tv Bloomberg Business Week Bloomberg September 15, 2019 4:00pm-5:00pm EDT
carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelley. carol: this week, building on the franchise of bloomberg businessweek magazine and its ranking of the top programs, we went to one of the top schools in the world. jason: we got to have class outside over at columbia business school. we heard from faculty driving the program. carol: so much fun on college watch, we also talked with high-profile alumni who continue to shape the business community
including morgan stanley chairman and ceo james gorman. >> i'm very surprised at where rates are. i'd expect by the end of the year, the 10 year would be 3%. i was dead wrong. jason: we will hear more from james gorman in other chats and many topics are also covered in this week's issue. carol: that included a top story, the u.s.-china trade war. as goodwill lifted financial markets, financial editor peter coy warns of consequences. peter: in a way, it is as if the u.s. and china seem intent on dividing the world into two separate spheres, which is really globalization in reverse, and to use a more recent analogy, it is more like the period after world war ii and the cold war when there was a soviet bloc and the western countries. and not doing very much commerce with each other.
very separate, and that was not good for prosperity for anyone, and risk is we will go that way now. carol: we have smart conversations at the columbia business school this week, featured in our show this week, and we talk about u.s.-china trade and there was consensus there is too much to be lost on both sides or by both sides if the united states and china don't work together. peter: that is right, except that when you get egos involved and other things involved like national security considerations, what makes sense sitting at columbia and thinking of the economics of it don't play that way in the real-world, and what we are seeing is a logic, by which the trade war instead of cooling off is heating up. it amplifies, and that to go on for a while longer.
jason: not only go on for a while longer in terms of the war, as it were, this cold war we are talking about, but have long-term generations long consequences for the global economy. so much for chimerica. peter: the problem is, once trust is broken, it is hard to restore. as i said, there is no "just kidding" moment where trump says let's forget it and xi says let's let bygone be back on. peter:zte and huawei, two of china's most important tech companies are restricted on purchases of chips, critical
components from the u.s. is xi jinping going to say that is not a problem or is he going to say we have to redouble our efforts to develop our own supply chain that does not depend on the u.s. and as jason said, that has long-term consequences. supply chains take a long time to create. there a lot to it. lining up trusted vendors, making to your specifications, and we are seeing it now. we are seeing that change happening where the u.s. companies -- and i talked to some of them, are finding ways to put plants or move production to vietnam, thailand, taiwan, and they are doing it out of necessity, not preference. jason: we talked china trade with the new dean of columbia business school. carol: appointed dean over the
summer after teaching for 21 years at the school. he spoke about how the trade war impacting students crossing borders and is an mba degree worth it? costis: we are constantly looking at the cost of education and trying to take it out of the equation. we work on providing good financial aid to our students to eventually facilitate the investment on their part and we are really focusing on the value of the degree. because businesses undergoing quite a bit of change right now, it is a great opportunity for us to innovate in the value we offer to our students and in fact, i actually believe the mba degree now is a fantastic investment both in terms of time and return, simply because you need new skills to succeed in practice, and that is what we are striving to do here. i actually think the degrees are pretty robust and because of the change we are undergoing, it is more valuable than it was potentially five or 10 years
ago. jason: as those business leaders alum include james gorman from morgan stanley -- he will be with us later on -- when he and his friends are visiting you, what are they asking for that may be different than the past in terms of what you are teaching or the types of students you are turning out? costis: i think when you talk to business leaders, you realize they are encountering two things. first of all, technology data and analytics is changing the way business is transacted. they also understand the nature of the mba jobs, the types of jobs graduates will do is itself changing over time. they want to see in what way are we going to best prepare students in order to participate in the digital future? they ask what are we doing in the curriculum? what are we doing in experiential learning? how do we bring mba students together with engineering students to collaborate because that is what they will do in work.
these are the types of things we talk about. carol: i'm also curious about how much you talk about the trade spat and what that has done to students who are nervous about what will this mean? can i stay in the country, create a company? are you seeing pushback or a decline in students from overseas that want to apply? costis: for now at columbia, we haven't experienced that. carol: no change at all? costis: almost no change. we continue to have 40% international students, about two thirds of them, 60% of them just graduated that wanted to stay in the u.s. found jobs in the u.s. and of the 40% and left, i think a lot of them wanted to go back in different areas of the world. having said that, i think our
service economy in the u.s. depends on high skilled human capital so this is a problem we need to solve, not just for business education, but for essentially training any type of high skilled labor that we would like to retain in the country and hopefully we'll get have the dialogue and move to a solution. jason: more on president trump's trade war. how it is hurting u.s. manufacturing and possibly his chances at reelection in 2020. carol: more from our special at columbia business school and our interview with alum and morgan stanley chairman and ceo james gorman. jason: this is "bloomberg businessweek." ♪
time. listen to our podcast on apple podcast and wherever you find your podcasts. jason: find us online at businessweek.com and our mobile app. turning to economics, recession is gripping quarters of the united states. that could signal trouble for president trump comes the election next year. carol: there is this week's explainer. china is seen as the bogeyman that stole america's factories but the reality is, the fortunes of many u.s. manufacturers are linked to china. look at the indiana diesel maker. in 2001, the year china joined the world trade organization, cummins had $5 billion in sales and operated at a loss. last year, it posted $24 billion in sales and a healthy profit. cummins makes itself 40% of its engines in china. the ceo calls the trade war a gigantic tax on the u.s. economy. the company expects to spend $150 million on tariffs this year.
the surge in manufacturing jobs the first two years of the trump presidency has gone in reverse in some places. in 22 states, the number of people working at factories contracted the first seven months of the year. a key battleground state pennsylvania lost 8000 factory jobs. the big question, will voters blame the trade war or will they agree with president trump's blast at badly run and weak companies? for more on how u.s. manufacturers are impacted by the trade war with china -- jason: and how it might impact the 2020 election bid, there is reporter sean dimon in d.c. >> it is hard to tell. we are still a far way out from the election. it is worth remembering the candidates are just launching an election campaign and that will only take 41 days. ours is a lot longer. there is a lot that can happen in the economy in between but if you talk to manufacturers, they see things getting worse over
the next year. that is bad in industrial states like wisconsin, pennsylvania, like ohio, like michigan, like indiana, all of which are important for donald trump in 2016. we are already seeing the manufacturing jobs growth that this administration was able to crow about in the first two years slow down markedly in places like wisconsin and pennsylvania, it has actually gone in reverse. pennsylvania has lost 8000 manufacturing jobs in the first seven months of this year and things are not going to get better. that should bode badly for the president politically in these industrial states but as we know, donald trump seems to have an ability to ride out a lot of things. carol: this is where the story gets political because as you point out in your story, there has been a manufacturing job gain since donald took office as
president but the point is, politically important states, and there are a lot of them where he did well the first time around, their job gains are slowing down. >> absolutely, and sometimes direction matters more than the long-term gains. president obama second term, the u.s. created lot of manufacturing jobs between the trough in 2010 and the end of his administration, the obama administration saw something like 900,000 more manufacturing jobs in the united dates but in -- united states, but in 2016, that all-important election year, the u.s. lost 30,000 manufacturing jobs and that makes a difference and that meant a lot of people in swing states and that industrial heartland weren't feeling as good about where they were or where they were going than they were in years before.
carol: one quick last question. manufacturing jobs in the sector, as important to the republicans as to democrats or that is different? shawn: that is an interesting thing. we often historically associated the manufacturing sector and workers, the blue-collar icon of the american economy with the democrats and labor unions. actually, if you look at the exposure particularly in those battleground states, counties that went for donald trump tends to be more heavily exposed to manufacturing the counties that voted for hillary clinton and that means if you get this downturn in those counties, that could hurt donald trump more than it would hurt a democratic challenger. carol: as for who is feeling the brunt of the trade war -- jason: back to columbia business school. we spoke to an expert in international development and economics. >> it is a sequence of events. the tariffs are a tax on imports, consumers see
potentially rising prices on imported goods so they should switch toward domestic goods, and that means there is going to be a transfer from u.s. consumers who are potentially paying higher prices to those benefiting from higher prices and the government collects tariff revenue. one of the goals was to account to lay the overall effect and what are the transfers going on? one surprising thing we found in this research was when you look at the data and try to chart the time path of what happens to goods being targeted with tariffs being imported into the u.s., an important number pretty economists is understanding what happens to the prices of those goods. we have heard from the president, who says the chinese will be paying for the tariffs. in principle, that is possible and the way that could work is
if the u.s. imposes a tariff, the chinese exporter may lower per price to such a point so the post tariff price doesn't change for the u.s. consumer. that would be a condition under which the chinese are essentially eating the tariff. when we look at the data, that is not what is going on. the split could be anywhere between 0% and 100% and what we find is the u.s. economy is bearing the full incidents of tariffs. jason: coming up, more from our visit to columbia business school, chatting with faculty and our experience with lulu wang. carol: and morgan stanley chairman and ceo james gorman. this is "bloomberg businessweek." ♪
jason: welcome back to "bloomberg businessweek." i'm jason kelley. carol: i'm carol massar. you can listen to us on radio on sirius xm channel 119, and on am 1130 in new york, 106.1 in boston, 99.1 fm in washington, d.c. jason: am 960 in the bay area. in london on dab digital and through the bloomberg business app. we continue with our special coverage from columbia business school, building on business week magazine's best school rankings. we went to one of the schools that is always on the list to speak with faculty driving the program and its high-profile alumni that are shaping the business community. carol: among them, lulu wong, a founder and ceo of tupelo capital management. she graduated from columbia business school in 1983. she has been in management for decades. we spoke about the global economy, unrest in hong kong, and bridging the u.s. and asia.
lulu: i think it is a fraught situation and friends and colleagues on both sides are grieved. i don't think beijing realized it would go this far. they don't want tiananmen square. it is a very different world, they cannot have that. they have to find some face-saving way to begin to calm the crowds. fortunately, the beef demonstrators have is really more with the hong kong government than with beijing. i think if we can work to carrie lam, she has already withdrawn the extradition bill and if she can begin to negotiate on the three other conditions the protesters have set up, there is the potential to work through some understanding. carol: is there a role for folks outside of hong kong and china? there has been push among the protesters to involve the united
states. what is your view on that? lulu: i do think there is a role. in my not day job, i'm on the board of asia society, which is the foremost nonpartisan group trying to bridge u.s. and asia. we have been very busy talking to both sides about the issues. i think if we can find ways -- the chinese are big on face. they cannot be humiliated and if there is a way they can stay with one country, two systems, begin to exert some control over hong kong but not with the heavy handedness we have seen, there will be a solution. jason: business leaders and investors are talking increasingly of a decoupling between the united states and china. given that you have spent decades coupling the u.s. and china in many ways, how much do you worry that may become a reality?
lulu: there are many people concerned this is going to be one win, one lose. i am a believer it can be a win-win situation. right now, we have two leaders that are under short-term pressure to try to resolve some of their problems before their economies crumble. i think the advantage xi has is he is playing the long game and he believes the long-term future of china is positioned on china maintaining economic, political -- not necessarily military, but geopolitical power. the question is, does the economy crumble before he can achieve this? he has many levers that are not present in america. carol: which he has been pulling, this week we have seen. lulu: he has been pulling levers, moving more liquidity into the system. he's getting some of his companies, multinational and chinese, to try to do more
investing in the economy. he's trying to bring more capital investment back into china. carol: i'm curious what you are hearing. are the expectations from u.s. folks you are talking to, folks in china, that there will be a trade deal done or is the fear that we will see china go off with their plans and have its allies and the u.s. will go on its plans and when it comes to trade under developing technology -- what do you expect? lulu: it would be difficult for there to be two fortresses. the world's too connected, the supply chain, the markets, we are interdependent so i don't think we can truly exist separately. some of the reforms the u.s. is pressuring china to make are not actually bad for china. some of the progressives in china have been campaigning for them all along but they have been outnumbered by the hawks.
with the situation where xi's under pressure internally for having managed it in and in it in an indelicate way, it will provide the opportunity for progressives to say look, it makes sense we open our markets. it makes sense that we liberalize. let's do some of this. we will make it appear it is our own initiation. that is important. the west has not to play the bully hand. that will be difficult for xi to overcome, but if there can be sensitive diplomatic accommodations on both sides, i think it could come out better for both countries. jason: one of the biggest concerns for investors broadening to the entire world is this notion of negative yields. a world where pensions and other huge institutional investors are not making the money they need. do you see a short-term change
in that? you are so involved in some any of these big institutions as customers as an advisor. lulu: there is a lot of liquidity around. there is money to be invested and in a way, that is why many bears on the u.s. market are puzzled and frustrated they have been short and the market continues to work its way up. that money wants to find a place and in this troubled world, the u.s. and the u.s. dollar seems to be a relative safe haven, so if we can find some stabilization of the economic situation that money can go back to work, =we have not been investing in our capital equipment. if we can just get some predictability, stability, i think both china and the u.s. and other countries can put money to work for their economies. carol: we would be remiss not to ask you generally a little about your market outlook. people are talking about
recession, they want lower rates. in 30 seconds, how do you see the economic outlook and the market outlook? lulu: i don't think we are heading into a deep recession. we are clearly in a slowdown, and when that happens, you get a lot of panic and certainly the geopolitical situation is very troublesome but i think the incredible volatility gives investors great opportunities. when i see a down 800 point day, i am licking my chops. into the corrections, and then you get another 800 points the next day. if i have stocks i am not comfortable with, it is a good chance to clean house. jason: columbia business school alumnus class of 1987. carol: our exclusive conversation with morgan stanley chairman and ceo james gorman. this is "bloomberg businessweek." ♪ devices are like doorways
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that is always on that list. >> the thesis here is that the nexus you get between the business schools and alumni networks, that's why people come to business school. you get a crash course in the greatest curriculum you can get but you also get the case study feeling that comes from real-world applications. for us, we look at the stories we do as case studies. making the world of business come to life via stories is what we do, which is not that the similar from a classroom setting. for us, this feels like the water we swim in and the air we breathe. columbia embodies the spirit. we are witnessing it here with mr. gorman, this is a powerful place to play. carol: you dice and slice what goes on in a business school community, but you figure out the nuances that make each program distinct. one thing about columbia is you
are in new york city. >> it is part of it. something we lean into in rankings is data. how do we make this data set be extraordinary? jason: new york city is a big piece of it. what is it about it? >> the tagline is "at the very center of business." you cannot imagine a better setting for a business school. when you have the real world applications. carol: now, to a high-profile alum of the school and a business leader in the financial community. jason: james gorman is the ceo of morgan stanley class of 87. james: i remember most the interest rate on my student loan, 24%. which i think is a world record. i thought i had died and gone to heaven because america welcomed me to come here, learn, grow, and it was unbelievable. i arrived in august in the classic sweltering heat. it was just so excited. this university is just extraordinary. i could not have been happier to be given that chance.
and i am still here 30 plus years later. carol: let's talk about the market, there are so many stories out there. and how do you view the global market right now? james: it is a conundrum. on one level, record low unemployment. the most important economy in the world is performing strongly. china is performing strongly.
europe is mixed it has been mixed for two decades now. on one level, the fundamentals are quite strong. at the other level, there is a sense of confidence and inevitability. statistically, there is a recession every seven years. but it does not have to be. in australia, they have not had a recession for 28 years. carol: why is there so much pressure on the federal reserve? >> because the economy is slowing. the job of the fed is to balance monetary policy with economic outlook and fiscal policy. they should feather rates. their job is to raise and slow down. i have supported the latest rate cut and i suspect they will do one or two more and then it is time for a pause. the problem with cutting is that
♪ it is one of the few tools you have got. if you give it away to easily, what do you have if you have a real problem? jason: i want to go back to something you said. squaring some of the different elements. businesses that certainly see more cautious with a consumer that is not showing signs of caution at all. how do you square those things? what do you see that could help explain that dichotomy? >> we are in a bit of an echo chamber. if you are a business leader, we all talk to each other. so a little bit of it is that we must be at the end of the cycle. we have had an inverted yield curve which is predictive of a recession. so there is hard evidence things are more likely to slow down than accelerate. so you would be prudent to be cautious.
consumers are not yet experiencing that. i have got cheap debt, housing is recovering. consumer credit is in strong shape. the consumer balance sheet is still strong, and that is why is lagging behind the corporate attitude. carol: are there implications from low rates? >> i mean, it's all about finding equilibrium between economic growth and the cost of money. there are only implications if it creates a bubble. cheap money eventually will create a bubble but we are a long way away. i see no bubbles. jason: how do you manage your business given all of those different inputs and outputs? where do you hire, where do you stay steady? where do you invest across the empire? >> empire. [laughter] never thought about it that way. we are just a simple business. firstly, we are very long the
u.s. 90 plus percent u.s. and at least half of our securities businesses are here. this is an $18 trillion economy, the strongest and most important in the world. we have been aggressively building our asian business which is 14% or so of the company. with the trade talks, things have slowed across asia. but our job is to try and look past six months hiccups or slowdowns. certainly, my job is to think out five years. traders are thinking every five minutes, i'm trying to think five years. carol: can you do that in this environment? it does feel like we have been
going back and forth. james: you have got to. we have been around for 85 years. we have been managing 2.6 trillion of people's money. they are not selling in and buying on the next, things actually move in small increments. it is things like the public markets or m&a transactions. but most of our core businesses are relatively immune to what is going on. you would not see the impact on our wealth management business. jason: let's talk about the public markets. the public markets have been something to watch, to say the least. talking about cognitive dissonance between public and private market valuations. why is that happening?
james: the public markets are record high. so where is the dissonance? jason: in the ipo markets. some of these mega-unicorn companies going public. james: there are rounds of fundraising and companies have tended to go public later. with that comes some risk, obviously. you have got investors who come in relatively late and we have seen that in some companies that look like they will go public lower than the last couple of rounds. that is unusual. we have not seen that for a long time. it is also a function of frothy money. jason: has that changed? is private money getting smarter? james: these people are not stupid. these are very savvy people. and listen, this is the corrective mechanism that occurs. they see companies go public at lower than the valuation, that's a good corrective mechanism. that's ok.
that pinpricks of the bubbles that are out there. carol: you can hear all of our interview with james gorman on our extra podcast. jason: it was wide-ranging. from how he lived as a student to things he is doing now. even creating a more diverse bank. carol: i thought that was really telling. jason: still ahead, more from our visit to columbia business school. carol: we speak to a ceo on his time at the program and getting his start in online luxury. jason: and we step off columbia to a look at another university. the money manager who is in charge of yale's fortune. this is "bloomberg businessweek." ♪
radio starting at 2 p.m. wall street time. you can also catch up by listening to our podcast. jason: and find us online at businessweek.com and through our mobile app. back to our visit to columbia business school. it is always on the list of the top mba schools. one reason is the faculty. carol: here is an assistant professor of business. >> when people ask me about my degree in psychology and working in business school, my answer is that there are people are working in unique situations. i'm not sure if you've noticed, there are group dynamics, what makes them happy, what makes them productive? so there are a lot of psychologists trying to understand the dynamics of organizations. jason: so give us a sense of an exercise you might give. >> we do a lot of cases and i think that's what students benefit the most from.
we throw them in, give them a role, and tell them to assume their own preferences and negotiate. the biggest lesson they get his feedback from other students. like, wait, i lost so much money. i felt good about the negotiation, but now maybe i see i could have pushed harder. so it is the feedback they get but also seeing how well they performed. carol: we turn from columbia to yale. it is about a legend at the university and its highest-paid employee. he is the money manager who, for 34 years, has been in charge of the yale endowment. >> he has been the chief investment officer at yale since 1985, which is a long time. and if you think about 1985, yale was mostly invested in stocks and bonds. to be diversified was to be diversified in stocks and bonds and he changed the world. you think of private equity, hedge funds, how institutional investors invest, that was, in
some ways, because of him. you think about private equity money will be tied up for years, in some cases decades. and if you are investing for centuries, which is what yale endowments are doing, you can't afford to have that money locked up and there is a liquidity premium. we know this today, but back then, that was not how things were done. carol: you think about the junk bond market, is part of normal investing today but when it was created it was considered innovative. that is where he was coming from. >> yes. and he cautions that you cannot replicate this. we have a great part of our story from charlie ellis, chair
of the investment committee. you can't replicate 35 years of this. building up the networks and the network is really important. his network of outside managers which yale finds to manage various strategies. and, that is how we have gotten to today. jason: up next, more from high-profile alumni. we talk luxury e-commerce. carol: and building a brand with the founder of siggy's icelandic yogurt. this is "bloomberg businessweek." ♪
carol: welcome back to "bloomberg businessweek." jason: you can also listen to us on the radio on sirius xm channel 119, and on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c. carol: a.m. 960 in the bay area, in london on dab digital, and of course through the bloomberg business app. carol: our coverage from columbia continues. we sat down with notable faculty and high-profile alumni. one alumni and was ahead of his time when it comes to online luxury retail. today, he is a chairman and ceo. >> at columbia my started, for example my favorite classes were retailing as i loved customers. it was an amazing class. i member i interacted with michael drexel. we emailed each other analysis about the italian market. he was the ceo of gap at the time. the exposure as a young student
you get, he was like a hero. and then i took classes and my business plan about a fast food environment. it is a concept that has been developed recently. jason: talk about ahead of your time. >> but then i realized i did not want to be behind the counter preparing food for 20 years. i was italian, going back to italy after my mba. the competitive advantage of italian is food, fashion, and furniture. food, good with that, furniture -- fashion was probably the right thing. basically, you could say i had the vision. i thought that fashion and luxury would one day converge
with the internet. in 99, they were two opposite worlds. they did not like each other. so my role in the last 20 years has been the link between these two worlds. carol: but who would have thought you would spend thousands of dollars for a high end piece and buy it online. >> i invented the shop of my dreams. i am the ceo and customer number one. all my strategies, i put myself in the shoes of the customer. i thought, why not? not only bags and shoes the ready-to-wear, now it can be counterintuitive. in 2016, having convinced all of the fashion brands to go online in the last 15 years, i thought it may be was time to convince hard luxury, so watches and jewelry. and now the price is not a limit.
there is no limit for pricing. we are selling watches and jewelry over $200,000. jason: luxury seems to be having something of a moment right now. we were just talking with the author of a new book called "fashionopolis." they rejected the economics of fast fashion. the opposite, essentially, of what you do. do you feel society is moving towards a place where it values things a little bit more and thinks about all aspects of a product? carol: quality versus quantity, to some extent. >> when i started to put together, i always wanted to create something that was sustainable and good. that's why you look very early on, in 2008 and 2009 we launched a complete sustainable fashion area.
and now, we are showcasing all of these great designers launching sustainable fashion. that is what the customers want. 2009, i was a little bit early. now we are perfectly on time. it has been 10 years we have been developing so we have a huge advantage. jason: another business school alumni who is behind a well-known consumer brand is siggi. carol: she is the founder of the popular icelandic yogurt company that bears his name. he talks about how columbia made it all possible. >> one of the most important things i learned was supply chains but that was almost by luck. very thankful.
jason: it feels like you anticipated a place where we are now when it comes to food and ingredients and people's willingness to pay up for high-quality and to care about where their food is coming from. what convinced you this was the way to go? >> that's pretty easy to answer. when i came here, i not only missed the icelandic yogurt, but i noticed that they were very sweet here. the most popular yogurt in america at the time have more sugar per ounce than a can of coke. and the difference between coke and yogurt is that people drink coca-cola and they know it is not healthy. with yogurt, has the halo of the health product. people were totally indiscriminate of eating it even if contained more sugar.
so i thought this was a contradiction, people need to know about this. so when we started the company, i wanted to make the yogurt but not make it so sweet that was equivalent to candy or soda. and that was a challenge. people were not super receptive at first but then it really took off 2012. carol: fast-forward you got this company people are like, yeah i need healthy ingredients. there's more competition. how do you continue to get the shelf space to set yourself apart? >> we were very lucky in that regard. when we started, nobody was focused on that. the weirdest thing i found was that we did not get a lot of competition. we heard rumors that the companies have looked at our space and thought people would
not like that. it's not sweet enough. all of a sudden, we were starting to have a meaningful share of the u.s. grocery market. then, the competition came in. carol: your advice to other entrepreneurs? >> plan for success. there is nothing worse than having the demand and things out there that people want and not being able to supply them. build the infrastructure. jason: bloomberg businessweek is available now. carol: also online and on our mobile app. jason: and across all of those platforms, you can find this week's cover story. can you trust the generics? 90% of pharmaceuticals sold in the u.s. are generic and the fda is waking up to a quality control nightmare that maybe putting your health at risk. here is our reporter with a sneak peak. >> while we highlight this one company and this very big consequence that has affected millions, there are others out there that are going through some of the same issues and we
just don't know how big the extent of this could be. carol: you are talking about the companies that make the generics that are sold to the world. >> exactly. a lot of our generics, particularly the active ingredients used in those drugs, are made in china. so 80% of active ingredients for drugs taken in the u.s. are made in china or india. what happens is you have a company in either of those countries who can make the active ingredient a lot cheaper and they sell it to big companies. in the case of the chinese company, they sold their active ingredient for these contaminated blood pressure pills to really well-known drugmakers. carol: check out our daily business week podcast as well as
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taylor: i'm taylor riggs in for emily chang, this is "best of bloomberg technology" where we bring you all of our top interviews from this week in tech. coming up, oracle's ceo takes leave, mark hurd announcing a leave of absence for health reasons. we discussed what it means for the company. plus, cooking it up. tim cook takes the stage in cupertino. his deputies revealed the new iphone 11 models with new colors and three