Bloomberg Businessweek Weekend - September 29th, 2023

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

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Investors still mulling over the higher for longer US interest rate world meantime, the FTC not mulling over, but rather pulling the trigger and suing Amazon in a long anticipated antitrust case, accusing the e commerce giant of monopolizing online marketplace services. Startup investor Steve Caase, co founder of AOL, of course, weighs in and explains why targeting some of big tech makes sense.

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

Unbelievable. All of that to come and we begin with the big picture money markets and the macro environment, and how we assess the worries of investors and traders, especially when it comes to sticky inflation and a federal reserve that has hell bent on getting inflation back to its two percent target. These worries continue to play out in a trade where stocks move lower and US treasury yields higher. With us as someone who thinks about it all and connects the dots.

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

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

To be here.

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

Well, you know, there's a lot coming at investors. But what's been so strike to me about the past couple of weeks is the absence of emotion We've watched the sell off in bonds, we've watched the sell off in stocks, We've watched oil prices rise, and there's this remarkable at ease that investors seem to have, even though markets have gotten over sold er in the case of oil, over bought, and it's really inconsistent to me with what prices would suggest.

So what do you attribute that to.

I am a little worried about real complacence behavior on the part of investors, because there's no sense of that things could get worse, whether in terms of the economy itself or higher interest rates or inflation. There's almost this sense of, Okay, this is what it is. Until the economy gives us signals that it's weakening, or until the consumer rolls over, we're going to count on some sort of miraculous landing of this.

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

I worry about those at the low end where the cash ran out a long time ago. I think it's interesting that folks are only taking note of it now, But for those at the bottom, this is a phenomenon that's now more than a year old, and so you're

Are you comfortable with some of the data points that are out there, including the labor statistics here in the United States?

You know, I'm comfortable with the statistics. But what is clear even with these statistics is that jobs are not equating to confidence, and that you've seen no material improvement in mood even though jobs have come back and people are working more. And so I think we do ourselves a disservice to think that having a job is going to boost confidence.

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

On, you know, buying a home right insurance is super expensive.

Now cool, Like everything seems super expensive right now. Yeah, and then we have jobs and we feel pretty confident.

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

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

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

Talk about this all the time.

We talk about the small shops so forma, and this is an indication of declining confidence and declining success for small businesses. And so I worry that investors, by pouring money into the Thoroughbreds, into the Amazon and Apple and Google and Microsoft, are being misled by the fact that things are troublesome below the surface the other four hundred and ninety five companies.

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

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

You're done.

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

I check periodically, but you're right, it's like a reality check of like, it's again a reminder not everything goes up, but when we do go like, is there something though significant when we do make those references back to two thousand and seven, two thousand and eight, which was such a significant time in this country as well as certainly within the financial market universe, is it are we setting up for a period another period that's as rough as some of the stuff we went through there in terms

So I think what's been so interesting in the past two years is we're seeing a concurrent unwinding of extreme

So where's the money going.

It's going into money market funds over.

Five percent and a money market fund you've just said it there until you know, and you're earning more than ten year yields today.

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

But I mean at a certain point, bonds are going to become attractive to some of these people, right.

So that's the question. If bonds were a bubble, if negative interest rates were a sign of extreme sentiment, then we're likely to see that rising rates. Falling prices don't draw a crowd. That we've seen everybody who is going to buy a bond did, and much as you see when stock market bubbles unwined, lower price doesn't draw anybody. You get the occasional bounces, but it's a perpetual unwinding machine.

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

We don't.

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

The cash on the side of the sideline, and.

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

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

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

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

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

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

Well, one in tricking possibility is that House Modern it's conductive rebellion. Put a couple of stories on the Boomberg about that. They have some procedural mechanisms on's called the discharge petition where they could within about nine legislative days, force a vote against speakers wishes on that Senate bill or on their own rival plan, which would actually extend

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

Yeah.

So I often say that policy makers follow mood, and this is policy makers in me here now mode. The only thing they care about is their individual survival. And with mood falling is indicated by the markets, that's going to make getting a resolution together very difficult until there is ultimately capitulation where some group is led to believe

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

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

But is it yawning because they know it's going to get resolved and it's happened before.

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

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

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

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

Yeah.

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

What happens when or if that happens, Peter.

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

I feel like you need to occupy Wall Street or occupy corporate America.

You know to what I mean, maybe that was the Tea Party, or maybe it was the rise of Trump in twenty sixteen.

But I think that and Eric may want to weigh in on this, is that the environment today is uniting.

Well, uniting everybody it goes.

With similar vulnerabilities.

Well, Eric, we've got only about twenty five seconds. What do you say to that about unifying people?

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

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

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App, or watch us live on YouTube.

D Cass chairman and CEO at his investment from Revolution, co founder of course of AOL which at its peak nearly half of Internet users in the US used AOL, so really just game changer, and he's back with us on zoom from Washington, DC. Steve, it is great to have you back here with Tim and myself on Bloomberg Business Week. You know, it's been a year since you published Rise of the Rest, How entrepreneurs and surprising places are building the New American Dream. It's now out in paperback.

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

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

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

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

There was a problem, no, no question. Even though it's called Silicon Valley Bank or SVB, actually bank startups all over the country, not just in Silicon Valley, and about half of the startups, about half of the venture firms in America or back by banks by SVB. So it's been very unhelpful. A number of firms are trying to fill the void and offer different products and services to both the venture funds and to the entrepreneurs, but it's certainly been a negative this year.

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

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

Good that they've got a big.

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

Did it never feel like to you that AOL were days of founding and running AOL was so big that it could have faced more antitrust scrutiny.

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

So how do we do that?

Though?

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

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

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

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

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

Thank you?

Okay, if you well how entrepreneurs and surprising places are building the new American dream. Of course, the case.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.

Boys, all right, this next story safe to say we're trying to figure out exactly who may be the bad actors. Here, you can say bad boys, bad boys. Step back first. Google, as you know, maintains one of the world's most comprehensive repositories of location information. It can often estimate a user's we'reabouts to within several feet. The company mainly gathers this information to sell advertising, but in recent years police started dipping into it to further their investigations.

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

There's a lot of information there for them to go over. To better understand this process and its consequences, we dive into this week's Bloomberg Business Week cover story with our Bloomberg News tech team of Julia Love and Davey Alba, as well as the editor of the magazine, jel Weber. Jill's here in our Bloomberg Interactor Brokers Studio, Julia out there in our San Francisco bureau and Davy on the

Julia, Davey and company have been working on this for a while and I from the moment I found out about it, I was like, tell me everything. And it required just a ton of data and analysis for us

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

So give us an example of how this has played out in the real world.

So one interesting example, there was a young detective in North Carolina.

He's getting ready for work.

He leaves his car running and he comes out and the car's gone and inside is.

Set the car herene.

Yes, it's a personal vehicle.

Yeah, but but but there's gear inside and it's done. And you know, the department tells him you know, they're very supportive. They reassure him it'll be all right. But then they go to work and they turned to Google. They send them a warrant for everyone who's devices were near the place where the vehicle disappeared, and they also asked for information about people who searched for the model

And so this is, you know, just a real world.

Example of how property crimes are attracting these requests.

And obviously with that information, they were able to get the radio back, right, they were.

Not the radio outstanding, you see.

So Davey, come on in on this, because what it really turns upside down, And you guys lay this out so clearly in the story. The idea of a search warrant, right, would be typically on an individual, right, And now you've got thanks to Google, you can take a location and kind of search for information. But it feels like it opens up that information can reach a wider swath potentially of individuals, some who may not at all be connected to a possible crime. So come on in on that.

Yeah, absolutely, So tech companies hold a lot of data on people. That's no surprise. But usually when you think of search warrants in the traditional sense, you would think, okay, police are looking at this one suspect, let's go and learn more about them, and maybe we'll serve a search warrant to a company to get information on a particular individual a suspect. In this case, police are using the most basic parameters to even jumpstart sort of leads when

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

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

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

Julie, you want to come back?

Yeah, yeah, So privacy advocates are very concerned about both of these techniques. You know, the thing is, if there's no suspect involved, then the only way that goodle can provide a list of hits is to search everyone's data. And so law enforcement will receive, you know, a short list of people who fit the criteria, and they then have to go through and identify who they think, you know,

Okay, so how does Google feel all about this?

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

However, safe driving user privacy is you.

Know, a tey responsibility that they have, and so they have to walk a very fine line there.

Okay, so what about insight?

There's the official Google response, and then there's what you were able to report from within the company with some great reporting.

What did what did some of those sources reveal?

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

There are often just a few years out of college.

Some of them harbor dreams of becoming a lawyer, and I think they're often quite motivated by, you know, this job of really scrutinizing law enforcement requests. We heard of examples in which they were really just looking for any reason to send the request back to law enforcement. In one case, you know, an officer might send a request for email from an account ending in at gmail dot com.

But if the officer has a typo, if.

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

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

To what you're asking for.

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

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

Yes, you know.

I think there's an old dodge in Silitan Valley. If you build it, they will come, they say. Essentially, if you collect this data, law enforcement will come knocking and they will eventually find a way to get it. And so I think that's just the heart of this issue. Google collects this data in large part because it helps them sell advertising, and as a result they they are in this uncomfortable position.

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

Well, yeah, I mean I think it's it's a good reminder to all of us to take a look at our opt out slash opt in options on our settings for various Google services. You know, Google told us that this one product that they particularly use to store location data, called location History, is off by default, but there they do send notifications to people to sort of suggest, hey, do you want to turn this feature on? It could

I just want to end on in a big number.

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

So this is the vanvo the use all right, Julia Love, David Alban of course, Jill Weber, this is the cover story. Check it out. Lots of details in that story.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

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

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

Thank you so much for having me.

Well, thanks so much for joining us. So interesting. We talked about regulating technology last week. That Diana Henriquez, who wrote a book about the Well's written many books, but her most recent book is about the SEC and the

Yeah, so they certainly is a growing consensus the world that technology needs rules and the governments do need to step in, but there is no consensus what those rules really ought to look like. So in the book, I argue that there are three prominent ways to think about governing technology. There is the American market driven way, there is that Chinese state driven way, and then there's a third, the European rights driven regulatory model.

Talk about the European one because that's kind of freshener in our thoughts because of what Apple did with its new USB C connector, because that's the result of.

Regulation, absolutely, and that was one of those manifestations of the Brussels effect, whereby rules that are set in the European Union find their way into the global production and global conduct of the tech companies. But basically, unlike the Americans that really have focused on free market, free internet and sort of maximizing the opportunities for innovation, the Chinese and that really want to bring the state there to

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

Europeans have consistently just shown that they are much more comfortable with government intervening and much more skeptical with the idea that markets on their own, left to their own devices,

Why is it so important that we'd be having this discussion right now?

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

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

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

Based on the books that you've written, the research that you've done the work that you've done, which approach is the best?

So look, I.

Am a believer in the digital transformation needing a liberal, democratic foundation, So there is no way that I can endorse the Chinese digital authoritarian model. I think that is too oppressive. It infringes individual rights and liberties and subjects population to massive and as surveillance. So I have many issues with the Chinese model, even though I must recognize that China has done really well in devel developing technologies even without having freedom as the foundation of the society.

So does the EU and the US align on this because it sounds like that's what needs to happen.

I think that is exactly right, that ultimately you would need both the US and the EO to join forces and align behind a sort of same set of principles for that governance model to be effected. And I would say that there is a shift underway in the US. So the US itself is now starting to rethink it's technol libertarian commitments and starting to ask whether the markets really are capable of governing the digital economy. And you

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

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

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

This does bring them together.

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

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

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, or watched us live on YouTube.

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

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

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

Yowd up, everybody growing kitty here, I'm going to pick a stock and talk about why I think it's interesting, and that stock is game stock.

Retailed traders have hooked into games stock.

I think they think it's a good investment. It looks like there's one guy driving all the buying.

Who is the shot?

All right?

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

Especially when you think of GME for GameStop, amc all these names that come to mind that we're just taking off in the beginning.

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

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

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

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

And you know, it wasn't just me or Kevin or anyone else that thought there could be a movie here.

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

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

Or no?

Ben?

It was kind of an amazing moment.

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

So I heard about it, and you know, and did what us producers do.

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

You know, thank you Wall Street. Right, it just kind of continues to give and give, whether it's the Great financial crisis, whether it's tech bubbles, whether it's the creation of some incredible companies, Like there's just unbelievable stories. Having said that, like when you look at something like what happened during this meme stock Eras, there's a lot of stories in it. There's you know, just the trading element.

No, it was your one hundred percent right.

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

How did you think about, like what the stories you wanted to tell specifically, right, because it's really fun to look at the trailer and I was thinking about you know, Ken Griffin and you know others that are certainly individuals that we talk about all the time here, Steve Cohen, Gabe Plotkin. So there's you know, the establishment side of it. Then there's the redditors in terms of you know, these people,

Well, it's a great question.

You know, we really wanted to make this movie about it for those people that were on the reddit boards, the people that were involved in this and got involved, and you know, it starts with Keith Gill Roaring Kitty. He was in large part the face of this movement and the person that we all kind of identified with the game stuff phenomena, So you knew he had to be a you know, the focal point of a lot of the story, and any very much he is. I

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

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

And I was wondering, when you were, you know, certainly reading the headlines like the rest of us, did you did you trade in any of these? Did you actually participate in any of this in terms of the market trade.

It's really funny actually.

Because I had You're going to say, yeah, aren't you?

Yeah, Yeah, I totally am. You know, I actually got my Robinhood account. I wanted to understand how it worked and how it operated, so I got involved with robin Hood and I wanted to see how people were doing it.

So I very much participated.

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

Yeah, I totally agreed. Did you make money in the process.

I can't. I don't even can tell you how much money I lost?

Well, and that's part of it. What's really kind of wild, though, these individuals who started to be honest with you, Like I just remember on a day when we'd have to like highlight a stock and it obviously we're going to highlight these because they were moving in such a dramatic way in a market where you know, these were names and individuals who were shaping the overall trade. It was

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

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

Well, you know, no movie is ever easy to make. It's a bit of a miracle when we actually pull it off. This one, it was a little bit complicated. We started out with it. I had to deal with the studio MGM, and we started to make the movie with them. But somewhere along the way about in pre production, MGM had sold themselves to Amazon, and that's when things got a bit more complicated. Let's say, just because you know, you have this brand new giant entity that takes over

It came on as our partner and we made the film together.

So it started out as a studio movie, ended up independent, and then we found a home with a studio with Sony, So that's that's how it came together.

I have to jump in because if Schwartzman sounds familiar to our audience, which it certainly does, Steve Schwartzman, of course, is his father, Steve Schwartzman. I've talked to him. He's the co founder or founder i should say, a Blackstone,

Well, you know, look, these are real people.

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

Moment in time.

Well, exactly. Talk to us too about the actors. The lineup is pretty amazing, Paul, Pete, David, Yeah, talk to us about this cast.

Sure, sure.

I mean, look, it all started with Paul Dano, because you know, the face of this movement, as we said before, is Keith Gill and who's going to play that. He's iconic now, and so Paul is somebody that both Craig and I really had been trying to find something to do with. He's just an exceptional actor and he just

Of riches, to be honest with you. We have such a great lineup.

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

I love that. Is it a little frustrating with the Hollywood Actors Strike that these this incredible lineup of actors can't be out there talking about the movie.

A little frustrating, might be.

An understatele Sorry, yeah, it's it is. It's it's unfortunate, But we feel like this moment is the moment for

Strict but the you know, the auto workers and everyone else.

There's a lot of disparity out there, and I feel like this movie does a good job of highlighting that.

So we've felt like now's the time to show this to the world.

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

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

I think it's you know, we look, we.

Reached the moment, an inflection point, if you will, and most industries go through it.

The entertainment industry certainly has its moments as well.

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

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

It's two things, you know, Like it's hard, as we said, it's hard making the film and pulling all these elements together and takes a lot of energy and certainly a lot of money. And you have to hope that the movie gods smile upon you. But for me, it's always

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

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business App and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

Make them lad, make him loud, don't you know?

Everyone wants to lave?

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

You know what though, that's o'nor, But it's actually good to laugh.

I know.

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

Yeah, I better go to the Comedy Festival. The seventeenth annual New York Comedy Festival, Yes, about.

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

I'm good, So we have quite the medicine for you.

The New Comedy Festival.

My voice doesn't usually sound like this.

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

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

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

It's good for New York.

Okay, at Madison Square Garden, Shane Gillis at Carnegie Hall, Mateo Lange and me Carr Anthony just all at Carnegie Hall. And you know what happens that, you know, people go to Carnegie Hall and then they'll go to the restaurant across the street. Right, So what we do is bring this stimulus to New York City, which we're always happy to do, and we have a lot of fun with doing it. And then we have you know, we we have britt Goldstein. Do you know him from Ted Lasso?

On air, can't we you can you can't. You can't be your last show.

We do say it a lot of the news, but go ahead. He's so great.

Yeah.

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

Are they doing comedy?

Are singing?

Yeah?

This thing okay, that's okod.

How do you think about when you put it together? Seventeen years and running? Talk to us about like how it's evolved.

Oh, it's nineteen years forgive me years and seventeen years for the Stand Up for Heroes. But it's nineteen years, sixt year. We're having a big, big blowout the twentieth year in New York City.

Wow.

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

You know, it's we don't often because we have a global audience here on the program.

We really, yeah, we do.

I had no idea that's some comedy for you.

Kidding looking into the control room and see if you can sit. They're not laughing in there. I know, I know to my day job, but we do, and we you know, we have a national audience as well. So why are we talking about something here in New York. Well, because a lot of people from all over the world

You know you can never negate New York. Yeah you can't.

You can't take the New Yorker New Yorker.

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

It's nice happening the last five months without the writers strike.

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

Happening now at the touring that goes on. When you have a great special that's on TV, you take that and you go on the road, and that's your millions of dollars that these people, you know, comedians are making on the road. When you're selling out Beacon Theaters, Carnegie Hall, when you're selling out the Garden. This is this is like this is big bucks, you know. So it's it's it's a big, big business for a lot of people that have really you know, made it and are able to tour around the country.

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

You know?

I wanted to stay, and then there was a part of me which did not want to stay because of the way. And I don't want to put down Time Square because I went there thirty years ago to build it up and I was part of that, the renovation of Times here and the renewal of Times Square. So I'm not going to put it down. But things were changing there. The city was changing there. I felt that after COVID, the whole seascape there was changing. And I said, let me step back. I own the brand. I want

Okay, yeah, give us some of those other ideas.

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

I mean, it really was the end of an era for you not to renew your leaves there.

Well, yeah, I was lived thirty years in Time Square.

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

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

Done.

Did you have other things to do you? Did you look for other play other physical space.

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

So why didn't you do it?

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

What a great feel?

That is pretty cool?

Right? Great?

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

You know what it is?

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

Remember where we could say it's a joke people.

So you can still say that, No you can't.

It's no tough.

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

Yeah.

Is it tough for comics today?

Though?

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

That's a good point.

It was a joke.

Don Rickles, D mart and all those guys like.

You think self censorship is real.

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

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

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

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

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

What ja tours like four days a week now, probably every.

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

What do you remember from these guys in the early days, you know.

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

Right, well, I always make references to Stein felt like I've seen them all.

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

How about Larry David And he would say, oh, to the audience, they're just terrible.

And he didn't do that well or twice.

He did that all over see that I can see the curve.

They're terrible, They're terrible.

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

Is November third to the twelfth. Go to New York Comedy Festival dot com and you would be amazed to see how many shows are listed there to go see and have a great time.

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

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

Time.

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

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

Yeah, absolutely, we have the dynamic do Bloomberg Pursuits editor Chris Rouser and Bloomberg News travels are Nikki Eckstein. Our first installment to Night Minimum comes courtesy of one of our favorite reporters, Brandon Presser, who whisks us to the Spanish capital of Madrid. But we also do want to point out that this sectual Pursuits coincides with the launch

Yeah? So, do you want to hear our official tagline, I love our highle tagline the new hub for globe trotting leaders, covering everything from the business of travel to the most worthwhile experiences that money can buy. So you've known and loved the most worthwhile experiences that money can buy. That's always been the pursuits travel, Emma. We love to tell you how to spend your money well all around

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

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

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

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

All right.

So if we've got a couple of days, like, how do we think about approaching it?

So our guide really allows you to pick and choose your own adventure, depending on what your priorities are and how you want to spend your time.

One of my.

Favorite things about it is the section of activities, the kind of classic C and do section of a travel guide. We've switched it up in a way that's just way more efficient and plugged in. So everybody goes to ls Throw, the sprawling flea market near the Pusai Ord, and people usually go on the weekends and it's like a rat race of anteeking. But our version of this is, don't

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

Nikki, let's talk about some of those restaurants because the food there is.

Not to be missed, and it's probably not what you expect either. Like, of course, there's all of the top us crawling, and one of the things that I love is that we're not just giving you like a single place to go get top us. We're giving you an entire kind of neighborhood. We outline a whole tap us crawl in Malasanna, for instance, with numerous stops and telling

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

We have this writer Ramsey who is a genius on points and miles and fine finding discounts and how to sort of efficiently.

You guys calling him.

Well, yeah, we had some long.

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

A resort fee.

Yeah, like airline fees.

So many times you go to a work conference, right, and there's like the resort fee that we're never going to like.

I know, it makes you seem like you're at the spot.

I don't.

I was concerned about it when I travel for work.

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

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

You pay in euros exactly. And I didn't know that until reading this, because you pay see.

Right for that version.

I know what's wrong with them.

So there he's like, I can't talk to you, nikky. It's all like Chris Chris, or I'd go anywhere out of the US like, let's be honest.

You know, we do this funny thing sometimes in our department where we have to ask people who sit around us, did you know this?

Is this?

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

All right.

There's a lot more advice too, when it comes to the value add attacks, which I know about doing, and what.

About the digital one?

Through about that kiss?

Didn't know that one?

Really great advice. There's also some great coverage on weekender bags. Weekender bags, Did I say that correctly?

Yeah?

We can.

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

Packing cubes are a thing that I know that I should use, and I don't like. It's like a healthcare FSA, Like I know it's.

A thing that we're supposed to use.

It can help you with Nikitch, but I just after we did this story, I just bought some for my husband. Okay.

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

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

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.

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

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

Silicon Flight Bank, or wasn't a bank run.

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

Yes, that's exactly right. And that's one thing that even from the jump, people in Kansas stress that this wasn't some bigger issue with Kansas banking or something specific to the state. Was a very idiosynocratic and specific situation, and my reporting definitely supports that as well. So it was different from earlier this year, but also a very interesting case on its own, all.

Right, So let's get into the details. Amanda tell us about Shan Hayes.

So he is the CEO of this bank, Heartland tri State Bank. He's the longtime CEO. He's worked there and different iterations of the bank. Basically, he got his career there. He started as an agricultural loan and IT officer at a bank under a previous name, and so he is really just a kind of towering figure in this very very small city in Kansas. I went to the city.

Then blowdown because we want to know what happened.

Yeah, I mean, how did this guy with so much experience find find himself asking one of his customers for twelve million dollars in cash?

How does that happen?

Yes, I jumped the gun, was excited to talk about the story. So it's atory basically one of my basically in reporting it, I got a tip that essentially this meeting had taken place where the CEO had asked one

But it's a good reporter, man.

They're parallels to pig butchering scams, where you know, he said he knew someone who was helping him with crypto investments basically, and in pig butchering, usually they find someone and they are encouraging them to put money into a sometimes fraudulent crypto app. They say, just put a little more in and we can get you your money out. Maybe there's an issue with taxes or the wired didn't go through. Try again, and it's it's really really sad.

You know, what's it?

What's it like when you're driving out there and and then you you get there and what are the vibes in a town like this when something.

Like this happens.

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

Even.

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

People there are so so nice.

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

So I'm curious also about so many things in this like do we know what kind of crypto it was?

Like?

What what you know?

How long was he potentially involved in this?

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

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

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

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

I mean, do we still not know really what happened? Is that safe to say we know what.

I've been able to report, Sir, I'm being careful with that, No, no, I yeah, that's fair. There's still a lot of questions like that I have about the story, which is why I was joking about people calling me. But you know, I'm curious if there was a person who if it like some of this is the story of what happened, because I've heard from sources, but truly the only person who can really speak to the full story is Shane himself. You know, if there was actually another person helping him

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

And obviously, like there are.

Elements of the story that remain sort of a mystery and we'll see what some of this ongoing sort of investigative kind of qualities on Earth is.

Is Amanda going to be finding herself driving on Route fifty six.

I mean, Amanda, Joel, You've got you know, some some cornfields to cover there, you know, so you just just keep driving driving west I guess.

This is Joel's face, Amanda. This is Joel's favorite place to assigned stories live on air.

Just a HEADSETE.

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

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

A small town like this, where you know, it's a kind of a fixture of the community. And Amanda also did some great reporting in the story about how vocal he was in d C about the importance of having these small hometown style banks and and you know, in general, when we start to lose that element, I think there's you just that's part of America, right, like it's it's a wonderful life, right, Like that's what we do here.

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

I feel like that's where the tragedy of the story lies. And also that tension because you know, the shareholders all know each other, their neighbors, they've known each other for a long time, and a lot of them, this was just something I picked up while I was in town, was a lot of them are ones that are not named in the FED document. They my reporting indicates that a lot of them might be older women who are retirees, maybe widowers, And it's just tragic because imagine if you

Goes back to the importance of what Jill, what you were talking about this. You know, you have these small banks and these small ears of the of the country, and they're really important.

Just if I come to you and I'm like, hey, I need twelve million dollars for a week, I'll get you one million.

I'm good for it. Just say no.

Well, if I had twelve million dollars to give you, no offense, but I wouldn't be hanging out with you.

Guys.

Amazing story. We hope the phone starts ringing off the commando. All right, Wealth Team reporter for Bloomberg News and Jel Webber.

Thank you.

This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from three to six Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal