Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all partnising the power of Business
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Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Let's get right to our guest,
Speaker 1: because there's lots of stuff going on, certainly watching the
Speaker 1: continued rollout of the vaccine and new development, certainly when
Speaker 1: it comes to the virus. Dr William Hasltin is back
Speaker 1: with us, chairman and President of Access Health International. It's
Speaker 1: a nonprofit thing tank on a mission to improve access
Speaker 1: to high quality and affordable health care for people everywhere.
Speaker 1: He has found in more than a dozen biotech companies,
Speaker 1: including Human Genome Sciences. His autobiography, released earlier this year,
Speaker 1: My Lifelong Fight against disease from Polio and aids to
Speaker 1: two COVID nineteen. And he's also got a book out.
Speaker 1: I don't know how he finds time to sleep called Variance,
Speaker 1: The Shape Shifting Challenge of COVID Natine. He's back with
Speaker 1: us on the phone in Connecticut, Doctor Hasseltine. Good to
Speaker 1: have you back. How are you, Carol. It's a pleasure
Speaker 1: to be here. Thank you for that very center this introduction.
Speaker 1: I just speak the truth. Um, tell me how you're doing,
Speaker 1: and tell me when it comes to COVID headlines, vaccine headlines,
Speaker 1: what is it that you are constantly kind of looking
Speaker 1: out for. What's kind of front and center when it
Speaker 1: comes to the information that continues to flow out on
Speaker 1: both the virus and the vaccine. Well, first thing to
Speaker 1: say is, we're very fortunate to have great vaccines that
Speaker 1: are working really effectively and very safely, especially the m
Speaker 1: R and A vaccines. They're protecting people really well. Uh,
Speaker 1: they are as safe as of any vaccine I've ever seen,
Speaker 1: and we're very fortunate. The biggest question for those is
Speaker 1: how long will they be protecting us, and how well
Speaker 1: will they protect us against the variants? And for how long?
Speaker 1: Today this morning, we got the first shoe that dropped,
Speaker 1: and that is that one of the best of all
Speaker 1: the vaccines, the moderna vaccine doesn't protect against two of
Speaker 1: the common variants after about six months very well, at
Speaker 1: least as judged by the ability of the antibodies in
Speaker 1: people who were vaccinated to neutralize the virus as different
Speaker 1: from a real vaccine. Test is showing that it's failing
Speaker 1: to protect people in real life, but it's a pretty
Speaker 1: good indication that it's not going to protect people for
Speaker 1: very much longer, so that the net result is also
Speaker 1: quite positive. And the very same report it said, if
Speaker 1: you get a booster at six months, you're golden again.
Speaker 1: You're maybe better off than you were before. And so
Speaker 1: it's uh good news, bad news story. Bad news doesn't
Speaker 1: last that long against the variant. It news, there's something
Speaker 1: to think. So what I've done is I put in
Speaker 1: my calendar six months from when I got my last shot,
Speaker 1: I'm going to get another. So, I mean, do you
Speaker 1: think we'll start to see a recommendation from the CDC
Speaker 1: soon for that for that booster shot. CDC has been
Speaker 1: a little slow in this pandemic, but I think they'll
Speaker 1: come to that position. And you know, the first person
Speaker 1: to mention that was a head of fiser. You may
Speaker 1: remember that just a few weeks ago Albert Boule is
Speaker 1: saying that of the fightser shot, so he knew something
Speaker 1: that we did it. But now we do from the
Speaker 1: moderna publication, which is six eight months out, fewer than
Speaker 1: half the people are protected against the Brazilian and the
Speaker 1: South African variant according to these studies of antibody neutralization.
Speaker 1: So if we don't pursue a course of booster shots
Speaker 1: for everyone, mark your calendar's kind of thing right now,
Speaker 1: could we potentially see another outbreak? Absolutely, because most of
Speaker 1: the viruses that are infecting people in the United States
Speaker 1: and I should say around the world today are variants.
Speaker 1: They're not the original UH strain, and the reason for
Speaker 1: that is the variants are more infectious and they displace one.
Speaker 1: We're now in the fourth wave of increasingly transmissible variants.
Speaker 1: First wave was what came out of China a year
Speaker 1: ago February. It changed and swept the world. Then late
Speaker 1: summer early fall, a whole bunch of new variants came
Speaker 1: and they displaced whatever else was there. And right now
Speaker 1: the Indian strains seems to be displacing even the British
Speaker 1: strain in Britain. So this is a natural course that
Speaker 1: we're seeing faster than we expected. Um and it does
Speaker 1: mean that I believe we will be seeing recommendations for
Speaker 1: six months boosters pretty soon. So does that mean Dr Hazeltine,
Speaker 1: that it's every six months or is there a chance
Speaker 1: that modern advice are able to change the formulation somewhat
Speaker 1: slightly and actually give a shot that has longer lasting
Speaker 1: antibodies until we get new types of vaccines, and I'm
Speaker 1: not sure how we're going to do that. There's some
Speaker 1: ideas on the drawing board, but until we figure out
Speaker 1: how to make vaccines that are going to last longer,
Speaker 1: it's probably going to be a minimum of every year
Speaker 1: and possibly more often. We're to the point now, though
Speaker 1: we're not right. And we're to the point now though
Speaker 1: where where some of the healthcare professionals who got the
Speaker 1: shot in December would be approaching that six month mark.
Speaker 1: We only have about twenty seconds left, Doctor Hezeltine. Well,
Speaker 1: you're correct, I were approaching the time when it's about
Speaker 1: time to get and I should say, if you haven't
Speaker 1: caught those two vaccines, the other ones you may need
Speaker 1: a little more often. So I think it's time to
Speaker 1: consider booster shots for the earliest people who are vaccinated.
Speaker 1: So let's talk about You wrote a story, um and
Speaker 1: uh and it talks about this anti viral drug cocktail.
Speaker 1: So tell us about what this is about what this
Speaker 1: might do, especially for a place like India, which is
Speaker 1: really having a difficult time right now with COVID nineteen. Well,
Speaker 1: there are two ways to prevent infections on our vaccines,
Speaker 1: which are by far the most convenient. You get one
Speaker 1: shot and and or two shots and you may have
Speaker 1: many months to many years of protection. Or if you're exposed,
Speaker 1: to take a drug cocktail that will prevent you from
Speaker 1: getting infected uh for a week or two. Um. Let
Speaker 1: me give you an example of something that happened last year.
Speaker 1: There's a new drug called Zofluza that was developed by
Speaker 1: a Japanese company now sold I believe in America by
Speaker 1: genn Tech. Uh. And if you are exposed to flu,
Speaker 1: your kid comes home from school with the flu. Uh,
Speaker 1: you take that one pill and you're you have about
Speaker 1: eight chance you reduce your chance of being infected by
Speaker 1: that's what we're talking about. Drugs. You can take when
Speaker 1: exposed or when you think you may be exposed to
Speaker 1: prevent you from getting infection. Now it turns out that
Speaker 1: the slow poke in treatment of and prevention of infection
Speaker 1: has been drugs. But they're rapidly catching up. And just
Speaker 1: a week ago there was some very very interesting news
Speaker 1: that many of the drugs that are useful for treating
Speaker 1: hepatitis C. There are seven different drugs used in two
Speaker 1: drug combinations work in a very unexpected way against the
Speaker 1: protein of the covid virus called n SP three, and
Speaker 1: to everyone's surprise, it's powerfully synergistic with another drug called
Speaker 1: ramdesivier and one and one in this case makes ten,
Speaker 1: not too and so it's giving us the idea that
Speaker 1: there should be a lot of combinations of drugs which
Speaker 1: together can be what's called synergistic the one and want
Speaker 1: let equals sent. The great thing about that discovery is
Speaker 1: India is the powerhouse from manufacturing small drugs and can
Speaker 1: produce these drugs, which in the United States cost about
Speaker 1: eighty dollars for three months treatment cost maybe thirty five dollars.
Speaker 1: In fact, new costs thirty five for a three months treatment.
Speaker 1: So if you only need them for a few days.
Speaker 1: That you're only talking about a couple of bucks for treatment,
Speaker 1: So how would this for that couple of other dogs?
Speaker 1: And you're in good shape to help stop this epidemic,
Speaker 1: not only by getting vaccines which are in short supply,
Speaker 1: but by using combinations of drugs. Well, So how would
Speaker 1: this How would this work in a place like India
Speaker 1: right now? How would they how would they distribute this quickly?
Speaker 1: And how would they know who to distribute it? Tours
Speaker 1: it's safe to assume that the infection right there is
Speaker 1: so high that you can assume you've been exposed. That's
Speaker 1: probably a pretty good assumption. I don't think there's enough
Speaker 1: drug right now. For of all, we don't really know
Speaker 1: what the right these are pills. This isn't a shot.
Speaker 1: Ram decipere now has to be infused and the drug
Speaker 1: that we now know it works best with these hepatitis
Speaker 1: C drugs their pills, but it works best with ram desipere.
Speaker 1: And they're probably other drugs that are being developed. MOLL
Speaker 1: no peer of heer by Merk and other companies, proteation
Speaker 1: inhibitors by Fiser and other companies. Uh, it'll take a while.
Speaker 1: But if I were India, I would do a massive
Speaker 1: warp speed trial to see what's working. With so many
Speaker 1: people infected, you could get that answer in a month
Speaker 1: or two. So essentially, rather than rather than, rather than
Speaker 1: somebody getting the vaccine, they're given this cocktail tail what
Speaker 1: at first signs of it or just in general no, no,
Speaker 1: or you're even just exposed. You're exposed. Okay, it's like
Speaker 1: with with with no losing. You don't have to be infected.
Speaker 1: You don't want to be infected. So if somebody comes
Speaker 1: into your household or you're at a workplace or the
Speaker 1: school where people are getting the fluid, you pop this
Speaker 1: pill and your chances about decreased that you're going to
Speaker 1: get it. That's fantastic, and I think it's a whole
Speaker 1: different approach that people. We're going to have a farm,
Speaker 1: a big pharma copea of anti sarroscopy drugs in about
Speaker 1: six months to a year, and I think that will
Speaker 1: be a good supplement. The great thing about those drugs
Speaker 1: also is resistance to vaccines. Resistance to immunity is parallel
Speaker 1: and like a different world from drug resistance. So you
Speaker 1: get that maybe the best of both worlds. Vaccines plus
Speaker 1: these drugs to protect yourself against all of these very
Speaker 1: I think a lot of good news is coming down
Speaker 1: the Hey just quickly, just twenty seconds tho, Dr has
Speaker 1: I mean to be clear that you take this pill
Speaker 1: and you're good for a couple of weeks or is
Speaker 1: it longer than that? Probably not longer. At this point,
Speaker 1: it's taken us thirty years to get shots which might
Speaker 1: protect us for eight to nine months from HIV. You've
Speaker 1: got to really be careful with long term effects for
Speaker 1: long acting drugs or people who are entirely healthy. But
Speaker 1: we can get there. We can get to a shot
Speaker 1: that will last probably a year or more, but it'll
Speaker 1: take us some time, but we can get there with
Speaker 1: their drugs too. All right. Yeah, we've said we've got
Speaker 1: to about have a bunch of tools to do this. Um.
Speaker 1: Dr Heseltine, thank you so much. Always appreciate checking in
Speaker 1: with you. Dr William Hazeltine, Scherman and President of Access
Speaker 1: Healthy International. What are you thinking? I'm thinking how long
Speaker 1: are we going to be in this situation? Right? Yeah?
Speaker 1: It's what it feels like. It feels like, I mean,
Speaker 1: my my thoughts on involved a lot, but it's interesting,
Speaker 1: like He's saying that, you know, you have multiple tools
Speaker 1: because there are probably ultimately people who will not get vaccine.
Speaker 1: So how do you treat somebody who all of a
Speaker 1: sudden says they're exposed, so you want to prevent them
Speaker 1: from getting it, so they get maybe a cocktail. Yeah,
Speaker 1: it's a great point. You're listening to Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. So there's a story in the upcoming issue
Speaker 1: of the magazines out later on this week on newsstands, online,
Speaker 1: on on Bloomberg about how the company that's become the
Speaker 1: leader in the most advanced types of semiconductors on the
Speaker 1: market today is TIMS stuck in the middle of a
Speaker 1: global panic over chip supply company t s MC. Joel
Speaker 1: Weber is editor at Bloomberg Business Week. He joins us
Speaker 1: now on the remote from Brooklyn, and Joshua Breustein, technology
Speaker 1: writer at Bloomberg Business Week, joins us on the phone
Speaker 1: from New York City. Joel, I was I was pretty
Speaker 1: shocked to read how much Samsung and t SMC Intel
Speaker 1: are spending divine designing the next generation chip business given
Speaker 1: that here we are now in this global supply crunch,
Speaker 1: well billions, and the number even like the number that
Speaker 1: we've seen from from Intel, the twenty billion that they
Speaker 1: want to throw at the Arizona project seems paltry when
Speaker 1: you get the big numbers that the t s MC
Speaker 1: is the world throw around, and you know t s
Speaker 1: MC is is I think pre chip short edge. There
Speaker 1: are probably a lot of people who had no who
Speaker 1: that company was. You know, if you're if you're in
Speaker 1: the in the tech business, Uh, t s MC has
Speaker 1: quietly become just a juggernaut over the past couple of decades,
Speaker 1: and so I think a lot of people suddenly woke
Speaker 1: up to the realization that this is a huge powerhouse
Speaker 1: company UM in the midst of the chip shortage. And
Speaker 1: what the story that Jock edited in in this UM
Speaker 1: this week's issue is about is effectively t SMC sort
Speaker 1: of finds itself in the middle of now a game
Speaker 1: of geopolitics that looks really complicated. So so, Josh, what
Speaker 1: did uh what did our reporters discover as they dug
Speaker 1: into this story. Yeah, so the t SMC story is
Speaker 1: is interesting. This is a company, as Joel said that
Speaker 1: was really unknown UM outside of tech circles until very recently,
Speaker 1: and it pioneered a process for making chips where it
Speaker 1: would allow its customers to design the chips and then
Speaker 1: it would manufacture them. This is different from companies like Intel,
Speaker 1: who were handling UM the entire thing, and this really
Speaker 1: was a revolution in the chip industry. UM t smcs
Speaker 1: real big break came when it began manufacturing chips that
Speaker 1: Apple was designing for its iPhones, and that allowed t
Speaker 1: SNC to really learn how to make the most sophisticated
Speaker 1: chips on the market, and that's been a great business
Speaker 1: for it. It is UM an enormous company. It's very
Speaker 1: important throughout the global tech industry, and now with the
Speaker 1: chip shortage, you're seeing officials really across the globe worrying
Speaker 1: about UM, their supply chains, and in a lot of
Speaker 1: cases wanting chips to be manufactured closer to home. The
Speaker 1: thing with for t SMC is that almost all of
Speaker 1: its highest level chips are made in Taiwan UM, and
Speaker 1: so it's going to be facing increasing pressure from places
Speaker 1: like the United States and from Europe to UH to
Speaker 1: evolve into something that it never has been. Right and
Speaker 1: closely tied as you, as you just said, to Taiwan,
Speaker 1: which kind of puts it also in China's grasp and
Speaker 1: I do wonder how that also kind of complicates things. Joshua. Yeah,
Speaker 1: I think when when you're talking about Taiwan and UM
Speaker 1: and the West looking at Taiwan, I think there's a
Speaker 1: bit of nervousness that it is very close physically to China,
Speaker 1: UM that you might be a little bit nervous about
Speaker 1: your long term prospects of relying on something of strategic
Speaker 1: importance that happens really in China's backyard. UM and t SNC.
Speaker 1: You know, it has uh its own interesting relationship with China.
Speaker 1: It's also not making it's most sophisticated chips in China
Speaker 1: UM and China wants to have its own chip industry
Speaker 1: as well. So I'm wondering where this leaves the companies
Speaker 1: that it that it supplies chips to. Well, I think
Speaker 1: that the companies who rely on t SMC for chip
Speaker 1: manufacturing are probably doably pretty happy with the way that
Speaker 1: this works. They get to design the chips, they don't
Speaker 1: have to build these multibillion dollar factories where they're made.
Speaker 1: UM and you know, I think that there's UH interest
Speaker 1: in having t SMC. You continue to do that, but
Speaker 1: maybe in a way that will make companies and policymakers
Speaker 1: outside of UM Taiwan or not that close to Taiwan
Speaker 1: just a little bit more comfortable UM with the prospect
Speaker 1: of supply shocks. Yeah, I mean, I think one of
Speaker 1: the things that is interesting about this is that you
Speaker 1: have a ton of different UH countries all wanting to
Speaker 1: throw their weight around, whether it's the US or China
Speaker 1: or Japan, and ultimately you have UM Taiwan here, which
Speaker 1: is basically I mean this is like one of basically
Speaker 1: the biggest company that Taiwan has UM and so Josh Like,
Speaker 1: one of the things that stuck out to me as
Speaker 1: I was, you know, thinking about the capital expend manatures
Speaker 1: and UM everything else that you know, the competitors that
Speaker 1: would want to try and steal back some market share
Speaker 1: from t SMC arresting with here is like ultimately t
Speaker 1: SMC is the one with the leverage, right like you.
Speaker 1: You can't just like spool up one of these factories
Speaker 1: and do it overnight like you. You have to be
Speaker 1: thinking decades out here. So to some extent like that
Speaker 1: they have the cards right. Absolutely, t SMC has a
Speaker 1: big head start on most of its competitors when it
Speaker 1: comes to making the most sophisticated chips, and that's going
Speaker 1: to give it a lot of leverage. Um. But as
Speaker 1: you also see add um, national governments want to throw
Speaker 1: around money as well, Like that is a potential opportunity
Speaker 1: for t SMC. It's also a potential opportunity for some
Speaker 1: of its competitors to close the gap. But closing that
Speaker 1: gap is not going to be easy or even a
Speaker 1: foregone conclusion that it will happen. Okay, I got one
Speaker 1: more for you, Josh, which is I thought that the
Speaker 1: lead of this story was super interesting. Like to give
Speaker 1: you a sense of how long TIS and C has
Speaker 1: been around, can you rewind the clock and tell us
Speaker 1: what we found out? Yeah, So the lead of the
Speaker 1: story UM starts with Morris Chang, who is t s
Speaker 1: MC's founder, UM, who was born in China, UM, but
Speaker 1: actually spent the early part of his career in the
Speaker 1: United States, and he recently was reminiscing about a industry
Speaker 1: conference he went to in nineteen UM with the with
Speaker 1: the founders of Intel's who were not yet the founders
Speaker 1: of Intel because the company had not yet been founded,
Speaker 1: but he remembers going to this conference, UM, going out
Speaker 1: and having beers with them and as he put it,
Speaker 1: singing arm in arm all the way back to our hotel. Um.
Speaker 1: So these guys have known each other for a long time. UM,
Speaker 1: and you know that the basic, uh, the basic foundation
Speaker 1: of the chip industry has been around for quite some time,
Speaker 1: and they felt favored by the gods, and as Debbie
Speaker 1: points out in the piece, until passed up a chance
Speaker 1: to actually invest in the nineteen eighties in t SMC.
Speaker 1: It's just fascinating, and I feel like we're not quite
Speaker 1: sure how the chips may fall or going forward. Um.
Speaker 1: Great great reporting, Debbie Wu. Of course, the reporter who
Speaker 1: did this story for Bloomberg Business Week, Josha Breustin, now
Speaker 1: Tech editor at Business Week, giving us the details along
Speaker 1: with Jill Webber, editor of Bloomberg business Week, and in
Speaker 1: this week's Business Week Small Business Survival guid cash is
Speaker 1: king once again at Small Business. Who'd have thought, right,
Speaker 1: because it's like Tim bin all In when it comes
Speaker 1: to digital Yeah, especially at the beginning of the pandemic
Speaker 1: when nobody would touch cash. Rob Mandelbama is freelance contributor
Speaker 1: at Bloomberg Business Week and joins us on the phone
Speaker 1: from Brooklyn. Rob, this is something I run into because
Speaker 1: I do drive. So I go and I fill up
Speaker 1: my car in Brooklyn, and it's always like ten or
Speaker 1: twelve or fifteen cents cheaper per gallon. So I, here's
Speaker 1: something about me. I fill up with cash all the
Speaker 1: time because I don't want to pay that extra fee.
Speaker 1: But as you report in Bloomberg Business this week, this
Speaker 1: is starting to spread to other types of stores as
Speaker 1: customer as businesses tire of those swipe fees, which add
Speaker 1: up to a lot of money. They certainly do. UM
Speaker 1: businesses have complained about swipe fees for decades, and you know,
Speaker 1: credit cards, as you mentioned, are just becoming more and
Speaker 1: more the currency of the moment. I talked to one restaurant,
Speaker 1: you know, percent of its sales were credit card sales.
Speaker 1: So those swipe fees really add up for for places
Speaker 1: like that. Ye, swipe fees for credit card transactions the
Speaker 1: report amount it to nine billion dollars in the US
Speaker 1: or at two of credit card sales. So so how
Speaker 1: is this playing out at mom and pop stores throughout Brooklyn?
Speaker 1: UM well throughout Brooklyn and throughout the rest of the country. Um,
Speaker 1: there are payment processors. These are the people who sort
Speaker 1: of connect the merchant to the banks that sort of
Speaker 1: handle credit card transactions. Payment processors are approaching merchants sometimes
Speaker 1: and saying, we have a way to lower your fees
Speaker 1: to zero um, and we do that by making the
Speaker 1: customer pay them. That can be very difficult though, if
Speaker 1: you're a business and you're you're you don't necessarily want
Speaker 1: to be the one who's necessarily charging more for something
Speaker 1: because you want to provide the customer the cheapest price.
Speaker 1: It depends, right, you know, if you're a restaurant that
Speaker 1: it provides a particular you know, a particular experience or
Speaker 1: a particular kind of food. You know, people who go
Speaker 1: to restaurants because they like the food, uh might be
Speaker 1: willing to go to to pay that extra four percent. Um.
Speaker 1: You know, if you're the only fish merchant you know
Speaker 1: in walking distance, people might uh suck it up and
Speaker 1: pay credit cards. Most people do, in fact, uh just
Speaker 1: absorb the fee. So how important, first of all, is
Speaker 1: small business to all of these credit cards? Oh? Uh,
Speaker 1: not very important, Carol. Uh Yeah, I mean, I mean
Speaker 1: they would they would disagree of course. Uh, don't forget
Speaker 1: shops small on Saturday. But um, but you know, I
Speaker 1: mean the vast majority of credit card transactions take place
Speaker 1: at giant retailers, you know, at at the costcoes, the
Speaker 1: wal Marts, the Sephoras, you know, the target no love
Speaker 1: lost between credit cards and small business was interesting to it.
Speaker 1: I didn't know. And in your story you talk about,
Speaker 1: you know, we get those cards that give us rewards
Speaker 1: and cash back and travel points, and merchants are the
Speaker 1: ones that ultimately are paying for those benefits for consumers.
Speaker 1: That's right, that's right. And they're much more expensive for
Speaker 1: merchants and other cards. You know, it could be the
Speaker 1: difference between paying a two percent transaction fee and paying
Speaker 1: a four percent transaction fee or four and a half
Speaker 1: or five. So I do customers seem okay with the
Speaker 1: way this is going? According to the merchants, the credit
Speaker 1: card companies will tell you something different. According to the merchants,
Speaker 1: tim Um, yes, Uh, customers understand and they understand that
Speaker 1: they're paying for the convenience paying for credit cards. A
Speaker 1: couple of the merchants told me that they had took
Speaker 1: criticism from customers at the very beginning, but they quickly
Speaker 1: sort of came around. So I wonder if this leads
Speaker 1: to some sort of resurgence in cash. I mean, I
Speaker 1: gotta tell you, it actually has for me. Now that
Speaker 1: I'm driving and I'm filling up my car like I'm
Speaker 1: I'm making sure that when I go to the gas station,
Speaker 1: I actually have cash. Um. But for so long the
Speaker 1: story has been that, you know, with the rise of
Speaker 1: fintech companies and Dunmill and credit cards becoming ubiquitous with square,
Speaker 1: cash was gonna die. Um, the restaurants and stores, because
Speaker 1: there were both restaurants and stores that I talked to,
Speaker 1: did not see an appreciable uptick in cash transactions. They
Speaker 1: saw some saw some uptick and cash transactions, but by
Speaker 1: and large, um, you know, credit cards held their ground
Speaker 1: even even with the feed. So I think what it
Speaker 1: sounds like is I'm cheaper than everybody else. I'm sorry again,
Speaker 1: I'm cheaper than everybody else. Like I will, I don't
Speaker 1: want to pay for the convenience. I want to get
Speaker 1: the cheapest price. Well, you're not cheaper than me. Okay,
Speaker 1: Because finally, a man after my own heart, I appreciate it.
Speaker 1: But I think about it too when it comes to
Speaker 1: tipping and things like that, right, because percentages are taken out,
Speaker 1: So like I do try to have a little bit
Speaker 1: of cash, um one point, right because because an individual
Speaker 1: or server gets less because the credit cards take their
Speaker 1: fees correct. Right. Uh, you know, to be honest, I
Speaker 1: don't know if restaurants uh take it out to take
Speaker 1: that out, but it wouldn't surprise me if they did. Sure. Yeah, anyway,
Speaker 1: it's interesting and listen, we're still finding our way through
Speaker 1: when it comes to the impact of the pandemic. What's lasting.
Speaker 1: All I know is I have gone digital big time
Speaker 1: when it comes to payment with everything, especially with the
Speaker 1: tap tap tap to pay credit cards with owns. There
Speaker 1: was even someone my daughter will telling me a story
Speaker 1: about someone who is asking for money in the streets
Speaker 1: and they're like somebody said, well I don't have any cash,
Speaker 1: and they're like, well, I've got Venomo. Yeah it makes sense.
Speaker 1: It's all you needs a smartphone in a bank account. Exactly. Um.
Speaker 1: Interesting story, Rob, Thank you so much, really appreciate it.
Speaker 1: Rob Mandelbaum, he is Bloomberg Business Week contributor on the
Speaker 1: phone in New Jersey. Check out that story. Uh, in
Speaker 1: the magazine and all of the coverage when it comes
Speaker 1: to small business and the survival guide. You can find
Speaker 1: more at Bloomberg dot com. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic
Speaker 1: on Bloomberg Radio. So, Tim, this was the story I
Speaker 1: think you covered on Cricktake today as well, about how
Speaker 1: Uber and Lift are losing their race when it comes
Speaker 1: to the electric future. Yeah, is that Chatman is Bloomberg
Speaker 1: News technology reporter. She joins us on the phone from
Speaker 1: San Francisco. She and our colleague Ben Elgin have this
Speaker 1: deep dive into Uber and Lift what they're doing or
Speaker 1: what they're not doing, I should say, in order to
Speaker 1: help their drivers here in the US actually get towards
Speaker 1: that sustainable future. Liz, thanks for joining us on this,
Speaker 1: first of all layout Uber and Lifts climate goals and
Speaker 1: what they're actually trying to achieve this decade. Sure thing
Speaker 1: so um earlier this summer, after years and years of
Speaker 1: pressure from different environmental groups and just increasing academic research
Speaker 1: showing their impact on the climate with their with this,
Speaker 1: do you know what was supposed to be the future
Speaker 1: of transportation? Uber or first Lift and then Uber both
Speaker 1: committed to being a electric on the platform in the
Speaker 1: United States by so that was the pledge they made.
Speaker 1: So then and I decided to dig in and take
Speaker 1: a look and see how those efforts were going. So
Speaker 1: how are they going? Not so great? Um, you know.
Speaker 1: There it is a long process, and it involves a
Speaker 1: lot of different shareholders, obviously policy makers, auto manufacturers, and
Speaker 1: of course the infrastructure with you know, to support the
Speaker 1: charging stations so that these drivers can um, you know,
Speaker 1: continue to do their job and not waste you know,
Speaker 1: time that they would take to charge. But the net
Speaker 1: net of this is that they've made this pledge UM
Speaker 1: to be electric. And right now the percentage is point
Speaker 1: five percent of ride hailing companies are now electric vehicles
Speaker 1: here in the United States, and um, that's less than
Speaker 1: the point seven overall in the United States passeter cars.
Speaker 1: So basically we're gonna have to see adoption outpaced the
Speaker 1: general population by about ten x in order for them
Speaker 1: to hit these goals. And it's pretty expensive to to
Speaker 1: still purchase these vias. Um, you know, there's still thousands
Speaker 1: of dollars more even after lower you know, plummeting battery
Speaker 1: costs and government rebase and all this. So you know, um,
Speaker 1: uber has set up some programs to try to help
Speaker 1: drivers by offering incentive. LIFT is offering no financial incentives. UM.
Speaker 1: But you know, in this article we take a look
Speaker 1: at different ways that they're approaching it, and you know,
Speaker 1: our concludean was that the efforts so far have been tentative, incomplete,
Speaker 1: and sloppily executed. Well, let's let's take us take us
Speaker 1: through some numbers. Here. Is that because your your story
Speaker 1: opens with an anecdote about somebody named Kurt Kinder and
Speaker 1: his Chevy Bolt. Um, he only spends about five dollars
Speaker 1: per day on electricity to to charge his car. As
Speaker 1: you point out, the thirteen dollar difference amounts over difference
Speaker 1: amounts over three thousand dollars per year, and that is
Speaker 1: money that he gets to keep. So there's five dollars
Speaker 1: of the navy versus eighteen is gas exactly what he
Speaker 1: would charge for gas. And plus it didn't even take
Speaker 1: into account the maintenance costs that are associated with internal
Speaker 1: combustion vehicles, which are more in some cases than e vs.
Speaker 1: So so what what is the economic is? Is it
Speaker 1: just the initial outlay that's so expensive. Yeah, that's it him.
Speaker 1: It's just still thousands of dollars more to purchase these
Speaker 1: evs than it is for a gas car. And so
Speaker 1: a lot of these drivers, you know there if it
Speaker 1: is a part time job, or they're only doing it
Speaker 1: a couple of hours a week just to and from
Speaker 1: you know, their UM, you know, their their jobs, or
Speaker 1: at a side hustle or something like that. UM, sometimes
Speaker 1: they can afford it. We talked to a number of
Speaker 1: Tesla drivers. I talked to a gentleman here and in
Speaker 1: Oakland who had a Tesla and was driving UM for
Speaker 1: for uber UM. But he got frustrated after a while
Speaker 1: because he wasn't getting any of the bonuses that he
Speaker 1: had been promised, and that Uber had said that, you know,
Speaker 1: they would give one dollar bonuses for every single electric
Speaker 1: vehicle trip that one of their drivers made. This is
Speaker 1: us sensibly to help them make the transition, to encourage
Speaker 1: them to do it UM. But the upshot was that
Speaker 1: when we started, you know, doing some reporting and talking
Speaker 1: to electric vehicle drivers, UM, you know, a large number
Speaker 1: of the ones that we spoke to had never gotten
Speaker 1: these bonuses. So we gave that note, gave that list
Speaker 1: to Uber, and they checked into it and found that
Speaker 1: a technical glitch had occurred. Uh, they apologized and immediately
Speaker 1: made the payment and the re proactively is what was
Speaker 1: a ten percent bonus. And then you know, we kept
Speaker 1: reporting and then we found a you know, some of
Speaker 1: these drivers aren't still aren't getting the bonus. They got
Speaker 1: the first bonus but not the second one, and so
Speaker 1: we called them again and and you know, and then
Speaker 1: they made it, made it good with them there. So
Speaker 1: it's it's been tricky, and there has been a pattern
Speaker 1: of that also in UM with a Sacramento pilot program
Speaker 1: plan that they had where drivers didn't you know, had
Speaker 1: a hard time signing up and then oftentimes never collected
Speaker 1: these bonuses which try not tign back eighteen was fuit dollars.
Speaker 1: And then also in London as well, they just recently
Speaker 1: cut how much they were giving writers drivers there under
Speaker 1: this clean air plan. Hey lost only go about thirty
Speaker 1: seconds left here though. Ultimately though Uber and Left have
Speaker 1: to figure out a way to get more a Vy
Speaker 1: vehicles in their fleet because of carbon emissions and controls
Speaker 1: and concerns and more regulation and just real quickly, Yeah,
Speaker 1: there is definitely pressure, but it's state by state here,
Speaker 1: you know, California has its clean mile standard that's coming
Speaker 1: into effect. Um. You know to to push some do that, um.
Speaker 1: But you know it's so far this is this is voluntary,
Speaker 1: so and it's gonna take. It's gonna take more like
Speaker 1: in China real quickly and running out of time. But
Speaker 1: in China d D there at but they also have
Speaker 1: the support of the Chinese Government of automakers and the like.
Speaker 1: And OLAH is nowhere near its goal. Cabify um as
Speaker 1: well and grabs in in Salfys that doesn't have any goal.
Speaker 1: All right, good steps. Everything Lizette does has so much information.
Speaker 1: Go to Bloomberg dot com and read this story because
Speaker 1: it's so good. Lizette Chapman, of course tech reporter here
Speaker 1: at Bloomberg Journal. Now, but you let me drive, Oh no,
Speaker 1: no, no no, no please, I'll do the ex me. I
Speaker 1: want to drive, Just drive by the question trying here
Speaker 1: is the drive to the globe. Thanks, we'll dry us
Speaker 1: on Bloomberg Radio. All right, So, just about ten and
Speaker 1: a half minutes left in today's trading session. We've been
Speaker 1: bouncing around, no doubt about it. Today definitely off our
Speaker 1: loads of the session, particularly with the NASDAC which Tim,
Speaker 1: as you mentioned, actually squeezing out a little bit of
Speaker 1: a gain, was in the green just for a moment
Speaker 1: now just down about one tenth of one percent, but
Speaker 1: nonetheless of all to day, and who knows exactly why,
Speaker 1: because there's been a lot of reasons thrown out there.
Speaker 1: It's been a wild day. I was down more than
Speaker 1: two Yeah, pretty significant. All right, let's see what our
Speaker 1: next guest has to say. Barry James is back with us.
Speaker 1: He's president, CEO and portfolio manager at James Investment Research.
Speaker 1: On the phone from Alpha, Ohio. Barry, nice to have
Speaker 1: you back here on Bloomberg. So how do you explain
Speaker 1: the day. I've seen inflation concerns initially for the sell off,
Speaker 1: I've seen profit taking, which is something that we've feel
Speaker 1: like it's often a throwaway explanation. How do you see it? Well,
Speaker 1: that's a great question, Carol, and uh, you know, the
Speaker 1: answer is always that the sellers are more anxious than
Speaker 1: the buyer. But as we if we look at last week,
Speaker 1: you know, the oil, the energy sector was up almost
Speaker 1: nine percent, so that we would see some some bit
Speaker 1: of a pullback, especially with all the you know, the
Speaker 1: hullabaloo about you know, long lines and things of that
Speaker 1: nature and the disruption within that that whole sector. So
Speaker 1: I think that's probably you know what is is sparking this.
Speaker 1: But underneath it, there are you know, some warning signs
Speaker 1: that we've seen. Not that I think these are long term,
Speaker 1: but the warning signs are number one, the insiders are
Speaker 1: selling and the companies themselves are selling the answer shares actively.
Speaker 1: So those are two two groups that tend to be
Speaker 1: right and they're saying, uh, we're gonna take it, We're
Speaker 1: gonna take Give us some examples of that, Like, who
Speaker 1: are you seeing selling right now? Yeah, not necessarily the
Speaker 1: insiders and our companies. Well, the list is really really long.
Speaker 1: Um you know, I I've seen somewhere the new issuance
Speaker 1: is is you know, at just about record levels per
Speaker 1: se and um, you know, it's just all up and
Speaker 1: down throughout the throughout the stream of insiders selling. So
Speaker 1: I don't have a specific name throughout there, but it's
Speaker 1: just I'm looking at the cumulative effect and it's it's
Speaker 1: pretty telling. It's much much higher than normal. Well and
Speaker 1: what's interesting though, is we also at the same time
Speaker 1: we came off earnings, and we saw some you know,
Speaker 1: big buy back programs announced at the same time. You know,
Speaker 1: we just saw Amazon do a huge debt offering of
Speaker 1: eighteen and a half billion dollars and some of the
Speaker 1: expectation is that they're going to use it to buy
Speaker 1: back shares um. So it's interesting that that's happening at
Speaker 1: the same time. But your is our insider selling because
Speaker 1: at tax reasons. Uh, that's certainly part of it. I've
Speaker 1: had clients that have last year said, get me at
Speaker 1: all my gains. I don't want to go in of
Speaker 1: this new year with with any gains. Uh So, anyway, yes,
Speaker 1: that that is part of it. But you know, they've
Speaker 1: seen this huge run especially in uh you know, some
Speaker 1: of the names that weren't so popular for some time,
Speaker 1: some of the smaller names, some of the more cyclical
Speaker 1: names and the like, and so yeah, that would be
Speaker 1: be normal to to take take some off the table.
Speaker 1: And you know, the kind of growth we're seeing in
Speaker 1: the economy right now obviously driving earnings and you know,
Speaker 1: been driving stock prices, and it may be a little
Speaker 1: bit ahead of itself. We don't think it's a permanent thing,
Speaker 1: but we need a little bit of a cooling off period. Hey, Barry,
Speaker 1: are there any Barrish economic indicators that you're that you're
Speaker 1: seeing right now, I mean, any anything that concerns you. Yeah,
Speaker 1: the producer prices and uh as you as you just mentioned,
Speaker 1: you know, the commodity prices are way up. Um. You know,
Speaker 1: we have oil up, You've got the medals are way up,
Speaker 1: You've got agricultural way up. So all of these things
Speaker 1: are laying the groundwork to pressure on companies and their earnings. Uh.
Speaker 1: The c p I, you know, hasn't been going up
Speaker 1: at the same pace as the p p I, and
Speaker 1: that's that makes it a lot tougher for companies to
Speaker 1: pass on their costs. So that that is one one
Speaker 1: piece of the puzzle that that we're concerned about. Um,
Speaker 1: we're also as as we look at you know, the
Speaker 1: possibility of of inflation kicking in and the lack of personnel,
Speaker 1: if you will, um heartys locally one worker and that
Speaker 1: was the manager, one worker. Isn't that just a matter
Speaker 1: of time before that kind of corrects itself. And whether
Speaker 1: it's we were just talking about it earlier with Carl
Speaker 1: ri Kadana, whether some workers are staying home because of
Speaker 1: stimulus payment. He reportminded us at only six of school
Speaker 1: districts have actually opened. So there are a lot of
Speaker 1: parents that are still struggling with you know, schooling their
Speaker 1: kids at home, and it's hard for them to get
Speaker 1: maybe back to work. I mean, there's a lot of
Speaker 1: factors at play right now. But ultimately that will correct itself.
Speaker 1: I agree. Um, you know, the free market, if it
Speaker 1: doesn't get interfered with too much, will we'll balance things out.
Speaker 1: It's not necessarily pretty, but yes, it'll get there and
Speaker 1: people will probably be making more money. Well, well, let's
Speaker 1: talk about that because you actually there are some names
Speaker 1: that yet you um do like at this point, and
Speaker 1: let's talk about the mass Tech is one. Mt Z
Speaker 1: is the ticker. It's been on quite a run up
Speaker 1: about seventy two here on infrastructure, play communications, utility, infrastructure
Speaker 1: they work on uh wind and solar farms. Uh. It
Speaker 1: also I think hit a record in yesterday's training to
Speaker 1: have to check today if it hit another record. Uh
Speaker 1: you like this one? You would commit new money to it? Yeah? Yeah,
Speaker 1: I mean you can only sell the top once, right,
Speaker 1: So anyways, um, forgive that joke. It's it's in the
Speaker 1: field that is going to be dominant for quite some time.
Speaker 1: And they are really really good at what they do there,
Speaker 1: their their sales growth against the competitors, cash flow margin,
Speaker 1: all those sorts of things versus competitors are very very strong.
Speaker 1: So they've got the financial side of it in in
Speaker 1: good shape. They have you know, low leverage on a
Speaker 1: historical basis, and they're right in the sweet spot, you know,
Speaker 1: even with five G So uh we I've got no
Speaker 1: problem buying it, buying it at a new high. Okay,
Speaker 1: what about l g I homes uh market cap of
Speaker 1: over four billion dollars. Uh, and it targets first time
Speaker 1: homebuyers in Texas, Arizona, Florida, in Georgia, right right, Um,
Speaker 1: so yeah, this is small. I don't want to give
Speaker 1: anybody an impression this is one of the big guys.
Speaker 1: But um, the low interest rates is a major tailwind. Uh.
Speaker 1: You know, homes in that starter area you can't find them,
Speaker 1: there's no inventory, and people are wanting to get out
Speaker 1: on their own. I think this whole COVID thing has
Speaker 1: has got people thinking I want my own place and
Speaker 1: I don't want to be in, you know, on an
Speaker 1: apartment or anything. So um, that is I think very
Speaker 1: supportive of what they do. They've got great margins and
Speaker 1: what's important, with the prices of you know, the commodities
Speaker 1: going up, they seem to have the ability to pass
Speaker 1: on those costs fairly easily, so they shouldn't get caught
Speaker 1: in a trap of you know, being paying up to
Speaker 1: get the goods without being able to pass that along.
Speaker 1: And again, this is one that's been on quite a tear.
Speaker 1: I think it's up something like sixty almost so far
Speaker 1: this year. You don't have a problem, you think is
Speaker 1: one can can move even higher. Well yeah, but this
Speaker 1: if we do get this little pause that refreshes these
Speaker 1: types of companies will will pause the mass text the
Speaker 1: l g I s. We have these in our our
Speaker 1: balance Golden Rainbow fund. Uh and uh, you know if
Speaker 1: if we see a pull back, would probably be buying
Speaker 1: buying more in those particular positions. Well lg UM homes
Speaker 1: is down about five so would you be buying into
Speaker 1: it today potentially? Yeah? Yeah, Um, you know it's a
Speaker 1: it's the case where you have to step up whenever
Speaker 1: the opportunity arises. You can't just you know, wish and
Speaker 1: hope that you know, buy it on any given day.
Speaker 1: Gotta move when the opportunity strikes. All right, we're gonna
Speaker 1: leave it on that note, Barry, Thank you so much.
Speaker 1: Barry James, President, CEO and portfolio manager James Investment Research,
Speaker 1: on the phone from Alpha Ohio. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
Speaker 1: Bloomberg dot com, and you can also listen to our
Speaker 1: radio show at two pm Eastern on Bloomberg Radio or
Speaker 1: watch us on YouTube search Bloomberg Global News