WEBVTT - China Eastern Crash May Not Suggest Broader Boeing Issue 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Karl Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.480 --> 0:00:28.400 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:33.000 search Bloomberg clovel News. We are keeping a watch on 0:00:33.120 --> 0:00:36.320 shares of Boeing because we have seen them trading lower, 0:00:36.360 --> 0:00:38.120 definitely off there at worst levels of the session, but 0:00:38.120 --> 0:00:40.040 still done about four and a half percent. This is 0:00:40.080 --> 0:00:42.920 the company faces a new crisis after a seven thirty 0:00:42.960 --> 0:00:45.760 seven jet fell out of the sky and shina hundred 0:00:45.800 --> 0:00:48.919 thirty two people on board, renewing concerns over that best 0:00:48.960 --> 0:00:52.400 selling family of planes for the company, and as we mentioned, 0:00:52.760 --> 0:00:54.520 sending the shares tumbling. I mean, this is something that 0:00:54.520 --> 0:00:57.000 everybody's been talking about that certainly is George Ferguson is 0:00:57.080 --> 0:01:00.320 senior aerospace, defense and airlines analysts with Bloomberg and Tell Legends. 0:01:00.320 --> 0:01:02.720 George joins us on the phone from New Jersey. George, 0:01:02.720 --> 0:01:06.039 good to have you with us. Uh, some obviously a 0:01:06.120 --> 0:01:09.960 tragedy here. Um, explain though, why you think that the 0:01:10.000 --> 0:01:12.360 shares are reacting this way? Because I gotta tell you 0:01:12.400 --> 0:01:15.760 the seven thirty seven from what I've read, hundred n 0:01:16.000 --> 0:01:18.040 this is the next generation, the one that preceded the 0:01:18.040 --> 0:01:20.840 seven thirty seven Max, so completely different version of the 0:01:20.880 --> 0:01:25.240 seven thirty seven. Uh, this is among the safest airplanes 0:01:25.360 --> 0:01:29.399 out there. Yeah, agreed, Thanks thanks for having me on 0:01:29.760 --> 0:01:32.280 and ye yeah, well we're very you know, we're very 0:01:32.480 --> 0:01:35.680 mindful the fact that this is a human tragedy. Sorry 0:01:35.720 --> 0:01:39.000 for the lives that were lost. Here. The airplane, the 0:01:39.040 --> 0:01:44.080 seven hundred is very safe airplane. You know. One of 0:01:44.120 --> 0:01:47.080 the ways we think about that is that there's been 0:01:47.520 --> 0:01:50.320 over five thousand of those airplanes built, the seven thirty 0:01:50.320 --> 0:01:56.360 seven Dash eight hundred specific variants, and um, there's still 0:01:56.400 --> 0:01:59.560 in service five park. I would imagine a bunch of 0:01:59.560 --> 0:02:02.760 them would come back actually into service as we come 0:02:02.760 --> 0:02:05.680 out of the pandemic. Um. You know, it's really been. 0:02:05.880 --> 0:02:08.079 It's the mainstay of a lot of fleets around the world. 0:02:08.120 --> 0:02:11.480 We see airlines like Ryanair operating a lot of those 0:02:11.560 --> 0:02:14.920 seven thirty seven eight hundreds at twenty plus years of age. 0:02:15.320 --> 0:02:18.640 This particular airplane was about six point eight years old 0:02:18.639 --> 0:02:22.399 from the data we see, which is a fairly young airplane. 0:02:22.960 --> 0:02:25.720 But you know, there are some seven hundreds that have 0:02:25.720 --> 0:02:28.160 been flying in fleets for twenty five years. So we 0:02:28.560 --> 0:02:30.240 when we look at that, we really think, you know, 0:02:30.280 --> 0:02:34.040 this doesn't it doesn't look to be a a Boeing 0:02:34.120 --> 0:02:38.080 systemic kind of manufacturing problem. You know, there's always a 0:02:38.120 --> 0:02:40.359 lot of things that can create a crash. You can 0:02:40.360 --> 0:02:44.040 have mechanical problems, you know, maintenance issues, you can have 0:02:44.120 --> 0:02:47.160 pilot air sadly, and you know that happens everywhere around 0:02:47.160 --> 0:02:49.519 the world that get pilots sometimes just don't make the 0:02:49.600 --> 0:02:53.280 right decisions, many kind of manufacturing defects. But in this case, 0:02:53.880 --> 0:02:56.440 it's been in service too long, the fleet has been 0:02:56.480 --> 0:02:58.720 too successful too much in the air. We really think 0:02:58.720 --> 0:03:04.359 it's probably probably something more discreetly related to that airplane. 0:03:04.639 --> 0:03:07.440 So how quickly do we probably find out exactly what happened? 0:03:07.440 --> 0:03:10.000 I mean between the black box and other things. How 0:03:10.120 --> 0:03:12.480 how quickly would you expect to get more information that 0:03:12.520 --> 0:03:16.280 maybe clarifies exactly what happened. I mean, I think we'll 0:03:16.280 --> 0:03:18.120 start to see information in a couple of days. I 0:03:18.160 --> 0:03:20.480 don't think it takes a long period of time to 0:03:20.520 --> 0:03:24.480 start to get that information. UM. I would expect you know, 0:03:24.680 --> 0:03:26.960 Bowling to go there and be on site as well, 0:03:27.120 --> 0:03:30.080 to be involved, and hope, you know, the Chinese regulators 0:03:30.080 --> 0:03:32.720 I think would allow that. And um, you know, I 0:03:32.720 --> 0:03:36.000 think everybody it may become very obvious pretty quickly when 0:03:36.040 --> 0:03:39.680 they get to the black box and the scene. UM, 0:03:39.800 --> 0:03:42.200 it may not, but again I think in a couple 0:03:42.200 --> 0:03:45.440 of days you'd know. To us. The bigger challenge right 0:03:45.480 --> 0:03:49.400 here is, Um, Bowling already has a bit. You know, 0:03:50.120 --> 0:03:52.560 Bowling's Max isn't allowed to fly in China's aid. Bowing 0:03:53.000 --> 0:03:55.480 has a very delicate relationship with China right now, but 0:03:55.680 --> 0:03:59.400 the Max can't fly in China and Russia. UM, And 0:03:59.440 --> 0:04:02.840 so know that they're they need to be you know, 0:04:02.840 --> 0:04:05.200 it's an important market for them, and so that they'll 0:04:05.560 --> 0:04:08.120 I think be very cooperative and be on there, willing 0:04:08.160 --> 0:04:09.720 to be on the ground and help the Chinese figure 0:04:09.760 --> 0:04:13.360 out what has happened. Here because they don't want this, 0:04:13.800 --> 0:04:15.960 you know, they don't want this to become an issue 0:04:16.000 --> 0:04:20.000 about the airplane and the mains action. And I wonder 0:04:20.320 --> 0:04:22.440 what it means for Boeing as a company. You know, 0:04:22.480 --> 0:04:24.479 in the wake of the seven thirty seven Max tragedy 0:04:24.839 --> 0:04:26.839 where two planes went down in a very short period 0:04:26.880 --> 0:04:29.800 of time, the subsequent grounding of those seven thirty seven 0:04:29.839 --> 0:04:34.240 Max aircraft, including still in China. When when a lay 0:04:34.240 --> 0:04:38.640 person sees that a seven thirty seven went down and 0:04:38.680 --> 0:04:41.599 doesn't understand the nuance, is that the type of issue 0:04:41.600 --> 0:04:44.080 that that could affect the way that people make decisions 0:04:44.080 --> 0:04:47.880 about how they travel and what they travel on. Yeah, 0:04:47.920 --> 0:04:50.120 I mean, I think short term potentially, I'm actually a 0:04:50.120 --> 0:04:52.680 little bit surprised at the even the market losing the 0:04:52.800 --> 0:04:54.640 US today and some of the people I've talked to 0:04:54.720 --> 0:04:59.440 who don't realize that the Max are two different, you know, 0:04:59.520 --> 0:05:02.320 two different different airplanes. So I think it's important what 0:05:02.440 --> 0:05:05.760 we find over time is that, um, it's stages, you know, 0:05:05.920 --> 0:05:08.560 I think it's in early days it's very front of 0:05:08.560 --> 0:05:11.200 mine and then you know, in a couple of weeks 0:05:11.240 --> 0:05:13.960 in a fade away. But again, if you're bowing, you 0:05:14.200 --> 0:05:17.279 prefer never to have these these kind of you can't 0:05:17.320 --> 0:05:19.880 prevent them, but you prefer not to have. Hey, George, 0:05:19.880 --> 0:05:22.240 bigger picture if we just you know, step back for 0:05:22.240 --> 0:05:24.520 a second and I think about what's going on with 0:05:24.640 --> 0:05:28.520 the Russian invasion war in Ukraine, and we keep seeing, 0:05:28.800 --> 0:05:30.960 you know, what China will say or not say about 0:05:31.120 --> 0:05:33.599 what's going on, what the US will say or not 0:05:33.680 --> 0:05:36.919 say about what's going on, and the moves that you know, 0:05:37.080 --> 0:05:40.159 various NATO nations, including the US, are are taking to 0:05:40.279 --> 0:05:44.640 support Ukraine. It's just a reminder how complicated this is. 0:05:44.680 --> 0:05:47.039 And you just talked about Boeing and how important that 0:05:47.120 --> 0:05:50.920 Chinese market is. Just give us some context why companies 0:05:51.000 --> 0:05:54.000 may make some moves, particularly with Russia, but you know, 0:05:54.480 --> 0:05:58.679 are hesitant to some extent because of a market like China. 0:05:58.880 --> 0:06:01.640 It's it's crucial to Boeing's growth going forward. And just 0:06:01.680 --> 0:06:05.600 got about forty seconds. Yeah, totally. You know, before the pandemic, 0:06:06.000 --> 0:06:08.440 China was probably more than ten airplanes a month of 0:06:08.480 --> 0:06:11.360 the seven thirty seven. That's why there's potting them flying there. 0:06:11.760 --> 0:06:14.480 Bowing wants to go to thirty one. Seven thirty seven's 0:06:14.480 --> 0:06:16.360 a month, and I didn't think they can sustain it 0:06:16.760 --> 0:06:19.279 unless they get China to reaccept the max. And it's 0:06:19.279 --> 0:06:22.120 probably worth eight airplanes a month out of thirty one. 0:06:22.240 --> 0:06:24.599 So you know, what's that something between twenty five and 0:06:25.800 --> 0:06:28.800 it's in a very important market. It's massive, and it 0:06:28.839 --> 0:06:31.120 just reminds us how complicated all of this is and 0:06:31.320 --> 0:06:34.600 how troubling. UM, George, thank you so much, really appreciate 0:06:34.600 --> 0:06:36.839 the analysis. George Ferguson joining us on the phone in 0:06:36.839 --> 0:06:40.360 New Jersey. He's senior Aerospace, Defense and Airlines analyst for 0:06:40.400 --> 0:06:43.440 Bloomberg Intelligence. That's our in house group of analysts. And 0:06:43.480 --> 0:06:46.640 just a reminder, we mentioned BOKU shares are down just 0:06:46.720 --> 0:06:49.160 down about three percent at their lows, they were down 0:06:49.200 --> 0:06:51.599 to more than six percent. Surprising to see moves like this, 0:06:51.680 --> 0:06:53.839 but as George said, there's a lot of nuance here. Yeah, 0:06:53.920 --> 0:06:56.919 and just remember it's an overall downward market. But Boeing 0:06:56.960 --> 0:07:00.080 definitely reacting to that news. This is Bloomberg, Great you, 0:07:01.839 --> 0:07:05.839 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:07:05.920 --> 0:07:09.960 Quick Takes Tim Stinovic on Bloomberg Radio. So among the 0:07:09.960 --> 0:07:12.840 COVID headlines on our radar, the B A two subvariant 0:07:12.840 --> 0:07:15.200 of O Macron driving up cases in Europe now accounts 0:07:15.200 --> 0:07:19.000 for about infections here in the United States, where indoor 0:07:19.000 --> 0:07:21.640 mask and vaccine requirements have largely been rolled back. That 0:07:21.800 --> 0:07:25.280 is true even in our office space. The glass dividers, 0:07:25.320 --> 0:07:27.640 the plastic dividers, they came down, they did. I did 0:07:27.640 --> 0:07:29.440 go to Broadway this weekend for the first time since 0:07:29.480 --> 0:07:34.880 the pandemic and they had masking in effect. Vaccination required 0:07:34.880 --> 0:07:36.240 as well. We had to show our vaccine but it 0:07:36.240 --> 0:07:38.080 was packed. It was Yeah, it was totally packed. But 0:07:38.120 --> 0:07:40.360 we all wear masks, right, So that's kind of our 0:07:40.400 --> 0:07:43.280 new reality, all right. So that's going on Mainland China, 0:07:43.440 --> 0:07:46.240 Shanghai reporting a record number of new cases after authorities 0:07:46.280 --> 0:07:49.120 expanded a mass testing program, and Dr Anthony Faucci tim 0:07:49.160 --> 0:07:52.320 saying a likely rise in US COVID nineteen cases probably 0:07:52.320 --> 0:07:55.040 will not amount to a full scale surge or prompt 0:07:55.080 --> 0:07:58.640 renewal of widespread restriction. So that's today's environment. Also thinking 0:07:58.640 --> 0:08:00.720 about what all this means for healthcare workers. That's why 0:08:00.720 --> 0:08:02.800 we have a great voice. Dr Imont abuse Aide, the 0:08:02.800 --> 0:08:06.000 co founder and CEO of Incredible Health. It's a marketplace 0:08:06.040 --> 0:08:10.720 for connecting hospitals to nursing talent for nurses and hospitals 0:08:10.760 --> 0:08:13.600 to really find one another to actually work. So Dr 0:08:13.640 --> 0:08:17.520 Abuzaide has some great insight into how these hospitals are doing. Uh, 0:08:17.560 --> 0:08:19.960 she joins us on the phone from San Francisco. Dr Opposide, 0:08:19.960 --> 0:08:23.000 how are you. I'm doing well. Thank you so much 0:08:23.000 --> 0:08:24.440 for having me today. Yeah, it's good to have you 0:08:24.480 --> 0:08:26.600 back with us. Um Okay, I want to start with 0:08:26.600 --> 0:08:30.360 with with burnout here from from healthcare workers, because Carol 0:08:30.400 --> 0:08:32.400 went over all the headlines we've all been thinking about 0:08:32.400 --> 0:08:34.800 COVID in the different places where we are. What do 0:08:34.800 --> 0:08:37.080 you see on Incredible health platform thanks to a survey 0:08:37.120 --> 0:08:39.440 that you did in terms of of of burnout for 0:08:39.679 --> 0:08:42.079 nurses and and how much are how concerned are you 0:08:42.120 --> 0:08:45.400 about it? Yeah? So we just launched our third annual 0:08:45.760 --> 0:08:48.360 State of Nursing Report and we you know, it includes 0:08:48.440 --> 0:08:50.400 data from tem per cent at US nurses or four 0:08:50.480 --> 0:08:53.760 hundred thousand nurses. So what we're seeing is that over 0:08:53.800 --> 0:08:57.040 the next twelve months, about one third of nurses UH 0:08:57.200 --> 0:08:59.880 plans to quit their jobs and the number one reasons 0:09:00.000 --> 0:09:04.439 it is burnout and there high stress environment. Of nurses 0:09:04.440 --> 0:09:07.120 are citing burnout as the number as the reason why 0:09:07.160 --> 0:09:12.319 they want to leave their current roles. So I am curious, 0:09:12.360 --> 0:09:15.319 then are they leaving because they just had it and 0:09:15.360 --> 0:09:18.440 they're stopping work completely, or they also because it's a 0:09:18.480 --> 0:09:21.400 tight labor market they know they can leave and they 0:09:21.400 --> 0:09:25.960 can find other jobs. It's actually both. So we definitely 0:09:26.000 --> 0:09:29.240 have a percent of nurses roughly about that are thinking 0:09:29.240 --> 0:09:32.760 about permanently leaving the professional together. Uh. You know, that's 0:09:32.760 --> 0:09:35.800 of course going to exacerbate our ongoing nursing shortage that 0:09:35.800 --> 0:09:38.839 we're that we've been facing even before COVID. Uh. And 0:09:39.280 --> 0:09:41.840 then but then the majority really are just looking for 0:09:41.880 --> 0:09:45.040 a different role within nursing that will you know, hopefully 0:09:45.040 --> 0:09:48.240 be less stressful, have better staffing, and therefore they won't 0:09:48.240 --> 0:09:50.800 get overworked as much. In some ways, that is a 0:09:50.840 --> 0:09:54.400 little bit wishful thinking, um, because every hospital right that 0:09:54.440 --> 0:09:56.719 we work with, at least right now is understaffed and 0:09:56.880 --> 0:09:59.600 is um you know those nurses are are are working 0:09:59.640 --> 0:10:02.760 over time as well. UM. But you know, you know, 0:10:02.840 --> 0:10:05.480 sometimes you think the grass is green. Are right? Incredible too, 0:10:05.480 --> 0:10:07.080 because we tie back to what we heard from FED 0:10:07.160 --> 0:10:09.640 chair J Powell about the labor shortage and the labor 0:10:09.679 --> 0:10:12.599 crunch and the idea of workforce participations still not to 0:10:12.760 --> 0:10:15.120 levels Carol where they were before the pandemic. And I 0:10:15.120 --> 0:10:18.079 think to myself, Okay, it's it's it's it's every single 0:10:18.120 --> 0:10:22.040 industry here. And if healthcare workers continue to be overburdened, 0:10:22.440 --> 0:10:25.520 even if hospitals aren't overflowing right now, then that's a 0:10:25.559 --> 0:10:28.280 huge issue for next time. Hospitals do take on a 0:10:28.320 --> 0:10:31.240 large number of people. Yeah, exactly, so what does that mean? 0:10:33.679 --> 0:10:35.199 So what that means that what I mean, what we're 0:10:35.200 --> 0:10:38.040 seeing on the hospital side is that actually, yeah, patients 0:10:38.040 --> 0:10:42.000 demand continues to increase, right um in COVID of course 0:10:42.040 --> 0:10:44.760 creates more patient numbers, but there's also many patients that 0:10:44.760 --> 0:10:48.000 have delayed care throughout the last two years of the pandemic. 0:10:48.040 --> 0:10:50.280 And so and then many of the hospital and health 0:10:50.280 --> 0:10:52.480 systems that we work with are expanding. They're adding more 0:10:52.520 --> 0:10:56.800 locations and more units and so all that requires more staff. Um, 0:10:57.160 --> 0:10:58.960 Are they paying more? Are they paying more for the 0:10:58.960 --> 0:11:02.520 workers that they can get? They are. Yes. We have 0:11:02.600 --> 0:11:07.160 seen a hundred and increase in in offering up sign 0:11:07.240 --> 0:11:11.400 on bonuses when it comes to nurse compensation. UM. We've 0:11:11.440 --> 0:11:13.920 also seen in you know, in the state of Texas alone, 0:11:13.920 --> 0:11:16.400 sign on bonuses have doubled in terms of the amount 0:11:16.920 --> 0:11:19.720 um from fifty five eight hundred to ten thousand, seven 0:11:19.760 --> 0:11:22.320 hundred dollars average being the sign on bonus in the 0:11:22.320 --> 0:11:25.439 state of Texas UM and then the state of Florida 0:11:25.480 --> 0:11:28.160 has had the biggest increase in in in uh in 0:11:28.160 --> 0:11:31.480 in employers offering sign on bonuses. So we are definitely 0:11:31.520 --> 0:11:34.719 seeing compensation increase. You know, it worries me because I 0:11:34.720 --> 0:11:37.000 feel like this is a supply and demand story that 0:11:37.080 --> 0:11:39.600 the demand is only get increase for nursing care as 0:11:40.000 --> 0:11:42.520 we all get older, lived longer, and then the supply 0:11:42.720 --> 0:11:45.320 is not there, So you do wonder about what that 0:11:45.400 --> 0:11:49.680 squeeze will mean UM going forward, we get very briefly 0:11:49.760 --> 0:11:51.600 dr abbusated, how much higher do you see wages going 0:11:51.640 --> 0:11:55.079 in the next year? Very briefly, over the next twenty 0:11:55.120 --> 0:11:58.200 four months, we definitely predict wage inflation going up at 0:11:58.280 --> 0:12:01.080 least another five to seven percent. That's a lot and 0:12:01.080 --> 0:12:03.680 that we'll see play out certainly in those inflationary numbers. 0:12:04.000 --> 0:12:07.520 Drymon Aboz, thank you so much, co founder CEO. She 0:12:07.800 --> 0:12:10.040 is of incredible health once again joining us on the 0:12:10.040 --> 0:12:12.440 phone from San Francisco. I mean, that's the reality of 0:12:12.480 --> 0:12:16.040 the job market. The healthcare situation I think is certainly special, 0:12:16.320 --> 0:12:19.040 not an anomaly, in that I think there are people, 0:12:19.120 --> 0:12:20.880 as she just said, that are just so burned out 0:12:20.920 --> 0:12:23.280 post pandemic. Yeah, they go and switch careers as a 0:12:23.280 --> 0:12:25.320 result of what happened over the last two years. Well, 0:12:25.320 --> 0:12:28.080 and that survey also talks about verbal and physical assault 0:12:28.080 --> 0:12:29.960 by a patient or a member of a patient's family. 0:12:30.040 --> 0:12:33.360 To that a lot of members see this is Bloomberg Radio. 0:12:33.559 --> 0:12:37.160 You're listening to Bloomberg Business Week with Carol Messer and 0:12:37.240 --> 0:12:42.119 Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Well, fascinating 0:12:42.120 --> 0:12:45.560 story online at Bloomberg Business Week about Silicon Valley's wealthiest 0:12:45.640 --> 0:12:48.840 Russian who built his wealth making lucrative pets on a 0:12:48.880 --> 0:12:52.520 few names that you know Airbnb, Ali Baba, Twitter, Facebook, 0:12:52.559 --> 0:12:55.520 and a lot more. He Now, though Tim is distancing 0:12:55.559 --> 0:12:58.280 himself from President Putin, we're talking about none other than 0:12:58.520 --> 0:13:01.760 Urie Milner. You may know from firms such as Digital 0:13:01.760 --> 0:13:06.120 Sky Technology is also known as DST. Max Chafkin, his 0:13:06.160 --> 0:13:08.720 features editor at Bloomberg Business Week. He joins us on 0:13:08.720 --> 0:13:11.320 the phone from Queens, New York. The story by the Way, 0:13:11.320 --> 0:13:13.880 by Sarah McBride. It's now on the Bloomberg terminal. You 0:13:13.880 --> 0:13:16.360 can also read it at Bloomberg dot com. Slash business 0:13:16.400 --> 0:13:19.760 Week also joining us as Joel Weber editor at Bloomberg 0:13:19.800 --> 0:13:22.160 Business Week. He's with us right now in the Bloomberg 0:13:22.200 --> 0:13:26.680 Interactive Broker's studio, Joel. Uh. Jurie Milner a name very 0:13:26.760 --> 0:13:31.040 familiar to people across Silicon Valley. Uh. He's been involved 0:13:31.160 --> 0:13:35.000 in some of the most as Carol mentioned, the names 0:13:35.040 --> 0:13:39.880 that uh, many people are familiar with if they use smartphones. Uh, Airbnb, 0:13:40.480 --> 0:13:44.600 Facebook and more. Living under a rock, Yeah, exactly who 0:13:44.679 --> 0:13:51.480 is he? Uh? Really prominent venture capital uh and has 0:13:51.520 --> 0:13:54.800 long been, as you mentioned, involved in a lot of 0:13:55.200 --> 0:13:57.400 startups that have gone on and had great success, which 0:13:57.440 --> 0:14:02.680 obviously made him very wealthy. Um, the wealthiest Russian in 0:14:02.840 --> 0:14:06.880 Silicon Valley actually, and obviously you know, all things Russia 0:14:06.960 --> 0:14:09.640 right now are of great interest. And so when Sarah 0:14:09.640 --> 0:14:13.400 reached out and said, hey, um, I'm talking to to Uri, 0:14:13.520 --> 0:14:16.920 we said, what's he's saying? And that's for hours. Yeah, 0:14:17.000 --> 0:14:19.840 We've got a lot of great access and and and 0:14:19.880 --> 0:14:23.000 the and Max who edited the story, I think did 0:14:23.000 --> 0:14:26.480 a great job pointing out you know this, this risk 0:14:26.920 --> 0:14:29.760 for for Urie and all this, and how quick he 0:14:29.880 --> 0:14:33.120 is to attempt to put some distance between he imputin, 0:14:33.480 --> 0:14:37.560 although not maybe as much distance as one would think. So, so, Max, 0:14:37.560 --> 0:14:40.280 what what jumped out to you and her reporting? Yeah, 0:14:40.320 --> 0:14:42.960 I mean what's interesting about Yuri? So it's it's not 0:14:43.080 --> 0:14:45.880 just that Youuri Milner is this really important venture capitalist 0:14:46.040 --> 0:14:47.680 um you know, you know, he's like right up there 0:14:47.680 --> 0:14:49.960 with like, say, you think about the most important bcs 0:14:49.960 --> 0:14:52.760 in the last twenty years. It's like Mark and Rees 0:14:52.880 --> 0:14:56.560 and Peter Keel uh and probably you're a Milner UM 0:14:56.640 --> 0:14:59.240 and and and what. But it's not just that he's 0:14:59.640 --> 0:15:01.240 um made a lot of money and made a lot 0:15:01.280 --> 0:15:03.880 of investments in companies you've heard of. It's that he's 0:15:03.960 --> 0:15:06.560 kind of put himself at the center of Silicon Valley. 0:15:06.600 --> 0:15:10.280 You know. He bought this UM hundred million dollar house 0:15:10.520 --> 0:15:12.480 UM in Los Altos, you know, which is really hard 0:15:12.480 --> 0:15:16.480 of Silicon Valley has you know, fun spent hundreds of 0:15:16.480 --> 0:15:20.240 millions of dollars funding sort of tech focused philanthropy. You know, 0:15:20.320 --> 0:15:23.320 his events have been sort of hot tickets, not just 0:15:23.680 --> 0:15:26.280 among among tech types but also in Hollywood and so 0:15:27.040 --> 0:15:30.040 but of course, basically the seed funding here, as Joel 0:15:30.080 --> 0:15:34.640 is alluding to, um comes from uh, basically sources connected 0:15:34.680 --> 0:15:37.560 to to the Kremlin. So um, there there was some 0:15:37.640 --> 0:15:41.200 money early on from Alisher Usmanoff, who is a sort 0:15:41.200 --> 0:15:45.120 of a metals magnet, basically a pro Putin oligar. Another 0:15:45.160 --> 0:15:48.320 investment in Twitter. There was money from you know, Russian 0:15:48.360 --> 0:15:51.280 state controlled bank BT beats UM and and and the 0:15:51.640 --> 0:15:54.600 thing that's pretty interesting here is Milner has spent as 0:15:54.720 --> 0:15:59.040 as he told Sarah, basically years trying to put some 0:15:59.200 --> 0:16:03.240 distance between himself and the Kremlin. And and in fact, 0:16:03.400 --> 0:16:06.000 you know, he shared actually a lot of sort of 0:16:06.000 --> 0:16:09.600 new information. I mean, he hasn't seen Uzmanoff in five years, 0:16:09.640 --> 0:16:12.040 he hasn't been to Russian eight years. Um. So so 0:16:12.080 --> 0:16:15.000 he's basically making the case like, look, yes, um, there 0:16:15.120 --> 0:16:18.120 is a lot of money that I had early on 0:16:18.160 --> 0:16:20.840 that was connected to to Vladimir Putin and the Kremlin. 0:16:21.040 --> 0:16:23.360 But it's been a very long time since I've taken 0:16:23.400 --> 0:16:25.440 any money from those guys. And really, you know what, 0:16:25.680 --> 0:16:27.560 this has nothing to do with me. What I did 0:16:27.560 --> 0:16:29.920 find so interesting, Max, are uh the number of people 0:16:29.960 --> 0:16:32.280 who like came to bat for him. You mentioned, uh, 0:16:32.520 --> 0:16:34.640 some of the folks who he you know, when you 0:16:34.640 --> 0:16:36.800 think of the most important Silicon Valley venture capitalist, right 0:16:36.840 --> 0:16:39.480 Peter Tielmark and Trees uh and by the way, all 0:16:39.480 --> 0:16:42.640 three of them involved in early relatively early in Facebook. 0:16:43.040 --> 0:16:44.920 So that'ser Ata least that's something there too. But who 0:16:44.960 --> 0:16:46.520 who did Sarah speak to you that really went to 0:16:46.560 --> 0:16:50.080 bat for for euriamil there? Yeah, I mean there's um. 0:16:50.120 --> 0:16:53.920 You know, the story has comments from Ryan Peterson, the 0:16:53.920 --> 0:16:56.920 the CEO of Flex Sports, Max Levchin, who's a you know, 0:16:57.120 --> 0:17:01.560 well known Ukrainian American UM who's also you know, pretty 0:17:01.560 --> 0:17:03.920 close to Jeri Milner UM. And you know, there are 0:17:03.960 --> 0:17:06.000 others that we we didn't include in the story. I mean, 0:17:06.160 --> 0:17:10.240 the the the kind of Techily has definitely um circled 0:17:10.240 --> 0:17:12.480 the wagons to some extent, and they said like, look 0:17:12.560 --> 0:17:16.160 this this guy really has nothing to do UM with 0:17:16.160 --> 0:17:19.000 with what's happening in Russia. And and of course you 0:17:19.040 --> 0:17:21.160 know there is some there's some truth to that, right 0:17:21.200 --> 0:17:23.440 he didn't he hasn't made his money in the same 0:17:23.480 --> 0:17:26.119 way that many of these other um, you know, Russian 0:17:26.160 --> 0:17:29.040 billionaires made their money UM and and and he really 0:17:29.040 --> 0:17:31.880 has had some business on the other hand right there 0:17:31.960 --> 0:17:34.520 that you know, you could imagine this. This does kind 0:17:34.520 --> 0:17:36.960 of um, you know, color some of some of the 0:17:36.960 --> 0:17:39.400 stuff that's happened in recent years, and it's definitely gonna 0:17:39.400 --> 0:17:41.240 be a challenge he has to work through as he 0:17:41.320 --> 0:17:44.560 raises money for subsequent funds. All Right, I'm gonna just 0:17:44.600 --> 0:17:46.280 take us away for a moment, because one of the 0:17:46.280 --> 0:17:48.000 things that jumped out when I was reading and and 0:17:48.040 --> 0:17:50.760 all this is, you know, disisting from Vladimir Putin, but 0:17:51.040 --> 0:17:53.840 that investment in SpaceX, like that he got out of 0:17:54.000 --> 0:18:01.240 kind of early. Well and exactly, yeah, that's that's previously reported. Um. Yeah, 0:18:01.240 --> 0:18:03.840 and as we say in the story, in twirteen, Urie 0:18:03.880 --> 0:18:07.640 Millner UH put about ten million bucks into SpaceX. Now 0:18:07.680 --> 0:18:11.280 that would not be a hugely consequential thing, except that 0:18:11.320 --> 0:18:15.040 at that same time SpaceX was basically going around bragging 0:18:15.080 --> 0:18:20.760 about how, unlike other UM major defense contractors UM, including 0:18:20.800 --> 0:18:23.080 like the main one that the Air Force was using 0:18:23.480 --> 0:18:27.119 UM to to launch rockets UH, SpaceX did not buy 0:18:27.240 --> 0:18:30.200 Russian engines, and they in fact followed the lawsuit against 0:18:30.520 --> 0:18:34.400 UH at the Department of Defense saying that that their 0:18:34.440 --> 0:18:38.880 competitors were in effect funding, you know, the Russian defense industry, 0:18:39.240 --> 0:18:42.080 and and so so this was not disclosed, and Milner 0:18:42.320 --> 0:18:45.520 actually left, um, you know, basically exited investment. Two years 0:18:45.640 --> 0:18:47.960 later he told us that, you know, it had nothing 0:18:48.000 --> 0:18:51.320 to do with with this kind of concern over um, 0:18:51.400 --> 0:18:54.640 you know, Russian money. That was just entirely about you know, 0:18:55.000 --> 0:18:57.800 his his own judgment of the border directors. But it 0:18:57.880 --> 0:19:00.040 isn't it is an interesting wrinkle. It's also interesting and 0:19:00.119 --> 0:19:03.840 it wasn't previously disclosed. He doubled his money on that 0:19:03.880 --> 0:19:07.000 one from ten million, and I'm guessing it would be 0:19:07.040 --> 0:19:09.879 a whole lot more had he held onto it, right, 0:19:10.040 --> 0:19:15.800 So yeah, and also helping potentially fight Putin in the 0:19:15.800 --> 0:19:18.480 war since SpaceX has been rather helpful over there to 0:19:18.600 --> 0:19:21.680 all right, Well it's a great story, uh, and breaking 0:19:21.760 --> 0:19:24.160 some news there as well. Max Chapkin, thank you so much, 0:19:24.160 --> 0:19:27.280 really appreciate it. As we mentioned Sarah McBride writing that story. 0:19:27.520 --> 0:19:31.560 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:19:31.600 --> 0:19:36.119 Quick Takes Tim Stinovic on Bloomberg Radio watching shares of 0:19:36.160 --> 0:19:41.120 Berkshire Hathaway certainly today because uh, mr Buffett has been 0:19:41.119 --> 0:19:43.400 doing some deal something he hasn't been doing it some time. 0:19:43.880 --> 0:19:46.800 Berkshire Hathaway putting money to work, this time Tim buying 0:19:46.840 --> 0:19:50.600 Allegheny for liven point six billion in cash. As we said, 0:19:50.960 --> 0:19:53.320 you know, Warren Buffett has really shied away from doing 0:19:53.359 --> 0:19:56.240 dealmaking in the last few years, which is something he's 0:19:56.240 --> 0:19:58.119 so known for. He's got he's got the cash to 0:19:58.160 --> 0:20:00.160 do it. The company is gonna acquire all out Any 0:20:00.160 --> 0:20:02.840 and Allegheny shares eight forty eight dollars and two cents 0:20:02.880 --> 0:20:06.560 each in cash. It's a premium to the insures average 0:20:06.560 --> 0:20:09.879 stock price over the last thirty days. Matthew Palazola is 0:20:09.920 --> 0:20:14.280 Property and Casualty insurance senior analyst. He also covers Berkshire Hathaway, 0:20:14.320 --> 0:20:16.719 so a perfect voice to have on this afternoon with 0:20:16.880 --> 0:20:19.800 Bloomberg Intelligence. U, Matt take us into this deal here. 0:20:19.880 --> 0:20:22.359 Carol mentioned that it's kind of a you know, back 0:20:22.359 --> 0:20:25.320 to what Berkshire has done, but you know, hasn't done 0:20:25.680 --> 0:20:28.159 in a few years. What sticks out to you about 0:20:28.200 --> 0:20:31.400 this deal because you write that Buffets buying a mini me? Yeah, 0:20:31.480 --> 0:20:34.040 I mean I've always looked at Allegheny as kind of 0:20:34.040 --> 0:20:38.000 a mini Berkshire Hathaway. In two thousand twelve, they started 0:20:38.000 --> 0:20:41.440 buying other businesses like Berkshire does with using the insurance 0:20:41.440 --> 0:20:45.440 float to buy these non financials businesses and generate a 0:20:45.520 --> 0:20:47.760 return off them. It's only in recent years where those 0:20:47.760 --> 0:20:53.200 businesses have started to give a nice return. But uh, 0:20:53.280 --> 0:20:55.480