Business Goes To Chemistry Class

special edition Business Week magazine issue. This year marks the one hundred and fiftie anniversary of the periodic Table of Elements, and the team we have joining today set out to make the case for why it matters more than ever. We'll talk about the elements, commodities across the spectrum, and mine for hence regarding where we are in the economic cycle. To the nerds, this when literally goes out to all

the nerds in the world. Um, we got really carried away with this idea early in the year and we decided that we wanted to go full nerd give it one whole double issue. So it is a cover to cover special issue. There's content for all eighteen elements in the issue. The Nerds appreciate it, the Nerds rejoice, and as always, will close out the episode with our tradition the craziest thing I ever saw in markets this week. But we're also going to do that with the twist.

But Joel, I think we should leave the listeners hanging for now. Okay, but as always, remember we do have our very own podcast hotline. That number is six four six three to four three four nine zero. Feel free to give us a call, ask us any questions, leave us a message letting us know the craziest things that you guys have seen in markets, and if you're lucky enough,

we might even play your message on the podcast. I can see Joel right here, who has his very own podcast Trillions about et s. Eric Baltunas is pretty jealous. I'm definitely jealous that you guys have a hotline. I also will say if anyone has amazing stories from chemistry class in high school that relates to the periodic table, I want to know about the stuff that went down in any chemistry class. But without further ado, I would

love to introduce our great guests this week. First we have Bloomberg Business Weeks Jeremy Keane, who was really the architect behind this whole issue. That's right. Sorry, I think you could call me the chief nerd, if the chief nerd chief nerd, and I definitely call you chief nerd. Joel has described you as a walking talking person the periodic table full table. I did, yeah, no, I you know, pick a number and I will have a story QUI don't worry. Don't worry, we have a quiz in the

off thing. But also joining us over in London actually is Eddie Vanderwalt of the Markets Live blog, who also helped out with issues. So Eddie, thanks for joining us. Okay, hi guys, thank you very much for having me on. Joel I figured it. I'll just start with you, even though you are doubling as co host this week. Why did you guys actually decide to dedicate not just one single issue, but a double issue special edition of Business

Week to the periodic Table of elements. So one of the things we try to do business Week is take something, um that seems like I forgot about it. It It was in chemistry class, and you can kind of revisit things like that. And we try and do that through the lens of business. And one of the things that we know about when you work at Bloomberg is that you know,

we were just obsessed with markets. Commodities are a huge market, and when you actually think about the periodic table of elements, not with a chemistry class in mind, but a business one, effectively, we were talking about commodities. So we felt it was a very creative way to take something that we don't often talk about in Business Week, commodities, and actually basically go full Nerd on it. And in doing that we were able to like bring stories to life that I

don't think Business Week usually would touch. And I think the magic of that was really came from Jeremy, who leaned into the table, like I said, full table, and then managed to find people and stories that make you just reappreciate what it means to be a business story and a business magazine or a business journalist for that matter. I will be the first to admit, especially on this show, we typically talk about stocks, we talk about rates, we talk about FX. When we do talk about commodities, we

usually talk about oil or something of that matter. So something that really stood out to me in the issue was one section on elements that go boom and bust and this really looks speaking um, But this is really about metals, and it's an area that we don't typically talk too much about. So Eddie, why don't you walk me through the different metals that you guys looked at, And is it true that these typically don't follow the same economic cycles as you might imagine for the likes

of gold or silver that are seen as safe havens. Right, it's actually really interesting. We we looked at it. We looked at a handful of specific examples, but but this is really the story of most commodities as they come and go in and out of fashion. Because you know, it's it's really interesting when you look at the periodic table and you look at you look at the whole world around us, the vast quantity of materials and and

and objects that we use day today. There's only you know, a hundred odd elements out of which all of this is made, and every once in a while, a new use is discovered for for a given element. We looked at palladium, platinum, rhodium, irridium. These are metals that are used in small quantities by really big industries. You know, suddenly one day somebody realizes this stuff is useful for

something they've never thought of before. And the first thing that happens usually when when that's the case, is people think, wow, we haven't got enough of this stuff. The world only produces seven tons, and suddenly it goes into a mobile phone and we need you know, now we're gonna need hundreds of tons. So the price shoots up. Then you

see you see this massive reaction. We we've got rhodium, which I think has had a you know, something like a six rally in the last couple of years because it's used in the in the exhaust pipes of of of cars, and as we want our cars to be cleaner, they use more and more rhodium, is the is the theory. Then as the price goes up, then immediately people go out and they're like, wow, we've got to you know, we used to throw this stuff away, but now we've we've got to go out and explore and find more

of the stuff. And then you see the price very quickly collapse because it's gone up. So you see these kind of massive spikes in commodities in all of the elements from time to time. But these ones, particularly because they are used by large industries which aren't gonna, you know, use less of it. People are going to buy cars they use a tiny amount of palladium in the exhaust pipe. Even if the price of the palladium goes up, they're not going to buy less cars. So you you get

these spectacular cycles. But you see this repeating year in year out, and then you get people who just kind of specialize in in spotting those trends early and going out there and and getting ahead of the curve. So, Eddie, what are some of the magic qualities that these particular metals have. So your platinus vir palladiums, they they're part of the platinum group metals. They are precious metals. So they are precious because they they they are noble metals.

They don't they don't rust and so on. What you tend to see with them is with the platinum group metals in particular, which include the iridium and rhodium and a few others, they are useful as catalysts. So what we use them for is in the exhaust of a car.

We would we would normally admit toxic gases, but What happens if you if you code part of your exhaust with platinum or with palladium, is you can transform that gas into a into another gas in a really quick way, just you know, purely as it passes through this catalytic converter, and you end up with instead of carbon monoxide and Knox gases, you end up with carbon dioxide, which is which is still harmful, but not not as toxic warm in the world. You know, at least you're not maybe

killing people. You know, you're not getting giving people asthma and so on. And they used in slightly different ways, and as the price differential between the various metal shifts will use more of one and you know less of the other. But it does, it does create fairly spectacular rellies and beautiful charts. Jeremy flash quiz, what's the atomic number for rodium? Oh no, it's I knew it was

the mid forties. I couldn't pin it down. But actually, I mean, looking through all these different elements on the table, when you think about the big industries that are out there today, does anyone or do a couple stand out as you as really being heavily in demand for the industries of today or the industries of tomorrow, and the elements themselves. Well, um, you know, certainly silicon remains awfully

popular for reason. And see you would expect computer chips and and uh and they're um, you know, gold is also not only used in jewelry, but it's important. It's a component in phones. Um. You know, we talked about how for the Tokyo Olympics that are coming up next year. The story had no idea. Yeah, they're they're they're making the gold medals, silver medals, bronze medals out of materials

recovered from phones. And part of the part of that is because the Japanese just have a culture of actually recycling stuff and trying to have second life for things. And so this was a huge government backed rally to basically be like bring out your your old phones. Unbelievable, and they scavenged metal from it. Right, Yeah, is awareness and get to your metals. It's also revealed a little secret about the gold medal itself, which is that it's not actually like fully made of gold. It's like the

most minimal amount of gold possible. It's nine or something and the rest is silver. Gold medal is mostly silver. W Eddie, I want to come back to you just because I have to bring it back to markets in a sense. I mean, this past week we did get I s M manufacturing numbers in the US showing contraction for the first time since And one quality of the markets that we have been seeing lately is this unbelievable

rally in gold and in silver. I mean, when you look at these medals right now that many market participants do very much pay attention to. What are they telling you about investor sentiment or the economic cycle. Oh, I'm so glad you asked me. That is really my home turf. Look gold. The interesting thing with gold is that it is it is useful, Bob. We use a little bit of industry. A little bit goes into your mobile phone, a little bit goes into your air bag in your car.

And the reason it does is it is the best at doing what it does. But other metals can do the same thing, they just do it cheaper. But you don't want something cheap triggering your air bag in your car. You want the thing that's reliable. So in those kind of critical instances they use it. But at the right price point, we would be using gold as a conductor in almost everything, but because it's more expensive, we tend

to use copper. So the fact that there's always this potential underlying demand for gold makes gold useful as an investment and a store of value because I can buy this stuff. I know, even if investment demand completely falls away, I will always be able to find a buyer if the price goes low enough. Right. But because it's so useful, that opens up the door for it to be used

as this kind of squasi monetary as asset. But if you think about all of the elements in the periodic table, what they have in common is they are you know, they are real. There are in on the you know, on the planet that we live on. There's there's there's finite quantities of them. We have to you know, expend energy to get hold of them. So they are in a sense immune from inflation. When people worry about inflation, you could put some of your money in this kind

of real staff. And what people are worried about right now with ultra relose monetary policy is you know that potentially so we've got we've got low interest rates and we've got high relatively high inflation. In fact, what we have is is low real rates, and that's the perfect environment for a metal like gold, for any of these elements really. But what makes gold useful, more useful than say lead to store your value in, is that gold is more expensive, it has a higher value to density.

So you can store loads of money in a little bit of gold, and that's what made it useful as a monetary asset over time. At the moment, what people are worried about is they worried about low real rates and that that going forward, monetary policy is going to stay loose. And that's why you've got guys like Ray Dalio and you know, these kind of really heavyweight investors, and they are and they just they're throwing man money

at it. We've seen e t f s, we've seen solid inflows like I haven't seen in a few years, and that's why prices are up. How much did you guys actually think about or talk about and look into how investors can participate in these types of markets because typically you think, okay, you have the physical commodity of futures your ETFs, or maybe you invest in a country or a global economy that could benefit I mean, what

are the pathways, um? You know, in some cases. We looked, for example, at the hydrogen economy via Norway, where the country has really um kind of backed it and um there are certain companies that are involved that you know,

investors could certainly invest in. We also published something about how to Guy that Eddie wrote along with a few other authors, on how commodities traders do their job, especially a certain brand of adventuresome one who will go out to minds and see how small quantities of in this case, rhenium can be extracted from a mine in Chile. So you know that was that was certainly part of it, and we kind of we you know, we profiled some

smaller companies that are doing interesting things. We did a feature on Assault company in Oregon that's privately held but you know, could be an interesting play for someone. Um. We looked at cold Brew nitro cold brew coffees and how how small companies are doing that and some of

the chemistry of that. We looked at a company that's doing radioisotope generation called north Star UM, which you know that that's a process that they have the only market on doing a medically necessary thing that the US government has placed a priority on. So there's all sorts of

little tidbits like that, I think throughout the issue. One of my other favorite little tidbits is an element that I, frankly I had never heard of, or if I had heard of it, and chemistraateutually forgot about it, Uh, lutetium, which is an ingredient and a clock. There's an effort

to try and make the world's most accurate clock. And if you, if you want to step forward a couple of steps about that, because somebody else already has in the finance world, no doubt, someone's already already there before you. You think about the implications that has for finance, where milliseconds would really really matter. And uh, one of the hedge funds that seems to have some interest in in

sort of this space is Renaissance. Who's found us? But the Lutetian clock, Jeremy, what's the significance of why lutetium performs so well? There? Well? And the story is actually about essentially a race among the elements. So you know, you can't exactly place a place of future is bet on on you know which one you think will will come out in front, But um, right now that can mostly for the for the moment, they're being done out

of government agencies. But as you say, there are companies with a vested interest particular ones, and the leading efforts

right now are one spot lower on the table. Attribum is being done out of Colorado, and we looked at one of the competing elements being investigated out of Singapore, lutetium and but aluminum others are being used in the ideas that you can measure the vibrations of these atoms, and the way that you measure the vibrations lets you calculate things to a very precise um to nanoseconds essentially um, and that has implications for GPS, it has implications for trading,

for all these other things. And the it just depends on you know, a particular atoms ability to insulate itself from distractions essentially from temperature from um. But somebody bumping a table in in the next room, Um, you bump that off, your accuracy is gone. Well, it's extremely interesting. I guess I may even call it crazy. But this time around for our craziest thing I ever saw on markets, we're all going to go around to uh pretty quick fire around on the craziest thing we actually think is

on the periodic table of elements. So Joel, why don't why don't you kick us off? That was not the question that I was prepared for. But I have I have a story that actually brings me back to Eddie because Eddie and I have had this ongoing email chain for a couple of years relating to gold, which is a little hobby of Eddie's as he as he mentioned earlier. So and as you know, Sarah, you've been a guest on Trillions before. I have a little side hobby um talking about e t f s on our podcast with

Eric Baltus All Trillions, Uh. In the process of learning about gold ETFs, we learned that, you know, there's a vault that basically stores the gold that is the underlying value associated with the e t F And being a journalist and when that primarily works in magazines, I always try and put a photo hat on and be like, oh, that'd be an amazing photo. I want to see golden vaults. I would go so far as to say it's impossible.

So Eddie can probably attest to this, but at various moments in time, we've found vaults of gold and I've invited the people who are stewards have said gold to put a bag over my head to like, let me go in. I don't need to know where the vault is. I don't need to see the door of the vault or the combo on it. I just want to see the golden the vault. Um. It's a standing offer. If anybody has access to one of these vaults and would like to let me do that, I would love to

see it. But to date I have seen no gold in said vaults. We'll see if you have any luck going forwards totally, Eddie, why don't you go next? So I've got to say, I've got to say working on this issue and then reading it when it was done was one of the funnest things I've done in absolutely years, and the reason being I thought I knew a lot about you know, metals and about commodities in general, but there's so many you know, niche metals that you that

you don't hear about and so on. But my favorite by far was gallium. And the reason I chose gallium is because gallium it is a solid room temperature, but it's a quid at body temper. You know this was going to be mine too. Store. Let's see, let's see if I can top you there. Let's see, let's see what you were going to bring to the table and galleon. But it's not just that because because it changes, it

fluxes if you were to pick it up. People say that in the you know, Chemists a few years back, it made cutlery from it, and they would they would use it to play tricks on one another, like I don't know, like a Gary Larson cartoon, and they make it, they make a knife for a spoon. I took this back to my to my guy Anthony Lippman, and I

talked to him about this. He actually stopped by the other day and I talked about this, and he said, yeah, but you know what people think, this is how Uri Geller, you know, the magician, This is how he did He's bending spoon thing. Yeah, I feel like inside the magician's in a circle at this point. It'd be a huge commitment to magic my view. When I thought of Galllet and I feel like, it's like you're a superhero. You can hold metal on your hands and you can make

it melts the me. How crazy is that? But Jeremyson's Eddie stole my thunder. Anyways, why don't you give us here? Well, I can. That actually reminds me of one that my father in law told me about nitt and all um, which is a nickel titanium blend that has shape memory, so at a certain temperature, it will reconstitute itself as say a coil um. And you know, it has very specialized uses, but it's not that widely used, partly because it's such a specialist thing to do. But it looks

really cool on YouTube. But that wasn't actually the one that I was going to pick. I was gonna pick a story about naming rights, which um, you know they and that's what the element one of six Seaborgium um. It's one of the synthetic elements, which we did a big story on on how uh it's sort of became inefficient to smash atoms together to create synthetic elements. But there was a period in time when it was really

important to national pride during the Cold War. There was a U S Lab at Berkeley led by Glenn Seaborg, after whom this element is named, and they got really good at it. They invented or they discovered more of the new elements that have been added over the last

seventy years than anyone. But then a Russian lab got in on the game, West German lab gun in on the game, and there started to be sort of an arms race to like get your own square on the periodic table, and there was a lot of disputes over who actually created you know, element one o four, who created element one oh six and uh an international body

had to be brought in to resolve the dispute. They sent scientists to all the labs to say, like, okay, we think you guys actually discovered it um, so you get to name it. And some of the elements they couldn't really figure it out, so they the panel sorted out, you know, which one would be named after who, So you got elements like dubnium named after the Russian lab

and um Seaboard. Game was controversial both because it was named after a living scientist, which was regarded as a little ghosh um, but also because the body came out saying you can't do this, we we won't name it after you, and the US basically said, well to heck with that, and a powerful chemistry body that published journals that all this I just wanted to be in stood up and said, yep, we're going to keep using Seborg. Giam and the international community back down and said, all right,

Seborg game it is. So that's now element one O six. I've got to say, I never really thought about the naming of periodic elements before. I'm missing out. I love that American scientists are like, no, we're putting our foot down. Yeah we got this one. Oh yeah. And with that said, if you're interested, you can go out find an issue, pick up Bloomberg Business Week, and you can read more

about all we've discussed in more Subscribers always welcome. You can also find the issue at Bloomberg dot com, slash elements, or if you're a terminal user, go to mag Go. Joel Weber, thank you so much for co hosting. Thank you so much. Mike. I'm sorry that I'm in the running for your job again. He's scared. He's scared. And Jeremy Kean, Eddie Vanderwalt, thank you so much for joining us. Thank you, thank you, guys. What goes up. We'll be

back next week. Until then, you can find us on the Bloomberg terminal website and app, or wherever you your podcasts. We'd love it if you took the time to rate and interview the show on Apple Podcast so more listeners can find us, and you can find us on Twitter. Follow me at at Sarah Pontack, Mike is at Reaganonymous, Joel Webber is at Joel Webber Show, and check out Bloomberg Business Week at b W. You can also follow Bloomberg podcasts at podcast What Goes Up is produced by

tiber Forehead. The head of Bloomberg Podcast is Francesca Leavie. Thanks for listening, See you next time.