Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm
Speaker 1: Jason Kelly and I'm Carol Master. Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Over the next couple of hours,
Speaker 1: we'll bring you news of the week, insights from the magazine,
Speaker 1: and more. And that includes an interesting story about trade.
Speaker 1: We've talked so much. Everyone has been for decades a proponent, Jason,
Speaker 1: a free trade. Now it might be that we're moving
Speaker 1: into the era of managed trade. Right. I wasn't really
Speaker 1: familiar with the nuances of this. We've talked, as you say,
Speaker 1: so much about trade, but this could be a major
Speaker 1: inflection point for how goods and services move throughout the world.
Speaker 1: We're also going to talk, speaking of goods and services,
Speaker 1: about credit cards, how you use them, and what may
Speaker 1: be going on on the other side of the equation
Speaker 1: with credit card companies raising the amount you can borrow.
Speaker 1: That could be our new debt trap. That's a little
Speaker 1: bit of a scary story. We finish up, though with
Speaker 1: something fun. Polly Moss ends did a story and it
Speaker 1: takes a look at the Goop Lab with Gwyneth Paltrow
Speaker 1: making its debut on Netflix. She watched this series. It's
Speaker 1: a series. Every episode Jason begins with a warning, so
Speaker 1: uh fascinating. Another fun bit is the exclusive look and
Speaker 1: exclusive sound of the new Super Bowl ad from Porsche.
Speaker 1: They haven't been in the big game for decades. They're back.
Speaker 1: First up, though, we talked about this week's issue with
Speaker 1: the editor of Bloomberg business Week, Jill Webber. Jill Webber,
Speaker 1: the editor of Business Week, here with us in New
Speaker 1: York City. Let's start with the cover and arresting image
Speaker 1: and a reminder that for all the haters against Tesla,
Speaker 1: that stocks doing awesome. Yeah, so the company's way up
Speaker 1: so far this year, but also over the past few months. Uh.
Speaker 1: This is the story of by Dana Hole about a
Speaker 1: really vocal minority of Tesla haters, Elon muskaters on Twitter
Speaker 1: go by uh tesla q. And these are short sellers
Speaker 1: who are really hurting right now because as this stock
Speaker 1: is swared, they've felt the front of that. Well, that's
Speaker 1: what I love about this. George, Like Danna gets to
Speaker 1: this one individual in particular who's really had a heated
Speaker 1: social media relationship with Elon muss. Yeah, it's an incredible
Speaker 1: story about sort of the battle between this one guy
Speaker 1: who really didn't like the company's fundamentals and his interactions
Speaker 1: with Tesla as a company, and how he really uh
Speaker 1: took things to a different place and sort did Tesla
Speaker 1: in response, right, I mean, and it's just a reminder
Speaker 1: of how binary this is. We talked about it, I
Speaker 1: feel like just about every day on our show, and
Speaker 1: we have the ball and we have the Theirs and
Speaker 1: never the Twain shall meet. I mean, there's nobody who
Speaker 1: essentially is like Tesla Ansca. Yeah, that's right. So what
Speaker 1: Danna's story really does well is like there is this
Speaker 1: wider community of haters and they're almost like hive minded
Speaker 1: with each other about the company. And it's sort of
Speaker 1: the case study of like one guy who actually you know,
Speaker 1: got into the ire of Elon and Tesla, and that's
Speaker 1: remarkable timing for this as the company goes through the
Speaker 1: roof in terms of evaluation. Well, it's safe to say
Speaker 1: that one of the reasons that Tesla has become so
Speaker 1: popular and is captured the imagination is the environment and
Speaker 1: people really caring about the impact of the planet, the
Speaker 1: car industry, etcetera, which leads us tog and Green and
Speaker 1: Bloomberg Green, which announced We've just announced this week big launch.
Speaker 1: This is the company really down the newsroomally doubling down
Speaker 1: on a space that we think there's going to be
Speaker 1: some amazing coverage around, all rooted in data. But look
Speaker 1: like climate change is the story of the moment um
Speaker 1: and it's not one that's going away, and we really
Speaker 1: wanted to root that story in in data and stories
Speaker 1: that are going to be really memorable. So that's what
Speaker 1: you should expect from Bloomberg Green. And in this issue
Speaker 1: of Bloomberg Business Week, we use that data as a
Speaker 1: centerpiece and a story about quants and how they're looking
Speaker 1: at is G data. Yeah, and if you think about
Speaker 1: who's got the most data is the quant and they're
Speaker 1: really good at using it, right, but the catches, not
Speaker 1: all of the data really completes the picture. And what
Speaker 1: quants are actually really good at our plugging those holes
Speaker 1: in smart ways, well, Bloombergreen kind of helping to complete
Speaker 1: the picture too, right. This is just an all in platform,
Speaker 1: you know, online TV radio, they have this incredible dashboard,
Speaker 1: but it's all about things that impact the environment and
Speaker 1: really tracking what's going on and bringing it back to data,
Speaker 1: like quantifiable things that we can look at and like
Speaker 1: where we're applicable, where are places that we can actually
Speaker 1: make change? And I think that will be that impact
Speaker 1: will be a really amazing element of this Bloombergreen project.
Speaker 1: A story of our time for sure. Another story of
Speaker 1: our time, obviously is China and sports. We love talking
Speaker 1: about it and a phenomenal profile by Ira blud Way
Speaker 1: of Joe Psi, the owner of the Brooklyn Nets, vice chairman,
Speaker 1: co founder of Ali Baba. Talk about a man in
Speaker 1: the center of it all. So what's interesting about this
Speaker 1: is that I don't think many people knew who this
Speaker 1: guy was until the NBA and nine of fiasco happened
Speaker 1: a couple of months ago. And that was immediately when
Speaker 1: we're like, wait, that guy who just acquired the nets
Speaker 1: Brooklyn Nets, now uh is the co founder Valley Baba.
Speaker 1: His story is even more remarkable than that. He's taiwan
Speaker 1: He's born Ivy League educated, lives in Hong Kong, speaks Mandarin,
Speaker 1: you know, billionaire and yet in the middle of this
Speaker 1: whole dilemma between how the NBA and China are gonna interact,
Speaker 1: he put out a really thoughtful note and it made
Speaker 1: us go, we want to talk to that guy, because
Speaker 1: he's really in the thick of everything that's transpiring between worlds. Well,
Speaker 1: and Ira not only got to talk to him, he
Speaker 1: got to talk to Jack mat and really presents this
Speaker 1: portrait of someone who represents the biggest story about time.
Speaker 1: As I said, and he looked at the Brooklyn Nets
Speaker 1: and said, you know what's the best investment better than
Speaker 1: a Park Avenue apartment? Professional sports and NBA, And that's
Speaker 1: Bloomberg Business Week editor Joel Webber the benefits of free trade, Jason.
Speaker 1: They have been touted for decades, and based on what's
Speaker 1: going on in the world, that era a free trade
Speaker 1: maybe coming to an end. So I learned something very
Speaker 1: interesting this week from reading this story. I always learned
Speaker 1: something from Peter Coy. He's here with us in New
Speaker 1: York City. Managed trade is a term that I don't
Speaker 1: think if I had heard, I really understood until I
Speaker 1: read your story. Tell us what it is. Managed trade
Speaker 1: is where, instead of started letting the chips fall where
Speaker 1: they may, letting private parties work things out for themselves,
Speaker 1: you sort of dictate terms. So, for example, the Voluntary
Speaker 1: Restraining Agreement on autos with Japan, that was a form
Speaker 1: of managed trade. It was quote unquote voluntary and effect.
Speaker 1: It was a quota on Japanese imports of cars. We
Speaker 1: seem to be going through another era of that now,
Speaker 1: and the US China Deal, the Phase one deal that
Speaker 1: was signed by Trump earlier this month, is an example
Speaker 1: of that. According to Gary Clyde Hoffbauer from the Peterson
Speaker 1: Institute for International Economics, recall, the deal has a provision
Speaker 1: that China will buy two billion in dollars worth of
Speaker 1: products from the US of a certain period of time.
Speaker 1: And there's a secret provision in that agreement, secret we
Speaker 1: haven't seen it, that specifies what products and what volumes.
Speaker 1: So this is not free trade by any means. This
Speaker 1: is an agreement between two countries where it's just hammered
Speaker 1: out in a in a back room, and you can
Speaker 1: argue as good or as bad. But it's clearly not
Speaker 1: ordinary less a fair free trade. So why are you
Speaker 1: writing about it? Why is it so significant? You think
Speaker 1: that maybe we be that we're pushing back on the
Speaker 1: error free trade and remind us of free trade was
Speaker 1: the whole concept right of nations doing what they do best,
Speaker 1: that buying what they needed, and everybody kind of doing
Speaker 1: the best that they could and everybody benefits. That's the
Speaker 1: ideal econ one a one version of trade, and it
Speaker 1: it can work, does work in many cases. Now, the
Speaker 1: argument in favor of managed trade would be, look, um,
Speaker 1: China is just not whole ending up its end of
Speaker 1: the bargain, and they're not a market economy, so why
Speaker 1: are we pretending they are a market economy. Let's just
Speaker 1: knock heads and get a deal done. And that is
Speaker 1: what the Robert Leightheiser, the U s Trade representative, and
Speaker 1: Trump seems to have concluded. Because I feel like it's like, well,
Speaker 1: sometimes a nation, maybe China, because they don't necessarily play
Speaker 1: like everybody else on the developed world stage, that maybe
Speaker 1: they need a little bit of nudging, Maybe they need
Speaker 1: some are so so that is the pro argument. The
Speaker 1: con argument is that there is harm done here, and
Speaker 1: one form of harm is that you end up um
Speaker 1: China is buying absurd amounts of things that doesn't really need,
Speaker 1: which course is not a US concerned, but it's just
Speaker 1: like creating inefficiencies on both sides. The other harm here
Speaker 1: is that let's say that the US we don't know
Speaker 1: what the terms of deal are, but I can imagine
Speaker 1: there's probably a lot of soybeans in there. So um, Canada,
Speaker 1: Brazil had captured a lot of the soybean market from
Speaker 1: the US. Now the US is kind of capturing it back.
Speaker 1: Well more generally speaking, what happens is that the country
Speaker 1: that is suddenly um frozen out of the market because
Speaker 1: the US is coming in as a legitimate complaint, can
Speaker 1: go to the World Trade Organization. In fact, the Europeans
Speaker 1: have already, uh we had Phil Hogan, he's the US
Speaker 1: I mean the European Union Trade commissioner in Washington this
Speaker 1: past week. He said, we haven't read it yet, or
Speaker 1: we'll take a close look at this, and if we
Speaker 1: believe that this is managed trade, which is against the
Speaker 1: principles of the World Trade Organization, we could bring a complaint.
Speaker 1: So one of the lines in your story that I
Speaker 1: think is really revealing in many ways, and I think
Speaker 1: we'll resonate with a lot of our readers, listeners and viewers,
Speaker 1: is that managed trade is about cutting deals rather than
Speaker 1: following the rules. And I think any one who has
Speaker 1: watched this administration will say, yep, that checks out right.
Speaker 1: I mean, this is the whole ethos of the Trump
Speaker 1: administration in many ways, and you know, makes no bones
Speaker 1: about it. That's what he wants to do. He's doing it.
Speaker 1: And uh, there are people who would say it's it's
Speaker 1: achieving certain objectives. Um. But in the broad picture, the US,
Speaker 1: going back to Franklin delan or Roosevelt pastor Recipolical Trade
Speaker 1: Agreements Act, that was about trying to pull back from
Speaker 1: the smooth holly terrorist which contributed to the onset of
Speaker 1: the Great Depression. The idea that we want to increase
Speaker 1: commerce between countries and the US for decades has generally
Speaker 1: been in the forefront of promoting free trade. We have
Speaker 1: the General givement on tarris and trade. That's gap. Then
Speaker 1: we then we had the World Trade Organizations successor and
Speaker 1: and I think we'll forget it. So I didn't run.
Speaker 1: But like the w t OH that was just created
Speaker 1: in the ninety nineties, right, I mean, that's a relatively
Speaker 1: recent invention, and the whole goal is to that everyone
Speaker 1: benefits when there's more commerce, and in fact we've seen that.
Speaker 1: I mean, certainly the rise of China and India lifting
Speaker 1: hundreds of millions of people from poverty, has a lot
Speaker 1: to do with their joining the World trade UH system. So, Peter,
Speaker 1: is this just something that the US is pursuing. Well,
Speaker 1: it's most conspicuous in the United States thanks to Trump's
Speaker 1: whole philosophy and trade. In fact, we've seen some examples
Speaker 1: of free trade elsewhere. There's a year ago the European
Speaker 1: Union in Japan struck a free trade agreement. Just in
Speaker 1: UH this month earlier January one, UH, China actually pulled
Speaker 1: back on some tariffs. So it's a it's a little
Speaker 1: bit of a jiu jitsu thing, you know. It's not
Speaker 1: that China is suddenly a free trade country, but they
Speaker 1: see the advantages of striking agreements like this. Now, I
Speaker 1: do believe that the United States is so influential that
Speaker 1: when managed trade starts to come into the U S agreements,
Speaker 1: there's a good chance that other countries could look at
Speaker 1: and say, hey, we can either fight this or we
Speaker 1: could join it, and I might start doing the same thing. Well,
Speaker 1: and I do wonder and you address this a bit
Speaker 1: in your story, Peter, how do you square or how
Speaker 1: does this managed trade phenomenon and the resurgence of it
Speaker 1: relate to the lack of multilateralism and sort of a
Speaker 1: move towards bilateralism is part of it. I talked to
Speaker 1: Myron Brilliant, He's the person who handles trade issues for
Speaker 1: the US Chamber of Commerce, and he said, you know,
Speaker 1: we had an air of multilateralism. Trump has been quite specific.
Speaker 1: He does not believe in multilateral bilateralism, and he believes
Speaker 1: that tariffs are a useful weapon. In fact, that's the
Speaker 1: card you will be able to play. He believes that
Speaker 1: since the US of the world's largest market, and it
Speaker 1: does that the best way to strike a deal is
Speaker 1: to threaten to withhold access to that market. That's Peter Coy,
Speaker 1: economics editor of the magazine. I think what's interesting. We've
Speaker 1: talked about free trade and how important it has been
Speaker 1: Jason to lifting so many people around the world out
Speaker 1: of poverty. But maybe that era is over well, and
Speaker 1: that era may be over for a long time. I
Speaker 1: think one of the things that Peter does a nice
Speaker 1: job of illustrating this story is these are not things
Speaker 1: that change overnight, and once a shift like this happens,
Speaker 1: we could be looking at a very different world for decades,
Speaker 1: maybe even a century to come. The protests in Hong
Speaker 1: Kong what now in their seventh month? Jason and the
Speaker 1: impact has been felt on a city that is known
Speaker 1: for its wealth and its high end retail and services.
Speaker 1: It's also well known for those who really know about it,
Speaker 1: for a vast sea of income inequality. It's amazing when
Speaker 1: you look at the numbers that disparity when it comes
Speaker 1: to how much people earn. Jim Allis is here, business
Speaker 1: editor for Bloomberg Business Week to alp us understand the
Speaker 1: employment and unemployment picture that is fast changing. I mean,
Speaker 1: a lot of people have always thought of Hong Kong
Speaker 1: not just as this sort of shopping mecca, but also
Speaker 1: is this place of extreme wealth in in Asia, particularly
Speaker 1: in China. And that's true. It has lots of millionaires.
Speaker 1: It's to play place for the rich. The issue is
Speaker 1: it has an awful lot of people who don't make
Speaker 1: much money. The minimum wage in um Hong Kong is
Speaker 1: actually a little less than five U S dollars. I
Speaker 1: mean that it comes out to being very low. It's
Speaker 1: also the lowest in the A C D. And it
Speaker 1: turns out that what what you have there is a
Speaker 1: gigantic income gap that really gets felt as the you know,
Speaker 1: slow down in the economy happens now because of the
Speaker 1: protests has the biggest inequality gap in the world. Right.
Speaker 1: I think it's is that the Jinny coefficient right where
Speaker 1: they measure that, So it's it's huge, it is a
Speaker 1: it's a it's a giant difference. And I think what
Speaker 1: happens is that you really see it now that the
Speaker 1: economy is slowing down rather dramatically because of the protests,
Speaker 1: all of a sudden employment. This is a place where
Speaker 1: employment has always been extremely high and unemployment has always
Speaker 1: been traditionally. Traditionally, unemployment is less than two percent in
Speaker 1: Hong Kong and UM. So when you see the kinds
Speaker 1: of employment numbers we're looking at now, in retail workers,
Speaker 1: unemployment has gone closer to five percent in UM restaurant workers,
Speaker 1: it's about six percent. Now, that sounds not that for
Speaker 1: a lot of economies, but for Hong Kong, that's double
Speaker 1: triple what traditionally is an unemployment rate. What's happening there
Speaker 1: is that people are discovering folks have stopped coming because
Speaker 1: of the protests and other reasons. So we're going to
Speaker 1: basically start firing people. And they have and they have,
Speaker 1: and they've been firing them, and now there's a fear
Speaker 1: in Hong Kong, that there will be more firings to come,
Speaker 1: simply because we're starting the Lunar New Year celebration. One
Speaker 1: of the quirks of that is that people get lunar
Speaker 1: near Lunar New Year bonuses and they'll get an extra
Speaker 1: month's salary. But a lot of people are afraid that, ah,
Speaker 1: they'll use that extra months salary that comes with the
Speaker 1: bonus to also count as your month severance that you're
Speaker 1: required to pay, and so as soon as you pay
Speaker 1: the bonus, you'll fire people. And that's the big fear well.
Speaker 1: And one of the things you pointed out in the story,
Speaker 1: which I find so interesting is this notion that there's
Speaker 1: a knock on effect too that if people aren't working,
Speaker 1: if the economy slows a little bit, even some of
Speaker 1: those essentially like safety net that exists, you know, meals
Speaker 1: being delivered and things like that, that starts to get cut.
Speaker 1: A lot of meals that were given um are sometimes
Speaker 1: given by restaurants for free. And but now the restaurants
Speaker 1: themselves have fewer visitors because tourism is so far down
Speaker 1: in Hong Kong since the time the protests started, I
Speaker 1: mean tourism has dropped, I guess in November dropped probably
Speaker 1: close to That's hard to imagine. I mean, what's happened
Speaker 1: is a lot of Mainlanders and they depend on Mainlanders
Speaker 1: for their tourism because of visitors to Hong Kong come
Speaker 1: from the mainland. A lot of them either afraid to
Speaker 1: come right now are They're angry that the protesters in
Speaker 1: Hong Kong seem to be anti China, and so from
Speaker 1: mainland there's this has become a nationalistic issue, and so
Speaker 1: they're saying, why should I spend why should I go
Speaker 1: over and uh, you know, do my vacation there when
Speaker 1: I can go elsewhere in the world. Well, and what's
Speaker 1: interesting too from a worker's perspective, if you're a banker,
Speaker 1: you're just picking up stakes and either moving back to London,
Speaker 1: New York or maybe you're relocating to Singapore if you
Speaker 1: want to stay generally in the region. That's what's happening.
Speaker 1: And a lot of banquages are saying, you know, is
Speaker 1: this worth that? Are A lot of companies are saying,
Speaker 1: do we really want to be around there right now
Speaker 1: while this term all is going on? And so the
Speaker 1: beneficiaries of that would be another financial center like Singapore
Speaker 1: are sometimes jobs just go back home. I have to say, though, okay,
Speaker 1: all right, as you say the bankers can find another
Speaker 1: place to live. I mean, what's great about this story?
Speaker 1: What's tragic about this story? And you guys give a
Speaker 1: lot of personal examples of people who don't live on
Speaker 1: much to begin with, right, and some of them they
Speaker 1: talk about these part time workers in the restaurant industry
Speaker 1: that are basically being told to take unpaid leave until
Speaker 1: the economy recovers. It's like, how do you do that? Well,
Speaker 1: there's not much you can do. Um. One of the
Speaker 1: interesting people in the story is a woman who pilots
Speaker 1: a boat that takes diners from the mainland to the
Speaker 1: jumbo restaurant that sits out in Hong Kong Harbor. We've
Speaker 1: all seen pictures of the red restaurant floating there, and
Speaker 1: she used to make thirteen, sometimes twenty six dollars a day.
Speaker 1: Now she's making many days nothing, and that's because fewer
Speaker 1: people are going. The restaurant itself, which is world famous,
Speaker 1: you know, has had to fire half of its employees,
Speaker 1: cut down the number of hours that it operates, and
Speaker 1: cut down the number of days a week that it's open.
Speaker 1: I mean, this is really serious business. And that's Jim
Speaker 1: Ellis talking about Hong Kong and of course Carrol. This
Speaker 1: story got only more complicated this week with the spread
Speaker 1: of that virus that started in Wuhan now has been
Speaker 1: commented in cases in Hong Kong and Singapore, even here
Speaker 1: in the United States. So the Chinese Lunar New Year
Speaker 1: off to a very difficult start, that city being impacted
Speaker 1: from so many different angles. Safe to say, one of
Speaker 1: the more polarizing stocks, companies and individuals is Tesla and
Speaker 1: Elon Musk. I think that is the understatement of the
Speaker 1: year that's going to take the cake, and so much
Speaker 1: of it plays out on Twitter. Absolutely it is the
Speaker 1: place to go if you want to figure out who's
Speaker 1: where on anything. We count a lot on Dana Hall
Speaker 1: to keep us on us on all things Tesla, all
Speaker 1: things Elon, and all things Twitter when it comes to
Speaker 1: this company. She joins us from San Francisco, an amazing
Speaker 1: story in this latest edition of the magazine. Dana, thanks
Speaker 1: so much for being with us. My pleasure, all right,
Speaker 1: So take us inside this confrontation. It feels like this
Speaker 1: ongoing confrontation between the two sides of the Tesla equation
Speaker 1: because there's a community that's essentially been created on Twitter
Speaker 1: that is, shall we say not fans. Yeah, so it's
Speaker 1: sort of known as Tesla Q, and the que is
Speaker 1: added to a company's stock symbol when it files for bankruptcy. Clearly,
Speaker 1: Tesla has not filed for bankruptcy, but there is a
Speaker 1: fairly significant group of people who sort of either feel
Speaker 1: like that's inevitable or they just are not buying what
Speaker 1: Elon Musk is selling. And you know, there have always
Speaker 1: been critics of Tesla on you know, Yahoo Finance and
Speaker 1: Seeking Alpha, but kind of over time, the criticism of
Speaker 1: Tesla migrated to Twitter and the and the hashtag tesla
Speaker 1: q really kind of came into vogue over the past
Speaker 1: couple of years. And with every big news announcement or
Speaker 1: big news event like when Ellen attempted to take the
Speaker 1: company private at fo share, you just saw the tesla
Speaker 1: q hashtag more and more. So it's this sort of
Speaker 1: fascinating world of people that are very critical of Musk.
Speaker 1: Some of them are short sellers, some of them are
Speaker 1: just critics, and it's almost like a alter bubble where,
Speaker 1: you know, if you just follow the tesla Q hashtag
Speaker 1: and you get a completely different view of the company
Speaker 1: that if you follow Musk and all of his adoring fans.
Speaker 1: There's one critic in particular data that you go into
Speaker 1: Randy Pothy. Tell us about him? Who is he? And
Speaker 1: how did he come to have such a big ward
Speaker 1: seems like Twitter war with Elon Musk? Sure, so, Randy
Speaker 1: Pothy is a really fascinating person. You know, tesla Q
Speaker 1: is filled with all kinds of people, and as I
Speaker 1: was kind of trying to explore this world, I was
Speaker 1: looking for a character who could kind of explain what
Speaker 1: this community was all about. And Heathy is an individual
Speaker 1: whose real claim to fame is that he really dogged
Speaker 1: tesla on production at their Fremont factory in eighteen and
Speaker 1: he would post these photographs of the logistics lot and
Speaker 1: the finished vehicle lot and he seemed to really have
Speaker 1: like a beat on daily production numbers. And everyone was
Speaker 1: trying to figure out who is this Skabushka character? Is
Speaker 1: he a contractor a supplier, a former employee at current
Speaker 1: employee like he seems to be in Fremont every day?
Speaker 1: Like who who is this person? And um And as
Speaker 1: I got to know him. I just you know, found
Speaker 1: him to be sort of a really intriguing figure. He
Speaker 1: has short of Tesla stock, but to be clear, he's
Speaker 1: not like a major short seller in the way that
Speaker 1: we think of, you know, Jim Chainos or David iin Horn.
Speaker 1: He's actually a graduate student at the University of Michigan.
Speaker 1: And so why is he so passionate about this? Because
Speaker 1: he spends a lot of time on this, Dana, Yeah,
Speaker 1: he certainly, he certainly did. I mean I think that
Speaker 1: you know, he's just sort of you know he, I mean,
Speaker 1: he's a he's a very research based, uh you know,
Speaker 1: fellow who has been a lifelong student. He got interested
Speaker 1: in the stock market and capitalism. He grew up in Fremont,
Speaker 1: not far from where Tesla has its factory, and the
Speaker 1: more he kind of dug into Tesla's financials, the more
Speaker 1: alarmed he grew by, you know, the pronouncements that the
Speaker 1: company was making. And because he um, you know, lives
Speaker 1: in the Bay Area, he was kind of in a
Speaker 1: position to do on the ground research. You know that
Speaker 1: that is very value ball to a lot of people.
Speaker 1: So he just started putting his research out and it
Speaker 1: all came to a head in April of twenty nineteen,
Speaker 1: when he actually followed a Tesla car that was testing autopilot,
Speaker 1: tweeted about that, and then Tesla actually went to court
Speaker 1: to get a restraining order against him. Why well, Tesla
Speaker 1: argued that he was, you know, driving dangerously close to
Speaker 1: their employees, was trying to sort of mess up the demo,
Speaker 1: that he was a threat, and um, you know, I
Speaker 1: mean they were clearly kind of you know, threatned. They
Speaker 1: felt Tesla's a company, felt threatened by his research, and
Speaker 1: they felt like they, you know, needed to sort of
Speaker 1: do something to keep him away from their employees. This
Speaker 1: all was coming about right before Tesla was having its
Speaker 1: big autonomy day for investors as well. And what's interesting
Speaker 1: too is somewhere and helped me out with the timeline.
Speaker 1: There was a Dauphier on Hothie that was released as well.
Speaker 1: I mean, he's also been kind of feeling a little
Speaker 1: threatened as well and right targeted. Yeah, I mean it's
Speaker 1: called doxing. So you know a lot of people who
Speaker 1: are on Twitter use you know, sort of aliases or
Speaker 1: pseudonyms because there's sort of a history of people who
Speaker 1: have been critical of Tesla and Musk being docksed. Hothie
Speaker 1: was docked as well in July, and people didn't really
Speaker 1: notice it at the time, but yes, someone on Twitter
Speaker 1: kind of release this this dossier that linked him to,
Speaker 1: you know, his graduate school where his brother worked. I mean,
Speaker 1: so he was definitely feeling exposed as well. So, Dana,
Speaker 1: you know, you followed this company as closely, more closely
Speaker 1: than almost anyone certainly that that I know or am
Speaker 1: able to read and keep up with. And you have
Speaker 1: a quote from Gene Munster, He's been a guest on
Speaker 1: our show as well, that I think really is an
Speaker 1: interesting take on this battle. The broader Battle. I'm just
Speaker 1: gonna read it says they, meaning the folks who have
Speaker 1: really started to, you know, question Tesla. They put Tesla
Speaker 1: under a microscope, and they've succeeded in diluting the company's success.
Speaker 1: It leaves the average person who loosely follows Tesla infused
Speaker 1: and concerned. And I have to say I agree at
Speaker 1: least with the confused part, because you have these unbelievably
Speaker 1: rabid people on both sides. It feels very binary in
Speaker 1: a lot of ways. What's the net effect of that? Yeah,
Speaker 1: I mean absolutely it's incredibly binary. And if you and
Speaker 1: if you subscribe to sort of one set of people
Speaker 1: and not the other, you get a completely deluded sense
Speaker 1: of what the company is all about. So, you know,
Speaker 1: a classic example is if there's a Tesla accident involving
Speaker 1: one of the vehicles, tesla Q will amplify those accidents,
Speaker 1: but often I mean, and you might not see anything
Speaker 1: anything about it otherwise from the fans. Um. You know,
Speaker 1: with everything that the company does, it is under a
Speaker 1: microscope and um and so. But but I do think
Speaker 1: that tesla Q, you know, they are a lot of them,
Speaker 1: are very smart. They dig deep into the company's financials,
Speaker 1: and they've been right. I mean, they haven't always been right,
Speaker 1: but they have been right about some things. And so
Speaker 1: their their ability to kind of influence perception um is
Speaker 1: an interesting one. At the same time, you know, we
Speaker 1: have to remember that Musk is a celebrity. He has
Speaker 1: thirty million Twitter followers, and so the sort of publicity
Speaker 1: that Musk is able to garnish himself far outweighs whatever
Speaker 1: tesla Q is able to do. I mean, it's a
Speaker 1: little bit like a bunch of David's taking on Goliath.
Speaker 1: I have to say, like you, I'm also one of
Speaker 1: the followers, one of those thirty million. Hey Dana, what's
Speaker 1: interesting is I feel like, as you write out right
Speaker 1: your story, I mean, Elon Musk is kind of having
Speaker 1: the last laugh here, right, because the stock has just
Speaker 1: taken off and they've had a series I feel like,
Speaker 1: of recent successes, um that have been the catalyst for
Speaker 1: the stock taking off, and that's really hurt those short sellers.
Speaker 1: Oh yeah, I mean the Tesla stock has doubled doubled
Speaker 1: in the past six months, which has sort of unheard
Speaker 1: of for a for you know, a company, for a company,
Speaker 1: particularly in the auto industry. Um. You know, a lot
Speaker 1: of things that people predicted would go wrong have seemed
Speaker 1: to go right. And you know, Tesla had record deliveries
Speaker 1: in the fourth quarter. This China factory is up and running.
Speaker 1: But with Tesla Q, there's always going to be another event.
Speaker 1: So for example, you know, Tesla reports earnings on January
Speaker 1: twenty nine, everyone is going to be very focused on that,
Speaker 1: and uh, you know, as a journalist, what's sort of
Speaker 1: amazing to me is, you know, the earnings hit and
Speaker 1: just as I'm still reading through it carefully, you see
Speaker 1: instant analysis all over Twitter from all kinds of people
Speaker 1: who are very sharp, and you know, as others have noted,
Speaker 1: i mean Twitter is now kind of a kind of
Speaker 1: an ancillary trading tool, so a lot of traitors who
Speaker 1: are in the stock really do pay attention to the
Speaker 1: conversation on Twitter. I don't think any other company has
Speaker 1: that kind of social media activity when it comes to,
Speaker 1: you know, talking about the company. It's unbelievable too, And
Speaker 1: you do such a great job describing that this character
Speaker 1: and one of the quotes I love as he says,
Speaker 1: people are always like, never bet against Elon, but I'm like,
Speaker 1: always bet against Elon. I mean, it's just an amazing
Speaker 1: sort of moment and a company that is wildly influential
Speaker 1: and as we say, and as you know, better than anyone,
Speaker 1: wildly polarizing as well. Apps Really yeah, I mean I
Speaker 1: think that there's like you know, there's sort of a
Speaker 1: public narrative and a public perception of Musk, and then
Speaker 1: there's sort of a counter narrative that a lot of
Speaker 1: people don't know, but that a pretty dedicated community subscribes to.
Speaker 1: And and these people have done their research. I mean,
Speaker 1: they seem to have an incredible amount of time on
Speaker 1: their hands. But but it is kind of amazing to
Speaker 1: me the lengths to which people will go to kind
Speaker 1: of uncover things, and you know, it's I just I
Speaker 1: think it's just unparalleled in finance. I mean, other companies
Speaker 1: like Amazon and Netflix and Apple are also shorted. But
Speaker 1: there's no community known as Apple Q or Netflix que
Speaker 1: on Twitter that I'm aware of. I mean, if it is,
Speaker 1: it's it's not nearly as significant. And the other thing
Speaker 1: I wanted to mention is, you know it's not just
Speaker 1: on Twitter. Now. You know, one of the one of
Speaker 1: the folks, his name, he goes by the name Tesla Charts.
Speaker 1: He just started a podcast. So now there's like a
Speaker 1: Tesla q podcast that is I think seven or eight
Speaker 1: episodes under its belt. So you know, the content that's generated,
Speaker 1: it's not just a bunch of you know, crazy tweets.
Speaker 1: I mean, it's getting into you know, more more social
Speaker 1: media venues. Does it help and create greater transparency for
Speaker 1: this company? And I do wonder if we're getting somewhere
Speaker 1: with social media being kind of good in terms of
Speaker 1: ferreting at a lot of information about a particular company.
Speaker 1: Advocates or we would say that tesla Q has brought
Speaker 1: due diligence to the investment process and that this kind
Speaker 1: of crowdsourcing work, you know, made it more possible for
Speaker 1: investors to know what's really going on. You know. At
Speaker 1: the same time, you have to remember that I mean
Speaker 1: longs and shorts. I mean they're sort of diametrically opposed
Speaker 1: in terms of what their what their hopeful outcome is.
Speaker 1: So there, you know, there's no pieces, there's no peace
Speaker 1: agreement between the two sides any anytime soon. That's Dana Halla.
Speaker 1: I mean, she covers in much detail the comings and
Speaker 1: goings of all things Tesla and Elon Musk. So we love,
Speaker 1: love talking to her and this story, no doubt about it,
Speaker 1: this whole community of short sellers and naysayers when it
Speaker 1: comes to Elon and Tesla, she really covers it, she
Speaker 1: does and really takes us inside the binary nature of
Speaker 1: this stock and this company. There are very few people,
Speaker 1: as you and I have joked about her, like yeah,
Speaker 1: it's okay, yeah exactly. Banks of the credit card issuers, Jason,
Speaker 1: they seem to be setting a trap once again for borrowers.
Speaker 1: This story you and I've been talking about in the newsroom.
Speaker 1: It really is worrisome. Well, it's a reminder of the complicated, volatile,
Speaker 1: some might say, and maybe even at times predatory relationship
Speaker 1: that exists between credit card companies and US as consumers.
Speaker 1: Michelle Davis did a fantastic job in this story. She's
Speaker 1: here with us in New York City, so remind us
Speaker 1: what we're talking about, because, as I said, this relationship
Speaker 1: is a tortured one at times. Right. So we're seeing
Speaker 1: the comeback of this practice that was really popular before
Speaker 1: the financial crisis. It's kind of been in banks, like
Speaker 1: you know, it's been in their their strategy book for
Speaker 1: a really long time. UM. And it's where they boost
Speaker 1: people's credit limits without them asking. It's called a productive
Speaker 1: credit line increase. It's different then if you go to
Speaker 1: the bank and say, hey, I want a credit line increase.
Speaker 1: The strategy behind it is bank of rue analysis. UM.
Speaker 1: The fed as run analyses that show that if I
Speaker 1: boost someone's credit line who already is borrowing money, they
Speaker 1: of the time are going to borrow that much more money.
Speaker 1: So after the crisis, the Card Act was enacted and
Speaker 1: the regulators were like, you can't do this anymore, Like
Speaker 1: we're gonna have more stringent guidelines. We're gonna you're gonna
Speaker 1: have to have um income from the last twelve months
Speaker 1: for the consumers. You aren't going to be able to
Speaker 1: just do some of the predatory things they were doing
Speaker 1: to do pc L Eyes. Why is it that there
Speaker 1: was so much pushback, because I do wonder, like I
Speaker 1: was thinking a lot about this story. Is it you know,
Speaker 1: when they app the credit of somebody, is it because
Speaker 1: they're great customers and they pay it back and they're
Speaker 1: responsible or not necessarily not necessarily? So what I found
Speaker 1: was interesting when I was reporting out this story is
Speaker 1: that what sources were telling me is that the ideal
Speaker 1: candidate for one of these would not be someone who
Speaker 1: is just you know, paying off their balance every time.
Speaker 1: It would actually be someone who has a balance, someone
Speaker 1: who is near their um, you know, near the math
Speaker 1: on their card. I was told, if you don't care
Speaker 1: ballence like, you would probably not get one of these.
Speaker 1: And it's because the whole goal is to you know,
Speaker 1: kind of boost revenue more right, because it's worth reminding
Speaker 1: people and I sort of had to remind myself as
Speaker 1: I was reading this. They're essentially just two basic ways
Speaker 1: that credit card companies make money on transaction fees and
Speaker 1: then on interest. It's not that complicated at the end
Speaker 1: of the day, right and so and then and even
Speaker 1: I can understand this from a math perspective. Interest on
Speaker 1: a bigger part is more money and ultimately more revenue exactly.
Speaker 1: So it's kind of it's a psychology game that banks
Speaker 1: are playing. Like some banks use this as a way
Speaker 1: to get your spending happening on their cards. So if
Speaker 1: I'm at Capital One and I see that you're spending
Speaker 1: a lot on AMEXES card, I might boost your limit
Speaker 1: because I want to kind of flatter you and get
Speaker 1: you to spend more on that card. But something else
Speaker 1: that Capital One is doing that our sources told us
Speaker 1: is that actually they had run all this all this
Speaker 1: data and analysis of like past payment behavior, and they
Speaker 1: saw that always after they boosted some one's credit limit,
Speaker 1: if their utilization was that it would stay at thirty.
Speaker 1: So this was a way for a Capital One to
Speaker 1: really show revenue growth pretty quickly if they needed to.
Speaker 1: They knew this was kind of a lever that could
Speaker 1: be pulled to you because again it's of a bigger
Speaker 1: exact of money and ultimately that's right, and you write
Speaker 1: in this story and keep me honest here at Michelle.
Speaker 1: The Capital One actually resisted doing this for for a time, right,
Speaker 1: The CEO was like, I'm not sure that's a level
Speaker 1: we want to pull. So after the crisis, as I
Speaker 1: said before, you know, the rules in terms of awarding
Speaker 1: the has got a lot harder. Banks got better at
Speaker 1: navigating the rules. You know, technology helped them collect income
Speaker 1: more quickly. When all of this happened. Capital One saw
Speaker 1: a huge revenue opportunity and you know, Richard Fairbank, the CEO, said,
Speaker 1: we might if we do this too aggressively, like we
Speaker 1: might set up customers to become perpetual borrowers. We don't
Speaker 1: want to do that. So they put up these kind
Speaker 1: of guard rails to make sure that they weren't going
Speaker 1: to set up people to be perpetual borrowers. Three years later,
Speaker 1: um know, as the stock was falling, they ran into
Speaker 1: some problems. Uh, they remembered that this was a lever
Speaker 1: that they could pull, and they loosened the guard rails
Speaker 1: a little bit. This isn't about they don't want their customers,
Speaker 1: those the card issuers. They don't want their customers to
Speaker 1: default They just want them to carry higher and higher
Speaker 1: balances that they can somewhat manage. But because they're getting
Speaker 1: higher fees, are getting higher interest off it. That's what
Speaker 1: it's all about. Yeah, it's really walking a fine line,
Speaker 1: you know. You you want them to be borrowing, but
Speaker 1: you don't want them to default. But that fine line
Speaker 1: is what's interesting. And I think people are spending more
Speaker 1: and more time talking about the risk of this. I
Speaker 1: was like blown away by some of the stats. You know,
Speaker 1: you talk about younger borrowers being hurt the most. The
Speaker 1: number of card holders at least ninety days behind on
Speaker 1: payments has reached the highest levels in a decade. So
Speaker 1: the concern is, especially in an economic downturn, like what
Speaker 1: happens to these balances, what happens to these default rates?
Speaker 1: And that impacts the banks halt. Yeah, and because right now,
Speaker 1: like we're already seeing these cracks in the market, and
Speaker 1: we have the lowest jobless rate in god knows how long.
Speaker 1: You know, the stock market is at all time highs.
Speaker 1: Everything's great, So why are their cracks already in the
Speaker 1: credit card market? Um? You know, one of the credit
Speaker 1: agencies put out reports saying that this year um delinquencies
Speaker 1: for everyone are going to probably reach the highest and
Speaker 1: ten years and credit cards as they fall from mortgages,
Speaker 1: auto other types of consumer loans. So it is something
Speaker 1: you know to be thinking about right now. Consumer credit
Speaker 1: card debt is actually growing at a faster rate than
Speaker 1: student loans mortgage loans. And that's Michelle Davis bringing us
Speaker 1: a really important story. This is an area of the
Speaker 1: consumer credit market that probably was forgotten about a little
Speaker 1: bit in the post financial crisis or in the recovery
Speaker 1: from the financial crisis, but that behavior by the credit
Speaker 1: card companies something to watch. I have to say, the
Speaker 1: statistics in that story alone about the folks that are
Speaker 1: passed due on their credit card balances and the number
Speaker 1: of young borrowers who seem to be maybe potentially running
Speaker 1: into trouble really a worrisome thought. The Lab with Gwyneth
Speaker 1: Paltrow made its debut on Netflix this week. Every episode,
Speaker 1: though Jason begins with a warning, well and fair warning.
Speaker 1: It feels like and this is a type of warning
Speaker 1: and a type of ethos it seems that's followed Gwyneth
Speaker 1: Paltrow ever since the beginning of Goop. Polly Mosins is
Speaker 1: here with us. She watched it, she's got to take
Speaker 1: what do you think? Um, well, I can say I
Speaker 1: was exhausted just watching it because I don't think I
Speaker 1: can be trained to be a psychic medium. I'm not
Speaker 1: super into fasting energy healing isn't my jam back For
Speaker 1: those who have been maybe living under a rock and
Speaker 1: don't know what Goop is all about, tell us what
Speaker 1: the premise of the series is all about. So it's
Speaker 1: Gwyneth Paltrow's brand, and they've always been into alternative medicines
Speaker 1: and alternative healings. They've been in trouble before with the law.
Speaker 1: It's been him for a few years now. Oh yeah,
Speaker 1: it's been around for a little while, and it's kind
Speaker 1: of caused a controversy. Every little while, they'll have something
Speaker 1: pop up and everyone's like, what on earth is that?
Speaker 1: So that was the jade egg issue, you where they
Speaker 1: said that that was good for a woman's vaginal health.
Speaker 1: And then we're later fine, I'm just gonna say, if
Speaker 1: you don't know what it's about, just google it. Yeah,
Speaker 1: and we won't go to all the details. Um, And
Speaker 1: that was sort of the big conspiracy for a little bit.
Speaker 1: And then this show is basically every episode it takes
Speaker 1: one alternative healing method and basically puts it to the test,
Speaker 1: and the people who are testing it are called Goopers
Speaker 1: sometimes also Goopies, mostly Cooper's and the is Gwyneth Paltrow's
Speaker 1: staff at group and so take us inside the sort
Speaker 1: of whole group mindset because it's really important. I mean,
Speaker 1: it seems to be a reflection of what Gwyneth Paltrow
Speaker 1: really thinks life should be about, in products that she
Speaker 1: likes and the way she wants to live her life.
Speaker 1: I mean, one of the things that strikes me is
Speaker 1: there's a photo that accompanies the story that has the
Speaker 1: Goop war room, and it looks like exactly what you
Speaker 1: would think a Goop war room would be. No war Uh,
Speaker 1: it's barely a room in this sense. It's just this
Speaker 1: sort of spacious, very sunny, sunlit, yeah, exactly, pain couches
Speaker 1: and um, a lot of presumably like affluent white people
Speaker 1: sitting around and like solving problems that no one really
Speaker 1: knew they had. Yes, I think the trailer puts it
Speaker 1: best when they say that they're there to test ideas
Speaker 1: that are maybe too scary or too out there, and
Speaker 1: they're going to test them to see if they're therapeutic,
Speaker 1: if they're healing in any way, if they can help
Speaker 1: their staff. Be it something that they should, you know,
Speaker 1: would usually seek therapy for, or a medicine that they're taking,
Speaker 1: this might be an alternative to it. So that's what
Speaker 1: every single episode aims for, is to test that theory.
Speaker 1: And in some cases the ideas are not too crazy,
Speaker 1: like eating right and exercising are the keys to a
Speaker 1: long life, yes, we all agree. And then in other cases,
Speaker 1: it's a breathing technique that allows you to withstand very
Speaker 1: very cold weather, taught by a man who has a
Speaker 1: bunch of World Guinness records in that space of being
Speaker 1: able to you know, be outside and crazy crazy temperatures
Speaker 1: or swimming crazy temperatures. And the Gooper's test this breathing
Speaker 1: technique to see if it works. They cry. There's always cry.
Speaker 1: Every episode. Someone christ and they you know, are doing
Speaker 1: this kind of arm gesture, which is just amazing to
Speaker 1: watch from a comedic perspective. But at the end of
Speaker 1: the episode, one of the main goopers actually says that
Speaker 1: her anxiety is more under control and she is working
Speaker 1: with a doctor to wean off of her medicine well,
Speaker 1: and you actually have an alternative motto which I love
Speaker 1: quoting uh someone in the show, just because something isn't
Speaker 1: proven doesn't mean it doesn't work, and that seems it
Speaker 1: really is that that says it all. Absolutely. I think
Speaker 1: that definitely says it all. And you know, maybe it
Speaker 1: doesn't work, and it could work one day. But I
Speaker 1: think any time that something is presented, especially on a
Speaker 1: platform like Netflix, as maybe this will work, you have
Speaker 1: to look at the potential risks of that. You have
Speaker 1: to wonder if there are viewers that are going to
Speaker 1: see this technique and opt for that rather than a
Speaker 1: more proven, traditional scientific method. It comes at a very
Speaker 1: interesting time, Jason. How many times in our show we're
Speaker 1: talking with individuals who in the illness space and or
Speaker 1: the medical space, which is increasingly embracing the wellness space.
Speaker 1: And I do wonder about some of the information that
Speaker 1: might come out that, you know, as we explore alternatives,
Speaker 1: whether it's acupunctural alternative medicine that's lowly kind of the
Speaker 1: traditional world is embracing, like to be kind of careful
Speaker 1: about how this is presented, right because there isn't necessarily
Speaker 1: a lot of science or R and D or medicine
Speaker 1: behind this writer or research that has shown that these
Speaker 1: theories are correct exactly. When you're looking at things that
Speaker 1: are too out there, as they say, then you run
Speaker 1: that risk. And I think we really have to look
Speaker 1: at it from the viewer's perspective. Are people going to
Speaker 1: be swayed by sort of the power and the celebrity
Speaker 1: of Gwyneth Paltrow? And I think that's the ultimate question
Speaker 1: about the show. Well, and it's a really good point
Speaker 1: to this notion that we do talk a lot about
Speaker 1: and and people want to believe right, they want to
Speaker 1: believe they are increasingly skeptical. I think we all are
Speaker 1: to some about big pharma, about sort of being over
Speaker 1: medicated and hoping, you know, we think about a plant
Speaker 1: based diet that like, there will be these things that
Speaker 1: we can do that will ultimately make us feel better
Speaker 1: and maybe less polluted as as people. Yeah, And I
Speaker 1: think that gets to sort of one of the episodes
Speaker 1: that I think was actually the best, where they try
Speaker 1: pescyterian diet, they try a vegan diet, they try fasting,
Speaker 1: and the analysis they come to is that eating right
Speaker 1: and exercise is what is good for you. And in
Speaker 1: that episode they try. My parents told me that years ago.
Speaker 1: So I think there are moments where you have to
Speaker 1: look at the show and go, you know what, this
Speaker 1: is a valid, normal, rational point about wellness. I think
Speaker 1: where I kind of have to scrunch up my nose
Speaker 1: and look sideways at it is when you're looking at
Speaker 1: you know, energy healing and psychic mediums, things that are
Speaker 1: just a little bit too out there, at least for
Speaker 1: my sensibilities. But I'm sure someone views as foul. Are
Speaker 1: they very clear like we we I kidded like in
Speaker 1: the introduction that there's a warning at the beginning of
Speaker 1: every show, but you start your story that way. I mean,
Speaker 1: they're very clear about saying, you know, just f y
Speaker 1: I you know, there hasn't been either scientific research that'st
Speaker 1: Are they very clear about saying what we present ent
Speaker 1: you know, take it or leave it kind of thing.
Speaker 1: There's quite literally a warning at the beginning, so I
Speaker 1: think that they're very transparent about that. I personally wish
Speaker 1: that there were a warning like every five to seven minutes,
Speaker 1: but I have to give them credit for giving that
Speaker 1: warning up front. And I do think that one of
Speaker 1: the good things about the show is that it is important,
Speaker 1: as you said, to question big pharma and to question
Speaker 1: these things that we are you know, maybe not so, Sharon,
Speaker 1: but I think when it comes to questioning medicine that
Speaker 1: is scientific and that has proven, that's where I start
Speaker 1: to worry, well, because that's what's let us down this
Speaker 1: path where people aren't vaccinating. Their comments exacsolutely, and I
Speaker 1: will say Group has made it very clear their pro vaccination,
Speaker 1: and they've written that on their website extensively, so I
Speaker 1: think where credit is due, I'll give that to them.
Speaker 1: I think that that's very important to have that kind
Speaker 1: of warning, even on a site like that. One last
Speaker 1: question the Group brand Man, it just seems like it's
Speaker 1: getting bigger and bigger evaluation on this. I believe the
Speaker 1: last evaluation I saw was a quarterbillion dollars, which is
Speaker 1: obviously very impressive, and I think it's getting bigger culturally
Speaker 1: as well as financially. I think that the fact that
Speaker 1: there are these retail stores now there's one in sag Harbor,
Speaker 1: in the Hampton's, there's in New York, in Santa Monica, California. Online,
Speaker 1: there's a huge presence for them. And I even think
Speaker 1: the pushback that they're getting is ultimately part of the
Speaker 1: brand because it keeps us all talking about the website,
Speaker 1: about Gwyned That's Polly Moss ends her story taking a
Speaker 1: look at the new Netflix series The Goop Lab with
Speaker 1: Gwyneth Paltrow, and I gotta say, I just kind of
Speaker 1: want to watch it based on what she had to say,
Speaker 1: I kind of want to watch it with Polly. As
Speaker 1: she said that warning which comes at the top of
Speaker 1: every episode, it kind of maybe should have been flashed
Speaker 1: maybe several times throughout the episode, allowed to dig into
Speaker 1: there will be interesting to see what the next turn
Speaker 1: that story takes will be. Is she investing taking into
Speaker 1: account environmental, social and governance factor has been making investment
Speaker 1: This form Jason has been around for years, no doubt
Speaker 1: about it. It absolutely has and yet and yet, and yet,
Speaker 1: I feel like this is the end yet episode of
Speaker 1: Bloomberg Business Week. But you know what we're talking at
Speaker 1: is this notion that it hasn't totally caught on or
Speaker 1: maybe it is now. But what I love about this
Speaker 1: story is it's very Bloomberg. Take all of this once
Speaker 1: at the table. Emily Chason is here with us. Nice
Speaker 1: to see you. Nice to see you. All right, So
Speaker 1: tell us about this piece, because as we alluded to,
Speaker 1: and you have said yourself, this is sort of Bloomberg
Speaker 1: taking on E s G in many ways. Yeah, Well,
Speaker 1: so E s G has been out there for a while.
Speaker 1: There's about thirty trillion in assets in the space now,
Speaker 1: so it's grown a lot um, but a lot of
Speaker 1: those assets are sort of like negative screening, where they
Speaker 1: just take out companies they don't like kind of um, alcohol, tobacco, porn,
Speaker 1: anything like that, they'll take out UM. And that's most
Speaker 1: of the assets in the E s G space. And
Speaker 1: then there's been this E s G integration to get
Speaker 1: sort of risks into your portfolio. So the environmental risk,
Speaker 1: which everybody is talking about right now, social risk, UM,
Speaker 1: customer risks, all of that to get into your portfolio.
Speaker 1: And this is sort of the next evolution of that
Speaker 1: because that really relies on data and UM, the data
Speaker 1: is not very clear. It's kind of a mess in
Speaker 1: E s G. It's not regulated um a lot. And
Speaker 1: this I just have to say, because I feel like
Speaker 1: Jason and I've had a lot of conversations about h
Speaker 1: G and I'm sure you have too. That it's not
Speaker 1: like you can compare one fund to another. Everybody's using
Speaker 1: different metrics to kind of screen for those eh G factors.
Speaker 1: And I mean every company that produces e s G
Speaker 1: data is often using different metrics as well or their data, yeah,
Speaker 1: or sometimes they don't produce it at all. So the
Speaker 1: story is about quants and how quants are betting. You know,
Speaker 1: we're good with bad data, We're good with problems um
Speaker 1: in data, and we can use this to our advantage
Speaker 1: and build sort of models that incorporate all the data
Speaker 1: and let us trade better. So tell us about some
Speaker 1: of the quants, because you're talking about some well known
Speaker 1: folks here. One of them is our Besque Acid Management.
Speaker 1: It is a firm that's based in London and Frankfurt
Speaker 1: and they are building a huge artificial intelligence model that
Speaker 1: works to see how to incorporate e s G factors
Speaker 1: so that they think they can tilt their portfolio and
Speaker 1: get a better return. But is a huge model. They
Speaker 1: run it across six thousand computers, so leven different data centers.
Speaker 1: That you conclude that in your story, that kind of
Speaker 1: blew my mind. It just gave us an idea in
Speaker 1: terms of the scale of information in data that they
Speaker 1: have to play. This is a lot of unstructured data.
Speaker 1: It's data you know, from governments, it's data from m
Speaker 1: G o s, It's data from all sorts of groups
Speaker 1: UM that are producing this e s G data. It's
Speaker 1: not just the companies UM and trying to part it
Speaker 1: all together and make estimates about it as really a
Speaker 1: gargantuan task. And what's interesting about that too, is right
Speaker 1: they're finding as a results of some of the e
Speaker 1: s G work they're doing, right, I think that they
Speaker 1: can use it were generally right and just investment applications
Speaker 1: at their firm. Yeah, a lot of the quants that
Speaker 1: are betting on this, they're not just betting on finding
Speaker 1: good companies are bad companies. What they're betting on is
Speaker 1: that E s G information will produce better information for trades,
Speaker 1: and that incorporating more information is better than not well,
Speaker 1: and talk about that element of this, because this is
Speaker 1: something you've done a lot of work. You and the
Speaker 1: team have done a lot of work on Emily, which
Speaker 1: is this notion of not treating e s G as
Speaker 1: something other, as something separate, but actually integrating it into
Speaker 1: a broader portfolio approach. How far along are we in
Speaker 1: out where this becomes more normal courts of business. Well,
Speaker 1: one of the quants we interviewed in the story is
Speaker 1: a Katie and Asset Management UM, one of the really
Speaker 1: big quant firms out there, and they've just sided they're
Speaker 1: going to take E s G and put it into
Speaker 1: their portfolio metrics. So the same way they say, if
Speaker 1: you're a corrupt country, we're going to give you a
Speaker 1: discount for corruption UM if your company is based there,
Speaker 1: they'll do that for carbon pricing. And what they found
Speaker 1: is like really fascinating that carbon pricing UM in places
Speaker 1: where there is an actual carbon tax is affecting stock
Speaker 1: prices in those regions. So in places where there isn't
Speaker 1: a carbon tax, big emitters, they saw we're also getting affected.
Speaker 1: So what they did was they said, let's put in
Speaker 1: an implicit carbon tax into our portfolio, and we're gonna
Speaker 1: go extrapolate based on all forty companies based on their emissions,
Speaker 1: and even if they don't report emissions, we're going to
Speaker 1: estimate what their missions are based on their revenue, based
Speaker 1: on their UM, their size, just to see if we
Speaker 1: get their industry, just to see if we can figure
Speaker 1: it out and sort of use this information instead of
Speaker 1: pretending it doesn't exist. I have to I love this
Speaker 1: quote too in your story. I think this was from
Speaker 1: the CEO of q m A and they are unit
Speaker 1: a prudential financial Right, we all know about that firm.
Speaker 1: Quants are used to filling in the gaps. I mean,
Speaker 1: this is what's kind of crucial. I think this is
Speaker 1: what's been needed in the E s G space, right,
Speaker 1: that there are a lot of gaps, and really, you know,
Speaker 1: defining the metrics that measure E s G each of
Speaker 1: these different ones um categories, do it really well? Yeah?
Speaker 1: And this is also really about the hunt for alpha. Right,
Speaker 1: there's so many E s G metrics. There's so many
Speaker 1: different ways you can see a company of which metrics
Speaker 1: are actually going to influence the market and influence returns.
Speaker 1: And I think the quants are really trying to find
Speaker 1: that out. And so when you think about the quants,
Speaker 1: I mean there is this sense I think historically when
Speaker 1: you think about hedge funds and other money managers, that
Speaker 1: as the quants go sort of so go others. I mean,
Speaker 1: is this sort of the tip of the sphere in
Speaker 1: many ways, because I'm thinking about the news that I
Speaker 1: think we talked to you about a couple of weeks
Speaker 1: ago of Black Rock taking this more into account. Well,
Speaker 1: actually black Rocks also been publishing quant papers on this,
Speaker 1: so they're they're in this too because but the quant
Speaker 1: models have taken longer to develop, So the quants are
Speaker 1: sort of almost the other side, almost a later entrance
Speaker 1: for some ways into it. But they all so you know,
Speaker 1: see this as an opportunity for them. Um, maybe other
Speaker 1: firms don't see. And that's Emily Chason, part of the
Speaker 1: ever growing team here at Bloomberg covering climate and really
Speaker 1: with a very Bloomberg twist, right, Carol, this idea that
Speaker 1: the quants they're onto this and maybe have some solutions,
Speaker 1: but they're certainly identifying some places where there are some gaps. Well,
Speaker 1: we're realizing with e s G. That figuring out those
Speaker 1: factors E s G. Factors, picking those out that are
Speaker 1: better than others, it's not so easy. But the quantzman
Speaker 1: they have a lot of data that certainly can help
Speaker 1: in this process. So it's been a big year for
Speaker 1: Porsche and Jason, no doubt about it. This company reported
Speaker 1: record deliveries for last year and they predicted that its
Speaker 1: first all electric model. We're talking about. The Takon will
Speaker 1: generate further growth in Porsche Cars North America alone, reporting
Speaker 1: record US retail sales last year. We're delighted to have
Speaker 1: Klaus Delmer's CEO of Porsche North America back with us.
Speaker 1: He joins us from Atlanta and a little further south
Speaker 1: from where you are. Klaus, the big game coming up,
Speaker 1: the Super Bowl in just a few weeks, and you
Speaker 1: are going to unveil a huge new ad. Tell us
Speaker 1: about it. Yes, you know, Porsche is looking at Super
Speaker 1: Bowl as a an opportunity to share the Porsche story
Speaker 1: and of course the new arrival of a family member
Speaker 1: right at the big Game, and we're really excited about it.
Speaker 1: Last time we were there was seven, so quite some
Speaker 1: time ago. So we chose, we chose to choose those
Speaker 1: moments carefully well and tell us about kind of why now,
Speaker 1: why this car? I mean, this is a big game obviously.
Speaker 1: Is this about going after kind of a younger audience
Speaker 1: for Porsche generally speaking, it's going after new audiences and
Speaker 1: making new friends out there. Uh. And the Ticon that's
Speaker 1: the entry now for us into the battery electric vehicle era,
Speaker 1: which is momentous for Porsche, and that's why we want
Speaker 1: to share the story about Porsche. We've been making, developing
Speaker 1: and producing selling sports cars for over seventy years now,
Speaker 1: and we want to show a couple of cars through
Speaker 1: those decades in that spot. But we also want to
Speaker 1: show the tychon on the battery electric vehicle. Alright, So
Speaker 1: Claus notably and you mentioned this, there's a little bit
Speaker 1: of a history lesson embedded in this ad, and you
Speaker 1: do show some older cars as well. Tell us about
Speaker 1: you know what you're going for, and I do wonder
Speaker 1: in a field where you know there's some notable upstarts here.
Speaker 1: Maybe you're trying to show a little bit of a
Speaker 1: legacy and history and experience. Well, you know, we think
Speaker 1: every Porsche ever build in over seventy years has got
Speaker 1: a soul and now we talk about soul electrified. So
Speaker 1: you want to see some of those cars that this
Speaker 1: brand stands on. I give you one example. There's a
Speaker 1: racing car in that spot, a nine seventeen K that
Speaker 1: was built purposely for winning the twenty four Hours of
Speaker 1: Lemore nineteen seventy. In nineteen seventy one, it was the
Speaker 1: main feature of Steve McQueen's lement movie. Um and that
Speaker 1: car is part of a highst highest of cars that
Speaker 1: are trying to catch up with a Taikon going through
Speaker 1: a interesting scenery in Germany. So talk to us little
Speaker 1: bit about the Tykon. We were lucky you brought a
Speaker 1: car here to Bloomberg, JA and I got to sit
Speaker 1: in it with our own Hannah Elliott. As you know,
Speaker 1: well now are our car guru here at Bloomberg. Tell
Speaker 1: us how car sales are going. What kind of numbers
Speaker 1: are you seeing? Um across the world? Demographically? Where's it selling? Well,
Speaker 1: generally speaking, we have just started delivering, and the United
Speaker 1: States was actually the first country in the world getting
Speaker 1: those cars on the ground delivered to customers. So we've
Speaker 1: sold a hundred and thirty last year in two thousand nineteen,
Speaker 1: so that's not big numbers. But we're aiming, of course,
Speaker 1: to bring this car to the States in in larger numbers.
Speaker 1: Um uh. And the big swing that we see coming
Speaker 1: up is also connected to seasonality. So spring this year
Speaker 1: you're gonna see quite a few Takons in Port dal
Speaker 1: Ships and hopefully also all the prospects, hand raisers, depositors
Speaker 1: and people who already ordered the car then being enthusiastic
Speaker 1: about that new arrival. You know what's interesting too, And
Speaker 1: I want to go back to the Super Bowl commercial
Speaker 1: because it really does get into the history where Porsche
Speaker 1: has come from where it is today and just kind
Speaker 1: of all the walks in terms of the auto industry
Speaker 1: that you guys have been involved in. Why TV though,
Speaker 1: I think in a world where social media has become
Speaker 1: so important, why is TV such an important medium, if
Speaker 1: you will, in terms of ADVERTI advertising, is it still
Speaker 1: relevant to get new customers? You know? The equation of
Speaker 1: the Big Game actually is about a hundred million people
Speaker 1: on the game day are watching the game. Um and
Speaker 1: there is actually no other marketing or advertising platform in
Speaker 1: the United States with such an impact. So if you
Speaker 1: want to spread some big news about your company, and
Speaker 1: as I said, we don't do that every year, you
Speaker 1: might want to look at that stage too to engage
Speaker 1: people then in what you have to say. And that's
Speaker 1: why Super Bowl, the TV at of course for us,
Speaker 1: is important. But you're right, social media plays a big
Speaker 1: role when you want to create some awareness and get
Speaker 1: your car on people's shopping list. Uh, and social media
Speaker 1: picks up Super Bowl and all the ads you know,
Speaker 1: weeks before the actual game and in the aftermath as well.
Speaker 1: So it's it's a big multiplier for us, and that's
Speaker 1: why we're in there. And Claus tell us about the
Speaker 1: customer for the Ticon specifically, is this how much I
Speaker 1: should say, does this sort of widen the aperture as
Speaker 1: it were, to a different audience, a younger audience, a
Speaker 1: different geography. Who's going to buy this car that might
Speaker 1: not have bought a Porsche before? I mean, is Jason
Speaker 1: your customers that who you're going after? Who is it? Okay? Well,
Speaker 1: you know what we can derive data from at the
Speaker 1: moment is our database with all all our depositors and
Speaker 1: people who actually that the car looking at that. That's
Speaker 1: a couple of thousands of people. So that's interesting that
Speaker 1: come within the brand. So they they're driving approche right
Speaker 1: now and they want to either add the tay Kon
Speaker 1: to their garage or they want to replace one of
Speaker 1: our cards. But come from the outside of our current
Speaker 1: client here and the outside the main competitor in the
Speaker 1: outside world that is currently then engaging with the tykon
Speaker 1: Um is from tesla Um. So we respect that brand.
Speaker 1: We respect them preparing the market for better electric vehicle,
Speaker 1: but we also respect their customers now looking into driving
Speaker 1: a Porsche when it comes to better electrics. So what
Speaker 1: I'm hearing classes that you're saying, some of them are
Speaker 1: new to the brand, new to the Porsche brand that
Speaker 1: you're bringing in. That's right, Yeah, fifty are new to
Speaker 1: the brand, so they have never owned a Porsche before.
Speaker 1: And a conquest rate of more always is a very
Speaker 1: good indication for having the right strategy in our business model.
Speaker 1: And so Klaus, tell us about some of the impact
Speaker 1: on your other well known brands and your other well
Speaker 1: known lines, and specifically maybe the nine eleven. I mean,
Speaker 1: that's such an iconic brand in many ways, an iconic car.
Speaker 1: You know, how much does that change the way you
Speaker 1: think about it? And maybe maybe your customers think about
Speaker 1: it if they're transitioning to this new electric You know,
Speaker 1: from my point of view, the nine eleven stands on
Speaker 1: its own within our brand, maybe even in the industry,
Speaker 1: especially with our fans. It's Nike and off the brand.
Speaker 1: Um so people who gravitate towards the nine eleven. And
Speaker 1: we've been building a car since nineteen sixty three's it's
Speaker 1: now in its eighth generation. Um, they will remain with
Speaker 1: that car. Um. Of course they're gonna try out Tychon
Speaker 1: and see what that car is like. But the leven
Speaker 1: will always remain a nine eleven from our point of view. However,
Speaker 1: if I look at the Deposito data, yes, they are
Speaker 1: some customers to currently drive a nine eleven either want
Speaker 1: to add the Tykon to the garage or potentially have
Speaker 1: a break from the nine eleven and then drive the Tykon.
Speaker 1: So there's going to be a little bit of movement
Speaker 1: in there. But we're not worried about the nine eleven
Speaker 1: because that car is so rock solid in that segment
Speaker 1: of two door sports cars, um that there won't be
Speaker 1: much substitutional cannibalization from our point of view. Wait, so
Speaker 1: do I hear that a nine eleven will ultimately, I know,
Speaker 1: go go electric. I think it's the last line that
Speaker 1: you're going to do it. It will happen eventually. Well,
Speaker 1: everything is going to go electric eventually, you know that's
Speaker 1: you guys have made that commitment. Yeah, that's the name
Speaker 1: of the game. And yes, the nine eleven will most
Speaker 1: probably be the very last one in the line for
Speaker 1: that transition, and it might happen, you know, in in
Speaker 1: a decade from now. We don't know. We just know
Speaker 1: that from our current plans, fifty of our car sold
Speaker 1: in will actually have a plug, so will either we
Speaker 1: battery electrically, will or will be a plug in hybrid. Alright,
Speaker 1: so it's the beginning of the year. As Carol mentioned
Speaker 1: at the top, twenty nineteen was a great year. I
Speaker 1: believe you were recently returned from world headquarters over there
Speaker 1: in Germany. What's the message that's been put out to
Speaker 1: the senior executive team in terms of what to expect
Speaker 1: in Well, you know, we've we've seen record years now
Speaker 1: for portion has ten record years in a row, so
Speaker 1: a decade full of records. Now, we all know that
Speaker 1: the economy goes in cycles, so we need to be cautious,
Speaker 1: we need to be flexible. We shouldn't be anxious, We
Speaker 1: should be ambitious, and we are. But of course the
Speaker 1: economy globally is potentially slowing down and we can't expect
Speaker 1: those record years to carry on forever. So we have
Speaker 1: to have a business model in place that is flexible,
Speaker 1: flexible enough to cater for those fluctuations. In the economy classes.
Speaker 1: It's safe to say that as you guys can tinue
Speaker 1: the transition to electric vehicles, that there is going to
Speaker 1: be some extra costs as a result of it, and
Speaker 1: there's going to be some changing dynamics within the brand
Speaker 1: mix and how customers see it or how customers are
Speaker 1: purchasing that there might be, you know, some challenges when
Speaker 1: it comes to meeting the top and bottom lines better
Speaker 1: electric vehicles in terms of the investment costs. Development costs
Speaker 1: are more expensive than our of course, you know decades
Speaker 1: of experience with combustion engines and that type of technology.
Speaker 1: It's going to take years until we have scale and
Speaker 1: better electric vehicles in a way, so we will have
Speaker 1: costs comparable to combustion engines. However, this is the way
Speaker 1: we have to go and it's not a revolution, it
Speaker 1: will be an evolution. That's class Salmo or the Presidency
Speaker 1: of Portion of North America, and last year we had
Speaker 1: some fun with him. He brought around the Ticon, their
Speaker 1: first electric vehicle, and they're going all in over the
Speaker 1: next few years when it comes to electric well and
Speaker 1: so appropriate that we talked to him, and probably not
Speaker 1: an accident that Porsche is making a bigger splash at
Speaker 1: the Super Bowl this year. Given what we've already talked
Speaker 1: about as it relates to Tesla e Vis, They're having
Speaker 1: a moment, and really the question is are the traditional
Speaker 1: carmakers going to be able to keep up with Tesla.
Speaker 1: We spent a lot of time with Class Selmer of
Speaker 1: Porsche North America for the full conversation. We sure to
Speaker 1: download the Bloomberg Business Week Extra wherever you download your podcast.
Speaker 1: And that's going to wrap up the weekend edition of
Speaker 1: Bloomberg Business Week from Bloomberg Radio. Thank you so much
Speaker 1: for joining us. I'm Jason Kelly and I'm Carol Masser.
Speaker 1: Be sure to tune into Bloomberg Business Week Radio Live
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