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Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market Moven News.
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Let's get to.
George Ferguson right now, because he is the expert on on aerospace on the airlines.
He's from Bloomberg Intelligence.
Georgie, again, we were just saying it just seems like Boeing just emerge from the doghouse in the last six to twelve months, and here we are yet again. How serious is this issue relative to the last seven three seven max issue?
So, I mean, I think if you're talking about the other challenges they've had with sort of a rear pressure bulkkant problems and vertical stabilizers, I think I put it right along the lines, is a very similar issue, and it's a lack of attention to detail in the manufacturing process, either at Boeing or at their suppliers, especially Spirit Aerosystems. It's been really nagging them and they've got to go.
They've got to get down there at Spirit and they've got to help them knit this in the bud and stabilize production so they can build all those airplanes they're supposed to build this year and continue to recovery.
If you ask me if it's.
How is it similar to the mcast problem where the two airplanes crashed to the Ethiopian and Malaysian airplane airplanes. This doesn't appear right now to be anywhere near as serious. I think this will be a singular anominate when we're all done. But again, a sign of lack of attention to detail in the manufacturing process, which can't go on in aerospace.
Hey, George, give us some size and scope when it comes to which airlines fly this model the most and how many of these planes are worldwide?
Yeah, so, I mean this model is relatively sort of recently entered into service. There's only about two hundred and twenty five flying. The big flyers of them are United as you mentioned earlier, Alaska, and then COPA out of Panama, and then Aeron Mexico has some of them too. There's a bunch of small flyers of them. But Copa is another key Boeing customer, right. Copa is an all Boeing SEVENTHWTY seventh fleet. They do a great job of helping people transit between North and South America.
Via their hub and Vanama.
You don't want to take your most important customers off, and having quality problems doesn't help that.
George.
I'm flying A seven three seven nine hundred from Friday from Newark to Aruba, so I want you to take care of that for me. Please go check on that plane personally, make sure it's all set to go on Friday, because.
I need that plane to leave here Uba exactly.
But George, you can't have quality issues in aerospace industry.
You just can't. It's like a zero tolerance kind of thing.
Exactly.
How is this kind of happening here?
I mean, you know, I mean, I'm just surprised that we're having these these types of issues and with this kind of you know, kind of it happens, seems more than it should.
Yeah, agreed.
I think that it's a function of the setup going into the pandemic and then.
And the US labor market, right.
So, I think we had this MCAS problem with with the max they were grounded around the world. If you were working at Spiritual Systems are boeing, it was pretty depressing times. As you were sort of fixing that problem, we went into a pandemic, you know, air travel went to zero, almost zero, let's call it.
And so I think if.
You were sitting there at spirit Aerosystems working in airplanes, you thought this might not be a career.
That's a long term career.
So I think they've had a lot of Turnament and Bowings had the same and both companies said, look, we've got to cut cross. We may need to send some senior talent home, you know, give them buyout packages whatever. So I think both of these companies have seen a lot of turnover in employees, and when you have that, you have to train the new ones and it just takes a while, right, And so I think both of them need to look at their training programs and their
safety programs and dig deeper on that. I feel like, you know, this wasn't something that happened to Airbus, because the Airbus didn't go into the pandemic with a problem with their primary you know, aircraft, the eight three twenty.
They're big people.
Mover, and I think Airbus probably did a better job of managing supply chain and the European industry managing supply chain challenges during the pandemic, and.
I think that's why we're here.
And the US labor market has been really strong, so you go on finding on the job pretty easy.
So going has to get all over this spirit us too.
George, it's John Tucker. Quick question for you. Will you explain what the door plug is? The fuselage comes with the ability to put in a door if the configuration requires it. How does that work?
Yes, I mean some of the larger versions of the seven thirty seven. Some of the customers can really pack them out right. So I think a similar airplane Ryanair will get two hundred some people in there. See, you need a certain number of exits per number of people in the airplane. So if you're maxing it out like Ryan Air, you have it. You have an exit door there. If you're not maxing it out like Alaska, you know the exit door and you put a panel there.
You don't want to lose any of the space of the exit door.
And the panel of what that's just bolted in, hopefully bolted in.
My understanding, has got four bolts and some other connections to keep it attached to the fuselage. So again, as it goes down the line, someone probably st to go out and make sure that that the panel gets inserted correctly. If it's not an airplane that needs that exit door, we think that's probably where the problem was is in attention to detailing.
You look at it, you look at the video from NTSB and whatever. There's no fracturing, there's no tearing whatsoever of the skin of the aircraft.
Agreed the silver Liner. The silver lining to the story is that it does not look like any structural problem. Like you said, it looks like a pretty clean breakaway, and that indicates to us that it was just either the fasteners were faulty, and I think we would have seen that in other airplanes by now. I think the FA will know that shortly as they do with their inspections, or someone didn't fascinate correctly.
How does that end up more broadly affecting other airliners like United, for instance, has the most max nines in service around seventy nine. How does that impact United in particularly as well.
Yeah, so the inspection program, I guess is that all these will have to be inspected, all these airplanes, and so their inspection process is going to take up a little bit longer than these are going to take more airplanes out of service, hopefully not the you know, North to Aruba flights, but we'll see what happens, you know, if they need people to fly as I get them.
There's and so I think another silver lining here is that it is the first quarter traditionally a low time for travel, and so I think it's less impactful for the airlines coming right now.
But it's going to take United some time. So they're going to have to knock down some of the schedule.
Probably while they get wait for these inspections and wait for gudents from the FAA, is what's going to be at all clear for the airplane.
So I know, George, just from reading your research and talking to you, that Boeing and Airbus they can't build planes fast enough. There's so much demand out there these days. So what happens to Boeing's assembly lines today? Are they still going full board or are they standing down here?
What are they doing?
You know?
My guess is that they're probably still building today. My guess is that, you know, like they said, they're very focused in the regulators. They want to see what the regulators have to say. They'd probably look closely.
At this particular station on the line and want to.
Make sure that it's stable. They could even build seven thirty seven eights which don't have this store and wouldn't have any limitations at this point.
So my guess is that their production continues.
We only have about a minute left, but we are approaching earning season. What do you expect as far as particularly how this could impact a Boeing when it does come out with some of its forward looking guidance.
Yeah, I mean again, I think if it's an anomaly, I would think that Following's guidance on how many airplanes they can liver in twenty twenty four would be largely unchanged from this. It seems to me like this could probably be wrapped up in a couple of weeks.
Again, you don't like quality problems, but we could probably wrapped it in a couple of weeks. Of it's anomaly, that's not an anomaly.
That's when you start knocking down production schedules, knocking down expectations for cash flow and profit.
We don't expect that right now, all.
Right, George, thanks so much for joining us. George Ferguson.
He covers all the airspace companies, he covers the airlines as well, so top to bottom, he's got his finger on the pulse what's happening in that global airspace business. And again Boeing shares our down here today as our Spirit Airlines as well as one of the suppliers of the fusel logs.
You're listening to the team. Can's a live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app, and the Bloomberg business app or listen on demand wherever you get your podcasts.
I want to get straight to our next guest, Paul Mark Newton, who is global head of Technical Strategy over at Funstrat Global Advisors, and have to point out he's been very spot on with his call. So if you rewind and think back to the fall of twenty twenty one, this was right before the Nazaq one hundred peaked out, as well as the Russell two thousand, of course a couple months before what happened with the S and P five hundred hitting ultimately its record. That was about two
years ago. But he was already concerned about the trajectory of stocks well before a lot of those geopolitical issues happened at the beginning of that year, and then also had adjusted. He had around a forty seven hundred price target for the S and P five hundred, so pretty close there we're the S and P five hundred finished the year. But Mark, thanks for joining us. It's always great speaking with you. I want to get your thoughts firstly on what's your outlook for equities this year.
Thank you, Jess. Happy New year to everybody, and you know I am very constructive on equities this year, actually, I do believe the S and P will get up to fifty one to seventy five. You know, in general, it should be a lot easier year for Manny in best than last year. And last year was largely you know, tech dominated for most of the year in the broader market largely it took some time for many other sectors to play catch up, and I think we did see
that in the fourth quarter. My view is that this year should allow for a more broad based rally and many of these other sectors like financials and healthcare, you know, and I think the beginning of the year certainly has seen a little bit of a drawdown and some of the former leaders for last year certainly a very big
period of mean reversion. But my bigger call is that I think Bonn yields are going to drop this year, likely down to three and a quarter percent on the tenure, and that markets should have a very good year, and that you know, any sort of recession I think is going to be postponed at least until twenty twenty five.
So Mark, you bring up a good point there.
I mean, when you think about twenty twenty three's performance up until kind of October, it was extraordinarily narrow, and I know, so for folks that think about the health of the market, that's not very healthy because the breath of the market advance wasn't great. They got a little bit better there in the fourth quarter. How do you feel about kind of the breath of that we're seeing in the market these days.
Well, I think the breath recently has been at least over the last couple of months, has gotten almost so good that it merits, you know, thinking that we probably will see some consolidation in the first quarter of this year. You know, I don't think we can just continue to go straight higher. We have nearly ninety percent of all stocks right now above their fifty day moving averages and
about seventy five percent above their two hundred days. So but important to mention that we've seen one of the quickest moves from a very low level of breath the very high level of breadth in a very short period
of time. And for me, that's very encouraging towards thinking that, you know, we're seeing this broader based recovery in risk assets still at a time when a lot of the institutional investors are not as enthusiastic about risk assets by you know, gauged by cash on the sidelines, or just the ongoing wars that we're seeing, and a lot of reasons to be concerned, but in general it's a healthy time. I just think we probably need some backing and filling with.
What you're seeing, especially underlying when you're looking at some small cop caps that have taken off, especially of the past couple of months after getting hit hit hard, not just last year, but over the past couple of years. And then of course bank stocks which had getten hard last spring but had seen obviously a lot of improvement over the past two months. Do you think that still
has legs there? Like what are the technicals telling us when it comes to the small caps and some of those value corners of the market like banks.
Yeah, thanks, I do think that small caps have a window for outperformances here. A lot of that should be predicated on rates pulling back further, which can be helpful to this area. As you know, and most investors know. You know, the small cap sector has been a very
difficult spot over the last decade. You know, it's important that we saw a brief period in twenty twenty when they showed very good outperform, but largely it's been a very big time for large cap growth, and I think that you know, initially, as we see rates start to really accelerate to the downside, that's going to be a time when small caps outperform, which is probably a you know, six to eight month window. This year, we see some
decent outperformance financials. You know, that is sort of a mixed picture, and I'm not bullish on financials for the year. I'm more neutral, but I do think that you know, they can work. You know, we've seen the eel curve get a lot less inverted, and I think you know, through the stress tests we've had over the last decade that you know, the bound sheets are in very good shape, but you know, still tough for a lot of these
regional banks. It's going to take some time. We've seen a very good move off below's I would argue that's probably not the best area for immediate outperformance, but certainly i'd be a big buyer on the backing and filling.
So Mark, the extent of my technical now is the rs I phone.
You know, that's his favorite. I mean Paul's point though, with RSI because I know you have your way of looking at technicals, but a lot of traders it's not just a one day when they're looking at charts. They look at weekly, they look at monthly. I think a lot of people, especially coming into this year, to Paul's point, they kept talking about, hey, these overbought levels, But a lot of times when I'm speaking with technicians, they're viewing
it from other lenses as well. So even though you could see RSI, even though it's not still above seventy at this point, but if you're looking at the S and P or the NAZAG one hundred, you could stay above seventy four a while, and that doesn't necessarily mean it's a bad thing, right, Yeah.
That's a very important comment, and I think it's really key to really measure investors time frame of investment, their risk tolerance, and generally looking you know, you'll hear traders say well, it's oversold, it's overbought, But a lot of
times they're mentioning very very short term time frames. And if you look at the larger periods where equities have peaked or bottom, that's come when you know weekly or monthly RSI have gotten very overbought or oversold, and right now we're sort of in a pocket where momentum has
been very positive. But yet you know, the recent drawdown we've had in recent weeks has actually cause r SI to pull back from those overbolt levels on a daily and actually a weekly basis, so and I'm a little more encouraged, you know, I think for the year, just because I don't view momentum as being all that overbought per RSI. But the divergences are really the most important, you know, way to use technical analysis in my view,
and use momentum. It's not that when things get to overbought you want to sell, uh, it's really when you see repeated stabs at new highs and prices where momentum does not follow and starts to move down, and that can be sometimes a warning sign. And really in both directions price moves lower, you want to watch for weekly or monthly r s I to hold and not make new lows. These divergences are really sort of the bread and butter of how many technical analysts really use you know, r s I.
How about volume? What's the volume been telling? You know in the equity markets and the bond markets recently.
Well, volume certainly is very important. You know, I would view more so on a single stock basis than how
I look at the markets. There's just a lot of ways to measure volume, and particularly all the different you know, we've heard about these record inflows and that would seem to be a very positive thing, but yet markets have been selling off, so volume is probably you know, not as helpful for day to day decisions on for investors when looking at the broader indsees, but certainly you want to see breakouts of stocks happen on good volume and
you know, pullbacks happening on lesser volume. Those can all be very important things to concentrate on.
I know something too, when it comes to volume can be tricky if you're looking at the ARMS index or some people when they follow technicals trend. I know it spiked above three five actually on December twentieth, but that can be a little tricky when you're looking at something like that. Is it more just a day to day thing that it's more useful than maybe.
More fun funding. Yeah, that's a great point because the trend is very useful and we won't need to go into a lot of depth here, but a lot of it's about the advances to decliners divided by the advancing volume minus declining volume. In general, when you have very high volume on the downside, oftentimes that can signal inflection points,
particularly after a lengthy decline. If all of a sudden you see people rushing in to sell and the declining volume is very very heavy, that can be important marking bottoms. But I would argue precisely the opposite is also true. If you have a high trin after an advancing period in stocks, we're a huge rally and then a very high trin on a reversal. For me, that oftentimes is
a warning sign. But statistically, look, whenever you look at these things going out three months, six month and try to measure them, they all say that the market is going to go higher, and that's just the upward trending nature of the market. So it's more for me on a short term basis and just looking at that trin when you see, you know, trin readings being above two point five, that can be very important literally in both directions.
All right, Very good, Mark Newton, thanks so much for journey us really appreciate it. Mark Newton, he's global head of technical strategy, fun Strike Global Advisors, Tom Lee and some guys. Are they get some smart people over there?
Oh yeah, No, they're bringing in a lot of smart talent.
Yeah.
Actually, so again, we don't talk technicals as much as maybe we should have, but a lot for a lot.
Of cover technicals, a lot for the US equities, you do.
That's right, Yeah, exactly, And you're right about them some times over the weekend.
Right, that's funny. And then somehow we talked about them on the radio the next week. Isn't that fun? That works?
You're listening to the tape. Can's are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg.
Just Met and Paul Sweeney live here in on our Bloomberg Interactive Brokers Studio are also streaming live on YouTube. Ahead over to YouTube dot com and search Bloomberg Radio c Suite. Conversation of the Day. We're gonna talk copper. You gotta smelt this thing. I'm not sure, what's smelting we put metal.
I don't know, doctor copper though, what it means for the global economy to gross all the components it goes to, especially companies in S and P five hundred industries that use chip makers not a big one too.
You got to talk about it.
We have the perfect guest here at Roland Herring Joints. This he's the CEO of Arubus g a G. It is a German company Homburg, Germany. There are some ad rs here in the U s A I A G Y for the US A d rs I got a market cap about three point six billion US dollars rolling. Thanks so much for joining us here in our studio. Talk to us about the copper, global copper business. How's it going, how's business, how's the market? What's happening in your world of global copper.
Yeah, it's so. Copper is the metal of the future. It has been the metal of the prospit It's also the metal of the future. If you see, the demand for copper is just has one direction. It's going up because everything which is decarbonization, which is electrification in the end, means it needs more copper for handling. Electricity. So we see in emobility three times more copper in a car than in a conventional car. You see digital you see renewable energies and so on. So copper is really the
perfect metal for the renewable energy sector. And we as a Rubis we are the largest producer of copper in Europe. We produce around one point one million tons of copper cathotes and the major product that we supply is starter stock for the cable industry, and cables are everywhere. What works today without electric cables and electric supply if it's
digitalization or even energy supply. So we have a very positive business environment already today and I'm very bullish about the future, combined also with the circular economy, the recycling part, where we're also leading with our technology. So all good for Rubism.
Well, thinking about the mining industry, particularly because they have highlighted how vulnerable some of the supply can potentially be. Some of that related to some geopolitical issues also different public protests that forced one of the biggest copper minds to actually close briefly in the last month or two because of that. But how does that do you think does that impact the outlook for what that means for the demand globally for copper, is that something that's more idiosyncratic.
There is a lot of copper, and the advantage of copper is there are many many different minds. So even if the big one, if you take this case in Panama, will probably refer to even this mine has just a small percentage of the global supply, so there's not the dependency of the industry and of rubis from one single mind, which means we are diversified also for technical reasons, and hence we have alternatives really easy to switch on and
we can compensate for any shortfalls. And it's quite typical if you look in the copper industry that there are some issues with mines. That's like in large industrial installation, you always have challenges. So therefore, in the projections for the supply and demand for copper concentrates to the smelter industry, there is always a certain disclaimer of minds which have
some disruption, some technical problems, somewever problems. And if this is factored in, you see that the copper concentrate market is balanced. That means what the smelters need is being supplied by the mining industry, so we have enough supply and good quality supply for the way forward.
Talk to us about your base in Hamburg, Germany. Most of your business, it's a global business. But talk just about the investment you're making, have made continue to make here in the US and Georgia.
So the investment in Georgia is a big step for US to bring this technology of a large recycling plant of multi metal recycling materials into the US market. We're doing this in Europe and the investment in Georgia is part of our one point seven billion dollar investment package, and in Georgia alone we're investing about seven hundred and
fifty million euros. We are investing in strengthening our core business, which is multi metal production, recycling and producing multi metals all the industrial metals and precious metals, and also growing. The second pillar is growing in recycling, where this investment in US is the big part of. And the third think is sustainability and decarbonization, so investing in renewable energy, investing in solar powered energy electricity generation, and also improving
our environmental footprint even further. So these are the three pillars, and US is a very important part of our investment package going forward, and it's the first step that we are going here to do in Auguster.
As we talk, so many economists, as you know, came into last year so gloomy about the trajectory of where US economic growth would be as well as globally. But when you look at the direction of copper prices, what do you think this tells us about the global economy and how healthy it is right now?
Yeah, so you think about you mentioned this, doctor Copper, I thank you. There there's a lot of talk now where is the copper price going to be? What we need as a as an industry and as a general as an economy. We need more supply of copper. It has to come from recycling, where we have a major play, but also it has to come from additional mining activities
around the world. There is enough copper in the world, and the question is at which incentive level, at which pricing level investors are going to spend money to build up quite high investment cases for new mining activities. So I don't protect any metal prices going forward. I can't just be wrong. But the demand is there and the demand will grow in the coming years by millions of tons, which means there's a good incentive also for a good rational for higher copper prices going forward, What.
Are the top two or three kind of customers you have for your company? Just give us a sense of who your customers are.
So the major customers that we have are the cable manufacturers. So we are converting the copper that we produce into the starter stock for the cable industry, which is called wire rot It's a standardized eight millimeters copper wire. And companies like the Prismians, like the Koffee Cups, like the Leone's, likelike like, they are our major customers for these materials, and then they make all kinds of cables for all kinds of installations out of.
Those What are you hearing from your customers right now? As far as when it comes to demand.
It's really interesting. We see an increasing demand from our customers. So this electrification, this decombonization, drives our industry, our customers, and hence also us. And we are we have a first quarter or our fiscal year starts in the first of October, so we have a from a demand point, a good quarter behind us, and we have some very good quarters ahead of us. Given the contracts and the discussions that we have customer so our customers, our cable manufacturers. Again,
that's the major part. They are bullish about the demand going forward and they secure capacities for the future.
Do you have business in China? No, No business in China, cause that's a typical for a company.
I know.
One of the reasons people are concerned about the German economy overall is that they do a lot of business with China and the growth just isn't there where where What are some of the other areas of the world that are that you're investing capital right now?
So we are investing in Europe, which is our home turf as we have started there one hundred and fifty six years ago our business in Hamburg. So we investing massively in Europe, which is the major part of our one point seven and then the US. These are the two focus markets, the two focused region we are investing now.
But we're not a choosing why is.
That for Europe in the US versus not China?
Because we have we know first of all, it's markets that we know where we have our base and where we can grow from and we have very stable conditions and also positive outlooks in both regions. That's why we are focused. And you have to put it in perspective. Urubus is not a giant, it's not a big company. We have to put a focus. So to invest one point seven billion in crow for our company is a big step. It's a big commitment and we have to deliver. So we we make this promise and we're going to
live on this promise. And then I don't exclude any other regions at the world at the point in time, but in a moment, we have to focus on the US.
And on Europe, right And is that also part of why China's been tightening its grip on copper. Is that part of the reason why it's just harder to try to invest to your point in that area.
For China, copper is also a very important metal. If you see, they rate copper as one of the indicators of progress, and they have invested strategically and driven by the government over many many years now into the copper production. And China today represents forty five percent of the primary copper of the smelting capacity in the world and they continue to expand. Yet given this high local capacity, China is still an importer of copper of the metal, not
just concentrate off the metal itself. So the economy in China is huge, and also with the major focus on renewable energies and also on electric vehicles, their demand is going to continue to rise. But they will continue also to invest in the industry. So that's that's where where they stand.
Roland, thank you so much for joining us.
Really appreciate it. Roland hiring CEO of Arubis GAG. They are based in Hamburg, Germany, but he's in the States here seeing some investors, and I'm going to go down to Germany where they're investing a lot of money in a plant down there in.
Where's in Germany?
In Hamburg?
Yeah, but where in George? I'm sorry, Augusta, Augusta. There's a golf course. There's a golf course here. There's a golf course there. All right, we appreciate looking at that.
Right now, you're listening to the tape.
Cat's are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
You know, there's some legal stuff coming up here.
Some of these things, their patents don't last very long, and there's some stuff going on out there. So we figured let's chick in with Rania set Home Managing partner set Home Law Growth Ranya talk to us about kind of what are some of the issues with these weight law drugs is in terms of I don't know patents and competition similar drugs out there.
What are you looking at?
Well?
Interestingly enough, Nordisks patent is set to expire in twenty twenty six, and companies don't want to wait until twenty twenty six, and apparently neither do consumers. And one company out of China, Huadong Medical. I apologize if I mispronounced that sued in China and one an invalidated Novo nor Disks patent. However, Nova nor Drisk is upset about this and is currently appealing the decision. So stay tuned to determine when generics will be available to all.
Is there any sort of clear timetable of when that could be?
I couldn't give you a clear timetable. Even in the United States, the courts are clogged and busy and things take a lot of time. I have no idea, but I don't think a year is a long time that much I can say, Okay.
Yeah, buddy, mine's actually talking about the courts being clocked. He's an attorney in New Jersey.
Stuff that has been on his books for like six seven years is now just coming to trial because eiy're backed up from the pandemic and b thorny judges like to have. Judges have been retiring and leaving and they haven't approved anyone to come in, so there's just no judges.
I'm like, you kidding.
I've experienced that, and it's a terrible conversation to have with clients. It's extremely frustrating because we are in the business of providing solutions, or trying to provide solutions, and there is none and we just have to wait and see. Nobody likes to hear that.
Yeah, exactly, all right.
So in some of these weight laws drugs, I mean, these patents seem kind of short here, but I mean, I guess this is gonna be a monstrous market.
It is a big market.
It isn't expected to explode here. So what are the Novo Nordis of the world trying to do here? Because a they're the ones that invested all this money to come up with these drugs. What are they doing to try to protector their position?
I guess, well, obviously, you know, they want you to wait until twenty twenty six before the generics come out. But Astrozenica and other big pharma don't want you to wait and are looking at oral medications and apparently they're in like early stages and we'll see when they are made available. But the most you know, interesting thing that's happening right now, at least in my opinion, are these
compounding pharmacies. So compounding pharmacies are allowed to buy law, change formulas and create new drugs for specific patients or to assist with shortages. And we do have a shortage, apparently it's global. But they're not using approved drugs, so the someaglitude, I think that's how it's pronounced. They're using a non FDA approved version of it. And at least one state, the state of Virginia, is worried that there could be some health risks associated with the ingesting of it.
Is there, I would think the answers yes, But is there a black market for these weight low drugs because the man has got to be just crazy?
Oh for sure. And some of them are on the internet. You can buy them from abroad. Of course you're not quite sure what you're buying, but the bottle or the needle looks like it should.
I wanted to bring up a story that we had on the terminal from Bloombergnese reporters Simone Foxmen and Laura Nemius last week about how ozempics manias billions and bills are coming for taxpayers. So they're writing about how state and local governments across the US are grappling with this growing problem about how not surprisingly expensive drugs to treat diabetes and obesity or threatening to drain their healthcare budgets.
How do you view this, So, what's the issue here here and what could it mean moving forward?
Well, these drugs are very expensive. I know several people who are on it and they're telling me they're spending you know, twelve fourteen hundred and plus per month. So that's a difficult number to sustain in a long term. And these drugs are supposed to be taken in perpetuity, so it's not even for a short period of time. So I think once drugs become generic and they're more widely available and the formulas changed slightly, the costs come
down because there's they're widely available in the marketplace. So I think we're going to be seeing a change in pricing, but not until more of these drugs are available.
Because right now it's I mean, the question is who does pay for it?
I mean, I guess it's.
The point of I guess Simone's reporting is that it's coming back to the States, right Yeah, and.
It's draining their healthcare budgets, is what they were writing about.
Yeah, So I don't I mean, on that side, you could say, boy, it would be good to get to generics as quickly as possible to lower the cost for people, because we know the demand is there.
You know that's true.
But there's a lot of controversy, and again I'm not I don't know what my opinion on this is. I haven't really thoroughly given it some thought. But several people are taking the drug not because of diabetes. This is a diabetic the drug specifically for yes, and there are a lot of drugs like Matt Foreman, for example. It's
used to treat a variety of things. So if this drug was initially made to help with a variety of matters, or it's now been discovered that it helps with a variety of matters, then something, you know, needs to be done to assist with the shortage if nothing else.
Yeah, I mean I saw a story just early on on this is the zepic thing.
This is some something on TV about this one doctor Beverly Hills was writing a lot of prescriptions what goodness, you know, and they were just looking at people walking in and out of his office and they're all the beautiful people, but they were still getting all these scripts.
And you know, it didn't seem to be it's supposed to be for people who were diabetic.
Yeah, diabetic obesity and all these underlying health issues associated with that.
So there's a lot to do from.
The government perspective, from the inflation, I mean, from the insurance perspective, and then also the legal side in terms of you know, the patents and generics and compounding pharmacies, as you mentioned, a lot to develop here for this market.
So we'll stay on top of that.
Of course, Ronnie set Home joins us and we appreciate getting her time managing partner at set.
Home Law Group. So I don't know anybody who's taking these.
I personally do not. Maybe they do, I just maybe they haven't told me that they don't want something like dune it under the radarn.
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