WEBVTT - Bloomberg Businessweek Weekend - April 19th, 2024 0:00:02.440 --> 0:00:10.600 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business 0:00:10.600 --> 0:00:13.840 Week inside from the reporters and editors who bring you 0:00:13.880 --> 0:00:18.240 America's most trusted business magazine, plus global business, finance and 0:00:18.280 --> 0:00:22.759 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:22.920 --> 0:00:25.720 and Tim Stenebeck from Bloomberg Radio. 0:00:26.640 --> 0:00:29.400 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:29.720 --> 0:00:31.800 This was supposed to be the year that US inflation 0:00:31.880 --> 0:00:34.680 wrote the last mile down to two percent, letting the 0:00:34.680 --> 0:00:38.400 federal reserves steadily reduce interest rates from a two decade high. 0:00:38.760 --> 0:00:41.120 Now those expectations have been dashed this past week. 0:00:41.159 --> 0:00:41.640 Fetcher J. 0:00:41.840 --> 0:00:46.200 Powell said, persistent inflation means borrowing costs will stay elevated 0:00:46.240 --> 0:00:49.240 for longer than previously thought. That's a shift in tone 0:00:49.240 --> 0:00:51.920 with ramifications for policy around the world. 0:00:52.240 --> 0:00:55.560 This is the International Monetary Fund held its Spring meetings 0:00:55.560 --> 0:00:58.560 this past week in DC and inter deep expectations for 0:00:58.560 --> 0:01:02.440 global economic growth this year, and yet remained cautious amid 0:01:02.480 --> 0:01:05.640 persistent inflation and of course, geopolitical risk. 0:01:05.840 --> 0:01:07.840 With that in mind, we got our own take on 0:01:07.880 --> 0:01:10.600 the economy through the lens of the trucking industry as 0:01:10.640 --> 0:01:13.520 well as from the US CEO at DHL Express. 0:01:13.680 --> 0:01:16.319 That's straight ahead, as is the bitcoin having on that 0:01:16.520 --> 0:01:19.200 two voices from the crypto world, the CEO of Core 0:01:19.319 --> 0:01:22.480 Scientific on the business of bitcoin mining, and the president 0:01:22.480 --> 0:01:26.360 of Ava Labs on blockchain that could really, really, finally, 0:01:26.640 --> 0:01:32.480 maybe figures have some really use cases DMV anyone, Oh. 0:01:32.400 --> 0:01:34.680 God, that would be sweet. Plus one of the most 0:01:34.680 --> 0:01:37.960 read stories on the Bloomberg this week, sextortion scams on 0:01:38.000 --> 0:01:40.800 social media. If you don't know what we're talking about, 0:01:40.840 --> 0:01:43.000 and you have teens at home, you should. 0:01:42.760 --> 0:01:44.679 All of that to come. We begin, though, with something 0:01:44.680 --> 0:01:48.200 that is a great indicator of economic health, transportation, and 0:01:48.240 --> 0:01:50.840 this week we caught up with two voices in the space. 0:01:51.200 --> 0:01:53.240 Our first one came on the heels of earnings from 0:01:53.400 --> 0:01:57.360 truck giant JB. Hunt, chairs of the company, sank dragging 0:01:57.400 --> 0:02:01.360 down transports as the trucker's disappointing results and tepid demand 0:02:01.480 --> 0:02:03.720 sent a warning signal across the sector. 0:02:03.880 --> 0:02:06.240 Our own warning and insight on the sector came from 0:02:06.320 --> 0:02:09.919 Melissa Foreman and president at Triumph Pay, a payment platform 0:02:09.960 --> 0:02:13.000 that connects brokers, shippers, and carriers. It's a division of 0:02:13.080 --> 0:02:16.880 TBK Bank and part of the publicly traded Triumph Financial, 0:02:16.919 --> 0:02:19.760 which has about a one point seven billion dollar market cap. 0:02:20.120 --> 0:02:23.640 It is a rough freight marketplace right now, and the 0:02:23.680 --> 0:02:27.000 recession is real, and it's just you know, when you 0:02:27.040 --> 0:02:29.440 look at Q one, it was one of the softest 0:02:29.440 --> 0:02:32.360 ones we've seen, you know, some of the normal seasonality. 0:02:32.480 --> 0:02:35.040 Feels like it had come back and then dropped away again. So, 0:02:35.600 --> 0:02:38.520 you know, it's really hard to predict and project what's happening. 0:02:38.600 --> 0:02:41.720 It just knowing that this recession has been lingering for 0:02:41.760 --> 0:02:43.440 as long as it has. I think we're in what 0:02:43.520 --> 0:02:46.000 month twenty four, twenty five of it. 0:02:46.000 --> 0:02:47.320 It's just rough on everybody. 0:02:47.800 --> 0:02:49.920 When you say recession, are you talking about a trucking 0:02:49.960 --> 0:02:52.919 recession or economy wide recession? 0:02:53.320 --> 0:02:54.480 Yeah, freight recession. 0:02:54.560 --> 0:02:55.280 Freight recession. 0:02:55.320 --> 0:02:57.040 Okay, what does that mean? Is there just too much 0:02:57.080 --> 0:02:58.640 competition out there? I mean that was some of the 0:02:58.680 --> 0:03:00.840 concerns going into the j be Hut numbers. 0:03:01.840 --> 0:03:02.080 Yeah. 0:03:02.080 --> 0:03:04.640 I think that what is happening right now is you 0:03:04.800 --> 0:03:08.480 just have a gluttony of capacity in the marketplace. And 0:03:08.560 --> 0:03:12.000 so with all that capacity, these carriers trying to hold 0:03:12.040 --> 0:03:14.440 on and survive till twenty five, I think is the 0:03:14.480 --> 0:03:18.160 mantra it you know, they're just there's too much capacity 0:03:18.200 --> 0:03:21.240 in order to make the rates competitive and profitable for 0:03:21.280 --> 0:03:24.760 them to operate. So that's depressing the average invoice price, 0:03:24.760 --> 0:03:27.080 which makes it rough on everybody in the industry. 0:03:27.240 --> 0:03:29.280 Is that just left over from the pandemic? Is that 0:03:29.320 --> 0:03:30.040 what this is about? 0:03:30.120 --> 0:03:30.280 Or what? 0:03:32.040 --> 0:03:33.200 It's really hard to tell. 0:03:33.280 --> 0:03:36.600 You know, certainly, at the peak of the pandemic, we had, 0:03:36.720 --> 0:03:40.480 you know, some of the best times in transportation, and 0:03:40.520 --> 0:03:43.160 then there was this this level in a reset of 0:03:43.240 --> 0:03:45.160 what is the new norm? And I just I don't 0:03:45.160 --> 0:03:46.800 think we'd figured out what that is yet. 0:03:47.880 --> 0:03:49.320 Okay, So I was just going to ask the same 0:03:49.360 --> 0:03:51.520 thing that Carol just asked, which is, you know, is 0:03:51.560 --> 0:03:54.840 it just that we bought everything we needed during the pandemic. 0:03:54.920 --> 0:03:57.320 We don't need any more couches? Yeah, but it's hard 0:03:57.320 --> 0:03:59.440 to see that two years out from rails or even 0:03:59.480 --> 0:04:03.200 to our thronder years or dogs or is it or 0:04:03.280 --> 0:04:06.560 or has our spending shifted to services? 0:04:07.760 --> 0:04:09.080 I think it's a little bit of both. 0:04:09.320 --> 0:04:11.840 You know, we all certainly spent a lot of a 0:04:11.840 --> 0:04:15.040 lot of money on products during the pandemic because services 0:04:15.040 --> 0:04:18.039 weren't an option, and there was also you know, some 0:04:18.160 --> 0:04:22.400 misbalances in inventories, and what I think we're hearing in 0:04:22.440 --> 0:04:25.920 the market more recently is some of the inventory restocking 0:04:26.040 --> 0:04:27.000 is starting to happen. 0:04:27.040 --> 0:04:28.200 So that is a good sign. 0:04:29.120 --> 0:04:32.400 But certainly services I think have taken a higher priority, 0:04:32.520 --> 0:04:34.440 just you know, as people have kind of gotten back 0:04:34.440 --> 0:04:37.040 out into the world. You were talking about business travel 0:04:37.320 --> 0:04:41.799 as an example earlier in your segment on how that's 0:04:41.880 --> 0:04:44.440 up right, So travel, I think across the board seems 0:04:44.480 --> 0:04:46.000 to be up. I know the planes are full when 0:04:46.040 --> 0:04:49.680 I'm on them, and so the services and experiences I 0:04:49.680 --> 0:04:51.640 think are still taking a higher precedent. 0:04:51.760 --> 0:04:55.080 Well, so what can you tell us about route differentials 0:04:55.360 --> 0:04:57.359 in the trucking industry, because I do wonder if there 0:04:57.360 --> 0:05:00.200 are certain routes where they are getting the rates and 0:05:00.320 --> 0:05:03.800 certain where they're not. What can you tell us about that. 0:05:04.680 --> 0:05:06.920 Yeah, I would say I'm not an expert on specific 0:05:07.000 --> 0:05:10.600 lanes or commodities, but I do know where carriers have 0:05:10.760 --> 0:05:14.440 the buying power and the density they're able to still 0:05:14.720 --> 0:05:19.160 negotiate the longer term contracts, and so you know, that's 0:05:19.320 --> 0:05:23.159 certainly a place to focus and where you can garner 0:05:23.560 --> 0:05:27.120 the rates that make sense for you to be profitable. 0:05:28.520 --> 0:05:30.200 So I want to talk a little bit cross border, 0:05:30.320 --> 0:05:32.240 because you guys have some news when it comes to 0:05:32.520 --> 0:05:35.400 what's going on in Mexico. And what's so interesting is is, Carol, 0:05:35.400 --> 0:05:37.080 we've talked about this quite a bit over the last 0:05:37.080 --> 0:05:41.080 few months. The idea interesting exactly. You know, I don't 0:05:41.120 --> 0:05:43.440 necessarily want to suspect I think we can't. To a 0:05:43.480 --> 0:05:45.320 certain extent, we can call it near shoring. To a 0:05:45.360 --> 0:05:48.320 certain extent, we can call it, you know, a return 0:05:48.400 --> 0:05:50.679 to what happened during the nineties in the United States 0:05:50.760 --> 0:05:53.479 before we saw a lot of manufacturing move to China 0:05:53.560 --> 0:05:58.520 and other parts of the when AFT one exactly, and 0:05:58.560 --> 0:06:00.960 I want so so Melissa, tell exactly what's going on 0:06:01.000 --> 0:06:03.440 when it comes to what's happening with cross border right now. 0:06:04.440 --> 0:06:06.839 Yeah, I think, as you mentioned, like, we're seeing a 0:06:06.839 --> 0:06:10.360 lot more manufacturing go back to Mexico. And as you said, 0:06:10.360 --> 0:06:12.159 it was there back in the times of NAFTA. 0:06:12.160 --> 0:06:12.760 I remember that. 0:06:13.720 --> 0:06:16.560 Very well and all of the business that was going 0:06:16.600 --> 0:06:19.039 across the border, and we're there again, and there's so 0:06:19.120 --> 0:06:22.880 much opportunity to be able to help support transportation specifically 0:06:23.279 --> 0:06:26.680 in that space. We have you know, carriers at our 0:06:26.680 --> 0:06:29.000 clients and brokers at our clients that are have set 0:06:29.080 --> 0:06:31.400 up shop on both sides of the border and just 0:06:31.480 --> 0:06:36.360 trying to take advantage and leverage the efficiencies that that 0:06:36.360 --> 0:06:39.480 that brings them and the you know, efficiency gains and 0:06:39.800 --> 0:06:44.320 costs and in time, yeah, go ahead, say to do that, 0:06:44.320 --> 0:06:46.360 though you have to also be able to make payments 0:06:47.240 --> 0:06:50.960 to those carriers in preferably the currency that they prefer. 0:06:51.040 --> 0:06:53.440 And it's it's really hard right now. There's there's not 0:06:53.520 --> 0:06:56.679 a lot of density and being able to do Mexican 0:06:56.720 --> 0:07:00.360 pays payments too small carriers in the space, and so 0:07:00.440 --> 0:07:04.120 we saw this as an opportunity to one support and 0:07:04.400 --> 0:07:06.359 kind of get ahead of where the growth is going 0:07:07.200 --> 0:07:11.320 for cross border operations, but also to meet our customers 0:07:11.360 --> 0:07:13.120 where they need us to, and that's to be able 0:07:13.160 --> 0:07:13.640 to pay. 0:07:13.480 --> 0:07:16.040 Their carriers in the currencies they prefer. 0:07:16.600 --> 0:07:19.880 With the dollar softening a little as compared to pesos, 0:07:20.320 --> 0:07:23.480 more and more cares have been asking our clients to 0:07:23.520 --> 0:07:26.360 be paid in Mexican peso and they didn't have the 0:07:26.360 --> 0:07:28.920 opportunity to do that before. So it was you know, 0:07:28.960 --> 0:07:31.920 causing some capacity issues for them and curry relationship issues. 0:07:32.120 --> 0:07:33.560 So we wanted to break that market. 0:07:33.680 --> 0:07:35.400 Carol, you might remember the big take that we did 0:07:35.400 --> 0:07:41.480 back in September, all about how Mexico has passed China 0:07:41.560 --> 0:07:45.480 to become the U the largest US trading partner. Happened 0:07:45.520 --> 0:07:48.640 back in twenty twenty three. Pretty well. Now, well, well, Teresa, 0:07:48.720 --> 0:07:50.760 is the question most of why, why is this something 0:07:50.760 --> 0:07:52.720 that you were only able to do just now? You know, 0:07:52.760 --> 0:07:55.360 if there has been so much going to Mexico, why 0:07:55.360 --> 0:07:56.960 were you able to do this years ago? 0:07:58.200 --> 0:07:59.800 Yeah, It's it's complex. 0:08:00.080 --> 0:08:02.360 We've been building out our payments network for the last 0:08:02.400 --> 0:08:05.400 several years and expanding into multiple currencies. You know, we 0:08:05.480 --> 0:08:09.520 started with you know, the US dollar, moved into Canadian 0:08:09.560 --> 0:08:11.320 dollars as our clients asked for that. 0:08:11.760 --> 0:08:13.760 Now we're getting asked for Mexican pesos. 0:08:14.480 --> 0:08:18.320 But the regulatory and compliance components of what goes into 0:08:18.320 --> 0:08:22.480 that is pretty complex. And so we started this effort, 0:08:22.760 --> 0:08:24.720 you know, at the beginning of last year, and it 0:08:24.800 --> 0:08:26.840 just takes time to get it done and to do 0:08:26.880 --> 0:08:30.280 it well. And so that's why we're we're launching when 0:08:30.320 --> 0:08:32.439 we are. It's just the effort that goes into it. 0:08:32.679 --> 0:08:37.200 We anticipate being able to move and releasing European and 0:08:37.240 --> 0:08:40.000 Asian payments towards the later part of this year as well. 0:08:40.160 --> 0:08:42.080 How much has this business picked up since you guys 0:08:42.120 --> 0:08:42.680 have started. 0:08:44.040 --> 0:08:46.960 You know, we are not executing payments yet, okay, So 0:08:47.240 --> 0:08:50.000 we expect to have the ability to support that for 0:08:50.040 --> 0:08:52.280 our customers by the end of Q two, so the 0:08:52.360 --> 0:08:54.920 end of this quarter, and then work with them and 0:08:54.920 --> 0:08:58.720 their integrations with their TMSs and accounting systems to turn 0:08:58.760 --> 0:09:01.760 it live. So we haven't, but when we're talking to 0:09:01.840 --> 0:09:05.920 our clients, what we're hearing from them is about on average, 0:09:05.960 --> 0:09:08.960 five percent of their business is now being done in 0:09:09.000 --> 0:09:12.280 Mexico and they're having to turn business away because they 0:09:12.280 --> 0:09:15.960 don't have a good payment option. And so our hope 0:09:16.040 --> 0:09:18.920 is that, in our expectation is that as we launch 0:09:18.960 --> 0:09:22.240 these new capabilities, it's going to give our customers the 0:09:22.240 --> 0:09:24.520 competitive advantage to be able to move into those markets. 0:09:24.559 --> 0:09:27.240 More deeply, are these truckers, these drivers making the same 0:09:27.280 --> 0:09:29.360 kind of money that other drivers are making. 0:09:31.520 --> 0:09:32.760 I don't have an answer to that. 0:09:32.920 --> 0:09:36.360 I'm just curious. I'm curious if you yeah, sorry, I'm not. 0:09:36.640 --> 0:09:38.440 We love picking your brain because you do know so 0:09:38.520 --> 0:09:40.480 much about this industry, So forgive me. 0:09:40.880 --> 0:09:43.960 I've thought about the average Well, what's. 0:09:43.800 --> 0:09:45.800 The platform goes up like you're probably going to have 0:09:45.840 --> 0:09:47.960 a lot more information, but it is fascinating because I 0:09:47.960 --> 0:09:51.520 am curious about the level of activity and the dynamics 0:09:51.520 --> 0:09:55.520 of that market in particular, so really interesting stuff. Promise 0:09:55.559 --> 0:09:57.920 you'll come back once the platforms up and running and 0:09:57.960 --> 0:09:59.920 we can kind of dig a little bit more into 0:10:00.000 --> 0:10:02.720 what you guys are seeing. Always appreciate it. Such a 0:10:02.760 --> 0:10:05.560 timely interview. We're telling our producer, this is the perfect 0:10:05.640 --> 0:10:08.600 interview to have after we were talking about Jbehund, just 0:10:08.640 --> 0:10:10.880 to get your perspective and what you see, all right. 0:10:11.040 --> 0:10:13.439 Also, I just want to say shout out to Melissa 0:10:13.480 --> 0:10:17.480 Foreman's tech team or whoever set up this shot. You know, 0:10:17.679 --> 0:10:20.760 Melissa herself. She's got a microphone on. It looks like 0:10:20.760 --> 0:10:24.000 she's in a studio. It's like perfectly lit. I mean, 0:10:24.600 --> 0:10:26.400 I you know, it's like we take like three or 0:10:26.440 --> 0:10:27.480 four people to the shot. 0:10:27.920 --> 0:10:31.520 Everybody who comes on our air. Yeah, please FTA wondering 0:10:32.240 --> 0:10:36.480 Melissa Foreman be Well TALKSI and President of Triumphey in Dallas. 0:10:38.920 --> 0:10:42.439 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:42.480 --> 0:10:45.720 live weekday afternoons from two to five pm Eastern. Listen 0:10:45.760 --> 0:10:47.920 on Apple car Play and then brout Auto with a 0:10:47.920 --> 0:10:50.920 Bloomberg Business act or watch us live on YouTube. 0:10:51.800 --> 0:10:55.120 Well, we love talking shipping and logistics. After all, understanding 0:10:55.120 --> 0:10:57.440 who's shipping where and how much they're shipping is key 0:10:57.480 --> 0:11:00.640 to understanding trade and the global economy. Next guest has 0:11:00.640 --> 0:11:03.000 a great read into that. Greg Hewitt is a CEO 0:11:03.080 --> 0:11:06.240 at DHL Express US. It's a segment of Deutsche Post 0:11:06.360 --> 0:11:08.920 DHL Group, one of the biggest private employers in the world. 0:11:09.120 --> 0:11:11.520 I've got more than a five hundred and fifty thousand employees, 0:11:11.679 --> 0:11:14.760 revenues more than eighty seven billion dollars just last year. 0:11:15.120 --> 0:11:18.360 Greg's here in the Bloomberg Interactive Broker's studio. 0:11:18.520 --> 0:11:20.160 So great to have you here. We do, Tim and 0:11:20.200 --> 0:11:22.840 I love talking to anybody and everybody who's involved in 0:11:22.840 --> 0:11:25.719 transportation because it does feel like you guys do have 0:11:25.760 --> 0:11:29.040 some great insight into what's going on in the economy. Welcome, Welcome, 0:11:29.120 --> 0:11:29.920 Nice to have you here. 0:11:30.000 --> 0:11:31.920 Thank you so much for the invite, My pleasure to 0:11:31.920 --> 0:11:32.280 be here. 0:11:32.360 --> 0:11:32.840 So tell us a. 0:11:32.800 --> 0:11:34.560 Little bit about the environment, what you're seeing and the 0:11:34.640 --> 0:11:36.520 level of activity and how it compares from the last 0:11:36.600 --> 0:11:39.400 six months from twelve months. I mean, I'm not quite 0:11:39.440 --> 0:11:42.240 sure with the pandemic still if we're still thinking about 0:11:42.240 --> 0:11:44.559 pre pandemic levels. But what do you see I. 0:11:44.520 --> 0:11:48.160 Think I've seen To start the year, we felt it 0:11:48.240 --> 0:11:50.480 was going to maybe be a little bit stronger, a 0:11:50.480 --> 0:11:53.800 little bit more growth. We're coming off of post pandemic, 0:11:54.120 --> 0:11:56.760 a bit of a downturn. What we saw was e 0:11:56.800 --> 0:12:02.120 commerce was kind of fueling any growth that traditional segments automotive, 0:12:02.200 --> 0:12:05.640 engineering and manufacturing, high tech. We're still a little bit lower, 0:12:05.920 --> 0:12:09.120 maybe having last year a little bit too much inventory, 0:12:09.280 --> 0:12:11.400 trying to cycle that out. We went into the year 0:12:11.440 --> 0:12:16.040 with optimism, thinking we closed last year stronger, maybe it 0:12:16.080 --> 0:12:18.760 was going to grow. Haven't quite seen that in first quarter, 0:12:18.880 --> 0:12:21.440 seeing it a little bit softer than we thought. But 0:12:21.520 --> 0:12:25.199 everybody's optimistic. A lot of people are talking about peak 0:12:25.280 --> 0:12:28.040 season this year, which in airin ocean will come in 0:12:28.080 --> 0:12:30.600 the summer. For me an Express, it'll come kind of 0:12:30.960 --> 0:12:34.160 us Thanksgiving to end of year. People are optimistic that 0:12:34.559 --> 0:12:36.880 volume will grow and things are recovering. 0:12:37.080 --> 0:12:39.200 Okay, you mentioned Aaron Ocean, so I wanted to start 0:12:39.400 --> 0:12:42.760 with ocean. Are you seeing any increase or is DHL 0:12:42.840 --> 0:12:45.440 seeing any increase in demand from the ships that are 0:12:45.520 --> 0:12:48.160 avoiding the Suez canal. How's that playing out for you? 0:12:48.280 --> 0:12:50.360 I think a little less than I thought, quite honestly. 0:12:50.480 --> 0:12:54.320 My segment. Usually when there are pinch points in any 0:12:54.320 --> 0:12:57.560 one of the sectors, like the ocean transport, maybe people 0:12:57.600 --> 0:13:01.120 move things over to a fixed network ours and express. 0:13:01.360 --> 0:13:04.080 I haven't really seen that lift yet. I think companies 0:13:04.120 --> 0:13:07.480 are still being patient. They still have time before the 0:13:07.520 --> 0:13:11.559 peak to allow things to work themselves through, or we'll 0:13:11.600 --> 0:13:14.240 probably see it would be more towards the summer, or 0:13:14.280 --> 0:13:17.480 for me, a fall season if there continues to be 0:13:17.600 --> 0:13:20.280 challenges with the supply chain, that's when things start to 0:13:20.320 --> 0:13:23.120 convert over to air and we'd see a lift in cargo. 0:13:23.280 --> 0:13:23.480 Great. 0:13:23.520 --> 0:13:25.160 What's the most challenging part of your business right now? 0:13:25.160 --> 0:13:27.640 I means certainly something we talk about as higher energy prices, 0:13:27.720 --> 0:13:29.679 right and we've pulled back a little bit off of 0:13:30.120 --> 0:13:32.200 kind of the activity over the weekend in the Middle East. 0:13:32.200 --> 0:13:34.559 But I am curious if that's starting to bite into 0:13:34.600 --> 0:13:36.800 some of your costs or raise that cost equation. 0:13:37.080 --> 0:13:40.400 From my perspective, still, my biggest challenge is dealing with 0:13:40.440 --> 0:13:44.440 the inflationary pressures that go with rising wage rates here 0:13:44.480 --> 0:13:47.160 in the US and the need to compensate my team 0:13:47.559 --> 0:13:50.680 to who are skilled workers to keep the front lines happy. 0:13:50.679 --> 0:13:54.400 That's probably still my biggest versus anything globally that's putting 0:13:54.679 --> 0:13:55.200 pressure on. 0:13:55.480 --> 0:13:57.880 That's interesting to hear. Where is that pinch point? The 0:13:57.920 --> 0:14:03.680 biggest is that with people in warehouses, people actually doing 0:14:03.679 --> 0:14:06.040 the driving, doing the deliveries, and you're talking, you're not 0:14:06.080 --> 0:14:07.360 talking back office folks. 0:14:07.360 --> 0:14:09.600 Now, it would be more frontline of finding the skilled 0:14:09.679 --> 0:14:12.560 labor for couriers and termost journal handling stuff. 0:14:12.640 --> 0:14:14.880 I mean, who's your competition there is it is Amazon 0:14:14.960 --> 0:14:16.960 around the country that's just driving up wages. 0:14:17.080 --> 0:14:18.880 I don't know if I would say that it's anybody 0:14:18.920 --> 0:14:21.400 that's driving it up. I think in general you've heard 0:14:21.440 --> 0:14:24.320 coming through the pandemic, every wage is whether it was 0:14:24.320 --> 0:14:27.840 at a dunkin donuts to well a caurreer, everything goes up. 0:14:27.920 --> 0:14:30.200 We talk about California's minimum wage all the time, up 0:14:30.240 --> 0:14:32.040 to twenty dollars an hour at this time, and we 0:14:32.120 --> 0:14:32.400 have to. 0:14:32.360 --> 0:14:34.960 Respond to that and make sure that anywhere where we're 0:14:35.000 --> 0:14:37.920 employing people, not only are we at the minimum wage, 0:14:37.920 --> 0:14:40.040 but generally because it's skilled labor, we've got to be 0:14:40.040 --> 0:14:40.680 a bit above that. 0:14:40.840 --> 0:14:42.600 Well, one thing, you know, and this is something we 0:14:42.640 --> 0:14:45.400 talk about when we focus a lot on inflation generally 0:14:45.800 --> 0:14:47.760 here in the United States. And we're having a conversation 0:14:47.880 --> 0:14:51.560 earlier with one of our analysts who watches the rate environment, 0:14:51.600 --> 0:14:53.800 and it's kind of debate about whether or not this 0:14:53.920 --> 0:14:55.920 idea of the FED getting back to two percent inflation, 0:14:55.960 --> 0:14:59.600 whether it makes sense anymore, because there does seem like 0:14:59.640 --> 0:15:03.520 the work that there's just not enough workers that people need, 0:15:03.560 --> 0:15:06.600 and that maybe a higher wage is something not just 0:15:06.760 --> 0:15:10.320 short term or until the next wage cycle, but something 0:15:10.360 --> 0:15:12.960 longer built into kind of our economic model. Do you 0:15:13.000 --> 0:15:15.880 agree with that or what's your thinking about wages longer term? 0:15:16.080 --> 0:15:18.360 I think from my standpoint, what I'm not seeing is 0:15:18.480 --> 0:15:20.800 wages don't go down once they go up, they tend 0:15:20.800 --> 0:15:23.520 to hold and grow from that. What we've seen is 0:15:24.000 --> 0:15:27.320 lower levels of turnover. So we've got stability in the 0:15:27.360 --> 0:15:30.040 workforce that have gone with the higher wages. So I 0:15:30.040 --> 0:15:32.200 think that's a good thing. Now we've got to drive 0:15:32.240 --> 0:15:34.720 productivity in order to make sure that we've got this 0:15:34.800 --> 0:15:35.600 share holder return. 0:15:36.080 --> 0:15:40.040 So Carol, this was Carol's idea. She's like, we got 0:15:40.040 --> 0:15:42.600 to talk drones here, and I'm thinking to myself, Okay. 0:15:42.360 --> 0:15:43.920 Well, is make it more productive. 0:15:44.480 --> 0:15:46.360 I'm thinking to myself, Okay, well, if the folks on 0:15:46.400 --> 0:15:48.640 the front lines are the ones who are driving up wages, 0:15:48.760 --> 0:15:52.680 I'm wondering how dhl's experimenting with drones drone delivery, and 0:15:52.720 --> 0:15:55.360 if that is actually something that's realistic in terms of 0:15:56.480 --> 0:16:01.000 supplanting or replacing at any point certain men's who are 0:16:01.280 --> 0:16:02.120 doing the delivering. 0:16:02.240 --> 0:16:05.040 From my perspective, it hasn't. It's not going to supplant 0:16:05.520 --> 0:16:08.120 humans doing the delivering. In fact, we've used I don't 0:16:08.120 --> 0:16:10.440 see it. I think the reality is there there are 0:16:10.640 --> 0:16:14.880 challenges around having autonomous vehicles in the air and airspace. 0:16:15.320 --> 0:16:18.280 We have used it in some remote locations to deliver 0:16:18.680 --> 0:16:21.280 medicine and such. I think we're still going to need 0:16:21.400 --> 0:16:26.080 people delivering packages, but with the advantage of automation in 0:16:26.160 --> 0:16:29.200 terms of software that helps with rooting, helps make sure 0:16:29.200 --> 0:16:31.880 they can be efficient and effective. Those are the things 0:16:31.880 --> 0:16:33.320 that I see in the near term as more of 0:16:33.360 --> 0:16:33.760 an impact. 0:16:33.800 --> 0:16:35.120 I got to say, and forgive me, I'm going to 0:16:35.120 --> 0:16:37.600 talk about, you know, the competition, but ups one of 0:16:37.600 --> 0:16:39.760 the things after spending this is a few years back, 0:16:39.800 --> 0:16:41.400 but spending a day with a delivery man, I mean 0:16:41.440 --> 0:16:44.520 they that's exactly. It's all technology and this whole idea 0:16:44.560 --> 0:16:46.680 of a kidd in with these You know, with our team, 0:16:46.880 --> 0:16:48.600 you don't make left turn to make right turns because 0:16:48.600 --> 0:16:52.840 you don't want a truck or driver spending seconds minutes 0:16:53.040 --> 0:16:56.160 at an intersection. So things like this do add up. 0:16:56.440 --> 0:16:59.520 They absolutely do. And so our biggest investments in technology 0:16:59.560 --> 0:17:03.200 in the last few years would be around routing software 0:17:03.240 --> 0:17:07.479 and station optimization, and now with international optimization would be 0:17:07.560 --> 0:17:10.919 what's the optimal amount of courier, roots and personnel that 0:17:11.000 --> 0:17:13.480 you'd have in a station based on big data, the 0:17:13.560 --> 0:17:17.280 data that tells you what's coming in. How do you 0:17:17.280 --> 0:17:21.200 allocate that most effectively and put into that With global 0:17:21.240 --> 0:17:25.280 trade clearance, customs clearance, that's probably the next area we're 0:17:25.320 --> 0:17:28.399 investing evily in because we need to do that more efficiently, 0:17:28.760 --> 0:17:30.680 more effectively, more streamlined. 0:17:30.720 --> 0:17:32.080 Well, can I ask you what happens there? 0:17:32.200 --> 0:17:32.240 Is? 0:17:32.280 --> 0:17:33.120 It just takes long. 0:17:33.400 --> 0:17:35.680 If you had to do if you have to clear 0:17:35.720 --> 0:17:38.960 something formally, you've got an entry writer who has to 0:17:38.960 --> 0:17:42.080 go through the harmonized tax codes making sure all of 0:17:42.080 --> 0:17:45.439 the information is available for customs to clear it effectively 0:17:45.640 --> 0:17:47.840 and for the duties and taxes to be assigned. It 0:17:47.840 --> 0:17:49.760 can be a bit of a manual process. So doing 0:17:49.800 --> 0:17:53.360 things with automation that makes it more accurate, more efficient, 0:17:53.640 --> 0:17:56.520 more effective as part of our customs clearance experience. 0:17:56.880 --> 0:17:59.639 How's air capacity? Looking at the company right now? Do 0:17:59.680 --> 0:18:01.000 you have to much air capacity? 0:18:01.160 --> 0:18:02.800 I wouldn't say we have too much. I think we 0:18:03.440 --> 0:18:07.800 probably adjusted coming out of COVID, where we had a 0:18:07.840 --> 0:18:11.320 lot of charters and extra capacity that balanced out our 0:18:11.359 --> 0:18:14.640 fixed network. The jets that we've bought, we've now right 0:18:14.720 --> 0:18:17.720 sized those. We try to run eighty to ninety percent 0:18:17.840 --> 0:18:21.240 capacity utilization and then scale accordingly, and we're running a 0:18:21.560 --> 0:18:21.960 good levels. 0:18:22.080 --> 0:18:23.640 Well to what extent are you leaning more on third 0:18:23.680 --> 0:18:25.320 party capacity providers right now? 0:18:26.280 --> 0:18:28.640 I think if I would have said before the pandemic 0:18:28.640 --> 0:18:31.800 we were very balanced between our own network and leveraging 0:18:31.800 --> 0:18:35.760 commercial lift. Through the pandemic, we leaned much heavier on 0:18:35.800 --> 0:18:39.199 our own network. Now we're probably balancing it out. Before 0:18:39.200 --> 0:18:41.879 we add maybe another jet into our own fleet, we 0:18:41.920 --> 0:18:43.840 will look at commercial to balance it out. 0:18:43.920 --> 0:18:45.960 So when we started GREG, it sounded like there was 0:18:46.040 --> 0:18:48.120 hope that things get a little bit better this year. 0:18:48.560 --> 0:18:52.240 To any of your clients talking about slow down recession. 0:18:52.359 --> 0:18:54.720 Not really in fact, I would say, compared to this 0:18:54.880 --> 0:18:57.560 time last year, where there was a lot of uneasiness 0:18:57.760 --> 0:19:00.520 where inventory levels were high, there was a lot of 0:19:00.600 --> 0:19:03.920 uncertainty this year. When I talk to them, they are optimistic. 0:19:04.320 --> 0:19:06.840 What I haven't seen is the orders flow through and 0:19:06.880 --> 0:19:09.480 the moves go through yet. But people are feeling same. 0:19:09.560 --> 0:19:10.720 But show me the order we. 0:19:10.720 --> 0:19:13.760 Want to see them. But it gives me optimism that 0:19:13.840 --> 0:19:16.320 for peak season we'll see a return to more of 0:19:16.359 --> 0:19:19.240 the norm we're usually in third and fourth quarter. There's 0:19:19.240 --> 0:19:21.399 a rise in goods moving that we haven't seen in 0:19:21.400 --> 0:19:22.440 the last couple of years. 0:19:22.520 --> 0:19:25.320 To the same extent, why do vote, Why would a 0:19:25.359 --> 0:19:28.200 customer go with DHL instead of going with FedEx or UPS. 0:19:28.640 --> 0:19:31.040 Well, for me, our DNA and ARE what we were 0:19:31.040 --> 0:19:33.560 born out of in nineteen sixty nine is international and 0:19:33.600 --> 0:19:36.639 our specialty is around the movement of goods internationally. So 0:19:36.680 --> 0:19:39.240 if you're a small business or a business bringing goods 0:19:39.240 --> 0:19:41.439 in from around the world, nobody can clear it and 0:19:41.480 --> 0:19:43.359 deliver it like we do. If you're a business that 0:19:43.440 --> 0:19:46.800 looks to market your goods globally, nobody knows those countries 0:19:47.040 --> 0:19:48.280 and consumers better than us. 0:19:48.359 --> 0:19:50.680 Greg twenty seconds left here because you do see kind 0:19:50.720 --> 0:19:53.560 of the trade if you will, going between the US 0:19:53.560 --> 0:19:56.600 and globally. Any pushback that you see in terms of 0:19:56.680 --> 0:20:00.720 the globalization idea that we keep hearing in narratives quickly. 0:20:00.520 --> 0:20:04.159 Yeah, we definitely have heard concern a little more protectionist 0:20:04.240 --> 0:20:06.040 policy in a number of places. 0:20:06.119 --> 0:20:07.119 See it though in the day I. 0:20:07.080 --> 0:20:08.600 Haven't seen in the day to day. What I have 0:20:08.800 --> 0:20:13.760 seen is probably the US China relationship. Definitely China plus one, 0:20:13.960 --> 0:20:17.040 new markets in Asia and Mexico growing because of that. 0:20:17.359 --> 0:20:18.480 Yeah, we hear that a lot. 0:20:18.640 --> 0:20:20.160 We love talking shipping and logistics. 0:20:20.200 --> 0:20:21.680 Told you we really like it. Greg here at, chief 0:20:21.680 --> 0:20:24.880 executive officer US of DHL Express here in studio, Greg, 0:20:24.880 --> 0:20:25.240 thank you. 0:20:25.320 --> 0:20:26.040 This is Bloomberg. 0:20:32.920 --> 0:20:36.760 You're listening to the Bloomberg Business Week Podcast. Listen live 0:20:36.880 --> 0:20:40.119 each weekday starting at two pm Eastern applecar Play and 0:20:40.200 --> 0:20:43.240 ANDROYD Auto with the Bloomberg Business Ad. You can also 0:20:43.320 --> 0:20:46.800 listen live on Amazon Alexa from our flagship New York station, 0:20:47.200 --> 0:20:49.919 Just say Alexa play Bloomberg eleven thirty. 0:20:50.760 --> 0:20:53.720 Well, this is one of those stories that is unfortunately 0:20:53.720 --> 0:20:56.320 part of our new reality thanks to social media and 0:20:56.359 --> 0:21:00.480 an area that our Olivia Carvell continues to explore, inform 0:21:00.560 --> 0:21:03.480 and report on this story Today's Bloomberg Big Take. It 0:21:03.560 --> 0:21:05.520 is also the cover story the upcoming new issue of 0:21:05.520 --> 0:21:09.080 Bloomberg BusinessWeek. It is about scammers and scams which the 0:21:09.240 --> 0:21:12.320 FBI calls sextortion, and it has become one of the 0:21:12.320 --> 0:21:15.800 fastest growing crimes targeting children in the United States. 0:21:16.000 --> 0:21:18.280 For more on what exactly is happening, I do want 0:21:18.280 --> 0:21:22.200 to bring in Bloomberg BusinessWeek investigative reporter Olivia Carville. She's 0:21:22.200 --> 0:21:26.000 here in our Bloomberg Interactive Brokers studio. As Carol just mentioned, 0:21:26.040 --> 0:21:28.520 it's the cover of the new issue of Bloomberg Business Week. 0:21:28.600 --> 0:21:31.000 It's out this week. It's already online at Bloomberg dot 0:21:31.040 --> 0:21:35.720 com and always on the Bloomberg terminal. Olivia, the story again, 0:21:35.760 --> 0:21:38.640 the cover story, It centers around a term that I'd 0:21:38.640 --> 0:21:41.880 actually never heard of, sextortion. What is it? 0:21:42.440 --> 0:21:45.000 When I first started reporting this story, I'd never heard 0:21:45.000 --> 0:21:49.960 of sextortion before either. Essentially, it is a hybrid of 0:21:50.160 --> 0:21:56.800 sexual extortion. So we're mainly children, unfortunately, are targeted online 0:21:57.200 --> 0:22:03.960 and sixtorted or sexually extorted through naked photos, blackmail to 0:22:04.080 --> 0:22:08.040 send money or in some cases send more naked photos 0:22:08.080 --> 0:22:12.800 to scammers, perpetrators, predators online and the FBI has been 0:22:12.840 --> 0:22:15.879 tracking this crime for a long time, but in recent 0:22:16.080 --> 0:22:20.359 years it's changed completely. In the past two years, sextortion 0:22:20.480 --> 0:22:25.160 has really become more a financially motivated crime. What these 0:22:25.200 --> 0:22:28.760 predators want is money. It's not kind of more naked 0:22:28.800 --> 0:22:29.719 images of children. 0:22:29.840 --> 0:22:31.280 I have to say, I think there's somebody who might 0:22:31.359 --> 0:22:32.960 be listening to Like, of course, when you see this, 0:22:33.080 --> 0:22:35.040 you say no and you just put your phones down. 0:22:35.359 --> 0:22:37.040 I'm going to ask you to tell the tale of 0:22:37.119 --> 0:22:41.359 during DeMay, Sure, Jordan out of Towe. It's a really 0:22:41.400 --> 0:22:42.800 sad story and a tragic one. 0:22:43.080 --> 0:22:48.240 Yeah. Jordan de May was a pretty typical teenage boy. 0:22:48.440 --> 0:22:52.840 He lived in Marquette, a city in Upper Peninsula in Michigan. 0:22:53.280 --> 0:22:56.520 He was a football star, a basketball star, really good looking, 0:22:56.760 --> 0:23:01.440 really popular, had a girlfriend, lived with both his mum 0:23:01.520 --> 0:23:05.240 and his dad. Was one of the most popular kids 0:23:05.280 --> 0:23:09.000 in school. Teachers loved him, football coaches loved him, his 0:23:09.040 --> 0:23:12.879 girlfriend loved him. And then one night in March of 0:23:12.880 --> 0:23:18.200 twenty twenty two, he said goodbye to his girlfriend Casto goodnight, 0:23:18.280 --> 0:23:22.040 went home before his ten pm curfew as usual, and 0:23:22.119 --> 0:23:24.159 on his way home, he got a message from a 0:23:24.240 --> 0:23:28.000 teenage girl on Instagram called Danny Roberts, and that message 0:23:28.040 --> 0:23:31.960 just said, Hey, this is pretty normal for a popular 0:23:32.040 --> 0:23:35.960 kid who's like regularly featured in the local newspaper for 0:23:36.040 --> 0:23:40.000 his sporting successes to be contacted by random girls on 0:23:40.080 --> 0:23:40.800 social media. 0:23:41.000 --> 0:23:41.800 This happens a lot. 0:23:41.840 --> 0:23:44.159 Now. You know, she may have been a stranger, but 0:23:44.480 --> 0:23:47.160 on her Instagram profile he could see all of her photos, 0:23:47.160 --> 0:23:49.080 he could see all of her friends, and they actually 0:23:49.160 --> 0:23:52.880 shared mutual friends. And I think teenagers today have this 0:23:53.880 --> 0:23:56.720 safety net. They feel like social media is a safe 0:23:56.800 --> 0:23:59.960 place and that you know, looking at an Instagram profile, 0:24:00.160 --> 0:24:02.639 you know who you're talking to. But sadly that is 0:24:02.680 --> 0:24:05.679 not the case. And the story tells us why. So 0:24:05.840 --> 0:24:09.080 Jordan was contacted by this young woman. They started a conversation. 0:24:09.240 --> 0:24:12.840 They were talking about school life, pretty normal topics, and 0:24:12.880 --> 0:24:16.679 then she turned the conversation flirtatious. She started to flirt 0:24:16.720 --> 0:24:19.439 with him. She then sent him a naked photo and 0:24:19.520 --> 0:24:22.440 asked him to play a game. She wanted to play, 0:24:22.520 --> 0:24:26.160 sexy Picks, So that was her sending the nude photo first. 0:24:26.680 --> 0:24:28.560 That kind of threw him off, I guess, and put 0:24:28.640 --> 0:24:30.680 him in a position of feeling like this was someone 0:24:30.720 --> 0:24:33.640 he could trust that they were in this private conversation. 0:24:34.200 --> 0:24:36.920 He responded by sending his own nude photo, and as 0:24:36.960 --> 0:24:40.520 soon as he did that, the blackmail started. Six hours 0:24:40.560 --> 0:24:44.280 after they first started messaging. He took his own life. 0:24:45.560 --> 0:24:48.120 And he took his own life because of the concern 0:24:48.240 --> 0:24:50.840 over what would happen if these pictures got out. That 0:24:51.000 --> 0:24:54.639 was the blackmail. He indeed sent money, they wanted more money, 0:24:55.359 --> 0:24:56.480 and what happened. 0:24:56.960 --> 0:24:57.440 Yeah, I think. 0:24:57.600 --> 0:25:00.280 I think ultimately he took his own life because of 0:25:00.320 --> 0:25:04.159 the pressure these blackmailers placed upon him. Initially, the agreed 0:25:04.200 --> 0:25:07.280 upon amount was three hundred dollars. He paid that, he 0:25:07.359 --> 0:25:09.439 sent it to them, and then they came back asking 0:25:09.520 --> 0:25:12.560 for more. They wanted eight hundred dollars, and at one 0:25:12.640 --> 0:25:15.480 point in the message exchange, he sends them a screenshot 0:25:15.480 --> 0:25:18.240 of his bank account and it had fifty five dollars 0:25:18.240 --> 0:25:20.920 in it. He's a seventeen year old kid, and he says, 0:25:20.960 --> 0:25:24.119 I can't pay anymore, and they say, no deal, and 0:25:24.160 --> 0:25:26.520 they keep pushing and say, if you don't give us 0:25:26.600 --> 0:25:28.239 more money, we're going to send this to all your 0:25:28.280 --> 0:25:29.120 friends and family. 0:25:29.520 --> 0:25:32.600 And it turns out, as you're reporting, shows Jordan's story 0:25:33.600 --> 0:25:38.359 absolutely tragic. The repercussions of that still playing out. But 0:25:38.440 --> 0:25:39.679 he's not the only one. 0:25:39.800 --> 0:25:42.320 He is not the only one. The FBI have been 0:25:42.359 --> 0:25:45.359 aware of more than twelve thousand, six hundred victims of 0:25:45.359 --> 0:25:48.800 this crime across North America. We know more than two 0:25:48.880 --> 0:25:52.359 dozen teenage boys have taken their own lives after falling 0:25:52.400 --> 0:25:57.200 prey to the specific scam. 0:25:56.080 --> 0:26:00.320 The financial motivation, and then kind of the evilness, if 0:26:00.359 --> 0:26:04.840 you will, of these individuals. How are they getting caught? 0:26:04.880 --> 0:26:06.840 Because they are getting caught, correct. 0:26:07.640 --> 0:26:09.920 I mean, in the few cases where they have been caught, 0:26:10.200 --> 0:26:13.200 law enforcement have been able to track their identity through 0:26:13.240 --> 0:26:16.159 their IP addresses, so that's where they've been able to 0:26:16.160 --> 0:26:20.080 file preservation request records to Meta or other social media 0:26:20.080 --> 0:26:23.280 platforms to try and find out who is really behind 0:26:23.400 --> 0:26:26.679 that account. And these scammers have become very effective at 0:26:26.720 --> 0:26:31.159 these catfishing strategies by hacking into these Instagram accounts, taking 0:26:31.200 --> 0:26:35.200 control of them, weaponizing them in order to coerce that 0:26:35.359 --> 0:26:37.360 nude photo and then blackmail. 0:26:38.200 --> 0:26:42.200 It's just amazing, like going back a second, within six 0:26:42.359 --> 0:26:45.200 or seven hours, all of this happened, and it's playing 0:26:45.240 --> 0:26:48.359 out over and over again, which doesn't leave necessarily a 0:26:48.400 --> 0:26:51.520 lot of time for law enforcement unless somebody reaches out 0:26:51.840 --> 0:26:55.119 or a student feels comfortable enough to reach out to 0:26:55.240 --> 0:26:58.280 a parent. But you think about we all know teenage 0:26:58.320 --> 0:27:02.720 teenagers in general, teenage boys like they're not likely to 0:27:02.840 --> 0:27:05.800 reach out. Has any of them in the process stuck 0:27:05.880 --> 0:27:08.520 in it have reached out to an adult or law enforcement? 0:27:08.600 --> 0:27:10.040 Have we heard of anything like that? 0:27:10.240 --> 0:27:12.520 Yeah, Carol, I think that this crime is so much 0:27:12.560 --> 0:27:15.560 bigger than we actually imagine it to be. Those twelve 0:27:15.560 --> 0:27:20.720 thousand cases are largely underreported. I don't know how many 0:27:20.760 --> 0:27:23.080 people have been affected, but the FBI says this is 0:27:23.119 --> 0:27:27.000 touching every neighborhood across the country. Some parents who have 0:27:27.119 --> 0:27:30.119 had their children die and have spoken publicly in the past, 0:27:30.520 --> 0:27:34.399 including a South Carolina state representative. He talked about his 0:27:34.560 --> 0:27:38.119 son's death and he's been contacted by hundreds of children 0:27:38.240 --> 0:27:41.640 in the moment of crisis, saying please help me, because 0:27:41.720 --> 0:27:43.679 what happened to your son is happening to me. 0:27:44.280 --> 0:27:46.439 There's a really poignant moment in your piece where he 0:27:46.480 --> 0:27:49.040 talks about leaving his cell phone on at night so 0:27:49.080 --> 0:27:51.879 he can answer those calls. And I believe Olivia. He 0:27:51.920 --> 0:27:53.280 said he's gotten hundreds of them. 0:27:53.560 --> 0:27:55.600 Yeah, he's received over two hundred phone calls. 0:27:55.760 --> 0:28:00.520 So I want to say Jordan's story continues because the companies, 0:28:00.520 --> 0:28:02.560 and we'll talk more about the tech companies a little 0:28:02.600 --> 0:28:05.320 bit later in our program, but the tech companies play 0:28:05.359 --> 0:28:08.359 a big part in your piece here. Talk to us 0:28:08.359 --> 0:28:11.280 about what happened. Meta Platforms, a parent company of Facebook 0:28:11.280 --> 0:28:14.639 and Instagram, actually has this portal where law ENFORCEMDIA agencies 0:28:14.680 --> 0:28:17.840 and agents can go and make records requests. What happened 0:28:17.840 --> 0:28:21.000 when a police officer, just hours after finding out about Jordan. 0:28:20.800 --> 0:28:21.280 Went to do that. 0:28:22.080 --> 0:28:25.280 So usually when you file a preservation request through the 0:28:25.320 --> 0:28:28.600 platforms through this law enforcement portal, you have to provide 0:28:28.600 --> 0:28:31.600 a court order signed by a judge. Essentially, it's like 0:28:31.640 --> 0:28:35.560 a digital search warrant. The detective in this case wanted 0:28:35.560 --> 0:28:39.640 to file that preservation request as an emergency order to say, 0:28:40.120 --> 0:28:43.240 let me sidestep the court order that's going to take 0:28:43.280 --> 0:28:46.080 a while to get access to. Just give me the 0:28:46.160 --> 0:28:49.840 data on this particular Instagram account, that's the Danny Roberts 0:28:49.880 --> 0:28:53.200 account that was messaging Jordan to May Because, as the 0:28:53.200 --> 0:28:56.400 detective put in his request, he thought other children's lives 0:28:56.400 --> 0:28:58.520 were at risk. He told me he was at the 0:28:58.560 --> 0:29:01.760 mercy of the platform. He couldn't do any more other 0:29:01.840 --> 0:29:04.280 than ask them for the data. Who is this person? 0:29:04.400 --> 0:29:08.160 What's their IP address? What's their email address? Meta responded 0:29:08.240 --> 0:29:11.680 and said his request did not rise to the level 0:29:11.720 --> 0:29:14.280 of an emergency and told him they wouldn't give him 0:29:14.280 --> 0:29:17.720 any information without a court order. So he went and 0:29:17.760 --> 0:29:19.680 got it, and it took a few more days. It 0:29:19.680 --> 0:29:22.240 took a lot longer, but he did get that data. 0:29:22.440 --> 0:29:25.280 And when he did read that message exchange between Jordan 0:29:25.360 --> 0:29:28.040 DeMay and Danny Roberts, he said he had to read 0:29:28.080 --> 0:29:32.400 it twice because it was so shocking and disturbing for him. 0:29:32.920 --> 0:29:35.520 I've done a lot of interviews with law enforcement around 0:29:35.560 --> 0:29:38.200 the harms of social media. This is the first story 0:29:38.240 --> 0:29:42.920 where multiple seasoned detectives and FBI agents have cried Olivia. 0:29:42.960 --> 0:29:44.680 I want to talk a little bit about the tech 0:29:44.720 --> 0:29:50.880 platforms here. Instagram is owned by Facebook parent Meta platforms. 0:29:51.600 --> 0:29:56.640 You mentioned Snap earlier. Snapchat owned by Snap Inc. Talk 0:29:56.680 --> 0:29:59.680 to us a little bit about the platforms this is 0:29:59.680 --> 0:30:02.240 happening on in the role that the tech companies play. 0:30:02.880 --> 0:30:05.920 So the platforms first became aware of sextortion as an 0:30:05.920 --> 0:30:09.440 issue in mid twenty twenty two and since then they 0:30:09.440 --> 0:30:11.600 have taken a lot of action to try and address 0:30:11.600 --> 0:30:16.760 this issue. Meta, for example, sends sextortion focused safety notices 0:30:17.120 --> 0:30:20.520 directly to young users of the platform. They also use 0:30:20.600 --> 0:30:24.720 AI to try and detect suspicious accounts. Say, for example, 0:30:24.840 --> 0:30:28.200 a predator hacks into the Instagram account of someone based 0:30:28.240 --> 0:30:31.600 in the US and they'reover in Lagos, Nigeria. The shift 0:30:31.640 --> 0:30:34.480 of that IP address could send out a red flag. 0:30:34.480 --> 0:30:37.200 That Meta would then be tracking this account to see 0:30:37.200 --> 0:30:40.960 if anything suspicious happens. And just last week, Meta announced 0:30:40.960 --> 0:30:45.640 they're going to be blurring automatically blurring nude photos sent 0:30:45.720 --> 0:30:49.640 through its platform. But even taking those steps, this crime 0:30:49.880 --> 0:30:52.080 is still occurring and will still occur. 0:30:52.800 --> 0:30:53.680 And I think. 0:30:53.480 --> 0:30:56.840 That that's because these bad actors are savvy. They know 0:30:56.960 --> 0:31:00.000 how to get around any kind of guardrails. The platform 0:31:00.120 --> 0:31:03.840 was put up because social media is so ubiquitous in 0:31:03.960 --> 0:31:06.600 children's lives. Now everyone is on it. They want to 0:31:06.640 --> 0:31:09.400 promote this beautiful life they all live. They want to 0:31:09.440 --> 0:31:12.320 show that they're friends with hundreds, if not thousands of 0:31:12.360 --> 0:31:14.920 other people. So they get a friend request from a 0:31:14.920 --> 0:31:16.600 stranger and they accept it. 0:31:16.840 --> 0:31:20.440 That's amazing, But I do think we've become desensitized, you know. 0:31:20.600 --> 0:31:22.760 Whoever thought and Okay, I'm taking off in a little 0:31:22.760 --> 0:31:24.400 bit of a direction, but you would get into a 0:31:24.400 --> 0:31:26.960 stranger's car pretty regularly. And I think about uber like, 0:31:27.000 --> 0:31:30.560 we've just kind of accepted this idea of strangers, but 0:31:30.600 --> 0:31:32.680 they feel kind of familiar and we're okay because the 0:31:32.680 --> 0:31:36.000 company says they're okay. Basically, tell us about the two 0:31:36.040 --> 0:31:39.160 bad actors in this story who are ultimately responsible. 0:31:39.760 --> 0:31:42.240 Well, it's kind of a network of bad actors over 0:31:42.280 --> 0:31:45.800 in Nigeria along the Ivory Coast and other countries in 0:31:45.840 --> 0:31:52.360 Africa where they are creating scripts of how to blackmail 0:31:52.480 --> 0:31:56.120 kids and sharing them on other platforms like TikTok and YouTube. 0:31:56.240 --> 0:31:58.720 This is an industry wide issue. It's not just one 0:31:58.760 --> 0:32:02.160 social media platform facing this problem. It's right across a 0:32:02.240 --> 0:32:05.240 number of them. So this group of Konmian they're called 0:32:05.240 --> 0:32:08.880 the Yahoo Boys, so they may sound familiar anyone who 0:32:08.920 --> 0:32:11.800 was swindled by the Yahoo dot com email scam. The 0:32:11.920 --> 0:32:16.800 Nigerian princes, they have now revolutionized or turned their attention 0:32:17.000 --> 0:32:20.160 towards teenage boys in the US. And they're doing that. 0:32:20.480 --> 0:32:24.280 They're exploiting the shame and embarrassment of these kids because 0:32:24.280 --> 0:32:27.240 it's getting them money, it's getting them results. In one 0:32:27.320 --> 0:32:32.640 case I read about, the Secret Service investigated and the 0:32:32.680 --> 0:32:37.400 individual managed to swindle two point five million in Bitcoin 0:32:37.520 --> 0:32:40.280 payments from US victims. And that's just in the last 0:32:40.360 --> 0:32:40.920 two years. 0:32:42.040 --> 0:32:45.760 Carol mentioned the two individuals in Nigeria who ultimately were 0:32:45.760 --> 0:32:49.360 extra dated to the United States. Talk to us about 0:32:50.160 --> 0:32:52.600 what their fate will be, what their fate is, and 0:32:53.120 --> 0:32:54.960 how the FBI was able to track them down. 0:32:55.200 --> 0:32:57.960 Yeah, and that's what makes this case so unique, is 0:32:58.040 --> 0:33:02.320 the first case where the FBI has managed to track 0:33:02.560 --> 0:33:06.760 the perpetrators to their home country of Nigeria and extradite 0:33:06.760 --> 0:33:09.440 them back to the US to face charges for the 0:33:09.480 --> 0:33:13.000 wrongful death of Jordan de May. These two individuals, Sam 0:33:13.280 --> 0:33:17.440 Samuel and Sampson Agoshi. They are brothers. They're from a 0:33:17.440 --> 0:33:22.560 small town twenty two and twenty and one of them 0:33:22.640 --> 0:33:25.160 was studying at a university, the other was training to 0:33:25.200 --> 0:33:28.240 be a shoe cobbler. They grew up attending church, playing 0:33:28.320 --> 0:33:31.600 soccer with their friends. They obviously got involved in the 0:33:31.760 --> 0:33:36.520 scam and the sextortion scam, and after Jordan de May's death, 0:33:36.760 --> 0:33:40.440 when law enforcement tracked their IP address back to Lagos. 0:33:40.600 --> 0:33:44.560 These two individuals were arrested, extradited here and just last 0:33:44.560 --> 0:33:49.200 week they pled guilty to conspiring to sexually exploit hundreds 0:33:49.200 --> 0:33:52.480 of teenagers across the US. It wasn't just Jordan de 0:33:52.560 --> 0:33:56.080 Maay that they were messaging. They messaged hundreds of young boys, 0:33:56.360 --> 0:33:59.520 including one the day Jordan died, they were sending him 0:33:59.560 --> 0:34:03.120 message in Wisconsin telling him that they were going to 0:34:03.160 --> 0:34:04.360 make him commit suicide. 0:34:04.560 --> 0:34:08.439 I do wonder about social media, like the organizations these 0:34:08.480 --> 0:34:11.200 networks that are actually laying out kind of the playbook, 0:34:11.600 --> 0:34:14.120 what oversight are they doing and kind of pulling that 0:34:14.239 --> 0:34:15.640 in and reading that in as well. 0:34:15.920 --> 0:34:16.080 Well. 0:34:16.120 --> 0:34:18.920 When they first became aware of the crime, they started 0:34:18.960 --> 0:34:21.840 tracking it and there was a report, a research report 0:34:21.880 --> 0:34:24.400 that was published in January of this year where a 0:34:24.480 --> 0:34:29.240 researcher was able to find these scripts across TikTok and YouTube, 0:34:29.400 --> 0:34:33.080 hundreds of them where the Yahoo boys were sharing how 0:34:33.239 --> 0:34:37.799 two's as in how to blackmail American teens, including how 0:34:37.840 --> 0:34:40.279 to sound like a teenage girl, how to turn a 0:34:40.280 --> 0:34:44.600 conversation flirtatious, how to get that nude picture, and then 0:34:44.680 --> 0:34:45.520 how to blackmail. 0:34:45.600 --> 0:34:47.960 So what's the responsibility of social media or that are 0:34:47.960 --> 0:34:49.839 they pulling them or are they scraping them off? 0:34:49.920 --> 0:34:52.520 Or what I mean, they're trying to like, they're doing 0:34:52.560 --> 0:34:55.720 all they can to take down those reports. Every post 0:34:55.880 --> 0:34:58.800 that was raised and that research report has been removed 0:34:58.840 --> 0:35:01.800 from social media. But I've been able to find more. 0:35:02.200 --> 0:35:06.759 You know, the scammers just changed the hashtags A Yeah, 0:35:06.800 --> 0:35:10.120 how do you keep this content off? It's a tidal 0:35:10.120 --> 0:35:11.280 wave and you've got a bucket? 0:35:11.480 --> 0:35:12.320 Yeah, Olivia. 0:35:12.360 --> 0:35:14.080 I mentioned it's one of the most read stories on 0:35:14.080 --> 0:35:16.520 the Bloomberg terminal. It's the cover of BusinessWeek, it's the 0:35:16.520 --> 0:35:20.360 big take. I imagine you've been hearing from people about 0:35:20.400 --> 0:35:22.680 the story. Can you share with us some responses. 0:35:22.880 --> 0:35:25.239 Yeah, I've heard from a lot of readers, people who 0:35:25.280 --> 0:35:28.640 work in schools. I heard from a lacrosse coach saying 0:35:28.680 --> 0:35:30.560 that he wanted to share this with all his players. 0:35:30.680 --> 0:35:33.440 I also heard from a CEO today who said that 0:35:33.520 --> 0:35:36.759 he read this story while going home last night on 0:35:36.800 --> 0:35:38.719 the train and that he couldn't stop reading it, and 0:35:38.760 --> 0:35:41.560 when he got home, he went straight to his son's bedroom. 0:35:41.640 --> 0:35:44.200 His son is fifteen. He set him down and said, 0:35:44.239 --> 0:35:45.960 I need you to read this story, and I need 0:35:46.000 --> 0:35:47.880 to talk to you about it. I want you to 0:35:47.960 --> 0:35:51.800 know that I was young once I also did dumb things, 0:35:51.920 --> 0:35:54.239 and if you do anything like this, come to me, 0:35:54.640 --> 0:35:57.640 come and speak to me. And it's those conversations that 0:35:57.680 --> 0:35:59.720 we were hoping this story. 0:35:59.560 --> 0:36:04.640 Would Yeah, I mean right exactly, because as we talked 0:36:04.640 --> 0:36:07.759 about earlier, maybe we were talking off camera and off air, 0:36:08.200 --> 0:36:10.200 just this whole idea. When you're a teenager, this does 0:36:10.239 --> 0:36:13.640 feel like it's the you know, if this was shown, 0:36:13.960 --> 0:36:15.920 it's kind of the end of your life as you 0:36:16.000 --> 0:36:17.520 know it, and you don't know how to get out 0:36:17.560 --> 0:36:20.360 of it. And so talking about it, parents talking about it, 0:36:20.400 --> 0:36:23.000 teachers talking about it, you hope you can get ahead 0:36:23.040 --> 0:36:23.600 of it a little bit. 0:36:23.680 --> 0:36:23.839 Yeah. 0:36:23.840 --> 0:36:26.879 One detail that you shared in your reporting was an 0:36:26.920 --> 0:36:30.080 image like a mockup of a newspaper having been sent 0:36:30.120 --> 0:36:31.040 back to somebody. 0:36:31.600 --> 0:36:31.839 Yeah. 0:36:31.880 --> 0:36:35.760 In one case, the scammers actually posted the nude photo 0:36:35.840 --> 0:36:39.480 beneath the headline that seed like the individual's name was 0:36:39.560 --> 0:36:42.480 caught sending nude photos on the Internet. They threatened that 0:36:42.880 --> 0:36:45.319 these victims are going to be arrested by police for 0:36:45.360 --> 0:36:46.680 sharing child pornography. 0:36:47.320 --> 0:36:49.080 Well, and the scary part too, is they just knew 0:36:49.120 --> 0:36:51.919 so much about their network. Those individuals those teenage boys 0:36:51.920 --> 0:36:54.000 write their networks and were able to really kind of 0:36:54.000 --> 0:36:57.040 tap into it and scare them. A terrifying story, but 0:36:57.120 --> 0:37:00.920 an really important story. Bloomberg Business Week investigative report Olivia Carvell. 0:37:01.040 --> 0:37:05.040 Another incredible story from her, an important one. As we said, 0:37:05.120 --> 0:37:07.480 it's in the upcoming new issue Bloomberg BusinessWeek. It is 0:37:07.520 --> 0:37:10.360 on the Bloomberg and of course at Bloomberg dot com. 0:37:10.440 --> 0:37:12.880 This is Bloomberg Business Week, Carol Master Tim Stenovic. This 0:37:12.960 --> 0:37:13.759 is Bloomberg Radio. 0:37:19.040 --> 0:37:22.600 You're listening to the Bloomberg Business Week Podcast. Catch us 0:37:22.640 --> 0:37:25.880 live weekday afternoons from two to five pm. Easter Listen 0:37:25.920 --> 0:37:29.239 on Applecarplay and then brought auto with a Bloomberg Business app, 0:37:29.360 --> 0:37:32.239 or watch us Live on YouTube. 0:37:32.760 --> 0:37:35.279 You may remember back in January, the SEC approved the 0:37:35.320 --> 0:37:38.320 launch of bitcoin spot ETFs to trade on the US market, 0:37:38.520 --> 0:37:41.520 causing the price in cryptocurrencies to surge, with the biggest 0:37:41.560 --> 0:37:43.920 one of them all, Bitcoin hitting an all time high 0:37:43.960 --> 0:37:46.759 of more than seventy three thousand dollars last month. 0:37:46.960 --> 0:37:50.239 That was a major milestone for bitcoin enthusiasts, and the 0:37:50.280 --> 0:37:53.400 next one, the ones every four year software update called 0:37:53.719 --> 0:37:54.759 the Having the. 0:37:54.800 --> 0:37:58.000 Having Well great news for bitcoin investors, perhaps not so 0:37:58.080 --> 0:38:01.520 great news for bitcoin minors, because having means the amount 0:38:01.520 --> 0:38:05.440 miners earned for validating transactions to create blocks and in 0:38:05.480 --> 0:38:07.960 the process create bitcoins will be cut in half. 0:38:08.120 --> 0:38:10.560 For more on how this will affect bitcoin miners, Carol 0:38:10.640 --> 0:38:13.920 and Bloomberg Global Finance correspond at Shanali Bassic checked in 0:38:13.960 --> 0:38:17.040 with Adam Sullivan, president and CEO of the small cap, 0:38:17.160 --> 0:38:21.040 publicly held crypto mining firm Core Scientific, which emerged from 0:38:21.080 --> 0:38:24.759 bankruptcy earlier this year thanks largely to that turnaround in 0:38:24.800 --> 0:38:28.359 bitcoin prices. We began by getting his thoughts on the. 0:38:28.360 --> 0:38:32.120 Having Every two weeks bitcoin resets how difficult it is 0:38:32.160 --> 0:38:35.399 to mine a bitcoin, and so the difficulty has been 0:38:35.400 --> 0:38:38.279 increasing steadily over the course of the past five six 0:38:38.400 --> 0:38:41.000 years actually for the entirety of bitcoin's existence, but it's 0:38:41.040 --> 0:38:43.200 been increasing more rapidly in twenty twenty four given the 0:38:43.200 --> 0:38:43.840 price runop. 0:38:44.040 --> 0:38:45.600 I want to go back to having, though, can I 0:38:45.640 --> 0:38:47.440 just want to understand and make sure our audience does so. 0:38:47.520 --> 0:38:49.760 It happens every four years, So it means the amount 0:38:49.800 --> 0:38:52.759 you and other miners have right at this point, basically 0:38:53.200 --> 0:38:56.960 your validating blocks are cut in half. So how does 0:38:57.000 --> 0:38:59.920 that Doesn't that impact the top line, the revenue line. 0:39:00.120 --> 0:39:03.520 Absolutely, it definitely does. But people on the network feature. 0:39:03.520 --> 0:39:05.800 Value of as bitcoin goes up, that's also a factor. 0:39:05.880 --> 0:39:06.640 That's a big factor. 0:39:06.760 --> 0:39:06.960 Yeah. 0:39:06.960 --> 0:39:09.000 But once we get to the having part of the 0:39:09.000 --> 0:39:11.839 network will's shut off because they become unprofitable to mine 0:39:11.840 --> 0:39:14.479 at those levels, and so we get an increasing share 0:39:14.520 --> 0:39:16.160 of the overall network post habit. 0:39:16.719 --> 0:39:19.040 When you say part of the network shuts off, do 0:39:19.080 --> 0:39:22.960 you mean that company's rivals of yours will face increased 0:39:23.040 --> 0:39:24.120 financial pressure. 0:39:24.719 --> 0:39:28.960 Absolutely. In twenty twenty two, we saw the down bitcoin price, 0:39:29.280 --> 0:39:30.960 you know, going too kind of a bear cycle. We 0:39:31.000 --> 0:39:34.520 saw energy prices go higher, and so what you saw 0:39:34.640 --> 0:39:37.640 was a number of challenge companies, sell facilities, sell minors, 0:39:37.719 --> 0:39:38.920 and you'll see that again if they haven't. 0:39:39.040 --> 0:39:41.880 Adam, I mean, you're kind of a great person to 0:39:41.920 --> 0:39:46.000 talk to given that corener scientific face bankruptcy ones, Why 0:39:46.120 --> 0:39:47.040 is this time. 0:39:47.160 --> 0:39:47.920 Different for you? 0:39:48.000 --> 0:39:48.320 Guys? 0:39:48.400 --> 0:39:50.799 How did you emerge from bankruptcy and make it into 0:39:50.800 --> 0:39:51.320 this cycle? 0:39:51.920 --> 0:39:53.400 Yeah, I mean it was so it was a thirteen 0:39:53.440 --> 0:39:55.839 month process, and when we came out, we came out 0:39:55.880 --> 0:39:58.080 of much stronger company, so we had a much more 0:39:58.080 --> 0:40:01.720 interesting capital structure. We lowered debt by almost forty percent, 0:40:02.239 --> 0:40:04.320 and they gave us optionality in the capital. 0:40:04.120 --> 0:40:06.240 Structure million dollars in debt that you guys trimmed. 0:40:06.400 --> 0:40:08.399 Yeah, we trimmed about four hundred million. Yeah, And so 0:40:08.640 --> 0:40:11.239 the rest of our capital structure has optionality in it, 0:40:11.280 --> 0:40:15.440 meaning there's mandatory converts in it, there's cash exercise warrants, 0:40:15.640 --> 0:40:18.080 and so if we perform well, it creates a situation 0:40:18.120 --> 0:40:19.520 where we'll be debt free. 0:40:19.680 --> 0:40:21.799 So what are some of the lessons learned from the 0:40:21.840 --> 0:40:24.919 first ball run we saw in crypto going into now 0:40:25.040 --> 0:40:28.440 the new ball run going into crypto into the having Yeah, it's. 0:40:28.280 --> 0:40:30.640 A bitcoin mining is very much a commodity company, right, 0:40:30.760 --> 0:40:32.920 So it's you have energy inputs on one side and 0:40:32.960 --> 0:40:34.920 you have bitcoin outputs on the other side, and you 0:40:35.040 --> 0:40:37.400 have to be able to hedge input costs and hedge 0:40:37.400 --> 0:40:40.200 output costs. And so you know, we were a case 0:40:40.200 --> 0:40:42.560 study in we had over six hundred million a bitcoin 0:40:42.600 --> 0:40:45.279 on balance sheet and when bitcoins started to trade down, 0:40:45.440 --> 0:40:47.600 it not only hurt our balance sheet, but our income 0:40:47.640 --> 0:40:49.799 statements started to get constrained as well, and so that 0:40:49.920 --> 0:40:51.600 was the real issue in twenty twenty two. 0:40:51.680 --> 0:40:53.680 So your balance sheet is very different so that you 0:40:53.719 --> 0:40:56.600 can't get into that situation again, like, go play it 0:40:56.600 --> 0:40:58.000 out for us a little bit more, because you are 0:40:58.040 --> 0:40:59.800 a great case study. I think if I'm an MBAs 0:40:59.880 --> 0:41:02.120 do and I want to study your company and understand 0:41:02.840 --> 0:41:04.640 what happened and then how you came out and how 0:41:04.680 --> 0:41:08.400 you're doing something different because I could certainly see similar 0:41:08.440 --> 0:41:11.600 scenarios and troubles. Playing three tends to repeat itself. 0:41:11.640 --> 0:41:14.000 It does, it does. But you know the interesting part 0:41:14.040 --> 0:41:17.120 is our counter parties, our debt holders, understand that. And 0:41:17.160 --> 0:41:19.800 so they built two things into the capital structure, time 0:41:19.960 --> 0:41:23.120 and optionality. So the time is they bought us essentially 0:41:23.400 --> 0:41:25.960 three to four years before there's any larger maturity walls 0:41:26.000 --> 0:41:27.719 on our jay I didn't have last time, which we 0:41:28.080 --> 0:41:29.800 had a lot of short term advertising down in a 0:41:29.840 --> 0:41:32.640 balance sheet before, okay, And they also built us in 0:41:32.680 --> 0:41:35.359 optionality where if we trade above certain levels, we were 0:41:35.360 --> 0:41:37.560 able to eliminate our debt. And so really those two 0:41:37.600 --> 0:41:40.560 things make us a completely different company from that perspective. 0:41:40.719 --> 0:41:43.279 Now, let's walk through some of the impacts of the 0:41:43.320 --> 0:41:46.719 having How much do you think it will impact revenue at. 0:41:46.680 --> 0:41:47.279 The end of the day. 0:41:48.560 --> 0:41:51.600 Yeah, it's a great, great question because if you look 0:41:51.640 --> 0:41:54.680 back the estmates in twenty twenty, no one was right, 0:41:54.960 --> 0:41:56.440 and so when you look at twenty twenty four and 0:41:56.440 --> 0:41:58.279 you look at the estimates, we have a feeling that 0:41:58.280 --> 0:42:00.200 anywhere between ten to fifteen percent of the night work 0:42:00.200 --> 0:42:02.759 will come offline. So that means our revenues will be 0:42:02.800 --> 0:42:06.240 cut by about forty percent. Now depending on bitcoin price, 0:42:06.280 --> 0:42:09.680 if that trades down, depending on the mix between machines 0:42:09.680 --> 0:42:12.880 at different power prices, more network as stash could come 0:42:12.920 --> 0:42:15.400 off line, and so we could have a better or 0:42:15.440 --> 0:42:17.160 worse scenario depending on those factors. 0:42:17.200 --> 0:42:18.000 That's a big number. 0:42:18.080 --> 0:42:21.440 Is that manageable even with the covenants or whatever that 0:42:21.480 --> 0:42:22.880 you said that you guys are doing it differently in 0:42:22.960 --> 0:42:25.719 terms of how you're managing your balance sheet. That's a 0:42:25.760 --> 0:42:27.160 big hit. How do you manage that? 0:42:27.480 --> 0:42:29.640 Yeah, you manage it through really three different areas, but 0:42:29.840 --> 0:42:31.840 one of the main ones is on the energy side. 0:42:32.000 --> 0:42:34.319 So you need to have flexibility and the ability to 0:42:34.400 --> 0:42:37.640 curtail more often on the grid because you get paid 0:42:37.680 --> 0:42:40.880 to curtail or in some cases in regulated markets, it 0:42:40.880 --> 0:42:43.560 actually brings down your power costs. And so for us, 0:42:43.560 --> 0:42:46.560 as we look at the revenue cut, it actually provides 0:42:46.600 --> 0:42:49.760 an opportunity for us to showcase what we've built. Internally, 0:42:49.960 --> 0:42:52.480 we have the most advanced software team, the most advanced 0:42:52.480 --> 0:42:55.359 technology team, and the best operations team in the industry. 0:42:55.040 --> 0:42:57.359 So you can automatically get those power benefits we can. 0:42:57.520 --> 0:43:02.719 Yeah, they're right there. Yeah, okay, So what about others here? 0:43:02.840 --> 0:43:04.879 I mean, I'm kind of curious about how you think 0:43:04.920 --> 0:43:06.240 the industry is changing. 0:43:06.239 --> 0:43:07.759 Are you going to say dogecoin? Are you going to 0:43:07.760 --> 0:43:08.080 go there? 0:43:08.160 --> 0:43:09.520 Well, how do you react? 0:43:09.680 --> 0:43:09.879 Right? 0:43:09.920 --> 0:43:11.400 How do you re I'm actually going to go to 0:43:11.440 --> 0:43:15.239 another buzz with AI and do you sit there as 0:43:15.360 --> 0:43:18.000 a bitcoin mining firm and say we're going to diversify 0:43:18.000 --> 0:43:22.880 into other areas as well where certain hardware. 0:43:22.520 --> 0:43:23.680 Could be applicable. 0:43:23.760 --> 0:43:27.120 We've heard people talking about things like that, do you 0:43:27.280 --> 0:43:29.239 buy some of your rivals at this point? How do 0:43:29.280 --> 0:43:32.520 you diversify or maybe double down on this industry? 0:43:32.800 --> 0:43:35.000 Yeah, So we actually signed a contractor was announced a 0:43:35.040 --> 0:43:37.440 few weeks ago with core Weave, you a very large 0:43:37.960 --> 0:43:41.840 HPC company that's really the first for a our company 0:43:41.880 --> 0:43:44.799 has traditional data center roots, and so we're looking at 0:43:44.840 --> 0:43:47.400 converting about three hundred megawatts of our seven hundred and 0:43:47.400 --> 0:43:51.960 twenty four megalats today into actually HPC compute facilities, and 0:43:52.000 --> 0:43:54.359 so absolutely we're taking a look at what it means 0:43:54.360 --> 0:43:56.960 in twenty twenty eight to be competitive and trying to 0:43:57.280 --> 0:44:00.120 work towards the infrastructure is a three year game, so 0:44:00.160 --> 0:44:04.000 it's working towards altering our infrastructure before the next you know, 0:44:04.040 --> 0:44:05.280 having in twenty twenty eight. 0:44:05.239 --> 0:44:08.600 I'm HPC high performance computing. Yes, okay, So to make 0:44:08.640 --> 0:44:10.160 sure I understand it, I didn't know that. 0:44:11.120 --> 0:44:12.680 Oh thank you Google, thank you. 0:44:13.760 --> 0:44:16.319 But you know, when you're thinking about twenty twenty eight 0:44:16.360 --> 0:44:18.800 and you think about this having cycle, even if having 0:44:18.840 --> 0:44:20.840 cycles of the past had caused a run up in 0:44:20.840 --> 0:44:23.759 bitcoin or at least preceded one, how can you be 0:44:23.880 --> 0:44:25.920 sure that that will be the case for the future. 0:44:26.040 --> 0:44:28.880 As somebody who's running a business, do, you almost have 0:44:28.920 --> 0:44:31.839 to protect yourself from maybe that not being the case 0:44:31.840 --> 0:44:32.360 every time. 0:44:33.360 --> 0:44:36.200 This business is about protecting your downside risk and preparing 0:44:36.239 --> 0:44:39.000 for downside volatility, because if you can have time and 0:44:39.040 --> 0:44:42.400 market in bitcoin mining, you can actually experiencing you can 0:44:42.440 --> 0:44:45.400 actually experience the bull runs, which if you can't experience 0:44:45.400 --> 0:44:47.840 the bull runs, then you know, bitcoin mining is is 0:44:48.160 --> 0:44:51.480 generally just you know, for most of the time, bitcoin 0:44:51.680 --> 0:44:54.040 is you know, about a thirty to forty percent margin business. 0:44:54.160 --> 0:44:57.240 But during bull runs, you know, the margin profile expands rapidly. 0:44:57.440 --> 0:44:59.479 So are you set up okay? So we're just below 0:44:59.520 --> 0:45:02.120 seventy thre thousand dollars on bitcoin? Are you okay with 0:45:02.200 --> 0:45:03.840 bitcoin at sixty five thousand? 0:45:04.400 --> 0:45:05.000 Absolutely? 0:45:05.040 --> 0:45:07.440 Sixty thousand, absolutely, fifty five thousand. 0:45:07.600 --> 0:45:10.160 Absolutely, we emerge at we emerge at less than half 0:45:10.200 --> 0:45:11.320 of it at seventy thousand. 0:45:11.320 --> 0:45:13.080 But there's some kind of significant haircut. 0:45:13.120 --> 0:45:15.720 You're fine, absolutely, So when you're. 0:45:15.600 --> 0:45:17.480 Rolling back to the capital markets, right, I think one 0:45:17.560 --> 0:45:19.920 thing that fast fascinates me is that a lot of 0:45:19.960 --> 0:45:22.160 these big bitcoin companies and sort just about a minute 0:45:22.160 --> 0:45:25.520 to answer here, but these big companies are levering up again. 0:45:26.440 --> 0:45:27.760 Does that come with a warning sign? 0:45:28.080 --> 0:45:30.600 It does a little bit absolutely. I mean this industry 0:45:30.680 --> 0:45:33.640 is you know, Bitcoin, especially the price has been driven 0:45:33.680 --> 0:45:35.680 by leverage in the past. You know, we're seeing a 0:45:35.719 --> 0:45:38.880 little bit different bitcoin price run up today, driven by ETFs, 0:45:39.000 --> 0:45:41.120 and I think that's actually a positive sign for our industry. 0:45:41.719 --> 0:45:48.680 Micro strategy, what you said, micro strategy just brought a 0:45:48.680 --> 0:45:50.879 ton of money to be buying bitcoin, So leverage looks 0:45:50.880 --> 0:45:52.479 a little different in the system these days. 0:45:52.560 --> 0:45:54.040 I guess and I hadn't past well. As you can see, 0:45:54.040 --> 0:45:55.480 we get pretty excited. I know, you get rid of 0:45:55.719 --> 0:45:58.480 we're talking about this topic. Adam, come back soon. Interesting 0:45:58.960 --> 0:46:01.760 especially it's a different year or new year for you guys, 0:46:01.800 --> 0:46:03.640 so it'd be interesting to maybe catch up with you 0:46:03.680 --> 0:46:06.880 real soon. Absolutely really appreciate it, Adam Sullivan, President and CEO. 0:46:07.280 --> 0:46:09.960 As we said, small cap publicly alt crypto mining firm 0:46:10.040 --> 0:46:13.560 Core Scientific. You can find it certainly ticker as CORZ. 0:46:14.600 --> 0:46:18.120 You're listening to the Bloomberg Business Week podcast. Catch us 0:46:18.160 --> 0:46:21.400 live weekday afternoons from two to five pm. Easter Listen 0:46:21.440 --> 0:46:23.600 on Apple car Play and then brout Auto with a 0:46:23.600 --> 0:46:27.759 Bloomberg Business act or watch us live on YouTube. 0:46:28.600 --> 0:46:31.839 Last month reported on how billionaire Steve Cohen's point seventy 0:46:31.840 --> 0:46:34.239 two Ventures. It's part of a group of investors who 0:46:34.280 --> 0:46:37.200 are betting that blockchain tech can be used in the 0:46:37.320 --> 0:46:40.960 US to simplify vehicle registration. So point seven to two 0:46:41.040 --> 0:46:43.760 Ventures led a funding round for a company called champ 0:46:43.880 --> 0:46:47.520 Titles Carol. It's a startup that's working with several state 0:46:47.560 --> 0:46:51.960 governments to replace existing vehicle title registration and lean systems 0:46:52.360 --> 0:46:55.080 with a digital system featuring blockchain technology. 0:46:55.160 --> 0:46:57.000 Kh sign me up for someone whose to go get 0:46:57.000 --> 0:46:59.279 a new title or get it to replace a thank 0:46:59.280 --> 0:47:01.319 you do really copy of a title for our cart? 0:47:01.400 --> 0:47:01.560 Yeah? 0:47:01.600 --> 0:47:02.440 Yeah, I have to. 0:47:03.320 --> 0:47:06.719 I have to find my marriage certificate. Really yeah, I 0:47:06.760 --> 0:47:08.239 don't know how gonna do that. 0:47:08.719 --> 0:47:12.600 It's good luck, good luck blockchain. It could come in handy. 0:47:12.640 --> 0:47:14.080 It's the whole in your marriage certificates. 0:47:14.080 --> 0:47:17.200 I'll say that for advocates of the technology, car registration 0:47:17.320 --> 0:47:19.000 just one of many uses. But we think about this 0:47:19.080 --> 0:47:21.759 a lot. This is blockchain. I kind of understand. John 0:47:21.800 --> 0:47:25.080 wu is one of those advocates. He's president of Ava Labs. 0:47:25.120 --> 0:47:28.280 He's the developer of blockchain project Avalanche, and he argues 0:47:28.280 --> 0:47:30.880 that we'll soon see quick adoption of blockchain technology. He 0:47:30.960 --> 0:47:33.600 joins us from New York. John, good to have you 0:47:34.000 --> 0:47:38.600 on with us again. So how are we thinking about blockchain? 0:47:38.680 --> 0:47:41.040 What are you seeing in terms of really being put 0:47:41.080 --> 0:47:43.520 to use? Because I do feel like we have been 0:47:43.560 --> 0:47:46.520 talking about it for a long time. I'm going to 0:47:46.560 --> 0:47:48.120 say at least a decade already. 0:47:49.840 --> 0:47:53.160 Well, it probably is about a decade, but probably a 0:47:53.160 --> 0:47:57.480 little bit less because the programmability on using a smart 0:47:57.480 --> 0:48:01.520 contract on a blockchain really started with ethereum, so you know, 0:48:01.560 --> 0:48:04.120 bigcoin is not as programmable, is really more of a 0:48:04.120 --> 0:48:07.120 store value and Etheroerem has only been around for less 0:48:07.120 --> 0:48:07.640 than call. 0:48:07.600 --> 0:48:10.360 It ten years, so that's when it's really started happening. 0:48:10.400 --> 0:48:14.440 But utility is hard to understand because there's a lot 0:48:14.480 --> 0:48:16.759 of B to B stuff and even what you just 0:48:16.880 --> 0:48:21.640 mentioned with the DMVs having cars register on the blockchain, 0:48:21.880 --> 0:48:24.200 that's the use case that makes perfect sense. That's the 0:48:24.200 --> 0:48:27.920 blockchain aspect of it. And I think the states that 0:48:28.040 --> 0:48:30.239 is leading the way on that is State of California 0:48:30.360 --> 0:48:32.680 and their DMV. They are really I think they already 0:48:32.680 --> 0:48:36.120 said they want to put all the title of cars 0:48:36.120 --> 0:48:39.319 in California on a blockchain within a very near term 0:48:39.360 --> 0:48:39.960 in the future. 0:48:40.040 --> 0:48:42.640 Hey, so how is that different, John, explain to someone 0:48:42.640 --> 0:48:44.120 listening right now who is saying, wait a second, how 0:48:44.200 --> 0:48:46.440 is that different from just, you know, having a database 0:48:46.480 --> 0:48:50.319 in the cloud of every vehicle registration, Like, how is 0:48:50.320 --> 0:48:51.640 it different when it's on the blockchain. 0:48:51.880 --> 0:48:56.160 So this database is shared by everyone, it's immutable and 0:48:56.200 --> 0:49:00.000 everyone can see what's happening. So first of all, the 0:49:00.560 --> 0:49:02.680 for the reason to use it is it will save 0:49:02.800 --> 0:49:06.360 cost because you don't have to replicate databases for every 0:49:06.840 --> 0:49:10.600 point of access for every person needing their own version 0:49:10.640 --> 0:49:13.040 of the ledger. If you will, so it will save 0:49:13.120 --> 0:49:16.239 you the system money. If you will, it'll make the 0:49:16.280 --> 0:49:21.080 workflow far more automated and save access operating expenses in 0:49:21.120 --> 0:49:23.960 that way. But more importantly, I think in this case, 0:49:24.400 --> 0:49:28.120 the fact that it is immutable and transparent, it makes 0:49:28.160 --> 0:49:30.840 it easy for people to audit and check and the 0:49:30.880 --> 0:49:34.200 providence of who own what auto. What you are afraid 0:49:34.200 --> 0:49:38.360 of in this non trustless world of single servers is 0:49:38.400 --> 0:49:41.560 that whoever has control of that server can have to 0:49:41.800 --> 0:49:47.280 change information on that server by accident or by nefarious means. 0:49:47.760 --> 0:49:50.880 On a shared blockchain, you can't do that because everyone 0:49:50.880 --> 0:49:52.040 can see what's happening. 0:49:52.520 --> 0:49:55.120 Well, how would it work? So help us understand. So, 0:49:55.239 --> 0:49:58.120 like if I needed to get a copy or I 0:49:58.120 --> 0:49:59.719 wouldn't have to get a copy of my license is 0:49:59.760 --> 0:50:02.680 what you saying? Or my car title because it would 0:50:02.719 --> 0:50:05.000 just be on the blockchain. But how would I access 0:50:05.080 --> 0:50:08.080 this and who would be overseeing that blockchain? 0:50:08.360 --> 0:50:11.239 That's a good question. So that's the user's side, the 0:50:11.320 --> 0:50:14.399 user interface side. I mean, you can also replicate this 0:50:14.480 --> 0:50:17.319 with your house titles, the same concept right now, when 0:50:17.360 --> 0:50:21.280 you buy a house, you need to change ownership there 0:50:21.320 --> 0:50:24.200 you go to town hall, and at town hall they 0:50:24.520 --> 0:50:28.960 it's actually paper based. If I take most places and 0:50:29.000 --> 0:50:32.000 they literally show you paperwork of who owns and then 0:50:32.000 --> 0:50:35.320 they add your name to it. So the user interface 0:50:35.400 --> 0:50:38.720 in this case will still be controlled by I guess 0:50:39.040 --> 0:50:43.240 a municipality or a state, you know, a public entity 0:50:43.280 --> 0:50:47.760 so to speak, but the underlying information will be stored 0:50:47.960 --> 0:50:52.719 in a way that in theory, all municipalities can all 0:50:52.880 --> 0:50:54.719 get access to it and look at it, and even 0:50:54.800 --> 0:50:57.480 I can actually look at it. If I am savvy 0:50:57.560 --> 0:51:00.400 enough to create an interface to search into the blockchain. 0:51:00.760 --> 0:51:03.320 Okay, I would imagine there are some more exciting uses 0:51:03.320 --> 0:51:07.160 for blockchain than DMV. But Carol wants to keep talking 0:51:07.200 --> 0:51:09.239 about it. Go ahead, I just want more questions. So 0:51:10.000 --> 0:51:10.600 very exciting. 0:51:11.040 --> 0:51:14.360 If you save your time of going into all this stuff, 0:51:14.400 --> 0:51:14.800 I mean. 0:51:14.840 --> 0:51:15.920 Would it say what? 0:51:15.920 --> 0:51:17.839 Did it saved me time? Would it save me money? 0:51:17.840 --> 0:51:17.960 Though? 0:51:18.080 --> 0:51:21.000 If I still had to verify something, would I still 0:51:21.040 --> 0:51:25.000 have to go to the municipality's blockchain or talk to 0:51:25.080 --> 0:51:28.000 somebody and they would have to say, oh, yeah, like 0:51:28.040 --> 0:51:31.040 it's here, like it would I have that easy access or. 0:51:31.040 --> 0:51:35.040 No, Well, presumably it will definitely it will save the 0:51:35.120 --> 0:51:38.160 municipality money to put it this way, put it on 0:51:38.160 --> 0:51:41.840 the blockchain over time, And whether they want to provide 0:51:41.920 --> 0:51:44.759 access to everyone. I think in this case it's a 0:51:44.840 --> 0:51:47.840 hybrid solution where they still control some point of access, 0:51:48.280 --> 0:51:51.200 but if they conceptually wanted to open it up and 0:51:51.520 --> 0:51:55.000 expose the blockchain, everyone can concede it. 0:51:55.120 --> 0:51:56.160 So they could still charge me. 0:51:56.280 --> 0:51:59.400 Basically, Yeah, they got to get revenue from you. They 0:51:59.520 --> 0:52:03.520 got to pay, you know, for seeing employees the equation. Yeah, 0:52:04.040 --> 0:52:06.360 like like we talked about earlier the past, maybe the 0:52:06.360 --> 0:52:08.160 savings aren't being passed along to the customer. 0:52:08.520 --> 0:52:08.920 Maybe not. 0:52:09.000 --> 0:52:10.879 Okay, John, I want to talk a little bit about 0:52:10.920 --> 0:52:13.279 some other use cases here, because you argue that we 0:52:13.280 --> 0:52:15.520 could see lots of uses when it comes to gaming, 0:52:15.560 --> 0:52:18.640 consumer loyalty, and on chain finance. I want to start 0:52:19.320 --> 0:52:22.880 with on chain finance here. Explain to us where you can, 0:52:22.960 --> 0:52:24.879 because this is not just something that you're talking about here. 0:52:24.920 --> 0:52:27.399 I mean we got black Rocks Larry Fink talking about 0:52:27.400 --> 0:52:30.720 this as well tokenization, So so talk to me about 0:52:30.760 --> 0:52:32.960 what's exciting to you when it comes to finance and 0:52:33.000 --> 0:52:34.120 the blockchain. 0:52:33.800 --> 0:52:35.960 So the number one use case right now happening in 0:52:36.000 --> 0:52:39.520 the financial world is tokenizing of what I call real 0:52:39.560 --> 0:52:44.520 world assets, and that's either tokenizing money market funds, the 0:52:44.680 --> 0:52:48.680 US dollar, or actually a private equity fund. So I 0:52:48.719 --> 0:52:51.799 think the one area that people will absolutely agree that 0:52:51.840 --> 0:52:53.440 there's some product market fit, if not. 0:52:53.400 --> 0:52:55.839 Already has product market fit, is the stable coin. 0:52:56.360 --> 0:52:59.520 So even paypals trying to create stable coins, there there's 0:52:59.600 --> 0:53:03.040 a lot of happening in different industries, and that's in fact, 0:53:03.040 --> 0:53:05.719 I think Brevin Howard did this analysis where last year 0:53:05.880 --> 0:53:10.279 there were more stable coins settled on blockchain or as 0:53:10.360 --> 0:53:13.439 much as the visa network. So basically, when you can 0:53:13.800 --> 0:53:17.680 create that efficiency, you save money. And you know, even 0:53:17.719 --> 0:53:22.040 paypalt they're allowing US customers using their stable coin capability 0:53:22.440 --> 0:53:25.719 to send money overseas, and you know, when I spoke 0:53:25.800 --> 0:53:28.680 to them last, basically, if there's four parts of creating 0:53:28.719 --> 0:53:32.719 a stable coin and allowing people to transfer the money 0:53:32.800 --> 0:53:36.960 around the world, they haven't even completely integrated the entire workflow. 0:53:37.000 --> 0:53:39.759 But yet what they've integrated, called half of it has 0:53:39.840 --> 0:53:44.240 already makes it a more profitable transaction. You know, another 0:53:44.239 --> 0:53:47.640 great example would be sticking with PayPal. PayPal owns the 0:53:47.640 --> 0:53:50.720 PayPal wallet and Vemo. You know they bought in Vemo 0:53:50.840 --> 0:53:54.160 and brain Tree. It's a different, you know, construct different 0:53:54.200 --> 0:53:57.279 tech stack. And if you have a wallet at a 0:53:57.360 --> 0:54:00.120 PayPal in Vemo and you have a PayPal wallet, if 0:54:00.120 --> 0:54:02.000 you want to move your own money one hundred dollars 0:54:02.040 --> 0:54:05.360 from PayPal to Venmo, you see one hundred dollars. 0:54:05.560 --> 0:54:06.879 So it's seamless to you. 0:54:07.239 --> 0:54:09.839 But in the back end, really what happens is it's 0:54:09.840 --> 0:54:13.279 subsidized by PayPal. Only ninety nine point call it nine 0:54:13.320 --> 0:54:16.239 gets moved and they put the extra ten cents in 0:54:16.320 --> 0:54:19.200 there for you because they have to go outside the system, 0:54:19.480 --> 0:54:22.279 integrate different tech stacks, move things around, go to a 0:54:22.280 --> 0:54:24.640 third party, and it just costs money to and the 0:54:24.680 --> 0:54:25.800 friction there costs money. 0:54:26.520 --> 0:54:28.680 Yeah, I would assume that whole industry, right, we know 0:54:28.719 --> 0:54:30.920 they're looking and watching because you just think about how 0:54:31.000 --> 0:54:34.400 much I've got a daughter overseas and just the movement 0:54:34.440 --> 0:54:35.160 of moneys in the. 0:54:35.200 --> 0:54:36.839 Mechanicy so hard to do. 0:54:36.880 --> 0:54:39.480 Bank here and opening a bank there because it makes 0:54:39.520 --> 0:54:42.120 more sense, Like it's just crazy. And she's become real 0:54:42.160 --> 0:54:44.560 savvy about who's charging fees and stuff, and we try 0:54:44.560 --> 0:54:45.160 to figure it out. 0:54:45.160 --> 0:54:46.640 You just got to do it in Switzerland, Carroll. 0:54:47.920 --> 0:54:49.359 You we're on Bloomberg right now. 0:54:49.560 --> 0:54:51.920 Well, I mean, if you remember, like five, six, seven 0:54:52.000 --> 0:54:57.360 years ago, people who did remittance was using bitcoin because 0:54:57.400 --> 0:54:59.480 it was it was save them fifteen percent instead of 0:54:59.480 --> 0:55:02.360 going to Western Union or one of these places. 0:55:02.520 --> 0:55:02.719 Right. 0:55:03.200 --> 0:55:05.320 The only problem we'll bick on with just two moltles. 0:55:05.320 --> 0:55:08.080 So now the stable coin construct is a better one 0:55:08.120 --> 0:55:11.160 for moving money back and forth overseas well, John. 0:55:11.000 --> 0:55:12.960 Wo, I'm looking for I can't wait till I don't 0:55:12.960 --> 0:55:16.520 have to go to DMV anymore. Sorry, DMV. There's got 0:55:16.560 --> 0:55:19.000 to be a better way, and I understand how maybe 0:55:19.040 --> 0:55:22.520 blockchain can make it simpler and make more sense. John Wu, 0:55:22.560 --> 0:55:23.760 thank you so much of a great weekend. 0:55:23.920 --> 0:55:25.680 John Wu also big on Twitter. I don't know if 0:55:25.680 --> 0:55:27.640 you saw he tweeted it. You know when he tweets 0:55:27.880 --> 0:55:29.640 put mentions you on Twitter, you can get a lot 0:55:29.640 --> 0:55:29.920 of us. 0:55:29.920 --> 0:55:31.359 John, Can you mention this a lot more? 0:55:31.520 --> 0:55:32.120 We would really. 0:55:31.960 --> 0:55:33.880 Appreciate it, absolutely, John, Good to see you. 0:55:34.320 --> 0:55:37.080 You well. 0:55:41.400 --> 0:55:45.239 You're listening to the Bloomberg Business Week podcast. Listen live 0:55:45.360 --> 0:55:48.000 each weekday. He's starting at two pm Eastern. Don't Apple 0:55:48.040 --> 0:55:50.800 car play and androyd Auto with the Bloomberg Business and 0:55:51.160 --> 0:55:54.000 you can also listen live on Amazon Alexa from our 0:55:54.040 --> 0:56:02.040 flagship New York station, Just Say Alexa play Bloomberg eleven thirty. 0:56:00.120 --> 0:56:02.000 In our second hour of the weekend edition of Bloomberg 0:56:02.040 --> 0:56:05.000 Business Week. Well, this Monday is Earth Day, and so 0:56:05.160 --> 0:56:08.400 in honor of our beloved mother Earth, we are exploring 0:56:08.440 --> 0:56:11.560 some of the stories, challenges, and impact of climate change 0:56:11.719 --> 0:56:12.799 in the next sixty. 0:56:12.520 --> 0:56:16.080 Minutes, including a stark reminder of where we are told 0:56:16.080 --> 0:56:18.400 through one reporter who's been on the front lines of 0:56:18.440 --> 0:56:22.000 climate change at small Town America, Jonathan Wigliotti on his 0:56:22.160 --> 0:56:23.960 new book Before It's Gone. 0:56:24.080 --> 0:56:27.400 Plus the US power grid old, outdated and stressed, and 0:56:27.480 --> 0:56:30.000 yet getting a big financial boost from the US government 0:56:30.040 --> 0:56:32.279 to help turn it around. A view from the US 0:56:32.360 --> 0:56:33.839 Department of Energy. 0:56:33.760 --> 0:56:38.279 And Regenerative Agriculture. A new documentary, Common Ground, takes a 0:56:38.320 --> 0:56:41.760 deep dive into the agricultural history of the US and 0:56:41.800 --> 0:56:43.880 why we should turn the clock back on how we 0:56:43.920 --> 0:56:44.520 grow food. 0:56:44.760 --> 0:56:46.759 First up this hour, though, let's talk about the US 0:56:46.840 --> 0:56:49.360 power grid. How to describe it old? 0:56:49.680 --> 0:56:52.000 I think that's fair to say problematic for a lot 0:56:52.040 --> 0:56:53.440 of people and a lot of states. 0:56:53.520 --> 0:56:56.360 Yes, yeah, really difficult, right, and in need, tim, I 0:56:56.400 --> 0:56:58.960 would say, of a massive, massive overhaul. 0:56:58.640 --> 0:56:59.640 Check, check and check. 0:57:00.200 --> 0:57:00.319 Well. 0:57:00.400 --> 0:57:03.080 Last fall, the Department of Energy announced up to three 0:57:03.080 --> 0:57:06.640 point five billion dollars in funding to upgrade the US grid. 0:57:06.800 --> 0:57:09.400 This topic was among the many at this week's Bloomberg 0:57:09.520 --> 0:57:12.400 Enny f Annual Energy and Climate Summit in New York City. 0:57:12.680 --> 0:57:15.919 Maria Robinson participated in a panel at the event. She's 0:57:16.000 --> 0:57:19.200 the Director of Grid Deployment at the US Department of Energy, 0:57:19.320 --> 0:57:21.240 and she joined us for a reality check. 0:57:21.320 --> 0:57:23.400 So we're facing a lot of different problems here on 0:57:23.440 --> 0:57:25.560 the grid today, right. You are talking about we have 0:57:25.640 --> 0:57:28.320 new demand. It's great that we're bringing manufacturing back to 0:57:28.400 --> 0:57:30.760 the United States, but that's a strain on the electric grid. 0:57:30.840 --> 0:57:33.720 The electric grid is aging. It's not just older than me, 0:57:33.840 --> 0:57:37.000 it's older than my grandparents. So then we're looking at 0:57:37.120 --> 0:57:40.439 ways that we need to upgrade our existing infrastructure while 0:57:40.440 --> 0:57:44.520 continuing to build new ones. I think of it. We 0:57:44.640 --> 0:57:49.160 released a report just yesterday on advanced and innovative grid 0:57:49.200 --> 0:57:52.880 deployment mechanisms of being able to take advantage of some 0:57:53.000 --> 0:57:57.080 of the existing infrastructure and figuring out ways at relatively 0:57:57.120 --> 0:57:59.400 low cost to upgrade what we currently have. 0:58:00.200 --> 0:58:02.680 The joke that I make is so we cannot do upgrades. 0:58:02.720 --> 0:58:04.760 It's not like a massive rebuild, right, we have to 0:58:04.800 --> 0:58:05.160 do both. 0:58:05.720 --> 0:58:08.400 We are definitely going to have to continue to build 0:58:08.800 --> 0:58:10.960 in order to meet all the demands. But we can 0:58:10.960 --> 0:58:13.360 take advantage of those existing rights of way, right, we 0:58:13.400 --> 0:58:15.200 don't have to deal with as much permitting, which we 0:58:15.200 --> 0:58:18.960 all know is a really difficult topic to deal with. 0:58:19.840 --> 0:58:24.320 But you know, oftentimes folks are taking our existing lines 0:58:24.600 --> 0:58:27.960 and replacing the metal part that's inside of it. It's 0:58:28.000 --> 0:58:31.640 called a conductor, and oftentimes they're just replacing that like 0:58:31.680 --> 0:58:34.600 for like, instead of upgrading it to a newer technology 0:58:34.640 --> 0:58:38.800 that can move more electrons every single day. And so 0:58:38.840 --> 0:58:39.360 it's so funny. 0:58:39.400 --> 0:58:41.320 There's a story in the Bloomberg. It's probably connection with this, 0:58:41.400 --> 0:58:43.800 but it's a central transmission line is getting a twenty 0:58:43.800 --> 0:58:46.480 first century upgrade, and it's about a startup that's created 0:58:46.520 --> 0:58:48.680 a wire that's lighter and can carry up to three 0:58:48.720 --> 0:58:51.160 times more electricity. I mean, we talk about this with 0:58:51.240 --> 0:58:54.320 battery usage, right for evs, about just about making things, 0:58:54.400 --> 0:58:58.080 even chips, right, accelerators, making them more productive, making them 0:58:58.080 --> 0:59:01.120 more energy efficient, Like this is what it's about out exactly. 0:59:01.160 --> 0:59:03.440 And so all these great technologies are already out there. 0:59:03.480 --> 0:59:05.680 They're really proven in the field. We just need the 0:59:05.680 --> 0:59:06.720 market to pick them up. 0:59:07.520 --> 0:59:10.160 Is it more of a state issue right now? I mean, 0:59:10.200 --> 0:59:12.440 I think if states that have struggled with their grids, 0:59:12.480 --> 0:59:15.360 Texas and California certainly come to mind. Is it a 0:59:15.360 --> 0:59:18.240 federal issue or is it a utility issue? 0:59:18.520 --> 0:59:22.320 It's all three all the apl The fun part about 0:59:22.320 --> 0:59:25.040 the electric grid is that it doesn't follow political lines. 0:59:25.120 --> 0:59:25.240 Right. 0:59:25.280 --> 0:59:28.440 We have an eastern interconnect a western interconnect, and they 0:59:28.440 --> 0:59:31.360 don't follow necessarily. They're like time zones, right, they just 0:59:31.400 --> 0:59:34.520 sometimes split a state down the middle. So we have 0:59:34.560 --> 0:59:37.400 to figure out how we mix some federal policy with 0:59:37.520 --> 0:59:41.320 individual state policy. Some states are really looking to decarbonize, 0:59:41.360 --> 0:59:42.800 and the way they want to build their grid might 0:59:42.800 --> 0:59:45.800 be different than their neighbor who has different goals. Ultimately, 0:59:46.440 --> 0:59:48.240 and so we're trying to mix and match all those 0:59:48.280 --> 0:59:50.640 different priorities in order to make sure that we have 0:59:50.840 --> 0:59:52.960 a strong grid that can withstand anything. 0:59:53.000 --> 0:59:55.240 There's nothing like a federal incentive or a tax break 0:59:55.280 --> 0:59:57.040 or something to get us to do something, whether you're 0:59:57.040 --> 0:59:59.000 a company where you're an individual. So what are the 0:59:59.040 --> 1:00:02.800 incentives that you guys or that utilities need to actually 1:00:02.840 --> 1:00:05.320 adopt better technologies and some of the technologies that you 1:00:05.360 --> 1:00:06.280 guys are talking about. 1:00:06.480 --> 1:00:09.320 So there are certainly some ways from the regulatory structure 1:00:09.480 --> 1:00:12.560 that utility commissioners at the state level or at the 1:00:12.600 --> 1:00:15.680 federal level could incentivize the use of some of these 1:00:15.720 --> 1:00:16.720 different technology today. 1:00:16.840 --> 1:00:18.600 Do we need to really make it happen? 1:00:19.000 --> 1:00:20.320 I think we need to make a bit of a 1:00:20.320 --> 1:00:22.240 push here, just because we have so much to deal 1:00:22.320 --> 1:00:24.160 with over the next three to five years, and that's 1:00:24.160 --> 1:00:26.240 when we can deploy some of these technologies while we're 1:00:26.280 --> 1:00:29.080 still building out major transmission lines that you know, take 1:00:29.080 --> 1:00:30.120 ten to twelve years. 1:00:31.240 --> 1:00:32.920 Is this a national security issue? 1:00:33.240 --> 1:00:35.360 It certainly is a national security issue, and this is 1:00:35.400 --> 1:00:37.840 something that we continue to face every day. Our grade 1:00:37.920 --> 1:00:40.240 is one of our greatest assets that we have in 1:00:40.560 --> 1:00:45.480 our country and making sure that we can withstand cybersecurity attacks, 1:00:45.520 --> 1:00:49.520 physical attacks, and just frankly weather. One of the biggest 1:00:49.560 --> 1:00:52.720 issues is wildfires and making sure that we can prevent 1:00:52.760 --> 1:00:54.120 those from happening moving forward. 1:00:54.200 --> 1:00:56.160 Yeah, we were talking about this another story that's on 1:00:56.160 --> 1:00:59.480 the Bloomberg today that's about that. You know, how investors 1:00:59.480 --> 1:01:02.280 have looked at at the debt at utilities is kind 1:01:02.280 --> 1:01:04.600 of a sure thing in the past right in terms 1:01:04.600 --> 1:01:07.320 of investing, but because of what's happening with climate change, 1:01:07.520 --> 1:01:09.520 that is not necessarily the case. That there's a lot 1:01:09.560 --> 1:01:11.560 more questions that are out there in terms of the 1:01:11.680 --> 1:01:14.880 unpredictability and the costs that are mount to get some 1:01:14.880 --> 1:01:16.000 of the nation's utilities. 1:01:16.320 --> 1:01:18.120 And I think part of this is intent trying to 1:01:18.160 --> 1:01:21.160 incentivize utilities, and they're really coming around to realize this. 1:01:21.720 --> 1:01:23.480 You're not going to if a pole gets knocked down 1:01:23.520 --> 1:01:25.720 from one hundred and fifty mile an hour WINS, you're 1:01:25.760 --> 1:01:27.960 not going to replace it with another pole like was 1:01:28.000 --> 1:01:30.040 there before that could get knocked down. You want something 1:01:30.120 --> 1:01:31.800 that can with stand two hundred and fifty mile an 1:01:31.840 --> 1:01:33.880 hour WINS. And so we have to make sure that 1:01:33.960 --> 1:01:37.280 the regulatory structure is there in place to allow them 1:01:37.320 --> 1:01:39.400 to think in a forward leaning way. 1:01:39.720 --> 1:01:41.160 What can I just ask you, so, what is that 1:01:41.200 --> 1:01:42.320 regulatory structure? 1:01:42.560 --> 1:01:46.200 So there are these very fun organizations called utility commissions 1:01:46.240 --> 1:01:48.960 public utility commissions. They're the people who decide how much 1:01:49.000 --> 1:01:51.720 you pay on your electricity bill and on your gas bill, 1:01:52.040 --> 1:01:55.320 and those are the folks that hold utilities accountable and 1:01:55.520 --> 1:01:58.880 also figure out how those costs are being allocated to 1:01:58.960 --> 1:02:02.400 regular folks like us and to major industry as well. 1:02:02.640 --> 1:02:04.720 How much are we talking here? If you could waive 1:02:04.720 --> 1:02:09.000 a magic wand and get enough funding to completely upgrade 1:02:09.280 --> 1:02:11.800 the grid in the US, how much would it be? 1:02:12.280 --> 1:02:16.560 So we are really lucky under the bipartisan Infrastructure Law, 1:02:16.560 --> 1:02:19.600 the Inflation Reduction Act rate my office has about twenty 1:02:19.600 --> 1:02:22.400 two billion dollars to upgrade the grid. We talked about 1:02:22.400 --> 1:02:24.120 three and a half a bit going out last year. 1:02:24.440 --> 1:02:26.959 To be honest, that's a drop in the bucket. Every year, 1:02:27.640 --> 1:02:30.360 utility spend about twenty three billion dollars just to maintain 1:02:30.440 --> 1:02:33.920 their existing assets in order to continue to upgrade. What 1:02:33.960 --> 1:02:36.320 we do find though, is that some of those costs 1:02:36.400 --> 1:02:40.240 could just be shifted. Instead of paying to replace l 1:02:40.280 --> 1:02:42.520 like for like, we could be paying a slightly lower 1:02:42.560 --> 1:02:44.560 cost even to do some of those upgrades. And that's 1:02:44.560 --> 1:02:46.479 where we have to continue to push the market as. 1:02:46.400 --> 1:02:50.200 Much as west so is twenty plus billion dollars enough. 1:02:50.120 --> 1:02:53.120 Twenty plus billion I think per year. But you know, 1:02:53.640 --> 1:02:56.720 we're blessed with having Inflation Reduction Act money and by 1:02:56.800 --> 1:02:59.800 Parson infrastructure law, of course, that expires after a period. 1:03:00.280 --> 1:03:01.520 Is there a chance that we're all going to end 1:03:01.600 --> 1:03:04.640 up paying as users consumers that to in other words, 1:03:04.640 --> 1:03:06.040 to help pay for this, that we are going to 1:03:06.040 --> 1:03:07.480 pay higher utility costs. 1:03:07.600 --> 1:03:10.160 I think if folks are smart, and we do good planning, 1:03:10.200 --> 1:03:12.600 and we think years out and make sure that we're 1:03:12.600 --> 1:03:14.920 being preventive about it, that we're not going to bear 1:03:14.960 --> 1:03:16.840 the costs. I think about how much a cost for 1:03:16.960 --> 1:03:19.240 recovery after a major storm at the lights go out, 1:03:19.360 --> 1:03:21.720 how many billions of dollars of revenue. 1:03:21.360 --> 1:03:24.560 Is and here we are, So what hope do you 1:03:24.560 --> 1:03:25.760 have that it kind of changes? 1:03:26.120 --> 1:03:27.160 I do have a lot of hope. 1:03:27.480 --> 1:03:30.000 I think that folks are really come This issue is 1:03:30.040 --> 1:03:32.960 coming to a head for the first time, at least 1:03:32.960 --> 1:03:36.280 in my career. Folks are really realizing that our grid 1:03:36.520 --> 1:03:39.600 needs a lot of investment. Everyone focuses on the generation side. 1:03:39.600 --> 1:03:43.000 They're excited about new plants and new gas and new 1:03:43.040 --> 1:03:44.280 solar and new wind. 1:03:45.280 --> 1:03:47.880 I hate to end on this, but what's like one 1:03:47.920 --> 1:03:49.200 scenario that keeps you up at night? 1:03:49.560 --> 1:03:51.400 Oh, there are a lot of scenarios that keep me 1:03:51.440 --> 1:03:53.080 up at night. Hurricane season keeps me up at night, 1:03:53.160 --> 1:03:55.200 hurricane seams and then absolutely keeps me U up at night. 1:03:55.240 --> 1:03:57.280 And so we just want to make sure that we 1:03:57.320 --> 1:04:00.440 can invest in our grid as much as possible to 1:04:00.440 --> 1:04:02.640 make sure that instead of the light's going out for 1:04:02.680 --> 1:04:04.320 five hours, they only go out for five minutes. 1:04:04.440 --> 1:04:07.600 Well, Maria Robinson, thank you so much. Reality check there, 1:04:07.600 --> 1:04:09.640 director of the Grid Deployment Office at the US Department 1:04:09.680 --> 1:04:10.160 of Energy. 1:04:10.960 --> 1:04:14.480 You're listening to the Bloomberg Business Week podcast. Catch US 1:04:14.520 --> 1:04:17.760 Live weekday afternoons from two to five pm. Easter Listen 1:04:17.800 --> 1:04:20.880 on Applecarplay and then brought auto with a Bloomberg Business 1:04:20.920 --> 1:04:24.600 app or watch US Live on YouTube. 1:04:25.320 --> 1:04:28.000 Well, empowering and updating the US power grid is definitely 1:04:28.000 --> 1:04:32.360 one big concern. So too is recycling. The Environmental Protection 1:04:32.480 --> 1:04:35.640 Agency estimates that the US has a combined recycling rate 1:04:35.680 --> 1:04:40.440 of only thirty two percent from materials including glass, plastic, cardboard, 1:04:40.520 --> 1:04:44.720 and paper. That figure reflects collections from industrial, commercial, and 1:04:44.800 --> 1:04:45.760 residential trash. 1:04:46.160 --> 1:04:49.600 On top of that, Carrol microplastic and pifos showing up 1:04:49.640 --> 1:04:52.240 seemingly everywhere now, and we knew that we wanted a 1:04:52.240 --> 1:04:55.640 reality check and what's working and what's not working? Tony 1:04:55.680 --> 1:04:59.360 Parata focuses on the sustainability and regenerative economy at PA 1:04:59.400 --> 1:05:02.400 Consulting and began with how we can do better when 1:05:02.400 --> 1:05:03.480 it comes to recycling. 1:05:03.880 --> 1:05:10.320 First, technology better mechanical recycling practices leveraged by AI and robotics. Second, 1:05:10.680 --> 1:05:13.640 new recycling methods are coming on the scene, things like 1:05:14.160 --> 1:05:18.800 chemical recycling that go beyond just mechanical recycling. And finally, 1:05:18.840 --> 1:05:21.560 what we're most excited about is a move away from 1:05:21.600 --> 1:05:27.240 plastics altogether into alternative materials. As low as those recycling 1:05:27.360 --> 1:05:31.080 grades are, it does represent opportunity both for enhanced collection, 1:05:31.360 --> 1:05:33.800 but also a new world and a new horizon of 1:05:33.840 --> 1:05:34.560 new materials. 1:05:34.600 --> 1:05:36.640 Well, Tony, you know, it's interesting too. And I always 1:05:36.680 --> 1:05:40.320 feel like when there's money to be made, people kind 1:05:40.360 --> 1:05:43.160 of can go and do the right thing. Or you know, 1:05:43.360 --> 1:05:45.520 tax policy can also make us do the right thing. 1:05:45.800 --> 1:05:48.760 What is it, though, that moves the needle the most, 1:05:49.960 --> 1:05:53.400 you know, in terms of sustainability initiatives, at least in 1:05:53.440 --> 1:05:56.840 your world, What you've seen that really kind of moves people, 1:05:57.000 --> 1:05:58.840 company industries to do the right thing. 1:06:00.040 --> 1:06:03.880 In the world of materials like plastics and aluminum and glass, 1:06:04.120 --> 1:06:06.080 what we've seen, especially here in the US, is a 1:06:06.080 --> 1:06:10.800 bottle return deposit system does a lot to move recycling 1:06:10.880 --> 1:06:13.560 rates upward. So here in the US and in my 1:06:13.600 --> 1:06:17.000 hometown of Connecticut, now we just raise the redunption rate 1:06:17.040 --> 1:06:20.080 from five cents to ten cents. It's been unchanged for 1:06:20.120 --> 1:06:22.440 the better part of three decades, so that was a 1:06:22.480 --> 1:06:26.720 major move. Bills and initiatives like that do an immense 1:06:26.760 --> 1:06:29.880 amount to be able to increase the collection of those materials. 1:06:30.000 --> 1:06:31.160 Is it just I mean, is it kind of a 1:06:31.200 --> 1:06:32.600 waste of time for us to be talking about the 1:06:32.600 --> 1:06:35.160 consumer end of this? Isn't doesn't so much of this 1:06:35.240 --> 1:06:37.560 happen on the industrial side of this stuff? 1:06:38.680 --> 1:06:40.960 I would agree if you take the mentality of I 1:06:41.000 --> 1:06:43.320 have a problem to solve, Yeah, I'm going to convince 1:06:43.480 --> 1:06:46.240 three billion individuals to quote unquote do the right thing. 1:06:46.400 --> 1:06:49.320 Or would I prefer to convince a thousand companies to 1:06:49.400 --> 1:06:50.800 change the way in which they go to the market. 1:06:50.800 --> 1:06:53.160 Well, what are the regulations around companies? Because it seems 1:06:53.160 --> 1:06:55.360 like that really is what moves the needle with this stuff. 1:06:56.560 --> 1:06:58.880 Regulation is definitely the tip of the sphere. There's been 1:06:58.920 --> 1:07:02.920 a lot of talk around extended producer responsibility and the 1:07:02.960 --> 1:07:07.120 cost that firms will incur as a result of manufacturing 1:07:07.160 --> 1:07:10.640 and producing these items, but again major opportunity for the 1:07:10.640 --> 1:07:13.000 companies that get it right. At the end of the day, 1:07:13.040 --> 1:07:17.920 sustainability is in essence talking about using resources properly and 1:07:18.000 --> 1:07:20.640 that allocation of those resources it means better business. 1:07:21.000 --> 1:07:24.280 Hey, Tony, how has the recent news from the SEC 1:07:24.320 --> 1:07:27.040 and Chair Gary Gensler had an impact? I'm thinking about 1:07:27.120 --> 1:07:30.000 the SEC now forcing companies to disclose their greenhouse gas 1:07:30.040 --> 1:07:32.720 emissions for the first time, but we should point out 1:07:33.160 --> 1:07:35.840 watered down a key requirement after there was some heavy 1:07:35.880 --> 1:07:39.080 lobbying from industry groups. But this alone, how might it 1:07:39.200 --> 1:07:42.280 change kind of the story and the impact and move 1:07:42.360 --> 1:07:44.160 us to a much more sustainable world. 1:07:45.240 --> 1:07:47.920 Well, I think the story that we've seen unfold for 1:07:47.960 --> 1:07:51.680 the past ten years is there is a real embracing 1:07:51.720 --> 1:07:54.800 of this concept, in particular by the capital markets. So 1:07:54.880 --> 1:07:57.400 the lack of a climate action plan inside the company 1:07:57.760 --> 1:08:00.400 is the lack of a business continuity plan makes you 1:08:00.480 --> 1:08:05.240 less investible. So by embracing the notion of sustainability, greenhouse 1:08:05.240 --> 1:08:08.400 gas emission and being transparent in that data collection in 1:08:08.440 --> 1:08:11.920 your activity in essence as a leader of an organization, 1:08:12.000 --> 1:08:15.040 you're helping make your firm a more investible asset class 1:08:15.480 --> 1:08:17.679 and your future proofing your own business. 1:08:18.840 --> 1:08:20.479 Hey, I want to talk a little bit about other 1:08:20.640 --> 1:08:23.800 issues that we've talked about on our program when it 1:08:23.800 --> 1:08:25.559 comes to sustainability, and a lot of that has to 1:08:25.600 --> 1:08:27.840 do with sort of the effects that we're living with 1:08:27.880 --> 1:08:30.120 each and every day because of decisions that have been 1:08:30.120 --> 1:08:33.719 made and production over the last fifty to one hundred years. 1:08:34.439 --> 1:08:37.120 We talk about single use plastics and the idea that 1:08:37.520 --> 1:08:40.040 we're starting to see microplastics show up in places that 1:08:40.400 --> 1:08:42.439 we do not want them. And we talk about pfast, 1:08:42.520 --> 1:08:46.439 these so called forever chemicals tainting water streams and the 1:08:46.439 --> 1:08:49.360 water that we're drinking just from the tap in certain areas. 1:08:49.560 --> 1:08:52.280 How do you think about all this stuff, Tony, in 1:08:52.360 --> 1:08:55.679 ways to kind of, like, I don't know, keep yourself safe. 1:08:57.200 --> 1:09:00.720 So it's clear to a large number of us that 1:09:00.800 --> 1:09:04.360 the amount of plastic that we're producing at scale is 1:09:04.520 --> 1:09:07.679 just untenable. On top of that, to your well made point, 1:09:07.720 --> 1:09:11.440 the medical community is stepping in and every week discovering 1:09:11.479 --> 1:09:14.160 more and more places that plastics in particular show up. 1:09:15.640 --> 1:09:19.320 What is heartening and promising is a whole raft of 1:09:19.360 --> 1:09:24.840 new technologies coming onto the landscape. So things like seaweeds, inalogenates, 1:09:24.840 --> 1:09:28.560 and plant based fibers are being used to replace plastics. 1:09:28.600 --> 1:09:32.280 In particular, You've got companies like not Pla. They won 1:09:32.320 --> 1:09:35.680 an Earthshot Prize late last year. PA actually helped them 1:09:35.720 --> 1:09:39.160 with their initial technology. We're seeing a whole revolution in 1:09:39.200 --> 1:09:42.040 the world of plant based fibers. There's a technology called 1:09:42.080 --> 1:09:44.880 pull pack where they're using fibers to replace plastics of 1:09:44.880 --> 1:09:49.040 all kinds. So, as disheartening as one may see, some 1:09:49.120 --> 1:09:52.560 of the data look like there are immense opportunities to 1:09:52.600 --> 1:09:55.800 be had and new technologies coming onto the marketplace every day. 1:09:56.080 --> 1:09:58.439 Right How quickly though? Can it change the needle? Like 1:09:58.520 --> 1:10:01.040 I totally get into it. Bloomberg very involved in the 1:10:01.080 --> 1:10:05.640 earth Shot Prize as you know, you know, but I 1:10:05.680 --> 1:10:08.800 still am surrounded by a lot of plastic And if 1:10:08.800 --> 1:10:12.640 I go to buy anything, there's certain aisles in supermarkets 1:10:12.680 --> 1:10:15.560 and various stores that all it is is plastic containers. 1:10:15.600 --> 1:10:19.000 So how do we You know, I talked about Gensler 1:10:19.080 --> 1:10:21.840 Chair sec Chair Gensler. I mean a lot of lobbying, 1:10:22.360 --> 1:10:26.000 and these are whether it's the petroleum industry, the plastics industries. 1:10:26.080 --> 1:10:28.160 I mean spend a lot in terms of lobbying. Their 1:10:28.240 --> 1:10:31.960 survivability is at stake. Some would say, so how do 1:10:32.000 --> 1:10:34.120 you ultimately move that needle? 1:10:35.360 --> 1:10:38.120 I would offer one example that just dropped last week. 1:10:38.240 --> 1:10:42.080 Crick the coffee company. They disrupted the world of coffee 1:10:42.160 --> 1:10:44.439 years ago with a single serve pot and we all 1:10:44.439 --> 1:10:46.519 get to choose the flavor and the style and the 1:10:46.560 --> 1:10:49.840 amount we want in our homes. They just launched last 1:10:50.040 --> 1:10:53.280 week in the US and new products called the k Round. 1:10:53.920 --> 1:10:58.120 It's basically a plastic free coffee capsule that you can 1:10:58.240 --> 1:11:00.960 use in your home without the need for using plastics 1:11:01.040 --> 1:11:05.160 or aluminum. It's that type of innovation that will not 1:11:05.240 --> 1:11:08.559 only solve the material in the waste side of it, 1:11:08.920 --> 1:11:10.960 but I expect that to be a huge commercial and 1:11:11.000 --> 1:11:11.879 consumer success. 1:11:12.080 --> 1:11:13.679 Wait, these are the ones. You don't have to send 1:11:13.720 --> 1:11:15.200 these back to recycle, right. 1:11:15.600 --> 1:11:18.760 No, it's literally a pressed coffee pod that's coded in 1:11:18.800 --> 1:11:22.559 a non plastic coating. You drop that pressed coffee pod 1:11:22.680 --> 1:11:26.360 into curious new machine and you get the same amazing 1:11:26.439 --> 1:11:29.880 experience that we all come to know and expect, just 1:11:29.920 --> 1:11:31.320 without all the extra packaging. 1:11:32.680 --> 1:11:33.480 Hallelujah. 1:11:33.920 --> 1:11:36.400 But you know there's some stuff that you just feel 1:11:36.400 --> 1:11:40.800 like can't be made in a sustainable way like legos, 1:11:41.840 --> 1:11:43.040 the things I step on every. 1:11:42.960 --> 1:11:46.160 Day, Tony, do you have a solution thirty seconds left 1:11:46.200 --> 1:11:48.160 for do you have a solution for something like legos? 1:11:48.880 --> 1:11:49.439 For lego? 1:11:49.680 --> 1:11:51.800 Not yet that we should have those folks call PA 1:11:51.880 --> 1:11:55.679 and we can help them. The medical industry is moving 1:11:55.840 --> 1:11:59.120 more sustainably. That's another key area that's been problematic for 1:11:59.160 --> 1:12:02.680 safety reasons and regulatory Yeah, and again technology is here 1:12:02.720 --> 1:12:04.960 to save us. There's a lot of amazing discoveries on 1:12:05.000 --> 1:12:05.400 the horizon. 1:12:05.479 --> 1:12:08.280 So when I really hurt myself on the lego, I 1:12:08.280 --> 1:12:09.920 will be given a medical solution. 1:12:09.640 --> 1:12:11.920 That will make sugar sugar. 1:12:12.840 --> 1:12:15.360 Yes, exactly, that's what you say when you step on 1:12:15.360 --> 1:12:15.679 a lego. 1:12:16.000 --> 1:12:20.040 Those things really really really hurt, Tony, Thank you so much, 1:12:20.080 --> 1:12:22.559 really appreciate it. Certainly a space that we care about, 1:12:22.600 --> 1:12:24.360 and UH is great to get some time with you. 1:12:24.439 --> 1:12:28.519 Tony Parata. He is sustainability and regenerative economy expert at 1:12:28.560 --> 1:12:32.040 PA Consulting Jettings from Westbork, Connecticut. Those things hurt. 1:12:32.080 --> 1:12:33.680 They've been, to be fair, they have been trying to 1:12:33.680 --> 1:12:35.679 make them more sustainable. They can't figure out any way 1:12:35.720 --> 1:12:37.560 to make my understanding as they can't figure out a 1:12:37.600 --> 1:12:39.760 way to make them with a material that's not plastic 1:12:39.880 --> 1:12:41.000 that has the same precision. 1:12:41.160 --> 1:12:43.320 Now I get it right so that it's still a 1:12:43.360 --> 1:12:45.320 toy that kind of works. All right, Where to come, folks, 1:12:45.360 --> 1:12:46.080 This is Bloomberg. 1:12:48.520 --> 1:12:52.400 You're listening to the Bloomberg Business Week podcast. Listen live 1:12:52.479 --> 1:12:55.080 each weekday. He is starting at two pm Eastern Apple 1:12:55.160 --> 1:12:58.080 car Play and Android Auto with the Bloomberg Business Ad. 1:12:58.280 --> 1:13:01.000 You can also listen live on was on Alexa from 1:13:01.000 --> 1:13:04.200 our flagship New York station Jo Just Say Alexa playing 1:13:04.240 --> 1:13:05.559 Bloomberg eleven thirty. 1:13:06.439 --> 1:13:08.640 Well, Carol. As I've prepared for our next guests, I 1:13:08.640 --> 1:13:10.919 went back and I reread a few columns from Bloomberg 1:13:10.960 --> 1:13:13.840 opinions Mark Gongloff, who covers climate change, and I came 1:13:13.880 --> 1:13:16.639 across some really startling stuff. Here's when he wrote. Recently, 1:13:16.680 --> 1:13:19.960 you'll probably remember this one. Climate fuel disasters killed at 1:13:20.040 --> 1:13:23.360 least twelve thousand people last year. That's according to one count. 1:13:23.439 --> 1:13:25.360 A change in climate has already killed at least four 1:13:25.360 --> 1:13:27.960 million people globally in the past twenty years. That's according 1:13:28.000 --> 1:13:31.000 to a study released in January by a biologist at 1:13:31.000 --> 1:13:34.759 Georgetown University Medical Center, and last year the US alone 1:13:34.800 --> 1:13:37.920 suffered at twenty eight natural disasters costing a billion dollars 1:13:38.040 --> 1:13:41.400 or more, a record that's according to the Noah National 1:13:41.400 --> 1:13:42.879 Centers for Environmental Information. 1:13:43.080 --> 1:13:45.080 Right, we just talked with our TV colleagues right about 1:13:45.320 --> 1:13:47.559 people leaving Florida because it's getting too hot, and you've 1:13:47.600 --> 1:13:52.320 got homes that campionsured because of climate change. Jonathan Vigliotti 1:13:52.400 --> 1:13:55.360 has seen the devastation of many of these disasters firsthand. 1:13:55.360 --> 1:13:58.559 He's a national correspondent for CBS News. His new book, 1:13:58.640 --> 1:14:01.320 out tomorrow, gives it's a first hand account of the 1:14:01.360 --> 1:14:04.080 stories of people who've been affected by climate change, and 1:14:04.120 --> 1:14:07.480 the stories spanned the country from the Pacific Northwest to Louisiana, 1:14:07.560 --> 1:14:12.040 North Carolina, New York, California, Hawaiian more. As we know, increasingly, 1:14:12.240 --> 1:14:14.200 no one in the globe, or no one certainly across 1:14:14.200 --> 1:14:16.280 the United States, but no one across the globe is 1:14:16.320 --> 1:14:17.559 immune to climate change. 1:14:17.600 --> 1:14:17.800 Yeah. 1:14:17.800 --> 1:14:20.000 The book is called Before It's Gone, Stories from the 1:14:20.000 --> 1:14:23.200 front lines of Climate change and small town America. Jonathan 1:14:23.360 --> 1:14:26.400 joins us from Los Angeles. Jonathan, good to have you 1:14:26.600 --> 1:14:29.839 with us this afternoon. First of all, congratulations on the book. 1:14:30.200 --> 1:14:31.720 I want to go back to the genesis of this 1:14:31.760 --> 1:14:35.920 book because you've covered a lot in your career. You 1:14:35.920 --> 1:14:38.280 were based in Europe at one point, you've been based 1:14:38.320 --> 1:14:40.400 here in the US for a few years. At what 1:14:40.479 --> 1:14:43.360 point where you on assignment and you realized, Okay, this 1:14:43.439 --> 1:14:45.040 is the story I need to tell, this is the 1:14:45.040 --> 1:14:46.080 book I need to write. 1:14:46.160 --> 1:14:48.479 Well, great question, and first, thank you both for having 1:14:48.479 --> 1:14:50.320 me on. It's a pleasure to be here. For me, 1:14:50.640 --> 1:14:53.639 it has been an evolution because when I first started 1:14:53.680 --> 1:14:57.160 covering these stories environmental disasters, I failed to make the 1:14:57.280 --> 1:15:00.280 link between climate change, the role it was playing and 1:15:00.360 --> 1:15:03.600 radicalizing our weather, and the role that radicalized weather was 1:15:03.640 --> 1:15:07.120 having on our main streets across the country. For me, 1:15:07.560 --> 1:15:10.519 one of the wake up calls was literally began with 1:15:10.600 --> 1:15:12.960 a wake up call midnight. I was sent to a 1:15:13.040 --> 1:15:17.519 fire in Healdsburg, California, so northern California Wine Country, and 1:15:17.560 --> 1:15:19.800 my team and I responded to a fire that was 1:15:19.880 --> 1:15:22.280 up in the mountain side. We were with first responders. 1:15:22.720 --> 1:15:24.920 We were looking at this fire burning about a mile 1:15:24.960 --> 1:15:27.200 a mile and a half away. At the time, it 1:15:27.200 --> 1:15:29.160 didn't seem like it was much of a threat, but 1:15:29.240 --> 1:15:32.439 the wind picked up and that fire quickly grew and 1:15:32.520 --> 1:15:35.040 spread to where we were, and we were with fire 1:15:35.080 --> 1:15:38.679 crews stationed on this mountaintop, and I had never seen 1:15:38.720 --> 1:15:41.960 such fear and panic in their eyes, which then became 1:15:42.040 --> 1:15:45.439 vocalized as one of the chiefs up on the hill said, go, 1:15:45.439 --> 1:15:49.839 go go. The panic set it all, and we quickly 1:15:49.840 --> 1:15:52.280 realized we were in danger, and so we followed this 1:15:52.439 --> 1:15:55.599 crew as they tried to escape that mountain, and we 1:15:55.720 --> 1:15:58.760 lost sight of their headlights because the fire had grown 1:15:58.800 --> 1:16:01.080 in such intensity and so quick quickly that all the 1:16:01.120 --> 1:16:03.640 flames were blacked out by the smoke, and we accidentally 1:16:03.640 --> 1:16:07.080 went off onto a dirt road and nearly got trapped. 1:16:07.640 --> 1:16:09.840 We ran into what became a dead end. We weren't 1:16:09.880 --> 1:16:12.720 sure my team and I what we should do, if 1:16:12.760 --> 1:16:15.479 we should stay or turn around. We ultimately decided to 1:16:15.600 --> 1:16:19.200 turn around, and thank god we did because, as you 1:16:19.280 --> 1:16:22.360 clearly know my being here, we survived. But when we 1:16:22.400 --> 1:16:25.559 went back to look the next day, a tree had 1:16:25.600 --> 1:16:28.920 fallen down and it blocked off that road. When we 1:16:29.160 --> 1:16:31.840 later after escaping, made our way down the hillside and 1:16:31.920 --> 1:16:33.880 joined the firefighters we were with, they said they had 1:16:33.880 --> 1:16:37.200 never experienced anything like that before. These are men and 1:16:37.240 --> 1:16:40.160 women that had been trained for years, decades in some 1:16:40.240 --> 1:16:43.639 cases to battle fires, and they were being caught off 1:16:43.680 --> 1:16:46.120 guard by mother nature in a way they had never 1:16:46.120 --> 1:16:48.480 seen before and in a panic that I never expected 1:16:48.479 --> 1:16:51.320 from first responders. So I think in that moment I 1:16:51.439 --> 1:16:55.360 wrote a Facebook post and that kind of triggered the 1:16:55.400 --> 1:16:57.120 beginnings of this book. 1:16:57.400 --> 1:17:00.920 Jonathan, and I feel like I almost guess the answer 1:17:00.960 --> 1:17:03.759 to this, but this idea of never seen that before, 1:17:03.920 --> 1:17:07.400 once in a lifetime, storm, once in a lifetime, you know, 1:17:08.200 --> 1:17:11.479 heat wave, if you will. It used to be once 1:17:11.479 --> 1:17:13.599 in a lifetime. We heard those things, but now we 1:17:13.680 --> 1:17:17.120 hear them rather frequently. Talk to us about kind of 1:17:17.160 --> 1:17:20.240 how that started. You started to see that as unfortunately 1:17:20.600 --> 1:17:21.720 a trend here. 1:17:21.760 --> 1:17:26.040 Yeah, time and time again, a historic wildfire, a historic hurricane, 1:17:26.160 --> 1:17:29.200 a historic tornado. After a while, you almost get tired 1:17:29.240 --> 1:17:32.240 of saying historic because it just keeps repeating itself, and 1:17:32.560 --> 1:17:34.640 the next storm out pace is the one before it 1:17:34.680 --> 1:17:38.960 that was also historic. As a journalist, as a storyteller, 1:17:39.040 --> 1:17:40.880 I feel like we have this unique power to help 1:17:40.880 --> 1:17:43.200 connect the dots to the world around us, how it 1:17:43.240 --> 1:17:46.559 all works. And I've been given this unique access to 1:17:46.600 --> 1:17:48.519 the frontlines of these storms and ways. I think it's 1:17:48.520 --> 1:17:50.519 safe to say, most people have not, and I have 1:17:50.600 --> 1:17:54.280 been able to see climate change and the science behind 1:17:54.280 --> 1:17:56.439 it in action and these very real time events that 1:17:56.439 --> 1:17:59.320 are happening right now, not ten twenty years down the road, 1:17:59.600 --> 1:18:02.200 and when we say right now, in historic ways time 1:18:02.240 --> 1:18:06.000 and time again. And I hoped in writing this book, 1:18:06.080 --> 1:18:09.240 I could take viewers and readers along for their journey 1:18:09.280 --> 1:18:12.519 to those frontlines so that they too could connect those 1:18:12.560 --> 1:18:17.759 dots to better understand something as oftentimes abstract as climate change, 1:18:17.760 --> 1:18:20.559 how it really is taking effect in very real ways 1:18:21.000 --> 1:18:25.280 in communities across the country. It is an abstract conversation. 1:18:25.479 --> 1:18:27.280 It is hard for a lot of people to understand 1:18:27.360 --> 1:18:29.800 climate change in the science behind it, including myself. And 1:18:29.840 --> 1:18:32.559 I mentioned to you that I failed to initially talk 1:18:32.600 --> 1:18:35.160 about climate change and link those dots. I think the 1:18:35.160 --> 1:18:37.439 more we talk about this, the more we link those 1:18:37.479 --> 1:18:41.080 dots and make those connections, the more people will understand 1:18:41.120 --> 1:18:44.720 the climate threat, what that threat means to their communities, 1:18:44.720 --> 1:18:47.040 and perhaps what they could do. And that's my hope 1:18:47.479 --> 1:18:50.000 action that can be taken right now to make these 1:18:50.040 --> 1:18:51.160 communities more resilient. 1:18:51.320 --> 1:18:52.720 And Jonathan, we want to go into some of those 1:18:52.760 --> 1:18:54.280 stories because I agree with you that the more we 1:18:54.320 --> 1:18:57.240 tell these stories, hopefully it kind of clicks and sinks in. 1:18:57.280 --> 1:19:01.280 But having said that, we all been kind of talking 1:19:01.280 --> 1:19:05.360 about it for a while with kind of an understanding, like, hey, 1:19:05.400 --> 1:19:09.760 guys years ago saying, we see things are going in 1:19:09.800 --> 1:19:12.360 the wrong direction, and I feel like I almost feel 1:19:12.360 --> 1:19:15.559 like it's with guns in this country. It's like every 1:19:15.560 --> 1:19:17.880 time that there's some kind of mass shooting, we say, okay, 1:19:17.920 --> 1:19:21.160 never again, and yet here we are and we continue 1:19:21.160 --> 1:19:24.120 to report on it. Why do you, as you obviously 1:19:24.160 --> 1:19:26.840 report on it a lot, have lots of stories in 1:19:26.880 --> 1:19:30.240 this book, and you see the devastation, and yet it 1:19:30.280 --> 1:19:33.000 does seem like we continue to put this no pun 1:19:33.040 --> 1:19:35.320 intended on kind of a back burner, if you will. 1:19:35.600 --> 1:19:39.120 I think about Dan Gilbert. He's a psychologist at Harvard. 1:19:39.160 --> 1:19:41.479 He was kind of a north star a ted talk 1:19:41.520 --> 1:19:44.840 that I watched him give on YouTube years ago, and 1:19:44.880 --> 1:19:47.200 he was actually talking about the key to happiness, But 1:19:47.280 --> 1:19:50.040 in this conversation was also speaking about this part of 1:19:50.080 --> 1:19:54.360 our brain known as the prefrontal cortex. And it's this function, 1:19:54.439 --> 1:19:56.519 this feature that we have on like any other animal 1:19:56.560 --> 1:19:59.440 in the Kingdom, that gives us this ability to imagine 1:20:00.080 --> 1:20:03.720 things before they happen, and it's largely based off of storytelling, 1:20:03.800 --> 1:20:07.240 stories told to us by friends, family, by the media. 1:20:07.320 --> 1:20:11.040 And it's this adaptation essentially that provides us with tools 1:20:11.080 --> 1:20:14.639 to not do foolish things. And it actually really does 1:20:14.680 --> 1:20:16.800 work as long as the information is clear and that 1:20:16.880 --> 1:20:21.639 imagination is triggered. I've thought about those anti smoking campaigns. 1:20:21.640 --> 1:20:23.879 I'm not sure if you've seen any of those on television, 1:20:23.920 --> 1:20:26.320 the one that features someone in some state of suffering 1:20:26.680 --> 1:20:28.760 telling others not to pick up a pack of cigarettes. 1:20:28.800 --> 1:20:31.639 In New York City, the Department of Health there found 1:20:31.640 --> 1:20:34.000 for every dollar it's spent on its program, it saved 1:20:34.040 --> 1:20:37.479 thirty two dollars in medical costs. So the information was clear, 1:20:37.560 --> 1:20:40.600 people understood it. They knew to either stop smoking or 1:20:40.640 --> 1:20:42.800 to not pick up smoking to begin with. But when 1:20:42.880 --> 1:20:46.799 it comes to climate science, it can be overwhelming, including 1:20:46.800 --> 1:20:50.000 the solutions which can be daunting, and that perhaps explains 1:20:50.040 --> 1:20:53.440 why in the past four decades, according to one organization 1:20:53.520 --> 1:20:56.639 that tracks real estate, six times more people moved into 1:20:56.760 --> 1:21:00.559 riskier coastal communities than they did into safer inland ones 1:21:00.560 --> 1:21:03.240 that were nearby. These aren't people that are looking to 1:21:03.320 --> 1:21:05.439 intentionally put themselves in harms way. Many of them have 1:21:05.520 --> 1:21:07.760 thirty year mortgages, so they expect that they're going to 1:21:07.800 --> 1:21:10.559 be safe for the duration of their mortgage at least. 1:21:11.000 --> 1:21:15.320 I think the failure to digest this climate science comes 1:21:15.360 --> 1:21:19.320 from a failure, and I'll take my own responsibility in 1:21:19.360 --> 1:21:22.360 this a failure. As I turn off this bone that 1:21:22.439 --> 1:21:28.040 was supposed to be I apologies work from home. It 1:21:28.120 --> 1:21:30.720 speaks to a failure on my part, and I'll just 1:21:30.760 --> 1:21:33.680 take my own responsibility to connect those dots while in 1:21:33.720 --> 1:21:37.120 the field, especially early on. I think the more that 1:21:37.200 --> 1:21:40.280 we show the real life images and connect it to 1:21:40.320 --> 1:21:44.120 the science without fear of what viewers will say in response, 1:21:44.640 --> 1:21:47.240 I think the more people will start to see, will 1:21:47.280 --> 1:21:51.560 listen and when informed, take action. But that comes with repetition, 1:21:52.200 --> 1:21:55.040 and it's critical that we continue this kind of reporting. 1:21:55.360 --> 1:21:57.960 You know, I'm a Californian. I think you live in California. 1:21:58.640 --> 1:22:00.800 This is not necessarily a place where like I would 1:22:00.840 --> 1:22:02.599 love to live back in California, but I think about 1:22:02.600 --> 1:22:04.800 my family back in California, and I mean, do you 1:22:04.840 --> 1:22:08.439 think about where you live and right now and potential 1:22:08.439 --> 1:22:09.560 climate implications. 1:22:09.920 --> 1:22:12.120 I do every single day. I bought my home just 1:22:12.160 --> 1:22:15.640 before COVID, and I had a difficult time getting the 1:22:15.720 --> 1:22:19.240 right kind of insurance, affordable insurance. I live in an 1:22:19.280 --> 1:22:21.280 area that is at low risk of wildfire, so I 1:22:21.280 --> 1:22:23.479 didn't expect that to be an issue, but insurance was 1:22:23.560 --> 1:22:25.880 very costly until I found the right insure, and it 1:22:25.920 --> 1:22:28.800 took a lot of research and investigating on my own, 1:22:28.840 --> 1:22:30.640 which a lot of people don't have the time to 1:22:30.680 --> 1:22:33.080 even do that, and so I was fortunate to find it. 1:22:33.160 --> 1:22:35.360 But of course I think about it every day in 1:22:35.439 --> 1:22:37.680 terms of the threat and the looming threat when there 1:22:37.680 --> 1:22:40.080 are fires in the area. Of course I'm aware, but 1:22:40.080 --> 1:22:42.280 I'm in Hollywood, so I'm surrounded by concrete, so I 1:22:42.280 --> 1:22:43.320 am better off than most. 1:22:43.400 --> 1:22:44.920 Well, it's something we talk about a lot through the 1:22:45.680 --> 1:22:48.240 angle of insurance companies. Jonathan Carol and I were talking 1:22:48.560 --> 1:22:53.120 just about, you know, kind of your experience covering natural 1:22:53.120 --> 1:22:55.400 disasters for such a long period of time, jetting to 1:22:55.439 --> 1:22:58.559 different parts of the country and talking to people who 1:22:58.800 --> 1:23:03.639 have experienced such devastating loss from Hawaii to the South 1:23:03.680 --> 1:23:07.000 coast of the United States to the Pacific Northwest in 1:23:07.040 --> 1:23:09.479 your home state of California too. And I'm wondering if 1:23:09.479 --> 1:23:12.000 you could just share with us a couple stories that 1:23:12.080 --> 1:23:14.160 stand out to you from your reporting that you included 1:23:14.160 --> 1:23:17.360 in the book, particularly interested in your experience in Hawaii, 1:23:17.479 --> 1:23:20.160 a chapter that you added just before the book went 1:23:20.200 --> 1:23:21.200 to publish. 1:23:21.400 --> 1:23:24.639 Yeah, thank you for that question. And Lahina in many 1:23:24.680 --> 1:23:28.400 ways offers all of us lessons to learn from as 1:23:28.439 --> 1:23:31.639 long as we listen. So we were launched to Lahina 1:23:31.880 --> 1:23:34.479 less than twelve hours after the ton was destroyed. We 1:23:34.479 --> 1:23:37.360 were one of the first network teams inside Lahina. We 1:23:37.400 --> 1:23:40.360 couldn't drive in. We were met by a roadblock that 1:23:40.439 --> 1:23:44.120 we ultimately ended up bypassing by taking a chartered boat 1:23:44.560 --> 1:23:47.000 an hour and a half to the centered shoreline. And 1:23:47.000 --> 1:23:48.800 what we discovered in my book I described as an 1:23:48.840 --> 1:23:54.080 environmental holocaust. Home after home, business after business was destroyed, 1:23:54.240 --> 1:23:58.160 and we met survivors who had wrote out the storm 1:23:58.960 --> 1:24:03.320 who were serving the damage. They looked like ghosts. Many 1:24:03.520 --> 1:24:07.240 had no evacuation order issued. There were no evacuation orders 1:24:07.240 --> 1:24:10.040 issued in most parts of the island, and those that 1:24:10.080 --> 1:24:12.720 did survive saw the flames outside of their windows and 1:24:12.760 --> 1:24:15.400 took action to escape on their own. Many did not 1:24:15.520 --> 1:24:17.800 survive because they were trapped in their cars. More than 1:24:17.840 --> 1:24:20.759 one hundred people were killed and the days and weeks 1:24:20.800 --> 1:24:23.960 that followed. What is haunting to me is how this 1:24:24.160 --> 1:24:27.320 was described as an explosion. We heard local leaders describe 1:24:27.360 --> 1:24:29.080 time and time again this fire as like a bomb 1:24:29.160 --> 1:24:31.719 going off, implying that there was no time to take action. 1:24:32.160 --> 1:24:33.760 But we would later learn that there was actually a 1:24:33.800 --> 1:24:36.000 nearly decade long fuse that could have been put out 1:24:36.000 --> 1:24:39.439 at any point, because in twenty fourteen, scientists on the 1:24:39.439 --> 1:24:41.759 island came out with a report that said the warming 1:24:41.800 --> 1:24:45.280 atmosphere was leading to an increased fire threat, and they 1:24:45.360 --> 1:24:49.720 even recommended things that could be taken mitigation efforts to 1:24:49.840 --> 1:24:53.920 reduce the threat by removing dry invasive grasses, restoring wetlands, 1:24:53.960 --> 1:24:58.920 conserving water, using fire resistant materials when building homes or 1:24:59.000 --> 1:25:02.719 restoring them. These are materials that qualified for tax credits 1:25:02.760 --> 1:25:06.760 and would reduce insurance costs. And ultimately that report was 1:25:06.800 --> 1:25:09.599 filed away by local leaders and action wasn't taken in time. 1:25:09.960 --> 1:25:12.360 But in the miles on path of destruction that my 1:25:12.400 --> 1:25:15.200 team and I walked, as we walked along historic Front Street, 1:25:15.720 --> 1:25:20.360 there was one home that did survive. It was unscathed. Today, 1:25:20.360 --> 1:25:22.760 it's known by locals in Lahaina as the house with 1:25:22.840 --> 1:25:26.439 the red roof, and those homeowners took those remedies that 1:25:26.479 --> 1:25:30.040 were offered by scientists. They were initially concerned because of termites. 1:25:30.080 --> 1:25:33.000 They removed dry invasive grasses around their house, trees and 1:25:33.000 --> 1:25:36.360 brushes that were too close to the home. They used 1:25:36.360 --> 1:25:39.000 a metal red roof on top of their house, and 1:25:39.040 --> 1:25:41.679 they used river rocks as a moat around their house, 1:25:41.720 --> 1:25:45.000 and ultimately it prevented the fire from reaching their home. 1:25:45.520 --> 1:25:50.000 This was one homeowner that took action on their own. 1:25:50.280 --> 1:25:53.320 They listened, they took action, and they survived and across 1:25:53.400 --> 1:25:55.000 the country. And the reason I say this is a 1:25:55.080 --> 1:25:58.000 lesson to be learned by storms of other names. There 1:25:58.040 --> 1:26:01.640 are other houses with the red roofs that have survived. 1:26:02.000 --> 1:26:04.479 And this is what I call habitat change, what is 1:26:04.560 --> 1:26:08.520 known by scientists as habitat change. By restoring our habitats, 1:26:08.920 --> 1:26:12.439 we can build more resilient communities so when extreme weather 1:26:12.520 --> 1:26:15.600 does hit, we can survive. We need more homes with 1:26:15.640 --> 1:26:18.320 the red roof. And to me, that story of that 1:26:18.479 --> 1:26:22.479 house really symbolizes the hope that we should all have 1:26:23.320 --> 1:26:26.000 and how we should feel empowered as individuals and as 1:26:26.120 --> 1:26:30.280 individual communities to come together and to take action before 1:26:30.320 --> 1:26:30.760 it's too. 1:26:30.720 --> 1:26:34.519 Late, there's incredible fires. Obviously as a result of climate change. 1:26:34.520 --> 1:26:40.120 There's also increasing water and rising water levels. If you will, 1:26:40.280 --> 1:26:44.200 your story where you went up to Greenland and took 1:26:44.200 --> 1:26:46.639 a look at the Arctic ice melt, to me, there's 1:26:46.640 --> 1:26:49.559 another thing that reminds me that there is kind of 1:26:49.760 --> 1:26:53.600 no way of going back. When I see stories or 1:26:53.640 --> 1:26:55.800 hear stories about that, or see pictures about that. Talk 1:26:55.800 --> 1:26:57.479 to us a little bit about that, and I am 1:26:57.520 --> 1:26:59.200 curious if there was a story for you that was 1:26:59.200 --> 1:27:02.200 like a huh, you know, we're getting maybe closer to 1:27:02.240 --> 1:27:03.960 a point of no return here when it comes to 1:27:04.160 --> 1:27:05.400 the climate impact. 1:27:05.840 --> 1:27:08.120 And that could be one of them. Because our glaciers 1:27:08.160 --> 1:27:10.280 are like a candle burning on both ends. You have 1:27:10.320 --> 1:27:13.759 our warming atmosphere, which is heating up these glaciers from above. 1:27:13.880 --> 1:27:17.040 Then you have the warming water, which is heating these 1:27:17.080 --> 1:27:19.599 glaciers up from below. And so you have this rapid 1:27:19.640 --> 1:27:25.400 ice mell and this influx of water into our oceans 1:27:25.479 --> 1:27:28.439 leading to sea level rise and responsible for in the 1:27:28.439 --> 1:27:32.759 past four decades of forty percent chance of hurricanes growing 1:27:33.040 --> 1:27:37.559 into massive and major hurricanes capable of causing billions of 1:27:37.560 --> 1:27:40.400 dollars in destruction. As you mentioned, last year alone, twenty 1:27:40.439 --> 1:27:44.120 eight storms that caused more than a billion dollars in damage. 1:27:44.120 --> 1:27:46.920 When I was there on those front lines with the scientists, 1:27:46.920 --> 1:27:50.080 I think the aha moment was some of the frustration 1:27:50.160 --> 1:27:53.320 they expressed and the great lengths they go to to 1:27:53.400 --> 1:27:58.799 collect their data to hopefully help awaken those that aren't 1:27:59.000 --> 1:28:01.720 there on those front line to the crisis that is emerging, 1:28:01.840 --> 1:28:04.080 and ultimately so many worried, and so many of those 1:28:04.120 --> 1:28:07.439 scientists worried that it would fall on deaf ears. It 1:28:07.560 --> 1:28:09.200 was one of the main themes in my book, this 1:28:09.320 --> 1:28:12.680 idea that before every disaster, there is a scientist that 1:28:12.760 --> 1:28:15.960 has been ignored and being there on those frontlines seeing 1:28:16.000 --> 1:28:19.320 that work being carried out, and also understanding uniquely just 1:28:19.360 --> 1:28:23.719 from their perspective, that ultimately comes down to communicating that work. Clearly, 1:28:24.520 --> 1:28:27.480 that really changed the way that I came to understand 1:28:27.640 --> 1:28:32.360 perhaps people's difficulty in absorbing the information being presented to 1:28:32.400 --> 1:28:34.559 them and the looming threat that awaits if we don't 1:28:34.600 --> 1:28:35.080 take action. 1:28:35.240 --> 1:28:38.880 Well, let's talk about perhaps some policy prescriptions here. And 1:28:38.960 --> 1:28:41.559 as a reporter, you go to these places and you 1:28:41.640 --> 1:28:44.040 report the facts, you tell people's stories, you bring things 1:28:44.080 --> 1:28:47.120 to light. If there's a message that you want policy 1:28:47.120 --> 1:28:50.599 makers to understand from your reporting, from your work, from 1:28:50.640 --> 1:28:53.760 your book. What is it and what recommendations perhaps you 1:28:53.800 --> 1:28:54.360 have for them. 1:28:54.640 --> 1:28:58.760 You know, the Infrastructure Deal, the Inflation Reduction Act both 1:28:58.800 --> 1:29:03.400 infuse billions and millions of dollars to address these multiple 1:29:03.400 --> 1:29:07.120 crises from climate change, which is the release of greenhouse 1:29:07.160 --> 1:29:10.160 gases into the atmosphere, and we can reduce that through 1:29:10.280 --> 1:29:14.320 green alternatives to habitat change the way we build and 1:29:14.360 --> 1:29:17.360 where we build, and how we build more resilient. I 1:29:17.360 --> 1:29:22.720 think my message would be to empower local municipalities to 1:29:22.880 --> 1:29:27.000 take action to help get the information into residence hands, 1:29:27.320 --> 1:29:30.280 to cut the bureaucratic red tape so that that funding 1:29:30.479 --> 1:29:34.519 is easily available and it's easy for people like myself, 1:29:34.560 --> 1:29:38.519 people like you, everyday residence to understand how to access 1:29:38.560 --> 1:29:41.840 it so that they can be funded in their efforts 1:29:42.280 --> 1:29:45.600 to restore their communities if they've lost them already, or 1:29:45.640 --> 1:29:47.760 to make them more resilient for those that are still 1:29:47.760 --> 1:29:48.720 standing well. 1:29:48.760 --> 1:29:51.920 And I love how you divide your book into the 1:29:51.960 --> 1:29:56.000 four elements firewater, earth, and air, and you just realize 1:29:56.040 --> 1:30:02.439 through your reporting the stories that were slowly increasingly rapidly 1:30:02.880 --> 1:30:05.000 chipping away at all of those elements, and that's what's 1:30:05.080 --> 1:30:08.599 necessary for existence. So you know, we're hitting it kind 1:30:08.640 --> 1:30:11.400 of at all of those levels. It's upsetting to say, 1:30:11.720 --> 1:30:15.479 to say the least, Jonathan, thank you so much. Really 1:30:15.479 --> 1:30:17.760 appreciate it, and good luck with the book. 1:30:17.920 --> 1:30:20.280 Thank you so much, Carolynsim. I really appreciate the conversation. 1:30:20.520 --> 1:30:22.679 The book is before it's gone. Stories from the front 1:30:22.680 --> 1:30:25.559 lines of climate change in small town America. We've been 1:30:25.560 --> 1:30:28.960 talking with Jonathan Vigliotti, of course national correspondent over at 1:30:29.000 --> 1:30:30.240 CBS News. 1:30:30.600 --> 1:30:34.080 You're listening to the Bloomberg Business Week podcast. Catch us 1:30:34.200 --> 1:30:37.400 live weekday afternoons from two to five pm Easter Listen 1:30:37.479 --> 1:30:39.640 on Apple car Play and ed Brote Auto with a 1:30:39.640 --> 1:30:44.040 Bloomberg Business app, or watch us live on YouTube. 1:30:45.160 --> 1:30:47.240 What I'm about to tell you is a matter of 1:30:47.280 --> 1:30:48.479 life and death. 1:30:51.479 --> 1:30:54.639 If the soil dies, we die. 1:30:54.920 --> 1:30:57.160 But there's a way to save our precious soils. 1:30:58.439 --> 1:31:00.000 It's called regenerate. 1:31:03.320 --> 1:31:07.920 Regeneration is not just restoring the land to the state 1:31:08.000 --> 1:31:10.160 that we found it out, but actually making it better. 1:31:10.920 --> 1:31:13.479 All right, what you've been hearing and watching for those 1:31:13.520 --> 1:31:16.760 who are watching on our streaming service and YouTube, that 1:31:17.080 --> 1:31:21.080 is from the documentary Common Ground, which looks into how 1:31:21.280 --> 1:31:25.320 food production and agriculture can be done better with less 1:31:25.400 --> 1:31:28.680 environmental impact by looking at our past and to our 1:31:28.760 --> 1:31:32.440 past and looking to regenerative agriculture. 1:31:32.520 --> 1:31:34.439 For more on the film, and it's deep dive into 1:31:34.479 --> 1:31:37.520 the agricultural history of the US. We welcome the filmmakers 1:31:37.560 --> 1:31:39.720 behind it, the husband and wife team of Josh and 1:31:39.760 --> 1:31:42.960 Rebecca Tickle. Thanks so much for joining us. I just 1:31:43.000 --> 1:31:46.280 want to start with how you guys got into this. Rebecca, 1:31:46.280 --> 1:31:47.960 I want to start with you talk to us a 1:31:48.000 --> 1:31:52.080 little bit about why you wanted to dive into regenerative 1:31:52.120 --> 1:31:55.640 agriculture and really the agricultural history of the US. 1:31:56.600 --> 1:31:59.600 We've made twenty films on the environment, almost all of 1:31:59.640 --> 1:32:03.439 them are documentaries, and we started off focusing on reducing 1:32:03.520 --> 1:32:06.080 our emissions, and then we realized at a certain point 1:32:06.280 --> 1:32:08.680 that even if we reduced all of our missions and 1:32:08.720 --> 1:32:12.000 stopped emitting today, that it wasn't going to take that 1:32:12.120 --> 1:32:15.040 legacy load of carbon that we've admitted into the atmosphere 1:32:15.240 --> 1:32:15.599 and do. 1:32:15.600 --> 1:32:16.320 Anything with it. 1:32:16.400 --> 1:32:18.559 And the only way we can actually do anything with 1:32:18.600 --> 1:32:24.080 it is through biosequestration using plants, and so regenerative agriculture 1:32:24.200 --> 1:32:28.160 it's a way of building soil that not only benefits 1:32:28.200 --> 1:32:31.600 the environment, draws down that legacy ton of carbon that 1:32:31.640 --> 1:32:34.120 we've put up into the atmosphere, but it also helps 1:32:34.120 --> 1:32:35.400 farmers to make a profit. 1:32:35.560 --> 1:32:36.439 And so as soon as. 1:32:36.320 --> 1:32:40.120 We learned this, and as parents, we knew that we 1:32:40.240 --> 1:32:42.559 had to take this message and tell it as well 1:32:42.560 --> 1:32:44.960 as we can and broadcast it as loudly as we 1:32:45.000 --> 1:32:47.639 could to as many people as we can, because right 1:32:47.640 --> 1:32:51.760 now everyone is facing this climate anxiety. We're facing climate anxiety, 1:32:52.120 --> 1:32:54.040 and we don't have to. We can take that same 1:32:54.120 --> 1:32:57.760 energy and put it towards the solution of regenerating our 1:32:57.760 --> 1:33:00.080 soil and stabilizing the climate. So as soon as we 1:33:00.160 --> 1:33:02.360 discovered that, and we learned that, we knew that we 1:33:02.360 --> 1:33:04.760 were going to take our skills as filmmakers and use 1:33:04.800 --> 1:33:05.759 it to tell that story. 1:33:05.880 --> 1:33:08.400 Josh and Rebecca take a step back. You know, over 1:33:08.439 --> 1:33:10.960 the years, and a few years ago, I should say, 1:33:12.200 --> 1:33:14.679 remember working with the folks of a Chipotle who've also 1:33:14.800 --> 1:33:17.760 done had done some films and really looked into you know, 1:33:17.840 --> 1:33:21.240 regenerative farming and how we could farm better. You guys 1:33:21.240 --> 1:33:22.800 have been doing this for a long time, and you've 1:33:22.840 --> 1:33:25.920 done so many films on the environment. First of all, 1:33:26.160 --> 1:33:28.760 talk to us about kind of that trajectory and what 1:33:28.840 --> 1:33:32.599 you've seen and whether we're making any progress on doing 1:33:32.640 --> 1:33:37.200 things better and reducing the impact on our agricultural economy, 1:33:37.680 --> 1:33:39.719 on what we eat, and really just kind of helping 1:33:39.720 --> 1:33:41.679 out the climate. Are we doing anything better? 1:33:43.040 --> 1:33:45.600 Well, we have done this for twenty years, and I 1:33:45.640 --> 1:33:49.800 think awareness is higher now than it's ever been. When 1:33:49.880 --> 1:33:53.040 we released Kiss the Ground, the film that the prior 1:33:53.120 --> 1:33:57.280 film to Common Ground, it was during COVID lockdown and 1:33:57.280 --> 1:34:01.640 that film went absolutely viral. We're so interested in the 1:34:01.680 --> 1:34:06.599 connections between soil and health, and I think that remains today. 1:34:07.160 --> 1:34:11.920 I think the gap for most people and where especially parents, moms, 1:34:12.280 --> 1:34:15.200 folks who shop at the grocery store, where the gap 1:34:15.320 --> 1:34:19.240 is is people are questioning what decisions will make the 1:34:19.280 --> 1:34:22.800 biggest impact for their health and what decisions were going 1:34:22.840 --> 1:34:25.120 to make the biggest impact for the climate. The awareness 1:34:25.160 --> 1:34:28.920 is there, but what decisions to make? That's the question, 1:34:29.280 --> 1:34:33.719 and that's where Common Ground comes in. It really says, hey, look, 1:34:33.960 --> 1:34:36.400 here are your options. We don't tell people what to 1:34:36.479 --> 1:34:38.960 do in the film, but we give people a strong 1:34:39.080 --> 1:34:42.280 understanding so that they can make choices that work for 1:34:42.360 --> 1:34:45.040 them and their family and that's why we're excited about 1:34:45.040 --> 1:34:49.160 the Earth Day release of Common Ground that's coming out 1:34:49.200 --> 1:34:50.360 this Earth Day in theaters. 1:34:51.240 --> 1:34:53.599 Hey, Rebecca, I wanted to ask just about and Josh 1:34:53.680 --> 1:34:56.720 as well, about the some of the casts that you 1:34:56.800 --> 1:35:00.799 feature a huge group of people, but some real household 1:35:00.880 --> 1:35:04.160 names here. I mean we're talking about stars like Woody Harrelson, 1:35:04.280 --> 1:35:07.639 Jason Momoa, Rosario Dawson. Rebecca, talk a little bit about 1:35:07.680 --> 1:35:10.960 how you get them involved. Was it given your history? 1:35:11.000 --> 1:35:11.879 Is it pretty easy? 1:35:12.920 --> 1:35:16.200 Well, Josh here, I you know, I first heard of 1:35:16.280 --> 1:35:19.040 Josh because he had driven the Veggie van across the 1:35:19.080 --> 1:35:21.720 country promoting biodiesel back in the nineties and wrote a 1:35:21.760 --> 1:35:23.760 book that taught people how to make it. So of 1:35:23.800 --> 1:35:26.639 course Woody was driving across the country and his Hemp 1:35:26.920 --> 1:35:29.519 biodiesel van and every time it would break down, they 1:35:29.520 --> 1:35:31.680 would call on Josh to help them figure out how 1:35:31.680 --> 1:35:34.479 to problem solve. So he was definitely on board and 1:35:34.479 --> 1:35:36.479 has been on board with our work from the beginning 1:35:36.520 --> 1:35:39.200 and we could not be more grateful to him. And 1:35:39.280 --> 1:35:42.040 along the way, we've met Laura Dern through our film 1:35:42.360 --> 1:35:45.120 on the BP oil spill, and you know, we just 1:35:45.600 --> 1:35:50.479 come to know these other incredible passionate activists who are 1:35:50.479 --> 1:35:53.120 also concerned about the environment, who also happened to be 1:35:53.479 --> 1:35:57.000 mega celebrities like Jason Momoa and Rosario Dawson, and they 1:35:57.040 --> 1:36:01.919 are also deeply committed to stabilizing the climate and as parents, 1:36:02.439 --> 1:36:05.400 when they learned what we were sharing with them, it 1:36:05.439 --> 1:36:07.599 was a no brainer that they wanted to be involved 1:36:07.640 --> 1:36:10.160 and use their voice and their reach to be able 1:36:10.200 --> 1:36:12.439 to promote this message because as far as we're concerned 1:36:12.439 --> 1:36:14.200 and as far as they're concerned, this is the most 1:36:14.200 --> 1:36:17.840 important issue that we're facing. It's also the biggest opportunity. 1:36:18.000 --> 1:36:20.800 We're talking about a trillion dollar industry that that is 1:36:20.880 --> 1:36:23.639 barreling towards us. And this is the moment for people 1:36:23.680 --> 1:36:25.880 to find their role and to take a leadership ship 1:36:25.920 --> 1:36:28.920 position when it comes to regenerating the climate, because we 1:36:28.960 --> 1:36:31.719 have this small window right now where we can course 1:36:31.760 --> 1:36:35.240 correct and common ground shows people how we can do that. 1:36:35.600 --> 1:36:38.120 And what better way to celebrate Earth Day to go 1:36:38.160 --> 1:36:42.280 and find where your role in regenerating the climate and 1:36:42.280 --> 1:36:43.599 stabilizing the climate is. 1:36:43.880 --> 1:36:45.840 Guys, one thing I wanted to ask is that you know, 1:36:46.760 --> 1:36:50.759 as you said, you know agriculture is a massive industry. 1:36:50.800 --> 1:36:53.960 Commercial farming is massive, and you have to go up 1:36:53.960 --> 1:36:58.559 again some really big you know, food companies and so on, 1:36:58.840 --> 1:37:01.680 and sometimes it's hard to turn the needle. I do 1:37:01.720 --> 1:37:03.880 believe you can take make changes one step at a 1:37:03.880 --> 1:37:06.439 time or one acre at a time. But talked us 1:37:06.479 --> 1:37:09.400 about that battle, whether it's through lobbying, whether it's through 1:37:09.479 --> 1:37:12.840 just the massive amount of money that the commercial food 1:37:12.880 --> 1:37:18.320 industry has and can really impact or prevent change. What 1:37:18.360 --> 1:37:20.160 can you tell us in the insight on that that 1:37:20.200 --> 1:37:22.639 you guys are seeing in these twenty years of reporting 1:37:22.640 --> 1:37:24.519 it in this film in particular. 1:37:25.439 --> 1:37:29.000 Well, you guys are a business network, and you obviously 1:37:29.040 --> 1:37:33.519 are talking to business minded people. Ultimately, the food industry 1:37:33.520 --> 1:37:36.479 in the United States is driven by consumers. It's not 1:37:36.560 --> 1:37:40.240 driven by policy so much as it's driven by everyday 1:37:40.280 --> 1:37:43.080 people like you and me, who, if we're lucky, we 1:37:43.120 --> 1:37:46.000 get to make three votes a day with our forks 1:37:46.040 --> 1:37:49.360 and knives. And that's where the real power of this 1:37:49.479 --> 1:37:51.599 movement is. You see, when we release Kiss the Ground, 1:37:51.920 --> 1:37:54.800 there were no acres in the US to speak of 1:37:55.080 --> 1:37:59.439 in regenerative agriculture. Fast forward only four years after we 1:37:59.479 --> 1:38:05.439 release that movie, thirty four million acres in transition to 1:38:05.520 --> 1:38:10.360 regardative agriculture today. That's tremendous. That's six times more than 1:38:10.520 --> 1:38:14.360 organic agriculture did in fifty years. Happen in four years. 1:38:14.960 --> 1:38:21.160 So we're seeing consumer demand push big big companies like 1:38:21.280 --> 1:38:25.240 Whole Foods, Trader Joe's, and then of course the suppliers themselves, 1:38:25.520 --> 1:38:29.360 and even back into the supply chain as deep as 1:38:29.439 --> 1:38:33.519 the agricultural chemicals that supply fertilizers and chemicals and seeds. 1:38:34.240 --> 1:38:38.599 That's how deep the consumer push for reginative agriculture is going. 1:38:38.920 --> 1:38:41.639 We know as Common Ground is releasing in the theaters, 1:38:41.680 --> 1:38:43.360 that's the name of the film. We want everybody to 1:38:43.360 --> 1:38:45.920 see it. It's incredible. You should go watch Common Ground 1:38:46.160 --> 1:38:49.840 as it's releasing in theaters now that consumer demand is spiking, 1:38:50.360 --> 1:38:53.639 what happens when it goes on digital this fall. We're 1:38:53.640 --> 1:38:57.839 talking about one hundred to two hundred million consumers watching 1:38:57.880 --> 1:39:00.200 a movie that shows them how to make choice is 1:39:00.200 --> 1:39:03.920 around regin of agriculture. Forget about it. This is you know, 1:39:04.000 --> 1:39:06.639 this is a movement that is happening, and I think 1:39:06.960 --> 1:39:09.320 food companies should seriously look at getting on board. 1:39:09.360 --> 1:39:09.760 Well, Josh. 1:39:09.800 --> 1:39:12.600 Oftentimes, when we talk about the idea of having the 1:39:12.640 --> 1:39:15.439 opportunity to buy, to choose where you get your food, 1:39:15.560 --> 1:39:18.800 to buy food that is organic, buy food that is 1:39:20.080 --> 1:39:23.760 grown in a way that you want to support. It 1:39:23.800 --> 1:39:27.080 involves people spending more money. And I'm just wondering about 1:39:27.400 --> 1:39:29.439 you know, what you would say to folks who might say, 1:39:29.439 --> 1:39:31.680 you know, wait a second, it's nice to actually have 1:39:31.720 --> 1:39:33.519 the opportunity to do that, but there's so many people 1:39:33.520 --> 1:39:36.799 out there who can't really afford to make those decisions, 1:39:36.880 --> 1:39:38.840 and they're shopping purely based on price. 1:39:39.840 --> 1:39:42.320 Yeah, that's a great question. We get that question all 1:39:42.360 --> 1:39:44.000 the time as well. You know, we've been doing these 1:39:44.040 --> 1:39:46.880 films for a long time. So Common Ground is the 1:39:46.920 --> 1:39:49.360 second film, Kiss the Grounds the first one. We actually 1:39:49.400 --> 1:39:52.880 produced a free food guide on the common Ground Film 1:39:52.880 --> 1:39:56.439 website common groundfilm dot org for everybody to download, and 1:39:56.479 --> 1:39:59.160 that guide really takes you through the steps of eating 1:39:59.200 --> 1:40:01.960 a more regar diet. The way we look at it 1:40:02.040 --> 1:40:05.160 is this is not a one hundred percent change for anyone, 1:40:05.520 --> 1:40:10.000 even us. You're always modifying your diet right and families 1:40:10.080 --> 1:40:13.519 needs change. But we want to make the best choices 1:40:13.560 --> 1:40:16.639 at the time. So what tools do we have. Certainly, 1:40:16.720 --> 1:40:20.280 the age old adage of shopping around the outside of 1:40:20.320 --> 1:40:23.519 the supermarket. That's a good one. But another one is 1:40:23.640 --> 1:40:27.080 in California, we have a program where food stamps are 1:40:27.120 --> 1:40:30.439 given twice the value. You have the Snap program or 1:40:30.439 --> 1:40:33.479 your Snap card, you get twice the value in most 1:40:33.520 --> 1:40:36.920 places when you shop at a farmer's market. And I've 1:40:36.960 --> 1:40:39.160 never been to a farmer's market where a farmer isn't 1:40:39.160 --> 1:40:42.680 willing to negotiate and throw in some more apples, potatoes, 1:40:42.960 --> 1:40:45.479 you know, corn, whatever it is. So there are a 1:40:45.520 --> 1:40:49.000 lot of ways to attack the idea of how do 1:40:49.080 --> 1:40:52.080 we gradually increase the health of our families. We don't 1:40:52.120 --> 1:40:53.800 have to do it all in a day, right, and 1:40:53.840 --> 1:40:55.880 it doesn't have to be more expensive. In fact, it 1:40:55.920 --> 1:40:56.639 could be cheaper. 1:40:57.439 --> 1:40:59.240 So, Rebecca, I want to bring you back in and 1:40:59.360 --> 1:41:02.439 you know, this film is all about regenerative farming, and 1:41:02.680 --> 1:41:04.680 you know we kind of throw terms around and you 1:41:04.720 --> 1:41:07.600 touched on it at the beginning of our conversation. But 1:41:07.720 --> 1:41:11.200 break it down and how it works, how it can 1:41:11.240 --> 1:41:13.360 work on a grand scale, and why it is so 1:41:13.479 --> 1:41:17.360 much better for the environment. And I'm curious about yield too, and. 1:41:17.240 --> 1:41:20.759 That is yeah, I come from a legacy farming family, 1:41:20.920 --> 1:41:23.479 and we've certainly in my family, used our fair share 1:41:23.479 --> 1:41:25.600 of chemicals and done our fair share of tillage. 1:41:25.840 --> 1:41:28.040 Basically, the principles. 1:41:27.479 --> 1:41:31.679 Of regeneration and a regenerative agriculture is building soil, growing 1:41:31.720 --> 1:41:34.559 food in a way that's in symbiosis with nature. And 1:41:34.600 --> 1:41:38.679 the practices that are involved in regenerative agriculture are pretty simple. 1:41:38.720 --> 1:41:43.080 It's farming and eating in context. So we live in California, 1:41:43.200 --> 1:41:45.200 we can grow things that are more Mediterranean, but you 1:41:45.240 --> 1:41:48.439 wouldn't grow those same things in Chicago or in Vermont. 1:41:48.720 --> 1:41:51.360 So it's about getting creative and figuring out what's growing 1:41:51.439 --> 1:41:54.400 locally and regionally that can improve the health of my 1:41:54.560 --> 1:41:57.960 soil and my environment and my body. And then other 1:41:58.080 --> 1:42:02.719 practices like no tillage or minimal disturbance to the soil. 1:42:02.800 --> 1:42:04.960 So there's some tillage that has to happen for things 1:42:05.000 --> 1:42:08.559 like carrots, but overall you want to protect the life 1:42:08.600 --> 1:42:10.920 that's in the soil by not disturbing it and cutting 1:42:10.960 --> 1:42:18.440 it up, reducing obviously fertilizers, chemicals like pesticides, herbicides, fungicides, 1:42:19.560 --> 1:42:22.000 you know, really just helping the life in the soil 1:42:22.120 --> 1:42:25.080 to flourish. Because when you're encouraging life in the soil. 1:42:25.160 --> 1:42:27.960 You're encouraging life in our bodies because we're really a 1:42:27.960 --> 1:42:32.000 reflection of that soil. And then keeping the ground covered 1:42:32.040 --> 1:42:35.519 at all times. Farmers and the regenerative movement like to say, 1:42:36.080 --> 1:42:38.519 mama likes to be covered, Keep mama covered. So if 1:42:38.520 --> 1:42:42.200 you can see bare ground, you're exposing that ground to 1:42:42.320 --> 1:42:45.360 a potential you know, being evaporated up into the air 1:42:45.479 --> 1:42:48.160 like dust storms. And so really what you want to 1:42:48.160 --> 1:42:51.120 do is secure that soil with cover crops. It's a 1:42:51.120 --> 1:42:54.200 great way to bring nutrients back into dead dirt, begin 1:42:54.280 --> 1:42:56.880 the process of bringing it back to life and when 1:42:56.920 --> 1:42:59.600 you implement Oh and then the last big one is 1:42:59.640 --> 1:43:03.560 animal integration, so making sure that it's not just a monocrop, 1:43:03.680 --> 1:43:06.760 but making sure that that farm or that field, that 1:43:06.920 --> 1:43:11.920 ecosystem is filled with biodiversity. Because biodiversity not just in 1:43:12.280 --> 1:43:15.320 the food that's being grown, but also in the life 1:43:15.479 --> 1:43:17.920 that you see in that farm. You should see the 1:43:17.960 --> 1:43:23.120 whole trophic cascade. Really when you're growing food that is 1:43:23.200 --> 1:43:26.040 reflected in the food. And so one of the things 1:43:26.120 --> 1:43:28.080 that we talk about in Common Ground is let your 1:43:28.080 --> 1:43:30.599 food be your medicine. Let your medicine be your food, 1:43:31.040 --> 1:43:33.040 and if we take care of the soil and we 1:43:33.120 --> 1:43:36.760 implement these practices into our farming, we take care of 1:43:36.800 --> 1:43:38.640 the earth. The earth will take care of that. 1:43:38.720 --> 1:43:41.000 Okay, maybe this is super naive of me, but I 1:43:41.000 --> 1:43:44.240 feel like Tim and I sentimes asks a lot of like, Okay, well, 1:43:44.280 --> 1:43:47.920 if it's so good and makes such sense, why isn't 1:43:48.040 --> 1:43:50.600 this happening? What is the biggest obstacle? 1:43:50.640 --> 1:43:50.880 We know? 1:43:51.560 --> 1:43:56.280 The government I think in the latest infrastructure bill has 1:43:56.840 --> 1:43:59.120 the Inflation Reduction Act. Excuse me, I think made twenty 1:43:59.120 --> 1:44:03.360 billion available to the USDA Natural Resources Conservation Service to 1:44:03.439 --> 1:44:08.200 address popular conservation programs. There's stuff going into farming. So 1:44:08.280 --> 1:44:12.160 if it makes such sense, why isn't it happening? 1:44:12.720 --> 1:44:16.519 Well, the good news is it is happening. As we said, 1:44:16.520 --> 1:44:20.360 you know, we've faster. Why is it happening faster? Well, 1:44:20.400 --> 1:44:23.240 I think we're on an exponential curve with this. This 1:44:23.280 --> 1:44:26.000 is you know, you got to understand, Kiss the Ground 1:44:26.200 --> 1:44:28.719 only came out in twenty twenty and that was during 1:44:28.760 --> 1:44:33.160 a massive, you know, global lockdown, So we've really only 1:44:33.280 --> 1:44:38.000 had maybe twenty four months to activate around this set 1:44:38.000 --> 1:44:41.640 of concepts, which, look, this is all ancient knowledge. We 1:44:41.680 --> 1:44:44.960 didn't come up with regeneral agriculture. But the fusion of 1:44:45.080 --> 1:44:52.000 modern technology and precision agriculture with ancient traditional knowledge is 1:44:52.040 --> 1:44:54.400 showing that we can produce way more food for way 1:44:54.400 --> 1:44:57.479 more people and sequester carbon. I think we're going to 1:44:57.520 --> 1:44:59.879 see within the next twenty four to thirty six months 1:45:00.280 --> 1:45:04.439 an absolute exponential uptake in this and that's all the 1:45:04.479 --> 1:45:07.639 way from the government sector. The Farm Bill is being 1:45:07.680 --> 1:45:10.760 modified to include soil health. We're seeing this on a 1:45:10.800 --> 1:45:13.559 state and local level, we're seeing this on a national level. 1:45:13.560 --> 1:45:16.840 We're seeing this on an international level. So that's part 1:45:16.840 --> 1:45:20.200 of why we're excited is we've made environmental documentary for 1:45:20.240 --> 1:45:23.040 twenty years. Your first question, are we moving the needle? 1:45:23.360 --> 1:45:25.160 If you would have asked us maybe ten years ago, 1:45:25.200 --> 1:45:27.680 we would have said, I don't know. But today we 1:45:27.760 --> 1:45:30.680 can safely say regaron of agriculture is on track to 1:45:30.760 --> 1:45:34.919 outpace organic and all of the other natural foods trends, 1:45:35.280 --> 1:45:37.840 and it's going to do so within two to three years. 1:45:37.920 --> 1:45:38.559 That's amazing. 1:45:38.640 --> 1:45:40.800 Well, we see something on packaging that tells us this 1:45:40.960 --> 1:45:41.120 or no. 1:45:42.479 --> 1:45:45.320 Yes. As a matter of fact, we have an initiative 1:45:45.320 --> 1:45:47.880 it's called one hundred million acres one hundred million acres. 1:45:47.880 --> 1:45:50.639 Dot org is the website, and you can see all 1:45:50.720 --> 1:45:53.519 of the logos of all of the certifiers that are 1:45:53.560 --> 1:45:56.680 already in play. Old Foods and Trader Joe's have approved 1:45:56.800 --> 1:46:01.160 three of them. Internal estimates, they believe it will outpace 1:46:01.200 --> 1:46:05.320 the organic logo well and truly within thirty six months. 1:46:05.360 --> 1:46:07.720 So yes, you will see logos in the store. They 1:46:07.720 --> 1:46:10.080 will be certified, and then you will be able to 1:46:10.120 --> 1:46:13.200 look up that certifier. There'll be transparency as to how 1:46:13.240 --> 1:46:16.439 those acres were certified. So a very good system is 1:46:16.479 --> 1:46:19.240 in place, and it's coming to a grocery store near you. 1:46:19.520 --> 1:46:21.840 Well not everyone speaking of grocery stores is lucky enough 1:46:21.840 --> 1:46:24.960 to live near Rainbow Bridge Natural Foods in Ohai and 1:46:25.040 --> 1:46:29.439 get to experience the legendary grilled tofu that I survived 1:46:29.439 --> 1:46:32.960 on in high school when I lived there. Guys, but 1:46:33.120 --> 1:46:36.760 I do wonder about what people can do if where 1:46:36.760 --> 1:46:40.519 they live do not have these sorts of items for sale. 1:46:40.560 --> 1:46:43.599 I mean, are we in an environment where people can 1:46:43.640 --> 1:46:46.160 actually go and talk to the folks who work in 1:46:46.280 --> 1:46:49.439 grocery stores, big chains, grocery stores where people get their 1:46:49.439 --> 1:46:51.719 food and actually affect real change. 1:46:52.760 --> 1:46:56.840 Absolutely, Look, I think grocery management is very open to conversations, 1:46:56.880 --> 1:46:58.680 at least in my experience, no matter where you let 1:46:58.640 --> 1:47:02.599 me live, if you live in Bismarck, it doesn't matter. 1:47:03.240 --> 1:47:06.320 They want to service you as the consumer, and you, 1:47:06.360 --> 1:47:08.839 as the consumer is ultimately the one with the power. 1:47:10.000 --> 1:47:14.280 We don't say, hey, ask for them to replace a product. 1:47:14.320 --> 1:47:16.960 We say, look at the company and see if they 1:47:17.000 --> 1:47:21.280 have an option. Some of these companies now have regenerative options. 1:47:21.320 --> 1:47:26.280 So King Arthur Flower, the largest manufacturer of wheat in 1:47:26.320 --> 1:47:30.759 the United States, arguably the world, now has a regenerative option. 1:47:31.400 --> 1:47:34.360 All they have to do is carry that skew next 1:47:34.360 --> 1:47:38.040 to the regular flower right. Give consumers a choice. Very simple. 1:47:38.800 --> 1:47:42.120 We so appreciate talking with you guys. Thank you so much. 1:47:42.240 --> 1:47:46.759 Josh and Rebecca Tickle. Of course their documentary Common Ground, 1:47:46.880 --> 1:47:48.920 and it's going to have an on our birth day. 1:47:49.040 --> 1:47:51.439 The film will have an exclusive one day only screen 1:47:51.479 --> 1:47:55.519 event at AMC Theaters coming this Monday, April twenty second. 1:47:55.680 --> 1:47:57.320 Oh is the type of place where you can just 1:47:57.400 --> 1:48:00.880 walk around and grab oranges off a tree, ray and 1:48:01.040 --> 1:48:04.719 eat you mercados everywhere. It's pretty amazing. 1:48:04.800 --> 1:48:06.719 What I love is every day I learn a little 1:48:06.720 --> 1:48:07.960 bit more about Jim Stead. 1:48:07.680 --> 1:48:08.840 Of it all right. 1:48:08.920 --> 1:48:12.040 Great to check in with them. Thanks so much, everybody. 1:48:12.600 --> 1:48:15.800 This is the Bloomberg Business Week podcast of a little 1:48:15.880 --> 1:48:19.560 on Apple, Spotify, and anywhere else you can get your podcasts. 1:48:19.880 --> 1:48:23.240 Listen live weekday afternoons from two to five pm Eastern 1:48:23.400 --> 1:48:26.800 on Bloomberg dot Com, the iHeartRadio app, tune In, and 1:48:26.840 --> 1:48:29.599 the Bloomberg Business App. You can also watch us live 1:48:29.680 --> 1:48:33.560 every weekday on YouTube and always on the Bloomberg Jermale