WEBVTT - WeWork CEO May Be Fall Guy For Investor Misvaluation 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penl Podcast. I'm Paul Sweene. You, 0:00:05.360 --> 0:00:07.680 along with my co host Lisa Brahma Wicks. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor, find a Bloomberg Penil podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.880 at Bloomberg dot com. Let's switch gears there now to 0:00:22.400 --> 0:00:25.480 we work. Talk about a company that has had a 0:00:25.600 --> 0:00:29.360 rough couple of weeks. First of all, it's evaluation appears 0:00:29.400 --> 0:00:32.600 to have been dressed dramatically from forty seven billion dollars, 0:00:32.600 --> 0:00:34.600 So what might be something in the ten to fifteen 0:00:34.640 --> 0:00:38.559 billion dollar range? Now, even the chair, the CEO is 0:00:38.640 --> 0:00:40.680 under pressure to resign, So let's get the latest. We 0:00:40.760 --> 0:00:44.479 bring in Sure overday. She's a technology columnist for Bloomberg Opinion, 0:00:44.560 --> 0:00:46.880 joining us here in our Bloomberg inter after Broker studio. 0:00:46.960 --> 0:00:49.320 So sure, it's been a tough couple of weeks for 0:00:49.320 --> 0:00:53.200 this company, for this CEO. What's the latest here? Because 0:00:53.240 --> 0:00:55.640 it looks like the board might be meeting today. Yes, 0:00:55.720 --> 0:00:58.200 that is the latest that our colleagues at Bloomberg News 0:00:58.200 --> 0:01:00.880 and other news outlets have reported the the we Work 0:01:00.960 --> 0:01:03.840 board is meeting, maybe as early as today, and one 0:01:03.880 --> 0:01:08.119 of the things they may talk about is um removing 0:01:08.160 --> 0:01:11.400 Adam Newman or pressuring Adam Newman, who's the co founder 0:01:11.400 --> 0:01:13.600 and CEO of the company, to step down from the 0:01:13.640 --> 0:01:18.440 CEO position, which is uh, just the latest very weird 0:01:18.480 --> 0:01:21.640 twist and what has been a very very weird corporate saga. 0:01:21.880 --> 0:01:25.360 So is he being basically the fall guy here? It 0:01:25.520 --> 0:01:27.880 does feel that way. I mean, the thing to understand 0:01:27.920 --> 0:01:31.800 about all this is that this is ultimately there's ultimately 0:01:31.880 --> 0:01:35.399 two players that matter in we Work, and that is 0:01:35.640 --> 0:01:39.319 we Works, Uh Adam Newman, the co founder and CEO, 0:01:39.640 --> 0:01:42.559 and Massio Shi sone who's the head of soft Bank, 0:01:42.640 --> 0:01:46.880 which is UM we Works biggest outside investor, and Son, 0:01:46.959 --> 0:01:50.720 until I guess now has been Adam Newman and we 0:01:50.800 --> 0:01:56.160 Works biggest backer. In the face of resounding doubts from 0:01:56.440 --> 0:02:00.560 many other people, including SoftBank's own investors and it's very 0:02:00.640 --> 0:02:05.040 large vision fund investment fund, and Massa has stood by 0:02:05.200 --> 0:02:09.080 Newman again. Something must have changed in the in the 0:02:09.160 --> 0:02:12.280 calculus of Son and soft Bank. I do not know 0:02:12.320 --> 0:02:15.000 what it is, but it's clear that they are turning 0:02:15.960 --> 0:02:19.560 billions ten billions that would yeah, well yeah, the valuation 0:02:19.600 --> 0:02:22.080 cut I think it was is probably the thing that 0:02:22.120 --> 0:02:26.560 would change the minds of even um sort of idiosyncratic 0:02:26.760 --> 0:02:30.880 billionaires like Maayoshi. So what's I mean? In reality? Though 0:02:31.480 --> 0:02:33.799 they can't force him out of the CEO spot can 0:02:34.040 --> 0:02:38.480 doesn't he still have some super voting stock? Yes, so 0:02:38.639 --> 0:02:42.839 I can't pretend to understand the corporate structure and what 0:02:43.080 --> 0:02:47.160 is or isn't possible. But yes, Adam Newman controls the 0:02:47.240 --> 0:02:51.960 votes in this company, and he can remove the entire board. Um, 0:02:52.000 --> 0:02:55.000 but there is also stipulation that you can see and 0:02:55.040 --> 0:02:57.320 we works i PO documents that the board has the 0:02:57.560 --> 0:03:00.680 power to remove the CEO. Now, I don't know how 0:03:00.840 --> 0:03:03.200 those two things could be in conflict, and so I 0:03:03.200 --> 0:03:06.360 don't know how to resolve those. Um, if it gets 0:03:06.400 --> 0:03:09.560 to that, what do you think that Adam Newman did wrong? 0:03:12.360 --> 0:03:15.040 So I don't want to put all the blame on 0:03:15.200 --> 0:03:19.200 Adam Newman. Look, this is a company that has been 0:03:19.320 --> 0:03:25.200 run in rather wild fashion for years, and that was 0:03:25.360 --> 0:03:29.400 enabled by all of the investors in this company, including 0:03:29.560 --> 0:03:33.560 soft Bank, and so everything that we work is today, 0:03:33.639 --> 0:03:40.360 which is this cash burning, maybe financially unsustainable company run 0:03:40.400 --> 0:03:44.320 by self dealing CEO. That was all information that was 0:03:44.440 --> 0:03:47.920 known and enabled by every investor in this company the 0:03:48.000 --> 0:03:50.480 last few years. And that top of that list is 0:03:50.520 --> 0:03:53.880 soft Bank. So everybody deserves blame for the company getting 0:03:53.880 --> 0:03:56.800 to the position that it is today. So let's flip 0:03:56.800 --> 0:03:59.560 it on its head. Is there anything that Adam Newman 0:04:00.080 --> 0:04:03.880 rings to we Work and frankly cult of personality among 0:04:03.960 --> 0:04:08.200 them that would be problematic if the company was stripped 0:04:08.200 --> 0:04:10.760 of it? Yeah? Look, I mean I you have to 0:04:10.800 --> 0:04:13.760 give Adam Newman credit. Again. It may seem baffling to 0:04:13.800 --> 0:04:16.560 those of those of us on the outside, but he 0:04:16.680 --> 0:04:20.159 has been a very effective pitchman for this company, both 0:04:20.200 --> 0:04:25.520 with investors, um and with other business partners and employees. 0:04:25.600 --> 0:04:29.200 So you know, again, this company is what it is 0:04:29.240 --> 0:04:32.760 today because of Adam Newman, both the good things and 0:04:32.839 --> 0:04:36.320 the bad things about We Work. My question is if 0:04:36.360 --> 0:04:39.920 you if you remove Newman from if Newman is removed 0:04:39.960 --> 0:04:42.480 or it steps down from the CEO position, do things 0:04:42.520 --> 0:04:45.320 really change? I mean, this is now a weekend company. 0:04:45.960 --> 0:04:48.480 It's reputation. I don't think I've ever seen a company, 0:04:48.640 --> 0:04:50.360 certainly not on the doorstep of an I P O 0:04:50.839 --> 0:04:55.600 where the sentiment about it is so relentlessly negative, and 0:04:55.880 --> 0:04:58.440 in a way, removing the CEO or having the CEO 0:04:58.480 --> 0:05:01.159 step down is sort of acknowledge ament of how messed 0:05:01.240 --> 0:05:04.599 up it is. And so I don't know what happens 0:05:04.680 --> 0:05:07.640 with or without Adam Newman in the CEO position. It's interesting. 0:05:07.680 --> 0:05:11.480 I like your thought that you know, really his behavior, 0:05:11.520 --> 0:05:13.760 of the company's behavior. The company's just the whole rise 0:05:13.839 --> 0:05:16.800 has been enabled by a whole host of investors, led 0:05:16.800 --> 0:05:19.680 by soft Bank. So to me, the only thing that's 0:05:19.760 --> 0:05:22.520 changed in the last two weeks is the valuation. That's 0:05:22.520 --> 0:05:25.200 the only thing that that's changed. And what that does. 0:05:25.400 --> 0:05:30.240 It shows that soft Bank miss priced and the other 0:05:30.279 --> 0:05:32.920 investors anything above ten or twelveillion dollars that's on them, 0:05:32.960 --> 0:05:35.360 that's not on Adam Newman. So it's one can make 0:05:35.360 --> 0:05:37.160 an argument, which I'm sure the Adam Newman camp is 0:05:37.200 --> 0:05:40.080 going to make, that he is perhaps being used as 0:05:40.200 --> 0:05:43.920 escapegoat for what is a arguably a flawed business model 0:05:44.279 --> 0:05:47.040 and a flawed valuation which the public markets are now 0:05:47.080 --> 0:05:49.800 shining a light upon. I think that's absolutely right that look, 0:05:49.880 --> 0:05:52.440 this shows you some of the inherent flaws in the 0:05:52.480 --> 0:05:56.119 soft bank business model is soft bank investment model, which 0:05:56.200 --> 0:06:01.159 is we poor, we train our cash ucas on these companies, 0:06:01.360 --> 0:06:05.320 and we make their success inevitable just by virtue of 0:06:05.400 --> 0:06:08.000 having more capital than anybody else. The downside of that, 0:06:08.040 --> 0:06:10.640 as you pointed out, is that they have so much 0:06:10.680 --> 0:06:16.480 money that valuations inherently become inflated. And the downside of 0:06:16.520 --> 0:06:19.400 that is what happens if nobody else but soft Bank 0:06:19.480 --> 0:06:22.560 agrees um what this company's work. And I think what's 0:06:22.640 --> 0:06:26.160 changed in the private to public thing in T nine 0:06:26.680 --> 0:06:29.440 is Uber. It just kind of changed the whole dynamic, 0:06:29.480 --> 0:06:32.040 which is, if you can't convince me, public shareholder to 0:06:32.320 --> 0:06:34.240 mutual fund in Boston, that you have a path of 0:06:34.279 --> 0:06:38.559 profitability that I can value, then I have a hard time, 0:06:38.880 --> 0:06:40.719 you know, giving you the valuation you're looking forward. So 0:06:40.720 --> 0:06:43.800 there's it's almost a pre uber post Uber timeframe, and 0:06:43.880 --> 0:06:46.120 unfortunate for we Work, they came post I think that's 0:06:46.560 --> 0:06:48.680 it's a good point. Obviously we can't go back in time, 0:06:48.720 --> 0:06:51.120 but I do wonder if Uber hadn't gone out first 0:06:51.320 --> 0:06:53.640 and kind of fallen a little bit on its face, 0:06:54.160 --> 0:06:56.720 would we work? We would the we work situation be 0:06:56.760 --> 0:06:58.640 a little bit different. I would point to remember Blue 0:06:58.680 --> 0:07:01.640 Apron from two years ago. That was a company again 0:07:02.240 --> 0:07:05.160 that once it went public, everybody was like, this company 0:07:05.200 --> 0:07:08.000 doesn't make sense, and then it had. It took a 0:07:08.080 --> 0:07:12.280 significant valuation haircut and has continued to decline precipitously. So 0:07:12.360 --> 0:07:14.920 that shows you that Uber wasn't the first time where 0:07:15.200 --> 0:07:20.040 public investors questioned UM, a highly touted company that had 0:07:20.040 --> 0:07:22.320 a lot of question works around its business model. Sure 0:07:22.360 --> 0:07:24.400 of it A thank you so much for the insight 0:07:24.440 --> 0:07:27.000 show over a Bloomberg opinion columnist joining us here in 0:07:27.040 --> 0:07:45.680 our interactive Brokers studios. We're joined by John Author's senior 0:07:45.800 --> 0:07:49.240 editor for Bloomberg Markets, and Culver Kadonna, chief US economists 0:07:49.240 --> 0:07:52.320 for Bloomberg Economics. So John, let's follow up on that 0:07:52.480 --> 0:07:55.960 wide ranging interview that Tom Keene and Jonathan Faroe just 0:07:56.040 --> 0:07:59.400 had with a former New York Fed chairman President John 0:07:59.600 --> 0:08:04.040 UM Bill Dudley. So key takeaways for you as it 0:08:04.120 --> 0:08:06.720 relates to some of his discussion about the report market. 0:08:06.720 --> 0:08:09.000 He seemed to be suggesting that kind of a short 0:08:09.120 --> 0:08:12.760 term issue, nothing major to be concerned about. Yes, I 0:08:12.800 --> 0:08:16.280 think he was definitely trying to do his bit to 0:08:16.640 --> 0:08:20.200 calm things down. I think it is interesting bearing in 0:08:20.280 --> 0:08:23.560 mind that there's been a lot of anger in the 0:08:23.640 --> 0:08:29.400 last week about the dismissal of all the early enforced 0:08:29.400 --> 0:08:32.240 early retirement of Simon Potter, who was very much regarded 0:08:32.240 --> 0:08:34.800 as Bill Dudley's man, and who is the guy who 0:08:34.840 --> 0:08:37.600 would have been in charge of dealing with the response 0:08:38.400 --> 0:08:42.199 last week, and who has been quoted. I don't think 0:08:42.240 --> 0:08:45.800 he wanted to be quoted publicly, but talked to be 0:08:45.920 --> 0:08:50.400 of a and Bloomberg gathered that the typing Potter has 0:08:50.440 --> 0:08:54.480 been making some criticisms of the way that the Fed 0:08:54.559 --> 0:08:57.000 has handled this, the new Fetters handled this, So I 0:08:57.000 --> 0:08:59.559 think he was going quite a long way out of 0:08:59.600 --> 0:09:03.719 his way to be to downplay the degree of conserve 0:09:03.559 --> 0:09:05.920 of criticism, the degree of anger that there has been 0:09:05.960 --> 0:09:09.760 in the market about about the New York Fed itself 0:09:09.920 --> 0:09:12.840 and its response, and whether there's been something wrong in 0:09:12.880 --> 0:09:16.079 the way that Williams has taken over from him. He's 0:09:16.120 --> 0:09:19.480 being diplomatic. That's that's a really interesting point. Carcadona also 0:09:19.559 --> 0:09:23.160 joining US GPS economist Karl what was your biggest takeaway? Well, 0:09:23.160 --> 0:09:25.120 I think it was important to see that he wasn't 0:09:25.160 --> 0:09:28.600 raising any red flags, because there is this notion that 0:09:28.679 --> 0:09:30.559 maybe the FED was you know, a day late and 0:09:30.600 --> 0:09:33.600 a dollar short to respond to the situation. But now 0:09:33.640 --> 0:09:37.400 things are well under control. So they did announce uh, 0:09:37.440 --> 0:09:41.559 you know, recurring operations extending beyond month end, plus a 0:09:41.760 --> 0:09:45.520 longer term operations. So that that really is taking a 0:09:45.880 --> 0:09:50.120 buzuka to the problem and should be a very solid 0:09:50.200 --> 0:09:53.800 temporary patch. What I was looking for in terms of 0:09:53.840 --> 0:09:57.040 a little bit more color was maybe some timing about 0:09:57.160 --> 0:10:01.320 when the balance sheet does start to grow again. Uh. 0:10:01.360 --> 0:10:03.800 And again we shouldn't call it QUWI. I wouldn't even 0:10:03.840 --> 0:10:09.880 call it QUI light, but an expansion of this point 0:10:10.480 --> 0:10:17.160 exactly prudent reserve management. When will prudent reserve pr When 0:10:17.160 --> 0:10:20.320 will PRM kick in? Uh? And that's going to have 0:10:20.320 --> 0:10:22.600 to happen relatively soon or we are going to see 0:10:22.600 --> 0:10:26.840 these funding strains extend through the latter half. Just understand, Carl, 0:10:26.920 --> 0:10:32.480 is this the permanent um fix for this repo issue. 0:10:32.679 --> 0:10:36.480 The permanent fix will be expanding the reserves over time 0:10:36.520 --> 0:10:39.520 that reserve management operation. What they're doing now is really 0:10:39.520 --> 0:10:42.160 a temporary patch and it should work. Right. Seventy five 0:10:42.160 --> 0:10:45.160 billions of repos on a on a daily basis should 0:10:45.480 --> 0:10:48.880 be enough to add to sufficient liquidity back into the system. 0:10:49.040 --> 0:10:51.880 They could certainly expand that if they needed to. Unlikely 0:10:52.160 --> 0:10:56.679 that that would actually become a problem. But the reality is, uh, 0:10:56.880 --> 0:11:00.439 relatively soon before year end, for sure, the FED is 0:11:00.480 --> 0:11:02.520 going to have to embark on this balance sheet expansion. 0:11:02.559 --> 0:11:06.080 And the reason for that is as the economy expands 0:11:06.640 --> 0:11:09.480 the banking system, banking system has to keep a pace 0:11:09.520 --> 0:11:11.840 with it, and that means that reserves have to grow 0:11:11.880 --> 0:11:14.800 along with economic growth. So I want to shift gears 0:11:14.840 --> 0:11:16.800 a little bit because I'll tell you what my biggest 0:11:16.840 --> 0:11:19.240 takeaway was. I thought that actually, probably one of the 0:11:19.240 --> 0:11:21.840 most interesting things that he said is that, uh, the 0:11:21.920 --> 0:11:26.680 risk is not necessarily right now looking like deflation. It's 0:11:26.720 --> 0:11:29.520 looking like he's seeing a little bit more of a 0:11:29.600 --> 0:11:32.880 pickup in inflationary trends. Not the risk, but that he's 0:11:32.880 --> 0:11:36.480 actually seeing the trend go in the opposite direction. And John, 0:11:36.640 --> 0:11:40.680 I thought that was interesting because it's kind of counter 0:11:41.000 --> 0:11:44.160 to what the market has been implying. It's drastically counter 0:11:44.240 --> 0:11:47.840 to what the market has been implying. I actually nervously 0:11:47.920 --> 0:11:51.920 took a quick look at the break Heavens Well allows 0:11:52.000 --> 0:11:54.000 minute and they're down again too. This, yes, that's what 0:11:54.080 --> 0:11:59.160 I'm saying. Last week's core CPN numbers. Okay, the Fed 0:11:59.240 --> 0:12:03.679 cares more about ec even core CPI, but they were up. 0:12:03.960 --> 0:12:05.640 They were the highest they've been, off the top of 0:12:05.679 --> 0:12:09.560 my head in a decade um. It does certainly look 0:12:09.640 --> 0:12:12.880 as though you're finally getting the feed through with about 0:12:12.920 --> 0:12:15.439 the kind of lag you would have expected from all 0:12:15.520 --> 0:12:18.120 the jolt of adrenaline that was that was delivered during 0:12:18.160 --> 0:12:21.560 the tax tax cutter for eighteen months or so ago. 0:12:21.920 --> 0:12:26.400 And that in turn does give you a very ample 0:12:26.480 --> 0:12:29.439 explanation for why the FED at this point is so 0:12:29.760 --> 0:12:33.319 in such a different place from the market. I think 0:12:33.880 --> 0:12:37.800 the other possibility, and this is one of the things 0:12:37.880 --> 0:12:41.360 that Powell arrived really trying to make a big signal 0:12:41.400 --> 0:12:44.160 that he was going to be different from his predecessors, 0:12:44.320 --> 0:12:48.000 is that he didn't buy that US monetary policy had 0:12:48.120 --> 0:12:50.120 as big an impact on the rest of the world 0:12:50.640 --> 0:12:55.000 as others had said. If you are looking at the 0:12:55.080 --> 0:12:57.880 rest of the planet, particularly the Eurozone, you are much 0:12:58.000 --> 0:13:01.320 more likely to be really worried about inflation then if 0:13:01.360 --> 0:13:04.240 you're just looking at the US, where it looks like 0:13:04.440 --> 0:13:08.440 we have a not by the comparison with the seventies 0:13:08.480 --> 0:13:11.480 and eighties. But we have a minor league inflation problem 0:13:11.679 --> 0:13:14.520 dreaming here, which suggests we shouldn't be cutting rights. So Carl, 0:13:14.600 --> 0:13:16.679 what do you think is it related as you know, 0:13:16.960 --> 0:13:19.160 just what John was saying about inflation, where we might 0:13:19.200 --> 0:13:21.880 be what we've experienced with the repo market in the 0:13:21.960 --> 0:13:24.680 last week. Where do you think the FED is right now? 0:13:24.800 --> 0:13:27.079 Is I think about the next level meetings? Sure? Well, 0:13:27.120 --> 0:13:30.560 I think the Fed is, And again Bill Dudley suggested 0:13:30.640 --> 0:13:33.000 there's not as much division on the committee as maybe 0:13:33.000 --> 0:13:35.680 looking at the dot plot would otherwise have You believe 0:13:36.280 --> 0:13:40.000 the Fed is very much looking at taking insurance out 0:13:40.120 --> 0:13:44.080 to extend a record long economic expansion, and that means 0:13:44.160 --> 0:13:48.000 that they're watching the trade negotiations very carefully. And if 0:13:48.080 --> 0:13:51.320 we do see a significant escalation of tariffs in mid 0:13:51.400 --> 0:13:55.680 October a scheduled and more follow through in December as scheduled, 0:13:55.720 --> 0:13:57.800 than the FEED is going to have to act more forcefully. 0:13:57.880 --> 0:14:01.079 So right now, even the as devish doves on the 0:14:01.120 --> 0:14:04.959 committee are signaling a willingness for just one additional high 0:14:05.000 --> 0:14:08.640 game where seven dots excuse me, cut, there were seven 0:14:08.720 --> 0:14:13.080 dots calling for a cut by year end. I think 0:14:13.240 --> 0:14:16.160 that that's going to continue to drift downward if we 0:14:16.280 --> 0:14:18.599 see those additional tariffs that come into play. And so 0:14:18.800 --> 0:14:21.360 my team's view is we'll see a rate cut in 0:14:21.440 --> 0:14:25.800 October and of October and another follow through in mid December, 0:14:25.960 --> 0:14:27.480 and we can look at what's happening in the market 0:14:27.520 --> 0:14:31.160 here right there was risk off in August, September was 0:14:31.160 --> 0:14:35.000 a little bit of renewed optimism, and now as October looms, 0:14:35.040 --> 0:14:37.480 it looks like we're going back into a risk off mode. 0:14:37.960 --> 0:14:41.880 Yields her down, and really the compelling issue for the 0:14:41.960 --> 0:14:44.880 Fed towards YR end is going to be a trade 0:14:45.000 --> 0:14:49.360 headwinds stiffening and also the FED having to cut further 0:14:49.520 --> 0:14:54.640 to uninvert the yield curve. So I'm just curious going forward. 0:14:54.960 --> 0:14:58.560 First of all, whether Bill Dudley has any impact on 0:14:58.640 --> 0:15:00.480 the Federal Reserve at this point in the fact he 0:15:00.600 --> 0:15:03.000 is no longer with it. I mean, how much do 0:15:03.520 --> 0:15:07.760 former FED members and leaders have on the current FED 0:15:08.080 --> 0:15:12.120 john It depends on which former leader it is, evidently, 0:15:12.120 --> 0:15:16.160 I think I think Stanley Fisher, who apart from anything else, 0:15:16.720 --> 0:15:20.240 wrote that, literally wrote the textbook that most current FED 0:15:20.320 --> 0:15:24.080 governors read when they did their original economics degrees. I 0:15:24.280 --> 0:15:26.840 read Dornbush and Fisher when I did my economics degree, 0:15:27.680 --> 0:15:31.760 as he's come out beginning to suggest that negative rates 0:15:31.920 --> 0:15:35.320 and helicopter money are things that can at least be considered. 0:15:36.120 --> 0:15:39.240 That makes which is not something I remember thinking was 0:15:39.280 --> 0:15:43.160 even remotely a possibility from my reading of the Dornbush 0:15:43.200 --> 0:15:46.400 and Fisher all those years ago. That that's very influential 0:15:46.520 --> 0:15:49.360 he's beginning to create give them permission to go to 0:15:49.440 --> 0:15:52.360 a space that they didn't really previously. Intellect would be 0:15:52.400 --> 0:15:56.160 like a go, But that's Stan Fisher. Bill Dudley, I 0:15:56.320 --> 0:16:00.480 doubt is as influential as Stan Fisher. That's said, the 0:16:00.600 --> 0:16:06.200 New York Fed is unquestionably first among equals. The New 0:16:06.280 --> 0:16:09.720 York Fed governor is always on, gets to vote in 0:16:09.760 --> 0:16:13.240 the f O m C. The New York Fed always 0:16:13.560 --> 0:16:17.800 votes with the governor. Paul Volker moved to the move 0:16:17.920 --> 0:16:20.360 to the big the hot seat from being from running 0:16:20.400 --> 0:16:23.720 the New York Fed. Previous New York Fed governors do 0:16:23.920 --> 0:16:30.440 matter more. Um final point, I it's very unusual. It 0:16:30.560 --> 0:16:34.160 was very unusual to see the Fed itself really feel 0:16:34.160 --> 0:16:37.880 the need to say no, this is wrong, to build 0:16:37.920 --> 0:16:42.840 Dudley's original um op ed for Bloomberg Opinion, which we 0:16:42.920 --> 0:16:46.680 are delighted he wrote for us, We're very happy chose 0:16:46.760 --> 0:16:49.280 us as and we were delighted to continue that that 0:16:49.400 --> 0:16:53.280 relationship that he built, built it that he foster debate 0:16:53.320 --> 0:16:56.680 through us. But it was quite interesting that they really 0:16:56.720 --> 0:16:58.760 did say, no, we don't agree with our former New 0:16:58.840 --> 0:17:02.600 York Cha just being onto what John said there. Uh 0:17:02.840 --> 0:17:04.760 you know, I think there was an important, too too 0:17:04.800 --> 0:17:08.920 important observation, so one as a uh relates to the 0:17:09.119 --> 0:17:12.360 ongoing situation in the repo market. I think that Bill 0:17:12.440 --> 0:17:16.280 Dudley has tremendous way because the Dudley Potter fed you know, 0:17:16.520 --> 0:17:19.600 was there during the crisis and really understands how these 0:17:19.680 --> 0:17:22.280 things operate. And uh, you know, he was way out 0:17:22.280 --> 0:17:25.560 in front talking about banks, you know, the reserves being 0:17:25.640 --> 0:17:28.400 at a higher level post crisis and where we were 0:17:28.920 --> 0:17:31.560 pre crisis. So number one, he has tremendous authority on 0:17:31.640 --> 0:17:35.000 that front. In number two, he did throw negative rates 0:17:35.080 --> 0:17:36.960 under the bus, and he's the discussion. The hurdle is 0:17:37.160 --> 0:17:40.119 very very that will definitely get to that CARCA down 0:17:40.160 --> 0:17:42.959 in chief you as economist at a later conversation. Unfortunately, 0:17:43.040 --> 0:17:44.359 thank you so much for being with us, and of 0:17:44.440 --> 0:17:47.840 course our sincere thanks John Author, senior editor for a 0:17:47.920 --> 0:17:51.320 Bloomberg Market's both joining us in our interactive broker studios. 0:18:07.359 --> 0:18:10.879 In this current era of technology, it really is the 0:18:10.920 --> 0:18:13.520 STEM careers that are in the front and center that 0:18:13.600 --> 0:18:17.600 are most needed as well as often has paid. There 0:18:17.680 --> 0:18:20.440 is a question why are there so few women who 0:18:20.480 --> 0:18:22.639 are entering the field? Joining us down to discuss this, 0:18:22.760 --> 0:18:26.399 Corliss Murray, senior vice president, head of Engineering at Abbot 0:18:27.200 --> 0:18:30.600 based in Chicago, to talk about a new blueprint that 0:18:30.720 --> 0:18:33.960 they have come up with to get more girls into 0:18:34.320 --> 0:18:37.600 the STEM field. Before we get started on that, though, Corless, 0:18:37.600 --> 0:18:39.280 can you just give us a sense of what it 0:18:39.359 --> 0:18:41.760 means to be senior vice president and head of Engineering 0:18:41.800 --> 0:18:44.800 at Abbott. Yes, Lisa, and thank you so much for 0:18:44.880 --> 0:18:47.879 the opportunity to to speak to your audience today. UM. 0:18:48.400 --> 0:18:54.000 I'm responsible for UM, the corporate quality, engineering and regulatory organizations, 0:18:54.080 --> 0:18:58.159 and our team supports all of Abbott's businesses worldwide and 0:18:58.320 --> 0:19:01.479 we do that through a number of for such as UM. 0:19:01.640 --> 0:19:04.560 It could be everything from structural and architectural support to 0:19:04.760 --> 0:19:09.840 special technical areas including governance of quality policies and procedures 0:19:10.200 --> 0:19:13.879 and regulatory strategy. So let's gives a sense you know, 0:19:13.960 --> 0:19:17.560 we we know the numbers in terms of women in 0:19:17.680 --> 0:19:21.360 STEM underrepresented. Gives a sense of kind of what Abbott 0:19:21.680 --> 0:19:24.240 is thinking about in terms of its blueprint for you know, 0:19:24.359 --> 0:19:29.199 getting young women involved in STEM. Well, I think one 0:19:29.240 --> 0:19:31.520 of the things that we have found very consistently and 0:19:31.680 --> 0:19:34.240 it lines up what other research that has been conducted, 0:19:34.720 --> 0:19:37.480 and that is that many, as not most, girls don't 0:19:37.640 --> 0:19:40.800 enter these fields because of lack of exposure and lack 0:19:40.880 --> 0:19:44.040 of role models and encouragement. And so for us, being 0:19:44.119 --> 0:19:47.320 a science based company, it is essential for us to 0:19:47.520 --> 0:19:51.280 be able to bring women to help with the diversity 0:19:51.359 --> 0:19:54.840 of ideas and innovation as well as representing the markets 0:19:54.880 --> 0:19:58.840 quite frankly in which we operate UM. And so it's 0:19:59.200 --> 0:20:01.040 it's a part of our foundation and a part of 0:20:01.080 --> 0:20:04.280 our talent focus UM at all levels the new organization. 0:20:04.440 --> 0:20:06.680 And so, but you have to begin with building that 0:20:06.840 --> 0:20:10.359 pipeline and making certain that we're reaching these young women 0:20:10.520 --> 0:20:12.760 early in life UM, so that they can get a 0:20:12.840 --> 0:20:14.720 feel for what it is that that they can do 0:20:14.960 --> 0:20:18.000 as far as their careers may go. Okay, so this 0:20:18.119 --> 0:20:20.000 has been a big question which is how do you 0:20:20.119 --> 0:20:22.040 exactly counter and the idea that you came up with 0:20:22.119 --> 0:20:27.600 a blueprint a detailed playbook for successful high school girls 0:20:27.720 --> 0:20:30.560 going into an internship program. Can you give a sense 0:20:30.760 --> 0:20:35.160 of what the playbook is? So the playbook is actually 0:20:35.359 --> 0:20:38.720 UM built similar off our college intern program. And and 0:20:38.800 --> 0:20:42.840 what we do is we work with based on criteria 0:20:42.920 --> 0:20:45.040 to select students to come into the program. We work 0:20:45.080 --> 0:20:48.480 with high schools that UH they have curriculums that are 0:20:48.520 --> 0:20:51.879 Project Lead the Way or the International Baculide Program, and 0:20:52.040 --> 0:20:55.000 these are programs that UM would make sure that these 0:20:55.080 --> 0:20:57.560 young people are getting some of the higher advanced levels 0:20:57.600 --> 0:21:01.320 of science and math exposure. UM. We then take that 0:21:01.680 --> 0:21:05.280 bring it into our organization and work with assignment managers. 0:21:05.320 --> 0:21:09.720 Assignment managers or individuals that actually work in the professions 0:21:09.960 --> 0:21:12.200 UM day in and day out. So they could be 0:21:12.320 --> 0:21:17.200 cybersecurity experts, they could be UM, you know, mechanical engineers, architects, 0:21:17.320 --> 0:21:21.399 civil engineers and electrical engineers, biomedical engineers. And then we 0:21:21.680 --> 0:21:26.320 actually develop assignments that are real projects that are done 0:21:26.400 --> 0:21:30.399 by these engineers and others like them. And we create 0:21:30.480 --> 0:21:32.680 these assignments for the students and we expose them to 0:21:32.800 --> 0:21:36.120 it and the blueprint goes into a lot of detail 0:21:36.359 --> 0:21:39.080 on everything around how to work and pardner with a 0:21:39.160 --> 0:21:42.760 school to how to work and identify assignments to what 0:21:42.960 --> 0:21:46.400 we call an intern week where they're exposed to other 0:21:46.560 --> 0:21:50.960 things such as how to conduct yourself in a professional environment, um, 0:21:51.440 --> 0:21:54.359 you know, basic business ethics and things of that nature, 0:21:54.960 --> 0:21:58.480 so that they're well rounded. So court less um Abbott 0:21:58.560 --> 0:22:01.200 that is a you know, it's a glow little healthcare company. 0:22:01.240 --> 0:22:06.119 I'm sure lots of demand for engineering math type folks 0:22:06.359 --> 0:22:09.320 at your company. How do you go about at Abbott 0:22:09.359 --> 0:22:11.920 trying to ensure that you attract the best and brightest 0:22:12.320 --> 0:22:14.560 uh and and you know, get a fair representation in 0:22:14.640 --> 0:22:16.760 your workforce. And I know, I'm sure a lot of 0:22:16.800 --> 0:22:19.919 these jobs that you have are very important and uh 0:22:20.280 --> 0:22:24.680 but define you getting the right talent. We are getting 0:22:24.680 --> 0:22:27.399 the right talent and we are a company that people 0:22:28.040 --> 0:22:29.880 want to be a part of. You know when when 0:22:29.960 --> 0:22:32.920 you look at not only the technical work that we do, 0:22:33.040 --> 0:22:36.000 but you look at the environment that we have where 0:22:36.119 --> 0:22:39.760 we've been recognized for you know, being working mothers, working women, 0:22:40.480 --> 0:22:43.720 be at you know, scientists, you know, UM innovation. We've 0:22:43.720 --> 0:22:46.720 been recognized on a lot of different venues. And so 0:22:47.080 --> 0:22:51.919 when you combine UM the total environment along with an 0:22:52.000 --> 0:22:56.840 environment that encourages development of people. UM, these young people, 0:22:56.880 --> 0:22:59.800 we find they're excited about the technologies that we create. 0:23:00.320 --> 0:23:03.000 They're excited about the people that they work with. Because 0:23:03.359 --> 0:23:06.040 the mentors and the assignment managers that work with them 0:23:06.680 --> 0:23:09.920 love developing others and and they want these young people 0:23:09.960 --> 0:23:12.879 to be successful, and they're excited to share their professions 0:23:12.920 --> 0:23:15.600 with them and help them to have a better indication 0:23:15.720 --> 0:23:18.440 of what they potentially could do. So I think that 0:23:18.800 --> 0:23:22.600 Abbott creates a holistic environment where people want to be 0:23:22.680 --> 0:23:25.440 a part of our organization so we get our fair 0:23:25.520 --> 0:23:28.280