Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm
Speaker 1: Jason Kelly, I'm Carol Masser. Welcome to the weekend edition
Speaker 1: of Bloomberg Business Week. Over the next couple of hours,
Speaker 1: we'll bring you news of the week, insights from the magazine,
Speaker 1: and so much more. And so much of course, is
Speaker 1: about the Bloomberg fifty that time of year again, from
Speaker 1: finance to politics, tech and entertainment. These are the folks, Carol,
Speaker 1: who really shaped twenty nineteen, maybe in some unexpected ways.
Speaker 1: And because we're Bloomberg, you've got to be able to
Speaker 1: measure it. Where else can you talk about Rihanna and
Speaker 1: the black hole I'm just saying, and a chicken sandwich
Speaker 1: and a chicken sandwich. It's all here. Plus we've got
Speaker 1: a growing pushback on stock by backs and a different
Speaker 1: kind of housing crisis that asked the question, is homelessness
Speaker 1: a crime? It's an important story. That one really caught
Speaker 1: my attention. I loved our conversation with Noah bu Higher
Speaker 1: in part because you know, this is the story of
Speaker 1: our time in many ways, because it touches on so
Speaker 1: many things that are going on in America right now, political, economic, social,
Speaker 1: and more. But first up, let's talk about our top
Speaker 1: story this week. NATO. It turned seventy and they were
Speaker 1: meant to celebrate in London, but turned out to be
Speaker 1: less of a birthday party, more like a Thanksgiving dinner
Speaker 1: Carol for a large dysfunctional family. I have to say
Speaker 1: it was interesting just to watch all the photo ops
Speaker 1: uh and watch the body language between all of the
Speaker 1: world leaders. Definitely something worth covering this week. Not all
Speaker 1: of them got along. There was a few snide remarks made,
Speaker 1: but in the end everyone well, they seem to accept
Speaker 1: that they're kind of stuck with each other. At least
Speaker 1: that's according to Mark Champion, who covered the summit outside London.
Speaker 1: He joins US now, So Mark, what's the latest on NATO?
Speaker 1: A lot happened this week? It was I mean, the
Speaker 1: build up was pretty extraordinary. Um, this was supposed to
Speaker 1: be just a celebration. It wasn't a real summit. It
Speaker 1: wasn't a full summit. They do that every two, you know,
Speaker 1: two to three years, but this one they felt they
Speaker 1: had to do because it was the seventie uh, and
Speaker 1: they kept it really short because they specifically didn't want
Speaker 1: to create a big you know, target for unscripted problems
Speaker 1: with President Trump, which they've had before, um so, and
Speaker 1: then all of a sudden in the weeks before, you
Speaker 1: had the French President mcclan coming out and talking about
Speaker 1: how he wasn't so sure whether you know the rest
Speaker 1: of the NATO allies would go to the defense of
Speaker 1: Turkey under the Article five Collective Defense clause, which is
Speaker 1: absolutely at the core of NATO. It caused a huge
Speaker 1: blow up. And then of course you had Turkey itself,
Speaker 1: which had begun a military operation in Syria against the
Speaker 1: will of most of the other allies. So you know,
Speaker 1: people were very apprehensive going in about you know this,
Speaker 1: this thing could just blow up, and instead of being
Speaker 1: a celebration and demonstration of the union of this uh
Speaker 1: the unity really of of this alliance, it would be
Speaker 1: the opposite. Hey, I do want to ask you about
Speaker 1: Boris Johnson. He was at the summit. He's also the
Speaker 1: subject of remarks in the magazine this week and more
Speaker 1: spec typically his character and his temperament, his anger. Who
Speaker 1: knew um tell us a little bit about that and
Speaker 1: how that might impact his campaign and possibly his election.
Speaker 1: So this has been a really extraordinary campaign. They're very
Speaker 1: short in the UK. One has to remember that, especially
Speaker 1: if you're familiar with American ones will go on for
Speaker 1: more than a year. They're basically a month long, a
Speaker 1: month or six weeks, you know, in effect, so they're
Speaker 1: extremely short. Stuff is really packed in in all the
Speaker 1: debates and everything. It happens very very fast. We're already
Speaker 1: towards the last week. But this particular campaign is is
Speaker 1: really quite extraordinary because you have both parties you know,
Speaker 1: making big plays in terms of you know, changes in
Speaker 1: public spending and budgeting and fiscal policy, all these sorts
Speaker 1: of things. Um And in the end though, it really
Speaker 1: comes down to trust in the two main candidates, one
Speaker 1: of them is Boris Johnson UM and he has always
Speaker 1: had a big issue with trust and the anger, uh
Speaker 1: is you know a piece of that um And we
Speaker 1: had this article to that, you know, in this this
Speaker 1: issue in Business Week, which is really runs through it
Speaker 1: very carefully, reminds you of the times when he's really
Speaker 1: sort of flown off the handle and people already don't
Speaker 1: quite trust him because he has a record. You know,
Speaker 1: he was fired once for not telling the truth, you know,
Speaker 1: while he was a cabinet minister. He was fired as
Speaker 1: a journalist for not telling the truth. And then if
Speaker 1: you add on top of that the possibility of a
Speaker 1: blow up because you know he doesn't keep his temper,
Speaker 1: which has happened before, then you know that that is
Speaker 1: one of the things that the people who are running campaign,
Speaker 1: his campaign, are very concerned about, and they've kept they
Speaker 1: kept campaign on a very tight leash and kept him
Speaker 1: on a very tight leash, and they've kept his exposure, um,
Speaker 1: you know, quite limited. All right, Mark Champion, we're gonna
Speaker 1: leave it there. Thank you so much, joining us from London.
Speaker 1: A very busy time between posting NATO and then obviously
Speaker 1: this a election. Well for more on this week's magazine.
Speaker 1: Here he is Business Week's editor Joel Weber. The Bloomberg fifty.
Speaker 1: It's the most wonderful time of the year. Yeah, exactly.
Speaker 1: This is like one of our favorite issues of the
Speaker 1: year where we recognized the fifty people who really defined
Speaker 1: twenty nineteen and we and we look specifically for things
Speaker 1: that are measurable because you know, this is Boomberg all industries,
Speaker 1: I feel like, entertainment, finance, fashion, entertainment, sports. We we
Speaker 1: really try to look across everything and that's what makes
Speaker 1: this one special. You know, like you could have a
Speaker 1: list of people that are you know, expected names like
Speaker 1: Warren Buffett could basically be on that list every year.
Speaker 1: But we're looking for measurable contributions in the year of
Speaker 1: twenty nineteen. So we go back to January and all
Speaker 1: the way up through now to find out who really sparkled.
Speaker 1: And even a chicken sandwich, even a chicken sandwich the
Speaker 1: you know, this is the Popeye' chicken sandwich. It broke
Speaker 1: the interest data. Three month supplies sell out in a
Speaker 1: matter of days. People even got stabbed over it, which
Speaker 1: was like, you know the downside of this story, but
Speaker 1: really it speaks to like the ability for brands to
Speaker 1: like these things, and a chicken sandwich of all things,
Speaker 1: you know, with some extra pickles can really break the internet. So,
Speaker 1: you know, we reach out, you know, around the Bloomberg organization.
Speaker 1: Everybody pitches ideas and so on and so forth. Is
Speaker 1: their name that surprised you or that you found was
Speaker 1: really this is a big team sport. We pulled from
Speaker 1: all the bureaus around the world and we're looking for
Speaker 1: leaders and business people and CEOs. One of my favorite
Speaker 1: ones was remember the black hole. It's easy to forget
Speaker 1: all the things that have happened this year, but in science,
Speaker 1: this is a huge deal. The team that discovered a
Speaker 1: black hole, so that was one of my favorite ones
Speaker 1: because you know that's it's a photo of nothingness, is
Speaker 1: effectively what we all looked at for the first time,
Speaker 1: and it really just marked incredible scientific achievements. So I'm
Speaker 1: honored to have them on the list. And that's editor
Speaker 1: Joel Weber. I love the enthusiasm that Joel has about
Speaker 1: this issue. It's a labor of love, for sure, but
Speaker 1: what a fun exercise to be able to tap into
Speaker 1: the entire global newsroom of Bloomberg. And a lot of
Speaker 1: that falls to Brett Began. We're going to hear from
Speaker 1: him a little bit later on. And a lot of
Speaker 1: social momentum around this issue as well. You're listening to
Speaker 1: Bloomberg Business Week coming up. Older Women Are the Beauty
Speaker 1: Industry's Next gold Mine is a fascinating story. This is work.
Speaker 1: So there's a few stories in the Business section that
Speaker 1: we did want to highlight this week, and the editor
Speaker 1: of the section, Jamalysis here, well, any excuse to talk
Speaker 1: to gem LSC. It's always on the leading edge. And
Speaker 1: what's interesting is I want to start with Chanelle because
Speaker 1: obviously an incredibly well known brand, and you actually start
Speaker 1: this story with sort of this portrait of Paris. Uh.
Speaker 1: And they're going after a market where Marty has failed, right,
Speaker 1: I mean basically, um, And we start out the story
Speaker 1: looking at Chanelle's boutique on the Plasta van Dam and Paris,
Speaker 1: and it's facing all these other sort of well known
Speaker 1: names and watches like Rolex and Pouget and um. And
Speaker 1: we're and and there's Chanelle, which is normally thought of
Speaker 1: as a female centered brand that's big in real fashion
Speaker 1: and also in fragrance and um. You think of the
Speaker 1: blazers and the purses, but you don't really think about
Speaker 1: watches as much, even though they've been in the watch business.
Speaker 1: Well now they've decided to make a really big push
Speaker 1: into it. Now that's tricky simply because the brand is
Speaker 1: really associated with a very feminine, um sort of fashion orientation,
Speaker 1: and that's not where the biggest watch companies are. The
Speaker 1: biggest watch companies are things that you know, men buy,
Speaker 1: and it's a male focused in the business and um,
Speaker 1: you know, this is a tough way for these Uh.
Speaker 1: You know, you know, people to sort of we shoulder
Speaker 1: their way in. So is it all about going after
Speaker 1: men specifically or men and women? Are they all in
Speaker 1: on watching? It's it's all in. I mean they short
Speaker 1: it out with a watch it's been successful called the
Speaker 1: J twelve and it's a unisex watch and means so
Speaker 1: it's sized and styled in a way that it looks
Speaker 1: good on both men and women, and um, well it
Speaker 1: has done well. However, you know, it's just the beginning,
Speaker 1: because the thing is that other companies have had, you know,
Speaker 1: a hundred years or a couple of hundred years and watches,
Speaker 1: and this is definitely a hundred year, hundred year old brand,
Speaker 1: but it's one that's been associated with fashion, and among
Speaker 1: true watch aficionados, the notion of a fashion watch is
Speaker 1: sort of a that's not a compliment. Yeah, I mean,
Speaker 1: watches are such a funny little corner of the market.
Speaker 1: I mean, we've talked a lot about the watch trade,
Speaker 1: as it were, with Chris Rouser, who runs the Pursuit section,
Speaker 1: who I imagine was somehow consulted in all of this.
Speaker 1: But you know, I do wonder why, you know, not
Speaker 1: to be too Centcalo about Chanelle, but like what makes
Speaker 1: them so special? You know that they can figure scial Okay,
Speaker 1: they have been um. You know, that's something that they've
Speaker 1: had to, you know, sort of contend with among the
Speaker 1: the inside watch crowd, and they've been um, not just
Speaker 1: people who wanted to sell watches, but they wanted to
Speaker 1: make better watches, and so they have invested in UM
Speaker 1: making their own movements, which is the real hard part
Speaker 1: of watchmaking, not just putting a quartz movement on something,
Speaker 1: but instead saying, you know, they're going to have a
Speaker 1: mechanical you know, sort of specialists in Switzerland who are
Speaker 1: actually making their watches. They also own uh you know,
Speaker 1: minority ownership and very expensive Swiss watch companies, and so
Speaker 1: they actually know how to make watches. And it's been um,
Speaker 1: you know, it has been shown. They won the UM
Speaker 1: uh what sort of the oscars of watches UM in
Speaker 1: Geneva the last two years for best Women's Watch and
Speaker 1: UM and so one of them was extremely technical. So there,
Speaker 1: you know, they have the product. The issue is can
Speaker 1: you break into something where people have typically thought of
Speaker 1: as being sort of controlled by a few other companies,
Speaker 1: particularly at a price point that a luxury company needs
Speaker 1: to charge. Well. I do think there's a lot of
Speaker 1: stuff going on, like LVMH buying Tiffany and they were
Speaker 1: doing that to really get into the jewelry space and
Speaker 1: so on. So for though, I do think that there's
Speaker 1: a re emphasis whether it's on jewelry or watches, and
Speaker 1: I think that's a market that can be continued to
Speaker 1: be tapped. I think upscale brands and upscale burns are
Speaker 1: continually looking a new ways to get growth. And if
Speaker 1: you're not in some segment that you know, sort of
Speaker 1: ties into the high priced world, you try to get
Speaker 1: into it. So Chanel okay, so going after watches big time.
Speaker 1: They already have a cosmetics line. I don't know if
Speaker 1: they have been looking into tapping the elderly consumer market,
Speaker 1: but if you go to Japan, apparently cosmetics for the
Speaker 1: elderly that's a that's a thing. This was a weight
Speaker 1: what story for me? I have to say, I did
Speaker 1: not see this one coming. Tell us what's going on? Well,
Speaker 1: it's um, you know, we all know that Japan is
Speaker 1: the oldest, you know, has the oldest populist of any
Speaker 1: country right now, and so it wasn't a big stretch
Speaker 1: for consumer product companies to say, oh, the elderly, there
Speaker 1: may be a good market. But normally when you think
Speaker 1: about cosmetics, it's aimed at the young, sort of use
Speaker 1: young people as in all your advertising, and you sort
Speaker 1: of target everything about looking like your twenty with skin
Speaker 1: of twenty year olds. And instead, in Japan, we're almost
Speaker 1: half the women now are over fifty, and by elderly,
Speaker 1: I'm just but okay, in another fifteen twenty years, more
Speaker 1: than half of the over sixty. I mean, this is
Speaker 1: a really really aging population. And so all of a
Speaker 1: sudden people have said they shouldn't be ignored that we
Speaker 1: there's money here. There's an affluent population too, and so
Speaker 1: therefore if we pump products aimed at that market, we
Speaker 1: can sell a lot more. And so companies are sort
Speaker 1: of coming out with lines that look at that. So
Speaker 1: shadoh um, polar orbis ks um, you know, they're doing that,
Speaker 1: and they're also using older influencers as well. Well. That
Speaker 1: was one of the things that really jumped out at
Speaker 1: me is, you know, in the same issue where we
Speaker 1: are celebrating rightly in the Bloomberg fifty, Kylie Jenner at
Speaker 1: the right buled age of twenty two with her line
Speaker 1: that she now does a deal with Cody. Here we
Speaker 1: have throwback to you know, my era, Kate Moss Kate
Speaker 1: five years old years old as the spokesperson for cose
Speaker 1: and um you know, and that is, you know, forty five,
Speaker 1: while it seems young to me, is not young in
Speaker 1: that world. And so therefore what they're saying is that,
Speaker 1: you know, we are talking about your skin more mature skin.
Speaker 1: And one of the really interesting things in the story
Speaker 1: is that UM polar Orbits, which is one of the
Speaker 1: biggest cussing companies in Japan, is using one of its
Speaker 1: UM influencers is a woman who is the world's oldest
Speaker 1: beauty consultant. She's years old. She works for polar Orbits,
Speaker 1: and she's been sort of helping women with their skin
Speaker 1: for well forever, and UM, it was really interesting to
Speaker 1: see that. Um, you know, there are all sorts of tricks.
Speaker 1: That tricks are strategies that people use when they're dealing
Speaker 1: with older customers. It means that the bottles have to
Speaker 1: have larger text so that they can um you know
Speaker 1: sort of it doesn't strain your eyes as much. It
Speaker 1: also means that use wax on some of the eye
Speaker 1: products because it then doesn't hurt the thinning skin. And
Speaker 1: um Soseto is even selling comb special combs that have
Speaker 1: little dots of black dye on the end of the teeth.
Speaker 1: Go for your for the roots of the hair that's
Speaker 1: turning gray. I mean, there's all sorts of things that
Speaker 1: people are using now to say, Okay, I understand that
Speaker 1: you're aging, but you can still be your best person.
Speaker 1: You look your best way, and we're going to help
Speaker 1: you with that and thank you, spend money with my company.
Speaker 1: That's Jamli is the editor of the business section. Two
Speaker 1: great stories about companies and industries looking to really kind of,
Speaker 1: you know, create more revenue lines. For Chanelle, of course
Speaker 1: it's about high end watches, but for cosmetics. Uh, that
Speaker 1: industry going after an older population, right, and the demographics
Speaker 1: underneath this whole trend fascinating. Obviously, Japan is something of
Speaker 1: a test case, giving how they have that aging population,
Speaker 1: but you have to thank Europe is next, and then
Speaker 1: we're getting older here in the United States as well.
Speaker 1: You're listening to Bloomberg business Week coming up an experiment
Speaker 1: in Tennessee to offer free tuition while it boosted enrollment,
Speaker 1: but dropout rates still remain high. Yeah, no one size
Speaker 1: fits all going on here when it comes to solving
Speaker 1: that conundrum of higher education. This is bloomberg. Several presidential
Speaker 1: candidates have proposals to defray the cost of higher education.
Speaker 1: But Jason, I think it's safe to say one size
Speaker 1: is not fit all. Well, I think it's also fair
Speaker 1: to say you and I both have teenagers. This is
Speaker 1: front of mind for so many parents across the country
Speaker 1: and for so many would be students. The affordability of
Speaker 1: higher education. Uh, it is. I think the technical term
Speaker 1: is bananas the cost of higher education. Read pickartt joins
Speaker 1: us from Washington, d C. With the story take us
Speaker 1: to Tennessee. The thing about Tennessee, so they were the
Speaker 1: first state to implement a statewide free tuition program for
Speaker 1: every high school graduating senior, and they could go to
Speaker 1: community college or technical college completely for free. That started
Speaker 1: in but it started as an economic program. So the
Speaker 1: idea was that Tennessee took a look around its workforce
Speaker 1: and realized within an increasingly skilled economy and an advancing economy,
Speaker 1: but they weren't going to have enough skilled workers. So
Speaker 1: as a result, they came up with Tennessee Promise and
Speaker 1: a complementary program for adults called Tennessee Reconnect that works
Speaker 1: towards getting Tennessee AND's to have a post secondary education,
Speaker 1: so whether that's a technical certificate or a community college degree,
Speaker 1: or whatever it may be. And the results have been
Speaker 1: really promising. You've seen college going rates increase, You've seen
Speaker 1: enrollment and community colleges increase. You've seen graduation rates at
Speaker 1: community colleges improve. But at the same time, the dropout rates,
Speaker 1: while improving, still could use a little bit of improvement.
Speaker 1: It's almost of students are dropping out after three years
Speaker 1: using the program. We talked to us because you actually
Speaker 1: introduced us to one student in particular, and I do
Speaker 1: feel like, based on your reporting that if you're a
Speaker 1: low income students, this is a tougher truck for you.
Speaker 1: It's a tougher track, and being a low income student
Speaker 1: and Tennessee or any other state in America is is
Speaker 1: a tougher track. But the thing about this program is
Speaker 1: that it's a last dollar scholarship, so it means that
Speaker 1: it covers the cost of tuition that federal pell grants
Speaker 1: don't cover, or other state aid doesn't cover. So for
Speaker 1: students who are low income and perhaps would already have
Speaker 1: the majority of their college paid for UM from through
Speaker 1: federal pell grants, you know, they're getting a smaller proportion
Speaker 1: of their tuition paid for by this program versus UM
Speaker 1: students who earn our come from families with a bit
Speaker 1: of a higher income. So the idea is that, you know,
Speaker 1: you look at these dropout rates and tuition is not
Speaker 1: a factor, but the other cost of college that this
Speaker 1: that a financial aid program doesn't address, like transportation or
Speaker 1: housing or the cost of books, are really weighing on
Speaker 1: these low income students. What has been learned in Tennessee
Speaker 1: that can and cannot be applicable to other states. So
Speaker 1: so for Tennessee, it has its own program. It was
Speaker 1: the first to offer to all students of that we're
Speaker 1: graduating from high school. But other states have their own
Speaker 1: versions of programs. Some have residency requirements, like New York
Speaker 1: requires you to live in the state after you receive
Speaker 1: the aid UM. Other states offer it for for your education,
Speaker 1: while some offer it for two or for specific areas
Speaker 1: or income brackets. But I guess what the lesson that
Speaker 1: I have heard from UM experts in this area, is
Speaker 1: that one size fits all approach is really challenging, especially
Speaker 1: in something like higher education, where each state is different
Speaker 1: and each state has come up with their own program
Speaker 1: to serve to serve them. UM. So looking at it
Speaker 1: from a one size fits all approaches is really challenging. UM.
Speaker 1: But that that is different than having a federal framework
Speaker 1: and then giving states a little more wiggle room to
Speaker 1: decide what's best for themselves. Well and read, as Carol pointed, doubt,
Speaker 1: I mean it becomes sort of complicated and difficult economically
Speaker 1: for a lot of the students, especially in the lower
Speaker 1: income brackets, because they may need to work to support themselves,
Speaker 1: to support their family for all hosts of reasons. And
Speaker 1: part of it is the money, but part of it
Speaker 1: is the way that even the classes are structured and
Speaker 1: the and the educational offerings are structured. Is there any
Speaker 1: sort of creativity being applied to that part of the equation. Oh,
Speaker 1: absolutely so. Community colleges are going out of their way
Speaker 1: to make themselves available to students. They're holding office hours
Speaker 1: outside of with professors, outside of normal hours. They're offering
Speaker 1: night classes, they're offering weekend classes, They're doing everything that
Speaker 1: they can. The problem is that the Promise program requires
Speaker 1: students to go to school full time. It requires them
Speaker 1: to take a full class load. And in the case
Speaker 1: of a student who's working forty hours a week, that
Speaker 1: can seem like a lot, but but it makes sense
Speaker 1: a lot of ways because you know, in general, dropout
Speaker 1: rates tend to be better when students are going to
Speaker 1: school full time than when they're going part time. Well,
Speaker 1: and what's interesting, and I think states are dealing with
Speaker 1: this a lot, and employers within states is that they
Speaker 1: need workers, and they need workers with the right skills. So, um,
Speaker 1: that's at play here as well. Correct, correct, And you're
Speaker 1: seeing it. You're seeing it work. I mean, since the
Speaker 1: programs was announcing and then implemented for the first group
Speaker 1: in and looking at the unemployment rate, since it's half
Speaker 1: of what it was, the media and household income has
Speaker 1: reached nearly thirty percent of what it was. And that's
Speaker 1: read Picker, such a smart story, a look inside what's
Speaker 1: going on in Tennessee. And you know, it reminds me
Speaker 1: of something we talked about with people like Peter Coy
Speaker 1: all the time, that the data can tell you one thing,
Speaker 1: but real life tends to intervene when you're trying to
Speaker 1: solve what seemed to be intractable problems. You're listening to
Speaker 1: Bloomberg Business Week coming up the people who defined that's right,
Speaker 1: we're talking about the Bloomberg fifty. We're going to take
Speaker 1: you inside that list. This is Bloomberg. So the magazine
Speaker 1: this week is about the Bloomberg fifty. The people in business, entertainment, finance, politics,
Speaker 1: and science and technology. Who's accomplishments, merit, recognition, applause, so
Speaker 1: much more. Jason, this is a cool list. We love
Speaker 1: this every year we get to be a part of it.
Speaker 1: The big event that's happening in New York City next week.
Speaker 1: But the man who's behind it all, who's really at
Speaker 1: the crux of it, are partnering crime and the impresario,
Speaker 1: as it were. Brett began here with us in New
Speaker 1: York City. This is such a cool list, But remind
Speaker 1: us how it gets put together? Well, it's actually it's amazing. Basically,
Speaker 1: I send an email to the entire company and I say, Hey,
Speaker 1: who's on your radar or who might be on your
Speaker 1: radar later this year? So we're looking sometimes for this
Speaker 1: starts months ago. Yeah, yes, we start this in like April.
Speaker 1: Here we are and I don't remember one month December,
Speaker 1: it's all day. Um. Yeah, we started a long time ago.
Speaker 1: And you know what we say is basically, in your
Speaker 1: areas of expertise, who are the people that are doing
Speaker 1: sort of provably well this year that the general lay
Speaker 1: reader person out there might not know about. So we
Speaker 1: try to mix that with people that are a little
Speaker 1: bit more famous, right, because we want them on the
Speaker 1: list to um And yeah, So it starts months and
Speaker 1: months and months ago, and what I do is basically
Speaker 1: feel the submissions and then make a determination about who
Speaker 1: are the most interesting of these people? Well, and I'm
Speaker 1: glad you said provable, because that's a very bloomberg thing, right.
Speaker 1: It's not totally subjected like this is applying data and
Speaker 1: everybody essentially with their nominations has to come armed with
Speaker 1: a metric, right, some sort that's exactly right, so to
Speaker 1: get on the list. It's not really a lifetime achievement award.
Speaker 1: And there's many, many, many people that I want to
Speaker 1: put on this list every year, but they don't really
Speaker 1: have a data, any data or a metric to sort
Speaker 1: of prove um why we should include them. So a
Speaker 1: lot of it is sort of looking at the numbers,
Speaker 1: looking at the figures and saying, Okay, they did have
Speaker 1: a great year, and we can actually show this through
Speaker 1: a stock price growing up, or an acquisition or a
Speaker 1: million other ways we try to measure it. But I'm
Speaker 1: always curious about the kind of debates that you guys
Speaker 1: have as you're discussing all of these names, because I'm
Speaker 1: sure people are like, his name has to be on
Speaker 1: this list, and you're like, no, it doesn't have to
Speaker 1: be on this list. There is a lot of that.
Speaker 1: There are a lot of people you look at and say, hey,
Speaker 1: this person, of course is going to be on the
Speaker 1: Listen every year, I think, oh, this person is definitely
Speaker 1: gonna be on the list, and then we get to
Speaker 1: the end and they wind up not on it um
Speaker 1: And that sort of happens because we decide either that
Speaker 1: the metric isn't strong enough, that it wasn't basically important enough.
Speaker 1: That's the other thing that happens. A lot of people
Speaker 1: have metrics, but you sort of look at the how
Speaker 1: business shapes up and you say, actually, you know, if
Speaker 1: you think about it, this doesn't really marrit inclusions. So
Speaker 1: is there anybody this year of the Bloomberg fifty that
Speaker 1: a lot of people were like, Okay, this person, no
Speaker 1: doubt about it, has to be on the list. You know,
Speaker 1: one person that we said that about um that actually
Speaker 1: did wind up on the list this year is like
Speaker 1: Kylie Jenner, right, so the world's youngest gen z's first
Speaker 1: billion air And that was someone who pretty early on
Speaker 1: we said, you know, like there's a really good chance
Speaker 1: she'll be on the list, and she is in fact
Speaker 1: on the list. And Rihanna is the other person that
Speaker 1: we thought earlier well have to go back to yeah,
Speaker 1: because I feel like she probably had a very strong
Speaker 1: case earlier in the year, and then just a few
Speaker 1: weeks ago she capstones it, as it were, with this
Speaker 1: huge deal, six hundred million dollar deal with Cody, which
Speaker 1: actually increased the valuation of the company from about one
Speaker 1: point one to about one one point two. And the
Speaker 1: way we measure is that she owns you know, basically
Speaker 1: makes her a billionaire because of that, because of the
Speaker 1: original deal. So and I love like the more we
Speaker 1: find out about that store of Christie owns the bulk
Speaker 1: of the company, right, but then mom mom owns the
Speaker 1: moms the rest she's a piece of everything. Yeah, and
Speaker 1: it's an amazing I mean, she's twenty two to be
Speaker 1: a billionaire at twenty two. Granted, how to you know,
Speaker 1: how to little help a little bit of a jog
Speaker 1: jogging platform, absolutely, but still pretty amazing. Um, she knows
Speaker 1: that essentially, if she puts something on her Instagram account,
Speaker 1: which has a hundred and fifty millions most followers, that
Speaker 1: that people are gonna do it. They're gonna buy that product.
Speaker 1: They're gonna go to the old Dough or Cody and
Speaker 1: go buy that product. So she has an amazing power.
Speaker 1: She's an incredible influencer. She's probably one of the most
Speaker 1: important people in terms of determining fashion and style in
Speaker 1: this country. All right, so talk to us about Rihanna,
Speaker 1: because we can't get too far away from that. I mean,
Speaker 1: that's a name that really does stand out from a
Speaker 1: lot of her peers in a lot of ways. And
Speaker 1: also because of a tie up that she has in
Speaker 1: the broader business. Well, and you know, fenty is her brand.
Speaker 1: It started, you know, basically they did five hundred and
Speaker 1: sixty million dollars worth of makeup sales. And LVAM said this,
Speaker 1: this seems to be working caught our attention here, and
Speaker 1: her big thing with that was the shelf. He had
Speaker 1: forty shades, which had never really been done before, and
Speaker 1: now everybody offers forty ship's really every major company. So
Speaker 1: she's now doing clothing, which makes total sense, and in
Speaker 1: doing so she became a number of first usually the
Speaker 1: the first woman to create an original fashion brand and
Speaker 1: v image, among many many other accolades this year. So
Speaker 1: she was she was also pretty much a shoeing So
Speaker 1: is there name on the list that might surprise people
Speaker 1: that's not necessarily a household name like Kylie Jenner Orianna. Yeah,
Speaker 1: there are a lot of them actually, and that's kind
Speaker 1: of what makes the list fun is that for every
Speaker 1: Kylie or or Orihanna, there's actually a lot of people
Speaker 1: in here that you've probably never heard of. Um, you know,
Speaker 1: someone like retash Auger Wolf to me is a really
Speaker 1: really interesting story. So he's a nineteen year old He
Speaker 1: decides to travel around India as a budget traveler and says,
Speaker 1: this is terrible. You know, all these hotels have roaches
Speaker 1: and its foam blocks from mattresses. What if I were
Speaker 1: to take hotels that our hundred and fifty rooms are
Speaker 1: smaller and so standardized, so have hot water in the showers,
Speaker 1: have actual mattresses, right, eliminate the bugs in the room.
Speaker 1: So said, oh, I'll give this shot. He's twenty six
Speaker 1: now is worth more than a billion dollars. His Odio
Speaker 1: hotel chain is adding seventy two eighty hotels a day,
Speaker 1: which is absolutely insane. And they are by room now
Speaker 1: the number two hotel in the world and are poised
Speaker 1: to overtake Marriott pretty much early next year. So that
Speaker 1: story found amazing. The most amazing little tidbit in there
Speaker 1: is that the way they use data and analytics to
Speaker 1: try to figure out what works, and they found that
Speaker 1: if they put portraits of Maryland Monroe in the rooms,
Speaker 1: that people consider those hotels now boutique and that actually
Speaker 1: increases increases revenue per available room ten to eleven per hotel. Wow,
Speaker 1: you know when it's not always just single people. And
Speaker 1: I want to talk a little bit because it's one
Speaker 1: of our favorite storylines the year US when its national
Speaker 1: team a shoe into some extent on the list, in
Speaker 1: part because this was much more than just winning the
Speaker 1: World Cup. So there their magic actually is that the
Speaker 1: number of people that watched set records for any game,
Speaker 1: not just you know, for for women playing for men
Speaker 1: for women. Um, but they're also on the list because
Speaker 1: of their pay equity battle and um, you know they
Speaker 1: have uh they're now basically this is going to come
Speaker 1: to trial next year and they are they are one
Speaker 1: of the groups on there that is fighting very hard
Speaker 1: for pay equity. And their argument is a pretty you
Speaker 1: know good one, which is that, um, they actually playing
Speaker 1: more and more games. They won four World Cups. Um,
Speaker 1: don't we deserve a little bit more here? And we
Speaker 1: we're seeing actually elsewhere in the world that is happening.
Speaker 1: Australia actually just granted their women's team in the same
Speaker 1: amount of money as their men's team. I also always
Speaker 1: wonder on this list when you guys think about something
Speaker 1: that Business Week covers so well, and that is big business,
Speaker 1: corporate stories or business trend Who among the business community
Speaker 1: was worth being on this list this year. Hum, that's
Speaker 1: a great question. Um. You know somebody that I love
Speaker 1: is Ethan Brown. Right, if you look at business this year,
Speaker 1: really hard to overlook the world of fake meat. Right
Speaker 1: beyond meat is his company You've got you know, impossible
Speaker 1: and now you've got pretty much every other company doing
Speaker 1: this well, but their stock price up about two hundred
Speaker 1: percent UM since it launched this year. It was a successful, huge,
Speaker 1: huge I p o UM, and it's just a space
Speaker 1: that is going to be worth so like hundreds of
Speaker 1: billions of dollars in the coming years. So he was
Speaker 1: kind of a shoe in for that. Um. That's just
Speaker 1: also an area that we've covered, you know, at length.
Speaker 1: Kevin Mayer um over at Disney with the launch of
Speaker 1: Disney Plus, I mean, signing up nearly ten million people,
Speaker 1: you know, almost right away. And one of the themes
Speaker 1: throughout this list is you see we have Kevin Mayer
Speaker 1: on the list. Um. Yeah. Also on the list is
Speaker 1: Kevin Faiy of Marvel. Um obviously Marvel Avengers and Game
Speaker 1: this year again the most successful movie of all time
Speaker 1: two point eight billion dollars in ticket sales. Yeah, a
Speaker 1: couple of Kevin's really running the show over Disney exactly.
Speaker 1: And then you have people, you know, like a Starnoff
Speaker 1: at Warner Brothers, right who's charged with basically making HBO
Speaker 1: Max works. So you're seeing a ton in the streaming
Speaker 1: world this year. A lot of people on the list
Speaker 1: basically really responsible for reshaping how we watch TV. That's
Speaker 1: Brett began. He's the editor of The Bloomberg fifties, so
Speaker 1: he's responsible for talking to everyone around the Bloomberg organization
Speaker 1: to help come up with this lest the Bloomberg fifty. Well,
Speaker 1: and it starts months and months and months in advance.
Speaker 1: It becomes this massive project with people pitching and him
Speaker 1: asking for more information. Because what's at the heart of
Speaker 1: all this is you got to prove it. So you
Speaker 1: can't just say, yeah, it's a really great guy. You've
Speaker 1: got to be able to say this person grew market
Speaker 1: share or made a massive acquisition measurable to some extent, right,
Speaker 1: Or in the case of Kylie Jenner, you know, sort
Speaker 1: of had it two ways in the sense of becoming
Speaker 1: a billionaire and then doing this massive deal with Cody
Speaker 1: that I think sealed her place on the Bloomberg right
Speaker 1: or in the case of a chicken sandwich running out
Speaker 1: of buns and lines, you know, for people standing in
Speaker 1: lines to get a sandwich. Well, and one of the
Speaker 1: most fun things about the Bloomberg fifty every year is
Speaker 1: that we get to co host the Big d It's
Speaker 1: coming up early next week. Here in New York City.
Speaker 1: We're going to be literally on the Red Carpet or
Speaker 1: just adjacent to it. Will be on the Red Carpet
Speaker 1: at some point where we'll be nearby it. We'll be
Speaker 1: interviewing a number of the folks who made the list,
Speaker 1: some other notable folks who will be stopping by. It's
Speaker 1: a great event. It's very funny in a lot of ways,
Speaker 1: and we get to honor all these folks. Bottom line,
Speaker 1: what it is, it's fifty people that you need to
Speaker 1: know about because they're doing things already and they're going
Speaker 1: to continue doing things in the coming year, so it's
Speaker 1: really important to know who they are well. And one
Speaker 1: of my favorite parts of it is the ones to watch.
Speaker 1: We get to honor them as well. And you think
Speaker 1: about our buddy Paul Rabel. He was one to watch
Speaker 1: last week and lo and behold he went and created
Speaker 1: a massive new professional league. Well, that wraps up the
Speaker 1: first hour of the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. I'm Jason Kelly and I'm Carol Mass
Speaker 1: are plenty in our next hour, including a pushback on
Speaker 1: the c suite pumping up their pay with buy backs,
Speaker 1: that is a league good story. Plus Soros. Yeah, we're
Speaker 1: talking about George Soros and his fund. Sort of a
Speaker 1: different take these days. He used to be one of
Speaker 1: the biggest risk takers out there. Now his fun more conservative.
Speaker 1: The times they certainly are changing. This is Bloomberg. Hello,
Speaker 1: I'm Carol Massar and I'm Jason Kelly. Plenty ahead for
Speaker 1: you in this hour of the weekend edition of Bloomberg
Speaker 1: Business Week. We're gonna talk a little bit more about
Speaker 1: the Bloomberg fifty. That's right, folks. You need to know
Speaker 1: about an entertainment, business, politics, finance, science and technology. That's
Speaker 1: all to come. Plus we take a look at a
Speaker 1: different kind of housing crisis. We asked the question, is
Speaker 1: homelessness a crime? That is an issue, Carol, that may
Speaker 1: actually come before the Supreme Court before too long and
Speaker 1: may help define or dictate how America deals with this
Speaker 1: huge public crisis. Plus Vota phone, it's looking at a
Speaker 1: greener take on the smartphone. But first, Carol. Story in
Speaker 1: the finance section of the magazine this week about Soros
Speaker 1: fund management, and yes we mean that of or some
Speaker 1: long time investor George So that George Sorrows arguably one
Speaker 1: of the world's best known investors, but his namesake fund
Speaker 1: not the same without him or his family directly involved.
Speaker 1: Don Fitzpatrick, she's the c i O. Cathy Burton has
Speaker 1: the story of her tenure so far hasn't been awesome.
Speaker 1: To use a technical term, everything is not awesome everything
Speaker 1: now it has not. They've struggled pretty mightily with performance
Speaker 1: over the past three years since Dawn started in and
Speaker 1: remind us who she is, where she came from, and
Speaker 1: how she got to this job. She came from UBS.
Speaker 1: She ran the hedge fund business there as well as
Speaker 1: the equities businesses and some other businesses at the asset
Speaker 1: management part of UH. You of UBS, and she was
Speaker 1: chosen to run this new Sourros Fund Management, which is
Speaker 1: UH managing the money for the foundation, not for George
Speaker 1: and his family. Well, that's to take us to back,
Speaker 1: because I feel like there was a long period where
Speaker 1: George Soros could only do really smart things in terms
Speaker 1: of investments, right, and if you could work there, it
Speaker 1: was a really cool thing. So remind us of his
Speaker 1: kind of past. Sure, So, as you said, it used
Speaker 1: to be the major best performing hedge fund in the world,
Speaker 1: and George sat on top of it, he had great traders.
Speaker 1: They made tons of money, and then in sen he
Speaker 1: transferred most of his wealth to his foundation, and that
Speaker 1: meant the foundation was no longer managing money for George
Speaker 1: whipping it around. They had to be much more conservative
Speaker 1: because I didn't want to lose money. They just have
Speaker 1: to ensure that they can fund all their their projects
Speaker 1: every year. And that's such a key point because if
Speaker 1: you go back to the culture and the ethos of
Speaker 1: the original Soros, it was big, big bets. I mean
Speaker 1: huge bets that paid off in many cases unbelievably, but
Speaker 1: swinging for the fences a lot of ways. Right, Yes,
Speaker 1: absolutely absolutely. They made so many big bets. The biggest,
Speaker 1: most famous one was George betting against the pound. George
Speaker 1: and Stan drecon Miller betting against the pound in They
Speaker 1: made a billion dollars on that bet. And they bet
Speaker 1: ten billion dollars ten millions, ten billion dollars on that bet,
Speaker 1: and they wanted to bet fifteen. They just couldn't get
Speaker 1: it done, all right. So that's where George strows is
Speaker 1: so fast forward. And let's be fair, like the hedge
Speaker 1: fund world has changed dramatically and we've seen a lot
Speaker 1: of hedge funds either shut down or folks take the money,
Speaker 1: you know, kind of give it back to investors and
Speaker 1: just kind of have their own family offices, right, I
Speaker 1: mean the world has changed dramatically. Yes, it's much harder
Speaker 1: to make money. And now this isn't a hedge fund.
Speaker 1: It's been in a family office for several years now. Um.
Speaker 1: But now it even has to be more conservative because
Speaker 1: of the foundation, because it's the foundation's money. And that's
Speaker 1: where Don Fitzpatrick comes in. And that's exactly what you've
Speaker 1: been doing, because your story really reads well. I mean,
Speaker 1: she's gotten rid of a lot of managers. She's done
Speaker 1: a lot of big things already. Yes, she got rid
Speaker 1: of a lot of external managers because, um, for one,
Speaker 1: they weren't making a lot of money. And for two,
Speaker 1: she wanted to have more control of the capital. She
Speaker 1: wanted to be able to if there is a market dislocation,
Speaker 1: she says, she wants to be able to pounce on that.
Speaker 1: What does this tell us about almost like this generation
Speaker 1: of managers. Yes, we have seen that that that change
Speaker 1: going on in other parts of the industry. We have
Speaker 1: people who have left hedge funds because the clients have said, hey,
Speaker 1: your man, you have so much of your own money
Speaker 1: in here, and you're managing it like it's your money
Speaker 1: and you're too conservative. So we see that a lot.
Speaker 1: There is this transition of people who are getting ready
Speaker 1: to retire and as you say, have different needs and
Speaker 1: and that is changing the industry a lot well. And
Speaker 1: in terms of changes, I love how this story kind
Speaker 1: of kicks off that if you kind of want a
Speaker 1: job to go work with Don Right, you can maybe
Speaker 1: get it through a podcast, or at least they promoted
Speaker 1: getting a good job on a podcast. It was kind
Speaker 1: of unheard of, right, it was the past. It was
Speaker 1: very surprising. People said to me that they were very
Speaker 1: surprised when they heard about that or so, so that's
Speaker 1: what happened. Um that, Uh, Dawn came in and had
Speaker 1: this interview with Ted. Sid's a old hedge fund hand
Speaker 1: and and she wanted the message out there that that
Speaker 1: they were looking for talent. And it seemed very unusual
Speaker 1: that Soros Fund Management would ever need to advertise. This
Speaker 1: would have been a place that years ago people would
Speaker 1: have murdered other people to like get a job or
Speaker 1: even just get an interview. Um at Soros. So it's
Speaker 1: amazing how times has changed. So what happens next, Like,
Speaker 1: is this something where Dawn Fitzpatrick just sort of kind
Speaker 1: of weathers this storm and goes on. What was the
Speaker 1: sense you got from talking to her? Uh? The sense
Speaker 1: from her is that the board wants to look at
Speaker 1: her performance over five or seven in years. So and
Speaker 1: also I think that now that George is not involved
Speaker 1: in the money management, as long as she can more
Speaker 1: or less make the billion dollars that they need to
Speaker 1: spend every year, Um, she'll have the backing of the board.
Speaker 1: Has she done it so far? How long has she
Speaker 1: been there? She has been there since April, so almost
Speaker 1: three years. And she didn't do it last year. She's
Speaker 1: not She's maybe going to do it this year. And
Speaker 1: the first year was there they had a little surplus,
Speaker 1: so not net. They're probably just in line over those
Speaker 1: three years. And that's Kathy Burton. She knows all about
Speaker 1: hedge funds. Literally wrote the book on it, hedge Hunters
Speaker 1: back in the day where she profiled people like George
Speaker 1: Soros and really took stock of the industry. Then looked
Speaker 1: ahead and man, the industry has changed. Now you're listening
Speaker 1: to Bloomberg Business Week. Coming up, the Supreme Court is
Speaker 1: considering hearing a case that could make homelessness a crime.
Speaker 1: This is Bloomberg homelessness. You see it in a lot
Speaker 1: of major cities, especially where the cost of housing has
Speaker 1: become unaffordable for so many Jason, a current court case
Speaker 1: that could create a different kind of housing crisis. It
Speaker 1: feels like the government, businesses people just human beings. Residents
Speaker 1: of major cities especially are starting to look at this
Speaker 1: problem as much more complex than we did for a
Speaker 1: long time. No Abu Hier joins us from Seattle with
Speaker 1: the latest on this case and what it may mean
Speaker 1: for what certainly has become a crisis. So tell us
Speaker 1: about this case to start. Yeah, it's a It's a
Speaker 1: case that started about a decade ago in in Boise, Idaho,
Speaker 1: and UM six uh homeless people brought a case against
Speaker 1: the city basically saying that the UM the local ban
Speaker 1: on on camping in public places was on constitutional that
Speaker 1: represented cruel and unusual punishment because um basically there was
Speaker 1: no place for them to go. There weren't enough spaces
Speaker 1: and shelters UM and effectively they were being uh penalized
Speaker 1: for being homeless, which is something you can't do under
Speaker 1: the loft. This is so, this is this is wild
Speaker 1: And I think it could change dramatically based on your
Speaker 1: reporting in this court case of how we think about housing,
Speaker 1: because it really gets to righte Noah, the idea that
Speaker 1: housing is a basic rate. Yeah, I mean that's that's
Speaker 1: a larger question that looms over this case. It's the
Speaker 1: legal issue is much narrower. But just to complete the story, huh,
Speaker 1: the Boisey one in the in the at the district
Speaker 1: court level, but then it was appealed to the Ninth
Speaker 1: Circuit UM, which covers, you know, a giant swath of
Speaker 1: the US West from Alaska to Arizona, and the appellate
Speaker 1: court found UM in the favor of the homeless folks.
Speaker 1: So as a result, you have a ruling out there
Speaker 1: right now that UM says that these sorts of bands
Speaker 1: on public camping are unconstitutional. And it's it's a big
Speaker 1: deal because it's a ruling that goes far beyond boys now.
Speaker 1: It's something that matters to cities like Los Angeles and Seattle,
Speaker 1: and it's created a lot of discussion in UM cities
Speaker 1: throughout the West about how uh they can tackle this
Speaker 1: giant problem of homelessness well. And in your story, no uh,
Speaker 1: you do talk about some of what various cities have done,
Speaker 1: some of those cities you mentioned have done to try
Speaker 1: and combat this, especially at a time where if you
Speaker 1: talk to people in Los Angeles, San Francisco, Seattle, they
Speaker 1: talk about, even anecdotally, just this massive rise in homelessness,
Speaker 1: which obviously has something to do a large part to
Speaker 1: do with the affordability of housing. What have we seen
Speaker 1: those individual cities due to try and combat this so far?
Speaker 1: What you've seen, broadly on a national level is an
Speaker 1: uptick in these laws that that criminalize you know, camping
Speaker 1: or sleeping and in public. Now, this the the Ninth
Speaker 1: Circuit decision really really calls some of those into question,
Speaker 1: and it's it's made a lot of cities um back
Speaker 1: away from from those bands. Um. The question, though, long term,
Speaker 1: like the bigger question that looms over this case, is
Speaker 1: how are you going to solve homelessness. I think a
Speaker 1: lot of people in the in the West and across
Speaker 1: the country recognize that it's a problem, but there's a
Speaker 1: very robust and active debate about what you do about it.
Speaker 1: And you know, on the one side, the folks who
Speaker 1: are arguing on behalf of the homeless folks from Boise.
Speaker 1: They say that criminalizing people for sleeping on the streets
Speaker 1: when they have no other alternative is really counterproductive. There
Speaker 1: are tons of studies out there that show that if
Speaker 1: you take the cost of policing, emergency room visits and
Speaker 1: other UM costs on society into account, it's a lot
Speaker 1: less cost effective to basically approach chronic homelessness that way.
Speaker 1: It's much better to get people a house and then
Speaker 1: start working on mental health issues or substance abuse issues.
Speaker 1: All right, So, no, there's this Ninth Circuit Court decision.
Speaker 1: The thing at issue here is whether or not this
Speaker 1: is gonna go all the way to the Supreme Court, correct, right,
Speaker 1: So that could be decided as soon as this month. UM.
Speaker 1: There was a request for review that UM A legal
Speaker 1: team representing Boise, including UM ted Olson of Bush v.
Speaker 1: Gore Fame UM, filed in UH in August or September,
Speaker 1: I believe, and the Supreme Court UM could decide as
Speaker 1: soon as this month whether they're gonna hear that review
Speaker 1: and what ultimately are people doing or in the interim.
Speaker 1: You know, you mentioned that some cities and municipalities and
Speaker 1: states are trying to to sort of figure this out
Speaker 1: in the context of this decision. What could potentially happen.
Speaker 1: Are we talked more shelters. Are we talking about more
Speaker 1: affordable housing the cities or states or the federal government
Speaker 1: would force to be built. What are the potential solutions here?
Speaker 1: I think the reality on the ground right now there's
Speaker 1: a lot of uncertainty, and cities are approaching it in
Speaker 1: different ways because they don't want to run a foul
Speaker 1: of the Ninth Circuit's decision. They don't want to be
Speaker 1: sued and told, you know, and have a court find
Speaker 1: that their their ban is unconstitutional and they need to
Speaker 1: pay damages to to UM people who bring those suits.
Speaker 1: So UM on on a very basic level, you're you're
Speaker 1: seeing UM a questioning and a rethinking of how they
Speaker 1: approach these particular bands. Apart from that, I mean, it's
Speaker 1: not like places that have these bands weren't working on
Speaker 1: homelessness to begin with. There's a lot of work underway UM.
Speaker 1: But the proponents of UM the Ninth Circuit's decision basically
Speaker 1: say that it's an opportunity for cities to think about
Speaker 1: other ways of solving their crisis, which, as you said,
Speaker 1: it's a complex issue. It goes directly to housing of
Speaker 1: portability in a lot of these places, and there are
Speaker 1: other tools in the toolkit. UM. These advocates say, for
Speaker 1: for sities to deal with this, they can relax zoning
Speaker 1: rules so you can build more and cheaper apartments through
Speaker 1: UM cities where there's a lot of demand for housing. UH.
Speaker 1: You can increase subsidies so that people can you know,
Speaker 1: afford to live in places that have where the rents
Speaker 1: have gone up. And it's interesting too when you think
Speaker 1: about what it will mean nationally, you know, all of
Speaker 1: a sudden or not all of a sudden, but we're
Speaker 1: in a situation where these cities that are at the
Speaker 1: core of the economy in many ways, especially when you
Speaker 1: think about the importance of Los Angeles, Seattle, UH, San
Speaker 1: Francisco out there in the west, Las Vegas being another.
Speaker 1: You know, so much innovation, so much business and growth
Speaker 1: in economic growth has happened there, but it obviously has
Speaker 1: come at a cost. I think you see it right
Speaker 1: there in your backyard right now, right. I mean, I
Speaker 1: think there's a pretty wide acceptance now that booming economies
Speaker 1: are um. Part of the problem here. You don't have
Speaker 1: the sort of runaway growth and homeless populations without uh.
Speaker 1: You know, in Seattle, a thriving texting where you've seen
Speaker 1: the population grow by in a in a short number
Speaker 1: of years. Uh. Same for l A, where rents have
Speaker 1: gone up just a dramatic amount because um, the city
Speaker 1: has chronically underbuilt for its population growth. That's no buu hire.
Speaker 1: And of course, Jason joining us from Seattle, where we
Speaker 1: know homelessness is a really big problem. We see this
Speaker 1: in these major cities where there's been a lot of development.
Speaker 1: It's gotten so expensive to live there, and as a result,
Speaker 1: homelessness is on the rise. And especially when you think
Speaker 1: about the western part of the United States, this is
Speaker 1: a defining issue of our time, and you do wonder
Speaker 1: whether this will be a defining case for that issue. Yeah,
Speaker 1: asking a very important question if housing is a basic
Speaker 1: human right. You're listening to Bloomberg Business Week coming up
Speaker 1: after for and flight sham a phone shaming Carol. Maybe
Speaker 1: next it's all about a greener environment. This is Bloomberg,
Speaker 1: a green smartphone that you can repair yourself, not science
Speaker 1: fiction apparently, Jason Kelly, I love this idea because I
Speaker 1: am completely perplexed by my mobile phone and never opened
Speaker 1: it up and check it out inside, even more upset
Speaker 1: about how much I have to pay to get it
Speaker 1: fixed when it breaks. Stephan Nicola joins us from Berlin.
Speaker 1: He's got the answer to some extent. It's called the
Speaker 1: fair phone. What's going on? Well, the fair phone is
Speaker 1: uh yeah, the sustainable answer to all the other smartphones
Speaker 1: out there. Um, smartphones in general are pretty pretty bad
Speaker 1: when it comes to sustainability. They are, um, you know,
Speaker 1: built in questionable environments. They're using metals and minerals, mind
Speaker 1: in war zones, and it's basically impossible to recycle them
Speaker 1: or repair them, um meaning you know, they'll they'll they'll
Speaker 1: often get tossed and and that's not a good thing
Speaker 1: as we all know. Alright. So Stephen, I'm thinking that
Speaker 1: in this moment and movement, if you will, where I
Speaker 1: feel like folks are looking for greener solutions to everything.
Speaker 1: I'm curious why this hasn't happened sooner or taken off more.
Speaker 1: Tell us about kind of put it in perspective, because
Speaker 1: we sell what more than a billion smartphones kind of
Speaker 1: around the world. Yet this is just a small part
Speaker 1: of the market. Yes, the fairphone is still a niche product.
Speaker 1: Last year alone, one point four five billion smartphones were
Speaker 1: sold around the world, and the fair Phone has a
Speaker 1: modest target of selling one and fifty thousand models next year. Um. However, um,
Speaker 1: you know these products are catching on. The fairphone is
Speaker 1: special because its sources um sustainable minerals, from fair fair
Speaker 1: trade sources and from places where they ensure that there's
Speaker 1: no child labor or arm conflicts involved. It's using recycled plastics,
Speaker 1: and you can very easily take this phone out and
Speaker 1: and open it up and repair it yourself for a
Speaker 1: fraction of the cost you know getting your iPhone or
Speaker 1: Samsung Galaxy repaired. That alone blows my mind. So let's
Speaker 1: talk about that specific element to it, because that was
Speaker 1: the thing really jumped out of me exactly. I mean, so,
Speaker 1: how did they make something that one can actually fix oneself? Yeah?
Speaker 1: So basically, um, they have the problem which is, you know,
Speaker 1: when you have your iPhone broken, When your iPhone is
Speaker 1: broken and you want to repair it yourself, that's basically impossible.
Speaker 1: Not only will you not be able to open it,
Speaker 1: but also you'll avoid the warranty If you do it.
Speaker 1: So they try to come up with an entirely new
Speaker 1: modular design that makes that possible. You know, the phone
Speaker 1: chips with a tiny screwdriver that you can used to
Speaker 1: open the device and and very simply, very easily replace
Speaker 1: seven key components from the screen that we all know
Speaker 1: breaks easily, to the camera, to the battery, to all
Speaker 1: kinds of key components that usually you won't see or
Speaker 1: touch in other smartphones. So, Stephan, I think everybody who's
Speaker 1: listening and watching this interview wants to know, Okay, Jason's
Speaker 1: got two smartphones here, I've got one. We've got pretty
Speaker 1: probably close to the latest and greatest models that are
Speaker 1: out there. Um, So how does this compare, this green
Speaker 1: smartphone compared to kind of the smartphones we've all gotten
Speaker 1: used to. Of course, it doesn't compare when it comes
Speaker 1: to the you know, text backs with the latest iPhone
Speaker 1: all the flagship Samson Galaxy. It's a it's a step behind.
Speaker 1: It's it's a decent mid level phone, um at a
Speaker 1: price that slightly higher than mid level. It's said it
Speaker 1: will cost you four hundred and fifty euros um, but
Speaker 1: that you know, is a bit higher than comparable phones. Um.
Speaker 1: The screen is a decent screen that you know you
Speaker 1: would have seen maybe a year ago and in other models. UM.
Speaker 1: But the battery gets you through the day, UM. And
Speaker 1: the processor is UM. Yeah, also maybe from a phone
Speaker 1: that you would have brent you last year. But all
Speaker 1: in all, it's it can get you anywhere, it can
Speaker 1: do all the things you need. UM. And you have
Speaker 1: a sustainable alternative if that's what you're looking for. Well.
Speaker 1: And what I find so interesting about this story, Stephen,
Speaker 1: is this notion that while this phone has been hanging
Speaker 1: around for a while and people have essentially been ignoring
Speaker 1: it from a broad perspective, we are in this moment
Speaker 1: right now where people seem to be willing to pay up.
Speaker 1: People seem much more concerned about where their stuff comes from.
Speaker 1: How much will they be able to take advantage of
Speaker 1: this moment? Yeah, exactly. That that's the the whole, the
Speaker 1: big difference right now. UM. The fair Phone three, that's
Speaker 1: that's how the phone is called. Uh. And that that
Speaker 1: already suggests that there was a fair Phone one and
Speaker 1: a fair Phone to UM that that was introduced years ago,
Speaker 1: and they didn't sell that much of those, but they
Speaker 1: did sell them to a very committed community. And now
Speaker 1: things are changing as you As you said, consumers are
Speaker 1: becoming more aware of the sustainability in their products. And
Speaker 1: now voter Phone, Europe's biggest wireless carrier, has agreed to
Speaker 1: sell the smartphone in five of its key European markets
Speaker 1: where it has eighty million subscribers in total. So that's
Speaker 1: a big sales push for the fair Phone, and it
Speaker 1: gets the phone out in front of the consumer much
Speaker 1: more than it used to be. I mean that's another
Speaker 1: big difference, right that they finally have one of the
Speaker 1: biggest wireless carriers out there. I think they're the fourth
Speaker 1: biggest actually supporting them, right, that could be a game
Speaker 1: changer for them. Yeah, yeah, I mean, motor Phone is
Speaker 1: a key player in Europe. Uh, there's so many millions
Speaker 1: of wireless subscribers across the continent. And of course it
Speaker 1: has physical shops and stores where you can see the
Speaker 1: fair phone and touch it and and really you know,
Speaker 1: see that there and feel that there is a sustainable
Speaker 1: alternative out there and one that may get you through
Speaker 1: the day as well. Right well, And what's so interesting
Speaker 1: is ultimately this is going to be about I do
Speaker 1: like the idea of at least having the option to
Speaker 1: fix it myself. But what's interesting, Stefan, is this notion
Speaker 1: that ultimately you have to get the big phone makers
Speaker 1: behind it because a for availability and distribution, but also
Speaker 1: because their business model to date has really been built
Speaker 1: on cellphone. It wears out, we'll sell you another phone.
Speaker 1: I mean, this has been a volume game for to
Speaker 1: a large extent. Yes, it has, and of course the
Speaker 1: industry is still playing that game. Now there's pressure rising pressure,
Speaker 1: i'd say, on the industry to change that game somewhat,
Speaker 1: to change the rules a bit and and give me,
Speaker 1: you know, leave that buy and toss model every year
Speaker 1: a new smartphone or every two years at the latest,
Speaker 1: and that you know that model is seriously coming under pressure.
Speaker 1: So you know that's also a move by Voter Phone
Speaker 1: to have an alternative in its portfolio and show that
Speaker 1: it's you know, beginning to tackle some of those issues. Yeah,
Speaker 1: this whole idea of buying TASS right is just I
Speaker 1: think we've got to change it or what they call
Speaker 1: commercial electronic sustainability and be a little bit more official. Um, Stefan,
Speaker 1: thank you so much, great story, Thank you, good job,
Speaker 1: great job, really well. Thank you, thanks for being patient
Speaker 1: with us that the concept. Oh thank you so much
Speaker 1: for having me take care of We'll see you next time.
Speaker 1: So stocks often move higher on news of a buy back,
Speaker 1: and there are immediate benefits to shareholders, especially those on
Speaker 1: the inside. Jason, Well, that is the key point to this.
Speaker 1: They've always been seen to be good for shareholders, at
Speaker 1: least academically. But this is more complicated maybe than folks
Speaker 1: have thought about, and the SEC is thinking about it
Speaker 1: now more. At least one commissioner, Peter coy is here
Speaker 1: with us with the inside scoop. This is really fascinating
Speaker 1: because buy backs, they've been all the rage. They sure have.
Speaker 1: Buy Backs are more important than dividends. There's a way
Speaker 1: for companies to use their operating earnings to benefit shareholders,
Speaker 1: and they have been very quarter since something like fifty
Speaker 1: percent of operating earnings in the last short while have
Speaker 1: gone towards buy backs. And again, what we're talking about
Speaker 1: here is companies going into the open market buying their
Speaker 1: own shares well. And I feel like when a company
Speaker 1: announces it, think about it so many times after the
Speaker 1: closing bell, we're reporting it in our daily show and
Speaker 1: immediately see you see the stock kick up in the
Speaker 1: after hours and remind us of the mechanics of it
Speaker 1: again and sort of what what the effect of a
Speaker 1: buy back is? Well, what it does is we moves
Speaker 1: shares from the market so that the there's fear outstanding shares,
Speaker 1: operating earners haven't changed, so the earnings per share go up.
Speaker 1: And that's can be attractive to investors, and it's right,
Speaker 1: it's why investors like it. There's a lot of debate
Speaker 1: though about is that the best use of a company's
Speaker 1: money versus maybe investing in R and D, you're investing
Speaker 1: in their workers and so new plant or whatever. So
Speaker 1: there are two general criticisms of buy backs. The one
Speaker 1: you hear about a lot is exactly what you're saying
Speaker 1: here that companies should be doing other things with their money,
Speaker 1: is like, don't you have anything better to do with
Speaker 1: your money than just buy back your own shares? Don't
Speaker 1: you have a plant you ought to be building, some
Speaker 1: invention you ought to be making, and or don't you
Speaker 1: just pay you employees more? And so the liberal Democrats
Speaker 1: are very much on this theme, including two of our
Speaker 1: leading presidential candidates, Senators Elizabeth Warren and Bernie Sanders have
Speaker 1: signed on to legislation that would actually prohibit companies from
Speaker 1: buying back their own shares. So that's out there, kind
Speaker 1: of a known criticism. I'm not focusing on that there.
Speaker 1: I'll just say one thing though, is that there is
Speaker 1: a response to that. Um, the people will say, uh,
Speaker 1: you know, companies can really do bad things with their money.
Speaker 1: Sometimes it's better to take it away from the management,
Speaker 1: give it back to the shareholders, and let them deploy
Speaker 1: that money as I see fit, perhaps into fast growing
Speaker 1: startups that need money more than some old cash count
Speaker 1: because as you say, one of the benefits of this
Speaker 1: is that earnings per share go up, and that is
Speaker 1: ultimately what people are investing in, is that company's future earnings.
Speaker 1: So but but again that's not the focus of the story.
Speaker 1: Of the focus is on this other thing which has
Speaker 1: gotten less attention, which is what executives do when there's
Speaker 1: a buy back. And Robert Jackson is one of the commissioners,
Speaker 1: the sec not the chairman. He has commissioned his own
Speaker 1: staff to look into this, and what he found is that,
Speaker 1: as Carol said before Stockston to go put a buy
Speaker 1: back is announced, it's an expression of confidence by management
Speaker 1: in the future of a company. Right, So it's no
Speaker 1: wonder the stock goes up a bit. But what do
Speaker 1: executives do. They are more likely to sell their shares
Speaker 1: an immediate aftermath of this buy back announcement, taking advantage
Speaker 1: of that pop in the stock. So if you're a
Speaker 1: real cynic, you would say this is sort of a
Speaker 1: legal version of serving illegal pump and dump stock manipulation, right, right,
Speaker 1: So this is insiders, usually senior corporate executives, right, and
Speaker 1: directors that are taking advantage. So we're so there's been
Speaker 1: research out there that's showing that the insiders are selling
Speaker 1: right after the inction of a biback. There's always a
Speaker 1: steady dribble of selling by executives. You know, they're catching
Speaker 1: in the stock options on. What you see is a
Speaker 1: big jump, like fivefold increase in the dollar value of
Speaker 1: the stock sales right after eight days after a buyback
Speaker 1: announcement versus before, and the number of executives doing so
Speaker 1: is also up. So what does Jackson want to do
Speaker 1: about this? He has a very narrow tailored solution which
Speaker 1: seems kind of unobjectionable, which is no bar executives and
Speaker 1: directors other insiders from selling in the immediate aftermath of
Speaker 1: a buyback. He doesn't say exactly how very many days
Speaker 1: that should be, but as he says, you know who
Speaker 1: thinks it's a good idea for executives been doing this
Speaker 1: right after buybacks announced? Who who benefits from that? Except
Speaker 1: for those people? Because they are already restrictions right on
Speaker 1: when insiders can buy and sell chairs. Yeah, and so
Speaker 1: this would be knew then that they would not be
Speaker 1: allowed to do. How likely is Mr Jackson's change to
Speaker 1: be implemented? Well, I mean, I think what he's betting
Speaker 1: on is that articles and oppressed like this one Washington
Speaker 1: Post had a story on this recently, will start to
Speaker 1: generate some uh interest in this in the general public.
Speaker 1: So far, the Chairman of the SEC, Jake Clayton, has
Speaker 1: not gone along with this. He was asked about it
Speaker 1: by Senator Chris van Holland last year and kind of demurred,
Speaker 1: you know, I'm still willing to talk about this. I
Speaker 1: don't want to have a big roundtable about it. But
Speaker 1: you know, he's uh susceptible to political pressures like anybody else,
Speaker 1: and if the pressure amounts, you know, change and it
Speaker 1: comes at an interesting moment right where people are asking
Speaker 1: bigger and kndidly more complicated questions about who's got what
Speaker 1: at stake? Are executives really doing things in a holistic
Speaker 1: way that benefit everyone or is there just enrichment going
Speaker 1: on their own benefits precisely So, I mean it seems
Speaker 1: to me like a worthy topic that Robert Jackson has
Speaker 1: brought up. Yeah, I agree with you. I was thinking
Speaker 1: about that. Just this greater emphasis on either governance issues
Speaker 1: all of the stakeholders involved, and I think, you know,
Speaker 1: I think this is going to be something that people
Speaker 1: will be looking at more closely. Hey, I do want
Speaker 1: to ask you since we've got you the issue about
Speaker 1: the Bloomberg fifty and you nominated somebody and interviewed somebody
Speaker 1: for the GETA GETA. Gopinath is the chief economist of
Speaker 1: the International Monetary Fund in Washington. She's raised in India,
Speaker 1: um first woman to have the job as research director
Speaker 1: chief Economists of the i m F. She's a Harvard professor,
Speaker 1: has been since two thousand five. Got her PhD at Princeton.
Speaker 1: One of her advisers was Ben Bernanky. So she's got tree. Oh,
Speaker 1: she's super smart and she's been doing stuff too. She's
Speaker 1: just finishing her first year in the job and she's
Speaker 1: she's not slowing down. I mean she she dove right
Speaker 1: into some pretty serious issues. Well, and one of her
Speaker 1: main areas of interest is around the dollar, and it's
Speaker 1: sort of rolling the world. Tell us about that. Yeah,
Speaker 1: this is probably one of her key research, probably going
Speaker 1: back to before she joined the IMF. So the quick
Speaker 1: quick version is that lots of transactions in international commerce
Speaker 1: are denominated in dollars, even when neither the buying nor
Speaker 1: the selling nation uses the dollars. Some other country um
Speaker 1: so oil for examples, price in dollars. So there's a
Speaker 1: downside to that. If you're a fragile um say, emerging
Speaker 1: market country, and you your products of priced in dollars,
Speaker 1: are you're buying stuff in dollars, then your currency goes
Speaker 1: down Suddenly imports become more expensive, right, that's what happens.
Speaker 1: But your exports, because they're price in dollars, don't change
Speaker 1: in price there. You know, they're just dollars you're getting.
Speaker 1: So you you get hit on one end without any
Speaker 1: benefit on the other. And uh, it's it can be
Speaker 1: a real squeeze on some of these vulnerable countries, and
Speaker 1: like Peru and Brazil among other countries have gotten hit
Speaker 1: by this. So she's not out there advocating for any
Speaker 1: particular policy, because that's not her job. She's a research person.
Speaker 1: But it is interesting that she's pinpoint a real vulnerability
Speaker 1: that the dominance of the dollar creates well. And I
Speaker 1: think it's also interesting, especially in a year where we've
Speaker 1: been so focused on the U S. China trade wars,
Speaker 1: some of the research she did about who really bears
Speaker 1: the cost of higher tariffs, if you will, on Chinese
Speaker 1: imports and that that cost is being borne by US
Speaker 1: consumers and importers. Now that's almost become a commonplace in
Speaker 1: recent months. Other people have duplicated that research and found
Speaker 1: the same thing. But I m F was fairly early
Speaker 1: and making that point well. And she is an appointee
Speaker 1: or she was putting this job by Christine Legard, who, well,
Speaker 1: Christine Lagarde, you know, recommend her for the job, and
Speaker 1: she got approved and Christine Legard of Courses moved on.
Speaker 1: She's uh, but Legard obviously had faith in her as
Speaker 1: being the kind of person who could handle a job
Speaker 1: like that. I love to that part of her job
Speaker 1: she sees is kind of increasing the number of women
Speaker 1: who are economists and high profile positions. I mean, sound
Speaker 1: profession is one where women have not gotten their fair share.
Speaker 1: And uh, it's pretty clear that Janet yell And and and
Speaker 1: others have taken this on as a cause. And so
Speaker 1: she's she's one of the people you hope I become
Speaker 1: a role model for young women who might consider enter
Speaker 1: the profession. That's our economics editor, Peter Koy. I'm so
Speaker 1: glad we were able to talk to him about a
Speaker 1: couple of things. Of course, that very important story about
Speaker 1: stock by backs. We talked about it all the time
Speaker 1: here at Bloomberg. There's definitely arguments to be made for
Speaker 1: doing them and for not necessarily doing them, So I
Speaker 1: think it's important that we talked about. And then, of course, well,
Speaker 1: and you know, looking at one of the most influential
Speaker 1: economists out there, you know, someone who's really setting a
Speaker 1: different sort of tone, a designate in some ways of
Speaker 1: Christine Legarde. So you do wonder whether not just the
Speaker 1: tone of economics, but the look of economics may be
Speaker 1: changing long overdo Jason. She was the I m f
Speaker 1: s first female chief economist, and of course she's part
Speaker 1: of the Bloomberg fifty, a great list of people. We
Speaker 1: on Monday are going to be at the Bloomberg fifty event.
Speaker 1: We're gonna be at the red carpet doing a live
Speaker 1: radio broadcast speaking to many of the folks that are
Speaker 1: on that list. That's right. We'll be live six pm
Speaker 1: Wall Street time here in New York City. And if
Speaker 1: you don't catch us live, check out next weekend show.
Speaker 1: We're going to have the best of those interviews. Well,
Speaker 1: that's gonna wrap up the weekend edition of Bloomberg Business
Speaker 1: Week from Bloomberg Radio. Thanks so much for joining us.
Speaker 1: I'm Jason Kelly and I'm Carol Masser. Be sure to
Speaker 1: tune into Bloomberg Business Week Radio live Monday through Friday
Speaker 1: starting at two pm Wall Street Time. And I can't
Speaker 1: catch us lide check out our daily podcast and get
Speaker 1: that at Bloomberg dot com or wherever you get your podcasts.
Speaker 1: And of course you can get this week's edition of
Speaker 1: the magazine. It is on newsstands now. We'll be back
Speaker 1: right here next week at the same time. This is
Speaker 1: Bloomberg