David Enrich Discusses the Libor Scandal

even a decade old, unfolded. Uh. We are talking about not just millions of dollars, not just billions of dollars, but hundreds of trillions of dollars that were manipulated in

different directions for people two capture some trading profits. And when you stop and think about all the assets that trade based on LIEB or UH, if you have a variable mortgage, or a car loan, or credit card loans or student loans, you may have been paying more for those interest payments due to some of these manipulations by various bankers. Arguably occasionally you were paying less because they manipulated it in the other direction. Um. The book is

really quite fascinating. I'm not finished with it yet. I'm working my way through it, but it really reads like, uh, you know, an Ian Fleming novel. It's it's a spy tail. There are some fascinating characters in it. Uh. It really is a great narrative, and David does a wonderful job bringing some really arcane uh minutia to life in a

way that's fascinating and understandable. Uh. I think that if you're remotely interested in the world of fixed income or borrowing or derivatives, this is a must read and it's gonna enter the pantheon of great financial narratives. So, with no further ado, here is my conversation with David Enrich. This is Masters in Business with Barry Ridholts on Bloomberg Radio.

My guest today is David Enrich. He is a New York Times reporter and editor UH since the summer ofen Prior to that, he worked for The Wall Street Journal for a decade, writing about banking and finance in the United States. UH. He has won numerous journalism awards, including the Overseas Press Club Award for his coverage of the European debt crisis, the George Polk Award for coverage on Instarter Trading. He won two Society of American Business Editors

and Writers Awards. David was part of two teams of journal reporters who were finalists for Pool Surprises in both two thousand and nine and two thousand and eleven. He won the prestigious Gerald Loebe Award for Feature Writing for his coverage on the unraveling of Tom Hayes, the expos about the Libor scandal that eventually led to him writing a book on it titled The Spider Network. How a math genius and a gang of scheming bankers pulled off

one of the greatest scams in history. David Enrich, Welcome to Bloomberg. Thank you. I'm fascinated by the library scandal. Folks like you and I who cover this are pretty familiar with some of the minutia and details about Libor. But for the lay person listening to this, what exactly is liebar and why is it so important? It's an acronym. It stands for the London Interbank Offered Grade and it is the world's most important number. The world's most important number.

That's quite a claim, it is. Explain why it's it's such an important number? What what is it used for. It sets interest rates on all sorts of debt all over the world. So if you have an adjustable rate mortgage, the interest rate is based on libor. If you have a credit card, a student loan, and auto loan, it's likely based on libor. If you are a big company and are issuing debt, the interest rate might be based

on librar. Same if you're a town or city. They're trillions and trillions of dollars of this stuff, trillions, trillions, And the biggest part is not the just normal debt, it's derivatives that are that you know. Originally companies or investors were using them to protect themselves to hedge the against possible fluctuations and interest rates, and later, as you know often happens in the financial world, they became a

playground for speculators and traders. So I learned a lot of different things from the book, one of which was that essentially decades ago, a Greek BANKO was trying to arrange an eighty milli million dollar loan for the shav I Ran and the syndication process lead to a question how are you going to set rates? And that effectively is the origin of live or is is that right? Yeah, that is right, and this is I really like history, and so researching this is just fascinating for me, and

they're Uh. Originally, you know, if you think about how does an interst rate come into being when a bank offers a loan to someone, how do they determine what they're going to pay? And the general rule of thumb was that they are going to base the interest rate they're putting on a loan based on how much it costs the bank to borrow money. So it's it's the

borrowing rate plus some margin, which becomes a profit. Yeah, exactly, And so obviously the banks need to have a profit, and so they eventually normally that would be simple if it's just one bank making a loan. But the history of this is that at the kind of dawn of the era where loans, big loans are being syndicated, you had a big group of banks getting together to team up on to make big loans. In this case, it was a loan in eighty million dollar loan to the

Shah of Iran at the time. And uh, how do you have different banks of different funding costs, how do you determine the interest rate? And so the innovation here was that you can have you can come up with an average basically, and you can look at how much does it if you've got ten banks on it, you take their average funding cost and that can be the

interest rate plus a little bit. And the challenge though, is that funding costs change and what you're if you're making a twenty year loan, your funding costs at year one could be very different from your funding costs at year ten or twenty. And that is a very scary thing for the banks because you know, if their funding costs go up, you could be locked into a loan

that is deeply unprofitable for the bank. And so the innovation here that they would have a mechanism where the interest rate would fluctuate over time based on the bank's funding costs. So so, given those kind of murky origins, the Greek bankers syndicated loan to the shaw of Iran. How did this become the most important number in the world.

How did this become so widely accepted everywhere? Yeah, So in the mid nineteen eighties, the British Bankers Association, which was a trade organization basically lobbying group b v A yeah, the b b A for not only the big British banks, but for many of the biggest banks in the world that had set up shop in London. They got together with the Bank of England, the central bank there, and they decided the use of derivatives was really booming and

they need figured they needed a standardized way. Instead of every time there's a loan or any type of financial contract cobbling together this kind of ad hoc system for determining interest rates, they figured it would be a much better way to standardize or much better idea to standardize this, and so live work came into existence as something that was every day around lunch time in London, a group of the world's biggest banks would estimate how much it

costs them to borrow money from each other. And you know, you could do it in different currencies, so and pound, sterling and dollars and euros, in Japanese yen, and you can do it over a different time period. So you know it's going to cost a bank for an amount to borrow money for one day or a week, or a month or a year, and the longer the duration of that loan to hire, the interest rate generally and

you can every day. So every day, at lunchtime, a group of the world's biggest banks gets together, someone comes up with an estimate for theoretically how much it would cost them to borrow money in a specific currency over a specific time period. All those numbers get smushed together, the high estimates and the lowest mints get booted out, and the rest are averaged in presto, you've got labor. That's quite fascinating. You raised a couple of really interesting

points I have to follow up on. The first is why lunchtime almost everything else is set at the close of business during the end of the day. Why the middle of the banking day, the trading day would you want to set interest rates? What what is that about? Because this was this was developed in a pre computer era, was the mid nineties, and to determine how much a bank it cost a bank to borrow money, you needed

to check with various parts of the bank. So someone this is usually a pretty low level person with kind of the bowels of the bank, and he would come in the morning and start making phone calls to different parts of the bank to try and assess how much it costs them to borrow money. And remember this isn't one phone call, because this is most of these banks are global at this point and they have operations all

over the world. And you know, so he has this guy has to call the treasury desk in Tokyo, Singapore, in New York. It's actually a full time job determining live boards. Well it was kind of a halftime, let's say. And it was again, this is someone who is usually a clerk and entry level job, an aspiring trader. So the most important number, to quote you, in the world. A bunch of lowly clerks are running around or or

sending up their desks in London making calls everywhere. And that's how this number gets a sound that well, and the joke is that and the reason I wrote a book on this, and there's been so much media coverage on this is because it was just they were They got to the point where they weren't even really make and calls. This became a number that was being pulled more or less out of thin air by bankers at a low level. And why were they pulling it out

of thin air? They're doing it because their traders asked them too. Because the traders had especially by the nine nineties and early oughts, had huge amounts of money that they were wagering on whether lib or was going to go up or down by very tiny increment. And we're talking about positions that are trillions of notational value, trillions, hundreds of trillions, of hundreds of these. This is kind

of like asking how hot is the sun? Right the the actual temperature degrees fahrenheit or celsius doesn't make any differences. The numbers so astronomically largely it literally so, So all of this raises the obvious question. On the one hand, the banks are collectively setting the number. On the other hands, they're totally interested parties who have enormous amounts of capital running on the outcome of those numbers. How could that ever possibly go wrong? How could there be a conflict

of interest in the banking industry. Yeah, I mean, it's it's funny because I've been covering this at this point for eight years, I would say, and it's that is such a fundamental question, And it's true, it's such a deeply embedded conflict of interest, that is, it's just completely inappropriate. So so who who is to blame for that conflict?

Was it just happenstance the way it developed and where were the regulators when yeah, you guys deal with hundreds of trillions of dollars bet on the direction of libor set yourselves, that's fine with us. Yeah, And this is like so many other problems in the financial arena, this is something that had fairly benign origin. And this is something that was it really was meant to be to simplify and increase the efficiency of very complicated and cumbersome

lending process. And gradually, over a period of a decade or two, this rate, first of all, be came embedded in hundreds of billions of dollars worth of American mortgages. And it didn't start out the hundreds of billions. Yeah, they's because way back in the day it was either fed funds rate or some other US based number. When did libor infiltrate there mortgages in the early nineties, and that was partly a product of library at the time was viewed as a very reliable way for banks to

estimate their funding costs. And it was. And and again that's something that in theory, if it works properly, is very good for everyone. It's good for the banks. It's also good for the consumers because it's an efficient way. It relieves the banks of any anxiety they might have that if they price alone at a low interest rate, that they're going to get burned a year or five years later. This allows them to relieves them of all that anxiety. And that's that allows them theoretically to loan

money at a lower interest rate. And and those loans typically look like libor plus two percent libor plus three, so that's their markup, that's the cost of the loan to the borrow or it's the profit theoretically to the bank. But it seems kind of funny that they get to set what. Yeah, it does seem kind of funny. Did

anybody question that arrangement? Originally? Not really, And originally this was seen as and keep in mind that the alternative to this is that just banks are arbitrarily setting loans. It's not something that is it's not like this is replacing a heavily regulated kind of government imposed rates. Previously, it was just market forces. You negotiate the best you can for the loan, and that's it. As opposed to libord plus or maybe it was the Fed funds rate

or something like that that was. But then again, since that is going to change less frequently than libra wood you, then the banks were then adding an additional buffer. So instead of maybe libor plus two per point would be fed funds plus three points, so the loans more expensive. Yeah, exactly, And so this is something the big problem that wasn't

the introduction of liborar into the mortgage market. It was the introduction of library into the derivatives market, and that happened in the mid nineties, and that was something that at the time the Commodity Futures Trading Commission had to approve this because it was the Chicago Mercantile Exchange that was looking to kind of have lib welar embedded as a mechanism and interest rate swaps, and that was it was seen as a way to make swap the swaps

market much more accessible and much more efficient and much more liquid. But at the time a number of traders warned the CFTC that if you do this, you are inviting disaster because traders at the big banks know how library works. There's completely unregulated by central banks or by financial regulators, and they it's very easy if you give banks a huge profit incentive to manipulate something. Guess what they're going to manipulate it. So, so let's stay on

that point in the book you discussed Gary Gainsler. You just mentioned the Commodity Futures Training Commission. Gainsler is the person who pretty much defang the the CFTC and then he ends up running it as the library scandal is unfolding, and for reasons I still don't understand, falsely takes claim for initiating an investigation into Libar. It actually predated his

tenure by year. Explain this mania because this is crazy. Also, well, this is the regulatory pendulum has swung so wildly, and I think it's a common misconception right now in to look at this as a product of Democrats versus Republicans and Democrats or Barack Obama versus Donald Trump, and that's just not what it is. And well, and this started

in the Clinton administration. The Clinton administration oversaw one of the great regulatory rollbacks in the of the twentieth century, and it was Bob Reubin and Gary Gensler who are leading that charge. Well, let me let me push back a little bit. So so you have Um, a number of significant Republicans in the Senate pushing pushing for this. Um, I'm drown a blank on somebody's name. I mean Phil Graham is so Phil Graham is really the ring leader

of all this. Uh. Reuben so so behind Graham, we basically overturned under Clinton and Robert Reuben and Larry Summers. I'm not gonna disagree with you. They kind of went along, get went along to get along. We we overturned Glass Stiegel. We passed the Commodity Futures Modernization Act, which basically said, yeah, derivatives free for all. And we basically took the Commodity Futures Trading Commission and turned it into a toothless tiger.

Clinton signed all these things. Some of these passed uh the House like three to one. Right now, that s there was a consensus in both parties at the time that the key or one of the keys to economic growth and too uh kind of economic growth spreading globally in the US maintaining its competitive advantage when came to financial services was to embrace a really aggressive leisay fair attitude towards all walks of financial life. And look, it's

clearly not only the Clinton administration. They but you know, the the administration and power in any given year wields a tremendous amount of clout on these things. And if if Bob Reuben, a guy who is coming from the upper echelons of Goldman Sax, wasn't uh cheerleader of this, it wouldn't have happened. And the and Gary Gensler as well, another Goldwen Sax guy. So there ends up the city.

So he he oversaw the repeal of um Glass Steagle, which paved the way for the creation of the modern city Group, which was travelers and travelers and city corps. And it then lo and behold. After leaving immediately gets hired in a very lucrative contract to do not a whole lot at city Group. So in any case, the Gensler at the Gensler in the Treasure Derment in the Clinton administration was one of the proponents of essentially neutering the CFDC, not having it the powerful force for the

regulation of derivatives. He then in the Obama era, is eager too. He sees the winds shifting, We've just had the financial crisis. He's eager for a senior administration position and the opposition to him on Capitol Hill was intense because he was so deeply embedded with the Rubin wing of the Democratic Party. And he underwent a remarkable makeover.

And Bernie Sanders was one guy on the on the Hill who had been a vigorous opponent of Gensler getting any powerful position, and Gensler just pulled this remarkable about face, and to his credit, unlike most politicians, he admitted that he had been catastrophically wrong in the Clinton administration, in the Clinton era, and he had just gotten it wrong. He and he said he had learned a lesson and was embracing very enthusiastically this pro regulation, pro government view

of the financial world. And so he came into the CFDC, which at the time was this kind of scrappy, underfunded backwater of an agency in Washington, and did everything he could to he he wants scalps. He wanted to he wanted to see the CFDC developing a reputation for being one of the uh toughest, scariest gun slingers on Wall Street. And what became this investigation into Library that became the

perfect vehicle for him. What what's so astonishing is a lot of the people who set up the financial crisis, uh during the Clinton administration. And let's hold the Republicans aside, guys like Phil Graham. But when you look at the Democrats, you have you have Laurence Somers eventually goes on to get a Chairman of the c e A for Obama. Tim Geithner, who was New York Fed Chief, eventually becomes Treasury Secretary. Gensler gets appointed to the agency that he

helped to dismantle. It's really pretty astonishing if you look at the fields of of aviation or medicine. When a plane crashes or there's a surgical problem, you don't send the same pilot back to tell you what went wrong. You don't send the same s rgin to do a post mortem. Someone else with fresh eyes comes in. That is not what we saw take place during the financial crisis. No,

it's totally true. You had a lot of the same old characters coming in, and a lot of them Geitner is an exception to this, I think, but a lot of them hailed from All Street and those are these are the same guys who had not only not stocked the financial crisis, but in a number of cases either worsened it or profited from it, and take your pick.

I don't know which of those is worse. And uh, Again, in fairness to people like Summers and Getzler, I think there is a human capacity to learn from one's mistakes. And arguably the experience of having screwed up royally and watching the financial world burn as a result in part of youuter mistakes is probably a pretty sobering educational moment. And look that everyone got it wrong. It's not just these guys, right, the media got it wrong. Everybody got

it wrong. Lots of people, a lot of people got it wrong. You know, there were plenty of people who were complaining about it and warning about it. I just I've always found it fascinating that, wait, there aren't people who weren't major contributors to the crisis to take the role of C. E. H A or Treasury secretary. I've always learned when you really screw up, hey, you know you're not going to get that promotion. Apparently DC in

Wall Street that that doesn't seem to Yeah. I mean, one of the revelations to me in writing this book is that most of the things on Wall Street and in the financial world, and I think in politics too, it boils down to incentives. And of course people's people are actually pretty rational actors if you can figure out

what's motivating them to do what they're doing. And so you see this any awhere, from kind of a low level trader starting out in Wall Street to someone at the upper echelons of a bank like Gary Ginsler, Bob Rubin, or or if you put them in government service, the

same thing. So if they they're responding to the incentives, whether it's compensation incentives or feedback or just approval ratings or things like that, and they they have everyone incentives matter, and they explained that we see and I think that's why to me, when the next crisis inevitably happens in the next scandal inevitably and will it will. It's a

question of when and where. But when it does, I think we're going to look back and see that a lot of the lessons we should have learned from the financial crisis in terms of shaping incentives in a way to encourage sober, careful, prudent behavior, we're not really heated. We instead just imposed erected all these new regulations that are just designed for the sake of regulations, they're not actually looking very closely at what motivates people to behave

the way that they do. So let's talk a little bit about Tom Hayes, the man in the middle of this. Uh, you actually won a Globe Award for your coverage of the unraveling of Tom Hayes. Who was Tom Hayes And how did he find himself in the middle of the library scandal? So? Tom Hayes is mildly autistic mathematician. He was a trader at some of the world's biggest banks. He was a guy who, like most mathematicians who are mildly autistic and gett into banking, was very good at

creating models, detecting patterns, things like that. Not very not just very good at detecting patterns. People described him as just he was a genius, all right, just brilliant at this. He was a genius, and he was one of the best traders that a lot of his colleagues had ever seen. He also was someone who was very well trained to do what traders do best, especially in a decade ago, which was to look for tiny, little inefficiencies and find

ways to exploit them. And that could mean having a faster trading system, it could mean having better intelligence, It could mean having stupider clients. It could mean finding ways to manipulate something that you are betting on the outcome of. And so so let's talk about stupider clients for a second, because this comes up in the book with there's a whole list of characters, and there are really some very

colorful characters. What is the relationship of the brokers who are working with the traders and how do people identify smarter and dumber clients. Yeah, so the brokers serve this role as the great middleman in the banking industry. And when two traders, when bank a trader bank A and a trader bank B both want to do a transaction,

they're often not talking to each other. They're talking to a broker who's in the middle and realizes that trader bank A wants to buy something and trader bank B is looking to sell the same thing, and so they'll serve as the middleman for that service. They take a cut of the the value of the transaction, and that's fine. The broker serve another role though, which is uh information brokers essentially, and they pedal gossip and they are paid

in large part to develop relationships with these traders. And the way they do that. I love this thing. It's that they have. There's a ratio of how or a percentage of the revenue that each trader generates you are supposed to as a broker recycle that back to the trader.

Define define recycle in real life? What is entertainment? It's called which is just a giant teeny budget ranks, food, strip clubs, and and and if you've got some of these traders who are generating uh millions and millions of dollars a year in brokerage fees, spending ten of that on steak dinners and nice drinks is very hard. But it's not just steak dinners and nice draders. You tell some stories. This is g rated, but you tell some

stories in the book. These guys are animals. Now they get creative, They get very creative about ways to spend hundreds of thousands of dollars a year on a particular person. And so what does that mean? That means drugs, it means women, it means trips to various places, it means just all sorts of ludicrous misbehavior. And this is something him that again is the book singles out a number of individuals for being involved in this, but this is

widespread industry practice at the time. And Hayes, Tom Hayes was not a guy who liked going to strip clubs. He was not a big drinker. His idea of a fun night out was going to KFC, getting a bucket of fried chicken, sitting at home eating it while watching Steinfeld reruns. And so this is not a guy who you can easily. He's a huge trader, but it was very hard, and the brokers were dying to do business with him because of the huge volumes he was doing. But this is not someone who is very easy to

spend your ten percent of the commissions on. And so the brokers found another way to reward him, which was that Tom Hayes was making huge, huge bets on the direction of interest rates, which meant that he had a huge, huge steak in the direction of library every day. And Tom Hayes on a given day would have millions and millions of dollars riding on whether libra or went up or down by a basis point, which is a one percentage point. So a tiny, little move that no one

would ever notice. Tom Hayes not only would notice, but cared deeply about live were moving in these tiny little increments. And so that's where the brokers came in For Tom Hayes. He realized and the brokers realized that libras set not Tom Hayes at this time worked at UBSA. Was not set by the market, but it's set by the by

the Tom Hayes works at one bank. And so Tom Hayes, as with standard industry practice at the time, the traders who were making wagers based on the direction of interest rates would call up the little clerk in the bowels of the bank and say, hey, mate, I need libor up today. Can you please move UBS submission up by as much as you can or move it down by as much as you can. Depend it was that. It was that, It was that. Yeah, it's very explicit. People

are very open about it. They were encouraged to do it. This was under the under the umbrella at the time of banks trying to improve the coordination of different parts of the bank working together, all playing in the same direction. And what role does the broker's play with these clerks? So the broker's the broker's role is that they Tom Hayes can tell the guy at UBS his colleague, to move lib Rar uper down. What Tom Hayes can't do quite as easily is called City Group or JP Morrigan,

a royal bank of the other ten banks. And because he doesn't know these guys and why would they listen to him anyway, but he can call in a favorite with the brokers. And so that he had brokers at eye Cap which is the biggest, and some other firms as well, just every single day routinely going out into the market and telling all of their context that all these other banks move live or upper down. And it was basically to benefit Tom Hayes's trading positions and the

trading positions of Tom Hayes's colleagues. Was this unique to Hayes and and Ubs was the standard practice, well, it was standard practice to be manipulating lib Or. Hayes was a really clever guy and a really relentless guy and took this to a new level. So the introduction of the brokers was something that Hayes. Hayes pioneered and that was really his innovation. That was the way that he got an edge and Everyone always talked about getting an

edge on the trading floor, and heyesn't found one. You were in London in the mid two thousand's. How did you find your way to London? How how does a Wall Street General reporter based in New York ends up in London. It was actually the late two thousands and the financial crisis here in the US had ended. Banks are getting back to normal more or less boring stuff, but a financial crisis was just dawning in Europe. I had never lived overseas and was eager for an adventure,

and London seemed like an adventure. So so in late twenties at this point, it's a decade ago. I think it was early early thirties. So now you're in London for a couple of years. You're covering finance, You're covering the banks. The middle of the night, you get a text from a phone that you don't recognize. The number of comes in tell us about that. So I was covering. I had been covering the library or what it was

now known as the Library scandal. And government had investigated all these banks and in a couple of cases, including with UBS, which was Tom Hayes's former employer had reached these huge settlements where the banks had to pay hundreds of millions, if not billions of dollars and penalties and admitted that they had been part of this global scheme to manipulate interest. How many banks wrote? How much money?

And well, ultimately it was more than a dozen banks and probably five or six or seven or eight or nine or ten billion dollars in penalties, A lot huge, widespread is this? This is in at the very end of For the first time, a guy was actually a guy, an individual, a person was held accountable for this, and that guy was Tom Hayes. He was arrested in the UK and he was criminally charged here in the un

Remember he was the first person to be charged. And my boss at the time, a guy named Bruce or While who was a great editor at the Wall Street Journal UH wanted me to write a profile Tom Hayes. And of course that seemed like a thankless task. Hayes had been you know, he'd been criminally charged. This guy's not going to talk. And so after much toing and frowing, I agreed to do this and found a woman who was his former business school classmate and got her to

talk to me, and it started painting this picture. Nothing was known about Tom Hayes at this point he other than that he was a very successful trader who had said some really stupid, uh seemingly damning stuff in againstant messages. And this woman, though, painted a much more interesting, nuanced picture of Tom as someone who was mildly autistic. He was a nerd. He was just doing what everyone else

was doing, it seemed like uh. And I convinced her to pass on my phone number to Tom Hayes and she said, of course, there's no way he's gonna call you. There's his lawyers won't let him, blah blah blah. And I was sitting at home that night on the sofa watching TV with my wife and I got a text message from an unknown number and it said this goes much much higher than me. Not even the Justice Department knows the full story. And it was Tom Hayes, and I could not believe it. He agreed then to meet

me the next day. Uh. He said, I'll meebe if I can trust you, And I said, of course you can trust me. I'm a journalist and it and he told me he'd be standing in Victoria station, which is a big busy train station in London outside the Burger King were in a brown leather jacket, and of course no one who knows what this guy looks like at this point, and I, as you can imagine, was pretty excited about that. I kind of pictured myself as Bob Woodward.

And unfortunately he canceled the next morning because his wife had found his phone and realized he was off to meet a journalist and his wife is a lawyer, and uh decided that was not a wise thing to do. But that was the start of what became a year's

long relationship I had with Tom Hayes. That and this initially started over text messages, but ultimately and I was spending what seemed like the majority of my waking hours either with him or on the phone with him, and eventually his wife as well, and they just let me inside their life for uh, pretty substantial period of time from early until mid when Tom Hayes eventually went on trial for manipulating live board. And so that was the

bag for this Walser journal series. The unraveling of Tom Hayes is that I watched this guy who had become kind of this unlikely public face of financial crime. Uh and I watched him his life disintegrate. It was fascinating and kind of upsetting. So Hayes eventually loses the case, gets what was it, a fourteen year sentence. So there's a section in the book it's jaw dropping his former bosses, his associates, all the traders he worked with, all the

brokers he worked with. Nobody else gets into trouble. How is that not only do they not get into trouble, they're all doing fine, They're all still working in the industry, they're all still making millions of dollars. How did this one guy become the full guy and everybody else skates away scott free? I mean, there are two basic reasons, too literal reasons. That one is that Hayes was stupid

and naive, and he did everything in writing. So there's this rich trove of documentary evidence that showed Hayes in text messages or chat rooms or sometimes unrecorded phone lines. Please move lie War up from me. I have a lot of money riding over and over and over again, thousands of times. Well, and the second reason is that prosecutors and regulators are a little bit lazy. They wanted to nail some people, but you know, they don't really

want to take risks. They want to go after the sure thing, and the sure thing in this case was Tom Hayes. This isn't, i think, probably an unlosable case for them, and they went after him. And what's mystifying to me is what happened next, which is that they did they criminally charged a small handful of other people of his confederates, all of whom got acquitted, but they

really didn't go after anyone higher us. And you know, this is mystifying a little bit frustrating to me because there's as much evidence that there's against Tom Hayes, there's also a lot of evidence that shows Hayes's bosses and his boss's bosses and his boss's boss's bosses not only knowing about and condoning what he was doing at the time,

but in some cases participating alongside him. And were they doing it as extensively and as aggressively as Hays and as blatantly as He's absolutely not, but these are people who should have known better, and the regulation prosecutors, I think most of these are smart, ambitious people and they should recognize how the actions that they take going after certain people in the industry. Those are have the potential be very powerful deterrent messages, and this is a huge

missed opportunity there they could have. I think they could have brought a lot more cases than they did. So Jesse Eisinger's book, which I can't say the title on of on the air the Chicken Blank Club talks about the comby That phrase comes from the Kobe speech about the prosecutors who are chickens lazy and only take easy cases. But it didn't sound like a lot in your book, the picture you paint, it doesn't sound like these are

all that different. Maybe the Hayes case was a lay down, but there seemed like a huge paper trail for another dozen people, maybe another fifty people. Yeah, there are a lot of people who have of who are caught up in this, and they're to me. At first of all, I love Jesse Eisinger's book. Everyone should read it. I think it's a perfect compliment to the Spider Network in the sense that the Spider Network show is one of these cases where there was all this evidence and most

of it just didn't get used. In Jesse's book, does a really good job of explaining some of the dynamics inside the Justice department for why prosecutors are sometimes kind of cowardly and um in this case. And I think part of the issue is that these are complicated cases. It takes a lot to bring a case, and but there's enormous resistance in the financial world, and a lot of these prosecutors are they really don't want to lose.

And to me, the power of the prosecutors have here is the simple act of staging a perp walk, of going and arresting a senior executive at a bank or another big yeah, that would have in parading them in front of the TV cameras and making them go into court and face the jury of appears, and how the fear of God put in them that they might not lose some money or might lose some reputation, might lose

their job, but might lose their freedom. That's scary. And if that prospect of the possibility of actually going to jail was hanging over people's heads, I think that would do a lot to change behavior. And we talked earlier about incentives and how people respond to the incentives are given. Both positivetives exactly, both positive and negatives. So money is a positive incentive, but prospect of serious, life changing personal

consequences is another incentive, to say the least. Uh. Let me let me sum up this conversation with the quote from the book, and I want you to respond to it. There is a tension between quote long term effective functioning of the financial markets on one hands, I'm now paraphrasing you, uh, and on the other hand, optimizing the current value of your securities portfolio. How do you uh square that circle? How do you resolve the tension between those two clearly

potentially conflicting motivations. So between just long term and short term, well, it's it's long term functioning of the financial markets. You know, during the subprime crisis, there were these bonuses that people called I'll be gone, You'll be gone, bonuses that by the time it blew up, hey will be three jobs away. It seemed that the short term totally trump the long term. But that's not what I'm asking about here. This is the actual functioning of the finance markets. So we don't

have a situation where the crepent markets just freeze. How can that inherent tension between functioning markets and optimizing portfolios. Can that be resolved? Probably not. And the one of the things I found interesting recently though, is that there

are a lot of banks out there these days. Banks used to be the model that was in vogue was to be this financial supermarket, and that included, you know, you have a retail bank, a credit card business, a mortgage business, a wealth management business, but most of all, the big revenue driver were these investment banks that a lot of it not just prop trading, although that was

part of it. It was, but there was a huge business that sprung up around serving or making trades uh in the wake of or around the business of servicing big clients and big, big institutions. And one of the things I found interest in recently that that turned into a very risky business, by the way, because you know that a lot of the there's a tremendous amount of volatility in the markets, and yes, you can make huge profits, but you can also make huge losses when the markets

turn if you don't handle it perfectly. And one of the things I found very interesting now is that if you look at the banks that investors think are the best deals, those are not banks that bear any resemblance to what was in vogue ten years ago. You're looking at banks, and the UK has some really interesting examples of these banks like Lloyd's and Royal Bank of Scotland that are these just there as boring as can be.

They're just banks that do what banks used to do in the nineteen fifties, which is they take deposits, they make loans, and it's that simple. And it turns out that if you do that properly in an economy that's pretty strong, that's an enormously profitable business and it's safe, and it's uh conservative, and it also is valuable to not just the the shareholders and executives, but to an

economy as a whole. And I think, to me, this is gonna sound old fashioned, and I think a lot of people in the banking industry probably will view this as naive and just a little too quaint for their taste. But looking at things through the prism of is there some value social economic value to what you're doing? To me that would have that's a pretty good filter for activity that is not really good for shareholders either. The huge risks the banks are customed to taking those turn

out badly way too often. So how did RBS run into trouble because they are in deep trouble. RBS is actually doing pretty well right now with the reality and they they were with the world's worst bank for up until a couple of years ago, and they managed. They had been on this acquisition spree. They were every single crisis there was RBS steps in the middle everything. When there are a lot of banks that fit that mold right.

UBS is another good example, City Group, Deutschebank unbelievable, and all these banks and and and well it's far ago. I mean, we can it's hard to name banks that haven't made these catastrophic mistakes. Chase JP Morgan is really the exception. Yeah, and Goldman too to a certain extent. I think, um, they've certainly had their blunders, but they they're not. Those are banks that have been much more conservative and I think better. Manager Stanley arguably sidestep much

of the debacle. We have been speaking to David Enrich about the Spider Network. If you enjoy this conversation, be sure and check out our podcast extras, where we keep the tapes rolling and continued discussing all things Liebor. We love your comments, feedback and suggestions right to us. At m IB podcast at Bloomberg dot net, where we keep the tape rolling and continue discussing all things lie Bar. You can find that wherever finer podcasts are sold SoundCloud, Overcast,

Apple iTunes, and of course Bloomberg dot com. You can check out my daily column on Bloomberg View dot com. Follow me on Twitter at Rid Halts. I'm Barry Rit Halts. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast, David. Thank you so much for doing this. I found I'm only halfway through the book, but I found it to be absolutely fascinating, and it unfolds like

a spy novel. It's it's really amazing characters and all these things going on, and you're kind of astonished along the way that wait, can they really do that? That? That seems like that doesn't make any sense? How much fun was this to research and write? So much fun it was. It was the most fun I've ever had as a journalist. Honestly, I found I found getting to know these characters fascinating. I found the historical research fascinating.

I actually really enjoyed the writing part two. I felt like I got h It was a peaceful, creative process for me, and I just was happy as a clam. So you you get to know the hay his family, you spend almost a year with them, than from to that early through middle of so and close to two and a half years. Are you surprised that he's the only person who ended up going to jail for this. I'm, on the one hand, surprised because that doesn't seem right

or fair. There were a few other people who got very small jail sentence is not not part of his ring, but part of other people at other banks that were engaged and have similar behavior, but the jail sentences were tiny fractions of what he received. On the other hand, though,

I'm not that surprised. And one of the things that I think has fueled the current populace movement, certainly fueled the rises of Bernie Sanders and Donald Trump in is the sense that Wall Street got away with murder and no one was held no no individuals were held accountable, while so many people in the public lost their jobs, or their homes or their savings as a result of this.

And I think there's that's that feeling that's been out there since the financial crisis that's it lends itself to demagoguery, and it's often oversimplified and not very nuanced, but there's a big kernel of truth that behind that, And drain the swamp is an effective slogan. Drain the swamps and effective slogan. And the fear that Wall Street is taking advantage and people are everyone is in the pocket of

Wall Street, whether it's politicians or proseutors. That's again, it's not that simple, but there is some truth to that, and there's no to me, there's no more powerful manifestation of that than looking at the almost uniformly low level, slightly dysfunctional, almost autistic guys who bear the brunt of the criminal accountability for actions committed during the financial crisis. It's not just haz And there's people involved in London Whale that are kind of like a little on the spectrum.

I don't know them, but that's just the sense I get. The guy who has been account held accountable for the flash crash in is a guy who is like a little bit on the spectrum. There's this is a pattern. So what was the most shocking thing you discovered while you were researching this? To me, that it was not it is not something it's going to make a sexy headline, but it was really the degree to which culture at

banks matters and has real world impacts. As someone who's been covering the banking industry in the U S and the UK for many years, I'd kind of dismissed as hogwash this notion of culture that consultants and banking executives pay lip service too. But I actually realized that it's true, and there's the culture at the institutions where Tom Hayes worked was one where envelope pushing was not just acceptable,

but it was explicitly encouraged, explicitly and explicitly encouraged. And the senior executives at a number of these institutions, not just where Hayes worked, but across the industry were doing things not just with their trading but also just what their socialized doing things that are just out of controlled drinking, womanizing, drugs, things like that that we that you can't help. But look at the behavior of a top executive as a as an underling in an organization and take a cue

from that person. If that person is doing stuff that is just nuts, you're gonna get the message that it's okay to be nuts. So so you can identify a distinct cultural difference from bank to bank, executive to executive, even if not pushing the envelope means our profit level is going to be a little less. That that works its way through the entire troops. Absolutely, And I think that we're talking earlier about how some some of the

banks have survived whethered crasies pretty well. Are the like and JP Morgan is a good example, and it's an enormously profitable institution. It's made many, many mistakes, of course, but that's an institution where it's okay to leave some money on the table sometimes. But they don't. They don't seem to make existent mistakes like like Lehman did, like There did, like City Bank there. Apparently the list of banks that have made existential mistakes is much longer than

a list of banks that have it. And I can I really can't think and not all of them, not all of the mistakes became existential because thanks largely taxpayers, but there was I mean, it's it's really hard for me to think of a bank that really managed risks well and would have been fine without government intervention. And that's that's again there's a lot of external circumstances to play,

and there's good luck and bad luck. But the reality is these banks were financial institutions in general, were responding to press again, incentives from shareholders too, and uh the analyst community to amp up profits as quickly as possible quarter after quarter, and the best way to do that is to take more risks. And that works really well

until it doesn't. So before I get to my favorite questions, I have to ask you a little bit about um, your writing process, because it really is kind of fascinating. How did you find your way to the Wall Street Journal that was back in oh seven before the crisis? Is that right? It was? I started at the journal in December of two thousand seven, so the crisis was right as the recession was started. Yeah, right, is saying that was right? I started right after Chuck Princeton Standard

Neial lost their jobs at the Maryland City Group. And I've been working at down John's News Wires, which is uh same same parent company for a few years in Washington and in New York, and prior to that had been doing other journalisms. And you were in Washington covering not banks. What were you covering? I was covering politics. My first job out of college was working for this little wire service. It was kind of Washington d C

bureau for a bunch of regional newspapers. So I was I was covering d C for a newspaper in Wisconsin. One in Amarillo, Texas where they which is home to, uh the manufacturer of the V twenty two osprey. You know there's plane. At the time they were this is in the early two thousands, they were they kept crashing and they kept inviting me to go down there and write on one, and I thought they were They were crazy. They fly now you see them around actually in the

UK uses them all the time there. You see them flying around London. They were really considered wildly over priced, bone dog one of that. I don't remember the price. I just remember the fact that they kept crashing. They weren't safe at all. They would like they would crash like ten at the time. That's not a good ratio, that's a bad number. So so you find your way to the journal, you stop covering politics, do you immediately

start covering banks out of that work? Yeah, I started covering finance at Dow Jones at news Wires, and I had no idea. I had fallen asleep for most my icon classes in college finance experience. Uh. But my first job at Dow Jones was actually, uh, my primary goal was to I had to read all these SEC filings and so I kind of taught myself what a balanced she is when income statement is how companies make disclosures,

and that proved to be a really useful skill. Um, and I learned a lot about the industries, but more important, I learned how to do research, which is kind of the lifeblood of any good business reporter. So you're covering Tom Hayes for the Journal. You're you're one of five. You know, you're one of the journalists responsible for the five part series that led to the lobe A ward. What made you say, um, let's turn this into a book.

It was, you know what it was? It was that in that five part series, and that was I don't know, it's like seven or eight thousand words, which is really

long by newspaper journalist standards, manning journalist standards. And I looked at what I had as I wrote that, and there was just I had so much more material and I felt like I was having to really leave so much on the cutting room floor, And that was the narrative in that story to me, and I think a lot of readers as well, with really powerful and it was putting a human face on someone who had been caricatured as a villain and it you know, it turns

out we all have a lot in common, and you know, once you get to know someone, you can really relate to them more. And to me, that was this is a great character, a great narrative arc, and a great opportunity to bring some of this finance stuff to a mass audience, because the finance industry over the past twenty years has done a really good job at kind of cloaking itself in opacity and making it seem like the stuff they're doing is so complicated and so important that

no mere mortal can actually understand it. And you know what, that's nonsense. There by the way, that is a feature, not a bug. When things are simple and transparent, you can't charge know that, that's completely right. They they have thrived on this lack of transparency and this kind of the mystification of the banking industry. They've thrived on it, and that drives me crazy, and it so to me this was how do you get people to actually read

a book about finance. A One way is to make it read like a spy miss spin and it does

and and that's gratified theories. That was the goal. And at the same time, you can get people to eat some of their like carrots and spinach sneak sneaking in And I feel like there's I used my parents, who don't know what's tremends amount about finance as kind of guinea pigs, and uh, that was a laborious process that might not have been great for my relationship with my parents, But so funny you say that my wife is an

art teacher, my mother is a real estate agent. And when I'm trying to explain anything in finance, if I can get if I could create an explanation that both of them easily get, I know you're in business, I know I understand it, and I know I can explain. That was one of the interesting things for me is that that act of trying to explain things, either trying to write them in really simple terms or explain them

to human beings like my book editor, for example. The act of doing that, I I had at this point been covering banks for since like two thousand and four, I think, so this is more than a decade. And uh,

I thought I did know the industry quite well. But the act of trying to explain to someone what an interest rate swap is, what a derivative is, what does the bank actually do that that was a sobering moment for me because I realized that as well as I knew this industry and as many you know, hundreds if not thousands of stories had written about it, I it was very hard to explain these things, and I don't

think I understood them fully. So I was gonna say the old line is, if you really want to understand something, teach it, because if you could teach it, then you really, you really get it. So I found myself in writing this book. There's a section on what a derivative is and what an interest rate swap is, and I remember sitting down to write writing it. Sitting down to write it, and I realized I was writing just nonsense. It was gibberish, and it was a very obvious reflection of my lack

of nuanced understanding of it. So I had to go back and I found a bunch of professors who had were former traders to kind of walk me through it, and I just read a hot and arrived at a point where I did understand. And honestly, a lot of this stuff is not that complicated when you boil it down to its essence. It's that Wall Street does a very good job of cloaking everything and acronyms and jargon and you know, just doubling the complexity for the sake

of complexity itself. So augusteen, you leave the Wall Street Journal, you go to the New York Times. What motivated that change? And and what is it like working at the Gray Lady? Um? What motivated that changes? I've been at the Journal for a long time. I love the water. Yeah, and I've been there for at the Journal for a decade, And if you count my time at DOWD John's before that, it was closer to fifth and that was a that

was a decade where a lot of stuff was happening. Yeah, I mean a lot of stuff externally, was the entire financial crisis, a lot of stuff internally. Murdoch bought the place, and look, I love the Wall Street Journal day day in and day out, do great stuff. In fact, this may or may not be a coincidence, but since I left, they've just been on this tear, one awesome scoop after another. So I'm not sure that's because I left her despite me, but there's but the time, I hope not. The times

is great. We are um in the midst of trying to kind of expand and revitalize our business and finance do so I'm the finance editor, so I run a team of I think nine or ten reporters and we're hiring, uh so, everything from banking and Wall Street and markets to UM, insurance, business, public pensions, um, the whole range of everything. So it's fun, it's busy, it's uh you know, this is I think we might be entering a new turbulent era. So there'll be lots more to write about.

So let's get to my favorite questions. I asked these of all my guests, tell me the most important thing that people don't know about you. I have been bald since I was fifteen years old. Fifteen Mikey here that so my head of research a couple of years ago and he's early thirties, just said, the hell with it. I'm just gonna start shaving. Well, that's smart. He gave up on it, Dave, as early as and often as you can. There's nothing is? So what was that like

in high school? I can't the words. I'd get bleeped out. It's awful kidding me? So not? And and you were just at the edge of the Michael Jordan era. So you wanted to be like Mike or it? You just said, is there is? Well, I yeah, shaved my head, but that was not because I wanted to be like Mike. That's because I was going bald, isn't. Wow? That's amazing. Um Who were some of your early mentors who influenced your research and writing styles? Um My dad certainly did.

He's a professor and was he teaching What does he teach? He teaches law at Northeastern University in Boston. Um My, and my mom actually was a mentor, and not in

terms of writing, but in terms she's a psychologist. And I've found that the one of the most important things about being a successful journalist is the inability to get people to talk to you, people who often aren't supposed to talk to you, get them to think that it's in their best interests to do so, and the best way to do that is to kind of understand where they're coming from and show empathy and listen. Well, and those are traits that my mom really taught me. But uh,

I mean there's throughout college. And I said a number of great professors who taught me that, you know, don't use adverbs, don't write passive sentences, use action verbs, things like that. Don't okay, don't use adverbs, no passive action words, short sentences, direct use you know, don't use a three syllable word when a one syllable word, we'll do. There's a one syllable word for syllable beat. Oh, I like

that very good. Um tell us the journalists who influenced the way you approach covering a topic, Um, the kind of great inspirations And for me, at least in business journalism or this is not gonna surprise. I mean, Michael Lewis is one of the great. Uh, nobody focuses on characters in finance the way he does. Absolutely, he's easily the best there is at that and it's just inspiring.

And to me, actually, my favorite writing of his is actually not in the finance basaying Moneyball is a book that and change I'm a huge baseball fan, and change the way I watched baseball and thinking about baseball, which is saying a lot because I at that point, I can't remember when that came out, early two thousand's probably, and I at that point it's spent my entire life obsessing over the Boston Red sucks. And to then see to view it through this entirely different prison, it's something

really exceptionally powerful. And that's essentially a book about stats, right, I was gonna I was gonna push back and say it shares a tremendous amount with the rise of quants and finance and rise and quants. It's, oh, we have computers and we understand math. Here's how to make the segment better. It just doesn't matter which the subject is. And he does a masterful job. Have you ever read The blind Side of Him? I love The blind Side

as well. It's actually his funniest book. I think is just laugh out loud segments and it's obviously a very personal book. Without spoiling any of it for anyone. Um, since we're talking about books, well before we talk about books, anyone else in the media you want to reference, Yeah, there are two others. One is Jim Stewart, who is now a columnist Thieves, Thieves, Den of Thieves and like a zillion other books, but that was the one that really Yeah, that was an amazing book and he's I'm

really proud. That's why my one of the many great things about working at the Times these days is he's a colleague of mine and I get to bounce ideas off him and sometimes the same with me. And that's saying.

And the one other personal mention is not a journalist is but it used to be is Karrik Mullencamp, who is uh, the guy who when he was a Wall Street journal reporter basically uncovered the lie Worlar scandal and real not like he uncovered like there was an investigation going on, but he did the number crunction in the analysis and something sourcing and yeah, blew the whistle on it essentially, And that, to me is the most profound example I've seen in business journalism in a really long

time of a newspaper story or a news story changing the world. So, since we mentioned uh, money ball, what are some of your favorite books finance, nonfinance, fiction, nonfiction? What what do you really like Um, I really like the business genre. Actually, and there's We've mentioned Michael Lewis, We've mentioned Denil Thus by Jim Stewart, When Genius Failed by Roger Lonstein is uh is a great one. The thing I like about I like books that have a

narrative arc, so whether that's fiction or nonfiction. And Um, to me, that's it's really I mean, I got out. I have no idea how to write a write a novel, but there's in in think that's a lot of way is harder than writing nonfiction, but nonfiction doing in a compelling way. I mean, I've done this one tonight. It's hard,

and it's really hard. And being able to find character and get them to open up to you, and being able to tell their stories in a way that not only engages readers, but it's also honest and it really reflects what's going on in a non superficial way. That's hard and it's so powerful when you can get it right. Give us one more. Another recent one is I'm gonna butcher her name, but Sheila from The New York Or her book Black Edge on Stevie is a great one. Yeah. Um,

that's that's a really interesting title. Alright, let's uh, let's talk a bit about financial journalism. What excites you right now that's going on in the world of financial media. We're just finding new ways to tell stories. I mean, the notion of a story as something with a lead and a nutgraph and uh, just all sort of garbage in the middle that runs eight words. That's gone, I mean, is not gone. It needs to be gone. It's going away, and we're trying to And again, the New York Times

is not at all alone. As the journal is doing this, Bloomberg does is everyone is doing this, but trying to find creative ways to engage readers who are increasingly reading everything on their phone is hard and really disruptive, but it's actually a lot of fun. And you can be at the big media organizations that are investing a lot and hiring really talented people that are not just writers but are also graphics people or computer programmers or audio

people or video people and doing clever, creative stuff. It's this whole new world that is not what I grew up in, And as long as you have tolerance for experimentation and occasional failure, it's a lot of fun. The so let's go down the list of these big interactive digital stories, The New York Times, the Wall Street Journal, Bloomberg,

Washington Post. There have been some amazing things, and if that's the future of journalism, you have to be encouraged, right, Yeah, I think the future of journalism is really bright right now. I mean there's uh, look, what doesn't work is giving away commoditized content for free. That's like, that's not a business model. So but I think everyone gets that at this point. There's not There's plenty of commoditized stuff out there that will be free, but that's not a business

model that that's not sustainable. Well, it doesn't generate revenue, right, No, I don't want I'm not going to pay for that, are you? Probably not? Like you need to pay for The New York Times, the Washington Post, the Wall Street Journal, the Financial Times, and a handful of magazines like The New York are in the Atlantic. But it's high quality, expensive content, and I think that's something. I mean, I think that's probably much more media than the average person

is going to consume. But there's I think people do in this day and age. I think there's the notion of fake news has resonated a lot, and people are they want to know what's really going on in the world. These are like dangerous times, regardless of your ideology, and

people are willing to pay. And it's not just news, by the way, and sports coverage is going through this renaissance where there's all these kind of localized businesses, localized business models that are popping up all over the country where people that's something people really care about. I care about that, and I subscribe to the Boston Globe for the sole reason that I want their sports coverage. And that's something that that's very valuable to me, and I

think a lot of people. You just need to do things that are valuable and not commoditized and people will pay for tell us about a time you failed and what you learned from the experience. Man, I fail almost every day. It's something really yeah, don't. I mean, I make mistakes all the time. There's uh, seriously, I make decisions that turn out not to be very good. I I mean, I have two little kids also, so that is just a huge recipe for one failure after another

as a new parent. That's uh, you know, I I do it all the time. I think the key is to just be able to yeah, own their mistake and move on. All right. That makes a lot of sense to me. What do you do for fun? What do you do out of the office to kick back, relax, stay physically or mentally sharp. I have two little kids, so I play with them, I take them outside, I ride a bike, I read a lot, listen to music,

go on vacation. I'd love to travel. Um. Yeah, I just was down in Georgia, which we've never been to, and as a work of vacation, vacation we just stay in Georgia. We were in Savannah and then Jekyll Island of Lovely Places. Jacki Island is where the fed the idea from Jacki Island, very favorite famous book. Um, if a millennial came to you and said they were thinking about a career in journalism or writing, what sort of

advice would you give them. Develop a skill that sets you apart, whether that is being really good at game people to talk to you, or being really good at writing, or learning some uh some element of computer programming, or developing expertise in audio or video stuff. Don't go the route of just aiming to be at the Wall Street Journal or the New York Times, go develop some specialization.

And our final question, uh, tell us what you wish you knew about the world of banking and finance and libor fifteen years ago, I wish someone had told me that everyone is going to try and make it seem much more complicated than it really is. When you boiled down to the essence, it's pretty understandable for someone with a brain. That's as good an answers as I've ever heard. We have been speaking with David Enrich of The New

York Times. If you enjoy this conversation, be sure and look up an inch or down an inch on Apple iTunes and you could see any of the other hundred and ninety three or so such conversations we've had previously. We love your comments, feedback and suggest Jen's right to us at m IB podcast at Bloomberg dot Net. I would be remiss if I did not thank my crack staff who helped put together the show every week. Medita Parwana is our producer slash audio engineer. Taylor Riggs is

our booker slash producer. Michael bat Nick Bolts and Slate twenties not quite not quite so he had twelve good years on you um is our head of research who helps me assemble a lot of the details and questions and really makes these shows what they are. I'm Barry Ridholtz. You're listening to Masters in Business on Bloomberg Radio.