August 8, 2024 • 42 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Madison Muller, Bloomberg Health Reporter, on Eli Lilly earnings and her Big Take: What It’s Like When Ozempic Takes Over an Entire Town. Kevin Near, Bloomberg Intelligence Senior Media Associate Analyst, on Warner-Discovery Earnings/Paramount before earnings. Greg Petro, CEO of First Insight, on the role of social media, its biasness in guiding decision-making for consumers. And we Drive to the Close with Jayson Bronchetti, CIO at Lincoln Financial
Hosts: Carol Massar and Matt Miller. Producer: Paul Brennan and Sebastian Escobar
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. 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
(00:23):
and Tim Stenebeck from Bloomberg Radio.
Speaker 2 (00:27):
So we're going to stay with those GLP one drugs
talk a little bit more because we had Eli Lilly
narrowing the gap with its rival Novo Nordisk and in
the race to dominate the red hot OBCD market as
it expands its supplies of weight loss drugs. Lily lifted
its twenty twenty four revenue outlook for the second time
this year on the strength of its weight loss drug.
Shares of the company soaring in today's session. And it
(00:47):
was just yesterday, Matt. You might recall that Novo was
that one of your decliners?
Speaker 3 (00:52):
Novo, No, I don't think. Yeah, it was two days ago.
Speaker 2 (00:56):
Oh a couple of this. Okay reported disappointing second quarter
sales of go we gov, saying price concessions for companies
that manage prescription drug benefits in the US cut into
its performance. So we did see investors push down chairs.
So let's get to it. There's a lot going on
in the space. Our GLP one guru, can I call you?
That is Bloomberg News Health reporter Madison Waller. She's here
in our Bloomberg Interactive Broker studio. You are the guru.
(01:18):
You're gonna take it to your grade.
Speaker 4 (01:20):
But I feel like you're guru now too. We talk
about it so much.
Speaker 3 (01:24):
You know, semi blue tides by the way, o, zepic
and we go v same thing, right, and is a
higher dose, okay.
Speaker 5 (01:31):
But Monjaro and zep bound, zet bound, same thing, same.
Speaker 2 (01:36):
Thing, Okay, Yeah, it's very nice.
Speaker 5 (01:38):
Well, I'm just one when we get these stats like
zep bound sold one point two billion dollars worth in
the second quarter.
Speaker 3 (01:45):
That does not count Munjarro.
Speaker 6 (01:47):
Right, they're separated out. And it's interesting because Monjarro has
been on the market longer, but zep bound has just
ramped up.
Speaker 5 (01:53):
And it's also interesting because that's the one that people
talk about as the fat drug, and the same is
true with no it's the non fat drug.
Speaker 3 (02:02):
You can't talk about well, whatever you want to call it.
Speaker 5 (02:04):
I also think it's interesting that Eli Lilly calls their
weight loss drug Manjaro, which is like so one of
the Italian says for go eat your dinner right.
Speaker 6 (02:13):
Well, there's actually a story behind the name. What is it,
Mount Kilimanjaro, like smushed together, and so if you look
at the label, you can see there's like two little mountains.
Speaker 2 (02:22):
Oh that's interesting.
Speaker 4 (02:23):
Who knew?
Speaker 1 (02:25):
All right?
Speaker 2 (02:26):
Fun fat, So let's talk the nuts and bolts of
your world Earninge's Lily today upbeat, Novo not so much.
Investors reacted accordingly. How are you thinking about the space
and kind of the reporting that we're seeing.
Speaker 6 (02:36):
Yeah, I mean we've been talking about supply and the
supply shortages for a long time and that sort of
continues to be the story.
Speaker 4 (02:42):
It's what we're seeing again the last two days with
Novo and Lily. I mean, Novo.
Speaker 6 (02:46):
Struggled and missed sales estimates yesterday. Lily sort of smashed
them out of the park today.
Speaker 2 (02:52):
So the business is good, it's just a matter of
if you can keep up.
Speaker 6 (02:55):
Yes, exactly, and Lily like had I mean, both companies
have invested billions into ramping up manufacturing. It just seems
like Lily's issues are starting to ease a little bit
faster than Novo's maybe are.
Speaker 3 (03:08):
Because they have way more money.
Speaker 5 (03:09):
So the idea is you can make as much as
you can sell, right, definitely. And Eli Lilly is an
eight hundred billion dollar company, right, so they have more
resources to boost production. Novo is I don't know, like
a ten billion dollar company, right, I don't even know.
Speaker 3 (03:27):
It's less than ten.
Speaker 4 (03:28):
It's the biggest company in Europe.
Speaker 3 (03:30):
It's worth three point eight billion Danish kroner.
Speaker 2 (03:33):
It's a five hundred and sixty eight billion dollar market
cap company. The eighty rs at trade here, Oh, is.
Speaker 5 (03:38):
That three point eight trillion? In any case, it's worth
less than Lily, and it's done worse than Lily. Over
the past five years. Eli Lilly shares are up six
hundred and forty three percent.
Speaker 4 (03:46):
Yeah, I mean Novo's a small.
Speaker 3 (03:48):
Novo's up sixteen percent.
Speaker 6 (03:50):
Lily's more diversified. They've been at this for I mean,
both companies have been at this for a long time.
But up until the last few years, Novo's bread and
butter was just diabetes like. So Lily has a slew
of other drugs, cancer drugs, autoimmune drugs. They know how
to ramp up you know, production and they know how
to do this and plan for future demand and this
(04:12):
is all relatively new for Novo.
Speaker 4 (04:14):
I mean, this market is crazy.
Speaker 2 (04:17):
We want to get into a story that's on the
Bloomberg that's a killer, But before we do that, about
one and a half years into talking about this classic drugs,
you've been reporting so much, you know, I feel like
every couple of weeks or something, there's like, hey, look
what else these drugs can do? Your view you're thinking,
you're reporting, how does it continue to evolve and how
(04:38):
you think about the future.
Speaker 6 (04:40):
I mean, the thing it was interesting actually today on
Eli Lilly's earnings call, they kind of like slipped this
into the call. It wasn't huge news, but they're no
longer calling their obesity and diabetes business unit just obesity
and diabetes. Now it's like cardio metabolic health, which sort
of signals this bigger thing that we've been talking about
that these drugs, you know, aren't just weight loss drugs.
(05:03):
They have potential indications and are potentially able to help
with a lot of other conditions that are sort of
interrelated with heart disease and kidney disease and liver disease.
And so like, I think that that is going to
be a huge theme going forward, and the fact that
Lily kind of mentioned that on the earnings call today,
I was like, so they're thinking about it this way.
Speaker 3 (05:21):
So I mean, I want, you know, I want.
Speaker 5 (05:23):
I wanted to take this forever, as you both know,
not just because I'm fat, because I only need to
lose like twenty pounds, but I want to have a
healthy heart so I don't die soon. And I'm pretty
sure I'm going to get Alzheimer's disease. This may stop
that as well or slow it down. On the other hand,
there is so much optimism for mRNA as well, and
(05:45):
that didn't cure cancer yet, so maybe it's going to
take a while.
Speaker 6 (05:49):
Yeah, I mean, it's it's different, right. mRNA was amazing
for COVID.
Speaker 3 (05:53):
It just I think was it that great for COVID
because I took it.
Speaker 2 (05:56):
And then kept getting COVID here, Yes, all right, to
be fair, because I don't want to waste time because
I want to get.
Speaker 3 (06:02):
To the story, to the Bowling Green story.
Speaker 2 (06:04):
Let's talk about it. It's among the most read. Take
us to a zepic town.
Speaker 6 (06:07):
Yes, so we've I mean you've known about this story
for a long time because I spent quite a bit
of time in Bowling Green, Kentucky. In Kentucky, Yes, not
Bowling Green, Ohio, because there is Bowling Green, Ohio's yeah,
but has you know four percent of Bowling Green and
the surrounding area people are on weight loss drugs and
it's just changing the fabric of the area economically, culturally,
(06:30):
but in sort of surprising ways. Like I thought that
I would go there and the restaurants would be empty
and the gyms would be closing down, But it's sort
of the opposite. I mean, restaurants are still full, the
gyms are doing great. But what's happened is this like
side economy has sort of formed alongside the drugs. So
there's medical spas that are cropping up everywhere to sell
these compounded drugs. The GNC is doing, you know, great
(06:53):
business selling supplements that help with side effects, and so
it's like it's actually helping business, but in sort of
surprising ways.
Speaker 2 (07:01):
I have a couple of listener questions, okaya time, as
long as they're pertinent to this story.
Speaker 5 (07:05):
Yes, so listener rights, in what happens if you take
the pill and you're in shape, which is I think
a good question because a lot of people, especially you know,
like on the Upper East Side. Yeah, they are already skinny,
but they want to take it anyway.
Speaker 6 (07:18):
Right, Well, I mean that's the thing is like doctors
shouldn't be prescribing these drugs because it is it's a
prescription drug.
Speaker 3 (07:24):
But is it a problem to you stop eating and
then you become like anarexic.
Speaker 6 (07:27):
Or I mean you that it could be dangerous, Like
if you don't need to lose that much weight and
you're on a weight loss drug that's really effective, probably.
Speaker 5 (07:35):
Not leads well into the second question, when do these
become over the counter and affordable.
Speaker 6 (07:42):
Well, that's a good question. Yeah, I mean they're probably never.
I mean I don't want to say never, but they
are prescription drugs, so they're not over the counter. But
generic drugs eventually will.
Speaker 4 (07:53):
Come down the pipeline.
Speaker 6 (07:55):
We're already seeing like some of the older GLP one drugs.
The first sort of wave of these is like sex Senda,
which is a drug called layer glue tide that's already
on the way to becoming generics, so.
Speaker 4 (08:07):
It's a better name too.
Speaker 3 (08:11):
Or sex start.
Speaker 2 (08:12):
Okay, all right, I'm gonna put you on the side
for a moment, so go back to your story because
it's really cool. You guys, it was several reporters involved
in it, and you really get into the specific specifics
of the people there. How did you find it though?
Speaker 6 (08:24):
Yeah, so, I mean we worked with the data team,
and we worked with this analytics firm called Purple Lab,
and they gave us three zip code level data, which
you know kind of gives you like a city and
then the surrounding area. So we looked all across the US.
We wanted to see what the ozembic hot spots were.
And you know, Bowling Green wasn't the only one that
came up in the data. There was Huntsville, Alabama. There
(08:45):
was like a few other areas, but Kentucky as a
state has the highest concentration of weight loss drug users.
So we were like, this is probably a good place
to start. Clearly stands out in the data. And then
once we started talking to people in Bowling Green, it
was like, Okay, this is our spot because everyone here
is either on the drugs or nos like five other
people that are on them.
Speaker 2 (09:06):
I mean, can we make the assumption that's just an
area where there's a fair amount of people that are overweight.
Speaker 4 (09:11):
Yes, yeah, definitely.
Speaker 5 (09:12):
I mean you can make as someone who's been there,
you can definitely make that assumption.
Speaker 4 (09:16):
To be care Yeah.
Speaker 2 (09:17):
Yeah, yeah.
Speaker 6 (09:18):
I mean the obesity rates are high there, the diabetes
rates are high there, and in Kentucky across the board.
So it's actually a good thing that there's a lot
of people taking these drugs in that area, because you know,
it means hopefully it's helping with.
Speaker 3 (09:30):
Not just Kentucky.
Speaker 5 (09:31):
I mean, you get off the airplane at CMH and Columbus, Ohio,
and you notice that immediately as well. But there is
a great line in your story by one of the
women who knew it. Yeah, she says, we're redneck enough.
Speaker 6 (09:44):
What she's saying, she said, we're redneck enough to be fat,
but smart enough to do something about it.
Speaker 3 (09:49):
She's been owning it.
Speaker 2 (09:50):
Yeah, I mean, listen, I mean, I think it's been
an incredible game changer for a lot of people in
their lives who struggle. And there are people who struggle
with being over and We've tried a bunch of different
things and I've seen it firsthand with individuals and then
they take this drug and it's just unbelievable the difference.
Speaker 6 (10:08):
Right, And I mean, that's that's the big thing with
these drugs is there's also been this changing understanding of
obesity as you know, a biological health condition that's driven
by someone's biology. That's not necessarily just because you know
these tropes that have long been repeated that someone's lazy.
Speaker 4 (10:27):
Or that they're eating too much.
Speaker 6 (10:28):
Like, there are biological mechanisms driving this, and the these
drugs help with that. So it's it's for people who
need them. It's an absolute game changer.
Speaker 2 (10:37):
What surprised you about like going there.
Speaker 4 (10:40):
And talking to these people? I mean, I that's a
really good question.
Speaker 6 (10:44):
I like didn't have a lot of I don't know
understanding going in because that was my first time in Kentucky.
Speaker 4 (10:51):
So I was like, eh, I don't know what this
is going to be like.
Speaker 6 (10:53):
And everyone was so willing to talk to us and
share their stories and like they were so grateful for
these drugs. But I think that maybe this is the
thing that surprised us is like everyone had this great
success at the beginning and then something happened, either their
insurance cut them off or they couldn't find the drugs
(11:15):
anymore because of supply shortages. And I guess that shouldn't
have surprised me because those are all themes that we've
been reporting on for a long time.
Speaker 5 (11:22):
But you're saying if they stopped taking the drugs, they're
no longer successful.
Speaker 6 (11:25):
Well no, not necessarily, but and like they have found
other ways to continue taking them. But I think I
was surprised to keep taking.
Speaker 3 (11:32):
The drugs and they're still successful. Yeah, but if you
stopped taking the drugs.
Speaker 4 (11:37):
Then oftentimes you gain the weight back exactly.
Speaker 6 (11:40):
I mean, that's not something that we saw with the
people that we spoke to, because they all were able to,
like one guy switch to another drug, someone else started
taking a compound of drugs. So, but I think it
was surprising to me that, like everyone across the board
that we talked to encountered one of these issues with
accessibility or with you know, supply shortages or price or
something like.
Speaker 4 (12:00):
It really is just affecting people.
Speaker 7 (12:02):
I mean a lot.
Speaker 5 (12:04):
It strikes me as obvious that if it's one thousand
dollars a month and an extremely short supply, it's gonna
be difficult to keep paying for it every month and
keep finding it yeah. Yeah, and if you stop taking
the drugs for the most part, you put the weight
back on. Yeah, unless you start taking the drugs again, right, Yeah.
Speaker 2 (12:23):
Are most of these people though? Is insurance paying or
how much was out of pocket?
Speaker 6 (12:27):
It was most of the people insurance was paying at
the beginning, and then like six months in or once
they lost a certain amount of weight, insurance stopped paying
for them. Some people went to these compounded off brand.
Speaker 4 (12:41):
Drugs that we've talked about before.
Speaker 6 (12:43):
Other people were able to, like one guy switched from
ozempic to Manjarro because his insurance would cover Manjarro but
not ozempic. So like everyone was able to continue taking
the drugs for the most part. But I mean Pat Stiff,
who's one of the characters in this story, Like he
switched from ozempic to Manjarro and then couldn't find his
Manjaro anywhere because the supply shortages were so bad. So
(13:05):
he was, you know, as we're like finishing up this story,
calling me and saying that, well, I'm just gonna have
to go off the drug and see what happens, and
it'll be like an experiment. Hopefully I don't gain the
weight back, but yeah, it's it's a struggle I.
Speaker 2 (13:19):
Think for a lot of people, a slice of life.
I just want to go to the Pasha salon. Yeah, no,
but it's just interesting. Yeah, and I do wonder you know,
at some point does the medical community say that you
because we've talked about this, do you have to be
honest for the rest of your.
Speaker 5 (13:31):
Life unless benefits, in which case you don't write that's
my problem.
Speaker 3 (13:36):
I just have no willpower, which is why I want
the drug.
Speaker 2 (13:39):
Yeah, I don't know. I don't know.
Speaker 6 (13:40):
Like that's not always about willpower, Like it's a for
a lot of people, a biological thing that drives them
to eat that you you know, it's not as easy
as rise.
Speaker 3 (13:48):
And eat like high calorie, no low nutrition.
Speaker 4 (13:51):
Food sometimes yeah, I know I.
Speaker 3 (13:56):
Need a frosty you know.
Speaker 2 (13:57):
No, you're not gonna anyway. It's it's you know, these
are one of those stories, a slice of life, but
just something that we talk about so much, but to
see it kind of so dense in terms of the
amount of usage and so on. Great stuff is always
thank you really appreciate it.
Speaker 3 (14:14):
Amazing story we've forgotten and you serve they doing bowling green.
The most important thing they make the Corvette.
Speaker 4 (14:20):
Yeah, Hot Stiff works at the Corvette Corvett.
Speaker 3 (14:24):
You know Plant, It's amazing you left up for the end.
I love the car.
Speaker 2 (14:28):
Madison Muller, You survived with Matt.
Speaker 1 (14:32):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
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Speaker 2 (14:46):
Hey, listen, we want to get to a stock. It's
been the number one decliner in the S and P
five hundred and Nasdaq one hundred. Today we're talking about
Warner Brothers Discovery plunging to its lowest ever parent of
CNN and TNT posted a second quarter charge of nine
point one billion dollar after writing down the value of
its traditional TV networks. Has came after the closing bill yesterday.
The companies you know, created back in twenty twenty two
(15:07):
when Discovery acquired Warner Media, and it's concluded that cable
channels like CNN and T and T are no longer
worth what they were when that forty two billion dollar
merger was completed. So let's get to it with Bloomberg
Intelligence senior media analyst Kevin Near. He's joining us here
in our Bloomberg studio. Well, it's never good.
Speaker 3 (15:27):
You've got it, not for Warner Brothers Discovery.
Speaker 2 (15:30):
When you've got a more than nine billion dollar write down?
What the heck happened? Why are we here?
Speaker 7 (15:36):
Yeah, it's a great question. I mean, it's it's certainly
not just Warner when we're talking about traditional media in general.
It's a very transitory period. But you're right, I mean
that nine point one billion dollar write down that's from
the TV networks, right, that's that's essentially saying that, you know,
we don't see that this is valued in line with
wre our market cap is, and we have to take
this down in the book value. They're obviously trying to
(15:57):
scale up their streaming, but the TV networks are still
the brend butter. That's where they make the majority of
their profit. And it was a big mess. You know,
advertising down ten percent, There was there's a pressure on
affiliate fees obviously with cord cutting, and then on the
studio side as well, it was weaker than we expected.
So the stock is noticeably down to I.
Speaker 5 (16:14):
Feel like there's something I'm missing here, Like this part,
like like like John Malone and these corporate titans are
destroying shareholder value.
Speaker 3 (16:23):
For a reason.
Speaker 5 (16:24):
Like you know when when when Zaslov came in and
said they'd already made back Girl, right right, and he
just said, I'm going to erase this content. And he
did it with Coyote versus Acme, and he did it
with a lot of content that you would think is
even some Sesame Street episodes were just disappeared, right, And
the reason was he gets some tax benefits from just
(16:46):
dumping this content that they paid so much to make.
Is he just trying to shrink this company? I mean
they borrowed what forty billion dollars to buy this from
AT and T and now the market cap is like
eighteen billion. The stocks lost seventy percent of its value.
Does he get paid more as the stock does worse?
Speaker 7 (17:08):
Yeah, I can't speak to his pay, but.
Speaker 5 (17:10):
Well you know that he got paid fifty million dollars
last year, right, right?
Speaker 3 (17:14):
What did he get when he came in?
Speaker 7 (17:16):
It was it was some crazy ben It was one
hundreds of.
Speaker 3 (17:18):
Millions, two hundred and yeah, thirty million.
Speaker 7 (17:20):
It was quite high.
Speaker 2 (17:21):
So the purchase bad deal.
Speaker 7 (17:24):
It's tough to say it's a bad deal at this point.
I mean we have to zoom out a little bit
and think again about you know, the combination here. Obviously,
all of media is facing these challenges. It's not just
Warner Brothers Discovery, but you know.
Speaker 3 (17:35):
They do it. Yeah, Discovery was doing just fine.
Speaker 2 (17:38):
No offense. We've been talking about ESPN having issues for
a long time, right, and then it seems to have
kind of writed maybe as it's moved more into into streaming.
But having said that, two years ago, we knew the
model was changing, Right, why would you do this then?
Speaker 5 (17:51):
Right?
Speaker 7 (17:51):
I mean the model has changed, and also Wall Street's
attention has changed. You know, back then, people were focused
on subscriber growth and people were spending to grow subscribers,
and it was all fine when when that was the case.
But after you know, Netflix posted their first subscriber to Cline,
everyone went, whoa hold on? You know, maybe subscribers aren't
the metrics that we should be looking at. This isn't
the north start. We need profit we need profitability, and
(18:11):
it's taking longer than we thought for these streaming services
to scale up. They're starting to inflect.
Speaker 5 (18:16):
But he said yesterday on the call, am I disappointed
that the trends and the linear business haven't been.
Speaker 3 (18:23):
A little better.
Speaker 5 (18:24):
There has been talk about a recovery a year, year
and a half ago. It has really happened. It is
what it is. We're managing this as best we can.
Speaker 7 (18:30):
Right, and we can talk about this passport or all
we want. But I think you know where investors concern
line is on the lack of visibility, right. I mean,
this whole NBA debacle has been really ahead.
Speaker 3 (18:41):
So let's let's get into that first step. So for
those who don't know how did they.
Speaker 7 (18:45):
Lose this, it's it's it's been quite the saga.
Speaker 5 (18:49):
They had NBA games, which is the kind of thing
that it doesn't matter where it is.
Speaker 3 (18:52):
It's just like you tune in.
Speaker 2 (18:54):
That's right, you're going to pay for it.
Speaker 7 (18:56):
You're going to do whatever you have to do exactly.
And they had an opportunity to negotiate for exclusively. But
if you just look at sports, right, it's not just
the NBA, I mean talking about the NFL. Those rights doubled, right,
So it's a cost problem. Everyone across media is trying
to cut costs right now. Warner thought they could get
for a smaller package maybe, but the NBA wanted wanted
a broadcast partner NBC, they wanted to stick with the
(19:17):
ESPN and then them bringing in Amazon for the streaming service.
So it's just been a back and forth right now.
Speaker 2 (19:21):
So if they hadn't lost that, would you still be
having some kind of conversation about Warner Brothers right now?
Would it have been a smaller.
Speaker 7 (19:28):
Yeah, that's yes, I think so. I mean again, the
quarter is the quarter, but really it's the question of
what's going to happen with CNC, you know, with this
big hole in their programming schedule, and they can go
after some other sports rights, maybe the UFC. Those renewals
are going to come up soon. But it's a tough
position that they're in and now that it's a going
to court.
Speaker 2 (19:45):
David Zazov also said on the call with investors yesterday,
two years ago, market valuations prevailing conditions for legacy media
companies were quite different than they are today. This impairment
acknowledges this and better aligned our carrying values with our
future outlook.
Speaker 4 (19:59):
Is he right?
Speaker 2 (20:00):
Were they that much different?
Speaker 7 (20:02):
Yeah?
Speaker 2 (20:03):
You know, that's follow the industry.
Speaker 5 (20:05):
It's a great question from another number of people that like,
near the end of the pandemic, we thought this was
going to be okay, or these assets were to be worth.
Speaker 7 (20:13):
More, right. I mean, there's just so much content out
there now. You gotta understand. I mean, you know, engagement
is really where investors want excuse me, management wants investors
to look at it. You know, where people are spending
time on our platform. They're going to continue to pay.
Speaker 2 (20:24):
For our warehousehold. That's whittling. We just canceled something yesterday.
We're not really using it. We had it for, you know,
curb your enthusiasm something.
Speaker 5 (20:31):
Sorry, but of course you have k by the way,
that's HBO, which is like an amazing, amazing property.
Speaker 3 (20:38):
They changed the name of HBO men Max to Max.
Speaker 5 (20:41):
That's like if you had Disney Plus changing the name
to just Plus.
Speaker 3 (20:44):
I know, why wouldn't they do that?
Speaker 7 (20:45):
Consumers wonder why they can't anything.
Speaker 2 (20:47):
But my point is like we're looking at it this
huge menu, and we find ourselves maybe looking at a
couple of things. I don't know that I need that
monthly everyone, you know what I mean, You just get
to a point where you start to kind of curate
if you will, or just say do I need this
extra ca A.
Speaker 7 (21:00):
Lot of people are thinking about it that way. You know,
streaming services almost all of them have announced doore or
implemented price increases this year, and then those that haven't.
You know, Netflix is the big standout. They're cracking down
on password sharing, right, so it's becoming more expensive to
stream and the play is really advertising, right. They keep
a low entry cost for advertising because they want people
to sign up for that year.
Speaker 2 (21:20):
Matt and I were talking in the newsroom. I mean, Kevin,
wasn't Discovery kind of a nice little business. It was
very niche, it was, but very clear in terms of
what it was all about.
Speaker 7 (21:30):
Very low cost programming. You know a lot of unscripted
You think of Food Network and HGTV and again when
you know we had such a critical mass of PATV subscribers,
it was great. It was a great, healthy business, healthy
free cash flow. And it's just not the case anymore.
You know, core cutting is not slowing down, and the
question is just how how do we get our content
and then monetized in the best way possible.
Speaker 5 (21:52):
This has been kind of a cursed asset to be fair, right,
AOL Time Warner was the biggest deal of all time when.
Speaker 3 (21:59):
We were kids.
Speaker 5 (22:00):
And then you know, they had to write off AOL
completely at and T came and bought it for half price,
you know, and then they sold it to half for
at half price to Zaslov. And I mean, who's gonna
buy this thing for half price?
Speaker 7 (22:16):
Now? I mean, you make a great point, but I
would also point back to you know, it has some
great assets. You know you mentioned HBO.
Speaker 3 (22:23):
It's called Max now.
Speaker 7 (22:24):
It's called Max now out they have a really world
class studio. I mean, this is a company that makes
Superman movies, Batman movies. Again, they own to made Barbie,
or they made Barbie. You know, they wouldn't have Barbenheimer
without Barbie.
Speaker 2 (22:38):
I still love Barbie.
Speaker 5 (22:40):
The reason we had Oppenheimer, by the way, at a
different studio was because the director could no longer deal
with this studio.
Speaker 7 (22:48):
Chris Allen was shopping around to Oppenheimer.
Speaker 2 (22:50):
You're sitting down with Zaslov. We've only got about twenty seconds.
What do you ask him? What do you want to know?
Speaker 7 (22:55):
What's going to happen after this? NBA, whatever you're doing
in trying to city enda, what's going to happen after that?
Speaker 3 (23:01):
He says, it's with the lawyers.
Speaker 7 (23:02):
Now, yeah, exactly, exactly, all right with the lawyers.
Speaker 2 (23:07):
All right, Kevin Near, thank you so much. Bloomberg Intelligence
Senior Media Associate analyst, joining us right here, this on
a day when we are just watching the shares of
Warner Brothers Discovery, just sink.
Speaker 4 (23:16):
This is Bloomberg.
Speaker 1 (23:19):
You're listening to the Bloomberg Business Week Podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and Android Auto with the Bloomberg Business app. You
can also listen live on Amazon Alexa from our flagship
New York station, Just say Alexa playing Bloomberg eleven thirty.
Speaker 2 (23:37):
So I'm s that caught my attention, our attention. Some
proposed rules how they could This is proposed rules for
disclosing when AI generated content appears in radio and TV.
Political ads have spurred some debate over whether the Federal
Communications Commission is the best government agency to regulate on
the topic. I mean, people have been talking about like
(23:58):
who oversees it?
Speaker 4 (23:59):
What's the matter?
Speaker 2 (24:00):
What are you lost?
Speaker 3 (24:01):
I've lost.
Speaker 2 (24:02):
We're talking about rules when it comes to AI generated
content and who needs to oversee it to make sure
that things are accurate, whether it's in politics or in general.
Are you lost?
Speaker 5 (24:14):
Yeah, because I don't think you can make such rules.
If I create AI on the computer in my basement,
who's going to oversee me?
Speaker 2 (24:19):
I don't know, but maybe somebody should if it's inaccurate
or false misleading that leads to I mean, it.
Speaker 3 (24:24):
Will be inaccurate and possibly misleading.
Speaker 7 (24:27):
Let's see what our next probably say.
Speaker 2 (24:29):
Greg Petro was with us, CEO of the retail technology
company First Insight. He's going to save us. Joining us
from Pittsburgh, Pennsylvania. He's the author of The Tyranny of Now,
How Technology Impairs Good Judgment and what you can do
about it, his book out last month. As I mentioned,
joining us from Pittsburgh. Good to have you here with us.
As you can tell, we're having a little bit of
a debate, little conversation here maybe right now. First of all,
(24:51):
remind the world what your company exactly what you do,
especially when it comes to helping retail customers find their customers,
a communicate with and interact with those customers.
Speaker 8 (25:03):
Great to be with you, Carol matt So. First Insight
is a company that we've been around for seventeen years now.
Our global company software company helping retailers, brands, and manufacturers
understand consumer needs and demands. We create a space in
predictive analytics, using AI and Voice of the customer to
(25:25):
understand specifically what consumers want in the products and services
that those companies offer. So it really is about closing
the gap between what the consumer, where the consumer sits today,
especially in a very dynamic world, and where those decision
makers sit every day, and in many cases they're making
(25:46):
those decisions six to nine months twelve months in advance,
and it's our goal to help them close that gap
and make better decisions.
Speaker 5 (25:56):
So, which are the new technologies that I mean? If
you tell me new technology is making decision making harder,
I would agree with you wholeheartedly, And I instantly think
of social media. Which technologies are you talking about?
Speaker 8 (26:14):
Well, I'm talking about when I speak about the tyranny
of Now in the book that I've written, it really
refers to the entire platform of technology, the advent of
the Internet, social media, smart devices, and the inundation of
data to each of every one of us, whether we're
a consumer or a decision maker, and each one has
(26:37):
a challenge related to a benefit and a challenge, Matt,
and at the same time we're driven off this immediacy
of right now, let's make a decision, answer me right now.
You know, we confuse oftentimes response rate meaning to a text,
to politeness. Right Is that responsiveness actually going to improve
(27:04):
anything in that decision making or that discussion. I write
quite a bit about that in the book, and I
think that when you look at it, you have to
actually break it apart each.
Speaker 5 (27:17):
It makes perfect sense, though, I mean the fact that
we're all reachable and everybody's texting me. You know, in
the past, I would talk to my mom on the
phone once every couple of days. Now she's texting me
two or three times a day and always asking me
to make a decision that I feel like I have
to answer immediately right And you're saying that pushes me
(27:40):
to maybe make the wrong decision sometimes.
Speaker 1 (27:44):
Yeah.
Speaker 8 (27:44):
I write about it, calling it snap decision making, the
need for us organizationally and companies and at the same
time individuals responsivity, the need for us to give an answer,
immediate lead without pausing before hitting the send button. I
write a great story about the example of the Southwest
(28:07):
CEO and what that caused when he hit the send
button prematurely, and many other examples. You know, during COVID,
the decision making that many individuals made about the housing
moves and the housing purchases that they made in those
snap decisions from moving from inner city out to suburbia
or even further away states, not considering the fact that
(28:31):
housing prices have risen so quickly, and how are they
going to you know, regain their money if they wanted
to resell their house. So I think that's one aspect
of the problems of the tyranny of now that I
write about that has caused a decrease of thoughtful decision making.
Speaker 3 (28:51):
Does the tyranny of right now? I get the rush
to make a decision?
Speaker 9 (28:55):
Yeah?
Speaker 2 (28:55):
You know, somebody tweeted out xt out whatever the heck
you want to call it, something about patients this morning
online and I was like, amen, you know, there is
no patience. There is like if you don't take care
of something right away, this ability to breathe. I think
about how we approach companies sometimes, right you know, sometimes
they have to invest. Sometimes they're going to have a
(29:17):
bad quarter because they're thinking about the future and the
future investment. So how do we though get away from this.
Speaker 8 (29:23):
Well, I think you first need to think about all
the aspects that are creating problematic stages to that decision
making the concept you talked about it earlier in social
media feeds, I mean most recently, the Surgeon General wrote
about and created a warning on social media. I thought
that unheard of, basically our Surgeon General warning the public
(29:48):
that that could be a challenge for our society. And
part of that is created not only bias in confirmation bias.
The feeds that we're getting are you know, reaffirming things
that we believe, but not necessarily giving us a full
viewpoint tribalism we talked. I talk about that in the
(30:09):
book where it's about micro segmentation, which is great. You
can find friends in small communities and forums like you know,
vintage car racing that I enjoy or whatever that nuance
is that you appreciate, but also it feeds that segment
of information when you think about it on a geopolitical sense,
(30:29):
that represents a lot of risk and that leads it's.
Speaker 2 (30:33):
Funny and media. Because I think about Matt, if you
think about go back years ago when we were doing
shows together, I feel like we used to do a
lot more debates, whether it was on the markets it
was a bare bull debate, or we would talk about
a company and you'd want somebody from different sides a
political issue, some kind of issue. You'd want a conservative
and a liberal voice, and the idea was to present
(30:53):
the different sides. And I don't feel like, I.
Speaker 3 (30:55):
Don't know, no, don't do that. It doesn't go chamber.
Speaker 5 (30:58):
I mean, if you look at well, I'll get give
you an interesting example. The other day, I was looking
through my Twitter feed or my ex feed and thinking
to myself, I've got to unfollow all of these people
with whom I constantly agree. What's the point I only
want to follow and look into like the nutcases that
(31:21):
I think are crazy? Is that the right approach?
Speaker 8 (31:24):
Greg Well, I think, you know, I'm not sure I
would say that, but I think that diversity of points
of view are clearly necessary when you think about it,
when you're looking at that echo chamber you refer to,
or what I refer to as tunnel vision, right, it
is that confirmation bias is feels good. It's a lot
(31:45):
of dopamine hits, you know. I mean, it's been documented
pretty clearly that we like that as humans. But the
reality is it doesn't give us the blind spot coverage
that we need to look at all of the information
and when you're making decisions about events, and so maybe
it's following not just the people that you like, but
(32:08):
maybe the people that you disagree with and understanding their
point of view.
Speaker 2 (32:13):
Hey, real quickly, only about thirty forty seconds. So do
you think speaking about big decisions of the last few weeks,
President Biden made a really big decision he took time.
Do you think he took time?
Speaker 8 (32:24):
Well, that's one of is right. You've got to be
you've got to slow down. No matter what you're going
to do, you've got to be able to slow down,
set yourself aside, pause for a minute and reflect on it.
Number two, you've got to get diversity of opinion. Hopefully
he did. And the third is to focus. And in
order to focus on anything. You know, IQs have been
dropping forty straight years. It is necessary for us to
(32:49):
get away and focus on the task at hand in
that environment in order to make good decision making. And
we write about that in the book. So hopefully there
are some key ways there that everybody can use.
Speaker 2 (33:03):
Super interesting conversation. Look forward to you coming back again.
Speaker 3 (33:08):
Reading the book.
Speaker 2 (33:09):
Yeah, Greg Petro Tyranny of Now, Yeah, exactly, Chief executive
officer at First Insight. As you said, the Tyranny of
Now is his new book that is out. Really appreciate it.
Speaker 1 (33:19):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from two to five pm Easter. Listen
on Apple car Play and Android Auto with a Bloomberg
Business app, or watch us live on Youtubemco Journal.
Speaker 5 (33:38):
Now about you let me drive?
Speaker 7 (33:40):
Oh no, no, no, no, please go on, honey, please, gravels.
Speaker 2 (33:46):
I want to try.
Speaker 6 (33:47):
It's a good question.
Speaker 1 (33:54):
This is the Drive to the Clothes doing well by
shut it down on blue Bird Radio.
Speaker 2 (34:01):
All right, everybody, just about eighteen minutes left in today's
trading session. You heard Charlie breaking down the trade here.
We're just kind of off our best levels of the session,
but man, we've got a pretty decent rally here.
Speaker 3 (34:11):
Matt, Yeah, no, absolutely.
Speaker 5 (34:13):
I mean the jobless claims number that we got this morning,
and I just struggle with this because it was two
hundred thirty thousand and we were looking for two forty,
so beating by seven thousand layoffs is that really what
it's all about. But it's not just the beat. It's
also the fact that it was better than the two
hundred forty nine thousand in the prior period.
Speaker 2 (34:34):
The revision was just a hair up.
Speaker 5 (34:37):
Yeah, pretty much unchanged, but that was enough to send
us off to the races. So yesterday we were up
and then down into the clothes. Today we're up and
not down into the clothes, at least not yet. And
we still and we only have eighteen minutes to go.
Speaker 2 (34:48):
Yeah, so we'll see what happens. Let's see what our
guest has to say. Jason Bronkhetti is with US chief
investment officer over at Lincoln Financial. They had three hundred
eleven billion dollars an end of period account balances net
of reinsuring as of the end of June. Joining us
here on this.
Speaker 3 (35:05):
Thursday out of bradn Or, Pennsylvania.
Speaker 2 (35:07):
Thank you very much. Yes, I need a little bit
of an assist today, Jason. Good to have you here
with us. It's been quite a week. Uh, and here
we are. How are you thinking about the last four
days maybe and then even going to the tail end
of last week.
Speaker 10 (35:20):
Yeah, you know, it's first of all, thanks for having me.
It's great, great to be here with with both of you.
You know, we uh, you know, we had been anticipating
that there was, you know, a likelihood or possibility that
we could we could see some some bumps in the market,
and clearly we saw that uh late last week with
the employment news.
Speaker 5 (35:36):
Uh.
Speaker 10 (35:36):
You know, as we're as we're looking through that, you know,
one data point does not make uh, you know, an
economic story necessarily, but it was an important data point.
Speaker 9 (35:43):
And we've been operating running along here with.
Speaker 10 (35:45):
Particularly low volatility, uh for for quite some time that
I would say that was really the aberration. So seeing
a little bit of volatility was something that we're just
trying to let clients know that this happens, This is
not an atypical amount of volatility, and we've now seen
a bit of economic data to prove that out. To
the points you were making earlier about some of the
employment data, I think as we see a little bit
(36:06):
a few additional data points here, start to see things
turn around a bit, so so view this more as
a consolidation as opposed to something more extreme.
Speaker 5 (36:12):
Were you bullish before this, you know, last week long period,
Because as far as I can tell everything has played
out kind of exactly as we expected. We knew it
was going to be a good earning season, and it
has been a good earning season. We knew the labor
market was going to soften, obviously, the Feds raised indust
(36:33):
rates by five hundred and fifty basis points, and the
labor market has softened a little bit.
Speaker 9 (36:37):
Yeah.
Speaker 5 (36:38):
The only sort of unexpected twist was the Bank of
Japan raising rates and spooking traders that were that had
borrowed in yenep and bought higher yielding assets. But that
seems to have unwined and the Bank of Japan got dubvish.
So if you were bullish before last week, you should
be bullish now.
Speaker 9 (36:59):
Yeah.
Speaker 10 (37:00):
You know, we as we came into last week, we've
been a little bit more balanced in our view. I
would say, I think we are starting to see some
of the long invariable lags of the restrictive monetary policy
come into play, and valuations are obviously elevated.
Speaker 9 (37:11):
I think that the you know, the economy though, remains
pretty well in balanced.
Speaker 10 (37:14):
So I do think if you were bullish before, you
shouldn't have changed your view much coming out of that.
I do think that, you know, seeing the employment data
points softened, seeing the seeing some of the other statistics
start to soften a little bit, it does give reason
for pause. So again, just more of a generally balanced
view on things. To your point about about the end,
I mean, obviously we've seen that was one of the
(37:34):
one of the things that came in and just spook
the market pretty significantly. But to your point, we're seeing
that that bait and JP Morgan had to report out
this morning doing the math there, seeing that much of
that carry trade has now been on wine unwound. So
I do think that, you know, we set ourselves back
up in a pretty good, pretty balanced position.
Speaker 2 (37:50):
Hey listen, Jason, you guys are just out with a
new report that basically gets into kind of the things
that are top of mind for investors, what they're really
concerned about. I feel like at Bloomberg we talked about
a lot of things. Certainly it's what the FED does
with the economic outlook, does geopolitics? What did you guys
find out?
Speaker 10 (38:08):
Yeah, So the one thing about Link, we we have
a really unique and robust multi manager platform. You mentioned
the three hundred billion dollars or so that we have
in assets, and we manage that with a part of
a whole bunch of partnerships, great asset managers out there,
and then we bring our insights out to the seventeen
million consumers that invest in and purchase our solutions. So
(38:29):
one of the things that we do is we take
the views from those seventeen million customers or really the
sixty thousand financial professionals that are calling on them, and
we ask them, what are the questions that you're getting
or we get those questions, we try to distill that down.
So we take all the broad views that we get
from our managers and we distill that down into kind
of a sixty page chart book, kind of a best hits.
Speaker 9 (38:49):
And we also come.
Speaker 10 (38:50):
Up every quarter with three key themes that seem to
be on the minds of investors, and so each quarter
we do that, and so most recently the themes have
been really around what happens to marrow markets during an
election year. There'd been also a vocal minority suggesting that
the FED might not act in an election year.
Speaker 9 (39:08):
What would the FED do an election year?
Speaker 10 (39:09):
I think that's been asked an answer, but that's the
question that's been on folks minds.
Speaker 9 (39:13):
And then the third point is just what's gonna what's
gonna happen with rates, and what will drive the FED
to act.
Speaker 10 (39:19):
So those are really the three themes that I'd say
have been on the minds of most investors throughout the
throughout the year, and really more so in the second quarter.
And again some of that's been answered, and the narrative
has changed a bit in the last week given the
volatility that we've seen.
Speaker 5 (39:31):
But the other thing that you have your finger on
the pulse of is and I just know my financial
advisor knows at any given time how broke and overstretched
I am financially. How does it look for your clients,
because we're starting to see, you know, fewer bookings with
trip Advisor, fewer bookings with Airbnb than maybe we expected,
(39:52):
you know, visitors to Disney they're growing, but not as
quickly as the investors would like, and more people are
staying at home and ordering Disney Plus.
Speaker 3 (40:01):
So do you see investors kind of trading.
Speaker 5 (40:04):
Down, holding off on bigger purchases, you know, maybe a
little bit more conservative, I mean consumers.
Speaker 9 (40:10):
Yeah, we're seeing we're seeing a little bit of softening.
Speaker 10 (40:12):
But I do think you know, the way that the rates,
the impact of our rates has played out, I do
think it's had a disproportionate impact on the less affluent consumers.
Speaker 9 (40:22):
So we're seeing a bit more kind of trading down there.
Speaker 10 (40:24):
I think at the less affluent level, some of the
folks that the more of the mass affluent folks that that
tend to be purchasers of our of our solutions, not
really seeing any any pullback there. And when we look
at a lot of the coincident data, look at the
you know, the travel bookings and and as well restaurant.
Speaker 9 (40:40):
Bookings, some of those statistics still look pretty good.
Speaker 10 (40:42):
So so softening perhaps at the margins and particularly at
the less affluent end of the marketplace, but big picture,
we're still seeing still seeing reasonable spending out of the consumer,
reasonable views in terms of the markets and and allocation
of capital.
Speaker 2 (40:57):
So somebody comes to you, got a chunk of money
to invest, Where do you tell them to put it
right now?
Speaker 9 (41:03):
You know? So we're really focused on the long term.
Speaker 10 (41:06):
So we think about it it's best to put to
invest in preparation as opposed to prediction, and so that's
one of the things that we focus in on is
making sure that folks have a good long term plan
and they stick to that plan. And so that's one
of the big things that we're focused on, is just
thinking about protection and being prepared because there are going
to be issues where things come down. You know, we
(41:28):
offer a lot of solutions around registered index linked annuities,
for example, that provide a degree of protection to the
extent that you see some downturns in the market, but
also give you that opportunity to invest and get some appreciation.
So I'd say solutions like that across the really the
annuity and the insurance landscape provide a fantastic way to
(41:49):
have both the appreciation as well as that downside protection.
Speaker 2 (41:51):
All right, we're going to run. Hey, listen, thanks so much.
Jason Broketti. He is chief investment Officer at Lincoln Financial,
joining us from Radnor, Pennsylvania.
Speaker 1 (41:58):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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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
(00:23):
and Tim Stenebeck from Bloomberg Radio.
Speaker 2 (00:27):
So we're going to stay with those GLP one drugs
talk a little bit more because we had Eli Lilly
narrowing the gap with its rival Novo Nordisk and in
the race to dominate the red hot OBCD market as
it expands its supplies of weight loss drugs. Lily lifted
its twenty twenty four revenue outlook for the second time
this year on the strength of its weight loss drug.
Shares of the company soaring in today's session. And it
(00:47):
was just yesterday, Matt. You might recall that Novo was
that one of your decliners?
Speaker 3 (00:52):
Novo, No, I don't think. Yeah, it was two days ago.
Speaker 2 (00:56):
Oh a couple of this. Okay reported disappointing second quarter
sales of go we gov, saying price concessions for companies
that manage prescription drug benefits in the US cut into
its performance. So we did see investors push down chairs.
So let's get to it. There's a lot going on
in the space. Our GLP one guru, can I call you?
That is Bloomberg News Health reporter Madison Waller. She's here
in our Bloomberg Interactive Broker studio. You are the guru.
(01:18):
You're gonna take it to your grade.
Speaker 4 (01:20):
But I feel like you're guru now too. We talk
about it so much.
Speaker 3 (01:24):
You know, semi blue tides by the way, o, zepic
and we go v same thing, right, and is a
higher dose, okay.
Speaker 5 (01:31):
But Monjaro and zep bound, zet bound, same thing, same.
Speaker 2 (01:36):
Thing, Okay, Yeah, it's very nice.
Speaker 5 (01:38):
Well, I'm just one when we get these stats like
zep bound sold one point two billion dollars worth in
the second quarter.
Speaker 3 (01:45):
That does not count Munjarro.
Speaker 6 (01:47):
Right, they're separated out. And it's interesting because Monjarro has
been on the market longer, but zep bound has just
ramped up.
Speaker 5 (01:53):
And it's also interesting because that's the one that people
talk about as the fat drug, and the same is
true with no it's the non fat drug.
Speaker 3 (02:02):
You can't talk about well, whatever you want to call it.
Speaker 5 (02:04):
I also think it's interesting that Eli Lilly calls their
weight loss drug Manjaro, which is like so one of
the Italian says for go eat your dinner right.
Speaker 6 (02:13):
Well, there's actually a story behind the name. What is it,
Mount Kilimanjaro, like smushed together, and so if you look
at the label, you can see there's like two little mountains.
Speaker 2 (02:22):
Oh that's interesting.
Speaker 4 (02:23):
Who knew?
Speaker 1 (02:25):
All right?
Speaker 2 (02:26):
Fun fat, So let's talk the nuts and bolts of
your world Earninge's Lily today upbeat, Novo not so much.
Investors reacted accordingly. How are you thinking about the space
and kind of the reporting that we're seeing.
Speaker 6 (02:36):
Yeah, I mean we've been talking about supply and the
supply shortages for a long time and that sort of
continues to be the story.
Speaker 4 (02:42):
It's what we're seeing again the last two days with
Novo and Lily. I mean, Novo.
Speaker 6 (02:46):
Struggled and missed sales estimates yesterday. Lily sort of smashed
them out of the park today.
Speaker 2 (02:52):
So the business is good, it's just a matter of
if you can keep up.
Speaker 6 (02:55):
Yes, exactly, and Lily like had I mean, both companies
have invested billions into ramping up manufacturing. It just seems
like Lily's issues are starting to ease a little bit
faster than Novo's maybe are.
Speaker 3 (03:08):
Because they have way more money.
Speaker 5 (03:09):
So the idea is you can make as much as
you can sell, right, definitely. And Eli Lilly is an
eight hundred billion dollar company, right, so they have more
resources to boost production. Novo is I don't know, like
a ten billion dollar company, right, I don't even know.
Speaker 3 (03:27):
It's less than ten.
Speaker 4 (03:28):
It's the biggest company in Europe.
Speaker 3 (03:30):
It's worth three point eight billion Danish kroner.
Speaker 2 (03:33):
It's a five hundred and sixty eight billion dollar market
cap company. The eighty rs at trade here, Oh, is.
Speaker 5 (03:38):
That three point eight trillion? In any case, it's worth
less than Lily, and it's done worse than Lily. Over
the past five years. Eli Lilly shares are up six
hundred and forty three percent.
Speaker 4 (03:46):
Yeah, I mean Novo's a small.
Speaker 3 (03:48):
Novo's up sixteen percent.
Speaker 6 (03:50):
Lily's more diversified. They've been at this for I mean,
both companies have been at this for a long time.
But up until the last few years, Novo's bread and
butter was just diabetes like. So Lily has a slew
of other drugs, cancer drugs, autoimmune drugs. They know how
to ramp up you know, production and they know how
to do this and plan for future demand and this
(04:12):
is all relatively new for Novo.
Speaker 4 (04:14):
I mean, this market is crazy.
Speaker 2 (04:17):
We want to get into a story that's on the
Bloomberg that's a killer, But before we do that, about
one and a half years into talking about this classic drugs,
you've been reporting so much, you know, I feel like
every couple of weeks or something, there's like, hey, look
what else these drugs can do? Your view you're thinking,
you're reporting, how does it continue to evolve and how
(04:38):
you think about the future.
Speaker 6 (04:40):
I mean, the thing it was interesting actually today on
Eli Lilly's earnings call, they kind of like slipped this
into the call. It wasn't huge news, but they're no
longer calling their obesity and diabetes business unit just obesity
and diabetes. Now it's like cardio metabolic health, which sort
of signals this bigger thing that we've been talking about
that these drugs, you know, aren't just weight loss drugs.
(05:03):
They have potential indications and are potentially able to help
with a lot of other conditions that are sort of
interrelated with heart disease and kidney disease and liver disease.
And so like, I think that that is going to
be a huge theme going forward, and the fact that
Lily kind of mentioned that on the earnings call today,
I was like, so they're thinking about it this way.
Speaker 3 (05:21):
So I mean, I want, you know, I want.
Speaker 5 (05:23):
I wanted to take this forever, as you both know,
not just because I'm fat, because I only need to
lose like twenty pounds, but I want to have a
healthy heart so I don't die soon. And I'm pretty
sure I'm going to get Alzheimer's disease. This may stop
that as well or slow it down. On the other hand,
there is so much optimism for mRNA as well, and
(05:45):
that didn't cure cancer yet, so maybe it's going to
take a while.
Speaker 6 (05:49):
Yeah, I mean, it's it's different, right. mRNA was amazing
for COVID.
Speaker 3 (05:53):
It just I think was it that great for COVID
because I took it.
Speaker 2 (05:56):
And then kept getting COVID here, Yes, all right, to
be fair, because I don't want to waste time because
I want to get.
Speaker 3 (06:02):
To the story, to the Bowling Green story.
Speaker 2 (06:04):
Let's talk about it. It's among the most read. Take
us to a zepic town.
Speaker 6 (06:07):
Yes, so we've I mean you've known about this story
for a long time because I spent quite a bit
of time in Bowling Green, Kentucky. In Kentucky, Yes, not
Bowling Green, Ohio, because there is Bowling Green, Ohio's yeah,
but has you know four percent of Bowling Green and
the surrounding area people are on weight loss drugs and
it's just changing the fabric of the area economically, culturally,
(06:30):
but in sort of surprising ways. Like I thought that
I would go there and the restaurants would be empty
and the gyms would be closing down, But it's sort
of the opposite. I mean, restaurants are still full, the
gyms are doing great. But what's happened is this like
side economy has sort of formed alongside the drugs. So
there's medical spas that are cropping up everywhere to sell
these compounded drugs. The GNC is doing, you know, great
(06:53):
business selling supplements that help with side effects, and so
it's like it's actually helping business, but in sort of
surprising ways.
Speaker 2 (07:01):
I have a couple of listener questions, okaya time, as
long as they're pertinent to this story.
Speaker 5 (07:05):
Yes, so listener rights, in what happens if you take
the pill and you're in shape, which is I think
a good question because a lot of people, especially you know,
like on the Upper East Side. Yeah, they are already skinny,
but they want to take it anyway.
Speaker 6 (07:18):
Right, Well, I mean that's the thing is like doctors
shouldn't be prescribing these drugs because it is it's a
prescription drug.
Speaker 3 (07:24):
But is it a problem to you stop eating and
then you become like anarexic.
Speaker 6 (07:27):
Or I mean you that it could be dangerous, Like
if you don't need to lose that much weight and
you're on a weight loss drug that's really effective, probably.
Speaker 5 (07:35):
Not leads well into the second question, when do these
become over the counter and affordable.
Speaker 6 (07:42):
Well, that's a good question. Yeah, I mean they're probably never.
I mean I don't want to say never, but they
are prescription drugs, so they're not over the counter. But
generic drugs eventually will.
Speaker 4 (07:53):
Come down the pipeline.
Speaker 6 (07:55):
We're already seeing like some of the older GLP one drugs.
The first sort of wave of these is like sex Senda,
which is a drug called layer glue tide that's already
on the way to becoming generics, so.
Speaker 4 (08:07):
It's a better name too.
Speaker 3 (08:11):
Or sex start.
Speaker 2 (08:12):
Okay, all right, I'm gonna put you on the side
for a moment, so go back to your story because
it's really cool. You guys, it was several reporters involved
in it, and you really get into the specific specifics
of the people there. How did you find it though?
Speaker 6 (08:24):
Yeah, so, I mean we worked with the data team,
and we worked with this analytics firm called Purple Lab,
and they gave us three zip code level data, which
you know kind of gives you like a city and
then the surrounding area. So we looked all across the US.
We wanted to see what the ozembic hot spots were.
And you know, Bowling Green wasn't the only one that
came up in the data. There was Huntsville, Alabama. There
(08:45):
was like a few other areas, but Kentucky as a
state has the highest concentration of weight loss drug users.
So we were like, this is probably a good place
to start. Clearly stands out in the data. And then
once we started talking to people in Bowling Green, it
was like, Okay, this is our spot because everyone here
is either on the drugs or nos like five other
people that are on them.
Speaker 2 (09:06):
I mean, can we make the assumption that's just an
area where there's a fair amount of people that are overweight.
Speaker 4 (09:11):
Yes, yeah, definitely.
Speaker 5 (09:12):
I mean you can make as someone who's been there,
you can definitely make that assumption.
Speaker 4 (09:16):
To be care Yeah.
Speaker 2 (09:17):
Yeah, yeah.
Speaker 6 (09:18):
I mean the obesity rates are high there, the diabetes
rates are high there, and in Kentucky across the board.
So it's actually a good thing that there's a lot
of people taking these drugs in that area, because you know,
it means hopefully it's helping with.
Speaker 3 (09:30):
Not just Kentucky.
Speaker 5 (09:31):
I mean, you get off the airplane at CMH and Columbus, Ohio,
and you notice that immediately as well. But there is
a great line in your story by one of the
women who knew it. Yeah, she says, we're redneck enough.
Speaker 6 (09:44):
What she's saying, she said, we're redneck enough to be fat,
but smart enough to do something about it.
Speaker 3 (09:49):
She's been owning it.
Speaker 2 (09:50):
Yeah, I mean, listen, I mean, I think it's been
an incredible game changer for a lot of people in
their lives who struggle. And there are people who struggle
with being over and We've tried a bunch of different
things and I've seen it firsthand with individuals and then
they take this drug and it's just unbelievable the difference.
Speaker 6 (10:08):
Right, And I mean, that's that's the big thing with
these drugs is there's also been this changing understanding of
obesity as you know, a biological health condition that's driven
by someone's biology. That's not necessarily just because you know
these tropes that have long been repeated that someone's lazy.
Speaker 4 (10:27):
Or that they're eating too much.
Speaker 6 (10:28):
Like, there are biological mechanisms driving this, and the these
drugs help with that. So it's it's for people who
need them. It's an absolute game changer.
Speaker 2 (10:37):
What surprised you about like going there.
Speaker 4 (10:40):
And talking to these people? I mean, I that's a
really good question.
Speaker 6 (10:44):
I like didn't have a lot of I don't know
understanding going in because that was my first time in Kentucky.
Speaker 4 (10:51):
So I was like, eh, I don't know what this
is going to be like.
Speaker 6 (10:53):
And everyone was so willing to talk to us and
share their stories and like they were so grateful for
these drugs. But I think that maybe this is the
thing that surprised us is like everyone had this great
success at the beginning and then something happened, either their
insurance cut them off or they couldn't find the drugs
(11:15):
anymore because of supply shortages. And I guess that shouldn't
have surprised me because those are all themes that we've
been reporting on for a long time.
Speaker 5 (11:22):
But you're saying if they stopped taking the drugs, they're
no longer successful.
Speaker 6 (11:25):
Well no, not necessarily, but and like they have found
other ways to continue taking them. But I think I
was surprised to keep taking.
Speaker 3 (11:32):
The drugs and they're still successful. Yeah, but if you
stopped taking the drugs.
Speaker 4 (11:37):
Then oftentimes you gain the weight back exactly.
Speaker 6 (11:40):
I mean, that's not something that we saw with the
people that we spoke to, because they all were able to,
like one guy switch to another drug, someone else started
taking a compound of drugs. So, but I think it
was surprising to me that, like everyone across the board
that we talked to encountered one of these issues with
accessibility or with you know, supply shortages or price or
something like.
Speaker 4 (12:00):
It really is just affecting people.
Speaker 7 (12:02):
I mean a lot.
Speaker 5 (12:04):
It strikes me as obvious that if it's one thousand
dollars a month and an extremely short supply, it's gonna
be difficult to keep paying for it every month and
keep finding it yeah. Yeah, and if you stop taking
the drugs for the most part, you put the weight
back on. Yeah, unless you start taking the drugs again, right, Yeah.
Speaker 2 (12:23):
Are most of these people though? Is insurance paying or
how much was out of pocket?
Speaker 6 (12:27):
It was most of the people insurance was paying at
the beginning, and then like six months in or once
they lost a certain amount of weight, insurance stopped paying
for them. Some people went to these compounded off brand.
Speaker 4 (12:41):
Drugs that we've talked about before.
Speaker 6 (12:43):
Other people were able to, like one guy switched from
ozempic to Manjarro because his insurance would cover Manjarro but
not ozempic. So like everyone was able to continue taking
the drugs for the most part. But I mean Pat Stiff,
who's one of the characters in this story, Like he
switched from ozempic to Manjarro and then couldn't find his
Manjaro anywhere because the supply shortages were so bad. So
(13:05):
he was, you know, as we're like finishing up this story,
calling me and saying that, well, I'm just gonna have
to go off the drug and see what happens, and
it'll be like an experiment. Hopefully I don't gain the
weight back, but yeah, it's it's a struggle I.
Speaker 2 (13:19):
Think for a lot of people, a slice of life.
I just want to go to the Pasha salon. Yeah, no,
but it's just interesting. Yeah, and I do wonder you know,
at some point does the medical community say that you
because we've talked about this, do you have to be
honest for the rest of your.
Speaker 5 (13:31):
Life unless benefits, in which case you don't write that's
my problem.
Speaker 3 (13:36):
I just have no willpower, which is why I want
the drug.
Speaker 2 (13:39):
Yeah, I don't know. I don't know.
Speaker 6 (13:40):
Like that's not always about willpower, Like it's a for
a lot of people, a biological thing that drives them
to eat that you you know, it's not as easy
as rise.
Speaker 3 (13:48):
And eat like high calorie, no low nutrition.
Speaker 4 (13:51):
Food sometimes yeah, I know I.
Speaker 3 (13:56):
Need a frosty you know.
Speaker 2 (13:57):
No, you're not gonna anyway. It's it's you know, these
are one of those stories, a slice of life, but
just something that we talk about so much, but to
see it kind of so dense in terms of the
amount of usage and so on. Great stuff is always
thank you really appreciate it.
Speaker 3 (14:14):
Amazing story we've forgotten and you serve they doing bowling green.
The most important thing they make the Corvette.
Speaker 4 (14:20):
Yeah, Hot Stiff works at the Corvette Corvett.
Speaker 3 (14:24):
You know Plant, It's amazing you left up for the end.
I love the car.
Speaker 2 (14:28):
Madison Muller, You survived with Matt.
Speaker 1 (14:32):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple Car Play and ed Broight Auto with a
Bloomberg Business at or watch us live on YouTube.
Speaker 2 (14:46):
Hey, listen, we want to get to a stock. It's
been the number one decliner in the S and P
five hundred and Nasdaq one hundred. Today we're talking about
Warner Brothers Discovery plunging to its lowest ever parent of
CNN and TNT posted a second quarter charge of nine
point one billion dollar after writing down the value of
its traditional TV networks. Has came after the closing bill yesterday.
The companies you know, created back in twenty twenty two
(15:07):
when Discovery acquired Warner Media, and it's concluded that cable
channels like CNN and T and T are no longer
worth what they were when that forty two billion dollar
merger was completed. So let's get to it with Bloomberg
Intelligence senior media analyst Kevin Near. He's joining us here
in our Bloomberg studio. Well, it's never good.
Speaker 3 (15:27):
You've got it, not for Warner Brothers Discovery.
Speaker 2 (15:30):
When you've got a more than nine billion dollar write down?
What the heck happened? Why are we here?
Speaker 7 (15:36):
Yeah, it's a great question. I mean, it's it's certainly
not just Warner when we're talking about traditional media in general.
It's a very transitory period. But you're right, I mean
that nine point one billion dollar write down that's from
the TV networks, right, that's that's essentially saying that, you know,
we don't see that this is valued in line with
wre our market cap is, and we have to take
this down in the book value. They're obviously trying to
(15:57):
scale up their streaming, but the TV networks are still
the brend butter. That's where they make the majority of
their profit. And it was a big mess. You know,
advertising down ten percent, There was there's a pressure on
affiliate fees obviously with cord cutting, and then on the
studio side as well, it was weaker than we expected.
So the stock is noticeably down to I.
Speaker 5 (16:14):
Feel like there's something I'm missing here, Like this part,
like like like John Malone and these corporate titans are
destroying shareholder value.
Speaker 3 (16:23):
For a reason.
Speaker 5 (16:24):
Like you know when when when Zaslov came in and
said they'd already made back Girl, right right, and he
just said, I'm going to erase this content. And he
did it with Coyote versus Acme, and he did it
with a lot of content that you would think is
even some Sesame Street episodes were just disappeared, right, And
the reason was he gets some tax benefits from just
(16:46):
dumping this content that they paid so much to make.
Is he just trying to shrink this company? I mean
they borrowed what forty billion dollars to buy this from
AT and T and now the market cap is like
eighteen billion. The stocks lost seventy percent of its value.
Does he get paid more as the stock does worse?
Speaker 7 (17:08):
Yeah, I can't speak to his pay, but.
Speaker 5 (17:10):
Well you know that he got paid fifty million dollars
last year, right, right?
Speaker 3 (17:14):
What did he get when he came in?
Speaker 7 (17:16):
It was it was some crazy ben It was one
hundreds of.
Speaker 3 (17:18):
Millions, two hundred and yeah, thirty million.
Speaker 7 (17:20):
It was quite high.
Speaker 2 (17:21):
So the purchase bad deal.
Speaker 7 (17:24):
It's tough to say it's a bad deal at this point.
I mean we have to zoom out a little bit
and think again about you know, the combination here. Obviously,
all of media is facing these challenges. It's not just
Warner Brothers Discovery, but you know.
Speaker 3 (17:35):
They do it. Yeah, Discovery was doing just fine.
Speaker 2 (17:38):
No offense. We've been talking about ESPN having issues for
a long time, right, and then it seems to have
kind of writed maybe as it's moved more into into streaming.
But having said that, two years ago, we knew the
model was changing, Right, why would you do this then?
Speaker 5 (17:51):
Right?
Speaker 7 (17:51):
I mean the model has changed, and also Wall Street's
attention has changed. You know, back then, people were focused
on subscriber growth and people were spending to grow subscribers,
and it was all fine when when that was the case.
But after you know, Netflix posted their first subscriber to Cline,
everyone went, whoa hold on? You know, maybe subscribers aren't
the metrics that we should be looking at. This isn't
the north start. We need profit we need profitability, and
(18:11):
it's taking longer than we thought for these streaming services
to scale up. They're starting to inflect.
Speaker 5 (18:16):
But he said yesterday on the call, am I disappointed
that the trends and the linear business haven't been.
Speaker 3 (18:23):
A little better.
Speaker 5 (18:24):
There has been talk about a recovery a year, year
and a half ago. It has really happened. It is
what it is. We're managing this as best we can.
Speaker 7 (18:30):
Right, and we can talk about this passport or all
we want. But I think you know where investors concern
line is on the lack of visibility, right. I mean,
this whole NBA debacle has been really ahead.
Speaker 3 (18:41):
So let's let's get into that first step. So for
those who don't know how did they.
Speaker 7 (18:45):
Lose this, it's it's it's been quite the saga.
Speaker 5 (18:49):
They had NBA games, which is the kind of thing
that it doesn't matter where it is.
Speaker 3 (18:52):
It's just like you tune in.
Speaker 2 (18:54):
That's right, you're going to pay for it.
Speaker 7 (18:56):
You're going to do whatever you have to do exactly.
And they had an opportunity to negotiate for exclusively. But
if you just look at sports, right, it's not just
the NBA, I mean talking about the NFL. Those rights doubled, right,
So it's a cost problem. Everyone across media is trying
to cut costs right now. Warner thought they could get
for a smaller package maybe, but the NBA wanted wanted
a broadcast partner NBC, they wanted to stick with the
(19:17):
ESPN and then them bringing in Amazon for the streaming service.
So it's just been a back and forth right now.
Speaker 2 (19:21):
So if they hadn't lost that, would you still be
having some kind of conversation about Warner Brothers right now?
Would it have been a smaller.
Speaker 7 (19:28):
Yeah, that's yes, I think so. I mean again, the
quarter is the quarter, but really it's the question of
what's going to happen with CNC, you know, with this
big hole in their programming schedule, and they can go
after some other sports rights, maybe the UFC. Those renewals
are going to come up soon. But it's a tough
position that they're in and now that it's a going
to court.
Speaker 2 (19:45):
David Zazov also said on the call with investors yesterday,
two years ago, market valuations prevailing conditions for legacy media
companies were quite different than they are today. This impairment
acknowledges this and better aligned our carrying values with our
future outlook.
Speaker 4 (19:59):
Is he right?
Speaker 2 (20:00):
Were they that much different?
Speaker 7 (20:02):
Yeah?
Speaker 2 (20:03):
You know, that's follow the industry.
Speaker 5 (20:05):
It's a great question from another number of people that like,
near the end of the pandemic, we thought this was
going to be okay, or these assets were to be worth.
Speaker 7 (20:13):
More, right. I mean, there's just so much content out
there now. You gotta understand. I mean, you know, engagement
is really where investors want excuse me, management wants investors
to look at it. You know, where people are spending
time on our platform. They're going to continue to pay.
Speaker 2 (20:24):
For our warehousehold. That's whittling. We just canceled something yesterday.
We're not really using it. We had it for, you know,
curb your enthusiasm something.
Speaker 5 (20:31):
Sorry, but of course you have k by the way,
that's HBO, which is like an amazing, amazing property.
Speaker 3 (20:38):
They changed the name of HBO men Max to Max.
Speaker 5 (20:41):
That's like if you had Disney Plus changing the name
to just Plus.
Speaker 3 (20:44):
I know, why wouldn't they do that?
Speaker 7 (20:45):
Consumers wonder why they can't anything.
Speaker 2 (20:47):
But my point is like we're looking at it this
huge menu, and we find ourselves maybe looking at a
couple of things. I don't know that I need that
monthly everyone, you know what I mean, You just get
to a point where you start to kind of curate
if you will, or just say do I need this
extra ca A.
Speaker 7 (21:00):
Lot of people are thinking about it that way. You know,
streaming services almost all of them have announced doore or
implemented price increases this year, and then those that haven't.
You know, Netflix is the big standout. They're cracking down
on password sharing, right, so it's becoming more expensive to
stream and the play is really advertising, right. They keep
a low entry cost for advertising because they want people
to sign up for that year.
Speaker 2 (21:20):
Matt and I were talking in the newsroom. I mean, Kevin,
wasn't Discovery kind of a nice little business. It was
very niche, it was, but very clear in terms of
what it was all about.
Speaker 7 (21:30):
Very low cost programming. You know a lot of unscripted
You think of Food Network and HGTV and again when
you know we had such a critical mass of PATV subscribers,
it was great. It was a great, healthy business, healthy
free cash flow. And it's just not the case anymore.
You know, core cutting is not slowing down, and the
question is just how how do we get our content
and then monetized in the best way possible.
Speaker 5 (21:52):
This has been kind of a cursed asset to be fair, right,
AOL Time Warner was the biggest deal of all time when.
Speaker 3 (21:59):
We were kids.
Speaker 5 (22:00):
And then you know, they had to write off AOL
completely at and T came and bought it for half price,
you know, and then they sold it to half for
at half price to Zaslov. And I mean, who's gonna
buy this thing for half price?
Speaker 7 (22:16):
Now? I mean, you make a great point, but I
would also point back to you know, it has some
great assets. You know you mentioned HBO.
Speaker 3 (22:23):
It's called Max now.
Speaker 7 (22:24):
It's called Max now out they have a really world
class studio. I mean, this is a company that makes
Superman movies, Batman movies. Again, they own to made Barbie,
or they made Barbie. You know, they wouldn't have Barbenheimer
without Barbie.
Speaker 2 (22:38):
I still love Barbie.
Speaker 5 (22:40):
The reason we had Oppenheimer, by the way, at a
different studio was because the director could no longer deal
with this studio.
Speaker 7 (22:48):
Chris Allen was shopping around to Oppenheimer.
Speaker 2 (22:50):
You're sitting down with Zaslov. We've only got about twenty seconds.
What do you ask him? What do you want to know?
Speaker 7 (22:55):
What's going to happen after this? NBA, whatever you're doing
in trying to city enda, what's going to happen after that?
Speaker 3 (23:01):
He says, it's with the lawyers.
Speaker 7 (23:02):
Now, yeah, exactly, exactly, all right with the lawyers.
Speaker 2 (23:07):
All right, Kevin Near, thank you so much. Bloomberg Intelligence
Senior Media Associate analyst, joining us right here, this on
a day when we are just watching the shares of
Warner Brothers Discovery, just sink.
Speaker 4 (23:16):
This is Bloomberg.
Speaker 1 (23:19):
You're listening to the Bloomberg Business Week Podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and Android Auto with the Bloomberg Business app. You
can also listen live on Amazon Alexa from our flagship
New York station, Just say Alexa playing Bloomberg eleven thirty.
Speaker 2 (23:37):
So I'm s that caught my attention, our attention. Some
proposed rules how they could This is proposed rules for
disclosing when AI generated content appears in radio and TV.
Political ads have spurred some debate over whether the Federal
Communications Commission is the best government agency to regulate on
the topic. I mean, people have been talking about like
(23:58):
who oversees it?
Speaker 4 (23:59):
What's the matter?
Speaker 2 (24:00):
What are you lost?
Speaker 3 (24:01):
I've lost.
Speaker 2 (24:02):
We're talking about rules when it comes to AI generated
content and who needs to oversee it to make sure
that things are accurate, whether it's in politics or in general.
Are you lost?
Speaker 5 (24:14):
Yeah, because I don't think you can make such rules.
If I create AI on the computer in my basement,
who's going to oversee me?
Speaker 2 (24:19):
I don't know, but maybe somebody should if it's inaccurate
or false misleading that leads to I mean, it.
Speaker 3 (24:24):
Will be inaccurate and possibly misleading.
Speaker 7 (24:27):
Let's see what our next probably say.
Speaker 2 (24:29):
Greg Petro was with us, CEO of the retail technology
company First Insight. He's going to save us. Joining us
from Pittsburgh, Pennsylvania. He's the author of The Tyranny of Now,
How Technology Impairs Good Judgment and what you can do
about it, his book out last month. As I mentioned,
joining us from Pittsburgh. Good to have you here with us.
As you can tell, we're having a little bit of
a debate, little conversation here maybe right now. First of all,
(24:51):
remind the world what your company exactly what you do,
especially when it comes to helping retail customers find their customers,
a communicate with and interact with those customers.
Speaker 8 (25:03):
Great to be with you, Carol matt So. First Insight
is a company that we've been around for seventeen years now.
Our global company software company helping retailers, brands, and manufacturers
understand consumer needs and demands. We create a space in
predictive analytics, using AI and Voice of the customer to
(25:25):
understand specifically what consumers want in the products and services
that those companies offer. So it really is about closing
the gap between what the consumer, where the consumer sits today,
especially in a very dynamic world, and where those decision
makers sit every day, and in many cases they're making
(25:46):
those decisions six to nine months twelve months in advance,
and it's our goal to help them close that gap
and make better decisions.
Speaker 5 (25:56):
So, which are the new technologies that I mean? If
you tell me new technology is making decision making harder,
I would agree with you wholeheartedly, And I instantly think
of social media. Which technologies are you talking about?
Speaker 8 (26:14):
Well, I'm talking about when I speak about the tyranny
of Now in the book that I've written, it really
refers to the entire platform of technology, the advent of
the Internet, social media, smart devices, and the inundation of
data to each of every one of us, whether we're
a consumer or a decision maker, and each one has
(26:37):
a challenge related to a benefit and a challenge, Matt,
and at the same time we're driven off this immediacy
of right now, let's make a decision, answer me right now.
You know, we confuse oftentimes response rate meaning to a text,
to politeness. Right Is that responsiveness actually going to improve
(27:04):
anything in that decision making or that discussion. I write
quite a bit about that in the book, and I
think that when you look at it, you have to
actually break it apart each.
Speaker 5 (27:17):
It makes perfect sense, though, I mean the fact that
we're all reachable and everybody's texting me. You know, in
the past, I would talk to my mom on the
phone once every couple of days. Now she's texting me
two or three times a day and always asking me
to make a decision that I feel like I have
to answer immediately right And you're saying that pushes me
(27:40):
to maybe make the wrong decision sometimes.
Speaker 1 (27:44):
Yeah.
Speaker 8 (27:44):
I write about it, calling it snap decision making, the
need for us organizationally and companies and at the same
time individuals responsivity, the need for us to give an answer,
immediate lead without pausing before hitting the send button. I
write a great story about the example of the Southwest
(28:07):
CEO and what that caused when he hit the send
button prematurely, and many other examples. You know, during COVID,
the decision making that many individuals made about the housing
moves and the housing purchases that they made in those
snap decisions from moving from inner city out to suburbia
or even further away states, not considering the fact that
(28:31):
housing prices have risen so quickly, and how are they
going to you know, regain their money if they wanted
to resell their house. So I think that's one aspect
of the problems of the tyranny of now that I
write about that has caused a decrease of thoughtful decision making.
Speaker 3 (28:51):
Does the tyranny of right now? I get the rush
to make a decision?
Speaker 9 (28:55):
Yeah?
Speaker 2 (28:55):
You know, somebody tweeted out xt out whatever the heck
you want to call it, something about patients this morning
online and I was like, amen, you know, there is
no patience. There is like if you don't take care
of something right away, this ability to breathe. I think
about how we approach companies sometimes, right you know, sometimes
they have to invest. Sometimes they're going to have a
(29:17):
bad quarter because they're thinking about the future and the
future investment. So how do we though get away from this.
Speaker 8 (29:23):
Well, I think you first need to think about all
the aspects that are creating problematic stages to that decision
making the concept you talked about it earlier in social
media feeds, I mean most recently, the Surgeon General wrote
about and created a warning on social media. I thought
that unheard of, basically our Surgeon General warning the public
(29:48):
that that could be a challenge for our society. And
part of that is created not only bias in confirmation bias.
The feeds that we're getting are you know, reaffirming things
that we believe, but not necessarily giving us a full
viewpoint tribalism we talked. I talk about that in the
(30:09):
book where it's about micro segmentation, which is great. You
can find friends in small communities and forums like you know,
vintage car racing that I enjoy or whatever that nuance
is that you appreciate, but also it feeds that segment
of information when you think about it on a geopolitical sense,
(30:29):
that represents a lot of risk and that leads it's.
Speaker 2 (30:33):
Funny and media. Because I think about Matt, if you
think about go back years ago when we were doing
shows together, I feel like we used to do a
lot more debates, whether it was on the markets it
was a bare bull debate, or we would talk about
a company and you'd want somebody from different sides a
political issue, some kind of issue. You'd want a conservative
and a liberal voice, and the idea was to present
(30:53):
the different sides. And I don't feel like, I.
Speaker 3 (30:55):
Don't know, no, don't do that. It doesn't go chamber.
Speaker 5 (30:58):
I mean, if you look at well, I'll get give
you an interesting example. The other day, I was looking
through my Twitter feed or my ex feed and thinking
to myself, I've got to unfollow all of these people
with whom I constantly agree. What's the point I only
want to follow and look into like the nutcases that
(31:21):
I think are crazy? Is that the right approach?
Speaker 8 (31:24):
Greg Well, I think, you know, I'm not sure I
would say that, but I think that diversity of points
of view are clearly necessary when you think about it,
when you're looking at that echo chamber you refer to,
or what I refer to as tunnel vision, right, it
is that confirmation bias is feels good. It's a lot
(31:45):
of dopamine hits, you know. I mean, it's been documented
pretty clearly that we like that as humans. But the
reality is it doesn't give us the blind spot coverage
that we need to look at all of the information
and when you're making decisions about events, and so maybe
it's following not just the people that you like, but
(32:08):
maybe the people that you disagree with and understanding their
point of view.
Speaker 2 (32:13):
Hey, real quickly, only about thirty forty seconds. So do
you think speaking about big decisions of the last few weeks,
President Biden made a really big decision he took time.
Do you think he took time?
Speaker 8 (32:24):
Well, that's one of is right. You've got to be
you've got to slow down. No matter what you're going
to do, you've got to be able to slow down,
set yourself aside, pause for a minute and reflect on it.
Number two, you've got to get diversity of opinion. Hopefully
he did. And the third is to focus. And in
order to focus on anything. You know, IQs have been
dropping forty straight years. It is necessary for us to
(32:49):
get away and focus on the task at hand in
that environment in order to make good decision making. And
we write about that in the book. So hopefully there
are some key ways there that everybody can use.
Speaker 2 (33:03):
Super interesting conversation. Look forward to you coming back again.
Speaker 3 (33:08):
Reading the book.
Speaker 2 (33:09):
Yeah, Greg Petro Tyranny of Now, Yeah, exactly, Chief executive
officer at First Insight. As you said, the Tyranny of
Now is his new book that is out. Really appreciate it.
Speaker 1 (33:19):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from two to five pm Easter. Listen
on Apple car Play and Android Auto with a Bloomberg
Business app, or watch us live on Youtubemco Journal.
Speaker 5 (33:38):
Now about you let me drive?
Speaker 7 (33:40):
Oh no, no, no, no, please go on, honey, please, gravels.
Speaker 2 (33:46):
I want to try.
Speaker 6 (33:47):
It's a good question.
Speaker 1 (33:54):
This is the Drive to the Clothes doing well by
shut it down on blue Bird Radio.
Speaker 2 (34:01):
All right, everybody, just about eighteen minutes left in today's
trading session. You heard Charlie breaking down the trade here.
We're just kind of off our best levels of the session,
but man, we've got a pretty decent rally here.
Speaker 3 (34:11):
Matt, Yeah, no, absolutely.
Speaker 5 (34:13):
I mean the jobless claims number that we got this morning,
and I just struggle with this because it was two
hundred thirty thousand and we were looking for two forty,
so beating by seven thousand layoffs is that really what
it's all about. But it's not just the beat. It's
also the fact that it was better than the two
hundred forty nine thousand in the prior period.
Speaker 2 (34:34):
The revision was just a hair up.
Speaker 5 (34:37):
Yeah, pretty much unchanged, but that was enough to send
us off to the races. So yesterday we were up
and then down into the clothes. Today we're up and
not down into the clothes, at least not yet. And
we still and we only have eighteen minutes to go.
Speaker 2 (34:48):
Yeah, so we'll see what happens. Let's see what our
guest has to say. Jason Bronkhetti is with US chief
investment officer over at Lincoln Financial. They had three hundred
eleven billion dollars an end of period account balances net
of reinsuring as of the end of June. Joining us
here on this.
Speaker 3 (35:05):
Thursday out of bradn Or, Pennsylvania.
Speaker 2 (35:07):
Thank you very much. Yes, I need a little bit
of an assist today, Jason. Good to have you here
with us. It's been quite a week. Uh, and here
we are. How are you thinking about the last four
days maybe and then even going to the tail end
of last week.
Speaker 10 (35:20):
Yeah, you know, it's first of all, thanks for having me.
It's great, great to be here with with both of you.
You know, we uh, you know, we had been anticipating
that there was, you know, a likelihood or possibility that
we could we could see some some bumps in the market,
and clearly we saw that uh late last week with
the employment news.
Speaker 5 (35:36):
Uh.
Speaker 10 (35:36):
You know, as we're as we're looking through that, you know,
one data point does not make uh, you know, an
economic story necessarily, but it was an important data point.
Speaker 9 (35:43):
And we've been operating running along here with.
Speaker 10 (35:45):
Particularly low volatility, uh for for quite some time that
I would say that was really the aberration. So seeing
a little bit of volatility was something that we're just
trying to let clients know that this happens, This is
not an atypical amount of volatility, and we've now seen
a bit of economic data to prove that out. To
the points you were making earlier about some of the
employment data, I think as we see a little bit
(36:06):
a few additional data points here, start to see things
turn around a bit, so so view this more as
a consolidation as opposed to something more extreme.
Speaker 5 (36:12):
Were you bullish before this, you know, last week long period,
Because as far as I can tell everything has played
out kind of exactly as we expected. We knew it
was going to be a good earning season, and it
has been a good earning season. We knew the labor
market was going to soften, obviously, the Feds raised indust
(36:33):
rates by five hundred and fifty basis points, and the
labor market has softened a little bit.
Speaker 9 (36:37):
Yeah.
Speaker 5 (36:38):
The only sort of unexpected twist was the Bank of
Japan raising rates and spooking traders that were that had
borrowed in yenep and bought higher yielding assets. But that
seems to have unwined and the Bank of Japan got dubvish.
So if you were bullish before last week, you should
be bullish now.
Speaker 9 (36:59):
Yeah.
Speaker 10 (37:00):
You know, we as we came into last week, we've
been a little bit more balanced in our view. I
would say, I think we are starting to see some
of the long invariable lags of the restrictive monetary policy
come into play, and valuations are obviously elevated.
Speaker 9 (37:11):
I think that the you know, the economy though, remains
pretty well in balanced.
Speaker 10 (37:14):
So I do think if you were bullish before, you
shouldn't have changed your view much coming out of that.
I do think that, you know, seeing the employment data
points softened, seeing the seeing some of the other statistics
start to soften a little bit, it does give reason
for pause. So again, just more of a generally balanced
view on things. To your point about about the end,
I mean, obviously we've seen that was one of the
(37:34):
one of the things that came in and just spook
the market pretty significantly. But to your point, we're seeing
that that bait and JP Morgan had to report out
this morning doing the math there, seeing that much of
that carry trade has now been on wine unwound. So
I do think that, you know, we set ourselves back
up in a pretty good, pretty balanced position.
Speaker 2 (37:50):
Hey listen, Jason, you guys are just out with a
new report that basically gets into kind of the things
that are top of mind for investors, what they're really
concerned about. I feel like at Bloomberg we talked about
a lot of things. Certainly it's what the FED does
with the economic outlook, does geopolitics? What did you guys
find out?
Speaker 10 (38:08):
Yeah, So the one thing about Link, we we have
a really unique and robust multi manager platform. You mentioned
the three hundred billion dollars or so that we have
in assets, and we manage that with a part of
a whole bunch of partnerships, great asset managers out there,
and then we bring our insights out to the seventeen
million consumers that invest in and purchase our solutions. So
(38:29):
one of the things that we do is we take
the views from those seventeen million customers or really the
sixty thousand financial professionals that are calling on them, and
we ask them, what are the questions that you're getting
or we get those questions, we try to distill that down.
So we take all the broad views that we get
from our managers and we distill that down into kind
of a sixty page chart book, kind of a best hits.
Speaker 9 (38:49):
And we also come.
Speaker 10 (38:50):
Up every quarter with three key themes that seem to
be on the minds of investors, and so each quarter
we do that, and so most recently the themes have
been really around what happens to marrow markets during an
election year. There'd been also a vocal minority suggesting that
the FED might not act in an election year.
Speaker 9 (39:08):
What would the FED do an election year?
Speaker 10 (39:09):
I think that's been asked an answer, but that's the
question that's been on folks minds.
Speaker 9 (39:13):
And then the third point is just what's gonna what's
gonna happen with rates, and what will drive the FED
to act.
Speaker 10 (39:19):
So those are really the three themes that I'd say
have been on the minds of most investors throughout the
throughout the year, and really more so in the second quarter.
And again some of that's been answered, and the narrative
has changed a bit in the last week given the
volatility that we've seen.
Speaker 5 (39:31):
But the other thing that you have your finger on
the pulse of is and I just know my financial
advisor knows at any given time how broke and overstretched
I am financially. How does it look for your clients,
because we're starting to see, you know, fewer bookings with
trip Advisor, fewer bookings with Airbnb than maybe we expected,
(39:52):
you know, visitors to Disney they're growing, but not as
quickly as the investors would like, and more people are
staying at home and ordering Disney Plus.
Speaker 3 (40:01):
So do you see investors kind of trading.
Speaker 5 (40:04):
Down, holding off on bigger purchases, you know, maybe a
little bit more conservative, I mean consumers.
Speaker 9 (40:10):
Yeah, we're seeing we're seeing a little bit of softening.
Speaker 10 (40:12):
But I do think you know, the way that the rates,
the impact of our rates has played out, I do
think it's had a disproportionate impact on the less affluent consumers.
Speaker 9 (40:22):
So we're seeing a bit more kind of trading down there.
Speaker 10 (40:24):
I think at the less affluent level, some of the
folks that the more of the mass affluent folks that that
tend to be purchasers of our of our solutions, not
really seeing any any pullback there. And when we look
at a lot of the coincident data, look at the
you know, the travel bookings and and as well restaurant.
Speaker 9 (40:40):
Bookings, some of those statistics still look pretty good.
Speaker 10 (40:42):
So so softening perhaps at the margins and particularly at
the less affluent end of the marketplace, but big picture,
we're still seeing still seeing reasonable spending out of the consumer,
reasonable views in terms of the markets and and allocation
of capital.
Speaker 2 (40:57):
So somebody comes to you, got a chunk of money
to invest, Where do you tell them to put it
right now?
Speaker 9 (41:03):
You know? So we're really focused on the long term.
Speaker 10 (41:06):
So we think about it it's best to put to
invest in preparation as opposed to prediction, and so that's
one of the things that we focus in on is
making sure that folks have a good long term plan
and they stick to that plan. And so that's one
of the big things that we're focused on, is just
thinking about protection and being prepared because there are going
to be issues where things come down. You know, we
(41:28):
offer a lot of solutions around registered index linked annuities,
for example, that provide a degree of protection to the
extent that you see some downturns in the market, but
also give you that opportunity to invest and get some appreciation.
So I'd say solutions like that across the really the
annuity and the insurance landscape provide a fantastic way to
(41:49):
have both the appreciation as well as that downside protection.
Speaker 2 (41:51):
All right, we're going to run. Hey, listen, thanks so much.
Jason Broketti. He is chief investment Officer at Lincoln Financial,
joining us from Radnor, Pennsylvania.
Speaker 1 (41:58):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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afternoons from two to five pm Eastern on Bloomberg dot Com,
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