Bloomberg Businessweek Weekend - February 6th, 2026

Summary

Bloomberg Businessweek Weekend – February 6th, 2026

Episode Overview

This episode, hosted by Carol Massar and Tim Stanovec, unpacks the latest trends and big stories shaping the global economy, with a sharp focus on artificial intelligence, strategic government action on critical minerals, shifting patterns in precious metals and cryptocurrencies, resilience in banking and small business, and the innovative battle for snow at the Winter Olympics. Through expert interviews and ground-level perspectives, listeners are given deep insight into the forces steering markets, technology, industry, and everyday business.

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Key Segments & Insights

1. Artificial Intelligence Arms Race: Earnings & CapEx at Alphabet (Google)

Timestamps: 02:32–14:38

• Alphabet’s Massive CapEx Spend:
  Google parent Alphabet reported a capital expenditure plan for 2026 expected to reach $175–185 billion, far surpassing Wall Street’s $119.5 billion expectation.
• Why Such Aggressive Investment?
  • AI and cloud require heavy infrastructure and GPUs.
  • Cloud revenues accelerating; Alphabet's cloud business runs at a $70B annual rate, with Q4 beating estimates ($17.66B vs. $16.2B expected).
  • Growth in Gemini AI app (750 million MAUs vs. 650 million expected), search ad margins remain world-leading (~70–80%).
  • Alphabet’s infrastructure is key not only for itself but for customers like Anthropic and even Apple considering using Google chips for Siri.
• Comparison to Peers:
  Unlike Meta, Alphabet’s investments can be productized for customers. Microsoft and Amazon are likewise heavily investing as the “AI arms race” continues.
• Notable Quotes:
  • "For a business that's a $225 billion run rate to grow 17%, is that at incremental margins of 70% or 80%?... that's probably the envy of the world." – Mandeep Singh [06:22]
  • "Everyone is trying to be very careful how they allocate that capacity. Every hyperscaler has that challenge and that's where, you know, Alphabet really is going big. Because they have $150 billion in free cash flow..." – Mandeep Singh [11:54]

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2. Strategic Critical Mineral Stockpile (Project Vault)

Timestamps: 17:43–23:14

• Biden Administration (and now Trump) Response:
  Launching a $12B "Project Vault" to help private companies procure and store strategic minerals, aiming to reduce reliance on China for rare earths and other crucial inputs.
• How It Works:
  • Combination of $10B federal loan and $1.67B private capital.
  • Initial partnerships with over a dozen major automakers and aerospace giants.
  • Details on what forms of minerals (raw vs. processed) and how exactly the government will buy remain to be clarified.
• Broader Significance:
  The move echoes the Strategic Petroleum Reserve, but for minerals essential to high-tech industry, affecting metal markets and trade flows.
• Notable Quotes:
  • "You have the equivalent in critical minerals of the SPRO [Strategic Petroleum Reserve]." – Joe Doe [19:41]
  • "As I understand it, right out of the gates, they intend to start purchasing critical minerals. How does that happen...?" – Joe Doe [20:13]

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3. Market Volatility: Precious Metals and Crypto, Burry’s Warning

Timestamps: 23:18–30:09

• Dramatic Drops in Gold, Silver, and Bitcoin:
  • Precious metals fell from recent highs; Bitcoin down 40% since October.
  • Michael Burry warns of a potential “death spiral” in Bitcoin, with risk of forced selling cascading through crypto and related markets.
• Expert Perspective:
  • Axel Merck (Merck Investments) notes most gold inflows are due to price appreciation, but recent market stress sparked “long term investors” to buy gold on the dip.
  • Merck asserts that Bitcoin acts as a risk asset (strongly correlated with S&P 500) while gold is non-correlated and defensive, attracting fundamentally different investors.
• Regulatory and Systemic Considerations:
  • Gold and silver derivatives, particularly unregulated products in China, heighten volatility but US margin rules limit systemic spillover.
• Notable Quotes:
  • "Bitcoin is still trying to figure out what it wants to be when it grows up… it's very clear that it is a risk asset, whereas gold is a defensive asset." – Axel Merck [29:14]
  • "The purpose of these rules… is not to prevent you from making a stupid decision, but that your stupid decision doesn't wreck the system as a whole." – Axel Merck [27:49]

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4. Regional Banking: ConnectOne CEO Frank Sorrentino on Growth and Opportunity

Timestamps: 33:02–43:15

• Regional Bank Outperformance:
  Investors rotate from big nationals to regionals; ConnectOne’s market cap up 7% YTD, mirroring the regional banking index outpacing majors.
• Consolidation & Opportunity Post-M&A:
  US sees continued M&A in banking supported by accommodative regulation, but every transaction opens opportunities for smaller institutions to capture clients and grow.
• Small Businesses and Construction:
  • ConnectOne’s clientele is optimistic, with Sorrentino citing chronic undersupply in housing and robust demand among builders.
  • Regulatory and political barriers, not financing, are described as the real bottlenecks to affordable housing.
• Fed Policy & Macro Perspective:
  Sorrentino supports a data-driven, balance-sheet-focused approach at the Fed, emphasizing that true market health lies not just in rates but in overall systemic liquidity.
• Notable Quotes:
  • "Our job is to continue to make ourselves unavailable to be sold. But certainly that's always a possibility..." – Frank Sorrentino [35:27]
  • "If we're not growing ConnectOne, we're not going to be able to satisfy our clients' needs as they're growing." – Frank Sorrentino [38:36]

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5. Brooks Running: Resilient Consumers, Global Expansion, and Berkshire Stability

Timestamps: 48:10–58:21

• Athleisure & Performance Market:
  Brooks posts 16% growth in 2025; consumer demand is resilient, with running and walking culture booming globally.
• Global Expansion:
  • China is a major new focus, with plans for 30 stores by 2027 and 245% YoY growth in China sales.
  • US and Germany are other major strongholds (US: 80% of revenue).
• Innovation and Supply Chain:
  • Focused on product innovation for runners (biomechanics, authentic branding).
  • Navigating high tariffs via cost adjustments.
• Ownership Matters:
  • Remaining with Berkshire Hathaway is touted as a strategic advantage, allowing 10–20 year planning horizons.
• Leadership Transition:
  Greg Abel shows continuity with Buffett's culture at Berkshire.
• Notable Quotes:
  • "Ownership matters in business. We're lucky and fortunate to have the ownership of Berkshire Hathaway." – Dan Sheridan [53:00]
  • "Our consumer is very, very healthy right now and it's rooted in the participation… Brooks is winning the runner at the cash register." – Dan Sheridan [48:41]

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6. Small Business Snapshot: Brad Finkel, Hoboken Farms

Timestamps: 61:15–71:54

• Pulse of the Consumer:
  • Small business owner Brad Finkel notes fear and confusion among consumers, with a clear shift from dining out to home cooking.
  • Affordability and value dominate purchasing decisions.
• Resilience & Story of Growth:
  • Finkel’s company grew from farm market stands to supermarket shelves nationwide (and abroad) by listening to customer needs and leveraging community relationships.
  • Funding growth through community connections rather than formal institutional rounds: "$4 million raised in Series A from customer-investors."
• Tariffs & Stability:
  Tariffs on ingredients directly impact costs; stability is crucial for planning.
• Notable Quotes:
  • "This feels kind of like a combination of both, not just confusion, but fear." – Brad Finkel [63:44]
  • "[Farm markets are] both an ecosystem and an incubator." – Brad Finkel [69:58]

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7. Snowmaking and the Future of Winter Olympics: Cloud Seeding

Timestamps: 76:47–88:14

• Olympic Challenge:
  2026 Winter Games in Italy threatened by warming winters; snow arrived just in time.
• Cloud Seeding Innovations:
  • Growing use of cloud seeding (silver iodide particles, from ground or aircraft) to coax precipitation.
  • Drones, as launched by Rainmaker, promise more precise delivery at scale.
  • Efficacy remains unproven in natural settings; expert Katya Friedrich notes stronger evidence in lab, less so in real-world storms.
• Ecological & Economic Impact:
  • Most science finds minimal ecological risk; cost-effective relative to mechanical snowmaking.
  • States like Utah spending millions to secure water supply for ski resorts and critical watersheds.
• Climate Realities:
  • Even if seeding works, rising temperatures erode the viability of traditional winter sports; ski resorts are hedging geographically.
  • All former Winter Olympics cities have warmed nearly 5°F since 1950; up to 13% of global ski areas may lose natural snow by late 21st century.
• Notable Quotes:
  • "Cloud seeding… acts as a catalyst. This little chemical acts as a tiny piece of ice… and you have fresh powder. That's the theory at least." – Kyle Stock [78:19]
  • "Drones… get these chemicals right where they need to be in a cloud, right where they want them to be." – Kyle Stock [82:14]

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Memorable Moments & Notable Quotes

• On AI Investment:
  “Everybody says these guys have to spend, these hyperscalers, right, in order to compete. Is there some truth to that?” – Carol Massar [10:47]

• On Bitcoin’s Identity Crisis:
  "Bitcoin is something that still wants to decide what it wants to be when it grows up." – Axel Merck [26:28]

• On Consumer Sentiment:
  "I think the consumer is scared. I think the consumer is confused. I think the consumer is trying to grab onto some form of an idea of what they can plan for and they can't find it." – Brad Finkel [62:14]

• On the Fragility of Winter Sports:
  "All the cities that stage the Winter Games since 1950 have heated up… by an average of 4.9 degrees Fahrenheit." – Carol Massar [87:13]

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Episode Flow/Structure

• Opening:
  • Headlines on AI, Alphabet earnings, precious metals, government action (Project Vault).
• First Hour:
  • Alphabet and AI, critical minerals, metals and crypto volatility, regional banking outlook.
• Second Hour:
  • Running boom and Brooks’ strategy, small business profile (Hoboken Farms), and the future of snowmaking at the Olympics.
• Closing:
  • Reflection on consumer and labor market fragility, looming winter sport challenges, and reminders to catch further coverage on Bloomberg platforms.

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A Valuable Listen For

• Business and Tech Leaders:
  Rapid shifts in AI, infrastructure, and policy.
• Investors:
  Market dynamics, risk factors, and real-world drivers.
• Policy Watchers:
  U.S. government industrial strategies, climate adaptation.
• Small Business Owners:
  Candid insight on resilience and customer adaptation.
• General Audience:
  Understanding the macro—and human—side of current economic stories.

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For a full episode, search "Bloomberg Businessweek Weekend - February 6th, 2026" on your preferred podcast platform or access via Bloomberg.com.

Transcript

[Carol Massar]

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[Tim Stanweck]

Show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures.

[Carol Massar]

Bloomberg Audio Studios podcasts radio news this is.

[Dan Sheridan]

Bloomberg Businessweek daily reporting from the magazine.

[Joe Doe]

That helps global leaders stay ahead with.

[Tim Stanweck]

Insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio Hi everyone.

[Carol Massar]

Welcome to the Bloomberg businessweek Week Weekend Podcast. Well, artificial Intelligence was in full focus this past week as Elon Musk is combining SpaceX and his X AI in a deal that values the enlarged entity at $1.25 trillion. Tim, that's a lot.

[Narrator/Host]

It is, and an AI automation tool from Anthropic sparked a rout in stocks across software, financial services and asset management. The latest evidence that AI applications have expanded from web based chatbots to algorithms that can automate a slew of enterprise workflows. And that's got some investors freaked out.

[Carol Massar]

It does indeed. We also got an update on the AI spend and impact thanks to earnings from Alphabet, Amazon and a few others. As for Alphabet, it's CapEx man, it was a bit of a shocker. We'll have more on that in just a moment.

[Narrator/Host]

Plus a volatile week for precious metals and a substack post from Michael Burry noting the recent slide in gold and silver amid a warning about Bitcoin's recent plunge and how it could deepen into a self reinforcing, quote, death spiral. Some thoughts on that in this hour too.

[Carol Massar]

We'll also talk about using drones and cloud seeding to bring snow to the slopes. That's in our second hour.

[Narrator/Host]

All that to come. We begin with earnings from Alphabet, one of the two MAG7 to report this week, Amazon being the other. The Google parent, which is one of the world's largest market cap companies, reported a capex spend number that blew away Wall street estimates.

[Carol Massar]

It certainly did. It had the stock bouncing around a lot, breaking down the results as they cross the Bloomberg. We take you back there and to our chat with Bloomberg Intelligence Senior global head of Technology Research Mandeep Singh and Dan Ives, Global Head of Tech research at Wedbush Securities. Dan's Wedbush AI Revolution ETF counts Alphabet as the fund's third biggest holding. Mandeep kicking it off, honing in on that capex spend by Alphabet when you.

[Mandeep Singh]

Think about the year over year growth rate for 2026 we are talking about almost a doubling of the capex. They were around 95 billion for 2025. So at the high end we are, you know, talking about doubling.

[Narrator/Host]

Look, that's huge after we thought 2025 was a big year.

[Mandeep Singh]

No. And after the meta print it became obvious that these companies are going to step up in terms of their capex spend.

[Narrator/Host]

So but this is. But as you've reminded this is different than Metta because Google can use this capex to then sell to other companies.

[Mandeep Singh]

For Google Cloud, which actually saw a pretty nice sequential acceleration.

[Narrator/Host]

Meta platforms doesn't do that.

[Mandeep Singh]

Better platforms doesn't do that. But these companies also consume a lot of the GPU and the AI infrastructure capacity in house. And look, they gave a token count number again which I always look for the 10 billion tokens per minute for their APIs. So that just goes to show the trained LLMs are being used in the real world. And in the case of Meta, yes, there is a higher uncertainty around how their GPUs are being used. But in the case of Alphabet, you see it in the print. In terms of Gemini Maus going up to 750 million, the API token count going up. So cloud revenues accelerating search growing 17%. That's all AI overviews. Only thing that disappointed was YouTube and I just don't know.

[Carol Massar]

So that wasn't a disappointment.

[Mandeep Singh]

There was. And look, Metta just came up with a quarter where they grew 25%. Yeah, they raised the guy to 30% next quarter. So from that perspective, YouTube was light and I don't know the reason why.

[Carol Massar]

Okay, so that's certainly a question that that's got to be pushed on that. On the call going back to search, I mean, they talked about exceeding $400 billion for the first time, annual revenues in total. And you talked about some of the other usage points. So the payoff, the we're clearly seeing when it comes to Alphabet, I mean.

[Mandeep Singh]

For a business that's a $225 billion run rate to grow 17%, is that at an incremental margins of 70% or 80%? I mean, search margins are probably the envy of the world in terms of, you know, how much money they print from search ads.

[Carol Massar]

How come my Google home is so slow though? Because since they added AI, it takes forever to get an answer.

[Narrator/Host]

Well, I mean, you need a new Google home. Yeah. Or you need to update that connection.

[Carol Massar]

Hey, it's pretty good.

[Narrator/Host]

Mandeep. Fourth quarter Gemini app monthly active users 750 million. The estimate was for 650 million monthly active users. What does that exactly measure? Is that people using the standalone Gemini app, or is that me who's never used that app and instead just using mobile Google search, but Gemini within Google.

[Mandeep Singh]

Search, and also they do bundle Gemini with their Google one subscriptions. So if you are a paid user, then you could buy their bundle where they will sell you cloud storage and other things as well. But these are standalone Gemini users.

[Narrator/Host]

So we should look at this as compared to monthly active users for chat GPT.

[Mandeep Singh]

Yeah, 900 billion versus 750.

[Narrator/Host]

What if we. What. What do we know about people who use Google's products the way that I use them? Which is like, recently I started using chat GPT and cloud less because I've realized that the AI function within Google Search has gotten pretty. Pretty good.

[Carol Massar]

Yeah.

[Narrator/Host]

When you look at it from like an LLM perspective, and they just released.

[Mandeep Singh]

This personalized intelligence which Basically connects their family of apps, you know, Gmail, Google Search, Chrome usage to Gemini. So they can personalize a lot of things for you than just you know, you searching based on a prompt, which is what you're doing on ChatGPT. And that's the advantage that Google has is their family of apps. And that's why Meta is really building their AI data center capacity. Because if you want a personalized agent, you want to give them the context around what you are doing and how you are spending your time. And Google knows that because of gmail, because of YouTube and all the family of apps they have.

[Carol Massar]

Let's just remind everybody where we are. Alphabet blowing past invest investor expectations when it comes to spending reported fourth quarter revenue to that beat expectation not typically a good thing.

[Narrator/Host]

No go past those.

[Carol Massar]

Yes, the Google parent saying it will spend 175 to $185 billion this year compared with the 119.5 billion that analysts had expected. Fourth quarter sales excluding partner payouts were 97.23 billion, surpassing the 95.2 billion expected on average. We want to bring also into the conversation Dan Ives of tech Research over at Wedbush Securities. He also has the Dan Ives Wedbush Revolution etf. Alphabet by the way, is the fund's third biggest holding. Dan is with us from Miami. Good to have you here Dan, with Tim and Mandeep. Your reaction to Alphabet Look, I mean I think it's just further, I think.

[Mandeep Singh]

Solidifies what's happening this revolution. I mean look at the spending, look.

[Carol Massar]

At the monetization and look it goes back to look at this tech earnings.

[Mandeep Singh]

Season Palantir look at hyperscalers last week as Mandeep talked about I think to some extent in terms like this white.

[Tim Stanweck]

Knuckle, the nervousness that we're seeing, it.

[Mandeep Singh]

Just further solidifies the spending, the monetization, the cloud, the moves that enterprises are making.

[Narrator/Host]

Is this how great in your view is this increased expectation, increased Capex versus expectations for Nvidia and Broadcom?

[Tim Stanweck]

It's look it speaks to the narrative.

[Carol Massar]

That we saw with Microsoft, that we've seen with Meta, we've seen across the board just further speaks to this arms.

[Dan Sheridan]

Race that's playing out across AI.

[Mandeep Singh]

And then when it comes to Capex.

[Carol Massar]

No obviously AMD stock sold off. But again this is like room wasn't.

[Dan Sheridan]

Built in a day.

[Carol Massar]

You got to think about this is.

[Joe Doe]

Multiple years re 4 trillion that's going to be spent.

[Mandeep Singh]

And I think that's look that's the one thing where you know and I've seen it being in CS be in Davos. Mandeep and I were there.

[Axel Merck]

It.

[Dan Sheridan]

The spending is unlike anything I've ever seen.

[Mandeep Singh]

You know going back to late 90s.

[Carol Massar]

In terms of spending everybody says these guys have to spend these hyperscalers right in order to compete. Is there some truth to that?

[Mandeep Singh]

In the case of Alphabet, not only have they trained their own model but the anthropics model is trained on Google TPUs and now you have got Apple saying they will use Google's chips. So three out of the big players are, I mean we talk about applications and how good Alphabet is in search. This is about their chip prowess. And you know the fact that three Frontier Labs or companies are using Google's chips, that's a testament to their mode and how well they have integrated vertically. And the chat, the Apple thing is huge. I think that's why they are really ramping up the capex here.

[Carol Massar]

Right?

[Mandeep Singh]

Because they can see the demand just from one company. I mean imagine if Apple wants to roll out Siri powered by Google.

[Carol Massar]

I mean that's what they're relying on, right.

[Mandeep Singh]

I do think there is a lot of embedded business that's coming from Apple in that capex guy.

[Narrator/Host]

Mandeep, you were doing some multitasking, you were looking at your terminal. What else sticks out to you from this print? What are we missing?

[Mandeep Singh]

I think after the Microsoft print I thought maybe, you know there were concerns around the cloud growth and Microsoft talked about allocating some of their capacity to first party. This is a supply constrained environment and everyone is trying to be very careful how they allocate that capacity. Every hyperscaler has that challenge and that's where you know an Alphabet really is going big. Because they have $150 billion in free cash flow, they can afford to go up to 180 billion in terms of capex companies that don't have that operational cash flow, they are the ones who have to think about okay, how much do I raise my CapEx? But Alphabet has that $150 billion operating cash flow.

[Narrator/Host]

Did. Do you have a calculation Mandeep, for how much of the infrastructure spend a company like Alphabet uses for its own services versus selling to third parties?

[Mandeep Singh]

I mean you can model it based on the cloud revenues that they are generating and that cloud business is close to a $70 billion business.

[Narrator/Host]

Fourth quarter cloud revenue 17.66 billion beating estimates of 16.2.

[Dan Sheridan]

Yeah.

[Mandeep Singh]

So $70 billion annual run rate. Compare that to an azure which is $100 billion plus run rate. So and you can see all these companies were spending capex close to each other. Microsoft obviously was spending more because they had that OpenAI partnership. But I mean about, I would say 30 to 40% capacity in the case of Alphabet is getting allocated to cloud and they are using a lot for AI overviews and their internal family of apps. And then the training component is huge when it comes to these LLMs as well.

[Narrator/Host]

That's Bloomberg Intelligence Senior global head of Technology research Mandeep Singh and Dan Ives, Global head of Tech research at Wedbush Securities. They reacted just as earnings were crossing.

[Carol Massar]

We should point out that that conversation you just heard was as the numbers from Alphabet were crossing the Bloomberg terminal, the stock was kicking around. It sold off a lot initially. Then we saw it rally a little bit. And as the call went underway with the C suite over at Alphabet, the company's CEO Sundar Pichai said Alphabet continued to demonstrate momentum in its cloud and search advertising businesses. Backlog for the cloud business or revenue under contract not yet booked, more than doubled year over year reaching $240 billion again, according to Sundar Pichai on the company's call. But I gotta say Tim, investors still a little bit spooked by that capex number. You can read more all about Alphabet's results just check out thebloomberg or bloomberg.com you are listening to Bloomberg Business Week. Coming up there's the AI build by Alphabet and many others. You know about that. There's also though the race to stockpile critical minerals.

[Narrator/Host]

The White House pounding up billions of dollars to do that. That's next. This is Bloomberg.

[Tim Stanweck]

Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC SEC Registered Advisor Generated Assets is an interactive analysis tool output is for informational purposes only and is not an investment, recommendation or advice. Complete Disclosures available at public.comdisclosures Now I'd.

[Carol Massar]

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[Tim Stanweck]

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[Dan Sheridan]

Us live on YouTube.

[Carol Massar]

This past week, President Trump announced plans to create a strategic Critical mineral stockpile with $12 billion in seed money, a bid to insulate manufacturers from supply shocks as the US Works to slash its reliance on Chinese rare earths and other metals.

[Narrator/Host]

The plan, it's dubbed Project Vault, would combine $1.67 billion of private capital with a $10 billion loan from the US Export Import bank to procure and store minerals for automakers, tech companies and other manufacturers.

[Carol Massar]

Now, critical minerals span everything from aluminum to zinc, but its smaller niche markets such as rare earths, is where federal buying is more likely to Move prices and impact trade flows. We caught up with Bloomberg News economic statecraft reporter Joe Doe to break down the key goals of Project Vault.

[Joe Doe]

They're launching a $12 billion fund of sorts to purchase critical minerals to put into a strategic stockpile that is specifically available to US Private companies. We've had a national defense stockpile on critical minerals, rare earths, held by the Pentagon for decades. And we use that for obvious concerns of the case that a massive war breaks out and that suddenly we'd be cut off from supplies abroad. But there hasn't been anything specific to private companies. One of the reasons we're getting here is because we obviously had a long discussion about export controls for the past year that China in particular put on a number of rare earth. And I think that was the kind of question that has started to enter the mindset of the administration and why we're looking at a project like this now.

[Carol Massar]

Hey, Joe, is this kind of akin to something like the spro, the Strategic Petroleum Reserve? Okay, it is. And yeah, go ahead.

[Narrator/Host]

I like the Strategic Bitcoin Reserve, truly.

[Joe Doe]

Yeah.

[Narrator/Host]

I'm serious. I think the critics would be out there say, hey, there's no use. You know, we can use the spider. We can use critical minerals, but we can't use Bitcoin. And that. This, that's a serious issue.

[Joe Doe]

I think on some level, this is the way that folks at the White House have been looking around it, which is that you have the equivalent in critical minerals of the spider.

[Carol Massar]

For an investing audience who's listening and watching right now, does that mean, basically the US Is saying, you know, we're going to support you guys, at least in this administration?

[Joe Doe]

Yeah. I think you have this, this seed money. Right. There's about 1.6 billion that's private capital alongside this 10 billion that's going to be from a loan from the Export Import bank in the United States, rates. And we've seen some of this before, right? Where it's like, you see that there's private money that comes in alongside federal money. The idea being that, okay, if the federal government is sitting here and backing a project, then it makes sense for private investors to say, okay, it's worth. Worth it for us to come in too. As I understand it, right out of the gates, they intend to start purchasing critical minerals. How does that happen? Well, an important part of this is the administration is apparently in this initiative signing, already signed up more than a dozen OEMs. OEMs, right. Just like actual consumers of critical minerals. You have Stellantis, Boeing, GM or some other ones we've reported that have already been brought on to this partnership. Presumably they will be the ones indicating to the vault. Here are the critical minerals that our industries need, Right? So automotive or aerospace or other industrial sectors. And then they take the direction from industry of what they should have in this stockpile and begin to go out and buy. So how long does all that buying take? I don't know. I think that's a detail that we're going to have to get from the administration. I've heard the idea that there's not too much of concern that they can go out and actually spend a lot of this 12 billion very quickly to build up this stockpile as quickly as possible. But again, things sound easier than they actually are when you have to actually go out into the market and start acquiring these materials.

[Narrator/Host]

Acquire them? Do they acquire them as raw materials? Do they acquire them as processed materials? Joe? And given that capacity in some of these cases to process these is absolutely dominated by China, how does the US Even fill the vault?

[Joe Doe]

As we understand it, it is critical minerals, which could mean anything on the critical minerals list as deemed by the United States Geological Geological Survey. So rare earths are on there, copper's on there. A number of other, like, major metals are on there. What I think one of the things the market does need to understand is like, are we talking about raw or are we talking about concentrates? Are we talking about refined metal? And then, you know, listen, people are even asking, like, wait, will this eventually include derivative products? Our reporting right now says that it is strictly to critical minerals, but these are things that the market's going to have to find out from the administration.

[Carol Massar]

Can we assume that this is not just a Trump administration thing? Can we assume that this emphasis and whatever is set up today is going to continue into whoever is in the White House following Donald Trump?

[Joe Doe]

Carol, I mean, you're asking a question that goes beyond a question that should be asked of just this strategic stockpile.

[Tim Stanweck]

Right?

[Joe Doe]

It should go to the equity investments and the grants and the loans being given out to companies and everything else that the United States federal government's gotten its hand into. And this is a conversation I have every week with people asking, well, what does all of this mean when Donald Trump leaves office? I mean, I don't have an answer. And I don't think even the smartest people who are on the inside of all these things truly can give a firm response on what that means.

[Narrator/Host]

That was Bloomberg News economic statecraft reporter Joe Doe.

[Carol Massar]

All right, from Rare Minerals to precious metals. Gold and silver both saw dramatic drops to start the week down from an all time high at the end of January. Now, this week's volatility extended to crypt cryptocurrency as well. People were making some connections between both. Got to point that out, Tim.

[Narrator/Host]

In a substack post this week, Michael Burry of Big Short fame argued that the original cryptocurrency bitcoin, which has fallen 40% since peaking in October, has been exposed as a purely speculative asset failing to take off as a debasement hedge similar to precious metals. Further losses, he argued, could rapidly strain the balance sheets of major holders, force selling across the crypto ecosystem and trigger widespread value destruction.

[Carol Massar]

Hey, Axel Merck, he is president and chief investment officer of Merck Investments. He weighed in on the relationship between cryptocurrency and precious metals. This is something Michael Burry wrote about in his substack post and Axel also talked about whether he sees that as a potential risk as bitcoin continues its downward plunge.

[Axel Merck]

Just for the record, we also caution about the financial crisis. It wasn't just Michael.

[Carol Massar]

Well then you are the perfect on many levels. But first I want to ask you about a because as we were prepping early this morning on our show Call, your AUM has soared. Is that just because of the rise in gold prices or is that about new investment money coming in? Because that's quite a jump in one year.

[Axel Merck]

It's both. We have one product that's an open end product. We've had inflows and the price of gold has appreciated substantially. The other one is a closed end product and it's all internal performance. So both growth, it's just a sign of the environment that we're in.

[Kyle Stock]

Right.

[Axel Merck]

We've been talking about this and views that have been on the fringes are moving more towards mainstream and this market isn't so huge and so you have some outsized returns.

[Carol Massar]

How much though are the flows increasing? I'm curious how much of it is flows? How much is it a price appreciation?

[Axel Merck]

Much of it is appreciation. Very notable. We had some significant inflows at the end of last week when we had this downdraft and this was one of the signs that the long term investor considered this a buying opportunity. I'm not going to predict what the price of gold is going to do tomorrow, but we clearly had some, some outstanding returns on the upside. But there seem to be cooler heads in some places and we tend to attract a more long term investor. Let's keep that in mind. As well, the speculators tend to go to other products.

[Narrator/Host]

So let's get to your warning and to also to Michael Burry's warning. The, the interesting part that we're pointing out from the Michael Burry piece on the Bloomberg terminal, he's warning that Bitcoin's plunge could deepen into a self reinforcing, quote, death spiral, inflicting lasting damage on companies that have spent the past year stockpiling the token. He argues that Bitcoin has been exposed as a purely speculative asset failing to take off as a debasement hedge similar to precious metals. He cited the fall in the crypto as particularly to blame for the recent collapse in gold and silver as corporate treasurers and speculators needed to de risk by selling profitable positions in tokenized gold and silver futures. Do you, do you agree with that assessment and that connection between silver and gold and Bitcoin?

[Axel Merck]

Well, some of it. Clearly when, quote unquote, everything is levered and you have a deleveraging going on, quote unquote, everything is coming down. The one thing I do, I framed Bitcoin as something that still wants to decide what it wants to be when it grows up. And part of the reason why I've said that is that unlike gold, crypto has consistently been highly correlated with risk asset with the S&P 500. So when risk is off, when the S and P goes down, crypto goes down. Obviously not any every day, but quite a bit consistently. Whereas precious metals have a long term correlation of zero towards risk assets, correlation phases in and out. And so sure, in a downdraft, when there are speculators in gold or silver, it can be taken down. But I think gold has shown that it has a different dynamic. But at the other end of the spectrum, sure, if Bitcoin continues to plunge, those who have levered up with crypto, including those special purpose companies, they can suffer disproportionately to, to put it kindly.

[Carol Massar]

But the impact on these tokenized gold and silver futures, I mean a small role in the pullback or is it just a case of gold and silver axle running up so much and so a pullback of some sorts was, was, was to be expected?

[Axel Merck]

Well, when the product is based on derivatives and a lot of attention has been focused on this Chinese silver etf. The Chinese don't have many investment options and so they tend to pile into a product and when that product is based on derivatives, it's a recipe for disaster. And in the US we have margin requirements, they tend to increase when Volatility goes up, that's a healthy mechanism for correction. Remember, the purpose of these rules be that from the regulator from exchange is not to prevent you from making a stupid decision, but that your stupid decision doesn't wreck the system as a whole. And so I mention that because the fallout is limited if the system is well designed. Now, clearly on the crypto side, a lot of unregulated products, but we've seen a natural selection there. And so yes, there may be some spillover because the speculator might be active in one more than one area. And last year speculators have kind of gotten back to precious metals where they used to be before there were meme stocks. But overall I think we see, see it unfold here. Right? There's increased volatility, but gold bounced back. We are just around 5,000. And so that's much healthier than, than in the crypto side where, where the animal spirits are. The beginning at the end of everything.

[Narrator/Host]

You said that Bitcoin is still trying to figure out what it wants to be when it grows up. Is this proof that it is not digital gold?

[Axel Merck]

Well, it's different. It's, it's clearly different. I think there's amazing value in the underlying technology. But Bitcoin themselves remains to be seen. Now clearly I know all the arguments that are in favor of it and at the end of the day though, it is about mass psychology and the track record of Bitcoin is just very short. And I'm not saying that the dynamics cannot change over time once it gets more mature. But for the time being the joy is very clear that it is a risk asset, whereas gold is a defensive asset. And defensive has to be taken with a grain of salt, of course, because it's also very volatile. But the dynamics are very, very distinct. And as such I think they attract different investors. But clearly there, there is this, this tension between the two groups and it's good that there's a choice for investors ultimately. Right?

[Narrator/Host]

That was Axel Merck, president and chief investment officer of Merck Investments.

[Carol Massar]

Still ahead on Bloomberg Business, we connect one Bancorp CEO on why investors are paying attention to the banking sector.

[Narrator/Host]

This is Bloomberg.

[Tim Stanweck]

Support for the show comes from public. On public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index, and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated Assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comdisclosures hi, I'm.

[Carol Massar]

Cindy Crawford and I'm the founder of Meaningful Beauty. Well I don't know about you, but like I never liked being told oh wow, you look so good for your age. Like why even bother saying that? Why don't you just say you look great at any age, Every age. That's what Meaningful Beauty is all about. We create products that make you feel confident in your skin at the age you are now. Meaningful Beauty, Beautiful skin at every age. Learn [e-mail].

[Tim Stanweck]

Every year people make the same fitness goal Train harder. But most fail because recovery gets ignored, especially connective tissue that muscles depend on to grow. Frog Fuel was developed by Navy SEALs and perfected by a Stanford trained scientist, delivering 15 grams of nano hydrolyzed collagen protein that digests in just 15 minutes. It's science backed and ready to drink. No mixing, no sugar, no junk. This year, don't just train harder. Recover smarter. Go to frogfuel.com that's frogfuel.com stay unbreakable this is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay 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 11:30 Investors.

[Carol Massar]

Have been rotating out of the bigger national banks and into the smaller and medium regional lenders this year. The KBW Regional Index rose more than 7% in January, outpacing about a 2% bump in the KBW Bank Index of big banks.

[Narrator/Host]

We spoke with the head of one regional bank, the CEO of the New Jersey based Connect One Bank, Frank Sorrentino. The bank has a $1.4 billion market cap. It's up about 7% so far this year and we really want to talk to him about today's environment.

[Frank Sorrentino]

Doing great 26 is a great year ahead of us. I really believe a lot of people said, you know, survive till 25. Well, here we are, it's 20, 26, and things are looking really, really up. So very confident about what's. What's happening.

[Narrator/Host]

Well, as Carol mentioned, it's not just that you guys betting on the U.S. spain's largest bank, betting big on the U.S. we already have foreign banks here. What's your view on the deal? What's the competitive landscape for the US and like, for business?

[Frank Sorrentino]

Look, you know, there's a lot of consolidation going on in the US Markets for financial institutions. You know, the United States is a sort of a rare breed across the globe, where we have some 4,300 banks today, which you don't find in most countries. And so there's a natural consolidation going on. We have a very, very accommodative administration and regulatory agency that are allowing for some of those M and A activities to take place. And, you know, notwithstanding what everyone would like to say about the US and all the headlines and whatnot, there's a lot of foreign capital that wants to find its way into the United States. And so when you see a deal like this that you just announced, clearly that's foreign capital moving to make an investment here in the United States, you know, for banks like Connect One that are in the. In the market in the region that Webster was in or is in, you know, we see that as a boon for us.

[Carol Massar]

So why?

[Frank Sorrentino]

Well, anytime there's consolidation like that or a merger, clients get impacted. You know, the ability to do certain types of loans may go away, certain products get phased out or whatnot. There's a lot of. There's a lot of turmoil in that wake. And so generally, smaller banks are there to pick up the pieces. And so we're, you know, we're. We're excited to see this transaction take place.

[Narrator/Host]

We've asked you in the past about M and A, mostly from the perspective of you going out and buying other banks. What about bigger banks coming knocking on your door? Does that happen?

[Frank Sorrentino]

Listen, it's always. Yeah, it's always, you know, I've said to our investors, you know, everyone, where, you know, our job is to continue to make ourselves unavailable to be sold. But certainly that's always a possibility for every institution, and it should be for every company. Right?

[Axel Merck]

A.

[Frank Sorrentino]

It forces you to run your company in the best way possible. But, you know, certainly there's always that opportunity out there.

[Carol Massar]

Did you say availability to be sold?

[Narrator/Host]

Always.

[Frank Sorrentino]

Every company should. Every company should look at their, their, you know, their business plan and their model. Looking at what?

[Kyle Stock]

Value.

[Frank Sorrentino]

If you want to talk about a value of a company.

[Narrator/Host]

Right.

[Frank Sorrentino]

The value is what someone's willing to pay you for it.

[Narrator/Host]

Right, right.

[Frank Sorrentino]

So, you know, how do you, how do you set the company up to be the most profitable, the best company in your market, in the products that you provide. And if that's true, they'll always be someone interested in an acquisition.

[Carol Massar]

But sometimes you have to spend money. Right. To do a strategy that pays off longer term.

[Frank Sorrentino]

So profitable it may not be financial profitability. You know, I mean, are we creating value?

[Kyle Stock]

Value?

[Carol Massar]

Yeah.

[Frank Sorrentino]

And so, you know, one of the things I'm most proud of, we've been at Connect1 21 years with pretty much the same management team and we've created an enormous amount of value over those 21 years. And no one's been able to buy us.

[Narrator/Host]

Not yet. That's right.

[Carol Massar]

But you're open to it.

[Frank Sorrentino]

As I said, I think everyone, I think everyone should be open to that.

[Carol Massar]

We were talking with our team here, by the way.

[Frank Sorrentino]

You just saw it in the transaction.

[Carol Massar]

I know, right, yeah.

[Frank Sorrentino]

That was a fantastic company. Well run, well managed, great markets. And someone offered them, you know, a price they just could not refuse.

[Carol Massar]

I mean, what's fascinating, I think around us we used to have a bunch of retail and then they left and two banks have opened up. Citibank across from us and is a capital one. It's like a cafe and so on and so forth. It's not retail that's coming in. I just feel like banks are popping up. I mean, banking has been a pretty good business for a while, especially the last couple of years, it feels like.

[Brad Finkel]

Yeah.

[Frank Sorrentino]

And I think it will continue to be.

[Carol Massar]

And is it because of the consolidation or is it.

[Frank Sorrentino]

Well, that's part of it. What is it?

[Carol Massar]

That's really juicing it look, part of.

[Frank Sorrentino]

It, certainly, if you have less banks. Yeah, it's, you know, you're going to, first off, you're going to have bigger banks that have bigger balance sheets and the ability to provide better products and services, businesses, and that's more desirable. We're also seeing, you know, at the ground floor, all of our clients are getting bigger and smarter and more sophisticated and so they have needs for, you know, more financial products. So not to dismiss, you know, the small community bank that doesn't have a lot of that product and service set, but what we see here, certainly in the New York metro market, our clients are getting larger, they're getting Bigger, they're entertaining M and A. And so they're leapfrogging in size. And so they need, they need a bank that can continue to service their needs. And so part of our growth strategy, yeah, it's, you know, we want to create value and we want to grow our earnings and all that other stuff. But I also recognize if we're not growing Connect one, we're not going to be able to satisfy our clients needs as they're growing. And to me, that's an incredibly important part of our organization.

[Narrator/Host]

One of the reasons we like to talk to you is because you have a great view on small business, specifically on construction, on builders. That's sort of the DNA of your bank. You've been really consistently quarter after quarter, at least with us optimistic about that demographic that you serve. Does that optimism remain today?

[Frank Sorrentino]

Yeah, nothing's really changed in my view. And through, you know, the clientele that we have relative to, when we talk specifically about construction and you know, probably in multifamily and industrial warehouse and manufacturing in those areas, there's just not enough product on the market. And when it comes to, you know, apartments and homes and condos, we are so woefully short, specifically here in the New York metro market that I don't think you could build enough to satisfy that in any short period of time. So to say I'm optimistic would be an understatement.

[Carol Massar]

Well, what do you make of the story? I mean, we were watching homebuilders on the move this week and this is, it was at Lennar and I found, forget who else that has apparently approached the administration about building affordable homes. They call them Trump homes, including private investors. It sounds like there's a lot of details to be worked out. I don't know. How are you viewing something like that? Does this kind of make sense as maybe a first step to figuring out a strategy or does it? I don't know.

[Frank Sorrentino]

Yeah, so the answer is yes, it's a great idea to think about affordability first, you know, relative, relative to, you know, new homes, home ownership and it's rent to buy. I think, I think home ownership is great, you know, all these other things, but, you know, the real impediment and the reason why we don't have enough homes today is not because of capital and it's not because of bank lending. It's, there's, there's political change that has sort of crept into the system. You just can't build. You have to, you know, between environmental issues and, you know, the parochial Town issue, town by town issues, zoning issues, insurance needs, whatever it is creating, you know, creating this environment where it's just difficult to build. So unleash, you know, unleash the ability for builders to build and you'll have affordable housing.

[Narrator/Host]

You guys are talking about housing, and you've got me thinking about infrastructure. And maybe it's because we're seeing this right now in of terms in the midst of a sort of unprecedented or historic freezing weather here in New York and challenges that are associated with that. But you've got a lot of big players betting big on infrastructure right now. Are you, are you able to play in infrastructure at all?

[Frank Sorrentino]

Most of it's bigger than, you know, what we can manage. But I would agree that, you know, there is so much need for infrastructure. Build, you drive on any road, go across any bridge. It's really, you know, that I use the subway often here in New York. I mean, there's clearly a need for infrastructure spending just about everywhere, but it's.

[Narrator/Host]

Right now that's a little too big of a swing.

[Frank Sorrentino]

Generally. Those things are, they're, they're beyond our balance sheet capabilities.

[Carol Massar]

We've been talking kind of macro and.

[Frank Sorrentino]

Big, but hold on. Those, but however, all of that infrastructure, I'm excited. That's part of my speech too, that all that infrastructure capital that's coming in, you know, when they, when they repave the turnpike or they build a new section to the subway or, or, you know, build any of these products. Think about it. They all need shovels. The workers all have to go to the deli. They all need their clothes clean, they all need to buy shoes. And those are all the businesses that connect one supports economic velocity. Infrastructure. Yeah, infrastructure spending is great for the economy.

[Carol Massar]

All right, what about President Trump's new choice of a Fed chair? Will he be potentially great for the U.S. economy?

[Frank Sorrentino]

Look, you know, he's an interesting, he's an interesting choice based on what everyone expected. I think he's the exact opposite of what everyone expected would actually happen. And if you look at his history and what he's focused on, the thing that I like the most is that he is data driven. And I've said that those words on this show often. You know, I think the Fed needs to look at the data and make decisions about what they're going to do with our money supply. He's, you've heard me speak many times on this show about that interest rates maybe aren't the most important thing we need to be focused on, but the Fed balance sheet is and very few people want to talk about that. He wants to talk about that. And he is saying that Fed balance sheet is too big. It needs to be reined in. It is causing market distortions. And really interest rates can afford to be lower if we get the Fed balance sheet on the and I happen to absolutely agree with that position.

[Narrator/Host]

That's Frank Sorrentino, founder, chairman and CEO of the New Jersey based Connectone Bank.

[Carol Massar]

I have to say this is a voice we love to lean on for a lot of different reasons. Yes, the lending environment when it comes to individuals and certainly to businesses. But he just kind of gives us a very real perspective on things. I feel like never afraid to say things. And he even admitted, as we heard in the conversation, that last year he was very optimistic. And that was a bit of a contrarian view considering all of the volatility, but his optimism feels even more confident this year.

[Kyle Stock]

Yeah.

[Narrator/Host]

And it comes from a place of really understanding what these small businesses and what these construction companies and these contractors that he lends to are doing and seeing in the environment. It's one of the reasons we like talking to him because he does have exposure to that group of clientele that really is putting shovels in the ground and spending money on building.

[Carol Massar]

Yeah. I also love like whether it's affordability in terms of housing, whether it's artificial intelligence, you know, talking about, you know, kind of his real view about kind of watching how this stuff is evolving and what needs to be done to either protect us in a world of AI and also how do we really get to affordable housing. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Coming up in the next 60 minutes, with the winter Olympic Games underway, we take note of host Italy firing up snow cannons for Alpine skiers and really what Olympic cities in the future and really some closer to home already are doing to keep the snow coming.

[Narrator/Host]

Plus the CEO of Brooks running on the business and the consumer. It's a Berkshire Hathaway company and a check of small business. The head of Hoboken Farms on going from farm to your table.

[Carol Massar]

This is Bloomberg businessweek. I'm Carol Massar.

[Narrator/Host]

And I'm Tim Stanweck. Stay with us. Today's top stories and global business headlines are coming up right now.

[Tim Stanweck]

Support for the show comes from public. On public, you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt from renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comdisclosures hi, I'm.

[Carol Massar]

Cindy Crawford and I'm the founder of meaningful beauty. When Dr. Sabah and I decided to do a skincare line together, he said to me, we are going to give women meaningful beauty. And I said, that's exactly right. We want to give women meaningful beauty. Which means each and every product is meaningful. It has a reason to exist. It's efficacious. You're going to get results and then you just go out and live your life. Meaningful beauty confidence is beautiful. Learn more@meaningful beauty.com.

[Tim Stanweck]

Every year people make the same fitness goal. Train harder. But most fail because recovery gets ignored, especially connective tissue that muscles depend on to grow. Frog Fuel was developed by Navy Seals and purple perfected by a Stanford trained scientist delivering 15 grams of nano hydrolyzed collagen protein that digests in just 15 minutes. It's science backed and ready to drink. No mixing, no sugar, no junk this year. Don't just train harder, recover smarter. Go to frogfuel.com that's frogfuel.com Stay unbreakable. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch.

[Dan Sheridan]

Us live on YouTube.

[Carol Massar]

Plenty ahead in our second hour of the weekend edition of Bloomberg Businessweek. While the Olympics, yep, they are underway in Italy and for the Winter Games. Generally we are seeing warmer temperatures and that is posing issues for host countries. They are making multimillion dollar investments in sophisticated snowmaking systems to create and maintain optimal surfaces in hopes of avoiding even costlier cancellations or relocations of races.

[Narrator/Host]

We'll hear about some systems that are being used to make snow here at home in the US plus how a family owned business that started as a farmer's market grew into a national company that sells pasta and tomato sauce all across the country.

[Carol Massar]

First up this hour, a look at the consumer and the ever popular world of athleisure and workout clothing and sneakers. To be quite honest, we do that with the CEO of Brooks, Dan Sheridan.

[Dan Sheridan]

Hi, Carol. Thanks for having me back. Happy to be here.

[Carol Massar]

It's great to have you here with Tim and me. Lots to get to. We're going to get to it. I got to say with the backdrop of markets though, and some nervousness out there and bitcoin's continued slide, I got to ask you about the macro and I got to ask you is, does anyone buy your sneakers with bitcoin or crypto?

[Dan Sheridan]

I think if they do, it's a very small percentage. You know, I think for us, we just finished our, our 20, 25 year and we grew 16%. So our consumer is very, very healthy right now and it's rooted in the participation which we've talked about in the past. More people around the world are running and walking and Brooks is winning the runner at the cash register. And so our consumers holding up.

[Narrator/Host]

We just, we talked with you back in October was just ahead of the marathon here in New York City. Curious how your world has changed since, since then. What can you tell us about changes in consumer demand since then? Supply chain improvements or supply chain changes, the business outlook? What has changed in a few months?

[Dan Sheridan]

Yeah, well, I think you always start with the consumer. And our consumer is very resilient. You know, we compete in, in maybe the most competitive category in sporting goods. We're the number one brand there. And what we're seeing at the consumer level is because running is so important in their life, they trade off on other discretionary items. But the shoe and apparel always wins because it's so important in their life. And we're seeing it around the world. Tim, the consumer is very, very strong in our category. Our EMEA business was up over 20%. Our Asia business growing really, really nicely for us. And so it's not just a us story here. It truly is a global story for us. And we're winning. You know, in terms of supply chain. We've seen it somewhat normalized over the last call it four or five months. We had a lot of tension in the trade discussions and, and we've got our arms around that. But I would tell you it's stabilized for us in our category.

[Carol Massar]

Well, you know, and I do wonder so in terms of tariff concerns, global supply chains, things have settled down and you feel like where they are, they will stay that way for the next couple of years.

[Dan Sheridan]

Yeah, we're, we're hopeful. I mean, based on the signals that we track, we think we're in a, in a, in a, in a solid spot right now. Now what we know is that things are changing rapidly in terms of the discussion with the administration. But for our category, we, you know, we have high tariffs. I think last time we were on, we talked about it, our tariffs are extremely high for this category. And so we went to work on that through the whole value chain to get our arms around it. We're going to see some compression in terms of profitability. But in terms of the long term vision, we think we've got our arms around it and we'll continue to monitor.

[Narrator/Host]

Hey, I want to talk a little bit about China because in the fall you told our Bloomberg News team that you were going to make a big investment in the next few years. 30 stores in China by 2027. China sales in 2025 for your company up 245%. At the same time, Nike, Adidas, Lululemon, they've been struggling in China. What are you doing differently?

[Dan Sheridan]

Yeah, again, it starts with the consumer and what we know about the Chinese consumer is as the middle class is, is growing, this is the perfect time for a brand like Brooks to enter. We, we deliver fantastic performance product consistently over time. We have a brand energy that resonates with the Chinese runner and we're engaging in the communities that are, that are, you know, part of the run community over there. And so the store is central to that in China. And so our rollout of stores is, is a big part of this. But we're having a lot of success online with those running communities and, and we're new entry into, into China. So the growth we're experiencing is incredible and it's just a testament to how we enter markets and how we execute. Our team is, is executing really, really well over there.

[Carol Massar]

It does sound really good. And I am curious about longer term future plans. You are obviously part of the Berkshire universe and have been for a while. Would you guys ever consider maybe an acquisition to expand into some of the adjacent categories? Talk to us about kind of expansion and strategy plans and we're also always curious like could you guys go public at some point or do you think that you're going to stay within the Berkshire homestead for a while more?

[Dan Sheridan]

Boy, Carol, I hope we stay forever with Berkshire and I believe we will. You know, the biggest advantage we have at an ownership structure is Berkshire Hathaway. I talked to you about this last time. We're so fortunate to be owned by Berkshire. And more importantly, I as a CEO have a very long time horizon that I focus on because of our ownership. And that's a benefit to us in every decision we make. Ownership matters in business. We're lucky and fortunate to have the ownership of Berkshire Hathaway. And we continue to take a long term approach to this strategy for when we enter markets like China, like in Europe, and the exposure that we have there and the growth that we have there. The fact that we can focus on 10 and 20 year horizons here is very different than our competition. And I don't take that for granted.

[Carol Massar]

That's actually very Chinese if you think about it in terms of strategy.

[Narrator/Host]

You know, last time we spoke with you, Warren Buffett was still at the helm of Berkshire Hathaway. Now it's Greg Abel. How is that going so far? How does his leadership compare to Buffett's? What's he like? What are his priority priorities? What is your contact with him been?

[Dan Sheridan]

Yeah, I would tell you the word that comes to mind is consistent. It's consistent with the culture of deserved trust and empowerment. Greg has always led with that. It's consistent with, in terms of how they think of the subsidiaries. And so Greg is a very consistent, consistent manager and will remain that for us. I believe that I had a unique opportunity in December to travel to Omaha and spend some time with both Greg and Warren and now Adam Johnson, who's now leading our division. And I could tell you that the same things are true throughout the leadership at Berkshire and what an advantage for Brooks.

[Carol Massar]

Hey, one of the things. And we're talking with Dan Sheridan, CEO of Brooklyn Running, joining us from Seattle, Washington. Dan, we talked about the Chinese consumer and sounds like things are going really well. I would love to know what is the breakdown between Europe, China, the US And I want to just, if we can kind of drill down a little bit more into how the US consumer is doing.

[Dan Sheridan]

Yeah. So for our business, Carol, the U.S. is our largest region. About 80% of our global revenue comes out of the U.S. and that's why it's, it's so exciting for us in terms of the growth that we see ahead. We are very meaningful in the European market. We're the number one brand in Germany now in performance run. It's been a, you know, a 10 year vision of ours to achieve that. And we're, as I said, we're just getting started in China. So when we look at the total addressable market, it's a $48 billion market in terms of run. And, you know, where we invest is in the top countries where running running is exploding. And so the markets that we're set up in are the ones that we're investing in. And Western Europe's a big investment. China is a big investment. And as I said, the consumer's super healthy there. It's rooted in participation. What we track our participation metrics. In the US there's about 50 million runners, consumers that run twice a week. We think globally, that's close to 200 million people that are. They're choosing this activity. And Brooks is winning with that consumer. So the consumer super healthy.

[Narrator/Host]

So on the. On the consumer and the consumer choosing Brooks, why are they choosing Brooks? From a technological perspective rather than a competitor such as Hoka or Nike, what is the differentiator with Brooks Running's technology?

[Dan Sheridan]

I love the question, Tim. This is why we exist. We're a product company first and foremost. And so innovation for the runner is why we win every single day. We spend hours, months, years researching the biomechanics of human motion. We are in the business of keeping people healthy, running farther, faster, longer, and we've been able to do that consistently. We're in our 25th year of 14% compounded annual growth because of the position we have in product. So we win first and foremost in product. The second thing is we execute really well as a business. As you can imagine, global supply chains, we sell in over 55 countries around the world. We have developed a supply chain and an operation excellence that we think wins in every market. And that's not easy to do. That's the really hard part. And then this brand speaks to runners. We're an authentic, relevant brand that understands the journey of runners around the world. So when they're looking for a brand, they find authenticity in our brand. And that combination works in every market we've gone into. And so we often say we study our competition, but we really obsess on the consumer. And we've been able to stay ahead of the consumer in product, in execution, and with our brand ethos of let's run there, and it's working in every market we're competing in.

[Narrator/Host]

That's Dan Sheridan, CEO of Brooks Running.

[Carol Massar]

You're listening to Bloomberg Business Week. Coming up, the farmers market stand that grew into a pasta and tomato sauce business, selling food all across the United States.

[Narrator/Host]

The head of Hoboken Farms with A great read on the backbone of the US Economy. Small Business. This is Bloomberg.

[Tim Stanweck]

Support for the show comes from Public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comdisclosures hi, I'm.

[Carol Massar]

Cindy Crawford and I'm the founder of meaningful beauty. When Dr. Sabah and I decided to do a skincare line together, he said to me, we are going to give women meaningful beauty. And I said, that's exactly right. We want to give women meaningful beauty. Which means each and every product is meaningful. It has a reason to exist. It's efficacious. You're going to get results and then you just go out and live your life. Meaningful Beauty Confidence is beautiful. Learn [e-mail].

[Tim Stanweck]

Every year people make the same fitness goal train harder, but most fail because recovery gets ignored, especially connective tissue that muscles depend on to grow. Frog Fuel was developed by Navy Seals and perfected by a Stanford trained scientist. Delivering 15 grams of nano hydrolyzed collagen protein that digests in just 15 minutes. It's science backed and ready to drink. No mixing, no sugar, no junk. This year, don't just train harder. Recover smarter. Go to frogfuel.com that's frogfuel.com Stay unbreakable. This is the Bloomberg Business Week Daily Podcast. Listen Live each weekday starting at 2pm Eastern on Apple CarPlay 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 11:30.

[Carol Massar]

So when we can we really like to step away from the barrage of headlines that are Important and yet sometimes distract from understanding the US Economy at its core. And at that core, we mean the individuals who run small businesses, the backbone of the U.S. economy.

[Narrator/Host]

According to the U.S. small Business Administration, the U.S. has more than 36 million small businesses. And those businesses provide close to 46% of employment in the private sector. And our conversation with Brad Finkel covers exactly that. He's CEO of Hoboken Farms. It's a family owned company. It started out as a local farmer's market. It's grown into a business that sells pasta and sauces all over the country.

[Carol Massar]

I have known you a long time and I want to get into how you've gone from farmer's markets to so much more. But I want to also ask you, because you guys, I've been to your, your, you know, bought from your different stands and Hamilton Park, Jersey City. I have, I have, I have. And so you guys have people out in front talking with consumers all the time. How would you say the consumer's doing right now?

[Brad Finkel]

I think the consumer is scared. I think the consumer is confused. I think the consumer is trying to grab onto some form of an idea of what they can plan for and they can't find it.

[Carol Massar]

So being more discretionary and spending. Do you see that?

[Narrator/Host]

I.

[Brad Finkel]

Well, in my exact world, I find consumers are not going out to eat to restaurants as much. They are cooking at home, so they're coming to us. But they certainly want unbelievably high quality and they also want value for their money.

[Narrator/Host]

You know, I see that too. People aren't ordering food as much here in New York City. They're not getting delivery as much.

[Carol Massar]

We're definitely not doing that.

[Narrator/Host]

I talked about to some folks about this for a couple of reasons. One, the prices have, with all the fees added on, have been incredibly high. So, yeah, I think people are cooking more at home. Is this a different, how is this moment different from other moments that you've sort of experienced being in this space? I know that your business has grown a lot in recent years, but you've had a good eye on the consumer for quite a long time.

[Brad Finkel]

You know, we, I started my business in 1992. Yeah, we participate in up to 800 farm markets a year. That's outdoors, underneath tents, on the street, face to face with our consumers. In 2001, you know, we were there during 9, 11, then during the recession, we went through that. This feels kind of like a combination of both, not just confusion, but fear.

[Narrator/Host]

This is such a different message than we're getting from the executive. The big companies.

[Carol Massar]

Yeah. Who seem to be still upbeat about a lot of things.

[Brad Finkel]

Well, I mean, if you're an investor, that's great, but if you're trying to feed your family and you're not going to restaurants anymore and you're going to supermarkets, and if not supermarkets, farm markets.

[Carol Massar]

This is why I've loved talking to you over the years. You've also been a real estate investor, you've sold businesses. But it's, it's what really matters when it comes to small businesses. Is it changes in the administration? Is it any of that stuff?

[Brad Finkel]

Far be it for me to be able to say what matters, but what matters to me is stability. If I'm going to plan for next month, next year, I have to be able to have an understanding of what it is I'm planning for. I mean, for instance, our pasta sauce is, you know, popping up on shelves across the supermarkets of America. Tariffs hit our ingredients and our cogs go up. What do you do about that? So as a small business, you know, it, it is something that hits our pocketbook. Last night I just read a, a posting from a really well known restaurant that it's closing its doors and it was really like, I cannot do this anymore. It is just a horrendous place in the country to be able to, to do.

[Carol Massar]

You know, we saw that during COVID We were shocked by how many even like very well known chefs and restaurateurs who were struggling and we thought they would be good. We want to get to your story because farmers market is where you began. You have tons of farmers markets and you're doing it in crazy weather and even this weekend in the cold. How do you get to where you've got multiple, not brands, but jars of sauces, different things, and you become a much bigger business. You're in a ton of stores around the country. And tell me if I'm wrong, because my daughter said, I think I bought them in London.

[Brad Finkel]

We do have a couple of places in London that you can buy it at. Smaller, independent. In fact, we just got an order from Ireland today and the tariffs affected. Now all of a sudden there's a lot more hoops that we have to jump through. So I was a teenager living in Hoboken, New Jersey, playing bass in a band in a van, touring from, you know, Hoboken to Maine, down to Virginia to Memphis to Nashville into Austin, Texas. And as you could imagine, that is not a great plan for financial stability. So I was going to Ramapo College in Mahwa, N.J. up Route 17. And I would meet these nice kids who aren't from Hoboken, and they would say, would you like to come over from my house? And I said, yes. And then I would get a phone call. Hey, my mother wants to know, could you bring some mozzarella?

[Tim Stanweck]

Sure.

[Brad Finkel]

My father wants to know, could you bring a baguette? Some baguettes from dom's Bakery at 6 and Grand? Absolutely. And this kept on happening. And I said to my grandmother, do they not have bread and cheese where they live? But what it was in my sociology class that I heard about was the gentrification in Hoboken had started. These were ex Hobokenites who had moved to the suburbs. And I started a home delivery service. Literally, if you called me and left a message on my old cassette answering machine on Monday, I delivered to you on Tuesday. If you called on Thursday, I delivered to you on Friday. And I ended up with a couple of hundred customers. One of those customers was a gentleman named Peter Baronio. Peter Baronio became the economic development, development director for Englewood, New Jersey, called me up and said, we're having a farm market. Would you like to come? I said, what's a farm market? And he said, I don't know, but we're having one.

[Carol Massar]

Is that crazy? Because they're everywhere now.

[Brad Finkel]

Well, now they are, but kind of started as a side hustle. I made a marinara sauce, and that marinara sauce really took off. Now, that's kind of the short story. People would stand online and buy it by the case. A very important buyer from whole foods saw that line of people, tried our sauce, and called me up on a cell phone and said, we'd love to have you in our stores. And I said, which one? They said, all of them across the northeast. So that started my journey from farm market to supermarkets across America.

[Narrator/Host]

We're speaking to Brad Finkel, founder and CEO of Hoboken farms here in the studio. You brought. Brought a selection of what you do offer, includes pasta and sauces. How have you been able to keep the taste and the ingredients consistent as you've scaled and gotten bigger?

[Brad Finkel]

Oh, wow.

[Narrator/Host]

We go, have you. Were you able to do that?

[Brad Finkel]

Well, we go, yes. We go to every run. We are there. So we're tasting tests. We're tasting color. We're tasting viscosity. We have sugar content, so. So if it does not meet those expectations, it gets donated to the community food bank of New Jersey.

[Carol Massar]

But I want to go back, because I know this. You had mentioned to me that one of the reasons you got into sauce is your customers started asking for it because I bought your ravioli, and people were like, can I get some sauce?

[Kyle Stock]

Right.

[Brad Finkel]

So all day, every day, we sell now hundreds of thousands of loaves of bread and tons of mozzarella and burrata, countless coolers of ravioli. And people would come to us and say, do you have any sauce to go with that ravioli? Nope. Do you have any sauce to go with the pasta? I do not. Finally, a guy, a very Jersey guy, came over and said, hey, dummy, who are you standing next to? And I looked to my right, and it was Kurt Alstead from Alstead Farm. There was Dale from Stony Hill Farms. There was Matt from Cherry Grove Farms. There was Doug from Race Farms. Fellas, gotta get some tomatoes and some basil. And we started making some sauce.

[Narrator/Host]

But you also mentioned that you have to get some ingredients from outside of the U.S. well, olive oil.

[Brad Finkel]

Yeah.

[Narrator/Host]

I mean, okay.

[Brad Finkel]

Yeah.

[Narrator/Host]

So is that it? Is that everything else is from. From Jersey?

[Brad Finkel]

We do our very best. You know, our original ingredients came directly from the farm markets. We are. We have to make sure that we have the best tomatoes, the best basil, the best onions.

[Tim Stanweck]

What I think is a lot of sauce.

[Carol Massar]

What is so cool is, though, it's like you listen to the community or the community says, do this, and then when you go to make sauce, you look around you and you embrace the community to do it.

[Brad Finkel]

Well, a farm market is both an ecosystem and an incubator.

[Narrator/Host]

Right.

[Brad Finkel]

So it's an ecosystem.

[Carol Massar]

Right.

[Brad Finkel]

You know, I need tomatoes and basil, and there's tomatoes and basil.

[Carol Massar]

Okay. Now I want to go to the community, because there's a point where you're growing the business and you got to think about financing and capital and raising. Raising capital. And again, I feel like the community kind of came to you.

[Dan Sheridan]

Yeah.

[Brad Finkel]

So we kind of have a one in a million raise story. It became obvious that the opportunities that were coming our way meant that I needed a bigger boat. So I was ready to kind of start going to institutional investors and, you know, the banks of America and telling my story. When word got out to our customers kind of through the grapevine that we were contemplating this, some very savvy, real. Some very savvy investors said, wait, we want to be part of this. They've invested in CPG products before, and I didn't have to do any of that.

[Carol Massar]

I got. It's only got about a minute left, unfortunately.

[Narrator/Host]

And you raised $4 million in Series A funding?

[Carol Massar]

We have. Okay, so where do you go with this? Ipo, sell it. What do you want to do?

[Brad Finkel]

No, no, no, no. We are, we are building our business straight down 95 down south to the Midwest. We have Pavilions and Lassens in California. We have Jewel and Tony's and Pete's in Midwest Central Market in Texas. We are growing our distribution and certainly also online as well. You know, direct to consumer.

[Carol Massar]

Do you plan to expand the products?

[Brad Finkel]

Yeah, we have pizza sauce coming. We have, we have a couple of other things. But we are a small but mighty group of experts. So I was able to get those economics to bring on expertise and better execution. And that's allowing us to scale across America.

[Carol Massar]

That's why we like talking. It is the backbone of the U.S. economy. Brad Finkel, thank you so much.

[Narrator/Host]

Just a few days after we spoke with Brad, we got some new data from Challenger, Gray and Christmas. This is the outplacement firm and it noted that US Companies announced the largest number of job cuts for any January going back to the depths of the Great Recession in 2009. And it's relevant to this conversation because he talked about consumers being more cautious.

[Carol Massar]

Yeah. And it's interesting. Contract loss, economic conditions and restructuring were the top three reasons for announced job cuts cuts last month. That's according to that report. Almost half of the job cuts announced in January were tied to three Amazon.com, united Parcel Service and Dow. Amazon announcing plans to cut 16,000 corporate positions in a restructuring, while UPS said it would shed as many as 30,000. And Dow looking to eliminate about 4,500 positions, while Peloton Interactive and Nike also announced workforce reductions. Those are some of the big companies, but we know, as we always say, backbone of the US Economy, those small businesses. And as we heard from Brad, he's seeing from his consumer base that they've got to be really careful. So you could always. That kind of plays its way all the way into those running small businesses. They've got to be also careful, too, about the economy and what that means maybe for their future hiring.

[Narrator/Host]

Yeah. Those figures add to signs of a fragile labor market characterized by limited numbers of overall dismissals and lackluster hiring. As you mentioned, Carol, these are some of the bigger companies. Curious how it hits smaller firms that are out there.

[Carol Massar]

Yeah. Something that we know the Fed is going to be watching. They just did their first meeting of 2026 last month. But that job mandate and whether or not we're at full employment and can kind of keep it there or whether or not we're seeing some weakness. All right. Still to Come on Bloomberg Businessweek. There's no snow. Why that could mean trouble for the Olympics of the future.

[Narrator/Host]

This is Bloomberg.

[Tim Stanweck]

Support for the show comes from public. On public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comdisclosures Now I'd.

[Carol Massar]

Like to introduce you to Meaningful Beauty, the famed skin care brand created by iconic supermodel Cindy Crop offered It's her secret to absolutely gorgeous skin. Meaningful Beauty makes powerful and effective skin care simple and it's loved by millions of women. It's formulated for all ages and all skin tones and types and it's designed to work as a complete skin care system leaving your skin feeling soft, smooth and nourished. I recommend starting with Cindy's full regimen which contains all five of her best selling products including the Amazing Youth Activating Melon Serum. This next generation serum has the power of Melon Leaf Stem cell technology. It's melon leaf stem cells encapsulated for freshness and released onto the skin to support a visible reduction in the appearance of wrinkles. With thousands of glowing five star reviews, why not give it a try? Subscribe today and you can get the Amazing Meaningful Beauty system for just $49.95. That includes our introductory five piece system, free gifts, free shipping and a 60 day money back guarantee. All that available@meaningful beauty.com Every year people.

[Tim Stanweck]

Make the same fitness goal train harder but most fail because recovery gets ignored. Especially connective tissue that muscles depend on to grow. Frog Fuel was developed by Navy Seals and perfected by a Stanford trained scientist. Delivering 15 grams of nano hydrolyzed collagen protein that digests in just 15 minutes. It's science backed and ready to drink. No mixing, no sugar, no junk this year. Don't just train harder, recover smarter. Go to frogfuel.com that's frogfuel.com Stay unbreakable. You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch.

[Dan Sheridan]

Us live on YouTube.

[Carol Massar]

Thousands of athletes have descended upon northern Italy for the 2026 Olympic Games. Organizers of the Games breathed a sigh of relief when snow blanketed the Italian Alps throughout January. Unusually warm weather around the holidays had them worried the slopes wouldn't be ready in time. Alpine areas are heating up faster than the rest of the planet, with shorter winters that tend to bring less snowfall and more rain, plus bouts of extreme cold and poor visibility. The vast range of possible conditions and their increasing unpredictability makes planning for the quadrennial winter sporting event harder than ever before.

[Narrator/Host]

It's not just the Olympics. In the western US Resorts are increasingly seeking solutions to freshen up some brown slopes. Winter park, operated by Vail rival Alterra Mountain Company Is one of a growing number of groups in the American west doubling down on something called cloud seeding, from state governments and ski hills to utilities and watershed management agencies.

[Carol Massar]

Bloomberg senior correspondent Kyle Stock joins us now from Denver to talk about how ski towns are bringing in the snow. And I feel like I shouldn't be the one bringing you in. I really think Tim should because he's the skier here. So Tim, take it away.

[Narrator/Host]

Okay. So, Kyle, traditionally and historically, in order to get snow on slopes, when it doesn't come from the sky, from from natural sources, ski resorts have turned to snowmaking, as you write in a recent piece for Bloomberg News that actually uses a lot of water. Nowadays, some resorts, including Winter park, are doing something called cloud seeding. What exactly is it?

[Kyle Stock]

It's not that new of a practice. It's been around for decades. They take something called silver iodide, which is this tiny molecule, they blow it up into the sky or fly it in planes and drop it into clouds. And these are clouds that are wet enough and cold enough to make snow, but they just need a little nudge. So it acts as a catalyst. Basically, this little chemical acts as a tiny piece of ice which, you know, the water droplets attached to, like iron filings to a magnet, makes a snowflake. And you have fresh powder. That's the theory at least it's been around since the 60s, but it's something that people all over the west, ski resorts, watershed management groups, utilities, are turning to increasingly.

[Narrator/Host]

It's been around since the 60s as you mentioned. But one of the reasons why not everybody does it. In your piece you point out Vail stopped doing it a few years ago is because it's not necessarily proven that it actually works in the wild. What did you find?

[Kyle Stock]

The main scientists on this is this woman, Katya Friedrich, who works at University of Colorado here. And I went to meet with her and it was funny because she is like a rock star among cloud seeding heads. She's like the champ. She did this beautiful study in 2018 where she flew a plane through a cloud. She didn't fly the plane, but had the plane fly zigzag through a cloud, seeded the cloud and there wasn't any snow except what fell in this zigzag pattern. So everyone points that study like, hey, this is proof this works. But I went and met with her and she said, yes, it works. It works in a lab. She's still not convinced it works to any appreciable degree. She's not. She says the, the environment is way too volatile. There's too many factors at play to prove yet that it creates, you know, a substantial amount of snow beyond a dusting. So the science is still very much in question here. That's one of the things that is happening in the Western U.S. this year, this desperate push to validate this stuff, to get results, to get data to show that it works in an appreciable way that makes a difference to something. Someplace like a ski resort.

[Carol Massar]

You also talk about state governments, watershed management agencies, utilities. I mean, people are thinking about, you know, the need for water and water creation. I mean, people used to laugh years ago that, you know, water was going to be the next commodity that we were going to be thinking about as an investment play because we just assume it's always going to be there. But here we are because of climate change. Going back to this cloud seeding, I guess we is part of the problem when they do this, they don't know how much of that would have snowed anyway. What's the problem in kind of feeling figuring out how effective this process is?

[Kyle Stock]

Yeah, just getting the results in an apples to apples basis. So when you think of a cloud or a storm, this is a huge meteorological event. There's lots of variables. There's winds, they send these particles up from the ground. They don't know if they even get in the cloud, they can be blown miles away. They get in the cloud. Does it snow there? Does it snow the next state over? It's a really turbulent environment. But if you talk to people like the folks at Winter park, they're convinced it works. They try to do radar tests where they see where they're seeding, and they do the radar very close by and compare and contrast the results. They'll seed one branch of a river and not the other. And look at the water levels in the spring. They're very convinced. But in terms of scientific rigor, it's a really hard problem to square.

[Narrator/Host]

So enter private companies that are trying to.

[Carol Massar]

You just want to get to the cool dude, don't you?

[Axel Merck]

Yeah.

[Narrator/Host]

Augustus, is it? Augustus Dorico. So this is a company called Rainmaker. What are they doing?

[Kyle Stock]

Pretty novel. They thought, let's seed from a drone because it's cheap to seed from the. The ground. It's expensive to seed from an airplane. But that gets these chemicals right where they need to be in a cloud, right where they want them to be. They built these drones, they built these radar systems, they built a little weather site on each drone so they can fly these up into the cloud and theoretically get them right where the conditions are perfect, the temperature, the humidity, etc. Drop the chemicals there and have a more targeted approach and still a relatively inexpensive way to do it. So they have about 100 drones around the American west this winter, which is really their first winter of doing this at scale. Most of them are in Utah. Policymakers have been super alarmed about water levels for years now. The state legislator really kicked up their spend on cloud seeding three, four years ago, when the Great Salt Lake was at historic low levels. Everyone was really alarmed. Everyone's really aligned on this there. They're really on board. But the skeptics will say, like, people are desperate. They're going to try anything really interesting to see what kind of results Rainmaker publishes in the spring versus what we might have seen.

[Carol Massar]

Anyways, yeah, it sounds like kind of a guy we need to have on and talk to him. I'm curious about, and you too, because, you know, this world. What's the cost of doing this, using the drones, throwing them up in the air? And I'm curious about that. And also, is there any ecological impact? I feel like there's never any free lunch. I feel like when it comes to our environment right now, seeding from the.

[Kyle Stock]

Ground is really cheap. It's basically, you know, these, these units, they're kind of like Large barbecues. It's just a propane fire and these chemicals. So in terms of ROI or bang for your buck, it's way cheaper than snowmaking. A lot of the policymakers I talked to said there's really no downside to doing this. The drones are a little more expensive. Utah is paying Rainmaker about seven and a half million dollars this year. They have said, you know, if this stuff works, that's a drop in the bucket. It's, it's the smartest money we can spend ecologically. There's been some alarm about this in state governments, in Congress. The silver iodide is inorganic. It's naturally occurring. You could eat this stuff and it won't dissolve in your body. It's in the soil. It falls down in the snow, snow melts, the stuff goes in the soil. From a chemical perspective, it doesn't seem to be that dangerous. There's some debate about whether the consequences are further downstream. Like if you're taking water out of a cloud in Colorado, are they seeing less precipitation? And Kansas and Nebraska, most of the science is pointing that that's not the case, that there's so much precipitation, there's so much humidity in these clouds, and it regenerates over time. So ecologically, the science seems to point to it being pretty, pretty zero consequence right now. It's kind of. Most people say it's a win, win, win, but again, the science is evolving, so we'll see.

[Narrator/Host]

So Kyle gets us to a point where cloud seeding, okay, if it works, it only addresses one part of the problem, and that's getting snow on ski mountains in cold environments. But it doesn't address the temperature problem. And there's a story on the Bloomberg terminal about what happens when the Winter Olympics can't rely on winter. And we're seeing warmer temperatures affect ski slopes, not just in the United States, but, but across the world. Is there, there's not really a fix for that. It's like these, you know, these ski companies are investing more in what to do on the mountain when there's, when there's no snow, but the winter season is more volatile pretty much everywhere.

[Kyle Stock]

Yeah, that was a great piece. And honestly, it jogged my memory. And I don't know if you guys echo this, but I can't recall a recent Winter Olympics where there was an alarm about the amount of snow and the, and the temperatures. It looks like we're going to be okay this time around. But yeah, again, this is a tough, tough problem to solve. The ski industry has tried to climate proof their operations through basically geographical hedging. So this is why Vail owns resorts in Europe, in Australia, in the Rocky Mountains, in Vermont. And they group them all under the season pass on the, on the pretense that if there's not snow in Mammoth, California, you might fly up to Whistler or you might fly over to Bailey. But this seems like a very complicated fix and one that might not work so well for the Olympics. But I think you will see more far flung Olympics, maybe places where ski events could be hosted in a number of places. I know the last Summer Olympics, the surfing events were halfway around the world. We could get to a world where that happens with the Winter Olympics as well.

[Carol Massar]

Or God forbid, like there's indoor like skiing places, you know, which we see for recreation. But I mean, there's a stat in that story about the Olympics or future Olympics. And it says, in fact, all the cities that stage the Winter Games since 1950 have heated up in the years since by an average of 4.9 degrees Fahrenheit. That's according to scientists at Climate Central. And that's well above the 1.4 degrees. That's Celsius. So 2.7 degrees. They have heated Celsius and that's well above 1.4 degrees Celsius, which is the warming average for the entire planet. And basically it says if they keep rising and we see these greenhouse gas emissions continue at their current pace, 13% of global ski areas will have lost natural snow cover entirely by 2071 to 2100, according to a study that's cited. So, like, wow.

[Narrator/Host]

Yeah, not pretty. Well, a big thank you to Bloomberg senior correspondent Kyle Stock. He's based out there in Denver in the American west, and he's still gotten to do a little skiing.

[Carol Massar]

You too, right? You've talked about this a lot this.

[Narrator/Host]

Year, but a Poconos and Connecticut.

[Carol Massar]

Yeah, New York, it's kind of crazy that. What's going on? Hey. That wraps up the weekend edition of Bloomberg businessweek from Bloomberg Radio. Thank you so much for joining us.

[Narrator/Host]

Be sure to tune in to Bloomberg Businessweek Daily Monday through Friday starting at 2pm Wall Street Time on Bloomberg TV, Bloomberg Radio and on Sirius XM Channel 121.

[Carol Massar]

You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News. We're simulcast on Bloomberg originals, available at bloomberg.com originals and streaming platforms including Roku, Amazon, Fire TV, Samsung TV plus and more.

[Narrator/Host]

Find our Bloomberg Businessweek podcast at bloomberg.com apple or wherever you get your podcasts. And the latest edition of the magazine is available on newsstands [e-mail] and always on the Bloomberg Terminal.

[Carol Massar]

Any skiing this weekend?

[Narrator/Host]

Weekend, not this weekend. We're going to go President's Weekend though.

[Carol Massar]

All right.

[Narrator/Host]

If we can dig our car out in New York. Truly, if the car gets dug out.

[Carol Massar]

I know we haven't even touched ours.

[Narrator/Host]

I use the passive voice if I take the car.

[Carol Massar]

It tends to be a we project. And I'm Carol Massar. Have a good and safe weekend, everyone. Do stay warm if it's cold where you are. Stay with us though. Today's top stories and global business headlines are coming up Right now, this is.

[Tim Stanweck]

The Bloomberg Business Week Bloomberg Daily Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

[Narrator/Host]

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[Tim Stanweck]

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[Narrator/Host]

Janice Torres here and I'm Austin Hankwitz.

[Tim Stanweck]

We host the podcast Mind the Business Small Business Success Stories produced by Ruby Studio in partnership with Intuit QuickBooks.

[Carol Massar]

We're back for season four to talk to some incredible small business owners.

[Tim Stanweck]

The big thing about working at tech is that it's ever evolving, ever changing.

[Kyle Stock]

Everyone's a rookie.

[Joe Doe]

That's how fast the industry is changing.

[Tim Stanweck]

So what I'm really excited about to be part of that change.

[Narrator/Host]

So listen on the iHeartRadio app, Apple Podcasts or wherever you get your podcast.