This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine.
Plus gloom War, 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. It was a shortened trading week thanks to the Good Friday holiday, and yet jam packed with lots of US economic data, including the Fed's favorite take on inflation. Check out all of the data and analysis on the Bloomberg End at Bloomberg dot com.
For us, we got to take on the economy and health of the lending environment courtesy of two bank CEOs, one super small and one a large cap publicly traded company.
Also this week, tons of Boeing news changes in the c suite, including CEO Dave Calhoun stepping down at the end of the year. A take on Boeing and much much more from Grace Blakely, the author of Vulture Capitalism.
All that to com We begin, though, with former President Dom Trump, who was in the news this week because his first criminal trial is set to start April fifteenth in Manhattan, and his bond was slashed by more than two thirds on another lawsuit, this his New York civil fraud case that handed him a crucial financial lifeline. And then there was his fortune on paper vaulting thanks to
his newly public social media company. There's a lot of news carol on the former president and current Republican frind Runner. I mean, he's pretty much locked up the nomination, not officially.
But yes, safe to say.
I got to say, though, what will caught our attention about all of this is that a group of very well known Wall Street in Silicon Valley folks who are either overtly or quietly embracing the GOP nominee for president and the prospect of returning to the political turbulence of the Trump era.
Brad Stone wrote the story. He's the editor of Bloomberg BusinessWeek. He's also the author of several books, including a couple on Amazon, The Everything Store and Amazon Unbound. Brad's story featured in the new issue of BusinessWeek magazine. It's available on newstands, on the Bloomberg terminal and at Bloomberg dot comlash business Week I.
Was calling it the revolt of the Winners and this very conspicuous support among business leaders in tech and primarily on Wall Street for former President Trump. And as Tim described, there are kind of two brands of support.
There's the overt support, and.
So you've got Howard Lutnik of Canter Fitzgerald and John Poulsen, the hedge fund owner holding fundraisers for Trump, Nelson Peltz, Disney Foyle who endorse Trump recently, and then the more
subtle forms of support. Ken Griffin from Citadel saying on TV that Trump would be good for the capital markets, and of course Elon musk on the service formerly known as Twitter almost every single day, suggesting that he's moving in a right word direction and hasn't endorsed Trump, but it is certainly putting a lot of distance between him and the current president.
And as you mentioned the piece, you know he's saying, Elon muskang he has an and you won't donate to any political candidates. But certainly a lot can happen between now and November fifth, Brad. So what happened in terms of this transformation for some of these folks over the last four years. There were quite a few after January sixth who came out and distanced themselves from the former president.
What has happened in your view over the last four years or over the last year to move people back to former President Trump.
Yeah, No, I mean I think look, and there are plenty of business leaders who are moving in the opposite direction and endorsing or supporting President Biden. And maybe in a future column I'll look at that.
But there is this movement.
Another great example is Jeff Yass by the way, from Susquehanna International, the Pennsylvania billionaire who may or may not own a portion of the company that has merged with Truth Social had given Trump a potential lifeline. He was once a never Trumper and is now certainly making some news favorable to the former president. So look, I mean, I try to diagnose what's going on here. I mean,
I think there's a couple things. You know, in the in the case of Jeff Yasts, maybe this is very transactional. You know, Trump has reversed his position of TikTok Yes is a major owner of Byte Dance. I do think there's a sort of material concern here with some of these billionaires looking at at Biden's economic and taxation policies and and and the idea that Biden raised in the State of the Union to to instate a billionaire tax, to increase the corporate tax rate, to roll back the
higher end of some of the Trump tax cuts. There's Biden's antitrust agenda. There's the pro labor stance, and the fact that Sean Fayne from the UAW was was a guest of the White House during the State of the Union and recognized by the President. And you know, to somebody like Elon Musk who runs a non union shop,
these are existential concerns. So I think we can get into what some of the emotional reasons might be, but those are perhaps some of the rational decision making that's going on right now.
And I totally get the rational side. I love when you get into kind of the more emotional side of like, these guys are disruptors and they like when things kind of get it feels like unsettling. Talk about that kind of thinking and why they may be providing support for Donald Trump.
Yeah, you know, I don't want to get too far into the psychologist's office with this analysis, but I think, you know, to some extent, they feel like Biden. You know, maybe the Biden administration victimized them a little bit, ran against the one percent or the point one percent, so they don't feel recognized. I think this maybe reassessment of tech power in Wall Street power over the last decade, you know, left them feeling.
A little victimized.
And yeah, and then there's the sense of being contrarians, being disruptors. You know, Peter Thild made this contrarian bet in twenty sixteen, and you know, to a certain extent that backfired on him, but he got a lot of mileage out of it, and he had the ear of
the president back in twenty sixteen. So perhaps some of these business leaders are billionaires, see where the political wins are shifting and want to have the ear of someone who they think, despite you know, the arguments for against, it's someone you know, who they might think has a shot of winning the next election, and so they're trying to get on that side of history. I think probably for a lot of these folks, there are different reasons.
But you know, I don't think that we can dismiss the pure capitalism here and the idea that some of these folks just see a better tax regime and perhaps anti trust regime under Trump.
Yeah, let's talk about the anti anti trust regime, because that is one area where President Biden has you know, been I think, in his view pretty successful at this point. That's certainly a part of it, Brad. But I do wonder to what extent, you know, how these folks did over the last four years during President Biden, because Carol and I were talking about this so a little earlier, as we were preparing for this, and we're thinking to
talking with each other. Well, it's not necessarily like, you know, yes, there was some rhetoric in the State of the Union, but it's not like there were policies put in place that actually hurt these folks who you write about.
Yeah, and I guess that's the question I had.
You know, the markets are going to determine a lot
of the financial success for some of these figures. I mean, you look at like Larry Ellison of Oracle, who has been reported to be dining with President Trump as Trump looks to improve his fundraising status, and you know, like the markets like predictability and what we do know, again, I'm trying not to be political here in my analysis, but what we do know is that you know, President Trump historically and certainly it seems on the compantrail brings an element of unpredictability.
And chaos, and the markets don't like that.
So I do think that, you know, some of these business leaders are trying to be opportunistic and they're embracing an agent of chaos, and it will be interesting to see where that support goes, whether it waivers as we get into the real campaign season, or people are paying attention and where the former president hasn't necessarily been as scripted as perhaps some of his handlers would like.
I love this line in your story. In your reporting, Brad, you say billionaires aren't all that different from Trump's main constituency, constituency of less educated, working class white households. Both groups tend to see a conspiracy by far off elites who are out to deprive them of influence, expropriate their money, and squander America's advantage abroad. Like it's interesting to see make that connection between those two groups, But I don't know,
it's just kind of very interesting and fascinating, right. We could bring a lot of therapists and psychologists on this one, but it's fascinating that connection.
It's one thing that I had never seen before and don't necessarily know how to interpret which is the sort of venom that's out there. And maybe I'm paying too much attention to social media among certain elites, for other elites, for academic leaders. I mean, this was came clear in the battle against Harvard's Harvard's president by Wall Street leaders like Bill Ackman, and this idea to scramble for influence.
There's a great book which I'll recommend, Carroll. I know you're a big reader, but a book called End Times by Peter Turchin, where he actually somewhat apocalyptically describes the end of regimes across centuries. And one of the telling tales of moments of instability has been when the elites start competing each other and battling for influence. So I don't know, maybe that's a little bit of a downer note to introduce, but I.
Feel like sounds like a sweet movie and competitors.
We're not going to end on that note. Okay, we're going to I'm going to throw Look, the election can go anyway. We have no idea how it's going to go between now and November fifth, but we do know, and we do know that money plays a big role in politics. But does the support of the folks you write about Brad any idea if it actually moves the needle when it comes to what matters, which of course is turnout and votes in these swing states well.
And and fundraising obviously does matter. And I'm not an expert in this, but you know, from what I read, President Biden is out raising Trump, and I think that's one of the reasons why the Trump campaign has out been there soliciting, either soliciting donations or having conversations with folks like Larry Ellison and jeff Yass. And I don't
know that any of them have necessarily stepped up. I mentioned the fundraiser that Lutnik and Paulson were holding I think beginning at next month, whether that support translates to the ballot box.
I mean Trump, the Trump campaign has to be careful.
Right, because you don't you don't want to necessarily turn off your broad base of supporters, working class supporters by trumpeting your billionaire support. So it's a careful line that they've got to they've got to walk right.
And also in an industry, I feel like the tech world really knows how to play well with their enemies, their frenemies that they often work with. So could they just be hedging as you end the story, Brad in terms of the outcome, a really great read and a really timely read. Brad, thank you really appreciate Bradstone, of course, the editor of Bloomberg BusinessWeek.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Easter Listen on Apple card Play and then brought auto with a Bloomberg Business act or want us live on YouTube.
There's a problem. We've got a plumbing problem, and Carol, it's a cost that all of us are paying for just bite an above average salary. The pace at which the US is minting new plumbers is lagging retirements. The widening plumber deficit matters for households facing hefty charges to fix a leak. I think we've probably all been there totally. That costs what and business is trying to get new
buildings completed on time and on budget. In fact, the plumbing deficit costs the US economy a whopping thirty three billion dollars in twenty twenty two. That's according to one analysis. We know all of this because Bloomberg News Global economy reporter and the Current writes about it for Bloomberg Business Week. It's the far reaching consequences of the US plumbing problem. He joins us from Washington, DC and Carol and I
could not get enough of this story. Love it. And it's also something that we talk about a lot because we know how much it costs to hire a plumber. What is it about the plumbing industry that's sort of emblematic of the worker shortage that we're facing here in the US.
So there are some specific kind of stigma issues around plumbing. I mean, as you know, it's such an important function that goes to the heart of our daily activities and our economy. Without plumbers, we don't have clean drinking.
Water, for example.
But speaking to those in the profession, the teachers and the young students who are starting on their career there, they say that it just doesn't have the appeal of o our roles because it's tough physical labor. For example, I spoke to one young plimmer who gave example of having to dig a trench in the open in the middle of summer one day, having started at five am that morning. It's seen as dirty work, perception of lying
on your back fixing someone's toilet. And of course the hours aren't hours can vary, but they're not seeing as especially social compared to other roles. So when you throw all that into it and consider them this conditioning of younger people over the decades that they should gravitate towards the university away from the trades, the end res of speaking to those people in the industry is that the skilled trades like plumbing just don't feature very highly on
the wish list for young students these days. In school they much prefer the university education. But the pitches you can become a plumber, get a good job, I'll have much less debt.
Well, how quickly can you become a plumber and electrician? Because my understanding, And we'll sometimes have someone come into our home and it's like they've got an apprentice with them. Who has to do that for I thought a substantial period of time. But set the record straight, because is that part of the problem, That is it just taking too long to train them or allow these folks to kind of go out on their own.
It is. It's a process. It's a five year process.
That kind of yeah, you know, rotates between the practical laboratory work and the tuition in the school and at the same time being attached to an actual licensed plumber.
So over the course, for.
It is five years before they get their full certification, but along the way their wages will be increasing, and as I mentioned earlier, they are not accruing the debt they would be to have to get a you know, a life skill or trade in some other part of life. The end result when you do come out of it, you couldn't get a good job, well paying and potentially for life if you want to.
That's what I wanted to hit on here is we talked so much about the student loan crisis here in the US, and I mean, my jow just drops when I talk to parents about the cost of college for their kids right now. I mean, we're talking upwards of sixty to ninety thousand dollars per year for a cost of college here in the US at some schools. And you did some looking into the apprenticeship programs some schools for this stuff. Who does it have costing total for a five year program?
So let me give you the example of the plumbers and gas Fitters Local five apprenticeship school. Forgive me the seeded to read it out to get the name right. I went to that school and they pay the tuition of the students. The money comes from both the unions and.
There they pay the tuition. Say that again, they pay.
The situation for the students for the five years, and the students need only pay fifteen hundred US dollars each over the course of the five years. But they are also required to buy a pair of boots and the measuring tape. And this is what when you know, speak to the teachers and the students out there. This is a great appeal for them. Like you mentioned, you've got this whole political debate going on about students dead, and you have the legacy of students.
Trying to pay off that debt. Well, here's a walk of life where you can go in.
Get a good qualification, get a good skill set that does go beyond fixing totals by the way, and then come.
Out of it relatively debt free and with a good salary.
So obviously the pre apprenticeship courses that you looked into are just overflowing with students right.
Well, this is where this is where the rubber hits the road.
So I cited an example of a brand new a pre apprenticeship program that has been put on by community college in Maryland to deliberately attract young people to become plumbers. It's a well crypt brand new laboratory. They have eighteen seats and they have three students who have enrolled. And this is what speaks to the idea of the diplomber shortage,
why people just aren't necessarily being attracted to. And again you speak to the plumbers and the teachers, they say, you've got to go into middle school upwards and condition children that A it's good to have a skill. B
you don't have to it's not all about university. And then see they're making the point that schools also have to have practical classes now like would work for example, allow students to do that, and then along the way they can make up their mind whether it's university or trade.
You know what they need.
They just need more plumbing influencers. Okay, I'm not joking. I heard I heard Paul Brennan laugh. This is not a joke. But this is like a thing on TikTok and and Instagram and stead many influencers, influencers for every trade, for woodworking, for plumbing, for cleaning cast iron. I mean, seriously, everything is out there.
Having said that, I mean you think you know.
I remember like a show like This Old House, like they were trying to recruit students because nobody wanted to do construction anymore. Nobody wants to do this. I mean, but I want to go back to end it. Does someone really need five years to become a plumber? If the demand is such an issue, isn't there I don't know, Like I don't know enough about it, and I certainly want if somebody comes into my house that they do it right so that all of a sudden I don't have a flood.
But does it really have to take that long?
Is there any move to kind of figure out how to condense the teaching so and can get people out there?
I mean, look, that's of the affair question. I'm sure that that teachers will be open to that debate. But I have to say I have a newfound respect for what they do. Happen to go along, I shadowed them in the classroom, watching what they're doing. You've got the technical cyber, which is a quantitative quotient, learning those blueprints, figuring out their math for the measurements, figuring out how to get the water flowing in the right direction, the
right weight, and the right pressure. There's a whole technical side to it that I guess I wasn't fully aware of.
And then there's the physical side to it, and they shared the labor side to it.
So it certainly would take some time before you're fully confident that you would let this person run amok in your house.
I would imagine takes a.
Few years at least, But you know, whether that's four or five years, I'm sure that's probably a valid point for debate. But that's where the program seems to be said at the moment.
And just in the last thirty seconds, dovetail this with your most recent reporting about just the overall worker shortage in the way that the immigration in the US needs to change in order to fill these jobs.
Yeah, that's right.
So these companies and especially those in constructions, say they cannot get the workers. Part of that solution, as we talked about the last time, is legal immigration. But in this case, it speaks to the idea that children at school, if they're encouraged, you learn a trade instead of university could go some way towards filling some of those skills shortages as well.
Yeah, and I'm sure there's like carried out construction electrician, Like there's lots of things. And Acurran thank you as always, Global Economy reporter at Bloomberg News.
They're in our DC bureau. His story featured in the.
Forthcoming issue of Bloomberg Business Week magazine, but you can read it now on the Bloomberg terminal. Of course, at Bloomberg dot com slash BusinessWeek.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Androyd Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty time for tale.
Of two banks, one small and one that is a more than sixty one billion dollar market cap company. First up, the view from the small, family owned more than one hundred year old community bank, Citizens Bank of Edmund, which is based in Edmund, Oklahoma. There is one main branch online banking and they're working on programs to bring in the.
Unbanked with more on the environment and a program that taps into her background. Jill Castilla, the president and CEO of Citizens Bank of edmund joined us in the studio. Jill also a US Army veteran who held a various posts at the Kansas City FED. We kicked things off asking her about seeing any signs of stress, and we finished.
The year was zero pass jews, zero non accurls, and zero classified loans. Never in the history of our institution have we had those types of that.
How would you have answered that question a year ago?
I would have been concerned about, not so much the lending side, but just the uncertainty. One came to deposits because we had the regional banks, the stress that was happening there, and education to customers about what uninsured deposits were. We're at less than we're a right at five percent uninsured deposits.
So meaning you know, ninety five percent of your deposits are insured by the FDS.
That's exactly right, and so most banks like mine are like that. It was an education process. I really the confidence and the customers expressing us was quite high, and we were just at the front of being transparent and open and just accessible through that kind of transition.
So you said, you've never seen this before, never, So how do you explain it.
I mean, there's still so much money out there, and there's so much optimism, even with the difficulty of having the inflationary pressures affecting families. I mean, that's happening, you know, with small businesses. But I think that there was just such a we couldn't hire, you know, fast enough because there wasn't the labor force there, and so small businesses didn't overcorrect that optimism, and so I think it's kind of kept things in check. We're seeing some small business stress.
You just can't You've got to have a good business plan and get product to be successful. We're there for a period of time. It was kind of a rational exuberance.
Help me out though. When you say there's so much money out there, meaning what money for? What do you mean by that?
There's a lot of investor money still out there that's either investing in real day or buying businesses. A lot of M and A activities that's still occurring for small businesses, and so you just still see investor optimism out in the marketplace. Not really thinking about the market, but really what's happening on the ground.
They tell us more about the focus of your bank. It's a single branch employee owned in Edmund, Oklahoma. Who are your customers and what are the segments that you're not just active in but prominent in.
Yeah, So's it's just your absolutely traditional community bank. If you watch It's Wonderful Life, we're basically George but it was so lovely against the backdrop that we've put it into. But go ahead, it is really interesting. So we have I mean, as our average deposit, our medium deposits right at twelve thousand dollars, so very has small deposits.
They'll reach oil.
This is a business a bit small businesses and consumers. I'm very kind of equal on the deposit side and in our lending we do traditional mortgages as well as small business loans and commercial real estate.
On the mortgage side, with rates at roughly seven percent for a mortgage right now, how have you seen it slow down locally?
It's come almost to a complete halt in some ways, but a lot of cash buyers still out there. There's still people moving into town that still need to buy a home. But then when are you looking at rents availability, which is increased lately. It used to be really difficult just in a year ago to get a house for rent. Now it's a little bit less expensive to do that and then more accessible.
So your mortgage business is almost completely dried up.
Oh yes, yeah, they'll worries about business very low.
When do you think it'll at what rate do you think it'll come back?
Yeah?
I don't.
I think whenever we're in the sixes, that really helps, you know, kind of momentum whenever you started walking sevens. Yeah, in the sixes, And but I think it's starting to normalize. I think the expectation has been like, well, we're around historic norms right now, and so I think relators are starting to accept that and consumers are as well.
What's the upside of being a bank like you are?
Right?
That's kind of an anomaly right in a big bank kind of environment, certainly here in the New York metro. But there's upsides and downsides to everything. What's the upside? What's the downside? Or how you think about compety, especially in the digital space where you know, even someone who's got you know, an actual brick and mortar if you will that you've got to compete with the digital space as well, especially for a younger generation.
Yeah, so it's such a great question. So we've been around for one hundred and twenty two years and our plans to be here for another one hundred years. And so where we are we are so accountable to our customer base and that accessibility. I sit in our lobby, so customers come straight into my office. But when now we're competing in the digital space. We just launched a digital bank for the military, and so this bank also
three hundred and fifty million OAR bank. We just received our first patent for a completely remote self service bank. So we just because you're small doesn't mean you can't be disruptively innovative.
Can you talk a little bit about that. Because you are a US Army veteran and a lot of your family, your husband served, your kids went to military academies and are serving. What are the unique needs from the military when it comes to financial services.
Yeah, so soldiers, a new soldier like I was, whenever I list, many of them showed up unbanked, and that's still occurring, and they still are quite susceptible to predatory lending and they were so young. Yeah, so many, so many banks won't open independent checking accounts for seventeen year olds. They had to bring the third their parents in many come from situations in which there's not a lot of
financial literacy and support around them. So it's really their first job and maybe their first job and their family and in a couple of generations. So it's really a great opportunity for us, we think, to be able to really meet someone where they are, provide financial literacy around that, and really understand this young hero coming to serve their country. How can we support them best to get them off our financial footing.
I can agree.
We have all these people who go fight to you know, around the world for you know, to defend democracy, defend freedom, and yet they're often left behind in so many different.
Yeah, we talk so much about after they serve too, Carol.
Healthcare, you know, financially, educationally, and then you're talking about banking.
So tell us about how this platform will work and who will you open it to? Everyone?
Yes, it's opening everyone at launched an audio military anybody, anybody in the end that qualifies for our bank account can open an account with us. It's a two minute account opening, and we're using alternative identification methods that typically aren't available in a digital bank. So if you have a tribal card, if you just have your military ID, sometimes you can't open accounts and most digital banks in
that method. It also gives them an instant direct deposit form signed by me that they can text to their recruiter, so while they're sitting there, they can open their account and not have to worry about transportation. Many of these young people don't have cars, they don't have a banking relationship. They are having their wanting to enlist and so then they're having to leave and go and go to the bank.
To do that.
As you mentioned, you're more than a century old bank, traditional bank. How do you compete with the venture funded startups that are going after the same demographic.
Yeah, I view them as a lot of great, healthy competition, and many of us are really great friends and when we learn from each other, and so we partner with a lot of venture funded startups that are in this business. I mean who we partnered with for our digital bank that we're in that space and so well you're.
Because a lot of these are FinTechs that they can't necessarily call themselves banks, but they partner with banks. They doo yeah, financial services. So you've partnered with some of these FinTechs, I've.
Partner and I mentor many of them. I mean it is we're cultivating that space because it's crucial to the longevity of a community bank that we have strong alliances with our fintech community.
We're talking about Jill Cristilla, she's Citizens Bank of edmend president and CEO here in studio with us. Jill, as you said, for Roger, is the service right, it's a digital bank offering for military members. You said for those who qualify, what's I'm thinking at a seventeen year old, what's required for them to qualify? Because I do wonder how many we'll pass that qualification, how many will not.
That is a very low barrier to introduce. So basically it's having a valid identification, that's it. Yeah, And we also verify kind of where they are to make sure that it's not a fraudulent account.
So how do you make money on these accounts?
Oh?
That's you know, we have a model. If we do good, we'll do well.
And so the focus has been build something that is amazing, and then the financials take care of ours itself. I mean, that's what's great about recharging for these accounts. They're free accounts and no, there's no fees associated with them. We do a roundup and a match. We have a really nice, healthy interest rate on savings account and so really the only way that you make money off of this type of account is through interchange revenue for.
The transaction somebody swipes their cards.
So benign. Yeah, we reimburse all foreign ATM fees. You know, there's no user costs associated with this.
And where are you seeing the footprint right now of people adopting the accounts.
Yes, so it's widespread. We have them overseas, We have veterans or living overseas their open accounts. I mean that we're targeting that entry level service members.
Do you have more people getting these accounts? These I don't want to call what are they? They're not virtual accounts, but they're either online only accounts.
Yeah.
Do you have more people who have these accounts than customers who are walking through the door of the brand?
We're we're opening out at the same pace, but we have much more accounts than our physical branch.
So we do it, but eventually you probably have more.
Yeah, I think I think it probably will. It's the ease and accessibility. Being able to get banked. We're previously going into bank is someone timidating. I remember growing up and being intimidated going into a staunchy bank and being able to reduce those barriers. It's good forever.
You remember the first time.
I actually remember my first book, but it was interesting.
My parents brought me to open a checking account and I had to be with them, and yeah.
It was like, but you did. You had your family do it right.
And it was like to sit down with somebody and it was your birthday.
Money or whatever or you know, holiday money, and like we started really early. It's what kind of breaks my heart is to hear you talk about these individuals who you know, when you talk about being you know, unbanked, if you will, it's often we're talking about emerging economies or something right, and they're trying to figure it out, and often technology comes.
To the right.
We're not talking about the US right, right, we're not.
And so it kind of breaks my heart that there are folks. It's not a new story.
And it shouldn't break my heart because I've heard it before, but that are just left behind individuals in the system.
Well, I was economically vulnerable when I enlisted, and then a family member wrote checks on my account while I was gone and took all that money. And that was thirty years ago. I shared that story and a young lady came up to me and said that was me and she was eighteen years old and had just enlisted a year before and had to have her mom on our account when she opened the account. But the mom had a garnishment, so when the money posted in her
bank account, it was taken. So this is a story that's gone on way too long, and so it's really we feel like no one else is coming. They've had a chance to come, and no one else is coming. So it's our job to fix it.
How many people do you have so far?
So we're right around about a thousand that we're serving right now. And so we are we really have small institutions, so we don't have like the huge digital marketing push that other digital banks do. We're not VC funded, but we are seeing just great receptivity on an organic basis.
Community banks a community bank it's employee owned. We've seen so much consolidation in the last few years, I mean the last few decks gates in the space. Can you tell us that your bank will remain independent while you run it.
I would not be here if there was anywhere in the cars that we were thinking about not being independent. We feel like we have we have this kind of audacious thought that we'll lead the way for everyone else and show it how, show them how it's done. We want to be here another century.
Do you want to grow physical branches too?
I sold our for physical branches and just to have the one. And that's why we invented this other space is because we had demand another geography. So now customers can walk on into our bank twenty four to seven in this little remote electron banking facility with their phone to posit up to ten thousand and cash withdraw to ten thousand cash, get rolled coin, deposit loose coin, and conduct their banking transactions twenty four seven integrated with our core. So it's like a small business ATM.
I have seen some of the big banks start to do that also, Well, we.
Have the patent, so they might eslore them a little bit.
That I do the exact same thing.
Just got about thirty seconds left here, Jill.
I do think about the importance of community banks, right you see versus maybe you know what a big financial giant that is many miles away doesn't see well.
And I think we get lumped into the big regional banks when we think about all the small ones are ones there less than the top twenty whenever there's four thousand of us less than a billion. We are here serving our communities every day. We're the ones supporting the little leagues that were in the grocery store aisles, accountable to our communities. So you don't need to worry about kind of what Wall Street's thoughts are on the bank, because you know what the bank is doing day in
and day out. You see the loans that they're doing, You see if they're being responsible with their deposits, and you see how they're investing in building their communities.
Great stuff. Interesting and come back and let us know how Roger's doing. It'd be interesting to see, really fascinating.
Jill Cristilla, she's president CUF Citizens Bank of Edmund joining us here in our Bloomberg Interactive Brokers studio.
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 brought Auto with the Business Act or What's Just Live on YouTube.
And now to another perspective in banking. Someone who we also caught up with after the last FMC decision, Bill Demcheck, is chairman and CEO of P and C Financial Services. It is home to P and C Bank. P ANDC Financial has a more than sixty one billion dollar market cap.
We talked about the one year anniversary since the collapse and the troubles of several regional banks. We're talking about Silicon Valley Bank, Signature Bank, First Republic, and why we've heard a lot of senior execs in the banking sector talk about the value of being boring.
Look, I think banking is a little bit unique at the moment because we're in this uncertain period. You know, it's a function of ending regulation. You know, the impact of interest rates and when the Fed skin ease or not eyes, So it's a little bit different. I think the economy is kind of what you read about. It
feels pretty healthy. It's slowing at the margin from a rapid base labor's good, you know it, At least inside of P and C. We're largely on the same age with hir Paul on his recent comments.
What can you tell us about your customers right now? And I asked because we had a really interesting conversation with the President's CEO of Citizens Bank of edmund. I mean, this is a tiny bank in Oklahoma, one physical branch and they have an online business with a thousand customers, So I mean we're talking tiny. But Jill Castilla told us yesterday that she's never seen a better environment for her customers. Things are really really good right now.
It's Jill's actually a good friend's She's not wrong.
You know.
On the corporate side, there's areas of weakness, but there's a lot of areas of strength, particularly as we kind of lean into manufacturing and on shoring. Again. The consumer, yeah, varies by income level. We've obviously seen basic wages increase a lot, particularly at the low level, but at the same time, we've seen the prices of their staple goods increase more compounded through time than and their wages have, even though in many instances wages of double.
So you know it varies well, and you know we kicked off here, you know, Bill getting into you that one year essentially a little bit more than one year since Silicon Valley Bank and the collapse of it. Do you feel like we're out of that environment? And I think one thing we have learned is right that not every bank, not every regional, is the same and in terms of their exposure.
But we're still kind of a little.
Concerned about commercial real estate, not sure that we've gotten through that. So when it comes to concerns within some of the banking sector, do you think that we could see more troubles still depending on their exposures.
At the margin, probably in smaller banks, most of which you will never have heard of. I think, first of all, as you know, I don't particularly like the term regional. It's not very descriptive of anything anymore, particularly in a digital age.
But I'm not going to call you a super regional, which people call you sometimes.
I don't know what to word national. But I know, I know you are in that campaign in the second but you know practically and you see the same numbers I do. Is banks get smaller, they tend to have
a higher concentration of real estate. Their concentration of real estate tends to be more fixed rate, medium term in length and B and C properties, you know, so permanent financing on older B and C properties, which is kind of the area that's going to get hit the most in a higher rate environment with you know, increased office vacancies.
But it's not a systemic issue, certainly for the for the banking industry, not for any of the names you will otherwise know, and we'll make our way through it.
Well, let's talk more broadly, just about about real estate and talk to us a little bit about your own exposure to real estate and commercial real estate. How can you characterize that for us?
You know, look, it's a small percentage of our total loans. That not a big percentage of our capital.
We have, you know, plus or.
Minus eight and a half billion, I guess in total what you would define his office. And that is where all the spotlight is starting to shine on multi family. But we're not seeing stress and multi family at the moment, notwithstanding you know, news that you might see out of New York and affordable in other places, generic multifamilies do and just fine. But inside of office, you know, say
we have that eight and a half billion. There's there's about four and a half billion to five billion that is multi tenant, and that's where the problem is and we expect problems there and we're reserved quite a high level against it. Thus far as we've cycled through, you know, these projects that going on performing, we've actually been conservative and what we've been reserving, so we feel okay about it.
We're heavily reserved today. It's gonna be you know, most of our stuff comes due over the next year, so you know, it's kind of project based. They come online, so we're gonna we're going to know the answer to this pretty quickly.
I suspect interesting.
Hey, listen, we also said that boring is something that you guys are tapping into. We've got a great chart that we can share with those who are watching right now that our producer Elizabeth is going to share out with everybody. But it talks about bank management, not just your own, but others using boring on calls this year, quarterly update calls and earnings calls.
It is up a lot.
Boring not a bad thing. And you guys have an advertising campaign that you are stressing that we do.
I mean I'll make a couple of points. I think if you look back in history, I've talked about our bank and banking in general was kind of three yards in a cloud of dust. And you grow, you know, with GDP and if and if you're good at it, you can outpace that. But we are, by our very nature, as in industry, when you see outliers so that there tends to be something going on underneath that. And and when we think about you know, we use the word boring.
I don't necessarily like to think of myself as an important person, But I didn't mean banking auto be I get it, but boring. You know, banking shouldn't be drama for our clients. It ought to be predictable, consistent. Stuff works. They know their money's safe. They don't have to read about us in the headlines. Right. That's who we are. That's how we define ourselves.
You know.
We we to the core of this company, to the very best of our ability. We try to do right by all of our constituents every day, and when we screw it up, we fix it.
Bill.
We're going to leave it on that note, but I hope we can get you back here real soon. Build Demchech, He's CEO at pn C Bank. Joining us from Pittsburgh.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business Ad. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty.
We are living in an era of contrasts financially, politically, socially globally. For example, here in the US, feelings of financial insecurity among Americans have reached their highest point in at least a decade. That's according to Northwestern Mutual's annual Planning and Progress Survey. At the same time, household wealth in the US increased to a record last year as investors reaped the benefits of a surging stock market and higher home values.
Our next guest looks at these contrasts and at the crises that the world has dealt with in the recent past, from the Great Financial Crisis to the pandemic and more. She even has a take on Boeing, which was in the news a lot this past week as it announced a major overhaul in the Sea, including CEO Dave Calhoun stepping down by the end of the year.
We're talking about journalist and author Grace Blakely, who is the author of several books, including one on the Great Financial Crisis, another on the pandemic. Her new book is Vulture Capitalism, Corporate Crimes, Backdoor Bailouts, and the Death of Freedom. She joining us from the UK and began our conversation talking about crisis and capitalism.
Yeah, thank you so much for having me on the show.
So, really, what I'm looking at in the book, as you say, of that, I use the lens of crises to show, really expose the way that capitalism really works. Because I think that we have this idea in our heads of the economic system in which we live as kind of meaning free markets and democracy, right, that we live in these kind of free market economies and if there are problems within the market, then it's up to
the government to kind of put things right. And what I show in the book is that actually capitalism most of the time doesn't mean free markets. It means concentrated monopolistic power.
I don't think we're free at r do you.
I really don't know.
And part of the problem is that governments don't really act as a check on corporate power. Most of the time they reinforce the power of big businesses. The big example at the moment is Boeing. So Boeing's obviously been through this horrendous time, loads of corporate scandals, massive cover ups over the issues that have been besetting its claims, and it's one of the biggest recipients of corporate welfare in the US. It gets tax subsidies, it gets tax breaks,
and it's got loads of those of government contracts. It got a big bailout during the pandemic, even after the seven three seven MAX disasters.
I will point out, grace that Airbus, the European rival to Boeing, it is a duopoly. I think it's fair to say also also does get some of those same that same favorable treatment. It's been the subject of wto issues. Would you say that that Airbus has the same issue that Boeing does, would you characterize it the same way issues?
Definitely?
Yeah, yeah, totally.
So.
I mean I look at this actually, how these two aerospace manufacturers have become so deeply into woven with the US state on the one hand, and the European Union and various states within that on the other hand, and Airbus has also been embroiled in corruption scandals. So, you know, these two giant firms, as you say, in this duoballistic market structure, with Boeing obviously having dealt with some serious
safety failings air Bus dealing with some corruption scandals. It kind of shows that this line between states and markets isn't really as clear as we'd.
Like to think.
It's interesting, you know, where we are often talking about our data and data privacy and control of our own data when it comes to the social media world, whether it's TikTok, whether it's other social media companies, and how our own data, which is very valuable and has made some very large market cap companies out there and made a lot of companies, if you will, very wealthy in
the process. It's interesting though, that this idea of you know, kind of taking back our economy is something that you are digging into. I mean, do you not like capitalism at all? Do you think it's all bad?
Well, to be clear to your listeners, I am a socialist, so I'll put that to the early I know, I know, it's kind of a bit more of a dirty word in the US, that is in the UK. But I think even if you're not a socialist or even a progressive, my analysis is still relevant because it's something that you know, libertarians, for example, have been saying in the US for a very long time. It's that we don't have real capsism, we have chromy capitalism.
Right.
It's a kind of perversion of a free market system. And what I show in the book, using loads of historical examples, is actually this has kind of always been the case. So it's always been the case that big businesses have worked with and through governments basically to get their way all the way back.
Think of the Robert Barry It's right, or going back yet.
Further, well, Grace, I think critics might say, Okay, I understand the criticisms that you have of capitalism, but show me a better system out there. Can you show us a better system?
Yeah?
So the third part of my book is really dedicated to thinking about alternatives, and I actually start at the grassroots and community level, because I mean, if you think about it, logically, there's this fusion of public and private power in the economy. You can't just rely on the state to do things to kind of contain what's going on the economy. So what is the alternative. You have to build people power. You have to build power from
the ground up. So that means making sure that workers are able to organize within their organizations, but also have a voice within how those organizations are run. You know, when you have more democratic processes within corporations, like you know, workers on boards in Germany, for example, they actually perform a lot better and the whole system is fairer. But I also look at a lot of examples of like communities organizing in their local area to build a kind
of fairer local economy. So we've got this idea of community wealth building. There are examples of this in the UK, added the US and really like you know, downtrodden places like Detroit for example, where local groups have come together and they've built cooperatives, they've built community energy companies, they build community banks, and they've started to say, how can we make our economy work for us instead of the big businesses and actually politicians.
I got to say, Grace, Tim and I are having conversations in the break about your book, and you're thinking, you said, I'm a socialist.
You are a socialist.
I'm not.
And we're talking a lot about capitalism. And in your book, like early on in the introduction, you talk specifically about capitalism and this balance between markets and planning, and that the planning part of the equation is really important, right, how it's being executed, whose interests.
It is serving?
And I mean, is this where kind of capitalism has gotten into trouble? There are companies out there that are great for their workers. Provide pension still great, healthcare great, this great that, Like, where did the disconnect happen? In your view that things kind of was more in the favor maybe of owners or shareholders or senior executive versus a lot of the folks.
That are actually on the line doing a lot of the work.
Well, we know when this big shift happened because we saw it in the inequality statistics, in the wealth that was being froud at the top of the economy, and the size of the financial sector, in things like share buybacks and dividends. All of these things started booming in the nineteen eighties when you had this big deregulation of the economy or should I say reregulation of the economy.
I think there's this sense that the changes that were brought in in the nineteen eighties, so things like privatization changing to regulation, cut, tax cuts, et cetera. There's this idea that that was about shrinking the states and boosting the power of the market, and in fact, what you saw was not the state becoming smaller. It was just the state becoming smaller for some people, generally workers, and very very big for the kind of the corporate class
and the financial class as well. Obvious manifestation of this was of course the massive bailouts of the banking crisis, but you saw this all throughout the pandemic as well. I did some research just looking into the astonishing levels of actually corruption I don't think there's another word for it.
That characterized some of the stimulus packages in the US and also in other parts of the world, where you had you know, government funding going to firms that were owned by congress people, and then those firms donating tons of money to the re election campaigns of those congress people. So you know, this idea that the changes that we had that led to you know, rising in equality and you know, this big shift empower in the economy.
But that was all legitimate that was to be.
Sure, to be sure, and to be fair, and there right during the pandemic, different from many would argue what happened in the Great Financial Crisis where the money went straight to companies versus Main Street. Right, we know a lot of people losing homes and so on and so forth weren't getting the assistance that the banks were getting and other companies were getting, if you will, during the pandemic, money did go though to main Street. We still talk
about it. You know that that support has stayed with a lot of individuals and households for years coming off the pandemic. So, to be fair, individuals also got it as well.
Well, yes, but a lot of that just went straight through to paying back debt so ended up with the banks or paying rent, so it ended up with landlords. And actually there's this a really interesting case study of a couple of big corporate landlords in the US that received tons of government funding throughout the pandemic and were told to kind of enforce this eviction is moralorium that
was supposed to be implemented. And there's this fascinating example of this corporate landlord that I look at in the book that basically used the uncertainty around the pandemic to scare people out of rental accommodation, basically telling their tenants that the evictions moreprium wasn't being enforced and they would be kicked out if they didn't leave volunteer at the same time as receiving government funding, which I think was really to.
Horrifying Chris, It's so interesting to hear you, to hear you speak, and also to seek in the book. I think politically, at least here in the US, you wouldn't necessarily be surprised to hear former President Trump bring up some of these points at Rows and indeed this idea of populism that has caught on here in the United States over the last eight years or so in response
to what we saw after the Great Financial Crisis. Talk a little bit about the then diagram and the sort of the strange bedfellows one could argue with socialism and the way that you describe it, and then also with populism.
This is kind of why I wrote the book, because people like Donald Trump succeed when the average person feels really, really powerless, and you see this in the UK as well. You know, extremist politicians doing well. And when you ask people why they vote for these people, it's basically them saying, I don't have any control over my life. The system is rigged, so they feel powerless, and then they project their sense of political agency onto these strong figures that
say I'm going to burn the whole system down. Most of the time, those strong figures, those anti establishment figures, come very much from within the establishment, and you know, people like Trump says I'm going to drain the swamp and then goes in and delivers this massive package of tax cuts that massively benefits big corporations and big businesses and does very little actually for the average American.
But this anger that bubbles up.
Beneath the surface of our very unequal economies ends up feeding into the rise of the far right and the rise of a kind of extremist populist politicians. If we aren't able to identify it and provide an explanation that isn't just conspiracy theories, and you know, this is such a big thing that post pandemic. If it's like conspiracy theories about who's running the world economy, and you know, like the World's Economic Forum and the great reset and things.
And I think all of that feeds into this sense of like we're powerless. We know that lots of stuff is going on up there in the plows, but we don't feel that.
We can control it well.
And I feel like sortays like follow the money, like whenever there's money involved. It feels like that's how the gaps in many ways can often widen grace. We unfortunately only have about a minute left here, So what's the way forward in your view? If we don't want to become socialists and continue to operate under a capitalistic society?
What's the way forward in your view? And got about a minute left here? So I think the key thing here is accountability.
Capitalism is supposed to have markets to enforce accountability, to make sure that corporations can't get too big, that the rich can't get too rich, because there are all these checks and balances, but we don't really have those right now. So the question is how do we enforce accountability? And that has to come through real democracy, democracy and our corporations, democracy in our communities, democracy in our governments everywhere throughout the and that's really what I want to see.
But if they don't want it, how do you get it? Those are the folks in power.
As I remember coming off of the pandemic and George Floyd about people who said, I don't have a seat at the table to help change things, and these were black individuals, people who don't have a seat at the table.
How do you change things?
Again?
Just about thirty seconds forgive me.
You've got to make trouble. They're not going to give power away. You have to build power from the ground up. Whether you're a unionist and you want to see at the table, you've got to organize in your workplace, if in your community you're being exploited or oppressed. Again, we've got to organize. We've got to try and build alternative structures and again not just protests, but really seeing ways that communities can come together and say we're going to change the way our economy works.
I feel like another relevant conversation for our times, Grace step by again, I'd love to continue with you, guys, with you specifically rather this conversation. Grace Blakeley her new book Vulture Capitalism, corporate Crimes, backdoor bailouts, and the Death of Freedom.
Really interesting stuff, right, Yeah, you're.
Ready to be a socialist.
I'm ready to talk more to Grece.
I'm ready to.
Talk more to Grace too. All right, this is Bloomberg.
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.
Plenty ahead in our second hour of the weekend edition to Bloomberg Business Week, including how the king of sitcoms went from writing a TV show about young scientists to helping students become scientists. We'll check in with TV writer, producer and director Chuck Lori.
This was fun.
This was a lot of fun.
Plus the sports executive turned a theme park and experiential CEO on the theme park business and playing to consumers.
And a great story from his daughter about when they had to move. But you'll just have to wait and listen.
All right.
In pursuits, it's the opposite of quiet luxury, but with this much speed, you may not care. What's it like to drive the three hundred and forty five thousand dollar McLaren seven fifty s Spider or hang out at a Saudi Arabian oasis and archaeological site turned master plan luxury tourism outpost our Hannah Elliott did both. She stops buying just a bit.
Hey, first up this hour, Carol, have you been to Lego Land of her Op?
Kay?
What about the London Eye, No, it's not too late.
Yeah.
Now, well, these are just a couple of the entertainment destinations owned by Merlin Entertainments, formerly a publicly traded company but now with owners including Blackstone and the Canadian Pension Plan Investment Board.
Yeah, they've got their hands and a lot of things and a great read on what we are all up to. It is a British entertainment company parks and attractions in twenty three countries around the world, serving more than sixty million guests per year. Scott O'Neil is the CEO at Merlin Entertainments. He was also previously president of Madison Square Garden Sports, owner of the Knicks, Rangers, Liberty and more.
Also the former CEO of Harris Blitzer Sports and Entertainments, which includes the Philadelphia seventy six Ers, New Jersey Devils and more. He's seen a lot in the world of sports. We began by asking about how it was to relocate to the UK.
You know, I'm pretty happy moved to the UK. It's been a big adjustment.
Do you like that? I do.
I didn't anticipate how challenging the move would be.
I've grown up in this little bubble between New York, Philly, Connecticut, New Jersey, and.
What was challenging the weather or just different.
I just think, well, I have my youngest is seventeen years old, So taking a seventeen year old out, I had just have to do this one quick story. Yeah is you know, we're having that heart to heart, that father daughter connect conversation, and she she holds up her finger and points in my chest.
And says, dad, let me get this straight. Your career is more important than my happiness. And she turns and just walks out of the room. And I was like, but but I love you.
I mean I love you.
Honey By lines up. So that transition was harder than we thought.
But she's happy now in London with you.
She's in London with me.
She won an international basketball championship, gold medal, scholar congratulations. So she's doing great. She's thriving. My wife's happy, so yes, so life ski.
Yeah, you'll can you imagine?
I can tell you it very much. Boom boom, She'll never forgive you. But no, okay, no, yeah, that's okay. You know, your business is all about leisure and discretionary spending, and you've got a great view around the world because you're in what more than twenty countries at this.
Point, twenty three countries.
So just give us an idea of how things are going when it comes to that spending and doing stuff.
Yeah, well, we're pretty fortunate.
For those of us who had children in COVID, it was a little close and we couldn't leave the house. And when COVID ended, we got on planes as quickly as we could. But the one thing we were searching for was connection and meaning and memories. And we moved away from the economy of things the economy of experiences, and so we have a lot of tailwinds. It is a look, it's it's we go from Malaysia, Korea, Japan, China all the way to the US and everything in between.
H and so we get to see quite a bit. So whenever people are like, how's business, I'm like, so, where is it?
Back?
China? Is tougher than we anticipated.
We anticipated even this year of recovery a little bit quicker than it than it's come.
So people are doing it or is it just a fraction of what it was.
It's a slower Yeah, yeah, Domestic tourism slower. Their international tourism coming out of China is a bit more than we thought. US is still fine. The US is great, and the US consumer we're wonderful people.
You know, spend money.
We do love to spend money, and we love experiences and memories and fun things.
So does that mean we're not pre pandemic for you guys, We're over.
Pre pandemic, over pre both in terms of revenue and volume. And the UK is a little schizophrenic, very good for internationals last year. This year it's a little slower. Domestics is slow and Europe slow. Now remember we had bizarre weather last year. Okay, so you know most of our peers Disney and Universal and I know you've never most people listening maybe haven't heard of Merlin Entertainments before, but we are the number two theme parks in the tracks this business indie world.
Does that frustrate you that?
Like if you think about so many of those names, Lego Land, like we just went through them. I mean, they're well known, kids are great, but that the recognition it's coming.
Okay, it is coming like a great chain.
But it doesn't even matter if these brands aren't necessarily connected to one another. People know that Madame Tusodes is owned by the same folks who on Legoland.
I think it does.
I think when you talk about not to be too technical, but we are a bloomberg, you know, when you talk about ibadah meeting multiple, when you think about how do you grow your multiple? One of the things that that I think matters to Disney is their brand, you know. And I think one of the things that matters to
Universal are the licensed partners, the brand ip partners. And you look at ours green you know, you take you know personally, I take Legoland and Peppa and Madame Tussaus and I put them up against there, so I and and we're dragging behind them. Now, we're we're way ahead of our the US regional theme parks like the Six Flags and the Sea Worlds and the Cedar Fairs in terms of multiple, but I think we've got to we have a journey ahead of us to to map that the brand and the experience to where.
We are the movie or something like like, how do you know? I'm serious, like there.
Could be some content around it, right, So we have a lot of different brands and so so we have to take a portfolio approach for sure.
But yeah I did no I the Mattel CEO talk about you know, it was amazing.
He's amazing, amazing executive.
For sure, Just like how you kind of you know, capitalize it all of that.
Yeah, well, well the whole host of things. You know, I am following a founder, Sir Nick Varney. He's knighted, and I thought to myself, could that be me someday?
So like when you're doing I'll say, yes, I'm taking the job.
But it's sir, I somehow don't happened.
Maybe she'll have to stay at school and take a test when during the ceremony that could happen. Let's not get ahead of her.
So following a founder is there's so many wonderful things. And I come from a family of founders, and my brothers and sisters of all of family, companies will only sell out and out of the five of us, and and and the magic the stuff.
You can't see this on the radio, but the feel of the business that you have as a founder thirty or fashion bam.
So so there's so many wonderful things and they feel the business so well, and a lot of this stuff becomes intuitive and that's hard. And they have like this father or motherly like figure, you know, like a larger than life figure, and sort of come in after that their whole host of challenges.
Culturally, et cetera.
With leadership, but there's also usually these gaping holes of opportunity. And because the founders have such rhythm and intuitiveness in the business, you have things that I think can really underpin future success, like digitizing the business, like driving data, like dynamic pricing, like the stuff that I've my whole life have made made a business of. Come into a new business and you think, you know, my eyes are as big as saftware as I'm thinking.
Okay, there's enough opportunity.
When you think about the different types of products that you offer, the different attractions that you have, what's growing and what's struggling right now, Like where's the opportunity for growth?
Yeah, Well, in Lego Land, that's about forty percent of our business Lego Land Resorts. There are ten of them, three in the US, Korea, Japan, Malaysia, Dubai, Germany, Denmark, London, et cetera. We're building a one in Shanghai in China as well. It's a really good business and we have to invest in making premium. It's like, sorry, but that brand is wonderful well recognition.
You know, and you know Neil's who's the CEO.
They're just understands the brand and how to grow it, and their partnerships are smart and they're wonderful people. They know how to do deals and drive deals and they're one of our largest investors and so so that's an unbelievable opportunity. But we have to continue to invest, invest, invest, how do you make that more premium. That's what we're finding is like there is a flight to quality. Premium is going to matter. Our resort theme parks business a
lot more complicated. It's kind of like if you can imagine a six flags dropped in Europe, that's.
What we have in Europe.
And I'm of the school of bigger is better. So mega resorts will matter and regional ones will really struggle. And so we're on the effort of that, and then where I think there's the max growth from us. We had over twenty percent growth in this segment. We call it gateway and London is the best example. We have two what we call must see, must do We call them anchor attractions, the London Eye by the Way and Madame Tuo Sad's the original, and then we have three
other attractions. One out of every four tourists into London come to one of our attractions, and forty percent of them come to at least two. So that's what I call like cluster penetration and building those in the ten most important tourist cities in the world is where I think our growth.
Is going to come from.
Just got a minute left, man, I wish we had ten more money too. I got to ask you, though, with your sports background, do you miss it being actively involved in like running it, you know, a team and so and so forth.
There are elements I love and miss. It's mostly about the people.
Yeah, you know, in terms of when you when you hit a certain level at those jobs, it becomes a different type of job. And if you compare that type of job to this one, it's not even close. I mean I've got people purpose and scale, which is what I'm looking for. I'm like learning every day. I was in that business for so long. I knew it and I want to stretch a bit.
Thirty seconds left. Are you going to add to go back to your current job? Is there stuff to add to the portfolio?
Oh?
Yes, so acquisitions will be coming.
Yes.
We just bought the Orlando I yeah, in icon Park. So if you're down in Orlando swing By, it's a great respite from the difficulty sometimes of grinding through a resort. We have a Lego Land resort down there as well. But yes, more to come and that's going to be an anchor for O Orlando Cluster.
Good to know, Good to know, Come back soon.
Come see me at my resorts. That daughter, I will agree, she will actually love it, but it might be a longer show. Thanks guys.
Scott O'Neil, thank you so much, Chief executive officer of Merlin Entertainments. Joining us right here in our Bloomberg Interactive Brokers studio.
You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven thirty.
Oh, you know, persons in a hot tense state. The nearly fourteen million.
Years ago expansion started waiting, the years began to cool, theandros began to Julieandrew Calls developed tools.
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Right, everybody, you know it well.
It aired for twelve seasons September of seven to May of twenty nineteen.
We're talking to him about The Big Bang Theory.
Yeah.
Well, he's the co creator of the head television comedy The Big Bang Theory. It's about young scientists in Southern California. As if I needed to tell any of you, the world knows and now, well, he wants to help young scientists in Southern California even more than he had earlier.
Yeah, he does through his family foundation. Chuck Luri, the TV writer, director, producer, is pledging twenty four point five million to the University of California, Los Angeles to help more low income students study science and technology. This adds to a program he began back in twenty fifteen, and this donation will double the number of undergraduate scholarship recipients with financial needs to eighty each year.
Tim This is according to UCLA.
Well.
Janet Lauren is Bloomberg News higher education finance reporter. She earlier this month wrote about Lorie's latest donation. She's with us here in the Bloomberg Interactive Brokers studio. Also joining us is Chuck Laurie, who not only co created The Big Bang Theory, but also created or co created and produced Grace under Fire, Sybil Darman, and Greg two and a Half Men, just to name a few. Chuck joins us from Los Angeles. Chuck, I do want to start
with you because you've done a lot of philanthropy. You've supported STEM education in public schools before this latest donation. Give us your thinking behind the importance of STEM, especially when it comes to a world where you know we're talking about AI potentially doing a lot of the work for us.
Well, when this all began, AI was not part of the conversation, so I really speak to how that changes things. But my thinking early on was very simple. We had come to understand from various news reports that children here and in England because they were watching The Big Bank Theory or showing a spike of interest in stemated stem
related fields at high school and college levels. And that was remarkable because that certainly wasn't the original goal for the Big Bang Theory to change the trajectory of a young person's life. It was happening.
So I have to admit, as Chuck and I talked before, my family and I are huge fans of Young Sheldon. Me too, I had not watched The Big Bang Theory. We actually was introduced to the characters from Young Sheldon. So I have only maybe watched one episode of The Big Bank Theory. So all this is new to me.
But I do know a lot about college financing, and one thing Chuck had said to me when we spoke earlier about the lack of finances is something he understood extremely well because he did not finish college and carried around student loans of two thousand dollars for fifteen years, So he.
Understands after fifteen years two thousand was about eight or no.
Wow, Yes, that's crime the principle of a crude interest, But that's a good detail that a lot of people out there thinking about college they don't think about and what I found remarkableut this program is not only does it fun college, but it gives mentorship, which is something
that is hard hard to get through college without. Could you talk a little bit about why that it was important and why is it important for you to see, you know, kids college graduate college in a reasonable amount of time, such as four years, and how difficult that can be.
Well, one of the original goals that I had, for better or worse, was to keep things local so that I could participate. And local for us here in Los Angeles was UCLA, and that was absolutely aided by the fact that our science consultant on the Big Bang theory, doctor David Salzburg, was a professor of physics at UCLA, and so we already had entree to the university through
David and and wanting to participate and give back. It seemed it made sense to do so so by focusing on young people who were pursuing or wanted to pursue a STEM field at UCLA, and also because it was local because it was UCLA because of David. The mentorship process was also part of this. We weren't just handing out money and saying good luck. For a lot of the kids, they were the first generation in their families to get a college education, and so they're being thrown
into a thrown onto a speeding train. You right out of the gate mentorship is important.
Now the information about the scholarship says there's opportunities for graduate school funding. We all know how expensive medical school could be. Can you talk about was that important to you to continue students onto this trajectory?
Not initially. This thing grew over a period of almost ten years now, UH, and and when we realized that the success rate we were having with the kids going through undergraduate programs UH was phenomenal. And and that's when we decided to expand the program into graduate school. And again we were initially trying to keep the graduate school in in in the UH, in the California system so that we could again stay stay close to it and participate.
Well, and I'm curious to check you know, you guys really worked hard to get the science right on the show, right, I mean that was obviously a priority. Talking about David did Well talk to us about being in that environment for you and maybe how that also shaped your thinking about where you wanted to commit money towards to help others, you know, pursue potentially you know, degrees in the STEM world.
It begins with the show. The show is about UH, a group of somewhat alienated, disenfranchised geniuses and UH, you know, struggling to make their way in the world, but clinging to one another as the community basically almost a family unit in the way they treated one another, both good and bad. And so it made sense from the beginning that we we we we focus on STEM UH and UH for a couple of very practical reasons. One is the likelihood that you graduate in one of these fields
you can get employed. The same can't be said with a BA in H in the humanities or communication. I think I lost you guys.
At our liberal arts degrees exactly.
Disappointing, But those degrees don't necessarily create a U. I get I'm losing this thing here.
Don't worry you, hear you? Yeah, Yeah, we got you. Don't worry hey, yeah, go ahead.
So there it is.
Go ahead.
So I, you know, very practically, I wanted to. I wanted the program to also, you know, help help young people who are going through you know, the journey of education to end with employability. Yeah, and and uh that may have been a little bit, but it seemed it seemed like, Uh, wouldn't it be great to graduate without debt and have a job for you?
Yeah?
Right, yes, yes, yes, and yes right? What did you We have about a minute and a half and then we're going to take a break and then come back and do more. But what did you study?
Drugs?
No, I'm not sure I have a follow up. Now, what did you really academically?
I may have had, It's a dim memory. I was talking about a long time ago. There was also rock and roll and girl, but it was I think I might have been a political science major. I don't know if I ever mentioned it to anybody, But yeah, no, also a degree also, as they used to say, that degree and a token could get you right on the subway.
A couple of things we want to get to, but I do want to ask you about it really stung me what you said.
And Jada put in.
Her story where she wrote about your donation to UCLA that you carried a student learn of about two thousand for fifteen years, and you said it it grew to eight thousand. The cost of education and this idea of you know, kids coming out of school and not having any debt that's increasingly becoming a thing of the way past.
I don't know any thoughts.
About it as you try to help others who are pursuing education and in STEM feels and just thinking about kind of a younger generation, how we do it better, because it just feels like it's getting out of control and not getting better.
I don't have an answer to that.
I just know that.
When State of New York caught up.
With me, they didn't catch up with me.
I was very young and naive, and I don't think I understood my Social Security number was a target. But you know, I spent probably eight or nine years sending the State of New York fifty dollars a month, and
that's how I got out from under it. But I know, I don't have a solution for this situation other than what we're doing, which is especially you know, seeking out kids that are not only exceptionally talented in their scholastic efforts, but high financial need, backgrounds underrepresented kids, and where the money can be puts a good use in allowing them to get that STEM education and walk out of UCLA with no debt. Is that seems like a goal worth pursuing major gift.
Yeah, Hey, Chuck, I want to take a step back and just ask you about your broader philanthropy, because this is just one part of it, the big bank theory, UCLA scholars. You've got the Venice Family Clinic, Chuck, Lori Rose Avenue Health and Wellness Center. You're working on some stuff when it comes to food banks and other healthcare related causes, a trust for public land as well in
the greening of schoolyards. Just give us your philosophy when it comes to this type of work, this type of philanthropy, like where do you see the biggest needs?
Well, it began very personally for me. I was very ill when I was a young man, desperately ill. I did not know about free clinics. I did not know where to go. I certainly had no insurance medical insurance, and I was.
I was.
It was a very frightening several years, and I was very fortunate that I managed to recover. But that's that stays with you. If you can't afford to see a doctor and you need a doctor, that's a fear that
I don't wish on anyone. And so that the philanthropy efforts began back in the nineties for me with Venice Family Clinic, which I wish I had actually known about when I was in my early twenties, but the idea that you could see a doctor without having any money in your pocket, I thought it was something I wanted
to participate in. So I've been involved with the Venice Family Clinic for I don't know twenty five twenty six years, and that's expanded to other healthcare opportunities, and so that began, and then and then the STEM. The STEM efforts, as I said before, began really by accident when we found out that inexplicably or explicably the Big Bank theory was encouraging young people to pursue STEM research STEM fields.
Uh and uh.
So the thought was really quite simple, maybe we can help. Yeah, I mean, the original goal in making that show is to make people laugh. It was not to change again to change the trajectory of a young man or young woman's life, but it was doing that. So as long as I was doing that, let's participate. And that's how the scholarship started.
Well, Young Sheldon has really made us laugh.
By the way.
I love, I absolutely love that you're watching Young Sheldon and you haven't watched The Big Bank.
It's a music it's like, it's like a gay but it could be away into the original show that it's spun off from.
But he's a great character, and so is doctor Sturgis. I love Doctor surget.
Wally Wally, Wally Sean. Yeah, we've been so blessed with some of the casting at Begley and while Sean, it's been a terrific experience and.
The university president that depiction seems entirely realistic to me. Well, how did you decide to pivot into young Sheldon and you know he finished college in what three years and the idea of going to East Texas Tech, And how did that all come about? Because it is it is a sort of a realistic path or a young genius like that.
Well, the backstory of Sheldon on The Big Bang Theory was that he graduated college at fourteen or thirteen or fourteen I forget exactly, and then went to cal Tech
to do postgraduate work. And so we had already laid in, you know, the backstory for Sheldon's journey graduating, graduating, high school at the age of eleven, and and uh, you know, in a in an East Texas town where they simply did not have the wherewithal to deal with a genius of that of that of that size, and East Texas Tech we invented in order to in order to keep him,
you know, to keep him. Look, so we can do the show and uh, and for have him ripping through that university as well on his way to cal Tech and ultimately, as we did. If you watch The Big Bank Theory, he does win a Nobel Prize in the in the final up.
We definitely get it.
We're gonna work Chuck on Janet because she's got it. If she likes young Sheldon, she's gonna love The Big Bang Theory.
She's got it. Like the it's like they go together.
It is different.
And you see that the absolute genius of that castle. Jim Parsons playing Sheldon at a later age. It's we had. We had twelve years of absolute fun making that show.
Just got a minute left. Do you have a favorite moment in time considering all that you've worked on and created or co created or what have you? Just got about forty five seconds left here?
Wow, that's a macro question. I know.
Sorry, I'm a kind of gal.
It's kind of hard to pull a favorite moment. There certainly have been moments that that have stuck with me, no one of the I'm not. Rather than specifically answer that question, what I've loved about The Big Bang Theory?
Uh?
And I guess you know we're talking mostly about young elden is And I think why it was attractive to young people, yeah, was if you felt this enfranchised, if you felt you're around the outside looking in, which a lot of people do, and you don't have to be a mensa participant or genius to feel that way. The show represented community, represented like minded souls helping one another, and maybe that's what was at practice to kids watch it.
I think that's a great way to finish up. Listen, Thank you, and it's a great thought. Thank you so much, so appreciate it. Be well, Chuck Lori, TV writer, director, producer, co creator The Big Bang Theory, and of course our Janet Lauren.
Here.
This is Bloomberg.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple card play and ed Bright Auto with a Bloomberg Business app or watch us live on YouTube.
All right, everybody tim to strap in, because we are going for quite a ride, figure relatively, and we're going to kind of live vicariously through Bloomberg Auto communist Hannah Elliots always do.
She gets to do the coolest stuff.
I want to be Hannah when I come back in another lifetime. All right, she drove the three hundred and forty five thousand McLaren seven to fifty s Spider for a day's always Yeah, three hundred and forty five Did I say it right?
I mean, it's not like it matters to us.
It's almost half a million dollars.
That's before tax, by the way.
You know what else she did?
She stopt by the resort in the remote Saudi Arabian desert where Burke is in bikinis mingled. And then there is, of course, the influential YouTuber known as supercar Blondie, who's out now to sell you a car. It's a hypercar that.
Is also looks a lot like Hannah. But we'll get into that in just a moment too. It's all in this week's Pursuits. Editor pursuits. Chris Rousers here in studio along with Bloomberg auto communist Hannah Elliott joining us from La Hannah, welcome, so good to have you here with that Chris.
Chris. First of all, we were trying to figure out where to start because they're all really cool stories. Did you know about supercar Blondie? I always thought that was Hannah, to be quite honest with.
You, Hannah, Hannah is a blondie who doesn't just focus on supercars. She focuses on all kinds of cars. But I did I know about supercar Blondie because we cover the same kind of stuff and Hannah has knows her. But she is a very very influential YouTuber who has
a huge following. Get gets up to two billion views on her contents a month, and she basically test drives and talks about and goes with celebrities to experience supercars, so very very high end cars, these ones that are in the two hundred thousand millions of dollars, and she's just very influential on that field.
So Hannah, come on in here and give us an idea of making the transition. Now supercar Blondie that is from a YouTuber to somebody who actually wants to sell you a very expensive car.
Yeah. I think that's actually the crux of the story. That it's the big question and the big unknown, which is can somebody who has such an enormous social media platform actually translate that into selling. We know that she can get a lot of viewers, a lot of people love her and Alex Hershey is her name, and she's an Australian, is a very smart, very hard working person. So no one's doubting that. The question is will some among those two billion monthly viewers want to buy a
two million dollar Lamborghini that she's going to sell. That remains to be seen if you act. Ask Alex she says absolutely. It's not that they need to reach all of the world's billionaires all at wants to try to sell them a car. But she says with that kind of platform and footprint and access, she can find the right people.
So she's launching this auction site. What is it going to be called and how's it going to work?
So the auction site is called xbs Cars and it's an online auction site that will kind of run like bring a trailer. It's very different because it sells only high end cars. But in terms of live auctions that run for a week or two weeks, and in terms of having people who can comment and everyone can watch the auction taking place, it's very similar.
Let's bring a trailer. I'm not familiar with that, so just give us a little bit of a reference.
John doesn't spend a ton of time on bring a trailer.
Every one car and that's it.
Okay, my dad spends a ton of time on bring a trailer.
So yes, bring a trailer. We have to say, Bring a trailer is really the model that everybody's chasing. It was the first sort of breakout auction platform to prove that people will buy cars online that they have not
even seen in real life, let alone driven. Bring a Trailer was started by Randy Nannenberg in two thousand and seven and it started out slowly, but last year it reported one point four billion dollars in sales, so it's doing great, and it really has been sort of the model that has proved that this sort of thing can be done. Now, no one has done it like SBX cars and tried to do it with only really expensive, really rare hypercars. But yeah, that's what Supercar Blondie is going to attempt.
I love that it comes down to basically supply demand. It's as simple as that she knows where those cars are. That's a huge part of the art auction business, like she knows where all those cars are in the world. And eventually, I think for this business to work, she needs to start doing private sales where she just connects people. All right, we want to get to one story real quickly before we move on to the last one, which
we're all kind of like salivating over. But I just do wonder if ultimately the three hundred and forty five thousand dollar McLaren seven to fifty Spider might ultimately end up on her website at some point you drove it, just give us a quick thought on what that was like.
This is admittedly rare air, so we have to say that McLaren, of course, is one of the most prestigious names in elite motorsport. We've all followed the McLaren F one racing team. McLaren hopes that they're racing team success and notoriety will trickle down into making us want to buy cars like this seven to fifty s Spider. This is the successor to the seven twenty s Spider and looks basically the same. If you're at all familiar with it,
it looks kind of like an alien. It's very swoopy, the cabin is sort of bubble shaped, and of course, like any good supercar, it's got over seven hundred horse power twin turbocharge V eight engine. It can go there to sixty and two point seven seconds. And yeah, it's a type of thing that you know, is like a Ferrari. You can put it, put it on the line against
plenty of offerings from Frari and Lamborghini. To me, it's a little clinical, you know, Mercedes McLaren is known for having a bit of a clinical nature to its cars. But if you really love that sort of robotic precision, the seven to fifty s Spider is a very fun car to drive.
Okay, from McLaren to Saudi Arabia, there is a connection we promise make that can for us.
The connection is I did travel to Saudi Arabia to be a part of our Bloomberg Power Players conference, and this conference was located in Jetta to discuss the growth of motor sport and other sports in Saudi Arabia. Saudi Arabia has invested billions of dollars into promoting tourism and sports. And Zach Brown, the principal of the McLaren f one racing team, joined us for the conference and we were
so happy to have him. And then the Saudi Arabian Grand Prix was also held that same weekend that we had our conference, and I was really happy to go and see the Grand Prix and then also spend some time in other locales in Saudi Arabia, like this hotel in Alula.
So Hannah was going for the Power Players conference Wait for Work for Work she was, well, she was, and we said, Hannah, if you're going to go there, we've got to get you to check out some of these. There's amazing, like very high luxury hotels that some have already opened. Many our about to open in Saudi because this, Hannah said, they've been investing so much in tourism. And so we said, Hannah, let's go check out this Habitas
hotel in Alula. Habitas as a brand which is known for kind of coming out of the burning Men culture. Their first place was in Tulum. Very free spirit hippie does not feel like it fits in Saudi Arabia, which is famously very conservative. And since Hannah was there, we did all the visa stuff. It's difficult to get into Saudi. We said, go check out this hotel. Hannah understands that Habitas vibe, so she was like trainsplanes and automobiles. But she got over there and she checked it.
Out all right. So what was it like, Hannah?
It was amazing. I didn't know what to expect. I had never been to the Middle East, never been to Saudi Arabia, and I had already spent several days in Jetta, which was wonderful but pretty conservative. For instance, the hotel pool where I was staying had separate hours for.
Men and women.
Men and women were not allowed to be at the swimming pool at this same time. So then fast forward, I flew to Medina and then drove four hours into the desert into this old region called Allula and Habitas. The pool is a mixed pool, and it was burkes and bikinis for lack of a.
Better term, seriously, and men and women, which was you can't get anywhere else there.
And I have to say, you know, in Saudi Arabia, alcohol is not allowed anywhere in the country, and that also does apply to this hotel. I didn't know how serious that was. I kind of felt, well, maybe if it's a private hotel and they're calling it, you know, sort of a burning man in the desert, there would be alcohol, but no alcohol at all. But I have to say that did not encroach upon the fun and freedom that Habitas Alula had.
It was.
It was kind of like a boho, chic, luxury hotel that you would find in the Biza.
Maybe is there any question about the success moving forward of this hotel and who it attracts, Like can it pull this off in such a conservative place?
That is the question. When I was there, I did not come into contact with any other Americans. It's very difficult to get to My return trip to La took thirty two hours door to door. The visas are challenging to obtain, it's grueling, and it's expensive, so those are
natural prohibitive barriers to going. You know, Habitas has really positioned these hotels as opportunities to provide jobs for locals, although I have to say when I was there, most of the staff that I encountered were from African countries or from other Arab nations. They were not from Saudi Arabia. I just actually heard from the pr that they're saying twenty nine percent of their staff are local Saudis. They probably need to increase that if they want to really
make an impact in the region. And again, all of this is all of this is funded and part of the Kingdom of Saudi Arabia's effort to really promote tourism. They're not short for money, so there's a lot of money being devoted to this.
And was it it was mostly Saudi families that were there, right, that's cool?
Yes, yes, I can't say for sure. The people there, I had a great experience. The people there were mostly Saudi's, mostly traditional dress. There were a few bikinis from what I think were Europeans from what I can tell, and maybe Australians and then and then me, but mostly Saudi families dressed traditionally having a wonderful time. There were people having birthday parties. It was it was really interesting. So I do hope that it can continue. There's certainly a
lot of effort behind it. And you want to go back, Oh, I really want to go. I recommend anybody. I mean, it's mind blowing. It's the desert itself. I have to say, if we have time. It's very close to Hegra, which is kind of like Petra. If you've heard of the tombs at Petra in Jordan. Hegra is a similar site, and it's a World Heritage site, the first one ever in Saudi Arabia with these ancient tombs. It's really phenomenal to go see.
Well, the pictures in the story are pretty phenomenal as well as are you so listen? Thank you so much, really appreciate it.
That's Bloomberg Pursuits Auto columnist Hannah Elliott and the editor of Pursuits, Chris Rouser. Check out more from Pursuits in the entire BusinessWeek team by heading to Bloomberg dot com.
We all want to go, don't we?
Yeah?
Yeah, sounds amazing.
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Mm hmm