Speaker 1: This is Bloomberg Business. Wait inside from the reporters and
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Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast.
Speaker 2: Another week where there were still YEP earnings more than
Speaker 2: a dozen retailers, and then Tim, we know the big
Speaker 2: one and video.
Speaker 3: Yeah, people use the term blowout quarter a lot. This
Speaker 3: was actually a blowout quarter.
Speaker 2: For Invidia, absolutely and the stock was moving on the news.
Speaker 2: All right, we'll kind of get to that a little
Speaker 2: bit later. On politics also front and center, as former
Speaker 2: President Donald Trump, Rudy Giuliani and others turned themselves into
Speaker 2: Georgia authorities as part of the criminal case related to
Speaker 2: the twenty twenty presidential election. And then of course, the
Speaker 2: Kansas City Fed's annual gathering and Jackson Hole put monetary
Speaker 2: policy front and center again.
Speaker 3: With the economy in mind, we'll floor the cost of
Speaker 3: climate change and extreme heat when it comes to American
Speaker 3: productivity in addition to their deadly toll on our fellow citizens.
Speaker 2: Plus more details on the highly anticipated IPO of the
Speaker 2: British ship designer ARM Holdings, and why the company needed
Speaker 2: more than thirty five hundred words in its prospectus to
Speaker 2: explain the risks it faces when it comes to China.
Speaker 3: All that to come, we begin with the past week's
Speaker 3: kickoff to the twenty twenty four presidential election, as eight
Speaker 3: Republican hopefuls squared off in their first debate in Milwaukee,
Speaker 3: with each looking to break Donald Trump's grip on the
Speaker 3: party's voters, and yet only one seems to really be trying,
Speaker 3: former New Jersey Governor Chris Christy.
Speaker 1: We have to dispense with the person who said that
Speaker 1: we need to suspend the Constitution to put forward his
Speaker 1: political career. Mike Pence said no, and he deserves credit
Speaker 1: for it.
Speaker 2: That was former Governor Christy going after the former president
Speaker 2: and praising the and Vice President Mike Pence on the
Speaker 2: debate stage. Yet here in lies the rub. Long before
Speaker 2: Christy devoted himself to stopping Trump, he helped annoy him,
Speaker 2: becoming the first Republican candidate to drop out and endorse
Speaker 2: Donald Trump back in twenty sixteen.
Speaker 3: Head of the debate and writing about Chris Christi. In
Speaker 3: this week's issue of Bloomberg BusinessWeek is the magazine's national
Speaker 3: correspondent Josh Green, who offered up some insights into the
Speaker 3: long shot strategy.
Speaker 4: As I was looking at the race, of looking at
Speaker 4: the field, one guy stood out, and now was Chris Christie.
Speaker 4: Because Christy is a famously aggressive debater, very effective. He's
Speaker 4: a big, larger than life character, and this cycle he's
Speaker 4: the only Republican character who's really going after Donald Trump
Speaker 4: with both barrels. So it looked like that this could
Speaker 4: be a kind of inflection point in the race, one
Speaker 4: that kind of lent itself to Christie's talents. And so
Speaker 4: I went and traveled with him around South Carolina and
Speaker 4: New Hampshire, talked to him about what his plan had
Speaker 4: been and how he had gone from being an important
Speaker 4: Trump endorser in twenty sixteen to today running against him
Speaker 4: as Rum's loudest critic.
Speaker 2: Tell us about your time spent with Chris Christy and
Speaker 2: what you kind of took away from that. And I
Speaker 2: am curious about how you maybe challenged him about Wait
Speaker 2: a minute, you were his friend, now you're his critic.
Speaker 2: Are you going to go back to being his friend?
Speaker 5: Talk to us about that.
Speaker 4: Yeah, I mean it was fascinating from kind of an
Speaker 4: anthropological standpoint because I went down to South Carolina with Christy.
Speaker 4: You know, Trump is very popular with Republicans still, and
Speaker 4: so I was expecting a lot of kind of Trump
Speaker 4: maga people to be in there shouting down Christy and
Speaker 4: all sorts of confrontations, and instead what I found was
Speaker 4: just the opposite. It was almost like a group therapy
Speaker 4: session of you know, Republicans, some of who'd driven for
Speaker 4: hours and even from other states to kind of come
Speaker 4: and commune with Christy and kind of find the crowd
Speaker 4: of people who were Republicans but didn't like Donald Trump.
Speaker 4: There's sort of fewer and fewer numbers these days, and
Speaker 4: all of them were sort of worshipful of Chris Christie.
Speaker 4: So it's really interesting to see that for all that
Speaker 4: we see on the news and on social media about
Speaker 4: how popular Trump continues to be, despite indictments, despite impeachments,
Speaker 4: there still is a group of Republicans who are never
Speaker 4: Trumpers and who are hoping that Trump won't be the
Speaker 4: nominee in twenty twenty four. I think the problem for
Speaker 4: Christie and the challenge for Christie is that there aren't
Speaker 4: enough of them to win him the nomination.
Speaker 3: That's what I was just going to have a broader appeal. Yeah,
Speaker 3: I was just going to ask you if there are
Speaker 3: enough of those to actually help him get a nomination.
Speaker 3: I mean, in an alternate universe, certainly, you know that
Speaker 3: could work. So, Josh, what about Chris Christy today? Who
Speaker 3: is he and sort of how did he recover from
Speaker 3: what happened at the end of his term with the
Speaker 3: old you know, time for some traffic problems in Fort Lee.
Speaker 4: Thanks, exactly what I mean. Look, let's remember, you know,
Speaker 4: Christy at one point was the rising star of the
Speaker 4: Republican Party before Donald Trump came along. Popular blue state
Speaker 4: governor could have run for president against Obama in twenty twelve,
Speaker 4: chose to wait and then wound up in trouble with
Speaker 4: the George Washington Bridge scale that tarnished the end of
Speaker 4: his president But he jumped in anyway in twenty sixteen
Speaker 4: and looked like a viable candidate until Trump came along
Speaker 4: and kind of stole his shtick as kind of the
Speaker 4: confrontational outer borrow you know, poke a finger in your
Speaker 4: chest guy. He just did it better and So when
Speaker 4: Christy recognized that he wasn't going to be the nominee,
Speaker 4: he made a move to become Trump's VP and became
Speaker 4: the first guy to endorse him. And so that shocked
Speaker 4: a lot of people because at the time, it's.
Speaker 2: Like, can I just say, it's like watching the Bachelorette,
Speaker 2: and you know, it's that bachelorette that just doesn't have
Speaker 2: a chance, but like just going for the rose, it
Speaker 2: was like pain.
Speaker 4: And instead it went to Mike Pence, and he wound
Speaker 4: up kind of getting humiliated. He got fired from Trump's transition,
Speaker 4: and I think his reputation was really kind of in tatters,
Speaker 4: you know, as the Trump administration went off the rails,
Speaker 4: a lot of people, Republicans and Democrats, I think, scorned
Speaker 4: Christie for having enabled Trump. And so one of the
Speaker 4: things that I think is going on, and I get
Speaker 4: at this and the piece and I talked to Christie
Speaker 4: about it, is is he really running for the Republican nomination?
Speaker 4: Does he really think he can be Trump? Or is
Speaker 4: he really aiming here for personal redemption? Because if he
Speaker 4: does manage to stop Trump, even if he himself is
Speaker 4: not the nominee, I think a lot of people will
Speaker 4: be very thankful and that he'll in a sense redeem
Speaker 4: himself in a tone for how he helped Donald Trump
Speaker 4: seven years ago.
Speaker 5: Well, don't you feel like Josh?
Speaker 2: And that's where I put a note as I read
Speaker 2: through your story, you know, is impact if he doesn't
Speaker 2: get the nomination and you get to it? Is it
Speaker 2: just the point that this is someone who actually is
Speaker 2: standing up and kind of poking the bear and saying,
Speaker 2: wait a minute, you did this, you did that? You know,
Speaker 2: is this what we want for a president? So you know,
Speaker 2: is that how he redeems himself Ultimately? Then is that
Speaker 2: going to be useful politically? Will it change the minds
Speaker 2: of voters?
Speaker 6: Well?
Speaker 4: I think what he's trying to do there is essentially
Speaker 4: bait Trump into attacking him. Like, the challenge for all
Speaker 4: of these candidates is they need to emerge as the
Speaker 4: main anti Trump alternative. For a while, it looked like
Speaker 4: that was going to be De Santis, but De Santus
Speaker 4: is now in a tailspin. So if Christy, you know,
Speaker 4: his hope was to get on a debate stage with
Speaker 4: Trump and kind of go mono amano and beat him
Speaker 4: up and hope that Republicans recognize that Hey, you know,
Speaker 4: there's a new sheriff in town. Christy is also this
Speaker 4: tough guy. Maybe we should switch our allegiance to him. Well,
Speaker 4: he doesn't have that option now, and Chris Christy can
Speaker 4: still stand out from the rest of the pack by
Speaker 4: going after Trump. I think the question is will Republican
Speaker 4: voters follow him there? And the early polling evidence is
Speaker 4: that they won't. And I sat down with Christy and
Speaker 4: asked him about that, and he said, essentially, listen, I
Speaker 4: know none of you guys in the media and none
Speaker 4: of polsters believe that I'm going to beat Trump. But
Speaker 4: when I do, when I go out there and beat
Speaker 4: him up in the debates and his own voters see that,
Speaker 4: they're going to think to themselves. And this is a
Speaker 4: quote from Chris Christie to me, Okay, he did that
Speaker 4: to Trump, what in God's name will we do to
Speaker 4: Joe Biden? And at that point, you know, Christy is
Speaker 4: hoping that they'll switch their allegiance. That is the theory.
Speaker 4: We don't have a lot of evidence yet to suggest
Speaker 4: that it's going to pan out that way, but I
Speaker 4: would point out that there's a new Republican poll out
Speaker 4: and sure enough, Chris Christi has leap frogs Ron Desantas
Speaker 4: and now stands in second place behind Donald Trump. So
Speaker 4: still within the realm of possibility. A lot of it
Speaker 4: is going to depend on how Christy does.
Speaker 7: In the debate.
Speaker 3: So it could, it could happen. But let's say it
Speaker 3: doesn't happen, and let's say that former President Trump is
Speaker 3: once again for a third time Republican nominee Trump. What
Speaker 3: happens to Chris Christy then? Does he do what so
Speaker 3: many other never Trumpers did, and and and gather around
Speaker 3: and say, well, I guess he is the Republican nominee
Speaker 3: and we'd rather see him as president than Joe Biden.
Speaker 4: You know, it's it's it's a great question, and it's
Speaker 4: one that Christy ducks by saying he doesn't think that
Speaker 4: that's going to happen, but it's it's gonna It's really
Speaker 4: tough to go from being anti Trump to pro Trump,
Speaker 4: to anti Trump to back to pro trup. You know,
Speaker 4: at some point, you know, you have to put on
Speaker 4: a neck brace from all that whiplash. I think what
Speaker 4: Christy is really hoping for that no matter how things
Speaker 4: turned out, that he's redeemed himself in the eyes of
Speaker 4: the political world to an extent, simply by fighting the
Speaker 4: good fight that the other Republican candidates don't seem to
Speaker 4: be willing to and trying to stop Donald Trump. Now,
Speaker 4: that might not get him an important political job, but look, hey,
Speaker 4: maybe in four years if the Trump era passes, you know,
Speaker 4: maybe if the party sours on Trump and nominate somebody
Speaker 4: else a Ron de Santas, Tim Scott, you know, Christy
Speaker 4: will come to look like a like a brave guy,
Speaker 4: like a prophet, and maybe find a role for himself
Speaker 4: in politics. Is perhaps an attorney general or maybe you know,
Speaker 4: four years from now, eight years ago, he's only sixty
Speaker 4: years old, which is like adolescents in national politics. He
Speaker 4: could theoretically run for president in a future cycle where
Speaker 4: the MAGA vote isn't as powerful and still have a chance.
Speaker 4: So I think the main thing, what is.
Speaker 3: This world you describe, Josh, Well, it's on a far off,
Speaker 3: on a distant plankay.
Speaker 4: You know, people have been predicting for years and years
Speaker 4: that eventually Trump's hold on the Republican Party would break.
Speaker 4: But look, if he loses the election in twenty twenty
Speaker 4: four to Joe Biden. I think that's going to go
Speaker 4: a long way towards severing the party's connection to Trump.
Speaker 4: And if he wins, he can only serve one term.
Speaker 4: So there is the light at the end of the
Speaker 4: tunnel for non Trump Republicans, just in the sense that, like,
Speaker 4: eventually Trump can't be the president anymore and somebody else
Speaker 4: is going to kind of get that role. So I
Speaker 4: think Christy is also acting with an eye toward what
Speaker 4: that future might look like. But of course he's banking
Speaker 4: on the fact that we'll have to look very, very
Speaker 4: different than our Republican president does. Today.
Speaker 3: That was Bloomberg business Week National correspondent Josh Green. You
Speaker 3: can hear more from him and his outlook for the
Speaker 3: Republican presidential field on our podcast feed Coming.
Speaker 2: Up, we examined the cost of climate change and why
Speaker 2: it affects way more businesses.
Speaker 5: Than you might think.
Speaker 3: Economist Claudia sam helps break down the data when we
Speaker 3: come back. You're listening to Bloomberg business Week. This is Bloomberg.
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Speaker 2: Okay, yes, we focused on Jackson Hole and Jay Powell
Speaker 2: and all the global central bankers in attendance at the
Speaker 2: Kansas City Fed's annual gathering. We'll talk of fly fishing
Speaker 2: as well. You can read all about it though on
Speaker 2: the Bloomberg and also at Bloomberg dot com. And yet,
Speaker 2: what we keep thinking a lot about is climate change.
Speaker 2: The impact, the lives lost, the costs, the productivity hits.
Speaker 3: Yeah, another week with extreme weather and incredibly distressing headlines.
Speaker 3: The aftermath of Tropical Storm Hillary pummeling California and other
Speaker 3: parts of the Western US. Overall, Carroll the nation is
Speaker 3: on track to experience its worst year for smoke exposure
Speaker 3: in decades, this after wildfires in Canada sent toxic plumes
Speaker 3: drifting across the border to the Midwest and the East
Speaker 3: Coast earlier this summer. And then, of course there's Maui,
Speaker 3: where fires have pushed the official death toll into triple digits,
Speaker 3: with more than a thousand people still unaccounted for.
Speaker 2: And just remember climate change, it's a glo global thing.
Speaker 2: Fires and floods are tragedies. Of course, one of our
Speaker 2: next gas rights that we also shouldn't discount the economic
Speaker 2: damage caused by higher temperatures. Claudia sam is the founder
Speaker 2: of Some Consulting, a former fed economist, She's also the
Speaker 2: creator of the Psalm Rule of recession indicator, and she
Speaker 2: writes for Bloomberg Opinion.
Speaker 3: Claudia's latest article on the terminal discusses how heat drags
Speaker 3: on economic productivity. She and Bloomberg Opinion editor and climate
Speaker 3: columnists Mark Gonglof joined us with more.
Speaker 8: There's a human tragedy absolutely thinking about the economic cost.
Speaker 8: It really brings it to all of us, right, and
Speaker 8: the way in which high heats, rising temperatures one channel,
Speaker 8: an important channel to affect the US economy is through
Speaker 8: reductions in labor productivity. I mean it's a lot hard
Speaker 8: when it's high heat. It's a lot harder.
Speaker 6: To do the work.
Speaker 8: And we have twenty percent of occupations in the United
Speaker 8: States have heat exposure. It's not just agricultural workers, it's
Speaker 8: also to construction workers. So there's a wide group of
Speaker 8: people that are affected by the high heat and it
Speaker 8: shows up in the economy.
Speaker 2: Yeah, it's you know, as we talk about the costs,
Speaker 2: and first and foremost the loss of human life and
Speaker 2: the devastation obviously front and center. But yeah, we have
Speaker 2: to start looking at this increasingly. We talk about it
Speaker 2: a lot. I feel like have for years and years,
Speaker 2: but man, I feel like we're paying the piper now,
Speaker 2: We're really getting some real numbers in terms of all
Speaker 2: this costs. I want to go to you, Mark because
Speaker 2: as every day there is news stuff that is related
Speaker 2: to our climate, vultile weather patterns and so on. When
Speaker 2: you hear Claudia speak, how I mean this is just
Speaker 2: going to continue, correct because at this point we can't
Speaker 2: really slow the train, if you.
Speaker 4: Will, well, we could slow the train, but only by
Speaker 4: making some drastic choices, by making some different choices about
Speaker 4: how we produce energy. And you know, her great column
Speaker 4: reminded me. And it's just it's one piece of a
Speaker 4: thing that I've kind of been going on about for
Speaker 4: a while now, which is, you know, we talk a
Speaker 4: lot about the costs of the clean energy transition. You know,
Speaker 4: we got to it costs a lot of money to
Speaker 4: upgrade our infrastructure, to put in charging stations, to build
Speaker 4: out solar and wind. Although it's much cheaper than book
Speaker 4: building a coal plant, it did, you know, But still
Speaker 4: people complain about the costs and the cost will be high.
Speaker 4: But to me, I think we need to think of
Speaker 4: them as investments because the costs of not doing that
Speaker 4: are so great, And I think Claudia, I was just
Speaker 4: doing some very rough math. Claudia as the economist, I
Speaker 4: am not. But you know, if by twenty fifty we
Speaker 4: could be losing three hundred billion a year from heat
Speaker 4: related productivity and losses alone in the US economy, and
Speaker 4: then you get into other economies and then all the
Speaker 4: other effects that we're seeing, and again you just you
Speaker 4: just ran through the game of all the climate disasters
Speaker 4: we're seeing in like the past couple of months. Uh,
Speaker 4: those are all extremely costly, and they lead to long
Speaker 4: term health costs too, and that we haven't even begun
Speaker 4: to really tally up. And so the cost of not
Speaker 4: doing anything or much greater than the cost of doing
Speaker 4: something about this.
Speaker 3: Well, Claudia, talk a little bit about that, because you know,
Speaker 3: and perhaps the idea that you know, when we talk
Speaker 3: about costs, we don't associate what Mark is talking about, right,
Speaker 3: We don't associate the cost that you write about. When
Speaker 3: people talk about costs. They think about how much a
Speaker 3: cost to actually do things rather than you know, subtractive costs. Right,
Speaker 3: how much how much these disasters remove and take away
Speaker 3: from from productivity from a behavioral perspective, How do we
Speaker 3: shift the conversation to actually do this in a way
Speaker 3: that's you know, really productive.
Speaker 6: It's hard.
Speaker 8: I mean, the one of the things I talk about
Speaker 8: in the piece is the human costs, the economic costs.
Speaker 6: They all.
Speaker 8: Our most for lower income workers, communities that have you know,
Speaker 8: their housing isn't such that it makes it comfortable when
Speaker 8: the temperature is high, and so you have to you
Speaker 8: have to recognize we have a problem now.
Speaker 9: Right.
Speaker 8: You can disagree about how much happens in the future
Speaker 8: with climate change impacts, how much we can adapt, and
Speaker 8: yet right now we are losing productivity because we're not
Speaker 8: dealing with these high temperatures. And frankly, there are only
Speaker 8: there are very few attempts to even try to you
Speaker 8: try to locally mitigate some of the effects on workers,
Speaker 8: and we're not even doing a good job at that.
Speaker 5: What's the turning point?
Speaker 2: I guess, like I'm going to be really obnoxious, But
Speaker 2: is it when the gardener doesn't show up because it's
Speaker 2: so hot and they can't work in this.
Speaker 5: You know, what is it that.
Speaker 2: Makes mark people maybe pay more attention. We've had conversations,
Speaker 2: We've start to have more conversations with you about this.
Speaker 5: You know, climate.
Speaker 2: Change, the volatility not a new thing, but I keep wondering.
Speaker 2: I always thought, okay, wait, if you can make money
Speaker 2: off of this, ultimately people will sit up and take notice.
Speaker 2: What is it that ultimately makes people think more about
Speaker 2: the impact, the financial impact and do.
Speaker 5: The right thing.
Speaker 4: I think they are starting human impact? Yeah, well, the
Speaker 4: human impact is one thing. And there was a study
Speaker 4: out that suggested that people are more likely to take
Speaker 4: action when they're angry. So that's one thing. Maybe seeing people,
Speaker 4: maybe having your home destroyed and seeing people you love
Speaker 4: fall ill to this stuff will make you angry. But
Speaker 4: in terms of you know what we can do right now?
Speaker 4: There is there are things we can do right now
Speaker 4: to protect workers. And we are starting to talk about
Speaker 4: this more because we are seeing workers dying from extreme heat.
Speaker 4: And OSHA was supposed to. President Biden told OSHA two
Speaker 4: years ago to set some federal safety standards for workers,
Speaker 4: and they still haven't done it, And I do they
Speaker 4: are they They're getting another push right now because this
Speaker 4: summer has been so extreme, and so we are starting
Speaker 4: to think about it, we are starting to talk about it. Unfortunately, though,
Speaker 4: it is a case where we just we seem to
Speaker 4: need to be smacked in the face with it to
Speaker 4: be somewhat optimistic. I think just this one disaster after
Speaker 4: another that we're seeing that that will be costly. I mean,
Speaker 4: we're seeing more billion dollar disasters coming than than ever before.
Speaker 4: FEMA is about to run out of money and we're
Speaker 4: not even in the height of hurricane season yet, which
Speaker 4: is a scary thing. It's got enough money to cover Maui,
Speaker 4: but what would and it's going to have to spend
Speaker 4: a bunch more money to cover the flooding in California,
Speaker 4: and then we still haven't even started a hurricane season
Speaker 4: really yet. We could hope for a break there, we
Speaker 4: could hope for an into these disasters, but we've had
Speaker 4: three or four months of them steadily, and those are
Speaker 4: the kind of things that might really start to get
Speaker 4: attention when the money's run out and disasters are piling up.
Speaker 1: Right.
Speaker 2: Well, we hope we can continue this conversation with you both,
Speaker 2: because really smart voices and perspectives on this. Mark Gungloff,
Speaker 2: editor of Bloomberg Opinion on Zoom in New York City
Speaker 2: at Clodia some founder of some consulting, Bloomberg Opinion columnist
Speaker 2: on Zoom from DC. You know it reminds me, you know,
Speaker 2: there's a story on the Bloomberg bond. Investors can't rely
Speaker 2: on credit ratings to give them a fair assessment of
Speaker 2: the climate risks they're exposed to and should brace for
Speaker 2: trouble ahead.
Speaker 5: That's according to.
Speaker 2: The Institute for Energy Economics and Financial Analysis.
Speaker 5: So it's real, folks.
Speaker 3: Still head On Bloomberg BusinessWeek, our magazine team spotlights the
Speaker 3: prescription benefit managers or PBMs that many of us rely on,
Speaker 3: and explains why they're increasingly accused of driving drug prices
Speaker 3: higher rather than helping to keep them down.
Speaker 9: You know, what the pbm say is that they lower
Speaker 9: drug prices by getting these They lower net costs by
Speaker 9: getting these rebates and other discounts from the farmer companies.
Speaker 9: They aggregate buying power, they aggregate demand, and they can
Speaker 9: go to the table with pharma and say, you know,
Speaker 9: give us, give us money back on these drugs. So
Speaker 9: the question is you know where does that go and
Speaker 9: who really benefits from it?
Speaker 3: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business App, and YouTube. You can also listen
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Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 2: PBMs. You know, pharmacy benefit managers. They negotiate cheaper prices
Speaker 2: for employers and health plans. That's the goal. But as
Speaker 2: our Bloomberg BusinessWeek team reports, these same entities are also
Speaker 2: pocketing drug maker's cash, and they're under fire from all
Speaker 2: directions right now. Blue Shield of California about one week
Speaker 2: ago set it or replace some services from CVS Health's
Speaker 2: care Mark PBM with an amalgam of rival offering, and
Speaker 2: that sent shares of CBS sliding.
Speaker 3: An array of officials, from Federal Trade Commission Chair Lena
Speaker 3: Kahn to Florida Governor Ron de Santis, they want more
Speaker 3: transparency from these PBMs. A story in the Business section
Speaker 3: of the new issue of the magazine details how these
Speaker 3: PBMs actually grab extra money from the very parties they're
Speaker 3: supposed to be playing hardball against. For more, let's bring
Speaker 3: in the author of the story, Bloomberg News healthcare reporter
Speaker 3: John Tazzi, along with the editor of Bloomberg BusinessWeek, Joel Weber.
Speaker 10: Well, I just had no idea how lucrative is to
Speaker 10: get between you and your prescriptions, And it turns out
Speaker 10: that we're not alone, and how that feels like a
Speaker 10: big deal, and that even places like the FTC has
Speaker 10: also shown an interest. John has been on this for
Speaker 10: a while and kept me abreast of his interest in it,
Speaker 10: and so I was really glad to see it. But
Speaker 10: how does this break down, John, Because the very people
Speaker 10: who are supposed to be keeping our drug prices affordable
Speaker 10: maybe don't have my best interests at heart.
Speaker 9: Yeah, so this has been an issue in go.
Speaker 10: You were just you know, like with somebody that we could,
Speaker 10: you know, take advantage.
Speaker 9: I'm sorry, John, This has been an issue in the
Speaker 9: industry for a long time. People who followed it know
Speaker 9: about rebates. So basically what happens is you go to
Speaker 9: the pharmacy, you fill a prescription, your health plan pays
Speaker 9: the full dollar amount of that prescription, and then after
Speaker 9: the fact, at some point, the drug manufacturer, the pharma company,
Speaker 9: sends a rebate for part of the value of the
Speaker 9: drug to your pharmacy benefit manager, and the pharmacy benefit
Speaker 9: manager sends part or all of that rebate back to
Speaker 9: your health plan. And this is something that has been
Speaker 9: debated for years how much of the rebate gets passed through.
Speaker 9: Employers and other people who pay for healthcare have said
Speaker 9: we need to have one hundred percent of the rebates
Speaker 9: passed through. There's been this increasing pressure to kind of
Speaker 9: get all this money coming from the drug makers back
Speaker 9: to the people who are ultimately paying for the drug.
Speaker 10: Okay, so Tim mentioned that there are some new players around,
Speaker 10: How is this going down within the industry? Like this
Speaker 10: does seem like you know that there's an opportunity here
Speaker 10: to you know, maybe take advantage of consumers.
Speaker 3: But there are other approaches that you know are out
Speaker 3: there as options, right.
Speaker 9: So, I mean, one thing to know is that there's
Speaker 9: been a tremendous amount of consolidation in the market over
Speaker 9: the years. So there are now three main PBMs that
Speaker 9: control about eighty percent of the market.
Speaker 2: I hadn't realized have been around since the sixties. I
Speaker 2: don't know why I thought it was a newer thing,
Speaker 2: but forgive me good.
Speaker 9: Yeah, And they're also like those businesses are integrated with
Speaker 9: much larger companies that also own health insurance companies. You know,
Speaker 9: you have CVS Health, which owns ATNA, United Health, WHI
Speaker 9: tones Optimarx PBM signal, which tones Express Scripts PBM, So
Speaker 9: they have their arms in a lot of different businesses
Speaker 9: that are all related. There is growing competition in the
Speaker 9: PBM market. There are a lot of new entrants, a
Speaker 9: lot of new tech focused companies, companies that say they're
Speaker 9: you know, making more transparent offerings, but they're very small,
Speaker 9: and you know what traction they're getting is still you know,
Speaker 9: still to be seen because those three big players still
Speaker 9: dominate the market.
Speaker 3: Do you need a PBM?
Speaker 9: You know, the industry says that employers are not forced
Speaker 9: to contract for PBM services and they choose to do
Speaker 9: so anyway, and you know, that's that's their position. I
Speaker 9: think realistically, you know, there's there's not a clear alternative
Speaker 9: right now. If you're providing prescription drug coverage. This is
Speaker 9: sort of the avenue to do it. But with the
Speaker 9: blue how do it work?
Speaker 5: Before they became so dominant in.
Speaker 3: The nineteen sixties or before, like I don't.
Speaker 2: Know, like they have PBMs always had a role here.
Speaker 9: Well, I mean one thing is, you know, the role
Speaker 9: that prescription drugs play in healthcare has grown own incredibly
Speaker 9: in that period.
Speaker 11: Right.
Speaker 9: There are more new drugs, more expensive drugs every year.
Speaker 4: You know.
Speaker 9: In the nineteen sixties, I don't have it in front
Speaker 9: of me, but the prescription to spend was you know,
Speaker 9: much less than it is now. So part of this
Speaker 9: is like an evolution to you know, new innovation on
Speaker 9: the pharmacide that's very expensive here in the United States,
Speaker 9: where you know, we have a free market for healthcare
Speaker 9: and the drug makers can set their prices as high
Speaker 9: as they want, and so this is sort of an
Speaker 9: industry that's evolved in response to that. But you know,
Speaker 9: there are there are increasing questions around, you know, how
Speaker 9: it actually works and whether they are you know, whether
Speaker 9: they're clients the employers are fully capturing the value of
Speaker 9: the discounts that they get.
Speaker 10: Okay, So FTC has weighted into this and subpoena affiliates
Speaker 10: of PBMs called group purchasing organizations YEP. I don't usually
Speaker 10: think of the FTC. And you know, drugs being in
Speaker 10: the same place. I think usually more like kind of
Speaker 10: big tech crackdowns. But what is the FTC's interest here?
Speaker 9: So the FTC has subpoenaed the PBMs themselves and then
Speaker 9: these affiliates, the group purchasing organizations as well, you know.
Speaker 9: I think as a competition regulator they have and particularly
Speaker 9: under Lena Khan, they have sort of taken a close
Speaker 9: look at this industry. They're doing what is essentially a
Speaker 9: study of competition. So it's not you know, it's not
Speaker 9: an enforcement action. They're kind of gathering information and will
Speaker 9: presumably produce a report at some point, you know. But again,
Speaker 9: there has been a tremendous amount of consolidation in the
Speaker 9: industry I think, you know, and these are companies that
Speaker 9: have a lot of influence over what drugs are available. Well.
Speaker 2: And I also feel like rebates is a loaded word.
Speaker 5: It just says like.
Speaker 2: I'm getting a rebate, like something's got to be good
Speaker 2: about it.
Speaker 3: But when I hear rebate, I think to myself, Okay,
Speaker 3: this is, you know, a way to get you to
Speaker 3: buy something with the hope of you not actually cashing
Speaker 3: in this rebate.
Speaker 9: Well, the thing about a rebate is by the time
Speaker 9: you get it, you've already paid for it, right that
Speaker 9: you're not. It's not an upfront discount, although there are
Speaker 9: those two. It's you know so, And then what happens
Speaker 9: to those dollars when they do flow back to the plan.
Speaker 9: How much goes to the actual patient who paid maybe
Speaker 9: the full cost of the drug if they have a
Speaker 9: high deductible.
Speaker 2: That's what I wanted to ask you, executives from the
Speaker 2: three the three big PBMs, this is in your story,
Speaker 2: so that they pass almost all the rebates they receive
Speaker 2: from drug makers back to clients. But we don't really
Speaker 2: know that, do we well?
Speaker 9: Or do they They say they do, and in some programs,
Speaker 9: like in Medicare, there are regulations around requiring them to
Speaker 9: do that. But the other thing that we've sort of
Speaker 9: come to learn is that even as they say they're
Speaker 9: passing back almost all of the rebates or all the
Speaker 9: rebates in some cases, there's other money they are getting
Speaker 9: from drug makers that is not called a rebate. It's
Speaker 9: called a manufacturer administrative fee, or an inflation protection fee,
Speaker 9: or a data fee, or you know five or six
Speaker 9: other different terms that gow.
Speaker 5: My celfone trail?
Speaker 2: Is this what this is like like all these crazy
Speaker 2: little fills.
Speaker 9: Anyway, it sounds like it well, right, and so I
Speaker 9: mean one of the questions employers have is, you know,
Speaker 9: how much money are these companies making from pharma companies?
Speaker 9: And it's money that is tied to the prescriptions that
Speaker 9: you know, you and I are filling, right, and so
Speaker 9: where does that go? And that's sort of the big
Speaker 9: unanswered question in all of this.
Speaker 7: Where does it go?
Speaker 9: Where does it go?
Speaker 10: Yeah, there is a bipartisan interest in perhaps regulating this space.
Speaker 10: Is this one of those areas that everyone in DC
Speaker 10: actually gets along about.
Speaker 9: I think there is a lot of agreement. You know,
Speaker 9: we've seen bipartisan bills both in the House and in
Speaker 9: the Senate from several committees. You know, one thing, just
Speaker 9: the political context here is you know, last year in
Speaker 9: the Inflation Reduction Act, that took kind of a big
Speaker 9: swing at pharma because Medicare will be able to negotiate
Speaker 9: drug prices for the first time, and PBMs are sort
Speaker 9: of kind of next up in a way that you know,
Speaker 9: Congress has been looking at this industry pretty closely, and
Speaker 9: we'll see if there's action on that in this session.
Speaker 2: A great story, Our thanks to Bloomberg News healthcare reporter
Speaker 2: John Tazzi along with the editor of Bloomberg BusinessWeek, Jill Weber.
Speaker 2: More on this story available on our podcast feed and
Speaker 2: of course in the magazine out now, online, on newsstands,
Speaker 2: and of course always on the Bloomberg terminal.
Speaker 3: You're listening to Bloomberg Business Week. Up next, there's a
Speaker 3: major red flag looming over what's expected to be the
Speaker 3: biggest IPO of twenty twenty three, and it's the flag
Speaker 3: of the People's Republic of China.
Speaker 2: We break down the thirty five hundred word asterisk Kana
Speaker 2: ARMS prospectus when we come back is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app,
Speaker 1: or watch us live on YouTube cod Sprinka.
Speaker 2: She's writing all about Arms China challenge because in that
Speaker 2: three hundred and thirty page IPO prospectus, the company ARM
Speaker 2: spent more than thirty five hundred words explaining the risks
Speaker 2: it faces in China.
Speaker 5: It's a lot. Alex's technology reporter for Bloomberg News.
Speaker 2: She joins us on Zoom from LA I have to say,
Speaker 2: to be quite honest, when we went it crossed and
Speaker 2: we were all trying to read the filing and make
Speaker 2: sense of it, it was a little tricky and we
Speaker 2: all knew we needed some time.
Speaker 5: You spent the time to go through it, and what'd
Speaker 5: you find out?
Speaker 7: I did, and the kind of theme we saw at
Speaker 7: all the sections and these IPO perspectuses are are hefty documents,
Speaker 7: you said, three hundred and thirty pages. It's basically the
Speaker 7: first look for investors to get a real deep dive
Speaker 7: on this business since SoftBank took it private years ago
Speaker 7: and China, China, China kept popping up from that headline
Speaker 7: that Tom ran through a quarter of this business is
Speaker 7: in China through its partner in that region, Armed China,
Speaker 7: but also that there are a lot of risks around
Speaker 7: this China region if we take a step back a
Speaker 7: little bit. We've talked a lot about the geopolitical issues
Speaker 7: with China, particularly with the tech sector and with semiconductors
Speaker 7: in particular. The current presidential administration, Joe Biden and his
Speaker 7: team have taken a really kind of adversarial stance on
Speaker 7: making sure that the Chinese government their military doesn't get
Speaker 7: really sophisticated semiconductor chips, well armed designs. A lot of
Speaker 7: those chips, the chips that run servers AI technology, some
Speaker 7: of the most sophisticated stuff out there. They have more
Speaker 7: than two hundred and sixty customers. So for them, as
Speaker 7: they look at this market, which is a quarter of
Speaker 7: their business, they are now kind of dealing with these blockades,
Speaker 7: these export controls, and a lot of those risk factors
Speaker 7: were built into the risk section that they to at length.
Speaker 7: The other thing I would point out, aside from these
Speaker 7: kind of geopolitical tensions that are causing some of this
Speaker 7: risks around the China region, they also pointed out that
Speaker 7: China's economy is slowing. We've seen the numbers come down.
Speaker 7: We know that the economic engine over there has slowed
Speaker 7: a little bit. So on top of that, this really
Speaker 7: important market that investors are going to have a lot
Speaker 7: of questions about to get it to what some folks
Speaker 7: are saying is a lofty valuation, China seems to be
Speaker 7: the number one thing that jumped out at me.
Speaker 2: So china big customer is the Chinese government. Though, is
Speaker 2: there any investments in this.
Speaker 7: Company absolutely, So Armed China is a different business than ARM.
Speaker 7: ARM is the company that's listing on the US Stock Exchange,
Speaker 7: that is the one that filed this perspective. Armed China
Speaker 7: is basically treated as a regular customer. They do have
Speaker 7: the same ownership. SoftBank does own a significant steak, a
Speaker 7: forty eight percent steak in Armed China. But ARM warned
Speaker 7: and its IPO perspectives that this partner in China, they
Speaker 7: operate separately. They have no control over their business dealings.
Speaker 7: I'll also say there's been some drama with this company.
Speaker 7: This company's been pretty fraud if you're a semiconductor watcher.
Speaker 7: They had a CEO, Alan Wu, who in twenty twenty
Speaker 7: was fired for standing up a company that particular that
Speaker 7: potentially conflicts with the business he was running in Armed China.
Speaker 7: He refused to step down. The legal system in China
Speaker 7: ruled in favor of Armed China, but that kind of
Speaker 7: drama is still up for appeal, So there could be
Speaker 7: governance issues at this all important partner that ARM who's
Speaker 7: filing to go public in the US, has said they
Speaker 7: can't do business there without Armed China. So you have
Speaker 7: this kind of complex situation that when this company goes
Speaker 7: on its roadshow, when its soft bank backers, or going
Speaker 7: on its road show in September, as Bloomberg has reported,
Speaker 7: I can almost guarantee you that investors in the room
Speaker 7: are going to want to unpack with these details because
Speaker 7: this is such a hapty chunk their business.
Speaker 3: That was Alex Baranka, technology and social media reporter for
Speaker 3: Bloomberg News.
Speaker 2: That wraps up our first hour of the weekend edition
Speaker 2: of Bloomberg Business Week from Bloomberg Radio. Ahead, in our
Speaker 2: next hour, we get into the pre IPO world aka
Speaker 2: venture capital and the latest trends with the former chairman
Speaker 2: of Goldman Sachs Asset Management, Sheila Patel. She is now
Speaker 2: vice chair and general partner of the VC firm B Capital.
Speaker 3: We're talking trash and the massive environmental impact it has
Speaker 3: on climate change with the CEO of publicly traded Republic Services.
Speaker 5: We're really talking trash.
Speaker 3: That was a good interview, and later we'll get into
Speaker 3: why containing big tech means defending our civil rights and
Speaker 3: democracy in the process.
Speaker 2: Plus we'll actually lighten the mood for you all. Revisit
Speaker 2: the Ultra exclusive annual event for any gear head we're
Speaker 2: talking Monterey Carweek.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business App, and you you can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Jo Say Alexa play Bloomberg eleven thirty Blenny Ahead.
Speaker 2: In our second hour of the weekend edition of Bloomberg
Speaker 2: Business Week, including talking trash while actually talking about the
Speaker 2: trash business with the president and CEO of one of
Speaker 2: the giants in waste management, Republic Services, and safe to say,
Speaker 2: I think this.
Speaker 5: Was one of our favorite interviews of the week.
Speaker 3: Yeah, who knew talking trash was so fun?
Speaker 5: Carol, you had a lot of fun with this.
Speaker 3: Yeah, I'm like, I'm going to read a book about trash.
Speaker 2: Actually, Well, I know, as we're dividing things up more
Speaker 2: and more and more, so where does it go?
Speaker 5: That's what we talked about.
Speaker 3: In the meantime, AI is still all the rage, including
Speaker 3: when it comes to VC. We catch up on the
Speaker 3: venture capital translis Shila Ptel, Vice chairm General Partner of
Speaker 3: b Capital, and then we'll ask a cybersecurity entrepreneur, which
Speaker 3: megacap tech firms pose the biggest threat to our data privacy?
Speaker 5: Dun dun, duh.
Speaker 2: Stick around for that one plus what you may have
Speaker 2: missed it. Monterey car Week first.
Speaker 3: Up this hour. It's a dirty job, but somebody's got
Speaker 3: to do it, Carol.
Speaker 2: Average American throws out some four and a half pounds
Speaker 2: of waste every day, which comes two hundred and sixty
Speaker 2: eight million tons of waste nationwide each year. Thirty million
Speaker 2: tons of this waste is food, twenty seven million tons plastic,
Speaker 2: eighteen million tons is paper and paperboard, not all of
Speaker 2: which gets recycled.
Speaker 3: To him, we're talking trash, garbage, waste, call it whatever
Speaker 3: you want. We produce a lot of it. It's got
Speaker 3: a massive environmental impact. It contributes to climate change. It
Speaker 3: also raises the question, Carol, what do we do with it?
Speaker 3: And how can we be better about it?
Speaker 2: John vander Ark his president CEO of the forty six
Speaker 2: billion dollar market cap in publicly traded Republic Services based
Speaker 2: in Phoenix, stock is up about fourteen percent so far
Speaker 2: this year. Cascade Investments an investment vehicle and holding company
Speaker 2: for Bill Gates, of course, the co founder of Microsoft
Speaker 2: is the top shareholder in the company, with about thirty
Speaker 2: five percent of the outstanding stock. Listen, it's great to
Speaker 2: have you here and talk to us about the business,
Speaker 2: the bulk of which you know, contributes to what moves
Speaker 2: the balance sheet.
Speaker 5: Tell us give us some perspective.
Speaker 11: Well, we're actually an interesting we're kind of a backdoor
Speaker 11: view of the economy because every but he has something
Speaker 11: they need to dispose of. So we serve small you know, households,
Speaker 11: We serve small business, we serve large business, we serve
Speaker 11: national players, governments, so.
Speaker 3: We really get it.
Speaker 11: We have a very diversified book of business across our
Speaker 11: you know, almost fifteen billion dollars of revenue, and so
Speaker 11: that gives us a really good view of the economy.
Speaker 11: And we're very you know, spread out, and we're resilient obviously,
Speaker 11: because even in a down economy, everyone is still going
Speaker 11: to have something they're going to dispose of.
Speaker 2: So what's your view on the economy. Since you have
Speaker 2: such a good view and vantage.
Speaker 11: Point, we're still cautiously optimistic right the recession. We keep
Speaker 11: reading about it and hearing about it, and it's not
Speaker 11: really showing up in our p and l yet. Now
Speaker 11: I would say that it.
Speaker 2: Doesn't you say, because you're kind of resilient, but how
Speaker 2: do you pay?
Speaker 11: Yeah, you'd see some decline, right, you think about maybe
Speaker 11: a three to five percent drop in demand, right if
Speaker 11: an economy is really going to pull back and be
Speaker 11: in recession. So construction, for examples, portion of our business
Speaker 11: less than ten percent, but that's down about three percent
Speaker 11: year over year. So we saw that commercial residential start
Speaker 11: slow certainly into last year, and we kind of have
Speaker 11: a six to nine month lag effect on that. So
Speaker 11: that's down little bit. But you know, autos down a
Speaker 11: little bit in the first half, but then you know,
Speaker 11: the industrial side of the business is just booming.
Speaker 3: When do you need to what do you need to
Speaker 3: see in order to go from cautiously optimistic to optimistic.
Speaker 11: Well, listen, when I see housing starts, you know, kind
Speaker 11: of predicted to be up next year, I think that's
Speaker 11: you know, we'll probably slow a little bit on construction
Speaker 11: into the early part of the first half, but then
Speaker 11: we'll pick up in the second half. And listen, I
Speaker 11: don't I don't think all of the indices are fully
Speaker 11: accounting for some of the government spending that's coming in
Speaker 11: on infrastructure. Spend and we're certainly a beneficiary of that.
Speaker 11: So we're seeing that, you know, hit our business and
Speaker 11: again very very strong.
Speaker 2: So when you say the industrial side of your business
Speaker 2: is strong, give me a little bit more color on that.
Speaker 11: Yeah, two sides of Think about a major petrochemical player, right,
Speaker 11: you have a lot of things they need to dispose of,
Speaker 11: certainly some recycling, but special waste, haazardous waste, a lot
Speaker 11: of environmental services in the middle of that that we
Speaker 11: take advantage of that. Or think about a brownfield remediation,
Speaker 11: you know, opportunity where you know, we're in the front
Speaker 11: of the line there, we're doing that dirt clean up
Speaker 11: there and we're taking all all those materials and bringing
Speaker 11: those to the right spot.
Speaker 2: Which is the bigger part of your business?
Speaker 5: Give us an idea.
Speaker 2: Is it that side or is it just the regular trash?
Speaker 11: Yeah, it's a funny, funny business. It's about if you
Speaker 11: measure based on our customer account, which is fourteen million, yeah,
Speaker 11: it's ninety plus percent B two C.
Speaker 3: So you think about the.
Speaker 11: Homeowner where we actually service. If you measure where dollars
Speaker 11: change hands, it's more than ninety percent B to B
Speaker 11: because in most cities. The municipality contracts with us, and
Speaker 11: we consider that a business transaction.
Speaker 3: Talk to me about these contracts, the most competitors that
Speaker 3: you have in some markets, What does the competitive landscape
Speaker 3: look like, because you know, every market is completely different.
Speaker 3: I don't know if you've spent time in New York City,
Speaker 3: but the trash collection.
Speaker 2: Here is pasy, never problem. Never see it on the sidewalks.
Speaker 3: See, it's completely wild.
Speaker 2: How much of recycling is part of the business.
Speaker 11: It's a growing part of the business, kind of fifteen
Speaker 11: percent and growing. Yeah, and again we see that as
Speaker 11: a big growth driver. That solid waste is actually shrinking
Speaker 11: on a per capital basis.
Speaker 3: Okay, so is that a good thing?
Speaker 2: Is solid waste?
Speaker 11: Mean, that's garbage's industry talk for garbage. So garbage is
Speaker 11: shrinking on a per capita basis and recycling is growing.
Speaker 11: And listen, that's our plan. We're trying to drive that diversion.
Speaker 11: And you know, when I started ten years ago, people
Speaker 11: used to say, well, we make all our money at
Speaker 11: landfills because that was our highest margin business. And I'm
Speaker 11: a customer person. I said, landfills don't pass the time
Speaker 11: customers pass, and so you need to charge and understand
Speaker 11: what the product is worth. And that's what we've done.
Speaker 11: We've taken recycling pricing on the street to probably eighty
Speaker 11: percent of solid waste five years ago, it's now one
Speaker 11: hundred and twenty percent.
Speaker 5: What does that mean?
Speaker 11: And we've grown it faster?
Speaker 5: What does that mean?
Speaker 11: So, Matt, think about a small business and having two
Speaker 11: containers that the truck comes up and picks, you know,
Speaker 11: once a week or twice a week. Five years ago,
Speaker 11: the price of that recycling service was eighty percent of
Speaker 11: the price of the garbage service, and now we've flipped it,
Speaker 11: it's one hundred and twenty percent because we've priced recycling
Speaker 11: way faster and we've grown recycling faster.
Speaker 2: Does it also mean people want to be recycling people?
Speaker 11: We know we do the customer insight where people are
Speaker 11: passionate about recycling and they want to know it goes
Speaker 11: to the right spot?
Speaker 3: Does it though?
Speaker 11: In our case, absolutely right. That's part of our environmental responsibility,
Speaker 11: which is one of our values. And I would say
Speaker 11: most of the time, yes, there are always corner cases
Speaker 11: where some smaller operators not doing the right thing on
Speaker 11: the back end, but most of the time you can
Speaker 11: have pretty good insurance that if you're putting it in
Speaker 11: the bin, it's going to get recited.
Speaker 3: The issue over the last few years has been there
Speaker 3: isn't really those countries left to buy our recycling like
Speaker 3: China used to do. China is not doing it at
Speaker 3: the same rate that they used to. So where do
Speaker 3: these where do these plastics go?
Speaker 11: Yeah, when China kind of shut their doors, we went
Speaker 11: from about thirty five percent of our material going abroad
Speaker 11: to zero in about three months. And so what's happened
Speaker 11: is those value chains have really gotten repositioned. So there's
Speaker 11: a lot of domestic manufacturing that's come online, particularly for
Speaker 11: fiber and paper. So now our supply is almost entirely
Speaker 11: to memestic.
Speaker 3: What about plastic plastics.
Speaker 11: Is interesting, So most plastics today, rigid plastics get down cycled.
Speaker 11: So think of your water bottle, Think of your detergent
Speaker 11: bottle that goes into a pipe, park bench, or carpet.
Speaker 11: Now that's good, it's not going to go in the landfill,
Speaker 11: so it's going to get a second life. But after that, that's.
Speaker 3: Going to go in the landfill.
Speaker 11: So we're forward integrating into that. So to try to
Speaker 11: take that water bottle and get it back into food
Speaker 11: grete quality, and so it can go right back into
Speaker 11: a water bottle and then we think we can turn
Speaker 11: that at individual polymer six, seven or eight times before
Speaker 11: eventually it gets degradatory.
Speaker 2: Is it expensive to do that?
Speaker 11: Yeah, we're investing about three hundred million dollars to produce
Speaker 11: four of these centers across the US. The first one
Speaker 11: opens up in Vegas here in a few months, and
Speaker 11: we've contracted with Coca Cola, and listen, we could sell
Speaker 11: out of that center five times over. We had to
Speaker 11: limit people's buy on the back end because there's such
Speaker 11: a short supply for this recycled plastic.
Speaker 2: So go back to what Tim said, does it really
Speaker 2: get recycled? Because we have all gotten really good at
Speaker 2: dividing up our garbage in multiple ways, and the question
Speaker 2: is does it all really get recycled? Does the paper
Speaker 2: get recycled, does the plastic get recycled? What guarantee do
Speaker 2: we all have that it's being done?
Speaker 9: How do we know?
Speaker 11: Well, listen, not everything that you put in the recycling
Speaker 11: container is recyclable. Fair, right, So if you put the
Speaker 11: clamshell you might get at the grocery store that might
Speaker 11: be made with some recycled plastic, but it's not recyclable.
Speaker 11: And so one of the things that we're pushing on
Speaker 11: is working now back upstream to say, how do we
Speaker 11: get more things in the original form of pet or
Speaker 11: hdpe that's the water bottle, yeah, and the detergent bottle
Speaker 11: of milk jug so that it can get get recycled
Speaker 11: and keep getting recycled.
Speaker 3: I thought there was a little triangle on that. Yeah.
Speaker 11: If it has the triangle, yeah, that's made with post
Speaker 11: consumer content. It doesn't mean that particular thing is recyclable.
Speaker 11: So there's a huge opportunity for education here because consumers
Speaker 11: care and they want to do the right thing.
Speaker 2: I have to say, stand over my recycle I'm like this,
Speaker 2: does this really get recycled? If I clean it, is
Speaker 2: it gonna like go?
Speaker 3: You spend a lot of energy doing this.
Speaker 2: I actually do.
Speaker 11: I do care, empty, clean, and dry. Those are the simple.
Speaker 2: Rules, but not everything that has that thing not. Can
Speaker 2: we work on that messaging?
Speaker 3: Can I feel like I've been lied to for thirty years?
Speaker 4: You know?
Speaker 9: John?
Speaker 2: One thing I wanted to ask you is when we
Speaker 2: were talking about it off air, your company and waste
Speaker 2: management top players in this industry, both with ties to
Speaker 2: Wayne Haiseanga. How do you think about and you've been
Speaker 2: at your company for a decade or so, how do
Speaker 2: you think about the evolution of kind of how we
Speaker 2: collect trash.
Speaker 5: Where it was, where it's going the evolution.
Speaker 11: Sure, yeah, I can just tell it from my tenure
Speaker 11: we started. You know, when I started, we talked about
Speaker 11: ourselves as a garbage company, and then it was a
Speaker 11: waste company, and then it was a waste and recycling company,
Speaker 11: and then a recycling waste company, and now I environmental
Speaker 11: services and a sustainability company. And that's not just market
Speaker 11: that's just not marketing speak. That's actually where we were
Speaker 11: investing in the business. And again, I'm trying to challenge
Speaker 11: every ton that goes into a landfill, because hey, when
Speaker 11: I put in a landfill, it's a call to me.
Speaker 11: But if I can recycle it and reuse it and
Speaker 11: repurpose it, then I get a second benefit, a second
Speaker 11: stream from that. And so and by the way, landfills
Speaker 11: aren't being cited right that they're closing up, and so
Speaker 11: if I can extend the life of my landfill and
Speaker 11: I can get a second sale of that material. In
Speaker 11: addition to collecting. That's a win win.
Speaker 3: Many thanks to John vander Ark, President and CEO of
Speaker 3: Republic Services for joining us in our Bloomberg Interactive Brokers Studio.
Speaker 3: The full conversation is available on our podcast feed Up.
Speaker 2: Next, we talk challenges and opportunities in the venture capital
Speaker 2: space with b Capital Vice Chair Sheila Patel.
Speaker 3: You're listening to Bloomberg BusinessWeek. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app,
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Speaker 2: Tim This week, we saw Nvidia deliver a third straight
Speaker 2: sales forecast that's sur past Wall Street estimates. I mean,
Speaker 2: as you said at the top eblowout quarter. The chip
Speaker 2: maker's results fueled by demand for its AI processors.
Speaker 3: In Vidia saying sales will be about sixteen billion dollars
Speaker 3: in the three months that end in October. Analysts had
Speaker 3: estimated just twelve point five billion. That's according to data
Speaker 3: compiled by Bloomberg. In Vidia's results last quarter also blew
Speaker 3: pass projections, and the company approved an additional twenty five
Speaker 3: billion dollars in stock buybacks and Vidia.
Speaker 2: Shares hitting a record following the quarterly update. Now, the
Speaker 2: tech ferver hasn't quite reached every corner of the investing world.
Speaker 2: According to data last month from research firm Pitchbook, venture
Speaker 2: capital funding globally nearly halved in the first six months
Speaker 2: of twenty twenty three, highlighting a lack of investor interest
Speaker 2: in less demand and sharply higher interest rates. That's despite
Speaker 2: huge interest in AI startups sparked by the success in
Speaker 2: open AI's chat GBT.
Speaker 3: The investors port more than forty billion dollars into AI
Speaker 3: startups in the past six months. That's according to the data,
Speaker 3: including the ten billion dollar investment by Microsoft and open
Speaker 3: Ai and one point three billion dollars in funding for
Speaker 3: rival Inflection AI.
Speaker 2: All right, so let's get to it, because back with
Speaker 2: that to talk about what's going on when it comes
Speaker 2: to the VC world, and we're delighted to have her
Speaker 2: back with us. Sheila Patel. She's vice chair general partner
Speaker 2: of be Capital. She's former chairman of Goldman Saccesset Management.
Speaker 2: She's with us on Zoom from Park City, Utah. Shella
Speaker 2: nice to be talking with you again. Last time I
Speaker 2: think it was at the Milkin Institute Global Conference in May.
Speaker 2: How are you and talk to us about your world
Speaker 2: and how things have changed.
Speaker 12: I'm great, Thank you so much, and it's so great
Speaker 12: to chat with you again. You know, I think the
Speaker 12: world since Milkin has had some good news, had some
Speaker 12: rougher news, But overall, I think it's been a fascinating
Speaker 12: period to see how investor sentiment hasn't necessarily responded to
Speaker 12: some of the good news we're seeing on the economy
Speaker 12: and particularly among public companies on profits and so on.
Speaker 12: So there's a lot out there to look to. But
Speaker 12: as you pointed out in opening this, when it comes
Speaker 12: to venture, there are definitely some challenges and it'll be
Speaker 12: fun to chat about them with you.
Speaker 3: Well, let's talk about the challenges first, and then I
Speaker 3: want to talk about the opportunities. So it's been chopped
Speaker 3: waters certainly, given higher interest rates and pull back on funding,
Speaker 3: and we've seen some venture backed companies wealth cease to exist,
Speaker 3: cease to operate. It's a different world than it was
Speaker 3: in twenty twenty and twenty twenty one. What are the
Speaker 3: challenges that you're seeing at the capital Well.
Speaker 12: I think you know, along with the entire VC community,
Speaker 12: we certainly see challenges as you mentioned, in terms of
Speaker 12: investor interest, and I think institutional investors data a survey
Speaker 12: of about forty four LPs show that almost three quarters
Speaker 12: would allocate less to VC next year. Now, many of
Speaker 12: them have been strong allocators and supporters, and I think
Speaker 12: they'll be back, but I think there's definitely concern overvaluations,
Speaker 12: and that's where sometimes challenging news can end up being
Speaker 12: good news. We've been very fortunate in being able to
Speaker 12: raise our latest fun Growth Fund three and beat our
Speaker 12: goals with that, and you have seen several VC firms,
Speaker 12: particularly some of the largest, have some success raising money
Speaker 12: because of those other themes that you mentioned, the interest
Speaker 12: in AI, the focus on areas where tech really can
Speaker 12: be additive in up and down markets, and that in
Speaker 12: many cases is enterprise and fintech, which are areas in
Speaker 12: which the capital operates. So I think there's some high points,
Speaker 12: but in particular, investors are looking to really make sure
Speaker 12: that the people they give money too are focused on
Speaker 12: these questions of valuations, and that's where the data has
Speaker 12: really been stark, and is the opportunity, maybe the silver
Speaker 12: lining to the cloud, so to speak, because valuations have
Speaker 12: come in and it means there are great opportunities to
Speaker 12: find good tech companies at much more reasonable and appropriate valuation.
Speaker 2: Hey, Sheila, is AI actually helping you guys find better
Speaker 2: opportunities right now and able to go through maybe a
Speaker 2: lot more deals and figure out what really makes sense? Yeah.
Speaker 12: I think applying AI to deal flow and to analysis
Speaker 12: goes hand in hand with looking at how our companies
Speaker 12: are using AI. And certainly I would say it's been
Speaker 12: an amazing partnership talking about AI with our strategic partner BCG.
Speaker 12: When you look at the work that BCG is put
Speaker 12: in at all levels of Corporate America and global corporates
Speaker 12: and thought about how to apply AI to solving some
Speaker 12: of the problems they're facing. It has really helped us
Speaker 12: take it in house and think about ways to apply
Speaker 12: it in our own investing and our application of analyzing
Speaker 12: potential portfolio companies.
Speaker 2: But I guess what I'm also wondering too, has something
Speaker 2: fundamentally It's interesting to hear what you say about, you know,
Speaker 2: investor interest.
Speaker 5: When it comes to VC.
Speaker 2: Is there something fundamentally structurally going on? We talk a
Speaker 2: lot about I know, I think we did it milk,
Speaker 2: you know, the private credit markets and the amount of
Speaker 2: money that's out there. I mean, is there something structurally
Speaker 2: fundamentally going on that's changing the VC world or is
Speaker 2: it like it was, like it's always been.
Speaker 12: Yeah, Look, I actually I guess I'll I'll put my
Speaker 12: longer term hat on it. To me, is the maturation
Speaker 12: of a segment of investing, just like we've seen other
Speaker 12: areas go through. There was a moment when index investing
Speaker 12: was young and new, and some crazy you know, evaluation,
Speaker 12: some crazy structures, lots of things went on, and now
Speaker 12: it's a typical part of people's investment at portfolios. I
Speaker 12: think when I look at venture and I compare it
Speaker 12: to the history my twenty years at Goldman, my thirty
Speaker 12: years in the industry, and watching various areas come into
Speaker 12: their own, such as quant even hedge funds and private equity.
Speaker 12: They go through a maturation process, and I think it's
Speaker 12: a natural evolution to me, you know, I look at
Speaker 12: venture and maybe it's because I'm one of the old
Speaker 12: people in venture.
Speaker 9: That's how young an.
Speaker 12: Industry it is. It's filled with amazing technology experts, but
Speaker 12: maybe you haven't seen as many market cycles, and at
Speaker 12: the end of the day, BC has to perform the
Speaker 12: same as other areas, and that maturation is part of
Speaker 12: why you see some funds able to cope with the
Speaker 12: changing environment, the same as you see some portfolio companies
Speaker 12: coping better with a more difficult funding environment.
Speaker 3: So talk to me about two opportunities in two senses
Speaker 3: of the word. One geographically, where are you deploying money?
Speaker 3: And then also what types of companies excite you right now?
Speaker 12: Sure, well, maybe I'll start with the last first, because
Speaker 12: I think it ties into that question of AI. I
Speaker 12: think that we spend so much time and maybe this
Speaker 12: is a trend in general on the downside of certain
Speaker 12: technologies or of things in general, that the upsides sometimes
Speaker 12: get missed. And when I look at AI, I look
Speaker 12: at the way a can turbo boost drug discovery and
Speaker 12: research in areas that will be really important in a
Speaker 12: climate changing world, like crop protection. So a company like
Speaker 12: atom Wise, which is one of our portfolio companies, a
Speaker 12: small molecule expert partnering with the world's leading pharmaceuticals, biotechs
Speaker 12: agrochemical companies to discover new ways and new treatments, whether
Speaker 12: drug treatments or whether crop protection, etc. So I think
Speaker 12: that's an incredible area for focus for AI is drug discovery.
Speaker 12: Small molecule work can go beyond medications into other applications,
Speaker 12: industrial applications. That's amazing to me. And then you know,
Speaker 12: when I think about that broader question on opportunity, I
Speaker 12: think that what we have to look to is the
Speaker 12: longer term prospect for some of these companies. When you
Speaker 12: have a lower valuation to start with, and that means
Speaker 12: from an investor perspective, you want to be sure where
Speaker 12: the challenging valuations, you're challenging companies on the levels they're
Speaker 12: looking to raise.
Speaker 3: That's Sheila Pttel, former chairman of Goldman's Accesset Management, now
Speaker 3: vice chair and general partner of B Capital, still.
Speaker 2: To come on Bloomberg Business Week. What we're giving up
Speaker 2: as investors keep uping their bets on Silicon Valley's biggest
Speaker 2: names are privacy.
Speaker 13: We're now in a situation where, especially larger tech companies
Speaker 13: are really just over collecting so much information about us.
Speaker 13: And you know, in the past, you know, companies like
Speaker 13: Standard Oil were powerful, but they didn't know everything about us,
Speaker 13: and that's that was the really when seeing the hacks
Speaker 13: and seeing all the status slashing around really made me say,
Speaker 13: uh uh, something's going on here.
Speaker 3: Entrepreneur and investor Tom Camp details his playbook for containing
Speaker 3: big tech while also protecting our civil rights. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 3: Well, Carol, I'm reading a book right now. Actually, Jason Kelly,
Speaker 3: your former co anchor here on Blueberg Business So he
Speaker 3: recommended it to me. I got it. He recommended it
Speaker 3: to me a couple of years ago. I'm a little
Speaker 3: behind it. I bought it that on my kindle. Recently
Speaker 3: I'm getting around for reading it. It's called The Averet's
Speaker 3: by Dave Aggers. It takes place in a not so
Speaker 3: distant dystopian future where one single, huge tech company pretty
Speaker 3: much controls everything from social media to e commerce to search.
Speaker 5: Wait aren't we Oh no, sorry.
Speaker 3: Well that's a good question. Here's the thing. Almost everyone
Speaker 3: lives under constant surveillance, their cameras everywhere, people broadcast their
Speaker 3: entire lives. Everybody's on their best behavior lest they be
Speaker 3: caught on camera saying the wrong thing or not recycling.
Speaker 5: Oh my what?
Speaker 3: Yeah?
Speaker 2: All right, So, given we're technologies today, it's actually not
Speaker 2: that hard of a future to imagine, and perhaps our
Speaker 2: next guest is trying to prevent the world from emerging
Speaker 2: that specific world.
Speaker 5: So we've got with us Tom Keapp.
Speaker 9: Yeah.
Speaker 3: He's the author of a new book containing big Tech
Speaker 3: How to protect our civil rights, economy, and democracy. He's
Speaker 3: also co founder of the cybersecurity firm Centrify. It's now
Speaker 3: called Delinea. It was bought by Toma Bravo back in
Speaker 3: twenty nineteen and later by TPG. He's volunteered on the
Speaker 3: Biden Harris Tech Policy Team. He did that in twenty twenty.
Speaker 3: He worked with advocacy groups for years on legislation around
Speaker 3: consumer privacy and data protection. He joins us on Zoom
Speaker 3: from Menlo Park, California. I want to know at the
Speaker 3: specific moment that you realized that you thought that big
Speaker 3: tech needed to be contained.
Speaker 13: Well, my last company was Centrify, and it's cybersecurity, and
Speaker 13: we saw all these hacks coming in and it really
Speaker 13: became clear that when a couple couple of these companies
Speaker 13: got breached, just the incredible amounts of data that was
Speaker 13: being accessed by the bad guys. It really got me
Speaker 13: to appreciate that we're now in a situation where especially little,
Speaker 13: larger tech companies are really just over collecting so much
Speaker 13: information about us. And you know, in the past, you know,
Speaker 13: companies like Standard Oil were powerful, but they didn't know
Speaker 13: everything about us, and that's that was the Really when
Speaker 13: seeing the hacks and seeing all this data slashing around
Speaker 13: really made me say, uh uh, something's going on here.
Speaker 5: All right, Tom, I'm going to put it out there.
Speaker 5: I'm going for a headline here.
Speaker 2: But is it like climate change or maybe like climate change,
Speaker 2: that we might just be too late, that this train
Speaker 2: has definitely left the station.
Speaker 13: You know, I think we actually because it's bits and
Speaker 13: bytes versus the sky and clouds and the earth rotating
Speaker 13: and trees and all that stuff, I think we can
Speaker 13: actually control it. I Mean, the fundamental issue is in
Speaker 13: the US, we don't have a federal privacy law, right,
Speaker 13: we don't have rights over our data the right to
Speaker 13: know what's being collected about us, the right to say
Speaker 13: no and say please don't sell or share my data,
Speaker 13: or the right to correct or right to delete. So
Speaker 13: I do think that we could really make some significant
Speaker 13: strides and be able to govern our information. And if
Speaker 13: we don't, frankly, it is going to get worse with
Speaker 13: AI because then all of a sudden, our data, and
Speaker 13: a lot of it's our personal data, kind of becomes
Speaker 13: part of this big blender of AI utilizing our data
Speaker 13: to create other things as well. And we worry about copyrights, right,
Speaker 13: so what about our data?
Speaker 2: Well, what about do we follow the lead of what's
Speaker 2: going on in Europe? And I think about the GDPR, right,
Speaker 2: the General Data Partition Regulation that's out there that really
Speaker 2: does push for privacy protections and security of personal data.
Speaker 2: Is that what we need here in the United States specifically?
Speaker 2: Is that what you're kind of pushing for.
Speaker 13: Well, actually we've done it here in California. So I
Speaker 13: mean you're referring to Europe's privacy law and people call
Speaker 13: it the Brussels effect, but California we've historically had the
Speaker 13: California Effect. It first started with auto emissions and consumer
Speaker 13: protection around car safety, et cetera. And then California in
Speaker 13: nineteen seventy two actually put privacy as an inalienable right
Speaker 13: into our constitution, and from a privacy and cybersecurity perspective,
Speaker 13: we were the first state to actually pass a data
Speaker 13: breach notification law right and we are and have been
Speaker 13: the first state with the most comprehensive privacy law. So
Speaker 13: I think California actually has a better model where it's
Speaker 13: able to balance innovation with the tech players, but also
Speaker 13: give consumers some basic rights over their data and how
Speaker 13: it's used.
Speaker 3: Tom, you're also a seed investor in many startups right now.
Speaker 3: They include companies with names like Sakoovi, Privacy Code, Trusted Twin,
Speaker 3: Ivy Technology, share Id, Sunday Security, Surf Security, Holistic AI.
Speaker 3: The list goes on the cynic and perhaps somebody would say, well,
Speaker 3: wait a second, this guy's has this agenda because he's
Speaker 3: invested in a lot of companies that want to take
Speaker 3: on the big guys. He's invested in a lot of
Speaker 3: companies that would benefit from company from having stricter data
Speaker 3: protection laws here in the US. What would you say
Speaker 3: to that.
Speaker 13: Well, I'm back, maybe this is a bad analogy, but
Speaker 13: al Gore. You mentioned climate change. You know, he was
Speaker 13: talking about climate change for years and then you know
Speaker 13: he was having difficulties trying to get things past for
Speaker 13: from a policy perspective, but so he wanted to have
Speaker 13: change done. So he started joining boards and he's on
Speaker 13: the board of Apple, but he's also involved in climate funds.
Speaker 13: So everything that I've been talking about as it relates
Speaker 13: to privacy in the book is things that are written
Speaker 13: years ago, well before I actually started doing any investing,
Speaker 13: and so I'm trying to put my time and effort
Speaker 13: into making changes. And what I'm doing with my investments
Speaker 13: is actually trying to empower consumers to better secure them
Speaker 13: and protect themselves. So my investments tend to be more
Speaker 13: consumer centric and trying to help stop identity theft or
Speaker 13: help people get better control over their privacy as well.
Speaker 13: But I've been completely consistent. I have a blog that's
Speaker 13: been out there for years. I've talked about these things.
Speaker 13: I was a full time volunteer on Proposition twenty four
Speaker 13: in California, and it wasn't only to just relatively recently
Speaker 13: that I've been complimenting and supplementing this. But I've been
Speaker 13: completely consistent in my advocacy of better cybersecurity, better privacy
Speaker 13: for you, me and other people as well. And so yeah,
Speaker 13: that's I mean, people can say that, you know, but
Speaker 13: the record shows that I've consistently been talking about this
Speaker 13: and proposing this for years.
Speaker 2: Well, and on what you said, if we go along
Speaker 2: with what you kind of said in akin to what
Speaker 2: we saw with al Gore, he was right in terms
Speaker 2: of the concerns about climate change. And so if we
Speaker 2: had all paid a lot more attention, maybe we wouldn't
Speaker 2: be kind of in the world we are today.
Speaker 5: If you are right about.
Speaker 2: Your concerns and we ignore them in terms of cybersecurity,
Speaker 2: where could that what's the dark scenario, the dystopian scenario
Speaker 2: of all of this data accumulate, accumulation on all of
Speaker 2: us in the hands of a few big tech companies.
Speaker 13: Well, you know, look, historically the large tech companies their
Speaker 13: business models was advertising. And for us, we made that
Speaker 13: trade off to say, Okay, I'm going to give you
Speaker 13: all this data, you're gonna give me these free services.
Speaker 13: And then what happened was that, you know, we started
Speaker 13: shopping for a red dress or red basketball shoes, and
Speaker 13: then all of a sudden, for the next seven weeks,
Speaker 13: every web page had that red dress or those red
Speaker 13: basketball shoes. It was creepy.
Speaker 2: Try being a journalist and like researching a company that
Speaker 2: we're gonna have on a guest that does something like
Speaker 2: men's underwear and then we're getting it.
Speaker 5: Sorry anyway, go ahead.
Speaker 13: That is it's creepy. But the problem is is that
Speaker 13: we are now in a post abortion rights America where
Speaker 13: stuff that we did before is actually illegal in some states,
Speaker 13: or there's data like you know, there's all these issues
Speaker 13: about trans and so the information and that type of
Speaker 13: data is now actually can be used against people because
Speaker 13: before it was off to advertisers, but it could be
Speaker 13: offered to people to harass or discriminate against people as well.
Speaker 13: And so but even if you just step even further back,
Speaker 13: I mean, the reality is is that this data is
Speaker 13: being collected about us as adults. And yeah, maybe we
Speaker 13: can navigate around some of the rabbit holes or not
Speaker 13: disregard these ads, but what about our kids. There's no
Speaker 13: differentiation if our kids are on the keyboard versus us
Speaker 13: on the keyboard, and I think that's fundamentally unhealthy. So yes,
Speaker 13: I think that the actors have figured out how to
Speaker 13: start weaponizing this data that historically has been used for advertising.
Speaker 3: A big thanks to Tom Camp. He's the author of
Speaker 3: a new book containing big Tech How to Protect our
Speaker 3: civil rights, economy, and democracy. And check out our podcast
Speaker 3: feed for more on AI in the corporate world and
Speaker 3: how Tom Camp says those megacap tech companies, specifically Alphabet
Speaker 3: and Meta are collecting information that could compromise their users
Speaker 3: down the road.
Speaker 2: Speaking of the road, you're listening to Bloomberg Business Week
Speaker 2: coming up spending thirty million bucks without really trying.
Speaker 3: We go behind the wheel with our own auto guru,
Speaker 3: Hannah Elliott at Monterey Carweek. This is Bloomberg.
Speaker 1: If you're listening to the Bloomberg Business Week podcast, catch
Speaker 1: us live weekday afternoons from three to six Eastern Listen
Speaker 1: on Bloomberg dot com, the iHeartRadio app, and the Bloomberg
Speaker 1: Business app, or watch us live on YouTube.
Speaker 2: Speaking about money, if you happen to have a spare
Speaker 2: at thirty million dollars lying around, there are a few
Speaker 2: things you could do.
Speaker 5: I could take a lot of.
Speaker 2: Really nice vacations, a lot of really nice vacation be
Speaker 2: a lifetime of nice vacations. You could buy some pretty
Speaker 2: great second, third, and fourth homes. Maybe fill up the
Speaker 2: five twenty nine for your kids. Sounds like Tim roate this, Yep,
Speaker 2: I did, and grandkids so they won't have to worry
Speaker 2: about paying for college. I mean, there's a lot you
Speaker 2: could do with thirty million dollars.
Speaker 3: Or or you could buy just one single Rolls Royce
Speaker 3: Droptael after all, only four of them will be made.
Speaker 3: And I use this thirty million dollar price tag. I
Speaker 3: use that really loosely. Yeah, because we don't actually know
Speaker 3: how much it's going to cost. But it costs, you know,
Speaker 3: it's like twenty eight million was one a few years ago.
Speaker 3: Thirty million, it's like how much it costs to make.
Speaker 3: So it's going to be around that area, you know, Carol,
Speaker 3: if you have to ask, you can't afford it.
Speaker 5: Oh, I sound like my mother. All right, So let's
Speaker 5: get to it.
Speaker 2: Hannah Elliott's with US autocolumnist for Bloomberg Pursuits. She was
Speaker 2: at the Monterey Car Week.
Speaker 5: She was there.
Speaker 2: She writes not just about Rolls Royce's latest in it's
Speaker 2: coach built series, but also the electric hypercars and hydrogen
Speaker 2: SUVs that she saw. She's on zoom in La. Let's
Speaker 2: get to it, Hannah. First of all, this is the
Speaker 2: car show I feel like to go to tell us
Speaker 2: about it.
Speaker 12: Hi, guys.
Speaker 6: Yeah, I have to say Monterey Car Week is definitely
Speaker 6: the new car show. When I say new, I mean
Speaker 6: it has taken the place of like the Detroit Auto
Speaker 6: Show or the New York Auto Show in terms of
Speaker 6: important sport new car debuts. Like that thirty million dollar
Speaker 6: Rolls Royce that you described. It's the place to be
Speaker 6: both for industry and for enthusiasts and collectors. I have
Speaker 6: to say. And yet, that droptail is incredible. I think
Speaker 6: you know, it's well over thirty million according to my
Speaker 6: source at Rolls Royce, who didn't want to specify, but said,
Speaker 6: you know, it's definitely more than thirty and kind of
Speaker 6: a car designed from scratch. Basically that's what thirty million gets. Ye,
Speaker 6: thirty million plus.
Speaker 5: Can you talk about it?
Speaker 2: It is gorgeous And of course you know we're on
Speaker 2: YouTube and Bloomberg Originals, so we'll show some pictures for
Speaker 2: those folks, but for those on radio, I mean, just
Speaker 2: tell us about it.
Speaker 4: Yeah.
Speaker 6: So this is part of Rolls Royce's Coach Built series
Speaker 6: This is the third vehicle in this series. It started
Speaker 6: with the Sweptail in twenty seventeen and then the boat
Speaker 6: Tail in twenty twenty one. You might remember those. This
Speaker 6: Droptail is the third and what Coach Built means is
Speaker 6: Rolls Royce selects some of their most enthusiastic buyers and
Speaker 6: collectors and says to them, basically, we will design whatever
Speaker 6: car you want. Now they're going to They use the
Speaker 6: same V twelve engine that is found in the Rolls
Speaker 6: Royce Ghost, but aside from that, it's kind of whatever
Speaker 6: the client wants. The car is mostly shown as a roadster,
Speaker 6: but it does come with the hard top made out
Speaker 6: of carbon fiber. So it's a lot of car.
Speaker 3: Tell us about one more car that you saw.
Speaker 6: Okay, this is the other end of the spectrum and
Speaker 6: you're going to be surprised. But I want to talk
Speaker 6: about the Ford Mustang GTP. This was kind of a
Speaker 6: choker because Ford isn't always at Monterey, but they brought
Speaker 6: eight hundred power V eight Mustang that costs over three
Speaker 6: hundred thousand dollars, which is a lot for Mustang. It's
Speaker 6: getting a lot of buzz. Of course, Mustang is you
Speaker 6: know the original American pony car, so there's a lot
Speaker 6: of enthusiasm behind it, and Musting is Ford has said,
Speaker 6: we're going straight after Porsch with this car, so we'll
Speaker 6: see if they can pull it off.
Speaker 3: That was Bloomberg Pursuit's Auto column. This Hannah Elliott and
Speaker 3: for the classic car lovers, do not worry. There were
Speaker 3: some old school cars driving around in Monterey last weekend,
Speaker 3: Hannah telling us about a nineteen sixty four Ferrari. It's
Speaker 3: sold at auction for a cool thirty million bucks. So
Speaker 3: Carol a little something for everyone, as long as everyone
Speaker 3: brings big bags of money.
Speaker 5: Buckets, buckets and buckets.
Speaker 9: Hey.
Speaker 2: Check out her story online to some great pictures and
Speaker 2: the full rundown of some of the highlights that she
Speaker 2: saw while there. That wraps up the weekend edition of
Speaker 2: Bloomberg Business Week from Bloomberg Radio. Thank you so much
Speaker 2: for joining us.
Speaker 3: Be sure to tune into Bloomberg Business Week Monday through Friday.
Speaker 3: It starts at three pm Wall Street Time on Bloomberg
Speaker 3: Radio and on SiriusXM channel one nineteen.
Speaker 2: You can also watch our daily broadcast on YouTube. Just
Speaker 2: search Bloomberg Global News orsemplecast on Bloomberg Originals, available at
Speaker 2: Bloomberg dot com, Slash Originals, and streaming platforms such as Roku, Amazon, fireTV,
Speaker 2: Samsung TV Plus and more.
Speaker 3: Find our Bloomberg BusinessWeek podcast at Bloomberg dot com, Apple,
Speaker 3: or wherever you get your podcasts. The latest edition of
Speaker 3: the magazine is available on newsstands now, at Bloomberg dot
Speaker 3: com and always on the Bloomberg terminal. I'm Tim Stenebeck.
Speaker 5: Did you buy the thirty million dollars?
Speaker 3: I did not, just check it.
Speaker 5: I'm Carol Massler. Have a good and safe weekend. Everyone.
Speaker 5: Stay with us.
Speaker 2: Today's top stories and global business headlines are coming up
Speaker 2: right now