Bloomberg Businessweek Weekend - April 14th, 2023

Cross I'm the taxman. Yes, I'm the taxman. All right, everybody. Yeah, We're going to talk about the taxmen and women that are out there, truant taxpayers, decrepit technology, and a broken system that former IRS tax auditors say that cannot be fixed with the eighty billion dollars it's been allocated by federal government to do just that. This story found online up Bloomberg dot com slash BusinessWeek and on the Bloomberg and at Bloomberg dot com slash business Week. I said

that twice on the Bloomberg terminal. It's that kind of a day anyway. It's not like I'm going to get an audit or something and I'm freaking out here with Moore. Let's get to it. Bloomberg News Wealth reporter benst We'm an incredible deep dive along with the editor of Bloomberg Business Weekte Webber here in our Bloomberg Interactive Broker Studio. Yeah, that would scare the heck out of me. Audens coming they got eighty billion dollars to play with at the RSUM.

But actually, what we set out to find in this story with Ben Steberman at the HELM was, you know, what's it really like to work there? How bad is it? Really? We know it's bad, that's a given, but like, really, really, really, how about is it? And you know, if you were to fix it or to you know, give some pointers to people normal Americans, what would those fixes and pointers be and would you find? Ben? What I found was

that part of the issue here is money. Obviously, UM this these are folks who have been suffering through decades of budget cuts. UM it's the agency is a shadow of its former self in a lot of ways. It's probably the worst funded government agency. UM. Technology doesn't work. UM systems crash. They're running on nineteen sixties computer programming languages. It's just basic analyses or is that like cards? Like

what is it? Sorry I don't know the name of the language, but yeah, it's like one of these things where you need special training to uh, well they have they have these like veterans who like learn this stuff, and um, it's not very applicable to other software tech companies, and so it's it's bad and money can help, But

there's also a culture problem. There's a culture shift that needs to happen there because this is like, this is an agency that's been demonized for fifty years and they have this bunk immortality and they have a really hard time even communicating with the public or or had to call that IRS. I understand what they're demonized. Yeah, and yeah, there's this credible loyalty that you kind of discovered among

the people who have worked there. A lot of a lot of the people you spoke to were farmers, and that just really stuck out to me. It was like, yeah, you know, you bludgend the heck out of an agency that until it's like despised, and yet the people who are there, like I feel like they're like clinging to each other almost. Yeah, it's like they're like bonding in

the trenches. Maybe. But I think what realized what surprised me maybe was I think because of the demonization, there's a sense that like an IRS auditor, Oh, there's somebody who would be like politically motive, seemed politically motivated or or like might want to squeeze tax the rich taxpayers. I mean, maybe that's why you go into it, because you get to like take rich people down a peck. I didn't get any of that vibe. In fact, what I got from these people is that they're big tax nerds,

Like they just love the tax code. And there's something really fun about if you're if you are a tax nerd of like being in government service and working on that and the hours are saying it's a union shop, retirement benefits are good, Like, so all you have to do is understand this really complicated deck code. Yeah, it just gets more and more complicated, right, And also like be kind of embarrassed to tell people where you work. And I'm only saying that because you put it in

your story. So this is this is editorially sound, but like that's kind of a tough pill to swallow. Yeah, So when multiple people told me, I kept asking, what do you tell people if if they ask you what do you do at a party and they're they're like, oh, I'm an accountant or I work at the Treasury Department. They had Also everybody had like a different strategy for like basically killing the conversation and not basically trying to trying to sound boring, and so people move on to

a different conversations. Right, But everything's going to change, right. Eighty billion dollars, Well, they have a new commissioner. They do have eighty billion for now. Republicans in the House at least would like to send a lot of that money, especially for enforcement. They're probably not going to get their way, at least in the next couple of years, but we'll see. But yeah, they need to hire a lot now, and that's a challenge. I mean, the onboarding process can take months.

And also they're paying government a government pay scale, and they're competing against the private sector, which obviously unemployment is low. And if you have some tax skills, you can make a lot more money by going to an accounting for a metal law firm. But one thing I don't understand is that it's important like how many tax sheets are there?

Are there estimates because I would think that a very rigorous IRUs would be a good thing in terms of bringing tax revenue, justify revenue in part of the goal here, right, it's like you maybe modernize this place and let them do the job that they're supposed to be doing exactly correct. SAT spot they can hire that could maybe help them out. So there is one study that the IRIS does and it just came out. They do it every every few years.

They found that almost five hundred billion dollars is missing compared to you know, if you compare what is owed to what is actually paid. They think it's peggeted about five hundred billion. But that is an estimated that is several years old. It is based on random audits that might not be conducted very well. They're they're not. That doesn't include crypto, it doesn't include all sorts of offshore

game playing that that could be happening. So there are people who think, like academics, who think that much much more money could be hidden from the IRS by wealthy people in business owners. To be clear, like salaried workers like you and me find it very difficult, if not impossible, to cheat because our income is reported directly to the IRS,

and that that matching software is actually very simple. What they want to develop is some kind of AI and machine learning and really crunch the data on what's going on with investment flows and wealthy people and try to find cheaters that way. UM and and be much more sophisticated,

sophisticated about who they audit in the first place. Okay, so you actually did get to talk to some people who had recently joined the agency and recently left the AGE and then yes, yes, so what was their experience like because uh, you know they came in for maybe different reasons, but you know these are these are new hires and new exits, right, so what was their experience? Yeah, so you know you could argue that, well, one of my sources did argue that auditing is basically the toughest

job you can possibly imagine. I mean, you're going in there and you're trying to figure out is there something like you're investigating somebody based on their tax return and that could be thousands of pages, and then you're comparing that with the tax code and that can be that is like tens of thousands of pages, Like how do

you find how do you find that? In the beginning with UM so, unfortunately the last few years, especially with the pandemic, it's really been hard to bring people on and train them in that and training virtual training in taxes, like can you imagine? It's so apparently they have very good instructors, but um, you think that it would be anyways, I am. I was in awesome of these stories these people told about coming in and basically it's sink or swim,

and they sunk like it was really hard. It was emotionally stressful to deal with taxpayers, especially low income taxpayers who are it's often connected with health issues, financial issues like poor people. Um, and then all the way up to the higher I've been thinking about everything there about Jamie Lee Curtis is an or and it's like so sad,

but I mean we've been joking. But in all seriousness, you do profile people who talk about going into people's lives who are struggling and having to fight them on their taxes, like and and at the political environment right like you are a representation. Literally, the talking point from folks on the right in the last year has been that this is Biden is creating this new army of i RS agents that's going out there with weapons to

poke through people's finances. That can feel very threatening if that's the message that's going out there, and if if you believe it and then someone shows up at your house or your business and these people are not armed to be clear, the vast, vast majority, except for some criminal investigators, a very very few. They do not have weapons. They have basically a laptop and that's it, and maybe

that laptop doesn't work. There was some amazing stories that, like one guy said his laptop broke and then they didn't they didn't have the budget to like buy a new one. There wasn't a replacement in the office, so he had to mail it from Florida to Texas to be repaired and then wait for it to be sent back, and he he did not have a job to do for three weeks, because you can't do a job without

a computer in twenty twenty three or whatever. It does speak to another element of the story that I found fascinating, which is so much of the job is actually the agents and auditors taking upon themselves to do things and learn things that maybe they haven't ever been exposed to in the course of the job. Right, So talk about those contours, because that it takes a certain someone to be like, Okay, I'm gonna government job, and actually I need to like do a little bit more work to

understand what I'm supposed to do. Yeah. I found many instances of people paying for a course out of their own pocket. Again, these are tax nerds, so like that they're interested in it maybe to begin with, but also they felt like they couldn't do their job. And that's the running theme, is it. And so many of these people at the RS just told me I did not have the tools to do my job properly, and that

can be very demoralizing. Even if you get along with their colleagues and like them, it can be just really just demoralizing that you can't fulfill your mission. What do they get paid, Um, it's a government pay scale and I think it's capped it like the hot like high hundred thousands basically yeah, yeah, yeah, one hundred thousand or so, one hundred thousand or so. I could be wrong about that.

There might be some bumps. The IRS now that they're hiring is thinking, well, maybe we should hire because of remote work. Maybe we can hire more in like markets that are less expensive, like other than DC New York Bay Area, like higher auditors in other places, And maybe that's one of the strategies are coming up with to try to get some talent in there. But like it's basically these people can leave in DC or New York and get paid four times more five times more by

going to the private sector. It's interesting too that, you know, in terms of the things that IRS is doing well diversity, it seems like they're killing it on gender equity and you know, just having an inclusive hiring practice. What did you make of that? Did that surprise you? Surprise me a little bit? Um. What I heard from veterans is that they maybe they came out of law school and

way back in the eighties. This is a longstanding thing, you know, they maybe they came out of law school in the eighties and it wasn't was not a top tier law school, and they were able to get a job at the IRS and and then found it pretty meritocratic. And I think that basically almost I think almost a third of the workforce is black. There's two thirds as women, so it's a very diverse workforce and it much more than other even other government jobs. Right. I just found

that so surprising and interesting. Yeah. The other thing that is worth mentioning here is one of the main reasons, in addition to being able to leave and get high paying job elsewhere, is retirements, right, which has been a huge force of Chaine at dirs because so many of the people who are there and have effectively tenure are retiring. So you know that there's this drain loss, brain loss, draining,

brain brain brain drain there. It is that And I'm curious what you're reporting bore out about that topic because that that can have huge not only kind of cultural implications, but also you know, institutional ones. Yeah, so people told me about what the time when they joined the organization, say two decades ago, there would be a guy who is in an office in the DC in DC who was the expert on section forty two point k what

they were the world expert. And that is actually an advantage for the tax collector that the private sector doesn't necessarily have. They have the ability because it's it really is eighty four thousand people in this workforce. It's a big workforce, much bigger than any firm. They have the ability to really master the minutia of this incredibly complicated

tax code. Well, if those people leave, and they have been leaving in droves because basically in a lot of departments that the IRS didn't hire for years and years and years, we actually think that there's going they think that there's going to be about fifty thousand of those eighty thousand employees are either going to quit or retire in just the next several years, so no more audits

than for us. Like so it just underlines how much they need to hire to replace these people and how and then it's going to take several years to ramp up. I mean it's amazing. Yeah. Now that these people are on the outside, a lot of them are helping clients deal with the IRS, and they're saying they're just holding their heads. I mean they are just in horror of what they're encountering because they're encountering auditors who've been on the job for a year or two and they do

not know what they're doing. And we brought all this to the IRS and they did not push back on this. I mean there is so yes, Maddie, Yeah, I mean it's takeaway in competent Auditsum, you just get stuck in this customer service hell and ever exited unbelievable. Ben Steverman, wealth reporter at Bloomberg News. Joe Webber, Editor Bloomberg business Week. Check it out online. You're listening to the Bloomberg Business

Week podcast. Got Us Live weekdays from two to five pm Easter on Bloomberg Radio, The Bloomberg Business A band you too. You can also listen live to our flagship New York station, Just Say Alexa play Bloomberg e Love and Dierdy. You're so delighted to have back with us. Andy Brown former editorial director of Bloomberg New Economy, and he spent three decades in Asia as both China editor and columnist for The Wall Street Journal. Today he leaves the China Hub. He is a partner at Brunswick Group.

A critical issues advisory from Andy. Back with esvia Zoom in New York City. Andy, thank you, thank you. Good to have you here with Maddie and myself. Um, what's your read I'm President mccrone's visit and then the comments post his visit to China. Well, first of all, it's great to be with you, Carol and Maddie. The comments, as you say, really are quite extraordinary and have been interpreted as inflammatory in fact by China hooks in the US.

I mean, you've got to remember the context. I mean here he is the French President Emmanuel mcron in China, saying that Europe should distance itself from the United States at a time when the United States is involved in intense strategic competition with China, competition over Taiwan, over the South China Sea. They're at loggerheads over high technology, over human rights, over the situation in Ukraine. And Macron comes out and he says, no, we need strategic autonomy. We're

not going to be followers. And the most explosive of his comments was and We're not going to be dragged by the United States into an licked uh over over Taiwan. And you know, this is this is a this is this to the too politicians like Marco Rubio really is outrageous. So he's saying, okay, here we are the United States defending Europe, sending AID, sending arms, military equipment to Ukraine, and you're saying, you know you're not going to get in,

You're not going to support us in Taiwan. Why now for this move from Macron? You know, he's he's always sought what he calls strategic autonomy somewhere between the United States and China. This time he talked about creating a European third superpower. But you know, business and economics plays very much into this scenario. Macrom arrives in China with fifty odd business executives in representing industries from fashion to

to to nuclear, and they're all doing great deals. So he's making clear the difference between the United States and Europe on this and in fact that sense is quite broadly shared in Europe. That you know, Europe doesn't want to go in for economic decoupling. Ursola van Delay and the European President of European Commission was quite clear on this point. She said, we want de risking from China. We don't want decoupling. But certainly Macron sees commercial opportunity

in China's reopening. And by the way, President Jimping of China, this is all music to his inness. Relations with the United States are on ice and here's Europe coming along with trade offers of trade and technology. It's exactly what he needs at this point. Well, is it similar, Andy, I know we've talked about this a lot over the years. Is it the same for US business as we just talked about Tesla building a large new battery factory in Shanghai.

So further digging in deeper when it comes to China specifically, I mean US big companies, they're still going to be in China doing business or no. Yeah, well, in some ways, Elon Musk is quite exceptional. It's the rare US CEO that's going out there now and announcing big business deals with China. In fact, we just had a big conference in Beijing called the China Development Forum, run by the Chinese government, the Chinese State Council. Fewer US corporate executives

than usual were there. They were rather reluctant to turn out. They definitely didn't want to do any media and they certainly didn't want to make any announcements of investments in China, which might expose them to criticism by this newly created House Committee on China, which plans to hold US CEOs and other prominent figures with connections to China in front

of the Committee for televised hearings. They're very nervous about that. So, yeah, this is advantage Europe versus the United States, certainly when it comes to corporate engagement. It's it's so interesting because I also have to wonder whether when it comes to she Jane Payne, are these CEOs concerned about the lack of predictability there. We just got through years of COVID

zero in China. To what extent are people willing and ready to move on from that and say, well, this is an opportunity now, so let's fly over there with fifty CEOs into Yeah, well, the the Joe Biden is highly unlikely to replicate that that kind of mission. In fact, the US is working in the opposite direction. It wants economic containment of China, not economic engagement with China, certainly in the area of high tech. That's what the Inflation

Reduction Act is all about. That's what chips and science. It's all about billions of dollars to build supply chains in the United States, to bring jobs back from China, and to make the United States less reliant on China. So it's all working really in quite the opposite direction. But US businesses in China are worried about two things. First of all, geopolitics and particularly the situation in the

Taiwan Strait and the possibility of a Chinese invasion. But they're also worried about domestic economic policy and whether the Chinese administration really has eased up on its extraordinary assaults on the private sector that we saw beginning in the middle of two thousand and twenty one with the attack on the big tech digital platforms Ali Baba, you know, and the and DD and the other and the other

tech giants. Well, it just is always interesting and I feel like so many different things come at us from so many different angles. Andy, thank you. I know, another busy day, so so appreciated. Andy Brown, partner at the Brunswick Group. Joining us via zoom in New York City. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Easter on Bloomberg Radio.

The Bloomberg Business a band you two. You can also listen live to our flagship New York station Just Say Alexa play Bloomberg e Love and Dirty. So you know the new wishie Bloomberg business Week gets out, It's on newsstands, it's online Bloomberg dot com, slash business Week and of course on the Bloomberg terminal. In it a well known name in the hedge fund space who was also part of former President Donald Trump's team at the White House.

For a little bit, the story gets into his ties to and his hedge funds performance hit thanks to Sam Bakeman, Freed and FTX It is an incredible story, so many juicy nuggets in it. It is gotta get a table read at some point. Let's get to the story. Bloomberg News hedge fund reporter Kathy Burton, she wrote it cheese in her interactive broker studio along with the editor Bloomberg

Business Week, Joel Webber. Joel, we're talking about the moves. Yeah, and you know before he was before and after he had that very brief stint as President Trump's presse secretary, he managed money, and Skybridge has been a big name within the hedge fund community. Founded Salt, which is basically a gathering with a big and important gathering within the hedge fund community, has managed as much as nine billion dollars, but not as much of late. Kathy Burton, what's going

on right now? The assets have fallen to about two billion dollars and what's more, about half the assets are locked up in a fund, and he's not really letting all the investors out. He's letting it out really like ten percent or less. It must be happy about that. They're not really that happy. So that caused me to start to look at Skybridge and see what had been going on there. We'll take us there, So tell us

you start to look into it. He's an interesting character and like I said, this story, the way you describe him and everything is just lovely. So take us to take us on that journey. And what you found out, well, I found out that really when things started to go south for him, as when he went into the White House, there were a group of clients who weren't really happy

about that, and so they started to pull money. And then when he came back to the White Huf after his very brief stint, he ended up losing a bunch of money on some credit investments. And the person who he had sort of put in charge is a guy that he knew from law school, Harvard Law School name Brett Messing. I know that last name, Yeah, exactly. He's

the brother of a Deborah Messing. You go. And so he Brett panicked apparently, and took a huge hit on some of their biggest investments and then said, oh, we should get into crypto like so many of us. Wait, wait, cute, dull not just get into crypto, but specifically get into FTX and Sam Bankman Freed's crypto, which exactly, but they had made a big crypto investment sort of towards the top of the market, and then they decided to invest

with Sam Bankman freed. They bought a piece of FTX and then Sam bought a piece of Skybridge and where did that go? Well, then two months later he got arrested and so there it is in bankruptcy court. That's where you don't want to end up, either if you're the Moots or if you're SPF okay, So lots of drama in between there. But what um One of the things that really stands out is that wrong Way crypto bet being this is a big money version of that.

Like we've seen that small time stuff, but we haven't really always seen it necessarily on an institutional level like this. So what do we know about who was exposed to Skinnermoucci and Skybridge's bet here? So the biggest investors are the clients of Morgan Stanley, their wealth management clients. They have about sixty percent of that public that the fund that Mudge runs YEA and also Coca Cola pension fund is one of the big investors in that fund as well.

That's amazing, Like I just think of the high profile I mean, can we can we take a step back for a moment, because I think about you mentioned salt as journalist business journals, like we'd all go to the event right cover it. He added, who's who of people in money management the hedge fund industry, like who is Scaramucci? And you're reporting because you really take us through kind of his journey as you uncovered kind of his world.

I mean, I don't know, I'm curious about his role in the financial community and in the hedge fund industry. And don't forget his reality TV exposure forgot about which there is a lot of it. So he started Skybridge in two thousand and five and it was pretty small, and then he bought part of City Bank's head fund business, which then he became a fund of funds, which is a like that's a play, you know, I think that's a big move to go swallow up something like that.

Absolutely was four point two billion dollars that he brought him in, and I don't think he had that much money under management before that, and so he built that to this nine billion dollar business and so that was pretty impressive. They almost he almost lost his business pre the City merger. During the financial crimes and that's when he started salt as a way to sort of bring attention to his firm and hopes that like money would

flow in. It seems like it worked well. At least everyone knows him right right, right well, and then you know the other element of it. He really just like I feel like he's the little investor that could. So he builds his fund, he builds his event that we all covered, and everybody seemed to want to be there and interviewed and so on and so forth. But he really also wanted to be in politics. You and cover, Yes, absolutely.

So he was always the once he bought the city business, the city people were the ones that ran the business. They were the investors, and he was just the ultimate snooser and so and he was good at it and he was very very good at it. And so that's when he started thinking, Okay, I have this big, successful business. Now I can go into politics. And he thought about running for governor, and then he decided he was going to put his train to the Trump and that lasted

a total of eleven days. It's a good train to hit your wagon. Two there, Katherine, I had asked you for some questions for Scar Muchie, because I had an opportunity to interview him right after Dabos and he'd given me fifteen minutes and ended up being closer to two hours, and I just kind of let him go. But a lot of the anecdotes that you have in your piece. He also shared with me his usage of botox, that his wife was very upset with him after the Trump

administration's stay. But in terms of what relates to the reporting and the maid of your story, not just the fun stuff. He talked about bringing his son with him to Dubai to meet with SBF, and that now he's kind of used SPF as an example to his son of like, we come from this family of my dad was a crane operator, and you need to stay humble and not lie to people. In his words, did you get a sense of his reading on SPF on FTX how that might differ from like the institutional view of

crypto and the downfall of FTX. Not really, I mean I feel like that he went to he and Sam hooked up because they both needed something. Now he claims that he didn't need money then, even though his fund had been in a free fall as far as performance, and Sam as we now know definitely needed some fest investors. So he came to the Ultimate Marketer to to help him raise money, and they went to the Middle East and he was hoping to reach that's that's the buddy

comedy that I want. Yeah, but what happened on that trip today? And what do we know about that trip too? Like who were they talking to, what was the plan? What happened as they you know, left, They wanted to raise a billion dollars and apparently they had some uh commitment already from previous investors who were going to re up.

But these venture guys don't want to re up unless they get someone else to come in and say, yes, the price we're paying is is good, And they couldn't find anyone to do that, so they came home empty handed. And also he had already raised money in that January, so it was only ten months later he was coming back to raise almost twice the amount of money. Yeah. At that point, Crypto Winter sort of already unfolding. Yeah, so you would think that wouldn't want to give him money. Exactly.

Crazy timing. Just like weeks after that, we just saw FTX implode and everything that fell out from there. But worth mentioning there, like, if you're Scaramucci, you had a great little run in twenty twenty one on this bet. So I mean he wasn't alone in getting drawn into crypto and and you know, throwing more money at it basically, right, Yeah, And it was interesting because he didn't use the SPF investment to take himself out of Skybridge. In fact, he

took that. They just issued more stock to him. They took five million dollars into the company and then bought these kind of crazy coins except for bitcoin coins tied to FTX. So that bankruptcy court thing, which is where we find ourselves yet again being nosy journalists, because that to get that thirty percent stake in Skybridge that FTX has, he's got to basically wade through bankers by court. So what does that process look like for him to be able to get back you know, that that share them?

As I understand it, he does have some right of refusal if someone else comes in and wants to buy it, but I guess he's just going to bid for it whenever that comes up. And I don't know, I can't imagine they can really do underbid it a lot because it's bankruptcy court, right, So so all of that would make me reconsider my bitcoin feelings. How about for Scaramucci, Oh no, not at all. He says that bitcoin is going to go up from here and anyone who doesn't

like stick by him as being stupid. Basically, can I what do you make first of all, yea of a guy who kind of likens himself to a cockroach, like I'm still here, doesn't matter, I keep popping up. And then he also says, I do think I am a psychopath. Um, there's so much out there because this is someone who certainly has been out there, loves the media. I think it's safe to say out there, whether it's on TV,

whether it's radio, whether it's podcasting. Um, your thoughts as you did your reporting on him, on kind of who this guy is and his role or does he stick around and like what surprised you most about him? As well? We're entering that point in the conversation where we're just gonna pepper you live from interesting Scaramucci questions, because he

is an interesting guy who just seems to keep popping up. Yes, And that was one of the other things that sort of drove me to want to do the story is that any time it looked like he was really on his last legs, anything would happen, he would come back. And he was actually been quite unhappy about the fact that we quoted him calling himself a psychopath and that he is basically out for himself and has said on

Twitter that we took it out of context. But I think everything that he said to me has said that he does really look out for himself first and foremost, and definitely all the people around him, and the reporting my reporting said similar things. How many hours of podcasting Scaramucchie podcasting did you listen to? Too many? Too many?

If I were going to listen to a few of your favorite moments in Scaramucchie podcasting, which there are no doubt many, but where would you direct my attention if I wanted to understand how the Mucca is faring in the world right now? I think the one that we quoted in the piece, but actually both of the ones that we were quoted in the piece, we're ones that

I thought were particularly good, prolific, particularly that Andrew gold one. Yeah, okay, prolific podcaster, got to respect that that was just not a sidebar in the magazine, like just the podcast element. Definitely, Yeah, it's all. It's essential to the narrative. Carol, No, it's so good. It's it's you guys have to read the piece if you're listening to this, because you're obviously an incredible writer. Just everything that you lay out is so

beautifully written. Um. But when I spoke with him, he also, um, just as an aside, he paused the interview to confirm two consecutive knights of reservations at the Polo Bar, which I just thought was very on brand for him. Um. And so are you not going to bring up that? Was it the wife and the girlfriend in the at the hotel and they is it that they were like doing a zoom? Yeah, that's Brett Messing. Yeah. Oh is that Brett Messing? Forgive me? Forgive me? Sorry? Yeah yeah, no, no, no,

But but there are all these funny anecdotes, right. But I wonder as we kind of get to the end of this we've got like thirty seconds, is the investment community viewing him as a serious figure? I think you can see in the flows. Perhaps I think less and less given the feedback that I've gotten from the story. Yeah, but then again, if bitcoin goes up the way he right says it's going up, then you know he's he's

the winner. Been sure, yeah, if the money's there. In the meantime, what kind of redemptions have with been the change in redemption strategy at Scabbridge. They were they were getting back ten percent of the money in September, and at the end of March they were going they were down to seven point five and the demand was something like sixty percent of the money wanted out, So unbelievable. Well, great story. Another great story from Kathy Burton, hedge fund

reporter at Bloomberg News. Here in studio with us. I'llow me tell Webber, the editor of Bloomberg Business Week. This story is in the new double issue Bloomberg business Week that's already out at Bloomberg dot com, Slash business Week, on the Bloomberg and of course on newstands, so be sure to check it out. You're listening to the Bloomberg Business Week podcast, catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app

band you two. You can also listen live to our flagship New York station Just Say Alexa play Bloomberg e Loove and Dirty so inflation, bank collapses, mortgage rate shooting, app car prices, don't even ask layoffs at it all up, and yet we are all pretty fearful about checking out our four oh one case. So what do you do with your money your life in our brave, new and wild world. So let's get into it, because there's this

great story in the new issue of Bloomberg BusinessWeek. It is out on newsstands, the new issue on the Bloomberg and at Bloomberg dot com slash business Week. Joining us right now is Bloomberg Business Week Markets and Finance editor Pat Reigney, or here in our Bloomberg Interactor Broker studio. Pat I said to you before we get going, these are the kind of stories I always expect BusinessWeek to do,

and you do it so well. It's like the practical information taking the macro issues and kind of what do

we need to do? Tell us about this story. Yeah, So the genesis of this story was my colleague Brett Began was talking to me about just sort of like we were just talking across the row about all of the financial concerns that we're coming up in his mind, and it felt like, you know, a lot has changed in finance after kind of a long period of everything being the same for a really long time, It's true.

And then we had kind of the pandemic emergency, and so we were mostly just kind of covering the emergency, and it felt like any advice you would give would be incredibly temporary. And now all of a sudden, it's like we've had this kind of shift and a lot of things are a lot of things are changing, and people's financial lives are very complicated, and honestly, the way that we put this together was we started Brett and I and Craig Giemona, who had our personal finance coverage,

and most importantly the writer of Clare Balancing. We all just got together and said, like, what are the things that we're all worried about. So it's got a mix of things on like what should you do with your you know, with your investing to um something that I hapened to be thinking about all the time, which is, uh, how do I think about the cost of college for your kids? To buying a car? Is this a good time to buy a house? Um? All of you are

really expensive right now? Yeah, basically, part of the entrance. Everything's expensive and kind of frustratingly, including like stocks. Yeah, well that's another good thing that you get into invaluations. It's something we talk about, you know, in our simulcast and constantly like trying to understand is the market fairly valued or is it overvalued at this point? Yeah? So, um,

you know this is this is kind of tricky. Um we've had uh, you know, we're all trained to buy the dip right and um, twenty twenty two was a dip um and so you want to know it's like, well, so so now it's like everything like kind of an incredible bargain, and you know it's clear. Claire found by looking at the numbers very quickly. It's almost any metric you look at, it's like, well, it's definitely everything's definitely

cheaper than it wasn't twenty twenty one. But if you sort of like you zoom out the chart, yea, and you look at price sales, price book. My personal favorite metric is I like to look at like the earnings yield because it's just like a really straightforward to like read on, like what do you get for your money when you buy a stock cheaper than it was not historically cheap, you know, And what does that tell you? Well, you know a lot of people who are listening to

Bloomberg use the terminal. They're making decisions about tomorrow, a week, a little, a little while long. This this story is very much kind of a kitchen table kind of story. I think most of the answer is, you're not going to get this timing right. These are the questions when I get together with family or relatives or good friends, like this is the kind of questions that come up and that they ask you. Right, They're like, hey, you work at Bloomberg. Can you tell me whether or not

I should get an amex? You're like, I mean, I don't covers Future is doing it's right? Should we get that new amex? You guys get into that as well. Yeah, I'm you know, and that's I am not a points guy. There are people I know who are like constantly like maximizing their points and things like that. Maybe they travel more than me. I forget Charlie Pellett, here's probably listening with points. Oh my god, well I gotta get to

travel awards and credit cards. But I digress. I took a flight to Dubai and all of a sudden I started thinking about points. It's like, gosh, what there's points here, aren't there. Yeah? So Amex has a card that has like an annual fee of like seven hundred bucks, and like, you know, it's got a lot of rewards and it looks like, you know, in your first year, probably the points you get might might justify that cost. But you want to think ahead to like, you know, is that

going to make sense over over the long run. And the answer is kind of like, are you a points guy? Are you a point scalt? You know, if you're somebody who thinks about it, maybe you can kind of squeeze those rewards out. Yeah. I don't like to have that brain space in my life. Yeah, it's kind of annoying. And yeah, so you should know that about yourself. I think before you kind of sign up for the fancy new car. Well, you bring up Dubai, which is the place to move if you want to pay zero taxes?

Because that's what happens if you move there are literally no taxes. One of the things that you cover in the story, though, is which state in the US you could move to to potentially get a little bit of a discount on taxes. Yeah, so, I mean we've we've certainly heard this story. I mean, particularly with the pandemic that people are thinking about moving to Florida moving to Texas.

People are moving to Florida, are moving to Texas. I mean the problem with that is always like, well, you know, if you're having this bright idea, guess why people have

been having this bright idea for about five years. And anybody who lives in Austin can tell you that, you know, the the Austin housing market wasn't really ready for all the people who came there, right, So you know, if you look at sort of like local salaries and like what does it take based on what people make, you know, to save up for a down payment on a house in Austin. Guess what? It's just like living in New

York City. I have to say. I was just having this conversation with somebody who's starting to actually think about like retirement and stuff, and just thinking, Okay, what are the markets I should go to? And I was telling them a story and anecdotal story of some family members who went somewhere cheap market. But in the last three four years, the housing prices have just shot up. This

is like in the Carolinas, it's just off the charts. Yeah, yeah, And it's tough and in particularly like if you're thinking about retirement. I mean, my wife and I are, you know, thinking about buying a house and U, you know, as a friend of ours called it, what will this be your forever home? And we sort of think it will be. But guess what we're looking at the market and it's like, well, the market's still pretty expensive. And on top of that, now you know, rates went up, so it is like,

is this going to make sense? Are we going to be you know, finally buying in you know, both at the top and at a high rate, And did we miss our shot? And that's always just a really like that's that's like a really tough dilemma that I think a lot of people are facing around now. Well. And it's funny that you say that, because I feel like, because they say, we'll wait a minut folks, it's not the mortgage rates of the nineteen seventies. It doesn't matter.

It still feels really high, and it did go up a lot in the last year or so, right, And it's not the mortgage rates in the nineteen seventies, but it's not the home values of the nineteen seventies either. So the how the home values were pushed up by the very very low rates, and now we're getting that shot of high rates, and the houses aren't a liquid market. They haven't just adjusted down magically to to to make that to make that worth it. They might, but you

know you've got it. It's a pretty tricky decision. And unfortunately you can't just type it up on your Bloomberg terminal and see that and watch the watch the price of housing goes down as interest rates go up. The housing marrier doesn't worry back that there's a good function half we're running out of time. But I will say, there's a couple of things that get into I'm thinking of quitting my job for a new one. What should I consider? Can I just leave my job to explore

like life man, or I'm thinking about freelance? Will my taxes be a nightmare? I think it's just so relevant ahead of the monthly jobs report in a week where we had so much jobs data. But that's going to be a tease, folks, because you're going to have to go online and read it because we're running out of time, pat Rigneer, this was fun. Thank you, You're so appreciating great reporting by Claire Ballantine. Pat Rigneer. He is markets

and finance reporter up Bloomberg Business Week. Here in our interactive Brokers studio, you're listening to the Bloomberg Business Week Podcast. Catch us live weekdays from two to five pm Easter on Bloomberg Radio. The Bloomberg Business a band you too. You can also listen live to our flagship New York station Just Say Alexa play Bloomberg e Love and Dirty. Our next guest knows certainly first time on Wall Street, the highs and lows and for changing how Wall Street

finances deals. A high yield pioneer. Much reporting has been done on his life, A very private individual who has created very public forms via his milk and institute and more to shed a lot of light conversations and action on the global challenges of our time. He's got a new book out. It's called Faster Cures, Accelerating the Future of Health. He wrote it with Jeffrey Evansmore joining us as mikel and Mike joins us via zoom in Los Angeles. Mike nice to have you here on Bloomberg? How are you?

I'm Greg Carol looking forward to seeing you at the Global conference later this month. I am looking forward to it, and I have to say my first milk and institute there. I assumed it would be a lot of financial types. I was surprised by the wellness and the healthcare component. But in your book you really bring it all together. I mean, you can't have advancements if you will in healthcare and R and D with also without not having

that access to capital. You bring it all together. Talk to us about why you wrote this book specifically and why you wrote it now. I would say why I wrote it now is a very simple answer. We had geared up for COVID nineteen and everything that went before it. An incremental funding by the federal government of a half a trillion dollars laid the groundwork, and it was nine weeks sixty three days between the sequencing the DNA of

the virus and putting it in the first human. We get geared up for emergencies and then we get geared down. So the reason I wrote this book was to reflect on fifty years of medical and healthcare progress, but also as a call to action now that the next generation, the new technology is to be deployed and we have an oportunity to finally bring to an end many life threatening diseases. It was to keep the energy going both financially and continuing to recruit the best and brightest into

the field. Dent wind down. Mike, I have to say one of the things that struck me in your book, and I really thought about this coming off the pandemic, the collaboration that we saw on some existing work that had been done years before but just jumping on and the coordination, if you will, that we saw. You talk about how medical institutions are competitors, not collaborator, especially when it comes to gating money for R and D. That

system that we still have inherently flawed. Well, it's changed dramatically in the last thirty years, where I would say today you have team science. So we just finished some major breakthroughs coming out of Melbourne at the Peter mccollumn, but it was coordinated in Europe, the United States and

other parts of the world as a team. And so there has been but never have we seen cooperation as we did during this recent pandemic between for profit academic science centers, government, the idea that the government would put forth money to build factories before we knew if the vaccines work, or fun research and manufacture vaccines before we

knew that they would work. So that one, the cost of the country, just this country, I maybe a trillion a month was so great that investing in products and plants of a few billion dollars if it didn't work, was small compared to what was going on, not just the United States but around the world. Mike, before the pandemic, and I take you back to you growing up in the fifties, and you take us through your life and some of the health crisis that your family has had

to deal with. You talk about your dad, your mother in law, your kids, and of course yourself a first cousin as well. This book is very personal personal. What was it about the crisis that your family, the medical crisis that you yourself went through and your family the impact that that had that has gotten you to do what you have done over the last few decades. Well, I would say just the realization of my father's experience

with polio and then with melanoma, our children's challenges. No family, there isn't any family that doesn't have these. Our family is not unique. One and two men get cancer in

their lifetime one in three women. But the fact that I really could not discuss with my dad what we've been able to do to create access to cap it on in the financial world, make it available to millions of companies, create jobs, etc. Because of his own medical issues in many ways, he was not able to succuss his success with his parents and they both passed away. But I think there was that very famous music and song that life gets in the way, so you have

a plan, but something happens in life. And I don't feel people in economic terms or in the financial world really realize that more than fifty percent of all economic growth in the last two hundred years can be traced to advances in health and medical research. And if we just reflect that at the start of the twentieth century, average life expectancy on planet Earth was thirty one and today one hundred and twenty years later, it's in the

mid seventies. This dramatic, dramatic change not only in the extent of life, but the quality of life has driven the world's economy. In Southeast Asia, you've had a doubling of life expectancy in two generations, and now due to medical breakthroughs in Sub Sahara, Africa, many countries are seeing a doubling of life expectancy and one generation. How that affects the economy, how it affects relationships between generations is

greatly underestimated. No, I think that. You know, we talked so much about economic impacts, market impacts, and that is certainly clear when you think about it that way. I want to go back to what you said you were quoting. I believe a song you have a plan, life gets in the way. Talk to us about you obviously had a plan and then life got in the way. When you are forty six years old, and there's been much written about your terminal cancer diagnosis back in nineteen ninety three,

I can only imagine how that felt. But reading about it in the book, you know, you got your diagnosis, and then it seems like you set about and got to work talking to a lot of different doctors to figure out that there had to be a better way. Well, I think one of the things you learn that when people have life threatening diseases. And I had lost ten relatives by that time, and my prognosis was worse than

all of them. Is often at the beginning they do the least possible, and when you have a reoccurrence later, they'll do anything to try to stay alive. And so I think one of the things we're trying to bring to bear here is that technology affords you such a better chance today. And I would say, unfortunately, most of the people diagnosed in my condition thirty years within five years had all passed away. But I chose a different

path that involved nutrition. Iervade a medicine. I went to China to visit with doctors, Russia, healers, witch doctors in Africa, Western medicine. But I found a lot of strength in Indian medicine at that period of time and continued with observing many of the things that have been around for five thousand years to try to energize my immune system. But the world is so different today than it was when I was diagnosed. Then they told me I had

eighteen months to live. Today, if you were diagnosed in my condition, someone might tell you that you're not going to die from cancer. You're not going to die from this disease. That we have solutions and the marrying of really three things. One access to capital to recruiting the

best and brightest to go into this field. And three the tremendous advancements in technology, with computers a million times faster and data storage costs one billion have brought us to where we are today, that we have an excellent chance to find a solution for each individual who has a life threatening disease in their own lifetime, which is great to hear some optimism having some own family members who are dealing with some difficent health issues, it does

feel like there are a lot more options. Hey, Mike, One of the things I was thinking about and prepping for our conversation was that when you got your diagnosis and you reached out to the healthcare network that you knew or were able to tap into various resources, you're already philanthropic and doing work when it came to healthcare and medical research. You know that access enabled you to I think open doors that maybe some would say we don't all have. And I feel like coming off the pandemic,

we talked about the inequities in healthcare. How do we get rid of the inequities in healthcare? Is it even truly fully possible? I believe it's possible, and we're on the verge of making it happen. So when you just think it costs three billion dollars, took more in the decade to sequence the human geno. Now less than an hour and one hundred or two hundred dollars, and someday it'll be ten to twenty. It's available for everyone, and now in terms of cost, the idea that we can

get the right treatment. So I was on a commission here in California number of years ago and the name was the Personalized Medicine Commission, and within six months or eight months, we changed the name to the Precision Medicine Commission so we could be precise. And when we submitted the report after a couple of years, it was the Precision Health Commission, so we could figure out not only to treat you after you or sick, but before. But as you pointed out, during the pandemic, we learned a

number of things things. One, we knew there were food deserts where people couldn't access fruits and vegetables in their neighborhood. We then discovered there were financial deserts where people didn't have bank accounts. And when the government wanted to write funding to serve as a safety net, they couldn't get the money to people. And lastly, there were health deserts where people did not have a facility in the neighborhood

they could visit to take care of. But if we start with just the United States, the demographics in the United States and have changed so dramatically. So sixty years ago, seventy five percent of everyone that was not born in the United States was born in Europe and ten percent in Canada. Today seventy percent of everyone not born in the United States was born in Latin America, Asia, and almost eleven percent of everyone not born in the United States was born in Africa or seven or eight percent

in the Middle East. So the face of Americas changed dramatically, and we need to make sure for clinical trials and access to healthcare every individual has that opportunity, and that

is one of our focuses that faster cures. The center is health equities and access, because if we primarily have people of European ancestry going into clinical trials, we're not going to get the exact breakdown of the population, and so we need to find a way to recruit and provide access, but the dropping in cost of getting the facts.

The idea that we can change your genes, then we know we can do that today by Christopher, We're not going to do it because we don't understand all the ramification yet, but we do know that you can change how your genes are expressed by changing your microbiome, and you can start to do that in seven days by changing what you eat, what you drink, and your lifestyle.

So there are numerous programs available today throughout this country that are now reaching out to a much more diverse population to make sure what we learned during COVID is we have to find a way to get healthcare to our entire population. And as you know, there's been a

lot of research. The first thing that came out was that twenty minute subway ride from Manhattan up to the Bronx or so you reduce life expectancy by a decade or so, or if you look at other parts in Baltimore, I think life expectancy in the city is almost twenty

years less than it is in the suburbs. So we know the problems, we have the data, and now we need to put the systems in place to take care of that shortfall in your book and enter the early innovation and finance turned out to be a template for much of what you all have accomplished in the search

for faster cures. Your financial background, I'd be remiss if I didn't ask you, do you ever miss Wall Street or at least being involved specifically with a financial firm, either on Wall Street or out there on the West Coast in the day to day mind, if you will. The Milken Institute is heavily involved. Our Center for Financial

Markets are global efforts creating new financial markets. And you make a very interesting point in that the analogy holds when I was a student at Berkeley after the Watts riots had occurred here in Los Angeles, when I was visiting on August eleventh, nineteen sixty five, I changed my major to focus on finance and access to capital. And then I met a young African American man who told me his father didn't have access to CAP because of

the color of his skin, and nor would heat. And it didn't make any sense to me, and so I switched and I went back to Berkeley, and what I discovered was I could access data as a student free that allowed me to look at the history and books that have been written about credit, and what I discovered is what everyone was saying about credit was just wrong. The best credits happened to be entrepreneurs and companies. The worst credit was countries throughout all of history. But you

couldn't access medical data. So today it's a totally different world than it was when I was at Berkeley almost sixty years ago. Today, this medical data exists. There's numerous companies that have loaded the data of individuals, their DNA,

their microbiomes, their biological history, their clinical history. And so today a young student as I was at Berkeley could access this data as a medical student at a university today and test out their theories the same as I was able to test out my theories when I was both an undergrad and a graduate student. And that is why we're seeing this explosion of advances in medical research.

We don't have to guess anymore of what is the potential best treatment for an individual or what their disease is. We now can identify what is that disease, just like we identified the DNA of the virus and COVID nineteen and then created vaccines against it. And that's the big We just got about thirty seconds, Mike. That's really the big game changer when we think about what takes us to the next level in healthcare. And again just got

about twenty five seconds. Well, we're on the verge of our understanding of immunology to allow your own immune system to rehabilitate you to deal with disease. And the once again, the reason I wrote this book now is that we can seize defeat if we don't continue what we were able to accomplish during COVID. We are on the verge of a revolution that can eliminate many life threatened diseases for our children and our grandchildren if we just stay

with it today. Well, so appreciate getting some time and looking forward to being with you and your team out there on the West Coast. Mike Milkin, thank you so much. As we mentioned, the new book is Faster Cures, Accelerating the future of health. Mike, thank you. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg

Business app, and you too. You can also listen live to our flagship New York station just say Alexa play Bloomberg E, Love and Dirty. Yeah, so we're going to talk about growing, specifically agriculture. A little bit of background everybody. Our Bloomberg New Economy team, they drawn insights from global leaders innovators along five editorial pillars Finance, Commerce, sustainability, resilience

and security. They hold annual events around the world. They're just looking to get to the heart of our most important issues. And in keeping with that, they have the Catalyst program that they established in twenty twenty one. And this is a simple goal finding people whose innovation's efforts and objectives have a genuine shot at changing the world

for better. So they are scientists, their entrepreneurs, their policymakers from all walks of life, but they all demand recognition, including our next guest, who is a member of the Bloomberg New Economy Catalyst Class of twenty twenty two, doctor annasjia Volkova. She is CEO and co founder of Regro. She's also included in Fast Companies list of the world's fifty most innovative companies of twenty twenty three, a twenty twenty MIT thirty five hundred thirty five innovator. When a

BBC's Top one hundred Women. She's given two ted ex talks about egg technology, remote sensing and sustainable farming. I had to lay it out here because you are just a rock star. She's here in our Bloomberg Interactive Broker's Broker's studio. Welcome, welcome's delighted to have you, Carol. You got me blushing start bringing so hard during that it was amazing. I know, I know, I'm really sorry, but I think it's important to lay it out because you're

getting noticed because of the work you're doing. First of all, welcome and thank you for coming in. You're having me and I am a little subjective. You are a Blueberg catalyst, but they choose really well and really smartly. Tell us about regrow and what you are doing. So you know how we have a climate crisis. Yeah, I heard. Good agriculture unfortunately has something to do with it, as opposed to being an industry that can heal the planet. That

seems very odd, isn't it. It's the industry that really works on the land and therefore should probably be good for a climate. But in host World War two era, we decided we just need to feed everyone. At old costs. We needed to produce so that people wouldn't go hungry, so we wouldn't get another wool, and that was the optimization that we were running, so production right whatever, at all costs production, and we probably did not take the full cost accounting of the planet resources that we were

growing on. And now agriculture contributes about a quarter of old greenhouse gases. Pretty staggrain, isn't it. That is pretty staggering. It is, And I mean there's so much negative that we could talk about with the climate crisis. The way you put it before when we were talking is that it's the eleventh hour for humanity, which really struck me.

We'll go there. Why why is it the eleventh hour? Well, we are in a bit of a vicious cycle between agriculture contributing to emissions, and emissions making climate more volatile, which makes agriculture more uncertain, and the agricultural production more volatile, and it continues on. So we need to step out of that cycle and truly change the incentives away from profitability or simply production at old cost and production at a true cost accounting for the planet. Forgive me, Anastasia.

I feel like people are gonna be like, I can have a grocery store. There's plenty of stuff there. I have no problem with this. So help us understand because you're to me saying crisis, right, and I've had We've had others who come on and talk about this same thing. But again, Mattie and I are going to go and we can buy probably whatever we want tonight for now because we're here in the US. Not everyone is as

privileged as we are. And every year there's at least two major production regions, whether it's Ukraine or Brazil or Australia, that are experiencing just catastrophic with other events floods, droughts altogether. That is what, in a way is driving the cost of food up. So clearly everyone's notice, we're paying more even if you can get it now. Because this is one of the biggest economies in the world that will

be driving demand supply towards us. It may be that we're currently doing it a bit of an expense of a global self. Well, that's such an important piece because even if we do have access to fresh produce, for example in the US, we're all feeling the financial impact that climate change is having on our food supply chains and groceries friendly is frankly is not what you judge it by because groceries you can have local supply chains or whether it's vertical farms, whether it's someone shipping it

across the country. But it's truly the cost of substantial commodities like wheat or availability of sunflower oil. Post Ukrainian crisis has become a major topic in the industry. How are we shifting the production? What are we going to do about it? Unpacked that somewhere because I do feel like the Ukrainian or the Russian war invasion of Ukraine, which you are Ukrainian, So just because we want to talk to you a a little bit about that, but I think a year ago, all of a sudden we're like, whoa,

we had no idea. What would we call it? The bread basket? Right, and to understand how much was in production. Talked to us a little bit more about that, and then thinking of that, like you said, it's not necessarily the stuff we go into the grocery stores. It's stuff like that the heart. Yeah, the massive brands that you buy in a grocery store, they all were sourcing from Ukraine.

One commodity or the other eighty percent of the world. Sunflower, one of the main drivers behind vegetable oils, is produced in Ukraine eleven to fifteen percent of wheat. It's feeding not just Europe that does not have that production region,

but also Africa other areas in the world. And when you start clogging up the food web that has been very resilient uple until that moment when you start to closing ports or weaponizing food, you really start feeling the impact of how important that production was for us to be in this fluid, ever balancing cycle of what felt resilient. It's going to get more out of hand with climate

crisis really kicking in and wiping out harvests. And looking into your background as someone from Ukraine who had family there as well, can you talk a little bit about how that, combined with your expertise on the climate, has changed your perspective on certainly, And it's definitely a privilege to be sitting with you here and telling the story and drawing the attention to the Russian war on Ukraine.

No one expected it, no one knew it was coming. Yes, there was invasion eight years ago, but it wasn't a full scale invasion and Ukraine is the definition of resilience amongst nations right now, and hopefully everyone can see that they continue to farm, They continue to literally pick minds and drones out of the fields, to continue to plant or harvest or fertilize crops or whatever they need to do, because they know that's their responsibility for themselves as well

as the world. And I hope that the world will take on a little bit of responsibility for the security of such an important country. What do you think the world is missing when it comes to the war in Ukraine.

I guess there's just a lot of misconceptions around. Oh maybe if we empower Ukraine then they will be also able to take back some more territories there fighting for their lives, and I think Europe is very vocal about it internally, but there's certainly not yet a critical mass to say, how do we put a stop to it? President Zelenski tell us, how do we put a stop

to it? We will support that plan. Let's go and execute against that plan rather than trickling the support in which just results in frankly more dead children in Ukraine

right now. Yeah, I just think so much about the ptsdpiece as well like, even if let's say the war ended right now, it's not like everything would go back to normal overnight and the wheat supply would suddenly be back to normal, or the buildings would resurrect themselves right and people could just easily just go back to the way it was completely And I think even with agricultural crisis land or into the war, and we haven't even

started talking about the energy angle into it, because agriculture is so connected to the supply of fertilizer that depends on the primary energy sources into the cost in a big way. It feeds into the cost and frankly just controls controls the Asians exports, imports, what they buy, how much food security they have. We are not going to be able to see that overnight go back. It's agriculture isn't at least an annual cycle, if not a multi year cycle. We have about a minute. Then we're going

to come back and continue the conversation. But what do you say to people again who are like, we're fine. You know, people used to talk about too. You know, the world's falling, and we come back, we bounce back. We're gonna have food, We're gonna be fine. So imagine during those times of civil war in Ukraine that everyone went to school. Sorry, civil war in the US is

what it feels like in Ukraine. Can you possibly imagine that the times would have turned, that there wouldn't be one country with all the states, that someone would be shooting somewhere right now, one hundred people a minute. What would that feel like? That would feel really odd, bizarre, and you wouldn't put a stop to it immediately. That's what it feels like. So we've been talking about your company, tell us specifically about the work you're doing and the

impact you're having. Yeah, we talked about Ukraine. We talked about climate and how do we change the way that we manage agriculture by optimizing for what the planet needs to get from us, not only give us. That is a question of information and insights and do the right people who are making decisions, Do they see the true cost accounting? Do they see how farming is taking or

giving to the environment? And Regrow does just that. We provide insights to large companies all across the agriculture and food supply chain to help them see their so called Scope three emissions or the emissions on the farm and help lower them so they can be part of creating the better future. Today is to eat to some extent as stage to have to think about. Okay, so you're doing something, you need to think about there's actually a dollar value on the cost of how we impact our climate.

That's need to think about it that way. That's exactly

it like incorporating that cost of externality. So for example, if we're treating soil poorly and we till it a lot, we actually are reducing its resiliency and we are not going to capture as much water the next time we have a flush, flood, rain event, anything, and we see the effects on that and for example Central California, Central Valley compared to if we were actually putting the investment for the long term, we would see the resilience and it would pay off and we would not have the

shocks to the yield an agricultural system in the worst years and the best years. Where are you seeing the most buy in for change from like the farmer all the way to the CEOs of big banks. Yeah, everyone actually is aligned on the mission of this is one planet. In Nobody in agriculture and food industry will literally have any businesses if we don't invest in this. So what do you say, you mean everyone is aligned? They are aligned. Actually they Yes, we need the future, we need resilience,

We need it now. So farmers, the big food companies, farmers, their most important agenda is to pass the land and next generation the company's perpetual planet profits. How are they going to get into that world if they don't invest in it now? Banks alike in a little bit, but they're trying to catch up. But the industry that so clearly has experienced the shocks is working on it together. Can we tell you got an award today, Yes, of course, a UBS award, Yes, for being a global visionary. Okay,

so there you are, UBS, big bank. What kind of conversations were they having in their thoughts because money makes things happen, yes, and they want to guide their customers, their clients to invest more sustainably, to invest in the solutions to the future that will build the resilience in the portfolio of their customers, in the portfolio of these industries. Massive industries where now rewiring to be optimizing for the

future of the planet, not just profit both. And we were talking about the difference between short term profitability and long term Have you found that discussion to get easier over time getting people? Yeah? Tell us the breakdown? All right, Okay, those who are watching on YouTube and Blueberg originals can see I think her face on a stage's face, or maybe they didn't butt she was like a little yeah,

a little bit skeptical. Skeptical, that's a good word. Um. Yes, I think the long term discussion, it's very hard to quantify the benefits of long term value of resilience. That is where the sticking point is. How about a word for you existence? M Okay, sorry, yes, yes, that is truly the award the ability for them to continue to exist. But I think in our in the corporate mentalities, what we're seeing is you often need to show this is the cost benefit. The benefits will come in later on years,

in the years to come, decades to come. The companies, frankly that are still held by families do not have any questions to this. They investing their running towards net zero. They have earlier goals twenty twenty five. The public companies are still trying to align and all the stakeholders. But I think about like you know, we talk so much about semiconductors, so important to so much in our world

right now. And you know, whether it's an INTEL in AMD at TSMC, if they're going to build a new facility, it's a lot of money, it's going to take a while to get there. I mean oil companies where you're doing drilling, a lot of money, a lot of planning. It takes a while. It's the same kind of thinking, the same mindset absolutely. So you provide data information and then what kind of what do your clients and composibility.

First of all, we help them understand. So you have global sourcing from older regions in the world, or even local sourcing. Where are your emissions, where a farming practices so good for the planet you don't have to worry about it, and where they need some improvement, and how

can you actually participate and incentifize that improvement. Whether you're a food manufacturing company, a grocery retail, whether you are a trader aggregator, whether you are a farmer yourself, whether your financial institution that's landing to that farmer or even holding the land acid there is something you should be taken off and adding back into that margin on the

farm so they can invest in sustainability. Can you give us one sweet thought as we get ready to go into a long weekend, have about a minute left of a company or institution that you worked with and what they did with it? Yes? So, for example, Kellogg is

a wonderful example. They brought sustainable rice products such as their special keys and crispies to the Wilmert shelf through investing on farm into emissions reduction, and they were able to tell that story to consumer so that mom will be in Walmart this weekend picking something nice, can feel good about that purchase, decisions good for the planet. That is such a great example and also reminds me to

ask you quickly. We have like thirty seconds not just offsets, right actually yea yeah, yeah, definitely value chain supply chain action together with all the partners insets, let's reduce what we currently admit. Let's not upset. Yeah, that is such a big I think. I'm so glad you brought that up because it isn't just a bout offsetting, it's actually reducing your impact. We need to work on it together if we are to exist. Come back, let us know

how your work is going. Really glad a very thoughtful conversation, very relevant in terms of some of the huge issues that are facing our world right now. And Astasia, thank you, congratulations on your award. Thank you many many award exactly at a stage of acova. She is co founder and chief executive officer of Regro. Joining us here in our

Bloomberg Interactive Broker's studio. You're listening to the Bloomberg Business Week Podcast got us live weekdays from two to five pm Easter on Bloomberg Radio, the Bloomberg Business app band You too. You can also listen live to our flagship New York station Just Say Alexa Play Bloomberg e Love and Verdi trol Master back with you, along with Madison Mills and Bloomberg Quietake Mattie. You know we love Bloomberg pursuits.

We always get a taste of the ultra exotic and luxurious when we get toward the back of Business Week magazines. My favorite part, it's so it's so fun to pretend that I can afford these things. Right. This week's section simply titled the Watch Special, and who better than pursues editor Chris Rouser to walk us through it. He's back from his trip to the recent Watches and Wonders trade Expo in Geneva, Switzerland, with some insights on some of the finest time pieces on the planet and the big

industry trends to watch in twenty twenty three. All right, Chris, we know that you and your team get some nice gigs around the globe. YouTube were so glad you got to take this trip. We know you love watches. First of all, tell us about what is Watches and Wonders.

Watches and Wonders is a giant trade fair where all a lot of the really big luxury watch brands come about forty brands and showcase their new wares to journalists and also to retailers because a lot of these brands sell through retail boutiques like Torneau in New York and went Band and Stuff. And it's basically where everyone sees the new watches and all high end, not all crazy

high end. Like there's the main fair that has a lot of big brands that you heard of, like Rolex and Protect Phillip, and then around the fair there's all these like little satellite things where people occupy hotel rooms and lobbies and they meet and try to, you know, impress new people. And some of those watches are, you know, as little as three hundred dollars. What was the most interesting watch that you saw? Most interesting watch that I saw?

That is a good question. That's like asking apparent their favorite child. Do you know what this guy loves? I know, well, I guess well. Protect Phillippe had this this travel watch which has two time zones on it, and it's a twenty four hour dial, so instead of what do you know, having twelve hours on the dial, it's twenty four hours and it starts at the foot of the watch, like where you normally have six o'clock, so it I looked at it and I was like, my eyes can't make

this make sense. But it was so beautiful and I loved it, and it fit the work the risk perfectly, and it was it was probably one of the ones that I would have wanted to take home. So cool. All right, So take us to we want to get into this specific coverage, but a little bit more on the event, like the mood and everything, right, because I feel like we've all been getting back post pandemic, So it's a second one that they've had post pandemic. And

it's actually a combination of two fairs. One that was in Basel Bozel World, which was humongous, and then this fancy, smaller one called at Sah. They came together two years ago. But last time last year, none of the Asian markets were there because they couldn't travel because like China was locked down, Japan everything, And it really felt last year like it was a fair for European guys in blue suits with fancy hair, and I was like, oh, I

didn't love it. And then this year it felt like it was the whole world of watches, which was really great, and then Vibe was really good. There was a lot of news that came out of it. It It was really fun. All Right, we've gotten to talk about the cover because Mattie and I both I think it's fair to say I've been drooling over this, but it was also a

watch that made a huge flash a year ago. Right, Yes, So I wanted to do a feature on Van Cleveland Arpels, which is a Reschmot brand, and they're mostly known as a jewelry brand. You probably know their Alambro bracelets, Lebron, James wars One, but I love their watches and they make all these crazy like jeweled watches and then also really interesting watches technologically wise, like they have really cool functions. And last year, you know, sometimes people ignore Van Cleef

because it's because it's Julie Rand. Last year they stole the show with this watch, the Lady arpels Er Floral, which has all these little flower buds on these little enamel flowers that pop open bite for each hour. So you look at your watch and you're like, what time it is? It's not efficient for telling time, but you watch you're like, what time is it? And you see how many of the little flowers are open, which reveal diamonds and sapphires on the insta. You have to count them.

You have to count them, and they don't open in the same order ever, It's always random, so you have to like poke around and look. But watching the hours change through these little flowers opening is such like just a wonderful, peaceful experience and it's a really cool technology that makes it happen that I m that everyone was talking about it last year and so that everyone came to the fair this year saying what is Van Cleef going to do? What? You know, and they showing up

with this booth. They have this crazy booth. The booths are like the size of how is bigger than the house I grew up in? And they had they had like twelve thousand leaves of morano glass handblown and then making this like jungle in the booth. It was just like an incredible place to be um and so we wanted to feature them, and so that's what the lead

story on the section is. I just want to know that like when you went over to look at it in the booth, like did jovison here's music like a little because you know, actually yes, because they play They have these automatons which are which are totally mechanical devices that like do you remember the movie Hugo with a doll that's an automaton, and so they have they sell these. They don't tell you how much they are, but they're

like millions of dollars um. Like you'll be looking at this sculpture and suddenly this music will start playing because it's a music box, and this big flower will open and this little not actually a little big like jeweled butterfly will float up and flap its wings and turn around, and it's all because someone wound, a crank and it's just a very cool, surreal experience. Can you just give

us a little bit in terms of what these things cost? Well, so Van Cleef, like an introductory watch will cost like seventy five hundred dollars, eight thousand dollars, but there are not a lot of those on the website. If you go and look, it's a lot of really cool watches where you tell the time by like two people walking across a bridge and kissing each other on the face of the dial, and those watches can be like four

hundred thousand dollars more than that. But it makes sense to me that they would be leaning into this kind of experience of a watch as opposed to actually telling time, because we don't need watches to tell time anymore, right, yeah, and what exactly? And certainly it's not efficient to be counting flower blossoms. Ye, But they you know, they know that what people love about mechanical watches as opposed to, you know, a smart watch is that there's all this

crazy technology inside that's like that's really old. But has you know, took someone so long to figure out how to make this happen without electrical power that's what fascinates people about these watches. Is this a good business for Van Cleef in our house? Yeah, I mean it's not a big part of their business because their jewelry business is okay, so big. It's like them in Cartier at Richmont, But yeah it is. It's it's a growing business for them.

It's stunny and I highly recommend folks go online get the magazine. Um, you gotta go and just look at it because it's and just expect to jewel a lot. Um. Can we talk about protect Philippe? Am I saying it correctly? I always have to google how to pronounce it roughly roughly that, yes, I say. I asked Chris how to pronounce it right before we started. A lot of people say, Paddock, I don't know that you need to say that. We interviewed the chairman, the president, who is really the boss.

He's family company Terry Stern, who is like a really lovely, jovial guy who have known for years. It's hard to get interviews with him because everybody in the watch world wants to talk to him. And last year they discontinued the Nautilus, which was their signature watch, which everybody like was trying to get now the second the secondhand market prices are insane um, and he discontinued it because he didn't want his whole company to be about this one

particular watch. UM. And so I went in with Andy Hoffman, who's our Geneva based industry order who's so great, and we were like, I wonder if he'll tell us about like a new watch, like what are his new plans? Oh gosh, And we sat down with him and he told us like everything, it's amazing, that's amazing. We've got this new watch company did yeah, And we have such a lovely conversation. He told us about this new watch.

They are going to come out with a new watch, their first new watch in twenty years, more than twenty years, and um, you know, of course now the watch world is like drooling over it. And he talked about how he's handing a company off to his two sons. Love that part, yeah, who he didn't want a force to join a potech but he you know, was like, you guys don't have to do this. And he said the minute we told them they don't have to do this.

When they were in high school, their grades got better because they were stressed out, and then now they're twenty one and twenty two and they decided they want to do it. Um. He also talked about how he buys watches back on the secondary market, like if he sees a watch that just came out on like a retail resale site, he'll buy the watch back, look at the number on it, figure out who sold the watch, like which of his stores sold the watch, and call them up and be like, you sold this to a flipper?

What are you doing? That? I thought too was also fascinating, that very terrifying. I mean, it's giving House of Gucci like that stressing me outside the employees. But what's so interesting me too on this just because I'm not in like the wealth market for these brands. I know of Patech Philip from Succession because it's the watch that Tom buys logan like the richest Man on Earth and says it's incredibly good. At telling time, We're going to do

a massive feature on Matt. I know. I'm really sorry she relates to the world to the Succession. No, it's great, but well, but it relates to one of the questions you asked him that like they don't experience macro headwinds like at all, not at all? Yeah, yeah, which is it's not just because it's such a strong company with

a strong audience. They're very smart. Like Black they didn't overexpand in China over the past decade, which meant that when China crackdown on gift giving, which was a huge thing that really hit the whole industry, they were not royaled by it, where a lot of other companies like really got stuck. All right, unfortunate ly me only have about thirty forty seconds left here? Where do you want

to wrap up with? Oh? My favorite watches were the Tutor Black Bay fifty four, which is a smaller size watch, so cute and I'm kind of affordable. Yeah yeah hundreds um and vast Constantine sorry world on that Vastron Constantine has an overseas moon phase retrograde date, which is just which means it counts to time sort of in an arc and then the hand flips back. Um. And it's so cool looking and I think anybody who wants to like impress everybody around them they should get that. Maddie,

which watch do you want? I want anything? Cardier Cardia had some really good stuff. And I have to say there's a great little at the end um of a chronometer which is on the clock that people a mechanical cloth that keep people keep on boats to help with them. I'm a sailor and I didn't even know how to pronounce that. Only one company really makes them anymore. Yeah, well, because you know you have all these electronic example is

the company, but the electronics sometimes go out. We're just gonna say, I love this, so glad you got to do this, and we're so glad we got to share this with you. Um, Chris, thank you so much. You're listening to the bloomberth This Week podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app band You two. You can also listen live to our flagship New York station, Just Say Alexa,

Play Bloomberg, E Love and thirty. Well. Check out this company's website and they are making a promise to their customers. It's all about making gear for good out dear gear clothes that are in their words, as ethically and sustainably as possible, and then paying it all back. It's an idea that we know we talk about increasingly matters to shoppers at society at large. So let's get into it on the company, on the mission and the outlook. Joining

us is Grace Sunset. She is Chief People an Impact Officer at Cotapaxi, and she joins us here in our Bloomberg Interactive Broker studio. Full disclosure. We meet at a dinner or again at a dinner earlier this year, and I'm like, you gotta come on, you gotta come on. How are you. I'm doing well, It's so great to see you. It's so great tell us about the company. And as I said before we got on air, you know, one of our colleagues, it was like, oh my god,

I can't believe you're having them on. I love their tell us about Cotapaxi. Codeapaxi is an outdoor gear company that makes the majority of its products out of remnant, recycled and responsibly sourced material. So we start with that. But the most fascinating thing about Cotapaxi that draws people into the brand is that one percent of our product sales goes to the Cotapaxi Foundation that sole mission is

to eradicate poverty in our lifetimes. So we're really broadening that definition of human sustainability to include people in society and ways that are new for the outdoor industry and certainly new for the fashion industry at large. Your supply chain, and you talk about sustainable because before we got going again, like the fashion industry not good on the environment. Yeah, how resilient is that supply chain? And talk to us

a little bit about it and how it all works. Yeah, you know you're supplying from definitely, so we are supplying from you know, global markets, like many retailers are. The way in which we make the products out of this remnant, recycled, repurpose material means it's less resource intensive, it's less water intensive, it results ideally and less waste because of the quality of the product that we're bringing to market. And we're

very transparent. In fact, less than one percent of our net revenue is attributed to the carbon impact that we have in our brand. So we measure it, we're transparent about it, we own it, and we have a phenomenal product design team that's always looking at new and better ways of making great products out of remnant material. I love that so much, and I feel like when I've spoken with other CEOs. They always talk about the importance of partnerships in achieving those goals. And I know you

partner with the IRC other big organizations. How critical has that been to your success in achieving your goals? It's been huge. How we define sustainability, we think about it as human sustainability to meet the needs of the present without compromising the ability of future generations to meet their own needs. It's a much broader remit than just thinking about the environment or climate change or global warming. It involves people. And so when we think about our impact parts,

we look at outcomes. We look at the organizations that are really driving outcomes, whether it's in access to water, clean water, if it's fighting malaria which is only grown with increased temperatures and spreads of diseases and impoverished communities. We look at education of young girls, so things that we know that are proven to result in outcomes of alleviating poverty and getting people on a better track grace.

How easy or hard is this to do? Because you know, I think, and I can't remember if you and I talked about this a little bit, but I always do feel like love companies like this, and I do think consumers increasingly want to shop and buy from companies like this as a company in terms of thinking about okay, but you gotta make money too, right, You got to keep the business going. So how easy or hard is it to have this mission and do good and then also make it a profitable company? Right? So it is

hard because there are trade offs. There would be easier ways of doing things. What's the biggest tradeoff? Well, I think the biggest tradeoff is probably being more intentional about that product, supply chain running, how we're making the product, and we could probably have shortcuts or other ways of

doing things right, we would rather do it right. But I think one of the biggest trends that's happening around ESG that's fascinating to me at least is the rise of the public benefit corporation, where the best interest of the corporation historically has been thought as maximizing shareholder value, but public benefit corporations allow for this broader discussion on

stakeholders and they include society and environment. So we have a board, we have a management team that we are a public benefit corporation COTAPAXI is a public benefit corporation and we have the legal structure that actually enables us to behave this way, and oftentimes you see ESG put in a corner, put in a department. Maybe it's a part of marketing or a part of the brand, and

it's not integrated in the business model. And that's what I think is so exciting watching that people keep talking, Well, that's right, and that's what I think is so exciting about CODAPAXI. It plays a role in our recruiting and our retention, getting people on board to be a part

of something that's truly bigger than ourselves. I was going to ask about it exactly that, because I've also heard from different employers that talent retention and climate goals are directly linked because young talent they just won't sign on for a job where that's not part of the business mission. Are you hearing that from the folks that you hire as well? Oh? Absolutely, And I think, to be honest, I think that's what draws a lot of talent to

the outdoors industry in general. We have a pretty good reputation for being leaders in that area. But what's unique about Coda Paxie is it's creating through its color and it's optimism and its joy a much more inclusive approach to this as well, and attracting underrepresented communities to kind of join us and have the outdoors be a greater part of their life. That's not always the case, because right sometimes the outdoor industry can be right, a little

exclusive data verse communities, Right yeah, Right. You see someone that doesn't look like the three of us here, you know, scaling a mountain or doing something heroic, and you say to yourself, well, I can't be a part of that. So Coda Paxie's brand mission and brand goal is to allow for adventure to be anywhere in all different types of forms, and that we can do good everywhere together.

All right, So you know we're bloomberg. So I'm going to ask you, I, what's kind of the conversations you guys are having about the current kind of consumer environment, economic environment, market environment. You know, internally we talk a lot about, you know, how can we preserve our growth? I mean, CODEAPAXI was very lucky last year. We grew nearly one hundred percent year over a year in our top line. There's something that we're doing that's working, and

so we want to double down on that. We want to be true to our core values and be mindful and sensitive about dynamics that are you know, out of our control. You know, we air fraighted you know, some product and we didn't like doing it last year. We're going to be doing it less of this year, and I'm looking at opportunities across our supply chain to have that impact that's true to our mission and our vision. And it is global, you say, right, and your your

supply chain, Yes, we work. We work with suppliers all over the world in designing our product, and we empower our workers that are affiliated with our brand, with our in our supply base to make you know, even better design decisions around our products. The Delda bag, which is known for its bright colors and its remnant material, is often designed by the workers at the site. We power them to come up with the designs and the way

that things should look. So we have a smaller supply base, kind of a concentrated group of suppliers that we work very very closely with. We'll work with them on insetting projects we've done, you know, organic gardens in different sorts of projects to improve the quality of life, living wages and working with fair trade USA to certify some of

our suppliers to uphold their standards as well. And I guess what I want was curious about that in this line of questioning, is is it getting easier meaning that there's more, you know, entities out there around the world that do have a sustainable mission or thinking about their impact on the environment and impact on people. Are there more out there that give you more choices? Is that growing?

I'm going to be optimistic and say we're moving in that direction, and I think in the ALGI industry it's still tough. But in this industry, you're seeing a lot of great brands come together to try to grow the pie and work together to create solutions, which I'm really optimistic about. And that's where COTAPAXI plays. I think that's that's so cool and I feel I also wanted to talk to you about like inflation and consumer demand, but we're a little low on time to get into all

of it. With this inflation is still a problem for you guys real quickly. Oh for I mean for sure, And I think that we look at pricing and we look at what's reasonable to charge for a jacket or a pack. We've always been you know, really thoughtful about how we managed the P and L, how we manage cash.

We've been profitable for years, which is sort of less heard of in a high high growth consumer business, and we've been super you know, kind of sensitive to passing along any increases that we're having to our fans and our consumers as well. So much fun. Come back soon, Thank you all, well, thank you for so good Grace Sundset she's Chief People an impact officer at COE to PAXI,

joining us here in our interactive broker studio. You're listening in watching Bloomberg Business Week, and this is Bloomberg Radio. This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you can get your podcast. Listen live each weekday starting at two pm Eastern pond, Bloomberg dot Com, Piheart Radio app, tune In, and the Bloomberg Business app. You can also watch us live on Bloomberg Quicktake every weekday on YouTube and always on the Bloomberg terminal