Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinevin on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Big tech earnings dominating the
Speaker 1: headlines this past week, as did the latest government jobs report,
Speaker 1: and we'll get a macro look at the state of
Speaker 1: the American worker with the chief operating officer of LinkedIn,
Speaker 1: Dan Shapiro. Also ahead, we'll hear about the small group
Speaker 1: of billionaires who are devouring the world while touting a
Speaker 1: more socially conscious form of capitalism. We get that from
Speaker 1: journalist Peter S. Goodman. He's global economics correspondent at The
Speaker 1: New York Times, also the author of the new book Davos.
Speaker 1: Man casts a harsh light on some of the most
Speaker 1: powerful people in the corporate world. Also speaking of journalists,
Speaker 1: an assault on Hong Kong's independent press, the fall of
Speaker 1: Apple Daily is the subject of our cover story. All
Speaker 1: of that to come first, It's welcome the editor of
Speaker 1: Bloomberg Business Week magazine, Joel Webber and Joel We're gonna
Speaker 1: go in depth on the cover story a bit later on,
Speaker 1: but first of all, tell us why Apple Daily was
Speaker 1: the big story for you this week had to be
Speaker 1: the cover. Well, it was a big event last year
Speaker 1: in Hong Kong, Um and Beijing. Basically, how to how
Speaker 1: to takedown effectively of this pro democy democracy newspaper that
Speaker 1: is for years really been UM, a newspaper that was
Speaker 1: like the part of the fabric of Hong Kong, Um
Speaker 1: and Beijing. Basically went after the money, turned off the
Speaker 1: faucet and successfully basically silenced the newspaper that has had
Speaker 1: significant implications for Hong Kong. Already, the pro democracy movement
Speaker 1: had been a target once it lost UM, the newspaper
Speaker 1: Um Apple Daily, UM and Jimmy Lay. Obviously the tycoon
Speaker 1: Um behind the newspaper had already been jailed. It was
Speaker 1: It's become sort of this downward spiral for one of
Speaker 1: the world's financial capitals, So significant implications. Obviously, this all
Speaker 1: happened already UM. But the number of voices that Ian
Speaker 1: Marlowe the writer was able to bring into the story
Speaker 1: just made it feel like one of these definitive stories
Speaker 1: that we had to do it, and doing it basically
Speaker 1: here on the on the brink of the Winter Olympics.
Speaker 1: I thought it was another way of kind of talking
Speaker 1: about um China in a big way. We're gonna have
Speaker 1: much more a little later in the program when Ian
Speaker 1: Marlow joins us Joel. Meanwhile, it's been a big week
Speaker 1: for tech earnings. Facebook just getting crushed after reporting. We
Speaker 1: also heard from Google parent Alphabet making out quite well
Speaker 1: once again, and yet in this week's Tech section, Nico
Speaker 1: Grant writes that the company has struggled to gain market
Speaker 1: share and one area of growing importance. We are, of
Speaker 1: course talking cloud computing services uh really controlled by Amazon
Speaker 1: and Microsoft at this point. So what's Alphabet doing about it?
Speaker 1: So I think the meta scene here had earnings in
Speaker 1: this uh it's future earnings could look like. I think
Speaker 1: there's this and we're gonna be talking about this a
Speaker 1: lot this year. Is growth versus value and and big
Speaker 1: tech obviously has always been in that growth game. And
Speaker 1: there's a big question that I think Wall Street is
Speaker 1: opening up to, which is, you know, what are these
Speaker 1: big tech stocks? Are all of them still growth um
Speaker 1: and value. I think everyone's beginning to realize it could
Speaker 1: be having a moment here, but yet there's still companies
Speaker 1: like the alphabets that are still potentially in a growth mode.
Speaker 1: And one of those things that I think Google Google's
Speaker 1: cloud operation is attempting to do here is actually recognized
Speaker 1: that they are a distant UH force actually in cloud
Speaker 1: computing AWS, Amazon is number one, followed by Microsoft, Ali
Speaker 1: Baba is actually bigger than Google, and part of that
Speaker 1: is just because of the way that Google has for
Speaker 1: years actually UH organized its infrastructure. It was always the
Speaker 1: servers were always intended to support Google's products, so things
Speaker 1: like Gmail, Google Photos, YouTube that it was the whole
Speaker 1: system was optimized to be first and form of servicing
Speaker 1: those products and not clients necessarily. So Google is actually
Speaker 1: quietly spent um the past two years to try and
Speaker 1: overhaul its infrastructure in an attempt to actually become more
Speaker 1: reliable for its clients. And as you'll probably recall, there
Speaker 1: were some lot of reliability questions US in December, and
Speaker 1: Google hopes that it can make up some of that ground.
Speaker 1: And now keep in mind, it has a lot of
Speaker 1: ground to make up. So the I think that it
Speaker 1: will be something that the street continues to watch. But
Speaker 1: Google or alphabet UM clearly was a company that the
Speaker 1: streets like UM compared to Meta. Yeah, and that's what's
Speaker 1: fascinating because it talks about them putting out their strategies,
Speaker 1: as you said, Joel, becoming the most reliable cloud. It's
Speaker 1: hard to do that when you have problems, right, but
Speaker 1: everybody has problems, even the leaders. There are problems in
Speaker 1: the system. It's just kind of the nature of the
Speaker 1: business to some extent, that's right. And but you know,
Speaker 1: the question is can you attempt to control some of
Speaker 1: those variables UM, and they're you know, even Google has
Speaker 1: had problems with that in the past. UM. So it's
Speaker 1: the question though, is like this reliability message is not
Speaker 1: enough to make someone leave Aws or Microsoft in favor
Speaker 1: of of Google. And we'll have to watch UM. But
Speaker 1: you know, going from the seven or so percent of
Speaker 1: market shore they currently have, they have essentially a lot
Speaker 1: of upsets now when it comes to big tech, Joel.
Speaker 1: One person we watched closely is of course Cathy would
Speaker 1: have our investment management. She's been the subject of a
Speaker 1: Business Week cover story, one of the Bloomberg fifty because
Speaker 1: of her uber out performance in We should note more recently, though,
Speaker 1: a major struggle for her flagship our Innovation et F
Speaker 1: over the last year. So one was not a good year.
Speaker 1: It's not off to a good start in two. In
Speaker 1: the any in section this week, we learned that her
Speaker 1: investors they're actually holding firm for the most part. In
Speaker 1: this piece, Uh, it really talks about how there's never
Speaker 1: been somebody who's has the performance or under performance that
Speaker 1: Kathy would had in but investors have really stuck with her. Yeah,
Speaker 1: so there, this is a real curiosity. M Obviously she
Speaker 1: had an amazing m as the pandemic took hold those
Speaker 1: growth stocks that it is a hyper concentrated portfolio in
Speaker 1: in her flagship A r k K that et f UM.
Speaker 1: What happened since then is, you know what, what we're
Speaker 1: just talking about, those major growth stocks have begun to
Speaker 1: under port reform. That's Bloomberg Business Week editor Joe Webber
Speaker 1: with an overview of our issue well. Coming up next,
Speaker 1: the CEO of Lincoln tells us why many of us
Speaker 1: will never look at work the same way again and
Speaker 1: why that could spell bad news for employers in one
Speaker 1: particular area. You're listening to Bloomberg Business Week. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Spinovik from Bloomberg Radio. I love this
Speaker 1: first line of a recent essay that was written by
Speaker 1: our next guest, and here's what he said. Is the
Speaker 1: year relationship with work change forever. Those words from our
Speaker 1: next guest. We're talking about Dan Shapiro. He's the chief
Speaker 1: operating officer over at LinkedIn, the world's largest professional networking platform,
Speaker 1: is seeing millions of users changing jobs and also an
Speaker 1: increasing number looking for new career paths entirely, and Lincoln
Speaker 1: expects that to continue. It's part of the trend that
Speaker 1: Dan calls the Great reshuffle. Right now, more people are
Speaker 1: reconsidering what they want to do in their jobs than
Speaker 1: what they want to do with their careers at any
Speaker 1: time in recent memory. We run a survey at LinkedIn
Speaker 1: that suggested that of professionals in America in are going
Speaker 1: to rethink what they want to do. And what's interesting
Speaker 1: is that that is happening at a time when there's
Speaker 1: hasn't been a tighter labor market for professionals in recent memory.
Speaker 1: The economy is growing again. There's a massive imbalance in
Speaker 1: supply and demand for digital skills. And what that means
Speaker 1: is that as we come out of this pandemic period,
Speaker 1: as the world becomes more endemic and companies reconsider their
Speaker 1: policies for how they're going to work in this new world,
Speaker 1: that employees have a much stronger voice than they used
Speaker 1: to in this resetting the expectation. So it's gonna be
Speaker 1: a really interesting year. So I do wonder too, though,
Speaker 1: Damn Like, I feel like the pendulum can swing big
Speaker 1: time and workers do. It does feel like they are
Speaker 1: in the driver's seat right now, as so many employees
Speaker 1: pick your employee. They're all scrambling for workers, so employees
Speaker 1: in many ways can set their terms. Does that stick
Speaker 1: when the labor market corrects itself and a more normal
Speaker 1: labor market is back with us to do workers continue
Speaker 1: to have that leverage and that power. Only time will tell,
Speaker 1: But I think there's reason to believe that digital skills
Speaker 1: in particular are going to remain very tight for the
Speaker 1: foreseeable future. If you look at what's happened over the
Speaker 1: last few years, we were already on this journey around
Speaker 1: companies going through this idea of digital transformation, really digitizing
Speaker 1: their businesses, and the pandemic only accelerated that. If you
Speaker 1: think about the expectations consumers have now about what they
Speaker 1: expect when they interact with a restaurant or a retailer,
Speaker 1: it is a much more digital experience, and that's placing
Speaker 1: more and more burdens operationally on the companies that need
Speaker 1: digital talent to make those things real. So that is
Speaker 1: likely to continue for quite some time, and that will
Speaker 1: likely drive some of the policies and practices that many
Speaker 1: companies adopt. So I think that there's some real staying
Speaker 1: power here. What about for elements of this that that
Speaker 1: don't stay do we? You know, we're already seeing companies
Speaker 1: call their workers back to work right now. But we're
Speaker 1: seeing some shifts. You know, Carol and I talked about
Speaker 1: Apollo for for for private equity employees offering that one
Speaker 1: month of remote work. That's something that Carol, I mean,
Speaker 1: you've covered this stuff forever. That's that was unthinkable a
Speaker 1: few years ago, right, Yeah, exactly. It's really fascinating to see,
Speaker 1: like even the financial firms have been pushing back saying, okay,
Speaker 1: you can work from home, So Dan, where where are
Speaker 1: the things that go back to what they were where
Speaker 1: they were before? What are the changes that don't stick?
Speaker 1: I wish I had a crystal ball. I think that
Speaker 1: the thing that is most resonant with employees right now
Speaker 1: is this concept of flexibility. UH. People are happier, They
Speaker 1: report being happier when their jobs are more flexible. You
Speaker 1: see that looking at remote jobs, UH is something that
Speaker 1: if you look at all the jobs on LinkedIn and
Speaker 1: how many people were viewing different kinds of jobs. Just
Speaker 1: a few years ago, less than ten percent of the
Speaker 1: jobs were remote eligible that people looked at. That number
Speaker 1: is now all the job viewing is people curious about
Speaker 1: remote roles. And so I think that the idea of
Speaker 1: flexibility is something that has staying power. Exactly where the
Speaker 1: lines are drawn about what kind of flexibility works such
Speaker 1: that businesses can need their needs and the teams can
Speaker 1: be functioning. I think that's going to be some where
Speaker 1: everyone's watching everyone in time will tell you know. I
Speaker 1: recently UM caught up at the CEO of Cisco and
Speaker 1: Chuck Robbins and even he conceded and a company like Cisco,
Speaker 1: they have been doing hybrid work, you know for years
Speaker 1: pre pandemic. That's just the way many of the tech
Speaker 1: industry have been working. But even he acknowledged um being
Speaker 1: a little surprised at how innovative everybody really could be
Speaker 1: during the pandemic. Technology has made that much more possible.
Speaker 1: Like I think about, you know, as much as we
Speaker 1: make fun of all the zoom calls and things, you
Speaker 1: really can almost feel like you're with people. Yeah, I
Speaker 1: think we're going to see a tremendous amount of technological
Speaker 1: innovation in this space. Every leader has likely gone through
Speaker 1: a journey of being skeptical about how teams would operate
Speaker 1: when they were from home or in a hybrid capacity,
Speaker 1: and things have worked in a lot of ways better
Speaker 1: than expected. And that is coming at a time when
Speaker 1: there's more investment from software companies and trying to make
Speaker 1: this better for people. So those things come together. I think.
Speaker 1: I think there's a lot of optimism. Least I hold
Speaker 1: that these working styles will be effective, But exactly where
Speaker 1: we land, I think it's going to be something we'll
Speaker 1: have to see. Do you think, Dan, honestly, anything is
Speaker 1: lost without being in person with one another, because I
Speaker 1: do what I can. What I can say is that
Speaker 1: we have on occasion at LinkedIn had opportunities in a
Speaker 1: way that was safe and in compliance with health guidelines.
Speaker 1: We've had opportunities for some teams to spend time together
Speaker 1: in person, and it is like a spark of energy.
Speaker 1: It is a breath of share. People love having those moments. Now,
Speaker 1: whether that becomes people something people do more periodically as
Speaker 1: opposed to every day, it's interesting, Um, but I think
Speaker 1: you will continue to see the power of being together
Speaker 1: and creating connection as being really fundamental to how great
Speaker 1: teams work. Dan eager to talk to you about this
Speaker 1: story that we highlighted a little earlier in our broadcast
Speaker 1: about New York City requiring employers to list the minimum
Speaker 1: and maximum salaries on job postings. That's going to start
Speaker 1: this bring. According to the Wall Street Journal, it's getting
Speaker 1: some opposition from business groups. Can you talk a little
Speaker 1: bit about the way that being transparent with these positions
Speaker 1: when it comes to salary can empower workers? Absolutely well,
Speaker 1: it's a broad trend. Um. The trend towards salary transparency
Speaker 1: has been happening for years, and I think one of
Speaker 1: the guiding principles behind it is that there's evidence to
Speaker 1: suggest that it helps remove bias in the process um.
Speaker 1: Some people of different backgrounds negotiate differently, and oftentimes the
Speaker 1: transparency that you can bring to the conversation yields outcomes
Speaker 1: where there is less bias in terms of pay um.
Speaker 1: And so I think that's one of these is driving it,
Speaker 1: and it's it's something that we think it's a positive.
Speaker 1: Are you seeing more companies post on linked in those
Speaker 1: salary ranges for jobs that are being offered, Like, do
Speaker 1: you have any data that that that shows that the
Speaker 1: trend is happening on LinkedIn too? I don't have any
Speaker 1: data myself right now, but I know it's a broad
Speaker 1: trend that's going on in the industry. Was the other
Speaker 1: thing that's going on is obviously we're an increasingly inflationary
Speaker 1: environment and companies are trying to figure out how that's
Speaker 1: going to play out in their in their compensation packages,
Speaker 1: and particularly as it's a tight labor market, workers are
Speaker 1: asking questions around how does that what does that mean
Speaker 1: for my pay? And similarly, companies are grappling with as
Speaker 1: employees are working in different locations in the same job,
Speaker 1: how do they reconcile whether they pay different amounts in
Speaker 1: different cities for similar work. So what we're going to
Speaker 1: find as we enter in the two is a world
Speaker 1: where executive teams are gonna have to think through pay
Speaker 1: policies um as one of the core questions that they
Speaker 1: asked themselves. That was Dan Shapiro, chief operating officer at LinkedIn.
Speaker 1: Still ahead on Bloomberg Business Week. It's been an uphill
Speaker 1: climb for the cannabis industry. Is regulatory easing has been
Speaker 1: really slow to him to materialize? Why the head of
Speaker 1: publicly traded truly is optimistic that better days are ahead.
Speaker 1: We'll speak with the CEO, Kim Rivers on the other side.
Speaker 1: This is Bloomberg Broadcasting from the Financial cap Love the World,
Speaker 1: Bloomberg He Love the Frio in New York to Washington,
Speaker 1: d C. Bloomberg to Boston, Bloomberg one oh six one
Speaker 1: to San Francisco, Bloomberg nine sixty to the country Sirius
Speaker 1: XM Chado one nine team, and around the globe the
Speaker 1: Bloomberg Business app and Bloomberg Radio dot Com. This is
Speaker 1: Bloomberg Business Week. So this past week you might have
Speaker 1: noticed our Bloomberg team put out a story. It was
Speaker 1: about how last year was a rough one for the
Speaker 1: cannabis industry. It definitely had high hopes initially pinned I
Speaker 1: hope so initially pinned on the incoming Biden administration to
Speaker 1: start one right, that was really kind of the mood.
Speaker 1: But then tim it moved to an atmosphere where we
Speaker 1: had a lot of gridlock. And then those cannabis companies,
Speaker 1: certainly the publicly held ones, we saw an extended decline
Speaker 1: in their stock prices. Progress on the regulatory front it's
Speaker 1: essential for the industry's fortunes to shift. That's according to
Speaker 1: our colleagues at Bloomberg Intelligence, and Kim Rivers thinks that's
Speaker 1: still on the horizon. Kim you've heard of before on
Speaker 1: our air. She's the chairman and CEO of Quincy, Florida
Speaker 1: bas True Leave Cannabis. The public company is more than
Speaker 1: a hundred and sixties stores nationwide, a market value of
Speaker 1: about three point nine billion dollars. Truly have acquired Harvest
Speaker 1: for two point one billion dollars. That was a few
Speaker 1: months ago, back in October. That made it the largest
Speaker 1: cannabis operator in the space. Here's the question, though, what
Speaker 1: will it take for the pot company to fully realize
Speaker 1: the benefits of that distinction? What I would say is
Speaker 1: that there are lots of reasons for continued optimism across
Speaker 1: the cannabis landscape. UM. Certainly, as we've talked about previously,
Speaker 1: there was a lot of high hopes for federal change
Speaker 1: much earlier with a Democratic control of Congress. However, we
Speaker 1: do have a continued champion in Congressman prol Letter, and
Speaker 1: it was recently announced that he was successful and getting
Speaker 1: safe banking attached to the compete facts. And so we're
Speaker 1: not we're not giving up hope yet, UM with respect
Speaker 1: to safe thanking, which we think makes a ton of
Speaker 1: sense and has been championed not only by the cannabis
Speaker 1: industry but also by banking UH folks on the hill
Speaker 1: as well, UM and and again seems to be continued
Speaker 1: to garner significant support and would certainly make a lot
Speaker 1: of sense UM for this Congress to go ahead and
Speaker 1: pass prior to the terms. That being said, though, as
Speaker 1: we've also talked about before, business still remains strong. We
Speaker 1: actually just truly just closed a second round of debt
Speaker 1: um seventy five million last week, bringing our most recent
Speaker 1: race total to four million. It was oversubscribed and at
Speaker 1: industry leading rates, we're seeing debt rates continue to come
Speaker 1: down for the industry. And so you know what we
Speaker 1: what we see in the stock market is a continued
Speaker 1: separation between fundamentals and where the market is UM and
Speaker 1: and we think that that's going to close here over
Speaker 1: the next little while. And and again fundamentals are strong
Speaker 1: and UM folks are are continuing to uh to show
Speaker 1: strong demand across the US. All right, so can we
Speaker 1: be as bold or so bold to say in terms
Speaker 1: of regulatory Um, what you guys have all been waiting
Speaker 1: for for some kind of co usion on a federal level,
Speaker 1: are we likely to get it? Can this year? And
Speaker 1: if we don't get it, and if we don't get
Speaker 1: it this year, and if we don't get it this year,
Speaker 1: is it tricky because then we're dealing with a whole
Speaker 1: other election cycle, are counting down to another big election cycle. Yeah,
Speaker 1: you know what's what's interesting about that? And so you know,
Speaker 1: I can't have a prediction. UM. I do think that
Speaker 1: incremental change is the more likely path. And I do
Speaker 1: think that safe thinking this is a very logical and
Speaker 1: rational first step. Uh. So that's why you hear me,
Speaker 1: you know, continue to talk about safe banking. I'm very
Speaker 1: hopeful that we potentially it could be SAE bankings plus
Speaker 1: meaning spate banking plus some sort of criminal justice UM,
Speaker 1: and or other social equity reforms to go along with it. UM.
Speaker 1: I do think that obviously, if it doesn't happen by
Speaker 1: the mid terms, we may see a shift, and UM,
Speaker 1: you know, obviously there's always a reset after that. However,
Speaker 1: what I can say is that with Congresswoman maces Uh
Speaker 1: comprehensive reform bill dealing with cannabis, and as you know,
Speaker 1: she's a Republican out of South Carolina, UM, this is
Speaker 1: becoming over time less and less partisan. As of course
Speaker 1: we've seen or more states come on board. UM. We
Speaker 1: have a number of Southern states, UM, that are actually
Speaker 1: implementing medical programs here for the next six to twenty
Speaker 1: four months, and so it becomes, you know, less and
Speaker 1: less a partisan issue. I think would become more and
Speaker 1: more likely that kind of regardless of which party is
Speaker 1: in control on the hill. UM, it sort of becomes
Speaker 1: again not only an if, but just to win. Well,
Speaker 1: I want to talk more about that. And I think
Speaker 1: I've shared this story before, Carol, but when I was
Speaker 1: in graduate school just two thousand and sixteen, a friend
Speaker 1: of mine wanted to start a cannabis entrepreneurship club and
Speaker 1: this was business school and he couldn't do it. It
Speaker 1: was he was facing pushback from the administration. He had
Speaker 1: to go around and get signatures. And I'm wondering, Kim,
Speaker 1: how much has changed in just a few short years.
Speaker 1: If we're thinking that's just five years ago, six years ago. Um,
Speaker 1: how is the perception a public perception around cannabis changed. Oh,
Speaker 1: it's it's changing daily. I was just forward in an
Speaker 1: article this morning that the NFL has just announced a
Speaker 1: million dollar donation for research at that was resparked to
Speaker 1: cannabis for as alternate therapy stree mentum having to do
Speaker 1: primarily with concussions um in the NFL. So I mean
Speaker 1: think back to, you know again that same time period
Speaker 1: you just mentioned, we're literally players, um, you know, significant
Speaker 1: players were being banned from the NFL because of failed
Speaker 1: drug casts involving cannabis. That's Kim Rivers. She's chairman and
Speaker 1: CEO of True Leaf Cannabis. Yeah, I guess the expectations
Speaker 1: certainly shifted in the Biden administration obviously has its hands
Speaker 1: full and had its hands full, but clear regulatory framework
Speaker 1: is really important, especially on a federal level, for these companies,
Speaker 1: because it's really difficult for them to do business. I mean,
Speaker 1: look at what banks. Banks don't want to touch this
Speaker 1: stuff exactly, and this has been the main issue, I
Speaker 1: feel like Tim from the get go, when we started
Speaker 1: really focusing on this whole sector. You're listening to Bloomberg
Speaker 1: Business Week. Coming up next, The Rise of davos Man.
Speaker 1: It's a thing apparently, how a small group of billionaire
Speaker 1: executives came to reap untold power and use the pandemic
Speaker 1: to further perpetuate economic inequality across the globe. At least,
Speaker 1: so says our next guest. This is Bloomberg. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: takes Tim Stinovik from Bloomberg Radio. In his new book,
Speaker 1: journalist Peter S. Goodman writes about davos Man. It's a
Speaker 1: term coined by the late political scientist Samuel Huntington's. It
Speaker 1: refers to a group of very well known individuals in
Speaker 1: the business and broader world. We talk about him a lot. Yeah,
Speaker 1: They're known to attend the World Economic Forums annual meeting
Speaker 1: in Davos, Switzerland, when it takes place in person. Anyway,
Speaker 1: they're the elite executives, the ones that we in the
Speaker 1: business media, well, we cover them a lot, the movers
Speaker 1: and shakers, the billionaires that were constantly discussing on Bloomberg.
Speaker 1: In fact, this group I think we probably mentioned several
Speaker 1: times throughout the week. The thing is, Peter isn't a
Speaker 1: fan of davos Man. Peter is the New York Times
Speaker 1: Global economics correspondent, and he talks about this in his
Speaker 1: new book, davos Man, How the Billionaires Devoured the World,
Speaker 1: and uh, he gets into he's talking about specifically, I'm
Speaker 1: using it to describe not only foum participants and billionaires,
Speaker 1: but a special kind of billionaire who would have us
Speaker 1: believe that their interests are our interests collectively. And that's
Speaker 1: this idea that if we organize our economies and our
Speaker 1: societies around sending more wealth to the people who already
Speaker 1: have most of it, the magic of trickle down economics
Speaker 1: will take care of the rest and we will all prosper.
Speaker 1: We've been running an open air experiment in this idea
Speaker 1: that I refer to as the cosmic lie for the
Speaker 1: last half century, and the results are not at all pretty.
Speaker 1: This is an idea that davos Man uses really to
Speaker 1: protect himself against democracies trying to redistribute the wealth in
Speaker 1: a fair way. Well, you choose five of these Davos
Speaker 1: meant to to highlight throughout the book. Jeff Bezos, Stephen Schwartzman,
Speaker 1: Larry Think, Jamie Diamond, Mark Bennioff names that our audience
Speaker 1: is certainly familiar with. Why these five folks, and look
Speaker 1: and they're all men. Yeah, well, look, in reality, davos
Speaker 1: Man is mostly male, mostly American, mostly white. There are
Speaker 1: lots of exceptions, but that's that's the rule. Um. You know, Look,
Speaker 1: I could have picked almost anybody within the billionaire class
Speaker 1: who goes to Davos and come up with largely the
Speaker 1: same book. I take these guys because you know, it's
Speaker 1: a cross section of finance and tech. Uh. And two
Speaker 1: of them, Benny Off and Larry Fink in particular, are
Speaker 1: champions of this idea, stakeholder capitalism, you know, much heralded,
Speaker 1: much celebrated by much of the business press. This notion
Speaker 1: that Milton Freedman is um is over and that companies
Speaker 1: are no longer just organized to return profit to shareholders.
Speaker 1: Now they're catering to what they call stakeholders, that's labor,
Speaker 1: local communities, uh, social aims. And you know, I argue
Speaker 1: in the book that the pandemic was really the first
Speaker 1: big test of stakeholder capitalism. In in the summer en
Speaker 1: a bunch of CEOs coalescing at the Business Roundtable then
Speaker 1: headed by Jamie Diamond actually signed off on this new
Speaker 1: statement of a purpose of a corporation. And I argue,
Speaker 1: and I think the pandemic makes pretty clear that they
Speaker 1: used this pledge of stakeholder capitalism as a way to say,
Speaker 1: you know, we've got this. You don't need to tax us,
Speaker 1: you don't need to regulate us. We you can outsource
Speaker 1: to us with confidence. Uh. The solving of the world's
Speaker 1: biggest problems like climate change, like gender and racial inequality,
Speaker 1: and the pandemic has shown that that was really crude
Speaker 1: exercise in public relations. You know, Peter, it's really interesting
Speaker 1: because it's just coming off a conversation we just had
Speaker 1: about E s G investing, which we talked about a
Speaker 1: lot here at Bloomberg, and there's so much money going
Speaker 1: into I'm sure you know into the world of E
Speaker 1: s G to the point where it's becoming, you know,
Speaker 1: a very significant percentage of overall assets that are out there. Um,
Speaker 1: how do we kind of change this because I think
Speaker 1: there's a lot of investors I think they're doing good
Speaker 1: by tapping into E s G and yet it kind
Speaker 1: of is many would argue it's not. I mean, we
Speaker 1: need more transparency, like there's Look, there's nothing wrong with
Speaker 1: the idea of stakeholder capitalism or E s G. Right.
Speaker 1: I mean, if companies want to actually try to solve
Speaker 1: social aims and they're being transparent about that, and some
Speaker 1: investors don't want to ride on that particular boat, they
Speaker 1: don't have to put their money there, that's fine. But
Speaker 1: we need a way to actually test these claims instead
Speaker 1: of just you know, taking it. I mean, I mean here,
Speaker 1: you know, take a guy like Mark Beniot, who's the
Speaker 1: guy who does a lot of philanthropy. This is the
Speaker 1: CEO of Salesforce, big Silicon Valley tech company. He actually
Speaker 1: says at Davos last year virtual gathering because they couldn't
Speaker 1: meet because of the pandemic. CEOs are the real heroes
Speaker 1: of the pandemic. And he's not talking about frontline medical workers.
Speaker 1: He's not talking about parents dealing with kids cooped up
Speaker 1: dealing with business learning, or essential workers delivering our food
Speaker 1: CEOs and he says, uh, you know, it was the
Speaker 1: eos of companies who gave us vaccines and credits that
Speaker 1: staved off bankruptcy. Specifically said, the government didn't save you,
Speaker 1: we save you. You were talking about how Mark Bennioff
Speaker 1: of Salesforce, UH, last year at the Virtual Davos event,
Speaker 1: talked about how the CEOs the were the real heroes. Um.
Speaker 1: And you write about that in your book. You also
Speaker 1: you engaged with with Mark Bennioff for this book. You
Speaker 1: spoke to him, UM, And I know I'm wondering what
Speaker 1: the productive conversation is around that, Like what did he
Speaker 1: tell you when you when faced with your criticism. Yeah,
Speaker 1: he seemed to be into the back and forth, which
Speaker 1: I think is an indicator of how you know, these
Speaker 1: guys use their participation in what they call multi stakeholder dialogues.
Speaker 1: They love to go to Davos and engage in these
Speaker 1: earnest conversations about climate change and race and class, and
Speaker 1: they just don't like to actually do anything. They're not
Speaker 1: into sacrifice. They're into finding wind wind solutions to every
Speaker 1: problem and using Davos to to you know, signal their virtue.
Speaker 1: So Benny Off will talk openly about anything. I mean,
Speaker 1: I've been to Davos and seeing CEOs like benning Off
Speaker 1: go off and simulate the Syrian refugee experience. You know.
Speaker 1: They'll be blindfolded and let around in the dark while
Speaker 1: people are shouting at them in a language they don't understand,
Speaker 1: demanding papers. And then they all congratulate themselves for their
Speaker 1: empathy and they go off and eat truffles and drink
Speaker 1: champagne and a banquet, you know, hosted by some global bank.
Speaker 1: Benny Off was was very willing to get into it,
Speaker 1: but the status quo reigns with Davos. Man, how do
Speaker 1: we work through this? Tim and I talked about this
Speaker 1: a lot Peter about I certainly feel fortunate, but I
Speaker 1: am the granddaughter of immigrants who came with nothing, you know,
Speaker 1: and I've seen or heard about parents going through the depression,
Speaker 1: Like how do I But I've worked really hard to
Speaker 1: achieve a certain amount and you know, and not on
Speaker 1: the level of billionaires. I understand that, but I feel
Speaker 1: very torn certainly. Um, there are people who are just
Speaker 1: in the equity market. So there four o one case
Speaker 1: who have benefited during this pandemic. We're not billionaires. We
Speaker 1: have benefited, others have not. So what's the productive? Like
Speaker 1: Tim talks about, what's the productive conversation that we need
Speaker 1: to be having? Is it with lawmakers? Is it with CEOs?
Speaker 1: With it? You know, we do this at Bloomberg. We
Speaker 1: have these conversations and get to some uncomfortable areas. So
Speaker 1: how do we get to a better point here or
Speaker 1: what's what is it that we need to be asking
Speaker 1: of these CEOs? You know, we don't really need anything radical, uh,
Speaker 1: and we don't really need to ask much of the CEOs.
Speaker 1: I mean they can go on and maximize profits and
Speaker 1: look for innovation and run their companies. That's all good
Speaker 1: and well. I mean I'm not I'm not suggesting that
Speaker 1: we ought to expect that they're going to be what
Speaker 1: they tell us they are, these like agents of social progress.
Speaker 1: Their CEOs let them run their companies. But those of
Speaker 1: us who are living in democracy ought to be demanding
Speaker 1: the things that we used to have, progressive taxation, labor
Speaker 1: power so that workers can actually get a commensurate share
Speaker 1: of the gains, and we need anti trust enforcement. And
Speaker 1: this is not some sort of radical agenda that this
Speaker 1: is like what we had in the years after the
Speaker 1: Second World War to till the mid nineteen seventies, and
Speaker 1: you know, we could do that again. It's it's not
Speaker 1: easy because davos Man has formidable apparatus that he uses
Speaker 1: to fight off any attempts to redistribution, any any attempts
Speaker 1: had change. But that's you know, that's a proven solution, uh,
Speaker 1: in terms of, you know, generating economic games that are
Speaker 1: helpful to more people. What about a wealth tax, Peter,
Speaker 1: what has your reporting told you about the efficacy of
Speaker 1: a wealth tax? I mean, we've got to have a
Speaker 1: wealth tax, and anything short of a wealth tax just
Speaker 1: simply isn't fair. And then most people feel like the
Speaker 1: game is working. I mean, Jeff Bezos, his income is
Speaker 1: eighty three thousand dollars a year. That's a salary from Amazon.
Speaker 1: He's paid about as much as a public school teacher
Speaker 1: in California. If we tax income, then we live in
Speaker 1: a world where Jeff Bezos, Steve Schwartzman, who's also a
Speaker 1: main character in my focus, worth thirty five billion dollars.
Speaker 1: These guys are gonna be paying less in their income
Speaker 1: and wealth to the government and the people who are
Speaker 1: scrubbing their toilets. And the result of that isn't simply
Speaker 1: that we can't finance government programs that it turns out
Speaker 1: we actually need, especially in an emergency like a pandemic.
Speaker 1: It's also that we then live in a democracy where
Speaker 1: large numbers of people have legitimately concluded that their needs
Speaker 1: and interest, their ability to support their families just doesn't
Speaker 1: count very much for the for the powers to be.
Speaker 1: And you can draw a direct line between that and
Speaker 1: the rage that we feel in American life into the
Speaker 1: January six insurrection, the fact that huge numbers of people
Speaker 1: won't take these COVID vaccines. I mean, a lot of
Speaker 1: this is just foundationally. The people don't believe in the system,
Speaker 1: and not because they're crazy. I'm not condoning where they
Speaker 1: go with their conspiracy theories and their racist tropes, but
Speaker 1: they're they're vulnerable to political opportunists who will cater to
Speaker 1: their worst instincts, and unless we deal with inequality, we're
Speaker 1: stuck with that. That's Peter S. Goodman, global economics correspondent
Speaker 1: for the New York Times. His new book, davos Man,
Speaker 1: How the Billionaires Devoured the World, is out now. That's
Speaker 1: that the first hour of the weekend edition of Bloomberg
Speaker 1: Business Week from Bloomberg Radio. I'm Carol Masser and I'm
Speaker 1: Tim Stanback. Coming up in our next hour, the business
Speaker 1: of ultra high net worth luxury that davos Man surely
Speaker 1: partakes in. We're talking eight and nine figures, super yachts
Speaker 1: and homes that cost fifty million dollars or more. Who's
Speaker 1: selling and who's buying will explain. I do believe there
Speaker 1: was a story this week about Jeff Bezos and his
Speaker 1: yacht in a bridge. Was it in Amsterdam? Yeah, well
Speaker 1: yeah it was in the Netherlands. Um and the other
Speaker 1: yacht is so big that they have to dismantle the bridge. Yeah,
Speaker 1: just saying, just gonna put that out there the context,
Speaker 1: speaking of like infrastructure, right, speaking of a lot of stuff. Plus,
Speaker 1: there's a new trend sweeping the footwear business. It is
Speaker 1: called not my term, but it is called ugly core.
Speaker 1: We'll tell you which company is cornering the market. And
Speaker 1: I'm going to have to tell you a couple of
Speaker 1: those names. A couple of those ugly corps of ugly corps,
Speaker 1: but you were telling me that, Okay, there's a few
Speaker 1: in my home. You can't shy away from the U words.
Speaker 1: The story right, and on a more serious side. Up next,
Speaker 1: we discuss our cover story. It's about the demise of
Speaker 1: a single newspaper and how it tells just how far
Speaker 1: China will go to bring Hong Kong into live. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business, finance and tech news as it happens.
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovin on Bloomberg Radio. Hi am Carol Masser, and
Speaker 1: plenty ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including a look at how Decker's
Speaker 1: Outdoor is turning some pretty profits by building an ugly
Speaker 1: Sioe empire. Plus the height of luxury by land and
Speaker 1: by sea. We'll talk super yachts with the CEO of
Speaker 1: Burgess and the fifty million dollar home club with our
Speaker 1: Bloomberg Pursuits team. You get a fifty million dollar home,
Speaker 1: you've got to get a fifty million dollar yacht. They
Speaker 1: go together. I don't make the rules. No, alright, first
Speaker 1: up though this hour, let's get to this week's cover story.
Speaker 1: It's an important one, a serious one. Now. You might
Speaker 1: remember back in June of last year, Hong Kong authority
Speaker 1: shut down Apple Daily. It was a popular, really popular
Speaker 1: newspaper aligned with the city's democracy movement. It's become clear
Speaker 1: that China's attack on the publisher was a template for
Speaker 1: a broader crackdown on independent organizations of all kinds in
Speaker 1: Hong Kong, and it's only getting worse. To learn more,
Speaker 1: we caught up with the man who wrote the piece,
Speaker 1: Bloomberg News Asia Government senior reporter Ian Marlow. Apple Daily
Speaker 1: was an enormously popular newspaper in Hong Kong. Just to
Speaker 1: give you a sent there were roughly three point eight
Speaker 1: million registered users on the website, which is roughly half
Speaker 1: the city's population, and just before they were shut down,
Speaker 1: they had more than more than six hundred thousands paying
Speaker 1: digital subscribers. So very popular with a huge source of news.
Speaker 1: But it was also at the heart to some extent
Speaker 1: of the pro democracy movement in Hong Kong. It was
Speaker 1: owned by Jimmy Lai, a very wealthy tycoon in Hong Kong, who,
Speaker 1: unlike the other uh you know, establishment figures in that city,
Speaker 1: was willing to use his resources, his financial firepower to
Speaker 1: push back against China, to push back against what they
Speaker 1: were doing in Hong Kong with regards to pushing the
Speaker 1: National Security Law through, uh you know, jailing all these
Speaker 1: pro democracy advocates and those sorts of things. So he
Speaker 1: was a prime target not just for the local Hong
Speaker 1: Kong government, for Beijing more broadly, and they had singled
Speaker 1: him out numerous times, uh you know, for being a
Speaker 1: sort of rabble rouser in Hong Kong. And when the
Speaker 1: government went after his paper, they really went after. They
Speaker 1: froze the bank accounts, they arrested the top staff. There
Speaker 1: were five hundred police officers sent to raid the headquarters
Speaker 1: in Hong Kong. This was unprecedented in a city that
Speaker 1: is not just the global financial center, but was also
Speaker 1: a sort of regional base for international media companies from
Speaker 1: from Bloomberg to CNN to to others. So it was
Speaker 1: the shound was shocked, but it was also to a
Speaker 1: large degree template for what Beijing wanted to do with
Speaker 1: Hong Kong in the future. And since it was shut,
Speaker 1: things have only accelerated further. You know, Ian, I think
Speaker 1: about I worked at the Wall Street Journal on a
Speaker 1: broadcast called the Wall Street Journal Report, and I mean,
Speaker 1: Hong Kong was this safe zone, right and you know,
Speaker 1: um when it came to business markets, uh, you name it, uh,
Speaker 1: and everybody kind of looked to Hong Kong is maybe
Speaker 1: a sign of what was hopefully to come were broadly
Speaker 1: in China, and now we're finding out that that's not
Speaker 1: the case. By targeting Apple Daily, right, it could have
Speaker 1: targeted you know, a lot of things initially, but by
Speaker 1: really going aggressively after Apple Daily, that you what, yeah,
Speaker 1: I mean, it basically tells you that light in mainland China,
Speaker 1: there is just zero tolerance for anything that could represent
Speaker 1: an alternate power center in Hong Kong. And systematically, bit
Speaker 1: by bit, the government had gone after the opposition politicians
Speaker 1: in Hong Kong, Tho's democracy advocates who were actually working
Speaker 1: within the system. They went after Apple Daily, you know,
Speaker 1: right off the bat closed that that was a huge
Speaker 1: source of opposition support. Then they started going after smaller targets.
Speaker 1: They started going after charities, NGO's, some of the organizations
Speaker 1: that had, you know, promoted some of the peaceful protests
Speaker 1: over over the past you know, twenty years um and
Speaker 1: but basically one by one sort of dismantled anything that
Speaker 1: could represent any threat at all to China getting its
Speaker 1: way in Hong Kong. And and Apple Daily was absolutely,
Speaker 1: without any doubt it was the biggest one there. And
Speaker 1: I think that the big thing about Apple Daily's UH
Speaker 1: closure was, you know what happened. Everyone was saying, well,
Speaker 1: who Who's next? And I don't think anyone's really even
Speaker 1: asking that question anymore because everything that's happening people guests
Speaker 1: from the outset of the National Security Law of being
Speaker 1: put down in June, that basically gone after anything that
Speaker 1: represents memorials to the t eminence, where anyone was agitating
Speaker 1: in a labor union, all those sorts of things by
Speaker 1: the and now even just this week, we saw the
Speaker 1: University of Hong Kong, which is one of the most
Speaker 1: prestigious universities in the city, just had a visa rejected
Speaker 1: for a researcher who is meant to come into the
Speaker 1: city just to do UH you know, research on LGBT
Speaker 1: key rates and so it's sort of a endless procession
Speaker 1: here where you know, anything can be considered somewhat uh
Speaker 1: anti establishment if the authorities really feel like it's it's
Speaker 1: a threat to them. So um, you know. And the
Speaker 1: other thing here is that Apple Daily was a business.
Speaker 1: It was was owned by a publicly listed company. Jimmy
Speaker 1: Lai had seventy one percent of the shares in that company.
Speaker 1: He was overruled and he was, uh, there was a
Speaker 1: government order for him not to exercise his voting right
Speaker 1: and then the government throws the accounts without any resource
Speaker 1: to the courts, and then that he was shut down.
Speaker 1: So that's something that I think a lot of people
Speaker 1: in Hong Kong are concerned about because essentially the skies
Speaker 1: the limit now in terms of what the government can
Speaker 1: use this law for. That was Bloomberg News Asia Government
Speaker 1: senior reporter Iain Marlowe. He wrote this week's cover story.
Speaker 1: You're listening to Bloomberg Business Week. Coming up next bloated dad, sneakers,
Speaker 1: furry sandals and open toe boots. Tim, come on, you've
Speaker 1: got a few in your class. I do, well, Okay,
Speaker 1: so we're talking uggs and more. Next, but growing up
Speaker 1: in southern California and surfing, like surfers wore ugs, so
Speaker 1: it was funny to see them in the early part
Speaker 1: of the two thousands, go to like really cool. So
Speaker 1: you're saying you're ahead of this ugly You crazy, but
Speaker 1: I didn't know. Yeah, but I wasn't because I was cool.
Speaker 1: All Right, We're going to talk about how Decker's Outdoors
Speaker 1: making billions selling so called ugly core Footbear. This is Bloomberg.
Speaker 1: This is Bloomberg Business this Week with Carol Masser and
Speaker 1: Bloomberg Quick takes Tim Stinovik from Bloomberg Radio. Ugly core
Speaker 1: It's a fashion trend that scorns beauty in favor of
Speaker 1: self affirmation, and while it isn't new, it is garnering
Speaker 1: interest from a whole new group of clientele. The style
Speaker 1: is attracting more customers in part because quote, the collective
Speaker 1: hangover of two years of barely squeezing a foot into
Speaker 1: a heel, pump, loafer, wingtip, Oxford or even a pair
Speaker 1: of ballet flats has intensified and unapologetic love affair with
Speaker 1: pragmatic footwear. Well, that beautifully written line comes from Bloomberg
Speaker 1: News reporter Kimbasin. He used to cover luxury and retail.
Speaker 1: Current beat entails covering celebrities, athletes and their business dealings,
Speaker 1: as well as big sports companies. So, Kim, let's talk
Speaker 1: about Decker's outdoor. Where does that kind of fit into
Speaker 1: your beat? Yeah? So I cover like sportswear companies as well,
Speaker 1: like Nike and um under Armor. So so this kind
Speaker 1: of falls in there. I do a lot of a
Speaker 1: lot of footwear work, and ugly shoes are certainly part
Speaker 1: of that. All right, So what is ugly core? Tell
Speaker 1: us what that really means, because unfortunately I have some
Speaker 1: ugly core in my closet. Yeah, so, so beyond the
Speaker 1: definition that that we came up with up there. Um,
Speaker 1: some examples are like, you know those easy phone runners.
Speaker 1: They look like marshmallows, but they have holes in them. Um.
Speaker 1: Converse has made some of these things where they've put like, uh,
Speaker 1: they've rubberized their Chuck Taylors so they look like rain boots.
Speaker 1: Um Crocs are probably one of the best examples here.
Speaker 1: Those are shoes with holes in them that are made
Speaker 1: out of this weird home it's it's it's these kinds
Speaker 1: of shoes that aren't, Um, they just look a little off,
Speaker 1: right that they don't look like like a like a
Speaker 1: ADDA superstar sneaker or something like that. They just look
Speaker 1: a little weird. Well, I mean you're saying that a
Speaker 1: pair of Crocs with a piece of KFC Fried chicken
Speaker 1: hanging off of it looks weird? Kim, No, no, unless
Speaker 1: you you're really really indicacy exactly. Well, hey, let's talk
Speaker 1: a little bit about where Decker's outdoor crocks. The share
Speaker 1: price was up four percent last year, it's down this year,
Speaker 1: but basically like Tesla over the last few years. Yeah,
Speaker 1: no joke, I mean it's been yeah, stratospheric, Kim. I
Speaker 1: want to talk about Decker's outdoor though, because they have Teva, Uh,
Speaker 1: they have the aforementioned Hoca shoes. Am I saying that right? Kim? Hoca? Yes,
Speaker 1: I think Coca. Yeah, and among many others including as well, um,
Speaker 1: Where's Where's How does Decker embrace that what you refer
Speaker 1: to as the you were Yeah, so those company is
Speaker 1: about fifty years old. For nine years old and at
Speaker 1: this point it's the last physical year at the two
Speaker 1: point five billion in revenue and they built themselves up
Speaker 1: by buying up a lot of these other brands. So
Speaker 1: what started as a company that just made one little
Speaker 1: flip flop, which is actually kind of boring. It was
Speaker 1: just it was just a flip flop brought on these other,
Speaker 1: these other weird two brands like uh like UG, and
Speaker 1: UG has been really the driver for them. It has
Speaker 1: been its biggest brand for for so many years until
Speaker 1: very recently when Hocus sur passed it at one point
Speaker 1: last year. And those are those are running shoes, but
Speaker 1: they're like engorged, enormous sold running shoes that are very,
Speaker 1: very comfortable and compete with the best kind of athletic
Speaker 1: wear shoes on the planet. All right, First of all,
Speaker 1: I have bugs on as we speak. I didn't know that.
Speaker 1: It's interesting is before we got going, Kim Tim and
Speaker 1: I were talking about Hoka. Because what's interesting is my
Speaker 1: older sister was the first one to say, all these
Speaker 1: Hoca sneakers they're not pretty, but they're so comfortable. I
Speaker 1: love them. Okay, she's older. And then my eighteen year
Speaker 1: old daughter is like, I gotta have Hoca sneakers. Mom, Like,
Speaker 1: it's amazing the gamut of people who are tapping into
Speaker 1: these Yeah, and the things that the ugly word is is.
Speaker 1: It was really do they use the ugly word? Well,
Speaker 1: I talked to a bunch of different executives here and
Speaker 1: they have different opinions on it, right, So one of
Speaker 1: them said, you know, beauty is in the eye of
Speaker 1: the beholder. Another one said, um, she said, we would
Speaker 1: build out of simplicity and purity of purpose. And then
Speaker 1: the CEO, his name is Dave Powers. I went out
Speaker 1: to California to visit him and chat with him, and
Speaker 1: he took me through their their design area and everything.
Speaker 1: He was like, I don't I don't mind the ugly moniker.
Speaker 1: Uh he said, quote it basically says you're different, You're
Speaker 1: owning something distinct. It's a little off, but there's something
Speaker 1: interesting about it. Well, how much of this sort of
Speaker 1: turned to ugly was about really shaking things up and
Speaker 1: getting noticed, Because when I first started seeing these these
Speaker 1: shoes come out, I was like, wait a second, it
Speaker 1: looks like they're trying to make these ugly on purpose,
Speaker 1: because this is actually part of a serious turnaround strategy
Speaker 1: for the company. Yeah, the original versions of these things
Speaker 1: really came out of practmatism, like these were um comfortable
Speaker 1: shoes that it made sense to make them this way.
Speaker 1: But if you look all the way up into the
Speaker 1: last few years where um Deckers was in trouble, back
Speaker 1: in seventeen so and not not all that long ago,
Speaker 1: um ugs were no longer raking in the It wasn't
Speaker 1: growing anymore, right, and they were spending more than they
Speaker 1: were taking in. So at that point there was activists
Speaker 1: investors who wanted a sale or merger. They said everything
Speaker 1: was underperforming, so they embarked on a new turnaround strategy.
Speaker 1: This is pretty uh typical of what companies do in
Speaker 1: this situation, meaning they consolidate um their operations, they sell
Speaker 1: off weaker brands, they closed doors, there's some layoffs that
Speaker 1: that kind of thing. But from there you saw them
Speaker 1: really look to attract attention again, like they wanted to
Speaker 1: do something that would get people's eyes back on and Teva. Yeah,
Speaker 1: and it sounds like they've been really clever Kim in
Speaker 1: terms of tapping into the luxury world, whether it's bloom
Speaker 1: Ees or Sacks or Nordstrom right, who are carrying their brands.
Speaker 1: Valenciaga right, creating um a croc shoe with a heel
Speaker 1: like they really just I feel like, I guess what
Speaker 1: I'm curious about. Two is you spend some time there?
Speaker 1: Is it just like the team, there's all these just
Speaker 1: crazy examples out there, and it's like, go ahead, team,
Speaker 1: do whatever you want. Let's see what we can do.
Speaker 1: Walking through that design on floor, you see an entire
Speaker 1: like the full breadth of shoes. It's it's insane. Like
Speaker 1: you see the very extremely bland, regular like slip on
Speaker 1: shoes that look like Vans, right, and then you see
Speaker 1: a massive fuzzy boot in some like leopard print, and
Speaker 1: and it's it's all like in the same room. That's
Speaker 1: because they're given so much, Uh, the guardrails on their
Speaker 1: design process are have been taken down pretty far. Now
Speaker 1: when you come up with something uh that's too weird,
Speaker 1: you have to go through a few iterations to to
Speaker 1: bring that back down a little bit to put it
Speaker 1: into some kind of uh, you know, sellable shoe. But um,
Speaker 1: you know, because they're given that kind of leeway, you
Speaker 1: get to see some very new interesting things. All Right,
Speaker 1: we gotta run, Kim, thank you so much. That's Bloomberg
Speaker 1: News reporter kimbas Seen. His story featured in the latest
Speaker 1: issue of the magazine. It's on newsstands now and online
Speaker 1: at business week dot Com. Still to come sailing the
Speaker 1: high season style and the high price tag to match
Speaker 1: sometimes one million dollars. Well it's not enough. This is
Speaker 1: Bloomberg broadcasting from the financial capital of the world, Bloomberg
Speaker 1: Eleve in Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine and around the globe the Bloomberg Business app and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week. This
Speaker 1: could be called revenge spending on steroids, and that is
Speaker 1: the uber wealthy who are out there spending on super
Speaker 1: yachts or at least chartering them with more on an
Speaker 1: industry with a very select set of customers and price
Speaker 1: tags that will blow your mind. We turned to Jonathan Beckett.
Speaker 1: He also goes by Joff. He's the CEO of UK
Speaker 1: based Burgess Yachts and says that his team has seen
Speaker 1: an unexpected boom in business during the pandemic. As we
Speaker 1: went into COVID. I think everybody was battling down the
Speaker 1: hatches and you know, expecting the worst, planning for the worst,
Speaker 1: and hoping for the best. And you know, from September
Speaker 1: or October and all the way through we hit record
Speaker 1: highs and it was it's been the most extraordinary period
Speaker 1: of time for our industry. You know. I've talked to
Speaker 1: people in the in the boat world and they have
Speaker 1: said it has been off the charts boats of all
Speaker 1: sizes and prices of just people in the pandemic. And
Speaker 1: I think it's also the wealth creation, certainly in certain substrata,
Speaker 1: if you will, or strata of our of our society.
Speaker 1: Jeff tell us about who's been buying, uh, you know,
Speaker 1: across the world, you know, and what kind of yachts
Speaker 1: are we talking about. You know, it's really across the board,
Speaker 1: you know, from Australia and New Zealand, you know, through Russia, Asia, America, Europe.
Speaker 1: And I think, you know, this is the first time
Speaker 1: that many of our clients have actually felt vulnerability, you
Speaker 1: really experienced vulnerability before, you know. I think, you know
Speaker 1: a lot of our clients felt bulletproof and very secure
Speaker 1: with with their business and the environment and the economy
Speaker 1: and for the first time. You know, they were sort
Speaker 1: of almost helpless um and felt very vulnerable. And and
Speaker 1: as you say, there's been a lot of wealth creation,
Speaker 1: and so why put off for five years time or
Speaker 1: ten years time when you know when you could be
Speaker 1: doing it today and enjoying it with your family today.
Speaker 1: And I think that's had a big play in our market. Well,
Speaker 1: what the typical purchase? Is there a typical purchase you
Speaker 1: could kind of layout for us, you know, I mean,
Speaker 1: I mean, I think the marine industry across the board
Speaker 1: has done exception well in the last eighteen months. But
Speaker 1: you know, the typical purpose in our market is probably
Speaker 1: an average of around fifty million dollars. And you know
Speaker 1: that that market, you know, there's been a sort of
Speaker 1: feeding frenzy. And prices are not prices are sensible, They're not,
Speaker 1: They're not inflated, but you know they're good prices. There's
Speaker 1: no there are no cheap boats around. What does what
Speaker 1: does a million dollar yacht look like? What does it
Speaker 1: get you? What does a fifty million dollar yacht look like?
Speaker 1: It's probably you know, it's it's around sixty two hundred feet,
Speaker 1: will accommodate twelve to fourteen guests have a crew of
Speaker 1: six to eighteen and you know transatlantic range. It's you know,
Speaker 1: it's it's a world it's a world cruiser and full
Speaker 1: of luxury. But our market goes goes from ten million
Speaker 1: dollars up to you know, six hundred million dollars you know,
Speaker 1: the very heavy heights. It's it's an absolute extraordinary world. Yeah,
Speaker 1: and it's a lot of motor arts, but I know
Speaker 1: you have sailing, which is my my favorite always and
Speaker 1: it's fun to look at who's buying though, is it?
Speaker 1: You know we used to say on some of this
Speaker 1: stuff and some of this really high end luxury um products,
Speaker 1: if you will, that it was a lot of tech
Speaker 1: you know, entrepreneurs and so on and so forth. Who's
Speaker 1: doing the buying though? You know that our market is
Speaker 1: you know, the American market is very very important to us.
Speaker 1: It's probably thirty of the world market. Um. And there
Speaker 1: are certainly a lot of a number of tech you know,
Speaker 1: young tech entrepreneurs, but you know the market is very
Speaker 1: traditional and you know people in you know, in finance,
Speaker 1: in property, in you know, car dealerships, manufacturing, um. You
Speaker 1: know a lot of our clients are involved in businesses Um,
Speaker 1: that that produce a lot of units that everybody, everybody
Speaker 1: wants and you know it could be talking about cardboard
Speaker 1: boxes or shampoo or toothpaste or right, yeah, we all
Speaker 1: use a lot of that stuff and that produces makes
Speaker 1: a lot of people wealthy. You also do a lot
Speaker 1: of chartering. Tell us about that side of the business
Speaker 1: as well. Well. Charting was very difficult in obviously UM
Speaker 1: and a lot of chances were either canceled or or
Speaker 1: pushed into one was was almost our best year ever.
Speaker 1: It wasn't quite our best year ever, but t was
Speaker 1: our best year. That's Jeff Beckett, the CEO of Burgess Yachts,
Speaker 1: interesting that even when there's volatility in the market's right there,
Speaker 1: get maybe a little bit nervous about yeah, expenditures. Um,
Speaker 1: all right, you're listening to Bloomberg Business Week. Coming up,
Speaker 1: we go from super yachts to super homes. Our Bloomberg
Speaker 1: Pursuits team takes us inside the most exclusive living spaces
Speaker 1: from all corners of the u S. I think there's
Speaker 1: a property in Colorado. I'm like, it's got your name,
Speaker 1: all yeah, it's the one that one's pretty close to Aspen.
Speaker 1: Are you okay? With the price tag too. Yeah, I'll
Speaker 1: take it. There's also a nice one not just outside
Speaker 1: of San Francisco as well, that I got my eye on.
Speaker 1: I want the one to hit the Hamptons. Okay, well
Speaker 1: we'll share. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovich
Speaker 1: from Bloomberg Radio. More ultra luxury homes are selling across
Speaker 1: the US than ever before. We're talking about properties that
Speaker 1: starred in the range of well, you know the kind
Speaker 1: that we look at, Tim, fifty million or more. Perhaps
Speaker 1: I don't know about you, Carol, but the only place
Speaker 1: I'm looking at these homes is on the pages of
Speaker 1: Bloomberg business Week magazine. That's the week our Bloomberg for
Speaker 1: Suits team is taking us all over the country and
Speaker 1: sometimes inside these amazing abodes. I think it's fair to
Speaker 1: say you can call them compounds, Carol. So where are
Speaker 1: these houses local? Aiden, who lives there? And more importantly,
Speaker 1: are we invited? I guess we could go to the
Speaker 1: open houses. Yeah, you probably they probably actually probab wouldn't
Speaker 1: return such quick little Google search. You'll probably check your
Speaker 1: assets in your portfolio before you're let in. Hey, Bloomber,
Speaker 1: Pursuits editor Chris Rows and arts columnist James Tarmy are
Speaker 1: here with all the details. James wrote the cover piece
Speaker 1: of Pursuits this week, and James a heavy lift. Well,
Speaker 1: you know it's funny, James. Our last guest told us
Speaker 1: that super yachts are more in demand than ever. Evidently
Speaker 1: the same goes for super pricy homes. What's going on? Well,
Speaker 1: was the best year ever for homes price fifty million
Speaker 1: dollars and above in terms of their sales. Um. You know,
Speaker 1: these houses have always been around, but they haven't necessarily
Speaker 1: been flying off the shelf until very recently. But the
Speaker 1: rich are getting richer and they are eager to spend.
Speaker 1: And so we went around the country looking at different
Speaker 1: houses that really kind of crossed the fifty million dollars
Speaker 1: special to show you kind of what you can get
Speaker 1: and where. And one of the interesting things, um that
Speaker 1: James and I learned while we were looking at this.
Speaker 1: So James wrote a story that said, you know, okay
Speaker 1: that we've broken this record on fifty million dollar homes.
Speaker 1: I said, okay, we've got to see these houses. What
Speaker 1: are they like? And James made the observation that some
Speaker 1: of them are priced uh like unrealistically. I mean, it's
Speaker 1: over fifty million dollar, seems unrealistically, unrealistic to all of us.
Speaker 1: But some of them are like sort of on spec
Speaker 1: Some are just big pieces of property and they're a
Speaker 1: hundred fifty million dollars and it's just not real. That's
Speaker 1: going to come down a lot. So James is James.
Speaker 1: James task was to find places that are sort of
Speaker 1: like accurately price and probably will sell for about that range.
Speaker 1: And my favorite is the one that he sort of
Speaker 1: opens the story with, which is a sixty million dollar
Speaker 1: property in East Hampton, which is literally to die, James,
Speaker 1: It's sorry, so you don't need sixty right, let's let's go,
Speaker 1: let's go. But it's location, location, location, I feel like
Speaker 1: James for this one. Yeah, completely. And you know, if
Speaker 1: you actually look around at all of the properties, the
Speaker 1: majority of them are on the water or have just
Speaker 1: other unbelievable views. But but most of them happen to
Speaker 1: be on the water. The house that we open with
Speaker 1: is in East Hampton, on this tiny stretch of land
Speaker 1: between Georgia Pond and uh the Atlantic Ocean, and uh,
Speaker 1: it's yes, sixty million dollars is a lot of money,
Speaker 1: but there are actually comparable It's Calvin Klein, the designer
Speaker 1: sold two lots of few doors down for around eighty
Speaker 1: five million dollars last year. So again, just as Chris said,
Speaker 1: a lot of people, you know, I could price my
Speaker 1: apartment at a hundred million dollars, doesn't mean it we'll
Speaker 1: sell it a hundred million dollars. And a lot of
Speaker 1: people tend to slap super high prices as a form
Speaker 1: of price discovery, you know, what will someone pay for it?
Speaker 1: But the houses around the country that we found that
Speaker 1: are basically, uh reasonable if you can call a ninety
Speaker 1: million dollar house on left an acre and a man
Speaker 1: made island off of the Miami reasonable. Um, these are
Speaker 1: these are places that that have a very good chance
Speaker 1: of selling at or around um asked. And I have
Speaker 1: to say that it's sort of began to feel a
Speaker 1: little bit like fifty million dollars was a bargain. Was
Speaker 1: looking at the actual array of houses down come down here. Well, Carol,
Speaker 1: Carol was right in the beginning when when you talked
Speaker 1: about the one on this list that would be the
Speaker 1: one that I went for and it would of course
Speaker 1: be in Colorado where I could ski, I could mountain bike.
Speaker 1: This one just outside of Aspen, fifteen thousand square feet,
Speaker 1: it's near Independence Pass. Uh, just a fantastic area of
Speaker 1: the country. Fifty one million dollars. But James, it comes
Speaker 1: with um an oxygen system in the primary bedroom. So
Speaker 1: even if you're at you know, roughly you know, eight
Speaker 1: thousand feet or you can feel like you're at sea level. Yeah,
Speaker 1: that's exactly right. And um every single house comes with
Speaker 1: something special, you know, that's that's the real that's the
Speaker 1: real thing, and it comes with something that that really
Speaker 1: justifies it. There's another there's a townhouse, for instance, on
Speaker 1: the Upper east Side that comes with you know, there
Speaker 1: are a lot of fancy town Upper east Side townhouses,
Speaker 1: but there aren't a lot of town houses that have
Speaker 1: double height entrance ways and a wall full of windows
Speaker 1: and a spiral staircase that runs to the top of it.
Speaker 1: Also one of the through lines through a lot of
Speaker 1: these homes that there were multiple elevators. You know, the
Speaker 1: Colorado home that you referenced in aston that has two elevators. Um,
Speaker 1: I mean, it's it's it's kind of crazy. It's not
Speaker 1: exactly the five floor or the what is it like,
Speaker 1: the fifth floor walk up kind of thing. You know.
Speaker 1: There's also give a country estate in Virginia that actually
Speaker 1: has a brewery and a restaurant. Yes, so this place
Speaker 1: is massive. It's more than three thousand acres um and
Speaker 1: so the owner of it was able to turn it
Speaker 1: into a revenue producing sort of event venue without sacrificing
Speaker 1: the property of his own home because she had a
Speaker 1: few thousand acres to play around with. And so, yes,
Speaker 1: there's a brewery, Yes there's a restaurant. Yes there's a
Speaker 1: wedding venue. There's also a go kart track, a two
Speaker 1: lingo track so that you can raise your friends, and
Speaker 1: a one hundred and eighty foot long water slide. And
Speaker 1: the owner of the property explicitly built this as a
Speaker 1: place where he could hang out and have fun with
Speaker 1: his kids. And as I was going through it, I
Speaker 1: sort of reflected on my own childhood, which began to
Speaker 1: feel like a pretty raw deal in comparison. So sorry,
Speaker 1: that's just really blegal. No, no, no, no, no, um,
Speaker 1: it's a little row. All right, We're gonna transition to
Speaker 1: something el Um, We're getting a little more lighthearted. Chris
Speaker 1: writes about his six month haircut. I want to go
Speaker 1: right there because, first of all, I'm really ticked off
Speaker 1: that we don't have pictures of what Chris went through
Speaker 1: in the magazine. But what did you do? So? Um?
Speaker 1: You know, the pandemic is a time that a lot
Speaker 1: of people sort of thought, maybe I should change my hair.
Speaker 1: I don't know if you have any friends that dyed
Speaker 1: their hair blue or blonde right at the beginning of it,
Speaker 1: or just grew it to their shoulders. Um. I decided
Speaker 1: kind of late in the pandemic that, um, maybe I
Speaker 1: needed to change in my hair. And I've had the
Speaker 1: same haircut. I've had like almost like a sort of
Speaker 1: military style crew cut for more than twenty years, and
Speaker 1: it's because one of my early twenties I made some
Speaker 1: very bad hair mistakes and I had bleached blonde hair
Speaker 1: down to my eyes. I looked like Justin Bieber. I
Speaker 1: was always flicking it out of my face. And when
Speaker 1: I cut it, finally, friends, strangers, and enemies all universally
Speaker 1: said to me, oh my god, thank god you cut
Speaker 1: your hair. Because bouncer or somebody come up to yes,
Speaker 1: a bouncer at a Meatpacking District nightclub who had no
Speaker 1: idea k who I existed, was like, dude, thank god
Speaker 1: you cut that hair. So I said, the article is
Speaker 1: really a sing photos from that period? What is going on?
Speaker 1: Always use a picture of Brad Pitt. This needed to
Speaker 1: be a photo essay, not now it actually written one.
Speaker 1: There are photos online. UM. I will never show the
Speaker 1: photos from the Justin bieber Biver phase. But after that,
Speaker 1: I just like, you know what I love just going
Speaker 1: to a barber and telling them, okay, you know, a
Speaker 1: number two on the side, half inch off the top
Speaker 1: and we're done. You know, like a lot of guys
Speaker 1: just love a very simple, straightforward you're ordering a sandwich
Speaker 1: or something. And then I got my haircut by this
Speaker 1: celebrity hairstylist, Kristen Serafino, who's really awesome, and she had
Speaker 1: this pop up in the West Village and I went
Speaker 1: and she was like, let's try something different and let's
Speaker 1: go on a six month haircut journey. Will do three cuts,
Speaker 1: and you know, the first cut will be your old cut,
Speaker 1: the second will be like something we've done together, and
Speaker 1: the third will be something totally brand new. Um. And
Speaker 1: so I did it, and I grew my hair out
Speaker 1: to longer than it was when it was in my
Speaker 1: justin Bieber phase, and then we ended up cutting it
Speaker 1: back to where it is now, which is where I
Speaker 1: really like it. And the whole point was that, you know,
Speaker 1: men's hair changes as they get older. You know, if
Speaker 1: you lose density, it turns gray. Like you wouldn't wear
Speaker 1: the same shirt every day for your whole life. So
Speaker 1: Kristen says, you know, why don't you wouldn't You can't
Speaker 1: have your same haircut. You've gotta try, and you can't
Speaker 1: just try from one haircut to another. You've gotta give
Speaker 1: it some some runway. Um. And she showed me these
Speaker 1: pictures of Brad Pitt at one of the Ones upon
Speaker 1: a time in Hollywood premiers and she was like, this
Speaker 1: is what I think your hair could look like. And
Speaker 1: I said, Kristen, if I show people this picture and
Speaker 1: say that this is what I want to look like,
Speaker 1: they will think that I am insane. James city show
Speaker 1: you pictures and say that or no. Um. You know, honestly,
Speaker 1: I'm a little bit wounded that he didn't. We all are,
Speaker 1: We all are, and you know it. Um. You know,
Speaker 1: sometimes I hated it sometimes I really liked it. But
Speaker 1: I have always parted my hair on one side. I've
Speaker 1: always styled it in the same way, and I now
Speaker 1: part of it on a different side, which it doesn't
Speaker 1: sound crazy but actually really changes the way that your
Speaker 1: face looks. And I'm very happy with it, and I
Speaker 1: recommend everyone do it. Can I tell you when for
Speaker 1: those of us who do on air work like you
Speaker 1: change your part and you should see like the mail
Speaker 1: you get like it's so dramatic or managers coming out
Speaker 1: like what did you do? Yes? Yes, sometimes it's good,
Speaker 1: sometimes it's not. Um, it's a great story, a really
Speaker 1: fun read. Hey, we can't forget the Super Bowl just
Speaker 1: around the corner. Can we talk? Can we talk nachos? Please?
Speaker 1: I've been waiting to talk about this because I'm actually
Speaker 1: pretty hungry. This is what we were fighting over our
Speaker 1: food editor for Pursuits, Cake Creator Details and you Cook
Speaker 1: but cookbook and it's specifically about nachos in various forms
Speaker 1: of glory. Perfect timing of course for the big Game.
Speaker 1: Oh yes, so this chef Dan Whalen wrote a cookbook.
Speaker 1: It's called Nachos for Dinner. Surprising sheet Pan meals. The
Speaker 1: whole family will love, and there's an asterisk. Just because
Speaker 1: they can serve as a meal doesn't mean it's a
Speaker 1: healthy meale. It just could serve as that. They could
Speaker 1: be hard user and it's so good. There's street corn nachos,
Speaker 1: which are like a Lote style nachos. There's capraising nachos
Speaker 1: where it's you know, like little Mozerrol tim in a
Speaker 1: salad on nachos. And we even feature um some chicken
Speaker 1: and waffle nacho thos where the nacho is the waffle.
Speaker 1: Thanks to Bloomberg Pursuits editor Chris Rouser and arts columnist
Speaker 1: James Tarmy for joining us with a look at the
Speaker 1: latest and greatest in pursuits. And that wraps up the
Speaker 1: weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks
Speaker 1: so much for joining us. I'm Tim Stanivik and I'm
Speaker 1: Carol Master. Be sure to tune into Bloomberg Business Week
Speaker 1: Monday through Friday starting at two pm Wall Street time
Speaker 1: on Bloomberg Radio. Also check out our daily broadcast on YouTube.
Speaker 1: Just search Bloomberg Global News and check out our Bloomberg
Speaker 1: Business Week podcast. Find that at Bloomberg dot com, Apple
Speaker 1: or wherever you get your podcast, Bloomberg Business Week. It's
Speaker 1: available on newstands now, at Bloomberg dot com and on
Speaker 1: the Bloomberg terminal. Also check out Quick Take. It's available
Speaker 1: at Bloomberg dot com, slash Qt also streaming platforms like Roku,
Speaker 1: Apple TV, Samsung TV and more. Have a good weekend.
Speaker 1: Everybody buy an ugly shoe. All right, I'm just gonna
Speaker 1: say this is Bloomberg