WEBVTT - Corporate Leadership, Markets, and Nonprofits (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.439 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.919 at Bloomberg dot com slash podcast. We are sort of 0:00:22.960 --> 0:00:25.080 scrambling around here because we have the CEO of Nissan 0:00:25.120 --> 0:00:26.880 coming in and I wanted to get up in bow 0:00:27.440 --> 0:00:31.760 because that's what you do um in Japanese business. But 0:00:32.000 --> 0:00:36.040 I feel underdressed now because it's a Thursday just we're 0:00:36.080 --> 0:00:38.440 a flannel shirt. But thank you so much for joining us. 0:00:38.680 --> 0:00:41.040 Pleasure having in. Let me turn on your mic there. UM. 0:00:41.080 --> 0:00:43.960 We have so many questions and we're so uh excited 0:00:43.960 --> 0:00:46.519 that you came in. UM. Nissan is a business that's 0:00:46.520 --> 0:00:50.760 been doing really well uh lately, not only because of 0:00:50.800 --> 0:00:54.240 the popularity of the cars, um, but also because of 0:00:54.280 --> 0:00:58.240 the weakness of the yen. I wonder what you plan 0:00:58.400 --> 0:01:01.160 to do with the extra profits that you're making. It 0:01:01.200 --> 0:01:03.840 seems like you're in a great position to invest well. 0:01:03.920 --> 0:01:05.800 First of all, thank you for having me here. It's 0:01:05.840 --> 0:01:09.160 my pleasure to be in this radio. Uh. You talked 0:01:09.160 --> 0:01:11.840 about the extent where it has been benefiting financially on 0:01:11.880 --> 0:01:15.280 our our profit which is true at the short term, 0:01:15.600 --> 0:01:18.160 but we also need to be aware that our cost 0:01:18.560 --> 0:01:22.440 in terms of raw material is increasing at the level 0:01:22.720 --> 0:01:26.160 even higher than the exchange rate gains, so that is 0:01:26.240 --> 0:01:29.480 kind of making that the situation of the profitability. On 0:01:29.560 --> 0:01:32.040 top of that, we do have a good performance in 0:01:32.040 --> 0:01:35.280 our company in terms of about sales mix and how 0:01:35.360 --> 0:01:38.000 we're making that good product to the customer to give 0:01:38.040 --> 0:01:41.399 the good value to the customer. That is making up 0:01:41.840 --> 0:01:44.440 financial outlook which we announced in last month to be 0:01:44.480 --> 0:01:47.880 a little bit more positive. Beside, we're speaking with Makoto Cheeta, 0:01:48.000 --> 0:01:51.320 CEO and President of Nissan Motor Corporation. Mr. Cheetah. One 0:01:51.360 --> 0:01:53.640 of the unique things about your company, about the Nichean 0:01:53.880 --> 0:01:57.280 Motor Corporation is the relationship with Rena and the ownership 0:01:57.360 --> 0:01:59.360 cross ownership with renew Can you talk to us about 0:01:59.640 --> 0:02:02.520 the state of that today and how that may change 0:02:02.560 --> 0:02:05.640 going forward. Yeah, what we are discussing with our partners 0:02:05.760 --> 0:02:08.160 how we can make the alliance to the next stage 0:02:08.600 --> 0:02:11.840 to be more competitive and knowing that the identification is 0:02:11.880 --> 0:02:14.440 one of the next la for the automotive industry we 0:02:14.480 --> 0:02:16.960 are facing everywhere in the world and how we can 0:02:17.000 --> 0:02:20.480 maximize the asset that we built under the Alliance father 0:02:20.800 --> 0:02:23.120 to be competitive, and that is what we are in 0:02:23.200 --> 0:02:26.800 discussion with our partner every day. We have a bank 0:02:26.840 --> 0:02:29.440 of TV screens here and you can see half of 0:02:29.480 --> 0:02:32.320 them are full of President Biden right now meeting with 0:02:32.400 --> 0:02:36.160 French President Emmanuel McCrone. One of the things um that 0:02:36.280 --> 0:02:39.160 they are reportedly going to talk about is the Inflation 0:02:39.200 --> 0:02:41.960 Reduction Act, which a lot of people in Europe and 0:02:42.000 --> 0:02:46.840 I imagine um in Japan as well think unfairly benefits 0:02:46.960 --> 0:02:51.799 US carmakers. What's your take on the Inflation Reduction Act 0:02:51.840 --> 0:02:56.920 and the credits that seem um to be only for 0:02:57.919 --> 0:03:01.359 made in US, not only vehicle rolls assembled in US vehicles, 0:03:01.360 --> 0:03:05.919 but also vehicles with a certain amount of US sourced parts. Well, 0:03:05.960 --> 0:03:08.240 what I can say at this moment is that, of course, 0:03:08.320 --> 0:03:12.359 the electification in the US has become more visible done 0:03:12.440 --> 0:03:14.600 right in the two or three years ago, which is 0:03:14.639 --> 0:03:18.400 making us more future opportunity. We already have declare ourselves 0:03:18.440 --> 0:03:21.440 to be farther invest for the electification in the US 0:03:21.480 --> 0:03:24.040 at the level of the five hundred million dollar and 0:03:24.080 --> 0:03:26.960 that we are considering additional two hundred fifty million dollar 0:03:27.240 --> 0:03:31.239 in order to make identified strategy and to be accepted 0:03:31.320 --> 0:03:34.000 the customer for our value of the Nissan in the future. 0:03:34.160 --> 0:03:36.480 So this is what we're trying to do. Um I 0:03:36.760 --> 0:03:38.600 l A. Yes, it's a challenging in the short term, 0:03:38.640 --> 0:03:40.640 but there could be the opportunity in the future. How 0:03:40.720 --> 0:03:43.840 we father to press ourselves here in the United States 0:03:43.880 --> 0:03:46.960 of our presence, Mr. Treat As you probably know as 0:03:47.000 --> 0:03:51.440 you travel around America that Americans like their pickup trucks 0:03:51.600 --> 0:03:55.560 and from an electric vehicle perspective, my census, if you 0:03:55.560 --> 0:03:58.360 don't have an electric pickup truck, you don't have really 0:03:58.440 --> 0:04:00.760 a market position in the US. Talk to us about 0:04:00.840 --> 0:04:02.720 niche on and how maybe they think about that part 0:04:02.760 --> 0:04:04.920 of the market. Yeah, we're looking towards the two thousand 0:04:04.960 --> 0:04:08.920 thirty to introduce electified vehicle of twenty three models. Out 0:04:08.920 --> 0:04:11.480 of that fifteen our evs and we have a lot 0:04:11.520 --> 0:04:13.600 of plan. And then when you talk about the US, 0:04:13.800 --> 0:04:17.359 as you mentioned that the pickup is very important segment 0:04:17.400 --> 0:04:20.000 that we have to glow in the future. Yeah, we 0:04:20.040 --> 0:04:22.440 are looking at further we have a title and we 0:04:22.440 --> 0:04:25.120 have middle sized pickup as well, and we did like 0:04:25.240 --> 0:04:28.520 to have our value to be father to recognize by 0:04:28.520 --> 0:04:31.440 the customer. And when we talk about electified vehicle, we 0:04:31.480 --> 0:04:33.960 are planning a lot of things here in the US. 0:04:34.000 --> 0:04:35.479 And one of the things that I did would like 0:04:35.520 --> 0:04:38.279 to take this occasion to highlight is that we do 0:04:38.440 --> 0:04:41.600 have our new technology challenging today on the battery called 0:04:42.279 --> 0:04:45.120 a S S B ALSOLD state battery and this is 0:04:45.160 --> 0:04:48.159 to be introduced in first in Japan as a propilot 0:04:48.200 --> 0:04:51.240 plant in two twenty four. Then we were looking for 0:04:51.279 --> 0:04:55.480 this commercially and this battery specification would allow or enable 0:04:55.760 --> 0:04:59.160 more frexibility of the size of the car to be electric. 0:04:59.520 --> 0:05:01.560 So this is what we are challenging as a Nissan 0:05:01.800 --> 0:05:04.000 as we have been working for the electified vehicle or 0:05:04.040 --> 0:05:06.600 electric car. As one of the pioneer started was a 0:05:06.640 --> 0:05:09.599 Leap with a sudden ten and we do have a 0:05:09.640 --> 0:05:13.880 thirty years over experience of this battery chemistry in our company. 0:05:14.279 --> 0:05:17.800 I wonder what my favorite car clearly is Godzilla? Right. 0:05:17.839 --> 0:05:22.599 The g t r um is legendary, you know, said 0:05:22.640 --> 0:05:25.960 to be um produced by the motor. Only four people 0:05:26.000 --> 0:05:29.080 are allowed to assemble the motor in Japan. Is that true? 0:05:30.080 --> 0:05:32.359 What's the what are the plans for Godzilla can? Are 0:05:32.400 --> 0:05:34.640 you gonna make it into a hybrid? Is there is 0:05:34.680 --> 0:05:38.000 there a new electric Godzilla coming that I can talk 0:05:38.040 --> 0:05:40.479 about the future product yet, But what I can say 0:05:40.480 --> 0:05:43.039 about it is that the how Nistan father to make 0:05:43.120 --> 0:05:46.280 the eniche people's life. This is our corporate purpose and 0:05:46.320 --> 0:05:48.520 then Nissan is making fun this sports car like a 0:05:48.600 --> 0:05:51.560 GDR as you mentioned, and to down to the electric 0:05:51.600 --> 0:05:53.240 car that we have. I love the Z as well, 0:05:54.040 --> 0:05:57.280 especially in yellow. It's a great My first car as 0:05:57.279 --> 0:06:00.080 a Z nice and I do like to have a 0:06:00.120 --> 0:06:03.039 sports car to be father to deliver to the customer. 0:06:03.440 --> 0:06:05.479 And we have to think about what kind of the 0:06:05.520 --> 0:06:08.919 future power train or we have to consider for this 0:06:09.000 --> 0:06:11.640 kind of sports card as well. Mr Cheated China, talk 0:06:11.680 --> 0:06:14.880 to us about your position in China. What you think 0:06:14.880 --> 0:06:17.000 the future China is. That's certainly a big issue here 0:06:17.040 --> 0:06:20.240 in the United States. Well, China. I think it's still 0:06:20.240 --> 0:06:22.479 the big market that we are. The media or ems 0:06:22.480 --> 0:06:25.520 are experimentally doing the business case and it will continue 0:06:25.600 --> 0:06:27.960 as you see in the scale of the market. But 0:06:28.440 --> 0:06:30.279 I see the world now it's going to be more 0:06:30.480 --> 0:06:33.280 on the maybe the right way of saying English. I'm 0:06:33.320 --> 0:06:36.920 not so sure about fragmented okay especially the elxification. Each 0:06:36.960 --> 0:06:41.760 country has a different speed and customers acceptance. And what 0:06:41.920 --> 0:06:44.400 is important for us is how we can design ourselves 0:06:44.400 --> 0:06:46.680 towards to that. What is for you as what is 0:06:46.720 --> 0:06:48.560 for your what is what China? What is what Japan? 0:06:49.000 --> 0:06:50.880 And that's going to be a challenging for the next 0:06:50.880 --> 0:06:53.279 five to ten years. That's the reason why we have 0:06:53.400 --> 0:06:56.200 announced sumption to Southern thirty and we're going to do 0:06:56.320 --> 0:07:00.000 out the more detailed plan on the e respective. Mark 0:07:00.360 --> 0:07:04.239 Okayo Cheetah, a CEO and president of Nissan Motor Company, 0:07:04.320 --> 0:07:06.360 joining us live in our Bloomberg in Erector Brooker Studio. 0:07:06.360 --> 0:07:09.000 We really appreciate you taking time to speak with us 0:07:09.040 --> 0:07:12.240 and learn about what's the latest with the Nissan Motor Corporation. 0:07:15.280 --> 0:07:18.320 So I put in DAL Drones Industrials Index Space m 0:07:18.360 --> 0:07:21.720 o V for movers, and I find that costs, I 0:07:21.720 --> 0:07:24.480 mean the salesforce accounts for a hundred and twelve points 0:07:24.520 --> 0:07:27.560 of the four point decline in the Dow Jones Industrial 0:07:27.600 --> 0:07:30.360 So I need to go. It's literally been decimated. So 0:07:30.400 --> 0:07:33.320 a lot of people think decimated is reduced to one tenth, 0:07:33.360 --> 0:07:38.480 but actually it's yes, exactly, So you're using the correct Okay, 0:07:40.240 --> 0:07:44.000 Man Deep Singh senior technology annels for Bloomberg Intelligence. We 0:07:44.080 --> 0:07:46.040 got them both here in the studio on right, What 0:07:46.080 --> 0:07:47.600 how do you guys divide it? I don't rock, what 0:07:47.600 --> 0:07:50.840 do you cover that Man Deep doesn't? And vice versa? 0:07:52.240 --> 0:07:55.560 The Internet names Okay, I don't know. I just they 0:07:55.560 --> 0:07:58.880 do it all their tech. I just throw tech, hardware, software, Internet, 0:07:58.880 --> 0:08:02.200 I just throw them eat at each very different. Yes, 0:08:02.320 --> 0:08:06.040 and and that's what you'll see sales force versus All right, 0:08:06.080 --> 0:08:09.080 let's go a salesforce on that's your name. We'll assign 0:08:09.120 --> 0:08:11.040 the blame to you. What happened to them because they 0:08:11.120 --> 0:08:14.400 were just ripping it for so long? Yeah, so it's 0:08:14.440 --> 0:08:16.960 falling in the same category of you know, macro yt 0:08:17.080 --> 0:08:19.960 spending slow down. Now. I think the stock reaction would 0:08:19.960 --> 0:08:22.840 have been less worse if work they didn't announce spectacular 0:08:22.840 --> 0:08:25.880 results the day before UM. And so that's one culprit. 0:08:25.960 --> 0:08:28.960 The second is that co CEO Brett Taylor decides to 0:08:29.000 --> 0:08:30.960 leave and start you know, it's gonna most likely start 0:08:30.960 --> 0:08:33.160 a new company. I think that puts a little bit 0:08:33.200 --> 0:08:35.440 of haziness at the top. There have been a few 0:08:35.480 --> 0:08:37.880 CEOs or co CEOs that have left in the last 0:08:37.920 --> 0:08:40.120 few years. So it really people want to figure out 0:08:40.160 --> 0:08:42.480 is what's Mark Bennehoff going to do when it comes 0:08:42.480 --> 0:08:44.440 to leadership on the top. So I think both both 0:08:44.440 --> 0:08:47.600 those factors are weighing on sales force today. But in general, 0:08:47.679 --> 0:08:51.600 we've seen a lot of bad news or not good 0:08:51.640 --> 0:08:56.000 news out of these software companies over the last few days. Right, 0:08:56.080 --> 0:09:00.320 CrowdStrike was not good. I didn't think, um that we're 0:09:00.320 --> 0:09:03.559 gonna see gains in Snowflake, but it's now turned around 0:09:03.559 --> 0:09:05.720 in the market. Nonetheless, the outlook isn't great. You know, 0:09:06.320 --> 0:09:09.720 are people spending less on these services they see they 0:09:09.720 --> 0:09:12.800 are all old spending services less on some of these services. 0:09:12.840 --> 0:09:16.760 But remember one thing, it's also question of valuation and 0:09:16.800 --> 0:09:19.800 how much estimates have been reduced. So every stock is different, 0:09:19.840 --> 0:09:21.880 every company is different. In areas where they have been 0:09:22.000 --> 0:09:23.880 estimates have been cut down quite a bit, they are 0:09:23.920 --> 0:09:26.079 not responding, you know, from a stock point of view 0:09:26.120 --> 0:09:28.920 as bad. In some places where it's not been cut down, 0:09:29.160 --> 0:09:31.680 people are surprised by what happened. You know, stock reaction 0:09:31.760 --> 0:09:34.160 is bad. Crowds right is a great example. Salesforce is 0:09:34.200 --> 0:09:37.280 a great example. Over there, a man deep we have 0:09:37.679 --> 0:09:40.959 the I think just only a silicon you're only doing 0:09:41.000 --> 0:09:44.320 Silicon Valley. H Elon Musk tweeting out that he was 0:09:44.360 --> 0:09:48.320 at the Apple campus in Cupertino, California. Rewind First, he 0:09:48.360 --> 0:09:51.080 tweeted out that he was going to war with Apple. Yes, 0:09:51.160 --> 0:09:52.960 he said, you know what, they threatened to take us 0:09:53.000 --> 0:09:56.160 out of the app store. They charge us thirty it's 0:09:56.160 --> 0:09:59.120 a monopoly they're abusing, and when we choose to go 0:09:59.280 --> 0:10:01.560 to war. Then he went to the Cupertino campus and 0:10:01.559 --> 0:10:06.160 he was like, oh, we're great friends. Well, so a 0:10:06.200 --> 0:10:08.840 couple of things they're one is I don't think he 0:10:08.960 --> 0:10:12.480 realized that if they pivot to a subscription model, Apple 0:10:12.520 --> 0:10:15.560 will be taking a thirty percent cut. Remember Twitter was 0:10:15.640 --> 0:10:20.480 all advertising. With advertising, you're monetizing the time span through 0:10:20.600 --> 0:10:23.160 by showing ads. You don't have to pay Apple anything. 0:10:23.440 --> 0:10:26.880 With subscription, it's very different because if people sign up 0:10:26.920 --> 0:10:29.560 for a subscription on the phone, Apple is taking a 0:10:29.600 --> 0:10:33.360 thirty percent cut. So as he pivoted to subscriptions, I 0:10:33.400 --> 0:10:36.120 think he realized that Apple will be taking a cut, 0:10:36.160 --> 0:10:38.880 and he complained about the take rades, which Epic has 0:10:38.920 --> 0:10:41.960 done before, and a number of other companies, gaming companies 0:10:42.000 --> 0:10:46.240 that rely on a subscription model on the phone. They 0:10:46.280 --> 0:10:48.800 talk about, you know how Apple has a very high 0:10:48.800 --> 0:10:52.560 take rate and and so does Android and Google. But 0:10:52.760 --> 0:10:56.559 the advertising side was much more cleaner in terms of 0:10:56.600 --> 0:10:59.719 paying to Apple. But now he realizes, right, and he 0:11:00.000 --> 0:11:02.800 eats his chest and he talks a big game, and 0:11:02.840 --> 0:11:07.400 then somehow he ends up at Apple's headquarters and Tim 0:11:07.400 --> 0:11:10.880 Cook just quietly puts him in his place because there 0:11:11.040 --> 0:11:12.840 is no way out of it. And that's what a 0:11:12.960 --> 0:11:17.439 number of gaming companies have realized. That power off Apple's platform, 0:11:17.640 --> 0:11:21.240 that is the biggest distribution channel out there. Even if 0:11:21.240 --> 0:11:23.800 they charge the high take rades, you have no option 0:11:23.960 --> 0:11:26.280 right now but to pay for it. And you can't 0:11:26.280 --> 0:11:28.959 build your own phone or you know, launch a service 0:11:29.040 --> 0:11:31.640 outside of this is what Anora was. I was having 0:11:31.640 --> 0:11:33.760 this discussion with Anorag yesterday and I said, you know 0:11:33.800 --> 0:11:35.920 what he's gonna I thought Musk would take this to 0:11:36.000 --> 0:11:38.560 Republicans and they would raise a free speech problem and 0:11:38.559 --> 0:11:42.719 they would move some legislation through Congress. And Anorag was like, nope, no, 0:11:43.679 --> 0:11:46.959 I mean no, no, it's not that I think it's 0:11:47.000 --> 0:11:49.840 a very simple thing. If Tim Cooks tells him you 0:11:49.880 --> 0:11:51.959 want a business, turn it out, I'll help you do it. 0:11:52.559 --> 0:11:54.600 What what is the you know? I think that's a 0:11:54.679 --> 0:11:56.920 much more easier way to fix it. We'll figure it 0:11:56.920 --> 0:11:59.079 out a way. You just don't put X amount of 0:11:59.160 --> 0:12:01.760 content there, will make sure we advertise mode. And I 0:12:01.840 --> 0:12:03.920 think that's a it's a more logical and a more 0:12:04.000 --> 0:12:06.360 friendly approach to fix things. It's a more silicon value 0:12:06.360 --> 0:12:09.160 way to go. I mean they're also zen out there, um, 0:12:09.320 --> 0:12:10.839 unlike you two guys. All right, so we got on 0:12:11.200 --> 0:12:13.400 Ron and we got man deep sing uh. They cover 0:12:13.480 --> 0:12:16.440 all this tech stuff for bloombergin. Who does hardware? By 0:12:16.440 --> 0:12:18.360 the way, like if I need a hardware call, who 0:12:18.360 --> 0:12:21.439 do I go to? What is hardware? Like the computer stuff? 0:12:21.679 --> 0:12:25.160 Let me make one comment is you know the chip 0:12:25.200 --> 0:12:29.200 companies are missing so much talking about estimate cuts, software misses. 0:12:29.280 --> 0:12:32.640 Our s like slave in comparison to the misses. So 0:12:32.800 --> 0:12:34.720 that's one thing to be mindful of. When you said 0:12:34.800 --> 0:12:37.880 snowflake missed, okay, compare it to an N video or 0:12:37.880 --> 0:12:39.440 an E M D miss Alright, a lot of good 0:12:39.440 --> 0:12:41.040 tech stuff here. We can do it all day long. 0:12:44.120 --> 0:12:46.680 I don't know. I was definitely dialed in yesterday to 0:12:46.720 --> 0:12:49.720 the sand Bank Freed interview Andrew Ross Sorkin at the 0:12:49.760 --> 0:12:52.480 deal Book conference yesterday. I thought Andrew did an excellent 0:12:52.559 --> 0:12:56.079 job from a really weird topic, I guess, but I 0:12:56.120 --> 0:12:58.520 was riveted. But it's the first time I've seen Sam 0:12:58.520 --> 0:13:01.240 bankman Free speak, so you know, I'm not sure what 0:13:01.280 --> 0:13:04.959 to compare to, but it's certainly a key, key issue 0:13:05.000 --> 0:13:08.360 in this whole crypto space here. So any massa who's 0:13:08.440 --> 0:13:11.520 part of the team here, she's an investing reporter Bloomberg News, 0:13:11.559 --> 0:13:13.319 but she's part of this team here Bloomberg News that's 0:13:13.360 --> 0:13:17.600 done an extraordinary job covering all things crypto and kind 0:13:17.600 --> 0:13:19.920 of how this whole space is evolving and some of 0:13:19.920 --> 0:13:22.160 the real big stumbles were seeing out there, including ft 0:13:22.320 --> 0:13:24.160 X and any massive joins us here in our studio. 0:13:24.559 --> 0:13:28.640 Any what did you make of Sam bankman Fried's interview yesterday? Testimony? 0:13:28.679 --> 0:13:30.040 You want to say, I felt like I was just 0:13:30.080 --> 0:13:34.040 about to say testimony, But you know, his interview, Well, 0:13:34.080 --> 0:13:37.320 there was a lot of hype around this interview because 0:13:37.360 --> 0:13:39.280 he had been on the program to speak at the 0:13:39.320 --> 0:13:41.600 deal Book conference long before the blow up in f 0:13:41.679 --> 0:13:44.360 t X, so people were watching very closely and wondering 0:13:44.400 --> 0:13:46.520 if he was going to appear at all, and he did. 0:13:46.640 --> 0:13:48.840 So that was a moment when he actually appeared on 0:13:48.840 --> 0:13:51.320 the screen. As far as what he actually said in 0:13:51.360 --> 0:13:55.240 the interview, he didn't give. He answered a lot of questions, 0:13:55.360 --> 0:13:57.520 but he didn't give a lot of answers, if you 0:13:57.559 --> 0:14:02.760 know what I mean. He verry consciously, I would surmise, 0:14:03.559 --> 0:14:07.600 kept this profile of kind of looking like downcast eyes, 0:14:07.640 --> 0:14:10.800 bowing his head, saying I screwed up. I was the CEO, 0:14:11.160 --> 0:14:15.560 I'm responsible. So he said a lot of that sort 0:14:15.600 --> 0:14:18.520 of thing. He didn't give a lot of answers um 0:14:18.559 --> 0:14:22.720 and did his typical deflecting as far as what actually 0:14:22.760 --> 0:14:25.960 went down, which probably was to be expected. He clearly 0:14:25.960 --> 0:14:30.440 didn't want to incriminate himself, and Andrew really wanted to 0:14:30.480 --> 0:14:33.800 incriminate him, and he kept using the term co mingling, 0:14:34.200 --> 0:14:36.600 as if that's just a daily term we throw around. 0:14:36.920 --> 0:14:39.680 But um, I thought I came away with a pretty 0:14:39.680 --> 0:14:42.520 clear picture of if you take Sam Bankman free at 0:14:42.560 --> 0:14:48.080 his word of what happened, it seemed like Alameda, which 0:14:48.600 --> 0:14:51.440 you know, he says he was trying to distance himself 0:14:51.480 --> 0:14:56.480 from had massive margin positions all over town, and after 0:14:56.560 --> 0:15:01.240 the collapse of Terror Luna, they just shifted those margin 0:15:01.320 --> 0:15:04.680 positions onto F t X, right because they were called 0:15:04.720 --> 0:15:08.520 everywhere else and they had nowhere else to go. Um. 0:15:08.640 --> 0:15:12.080 The part that's hard to believe if that's what happened, 0:15:12.440 --> 0:15:15.440 is that he had no idea that that was happening. Yeah, 0:15:15.520 --> 0:15:17.800 I mean, I would say, you have to take everything 0:15:17.840 --> 0:15:23.880 he says. He's he's a very slippery personality, and exactly 0:15:24.400 --> 0:15:29.760 so all the disclaimers that you just mentioned, Um, he 0:15:30.520 --> 0:15:32.760 I just I think it's hard to take anything that 0:15:32.800 --> 0:15:34.600 he says at face value. Some of the things he 0:15:34.640 --> 0:15:38.760 said were demonstrably false. But to your point, he was 0:15:39.080 --> 0:15:42.600 a owner we know from the bankruptcy filings of Alameda, 0:15:42.800 --> 0:15:45.960 So to say that he didn't know what the positions were, 0:15:46.360 --> 0:15:50.880 I would treat that with a lot of skepticism. The thing, Yeah, 0:15:50.960 --> 0:15:54.160 The other thing is he lived there in the Bahamas 0:15:54.200 --> 0:15:59.800 with the the heads of Alameda. So again, like you're 0:16:00.000 --> 0:16:05.280 living in an apartment in an environment together with these people. 0:16:05.520 --> 0:16:09.000 Just to say that you had no idea seems um, 0:16:09.160 --> 0:16:13.080 seems hard to believe to me. It did seem like, um, 0:16:13.200 --> 0:16:16.160 they were living it up down there. I mean every 0:16:16.200 --> 0:16:18.520 employee who came down like got a house and a 0:16:18.600 --> 0:16:21.560 car and they were all allowed to two worth of 0:16:21.600 --> 0:16:25.040 free food. How can you two hundred door dash a 0:16:25.160 --> 0:16:27.400 day like that would be difficult even for me and 0:16:27.480 --> 0:16:33.640 I eat a lot um. So definitely there were no controls, right. 0:16:33.920 --> 0:16:38.400 But um, it seems like even now he's operating without control, 0:16:38.400 --> 0:16:41.000 why would he do this? Wouldn't his lawyers tell him 0:16:41.000 --> 0:16:45.240 not to? His parents are lawyers, right? So Andrew did 0:16:45.320 --> 0:16:48.800 ask him at one point, dear lawyers know you're doing this. 0:16:48.880 --> 0:16:51.360 What do they say? And Sam said something like they 0:16:51.480 --> 0:16:53.320 very much are not on board with me doing this. 0:16:53.920 --> 0:16:56.160 And again, who knows if that's true or false. It 0:16:56.200 --> 0:16:58.400 does seem to be a bit of an image. The 0:16:58.560 --> 0:17:00.440 lawyer in the world will be okay with even a 0:17:00.440 --> 0:17:03.120 bad lawyer, but his parents are like Stanford professor, good lawyer. 0:17:03.240 --> 0:17:05.800 It's it's hard, it's hard. It's really hard to fathom 0:17:05.840 --> 0:17:07.920 why they would why they would let him get out 0:17:07.960 --> 0:17:11.280 there on the record. Um. To your point about the 0:17:11.320 --> 0:17:15.680 freewheeling culture that they had in the Bahamas, Andrew did 0:17:15.800 --> 0:17:20.080 ask him about that, and Sam insisted again use all 0:17:20.119 --> 0:17:22.399 the grains of salt you like with us, he said, 0:17:22.840 --> 0:17:25.360 the only drug use we had was prescription drug use. 0:17:25.440 --> 0:17:29.199 I use drugs like you know, medication for focus and 0:17:29.240 --> 0:17:32.199 things like that. But but there wasn't any crazy partying. 0:17:32.200 --> 0:17:35.000 All we did was like playboard games when we partied. 0:17:35.200 --> 0:17:37.400 So that was a funny moment. And again I think 0:17:37.440 --> 0:17:40.320 you kind of have to raise an eyebrow. So you know, 0:17:40.359 --> 0:17:43.600 it's been several weeks here and we're talking billions, maybe 0:17:43.600 --> 0:17:47.520 tens of billions of dollars here, uh, and customer losses. 0:17:48.720 --> 0:17:53.359 What's the next step from a legal perspective of a 0:17:53.480 --> 0:17:55.760 police perspective. I mean, he's just sitting down there in 0:17:55.760 --> 0:17:58.080 the Bahamas. I want to know if anyone's gonna go 0:17:58.080 --> 0:18:02.159 down there and grab him right, good question. Either the 0:18:02.280 --> 0:18:06.080 d O J or Russian mafia, yeah, or an angry customer. 0:18:06.160 --> 0:18:09.040 I mean it's it's hard to know what could happen, Um. 0:18:09.600 --> 0:18:12.879 But there was an emotional moment in the interview where 0:18:13.560 --> 0:18:17.359 um Andrew read out a message that user of f 0:18:17.480 --> 0:18:20.920 t X had sent to him, basically asking like ask Sam, 0:18:20.920 --> 0:18:23.360 like where did my money go? Like? I trusted him 0:18:23.480 --> 0:18:26.240 and he betrayed my trust as he betrayed the trust 0:18:26.240 --> 0:18:30.240 of so many people. And it's a hundred percent true that. 0:18:30.560 --> 0:18:33.080 I think people who loaded money onto that platform and 0:18:33.119 --> 0:18:38.680 believed him are absolutely reeling over the scale the magnitude 0:18:38.920 --> 0:18:41.639 of the losses that they probably incurred, because it doesn't 0:18:41.680 --> 0:18:45.000 look very good um that that you'll see that very 0:18:45.080 --> 0:18:47.200 much money recovered at all in this bankruptcy. It's pretty 0:18:47.200 --> 0:18:51.560 clear where the money went, right. Alameda borrowed all the 0:18:51.600 --> 0:18:55.600 money from f t X, gave f t X worthless collateral, 0:18:56.600 --> 0:18:59.880 then lost all the money, and the collateral is now 0:19:00.000 --> 0:19:02.560 worth nothing. That's right. The problem really comes back to 0:19:02.600 --> 0:19:04.359 being able to There are a lot of problems, but 0:19:04.440 --> 0:19:07.399 one of them is that, uh, the that ability to 0:19:07.480 --> 0:19:13.159 borrow endlessly um, you know, real real dollars and like 0:19:13.280 --> 0:19:18.000 real value against um invented tokens that are just conjured 0:19:18.000 --> 0:19:20.240 out of thin air UM. And then and then the 0:19:20.280 --> 0:19:23.480 privileges that Alamide absolutely had UM that were specific to 0:19:23.480 --> 0:19:28.240 Alamade on f t X UM and and obscured to 0:19:28.280 --> 0:19:30.280 the rest of them. It's amazing that Sam Bankman freed 0:19:30.359 --> 0:19:34.320 this super genius from m I T had such um 0:19:34.359 --> 0:19:38.879 an inability to remember exact numbers, right, He's like, yeah, 0:19:38.920 --> 0:19:41.159 we had like a hundred million of margin. Maybe it 0:19:41.200 --> 0:19:43.720 was two hundred million. Your investments in Sequoia, what was 0:19:43.800 --> 0:19:46.320 like a couple hundred million? I think I can't remember. 0:19:46.400 --> 0:19:49.560 Like he didn't know even ballpark figures closest to the 0:19:49.560 --> 0:19:53.959 nearest million, right, or he didn't want to show that 0:19:54.000 --> 0:19:57.600 he knew. It's it's really hard to get him inside 0:19:57.640 --> 0:20:00.280 his head, but he does a lot of that, just 0:20:00.760 --> 0:20:05.600 pulling estimates out of the air um and it can 0:20:05.680 --> 0:20:07.360 be hard to I still don't know what the reckoning 0:20:07.440 --> 0:20:12.160 is here. I mean, I don't think it doesn't look 0:20:12.160 --> 0:20:14.480 good for I mean it doesn't look I think that 0:20:14.640 --> 0:20:18.520 one thing is like it looks horrible for US regulators 0:20:18.560 --> 0:20:20.760 to an extent that this kind of went on as 0:20:20.800 --> 0:20:23.280 long as it did so. I mean there's a lot 0:20:23.320 --> 0:20:26.360 of talk about, certainly from angry customers. There's a lot 0:20:26.400 --> 0:20:29.199 of talk like we want to see SPF and his 0:20:29.280 --> 0:20:31.480 cronies in jail. I don't know this is at the 0:20:31.520 --> 0:20:34.480 early stages. I think of a long, longer play here 0:20:34.520 --> 0:20:37.280 in any Messa and her reporting colleagues will continue to 0:20:37.280 --> 0:20:39.200 report on that. For us, we appreciate that any massa 0:20:39.280 --> 0:20:44.680 investing reporter. What I've got a Barry rid Hults. He's 0:20:44.680 --> 0:20:47.640 the founder of rid Hult's Wealth Management host of Masters 0:20:47.720 --> 0:20:51.240 in Business, Barry, we love talking to you about markets, 0:20:51.280 --> 0:20:53.240 but i'd love to just I'm not sure if you 0:20:53.280 --> 0:20:55.480 saw Sam Bankman freed yesterday, but if you did, I'd 0:20:55.480 --> 0:20:58.000 love to get your thoughts because that was certainly unique 0:20:58.040 --> 0:21:01.960 theater for those in the markets. He's a professional liar, 0:21:02.040 --> 0:21:07.600 and as a somebody who evaluates um ambiguous information constantly, 0:21:07.640 --> 0:21:11.600 I found it tremendously useful to just avoid listening to 0:21:11.680 --> 0:21:15.920 people with that sort of history. Uh. You know, this 0:21:16.000 --> 0:21:19.560 looked really negative for crypto for a while, but the 0:21:19.600 --> 0:21:23.119 parallels are burning made off. This guy is just a thief. 0:21:23.840 --> 0:21:27.760