Came out a couple weeks ago. A trifecta of wellknown individuals. Warren buffett, jeff bezos, and jamie dimon talking about fixing the health care system. The biggest guys around. The details about this remain hazy. What is going to be the solution in health care . How are they going to fix this . And what ceo can spearhead this initiative between amazon. Com, berkshire hathaway, and jpmorgan. Where we try to pick up the narrative is the reaction within the industry. The Health Care Industry is like, amazon is at the door . Julia and it is not what we were expecting from amazon, a foray into health care. They are just tackling a situation with their individual companies. What does this mean for the individual players . The insurers, the middlemen . All of this is a massive cocktail of what is happening in health care. Why do prices keep getting higher and consumers feel like they are getting the shortest straw of all . The speculation is that there is middlemen. Pharmacy benefit managers. There seems to be a focus that this triumvirate can bring there. Julia big pharma says it is not our problem. We are not mispricing the drugs. A lot of the money here gets creamed by the guys in the middle, the insurers and benefit managers. Carol i feel like when it comes to drug pricing, rices dont it doesnt totally make sense. You talk about the Drug Companies setting pricing, then theres refunds that come into play. The relationship between big pharma, pbms, it it has been a cozy relationship. It is very opaque. Thats why this triumvirate is cutting turbulence in the market. What they could bring to bear is, what if we just negotiated directly with pharmaceuticals . We dont know what is going to happen yet, but if you could do that, you would put a lot of downward pressure on a bunch of this opaque market proving to be a little too lucrative for some players. Julia in the middle, you have a u. S. Administration talking about repealing and replacing obamacare, drug pricing. This will be an ongoing story that all of us will be watching. This is just the appetizer we want to give you. This story will be one we will be watching throughout the year. Think of this as the appetizer. Understand the players, and we will get to an entree soon enough. Julia what about the main course . The u. S. Cover and the asia cover, honing in on boeing. It is an amazing story. In part, because of what boeing has been able to do as a business. If you look at the dow, boeing has been the topperforming stock in the dow over the past year. Carol shareholders are happy. Investors are ecstatic. Howd they do it . There is a lot of nuance to that. Basically, everyone else in the world, except investors and employees, are, boeing is hurting us. Julia flexing some muscle. Carol lets go to the story. It is a story about the boeing ceo kind of driving everyone crazy except investors. We think we know boeing. Theyve been around for 100 years. In year 101, theyve overtaken ge to become the largest and most powerful industrial company. They have really started to shake up the marketplace in ways that we are just now exploring, and whose effects we ultimately dont know. Julia the old slogan used to be working together. How far does it apply to them today . In any speech that you hear a Senior Executive give the , phrase comes up compete to win. This is a company that seems unafraid to play hardball, to knock heads together. If people dont like the consequences, they dont seem to care. Julia how much of this has to do with the ceo . He has been around since 2015. You described him as turning unapologetically hardnosed. Think boeing has always been a tough competitor. He is very driven personally. Extremely charming in person, charismatic. Again, he has a goal of turning boeing into a growing industrial making boeing a Global Industrial champion, into a 1990s era ge that everyone looked up to. His foot is on the gas. This is a company right now that seems determined not to let up. I think that in some regards, companies reflect their leaders. That might be true of what we are seeing at boeing today. Julia the share price has doubled since january last year, the best performer in the dow. Investors clearly rewarding him investors rewarding them at this stage, they are happy. Julie absolutely. One of the things that is fascinating is that ge has imploded. For shareholders who want Large Industrial stocks in their portfolio, boeing has sort of become the only game. I think that boeing has, in terms of their share price, benefited tremendously from the turmoil at ge. At the same time, it reflects the underlying strength of the business. They are very focused on trusted they are very focused on profitability, really shaking up the Supplier Community with some of the ways they have gone about gaining that profitability in their contracting. That is a very high level picture, with 1000 Little Details that made it come together. Julia the Cost Initiative that they are running out, partnering for success. Critics have called this pilfering from suppliers. Give us a sense of what they are doing and what they are achieving. It is creating date fundamental reshaping of boeings business. Julie this started in 2012 , under the previous ceo. I think it was at that time, boeing was going through tremendous soulsearching. After the 787 dreamliner, that was enormously draining on the company. Their early issues with that plane and the manufacturing problems that led to it being three years late. So i think the boeing took a look around them and said why are we like other Large Industrials, plodding along with Single Digits on operating margins when our suppliers are earning double or triple that . I this sense that we have to put our needs and profitability first. Carol a design director put boeing on the cover of Bloomberg Businessweek. We have the ceo with this beaming smile. We coupled out with this face to give you the feeling bigger launching. Julia the sky is the limit. Julie it is a wonderful picture of him. He looks like he is in a good spot, happy. How many pictures do you take of a ceo when you are doing Something Like this . A lot of photos, as much time as they will give us. Carol do you change the backgrounds . You will see inside our feature, its beautiful. Julia thats the big story, the big partnership, success and the pushback on supplies, youve been kind of cute with that with the plane in the background. It is a fundamental part of the story. It places us in the environment it is pushing for. Julia why moscow is not talking about the hundreds of russian mercenaries killed in syria this month. Carol and the global ambition of wwe. Julia this is Bloomberg Businessweek. Carol welcome back. Julia you can find us online at businessweek. Com and on our mobile app. Carol u. S. Forces killed hundreds of russian mercenaries in syria. Julia the incident is raising the possibility of greater conflict between washington and moscow. It has been an active start to the month of february for sure. We have seen an escalation in tensions, some actual shooting going on. Weve seen aircrafts downed from iran, from turkey, from russia, from israel. They have all seen aircraft shot down from the first part of february. The most interesting, seismic event happened on the night of february 7, when it seemed that a battalion of what by all accounts used to be russian mercenaries, numbering in the realm of 200 to 300 were killed by a u. S. Backed force led by u. S. Forces and kurds in an attempt to take an oilfield that the kurds had been holding for the past few months. Carol who was behind the russian mercenaries . It is murky. Putins spokesperson would not address this. They are not official russian troops. But given encouragements russia had in ukraine, they often are not wearing official Russian Military gear. It seems that these few hundred mercenaries were under the control of a firm known as wagner. To put it in blunt terms, it is the russian equivalent to the u. S. Based blackwater. These are private mercenaries that not unlike the folks we sent to iraq 10 years ago, they are not part of the official military, per se. Wagner is an organization controlled by someone known as putins cook. He has a Catering Company that does business in the kremlin. He seems to have control of military units that have been operating in syria, hoping a helping assad shore up his gains. Julia it appears to be some sort of rogue attack, but if you look at responses from the russians, perhaps not surprising, given they deny involvement, but the United States response also seems weak , despite what you say is action on the ground. What is going on . Defense secretary mattis, all he was willing to say on the record was that this is perplexing. The after action report. I think that is an accurate assessment. They were very confused by what happened. We have forces on the ground embedded with the kurds were in communication with the Russian Forces there. This is like a jigsaw puzzle of a battlefield, where proxies of big powers, the u. S. , turkey, russia, iran, israel. They are all waging wars and there are interlocking lies. Especially when it comes to this part of the country, where the euphrates is, the u. S. Is with the kurds, and on the other side, you have Russian Forces with assad. Our people are having communications with russians, and it appears communications have broken down. This is reporting by our moscowbased reporters. They indicated this was a rogue operation. We are not sure who gave the goahead, but there was communication during, before, and after. It was about are you moving, why are you moving . Stop moving, we are going to attack. There is still lots of mystery about the incentives and impetus, and who called this in. You are seeing hospitals filled with hundreds of wounded in these past few days. Julia up next, the problem children of extinct trade of fund. Carol how one entrepreneur at leapfrog his Payment Company into the mobile era. Julia this is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek, im julia chatterley. Carol im carol massar. You can also listen to us on radio on sirius xm channel 119, york, 90 3 a. M. In new 91 fm in washington, d. C. , and a. M. 960 in the bay area. Julia and in london and in asia through the bloomberg at. Investors are finding reasons to worry about Certain Exchange traded products, or btps. Carol in over 400 of these etps use derivatives to generate outside returns. Julia that is raising red flags for market watches. Last week, we had the blowout the, the Exchange Rated note. What that put into focus was what some Exchange Rates have complexity at their hearts, not always as risky as expecting a vix betting etn, but some have derivatives at their heart. Theres lots of technical terms in there. Julia explain exactly what investors were doing when they were getting involved with these products. First, lets talk about volatility. Volatility is the way we can measure how active the markets are in terms of price wavering. When markets are calm, volatility is low. When markets are moving, volatility kicks up. Carol in terms of volatility, the markets have been low. A lot of complacency. We saw that all change. That caused problems for products that bet on or against volatility. Julia they were betting that volatility would remain low, which they have. It was very popular indeed. We really saw that start to get washed out monday afternoon. One of the prices where we saw one of the places we saw that most definitively was in the Exchange Traded fund or Exchange Traded products world. We saw in Exchange Traded note. An etf versus an etp. An etn is technically a debt obligation, in this case from Credit Suisse. It started to run into trouble because the index it was tracking moved so much over a short time that Credit Suisse decided it would wind up the product. Anything that pours money into the fund carol hold on a second, because this is important. By winding the products, it goes down to zero . Anyone that comes in the previous weeks or months, 500 million floated in. A record week for the product. All of those people are suddenly faced with Credit Suisse saying we are accelerating and terminating. Julia does that mean they lost money . Absolutely. This product went down 90 in the space of the day. It will be liquidated later this month and people will get whatever the prices were at that point. Julia who is actually invested in this product . Sophisticated investors, or mom and pop, Retail Investors . It is difficult to know who owns these things. If you look at the bloomberg terminal, you would be left with the impression it is sophisticated people. That is what it is aimed for. However, talking to a number of Retail Investors, it was not necessarily the case. There were forums online talking about how xiv was making people a huge percentage every year. People were piling into this. I have spoken to several people who lost thousands of dollars. Carol while the markets were complacent youve done great reporting on all of this but while the markets were complacent, people were making crazy money. That inverse volatility index was making so much money. Monday, when volatility started to spike, people were thinking markets have been calm for a long time. Now was a good time to go shortfall. Then they got completely washed out. Carol this weeks game changer is steve streets. Julia he invented prepaid debit card, now he has reinvented his company to facilitate mobile payment. Steve is the founder and ceo of a Company Called greendont. Itple have not heard about but they provide prepaid cards. , they have been making interesting deals in silicon valley. They have worked with apple and uber, trying to build out their platform. Julia take a step back. Hes kind of a visionary. He foresaw the shift to mobile banking. It was in a situation where he said i am not going to be quick enough to take advantage, so he made some bold moves. Yes, back in 2012, he could see that the Banking Experience was moving to the mobile phone, and he felt his company would not going to get there in time. So he did in acquisition of a Company Called looped. They were a dating cap that had failed that had a lot of Geolocation Services and Interesting Technology. The bank basically said, i dont care what technology you have. I want your talent, people who can develop on mobile. They brought the team in and shook things up with his own company. Now, they are making all of these important partnerships. Julia they power apple pay cash. Not a lot of people have heard of them, but they are fundamental to some huge businesses out there. Exactly. They power apple pay cash, apples version of venmo. It is an interesting business, you dont see them anywhere in the ads were in that card. They are the bank powering it. It is interesting, a lot of people are using them and have no idea. Julia and they are working with bluebird now and intuit. I think the looped acquisition gave them the mobile Development Team they need to work with these Big Companies that have lofty dreams for Financial Services and their business. They are aays platform, not just a prepaid card. You can use the banking platform to plug into these Interesting Technology companies. Julia you described them as one of the most distributed banks now in the country. The growth weve seen is phenomenal. Not to knock on the prepaid business. But yeah, the partnerships theyve made with uber, for instance, they are the ones who pay all the uber drivers at the end of the week. Or help pay them, i guess. They are facilitating all these payments for silicon valley. When i spoke to steve, he said the reason we can do this, we have this incredible platform and team, but we are really able to speak technology to these companies. As more and more of these tech giants want to make their way into banking, it is interesting to see them partner with longterm players. Julia banks that speak technology, or tech firms that understand banking. They are definitely a bank first and foremost. Prepaid was steves brain child in the 90s, when he saw more people were going to buy things online and didnt have a bank account to do it. That is why he created the prepaid card. Flashforward 20 years, now it is a company that prepaid is a huge part of the business, the biggest part, obviously, but you can see the platform being used in different ways. Carol next, eggs on targets the dax exxon targets the lawyers it claims are conspiring against the company. Julia and what is behind the republican apparent change of heart regarding spending . Carol this is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. Im julia chatterley. Carol im carol massar. Carol exxon strikes back against those suing the company. Julia whatever happened to the deficit hawks in d. C. . Carol how the wwe came to dominate streaming. Julia all of that still ahead on Bloomberg Businessweek. Julia Bloomberg Businessweek, in the more must read section, we are honing in on at some on exxon mobil. Sick to death of the Climate Change