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Seems to be a daily drop of news on the world of artificial intelligence. A lot going on Alphabet's Google Io Annual Developers Conference that's happening today. It's expected to talk about a lot of different AI features for its search business and broader ecosystem. This event coming one day after a similar one from open ai, where it launched a faster and cheaper version of its chat GPT model. So let's get to our tracker of all things artificial intelligence,
Bloomberg News AI reporter Rachel Metz. We caught up with her at last weeks Bloomberg Technology Summer. Got a great rundown on all things AI. But as we said, everything's happening or something new every day. It feels like she's with us from San Francisco. All right, Rachel, let's start with what we got from open Ai faster, cheaper model. What's different from the version that everybody's been talking about for the last year and a half.
Hello, Yeah, so we have a GPT for O. The O in opening I speak stands for omnimodel, and basically what that means is they used to take a bunch of models that could do different things and chain them together, and now what they're going to be doing is they're sort of pushing it all into one AI model, and that's part of why they say they're able to make it faster, so they can do things like a much more close to real time audio interaction, which makes it
feel more lifelike. Like if you're talking to the app right now and you want it to talk back to you, you're gonna have to wait like there's you know, like there's some very clear latency and then it will respond in one of the several voices that has in there with this upcoming voice feature, it's very snappy from what they demonstrated, like almost instantaneous, as though I were talking to another person.
All right, So there's that going on, I thought. I also, I think it's interesting, you know CHATGBT, right, it's kind of the gold standard. I feel like everything is kind of measured off of that.
Is that fair?
I mean, I think that it is fair in that people seem to be using it a lot. I mean, I think the figure that we have was like, what is it, like one hundred million users or one hundred something like that. People have used it. It's quite popular, and yeah, I think people think about it as sort of a gold standard in terms of what one can do right now, what a state of the art and replicable with the chatbot. So yeah, I think that's kind of a fair barometer.
So here's the question I have relative to the Google statement. You know, I've been using Google literally since late nineties, two thousand something like that. Yeah, and the concept of organizing the world's information. They always did that really well till about I don't know, five years ago, and suddenly search just became festooned with sponsored answers and ads and then Google Zone products and sometimes you have to go like three or four screens down to actually find a
search result. And my personal search seems to be less on Google and more on products like Perplexity, which uses either the claud or the Shannon or a couple of different engine AI engines and I find the answers I get are so much better and the list of sources so much better than fighting on Perplexity then fighting through
the Google homepage. I'm wondering how much of this AI built into the search bar is a recognition of Google Search has really become, you know, fairly mediocre compared to being the best there was.
Well, Rachel, come on in on that.
And I'm curious about, you know, at this developer conference event, you know, what are we learning in terms of the a THEAAR front that might help maybe change Parry's view when it comes to Google and alphabet.
Sure, I mean, I think I think you're right about Perplexity. A lot of people have been drawn to it. It seems to be combining a lot of things in a really smart way. When I use it, I'm struck by how well it puts things together, and it has some good like follow up questions I might want to ask things like that. I'm insights its sources. So like from my reporting, we know that Opening Eye is working on its own search project which may be similar to Perplexity.
And we saw this morning that Google said it's going to it's going to make the sort of like AI assisted answers that right now are sort of an optional thing. It's going to make those a more integrated part of its search results. So if that works for you, and we'll probably have to see over time, that could make it so you feel better about the results that you're getting. But I guess for me personally, I'm still kind of wary of trusting anything that's AI assisted unless I check
with the soul or set it. Perplexity obviously is really good for that, So I think it's going to take some time still for us to figure out what works best and how we should put these tools together. And you know, maybe you'll use Google for certain things, Perplexity for other things, Opening Eye for yet other things.
Yeah, you always have to double check that hallucinations are not part of your answer. And that is the technical term for when AI either find something wrong on the Internet or just kind of spitballs and makes it up things that are wildly wrong. A couple of weeks ago, I interviewed Bill Dudley of the New York Fed and I was kind of surprised to learn from AI that he was an NFL fullback in the nineteen forties, especially because he wasn't born until then.
Ye, So listen, Rachel just got the same name, right, Yeah, the same name.
Waits those I mean, there's multiple Rachel messas out there, and AI sometimes will conflate us. I have multiple jobs according to AI that I've never had. You know, things like that.
You would think intelligence would say, oh, this was before he was born. Right, Maybe it's less intelligent than we're giving you credit. Although Jim O'Shaughnessy said AI today is the worst it'll ever be. It's only getting better every day.
Listen, the more data you put in, right, Rachel just got twenty seconds, the better it's going to become.
We assume that's what people have been saying, but I don't know. I think we may we've been seeing those kinds of results. That is true, but we'll see over the next few years if more compute, more data really does lead to better AI.
Yeah, it's only going to be better as good as I guess the data is.
Rachel.
I know a lot going on, and we appreciate you jumping in. Bloomberg News AI reporter Rachel met.
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 then Bright Auto with a Bloomberg Business at or watch us live on YouTube.
We'll talk about betterans on Wall Street.
We often mean individuals who have worked there a long time, seen lots of market cycles.
People like Barry have lots.
Of experience investing in trading and global financial markets. But it is also about the growing relationship between Wall Street firms and US military veterans who, after serving their country, find a second chapter working at financial firms around the country. And that includes at Wells Fargo, which last year hired over eleven hundred veterans, with four percent of Wells Fargo employees self identifying as a veteran. Two members of its
board of directors are US veterans. Bloomberg, by the way, hosting today the Wells Fargo Military Appreciation Event with more. We welcome John Weiss, He's co CEO of Wells Fargo Corporate and Investment Bank, joining us here in studio as the daughter of a VET cousins brother, I salute you, and I think it's really important that we remember those who serve our country, and I want to talk about that in a moment your father, Thank you, Thank you. He and his brothers World War two, all of them
and all came home, which was pretty remarkable. I want to ask you, though, because you have such a great lens on the world, and I think we're at this interesting juncture in terms of trying to figure out the way forward, the business environment, the macro environment, the deal environment. How would you describe kind of where we are.
Yeah, well, first of all, thank you for having me, and we're delighted to be collaborating with Bloomberg on this important topic of veterans. As to the macro picture, you know, it's I guess a unique time. I would say that the US economy is quite resilient, and you know, it's a good place to be headquartered. You know, every new piece of economic information sends us darting in one direction
or another. And we've got CPI tomorrow, and the PPI that came out this morning is encouraging from a standpoint of as the market digested it, at least encouraging from the standpoint of maybe a somewhat better inflation picture. But CPI is the important data point for this week, so we'll see how that comes out tomorrow. Deal activity business activity actually quite good, and I would say there's a lot of pent up demands, certainly a lot of private equity capital out.
There looking to make those exits.
Right, yeah, look at well on the one hand looking to make exits and on the other hand looking to make investments. So both sides of the deal are covered there. And I would say strategics are getting a little bit more impatient about pursuing their own strategic goals. So I feel things are reasonably stable right now, as stable as you could say they could be, given that we've got a war going on in the Middle East, a war going on in Europe, and a lot of uncertainty around
the US election. So given all those things, it's remarkable how well the economy and the market seem to be digesting it all.
So let's use those two wars as a leaping off point to discuss the work that you guys are doing with the veterans. In my office, my CFO used to be a tank commander in Afghanistan. Our head traders sat in the back of easy two Hawkeyes directing all the traffic over Iraq during that war. What led And by the way, they're fantastic and there are secret weapons? What led Wells Fargo down the path to Hey, we really
want to recruit from this pool of people. How did you discover what an amazing talent pool instead of skills exists there.
Well, the first thing I would say is, I don't think we're completely unique in this area. I think Wall Street in general has been very supportive of veterans.
We're welckoming.
So that's the first thing. The second thing is, look, we're always looking for talent, and when you are looking, as we are in our industry for people that perform well under pressure, that would naturally bring you to this population of people who have learned to you know, to serve and to execute under pressure. And then there's of course.
The is a trait you recognize, right John, in terms.
Of just get it done, Like whatever we have to do, just get it done. I love that attitude.
It's absolutely the case. And then there's the last thing, which is, of course we're supportive for social reasons. You know, these are people that in some cases gave them all, but their friends certainly did, and they served their country, and a part of our responsibility is to help them transition back into society.
Because it's interesting because I feel like, and I don't want to be, you know, so critical of the government, but I just feel like people come home and then they don't have homes, they don't have jobs. You guys actually get into some of the basic need. It's about providing jobs, but it's providing things like homes.
So, but let's start with jobs within the corporate and investment bank. You mentioned that we've hired as a company eleven hundred veterans this year. That's a pretty good pace. Can probably do more on the corporate and investment side. We have various programs that allow us to bring veterans on board for summer associate roles for more permanent assignments. We're working with some of our clients to recognize the talent of their vets and give them opportunities to continue.
That's what I think is interesting when we talk about diversity, inclusion, equality, it's the supply chain, the pipeline. It's not just what you do at your company, but right kind.
Of it's working with your clients. We work with a lot of veteran owned broker dealers, for example, and we bring them into deals and we try to help train their people in products and services that we provide that maybe they don't have the same depth.
Then that's really quite fascinating, especially when you think about the problems we've seen in via hospitals and things. Getting people on your payroll with your healthcare has to be a huge life upgrade for them.
Yeah, certainly, I mean career matters right to overall livelihood. But getting back to the question the carol last a minute ago, so so yes, the company very specifically has focused on the veteran population as an area for focus, and that that focus takes you know, comes in different ways. We've on an annual basis given donated new cars free of financing to veterans. We've donated something in the neighborhood
of four hundred homes over the last ten years. This is providing housing free to veterans, and we don't look at it as a handout. We look at this is often used phrase, we look at it as a hand up because what they really need is some assistance and they will pay that back already have to society, so we feel really good about it. We also give a lot of funding out of our foundation to various veteran causes.
I always think about the audience who's listening, And I think again, we you know, have you know, segments of our society and population that are forgotten, including the vets. You know, is there a message that you think more widely that we should all think about as we go about our business on a daily basis.
I mean, it's it's not going to be a new idea to people, but we all live our lives in a very safe place, and it's because there are people out there protecting us, whether those are first responders here in you know, domestic US or members of the military serving outside the US. So I guess the messages we are all in this together and we all have to bear our share of the responsibility.
How do you think about the future in terms of what Wells Fargo wants to do next?
We want to do next?
Is it just more and just continue to build it out more?
Yes?
Better?
Absolutely, you know we're focused as a company on running the bank better, serving our clients better, managing risk better, and just being a better run organization overall.
Yeah.
Really just really fascinating, and I do think about it. I think unless you've maybe if if you've had somebody in your life like you say, you've got people working or I've got it. Certainly my family many members, several have done tours in the Middle East, and I do think there's something about this environment right now where we're very sensitive to sending American soldiers over to some extent. But it's just the role the United States States plays
globally in kind of protecting the world. Like you just have to think about it, and we take it for granted.
You know, after twenty years of war in the Middle East, I think the country kind of has gotten fatigued, and it's easy to forget about the people coming home who then have to just turn their life up right down to normalize things. We've been a little negligent paying attention to them. I'm glad to hear you guys are moving in this direction, and I've been in this direction for quite some time well.
As a child of the sixties, all right, we can't forget some of the lessons of the sixties, and one of them was certainly welcoming the veteran back after the war, which we did not as well as we should have in the sixties. We certainly did, I think well post World War Two, and hopefully we're doing a better job today.
It's interesting that you bring it because I think about when my dad and his brothers came home and the GI bill and going to school and just it was such a welcoming back, if you will, and such a support system, and that it's just kind of amazing to see kind of where it's What do you think it is about the financial community, as you said, not just well as Fargo, but we talk about it a lot here at Bloomberg in terms of the financial community and their support of veterans in particular.
What do you think it is about that?
I think I don't know. Maybe part of it is the focus of New York City and understanding what happens when things do go wrong, which you know, those of us who live through nine to eleven certainly remember. But you know, it's also it's a responsible It's a part of society that wants to prove its sense of responsibility. I think I think Wall Street really does care about its image, and it cares, you know, in a real way about carrying its share of responsibility.
Yeah, and when you look at the veterans, these are people who understand risk, They understand working within a team and leadership, and the parallels are just all there. If you want someone who has your back, whether you're in the field or on a desk, it's hard to do better than military veterans.
It just makes a lot of sense. John.
Great to get catch up with you and just kind of hear about the work you guys are doing. Looking forward to hearing more. I know we're going to have another member of your team a little bit later on Bloomberg, so looking forward to it.
You'll be hearing from Mike Riley, who runs or co heads our market's division, who is a vet Submarine Navy right Navy X Submarine commander. Wow, you talk about somebody you want to have, you know, having your back.
Mike's the guy, John, Thank you so much.
Thank you, John Wise.
He's co CEO of Welsfargo Corporate and Investment Bank.
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 play Bloomberg eleven thirty.
I want this empty stade on the ball of broken dreams. All right, folks, sleep, sit down, grab something to drink. Because this is a story of broken dreams. It's also a story that's among our most read on the Bloomberg today.
It's a story about I Am Academy, also known as the Harvard of Trading, that grew from a small New York operation into a global phenomenon during the pandemic by selling the promise that it could teach anyone, particularly teens and twenty somethings, how to become a savvy retail investors for a fee. Of course, it promised a lot, and many lost a lot. We know we not wanted to know more about this story, so with us as Bloomberg
News Personal Finance reporter Alice Cantor. She's joining us from London, where we know it's a little bit later. So Alice, we so appreciate you hanging around to talk with us. This story, by the way, to be featured in the forthcoming issue of Bloomberg BusinessWeek magazine. You can read it now on the Bloomberg and also find it at Bloomberg dot com slash BusinessWeek. First of all, a story like this, Alice, how did you first come across it?
Hi?
Carol, Well, first, thanks for having me on. Yeah, so I it was in the midst of the pandemic actually, and I was looking at stories around financial crimes in France because at the time I was in Paris, and I saw this small news website that did an investigation about iam Academy in France, and it was about all these teenagers who were getting really excited in the pandemic
about making money from memes, talks and bitcoin. I'm sure you're familiar with that, and they had come across iam Academy, this company that promised them that within a few months they could really become multimillionaires. They could earn a passive income if they just knew the right strategy to trade online. You know, they this company had the recipe for them.
So yeah, I started digging into it and found out that France was just one of the many, many countries that this New York based company had expanded in and was making a lot of victims.
Essentially, Well, I want I want to get into the size and scope in terms of how many got impacted.
But tell me, like how it works.
I mean, I've kind of read through here, so I have an idea, But tell our world.
How this company worked.
How it said, Okay, you're going to make money, and you know what was in in terms of becoming a member and what you had to kind of give across.
Could you have to pay a fee right to be a part of this.
Yeah, So initially it worked like any subscription to an online product. It's like an online educational platform. So you paid two hundred and fifty dollars to join, and then you'd have to pay two hundred and fifty dollars every month to keep having access to this online platform. And on the platform you'd get sort of pre recorded videos of I am so called I AM educators that would teach you the basics of markets. You know, what, how do you make a stop loss, how do you figure
out a difference in percentage points? And how do you take advantage of them? And then they also said, well they have this amazing algorithm that charts prices of currencies and stocks and any financial product, and this algorithm can sort of tell you when a price is going to go up or going to go down. And so if you just pay the subscription, you'll have access to all that information and you can really quite quickly earn money by using that trading advice and learning how to read those graphs.
I feel like a lot of folks in the financial community would be like, wait a minute, like what is this algorithm? And it almost sounds too good to be true? Tell us about that. They targeted really a younger generation. How did they do that? I mean, it sounds like, you know, I was looking through it, you know, it almost sounds like there were influencers out there about like, look at all the money you can you can make here.
Absolutely so, at the end of the day, the software that they promoted, the algorithm doesn't work. It's very basic, it's not really predictive. But they really lured people in through the lifestyle that that you could have once you
get those millions. And they did that on social media and essentially the CEO of the company hired these really muscular, energetic salesmen that went on Instagram and showed their lives on a Dubai yacht or at a five star villa in Italy saying, look, I'm this rich, you know, I'm you want to be like me, Well, why don't you just join? I am? And this is the recipe for success eventually, So that's really how they attracted people that way.
Who's behind it all?
Tell us a bit about the company's CEO and how he did in all of this.
Yes, so, Chris Terry is a man who was born in the Bronx and he started working construction. He had apparently the construction company had ties to a mob family and he had to pay a fine. He was like implicated in a criminal conspiracy. So that's where he started, and he likes to mention his mob background quite often. But then he went on to Amway and was a
salesman's for another multi level marketing company. And then after that he tried to build a reputation of himself as a trader, saying he was managing hedge funds and he knew all about financial markets. But really he was never a financial broker. He has no financial real accreditation from any real US institution, and he's made very well for himself,
so he's definitely a multi millionaire. I AM at its height in the pandemic was selling the equivalent of five hundred to six hundred million dollars in subscriptions for the year. And he flies around in his private jet and has a bunch of condos around the World in Dubai in Las Vegas in New York. So he's making a lot of money from all this.
Tell us about I mean, so he made a lot of money, But tell us about some of the individuals who paid, who got a part of the platform, did some of the trading.
Some of these young.
Individuals some really sad stories in terms of what happened to them.
They lost a lot.
Yeah, so people would come in thinking I'm going to learn all about retail trading, make a lot of money, And what happens is not only do they pay the subscription, but often they start trading and kind of gambling their money away using strategies that don't work so pretty quickly they'll have a lot of losses. But what I am educators will tell them then is, well, there's this other side of the business. You can earn a commission if you sell subscriptions to other members, and so that's the
multi level marketing aspect of it. And so where it gets a bit tricky and where people feel like they can't leave the company and they end up losing way more than just like a regular financial service, is that these teenagers end up really kind of being gas lit and a little bit sort of brainwashed into believing that, you know, it's their life's purpose to be in this company. They have to keep trying to recruit, they have to keep bringing in more people. If they're failing, it's their fault.
So there's this whole strategy to keep people involved, to keep people selling more subscriptions to others, even when they realize the trading lessons are really basic and not helpful at all.
It does sound like, and I know you get into this, I mean, it's prime for regulators. It feels like to take a look Alice, where are be on that front because it sounds like this, you know, has to be on their radar.
Absolutely so, I mean across Europe, a bunch of investigations are open at the moment, but nothing has really has really happened so far. And then the biggest investigation that's ongoing right now is by the FDC in the US that is looking at iam Academy. They're reviewing complaints, they're talking to the CEO, and well it looks like there might there might be in discussions to kind of try
to put an end to this company's activities. But to be honest with you, Carol, there's not that many regulations around multi level marketing companies or these kinds of financial education platforms, so they might just go on. They might just like filter through all these regulations that come come kind of they might pay a fine and just and just get on with their business.
Yeah, I do wonder on something like this.
I mean, is it kind of eyes wide open if you're gonna pay money, like you have to kind of know what you're getting into, or is it a case of is there a way of proving And I'm not saying there is, but you know, fraud of some sort in promising an algorithm that's going to kind of do everything, or do we all just kind of know that maybe if it sounds too good to be true, it's not going to be true.
Well, yes, they can be liable for making false income claims. So early on they would have people on Instagram posting like pictures of their rolexes and bills and saying, you know, I make ten grand a month in passive earning and passive income. So those kinds of figures can really put the company in difficulty because you're not allowed to make these claims unless you can back them up. And in this case they can't. So that's one area that's problematic.
The other one is that they do They say they don't give financial advice, but really they kind of do, and they almost trade for the people that are part of the company. It's kind of tricky, but they usually just right like tell them which brokers to go with. They used to mirror trades automatically, so just like copy and paste trades from traders and give it Chalice with the members.
I have to ask, you only got about thirty seconds, so just quickly. Company is still active, Yes.
It is still active. I was just at a conference there in Budapest that they had a huge company rally a few months ago, So you're still active and doing well.
I got to say, you paint such incredible pictures in this story. I feel like it's like a mini documentary just waiting to happen. But it sounds like the story still to be played out here, so we'll continue to follow any updates. I'm so glad we could get some time with you to kind of spell it out for us. As we said, it's among the most read stories on the Bloomberg Today. Alice Kanter, she's a Bloomberg News personal finance reporter joining us from London and as we said, among the.
Most read and you could check it out. It is also going.
To be in the new issue of Bloomberg BusinessWeek that's coming out later on this week, and it's also already on the Bloomberg. Coming up next, we talk a little bit about the workspace freelance workers.
There are a lot out there.
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 Brout Auto with a Bloomberg Business app, or watching us Live on YouTube.
Two headlines.
I just wanted to mention in the last twenty four hours or so Converse cutting jobs as part of parent Nike's cost savings plan, Walmart acting hundreds of corporate jobs and asking most remote workers to return to offices, according to a person familiar with the matter, and fetch your J. Powell earlier today, weighing in from Amsterdam in a moderated conversation, saying there are signs of gradual cooling and rebalancing the US labor market, and yet at the same time, how
the US is still experiencing labor shortage in many industries. All right, so we wanted to talk a little bit more about what's going on in the workforce. So we welcome back Kelly Monahan. She's managing director with the Employment Upwork Research Institute, which is a division of the publicly held online recruitment and marketplace company Upwork.
She joins us from Florida. Kelly, great to have you back with us. How are you.
I'm doing great, Thanks for having me.
Well, it's great to have you here. You guys have some new research on gen Z.
Those was born I guess was it the late nineteen nineties, early twenty ten, some twenty percent of our population. Why first of all, did you focus on this group in particular, Yeah, that's.
A great question. The reason why we zoomed in on gen Z was two reasons. The first is at the end of the year, they're going to actually overtake in terms of percentage of workforce the baby boomers, So just by their sheer size as important, we understand whether they're coming into the workforce. And it's also graduation season, and so we wanted to also help gen z ers navigate the new world of work they find themselves entering.
I got to say, walking in and around New York City, there's a lot of universities, saw a lot of Columbia grads getting ready for graduate graduation ceremonies. That was interesting to walk around. So you guys did some research into this group. So what are first of all, let's start big and broad. What are the big findings that you guys came up with.
Yeah, the biggest finding I think is actually a big wake up call for leaders today and what gen Z told us research, So they want to work differently than the typical employment model is today, our most highly skilled and highly educated freelancers are wanting to be entrepreneurs, and they're actually finding a more stable career path towards managing a portfolio of freelance project as an example, in order
to diversify their project work and diversify their income. So we think about all the things that gen Z has grown up in and in stable economy, the pandemic, they're really looking to take much more control and individualize their work. And so that to me is a big wake up call to leaders today to think through gen Z signaling to us that the way that we've structured work is broken to them, they want more control and flexibility over the way they're working today.
Kelly, do they really really really want it or is it just kind of what's coming to them? And I asked that because, I mean, I get it. I'm in the media world. I've seen lots of freelance work, and I think some do really like it, but many are still seeking out kind of that full time gig. I mean, do they really want this to be so many different maybe smaller jobs, if you will, that kind of add up to a whole.
That's such a great question. And here's what we're finding within the data. Those that have a post grad degree are the ones that are actually more likely to be structuring work this way. And I think the reason is what they really really want to answer the question is flexibility.
And I think, you know, as we think through the rto headlines that are coming back, the layoffs that have occurred, especially within the tech industry, I'm going to be honest with you, I think it's spooked this generation a bit and they're realizing that traditional contract with one employer being tethered to one organization can't get them to where they want to go fast as fast enough and especially given
the economic conditions. They're growing up in the cost to buy a house, the cost to buy a car, groceries, all this is so much more expensive. And so again those that are highly educated and can really write their own ticket, having the right skill sets that are in demand we see in our data set are actually opting towards. Again, these aren't going to be your short typical gig type projects. So these aren't going to be the people necessarily driving
an ubercar or doing door dash. These are the people are going to come in and are tackling machine learning or data science or your content creators and working on longer term complex projects that quite frankly, as an early career professional walking into corporate America, they might not have the opportunity to do.
Because I do wonder too, and just you know, indulge me for a moment, like I do think. I watch, you know, kind of the younger nieces and nephews in my world, and just yeah, like the flexibility. But then they get married and they have kids, and then they become very nine to five and they have to buy a house, and so they want the benefits the healthcare because I do think about that part of you know,
when you are piecing together freelance work. You don't have all the amenities that you might get from a full time job.
You know, I think this is such a great question you have, And really I'm calling this like the gen
Z paradox that we're seeing, because you're right. I think there's the reality of the macroeconomic conditions we're facing today that are requiring a really need for income and to get it faster and to get promoted faster, and so there's these expectations of wanting more because of this, and yet there's just a strong demand and desire for autonomy and flexibility and some like when you can craft both of those things, I think that's the best of both worlds.
You were absolutely correct though that I think the reality that many are struggling with in the paradox they find themselves facing is what one do they have to choose? And again, where they are right now, they're younger in their careers, and we see this across many generations. You're willing to take risk, you're able to try to think about entrepreneurship because you're at that right life stage to
do so. The more that you age, and to your point, the more responsibilities and quite frankly the cost to incur I think gen Z is trying to weigh out how long is it going to take me to climb the corporate ladder? Do I have enough stability? Am I going to end up getting laid off? Is this a safer route to actually diversify? And I think those are questions that we're seeing played out in real time today by this generation.
All right, so then is there a message to corporate America. You're saying, hey, folks, this is what's happening with the current workforce.
You better wake up, especially.
When you know, when did I talk about Walmart saying hey, folks, we want you back back at the office.
Yeah, I found that so actually fascinating as I was listening to you opening up the segment. I think this is a big wake up call for corporate America today. We know like the idea of work feeling broken, and that we see the stats all the time that Gallop reports on employee engagement is not off the charts, it's low. Most people are struggling today, and so there's something systematically
broken about the way that we've structured work today. In the age of AI, in the age of distributed work, we have all these new technologies that I think are causing workers to think differently because they're behaving differently as customers. And yet it's harder for us to move our organizational practices, our systems and technologies that we built around that is much more centered around this long term employment contract. The reality is that's not the way the world's working today.
Customers are demanding much more speed and convenience, and because of that, that's really disrupted the entire way leaders are thinking about work. And so the wake up call is, you can't continue to do business as usual. If your plan is to attract and retrain gen Z talent by doing what you're doing today, I would be honest with you, there's not enough gen z ers coming up the ranks.
Baby Boomers are retiring at faster rads. In some industries it's five to one ratio where baby boomers are leaving to everyone gen Z. So we've got to wake up. We've got to figure out how to make work for the majority of people today, and I think that requires some deep systematic change.
Is there anything that I'm going to throw out? Artificial intelligence and anybody who's smart talks about and says we're very early in terms of the impact it's going to have on the workforce. Although having said that, there are folks out there that are already saying we're a little worried about the jobs that are going to be taken or replaced by GENAI, machine learning and so on. Gen Z in terms of how they approach AI, anything constructive that you guys are coming.
Up with yet, Yeah, it's a great, great question. So one big thing that I'm seeing that's the behavior change in gen Z committed to other generations, is they are adopting this technology much faster than other cohorts, and they're doing so in two ways. One is that they are self directed their learning. Because they're digitally native cohort, they're
not afraid to take these online courses. They're not afraid to actually learn through online mechanisms, and so they're embracing this and are much more likely to have a certificate today in AI as an example. But here's the other thing, and this is what I actually think is so interesting. They're much more willing to go for coaching and advice to systems like chat SCHPT, so these large language models, they're a bit more organic and inherent in the way
that they're interacting with them to get advice. Gen Z in particular hates and efficiency, and so their ability to actually utilize these tools to work faster is really mind blowing to me. And so I do think this generation is going to help us shape what this world of work is going to look like in the age of AI. The messaging is like, if you're not gen Z, we got to play catch up the rest of our older generations.
I do want to be smart because I know always get emails like after I have a conversation like this and they say, well, wait a minute, Like you look at a lot of the pandemic darling stocks. Kind of funny that we're talking about memestocks today, but you saw like such an uptick in things that benefited because we were shut down, people were laid off, there were just
things we did differently. Small businesses were being created. Are we kind of though in terms of people with freelance generally speaking or doing it on their own kind of getting back more to twenty nineteen levels And forgive me, I'm only got about thirty seconds.
Got to be quick, there's.
No problem, Yeah, no worries. So absolutely the pandemic has accelerated this. But I will tell you from our research gen Z who's doing this from a full time basis, have been doing it for two plus years. So I do think there's a trend that we've got to watch out for. I do think it's going to be much more mainstream and not just a pandemic flip.
All right, we're gonna leave it on that note, Kelly. Great to get some time with you, doctor Kelly Monahan. She's managing director of Upwork Research Institute, joining us from Florida, and still got a few weeks before we get our next monthly read on the labor market. But something to think about, especially when it comes to kind of a younger generation.
A bromuk.
A journal.
Now about you let me drive?
Oh no, no, no, no, who's going to drive?
Honey?
Please?
I'll do the riding gravels. Excuse mate, I want to try to quit time lesson.
This is the Drive to the Clothes Well on Bloomberg Radio.
All right, everybody just got about just under eighteen minutes left in today's trading session.
Let's get to it.
Our Drive to the closed guest a special guest Michael Riley, co head of markets at Wells Fargo Corporate and Investment Bank here in our Bloomberg in Director Broker Studio. Also participating in the Wells Fargo Military Appreciation event here at Bloomberg Headquarters today. Michael, by the way, a decorated officer in the Navy, where he served aboard the nuclear submarine USS Memphis. Excuse me, yes, USS Memphis. Let me try
back and say that again, USS Memphis. Welcome, Welcome, Thank you for being with us.
Yeah, thanks for having me.
I think my brother was on the Abraham Lincoln.
We were talking before we got started because he was also in the Navy.
I want to ask you.
I feel like there's a million places I want to go, but I want to ask you about being in the Navy, what you learned and how that kind of translated to being in the financial industry.
Yeah, I mean it's it's a good question. I get that question a lot, especially from people from veterans as they're trying to transition out, because they don't necessarily know as much about the financial industry as as they would if they had been gone gone through school where you like I was. I mean, I had an undergraduate business degree, but I was also a chemical engineer. Right, So ultimately I was an engineer, so I didn't really know that
much about it either. It just from talking to people in networking, right, I think I think you know, and you asked the question. To answer your question in terms of what I learned, I mean, certainly perseverance is one thing, right, And and personal responsibility around things. I think. I think being in the military, you're thrown into, uh, you know, a role of responsibility much faster than most people coming
out of directly out of college. Right. So you know when I came out of college, I was I was put on a nuclear submarine, you know, basically to run a nuclear actor five hundred feet underwater. Right, So too much pressure, not too much respect. Not many people have had that experience. I mean, certainly some, but you know it was some then it was it was a life experience that you know a lot of people will never get to experience.
Well.
And I think about kind of what you're doing markets, and I feel like this environment, the m and a environment, right, I mean, it's it's a tricky one. I think people are trying to figure the way forward. You were just at Milk and we were talking a little bit about it I was at Milk and it felt like that there was a lot more optimism than we've seen, certainly the last two years.
How do you see the macro environment right now?
Yeah, I mean, look, there certainly is a lot of optimism, right I think that people have already started to look forward towards the rate cuts. I think part of the problem is they've been looking forward for a year now.
Is that a mistake in your review?
I think it has been historically, But I mean, you know, it's worked so far, and hopefully things will kind of coast in, you know, over the next six ish to nine months. I mean, now the speculation is I mean, at least probability would say that, you know, the next cut would probably be or the first cut would probably be some time at the September meeting. I mean that's our view as a house.
But we'll see probably get CPI tomorrow and then we get Yeah, I.
Mean our view was we were cut in June two. So like, I mean, it just keeps getting pushed out. I think I think there's just too much uncertainty around around you know, conflicting inflationary data versus jobs data.
Does it meant it?
Like I think about in your markets group, right, you guys are up what about thirty seven percent year every year in the last earnings report markets division in general, you also saw gains in investment, banking, the trading market space as well. I mean volatility, Like traders love volatility. That's a good thing, and you anticipate that that continues.
I do, well, I think, well, so we were thirty seven percent last year versus the year before. This year, we're kind of on par for where we were last year, so it's not really a huge gain, but I mean, certainly volatility helps. There was a lot of volatility, especially in the beginning of last year when it came to the regional bank issues that we had, and my expectation is that there will be volatility into the second half
of the year. What we've really seen so far this year is you know, a very robust issuance calendar, especially on the debt side, and the speculation is a lot of that is just stuff being pulled forward because as you get closer and closer to the election, the uncertainty around that certainly will cause market volatility, but also causes uncertainty, so you know, corporates want to get their funding out of the way now and try to roll all that forward at least that's the expectation.
But a sign of a healthy market that they're doing that and being able to do that.
Yes, Oh, it's very healthy. I mean, you know, yeah, And part of it is, you know, companies that are coming right now right certainly you know are in are in a you know, pretty stable you know cash flow standpoint, right, but for the most part, you know, thing deals are getting done.
What do you make Michael though of the M and A environment A five point two trillion in twenty twenty one that was the peak? Is that the outlier or I don't know, how do you see it right now?
I think, well, it's it's super positive. There's a lot of conversations happening from what we're hearing. Yeah, I think there is a little bit of uncertainy from a regulatory standpoint. There spend some deals that have been kind of you know, having gone so well based on that. But I think there's a lot of optimism around M and A.
I do is it mostly because of what's coming out of private equity in terms of needing to either do some exits but also having a lot of cash till to put to work.
Yes, absolutely, there is a ton of cash, just.
The private equity part that maybe is fueling.
I think, I think that's part of what's keeping things moving. But it's not just private equity, right, It's it's companies that have you know, strong cash positions that want to increase their business.
What's the biggest risk, what's the biggest thing that when you guys look at the outlook here, because I do feel like depending on the day, depending on what either FED speak or an economic data point or that for the most part, is.
What kind of makes you know, we see some movement in the markets.
Look, that's that's what's causing the market to move. And everybody is you know, you know, tied to the edge of their seat when it comes to things like CPI and data as it comes out, trying to speculate on the FED. But I mean it's pretty well telegraphed, right, like we know months ahead of time, or we we think we'll know months ahead of time when things are
going to happen. I think the biggest risk is and I mean we saw it, you know, happen, although the market didn't really react the way I would have expected them to act. But geopolitics has been a big issue and it's quiet down a lot. That doesn't mean it's going to stay quiet. I think my personal opinion is that's the biggest risk is something that we're not expecting from a geopolitical standpoint and starts to you know, change the environment out there.
Which is pretty remarkable if you think of the last two years, right, that has certainly hit us hard, and we're not done yet in terms of those two specific events, whether it Ukraine and Russia or what's going on in the Middle East. You guys are here at Bloomberg Headquarters doing this military appreciation event. I've had a great conversation
with John Weiss of Wells Fargo about it. But when you think about veterans and the things that they need and the importance of making, you know, providing for them, whether it's mental health, whether it's needing a home, I mean, how do you think about it and what's so important about it?
Yeah?
Look, I think I think when you really dig into it, veterans right have spent a period of time, a significant period of their time right basically serving their country right. And it's not just the veterans, it's veterans families. Right. I tell people all the time, my wife actually had the hard job, right because I was on a nuclear submarine. My wife had a one and a half year old and a six month old when I went on a
six month deployment, right. So you know, so it's transitioning out of the military, not just for veterans, but for veteran families, right, and making sure that we support them because it's difficult. And you know, the military is really good at some things transitioning people out. Once they're off the government payroll, they kind of become not really the government's responsibility anymore. Right, So it's really up to us to kind of pick that up, right, whether it's you know,
foundations and charitable contributions, et cetera, et cetera. That's great, right, And you know, I think and Wells part of specifically does a lot of that, right, But for me, it's actually more important around the employment and the education process, so that you know, you can take veterans who are very proud people in general, right, you get them and you teach them the ability to actually you know, get a job, work and support their family, et cetera, et cetera.
You know at at a high level, and I think I think we've come a long way in the last twenty years, but we still have a lot of work to do.
Agreed.
Agreed, And it was interesting what you said about families. I've seen a lot of things too about whether it's PTSD and the impact. It's not only the soldier who was overseas, but it's also their families who have to live with it. Michael, thank you so much and thanks for sharing with our audience. Michael Riley, he's co head of markets at Wells Fargo Corporate and Investment Bank. Joining us here in studio, you are listening and watching Bloomberg Business Week.
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