WEBVTT - Bloomberg Businessweek Weekend: November 14th, 2025 0:00:00.280 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.640 --> 0:00:12.959 This is Bloomberg business Week Daily reporting from the magazine 0:00:12.960 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business, finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:25.960 --> 0:00:31.440 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:31.960 --> 0:00:34.880 Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:35.159 --> 0:00:38.800 This week, the longest recorded US government shutdown finally came 0:00:38.840 --> 0:00:42.320 to an end after forty three days that included disrupted 0:00:42.360 --> 0:00:45.440 flights across the country and delayed food aid for millions. 0:00:45.440 --> 0:00:49.680 In fact, one in eight Americans congressional Democrats, eight of 0:00:49.720 --> 0:00:52.279 them in the Senate, crossed the aisle to end the 0:00:52.280 --> 0:00:55.920 federal shutdown, a move some crid as the Democrats caving 0:00:55.960 --> 0:00:58.440 to Republicans. We get into that a little later on. 0:00:58.920 --> 0:01:01.480 Then, as we await the first drop of US government 0:01:01.520 --> 0:01:04.440 economic data, is things get back to normal in Washington, DC. 0:01:05.120 --> 0:01:08.360 What's become normal in the US is a K shaped 0:01:08.360 --> 0:01:10.720 economy where those at the top are doing well and 0:01:10.760 --> 0:01:13.640 those at the bottom are not. And for those struggling 0:01:13.720 --> 0:01:17.200 Americans they are already in recession. That's according to Peter Atwater, 0:01:17.600 --> 0:01:20.920 who started talking about the k shaped economy five years ago. 0:01:21.280 --> 0:01:23.440 He's the subject of a Bloomberg Big Take this week. 0:01:23.480 --> 0:01:25.319 We're gonna hear from him a little later this hour. 0:01:25.520 --> 0:01:28.200 Also we get reads on the consumer, the business environment, 0:01:28.200 --> 0:01:30.760 the global economy, trade, and more as we catch up 0:01:30.760 --> 0:01:33.920 with a few members of the C suite, including the 0:01:33.959 --> 0:01:35.760 CEO at Magna International. 0:01:35.920 --> 0:01:38.319 End Plus, in our second hour, the case against social 0:01:38.400 --> 0:01:42.679 media and its dangerous algorithms determining which ultra processed foods 0:01:42.720 --> 0:01:46.080 are actually bad for you spoiler alert, it's most And 0:01:46.120 --> 0:01:49.320 then Carol SIPs on some wine in the responsible way 0:01:49.520 --> 0:01:53.360 courtesy of the CEO of Maisson Mirabau very nicely said, 0:01:53.400 --> 0:01:55.880 by the way, thank you, I won one year of French. 0:01:56.240 --> 0:01:57.680 It's actually high school paid off. 0:01:57.720 --> 0:01:59.480 Well, thank you, miss Halsey. 0:02:00.360 --> 0:02:00.840 So sweet. 0:02:01.360 --> 0:02:03.480 All of that to come, we begin with Washington, the 0:02:03.560 --> 0:02:06.760 nation's capital, and the longest government shut down on record, 0:02:06.920 --> 0:02:08.760 finally finally coming to an end. 0:02:09.040 --> 0:02:11.919 Writing about the actions by some Democrats to give Republicans 0:02:11.919 --> 0:02:13.840 the votes to bring it all to an end, why 0:02:13.840 --> 0:02:15.880 the vote was surprising, and why it wasn't for the 0:02:15.919 --> 0:02:20.799 Democrats is Josh Green Bloomberg BusinessWeek national correspondent. Josh is 0:02:20.840 --> 0:02:23.079 the author of a couple books, including the New York 0:02:23.120 --> 0:02:26.400 Times bestseller Devil's Bargain, Steve Bannon, Donald Trump, and The 0:02:26.440 --> 0:02:29.840 Storming of the Presidency Democrats Josh crossing the aisle to 0:02:29.919 --> 0:02:32.560 end the shutdown? Was it a quote terrible mistake? A 0:02:32.639 --> 0:02:36.600 Senator Elizabeth Warren told reporters. Governor Gavin Newsom called it 0:02:36.760 --> 0:02:40.640 quote pathetic? Or is this smart ahead of the min terms? 0:02:40.720 --> 0:02:43.440 This is kind of a narrative that's emerging now. Republicans 0:02:43.480 --> 0:02:46.400 will own they see a premiums going up that'll affect 0:02:46.400 --> 0:02:47.520 a lot of their constituents. 0:02:47.520 --> 0:02:48.200 What's the chatter? 0:02:48.680 --> 0:02:51.360 Well, I think the overwhelming sentiment of the Democrat grass 0:02:51.440 --> 0:02:55.760 roots is anger and confusion that, you know, Democrats who've 0:02:55.800 --> 0:02:58.760 just come off the sweeping election victory, who polls showed 0:02:59.160 --> 0:03:01.800 were not being blame for a shutdown that they in 0:03:01.840 --> 0:03:06.000 fact had caused. Why they would suddenly decide to throw 0:03:06.000 --> 0:03:08.200 in the towel without really much much warning. 0:03:08.200 --> 0:03:09.720 I think is upset an awful lot of. 0:03:09.639 --> 0:03:12.440 People, mostly at the grassroots level, but also from a 0:03:12.440 --> 0:03:16.520 lot of the politicians, especially ones like Gavin Newsom, who 0:03:16.560 --> 0:03:18.200 maybe have their eye on the White House and are 0:03:18.320 --> 0:03:21.799 especially attuned to grassroots sentiment. But I think that there's 0:03:21.800 --> 0:03:25.320 another kind of quieter realist wing of the party that 0:03:25.800 --> 0:03:27.720 looked in the mirror and said, look, there's really no 0:03:28.240 --> 0:03:30.360 clear winning exit strategy. 0:03:30.400 --> 0:03:32.040 We've got to pull the plug at some time. 0:03:32.760 --> 0:03:35.240 So let's do it now before things get really bad 0:03:35.280 --> 0:03:40.200 for federal workers, before the entire US airline industry grinds 0:03:40.240 --> 0:03:43.040 to a halt, maybe on Thanksgiving weekend, and just turn 0:03:43.080 --> 0:03:45.680 around and decided to kind of rip off the band aid. 0:03:45.720 --> 0:03:47.320 Now that's caused a lot of anger, but it's not 0:03:47.320 --> 0:03:49.800 necessarily clear that long term that this is going to be. 0:03:49.800 --> 0:03:50.320 The wrong move. 0:03:50.480 --> 0:03:53.440 What's that like thinking or strategizing about? Like, Okay, what 0:03:53.600 --> 0:03:55.880 party gets blamed? And you know, I was thinking about 0:03:55.880 --> 0:03:58.640 this when I was on a TSA line. I mean 0:03:58.720 --> 0:04:01.800 the government shutdown and got at those screen screens and 0:04:01.840 --> 0:04:04.040 who do I see Christy Nome, you know, playing over 0:04:04.080 --> 0:04:05.600 and over on a loop, And I just wonder the 0:04:05.600 --> 0:04:08.760 general public, like who do they blame? And so was 0:04:09.760 --> 0:04:12.960 there a feeling that it was the Republican shutdown? Was 0:04:13.000 --> 0:04:16.080 it both the parties? How was it playing out? 0:04:16.279 --> 0:04:18.560 I mean, it's interesting dynamic. Over the last like three 0:04:18.640 --> 0:04:21.480 or four government shutdowns. What's happened in pretty short order 0:04:21.560 --> 0:04:24.799 is that services start shutting down, national parks start shutting down, 0:04:24.880 --> 0:04:28.320 you have a problem with airlines. Everybody says, well, gee, 0:04:28.360 --> 0:04:30.719 who's to blame. And it's pretty clear whichever party shut 0:04:30.760 --> 0:04:33.839 down the government gets blamed by the other party because 0:04:33.920 --> 0:04:36.120 everybody in that party is on the same page, they 0:04:36.160 --> 0:04:38.479 can kind of point to the same bad guy. I 0:04:38.480 --> 0:04:41.520 think that the tricky thing this time around was that 0:04:41.560 --> 0:04:44.440 President Trump didn't really seem to be all that interested 0:04:44.480 --> 0:04:46.800 in the shutdown for like the first two or three weeks. 0:04:46.839 --> 0:04:50.599 He was much more interested in knocking down the East 0:04:50.600 --> 0:04:53.240 Wing in the White House, building up his new ballroom, 0:04:54.000 --> 0:04:56.040 And so you had this kind of mixed message from 0:04:56.080 --> 0:04:59.320 Republicans where some Republicans in Congress were trying to run 0:04:59.320 --> 0:05:02.520 the ordinary place book of blaming Democrats, but Trump wasn't 0:05:02.520 --> 0:05:05.080 really on that page, wasn't really doing that, and it's 0:05:05.080 --> 0:05:08.240 a much more interesting exciting story to write about this 0:05:08.360 --> 0:05:12.159 grand new ballroom that's apparently going up in the White House, 0:05:12.160 --> 0:05:14.679 and so nobody really focused on who was to blame. 0:05:14.960 --> 0:05:17.360 And when things started going wrong, they just kind of 0:05:17.440 --> 0:05:20.200 naturally blamed the president and the party that controls Congress. 0:05:20.279 --> 0:05:23.680 You know, Josh, I do wonder, like, did things like, 0:05:24.160 --> 0:05:27.280 you know, tearing down the ballroom, showing off a new 0:05:27.320 --> 0:05:30.360 marble bathroom at the White House that the president has, 0:05:31.000 --> 0:05:35.039 having a great Gatsby party for Halloween exactly. That was 0:05:35.120 --> 0:05:37.440 really over the top if you saw some of the images. 0:05:37.480 --> 0:05:39.880 And I don't want to be political, but I do wonder. 0:05:40.279 --> 0:05:42.479 This is a president who said, like, I am here 0:05:42.560 --> 0:05:45.280 for you, and I'm going to take actions that are 0:05:45.279 --> 0:05:50.039 here for more Americans. That's you know, at the same time, 0:05:50.040 --> 0:05:52.440 we're talking about one in eight who aren't going to 0:05:52.480 --> 0:05:55.920 get food stamps because of the government shutdown. So I'm 0:05:55.960 --> 0:05:59.440 just curious how that plays politically. Was that getting noticed 0:05:59.720 --> 0:06:00.799 that kind of gag. 0:06:00.920 --> 0:06:02.880 It definitely was. I think it does two things. I mean, 0:06:03.160 --> 0:06:05.720 going back to sort of that, you know, how a 0:06:05.800 --> 0:06:09.320 party deals with a shutdown. If all Republicans had been 0:06:09.440 --> 0:06:12.000 unified from day one, including President Trump saying, look, the 0:06:12.040 --> 0:06:15.160 Democrats did this, it's their fault, blame them, I think 0:06:15.200 --> 0:06:18.080 things would have ended much earlier. But like as we said, 0:06:18.080 --> 0:06:20.360 that didn't happen. Trump was more concerned with other things, 0:06:20.360 --> 0:06:22.520 and when he did begin to get upset about the shutdown, 0:06:22.560 --> 0:06:25.800 instead of blaming Democrats, he started getting angry at Republicans 0:06:25.839 --> 0:06:27.880 and told them they ought to eliminate the filibuster, which 0:06:27.920 --> 0:06:29.920 would be another way to open the government. But it's 0:06:30.000 --> 0:06:32.880 not something that Republicans wanted to do. And so as 0:06:32.920 --> 0:06:35.200 this fight was going on, you do see these images 0:06:35.400 --> 0:06:39.279 on TV on social media of the redecorations in the 0:06:39.279 --> 0:06:42.960 White House, of these glitzy parties at mar A Lago. Meanwhile, 0:06:43.200 --> 0:06:45.800 you know, food stamps are being frozen. The White House 0:06:45.880 --> 0:06:47.920 is out saying no, we don't want to pay these 0:06:48.040 --> 0:06:51.400 during the government shutdown. Democrats and states are having to 0:06:51.440 --> 0:06:53.479 take them to court. So it really did create a 0:06:53.520 --> 0:06:57.200 political problem that polls show pretty clearly was hurting President 0:06:57.200 --> 0:07:00.640 Trump's approval rating and hurting Republicans and Congress. And that's 0:07:00.640 --> 0:07:03.720 one reason why Democratic kind of grassroots and a lot 0:07:03.760 --> 0:07:07.800 of lawmakers were so upset that moderates in their caucus 0:07:07.839 --> 0:07:10.120 decided to pull the plug in the shutdown early because 0:07:10.120 --> 0:07:11.640 they didn't think it was hurting Democrats. 0:07:11.640 --> 0:07:12.920 They thought it was hurting their opponents. 0:07:12.960 --> 0:07:15.560 I think it was Mike Allen and Axios who wrote 0:07:15.840 --> 0:07:18.680 a commentary about how it could be a challenge for 0:07:18.920 --> 0:07:22.760 the Trump administration to present themselves as fighting for the 0:07:22.800 --> 0:07:25.320 little guy or fighting for the middle class or the 0:07:25.360 --> 0:07:29.400 working class if they're not focused on the ACA subsidies 0:07:29.520 --> 0:07:33.160 or on funding SNAP during this time. I wonder if 0:07:33.200 --> 0:07:36.680 that message will resonate with voters going into the midterms 0:07:36.680 --> 0:07:37.400 in twenty six. 0:07:37.880 --> 0:07:38.080 Yeah. 0:07:38.120 --> 0:07:39.720 I think that's a really smart point. I think it 0:07:39.800 --> 0:07:43.800 might resonate even sooner. I did a Business Week newsletter 0:07:43.960 --> 0:07:45.920 just kind of my gloss on the shutdown and what 0:07:46.160 --> 0:07:49.320 was and what it was not accomplished. And I do 0:07:49.360 --> 0:07:52.000 think that one of the things that Democrats accomplished, even 0:07:52.000 --> 0:07:54.040 though so many of them are unhappy about the way 0:07:54.080 --> 0:07:58.200 things ended, They've added real salients to this issue of 0:07:58.280 --> 0:08:01.520 rising Obamacare premiums. Originally, Democrats said were only going to 0:08:01.560 --> 0:08:05.960 reopen the government if Trump and Republicans agree to fund 0:08:06.040 --> 0:08:10.080 these provisions, it will help extend subsidies, keep insurance affordable. 0:08:10.280 --> 0:08:11.680 Republicans don't want to do that. 0:08:11.720 --> 0:08:15.120 They didn't do that, so even though Republicans are Democrats 0:08:15.160 --> 0:08:17.760 weren't able to win that as a concession to reopen 0:08:17.800 --> 0:08:20.840 the government. It's been on the front pages of the newspapers, 0:08:20.880 --> 0:08:23.080 it's been in the news. I think the American public 0:08:23.160 --> 0:08:25.600 is very aware that these premiums are about to rise, 0:08:25.960 --> 0:08:29.080 and I think partly because of the spotlight that the 0:08:29.200 --> 0:08:33.119 shutdown shown on this issue. If and when those premiums 0:08:33.160 --> 0:08:36.080 do rise, the American people are largely going to bring 0:08:36.200 --> 0:08:38.960 Trump and Republicans and essentially it's going to be up 0:08:39.000 --> 0:08:41.840 to them to kind of find the solution, which isn't 0:08:41.880 --> 0:08:45.280 exactly how Democrats wanted things to end, but it could 0:08:45.320 --> 0:08:48.760 turn out to be that public pressure in the event 0:08:48.800 --> 0:08:51.560 of these rising premiums actually does produce some sort of 0:08:51.600 --> 0:08:53.640 solution that Democrats could get behind. 0:08:53.840 --> 0:08:58.160 So, you know, Josh, when the Republicans and the Democrats 0:08:58.200 --> 0:09:00.439 that went over to the other side are basic, you know, 0:09:00.720 --> 0:09:05.120 broke away and got this Republican promise to vote on 0:09:05.200 --> 0:09:10.480 extending Obamacare insurance premium credits by mid December. So politically 0:09:11.040 --> 0:09:13.280 it will happen or could Republicans back out. 0:09:13.800 --> 0:09:16.160 I think it's very unlikely to happen. I mean, Republicans 0:09:16.200 --> 0:09:17.800 have been adamant that they're not going to vote to 0:09:17.800 --> 0:09:19.480 support these things. So you can have a vote, the 0:09:19.520 --> 0:09:21.640 vote will lose, and that will probably be the end 0:09:21.640 --> 0:09:22.959 of it, at least in the short term. If the 0:09:23.040 --> 0:09:24.520 vote were to win in the Senate, it would go 0:09:24.520 --> 0:09:27.319 to the House houses controlled by Republicans, and they've said 0:09:27.360 --> 0:09:30.120 they might not even take it up. But eventually, if 0:09:30.440 --> 0:09:33.520 insurance premiums do go up and just ordinary people begin 0:09:33.600 --> 0:09:36.600 to react badly to that, including Republican districts, that could 0:09:36.600 --> 0:09:39.000 put pressure on Republicans in Trump to finally have to 0:09:39.040 --> 0:09:39.720 do something about it. 0:09:39.760 --> 0:09:41.840 And there's a record right of people of how they voted. 0:09:43.000 --> 0:09:46.800 Absolutely yeah, And ultimately, look, Republicans control Congress, they control 0:09:46.840 --> 0:09:47.400 the White House. 0:09:47.480 --> 0:09:48.560 The buck stops with them. 0:09:48.640 --> 0:09:50.760 If there needs to be a solution, they're ultimately going 0:09:50.800 --> 0:09:51.880 to have to come through and deliver one. 0:09:52.120 --> 0:09:55.319 That was Josh Green, Bloomberg BusinessWeek National correspondent. 0:09:55.480 --> 0:09:58.440 Now, if the government reopened this past week, all eyes 0:09:58.559 --> 0:10:02.120 now on the Bureau Labors, Statistics and other statistical agencies 0:10:02.559 --> 0:10:06.560 and when they will release key economic data. Some information 0:10:06.600 --> 0:10:08.520 on that tim definely started to come out throughout the 0:10:08.520 --> 0:10:10.920 past week about you know, when and what we might 0:10:10.960 --> 0:10:11.400 be getting. 0:10:11.559 --> 0:10:13.720 In the absence of that data, we've relied on a 0:10:13.720 --> 0:10:16.960 lot of private data for reads on the US economy. Meantime, 0:10:17.000 --> 0:10:19.880 we've also seen earnings and revenue growth for many US companies, 0:10:20.080 --> 0:10:23.719 wealthy consumer shopping and US consumer sentiment that tumbled to 0:10:23.920 --> 0:10:26.400 near the lowest on record as the government shut down 0:10:26.440 --> 0:10:29.559 weigh on the economic outlook and high prices soured views 0:10:29.600 --> 0:10:30.920 about personal finances. 0:10:31.000 --> 0:10:34.080 It's that case shaped economy, right, of some doing well 0:10:34.120 --> 0:10:36.560 in some not. I mean, just this past week, car 0:10:36.640 --> 0:10:39.240 Loans have gone from the safest consumer credit products to 0:10:39.280 --> 0:10:42.640 among the riskies over the last fifteen years as delinquencies 0:10:42.679 --> 0:10:46.120 rose more than fifty percent fifty percent driven by soaring 0:10:46.120 --> 0:10:48.840 car prices and rising interest rates. So that is one 0:10:48.840 --> 0:10:50.679 of the troubling signs Tim, in this economy. 0:10:50.800 --> 0:10:52.800 Yeah, it's the K shaped economy that we've been talking 0:10:52.800 --> 0:10:55.880 about for years. Also talking about it for years. Peter Alwater, 0:10:56.040 --> 0:10:59.160 president of Financial Insights and Adjunct Lecture of Economics at 0:10:59.160 --> 0:11:01.720 the College of Willing and Mary, he started talking about 0:11:01.760 --> 0:11:04.840 the K shaped economy that was during the pandemic. 0:11:04.880 --> 0:11:07.439 Long time five years ago at least, so, Carol, it's 0:11:07.480 --> 0:11:09.360 been more than five and a half years since I 0:11:09.440 --> 0:11:13.160 first started writing about the K shaped economy, and I 0:11:13.160 --> 0:11:15.840 think what's happened is that for those at the top, 0:11:15.960 --> 0:11:20.120 the financial markets have been extraordinary. Meanwhile, for those at 0:11:20.160 --> 0:11:23.959 the bottom, things have just continued to deteriorate, and now 0:11:24.040 --> 0:11:29.000 compounded by the cumulative effect of inflation on particularly food. 0:11:29.559 --> 0:11:33.720 You've referenced the car Loan delinquencies, and that's another sign. 0:11:33.760 --> 0:11:37.400 And I think that those at the bottom have this 0:11:37.720 --> 0:11:45.840 heavy weight, whether it's childcare, education, housing, it feels mighty 0:11:45.840 --> 0:11:47.520 heavy to those at the bottom. And I think at 0:11:47.520 --> 0:11:50.360 this point we really don't have a single economy in America. 0:11:50.520 --> 0:11:52.679 We have two very distinct experiences. 0:11:52.920 --> 0:11:56.880 So are we becoming peter An economy a country where 0:11:56.880 --> 0:12:02.000 there are a few rich people who are living in 0:12:02.040 --> 0:12:02.960 a poor country. 0:12:04.240 --> 0:12:07.160 I would describe it, yeah, as a handful of folks 0:12:07.200 --> 0:12:10.440 who feel invulnerable in a mounting sea of despair. 0:12:11.280 --> 0:12:12.520 Hasn't it been like that for years? 0:12:12.600 --> 0:12:12.880 Though? 0:12:13.200 --> 0:12:17.040 What's different about right now? I remember having the same discussion, 0:12:17.760 --> 0:12:21.680 not with the same data, but in graduate school in 0:12:21.720 --> 0:12:25.680 a class about how in the developing world you start 0:12:25.720 --> 0:12:27.760 to see economies such as this, and that was that 0:12:27.840 --> 0:12:30.640 the professor was arguing where we were headed in the US. 0:12:30.800 --> 0:12:32.200 It's been like this for quite some time. 0:12:33.480 --> 0:12:37.200 The gap has existed, but not to this extreme. And remember, Tim, 0:12:37.600 --> 0:12:40.040 there used to be a sense that there was a ladder, 0:12:40.080 --> 0:12:43.000 a way to progress from the bottom up through the 0:12:43.040 --> 0:12:45.600 middle class and into the upper middle class and then 0:12:45.920 --> 0:12:48.920 into the truly wealthy. And for those at the bottom, 0:12:49.000 --> 0:12:52.280 that ladder's gone. There are no more rungs that enable 0:12:52.360 --> 0:12:55.600 them to go up. And I think we have fallen 0:12:55.640 --> 0:12:58.520 into a more of a cast system that, to your point, 0:12:58.840 --> 0:13:04.160 looks less like America that many were promised, and more 0:13:04.360 --> 0:13:07.360 like a lot of the developed nations around the world. 0:13:07.559 --> 0:13:12.640 So when does it show up, Peter, Because those who 0:13:12.840 --> 0:13:17.000 are at the lower economic rung, if you will, when 0:13:17.040 --> 0:13:20.280 it comes to the US economy or having troubles and 0:13:20.320 --> 0:13:22.320 so they're not going to Chipotle or they're not going 0:13:22.320 --> 0:13:24.800 to Kava and a few other places. But when does 0:13:24.840 --> 0:13:28.280 this really start to show up in our economy in 0:13:28.320 --> 0:13:31.640 the financial markets? Just curious. 0:13:32.360 --> 0:13:35.480 So in terms of consumer sentiment, it showed up almost 0:13:35.520 --> 0:13:41.040 immediately after COVID, when those white collar workers were able 0:13:41.080 --> 0:13:44.280 to pivot to work from home, their confidence was restored. 0:13:44.320 --> 0:13:48.000 They also got boosts from monetary and fiscal policy. And 0:13:48.040 --> 0:13:52.840 for those at the bottom, those stimulus chicks really just 0:13:52.920 --> 0:13:56.719 went through them to their lenders, to their landlords. And 0:13:56.800 --> 0:14:01.240 so this has been ongoing for a long time, and 0:14:01.280 --> 0:14:05.120 I wouldn't underestimate the compounding effect that time has for 0:14:05.160 --> 0:14:07.040 those at the bottom, and I think it's showing up 0:14:07.360 --> 0:14:10.840 in the affordability message that you're seeing now politically, all. 0:14:10.800 --> 0:14:13.360 Right, The other part I want to get to is 0:14:13.400 --> 0:14:16.240 ask you about is the upper part of the K 0:14:16.640 --> 0:14:18.960 when you look at this economy, is it kind of fragile, 0:14:19.160 --> 0:14:23.520 even perhaps potentially for those who are even wealthier in 0:14:23.560 --> 0:14:24.280 this economy? 0:14:25.120 --> 0:14:28.000 I think so, And I think that what there's been 0:14:28.040 --> 0:14:31.360 lots of discussion about the circularity within the AI system. 0:14:32.600 --> 0:14:36.640 I think that circularity exists more broadly between the wealthy 0:14:36.960 --> 0:14:41.000 AI and you see that in first class travel, you 0:14:41.080 --> 0:14:45.040 see that in a lot of the luxury experiences. And 0:14:45.320 --> 0:14:49.080 we used to say that the economy is not the markets, 0:14:49.720 --> 0:14:54.240 but at the upper end, the markets and the economy 0:14:54.280 --> 0:14:58.400 are now indistinguishable. And we need to appreciate the fragility 0:14:59.120 --> 0:15:02.880 of over financial markets. If I look at the amount 0:15:02.920 --> 0:15:07.120 of speculation going on through options and the price price 0:15:07.160 --> 0:15:09.880 to earnings multiples, there are lots of signs that this 0:15:09.960 --> 0:15:14.400 is a market that feels extraordinarily confident, and ironically, that's 0:15:14.520 --> 0:15:16.480 where the fragility ultimately rests. 0:15:17.280 --> 0:15:23.280 What about this idea of the meritocracy, or the idea 0:15:23.320 --> 0:15:26.640 that people actually in this day and age have a 0:15:26.640 --> 0:15:31.440 harder time moving in and out of social strata. The 0:15:31.480 --> 0:15:34.160 American dream is this idea that anyone can come to 0:15:34.160 --> 0:15:37.080 the United States and succeed regardless of where they start. 0:15:37.520 --> 0:15:40.920 You argue that that doesn't exist as much anymore. 0:15:41.560 --> 0:15:47.080 Why is that so wealth accumulation happens more slowly? You 0:15:47.480 --> 0:15:49.640 look at, for example, the fact that it now takes 0:15:49.680 --> 0:15:52.680 to age forty to be a first time home buyer. 0:15:53.920 --> 0:15:56.960 It wasn't that long ago when that age was twenty five, 0:15:57.760 --> 0:16:01.520 and so the wealth accumulation potent for this new generation 0:16:02.160 --> 0:16:05.680 is far less than the generation before, assuming that housing 0:16:05.760 --> 0:16:10.120 is a means for accumulating wealth, and so what you're 0:16:10.160 --> 0:16:14.640 seeing is, particularly with things like childcare and healthcare, the 0:16:14.720 --> 0:16:19.680 burden on those families starting out is substantially higher than 0:16:19.880 --> 0:16:22.360 the one certainly I experienced and likely the one you 0:16:22.600 --> 0:16:23.160 started with. 0:16:25.160 --> 0:16:29.080 All right, so how do we fix this? Because it does. 0:16:28.920 --> 0:16:32.200 Feel like you have three minutes, Peter, fix the pot. 0:16:33.600 --> 0:16:33.680 No. 0:16:34.000 --> 0:16:37.360 I think that policy makers need to be really attuned 0:16:37.360 --> 0:16:39.840 to this. I think they shouldn't ignore the message of 0:16:39.880 --> 0:16:43.640 a affordability that came out of the New York mayoral election. 0:16:45.200 --> 0:16:48.360 What we're seeing is not a movement to the left 0:16:48.400 --> 0:16:51.840 as much as a movement down. And I think policy 0:16:51.880 --> 0:16:57.720 makers really don't appreciate how purple the bottom of our 0:16:57.760 --> 0:17:03.400 economy is, and recently purple with rage. So we need 0:17:03.440 --> 0:17:10.280 to address their shared vulnerability, their despair, because ultimately history 0:17:10.320 --> 0:17:14.760 shows that that when it becomes widespread, those with nothing 0:17:14.840 --> 0:17:18.120 to lose will gladly go after those with everything to lose. 0:17:18.240 --> 0:17:21.880 Do policymakers actually have the tools in a divided country 0:17:22.520 --> 0:17:24.960 to fix this, I. 0:17:24.880 --> 0:17:25.520 Think they do. 0:17:25.600 --> 0:17:30.199 I think it requires them to recognize that it is 0:17:30.560 --> 0:17:34.719 in the best interest of both political parties to address this, 0:17:34.800 --> 0:17:39.600 because we know that anti establishment candidates become more popular, 0:17:39.640 --> 0:17:43.520 we know that progressive candidates become more popular, and so 0:17:43.600 --> 0:17:47.359 it behooves them to pay attention to this and to 0:17:47.440 --> 0:17:50.480 address it. And to be clear, those at the bottom 0:17:50.760 --> 0:17:53.359 are not looking for a handout. They're looking for a 0:17:53.440 --> 0:17:56.639 hand They want to see job training, They want to 0:17:56.680 --> 0:18:00.360 see opportunities that allow them to move up. We saw 0:18:00.400 --> 0:18:03.320 from the soybean farmers and the ranchers. They don't want 0:18:03.440 --> 0:18:07.040 a government handout. They want their products sold. They want 0:18:07.080 --> 0:18:10.000 to have a real meaningful purpose in this economy. 0:18:10.080 --> 0:18:11.480 Peter, I'm thinking of the big take that you do 0:18:11.560 --> 0:18:16.040 with Sara Holder that's on the Bloomberg right now, and 0:18:16.800 --> 0:18:19.720 I guess they were asking. She was asking along with 0:18:20.560 --> 0:18:24.399 Katerina Sariva, talking about this case shaped economy not just 0:18:24.440 --> 0:18:28.399 being kind of the same thing as like measuring inequality. 0:18:28.920 --> 0:18:31.520 And I'm just thinking about a response that you gave 0:18:31.520 --> 0:18:33.520 and you said, it's not just inequality in terms of 0:18:33.560 --> 0:18:37.400 an economic sense, it's inequality multiple dimensions at once. Because 0:18:37.440 --> 0:18:40.840 for those at the bottom, they have scarcity and education 0:18:41.040 --> 0:18:44.960 and healthcare, in childcare, in job opportunity, they have what 0:18:45.400 --> 0:18:49.000 you termed stacked vulnerability, where the economic piece is just 0:18:49.080 --> 0:18:51.359 one more thing. And at the same time, those at 0:18:51.400 --> 0:18:55.120 the top have an overabundance in everything, power, money, influence, 0:18:55.119 --> 0:18:56.840 and so it's become very difficult for those at the 0:18:56.880 --> 0:19:00.800 bottom to ignore what's happening around them. It's also something 0:19:00.840 --> 0:19:03.520 that has accumulated over years. It feels like whether there 0:19:03.520 --> 0:19:06.680 were Republicans or Democrats in the White House are in 0:19:06.800 --> 0:19:09.920 charge in Congress, So is it going to take time 0:19:10.000 --> 0:19:13.159 for us to get this fixed, or do the people 0:19:13.280 --> 0:19:15.040 like I don't know you know. I had a brit 0:19:15.160 --> 0:19:17.080 say to me, you're a young nation. You're going to 0:19:17.119 --> 0:19:20.679 have some kind of uprising, a revolution, Like, I don't know, 0:19:20.720 --> 0:19:25.240 how do you I understand policymakers going at this, but 0:19:25.800 --> 0:19:27.679 it seems like it's a big task. 0:19:28.560 --> 0:19:28.760 Yeah. 0:19:28.800 --> 0:19:31.239 I think those at the top ignore the impatience at 0:19:31.240 --> 0:19:35.359 the bottom. Time moves very slowly when you lack confidence. 0:19:35.920 --> 0:19:40.240 And I also think that those at the top are 0:19:40.320 --> 0:19:44.280 largely blind to the human experience at the bottom, and 0:19:44.320 --> 0:19:47.120 at the same time, those at the bottom are all 0:19:47.200 --> 0:19:50.560 too aware of the abundance that exists above them. 0:19:50.800 --> 0:19:53.600 Thanks to Peter Atwater, president of Financial Insights and adjunct 0:19:53.680 --> 0:19:56.399 lecture of Economics at the College of William and Mary. 0:19:56.200 --> 0:19:59.359 Coming up, how one auto parts manufacturer is faring under 0:19:59.400 --> 0:20:00.639 the president tariffs. 0:20:00.800 --> 0:20:03.879 The CEO of Magna International is next. You're listening to 0:20:03.880 --> 0:20:06.399 Bloomberg Business Week. This is Bloomberg. 0:20:08.520 --> 0:20:12.520 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:20:12.600 --> 0:20:16.040 live weekday afternoons from two to five pm Eastern. Listen 0:20:16.080 --> 0:20:18.800 on Apple CarPlay and the Android Auto with the Bloomberg 0:20:18.880 --> 0:20:22.639 Business app, or watch us live on YouTube. 0:20:22.960 --> 0:20:27.919 When Magna International reported earnings on Halloween, shares. The autoparts 0:20:27.920 --> 0:20:30.240 manufacturer rallied as much as seven percent inter day in 0:20:30.280 --> 0:20:33.639 response to third quarter sales and adjusted EPs beats. Magna 0:20:33.640 --> 0:20:37.720 management also raised its fiscal year sales forecast thanks to 0:20:37.800 --> 0:20:39.880 strengthen North America and China. There was a lot going on. 0:20:40.160 --> 0:20:43.400 Company based in Canada, biggest automotive supplier of North America. 0:20:43.440 --> 0:20:48.199 Everything from automated driving control modules, powertrains, lighting mirrors, complete 0:20:48.200 --> 0:20:51.280 engineering systems, so much. It is a great, great, great 0:20:51.359 --> 0:20:53.840 read on the auto economy. 0:20:54.280 --> 0:20:57.040 Back with us is Swami Coda Geary, president and CEO 0:20:57.200 --> 0:21:00.880 of nearly fourteen billion dollar market cap autoparts maker Magna International. 0:21:00.960 --> 0:21:03.640 The stock up close to eighteen percent so far this year. 0:21:04.119 --> 0:21:05.880 I want to start with kind of where we left 0:21:05.920 --> 0:21:08.080 off when we spoke to you back in April. This 0:21:08.240 --> 0:21:11.560 was just after the president's so called Liberation Day tariffs. 0:21:11.840 --> 0:21:15.240 You liken them and the additional cost to drawing upon 0:21:15.280 --> 0:21:19.920 the playbooks from past rotating UAW strikes, COVID, the Great 0:21:19.960 --> 0:21:23.080 Financial Crisis, the Chip crisis all rolled together. 0:21:23.119 --> 0:21:23.919 We were pretty. 0:21:23.640 --> 0:21:26.480 Shocked about those comments because you said it was big. 0:21:26.880 --> 0:21:28.280 Is it still that big. 0:21:28.080 --> 0:21:30.040 Of an impact? Has it been that big of an impact? 0:21:30.400 --> 0:21:33.919 Yes, there has been a lot of dynamic challenges in 0:21:33.960 --> 0:21:36.520 the industry, as you know, and Benny spoke to me 0:21:36.600 --> 0:21:39.359 last year. It was fresh, you know at that time. 0:21:39.880 --> 0:21:41.920 As we sit here and look at it, I think 0:21:42.000 --> 0:21:46.119 our annualized tariff impact is roughly in the range of 0:21:46.119 --> 0:21:49.840 two hundred million. But we continue to work with our team, 0:21:49.880 --> 0:21:53.320 with our customers, with our supply base, and mitigating as 0:21:53.400 --> 0:21:57.800 much as possible, you know, adhering to the USMCA compliance. 0:21:58.240 --> 0:22:01.119 All in all, I think we have been able to 0:22:01.440 --> 0:22:03.880 with a lot of self help, a lot of work 0:22:03.920 --> 0:22:07.520 with our customers, we've been able to bring down that 0:22:07.600 --> 0:22:11.280 impact to roughly ten bass points, which means about thirty 0:22:11.320 --> 0:22:12.840 million for Magna this year. 0:22:13.200 --> 0:22:16.159 So I will say our BI team reacted to our 0:22:16.200 --> 0:22:21.040 Bloomberg intelligence team, Swamy reacted and they said they believe 0:22:21.080 --> 0:22:24.560 that your company's continuous cost cutting and operational excellence could 0:22:24.600 --> 0:22:27.919 further release margin gains in twenty twenty six. And they 0:22:28.000 --> 0:22:30.399 talk about in the US major customers are benefiting from 0:22:30.440 --> 0:22:33.640 a more profitable sales mix, with higher sales and pickups 0:22:33.640 --> 0:22:37.960 and SUVs offsetting lower EV production, which should enhance Magnus 0:22:37.960 --> 0:22:41.639 program economics for upcoming twenty twenty six launches. Do they 0:22:41.640 --> 0:22:42.160 have it right? 0:22:43.440 --> 0:22:46.400 Yes, they do. There's a lot of hard work and 0:22:46.800 --> 0:22:49.520 thanks to the team, there's been a lot of traction 0:22:49.640 --> 0:22:53.040 in our operational activities, including some of the activities that 0:22:53.080 --> 0:22:57.639 you men mentioned cost restructuring, optimizing our operations. We have 0:22:57.800 --> 0:23:02.160 really worked through about forty divisions, inter of restructuring, consolidation, 0:23:02.359 --> 0:23:06.160 bringing things together, and when the mix in the volume 0:23:06.240 --> 0:23:10.320 becomes stable and it comes through, you see profitability going 0:23:10.359 --> 0:23:13.480 to the bottom line, and that has been our focus. 0:23:13.560 --> 0:23:17.080 Cost reduction, margin expansion, and free cash flow generation. We've 0:23:17.119 --> 0:23:20.399 talked about one hundred and fifty basis points over the 0:23:20.480 --> 0:23:23.480 last three years, and I'm glad to say we have 0:23:23.760 --> 0:23:27.040 an additional visibility of thirty five to forty basis points 0:23:27.080 --> 0:23:30.040 going into twenty twenty six. So this is a journey. 0:23:30.040 --> 0:23:32.800 It's never going to stop. In an industry that we 0:23:32.880 --> 0:23:37.160 need to constantly work on improvements. We call them continuous improvements, 0:23:37.160 --> 0:23:39.040 and we're starting to see the result of that. 0:23:39.280 --> 0:23:41.680 But you did talk about demand destruction the short term 0:23:41.680 --> 0:23:44.160 when we talked with you in April, right after Liberation Day. 0:23:44.800 --> 0:23:46.560 How has it played out as bad as you expected? 0:23:46.600 --> 0:23:49.399 And where are we today? Your top customers are who's 0:23:49.400 --> 0:23:52.280 who of the global auto industry. So where are we 0:23:52.359 --> 0:23:55.639 today in that demand destruction? Are we done? 0:23:56.880 --> 0:23:59.639 I wish I could have that crystal ball, But you know, 0:24:00.040 --> 0:24:01.840 the way I look at it is we peaked out 0:24:01.960 --> 0:24:05.200 as our industry in North America about seventeen and a 0:24:05.240 --> 0:24:08.639 half million units. Interestingly, I was looking at the data 0:24:09.040 --> 0:24:11.080 go back twenty years. In two thousand and four two 0:24:11.119 --> 0:24:14.640 thousand and six time frame, North American production volumes were 0:24:14.640 --> 0:24:17.720 somewhere between fifteen to sixteen. We are still at fifteen 0:24:17.760 --> 0:24:21.440 to sixteen million units today. I think the volumes held 0:24:21.520 --> 0:24:24.400 up this year, but I always like to stand back 0:24:24.440 --> 0:24:27.200 a little and see where it was Magna. Magna twenty 0:24:27.280 --> 0:24:29.760 years ago was a twenty billion dollar company. Today we're 0:24:29.800 --> 0:24:32.960 a forty billion dollar company. And it's the result in 0:24:33.000 --> 0:24:35.760 the efforts of the team to continue to gain CPV 0:24:36.400 --> 0:24:40.120 and to diversifire customer base, and that's where our focus 0:24:40.280 --> 0:24:43.119 is right And to your point, though, I hope this 0:24:43.320 --> 0:24:46.000 is the trough. If you look at the average age 0:24:46.040 --> 0:24:50.200 of the fleet, it's pretty high. The inventories are pretty normal. 0:24:50.720 --> 0:24:53.320 So I like to say, you know, there is an 0:24:53.359 --> 0:24:56.439 elasticity of demand that's going to come back looking forward, 0:24:56.480 --> 0:24:59.719 if there is no more externalities like we have had 0:24:59.760 --> 0:25:01.000 in the last four years. 0:25:01.480 --> 0:25:05.760 Your company is based in Ontario. We are curious about 0:25:05.760 --> 0:25:10.680 the US and Canada trade negotiations or lack thereof. Given 0:25:10.680 --> 0:25:13.600 the impasse between the US and Canada, how is that 0:25:14.000 --> 0:25:16.800 affecting your industry and you specifically. 0:25:17.359 --> 0:25:21.600 Yeah, As you know, auto industry is very interdependent ecosystem 0:25:21.640 --> 0:25:26.080 and it's pretty complex in North America, so it has 0:25:26.160 --> 0:25:28.600 been challenging. But I would like to look at Magna 0:25:28.720 --> 0:25:33.920 really as a global company. We have tens of thousands 0:25:33.960 --> 0:25:38.800 of people in Mexico, in Canada and in US, and 0:25:39.119 --> 0:25:42.200 obviously we are following the footprint of our customers, looking 0:25:42.280 --> 0:25:46.159 at the economics, looking at transportation, looking at logistics, and 0:25:46.480 --> 0:25:50.480 that is the competitiveness that ultimately lets you be the 0:25:50.520 --> 0:25:53.080 player that you are. Right, So the focus has been 0:25:53.119 --> 0:25:57.160 on it. Whatever the policy is, If there is certainty 0:25:57.440 --> 0:26:00.640 and visibility to the policy going forward, I think it's 0:26:00.720 --> 0:26:03.240 just going to be a tailwind to everybody, the oidiums 0:26:03.280 --> 0:26:06.080 and the supply base in all but Swami. 0:26:06.160 --> 0:26:08.840 Is it broken the US Canada? I mean it's been 0:26:08.880 --> 0:26:15.560 so intertwined really, the North American global auto supply chain. 0:26:15.640 --> 0:26:20.400 But is it, especially the US and Canada, is it 0:26:21.080 --> 0:26:21.800 changed forever? 0:26:22.880 --> 0:26:26.520 Again, I'm not an international trade policy expert speaking from 0:26:26.760 --> 0:26:27.680 but you have a. 0:26:27.520 --> 0:26:31.680 Great advantage and a great window on how it has 0:26:31.800 --> 0:26:33.560 worked and how it feels today. 0:26:34.080 --> 0:26:38.120 It's definitely been strained, right, There's no question about that. 0:26:38.280 --> 0:26:42.000 But I've lived in this industry for twenty six years, 0:26:42.040 --> 0:26:46.080 and what we're talking today is going to impact maybe 0:26:46.119 --> 0:26:49.600 twenty seven or twenty eight. So we're always looking at 0:26:49.840 --> 0:26:51.840 what we are doing today impacts three or four years 0:26:51.840 --> 0:26:54.080 down the road. What we are doing today has been 0:26:54.480 --> 0:26:57.480 planned and decided three or four years ago, So I 0:26:57.560 --> 0:26:59.800 tend to think a little bit in longer cycles. 0:27:00.840 --> 0:27:01.040 You know. 0:27:01.119 --> 0:27:05.280 I'm still hopeful that the policy is going to get 0:27:05.280 --> 0:27:08.560 to a point where it's mutually beneficial to everyone the president. 0:27:08.560 --> 0:27:10.680 In the past, the President of the US has talked 0:27:10.720 --> 0:27:14.720 about his back and forth in his conversations with executives 0:27:14.720 --> 0:27:17.040 at North American auto companies. 0:27:17.440 --> 0:27:19.640 Have you had conversations with the President or his team, 0:27:21.520 --> 0:27:21.760 We have. 0:27:21.840 --> 0:27:24.320 Had obviously a seat at the table in being able 0:27:24.359 --> 0:27:28.439 to communicate facts that possible impacts, the challenges of the 0:27:28.520 --> 0:27:31.919 industry and what could benefit I always say we are 0:27:31.960 --> 0:27:34.719 able to give an opinion one of the opinions. I 0:27:34.760 --> 0:27:38.600 hope it's a dot on the chart. And definitely we 0:27:38.640 --> 0:27:42.600 have talked to all three regions right expressing what is 0:27:42.640 --> 0:27:44.960 the jobs that we have, what is the investments that 0:27:45.000 --> 0:27:48.480 we have made, and how it could impact r Definitely, 0:27:48.520 --> 0:27:50.680 that is the conversation that's always ongoing. 0:27:50.960 --> 0:27:53.159 Hey, Swammy, one thing we wanted to ask you the 0:27:53.240 --> 0:27:56.200 EV retrenchment that we continue to talk about here at Bloomberg, 0:27:56.240 --> 0:27:58.720 how is it affecting your business and the auto industry 0:27:58.720 --> 0:28:01.320 in general. You've got Fordkinson during killing the F one 0:28:01.400 --> 0:28:04.800 fifty Lightning, Stilantis killing the ram EV, and GM taking 0:28:04.880 --> 0:28:08.240 a one point six billion dollar impairment charge on its 0:28:08.320 --> 0:28:13.399 EV assets. That feels pretty chilling. How is that impacting 0:28:13.480 --> 0:28:13.919 you guys? 0:28:15.400 --> 0:28:18.480 In the past, we've always looked at EV and if 0:28:19.000 --> 0:28:20.800 you look at some of the comments that we've made, 0:28:20.840 --> 0:28:24.320 I think we were a little bit conservative. But definitely 0:28:24.359 --> 0:28:29.119 the North American EV penetration has had an impact on us. 0:28:29.160 --> 0:28:31.760 We came back and talked about the impact of our 0:28:31.800 --> 0:28:35.080 revenue going forward in the August I think of twenty 0:28:35.119 --> 0:28:38.760 twenty four. But the key thing has been how we've 0:28:38.760 --> 0:28:41.480 been able to pivot. We had our peak capex spend 0:28:41.520 --> 0:28:44.640 in twenty three twenty two, we got back to the 0:28:44.680 --> 0:28:48.080 sales to capex ratio. Shows our agility and being able 0:28:48.120 --> 0:28:51.680 to get back, and you know, look at optimizing how 0:28:51.720 --> 0:28:54.080 we can re use some of the capital with the 0:28:54.080 --> 0:28:56.320 help of the customers and so on and so forth. 0:28:56.720 --> 0:28:59.840 But overall, EV, I think in other regions continues and 0:29:00.120 --> 0:29:03.080 as a global company, we see that continuing in China 0:29:03.120 --> 0:29:06.480 and Europe. But when it does come back, and we 0:29:06.560 --> 0:29:09.480 still believe EV is a secular trend, that take rate 0:29:09.600 --> 0:29:12.560 is very different than what we all expected a couple 0:29:12.600 --> 0:29:16.320 of years ago. But with the investments already there, with 0:29:16.440 --> 0:29:20.640 the development that's behind us, and our ability to hit 0:29:20.680 --> 0:29:23.840 whether it's an internal combustion engine or a bav or 0:29:23.880 --> 0:29:27.720 a hybrid, that flexibility in our product line has helped 0:29:27.800 --> 0:29:32.120 us whether the storm pretty well. And I know, I 0:29:32.160 --> 0:29:34.680 think that's what we need to continue to do going forward. 0:29:34.800 --> 0:29:37.320 I know that the decisions you make now are decisions 0:29:37.320 --> 0:29:40.560 for four years from now. So are you changing product 0:29:40.600 --> 0:29:43.560 plans to develop more gas powered vehicles or it helps 0:29:43.680 --> 0:29:45.880 make supplies for more gas powered vehicles? 0:29:46.560 --> 0:29:48.400 Yes, Tim, I think we have had a lot of 0:29:48.960 --> 0:29:54.520 content in obviously the internal combustion engine platforms, right, and 0:29:54.600 --> 0:29:57.600 as some of these programs are delayed or pushed out, 0:29:57.640 --> 0:30:01.080 we continue to get leverage on the existing programs and 0:30:01.120 --> 0:30:03.600 we continue to win. The other thing to note is 0:30:03.640 --> 0:30:06.080 a lot of our products, almost eighty percent of our 0:30:06.120 --> 0:30:09.600 product is propulsion agnostic. That means whether a make a 0:30:09.680 --> 0:30:13.040 mirror or a door, or a structure or a seat, 0:30:13.680 --> 0:30:16.040 we'll make it for whatever propulsion it is. 0:30:16.280 --> 0:30:16.400 Right. 0:30:16.880 --> 0:30:19.480 So, as far as we are flexible and continue to 0:30:19.520 --> 0:30:22.440 do that in our processes, we've been able to take 0:30:22.440 --> 0:30:27.200 advantage of that of that flexibility and gain market and 0:30:27.280 --> 0:30:28.600 continue to grow our revenues. 0:30:28.760 --> 0:30:30.880 So I want me just thirty seconds here, any signs 0:30:30.880 --> 0:30:34.360 of a US recession, a global recession. What's the word 0:30:34.360 --> 0:30:38.360 that you would use to describe the marketplace right now? 0:30:38.400 --> 0:30:38.880 Just quickly? 0:30:39.880 --> 0:30:43.600 Yeah, I think there is signs of stress, I would say, 0:30:43.640 --> 0:30:47.480 And obviously that puts us all us on a cautionary foot. 0:30:48.400 --> 0:30:51.200 But like I said, from an auto industry, the inventory 0:30:51.240 --> 0:30:55.360 seem normal. The average age of the fleet is pretty high, 0:30:55.400 --> 0:30:58.560 so we are looking for auto demand not to be 0:30:58.680 --> 0:31:01.640 impacted that much. We've still remained very cautious. 0:31:01.760 --> 0:31:04.800 That was Swami Koda Gharri, President and chief executive officer 0:31:05.000 --> 0:31:06.280 of Magna International. 0:31:06.440 --> 0:31:08.160 I really do love talking with him Tim, because we 0:31:08.200 --> 0:31:10.880 get a great read on the global supply chain. I 0:31:10.880 --> 0:31:14.280 mean auto If you think about how many different countries 0:31:14.280 --> 0:31:16.960 have been involved, how many times there you know different 0:31:16.960 --> 0:31:21.360 parts might be crossing borders. It's really complicated. It involves 0:31:21.360 --> 0:31:23.880 a lot of pieces, and he really gets into it 0:31:23.880 --> 0:31:24.600 and understands it. 0:31:24.840 --> 0:31:25.080 Yeah. 0:31:25.080 --> 0:31:29.120 He also understands that in order to make decisions for 0:31:29.200 --> 0:31:31.840 the next few years, he has to do them now, 0:31:32.000 --> 0:31:34.640 So he talks a lot to us about Okay, if 0:31:34.640 --> 0:31:36.480 this is what we're going to do in twenty thirty, 0:31:36.800 --> 0:31:38.920 this is the decision we need to make right now. 0:31:39.280 --> 0:31:41.880 And one area that I think has sold a lot 0:31:41.880 --> 0:31:43.920 of confusion, not just for automakers but for the parts 0:31:43.920 --> 0:31:45.880 suppliers is the fate of ebs. 0:31:45.880 --> 0:31:46.640 At least here in the AA. 0:31:46.720 --> 0:31:48.720 Love that you went there because this you know, five 0:31:48.800 --> 0:31:51.880 years ago they couldn't make evs fast enough. Fast forward 0:31:51.920 --> 0:31:54.880 to today, it's like, Okay, well, what does demand look like, 0:31:55.000 --> 0:31:58.240 what does adoption look like? And how does that reset 0:31:58.280 --> 0:32:00.720 what these auto companies are doing terms of what they're 0:32:00.720 --> 0:32:02.600 offering to consumers. And when they're offering it. 0:32:02.640 --> 0:32:05.000 But what's interesting is right he is taking the longer 0:32:05.120 --> 0:32:08.160 term perspective. And if you look outside the United States, 0:32:08.240 --> 0:32:12.120 I mean China or elsewhere ev you know, people are 0:32:12.120 --> 0:32:15.160 buying electric vehicles and so I think he's going on 0:32:15.160 --> 0:32:19.200 the assumption that that's the future. And so love getting 0:32:19.200 --> 0:32:19.840 his perspective. 0:32:20.080 --> 0:32:22.600 I always love getting his perspective. We also love getting 0:32:22.600 --> 0:32:25.160 the perspective of the CEO of Axon Enterprise. He's going 0:32:25.200 --> 0:32:26.680 to join us next Yeah. 0:32:26.520 --> 0:32:29.320 It's the company best known for tasers. His stock has 0:32:29.320 --> 0:32:32.240 been on fire over the past decade, but it recently. 0:32:32.600 --> 0:32:35.360 I got to say the company did catch investors off 0:32:35.400 --> 0:32:37.960 guard with earnings and another acquisition. 0:32:38.320 --> 0:32:39.440 This is Bloomberg. 0:32:41.400 --> 0:32:45.240 This is the Bloomberg Business Week Daily podcast. Listen live 0:32:45.360 --> 0:32:48.239 each weekday starting at two pm Eastern on Apple car 0:32:48.320 --> 0:32:51.200 Play and the Android Auto with the Bloomberg Business App. 0:32:51.240 --> 0:32:54.000 You can also listen live on Amazon Alexa from our 0:32:54.040 --> 0:32:58.480 flagship New York station Just Say Alexa played Bloomberg eleven thirty. 0:33:00.080 --> 0:33:03.080 Earlier this month. Axon Enterprise, it's a company known for 0:33:03.160 --> 0:33:07.080 making tasers, missed analyst estimates for third quarter profit after 0:33:07.120 --> 0:33:10.240 it reported higher costs resulting from the implementation of tariffs. 0:33:10.240 --> 0:33:13.720 Now that sent it shares slumping twenty percent and extended 0:33:13.760 --> 0:33:18.280 trading despite reporting record revenues. So investors definitely turned sour 0:33:18.360 --> 0:33:19.080 on that report. 0:33:19.160 --> 0:33:21.720 On top of that, Axon agreed to buy emergency tech 0:33:21.760 --> 0:33:24.479 company Carbine. That's a deal valuing the company at six 0:33:24.600 --> 0:33:27.440 hundred and twenty five million dollars. Still, it is worth 0:33:27.480 --> 0:33:29.800 noting that stock got more than thirty three one hundred 0:33:29.800 --> 0:33:32.800 percent since the end of twenty fifteen. That was when 0:33:32.840 --> 0:33:34.680 Axon was just seventeen dollars. 0:33:34.840 --> 0:33:38.480 Yeah, it's not a seventeen dollars stock anymore. In fact, 0:33:38.920 --> 0:33:40.520 you know, when you look at it on the Bloomberg 0:33:40.560 --> 0:33:43.720 this is a stock that now trades at about five 0:33:43.800 --> 0:33:46.240 hundred and seventy dollars this share. So, as we said, 0:33:46.240 --> 0:33:48.680 it's been on fire, but investors a little bit of 0:33:48.680 --> 0:33:51.000 a rethink from more. We caught up with the CEO 0:33:51.040 --> 0:33:54.320 of Axon, Rick Smith. He is still feeling optimistic. 0:33:54.360 --> 0:33:56.680 Yeah, I'd say the business is the strongest it has 0:33:56.760 --> 0:33:59.760 ever been. You know, it's a public CEO for like 0:34:00.000 --> 0:34:02.240 twenty four years now, and this is the fifth time 0:34:02.520 --> 0:34:05.520 we've come in reported the business with really strong operating 0:34:05.560 --> 0:34:08.759 results and then the stock drops. So I just tell 0:34:08.800 --> 0:34:11.560 our people don't even look at the stock price like 0:34:11.640 --> 0:34:13.400 it's going to move around for a bunch of factors. 0:34:13.400 --> 0:34:16.200 Where we stay focused is building the long term business 0:34:16.600 --> 0:34:19.120 and every previous time it's recovered and we're going to 0:34:19.160 --> 0:34:22.040 stick with that playbook. And if you look at where 0:34:22.120 --> 0:34:24.480 we're growing from some of our new investments, you know, 0:34:24.520 --> 0:34:28.040 from counter drone and fuse this real time crime centers 0:34:28.040 --> 0:34:30.560 and artificial intelligence, our bookings in those areas are up 0:34:30.960 --> 0:34:33.360 almost triple year over year. And then we just announced 0:34:33.360 --> 0:34:36.160 two new acquisitions that is our entry into them mission 0:34:36.160 --> 0:34:39.239 critical voice space, which we think is going to be 0:34:39.640 --> 0:34:41.440 a huge opportunity over the next decade. 0:34:41.520 --> 0:34:43.600 So what are you guys seeing that investors and analysts 0:34:43.640 --> 0:34:46.120 are not seeing because the narrative that you have and 0:34:46.400 --> 0:34:49.800 your tone doesn't necessarily match the reaction from the street. 0:34:51.280 --> 0:34:53.759 Yeah, I mean part of this excuse me was we 0:34:53.800 --> 0:34:57.440 did have a gap operating loss, a tiny one, but 0:34:57.480 --> 0:35:00.360 that's largely because we have this very unique stock in 0:35:00.440 --> 0:35:03.319 center program we call the Exponential Stock Plan, and all 0:35:03.360 --> 0:35:07.280 of our employees participate. And when the stock does really 0:35:07.280 --> 0:35:11.200 well and we're hitting our operating targets, stock comp goes up, 0:35:11.440 --> 0:35:14.919 and so paradoxically, the better the operating business does, the 0:35:14.960 --> 0:35:17.359 more stock comp goes up. And that was the biggest mover. 0:35:17.840 --> 0:35:20.239 But if you look at the adjusted EBIT data, if 0:35:20.280 --> 0:35:22.799 you take that noise out, you know we managed to 0:35:22.800 --> 0:35:25.800 turn in. We've got like seven consecutive quarters over thirty 0:35:25.840 --> 0:35:28.880 percent top line growth, and we turned in right at 0:35:28.920 --> 0:35:31.840 twenty five percent or twenty four point nine adjusted EBITDA 0:35:32.120 --> 0:35:34.640 while maintaining the growth rate. And if you listen to 0:35:34.719 --> 0:35:36.440 our president, who used to be the head of sales, 0:35:36.719 --> 0:35:39.080 is very close to the customer. You know, he was 0:35:39.120 --> 0:35:41.680 pretty bullish on our conference called telling people we think 0:35:41.719 --> 0:35:44.520 the fourth quarter is going to be a monster from 0:35:44.560 --> 0:35:47.200 a bookings perspective. So we're feeling really good, all right. 0:35:47.200 --> 0:35:48.799 I want to come back to that monster for the 0:35:48.800 --> 0:35:50.719 fourth quarter in terms of bookings. But I want to 0:35:50.760 --> 0:35:52.759 say that you know, Rick, you get this. You've been 0:35:52.760 --> 0:35:54.239 a CEO for a long time. When you're kind of 0:35:54.280 --> 0:35:57.799 price for perfection, you know, investors can be like, well 0:35:57.800 --> 0:36:01.759 wait a minute, citizens an investor there, Trevor Walsh said 0:36:01.800 --> 0:36:03.680 the company had little room for error in its report. 0:36:03.719 --> 0:36:07.279 It made investors' concerns about valuations. Stock trades at three 0:36:07.360 --> 0:36:11.000 hundred and ninety eight times current earnings or nearly ninety 0:36:11.040 --> 0:36:13.800 four times future earnings. You've got a forty seven billion 0:36:13.840 --> 0:36:17.000 dollar market cap with projected twenty twenty five earnings of 0:36:17.000 --> 0:36:21.320 two point seven billion, So your price to sales or 0:36:21.360 --> 0:36:22.960 at least there are in terms of your market app 0:36:23.719 --> 0:36:26.680 you know, expectations. I mean, there's there's a lot there 0:36:26.920 --> 0:36:29.920 that they expect everything to kind of just hit perfectly. 0:36:30.440 --> 0:36:33.000 There's also concerns about tyrists of the government shutdown. There's 0:36:33.040 --> 0:36:35.920 also concerns that you just did a second acquisition here 0:36:36.560 --> 0:36:38.799 less than two months after you did that agreement to 0:36:38.920 --> 0:36:42.880 acquire Prepared, which was an AI powered emergency communications platform. 0:36:42.960 --> 0:36:46.920 So why is that valuation or why is that you know, 0:36:47.719 --> 0:36:49.880 market cap versus sales justified? 0:36:51.080 --> 0:36:53.520 Well, first, i'd probably get a note from my general 0:36:53.560 --> 0:36:55.759 counsel telling me not to use words like monster when 0:36:55.800 --> 0:36:57.040 talking about future performance. 0:36:57.680 --> 0:37:00.359 Really, come back, is your phone going off right now 0:37:00.360 --> 0:37:00.799 next to you? 0:37:01.280 --> 0:37:01.640 Yeah? 0:37:01.760 --> 0:37:04.840 Yeah, it probably is. But look, the core business is 0:37:04.880 --> 0:37:07.560 really strong. Gap EPs is a really hard way to 0:37:07.640 --> 0:37:10.680 value the business. Because I talked about the stronger the 0:37:10.680 --> 0:37:13.640 operating business, the more gap EPs gets punished with stock 0:37:13.880 --> 0:37:16.120 competition to expense, so I think something like looking at 0:37:16.320 --> 0:37:18.719 a multiple of revenue is probably a little more like 0:37:19.760 --> 0:37:22.279 gonna be a little more instructive. But look, yes, there 0:37:22.440 --> 0:37:25.279 we are valued as a growing company that's got to 0:37:25.320 --> 0:37:29.600 continue to deliver, and we've been delivering. I think we've had, 0:37:29.640 --> 0:37:32.080 like I said, seven quarters of over thirty percent growth 0:37:32.480 --> 0:37:34.560 and it's our job as a management team to keep 0:37:34.560 --> 0:37:37.080 delivering on that. And you know, if the stock takes 0:37:37.080 --> 0:37:40.040 a breather, you know that's kind of outside our control 0:37:40.080 --> 0:37:42.160 and you don't have an optimist. It creates a great 0:37:42.280 --> 0:37:44.360 entry point for some of our long term investors, and 0:37:44.400 --> 0:37:46.440 we're just going to keep chugging away working on the 0:37:46.480 --> 0:37:48.239 business to make sure we keep growing. And those two 0:37:48.280 --> 0:37:51.200 new acquisitions they're a big piece of it. We made 0:37:51.200 --> 0:37:53.800 a very strategic move to move into mission critical voice. 0:37:53.800 --> 0:37:57.200 We think AI plus voice now is a very magical 0:37:57.239 --> 0:37:59.359 moment and there's a lot of AI hype out there, 0:37:59.400 --> 0:38:01.800 but look, ten percent of our core business bookings this 0:38:01.920 --> 0:38:04.359 year are going to be on our AI services, so 0:38:04.600 --> 0:38:07.439 we're really delivering value to our customers and we see 0:38:07.520 --> 0:38:09.320 doing that in nine to one one call centers and 0:38:09.320 --> 0:38:12.040 then extending across You know, any sort of mission critical 0:38:12.080 --> 0:38:14.360 voice communication is going to be a huge business, and 0:38:14.400 --> 0:38:17.520 we found two very complementary businesses. Prepared allows us to 0:38:17.520 --> 0:38:20.440 go fast into any nine one own call center, and 0:38:20.480 --> 0:38:23.600 then Carbine allows those customers to then go deep and 0:38:23.680 --> 0:38:25.480 get out of the business of running all the hardware 0:38:25.520 --> 0:38:28.400 and move their entire nine one one infrastructure to the cloud. 0:38:28.480 --> 0:38:30.160 And those two together, we think are like chocolate and 0:38:30.160 --> 0:38:32.480 peanut butter. It's gonna be a great combo. 0:38:32.560 --> 0:38:34.120 Well, I do want to ask you about those monster 0:38:34.120 --> 0:38:36.799 bookings for the fourth quarter. But having said that, tell 0:38:36.840 --> 0:38:38.600 us about you said ten percent of the bookings this 0:38:38.719 --> 0:38:41.279 year are going to be on AI services. You know 0:38:41.440 --> 0:38:43.759 how much is still Tasers like, give us an idea 0:38:43.760 --> 0:38:45.680 of what the business is today and kind of where 0:38:45.719 --> 0:38:48.040 you guys are positioning it, especially as you take on 0:38:48.080 --> 0:38:48.919 these acquisitions. 0:38:49.880 --> 0:38:50.239 Got it. 0:38:50.239 --> 0:38:53.640 Well, I'm terrible in details, but I can tell you 0:38:53.680 --> 0:38:57.279 the Taser business is. It continues to grow, even though 0:38:57.280 --> 0:38:59.319 it is a fairly mature business in the US, where 0:38:59.320 --> 0:39:02.080 the real opportunity is our new Taser ten. For the 0:39:02.160 --> 0:39:04.040 first time, we have a weapon that some of our 0:39:04.080 --> 0:39:06.799 customers in Europe were saying is a better weapon for 0:39:06.880 --> 0:39:10.160 their officers than even a handgun. And if we can 0:39:10.239 --> 0:39:12.319 prove that out this winter, we'll be testing it above 0:39:12.360 --> 0:39:15.720 the Arctic Circle and heavy cold conditions with heavy clothing, 0:39:15.719 --> 0:39:18.719 which is our historically been our Achilles heel. If we 0:39:18.760 --> 0:39:22.320 succeed there, we could see Taser really become a driving 0:39:22.360 --> 0:39:25.120 force across Europe and the rest of the world outside 0:39:25.120 --> 0:39:27.520 of the US. So, even though it's been our core 0:39:27.560 --> 0:39:29.880 business from the beginning, Taser we think could be the 0:39:29.880 --> 0:39:32.920 growth engine that pulls body cameras, drones, AI and all 0:39:32.920 --> 0:39:34.640 our other services right along with it. 0:39:34.680 --> 0:39:36.640 Well, let's talk about those other services, because if I 0:39:36.680 --> 0:39:39.600 go back into your earnings and look at twenty seventeen, 0:39:39.880 --> 0:39:42.359 connected devices account for close to seventy percent of your 0:39:42.400 --> 0:39:45.440 total revenue. Software and services was just over thirty percent 0:39:45.440 --> 0:39:48.880 of revenue. If we fast forward to just in recent years, 0:39:49.040 --> 0:39:51.920 last year that pretty much flipped, where connected devices was 0:39:51.960 --> 0:39:54.520 forty percent and software and services is now close to 0:39:54.560 --> 0:39:58.560 sixty one percent of your business. How big does software 0:39:58.560 --> 0:39:59.359 and services get? 0:39:59.400 --> 0:40:00.759 What's the old goal there? 0:40:01.760 --> 0:40:03.680 Well, that's sort of like asking me which of my 0:40:03.800 --> 0:40:04.760 children is my favorite? 0:40:04.800 --> 0:40:05.839 I love them all, but I. 0:40:05.760 --> 0:40:08.680 Mean one of those has a higher margin. Right, Oh, yeah, 0:40:08.680 --> 0:40:09.680 one has a higher margin. 0:40:09.719 --> 0:40:12.600 But when you can do hardware and software together, when 0:40:12.600 --> 0:40:15.279 you can do body cameras, drones in card cameras and 0:40:15.400 --> 0:40:17.960 the software layer, you can just do so much more 0:40:18.000 --> 0:40:20.040 magical things for the customer than if you're a pure 0:40:20.080 --> 0:40:20.719 software play. 0:40:20.880 --> 0:40:21.080 Chah. 0:40:21.200 --> 0:40:24.120 Investors love the software revenue and margins, and so do we. 0:40:24.520 --> 0:40:27.480 But the hardware is also growing and really contributing. And 0:40:27.520 --> 0:40:29.680 it's when you bring it all together that we think 0:40:29.719 --> 0:40:32.360 the magic happens. And that's our real competitive advantage. 0:40:32.480 --> 0:40:33.719 Hey, one of the things I want to ask you 0:40:33.800 --> 0:40:36.960 about is there's been a bunch of reporting. There's a 0:40:37.000 --> 0:40:40.200 story about Flock Safety, which is one of your competitors, 0:40:40.239 --> 0:40:43.319 to be fair, and what's interesting is, I guess you 0:40:43.360 --> 0:40:47.640 guys are all doing deals with the Amazon ring and 0:40:47.680 --> 0:40:51.440 this camera, and you know footage is certainly being shared 0:40:51.640 --> 0:40:55.560 with law enforcement, whether it's ice and others. Again, there's 0:40:55.600 --> 0:40:58.560 a lot of reporting that's being done about this, and 0:40:58.600 --> 0:41:01.759 at the same time some community backlash. So are you 0:41:01.920 --> 0:41:06.640 concerned about community pushback as we have more and more 0:41:06.680 --> 0:41:08.759 surveillance that is out there and that is a big 0:41:08.800 --> 0:41:09.600 part of your business. 0:41:10.800 --> 0:41:13.520 So that's one reason We're really proud of the approach 0:41:13.560 --> 0:41:16.360 we take. We have an Equity and Ethics Advisory Council 0:41:16.600 --> 0:41:20.760 that is comprised of people from communities of concern, particularly 0:41:20.760 --> 0:41:22.719 black and brown communities. Right if we're really talking about 0:41:22.760 --> 0:41:26.920 over policing, I think that's the communities of most concerns. 0:41:27.120 --> 0:41:31.120 All of our approaches, we run through this ethics review 0:41:31.320 --> 0:41:34.360 upfront with people that are n actually very concerned and 0:41:34.400 --> 0:41:37.719 skeptical on these issues, and we build safeguards in that 0:41:37.800 --> 0:41:42.120 help minimize the risk of abuse while maximize the opportunity. Look, 0:41:42.600 --> 0:41:44.719 when a private consumer buys a camera to keep their 0:41:44.719 --> 0:41:47.480 home safe, they're buying and not to watch their dog 0:41:47.520 --> 0:41:49.600 in their at work. They want to stop criminals from 0:41:49.640 --> 0:41:51.839 stealing their stuff breaking into their house. I actually had 0:41:51.840 --> 0:41:55.120 a vehicle stolen years ago, and it took me days 0:41:55.160 --> 0:41:57.759 to get the video from my home security system to 0:41:57.800 --> 0:41:59.719 the police. What we're doing with the ring and by 0:41:59.719 --> 0:42:02.880 the way, we encourage open sharing standards like sharing with 0:42:02.920 --> 0:42:05.799 our competitors. We openly share on a reciprocal basis with 0:42:05.880 --> 0:42:09.120 our competitors. We think this is like doing the right thing. 0:42:10.000 --> 0:42:12.279 With all these cameras out there, we should be using 0:42:12.320 --> 0:42:14.919 them to deter crime and criminal activity, and we think 0:42:14.960 --> 0:42:18.200 you can do that without having to track everybody, you know, 0:42:18.239 --> 0:42:20.799 where they go to in their personal lives. We're talking 0:42:20.800 --> 0:42:25.080 about detecting dangerous criminal acts and detoring those acts in 0:42:25.120 --> 0:42:25.720 the first place. 0:42:26.080 --> 0:42:29.000 So that's with a lot of local law enforcement agencies. 0:42:29.000 --> 0:42:31.319 And I'm curious about the conversations that you have at 0:42:31.360 --> 0:42:34.120 the federal level with the Department of Homeland Security, for example, 0:42:35.160 --> 0:42:37.840 and the way that their officers do or do not 0:42:38.000 --> 0:42:40.520 use your products. What are the conversations that you have 0:42:40.760 --> 0:42:42.520 at the federal level with DHS. 0:42:43.480 --> 0:42:47.120 Yeah, we certainly work with the federal agencies as well, 0:42:47.400 --> 0:42:49.800 and I think where there is some controversy, it's like, look, 0:42:50.080 --> 0:42:53.120 people have different perspectives in different states and in different cities, 0:42:53.360 --> 0:42:55.719 and our system is built so they're like, hey, if 0:42:55.760 --> 0:42:59.160 you are, you know, a city in a very deep 0:42:59.200 --> 0:43:03.320 progressive you can choose who and how you share your data. 0:43:03.600 --> 0:43:05.960 And look, if you're in a border town in a 0:43:06.000 --> 0:43:08.360 red state and you want to be more collaborative with 0:43:08.400 --> 0:43:11.279 those federal agencies, one thing I'll tell you it's not 0:43:11.600 --> 0:43:16.279 our position to try to dictate how government customers and 0:43:16.280 --> 0:43:18.840 that's who we sell to. We're a private corporation shouldn't 0:43:18.840 --> 0:43:21.720 be telling government how to how to use their own data. 0:43:21.800 --> 0:43:24.040 But what we do is we enable them to make 0:43:24.080 --> 0:43:26.839 decisions so those elected officials can be responsive to their 0:43:26.920 --> 0:43:29.759 voters and we can be responsive to their communities. 0:43:30.760 --> 0:43:33.880 One last question, two acquisitions in as many months, is 0:43:33.920 --> 0:43:34.560 there more to come? 0:43:36.080 --> 0:43:38.960 We're probably going to take a little breather here. We 0:43:38.960 --> 0:43:41.359 were not expecting when we went into this. We thought 0:43:41.360 --> 0:43:43.959 we would make one acquisition, but we found that these 0:43:44.000 --> 0:43:47.920 two were really so complimentary that, you know, sometimes you 0:43:48.040 --> 0:43:51.239 got to move quickly when opportunity knocks, and so, yeah, 0:43:51.239 --> 0:43:54.560 this was unexpected, but we're really excited about it. 0:43:54.719 --> 0:43:58.160 That was Rick Smith, the founder and CEO of Axon Enterprise. 0:43:57.800 --> 0:43:59.279 And that wraps up our first hour of the weekend 0:43:59.400 --> 0:44:01.960 edition of Bloomberg Business Week Daily from Bloomberg radio Head. 0:44:01.960 --> 0:44:04.520 In our next hour, the dangers of social media and 0:44:04.640 --> 0:44:07.560 the urgent need to protect its youngest users. 0:44:07.840 --> 0:44:11.040 It's all in, Can't look away, The Case Against Social Media, 0:44:11.160 --> 0:44:14.440 a Bloomberg original investigation produced and directed by an Emmy 0:44:14.440 --> 0:44:18.399 Award winning film duo. Plus many Americans are getting their 0:44:18.400 --> 0:44:22.879 calories from ultra processed foods. Not just adults, but kids, too. 0:44:23.280 --> 0:44:26.120 How bad is that? And Ken Rfk Junior do anything 0:44:26.120 --> 0:44:26.520 about it? 0:44:26.800 --> 0:44:29.280 And he gave up a career in a London office, 0:44:29.320 --> 0:44:32.239 moved his family to France to make rose and do 0:44:32.280 --> 0:44:34.520 it in a way that is good for the climate 0:44:34.680 --> 0:44:37.480 Mother Earth. Will be joined by the owner of Maison Mirabau. 0:44:37.880 --> 0:44:40.640 This is Bloomberg Business Week. I'm Carol Messer. 0:44:40.480 --> 0:44:41.520 And I'm Krim Stanovic. 0:44:43.239 --> 0:44:47.040 You are listening to the Bloomberg Business Weekdaily podcast. Catch 0:44:47.120 --> 0:44:50.400 us live weekday afternoons from two to five pm Eastern 0:44:50.480 --> 0:44:53.560 Listen on Apple CarPlay and Android Auto with the Bloomberg 0:44:53.600 --> 0:44:57.640 Business app, or watch us live on YouTube plenty. 0:44:57.719 --> 0:44:59.320 Hen in our second hour of the weekend edition of 0:44:59.320 --> 0:45:02.840 Bloomberg Business this week, including the family who moved from 0:45:02.880 --> 0:45:05.000 the UK to Provence to live out the dream of 0:45:05.040 --> 0:45:07.640 owning a vineyard and being in a mission as well 0:45:07.640 --> 0:45:12.480 to make rose wine but in a very environmentally responsible way. 0:45:12.520 --> 0:45:15.399 Stephen Kronk. He's the founder and CEO of Maison Marabou. 0:45:15.560 --> 0:45:18.120 He was back to talk wine, regenerative farming and so 0:45:18.239 --> 0:45:21.040 much more. And well we may have. 0:45:21.719 --> 0:45:23.719 Sampled a little bit, Hey, nothing wrong with that. 0:45:23.840 --> 0:45:25.160 Nope, it was Friday, wasn't it. 0:45:25.160 --> 0:45:29.800 It was I think it was. It was definitely Friday. Well, okay, 0:45:29.840 --> 0:45:32.080 so the wine not ultra process, but we also did 0:45:32.080 --> 0:45:34.480 speak about ultra process foods. This is a danger to 0:45:34.560 --> 0:45:36.919 our bodies and it's what the majority of Americans eat, 0:45:37.360 --> 0:45:41.239 yet not all are unhealthy. Gait what Yeah, we're going 0:45:41.320 --> 0:45:41.720 to explain. 0:45:41.760 --> 0:45:43.319 All right, I'm glad we're going to do that. Hey, 0:45:43.400 --> 0:45:44.960 first up this hour, we do want to highlight a 0:45:44.960 --> 0:45:49.560 Bloomberg Original investigation that exposes the real world consequences of 0:45:49.640 --> 0:45:53.719 harmful social media algorithms. It is Can't Look Away the 0:45:53.800 --> 0:45:56.600 Dangers of Social Media. It is a documentary that follows 0:45:56.600 --> 0:45:59.360 a team of lawyers taking on the big tech giants, 0:45:59.440 --> 0:46:03.080 advocating for families whose children have been deeply impacted by 0:46:03.080 --> 0:46:06.560 social media. Now, the original reporting of Bloomberg News investigative 0:46:06.600 --> 0:46:08.920 reporter Olivia Carvell is throughout this film, but there's a 0:46:08.960 --> 0:46:12.200 lot more reporting too as well. The Bloomberg original investigation 0:46:12.320 --> 0:46:16.719 exposing the real world consequences of harmful social media algorithms. 0:46:17.160 --> 0:46:19.680 These companies have been gaslighting us for years. 0:46:19.880 --> 0:46:21.640 This is all about money. 0:46:21.920 --> 0:46:26.080 The purpose of all commercial adventures is to create a demand. 0:46:26.320 --> 0:46:28.640 Our children are the casualties we need to take back 0:46:28.680 --> 0:46:33.120 the power from these companies. They've created a dangerous situation 0:46:33.600 --> 0:46:35.160 and then manipulated these gives. 0:46:35.440 --> 0:46:39.600 They know the levels of addiction, sexual abuse, they know 0:46:39.840 --> 0:46:41.160 the levels of suicide. 0:46:41.360 --> 0:46:43.799 They're not showing our kids what they want to see. 0:46:44.239 --> 0:46:46.440 They're showing you what they can't look away from. 0:46:46.800 --> 0:46:49.120 And that is the Bloomberg original investigation Can't Look Away, 0:46:49.200 --> 0:46:51.400 the Case against Social Media, which is now available across 0:46:51.440 --> 0:46:54.960 Bloomberg platforms. Perry Pelts and Matt O'Neil are the directors 0:46:54.960 --> 0:46:57.440 and producers of the documentary and they join us here 0:46:57.440 --> 0:47:01.040 in studio. Welcome, Welcome to both of you. I got 0:47:01.080 --> 0:47:03.760 to say we've talked to Olivia a lot about her reporting. 0:47:03.840 --> 0:47:05.080 We know you did as well. 0:47:05.280 --> 0:47:05.520 Perry. 0:47:05.600 --> 0:47:09.000 Let me start with you, when you guys decided, I 0:47:09.040 --> 0:47:11.759 don't know, I guess when you first started reading her reporting. 0:47:11.880 --> 0:47:12.560 What struck you? 0:47:12.960 --> 0:47:14.879 What struck us? And first of all, thank you both 0:47:14.920 --> 0:47:17.359 for having us. We really appreciate it. What struck us 0:47:17.600 --> 0:47:21.440 is that what's happening is these companies are looking at families, 0:47:21.480 --> 0:47:24.000 at kids and parents and putting the blame on them. 0:47:24.239 --> 0:47:27.680 This is actually a public health crisis and there's nothing 0:47:27.760 --> 0:47:30.600 short of that. And I think that Olivia's reporting really 0:47:30.600 --> 0:47:33.080 speaks to the fact that this is an algorithm problem. 0:47:33.280 --> 0:47:36.120 It's not a bad parenting, it's not a bad kids issue. 0:47:36.360 --> 0:47:36.560 Yeah. 0:47:36.640 --> 0:47:38.680 The big question that I have as as a parent 0:47:38.800 --> 0:47:41.480 and in a world where we're surrounded by this stuff, Matt, 0:47:41.640 --> 0:47:44.839 is what is the solution here, because these companies don't 0:47:44.840 --> 0:47:47.400 necessarily have the incentive to get us to look away. 0:47:47.880 --> 0:47:49.440 Well, I think the first part of the solution is 0:47:49.480 --> 0:47:52.840 exactly what we're doing, which is starting a conversation because 0:47:52.840 --> 0:47:55.040 a lot of these things. When we started this reporting, 0:47:55.280 --> 0:47:57.799 we had no idea. I had this vague sense that 0:47:57.880 --> 0:48:00.720 social media was bad. I'm a parent, I have young boys. 0:48:00.800 --> 0:48:03.120 We talk about it so much like we understand the 0:48:03.160 --> 0:48:04.400 problems of social media. 0:48:04.480 --> 0:48:07.359 But what I didn't realize was that social media algorithms 0:48:07.360 --> 0:48:12.000 were feeding suicidation to children, body dysmorphia to children. That 0:48:12.239 --> 0:48:15.960 kids are being targeted with the absolute worst things on 0:48:16.080 --> 0:48:19.440 the internet, and it's relentless unpack that. 0:48:19.680 --> 0:48:20.680 What do you mean by. 0:48:20.480 --> 0:48:24.600 That, Well, what happens is that these algorithms start off 0:48:24.640 --> 0:48:28.000 in a way if someone lingers on a sad moment 0:48:28.000 --> 0:48:30.600 because they broke up with a girlfriend or a boyfriend, 0:48:31.120 --> 0:48:34.359 the algorithm catches that and it goes into what some 0:48:34.400 --> 0:48:37.719 people have called a TikTok hole where it continues to 0:48:37.719 --> 0:48:40.960 feed more and more sad content that goes deeper and deeper. 0:48:41.000 --> 0:48:43.920 There's a whistleblower in the film that actually explains this 0:48:44.000 --> 0:48:45.760 in more detail, who used to work at TikTok. 0:48:45.920 --> 0:48:48.120 Well, this is what's interesting, Perry, right, it's not just 0:48:48.120 --> 0:48:51.359 about what you search on, it's basically what you linger on. 0:48:51.600 --> 0:48:54.520 And the social media companies and you know, we're so 0:48:54.600 --> 0:48:57.120 careful when we talk about this because it's alleged and alleged, 0:48:57.160 --> 0:48:59.920 but this is where the whistleblowers come in and provide 0:49:00.080 --> 0:49:01.960 some insight about what the companies actually knew. 0:49:02.040 --> 0:49:06.120 Now, the whistleblowers as well as internal documentation from these companies, 0:49:06.360 --> 0:49:11.319 what they're prioritizing is having kids stay on these platforms engagement. 0:49:11.520 --> 0:49:15.000 They're not prioritizing safety. So what happens is they bring 0:49:15.000 --> 0:49:19.279 in neuroscientists, they bring in behavioral scientists to actually program 0:49:19.320 --> 0:49:23.239 these algorithms so that kids stay on as long as possible, 0:49:23.360 --> 0:49:25.799 and thus the title can't look away from their being 0:49:25.880 --> 0:49:29.320 fed the material that they actually can't look away. 0:49:29.040 --> 0:49:31.480 From, because that's good for business. Like I said, the 0:49:31.480 --> 0:49:34.520 incentives are not aligned with getting kids not to look 0:49:34.520 --> 0:49:36.680 at this stuff. If you show them what they don't 0:49:36.680 --> 0:49:38.719 want to see, they're going to do something else. We 0:49:38.800 --> 0:49:41.520 live in an attention economy. So is there a solution 0:49:41.640 --> 0:49:43.960 in a world where the incentives don't match from a 0:49:43.960 --> 0:49:45.440 public health perspective. 0:49:45.040 --> 0:49:48.279 The incentives have got to change because we right now, 0:49:48.360 --> 0:49:51.040 unfortunately have a legal system in section two thirty that 0:49:51.320 --> 0:49:54.680 protects these companies in a profound way. It treats them 0:49:54.719 --> 0:49:58.680 as passive pipelines. They are not passive pipelines. Algorithms are 0:49:58.719 --> 0:49:59.520 company driven. 0:49:59.800 --> 0:50:02.600 That essentially says section two thirty is that companies these 0:50:02.640 --> 0:50:05.279 social media platforms are not responsible for the content that's 0:50:05.320 --> 0:50:06.200 on their platforms. 0:50:06.320 --> 0:50:08.960 That's exactly right. They are treating them like bulletin boards, 0:50:08.960 --> 0:50:12.000 which is if you go back historically to nineteen ninety six, 0:50:12.200 --> 0:50:15.359 before social media was even around, and you had these 0:50:15.360 --> 0:50:18.439 sites that were more bulletin board driven, they would say, 0:50:18.480 --> 0:50:21.280 it's okay, you can post what you want. The company 0:50:21.360 --> 0:50:24.840 is not responsible. But that's not what our lawyers would argue, 0:50:24.920 --> 0:50:27.239 the lawyers that we follow in this film, R what's 0:50:27.320 --> 0:50:27.919 happening here? 0:50:28.080 --> 0:50:30.399 Matt talk to us about the lawyers because they really are. 0:50:30.520 --> 0:50:32.319 You know, when you go up against big tech, you're 0:50:32.320 --> 0:50:37.160 talking about high powered, expensive lawyers. This group of lawyers, 0:50:37.400 --> 0:50:39.279 it's hard not to be impressed by them. And what 0:50:39.320 --> 0:50:41.959 they ultimately figured out was the argument to do here. 0:50:42.120 --> 0:50:45.440 It's an incredible collection of lawyers led by Matt Bergman, 0:50:45.560 --> 0:50:49.200 also Laura Marquez Garrett, who was that corner office big 0:50:49.280 --> 0:50:52.640 firm lawyer who left because of what she saw happening 0:50:52.719 --> 0:50:56.280 with social media and her concern for her own children. 0:50:56.560 --> 0:50:58.440 What Matt and Laura and the other lawyers of the 0:50:58.480 --> 0:51:01.040 Social Media Victims Law Center came up with is a 0:51:01.080 --> 0:51:05.720 novel legal approach which holds the companies responsible under product 0:51:05.760 --> 0:51:10.480 liability law instead of under the idea of Section two thirty, 0:51:10.480 --> 0:51:13.879 where it's the content is that promising Well, it's made 0:51:13.880 --> 0:51:16.640 its way through the courts. Snap in the case that's 0:51:16.640 --> 0:51:19.279 followed in the film, tries to get it dismissed with 0:51:19.320 --> 0:51:22.120 Section two thirty, and they successfully argue and give these 0:51:22.120 --> 0:51:24.560 families a victory, the first of its kind, that they 0:51:24.640 --> 0:51:28.279 can be held responsible under product liability law. And they've 0:51:28.320 --> 0:51:30.239 moved to discovery and that case is making its way 0:51:30.280 --> 0:51:31.040 through California. 0:51:31.239 --> 0:51:33.640 So when we talk about product liability, you know, Perry, 0:51:33.640 --> 0:51:36.160 I think of things like the tobacco lawsuits, and this 0:51:36.280 --> 0:51:38.359 is what you can think about, right and I think 0:51:38.360 --> 0:51:40.280 about so many products that are out there right now 0:51:40.560 --> 0:51:42.240 that are facing a lot of scrutiny. 0:51:42.320 --> 0:51:44.799 Well, let's go back to tobacco. To your point, how 0:51:44.800 --> 0:51:49.280 about opioids. It is another page out of the same playbook, 0:51:49.280 --> 0:51:52.960 which is basically to blame in this case the parents 0:51:53.000 --> 0:51:55.960 and the kids, and to not hold these companies into 0:51:55.960 --> 0:51:57.160 the companies to say. 0:51:57.120 --> 0:51:58.680 They're abusing good products. 0:51:58.960 --> 0:52:01.480 That is not what we are at least that's not 0:52:01.520 --> 0:52:04.600 what the reporting is suggesting. This is very, very different. 0:52:04.640 --> 0:52:06.680 These are algorithms that need to be changed. 0:52:06.800 --> 0:52:08.600 I want to just mention because when you do a 0:52:08.640 --> 0:52:10.719 documentary and we're at the high level, and as soon 0:52:10.719 --> 0:52:12.719 as we have headlines, you have to remember that there 0:52:12.719 --> 0:52:15.040 are people, right and you guys tell these stories. Olivia 0:52:15.080 --> 0:52:18.480 told these stories. Whether it's Alexander Neville who died because 0:52:18.480 --> 0:52:20.359 of taking a pill laced with fetnel that he got 0:52:20.360 --> 0:52:24.480 on snapchat. England Roberts died after she copied a strangulation 0:52:24.680 --> 0:52:27.120 video she saw on Instagram. It was in her feed. 0:52:28.040 --> 0:52:31.279 Jordan de May six hours from initial contact by who 0:52:31.280 --> 0:52:33.439 he thought was a young woman but wasn't, but rather 0:52:33.600 --> 0:52:38.880 a sextortionist. He killed himself. I mean telling these stories. 0:52:39.040 --> 0:52:41.239 I mean in the film, you're in the bedrooms, you're 0:52:41.239 --> 0:52:42.000 talking to the parents. 0:52:42.080 --> 0:52:42.319 Matt. 0:52:43.600 --> 0:52:45.160 There's a lot of people that were impact and there 0:52:45.160 --> 0:52:46.480 are thousands of cases. 0:52:47.440 --> 0:52:49.680 This is just the tip of the iceberg. And I 0:52:49.719 --> 0:52:52.320 appreciate what you were doing there because you're saying their names. 0:52:52.400 --> 0:52:55.080 I'll add Mason Eden to that, a boy who died 0:52:55.080 --> 0:52:57.839 by suicide after a breakup because he went down one 0:52:57.840 --> 0:53:00.520 of these TikTok holes where here was being fed content 0:53:00.800 --> 0:53:03.600 that actually told him to blow his brains out with 0:53:03.640 --> 0:53:06.759 a shotgun. Actually, these are the shocking sorts of things 0:53:06.760 --> 0:53:09.680 that many of us adults don't know are happening on 0:53:09.719 --> 0:53:14.239 social media. And these parents are taking the most incredible 0:53:14.600 --> 0:53:18.040 tragedy in their lives and turning it into change. Yes, 0:53:18.080 --> 0:53:21.759 they're holding these companies liable and suing them. What they're 0:53:21.800 --> 0:53:25.359 looking for is not necessarily monetary damages. It's for real 0:53:25.440 --> 0:53:27.520 changes to how these companies work. You asked about a 0:53:27.520 --> 0:53:30.960 solution before if Instagram can figure out that I want 0:53:31.000 --> 0:53:33.600 a lawnmower before I know I want a lawnmower, or 0:53:33.640 --> 0:53:36.120 that I need a hair cream to try to grow 0:53:36.160 --> 0:53:39.239 my hair back. It can figure out how not to 0:53:39.320 --> 0:53:43.000 send content that promotes suicide to children. 0:53:43.640 --> 0:53:46.759 Christ you know what my understanding and you and I 0:53:46.840 --> 0:53:49.000 we did a panel here and we did a discussion. 0:53:49.440 --> 0:53:52.880 What does is it TikTok in China dot? 0:53:52.920 --> 0:53:55.920 It's a great question because TikTok is owned by ByteDance. 0:53:55.960 --> 0:53:59.160 The similar app in China has a shut off time 0:53:59.239 --> 0:54:01.840 at night so that children can't access it. Instead of 0:54:01.880 --> 0:54:05.320 promoting whatever the kids are lingering on, it actually promotes 0:54:05.520 --> 0:54:08.440 practicing your musical instrument and doing math problems. 0:54:08.440 --> 0:54:12.319 Sets Perry, what do you hope people you know, run 0:54:12.320 --> 0:54:14.120 with after this film? We've only got about a minute 0:54:14.200 --> 0:54:15.919 or so, Lef, what do you hope they do they 0:54:15.960 --> 0:54:19.120 ask either their kids or I don't know. 0:54:20.040 --> 0:54:21.840 It's a really important question because we don't want to 0:54:21.840 --> 0:54:24.640 scare everybody and not give them anything that solutions oriented 0:54:24.640 --> 0:54:28.800 And when Matt's talking about these families, these families want 0:54:28.880 --> 0:54:30.880 people to be informed so that they don't have the 0:54:30.920 --> 0:54:33.719 same thing happen to them. And the answer is talk 0:54:33.760 --> 0:54:36.400 to your kids, tell them about what's going on, keep 0:54:36.600 --> 0:54:40.319 social media, phones and apps away from them until at 0:54:40.400 --> 0:54:42.400 least high school. Wow, it's the best thing that we 0:54:42.440 --> 0:54:44.920 can do, and change needs to happen at a regulatory level. 0:54:45.080 --> 0:54:46.439 Perry, one last one for you. 0:54:46.440 --> 0:54:49.359 You've got a really interesting background in journalism but also 0:54:49.400 --> 0:54:52.719 in documentary filmmaking, but also in public health. Your documentaries 0:54:52.719 --> 0:54:56.680 have included subjects such as the opioid epidemic. 0:54:56.600 --> 0:55:01.200 Excessive drinking. Is this as big of an epidelt in 0:55:01.239 --> 0:55:01.680 your view? 0:55:01.840 --> 0:55:06.800 I think this is a cataclysmic epidemic in my opinion, 0:55:06.880 --> 0:55:10.160 because now these companies are targeting our children and that 0:55:10.320 --> 0:55:12.279 is different than what was happening in a lot of 0:55:12.280 --> 0:55:14.480 these other None of them is good, but this one is. 0:55:14.480 --> 0:55:15.840 Particularly a public health crisis. 0:55:15.880 --> 0:55:16.720 A public health. 0:55:16.560 --> 0:55:17.920 Crisis, yeah, question about it. 0:55:18.040 --> 0:55:20.120 Laire Ai on top of it, and it's just terrifying. 0:55:20.400 --> 0:55:23.400 Thanks to Perry Pelts and Matthew O'Neil, directors and producers 0:55:23.440 --> 0:55:26.279 of Can't Look Away, The Case against Social Media, the 0:55:26.280 --> 0:55:30.200 Bloomberg original investigation, it's now available on all Bloomberg platforms. 0:55:30.440 --> 0:55:32.160 I have to say, Tim, you know I actually did 0:55:32.200 --> 0:55:35.160 a panel with Matt O'Neil a couple of weeks ago 0:55:35.200 --> 0:55:37.319 here at Bloomberg for another we did a viewing of 0:55:37.360 --> 0:55:40.240 the film, had an audience and then talked with the audience. 0:55:40.280 --> 0:55:44.160 But you and I have done so many interviews about 0:55:44.160 --> 0:55:48.040 social media misinformation that's out on the platform. You know, 0:55:48.120 --> 0:55:51.160 we can go back to elections and political misinformation, but 0:55:51.280 --> 0:55:53.440 just so much stuff that's out there, and for a 0:55:53.440 --> 0:55:56.080 lot of people, you know, they see it as a 0:55:56.080 --> 0:55:59.240 truth or reality. And I think, you know, there's been 0:55:59.640 --> 0:56:03.000 reals on social media companies to be responsible for what's 0:56:03.040 --> 0:56:06.239 on the platform. With this film, this documentary reminded us 0:56:06.600 --> 0:56:09.480 that there is you know, you go back to a 0:56:09.640 --> 0:56:13.400 ruling that basically made these companies not responsible for the 0:56:13.480 --> 0:56:14.799 content on their platform. 0:56:15.120 --> 0:56:17.239 Yes, section two thirty is what you're referring to. Fry 0:56:17.280 --> 0:56:18.719 Peltz talks about it a lot, right. 0:56:18.600 --> 0:56:21.479 The Communications Act of was it nineteen ninety six, I think? 0:56:21.800 --> 0:56:25.120 And so what's interesting is that, you know, in an 0:56:25.239 --> 0:56:29.680 environment where we are inundated by a digital world and 0:56:29.719 --> 0:56:32.839 people spending a lot of time on social media, when 0:56:32.840 --> 0:56:36.560 it comes to something like kids, children, teenagers, what can 0:56:36.640 --> 0:56:39.479 possibly happen as a result of that content, it does 0:56:39.600 --> 0:56:42.120 open up a big question who is responsible for that? 0:56:42.239 --> 0:56:44.120 Well, how would the world be different right now if 0:56:44.160 --> 0:56:47.239 these platforms were held good question responsible for what was 0:56:47.360 --> 0:56:49.320 actually on their platforms. 0:56:48.840 --> 0:56:51.520 Well, and what they like it too is to tobacco, right, 0:56:51.600 --> 0:56:54.600 and when tobacco was kind of be marketed to kids 0:56:55.800 --> 0:56:57.760 and trying, the whole idea is get them hooked early, 0:56:58.000 --> 0:57:00.080 and the same thing with social media, get them at 0:57:00.120 --> 0:57:04.040 least allegedly from some of the inside documents I had 0:57:04.040 --> 0:57:06.400 at companies about this idea of kind of you know, 0:57:06.480 --> 0:57:10.000 targeting kids because you get a customer when they're young, 0:57:10.080 --> 0:57:12.320 they kind of tend to stay with you until they're older. 0:57:12.360 --> 0:57:14.640 Well, I think what a big takeaway from me from 0:57:14.640 --> 0:57:18.200 this conversation was misaligned incentives. You know, we report on 0:57:18.280 --> 0:57:20.880 these companies each and every day and quarterly. We talk 0:57:20.920 --> 0:57:23.760 about the metrics that investors look closely at, the ones 0:57:23.760 --> 0:57:26.920 that actually move the company's stock price. Right, it's time 0:57:27.000 --> 0:57:30.440 spent on the platform, right, It's users on the platform. 0:57:30.720 --> 0:57:33.960 It's not how little did you get young people to 0:57:34.040 --> 0:57:37.680 actually use this platform. That's not what investors are judging 0:57:37.720 --> 0:57:38.000 them on. 0:57:38.400 --> 0:57:39.760 Well, and it's exactly so. 0:57:39.800 --> 0:57:42.080 They're doing everything they can to get people to spend 0:57:42.120 --> 0:57:43.480 more time on the platforms. 0:57:43.600 --> 0:57:45.760 And what's interesting is what they found is that you know, 0:57:45.840 --> 0:57:49.200 kids will search for stuff, and what happens is it's 0:57:49.200 --> 0:57:52.720 not necessarily what you search on that you get targeted for. 0:57:52.800 --> 0:57:55.440 It's what you linger on, how much time you spend 0:57:55.960 --> 0:57:59.920 on an individual post, and then the algorithms seem to 0:58:00.080 --> 0:58:02.440 kick in, yeah, and then target with you. So you 0:58:02.520 --> 0:58:04.520 might have been searching something that was optimistic and all 0:58:04.560 --> 0:58:06.320 of a sudden you get something that's kind of dark 0:58:06.600 --> 0:58:08.120 and you spend a little bit more time because our 0:58:08.120 --> 0:58:10.640 brain is kind of wired to go to those dark things, 0:58:10.760 --> 0:58:12.040 and then all of a sudden, you're getting a lot 0:58:12.040 --> 0:58:14.960 more dark content. I'm making it very simplistic, but that's 0:58:15.080 --> 0:58:16.040 kind of you know here in. 0:58:16.000 --> 0:58:18.560 The US, the safeguards that are put on by the 0:58:18.560 --> 0:58:23.080 companies versus in China, and how the Chinese companies or 0:58:23.120 --> 0:58:25.120 are required or at least what they do when it 0:58:25.120 --> 0:58:27.360 comes to the content on the platforms. Yeah, that watch. 0:58:27.440 --> 0:58:28.640 Check out the film exactly. 0:58:28.800 --> 0:58:31.800 Check it out. You can find it on Bloomberg platforms. 0:58:32.280 --> 0:58:34.720 It's definitely a must watch if you have kids. Schools 0:58:34.760 --> 0:58:39.200 are watching it, they're doing viewing sessions if you will. Anyway, 0:58:39.240 --> 0:58:42.360 it's really something that is a must viewing, all right, 0:58:42.400 --> 0:58:44.760 you're listening to Bloomberg Business Week. Coming up from junk 0:58:44.800 --> 0:58:49.120 on social media to junk on supermarket shelves. Another addiction 0:58:49.200 --> 0:58:51.920 worth paying attention to ultra processed foods. 0:58:52.160 --> 0:58:54.600 People want to avoid them, but experts are struggling to 0:58:54.640 --> 0:58:57.400 define them. That's next. This is Bloomberg. 0:58:59.200 --> 0:59:03.360 This is Theloomberg Business Week Daily Podcast. Listen live each 0:59:03.360 --> 0:59:06.360 weekday starting at two pm Eastern on Apple car Play 0:59:06.480 --> 0:59:09.280 and Android Auto with the Bloomberg Business app. You can 0:59:09.320 --> 0:59:12.480 also listen live on Amazon Alexa from our flagship New 0:59:12.560 --> 0:59:15.960 York station, Just Say Alexa played Bloomberg eleven thirty. 0:59:17.640 --> 0:59:20.080 Here's a stat that may shock you. Americans get more 0:59:20.120 --> 0:59:23.240 than half of their daily calories from ultra processed foods, 0:59:23.560 --> 0:59:25.960 with salty and sugary items accounting for an even bigger 0:59:25.960 --> 0:59:28.760 portion of kids plates. This according to a government study 0:59:28.760 --> 0:59:31.960 that was released back in August. This government study ran 0:59:32.000 --> 0:59:34.600 from two thousand and one twenty twenty one to twenty 0:59:34.680 --> 0:59:37.040 twenty three, and it said that about sixty two percent 0:59:37.040 --> 0:59:41.280 of childhood diets come from highly processed foods think burgers, pastries, snacks, 0:59:41.280 --> 0:59:44.240 and pizza. This according to the US Centers for Disease 0:59:44.280 --> 0:59:47.520 Control and Preventions. Nutrition study, the same foods have a 0:59:47.520 --> 0:59:49.960 similar grip on adults, making up about fifty three percent 0:59:50.280 --> 0:59:52.320 of the calories that they consumed. 0:59:53.080 --> 0:59:53.560 That's a lot. 0:59:53.640 --> 0:59:53.840 Yeah. 0:59:53.840 --> 0:59:55.400 The question I have is whether or not Health and 0:59:55.440 --> 0:59:58.400 Human Services Secretary Robert F. Kennedy can actually make some 0:59:58.440 --> 1:00:00.360 headway on this. He said that the u US food 1:00:00.360 --> 1:00:02.720 supplies poisoning children. It's a question that I'll post to. 1:00:02.800 --> 1:00:06.880 Doctor Juliet Wolfson, Associate Professor in the International Health Department 1:00:07.240 --> 1:00:09.440 at the Johns Hopkins Bloomberg School of Public Health. The 1:00:09.520 --> 1:00:12.880 research focuses on how ultra process food affects our bodies. 1:00:13.080 --> 1:00:15.280 The Johns Hopkins Bloomberg School of Public Health is supported 1:00:15.280 --> 1:00:18.080 by Michael our Bloomberg, founder and majority owner of Bloomberg LP, 1:00:18.200 --> 1:00:23.000 parent company of Bloomberg TV and Radio. Doctor Wolfson, good 1:00:23.000 --> 1:00:24.360 to have you back with us. It's been about a 1:00:24.440 --> 1:00:26.240 year since we last spoke. I just want to start 1:00:26.240 --> 1:00:28.240 with the definition of ultra process foods. I was kind 1:00:28.240 --> 1:00:31.479 of surprised to see pizza and burgers on that list. 1:00:31.480 --> 1:00:32.280 How do you define it? 1:00:33.480 --> 1:00:35.360 Yeah, so thanks for having me back. 1:00:35.520 --> 1:00:39.800 And ultra processed foods are defined by the list of 1:00:39.920 --> 1:00:43.920 ingredients that are included in them. So these are foods 1:00:43.920 --> 1:00:48.040 and beverages that are industrial produced using processes that you 1:00:48.080 --> 1:00:50.680 wouldn't have in a home kitchen, and ingredients that you 1:00:50.800 --> 1:00:53.720 also wouldn't have in a home kitchen. So these are, 1:00:53.800 --> 1:00:58.040 you know, industrial produced products used by processing techniques like 1:00:58.120 --> 1:01:01.720 extrusion fractioning where you break on the pieces of the 1:01:01.760 --> 1:01:04.480 food into different things and then put it back together again, 1:01:05.720 --> 1:01:13.000 and they contain things like additives, emulsifiers, sweeteners, thickeners, artificial 1:01:13.000 --> 1:01:16.080 flavors and colorings, and other kinds of substances again that 1:01:16.160 --> 1:01:17.960 you wouldn't use in a home kitchen. 1:01:18.400 --> 1:01:20.120 And so the most common. 1:01:19.800 --> 1:01:23.320 Definition we have is called the NOVA classification system, which 1:01:23.360 --> 1:01:26.560 actually uses the ingredient list on a product to look 1:01:26.560 --> 1:01:29.840 for these kinds of ingredients that signal that a food 1:01:29.920 --> 1:01:34.240 or beverage has been through this industrial processed thing. 1:01:34.880 --> 1:01:38.480 So if we turn around, which I think increasingly we 1:01:38.560 --> 1:01:42.320 have a population that is doing that, and especially I've 1:01:42.360 --> 1:01:45.160 got a daughter who's twenty two, younger generation looking at stuff. 1:01:45.480 --> 1:01:48.160 But if there are a ton of ingredients and ingredients 1:01:48.200 --> 1:01:52.080 you don't understand, should you assume that that's ultra processed. 1:01:53.440 --> 1:01:56.160 Yeah, that is what we recommend as the way to 1:01:56.320 --> 1:01:59.520 know if a food or beverage you're considering purchasing or 1:01:59.520 --> 1:02:03.000 eating ultra process you flip over that package and if 1:02:03.040 --> 1:02:06.720 you look at that ingredient list and you see even one, 1:02:06.840 --> 1:02:09.520 but certainly a bunch of ingredients where you think, I 1:02:09.520 --> 1:02:11.440 don't know what that is. That's not something I would 1:02:11.440 --> 1:02:13.800 cook with. I don't even know how to pronounce that. 1:02:13.800 --> 1:02:15.880 That's a signal that's an ultraprocessed food. 1:02:16.360 --> 1:02:19.520 So do we fix it by just infusing everything with protein? 1:02:19.600 --> 1:02:20.400 And then it's all. 1:02:20.240 --> 1:02:23.600 Open, but it's still ultra processed, like like even a. 1:02:24.400 --> 1:02:26.080 Protein Are you picking on the pop tart? 1:02:26.200 --> 1:02:26.360 Yeah? 1:02:26.400 --> 1:02:28.520 Protein packed a cop tart. We talked about this on 1:02:28.560 --> 1:02:33.320 our editorial call this morning. Sounds great, protein, doctor, I'm 1:02:33.360 --> 1:02:34.160 gonna let you weigh in. 1:02:35.520 --> 1:02:38.280 Yeah, So I mean thinking about what are That's a 1:02:38.320 --> 1:02:41.480 strategy the food industry uses, maybe to signal that something 1:02:41.520 --> 1:02:43.960 is healthier for us by you know, saying, oh, this 1:02:44.080 --> 1:02:46.440 is protein rich or whole grain rich, or this has 1:02:46.560 --> 1:02:47.920 vitamins or minerals. 1:02:48.000 --> 1:02:50.120 Right, But if it still has these other. 1:02:50.200 --> 1:02:55.120 Ingredients, it's still an ultraprocessed food. And so you know 1:02:55.280 --> 1:02:58.320 the addition of you know, other nutrients that we might 1:02:58.360 --> 1:03:02.280 think are beneficial does not change that food. 1:03:02.040 --> 1:03:04.400 Into something that is not an ultra process food. It's 1:03:04.400 --> 1:03:05.440 still ultra process. 1:03:05.640 --> 1:03:08.000 So just really shocking to see sixty two percent of 1:03:08.040 --> 1:03:11.840 childhood diets come from highly processed foods. That was wild 1:03:11.880 --> 1:03:14.200 to see. But at the same time, I'm thinking about 1:03:14.200 --> 1:03:16.919 my own family and how difficult it is to get 1:03:16.920 --> 1:03:19.400 my kids who are six and two to eat food 1:03:19.440 --> 1:03:22.960 that we would consider not ultra processed. What is the 1:03:23.000 --> 1:03:25.560 best way to do that. What are strategies that work 1:03:25.600 --> 1:03:27.440 for kids? I think a lot of parents struggle with this. 1:03:28.800 --> 1:03:30.480 Yeah, I mean, I think it's a struggle for all 1:03:30.520 --> 1:03:32.760 of us, right, you know, it's not just kids, it's 1:03:32.800 --> 1:03:33.560 adults as well. 1:03:33.640 --> 1:03:35.440 You know, it's over half of adult diets. 1:03:35.960 --> 1:03:37.800 And I think there's a lot of reasons for that, 1:03:38.040 --> 1:03:41.560 and it's you know, our taste preferences are shaped very early, 1:03:41.640 --> 1:03:44.800 and there's a lot of marketing, particularly the children, for 1:03:44.880 --> 1:03:45.640 these products. 1:03:46.160 --> 1:03:49.000 And they're easier to they're easier to grab and go. 1:03:49.080 --> 1:03:50.800 There, a lot of them are ready to eat, and 1:03:51.080 --> 1:03:54.480 you know, they're snacks. They save time, and a lot 1:03:54.480 --> 1:03:58.240 of them are more affordable too, So that's something to consider. 1:03:58.440 --> 1:04:01.120 I think it is the more snacks that you can 1:04:01.200 --> 1:04:04.320 have out that are not processed, that are easy to 1:04:04.320 --> 1:04:06.960 grab and go that you know, that is one strategy 1:04:07.000 --> 1:04:09.920 to help kids have more say fresh fruits and vegetables 1:04:09.920 --> 1:04:12.840 to snack on, or healthy snacks that are made ahead 1:04:13.040 --> 1:04:16.600 so that they can reach for easily. But again that 1:04:16.760 --> 1:04:19.960 is extra work for parents and sometimes extra cost for 1:04:20.040 --> 1:04:20.680 parents as well. 1:04:20.720 --> 1:04:21.720 So it's there. 1:04:21.960 --> 1:04:26.240 There are really good and intractable reasons why these foods 1:04:26.280 --> 1:04:30.280 comprise so much of our diets, and particularly our children's diets. 1:04:30.640 --> 1:04:34.560 So you know, what's interesting the stat that Tim mentioned 1:04:35.080 --> 1:04:38.920 from US Centers for Disease Control and Prevention their nutrition survey, 1:04:39.400 --> 1:04:42.680 when they talked about highly processed food, they said pizza. 1:04:42.800 --> 1:04:45.240 So this is not the pizza that you get and 1:04:45.320 --> 1:04:46.280 I get on Friday nights. 1:04:46.360 --> 1:04:49.280 That's what I want to ask you. So, like, I 1:04:49.360 --> 1:04:53.200 go to a place where I know they are making 1:04:53.280 --> 1:04:55.760 their homemade crust from special weed. 1:04:55.880 --> 1:04:58.480 It's been featured in the New York Times, you. 1:04:58.440 --> 1:05:00.439 Know, and it's no, no, no, I hear you have fun 1:05:00.480 --> 1:05:03.800 but he but I mean it's like, you know, fresh tomatoes, 1:05:03.840 --> 1:05:08.280 fresh basil. I guess maybe there's obviously some like homemade 1:05:08.360 --> 1:05:13.320 cheese there, but like what like how do we distinguish 1:05:13.760 --> 1:05:17.080 really really bad processed food versus stuff that maybe isn't 1:05:17.120 --> 1:05:17.520 so bad. 1:05:18.480 --> 1:05:21.120 Yeah, I think that, you know, that kind of pizza 1:05:21.160 --> 1:05:24.160 that you're describing, or let's think about bread, even pizza 1:05:24.280 --> 1:05:27.480 or bread that might make at home, Like you're combining 1:05:27.640 --> 1:05:30.760 wheat and you know, flour and salt and yeast, and 1:05:30.840 --> 1:05:32.480 you know, you have your fresh tomato sauce. 1:05:32.800 --> 1:05:34.280 That's not an ultraprocessed food. 1:05:34.320 --> 1:05:36.760 So that but that is not the majority of the 1:05:36.800 --> 1:05:38.240 pizza that people are eating. 1:05:38.280 --> 1:05:40.640 So when we talk about things like pizza. 1:05:40.320 --> 1:05:43.040 It really could be those frozen pizzas that you get 1:05:43.080 --> 1:05:46.480 in the grocery store, or maybe more mass produced pizzas 1:05:46.520 --> 1:05:49.480 that are made at scale and therefore have some sorts 1:05:49.480 --> 1:05:53.200 of preservatives or other kinds of ingredients that you know, 1:05:53.320 --> 1:05:56.520 change the say, the softness of the dough or something 1:05:56.600 --> 1:05:56.919 like that. 1:05:57.280 --> 1:05:58.840 Those are the ultra process things. 1:05:58.880 --> 1:06:03.840 So not all all ultra processed foods, though, are equally concerning. 1:06:03.920 --> 1:06:07.840 I would say, you know, I mentioned bread, so you know, 1:06:07.880 --> 1:06:10.840 the bread that we might make by ourselves at home, 1:06:10.920 --> 1:06:13.480 like if we were some of the people who started 1:06:13.480 --> 1:06:16.360 making sour oaught bread during COVID, for example, Yeah, that's 1:06:16.440 --> 1:06:19.520 not ut processed bread you might get at the bakery 1:06:20.320 --> 1:06:22.920 in your neighborhood that is made by scratch is not 1:06:23.720 --> 1:06:26.800 ultra processed. But most of the bread that we see 1:06:26.800 --> 1:06:30.720 on our supermarket shelves is ultra process that sliced bread 1:06:30.760 --> 1:06:34.600 that you see and so, but that includes even whole 1:06:34.640 --> 1:06:38.400 wheat bread. So you know, there are some ultraprocessed products 1:06:38.480 --> 1:06:42.720 that are by definition ultra process because they might contain 1:06:43.160 --> 1:06:46.160 right those alifuyers or things that turn them into that product, 1:06:46.200 --> 1:06:49.560 but they might still be Some are less of a 1:06:49.640 --> 1:06:50.560 concern than others. 1:06:50.600 --> 1:06:52.400 I would say, so just in the last two minutes 1:06:52.440 --> 1:06:54.880 that we have with you that Health and even Service 1:06:54.880 --> 1:06:57.160 As Secretary, Robert F. Kennedy Junior has vowed to go 1:06:57.160 --> 1:07:00.000 after these food companies so Americans do eat healthier. 1:07:00.320 --> 1:07:03.760 Thus far, how is he doing well? 1:07:03.840 --> 1:07:06.280 I mean, I think it's good that he's focusing on 1:07:06.320 --> 1:07:09.680 this as an issue. I think there are, as I mentioned, 1:07:09.760 --> 1:07:12.000 you know, there's a lot of reasons why we eat 1:07:12.040 --> 1:07:14.440 these foods, and one of them, a big one is 1:07:14.560 --> 1:07:16.960 they're more affordable. They tend to be more affordable than 1:07:17.040 --> 1:07:21.600 scratch ingredients. They save time, and they're more accessible. 1:07:21.800 --> 1:07:22.280 And so. 1:07:23.840 --> 1:07:26.919 I think some of the policies of the administration say 1:07:27.240 --> 1:07:31.360 cutting or even eliminating snap benefits is not helpful for 1:07:31.600 --> 1:07:36.080 people to be able to avoid ultraprocessed foods. But thinking 1:07:36.080 --> 1:07:40.040 about labeling or getting ultra processed foods out of schools 1:07:40.120 --> 1:07:43.080 in a way that also balances with giving schools the 1:07:43.120 --> 1:07:47.040 resources they need to source and prepare less processed foods 1:07:47.040 --> 1:07:48.480 would be a step in the right direction. 1:07:48.640 --> 1:07:50.840 Why do we just real quickly thirty forty seconds here, 1:07:50.840 --> 1:07:53.200 why do we have so much ultraprocessed food? Is it 1:07:53.240 --> 1:07:55.720 about keeping shelf life or like, what is it? Or 1:07:55.760 --> 1:07:59.000 is it just cheaper mass production food? 1:07:59.040 --> 1:08:01.240 I don't know, just quickly, yeah, I mean it's the 1:08:01.280 --> 1:08:03.720 majority of the foods in our grocery store shelves. Right. 1:08:03.960 --> 1:08:07.920 They make food large, shelf stable, they're oftentimes more affordable, 1:08:08.120 --> 1:08:10.600 and they're in high demand because they save people time 1:08:10.760 --> 1:08:11.960 and they save people. 1:08:11.720 --> 1:08:13.080 Mental energy as well. 1:08:13.120 --> 1:08:15.560 You know, it's a lot easier to say, have a 1:08:15.960 --> 1:08:18.639 frozen dinner than it is to make all the components 1:08:18.680 --> 1:08:21.120 of the frozen dinner yourself. So there's demand for it, 1:08:21.680 --> 1:08:24.559 and you know, they've really dominated our food supply for 1:08:24.640 --> 1:08:28.320 decades now, so it will be really difficult to make 1:08:28.360 --> 1:08:31.080 that switch at a large scale, but it's worth considering 1:08:31.080 --> 1:08:31.880 how we can do it well. 1:08:31.960 --> 1:08:34.080 L's quick question twenty five seconds. Can we eat too 1:08:34.120 --> 1:08:34.719 much protein? 1:08:36.200 --> 1:08:38.679 I think it is possible to eat too much protein, 1:08:38.720 --> 1:08:41.960 and Americans do eat a lot of protein, so we 1:08:42.000 --> 1:08:44.599 are not suffering from a shortage of protein in the. 1:08:44.640 --> 1:08:48.479 US as a whole our Thanks to doctor Julia Wolfson, 1:08:48.520 --> 1:08:51.120 Associate Professor in the International Health Department at the Johns 1:08:51.160 --> 1:08:54.120 Hopkins Bloomberg School of Public Health, Her research focuses on 1:08:54.120 --> 1:08:56.280 how ultra processed foods affect our bodies. 1:08:56.280 --> 1:08:58.879 All right, so you have little kids, My daughter's older. 1:09:00.040 --> 1:09:01.800 I know we were obsessed. I know you are too 1:09:01.840 --> 1:09:03.600 with organic and yeah. 1:09:03.360 --> 1:09:05.920 But I mean I can only do so much. Truly, 1:09:06.200 --> 1:09:09.479 it's hard. You know, it's really hard for us what 1:09:09.479 --> 1:09:11.000 what they eat when they're out of the house. 1:09:11.040 --> 1:09:13.320 I was just going to say, like when they go elsewhere, right. 1:09:13.280 --> 1:09:15.840 Yeah, and you know it's I'll tell you, New York 1:09:15.840 --> 1:09:19.439 City public schools do not make it easy. Grateful that 1:09:19.479 --> 1:09:22.599 they offer food at these schools breakfast, lunch, and dinner 1:09:22.600 --> 1:09:24.760 at this point, which is a little crazy. Yeah, it's 1:09:24.800 --> 1:09:27.599 not the healthiest stuff though, I know, granted they do have. 1:09:28.040 --> 1:09:30.000 You know, my kids love apples, and they have like 1:09:30.080 --> 1:09:33.400 New York apples, which we love, but it's the other stuff. 1:09:33.400 --> 1:09:35.640 And oftentimes in the after school programs, he comes home 1:09:35.680 --> 1:09:37.280 and he's like, oh, yeah, I got you know, Dorito's 1:09:37.320 --> 1:09:40.400 or whatever, I got, you know, candy from this after school, 1:09:40.439 --> 1:09:42.120 and it's like, oh, you can only do so much. 1:09:42.240 --> 1:09:44.559 I remember in high school, like we used to take 1:09:44.560 --> 1:09:46.200 our own lunches in grade school, and I live close 1:09:46.320 --> 1:09:47.600 enough in grade school that we could go home for 1:09:47.680 --> 1:09:50.080 lunch and stuff. But I remember in high school you couldn't. 1:09:50.400 --> 1:09:53.240 And I remember like you could eat some fruit, or 1:09:53.280 --> 1:09:56.040 there was this like great cake and we would all 1:09:56.160 --> 1:09:58.360 like get it. And it's like that was the choice 1:09:58.400 --> 1:09:59.800 we made. And I'm sure it was. 1:10:00.160 --> 1:10:01.840 Ultimately I was gonna say, was it in like a 1:10:01.880 --> 1:10:03.280 package or was it Actually it. 1:10:03.200 --> 1:10:05.280 Wasn't in a package, so maybe they had a bakery 1:10:05.360 --> 1:10:07.320 that maybe they were making it in their kitchen, but 1:10:07.800 --> 1:10:08.360 I don't know. 1:10:09.200 --> 1:10:10.439 You got to go home for lunch. 1:10:10.560 --> 1:10:12.479 In grade school. We lived really close. It was like 1:10:12.520 --> 1:10:13.639 a little town, and it was. 1:10:13.600 --> 1:10:15.439 Like pretty cool that the teachers just like let the 1:10:15.479 --> 1:10:16.519 kids walk home by themselves. 1:10:16.600 --> 1:10:18.439 Yeah, I mean I was literally a couple of minutes away, 1:10:19.040 --> 1:10:20.559 so I can really cool. I could go home and 1:10:20.560 --> 1:10:21.880 make dinner, not dinner. 1:10:21.640 --> 1:10:23.400 But make Did you make the lunch yourself or was 1:10:23.479 --> 1:10:23.720 I did? 1:10:23.720 --> 1:10:25.360 I made it for myself and my little brother. No, 1:10:25.439 --> 1:10:26.240 my mom was working. 1:10:26.360 --> 1:10:27.559 That's pretty cool, especially when we. 1:10:27.560 --> 1:10:29.479 Got a little bit older. Different that was through eighth grade. 1:10:29.560 --> 1:10:32.120 Different world, it is, right, Yeah, that's pretty cool. 1:10:32.120 --> 1:10:33.280 But high school wasn't like we had it. 1:10:33.360 --> 1:10:34.400 That's the opposite. 1:10:34.560 --> 1:10:36.000 Were you closer in your high school? 1:10:36.040 --> 1:10:38.600 Well, I went to boarding school, so it kind of 1:10:38.640 --> 1:10:41.760 that was impossible to really relate here. 1:10:41.840 --> 1:10:43.719 But was boarding school healthy? 1:10:43.920 --> 1:10:44.640 Yeah? 1:10:44.720 --> 1:10:47.000 I mean it was real food, which is good. We 1:10:47.040 --> 1:10:49.519 did have one thing we did have, what well, two 1:10:49.600 --> 1:10:54.320 things that we had which were crazy. One chocolate milk okay, 1:10:54.360 --> 1:10:57.360 so that was pretty good. Two milk are used to 1:10:57.920 --> 1:11:00.240 a frozen yogurt machine. 1:11:01.520 --> 1:11:03.439 And do you have a cappuccino maker? 1:11:03.520 --> 1:11:03.640 No? 1:11:03.640 --> 1:11:03.960 No, no. 1:11:05.160 --> 1:11:08.200 So we could just go into the dining halloga whenever 1:11:08.200 --> 1:11:09.439 we wanted, which was a little nuts. I don't know 1:11:09.479 --> 1:11:11.599 if they still have that. And one thing you do 1:11:11.640 --> 1:11:15.120 as as seniors, you were allowed to like be out late. Well, 1:11:15.160 --> 1:11:17.439 we'd all break into the dining hall and just eat 1:11:17.439 --> 1:11:19.479 whatever we wanted there late at night. It's kind of 1:11:19.520 --> 1:11:21.240 it's kind of like, I'm sorry you allowed to do that. 1:11:21.600 --> 1:11:22.120 You broke in. 1:11:22.880 --> 1:11:24.479 Yeah, a lock on the door. 1:11:24.880 --> 1:11:26.760 The locks that were meant to be like those big 1:11:26.840 --> 1:11:30.760 like things were just like little like I don't know, 1:11:30.800 --> 1:11:32.959 like U shaped things that they put over, like horseshoe 1:11:33.000 --> 1:11:33.559 kind of things. 1:11:33.640 --> 1:11:35.280 You know, those things you learn on your about your 1:11:35.280 --> 1:11:38.920 co host. Yep, very very interesting. Hey, we shouldn't point 1:11:38.960 --> 1:11:40.760 out that as a one little I. 1:11:40.680 --> 1:11:43.599 Wasn't a bad kid. Okay, I didn't get sway. 1:11:43.600 --> 1:11:45.040 I'm going to bring it back to the news. 1:11:45.080 --> 1:11:46.160 It was kind of a bad kick. 1:11:46.400 --> 1:11:48.479 We do also want to mention a story that has 1:11:48.520 --> 1:11:50.680 come out and kind of associated if you want, the 1:11:50.720 --> 1:11:53.800 Trump administrations deal with Eli Lilly and Novo Nordisks to 1:11:53.880 --> 1:11:56.320 lower the cash price of weight loss drugs is putt 1:11:56.320 --> 1:11:59.040 pressure on employers and insurance to negotiate better costs. But 1:11:59.120 --> 1:12:02.760 let's just talk about the GLP ones are no doubt 1:12:02.760 --> 1:12:06.280 about it. People are eating less. There's kind of this 1:12:06.360 --> 1:12:08.160 healthier thing going on. I don't know if you want 1:12:08.200 --> 1:12:10.240 to call it healthy, but it is making people lose 1:12:10.320 --> 1:12:12.320 a lot of weight, and so you do wonder how 1:12:12.360 --> 1:12:15.080 this plays into food consumption and what they really want 1:12:15.080 --> 1:12:16.840 to eat. So just kind of out there. 1:12:16.960 --> 1:12:18.559 Also on the GLP once, did you see the news 1:12:18.560 --> 1:12:22.960 this week, Eli Lilly dropping CVS's drug benefit plan no employers, Okay, 1:12:23.360 --> 1:12:27.639 this after CVS stopped covering it's blockbuster weight loss drug 1:12:27.640 --> 1:12:30.880 in favor of Arrival medication from Novo Nordisk. This according 1:12:30.920 --> 1:12:32.800 to people familiar with the matter, So, oh my god. 1:12:33.080 --> 1:12:35.800 Eli Lily was like, We're not going to use CVS's 1:12:35.840 --> 1:12:39.839 drug plan because you guys are not actually covering our product. 1:12:40.040 --> 1:12:42.200 Sounds like a negotiating tactic. I mean they're dropping the 1:12:42.240 --> 1:12:45.320 whole plan, hey' costume right? All right? All right, A 1:12:45.320 --> 1:12:47.320 lot of stuff this week. Ky still ahead on Bloomberg 1:12:47.320 --> 1:12:50.240 Business Week, how one family left the London suburbs for 1:12:50.360 --> 1:12:53.800 a small village in France actually Provence. All for the 1:12:53.840 --> 1:12:54.840 love of wine. 1:12:55.280 --> 1:12:58.000 More on the other side with the owner of Maison Mirabo. 1:12:58.479 --> 1:12:59.160 This is going. 1:13:02.920 --> 1:13:06.920 You're listening to the Bloomberg Business Weekdaily podcast. Catch us 1:13:07.000 --> 1:13:10.479 live weekday afternoons from two to five pm Eastern Listen 1:13:10.479 --> 1:13:14.040 on Apple CarPlay and Android Auto with the Bloomberg Business app, 1:13:14.200 --> 1:13:18.480 or watch us live on YouTube. It's the stuff of fantasies. 1:13:18.520 --> 1:13:19.640 Carol, We've talked about this. 1:13:19.760 --> 1:13:22.400 Yeah, you quit your corporate job in London, you move 1:13:22.479 --> 1:13:25.599 to the south of France with your three kids, your wife, 1:13:26.000 --> 1:13:26.599 you make rose. 1:13:26.800 --> 1:13:28.439 It sounds magical, it does well. 1:13:28.439 --> 1:13:31.400 It wasn't a fantasy for Stephen Kronk, the founder and 1:13:31.600 --> 1:13:35.519 CEO of Maison Mirabo. He and his wife did exactly that. 1:13:35.600 --> 1:13:39.439 It was sixteen, sixteen years ago. It was yeah, wow, 1:13:39.960 --> 1:13:42.360 at the height of the global financial crisis. 1:13:42.479 --> 1:13:43.240 Talk about timing. 1:13:43.520 --> 1:13:46.400 Steven's with us right now here in the Bloomberg Interactive 1:13:46.400 --> 1:13:47.360 Brokers studio and. 1:13:47.320 --> 1:13:48.200 He brought Rose. 1:13:49.320 --> 1:13:51.960 First of all, it's been a little while since we 1:13:52.080 --> 1:13:53.759 last spoke to here, at least two years. 1:13:53.960 --> 1:13:56.439 Yes, how's business been since then? 1:13:56.920 --> 1:13:58.439 It's well, it's interesting question. 1:13:58.560 --> 1:14:01.439 It's been up, and I would say, I mean, I 1:14:01.439 --> 1:14:05.719 think Province Rose is still the benchmark for rose around 1:14:05.760 --> 1:14:07.400 the world, so we're very lucky we've got that. 1:14:07.520 --> 1:14:09.479 But there's been a lot of headwinds, as I'm srure 1:14:09.520 --> 1:14:09.920 you're aware. 1:14:10.080 --> 1:14:12.920 Yeah it Look, there's the climate change headwind but there's 1:14:12.960 --> 1:14:15.840 also the changing consumer tastes headwinds, as. 1:14:15.720 --> 1:14:18.680 Well as tariffs exactly, which is the thing that is 1:14:18.720 --> 1:14:19.639 the biggest headwind. 1:14:20.760 --> 1:14:23.080 They all combine together, this is the perfect storm. 1:14:23.439 --> 1:14:26.679 So there's the health kick, there's the cannabis movement, there's 1:14:26.800 --> 1:14:30.120 the no and low alcohol movement, there's the zimpic movement 1:14:30.120 --> 1:14:32.800 because that suppresses people's desire to have a drink. So 1:14:32.880 --> 1:14:34.479 it's like everything and then you load on top of 1:14:34.479 --> 1:14:36.759 that the tariffs. It's like, yeah, what has happened? 1:14:37.000 --> 1:14:38.960 So what does that mean for you guys? Like how 1:14:39.000 --> 1:14:41.479 do you pivot? How do you adjust around that? 1:14:42.000 --> 1:14:43.840 Well, there's a lot of things we can't change. But 1:14:43.880 --> 1:14:46.759 what we try and do is is with the tariffs, 1:14:46.800 --> 1:14:48.599 for example, we've tried to swallow as much as we can. 1:14:48.680 --> 1:14:50.960 We don't want mirror Bau to be much more expensive 1:14:51.000 --> 1:14:53.720 in the store, so we've tried to swallow that, which 1:14:53.760 --> 1:14:55.800 is it's hard, but we're keeping our fingers crossed that 1:14:55.880 --> 1:14:57.080 maybe this is going to change. 1:14:57.240 --> 1:15:00.240 Remind everybody the price range from the United States, so 1:15:00.479 --> 1:15:02.479 you don't want the price to go up in the US. 1:15:02.520 --> 1:15:06.599 So yeah, so we have generally between twenty and thirty dollars, okay, 1:15:06.680 --> 1:15:07.320 and we want to try and. 1:15:07.400 --> 1:15:09.280 Keep below thirty dollars because that's a price point. 1:15:09.400 --> 1:15:10.920 So then how does that hit your margins. 1:15:11.200 --> 1:15:12.880 Yeah, it's not great, but you. 1:15:12.800 --> 1:15:15.240 Know, I'd rather build a brand, and you know, i'd 1:15:15.320 --> 1:15:17.479 rather people carry on drinking Mirbo, especially. You know, we're 1:15:17.479 --> 1:15:19.559 coming out of Thanksgiving and Provence Rose is just so 1:15:19.600 --> 1:15:22.760 good with Turkey, So you know, I'm just trying to 1:15:22.800 --> 1:15:25.280 hope this goes away and just carry on pushing my 1:15:25.320 --> 1:15:25.800 wines here. 1:15:25.960 --> 1:15:26.240 Yeah. 1:15:26.360 --> 1:15:28.040 Well, you know, and I've said I wasn't a big 1:15:28.120 --> 1:15:30.559 Rose drinker, but I've got to say yours is pretty 1:15:30.640 --> 1:15:33.800 pretty magical and I've really enjoyed it, and we're going 1:15:33.840 --> 1:15:36.479 to taste it and know Tim is sniffing it out. 1:15:36.760 --> 1:15:39.439 You're in the United States, talk to us about the 1:15:39.520 --> 1:15:40.800 US market specifically. 1:15:41.320 --> 1:15:45.800 So I've started farming regeneratively for some of my wines, right, 1:15:45.840 --> 1:15:50.639 and the regenerative movement seems to be centered many around California. Now, yeah, so, 1:15:50.760 --> 1:15:52.640 I mean, I'm selling my wines in forty countries, but 1:15:52.720 --> 1:15:56.560 California is the epicenter of the regenerative movement. The California 1:15:56.600 --> 1:15:59.160 Department of Food and Agriculture has been the first state 1:15:59.600 --> 1:16:04.639 to to define the words regenerative agriculture. And meanwhile, we've 1:16:04.680 --> 1:16:07.439 got you know, the wine resions there, so pazoobils, Nappers, 1:16:07.479 --> 1:16:10.360 and Oma. They are the most regenerative wine areas in 1:16:10.400 --> 1:16:10.679 the world. 1:16:11.160 --> 1:16:13.960 So what does that mean for one of County. 1:16:14.040 --> 1:16:17.600 I know where t is from, but what does that 1:16:17.680 --> 1:16:20.880 mean that you would you do more here in the 1:16:20.960 --> 1:16:21.559 United States? 1:16:21.880 --> 1:16:24.320 I'm just trying to sell more wine here. And so 1:16:24.400 --> 1:16:27.920 the retailers say, like air One and Sprouts and Bristol 1:16:27.960 --> 1:16:31.679 Farms and Hagen's, they're really getting behind the regenerative movement 1:16:31.720 --> 1:16:34.000 that they're looking to seek out regenerative. 1:16:33.640 --> 1:16:35.960 Farmer because there's an awareness of it, right, because they. 1:16:35.800 --> 1:16:37.280 Know what it means for farmers, they know what it 1:16:37.280 --> 1:16:37.960 means for people to. 1:16:38.120 --> 1:16:41.080 Not everybody knows what regenerative farming means, and especially how 1:16:41.120 --> 1:16:45.040 that is applied to farming the grapes that go into wine, 1:16:45.080 --> 1:16:47.240 that go into rose. So for for people who don't 1:16:47.280 --> 1:16:49.639 know what it is, explain regenerative farming in the context 1:16:49.760 --> 1:16:50.760 of viniculture. 1:16:51.160 --> 1:16:54.600 So regenerative, as the name suggested, is about regenerating soil, fertility, 1:16:54.960 --> 1:16:58.760 and regenerating nature in simple terms, So you know, it's 1:16:58.760 --> 1:17:01.360 the if you think about it, what was organic farming. 1:17:01.120 --> 1:17:02.479 Called before the First World War? 1:17:02.960 --> 1:17:03.360 Farming? 1:17:03.880 --> 1:17:07.479 Right, But then there was a huge amount of pressure here. 1:17:07.520 --> 1:17:11.240 Everyone's so worried about industrial farming, so the heavy tillage 1:17:11.280 --> 1:17:13.360 and in particular heavy use of chemicals. 1:17:13.720 --> 1:17:17.519 So there's been a move certainly since the First World 1:17:17.560 --> 1:17:18.680 War and the Second World War as well. 1:17:18.680 --> 1:17:21.200 We've seen a lot of nitrogen being used in farms 1:17:21.200 --> 1:17:22.799 and a lot of heavy tillage, a lot of chemicals, 1:17:22.840 --> 1:17:25.719 pesticide and so on, and that's just been killing our soils. 1:17:26.000 --> 1:17:27.160 This is a catastrophe. 1:17:27.720 --> 1:17:29.400 You know, we were worried about famine at the end 1:17:29.400 --> 1:17:31.679 of the Second World War, so rightfully we were worried 1:17:31.680 --> 1:17:35.080 about feeding our population, but we haven't been measuring food 1:17:35.120 --> 1:17:37.160 in the right value. It's been measured by calories rather 1:17:37.160 --> 1:17:38.080 than nutrient density. 1:17:39.080 --> 1:17:41.120 So I didn't mean to interrupt, but it was just interesting. 1:17:41.160 --> 1:17:43.840 We just came off a discussion of talking about the 1:17:43.880 --> 1:17:46.960 cost of meat and just what's going on in that world. 1:17:46.960 --> 1:17:49.920 But I do think about, like is our soil globally, 1:17:50.840 --> 1:17:53.920 how tortured is it or how bad is it because 1:17:53.920 --> 1:17:55.000 of the industrial farming. 1:17:55.439 --> 1:17:56.960 A lot of it, most of it, I would say, 1:17:57.000 --> 1:18:00.840 is on life support. It's really it's catastroph So when 1:18:00.840 --> 1:18:03.240 I was gonna say, when I drive up from NA 1:18:03.320 --> 1:18:06.240 to Pazzoobils, which is one of the most regeneritive regions. 1:18:05.840 --> 1:18:08.759 In wine up the I five and you see. 1:18:08.560 --> 1:18:11.200 Thousands of acres of fruit trees and nut trees that 1:18:11.240 --> 1:18:13.800 are on life support. It's like the moon's surface, and 1:18:13.840 --> 1:18:16.360 so it's kept they're kept live by these extern inputs 1:18:16.600 --> 1:18:18.160 and what you end up with a product, but they're 1:18:18.160 --> 1:18:21.280 not very tasty and they're not very nutritionally dense. So 1:18:21.320 --> 1:18:23.840 we need to actually start restoring soil health globally, and 1:18:23.920 --> 1:18:25.280 regenerative is a way of doing that. 1:18:25.520 --> 1:18:27.519 So you can do that in terms of all that soil. 1:18:27.560 --> 1:18:30.120 How long does it take the process of getting it back, It. 1:18:30.680 --> 1:18:33.280 Can happen quite quickly, and that's one reason why we 1:18:33.360 --> 1:18:35.639 so I run a nonprofit as well called the Regenerative 1:18:35.720 --> 1:18:40.600 Viticulture Foundation. So viticulture is agriculture for vines, and we're 1:18:40.680 --> 1:18:43.400 launching these initiatives called one block challenges. So we did 1:18:43.400 --> 1:18:45.000 one in Paso, we've done one, we're doing one in 1:18:45.080 --> 1:18:51.040 Napo Opus one in fact a great winery winery, so 1:18:51.080 --> 1:18:53.080 we're doing one there on the eighteenth of November, and 1:18:53.080 --> 1:18:55.639 we're challenging the growers in Napa and as we did 1:18:55.640 --> 1:18:59.599 in Pazo, to just transition one block of their vineyard 1:18:59.680 --> 1:19:02.240 to re for a year and then come back and 1:19:02.280 --> 1:19:05.360 see the difference. It's incredible how generous Mother Nature is 1:19:05.439 --> 1:19:05.880 coming back. 1:19:06.040 --> 1:19:09.360 You said, you've driven up California on the five, but 1:19:09.520 --> 1:19:11.280 if you go a little west, you could drive up 1:19:11.320 --> 1:19:13.880 on Highway one or the one oh one and then 1:19:14.360 --> 1:19:16.840 go on San Marcos pass through Los of Libos where 1:19:16.880 --> 1:19:19.519 there is a lot of agriculture and a lot of 1:19:19.600 --> 1:19:23.400 vineyards as well. Is the movement expanding throughout the state 1:19:23.439 --> 1:19:25.720 of California and beyond the state of California. 1:19:25.840 --> 1:19:26.040 Yeah. 1:19:26.080 --> 1:19:29.840 Absolutely, And that's the point of my nonprofit is to 1:19:29.840 --> 1:19:31.920 really encourage farmers, give them the reasons to do it. 1:19:32.240 --> 1:19:36.000 Everything around region, as far as we're concerned, is using science. 1:19:36.640 --> 1:19:37.880 So you know, if we can. 1:19:37.800 --> 1:19:41.120 Rebuild soils and rebuild the soil organic matter, rebuild soil carbon, 1:19:41.360 --> 1:19:43.599 they end up with much better tasting wines. But also 1:19:43.600 --> 1:19:46.599 you see nature coming back. My mother Nature owes us 1:19:46.640 --> 1:19:49.479 no favors, but she'll come back. But you've got to 1:19:49.479 --> 1:19:51.960 create that right environment. Getting wean yourself off the synthetics 1:19:51.960 --> 1:19:52.719 and get yourself back. 1:19:52.600 --> 1:19:54.479 Into natural you know, it's kind of I always think 1:19:54.479 --> 1:19:58.320 about Stephen what happened during the pandemic, and the sky's 1:19:58.320 --> 1:20:02.280 got bluer, and the animals came out and quickly, and 1:20:02.320 --> 1:20:04.760 it's just a reminder when we see the impact of 1:20:04.800 --> 1:20:07.360 climate change and it feels so devastating, it feels like 1:20:07.360 --> 1:20:10.760 there's no way back. I always go back to the 1:20:10.800 --> 1:20:14.200 pandemic and how the world seemed so much better, so 1:20:14.320 --> 1:20:16.960 we can do better. How expensive is it to do 1:20:17.080 --> 1:20:20.479 regenerative farming and the ROI on something like that, the 1:20:20.520 --> 1:20:21.800 return on investment. 1:20:21.680 --> 1:20:24.080 Well, we're working a little bit with UC Davis and 1:20:24.120 --> 1:20:26.719 we're working with other growers to see the data points 1:20:26.760 --> 1:20:29.360 coming out of it, because basically we think, and certainly 1:20:29.600 --> 1:20:32.240 evidence to my farm is once you've made that transition, 1:20:32.680 --> 1:20:36.240 your input costs drop, so you're not buying as many 1:20:36.360 --> 1:20:40.600 external inputs, fewer tractor passes. You're letting nature kind of 1:20:40.600 --> 1:20:43.360 get everything back into balance. So we think actually costs 1:20:43.400 --> 1:20:45.040 will be more or less the same as they are 1:20:45.280 --> 1:20:46.240 with regular farming. 1:20:46.400 --> 1:20:48.719 All right, So we're talking with Stephen Kronk. He's founder 1:20:48.720 --> 1:20:51.760 and chief executive officer of Maison Mirabow. He's here in 1:20:51.760 --> 1:20:54.360 our Bloomberg Interactive Broker's studio. So that leads us to 1:20:54.800 --> 1:20:58.120 your product. There's three bottles that I'm looking at in 1:20:58.120 --> 1:20:59.639 front of me, and there's one that we know we've 1:20:59.640 --> 1:21:02.479 opened up up. Tell me what we're going to sample here? 1:21:02.680 --> 1:21:05.439 So this is one day by mirror both. This is new. 1:21:06.080 --> 1:21:09.920 This is why I'm here. This is this the bottles Miraboa. 1:21:10.000 --> 1:21:10.599 So we're the. 1:21:10.560 --> 1:21:13.720 First certified regenerative organic winery in France soon and I. 1:21:13.720 --> 1:21:14.639 Are competing for the bottles. 1:21:16.280 --> 1:21:19.559 Well, this is no, no, no, So one day, one 1:21:19.640 --> 1:21:21.559 day by Mirabeau. We call it one day because one 1:21:21.640 --> 1:21:23.439 day all vineyards will be found like this. 1:21:23.600 --> 1:21:24.320 Oh I love that. 1:21:24.439 --> 1:21:27.680 And it's the first regenerative certified wine to come out 1:21:27.720 --> 1:21:30.040 of France, to come out of Provence, and it's something 1:21:30.080 --> 1:21:33.200 that we're really really proud of because rather like our 1:21:33.320 --> 1:21:36.800 state wine, which is also the first certified regenda organic wine, 1:21:37.640 --> 1:21:40.320 this is this is, this is us certifying our growers. 1:21:40.880 --> 1:21:43.080 So we have to make this work at scale. You know, 1:21:43.120 --> 1:21:45.800 you can't just have little niche boutique wineries enjoying the 1:21:45.840 --> 1:21:46.439 benefits of. 1:21:46.400 --> 1:21:47.920 Regent and it can be done at scale. 1:21:47.920 --> 1:21:50.320 It can be done at scale, and migrowers in Provence 1:21:50.400 --> 1:21:54.240 are just absolutely crazy about getting involved, you know, because 1:21:54.360 --> 1:21:57.960 organic is I would say flat growth, but you know 1:21:58.000 --> 1:22:00.960 a lot of basic organic isn't also for soil, you know, 1:22:01.040 --> 1:22:02.920 so so we have to use common Why is that? 1:22:03.320 --> 1:22:05.839 So that makes me nervous because I think there's an assumption. 1:22:06.160 --> 1:22:08.479 Well, so organic is the best kind of farming you 1:22:08.520 --> 1:22:10.599 can you can do when you're doing it properly, when 1:22:10.640 --> 1:22:13.599 you're doing it regeneratively, so regendat ive organic is the 1:22:13.600 --> 1:22:16.559 gold standard. Okay, But if you are a lot of 1:22:16.960 --> 1:22:18.800 a lot of organic farms, certainly in the wine world, 1:22:18.840 --> 1:22:20.080 can still be monocultures. 1:22:20.520 --> 1:22:22.000 So you don't want any weeds in the vineyard. 1:22:22.080 --> 1:22:24.479 You wanted to look immaculate, so if the weeds come in, 1:22:24.880 --> 1:22:28.040 then you know, plow them away. Yeah, but actually that's wrong. 1:22:28.120 --> 1:22:29.960 You know, you need to let nature into the vineyard. 1:22:30.200 --> 1:22:32.160 You can't have these these monocultures. 1:22:32.479 --> 1:22:33.080 It's funny. 1:22:33.120 --> 1:22:34.760 I was with somebody the other day and they were saying, yeah, 1:22:34.800 --> 1:22:38.519 my husband's a real germophobe, and it's sanitizing his hands 1:22:38.520 --> 1:22:40.599 and everything is just so so I. 1:22:40.520 --> 1:22:41.519 Do I know this one? 1:22:42.920 --> 1:22:45.960 I said, Okay, tell me how often does he get sick? 1:22:46.040 --> 1:22:48.680 And she said all the time, you know, And we 1:22:48.760 --> 1:22:51.920 need to we need to rough rummage around of the dirt. 1:22:51.960 --> 1:22:53.720 We need we need to have those bugs, and we 1:22:53.760 --> 1:22:55.920 need to be healthy and build out resilience. And that's 1:22:55.960 --> 1:22:59.000 what regenerative does you know monoculture is the same thing 1:22:59.000 --> 1:23:00.679 as sanitizing a farm. 1:23:00.800 --> 1:23:02.639 Well, I will say with kids, they say, like introduce 1:23:02.680 --> 1:23:04.360 pets and dogs. It's a good thing for them to 1:23:04.360 --> 1:23:12.320 be around germs and stuff. So Stephen, cheers, thanks for 1:23:12.320 --> 1:23:12.720 having me in. 1:23:13.640 --> 1:23:15.759 Carol's drinking the wine as we speak. 1:23:15.760 --> 1:23:16.280 That's what it's for. 1:23:16.760 --> 1:23:17.160 The rose. 1:23:17.720 --> 1:23:19.200 That's nice. So this is the one day. 1:23:20.160 --> 1:23:20.760 This is one day. 1:23:20.840 --> 1:23:24.080 Yeah, and rose, I mean it varies, right like it varies. 1:23:24.080 --> 1:23:27.360 But the good thing about Provence roses it's always dry. 1:23:27.200 --> 1:23:29.360 So because you can get some roses that are quite 1:23:29.439 --> 1:23:32.080 high and residual sugar and you can that's not very 1:23:32.080 --> 1:23:35.559 food friendly and yeah, very healthy, but Provence roses always 1:23:35.600 --> 1:23:36.400 always being dry. 1:23:36.520 --> 1:23:39.040 So I always associate rose with warm weather in the summer. 1:23:39.120 --> 1:23:41.240 But you argue that it's the perfect thing to drink 1:23:41.240 --> 1:23:43.360 at Thanksgiving dinner, right, Why is that? 1:23:43.640 --> 1:23:45.799 Because it's just such a food versatile wine. 1:23:45.920 --> 1:23:46.400 It's great. 1:23:46.560 --> 1:23:47.280 It's got a little bit. 1:23:47.240 --> 1:23:48.640 Of a city that cuts through the sort of the 1:23:49.120 --> 1:23:51.639 sweet flavors of the cranberry sauce or but it cuts 1:23:51.640 --> 1:23:55.240 through the gravy. It's just a refreshing mouthfeel once you've 1:23:55.240 --> 1:23:57.160 had a great, big, you know. 1:23:57.120 --> 1:23:59.639 Fork of potato or something that's Stephen Kronk, the owner 1:23:59.720 --> 1:24:00.960 of me Son Mirabeau. 1:24:01.160 --> 1:24:03.000 I have to say, this is the second time that 1:24:03.000 --> 1:24:05.240 we've talked with Steven, and we're hoping actually to get 1:24:05.920 --> 1:24:07.880 his wife back soon because they have a book out 1:24:07.920 --> 1:24:12.000 too about their experience and it's all about food and 1:24:12.600 --> 1:24:15.519 recipes and cooking. I mean, Provence is a very very 1:24:15.560 --> 1:24:18.760 special place. But it's interesting what he's trying to do 1:24:18.800 --> 1:24:22.880 with regenerative farming. We have done several segments on this, 1:24:22.880 --> 1:24:26.719 this concept where you basically don't strip the soil, and 1:24:26.840 --> 1:24:28.720 I think farmers used to kind of try and do 1:24:28.800 --> 1:24:31.559 that way back when of maybe like rotating crops and 1:24:31.560 --> 1:24:32.240 so on and so forth. 1:24:32.240 --> 1:24:34.559 But yeah, pre the Great Wars, pre the Great. 1:24:34.360 --> 1:24:37.360 Wars, but like the what we do now in terms 1:24:37.400 --> 1:24:40.599 of industrial farming and chemicals, it's a whole different ballgame. 1:24:40.680 --> 1:24:43.479 But it's such a big story because you know, post 1:24:43.600 --> 1:24:46.800 World War Two, as Stephen explained to us, there was 1:24:46.840 --> 1:24:49.519 such a demand for feeding a growing number of people 1:24:49.600 --> 1:24:52.320 here in the US and around the world. You also 1:24:52.400 --> 1:24:55.280 had industrialization, so you had fewer people actually living on 1:24:55.320 --> 1:24:57.719 farms farming for themselves and farming for a great number 1:24:57.720 --> 1:24:59.400 of people, so you had to figure out how to 1:24:59.479 --> 1:25:02.520 do more with us. And I wonder if the regenerative 1:25:02.560 --> 1:25:04.760 movement will grow beyond sort of a niche or small 1:25:04.840 --> 1:25:08.559 number of players that don't cater to a whole host 1:25:08.560 --> 1:25:08.960 of people. 1:25:09.080 --> 1:25:11.760 I mean, took a Chipotle's history way back when when 1:25:11.760 --> 1:25:15.240 the original founder was there, Steve El's, but like that 1:25:15.400 --> 1:25:18.520 was kind of their mission of trying to do regenerative 1:25:18.560 --> 1:25:21.240 farming farming responsibly. The other thing I would say, Tim 1:25:21.240 --> 1:25:23.080 that's always crazy is when you and I do any 1:25:23.160 --> 1:25:25.679 kind of food story and we talk about how difficult 1:25:25.760 --> 1:25:28.280 it is to kind of move beyond industrial farming. How 1:25:28.360 --> 1:25:31.320 much food is wasted and ultimately thrown out at the 1:25:31.320 --> 1:25:33.040 same time, so many people who don't have food. But 1:25:33.080 --> 1:25:35.280 this idea of if we were maybe smarter in our 1:25:35.320 --> 1:25:39.400 food production and consumption, maybe we wouldn't have we could 1:25:39.439 --> 1:25:41.640 regenerative farming could be easier to do. 1:25:41.760 --> 1:25:43.880 I don't know, We're a little guilty of it at times. 1:25:43.920 --> 1:25:46.160 I know you end up finding something in the back 1:25:46.200 --> 1:25:48.000 of the fridge. It's like a little shriveled up and 1:25:48.000 --> 1:25:48.960 you're like, I can't eat this. 1:25:49.040 --> 1:25:52.800 Now, smaller fridge, smaller. You know, refrigerators are smaller. I 1:25:52.800 --> 1:25:55.320 have heard now over in Europe and stuff like they 1:25:55.320 --> 1:25:59.040 shop every day. I listen. I had two refrigerators and 1:25:59.040 --> 1:25:59.800 a freezer growing up. 1:25:59.840 --> 1:26:01.320 Yeah, but there were how many of you nine? 1:26:01.400 --> 1:26:03.639 I know, but still it was a lot of space. 1:26:04.120 --> 1:26:07.880 I'm just saying, no judge, all. 1:26:07.800 --> 1:26:09.599 Right, how'd we get there from wine? 1:26:09.720 --> 1:26:12.680 I don't know the wine was good. I'm going to 1:26:12.760 --> 1:26:14.840 just put that out there. Full disclosure. Hey, that wraps 1:26:14.880 --> 1:26:17.240 up the weekend edition of Bloomberg Business Week from Bloomberg Radio. 1:26:17.280 --> 1:26:18.320 Thank you so much for joining us. 1:26:18.439 --> 1:26:20.639 We shure to tune into Bloomberg Business Week daily Monday 1:26:20.640 --> 1:26:22.640 through Friday, starting at two pm Wall Street Time on 1:26:22.640 --> 1:26:26.080 Bloomberg TV, Bloomberg Radio, and on Sirius XM Channel one 1:26:26.120 --> 1:26:28.720 twenty one. Also listen to us on Apple car Play 1:26:28.720 --> 1:26:30.880 and Android Auto Free in the Apple App Store or on 1:26:30.920 --> 1:26:31.519 Google Play. 1:26:31.600 --> 1:26:33.840 You can also watch our daily broadcast on YouTube. Just 1:26:33.880 --> 1:26:37.640 search Bloomberg Podcasts. 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