WEBVTT - Outlook for Rx Drug Pricing, 2020 Global Trends 0:00:00.440 --> 0:00:02.960 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.040 --> 0:00:05.480 Jason Kelly. We're here every day bringing you the latest 0:00:05.519 --> 0:00:09.840 news from the world's of business and finance, plus technology, politics, economics, 0:00:09.880 --> 0:00:13.480 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.480 --> 0:00:16.639 not to mention our hundred journalists and analysts more than 0:00:16.680 --> 0:00:19.280 a hundred and twenty countries. You can download Bloomberg Business 0:00:19.320 --> 0:00:22.200 Week on iTunes, SoundCloud, or Bloomberg dot com. You can 0:00:22.200 --> 0:00:24.520 also listen to our radio show weekdays at two pm 0:00:24.520 --> 0:00:28.400 Eastern only on Bloomberg Radio. Let's get into what is 0:00:28.440 --> 0:00:32.839 happening overseas and obviously is among the most read stories 0:00:32.880 --> 0:00:35.840 capturing a lot of attention moving markets, and it's those 0:00:35.880 --> 0:00:41.879 air strikes against Iran, the response both political and military. 0:00:41.960 --> 0:00:45.280 Nick Wadhams Joints, the State Department reporter for Bloomberg, joining 0:00:45.360 --> 0:00:47.920 us on the phone from Washington. He has been tracking 0:00:47.960 --> 0:00:51.080 this minute to minute. Nick, thanks so much for joining us, 0:00:51.440 --> 0:00:54.320 Thanks for having all right, so give us the latest here. 0:00:54.560 --> 0:00:57.280 We have a pretty good sense of what's happened over 0:00:57.320 --> 0:00:59.840 the last twenty four hours. What's happening now and where 0:00:59.840 --> 0:01:02.880 do we go? Well, what you're seeing now is the 0:01:02.960 --> 0:01:07.920 administration really now focusing on the messaging that follows what 0:01:08.000 --> 0:01:13.920 was an extremely bold and really unprecedented strike, an attack 0:01:13.959 --> 0:01:17.280 on a on a one of Iran's most prominent figures. 0:01:17.360 --> 0:01:20.720 One one official told me it was equivalent to killing 0:01:20.880 --> 0:01:24.600 the guy who was a combination of CIA director and 0:01:24.680 --> 0:01:29.119 Defense secretary rolled into one so and then to top 0:01:29.160 --> 0:01:31.959 it all off, it happened on Iraqi soil. Um. The 0:01:32.080 --> 0:01:35.119 US is saying that this was a defensive action, and 0:01:35.160 --> 0:01:37.720 they're really trying to put the emphasis on the fact 0:01:37.720 --> 0:01:41.120 that they believed that by killing customs Summani, they were 0:01:41.400 --> 0:01:46.120 saving American lives. Potentially hundreds of American lives were at risk. 0:01:46.200 --> 0:01:49.040 They're not telling us the details of that intelligence, but 0:01:49.160 --> 0:01:51.920 they are saying that there was an imminent threat to 0:01:52.080 --> 0:01:54.960 Americans in the region, um, and that that's why the 0:01:55.000 --> 0:01:57.800 strike was taken. So really trying to get away from 0:01:57.800 --> 0:02:00.480 the idea that this was an escalatory act on on 0:02:00.520 --> 0:02:03.800 the part of the president. Nick, I've read at least 0:02:03.840 --> 0:02:07.280 three articles today and um, you know, I'm in San 0:02:07.360 --> 0:02:11.120 Francisco and so we're all keeping our eyes on on technology. 0:02:11.160 --> 0:02:13.840 But I do hear from at least multiple articles that 0:02:14.000 --> 0:02:18.240 the way that Iran now retaliates is via a cyber attack. 0:02:18.560 --> 0:02:21.320 Are you hearing as well that if they do a 0:02:21.760 --> 0:02:27.840 measured response, would it be via cyber warfare. That's certainly 0:02:27.919 --> 0:02:31.200 one of the what's seen as being the most viable options. 0:02:32.120 --> 0:02:36.640 What's what's clear here is that if Iran chooses to respond, 0:02:36.720 --> 0:02:40.000 which the general consensus is that they will have to, um, 0:02:40.160 --> 0:02:42.560 the question is how and and the word that keeps 0:02:42.560 --> 0:02:45.560 coming up is asymmetry. So they obviously don't have the 0:02:45.600 --> 0:02:50.320 military might to take on the United States military head 0:02:50.360 --> 0:02:52.680 to head, but they can do other things. They can 0:02:53.200 --> 0:02:57.320 um attack American forces and officials who are in the region. 0:02:57.360 --> 0:03:01.360 They can attack American allies, they can attack oil infrastructure 0:03:01.720 --> 0:03:04.560 in countries like Saudi Arabia, as they've done before. And 0:03:04.600 --> 0:03:08.000 they also have a very advanced cyber warfare program, so 0:03:08.040 --> 0:03:10.040 that could be another way to do it. Uh, It's 0:03:10.120 --> 0:03:12.799 unlikely we would see the same sort of toe to 0:03:12.800 --> 0:03:16.680 toe m military action that the United States wage because 0:03:16.720 --> 0:03:20.200 they just don't really have that refined a capability to 0:03:20.240 --> 0:03:22.440 do that. So what we're looking for is in the 0:03:22.520 --> 0:03:27.000 days or months ahead, some sort of asymmetrical response, And 0:03:27.280 --> 0:03:29.799 indeed one of one of the ideas is that that 0:03:30.000 --> 0:03:32.640 would likely take the shape of a cyber attack, because 0:03:32.680 --> 0:03:35.520 that's one way they could be most disruptive. And so 0:03:35.640 --> 0:03:38.000 Nick and you alluded to this a bit a few 0:03:38.040 --> 0:03:40.880 minutes ago, but you know, sort of the messaging around 0:03:40.920 --> 0:03:43.440 this some sharp words from the other side of the aisle, 0:03:43.480 --> 0:03:47.000 the democratic side of the aisle, when it comes to Congress. 0:03:47.040 --> 0:03:50.640 What might we see upcoming in terms of the discussions 0:03:50.680 --> 0:03:56.560 in Washington about, you know, how the other branches of 0:03:56.600 --> 0:04:00.400 government and specifically the legislative branch need to get involved 0:04:00.720 --> 0:04:03.840 or should be involved going forward. Well, it really plays 0:04:03.880 --> 0:04:06.840 into this broader discussion or debate that's been going on 0:04:06.960 --> 0:04:10.360 for for years about you know, the quote unquote imperial presidency, 0:04:10.440 --> 0:04:13.120 the idea that the president himself just has an enormous 0:04:13.120 --> 0:04:17.680 amount of power to launch a military strike essentially at 0:04:17.680 --> 0:04:21.080 a time and place of his choosing, and regardless of 0:04:21.120 --> 0:04:24.120 whether it touches off a potential consulict or war, that 0:04:24.480 --> 0:04:27.760 doesn't have to consult Congress, even though it is um 0:04:27.960 --> 0:04:30.760 Congress's right to to be the one that declares war. 0:04:30.880 --> 0:04:32.400 So I think what you're going to see in the 0:04:32.400 --> 0:04:34.440 next couple of days is a real effort by this 0:04:34.520 --> 0:04:39.640 administration UH to present what it found or what it 0:04:39.680 --> 0:04:43.839 concluded was the intelligence that led it to act, UM 0:04:43.880 --> 0:04:47.320 to persuade Congress that um, it did so in a 0:04:47.400 --> 0:04:49.600 way that was justified and urgent and had to be 0:04:49.680 --> 0:04:52.520 done now, and that there was no time to go 0:04:52.640 --> 0:04:56.159 through other processes. Though of course, this administration, like others, 0:04:56.240 --> 0:04:59.920 has has shown that it's not particularly wedded to doing 0:05:00.120 --> 0:05:03.279 things UH in how in a way that we would 0:05:03.360 --> 0:05:06.960 define as being sort of according to proper procedures. So um, 0:05:07.240 --> 0:05:11.320 certainly a lot of demands from from Democrats in Congress 0:05:11.360 --> 0:05:14.000 that uh they be keyed in on on what that 0:05:14.080 --> 0:05:16.920 intelligence was. And then I think as that happens, we 0:05:16.920 --> 0:05:19.039 should start to see better and have a better sense 0:05:19.080 --> 0:05:21.640 of what exactly it was that made the President feel 0:05:21.720 --> 0:05:24.760 this was such an need. And Nick, what are you 0:05:24.839 --> 0:05:30.359 hearing about how else US officials the Trump administration is 0:05:30.440 --> 0:05:34.359 preparing for any sort of retaliation That you said is 0:05:34.440 --> 0:05:37.760 the consensus from Iran. Well, the big thing is that 0:05:37.839 --> 0:05:41.400 the US is is bolstering its military presence in the 0:05:41.400 --> 0:05:44.360 Middle East now, and they plan to send about three 0:05:44.360 --> 0:05:48.839 thousand more troops from the eighty second Airborne UH into Kuwait. Um. 0:05:49.120 --> 0:05:52.760 They had already deployed about seven troops to Quate earlier 0:05:52.800 --> 0:05:56.839 this week. Um, after the after an attack on the U. S. 0:05:56.880 --> 0:06:00.760 Embassy there. Um, So what what you're seeing here really 0:06:00.880 --> 0:06:04.880 is putting those forces in the region. Uh. The administration 0:06:04.960 --> 0:06:08.080 says this is to protect Americans, that they will be 0:06:08.120 --> 0:06:11.560 taking a defensive posture. Again, the insist this is not 0:06:11.680 --> 0:06:14.800 meant to be an escalatory action. Um, but there is 0:06:14.839 --> 0:06:18.520 really no one else who sees it that way. But UM, 0:06:18.520 --> 0:06:21.600 clearly there's a feeling even among American allies that this 0:06:21.680 --> 0:06:25.440 was a vastly escalatory action. All Right, Nick Wadams, thank 0:06:25.480 --> 0:06:28.400 you so much. Part of a global team that is 0:06:28.480 --> 0:06:31.320 keeping a close eye on this story, the implications, as 0:06:31.360 --> 0:06:36.480 we say, both military, politically, and financially and economically as 0:06:36.520 --> 0:06:39.120 this plays out in the coming days and weeks. We 0:06:39.160 --> 0:06:42.719 really appreciate your time, Nick, our State Department reporter joining 0:06:42.800 --> 0:06:51.599 us from Washington, d C. All Right, So drug pricing 0:06:51.720 --> 0:06:55.760 continues to be one of the hottest issues when it 0:06:55.760 --> 0:06:58.560 comes to consumers, when it comes to the markets, and 0:06:58.600 --> 0:07:01.880 when it comes to politics as well. Michael Ray joins us. 0:07:01.880 --> 0:07:05.040 He is founder and chief executive officer of r X 0:07:05.200 --> 0:07:09.359 Savings Solutions, joining us on the phone from Overland Park, Kansas. Michael, 0:07:09.400 --> 0:07:12.200 nice to have you with us. Likewise, good to be here, 0:07:12.400 --> 0:07:14.600 all right, So give us a sense of where we 0:07:14.640 --> 0:07:16.800 are when it comes to drug pricing. As the beginning 0:07:16.800 --> 0:07:19.000 of the year and the beginning of the year, I 0:07:19.120 --> 0:07:22.360 have to think, given that it's an election, your presidential 0:07:22.360 --> 0:07:25.400 election here, we're gonna be hearing a lot about drug 0:07:25.480 --> 0:07:28.920 pricing in that realm. It's also something that affects just 0:07:28.960 --> 0:07:31.640 about all of us. So where are we? Ah? Yeah, 0:07:31.640 --> 0:07:32.920 So I think you know, when we look back in 0:07:32.960 --> 0:07:36.680 the last decade, this has been a consistent theman issue 0:07:37.720 --> 0:07:40.720 really highlighted when when Trump won back in the end 0:07:40.720 --> 0:07:43.040 of sixteen and in the seventeen where you know, you 0:07:43.080 --> 0:07:45.960 had pharma companies coming in and taking social pledges to 0:07:46.360 --> 0:07:48.840 kind of do things a bit differently. In the subsequent 0:07:48.920 --> 0:07:52.280 years since we haven't really seen too much different. There 0:07:52.280 --> 0:07:55.560 have been some kind of tamped down percentage prices, but 0:07:55.800 --> 0:07:59.280 the number of increases is actually outpacing uh this year 0:07:59.320 --> 0:08:03.440 when you look at first three days in versus by 0:08:03.480 --> 0:08:09.559 over Michael, more drug price increases. Yeah, tell us why 0:08:09.800 --> 0:08:13.800 I understand the need to raise drug prices to invest 0:08:13.840 --> 0:08:16.600 in R and D find new cures. These drug trials 0:08:16.600 --> 0:08:20.520 are expensive. But why are we seeing what sounds like 0:08:21.240 --> 0:08:25.800 more drug pricing. It's higher than inflation, higher than last year. 0:08:26.240 --> 0:08:30.000 What's the balance? Yeah, it's a good question. I think 0:08:30.040 --> 0:08:33.040 that's the that's the you know, trillion dollar question that 0:08:33.080 --> 0:08:36.640 everyone's trying to answer. You know, there is um when 0:08:36.840 --> 0:08:40.160 when drug prices are expected in the market for public markets. 0:08:40.160 --> 0:08:45.320 Profitability certainly that's one driver. Um. You know, less profitability, 0:08:45.600 --> 0:08:47.880 uh doesn't mean less money for R and D or 0:08:47.920 --> 0:08:50.840 does it mean maybe less profits in the short term, 0:08:50.880 --> 0:08:53.120 but more in the long term. And what's really good 0:08:53.160 --> 0:08:56.760 for um, the pharma the pharma company long term? That's 0:08:56.760 --> 0:08:59.600 a question. I think we're very shortsighted um with what's 0:08:59.600 --> 0:09:01.880 going to up in next quarter, next year, and we're 0:09:01.880 --> 0:09:03.959 not looking five to ten years out in a lot 0:09:03.960 --> 0:09:07.800 of cases with the with the pharma company operation. Right, 0:09:07.880 --> 0:09:12.360 And have you seen sort of behavior markedly change in 0:09:12.480 --> 0:09:16.520 terms of economic financial decisions being made on the front 0:09:16.520 --> 0:09:19.320 lines by these companies in response to a lot more 0:09:19.440 --> 0:09:23.200 public and political pressure. Well, I think what we've seen 0:09:23.679 --> 0:09:27.040 from the large cap pharma companies is uh, you know, 0:09:27.160 --> 0:09:31.600 kind of consistently below ten price increases UM. There they're 0:09:31.640 --> 0:09:33.560 still quite a bit higher than inflation. And when you 0:09:33.559 --> 0:09:37.400 think about the compound effect of a nine nine increase 0:09:37.920 --> 0:09:40.760 over three years, you know, compounded that's much bigger than 0:09:41.800 --> 0:09:44.640 so you're still seeing um. You know, these high dollar 0:09:45.360 --> 0:09:50.000 products come to market with compounded rates of increase in 0:09:50.040 --> 0:09:53.720 pricing UM and and that ultimately just continues to strain 0:09:54.200 --> 0:09:57.400 the economy as a whole. Health plans, employers in and 0:09:57.480 --> 0:10:02.240 consumers certainly, who are the one that are carrying that burden? Michael. 0:10:02.320 --> 0:10:04.839 I'm based out here in San Francisco, and in about 0:10:04.880 --> 0:10:07.080 a week or two we will be heading over to 0:10:07.160 --> 0:10:10.679 the weston St. Francis where we're going to be at 0:10:10.679 --> 0:10:14.480 the JPMorgan Healthcare Conference. We have interviews with all of 0:10:14.520 --> 0:10:17.640 these big tech companies, Fiser, you name it, some of 0:10:17.679 --> 0:10:21.920 these big healthcare companies. What is the number one question, 0:10:22.000 --> 0:10:25.559 the number one theme we should be asking big drug 0:10:25.640 --> 0:10:29.600 companies when we're at that JP Morgan Healthcare conference. Well, 0:10:29.679 --> 0:10:31.760 I think that it's you know, it's a drug pricing 0:10:31.800 --> 0:10:34.360 is very complex. I mean, there's obviously the pharma company 0:10:34.360 --> 0:10:37.160 where things start, and there's a lot of intermediaries that 0:10:37.200 --> 0:10:41.760 go between production of a pharmaceutical and the end consumer, Um, 0:10:41.760 --> 0:10:44.600 who's who ends up taking it? So, you know, the 0:10:44.600 --> 0:10:47.840 big question is what is driving drug price increases? Is it, 0:10:48.280 --> 0:10:51.120 you know, the need to try to appease the public 0:10:51.160 --> 0:10:53.840 market from a profitability standpoint? Is it more money for 0:10:53.920 --> 0:10:57.400 R and D? Is it for other people in supply chain? Um? 0:10:57.679 --> 0:10:59.640 Those are all the questions that really need to be 0:10:59.679 --> 0:11:02.600 answered or didn't I think? UM? From a farmer perspective, 0:11:02.640 --> 0:11:06.560 they'll certainly have opinions on you know the at the 0:11:06.640 --> 0:11:08.800 end of the day, is it is it? Um? You know, 0:11:08.840 --> 0:11:12.719 what is the driver? Why would they take these increases consistently? Um? 0:11:12.760 --> 0:11:15.560 If they claim that there's no actual you know, net 0:11:15.600 --> 0:11:18.720 profitability by doing so, Um, then what would be the 0:11:18.720 --> 0:11:21.719 reason to to keep doing it? Where to leave it there? 0:11:21.720 --> 0:11:25.000 Michael Ree is founder and chief executive officer of our 0:11:25.040 --> 0:11:27.920 ex Savings Solutions. He joined us on the phone from 0:11:28.040 --> 0:11:38.720 Overland Park, Kansas. Next, Well, it's more connected world. For sure, 0:11:38.800 --> 0:11:42.319 We're more connected to our cars, but maybe less connected 0:11:42.800 --> 0:11:46.480 to each other by virtue of everything that's around us. 0:11:46.679 --> 0:11:49.320 Let's get into that and much more with the chief 0:11:49.559 --> 0:11:53.120 futurists over at Ford that Cheryl Connolly. She joins us 0:11:53.160 --> 0:11:56.160 on the phone from dearborn, Michigan. Cheryl, Happy New Year. 0:11:56.200 --> 0:11:58.959 Great to have you with us. Thanks, Happy New Year 0:11:59.000 --> 0:12:01.040 to you too. All Right, First of all, Taylor and 0:12:01.080 --> 0:12:03.040 I've been talking about this off air. You have a 0:12:03.080 --> 0:12:06.520 really cool job. I mean, that's fair to say. I 0:12:06.559 --> 0:12:09.000 do have a really really great job. I'm the chief 0:12:09.000 --> 0:12:13.679 teutist before I've done future work for the company for 0:12:13.880 --> 0:12:17.640 sixteen years and I've been with Forward for twenty four years. 0:12:18.000 --> 0:12:20.679 So it's a really really great uh gig. And it 0:12:20.720 --> 0:12:23.079 always surprises people when I tell them that my job 0:12:23.160 --> 0:12:26.920 is to look outside of the auto industry anything pertains 0:12:26.920 --> 0:12:31.760 specifically to automotive. Al Right, so you have recently put 0:12:31.880 --> 0:12:35.480 some thoughts out there. What was the thing that most 0:12:35.559 --> 0:12:38.120 intrigues you as you look ahead, especially as we think 0:12:38.120 --> 0:12:40.880 about twenty which feels like kind of a key year 0:12:40.960 --> 0:12:44.920 when it comes to our relationship with our cars. It is. 0:12:45.040 --> 0:12:47.079 It is a really big year. I mean, we're starting 0:12:47.120 --> 0:12:49.800 a new decade, and it's interesting because it causes me 0:12:49.880 --> 0:12:53.079 to reflect on the last decade. So I mentioned already, 0:12:53.120 --> 0:12:56.000 I've done this work for sixteen years, and we used 0:12:56.000 --> 0:12:58.960 to never talk about it publicly. It was considered top secret, 0:12:59.000 --> 0:13:02.160 prietory stuff. But eight years ago we decided to start 0:13:02.400 --> 0:13:04.880 publishing some of our thoughts, and the more we shared, 0:13:04.880 --> 0:13:07.880 the richer our insights became. So it's really great to 0:13:07.880 --> 0:13:11.120 have conversations like this with you and Taylor. But what 0:13:11.200 --> 0:13:15.239 I've seen over the last eight years is this constant 0:13:15.320 --> 0:13:20.679 theme surrounding trust and mistrust and business government media has 0:13:21.040 --> 0:13:24.200 never been higher. But what we see for is that 0:13:24.320 --> 0:13:29.480 the mistrust is starting to spill into our relationships. More specifically, loneliness. 0:13:29.520 --> 0:13:34.040 Loneliness is a global epidemic, and loneliness, you know, we'll 0:13:34.080 --> 0:13:36.520 think about loneliness kind of as a temporary state, but 0:13:36.640 --> 0:13:39.840 doctors actually say that loneliness doesn't just make you feel bad, 0:13:40.320 --> 0:13:43.920 it's bad for you. One surgeon general said that it 0:13:44.000 --> 0:13:50.040 is the equivalent of being obese or smoking fifteen cigarettes today. Wow, 0:13:50.280 --> 0:13:53.600 that is quite a statistic. You know. Another thing in 0:13:53.640 --> 0:13:57.520 your report, Cheryl, that really stood out to me is 0:13:57.600 --> 0:14:01.080 that fifty eight percent of adults say they feel like 0:14:01.280 --> 0:14:04.480 they want to fight climate change, yet less than half 0:14:04.520 --> 0:14:09.320 are actually taking action. We think green transportation methods like 0:14:09.520 --> 0:14:15.120 electric cars or public transportation. Where are we in, you know, 0:14:15.200 --> 0:14:17.880 at least starting to get more on board with some 0:14:17.960 --> 0:14:22.480 of the EAVY driving methods. So what you're talking about 0:14:22.560 --> 0:14:24.720 is a trend that we call the green paradox. You know, 0:14:25.080 --> 0:14:28.720 everyone says that they're actively changing or fighting climate change 0:14:28.720 --> 0:14:30.840 in big ways and small but what we see is 0:14:30.880 --> 0:14:33.240 that most Americans are only willing to what I should 0:14:33.280 --> 0:14:36.520 say both. It's of Americans that we survey are only 0:14:36.520 --> 0:14:40.000 willing to embrace sustainable initiatives if the inconvenience is small 0:14:40.760 --> 0:14:44.560 or nonexistent. So how do we close the gap between 0:14:44.640 --> 0:14:48.120 intention and action? And some of it is that people 0:14:48.120 --> 0:14:49.680 just don't want to make trade offs. They want things 0:14:49.760 --> 0:14:52.880 to be simplified and easy. And e VS is tricky 0:14:53.040 --> 0:14:55.960 because well fifty six percent of the people we spoke 0:14:56.000 --> 0:14:58.800 to said more people should drive evs, only seventeen of 0:14:58.840 --> 0:15:03.200 the respondents actually they do, so that percentages remain really low. 0:15:03.840 --> 0:15:06.400 And we know that people don't fully understand the benefits. 0:15:06.560 --> 0:15:08.960 All they think is about is this tradeoff or compromise. 0:15:09.400 --> 0:15:12.920 So it's exciting because Board will introduce this year for 0:15:12.960 --> 0:15:16.920 the very first time in all electric new forward Mustang 0:15:17.040 --> 0:15:20.480 Mache Support utility vehicle. The most people recognize Mustang as 0:15:20.480 --> 0:15:24.600 a performance vehicle like a pony car um paddles to 0:15:24.640 --> 0:15:27.280 the metal wind at your hair convertible. So to think 0:15:27.320 --> 0:15:31.080 about that brand legacy apply to a sport utility vehicle 0:15:31.400 --> 0:15:34.080 that happens to be an evy totally changed your notion 0:15:34.520 --> 0:15:36.880 of what you get. In other words, for our customers, 0:15:36.880 --> 0:15:39.680 that means you can't have milogion ruscle. You don't have 0:15:39.720 --> 0:15:42.840 to compromise right. Well, and it's I'm so glad you 0:15:42.920 --> 0:15:46.560 brought that up because I have this sense for me 0:15:46.760 --> 0:15:49.920 reading your report, you sort of validate some things that 0:15:50.240 --> 0:15:53.280 I think we suspect, which is people sort of say 0:15:53.280 --> 0:15:55.520 one thing and do another, right, you know, they expect 0:15:55.560 --> 0:15:58.800 so much of a brand, and yet if it's the 0:15:58.840 --> 0:16:02.440 affordable choice, sir, it's the convenient choice, maybe they're going 0:16:02.480 --> 0:16:05.160 to go ahead and do that. Am I miss? Am? 0:16:05.160 --> 0:16:08.880 I missreading that In my two cynical about that, I'm 0:16:08.960 --> 0:16:11.680 sad to say that I share in your cynicism. I mean, 0:16:12.120 --> 0:16:15.200 you know, some of it is is that climate change 0:16:15.240 --> 0:16:18.840 in general is difficult because it doesn't evoke the fight 0:16:18.920 --> 0:16:25.520 or flight instinct. It's abstract, it feels distant, so we 0:16:25.520 --> 0:16:27.880 don't always take it as urgently as we should. But 0:16:28.000 --> 0:16:30.520 I hadn't experienced the summer where I traveled to South 0:16:30.560 --> 0:16:34.520 Africa and the public restrooms of a number of the 0:16:34.520 --> 0:16:37.480 restaurants and beating places I went to had shut off 0:16:37.520 --> 0:16:40.920 their faucets and ask people to use hand sanitizer instead. 0:16:41.440 --> 0:16:44.280 And it was just this reality. But like we talk 0:16:44.360 --> 0:16:49.400 about climate change as this distant thing um irregular weather patterns, 0:16:49.440 --> 0:16:51.840 but in a place like South Africa, they see it 0:16:51.840 --> 0:16:55.120 as a meaningful threat, in emminent threat to their food 0:16:55.120 --> 0:16:59.440 and water supply. Cheryl, I, I wanna get some of 0:16:59.480 --> 0:17:03.080 your thoughts because you mentioned, you know, Ford specifics push 0:17:03.200 --> 0:17:06.639 into the electric vehicle market to help combat some of 0:17:06.680 --> 0:17:09.560 the climate issues that you just addressed, you know, the 0:17:09.680 --> 0:17:12.280 Mustang or even hearing the F one fifty trying to 0:17:12.320 --> 0:17:15.800 revamp it's e V lineup as well. How do you 0:17:15.920 --> 0:17:19.199 view forward in the midst of the e V push. 0:17:19.280 --> 0:17:21.879 You know, we got numbers out of Tesla this morning. 0:17:21.920 --> 0:17:25.160 They just continue to dominate the e V space. Where 0:17:25.200 --> 0:17:27.720 do you see Ford sort of all in the EV 0:17:27.960 --> 0:17:34.240 pictures as playing a role. We actually really excited about 0:17:34.280 --> 0:17:39.480 our investment in this space. I mean Ford has um 0:17:39.600 --> 0:17:42.520 a long legacy of playing in the sustainability space, and 0:17:42.520 --> 0:17:45.160 that has everything to do with Bill Ford, who is 0:17:45.200 --> 0:17:48.359 the great grandson of Henry Ford and still actively involved 0:17:48.359 --> 0:17:50.800 with the company as the executive chair of our board. 0:17:51.280 --> 0:17:53.199 And he has said, I have two passions in my 0:17:53.280 --> 0:17:57.840 life their automobiles and their environment, and he has spent 0:17:57.920 --> 0:18:02.720 his forty year career trying to reconcile the conflict between 0:18:02.720 --> 0:18:05.240 the two, and so he was pushing us to start. 0:18:05.480 --> 0:18:08.119 You know, he was actually pushed for the EV program 0:18:08.119 --> 0:18:10.640 long before you could actually make a solid business case 0:18:10.680 --> 0:18:12.760 for it. But what you said, you know, is that 0:18:13.000 --> 0:18:15.280 not everyone wants to pay for it. There are those 0:18:15.440 --> 0:18:17.800 those people who see themselves as being like a deep 0:18:17.880 --> 0:18:21.800 green consumer, and then there are those who are less 0:18:21.840 --> 0:18:25.680 likely to jump on the bandwagon. But we have invested 0:18:26.000 --> 0:18:30.720 extraordinarily into our um EV program. We plan to develop 0:18:30.840 --> 0:18:35.120 develop new electric vehicles UM and we're working with partners 0:18:35.440 --> 0:18:39.080 new partners on this like rivian um to create new 0:18:39.119 --> 0:18:42.240 evs and Rivan is actually we've made a five million 0:18:42.280 --> 0:18:45.040 dollar investment with Rivan and rivian is bordered with Amazon 0:18:45.480 --> 0:18:48.800 to help deliver packages in the future. So we think 0:18:48.800 --> 0:18:52.840 that there's really big opportunity here right all right, Thank 0:18:52.880 --> 0:18:56.119 you so much. Haryl Connolly, Chief futurists over at Ford, 0:18:56.440 --> 0:19:05.880 she joins on the phone from dearborn, Michigan. All right, well, 0:19:05.920 --> 0:19:09.600 here in New York City, we care about a spit 0:19:09.680 --> 0:19:12.760 relatively small number of things. Real estate is a very 0:19:12.800 --> 0:19:15.840 important one of them, Let's be honest. Oh, Shrek Garmiel 0:19:16.040 --> 0:19:18.520 is real estate reporter for Bloomberg. She joins us on 0:19:18.520 --> 0:19:21.760 the phone from right here in New York City, O, Shrett, 0:19:22.000 --> 0:19:25.120 Happy new year. Great have you with us? Happy New year? 0:19:25.560 --> 0:19:28.840 Al Right, So what happened with Manhattan home sales? This 0:19:28.880 --> 0:19:33.159 has been quite something to watch over the past few years, 0:19:33.240 --> 0:19:37.400 because after that sky is the limit mentality for so long, 0:19:37.800 --> 0:19:41.399 it hasn't been quite that way, No, it hasn't. And 0:19:41.520 --> 0:19:45.000 I guess the top line number is Manhattan sales fell again. 0:19:45.560 --> 0:19:48.560 And you know they've been falling for almost every quarter 0:19:48.680 --> 0:19:51.320 for the last two years except for one. Um and 0:19:51.359 --> 0:19:54.320 so they felt but they fell by the smallest amount, 0:19:54.359 --> 0:19:56.920 you know, And so it feels like the new reality. 0:19:56.960 --> 0:20:00.159 It takes usually eighteen months to take and it's just 0:20:00.400 --> 0:20:04.000 that finally sellers are kind of realizing that they can't 0:20:04.200 --> 0:20:08.320 just name any price and expect to have people outbid them. Um, 0:20:08.359 --> 0:20:10.000 that you may have to actually lower your price, and 0:20:10.040 --> 0:20:12.760 so it was just reflects that deals are getting done, um, 0:20:12.800 --> 0:20:15.080 but the market is still flow Yeah. And what I 0:20:15.160 --> 0:20:17.639 liked about that is that if you're a seller and 0:20:17.680 --> 0:20:19.760 you're willing to acknowledge you have to come down a 0:20:19.840 --> 0:20:23.359 little bit in price, you're actually making buyers a little 0:20:23.400 --> 0:20:26.439 bit more encouraged and then they are coming to the table, 0:20:26.680 --> 0:20:30.320 right they are. And I think the tale of the 0:20:30.600 --> 0:20:32.560 tail for the last two years is that sales have 0:20:32.640 --> 0:20:35.320 been falling. They were falling like ten, eleven, twelve, very 0:20:35.359 --> 0:20:38.600 significant numbers, and that's because the buyers were just staying away. 0:20:38.640 --> 0:20:41.040 They weren't even bothering to bid. They just assumed that, 0:20:41.359 --> 0:20:44.280 you know, this is overpriced. Sellers would just you know, 0:20:44.359 --> 0:20:46.879 laugh them off, and so they just didn't transact. And 0:20:46.960 --> 0:20:49.880 so the markets for the week seller buyers are still 0:20:50.000 --> 0:20:53.280 very wary of overpaying. They're incredibly wary overpaying. But the 0:20:53.320 --> 0:20:56.440 fact that the sales drop is so low suggests that 0:20:56.480 --> 0:20:59.280 there's a meeting of the minds. It's not that wide anymore. 0:21:00.200 --> 0:21:04.280 And so when you look at the numbers, sort of 0:21:04.320 --> 0:21:07.720 a level down, what is selling better? You know, give 0:21:07.800 --> 0:21:10.840 us some price ranges for what seems to be moving 0:21:11.320 --> 0:21:14.560 better than others. Well, I guess New York price ranges 0:21:14.600 --> 0:21:16.399 are relative to the rest of the country. But in 0:21:16.440 --> 0:21:19.520 New York it's the under three million market, which actually 0:21:19.560 --> 0:21:22.159 New York is kind of work course housing, um. But 0:21:22.359 --> 0:21:24.680 under three millions where most of the sales were about 0:21:24.720 --> 0:21:28.080 eight percent of the sales UM. Which sounds great, except 0:21:28.080 --> 0:21:30.560 for New York has a very very large glut of 0:21:30.960 --> 0:21:34.000 luxury properties that was really where all the construction was 0:21:34.600 --> 0:21:37.400 um in the last five years and and still happening. 0:21:37.680 --> 0:21:40.000 So there's a there's a real oversupply of of of 0:21:40.240 --> 0:21:44.200 properties above five million UM. Not a majority of the 0:21:44.240 --> 0:21:48.040 sales were not happening there um, but but yeah, under 0:21:48.080 --> 0:21:51.760 three million is probably where things were more brisk UM. So, 0:21:52.280 --> 0:21:54.920 you know, some of the headwinds that we have discussed 0:21:54.960 --> 0:21:57.560 over the past couple of years are foreign buyer is 0:21:57.600 --> 0:22:00.000 not showing up in the way that they did before, 0:22:00.160 --> 0:22:04.760 or some of the tax changes that were predicted to 0:22:05.000 --> 0:22:09.040 have an impact and seemingly did. And then as you said, 0:22:09.080 --> 0:22:12.280 sort of this overbuilding that we saw on the luxury end, 0:22:12.880 --> 0:22:16.480 especially on the first to the foreign buyers and the 0:22:16.560 --> 0:22:20.680 tax changes, had those sort of ameliorated or have they 0:22:20.720 --> 0:22:22.600 just worked their way through the system. Where do we 0:22:22.640 --> 0:22:25.960 stand on those factors? Oh, those are still very much 0:22:26.040 --> 0:22:29.360 weighing on on the market. So foreign buyers, um, they were, 0:22:29.400 --> 0:22:31.359 they were a very big source of virus for for 0:22:31.400 --> 0:22:33.800 some of this, really this luxury product. People would come 0:22:33.800 --> 0:22:38.080 in pay cast I mean for a decade plus, right, yeah, 0:22:38.200 --> 0:22:40.600 and so and and some might still be there, but 0:22:40.640 --> 0:22:43.080 there's really no urgency. There's so much to buy UM 0:22:43.480 --> 0:22:45.439 and I think you know some of some of it. 0:22:45.440 --> 0:22:47.280 I mean, you have capital controls in some countries, so 0:22:47.440 --> 0:22:49.879 that making it harder to buy UM. So for the 0:22:49.880 --> 0:22:52.280 most part, they they're gone. UM. And then people who 0:22:52.280 --> 0:22:54.520