Bloomberg Businessweek Weekend - April 19th, 2024

Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. This was supposed to be the year that US inflation wrote the last mile down to two percent, letting the federal reserves steadily reduce interest rates from a two decade high. Now those expectations have been dashed this past week.

Fetcher J.

Powell said, persistent inflation means borrowing costs will stay elevated for longer than previously thought. That's a shift in tone with ramifications for policy around the world.

This is the International Monetary Fund held its Spring meetings this past week in DC and inter deep expectations for global economic growth this year, and yet remained cautious amid persistent inflation and of course, geopolitical risk.

With that in mind, we got our own take on the economy through the lens of the trucking industry as well as from the US CEO at DHL Express.

That's straight ahead, as is the bitcoin having on that two voices from the crypto world, the CEO of Core Scientific on the business of bitcoin mining, and the president of Ava Labs on blockchain that could really, really, finally, maybe figures have some really use cases DMV anyone, Oh.

God, that would be sweet. Plus one of the most read stories on the Bloomberg this week, sextortion scams on social media. If you don't know what we're talking about, and you have teens at home, you should.

All of that to come. We begin, though, with something that is a great indicator of economic health, transportation, and this week we caught up with two voices in the space. Our first one came on the heels of earnings from truck giant JB. Hunt, chairs of the company, sank dragging down transports as the trucker's disappointing results and tepid demand sent a warning signal across the sector.

Our own warning and insight on the sector came from Melissa Foreman and president at Triumph Pay, a payment platform that connects brokers, shippers, and carriers. It's a division of TBK Bank and part of the publicly traded Triumph Financial, which has about a one point seven billion dollar market cap.

It is a rough freight marketplace right now, and the recession is real, and it's just you know, when you look at Q one, it was one of the softest ones we've seen, you know, some of the normal seasonality. Feels like it had come back and then dropped away again. So, you know, it's really hard to predict and project what's happening. It just knowing that this recession has been lingering for as long as it has. I think we're in what month twenty four, twenty five of it.

It's just rough on everybody.

When you say recession, are you talking about a trucking recession or economy wide recession?

Yeah, freight recession.

Freight recession.

Okay, what does that mean? Is there just too much competition out there? I mean that was some of the concerns going into the j be Hut numbers.

Yeah.

I think that what is happening right now is you just have a gluttony of capacity in the marketplace. And so with all that capacity, these carriers trying to hold on and survive till twenty five, I think is the mantra it you know, they're just there's too much capacity in order to make the rates competitive and profitable for them to operate. So that's depressing the average invoice price, which makes it rough on everybody in the industry.

Is that just left over from the pandemic? Is that what this is about?

Or what?

It's really hard to tell.

You know, certainly, at the peak of the pandemic, we had, you know, some of the best times in transportation, and then there was this this level in a reset of what is the new norm? And I just I don't think we'd figured out what that is yet.

Okay, So I was just going to ask the same thing that Carol just asked, which is, you know, is it just that we bought everything we needed during the pandemic. We don't need any more couches? Yeah, but it's hard to see that two years out from rails or even to our thronder years or dogs or is it or or has our spending shifted to services?

I think it's a little bit of both.

You know, we all certainly spent a lot of a lot of money on products during the pandemic because services weren't an option, and there was also you know, some misbalances in inventories, and what I think we're hearing in the market more recently is some of the inventory restocking is starting to happen.

So that is a good sign.

But certainly services I think have taken a higher priority, just you know, as people have kind of gotten back out into the world. You were talking about business travel as an example earlier in your segment on how that's up right, So travel, I think across the board seems to be up. I know the planes are full when I'm on them, and so the services and experiences I think are still taking a higher precedent.

Well, so what can you tell us about route differentials in the trucking industry, because I do wonder if there are certain routes where they are getting the rates and certain where they're not. What can you tell us about that.

Yeah, I would say I'm not an expert on specific lanes or commodities, but I do know where carriers have the buying power and the density they're able to still negotiate the longer term contracts, and so you know, that's certainly a place to focus and where you can garner the rates that make sense for you to be profitable.

So I want to talk a little bit cross border, because you guys have some news when it comes to what's going on in Mexico. And what's so interesting is is, Carol, we've talked about this quite a bit over the last few months. The idea interesting exactly. You know, I don't necessarily want to suspect I think we can't. To a

Yeah, I think, as you mentioned, like, we're seeing a lot more manufacturing go back to Mexico. And as you said, it was there back in the times of NAFTA.

I remember that.

Very well and all of the business that was going across the border, and we're there again, and there's so much opportunity to be able to help support transportation specifically

Their carriers in the currencies they prefer.

With the dollar softening a little as compared to pesos, more and more cares have been asking our clients to be paid in Mexican peso and they didn't have the opportunity to do that before. So it was you know, causing some capacity issues for them and curry relationship issues.

So we wanted to break that market.

Carol, you might remember the big take that we did back in September, all about how Mexico has passed China to become the U the largest US trading partner. Happened back in twenty twenty three. Pretty well. Now, well, well, Teresa, is the question most of why, why is this something that you were only able to do just now? You know, if there has been so much going to Mexico, why were you able to do this years ago?

Yeah, It's it's complex.

We've been building out our payments network for the last several years and expanding into multiple currencies. You know, we started with you know, the US dollar, moved into Canadian dollars as our clients asked for that.

Now we're getting asked for Mexican pesos.

But the regulatory and compliance components of what goes into that is pretty complex. And so we started this effort, you know, at the beginning of last year, and it just takes time to get it done and to do it well. And so that's why we're we're launching when we are. It's just the effort that goes into it. We anticipate being able to move and releasing European and Asian payments towards the later part of this year as well.

How much has this business picked up since you guys have started.

You know, we are not executing payments yet, okay, So we expect to have the ability to support that for our customers by the end of Q two, so the end of this quarter, and then work with them and their integrations with their TMSs and accounting systems to turn it live. So we haven't, but when we're talking to our clients, what we're hearing from them is about on average, five percent of their business is now being done in Mexico and they're having to turn business away because they

More deeply, are these truckers, these drivers making the same kind of money that other drivers are making.

I don't have an answer to that.

I'm just curious. I'm curious if you yeah, sorry, I'm not. We love picking your brain because you do know so much about this industry, So forgive me.

I've thought about the average Well, what's.

The platform goes up like you're probably going to have a lot more information, but it is fascinating because I am curious about the level of activity and the dynamics of that market in particular, so really interesting stuff. Promise you'll come back once the platforms up and running and we can kind of dig a little bit more into what you guys are seeing. Always appreciate it. Such a

Also, I just want to say shout out to Melissa Foreman's tech team or whoever set up this shot. You know, Melissa herself. She's got a microphone on. It looks like she's in a studio. It's like perfectly lit. I mean, I you know, it's like we take like three or four people to the shot.

Everybody who comes on our air. Yeah, please FTA wondering Melissa Foreman be Well TALKSI and President of Triumphey in Dallas.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and then brout Auto with a Bloomberg Business act or watch us live on YouTube.

Well, we love talking shipping and logistics. After all, understanding who's shipping where and how much they're shipping is key to understanding trade and the global economy. Next guest has a great read into that. Greg Hewitt is a CEO at DHL Express US. It's a segment of Deutsche Post DHL Group, one of the biggest private employers in the world. I've got more than a five hundred and fifty thousand employees, revenues more than eighty seven billion dollars just last year.

So great to have you here. We do, Tim and I love talking to anybody and everybody who's involved in transportation because it does feel like you guys do have some great insight into what's going on in the economy. Welcome, Welcome, Nice to have you here.

Thank you so much for the invite, My pleasure to be here.

So tell us a.

Little bit about the environment, what you're seeing and the level of activity and how it compares from the last six months from twelve months. I mean, I'm not quite sure with the pandemic still if we're still thinking about pre pandemic levels. But what do you see I.

Think I've seen To start the year, we felt it was going to maybe be a little bit stronger, a little bit more growth. We're coming off of post pandemic, a bit of a downturn. What we saw was e commerce was kind of fueling any growth that traditional segments automotive, engineering and manufacturing, high tech. We're still a little bit lower, maybe having last year a little bit too much inventory,

Okay, you mentioned Aaron Ocean, so I wanted to start with ocean. Are you seeing any increase or is DHL seeing any increase in demand from the ships that are avoiding the Suez canal. How's that playing out for you?

I think a little less than I thought, quite honestly. My segment. Usually when there are pinch points in any one of the sectors, like the ocean transport, maybe people move things over to a fixed network ours and express. I haven't really seen that lift yet. I think companies

Great.

What's the most challenging part of your business right now? I means certainly something we talk about as higher energy prices, right and we've pulled back a little bit off of kind of the activity over the weekend in the Middle East. But I am curious if that's starting to bite into some of your costs or raise that cost equation.

From my perspective, still, my biggest challenge is dealing with the inflationary pressures that go with rising wage rates here in the US and the need to compensate my team to who are skilled workers to keep the front lines happy. That's probably still my biggest versus anything globally that's putting pressure on.

That's interesting to hear. Where is that pinch point? The biggest is that with people in warehouses, people actually doing the driving, doing the deliveries, and you're talking, you're not talking back office folks.

Now, it would be more frontline of finding the skilled labor for couriers and termost journal handling stuff.

I mean, who's your competition there is it is Amazon around the country that's just driving up wages.

I don't know if I would say that it's anybody that's driving it up. I think in general you've heard coming through the pandemic, every wage is whether it was at a dunkin donuts to well a caurreer, everything goes up.

We talk about California's minimum wage all the time, up to twenty dollars an hour at this time, and we have to.

Respond to that and make sure that anywhere where we're employing people, not only are we at the minimum wage, but generally because it's skilled labor, we've got to be a bit above that.

Well, one thing, you know, and this is something we talk about when we focus a lot on inflation generally

I think from my standpoint, what I'm not seeing is wages don't go down once they go up, they tend to hold and grow from that. What we've seen is lower levels of turnover. So we've got stability in the workforce that have gone with the higher wages. So I think that's a good thing. Now we've got to drive productivity in order to make sure that we've got this share holder return.

So Carol, this was Carol's idea. She's like, we got to talk drones here, and I'm thinking to myself, Okay.

Well, is make it more productive.

I'm thinking to myself, Okay, well, if the folks on the front lines are the ones who are driving up wages, I'm wondering how dhl's experimenting with drones drone delivery, and if that is actually something that's realistic in terms of supplanting or replacing at any point certain men's who are doing the delivering.

From my perspective, it hasn't. It's not going to supplant humans doing the delivering. In fact, we've used I don't see it. I think the reality is there there are challenges around having autonomous vehicles in the air and airspace. We have used it in some remote locations to deliver medicine and such. I think we're still going to need people delivering packages, but with the advantage of automation in terms of software that helps with rooting, helps make sure

I got to say, and forgive me, I'm going to talk about, you know, the competition, but ups one of the things after spending this is a few years back, but spending a day with a delivery man, I mean they that's exactly. It's all technology and this whole idea of a kidd in with these You know, with our team, you don't make left turn to make right turns because you don't want a truck or driver spending seconds minutes at an intersection. So things like this do add up.

They absolutely do. And so our biggest investments in technology in the last few years would be around routing software and station optimization, and now with international optimization would be what's the optimal amount of courier, roots and personnel that you'd have in a station based on big data, the

Well, can I ask you what happens there?

Is?

It just takes long.

If you had to do if you have to clear something formally, you've got an entry writer who has to go through the harmonized tax codes making sure all of the information is available for customs to clear it effectively and for the duties and taxes to be assigned. It can be a bit of a manual process. So doing things with automation that makes it more accurate, more efficient, more effective as part of our customs clearance experience.

How's air capacity? Looking at the company right now? Do you have to much air capacity?

I wouldn't say we have too much. I think we probably adjusted coming out of COVID, where we had a lot of charters and extra capacity that balanced out our fixed network. The jets that we've bought, we've now right sized those. We try to run eighty to ninety percent capacity utilization and then scale accordingly, and we're running a good levels.

Well to what extent are you leaning more on third party capacity providers right now?

I think if I would have said before the pandemic we were very balanced between our own network and leveraging commercial lift. Through the pandemic, we leaned much heavier on our own network. Now we're probably balancing it out. Before we add maybe another jet into our own fleet, we will look at commercial to balance it out.

So when we started GREG, it sounded like there was hope that things get a little bit better this year. To any of your clients talking about slow down recession.

Not really in fact, I would say, compared to this time last year, where there was a lot of uneasiness where inventory levels were high, there was a lot of uncertainty this year. When I talk to them, they are optimistic. What I haven't seen is the orders flow through and the moves go through yet. But people are feeling same.

But show me the order we.

Want to see them. But it gives me optimism that for peak season we'll see a return to more of the norm we're usually in third and fourth quarter. There's a rise in goods moving that we haven't seen in the last couple of years.

To the same extent, why do vote, Why would a customer go with DHL instead of going with FedEx or UPS.

Well, for me, our DNA and ARE what we were born out of in nineteen sixty nine is international and our specialty is around the movement of goods internationally. So if you're a small business or a business bringing goods in from around the world, nobody can clear it and deliver it like we do. If you're a business that looks to market your goods globally, nobody knows those countries and consumers better than us.

Greg twenty seconds left here because you do see kind of the trade if you will, going between the US and globally. Any pushback that you see in terms of the globalization idea that we keep hearing in narratives quickly.

Yeah, we definitely have heard concern a little more protectionist policy in a number of places.

See it though in the day I.

Haven't seen in the day to day. What I have seen is probably the US China relationship. Definitely China plus one, new markets in Asia and Mexico growing because of that.

Yeah, we hear that a lot.

We love talking shipping and logistics.

Told you we really like it. Greg here at, chief executive officer US of DHL Express here in studio, Greg, thank you.

This is Bloomberg.

You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern applecar Play and ANDROYD Auto with the Bloomberg Business Ad. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

Well, this is one of those stories that is unfortunately part of our new reality thanks to social media and an area that our Olivia Carvell continues to explore, inform and report on this story Today's Bloomberg Big Take. It is also the cover story the upcoming new issue of Bloomberg BusinessWeek. It is about scammers and scams which the FBI calls sextortion, and it has become one of the fastest growing crimes targeting children in the United States.

For more on what exactly is happening, I do want to bring in Bloomberg BusinessWeek investigative reporter Olivia Carville. She's here in our Bloomberg Interactive Brokers studio. As Carol just mentioned, it's the cover of the new issue of Bloomberg Business Week. It's out this week. It's already online at Bloomberg dot com and always on the Bloomberg terminal. Olivia, the story again, the cover story, It centers around a term that I'd actually never heard of, sextortion. What is it?

When I first started reporting this story, I'd never heard of sextortion before either. Essentially, it is a hybrid of sexual extortion. So we're mainly children, unfortunately, are targeted online and sixtorted or sexually extorted through naked photos, blackmail to send money or in some cases send more naked photos to scammers, perpetrators, predators online and the FBI has been tracking this crime for a long time, but in recent years it's changed completely. In the past two years, sextortion

I have to say, I think there's somebody who might be listening to Like, of course, when you see this, you say no and you just put your phones down. I'm going to ask you to tell the tale of during DeMay, Sure, Jordan out of Towe. It's a really sad story and a tragic one.

Yeah. Jordan de May was a pretty typical teenage boy. He lived in Marquette, a city in Upper Peninsula in Michigan. He was a football star, a basketball star, really good looking, really popular, had a girlfriend, lived with both his mum and his dad. Was one of the most popular kids in school. Teachers loved him, football coaches loved him, his

This happens a lot.

Now. You know, she may have been a stranger, but on her Instagram profile he could see all of her photos, he could see all of her friends, and they actually shared mutual friends. And I think teenagers today have this safety net. They feel like social media is a safe place and that you know, looking at an Instagram profile, you know who you're talking to. But sadly that is not the case. And the story tells us why. So Jordan was contacted by this young woman. They started a conversation.

And he took his own life because of the concern over what would happen if these pictures got out. That was the blackmail. He indeed sent money, they wanted more money, and what happened.

Yeah, I think.

I think ultimately he took his own life because of the pressure these blackmailers placed upon him. Initially, the agreed upon amount was three hundred dollars. He paid that, he sent it to them, and then they came back asking for more. They wanted eight hundred dollars, and at one point in the message exchange, he sends them a screenshot of his bank account and it had fifty five dollars

And it turns out, as you're reporting, shows Jordan's story absolutely tragic. The repercussions of that still playing out. But he's not the only one.

He is not the only one. The FBI have been aware of more than twelve thousand, six hundred victims of this crime across North America. We know more than two dozen teenage boys have taken their own lives after falling prey to the specific scam.

The financial motivation, and then kind of the evilness, if you will, of these individuals. How are they getting caught? Because they are getting caught, correct.

I mean, in the few cases where they have been caught, law enforcement have been able to track their identity through their IP addresses, so that's where they've been able to file preservation request records to Meta or other social media platforms to try and find out who is really behind

It's just amazing, like going back a second, within six or seven hours, all of this happened, and it's playing out over and over again, which doesn't leave necessarily a lot of time for law enforcement unless somebody reaches out or a student feels comfortable enough to reach out to a parent. But you think about we all know teenage teenagers in general, teenage boys like they're not likely to reach out. Has any of them in the process stuck in it have reached out to an adult or law enforcement?

Yeah, Carol, I think that this crime is so much bigger than we actually imagine it to be. Those twelve thousand cases are largely underreported. I don't know how many people have been affected, but the FBI says this is touching every neighborhood across the country. Some parents who have had their children die and have spoken publicly in the past,

There's a really poignant moment in your piece where he talks about leaving his cell phone on at night so he can answer those calls. And I believe Olivia. He said he's gotten hundreds of them.

Yeah, he's received over two hundred phone calls.

So I want to say Jordan's story continues because the companies, and we'll talk more about the tech companies a little bit later in our program, but the tech companies play a big part in your piece here. Talk to us about what happened. Meta Platforms, a parent company of Facebook and Instagram, actually has this portal where law ENFORCEMDIA agencies and agents can go and make records requests. What happened when a police officer, just hours after finding out about Jordan.

Went to do that.

So usually when you file a preservation request through the platforms through this law enforcement portal, you have to provide a court order signed by a judge. Essentially, it's like a digital search warrant. The detective in this case wanted to file that preservation request as an emergency order to say, let me sidestep the court order that's going to take

I want to talk a little bit about the tech platforms here. Instagram is owned by Facebook parent Meta platforms. You mentioned Snap earlier. Snapchat owned by Snap Inc. Talk to us a little bit about the platforms this is happening on in the role that the tech companies play.

So the platforms first became aware of sextortion as an issue in mid twenty twenty two and since then they have taken a lot of action to try and address this issue. Meta, for example, sends sextortion focused safety notices directly to young users of the platform. They also use AI to try and detect suspicious accounts. Say, for example, a predator hacks into the Instagram account of someone based in the US and they'reover in Lagos, Nigeria. The shift of that IP address could send out a red flag.

And I think.

That that's because these bad actors are savvy. They know how to get around any kind of guardrails. The platform was put up because social media is so ubiquitous in children's lives. Now everyone is on it. They want to promote this beautiful life they all live. They want to show that they're friends with hundreds, if not thousands of other people. So they get a friend request from a stranger and they accept it.

That's amazing, But I do think we've become desensitized, you know. Whoever thought and Okay, I'm taking off in a little bit of a direction, but you would get into a stranger's car pretty regularly. And I think about uber like, we've just kind of accepted this idea of strangers, but they feel kind of familiar and we're okay because the company says they're okay. Basically, tell us about the two bad actors in this story who are ultimately responsible.

Well, it's kind of a network of bad actors over in Nigeria along the Ivory Coast and other countries in Africa where they are creating scripts of how to blackmail kids and sharing them on other platforms like TikTok and YouTube. This is an industry wide issue. It's not just one social media platform facing this problem. It's right across a number of them. So this group of Konmian they're called the Yahoo Boys, so they may sound familiar anyone who

Carol mentioned the two individuals in Nigeria who ultimately were extra dated to the United States. Talk to us about what their fate will be, what their fate is, and how the FBI was able to track them down.

Yeah, and that's what makes this case so unique, is the first case where the FBI has managed to track the perpetrators to their home country of Nigeria and extradite them back to the US to face charges for the wrongful death of Jordan de May. These two individuals, Sam Samuel and Sampson Agoshi. They are brothers. They're from a small town twenty two and twenty and one of them was studying at a university, the other was training to be a shoe cobbler. They grew up attending church, playing

I do wonder about social media, like the organizations these networks that are actually laying out kind of the playbook, what oversight are they doing and kind of pulling that in and reading that in as well.

Well.

When they first became aware of the crime, they started tracking it and there was a report, a research report that was published in January of this year where a researcher was able to find these scripts across TikTok and YouTube, hundreds of them where the Yahoo boys were sharing how two's as in how to blackmail American teens, including how to sound like a teenage girl, how to turn a conversation flirtatious, how to get that nude picture, and then how to blackmail.

So what's the responsibility of social media or that are they pulling them or are they scraping them off?

Or what I mean, they're trying to like, they're doing all they can to take down those reports. Every post that was raised and that research report has been removed from social media. But I've been able to find more. You know, the scammers just changed the hashtags A Yeah, how do you keep this content off? It's a tidal wave and you've got a bucket?

Yeah, Olivia.

I mentioned it's one of the most read stories on the Bloomberg terminal. It's the cover of BusinessWeek, it's the big take. I imagine you've been hearing from people about the story. Can you share with us some responses.

Yeah, I've heard from a lot of readers, people who work in schools. I heard from a lacrosse coach saying that he wanted to share this with all his players. I also heard from a CEO today who said that he read this story while going home last night on the train and that he couldn't stop reading it, and when he got home, he went straight to his son's bedroom. His son is fifteen. He set him down and said, I need you to read this story, and I need

Would Yeah, I mean right exactly, because as we talked about earlier, maybe we were talking off camera and off air, just this whole idea. When you're a teenager, this does feel like it's the you know, if this was shown, it's kind of the end of your life as you know it, and you don't know how to get out of it. And so talking about it, parents talking about it, teachers talking about it, you hope you can get ahead of it a little bit.

Yeah.

One detail that you shared in your reporting was an image like a mockup of a newspaper having been sent back to somebody.

Yeah.

In one case, the scammers actually posted the nude photo beneath the headline that seed like the individual's name was caught sending nude photos on the Internet. They threatened that these victims are going to be arrested by police for sharing child pornography.

Well, and the scary part too, is they just knew so much about their network. Those individuals those teenage boys write their networks and were able to really kind of tap into it and scare them. A terrifying story, but an really important story. Bloomberg Business Week investigative report Olivia Carvell. Another incredible story from her, an important one. As we said, it's in the upcoming new issue Bloomberg BusinessWeek. It is on the Bloomberg and of course at Bloomberg dot com.

You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Applecarplay and then brought auto with a Bloomberg Business app, or watch us Live on YouTube.

You may remember back in January, the SEC approved the launch of bitcoin spot ETFs to trade on the US market, causing the price in cryptocurrencies to surge, with the biggest one of them all, Bitcoin hitting an all time high of more than seventy three thousand dollars last month.

That was a major milestone for bitcoin enthusiasts, and the next one, the ones every four year software update called the Having the.

Having Well great news for bitcoin investors, perhaps not so great news for bitcoin minors, because having means the amount miners earned for validating transactions to create blocks and in the process create bitcoins will be cut in half.

For more on how this will affect bitcoin miners, Carol and Bloomberg Global Finance correspond at Shanali Bassic checked in with Adam Sullivan, president and CEO of the small cap, publicly held crypto mining firm Core Scientific, which emerged from bankruptcy earlier this year thanks largely to that turnaround in bitcoin prices. We began by getting his thoughts on the.

Having Every two weeks bitcoin resets how difficult it is to mine a bitcoin, and so the difficulty has been increasing steadily over the course of the past five six years actually for the entirety of bitcoin's existence, but it's been increasing more rapidly in twenty twenty four given the price runop.

I want to go back to having, though, can I just want to understand and make sure our audience does so. It happens every four years, So it means the amount you and other miners have right at this point, basically your validating blocks are cut in half. So how does that Doesn't that impact the top line, the revenue line.

Absolutely, it definitely does. But people on the network feature.

Value of as bitcoin goes up, that's also a factor. That's a big factor.

Yeah.

But once we get to the having part of the network will's shut off because they become unprofitable to mine at those levels, and so we get an increasing share of the overall network post habit.

When you say part of the network shuts off, do you mean that company's rivals of yours will face increased financial pressure.

Absolutely. In twenty twenty two, we saw the down bitcoin price, you know, going too kind of a bear cycle. We saw energy prices go higher, and so what you saw was a number of challenge companies, sell facilities, sell minors, and you'll see that again if they haven't.

Adam, I mean, you're kind of a great person to talk to given that corener scientific face bankruptcy ones, Why is this time.

Different for you?

Guys?

How did you emerge from bankruptcy and make it into this cycle?

Yeah, I mean it was so it was a thirteen month process, and when we came out, we came out of much stronger company, so we had a much more interesting capital structure. We lowered debt by almost forty percent, and they gave us optionality in the capital.

Structure million dollars in debt that you guys trimmed.

Yeah, we trimmed about four hundred million. Yeah, And so the rest of our capital structure has optionality in it, meaning there's mandatory converts in it, there's cash exercise warrants, and so if we perform well, it creates a situation where we'll be debt free.

So what are some of the lessons learned from the first ball run we saw in crypto going into now the new ball run going into crypto into the having Yeah, it's.

A bitcoin mining is very much a commodity company, right, So it's you have energy inputs on one side and you have bitcoin outputs on the other side, and you have to be able to hedge input costs and hedge

So your balance sheet is very different so that you can't get into that situation again, like, go play it out for us a little bit more, because you are a great case study. I think if I'm an MBAs do and I want to study your company and understand what happened and then how you came out and how you're doing something different because I could certainly see similar scenarios and troubles. Playing three tends to repeat itself.

It does, it does. But you know the interesting part is our counter parties, our debt holders, understand that. And so they built two things into the capital structure, time and optionality. So the time is they bought us essentially three to four years before there's any larger maturity walls on our jay I didn't have last time, which we had a lot of short term advertising down in a balance sheet before, okay, And they also built us in optionality where if we trade above certain levels, we were

Now, let's walk through some of the impacts of the having How much do you think it will impact revenue at.

The end of the day.

Yeah, it's a great, great question because if you look back the estmates in twenty twenty, no one was right, and so when you look at twenty twenty four and you look at the estimates, we have a feeling that anywhere between ten to fifteen percent of the night work will come offline. So that means our revenues will be

That's a big number.

Is that manageable even with the covenants or whatever that you said that you guys are doing it differently in terms of how you're managing your balance sheet. That's a big hit. How do you manage that?

Yeah, you manage it through really three different areas, but one of the main ones is on the energy side. So you need to have flexibility and the ability to curtail more often on the grid because you get paid to curtail or in some cases in regulated markets, it actually brings down your power costs. And so for us, as we look at the revenue cut, it actually provides

So you can automatically get those power benefits we can.

Yeah, they're right there. Yeah, okay, So what about others here?

I mean, I'm kind of curious about how you think the industry is changing.

Are you going to say dogecoin? Are you going to go there?

Well, how do you react?

Right?

How do you re I'm actually going to go to another buzz with AI and do you sit there as a bitcoin mining firm and say we're going to diversify into other areas as well where certain hardware.

Could be applicable.

We've heard people talking about things like that, do you buy some of your rivals at this point? How do you diversify or maybe double down on this industry?

Yeah, So we actually signed a contractor was announced a few weeks ago with core Weave, you a very large HPC company that's really the first for a our company has traditional data center roots, and so we're looking at converting about three hundred megawatts of our seven hundred and twenty four megalats today into actually HPC compute facilities, and so absolutely we're taking a look at what it means in twenty twenty eight to be competitive and trying to

I'm HPC high performance computing. Yes, okay, So to make sure I understand it, I didn't know that.

Oh thank you Google, thank you.

But you know, when you're thinking about twenty twenty eight and you think about this having cycle, even if having cycles of the past had caused a run up in bitcoin or at least preceded one, how can you be sure that that will be the case for the future. As somebody who's running a business, do, you almost have to protect yourself from maybe that not being the case every time.

This business is about protecting your downside risk and preparing for downside volatility, because if you can have time and market in bitcoin mining, you can actually experiencing you can actually experience the bull runs, which if you can't experience the bull runs, then you know, bitcoin mining is is generally just you know, for most of the time, bitcoin is you know, about a thirty to forty percent margin business. But during bull runs, you know, the margin profile expands rapidly.

So are you set up okay? So we're just below seventy thre thousand dollars on bitcoin? Are you okay with bitcoin at sixty five thousand?

Absolutely?

Sixty thousand, absolutely, fifty five thousand.

Absolutely, we emerge at we emerge at less than half of it at seventy thousand.

But there's some kind of significant haircut.

You're fine, absolutely, So when you're.

Rolling back to the capital markets, right, I think one thing that fast fascinates me is that a lot of these big bitcoin companies and sort just about a minute to answer here, but these big companies are levering up again. Does that come with a warning sign?

It does a little bit absolutely. I mean this industry is you know, Bitcoin, especially the price has been driven by leverage in the past. You know, we're seeing a little bit different bitcoin price run up today, driven by ETFs, and I think that's actually a positive sign for our industry.

Micro strategy, what you said, micro strategy just brought a ton of money to be buying bitcoin, So leverage looks a little different in the system these days.

I guess and I hadn't past well. As you can see, we get pretty excited. I know, you get rid of we're talking about this topic. Adam, come back soon. Interesting especially it's a different year or new year for you guys, so it'd be interesting to maybe catch up with you real soon. Absolutely really appreciate it, Adam Sullivan, President and CEO. As we said, small cap publicly alt crypto mining firm Core Scientific. You can find it certainly ticker as CORZ.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Apple car Play and then brout Auto with a Bloomberg Business act or watch us live on YouTube.

Last month reported on how billionaire Steve Cohen's point seventy two Ventures. It's part of a group of investors who are betting that blockchain tech can be used in the US to simplify vehicle registration. So point seven to two Ventures led a funding round for a company called champ Titles Carol. It's a startup that's working with several state governments to replace existing vehicle title registration and lean systems with a digital system featuring blockchain technology.

Kh sign me up for someone whose to go get a new title or get it to replace a thank you do really copy of a title for our cart?

Yeah?

Yeah, I have to.

I have to find my marriage certificate. Really yeah, I don't know how gonna do that.

It's good luck, good luck blockchain. It could come in handy.

It's the whole in your marriage certificates.

I'll say that for advocates of the technology, car registration just one of many uses. But we think about this a lot. This is blockchain. I kind of understand. John wu is one of those advocates. He's president of Ava Labs. He's the developer of blockchain project Avalanche, and he argues that we'll soon see quick adoption of blockchain technology. He joins us from New York. John, good to have you on with us again. So how are we thinking about blockchain?

Well, it probably is about a decade, but probably a little bit less because the programmability on using a smart contract on a blockchain really started with ethereum, so you know, bigcoin is not as programmable, is really more of a store value and Etheroerem has only been around for less than call.

It ten years, so that's when it's really started happening.

But utility is hard to understand because there's a lot of B to B stuff and even what you just mentioned with the DMVs having cars register on the blockchain, that's the use case that makes perfect sense. That's the blockchain aspect of it. And I think the states that is leading the way on that is State of California and their DMV. They are really I think they already said they want to put all the title of cars in California on a blockchain within a very near term in the future.

Hey, so how is that different, John, explain to someone listening right now who is saying, wait a second, how is that different from just, you know, having a database in the cloud of every vehicle registration, Like, how is it different when it's on the blockchain.

So this database is shared by everyone, it's immutable and everyone can see what's happening. So first of all, the for the reason to use it is it will save cost because you don't have to replicate databases for every point of access for every person needing their own version of the ledger. If you will, so it will save you the system money. If you will, it'll make the workflow far more automated and save access operating expenses in

Well, how would it work? So help us understand. So, like if I needed to get a copy or I wouldn't have to get a copy of my license is what you saying? Or my car title because it would just be on the blockchain. But how would I access this and who would be overseeing that blockchain?

That's a good question. So that's the user's side, the user interface side. I mean, you can also replicate this with your house titles, the same concept right now, when you buy a house, you need to change ownership there you go to town hall, and at town hall they it's actually paper based. If I take most places and they literally show you paperwork of who owns and then

Okay, I would imagine there are some more exciting uses for blockchain than DMV. But Carol wants to keep talking about it. Go ahead, I just want more questions. So very exciting.

If you save your time of going into all this stuff, I mean.

Would it say what?

Did it saved me time? Would it save me money?

Though?

If I still had to verify something, would I still have to go to the municipality's blockchain or talk to somebody and they would have to say, oh, yeah, like it's here, like it would I have that easy access or.

No, Well, presumably it will definitely it will save the municipality money to put it this way, put it on the blockchain over time, And whether they want to provide access to everyone. I think in this case it's a hybrid solution where they still control some point of access, but if they conceptually wanted to open it up and expose the blockchain, everyone can concede it.

So they could still charge me.

Basically, Yeah, they got to get revenue from you. They got to pay, you know, for seeing employees the equation. Yeah, like like we talked about earlier the past, maybe the savings aren't being passed along to the customer.

Maybe not.

Okay, John, I want to talk a little bit about some other use cases here, because you argue that we could see lots of uses when it comes to gaming, consumer loyalty, and on chain finance. I want to start with on chain finance here. Explain to us where you can, because this is not just something that you're talking about here. I mean we got black Rocks Larry Fink talking about this as well tokenization, So so talk to me about what's exciting to you when it comes to finance and the blockchain.

So the number one use case right now happening in the financial world is tokenizing of what I call real world assets, and that's either tokenizing money market funds, the US dollar, or actually a private equity fund. So I think the one area that people will absolutely agree that there's some product market fit, if not.

Already has product market fit, is the stable coin.

So even paypals trying to create stable coins, there there's a lot of happening in different industries, and that's in fact, I think Brevin Howard did this analysis where last year there were more stable coins settled on blockchain or as much as the visa network. So basically, when you can

So it's seamless to you.

But in the back end, really what happens is it's subsidized by PayPal. Only ninety nine point call it nine gets moved and they put the extra ten cents in there for you because they have to go outside the system, integrate different tech stacks, move things around, go to a third party, and it just costs money to and the friction there costs money.

Yeah, I would assume that whole industry, right, we know they're looking and watching because you just think about how much I've got a daughter overseas and just the movement of moneys in the.

Mechanicy so hard to do.

Bank here and opening a bank there because it makes more sense, Like it's just crazy. And she's become real savvy about who's charging fees and stuff, and we try to figure it out.

You just got to do it in Switzerland, Carroll.

You we're on Bloomberg right now.

Well, I mean, if you remember, like five, six, seven years ago, people who did remittance was using bitcoin because it was it was save them fifteen percent instead of going to Western Union or one of these places.

Right.

The only problem we'll bick on with just two moltles. So now the stable coin construct is a better one for moving money back and forth overseas well, John.

Wo, I'm looking for I can't wait till I don't have to go to DMV anymore. Sorry, DMV. There's got to be a better way, and I understand how maybe blockchain can make it simpler and make more sense. John Wu, thank you so much of a great weekend.

John Wu also big on Twitter. I don't know if you saw he tweeted it. You know when he tweets put mentions you on Twitter, you can get a lot of us.

John, Can you mention this a lot more?

We would really.

Appreciate it, absolutely, John, Good to see you.

You well.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday. He's starting at two pm Eastern. Don't Apple car play and androyd Auto with the Bloomberg Business and you can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

In our second hour of the weekend edition of Bloomberg Business Week. Well, this Monday is Earth Day, and so in honor of our beloved mother Earth, we are exploring some of the stories, challenges, and impact of climate change in the next sixty.

Minutes, including a stark reminder of where we are told through one reporter who's been on the front lines of climate change at small Town America, Jonathan Wigliotti on his new book Before It's Gone.

Plus the US power grid old, outdated and stressed, and yet getting a big financial boost from the US government to help turn it around. A view from the US Department of Energy.

And Regenerative Agriculture. A new documentary, Common Ground, takes a deep dive into the agricultural history of the US and why we should turn the clock back on how we grow food.

First up this hour, though, let's talk about the US power grid. How to describe it old?

I think that's fair to say problematic for a lot of people and a lot of states.

Yes, yeah, really difficult, right, and in need, tim, I would say, of a massive, massive overhaul.

Check, check and check.

Well.

Last fall, the Department of Energy announced up to three point five billion dollars in funding to upgrade the US grid. This topic was among the many at this week's Bloomberg Enny f Annual Energy and Climate Summit in New York City. Maria Robinson participated in a panel at the event. She's the Director of Grid Deployment at the US Department of Energy, and she joined us for a reality check.

So we're facing a lot of different problems here on the grid today, right. You are talking about we have new demand. It's great that we're bringing manufacturing back to the United States, but that's a strain on the electric grid. The electric grid is aging. It's not just older than me, it's older than my grandparents. So then we're looking at ways that we need to upgrade our existing infrastructure while

The joke that I make is so we cannot do upgrades. It's not like a massive rebuild, right, we have to do both.

We are definitely going to have to continue to build in order to meet all the demands. But we can take advantage of those existing rights of way, right, we don't have to deal with as much permitting, which we all know is a really difficult topic to deal with. But you know, oftentimes folks are taking our existing lines and replacing the metal part that's inside of it. It's called a conductor, and oftentimes they're just replacing that like for like, instead of upgrading it to a newer technology

There's a story in the Bloomberg. It's probably connection with this, but it's a central transmission line is getting a twenty first century upgrade, and it's about a startup that's created a wire that's lighter and can carry up to three times more electricity. I mean, we talk about this with battery usage, right for evs, about just about making things, even chips, right, accelerators, making them more productive, making them more energy efficient, Like this is what it's about out exactly.

And so all these great technologies are already out there. They're really proven in the field. We just need the market to pick them up.

Is it more of a state issue right now? I mean, I think if states that have struggled with their grids, Texas and California certainly come to mind. Is it a federal issue or is it a utility issue?

It's all three all the apl The fun part about the electric grid is that it doesn't follow political lines.

Right.

We have an eastern interconnect a western interconnect, and they don't follow necessarily. They're like time zones, right, they just sometimes split a state down the middle. So we have to figure out how we mix some federal policy with individual state policy. Some states are really looking to decarbonize, and the way they want to build their grid might

There's nothing like a federal incentive or a tax break or something to get us to do something, whether you're a company where you're an individual. So what are the incentives that you guys or that utilities need to actually adopt better technologies and some of the technologies that you guys are talking about.

So there are certainly some ways from the regulatory structure that utility commissioners at the state level or at the federal level could incentivize the use of some of these different technology today.

Do we need to really make it happen?

I think we need to make a bit of a push here, just because we have so much to deal with over the next three to five years, and that's when we can deploy some of these technologies while we're still building out major transmission lines that you know, take ten to twelve years.

Is this a national security issue?

It certainly is a national security issue, and this is something that we continue to face every day. Our grade is one of our greatest assets that we have in our country and making sure that we can withstand cybersecurity attacks, physical attacks, and just frankly weather. One of the biggest issues is wildfires and making sure that we can prevent those from happening moving forward.

Yeah, we were talking about this another story that's on the Bloomberg today that's about that. You know, how investors have looked at at the debt at utilities is kind of a sure thing in the past right in terms of investing, but because of what's happening with climate change, that is not necessarily the case. That there's a lot more questions that are out there in terms of the unpredictability and the costs that are mount to get some of the nation's utilities.

And I think part of this is intent trying to incentivize utilities, and they're really coming around to realize this. You're not going to if a pole gets knocked down from one hundred and fifty mile an hour WINS, you're not going to replace it with another pole like was there before that could get knocked down. You want something that can with stand two hundred and fifty mile an

What can I just ask you, so, what is that regulatory structure?

So there are these very fun organizations called utility commissions public utility commissions. They're the people who decide how much you pay on your electricity bill and on your gas bill, and those are the folks that hold utilities accountable and also figure out how those costs are being allocated to regular folks like us and to major industry as well.

How much are we talking here? If you could waive a magic wand and get enough funding to completely upgrade the grid in the US, how much would it be?

So we are really lucky under the bipartisan Infrastructure Law, the Inflation Reduction Act rate my office has about twenty two billion dollars to upgrade the grid. We talked about three and a half a bit going out last year. To be honest, that's a drop in the bucket. Every year, utility spend about twenty three billion dollars just to maintain their existing assets in order to continue to upgrade. What we do find though, is that some of those costs

Much as west so is twenty plus billion dollars enough.

Twenty plus billion I think per year. But you know, we're blessed with having Inflation Reduction Act money and by Parson infrastructure law, of course, that expires after a period.

Is there a chance that we're all going to end up paying as users consumers that to in other words, to help pay for this, that we are going to pay higher utility costs.

I think if folks are smart, and we do good planning, and we think years out and make sure that we're being preventive about it, that we're not going to bear the costs. I think about how much a cost for recovery after a major storm at the lights go out, how many billions of dollars of revenue.

Is and here we are, So what hope do you have that it kind of changes?

I do have a lot of hope.

I think that folks are really come This issue is coming to a head for the first time, at least in my career. Folks are really realizing that our grid needs a lot of investment. Everyone focuses on the generation side. They're excited about new plants and new gas and new solar and new wind.

I hate to end on this, but what's like one scenario that keeps you up at night?

Oh, there are a lot of scenarios that keep me up at night. Hurricane season keeps me up at night, hurricane seams and then absolutely keeps me U up at night. And so we just want to make sure that we can invest in our grid as much as possible to make sure that instead of the light's going out for five hours, they only go out for five minutes.

Well, Maria Robinson, thank you so much. Reality check there, director of the Grid Deployment Office at the US Department of Energy.

You're listening to the Bloomberg Business Week podcast. Catch US Live weekday afternoons from two to five pm. Easter Listen on Applecarplay and then brought auto with a Bloomberg Business app or watch US Live on YouTube.

Well, empowering and updating the US power grid is definitely one big concern. So too is recycling. The Environmental Protection Agency estimates that the US has a combined recycling rate of only thirty two percent from materials including glass, plastic, cardboard, and paper. That figure reflects collections from industrial, commercial, and residential trash.

On top of that, Carrol microplastic and pifos showing up seemingly everywhere now, and we knew that we wanted a reality check and what's working and what's not working? Tony Parata focuses on the sustainability and regenerative economy at PA Consulting and began with how we can do better when it comes to recycling.

First, technology better mechanical recycling practices leveraged by AI and robotics. Second, new recycling methods are coming on the scene, things like chemical recycling that go beyond just mechanical recycling. And finally, what we're most excited about is a move away from plastics altogether into alternative materials. As low as those recycling grades are, it does represent opportunity both for enhanced collection, but also a new world and a new horizon of new materials.

Well, Tony, you know, it's interesting too. And I always feel like when there's money to be made, people kind of can go and do the right thing. Or you know, tax policy can also make us do the right thing. What is it, though, that moves the needle the most, you know, in terms of sustainability initiatives, at least in your world, What you've seen that really kind of moves people, company industries to do the right thing.

In the world of materials like plastics and aluminum and glass, what we've seen, especially here in the US, is a bottle return deposit system does a lot to move recycling rates upward. So here in the US and in my hometown of Connecticut, now we just raise the redunption rate from five cents to ten cents. It's been unchanged for the better part of three decades, so that was a major move. Bills and initiatives like that do an immense amount to be able to increase the collection of those materials.

Is it just I mean, is it kind of a waste of time for us to be talking about the consumer end of this? Isn't doesn't so much of this happen on the industrial side of this stuff?

I would agree if you take the mentality of I have a problem to solve, Yeah, I'm going to convince three billion individuals to quote unquote do the right thing. Or would I prefer to convince a thousand companies to change the way in which they go to the market.

Well, what are the regulations around companies? Because it seems like that really is what moves the needle with this stuff.

Regulation is definitely the tip of the sphere. There's been a lot of talk around extended producer responsibility and the cost that firms will incur as a result of manufacturing and producing these items, but again major opportunity for the companies that get it right. At the end of the day, sustainability is in essence talking about using resources properly and that allocation of those resources it means better business.

Hey, Tony, how has the recent news from the SEC and Chair Gary Gensler had an impact? I'm thinking about the SEC now forcing companies to disclose their greenhouse gas emissions for the first time, but we should point out watered down a key requirement after there was some heavy lobbying from industry groups. But this alone, how might it change kind of the story and the impact and move us to a much more sustainable world.

Well, I think the story that we've seen unfold for the past ten years is there is a real embracing of this concept, in particular by the capital markets. So the lack of a climate action plan inside the company is the lack of a business continuity plan makes you

Hey, I want to talk a little bit about other issues that we've talked about on our program when it comes to sustainability, and a lot of that has to do with sort of the effects that we're living with each and every day because of decisions that have been made and production over the last fifty to one hundred years. We talk about single use plastics and the idea that we're starting to see microplastics show up in places that

So it's clear to a large number of us that the amount of plastic that we're producing at scale is just untenable. On top of that, to your well made point, the medical community is stepping in and every week discovering more and more places that plastics in particular show up. What is heartening and promising is a whole raft of new technologies coming onto the landscape. So things like seaweeds, inalogenates, and plant based fibers are being used to replace plastics.

Right How quickly though? Can it change the needle? Like I totally get into it. Bloomberg very involved in the earth Shot Prize as you know, you know, but I still am surrounded by a lot of plastic And if I go to buy anything, there's certain aisles in supermarkets and various stores that all it is is plastic containers. So how do we You know, I talked about Gensler Chair sec Chair Gensler. I mean a lot of lobbying, and these are whether it's the petroleum industry, the plastics industries.

I would offer one example that just dropped last week. Crick the coffee company. They disrupted the world of coffee years ago with a single serve pot and we all get to choose the flavor and the style and the amount we want in our homes. They just launched last week in the US and new products called the k Round. It's basically a plastic free coffee capsule that you can use in your home without the need for using plastics

Wait, these are the ones. You don't have to send these back to recycle, right.

No, it's literally a pressed coffee pod that's coded in a non plastic coating. You drop that pressed coffee pod into curious new machine and you get the same amazing experience that we all come to know and expect, just without all the extra packaging.

Hallelujah.

But you know there's some stuff that you just feel like can't be made in a sustainable way like legos, the things I step on every.

Day, Tony, do you have a solution thirty seconds left for do you have a solution for something like legos?

For lego?

Not yet that we should have those folks call PA and we can help them. The medical industry is moving more sustainably. That's another key area that's been problematic for safety reasons and regulatory Yeah, and again technology is here to save us. There's a lot of amazing discoveries on the horizon.

So when I really hurt myself on the lego, I will be given a medical solution.

That will make sugar sugar.

Yes, exactly, that's what you say when you step on a lego.

Those things really really really hurt, Tony, Thank you so much, really appreciate it. Certainly a space that we care about, and UH is great to get some time with you. Tony Parata. He is sustainability and regenerative economy expert at PA Consulting Jettings from Westbork, Connecticut. Those things hurt.

They've been, to be fair, they have been trying to make them more sustainable. They can't figure out any way to make my understanding as they can't figure out a way to make them with a material that's not plastic that has the same precision.

Now I get it right so that it's still a toy that kind of works. All right, Where to come, folks, This is Bloomberg.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday. He is starting at two pm Eastern Apple car Play and Android Auto with the Bloomberg Business Ad. You can also listen live on was on Alexa from our flagship New York station Jo Just Say Alexa playing Bloomberg eleven thirty.

Well, Carol. As I've prepared for our next guests, I went back and I reread a few columns from Bloomberg opinions Mark Gongloff, who covers climate change, and I came across some really startling stuff. Here's when he wrote. Recently, you'll probably remember this one. Climate fuel disasters killed at least twelve thousand people last year. That's according to one count. A change in climate has already killed at least four

Right, we just talked with our TV colleagues right about people leaving Florida because it's getting too hot, and you've got homes that campionsured because of climate change. Jonathan Vigliotti has seen the devastation of many of these disasters firsthand.

Yeah.

The book is called Before It's Gone, Stories from the front lines of Climate change and small town America. Jonathan joins us from Los Angeles. Jonathan, good to have you with us this afternoon. First of all, congratulations on the book. I want to go back to the genesis of this book because you've covered a lot in your career. You were based in Europe at one point, you've been based

Well, great question, and first, thank you both for having me on. It's a pleasure to be here. For me, it has been an evolution because when I first started covering these stories environmental disasters, I failed to make the link between climate change, the role it was playing and radicalizing our weather, and the role that radicalized weather was having on our main streets across the country. For me, one of the wake up calls was literally began with

Jonathan, and I feel like I almost guess the answer to this, but this idea of never seen that before, once in a lifetime, storm, once in a lifetime, you know, heat wave, if you will. It used to be once in a lifetime. We heard those things, but now we hear them rather frequently. Talk to us about kind of how that started. You started to see that as unfortunately a trend here.

Yeah, time and time again, a historic wildfire, a historic hurricane, a historic tornado. After a while, you almost get tired of saying historic because it just keeps repeating itself, and the next storm out pace is the one before it that was also historic. As a journalist, as a storyteller, I feel like we have this unique power to help connect the dots to the world around us, how it all works. And I've been given this unique access to

And Jonathan, we want to go into some of those stories because I agree with you that the more we tell these stories, hopefully it kind of clicks and sinks in. But having said that, we all been kind of talking about it for a while with kind of an understanding, like, hey, guys years ago saying, we see things are going in the wrong direction, and I feel like I almost feel

I think about Dan Gilbert. He's a psychologist at Harvard. He was kind of a north star a ted talk that I watched him give on YouTube years ago, and he was actually talking about the key to happiness, But in this conversation was also speaking about this part of

You know, I'm a Californian. I think you live in California. This is not necessarily a place where like I would love to live back in California, but I think about my family back in California, and I mean, do you think about where you live and right now and potential climate implications.

I do every single day. I bought my home just before COVID, and I had a difficult time getting the right kind of insurance, affordable insurance. I live in an area that is at low risk of wildfire, so I didn't expect that to be an issue, but insurance was very costly until I found the right insure, and it took a lot of research and investigating on my own, which a lot of people don't have the time to even do that, and so I was fortunate to find it.

Well, it's something we talk about a lot through the angle of insurance companies. Jonathan Carol and I were talking just about, you know, kind of your experience covering natural disasters for such a long period of time, jetting to different parts of the country and talking to people who have experienced such devastating loss from Hawaii to the South coast of the United States to the Pacific Northwest in

Yeah, thank you for that question. And Lahina in many ways offers all of us lessons to learn from as long as we listen. So we were launched to Lahina less than twelve hours after the ton was destroyed. We were one of the first network teams inside Lahina. We couldn't drive in. We were met by a roadblock that we ultimately ended up bypassing by taking a chartered boat an hour and a half to the centered shoreline. And what we discovered in my book I described as an

Late, there's incredible fires. Obviously as a result of climate change. There's also increasing water and rising water levels. If you will, your story where you went up to Greenland and took a look at the Arctic ice melt, to me, there's another thing that reminds me that there is kind of no way of going back. When I see stories or

And that could be one of them. Because our glaciers are like a candle burning on both ends. You have our warming atmosphere, which is heating up these glaciers from above. Then you have the warming water, which is heating these

Well, let's talk about perhaps some policy prescriptions here. And as a reporter, you go to these places and you report the facts, you tell people's stories, you bring things to light. If there's a message that you want policy makers to understand from your reporting, from your work, from your book. What is it and what recommendations perhaps you have for them.

You know, the Infrastructure Deal, the Inflation Reduction Act both infuse billions and millions of dollars to address these multiple crises from climate change, which is the release of greenhouse gases into the atmosphere, and we can reduce that through green alternatives to habitat change the way we build and

And I love how you divide your book into the four elements firewater, earth, and air, and you just realize through your reporting the stories that were slowly increasingly rapidly chipping away at all of those elements, and that's what's necessary for existence. So you know, we're hitting it kind of at all of those levels. It's upsetting to say, to say the least, Jonathan, thank you so much. Really appreciate it, and good luck with the book.

Thank you so much, Carolynsim. I really appreciate the conversation.

The book is before it's gone. Stories from the front lines of climate change in small town America. We've been talking with Jonathan Vigliotti, of course national correspondent over at CBS News.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Easter Listen on Apple car Play and ed Brote Auto with a Bloomberg Business app, or watch us live on YouTube.

What I'm about to tell you is a matter of life and death.

If the soil dies, we die.

But there's a way to save our precious soils.

It's called regenerate.

Regeneration is not just restoring the land to the state that we found it out, but actually making it better.

All right, what you've been hearing and watching for those who are watching on our streaming service and YouTube, that is from the documentary Common Ground, which looks into how food production and agriculture can be done better with less environmental impact by looking at our past and to our past and looking to regenerative agriculture.

For more on the film, and it's deep dive into the agricultural history of the US. We welcome the filmmakers behind it, the husband and wife team of Josh and Rebecca Tickle. Thanks so much for joining us. I just want to start with how you guys got into this. Rebecca, I want to start with you talk to us a little bit about why you wanted to dive into regenerative agriculture and really the agricultural history of the US.

We've made twenty films on the environment, almost all of them are documentaries, and we started off focusing on reducing our emissions, and then we realized at a certain point that even if we reduced all of our missions and stopped emitting today, that it wasn't going to take that legacy load of carbon that we've admitted into the atmosphere and do.

Anything with it.

And the only way we can actually do anything with it is through biosequestration using plants, and so regenerative agriculture it's a way of building soil that not only benefits the environment, draws down that legacy ton of carbon that we've put up into the atmosphere, but it also helps farmers to make a profit.

And so as soon as.

We learned this, and as parents, we knew that we had to take this message and tell it as well as we can and broadcast it as loudly as we could to as many people as we can, because right now everyone is facing this climate anxiety. We're facing climate anxiety, and we don't have to. We can take that same energy and put it towards the solution of regenerating our

Josh and Rebecca take a step back. You know, over the years, and a few years ago, I should say, remember working with the folks of a Chipotle who've also done had done some films and really looked into you know, regenerative farming and how we could farm better. You guys have been doing this for a long time, and you've

Well, we have done this for twenty years, and I think awareness is higher now than it's ever been. When we released Kiss the Ground, the film that the prior film to Common Ground, it was during COVID lockdown and that film went absolutely viral. We're so interested in the connections between soil and health, and I think that remains today.

Hey, Rebecca, I wanted to ask just about and Josh as well, about the some of the casts that you feature a huge group of people, but some real household names here. I mean we're talking about stars like Woody Harrelson, Jason Momoa, Rosario Dawson. Rebecca, talk a little bit about how you get them involved. Was it given your history? Is it pretty easy?

Well, Josh here, I you know, I first heard of Josh because he had driven the Veggie van across the country promoting biodiesel back in the nineties and wrote a book that taught people how to make it. So of course Woody was driving across the country and his Hemp biodiesel van and every time it would break down, they would call on Josh to help them figure out how to problem solve. So he was definitely on board and has been on board with our work from the beginning

Guys, one thing I wanted to ask is that you know, as you said, you know agriculture is a massive industry. Commercial farming is massive, and you have to go up again some really big you know, food companies and so on, and sometimes it's hard to turn the needle. I do believe you can take make changes one step at a time or one acre at a time. But talked us about that battle, whether it's through lobbying, whether it's through just the massive amount of money that the commercial food

Well, you guys are a business network, and you obviously are talking to business minded people. Ultimately, the food industry in the United States is driven by consumers. It's not driven by policy so much as it's driven by everyday people like you and me, who, if we're lucky, we get to make three votes a day with our forks and knives. And that's where the real power of this movement is. You see, when we release Kiss the Ground, there were no acres in the US to speak of

Well, Josh.

Oftentimes, when we talk about the idea of having the opportunity to buy, to choose where you get your food, to buy food that is organic, buy food that is grown in a way that you want to support. It

Yeah, that's a great question. We get that question all the time as well. You know, we've been doing these films for a long time. So Common Ground is the second film, Kiss the Grounds the first one. We actually produced a free food guide on the common Ground Film website common groundfilm dot org for everybody to download, and that guide really takes you through the steps of eating a more regar diet. The way we look at it is this is not a one hundred percent change for anyone,

So, Rebecca, I want to bring you back in and you know, this film is all about regenerative farming, and you know we kind of throw terms around and you touched on it at the beginning of our conversation. But break it down and how it works, how it can work on a grand scale, and why it is so much better for the environment. And I'm curious about yield too, and.

That is yeah, I come from a legacy farming family, and we've certainly in my family, used our fair share of chemicals and done our fair share of tillage.

Basically, the principles.

Of regeneration and a regenerative agriculture is building soil, growing food in a way that's in symbiosis with nature. And the practices that are involved in regenerative agriculture are pretty simple. It's farming and eating in context. So we live in California, we can grow things that are more Mediterranean, but you wouldn't grow those same things in Chicago or in Vermont. So it's about getting creative and figuring out what's growing locally and regionally that can improve the health of my

Okay, maybe this is super naive of me, but I feel like Tim and I sentimes asks a lot of like, Okay, well, if it's so good and makes such sense, why isn't this happening? What is the biggest obstacle?

We know?

The government I think in the latest infrastructure bill has the Inflation Reduction Act. Excuse me, I think made twenty billion available to the USDA Natural Resources Conservation Service to address popular conservation programs. There's stuff going into farming. So if it makes such sense, why isn't it happening?

Well, the good news is it is happening. As we said, you know, we've faster. Why is it happening faster? Well, I think we're on an exponential curve with this. This is you know, you got to understand, Kiss the Ground only came out in twenty twenty and that was during a massive, you know, global lockdown, So we've really only had maybe twenty four months to activate around this set of concepts, which, look, this is all ancient knowledge. We

Well, we see something on packaging that tells us this or no.

Yes. As a matter of fact, we have an initiative it's called one hundred million acres one hundred million acres. Dot org is the website, and you can see all of the logos of all of the certifiers that are already in play. Old Foods and Trader Joe's have approved three of them. Internal estimates, they believe it will outpace the organic logo well and truly within thirty six months. So yes, you will see logos in the store. They will be certified, and then you will be able to

Well not everyone speaking of grocery stores is lucky enough to live near Rainbow Bridge Natural Foods in Ohai and get to experience the legendary grilled tofu that I survived on in high school when I lived there. Guys, but I do wonder about what people can do if where they live do not have these sorts of items for sale.

Absolutely, Look, I think grocery management is very open to conversations, at least in my experience, no matter where you let me live, if you live in Bismarck, it doesn't matter. They want to service you as the consumer, and you, as the consumer is ultimately the one with the power. We don't say, hey, ask for them to replace a product. We say, look at the company and see if they have an option. Some of these companies now have regenerative options.

We so appreciate talking with you guys. Thank you so much. Josh and Rebecca Tickle. Of course their documentary Common Ground, and it's going to have an on our birth day. The film will have an exclusive one day only screen event at AMC Theaters coming this Monday, April twenty second.

Oh is the type of place where you can just walk around and grab oranges off a tree, ray and eat you mercados everywhere. It's pretty amazing.

What I love is every day I learn a little bit more about Jim Stead.

Of it all right.

Great to check in with them. Thanks so much, everybody.

This is the Bloomberg Business Week podcast of a little on Apple, Spotify, and anywhere else you can get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg Jermale