This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
So you might recall a Bloomberg BusinessWeek cover store Is a while ago, and it talked about how everything is private equity now, from pet stores and doctors practices, to real estate loans, to businesses, to startups and more. Private equity has trillions of dollars in assets under management and has made billionaires out of many of its founders. And according to our next two guests, private equity is wrecking America.
Pull Uzer Prize winning journalist and senior financial reporter for NBC News, Gretchen Morgenson and Josh Rosner, financial service policy analyst, maaging director of Graham Fisher. They co wrote you might recall the New York Times bestseller Reckless Endangerment, which was about the Great Financial Crisis. Their new book is entitled These Are the Plunderers, How Private Equity runs and America. Guys, thank you so much, so great to have you here.
Josh.
When you mentioned the book, We're like, you got to come on, you got to come on. Private equity not a new thing. It's been around for a long time. Leveraging in deals not a new thing. So why are you guys writing about private equity? Why put the book out now?
You know? I think that what we're learning now about private equity, we have enough longitudinal data, right, we have decades of data about what happens when companies are taken over by these actors who pile the debt on them, and we are now getting data, for example, on you know, how many more deaths there are in nursing homes that
are owned by private equity. So it's really a lot about the data, but it's also a lot about what happened in COVID when we really started to see this really huge gulf between rich and poor, and we really wanted to look into why.
And that's what I wonder, like, if COVID didn't happen, might you not be doing this or might the impact on private equity and healthcare specifically, might this not have come to be? Well?
I mean I think that it would have in any case, because really, what you've seen as a trajectory in the changes in private equity. The targets, right, and they're running out of targets, and so they are more and more targeting.
Industries that used to be viewed as socially important social goods not expected to run for profits because there's not a target rich environment anymore, and so healthcare education have become increasingly the focus and the target, and that would naturally have led to worse outcomes in industries COVID or not that are socially important.
I have to say, though, plunderers it's a pretty strong word, right, and I just like kind of let me throw it up in Google definitions. Someone who steals or removes things, especially in a violent or severe way, to rob of goods by force. A loaded word, A strong word. Why why that word?
Well, I mean, when you're going into a company and the focus is to get yourself paid out as quickly as possible, regardless of the impact on the employees, the pensions, the communities in which you exist, the broader economy, I'm not sure that that's an unfair or particularly harsh word.
And that seems to.
Be where the industry has moved, or many parts of the industry have moved. When you start looking deal by deal.
Greg, Well, you also have this, to Josh's point, this big circle of pain.
Right.
You've got a very few people making an awful lot of money. This is a billionaire minting machine private equity, right, and yet you have all of these other people who are on the other side of the table. And what we really wanted to do was to try to shine the light on the people who are on the other side of the table.
Can you give me an example for my mom listening to this. We know about the nursing home impact. That seems to be a popular one, but is there one that you think will be most surprising to readers of the book?
Well, I think healthcare affects so many people that healthcare is always going to resonate.
We have a.
Doctor in the book who was fired. He worked in an emergency department in a hospital in the Midwest, and.
He was fired because he was.
Trying to get the hospital to change the code blue practices that they had. It was really impacting patients, it was really going to have problems, cause problems. He was fired by his staffing company, which was owned by private equity, because he was making too much noise trying to protect the patients. So that is I think a great example. There are some other ones in the yeah, I mean, I think on.
Top of that, even more broadly than healthcare, another major example is the purchase of one of the last of the Rust Belt businesses, a large aluminum company, rolling company, which was the largest employer in the county of one
of the poorest counties in the country. Private equity comes in leverages up an already struggling business, forces the governor to get involved to get them electric utility rate reduction, while they're taking money out the back door, and within a matter of six months they've taken all their money out, and within three or four years they end up bankrupting the company, laying off more than two thousand employees, almost all of the employees, and there goes thirty percent of
the school's tax base, right, And so this is hollowing out America.
No, and I hear what you're saying. I gotta say, we've been talking about this book in the newsroom a lot, because I think it's been an interesting time where we're seeing a few banks get into trouble and you know, we're wondering about, you know, with shadow banking, the term itself feels like it's it's shady, but having other sources of funding out there, especially if you think about middle market companies who can always tap into the JP Morgan's or the big banks that are out there, that it
has provided, you know, a necessary you know, funding avenue if you will. So I wonder you know how you think about that, Gretchen.
Well right to that point. I had an email today from a guy who said, I just heard your interview on another station, and he said this happened to me, and he wrote chapter and verse about how his small ash company was taken over by private equity. He said, my founders got rich. I got a little bit richer, but they savaged the company and left me as roadkill.
And so this is just the.
Kind of thing that has happened so often across America. I think we're going to be hearing a lot of stories as people read this book.
It's all.
So to your point though, also, Carol, I think that you also have to think about there are proper ways to do it. We're not condemning private equity, period We're condemning private equity the way it's largely done with huge amounts of debt foisted on the company with special dividends out to the equity holders quickly, with a short term return focus rather than a partnership, longer term focus, which
is what it should be. Right, If the purpose of capitalism is to aggregate and allocate capital through the system for productive purposes, this isn't that.
But then shouldn't regulation be part of that conversation?
I think that's very fair. I think I think that's part of what we're hoping comes out of this, is that there's a recognition that there needs to be more oversight. There needs to be fewer waivers on transactions being able to occur. There needs to be some constraints on if you're taking over the company, you need to actually retain an equity interest and not special dividend and leave the carcass for someone else to clean up.
But there are some you know, go ahead, gretcha.
The other thing is that we really do need to know how pervasive private equity is in this country. You know, does everyone know that forty percent of the emergency departments are run by private equity firms? No, It's very hard to find that information out, and so consumers can't make the right decisions right if they don't know who owns
these companies. And so I think just even the transparency of knowing who owns the company, who backs the companies, and whether they are building up enough you know, anti competitive type behavior. I think the FDC is starting to look into private equity in that way. I think DOJ is starting to. This is an area that has just been left to grow and grow and grow with very little oversight.
And you get into though, like you know, the gaps that are out there, And I guess I would argue too that there's a lot of reasons why there are the gaps and inequities. We've been talking about it a lot coming off of the pandemic, but whether it's government programs or access to financing or financial literacy, like the gaps that are out there, and I'm just curious how you kind of counter that, well.
But the gaps that are out there matters. Remember we had a period coming out of COVID where we had surprise billing becoming a major issue where people would go into an emergency room, right they'd end up with a bill because the emergency room actually had outsourced parts of its business to affiliates who weren't part of the insurance, so they could then actually boost their fees and so that became part of the problem again.
The bad actor. A bad actor was a spece.
I mean, this is why they take over the emergency departments is to you know, generate higher revenue.
Josh Rosner's with US Managing Director Graham Fisher and Company here in studio and at Gretchen Morgenson, senior financial reporter at NBC News Investigative Unit, their new book, These are the plunderers How private equity runs in rexs America. Somebody on Twitter is saying, please ask them who most of the LPs are in these funds, public pension funds, public pension funds, right.
CalPERS, cal stirs.
Now they are there in private equity because they want the outsize returns. That's correct. Are they getting the outsetce?
They need the outsize returns.
We will all agree with that.
Right, they have obligations that they cannot meet. But now the returns are not They're reverting to the mean to the S and P five hundred much cheaper, you know, less opaque, much more transparent, you know what you own. Plus you don't have the problem with the weird marks, you know, marking to market that private equity can do where you don't really know what the value is.
But the pension funds think that they're getting a better turns.
Absolutely because the private equity people told them they were.
And they're not looking at it necessarily net of expense.
Yeah, right, And that's.
Part of the problem as well. The other piece with the with the whole game is the pension funds really are the enablers here, and you know, it's partially due to it's partially due to the accounting rules that we had an underfunded pension system for a very long time where the pension funds were allowed to make actuary assumptions about what their future obligation was and therefore impute what
the returns needed to be. And so we ended up with most of our pension system wildly underfunded, and so they had to swing more and more aggressively for the fences. They thought this was the solution, and it's become less and less of the solution, to the point where PE is now buying insurance companies as part of the way for them to stuff those future liabilities.
So you guys are great, and you know some of The criticism that has probably already come back is that you know, you looked at certain studies and then you know, maybe didn't take is wide. There's been some other studies that I've been reading that you know that actually private equities holding their investments for longer. So what do you say to some of the things that are I know, you're just starting your media tour that are coming at you.
You know, it's funny that you bring up academic studies because there are so many academic studies times that are funded by private equity. You really have to look hard to see and the authors sometimes don't tell you about the conflicts, and so you look and you see, oh, look, this author has an affiliation with a private equity firm. When I was helping do the reporting with Josh on this, I went to the American Investment Council and I said, please give me studies that you would like us to
look at on the benefits of private equity. Also asked them for best deals. You know, we really want to hear that side of the story. And you know, unfortunately they just gave me a lot of studies that had private equity, you know, sort of affiliation. Next and I said to them, I'm sorry, I'm just not going to do that. Really need to have unbiased resources here. The other thing we had was we did have interaction with Blackstone.
Blackstone said that they have created two hundred thousand their portfolio companies have created two hundred thousand new jobs, and that they don't go bankrupt as often as the generic sort of academic research shows, and so therefore that our research was incorrect. And I said, well, that's fantastic. I really want to report that. I really love to see the data, and no, no data. Respectfully decline, Well, I'm curious, did you talk to all of who in terms of looking at this universe?
Do you throw all of private equity in this bucket?
Yes?
No, again again I think that look, private equity is a is a big field with a lot.
Of players, correct, and private equity for really not just private appa.
That's correct, and so we're really just talking about the more traditional leveraged players, the.
People who used to call themselves leveraged by it.
Exactly right, exactly, That's what we're talking about. Is that business model should have died a long time ago with the end of greed is good, and.
It didn't Okay, so three minutes left, let's solve the problem. But I'm curious if if you buy into what you're saying, and where does it end, like what happens then you say it's going to wreck America? Well you would, says already.
I think it already has in many ways.
I think it's what's the extreme?
Well, I mean, I think the extreme, as we were saying, is most of these firms that we're talking about have also bought insurance companies more recently less and so the next level is you're essentially taking over retirement plans, putting those into annuities, stuffing those retirement accounts with riskier deals, and you're essentially begging for a future crisis not only for retirees, but for the insurance industry and for the public in that And I think that may well be
the terminus that we should be looking forward to.
And this is in part why we started with the executive life situation, because it is really almost full circle.
So what what should be done?
We need more transparency, we need more antitrust activities. We just need more scrutiny on what these folks are doing, who they're impacting and affecting the pension funds really need to rethink whether they want to be in this business and actually, you know, promote it and give it the oxygen that it needs.
Josh, you spent a lot of time up on Capitol Hill during the Great Financial Crisis, So what's you know, the will or interest in doing something more? And you know, to be fair, a lot of whether it's corporate America, you know, pick your institution or your sector, A lot of people are spending a lot of time in Washington or making sure that they're on the right campaign. So I'm just curious, what's the well.
That was actually one of the one of the original impetuses for this was when Gretchen and I started at what was going on during the COVID crisis with everyone in corporate America going hand and you know, open to Washington, and we started seeing the private equity guys quietly lobbying for handouts. And I'm sorry to call it that, but that's what we're talking about, or bailouts. And I don't think that there's a lot of interest broadly in Washington.
I think what's interesting is you're starting to see people on the progressive side and the very conservative side starting to recognize that this is actually a family a worker.
A retirment interest loophole, right, Like that has bipartisan support, but it hasn't gotten anywhere.
I think this is actually a little different because we're starting to see it talked about as a maintain street issue of jobs retirement rather than let's tax sure, right, And I think that you're starting to see that from the Elizabeth Warrens on the one side, to the JD Vance's rubios and Josh Hawley's on the other side, They're all sort of coming to the same place here, and that usually means the middle is going to start moving as well.
What do you hope that somebody reads this book? What do you hope that they ask themselves or kind of explore.
Well, I hope that they say this is wrong and I want it to change.
Yeah, and I'm curious, like I'm going to do some googling on my various medical practices that I'm a part of your quick glass thought.
Yeah.
No, I mean I think that it would be nice if we all started becoming aware of every company that we interact with daily.
Well, and I think transparency across the board, whether it's private equity or everything, and I think this is what you're seeing with ESG kind of going through a racketing in a big way. Thank you so much for coming in. Really appreciate it. Josh Rosner, Imagining Director, Graham Fisher, Gretchen Morgenson over at NBC News. These are the Plunderers, How private equity runs and wrecks America. This book is new and it's out.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekdays from two to five pm Eastern.
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We'll keeping an eye on shares of Tesla as well, stock down about three and a half percent just off their lows, and they have backtracked nearly twenty five percent since March thirty. First, we continue to see Elon continuing to shape strategy that includes betting the house on low prices and razor thin margin. So this story is today's Bloomberg Big Take. It's also the upcoming new issue of Bloomberg Business Week on newsstands later on this week tomorrow.
In fact, already online at Bloomberg dot com, slash BusinessWeek and on the Bloomberg terminals. So let's get to it. Let's get to Bloomberg News Globals. Are cars are Craig Trudell. He's on the phone in London, Craig, Good to have you here with us. So, yeah, it does feel like every day we come in and there's either another price cut or some kind of price move from Elon. Tell us a little bit about your story in this strategy of mister Musk's.
Yeah, well we'll see if I wake up to it and one overnight it'd be right in the middle as I'm sleeping. So, I mean, this has been a story of just yeah, relentless cutting all year long, and we really started to see hints of it even late last year. Uh, you know, whether there were there were some cuts in in China or some incentive offers in the US.
Uh.
But but in the end, we're we're now to a point where, uh, where it costs almost a third less to buy a model why now than it did just a little over three months ago. And and this is just something that we haven't seen before. Right, It's it's not a model that you know is really uh, you know, low low volume or or has been in this you know market decline. If anything, it's been their strongest model, and it's potentially, I mean, it could end up being
the best selling vehicle in the world this year. Uh And yet it's a case of adding a heck of a lot of capacity very quickly.
Uh.
And and the model itself, you know, going into that process being quite high price, being high volume. Uh and yet with all that capacity coming online and real changes in the sort of supply demand dynamics for the broader industry, you know, all of those things have sort of combined to also, I guess add in a CEO who is sort of prone to making very sort of sudden changes, and boom, you get yourself. You know, these these massive, you know, price cuts in the last few months.
Craig, does it work for the company?
I think that's that's a question that's really difficult to answer because you have, you know, really smart people who come to just radically different conclusions where you know, some some will tell you it's it's desperation, and some will tell you it's just disruption, and you may even actually hear it, you know, hints of that in the in the same answer from the same person. And I allude
there to Jim Parley, the CEO of Ford. He's talked about, you know, just last week, you know, he told reporters look up nineteen thirteen and he was referring, of course to Henry Ford and the Model T and how quickly Henry Ford dropped the price of that car when he sort of had an edge on the rest of the industry and had, you know, innovated with the moving assembly line.
I think, you know, Musk thinks that he's pressing an advantage here, but I also don't think that you've cut your prices that much that quickly from a position of absolute strength. It's clear that he's you know, to some degree, been pushing on a string here.
But I do wonder, you know, is this about forgive me going after the masses more easily, because these these cars have been even the lower and pretty expensive.
Yeah, I mean just last year, I mean you had to pay sixty five thousand dollars plus for a Model why so, yeah, this was not a cheap vehicle. It's now to the point where you can you can get it in the mid forties. And that's you know, something that we haven't seen before where you know that that vehicle was not anywhere close to what the average transaction price was in the US, and now it's slightly below it. And so we've seen that change. It's been about twenty
thousand dollars, you know, change in the differential. Our colleague Tom Randall had a great story on this yesterday. Just he's been very closely following those numbers. So you know, it absolutely is the case that he's unlocking, you know, a greater market. But you know, to what extent is he able to sustain the Model three, which is is you know, older, and then you have a sort of very different story with the Model S and the Model X, which are are very old and really having a hard time.
You know, it's interesting what I thought in your story and you took us back to the Rick Wagner days at General Motors when he was CEO. Do you think it's fair like to share with our audience, you know, that comparison. But I do wonder is it fair to make that comparison, because I would say that it's kind of it feels a little different.
Oh, it's it's definitely different. I do think that the sort of similarity there is, you know, a story of a company that has a heck of a lot of capacity and has to make some difficult decisions when you know it's having trouble getting and for the capacity that it has. I think the comparisons maybe due you know, to your to your point end there. And I think there's a great chart in our story today capturing what's happened to the cash and the debt on Tesla's balance sheet.
We saw, you know, in twenty nineteen and twenty twenty, Tesla raise a ton of money from Wall Street and in the last few years has itself you know, added to its cash balance, you know, from its own operations and in the process it's it's also paid off about you know, ten billion, ten billion dollars worth of debt in the course of three years. And that's why, you know, just recently we saw Moody's raise Tesla to investment great.
So it's a great chart. It's how you want it to be.
Yeah, it's Tesla in a structural state anywhere close to where GM was. Absolutely not. But I do think you know the sort of you know, it's funny, we we sort of thought that Tesla was something different and not like other sort of old line carmakers. But you know, this idea of sort of as we saw in two thousand and one, you know, just sort of resorting to discounting to sort of move the metal. It definitely brings you know, it sounds familiar there.
So why aren't they pouring that money into generating freshness? Which I'm stealing from one of your sources. But Carol and I get a lot of our best ideas, or I do, at least from the makeup room. And what they always talk about is the lack of availability of different colors of Tesla's. I know that sounds silly, but is something like that on Elon Musk's mind.
It's a good question. I mean, I don't think that they've really sort of, you know, talked a whole lot about, you know, significant changes to the product. And of course you always sort of run the risk when you sort of, you know, dangle this sort of next thing that you sort of have the consumer weight for the changes to come.
And we may be seeing that a little bit. I think there's been reports recently that the Model why and the Model three are going to undergo some upgrades fairly soon and so are we seeing some consumers hold back and wait for the pressure models? I think another fair question to raise here is, you know, if you're a consumer, why the heck would you want to buy a Tuessle right now when when the prices are coming down so quickly?
You know, why not wait a little bit more and see if these prices sort of settle down a little bit before you, you know, go out and purchase something that you know, a few weeks later, might you know the price may depreciate another two thousand dollars, we'll go up.
I'm just going to say there's a flip side no elib hey, I just I am curious, Craig, is Tesla going to be like any other carmaker though that like every year there's a new model. It doesn't feel like, you know, Elin just does it so differently. Should we expect as consumers that that's how.
He's going to do it?
Or is it going to be I don't know akin to I mean Apple watches, I mean, or something that come out every few years. I mean, how do we you know, how do we think about that when it comes to Tesla?
I think I I think absolutely that's a that's an observation that you know, he has very much sort of bet on this idea that I don't need to sort of regularly do these redesigns the way the industry has
been doing for a long time. I can make these incremental improvements to my product with software, and to his credit, he's done that in a way that I don't think, you know, the incumbents are still caught up in terms of the over the air update capability that Tesla's have, and it's still an edge that Tesla has over the rest of the industry.
Right.
But that being said, I do think that, you know, the consumer has been sort of trained over the years to expect, you know, this model will at least get you know, a bit of a freshening up, you know, a bit of a nose job on it, something to get me excited.
You know.
They did try to do that with the Model S and X a couple of years back. It just didn't really go over that well.
Craig Trudell, great story, Thanks for hanging up Later there Over in London, Craig is Global Cars are here at Bloomberg News. He is joining us on the phone from London. That story, by the way, in the upcoming new issue of Bloomberg Business Week on newstands tomorrow, already at Bloomberg dot com, slash BusinessWeek and on the Bloomberg Terminal.
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All right, everybody, Well, the Repo Man is back. Where are you laughing?
I'm so sorry that I can't control.
My It's kind of funny.
Well, this whole idea is just really charming. He's back, perhaps a sign of our times. We're talking about the repo Man. Yeah, it was not just a movie. It's actually a real man or woman who's out there repossessing our cars. Let's get into it with Bloomberg News Personal finance reporter Claire Valentine, who tracked him or her down uh and a convention who knew there's actually a convention
out there. The stories of the upcoming new issue of Bloomberg Business Week on newsstands starting tomorrow, already online at Bloomberg dot com slash Business Weekend on the Bloomberg terminal. So let's get to it and more on her reporting. Claire joining us in our Bloomberg Interactive Broker Studio along with the editor of Bloomberg Business Week, Joel Weber and Jill I have to say when Claire I was in the makeup room a while ago and she's like, you know,
even believe what I'm doing. I'm like, repo, what what's going on? So so glad we can talk about this story?
Are we not going to talk about Boys to Men? Because the Boys to Men?
Who was?
Is that a movie?
I mean, it's a certain movie. I don't know if it's going to be this one. But somebody got to the end of the road. All right, Okay the connection so you get yeah, you get that, there's that road there. Yeah, the producers all over that one.
Okay.
So this immediate with the moment Claire started talking about that story about the return of the reap a man, I was like, oh man, you had me at the But the repost story is a really significant one. The car is so central to the American economy, and when people start to lose that car, I think it has some bigger implications for the US economy, But I do want to start with this convention because lo and behold, there's a convention for everything, and of course there's one
for REPO men. What goes down at the REPO convention?
Claire, Well, as soon as I heard that this existed, I told my boss I have got to go to this and just see what it's all about. And it did not disappoint. It was a two day convention in Orlando, Florida.
So I went.
Down on an airplane full of screaming children going to Disney World and college students on their way to spring break, and got this convention. And the first thing that really struck me was how many total trucks they managed to get in this hotel. They had displayed all their tow trucks. There was all these vendors, all this technology on the
best way to repot cars. And it really got real when one convention attendant looked at me and said, yeah, everyone in this room has been shot at at least once. You are these individuals?
Is it largely men?
A lot of men? But it's you know, it really is all small business. And I'm really glad I went because in doing stories about the repoeman in the consumer it was nice to put actual faces to this. And what really struck me was that, you know, there is this narrative of the evil repo man, and I'm sure it's true in some cases, but no one here is getting super rich off repoing cars. He's a very down to earth, regular Americans that just happened to make their money taking cars from people.
Okay, so how is that business trending? And by business I mean repos? Right, this is not something that you know, we've really seen for a while, right is it? How is it back? And how big is it?
Yeah?
So during the pandemic, repos largely dried up. There was stimulus, checks, a lot of leniency from lenders on paying auto loans. Now things are kind of starting to turn, and I think this convention really marks almost the start of what we're going to see as a surge in repossessions. The estimates are that they were about one point two million in twenty twenty two. It's up from last year, but still down from about one point seven million and twenty nineteen.
So these are really picking up, and I think the convention as a whole was this great window into the economy.
Right now, do they play any jokes on each other at a convention like this?
The jokes that I saw, Let's see who's there. The highlight was definitely the Repo demo. There's some jokes thrown around there. With the Repo demo was all of the convention attendees filed out to the parking lot where I thought this was very poetic. It was a giant tow truck that was repossessing a Toyota Hybrid. So it was like this very liberal car that they were like repossessing,
and they everyone was crying around. The tow truck was getting hooked up to take this car away, and they were demonstrating all the best techniques and how you know what the repo agent technique towing techniques. Yeah, that's what I meant. That was the best one. Well, the thing that stood out to me the most is that they really emphasized that when your back is turned to the situation behind you, that's the most vulnerable because you're at risk of violence because you have to.
Do it right, as somebody who's repossessing, right, you have to physically do it so like.
You're not and it can get really dicey. That was another big takeaway. I had no idea how dangerous this industry was.
There's the other side of this. You talk to people who have had their vehicles repossessed, and I'm curious what came out of those conversations.
A lot of people really struggling right now to afford their car loans. We saw car prices skyrocket during the pandemic, a lot of supply chain issues. A lot of people in America just have to have a car. There's no way to get around if you're don't live in a city with good public transportation. So people are taking out loans with insane interest rates, I mean nineteen twenty percent, and their car payments are just so high. There's not enough money to go around, especially with inflation.
You talk about Sarah Fader in your story, and she's the one right who's got a nineteen percent interest loan from American Credit Acceptance.
Yes. I went up to New Haven and met Sarah, met her family, saw the car, really talked with her about her situation, and it really hits home just what a lot of people are dealing with right now. Rent had gone up, or groceries were so expensive, she's got two teenagers and with a high car payment, there's just.
A tough spot.
And lenders are excited about making these loans, even if they're letting out that money to people who they know can't necessarily afford it.
Right.
Yeah, it's a whole way. They package up these auto loans into bonds. In some cases, investors would still get their money back with interest if even three quarters of barers to falls it on the loans. So it's of course, you know, moves to Wall Street where they're eager to package these up and sell them and make money off of them.
Okay, So with the people that you talked to, see your car gets repossessed and you know you've lost out in that vehicle, where does the story go from there? What do they have to do to get it back, to get back to work, to get all that stuff that not only has impacts for them but also the economy as a whole.
Ring.
Yeah, and in many cases it's not just the back payments that they have to make that they haven't paid so far. It's additional fees for repossession and for towing. And then there's the hit to their credit score which is going to affect them in the future. I talked with a couple of people who'd had their cars repossessed that essentially just had to count it as a loss. They didn't have the money to get the car back, so they were going to have to just move on
with their lives in any way they can. But it definitely you know, when people suddenly don't have a car, they can't get to work, maybe they lose their job, and it's just this whole spiral cycle.
So you know, what I'm also curious about is the individuals who are the REPO man or woman. Do they think about this, like in terms of that there are people and you know, with problems and financial problems. I just wonder, is it a job or is it a lot more than that.
I think that's a great question, and it is. You know, I don't think they're ignorant of that, but I do think what came away from me from the conference was very much I think there's this attitude that REPO men are misunderstood, and it was a bit.
Of a.
That's another new movie or talking about, but go ahead, go ahead, that the REPO men were sort of like, we're the good guys and we're just doing our job.
No one understands how hard or how dangerous that is. And I think, you know, it's it's easy to point your finger out at the villain in these situations. I do think the truth is more nuanced. You also have in some cases predatory lenders that are giving out loans was kind of high interest rates. So it's a whole system that contributes to this kind of crisis.
Okay, I'm curious about the Python. Can we talk about the Python?
Yes, the Python.
The Python.
It's a pretty impressive truck. I'm not gonna lie.
It must just like make this room get really excited, a room full of REPO people.
I wish I had seen them get these toe trucks into the conference room because it's it was a very nice conference center. I mean this was like palm trees. I mean it's Florida. It was Florida. It was very nice. And then all of a sudden you look around and there's five toe trucks sitting around. It's I mean, they were huge, and what I love the most is that to sort of demonstrate how they work, they had this little toy car that they were towing that was just like the size of a kid's little tricycle.
It's showing how you hook it up, so they have a sense of humor.
There's a certain extent.
Eighty eight thousand dollars though, what well.
And these are small businesses, you know, I found them to be really interesting, Like it's it's not like it's some big company. It's like you're out there on your own repossessing vehicles. Was that true for everyone in the room? Were they all small businesses or how many of them work for somebody else?
I mean, I would say most of them were small businesses. I mean you look around at the clientele, and these are not you know, millionaires, businessmen in suits. These are very you know, blue collar kind of workers. And I'd say maybe they have, you know, a place with at most to thirty employees, but there are really giant firms doing this. Well.
It makes me wonder, Claire, like, on a personal level, was it ever hard for you to walk up to people and just say like, hey, can you give me your life story?
Were you like nervous at all?
I was only because I'm pretty sure I was the only journalist there. I'm sure I am one of the only women, one of the only women. These people are not huge journalism fans, so got a lot of that, got a lot of people coming up to me and being like, oh, hey, I heard you're the journalist.
Yeah, so me.
Honestly, I went to a men's rights conference for Bloomberg a few years ago.
It sounds very similar.
You're like, hey, yeah, sorry.
It was Did you talk to the journalist?
Yeah? I do think. You know, there are pros and cons to being a young woman in this industry, and you know, lots of cons as you and I know, but one of the pros is that kind of non threatening.
Yeah.
I think if I'd been a big guy coming in there talking to the reputman, it may have been a little different. So it was a very unique situation.
Report and why is that I've been in does make me wonder who do these people work for? You know, like and like how do they get their next job?
Oh?
This is fascinating. I had no idea the technology behind all of this. There were so many firms that were advertising their databases. So in some cases these small businesses sign up to have access to databases with all this license plate data that's all proprietary, right, And it was fascinating to me. I mean these are all this is public sector, this is or private sector. This is not government data.
So somebody's feeding it into these these apps if you will, or.
Whatever, base like readers that compile all of this and then REPO agents can access it to then track down your car.
AI that's work.
What do they make?
How can they afford that?
Idiot? That's a dullar? What is it called?
Python?
Yeah?
What I want to see is what the python get repossessed?
They'll circle right, Yeah, definitely, yeah. I you know, in terms of profit margins on these, I don't have an incredible idea. I do think they have had a tough.
Couple of years.
Yeah, because the numbers went down, right like the pandemic there was you know, we the chart and the story sort of says it all. It's like it's back because you know, there was a lull and so and speaking to everyone there, though, do they think that this these numbers are going to keep going up?
I think so, yeah. I mean that's I think it's the fact that they drop so much really has contributed to this sort of you know, our industry is in crisis and risk kind of mentality. And now what I saw at the conference was a lot of people getting more excited or getting more like, our industry is on the upswing now we are.
Bad news is good news.
Bad news is good news. Yeah.
Yeah.
I also thought it was interesting that, you know, one of the things we talk about with I feel like everybody who comes on is like the tight labor market, and they're dealing with that too, just quickly they are.
Yeah, they're having a lot of trouble hiring workers, especially because many of their repo agents from pre pandemic went to other industries.
Right right, Exactly did they try to recruit you? I'm just curious.
I quite have the profile to Prussia.
Unbelievable, really funny. You took us to a place that I think nobody has really seen. Clear Valentine. She's personal finance reporter at Bloomberg News here in studio with us a long retil Weber, the editor of Bloomberg Business Week, and of course, the story, as we mentioned, coming up in the new issue of Bloomberg Business Week, out on newstands tomorrow, already online at Bloomberg dot com, slash BusinessWeek, and also on the Bloomberg terminal.
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Right now, we want to get to some of the trends that are going on in the workforce. We're kind of counting down not only to a FED meeting, but our next read when it comes to the late market and with us is Emma cod of Deloitte. She's a global inclusion leader and they did a survey that looked at they do an annual report on women, specifically it's up today and what they found. One of the findings one out of five women surveyed have left their employer
in the past twelve months. That's a pretty big statistic. So let's get to it and get some understanding of who they talk to and more on the findings. Emma joins us here in our Bloomberg Interactive Broker studio. Great to have you here. I do feel like this is very indicative of our times post pandemic.
Welcome, thank you, great to be here.
Nice to have you here. So tell us a little bit about who you surveyed specific So.
We surveyed five thousand women in the workplace across ten countries, really try and get a good global outlook, so you know, European countries, it's sort of over to Asia, Latin America. It's really a good represent sample and the affect few women in work in roles, in jobs. Eighty eight percent
to them were in full time employment. And that's actually interesting when we come on to the well working findings because I would say some of those would rather be in part time employment, but given some of the issues
that we've identified, they're not. They're working full time. And the aim for this research, as you said, this our third year, is really to understand it's less about policies, less about processes, to understand women's real experiences and actually to come you know, what is the secret source come up with recommendations that businesses can use because we're not making enough progress.
So what was the main thing then for businesses?
In terms of a takeaway, I would say, look, there are a couple of main takeaways things that really actually concern me. Last year we saw very high numbers around burnout, around exclusion during hybrid working around non inclusive behaviors. And I do think that was partly a sign of the times. We're in this weird sort of coming back to work slowly, and we were you know what we've been through the
last couple of years. This year, those numbers have come down, but I want to really emphasize they're not good, that they're still poor. So specific you look at mental health, mental health, more women are feeling very stressed. You know, you asked them, are you feeling more stressed than you were a year ago? Yet around half of them are always on. There are more women who are saying I feel the need to always be on. So that's a
big hangover from pandemic times. It's worse than last year, but fewer women feel comfortable talking about mental health at work.
Emma, hang on for a second, Like, how would you say this compares to pre pandemic. I was pretty frazzled pre pandemic.
I was pretty fuzzle pre pandemic too.
So is it because I'm trying to get an understanding of, like, you know, pandemic, which was lousy and so many people had very difficult situations. But I'm just wondering, you know, I have to say my first few months. I love being home from me and my family. It made us all stop for a moment.
Yeah.
So I'm just wondering, like, how do you think about it that way? You've been doing this survey since the period.
Yes, and we did a pulse during the pandemic and the pretty bad findings well from that, So how does it compare to pre look? Mental health has always been an issue. You know, we have our physical health, we have our mental health. It's just talked about more and I think the workplace, I think how it compares is the workplace has started to talk about it more because of the pandemic. But you know, the mental health and mental ill health has existed long before that, always on
has existed long before that. I think we got into habits during the pandemic that I don't think they're going away. And I think hybrid working is something that's new. You know, we didn't some of us hybrid worked, just we didn't call it hybrid working. Hybrid working is a new way of working that. You know, it's still some challenges there for women. So you know non inclusive behaviors. Forty four percent of women have experienced non inclusive behaviors in a workplace context in the last year.
How would does that mean?
So that effectively means microaggressions or harassment. So of the respondents, nearly twoy five hundred women said I experienced it on at least one occasion a behavior that was you know, it was a microaggression or harassment. So you know, and was that proper the case? Yes, I mean, you know, workplace culture has long been a challenge, and it was a challenge pre pandemic.
Yeah.
We had a story the other week on the terminal from Pew Research data showing that US women now make as much or more than men in half of marriages. But I think that's really interesting to square that with some of the findings that you have on women still feeling the need to deprioritize their careers. Can you talk about the dichotomy there?
Yeah, and this is interesting because the survey has been going three years, but this is the first time we wanted to find out about responsibilities in the home and about prioritization and who is the primary income source. And the findings were they surprising on the share of household responsibilities? Sadly not, they weren't. So we had you know, just under half women saying I have primary responsibility that only ten percent of women said their partner did. So that's
the first thing. And don't forget most of these women are working full time as well. And then when we looked at income source, majority of women were not the primary income source. Majority of them prioritized their partner's career over their own. Now, the interesting thing there is that was still one in five for women who are the high earner. So we had Yeah, so you know two
and five, we're not one in five, we're not. So there is this challenge, and to me, it's like this sort of vicious circle almost because if you're deprioritizing your career, then your chances are becoming the primary earner in the household are reduced.
Well, okay, so just get about forty five seconds left here. So what do you do with this? Because I feel like we spend years and years like we pull data. It's very useful. I think it gives us a great snapschat of what's going on, but so many times it doesn't get put into action.
So what do we do with it? We need to know that we do not need to fix women. We need to fix the workplace. Okay, that's the first. What we do with it this report, What I love about it is it's data driven. It shows the impact and it shows the positive impact five percent in work for companies that are getting it right. So any employers out there, you can look and see what is the secret source for those companies. It's around culture, it's around process, it's
around support, it's around removing barriers. That is what we.
Needs to do.
If we take this seriously, which we need to, then we can make a difference.
And when it's a tight labor for us, which it still is, you know, workers are going to move to where they think they're going to have all of these things that they that they're looking for. And as you're senior, your service. Absolutely all right, Emma, Safe travels home.
Thank you very much.
Nice to have you here. Emma Cage's global inclusion leader at Deloitt. Here in our Bloomberg Interactive Brokers studio.
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Well, Alexis o'hanian. He co founded Read It. He's a serial entrepreneur. He's got a VC firm, the seven seven six Fund. He's got a foundation with a similar name. He's also all in on sports, co founder and leading investor at the Angel City Football Club, the women's soccer team based in La We had a long ranging conversation earlier today, but sports that's where we began, you tweeted, I think just a few days. I love sports. Have you always loved sports always?
I did not always love women's sports, though, to be clear, I'm not. I jumped on this bandwagon really when I met my wife. That was the first time I even ever watched tennis as a sport. Yeah, but then really went whole hog in twenty nineteen, so I'm new to it.
Well, talk to us about Angel City in terms of how it came on your radar. I mean, there's a lot of well known actresses Mia Ham's involved. There's a lot of incredible women behind it. What was it, I don't know the conversations you had with him that said I want to be a part of this.
Well, so back in twenty nineteen and I dug up these old tweets. It was March. I was just, you know, reading the news the US women's national team was fighting for pay equity, and I started looking at the numbers and I realized women's sports, and chiefly soccer, was being
so so undervalued. And again I only just come of this as a businessman, as an investor, and you know, seeing the amount of attention that team was able to capture, seeing the number of follows their biggest stars had on social media, right, this is these are facts over feelings. This is just the democratic nature of social media, which says you are someone I want to pay attention to, I will click follow. Showed that these women were incredibly popular.
They were individually capable of generating you know, millions of dollars in brand deals. And yet the league, the NWSL, was still kind of a mess. I didn't even know it existed. I think a lot of sports fans didn't. It was showing its matches on life Time Lifetime. No offense to Lifetime, but come on, you're not watching sports on Lifetime. And at the time a team had sold for like three million dollars and it was the same
team that Megan Rappino played on. And you don't have think the smartest guy in the room to realize Megan Rapino can generate at least a few million dollars a year in brand deals, and really she is worth at least that much and soon money her entire team is only worth three millions. Someone was epically messing up, and so I started tweeting, and I just said, I was like, look, this is a huge opportunity. I want to buy a team. Who do I talk to? I want to start a team?
Who do I talk to? And you know, Twitter showed up in a big way. The diehard women's soccer fans were like, all right, you know, don't just talk about it, be about it. And then there were also trolls who were like, you're going to waste all your money. This is stupid. No one cares what women's sports. So I started talking to existing owners. I realized pretty quickly I didn't want to inherit someone else's team. I needed a
blank slate. And because I was so proactively honestly tweeting about it, one of the owners of La FC, the men's club in la introduced me to Kara Julian Knatt created Who at the end of I think twenty nineteen were out to market and couldn't find anyone who wanted to invest, and so I said, well, look I'm doing this and getting connected to them. You know, they shared a similar vision.
And you know I wrote the check off and running.
That's yeah, it was.
It was kismet and I think tweeting, I mean seriously, and it's it's this.
Show is like it can work. It's like incredible and connecting people.
Yes, And look, I'm also the kind of person who likes being early and right. So I love calling my shots on Twitter because I love having those receipts later when everyone's like history, right, Yeah, bring the receipts baby.
Well okay, god, I feel like there's a million places I could go. Well does that show?
Do you?
Okay, I'm going to take a sidebar here, go for it. So social media Twitter, TikTok. There's a lot of things that are on you know, everybody's radar about usefulness, the problems that are created, you know, elin and Twitter is a whole other story. What's your take on social media? Has it run its course?
Uh?
We? And I love a lot one. Wow.
Yes, Okay, Look, it has transformed the world. There have been good outcomes, there have been bad outcomes, right, I very publicly left read it in protest a few years ago, and I was thrilled. They didn't response. You know, they did finally ban hate communities, They did replace me with a black directory. They made changes as a result of my resignation that I was so happy with at the
end of the day. But I realized, for me, I think social media is very much going to occupy a space that our children's generation will look back on with a raised eyebrow. I mean, that's a big part of the reason I left. I got a she was three at the time. Now she's five and a half, a daughter who I think is going to grow up with a very different experience on social media. And so I think part of that is cultural. You're seeing a generation
of young people and their parents who are like yo. Actually, maybe this was pretty terrible for you know, going through adolescents where everyone has a little like button and follower account floating above their heads, right, you know, adolescents measure of value. It's hard enough to go through that time, and then you now productize and weaponize it probably not great long term. So I think you can already see culture shifting, right, you can already see this generation looking
to other platforms. I'm not an investor, but you know the ascent in companies like be Real that are more about not living on your phone chasing hearts, but just sharing with people you actually care about, like what's going on in your life. I think you're gonna see that cultural shift, and you're gonna see more technology. So I social media's not going anywhere, but it will evolve in the way that we use it for sure.
I'm curious how your daughter and your wife influence you in terms of you know, equity, easy equality women. Your daughter is an investor.
Yes, I made sure I was the.
Owner of a professional sports team.
That's right.
I set aside a few bucks to personally invest. I mean it was via her trust. She doesn't know this, by the way, so hopefully she's not listening to the podcast listen. I mean she has five and ass not to her.
But yeah, it was important, right.
I wanted her not just to be the youngest center in pro sports, which is kind of cool. Yeah, but you know, like any parent, you want to create, you want to give your children something and a legacy, and frankly also I wanted to give her what she was doing.
So it was because of Olympia that really galvanized this in many ways because during the final the Women's World Cup that year, we were all watching at the home we were staying in Wimbledon, and I'd gotten Olympia and Alex Morgan jersey and She's running around kicking her ball, and I'd commented to my wife, like any proud dad, wouldn't it be nice one day if she played on the Ones national team? Wouldn't that be cool?
With that missing a beat?
Serena says, not until they pay her what she's worth, and I said, okay, challenge accept it, like all right, And so so you know this, this little three year old was part of the reason why I finally was like, no, I really this needs to happen. And so the least I could do is give her her due. And so yeah, look, I'm very aware of the fact that I am a now wealthy, but a white dude who occupies space his entire life very differently than my wife has and my
daughter will, and so it has given me perspective. But I want to stress it is nothing about the moves I make or the things I do are.
Charitable.
What do you mean?
What are you thinking because you're an investor?
What I mean is none of this is none of this is because of charity. This is what I believe is going to lead to the most effective outcome long term.
One of the I really believe, and this is something I talk about with my team all the time at seven seven six and with CEOs that I counsel now is I really believe the long term greedy mindset is just a very different way of thinking about building businesses, being more intentional about everything from the way you build teams to the way you deploy capital to the partners
that you decide to have. And I actually, like, I worry the one thing I don't want people to hear is like, oh, well, this dude has you know, a black wife, a black daughter, and now he cares about these things, right, Because I don't think you should need to have those things in order to care. You shouldn't need to have a to care about women's sports.
But if you didn't, do you think, oh, you'd have gotten to this point.
Probably a lot slower, if at all. So no, I can't.
So yes, it absolutely played a huge role in helping build my perspective in the same way. You know, it's a kind of education. You know, I didn't go to Harvard Business School, clearly, but my you know, I had a different kind of very formative education that's come from being in a relationship and then a marriage to someone like my wife, and having the lived experience of a daughter.
But some would say much richer and much more real in terms of understand.
I think so oh one hundred percent. So I think so yes, I can't deny how formative it's been. But I just want to stress that it's not Do not take away from this that that has to be the reason why it's exciting. Women's sports is not exciting just because a bunch of dudes have daughters and now feel like,
oh we got to support this. No, like women's sports is exciting because it is a massive business opportunity that men and women, even dudes who don't have daughters, are going to be excited to pay attention to.
Since I have you, I'm going to get in trouble find' actually if your question, sorry, well we did touch the media. I know you talked about this with our TV cogs. Yeah, artificial intelligence. You knew I was going to ask.
Sorry, Sure, that's fine, I'm using it everything.
What's more interesting right now? Well, okay, so what has better investment opportunities AI?
But interestingly enough, if we assume let's go down, let's I just think in ten year terms a gift and a curse. But so ten years down the road, AI continues to ascend. Like you can now spin up anything. I mean, it's the ability to generate let's say, content is trivial. Right, we could sit here, you could have you could say you want a birthday song sung by Beyonce naming you and your favorite puppy, and like you can customize everything and mention like I don't know pizza because you love pizza.
Is that valuable?
I think so?
And so you need to figure out the you need to figure out the dollars so that artists get paid and all that stuff's going to get sort of But okay, imagine content is everywhere and anyone can create all the
content they want. It actually now comes full circle back to why having a decentralized global ledger is so important because with a blockchain, you can now prove the prominence and authenticity of the original, the day one content, and so weirdly, I think in the long term the proliferation of a actually makes a strong case for the blockchain because blockchain.
But what about crypto. You've invested in crypto, how do you feel about that at this point after the carnage of the last Sunerson.
So I see he did coinbase in twenty twelve. I have been through every winter, and every winter I put on my parka and I go talk to people building and they build. And it's actually the best time to be investing in crypto because well, every cycle, the winter is the best time to be doing my job. Yeah, because when you're early, you know, this is when the noise is gone. This is when the builders are building things people actually want. They're not worrying about what the
eath price is today. They're just building. They're shipping soft investing, yes, absolutely.
And AI are you investing?
Yes? And so in another two three years will come out of this criptocycle, it'll probably be I think gaming will be a big thrust of It'll be very consumer facing as well as infrastructure, and it's not going to use any of those words You're never gonna hear about NFTs, nor should You're never gonna hear about crypt It's just gonna be dope software that happens to be on chain, all right.
That, of course, was Alexis o'hani and co founder of Reddit, founder of a VC firm, the seven seven six Fund. He's also got a foundation, the seven seven six Foundation, that to fight inequity, most recently giving about twenty million to young people of the next decade. It's all about working on climate. And then he's into sports. Co founder and leading investor at Angel City Football Club. Eva Longoria is invested in it. Jennifer Garner, I'm leaving out Natalie Portmant.
I mean, there's a lot of people who are involved in it, but interesting.
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It's well, thanks, Tell may be gain For the over one hundred million obese and overweight individuals in the United States. There is a story in the new issue of Bloomberg Business Week. It's out on newstands, online at Bloomberg dot com, slash BusinessWeek, and on the Bloomberg terminal. And many of these individuals would love to lose a bunch of weight to improve their health situation, and you know what, there's a bunch of drugs out there that can do that.
The big problem though, is the cost and having to use the drug for the rest of your life. All right, let's get into it with our Bloomberg News healthcare reporting team who wrote the story of Emma Court and Bob Langreth. They are both here in our Interactive broker studio. So excited to have both of you with us. Emma, why don't you kick it off with us and tell us about this class of drugs which they were mentioned at the Oscars. Comedians talk about them. I think Elon Musk
has talked about them. Tell us what we're talking about.
Yeah, well, first of all, thank you so much for having us on. Really excited about the story. It's the cover story this week, so we're thrilled. These new drugs are called effectively glp ones. They're named after a hormone they mimic that essentially helps people feel fuller, they have less appetite, they eat less, and they lose weight. What's interesting about these drugs.
Is they're not all that new.
This class has been around for diet beds for many years, but more recently pharma companies have been developing them specifically for obesity.
There's a couple of different names for them.
People are very familiar by now with ozembic, which is a diabetes drug. That's the one that Jimmy Kimmel joked about at the oscars.
But there are also drugs.
Called Everybody laughed or whether it was like deadpan, because it was like.
Go ahead.
Well.
There are a number of perhaps less well known drugs, including a new one called Munjaro that hasn't been formally approved for obesity, but likely will in the next year. There's also a drug called Wagovi, which was the first sort of highly effective obesity drug approved in the US.
And what's really.
Interesting about them is, you know, these are drugs that are helping people lose up to fifty pounds in some cases, so they're way more effective than anything that had been available for weight loss before. And it's getting a lot of doctors and patients excited about it.
So Bob, come in here, because we've all, i think, heard in our lifetimes about a variety of different diet pills and ways to lose weight. Certainly as a woman growing up in the nineties heard about plenty of them. How is ozembag wee goob, how is it different? And what are the risks and the some of the benefits imotography.
Yeah, one of the really interesting things for me as I've been covering drug industry for decades and you know, a b city weight loss that was kind of always like a graveyard for drugs. Dragonnacity had been trying for a long time to come up with drugs. There was the kind of there were a whole bunch of safety V calls. One of the most famous ones are infamous ones was fen Fenn back in the late nineties, where
one of the components caused heart problems. So BC drugs for a long time and a bad reputation, and these ones, you know, sort of came a little bit almost out of left field. As Ema said, they were developed for diabetes, and drug companies increasingly started, you know, noting noticing the weight loss effects they were seeing. And as I started testing the drugs in people that didn't have dietabetes. There that were suffered from obesity but didn't have diabetes. They
started seeing even larger amounts of weight loss. So the safety track record and diabetes is pretty good. Like all drugs are not without risks, you know, but they do have a number of side effects, including nausea, in vomiting, and diarrhea potentially, So do have a bunch of gi side effects and you actually have to tightrate them up slowly.
These are injectable drugs. It's not a simple pill. You have to inject them, most of them weekly. Most of yeah, the new ones are weekly.
And what's happened is as they've gotten to sort of more potent, long acting ones, they've seen the anti obesity effect increase, and that's when they've started to get some of these dramatic weight loss. And the Eli Lemanjaro drug, which is like the newest one, it's only approved for diabetes, but Eli Lily is very soon going to seek approval for obesity. That's the one that's showing some of the most dramatic weight loss effects so far. And they just had another positive study out today.
Why is it so expensive it's the billion dollar me. I feel like we asked this so often about drugs, and I know we do, but why is it especially it's been around for a while, right, I'm just curious, why is it so expensive?
So some of these drugs are newer, and they are the most expensive ones, so they are new.
They can't say they've been around for many years.
You know.
It's a difficult question, and we certainly asked the companies about it, and we didn't get a super straight answer on it.
I would say, I'm curious what Bob thinks about those.
Well, I've been asking drug companies about their pricing forever, trug forever. You know, that is one question when you ask, it's very very difficult to get. Like my senses, they don't really tell you the real answer, like what happened in the back room when they decided.
I have a brother who was in pharmacuticals for ever twenty years and he was always like, listen, we do so much R and D, And I'm like, did I ever come on? You also make a ton of money on stuff.
So but basically in the US, you know, it's a free market drug companies and price they are drugs at kind of whatever price they want. And these when they came on the market as diabetes drugs, they were priced, you know, fairly high.
And they and some of the pricing.
There's one that will Govi drug, which is a higher dose version of zempic that Nova Nordis sells her obesity they priced at an even higher price than ozempic. It's exact different doses of the exact same you know, chemical compound, but one is a higher price, the obesity one is a higher price.
Second interesting aspect of this is like when you look at the sheer number of people who would be eligible for these drugs in the US, it's more than one hundred million.
People, right, So it's like it's massive.
Why are the prices so high given that the market opportunity is huge? And we actually talked to one of the sort of foundational scientists in this field. His name is Dan Drucker, and he was one of the guys who helped discover these hormones in the body many many years ago, and he said, you know, he's asked companies over the years, why don't you just do, you know, be the McDonald's in the space, which is kind of
an ironic comparison if you think about it. But you know, why don't you come out with really cheaper versions of these drugs and lots of people take them and you'll still make a bunch of money.
And you're talking about one in three that's our population.
Of adults in the US have obesity.
Yeah, So what's interesting too, And I feel like there's a bigger, broader conversation when it comes to healthcare, right, I mean being overweight we saw it in COVID like that could make you more susceptible to not having a great outcome. I mean, being overweight for most people causes all these other problems. We know, it's a big reason why there's so much diabetes. Where is the medical community,
where's the insurance community? I'm thinking about if we can get people to be not so overweight that it's just better for their health, come, their their healthcare, their outcomes, and also their health care costs.
Well.
One really important and interesting aspect of this is we often blame weight for a lot of things in our society. And it's interesting to look at this idea of BMI and realize it's kind of imprecise. Right, it was supposed to be kind of a population level measure, and instead it's been applied to individuals. So if someone has a certain weight, regardless of what their health looks like in other aspects, they are obese just because of their BMI, right.
If you think about that, it's kind of an interesting aspect, Like you could be totally healthy, have no diabetes, have no high cholesterol, whatever, and you're still ill by some of these kind of modern standards. So it is kind of a nuanced, complicated topic. While higher weights have been really highly associated with lots of different diseases, it's important to note that there are a lot of shades of gray here. Another interesting aspect of this is like does.
That mean not as many people would really kind of be eligible for these Well that's.
The kind of million, right, So if you think about it, maybe not everyone who qualifies as overweight or obese is necessarily going to be the best candidate for these drugs. There's a big, kind of murky middle of people who where it's not totally clear how big a danger than they are we impose it.
This is a really important question here, So like the risks of you know, suffering from obesity, uh, you know, as opposed to someone's normal way. A lot of that comes from epidemiological studies. You know, what's not been proven over the long terms. If you take the weight off with one of these drugs, you know, do you eliminate all these like actual like risks like the risk of heart disease and strokes and other like concrete you know,
snple downsides. They haven't actually proven that in trials right now. It's not necessarily the case that you know, you'll get all that benefit because these are epidemiology studies and your you know, you're comparing risk factors, and there might be other things that are different, you know, when they when they do these complicated comparisons.
So the companies.
That that's what I'm sure say, that's what they say.
This is not proven. There's only really proven to take off a lot of weight.
You haven't proven that it prevents a heart attack or a stroke five years from now, and you.
Have to take it forever, seemingly to prevent the heart disease.
So the that's what the pharma companies are saying. That's what the doctors are saying. There have been studies of this new drug, wigov that show when people quit the drug after a year the way comes back for most people. So that is a big issue. Such an expensive drug like this is possibly a lifelong thing, and it does raise questions about, well, what is the side effect profile here?
We're not talking about taking something for a few months or years.
Forever potentially does does insurance tend to cover it? If you are at that BMI? Then what's what's the spread?
It's all over the place right now. We do a lot of reporting this. It's all over the place right now. And you know, whether you have access to one of these drugs may kind of just depend on the luck of the drawer and what your particular insurance company you have to you end up at. But like basically three quarters of state we surveyed all fifty states state medicaid programs, three quarters the states have very little coverage for obesity drugs, and you're roughly approx give or take a few three
quarters of private insurance generally don't cover obesity drugs either. Now, the coverage we've found signs that the coverage is starting to increase. For example, in Medicaid, eight different states told us they're considering it. But this is like, this is like the big battle that's going to be going on the next year between the drug companies and the doctors that favor more coverage and insurance companies.
That's like, that's like the big battle.
It was amazing to see how much coverage ranged in this fifty state survey of Medicaid plans, which Medicaid covers low income folks for health insurance. I mean, there was one state that literally told us we will pay for you know, some obesity drugs for people under the age of twenty one, for young people, but not adults.
We're like, what, like, there's so much that, I mean, what would make it much more clear? I just got about thirty seconds. Is it some study that needs to be like, what is it? That would be like health insurance would be like, yeah, we got to be in on this or not.
The big studies, the most important studies that are coming is that both Eli Lilly and Nova noordis, but they're the two makers. They're studying their drugs in people with a BC to show they can prevent heart attacks and strokes. And you know, if they do that, if those studies succeed, it's going to be much much harder for insurance to deny coverage.
Yeah, and that's going to be a big, big thing that's going to come in the next couple of months. Heart disease is the leading killer of Americans, So this is something with really high stakes.
All right, great story, guys. It is the cover of Bloomberg Business Week. As we said, it is out on newsstands. It's already on the Bloomberg terminal and online at Bloomberg dot com slash BusinessWeek. Emma Court and Bob Langreth, both healthcare reporters here at Bloomberg News, joining us here in our interactive broker story. Be sure to check it out. It's also going to be in our weekend show on Bloomberg Radio. This is Bloomberg BusinessWeek.
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 eleven thirty.
Well, you know, the new issue Bloomberg Business Week. It is out, so too. Then is another pursuit section. And got to say it's a great mix of gems, tequila and backpack stay with us. We'll explain in just a moment.
I mean, what more could you need?
Right, We've got women leading the.
Charge to the gems and the tequila in the backpack.
Yes, exactly, it's perfect.
It's perfect.
We've got a woman leading the charge in the booming business of tequila, a set of stylish backpacks they could take your purson's place. And an interview with the CEO of Tiffany as the luxury jeweler debuts its newly renovated flagship store in Midtown Manhattan.
All right, let's get to it with Chris rounds Or. He's the editor Pursuits. He joins us. Now with a look at the section, take us to Tiffany. I mean, I've been walking under this scaffolding for three years.
Three years. The scaffolding is down. Finally.
All right, you were at the ribbon cutting, weren't you?
I was, Yes.
So Tiffany has been renovating their flagship store, which they now call the Landmark on Fifth Avenue and fifty seventh Street, for three years now, and they during that period of time, Tiffany was acquired by LVMH, and so the LVMH people kind of tore up the plans for what was happening, and they redid it, and they brought in Peter Marino, which which is an art who's an architect and designer who they use on a lot of their other stores,
and it's he's a very like chic European sensibility. Sometimes the stores are quite dark and romantic. But you walk into the Tiffany store, So I went in yesterday and it's just bright and huge, and I mean obviously full of jewels, but you walk into the main floor and it's got these big windows on the side that are actually digital screens showing scenes of New York City. It feels a little like an Apple store in that main floor, like it's it's got that color and with all the screens.
But then you explore the floor the store and there's ten stories, including a new box that they built on the top, a glass box they called the Diamond on the top, and it's just every floor is different. There's incredible contemporary art. They've spent hundreds of millions of dollars on this renovation and it just feels cool.
I have to say. The old store, although my heart is breaking a little bit because it was so iconic, but field story, like you could get off at the floor be like wait because they all did kind of look alike, even though okay, this was where the wedding stuff was or the silver or leg right, but so every floor is kind of different now.
Yeah.
So Angelina, who is our Paris based luxury reporter who covers ALMH, is in New York this week and she and I interviewed the CEO of Tiffany, Anthony Ladru, and he said, Yeah, on the old in the old store, you didn't know what floor you were on, so people didn't spend a lot of time there, and people didn't know, like didn't know how to explore it. And this now
it's like brightly colored. There's every floor is different. There's VIP areas, there's like a you know, an area that has like dishware and you know, silverware and all that stuff, and there's like bags and accessories. It just feels like there's a lot to explore.
You mentioned that it feels a little bit European. Do you feel like they are embracing what New York luxury is or do they not care to have to embrace New York luxury.
It's definitely a very new York Institution, and it feels that way, and there's New York sort of elements in the design in addition to the scenes on the screens. When you get a like you can see Central Park from the top, there's a big there's a big apple on one of the balconies, New York, you know. And there's a Blue Box Cafe restaurant, which is you know, a run by Danielle Blude, who is of course who is French, but who is really a New York chef.
And so it does feel New Yorky, but it has an extra layer of like sort of richness, like money in all the contemporary art that's there. There's more than one hundred million dollars with the contemporary art there, which that is that feels like added to the New York stuff. But to me, it did feel New Yorky.
You know What's interesting too, though it does sound like they want to go even more high end. I mean, they've always had expensive stuff, but they've also had like I talk about their silver and I say that with much love, but it's been much more accessible, you know, to folks. But it sounds like they're trying to go to the moon.
They are and all the luxury brands have learned this over the past few years. Like the air, the parts of their business that are growing are the very high end parts and the low end parts, the lower price point parts which are much beloved to me, Like the silver for example. Yeah, that's dropping off a bit, and it's still very much there when you go to the store.
It's everywhere, but they have lowered the number of skews so like product lines that they have in the silver range, because people are spending less on the silver and they've raised they've sort of making more very high and stuff. And they're making a few new watches, the CEO told us coming in the next year, and they're trying to bring their watch business, which actually they had some entry level watches. The new watches are like one hundred thousand
dollars five hundred thousand dollars. They're trying to bring them up to the level of like the high jewelry, which is for a very small number of people.
Do we know how much the renovation costs?
We asked, and they said that it was the most expensive store renovation that they've ever done. And so some some of the other stores that data's out there it's in the hundreds of millions. We asked if it got to a billion, and they said no, so somewhere in the nine.
Well are they going to make their money back? I mean, what's their expectations? You talked to the head, you know, in terms of sales at this place.
Yeah.
So it used to Tiffany Store, which by the way, was like one of the top five landmarks to visit in New York City before it was being renovated. Account before the renovation accounted for ten percent of total global Tiffany sales, which is a huge amount to have riding on one store. There was a temporary store next door during the renovation in the old Nike Sound that made about two hundred million dollars a year, and Bernard Arnaut, who owns LVMH earlier this year, said he expects to
double that in the news space. So that's sort of aiming at four hundred million dollars a year at some point.
And they're looking to take this right and expand elsewhere, right, and create more Tiffany locations, if you will, around the world.
Yeah, they're pretty global. They're already in China and Japan, you know, create all the places that you need to be Are there to do some of them. Yeah, they're redoing some of the places. They're building a couple of new places, maybe in Milan, maybe in Paris. And they're also taking some of the design cues from the store in New York and putting them in other places, like the way that the displays are. But they do want the New York store to be special.
They're not messing around with the little blue boxes, are they.
No.
You go into the cafe and it's the blue Box Cafe, as I said, and there's just like hundreds of blue boxes hanging from the ceiling. And also all the contemporary art in the store, or most of it is blue. It's like tiffany blue, like a basqueyacht, a Daniel Arsham. It's very like all of a piece.
Should we ask about the one piece of art?
Oh, well you can. We can't talk about it, Oh we can, Okay, we not. In our reporting we had people had asked us if Bernard Arnaut was the buyer of a Marilyn Monroe Andy Warhol painting from nineteen sixty four called shot Sage Blue Marylynd which Larry Goes in the art Dealer, who is friendly with our no bought last year at auction for one hundred and ninety five
million dollars. Now that is the most expensive sale at auction for any American artist and the second most expensive art sale of all time, behind the Leonardo da Vinci salvead Armundi. And it once painting was bought, it went away and no one knew where it went, and so people were playing it. Did Steve Cohen get it? Did
Bernard or No get it? And then when we started seeing the art that was in the Tiffany store, which is all Tiffany blue, and this Maryland Maryland is an almost Tiffany blue amazing, we had to ask and the CEO said, oh, no comment, So we'll see.
Wait for that unveiling. Just got a few minutes left here. Backpacks and tequila. There's the cover stories tequila just quickly. It's about women really calling the tequila shots.
But I'm bumm, yeah, we had to do shots pun so in you know, there's tequila has a bunch of rules in Mexico. It can only come from certain places and mescal as well. And it was it's a long running industry and for a long time it was very male dominated, and then when corporations started coming in and buying up a lot of these these businesses, it became
more male dominated rather than less. And so there's a bunch of leaders in the community who are starting their own like her company, the tequila companies, met or taking over family Mescal company, leading these businesses. And Eva Longoria from the US is an investor in one of the sort of female led ones. So it's a cool time, all.
Right, And just real quickly, backpacks that we may want and an oyster we may not want.
Yes, according to Crater, there's you got to read the review Kate's review the Kelly Oyster.
In Lovemon, which is actually loves so much.
I know it was nine pounds for an oyster, which is a lot.
And it doesn't even look like an oyster. So Kate, I feel your pain.
I feel your pain.
You got to read through her article. And backpacks. I have to say, I love backpacks.
It's very much a trend among women in New York and everywhere is functional, stylish backpacks.
Yeah, and this way you don't have to have a bag. You don't have to have a bag to carry your stuff in a little bag. To like kind of look like pulled together.
And you always make me spend money.
Chris like about to go by my mission packs really good stuff and fun to go through it all with you. That, of course, is the editor of Bloomberg Pursuits, Chris Rouser. Chris, thank you.
As always, you're listening to the Bloomberg Business Week Punks. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live to our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.
Well. The Milkin Institute Annual Global Conference gets underway next week, bringing together leaders in finance, business wellness, and more, a variety of minds working to tackle the most urgent and really to realize the most exciting opportunities that are out there.
Yeah, and the event gives our Bloomberg teams a chance to dig deep, especially into the day's big financial and market concerns and the bigger trends of our time. So Carol, you're going to be there along with Bloomberg TV's Romain Bostik, and Romaine joins us now for a preview of what we might expect romain very exciting.
What are you saying?
Well, what I'm expecting this is I think this is actually going to be a big one, right because we talk about where we are in the economy right now, this inflection point, and where we're potentially going. The lineup that you see at this conference, the folks that we're going to have on Bloomberg Television and radio on the panels,
they are the economy. We talk so much about the big, gigantic banks, but we kind of forget there's this layer right underneath that we talk about private credit, private equity that are really financing most of the businesses out there in our commy.
You know, it's kind of interesting because we've got guests on this week on the Weekend Show, Josh Rosner and Gretchen Morgenson who have a new book out, and they basically are saying that private equity is wrecking America.
Yeah, I mean, I think we all have those fears. I mean, we've seen kind of the takeover of so much, but there's also a big question there as to if they weren't there, who would have financed it. We talked so much about kind of shadow banking, and it's always used as this sort of almost an insult, right, it's something dangerous, But you forget that shadow banking exists because there was a void in our economy that the JP Morgans didn't want to take. They felt like it wasn't
worth their while. They wanted to focus on something much higher level. But you still had these middle market businesses that needed funding, and it was private equity, private debt markets that stepped in to actually finance them, and for better or for worse, I don't know, maybe ends up being our doom, but at least for right now, it's kind of keeping us afloat.
I always think about that the flip side, right, that middle market we talk we don't really talk about it a lot, I feel like always at Bloomberg, but it's such an important part of kind of the economic activity that goes on. And you do think about those companies that maybe couldn't access capital and would just not be around anymore. So you do think about the role of private equity.
Well, yeah, and there's a reason for that. I mean, the folks you talk to a milk and these are the people who really kind of have their hands in the ground and the soil, so to speak. You talk about, you know, the heads of Apollo, Mark Rowan, you talk about Ann Walsh over at Guggenheim, You talk about Katie Koch over at TCW. You know all of these big firms Blue oul Aris, Capital, Cressing, Capital, b and Y Melon.
Jane Fraser of Geasure of a City Group.
You know, these are the people that, for better for worse, are effectively kind of managing our economy to a certain extent, or at least a certain pocket of that economy, and you want to know what they're thinking. And one thing too, also I like.
About this is the FED meeting while we're out there.
The FED meeting is actually going to overlap, so we're going to get a lot of commentary on that. But also we talk about all the sort of the money managers, the investors, the bankers who are there. We forget there's a whole cross section of other industries represented, CEOs from other companies. We're gonna actually be interviewing the CEO of Mandali's Camera is a huge chemical company. Uh, We're going to interview a lot of folks in from the VC world.
And there's a lot of talk right now about just the health of the California economy of the big exodus. We've seen of certain businesses and certain residents looking for more favorable business environment. So we're going to talk to a lot of local officials there kind of about the health of the economy.
There, all right, So maybe we'll talk to each other always we might.
And you know there's a big concert too, you know, the big headliner.
Is how do I not know about this?
I'm yeah, you.
Didn't get an invite?
Oh sorry, okay, okay, well you know what we're going to hear? IP section are your VIP.
I got to talk to people you get there. It's all the good stuff you talk to I'll talk to miss ye. Yeah, thanks for that, fuddy.
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