Lilly Is Selling Zepbound Vials at 50% Discount to Shots | Bloomberg Businessweek

Bloomberg audio Studios podcasts radio news this is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine plus global business finance and Tech news the Bloomberg Business Week podcast with Carol Messer and Tim stenc from Bloomberg Radio so let's also get to what a most R story in the Bloomberg yeah it's about how Eli Lily is now selling vials of its Blockbuster weight loss drug Zep bound to patients for as little as $399 a month this is it works to overcome supply shortages of its wildly popular shots here to explain on the glp1 beat is Bloomberg News Health reporter Madison Muller she's here in our studio what's going on here because this is a different delivery mechanism um at least initially do it yourself yeah a little a little too DIY for my liking just say that patients are going to be Reed to fill up their shots themselves with these vials yeah so patients take a syringe put it into the vi and you sort of draw up the liquid into the vial which a lot of people though are used to now because of the popularity of these knockoff drugs that we've talked about before those are all the the single-use vials or the multi-use vials and so patients are are really used to that now so why I mean does Lily have to do this or why are they doing it what strategy here so this is and I think we've probably talked about this on on the show at some point too the fact that Lily's production problems are really stemming from the pens the auto injector devices that are used are really complex to manufacture and so that's been bottlenecking Supply so by offering their weight loss drugs in vials they can circumvent those issues with the with the making of the pens what about the direct consumer angle here because I don't think I've ever been able to get a prescription directly from a manufacturer there's always a middle person as a Pharmacy whether it's an online pharmacy or the oldfashioned kind of Pharmacy that you'd go to is this a a new way for patients to actually get a medication from a producer yeah it's interesting because Lily direct which they launched earlier this year it's still partnered with various tele Health companies and um online pharmacies that like Amazon Pharmacy for example that will just send the medications directly to your house um so Lily isn't the one like it's not Eli Lily doctors that are writing the prescriptions it's not a a independent Eli Lily Pharmacy but they've built up this platform that directs patients to their website um they said that that can help you know with Savings in terms of applying savings coupons and things like that um and then when it comes to these vials they have it it's cash pay only so patients are not able to use insurance with these vials um and it also goes through LLY direct what is demand for this drug outside of insurance I mean people are really paying for this drug to, bucks a month if you don't have insurance $400 a month a pharmacy on the uh east side or the Upper West Side no what do you say I'm just saying it's a pretty popular drug of people who just want to lose weight right and all these compounding drugs that have gotten so popular that we've mentioned those are all cash pay you can't use insurance for those drugs so that Market's really been growing you bring up an interesting point though which is I mean a little bit Niche because it's so expensive I mean we're talking Manhattan here correct absolutely it's and it's not necessarily um you know what the drug was developed for Madison if you as you spoken to us at length of the past couple of years about this but are there folks out there who who are not getting this covered by Insurance a significant number of them and they're having to pay cash yeah I mean the insurance coverage is still quite spotty across the US and and for people who do figure out okay this is worth it for me I need this for my health they make you know they make those decisions but um it it's still really hard to get this covered and that was one of the reasons why Lily is launching these vials especially they said for Medicare patients because Medicare does not cover weight loss drugs at all and so they said and and Medicare patients also can't access savings coupons that Lily offers so they were like having the these vials options is something for Medicare patients that is at least a little more accessible it sounds like to me too um Madison that it's something that's going to help Eli Lily's bottom line which has gotten you know messed up because of the problems with the production of the the the injector pens but at the same time it does sounds like it still expensive but does make it a little bit more accessible to folks yes it definitely makes it more accessible and from a couple of the patients that I talked to this morning they were really excited about this um one of the the patients that I've interviewed before who kind of started this whole campaign earlier this year called release the vials to get Lily to do this he was so excited about it and he was like I really thought that they never would actually do this or at least they would launch the vials and they would still be exorbitantly expensive and so he was like to me this comes off as a good thing um the thing is though just reading through some of the analyst notes and in in conversations today after this news came out for Lily it doesn't really affect the net prices in the long term even though it seems like a discount but they've also raised the price of one of their savings coupons so that kind of offsets each other and in terms of like the revenues that Lily is collecting from Zep bound doing this doesn't actually have a negative impact on their bottom line doesn't have a negative doesn't yeah yeah okay we've been talking about the popularity of the glp1 class of weight loss drugs do you have any sort of third party data or is there any sort of estimate out there that actually pinpoints the percentage of Americans the number of Americans who are taking one of these drugs right now I mean we know it's in the millions it's been a little bit hard there's been some estimates I think it was like 3 million or 4 million a couple of months ago go was the most recent that I saw and it's I mean I can imagine only gone up since then and then you add in all of the people that are taking these knockoff drugs and there's no way to really track that so that's a whole other portion of the population that we don't really know how many people exactly are on those but we know just from sort of piecing it together ourselves that it's likely hundreds of thousands you know we had another story that's out uh on the Bloomberg about fiser following Lily with a sight selling directly to patent patients are we going to increasingly see this it seems like that's that's what I'm hearing from people in in the industry that this is a trend that after Lily launched Lily direct last year more and more pharmace pharmaceutical companies were like this is an interesting option and this is something it doesn't work for all drugs obviously but for something like migraine drugs which fizer has and which is going to be part of their direct to Consumer platform it makes sense for patients who are already sort of Googling you know does do is migraine drugs right for me and then they can go to fiser website and learn about it and sort of like be connected to to doctors there not so great for the pharmacy benefit managers and the large traditional pharmacies yeah I mean it definitely it doesn't cut them out entirely like the middlemen still exist and like I said Lily is partnered with and and fiser as well partnered with these third party pharmacies and telea health companies so it's not cutting them out entirely it's circumventing them and and not really going through these traditional channels so it's like it is interesting and and we don't know yet how this will change the traditional model it's like hooking at the model a little bit we'll see where it goes um thank you so much always always Madison Muller she's Health reporter at Bloomberg News check her out to on Twitter at G Going mad you should have read that a couple times exactly you're listening to the Bloomberg Business Week podcast catch us live weekday afternoons from 2: to 5:00 p.m. Eastern listen on Apple carplay and Android auto with the Bloomberg business app or watch us live on YouTube Hey folks we got a frh read on the US consumer this morning us consumer confidence Rose to a six-month high in the month of August as more upbeat views of the economy and inflation Tim offset waning optimism about the US Labor Market yeah measure of expectations for the next 6 month Rose six months Rose to a one-year high of 82.5 that was in August a gauge of present conditions actually edged up for another take on the US consumer we welcome back with us Sylvio tarz CEO of Vantage scor it's joint venture of Experian Equifax and Trans Union what they do is they provide Credit Data credit risk modeling and analytics he joins us from San Francisco Sylvio how are you great to see you Tim great to see you Carol great to be on again hey um how would you describe the consumer right now well the consumers become cautious and that's a market change in the most recent uh insights that we have for Vantage G uh credit gauge that we published this morning um the reality is delinquencies are up significantly um and also credit utilization is down so consumers if you look at the percentage of their available credit lines that they're using that's at a four-year low dropped to 51.6% for the most recent period and then if you look at it from the perspective of Banks Banks have also become cautious um they reduced their new credit accounts in the most recent period of July across every single credit category auto loans personal loans credit cards and so the reality is is that that sets the stage for a Fed rate cut because exactly what the FED wanted to happen a cooling in the economy we see that perfectly crystal clear in the latest insights that we have is this all manageable or does it said to you some warning signs about the consumer really heading into some trouble well for sure um the these are these are warning signs um particularly what we saw in Ju which is really right across the board um if you look at credit utilization um that's at a 4-year low the spike that we saw in late payments what we call Credit delinquencies the spike June to July in in credit delinquencies was the largest we've seen in four years so the consumer is flashing some warning signs um heading into uh September and uh that's exactly why the FED as recently as yesterday and on Friday in chairman Paul speeech they're signaling they're going to they're going to cut rates and um when we look back on this what we're going to say is this was the right time to do it so do you think that we'll see or you in your world will see an immediate reaction as a result of lower rates when it comes to the metrics that you look at Sylvio U yes U immediate is you know depending on the time Horizon you look at but for sure there will be an impact um this year um the challenge that the FED has is not whether to decide whether to cut rates or not they pretty much said they're going to cut in September the question now is how much um if it's too much they risk reigniting inflation if it's too little uh then of course that potentially means the economy will decelerate uh further and and the economy could slide into recession um and so it's a real um challenge to get that exactly right particularly in the context where consumers actually right now are cautious but as they look out over the next six to 12 months you know consumer confident is is quite High we saw that in the data also Consumer Credit Health overall is actually still pretty good the average Vantage score um credit score 300 is low 850 is high uh through the end of July it was 72 so consumers are actually credit healthy and they have the ability to take on more debt so I think it's going to come out that the FED is probably going to cut by a quarter point um and then see what happens and then wait till later on in the year to see if they need to do more um two things I am curious because it sounds like a mixed bag of data that I'm hearing from you mixed tones in terms of you know credit utilization as you said fell to a new four-year low credit delinquency spiking in July highest month over month jump in more than four years um who couple things so is there a net takeaway about what it says about the consumer because it sounded like earlier you said that there are some worries and some concerns here warning signs I think you said in July but I feel like there's also some things that aren't so bad so I'm not quite sure what the takeaway is and who are these consumers this Vantage uh this latest survey excuse me that you guys do the credit gauge data is it a cross-section of consumers can you give me some idea in terms of the demographics of who actually are in these surveys right and and so these are not surveys these are actual consumer credit score and it's across all Americans that have a credit report um so it's the most comprehensive um data set that we have about credit Health everybody in my control room they're we're all in there we're all in there we're all in there and um and in fact we score approximately 30 million more Americans than our next competitor and so the signs and this is what changed in July the the signs for the first time are actually consistent across the board credit utilization and the low number there shows that consumer are cautious and they think taking on additional is too expensive right now so that shows the economy is slowing when you look at delinquencies um increasing the most we've seen in in four years that's another sign that the consumer is cautious but actually hurting it's a sign that the uh employment picture is uh deteriorating and third data point when you see Banks reducing their lending Banks obviously in the business lending when they redo that that means that banks are also cautious and concerned about the risk ahead so all three warning signs show us very clearly the economy is slowing down consumers are ratcheting back and that's exactly what the FED intended that's why they kept rates as high as they did and now it's time to take the foot off the break and let the economy uh grow again and that's what we going to be doing in September hey syvia we are um all eyes on AI I AI because of Nvidia earnings tomorrow after the bell I I'm wondering on AI is that nice thank you you're welcome um is that how are you using AI Advantage score when it comes to Consumer Credit and and determining credit scores yeah and so this is one of the areas that you know there's been um not sufficient focus on the reality is Advantage score and credit scores are inherently an AI product we use Advanced machine learning to look at a consumer's um credit report over time we call that trended data and we have a algorithm that spits out a three-digit number if it's low you're not very credit worthy if it's high vage 850 um you are very creditworthy and so it is the use of AI but we do one thing which is very very important we always look at our algorithms and make sure that they are producing fair and Equitable outcomes and to do that we include all of the best data so we in fact the first uh credit score to include rental data believe it or not before us nobody used rental data in the credit score calculation we're also recently the newest score to actually use open bank account data open banking data we're the first to use that and that enables us to have a really good read on how um consumers are going to pay back their loans and also including the maximum number of consumers to pay uh to have a credit score I do worry though if if you know consumers are feeling a little squeezed and a little warning sign that if the FED lowers rates do people kind of start to like up again and spend again because rates go like I just wonder if that potentially creates some consumer problems going forward which means we will have to check in with you again syvia uh good to check in uh this time Sylvio Taris he's Chief Executive Officer of Advantage score joining us from San Francisco you're listening to the Bloomberg Business Week podcast listen live each weekday starting at 2 p.m. Eastern on Apple carplay and Android auto with the Bloomberg business app you can also listen live on Amazon Alexa from our Flagship New York York station just say Alexa play Bloomberg 11:30 all right so in the last hour we really just mentioned uh the Kelsey Brothers signing a big multi-million dollar podcast deal with Amazon there's a lots going on in the sports issue including if you check out the new issue of Bloomberg Business Week Shameless plug but there we go okay it's pretty awesome it's a takeover I think it's fair to say it's definitely a takeover and it really gets into the new age of sports betting where it feels like it's it was like many years in coming it feels like and then it just took off in a big way yeah it's come on Big Time where the state tax revenues are going how it affects the play and sports media some of the big players you know FanDuel DraftKings versus a tiny little company tiny little company called ESPN yes indeed all that and more it is a no holds barred look at how betting has devoured Sports which will be featured in the fourth comom issue of Business Week Magazine check out all the stories now on the Bloomberg terminal and at bloomberg.com businessweek all right overseeing it all Bloomberg Business Week senior editor Brett Bean he's joining us in our Bloomberg Interactive Broker Studio congratulations cool stuff as we all get ready for the US Open there's a lot going on certainly in the New York Metro go back though how this deep dive came about and how you and the team thought about what you wanted to cover I'm assuming Sports came up generally and then did you guys kind of like settle on this how did it come about yeah this little thing called the uh upcoming NFL season oh yeah that too small little thing that you know some people are interested in um it came about because because for anyone who watches sports like myself you now can't really watch sports without being completely inundated with ads for as you mentioned DraftKings FanDuel ESPN B bet 360 I mean we can go on and on but essentially every other commercial now is related to uh sports betting app and we thought let's take a look at this you guys have the numbers too to back this up it's not just that you're you know noticing more ads for this I was pretty shocked to see this carol last year Americans spent almost $120 billion on legal Sports bets it's a 28% increase from just a couple years ago yeah that's a big bump huge bump I mean that's basically we can trace this back to 2018 so 2018 the Supreme Court said that there can be sports betting outside of state of Nevada um we now have 38 states that have legalized it plus Puerto Rico and the District of Colombia so chances are you might live in a state where this is allowed except is not allowed in California actually at this point but yes so it's become much easier for people to do this as opposed to having to go to a casino fly on a plane go to a casino and do it now you pick up your phone you know I feel like there's a lot of different ways we can go but I am curious about what the impact is on the states and the revenue that comes into them and I'm also curious about what impact we're seeing on society before we dig a little bit deeper into some of the stories you covered like are we finding out that yay it's all great or or it's a little bit of a mixed bag it kind of depends on it sort of depends on who you ask I mean the states wanted to legalize this because of the tax revenue that it brings in um what we found is that you know a fairly small percentage of it is going to where you might want it to go which is to help people who have um problematic gambling patterns right a very small percentage of it goes there um a lot of it goes into state general funds things of that nature and in some instances it goes to some odd things like aquaculture um uh or or helping in very specific programs like helping to fight cancer in Michigan things like that okay but it provides some extra Revenue it does it is extra Revenue that's coming in um this is why the states wanted to legalize it um it's not always going in exactly where you might think it's going what about what it's done to the financial health of the folks in the states where it's legal yeah I mean in terms of the states where it's legal um there was a recent report actually pointing out um that this has led to delinquencies on credit bad debt all the things that you can imagine happening when you have not good when you have access to uh spending all this money on your phone yeah yeah not so good all right so tell us about I guess well we'll get ready for some studies in the future that will probably about the impact on society as a result what yeah well I don't know where you want to go there's so many there's so many places we can go well you so go through like some of the different stories and how you guys want wanted to approach it yeah so one thing we want to do is definitely get the players perspective in here so we talked to some current NFL players and some former NFL players and they love it well you know it's interesting I I was wasn't entirely sure what to expect but in many ways they're split uh they say on the one hand it's great for the league and it is great for the league right the league has Partnerships with these apps uh there's Revenue sharing with the players involved in that it's good for them um it keeps you engaged in the game long you could have a total blowout in the fourth quarter but if your particular bet is writing on something that hasn't quite happened yet or been determined you're going to still have eyeballs on the game eyeballs on the game means ad revenue and that's good for the league yeah and one of the stories I remember reading uh that's in this issue if if a fan makes a prop bet they're 20 times more likely to watch a sporting event if not just a prop at any bed right that's wild get for engagement it's huge yeah cuz you're screaming how many times is are there how many changeovers are there going to be how many times will we see uh Taylor Swift no just kidding that is a real that's a real I know it's the greatest engagement tool that there is okay so let's talk a little bit about integrity here because that's a big question that I know a lot of folks have and that was a really interesting story uh By Devin Gordon uh in the issue um how are how are companies making sure that pro sports players are not involved in these prop beds yeah so um one of the requirements is that they hire what's called a third party Monitor and we have a story as you mentioned by Devon Gordon about a company called us integrity that's one of the biggest ones um essentially they partner with the leagues to essentially Have Eyes on everything they're always watching at all times and they're keeping an eye out for anything during a game that might seem suspicious and I learned so much about what can seem suspicious where you wouldn't think just with the you know the untrained eye but you could have a point guard you know Crossing um Center Court who's sort of dribbling a lot without that moving toward the basket and they can look at that and say well is this guy trying to limit the amount of points that his team is scoring in order to hit the under on an over under um us Integrity um essentially sends out signals to the leagues like hey something might be a Miss doesn't it feel like AI is the perfect sort of tool to do something like this it it it does um and yet it does require like a tremendous amount of uh touch to it as well that maybe that hasn't come to AI at this point like in the jonte porter case which we look at you know um yes conceivably AI could have spotter spotted the because there was this weird correlation about you know these bets that were taking place on a separate platform well you know like uh if you were to go make a bet today you probably would put your money on somebody like LeBron James right that's who people bet on yeah even I've heard of him and I'm not right you have heard of LeBron I'm sure right um but to be placing a bet on a role player uh is that will immediately sound a red get a red flag that goes up so that's what happened that case and they looked at it once in January and said hm this is strange that all of the unders hit on all of the potential bets you could make on him let's keep an eye on this and then uh again in March when he did the same thing then they said okay something is is quite fishy here they notified the NBA the NBA did an investigation they ultimately suspended him for life but you know in order to spot that there's something maybe arai if you will is I'm assuming a sharing of data I mean the odds makers and so on and so forth who I'm sure don't want to share their information right so in order for this system to stay pure and have integrity right like people have to be able to make sure that they're seeing everything that's going on right and the the oddsmaker are in this position where they basically have to turn over all of their information to a company like us problem Integrity yeah and we quote one who's like oh yeah so you know who do I have to turn this over to oh there's only one company that I have to Great okay so it is a bit of a not I wouldn't call it a monopoly but yes they're not like thrilled about it but they also realize that they kind of have to do it and ultimately it does help them they want a window into this as well yeah exactly I mean I do wonder you know is is someone or is the takeaway that because it just increasingly there's more and more money I mean throw in college athletes who can now use name image likeness which I think is a good thing in different way but I just feel like the money just keeps growing in Collegiate Sports professional sports like at some point you know not that money ever corrupts but never at some point are we going to potentially see something really bad well I mean I'd say probably yes um I mean we're already starting to see harassment of athletes right pretty directly for let's say costing you on and over under bet um but I think you raise College which is a whole whole different universe and a whole another ball of of problems for everyone basically because the prop bets which are very very difficult to police or even harder to police in college if you think about it if you're an athlete in college you're living with eating with going to class with other people and they could notice hey I notice you have an ankle brace on today does that mean you're not you're not playing tonight well if they if an athlete were to say yeah I'm probably not going to well that person might say well I'm going to bet the under on your points tonight it's so easy for information to see out and they're frankly terrified of it and of this happening well you raised a question that at least I'm asking this question why is it allowed in college athletics well that's a really good question because there's a lot of money to be made basically I mean there are different states that have different rules around some of this stuff like there are certain states where you can't bet on an instate team um there's a lot of money to be made unless you're a player there is a lot of money to be made unless you're a player although interestingly when we were talking to the NFL players you know they're getting uh Revenue sharing from the the deals at the higher end but some of them have actually said hey if somebody's betting $10 on me to do something shouldn't I get1 dollar of that shouldn't I be getting a percentage of that and I wonder if that's not going to come up in a future CBA it's unbelievable just a lot of money um where do you want to go next wherever you would like to go I want to talk a little bit about the platforms that are dominant right now um DraftKings in FanDuel over the last few years don't forget ESPN well they're trying and that's that's the thing and that's what's so interesting because that's a Disney owned company and you know um it's the most magical place on Earth uh and I know it was such a big deal uh gosh in the last 18 months or so when ESPN when Disney owned ESPN got into this because okay it's not necessarily part of Disney's identity we can talk about that part but FanDuel and DraftKings were supposed to they were supposed to merge years ago and be the same company that didn't end up happening um what does the landscape look like for these platforms yeah um so we call it a duopoly in print you've got um FanDuel and DraftKings that run about 75% of this Market uh really you know they got first mover Advantage I mean they were huge into fantasy sports and so they basically had their name made by doing fantasy sports and then when sports betting became legalized they started doing sports betting um so they're really like front and Center there's what most people use you know it's funny one of the reasons that most people wind up using them is because they see other people posting wins online they say oh well where did this guy win oh FanDuel draing okay well that's the one that I should be on um they also just tend to offer like the most number of bets you know if you're looking for over unders like for instance in the Stanley Cup last year um on one particular beted or night they I think had eight and some of the other sites had three so you know if you if you want to make eight over under bats versus three they're really going to be the the place to do it they off also offer a lot of customization so they offer customized parlays at a rate that other sites don't and you know essentially they're like in many ways the the kleenex of the of this industry they're just sort of the name brand that everybody knows does that mean Disney isn't committed to getting more of this business no they are I mean and and Disney would argue like look our our our ESPN uh partnership with pen entertainment is only a year old like let us let us cook here give us a give us a chance they're at about 2.8% right now um according to them they're were they're uh were they you know expected to be at this point but it is very hard to gain market share on these larger companies hey where do you want to go push back go ahead the idea that maybe some might think this is not so good for the industry um well which I mean if you're talking about the sports gambling industry is great for them right not so good sports literally all in not so good for sports um yeah I mean this is more in in society there are folks out there who say this is not good for society I think they would have a very strong argument that betting is is can get out of control and that some of the um ways in which you'd want to reain that in are are not as funded in a robust manner but um you know the leagues basically have all made the decision in the last since Adam Silver's OPB in the New York Times saying that it should be legalized essentially to say okay you know we're in they don't the leagues don't want their product being monetized by someone else and then then not getting a cut of that right so there's no turning back at this point that's just that's just not going to happen well and what's interesting there's another story that how it's impacting also Sports writing uh the media side of it right it's just interesting how it's infiltrated the tentacles have been felt in so many different aspects there is a whole ecosystem surrounding this right now if you turn on ESPN during the day there's a betting show their betting experts are on other shows the ticker at the bottom of any ESPN show is going to have ESPN bet bets in it so it's it's inescapable I always think about like athletes of decades ago or something being like what like uh yeah like we crossed I'm not a betting man Carol you are not a betting man let's just say that well done well done incredible Brett Bean thank you so much unbelievable uh Deep dive in the new issue of Bloomberg Business Week Brett of course is Bloomberg Business Week senior editor be sure to check it out online on the Bloomberg and also on new stands you're listening to the Bloomberg Business Week podcast catch us live weekday afternoons from 2: to 5:00 p.m. Eastern listen on Apple carplay and Android auto with the Bloomberg business app or watch us live on YouTube well our next guest has been at the Forefront of the trans from analog to digital particularly when it comes to music here's a little bit of his background so more than 30 years ago he was the founder and webmas when that was a thing of beyb boys.com he was then at the company behind Winamp which was the first way that I and I think many people who are over the age of 40 now listen to music on their computers yes eventually he became CEO of Beats music about a year and a half before it was sold to Apple for $3 billion after a stinted apple he found himself as Chief digital officer at lvmh the $374 billion doll market cap parent of Louis Vuitton di Sephora Hennessy and more now Ian Rogers is Chief experience officer at Ledger it's based in Paris they're a digital asset security company he joins us here in the Bloomberg interactive brokers Studio Ian how are you I'm great thank you thank you for that amazing intro well it's good to see you I did skip a few years in there but I did include it because I'm wondering if you see any parallels over your career digitizing music to what you think is happening when it comes to digitizing real world assets I I think so many I think and I think that's the right way to think about it you know I think you know the internet was fundamentally a a revolution of information right information used to be okay how many magazines can you rack at the Hallmark store and how many channels are there on the FM dial and how many channels on television and that expanded over time we got satellite and we got VHS Etc but the internet was just like you know anyone could register a domain and and start you know yahoo.com and who knows what happens when you know when you when you do and I think with you what we have now is a revolution of value um and and I think that that that will have an impact that's at least as big on Humanity as the internet has had um you know I mean obviously value is is important in our lives and I think it will it will be that far-reaching as well you know it's you know used to I remember in the 90s you know there was sort of like this is going to change everything or this is going to change nothing it really depended on which side of the fence you were you were on and in the end it touched everything right uh and and many of the business ideas which were laughed at in 1999 you know are things like instacart today right because in 1999 we had all of the ideas right web van didn't work in 99 but instacart worked today it works today and I think there's there's also that one of the things I learned from that is it sort of takes 15 years for these things to germinate right I remember you know playing with trying to get content in my living room you know in in the late 90s um because I'm a geek and and I you know chipped an Xbox and like was trying to download movies off the internet and watch them in my living room fast forward to 15 years later when my mom calls me and says oh I canceled cable and I only have Roku and that's just how long it takes from the idea to it really reaching mainstream so to me that's the lesson and I think similarly many of these ideas that were like this is going to change everything in 2021 in kind of this web three boom I think if we fast forward to 2036 they'll be they'll be right there they'll be more mainstream before we talk a little bit more about 2036 so is it not only the ideas catching up but the technology catching up to make it absolutely really easy to do and the user experience right I mean today you can say Hey Siri play The Beatles right and you know Paul McCartney and John lennin come out of your phone right but I remember in the 90s it was you know when I started at Winamp I started there because I was recording sound files from the soundboard at beasty boy concerts and then uploading them as this new thing called MP3s but you had to be really specific you had to start with okay you have to buy a sound card for your computer and then you download this program called Winamp and you know it was incredibly hard to use you know and I remember the days personally when you didn't say like go to my website you said there's this thing called the internet and if you get a computer and a modem and an ISP and a web browser you can download an ugly page very slowly right and and so I can understand why people would say who wants that right you know so there's a long walk though from there to what we have in our pockets today and I think that's the same thing in this revolution of value that people have a hard time seeing like look I paid to come over here on the Metro on the subway you call it here in New York um with my credit card right that's a very inefficient tool for micro payments credit cards were not meant for micro payments it's I don't actually need credit what I need is digital cash settl that's very cheap right that's not what the Visa Network provides okay so enter what you're working on at Ledger right now because I think a lot of people who have heard of it and in correct if I'm wrong but six million of these devices are actually out 7 million now out there in the wild I think a lot of people think about it as a way to a wallet for your cryptocurrency um but a lot of people don't not many people actually use cryptocurrency to transact they see it as a store of value um but you see it as something much bigger than just storing your digital money yeah what Ledger fundamentally is is a way to protect your secrets right so we know that our phones and our computers are very bad at protecting Secrets it's not what they were designed for they were designed for performance and they're good at at you know playing games and many many many other things but security is not what they're best at um and so Ledger is fundamentally we use a technology called chip and pin which you have M you have multiple of in your pocket so your your credit card and your passport both use chip and pin technology to protect the secrets of the bank from you or the secrets of the government from you Ledger fundamentally uses that same technology to protect your secrets so we have new devices one of which was designed by Tony Fidel Ledger Stacks another one um quite easy to use called Ledger Flex to your point about things getting easier to use um we have a a a a recovery service for those Secrets called Ledger recover these are all meant to bring this you know this protection mainstream and put it in the hands of more people and not only can it protect your cryptocurrency and your transactions but it can also protect your passwords your two-factor authentication pass Keys you know passwords is a problem for every internet user right so five billion internet users have a problem with security and a problem with pass with passwords and Ledger is an incredible tool now um to you know to to protect your secrets so that could be your digital value it could be your digital property right or it could just be your Digital Life you know digital secrets I almost feel like it's a thing we've always wanted for like healthcare right to just put it all there I we've actually been pulling it up for those who are watching on our streaming service and on YouTube um and I think it'll show the device so that's this is the device right correct so this is ledger Stacks uh which was designed by Tony Fidel Tony being the inventor of the iPod and the co-inventor of of the iPhone and what Tony wanted to create with this product was something that really a communicated value so it's the size of a credit card right um it's sort of like a two metal credit cards stacked on top of one one another but also there's Tony he was his question was what does a future stack of cash look like you know that stack of cash with the band around it so he used a new technology um that's this it's this eink technology it's it's actually a plastic screen so where a Kindle screen is silicon on glass this is an organic substrate on plastic and then you get this 180 Dee Bend so the screen actually goes all the way around the spine of the device and then they're magnetic like magne tiles I don't know if you're if we have many magne tiles at home they're so much fun right and so the stacks are that sort of satisfying in that same way like playing with a stack of poker chips is satisfying but they magnet together like magne tiles and then you get that stack of cash look with the the curved screen on the spine all the way down so it really is a luxury device for security so give us an idea so Tim and I would put like or you know Tim might put on his or what I would put are we what would we put on there so what you would do um generally speaking let's I'll give you how an average LED Ledger user or or a sophisticated Ledger user might use their their devices so they they probably have a couple of them you know one is for for maybe um longer term storage and one of them is one they use every day and they're maybe a little less they're a little more promiscuous with in other words if you're doing a lot of activities online every day you want to have you know your kind of like big bulk of value in one that you touch less often and you never connect to the web and you have what I would call a mint wallet which you're using to interact um with the internet of value more often maybe it's one that you have even when you're walking around and you want to use it to spend a little bit of money or something um and then the other thing that you're doing and this might be on that same one or it could be on on a third is one that you're using for your your passwords and your logins right so for me whether it's my um you know my login.gov account my Google account my X account my you know two-factor authentication is not my mobile number which we all know is not secure because it's it's susceptible to things like Sim swaps right um that but you know it is my ledger which is you know using you know using a secure element chip inside of this offline device don't you need to get buyin from all those thirdparty services that use two-factor authentication right now in order to authenticate using a ledger it's a great question and the answer is no because it's a standard right so that is all standard uh TFA you know there other whether whether it's um you know often now that's connected with your face ID on app apple or with your thumbprint maybe on your Samsung phone or your one password software might be using that same protocol for TFA and pass Keys Ledger uses the exact same um standard to do that which is TFA and and pass Keys which is based on the standard called F2 does this replace a password manager it you know not necessarily um but it does some of the same functionality so your your password manager helps you manage piles of passwords so look at the way the average user is using passwords right now there's usually there's there's only two approaches either very bad password hygiene which means you're using the same password for everything which is probably the majority of people right or there are more sophisticated users that that have sort of centralized that risk in the password manager but it's still a mess it's still it's and it's still difficult like look the simple the amount of times that you know even if you have good P good practice meaning you're using a product like like one password the amount of times that you're going into that thing to get those passwords is kind of Asing and it shows you you know it's funny there's a I can't remember who said it but like we we just kind of become we accept like the way things are broken passwords is something that everyone agrees with we're all operating in a very like broken Universe there are only two options either really sort of The Nightmare of of good password management or bad password hygiene you know um Joanna Stern from The Wall Street Journal did some great reporting end of last year about what what you know about iPhones getting stolen and you know iCloud accounts getting stolen I think Apple actually made some changes uh that were prompted by that series of St exactly and pass Keys is a move away from that right so you know and that's why Google and and apple are both embracing pass keys and and going to you know having Face ID it's much more secure to do that with Ledger just got about 40 or 45 seconds left here so like what does it take to get like a complete Buy Buy in from like a broader Mass Society to make this ultimately I'm assuming you want to build it and and have a so I think usability is a big one and I think with Ledger stacks and Ledger flex and Ledger recover we're heading we're heading toward a product where more users can do self- custody right and that means self- custody of digital assets so I think what this takes is adoption broader adoption of digital assets which is which comes in phases and and it's it's coming again we have another phase phase coming I think right now um and then you know having more and more uses of these digital assets in our lives right so not just speculation but uses of digital Assets in our lives Ian Rogers visiting us from Paris here in New York City chief experienced officer at Ledger here in our Bloomberg interactive brokers [Music] studioadi how about you let me drive oh no no no no going drive home honey please I'll do the driving drive on excuse me I want to drive it's the question that drives us this is the drive to the close the punk music will drive us until the dawn on Bloomberg Radio all right everybody just got about 18 19 minutes left in today's trading session and we are seeing uh the S&P 500 just up a hair you just heard Amy breaking down uh some of the trade which I think I think puts the S&P I think like shouldn't I know this um because we did see what the S&P clothes you were on vacation you don't need to know this but I do follow but I do follow uh but we continue to hover around Rec this uh realtime charting with Carol M it's a new program only I could be like Abigail doitt uh yeah so just watching the trade here and we'll see where we end up but I mean I do feel like we're just at this again awaiting point because we want to get through Nvidia earnings do we do want to get through it and kind of like figure out what the next catalyst is going to be right well I think it's going to be a few economic data points right inflation jobs report and then you get the FED decision come September okay Let's uh think about what Emily Roland has to say co-chief investment strategist for John Hancock Investment Management joining us from Boston what is interesting to you right now Emily well of course tomorrow we're going to get the earnings report that's heard around the world and I think that's what markets are more focused on right now we've seen Tech take a little bit of a breather here and I think the key thing that investors are watching is you know if Nvidia does disappoint could there be a broader rotation into other parts of the market when an entire stock is the size of an asset class and remember this stock is bigger than the bottom three sectors in the S&P 500 there's a lot of money that's potentially in motion there that could benefit other parts of the market so I think that's really the key of course we've got more economic data on the docket as well but I think it's really that earnings report tomorrow that investors are worried about and then we can just move on and go straight into that long Labor Day weekend yeah it is kind of interesting right we kind of just go from these like points to points or metrics to metrics Catalyst to Catalyst um so what do you do for investors what do you tell them when they call you up and they say hey Emily what what should we be doing right now in today's environment we talked earlier as a preface or backdrop with our jeta Martin Adams about like looking at bonds and stocks in terms of you know returns and valuations and you know there are opportunities on both sides there are and one of the nice things right now is that bonds are working as diversifiers we're actually seeing the correlations between stocks and bonds uh move lower and that's been one of the biggest challenges for investors over the last couple of years is we've had sort of you know Enemy Number One which is inflation wreaking havoc on fixed income investors uh not being great for Equity markets during times where rates have backed up now we're in this environment where bonds are working again and and stocks are are behaving nicely here as well so that's a really big benefit for investors um we do think that the the bond market sort of has it right here we see an environment where inflation de accelerating growth is slowing so we want to be kind of mindful of positioning for this late cycle environment by owning high quality stocks these are companies that have great balance sheets they have tons of cash great return on Equity right now margins are getting compressed you're seeing this amazing earnings and revenue growth that we saw over the last few years as companies passed higher prices along to Consumers that's starting to slow at the same time as the cost of capital Still Remains elevated so that's putting a ton of pressure on margins we want to own the types of companies that can defend margins better um if you look at quality as a factor it is going to bring you into Mega cap tech companies that's great but we also have a bit of a valuation issue there there is some frothiness in the space so we want to diversify away from that by also owning quality at a reasonable price I think we came up with that term I'm still trying to figure it out but you get the idea we want to look to the value side for areas that are trading on salees sectors like healthc care are trading at a 10% discount to the broad Market it's got great earnings revisions and then finally we want to start legging into some more defensive areas of the market here we are seeing signs that the consumer shifting their behavior we think that consumers might not necessarily buy the next thing they want to buy um should tell my kids that's happening um because you know credit card interest rates are 20% right now we're dealing with some challenges we saw in the um consumer confidence report today that people are are less positive about the jobs Market jobs plentiful um is going down in terms of those views so we want to look to things that the consumer still going to need to do you're still going to turn the lights on take a shower you're going to go to the doctor so I think looking at more defensive areas like utilities make sense and then finally to your point letting bonds do some more heavy lifting in portfolios given the yields are so elevated there so where don't you want to be I know we love it all right so one of the things that we that we've seen is actually this shift into more cyclical areas um that's something that we're actually looking to fade here so what you've seen is that because of this concept that the fed's going to be cutting so aggressively especially versus other central banks the dollars weakened and in a weaker dollar environment that helps support things like International equities it's almost like a global liquidity release valve that helps riskier areas outperform we've seen this bid until really today uh for small cap equities um that being again a function of investors perception that with the FED kind of cementing those rate cuts at Jackson Hall last week that that going to bring the cost of capital down which would benefit the most indebted companies which you're going to find in small cap equities we actually don't see that we see slowing inflation coming hand inand with slowing growth which isn't the greatest thing for more cyclical companies or ones that are more exposed to the economic cycle so we would be fading this move into areas like International stocks not that we don't own them it's just not our favorite part of the market because of our preference for Quality we'd be fading this move into grow at any price type companies and again loading up on higher quality and potentially more defensive parts of the market in an environment where growth essentially does slow we do see an economic contraction you want to be positioned for that is there anything out there that's concerning you about a potential economic contraction just in the last 45 seconds we have with you it's tough to see it right now um and you know certainly markets are still sunning themselves on soft Landing Island but things don't usually end that way typically you see the FED going too far too fast you start to see those cracks in the consumer and sometimes you don't know it until it's too late we look at things like initial jobless claims it's being one of those most timely indicators no issues there but if we saw that breakout above say 300,000 that would be a concern it would probably go hand inand with how you Bond spreads widening out those are the types of things we're watching again not seeing it right now but the music can stop pretty fast here and we want to be mindful of that and as we head into a trickier stretch for the markets Emily Roland co-chief investment officer Co co-chief investment strategist excuse me for John Hancock Investment Management joining us from Boston this is the Bloomberg Business Week podcast available on Apple Spotify and anywhere else you get your podcast listen live weekday afternoons from 2: to 5:00 p.m. Eastern on bloomberg.com the iHeart Radio App tune in and the Bloomberg business app you can also watch us live every weekday on YouTube and always is on the Bloomberg terminal [Music]