Bloomberg Businessweek Weekend - September 29th, 2023 - Bloomberg Businessweek

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Speaker 1 (00:01):
This is Bloomberg BusinessWeek Inside from the reporters and editors
who bring you America's most trusted business magazine. Plus gloom
Ole Business finance and tech news. The Bloomberg Business Week
Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Speaker 2 (00:19):
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Investors still mulling over the higher for longer US interest
rate world meantime, the FTC not mulling over, but rather
pulling the trigger and suing Amazon in a long anticipated
antitrust case, accusing the e commerce giant of monopolizing online
marketplace services. Startup investor Steve Caase, co founder of AOL,

(00:41):
of course, weighs in and explains why targeting some of
big tech makes sense.

Speaker 3 (00:46):
Also ahead our cover story on another tech giant, Alphabet,
and why law enforcement requests for Google user data is
raising some serious privacy concerns. Plus, we talk with one
of the producers of the newly released feature film Dumb Money,
which portrays some of our most talked about financial titans
and the main street investors who took them for a
multi billion dollar ride.

Speaker 2 (01:07):
Unbelievable. All of that to come and we begin with
the big picture money markets and the macro environment, and
how we assess the worries of investors and traders, especially
when it comes to sticky inflation and a federal reserve
that has hell bent on getting inflation back to its
two percent target. These worries continue to play out in
a trade where stocks move lower and US treasury yields higher.

(01:28):
With us as someone who thinks about it all and
connects the dots.

Speaker 3 (01:31):
Peter Atwater, he's adjunct professor of economics at William and
Mary who before that worked in financial services and with
hedge funds. You might recall it he coined Carol the
term key shape recovery.

Speaker 2 (01:41):
Yeah, he did. Indeed, he was recently on to talk
about his new book, The Confidence Map, which came out
in July. So delighted to have you back. How are you,
I'm doing great, Great.

Speaker 4 (01:49):
To be here.

Speaker 2 (01:50):
Well, it's great to have you here. How are you
thinking about kind of the things that are coming at
investors right now and just the world at large.

Speaker 5 (01:56):
Well, you know, there's a lot coming at investors. But
what's been so strike to me about the past couple
of weeks is the absence of emotion We've watched the
sell off in bonds, we've watched the sell off in stocks,
We've watched oil prices rise, and there's this remarkable at
ease that investors seem to have, even though markets have

(02:19):
gotten over sold er in the case of oil, over bought,
and it's really inconsistent to me with what prices would suggest.
So I'm perplexed that people are taking all of this
as commonly as they are, particularly because it wasn't, you know,
six months ago interest rates were at this level and
people were panicking about the banks, and it's a big

(02:42):
gone today.

Speaker 3 (02:44):
So what do you attribute that to.

Speaker 5 (02:46):
I am a little worried about real complacence behavior on
the part of investors, because there's no sense of that
things could get worse, whether in terms of the economy
itself or higher interest rates or inflation. There's almost this

(03:08):
sense of, Okay, this is what it is. Until the
economy gives us signals that it's weakening, or until the
consumer rolls over, we're going to count on some sort
of miraculous landing of this.

Speaker 3 (03:24):
One thing that caroly and I talked about this week
was the depletion that we're seeing when it comes to
the cash savings of Americans right Castle baleat Castle balance sheets.
I mean pretty much everyone except the top twenty percent
has run out of that excess cash savings that they had. Yeah,
I mean the pandemic and post pandemic.

Speaker 5 (03:40):
I worry about those at the low end where the
cash ran out a long time ago. I think it's
interesting that folks are only taking note of it now,
But for those at the bottom, this is a phenomenon
that's now more than a year old, and so you're
starting to see that roll into delinquency rates. It's particularly

(04:00):
in automobile loans and credit card loans, and the automobile
loan one worries me because, particularly for low income individuals,
the car is the job, and they don't have the
flexibility of work from home that many above do.

Speaker 2 (04:16):
Are you comfortable with some of the data points that
are out there, including the labor statistics here in the
United States?

Speaker 5 (04:22):
You know, I'm comfortable with the statistics. But what is
clear even with these statistics is that jobs are not
equating to confidence, and that you've seen no material improvement
in mood even though jobs have come back and people
are working more. And so I think we do ourselves

(04:46):
a disservice to think that having a job is going
to boost confidence.

Speaker 2 (04:51):
I think it's funny because I think Tim and I
talk a lot about like the things that we're paying
for in life right now, whether it's homes or rates.

Speaker 3 (04:59):
On, you know, buying a home right insurance is super expensive.

Speaker 2 (05:03):
Now cool, Like everything seems super expensive right now. Yeah,
and then we have jobs and we feel pretty confident.

Speaker 5 (05:09):
This is these are the things that are at the
low end of the hierarchy of need. So we're not
talking about luxury goods where you can do with or without.
We're talking about essentials, and so that creates this sense
of vulnerability where people feel hostage to either the price
scarcity or the supply scarcity or the demand scarcity.

Speaker 3 (05:29):
Everything you're talking about we could have talked about six
months ago. We could have talked about in January before
the run up of close to twenty percent on the
S and P five hundred this year, which by the way,
has now been pretty much cut in half at this point. So, Peter,
what were people ignoring and what is it portend for
the future.

Speaker 5 (05:46):
So if I look at the markets over the last
six months, I think the indices are masking what's really
going on, which is this enormous stratification where the low
end russells small cap stocks or barely I don't know
this afternoon if they're up for the years.

Speaker 6 (06:04):
Talk about this all the time.

Speaker 5 (06:05):
We talk about the small shops so forma, and this
is an indication of declining confidence and declining success for
small businesses. And so I worry that investors, by pouring
money into the Thoroughbreds, into the Amazon and Apple and
Google and Microsoft, are being misled by the fact that

(06:30):
things are troublesome below the surface the other four hundred
and ninety five companies.

Speaker 2 (06:36):
The other thing I guess I would go to is
that when we talk about rates, and we constantly keep going, well,
you know, highest rates at SO seven or the eight time,
and that time really felt like the bottom was going
to come out from under us. It doesn't necessarily feel
like that time today that bad. But then again, is
it because we're not necessarily really reading what's going on

(06:57):
or were missing things?

Speaker 5 (06:58):
Yeah, and I think we're still in this unwind from
negative interest rates two years ago, and so we tend
to look at it on an absolute basis, but it's
going to be interesting to see how balanced investors feel
when they get their statements at the end of the
quarter where both their stock portfolios.

Speaker 2 (07:19):
You're done.

Speaker 3 (07:20):
I was gonna say a lot of people who don't
wait to get the statements, They you know, log in
when they see red.

Speaker 2 (07:25):
I check periodically, but you're right, it's like a reality
check of like, it's again a reminder not everything goes up,
but when we do go like, is there something though
significant when we do make those references back to two
thousand and seven, two thousand and eight, which was such
a significant time in this country as well as certainly
within the financial market universe, is it are we setting

(07:48):
up for a period another period that's as rough as
some of the stuff we went through there in terms
of the markets.

Speaker 5 (07:54):
So I think what's been so interesting in the past
two years is we're seeing a concurrent unwinding of extreme
sentiment in both stocks and bonds. The trade isn't risk
on versus risk off, it's risk one versus risk out,
and you're seeing that in the growth in money market funds,

(08:16):
where money is leaving the market outright, and that's a
trend we need to keep a lot of attention on
because you know seven oh eight, other than a few
weeks there was this rotation into bonds out of stocks,
and that we're not seeing that, even though yields are

(08:37):
significantly higher than they were recent one.

Speaker 3 (08:39):
So where's the money going.

Speaker 5 (08:40):
It's going into money market funds over.

Speaker 3 (08:42):
Five percent and a money market fund you've just said
it there until you know, and you're earning more than
ten year yields today.

Speaker 5 (08:48):
I mean, so it's a really it's cash has become
a viable alternative. And as I said, with stocks and
bonds moving down in price together, that it could start
to feed upon its well stay that way. Who knows,
who knows.

Speaker 3 (09:08):
But I mean at a certain point, bonds are going
to become attractive to some of these people, right.

Speaker 5 (09:12):
So that's the question. If bonds were a bubble, if
negative interest rates were a sign of extreme sentiment, then
we're likely to see that rising rates. Falling prices don't
draw a crowd. That we've seen everybody who is going

(09:35):
to buy a bond did, and much as you see
when stock market bubbles unwined, lower price doesn't draw anybody.
You get the occasional bounces, but it's a perpetual unwinding machine.

Speaker 2 (09:49):
Is it safe to say? And I think you mentioned
this earlier. We've never come out of a pandemic, We've
never come out of a time period like this. We
don't really ultimately know how it all settles.

Speaker 6 (09:59):
We don't.

Speaker 5 (10:00):
But let me create a bull case here. You talk
out of both sides of my mouth and economists. That's
the we talked about all this cash going into all
the money going into money markets, that then becomes a
potential source for further enthusiasm. If sentiment were to bottom.

Speaker 2 (10:21):
The cash on the side of the sideline, and.

Speaker 5 (10:24):
There's a lot of it, I mean, there's an enormous
amount of cash sitting there, and so you could have
this powerful reversal where the crowd says that was it,
that was as bad as it got, and we're back
to the races.

Speaker 3 (10:38):
I mean, if you're saying that, like the S and
P five hundred, at forty five hundred, you were regretting
not putting some money in. Now it's at forty two
hundred and you're like, Okay, maybe it's time or there
could be further to go.

Speaker 5 (10:47):
Well, and I can create a bull scenario, which is
if the dollar is then going to fall, you start
to see a declining dollar, that's a huge tailwind for
these megacaps.

Speaker 2 (10:59):
With us, as Bloomberg News congressional reporter Eric Wahlson on
the phone at the Capitol in Washington, d C. Still
with us, Peter Atwater as a professor of economics at
William and Mary and author of the Confidence Matt and Eric,
I want to start with you give us some color
about what are you hearing. What's the environment in and
around the Capitol as we count down to that possible shutdown.

Speaker 7 (11:19):
Well, you know, I think really the focus is on
the House, where even longtime Republican aids and operators are saying,
it's just chaos. They haven't seen anything like it. It's
just an inability really of the House Republicans to come
together on even an offer. You know, they've proposed a
stop gap spending bill of between thirty one days or
forty five days, try to attach that to some border
security position provisions and make the President come to terms

(11:43):
on a border deal. But they can't even really get
the votes to pass that, So they're not even off
of first base here. And the meanwhile, the Senate's moving
forward with his bipartisan deal. You know, it's about six
billion dollars in Ukraine aid six billions for disaster funds
the government for forty seven. Now, you know, if the
Senate passes that, which it likely could do by Sunday,

(12:03):
a government shutdown has already started. There'd be a lot
of pressure on McCarthy to bring that up, but he
told his conference he's not going to bring that up today,
and so we're really heading to a shutdown.

Speaker 3 (12:13):
Eric, you've seen this play out before. So just give
us an idea of if the government does shut down,
or maybe we say at this point when the government
does shut down, help us by looking into your crystal
ball and giving us an idea of when things open
up back open up again.

Speaker 7 (12:28):
Well, one in tricking possibility is that House Modern it's
conductive rebellion. Put a couple of stories on the Boomberg
about that. They have some procedural mechanisms on's called the
discharge petition where they could within about nine legislative days,
force a vote against speakers wishes on that Senate bill
or on their own rival plan, which would actually extend
government counting to January eleventh. You know, to Vida is

(12:48):
a betrayal of the party but they are arguing, well,
be a lot of the Conservatives a vote against the
which party speaker candidate, and vote against House rules and
other things, so they've also shown disloyalty. So, you know,
Mike Lawler of New York, one of the moderate Biden
district Republicans leading that effort. He can probably bring along
five other New York Republicans to help him, and that's

(13:09):
all it's truly needed to trigger this process. So it
could be as little as nine days for our way,
as the Speaker could try to thwart that. You know,
on the other hand, I could see a resolution quicker.
It just really depends on really on these moderates and
where the Speaker ultimately decides, you know, just the shut
does it's not worth the pain, not worth risking the House.
He could face emotion nowst him at that point to

(13:30):
be up to Democrats whether they bail him out. You know,
there's probably enough Conservatives that he would you know, be
able to be ousted without democratic help.

Speaker 2 (13:39):
The political process. As we said earlier when we began
talking with Peter Atwater at the top of the broadcast, Peter,
one of the things that's on the minds of investors
is his potential for a government shut down. There is
potentially an impact when you don't have government programs, the
expenditures going out, you don't have employees being paid. There's
an impact. I mean, how do you think about it?

(14:00):
Think abou William and Mary. They spend a lot of
time in terms of policy and the connection of policy
and economic impacts.

Speaker 8 (14:05):
Yeah.

Speaker 5 (14:06):
So I often say that policy makers follow mood, and
this is policy makers in me here now mode. The
only thing they care about is their individual survival. And
with mood falling is indicated by the markets, that's going
to make getting a resolution together very difficult until there

(14:28):
is ultimately capitulation where some group is led to believe
that they're vulnerable in this process. And what we see
today is a lot of between the gerrymandering and the
heavy one statedness that we have in terms of political alignment,

(14:50):
that vulnerability is not showing up anywhere anytime soon.

Speaker 3 (14:55):
So, Peter, your book is called the Confidence Map, Charting
a Path from Chaos to Clarity. As a word, I
think a lot of people would associate with what's going
on at least in Washington right now. Eric, you might
agree or disagree. I don't know, do Americans still look
for confidence in the government or if we kind of said,
you know what, it's not happening.

Speaker 5 (15:15):
The bond market would say they don't. I mean that
the markets yawn over what's happening in Washington is remarkable
to me, but that is the nature of the investing
crowd to do.

Speaker 3 (15:29):
But is it yawning because they know it's going to
get resolved and it's happened before.

Speaker 5 (15:32):
Yeah, yeah, I think we're numb to it. But therein
lies the danger that that belief that ultimately Congress comes
to its senses is based on the past and the environment.
The mood environment, at least right now, suggests that that
may not be the best assumption.

Speaker 2 (15:52):
Eric, come on back in here, because I do it
was interesting what Peter said, Like, I do think that
there is such a big yawn. I think if I
brought this up with a lot of my family members,
they'd be like, yeah, okay, tell me something I care about.
But I do wonder Eric, in terms of do members
of Congress are they getting calls from their constituents. I mean,
I'm sure corporate folks might be if they're not going
to get some kind of you know, government contract payout

(16:13):
or something. But I just wonder, do lawmakers here from
the voting members of the US.

Speaker 7 (16:20):
Well, you know, some of them say that they aren't
hearing some of them say they are. But I would
say we have a couple of really good things in
the terminal right now. One is a great story which
talks about which lawmakers have the most federal workers in
their district, and one of them is bat Gates is
leading that the government shutdown charge. He has the third
most number of federal workers in his district. So you know,

(16:41):
these are people who are not necessarily acting in the
interests of their constituents. I'd also point out another story
I wrote on the terminal, which is about the economic impact.
You know, we discovered big of Bloomberg government data at
one point nine billion dollars per day and lost or
delayed revenue to federal contractors, and that is going to grow.
So you're going to see service contractors laid off and

(17:02):
never get back pay. You're going to see production lines disrupted.
And who we talked to in that story, basically, you know,
they said, you know, this is the time with high
inflation I interest rate, you're going to see a cash
flow crunch some of these small contractors. You're going to
see some companies even go bailly up in a six
to seven week shutdown. So, you know, I think the
longer it goes on, the longer the clamor the bigger

(17:22):
the pain. As your guests said, you know, and someone's
going to have to capitulate.

Speaker 2 (17:27):
Eric, you know that is such a really good point.
I mean, Peter, I do think about that. Smaller companies, man,
they live I feel like from money into money out,
like they just live from day to day in terms
of their you know, financial books, if you will. I mean,
that is a possible cost to all of this.

Speaker 6 (17:42):
Yeah.

Speaker 5 (17:42):
Well, and I think it's yet another moment where those
on the left and the right fail to appreciate the
vulnerability of those at the bottom and business and individually
and ultimately the potential that that those at the bottom
say enough of both left and right.

Speaker 3 (18:03):
What happens when or if that happens, Peter.

Speaker 5 (18:06):
So, I think you start to see grassroots movements where
you see pockets of both red and blue individuals and
businesses that the low ends say we've had enough.

Speaker 2 (18:22):
I feel like you need to occupy Wall Street or
occupy corporate America.

Speaker 3 (18:26):
You know to what I mean, maybe that was the
Tea Party, or maybe it was the rise of Trump
in twenty sixteen.

Speaker 5 (18:31):
But I think that and Eric may want to weigh
in on this, is that the environment today is uniting.

Speaker 2 (18:41):
Well, uniting everybody it goes.

Speaker 5 (18:44):
With similar vulnerabilities.

Speaker 2 (18:47):
Well, Eric, we've got only about twenty five seconds. What
do you say to that about unifying people?

Speaker 7 (18:52):
I think one of the interesting things is how split
America is. You've got almost a fifty to fifty country,
and that's why the House is the margin is so small,
and that's what's really cool. The problem here is that
you McCarthy's majority. If he had twenty seat majority, this
would be the issue we're seeing today. The fact is
he's only lose four and there's a very small number
five to seven who are basically saying, you know, we

(19:13):
won't vote for this starting position CR. So I think
that's that's an element of it to the small House majority, right,
and you know, his personal skills, Nancy Pelosi had a
small majority to get more through. You know, he just
isn't able to get those last couple of votes that
he needs.

Speaker 2 (19:27):
Eric Watson, we know you're busy Thank you so much.
Congression reporter at Bloomberg News, Peter Atwater, President Financial Insights,
and check out his book, of course, The Confidence Map.
Thank you so much.

Speaker 1 (19:35):
You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2 (19:50):
D Cass chairman and CEO at his investment from Revolution,
co founder of course of AOL which at its peak
nearly half of Internet users in the US used AOL,
so really just game changer, and he's back with us
on zoom from Washington, DC. Steve, it is great to
have you back here with Tim and myself on Bloomberg
Business Week. You know, it's been a year since you
published Rise of the Rest, How entrepreneurs and surprising places

(20:13):
are building the New American Dream. It's now out in paperback.
How is the entrepreneurial spirit and the American dream doing
in your view in the pursuit of it?

Speaker 9 (20:23):
Well, I think entrepreneurship continues to be alive and well,
and the message of the Rise of the Rest book
is it just isn't alive and well just in places
like Silicon Valley, it's placed all around the country. They're
developing a strong startup ecosystems, and that's helpful because entrepreneurs
who historically would would have to feel like they left
to leave where they were from to go to the
coast to be part of the innovation of come and

(20:44):
now can stay and build and scale there and great
jobs there. So it's been great to see the momentum
over the last decade since we started Rise of the Rest,
the pandemic has certainly been an accelerant, almost a tipping
point in terms of more people decided to move other places.
So it's seen a dispersion of talent and spursion of capital,
and a lot of great ideas that are really kind
of reimagining healthcare and food and agriculture and financial services

(21:06):
and transportation and education. Some of the most important aspects
of our lives and some of the biggest industries are
really up for grabs in this next next phase.

Speaker 3 (21:15):
Rise of the Rest is the name of the book,
it's the name of the seed fund as well. Steve,
what about rise of the rates that we've seen over
this year to what extent is that hurting the startups
that you talk to when you interact with well.

Speaker 9 (21:27):
Certainly when rates are higher, you know, there's a little
bit of a pullback in terms of the stock market
valuations as we've seen, and they're therefore a pullback in
terms of particularly the late stage private market valuations, the
pre IPO valuations. So we've seen that dynamic or the
last eighteen months or so, which frankly I think is
healthy and not all that unexpected a couple of years ago.

(21:47):
Things we're getting a little frothy in that later stage,
and so we're seeing a correction at the growth stage
of the market. On the earlier seed side, it's not
quite the same impact, and particularly in these rises of
the rest cities. Valuations of the seed investments we've done
with our rides the Rest Fund, and so far we've
done two hundred over two hundred investments in one hundred
different cities, valuations tend to be about half of what

(22:09):
the valuations are for comparable companies at the seed stage.
In places like Silicon Valley, it's a classics supply and demand.
So much capitals focused on a venture capital focused on
Silicon Valley, not enough on other parts of the country,
so that dynamics still creates a great opportunity for investors
who are willing to do the extra work to identify

(22:29):
promising entrepreneurs tackling big industries in dozens of cities all
around the country.

Speaker 2 (22:34):
Well, and that's a really good point that you talked
about all the innovation that's going on in other cities
beyond Silicon Valley. Having said that, the collapse of Silicon
Valley Bank and the fallout, what did you see as
a result of that in terms of the work that
you're doing, the investments that you're doing or none.

Speaker 9 (22:50):
There was a problem, no, no question. Even though it's
called Silicon Valley Bank or SVB, actually bank startups all
over the country, not just in Silicon Valley, and about
half of the startups, about half of the venture firms
in America or back by banks by SVB. So it's
been very unhelpful. A number of firms are trying to
fill the void and offer different products and services to

(23:13):
both the venture funds and to the entrepreneurs, but it's
certainly been a negative this year.

Speaker 2 (23:18):
And one thing we really wanted to ask you and
was about what's going on in terms of regulation. We've
been talking a lot about the FTC suit against Amazon,
right anti trust case. We've all been kind of waiting
for this, and the accusations are that Amazon is monopolizing
the online marketplace services by degrading quality for shoppers and
overcharging sellers. How do you think about this.

Speaker 9 (23:41):
Well, I haven't read the actual case obviously, as you said,
it's been expected for some time. The FTC has gotten
more aggressive on big tech and good is that.

Speaker 2 (23:49):
Good that they've got a big.

Speaker 9 (23:50):
More more scrutiny of big tech and it gets healthy.
My focus, as you know, is around the new companies,
the entrepreneurs, the insurgents that want to take on some
of the big incumbents, and making sure that there's an
environment that allows innovation to flourish, entrepreneurs to be successful,
including in areas of e commerce. Or have a similar
case with with Google on some issues related to the search.

(24:13):
I think that scrutiny is appropriate. Exactly what happens in
each court case obviously needs to kind of just you know,
have to see how it plays out. But I think
it is important that we make sure we're airing on
the site as a nation of making sure entrepreneurship can
flourish everywhere, and big tech doesn't just get bigger, including
by the way, with AI. One of the one of
the big debates here in Washington around AI as it

(24:34):
gets more attention, is is it going to end up
being a few big companies getting even bigger, or is
it going to be a broader, more dispersed innovation ecosystem
a little bit more on the open source side. And
so I will see how that plays out over the
coming year. But the Internet's not so important. Technology so important.
Every industry really is now tech enabled. Every company really
is in some ways a tech company. It's not at

(24:54):
all surprising that there's more anti trust scrutiny.

Speaker 3 (24:57):
Did it never feel like to you that AOL were
days of founding and running AOL was so big that
it could have faced more antitrust scrutiny.

Speaker 9 (25:06):
No, we actually did, and some of the News Corp
And others at one point, you know, filed suit saying
had too much control of the Internet. And even when
we merged with Time Warner, the Microsoft at and T
others were trying to block the deal with that, you know,
that argument. And so in that particular case, obviously I
hate to say it, but for a whole host of reasons,
AOL failed. By the wayside, new entrants including you know,

(25:28):
Google and Facebook and others kind of you know, took over.
And it's because those news companies were able to start,
They were able to raise the venture capital or not
barriers to entry to allow them to start. So that's
the philosophy we need going forward. Celebrate the successes we
have in our country, including some of these great companies
Amazon and Google and so many many others, But how
do we make sure we're also creating environments so more

(25:51):
of those companies can be the big companies of tomorrow,
not just on the coast, not just in Silicon Valley,
but all over the country, which obviously why I wrote
the book Rise of the Rest.

Speaker 3 (26:00):
So how do we do that?

Speaker 6 (26:01):
Though?

Speaker 3 (26:01):
I mean, we spoke to Diana Henriquez last week, who know,
compared the power companies of the nineteen twenties and nineteen
thirties and the regulation of the power companies to the
tech companies, the huge tech giants today, and she says
government needs to get involved with them. What does the
government need to do in order to ensure that the
rest can rise well?

Speaker 9 (26:20):
I'm marketing, I'm coach sharing the National Advisory Council on
Innovation and Entrepreneurship here here in Washington, and we're working
on a National Entrepreneurship Strategy, which we'll be releasing later
this year. And there's a number of facets to it.
Some relate that the talent, including immigration policy. Some relate
to access to capital, including some of the work around
Rise the rest some of it relates to making sure

(26:42):
you know, there's continued investment in regional hubs. Congress passed
the Chips and Science Act a couple of years ago
and authorized ten billion dollars for regional hubs, with its
only so far appropriated five hundred million dollars of it.
Someone's making sure America continues to invest in the R
and D, the technologies of the future to create the
industries of the future. So there's many facets to it,
but the overarching theme, I think is how do you

(27:05):
make sure this next generational entrepreneurs can start and scale
and do it anywhere in the country, not just a
few big companies being able to innovate, or only people
in a few places like Selictated Valley. So it's trying
to create a more inclusive innovation economy has to be
a key part of the answer.

Speaker 2 (27:19):
Steve. We're often so critical of other countries and their
supportive industries. I'm thinking about China specifically, But you know,
we are increasingly seeing the US, whether it's in the
semiconductor space, whether it's in the EV or the energy
transition support industries here in the United States. Should we,
especially when it comes to some of the more newer
innovative areas.

Speaker 9 (27:38):
Yes, and again there's sort of this long debate about
industrial policy, long debate about how much of a role
should government play. But the reality is the Internet wouldn't
exist if the government hadn't funded you know, Darper Research
Agency a half a century ago and then open it up,
commercialized access to the Internet, and broken up the phone
company so the costs of communications came down. There are
a number of decisions that unleashed the Internet. So having

(28:02):
that government role I think is important. That we the
innovators need to respect the role of policy makers. I
actually think in the next decade the two mega themes
are going to be place and policy. That we're focused
here at revolution around place, particularly rise the rest. We
think a lot of the big companies that tomorrow will
have a policy aspect to them because of the nature
of the industries up for grabs, and because Congress has

(28:24):
passed legislation about three trillion dollars of legislation, the Chips
and Science Act, the Inflation Reduction Act, the Bipartisan Infrastructure
Bill that's going to really invest in these industries in
a big way and create opportunities for investors as well
as ensuring that America has the right infrastructure, has the
right technologies to continue to be the most innovative entrepreneurs
in the world.

Speaker 2 (28:43):
Got to say, Steve, every time you're on you just
leave us wanting more. So come back soon and good
luck with the paperbook, a paperback version, I should say,
a rise of the rest entrepreal.

Speaker 9 (28:52):
Thank you?

Speaker 2 (28:52):
Okay, if you well how entrepreneurs and surprising places are
building the new American dream. Of course, the case.

Speaker 1 (29:03):
Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,

Speaker 2 (29:18):
Boys, all right, this next story safe to say we're
trying to figure out exactly who may be the bad actors. Here,
you can say bad boys, bad boys. Step back first. Google,
as you know, maintains one of the world's most comprehensive
repositories of location information. It can often estimate a user's

(29:39):
we'reabouts to within several feet. The company mainly gathers this
information to sell advertising, but in recent years police started
dipping into it to further their investigations.

Speaker 3 (29:50):
Yeah, the company's trove of user data now attracts thousands
of requests from law enforcement across the US in cases
large and small. Police say the warrants can unearth valuable
leads when the textas are at a but to get
those leads, cops often have to rummage through Google data
on people who had nothing to do with a crime call.

Speaker 2 (30:07):
There's a lot of information there for them to go over.
To better understand this process and its consequences, we dive
into this week's Bloomberg Business Week cover story with our
Bloomberg News tech team of Julia Love and Davey Alba,
as well as the editor of the magazine, jel Weber.
Jill's here in our Bloomberg Interactor Brokers Studio, Julia out
there in our San Francisco bureau and Davy on the
phone from Stanford, California. As you said, it's the cover
story in the new issue on newstands online, and of

(30:30):
course on the Bloomberg jail killer story.

Speaker 10 (30:33):
Julia, Davey and company have been working on this for
a while and I from the moment I found out
about it, I was like, tell me everything. And it
required just a ton of data and analysis for us
to actually be able to look at this story. But
what it revealed is that there's a troubling element to

(30:55):
how law enforcement has turned increasingly to Google over the
past couple years, and the location history that people have
on their phone search data, all of that is basically
become a tool that can reverse engineer people who are
at scenes of crimes, and sometimes being at a location

(31:19):
nerolocation does not actually mean that you did the crime.
And that's sort of where it gets interesting and where
privacy experts in particular are a little terrified of how
this is actually shaping up in the real world. So Julia,
let's start with you. How did you, how did how
did you happen upon this story? And where did where

(31:39):
did you have to go? In order to piece it
all together.

Speaker 11 (31:43):
Sure, well, in the wake of the Supreme Court's decision
to overturn Roe versus Way, there was a lot of
interest in how law enforcement would use all of the
data that Goodle has about us, and so we wanted
to look at the search warrants that police are submitting
to DOODLE because we knew that that was the best
way that we could get a handle on what was

(32:05):
actually happening. And so to do that, Davy and I
and our colleges fanned out to different courthouses around the
country and we just took it page by page, thumbing
through these warrants, identifying the ones that were submitted to DOODLE,
and then scrutinizing them to see the nature of the
case and what cops ultimately got.

Speaker 10 (32:26):
So give us an example of how this has played
out in the real world.

Speaker 11 (32:32):
So one interesting example, there was a young detective in
North Carolina.

Speaker 12 (32:36):
He's getting ready for work.

Speaker 11 (32:38):
He leaves his car running and he comes out and
the car's gone and inside is.

Speaker 6 (32:43):
Set the car herene.

Speaker 12 (32:47):
Yes, it's a personal vehicle.

Speaker 11 (32:49):
Yeah, but but but there's gear inside and it's done.
And you know, the department tells him you know, they're
very supportive. They reassure him it'll be all right. But
then they go to work and they turned to Google.
They send them a warrant for everyone who's devices were
near the place where the vehicle disappeared, and they also

(33:12):
asked for information about people who searched for the model
of the radio. And Goodle told us that they didn't
provide search data, but they did provide some location data.

Speaker 12 (33:25):
And so this is, you know, just a real world.

Speaker 11 (33:27):
Example of how property crimes are attracting these requests.

Speaker 3 (33:32):
And obviously with that information, they were able to get
the radio back, right, they were.

Speaker 12 (33:36):
Not the radio outstanding, you see.

Speaker 2 (33:40):
So Davey, come on in on this, because what it
really turns upside down, And you guys lay this out
so clearly in the story. The idea of a search warrant, right,
would be typically on an individual, right, And now you've
got thanks to Google, you can take a location and
kind of search for information. But it feels like it
opens up that information can reach a wider swath potentially

(34:02):
of individuals, some who may not at all be connected
to a possible crime. So come on in on that.

Speaker 13 (34:09):
Yeah, absolutely, So tech companies hold a lot of data
on people. That's no surprise. But usually when you think
of search warrants in the traditional sense, you would think, okay,
police are looking at this one suspect, let's go and
learn more about them, and maybe we'll serve a search

(34:31):
warrant to a company to get information on a particular
individual a suspect. In this case, police are using the
most basic parameters to even jumpstart sort of leads when
they don't have any leads. So they'll they'll, for instance,

(34:53):
give for location coordinates. These are just x y coordinates
on a map, and then within these four points you'll
draw like a little polygon. And then they will say
to a judge, like, we have reasonable expectations that there

(35:13):
will be a criminal that we can find within this
area if you sign off on this warrant for a
certain period of time. So that's Geofen's warrants. And then
you know, police are also increasingly using search warrants, keyword
search warrants, I should say, which are you know, sort

(35:36):
of warrants that are served to Google to try to
surface people who have googled a certain term. So in
one of the cases that we covered in our story,
there was a terrible crime. It was an arson and
a family died in this fire. And what investigators did

(36:00):
was go to Google and say, hey, did anyone search
for this address? So so that that yielded some some
suspects in that case, Well.

Speaker 10 (36:10):
Let's let's stick with that one, because that one hasn't
totally played out yet, and it gets to I think
maybe the ultimate tension in the story, right.

Speaker 13 (36:20):
Yeah, absolutely, that that one. You know, the Colorado Supreme
Court is going to rule on it. We don't know
exactly when, but we're expecting it to come down at
some point this year to just sort of decide whether
or not Google providing that data to investigators was an

(36:44):
overreach on the investigator's part. And and if you think
about especially searching on Google, that is just so many
people that that could ensnare you know, going back to
the example that Julia mentioned at the at the very beginning,

(37:04):
they police had served Google with a warrant for anyone
searching on this particular car radio model, and Google did
not turn over data in that case, to be clear,
but you could imagine people like radio enthusiasts who might
be searching for a particular radio model completely innocently who

(37:28):
could potentially get swept up in one of these warrants.

Speaker 10 (37:32):
So I'm guessing privacy experts have something to say about
this and activists because you know, if Carol, tim and
I get swept up in the same search, I didn't
do it. Okay, truly I didn't do it, but I did.
I'm making fun of something that is incredibly serious. But

(37:54):
what do the privacy advocates have to say about all
of this?

Speaker 2 (37:58):
Julie, you want to come back?

Speaker 11 (37:59):
Yeah, yeah, So privacy advocates are very concerned about both
of these techniques. You know, the thing is, if there's
no suspect involved, then the only way that goodle can
provide a list of hits is to search everyone's data.
And so law enforcement will receive, you know, a short

(38:19):
list of people who fit the criteria, and they then
have to go through and identify who they think, you know,
might be their suspect. But everyday, people who had nothing
to do with the crime are often swept up by
these by these warrants, and so I think that's really

(38:39):
the heart of privacy advocates concerns, and legislation has been
proposed in California and New York that would ban the
police from seeking these warrants of Google. The legislation has
stalled so far, but activists are still hoping to get
something done on that front. And the Colorado case would

(39:01):
also be the first time that a court weighs in
on the on the constitutionality of that keyword search technique.

Speaker 6 (39:09):
Okay, so how does Google feel all about this?

Speaker 11 (39:13):
It puts them in a difficult spot. You know, these
are court orders. They're they're not optional. Goodle has to
comply and they often are important cases.

Speaker 12 (39:24):
However, safe driving user privacy is you.

Speaker 11 (39:28):
Know, a tey responsibility that they have, and so they
have to walk a very fine line there.

Speaker 6 (39:34):
Okay, so what about insight?

Speaker 10 (39:37):
There's the official Google response, and then there's what you
were able to report from within the company with some
great reporting.

Speaker 6 (39:44):
What did what did some of those sources reveal?

Speaker 11 (39:47):
Yeah, so we we found that there there's a department
within Goodle that's responsible for scrutinizing these requests. It's a
midst of lawyers and l I S specialists and the
as specialists, you know, the rank and file.

Speaker 12 (40:02):
There are often just a few years out of college.

Speaker 11 (40:04):
Some of them harbor dreams of becoming a lawyer, and
I think they're often quite motivated by, you know, this
job of really scrutinizing law enforcement requests. We heard of
examples in which they were really just looking for any
reason to send the request back to law enforcement. In
one case, you know, an officer might send a request

(40:27):
for email from an account ending in at gmail dot com.

Speaker 12 (40:31):
But if the officer has a typo, if.

Speaker 11 (40:33):
They say at gamble dot com, that's a note, they
would send that request back. But nonetheless, if it's been
signed off by a judge, you know, eventually they're going
to get something.

Speaker 10 (40:44):
And by the way, LI s legal investigation support. I
find this just fascinating because it's like Google's kind of
their hands are tied here, right, Like, yeah, if law
enforcement asks for something, a judge signs off on it,
they're going to have to comply. But I love that
there's like this element within the company that's like, you
spilled Gmail wrong, You're not going to get.

Speaker 6 (41:05):
To what you're asking for.

Speaker 3 (41:05):
I once spilled Gmail wrong when I'm trying to pay
a traffic ticket. So I parking ticket, so I had
to pay it twice. Oh yeah, because I got a
late fee for it. So never I always check how
I spelled you.

Speaker 2 (41:14):
But the point is once they give information on case like,
how can they pick and choose right? Like once the
door is open like you do wonder if they're asked
and requested as long as they get the Gmail right,
you know, do they just have to do it? Julia?

Speaker 12 (41:30):
Yes, you know.

Speaker 11 (41:31):
I think there's an old dodge in Silitan Valley. If
you build it, they will come, they say. Essentially, if
you collect this data, law enforcement will come knocking and
they will eventually find a way to get it. And
so I think that's just the heart of this issue.
Google collects this data in large part because it helps

(41:53):
them sell advertising, and as a result they they are
in this uncomfortable position.

Speaker 3 (41:58):
Davy all will come back in here. I always wonder
when you know people work on a story like this
and learn so much about how our information is collected,
are you going to change the way you use these services?
Perch after reading the story, I want to change the
way I use these services.

Speaker 13 (42:16):
Well, yeah, I mean I think it's it's a good
reminder to all of us to take a look at
our opt out slash opt in options on our settings
for various Google services. You know, Google told us that
this one product that they particularly use to store location data,
called location History, is off by default, but there they

(42:40):
do send notifications to people to sort of suggest, hey,
do you want to turn this feature on? It could
help you in all sorts of ways. For instance, if
you wanted to remember where you were last week, or
see how many miles you've traveled, or just kind of
have a cool record of where you've been and you

(43:01):
know what places you visited, right, And I think that
that's not always clear when you're seeing these like features
pitched to you, that there could be privacy consequences there.

Speaker 6 (43:13):
I just want to end on in a big number.

Speaker 10 (43:14):
Google says it received a record sixty four hundred and
seventy two search worms in the US last year. That's
more than double number from twenty nineteen.

Speaker 2 (43:24):
So this is the vanvo the use all right, Julia Love,
David Alban of course, Jill Weber, this is the cover story.
Check it out. Lots of details in that story.

Speaker 1 (43:34):
live weekday afternoons from three to six Easter on Bloomberg Radio,
the Bloomberg Business app and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say Alexa play Bloomberg eleven thirty.

Speaker 2 (43:54):
We've got a great guest to get into what's going
on when it comes to technology, but really the glolobal
battle among the three dominant digital powers when it comes
to regulating the space and influencing it.

Speaker 3 (44:06):
It's the subject of a brand new book, Digital Empires,
The Global Battle to Regulate Technology, written by a new Bradford,
Professor at Columbia Law School and senior scholar at Columbia
Business School. The book of follow up to her book
The Brussels Effect, a term that she coined. She joins
us on a zoom here in New York City. It's
good to have you with us, professor, How are you good?

Speaker 14 (44:26):
Thank you so much for having me.

Speaker 3 (44:28):
Well, thanks so much for joining us. So interesting. We
talked about regulating technology last week. That Diana Henriquez, who
wrote a book about the Well's written many books, but
her most recent book is about the SEC and the
development of the SEC under FDR. And we asked her
what you know that what needs to be regulated in
this day and age, and without hesitation, she said it

(44:50):
was technology and I'm wondering, how are you looking at
that through the lens of your book, especially outside of
the United States.

Speaker 14 (44:56):
Yeah, so they certainly is a growing consensus the world
that technology needs rules and the governments do need to
step in, but there is no consensus what those rules
really ought to look like. So in the book, I
argue that there are three prominent ways to think about
governing technology. There is the American market driven way, there

(45:19):
is that Chinese state driven way, and then there's a third,
the European rights driven regulatory model.

Speaker 3 (45:26):
Talk about the European one because that's kind of freshener
in our thoughts because of what Apple did with its
new USB C connector, because that's the result of.

Speaker 14 (45:35):
Regulation, absolutely, and that was one of those manifestations of
the Brussels effect, whereby rules that are set in the
European Union find their way into the global production and
global conduct of the tech companies. But basically, unlike the
Americans that really have focused on free market, free internet

(45:56):
and sort of maximizing the opportunities for innovation, the Chinese
and that really want to bring the state there to
leverage technology, including to maintain political control. The European rights
driven models starts from this presumption that digital revolution needs
to be human centric, the preservation of the democratic structures

(46:18):
of the society, the fundamental rights of the individuals take
the center stage, but also incorporates this notion of a
more fair digital economy so that we redistribute some of
the gains from the tech companies to the smaller players,
to users, and to the public at large.

Speaker 2 (46:38):
So, Professor Bradford, do you is it kind of going
to follow the same path as we've seen to some
extent with climate regulation and oversight, And also even I
feel like global regulatory oversight when it comes to markets,
it does feel like the EU leads away on a
lot of stuff. So that is exactly right.

Speaker 14 (47:00):
Europeans have consistently just shown that they are much more
comfortable with government intervening and much more skeptical with the
idea that markets on their own, left to their own devices,
would generate optimal outcomes. So the Europeans have been the
forderunners when it comes to regulating food safety, consuming the

(47:20):
protection the environment, the battle to mitigate climate change, and
now I think one of the newest frontiers has been
the regulation of technology, where again the Europeans are showing
the way.

Speaker 2 (47:32):
Why is it so important that we'd be having this
discussion right now?

Speaker 14 (47:36):
So I think that if you just look at the
vast power of these tech companies, they have the economic power,
political power, informational power, cultural power. They're really shaping the
societies and the lives of individuals around the world.

Speaker 2 (47:53):
And I will say just for a second, when we
had Diana Henrikson, when we'd ask for who are the
power brokers back in the nineteen twenty it was industrialists, right,
and she made the point of the power brokers today
are those that are in control of data, whether it's
Google or you know, Amazon, pick your company, but they
are the power brokers. But anyway, go ahead and continue.

Speaker 14 (48:13):
That is exactly right, and that is one of the
main concerns that the Europeans in particular take the view
that we cannot let these companies to be the power brokers,
that we need to then bind them to the rule
of law and subject they conduct to democratic oversights. So
we do need to bring the governments that are representing
the people back to the table and then sort of

(48:36):
directing the course of our digital economy.

Speaker 3 (48:39):
Based on the books that you've written, the research that
you've done the work that you've done, which approach is
the best?

Speaker 6 (48:45):
So look, I.

Speaker 14 (48:46):
Am a believer in the digital transformation needing a liberal,
democratic foundation, So there is no way that I can
endorse the Chinese digital authoritarian model. I think that is
too oppressive. It infringes individual rights and liberties and subjects
population to massive and as surveillance. So I have many

(49:11):
issues with the Chinese model, even though I must recognize
that China has done really well in devel developing technologies
even without having freedom as the foundation of the society.
But if the Chinese model is too oppressive, I think
the American model can be viewed as too permissive, and
it has really failed to step in to protect the

(49:34):
fundamental rights to protect our data and just placed too
much of the trust in tech companies that have then
failed to carry out their task as guardians of our
data and protectors of the digital space. So that really
leaves the European model as the one that I think
best advances public interests and checks the corporate power and

(49:58):
ultimately then leads to aa more sort of fear thriving
discal society.

Speaker 2 (50:03):
So does the EU and the US align on this
because it sounds like that's what needs to happen.

Speaker 14 (50:09):
I think that is exactly right, that ultimately you would
need both the US and the EO to join forces
and align behind a sort of same set of principles
for that governance model to be effected. And I would
say that there is a shift underway in the US.
So the US itself is now starting to rethink it's

(50:32):
technol libertarian commitments and starting to ask whether the markets
really are capable of governing the digital economy. And you
see the public opinion both shifting. You see that many
bills being proposed in Congress, and that indicates that there
certainly is a different conversation about technology that is much

(50:54):
more closer to the European rights driven model than what
we've seen in the past.

Speaker 2 (50:59):
You write right that this battle over digital quote will
ultimately determine the soul of the digital economy, defining what
kind of society we will live in for years and
decades to come, in a battle that the US nor
the EU can afford to lose. If we don't get
this right.

Speaker 14 (51:18):
Then what so what ultimately to me is at stake here?
The biggest battle is really about liberal democracy, and I
think the US and the EU should remember that liberal
democracy can be lost in one of two ways. So
one is if the US and EU will lose the
horizontal battle to China and the world is turning more authoritarian.

(51:43):
But also if the US and the EU you lose
the vertical battle to the tech companies and fail to
effectively control them, because if that happens, then the true
digital empires are either the authoritarians or then the tech
companies either. So Luisa's sustainable for anybody who believes in

(52:04):
liberal democracy.

Speaker 3 (52:05):
You know, it's interesting, Carol, I say this over and
over again, but if there's you know, there's not much
that unites Democrats and Republicans here in the US and Congress.

Speaker 2 (52:13):
This does bring them together.

Speaker 3 (52:14):
It does at least the idea of regulating big tech
right quote unquote regulating big tech the way they want
to do it is certainly different, and the reasons why
are different, but you know, they want to do it.

Speaker 2 (52:22):
It's a really good point. And I also feel like
there's a fair amount of streaming services out there, are
streaming series out there that reminds you when data takes over,
like kind of what happens to our world Professor Bradford,
thank you so much, really appreciate the time with you.
A new Bradford, Professor at Columbia Law School, Senior Scholar
at Columbia Business School on zoo from New York City.
Her new book, Digital Empire is the global battle to

(52:43):
regulate technology.

Speaker 1 (52:48):
Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App,
or watched us live on YouTube.

Speaker 2 (53:03):
Plenty ahead in our second hour of the weekend edition
of Bloomberg Business Week, including lots of laughs with Caroline Hirsch, she,
of course the founder of Caroline's on Broadway on her
next act, also a business travel primmer from our Bloomberg
Pursuits team, and the bank failure that rocked a tiny
Kansas town which may have involved pig butchering the crypto version.

Speaker 3 (53:22):
First up this hour, though art imitating life once again
Dumb Money in Theaters earlier this month. It's the real
life story brought to the big screen of the working
class redditors who became investors during the pandemic, making and
losing lots of money and turning Wall Street upside down
in the process.

Speaker 2 (53:38):
I recently caught up with Aaron Ryder, one of the
film's co producers, to get the backstory of how this
project came together in the midst of the COVID pandemic
and memestock mania.

Speaker 10 (53:47):
Yowd up, everybody growing kitty here, I'm going to pick
a stock and talk about why I think it's interesting,
and that stock is game stock.

Speaker 1 (53:58):
Retailed traders have hooked into games stock.

Speaker 2 (54:00):
I think they think it's a good investment. It looks
like there's one guy driving all the buying.

Speaker 6 (54:05):
Who is the shot?

Speaker 9 (54:07):
All right?

Speaker 2 (54:08):
Well, art imitating life once again this week, opening nationally today,
Dumb Money, the real life story brought to the big
screen of the working class redditors who became investors during
the pandemic making and I'm guess I'm losing some money
along the way as well, and perhaps even more interestingly
and shockingly, turning Wall Street upside down. Jess. We were
living this day to day as it played out during

(54:29):
the pandemic.

Speaker 15 (54:30):
Especially when you think of GME for GameStop, amc all
these names that come to mind that we're just taking
off in the beginning.

Speaker 2 (54:37):
Of twenty twenty one, right out of nowhere, and like
it was like, wait's what we're going here? Fundamentals? Who
cares out the window? All right, So let's get to it.
Because Aaron Ryder is producer of Dumb Money, as we said,
this movie opening nationally today. He joins us on Zoom
in Los Angeles, aeron No Stranger to the Big Screen.
Among other things. He of course did producer Christopher Nolan's Memento,

(54:59):
So really good to have him here. Welcome, welcome erin
big day, big movie. We all lived it, so we've
all been talking about a big time in the newsroom.
Looking at your trailer, there's a word in it that
we sometimes say in the newsroom, but it was said
a lot in the trailer because it was a crazy time.
What was the spark catalyst, media headline conversation that got

(55:20):
your attention, made you want to do a movie about this?

Speaker 16 (55:24):
Well, first off, thanks for having me CoA to talk
to you guys. So I was in Montreal up in
quarantine when this was all going down in January twenty
twenty one. Back then it was before the vaccines, as
you probably remember, and when you went from the United
States and Canada, you had to do a fourteen day
state mandated quarantine. So I was pretty much glued to

(55:46):
the internet just hearing all these headlines and seeing everything
that was going down, and I could not escape all
of this news about the store that I kind of
knew about when you go to the mall and why
it's stock was going through the roof. It was you know,
you guys were covering it. It was everywhere, and so
it was hard to ignore it.

Speaker 2 (56:05):
So how do you take something that right? It was
in our face and all of us were trying to
make sense of it. So how do you say, Wow,
that's really interesting and it's a conversation with your buddies,
versus I want to do something more with it, so
take us there.

Speaker 16 (56:18):
Well, I had got this great phone call from a
guy named Kevin Lark, who happened to own the studio
that I have a deal with or how to deal
with at the time, and he basically was like, look,
I think there's a movie here. And the amazing thing
about this, you know, not just because it was in
the headlines. Not every headline will make a great movie,
but there was this great David versus Goliath theme woven

(56:40):
throughout this.

Speaker 17 (56:41):
And you know, it wasn't just me or Kevin or
anyone else that thought there could be a movie here.

Speaker 16 (56:46):
Half of Hollywood was chasing the story, thinking that it
could be a great idea for film, and so it
became a real race to try to get the rights
to a book or a podcast to serve as the
basis for that story.

Speaker 2 (57:00):
You also, from what I understand, track down Ben Mezrich's
book Dumb Money Adventures of a Day Trader, which is
what the film is based on. So I'm just get
us there, like, how did that did you reach out to?

Speaker 8 (57:12):
Or no?

Speaker 13 (57:13):
Ben?

Speaker 17 (57:14):
It was kind of an amazing moment.

Speaker 16 (57:16):
You know, I'd heard this rumor that Ben, who had
written you know, he's covered so many of these things
in his career, has written books on so many great
topics that've been turned into great movies, including the Social Network,
And so I heard that Ben had a book proposal
and everyone was after it. So I kind of found
my way into the heart of his agent and convinced
him get me a copy of the seven page book

(57:37):
proposal that he was currently writing on the on the
phenomenon that we were all watching.

Speaker 17 (57:42):
So I heard about it, and you know, and did
what us producers do.

Speaker 16 (57:46):
We chased material and good ideas and got this book proposal,
and you know, it was all kind of there. You
could feel how you could easily turn the story into
a narrative for a film that would capture an audience.
So that getting that thing and working with Ben, who
could not have been a better you know, architect of
a story like this.

Speaker 2 (58:07):
You know, thank you Wall Street. Right, it just kind
of continues to give and give, whether it's the Great
financial crisis, whether it's tech bubbles, whether it's the creation
of some incredible companies, Like there's just unbelievable stories. Having
said that, like when you look at something like what
happened during this meme stock Eras, there's a lot of
stories in it. There's you know, just the trading element.
There's the individuals who were involved who were not the

(58:28):
normal people Aaron that we here at Bloomberg typically write about.

Speaker 17 (58:34):
No, it was your one hundred percent right.

Speaker 16 (58:36):
It was like in this moment, as we were all
trapped in our homes, maybe with a little bit more
money from the stimulus check that you got, and we
were glued to you know, we did not have the
connectivity to our friends or our family. We began to
form communities online and I feel like this moment was
like the moment that Wall Street was gamified and in
some ways democratize, where people that normally hadn't been in

(58:59):
bested on Wall Street and paying attention to these sort
of things. They gathered around this movement and an army gathered,
and I feel like this was the first time that
you saw that, and Wall Street felt the impact of
that army that gathered.

Speaker 2 (59:14):
How did you think about, like what the stories you
wanted to tell specifically, right, because it's really fun to
look at the trailer and I was thinking about you know,
Ken Griffin and you know others that are certainly individuals
that we talk about all the time here, Steve Cohen,
Gabe Plotkin. So there's you know, the establishment side of it.

(59:35):
Then there's the redditors in terms of you know, these people,
their worlds were changing dramatically. So just as you approach
this project, what were the stories you wanted to make
sure you got out there?

Speaker 17 (59:47):
Well, it's a great question.

Speaker 16 (59:48):
You know, we really wanted to make this movie about
it for those people that were on the reddit boards,
the people that were involved in this and got involved,
and you know, it starts with Keith Gill Roaring Kitty.
He was in large part the face of this movement
and the person that we all kind of identified with
the game stuff phenomena, So you knew he had to

(01:00:09):
be a you know, the focal point of a lot
of the story, and any very much he is. I
mean that's where it all kind of started. So and
then it was really Ben's book and the research that
he did, and Lauren and Rebecca are two screenwriters who
were able to kind of do a bunch of research
and find these real people who went through this experience,

(01:00:30):
and there's so many. The hard part was kind of
discerning the people that were involved with us and finding
there's really great stories that had a satisfying ending to
him or had a little bit of tragedy to him,
with the things that would make a good movie. You know,
we weren't making a documentary here. What we're trying to
do is make something that shows this moment in time
that we all lived through. But it was actually really

(01:00:51):
a fun moment because we'd never seen anything like this before.

Speaker 2 (01:00:54):
I'm curious who you talked to. I remember talking to
Oliver Stone about Wall Street and then the sequel of
like who did you talk to? To get the feel?
Even the same thing with Billions, like we've done a
panel here at Bloomberg and the guys like who did
you because they really did talk to, you know, folks
on Wall Street really to kind of get the feel
and make sure they were accurate. Who did you talk to?
In making this?

Speaker 16 (01:01:12):
Well, you know, look, there's so much stuff that's out
there true right now. Yeah, there's so much stuff that
you can learn, and there's so many things in the
headlines because everybody was talking about this, and when you
go see the movie, it's a very easy film to understand.
You do not have to be an investor in Wall
Street to understand this movie, nor do you have to
be some sort of economics major to understand what was

(01:01:32):
going on here. It's a movie for the everyman, and
that's really important in their construction of it. We didn't
want to be, you know, weighing this down with jargon
about you know, the economy or jargon about like investing
in that sort of thing. We're trying to make it
for and every man. So we took that approach, and
so in our research. It was really focusing on the
everyday people and how they look at the at investing

(01:01:55):
and how they look at the stock market and how
they maybe even see that the system may very well
be ripped.

Speaker 2 (01:02:00):
And I was wondering, when you were, you know, certainly
reading the headlines like the rest of us, did you
did you trade in any of these? Did you actually
participate in any of this in terms of the market trade.

Speaker 17 (01:02:11):
It's really funny actually.

Speaker 2 (01:02:12):
Because I had You're going to say, yeah, aren't you?

Speaker 16 (01:02:15):
Yeah, Yeah, I totally am. You know, I actually got
my Robinhood account. I wanted to understand how it worked
and how it operated, so I got involved with robin
Hood and I wanted to see how people were doing it.

Speaker 17 (01:02:26):
So I very much participated.

Speaker 16 (01:02:28):
I got involved with that and I started buy a
couple of shares here and there, just kind of see
how the everyman was going about and I needed to
understand how the apparatus worked as well. So yeah, I
got I got deep in it. And I think there's
no other way to read the understand it unless you're doing.

Speaker 2 (01:02:44):
Yeah, I totally agreed. Did you make money in the process.

Speaker 17 (01:02:48):
I can't. I don't even can tell you how much
money I lost?

Speaker 2 (01:02:52):
Well, and that's part of it. What's really kind of wild, though,
these individuals who started to be honest with you, Like
I just remember on a day when we'd have to
like highlight a stock and it obviously we're going to
highlight these because they were moving in such a dramatic
way in a market where you know, these were names
and individuals who were shaping the overall trade. It was
pretty phenomenal. Aaron, don't go anywhere, because I'm curious about

(01:03:14):
the actors that were lined up and just as the
movie progressed, just what you were kind of feeling and
the feedback you were getting. And I'm also curious about
the real life Steve Cohen's or Gaye Plotkins or Ken Griffin,
if you've heard from any of them. So hang on,
we're going to come back to you in just a moment.
We're going to continue with Aaron Ryder, producer of Dumb Money,
on Zoom from Los Angeles. I have to say, Jess,

(01:03:36):
I haven't seen the movie yet either have I, But
but I was thinking about, like you were here right
with all of our Wall Street team and reporting on things,
and it was just kind of crazy.

Speaker 15 (01:03:46):
It really was wild, and you couldn't stop following it,
and obviously as a reporter I had to, but I
mean I couldn't take my eyes off of it, even
when I was not reporting on it.

Speaker 2 (01:03:55):
And then there was a reckoning because the regulators got involved.
So we hadn't come back to Aaron Ryder in just
a moment with the producer of dub Money. Delight to
still have with us. Aaron Ryder, producer of Dub Money,
on Zoom and Los Angeles, the movie opening up nationally
on this Friday, Aaron, How easy was it to make
this movie in terms of financially getting the funding?

Speaker 16 (01:04:16):
Well, you know, no movie is ever easy to make.
It's a bit of a miracle when we actually pull
it off. This one, it was a little bit complicated.
We started out with it. I had to deal with
the studio MGM, and we started to make the movie
with them. But somewhere along the way about in pre production,
MGM had sold themselves to Amazon, and that's when things

(01:04:37):
got a bit more complicated. Let's say, just because you know,
you have this brand new giant entity that takes over
a movie studio and everything kind of slowed down. So
we were not able to move forward under that that
sort of deal that we had made, so we went
out and found ourselves independent financiers, and we found an

(01:04:59):
excellent partner with a company called black Bear and Teddy Schwartzman.

Speaker 17 (01:05:03):
It came on as our partner and we made the
film together.

Speaker 16 (01:05:06):
So it started out as a studio movie, ended up independent,
and then we found a home with a studio with Sony,
So that's that's how it came together.

Speaker 2 (01:05:15):
I have to jump in because if Schwartzman sounds familiar
to our audience, which it certainly does, Steve Schwartzman, of course,
is his father, Steve Schwartzman. I've talked to him. He's
the co founder or founder i should say, a Blackstone,
the private equity giant. So it's kind of interesting to
have that funding behind this film and a film that
also kind of makes a little fun of right the

(01:05:37):
hedge fund dudes, I mean they really, you know, kind
of really were caught off guard during this whole you
know process, if you will, of the meme stock craze.
A lot of them were you know, shorting some of
these names, and it really was uncomfortable for them. I'm
curious about how you thought about their portrayal in the movie.

Speaker 17 (01:05:58):
Well, you know, look, these are real people.

Speaker 16 (01:06:00):
Obviously, we did a really good job at trying to
tell the truth here, and our job is first and
foremost to make a really compelling and entertaining movie, and
just so happens that the subject matter made it very
easy for us to be able to do that. So
you know, we weren't out to try to overly vilify anybody.
It was just to tell an honest story of what

(01:06:22):
happened in this one particular.

Speaker 17 (01:06:24):
Moment in time.

Speaker 2 (01:06:25):
Well, exactly. Talk to us too about the actors. The
lineup is pretty amazing, Paul, Pete, David, Yeah, talk to
us about this cast.

Speaker 17 (01:06:34):
Sure, sure.

Speaker 16 (01:06:35):
I mean, look, it all started with Paul Dano, because
you know, the face of this movement, as we said before,
is Keith Gill and who's going to play that. He's
iconic now, and so Paul is somebody that both Craig
and I really had been trying to find something to
do with. He's just an exceptional actor and he just
embodies you feel to such a degree. He's got this

(01:06:56):
great sense of humor and energy to him, and I
think you'll see Paul in the way you've never seen
him before, And as far as the rest of the
cast goes, it's an embarrassment.

Speaker 17 (01:07:04):
Of riches, to be honest with you. We have such
a great lineup.

Speaker 16 (01:07:07):
Mostly people that have been friends that myself or Craig
have worked with in the past, you know, between Seth
Rogan and Nick Offerman, Pete Davidson, Shalan Woodley, It's it's
kind of a remarkable ensemble and one I'm really proud
of in a testament to the fact I think everybody
knew this story in one way or another wanted to

(01:07:30):
get involved.

Speaker 2 (01:07:31):
I love that. Is it a little frustrating with the
Hollywood Actors Strike that these this incredible lineup of actors
can't be out there talking about the movie.

Speaker 17 (01:07:41):
A little frustrating, might be.

Speaker 16 (01:07:43):
An understatele Sorry, yeah, it's it is. It's it's unfortunate,
But we feel like this moment is the moment for
this movie. Given what's going on in the country, the
division we have, the fact that we all live through this,
it just feels like this is the right kind of
movement and right kind of moment for a film like this,

(01:08:04):
you know, And I think it's reflected in the strikes
that you're seeing all throughout the country, not just in
in my uh in my line of work with the
actors and the writers going a.

Speaker 17 (01:08:13):
Strict but the you know, the auto workers and everyone else.

Speaker 16 (01:08:15):
There's a lot of disparity out there, and I feel
like this movie does a good job of highlighting that.

Speaker 17 (01:08:23):
So we've felt like now's the time to show this
to the world.

Speaker 16 (01:08:26):
And yes, it's disappointing not to have actors there because
we went through the journey with them and it's always
a lot of fun to go out and promote a movie.
But it's still it seems to be generating a lot
of interest. I like to think that, you know, what
do we need the actors for?

Speaker 2 (01:08:39):
Right, Wow, out your phone's ringing, Aaron No, it's interesting. Well,
the Times I thought said it really well too. They said,
you know, you're a movie about a populist uprising, right,
these you know, kind of small retail investors, These guys
just kind of doing their thing on Reddit and elsewhere
and really kind of bringing down the establishment in terms

(01:08:59):
of the trading environment. And you think about these hedge
fund titans like it's pretty remarkable. But you as you say,
like we also are seeing workers really step out and
speak up for their own rights. In terms of Hollywood,
what is it that, you know, I think about our audience,
a smart audience, so needs to understand about what's really
happening there at those picket lines. In a world where

(01:09:20):
we're talking a lot about, you know, the next level
of artificial intelligence and what kind of jobs that takes
out and what it means for the creative world.

Speaker 17 (01:09:29):
I think it's you know, we look, we.

Speaker 16 (01:09:32):
Reached the moment, an inflection point, if you will, and
most industries go through it.

Speaker 17 (01:09:36):
The entertainment industry certainly has its moments as well.

Speaker 16 (01:09:39):
It happened back in the early sixties when the reactors
went on strikes about residuals and that sort of thing,
as television became more and more prominent, And we're in
that moment right now, and it's in a large part
it was probably going to happen a couple of years ago,
but the pandemic disruptive things, and so this was a
moment that was bound to happen with this, you know,
the proliferation of stream and that sort of thing changing

(01:10:01):
our business dramatically, which it has, and so with that
sort of change comes to recalibration of how people are
paytent and what fair wages mean. And so, you know,
not just in this industry, but I think in multiple
industries across this country. So we're in that moment right
now and we're all feeling and I hope it things

(01:10:22):
settle sooner than later and we find that common ground
of fairness so everybody can get back to work.

Speaker 2 (01:10:27):
You just have about a minute and a half left here.
Is there for a favorite moment of yours in terms
of making the movie or you know, the process. I
know it's hard for you to be like, yeah, it's
my favorites, my baby or my latest baby, but is
there you know, take us a little bit behind the scenes.

Speaker 16 (01:10:43):
It's two things, you know, Like it's hard, as we said,
it's hard making the film and pulling all these elements
together and takes a lot of energy and certainly a
lot of money. And you have to hope that the
movie gods smile upon you. But for me, it's always
two moments in any given films. It's the moment when
you pull the whole thing together on the first day
of photography, and I think about it all the way

(01:11:04):
to the first moment made up until now, and when
you're standing behind the director and you got the whole
everybody ready to go, and the director kind of says
action to me, It's like, I feel like a moment
of triumph in that moment, thinking Okay, well this is
happening now and this story will be indelible. Those kinds
of moments are never lost to me. The second part

(01:11:24):
is when you show your film the first time in
front of a large audience, like we had the opportunity
to do in Toronto, and have an audience received the
film the way it did, with a standing ovation the
way we had, and just see how people really enjoyed
the film, there's nothing more rewarding.

Speaker 2 (01:11:41):
Well, we're looking forward to see it. I have to
say I haven't seen it yet, but I will. I
certainly lived it reporting on it. So fascinating to see
the interpretation that you guys did, because it really was
a remarkable moment in time for anybody who's been watching
Financial Mark it's another remarkable moment in time and good
to see you guys put it to the big screen. Aaron,
good luck with it. Aaron Ryder, producer of dub Money

(01:12:03):
as we said, opening nationally on the big screen, so
check it out. He's joining us, of course on zoom
In Los Angeles.

Speaker 1 (01:12:10):
live weekday afternoons from three to six Easter on Bloomberg Radio,
the Bloomberg Business App and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station,
Just say Alexa play Bloomberg eleven thirty.

Speaker 3 (01:12:30):
Make them lad, make him loud, don't you know?

Speaker 12 (01:12:34):
Everyone wants to lave?

Speaker 2 (01:12:35):
Yeah, Zoe, everybody. Let's make him laugh and laugh a
bit more. I mean, I gotta say, it's not always easy,
considering the news flow and the stresses that are out
there right. Economic, personal are otherwise kind of love that
from singing in the rain.

Speaker 3 (01:12:51):
You know what though, that's o'nor, But it's actually good
to laugh.

Speaker 9 (01:12:54):
I know.

Speaker 2 (01:12:54):
Okay, So where is good for us? We are nerds,
but speak for you usself. The Mayo Clinic points out
that when it comes to relieving stress, more giggles and
gufaws are just what the doctor ordered, noting that a
good laugh has great short term effects. When you start
to laugh, it doesn't just lighten your load mentally, it
actually induces physical changes in your body, including stimulating your organs,

(01:13:16):
soothing tension, improving your immune system. So everybody in the
control room, you better be laughing no more.

Speaker 3 (01:13:21):
Yeah, I better go to the Comedy Festival. The seventeenth
annual New York Comedy Festival, Yes, about.

Speaker 2 (01:13:26):
To get underway in early November. A legend in the
world of comedy is with us today in our studio,
Caroline Hirsch, founder of Caroline's on Broadway. Of course you
know that she's here in our Bloomberg Interactive Brokers studio. Welcome, Welcome,
welcome back. How are you good.

Speaker 4 (01:13:40):
I'm good, So we have quite the medicine for you.

Speaker 2 (01:13:42):
The New Comedy Festival.

Speaker 3 (01:13:44):
My voice doesn't usually sound like this.

Speaker 4 (01:13:46):
Festival number third, the twelfth we've extended this year. We're
ten days straight, probably about one hundred and fifty shows,
still counting. We're still adding, we're still putting people together,
so still announcing new shows coming up, twenty two theater shows.
So we're very very happy.

Speaker 2 (01:14:03):
Carolyn. I just had family in from Texas, and you
know what they did. They did a bunch of things
around New York. It was a short weekend they went
to a comedy show. People want to experience things. How
did you guys think about that? Are you seeing increased
demand or a lot of demand coming out of the
pandemic of people just wanting to go to things like
comedy shows.

Speaker 4 (01:14:19):
Well, I think the general people want to go to
live events, and I think live events are like the
big thing right now. So look, when we put tickets
on sale, we got a really really robust kind of
reaction to it. So ticket sales are really really good.
That's good, it's good.

Speaker 6 (01:14:35):
It's good for New York.

Speaker 4 (01:14:36):
Okay, at Madison Square Garden, Shane Gillis at Carnegie Hall,
Mateo Lange and me Carr Anthony just all at Carnegie Hall.
And you know what happens that, you know, people go
to Carnegie Hall and then they'll go to the restaurant
across the street. Right, So what we do is bring
this stimulus to New York City, which we're always happy

(01:14:58):
to do, and we have a lot of fun with
doing it. And then we have you know, we we
have britt Goldstein. Do you know him from Ted Lasso?
So he's doing a lot of him at the beach. Wait,
can we all say what he says, Oh, no, we
can't say that.

Speaker 3 (01:15:09):
On air, can't we you can you can't. You can't
be your last show.

Speaker 2 (01:15:13):
We do say it a lot of the news, but
go ahead. He's so great.

Speaker 12 (01:15:17):
Yeah.

Speaker 4 (01:15:17):
And then we have you know, we we have a
big event which is Stand Up for Heroes, which kind
of opens up the festival this year on November sixth.
So we have Jimmy Carr there, Tracy Morgan, Rita Wilson
will be singing, Shane Gillis, Ronnie Chang, John Stewart who's
a constant there, and also Josh Grobin and John Mellencamp.

(01:15:41):
So that is quite as shore.

Speaker 3 (01:15:43):
Are they doing comedy?

Speaker 6 (01:15:45):
Are singing?

Speaker 16 (01:15:46):
Yeah?

Speaker 3 (01:15:46):
This thing okay, that's okod.

Speaker 2 (01:15:48):
How do you think about when you put it together?
Seventeen years and running? Talk to us about like how
it's evolved.

Speaker 4 (01:15:54):
Oh, it's nineteen years forgive me years and seventeen years
for the Stand Up for Heroes. But it's nineteen years,
sixt year. We're having a big, big blowout the twentieth
year in New York City.

Speaker 2 (01:16:06):
Wow.

Speaker 4 (01:16:07):
You know we start the day after we finish here,
we start for next year. Actually, we're trying to secure
venues ready for next year, you know, our big shows
at Madison Square Garden. So we do that constantly.

Speaker 3 (01:16:18):
You know, it's we don't often because we have a
global audience here on the program.

Speaker 6 (01:16:22):
We really, yeah, we do.

Speaker 2 (01:16:24):
I had no idea that's some comedy for you.

Speaker 3 (01:16:26):
Kidding looking into the control room and see if you
can sit. They're not laughing in there. I know, I
know to my day job, but we do, and we
you know, we have a national audience as well. So
why are we talking about something here in New York. Well,
because a lot of people from all over the world
and all over the country come to this. Talk a
little bit about who this attracts and sort of where
New York is right now in the comedy scene, because

(01:16:48):
you know, there are people who are saying, you know, okay,
La is you know a classic place for comedy. You've
got Joe Rogan and Austin doing his thing, you know,
trying to make Austin comedy happen. Where do you stand
on all this?

Speaker 4 (01:17:00):
You know you can never negate New York. Yeah you can't.

Speaker 2 (01:17:03):
You can't take the New Yorker New Yorker.

Speaker 4 (01:17:06):
No, it's here, it's here, It's here. It's where it starts.
This is where you get the creative juices. This is
where you get the ideas they you know, the whole
thing with La was that, you know, which is not
so quite in fashion right now, is to go out
there to get your sitcom. That's that's not really happening
anymore now.

Speaker 3 (01:17:22):
It's nice happening the last five months without the writers strike.

Speaker 2 (01:17:24):
I can tell you that I guess they're a bad
That's a really good point because you did see a
lot of comics for a long time, right get a
series and then just move to television. It's kind of not.

Speaker 4 (01:17:34):
Happening now at the touring that goes on. When you
have a great special that's on TV, you take that
and you go on the road, and that's your millions
of dollars that these people, you know, comedians are making
on the road. When you're selling out Beacon Theaters, Carnegie Hall,
when you're selling out the Garden. This is this is
like this is big bucks, you know. So it's it's

(01:17:54):
it's a big, big business for a lot of people
that have really you know, made it and are able
to tour around the country.

Speaker 2 (01:18:00):
Can we talk about the business of comedy and I
think about you know, last December, your iconic club, right,
you did not renew your lease it's spot in Times Square.
How hard was that?

Speaker 12 (01:18:12):
You know?

Speaker 4 (01:18:12):
I wanted to stay, and then there was a part
of me which did not want to stay because of
the way. And I don't want to put down Time
Square because I went there thirty years ago to build
it up and I was part of that, the renovation
of Times here and the renewal of Times Square. So
I'm not going to put it down. But things were
changing there. The city was changing there. I felt that

(01:18:34):
after COVID, the whole seascape there was changing. And I said,
let me step back. I own the brand. I want
to take the brand. I'm extending it through the festival
and then we have other ideas where we're going with that.

Speaker 3 (01:18:48):
Okay, yeah, give us some of those other ideas.

Speaker 4 (01:18:50):
Yeah, well, you know, we're taking the Carolines brand and
you know, kind of producing content and putting it out
there and specials and everything else that we do with
comedy on a grander scale.

Speaker 3 (01:19:01):
I mean, it really was the end of an era
for you not to renew your leaves there.

Speaker 4 (01:19:06):
Well, yeah, I was lived thirty years in Time Square.

Speaker 3 (01:19:09):
So I mean Tom Square changed a lot in thirty years,
and it changed a lot just in a few years
because of the pandemic. Talk to us a little bit
about the you know, what happened, and the decision making process,
and the external factor is there too, Okay?

Speaker 4 (01:19:21):
So obviously I went to my landlord and I go, listen,
we need some relief here. You know, things have changed
a lot, so can you He goes, no, Actually, we
really want to raise the rent. So I said, oh,
but you know, there's so many repairs that have to
be done. I'm here for thirty years, you know, air conditioning,
electrical work, just things needed to be upgraded. And he said, well,

(01:19:41):
that's just what the deal is. And I tried very
hard to stay there, and then I just said, well,
I'm out of here now at this moment.

Speaker 12 (01:19:47):
Done.

Speaker 3 (01:19:47):
Did you have other things to do you? Did you
look for other play other physical space.

Speaker 4 (01:19:51):
No, but I have to tell you that we had
so much press when we closed that so many real
estate developers called me. He said, I have spaces for
you and I will help you build it out.

Speaker 2 (01:20:04):
So why didn't you do it?

Speaker 4 (01:20:05):
Well, we're in the I'm in the process of taking
it all in and deciding what the next big move in.
It's not it'll be four wolves, but it'd be something
very different.

Speaker 2 (01:20:13):
What a great feel?

Speaker 3 (01:20:14):
That is pretty cool?

Speaker 15 (01:20:15):
Right? Great?

Speaker 2 (01:20:16):
So this is like it to be continued. You'll come
back in like two months, three months, four weeks. Can
ask me what do you find funny today? Are you oh,
oh my god, we need laughter? What do you find
funny today?

Speaker 17 (01:20:33):
You know what it is?

Speaker 4 (01:20:34):
You know what I find funny is that it's almost
the point when a joke is it reaches the point
where it it is such a great joke that it
hits the point that it's almost politically not correct. And
those kind of shows, those kind of jokes are brilliant
to get to that line, make your point, but not

(01:20:54):
go there.

Speaker 2 (01:20:55):
Remember where we could say it's a joke people.

Speaker 3 (01:20:57):
So you can still say that, No you can't.

Speaker 2 (01:21:00):
It's no tough.

Speaker 3 (01:21:01):
Yeah, it doesn't matter. If you know Netflix staff walk
out over, you know your your special, You're still selling
out arenas across the country. I'm talking about Dave Chappelle here,
that's truth.

Speaker 1 (01:21:13):
Yeah.

Speaker 2 (01:21:14):
Is it tough for comics today?

Speaker 12 (01:21:15):
Though?

Speaker 4 (01:21:15):
I don't think so. I just think I just think
that they need to stay on a steady, straight path.
And I think that they do realize that that things
could be offensive. And I think that, Look, I've seen
a lot of male comics change a lot of stuff.
What they used to say, they wouldn't dare say that.
I mean, they get strangled by every woman in the audience.
But things have changed like that, and I think people are,

(01:21:38):
you know, mindful of other people like that. Like we
were just talking before I walked in here. I was
talking about Don Rickles today. We said, oh my god,
he couldn't insult people like that today.

Speaker 3 (01:21:48):
That's a good point.

Speaker 12 (01:21:50):
It was a joke.

Speaker 2 (01:21:51):
Don Rickles, D mart and all those guys like.

Speaker 3 (01:21:53):
You think self censorship is real.

Speaker 4 (01:21:57):
I think I think it is. I think it is,
but to a good self censorship, not anything like I
think it's good. But it's that brilliant joke that may
cross the line but doesn't. And those are the greatest,
the still get away with stuff, who can really push
it are there? Certainly well gave Dave Schelle can ali
Wan Can. That's a woman that can hit that mark

(01:22:22):
of not crossing the line but through us on the line.

Speaker 3 (01:22:25):
My turn where you're going, Okay, go. I want to
know your opinion, Caroline, about the role of comedy clubs today.
Given that there's YouTube, there's TikTok, there are all these
places where comedians, up and coming comedians can post their
content and build a following there.

Speaker 4 (01:22:44):
That's a good thing. That's a good thing for clubs
because when they build the following, then they get booked
into the club and they make really nice money and
everybody's happy because they sell out. So it's also still
that live experience. People still want it. They want to
go in that room with you and me and all
laugh together. That's what they want. That's the thing about
what makes a joke, It's that the community is sitting

(01:23:06):
there saying, oh God, that happened to me too, and
you laugh. So it's all part of that live experience.
And I'm seeing that with the festival as everything is.
You know, these everybody in the festival has a terrific
online following. I mean they millions of people huge, but
they want to go out and see them. The same
thing that happened when years ago, when you had that
great HBO special that built you up so that when

(01:23:29):
you toured around you would sell out, right, So that's
all money in the bank for the performers.

Speaker 2 (01:23:33):
The nineteenth annually, that how many festival this November. I'm
giving you a shameless plug. Hey, listen, take us back,
because you've been doing this a long time. Back in
the early eighties you began, I mean, Jay Leno, Jerry Seinfeld,
Pee Herman, Billy Crystal, Robin Williams, Sandra Bernard, I know,
Chris Raight, I know it breaks our heart right like
these are people that were funny like no other and

(01:23:57):
changed I think the way we see comedy, enjoy comedy.
But in the early day, is everyone funny out of
the gate?

Speaker 4 (01:24:05):
Well you see, you know we were just talking about
Bill Maher So you know, Bill started at my little
club on eighth Avenue. But of course you grow over
the years, Jerry Seinfeld, you grow over the years. Jay Leno,
grow over the years. But Jay has always been this
menshi guy.

Speaker 3 (01:24:21):
What ja tours like four days a week now, probably every.

Speaker 4 (01:24:24):
Weekend he's doing something, you know, And so Jerry Zeipfel,
you missed. Every weekend he's probably somewhere doing two or
three shows back home again during the week and that's
really his life because he loves what he's doing.

Speaker 2 (01:24:37):
What do you remember from these guys in the early days,
you know.

Speaker 4 (01:24:40):
We were all so new to it. It was like,
you know, when I opened Carolines, it was like the
first headliner club in New York City. It was like
a yuppie that word yuppie. We're going back to the
eighties yuppie nightclub that opened up. And it was the day.
It was when David Letterman was at twelve thirty at night.
Jay Leno would be at my club and he'd say like, oh,
I'm appearing at Alliance. It gave us this national play

(01:25:02):
around the country, and that kind of set up the club.
And I remember, you know, Paul Rubens pee wee harmon
bringing him to New York. I have such fond memories
of him. And you know, I didn't up until he
was texting me on my birthday, sending me birthday videos
up until the end saying listen, we need to FaceTime soon.
Are you coming to LA I'm not coming to New York.

(01:25:23):
Didn't tell me he wasn't feeling well, because I would.
We would always, like you know, text each other back
and forth, and I had no idea he was sick,
but he brought a show to New York. In New York,
they conceived Pee Wee's Big Adventure. He was going to
ride his bike from LA to New York City with
this unknown director at that time, Tim Burton Khunew. But

(01:25:44):
you know that's that's what Paul had. He had that
creative part of him. Those comedians that I worked with
from the beginning all went on. Look at Jerry and
Larry David show seinfeldt, oh, my god, earth shattering. You
know we still say we were just talking about it
last night. I still turn it on and see an
episode I haven't seen.

Speaker 2 (01:26:03):
Right, well, I always make references to Stein felt like
I've seen them all.

Speaker 3 (01:26:06):
I gotta tell you, Okay, so we only have a
minute left, Caroline. But comedians who have made it love
to say that in order for comedian to make it,
you've got a bomb. Give us some stories of some
prominent bombs that you've witnessed in your bag.

Speaker 4 (01:26:19):
How about Larry David And he would say, oh, to
the audience, they're just terrible.

Speaker 2 (01:26:23):
And he didn't do that well or twice.

Speaker 3 (01:26:26):
He did that all over see that I can see
the curve.

Speaker 4 (01:26:32):
They're terrible, They're terrible.

Speaker 2 (01:26:34):
They bomb, I gotta say, and what you've done for
women comedians right when they were just so far in
few and just to see everyone out there today, it's incredible.
You are incredible. Come back anytime. Let us know the news.
If you land somewhere, okay, you can share it with us,
and good luck again. Remind us when the festival.

Speaker 4 (01:26:52):
Is November third to the twelfth. Go to New York
Comedy Festival dot com and you would be amazed to
see how many shows are listed there to go see
and have a great time.

Speaker 2 (01:27:01):
Thank you so much, good luck, be wellome Caroline Hursh,
founder of Carolines of course on Broadway. Here in our
Bloomberg Interactive Broker Studio, Carol Masser, Tim Stanevek. We're not funny,
but she is anterlineup. This is Bloomberg.

Speaker 1 (01:27:17):
live weekday afternoons from three to six Eastern on Bloomberg Radio,
the Bloomberg Business App, and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station,
Just say Alexa, play Bloomberg eleven thirty.

Speaker 12 (01:27:36):
Time.

Speaker 2 (01:27:36):
Now for a bit of luxury with our friends from
Bloomberg Pursuits and this week's issue of Bloomberg Business Week
magazine includes the return of the Business Travel special, highlighted
by the debut of a series called two Night Minimum.

Speaker 3 (01:27:47):
It's your personal travel guide to some of the world's
most iconic destinations, design for those who want to get
to know the heart of a place in a pretty
short time, whether they're in town for business or they're
just passing through or making a weekend more of it.

Speaker 2 (01:27:59):
Yeah, absolutely, we have the dynamic do Bloomberg Pursuits editor
Chris Rouser and Bloomberg News travels are Nikki Eckstein. Our
first installment to Night Minimum comes courtesy of one of
our favorite reporters, Brandon Presser, who whisks us to the
Spanish capital of Madrid. But we also do want to
point out that this sectual Pursuits coincides with the launch
of Bloomberg Travel. It's a department, Nikki, that you have

(01:28:19):
been overseeing and you're bringing together Pursuits content with coverage
from all our different teams around Bloomberg. Can you just
tell us a little bit about that?

Speaker 8 (01:28:28):
Yeah? So, do you want to hear our official tagline,
I love our highle tagline the new hub for globe
trotting leaders, covering everything from the business of travel to
the most worthwhile experiences that money can buy. So you've
known and loved the most worthwhile experiences that money can buy.
That's always been the pursuits travel, Emma. We love to
tell you how to spend your money well all around
the world. But now I think really, ever since the pandemic,

(01:28:49):
we've really attuned our geeze to how important travel is
as a pillar of the global economy, and we're really
broadening our scope to think about that and how it
affects government people. Economy is job INFLA and you know,
all of these topics have a really really clear relation
point to travel in the travel economy, and so our
coverage is inclusive of all of those things. Now it

(01:29:11):
has been for a while, and now it's more organized,
you can find it more easily Bloomberg dot com. Blush
Travel is a really exciting effort. I'm so proud to
be leading it.

Speaker 2 (01:29:19):
Well, it's really cool. And then do you think about Chris,
how much time you know Tim and I on a
daily basis talk about the travel industry and the importance
of it to the global economy.

Speaker 18 (01:29:26):
Yes, yeah, I mean it's one of the biggest industries
in the world, and Nikki is taking charge in making
Bloomberg like really cover it the way we cover all
these other industries, and also giving smarter tools for travel,
like you know, we're just the way you think about travel,
how you can be a better like steward of the
world as you travel, but also how you can save money.

Speaker 3 (01:29:47):
Well, Nikki, let's start by heading to Madrid, because as
you and Brandon Wright in the piece, it's kind of
not known as a place of you know, a destination
in the same way that Barcelona in the past has been.

Speaker 8 (01:30:01):
I mean, you're absolutely right. Barcelona has always been the
kind of capital of cool and culture and all things
hip and fabulous in Spain, and Madrid has really been
the seat of government and banking, and I think it's
been seen as more staid by comparison. But I've noticed
and I think Chris you've definitely noticed this too. We've
talked about it. In the last year or two, everyone

(01:30:22):
is going to Madrid. Madrid is suddenly the coolest place,
maybe like all of Europe. It's really had this incredible
resurgence and as we've learned some of it. A lot
of it has to do because people from broader Latin
America have made it their new home. Amid the pandemic,
a lot of people move to Madrid. It brought in
an influx of foreign investment, a lot of tech startups

(01:30:43):
moved to Madrid, and it's just juiced the energy in
that capital made it a far more vibrant, cosmopolitan place.

Speaker 1 (01:30:49):
All right.

Speaker 2 (01:30:49):
So if we've got a couple of days, like, how
do we think about approaching it?

Speaker 8 (01:30:53):
So our guide really allows you to pick and choose
your own adventure, depending on what your priorities are and
how you want to spend your time.

Speaker 7 (01:31:00):
One of my.

Speaker 8 (01:31:00):
Favorite things about it is the section of activities, the
kind of classic C and do section of a travel guide.
We've switched it up in a way that's just way
more efficient and plugged in. So everybody goes to ls Throw,
the sprawling flea market near the Pusai Ord, and people
usually go on the weekends and it's like a rat

(01:31:22):
race of anteeking. But our version of this is, don't
do that. Go on a weekday. There are two beautiful
shopping arcades, Galla Das Picered and Noel Gallerias intersto two streets,
basically that you can prioritize. You've given me the exact
shop to go to, and we've told you the best
things in those shops to buy, in this case, beautiful ceramics,

(01:31:44):
little hand towels, things that will actually fit in your suitcase.

Speaker 18 (01:31:48):
One of my favorite things in city guides is when
you when someone tells you what neighborhood to walk around,
because that's kind of what I want to do when
I'm in a city. Especially they don't have a lot
of time, and so we tell people to, you know,
walk around on Barrio de la Laetras or Chambourrie. And
also like the Prado. You can't go to Madrid without
going to the Prado. We tell you the shortcuts and
like what to do, what the if you have limited time?

(01:32:10):
Which I love because you go in there and it's
like the biggest museum ever and you it's like how
do I even do it? And then we've got restaurants
and hotels, so we've really got everything. And then like
day trips too, so we've really got everything you need
to know for a weekend.

Speaker 3 (01:32:21):
Nikki, let's talk about some of those restaurants because the
food there is.

Speaker 8 (01:32:24):
Not to be missed, and it's probably not what you
expect either. Like, of course, there's all of the top
us crawling, and one of the things that I love
is that we're not just giving you like a single
place to go get top us. We're giving you an
entire kind of neighborhood. We outline a whole tap us
crawl in Malasanna, for instance, with numerous stops and telling
you exactly how to do it most efficiently. But then
there's also places like Salm and Guru, which literally looks

(01:32:46):
like the inside of a manga comic book and it's
just amazing, super hypermodern and the futuristic cocktail bar with
an Asian inspired menu. Go there at risk of missing
your dinner reservation because it's just so much fun to
be there. And then there's place says like Lennia. For instance,
there's this one chef in Madrid that owns all of
the best restaurants in the city. We've picked out the

(01:33:07):
best one in his empire. It's Lenia. It's the steakhouse
and everything is done very dramatically with table side flare
and fois gras is disguised to look like a little
Granny's my apple. The steaks are smoked. It seems just
like the best place ever. So we've kind of curated
it that way. Pick the best restaurant from the chef
that has all the restaurants, pick the one street to

(01:33:28):
go for top us.

Speaker 2 (01:33:29):
It's like a great guide right when you just don't
have a lot of time and you can really just
figure out the things to do. I love it, love it,
love it. The other thing I don't, actually, on the
flip side, don't love is all the fees I play
pay when I'm traveling. You guys, Chris get into that
as well, So talk to us about what you covered.

Speaker 18 (01:33:46):
We have this writer Ramsey who is a genius on
points and miles and fine finding discounts and how to
sort of efficiently.

Speaker 2 (01:33:52):
You guys calling him.

Speaker 6 (01:33:55):
Well, yeah, we had some long.

Speaker 18 (01:33:57):
Talks after Delta changed their sky miles rules, you know,
so he went through and like went through to find
these hidden fees because there's actually like legislation coming through.
Biden has made as a priority to make increasing transparency
on fees like hotel fees. You show up, you thought
you were paying one thing, and then there's like all
these fees that are more this is like.

Speaker 3 (01:34:14):
A resort fee.

Speaker 6 (01:34:15):
Yeah, like airline fees.

Speaker 2 (01:34:17):
So many times you go to a work conference, right,
and there's like the resort fee that we're never going
to like.

Speaker 6 (01:34:21):
I know, it makes you seem like you're at the spot.

Speaker 12 (01:34:23):
I don't.

Speaker 3 (01:34:23):
I was concerned about it when I travel for work.

Speaker 8 (01:34:26):
Okay, So you know what, I have worked at companies
where you have a very sick perdem and those types
of things can be really, really sticky, even for business
paper wars, I will say.

Speaker 18 (01:34:34):
So Ramsey goes through and talks about airline fees, how
to avoid them, fees for checking bags, things like that,
resort fees, currency conversion fees. What's actually I travel a
lot and I actually never know what to do when
it says, okay, you're in a foreign country, do you
want to pay in dollars or do you want to
do euros?

Speaker 3 (01:34:49):
You pay in euros exactly. And I didn't know that
until reading this, because you pay see.

Speaker 2 (01:34:53):
Right for that version.

Speaker 6 (01:34:55):
I know what's wrong with them.

Speaker 3 (01:34:56):
So there he's like, I can't talk to you, nikky.
It's all like Chris Chris, or I'd go anywhere out
of the US like, let's be honest.

Speaker 8 (01:35:05):
You know, we do this funny thing sometimes in our
department where we have to ask people who sit around us,
did you know this?

Speaker 2 (01:35:10):
Is this?

Speaker 8 (01:35:10):
News? Is this new to you? And dynamic currency these
is one of the things that I always knew, but
I took for granted how little known this is and
I didn't realize exactly why it happens. And so what
happens is when you pay in dollars, you're automatically being
charged a convergency that's built into that price, and it's
usually between two and three percent. And if you pay
two and three percent extra on all of your expenses

(01:35:31):
across your travels, that adds up meaningfully.

Speaker 4 (01:35:34):
All right.

Speaker 2 (01:35:35):
There's a lot more advice too, when it comes to
the value add attacks, which I know about doing, and what.

Speaker 3 (01:35:41):
About the digital one?

Speaker 6 (01:35:42):
Through about that kiss?

Speaker 3 (01:35:44):
Didn't know that one?

Speaker 2 (01:35:46):
Really great advice. There's also some great coverage on weekender bags.
Weekender bags, Did I say that correctly?

Speaker 1 (01:35:53):
Yeah?

Speaker 8 (01:35:53):
We can.

Speaker 2 (01:35:53):
Weekender bags some really nice posh ones, to be quite honest.
And then there's also like those great little cues. My
daughter's really into that, like when packing, like you put
them into cubes.

Speaker 18 (01:36:03):
Packing cubes are a thing that I know that I
should use, and I don't like. It's like a healthcare FSA,
Like I know it's.

Speaker 3 (01:36:09):
A thing that we're supposed to use.

Speaker 6 (01:36:10):
It can help you with Nikitch, but I just after
we did this story, I just bought some for my husband. Okay.

Speaker 8 (01:36:17):
I love that you really I would packing cube your
belief system. I feel like, can you either live and
die by your packing cube or it just doesn't work
for you at all. Not a taking tube person, but
I know so many people who literally cannot go on
a trip without putting everything into cube.

Speaker 2 (01:36:30):
I think it's a good idea. I just haven't done
it yet. All right, guys, listen, great coverage, great kickoff,
and so good to be talking with you all again.
Our thanks to Bloomberg Pursuits editor Chris Rouser and Bloomberg
News Travels are Nikki Eckstein.

Speaker 1 (01:36:42):
Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,

Speaker 2 (01:36:56):
The author of the Piece of Into Albright Wealth Team
reporter for Blouem News. She is on zoom from Kansas,
and then here in our studio the editor of Bluemberg BusinessWeek,
Jill Weber. Jill, this feels like a perfect Business Week strue.
But tell us about how it came.

Speaker 10 (01:37:10):
To you all, Amanda. So, we have had a number
of bank failures this year. Obviously, that was the theme
that we were all over as an institution at Bloomberg
earlier in the year, and a lot of those were
the middle size American banks. What stood out about this
one was Amanda's reporting because it wasn't for the usual

(01:37:32):
reasons that we saw with.

Speaker 3 (01:37:34):
Silicon Flight Bank, or wasn't a bank run.

Speaker 10 (01:37:37):
It wasn't a bank run, you know, it wasn't any
of that. It was because the CEO maybe did some
unwise decisions with crypto, right, Amanda.

Speaker 15 (01:37:48):
Yes, that's exactly right. And that's one thing that even
from the jump, people in Kansas stress that this wasn't
some bigger issue with Kansas banking or something specific to
the state. Was a very idiosynocratic and specific situation, and
my reporting definitely supports that as well. So it was

(01:38:08):
different from earlier this year, but also a very interesting
case on its own, all.

Speaker 2 (01:38:13):
Right, So let's get into the details. Amanda tell us
about Shan Hayes.

Speaker 15 (01:38:17):
So he is the CEO of this bank, Heartland tri
State Bank. He's the longtime CEO. He's worked there and
different iterations of the bank. Basically, he got his career there.
He started as an agricultural loan and IT officer at
a bank under a previous name, and so he is
really just a kind of towering figure in this very

(01:38:38):
very small city in Kansas. I went to the city.
It's a very far drive, but once you get there,
everyone kind of knows each other, and so they all
knew about Shane, and they all knew about the bank.
They were all still talking about it and all eager
to talk to a reporter about it, even if they
didn't want their name used. Everyone was kind of a

(01:38:59):
buzz in the town about this, and you know, everyone
had kind of different Sorry to jump the gun a
little bit, but everyone had a little bit of different
reactions about it, which we can definitely talk about. But essentially,
Shane was this big figure within the community. But he
was also a pretty important figure within Kansas banking across
the state bankers in Kansas and surrounding states all know

(01:39:20):
who he is because he has this role on the
Kansas Bankers Association, or he previously had a role in
the Kansas Bankers Association. He was the chairman, and he
also worked with the American Bankers Association in different capacities
for them, and as part of that he would go
to Capitol Hill. You know, we point out at this story.

Speaker 2 (01:39:39):
Then blowdown because we want to know what happened.

Speaker 3 (01:39:41):
Yeah, I mean, how did this guy with so much
experience find find himself asking one of his customers for
twelve million dollars in cash?

Speaker 2 (01:39:50):
How does that happen?

Speaker 15 (01:39:52):
Yes, I jumped the gun, was excited to talk about
the story. So it's atory basically one of my basically
in reporting it, I got a tip that essentially this
meeting had taken place where the CEO had asked one
of his wealthiest clients for twelve million dollars. During that meeting,

(01:40:14):
Based on my reporting, it's basically he asked if he
could have twelve million dollars and indicated that it was
his personal money that was locked up in this crypto
app and you know, in order to get it out,
he needed to put more money in and that's kind
of even though we don't know exactly the specifics of
how this all came to be with the crypto app

(01:40:36):
and how he ended up putting it in and who
directed him to do that, et cetera, And it might
take a while to figure that out. But if anyone
needs my phone number, let me know.

Speaker 2 (01:40:45):
But it's a good reporter, man.

Speaker 15 (01:40:50):
They're parallels to pig butchering scams, where you know, he
said he knew someone who was helping him with crypto
investments basically, and in pig butchering, usually they find someone
and they are encouraging them to put money into a
sometimes fraudulent crypto app. They say, just put a little
more in and we can get you your money out.

(01:41:12):
Maybe there's an issue with taxes or the wired didn't
go through. Try again, and it's it's really really sad.

Speaker 6 (01:41:19):
You know, what's it?

Speaker 10 (01:41:19):
What's it like when you're driving out there and and
then you you get there and what are the vibes
in a town like this when something.

Speaker 6 (01:41:27):
Like this happens.

Speaker 15 (01:41:28):
Yeah, So the drive out there, I really felt like
in order to report the story, I needed to go there.
And you know, it's it's a pretty you know, sparsely
populated town. It's very.

Speaker 1 (01:41:43):
Even.

Speaker 15 (01:41:43):
The layout is very insular, like you can drive around
all the neighborhoods and it's all kind of connected. Like
I felt like I was able to get a pretty
good feel for what the town was like, even just
being there for like two days.

Speaker 2 (01:41:54):
People there are so so nice.

Speaker 15 (01:41:58):
Very few people wanted their name to have anything to
do with this story because of the sensitivities of it,
but they were eager to talk about it, like I said,
because I think, you know, some people are very disappointed
and upset. Some people are just straight up like they
want the full scoop, they want to know what happened.
They're eager for the gossip. So everyone had kind of
a different perspective, And you know, this is a community

(01:42:21):
where everyone kind of knows each other. When I was there,
I wasn't sure if people like knew that I was
a stranger, but it did seem like some people kind
of vibe about me and kind of may have known
that I was a reporter. So it was really helpful
to go there and get a sense of the community
and just how it really is a very kind community.
And so I think that's why people are very disappointed

(01:42:44):
by what happened, because I mean, Shane was part of that,
He was part of the community. He was known as
such a nice person, and you know, I talked to
someone who described him as like assault of the earth
human being, and I think some people still have that
view about him. Basically, people want to think the best
of him in this situation. They want to know if
he was trying to help the bank. They really want
to understand, like why this would happen. And so I

(01:43:08):
have a feeling this story won't be the last story
we write about it, because it seems like there's maybe
more to the story.

Speaker 6 (01:43:15):
So I'm curious also about so many things in this
like do we know what kind of crypto it was?

Speaker 15 (01:43:22):
Like?

Speaker 1 (01:43:22):
What what you know?

Speaker 6 (01:43:25):
How long was he potentially involved in this?

Speaker 10 (01:43:28):
And then also now there's a new bank in town,
So what's it like to have, you know, a bank
fixture of this community in the form of Heartland tri
State Bank, and then all of a sudden, it's like
crypto scam FDIIC steps in and now we get a new,
you know, not quite as local bank on your doorstep.

Speaker 15 (01:43:45):
Definitely, I think that's a big concern within the industry.
I didn't know this before reporting this, but there's been
a major consolidation of community banks in the US over
the past few decades. And so the role that community
banks play in a town like Elkhart, where you know,
there's a Bank of America there, they're able to step
in and provide credit to farmers or local business owners

(01:44:06):
that they know personally, and they're able to kind of
gauge the economic conditions locally there. They're able to gauge,
you know, whether this person is trustworthy, and if they
believe in the person, they can give them this loan,
they'll pay it back. They're able to use like soft
soft information to kind of develop their lending. And I
talked to a professor, Jeremy Kress at the University of Michigan,

(01:44:28):
who talked about just kind of how there's studies that
show when you lose a community bank, there's less small
business lending, there's less wage growth, there's all these like
knock on effects that happen when a community bank is lost.
So even though this other bank has come in, they
said that they're not laying off any employees, you know,
they basically said it's business as usual. The more that

(01:44:50):
this happens. It seems like there are impacts, and I
think with Elkhart, I would be interested for someone to
come back in in five years and see did anything
change with the new owner? How was this affected the
local economy which.

Speaker 3 (01:45:03):
Is very very act based, Amanda, I'm wondering what Shane
Haynes is up to now. You started talking about what
he was doing before this happened, but what's happened to
him now?

Speaker 15 (01:45:17):
He's very quiet. People around town have seen him, and
I think, you know, they are just as curious as
me about his perspective on things. But we don't We
don't really know his view on what happened.

Speaker 2 (01:45:36):
I mean, do we still not know really what happened?
Is that safe to say we know what.

Speaker 15 (01:45:42):
I've been able to report, Sir, I'm being careful with that, No, no,
I yeah, that's fair. There's still a lot of questions
like that I have about the story, which is why
I was joking about people calling me. But you know,
I'm curious if there was a person who if it
like some of this is the story of what happened,
because I've heard from sources, but truly the only person

(01:46:06):
who can really speak to the full story is Shane himself.
You know, if there was actually another person helping him
do this, I'm curious about that. And so yeah, yeah,
it's something that I'm now that I've been to Elkhart
and talk to all these people, I feel very committed
to like reporting on this, and sorry, parts of the
story are work in progress, but I definitely think in

(01:46:29):
the coming weeks and months, like we'll know more. But
it seems like more of a sad story than anything
because people involved who are shareholders or you know, they
don't seem to think that the shareholders are going.

Speaker 10 (01:46:42):
To get Yeah, like in a small town like this,
it just feels like it's a it's a thing that's
going to probably rock people, and there's gonna be a
lot of interesting nuance that will play out.

Speaker 6 (01:46:52):
And obviously, like there are.

Speaker 10 (01:46:54):
Elements of the story that remain sort of a mystery
and we'll see what some of this ongoing sort of
investigative kind of qualities on Earth is.

Speaker 3 (01:47:04):
Is Amanda going to be finding herself driving on Route
fifty six.

Speaker 10 (01:47:08):
I mean, Amanda, Joel, You've got you know, some some
cornfields to cover there, you know, so you just just
keep driving driving west I guess.

Speaker 3 (01:47:18):
This is Joel's face, Amanda. This is Joel's favorite place
to assigned stories live on air.

Speaker 6 (01:47:22):
Just a HEADSETE.

Speaker 10 (01:47:23):
It's good that you're nearby, right, So yeah, it's to me,
it's just like it is an amazing story. Obviously, bank
failures have been a thing this year, and like here
we are yet again, only for slightly different, different circumstances.
We don't usually see this combination of things together in America.

Speaker 3 (01:47:41):
Well, I think anyway, what stuck out to me so
much about this story, Joel is the fact that this
person was not only in financial services, but it was
the head of a bank. And you don't speak it right,
and then you don't think about people who fall for
things like this as being you know, this quote unquote sophisticated.
But it shows you know, again again we don't know
the d tales of what it is, but that cryptoscams

(01:48:02):
can hit anyone, and in.

Speaker 10 (01:48:03):
A small town like this, where you know, it's a
kind of a fixture of the community. And Amanda also
did some great reporting in the story about how vocal
he was in d C about the importance of having
these small hometown style banks and and you know, in general,
when we start to lose that element, I think there's

(01:48:25):
you just that's part of America, right, like it's it's
a wonderful life, right, Like that's what we do here.

Speaker 2 (01:48:30):
Right, and so important to communities. I was also thinking, Amanda,
you know, Thanksgiving and the holidays are going to be
fun around the Haynes family, right because there were a
lot of family members that were shareholders in that bank,
and that makes it you know, you've got you know,
you know the depositors, right, they're going to be they're
going to be made whole because of the fdi C.
But if you were a shareholder in the bank, that

(01:48:53):
was a different story exactly.

Speaker 15 (01:48:55):
I feel like that's where the tragedy of the story lies.
And also that tension because you know, the shareholders all
know each other, their neighbors, they've known each other for
a long time, and a lot of them, this was
just something I picked up while I was in town,
was a lot of them are ones that are not
named in the FED document. They my reporting indicates that

(01:49:18):
a lot of them might be older women who are retirees,
maybe widowers, And it's just tragic because imagine if you
put your four oh one k or. You know, you
put them in this bank stock and you trusted, you
trusted what you were investing in because you know the
people involved. And I think that's where this story is
just very, very sad and.

Speaker 2 (01:49:39):
Goes back to the importance of what Jill, what you
were talking about this. You know, you have these small
banks and these small ears of the of the country,
and they're really important.

Speaker 10 (01:49:46):
Just if I come to you and I'm like, hey,
I need twelve million dollars for a week, I'll get
you one million.

Speaker 6 (01:49:51):
I'm good for it. Just say no.

Speaker 3 (01:49:53):
Well, if I had twelve million dollars to give you,
no offense, but I wouldn't be hanging out with you.

Speaker 1 (01:49:57):
Guys.

Speaker 2 (01:50:00):
Amazing story. We hope the phone starts ringing off the commando.
All right, Wealth Team reporter for Bloomberg News and Jel Webber.

Speaker 8 (01:50:06):
Thank you.

Speaker 1 (01:50:07):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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afternoons from three to six Eastern on Bloomberg dot Com,
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Bloomberg Businessweek Weekend - September 29th, 2023

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