Speaker 1: You're listening to the Bloomberg Opinion podcast counts Saturdays at
Speaker 1: one and seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app and the Bloomberg Business App, or listen on
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Speaker 2: Welcome to Bloomberg Opinion. I'm Amy Morris. This week we
Speaker 2: look at manufactured homes, how to reinforce them, protect them,
Speaker 2: and help residents who live in them. We'll also look
Speaker 2: at how a new trend in tipping might actually be
Speaker 2: hurting those who need those tips the most, and later
Speaker 2: a look at the alcohol industry, which is facing a
Speaker 2: real threat from competition and low to know alcohol trends.
Speaker 2: Let's begin, though, with a look at insurance, especially as
Speaker 2: we are seeing more severe weather, which is prompting more
Speaker 2: insurance companies to pull out of high risk areas. Experts
Speaker 2: are warning of an insurance crisis unfolding as natural disasters
Speaker 2: get more expensive and insurance companies bail Benjamin keys Is
Speaker 2: with the University of Pennsylvania Wharton School of Business.
Speaker 3: We think of Florida, Arizona, Louisiana as being popular retirement destinations,
Speaker 3: and those destinations just got a bit costlier to move
Speaker 3: to because of rising insurance costs.
Speaker 2: Well, now it's probably a good time for property owners
Speaker 2: to check those insurance policies and buckle up for dramatically
Speaker 2: higher costs. You can blame climate, macroeconomic pressures, political factors
Speaker 2: that have battered the insurance industry in recent years. Let's
Speaker 2: talk about it now. Bloomberg opinion columnist David Fickling joins me.
Speaker 2: David covers Energy and Commodities. David tell us what we
Speaker 2: might find as we do start to review our insurance policies.
Speaker 4: Yeah, well, it's looking a pretty rough year for anyone
Speaker 4: who's got an insurance policy. Beasley PLC one of the
Speaker 4: UK based insurance but have a lot of coverage in
Speaker 4: the US. They said recently that propertian is in the
Speaker 4: US are already seeing annual rate increases averaging seventeen percent. So,
Speaker 4: you know, a year when we're already seeing pretty high
Speaker 4: inflationary costs, insurance is going up faster than the fastest
Speaker 4: grade of inflation. And if anything, that maybe understates some
Speaker 4: of what we've got coming down the pipe, because that's
Speaker 4: looking at the looking at the rate increases for everybody,
Speaker 4: and of course the rating increases will be most severe
Speaker 4: for those who've experienced natural disasters and some of that,
Speaker 4: some of what we're seeing there is extremely severe, and
Speaker 4: I think particularly if you look at what's being paid
Speaker 4: by reinsurers, the cost of to renew policies for reinsurers
Speaker 4: is fifty percent in the US and in Australia, if
Speaker 4: you've been exposed to disasters, it's going up seventy five percent.
Speaker 4: So there's some really extraordinary increases that we're seeing at
Speaker 4: the moment. Even insurance you hadn't had catastrophic disasters, we're
Speaker 4: having to pay twenty percent more than a year ago.
Speaker 4: And that cost which is you know, remember the structure
Speaker 4: of insurance. You have you take out a policy with
Speaker 4: your insurer, and then your insurer takes out a policy
Speaker 4: with a reinsurer to cover the really big costs from
Speaker 4: from the big natural disasters that they struggle to cover
Speaker 4: on their own. The pricing that they are paying to
Speaker 4: reinsurre as gets you know, gets knocked on down down
Speaker 4: the track. If they're having to pay a lot extra
Speaker 4: to reinsure as they're having to get a lot lot
Speaker 4: extra on your premiums or alternatively, they're having to exclude
Speaker 4: things the previously they didn't exclude. And of course we're
Speaker 4: also seeing as a result of this a lot of
Speaker 4: people who just simply can't really afford insurance anymore.
Speaker 2: So is this because of the natural disasters that we've
Speaker 2: seen of late.
Speaker 4: I'm going to reach for a classic insurance disaster industry
Speaker 4: cliche and say it is a perfect storm, But there
Speaker 4: is a combination of several factors that are happening at
Speaker 4: the same time. They're actually the actual disasters that we've
Speaker 4: seen recently, they're because of climate change and also generally
Speaker 4: just because insurance losses always rise, because they rise with income,
Speaker 4: they rise with population growth, they rise with people putting
Speaker 4: more of their money into the capital stock of their
Speaker 4: buildings and things like that. Insurance costs always rise. But
Speaker 4: we've seen, you know, we've seen a run of record
Speaker 4: years in recent years that the most recent big disaster
Speaker 4: obviously in the US hurricane dial it doesn't seem to
Speaker 4: have been actually a particularly dramatic one. I think the
Speaker 4: modeling now is suggesting it's sort of low single digits
Speaker 4: of billions. Sounds like a lot of money, but for
Speaker 4: the insurance industry, that's pretty that's pretty small potatoes. That
Speaker 4: in itself is not that much to worry about, so yes,
Speaker 4: but I think the other factors to consider is a
Speaker 4: lot of the sort of macroeconomic factors that come in here.
Speaker 4: For most of the period that we've been growing more
Speaker 4: concerned seeing some of these bigger impacts from climate change,
Speaker 4: it's been over the past fifteen years when interest rates
Speaker 4: have been very low and when inflation has been very low,
Speaker 4: And the one thing that insurers and reinsurers worry about
Speaker 4: more than climate change and natural disasters is inflation. The
Speaker 4: reason for that, if you think about the model when
Speaker 4: you pay your insurance premiums, the insurer does not expect
Speaker 4: to pay out your losses if something happens to your
Speaker 4: house from the money that you pay them. The way
Speaker 4: the model works is they take your premiums and they
Speaker 4: invest it and they can only you know, they can
Speaker 4: only cover your losses based on the investment returns and
Speaker 4: what they're investing in because their conservative conservative investors is bonds.
Speaker 4: And of course, so the bond bull market of the
Speaker 4: past fifteen years had been you know, was immensely good
Speaker 4: for the insurance industry, and that although consumers probably didn't
Speaker 4: feel that way, that meant the insurers were pretty lenient
Speaker 4: over the past sort of ten to fifteen years, you know,
Speaker 4: to householders, to people with insured property. This has now changed.
Speaker 4: The bond billmark is over. You've got this, you've got
Speaker 4: high rates of inflation, which are meaning on their investment portfolios,
Speaker 4: a lot of them are making losses. They're certainly not
Speaker 4: making good you know, good returns on those portfolios to
Speaker 4: cover the losses that they have to pay out. And
Speaker 4: another fact that we have, of course, is that the
Speaker 4: period of very low interest rates has has come to
Speaker 4: an end, and that means that there was over the
Speaker 4: last fifteen years, there were a lot of different types
Speaker 4: of investors that were getting into the insurance industry in
Speaker 4: their search for different for better yield. So you would
Speaker 4: have you know, hedge funds, you know, there were a
Speaker 4: lot of you know, bond investors, catastrophe bonds, sovereign wealth funds,
Speaker 4: pension funds, all sorts of new investors were coming in
Speaker 4: and that was providing capital to the insurance industry, and
Speaker 4: that allowed them to push down or compete down the
Speaker 4: premiums that we were paying. Interest rates have gone up.
Speaker 4: It's a lot easier for those investors to find yield elsewhere,
Speaker 4: so they're not going to the insurance industry. So again
Speaker 4: that has that has been its big macroeconomic factor. As
Speaker 4: we've moved from a low rate, low inflation environment to
Speaker 4: a high rate, high inflation environment, some of those macro
Speaker 4: factors that made insurance more affordable for the past fifteen
Speaker 4: years have disappeared as a result of what insurers are
Speaker 4: having to do is pass the costs back on to householders.
Speaker 2: We're talking with Bloomberg opinion columnist David Fickling about how
Speaker 2: severe weather is a perfect storm for the insurance industry. David,
Speaker 2: have we seen this before?
Speaker 4: Well, the inflationary situation, I mean, we're this is sounding
Speaker 4: slightly long in the tooth reference, but there was you know,
Speaker 4: during the last period of high inflation that you saw
Speaker 4: in the sort of early to mid eighties, there was
Speaker 4: a real significant crisis for the insurance industry connected to
Speaker 4: that because it did a lot of damage to their
Speaker 4: investment folios. At that point. It was you know, it
Speaker 4: was also accentuated by some of the you know, quite
Speaker 4: big unusual losses that came in around about the eighties.
Speaker 4: Of course, we had we had the period of things
Speaker 4: like asbestosis, uh, you know, a lot of insurers found
Speaker 4: that they they had cover for asbestos damage, but they
Speaker 4: weren't they you know, they hadn't really modeled those risks
Speaker 4: because that you know, the problems with asbestos weren't known
Speaker 4: until then. A lot of money was paid at There
Speaker 4: are a lot of big disasters in the late eighties,
Speaker 4: sort of oil tanker disasters, the you know, the the
Speaker 4: x on Valdis, the Tory Canyon I think, and most
Speaker 4: famously what you know, what I ended up resulting from
Speaker 4: that sort of series of of of linked disasters that
Speaker 4: that you know, the Lloyds of London, the you know,
Speaker 4: the original sort of shipping insurance market that's been been
Speaker 4: running from three hundred years, suffered an absolute crisis that
Speaker 4: caused a lot of the syndicates there at Lloyd's to
Speaker 4: lose a great.
Speaker 5: Deal of money.
Speaker 4: So the insurance industry has been through this sort of
Speaker 4: thing before, and it's a reason why they're very, very
Speaker 4: wary of inflation because of what it's done to them
Speaker 4: in the past. Now I think what we're going to see,
Speaker 4: I mean, insurers and reinsurers are very circumspect about their
Speaker 4: job is managing future risks and they're very good at it.
Speaker 4: And of course the way they do it is something
Speaker 4: that we tend to forget and don't like very much,
Speaker 4: which is that they just stop insuring risks. They either
Speaker 4: price risks so high that we can't afford them, or
Speaker 4: they just withdraw coverage altogether from areas. And I think
Speaker 4: we tend to think. I mean, you'd often have heard
Speaker 4: I think over the past ten years, people talking about
Speaker 4: climate and insurance saying, well, we have you know, the
Speaker 4: insurance industry is a great model for sort of you know,
Speaker 4: for pricing risks and that will sort of take away
Speaker 4: the risk of climate change. Well, it doesn't take away
Speaker 4: the risk. It moves the risk around and the insurance
Speaker 4: industry to be always making a profit. And if those
Speaker 4: risks get so high that it's not making a profit,
Speaker 4: then the insurance industry will withdraw. If you look at Florida,
Speaker 4: for instance, is the classic example, although if you look
Speaker 4: at the insurance market there it is completely broken. Less
Speaker 4: than one in five Floridians have flood protection in their
Speaker 4: insurance policies. Bear in mind, another effect that we have
Speaker 4: from inflation is that the cost of rebuilding is going
Speaker 4: up very dramatically. So even if you thought you had
Speaker 4: enough money to rebuild your house five years ago, you
Speaker 4: probably don't have enough money to rebuild your house now.
Speaker 4: So all of those factors mean that people who previously
Speaker 4: thought they were sort of under the protective umbrella of
Speaker 4: insurance really finding the umbrella rather threadbare at this point.
Speaker 2: Bloomberg Opinion columnist David Fickling coming up. We're going to
Speaker 2: continue this conversation from a different point of view. What
Speaker 2: have we learned about, say, manufactured housing and severe weather
Speaker 2: and what needs to be done for those That's just ahead.
Speaker 2: You're listening to Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, and the Bloomberg Business App, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion. I'm Amy Morris. We are
Speaker 2: talking about the aftermath of severe weather and the impact
Speaker 2: on manufactured homes. Before Hurricane Adalia slammed into Florida, the
Speaker 2: mayor of Tampa, Jane Caster, was warning residents in low
Speaker 2: lying neighborhoods and in mobile homes to get out. Understand
Speaker 2: that Mother nature wins every time.
Speaker 6: So if you have the opportunity to evacuate, and you can,
Speaker 6: you should, please please do.
Speaker 2: After Hurricane Adalia, some of the most endearing images are
Speaker 2: of mobile and manu factored homes battered and flood damaged.
Speaker 2: So what can be done to protect these manufactured homes
Speaker 2: and why do they even need protecting. Let's bring in
Speaker 2: Bloomberg opinion columnist Jonathan Levin, who covers finance markets and
Speaker 2: M and A Jonathan. Manufactured in mobile homes absolutely are
Speaker 2: affordable homes. But just bring us up to speed. How
Speaker 2: many people live in these homes? Let's start there.
Speaker 7: Yeah, millions and millions, and it's even a greater share
Speaker 7: of Floridians. So you know, we're talking six seven percent
Speaker 7: of occupied housing stock here in the Sunshine State. And
Speaker 7: you know, it's important to say that it's a really,
Speaker 7: really important source of housing here in the Sunshine State
Speaker 7: and across the sun Belt where affordability has become more
Speaker 7: and more of a challenge in recent years.
Speaker 2: You say, lawmakers should improve the planning and the oversight
Speaker 2: of these mobile home parks, Like what what is lacking?
Speaker 5: Yeah, so a couple of things.
Speaker 7: So a uh, you know, manufactured housing tends to be
Speaker 7: subject to a lot of nimbiism. It's this this sort
Speaker 7: of entrenched nimbism in in a lot of municipal codes.
Speaker 7: And because of that, manufactured housing tends to end up
Speaker 7: in places like you know, unincorporated parts of the of
Speaker 7: various counties.
Speaker 5: Uh.
Speaker 7: Right, So these also, not so coincidentally, can often be
Speaker 7: some of the most vulnerable parts of the county do
Speaker 7: to climate change. So I think the very first thing
Speaker 7: that that lawmakers and other leaders in our communities need
Speaker 7: need to consider is that manufactured housing needs to be
Speaker 7: a part of the plan from the beginning. It can't
Speaker 7: just be this this afterthought.
Speaker 5: Uh.
Speaker 7: And and it can't uh it just be you know,
Speaker 7: cast off to the these sort of no man's lands,
Speaker 7: because like wealthier communities, I don't want to don't want to.
Speaker 5: Look at it.
Speaker 7: That's it's not a sustainable and it's not a safe
Speaker 7: solution for this kind of housing. The key point here
Speaker 7: is some of these structures are actually very very good.
Speaker 7: If you look at the kind of manufactured housing that
Speaker 7: has come out since nineteen ninety four, since a critical
Speaker 7: revision in the way the federal regulations were these kinds
Speaker 7: of structures are actually pretty good, and they're just as
Speaker 7: good as anything else when it comes to flood specifically.
Speaker 5: Again, the issue is when.
Speaker 7: You community biases come into play and these sorts of
Speaker 7: housing get cast off into the middle of nowhere, then
Speaker 7: you have these communities which tend to skew a little
Speaker 7: bit lower income and are inherently vulnerable. Because of that,
Speaker 7: you have them placed in some of the most vulnerable
Speaker 7: jurisdictions in various counties and states.
Speaker 2: The conventional wisdom is all so that it's not safe.
Speaker 2: You were just addressing that that that's sort of an
Speaker 2: overgeneralization that maybe tornadoes are not going to look for
Speaker 2: the trailer parkin and target it, which is an ongoing joke.
Speaker 2: I'm from South Carolina, so I remember those jokes a
Speaker 2: lot where we had, you know, areas where folks were
Speaker 2: living in mobile homes or manufactured housing, and those seemed
Speaker 2: to be the ones that were the most vulnerable. Your
Speaker 2: point being, it's not the trailer, it's not the house,
Speaker 2: it's not the manufactured housing that's vulnerable. It's the location.
Speaker 7: Yeah, there's that, and there's a couple of other things.
Speaker 7: So Another thing that I talk about my recent piece
Speaker 7: is sort of aligning economic incentives. A key problem with
Speaker 7: manufactured housing is that oftentimes while residents will own the structure,
Speaker 7: they will not own the land right They're oftentimes found
Speaker 7: in these parks, and residents are essentially renters there. So
Speaker 7: if you do have an unscrupulous landlord who just wants
Speaker 7: to pinch pennies and maximize profits and doesn't invest in
Speaker 7: the right sort of infrastructure and storm preparedness, that can
Speaker 7: also be a problem area. So you know, as part
Speaker 7: of the solutions that I sort of propose and review
Speaker 7: in my piece, I suggest that there really also needs
Speaker 7: to be increased oversight of landlords. You know, this has
Speaker 7: been a popular investment for private equity.
Speaker 5: It's a private it's.
Speaker 7: A popular investment for reds, And I'm not saying that
Speaker 7: all or even most of them are bad actors, but
Speaker 7: in an environment where the economic incentives aren't necessarily aligned
Speaker 7: all the time, you do need government to come in
Speaker 7: and make sure that everybody is acting properly.
Speaker 2: And we are talking with Bloomberg opinion columnist Jonathan Levin
Speaker 2: about the role of manufactured homes in the US and world,
Speaker 2: why they need protecting. You mentioned community planning and how
Speaker 2: it needs to document and corporate manufactured home communities, giving
Speaker 2: them more of a footprint, more stability within those planned communities.
Speaker 2: Is that going to get any attraction? I mean, like
Speaker 2: you say, there's this sort of attitude about mobile homes
Speaker 2: that isn't always very flattering.
Speaker 7: I think you know, one key solution, one key longer
Speaker 7: term solution to all of this is potentially to give
Speaker 7: manufacture housing residents more self determination. So again I make
Speaker 7: the point that there's this problem of aligning the economics
Speaker 7: incentive so that people want to invest in resilience, and
Speaker 7: one way to do that is to give them ownership
Speaker 7: of that plot of land. So a lot of times
Speaker 7: what happens, and what can be be a dangerous situation
Speaker 7: is a park gets sold and somebody comes in and
Speaker 7: they want to start pinching pens these What if, you know,
Speaker 7: when parks get sold, the government requires the seller to
Speaker 7: consider an offer from the community. What if the community
Speaker 7: could could come in and you know, pool their money
Speaker 7: and make an offer themselves, then you have better alignment
Speaker 7: of economic incentives. You have a group of people who
Speaker 7: want to invest in the resilience of their terrain, and
Speaker 7: there's some really good research that suggests that that can
Speaker 7: be a good long term solution.
Speaker 2: Is there a need for government then to intervene here?
Speaker 5: Correct?
Speaker 7: Yeah, So some of the best laws that have been
Speaker 7: going on the books recently do a couple of things.
Speaker 7: So they will say that when a piece of property
Speaker 7: is going up for sale, residents should be alerted in advance, right,
Speaker 7: you know, you can't give somebody forty eight hours to
Speaker 7: bring the community together and make an offer. The government
Speaker 7: and authorities in general should also be given advance notice,
Speaker 7: and it's important to have some sort of requirement that
Speaker 7: that fair consideration is actually given to the community's offer.
Speaker 7: So one form that that can take again is a
Speaker 7: right of first refusal.
Speaker 2: You also mentioned nimbiism a couple of times earlier in
Speaker 2: this interview. Perhaps part of the solution is the rest
Speaker 2: of us changing our attitudes.
Speaker 5: Yeah, exactly.
Speaker 7: I mean, so manufactured housing, it's important to point out
Speaker 7: at the end here it's.
Speaker 5: A really really broad category and if you.
Speaker 7: Look at some of these structures, you wouldn't know that
Speaker 7: they are that they are manufactured housing.
Speaker 5: These are not, you know, trailer parks.
Speaker 7: Classically, classically speaking, and so yeah, it's you know, manufactured
Speaker 7: housing is going to be an important part of our
Speaker 7: affordable hoigh housing challenges here in the United States, and
Speaker 7: it's important to embrace it as as such and not
Speaker 7: bring so many biases to the debate to start with.
Speaker 2: Jonathan Levin is a Bloomberg opinion columnist who covers finance,
Speaker 2: markets and M and A and don't forget We are
Speaker 2: available as a podcast on Apple, Spotify or your favorite
Speaker 2: podcast platform. The alcohol industry has been thriving despite a
Speaker 2: streak of threats, the legalization of marijuana, a trade war
Speaker 2: with China that has hampered US exports, the rise of
Speaker 2: the sober curious movement, and now a new risk one
Speaker 2: few investors or companies are publicly acknowledging could pressure sales,
Speaker 2: and that is weight loss drugs. Lisa Jarvis is a
Speaker 2: Bloomberg opinion columnist. She covers biotech, healthcare, and the pharmaceutical industry,
Speaker 2: and she joins us Now, Lisa, we know these weight
Speaker 2: loss drugs are reshaping the weight loss market. How is
Speaker 2: there a threat now or an impact to the market
Speaker 2: for alcoholic beverages.
Speaker 6: It's this unexpected side effect of these drugs which is
Speaker 6: that people just don't really have the desire to drink.
Speaker 6: Not all people, but a healthy chunk of them. One
Speaker 6: survey said that about sixty two percent of people who
Speaker 6: take these drugs drink less alcohol. I think two things
Speaker 6: are going on, you know. One is that they just
Speaker 6: make alcohol less appealing or any addictive substances, including food,
Speaker 6: less appealing. And then two, I think you feel full faster,
Speaker 6: So even if you kind of force yourself to drink it,
Speaker 6: you can't have more than one drink before it is
Speaker 6: really unpleasant for you.
Speaker 2: So food, nicotine, alcohol, opioids, those sort of addictive substances.
Speaker 2: And you were the one who said that food can
Speaker 2: be an addictive substance, And as a layman, I would say, yeah,
Speaker 2: it's probably true. It dampens the rewards that goes up
Speaker 2: into your brain and it says this isn't pleasant for you.
Speaker 2: Is that how it works?
Speaker 6: That's right. It's dampening the kind of rewards circustry circuitry
Speaker 6: in our brains that tells us to keep going. And
Speaker 6: you know that kind of hit you get when you
Speaker 6: eat something in sugary, or you know, you have a
Speaker 6: glass of alcohol, or I suppose smoke a cigarette and
Speaker 6: so it's it's affecting that particular circuitry in the brain,
Speaker 6: and they think that's why it is that we're seeing
Speaker 6: the side effect that you know, I would say for
Speaker 6: some people that's a happy side effect. I've talked to
Speaker 6: a lot of people now who are taking these drugs,
Speaker 6: and some of them thought that one added bonus of
Speaker 6: going on them was the fact that it could help
Speaker 6: them kind of get their drinking a little more in check,
Speaker 6: especially coming off of the pandemic.
Speaker 2: I wonder if these drugs, the the ozebic and these
Speaker 2: weight loss drugs could be used then for addicts, like
Speaker 2: maybe marketed to physicians or to a clinic ex fo
Speaker 2: addicts who maybe really are looking for a way out
Speaker 2: and for help.
Speaker 6: Yeah, I mean, there definitely are studies going on. There's
Speaker 6: some researchers at the University of North Carolina that are
Speaker 6: looking at this. They're conducting clinical studies to sort of say, Okay,
Speaker 6: you know, here's how well they work for different substances
Speaker 6: for people who have substance use disorder. And I think
Speaker 6: that kind of paves the way we have good data
Speaker 6: in a different various animal models. I think rats, mice, monkeys,
Speaker 6: monkeys are a lot like humans, and so you know,
Speaker 6: and then we've got just at this point, scads of
Speaker 6: anecdotal data. Like I said, I've talked to a lot
Speaker 6: of people who take these drugs. You know, I'm not
Speaker 6: the only one who's written about this. I think other
Speaker 6: reporters have caught onto this trend that you know, you
Speaker 6: can find it on TikTok too, that people are drinking
Speaker 6: a lot less. And so now what we need is
Speaker 6: just studies to understand who benefits from that, because like
Speaker 6: I said, it's not everyone, and then how well it works,
Speaker 6: you know, if you're someone who's you know, maybe just
Speaker 6: a moderate drinker that wants to repair back versus someone
Speaker 6: who has an actual substance used to disorder.
Speaker 2: And we are talking with Bloomberg opinion columnist Lisa Jarvis
Speaker 2: about how a weight loss drug might actually impact the
Speaker 2: alcohol industry. A side effect Lisa, that nobody really saw coming.
Speaker 2: How unusual is it to have a drug that is
Speaker 2: designed for one use like this was diabetes, for example,
Speaker 2: and then there's another use discovered in this case weight loss,
Speaker 2: And now there's this third side effect is that the
Speaker 2: appropriate term where they realized that it dampens the rewards
Speaker 2: for addictive substances. This is sort of a triple threat,
Speaker 2: like in one injection. How did they figure this out?
Speaker 5: Right?
Speaker 6: I mean, it is unusual. We certainly have examples of
Speaker 6: other drugs that started out being studied for one thing
Speaker 6: and ended up being much more useful for something else.
Speaker 6: And that's actually usually how it works. Maybe it didn't
Speaker 6: work in heart disease, but it turns out to work
Speaker 6: interactile dysfunction. That's what happened with biagra, for example. But
Speaker 6: it's not typical, and it's not typical that it would
Speaker 6: work so well in all of them, you know. So,
Speaker 6: like you said, we started with diabetes, they saw that
Speaker 6: people were also losing more weight than other diabetes drugs induce.
Speaker 6: And now we're seeing this other side effect, and you know,
Speaker 6: I think there's just a lot of ripple effects across
Speaker 6: many industries of these drugs. It's very unexpected. And so,
Speaker 6: you know, I think as we learn more about the
Speaker 6: receptors that these drugs are hitting, which ones work better
Speaker 6: when it comes to substances, we'll start to sort out
Speaker 6: what's going on in our brains and how to use
Speaker 6: them best.
Speaker 2: No, you and I have talked before about how women
Speaker 2: are drinking unhealthy amounts of alcohol of late, and now
Speaker 2: we're learning these drugs might be able to curb some
Speaker 2: of those cravings. Is there a market there or is
Speaker 2: there a risk of over prescribing these drugs?
Speaker 6: You know, I think at this point right now they
Speaker 6: can't really be overprescribed simply because we don't have enough supply.
Speaker 5: You know.
Speaker 6: I think we'll see what happens in a few years.
Speaker 6: The question, and I think that scientists are interested in
Speaker 6: it and the companies are interested in, is whether there's
Speaker 6: a way that these drugs can be used to kind
Speaker 6: of be a reset. So if you stop taking them,
Speaker 6: do you stop? We know that weight tends to come back,
Speaker 6: but you know, does that piece of your brain that
Speaker 6: tells you like you don't need that second glass of
Speaker 6: wine or you didn't need it in the first place,
Speaker 6: is that kind of resets? So that's still something TBD.
Speaker 6: But you know, hopefully, hopefully we figure that out in
Speaker 6: the coming years as more people are taking these drugs
Speaker 6: and more studies happen.
Speaker 2: I know it is to be decided or to be determined,
Speaker 2: but I have like questions to build upon that because
Speaker 2: those would be the questions that I would have if
Speaker 2: my doctor were to prescribe this for me. There's an
Speaker 2: assumption that if you are prescribed this drug, you will
Speaker 2: take it regularly, and you will continue to take it,
Speaker 2: and you won't accidentally miss a dose, and then you
Speaker 2: might stay on the drug for a long term. So
Speaker 2: number one, what happens if you do accidentally miss a dose?
Speaker 2: And number two what would the long term side effects
Speaker 2: be as you stay on it? And number three what
Speaker 2: happens when you're not on it anymore when you discontinue used.
Speaker 6: Yeah, well I would just you know, I think it's
Speaker 6: good for people to remember that for diabetes. Ozmpic has
Speaker 6: been a prue since twenty seventeen, so we have a
Speaker 6: lot of data on that, And there's other classes, other
Speaker 6: kinds of GLP drugs that don't induce the same kind
Speaker 6: of weight loss that we're seeing with ozempick and wigov
Speaker 6: and munjar are the other drug that's around that have
Speaker 6: been around for even longer. So we have some reassuring
Speaker 6: data there that like, you can take these for a
Speaker 6: long time and it's probably safe when it comes to
Speaker 6: kind of what happens when you go off the drugs.
Speaker 6: It's an open question, you know, and I do think
Speaker 6: the companies are interested in not just studying what happens,
Speaker 6: how you might could you change the do scene, like
Speaker 6: have it be less frequent, but also inventing other drugs
Speaker 6: that maybe are longer lasting or it can help with
Speaker 6: maintenance versus you know, continuing the weight loss.
Speaker 2: So what's the future then of these weight loss slash
Speaker 2: diabetes slash less alcohol or less addictive type drugs, Like,
Speaker 2: what's the future of these drugs? Where's this going?
Speaker 6: Yeah, I mean it's really interesting to watch because it's
Speaker 6: changing so fast every week. I feel like we're learning
Speaker 6: something new about them. But there are a number of
Speaker 6: other drugs that are in the pipeline, some that have
Speaker 6: higher levels of weight loss, some that hit on these receptors,
Speaker 6: plus some other receptors, and I think we're starting to
Speaker 6: understand kind of the relationship between all of those. To
Speaker 6: think about, you know, could you take a drug that
Speaker 6: you only take once every three months or once every
Speaker 6: six months. Could you take there's pills that are coming
Speaker 6: so which I think also could change a landscape. Can
Speaker 6: that ebody wants to inject something once, you know, a week,
Speaker 6: so I think, to me, the really big question, and
Speaker 6: kind of getting back to the alcohol thing, is you know,
Speaker 6: what are the ripple effects on all the other industries
Speaker 6: that could be affected. You know that we just haven't
Speaker 6: quite wrapped our heads around. People will eat less, people
Speaker 6: might drink less. You know what are the things we
Speaker 6: haven't even imagined yet that the shift in our behavior
Speaker 6: could could induce. You know, it's pretty it's pretty wild.
Speaker 2: Right, could an impact, say the industry of gyms going
Speaker 2: to the gym, hiring a personal trainer, couldn't react all
Speaker 2: of that one way or another.
Speaker 6: Yeah, And we're already seeing it with some of the
Speaker 6: diet you know, kind of foods and drinks like shakes
Speaker 6: and things like that. But I think there's some data
Speaker 6: showing that already people are taking drinking less of those
Speaker 6: so to TVD. But there's a lot of different things
Speaker 6: that are unknown, and I'm excited to watch what happens.
Speaker 2: Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, healthcare,
Speaker 2: and the farharmaceutical industry. Now Bloomberg Opinion continues with a
Speaker 2: look at tipping. There's a new trend that could complicate
Speaker 2: matters for people who actually rely on those tips. This
Speaker 2: is Bloomberg.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot com,
Speaker 1: the iHeartRadio app and the Bloomberg Business App, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: You're listening to Bloomberg Opinion I Amy Morris. Have you
Speaker 2: noticed a new trend? You're headed out for coffee or
Speaker 2: a quick bite, and the establishment encourages you to add
Speaker 2: a tip to your bill, even if it's a self
Speaker 2: serve place. Let's talk about what's happening. Bloomberg Opinion columnist
Speaker 2: Bobby Ghost joins us. Now, what's going on? Everybody wants
Speaker 2: a little extra?
Speaker 8: Well, you've already hinted edit at your introduction. It's this
Speaker 8: new trend, or accelerating trend if you like, where we
Speaker 8: as customers are being prompted to give a tip at
Speaker 8: places where we previously never thought that was necessary. Coffee shops,
Speaker 8: cinema theaters, even car washes. More generally, the notion is
Speaker 8: that you give a tip where you can see and
Speaker 8: feel a service being rendered.
Speaker 2: Where did this come from?
Speaker 5: Well, it comes.
Speaker 8: From a couple of things. One is, of course, that
Speaker 8: these new machines at the till make it possible. Some
Speaker 8: of it is attributable to what happened during the pandemic,
Speaker 8: when Americans people around the world felt in a much
Speaker 8: more generous mood towards people who were taking the trouble,
Speaker 8: taking the risk of going to work despite the incredible dangers.
Speaker 8: Some of that has just stayed on. The other really
Speaker 8: interesting contributor to this is unemployment levels in the US
Speaker 8: are so low that many establishments grocery store for example,
Speaker 8: are struggling to find staff. And then the normal course
Speaker 8: of events when you're short of staff and when you're
Speaker 8: worried about losing staff to your competitors as you raise
Speaker 8: their salaries. Well, this is one way companies are raising
Speaker 8: income but passing on the responsibility for that directly to
Speaker 8: their customer.
Speaker 2: So how could this new trend hurt those who need
Speaker 2: these tips the most.
Speaker 8: Well, what's happening is that it's a bit of a
Speaker 8: bang shot. People are very disgruntled at having to leave
Speaker 8: tips in so many different and new places that they're
Speaker 8: becoming a little more stingy in the places where traditionally
Speaker 8: they were not where they were quite happy to leave
Speaker 8: tips in restaurants. In poll after poll after pol we
Speaker 8: are seeing that Americans are now less likely to leave
Speaker 8: a tip at a restaurant. And this is a serious
Speaker 8: problem because in the restaurant industry, most of the people
Speaker 8: to whom you leave tips, bus boys, servers, barmen, do
Speaker 8: not get paid a fair minimum wage. Their employers expect
Speaker 8: the gap between what they're being paid and a Liverpool
Speaker 8: wage to be filled by customers. And if you're if
Speaker 8: you are sort of punishing the waiters for let's say
Speaker 8: Starbucks's fault of charging you tips where you didn't previously give,
Speaker 8: that's unfair to the waiters. And it's not it's more
Speaker 8: than a question of being fair or unfair. It's it's
Speaker 8: it's a crisis for the restaurant industry. They too are
Speaker 8: struggling to find people and hold on to people. And
Speaker 8: if we pay lesson tips, or if we don't tip
Speaker 8: at all, that makes the restaurant industry the sort of
Speaker 8: place where nobody wants to work. And in an in
Speaker 8: an employment market as it is today, there are plenty
Speaker 8: of other options, and so people don't want to work
Speaker 8: in restaurants anymore.
Speaker 2: Do you think tip creep is here to stay.
Speaker 8: As a restaurant goer, I hope not. But there's a
Speaker 8: bigger problem, which is that the restaurant industry and its
Speaker 8: wage structure is profoundly.
Speaker 5: Unfair.
Speaker 8: I think it's time for the restaurant industry to pay
Speaker 8: its employees a fair wage, a minimum wage to start with,
Speaker 8: and then if they are struggling to find staff, they
Speaker 8: should do what other industries do, which is pay better,
Speaker 8: give better benefits. They'll have to pass the costs on
Speaker 8: to me as a customer, but I'm willing to pay
Speaker 8: that extra price, and if it leads to a situation
Speaker 8: where at the end of the day, I don't feel
Speaker 8: obliged to pay a huge tip just to make my server,
Speaker 8: you know, give my silver a chance to have a
Speaker 8: fair wage, That's an acceptable situation for me.
Speaker 2: Bloomberg Opinion columnist Body goes and that does it for
Speaker 2: this week's Bloomberg Opinion. We are produced by Eric mollow
Speaker 2: and you can find all of these columns on the
Speaker 2: Bloomberg terminal, and we're available as a podcast on Apple,
Speaker 2: Spotify or your favorite podcast platform. Stay with us today's
Speaker 2: top stories in global business headlines coming up. I'm Amy Morris,
Speaker 2: and this is Bloomberg.