Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Massier and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Welcome to the weekend edition of
Speaker 1: Bloomberg Business Week. I'm Tim Stanovic and I'm Paul Sweeney
Speaker 1: in for Karrol Master this week, Paul, another week of
Speaker 1: earnings reports behind us, and well, the majority have been positive.
Speaker 1: There are some economic growth fears that have been emerging. Wee.
Speaker 1: We've also been hearing this week from most of companies
Speaker 1: with guidance UH that has been disappointing, and we've seen
Speaker 1: as a result their stock falling. Exactly right. I think
Speaker 1: there's concerns about the next phase of the COVID nineteen pandemic,
Speaker 1: the delta variant, and I think it's all about the kids.
Speaker 1: Now more than seventy eligible US recipients have had at
Speaker 1: least one vaccine dose. That's a good news, but millions
Speaker 1: of children are preparing to return to classrooms across the country,
Speaker 1: and there's uncertainty over mask mandates and inoculation requirements for
Speaker 1: younger students, particularly those kids under the age of twelve. Yeah,
Speaker 1: we're also starting to see a playout with returns to office,
Speaker 1: with companies this week delaying September returns to office and
Speaker 1: some saying Okay, we're gonna wait and see, and some
Speaker 1: companies saying okay, well we'll wait a month. So things
Speaker 1: are not really going according to plan. We're gonna get
Speaker 1: into that, both on the education and medical perspective. We're
Speaker 1: also going to pull back the curtain on Beijing's ongoing
Speaker 1: tech crackdown to understand why that Chinese government is coming
Speaker 1: down so hard on its innovators. We're also going to
Speaker 1: talk to sim Bridge CEO Michael McGuire. This was a
Speaker 1: fun one. It's a digital asset exchange fund that's actually
Speaker 1: embracing cryptocurrency regulations and trying to get more of those
Speaker 1: institutional investors. Oh, that's to come. We begin with the
Speaker 1: magazine's cover story. The new issue of Bloomberg Business Wig magazine.
Speaker 1: It is available on newsstands now and at Bloomberg dot
Speaker 1: com Slash Business Week. The cover story, it's all about
Speaker 1: vaccine mandates for kids? Is it the next big back
Speaker 1: to school fight. Children have to get vaccinated for surgeent
Speaker 1: threats and it works, So why not with COVID? That's
Speaker 1: the big question. Joining us now is Joel Weber, editor
Speaker 1: at Bloomberg Business Week, Riley Griffin, his healthcare reporter for
Speaker 1: Bloomberg News. Joel, I want to start with you. I
Speaker 1: was really surprised to see the lack of vaccine uptake
Speaker 1: in kids who are ages twelve to seventeen only have
Speaker 1: received their first dose. What why is that? Yeah, there's definitely, um,
Speaker 1: a sense of of apathy and it has it's going
Speaker 1: to have some um, serious implications, I think, UM in
Speaker 1: the next weeks and months, especially as we're dealing with
Speaker 1: this delta surge. You know that apathy is it's sort
Speaker 1: of multifaceted and and some of that we go into
Speaker 1: in the story. Um. The fact that kids haven't been
Speaker 1: quite as susceptible yet is to COVID is I think
Speaker 1: one of the driving reasons. UM. There's also I think
Speaker 1: a feeling that the vaccines currently have emergency youth authorization,
Speaker 1: So I think there's still some vaccine hesitancy or around it. UM.
Speaker 1: And we've seen you know, other countries even take slightly
Speaker 1: different approaches to how kids are supposed to be vaccinated.
Speaker 1: So I think they're that all creates a little bit
Speaker 1: of a fog that has um led to a slow adoption.
Speaker 1: And I think where Riley and Susie King King story
Speaker 1: goes here is an important one because as we're just
Speaker 1: seeing now with New York mandating vaccines for for restaurants,
Speaker 1: for instance, in the not so distant future, we could
Speaker 1: very easily see schools mandating vaccines. And one of the
Speaker 1: main questions that um, Riley, I'd like you to oppose
Speaker 1: to you is, you know, look like kids get vaccinated
Speaker 1: for all sorts of things that are far less urgent
Speaker 1: than COVID. So could we potentially see schools mandating COVID immunization. Absolutely,
Speaker 1: I mean, I think that's a great question, and it's
Speaker 1: one that we've seen play out, and there's precedent four.
Speaker 1: I mean, educators are having a debate on their hands
Speaker 1: right now as to whether to implement mandates and COVID
Speaker 1: nineteen vaccines as they routinely do for measle, polio and
Speaker 1: other diseases, or to punt because of politics and let
Speaker 1: parents decide. This has really become so political, UM, in
Speaker 1: part because of that emergency use authorization that you described.
Speaker 1: But once there's a full approval in place, I have
Speaker 1: no doubt that schools um at the request of states,
Speaker 1: are going to put similar requirements in place. UM. This
Speaker 1: is really just a part of the bedrock of our
Speaker 1: education system, and any parent listening knows that to be true. UM.
Speaker 1: And these mandates persist even though they've been so successful
Speaker 1: that the risk of contracting some of the illnesses they
Speaker 1: cover is almost non existent. You know, what I like
Speaker 1: to put in perspective is that the last US case
Speaker 1: of polio dates back to and yet all fifty states
Speaker 1: in the District of Columbia require kids to get vaccinated
Speaker 1: with a polio shot before going to school. Riley, You know,
Speaker 1: I fear that this is going to get really, really
Speaker 1: ugly and really personal and really localized. Do we have
Speaker 1: any evidence or do we have any precedent here for
Speaker 1: a COVID nineteen requirement, because we've got a lot of
Speaker 1: states I'm thinking in the South and the West, they're
Speaker 1: going back to school. If they're they're not already back,
Speaker 1: they're going back in the next week or two. Yeah,
Speaker 1: So what we have right now is a legal vacuum
Speaker 1: because we've never seen before a mandate put in place
Speaker 1: for an emergency use authorized vaccine. That's not to say
Speaker 1: states can't do it. They are just a little hesitant
Speaker 1: to wade out into those tumultuous waters. But let me
Speaker 1: take you back into history for a moment, because in
Speaker 1: nineteen o five, the U. S. Supreme Court ruled to
Speaker 1: say that mandates are allowed, that states can require vaccination,
Speaker 1: and that individual liberties are not absolute, that the average
Speaker 1: person cannot say, hey, in the face of a public
Speaker 1: health pandemic, we are going to reject a vaccine mandate.
Speaker 1: And the first mandate actually for school kids goes back
Speaker 1: even further to eighteen fifty five. So there's a great
Speaker 1: deal of precedent um schools themselves to know that this
Speaker 1: could likely be coming. I've spoken with many administrators who
Speaker 1: said they're just waiting to get more parents on board.
Speaker 1: They want to bolster trust and confidence, especially while we
Speaker 1: still have that EU A status that was US Health
Speaker 1: Reporter Riley Griffin, also the editor of Bloomberg business Week.
Speaker 1: Joe Weber coming up more on this important issue from
Speaker 1: someone on the front lines. Dr Elizabeth Mead of Swedish
Speaker 1: Health Services in Seattle on the progress being made toward
Speaker 1: getting young children safely vaccinated against COVID. You're listening to
Speaker 1: Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Bloomberg Quick Tags, Tim Stenovac and Paul Sweeney
Speaker 1: from Bloomberg Radio. Okay, it's all about when you think
Speaker 1: about the narrative of this pandemic, how it's evolved, how
Speaker 1: it's had an arc since the beginning. I think now
Speaker 1: where we are in the narrative is the delta variant
Speaker 1: and vaccinations, getting people vaccinated, geting who vaccinated, how young,
Speaker 1: how old? Uh, it's now turning towards the very youngest.
Speaker 1: We think about getting back to school, and there's lots
Speaker 1: of discussions and arguments to be made on both sides.
Speaker 1: Dr Elizabeth Me joins us. She's medical director of Pediatric
Speaker 1: Quality and Safety at the Swedish Health Services, joining us
Speaker 1: on the phone from Seattle. Uh. Dr Me, thanks so
Speaker 1: much for joining us here. I guess you know, lots
Speaker 1: of parts of the country are just about going back
Speaker 1: to school, and know California starts a week from monday. Uh.
Speaker 1: Here on the East coast, it's it's right after a
Speaker 1: labor day. But the discussion is who should get vaccinated
Speaker 1: as we think about back to school? Should we be
Speaker 1: should we be getting kids vaccinated? And how young? You know,
Speaker 1: I think absolutely. What we recommend is that kids twelve
Speaker 1: and over who are eligible for the vaccine get the
Speaker 1: vaccine and get it. You know. The reality is that
Speaker 1: it takes several weeks between a couple of doses and
Speaker 1: man fual immunity two weeks after that second dose. And
Speaker 1: so for many kids who haven't gotten the vaccine yet,
Speaker 1: we're already sort of talking about post going back to
Speaker 1: school dates for them to be fully fully protected. The
Speaker 1: cover of the new issue of Bloomberg Business Week, it's
Speaker 1: all about vaccine mandates for kids, and there's some pretty
Speaker 1: startling uh statistic in here. Uh the rollout of shots
Speaker 1: to millions of kids ages twelve to seventeen. Although they
Speaker 1: account for seven point five percent of the U S population,
Speaker 1: it's really lagged only of that group has received their
Speaker 1: first dose. Uh. Why is that doctor made? Why are
Speaker 1: we seeing this reluctance from parents to inoculate their kids
Speaker 1: when uh, we think about vaccines in the early parts
Speaker 1: of our lives. That's when we get the most vaccines. Yeah,
Speaker 1: that's right, you know. I think there are a couple
Speaker 1: of factors that play into that. And so one of
Speaker 1: those factors, I think is that we know that older
Speaker 1: adults tend to get sicker, right, and so we know
Speaker 1: that although kids can get very thick, can end up
Speaker 1: in the i C. You can die from COVID and
Speaker 1: have long COVID and all those other complications that we
Speaker 1: think about, the rates of that happening in children and
Speaker 1: teens are significantly lower than an older adults. And so
Speaker 1: I think that for many people who are high risk,
Speaker 1: you know, they want to get the vaccine for themselves
Speaker 1: as soon as possible, and they may think differently about
Speaker 1: it when it comes to their kids. I think the
Speaker 1: other factor here is that we know it's hard to
Speaker 1: make a health care decision for yourself, and it's even
Speaker 1: harder to make it for someone else, and so people
Speaker 1: I think are feeling like they want to make sure
Speaker 1: they have all of their questions before they proceed with
Speaker 1: vaccines for their children. Dr me, what do we know
Speaker 1: about how young we can we can give this vaccine
Speaker 1: to a person? How young can they be mentioned twelve
Speaker 1: and older, how about some of the younger kids. Yeah,
Speaker 1: so at this point it's approved for twelve and over,
Speaker 1: we anticipate that it will be approved for younger children,
Speaker 1: probably down to age five, potentially down to age two,
Speaker 1: by kind of early to mid fall, And I know
Speaker 1: that a lot of parents are desperately waiting for those
Speaker 1: dates to get their younger children vaccinated. And the reality
Speaker 1: of this pandemic is that I think even for families
Speaker 1: where everyone who's eligible we have had the vaccine, so
Speaker 1: everybody twelve and older and then the adults in the household,
Speaker 1: many of those families still have younger children who are
Speaker 1: not yet eligible. And so I think it's hard to
Speaker 1: sort of feel like we can get back to life
Speaker 1: as normal for our families when we still have one
Speaker 1: or more young children that aren't yet able to get
Speaker 1: the vaccine who are living in our houses. Doctor. Back
Speaker 1: in May, Dr Fauci, the nation's top infectious disease doctor,
Speaker 1: he said that by the first quarter of two, we're
Speaker 1: going to have quote enough information regarding safety and immunogenicity
Speaker 1: to be able to vaccinate children at any age. Do
Speaker 1: you agree with that timeline that in the first part
Speaker 1: of next year, we're going to be able to vaccinate newborns. Yeah,
Speaker 1: I think that rings true for the most part. I mean,
Speaker 1: we know that there are ongoing trials down to age
Speaker 1: six months for multiple of the vaccines, and so we
Speaker 1: anticipate having quite a bit of safety data even down
Speaker 1: to unions. And I would guess that it will be
Speaker 1: very similar to the flu shot, and so for the
Speaker 1: flu shot, we start giving that at six months and older.
Speaker 1: So I'm not really convinced that we're going to be
Speaker 1: vaccine new borns against COVID anytime soon, but I think
Speaker 1: those young infants kind of six months and older will
Speaker 1: certainly be in the next way. What do we know
Speaker 1: about dosage? I was surprised when when my son got
Speaker 1: his first flu shot that he got two of them
Speaker 1: separated a few months apart, whereas I only got one,
Speaker 1: and it was like he got double dosage basically, So
Speaker 1: for that first year, for any child who's seven or younger,
Speaker 1: for that first year, we recommend getting two doses a
Speaker 1: month apart to really kind of stimulate the immune system
Speaker 1: because for many vaccines, that first sort of primed you,
Speaker 1: and then that second doses really what confers the full
Speaker 1: immunity and after that we consider that yearly dose sort
Speaker 1: of a booster, and so it may be the same
Speaker 1: with with COVID. You know, we're already talking about potentially
Speaker 1: having boosters for high risk groups that have already received
Speaker 1: the two vaccine series, so I think it will be
Speaker 1: probably fairly similar to that. Dr me just quickly, do
Speaker 1: you think schools will mandate vaccinations. I don't see that
Speaker 1: happening personally until they help full FDA approval for the
Speaker 1: age groups that we're talking about, and so I think
Speaker 1: at that point we can really have that discussion. But
Speaker 1: in my mind, it is unlikely to happen until we
Speaker 1: reached that milestone, and hopefully that will be in the
Speaker 1: next few months. Dr mead, we like talking to people
Speaker 1: who are in hospitals, who are on the ground, who
Speaker 1: are talking to patients, who are working with patients, just
Speaker 1: to get an update from the front lines. Are you
Speaker 1: seeing younger and younger patients in your hospital than at
Speaker 1: other points during the pandemic? We really are, you know.
Speaker 1: I'm a I'm a hospital pedatrician, so I only work
Speaker 1: in a hospital. I see newborns up to eighteen who
Speaker 1: are sick, who are hospitalized. And I will tell you
Speaker 1: that throughout the pandemic, although the rates are lower than
Speaker 1: in adults and especially older adults, we have seen young infants,
Speaker 1: kids and teens who are hospitalized who are very ill
Speaker 1: with COVID, who are in the ICU, kids who are
Speaker 1: having long COVID symptoms. So although the rates are lower,
Speaker 1: I think it's really important to reinforce for people this
Speaker 1: is still a disease that can cause really critical illness
Speaker 1: in newborns all the way through those those children and
Speaker 1: teenage years. So Dr Me, what are when you do
Speaker 1: see these patients and you know, are most of them unvaccinated?
Speaker 1: And if so, what are some of the typical reasons
Speaker 1: that you're finding uh in your hospital? You know, the
Speaker 1: majority of patients that are showing up to the hospital
Speaker 1: that are very sick, that are ending up in the
Speaker 1: ICU with the Delta variant in particular, are on vaccinated.
Speaker 1: So we know that the vast majority of those statients
Speaker 1: have not received the vaccine. And I think that's such
Speaker 1: an important point because we know that although people who
Speaker 1: are vaccinated can transmit the Delta variant, they are vastly
Speaker 1: less likely to end up with severe symptoms in the
Speaker 1: hospital in the I CU or to die from COVID. Right, So,
Speaker 1: what we're seeing across the country is that it seems
Speaker 1: to be the skewing now to younger people who are
Speaker 1: not vaccinated, so teens and all wo young adults, to
Speaker 1: people in their twenties and thirties who have not received
Speaker 1: the vaccine who are ending up in the hospital and
Speaker 1: who are very, very very sick from the delta variant
Speaker 1: in particular. Talk to me just in the last seconds
Speaker 1: that we have, what do you tell parents who come
Speaker 1: to you concerned that their kids under twelve can't yet
Speaker 1: be vaccinated and they're concerned about them actually getting COVID.
Speaker 1: I have so many parents who have that concern, who
Speaker 1: are just desperate for the vaccine to be approved for
Speaker 1: their younger children. We have a six year old in
Speaker 1: my house who's not yet eligible, who can't wait until
Speaker 1: he's able to get the vaccine. And I think that's
Speaker 1: actually the majority of parents that I is who are
Speaker 1: really saying, you know, the older kids are vaccinated, or
Speaker 1: I'm vaccinated, I just can't wait until my younger kids
Speaker 1: can get this so that we can really feel like
Speaker 1: our whole bottle and our whole family is protected, and
Speaker 1: my great hope is that that will happen really within
Speaker 1: the next couple of months. That was Dr Elizabeth Mead.
Speaker 1: She's the medical director of Pediatric Quality and Safety at
Speaker 1: Swedish Health Services. She joined us from the Emerald City.
Speaker 1: Still ahead on Bloomberg Business Week, we'll shift gears and
Speaker 1: take a look at the housing market and it is
Speaker 1: a great time to be a seller where the buyers
Speaker 1: are flocking and what it means for our major urban centers. Yeah,
Speaker 1: perhaps not a great time to be a buyer as
Speaker 1: prices just continue to go up. We're gonna be speaking
Speaker 1: to Compass real Estate founding agent Stephanie Malius. This is
Speaker 1: Bloomberg Broadcasting from the financial capital of the World, Bloomberg
Speaker 1: Eleve in Rio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one O six one does San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius xm CHEDO one
Speaker 1: nine team and a on the globe, the Bloomberg Business
Speaker 1: app in Bloomberg Radio dot com. This is Bloomberg Business
Speaker 1: Week with Bloomberg Quick Takes, Tim stinebec and Paul Sweeney
Speaker 1: from Bloomberg Radio. So something that happened to me in
Speaker 1: my own world in the last year, Paul has been
Speaker 1: that several friends have left New York City and gone
Speaker 1: to the suburbs. One did it much sooner than the other.
Speaker 1: The other one they both bought in White Plains, had
Speaker 1: the toughest time you have finding a place. They were
Speaker 1: getting outbid every weekend by people going all cash, all
Speaker 1: young families who wanted to leave New York City and
Speaker 1: get more spaces. More and more people are working from home. Yeah,
Speaker 1: it's just extraordinary. We you know, we just sold our
Speaker 1: our home in North Jersey and it sold very quickly,
Speaker 1: and it just confirmed the really really strong market out
Speaker 1: there for a residence for sellers. Yes, it's a right
Speaker 1: time to be a sellable. Well, let's get right to
Speaker 1: it with Stephanie Malio's realtor and founding agent at Compass
Speaker 1: Real Estate in Short Hills, New Jersey. Stephanie, was that
Speaker 1: a fair characterization of the way that you're seeing the
Speaker 1: market right now in the suburbs. And absolutely that's exactly
Speaker 1: what we've been experiencing in this area. South Orange, Maplewood, Summit, Livingston, Chatham,
Speaker 1: all all the counties Essex Morris Union counties have all
Speaker 1: seen a tremendous amount of activity from people kind of
Speaker 1: accelerating their timeline on maybe they were going to move
Speaker 1: in three to five years and now they're moving right now. So, Stephanie,
Speaker 1: I want to get a sense of kind of some
Speaker 1: of the drivers here. I guess it's it's some combination
Speaker 1: of boy historically low interest rates and in the mortgage market,
Speaker 1: plus the pandemic, and then the need for space and
Speaker 1: people rethinking working from home and all of that. So
Speaker 1: as you talk to your clients, what are you hearing
Speaker 1: as the primary driver. Well, for a lot of them,
Speaker 1: they've been working from home, but if they have kids,
Speaker 1: they've also been schooling from home, and that is really
Speaker 1: sort of untenable in a one or two better apartment
Speaker 1: with two adult parents working from home and one or
Speaker 1: two kids schooling from home. So it's not possible. I mean,
Speaker 1: it's possible, but it's not fun. One of the challenges though,
Speaker 1: that comes with such a hot market is the people
Speaker 1: who are selling needs somewhere else to go. And I
Speaker 1: wonder when prices just get so high. As they've continued
Speaker 1: to climb that people who do want to move somewhere
Speaker 1: else and already own, they are priced out of their
Speaker 1: own area because prices have gone up so much. That's
Speaker 1: absolutely happening here. But there's been a huge growth of
Speaker 1: luxury apartment rentals built in the region. Um, anywhere where
Speaker 1: you could sort of stick a hundred or two hundred
Speaker 1: units in a little funny area. UM, people are building
Speaker 1: them and here they are, they're ready. So UM number
Speaker 1: of people in certain generations that would never have considered
Speaker 1: renting because it's just sort of against the law to
Speaker 1: rent and pay somebody else's mortgage. Um, that mindset has
Speaker 1: changed quite a bit, especially when the tax flaw has
Speaker 1: change and you could no longer write off more than
Speaker 1: ten tho dollars or you're property tax and in this
Speaker 1: area red please yeah no kidding me too. So they're like,
Speaker 1: you know, let's just take our money off the table.
Speaker 1: We'll just rent for a year or two. I was
Speaker 1: just with somebody who's scaling down from a four million
Speaker 1: dollar house in Shorthills, thinking they'll rent for a year
Speaker 1: and see what happens, and maybe they'll buy something smaller
Speaker 1: and renovated, or maybe they'll relocate. They don't know, but
Speaker 1: they like the fact that they can be liquid and
Speaker 1: act quick when they're ready. Stephanie, what do you think
Speaker 1: would or will derail this hot market? Well, interest rates
Speaker 1: going up doesn't help, but often that stimulates people to
Speaker 1: act because funny enough is interest rates stay very low,
Speaker 1: or when they're declining, everyone thinks they have all the
Speaker 1: time in the world to find something, and when they
Speaker 1: go back up, that's when they realized they missed the
Speaker 1: bottom and oh they better scramble and get in. So
Speaker 1: sometimes having low interest rates doesn't spur activity. But in
Speaker 1: this time period with school about to start, anyone with
Speaker 1: children going into school this year, they want to make
Speaker 1: sure that because are going to be in a seat,
Speaker 1: and that's not necessarily guaranteed in the suburbs, but I
Speaker 1: think a lot of people think there's a better likelihood
Speaker 1: that they'll be in a seat in a classroom with
Speaker 1: a live teacher in these kind of areas where schools
Speaker 1: have always been very highly prized and focused on. You
Speaker 1: mentioned a lot of areas that have been of interest
Speaker 1: to a lot of people for years. I'm wondering, are
Speaker 1: there areas now that people should be paying attention to
Speaker 1: if they get priced out of the Summits and the
Speaker 1: short Hills is well, a lot of those people are
Speaker 1: actually moving to Harding Township, which is also known as
Speaker 1: New Vernon, which is very low taxes and very big
Speaker 1: properties and large homes because they realized that the need
Speaker 1: to be close to the community is no longer as
Speaker 1: important to them, so they're more willing to go sort
Speaker 1: of a country route as opposed to the suburbs. Whereas
Speaker 1: someone coming out of Brooklyn or Jersey City, they might
Speaker 1: not be quite prepared for a fifteen minute drive to
Speaker 1: civilization a like a supermarket, but for someone who's already
Speaker 1: lives here, they kind of get it. So if they
Speaker 1: really don't think they need that, they're willing to make
Speaker 1: that kind of a trade. And especially you're seeing a
Speaker 1: lot of people who normally would be thinking about scaling
Speaker 1: down at this point or downsizing we call it right sizing,
Speaker 1: but they're thinking, you know, let's go to a bigger
Speaker 1: place where if our kids right out of college have
Speaker 1: to move back in with us again, there's room for them.
Speaker 1: That was Stephanie Maleos, she's a founding agent at Compass
Speaker 1: Real Estate. You're listening to Bloomberg Business Week. Coming up next,
Speaker 1: we're gonna talk to have an e commerce retailer that's
Speaker 1: pioneering art curation for the Instagram generation. A conversation with
Speaker 1: art Sugar CEO Alex Greenberg. This is Bloomberg. This is
Speaker 1: Bloomberg Business Week with Bloomberg Quick takes, Tim's Dnebeck and
Speaker 1: Paul Sweeney from Bloomberg Radio. Online art sales. I didn't
Speaker 1: really know it was a thing, but it really is.
Speaker 1: Only art sales doubled in value from to reach a
Speaker 1: high a twelve point four billion dollars and Americans planned
Speaker 1: to redecorate in so the whole home art home decor
Speaker 1: is a big marketing and his growing and I want
Speaker 1: to bring on Alex Greenberg. Alex is chief executive officer
Speaker 1: of art Sugar. Joins us on the phone from Nantucket,
Speaker 1: which I understand is very It's not the Jersey Shore,
Speaker 1: of course, but it's very nice. I understand. Alex. Thanks
Speaker 1: so much for taking the time to join us. Love
Speaker 1: for you to just start and say, what is art Sugar?
Speaker 1: What do you guys do? Suren, Thanks so much for
Speaker 1: having me. Um, it's great to chat. Art Sugar is
Speaker 1: the curated e commerce platform for exclusive, eye catching artwork
Speaker 1: and home decore objects, and with each purchase, we donate
Speaker 1: a portion of the proceeds to one of our vet
Speaker 1: A charitable partners. UM. I come from the fine art
Speaker 1: world where it's a little untimidating, so I wanted to
Speaker 1: do something different and this site is basically saying, like
Speaker 1: art for everyone, and we want to meet um all
Speaker 1: our customers need affordably and accessibly. Who's your target market here?
Speaker 1: Who's your like, your typical buyer female? UM, the age
Speaker 1: twenty four to thirty eight. That's really our free spot
Speaker 1: that we run the gamut that I say our market
Speaker 1: is predominantly female, and what are some of the okay,
Speaker 1: so is this for the folks who maybe you know,
Speaker 1: they don't want to buy stuff that you know they
Speaker 1: could get in a big box retailer, but maybe they're
Speaker 1: also not going to walk into a south apiece, right exactly.
Speaker 1: It's sort of like bridges that from the big box
Speaker 1: sort of not unique approach, sort of like the Live
Speaker 1: Last Love that may not be trendier on the pole, UM,
Speaker 1: and you know it's at an affordable price point, you know,
Speaker 1: way more affordable than something you know on the fine
Speaker 1: art end where um, you know, our our buyers aren't
Speaker 1: buying at that price point yet or don't want to,
Speaker 1: or maybe we'll graduate to that eventually. But this is
Speaker 1: really if you want to decorate your home in a
Speaker 1: really cool way without breaking the bank. What is the
Speaker 1: average price point for you know, a piece of art
Speaker 1: on on that that you would curate right now? Our
Speaker 1: average order value is people generally buy a few things
Speaker 1: when they shop. I'd say the average though price the piece.
Speaker 1: Maybe it's one fifty um on the site. Now, you know,
Speaker 1: it's amazing. When I was just I saw that the
Speaker 1: data point about online art sales twelve point. It's just extraordinary,
Speaker 1: you know, just brought stepping back, not necessarily for the
Speaker 1: your business. But are people paying on big price points
Speaker 1: for fine art? Are they actually doing that online? I
Speaker 1: believe they are. We're not in our trigger isn't catering
Speaker 1: to that market where people are spending you know, fifteen
Speaker 1: dollars on a piece of art. It's really for you know, um,
Speaker 1: a new art collector, young art collector, or someone who
Speaker 1: just wants to elevate their home, you know, and um affordably.
Speaker 1: I saw our sales during covid Um grow eighty percent.
Speaker 1: So I think that just see people being home more,
Speaker 1: you know, willing to sort of. I don't think it's
Speaker 1: really a risk to buy online because these teachers are
Speaker 1: definitely pre approved, pre added, but they want to you know,
Speaker 1: uplift the space they're kind of stuck in. But also,
Speaker 1: you know what makes you think like, oh, I really
Speaker 1: should be you know, decorating my home. I haven't gotten
Speaker 1: to it yet, and now I'm finally ken UM. So
Speaker 1: I think that there's a lot of things that work here.
Speaker 1: And Alex, do you and end or your team are
Speaker 1: you the ones that are picking out the pieces and
Speaker 1: curating the on your site? So it's it's me, I'm
Speaker 1: the founder and it's actually just in me on my
Speaker 1: team since I actually made my first offer day after
Speaker 1: getting UM some investors last month. UM. But we have
Speaker 1: we work with celebrities and influencers to curate collections on
Speaker 1: the site so that they're you know, the collections are
Speaker 1: sort of pre approved, and it makes for a really
Speaker 1: easy UM buying experience for our customer to you know,
Speaker 1: maybe it's their first art or purchase ever, and you know,
Speaker 1: they you know, they don't know where to start and
Speaker 1: it's sort of like helps the process move along. So, Alex,
Speaker 1: your e commerce platform for home decorps, every Day Art,
Speaker 1: I guess you would call it UM needs capital. You
Speaker 1: just had a seed round? Tell us about that? Yes, yes,
Speaker 1: so UM. As I mentioned, my business grew eight percent
Speaker 1: from March two thousand and twenty and it was just
Speaker 1: me and all of a sudden, I mean not overnight,
Speaker 1: but almost overnight, the business grew a ton and I
Speaker 1: had always thought I would go for capital, but I
Speaker 1: didn't know when I would be ready, And finally I
Speaker 1: knew what it was ready. So I spoke to UM
Speaker 1: a few vcs. I met the one that ended up
Speaker 1: investing through Instagram, which was really on brand way for
Speaker 1: both of us, because sixty six percent of my revenue
Speaker 1: comes from my Instagram account. Um art sugar dot co
Speaker 1: is the handle. And uh, this person who's an influencer
Speaker 1: was liking my photos and I noticed her because she
Speaker 1: has like ninety thousand followers, and then I said she
Speaker 1: was an investor and she loves art and color, and
Speaker 1: we directed message through Instagram and I ended up pitching
Speaker 1: to her and she was like in and spoke for
Speaker 1: like nine months on the phone and resume, and we
Speaker 1: close our deal at the beginning of July. And what
Speaker 1: are you going to use what are you going to
Speaker 1: use this capital for? I am going to use UM
Speaker 1: the capital for hiring someone. I actually just put my
Speaker 1: first offer out. It's really excited about that and she
Speaker 1: accepted it. UM and Marketing a bit of a rebrand
Speaker 1: for the business and customers more. UM focus on customer
Speaker 1: service platform and customer service touchpoints, just like a better communication.
Speaker 1: It's really important to me that the customers are happy,
Speaker 1: so I am I'm investing in that too, and UM
Speaker 1: more collaborations with other businesses and artists and then also
Speaker 1: focus on on on in house designs and UM and
Speaker 1: products interesting. So the you know, this online kind of
Speaker 1: e commerce driven home to core art businesses. It's a
Speaker 1: niche that I don't you know that. I think you've
Speaker 1: identified where folks maybe don't want to go to a
Speaker 1: big box retailer find home decor, but then then and
Speaker 1: and artwork for it to hang on the walls. But
Speaker 1: talk to us about how the you'd take your business grew.
Speaker 1: I'm sure a lot of that was driven by the
Speaker 1: fact that a lot of folks are saying, well, I'm
Speaker 1: gonna spend spending a lot more time in my home,
Speaker 1: whether it's an apartment or house, right exactly, and I
Speaker 1: better s sprice you know, Spruce's place up. Talk to
Speaker 1: us about how the pandemic impacted your business. Yeah, the
Speaker 1: pandemic obviously unfortunately forced everyone inside their homes. And I
Speaker 1: think that sometimes decorating it is put on the back
Speaker 1: burner because people are really busy in their lives and
Speaker 1: it's not necessarily you know, a focus our priority, And
Speaker 1: all of a sudden it became one because you're kind
Speaker 1: of sitting in that space and um, you want to
Speaker 1: elevate your walls. But also maybe with uplifting product and design,
Speaker 1: which is what art Sugar cells. You know, you have
Speaker 1: a very uplifting, happy aesthetic, and um, it sort of
Speaker 1: was the right time to kind of shop on chop
Speaker 1: on our sugar. And also during the pandemic. I think
Speaker 1: it was last March. Actually I just launched home decor.
Speaker 1: Before I hadn't done that, it was only wal Art,
Speaker 1: So the decor also, you know, gave us a bit
Speaker 1: of an edge during pandemic. That's our trigger CEO Alex Greenberg.
Speaker 1: That wraps up the first hour of the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. I'm Paul Sweeney
Speaker 1: in for Carol Masser and Tim Steadivak. Coming up in
Speaker 1: our next hour, Takeaways from SEC Chairman Gary Gensler's first
Speaker 1: extensive interview about the digital money craze. Our financial investigations
Speaker 1: team goes inside the federal government's plans for cryptocurrency regulation.
Speaker 1: When you look across the crypto universe right now, and
Speaker 1: taking Bitcoin out of that, there's all these tokens that
Speaker 1: exist in the world, and a majority of those are securities.
Speaker 1: And because their securities, that means that they fall under
Speaker 1: the SEC is REMIT, and that means that if they're
Speaker 1: out there and not registering and not trading with the
Speaker 1: SEC's rules, then they're potentially in violation of those rules. Meanwhile,
Speaker 1: one company that's betting big on crypto is actually hoping
Speaker 1: for more oversight. Michael McGuire, the CEO of Simbridge, a
Speaker 1: digital asset exchange for institutional investors. He explains why, I mean,
Speaker 1: we're all all for regulation and transparency. We want to
Speaker 1: improve on the way things are done. Um So I
Speaker 1: think that's you know, that is needed, and that's why
Speaker 1: we've decided or you know, we decided to set up
Speaker 1: in the US and one of the strictest regulatory environments
Speaker 1: in the world and focus on accredited investors and institutional
Speaker 1: investors that demand that transparency and want regulation to support
Speaker 1: the markets. Now, I wouldn't want to see all the
Speaker 1: volatility to go out of the market, right because that's
Speaker 1: what people want to trade. And speaking of regulation, China,
Speaker 1: why it's clamping down on tech giants and what the
Speaker 1: future is for innovators in the world's second largest economy.
Speaker 1: Plus a behind the scenes look at Tesla's most challenging
Speaker 1: times and elon must pursuit of efficiency at any cost.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week inside from
Speaker 1: the reporters and editors who bring you America's most trusted
Speaker 1: business magazine. Plus global business, finance and tech news as
Speaker 1: it happened, Sloomberg Business Week with Carol Messier and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Hey there, I'm
Speaker 1: Paul Sweeney in for Carol Masser, Man I'm Tim Stanovick.
Speaker 1: Plenty ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including a crypto asset manager that's
Speaker 1: embracing regulation. Simbridge CEO Michael McGuire says he's targeting a
Speaker 1: new class of investors in a volatile digital asset space. Plus,
Speaker 1: we're talking to Tim Higgins. He's going to discuss his
Speaker 1: book Power Play Tesla Elon Musk in the Bet of
Speaker 1: the Century. It just came out and it's a rare
Speaker 1: peak behind the curtain at the world's foremost electric vehicle maker.
Speaker 1: It's hard to imagine how or think back to now,
Speaker 1: but Paul, just a few years ago this company was
Speaker 1: on the brink of running out of money. It is
Speaker 1: and what it turnaround it's been, And we'll explore what
Speaker 1: is going on in China. After fourty years of allowing
Speaker 1: the market to play an expanding role in driving prosperity,
Speaker 1: Si Jing Ping is leading a SmackDown on capitalism and
Speaker 1: sparking a one trillion dollar reckoning. First up this hour,
Speaker 1: we're gonna take you inside the pages of Bloomberg Business Week,
Speaker 1: the magazine. There is a new sheriff on Wall Street
Speaker 1: and his name is Gary Ginser. He's a Chairman of
Speaker 1: Securities and Exchange Commission, and he's taking a hard look
Speaker 1: and turning his aim towards the crypto space, and in
Speaker 1: a video posted on Twitter, SEC Chair Gary Ginser, he
Speaker 1: does tell investors in cryptocurrencies to be careful what they
Speaker 1: invest in. Let's take a lesson to those currently are
Speaker 1: considering investing in crypto. Please remember not only are they
Speaker 1: highly spent with avasset class, but there are also significant
Speaker 1: gaps in the investor protection afforded to those. SEC Chair
Speaker 1: Gary Gensler, And we have a Bloomberg story on Mr
Speaker 1: Gensler looking at crypto. Let's bring in Pat Regner, he's
Speaker 1: Markets and finance edator for Bloomberg business Week, and Ben
Speaker 1: bayin financial regulations reporter for Bloomberg News. Pat, fascinating story here.
Speaker 1: What are you and Ben taking away from some initial
Speaker 1: remarks by Mr Gensler about how he's going to take
Speaker 1: a look in potentially regulating crypto. I mean, it looks
Speaker 1: to us like he's welighing down sort of a blueprint
Speaker 1: of what is actually going to be regulated. Uh. You know,
Speaker 1: Ben and Rob Schmidt in reporting this, one of the
Speaker 1: things that was a big theme of their conversation is
Speaker 1: just exactly what does uh the SEC regulate what's in
Speaker 1: its perview, what's an others regulators perview, and what uh
Speaker 1: sort of so far hasn't been established is regulated at all?
Speaker 1: And and um Ben, I think you can speak to this.
Speaker 1: It looks like he's really trying to expand the reach
Speaker 1: of his his agency. Yeah, that's right. I mean, I
Speaker 1: think the big takeaway is that he thinks that there's
Speaker 1: a clear test out there already for whether something is
Speaker 1: a security, and it it works for a cryptocurrency the
Speaker 1: same way it works for whether something as a stock
Speaker 1: or an investment contract. But he thinks that this new technology,
Speaker 1: the blockchain and everything that goes along with it, does
Speaker 1: raise some new issues, and he pointed to some specific
Speaker 1: gaps he mentioned, specifically trading platforms he has. He says
Speaker 1: he's asked Congress to maybe grant some new authorities to
Speaker 1: the SEC or some other federal agency that would allow
Speaker 1: them to really focus on these crypto exchanges, because they're
Speaker 1: not like anything that's really ever been around before, um
Speaker 1: in the sense that you have some of them, which
Speaker 1: are basically people lending crypto back and forth to each other,
Speaker 1: and others of them, which which look a lot more
Speaker 1: like a classic exchange. So he's definitely got As Pat said,
Speaker 1: he's kind of laid the blueprint for what's a pretty
Speaker 1: comprehensive framework. I think, Ben, what exactly does Gensler think
Speaker 1: about cryptocurrencies? Because as even Robert Schmidt right, this is
Speaker 1: a guy who actually had twenty nine hours of a
Speaker 1: blockchain and money course that he developed that that m
Speaker 1: I t. I mean, what exactly does he think of
Speaker 1: crypto I think what we took away from the conversation
Speaker 1: was that he's of two minds. One is that when
Speaker 1: it comes to the technology, he's fascinated by it. He's
Speaker 1: interested in it. He says it's something to the effective.
Speaker 1: He leaned into it when he was teaching a course,
Speaker 1: isn't it for three years, which, by the way, I've
Speaker 1: gotten millions of views online these courses he gave on
Speaker 1: the subject. That's one area. On the other hand, he
Speaker 1: really kept coming back to the idea that now as
Speaker 1: chair of the SEC, he's focused on protecting investors, and
Speaker 1: he referred to this space as the wild West. He
Speaker 1: doesn't think that there really is the sufficient level of
Speaker 1: protection that people need, and he said he's gonna level
Speaker 1: everything that the SEC SEC has to get it there.
Speaker 1: So um, He's already got at least seven different areas
Speaker 1: or initiatives kind of underway, looking at everything from some
Speaker 1: of these initial coin offerings to how to handle custody
Speaker 1: to a bitcoin ETF potentially eventually, the SEC is kind
Speaker 1: of already churning and trying to kind of put something
Speaker 1: together that he thinks it is going to fill the
Speaker 1: gaps that are existed. You know, one thing that was
Speaker 1: really striking to me in this story is that a
Speaker 1: lot of people have been very in the crypto industry
Speaker 1: have been very excited about him being at the SEC
Speaker 1: because he knows so much about it. And I think
Speaker 1: the presumption from some people has been, oh, you know,
Speaker 1: because we understand, uh they're thinking, is that because we
Speaker 1: understand that being unregulated is core to this, if someone
Speaker 1: else understands what we're doing, he's going to have light
Speaker 1: touch regulation. And I think, you know, bless your heart
Speaker 1: for thinking that if somebody understands your industry very well,
Speaker 1: they're not going to want to regulate it. Yeah, and Ben,
Speaker 1: you know, one of the issues that you point out,
Speaker 1: and it's just an a vexing one, is kind of
Speaker 1: you know, who does regulate what it feels like I
Speaker 1: might be kind of a regulatory kind of land abb
Speaker 1: here between the SEC, the CFTC, and whatever new groups
Speaker 1: Congress may create. Does Gainster feel like the SEC is
Speaker 1: the proper and primary regulatory body. He didn't go that
Speaker 1: far to say that the SEC should have say over
Speaker 1: at all, But what he did say is that when
Speaker 1: you look across the crypto universe right now, and taking
Speaker 1: Bitcoin out of that, there's all of these tokens that
Speaker 1: exist in the world, and a majority of those, in
Speaker 1: his eyes, are securities. And because their securities, that means
Speaker 1: that they fall under the SEC's remit and that means
Speaker 1: that if they're out there and not registering and not
Speaker 1: trading with the SEC's rules, then they're potentially in violation
Speaker 1: um of those rules. And what's really gonna we're gonna
Speaker 1: see now is how he's going to deal with that.
Speaker 1: That was Bloomberg Business Week Markets and Finance editor pat
Speaker 1: Rickneer with Bloomberg News Financial Regulations reporter Ben Bain. You're
Speaker 1: listening to the Bloomberg Business Week coming up. You've just
Speaker 1: heard about the SEC's plants take a tougher look at
Speaker 1: crypto assets, and we found a company all for the
Speaker 1: increased scrutiny sim Bridge CEO Michael McGuire. On the other side,
Speaker 1: this is Bloomberg. This is Bloomberg Business this Week with
Speaker 1: Bloomberg Quick tags, Tim Stenovac and Paul Sweeney from Bloomberg Radio.
Speaker 1: So new push by Congress could require crypto brokers report
Speaker 1: transactions to the i r S. You could create some
Speaker 1: unwelcome tax bills, but could also clarify rules for traders
Speaker 1: and users of bitcoin and other digital tokens, potentially strengthening
Speaker 1: the system in the long run. That's according to people
Speaker 1: in the industry. The idea is in a last minute
Speaker 1: addition to the five fifty billion dollar bipartisan Infrastructure package,
Speaker 1: and the hope is that it's going to raise more
Speaker 1: than raise uh some twenty billion dollars to help pay
Speaker 1: for the bill. Join us now is Michael McGuire, founder
Speaker 1: and CEO of Bridge. It's the first US based regulated
Speaker 1: digital asset exchange designs specifically with an institutional focus using
Speaker 1: blockchain native technology. It is certainly a mouthful. Michael, thanks
Speaker 1: so much for joining us. It's good to have you
Speaker 1: on the show. Yeah, thanks for having me, and yeah,
Speaker 1: that was definitely a mouthful. So this is an industry
Speaker 1: that I think is still so unfamiliar to so many people.
Speaker 1: So in late person's terms, explain what simbridge does. Sure,
Speaker 1: Simbridge is a digital exchange that uses blockchain to create
Speaker 1: transparency for transactions on the exchange. And what that does
Speaker 1: is it makes it easier for regulators to understand if
Speaker 1: there's been market manipulation going on. And as you know,
Speaker 1: in the securities industry, there's a lot of rules about
Speaker 1: market manipulation um and in the crypto world, those rules
Speaker 1: haven't really matured yet. So some of your better exchanges adopt,
Speaker 1: you know, sort of a self policing approach, and other
Speaker 1: exchanges don't. Yeah, Michael, I think that's it's a great
Speaker 1: topic here because I think a lot of investors view
Speaker 1: crypto trading just broadly defined. It's kind of the wild West,
Speaker 1: if you will, very early days. And how do you
Speaker 1: think this is going to evolve? Is this something that
Speaker 1: the security is an exchange commission for example, UH might
Speaker 1: take a look at how do you think this might evolve? Sure,
Speaker 1: there is a lot of volatility in the marketplace in
Speaker 1: the sec and CFTC had come out and said bitcoins
Speaker 1: a commodity, right, So it should be regulated. A commodity
Speaker 1: sec founded in ninety nine to regulate securities. I don't
Speaker 1: think that's their jurisdiction. And unless you're trading on margin
Speaker 1: or trading a future or an option, the CFTC doesn't
Speaker 1: regulate spot transactions, which many of the exchange transactions are. So,
Speaker 1: you know, I would put out there that maybe there's
Speaker 1: a need for an agency that's going to focus solely
Speaker 1: on crypto. The other side of that coin would be
Speaker 1: you need some regulatory structure here to attract capital make
Speaker 1: this quote unquote a real asset class. How do you
Speaker 1: think about that? Yeah, I mean we're all all for
Speaker 1: regulation and transparency. We want to improve on the way
Speaker 1: things are done. Um, So I think that's you know,
Speaker 1: that is needed, and that's why we've decided or you know,
Speaker 1: we decided to set up in the US and one
Speaker 1: of the strictest regulatory environments in the world and focus
Speaker 1: on accredited investors and institutional investors that demand that transparency
Speaker 1: and want regulation to support the markets. Now, I wouldn't
Speaker 1: want to see all the volatility to go out of
Speaker 1: the market, right because that's what people want to trade.
Speaker 1: Give us an idea for the way that demand has
Speaker 1: has shifted or demand has changed for for sin bridge
Speaker 1: in recent months. Um, if you think back to where
Speaker 1: uh bitcoin was trading, you know in March, right, just
Speaker 1: a few thousand dollars for a bitcoin. As the price
Speaker 1: has gone up, talk to me about the way that
Speaker 1: demand for services like yours have shifted. Sure, I think
Speaker 1: you know, if you think about one year ago, we
Speaker 1: wouldn't be having this call, right. We're having this call
Speaker 1: because large players in the industry, Fidelity Goldman JP market
Speaker 1: are offering um, you know, crypto assets to their high
Speaker 1: net worth clients, and so you know that's why you know,
Speaker 1: that's why it's popular, and that's why we're having this conversation.
Speaker 1: I think, Michael, you know, one of the things as
Speaker 1: we talked to investors, I think they're looking for a
Speaker 1: more validation of the crypto space. And you know, yes,
Speaker 1: Elon musk and and putting crypto on the balance sheet
Speaker 1: of Tesla was a validating event. Arguably, accepting bitcoin is
Speaker 1: payment for it at Tesla. What do you think or
Speaker 1: you know, do you think there need to be more
Speaker 1: validation events to to really make this a widespread, widely
Speaker 1: held asset class. If so, what do you think needs
Speaker 1: to happen. Yeah, that's a very good question. Thanks. So
Speaker 1: if you look at the recent Fidelity report that came
Speaker 1: out of a survey of a bunch of institutional investors,
Speaker 1: seven out of ten of them are are looking to
Speaker 1: add crypto to their portfolio. So when you see like
Speaker 1: a constant drumbeat of big institutions coming out with information
Speaker 1: like that or JPR, JPM UH offering UH crypto assets
Speaker 1: or bit poing type of investments to their high net
Speaker 1: worth individuals, I think that in itself is validating. Right.
Speaker 1: These are incumbent players on Wall Street, the sort of
Speaker 1: name brands of the industry that are saying, you know,
Speaker 1: you should really be looking at having some type of
Speaker 1: allocation to this type of asset, but in in a
Speaker 1: measurable way. Right. What does that allocation do though? Is it?
Speaker 1: Is it indeed a replacement for gold as some bulls
Speaker 1: have said, is it something that it doesn't seem like it?
Speaker 1: It diversifies in a in a way that as we
Speaker 1: saw on the sell off last year, I mean, you
Speaker 1: were you weren't safe anywhere. Bitcoin tumbled there in March.
Speaker 1: But what is the purpose that it that it gives
Speaker 1: investors in a portfolio. Yeah, I think it is diversification,
Speaker 1: and it is. You know, some people argue that it's um,
Speaker 1: you know, non inflationary, and people are worried about inflation
Speaker 1: or investing in in bitcoin or gold. Um. Simbridge is
Speaker 1: going to be launching token that are backed by different
Speaker 1: physical commodities, specifically metals, so you'll be able to take
Speaker 1: a directional view on for instance, E S G or
Speaker 1: electric batteries. Right you could buy tokens that are backed
Speaker 1: by the individual metal components like cobalt, nickel, um in
Speaker 1: the in the e V space, or or platium and
Speaker 1: platinum in the combustion engine catalytic converter space. So it
Speaker 1: gives you a way to express a view that doesn't
Speaker 1: already exist for a lot of investors, right, your your
Speaker 1: hedge funds can already do that, but for you know,
Speaker 1: an accredited investor, it's a little more difficult. Michael, do
Speaker 1: you have a sensor. I'm sure you do. Kind of
Speaker 1: where institutional investors, professional investors, mutual funds, hedge funds. How
Speaker 1: are they trading in the crypto space or what are
Speaker 1: they trading? Is it just ethereum? Is it just bitcoin.
Speaker 1: How how are they trading? What are they treading? Yeah,
Speaker 1: I think se bitcoin ether um. There's not a whole
Speaker 1: lot more dive down into you know, the capitalist of
Speaker 1: crypto and and they're not trading so much. I mean, uh,
Speaker 1: most of them are by holds. People are putting stuff
Speaker 1: on their balance sheet. They're holding it. But you do
Speaker 1: have some prop tests who are trading it. Is it
Speaker 1: the type of thing that it belongs in a four
Speaker 1: oh one k um? There are services, there are small
Speaker 1: providers now four oh one k is that are that
Speaker 1: are offering this. Yeah, good question. I would say, you know,
Speaker 1: if you're an a credit and investor above, you probably
Speaker 1: should have some of this in your four oh one
Speaker 1: meaning you have a liquid net worth of a million
Speaker 1: dollars network and you know make over two hundred thousand
Speaker 1: dollars a year in salary or three hundred combined or
Speaker 1: a million dollars net worth without your house. Then yeah,
Speaker 1: you definitely should have some of this in for oh
Speaker 1: one k but you need to understand that it is
Speaker 1: volatile um. But it would be a good exposure in
Speaker 1: my opinion that it's Michael McGuire, the CEO of Simbridge
Speaker 1: it's a digital asset exchange that's designed specifically for institutional
Speaker 1: investors and traders. Still to come, on Bloomberg Business Week,
Speaker 1: the Chinese government is reigning in it's kind whose biggest
Speaker 1: text firms and sacrificing billions of dollars in profits for
Speaker 1: the sake of control. Our resident China expert and Bloomberg
Speaker 1: New Economy editorial director Andy Brown tries to help us
Speaker 1: make sense of the crackdown. Plus how Tesla managed to
Speaker 1: escape its most challenging crisis to date. This is Bloomberg
Speaker 1: Broadcasting from the financial capital of the World, Bloomberg Eleve
Speaker 1: in Frio in New York to Washington, d C. Bloomberg
Speaker 1: to Boston, Bloomberg one oh six one to San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Chado one
Speaker 1: nine team, and around the globe the Bloomberg Business app
Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Business Week
Speaker 1: with Bloomberg Quick Takes, Tim Stenovac and Paul Sweeney from
Speaker 1: Bloomberg Radio. Well, you know, you think about some of
Speaker 1: these big Chinese companies that have raised capital in the
Speaker 1: US over the last several years and I think about
Speaker 1: Ali Baba. That's a company I know very well, followed
Speaker 1: it since its beginning. But this course is a whole
Speaker 1: slew of of these big Chinese companies and it's been
Speaker 1: a play on the growth of China. And they've been
Speaker 1: so successful over here. But in the back of everyone's mind,
Speaker 1: there's this thing called China risk. At any given time,
Speaker 1: the government of China could put the kai bosh on
Speaker 1: the whole thing, and I think we're starting to see
Speaker 1: a little bit of that. Andy Brown, he's editorial director
Speaker 1: for the Bloomberg New Economy that folkuses exclusively on China
Speaker 1: and Asia. Talk to us about what you're seeing in China.
Speaker 1: The government's cracking down and it's not just Ali bob
Speaker 1: but it's not just d D, it's educational sectors. I
Speaker 1: just don't know what's next. What do you think the
Speaker 1: government's up to? You know, you you you talk about
Speaker 1: risk um and it's true, this is now political risk,
Speaker 1: and invest isn't going to have to get their heads
Speaker 1: around that. Look, we've seen it in before. We've seen
Speaker 1: this before with the government trying to put the kai
Speaker 1: bosh on particular abuses within industry. So they did this
Speaker 1: with the gaming industry a couple of years ago when
Speaker 1: they figured out the kids in China were spending way
Speaker 1: too much time playing online games. Um. But this is
Speaker 1: something very different in terms of scale, its scope, intensity, severity.
Speaker 1: We have never seen anything like this before. This isn't
Speaker 1: just the government correcting abuses. This is the government saying
Speaker 1: we have a new system of economic management here, and
Speaker 1: it's driven by a political process. And this political process
Speaker 1: is reflective of our shifting priorities. We are concerned about
Speaker 1: social welfare, we're concerned about workers, we're concerned about inequality,
Speaker 1: and you guys the private sector need to work with
Speaker 1: us on all these issues. Get with the program or
Speaker 1: get out of the way. What is the ultimate outcome
Speaker 1: of this, though, Andy, I mean, is it is are
Speaker 1: those something? Are those things that the Chinese government can
Speaker 1: actually accomplish? Yes, So they have a legitimate they have
Speaker 1: a legitimate point that in almost every case where they've
Speaker 1: taken action against China these tech companies, there's some kind
Speaker 1: of abuse going on. So you know, who can deny
Speaker 1: that China's data platforms are abusing their monopoly positions and
Speaker 1: squeezing out smaller competitors, And you know, regulators in the
Speaker 1: United States wish that they might have powers more akin
Speaker 1: to Chinese regulators, UM, so that they could put an
Speaker 1: end to all these abuses. Um. You know. The the
Speaker 1: the issue though, is is how you go about doing
Speaker 1: this and closing down an entire industry as they just
Speaker 1: did with online education. UM. You know is telling is
Speaker 1: telling investors you've got to it now you have to
Speaker 1: now assume with a whole new level of risk. And
Speaker 1: the question that bases the big question now is are
Speaker 1: Chinese stocks investival or not? Clearly in the education space,
Speaker 1: the answer is no, and and the jury is out
Speaker 1: on you know, on many other Chinese into streets which
Speaker 1: face similar so called rectification. Yeah, it's andy, you know.
Speaker 1: We We've heard from a lot of emerging market of
Speaker 1: fund managers who are saying, basically, yeah, the game has changed.
Speaker 1: But the reality is, I can't not invest in China
Speaker 1: is such a big part of the various indices that
Speaker 1: my vench that I'm benchmarked against, and it is historically
Speaker 1: been such a big part of the market. I have
Speaker 1: to be there. But I'm thinking that, Okay, but I'm
Speaker 1: not gonna pay anywhere near the multiples I've paid before.
Speaker 1: This is the Chinese government that they run the risk
Speaker 1: of kind of overstepping. Yeah, they do. And so you know,
Speaker 1: if if you're going to go into the Chinese market
Speaker 1: now as a portfolio invested, you need to be aware
Speaker 1: that it isn't the market that is shaping the outcomes
Speaker 1: of the companies that you're investing in. Increasingly, it is
Speaker 1: the government, and the government is shaping it according to
Speaker 1: political priorities. They're the ones pulling the leavers, They're the
Speaker 1: ones turning the dials. Now, if you if you if
Speaker 1: you can get used to that, and if you can,
Speaker 1: if you think that you understand where the political priorities
Speaker 1: of the government lie, then good luck. So what does
Speaker 1: it mean for individuals who want to invest in China?
Speaker 1: Should they just think about this in the context of okay,
Speaker 1: well there is going to be a discount on me
Speaker 1: buying a d R s of Chinese stocks? Or is
Speaker 1: this that they have to be prepared for the worst
Speaker 1: to happen that their equity uh state could actually go
Speaker 1: to zero? Yeah, you know, if if you look, so
Speaker 1: what what what are the what are the smart investors
Speaker 1: in in in China? Up to? Um? You know, I
Speaker 1: was reading a speech over the weekend that was made
Speaker 1: recently by really one of the best and most successful
Speaker 1: venture capitalists in China, called Eric Lee, and he said,
Speaker 1: you know, um, I've been reading copies of Tushire. Tushire
Speaker 1: is that leading theoretical magazine of the Chinese Communist Party,
Speaker 1: and it's where you find all of Jim Things speeches
Speaker 1: and essentially he's saying, I have found my investment thesis.
Speaker 1: Um in in the thoughts all President jimping, and you
Speaker 1: should too. That's Bloomberg New Economy editorial director Andy Brown.
Speaker 1: He came to us from New York City. You're listening
Speaker 1: to Bloomberg Business Week. Coming up, drama inside Tesla and
Speaker 1: how the company managed to stave off an early demise.
Speaker 1: Wall Street Journal reporter Tim Higgins on his new book,
Speaker 1: Power Play, Tesla, Elon Musk and the Bet of a Century.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Bloomberg
Speaker 1: Quick Takes, Tim Stenebac and Paul Sweeney from Bloomberg Radio.
Speaker 1: There's probably no company out there more polarizing than Tesla.
Speaker 1: A new book that just came out aims to tell
Speaker 1: the story of the company from how it started nearly
Speaker 1: twenty years ago to almost failing to be coming by
Speaker 1: far the most valuable car company in the world, joining
Speaker 1: US now is Tim Higgins, a Wall Street Journal reporter
Speaker 1: also the author of power Play Tesla Elon Musk in
Speaker 1: the Bet of the Century, tim uh I listened to
Speaker 1: some other interviews that you've done, and I heard you
Speaker 1: say that when you started writing this book, you thought
Speaker 1: you were writing the obituary for the company. So what
Speaker 1: was the turning point when it went from being an
Speaker 1: obituary to to this book. Yeah, you have to remember
Speaker 1: it was pretty bleak, right, Elon Musk seemed to be
Speaker 1: having a meltdown on Twitter every other day. You know,
Speaker 1: the company was short on cash, as you said, and
Speaker 1: it just seemed improbable that they could keep the keep
Speaker 1: the story going. But one of the big turning points
Speaker 1: was the third after the third quarter Inen when Elon
Speaker 1: Musk and tested but surprised the world and came out
Speaker 1: with a profitable quoter because in large part because they
Speaker 1: were able to get the models three compact car into
Speaker 1: customers hands, paying customers hands. It was first it was manufacturing,
Speaker 1: how to make the car, and then it was delivery,
Speaker 1: hell to get it into those customers that driveways. They
Speaker 1: weren't out of the woods then, but it was a
Speaker 1: moment that gave new hope. Continued to be problematic, but
Speaker 1: really it was clear that things had changed for Tesla
Speaker 1: in during the pandemic when they continued to build cars. Uh,
Speaker 1: despite great challenges, deliver those cars and turn profit and
Speaker 1: deliver create the ability to raise a lot of money
Speaker 1: very cheaply by issuing new shares. That gives them a
Speaker 1: work chest to go forward. Tim, be fascinating to learn
Speaker 1: what kind of access did you get to the folks
Speaker 1: at Tesla, because when we think of Tesla, we think
Speaker 1: of just Elon Musk, But obviously there's more to the
Speaker 1: story than that. Be fascinating to kind of get some
Speaker 1: thoughts from you about the access you had. Absolutely, that's
Speaker 1: a question. Everybody wants to know who I talked to.
Speaker 1: And Uh, it's clear this book was not endorsed by
Speaker 1: Elon Musk. He probably would not like you to read it. Uh,
Speaker 1: Tesla is not cooperative. Um, but the book that I
Speaker 1: started out to write really was to kind of get
Speaker 1: at one of the questions or this idea. There's a
Speaker 1: myth that Tesla success is because Elon Musk was sleeping
Speaker 1: on the factory floor and and kind of willing it
Speaker 1: into existence. Without a doubt, there wouldn't be a Tesla
Speaker 1: without Elon. But there also wouldn't be a Tesla without
Speaker 1: the army of men and women who behind the scenes,
Speaker 1: UH sacrificed a lot over the years to develop these cars,
Speaker 1: to sell them, and to really put the car on
Speaker 1: the on the map. So it was you know, shoe
Speaker 1: leather reporting sourcing, UH, hundreds of interviews, thousands of records
Speaker 1: to tease out those important anecdotes that really say what
Speaker 1: the company was doing, why they're making the decisions good
Speaker 1: and bad, and and you know what were the ramifications
Speaker 1: of those is Tesla? You've covered autos for years in
Speaker 1: Detroit and also in San Francisco. Do you think that
Speaker 1: Tesla is a car company? It likes to call itself
Speaker 1: an energy company, right, it likes to call itself an
Speaker 1: energy company. But they're making their money UM from the
Speaker 1: sale of cars and selling UH credits, energy credit regulatory
Speaker 1: credits to other competitors who are not as successful at
Speaker 1: selling those lex cars, right, So they are a car
Speaker 1: company at this point, they have ambitions of becoming more
Speaker 1: but we are talking about them because they have done
Speaker 1: something in the auto industry that seemed improbable in two
Speaker 1: thousands three when they were founded, and now has made
Speaker 1: them the world's most valuable automaker. And that is, you know,
Speaker 1: essentially win the day on the argument that the future
Speaker 1: of the car is electric. You see General Motors, you
Speaker 1: see Mercedes, you see Volkswig and all spending billions and
Speaker 1: billions of dollars in racing to that future. Is Elon
Speaker 1: Muss as eccentric as he seems, absolutely, um. Absolutely. On
Speaker 1: one hand, he's incredibly charming, he's funny, he is interesting
Speaker 1: in a way that you do this not normally come across.
Speaker 1: On the other hand, he is exacting and demanding and
Speaker 1: a self described nano manager. Um. You do not want
Speaker 1: to cross him. He is a person who will not
Speaker 1: hold back. Um. If he is unhappy, you will definitely
Speaker 1: know about it. Um. And these are the challenges of
Speaker 1: working from him that Talking to people who have had
Speaker 1: that experience, it's it's interesting because there are some who
Speaker 1: feel like it was a like opportunity of a lifetime,
Speaker 1: and then there are others who felt like maybe they
Speaker 1: flew a little too close to the Sun. Uh, it was,
Speaker 1: you know, a painful experience. Um, but you know it
Speaker 1: is definitely a unique experience. Tim. I I gotta go there.
Speaker 1: I gotta ask about this Twitter dust up last week
Speaker 1: after our own Bloomberg News reporter Mark German tweeted a
Speaker 1: part of a screenshot from a Daily Mail article They
Speaker 1: got a copy of your book, and their story was
Speaker 1: about how Elon Musk once demanded me made the CEO
Speaker 1: of Tesla during discussions of a potential buy out, and
Speaker 1: Apple CEO Tim Cook had called Mustard proposed acquiring the
Speaker 1: electric carmaker. Musk expressed his interest in the idea, but
Speaker 1: he had one condition. This according to the Daily Mails
Speaker 1: write up of your book, telling Cook I'm ceo. Uh.
Speaker 1: In response to that, Elon Musk said that, Uh, you
Speaker 1: managed to write a book that was not only false.
Speaker 1: He said, Cook and I have never spoken or written
Speaker 1: to each other. There was a point where I requested
Speaker 1: to meet with Cook to talk about Apple buying Tesla.
Speaker 1: There were no conditions of acquisition proposed whatsoever. Uh. And
Speaker 1: he also said Higgins managed to write a book both
Speaker 1: false and boring. He included two emojis in there. So
Speaker 1: to your point about him not not wanting others to
Speaker 1: to read his book. Um what would you say to
Speaker 1: Musk's response to this? Absolutely so, as detailed in the
Speaker 1: book UH, this story of this conversation is what Musk
Speaker 1: was telling members of his team. And I have talked
Speaker 1: to UH sources individually and heard this for multiple people. UM. So,
Speaker 1: either Musk was telling the truth then when he told
Speaker 1: this tale, or he's telling the truth now. And in
Speaker 1: the book I include a line about how Tim Cook
Speaker 1: has even said that he has never spoken with Musk,
Speaker 1: and include some skepticism about the veracity of what Musk
Speaker 1: was claiming. But the whether such a conversation took places
Speaker 1: is beside the point. What the message. The clear message
Speaker 1: that Ellen was giving to his team was that Elon
Speaker 1: Musk was the CEO of Tesla and that if they
Speaker 1: were hoping for some White Nights Savior to come in
Speaker 1: to fix their problems like Apple, that wasn't gonna happen.
Speaker 1: They needed to figure out the problems that were going on.
Speaker 1: At that period of time. Tesla was in trouble. This
Speaker 1: is a period around that when the Model X is
Speaker 1: coming out in UH production of the mess, cash is
Speaker 1: being burnt through and the stock is falling. It's so
Speaker 1: hard to you know, kind of remember think back to
Speaker 1: those days to him, because well, you think it's Tesla.
Speaker 1: Now it's got a seven billion dollar market cap, stocks
Speaker 1: up over the trailing twelve months. How close do you think,
Speaker 1: uh did they get in? I don't call it to
Speaker 1: really going out of business? Well was pretty bleak. Um.
Speaker 1: I have seen internal figures. They were, they were on
Speaker 1: the line there they were. They were running that cash
Speaker 1: down and they a story of Tesla going back to
Speaker 1: the early days though the cash has always been their
Speaker 1: big issue. Bending metal getting cars out takes a lot
Speaker 1: of capital, and this is part of the reason why
Speaker 1: there hasn't been up until that point. It really an
Speaker 1: automotive startup in in many many generations, because most vcs
Speaker 1: weren't interested in putting money down uh on the idea
Speaker 1: of a car company that maybe uh ten years later
Speaker 1: might have a product. That's what was so unique about
Speaker 1: Elon Musk was here was a really rich person who
Speaker 1: had this like belief that electric cars could possibly happen,
Speaker 1: and he put his fortune behind it. And then on
Speaker 1: top of that, he was able to convince other investors
Speaker 1: to continue to put more and more money in the
Speaker 1: company over the years. I mean, it's been billions of
Speaker 1: dollars it's taken to get to the company where it
Speaker 1: is now. And you know that that's what separates Tesla
Speaker 1: from other startups that dream big, but you can't can't
Speaker 1: execute our Tesla's most challenge jing days behind it. I
Speaker 1: would say that Tesla, after in the ability to raise
Speaker 1: all that cash at that point was probably and never
Speaker 1: had never had as good good a footing as it
Speaker 1: was at that point. Because of having that cash answered
Speaker 1: that problem. Now it's the question of what are they
Speaker 1: going to do. Can they execute on building those new
Speaker 1: two two new assembly pants to Germany, want to Texas?
Speaker 1: Can they bring out the cyber truck. Can they continue
Speaker 1: to get battery costs down? Uh, get down to the
Speaker 1: level that uh they can make these cars so every
Speaker 1: day people can buy them, because that's what their mission is.
Speaker 1: That's what Elon Musk stated, mission is to make electric
Speaker 1: vehicles ubiquitous, if you will. He wants to make that
Speaker 1: conversion around the world. And if he's going to do that,
Speaker 1: then they have to be way cheaper. Ay Tim Just
Speaker 1: in the last six or twelve months, we've seen the
Speaker 1: major automakers around the world really jump in big time
Speaker 1: into the EV market. I'm thinking Volkswagen, General Motors Ford.
Speaker 1: It seems like everybody's got an announcement and some new
Speaker 1: product launches. How do you think Elon Musk and the
Speaker 1: folks at Tesla view, you know, the competitive environment over
Speaker 1: the next five years. Well, it's interesting because early on
Speaker 1: this was actually the dream was to kind of edge
Speaker 1: or push the auto industry into getting into evs. That
Speaker 1: was kind of what they were hoping to show that
Speaker 1: an electric car was feasible and that people everyday people
Speaker 1: would want to buy it. Right So, in a lot
Speaker 1: of ways, if Tesla were to disappear tomorrow, the kind
Speaker 1: of the initial mission of the company has been accomplished.
Speaker 1: That said, it's clear that Elon Musk has uh, you know,
Speaker 1: more ambitions out there, and clear that he wants to
Speaker 1: have a lot more sales and one of those challenges
Speaker 1: he's going to have in coming years, there's going to
Speaker 1: be so much more competition. That's Tim Higgins, he's a
Speaker 1: Wall Street Toronto reporter. In his book out now, it's
Speaker 1: called Power Play Tesla. Elon Musk in the Bet of
Speaker 1: the Century, A rare look at some fraud moments inside
Speaker 1: the e V Giant and how it has ultimately become
Speaker 1: a global powerhouse. But Paul um, perhaps it's toughest days
Speaker 1: behind it, but it's still got a long way to
Speaker 1: go to stave off all that competition. And there's there's
Speaker 1: new competition coming from the likes of General Motors, Ford,
Speaker 1: Volkswagen and others. And that wraps up the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. Thanks for joining
Speaker 1: us on. Paul Sweeney in for Carol Masser, and I'm
Speaker 1: Tim Stanivak. Be sure to tune into our Bloomberg Business
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