Speaker 1: This is Bloomberg business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Masser and Tim Stenebec from Bloomberg Radio
Speaker 1: Cross I'm the taxman. Yes, I'm the taxman. All right, everybody. Yeah,
Speaker 1: We're going to talk about the taxmen and women that
Speaker 1: are out there, truant taxpayers, decrepit technology, and a broken
Speaker 1: system that former IRS tax auditors say that cannot be
Speaker 1: fixed with the eighty billion dollars it's been allocated by
Speaker 1: federal government to do just that. This story found online
Speaker 1: up Bloomberg dot com slash BusinessWeek and on the Bloomberg
Speaker 1: and at Bloomberg dot com slash business Week. I said
Speaker 1: that twice on the Bloomberg terminal. It's that kind of
Speaker 1: a day anyway. It's not like I'm going to get
Speaker 1: an audit or something and I'm freaking out here with Moore.
Speaker 1: Let's get to it. Bloomberg News Wealth reporter benst We'm
Speaker 1: an incredible deep dive along with the editor of Bloomberg
Speaker 1: Business Weekte Webber here in our Bloomberg Interactive Broker Studio. Yeah,
Speaker 1: that would scare the heck out of me. Audens coming
Speaker 1: they got eighty billion dollars to play with at the RSUM.
Speaker 1: But actually, what we set out to find in this
Speaker 1: story with Ben Steberman at the HELM was, you know,
Speaker 1: what's it really like to work there? How bad is it? Really?
Speaker 1: We know it's bad, that's a given, but like, really, really, really,
Speaker 1: how about is it? And you know, if you were
Speaker 1: to fix it or to you know, give some pointers
Speaker 1: to people normal Americans, what would those fixes and pointers
Speaker 1: be and would you find? Ben? What I found was
Speaker 1: that part of the issue here is money. Obviously, UM
Speaker 1: this these are folks who have been suffering through decades
Speaker 1: of budget cuts. UM it's the agency is a shadow
Speaker 1: of its former self in a lot of ways. It's
Speaker 1: probably the worst funded government agency. UM. Technology doesn't work.
Speaker 1: UM systems crash. They're running on nineteen sixties computer programming languages.
Speaker 1: It's just basic analyses or is that like cards? Like
Speaker 1: what is it? Sorry I don't know the name of
Speaker 1: the language, but yeah, it's like one of these things
Speaker 1: where you need special training to uh, well they have
Speaker 1: they have these like veterans who like learn this stuff,
Speaker 1: and um, it's not very applicable to other software tech companies,
Speaker 1: and so it's it's bad and money can help, But
Speaker 1: there's also a culture problem. There's a culture shift that
Speaker 1: needs to happen there because this is like, this is
Speaker 1: an agency that's been demonized for fifty years and they
Speaker 1: have this bunk immortality and they have a really hard
Speaker 1: time even communicating with the public or or had to
Speaker 1: call that IRS. I understand what they're demonized. Yeah, and yeah,
Speaker 1: there's this credible loyalty that you kind of discovered among
Speaker 1: the people who have worked there. A lot of a
Speaker 1: lot of the people you spoke to were farmers, and
Speaker 1: that just really stuck out to me. It was like, yeah,
Speaker 1: you know, you bludgend the heck out of an agency
Speaker 1: that until it's like despised, and yet the people who
Speaker 1: are there, like I feel like they're like clinging to
Speaker 1: each other almost. Yeah, it's like they're like bonding in
Speaker 1: the trenches. Maybe. But I think what realized what surprised
Speaker 1: me maybe was I think because of the demonization, there's
Speaker 1: a sense that like an IRS auditor, Oh, there's somebody
Speaker 1: who would be like politically motive, seemed politically motivated or
Speaker 1: or like might want to squeeze tax the rich taxpayers.
Speaker 1: I mean, maybe that's why you go into it, because
Speaker 1: you get to like take rich people down a peck.
Speaker 1: I didn't get any of that vibe. In fact, what
Speaker 1: I got from these people is that they're big tax nerds,
Speaker 1: Like they just love the tax code. And there's something
Speaker 1: really fun about if you're if you are a tax
Speaker 1: nerd of like being in government service and working on
Speaker 1: that and the hours are saying it's a union shop,
Speaker 1: retirement benefits are good, Like, so all you have to
Speaker 1: do is understand this really complicated deck code. Yeah, it
Speaker 1: just gets more and more complicated, right, And also like
Speaker 1: be kind of embarrassed to tell people where you work.
Speaker 1: And I'm only saying that because you put it in
Speaker 1: your story. So this is this is editorially sound, but
Speaker 1: like that's kind of a tough pill to swallow. Yeah,
Speaker 1: So when multiple people told me, I kept asking, what
Speaker 1: do you tell people if if they ask you what
Speaker 1: do you do at a party and they're they're like, oh,
Speaker 1: I'm an accountant or I work at the Treasury Department.
Speaker 1: They had Also everybody had like a different strategy for
Speaker 1: like basically killing the conversation and not basically trying to
Speaker 1: trying to sound boring, and so people move on to
Speaker 1: a different conversations. Right, But everything's going to change, right.
Speaker 1: Eighty billion dollars, Well, they have a new commissioner. They
Speaker 1: do have eighty billion for now. Republicans in the House
Speaker 1: at least would like to send a lot of that money,
Speaker 1: especially for enforcement. They're probably not going to get their way,
Speaker 1: at least in the next couple of years, but we'll see.
Speaker 1: But yeah, they need to hire a lot now, and
Speaker 1: that's a challenge. I mean, the onboarding process can take months.
Speaker 1: And also they're paying government a government pay scale, and
Speaker 1: they're competing against the private sector, which obviously unemployment is low.
Speaker 1: And if you have some tax skills, you can make
Speaker 1: a lot more money by going to an accounting for
Speaker 1: a metal law firm. But one thing I don't understand
Speaker 1: is that it's important like how many tax sheets are there?
Speaker 1: Are there estimates because I would think that a very
Speaker 1: rigorous IRUs would be a good thing in terms of
Speaker 1: bringing tax revenue, justify revenue in part of the goal here, right,
Speaker 1: it's like you maybe modernize this place and let them
Speaker 1: do the job that they're supposed to be doing exactly correct.
Speaker 1: SAT spot they can hire that could maybe help them out.
Speaker 1: So there is one study that the IRIS does and
Speaker 1: it just came out. They do it every every few years.
Speaker 1: They found that almost five hundred billion dollars is missing
Speaker 1: compared to you know, if you compare what is owed
Speaker 1: to what is actually paid. They think it's peggeted about
Speaker 1: five hundred billion. But that is an estimated that is
Speaker 1: several years old. It is based on random audits that
Speaker 1: might not be conducted very well. They're they're not. That
Speaker 1: doesn't include crypto, it doesn't include all sorts of offshore
Speaker 1: game playing that that could be happening. So there are
Speaker 1: people who think, like academics, who think that much much
Speaker 1: more money could be hidden from the IRS by wealthy
Speaker 1: people in business owners. To be clear, like salaried workers
Speaker 1: like you and me find it very difficult, if not impossible,
Speaker 1: to cheat because our income is reported directly to the IRS,
Speaker 1: and that that matching software is actually very simple. What
Speaker 1: they want to develop is some kind of AI and
Speaker 1: machine learning and really crunch the data on what's going
Speaker 1: on with investment flows and wealthy people and try to
Speaker 1: find cheaters that way. UM and and be much more sophisticated,
Speaker 1: sophisticated about who they audit in the first place. Okay,
Speaker 1: so you actually did get to talk to some people
Speaker 1: who had recently joined the agency and recently left the
Speaker 1: AGE and then yes, yes, so what was their experience
Speaker 1: like because uh, you know they came in for maybe
Speaker 1: different reasons, but you know these are these are new
Speaker 1: hires and new exits, right, so what was their experience? Yeah,
Speaker 1: so you know you could argue that, well, one of
Speaker 1: my sources did argue that auditing is basically the toughest
Speaker 1: job you can possibly imagine. I mean, you're going in
Speaker 1: there and you're trying to figure out is there something
Speaker 1: like you're investigating somebody based on their tax return and
Speaker 1: that could be thousands of pages, and then you're comparing
Speaker 1: that with the tax code and that can be that
Speaker 1: is like tens of thousands of pages, Like how do
Speaker 1: you find how do you find that? In the beginning
Speaker 1: with UM so, unfortunately the last few years, especially with
Speaker 1: the pandemic, it's really been hard to bring people on
Speaker 1: and train them in that and training virtual training in taxes,
Speaker 1: like can you imagine? It's so apparently they have very
Speaker 1: good instructors, but um, you think that it would be anyways,
Speaker 1: I am. I was in awesome of these stories these
Speaker 1: people told about coming in and basically it's sink or swim,
Speaker 1: and they sunk like it was really hard. It was
Speaker 1: emotionally stressful to deal with taxpayers, especially low income taxpayers
Speaker 1: who are it's often connected with health issues, financial issues
Speaker 1: like poor people. Um, and then all the way up
Speaker 1: to the higher I've been thinking about everything there about
Speaker 1: Jamie Lee Curtis is an or and it's like so sad,
Speaker 1: but I mean we've been joking. But in all seriousness,
Speaker 1: you do profile people who talk about going into people's
Speaker 1: lives who are struggling and having to fight them on
Speaker 1: their taxes, like and and at the political environment right
Speaker 1: like you are a representation. Literally, the talking point from
Speaker 1: folks on the right in the last year has been
Speaker 1: that this is Biden is creating this new army of
Speaker 1: i RS agents that's going out there with weapons to
Speaker 1: poke through people's finances. That can feel very threatening if
Speaker 1: that's the message that's going out there, and if if
Speaker 1: you believe it and then someone shows up at your
Speaker 1: house or your business and these people are not armed
Speaker 1: to be clear, the vast, vast majority, except for some
Speaker 1: criminal investigators, a very very few. They do not have weapons.
Speaker 1: They have basically a laptop and that's it, and maybe
Speaker 1: that laptop doesn't work. There was some amazing stories that,
Speaker 1: like one guy said his laptop broke and then they
Speaker 1: didn't they didn't have the budget to like buy a
Speaker 1: new one. There wasn't a replacement in the office, so
Speaker 1: he had to mail it from Florida to Texas to
Speaker 1: be repaired and then wait for it to be sent back,
Speaker 1: and he he did not have a job to do
Speaker 1: for three weeks, because you can't do a job without
Speaker 1: a computer in twenty twenty three or whatever. It does
Speaker 1: speak to another element of the story that I found fascinating,
Speaker 1: which is so much of the job is actually the
Speaker 1: agents and auditors taking upon themselves to do things and
Speaker 1: learn things that maybe they haven't ever been exposed to
Speaker 1: in the course of the job. Right, So talk about
Speaker 1: those contours, because that it takes a certain someone to
Speaker 1: be like, Okay, I'm gonna government job, and actually I
Speaker 1: need to like do a little bit more work to
Speaker 1: understand what I'm supposed to do. Yeah. I found many
Speaker 1: instances of people paying for a course out of their
Speaker 1: own pocket. Again, these are tax nerds, so like that
Speaker 1: they're interested in it maybe to begin with, but also
Speaker 1: they felt like they couldn't do their job. And that's
Speaker 1: the running theme, is it. And so many of these
Speaker 1: people at the RS just told me I did not
Speaker 1: have the tools to do my job properly, and that
Speaker 1: can be very demoralizing. Even if you get along with
Speaker 1: their colleagues and like them, it can be just really
Speaker 1: just demoralizing that you can't fulfill your mission. What do
Speaker 1: they get paid, Um, it's a government pay scale and
Speaker 1: I think it's capped it like the hot like high
Speaker 1: hundred thousands basically yeah, yeah, yeah, one hundred thousand or so,
Speaker 1: one hundred thousand or so. I could be wrong about that.
Speaker 1: There might be some bumps. The IRS now that they're
Speaker 1: hiring is thinking, well, maybe we should hire because of
Speaker 1: remote work. Maybe we can hire more in like markets
Speaker 1: that are less expensive, like other than DC New York
Speaker 1: Bay Area, like higher auditors in other places, And maybe
Speaker 1: that's one of the strategies are coming up with to
Speaker 1: try to get some talent in there. But like it's
Speaker 1: basically these people can leave in DC or New York
Speaker 1: and get paid four times more five times more by
Speaker 1: going to the private sector. It's interesting too that, you know,
Speaker 1: in terms of the things that IRS is doing well diversity,
Speaker 1: it seems like they're killing it on gender equity and
Speaker 1: you know, just having an inclusive hiring practice. What did
Speaker 1: you make of that? Did that surprise you? Surprise me
Speaker 1: a little bit? Um. What I heard from veterans is
Speaker 1: that they maybe they came out of law school and
Speaker 1: way back in the eighties. This is a longstanding thing,
Speaker 1: you know, they maybe they came out of law school
Speaker 1: in the eighties and it wasn't was not a top
Speaker 1: tier law school, and they were able to get a
Speaker 1: job at the IRS and and then found it pretty meritocratic.
Speaker 1: And I think that basically almost I think almost a
Speaker 1: third of the workforce is black. There's two thirds as women,
Speaker 1: so it's a very diverse workforce and it much more
Speaker 1: than other even other government jobs. Right. I just found
Speaker 1: that so surprising and interesting. Yeah. The other thing that
Speaker 1: is worth mentioning here is one of the main reasons,
Speaker 1: in addition to being able to leave and get high
Speaker 1: paying job elsewhere, is retirements, right, which has been a
Speaker 1: huge force of Chaine at dirs because so many of
Speaker 1: the people who are there and have effectively tenure are retiring.
Speaker 1: So you know that there's this drain loss, brain loss, draining,
Speaker 1: brain brain brain drain there. It is that And I'm
Speaker 1: curious what you're reporting bore out about that topic because
Speaker 1: that that can have huge not only kind of cultural implications,
Speaker 1: but also you know, institutional ones. Yeah, so people told
Speaker 1: me about what the time when they joined the organization,
Speaker 1: say two decades ago, there would be a guy who
Speaker 1: is in an office in the DC in DC who
Speaker 1: was the expert on section forty two point k what
Speaker 1: they were the world expert. And that is actually an
Speaker 1: advantage for the tax collector that the private sector doesn't
Speaker 1: necessarily have. They have the ability because it's it really
Speaker 1: is eighty four thousand people in this workforce. It's a
Speaker 1: big workforce, much bigger than any firm. They have the
Speaker 1: ability to really master the minutia of this incredibly complicated
Speaker 1: tax code. Well, if those people leave, and they have
Speaker 1: been leaving in droves because basically in a lot of
Speaker 1: departments that the IRS didn't hire for years and years
Speaker 1: and years, we actually think that there's going they think
Speaker 1: that there's going to be about fifty thousand of those
Speaker 1: eighty thousand employees are either going to quit or retire
Speaker 1: in just the next several years, so no more audits
Speaker 1: than for us. Like so it just underlines how much
Speaker 1: they need to hire to replace these people and how
Speaker 1: and then it's going to take several years to ramp up.
Speaker 1: I mean it's amazing. Yeah. Now that these people are
Speaker 1: on the outside, a lot of them are helping clients
Speaker 1: deal with the IRS, and they're saying they're just holding
Speaker 1: their heads. I mean they are just in horror of
Speaker 1: what they're encountering because they're encountering auditors who've been on
Speaker 1: the job for a year or two and they do
Speaker 1: not know what they're doing. And we brought all this
Speaker 1: to the IRS and they did not push back on this.
Speaker 1: I mean there is so yes, Maddie, Yeah, I mean
Speaker 1: it's takeaway in competent Auditsum, you just get stuck in
Speaker 1: this customer service hell and ever exited unbelievable. Ben Steverman,
Speaker 1: wealth reporter at Bloomberg News. Joe Webber, Editor Bloomberg business Week.
Speaker 1: Check it out online. You're listening to the Bloomberg Business
Speaker 1: Week podcast. Got Us Live weekdays from two to five
Speaker 1: pm Easter on Bloomberg Radio, The Bloomberg Business A band
Speaker 1: you too. You can also listen live to our flagship
Speaker 1: New York station, Just Say Alexa play Bloomberg e Love
Speaker 1: and Dierdy. You're so delighted to have back with us.
Speaker 1: Andy Brown former editorial director of Bloomberg New Economy, and
Speaker 1: he spent three decades in Asia as both China editor
Speaker 1: and columnist for The Wall Street Journal. Today he leaves
Speaker 1: the China Hub. He is a partner at Brunswick Group.
Speaker 1: A critical issues advisory from Andy. Back with esvia Zoom
Speaker 1: in New York City. Andy, thank you, thank you. Good
Speaker 1: to have you here with Maddie and myself. Um, what's
Speaker 1: your read I'm President mccrone's visit and then the comments
Speaker 1: post his visit to China. Well, first of all, it's
Speaker 1: great to be with you, Carol and Maddie. The comments,
Speaker 1: as you say, really are quite extraordinary and have been
Speaker 1: interpreted as inflammatory in fact by China hooks in the US.
Speaker 1: I mean, you've got to remember the context. I mean
Speaker 1: here he is the French President Emmanuel mcron in China,
Speaker 1: saying that Europe should distance itself from the United States
Speaker 1: at a time when the United States is involved in
Speaker 1: intense strategic competition with China, competition over Taiwan, over the
Speaker 1: South China Sea. They're at loggerheads over high technology, over
Speaker 1: human rights, over the situation in Ukraine. And Macron comes
Speaker 1: out and he says, no, we need strategic autonomy. We're
Speaker 1: not going to be followers. And the most explosive of
Speaker 1: his comments was and We're not going to be dragged
Speaker 1: by the United States into an licked uh over over Taiwan.
Speaker 1: And you know, this is this is a this is
Speaker 1: this to the too politicians like Marco Rubio really is outrageous.
Speaker 1: So he's saying, okay, here we are the United States
Speaker 1: defending Europe, sending AID, sending arms, military equipment to Ukraine,
Speaker 1: and you're saying, you know you're not going to get in,
Speaker 1: You're not going to support us in Taiwan. Why now
Speaker 1: for this move from Macron? You know, he's he's always
Speaker 1: sought what he calls strategic autonomy somewhere between the United
Speaker 1: States and China. This time he talked about creating a
Speaker 1: European third superpower. But you know, business and economics plays
Speaker 1: very much into this scenario. Macrom arrives in China with
Speaker 1: fifty odd business executives in representing industries from fashion to
Speaker 1: to to nuclear, and they're all doing great deals. So
Speaker 1: he's making clear the difference between the United States and
Speaker 1: Europe on this and in fact that sense is quite
Speaker 1: broadly shared in Europe. That you know, Europe doesn't want
Speaker 1: to go in for economic decoupling. Ursola van Delay and
Speaker 1: the European President of European Commission was quite clear on
Speaker 1: this point. She said, we want de risking from China.
Speaker 1: We don't want decoupling. But certainly Macron sees commercial opportunity
Speaker 1: in China's reopening. And by the way, President Jimping of China,
Speaker 1: this is all music to his inness. Relations with the
Speaker 1: United States are on ice and here's Europe coming along
Speaker 1: with trade offers of trade and technology. It's exactly what
Speaker 1: he needs at this point. Well, is it similar, Andy,
Speaker 1: I know we've talked about this a lot over the years.
Speaker 1: Is it the same for US business as we just
Speaker 1: talked about Tesla building a large new battery factory in Shanghai.
Speaker 1: So further digging in deeper when it comes to China specifically,
Speaker 1: I mean US big companies, they're still going to be
Speaker 1: in China doing business or no. Yeah, well, in some ways,
Speaker 1: Elon Musk is quite exceptional. It's the rare US CEO
Speaker 1: that's going out there now and announcing big business deals
Speaker 1: with China. In fact, we just had a big conference
Speaker 1: in Beijing called the China Development Forum, run by the
Speaker 1: Chinese government, the Chinese State Council. Fewer US corporate executives
Speaker 1: than usual were there. They were rather reluctant to turn out.
Speaker 1: They definitely didn't want to do any media and they
Speaker 1: certainly didn't want to make any announcements of investments in China,
Speaker 1: which might expose them to criticism by this newly created
Speaker 1: House Committee on China, which plans to hold US CEOs
Speaker 1: and other prominent figures with connections to China in front
Speaker 1: of the Committee for televised hearings. They're very nervous about that. So, yeah,
Speaker 1: this is advantage Europe versus the United States, certainly when
Speaker 1: it comes to corporate engagement. It's it's so interesting because
Speaker 1: I also have to wonder whether when it comes to
Speaker 1: she Jane Payne, are these CEOs concerned about the lack
Speaker 1: of predictability there. We just got through years of COVID
Speaker 1: zero in China. To what extent are people willing and
Speaker 1: ready to move on from that and say, well, this
Speaker 1: is an opportunity now, so let's fly over there with
Speaker 1: fifty CEOs into Yeah, well, the the Joe Biden is
Speaker 1: highly unlikely to replicate that that kind of mission. In fact,
Speaker 1: the US is working in the opposite direction. It wants
Speaker 1: economic containment of China, not economic engagement with China, certainly
Speaker 1: in the area of high tech. That's what the Inflation
Speaker 1: Reduction Act is all about. That's what chips and science.
Speaker 1: It's all about billions of dollars to build supply chains
Speaker 1: in the United States, to bring jobs back from China,
Speaker 1: and to make the United States less reliant on China.
Speaker 1: So it's all working really in quite the opposite direction.
Speaker 1: But US businesses in China are worried about two things.
Speaker 1: First of all, geopolitics and particularly the situation in the
Speaker 1: Taiwan Strait and the possibility of a Chinese invasion. But
Speaker 1: they're also worried about domestic economic policy and whether the
Speaker 1: Chinese administration really has eased up on its extraordinary assaults
Speaker 1: on the private sector that we saw beginning in the
Speaker 1: middle of two thousand and twenty one with the attack
Speaker 1: on the big tech digital platforms Ali Baba, you know,
Speaker 1: and the and DD and the other and the other
Speaker 1: tech giants. Well, it just is always interesting and I
Speaker 1: feel like so many different things come at us from
Speaker 1: so many different angles. Andy, thank you. I know, another
Speaker 1: busy day, so so appreciated. Andy Brown, partner at the
Speaker 1: Brunswick Group. Joining us via zoom in New York City.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekdays from two to five pm Easter on Bloomberg Radio.
Speaker 1: The Bloomberg Business a band you two. You can also
Speaker 1: listen live to our flagship New York station Just Say
Speaker 1: Alexa play Bloomberg e Love and Dirty. So you know
Speaker 1: the new wishie Bloomberg business Week gets out, It's on newsstands,
Speaker 1: it's online Bloomberg dot com, slash business Week and of
Speaker 1: course on the Bloomberg terminal. In it a well known
Speaker 1: name in the hedge fund space who was also part
Speaker 1: of former President Donald Trump's team at the White House.
Speaker 1: For a little bit, the story gets into his ties
Speaker 1: to and his hedge funds performance hit thanks to Sam Bakeman,
Speaker 1: Freed and FTX It is an incredible story, so many
Speaker 1: juicy nuggets in it. It is gotta get a table
Speaker 1: read at some point. Let's get to the story. Bloomberg
Speaker 1: News hedge fund reporter Kathy Burton, she wrote it cheese
Speaker 1: in her interactive broker studio along with the editor Bloomberg
Speaker 1: Business Week, Joel Webber. Joel, we're talking about the moves. Yeah,
Speaker 1: and you know before he was before and after he
Speaker 1: had that very brief stint as President Trump's presse secretary,
Speaker 1: he managed money, and Skybridge has been a big name
Speaker 1: within the hedge fund community. Founded Salt, which is basically
Speaker 1: a gathering with a big and important gathering within the
Speaker 1: hedge fund community, has managed as much as nine billion dollars,
Speaker 1: but not as much of late. Kathy Burton, what's going
Speaker 1: on right now? The assets have fallen to about two
Speaker 1: billion dollars and what's more, about half the assets are
Speaker 1: locked up in a fund, and he's not really letting
Speaker 1: all the investors out. He's letting it out really like
Speaker 1: ten percent or less. It must be happy about that.
Speaker 1: They're not really that happy. So that caused me to
Speaker 1: start to look at Skybridge and see what had been
Speaker 1: going on there. We'll take us there, So tell us
Speaker 1: you start to look into it. He's an interesting character
Speaker 1: and like I said, this story, the way you describe
Speaker 1: him and everything is just lovely. So take us to
Speaker 1: take us on that journey. And what you found out, well,
Speaker 1: I found out that really when things started to go
Speaker 1: south for him, as when he went into the White House,
Speaker 1: there were a group of clients who weren't really happy
Speaker 1: about that, and so they started to pull money. And
Speaker 1: then when he came back to the White Huf after
Speaker 1: his very brief stint, he ended up losing a bunch
Speaker 1: of money on some credit investments. And the person who
Speaker 1: he had sort of put in charge is a guy
Speaker 1: that he knew from law school, Harvard Law School name
Speaker 1: Brett Messing. I know that last name, Yeah, exactly. He's
Speaker 1: the brother of a Deborah Messing. You go. And so
Speaker 1: he Brett panicked apparently, and took a huge hit on
Speaker 1: some of their biggest investments and then said, oh, we
Speaker 1: should get into crypto like so many of us. Wait, wait, cute,
Speaker 1: dull not just get into crypto, but specifically get into
Speaker 1: FTX and Sam Bankman Freed's crypto, which exactly, but they
Speaker 1: had made a big crypto investment sort of towards the
Speaker 1: top of the market, and then they decided to invest
Speaker 1: with Sam Bankman freed. They bought a piece of FTX
Speaker 1: and then Sam bought a piece of Skybridge and where
Speaker 1: did that go? Well, then two months later he got
Speaker 1: arrested and so there it is in bankruptcy court. That's
Speaker 1: where you don't want to end up, either if you're
Speaker 1: the Moots or if you're SPF okay, So lots of
Speaker 1: drama in between there. But what um One of the
Speaker 1: things that really stands out is that wrong Way crypto
Speaker 1: bet being this is a big money version of that.
Speaker 1: Like we've seen that small time stuff, but we haven't
Speaker 1: really always seen it necessarily on an institutional level like this.
Speaker 1: So what do we know about who was exposed to
Speaker 1: Skinnermoucci and Skybridge's bet here? So the biggest investors are
Speaker 1: the clients of Morgan Stanley, their wealth management clients. They
Speaker 1: have about sixty percent of that public that the fund
Speaker 1: that Mudge runs YEA and also Coca Cola pension fund
Speaker 1: is one of the big investors in that fund as well.
Speaker 1: That's amazing, Like I just think of the high profile
Speaker 1: I mean, can we can we take a step back
Speaker 1: for a moment, because I think about you mentioned salt
Speaker 1: as journalist business journals, like we'd all go to the
Speaker 1: event right cover it. He added, who's who of people
Speaker 1: in money management the hedge fund industry, like who is Scaramucci?
Speaker 1: And you're reporting because you really take us through kind
Speaker 1: of his journey as you uncovered kind of his world.
Speaker 1: I mean, I don't know, I'm curious about his role
Speaker 1: in the financial community and in the hedge fund industry.
Speaker 1: And don't forget his reality TV exposure forgot about which
Speaker 1: there is a lot of it. So he started Skybridge
Speaker 1: in two thousand and five and it was pretty small,
Speaker 1: and then he bought part of City Bank's head fund business,
Speaker 1: which then he became a fund of funds, which is
Speaker 1: a like that's a play, you know, I think that's
Speaker 1: a big move to go swallow up something like that.
Speaker 1: Absolutely was four point two billion dollars that he brought
Speaker 1: him in, and I don't think he had that much
Speaker 1: money under management before that, and so he built that
Speaker 1: to this nine billion dollar business and so that was
Speaker 1: pretty impressive. They almost he almost lost his business pre
Speaker 1: the City merger. During the financial crimes and that's when
Speaker 1: he started salt as a way to sort of bring
Speaker 1: attention to his firm and hopes that like money would
Speaker 1: flow in. It seems like it worked well. At least
Speaker 1: everyone knows him right right, right well, and then you
Speaker 1: know the other element of it. He really just like
Speaker 1: I feel like he's the little investor that could. So
Speaker 1: he builds his fund, he builds his event that we
Speaker 1: all covered, and everybody seemed to want to be there
Speaker 1: and interviewed and so on and so forth. But he
Speaker 1: really also wanted to be in politics. You and cover, Yes, absolutely.
Speaker 1: So he was always the once he bought the city business,
Speaker 1: the city people were the ones that ran the business.
Speaker 1: They were the investors, and he was just the ultimate
Speaker 1: snooser and so and he was good at it and
Speaker 1: he was very very good at it. And so that's
Speaker 1: when he started thinking, Okay, I have this big, successful business.
Speaker 1: Now I can go into politics. And he thought about
Speaker 1: running for governor, and then he decided he was going
Speaker 1: to put his train to the Trump and that lasted
Speaker 1: a total of eleven days. It's a good train to
Speaker 1: hit your wagon. Two there, Katherine, I had asked you
Speaker 1: for some questions for Scar Muchie, because I had an
Speaker 1: opportunity to interview him right after Dabos and he'd given
Speaker 1: me fifteen minutes and ended up being closer to two hours,
Speaker 1: and I just kind of let him go. But a
Speaker 1: lot of the anecdotes that you have in your piece.
Speaker 1: He also shared with me his usage of botox, that
Speaker 1: his wife was very upset with him after the Trump
Speaker 1: administration's stay. But in terms of what relates to the
Speaker 1: reporting and the maid of your story, not just the
Speaker 1: fun stuff. He talked about bringing his son with him
Speaker 1: to Dubai to meet with SBF, and that now he's
Speaker 1: kind of used SPF as an example to his son
Speaker 1: of like, we come from this family of my dad
Speaker 1: was a crane operator, and you need to stay humble
Speaker 1: and not lie to people. In his words, did you
Speaker 1: get a sense of his reading on SPF on FTX
Speaker 1: how that might differ from like the institutional view of
Speaker 1: crypto and the downfall of FTX. Not really, I mean
Speaker 1: I feel like that he went to he and Sam
Speaker 1: hooked up because they both needed something. Now he claims
Speaker 1: that he didn't need money then, even though his fund
Speaker 1: had been in a free fall as far as performance,
Speaker 1: and Sam as we now know definitely needed some fest investors.
Speaker 1: So he came to the Ultimate Marketer to to help
Speaker 1: him raise money, and they went to the Middle East
Speaker 1: and he was hoping to reach that's that's the buddy
Speaker 1: comedy that I want. Yeah, but what happened on that
Speaker 1: trip today? And what do we know about that trip too?
Speaker 1: Like who were they talking to, what was the plan?
Speaker 1: What happened as they you know, left, They wanted to
Speaker 1: raise a billion dollars and apparently they had some uh
Speaker 1: commitment already from previous investors who were going to re up.
Speaker 1: But these venture guys don't want to re up unless
Speaker 1: they get someone else to come in and say, yes,
Speaker 1: the price we're paying is is good, And they couldn't
Speaker 1: find anyone to do that, so they came home empty handed.
Speaker 1: And also he had already raised money in that January,
Speaker 1: so it was only ten months later he was coming
Speaker 1: back to raise almost twice the amount of money. Yeah.
Speaker 1: At that point, Crypto Winter sort of already unfolding. Yeah,
Speaker 1: so you would think that wouldn't want to give him money. Exactly.
Speaker 1: Crazy timing. Just like weeks after that, we just saw
Speaker 1: FTX implode and everything that fell out from there. But
Speaker 1: worth mentioning there, like, if you're Scaramucci, you had a
Speaker 1: great little run in twenty twenty one on this bet.
Speaker 1: So I mean he wasn't alone in getting drawn into
Speaker 1: crypto and and you know, throwing more money at it basically, right, Yeah,
Speaker 1: And it was interesting because he didn't use the SPF
Speaker 1: investment to take himself out of Skybridge. In fact, he
Speaker 1: took that. They just issued more stock to him. They
Speaker 1: took five million dollars into the company and then bought
Speaker 1: these kind of crazy coins except for bitcoin coins tied
Speaker 1: to FTX. So that bankruptcy court thing, which is where
Speaker 1: we find ourselves yet again being nosy journalists, because that
Speaker 1: to get that thirty percent stake in Skybridge that FTX has,
Speaker 1: he's got to basically wade through bankers by court. So
Speaker 1: what does that process look like for him to be
Speaker 1: able to get back you know, that that share them?
Speaker 1: As I understand it, he does have some right of
Speaker 1: refusal if someone else comes in and wants to buy it,
Speaker 1: but I guess he's just going to bid for it
Speaker 1: whenever that comes up. And I don't know, I can't
Speaker 1: imagine they can really do underbid it a lot because
Speaker 1: it's bankruptcy court, right, So so all of that would
Speaker 1: make me reconsider my bitcoin feelings. How about for Scaramucci,
Speaker 1: Oh no, not at all. He says that bitcoin is
Speaker 1: going to go up from here and anyone who doesn't
Speaker 1: like stick by him as being stupid. Basically, can I
Speaker 1: what do you make first of all, yea of a
Speaker 1: guy who kind of likens himself to a cockroach, like
Speaker 1: I'm still here, doesn't matter, I keep popping up. And
Speaker 1: then he also says, I do think I am a psychopath. Um,
Speaker 1: there's so much out there because this is someone who
Speaker 1: certainly has been out there, loves the media. I think
Speaker 1: it's safe to say out there, whether it's on TV,
Speaker 1: whether it's radio, whether it's podcasting. Um, your thoughts as
Speaker 1: you did your reporting on him, on kind of who
Speaker 1: this guy is and his role or does he stick
Speaker 1: around and like what surprised you most about him? As well?
Speaker 1: We're entering that point in the conversation where we're just
Speaker 1: gonna pepper you live from interesting Scaramucci questions, because he
Speaker 1: is an interesting guy who just seems to keep popping up. Yes,
Speaker 1: And that was one of the other things that sort
Speaker 1: of drove me to want to do the story is
Speaker 1: that any time it looked like he was really on
Speaker 1: his last legs, anything would happen, he would come back.
Speaker 1: And he was actually been quite unhappy about the fact
Speaker 1: that we quoted him calling himself a psychopath and that
Speaker 1: he is basically out for himself and has said on
Speaker 1: Twitter that we took it out of context. But I
Speaker 1: think everything that he said to me has said that
Speaker 1: he does really look out for himself first and foremost,
Speaker 1: and definitely all the people around him, and the reporting
Speaker 1: my reporting said similar things. How many hours of podcasting
Speaker 1: Scaramucchie podcasting did you listen to? Too many? Too many?
Speaker 1: If I were going to listen to a few of
Speaker 1: your favorite moments in Scaramucchie podcasting, which there are no
Speaker 1: doubt many, but where would you direct my attention if
Speaker 1: I wanted to understand how the Mucca is faring in
Speaker 1: the world right now? I think the one that we
Speaker 1: quoted in the piece, but actually both of the ones
Speaker 1: that we were quoted in the piece, we're ones that
Speaker 1: I thought were particularly good, prolific, particularly that Andrew gold one. Yeah, okay,
Speaker 1: prolific podcaster, got to respect that that was just not
Speaker 1: a sidebar in the magazine, like just the podcast element. Definitely, Yeah,
Speaker 1: it's all. It's essential to the narrative. Carol, No, it's
Speaker 1: so good. It's it's you guys have to read the
Speaker 1: piece if you're listening to this, because you're obviously an
Speaker 1: incredible writer. Just everything that you lay out is so
Speaker 1: beautifully written. Um. But when I spoke with him, he also, um,
Speaker 1: just as an aside, he paused the interview to confirm
Speaker 1: two consecutive knights of reservations at the Polo Bar, which
Speaker 1: I just thought was very on brand for him. Um.
Speaker 1: And so are you not going to bring up that?
Speaker 1: Was it the wife and the girlfriend in the at
Speaker 1: the hotel and they is it that they were like
Speaker 1: doing a zoom? Yeah, that's Brett Messing. Yeah. Oh is
Speaker 1: that Brett Messing? Forgive me? Forgive me? Sorry? Yeah yeah, no, no, no,
Speaker 1: But but there are all these funny anecdotes, right. But
Speaker 1: I wonder as we kind of get to the end
Speaker 1: of this we've got like thirty seconds, is the investment
Speaker 1: community viewing him as a serious figure? I think you
Speaker 1: can see in the flows. Perhaps I think less and
Speaker 1: less given the feedback that I've gotten from the story. Yeah,
Speaker 1: but then again, if bitcoin goes up the way he
Speaker 1: right says it's going up, then you know he's he's
Speaker 1: the winner. Been sure, yeah, if the money's there. In
Speaker 1: the meantime, what kind of redemptions have with been the
Speaker 1: change in redemption strategy at Scabbridge. They were they were
Speaker 1: getting back ten percent of the money in September, and
Speaker 1: at the end of March they were going they were
Speaker 1: down to seven point five and the demand was something
Speaker 1: like sixty percent of the money wanted out, So unbelievable. Well,
Speaker 1: great story. Another great story from Kathy Burton, hedge fund
Speaker 1: reporter at Bloomberg News. Here in studio with us. I'llow
Speaker 1: me tell Webber, the editor of Bloomberg Business Week. This
Speaker 1: story is in the new double issue Bloomberg business Week
Speaker 1: that's already out at Bloomberg dot com, Slash business Week,
Speaker 1: on the Bloomberg and of course on newstands, so be
Speaker 1: sure to check it out. You're listening to the Bloomberg
Speaker 1: Business Week podcast, catch us live weekdays from two to
Speaker 1: five pm Eastern on Bloomberg Radio, the Bloomberg Business app
Speaker 1: band you two. You can also listen live to our
Speaker 1: flagship New York station Just Say Alexa play Bloomberg e
Speaker 1: Loove and Dirty so inflation, bank collapses, mortgage rate shooting,
Speaker 1: app car prices, don't even ask layoffs at it all up,
Speaker 1: and yet we are all pretty fearful about checking out
Speaker 1: our four oh one case. So what do you do
Speaker 1: with your money your life in our brave, new and
Speaker 1: wild world. So let's get into it, because there's this
Speaker 1: great story in the new issue of Bloomberg BusinessWeek. It
Speaker 1: is out on newsstands, the new issue on the Bloomberg
Speaker 1: and at Bloomberg dot com slash business Week. Joining us
Speaker 1: right now is Bloomberg Business Week Markets and Finance editor
Speaker 1: Pat Reigney, or here in our Bloomberg Interactor Broker studio.
Speaker 1: Pat I said to you before we get going, these
Speaker 1: are the kind of stories I always expect BusinessWeek to do,
Speaker 1: and you do it so well. It's like the practical
Speaker 1: information taking the macro issues and kind of what do
Speaker 1: we need to do? Tell us about this story. Yeah,
Speaker 1: So the genesis of this story was my colleague Brett
Speaker 1: Began was talking to me about just sort of like
Speaker 1: we were just talking across the row about all of
Speaker 1: the financial concerns that we're coming up in his mind,
Speaker 1: and it felt like, you know, a lot has changed
Speaker 1: in finance after kind of a long period of everything
Speaker 1: being the same for a really long time, It's true.
Speaker 1: And then we had kind of the pandemic emergency, and
Speaker 1: so we were mostly just kind of covering the emergency,
Speaker 1: and it felt like any advice you would give would
Speaker 1: be incredibly temporary. And now all of a sudden, it's
Speaker 1: like we've had this kind of shift and a lot
Speaker 1: of things are a lot of things are changing, and
Speaker 1: people's financial lives are very complicated, and honestly, the way
Speaker 1: that we put this together was we started Brett and
Speaker 1: I and Craig Giemona, who had our personal finance coverage,
Speaker 1: and most importantly the writer of Clare Balancing. We all
Speaker 1: just got together and said, like, what are the things
Speaker 1: that we're all worried about. So it's got a mix
Speaker 1: of things on like what should you do with your
Speaker 1: you know, with your investing to um something that I
Speaker 1: hapened to be thinking about all the time, which is, uh,
Speaker 1: how do I think about the cost of college for
Speaker 1: your kids? To buying a car? Is this a good
Speaker 1: time to buy a house? Um? All of you are
Speaker 1: really expensive right now? Yeah, basically, part of the entrance.
Speaker 1: Everything's expensive and kind of frustratingly, including like stocks. Yeah,
Speaker 1: well that's another good thing that you get into invaluations.
Speaker 1: It's something we talk about, you know, in our simulcast
Speaker 1: and constantly like trying to understand is the market fairly
Speaker 1: valued or is it overvalued at this point? Yeah? So, um,
Speaker 1: you know this is this is kind of tricky. Um
Speaker 1: we've had uh, you know, we're all trained to buy
Speaker 1: the dip right and um, twenty twenty two was a
Speaker 1: dip um and so you want to know it's like, well,
Speaker 1: so so now it's like everything like kind of an
Speaker 1: incredible bargain, and you know it's clear. Claire found by
Speaker 1: looking at the numbers very quickly. It's almost any metric
Speaker 1: you look at, it's like, well, it's definitely everything's definitely
Speaker 1: cheaper than it wasn't twenty twenty one. But if you
Speaker 1: sort of like you zoom out the chart, yea, and
Speaker 1: you look at price sales, price book. My personal favorite
Speaker 1: metric is I like to look at like the earnings
Speaker 1: yield because it's just like a really straightforward to like
Speaker 1: read on, like what do you get for your money
Speaker 1: when you buy a stock cheaper than it was not
Speaker 1: historically cheap, you know, And what does that tell you? Well,
Speaker 1: you know a lot of people who are listening to
Speaker 1: Bloomberg use the terminal. They're making decisions about tomorrow, a week,
Speaker 1: a little, a little while long. This this story is
Speaker 1: very much kind of a kitchen table kind of story.
Speaker 1: I think most of the answer is, you're not going
Speaker 1: to get this timing right. These are the questions when
Speaker 1: I get together with family or relatives or good friends,
Speaker 1: like this is the kind of questions that come up
Speaker 1: and that they ask you. Right, They're like, hey, you
Speaker 1: work at Bloomberg. Can you tell me whether or not
Speaker 1: I should get an amex? You're like, I mean, I
Speaker 1: don't covers Future is doing it's right? Should we get
Speaker 1: that new amex? You guys get into that as well. Yeah,
Speaker 1: I'm you know, and that's I am not a points guy.
Speaker 1: There are people I know who are like constantly like
Speaker 1: maximizing their points and things like that. Maybe they travel
Speaker 1: more than me. I forget Charlie Pellett, here's probably listening
Speaker 1: with points. Oh my god, well I gotta get to
Speaker 1: travel awards and credit cards. But I digress. I took
Speaker 1: a flight to Dubai and all of a sudden I
Speaker 1: started thinking about points. It's like, gosh, what there's points here,
Speaker 1: aren't there. Yeah? So Amex has a card that has
Speaker 1: like an annual fee of like seven hundred bucks, and like,
Speaker 1: you know, it's got a lot of rewards and it
Speaker 1: looks like, you know, in your first year, probably the
Speaker 1: points you get might might justify that cost. But you
Speaker 1: want to think ahead to like, you know, is that
Speaker 1: going to make sense over over the long run. And
Speaker 1: the answer is kind of like, are you a points guy?
Speaker 1: Are you a point scalt? You know, if you're somebody
Speaker 1: who thinks about it, maybe you can kind of squeeze
Speaker 1: those rewards out. Yeah. I don't like to have that
Speaker 1: brain space in my life. Yeah, it's kind of annoying.
Speaker 1: And yeah, so you should know that about yourself. I
Speaker 1: think before you kind of sign up for the fancy
Speaker 1: new car. Well, you bring up Dubai, which is the
Speaker 1: place to move if you want to pay zero taxes?
Speaker 1: Because that's what happens if you move there are literally
Speaker 1: no taxes. One of the things that you cover in
Speaker 1: the story, though, is which state in the US you
Speaker 1: could move to to potentially get a little bit of
Speaker 1: a discount on taxes. Yeah, so, I mean we've we've
Speaker 1: certainly heard this story. I mean, particularly with the pandemic
Speaker 1: that people are thinking about moving to Florida moving to Texas.
Speaker 1: People are moving to Florida, are moving to Texas. I
Speaker 1: mean the problem with that is always like, well, you know,
Speaker 1: if you're having this bright idea, guess why people have
Speaker 1: been having this bright idea for about five years. And
Speaker 1: anybody who lives in Austin can tell you that, you know,
Speaker 1: the the Austin housing market wasn't really ready for all
Speaker 1: the people who came there, right, So you know, if
Speaker 1: you look at sort of like local salaries and like
Speaker 1: what does it take based on what people make, you know,
Speaker 1: to save up for a down payment on a house
Speaker 1: in Austin. Guess what? It's just like living in New
Speaker 1: York City. I have to say. I was just having
Speaker 1: this conversation with somebody who's starting to actually think about
Speaker 1: like retirement and stuff, and just thinking, Okay, what are
Speaker 1: the markets I should go to? And I was telling
Speaker 1: them a story and anecdotal story of some family members
Speaker 1: who went somewhere cheap market. But in the last three
Speaker 1: four years, the housing prices have just shot up. This
Speaker 1: is like in the Carolinas, it's just off the charts. Yeah, yeah,
Speaker 1: And it's tough and in particularly like if you're thinking
Speaker 1: about retirement. I mean, my wife and I are, you know,
Speaker 1: thinking about buying a house and U, you know, as
Speaker 1: a friend of ours called it, what will this be
Speaker 1: your forever home? And we sort of think it will be.
Speaker 1: But guess what we're looking at the market and it's like, well,
Speaker 1: the market's still pretty expensive. And on top of that,
Speaker 1: now you know, rates went up, so it is like,
Speaker 1: is this going to make sense? Are we going to
Speaker 1: be you know, finally buying in you know, both at
Speaker 1: the top and at a high rate, And did we
Speaker 1: miss our shot? And that's always just a really like
Speaker 1: that's that's like a really tough dilemma that I think
Speaker 1: a lot of people are facing around now. Well. And
Speaker 1: it's funny that you say that, because I feel like,
Speaker 1: because they say, we'll wait a minut folks, it's not
Speaker 1: the mortgage rates of the nineteen seventies. It doesn't matter.
Speaker 1: It still feels really high, and it did go up
Speaker 1: a lot in the last year or so, right, And
Speaker 1: it's not the mortgage rates in the nineteen seventies, but
Speaker 1: it's not the home values of the nineteen seventies either.
Speaker 1: So the how the home values were pushed up by
Speaker 1: the very very low rates, and now we're getting that
Speaker 1: shot of high rates, and the houses aren't a liquid market.
Speaker 1: They haven't just adjusted down magically to to to make
Speaker 1: that to make that worth it. They might, but you
Speaker 1: know you've got it. It's a pretty tricky decision. And
Speaker 1: unfortunately you can't just type it up on your Bloomberg
Speaker 1: terminal and see that and watch the watch the price
Speaker 1: of housing goes down as interest rates go up. The
Speaker 1: housing marrier doesn't worry back that there's a good function
Speaker 1: half we're running out of time. But I will say,
Speaker 1: there's a couple of things that get into I'm thinking
Speaker 1: of quitting my job for a new one. What should
Speaker 1: I consider? Can I just leave my job to explore
Speaker 1: like life man, or I'm thinking about freelance? Will my
Speaker 1: taxes be a nightmare? I think it's just so relevant
Speaker 1: ahead of the monthly jobs report in a week where
Speaker 1: we had so much jobs data. But that's going to
Speaker 1: be a tease, folks, because you're going to have to
Speaker 1: go online and read it because we're running out of time,
Speaker 1: pat Rigneer, this was fun. Thank you, You're so appreciating
Speaker 1: great reporting by Claire Ballantine. Pat Rigneer. He is markets
Speaker 1: and finance reporter up Bloomberg Business Week. Here in our
Speaker 1: interactive Brokers studio, you're listening to the Bloomberg Business Week Podcast.
Speaker 1: Catch us live weekdays from two to five pm Easter
Speaker 1: on Bloomberg Radio. The Bloomberg Business a band you too.
Speaker 1: You can also listen live to our flagship New York
Speaker 1: station Just Say Alexa play Bloomberg e Love and Dirty.
Speaker 1: Our next guest knows certainly first time on Wall Street,
Speaker 1: the highs and lows and for changing how Wall Street
Speaker 1: finances deals. A high yield pioneer. Much reporting has been
Speaker 1: done on his life, A very private individual who has
Speaker 1: created very public forms via his milk and institute and
Speaker 1: more to shed a lot of light conversations and action
Speaker 1: on the global challenges of our time. He's got a
Speaker 1: new book out. It's called Faster Cures, Accelerating the Future
Speaker 1: of Health. He wrote it with Jeffrey Evansmore joining us
Speaker 1: as mikel and Mike joins us via zoom in Los Angeles.
Speaker 1: Mike nice to have you here on Bloomberg? How are you?
Speaker 1: I'm Greg Carol looking forward to seeing you at the
Speaker 1: Global conference later this month. I am looking forward to it,
Speaker 1: and I have to say my first milk and institute there.
Speaker 1: I assumed it would be a lot of financial types.
Speaker 1: I was surprised by the wellness and the healthcare component.
Speaker 1: But in your book you really bring it all together.
Speaker 1: I mean, you can't have advancements if you will in
Speaker 1: healthcare and R and D with also without not having
Speaker 1: that access to capital. You bring it all together. Talk
Speaker 1: to us about why you wrote this book specifically and
Speaker 1: why you wrote it now. I would say why I
Speaker 1: wrote it now is a very simple answer. We had
Speaker 1: geared up for COVID nineteen and everything that went before it.
Speaker 1: An incremental funding by the federal government of a half
Speaker 1: a trillion dollars laid the groundwork, and it was nine
Speaker 1: weeks sixty three days between the sequencing the DNA of
Speaker 1: the virus and putting it in the first human. We
Speaker 1: get geared up for emergencies and then we get geared down.
Speaker 1: So the reason I wrote this book was to reflect
Speaker 1: on fifty years of medical and healthcare progress, but also
Speaker 1: as a call to action now that the next generation,
Speaker 1: the new technology is to be deployed and we have
Speaker 1: an oportunity to finally bring to an end many life
Speaker 1: threatening diseases. It was to keep the energy going both
Speaker 1: financially and continuing to recruit the best and brightest into
Speaker 1: the field. Dent wind down. Mike, I have to say
Speaker 1: one of the things that struck me in your book,
Speaker 1: and I really thought about this coming off the pandemic,
Speaker 1: the collaboration that we saw on some existing work that
Speaker 1: had been done years before but just jumping on and
Speaker 1: the coordination, if you will, that we saw. You talk
Speaker 1: about how medical institutions are competitors, not collaborator, especially when
Speaker 1: it comes to gating money for R and D. That
Speaker 1: system that we still have inherently flawed. Well, it's changed
Speaker 1: dramatically in the last thirty years, where I would say
Speaker 1: today you have team science. So we just finished some
Speaker 1: major breakthroughs coming out of Melbourne at the Peter mccollumn,
Speaker 1: but it was coordinated in Europe, the United States and
Speaker 1: other parts of the world as a team. And so
Speaker 1: there has been but never have we seen cooperation as
Speaker 1: we did during this recent pandemic between for profit academic
Speaker 1: science centers, government, the idea that the government would put
Speaker 1: forth money to build factories before we knew if the
Speaker 1: vaccines work, or fun research and manufacture vaccines before we
Speaker 1: knew that they would work. So that one, the cost
Speaker 1: of the country, just this country, I maybe a trillion
Speaker 1: a month was so great that investing in products and
Speaker 1: plants of a few billion dollars if it didn't work,
Speaker 1: was small compared to what was going on, not just
Speaker 1: the United States but around the world. Mike, before the pandemic,
Speaker 1: and I take you back to you growing up in
Speaker 1: the fifties, and you take us through your life and
Speaker 1: some of the health crisis that your family has had
Speaker 1: to deal with. You talk about your dad, your mother
Speaker 1: in law, your kids, and of course yourself a first
Speaker 1: cousin as well. This book is very personal personal. What
Speaker 1: was it about the crisis that your family, the medical
Speaker 1: crisis that you yourself went through and your family the
Speaker 1: impact that that had that has gotten you to do
Speaker 1: what you have done over the last few decades. Well,
Speaker 1: I would say just the realization of my father's experience
Speaker 1: with polio and then with melanoma, our children's challenges. No family,
Speaker 1: there isn't any family that doesn't have these. Our family
Speaker 1: is not unique. One and two men get cancer in
Speaker 1: their lifetime one in three women. But the fact that
Speaker 1: I really could not discuss with my dad what we've
Speaker 1: been able to do to create access to cap it
Speaker 1: on in the financial world, make it available to millions
Speaker 1: of companies, create jobs, etc. Because of his own medical
Speaker 1: issues in many ways, he was not able to succuss
Speaker 1: his success with his parents and they both passed away.
Speaker 1: But I think there was that very famous music and
Speaker 1: song that life gets in the way, so you have
Speaker 1: a plan, but something happens in life. And I don't
Speaker 1: feel people in economic terms or in the financial world
Speaker 1: really realize that more than fifty percent of all economic
Speaker 1: growth in the last two hundred years can be traced
Speaker 1: to advances in health and medical research. And if we
Speaker 1: just reflect that at the start of the twentieth century,
Speaker 1: average life expectancy on planet Earth was thirty one and
Speaker 1: today one hundred and twenty years later, it's in the
Speaker 1: mid seventies. This dramatic, dramatic change not only in the
Speaker 1: extent of life, but the quality of life has driven
Speaker 1: the world's economy. In Southeast Asia, you've had a doubling
Speaker 1: of life expectancy in two generations, and now due to
Speaker 1: medical breakthroughs in Sub Sahara, Africa, many countries are seeing
Speaker 1: a doubling of life expectancy and one generation. How that
Speaker 1: affects the economy, how it affects relationships between generations is
Speaker 1: greatly underestimated. No, I think that. You know, we talked
Speaker 1: so much about economic impacts, market impacts, and that is
Speaker 1: certainly clear when you think about it that way. I
Speaker 1: want to go back to what you said you were quoting.
Speaker 1: I believe a song you have a plan, life gets
Speaker 1: in the way. Talk to us about you obviously had
Speaker 1: a plan and then life got in the way. When
Speaker 1: you are forty six years old, and there's been much
Speaker 1: written about your terminal cancer diagnosis back in nineteen ninety three,
Speaker 1: I can only imagine how that felt. But reading about
Speaker 1: it in the book, you know, you got your diagnosis,
Speaker 1: and then it seems like you set about and got
Speaker 1: to work talking to a lot of different doctors to
Speaker 1: figure out that there had to be a better way. Well,
Speaker 1: I think one of the things you learn that when
Speaker 1: people have life threatening diseases. And I had lost ten
Speaker 1: relatives by that time, and my prognosis was worse than
Speaker 1: all of them. Is often at the beginning they do
Speaker 1: the least possible, and when you have a reoccurrence later,
Speaker 1: they'll do anything to try to stay alive. And so
Speaker 1: I think one of the things we're trying to bring
Speaker 1: to bear here is that technology affords you such a
Speaker 1: better chance today. And I would say, unfortunately, most of
Speaker 1: the people diagnosed in my condition thirty years within five
Speaker 1: years had all passed away. But I chose a different
Speaker 1: path that involved nutrition. Iervade a medicine. I went to
Speaker 1: China to visit with doctors, Russia, healers, witch doctors in Africa,
Speaker 1: Western medicine. But I found a lot of strength in
Speaker 1: Indian medicine at that period of time and continued with
Speaker 1: observing many of the things that have been around for
Speaker 1: five thousand years to try to energize my immune system.
Speaker 1: But the world is so different today than it was
Speaker 1: when I was diagnosed. Then they told me I had
Speaker 1: eighteen months to live. Today, if you were diagnosed in
Speaker 1: my condition, someone might tell you that you're not going
Speaker 1: to die from cancer. You're not going to die from
Speaker 1: this disease. That we have solutions and the marrying of
Speaker 1: really three things. One access to capital to recruiting the
Speaker 1: best and brightest to go into this field. And three
Speaker 1: the tremendous advancements in technology, with computers a million times
Speaker 1: faster and data storage costs one billion have brought us
Speaker 1: to where we are today, that we have an excellent
Speaker 1: chance to find a solution for each individual who has
Speaker 1: a life threatening disease in their own lifetime, which is
Speaker 1: great to hear some optimism having some own family members
Speaker 1: who are dealing with some difficent health issues, it does
Speaker 1: feel like there are a lot more options. Hey, Mike,
Speaker 1: One of the things I was thinking about and prepping
Speaker 1: for our conversation was that when you got your diagnosis
Speaker 1: and you reached out to the healthcare network that you
Speaker 1: knew or were able to tap into various resources, you're
Speaker 1: already philanthropic and doing work when it came to healthcare
Speaker 1: and medical research. You know that access enabled you to
Speaker 1: I think open doors that maybe some would say we
Speaker 1: don't all have. And I feel like coming off the pandemic,
Speaker 1: we talked about the inequities in healthcare. How do we
Speaker 1: get rid of the inequities in healthcare? Is it even
Speaker 1: truly fully possible? I believe it's possible, and we're on
Speaker 1: the verge of making it happen. So when you just
Speaker 1: think it costs three billion dollars, took more in the
Speaker 1: decade to sequence the human geno. Now less than an
Speaker 1: hour and one hundred or two hundred dollars, and someday
Speaker 1: it'll be ten to twenty. It's available for everyone, and
Speaker 1: now in terms of cost, the idea that we can
Speaker 1: get the right treatment. So I was on a commission
Speaker 1: here in California number of years ago and the name
Speaker 1: was the Personalized Medicine Commission, and within six months or
Speaker 1: eight months, we changed the name to the Precision Medicine
Speaker 1: Commission so we could be precise. And when we submitted
Speaker 1: the report after a couple of years, it was the
Speaker 1: Precision Health Commission, so we could figure out not only
Speaker 1: to treat you after you or sick, but before. But
Speaker 1: as you pointed out, during the pandemic, we learned a
Speaker 1: number of things things. One, we knew there were food
Speaker 1: deserts where people couldn't access fruits and vegetables in their neighborhood.
Speaker 1: We then discovered there were financial deserts where people didn't
Speaker 1: have bank accounts. And when the government wanted to write
Speaker 1: funding to serve as a safety net, they couldn't get
Speaker 1: the money to people. And lastly, there were health deserts
Speaker 1: where people did not have a facility in the neighborhood
Speaker 1: they could visit to take care of. But if we
Speaker 1: start with just the United States, the demographics in the
Speaker 1: United States and have changed so dramatically. So sixty years ago,
Speaker 1: seventy five percent of everyone that was not born in
Speaker 1: the United States was born in Europe and ten percent
Speaker 1: in Canada. Today seventy percent of everyone not born in
Speaker 1: the United States was born in Latin America, Asia, and
Speaker 1: almost eleven percent of everyone not born in the United
Speaker 1: States was born in Africa or seven or eight percent
Speaker 1: in the Middle East. So the face of Americas changed dramatically,
Speaker 1: and we need to make sure for clinical trials and
Speaker 1: access to healthcare every individual has that opportunity, and that
Speaker 1: is one of our focuses that faster cures. The center
Speaker 1: is health equities and access, because if we primarily have
Speaker 1: people of European ancestry going into clinical trials, we're not
Speaker 1: going to get the exact breakdown of the population, and
Speaker 1: so we need to find a way to recruit and
Speaker 1: provide access, but the dropping in cost of getting the facts.
Speaker 1: The idea that we can change your genes, then we
Speaker 1: know we can do that today by Christopher, We're not
Speaker 1: going to do it because we don't understand all the
Speaker 1: ramification yet, but we do know that you can change
Speaker 1: how your genes are expressed by changing your microbiome, and
Speaker 1: you can start to do that in seven days by
Speaker 1: changing what you eat, what you drink, and your lifestyle.
Speaker 1: So there are numerous programs available today throughout this country
Speaker 1: that are now reaching out to a much more diverse
Speaker 1: population to make sure what we learned during COVID is
Speaker 1: we have to find a way to get healthcare to
Speaker 1: our entire population. And as you know, there's been a
Speaker 1: lot of research. The first thing that came out was
Speaker 1: that twenty minute subway ride from Manhattan up to the
Speaker 1: Bronx or so you reduce life expectancy by a decade
Speaker 1: or so, or if you look at other parts in Baltimore,
Speaker 1: I think life expectancy in the city is almost twenty
Speaker 1: years less than it is in the suburbs. So we
Speaker 1: know the problems, we have the data, and now we
Speaker 1: need to put the systems in place to take care
Speaker 1: of that shortfall in your book and enter the early
Speaker 1: innovation and finance turned out to be a template for
Speaker 1: much of what you all have accomplished in the search
Speaker 1: for faster cures. Your financial background, I'd be remiss if
Speaker 1: I didn't ask you, do you ever miss Wall Street
Speaker 1: or at least being involved specifically with a financial firm,
Speaker 1: either on Wall Street or out there on the West
Speaker 1: Coast in the day to day mind, if you will.
Speaker 1: The Milken Institute is heavily involved. Our Center for Financial
Speaker 1: Markets are global efforts creating new financial markets. And you
Speaker 1: make a very interesting point in that the analogy holds
Speaker 1: when I was a student at Berkeley after the Watts
Speaker 1: riots had occurred here in Los Angeles, when I was
Speaker 1: visiting on August eleventh, nineteen sixty five, I changed my
Speaker 1: major to focus on finance and access to capital. And
Speaker 1: then I met a young African American man who told
Speaker 1: me his father didn't have access to CAP because of
Speaker 1: the color of his skin, and nor would heat. And
Speaker 1: it didn't make any sense to me, and so I
Speaker 1: switched and I went back to Berkeley, and what I
Speaker 1: discovered was I could access data as a student free
Speaker 1: that allowed me to look at the history and books
Speaker 1: that have been written about credit, and what I discovered
Speaker 1: is what everyone was saying about credit was just wrong.
Speaker 1: The best credits happened to be entrepreneurs and companies. The
Speaker 1: worst credit was countries throughout all of history. But you
Speaker 1: couldn't access medical data. So today it's a totally different
Speaker 1: world than it was when I was at Berkeley almost
Speaker 1: sixty years ago. Today, this medical data exists. There's numerous
Speaker 1: companies that have loaded the data of individuals, their DNA,
Speaker 1: their microbiomes, their biological history, their clinical history. And so
Speaker 1: today a young student as I was at Berkeley could
Speaker 1: access this data as a medical student at a university
Speaker 1: today and test out their theories the same as I
Speaker 1: was able to test out my theories when I was
Speaker 1: both an undergrad and a graduate student. And that is
Speaker 1: why we're seeing this explosion of advances in medical research.
Speaker 1: We don't have to guess anymore of what is the
Speaker 1: potential best treatment for an individual or what their disease is.
Speaker 1: We now can identify what is that disease, just like
Speaker 1: we identified the DNA of the virus and COVID nineteen
Speaker 1: and then created vaccines against it. And that's the big
Speaker 1: We just got about thirty seconds, Mike. That's really the
Speaker 1: big game changer when we think about what takes us
Speaker 1: to the next level in healthcare. And again just got
Speaker 1: about twenty five seconds. Well, we're on the verge of
Speaker 1: our understanding of immunology to allow your own immune system
Speaker 1: to rehabilitate you to deal with disease. And the once again,
Speaker 1: the reason I wrote this book now is that we
Speaker 1: can seize defeat if we don't continue what we were
Speaker 1: able to accomplish during COVID. We are on the verge
Speaker 1: of a revolution that can eliminate many life threatened diseases
Speaker 1: for our children and our grandchildren if we just stay
Speaker 1: with it today. Well, so appreciate getting some time and
Speaker 1: looking forward to being with you and your team out
Speaker 1: there on the West Coast. Mike Milkin, thank you so much.
Speaker 1: As we mentioned, the new book is Faster Cures, Accelerating
Speaker 1: the future of health. Mike, thank you. You're listening to
Speaker 1: the Bloomberg Business Week podcast. Catch us live weekdays from
Speaker 1: two to five pm Eastern on Bloomberg Radio, the Bloomberg
Speaker 1: Business app, and you too. You can also listen live
Speaker 1: to our flagship New York station just say Alexa play
Speaker 1: Bloomberg E, Love and Dirty. Yeah, so we're going to
Speaker 1: talk about growing, specifically agriculture. A little bit of background everybody.
Speaker 1: Our Bloomberg New Economy team, they drawn insights from global
Speaker 1: leaders innovators along five editorial pillars Finance, Commerce, sustainability, resilience
Speaker 1: and security. They hold annual events around the world. They're
Speaker 1: just looking to get to the heart of our most
Speaker 1: important issues. And in keeping with that, they have the
Speaker 1: Catalyst program that they established in twenty twenty one. And
Speaker 1: this is a simple goal finding people whose innovation's efforts
Speaker 1: and objectives have a genuine shot at changing the world
Speaker 1: for better. So they are scientists, their entrepreneurs, their policymakers
Speaker 1: from all walks of life, but they all demand recognition,
Speaker 1: including our next guest, who is a member of the
Speaker 1: Bloomberg New Economy Catalyst Class of twenty twenty two, doctor
Speaker 1: annasjia Volkova. She is CEO and co founder of Regro.
Speaker 1: She's also included in Fast Companies list of the world's
Speaker 1: fifty most innovative companies of twenty twenty three, a twenty
Speaker 1: twenty MIT thirty five hundred thirty five innovator. When a
Speaker 1: BBC's Top one hundred Women. She's given two ted ex
Speaker 1: talks about egg technology, remote sensing and sustainable farming. I
Speaker 1: had to lay it out here because you are just
Speaker 1: a rock star. She's here in our Bloomberg Interactive Broker's
Speaker 1: Broker's studio. Welcome, welcome's delighted to have you, Carol. You
Speaker 1: got me blushing start bringing so hard during that it
Speaker 1: was amazing. I know, I know, I'm really sorry, but
Speaker 1: I think it's important to lay it out because you're
Speaker 1: getting noticed because of the work you're doing. First of all,
Speaker 1: welcome and thank you for coming in. You're having me
Speaker 1: and I am a little subjective. You are a Blueberg catalyst,
Speaker 1: but they choose really well and really smartly. Tell us
Speaker 1: about regrow and what you are doing. So you know
Speaker 1: how we have a climate crisis. Yeah, I heard. Good
Speaker 1: agriculture unfortunately has something to do with it, as opposed
Speaker 1: to being an industry that can heal the planet. That
Speaker 1: seems very odd, isn't it. It's the industry that really
Speaker 1: works on the land and therefore should probably be good
Speaker 1: for a climate. But in host World War two era,
Speaker 1: we decided we just need to feed everyone. At old costs.
Speaker 1: We needed to produce so that people wouldn't go hungry,
Speaker 1: so we wouldn't get another wool, and that was the
Speaker 1: optimization that we were running, so production right whatever, at
Speaker 1: all costs production, and we probably did not take the
Speaker 1: full cost accounting of the planet resources that we were
Speaker 1: growing on. And now agriculture contributes about a quarter of
Speaker 1: old greenhouse gases. Pretty staggrain, isn't it. That is pretty staggering.
Speaker 1: It is, And I mean there's so much negative that
Speaker 1: we could talk about with the climate crisis. The way
Speaker 1: you put it before when we were talking is that
Speaker 1: it's the eleventh hour for humanity, which really struck me.
Speaker 1: We'll go there. Why why is it the eleventh hour? Well,
Speaker 1: we are in a bit of a vicious cycle between
Speaker 1: agriculture contributing to emissions, and emissions making climate more volatile,
Speaker 1: which makes agriculture more uncertain, and the agricultural production more volatile,
Speaker 1: and it continues on. So we need to step out
Speaker 1: of that cycle and truly change the incentives away from
Speaker 1: profitability or simply production at old cost and production at
Speaker 1: a true cost accounting for the planet. Forgive me, Anastasia.
Speaker 1: I feel like people are gonna be like, I can
Speaker 1: have a grocery store. There's plenty of stuff there. I
Speaker 1: have no problem with this. So help us understand because
Speaker 1: you're to me saying crisis, right, and I've had We've
Speaker 1: had others who come on and talk about this same thing.
Speaker 1: But again, Mattie and I are going to go and
Speaker 1: we can buy probably whatever we want tonight for now
Speaker 1: because we're here in the US. Not everyone is as
Speaker 1: privileged as we are. And every year there's at least
Speaker 1: two major production regions, whether it's Ukraine or Brazil or Australia,
Speaker 1: that are experiencing just catastrophic with other events floods, droughts altogether.
Speaker 1: That is what, in a way is driving the cost
Speaker 1: of food up. So clearly everyone's notice, we're paying more
Speaker 1: even if you can get it now. Because this is
Speaker 1: one of the biggest economies in the world that will
Speaker 1: be driving demand supply towards us. It may be that
Speaker 1: we're currently doing it a bit of an expense of
Speaker 1: a global self. Well, that's such an important piece because
Speaker 1: even if we do have access to fresh produce, for
Speaker 1: example in the US, we're all feeling the financial impact
Speaker 1: that climate change is having on our food supply chains
Speaker 1: and groceries friendly is frankly is not what you judge
Speaker 1: it by because groceries you can have local supply chains
Speaker 1: or whether it's vertical farms, whether it's someone shipping it
Speaker 1: across the country. But it's truly the cost of substantial
Speaker 1: commodities like wheat or availability of sunflower oil. Post Ukrainian
Speaker 1: crisis has become a major topic in the industry. How
Speaker 1: are we shifting the production? What are we going to
Speaker 1: do about it? Unpacked that somewhere because I do feel
Speaker 1: like the Ukrainian or the Russian war invasion of Ukraine,
Speaker 1: which you are Ukrainian, So just because we want to
Speaker 1: talk to you a a little bit about that, but I
Speaker 1: think a year ago, all of a sudden we're like, whoa,
Speaker 1: we had no idea. What would we call it? The
Speaker 1: bread basket? Right, and to understand how much was in production.
Speaker 1: Talked to us a little bit more about that, and
Speaker 1: then thinking of that, like you said, it's not necessarily
Speaker 1: the stuff we go into the grocery stores. It's stuff
Speaker 1: like that the heart. Yeah, the massive brands that you
Speaker 1: buy in a grocery store, they all were sourcing from Ukraine.
Speaker 1: One commodity or the other eighty percent of the world. Sunflower,
Speaker 1: one of the main drivers behind vegetable oils, is produced
Speaker 1: in Ukraine eleven to fifteen percent of wheat. It's feeding
Speaker 1: not just Europe that does not have that production region,
Speaker 1: but also Africa other areas in the world. And when
Speaker 1: you start clogging up the food web that has been
Speaker 1: very resilient uple until that moment when you start to
Speaker 1: closing ports or weaponizing food, you really start feeling the
Speaker 1: impact of how important that production was for us to
Speaker 1: be in this fluid, ever balancing cycle of what felt resilient.
Speaker 1: It's going to get more out of hand with climate
Speaker 1: crisis really kicking in and wiping out harvests. And looking
Speaker 1: into your background as someone from Ukraine who had family
Speaker 1: there as well, can you talk a little bit about
Speaker 1: how that, combined with your expertise on the climate, has
Speaker 1: changed your perspective on certainly, And it's definitely a privilege
Speaker 1: to be sitting with you here and telling the story
Speaker 1: and drawing the attention to the Russian war on Ukraine.
Speaker 1: No one expected it, no one knew it was coming. Yes,
Speaker 1: there was invasion eight years ago, but it wasn't a
Speaker 1: full scale invasion and Ukraine is the definition of resilience
Speaker 1: amongst nations right now, and hopefully everyone can see that
Speaker 1: they continue to farm, They continue to literally pick minds
Speaker 1: and drones out of the fields, to continue to plant
Speaker 1: or harvest or fertilize crops or whatever they need to do,
Speaker 1: because they know that's their responsibility for themselves as well
Speaker 1: as the world. And I hope that the world will
Speaker 1: take on a little bit of responsibility for the security
Speaker 1: of such an important country. What do you think the
Speaker 1: world is missing when it comes to the war in Ukraine.
Speaker 1: I guess there's just a lot of misconceptions around. Oh
Speaker 1: maybe if we empower Ukraine then they will be also
Speaker 1: able to take back some more territories there fighting for
Speaker 1: their lives, and I think Europe is very vocal about
Speaker 1: it internally, but there's certainly not yet a critical mass
Speaker 1: to say, how do we put a stop to it?
Speaker 1: President Zelenski tell us, how do we put a stop
Speaker 1: to it? We will support that plan. Let's go and
Speaker 1: execute against that plan rather than trickling the support in
Speaker 1: which just results in frankly more dead children in Ukraine
Speaker 1: right now. Yeah, I just think so much about the
Speaker 1: ptsdpiece as well like, even if let's say the war
Speaker 1: ended right now, it's not like everything would go back
Speaker 1: to normal overnight and the wheat supply would suddenly be
Speaker 1: back to normal, or the buildings would resurrect themselves right
Speaker 1: and people could just easily just go back to the
Speaker 1: way it was completely And I think even with agricultural
Speaker 1: crisis land or into the war, and we haven't even
Speaker 1: started talking about the energy angle into it, because agriculture
Speaker 1: is so connected to the supply of fertilizer that depends
Speaker 1: on the primary energy sources into the cost in a
Speaker 1: big way. It feeds into the cost and frankly just
Speaker 1: controls controls the Asians exports, imports, what they buy, how
Speaker 1: much food security they have. We are not going to
Speaker 1: be able to see that overnight go back. It's agriculture
Speaker 1: isn't at least an annual cycle, if not a multi
Speaker 1: year cycle. We have about a minute. Then we're going
Speaker 1: to come back and continue the conversation. But what do
Speaker 1: you say to people again who are like, we're fine.
Speaker 1: You know, people used to talk about too. You know,
Speaker 1: the world's falling, and we come back, we bounce back.
Speaker 1: We're gonna have food, We're gonna be fine. So imagine
Speaker 1: during those times of civil war in Ukraine that everyone
Speaker 1: went to school. Sorry, civil war in the US is
Speaker 1: what it feels like in Ukraine. Can you possibly imagine
Speaker 1: that the times would have turned, that there wouldn't be
Speaker 1: one country with all the states, that someone would be
Speaker 1: shooting somewhere right now, one hundred people a minute. What
Speaker 1: would that feel like? That would feel really odd, bizarre,
Speaker 1: and you wouldn't put a stop to it immediately. That's
Speaker 1: what it feels like. So we've been talking about your company,
Speaker 1: tell us specifically about the work you're doing and the
Speaker 1: impact you're having. Yeah, we talked about Ukraine. We talked
Speaker 1: about climate and how do we change the way that
Speaker 1: we manage agriculture by optimizing for what the planet needs
Speaker 1: to get from us, not only give us. That is
Speaker 1: a question of information and insights and do the right
Speaker 1: people who are making decisions, Do they see the true
Speaker 1: cost accounting? Do they see how farming is taking or
Speaker 1: giving to the environment? And Regrow does just that. We
Speaker 1: provide insights to large companies all across the agriculture and
Speaker 1: food supply chain to help them see their so called
Speaker 1: Scope three emissions or the emissions on the farm and
Speaker 1: help lower them so they can be part of creating
Speaker 1: the better future. Today is to eat to some extent
Speaker 1: as stage to have to think about. Okay, so you're
Speaker 1: doing something, you need to think about there's actually a
Speaker 1: dollar value on the cost of how we impact our climate.
Speaker 1: That's need to think about it that way. That's exactly
Speaker 1: it like incorporating that cost of externality. So for example,
Speaker 1: if we're treating soil poorly and we till it a lot,
Speaker 1: we actually are reducing its resiliency and we are not
Speaker 1: going to capture as much water the next time we
Speaker 1: have a flush, flood, rain event, anything, and we see
Speaker 1: the effects on that and for example Central California, Central
Speaker 1: Valley compared to if we were actually putting the investment
Speaker 1: for the long term, we would see the resilience and
Speaker 1: it would pay off and we would not have the
Speaker 1: shocks to the yield an agricultural system in the worst
Speaker 1: years and the best years. Where are you seeing the
Speaker 1: most buy in for change from like the farmer all
Speaker 1: the way to the CEOs of big banks. Yeah, everyone
Speaker 1: actually is aligned on the mission of this is one planet.
Speaker 1: In Nobody in agriculture and food industry will literally have
Speaker 1: any businesses if we don't invest in this. So what
Speaker 1: do you say, you mean everyone is aligned? They are aligned.
Speaker 1: Actually they Yes, we need the future, we need resilience,
Speaker 1: We need it now. So farmers, the big food companies, farmers,
Speaker 1: their most important agenda is to pass the land and
Speaker 1: next generation the company's perpetual planet profits. How are they
Speaker 1: going to get into that world if they don't invest
Speaker 1: in it now? Banks alike in a little bit, but
Speaker 1: they're trying to catch up. But the industry that so
Speaker 1: clearly has experienced the shocks is working on it together.
Speaker 1: Can we tell you got an award today, Yes, of course,
Speaker 1: a UBS award, Yes, for being a global visionary. Okay,
Speaker 1: so there you are, UBS, big bank. What kind of
Speaker 1: conversations were they having in their thoughts because money makes
Speaker 1: things happen, yes, and they want to guide their customers,
Speaker 1: their clients to invest more sustainably, to invest in the
Speaker 1: solutions to the future that will build the resilience in
Speaker 1: the portfolio of their customers, in the portfolio of these industries.
Speaker 1: Massive industries where now rewiring to be optimizing for the
Speaker 1: future of the planet, not just profit both. And we
Speaker 1: were talking about the difference between short term profitability and
Speaker 1: long term Have you found that discussion to get easier
Speaker 1: over time getting people? Yeah? Tell us the breakdown? All right, Okay,
Speaker 1: those who are watching on YouTube and Blueberg originals can
Speaker 1: see I think her face on a stage's face, or
Speaker 1: maybe they didn't butt she was like a little yeah,
Speaker 1: a little bit skeptical. Skeptical, that's a good word. Um. Yes,
Speaker 1: I think the long term discussion, it's very hard to
Speaker 1: quantify the benefits of long term value of resilience. That
Speaker 1: is where the sticking point is. How about a word
Speaker 1: for you existence? M Okay, sorry, yes, yes, that is
Speaker 1: truly the award the ability for them to continue to exist.
Speaker 1: But I think in our in the corporate mentalities, what
Speaker 1: we're seeing is you often need to show this is
Speaker 1: the cost benefit. The benefits will come in later on years,
Speaker 1: in the years to come, decades to come. The companies,
Speaker 1: frankly that are still held by families do not have
Speaker 1: any questions to this. They investing their running towards net zero.
Speaker 1: They have earlier goals twenty twenty five. The public companies
Speaker 1: are still trying to align and all the stakeholders. But
Speaker 1: I think about like you know, we talk so much
Speaker 1: about semiconductors, so important to so much in our world
Speaker 1: right now. And you know, whether it's an INTEL in
Speaker 1: AMD at TSMC, if they're going to build a new facility,
Speaker 1: it's a lot of money, it's going to take a
Speaker 1: while to get there. I mean oil companies where you're
Speaker 1: doing drilling, a lot of money, a lot of planning.
Speaker 1: It takes a while. It's the same kind of thinking,
Speaker 1: the same mindset absolutely. So you provide data information and
Speaker 1: then what kind of what do your clients and composibility.
Speaker 1: First of all, we help them understand. So you have
Speaker 1: global sourcing from older regions in the world, or even
Speaker 1: local sourcing. Where are your emissions, where a farming practices
Speaker 1: so good for the planet you don't have to worry
Speaker 1: about it, and where they need some improvement, and how
Speaker 1: can you actually participate and incentifize that improvement. Whether you're
Speaker 1: a food manufacturing company, a grocery retail, whether you are
Speaker 1: a trader aggregator, whether you are a farmer yourself, whether
Speaker 1: your financial institution that's landing to that farmer or even
Speaker 1: holding the land acid there is something you should be
Speaker 1: taken off and adding back into that margin on the
Speaker 1: farm so they can invest in sustainability. Can you give
Speaker 1: us one sweet thought as we get ready to go
Speaker 1: into a long weekend, have about a minute left of
Speaker 1: a company or institution that you worked with and what
Speaker 1: they did with it? Yes? So, for example, Kellogg is
Speaker 1: a wonderful example. They brought sustainable rice products such as
Speaker 1: their special keys and crispies to the Wilmert shelf through
Speaker 1: investing on farm into emissions reduction, and they were able
Speaker 1: to tell that story to consumer so that mom will
Speaker 1: be in Walmart this weekend picking something nice, can feel
Speaker 1: good about that purchase, decisions good for the planet. That
Speaker 1: is such a great example and also reminds me to
Speaker 1: ask you quickly. We have like thirty seconds not just offsets,
Speaker 1: right actually yea yeah, yeah, definitely value chain supply chain
Speaker 1: action together with all the partners insets, let's reduce what
Speaker 1: we currently admit. Let's not upset. Yeah, that is such
Speaker 1: a big I think. I'm so glad you brought that
Speaker 1: up because it isn't just a bout offsetting, it's actually
Speaker 1: reducing your impact. We need to work on it together
Speaker 1: if we are to exist. Come back, let us know
Speaker 1: how your work is going. Really glad a very thoughtful conversation,
Speaker 1: very relevant in terms of some of the huge issues
Speaker 1: that are facing our world right now. And Astasia, thank you,
Speaker 1: congratulations on your award. Thank you many many award exactly
Speaker 1: at a stage of acova. She is co founder and
Speaker 1: chief executive officer of Regro. Joining us here in our
Speaker 1: Bloomberg Interactive Broker's studio. You're listening to the Bloomberg Business
Speaker 1: Week Podcast got us live weekdays from two to five
Speaker 1: pm Easter on Bloomberg Radio, the Bloomberg Business app band
Speaker 1: You too. You can also listen live to our flagship
Speaker 1: New York station Just Say Alexa Play Bloomberg e Love
Speaker 1: and Verdi trol Master back with you, along with Madison
Speaker 1: Mills and Bloomberg Quietake Mattie. You know we love Bloomberg pursuits.
Speaker 1: We always get a taste of the ultra exotic and
Speaker 1: luxurious when we get toward the back of Business Week magazines.
Speaker 1: My favorite part, it's so it's so fun to pretend
Speaker 1: that I can afford these things. Right. This week's section
Speaker 1: simply titled the Watch Special, and who better than pursues
Speaker 1: editor Chris Rouser to walk us through it. He's back
Speaker 1: from his trip to the recent Watches and Wonders trade
Speaker 1: Expo in Geneva, Switzerland, with some insights on some of
Speaker 1: the finest time pieces on the planet and the big
Speaker 1: industry trends to watch in twenty twenty three. All right, Chris,
Speaker 1: we know that you and your team get some nice
Speaker 1: gigs around the globe. YouTube were so glad you got
Speaker 1: to take this trip. We know you love watches. First
Speaker 1: of all, tell us about what is Watches and Wonders.
Speaker 1: Watches and Wonders is a giant trade fair where all
Speaker 1: a lot of the really big luxury watch brands come
Speaker 1: about forty brands and showcase their new wares to journalists
Speaker 1: and also to retailers because a lot of these brands
Speaker 1: sell through retail boutiques like Torneau in New York and
Speaker 1: went Band and Stuff. And it's basically where everyone sees
Speaker 1: the new watches and all high end, not all crazy
Speaker 1: high end. Like there's the main fair that has a
Speaker 1: lot of big brands that you heard of, like Rolex
Speaker 1: and Protect Phillip, and then around the fair there's all
Speaker 1: these like little satellite things where people occupy hotel rooms
Speaker 1: and lobbies and they meet and try to, you know,
Speaker 1: impress new people. And some of those watches are, you know,
Speaker 1: as little as three hundred dollars. What was the most
Speaker 1: interesting watch that you saw? Most interesting watch that I saw?
Speaker 1: That is a good question. That's like asking apparent their
Speaker 1: favorite child. Do you know what this guy loves? I know, well,
Speaker 1: I guess well. Protect Phillippe had this this travel watch
Speaker 1: which has two time zones on it, and it's a
Speaker 1: twenty four hour dial, so instead of what do you know,
Speaker 1: having twelve hours on the dial, it's twenty four hours
Speaker 1: and it starts at the foot of the watch, like
Speaker 1: where you normally have six o'clock, so it I looked
Speaker 1: at it and I was like, my eyes can't make
Speaker 1: this make sense. But it was so beautiful and I
Speaker 1: loved it, and it fit the work the risk perfectly,
Speaker 1: and it was it was probably one of the ones
Speaker 1: that I would have wanted to take home. So cool.
Speaker 1: All right, So take us to we want to get
Speaker 1: into this specific coverage, but a little bit more on
Speaker 1: the event, like the mood and everything, right, because I
Speaker 1: feel like we've all been getting back post pandemic, So
Speaker 1: it's a second one that they've had post pandemic. And
Speaker 1: it's actually a combination of two fairs. One that was
Speaker 1: in Basel Bozel World, which was humongous, and then this fancy,
Speaker 1: smaller one called at Sah. They came together two years ago.
Speaker 1: But last time last year, none of the Asian markets
Speaker 1: were there because they couldn't travel because like China was
Speaker 1: locked down, Japan everything, And it really felt last year
Speaker 1: like it was a fair for European guys in blue
Speaker 1: suits with fancy hair, and I was like, oh, I
Speaker 1: didn't love it. And then this year it felt like
Speaker 1: it was the whole world of watches, which was really great,
Speaker 1: and then Vibe was really good. There was a lot
Speaker 1: of news that came out of it. It It was really fun.
Speaker 1: All Right, we've gotten to talk about the cover because
Speaker 1: Mattie and I both I think it's fair to say
Speaker 1: I've been drooling over this, but it was also a
Speaker 1: watch that made a huge flash a year ago. Right, Yes,
Speaker 1: So I wanted to do a feature on Van Cleveland Arpels,
Speaker 1: which is a Reschmot brand, and they're mostly known as
Speaker 1: a jewelry brand. You probably know their Alambro bracelets, Lebron,
Speaker 1: James wars One, but I love their watches and they
Speaker 1: make all these crazy like jeweled watches and then also
Speaker 1: really interesting watches technologically wise, like they have really cool functions.
Speaker 1: And last year, you know, sometimes people ignore Van Cleef
Speaker 1: because it's because it's Julie Rand. Last year they stole
Speaker 1: the show with this watch, the Lady arpels Er Floral,
Speaker 1: which has all these little flower buds on these little
Speaker 1: enamel flowers that pop open bite for each hour. So
Speaker 1: you look at your watch and you're like, what time
Speaker 1: it is? It's not efficient for telling time, but you
Speaker 1: watch you're like, what time is it? And you see
Speaker 1: how many of the little flowers are open, which reveal
Speaker 1: diamonds and sapphires on the insta. You have to count them.
Speaker 1: You have to count them, and they don't open in
Speaker 1: the same order ever, It's always random, so you have
Speaker 1: to like poke around and look. But watching the hours
Speaker 1: change through these little flowers opening is such like just
Speaker 1: a wonderful, peaceful experience and it's a really cool technology
Speaker 1: that makes it happen that I m that everyone was
Speaker 1: talking about it last year and so that everyone came
Speaker 1: to the fair this year saying what is Van Cleef
Speaker 1: going to do? What? You know, and they showing up
Speaker 1: with this booth. They have this crazy booth. The booths
Speaker 1: are like the size of how is bigger than the
Speaker 1: house I grew up in? And they had they had
Speaker 1: like twelve thousand leaves of morano glass handblown and then
Speaker 1: making this like jungle in the booth. It was just
Speaker 1: like an incredible place to be um and so we
Speaker 1: wanted to feature them, and so that's what the lead
Speaker 1: story on the section is. I just want to know
Speaker 1: that like when you went over to look at it
Speaker 1: in the booth, like did jovison here's music like a
Speaker 1: little because you know, actually yes, because they play They
Speaker 1: have these automatons which are which are totally mechanical devices
Speaker 1: that like do you remember the movie Hugo with a
Speaker 1: doll that's an automaton, and so they have they sell these.
Speaker 1: They don't tell you how much they are, but they're
Speaker 1: like millions of dollars um. Like you'll be looking at
Speaker 1: this sculpture and suddenly this music will start playing because
Speaker 1: it's a music box, and this big flower will open
Speaker 1: and this little not actually a little big like jeweled
Speaker 1: butterfly will float up and flap its wings and turn around,
Speaker 1: and it's all because someone wound, a crank and it's
Speaker 1: just a very cool, surreal experience. Can you just give
Speaker 1: us a little bit in terms of what these things cost? Well,
Speaker 1: so Van Cleef, like an introductory watch will cost like
Speaker 1: seventy five hundred dollars, eight thousand dollars, but there are
Speaker 1: not a lot of those on the website. If you
Speaker 1: go and look, it's a lot of really cool watches
Speaker 1: where you tell the time by like two people walking
Speaker 1: across a bridge and kissing each other on the face
Speaker 1: of the dial, and those watches can be like four
Speaker 1: hundred thousand dollars more than that. But it makes sense
Speaker 1: to me that they would be leaning into this kind
Speaker 1: of experience of a watch as opposed to actually telling time,
Speaker 1: because we don't need watches to tell time anymore, right, yeah,
Speaker 1: and what exactly? And certainly it's not efficient to be
Speaker 1: counting flower blossoms. Ye, But they you know, they know
Speaker 1: that what people love about mechanical watches as opposed to,
Speaker 1: you know, a smart watch is that there's all this
Speaker 1: crazy technology inside that's like that's really old. But has
Speaker 1: you know, took someone so long to figure out how
Speaker 1: to make this happen without electrical power that's what fascinates
Speaker 1: people about these watches. Is this a good business for
Speaker 1: Van Cleef in our house? Yeah, I mean it's not
Speaker 1: a big part of their business because their jewelry business
Speaker 1: is okay, so big. It's like them in Cartier at Richmont,
Speaker 1: But yeah it is. It's it's a growing business for them.
Speaker 1: It's stunny and I highly recommend folks go online get
Speaker 1: the magazine. Um, you gotta go and just look at
Speaker 1: it because it's and just expect to jewel a lot. Um.
Speaker 1: Can we talk about protect Philippe? Am I saying it correctly?
Speaker 1: I always have to google how to pronounce it roughly
Speaker 1: roughly that, yes, I say. I asked Chris how to
Speaker 1: pronounce it right before we started. A lot of people say, Paddock,
Speaker 1: I don't know that you need to say that. We
Speaker 1: interviewed the chairman, the president, who is really the boss.
Speaker 1: He's family company Terry Stern, who is like a really lovely,
Speaker 1: jovial guy who have known for years. It's hard to
Speaker 1: get interviews with him because everybody in the watch world
Speaker 1: wants to talk to him. And last year they discontinued
Speaker 1: the Nautilus, which was their signature watch, which everybody like
Speaker 1: was trying to get now the second the secondhand market
Speaker 1: prices are insane um, and he discontinued it because he
Speaker 1: didn't want his whole company to be about this one
Speaker 1: particular watch. UM. And so I went in with Andy Hoffman,
Speaker 1: who's our Geneva based industry order who's so great, and
Speaker 1: we were like, I wonder if he'll tell us about
Speaker 1: like a new watch, like what are his new plans?
Speaker 1: Oh gosh, And we sat down with him and he
Speaker 1: told us like everything, it's amazing, that's amazing. We've got
Speaker 1: this new watch company did yeah, And we have such
Speaker 1: a lovely conversation. He told us about this new watch.
Speaker 1: They are going to come out with a new watch,
Speaker 1: their first new watch in twenty years, more than twenty years,
Speaker 1: and um, you know, of course now the watch world
Speaker 1: is like drooling over it. And he talked about how
Speaker 1: he's handing a company off to his two sons. Love
Speaker 1: that part, yeah, who he didn't want a force to
Speaker 1: join a potech but he you know, was like, you
Speaker 1: guys don't have to do this. And he said the
Speaker 1: minute we told them they don't have to do this.
Speaker 1: When they were in high school, their grades got better
Speaker 1: because they were stressed out, and then now they're twenty
Speaker 1: one and twenty two and they decided they want to
Speaker 1: do it. Um. He also talked about how he buys
Speaker 1: watches back on the secondary market, like if he sees
Speaker 1: a watch that just came out on like a retail
Speaker 1: resale site, he'll buy the watch back, look at the
Speaker 1: number on it, figure out who sold the watch, like
Speaker 1: which of his stores sold the watch, and call them
Speaker 1: up and be like, you sold this to a flipper?
Speaker 1: What are you doing? That? I thought too was also fascinating,
Speaker 1: that very terrifying. I mean, it's giving House of Gucci
Speaker 1: like that stressing me outside the employees. But what's so
Speaker 1: interesting me too on this just because I'm not in
Speaker 1: like the wealth market for these brands. I know of
Speaker 1: Patech Philip from Succession because it's the watch that Tom
Speaker 1: buys logan like the richest Man on Earth and says
Speaker 1: it's incredibly good. At telling time, We're going to do
Speaker 1: a massive feature on Matt. I know. I'm really sorry
Speaker 1: she relates to the world to the Succession. No, it's great,
Speaker 1: but well, but it relates to one of the questions
Speaker 1: you asked him that like they don't experience macro headwinds
Speaker 1: like at all, not at all? Yeah, yeah, which is
Speaker 1: it's not just because it's such a strong company with
Speaker 1: a strong audience. They're very smart. Like Black they didn't
Speaker 1: overexpand in China over the past decade, which meant that
Speaker 1: when China crackdown on gift giving, which was a huge
Speaker 1: thing that really hit the whole industry, they were not
Speaker 1: royaled by it, where a lot of other companies like
Speaker 1: really got stuck. All right, unfortunate ly me only have
Speaker 1: about thirty forty seconds left here? Where do you want
Speaker 1: to wrap up with? Oh? My favorite watches were the
Speaker 1: Tutor Black Bay fifty four, which is a smaller size watch,
Speaker 1: so cute and I'm kind of affordable. Yeah yeah hundreds
Speaker 1: um and vast Constantine sorry world on that Vastron Constantine
Speaker 1: has an overseas moon phase retrograde date, which is just
Speaker 1: which means it counts to time sort of in an
Speaker 1: arc and then the hand flips back. Um. And it's
Speaker 1: so cool looking and I think anybody who wants to
Speaker 1: like impress everybody around them they should get that. Maddie,
Speaker 1: which watch do you want? I want anything? Cardier Cardia
Speaker 1: had some really good stuff. And I have to say
Speaker 1: there's a great little at the end um of a
Speaker 1: chronometer which is on the clock that people a mechanical
Speaker 1: cloth that keep people keep on boats to help with them.
Speaker 1: I'm a sailor and I didn't even know how to
Speaker 1: pronounce that. Only one company really makes them anymore. Yeah, well,
Speaker 1: because you know you have all these electronic example is
Speaker 1: the company, but the electronics sometimes go out. We're just
Speaker 1: gonna say, I love this, so glad you got to
Speaker 1: do this, and we're so glad we got to share
Speaker 1: this with you. Um, Chris, thank you so much. You're
Speaker 1: listening to the bloomberth This Week podcast. Catch us live
Speaker 1: weekdays from two to five pm Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business app band You two. You can also
Speaker 1: listen live to our flagship New York station, Just Say Alexa,
Speaker 1: Play Bloomberg, E Love and thirty. Well. Check out this
Speaker 1: company's website and they are making a promise to their customers.
Speaker 1: It's all about making gear for good out dear gear
Speaker 1: clothes that are in their words, as ethically and sustainably
Speaker 1: as possible, and then paying it all back. It's an
Speaker 1: idea that we know we talk about increasingly matters to
Speaker 1: shoppers at society at large. So let's get into it
Speaker 1: on the company, on the mission and the outlook. Joining
Speaker 1: us is Grace Sunset. She is Chief People an Impact
Speaker 1: Officer at Cotapaxi, and she joins us here in our
Speaker 1: Bloomberg Interactive Broker studio. Full disclosure. We meet at a
Speaker 1: dinner or again at a dinner earlier this year, and
Speaker 1: I'm like, you gotta come on, you gotta come on.
Speaker 1: How are you. I'm doing well, It's so great to
Speaker 1: see you. It's so great tell us about the company.
Speaker 1: And as I said before we got on air, you know,
Speaker 1: one of our colleagues, it was like, oh my god,
Speaker 1: I can't believe you're having them on. I love their
Speaker 1: tell us about Cotapaxi. Codeapaxi is an outdoor gear company
Speaker 1: that makes the majority of its products out of remnant,
Speaker 1: recycled and responsibly sourced material. So we start with that.
Speaker 1: But the most fascinating thing about Cotapaxi that draws people
Speaker 1: into the brand is that one percent of our product
Speaker 1: sales goes to the Cotapaxi Foundation that sole mission is
Speaker 1: to eradicate poverty in our lifetimes. So we're really broadening
Speaker 1: that definition of human sustainability to include people in society
Speaker 1: and ways that are new for the outdoor industry and
Speaker 1: certainly new for the fashion industry at large. Your supply chain,
Speaker 1: and you talk about sustainable because before we got going again,
Speaker 1: like the fashion industry not good on the environment. Yeah,
Speaker 1: how resilient is that supply chain? And talk to us
Speaker 1: a little bit about it and how it all works. Yeah,
Speaker 1: you know you're supplying from definitely, so we are supplying
Speaker 1: from you know, global markets, like many retailers are. The
Speaker 1: way in which we make the products out of this remnant, recycled,
Speaker 1: repurpose material means it's less resource intensive, it's less water intensive,
Speaker 1: it results ideally and less waste because of the quality
Speaker 1: of the product that we're bringing to market. And we're
Speaker 1: very transparent. In fact, less than one percent of our
Speaker 1: net revenue is attributed to the carbon impact that we
Speaker 1: have in our brand. So we measure it, we're transparent
Speaker 1: about it, we own it, and we have a phenomenal
Speaker 1: product design team that's always looking at new and better
Speaker 1: ways of making great products out of remnant material. I
Speaker 1: love that so much, and I feel like when I've
Speaker 1: spoken with other CEOs. They always talk about the importance
Speaker 1: of partnerships in achieving those goals. And I know you
Speaker 1: partner with the IRC other big organizations. How critical has
Speaker 1: that been to your success in achieving your goals? It's
Speaker 1: been huge. How we define sustainability, we think about it
Speaker 1: as human sustainability to meet the needs of the present
Speaker 1: without compromising the ability of future generations to meet their
Speaker 1: own needs. It's a much broader remit than just thinking
Speaker 1: about the environment or climate change or global warming. It
Speaker 1: involves people. And so when we think about our impact parts,
Speaker 1: we look at outcomes. We look at the organizations that
Speaker 1: are really driving outcomes, whether it's in access to water,
Speaker 1: clean water, if it's fighting malaria which is only grown
Speaker 1: with increased temperatures and spreads of diseases and impoverished communities.
Speaker 1: We look at education of young girls, so things that
Speaker 1: we know that are proven to result in outcomes of
Speaker 1: alleviating poverty and getting people on a better track grace.
Speaker 1: How easy or hard is this to do? Because you know,
Speaker 1: I think, and I can't remember if you and I
Speaker 1: talked about this a little bit, but I always do
Speaker 1: feel like love companies like this, and I do think
Speaker 1: consumers increasingly want to shop and buy from companies like
Speaker 1: this as a company in terms of thinking about okay,
Speaker 1: but you gotta make money too, right, You got to
Speaker 1: keep the business going. So how easy or hard is
Speaker 1: it to have this mission and do good and then
Speaker 1: also make it a profitable company? Right? So it is
Speaker 1: hard because there are trade offs. There would be easier
Speaker 1: ways of doing things. What's the biggest tradeoff? Well, I
Speaker 1: think the biggest tradeoff is probably being more intentional about
Speaker 1: that product, supply chain running, how we're making the product,
Speaker 1: and we could probably have shortcuts or other ways of
Speaker 1: doing things right, we would rather do it right. But
Speaker 1: I think one of the biggest trends that's happening around
Speaker 1: ESG that's fascinating to me at least is the rise
Speaker 1: of the public benefit corporation, where the best interest of
Speaker 1: the corporation historically has been thought as maximizing shareholder value,
Speaker 1: but public benefit corporations allow for this broader discussion on
Speaker 1: stakeholders and they include society and environment. So we have
Speaker 1: a board, we have a management team that we are
Speaker 1: a public benefit corporation COTAPAXI is a public benefit corporation
Speaker 1: and we have the legal structure that actually enables us
Speaker 1: to behave this way, and oftentimes you see ESG put
Speaker 1: in a corner, put in a department. Maybe it's a
Speaker 1: part of marketing or a part of the brand, and
Speaker 1: it's not integrated in the business model. And that's what
Speaker 1: I think is so exciting watching that people keep talking, Well,
Speaker 1: that's right, and that's what I think is so exciting
Speaker 1: about CODAPAXI. It plays a role in our recruiting and
Speaker 1: our retention, getting people on board to be a part
Speaker 1: of something that's truly bigger than ourselves. I was going
Speaker 1: to ask about it exactly that, because I've also heard
Speaker 1: from different employers that talent retention and climate goals are
Speaker 1: directly linked because young talent they just won't sign on
Speaker 1: for a job where that's not part of the business mission.
Speaker 1: Are you hearing that from the folks that you hire
Speaker 1: as well? Oh? Absolutely, And I think, to be honest,
Speaker 1: I think that's what draws a lot of talent to
Speaker 1: the outdoors industry in general. We have a pretty good
Speaker 1: reputation for being leaders in that area. But what's unique
Speaker 1: about Coda Paxie is it's creating through its color and
Speaker 1: it's optimism and its joy a much more inclusive approach
Speaker 1: to this as well, and attracting underrepresented communities to kind
Speaker 1: of join us and have the outdoors be a greater
Speaker 1: part of their life. That's not always the case, because
Speaker 1: right sometimes the outdoor industry can be right, a little
Speaker 1: exclusive data verse communities, Right yeah, Right. You see someone
Speaker 1: that doesn't look like the three of us here, you know,
Speaker 1: scaling a mountain or doing something heroic, and you say
Speaker 1: to yourself, well, I can't be a part of that.
Speaker 1: So Coda Paxie's brand mission and brand goal is to
Speaker 1: allow for adventure to be anywhere in all different types
Speaker 1: of forms, and that we can do good everywhere together.
Speaker 1: All right, So you know we're bloomberg. So I'm going
Speaker 1: to ask you, I, what's kind of the conversations you
Speaker 1: guys are having about the current kind of consumer environment,
Speaker 1: economic environment, market environment. You know, internally we talk a
Speaker 1: lot about, you know, how can we preserve our growth?
Speaker 1: I mean, CODEAPAXI was very lucky last year. We grew
Speaker 1: nearly one hundred percent year over a year in our
Speaker 1: top line. There's something that we're doing that's working, and
Speaker 1: so we want to double down on that. We want
Speaker 1: to be true to our core values and be mindful
Speaker 1: and sensitive about dynamics that are you know, out of
Speaker 1: our control. You know, we air fraighted you know, some
Speaker 1: product and we didn't like doing it last year. We're
Speaker 1: going to be doing it less of this year, and
Speaker 1: I'm looking at opportunities across our supply chain to have
Speaker 1: that impact that's true to our mission and our vision.
Speaker 1: And it is global, you say, right, and your your
Speaker 1: supply chain, Yes, we work. We work with suppliers all
Speaker 1: over the world in designing our product, and we empower
Speaker 1: our workers that are affiliated with our brand, with our
Speaker 1: in our supply base to make you know, even better
Speaker 1: design decisions around our products. The Delda bag, which is
Speaker 1: known for its bright colors and its remnant material, is
Speaker 1: often designed by the workers at the site. We power
Speaker 1: them to come up with the designs and the way
Speaker 1: that things should look. So we have a smaller supply base,
Speaker 1: kind of a concentrated group of suppliers that we work
Speaker 1: very very closely with. We'll work with them on insetting
Speaker 1: projects we've done, you know, organic gardens in different sorts
Speaker 1: of projects to improve the quality of life, living wages
Speaker 1: and working with fair trade USA to certify some of
Speaker 1: our suppliers to uphold their standards as well. And I
Speaker 1: guess what I want was curious about that in this
Speaker 1: line of questioning, is is it getting easier meaning that
Speaker 1: there's more, you know, entities out there around the world
Speaker 1: that do have a sustainable mission or thinking about their
Speaker 1: impact on the environment and impact on people. Are there
Speaker 1: more out there that give you more choices? Is that growing?
Speaker 1: I'm going to be optimistic and say we're moving in
Speaker 1: that direction, and I think in the ALGI industry it's
Speaker 1: still tough. But in this industry, you're seeing a lot
Speaker 1: of great brands come together to try to grow the
Speaker 1: pie and work together to create solutions, which I'm really
Speaker 1: optimistic about. And that's where COTAPAXI plays. I think that's
Speaker 1: that's so cool and I feel I also wanted to
Speaker 1: talk to you about like inflation and consumer demand, but
Speaker 1: we're a little low on time to get into all
Speaker 1: of it. With this inflation is still a problem for
Speaker 1: you guys real quickly. Oh for I mean for sure,
Speaker 1: And I think that we look at pricing and we
Speaker 1: look at what's reasonable to charge for a jacket or
Speaker 1: a pack. We've always been you know, really thoughtful about
Speaker 1: how we managed the P and L, how we manage cash.
Speaker 1: We've been profitable for years, which is sort of less
Speaker 1: heard of in a high high growth consumer business, and
Speaker 1: we've been super you know, kind of sensitive to passing
Speaker 1: along any increases that we're having to our fans and
Speaker 1: our consumers as well. So much fun. Come back soon,
Speaker 1: Thank you all, well, thank you for so good Grace
Speaker 1: Sundset she's Chief People an impact officer at COE to PAXI,
Speaker 1: joining us here in our interactive broker studio. You're listening
Speaker 1: in watching Bloomberg Business Week, and this is Bloomberg Radio.
Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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