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Speaker 1: This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus gloom O Business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. I want to talk a little bit about what's going on with Apple. It's pretty much the biggest tech story out there. The company, just days away from a US ban of its smart watches, is plotting a rescue mission for the seventeen billion dollar business that includes software fixes and other potential workarounds. Here's what's going on. You got engineers at the company are racing to make changes to algorithms on these Apple watches that measure a user's blood oxygen level. Now, you'll recall from our coverage yesterday, this is a feature that Massimocorp has argued in fringes its patents. Apple engineers are adjusting how the tech determines oxygen saturation and presents the data to customers. This according to people familiar with the work that reporting. Our next guest, Mark German. He's chief technology correspondent for Bloomberg News. He joins us on zoom from Los Angeles. Mark, You've been all over this story over the past couple of days. Where are we at just after four o'clock here on the East Coast. Yeah, thanks Tim for having me. We are in the same place we were yesterday. We were in the same place we were when this band was announced back in October by the ITC, the International Trade Commission. There's been no movement. It doesn't appear that the Biden administration or the US Trade Representative Catherine Tie It's any closer to vetoing. There does not appear to be any imminent settlement between Apple and Massimo, and Apple is probably at least several weeks away from being able to deploy that software fix we talked about, And it's also unclear if the software fix will even be approved the US Customs Agency, which monitors what's to being imported and expert into the US, they have to approve this fix, and if they don't believe, or if Massimo provides good evidence that the software fixes not fix the patent issue, we can be in this issue for the long haul between Apple and also well. One thing that I learned from your reporting today was the fact that Apple engineers are working on this update to the software, which came as to a surprise, came as a surprise to me Mark because I thought this was a hardware issue, not a software issue. I thought this was about a sensor that's on the watch, not about software that powers the sensor. So give us the details there. You're absolutely right. It's nothing to do with software. This is a hardware issue. The patents in question relates specifically to the arrangement in the back end technologies and led lights at the bottom of the Apple washers, a special red light that shines through the bottom of the watch to non invasively go into your skin and read how much oxygen is in your blood. And that's the patents that Mosimo holds. These are the patents that are being disputed right now that Apple has infringed upon. So it is a software issue. But the way it has been explained to me by people who are involved in patent law and in the patent world, not from Apple and Massamo, is that technically that hardware could be disabled and is controlled by the software, So that might be a workaround until Apple's able to shift the actual hardware in the Apple Watch casing and a subsequent generation and that is likely what Apple is banking on, because needing to redesign the entire watch hardware plus those algorithms, that could be a several month process, and quite honestly, it would be a big money loser for Apple compared to probably the few hundred million dollars we need to pay out Massamo. My take is that Apple sees that money from Massamo with some sort of ransom. They don't want to set the precedent of paying out what they consider it to be a patentrol. Masimo and many others believe that they're in the right here. Clearly, the ITC has seen a lot of cases, and given all of their experience, they still sided with Masamo. So there's probably a lot going on here in Massamo's favor. So you write that they plan to stop selling the prohibited watches on their website on Thursday and then pull all of them from their roughly two hundred and seventy brick and mortar Apple outlets by December twenty fourth. I mean, how much is this going to hit Apple's profits ahead of the holiday season. I imagine there were a lot of people who were planning on last minute scooping up these watches. I'm sure a lot of people who wanted to get Apple watches for the holiday season, they already did their shopping. The news is out. If you want an Apple watch for Christmas, you have to get it before Christmas. Right, People probably aren't doing their Christmas shopping on December twenty sixth. There're a lot more than reopen because they're closing the twenty fit anyways. Right, So I don't think that this is going to impact Apple's revenue for the first quarter. I think this is going to impact Apple's revenue probably for the second and third quarter. And given that this is US only and it's only within Apple's first party retail channels, is that this is a one to two billion dollars head wind at most, But of course that shifts dramatically depending on how long this is going to take. Right, my assumption is that this is resolved by the second or third quarter. There is a universe in which Apple is going to court after court case that they're appealing to the ITC, they're appealing to the Customs Agency, the White House trying to sell with Moss's moo. So you can't put an end date on this. So you really can't know how it's going to shake out, but you know, I would guess probably a couple billion if all goes well. To Apple's side, explain to me, Mark, you mentioned that this that this is happening, Like, if you want an Apple Watch, one of these new Apple watches after December twenty fifth, then you can go to best Buy, you can go to other retail outlets like because as you said, these aren't these aren't being sold. These aren't being banned at Walmart and best Buy. Why is it only applying to Apple Zone channels. Yeah, in addition to best Buy and Target and Walmart and Amazon, the Carrier store sell them too. So you can get an Apple Watch at Verizon, Ateen, T T Mobile, you name it. And I would imagine the vast majority of Apple's products are sold outside right of their two hundred and seventy retail stores in the US, maybe outside even in the online store. That's certainly the case for iPhones, and it might be for Apple watches as well, giving the attachment rate. But that Apple's working with the letter of the law here. So Apple's perspective is is that the order which is two part one is the import band two is the season desist on sales. The season desists on sales from the ITC specifically says Apple right, so that means best Buy and whoever can keep going mosso A lawyers who I spoke to yesterday believe that Apple should be instructing the third party retailers, given their partners of Apple to stop. Obviously, it would be an Apple's best interest to not do that, But I said earlier today, Apple retail employees and customer service reps can't legally point people towards Best Buy at all to continue to buy their Apple Watch. So it's going to be really interesting to see how this plays out. You know, we can get news any minute now that Biden has stepped in and this ban is no longer happening. Or we can get news in two months from now that there was a settlement, or Apple can put out a selfware potat in a month that rectifies everything. So we'll be holding our breath to see what's going on. And Mark, we certainly know that you'll be all over the story, just like you've been all over the story over the last couple of days. Mark German, as chief technology correspondent for Bloomberg News, joining us on zoom from Los Angeles. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, or watch just Live on YouTube. Shares a FedEx down by seven point five percent, the company reporting profit below analyst expectations. Cost cuts were not enough to make up for volume declines at the air freight and trucking unit's amid a lingering cargo recession. The company also lowered its sales forecast for the fiscal year that ends May thirty. First US now is Lee Glascow, Bloomberg Intelligence, Senior transportation analyst. He's here in the Bloomberg newsroom this afternoon. Lee. Good to have you with us. You've had about a half hour to dig through these earnings. What sticks out to you, because at least in the beginning of the after hour session, investors are not so fond of it. Yeah, I think the good news here is that they reaffirmed their adjuster earning expectations of seventeen to eighteen fifty a share, which is kind of in line. We're working censuses even though they're lowering their revenue outlook, and that shows me that they're actually making some progress with their Drive initiatives and their Network two point zero initiatives, which are really a way of them just to reduce costs and increase productivity. I think you're really seeing that on the ground. Their ground business margins improved over three hundred percent a year over year. I think that you probably could see further improvement as volumes come back stronger when the economy I guess normalizes whenever that's going to happen. But it definitely is a mixed bag. FedEx Freight showed better volume while ground did not, and that to me is indicating that the share that they won from Yellow when Yellow went out of business, that was a large LTL carrier that went out of business in July, that business was sticky, whereas the business that they won from UPS when UPS was dealing with their labor negotiations was not as sticky because volume was about fifty basis points at least, the growth was fifty basis points lower than expectation. So I think that's what we're looking at and expressed. You know, the margins were just not good. They were about one point three percent. Trying to figure out what's really going on there, but on the surface they were down a lot more than expectations. So with the stock down about eight percent in the pre market, do you think this is an overreaction in terms of the investors right now or the postmarket excuse me, not the pre We have to remember the stocks up. I'm going to give you a round number sixty five percent before today. So it's it's been, it's had a heck of a year, if you will. So maybe some of that fuel is coming out of the engine or the aear out of the balloon, if you will. But you know, FedEx has a history of you know, disappointing and then coming back, and so it's just it's about management showing that despite the numbers, they are executing and I think they will be able to do that because again they're still going to take out about one point eight billion dollars in permanent costs through their drive initiative, and so that that's worth noting that that's that's more than a couple of coins under the couch. Is there any commentary or anything that we can read into Lee when it comes to the health of the US consumer or the US or global economy here, because I'm reading through the rite through byro Own Thomas Black, who covers the company for Bloomberg News, and it talks about consumers or rich into stores. They're contending with inflation, with higher interest rates, buying power is dented. Here. What are your takeaways about the consumer when it comes to these numbers. I mean, listen, at the end of the day, parcel carriers like FedEx or UPS or DHL, they're still going through a process of normal normalization, and that normalization is not the demand side. We're not there yet. Destocking in the US seems to have run its course, which is which is in that positive I think the commentary that management's going to provide on the call shortly, we'll give us more insights into peak season because this quarter ends at the end of end of November, so you know, these get a little bit of maybe holiday buying in those numbers. But I think they're going to be able to provide us a little more insight into where the consumer is on the call, which is a couple of minutes away. Okay, so we haven't had the call yet, but rog Supermanian took over as CEO from founder Fred Smith in June of last year. Is there anything that you get from this earnings report that tells you about this new CEO and his performance. Well, they brought in some outside people, I think, which is a net positive, you know, so maybe some you know, outside perspective is a good thing for a company that might have been a little too insular for too long of a time. And one might argue that over the years, FedEx has gotten a little quote unquote fat, and that's kind of why they're doing this Network two point zero and drive initiative. Between the two of them, they're going to reduce costs by six billion dollars. Some of those costs will be permanent the Network two point zero. What they're looking at is taking their express networks and their ground networks and maybe finding synergies between the two. They operate a very different network than someone like UPS, which kind of operates one big network, where FedEx is very two separate networks. And that's because their ground business, you know, the trucks that come to your house, they're independent contractors, where in UPS they're employee drivers. So it's a very different model, and they're trying to change with the times and trying to become, like I said, a more efficient organization and looking at the ground margins improving by over three hundred basis points. I think they're making some incremental progress, you know. I think the reality is that maybe the street got ahead of itself on the name. I'm pulling up shares of UPS right now in the after hours Lee. The company stock is moving lower, as Charlie mentioned, right now by about one point seventy five percent. Can we read into these results and have any takeaways for UPS here? Even though these are different businesses, right, they're different businesses. And again what I would say is that I don't really know that we have full temperature of the consumer just based on the numbers. We have to hear more from management, hear what their customers are saying, you know, kind of where their end markets are heading. I think a lot of you will want to know, like, you know, because last quarter they are very optimistic bass sticky some of this UPS business was. It'd be very interesting to see if they remain optimistic about that business. And again, it's about their journey of lowering their costs and becoming a more efficient network, and that's not going to happen overnight. You have to give management a little slack from quarter to quarter to try to execute on that. Because the reality is, as you know, whether it's things going on in the Red Sea, whether it's strikes, you know, supply chains tend to get dislocated a lot over the last thirty six months, and you know, we expect those challenges to continue, and FedEx's and the ups is the world have to kind of adapt to those changes. Lee, We're going to let you go because you've got an earnings call to get on, and we really appreciate you joining us on this. That's Lee Clascow. He's a Bloomberg Intelligence senior Transportation and Logistics analyst. Joining us here in New York. This is Bloomberg Business. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business app, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty. Well, it is the most read story on the Bloomberg terminal in the last eight hours, actually the most read in the last twenty four hours, and it's not great news for folks on Wall Street. Wall Street's dramatic shift or a year of deal making. I should say there was a drought collapsing banks. We saw, we saw job cuts. It ended, and it could end with a mere whimper for traders bonuses. At JPMorgan Chase, for example, the overall bonus pool for its legions of traders will be close to flat compared with twenty twenty two. That's according to a person familiar with the matter. That's similar to City Group in the midst of its biggest restructuring in decades, where the pool will likely be little changed, if not slightly down, another person said, asking not to be identified discussing private information. Those words courtesy of Catherine kat Doherty and Hannah Levitt. They're both finance reporters for Bloomberg News and they wrote this story. They're both here in the Bloomberg Interactive Brokers studio. Kat, I want to start with you. It's interesting because you look at what equities have done this year, especially toward the end of the year, and we've seen this massive rally. So if you're an investor who's been along the markets, you're having a pretty good year. If you work on Wall Street, though it's not looking so good. Well, it depends where you sit, I would say trading overall, so fixed income equities, the more volatile periods that you have, the more money that you're making because you're not taking positions, you're not making bets like the buyside what you would be referencing, but you're executing those trades on behalf of those investors that are making the bets. So in a period like this, you are right, the end of the year is always more volatile up or If traders are making more trades, they're making more money. Also, the bigger of the trades, the more money you're going to make, so you're taking fees, and those fees are going to increase. Likely in the fourth quarter you're going to see that up compared to let's say the third quarter that would include the summer months, So we're really comparing the entire year though, and twenty twenty three we've had ups and downs, and it's compared to last year, which was a really disappointing year across Wall Street. For bonuses, if you were an investment banker, a trader, you name it, and that's because we were comparing it to the year before. So you always have to think about the perspective. And the year before was that boom year. That was when money was flowing and deals were every day was a new m and a announced and so those investment bankers were making money, traders were making money. So you really have to think about each year in a silo. This year it's very tep it, it's very warm. I would say, no one's crushing it, but no one's getting crushed either. Hannah, can you give us a sense for those who don't work on Wall Street and don't maybe get those bonuses, how big of a deal is it to come to the end of the year for these people in these industries to actually get the news of what their bonus is going to be. I guess culturally, but also just as a part of employee well being. Yeah, I mean it's a huge deal. These these employees, these bankers and traders get you know, a large portion of their comp It can be more than their salary and bonus. So that's really you know, when you're looking at how much you're going to make in a given year, how much you made in that year. Bonus plays a huge part of it, and so that's what drives the morale, you know, up down or lukewarm. As Kat said, So I mentioned JP, Morgan, Chase Hannah, I mentioned City Group. There's also Goldman, Sachs, Bank of America. What did what did you guys learn about those companies? Yeah, so Goldman and be of A are both they could both be increasing bonuses for traders up a couple percentage points this year, and you know, to dig into those you get a sense for the story at each of those firms. So BAVA has made some gains this year in market share compared to peers and trading, and so that will likely be reflected there. And then Goldman last year, you know, they had this really expensive foray into consumer banking that they then you know, have pulled back from, and so traders were hit especially hard last year, you know, as they were dealing with the expense of that. So there's some room to grow for Goldman as well. What about specifically in Bank of America, because we had the CEO saying that they're going to be devoting more capital to trading and I believe also increasing hiring. What specifically is different about Bank of America that has led to growth that we're actually not seeing at the other banks. Yeah, I'm gonna kick that one to Cato because he didn't mention hiring necessarily, he did mention cap and this is not new. Over the past few years, the bank has dedicated more capital and for trading. That specifically just means this is more money that they have more of the balance sheet. Bank of America has this large balance sheet because they're not just the investment bank. They're not just trading. They serve consumers as well. They have the consumer bank and the commercial bank. So when you have a bigger balance sheet, it's similar to JP Morgan. You can essentially do more trading. If you have a client that you're serving, maybe it's a small business, that balance sheet it's going to expand you're going to have more consumers. Maybe you have someone that you're trading for and you're also lending to at the same time. So that's what he means by capital. They're basically dedicating the resources because they're recognizing that if they dedicate should if there was another important point that moynihand made where he said, if they can show that they can deploy this and make money, We'll give them more money. So it's like you eat which you kill, or maybe that's a terrible phrase for what I'm trying to get across. But if they're going to show moynihand that they're performing each quarter and they have, then there's more room for them. There's more resources that they will get to hopefully continue that growth. Now, if that growth stalls or they're losing money at a point, they might have to reevaluate and reassess. But at the moment he's saying, this is a pretty big and good bet for us. So Kat, very briefly, twenty twenty four, what does that look like? I mean, we have no idea what the volatility is going to look like, but what's an expectation that these employees have well after bonus season? I think the big question mark will be how is the economy going to respond to the Fed cutting rates? If they do, when they do, there's a lot of bets that folks will be making around the timing of that, and so traders will be there to say, hey, we're here whenever you want to reassess. What have you? If deals come back, that's really good for investment bankers. So investment bankers are sitting there saying, we want this period that everyone is talking about to finally thaw, finally opens, that we can get back to work. I think those are the two parameters that I say people are watching. Yeah, a lot of folks are certainly hoping for an unthawing of the IPO markets. We start to see some deals. Hey, Hanna, I want to talk to you a little bit about your JP Morgan story that came out this week about succession after Jamie Dimond. He's kind of famous for always saying five more years and when he's asked about the succession question, he is the only CEO of one of the big banks who actually was there during the financial crisis and steered the bank through the financial crisis at the at the helm of the bank, who's in line for succession? And what are you learning? Yes, so that's a great question. So Jamie Diamond, you know, has been in his role longer than any of the other major Wall Street CEOs and he's rounding out his eighteenth year at the top. He's really, you know, built JP Morgan into into what it is today, and he has long joked five more years, no matter when he's asked, and that got you know, a little a little more serious in twenty twenty one when he was given you know, a special incentive to stay until at least twenty twenty six. And around the same time they had their biggest management shuffle you know, in years, that really added some clarity to the succession picture there. So you have Daniel Pinto, who's the sole president of the firm, and they've made it really clear that he's you know, there in case of an emergency or some sort of accelerated handoff. He already served as you know, co head of the firm on an interim basis when Jamie had a health issue in twenty twenty and so he's there, he's president of the firm. And then the two people that were really thrown into the spotlight in a new way in twenty twenty one were Marion Lake and Jen Peepsack, and they co lead the consumer you know, the massive consumer arm together, and those are the two that you know, people would really consider to be the front runners. Although as time passes, you know, I mean this, this this JP Morgan succession question has been going on longer than you know, I've been on the longer than I've been at bloomber It's it's a forever question so far. And so we've seen this before where people come in and people, you know, make their way off of that list for some reason. And he certainly, I mean, he certainly doesn't seem to be slowing down at all when you see his interviews or when you see the way that he's you know, in front of Congress. Totally. Yeah, yeah, yeah, We'll have to wait and see great reporting from both of you. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, or watch us live on YouTube. Wants a list? I mean, who doesn't want to be forever young? For thousands of years, finding the so called fountain of youth has really only been the stuff of legend and fairy trip fairy tales, and Silicon Valley more than anywhere else, has for decades been hoping not only to slow aging, but also to find an actual cure for death. This goal has made the region and its techno files the butt of many jokes and the target of criticism. I mean, just think back to the blood Boys who provided their blood to Gavin Belson in the HBO show Silicon Valley a few years ago. But there's some serious money going into anti aging startups in the valley, among them retro Biosciences, a startup with one hundred and eighty million dollars from none other than open Ais Sam Altman. The company is a simple and audacious goal, add ten good years to your life. And until now we haven't actually had a glimpse inside of retro bias Sciences, But thanks to Ashley Vance, features writer for Bloomberg BusinessWeek, now we do. He writes about the company and the forthcoming issue of BusinessWeek magazine. You can read the story now in the Bloomberg and at Bloomberg dot com slash BusinessWeek. Ashley also the author of Elon Musk Tesla's SpaceX and the Quest for a Fantastic Future, as well as his newer book When the Heavens Went On Sale, The Misfits and Geniuses Racing to put Space within reach. Know him from Hello World, on BTV and on Bloomberg Originals. Joe Weber is the editor of Bloomberg Business Week. He joins us here in the Bloomberg Interactive Broker's studio, Joel, this story is part of the longevity issue. I'm obsessed with longevity, not just because I would like to live longer than Yeah, you're not alone, though, yeah I'm not alone. Also just want to give Ashley a shout out because did I not read everything that he's done? I was going to say, what else, editor of Bloomberg Business Week. Quite short, you think about Ashley's accomplishments quite long, it's a tough fact to follow. Well, I will also say, you know, Ashley was something of the inspiration for this issue because we did this story earlier in this year, how to spend a million dollars to be eighteen again? And man, that story went viral. Story Brian Johnson, just that name, I think we really put on the map, and that was all things to Ashley. Which that was not even the first Brian Johnson story that we had done, and it won't also be the only one that we talked about this week. But Ashley has just had his pulse, He had his finger on the pulse of Silicon Valley for everything forever, and what we appreciated was that Silicon Valley is obsessed with this puzzle of how do we live longer, how do we live better as we age. There's some very interesting individuals who have novel approaches to that. There's also just like people who have a lot of money and are willing to throw it at the problem and see where that ends up. So we started talking about this issue kind of earlier in the year and we just started to try and figure out the stories that we wanted to do, and this began as like an open invite to Ashley. There are a number of labs obsessed with longevity. Ashley told us about the one that we decided to feature. Yeah, well, thank you guys for all the kai words the well, this this is retro bio, Like you guys said, it's it's funded by Sam Altman. Perhaps you know that name. Yes, yes, a lot of again but you know he retro. What we point out in the story that I think is particularly interesting in the field of longevity is the science kind of comes and goes that people get excited about. But there's a thing called cellular reprogramming, which is the current as far as like real longevity science goes it's sort of what people are most excited about. Retro is one of a handful of companies that have received hundreds of millions and some of these billions of dollars to further this technology. And it's basically about taking the cells in your body, hitting them with proteins or small molecules, and taking the cells back to a younger, healthier state. It's stuff that we know we can do in animals, and now we're trying to find out if we can do this safely in humans. And Retro is one of these companies. Good after what does that actually look like? And how much money do you need to do this? Because there are labs longevity centers who have a lot more money than what Retros actually has. Even though they have a lot of money too, Yeah, I mean they have one hundred eighty million dollars. They're weird because they're chasing five different types of longevity technology at the same time. You know, the table stakes here appear to be at least one hundred million dollars. There's a company called Alto Slabs that's backed by Jeff Bezos, and you're a millener. They have three billion dollars and so there's something of a race going on where again, we've for about, you know, fifteen years, maybe even a little more, we've done all these experiments on animals where you essentially take one of their old cells. You can take a skin cell off of a mouse, and you can revert that all the way back to a stem cell, kind of that blank slate where all life begins, and then advance it again and create a whole new animal. In this case, we want to take something like a liver cell that has its identity as a liver cell, and we want to reverse it, but not to that blank slate. We want to just re is it back to a healthier liver cell. And this this is sort of the trick that everyone's trying to figure out. Emily, you're gonna have to pick a horse one hundred and eighty million dollars with Sam Altman, three billion dollars with Jeff Bezos, Go which one do you pick? I'm gonna oh, okay, well that was the wrong answer, but no, I just picked the more money. Honestly, Yeah, it might be right, it might be right. Well, who knows right? But okay, So this walk us through this partial cell reprogramming Ashley, And what does that actually mean? Because like that's a frame, like the thing about longevity. You start like like getting into the space and all of a sudden, there's this whole other world of vocabulary that no one's ever familiar with. So what does that actually mean? And can I do it now? Yeah, Okay, I'm gonna nerd out on everyone for a second. But around two thousand and six, a Japanese researcher, a doctor named Yamanaka, and he discovered that there were these they called them transcription factors. They're basically proteins. They're present in our body. We have between fifteen hundred and two thousand transcription factors in our body that perform various functions. But he discovered you could take a cell from a mouse and hit it with these these four transcription factors that sort of turned on some of the genes that are present in our youngest state when we're closest to a stem cell, and those cells would in fact start reverting back to their stem cell state. And so at the beginning, people just thought, oh, this is interesting. Stem cells were very controversial. You have to harvest them from embryos, and this was now a way to manufacture stem cells artificially, and then in twenty sixteen, another researcher named Alex o'campo. He was the one who discovered in mice again that if you finessed this process just right and you didn't turned these genes on all the time, you just turned them on for a couple of days, that the mice suddenly started living thirty percent longer than all of their peers. And this is when the longevity field got excited about this technology. Tell us about the founder, Joe Betts Lacroix, I think I'm saying that, Yeah, he's a character and a half. He grew up in Oregon with these kind of like counterculture parents during the sixties. He's got a very unconventional background. He had AD average in high school and then somehow got into Harvard from what he says was a very creative essay and transfer application from a community college and has had his interesting career. He's been a serial entrepreneur in Silicon Valley. He's been an angel investor, tied to y Comminator, and he's done a number of startups over the years. Some of the older people listening will remember OQO. They made this tiny computer that caught everyone's attention around the two thousands, and you know he's he was basically he's an autodide act who is not a trained biologist or anything like it, but he got interested in the longevity field and learned all of this science and then put this team together. The thing that stands out about Retro is that it's a very unconventional biotech firm. All their mice live in these shipping containers that Joe and a handful of people built by hand inside of this retail buildings. Is not like your standard laboratory, and they, you know, built the whole air filtration system, the HVAC system, everything by hand. Hey, Ashley, you've done a good portion of reporting this year and gosh even last year on folks who are looking into anti aging, folks who are trying to reverse aging, folks are trying to add good years to life. Brian Johnson's documenting this on Twitter now quite a bit based on your reporting, And I'm just curious if you think, like, within our lifetimes we are actually going to be able to take advantage of this type of technology. I mean, you know, you look at what Brian's doing. He's basically testing every single substance that's ever been in a paper that's shown some sort of benefit for longevity. And there's interesting things there. There's people doing stuff like autophogy, which is basically calorie restriction, which a lot of people have heard of, where your body seems to repair itself. All those things you know are real and seem to contribute in different ways, but it's this cell reprogramming stuff that really seems to have the most promise, and they really did get me excited. If you talk to the researchers in this field, they will tell you what I said, that we've seen this work in animals that what happens is sometimes when this process gets overactivated, it causes your body to grow tumors all over the body. And so this is why we have not tried this in humans. That's not good. If that's not good. If we can figure this out, it's a huge if. But if we can figure this out, and all these sciences really think this is like an engineering problem, they think the science is solved. Yes, I think. You know, this is the most encouraged I've been by anything in a long time. And you have you have incredibly smart people and tons of money being thrown at this, and it's our it's our best bet. Okay, so what what do we What does ten years look like? Then? Like, what do I what do I have to do to get ten more years? Well, you know, I would like I would like twenty I would like twenty six to thirty six. Okay, you we pick up like that? Actual, yeah, those are the years I want back. When you talk to these researchers, the way this is probably if it works, the way this is probably going to play out first is that somebody would come in with with liver disease and you would repair the liver, or you would have heart problems and you would repair the heart, and it would be this kind of like organ by organ basis where you're you're fixing pretty problems. The promise is this more like generalized use of this technology where you really would repair the entire body and all the cells within it. I mean, that is far off, but like I've asked these people, I'm like, so you're telling me I'm going to get an injection and then my face is going to like revert back to my twenty five year old face. And they will tell you quite point blank that yes, that is kind of the goal that over a period of months, that is what would happen to you. I mean I cared less about, like I guess, reversing the aging process from a physical perspective like looks, and more like feeling like I don't want to be sore anymore. I want to be able to just go on a ski trip and not train for it. Yeah you know what I mean, like things you could do when you were like a lot younger, and that was totally fine. I can't wait to hear how this plays out for you. Here's the problem. Here's the problem. I'm not a billionaire. Okay, that's the problem. I have no blood boys. Put the shot right here. I have zero blood boys. Put the shot right here. Yeah, okay, Ashulely. What what about the competition? Right? We mentioned three billion dollars in bezos? Uh, what's the pro What are the different approaches that you know, kind of round out this field. Retro's got this way. How are other people going to go about selving it? Yeah? So retros, retros kind of do it. All these experiments on these these mice, they have tens of thousands of mice. Alto's labs, the company backed by by Bezos and Miller. What they've essentially done is hired the whole world's top academics in this field away from their university positions and given them money and their own laboratories. Have been like, you know, let's see how fast you can run, and if you don't have to, you know, teach and write papers and all that, and so that that's another approach. There's a company called New Limit, which is funded by the coinbase founder Brian Armstrong. They are essentially doing I talked about those transcriptions factors, those four proteins that have unlocked this process so far. They're doing a massive study of all two thousand transcription factors, essentially a huge computing project where they take these samples and they analyze them, and then they're trying to find the best combination of these factors that will affect the body. And so everybody's coming at this from like a slightly different angle, and it's just not clear which approach will be first. I'm actually kind of shocked there's really not that many startups beyond those three. I mean, you can argue pretty easily that this could be the best business of all time. I'm sort of surprised there's not twenty thirty forty fifty startups in the space. Well, there's still time, and there's also still time to check out this story on the Bloomberg Terminal. It's going to be available in the upcoming new issue of Bloomberg Business Week on newsstands later this week, already online at Bloomberg dot com, slash business Week, and of course on the Bloomberg Terminal. Big thank you too, Ashley Vance. He is features writer for Bloomberg Business Week, and also big thank you to Joe Webber, the editor of Bloomberg Business Week. Joe, we're going to start to hear more from you on the longevity stuff, right, we can talk more tomorrow, Okay, cool, all right, the people tell people, We'll see about it. A nice deep tease for tomorrow. You're listening and watching Bloomberg Business Week. This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you hit your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg jermanalone
Speaker 1: This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus gloom O Business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. I want to talk a little bit about what's going on with Apple. It's pretty much the biggest tech story out there. The company, just days away from a US ban of its smart watches, is plotting a rescue mission for the seventeen billion dollar business that includes software fixes and other potential workarounds. Here's what's going on. You got engineers at the company are racing to make changes to algorithms on these Apple watches that measure a user's blood oxygen level. Now, you'll recall from our coverage yesterday, this is a feature that Massimocorp has argued in fringes its patents. Apple engineers are adjusting how the tech determines oxygen saturation and presents the data to customers. This according to people familiar with the work that reporting. Our next guest, Mark German. He's chief technology correspondent for Bloomberg News. He joins us on zoom from Los Angeles. Mark, You've been all over this story over the past couple of days. Where are we at just after four o'clock here on the East Coast. Yeah, thanks Tim for having me. We are in the same place we were yesterday. We were in the same place we were when this band was announced back in October by the ITC, the International Trade Commission. There's been no movement. It doesn't appear that the Biden administration or the US Trade Representative Catherine Tie It's any closer to vetoing. There does not appear to be any imminent settlement between Apple and Massimo, and Apple is probably at least several weeks away from being able to deploy that software fix we talked about, And it's also unclear if the software fix will even be approved the US Customs Agency, which monitors what's to being imported and expert into the US, they have to approve this fix, and if they don't believe, or if Massimo provides good evidence that the software fixes not fix the patent issue, we can be in this issue for the long haul between Apple and also well. One thing that I learned from your reporting today was the fact that Apple engineers are working on this update to the software, which came as to a surprise, came as a surprise to me Mark because I thought this was a hardware issue, not a software issue. I thought this was about a sensor that's on the watch, not about software that powers the sensor. So give us the details there. You're absolutely right. It's nothing to do with software. This is a hardware issue. The patents in question relates specifically to the arrangement in the back end technologies and led lights at the bottom of the Apple washers, a special red light that shines through the bottom of the watch to non invasively go into your skin and read how much oxygen is in your blood. And that's the patents that Mosimo holds. These are the patents that are being disputed right now that Apple has infringed upon. So it is a software issue. But the way it has been explained to me by people who are involved in patent law and in the patent world, not from Apple and Massamo, is that technically that hardware could be disabled and is controlled by the software, So that might be a workaround until Apple's able to shift the actual hardware in the Apple Watch casing and a subsequent generation and that is likely what Apple is banking on, because needing to redesign the entire watch hardware plus those algorithms, that could be a several month process, and quite honestly, it would be a big money loser for Apple compared to probably the few hundred million dollars we need to pay out Massamo. My take is that Apple sees that money from Massamo with some sort of ransom. They don't want to set the precedent of paying out what they consider it to be a patentrol. Masimo and many others believe that they're in the right here. Clearly, the ITC has seen a lot of cases, and given all of their experience, they still sided with Masamo. So there's probably a lot going on here in Massamo's favor. So you write that they plan to stop selling the prohibited watches on their website on Thursday and then pull all of them from their roughly two hundred and seventy brick and mortar Apple outlets by December twenty fourth. I mean, how much is this going to hit Apple's profits ahead of the holiday season. I imagine there were a lot of people who were planning on last minute scooping up these watches. I'm sure a lot of people who wanted to get Apple watches for the holiday season, they already did their shopping. The news is out. If you want an Apple watch for Christmas, you have to get it before Christmas. Right, People probably aren't doing their Christmas shopping on December twenty sixth. There're a lot more than reopen because they're closing the twenty fit anyways. Right, So I don't think that this is going to impact Apple's revenue for the first quarter. I think this is going to impact Apple's revenue probably for the second and third quarter. And given that this is US only and it's only within Apple's first party retail channels, is that this is a one to two billion dollars head wind at most, But of course that shifts dramatically depending on how long this is going to take. Right, my assumption is that this is resolved by the second or third quarter. There is a universe in which Apple is going to court after court case that they're appealing to the ITC, they're appealing to the Customs Agency, the White House trying to sell with Moss's moo. So you can't put an end date on this. So you really can't know how it's going to shake out, but you know, I would guess probably a couple billion if all goes well. To Apple's side, explain to me, Mark, you mentioned that this that this is happening, Like, if you want an Apple Watch, one of these new Apple watches after December twenty fifth, then you can go to best Buy, you can go to other retail outlets like because as you said, these aren't these aren't being sold. These aren't being banned at Walmart and best Buy. Why is it only applying to Apple Zone channels. Yeah, in addition to best Buy and Target and Walmart and Amazon, the Carrier store sell them too. So you can get an Apple Watch at Verizon, Ateen, T T Mobile, you name it. And I would imagine the vast majority of Apple's products are sold outside right of their two hundred and seventy retail stores in the US, maybe outside even in the online store. That's certainly the case for iPhones, and it might be for Apple watches as well, giving the attachment rate. But that Apple's working with the letter of the law here. So Apple's perspective is is that the order which is two part one is the import band two is the season desist on sales. The season desists on sales from the ITC specifically says Apple right, so that means best Buy and whoever can keep going mosso A lawyers who I spoke to yesterday believe that Apple should be instructing the third party retailers, given their partners of Apple to stop. Obviously, it would be an Apple's best interest to not do that, But I said earlier today, Apple retail employees and customer service reps can't legally point people towards Best Buy at all to continue to buy their Apple Watch. So it's going to be really interesting to see how this plays out. You know, we can get news any minute now that Biden has stepped in and this ban is no longer happening. Or we can get news in two months from now that there was a settlement, or Apple can put out a selfware potat in a month that rectifies everything. So we'll be holding our breath to see what's going on. And Mark, we certainly know that you'll be all over the story, just like you've been all over the story over the last couple of days. Mark German, as chief technology correspondent for Bloomberg News, joining us on zoom from Los Angeles. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, or watch just Live on YouTube. Shares a FedEx down by seven point five percent, the company reporting profit below analyst expectations. Cost cuts were not enough to make up for volume declines at the air freight and trucking unit's amid a lingering cargo recession. The company also lowered its sales forecast for the fiscal year that ends May thirty. First US now is Lee Glascow, Bloomberg Intelligence, Senior transportation analyst. He's here in the Bloomberg newsroom this afternoon. Lee. Good to have you with us. You've had about a half hour to dig through these earnings. What sticks out to you, because at least in the beginning of the after hour session, investors are not so fond of it. Yeah, I think the good news here is that they reaffirmed their adjuster earning expectations of seventeen to eighteen fifty a share, which is kind of in line. We're working censuses even though they're lowering their revenue outlook, and that shows me that they're actually making some progress with their Drive initiatives and their Network two point zero initiatives, which are really a way of them just to reduce costs and increase productivity. I think you're really seeing that on the ground. Their ground business margins improved over three hundred percent a year over year. I think that you probably could see further improvement as volumes come back stronger when the economy I guess normalizes whenever that's going to happen. But it definitely is a mixed bag. FedEx Freight showed better volume while ground did not, and that to me is indicating that the share that they won from Yellow when Yellow went out of business, that was a large LTL carrier that went out of business in July, that business was sticky, whereas the business that they won from UPS when UPS was dealing with their labor negotiations was not as sticky because volume was about fifty basis points at least, the growth was fifty basis points lower than expectation. So I think that's what we're looking at and expressed. You know, the margins were just not good. They were about one point three percent. Trying to figure out what's really going on there, but on the surface they were down a lot more than expectations. So with the stock down about eight percent in the pre market, do you think this is an overreaction in terms of the investors right now or the postmarket excuse me, not the pre We have to remember the stocks up. I'm going to give you a round number sixty five percent before today. So it's it's been, it's had a heck of a year, if you will. So maybe some of that fuel is coming out of the engine or the aear out of the balloon, if you will. But you know, FedEx has a history of you know, disappointing and then coming back, and so it's just it's about management showing that despite the numbers, they are executing and I think they will be able to do that because again they're still going to take out about one point eight billion dollars in permanent costs through their drive initiative, and so that that's worth noting that that's that's more than a couple of coins under the couch. Is there any commentary or anything that we can read into Lee when it comes to the health of the US consumer or the US or global economy here, because I'm reading through the rite through byro Own Thomas Black, who covers the company for Bloomberg News, and it talks about consumers or rich into stores. They're contending with inflation, with higher interest rates, buying power is dented. Here. What are your takeaways about the consumer when it comes to these numbers. I mean, listen, at the end of the day, parcel carriers like FedEx or UPS or DHL, they're still going through a process of normal normalization, and that normalization is not the demand side. We're not there yet. Destocking in the US seems to have run its course, which is which is in that positive I think the commentary that management's going to provide on the call shortly, we'll give us more insights into peak season because this quarter ends at the end of end of November, so you know, these get a little bit of maybe holiday buying in those numbers. But I think they're going to be able to provide us a little more insight into where the consumer is on the call, which is a couple of minutes away. Okay, so we haven't had the call yet, but rog Supermanian took over as CEO from founder Fred Smith in June of last year. Is there anything that you get from this earnings report that tells you about this new CEO and his performance. Well, they brought in some outside people, I think, which is a net positive, you know, so maybe some you know, outside perspective is a good thing for a company that might have been a little too insular for too long of a time. And one might argue that over the years, FedEx has gotten a little quote unquote fat, and that's kind of why they're doing this Network two point zero and drive initiative. Between the two of them, they're going to reduce costs by six billion dollars. Some of those costs will be permanent the Network two point zero. What they're looking at is taking their express networks and their ground networks and maybe finding synergies between the two. They operate a very different network than someone like UPS, which kind of operates one big network, where FedEx is very two separate networks. And that's because their ground business, you know, the trucks that come to your house, they're independent contractors, where in UPS they're employee drivers. So it's a very different model, and they're trying to change with the times and trying to become, like I said, a more efficient organization and looking at the ground margins improving by over three hundred basis points. I think they're making some incremental progress, you know. I think the reality is that maybe the street got ahead of itself on the name. I'm pulling up shares of UPS right now in the after hours Lee. The company stock is moving lower, as Charlie mentioned, right now by about one point seventy five percent. Can we read into these results and have any takeaways for UPS here? Even though these are different businesses, right, they're different businesses. And again what I would say is that I don't really know that we have full temperature of the consumer just based on the numbers. We have to hear more from management, hear what their customers are saying, you know, kind of where their end markets are heading. I think a lot of you will want to know, like, you know, because last quarter they are very optimistic bass sticky some of this UPS business was. It'd be very interesting to see if they remain optimistic about that business. And again, it's about their journey of lowering their costs and becoming a more efficient network, and that's not going to happen overnight. You have to give management a little slack from quarter to quarter to try to execute on that. Because the reality is, as you know, whether it's things going on in the Red Sea, whether it's strikes, you know, supply chains tend to get dislocated a lot over the last thirty six months, and you know, we expect those challenges to continue, and FedEx's and the ups is the world have to kind of adapt to those changes. Lee, We're going to let you go because you've got an earnings call to get on, and we really appreciate you joining us on this. That's Lee Clascow. He's a Bloomberg Intelligence senior Transportation and Logistics analyst. Joining us here in New York. This is Bloomberg Business. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business app, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty. Well, it is the most read story on the Bloomberg terminal in the last eight hours, actually the most read in the last twenty four hours, and it's not great news for folks on Wall Street. Wall Street's dramatic shift or a year of deal making. I should say there was a drought collapsing banks. We saw, we saw job cuts. It ended, and it could end with a mere whimper for traders bonuses. At JPMorgan Chase, for example, the overall bonus pool for its legions of traders will be close to flat compared with twenty twenty two. That's according to a person familiar with the matter. That's similar to City Group in the midst of its biggest restructuring in decades, where the pool will likely be little changed, if not slightly down, another person said, asking not to be identified discussing private information. Those words courtesy of Catherine kat Doherty and Hannah Levitt. They're both finance reporters for Bloomberg News and they wrote this story. They're both here in the Bloomberg Interactive Brokers studio. Kat, I want to start with you. It's interesting because you look at what equities have done this year, especially toward the end of the year, and we've seen this massive rally. So if you're an investor who's been along the markets, you're having a pretty good year. If you work on Wall Street, though it's not looking so good. Well, it depends where you sit, I would say trading overall, so fixed income equities, the more volatile periods that you have, the more money that you're making because you're not taking positions, you're not making bets like the buyside what you would be referencing, but you're executing those trades on behalf of those investors that are making the bets. So in a period like this, you are right, the end of the year is always more volatile up or If traders are making more trades, they're making more money. Also, the bigger of the trades, the more money you're going to make, so you're taking fees, and those fees are going to increase. Likely in the fourth quarter you're going to see that up compared to let's say the third quarter that would include the summer months, So we're really comparing the entire year though, and twenty twenty three we've had ups and downs, and it's compared to last year, which was a really disappointing year across Wall Street. For bonuses, if you were an investment banker, a trader, you name it, and that's because we were comparing it to the year before. So you always have to think about the perspective. And the year before was that boom year. That was when money was flowing and deals were every day was a new m and a announced and so those investment bankers were making money, traders were making money. So you really have to think about each year in a silo. This year it's very tep it, it's very warm. I would say, no one's crushing it, but no one's getting crushed either. Hannah, can you give us a sense for those who don't work on Wall Street and don't maybe get those bonuses, how big of a deal is it to come to the end of the year for these people in these industries to actually get the news of what their bonus is going to be. I guess culturally, but also just as a part of employee well being. Yeah, I mean it's a huge deal. These these employees, these bankers and traders get you know, a large portion of their comp It can be more than their salary and bonus. So that's really you know, when you're looking at how much you're going to make in a given year, how much you made in that year. Bonus plays a huge part of it, and so that's what drives the morale, you know, up down or lukewarm. As Kat said, So I mentioned JP, Morgan, Chase Hannah, I mentioned City Group. There's also Goldman, Sachs, Bank of America. What did what did you guys learn about those companies? Yeah, so Goldman and be of A are both they could both be increasing bonuses for traders up a couple percentage points this year, and you know, to dig into those you get a sense for the story at each of those firms. So BAVA has made some gains this year in market share compared to peers and trading, and so that will likely be reflected there. And then Goldman last year, you know, they had this really expensive foray into consumer banking that they then you know, have pulled back from, and so traders were hit especially hard last year, you know, as they were dealing with the expense of that. So there's some room to grow for Goldman as well. What about specifically in Bank of America, because we had the CEO saying that they're going to be devoting more capital to trading and I believe also increasing hiring. What specifically is different about Bank of America that has led to growth that we're actually not seeing at the other banks. Yeah, I'm gonna kick that one to Cato because he didn't mention hiring necessarily, he did mention cap and this is not new. Over the past few years, the bank has dedicated more capital and for trading. That specifically just means this is more money that they have more of the balance sheet. Bank of America has this large balance sheet because they're not just the investment bank. They're not just trading. They serve consumers as well. They have the consumer bank and the commercial bank. So when you have a bigger balance sheet, it's similar to JP Morgan. You can essentially do more trading. If you have a client that you're serving, maybe it's a small business, that balance sheet it's going to expand you're going to have more consumers. Maybe you have someone that you're trading for and you're also lending to at the same time. So that's what he means by capital. They're basically dedicating the resources because they're recognizing that if they dedicate should if there was another important point that moynihand made where he said, if they can show that they can deploy this and make money, We'll give them more money. So it's like you eat which you kill, or maybe that's a terrible phrase for what I'm trying to get across. But if they're going to show moynihand that they're performing each quarter and they have, then there's more room for them. There's more resources that they will get to hopefully continue that growth. Now, if that growth stalls or they're losing money at a point, they might have to reevaluate and reassess. But at the moment he's saying, this is a pretty big and good bet for us. So Kat, very briefly, twenty twenty four, what does that look like? I mean, we have no idea what the volatility is going to look like, but what's an expectation that these employees have well after bonus season? I think the big question mark will be how is the economy going to respond to the Fed cutting rates? If they do, when they do, there's a lot of bets that folks will be making around the timing of that, and so traders will be there to say, hey, we're here whenever you want to reassess. What have you? If deals come back, that's really good for investment bankers. So investment bankers are sitting there saying, we want this period that everyone is talking about to finally thaw, finally opens, that we can get back to work. I think those are the two parameters that I say people are watching. Yeah, a lot of folks are certainly hoping for an unthawing of the IPO markets. We start to see some deals. Hey, Hanna, I want to talk to you a little bit about your JP Morgan story that came out this week about succession after Jamie Dimond. He's kind of famous for always saying five more years and when he's asked about the succession question, he is the only CEO of one of the big banks who actually was there during the financial crisis and steered the bank through the financial crisis at the at the helm of the bank, who's in line for succession? And what are you learning? Yes, so that's a great question. So Jamie Diamond, you know, has been in his role longer than any of the other major Wall Street CEOs and he's rounding out his eighteenth year at the top. He's really, you know, built JP Morgan into into what it is today, and he has long joked five more years, no matter when he's asked, and that got you know, a little a little more serious in twenty twenty one when he was given you know, a special incentive to stay until at least twenty twenty six. And around the same time they had their biggest management shuffle you know, in years, that really added some clarity to the succession picture there. So you have Daniel Pinto, who's the sole president of the firm, and they've made it really clear that he's you know, there in case of an emergency or some sort of accelerated handoff. He already served as you know, co head of the firm on an interim basis when Jamie had a health issue in twenty twenty and so he's there, he's president of the firm. And then the two people that were really thrown into the spotlight in a new way in twenty twenty one were Marion Lake and Jen Peepsack, and they co lead the consumer you know, the massive consumer arm together, and those are the two that you know, people would really consider to be the front runners. Although as time passes, you know, I mean this, this this JP Morgan succession question has been going on longer than you know, I've been on the longer than I've been at bloomber It's it's a forever question so far. And so we've seen this before where people come in and people, you know, make their way off of that list for some reason. And he certainly, I mean, he certainly doesn't seem to be slowing down at all when you see his interviews or when you see the way that he's you know, in front of Congress. Totally. Yeah, yeah, yeah, We'll have to wait and see great reporting from both of you. You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, or watch us live on YouTube. Wants a list? I mean, who doesn't want to be forever young? For thousands of years, finding the so called fountain of youth has really only been the stuff of legend and fairy trip fairy tales, and Silicon Valley more than anywhere else, has for decades been hoping not only to slow aging, but also to find an actual cure for death. This goal has made the region and its techno files the butt of many jokes and the target of criticism. I mean, just think back to the blood Boys who provided their blood to Gavin Belson in the HBO show Silicon Valley a few years ago. But there's some serious money going into anti aging startups in the valley, among them retro Biosciences, a startup with one hundred and eighty million dollars from none other than open Ais Sam Altman. The company is a simple and audacious goal, add ten good years to your life. And until now we haven't actually had a glimpse inside of retro bias Sciences, But thanks to Ashley Vance, features writer for Bloomberg BusinessWeek, now we do. He writes about the company and the forthcoming issue of BusinessWeek magazine. You can read the story now in the Bloomberg and at Bloomberg dot com slash BusinessWeek. Ashley also the author of Elon Musk Tesla's SpaceX and the Quest for a Fantastic Future, as well as his newer book When the Heavens Went On Sale, The Misfits and Geniuses Racing to put Space within reach. Know him from Hello World, on BTV and on Bloomberg Originals. Joe Weber is the editor of Bloomberg Business Week. He joins us here in the Bloomberg Interactive Broker's studio, Joel, this story is part of the longevity issue. I'm obsessed with longevity, not just because I would like to live longer than Yeah, you're not alone, though, yeah I'm not alone. Also just want to give Ashley a shout out because did I not read everything that he's done? I was going to say, what else, editor of Bloomberg Business Week. Quite short, you think about Ashley's accomplishments quite long, it's a tough fact to follow. Well, I will also say, you know, Ashley was something of the inspiration for this issue because we did this story earlier in this year, how to spend a million dollars to be eighteen again? And man, that story went viral. Story Brian Johnson, just that name, I think we really put on the map, and that was all things to Ashley. Which that was not even the first Brian Johnson story that we had done, and it won't also be the only one that we talked about this week. But Ashley has just had his pulse, He had his finger on the pulse of Silicon Valley for everything forever, and what we appreciated was that Silicon Valley is obsessed with this puzzle of how do we live longer, how do we live better as we age. There's some very interesting individuals who have novel approaches to that. There's also just like people who have a lot of money and are willing to throw it at the problem and see where that ends up. So we started talking about this issue kind of earlier in the year and we just started to try and figure out the stories that we wanted to do, and this began as like an open invite to Ashley. There are a number of labs obsessed with longevity. Ashley told us about the one that we decided to feature. Yeah, well, thank you guys for all the kai words the well, this this is retro bio, Like you guys said, it's it's funded by Sam Altman. Perhaps you know that name. Yes, yes, a lot of again but you know he retro. What we point out in the story that I think is particularly interesting in the field of longevity is the science kind of comes and goes that people get excited about. But there's a thing called cellular reprogramming, which is the current as far as like real longevity science goes it's sort of what people are most excited about. Retro is one of a handful of companies that have received hundreds of millions and some of these billions of dollars to further this technology. And it's basically about taking the cells in your body, hitting them with proteins or small molecules, and taking the cells back to a younger, healthier state. It's stuff that we know we can do in animals, and now we're trying to find out if we can do this safely in humans. And Retro is one of these companies. Good after what does that actually look like? And how much money do you need to do this? Because there are labs longevity centers who have a lot more money than what Retros actually has. Even though they have a lot of money too, Yeah, I mean they have one hundred eighty million dollars. They're weird because they're chasing five different types of longevity technology at the same time. You know, the table stakes here appear to be at least one hundred million dollars. There's a company called Alto Slabs that's backed by Jeff Bezos, and you're a millener. They have three billion dollars and so there's something of a race going on where again, we've for about, you know, fifteen years, maybe even a little more, we've done all these experiments on animals where you essentially take one of their old cells. You can take a skin cell off of a mouse, and you can revert that all the way back to a stem cell, kind of that blank slate where all life begins, and then advance it again and create a whole new animal. In this case, we want to take something like a liver cell that has its identity as a liver cell, and we want to reverse it, but not to that blank slate. We want to just re is it back to a healthier liver cell. And this this is sort of the trick that everyone's trying to figure out. Emily, you're gonna have to pick a horse one hundred and eighty million dollars with Sam Altman, three billion dollars with Jeff Bezos, Go which one do you pick? I'm gonna oh, okay, well that was the wrong answer, but no, I just picked the more money. Honestly, Yeah, it might be right, it might be right. Well, who knows right? But okay, So this walk us through this partial cell reprogramming Ashley, And what does that actually mean? Because like that's a frame, like the thing about longevity. You start like like getting into the space and all of a sudden, there's this whole other world of vocabulary that no one's ever familiar with. So what does that actually mean? And can I do it now? Yeah, Okay, I'm gonna nerd out on everyone for a second. But around two thousand and six, a Japanese researcher, a doctor named Yamanaka, and he discovered that there were these they called them transcription factors. They're basically proteins. They're present in our body. We have between fifteen hundred and two thousand transcription factors in our body that perform various functions. But he discovered you could take a cell from a mouse and hit it with these these four transcription factors that sort of turned on some of the genes that are present in our youngest state when we're closest to a stem cell, and those cells would in fact start reverting back to their stem cell state. And so at the beginning, people just thought, oh, this is interesting. Stem cells were very controversial. You have to harvest them from embryos, and this was now a way to manufacture stem cells artificially, and then in twenty sixteen, another researcher named Alex o'campo. He was the one who discovered in mice again that if you finessed this process just right and you didn't turned these genes on all the time, you just turned them on for a couple of days, that the mice suddenly started living thirty percent longer than all of their peers. And this is when the longevity field got excited about this technology. Tell us about the founder, Joe Betts Lacroix, I think I'm saying that, Yeah, he's a character and a half. He grew up in Oregon with these kind of like counterculture parents during the sixties. He's got a very unconventional background. He had AD average in high school and then somehow got into Harvard from what he says was a very creative essay and transfer application from a community college and has had his interesting career. He's been a serial entrepreneur in Silicon Valley. He's been an angel investor, tied to y Comminator, and he's done a number of startups over the years. Some of the older people listening will remember OQO. They made this tiny computer that caught everyone's attention around the two thousands, and you know he's he was basically he's an autodide act who is not a trained biologist or anything like it, but he got interested in the longevity field and learned all of this science and then put this team together. The thing that stands out about Retro is that it's a very unconventional biotech firm. All their mice live in these shipping containers that Joe and a handful of people built by hand inside of this retail buildings. Is not like your standard laboratory, and they, you know, built the whole air filtration system, the HVAC system, everything by hand. Hey, Ashley, you've done a good portion of reporting this year and gosh even last year on folks who are looking into anti aging, folks who are trying to reverse aging, folks are trying to add good years to life. Brian Johnson's documenting this on Twitter now quite a bit based on your reporting, And I'm just curious if you think, like, within our lifetimes we are actually going to be able to take advantage of this type of technology. I mean, you know, you look at what Brian's doing. He's basically testing every single substance that's ever been in a paper that's shown some sort of benefit for longevity. And there's interesting things there. There's people doing stuff like autophogy, which is basically calorie restriction, which a lot of people have heard of, where your body seems to repair itself. All those things you know are real and seem to contribute in different ways, but it's this cell reprogramming stuff that really seems to have the most promise, and they really did get me excited. If you talk to the researchers in this field, they will tell you what I said, that we've seen this work in animals that what happens is sometimes when this process gets overactivated, it causes your body to grow tumors all over the body. And so this is why we have not tried this in humans. That's not good. If that's not good. If we can figure this out, it's a huge if. But if we can figure this out, and all these sciences really think this is like an engineering problem, they think the science is solved. Yes, I think. You know, this is the most encouraged I've been by anything in a long time. And you have you have incredibly smart people and tons of money being thrown at this, and it's our it's our best bet. Okay, so what what do we What does ten years look like? Then? Like, what do I what do I have to do to get ten more years? Well, you know, I would like I would like twenty I would like twenty six to thirty six. Okay, you we pick up like that? Actual, yeah, those are the years I want back. When you talk to these researchers, the way this is probably if it works, the way this is probably going to play out first is that somebody would come in with with liver disease and you would repair the liver, or you would have heart problems and you would repair the heart, and it would be this kind of like organ by organ basis where you're you're fixing pretty problems. The promise is this more like generalized use of this technology where you really would repair the entire body and all the cells within it. I mean, that is far off, but like I've asked these people, I'm like, so you're telling me I'm going to get an injection and then my face is going to like revert back to my twenty five year old face. And they will tell you quite point blank that yes, that is kind of the goal that over a period of months, that is what would happen to you. I mean I cared less about, like I guess, reversing the aging process from a physical perspective like looks, and more like feeling like I don't want to be sore anymore. I want to be able to just go on a ski trip and not train for it. Yeah you know what I mean, like things you could do when you were like a lot younger, and that was totally fine. I can't wait to hear how this plays out for you. Here's the problem. Here's the problem. I'm not a billionaire. Okay, that's the problem. I have no blood boys. Put the shot right here. I have zero blood boys. Put the shot right here. Yeah, okay, Ashulely. What what about the competition? Right? We mentioned three billion dollars in bezos? Uh, what's the pro What are the different approaches that you know, kind of round out this field. Retro's got this way. How are other people going to go about selving it? Yeah? So retros, retros kind of do it. All these experiments on these these mice, they have tens of thousands of mice. Alto's labs, the company backed by by Bezos and Miller. What they've essentially done is hired the whole world's top academics in this field away from their university positions and given them money and their own laboratories. Have been like, you know, let's see how fast you can run, and if you don't have to, you know, teach and write papers and all that, and so that that's another approach. There's a company called New Limit, which is funded by the coinbase founder Brian Armstrong. They are essentially doing I talked about those transcriptions factors, those four proteins that have unlocked this process so far. They're doing a massive study of all two thousand transcription factors, essentially a huge computing project where they take these samples and they analyze them, and then they're trying to find the best combination of these factors that will affect the body. And so everybody's coming at this from like a slightly different angle, and it's just not clear which approach will be first. I'm actually kind of shocked there's really not that many startups beyond those three. I mean, you can argue pretty easily that this could be the best business of all time. I'm sort of surprised there's not twenty thirty forty fifty startups in the space. Well, there's still time, and there's also still time to check out this story on the Bloomberg Terminal. It's going to be available in the upcoming new issue of Bloomberg Business Week on newsstands later this week, already online at Bloomberg dot com, slash business Week, and of course on the Bloomberg Terminal. Big thank you too, Ashley Vance. He is features writer for Bloomberg Business Week, and also big thank you to Joe Webber, the editor of Bloomberg Business Week. Joe, we're going to start to hear more from you on the longevity stuff, right, we can talk more tomorrow, Okay, cool, all right, the people tell people, We'll see about it. A nice deep tease for tomorrow. You're listening and watching Bloomberg Business Week. This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you hit your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg jermanalone
