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Pinpointing the genetic changes that predispose us to disease Identifying the roots of mental illness Treating congenital anomalies even before birth. At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults. Tomorrow, as home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes. For answers, learn more@bostonchildrens.org this holiday season.
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Hiscox Small Business Insurance Knows there is no business like your business across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote@hiscox.com that's hiscox.com there's no business like small business. Hiscox Small Business Insurance Bloomberg Audio Studios Podcasts Radio News this is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Massar and Tim Stanweck on Bloomberg Radio Hey, President Trump, as you know, threatening to fire or do mass firings of federal workers as the US Hurdles towards a shutdown With Democrats and Republicans at an impasse over funding the government, that shutdown would happen at midnight tonight. For more at what's at stake and who may be pulling some of the strings on what may happen at the executive branch if indeed a shutdown happens. Nathan Dean is with us, Bloomberg Intelligence Senior Policy Analyst out there in Washington, Washington, D.C. and right here in our New York studio, Max Chaffkin, co host of Everybody's Business Podcast, author of the Contrarian Peter Thiel and Silicon Valley's Pursuit of Power. Nathan, I want to shoot it out to you first. Where are we on the shutdown? What might cause this actual shutdown? What is it that the Republicans want or won't do? What is it that Democrats want and won't do?
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C
So right now, both sides aren't really talking to each other. They're sort of in this weird wakening game at the moment. As we get closer to midnight now, I think the Democratic, from their perspective, there are two wants going into this shutdown. The first is really being driven by the House progressives and that is they want to be seen being very tough in combating President Trump on his policies. The other thing they want is they want an extension to ACA or Obamacare subsidies that are going to be expiring at the end of the year. From the Republican perspective, their wants are a little bit different. They've already passed via the House what is known as a clean CR that gets us through November 20th. And generally speaking, the party that passes that clean CR feels that they have a moral high ground. Now, I woke up this morning thinking there was a chance that we would not go into a government shutdown and that something would happen to make a deal. But as we get closer and closer to midnight, it begins to sound like both parties feel that they are in the best political position possible and that both sides think that a shutdown will end up helping them politically. And that's usually what happens when you have a shutdown. So if a shutdown does occur, we'll wake up tomorrow and we'll have to deal with the short term impacts. Cuz I don't think this is going to go more than a week or so. I think really the next real negotiation point if the government shuts down will be next week when the House Republicans return.
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D
Well, Nathan, what are the political implications of a government shutdown? You said both sides think that a shutdown will help their own side, but what are the implications? We have a little bit of history to look to.
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C
Yeah, absolutely. I mean, one of the best case scenarios is go back to the Tea Party of October, I'm sorry, of 2013. And there's this very similar playbook that it's happening to that now. From the Democratic perspective, you know, they want to be able to essentially combat President Trump. Their approval ratings, not that good at the moment. And you know, there's plenty of time between now and November 2026 to be able to turn that messaging and at least start to build momentum off to that. Now there is some local politics here at play. Virginia, New Jersey, both have governor races in November. I would anticipate if President Trump and the Office of Management and Budget were to begin to follow through with mass firings of government workers, that's going to impact Virginia and Maryland pretty significantly. I would expect those policymakers to come in and say, maybe we should stop this and turn things around here. But if the shutdown occurs and Democrats start to take the blame, then I think you'll see those politicians in Virginia and New Jersey get a little nervous.
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A
It's like you just delivered a ball into my court perfectly. You mentioned the omb, which takes us to Russell Vote, Max. You wrote an in depth profile earlier this year back in April. It was a big take. You talked about the architect behind President Trump's imperial presidency vote. Not usually out in front in the Oval Office or at a White House press conference. And yet he was yesterday afternoon along with the Republican leadership. He was front and center. He went to the mic, made some comments outside the White House after that meeting in the White House with minority leaders. Tell us about, remind us who this guy is. He's very, very influential when it comes to the Trump White House.
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E
Yeah, as you said, Carol, he is the head of the Office of Management and Budget. But I think more importantly, he is one of these kind of behind the scene intellectuals who helped shape this presidency, who worked on Project 2025, who basically, after Trump's last term, spent four years essentially planning for what this presidency was going to look like. And Trump, and we talked about this a lot, you know, at the beginning of the year. But Trump was unusual because, because all these people around him had a long time to plan. And a big part of the plan, of course, is, is massive cuts to the budget and massive cuts, crucially to the federal workforce. We saw a little bit of that, or more than a little, I'd say, with, with Doge and Elon Musk's efforts. And, and there, and this has been going back and forth. But, but the, but a budget shutdown, a government shutdown would be a huge opportunity for vote and for people who, who are sort of aligned in this direction to do something that they want to do for a very long time, which is essentially take a bite of out of the federal government.
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D
So what is this opportunity, Max, for him, for his role at OMB, but also his role in Project 2025 and shaping what he wants the presidency to look like?
- [06:55]
E
So the ideological idea is that there is this kind of like fourth branch of government. Like, you know, you sometimes hear people talk about the deep state or something like that. This is the idea that there are civil servants who are operating outside of the realm of the president who are just doing whatever they want. This is an attack, of course, that Donald Trump sort of pioneered during his first presidency when he would complain about the deep state and votes idea is to weaken this and weaken it both by making it more responsive to the president. And like, that's a key point when you hear people talk about the unitary executive idea. It's the idea that the president, not these, quote, unquote unelected bureaucrats, should be deciding what the government does, but also because there's going to be. They've wanted to fire people for a long time, and you're gonna have a government shutdown. You could imagine Vote and others inside of the Trump administration seeing this as an opportunity to something very drastic and blame it on the Democrats and be able to say, hey, this wasn't because it didn't really work during the Doge episode because people got mad at Elon Musk and, and you had a lot of Democrats sort of beating the drum about saying, oh, you're waiting. You're waiting for Social Security to talk to somebody at the Social Security office. That's Elon Musk did that. And that. That made Musk very unpopular. It also caused Trump to kind of back they. He had talked initially about using a chainsaw, and then he was like, oh, no, we're actually. It is a scalpel. But now if we have a government shutdown and the Trump administration is able to blame it on Democrats, then maybe that gives them the ability to try to do something more drastic they weren't able to do earlier.
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A
So, Nathan, come in. How exactly do these job cuts work in a government shutdown? And this isn't just something specific to a Trump White House, right? I mean, does any president have the ability to. To cut jobs, cut costs, if you will, in a government shutdown?
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C
Well, you know, obviously this is a new legal issue that's going to most likely come up if it happens. But one thing that we've already noted is that Russ Vogt, when he's provided guidance to agencies in terms of deeming who is essential and who is not essential, he said specifically that those individuals that are working on reduction in force plans should be deemed essential. And there's this theory out there that if the Congress isn't available to essentially do its job, then the White House has to come in and step in and do it for them. So I would say, though, that is that right now we're in the state between the Republicans and Democrats where both sides are essentially talking past each other and there's a lot of threats going on. But I would also remind folks, the Doge cuts weren't popular with just the average American because of the reasons Max was laying out there. And so even though you're hearing threats like 750,000 government workers will be furloughed and a lot of them may not come back, there is this ultimate decision that's gonna be made by the president. And if Congress comes together and makes a deal by, say, early next week, I think they'll be able to get in front of the OMB and stave off a lot of these job cuts.
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A
But it does make me think, Nathan, about the power of the purse and the whole idea of a balance of powers. It's why we had these three different branches of government. Right. And what does it mean if ultimately, though, the power of the purse is not in the hands of Congress?
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C
Well, and this is what the Supreme Court is sort of moving forward with at the moment, with this idea of being able to claw back unappropriated funds and in this pocket rescissions that we saw come forth right before the month of September. And what I would say here is, is that Congress obviously does not like it. Republicans and Democrats alike do not like it when the White House decides that, yes, you've spent all this time appropriating and we're just gonna claw it back anyway. Which is why I think eventually we could be in a scenario where this government shutdown may be the norm over the next few weeks. Because even if we get a deal, if it's not going to be a 12 appropriation bill sign off full budget like we haven't seen in many, many years, it's going to be another kick of the can. And as we get closer to November and as we get closer to March, meaning the end of these Obamacare subsidies. And then further into the election year, both sides are going to want to pay play for more political points. And so even if there's a deal that's done next week, we could be talking about a shutdown again in early 2026.
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D
Hey, Max, you wrote this story back in April about Russell Vogt. To what extent is his vision for government coming true right now? And how much does the government shutdown play into that? Well, I think provide an opportunity point.
- [11:17]
E
That this is, this is still in flux. And I think there's a question about. It's true that Russ vote and people who are aligned with him would very much like to drastically cut back on the government. They don't care if it's, if it's politically unpopular at the moment. Trump, of course, cares a lot about that, and we've seen over the years that he is, he can be responsive to, to pushback from either constituents or polling and so on. And so I think that's, that we're going to, we just don't, I think, know how this is going to play. I will say the question of, of the courts, like Vote has, has basically said that they plan to challenge this thing called the Impoundment Control act, which is a 1974 law that Congress passed, essentially forcing the president to, to spend the money that had been appropriated and then creating this mechanism to ask for rescissions, like a legal mechanism. Vote has said they're going to follow the law, but he's also said that, that the law, he believes that the law is unconstitutional. And so that could be where this is heading, like a, a legal battle that will, will pit essentially the Trump administration against Congress.
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A
Hey, last question to you, Nathan. We have a terminal user sending me a message and I think this is a fair one because he writes in both sides have said the bloated federal government needs to be trimmed massively. Why should anyone be against that? I mean, there is something to that. And you know, it kind of begs the question, why can't everybody get along and figure out a smart way forward? Just got about 30 seconds here.
- [12:47]
C
You know, if it was easy, they would have already done it. I mean, we're talking about the Federal Register has over 430,000 pages and this is all the regulations. So if you have to go through and you have to decide what to cut, you have to comb through 430,000 pages and, and ultimately decide if you're going to cut something. It doesn't break a statute or a regulation. It's just not easy because both sides said they would want to do it, but if they wanted to do it, they would have already done it.
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E
Yeah. The answer to that question is voters, voters don't want a good cut. And when they've showed it over and over again.
- [13:17]
A
Right, Exactly. Just, yeah, somebody else, but not in, in my state or my territory, guys. Unbelievable. We wanted to do this yesterday. We had a lot of news flow. So glad we could have you back. NATHAN dean, Bloomberg Intelligence Senior Policy Analyst Max Chaffkin co of the Everybody's Business Podcast, author of the Contrarian Unbelievable.
- [13:38]
D
Stay with us. More from Bloomberg businessweek Daily. Coming up after this.
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A
Pinpointing the genetic changes that predispose us to disease. Identifying the roots of mental illness. Treating congenital anomalies even before birth. At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults. Tomorrow, as Home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes. For answers, learn more@bostonchildrens.org.
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B
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- [15:15]
D
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A
You're listening to the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. We want to continue with the air spend and so much more when it comes to the market environment. So great to have Back with us Kevin Gordon and Chief Investment Strategist for Charles Schwab right here in studio. There is so much coming at us. Let's start big, broad and we'll get into AI. What do you make of this year?
- [16:53]
F
Well, I think that in terms of the Market's returns. I mean that has been, you know, a dominant theme. If you look at information technology as a sector, communication services as a sector, you know, those are the two top performers. Utilities has also done quite well and pulled away from the defensive pack, if.
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A
You think about is kind of interesting.
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F
Yeah, utilities, Staples, health care, kind of being that trifecta defensive play, I think that that has pulled apart over the past couple of years. So it's not just a year to date phenomenon. But you know, there have been other parts of the market that have done well. So it's not just the AI story in terms of a couple of companies or a handful of companies that are performing well and the rest of the market is not doing well. There is a difference, I think, and an important and a positive distinction versus maybe a year and a half or two years ago where there was more of a fraying, you know, for the other 493, if you want to think about it that way, where there wasn't as much participation. I would say breadth has held up relatively well. Especially, you know, post Liberation Day. We've yet to have an instance where the percentage of companies in The S&P 500 trading above their 50 day moving average has fallen below 50%. So despite some of the, you know, rumbles over time, even some of the corrective activity under the surface we saw in the summer, it's still been a fairly good year if you were to date it, maybe post April 8th level.
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A
But it was a rough ride.
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F
Oh for sure, a little bit of a bumpy ride, the opposite of last year. But that's how we've been thinking about markets in this, in this next phase of the bull market. What we've been telling clients is that don't get accustomed to what 2024 was, where you had kind of minimal scarring and volatility at the index level. But that was just really masking a lot of turmoil under the surface. We think that the. Not that we think we get a 20% drawdown every year like we did earlier this year, but that's become more of the norm that kind of chopped happiness.
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D
So let's go under the surface a little bit and talk a little bit about what we were talking about with, with Ed Ludlow just now. This idea of circular financing where there is a little a relationship between the companies that are investing in one another. It seems to be the same names coming up time and time again. They're customers of each other as well.
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F
Yeah.
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D
Is that a risk to the public markets?
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F
You know, it's funny, Liz Ann, my boss and I wrote about this in our in a report published yesterday about AI and at the bottom of it, we included, included a quote from Warren Buffett that says nothing sedates irrationality like effortless money being thrown around. And there is an instance of that or an essence of that where, yes, you could look at a lot of this sort of circular financing, as Ed and you guys just discussed, you could say there is a risk there. I actually always point to the fact because you often hear people who are very bearish saying, look at the concentration in the market. This is so unhealthy to have 10 companies in the S&P make up 40% of that index. You'll have the bulls come out and say. And defend it and say, well, their earnings share has also grown. But you could look at that both and say, well, there's concentration risk in both areas, meaning if the earnings for those large companies start to slow or in the worst case, reverse, then you do have a material risk to the market. But I will say, if you're going to compare it to other periods, because I think the proxy and what a lot of investors do today is compare it back to the late 1990s, which.
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A
Makes me wonder if that's even right. But go ahead.
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F
Yeah, I mean, I think there are so many differences in the economy, so many differences in the market that you have to pay attention to, which are not, you know, they don't provide the evidence or the support for that direct comparison. I will say, though, I think the one lesson to be learned from that period or any period where you go through some kind of craze, if you were to single out, you know, the beginning of 2000, as an example, if you looked at the largest companies in the market at that time, you know, at that time was sort of the big five that were in focus. It's not that their earnings just reversed and went negative. It's just that they couldn't keep up with that rapid pace of expectations and the expectations that kept getting ratcheted higher. So earnings in these kinds of parts of these parts of the cycle, it becomes more of a game of expectations and where you set the bar versus actual results just coming in positive. I think there's a really important distinction because you can get a lot of hype associated with that in terms of market performance.
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A
So is that you saying then, Kevin, that the AI thing is real, it's happening, but folks, maybe, you know, reining your expectations a little bit.
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F
Yeah, because I think there are enough Divergences. And I feel that the post pandemic economy has really just been k shaped the entire way. It really feels that way, especially when we go out and talk to clients.
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A
Great if you're on the upper leg, but not if you're on the lower leg.
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F
You're generating income from assets. If you have a significant expo part of your wealth tied into markets, of course you've benefited a lot. But there are a lot of people that have struggled considerably. And I mention that because you can look at that split and there's so many ways to do it and slice and dice it, but you can look at what's been done on the AI capex spend side of the equation for something like gdp. And then you can look at the slowdown in the hiring rate, nonfarm payroll growth, the uptick in unemployment that you've seen for certain segments of the economy, particularly youth unemployment.
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D
Yeah, you were, you were saying posts about this just a couple of weeks ago. This is something you've been focusing on a lot of.
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F
It's a huge focus for me. Of course I'm biased because you know, a lot of my peers and friends have been impacted by it. But if you just look at the increase that you've seen in the unemployment rate for the 16 to 24 year old cohort that has risen at a pace that is only consistent with recessions in prior instances. And I do think that there is certainly a unique nature to the cycle this time where there are so many indicators that have told us recession, recession for years now and it just hasn't happened. So I do think it is in keeping with this rolling recession nature that we've talked about a lot and written about a lot over the past few years. But there are definitely cohorts of the economy that have been struggling. So I think that if that continues and you get more labor weakness from here, it's going to be harder to, I think just say and point to AI being the only thing that holds up the economy. I do think it's been a significant driver statistically. Mathematically that has been the case. But if labor continues to soften from here, then you do, you know, you run into more, more issues.
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A
So then you agree with the Fed recent rate cut and that should the Fed do more?
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F
Well, I mean there's often a big difference between what we think they should do and what they will do. What I think that they will do, I think there's probably a cut or two left. But at the same time, I mean you read all of the commentary in the comments this week, just in the past couple of days from Fed officials, the ones who are voting, who are actually, you know, making the policy, they've pointed out almost ad nauseam all of the upside inflation risk that still exist in addition to, you know, downside labor market risk, of course. But I also think that, you know, in terms of inflation expectations, which I will say in fairness for now look relatively stable. They don't, you know, they're not setting.
- [23:08]
A
Any alarm bells, but not at the Fed's target.
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F
Right. So if you're the Fed looking at this where, you know, potentially by the end of next year they could be 70 consecutive months above their 2 and 2% inflation target. And if the labor market doesn't completely collapse and go into a recession, that would necessitate, you know, cuts which if that did happen, presumably would bring inflation back down to their targets. Not the best way to do so. But if you're looking at that dynamic, I don't really see how this Fed cuts aggressively, especially heading into next year.
- [23:36]
A
We got to leave it there. Come back to see you guys. So great to see you in studio and I know we'll continue this conversation.
- [23:42]
F
Thanks for having me.
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A
Do well, be well. Kevin Gordon, he's senior investment strategist at Charles Schwab joining us right here in studio.
- [23:48]
D
We're probably going to see Kevin before November, but we're going to see him out of Denver because we swap impact in the early part of November. So we'll definitely be talking to Kevin out there.
- [23:57]
A
Looking forward to it.
- [23:58]
D
Stay with us. More from Bloomberg businessweek Daily coming up after this.
- [24:07]
B
From providing extra support during busy seasons to replacing vacant roles, you need Express employment professionals on your team. Express can handle everything from contract placements to finding the right full time team member. Solve your workforce challenges when you let Express deal with the workers compensation, payroll benefits and more so you can concentrate on what really matters growing your business. Go to expresspros.com if you've never used a staffing company, here's how Express has helped businesses like yours balance their workforce to meet production demands, reduce stress and burnout which reduces turnover, access a local talent pool ready to work for all types of jobs and a variety of reasons. Choosing Express employment professionals is the move to make this year with more than 870 locations. Find the one near you@expresspros.com that's expresspros.com.
- [25:07]
D
Join Bloomberg in Houston or via livestream on November 4th. For the future investor finding the opportunities this 2025 event series will examine how companies are investing in their businesses to create efficiencies, innovating their products and services and improving the customer experience. This series is presented by Invesco. Q. Q. Q. Register@Bloomberglive.com futureinvestorhouston. That's Bloomberglive.com futureinvestorHouston.
- [25:36]
A
You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Bloomberg Business app or watch us live on YouTube.
- [25:50]
D
Charlie said a lot was happening on this Tuesday. So we're watching everything out of Washington, which includes everything with major pharmaceutical companies. They're higher today, Eli Lilly shooting higher. Pfizer up around what, 6%, 5.6% earlier.
- [26:05]
A
In the session, gainers in the S&P 500.
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D
All of this after Pfizer CEO Albert Bourla said the company secured a three year grace period for from President Trump's promised tariffs on pharmaceuticals in a deal that would lower some of its U.S. drug prices. We talk drugs, we talk biotech, we talk innovation happening in the space. And we got to talk to Jenny Rook. She's the founder and managing director of Genoa Ventures. It's a VC firm. It invests in, as she says, the quote, next gen of companies at the convergence of technology and biology. BrightSpec, Caribou, Topaz and more are among the companies she's invested. And she joins us here once again in the Bloomberg Interactive Brokers studio. Well, every time you're on with us, there's always some news event out of Washington that we're talking to you about.
- [26:46]
A
Last time, every time you come in, it's crazy.
- [26:48]
D
It wasn't last. It was the time before that. You were here when we were talking about the government cutting all the funding to universities and the ripple effects that that might see in your industry when it comes to biotech. But, but when it comes to the way that the American pharmaceutical companies have, it's kind of whiplash, I guess you could say. Last week, tariffs this week, Albert Bourla up there with HHS Secretary Robert F. Kennedy, Jr. Which I think a lot of people would be surprised about. How do you look at this relationship in your world?
- [27:19]
G
It's so much uncertainty.
- [27:21]
A
Right.
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G
And very difficult to make any predictions. In my world, as you know, I spend a lot of time with people who are thinking about how to change the world on the order of decades. Right. And so we've talked about regardless of what someone does today or in the next few hours or by midnight tonight? Do we need new drugs that really help us understand how our bodies are working and really address the cause of disease in the molecular level? Yes. Will we need that in a decade? Yes. Will we need to figure out how to appropriately price that and make it available to the American people? Yes. So generally we just try to look through all of the noise and think about how to keep using innovation to solve problems.
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D
A pharmaceutical company might say we need to charge high prices because the R and D that goes into this is massive. I mean, we see it, Carol. Startups, totally, they're made, made or broken on a single clinical trial. The flip side of that is if that money does not come in, that money does not get invested. Is there a concern here that the administration will stifle innovation if they require companies to lower prices?
- [28:28]
G
It is true that the most recent historical model for kind of funding innovation in therapeutics at least depends on that kind of IP protection and first to market, which is also helped, supported by the regulatory environment that rewards all of that risk taking and expense to do the clinical trials. But a question I think a lot of companies are asking themselves is how much of the value proposition of our innovation should be borne by the free market versus government support versus philanthropy. Right. And we talk about capital formation. How do you bring all the different flavors of capital together to support the full innovation journey. And often that includes a lot of government support for the R and D early on. And then as it's clearer and clearer how you're solving a market problem, whether it's a drug or an R and D tool or medical device, or even a new crop or new food product, that's when markets can step in and say, yes, there's product, market fit and the opportunity to grow that in the marketplace.
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A
Well, in terms of what's coming out of the White House. And then I want to move on to kind of some of, you know, in terms of where you guys are investing or where you're seeing opportunity. But do you feel like things are starting to settle down or you have some clarity? I know, am I seeing the headlines today? But in terms of funding and rules and regulations, do you feel like things are settling so people, investors like yourself, can figure out what to do going forward? And I love what you said about these 10 year or longer horizons that are you still kind of doing the things you were before this White House?
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G
Yeah. So two things. There are some of the uncertainties that we've talked about in prior conversations being addressed. The question about what will the NIH funding levels be for the next year address that looks like that's going to be flat or maybe a little bit even up again, assuming we have a functioning government. So you have to put it in the context of other uncertainty.
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A
Was it it settled down and it settled out okay.
- [30:32]
G
I think it's been working through the changes and the changing priorities. Just like if we it's pretty normal, for example, when a new CEO comes into a corporation to set new priorities and it takes time for that to ripple through the organization, people to figure out, get in line with those priorities and learn how to implement their work in that new setting. So I think we're seeing that up and down the stack in government thinking about how to fund research in ways that are in line with this administration's priorities. For example, like the health of the war fighter. War fighters are humans as well, and they need better sleep and better medicine. And so if the administration wants to drive that behind defense priorities, that's still the same kind of biotech innovation we're excited about.
- [31:17]
D
And just a tease for our next hour, we're going to be speaking with our defense analyst, Wayne Sanders about everything happening in Washington. Washington, with the Defense Secretary Pete Hegseth addressing and along with President Trump aggressing this rare meeting of generals and admirals. Jenny, I want to talk a little bit about your portfolio companies and your investors. You brought them together last week. We did for this annual meeting.
- [31:39]
G
Right.
- [31:40]
D
This one, I imagine, was a lot different because of the environment that you've described to us. What were the topics that, that were brought up in the context of what's happening in this world.
- [31:49]
G
That's right, yeah. So we had the Genoa Ventures annual meeting last week in San Francisco. We brought together our portfolio companies, our investors, and also what we call the Genoa ecosystem. So pioneers, thought leaders, operators in this bioconvergence theme that we talk about biology, technology coming together, solving problems and what's really emerging for us and that we hope we are helping become true for the venture space is the establishment of patterns and sectors by which innovation capital or risk capital can help drive these change. Whether it's a drug which we don't invest in, or the tools that make them, which we do, or medical technology or a new food product or a new crop or a new way to make chemicals from biology. It turns out it's a similar journey. You have to take the science, show that it works, make a solution and get it into the marketplace. And many of the same challenges and principles are true. So it's great to get all of those people together to talk about those and share learning.
- [32:48]
A
So that leads to like the creation of what kind of companies or the kind of companies you're investing in.
- [32:52]
G
Yeah. So our most recent investment I'm happy to talk about this is a company called New Culture. They're a Bay Area food tech company and they make casein, which is the protein in cheese and dairy products through precision fermentation. So that you can make animal free or dairy free cheese which is.
- [33:12]
D
Does it taste good?
- [33:13]
G
It does taste good. This is a great question. So we know the market is there. We know that for various reasons people would like to eat and make cheese that does not depend on dairy. And it has not gone so well so far. One of the main reasons is this. They call it the hero ingredient. Casein has been missing. If you've ever melted cheese and it has that nice stretchy mouthfeel, you put it on pizza. Dairy free cheese tends not to have that. That is a property conveyed by casein. So New Culture has figured out how to make that protein.
- [33:45]
D
What drew you to this investment? Because I feel like if we were speaking five years ago, right now we'd be speaking about impossible and beyond. And we've seen the challenges that those companies have faced in the public markets. And there was this idea that in recent years that all this processing hasn't been so good for us. And we've had this sort of return to real food and whole milk and eating meat. Why did you make this investment right now?
- [34:07]
G
I so appreciate you asking that question because we did meet New culture back in 2019. So we've been looking at that whole space of how do we use these new technologies to make nutritious sustainable food for humans, that there's going to be 10 billion of us pretty soon. How do we feed everybody? Some of what had to get worked through in that time is how do you do it without compromising and on any of the things you just described while making things sustainable at scale. So I can make case in, in the lab, I can show you how. Right. We could do that in a test tube. But you have to make kilotons, right. To be able to supply in a commercially reasonable way cheese. And that's what companies have been figuring out on that journey.
- [34:51]
A
Can I just. 30 seconds and forgive me, it's a bigger topic. But this idea of better living through chemistry, which you go back decades and we've shown that that maybe isn't always so true. Is this a 2.0 version of this or no, Just quickly.
- [35:03]
G
I think. I think what the GLPs have shown us is that you can have better living through through chemistry, but you have to have it in balance and you have to understand what it is that you're affecting with that chemistry. It also goes the other way, so getting to chemistry through biology may help us do that in a more sensible and more harmonious way with both our bodies and the environment.
- [35:26]
A
Always learn something. Jenny Rook, founder and Managing Director of Genoa Ventures, joining us.
- [35:30]
D
Stay with us. More from Bloomberg Business Week Daily coming up after this.
- [35:39]
B
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- [36:39]
H
Bloomberg Screen Time is where creators and capital connect. My name is Lucas Shaw and I'll be interviewing industry leaders like Warner Brothers.
- [36:45]
E
Pam abdy and Mike DeLuca, Instagram's Adam.
- [36:48]
H
Masseri and director Ryan Coogler. Screen Time is where you can go behind the scenes to hear about the strategies and stories powering what the world watches next. Join us live in Los Angeles October 8th and 9th. You can get your tickets@bloomberglive.com screentime and thanks to our presenting sponsors AWS and Coriant, as well as the supporting sponsors Nielsen Turkish Airlines and Weil, Gottschow and Manjis.
- [37:12]
A
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [37:26]
G
I'm driving in my car.
- [37:29]
A
How about you let me drive?
- [37:30]
G
Oh no, no, no, no.
- [37:31]
D
This is not a toy.
- [37:32]
C
Who's gonna drive you home?
- [37:34]
F
Honey, please. I'll do the driving.
- [37:36]
G
Drive on.
- [37:37]
A
Excuse me, I want to drive.
- [37:39]
E
You drive.
- [37:39]
G
Singing present it's the question that drives us.
- [37:43]
A
You drive me crazy. This is the drive to the Close to music will drive us till the dawn on Bloomberg Radio all right, everybody, tick tock. Just about 18:19 minutes to go until we wrap up the trade on the September 30th. It's the last trading day of September, the last trading day of the third quarter and a lot coming out. Investors delighted to have with us in studio a really well known name certainly to the Bloomberg audience.
- [38:10]
D
Jan Vaneck is here, CEO of VanEck. The firm has $133 billion under management as of a few months ago. Ago. He joins us here in the Bloomberg Interactive Broker studio. Welcome, welcome. How are you?
- [38:21]
H
Thank you, Tim.
- [38:22]
D
So do we care about a shutdown? Do you care about a shutdown?
- [38:25]
H
No, not really.
- [38:26]
D
Why not?
- [38:27]
H
Look, we look at the big forces and the shutdown and tariffs come within the category of fiscal spending as far as I'm concerned.
- [38:34]
C
Right.
- [38:35]
H
What do we care about? Big picture advantage for the big trends, fiscal policy, monetary policy and technology, those are the big outside forces we think that affect the markets. And you know, government shutdown is not going to affect fiscal spending that much. I mean, assuming it's only for a couple of weeks. Right. Which is probably what it is. If the Republicans were going to capitulate and suddenly spend $100 billion more on health care, which I doubt they will, then I think the trend is actually the opposite way. I'm the more optimistic person on the budget deficit being between 5 and a half and 4.5% this upcoming fiscal year.
- [39:14]
A
What I want to talk about is you guys have a house of ETFs, right? A bunch of different options. And for investors, where's money flowing in? Where's money flowing out right now?
- [39:25]
H
Or money's flowing kind of into everything.
- [39:28]
A
And is money flowing in?
- [39:30]
H
I'll tell you the most interesting thing to me is one of the best performers of the markets is gold. Gold Bullion is up 46%, up again today.
- [39:39]
A
Yep.
- [39:39]
H
The shares, GDX, our ETF is up 123%. But investor interest in the US is really quiet. We've actually had 4 and 4.7 billion out of GDX and GDXJ this year. So take a lens out. I think what happened there that was in the first quarter people were actually covering their shorts. So they've been short gold mining shares probably for a decade.
- [40:04]
A
Right.
- [40:04]
H
But the money's not really coming in yet. So that's, I think that's very bullish to me overall. And it only started coming into bullying ETFs in the last month or so. So American investors, because of the S and P, they're spoiled rate gold, who needs gold, right? And videos up again today. That's basically their attitude.
- [40:22]
A
Why is gold up so much when you've got a market that, you know, certainly here in the United States continues to take out record after record? You look at Chinese stocks, man, they have taken off in a big way this year. What is the nervousness? Gold to me usually says I need somewhere, a safe haven to park my stuff.
- [40:37]
H
Gold is the second global currency, right? So you have the dollar. Obviously we know about its dominance as a reserve currency. But because of policy uncertainty, war in Europe, Ukraine, you know, Russian reserves being seized after the Ukraine invasion. There's so many things happening, I think that people are nervous and they say, okay, what else can I buy? And they can buy gold. They're not going to buy the renminbi, the yen, the euro. So it's become big. Developed market countries sold it about a decade ago. And further, they're like, who needs it? It's an ancient relic, it doesn't give me income. But now the developed market countries, their balance sheets are much better, right? China's India, they're growing their savings and they want some gold. And they don't want to be overly reliant on the US either, right. And Trump doesn't make anyone super comfortable on trade policy or anything else. So they're just, they're just steadily buying gold. And so I think this is a multi year trend.
- [41:35]
D
Other trends that you mentioned, fiscal policy, monetary policy and technology. I want to focus on that third one and talk technology. The promise of AI in your view, what is it? What does it do to productivity and how do you trade it?
- [41:48]
H
I mean, I think we've seen these MAG7 stocks being 37% or so of the S and P and I like to do a thought experiment. I think it could be 50%. These companies like Microsoft has actually been laying people off this year. The revenue is going up, their costs are going down. They're just profit engines. And again the search engines are scale benefited by scale, right? The more searches they have, the smarter their engines are, the better answers they give on your health care diagnosis or the market program.
- [42:18]
A
We're all helping them, right?
- [42:20]
D
We are.
- [42:20]
H
And it's just the same. It's like social media companies before or Google search before, like they're winning again. It's. But just that's it. Their scale advantages and their profits are going up like, like companies we've never seen in history.
- [42:36]
A
So how do you.
- [42:37]
H
It makes you uncomfortable, right?
- [42:39]
A
But you know, it's interesting Because I think, you know, we've spent so much time talking today about the spend, certainly with AI, and I think, you know, we're worried about this kind of, is it circular finance, you know, in terms of, you know, the Nvidia was it Nvidia and open AI deal and so.
- [42:56]
D
$100 billion last week.
- [42:57]
A
That's a lot. It's over multiple years. Right. But, you know, the Investment in open AI and OpenAI buys Nvidia chips like it does make you kind of scratch your head and say, wait a minute, so what is the value creation here really? And, you know, are we masking kind of the exuberance that we're seeing in this spend and build out? And maybe it's not. Maybe it's not. I don't know.
- [43:22]
H
I mean, one is just the quantity of demand that Nvidia has. And when Jensen Huang is talking about visibility to 2027.
- [43:30]
A
Right.
- [43:30]
H
I stopped. I don't even say 2026 anymore because he's already two years ahead. That's number one. Number two, he's sort of rebuilding his whole tech stack every year. So he's moving so quickly because he's using AI to redesign the whole, like hyperscale and computer system. And how can anyone catch up? So he has a competitive moat. He's got like market leader. Right. And so. And he's got unit demand and the number of tokens being consumed is, is exponential. That's what I think people don't get. It's not like I'm buying one computer than another computer. It's going up in a huge curve. So I'm not saying things aren't expensive. They are. But I'm saying we're in the middle of this kind of technology revolution that we haven't really seen before. And these big companies are really well positioned.
- [44:20]
D
We got to ask some ETF questions because you're known as the guy who brought ETFs to VanEck. Carol and I were talking earlier. Once known for mutual funds, now known for both mutual funds and ETFs. As Alex Semen over reminds us, there are more ETFs out there now than there are individual stocks. How do you differentiate yourself?
- [44:39]
H
Well, we try to be careful on the ETFs we launch. We don't do leverage, we don't do index verse, and we try to identify industries where we can give a pure play solution. So I'll give you an example. Earlier this year, we put together an ETF that invests in general partnerships of private credit and private equity. Funds. And you'd be like, how come that ETF didn't exist? Right. Just buying Apollo, Aries. Yeah. Blue Al it's because those companies weren't all public 10 years ago. And so we just waited until they were enough to assemble an etf. And, and you know, it's, it's, it's a pure play and that's what we like to offer to the market.
- [45:15]
A
How much further do you want that private market thing to go in terms of ETFs? Like, do you envision then the next step of actually being it's not just buying the companies, but buying the deals or the portfolios?
- [45:26]
H
Yeah, I mean, not in an ETF format, but definitely. I look at the local, sorry, the unicorns that are private companies and there's 7 trillion of them or so, and I can see putting those into a fund that people want access to, the open eyes, the space X's, you know, stripes. I think that, I think that financial engineering will happen.
- [45:49]
A
All right, Interesting stuff. Come back soon.
- [45:51]
H
Okay.
- [45:51]
A
Really enjoyed.
- [45:52]
H
Thank you.
- [45:53]
A
John Van Eck, he is of course CEO of VanEck, joining us right here in our Bloomberg Interactive Broker studio. They have 133 billion roughly in assets under management at least as of the end of June. This is the Bloomberg Business Week daily podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology. From Amazon Business, from fast free shipping to in depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support.
- [47:01]
D
Join Bloomberg in Los Angeles or via livestream on October 7th for the Future Investor. Finding the opportunities. This 2025 event series will examine how companies are investing in their businesses to create efficiencies, innovating their products and services and improving the customer experience. This series is Presented by Invesco. Q. Q. Q. Register@Bloomberglive.com FutureInvestorLA that's Bloomberglive.com Future Investor LA.