Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm
Speaker 1: Jason Kelley and I'm Carol Masser. Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. He'll bringing news of the week,
Speaker 1: inside from the magazine and more. And there was a
Speaker 1: lot going on this week, a very busy week, so
Speaker 1: much happening, especially in the markets. Carol, We're going to
Speaker 1: break that down for you, help you understand the market side,
Speaker 1: the economic side. It's a fast moving story to disab believe.
Speaker 1: There was a lot going on. Another ongoing story Hewlett
Speaker 1: Packard and whether or not they'll do a deal with Xerox,
Speaker 1: and they came out HP specifically came out with their earnings.
Speaker 1: But Jason, they also announced a massive fifteen billion dollar
Speaker 1: stock buy back and that was seen as a way
Speaker 1: to fend off that hostel takeover from zero. So we
Speaker 1: have a story by Austin Carr about that. Plus we
Speaker 1: catch up with Rebecca Greenfield. She oversees all of our
Speaker 1: diversity coverage. She talks about a story she has in
Speaker 1: the magazine this week, as well as news of the week,
Speaker 1: obviously the sentencing the conviction of Harvey Weinstein, plus reddits
Speaker 1: traders man, they are shaking up the stock mar Get
Speaker 1: this story by Lucawa. It's the cover story, and it
Speaker 1: takes us to a dingy corner of the internet. He went, So,
Speaker 1: we didn't have to, but let's begin with global markets.
Speaker 1: They were rocked by the spread of the coronavirus. This
Speaker 1: week we take a look at how Wall Street is
Speaker 1: looking for the right metaphor for the meltdown. Economics editor
Speaker 1: Christina lynn Blad and Market center Mike Reagan joining us
Speaker 1: now with two stories of the magazine this week, and
Speaker 1: it is all about the virus and trying to figure
Speaker 1: out the economic impact and also the market impact. Mike,
Speaker 1: we gotta start with you because we haven't seen this
Speaker 1: type of global equity sell off in some time. You're right,
Speaker 1: it's looking like right now about the worst sell off
Speaker 1: since two thousand and eighteen. And what I wrote wrote
Speaker 1: about is how it's very much calling into question what
Speaker 1: was kind of the narrative behind this pole bowl market,
Speaker 1: which is the so called wall of were In other words,
Speaker 1: you know, we were hit with the European debt crisis,
Speaker 1: we were hit with the tensions with Iran, the the
Speaker 1: trade war, and investors really love these sort of little
Speaker 1: metaphors and cliches that that boiled down a complex market
Speaker 1: into a simple notion like, oh, it's timing a wall
Speaker 1: of worry, and it would be a dead cat bounce
Speaker 1: right right. I know you guys hear these metaphors every
Speaker 1: day to take the stairs up in the elevator down,
Speaker 1: and and they're all kind of applicable right now. But
Speaker 1: I think it's important, especially now because Robert Schiller's out
Speaker 1: with a book actually the magazine excerpted not too long ago,
Speaker 1: called Narrative Economics, and it's it's basically about the notion
Speaker 1: about how these little narratives and the metaphors, uh, sort
Speaker 1: of are more important than you think in sort of
Speaker 1: dictating where the economic trends, where the market trends go.
Speaker 1: And I wonder if we're at an inflection point right
Speaker 1: now where that wall of worry made everyone a little
Speaker 1: too complacent that the Federal Reserve other central banks were there,
Speaker 1: they had our back, uh, and that it was safe
Speaker 1: to keep buying despite the scary news. Now this epidemic
Speaker 1: is much different because it's not clear what really a
Speaker 1: central bank can do seem sort of counteract this both
Speaker 1: a demand shock and a supply shock. So it's it's
Speaker 1: one of those inflection points where I think a narrative
Speaker 1: that the market had rallied on for a long time
Speaker 1: is in jeopardy of just being going up and smoke. Well,
Speaker 1: because part of what everyone needs to figure out central
Speaker 1: bankers included, and investors Christina Lindblatt, is what is the
Speaker 1: economic impact here? How do you measure it? How do
Speaker 1: you assess it? Well? Economists are also looking for stories,
Speaker 1: are going back in history and looking for episodes like
Speaker 1: this that they could use to model what the global
Speaker 1: economic impact could be. So, you know, we had the
Speaker 1: Spanish flu that was obviously one of the worst episodes.
Speaker 1: Fifty million people I believed to have died. We had
Speaker 1: the swine flu, so right now the World Health Organization
Speaker 1: has stopped short of calling it a pandemic, but people,
Speaker 1: there are people out there modeling a result of a pandemic,
Speaker 1: and we've seen, for example, Oxford economics say that could
Speaker 1: be one trillion of global output wiped out from an
Speaker 1: event like that. Yeah, And I think it's interesting, especially
Speaker 1: when we talked about in some parts of the world
Speaker 1: there were economies that were struggling before the buyers right,
Speaker 1: and whether or not this really tips them into recession
Speaker 1: Italy certainly, and Italy could tip other countries in Europe
Speaker 1: into recession. And also, you know, we were starting to
Speaker 1: feel better about the global economy because Rexit was receding,
Speaker 1: the trade wars were receiving a bit, so that it
Speaker 1: was like the expectation as was going to be a
Speaker 1: year to rebuild, and that is now really off the table. Well,
Speaker 1: and Mike, obviously, the markets were paying very close attention
Speaker 1: this week to what the President had to say about that.
Speaker 1: We know the markets are always front of mine for him.
Speaker 1: Politics and governmental response, especially here in the US plays
Speaker 1: mightily into the market story here, right. And President Trump's
Speaker 1: his own narrative has has been very influential on the
Speaker 1: market since he was elected. Obviously, you know, he's very
Speaker 1: much a cheerleader for the stock market, for the economy.
Speaker 1: But this is a story that is kind of out
Speaker 1: of his control where he cannot. He's trying very hard
Speaker 1: to control the narrative around the market, trying to keep
Speaker 1: that confidence high, trying to get people not to panic,
Speaker 1: but it's one of these occasions where it's simply largely
Speaker 1: out of his control as far as how far this
Speaker 1: spreads UH, and you know, if we're really do for
Speaker 1: a China type of situation where we see quarantines in
Speaker 1: the US UH and and more quarantines in Europe, that
Speaker 1: will really just snuff out the economic growth that's so
Speaker 1: important for the stockmark. Well, I think such a narrative
Speaker 1: for a long time was everybody saying it's not gonna
Speaker 1: be such a big deal, certainly in developed markets, and
Speaker 1: we started to see that play out. In fact, it
Speaker 1: played out in the debates UH this week that we
Speaker 1: saw among the Democratic candidates. They brought that front and center,
Speaker 1: and I feel like all of a sudden it picked
Speaker 1: up a lot of momentum here in the United States
Speaker 1: and the impact absolutely absolutely know. For a long time
Speaker 1: it was interesting when the case the cases really we're
Speaker 1: swelling and getting very serious in China. You know, the
Speaker 1: whole market narrative was that, well, it's contained the China, UH,
Speaker 1: it's not going to make it here, and clearly obviously
Speaker 1: it's leaked out of China. UM. The issue in the
Speaker 1: United States now is I don't think there's a lot
Speaker 1: of confidence in what we know about the virus state.
Speaker 1: CDC hasn't really been testing that many people. We know,
Speaker 1: there's this one case in California that they call you know,
Speaker 1: spread through the community rather than someone that was brought
Speaker 1: back from from Asia. So there are a lot of
Speaker 1: uncertainty and a lot of sort of questioning of authority
Speaker 1: of what we're really dealing with right now. One last
Speaker 1: question just quickly, China. Though it feels like we're getting
Speaker 1: maybe some containment in terms of the cases, but the
Speaker 1: economic impact. Do we have a better feel on that, Christie,
Speaker 1: not really. I think the number of cases are slowing down,
Speaker 1: but there's a particular concern. You know, at a lot
Speaker 1: of large companies people have returned to work, but smaller
Speaker 1: and medium sized uh, you know, workers in some cases
Speaker 1: are stuck back home because they went home for the
Speaker 1: New New York holidays. That's Christina, Lynn lad and Mike
Speaker 1: Reagan giving us the coronavirus story really in two ways. Obviously,
Speaker 1: economists and investors and everyone else trying to figure it out.
Speaker 1: I feel like if there's a theme this week, it's
Speaker 1: about these stories, whether it's the virus, the market, so
Speaker 1: many other things, Hewlett Packard, It's all about kind of
Speaker 1: stories that aren't quite over yet, right and we're not
Speaker 1: quite sure about the ending there. So the week it
Speaker 1: off to a rocky start investors nervous over the spread
Speaker 1: of the coronavirus, and as more companies weighed in on
Speaker 1: the impact. Jason meantime, love this story. It's about a
Speaker 1: dingy corner of the Internet and a Reddit forum with
Speaker 1: nearly a million users that's apparently become pretty much a
Speaker 1: force in the stock market. Soaked in profanity and greed.
Speaker 1: It's my favorite phrase in the magazine this week, Luke
Speaker 1: Kawa wrote it. He joins us in New York City.
Speaker 1: This is quite a little place that maybe people don't
Speaker 1: know about, that has a huge amount of influence on
Speaker 1: individual stocks at times. Yeah, this has been one of
Speaker 1: the fun new developments to track in because for years
Speaker 1: we've talked about, like one, is the retail investor going
Speaker 1: to get involved with the bowl market? Uh, you know what,
Speaker 1: are we going to have that kind of late nineties
Speaker 1: type explosion in retail activity? And it didn't quite happen
Speaker 1: maybe the way we might expect, But it's really happening
Speaker 1: in the options market, and it's happening via a lot
Speaker 1: of the companies that how a high nominal share price,
Speaker 1: So you know, your Tesla is your Amazons of the world.
Speaker 1: Perhaps retail traders cannot actually afford to buy a single
Speaker 1: share of those names, but you can kind of buy
Speaker 1: options at pennies on the dollar and make these moonshot
Speaker 1: bets that increasingly we're paying off and spurring a lot
Speaker 1: of other recommendations for moons moonshot bets. Well, take a
Speaker 1: step back, tell us about this forum. It's on Reddit,
Speaker 1: so remind everybody what Reddit is and what the forum
Speaker 1: is specifically and what's being talked about. So Reddit's kind
Speaker 1: of your your your classic internet online forum. It's divided
Speaker 1: into approximately a zillion subreddits where you deal with you know,
Speaker 1: every subject it has, you know, uh subjects. For one
Speaker 1: of my favorites is the Spoiled Survivor. I gotta I
Speaker 1: gotta find out if there's any intel about how that
Speaker 1: season is going to go. A forum for everything, for everything,
Speaker 1: for everything. So they also have this forum called Wall
Speaker 1: Street Bets, and it differs from Our Investing, which is
Speaker 1: another subreddit, and that these people are not aiming to
Speaker 1: take it as seriously. It's just really for this kind
Speaker 1: of this wild card craze, the action this shoot by
Speaker 1: the hip type of opportunities they see trading, and you know,
Speaker 1: there's a lot of a lot of profanity, as Jason
Speaker 1: alluded to a lot of lud language. It's definitely not
Speaker 1: PG thirteen rated. We can't talk about exactly right, some
Speaker 1: of the vulcarity. Yeah, there's not a lot of screenshots
Speaker 1: I could be able to post, but there's also a
Speaker 1: lot of like very smart, intelligent commentary that does seep
Speaker 1: through the cracks. I guess, So, Luke, help us understand
Speaker 1: how this works with the use of options, because you
Speaker 1: have a nice line in the story. They just get
Speaker 1: they believe they've discovered a kind of perpetual motion machine
Speaker 1: in the interplay of stocks and options. You alluded to
Speaker 1: this with the price of stocks, But how does this work?
Speaker 1: Because people really are by all accounts making money doing this,
Speaker 1: So the the interesting way to look at it or
Speaker 1: what they appear to think they've discovered. And unfortunately this
Speaker 1: came from something I wrote earlier on Tesla options and
Speaker 1: just kind of the the dynamics is that if you want,
Speaker 1: you know, if you want a fresh call option, what
Speaker 1: you'll have to do is, you know, you buy it
Speaker 1: from a dealer, a dealer is not in the business
Speaker 1: of taking directional exposure. So as soon as the dealer
Speaker 1: writes that call, the dealer is taking the other side
Speaker 1: of your position. The dealer is the facto short tesla.
Speaker 1: So what the dealer needs to do is by the
Speaker 1: the delta equivalent to get into the Greeks. We won't
Speaker 1: go too far, but by the delta equivalent amount of
Speaker 1: stock that corresponds to your call purchase, to make sure
Speaker 1: they're neutral, to make sure that if the stock goes up,
Speaker 1: the dealers protected. But if the stock goes up, the
Speaker 1: dealer does have to buy a little more. And this
Speaker 1: kind of this managing of your delta hedge is the
Speaker 1: way in which this community saw themselves as always having
Speaker 1: a get out of jail free card, is always having
Speaker 1: the greater fool to come and step in. Like in
Speaker 1: the late nineties. You just have to imagine it was there,
Speaker 1: and now they've invented a mechanism by which you know
Speaker 1: this can actually happen as long as we have the
Speaker 1: courage of our convictions to buy as many call options
Speaker 1: as humanly possible, especially in smaller names names. A lot
Speaker 1: of short interests relatively a liquid names we're going to
Speaker 1: be able to kind of force this this gamma chase
Speaker 1: on the part of dealers. Let's be specific and give
Speaker 1: an example, like I think you've wrote a story that
Speaker 1: Virgin Galactic, for instance, really wasn't on anybody's radar until
Speaker 1: these guys started talking about it. Virgin Galactic a crazy story.
Speaker 1: I think the the best example though, out of the list,
Speaker 1: would probably be lumber liquidators. So that's, you know, that's
Speaker 1: not as much of a story stock that you can
Speaker 1: get behind as you know, electric cars or a space travel,
Speaker 1: space tourism. This is really really kind of plain fair.
Speaker 1: But what was discovered is that somebody on this message
Speaker 1: board who had not posted but had been a member
Speaker 1: for three years, laid out this very elaborate, lengthy at
Speaker 1: least I I can't go into the commentary and how
Speaker 1: good or not it was, but lengthy, long thesis for
Speaker 1: lumber liquidators. The next morning, call volumes and lumber liquidators.
Speaker 1: I think they were something like seventies seven times the
Speaker 1: twenty day average. This was the only source of anyone
Speaker 1: talking about lumber liquidators at all, and that user was
Speaker 1: subsequently banned from the subreddit because even Wall Street bets said, Hey, like,
Speaker 1: we have to police our turf here. We can't let
Speaker 1: this be a ground for pure kind of pump and
Speaker 1: dump type scheme. You know. One user lamented, I wish
Speaker 1: we could just go back to losing inordinate amounts of money,
Speaker 1: because that's what you know, that's the history of of
Speaker 1: what Wall Street Bets has generally done on all of
Speaker 1: these kind of crazy calls. So where does this go
Speaker 1: from here? Luke? I mean, is this something that ultimately
Speaker 1: the SEC takes an interest in that other market regulators
Speaker 1: may examine, or is this, ultimately, as you alluded to,
Speaker 1: going to have to be self policed as so much
Speaker 1: on Reddit is. I I could see a case for
Speaker 1: regulators maybe getting involved. I could see a case for
Speaker 1: regulators thinking this is too small ball truly get into.
Speaker 1: And you know, the the activity does appear to have
Speaker 1: been relatively coordinated. I'm not sure how much of a
Speaker 1: different settle make, but I think the stepping back the
Speaker 1: big picture where does this go from here? That we
Speaker 1: should care about is the amounting evidence that you know,
Speaker 1: this is no free lunch here. There is no perpetual
Speaker 1: money machine just because you have the courage of your
Speaker 1: convictions and are loading up on call options. That doesn't
Speaker 1: mean somebody else who's a heck of a lot bigger
Speaker 1: is taking the other side. And that doesn't mean something
Speaker 1: like escalating concerns over the coronavirus can come in and
Speaker 1: just completely flip the table on you. Just the idea
Speaker 1: that we've been learning over the past few sessions is that,
Speaker 1: you know, perhaps retail, although it's exerted immense power over
Speaker 1: parts of the market this uh this year, maybe isn't
Speaker 1: always the the end all be all well. And I
Speaker 1: think that's what's interesting, right, Whether what this says about
Speaker 1: we've been constantly talking about the retail investor coming back
Speaker 1: to the market. Is it a sign just like the
Speaker 1: day traders of the nineties and you know their chat
Speaker 1: rooms right and talking up trades. Is this a sign
Speaker 1: that the retail or individual investor is kind of coming
Speaker 1: back to the market most most certainly you see it
Speaker 1: a little bit on the on just the pure equity
Speaker 1: flow side. Julian Emmanuel's at bt I has said, you know, February,
Speaker 1: retail is back. I'm seeing it in the flows. Where
Speaker 1: you're seeing it much more though, is in the options market.
Speaker 1: And one way to look at this is the average
Speaker 1: size of an options trade has gone down to just
Speaker 1: six point seven contracts. It was about twice that just
Speaker 1: a few years ago, so pretty rapid shrinkage. That's Luke Howa,
Speaker 1: who follows the stock market for us. The story in
Speaker 1: the Finance section of the magazine. But it's fascinating. It
Speaker 1: really just take us back to the nineties when we
Speaker 1: had day traders and they could really create kind of
Speaker 1: a story or a narrative in the markets. And this
Speaker 1: is kind of version of it. Right. It's answers the
Speaker 1: question what happens when you know sort of weirdos in
Speaker 1: the stock market get onto Reddit and the answer is
Speaker 1: a little bit scary. Yeah, absolutely so. News this week
Speaker 1: about HP pledging to buy back about fifteen billion dollars
Speaker 1: worth of stock, why, we'll safe to say it made
Speaker 1: shareholders a lot happier and it could potentially help fend
Speaker 1: off a hostile takeover from Xerox. But there's so many
Speaker 1: moving parts to this. Writing about Xerox and the HP
Speaker 1: battle this week is Austin Carr. He joins us right
Speaker 1: here in New York. It is a bit of a
Speaker 1: battle and the story is still being written. Although you
Speaker 1: had to write about it kind of where we are
Speaker 1: so far this week? How did you approach it? Well,
Speaker 1: there was just so many moving pieces within the last
Speaker 1: couple of months. So Enrique Laura's who's the CEO of HP,
Speaker 1: only came in November to the role, but that seemed
Speaker 1: like ages ago because they had a thirty five billion
Speaker 1: dollar hostel take over a lot of pressure from shareholders
Speaker 1: and activist investors like Carl Icon, who owns a significant
Speaker 1: stake in HP, really pushing them to merge with Xerox,
Speaker 1: which is this photo copy or giant, a hundred and
Speaker 1: thirteen year old company, and HP has sort of been
Speaker 1: pushed up against the wall to say, what are we
Speaker 1: going to do to fend off this acquisition or merger
Speaker 1: and how can we just impress our shareholders enough to
Speaker 1: remain independent. It's such an interesting story, such a kind
Speaker 1: of I feel like old time historical battle because you've
Speaker 1: got kind of you know, corporate raider, activist Carl Icon,
Speaker 1: he owned shares of both. I think he owns more
Speaker 1: of Xerox right in terms of a position, he has
Speaker 1: been pushing to get something done and he doesn't really
Speaker 1: necessarily care of Xerox by is HP or HP by Xerox.
Speaker 1: It feels like that's correct. The one thing he has
Speaker 1: signaled is that he would prefer xerox is management to
Speaker 1: to keep managing the company if they did merge. But
Speaker 1: he just wants a merger. He thinks there's a lot
Speaker 1: of synergies. You know, when you hear the word synergies,
Speaker 1: it's probably bad. That just means cost efficiencies, layoffs, things
Speaker 1: like that. They want to find overlap and there are
Speaker 1: areas to be fair where it might make sense, where
Speaker 1: areas that Xerox is stronger in versus HP and vice versa.
Speaker 1: But overall HP is a massive player. You know, this
Speaker 1: is a guard sort of colossal giant compared to Xerox,
Speaker 1: which is very tiny. But these are arguably two of
Speaker 1: the biggest innovation labs of the twentieth century, and it's
Speaker 1: really interesting to see them fight over essentially printers today.
Speaker 1: That's what I want to talk about. One last thing though,
Speaker 1: in terms of the news this week, I mean HP,
Speaker 1: with announcing earnings, announcing that buy back, they did also
Speaker 1: kind of keep the door open that they're open to
Speaker 1: maybe doing some kind of deal. Correct, Yes, that that's correct.
Speaker 1: So HP, basically I wanted to walk a fine line.
Speaker 1: They as you mentioned, they announced fifteen billion dollars and
Speaker 1: buy backs over the course of three years. They promised
Speaker 1: to really ramp up cost savings. And then they also
Speaker 1: to you know, we're open to talking about Xerox. But
Speaker 1: on the earnings call and after when I talked to Enrique,
Speaker 1: they wouldn't go into specifics. They would just say, hey,
Speaker 1: we're open to it. But I think that's just because
Speaker 1: they want to remain flexible and case shareholders don't really
Speaker 1: like this plan or the market didn't respond to it. Well.
Speaker 1: These were companies that were revered, especially HP if I
Speaker 1: think about it, but Xerox too for their R and
Speaker 1: D and being kind of at, you know, the front
Speaker 1: wave when it came to technology. Absolutely. I mean, if
Speaker 1: you look around your office right now, or your phone
Speaker 1: or computer or whatever, most of those technology gadgets innovations
Speaker 1: probably started with with Hewlett Packard, which was found in
Speaker 1: n It was the first garage startup in Silicon Valley,
Speaker 1: as well as xerox Polo Altar Research Center which is
Speaker 1: known as Xerox Park, and that's where Bill Gates and
Speaker 1: Steve Jobs went to found the graphical universe UH user
Speaker 1: interface that ended up in Windows and Mac operating systems
Speaker 1: that sparked the PC revolution. And these were the two
Speaker 1: pioneering innovation labs of the twentieth century that you know,
Speaker 1: everything from from Google X to Amazon's Lab one to
Speaker 1: six is sort of modeled themselves after, as well as
Speaker 1: every girl startup in San Francisco. UM, so it's really
Speaker 1: fascinating to see them go from that to just over
Speaker 1: the past decade or two, really narrowly focused on photo copiers,
Speaker 1: printers as well as ink. That's really their lifeblood. Well,
Speaker 1: and what's funny, Austin is and you put some numbers
Speaker 1: to this, I mean, printing is still a big business.
Speaker 1: It's it's really insane. I mean, you know, I do
Speaker 1: work for a magazine, so we're glad print is still around.
Speaker 1: I print a ton of stuff to you. But I
Speaker 1: d C the research firm estivates there's about three point
Speaker 1: two trillion pages printed every year. So just think about
Speaker 1: how many printers that takes. Just think about how much
Speaker 1: ink that takes. And and that's really where these big
Speaker 1: profits fe I mean, if I'm sure you've had the
Speaker 1: experience of going to Staples, everyone is frustrated with that,
Speaker 1: but you also got to think these printers are super cheap.
Speaker 1: You can get like a really high end printer for
Speaker 1: about sixty bucks, but then you're gonna pay thirty bucks
Speaker 1: for cartridge every two hundred pages, depending if it's color
Speaker 1: or black. Uh. And that's where the HP makes a
Speaker 1: huge amount of its process. That the printer division actually
Speaker 1: represents sixty of its profits and brought in about twelve
Speaker 1: point nine billion dollars last year. A significant amount came
Speaker 1: from incntner of all things, not exactly the most forward
Speaker 1: thinking thing, which is really funny when you think about
Speaker 1: the split up when Meg Whitman split up HP Hewlett Packard, right,
Speaker 1: and there was kind of the old business, the printing business,
Speaker 1: which nobody thought was going to do well, and then
Speaker 1: it was kind of the forward looking business, right um,
Speaker 1: and that was the business that kind of struggled. So
Speaker 1: it's interesting to see how this has kind of played out.
Speaker 1: It's really fascinating. I mean, I remember back to that
Speaker 1: that period in Meg Whitman essentially took the cloud and
Speaker 1: AI and consulting parts of the business, which are the
Speaker 1: quote sexier parts. I mean, if you talk to everyone
Speaker 1: in HP they admit that that was this sexier stuff
Speaker 1: to take. And HP Inc. Which is the was stuck
Speaker 1: with the printer and PC business which were at that
Speaker 1: time scene is just dying. And then they had this
Speaker 1: turnaround which was partly red led by their their current
Speaker 1: CEO who used to lead the printer division. Sales shot
Speaker 1: up between two thousand and sixteen and two thousand eighteen,
Speaker 1: the stock shot up, PC sales even rose during that time.
Speaker 1: And that's Austin car his story with Nico Grant. It's
Speaker 1: a must Reid in this week's magazine because day the
Speaker 1: snapshot of as you said earlier in the show, Carol,
Speaker 1: this ongoing story. We don't even know how it's gonna end,
Speaker 1: and even the players in the midst of it, like
Speaker 1: Carl Icon, they have different ideas about how they want
Speaker 1: it to end. And I love the line in the story.
Speaker 1: It's like hard to fathom that these two companies are
Speaker 1: where they are today because if you think about how
Speaker 1: many decades ago they were temples of engineering those at
Speaker 1: Austin's words, it's perfect, and then this is where they
Speaker 1: are today and they're struggling to figure out the future.
Speaker 1: I sort of want to tell my nineteen eighties self
Speaker 1: about this story. We're related to hew Litt, Packard and Xerox.
Speaker 1: This week, Harvey Weinstein we got a verdict. Weinstein was
Speaker 1: convicted of rape and a criminal sexual act, more than
Speaker 1: two years after allegations against the former Hollywood power broker
Speaker 1: really sparked the me Too movement. Now, Rebecca Greenfield, she
Speaker 1: is in charge of our diversity coverage here at Bloomberg News,
Speaker 1: and she and her team have been all over this story.
Speaker 1: It did. First of all, it was just two years ago.
Speaker 1: It feels like so much has happened. It feels like
Speaker 1: an eternity sometimes and then you look back and you're like, wait,
Speaker 1: bo was only fall to the seventeen. I have to
Speaker 1: check myself every time we write these stories. But yeah,
Speaker 1: those two years feel like a lot has changed. Because
Speaker 1: a lot has changed. Well, let's talk about that because
Speaker 1: I do think, um, and it was Harvey Weinstein and
Speaker 1: then other cases that came out, and I do feel
Speaker 1: like companies are less tolerant when they find an executive
Speaker 1: or senior executive and there's something that has gone on
Speaker 1: that is either harassment or just doesn't seem quite right.
Speaker 1: Like sometimes you get you know, the executives are out,
Speaker 1: so tell me, let's go through what's changed specifically. Yeah,
Speaker 1: So twenties seventeen happened Harvey Weinstein. All these allegations came
Speaker 1: out and something different happened, which is people were shocked
Speaker 1: and appalled and actually cared and that led to more
Speaker 1: similar allegations. And the thing about the Harvey Weinstein allegations
Speaker 1: is there were a lot of them against him, over
Speaker 1: a hundred. So that happened to lots of powerful people
Speaker 1: where there were multiple people coming out and saying this
Speaker 1: person's actually asked me or assaulted me, or was inappropriate.
Speaker 1: And I think the sheer volume of accusations against people,
Speaker 1: and then the sheer volume of people that were accused
Speaker 1: of things kind of led to this reckoning about what
Speaker 1: is going on in our workplaces. Well, let's talk about that,
Speaker 1: because I do think you know, among the things that
Speaker 1: you cover in a story that's at on the Bloomberg
Speaker 1: and Bloomberg dot com, you talk about things like by
Speaker 1: standard training in the workplace, And I think this is
Speaker 1: an important one. Right, it's not just the individual who
Speaker 1: does the act, but it's also those who are aware
Speaker 1: of it. Right, Yeah, So awareness has definitely changed in
Speaker 1: the workplace that sexual harassment happens and it's not okay,
Speaker 1: and there have been shifts both UM and formally and informally,
Speaker 1: so I would say formally as this by standard training
Speaker 1: that you're talking about, UM, more employees than ever undergo
Speaker 1: mandatory sexual harassment training, but also the type of training
Speaker 1: has changed. So by standard training focuses on training people
Speaker 1: in the workplace who aren't necessarily involved in the harassment
Speaker 1: to see it and to notice that, and people to
Speaker 1: identify it and to be able to know who to
Speaker 1: contact and what to say. And researchers found that is
Speaker 1: more effective than just the kind of training that we
Speaker 1: all know where it's like this is sexual harassment, don't
Speaker 1: do this, this happens to what's wrong. Don't do this,
Speaker 1: you might get fired. There's also some things like a
Speaker 1: Weinstein clause, right, and this is an M and A
Speaker 1: deals tell us about that. Yeah, So there are these
Speaker 1: things called the Weinstein clause, which is in M and
Speaker 1: A deals where they basically protect the buyer if something
Speaker 1: happens like somebody important like say the CEO or the
Speaker 1: chairman UM, gets gets called out for sexual harassment that
Speaker 1: the buyer can recoup some of those lasses because there
Speaker 1: are severe reputational damages that come in the era of
Speaker 1: me too. One of the things that I just want
Speaker 1: to go. Um. One last thing is things like n
Speaker 1: d as, nondisclosure agreements or even arbitration, which we've seen
Speaker 1: in a lot of companies, certainly in the financial community,
Speaker 1: technology community, that really prevent when something happens for it
Speaker 1: being you know, put out to the wider public. That's
Speaker 1: slowly going away. Yeah, I think these what we're considered
Speaker 1: standard tools, um, you know, ways to just handle harrassment claims,
Speaker 1: are now being seen as ways to cover up harassment claims,
Speaker 1: especially for repeat offenders. So the non disclosure agreement is
Speaker 1: definitely under scrutiny. UM. Bloomberg LP and Conde Nast just
Speaker 1: last week said that they were going to stop using
Speaker 1: them for sexual harassment claims. Some other organizations have let
Speaker 1: people out of their non disclosure agreements so that we
Speaker 1: can really get some sunlight on these accusations. UM. I
Speaker 1: would say forest arbitration is the other really big change. Um.
Speaker 1: You know, it's it's a dispute resolution process that lots
Speaker 1: of companies use for lots of things, but in sexual
Speaker 1: harassment claims. It's again seen as this way to litigate
Speaker 1: these claims behind closed doors, and that again if there's
Speaker 1: a repeat offender, nobody's going to hear about it. So
Speaker 1: multiple companies Facebook, Alphabet, Um, and recently while as Fargo
Speaker 1: have said that they won't use that anymore for sexual harassment.
Speaker 1: Bloomberg change came after my Go Bloomberg was criticized in
Speaker 1: a Democratic presidential debate for their usage. Now, he also
Speaker 1: said he would release three women from nondisclosure agreements n
Speaker 1: d as with his company. Bloomberg, of course, is the
Speaker 1: founder majority owner of Bloomberg LP, the parent company of
Speaker 1: Bloomberg Radio. All right, moving on now, Rebecca, there's a
Speaker 1: story in the magazine you wrote along with Cynthia Coon's.
Speaker 1: It's focusing on abortion clinics. You really go to what's
Speaker 1: going on in terms of running those clinics in the
Speaker 1: United States. Let's start with Amy Hags. John Miller tell
Speaker 1: us about her. Yeah, so you may remember her as
Speaker 1: the face of a victory in front of the Supreme
Speaker 1: Court four years ago or less than four years ago
Speaker 1: um homewoman's health teller status. She won a five three
Speaker 1: decision that overturned this Texas law that sad doctors had
Speaker 1: to have admitting privileges at hospitals nearby if they were
Speaker 1: going to perform in abortion clinics. And she won that case.
Speaker 1: That case had closed her clinic because that it's a
Speaker 1: really almost impossible standard for abortion doctors to meet because
Speaker 1: they don't actually send very many patients to hospitals, so
Speaker 1: it's hard to get privileges. Um and it closed her clinics.
Speaker 1: That closed a lot of the clinics in Texas, and
Speaker 1: so that was a big victory for her. You might
Speaker 1: remember the time, it was a big victory for abortion
Speaker 1: rights activists. Yeah. And then and then you know, we
Speaker 1: checked back in with her. You know, she opened back
Speaker 1: up one of her clinics that closed, or some of
Speaker 1: her clinics that closed. And this Austin clinic Um was
Speaker 1: targeted by anti an anti abortion group that basically forced
Speaker 1: her out of her lease where she had been for
Speaker 1: a very long time by offering her landlord a big
Speaker 1: commitment of five year commitment saying we can we can
Speaker 1: pay you for five years, and the landlords that I can't.
Speaker 1: Can you match that? And she said, I don't have
Speaker 1: the money, So it forced her to move out of
Speaker 1: this space, effectively shutting her down again for reasons that
Speaker 1: had little to do with the laws. And this was interesting.
Speaker 1: It was in Austin, which is considered a much more
Speaker 1: liberal city. Yes, definitely. I think we discovered that a
Speaker 1: lot and are reporting a lot of the issues that
Speaker 1: clinic space aren't in areas that we considered to be
Speaker 1: particularly hostile to abortion. I mean, Austin is in Texas.
Speaker 1: But she so she had to find a new space,
Speaker 1: and she said it took her nine months and she
Speaker 1: toward eighty places because people didn't want to be in
Speaker 1: the business of abortion, even in Austin, Texas. Well. She
Speaker 1: talks about she's coined this phrase an abortion tax. Tell
Speaker 1: us what that is. It's not an official tax, right,
Speaker 1: but in essence, it is during business. It's something we
Speaker 1: discovered and she had this great way of phrasing at
Speaker 1: the abortion tax, which is added fees or costs or
Speaker 1: burdens that just because you're in the business of abortion,
Speaker 1: you have to pay. And that's things like spending a
Speaker 1: bunch of months and a hundred thousand dollars to move
Speaker 1: because somebody forced you out of your lease. That's things like,
Speaker 1: you know, a window washer is not going to work
Speaker 1: with you because they they're telling you that, you know
Speaker 1: your window none knows are too old. When this abortion
Speaker 1: provider said, I can read between the lines, they just
Speaker 1: don't want to be in business with me. Or having
Speaker 1: to find a waste management company that's not being targeted
Speaker 1: by activists, because the ones targeted by activists they don't
Speaker 1: they don't want to be in that business. And so
Speaker 1: it's just this litany of expenses that add up making
Speaker 1: it really difficult, if not impossible, to stay in the
Speaker 1: business of abortion. And that includes you know, you've got
Speaker 1: greater security costs, but you also have insurers who don't
Speaker 1: want to do business with you anymore. Yeah, we discovered
Speaker 1: this this interesting thing that was happening with insurance. And
Speaker 1: this is business and insurance. So workers comp property insurance,
Speaker 1: we're insurers. We're saying, you know, we've decided we're not
Speaker 1: going to renew you anymore because it's they've deemed them
Speaker 1: to risk. Essentially, an abortion clinic in many ways is
Speaker 1: a small business, but this is like a whole other
Speaker 1: layer on top of it. So what has it meant,
Speaker 1: um Rebecca, in terms of we have less abortion clinics.
Speaker 1: There are fewer independent abortion clinics about you know, a
Speaker 1: third fewer since twelve in the US. And also there
Speaker 1: are fewer abortions in states that have been the most
Speaker 1: harshly targeted by abortion restrictions that close clinics down. So
Speaker 1: there's definitely some some trends that we can point out.
Speaker 1: Do you guys have some great statistics in there that
Speaker 1: this is happening, And this is at a point where
Speaker 1: if you survey most adult right, they are in favor
Speaker 1: of having an abortion option out there. Yeah. I think
Speaker 1: my understanding of abortion too was we talk a lot
Speaker 1: about Roe v. Wade or these big Supreme Court cases,
Speaker 1: but if you get on the ground, there are so
Speaker 1: many other issues that clinics are facing, or that women
Speaker 1: who want to get abortions are facing, that really have
Speaker 1: little to do with Roe v. Wade. And I think
Speaker 1: that's that's what our story, my hope shows. Okay, but
Speaker 1: didn't to go to the Supreme courts. There's another case
Speaker 1: right coming up this summer and what will that ultimately decide.
Speaker 1: In March, the Spoon Court is going to start hearing
Speaker 1: arguments for a case about a Louisiana law that is
Speaker 1: nearly identical to the law that shut Amy Hackstra Miller's
Speaker 1: clinic down. Basically, they're going to be deciding if that
Speaker 1: laws okay in Louisiana, and if the court, which is
Speaker 1: now more conservative than it was when Amy was in
Speaker 1: front of it, decides in favor of the law, that
Speaker 1: will close clinics down in Louisiana, and then potentially other
Speaker 1: states are going to pass similar laws which could potentially
Speaker 1: close more clinics down, and you can basically go from
Speaker 1: there and see what happens to um these businesses and
Speaker 1: the women who want to get abortions. That's Rebecca Greenfield,
Speaker 1: who manages diversity coverage here at Bloomberg. Two stories, two
Speaker 1: different stories, and so bring one about abortion clinics. You
Speaker 1: would think at this point, how many decades after abortions
Speaker 1: were made legal, that it would be easier to run
Speaker 1: an abortion clinic. It's not. So we're seeing things kind
Speaker 1: of slide back on the other and with the Harvey
Speaker 1: Weinstein and the Me Too movement, we have made some
Speaker 1: progress and there have been some changes in the workplace.
Speaker 1: It's a really important pair of stories, as you say,
Speaker 1: and grateful to Rebecca because she really does summon up
Speaker 1: really nicely. Let me throughout some numbers for you. More
Speaker 1: than eight two thousand, four hundred coronavirus cases they have
Speaker 1: been reported, with more new cases being reported outside China
Speaker 1: than within the country for the first time, highlighting the
Speaker 1: spread of the epidemic. Now, the first US case of
Speaker 1: the virus was confirmed in Washington State at Providence Regional
Speaker 1: Medical Center in Everett. That hospital is part of the
Speaker 1: twenty billion dollar Providence St. Joseph Health System, which includes
Speaker 1: fifty one hospitals, more than eight hundred clinics, and a
Speaker 1: hundred fifteen thousand caregivers. Dr Amy Compton Phillips is chief
Speaker 1: Clinical Officer and executive vice president at Providence St. Joseph
Speaker 1: Health Health and she joins us on the phone from Everett, Washington. UM.
Speaker 1: Dr Compton Phillips, nice to have you here with Jason
Speaker 1: and myself. So how do you now prepare for maybe
Speaker 1: what expected in the US and what are your expectations
Speaker 1: for the virus spread here in the United States. Our
Speaker 1: expectation out here is that this virus is now circulating
Speaker 1: in the community and we need to be prepared for
Speaker 1: for in fluxipations with symptoms UM, and so that includes
Speaker 1: making sure that that UM all of those access points
Speaker 1: in the community, so doctor's offices, we have express care
Speaker 1: clinics and Walgreens, we have urgent cares, all of those
Speaker 1: need to be prepared for people with symptoms UM. So
Speaker 1: we're really revving up our capacity not only to take
Speaker 1: care of patients when they come in, but also our
Speaker 1: online capabilities helping people have access to care through phone
Speaker 1: and through video visits so that they can get care
Speaker 1: from home and minimize the risk of transmitting the virus
Speaker 1: further UM. And then in our acute care hospitals, we're
Speaker 1: making sure we're prepared not only to keep patients isolated
Speaker 1: as we need to with any person with infections with
Speaker 1: that can be transmitted through respiratory droplets UM, but also
Speaker 1: who may need more intensive care so with respirators and
Speaker 1: ventilators and and more acute services. So it really is
Speaker 1: an all out attempt to make sure that we're ready
Speaker 1: and able to care for patients should this get significantly
Speaker 1: out of control. So Dr Cometon Phillips obviously there's a
Speaker 1: whole lot of information, a lot of misinformation out there
Speaker 1: help us understand just as sort of human beings in
Speaker 1: the world. What should we be doing? What are you
Speaker 1: advising folks to do to to minimize it, but but
Speaker 1: also to sort of deal with this as this potentially spreads. Sure, well,
Speaker 1: I think the key thing is right now, don't panic.
Speaker 1: One case does not mean, you know, we have an
Speaker 1: epidemic here in the US. Um it is like a
Speaker 1: very bad flu bug and people we've been dealing with
Speaker 1: the flu, and nobody is afraid of the flu, right,
Speaker 1: um So, is this much worse than the flu? I
Speaker 1: think that's what we're trying to understand a little bit.
Speaker 1: It is a more severe version. Um So. It causes
Speaker 1: very similar symptoms. It causes fever, headache, cost, shortness of breath.
Speaker 1: Um it's just so far in the statistics out of China,
Speaker 1: which we'll see if they play out here in the States.
Speaker 1: Um that of the people who get this infection about
Speaker 1: get a severe case. Um So, it goes from from
Speaker 1: the average blue symptoms to having a cause of severe
Speaker 1: in short espprest of severe you actually need supplemental oxygen
Speaker 1: um and in two and a half percent around the
Speaker 1: more between two and three percent of cases, it gets
Speaker 1: so severe causes death. Um So, one in five patients
Speaker 1: getting this infection in China needed needed much more acute
Speaker 1: treatment and that's significantly worse than the flu statistics of
Speaker 1: those years. Um. So it is like a very very
Speaker 1: virulent proof. One of the challenges is that, um, you know,
Speaker 1: most of us don't have antibodies to this version of coronavirus,
Speaker 1: and so being a novel infection, there's not any kind
Speaker 1: of what we would call herd immunity around where people
Speaker 1: are are more resistant to this term. And so you
Speaker 1: described a little bit of what you guys are doing
Speaker 1: at your facilities. UM. You know, what should people expect
Speaker 1: if they go into a doctor's office or a hospital
Speaker 1: in terms of how they may be quarantined or how
Speaker 1: they may be treated. Yeah, what we have been doing
Speaker 1: up until yesterday, UM is asking about travel history and
Speaker 1: and if you if you have been traveling, we've put
Speaker 1: been asked on you in h year isolated. If you're
Speaker 1: traveling and have symptoms, we would also um uh put
Speaker 1: you in an specific kind of isolation rooms, including negative
Speaker 1: pressure rooms, so that we could do a test safely
Speaker 1: and send that test off to the CDC um or
Speaker 1: or to the state Department's depending on where we are
Speaker 1: if the state department has capacity UM, so that we
Speaker 1: could actually do this new test for for COVID nineteen UM.
Speaker 1: That said, now that now that we have at least
Speaker 1: one confirmed case in the US, UM, we're working with
Speaker 1: the CDC and with our departments of health in each
Speaker 1: state to say how broadly do we need to be
Speaker 1: testing patients here on the West coast, which tends to
Speaker 1: be UM ground zero for infections that are coming over
Speaker 1: from the Pacific RIM. I mean, have we learned something
Speaker 1: from treating that first patient that you guys UM that
Speaker 1: actually was in your hospital system. We have. We've learned that.
Speaker 1: One is that in our first patient and now we've
Speaker 1: treated several patients, but in our first patient, he actually
Speaker 1: didn't quite well for several days and then took a
Speaker 1: turn for the worst UM. And so we know that
Speaker 1: we can't just we can't just write it off and
Speaker 1: say you're going to be fine. We actually are are
Speaker 1: being a little more cautious and watching people so we
Speaker 1: know what the natural history of this new disease looks like. UM.
Speaker 1: And the second thing is that we were again in
Speaker 1: conjunction with the CDC and and UM several several of
Speaker 1: our national International experts UM. We were able to get
Speaker 1: him access to an experimental drug which made a big
Speaker 1: difference in his care. And that's Dr Amy Compton Phillips,
Speaker 1: the chief clinic co officer over at Providence St. Joseph Health.
Speaker 1: I mean, this story, we talked about it earlier. It's
Speaker 1: obviously a market story, it's also an economic story. It's
Speaker 1: also a human story, and we're all trying to figure
Speaker 1: out how to deal with this. It's already the world's
Speaker 1: largest retailer, but did you know that it also already
Speaker 1: has a thirty six billion dollar pharmacy business, Jason, and
Speaker 1: now it wants to move more into the healthcare business.
Speaker 1: We're talking about Walmart, and this takes us very close
Speaker 1: to my hometown of Atlanta. Down there in Georgia, a
Speaker 1: big experiment going on there in the ex serbs, I
Speaker 1: guess you would call them. Matt Boyle went there. He
Speaker 1: covers all things Walmart for Bloomberg. He joins us in
Speaker 1: New York City. So what do you find there? I
Speaker 1: found a really interesting business story, Jason. It's really funny.
Speaker 1: I mean, Walmart already has, as you said, a big
Speaker 1: healthcare business there. The four million prescriptions a year, thirty
Speaker 1: six billion dollar business, but they want to get deeper
Speaker 1: into healthcare spending. It's three point six trillion dollars of
Speaker 1: spending in this country. It's disorganized, it's confusing. Nobody likes,
Speaker 1: you know, paying for healthcare. They don't know what they're
Speaker 1: gonna pay. Walmart's like, we can bring, you know, some
Speaker 1: clarity to this, were Walmart, So let's go ahead and
Speaker 1: do it. What's interesting Matt and Jason? I thought, I
Speaker 1: don't know if you just jumped out of you as well,
Speaker 1: but I mean, Walmart already has a hundred and fifty
Speaker 1: million weekly customers, right, so think about that's their base
Speaker 1: that they can already maybe tap into for healthcare. Exactly.
Speaker 1: They've got all those people going into their stores already.
Speaker 1: A lot of them are lower income, a lot of
Speaker 1: them are either uninsured or underinsured, or they don't like
Speaker 1: their healthcare plan. Walmart saying, hey, you're coming in for
Speaker 1: groceries already, it's a Saturday afternoon. Do you need you know,
Speaker 1: do you need a flu shots? Your kids sick? Do
Speaker 1: you need a tooth a tooth cleaning? And the people
Speaker 1: they are seeing in these new centers now granted there's
Speaker 1: only two so far. The third one is going to
Speaker 1: open this summer. But the people they are seeing in
Speaker 1: these health centers, some of them have not been to
Speaker 1: a doctor or a dentist in over a year. You know,
Speaker 1: this is not a totally new concept, and I think
Speaker 1: about what's going on at CBS specifically, uh, you know,
Speaker 1: in some of the other big boxers or I guess
Speaker 1: not big box, but but more the idea that the
Speaker 1: doctor's office is moving into retail in a lot of ways.
Speaker 1: So they're not alone here. Yeah, they're certainly not alone here.
Speaker 1: CVS is going very heavy into this as well with
Speaker 1: their new health hubs. They want to have fifteen hundred
Speaker 1: of them by the end of next year. But this
Speaker 1: is really rethinking retail healthcare. The problem with the care clinics,
Speaker 1: or minute clinics, as CVS has called them. They've been around, yeah,
Speaker 1: over the past decade um, but they're cramped, they're small,
Speaker 1: and the problem on the retailer side is they never
Speaker 1: see enough volume to justify their fixed costs. So for
Speaker 1: that reason, Walmart has had these for the past six years,
Speaker 1: but they only have nineteen of them. With these new
Speaker 1: health centers, they are really blowing it out. These things
Speaker 1: are six thousand, seven thousand square feet, twelve exams rooms
Speaker 1: you know, I Care dental. If you can't hear the doctor,
Speaker 1: they'll send you in for a hearing check even I mean,
Speaker 1: and then of course when you're done, they move you
Speaker 1: right out to the pharmacy. Well, tell me how this works.
Speaker 1: And that's what's amazing. They're big centers. As you said,
Speaker 1: you can have your teeth clean, you can get counseling.
Speaker 1: Let's say, have anxiety problems or other problems. Um, when
Speaker 1: a lab test on Sunday. I would love that. It's
Speaker 1: a little bit more convenient. How cool. They don't take
Speaker 1: insurance right, and they've got a price list they will,
Speaker 1: but they are guessing most people even if you have insurance, right, Um,
Speaker 1: if you don't want to deal with the copays and
Speaker 1: deductible as you might just pay the flat cash fee.
Speaker 1: So when you're signing up for your point and you
Speaker 1: do tell them I do I have insurance or not?
Speaker 1: Am I in medicare and they will adjust for that.
Speaker 1: But for a lot of people they might just say
Speaker 1: I'll just pay the twenty five bucks flat flat cash
Speaker 1: fee and not have to deal with with Etna or
Speaker 1: Blue Cross or whatever. Um So for the insurance companies,
Speaker 1: they're probably thinking, you know, um so, yeah, it's Walmart
Speaker 1: is really you know, disrupting the health care sectory? What
Speaker 1: about that price list? And I am curious, right, I
Speaker 1: don't know if you thought about this, Jason, I think
Speaker 1: about I see, you know, the insurance claims and what
Speaker 1: things you know, supposedly cost and then what they've kind
Speaker 1: of uh negotiated right um with the provider. So what
Speaker 1: is the price that wants to simplify all of that?
Speaker 1: You walk in is a huge digital billboard just saying
Speaker 1: here's all the prices. Teeth cleaning is twenty five bucks.
Speaker 1: Mental health a dollar a minute. I mean, that's a
Speaker 1: real interesting one. There's a lot of these retail healthcare
Speaker 1: clinics historically have never provided mental health. And often you
Speaker 1: walk in, Let's say you get a physical check up
Speaker 1: and the doctor notices you're really anxious or maybe you've
Speaker 1: just been diagnosed with diabetes. You're worried. They can send
Speaker 1: you right over to the next exam room for people.
Speaker 1: You know, you'll get the counseling you need. Now. Of
Speaker 1: course any doctor will do that, but it would require
Speaker 1: you normally to book another appointment with a therapist, and
Speaker 1: then who has time for that? And a lot of
Speaker 1: people wouldn't end up following through. But at Walmart, they
Speaker 1: just shuffle you into the next exam room. And I
Speaker 1: think that model will work for a lot of people.
Speaker 1: And so, Matt, I believe this is not their first
Speaker 1: go at this, right, They've experimented at least on the
Speaker 1: on thergence here and it didn't go so well last time. Yeah,
Speaker 1: I mean, they've been doing this for some time. The
Speaker 1: original retail health clinics did not work for Walmart. They
Speaker 1: didn't really work for for anyone. Walmart has also been
Speaker 1: distracted by other strategic priorities. Remember they're their biggest retailer
Speaker 1: in the world. Uh. In the intees, they were building
Speaker 1: out supermarkets in the food business, and over the past
Speaker 1: five ten years they've had to build out their e
Speaker 1: commerce business to battle Amazon. So healthcare has never been
Speaker 1: a real strategic priority for the company until now though,
Speaker 1: and now it certainly is. Well let's go there, because man,
Speaker 1: I feel like we're ignoring the elephant in the living room.
Speaker 1: I mean, there have been the cases of where, you know,
Speaker 1: Walmart employees themselves weren't getting great healthcare. Um. It's an
Speaker 1: interesting company that you know, offers a lot of different
Speaker 1: things including cigarettes and guns, and some might say, well,
Speaker 1: wait a minute, they're trying to move, you know, much
Speaker 1: more to healthcare and it seems to kind of go
Speaker 1: against some of their history. Trust factor is going to
Speaker 1: be big here. I mean Walmart, yes, historically has never
Speaker 1: taken very good care of their associates on the wage
Speaker 1: side and also the benefits side. There was an internal
Speaker 1: memo from two thousand five that leaked UM that really
Speaker 1: said that Walmart associates UM and their children, a lot
Speaker 1: of them were uninsured or on Medicaid because they simply
Speaker 1: couldn't afford Walmart's own healthcare plan. And Walmart called it
Speaker 1: a reputational issue, basically saying we're getting killed for this
Speaker 1: in the in the press. Now that was then, though,
Speaker 1: Walmart knows that they're going to have to overcome this
Speaker 1: sort of trust factor. But for me, the question is
Speaker 1: this for a lot of people, it's not do you
Speaker 1: want Walmart to provide your healthcare? Is do you have
Speaker 1: to have Walmart? You know, for a lot of people
Speaker 1: that kind of they need it. Saturday Morning your kid
Speaker 1: is sick, you need a lab test. A woman I
Speaker 1: spoke to down in Georgia needed a lab test done
Speaker 1: on the weekend. Walmart was the only place open and
Speaker 1: it was ten bucks cheaper. She went in, got it
Speaker 1: done and oh, by the way, she filled the prescription
Speaker 1: there too. She didn't normally do that. It's gonna build
Speaker 1: Walmart store traffic and their regular you know traffic as well,
Speaker 1: and that's good for them. Certainly, Walmart has to worry
Speaker 1: about Amazon here as well. Talk to us about that showdown.
Speaker 1: Amazon bought an online pharmacy pill pack a couple of
Speaker 1: years ago. They've been talking about drone deliveries. They have
Speaker 1: this huge consorttion with JP Morgan Chase and Berkshire Hathaway
Speaker 1: that's looking to reduce the cost of their own employees healthcare.
Speaker 1: But not a lot has really moved forward this with that. Obviously,
Speaker 1: they've gotten a lot of headlines Walmart saying we need
Speaker 1: to play to our strengths. Our strength is our stores,
Speaker 1: our four thousand, seven and sixty sum stores in the US.
Speaker 1: And remember this is not just going to take place
Speaker 1: in the health centers. What's not in the story, but
Speaker 1: what Walmart told me, is they see this moving into
Speaker 1: telehealth as well, basically healthcare in your home. They already
Speaker 1: have a division set up for this, that's the next
Speaker 1: step after this, and they're already doing it in their
Speaker 1: Sam's Club warehouse division with a company called ninety eight
Speaker 1: point six. All right, that's Matt Boyle, who covers all
Speaker 1: things retail for us here at Bloomberg. I always loved
Speaker 1: talking to Matt and his reporting. He went down to Georgia,
Speaker 1: he checked out what Walmart is doing in terms of
Speaker 1: their health care centers. Well, Walmart already a big player
Speaker 1: when it comes to filling prescriptions, but man, they want
Speaker 1: to do even more well, and it's going to be
Speaker 1: a competitive space. The healthcare landscape changing pretty dramatically. Don't
Speaker 1: count Walmart out for sure. None of day goes by
Speaker 1: without a company talking about a green initiative. And Jason,
Speaker 1: that includes the big tech companies like Google, which this
Speaker 1: story talks about. It's got commitments to environmental sustainability, and
Speaker 1: yet there's an element to it that some might say
Speaker 1: is not in keeping with the spirit of going green. Well,
Speaker 1: and this story feels so carol in a lot of
Speaker 1: ways because it's about big tech but it's also about
Speaker 1: the economy in the United States, small towns grappling with
Speaker 1: employment and really an existential question about their future. Jeff
Speaker 1: Muscus in New York with this story, tell us what
Speaker 1: you found. This is an emblematic story in many ways. Yeah,
Speaker 1: the the small town of Becker, Minnesota has done about
Speaker 1: two things well for the past forty years or so,
Speaker 1: burn cole and pay taxes. Um. The the Scherko power plant,
Speaker 1: what locals called the Sherburn County Generating Station. It's about
Speaker 1: four times a size of your average coal power plant
Speaker 1: and produces enough power to to light up about half
Speaker 1: of Minnesota. It's also the the worst emitter in the region.
Speaker 1: And so when when Google was looking around for places
Speaker 1: in the area to put a new six million dollar
Speaker 1: data center, part of the sales pitch, local and county
Speaker 1: and state officials and the local utility player, Excel Energy,
Speaker 1: was okay. In addition to the usual you know, raft
Speaker 1: of of tax breaks, the company's getting exempted from local
Speaker 1: and county taxes for the next twenty years. Uh, they're
Speaker 1: also getting kind of sweetheart deals on uh their their
Speaker 1: energy bills and uh, you know, in ways that are
Speaker 1: going to help it offset it's carbon emissions by um,
Speaker 1: you know, burning this coal for the next ten years
Speaker 1: before they can push Excel to close the power plant
Speaker 1: earlier than expected. And in the meantime, UH subsidized some
Speaker 1: of the cost of their wind power offsets. There's a
Speaker 1: lot of the story that I really love, and I
Speaker 1: feel like it speaks to the heart of this story.
Speaker 1: Google's arrival and Becker an object less than in the
Speaker 1: unique leverage that big tech companies outsize power needs um
Speaker 1: and what it gives them over local utilities at a
Speaker 1: moment when few industries power needs are growing. So this
Speaker 1: if you think about a Google, right, and maybe it's
Speaker 1: an Amazon, Pick anyone that's got huge data centers, right,
Speaker 1: they need a ton of power to fuel these data centers. Yeah,
Speaker 1: as as you guys were just saying this, the story
Speaker 1: has been kind of a long time coming for the
Speaker 1: past fifteen years or so, as power needs have sort
Speaker 1: of flatlined across a wide array of industries, while the
Speaker 1: tech companies needs for these data centers increasingly all over
Speaker 1: the country and the world have really taken off. You know,
Speaker 1: it's giving them a ton of leverage, you know, probably
Speaker 1: a unique leverage relative to that of other industries in
Speaker 1: wrestling with utility companies that you know, previously had been
Speaker 1: kind of the big dogs in these conversations. Right, So
Speaker 1: it's big power versus big tech. But big power really
Speaker 1: needs big tech right now, right, Yeah, absolutely, They even
Speaker 1: utility players that are you know, local or even regional
Speaker 1: monopolies are seeing demand pretty flat across most other kinds
Speaker 1: of companies besides big tech right now, and so that
Speaker 1: that's adding pressure on local politicians and state regulators to
Speaker 1: you know, say yes, two deals that you know, in
Speaker 1: many cases are not as good for the local communities
Speaker 1: as you know, the the kinds of power plant set
Speaker 1: ups they're replacing, you know, even though they're they're definitely
Speaker 1: markedly better for the environment. Well, let's talk about that
Speaker 1: specific issue, Jeff, because Google very savvy here. You know,
Speaker 1: we have come to learn, I feel like over the
Speaker 1: past few years that big tech has gotten very smart
Speaker 1: about figure out ways to get its own way and
Speaker 1: to get its own way to its advantage economic advantage.
Speaker 1: They played this one pretty perfectly based on the reporting
Speaker 1: that you guys did. Yeah, our reporter Maya Fraser found
Speaker 1: by you know, looking through documents and talking to folks
Speaker 1: there that you know, on the on the ground Google
Speaker 1: went in, you know, and as early as seventeen, you know,
Speaker 1: a couple of years before the deal was announced, you know,
Speaker 1: under the guys of a couple of shell companies, only
Speaker 1: revealing it's it's identity to the public on the very
Speaker 1: day that the deal was passed through by the Minnesota
Speaker 1: Public Utility Commission. Uh, this is becoming kind of a
Speaker 1: dura groff for tech companies that are trying to um,
Speaker 1: you know, extract favorable terms for UH data center construction
Speaker 1: and tax breaks across the country. But you know, again,
Speaker 1: this is kind of um, you know, uniquely just positive
Speaker 1: case as far as both the degree to which tech
Speaker 1: companies have power to control how the deals go and
Speaker 1: also power to control the narrative around them well and
Speaker 1: the and they know Jeff that basically and you have
Speaker 1: a local official essentially says this, like, listen, we would
Speaker 1: have loved for Google to come to town without all
Speaker 1: these incentives, but the reality is is that we're sort
Speaker 1: of hoping over the next twenty years that it plays
Speaker 1: out to our advantage. They're they're kind of stuck. Yeah,
Speaker 1: and and a big part you know, you saw in
Speaker 1: the statement the commission and local lawmakers put out when
Speaker 1: the deal was announced last spring that you know they
Speaker 1: they they sigh. I did uh study commissioned via Google
Speaker 1: as one of the main you know, economic impact reasons
Speaker 1: justifications for the project. Uh. And so as you say,
Speaker 1: they're kind of they don't have a ton of other options.
Speaker 1: And that's Jeff Muscus bringing us up to speed on
Speaker 1: what Google is up to and what it may mean
Speaker 1: for how big tech continues to exert its influence, maybe
Speaker 1: in a way that we didn't anticipate. Yeah, exactly. In
Speaker 1: the power industry, if you think about it, some of
Speaker 1: their needs are power needs from other industries. They're not growing,
Speaker 1: but when it comes to big tech, they are, and
Speaker 1: it's giving that big tech industry a lot more leverage
Speaker 1: when it comes to working with big power. His bio
Speaker 1: says he only eats fruit till noon. I'm sure everybody
Speaker 1: who covers him says this because it's a great line
Speaker 1: in your bio. He's a former rapper. He's also author
Speaker 1: of the New York Times bestseller Living with a Seal
Speaker 1: Thirty one Days Training with the Toughest Man on the Planet.
Speaker 1: He co founded the private jet card company Marquis Jet
Speaker 1: that was sold to Berkshire Hathaway. He has done so
Speaker 1: much in his life. Owner of the NBA Atlanta haw Us,
Speaker 1: father four, now he's a millionaire life coach. He was
Speaker 1: recently the subject of the opener of the Pursuit section
Speaker 1: of Business Week magazine, and Jesse Hitler is joining us.
Speaker 1: I'm so delighted to have you here with us. Thank you.
Speaker 1: And you're not done yet, are you know? What is
Speaker 1: it about your DNA, because you've gone a lot of
Speaker 1: different places. What is it that kind of drives you
Speaker 1: in your life? Uh? I'm a big check the box
Speaker 1: and move on guy. So I really just want to
Speaker 1: have a big appreciation for where I am in my life,
Speaker 1: and I believe in building my life resume more than
Speaker 1: my traditional resume. So I'm just always kind of like
Speaker 1: finish something and onto the next, never looking back. No,
Speaker 1: you know what, Carol, I want to go through this
Speaker 1: life like I'm and at the end of the journey
Speaker 1: be like I don't want to look back and be
Speaker 1: like I was the eight percent version of myself. So
Speaker 1: I really am sensitive to how much time I have
Speaker 1: left and just you know, trying to do as much
Speaker 1: as I can, right, because you could. Right, you're financially
Speaker 1: set that you could kind of just do whatever the
Speaker 1: heck you want. But you continue to help other people.
Speaker 1: Talk to me about this life coaching that you're doing.
Speaker 1: We talked about this, wrote about it. Andre's Mellen wrote
Speaker 1: about it in the magazine Tell me what you're doing
Speaker 1: and why you're doing it. Well, I've had a very
Speaker 1: unorthodox business journey, you know. I started out in the
Speaker 1: music business coconut order with a company called Zico, which
Speaker 1: we sold to Coca Cola and everything in my life. Um,
Speaker 1: it wasn't really planned. I kind of just fell into
Speaker 1: it and started the process and turned it into a business.
Speaker 1: And this is not this is no different. I wrote
Speaker 1: a book called Living with the Seal about a Navy
Speaker 1: seal that came to live with my family and myself
Speaker 1: for thirty one days, and it led to um speaking
Speaker 1: engagements and this and that, which turned into people wanting more.
Speaker 1: They want to know more about Well, what's it like?
Speaker 1: You know, we're all wired too and told to like
Speaker 1: be around like minded people, and like minded people tell
Speaker 1: us like minded things. And we learned from stepping into
Speaker 1: the unknown and being around people that aren't like us,
Speaker 1: so getting a little uncomfortable. I just think, yeah, so
Speaker 1: when I look back at my life and the various
Speaker 1: life experiences, I believe like the more you experience, the
Speaker 1: more you have to offer. And um, it just morphed
Speaker 1: into people asking me a lot of questions about business,
Speaker 1: about parenting, about I lived with on a monastery for
Speaker 1: for almost a month, and it just led to a
Speaker 1: lot of questions that you know, how could I help
Speaker 1: the most amount of people and share my experiences in
Speaker 1: these different buckets and it turned into a coaching program.
Speaker 1: We'll tell us about this coaching program. Who actually, I
Speaker 1: think you know who actually are the people who come
Speaker 1: to do it. These are very successful people, right, there's
Speaker 1: walks of life. Well, it's people from all different stages
Speaker 1: of life. It's from CEO s two moms and dads
Speaker 1: that are just feel overwhelmed and are looking for guidance.
Speaker 1: It's called Build your Life Resume, and it's really it's
Speaker 1: it's interesting because it's not a business coaching course, although
Speaker 1: I offer business strategies and tips from my journey, it's
Speaker 1: really about most of us play defense in our life.
Speaker 1: Like our calendars fill up with appointments and meetings and
Speaker 1: weddings and all these different things than our calendar is
Speaker 1: full and like the year goes by and like what
Speaker 1: do we do this year? And this is really about
Speaker 1: playing offense. It's about what do you want to do.
Speaker 1: What are the things that you want to prioritize, What
Speaker 1: are the races you want to run, what are the
Speaker 1: adventures you want to take, what's the RV trip you
Speaker 1: want to take with your family, and scheduling that first,
Speaker 1: prioritizing yourself first, and letting those other appointments fill in
Speaker 1: around that. So at the end of the year, when
Speaker 1: you look back, you're like, WHOA, I accomplished Da da
Speaker 1: da da da da, instead of Wow, I'm living in routine.
Speaker 1: I'm going through like this life like this. Then all
Speaker 1: of a sudden, I'm seven to eight and I'm like, whoa,
Speaker 1: I can't run that marathon anymore. You know, it's very
Speaker 1: much more on the offensive, right, that's what you're saying,
Speaker 1: and not being a defensive What's interesting though, is it's
Speaker 1: it's physical, right. This is the equivalent of kind of
Speaker 1: I think the way we wrote it in the story
Speaker 1: or Andrews wrote it equivalent to kind of climbing Mount Everest. Well,
Speaker 1: I have an event called about yeah at um. You
Speaker 1: know that's separate. It's separate, it's separate. I'm a really
Speaker 1: big There's an old Japanese ritual I learned about this
Speaker 1: from a guy named Kyle Corver played for the Hawks,
Speaker 1: called the Missougi and the notion around the missage as
Speaker 1: you put one thing on your calendar so hard every
Speaker 1: year that the bennett that kind of defines the year,
Speaker 1: and the benefits last the entire three sixty four other
Speaker 1: days of the year. And I was thinking, well, you know,
Speaker 1: looking for something I could do with my wife and
Speaker 1: my friends in the endurance sports kind of category. Because
Speaker 1: I'm an endurance athlete. I love the celebration around endurance,
Speaker 1: how it makes you feel when you accomplish that, et cetera.
Speaker 1: I want to share that with more people. But I
Speaker 1: was frustrated because a lot of the options required you
Speaker 1: to be a great swimmer, an obstacle course racer, or
Speaker 1: a great runner, and that eliminates a big pool of
Speaker 1: people had to do so much to get to that point, right,
Speaker 1: So I wanted something that could reach a wider group
Speaker 1: of of a wider audience. We created this event called nine,
Speaker 1: which basically is we rent a mountain, you hike up
Speaker 1: the mountain, you take the gondola down, and you repeat
Speaker 1: until you climb the equivalent amount everest right, and you
Speaker 1: do it within a set amount of time six hours.
Speaker 1: So we've had eight sold out events and my wife
Speaker 1: has participated. I know, you know, my wife, Sarah Bly,
Speaker 1: founder of Spanks. Yeah. Yeah, And there's no winner. It's
Speaker 1: just kind of like a you versu you challenge and
Speaker 1: it's really something where, Um, what I love about endurance
Speaker 1: events they forced you to be where your feed are
Speaker 1: and they forced you to be super present in a
Speaker 1: really busy world. And um, these challenges have been amazingly
Speaker 1: successful because they're outdoors and they come down to one thing.
Speaker 1: Will not like you know, I'm this amazing Olympic athlete,
Speaker 1: but like, do I have the will to stay in
Speaker 1: and do this right? Because it's lengthy, right, I think
Speaker 1: you know, you have to have patience to do it right. Like,
Speaker 1: you know, it's not something you're gonna be done in
Speaker 1: four hours, right, You've got to keep going right. Yeah,
Speaker 1: the last one took me twenty seven hours. Well what
Speaker 1: do you make of my coach Jason Kelly and I
Speaker 1: we have a lot of guests on you know, we
Speaker 1: are both um just kind of in a what's going
Speaker 1: on in the wellness and fitness world, And I do
Speaker 1: think it's evolving to a place where even the medical
Speaker 1: community is realizing how much how important this is. It's
Speaker 1: not just to go to the gym once a week
Speaker 1: and you know, eat crop the rest of the week,
Speaker 1: you know what I mean. And I think you play
Speaker 1: into that that people are really thinking about this is important.
Speaker 1: Set your goals at the beginning of the year, but
Speaker 1: it's it's something that's going to have a much more
Speaker 1: lasting impact on you See. I don't even like the
Speaker 1: word goals around wellness. It's lifestyle because if you start
Speaker 1: thinking goals and deprivation, that never works. And you know,
Speaker 1: it's about lifestyle. When I have a goal, if that
Speaker 1: becomes my life right now, that's my lifestyle until the
Speaker 1: goal is done and then I go back to my
Speaker 1: regular life. But I don't look at as a chore.
Speaker 1: I don't look at it like I'm depriving myself. I
Speaker 1: have like this is what I'm doing and it's part
Speaker 1: of my daily routine. This month, I'm doing something called
Speaker 1: the Calendar Club that I coined, where every day I
Speaker 1: run the amount of miles the corresponds to the day
Speaker 1: of the month. It is and it's hard, brutally hard,
Speaker 1: but it's my lifestyle. It's a commitment that I'm going
Speaker 1: through and I don't negotiate those goals. They don't I
Speaker 1: don't negotiate my goals like it's just that's baked into
Speaker 1: what I'm doing today. And I'm so yeah, I'm just
Speaker 1: surprised that people are all of a sudden are like, wow,
Speaker 1: the benefits of this is like, you know, look how
Speaker 1: you feel you accomplish, But do you know what I mean,
Speaker 1: It's not just like go to the aerobics class and
Speaker 1: just have some fun with your friends and then kick
Speaker 1: back the rest of the week or whatever. Like I
Speaker 1: do feel like we're thinking more holistically about taking care
Speaker 1: care of this incredible machine that we've been given, right
Speaker 1: and that we tend to abuse a lot. I think
Speaker 1: there's a big trend and that obviously, and I think
Speaker 1: there's a big trend in experiences, and I think the
Speaker 1: days of vacationing on the beach are starting to go
Speaker 1: a little bit like this, and people want more, they
Speaker 1: want experiences, they want to learn. You know, it's like
Speaker 1: Gandhi said, it's like, um, live like you're gonna learned,
Speaker 1: like you're gonna live forever. And wait, what did you say,
Speaker 1: learn like you're gonna live forever. Live like you're gonna
Speaker 1: die tomorrow. Yeah. Right, makes you think about things differently.
Speaker 1: You know, You've gone through so many different stages in
Speaker 1: your life. I feel like, you know, I mean, it's
Speaker 1: fun to read your bio and I'm sure everybody asked
Speaker 1: you know, a rapper and started these companies. I mean,
Speaker 1: what have you take us back to one of those moments.
Speaker 1: I mean, I don't know whether it was um, you know,
Speaker 1: the jet company, or whether it was the drink company, Like,
Speaker 1: is there a moment in time that really just made
Speaker 1: a market difference on you in terms of your perspective
Speaker 1: on life. I've had so many of those moments, you know,
Speaker 1: and most of those big moments are around failure. And
Speaker 1: I remember when my music career started, I was on
Speaker 1: a show called Club MTV. At the time, it was
Speaker 1: like a big deal at on top of the world.
Speaker 1: And then I went to do my first performance in
Speaker 1: Pittsburgh and I got off the plane and on the
Speaker 1: cover and a magazine rack. When I walked off the
Speaker 1: plane was a magazine called Rap Pages. And my picture
Speaker 1: was on the cover of Rap Pages. It was like
Speaker 1: the equivalent of being on like a find like you
Speaker 1: like this. It was unbelievable. So I'm like, oh my god,
Speaker 1: I gotta buy all these and send them to my family,
Speaker 1: and my parents are gonna So I bought all these
Speaker 1: magazines and I'm at the check out and I look
Speaker 1: at the headline and says a white rappers ruining hip
Speaker 1: hop and it was my picture. And I didn't want
Speaker 1: to leave for six months. I felt like I didn't
Speaker 1: even want to go out in the public, you know.
Speaker 1: But guess what, nobody remembers that. A couple of years later,
Speaker 1: we were doing a hundred fifty million dollars at Marquis Jet.
Speaker 1: Like your life in any second can shift and you
Speaker 1: can have this, you know, your one iday idea away
Speaker 1: from this life changing moment. That's Jesse Hitzler. And as
Speaker 1: we mentioned, he's been an entrepreneur, he was a rapper.
Speaker 1: He's done so many fascinating things. He keeps looking for
Speaker 1: what's next, and right now, what's next? Is his own
Speaker 1: endurance training and workouts, but he's also helping other people
Speaker 1: achieve that as well. Well, where else are you're going
Speaker 1: to have a discussion about run DMC and ultra marathons
Speaker 1: and coconut water. He inspired me after it gave me
Speaker 1: some goals to go after. We're gonna work in our
Speaker 1: life resumes together. Catch the entire interview that Carol did
Speaker 1: with Jesse Hitler. It's our Business Week Extra podcast, and
Speaker 1: that wraps up the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. Thank you 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 Well Street time. And you can't
Speaker 1: catch us live, get our daily podcast wherever you download
Speaker 1: your podcast. You can also watch the show live on YouTube.
Speaker 1: Just search for Bloomberg Global News and you can get
Speaker 1: this week's edition to the magazine on newsstands now. Will
Speaker 1: be back next week at the same time. This is
Speaker 1: Bloomberg