Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Carol, Israel's military said it struck Hamas targets and Gaza overnight,
Speaker 2: and Israel also responded to fire from Lebanon by hitting
Speaker 2: Hezbola assets.
Speaker 3: So let's get to Mick mulroy. He is back with US,
Speaker 3: former Deputy Assistant Secretary of Defense, a retired CIA officer,
Speaker 3: understands as we've been leaning on him big time. He's
Speaker 3: also co founder of the Lobo Institute, so obviously looking
Speaker 3: at areas of the world where there is conflict. Mick,
Speaker 3: we want to get you to weigh in. We know
Speaker 3: you're monitoring a lot of stuff right now. Another crazy week,
Speaker 3: if you will. How are you thinking about it on
Speaker 3: this Friday?
Speaker 4: So, first of all, great to be with you, and
Speaker 4: it's great that these two American hostages were released, a
Speaker 4: mother and daughter. They're saying because he manitarian reason, she
Speaker 4: was very sick. But it's always good to get Americans released.
Speaker 4: But there's several more, and there's around two hundred total
Speaker 4: hostages held by a MOSS right now, which of course
Speaker 4: is a war crime to hold civilians as prisoners of war.
Speaker 4: So that is a very good thing, and hats off
Speaker 4: to everybody that had a role in that guitar for example,
Speaker 4: and likely the FBI and the CIA, so.
Speaker 5: Good for them.
Speaker 4: But there's a lot more to do when it comes
Speaker 4: to get hostages out, and it does look like we
Speaker 4: are on the edge of this ground invasion that could
Speaker 4: be coming with the next twenty four or forty eight hours.
Speaker 3: We want to also bring in our Bobby go She's
Speaker 3: a Bloomberg opinion columnist but has covered the Middle East
Speaker 3: for a long long time. And you know, I know, Mick,
Speaker 3: you've got to run. But Bobby, I wonder if you
Speaker 3: have a question for Mick who's also been covering this.
Speaker 3: We'd love to do that Mick before maybe you have
Speaker 3: to run. Bobby, you have a question real quick one.
Speaker 6: Well, yes, absolutely. What I would like to ask Mick
Speaker 6: is basically the events of the last twenty four hours,
Speaker 6: these missiles and rockets that have been directed at American
Speaker 6: targets as well as Israel from not just Hamas, but
Speaker 6: also and Hesbalala, but also from she militias in Iraq,
Speaker 6: and it looks like the Huthi militias in Yemen. What
Speaker 6: they all have in common is that they're all sponsored by,
Speaker 6: paid for, trained by Iran. And how much of sort
Speaker 6: of Iran is looming over the back drop of all
Speaker 6: the decision making that's taking place in Washington over what
Speaker 6: to do next in the region.
Speaker 4: That is a very good question and a very astute one.
Speaker 4: You are correct, Hamask it's about ninety percent of its
Speaker 4: military funding from Iran. Hes Belah very similar support multiple
Speaker 4: militias in Syria, and the Huthis are on Allah in Yemen,
Speaker 4: who has been waging a bloody civil wars. I'm sure
Speaker 4: you're aware of since around twenty fourteen. They all have
Speaker 4: Iran in common. They are especially when it comes to
Speaker 4: their advanced weapons systems, they get almost all of them
Speaker 4: from Iran, and it's likely that Iran could use that
Speaker 4: connection should Israel, and it looks like they will launch
Speaker 4: a ground invasion into Gaza, particularly if a most looks
Speaker 4: like it's going to be destroyed. There'll be a lot
Speaker 4: of pressure on all of those entities you mentioned and
Speaker 4: Iran could orchestrate the whole thing. And I think that's
Speaker 4: why the United States, and that's why they said they
Speaker 4: place so much military capacity right off the coast of Israel,
Speaker 4: with two carriers, strike groups, a marine expeditionary unit, and
Speaker 4: more elements moving to the area.
Speaker 2: Hey, Mick, I know you got to go. We are
Speaker 2: hearing from Anthony Blincoln, Secretary of State right now after
Speaker 2: the release of two American hostages, and that's where I
Speaker 2: want to go with our last question to you. Just
Speaker 2: give us an idea of what happens behind the scenes
Speaker 2: to secure the release of hostages, even though there are
Speaker 2: so many more that need to be released.
Speaker 4: So I think this is such a difficult military problem.
Speaker 4: Even the best units would have a hard time rescuing
Speaker 4: two two hundred hostages, likely in tunnels. Likely it's already
Speaker 4: wired to explode if they get too close, and may
Speaker 4: actually facilitate the recovery. So all these diplomatic efforts are
Speaker 4: truly their best option for getting out, and I hope
Speaker 4: they continue and we see more hostages coming out.
Speaker 3: Hey Mick, thank you so much. You've been great throughout
Speaker 3: this crisis, and we know you've got to run. But that,
Speaker 3: of course is McK mulroy, as we said, former Deputy
Speaker 3: Assistant Secretary of Defense, retired CIA officer, retired US Marine reservist,
Speaker 3: and co founder of the Lobo Institute, which advises, consults
Speaker 3: and teaches on conflicts. So so appreciate Heyway, And I've
Speaker 3: got to say we've also been leaning big time on
Speaker 3: our own Bobby Gosh Bloomberg opinion columnists covering culture, but
Speaker 3: he spent many, many, many years covering foreign affairs, particularly
Speaker 3: from those conflict zones in the Middle East. So Bobby,
Speaker 3: we do want to stay with you. I do think
Speaker 3: about what has to be front and center for the
Speaker 3: United States right now in terms of in a fluid
Speaker 3: situation trying to calm things down. But it does feel
Speaker 3: like with these additional conflicts or outbreaks, if you will,
Speaker 3: that it does feel like it's there's slowly a little
Speaker 3: bit of a creep.
Speaker 6: There's always a risk of that when the United States
Speaker 6: commits itself to a situation, even if the commitment is
Speaker 6: for peace, there's always a risk of getting caught up
Speaker 6: in a warlike situation. So yesterday, the reporting from our
Speaker 6: news colleagues of these missile attacks from Yemen which is
Speaker 6: a really long way from Israel. But these missiles, it
Speaker 6: would appear, were heading in the general direction of Israel.
Speaker 6: They would have to fly over quite a lot of
Speaker 6: Saudi land mass as well, and they were taken down
Speaker 6: by an American warship that sort of now nobody, no
Speaker 6: human being was hurt in the process. But it is
Speaker 6: an American ship taking aim at a missile that is
Speaker 6: heading in the direction of Israel. So the United States
Speaker 6: to that extent is already engaged in the war.
Speaker 2: What is that, Bobby? What does that mean though? When
Speaker 2: the US is engaged in that sense? And I that's
Speaker 2: the same question thrown Nick Wadams earlier, Because it does
Speaker 2: it risk, in your opinion, the US being drawn into
Speaker 2: this conflict more so than it already has been.
Speaker 6: Yes, it does. The crucial thing is that it took
Speaker 6: place a long way from the main theater of the war,
Speaker 6: and that it did not involve American boots on the ground, certainly,
Speaker 6: and it did not sort of involve shooting down a plane,
Speaker 6: for instance, or a nest of fighters. No blood was spilt,
Speaker 6: So that gives the US a certain amount of distance.
Speaker 6: But it is a cautionary tail. It tells you that
Speaker 6: the longer this conflict rages, the more we might find
Speaker 6: ourselves in situations like this. And the fact that the
Speaker 6: US President Biden has sent two aircraft carrier groups into
Speaker 6: the Eastern Mediterranean. They're not there just for show. They're
Speaker 6: there to worn off Israel's other enemies and our enemies
Speaker 6: from trying to get involved. And if they do get involved,
Speaker 6: then those then you know, a moment may come when
Speaker 6: the United States is forced to follow through on its threats.
Speaker 6: We should all hope that that moment never comes. The
Speaker 6: big part of President Biden's visits to Israel was to
Speaker 6: try and make sure that there was a humanitarian corridor
Speaker 6: into Gaza, and I think he was encouraging the Israelis
Speaker 6: to hold back, not to to sort of rush in
Speaker 6: with a sense of vengeance, but to be more measured,
Speaker 6: to make more efforts to to sort of prevent hurting civilians,
Speaker 6: and to have a plan for what happens after the
Speaker 6: fighting is over.
Speaker 3: Do you think it was smart of the president to
Speaker 3: tie aid to Israel and to Ukraine and do concerns
Speaker 3: about Taiwan and also you know the Mexican border, like
Speaker 3: to tie it all together about the protection of American democracy.
Speaker 3: And again I do this to you all the time.
Speaker 3: I've got about thirty seconds here.
Speaker 6: Well, it's the nature of our politics now. Unfortunately, in
Speaker 6: an ideal world, he would be able to do all
Speaker 6: those things separately, and you would have a responsive Congress
Speaker 6: that would appreciate what's going on in the wider world.
Speaker 6: You and I know that that's not what the Congress
Speaker 6: is like right now. And to get people's attention, to
Speaker 6: get the attention of the folks on Capitol Hill, the
Speaker 6: president's having to sort of bundle all these things together.
Speaker 6: There is a common ad narrative, and he hit those
Speaker 6: notes yesterday in his speech, right. But in an ideal world,
Speaker 6: he wouldn't have had.
Speaker 3: To smarter because if you weigh in on all of this.
Speaker 3: Bobby go Schploomberg Opinion calmnist, as we said, has covered
Speaker 3: foreign affairs for a long time. He currently covers culture,
Speaker 3: but just knows so much about what's going on in
Speaker 3: that region.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: We're that strong US retail sales data this week.
Speaker 2: Yeah, turns out American consumers are still spending.
Speaker 7: Money a lot of different things.
Speaker 2: The American Expresses third quarter revenue and profit also soaring
Speaker 2: to record levels. This is the company continue to attract
Speaker 2: new cardholders who are willing to pay an annual fee
Speaker 2: for its premium products. Still spending slowed a little bit. Yeah,
Speaker 2: a mixed report.
Speaker 3: It is kind of a mixed report. So we're getting
Speaker 3: different facets of kind of what's going on with the
Speaker 3: American consumers and different types of consumers. To be fair,
Speaker 3: Tom McGee is back with US, president of ICSC at
Speaker 3: the organization formerly known as the International Council of Shopping Centers.
Speaker 3: It's the trade association of the shopping center industries. We'd
Speaker 3: like to remind our viewers and listeners. He is back
Speaker 3: with us on Zoom in New York City. Tom, how
Speaker 3: are you.
Speaker 5: It's great to be with the Carol. I'm doing well.
Speaker 5: Hopefully you are too.
Speaker 3: We are trying to keep up with kind of the
Speaker 3: newsflow and just deal with the world which is pretty
Speaker 3: heavy as you as you would imagine, you know, the
Speaker 3: shopping center industry. We did get a strong retail report
Speaker 3: this week. What are you guys hearing front and center
Speaker 3: from some of your members?
Speaker 8: Well, consumer, the consumer continues to be resilient. You know,
Speaker 8: we're heading into the holiday season with an expectation for
Speaker 8: a positive holiday season three point eight percent growth, you know,
Speaker 8: seven point six percent growth in the food and beverage industry.
Speaker 8: So the consumer continues to be resilient. It's certainly concerned
Speaker 8: about inflation, no doubt about that. You're seeing the consumer,
Speaker 8: particularly during the holiday with an expectation to spend more
Speaker 8: on discount and discount department stores specifically, but still strong
Speaker 8: and you know, until something dramatic happens in the employment market,
Speaker 8: I would.
Speaker 5: Expect the consumer to continue to be resilient.
Speaker 8: You know, that's the ultimate consumer facing industry, and consumer
Speaker 8: confidence drives behavior, and if you have job security, you
Speaker 8: tend to be more confident.
Speaker 2: It's been where are you seeing spending patterns? And how
Speaker 2: are you seeing spending patterns or how are your partners
Speaker 2: seeing spending patterns?
Speaker 5: Right now?
Speaker 2: At these shopping centers which have really morphed from sort
Speaker 2: of having anchor tenants and big box stores to really
Speaker 2: experiential places in a lot of these newer areas.
Speaker 5: Yeah.
Speaker 8: So our industry covers everything from you know, large regional
Speaker 8: malls to you know, a classic grocery anchored shopping center
Speaker 8: and open air center and everything in between. You know,
Speaker 8: you're really seeing retail evolved quite a bit to your
Speaker 8: point around you know, regional mall is a lot more
Speaker 8: experiential in nature to really open air centers, which are
Speaker 8: which are kind of on fire right now in the
Speaker 8: post pandemic environment.
Speaker 5: Yes, it's actually the use of the physical retail.
Speaker 2: Yeah, I want to bring up an example of this, Carol.
Speaker 5: I don't you know.
Speaker 2: I don't know if you got to experience this last week, Carol,
Speaker 2: but the two of us were in La and I
Speaker 2: was there for a conference. Carol and I were there
Speaker 2: first conference. We stayed in Century City. Your room overlooked
Speaker 2: the Field mall.
Speaker 3: Yeah, I was right there.
Speaker 2: Yes, I actually went to dinner there right before I
Speaker 2: met you at the airport on the on our way back.
Speaker 2: I was there with a friend. It was an amazing
Speaker 2: indoor slash outdoor experience and it was like it was
Speaker 2: like a mall unlike one I've ever been to.
Speaker 7: And they underone Italy.
Speaker 2: Yeah, yeah, yeah, Sarah was went there as well. Yeah,
Speaker 2: one of our producers, and I got it. I mean
Speaker 2: it was like it was crowded. It didn't feel like
Speaker 2: a typical mall. This type of thing only works in
Speaker 2: California because the weather's perfect there all the time in
Speaker 2: southern California. But you know, they had like furniture, outdoor
Speaker 2: furniture that people were like lounging on and looking on
Speaker 2: their at their phone, right, they were just hanging out there.
Speaker 2: I was like, what is this nineteen ninety.
Speaker 3: Yeah, it is interesting. You know, if you think about it, Tom,
Speaker 3: kind of the rethink on what kind of malls have
Speaker 3: you know, kind of morphed into.
Speaker 1: Sure.
Speaker 8: I think that's a great example. And and you know,
Speaker 8: different properties have different offerings, you know, whether it's you know,
Speaker 8: the American dream I hear in in the Tri State.
Speaker 2: Right place to teach your kids to ski? Seriously, really
Speaker 2: you as.
Speaker 8: To your point around, you know, different weather patterns and
Speaker 8: different you know, drives, different offerings. But you know, malls
Speaker 8: have evolved, and you know the story of the demise
Speaker 8: of the American mall has been written for the last
Speaker 8: thirty forty years.
Speaker 2: Okay, but to be fair, the American dream mall is
Speaker 2: struggling pretty badly right now.
Speaker 8: Again, well, I think I think every property has its
Speaker 8: own history. But my real point is that, you know,
Speaker 8: the mall industry, the demise of the industry has been
Speaker 8: written for decades, and yet we're still at basically the
Speaker 8: same number of malls in the country today that we
Speaker 8: had twenty years ago. And so they're very resilient and
Speaker 8: you know, good real estate will always find its purpose,
Speaker 8: and so, you know, the evolution is a big part
Speaker 8: of retail and a big part of real estate, and
Speaker 8: so the mall sector.
Speaker 5: Is one part of the industry.
Speaker 8: And then you have what I you know, your Target anchored,
Speaker 8: your Walmart anchored open air type of center, or even
Speaker 8: grocery anchor centers. And what's happening is in those physical
Speaker 8: retail locations, those stores are really starting to use that
Speaker 8: physical space not just for traditional shopping, but also is
Speaker 8: really many fulfillment centers. And so it was an opportunity
Speaker 8: to you know, fulfill online orders, to service that last mile,
Speaker 8: and that really became something that you know, accelerated quite
Speaker 8: dramatically during the pandemic year. Obviously, you know, just the
Speaker 8: just by definition of what was happening, people couldn't congregate
Speaker 8: physical space as often, and so retailers were forced to
Speaker 8: adapt and that's become very effective.
Speaker 5: And so the demand for physical.
Speaker 8: Space, particularly in that open air sector is super strong
Speaker 8: right now. If you look at physical retail space in
Speaker 8: the United States and where it was at the financial
Speaker 8: crisis in two thousand and eight and where it is today.
Speaker 8: You know, while population growth is accelerated, what GDP growth,
Speaker 8: it is acceleraate, retail sales have almost doubled during that
Speaker 8: period of time, right, the amount of physical retail space
Speaker 8: is not, you know, increased almost at all.
Speaker 5: And so you really have a mismatches supply and demand.
Speaker 8: Now right Well, there's a lot more demand and not
Speaker 8: enough supply to Philip, do.
Speaker 3: You want to point out that we reported Bloomberg News
Speaker 3: back in September that New Jersey's American dream Megamol losses
Speaker 3: quadrupling in twenty twenty two, widing to two hundred and
Speaker 3: forty five million. I mean, this is a special situation,
Speaker 3: it does feel like, but we continue to report on Hey, Tom,
Speaker 3: just got about thirty seconds left here. You guys have
Speaker 3: a survey out for the upcoming holiday season. Anything that
Speaker 3: kind of indicates a possible recession or consumer slowdown. And again,
Speaker 3: just got about thirty seconds please, No.
Speaker 8: Well, I mean we're forecasting positive retail sales three point
Speaker 8: eight percent growth, seven point six percent growth in FMB.
Speaker 8: You know, eight out of ten Americans expect to spend
Speaker 8: equal or more than they did last year.
Speaker 5: So right now, the consumer continues to be resilient. All right?
Speaker 3: Can I leave it on that note? Listen, have a
Speaker 3: great weekend. Always fun to check in with you. Tommygee,
Speaker 3: President and chief executive officer of ICSC. It's a group
Speaker 3: that's representing the shopping mall industry, So a good check
Speaker 3: on the consumer.
Speaker 2: Maybe with three D.
Speaker 3: Yeah, yeah, I don't know, Like I can't.
Speaker 2: Tell that mall was cool.
Speaker 3: Have you gone back a lot though?
Speaker 2: No, I'm talking about the one and now the Yeah,
Speaker 2: the American dream will go back there. Yeah, yeah, I'll
Speaker 2: do some skiing. Yeah, it's a good way to teach
Speaker 2: your kids to skire.
Speaker 3: You have to try that. It's kind of fun.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Well, if you even have a cursory knowledge of the
Speaker 2: retail world, you probably know Chip Wilson. He's the founder
Speaker 2: of Lululemon Athletica, which he ran until twenty thirteen. That's
Speaker 2: when he stepped away following some particularly insensitive comments about
Speaker 2: how the pants looked on some women's bodies. It's also
Speaker 2: probably why you know a lot about him, because he
Speaker 2: kind of was notorious around that time, Oh Carol. He's
Speaker 2: also got a net worth about seven point three billion dollars,
Speaker 2: that's according to the Bloomberg Billionaires Index.
Speaker 3: But there's one thing you probably didn't know about him,
Speaker 3: and that's what we want to get to because it's
Speaker 3: a mission. It's a situation, if you will, that he's
Speaker 3: spending a lot of money to correct.
Speaker 7: So let's get to it.
Speaker 3: Because this story isn't the current issue of Bloomberg Business
Speaker 3: Week on newstands, online, and of course, on the Bloomberg Aria.
Speaker 3: Alstedter is with us. He typically writes about Canada real estate,
Speaker 3: but he is writing about Chip Wilson and his current battle.
Speaker 3: He is with us from our Toronto bureau, and with
Speaker 3: us is the edit of Bloomberg BusinessWeek, Jill Webber in
Speaker 3: our Bloomberg Interactive Broker studio, and Jill, you know, we
Speaker 3: talk about Lululemon a lot. It's a company well known
Speaker 3: to certainly the Bloomberg BusinessWeek audience. Chip Wilson too, But
Speaker 3: I'm not sure that many knew about his own battle
Speaker 3: that he was facing.
Speaker 9: Yeah, and obviously Chip Wilson, founder of Lulu Lehman has
Speaker 9: you know, built this thing into a juggernaut and created
Speaker 9: a whole category. What most people didn't know is this
Speaker 9: whole other personal side to the story, which when we
Speaker 9: found out about that, we were like, we we really
Speaker 9: want to go big here, and gave Ari the platform
Speaker 9: to be able to do so. What's really amazing about
Speaker 9: it is He's got a fortune and he is willing
Speaker 9: to basically throw that fortune to help solve something that
Speaker 9: may only ultimately benefit him, but or hopefully a slightly
Speaker 9: wider group of people who otherwise if it was left.
Speaker 1: To the normal kind of way of that.
Speaker 9: Science and drugs and cures like this kind of happened
Speaker 9: may actually not ever be addressed. Right, So, so Ari
Speaker 9: talk to us about Chip Wilson and what he's been
Speaker 9: going through.
Speaker 7: Right.
Speaker 10: Well, Chip Wilson, as you say, in his public persona,
Speaker 10: he didn't really let on that he's actually been battling
Speaker 10: this very rare form of muscular dystrophe since he was
Speaker 10: diagnosed with it in his thirties, his early thirties.
Speaker 7: So for the past over thirty years, he's.
Speaker 10: Been watching his muscles slowly waste away. He could more
Speaker 10: or less carry on with normal life despite this disease.
Speaker 10: He had to give up squash when he couldn't raise
Speaker 10: the racket above his head, he had to give up yoga,
Speaker 10: and bounce became too difficult.
Speaker 7: But he sort of tried to ignore it.
Speaker 10: That all changed around late twenty eighteen early twenty nineteen
Speaker 10: when he was taking a trip to China walking out
Speaker 10: of customs and he fell, got up to't know what happened,
Speaker 10: walked forward, fell again.
Speaker 7: He started to lose the use of his legs.
Speaker 10: Now he thinks he's got about five years until he's
Speaker 10: in a wheelchair, and he he has an urgent need
Speaker 10: to do something about this now, and so he set
Speaker 10: aside one hundred million dollars and he says, I'm going
Speaker 10: to use it to cure this form of muscular dystrophy
Speaker 10: that I have in the next five years before I
Speaker 10: need that wheelchair.
Speaker 3: I want to ask you, I am shocked that this
Speaker 3: story kind of hasn't come out. So how is it
Speaker 3: that it was kept so quiet?
Speaker 10: Well, Chip Wilson is a very outspoken person. I think
Speaker 10: anyone who knows anything about him knows that. But he's
Speaker 10: kept this private. It wasn't I mean, in my discussions
Speaker 10: with him, he sort of said it wasn't a secret
Speaker 10: so much as it just wasn't something he talked about publicly.
Speaker 10: But that changed when he got this urgency to try
Speaker 10: to find a cure and caused him to launch this
Speaker 10: initiative and spend all this money. And now he's started
Speaker 10: talking about it very publicly in the hopes that it'll
Speaker 10: be it'll make his venture more effective and it'll get
Speaker 10: more researchers, more investors, companies on side to try to
Speaker 10: get a drug, therapy, something to help within his timeline.
Speaker 2: Well, let's talk a little bit aout the initiative and
Speaker 2: where the one hundred million dollars is going. There's a
Speaker 2: great scene in here where you spent some time with
Speaker 2: him not just at his home, but at his family
Speaker 2: office as well, And he's essentially creating a business around
Speaker 2: trying to find a cure for this, including bringing in
Speaker 2: somebody who has a lot of experience when it comes
Speaker 2: to pharmaceuticals.
Speaker 10: Yeah, it's a really interesting sort of emerging model of
Speaker 10: a drug research driven by very wealthy people to tailored
Speaker 10: to their specific and very urgent needs. So he hired
Speaker 10: a veteran pharmaceutical executive called Eva Chin, who also is
Speaker 10: a physiologist physiology, PhD and has a lot of expertise
Speaker 10: on the academic side as well as the private side.
Speaker 7: To essentially run this.
Speaker 10: It's sort of a cross between a government research agency
Speaker 10: or a granting agency and venture capital try to seed
Speaker 10: money into all sorts of companies, as many different companies
Speaker 10: as possible which are working on promising potential therapies that
Speaker 10: could be applied to this condition, and to try to
Speaker 10: get them through what's known in the research community as
Speaker 10: the value of death. Now, the value of death is
Speaker 10: between basic research, which is the kind of stuff academics
Speaker 10: do to come up with ideas for potential therapies and
Speaker 10: then on the other side, human clinical trials, which there's
Speaker 10: a lot of private money available investors who are willing
Speaker 10: to take a punt and see once it's ready for
Speaker 10: clinical trials, let's see if we get at the rest
Speaker 10: of the way. But it's getting between those two stages
Speaker 10: basic research and human trials that a lot of drugs
Speaker 10: just get lost, a lot of ideas just fail. Up
Speaker 10: to ninety percent is the estimate, And so he's trying
Speaker 10: to get as many potential ideas is through that value
Speaker 10: death as possible and into clinical trials and hopes that
Speaker 10: one of them will work out.
Speaker 9: So how close does he think he is to something
Speaker 9: that either resembles a cure or at least really helps him.
Speaker 10: Well, I mean it is just sort of starting out.
Speaker 10: The initiative launched only last year. There is precedent for
Speaker 10: something like this being very successful. As I said, it
Speaker 10: is an emerging model. Wilson has explicitly modeled his initiative
Speaker 10: on another one called the SMA Foundation, and that was
Speaker 10: started by a hedge fund tycoon and his wife to
Speaker 10: tackle another very rare disease called SMA because their daughter
Speaker 10: was diagnosed with it and they spent one hundred million
Speaker 10: dollars of their own money, and eventually, not one, but
Speaker 10: three therapies came to market to tackle this disease, and
Speaker 10: many physicians consider it effectively cured because now when an
Speaker 10: infant is diagnosed with it, their symptoms can largely be managed.
Speaker 10: So he looked at that model and said, well, if
Speaker 10: they could do it for their daughter, I want to
Speaker 10: do it for myself, but in a much faster timeframe.
Speaker 10: And so, like I said, he set aside hundred million
Speaker 10: for this. He's already distributed about thirty million, and they're
Speaker 10: looking for more opportunities. He uses a sort of sports metaphor.
Speaker 10: You know, he's a Canadian hockey shots on goal. They
Speaker 10: want as many shots on goal as possible, right, in
Speaker 10: hopes that one of them goes in.
Speaker 3: All right, great story, all right, I'll statter of course,
Speaker 3: writing in Bloomberg BusinessWeek, the new issue, joining us from Toronto,
Speaker 3: and of course Joe Weber here in our interactive broker studio.
Speaker 3: As we said, new issue on newstands online of course,
Speaker 3: on the Bloomberg terminal.
Speaker 7: Journal. Now about you let me drive?
Speaker 9: Oh no, no, no, no, no, want to jog, honey, please gravels.
Speaker 1: Let's wait, I want to drive try.
Speaker 2: It's good question time.
Speaker 1: This is the drive to the globe.
Speaker 5: Down to me. I think we'll buy around you and
Speaker 5: on on Bloomberg Radio.
Speaker 3: All right, everybody just got about eighteen minutes, just under
Speaker 3: eighteen minutes to be exact, left in today's trading session.
Speaker 3: Quite a week. We're pretty much though Nero Loo is
Speaker 3: certainly on the dow, but pretty much so on the
Speaker 3: S and P five hundred, of course didn't. He's just
Speaker 3: breaking down the numbers, so down down on the week
Speaker 3: overall as well. And uh, you know, it's been a
Speaker 3: week where once again you see yields moving up substantially
Speaker 3: right now that tenure though it is below five percent
Speaker 3: four point nine two two two two to be exact.
Speaker 2: I'm actually taking a look at the S and P
Speaker 2: five hundred right now, Carol. We've moved a leg lower,
Speaker 2: as you mentioned, we've at the lowest right now since
Speaker 2: June of twenty twenty three.
Speaker 3: June of twenty twenty three.
Speaker 2: Yeah, I'm back to uh yeah, right, it's the summer.
Speaker 3: The lower trend, right all right, So let's see what
Speaker 3: our drive to the close guest has to say on
Speaker 3: this Friday. Ross may Field is back with US investment
Speaker 3: strategy analyst at BAIRED Private Wealth Management on Zoom from Louisville, Kentucky. Hey, Ross,
Speaker 3: nice to have you here with Tim and myself. I
Speaker 3: am curious always when we get somebody who's outside New
Speaker 3: York City, do you guys spend as much time talking
Speaker 3: about Fed and Jay Powell and monetary policy and five
Speaker 3: percent yields?
Speaker 2: They got bourbon there?
Speaker 7: Yeah, or maybe bourbon.
Speaker 11: Yeah, the bourbon helps with the five percent yields and
Speaker 11: all the FED watching, that's for sure.
Speaker 5: But we do.
Speaker 11: It's it's what our it's what our clients are worried about.
Speaker 11: It's what you know, our clients are invested in the
Speaker 11: market and then the fixed income market, and so this
Speaker 11: moving yields and what the FED is doing, and particularly
Speaker 11: with how high profile the FED has become speakers every
Speaker 11: other day. J Powell kind of a minor celebrity. So
Speaker 11: so yeah, it's what we're thinking about and what we're
Speaker 11: talking about a lot of the time. And yeah, the
Speaker 11: bourbon helps, especially on a Friday afternoon.
Speaker 2: Yeah. So I've had some great trips Louisville, by the way,
Speaker 2: have you Oh yeah, did the Derby. A couple of times.
Speaker 2: The Cyclo Cross World Championships were there one year. I
Speaker 2: had a really good friend who lived there for a
Speaker 2: few years and they used to go hang out with it.
Speaker 2: It's a cool place. We should do a remote there.
Speaker 1: Ross.
Speaker 2: I'm sorry, I'm getting a topic. You know, memory welcome
Speaker 2: any time in here.
Speaker 5: Thank you.
Speaker 2: H It is a great a great city. Though, talk
Speaker 2: to me a little bit about where you think this
Speaker 2: new era of higher rates will take us, especially with
Speaker 2: regard to equities, because the truth is is we're't a
Speaker 2: place where we haven't seen rates this high since in
Speaker 2: many people's careers, to be honest.
Speaker 11: Yeah, so I think I think there's two things to
Speaker 11: break down. So the first thing is the move, the
Speaker 11: rapid move and kind of aggressive you know, over the
Speaker 11: last couple of months. That's obviously tough for the market
Speaker 11: to digest, you know, moving at the long end, especially
Speaker 11: up that much in such a short amount of time,
Speaker 11: is tough to digest, especially as you mentioned, when a
Speaker 11: lot of the you know, the index constituents have not
Speaker 11: existed in a world of higher rates. But I do
Speaker 11: want to be careful of, you know, overreacting and acting
Speaker 11: like a world of five percent interest rates is just
Speaker 11: a world where equities can't work. You know, we don't
Speaker 11: have to look that far back the eighties and nineties.
Speaker 11: We're one of the great bull runs of all time,
Speaker 11: and you know, tenure yields were higher than this. The
Speaker 11: FED was aggressive through a lot of that period. So
Speaker 11: it's not that the world of stocks can't work, but
Speaker 11: you do want to be a little bit more selective.
Speaker 11: I think, you know, moving up in quality in a
Speaker 11: world like this makes all the sense in the world,
Speaker 11: and then it just takes time to kind of digest
Speaker 11: the move so higher for longer, you know, is not
Speaker 11: a headwind in and of itself, but a move like
Speaker 11: the one we've seen takes some time to digest. I
Speaker 11: think is what we're going through right now.
Speaker 3: Well, I think it's very telling when you go to
Speaker 3: your guys website and the first page one of the
Speaker 3: things that comes up is a segment I'm protecting, protecting
Speaker 3: and growing your cash. Says a lot about kind of
Speaker 3: the environment we're in. How much of your you, guys,
Speaker 3: are wealth management. I'm assuming your individuals or the folks
Speaker 3: that you are working with general of a certain income strata.
Speaker 3: Having said that you know, what is top of mind
Speaker 3: for them. I'm assuming it's wealth preservation, and does that
Speaker 3: mean increasingly putting in cash. Are they saying I'm long term,
Speaker 3: I'm going to ride this out.
Speaker 5: It's a little bit of both.
Speaker 11: I mean, we're definitely talking to folks about the long
Speaker 11: term plan, you know, things like the war in the
Speaker 11: Middle East, investing through geopolitical events, having that long term lens.
Speaker 11: But I would definitely be lying if I said that
Speaker 11: one of the primary questions and one of the primary
Speaker 11: talking points isn't while we can finally get something on
Speaker 11: our cash. Savers are finally being rewarded after fifteen years
Speaker 11: of zero percent interst rate policy and negative rates abroad.
Speaker 11: So people do really really like their cash, their short
Speaker 11: term treasuries. Right now, we're even talking to folks about
Speaker 11: just moving out the yield curve a little bit. I mean,
Speaker 11: now that the yields on the long end are competitive
Speaker 11: with the short end, and you could possibly get the
Speaker 11: capital appreciation bump, you know, if yields were to fall
Speaker 11: in kind of a downturn or a mild recession next year.
Speaker 11: So we're talking through all of that, But you're absolutely right.
Speaker 11: The wealth preservation and just the general excitement about being
Speaker 11: able to earn something on your money is something that
Speaker 11: you know, I haven't really seen in my career and
Speaker 11: something that I know a lot of our clients you know,
Speaker 11: haven't gotten used to in a long time. So it's
Speaker 11: good to kind of barbel the wealth preservation and the
Speaker 11: yield you can get on cash with the long term
Speaker 11: stock investment.
Speaker 2: Well, does it change the way you're thinking about portfolio
Speaker 2: construction significantly?
Speaker 5: You know, it doesn't. It doesn't.
Speaker 11: I mean, we're advocates for diversification, and we were before
Speaker 11: and after this big move in rates, I think now
Speaker 11: you know, we're in a bond bear market, but you
Speaker 11: can now go to a client, go to a presentation
Speaker 11: and say, you know, look at this, you know, five
Speaker 11: six percent yield on a high quality fixed income. So
Speaker 11: it does change the conversation a bit, and it allows
Speaker 11: people who are in the draw down stage of their
Speaker 11: of their retirement or in a more of a wealth
Speaker 11: preservation stage to not feel like they have to be
Speaker 11: over exposed to equities in that volatility because it's the
Speaker 11: only asset class in talent, you know, Tina, there is
Speaker 11: no alternative, was the story for a decade, and for
Speaker 11: people who were in that you know kind of preservation
Speaker 11: and draw do on stage, it was really hard to
Speaker 11: find yield. There were a lot of times we would
Speaker 11: look at portfolios and see you know, high yielding things
Speaker 11: like MLPs or products that weren't necessarily protective of cash,
Speaker 11: but there was that urge to have some yield because
Speaker 11: they were living off that yield or there was an
Speaker 11: income component that they needed. Now we can have conversations
Speaker 11: that are much easier because there's treasuries, high quality bonds
Speaker 11: in the corporate market that are yielding five six seven percent,
Speaker 11: and you know, inflation has come down, so that's a
Speaker 11: real yield that we haven't seen in a long time.
Speaker 11: So it hasn't necessarily changed how we're building portfolios, but
Speaker 11: it's made the conversation a lot easier, a lot different,
Speaker 11: and also, you know, not forcing folks who are in
Speaker 11: wealth preservation far out on the risk spectrum where they
Speaker 11: don't really want to be.
Speaker 3: You sound pretty calm, So nothing in this market is
Speaker 3: freaking you out, Burben, No, seriously, no, but seriously, you
Speaker 3: sound pretty calm and complacent. I mean, nothing's freaking you
Speaker 3: out in this market.
Speaker 11: You know again, it's just what we talk to our
Speaker 11: clients about. It's just taking the long term view. I mean,
Speaker 11: in the wealth management space, most of the people that
Speaker 11: we work with, even who are you know, you know,
Speaker 11: near the end of their working career in retirement, still
Speaker 11: have a long term time horizon. So when we talk
Speaker 11: about things like geopolitical events, you know, most of these
Speaker 11: people have invested through wars in the Middle East, through
Speaker 11: things like nine to eleven, even a lot of our
Speaker 11: clients back to the nineteen seventies, and they know, and
Speaker 11: we talk about while it was painful and while there
Speaker 11: are years of big draw downs like we saw last year, ultimately,
Speaker 11: you know, the stock market made into all the time
Speaker 11: high last year of all time, So we can focus
Speaker 11: on the long term with our clients.
Speaker 3: All right, twenty seconds. What is your favorite bourbon drink?
Speaker 3: Let's just go there.
Speaker 11: It's bourbon on the rocks.
Speaker 2: It's amaze.
Speaker 7: Do you have a favorite one?
Speaker 2: I don't. I mean, you know, I doesn't really agree
Speaker 2: with me. You know, I get bad headaches when I
Speaker 2: drink this stuff. But you know I make an exception
Speaker 2: for going to Lovo.
Speaker 7: Okay, come on down anytime.
Speaker 3: We'll put that on the list. Hey Ross Wild good
Speaker 3: Carola that works. Bross Mayfield his investment strategy, Ali said
Speaker 3: baired Private Wealth Management on Zoom from Louisville, speaking of
Speaker 3: alcoholic Louisville, Louisville, Louisville, Louisville.
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