Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, ol Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. All right, let's get you going,
Speaker 1: because we've got some serious stories also going on as
Speaker 1: we watched that hurricane bearing down, uh certainly on the
Speaker 1: golf right now. So let's start things off with the
Speaker 1: check on the trading day and Charlie Palin, Hi, thank
Speaker 1: you very much. Indeed, category four hurricane. Now we've got
Speaker 1: the dal the SMPNZDAC at or near best level of
Speaker 1: the day. In fact, we are looking at records for
Speaker 1: in a row now for the SMPN nastac. Let's get
Speaker 1: right to the numbers. SMP up thirty that is a
Speaker 1: gain of nine tenths of one percent. That now is
Speaker 1: up thirty four points, now hard by one tenth of
Speaker 1: one percent. Now the stack is up one hundred and
Speaker 1: eighty seven points, up one point six percent year today
Speaker 1: column on the Bloomberg up twenty nine point nine percent,
Speaker 1: ten year yield point six eight percent. Gold is up
Speaker 1: one percent seven ounce and West Texas Enemedia crude oil
Speaker 1: now up three tenths of one percent forty three forty barrel.
Speaker 1: I'm Charlie Pellot. That is a Bloomberg business flash. All right, Charlie,
Speaker 1: thanks so much. You are listening to Bloomberg Business Week.
Speaker 1: This portion brought you by Commonwealth Financial Network. Be the
Speaker 1: independent advisor you've always wanted to be with all the
Speaker 1: support you need to get there. Visit common Wealth dot
Speaker 1: com to learn more. And we got to set the
Speaker 1: Business week agenda, Harold, because you mentioned that market woa.
Speaker 1: I mean it is something to behold. Given all the headlines,
Speaker 1: you run down the most read as we often do,
Speaker 1: and you just think, oh okay, so stocks are up cool, alright, great, um, yeah,
Speaker 1: let's check in with our team if we can. We've
Speaker 1: got them assembled in the great state of New Jersey.
Speaker 1: Talking about Gina Martin Adams, chief equity strategist for Bloomberg Intelligence,
Speaker 1: on the phone from New Jersey. Also there Dave Wilson,
Speaker 1: Stocks Editor, author of the chart and stock of the Day.
Speaker 1: So Gina, help us understand this market. And maybe it's
Speaker 1: just these Tex stocks, but I have to think it's
Speaker 1: more than that. With this drive higher, I you know,
Speaker 1: I think it's more confirmation that monetary policy is going
Speaker 1: to remain extremely accommodative for a very long period of time.
Speaker 1: And frankly, that's been the driver from my perspective. That's
Speaker 1: been the driver since March and it really hasn't changed.
Speaker 1: You get a little bit of UM, greater optimism that
Speaker 1: we probably will experience economic recovery which will lead to
Speaker 1: bigger earnings recovery into eleven. On top of that confidence
Speaker 1: of monetary policy remaining extremely accommodative, and nowhere else to
Speaker 1: go but stocks. You've got to be willing to take
Speaker 1: a little bit of risk, utilize the liquidity to put
Speaker 1: that money to work when rates are at zero UM,
Speaker 1: and so stocks are kind of the sweet spot and
Speaker 1: I think that the market is reflecting that. You know,
Speaker 1: the other thing I think is that this idea that
Speaker 1: this is a one sided, one trade market in favor
Speaker 1: of thanks is completely overstated. Actually interesting, the data of
Speaker 1: stocks in the SPI trading above their fifty day moving average, rights,
Speaker 1: they're trading above their two hunter day moving ever. So
Speaker 1: it's blood big. Guys are big, and they keep getting bigger.
Speaker 1: But there's a decent amount of breaths here. That's I
Speaker 1: think a really really really really good point. And I
Speaker 1: also go back to what you said, well, Chause, Gina
Speaker 1: deserves a lot of realities. But the point is also,
Speaker 1: you know, we're going to talk about j Powell and
Speaker 1: the upcoming Jackson Hole meeting. I mean, the expectations are
Speaker 1: that the you know, we're gonna have zero rates for
Speaker 1: a long time, So, Gina, people are going to increasingly
Speaker 1: be looking for yield, and that is going to take
Speaker 1: you off into the stock market. Yeah, you've got to
Speaker 1: find it somewhere. And with spreads tight, with yields across
Speaker 1: the treasury curve incredibly low, with even emerging market debt
Speaker 1: has rallied, there's just not a lot of opportunity. Um
Speaker 1: for places to put your cash, but none. Nonetheless, you
Speaker 1: don't want to put it in zero percent earning money
Speaker 1: market funds, So there there definitely is an incentive to
Speaker 1: take on some degree of risk. Now, I would not
Speaker 1: go so far as to say that there's evident tremendous
Speaker 1: risk tolerance out there right. If there were, then we
Speaker 1: would see not necessarily the big defensive tech stocks and
Speaker 1: healthcare stocks and communication stocks leading to the extent that
Speaker 1: they are. We would see some of the value stocks
Speaker 1: starting to really show some leadership. So we haven't even
Speaker 1: seen that in great scale. That could be what's next
Speaker 1: to drive us even higher if we can get some
Speaker 1: economic momentum while the fit's so easy. All right, Dave Wilson,
Speaker 1: what's on your mind today? What are you seeing that's
Speaker 1: new and interesting, either with specific names or things that
Speaker 1: are driving them market that may not be obvious to
Speaker 1: mere mortals like us. Well, you know, we've already brought
Speaker 1: up the fang stocks, and boy, you see three out
Speaker 1: of the four among the day's best performers in the
Speaker 1: S and P five hundred. You know, there's Facebook, which
Speaker 1: is up almost seven percent, even though they're talking about
Speaker 1: how changes to Apple's operating system for iPhones and if
Speaker 1: iPads going to hurt their advertising network, and of course
Speaker 1: that's where the revenue comes from. A Facebook. You know,
Speaker 1: you've got Amazon dot Com up about three another day,
Speaker 1: another adventure for that online retailer, or so it seems.
Speaker 1: And then you know you have Netflix and their name
Speaker 1: is being tossed about as a potential bidder, uh for TikTok.
Speaker 1: Now whether that happens or not, who the heck knows. Uh,
Speaker 1: it looks like they've kind of backed away from that possibility,
Speaker 1: and Netflix is up ten a percent and they all
Speaker 1: kind of take a backseat to Salesforce dot Com today,
Speaker 1: which you know, if it were next week and the
Speaker 1: company was into down Jones Industrial Average, it would be
Speaker 1: given a serious lift to the town. It's up more
Speaker 1: than twenty in the wake of its earnings. Yeah, that's
Speaker 1: a big bit. You know. It was interesting to talk
Speaker 1: to Nico Grant about the Salesforces move into the TAO
Speaker 1: and I was like, so, how big of a deal
Speaker 1: is this. He's like, this is a huge deal. This
Speaker 1: is a massive deal in part about what it says
Speaker 1: about the company, but in part what it says about
Speaker 1: the space that they're playing in who they're replacing, like
Speaker 1: the power of that company and how big it's scotten
Speaker 1: and how influential it's gotten over time. All right, Dave Wilson,
Speaker 1: quick tease for the chart of the day. Oh, you know,
Speaker 1: look at what's going on with the SMP. You think
Speaker 1: it's all about the mega cab companies, you know, the
Speaker 1: things we've already talked about them. That group has years
Speaker 1: right just to overcome and I'll show that with the chart.
Speaker 1: All right, Thank you both so much. Dave Wilson will
Speaker 1: catch up with you a little bit later at Gina
Speaker 1: Martin Adams. Thank you so much. From it was so
Speaker 1: important because we keep talking about it's all the tech.
Speaker 1: It's all on the tech, but we need to think
Speaker 1: about what else it's in. I might say it's really really,
Speaker 1: really really important. You would, just because an I did.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. You know, we've been talking
Speaker 1: a bit about vaccines, but we also know that testing
Speaker 1: is huge. It's it's huge, especially as we think about
Speaker 1: getting back to something resembling normal life. Whatever this next
Speaker 1: normal is going to be we're lucky to have with this.
Speaker 1: Ali Dovar excuse me, Ali, am I pronouncing your name right.
Speaker 1: That's great, Yeah, that's perfect. Thank you good co founder
Speaker 1: of Atlas. I d joining us on the phone from Vancouver. So, Ali,
Speaker 1: tell us exactly about what you're doing, because rapid testing
Speaker 1: and getting tested in in all aspects so important right now. Yeah,
Speaker 1: I mean testing the broad category and rappid testing is
Speaker 1: part of it. Um. What we're doing right now is
Speaker 1: we're trying to help employers essentially get connected with testing
Speaker 1: capacity and actually do virtual health checks on employees that
Speaker 1: need to come back to work. That includes like coordinating
Speaker 1: testing and also helping facilitate that they get delivery times
Speaker 1: turn around times such that the testings look useful. So
Speaker 1: tell us about your role in all of this, because
Speaker 1: I think this is such a big part of it.
Speaker 1: I can't tell you how many times where somebody's like,
Speaker 1: you've got to get a test, but this place tells
Speaker 1: me it's going to take you know, two weeks. How
Speaker 1: useful is that this place is gonna take me a
Speaker 1: couple of days. Tell me a little bit about your
Speaker 1: role in all of this, because you guys are not
Speaker 1: in the testing business, but you are helping others, other companies,
Speaker 1: other employers facilitate testing, which we know is so crucial
Speaker 1: to where we are right now and really trying to
Speaker 1: help us all get back to maybe normal, maybe get
Speaker 1: back to work, get back to some things, get back
Speaker 1: to school, and all of those things. So what exactly
Speaker 1: do you guys do? Yeah, essentially, we're facilitating uh, these
Speaker 1: smaller and medium sized business is that need to get
Speaker 1: employees back to work to do testing. So that's a
Speaker 1: real coordination challenge, that's a real facilitation challenge, and making
Speaker 1: sure that they get access to the laboratories out there
Speaker 1: that have the capacity to test. So really, you know,
Speaker 1: the big labs are really uh caught up on public
Speaker 1: testing and the capacities already sort of add its limit there.
Speaker 1: But there's these smaller labs that have capacity and will
Speaker 1: come online um if they have visibility and are able
Speaker 1: to connect to the employers. So it's a bit of
Speaker 1: a matching problem. So we're the coordinator in between, and
Speaker 1: we're making sure that this kind of this testing gets
Speaker 1: to the employers that need it. And so tell us
Speaker 1: about the demand from employers because I know we're looking
Speaker 1: at a fall where people are, at least in New
Speaker 1: York City and certainly elsewhere trying to get people back in.
Speaker 1: How much do you worry about demand versus supply, both
Speaker 1: supply of tests but also supply of essentially evaluating those tests. Yeah,
Speaker 1: we went on in the evaluation business. We let the
Speaker 1: FDA do that. So I mean, sorry, I mean, not
Speaker 1: the value. I mean just basically like the processing of tests,
Speaker 1: That's what I mean. Sorry, Yeah, absolutely, yeah, So I
Speaker 1: mean demand is gonna spike, I think on all fronts
Speaker 1: because that we're approaching the influence of season. But at
Speaker 1: the same time, we're seeing employers get visibility into the
Speaker 1: consequences is not testing, so they're looking across at other employers,
Speaker 1: you know, seeing what happens when an outbreak happens, and
Speaker 1: that means shutting down the business of liability around that.
Speaker 1: And just the nature of this disease is, you know
Speaker 1: it you can be asymptomatic and spread so that that
Speaker 1: that happens in about cases and the workplace is one
Speaker 1: of those places where you you're really you're you're liable
Speaker 1: to have a real outbreak, So it's it's a real problem.
Speaker 1: So how much is your business change because of the virus. Well,
Speaker 1: we have developed a deep technology and we've been working
Speaker 1: on it for a while. What we've done, it's essentially
Speaker 1: utilized this technology to serve as this platform so the
Speaker 1: data is more private and secure and also facilitates this
Speaker 1: matching to happen. So a lot of these smaller labs
Speaker 1: don't really have the technology to deliver the credential, the
Speaker 1: test results, and eventually the vaccines in a way that
Speaker 1: employers might want to utilize it. So that means like,
Speaker 1: so we have film and TV customers that we put
Speaker 1: set up checkpoints zones. We have manufacturers that need to
Speaker 1: display this credential of testing or that as vaccine as
Speaker 1: that they may come to partners on site. There's all
Speaker 1: these use cases for employers to use this that these
Speaker 1: labs are really not set up to meet. Well there's
Speaker 1: some an email for instance, right, or are they sort
Speaker 1: of spreadsheet that's just not that's not out. That's how
Speaker 1: the nature of this problem. So we really are facilitating
Speaker 1: them getting connected and delivering that data in a way
Speaker 1: that's useful for employers. Yeah, Ali, this actually feeds into
Speaker 1: something Jason, I've had lots of conversations. I mean this
Speaker 1: whole idea of testing and tracing, but just testing. You know,
Speaker 1: when you think about the schools and colleges that we've
Speaker 1: talked to, it's about doing multiple tests, you know, or
Speaker 1: testing several times a day or several times a week
Speaker 1: to make sure you know communities are safe. Ali, thank
Speaker 1: you so much for checking in with us and letting
Speaker 1: us know what you guys are up to. He's the
Speaker 1: co founder of Atlas I d Ali Davar. You're listening
Speaker 1: to Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: on Bloomberg Radio. Let's get right to this story. Scott
Speaker 1: to Vote. I was so fortunate to just ride along
Speaker 1: with him, sort of like I ride along with you, Carol,
Speaker 1: you know, and just enjoy the good work that's being done.
Speaker 1: I did the same with Scott to Vote this week
Speaker 1: deals reporters so much more for Bloomberg answering the question
Speaker 1: so many had Scott about where Mark Karney was going
Speaker 1: to end up. Brooke feel winning the sweepstakes. This is
Speaker 1: a big higher. Yeah. I think he's probably the most
Speaker 1: coveted guy that was out there, you know, um in
Speaker 1: the early part of the year, at least for Business
Speaker 1: and politics. UM, there's been plenty of rumors swirling around. UM.
Speaker 1: You know, in particular after our colleagues broke that uh
Speaker 1: he was he was doing an informal role with the
Speaker 1: Prime Minister of Canada, you know, helping with the plan
Speaker 1: to recover from COVID. UM. People started thinking that maybe
Speaker 1: he would replace the outgoing finance minister, but obviously that
Speaker 1: did not take place. I mean this is so what
Speaker 1: does this do for him? What does this do? Um
Speaker 1: for the private equity firm Brookfield. So I guess the
Speaker 1: big thing will be that he is going to lead
Speaker 1: a new initiative to basically build a new stilo for
Speaker 1: Brookfield that will do E s G investing, so focusing
Speaker 1: on environmental, social and governance issues. UM. And you know
Speaker 1: Brookfield has basic for stylos right now in renewable energy, infrastructure,
Speaker 1: property and they have a private equity arm. So the
Speaker 1: idea would be too, he's going to oversee this new
Speaker 1: vertical for Brookfield UM. And they think it's going to
Speaker 1: be you know, as big as any of the other verticals,
Speaker 1: which ranged from fifty billion to eight six billion. I
Speaker 1: believe in assets under management UM. And so more importantly,
Speaker 1: I think. Um. What Mark told us Jason and I
Speaker 1: yesterday was that um he was, uh, you know, looking
Speaker 1: for something where he could marry some of his passions. Um.
Speaker 1: You know he's been a big climate change um you know,
Speaker 1: um proponent and also for businesses. Uh that aren't you know,
Speaker 1: getting on this climate change and initiative he's been you know,
Speaker 1: quite critical of So he'll be able to do both. Yeah,
Speaker 1: I mean, Scott, what struck me as you and I
Speaker 1: were catch ing up with Mark Karney and Bruce flat
Speaker 1: the sea of Brookfield esterday and sort of understanding what
Speaker 1: was behind all this really was the size of the opportunity.
Speaker 1: And one of the things that you and I and
Speaker 1: Carol have all learned and watching this business over the
Speaker 1: past few years is that the scale and the ability
Speaker 1: to do really big things matters. And that's what's ultimately
Speaker 1: and I was glad that you really pushed this to
Speaker 1: the fore in the story too. That is what has
Speaker 1: made Brookfield so competitive and now really only second to
Speaker 1: Blackstone when it comes to the world of alternative assets.
Speaker 1: Big investors are looking for investors who can put lots
Speaker 1: of money to work, and that doesn't exist in this
Speaker 1: space right now. When it comes to E s G. Yeah,
Speaker 1: I agree. I think that was one of the things
Speaker 1: that jumped out at me. I think Bruce Flatt said
Speaker 1: something along the lines of, you know, in terms of
Speaker 1: the kind of funds that they're thinking of raising, there's
Speaker 1: only been a counter fifteen billion raised globally at UH
Speaker 1: for similar funds, and he thinks it's hundreds of billions
Speaker 1: of dollars sitting on the sidelines looking for something like this. Yeah.
Speaker 1: I do wonder if like we're at, you know, a
Speaker 1: turning point. Scott Jason and I've talked about this, but
Speaker 1: when it comes to E s G, I do feel like,
Speaker 1: all of a sudden, you know, some of these bigger players,
Speaker 1: these all asset type investors to are just looking at
Speaker 1: E s G in a very different way and really
Speaker 1: kind of like E s G has grown up. Yeah.
Speaker 1: I think that's probably true because if you think about um,
Speaker 1: you know, the constituents of you know, the pension signs
Speaker 1: and um you know even you know, even some of
Speaker 1: the big asset managers, UM. You think about who's who's
Speaker 1: putting their money into these kind of um UH funds
Speaker 1: that Brookfield would be raising, and these people are people
Speaker 1: that have been you know, pounding the pavement about you know,
Speaker 1: needing to fix social issues, environmental issues, and they want
Speaker 1: to put their money where they can trust um that
Speaker 1: they'll you know, they'll be getting a good return, but
Speaker 1: they'll also be doing good generally for you know, the
Speaker 1: modern society. A lot of these implications. If you don't
Speaker 1: now whether it's legal total, it's the impact. Like you,
Speaker 1: you know, you can cost your company a lot of
Speaker 1: money by not um falling in line with this stuff.
Speaker 1: So cool. Good to work with you on this one.
Speaker 1: Scott to Vote Deal's reporter for Bloomberg, breaking the news
Speaker 1: that Mark Karney's going to Brookfield. I have to say, Carol,
Speaker 1: I have to think that Steve Schwartz and Henry Kravits
Speaker 1: and others are like book Field. They got him. You
Speaker 1: are listening to Bloomberg Business Week, Jason Kelly and Carol Masser. Well,
Speaker 1: this next story, it takes us to Mexico, but by
Speaker 1: way of London, because that's where we find one of
Speaker 1: the reporters involved in this Camp Simpson News Projects and
Speaker 1: Investigations reporter for Bloomberg. We find him in London, along
Speaker 1: with in Massachusetts Joel Webber, the editor of Bloomberg Business Week,
Speaker 1: all about a story the US drug crisis is made
Speaker 1: in Mexico with American raw materials, Joel I have to say,
Speaker 1: this story is really I don't know what any other ways,
Speaker 1: it's really disturbing, super disturbing. And tons of credit to
Speaker 1: Cam for really sticking through this. Uh, he's been working
Speaker 1: on it for a long time, which I'm sure he
Speaker 1: can tell us all about. But you know, the main
Speaker 1: thing here is, you know, obviously we're in the middle
Speaker 1: of a pandemic, and we've just done vaccine issues, and
Speaker 1: that's a story that you know, we're I think is
Speaker 1: is here and now. But let's not forget that there's
Speaker 1: this unfolding epidemic that's been going on for more than
Speaker 1: a decade now, involving heroin and meth and the and
Speaker 1: the kind of the most salacious thing that Cam's discovered
Speaker 1: in his reporting is that US companies, um one of
Speaker 1: which is publicly traded, are actually making the raw ingredients
Speaker 1: that Mexican cartels are exploiting in Mexico. You can't they
Speaker 1: can't obviously make them in the US, but they can
Speaker 1: make them, uh, their subsidiaries can make them in Mexico.
Speaker 1: That's where they've been rated stolen there in jugs. They
Speaker 1: can actually just be bought over the counter even and
Speaker 1: those are fueling base weekly this ongoing epidemic. Cam. How
Speaker 1: did you find out about this story and and what
Speaker 1: what makes you so frustrated about it? Yeah? Thanks, jo
Speaker 1: Um Gosh. Well, you know, the space that I've worked
Speaker 1: in for the last couple of decades is sort of
Speaker 1: the blind spots created by globalization and you know, transnational
Speaker 1: illicit trade. All kinds of things happen, you know, especially
Speaker 1: with corporations in these blind spots, whether it's human trafficking
Speaker 1: or whatever is in your supply chain that that you
Speaker 1: don't want to look at. And I think probably about gosh,
Speaker 1: it's been probably about eight years ago I read a
Speaker 1: journal article about the trafficking in this this chemical, So
Speaker 1: you have all the heroine that's ever been made in
Speaker 1: the world has been made with a single chemical. It's
Speaker 1: required to make heroin. It's called a cetic and hydride.
Speaker 1: When it was initially discovered in eighteen seventy four by
Speaker 1: an English chemist, he did it with this chemical called
Speaker 1: acetic and hydride, and so it's it's for the last
Speaker 1: twenty years been the heavenly regulated products. You can imagine
Speaker 1: in the international trade under international drug laws pushed by
Speaker 1: the US all over the world, it's incredibly restricted, and
Speaker 1: you know, I read about in Afghanistan it's completely illegal.
Speaker 1: It's a crime to even have a leader of this
Speaker 1: chemical because there's no legitimate ustward in the country and
Speaker 1: it's all based on smuggling the entire market there. And then,
Speaker 1: you know, come about two thousand and seventeen, when I
Speaker 1: realized from my post here in London where I do
Speaker 1: work on international stories, that that there was this horrible
Speaker 1: heroin crisis in the US that had really kind of
Speaker 1: moved in on the prescription opioid epidemic. After prescription opioids
Speaker 1: were made harder to get, you know, through reformulation, there's
Speaker 1: been almost a one to one replacement in terms of
Speaker 1: overdose deaths from heroins to the Mexican cartels really moved
Speaker 1: in quickly and quite silently. I don't think people realized
Speaker 1: how much their production was growing, you know, four or fivefold,
Speaker 1: along with a four fivefold increase in overdose desks over
Speaker 1: just you know, a very few years, and it kind
Speaker 1: of clicked in my head that I had studied this
Speaker 1: issue a little bit in the past, and I thought, well,
Speaker 1: that's interesting. I wonder how they're getting all the ascetic
Speaker 1: and hybride that they need to make that heroin. And
Speaker 1: it turns out it was completely effectively totally unregulated in Mexico,
Speaker 1: and the market there, the supply is totally incompletely dominated
Speaker 1: by US companies. As Joel said, they operate through subsidiaries
Speaker 1: in Mexico, so they're effectively insulated from the international drug
Speaker 1: laws and really tough US drug laws that deal with
Speaker 1: the same chemicals that have been around for you know,
Speaker 1: for three decades, and and no oversight obviously, um from
Speaker 1: US officials. So it's kind of greening this weird, surreal
Speaker 1: free market in Mexico. That's where it's fueling the entire
Speaker 1: US epidemic, and heroin and meth uh in this chemical
Speaker 1: and a pretty lax environment and others. They're even you know,
Speaker 1: quite strictly controlled at least by Mexican standards. UM. So
Speaker 1: that was really was really the basis, Tim, what's the
Speaker 1: role of tobacco companies and all of this. It's really
Speaker 1: interesting that you asked that, Carol, so I think probably, um,
Speaker 1: you know, by far, the biggest use of this chemical
Speaker 1: ascetic and hydrides throughout history has to been maked has
Speaker 1: been to make cigarette filters. And the companies that dominate
Speaker 1: the market globally and also dominate the industrial market for
Speaker 1: it in Mexico. You know, they're largest source of revenues
Speaker 1: over the years, and they're they're all publicly listed actually
Speaker 1: selling East and Eastman. Their largest source of revenue by
Speaker 1: far and away has been making cigarettes hilters. So they
Speaker 1: have they have the vertically integrated supply chain. They make
Speaker 1: the chemical, they use it to make filters, and then
Speaker 1: they sell excess in the market to to other customers
Speaker 1: for other uses. And so I think in the very
Speaker 1: beginning when the US the CIA made a discovery in
Speaker 1: seven that was really embarrassing to the chemical industry. They
Speaker 1: found that of the chemicals that were making Colombian cocaine,
Speaker 1: cocaine from Latin America were exported there by US company
Speaker 1: and these companies that and known honor system before that.
Speaker 1: And then Congress was kind of like that that we've
Speaker 1: had enough of this, and they amended the Drug Blow
Speaker 1: to really clamped down on this trade. And but you know,
Speaker 1: there's always from the beginning onto the US law been
Speaker 1: this really light touch regulation of a scetic and hydride.
Speaker 1: But I think just sort of survived as a default
Speaker 1: in Mexico long after, you know, the laws just about
Speaker 1: everywhere else changed. The international drug laws again were updated
Speaker 1: in two thousand one, and this was made the top
Speaker 1: priority to to really control this chemical, and Mexico just
Speaker 1: you let it go until until I think the rule
Speaker 1: was published on Christmas even two thousand and eighteen, and
Speaker 1: even since then it's still unbelievably easy to get. You know,
Speaker 1: we bought this this weird retail market in Mexico where
Speaker 1: you can buy this chemical and eighteen weater jugs. The
Speaker 1: man dominated. It's dominated by a US company called Avantur,
Speaker 1: which was the second largest i PO on Wall Street
Speaker 1: last year, and they've got about a twelve point three
Speaker 1: billion our market cap and they sell thousands of these
Speaker 1: drugs in Mexico. And it's just it's small enough to
Speaker 1: load into the trunk of a car, but it's big
Speaker 1: enough to make really lucrative quantities of illegal drugs, especially heroin.
Speaker 1: We found it in crime scene photos that we got
Speaker 1: from authorities at heroin labs, and each one of these
Speaker 1: jugs can make about nineties hits of heroin, pure pure
Speaker 1: white heroines. Wow. I mean we bought it over the counter.
Speaker 1: We had it delivered to us on Mercado Libre, which
Speaker 1: is like the kind of Amazon and Latin America. All
Speaker 1: the retailers, all the distributors said it was unbelievably easy
Speaker 1: to get. It's just this crazy, wide open market. And
Speaker 1: and again, I guess what was shocking is that it
Speaker 1: was really it's a market really dominated by US companies, right, yeah,
Speaker 1: now that really is that clearly is a twist. All right,
Speaker 1: Cam Simpson, thank you so much. Projects and Investigations reporter
Speaker 1: for Bloomberg joins on the phone from London. A terrific
Speaker 1: piece of journalism. US drug crisis is made of Mexico
Speaker 1: with a American raw materials. That story will be featuring
Speaker 1: the upcoming issue of Bloomberg Business Week. You can read
Speaker 1: it now on the Bloomberg terminal and of course at
Speaker 1: Bloomberg dot com. Carroll Well in this week's Bloomberg Green Segment,
Speaker 1: Bloomberg News Labor reporter josh Idolson takes us deep into
Speaker 1: the U S mining world and the comeback that never
Speaker 1: was and the workers that have just been caught in
Speaker 1: all of this. Josh joining us on the phone from
Speaker 1: San Francisco. So, Josh, good to have you here with us.
Speaker 1: I feel like we all know the coal industry is
Speaker 1: a dying one, and yet there are still workers in
Speaker 1: it um. But it's not easy for them. And I
Speaker 1: feel like they keep getting made promises, um from various
Speaker 1: individuals and then they're just disappointed over and over again
Speaker 1: and they've got to kind of rework themselves. Yes, part
Speaker 1: of why we did this story is Black Jewel became
Speaker 1: international news. Harlan County, the iconic US coal county, came
Speaker 1: back into the headlines a year ago when miners physically
Speaker 1: blocked tracks to prevent their bankrupt company from moving coal
Speaker 1: out that they said they had mind without getting paid
Speaker 1: for it. So the question for this feature was, well,
Speaker 1: what happened after that? Because that protest united the miners,
Speaker 1: but that bankruptcy ultimately dispersed them. It dispersed some people
Speaker 1: out of the county, and it dispersed other people out
Speaker 1: of the coal industry into things like trucking or meat
Speaker 1: packing or getting into nursing. I talked to a man
Speaker 1: who said the machismo factor would have prevented him in
Speaker 1: the past from moving from mining to care work. But
Speaker 1: he spent a bunch of time around mail I see
Speaker 1: you nurses when his baby was in the i c U.
Speaker 1: And it shifted his perspective and now he sees nursing
Speaker 1: as a more promising way to be able to care
Speaker 1: for his family than clinging onto mining. And so what
Speaker 1: happens when there is a green element that that comes
Speaker 1: into this, how does that play in Josh in terms
Speaker 1: of potentially some new opportunities because that has itself long
Speaker 1: been held out or maybe of late been held out
Speaker 1: as as a promise of swords or as maybe a
Speaker 1: way forward here tell us about that. That's right. There
Speaker 1: are voices saying this is not something that one person
Speaker 1: or one county can solve. In fact, it's a societal responsibility.
Speaker 1: And what's needed to create equally or better jobs is
Speaker 1: massive investment and the federal government should be doing it.
Speaker 1: And so people advocate for trillions in spending to do
Speaker 1: things like provide benefit and pay parity, create government jobs
Speaker 1: that people can take over, invest in in support infrastructure change,
Speaker 1: federal procurement to incentivize placing work in some of these
Speaker 1: former coal counties. There's plenty of work that needs to
Speaker 1: be done in America. There's work remediating environmental damage from coal.
Speaker 1: There are solar panels to be installed, their kids and
Speaker 1: elderly people to be cared for. And so it is
Speaker 1: in part a question of will of whether the government
Speaker 1: will step in to make the decline of this industry
Speaker 1: that has had tremendous social cost not itself be something
Speaker 1: socially devastating for a bunch of people, right, because it's
Speaker 1: not people who don't want to work. I mean, they're
Speaker 1: trying to reinvent themselves, but it's not so easy. And
Speaker 1: you do wonder about what the government could do or
Speaker 1: their responsibility to help in this situation, because ultimately, you know,
Speaker 1: people who have jobs, people are working. First of all,
Speaker 1: good for them and they can support themselves and their families,
Speaker 1: but it's also and good certainly for their mental health,
Speaker 1: but it's also good for our overall economy bottom line.
Speaker 1: One of the things that was striking and reporting this
Speaker 1: story was talking to the judge executive, the head elected
Speaker 1: official of the county, who talked about the surveys that
Speaker 1: they've done that these miners who in some cases had
Speaker 1: the opportunity to make a hundred thousand dollars a year
Speaker 1: with overtime in the mind in surveys said they would
Speaker 1: accept jobs for as little as seventeen dollars an hour.
Speaker 1: And yet when he's had companies come visit about building
Speaker 1: in the county, one of them, he realized it wasn't
Speaker 1: going to work because the way he put it is,
Speaker 1: they only have so much flat land in an eight
Speaker 1: dollar an hour job is not something that's going to
Speaker 1: improve people's fortunes there, right, all right, Well, it's a
Speaker 1: nice piece of reporting, uh stark. In many ways, as
Speaker 1: all of the disruption continues to hit the whole industry
Speaker 1: and green it could be a way out, but it
Speaker 1: is complicated in many ways. Josh Idolson, thank you so much.
Speaker 1: Nice to catch up with you, labor reporter for Bloomberg,
Speaker 1: joining us on the phone from San Francisco. You can
Speaker 1: read more stories on climate news, science and the environment
Speaker 1: at Bloomberg dot com slash green Girl. What's really interesting
Speaker 1: about this story is, right we talked about we see
Speaker 1: the headlines and it's we just all feel so removed
Speaker 1: from it. But what joshed us so well, um and
Speaker 1: this story in particular, like takes us there to understand
Speaker 1: the struggles of these individuals who have been in an
Speaker 1: industry for a long time. It's like, Jason, if you know,
Speaker 1: we as journalists, and certainly there's other things we can do,
Speaker 1: but all of all of a sudden, it was just
Speaker 1: I mean, a dying industry. Dare I say, but you
Speaker 1: know what I mean? And then it's like, well, okay,
Speaker 1: I've got to you know, figure my way through. I mean,
Speaker 1: it's it's we can't just keep leaving people behind, right
Speaker 1: roam journal Yeah, but you let me drive? No, no,
Speaker 1: please out the Dalles. I want to drive, Just drive baby,
Speaker 1: good questions trying. This is the drive to the Globe community. Thanks,
Speaker 1: we'll drying us down on Bluebird Radio and it's time
Speaker 1: for the drive to the clothes. Let's check in in
Speaker 1: Los Angeles with Charlie Rogers, regional chief investment Officer for
Speaker 1: Abbot Downing that, of course, is a division of Wells
Speaker 1: Fargo Asset Management. Charlie, Really nice to have you here
Speaker 1: with Caroline myself. Good afternoon. Thank you for having me.
Speaker 1: It's our pleasure. So you know, it's interesting we are
Speaker 1: looking at a market that continues to defy gravity when
Speaker 1: it comes to the equity market. You know, we see
Speaker 1: a lot of enthusiasm when there's a good vaccine headline
Speaker 1: or when there's some indication of an economic recovery. I
Speaker 1: have to ask you, like, how do you read this
Speaker 1: market right now? What's the thing that maybe folks are
Speaker 1: missing or that's going underappreciated. Yeah. You know, one of
Speaker 1: the things that we're obviously focused on is the upcoming
Speaker 1: presidential election. We're just about three months out. So far
Speaker 1: the markets are taking that in stride, you know, as
Speaker 1: I loved this morning. Uh website has Biden, you know,
Speaker 1: with an eight eight point four percent lead, no no
Speaker 1: noticeable bounce coming out of the virtual elections. So I
Speaker 1: think for the first time of late, we're starting to
Speaker 1: hear some questions around uh, you know, what are the
Speaker 1: policy impact of a potential of resume change and uh
Speaker 1: you know here in California there's there's talk about a
Speaker 1: wealth path and and whatnot. So uh, you know, our
Speaker 1: view is the elections we should not come front and
Speaker 1: center where they normally would. At this point, we're going
Speaker 1: to start to hear more and more about that, and
Speaker 1: the focus is going to be on you know, policy impact,
Speaker 1: how much of those are considered less growth friendly and
Speaker 1: what is really the reaction uh, you know, going forward
Speaker 1: with the markets. But so far that the focus has
Speaker 1: been on you know, improving economic highlights. Uh you know,
Speaker 1: COVID numbers are trend be down again and and uh
Speaker 1: you know, salesforce had a great number today and we
Speaker 1: hit new new highs again right there. Letting go of
Speaker 1: workers too though, And I do wonder, you know, what
Speaker 1: the economy looks like, um for the rest of the
Speaker 1: year going into one when there's pressure still on companies,
Speaker 1: you know, to maybe cut back because there isn't demand
Speaker 1: you know, out there, because we're not quite through the
Speaker 1: virus yet. Yeah, I mean I think that the challenge
Speaker 1: there is, you know, what what number do you look
Speaker 1: at you look at the where we started the year
Speaker 1: unemployment GDP, and and where we are now and and
Speaker 1: and how far we're down or what I think the
Speaker 1: market is focused on is the trends improvement there, so
Speaker 1: whether that be employment. Uh you saw the housing number
Speaker 1: last week was up twenty plus percent. I think the
Speaker 1: market is looking forward and likes you know the fact
Speaker 1: that we've gotten really better data than expected. So in
Speaker 1: some ways that's hard to believe in the middle of
Speaker 1: the pandemic, And we can all point to sectors like
Speaker 1: hospitality where where they're you know, there's real challenges ahead
Speaker 1: areas in real estate, et cetera. But I think the
Speaker 1: market is focused on the fact that data has been
Speaker 1: better on the margin, and as long as that trend continues,
Speaker 1: we kind of supports the highs that we've been hitting
Speaker 1: almost on a daily basis. But Charlie, what does it
Speaker 1: mean when a company like Salesforce, as you mentioned and
Speaker 1: we talked about certainly yesterday after they reported after the
Speaker 1: closing bell that they have a banner order and yet
Speaker 1: they're cutting about a thousand jobs at least according to
Speaker 1: our Nico Grant uh and according to those people familiar.
Speaker 1: So when a company is still doing great and cutting workers,
Speaker 1: you know, what does that say maybe about the outlook
Speaker 1: and potentially what it will mean, you know, ultimately for
Speaker 1: the economy and then investments companies. Yeah, I think, look,
Speaker 1: those those jobs are going to have to be picked
Speaker 1: up somewhere else. I would say a counterpoint to that,
Speaker 1: if if you sell the Amazon quarter, I believe if
Speaker 1: I have the number correctly, they hired something like a
Speaker 1: hundred and seventy five thousand workers in the second quarter,
Speaker 1: which is just a staggering number. So there's clearly been
Speaker 1: winners coming out of pandemic. It's easy to kind of
Speaker 1: look at the tech sector, Salesforce, Amazon being two big examples.
Speaker 1: But for each uh you know, cut that we've seen,
Speaker 1: like Salesforce, there there has been some positive corporate news
Speaker 1: like Amazon, you know where where they're aggressively adding adding workers.
Speaker 1: And as long as those kind of trends uh continue
Speaker 1: and those kind of roll up into the uh you know,
Speaker 1: frankly better employment numbers than that expected, I think you're
Speaker 1: going to see uh you know, that continued tinued up
Speaker 1: trend and you know, we gotta we gotta get get
Speaker 1: employed back to more normalized numbers. And you know, it's
Speaker 1: our expectation into twenty one that that will start to
Speaker 1: see those those jobs come back. So, Charlie, we were
Speaker 1: talking earlier in our show about a story that I
Speaker 1: had a hand in, which was about how Mark Karney,
Speaker 1: the former Bank of England former Bank of Canada chief,
Speaker 1: is headed over to Brookfield head a whole new investment
Speaker 1: area for them around E. S. G. It'll be a
Speaker 1: mix maybe a public and private type investments. But I
Speaker 1: do wonder as we think about these private capital juggernauts
Speaker 1: like a Brookfield or a Blackstone, KKR, Carlisle and others,
Speaker 1: are those opportunities for for clients sort of the broader
Speaker 1: private market which has only gotten bigger and bigger here. Yeah, actually, uh,
Speaker 1: I think that's right along the lines of what we're thinking. Uh.
Speaker 1: You know, our discussion up until now is about the
Speaker 1: public markets and the and the new equity side high
Speaker 1: as we're hitting you know, we actually think it's a
Speaker 1: it's a great time to be looking at the private markets.
Speaker 1: And you mentioned some of the category leaders there, so
Speaker 1: you know, one of the one of the deals that
Speaker 1: we're looking at now is a private debt opportunity. The
Speaker 1: discount for small and mid mid companies which really don't
Speaker 1: have access to the debt markets the way some of
Speaker 1: the bigger companies do. You know, cash flow on that,
Speaker 1: I think it's north of six percent. You're buying bonds
Speaker 1: at any cents on the dollar, So cash flow plus
Speaker 1: upside in the zero interest rate environment, I think that's
Speaker 1: an extremely good risk reward. And the names you mentioned Cake,
Speaker 1: they all are, uh, Apollo, some of the big debt
Speaker 1: companies should should benefit from that. So I do think
Speaker 1: you're gonna share to see those trends playing forward. And
Speaker 1: and you know, private deals they held up better on
Speaker 1: the downside March and April and and and public markets
Speaker 1: would come roaring back. But but uh, you know, going forward,
Speaker 1: and we think, you know, this is a great time
Speaker 1: to be looking at you know, those private investments. Yeah. Interesting. Yeah,
Speaker 1: Aries is another name. I know we talked about a
Speaker 1: lot when it comes to the private credit and the
Speaker 1: private debt market headquartered out near you. All right, Charlie Rogers,
Speaker 1: thanks so much, Regional Chief Investment Officer for abbot downing.
Speaker 1: He's done, just on the phone from Los Angeles. Carelly
Speaker 1: see how it was able to sort of slide in
Speaker 1: my story. Very subtle, not so subtle, No, no, well
Speaker 1: to think so well do Thanks so much for listening
Speaker 1: to Blueberg Business Week. Download the podcast on iTunes, south Cloud,
Speaker 1: Blueberg dot com, or wherever you get your podcasts. And
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