorter market cycle, so it 1:32:29.680 --> 1:32:33.280 can recover much quicker so that you'll see the flux 1:32:33.439 --> 1:32:36.240 of chicken more so, and that's why you'll see specials 1:32:36.320 --> 1:32:38.920 roll on and off with chicken with more frequency. Although 1:32:38.920 --> 1:32:41.400 there's a lot of chicken in the market, it's one 1:32:41.439 --> 1:32:43.439 of the most popular proteins out there, so you have 1:32:43.479 --> 1:32:45.040 to be kind of careful with that because it can 1:32:45.160 --> 1:32:48.519 really fluctuate pricing again due to that short of market. 1:32:48.520 --> 1:32:51.120 So there's nothing like that. I'm I'm going to say, 1:32:51.120 --> 1:32:52.599 there's nothing like a brisket sandwich. 1:32:54.240 --> 1:32:54.960 I agree with you. 1:32:55.120 --> 1:32:57.439 I love brisket well. So then how do you guys 1:32:57.479 --> 1:32:59.960 deal with some of the stress points? I'm assuming wages too, 1:33:00.200 --> 1:33:01.919 and labor is another issue, right. 1:33:02.320 --> 1:33:06.000 It is, And that's where it's really challenging for folks 1:33:06.320 --> 1:33:08.600 in the business at large, in the restaurant industry is 1:33:08.640 --> 1:33:10.920 because again going back to that supply chain, there is 1:33:11.000 --> 1:33:14.320 stress at every point in the supply chain, whether it's 1:33:14.360 --> 1:33:17.040 the fuel costs for the trucks to get there. And 1:33:17.080 --> 1:33:20.080 with the restaurant business, you have labor not only in 1:33:20.120 --> 1:33:23.000 the supply chain, but obviously in the restaurants themselves, and 1:33:23.040 --> 1:33:26.400 then the food inflation that all guests all consumers are feeling. 1:33:26.439 --> 1:33:28.840 We certainly feel as well. So you have that and 1:33:28.880 --> 1:33:31.840 you have to be really, really really careful about where 1:33:31.880 --> 1:33:35.080 you can take price, but you also have to maintain value. 1:33:35.080 --> 1:33:37.479 And so for us, we shrunk our menu down to 1:33:37.520 --> 1:33:40.320 our core proteins. We cut anything from the menu that 1:33:40.360 --> 1:33:43.160 we didn't feel that we could pass on, you know, 1:33:43.280 --> 1:33:45.160 what we would have to in order to sell that. 1:33:45.240 --> 1:33:47.920 For example, we cut smoke turkey, which has been a 1:33:47.960 --> 1:33:50.360 staple for us and it will only be here for 1:33:50.400 --> 1:33:52.639 the holidays, but we just didn't feel that we could 1:33:52.680 --> 1:33:55.200 pass that on to the guest, and so we made 1:33:55.200 --> 1:33:56.480 that menu reduction. 1:33:56.280 --> 1:33:57.720 Go back to diesel. Because I just looked at Matt, 1:33:57.760 --> 1:33:59.719 I'm like, how many energy costs come down? Is like diesel? 1:33:59.800 --> 1:33:59.920 Right? 1:34:00.080 --> 1:34:01.560 You guys use diesel to cook it? 1:34:01.640 --> 1:34:01.760 All? 1:34:01.880 --> 1:34:02.120 Right? 1:34:02.320 --> 1:34:05.639 Usually? Well we do, so we use it. There's lots 1:34:05.680 --> 1:34:08.160 of different pieces, but yes we do. But it's certainly 1:34:08.200 --> 1:34:10.599 in the restaurant in the cooking process, but it's also 1:34:10.640 --> 1:34:13.720 in the freight everything. And sometimes what people forget is 1:34:13.760 --> 1:34:16.600 when you look at all of the markets that you 1:34:16.680 --> 1:34:20.280 see a lot of different opportunities in retail or folks 1:34:20.280 --> 1:34:23.280 that have longer shelf life on their products. But for us, 1:34:23.280 --> 1:34:25.960 because we have two to three days of perishable product 1:34:26.000 --> 1:34:29.360 on hand, we're so susceptible to what the markets are doing. 1:34:29.640 --> 1:34:33.120 And so it's very, very very hard to be able 1:34:33.160 --> 1:34:36.040 to work around that labor cost of stress points, that 1:34:36.120 --> 1:34:39.519 fuel costs, the labor shortages, and then what the commodity 1:34:39.520 --> 1:34:42.040 markets do. And so we're thankfully in a position where 1:34:42.040 --> 1:34:45.880 we have enough restaurants and we have enough purchasing power 1:34:45.880 --> 1:34:48.800 in the market that we can again kind of speculate 1:34:48.840 --> 1:34:52.800 out by buy with speculation, buy and hold, do those 1:34:52.800 --> 1:34:55.439 sorts of things that a lot of smaller restaurant chains 1:34:55.479 --> 1:34:57.880 don't have the opportunity to do, or mom and pop 1:34:58.040 --> 1:34:59.240 may not have the opportunity. 1:34:59.360 --> 1:35:01.320 Take us back, Laura Ray, and talk to us about 1:35:01.320 --> 1:35:03.920 the business and your involvement in it, because I think 1:35:03.920 --> 1:35:06.080 a lot of people are listening. You know, they think 1:35:06.200 --> 1:35:08.599 of Dickies as this family owned business and they're like, 1:35:08.720 --> 1:35:13.000 how come you know, I don't know, Travis, Dicky's granddaughter 1:35:13.120 --> 1:35:16.960 is like a PhD economist. But you actually have extensive 1:35:17.040 --> 1:35:22.320 experience in the markets. You've worked with agencies and covered 1:35:22.360 --> 1:35:27.400 big restaurant chains like Chick fil A and others. So 1:35:27.479 --> 1:35:30.559 you have you come to this CEO position with real 1:35:30.640 --> 1:35:33.960 experience in the industry and you have really grown the business. 1:35:33.960 --> 1:35:36.120 You have six hundred and fifty restaurants around the world. 1:35:36.120 --> 1:35:38.920 It's not just like one barbecue pit in Texas. So 1:35:39.200 --> 1:35:40.719 tell us, tell us about the business. 1:35:40.800 --> 1:35:42.960 My family in Texas would say just would not be 1:35:43.000 --> 1:35:45.360 the way to say Texas is a good place to be. 1:35:45.520 --> 1:35:49.280 Anyway, go ahead, Well, you know, actually I'm married in 1:35:49.360 --> 1:35:51.880 I will say that, so I'm actually the granddaughter in law. 1:35:52.520 --> 1:35:54.920 I missed a meeting and got demoted to CEO, is 1:35:54.920 --> 1:35:57.439 how I like to put it. But I did. I 1:35:57.520 --> 1:35:59.840 did have a lot of experience in the industry before 1:35:59.880 --> 1:36:03.000 I joined actually married and met Roland and then was 1:36:03.080 --> 1:36:05.559 drafted into service and thought it would be temporary. And 1:36:05.880 --> 1:36:09.280 here I stand today. But it's been just that kind of. 1:36:09.280 --> 1:36:13.320 Journey of working always in hospitality, technology and strategic planning 1:36:13.680 --> 1:36:17.080 and a lot of restaurant clients in that genre, and 1:36:17.120 --> 1:36:19.360 so have worked with lots of different brands and there's 1:36:19.400 --> 1:36:20.960 a lot of similarity, and then there's a. 1:36:20.880 --> 1:36:24.320 Lot that's unique about Dickies. But we certainly have grown it. 1:36:24.600 --> 1:36:27.040 We are now third generation. We are still family owned 1:36:27.080 --> 1:36:30.000 and operated. I would love for guests to just think 1:36:30.040 --> 1:36:32.599 that their neighborhood Dickies is the only Dickies. I think, 1:36:32.640 --> 1:36:36.280 then we're doing something right, because that's how barbecue should feel. 1:36:36.320 --> 1:36:39.519 It's that passion food. It's really an experience. We smoke 1:36:39.560 --> 1:36:41.960 all of our meats on site. You go in and 1:36:42.000 --> 1:36:44.280 you should be able to smell that hickory smoke. You 1:36:44.280 --> 1:36:47.439 should be able to have that experience where you're hand chopped, 1:36:47.479 --> 1:36:49.880 sliced or if you are a pulled coort fan that 1:36:50.000 --> 1:36:50.679 brass stop. 1:36:50.840 --> 1:36:54.680 I'm starving, pet starving now, So wait, just quickly, we 1:36:54.720 --> 1:36:56.960 only have about thirty seconds. Where's the growth come? Because 1:36:57.000 --> 1:36:59.519 you led the company into international expansion? Is that the 1:36:59.560 --> 1:37:02.720 growth and unfortunately just got about thirty seconds left. 1:37:03.360 --> 1:37:06.160 Yes, there's international growth, but there is still domestic growth. 1:37:06.160 --> 1:37:08.759 Believe it or not. California is our second largest market, 1:37:08.840 --> 1:37:11.880 so it's not all vegan country out there. Folks still 1:37:11.920 --> 1:37:14.799 do like their barbecue, and there's just opportunity in barbecue. 1:37:14.800 --> 1:37:16.519 There's a lot of burgers, there's a lot of chicken, 1:37:16.560 --> 1:37:19.640 but there's less and less a really really great barbecue. 1:37:19.680 --> 1:37:21.760 So there's still markets here. 1:37:21.800 --> 1:37:23.439 It's funny you said californ because I was gonna say, 1:37:23.439 --> 1:37:25.880 what about plant based barbecue? Is that something that you 1:37:25.920 --> 1:37:27.080 have to think about just real quick? 1:37:27.240 --> 1:37:31.519 Yeah, God, no, no, no, you know what that's I 1:37:31.640 --> 1:37:34.400 like to say, we can serve something for everybody. That's 1:37:34.439 --> 1:37:36.840 where we would do a giant stuff baker without meat, 1:37:36.920 --> 1:37:40.440 but everything else will be real traditional barbecue. 1:37:40.479 --> 1:37:43.080 All right, Well, come back soon, Loorery Dicky, but you 1:37:43.120 --> 1:37:47.360 have to bring some barbecue next time. Louray Dicky. She's 1:37:47.439 --> 1:37:51.160 chief executive officer of Dicky's Barbecue Restaurants. On Zoom from Dallas. 1:37:51.240 --> 1:37:51.920 I'm starved. 1:37:52.000 --> 1:37:53.760 I can't wait to go to a Dickie's. I'm going 1:37:53.840 --> 1:37:55.840 to find any reason to get on a plane and go. 1:37:56.880 --> 1:38:00.479 You're listening to the Bloomberg Business Week podcast. Catch us 1:38:00.479 --> 1:38:04.519 live weekday afternoons from three to six Easter on Bloomberg Radio, 1:38:04.680 --> 1:38:07.960 the Bloomberg Business App and YouTube. You can also listen 1:38:08.080 --> 1:38:11.200 live on Amazon Alexa from our flagship New York station 1:38:11.640 --> 1:38:14.760 Just Say Alexa playing Bloomberg eleven thirty. 1:38:16.120 --> 1:38:18.519 People are going on vacation, folks. We are in the 1:38:18.560 --> 1:38:21.479 thick of summer. We're from the US airlines too. Over 1:38:21.479 --> 1:38:24.679 the past week or so, United just yesterday, latest major 1:38:24.760 --> 1:38:28.240 US carrier to benefit from strength and global travel. Yeah, 1:38:28.280 --> 1:38:29.360 aren't you going overseas? 1:38:29.400 --> 1:38:31.200 I'm going to Spain next week. 1:38:31.560 --> 1:38:33.920 See, so everybody's on vacation. 1:38:33.720 --> 1:38:34.840 Not looking forward to it? 1:38:34.920 --> 1:38:36.360 Why so hot? 1:38:36.720 --> 1:38:39.040 I know it's hot, It's yeah, it's going to be rough. 1:38:39.840 --> 1:38:41.880 I want to go to Alaska. Do you want to 1:38:41.920 --> 1:38:44.479 go to the Arctic right now? I need to be 1:38:44.560 --> 1:38:45.200 somewhere cool. 1:38:45.360 --> 1:38:46.320 Fyi it's melting. 1:38:46.560 --> 1:38:49.040 Yeah, I know, but at least it's still chilly. 1:38:49.080 --> 1:38:52.160 All right, So let's get to it. Let's talk about vacationing, 1:38:52.400 --> 1:38:55.120 demand and pricing. I'm curious what our next guest to see. 1:38:55.160 --> 1:38:58.800 Montage International founder, chairman and CEO, Alan Firstman is with 1:38:58.880 --> 1:39:02.839 us on zoom is in Maui. Montage is a luxury 1:39:02.840 --> 1:39:05.960 hospital to that, but at a luxury hospitality management company. 1:39:06.120 --> 1:39:09.520 Try that again. It's got properties in California, Mexico, Bahamas 1:39:09.560 --> 1:39:12.840 and more. Alan, Nice to be talking with you again. 1:39:12.880 --> 1:39:14.320 How are you. I think it's been about a year. 1:39:15.200 --> 1:39:16.320 Talk to us about great. 1:39:16.400 --> 1:39:17.120 Great to be back. 1:39:17.240 --> 1:39:19.639 Well, great to have you. How busy are you guys? 1:39:19.680 --> 1:39:20.360 What are you seeing? 1:39:21.479 --> 1:39:26.640 We're in the middle of summer. Busy summer. The resorts 1:39:26.680 --> 1:39:30.400 have been the place to escape the heat and enjoy 1:39:30.479 --> 1:39:34.320 the relaxation. See a lot of families traveling and an 1:39:34.320 --> 1:39:35.400 exciting time for us. 1:39:35.920 --> 1:39:39.360 So what's it like out there? I mean, Hawaii is 1:39:39.360 --> 1:39:42.920 like a bucket list place for me. I've also seen 1:39:43.000 --> 1:39:47.960 Mawana like a thousand times, so he has a young daughter, Maui. 1:39:48.120 --> 1:39:50.200 The name Maui has a special place in my heart. 1:39:50.800 --> 1:39:54.240 But it's hot here. I can't imagine wanting to go outside. 1:39:54.240 --> 1:39:55.080 What's it like there? 1:39:56.080 --> 1:39:58.479 Well, here, it's tropical beautiful. 1:39:58.520 --> 1:40:00.840 I mean, the beaches and the pools amazing. I'm here 1:40:00.880 --> 1:40:07.000 with five grandchildren and extended family. It's just a great 1:40:07.040 --> 1:40:10.439 opportunity to work a little bit in the morning and 1:40:10.479 --> 1:40:13.479 relax and enjoy the afternoons with the family. 1:40:13.680 --> 1:40:17.720 But eighty one degrees Matt, Oh, that's nice humidity. 1:40:17.880 --> 1:40:21.240 I'm just trying to get to what this heat wave 1:40:21.479 --> 1:40:23.879 and what these air quality issues. What kind of effect 1:40:23.880 --> 1:40:25.400 has that had on travel? 1:40:27.000 --> 1:40:30.559 Well, I mean there's an escape to markets that aren't as. 1:40:30.479 --> 1:40:35.559 Hot I would imagine, and it's important that those areas 1:40:35.600 --> 1:40:39.160 that are hot are taking all the necessary precautions to 1:40:39.200 --> 1:40:41.720 make sure the staff stays hydrated. And there's plenty of 1:40:41.760 --> 1:40:44.720 water stations for guests. We've taken some additional steps of 1:40:44.800 --> 1:40:48.000 late to make sure that there's plenty of water everywhere, 1:40:48.600 --> 1:40:51.200 but hotels and resources are a good place generally to 1:40:51.280 --> 1:40:52.200 escape the heat. 1:40:52.400 --> 1:40:54.439 All Right, So let's like we said, it's about a 1:40:54.520 --> 1:40:56.719 year since we last talked with you. Give me an idea. 1:40:57.240 --> 1:41:00.240 You say, great, everything is a good place to be, 1:41:00.360 --> 1:41:03.000 But give me an idea in terms of demand and pricing. 1:41:03.040 --> 1:41:04.840 What it's like. Is demand up from a year ago? 1:41:05.080 --> 1:41:07.679 Is it down from a year ago? What's pricing light? 1:41:07.760 --> 1:41:10.320 Is pricing like in terms of deals? Is it softer? 1:41:10.600 --> 1:41:12.800 I will say, allan, we saw AMX today. They had 1:41:12.960 --> 1:41:17.719 record volumes, but since they had such difficult comps because 1:41:17.760 --> 1:41:20.080 last year was so great, the market was a little 1:41:20.080 --> 1:41:20.840 bit disappointed. 1:41:22.160 --> 1:41:26.760 Yeah, I think I think pricing might have has come 1:41:26.840 --> 1:41:29.040 down a little bit over the highs of last year 1:41:29.080 --> 1:41:31.280 when you think about so much of the luxury travel 1:41:31.320 --> 1:41:33.599 heading to Europe and other markets that have opened up 1:41:33.760 --> 1:41:39.120 that weren't available a year ago, but well above conditions 1:41:39.280 --> 1:41:43.639 pre pandemic. So we're seeing some relatively strong numbers still. 1:41:43.720 --> 1:41:48.240 So that's a very positive sign. And we're just seeing 1:41:49.520 --> 1:41:55.240 that there's continued demand for highly differentiated special places. 1:41:55.880 --> 1:41:58.519 What about for you guys specifically, right, you're involved in 1:41:58.520 --> 1:42:01.160 the management of these properties. Do you have the workers 1:42:01.160 --> 1:42:04.080 you need? Are you again having to pay up for them? 1:42:04.560 --> 1:42:07.519 Well, we've had to pay up, but there's been certainly 1:42:07.560 --> 1:42:13.080 a rise in costs, and again it's been market by market. 1:42:13.240 --> 1:42:17.920 Some markets have been less difficult to attract labor, but 1:42:18.000 --> 1:42:20.639 it's an important component of what we do. You've seen though, 1:42:20.880 --> 1:42:23.200 part of the pricing increases that have been passed on 1:42:23.280 --> 1:42:28.519 to guests have come from the need to pay up, 1:42:29.280 --> 1:42:34.400 both for wages and for cost of goods. That's been 1:42:34.439 --> 1:42:38.200 the story of the inflationary time period we've been going through. 1:42:38.200 --> 1:42:40.479 It's good to see it settling down a little bit 1:42:40.680 --> 1:42:45.280 and we're somewhat optimistic that things will stabilize. We've had 1:42:45.280 --> 1:42:47.720 a very strong workforce fect we're in the process of 1:42:47.800 --> 1:42:50.960 opening Pendry Newport Beach, which is going to open in September, 1:42:51.439 --> 1:42:54.920 and we're hiring over four hundred new associates there and 1:42:55.040 --> 1:42:59.120 have had great success in attracting and finding superior talent. 1:43:00.240 --> 1:43:04.840 Are there any have trend shifted at all, you know, 1:43:05.360 --> 1:43:08.400 pre pandemic to now in terms of where people want 1:43:08.439 --> 1:43:11.320 to go, what they want to do what they're budgeting. 1:43:11.439 --> 1:43:15.479 I mean, are they focused more on vacations, because certainly 1:43:15.520 --> 1:43:17.760 I think a lot of employees are focused more on 1:43:18.080 --> 1:43:19.839 life in the work life balance. 1:43:20.880 --> 1:43:22.720 Yeah, I think so, And I think the advent of 1:43:22.760 --> 1:43:26.640 being able to work remotely means doesn't mean working just 1:43:26.720 --> 1:43:27.519 remotely from home. 1:43:27.560 --> 1:43:28.719 Why not extend your. 1:43:28.600 --> 1:43:33.640 Stay at a vacation destination no longer and there's a 1:43:33.640 --> 1:43:36.040 lot of combination. I'll work a little bit, but I'll 1:43:36.080 --> 1:43:39.240 also be enjoying. So we're seeing longer length of stays 1:43:39.600 --> 1:43:43.280 as a result of the need not to get back 1:43:43.320 --> 1:43:45.920 to the office as promptly as we may have years 1:43:46.040 --> 1:43:48.800 a few years back. So that's been a plus for 1:43:49.360 --> 1:43:53.960 us being able to work from our hotels and resorts effectively. 1:43:54.160 --> 1:43:56.400 Ell where are people going? Because you guys have properties 1:43:57.360 --> 1:44:01.200 in Los Cabos, Mexico. I've see in Hawaii where you 1:44:01.240 --> 1:44:07.080 guys are Utah, Laguna Beach, California. I know I'm leaving 1:44:07.080 --> 1:44:08.800 stuff out other places. 1:44:08.640 --> 1:44:10.479 Big Big Sky, Montana, for example. 1:44:10.560 --> 1:44:15.000 It's it's such a such a cool temperature wise and 1:44:15.040 --> 1:44:19.320 otherwise get away. And when we opened there a year ago, 1:44:19.520 --> 1:44:24.000 essentially the first luxury hotel in that market. It's opened 1:44:24.080 --> 1:44:27.679 up a new market, and in the case of Big Sky, 1:44:27.800 --> 1:44:31.559 you're an hour from Yellowstone and you get to experience 1:44:31.600 --> 1:44:34.960 the park but also the luxury amenities, the outdoor lifestyle. 1:44:35.760 --> 1:44:39.480 So we're seeing some newer destinations like Big Sky, Montana, 1:44:39.960 --> 1:44:44.200 and certainly great strength in in the other mountain destinations. 1:44:44.280 --> 1:44:46.320 We were in Deer Valley, we're in we have a 1:44:46.320 --> 1:44:47.160 penry in Park. 1:44:47.040 --> 1:44:52.559 City, so good, good breath across our portfolios. So we're 1:44:52.560 --> 1:44:55.879 seeing we're seeing strong travel throughout. 1:44:56.240 --> 1:44:58.679 Big Sky's also close to Bozeman, so it's an easy 1:44:59.240 --> 1:45:02.240 uh from the airport. And I have to say my family, 1:45:02.280 --> 1:45:05.559 we go skiing in Big Sky, do you love that 1:45:05.760 --> 1:45:10.719 big backcountry? You know, nice off piece, a lot of powder, 1:45:11.160 --> 1:45:11.920 very cool. 1:45:11.800 --> 1:45:12.760 It looks gorgeous. 1:45:13.840 --> 1:45:16.480 Can I ask you, unlus, You've got a very exclusive 1:45:16.840 --> 1:45:19.600 resort on the backside of the mountain. Sounds like Yellowstone? 1:45:19.760 --> 1:45:24.200 Okay, sold? Sold? Is it the But in the Bahamas 1:45:24.280 --> 1:45:28.880 there's a forty eight acre private island resort and community 1:45:28.920 --> 1:45:30.400 that I guess you can rent out. 1:45:32.320 --> 1:45:33.440 We're under construction. 1:45:33.520 --> 1:45:38.200 There were building abacos called Montage Key Private Island. We're 1:45:38.240 --> 1:45:41.360 selling real estate there now, homes, amazing homes, on the 1:45:41.439 --> 1:45:45.720 on the ocean front and building building the resort. Well, 1:45:45.880 --> 1:45:49.240 we should open the end of twenty four, early twenty five, 1:45:49.680 --> 1:45:55.120 and it will be an amazing destination, easily accessible the 1:45:55.280 --> 1:45:58.439 entire East coast, and it'll be a truly global destination, 1:45:58.640 --> 1:46:00.360 very special resort under construction. 1:46:00.840 --> 1:46:04.160 Allen, what's the rates? How is the rates picture affected that? 1:46:04.200 --> 1:46:06.240 Because when you say that, I think, well, I want 1:46:06.240 --> 1:46:08.160 to buy a house there, But then I realize I 1:46:08.160 --> 1:46:10.800 don't want a seven percent mortgage. I guess those people 1:46:10.800 --> 1:46:13.719 maybe pay cash. 1:46:13.840 --> 1:46:20.919 Yes, I think there's the buyer for that market is less? 1:46:21.040 --> 1:46:23.040 Is less interest rates sensitive? 1:46:23.880 --> 1:46:24.160 Yeah? 1:46:24.200 --> 1:46:26.960 Sorry, Matt, Hey, listen twenty years in that you guys 1:46:27.000 --> 1:46:32.439 are happy twentieth anniversary. What's what do you think about? 1:46:32.560 --> 1:46:34.160 You talk about the you know, the development you're doing 1:46:34.200 --> 1:46:36.840 in the Bahamas, but how do you think about what's 1:46:36.880 --> 1:46:37.479 to come. 1:46:37.560 --> 1:46:38.519 The next twenty years? 1:46:39.240 --> 1:46:42.920 Now, we've got fourteen hotels open today, seven Montages and 1:46:42.960 --> 1:46:46.040 seven Pendries, so we have the two luxury brands. We 1:46:46.080 --> 1:46:50.360 have another twelve projects that are either under construction or 1:46:50.400 --> 1:46:53.680 in design right now, and of those, eight are Pendries 1:46:54.200 --> 1:46:58.479 and four are Montages. And we're seeing some real international growth. 1:46:59.360 --> 1:47:06.439 Initially mostly North America. Now we're expanding globally. We've announced 1:47:06.439 --> 1:47:08.600 a couple of projects in the Middle East. We've just 1:47:08.640 --> 1:47:13.839 announced two hotels in Puntomita, which is near Porta Viarta, Mexico, 1:47:14.040 --> 1:47:15.719 both a Montage and a Pendri there. 1:47:15.920 --> 1:47:17.640 We announced a project in Barbados. 1:47:17.880 --> 1:47:20.280 So I think you're going to continue to see both 1:47:20.520 --> 1:47:23.040 domestic and international growth for our company. 1:47:23.200 --> 1:47:25.439 Sounds like you're moving ahead. You're not worried about a recession. 1:47:25.479 --> 1:47:27.639 Are those higher rates? Is that fair? Just got about 1:47:27.640 --> 1:47:30.360 thirty seconds or tell me, yeah, we are. 1:47:30.320 --> 1:47:35.120 But high interst rates are concerning obviously for capitalizing new projects. 1:47:35.160 --> 1:47:35.960 It's obviously a. 1:47:35.880 --> 1:47:40.400 Big concern, and we're hopeful that we've seen the height 1:47:40.640 --> 1:47:41.519 of the interest rates. 1:47:41.560 --> 1:47:43.640 But we are very optimistic. 1:47:43.720 --> 1:47:47.759 We build hotels for generations to come, so we'll withstand 1:47:48.240 --> 1:47:50.960 small blips if they happen, which. 1:47:50.800 --> 1:47:51.519 Are due to happen. 1:47:51.720 --> 1:47:53.760 So cool, you know, to think that a kid from 1:47:53.800 --> 1:47:58.040 New Milford could go to Gettysburg, then he runs the Phoenician, 1:47:58.320 --> 1:48:00.800 then he runs the Bolagio and you found this great, 1:48:00.840 --> 1:48:03.040 big business. I think it's a super a super cool 1:48:03.080 --> 1:48:05.280 story inspiring dream. 1:48:05.320 --> 1:48:07.960 I've got to say how fortunate I've been and yeah 1:48:08.080 --> 1:48:09.679 now I'm truly lucky. 1:48:09.840 --> 1:48:12.040 Well enjoy Maui and always good to check in with you. 1:48:12.080 --> 1:48:15.680 Alan Firstman, founder, chairman and CEO of Montage International joining us. 1:48:15.720 --> 1:48:16.880 As we said from Hawaii. 1:48:17.600 --> 1:48:22.280 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:48:22.400 --> 1:48:26.120 and anywhere else you get your podcast. Listen live weekday 1:48:26.160 --> 1:48:29.759 afternoons from three to six Easterning on Bloomberg dot com, 1:48:29.800 --> 1:48:33.160 the iHeartRadio app tune In, and the Bloomberg Business App. 1:48:33.160 --> 1:48:36.240 You can also watch us live every weekday on YouTube 1:48:36.360 --> 1:48:38.360 and always on the Bloomberg terminal