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Bloomberg
6 days ago
- Business
- Bloomberg
Oil-Rich UT Turns to Renewable Energy
With more than $50 billion under management, Harvard has the largest college endowment in the United States. But the University of Texas is not far behind. On today's Big Take podcast, Bloomberg's Janet Lorin joins host David Gura to discuss how the University of Texas harnessed land and oil to build the second-largest endowment in higher education and why it's now adding new kinds of energy — and new ventures — to its portfolio.
Bloomberg
6 days ago
- Business
- Bloomberg
Oil and Gas Made the University of Texas Rich. Can Green Energy Make It Richer?
Never miss an episode. Follow The Big Take daily podcast today. With more than $50 billion under management, Harvard has the largest college endowment in the United States. But the University of Texas is not far behind. On today's Big Take podcast, Bloomberg's Janet Lorin joins host David Gura to discuss how the University of Texas harnessed land and oil to build the second-largest endowment in higher education and why it's now adding new kinds of energy — and new ventures — to its portfolio. Read more: Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts.
Mint
18-07-2025
- Business
- Mint
Everyone Hates Locked Shelves. Even the Retailers.
(Bloomberg) -- Never miss an episode. Follow The Big Take daily podcast today. If you've been to a store like CVS, Walgreens or Target in the last few years, you may have noticed a trend: more and more essentials are locked up behind plexiglass walls. The strategy started as an anti-theft measure. But there's little evidence that it's worked. On today's Big Take podcast, Bloomberg's Amanda Mull takes host Sarah Holder through the causes and consequences of the retail lock-up era – and how it's changed the way we shop. Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts. Terminal clients: click here to subscribe. Here is a lightly edited transcript of the conversation: Sarah Holder: It's 90 degrees outside. You're sweating from your morning commute and almost late for a meeting. So you pop into a Walgreens or CVS to grab a seltzer and, just to be safe, a little emergency deodorant. But you get slowed down because that deodorant… is locked up. TikTok: Trying to get some deodorant. I've been waiting three minutes-ish… TikTok: You can't even get socks because it's locked. TikTok: Since when are soft caramels a controlled substance?! Holder: This is the plight of the modern shopper. If you've tried to buy something in person at a retailer like Target or CVS in the past few years – you've probably noticed that more and more everyday items, from deodorant to soft caramels, seem to be barricaded behind plastic shields. Amanda Mull: If you're in a location where corporate leadership has decided that stuff needs to be locked up in those stores, it can be almost anything that you find behind lock and key. Holder: Bloomberg's Amanda Mull has been closely following this retail trend. She says it's been around for a while, but it really took off in the US in the aftermath of the COVID pandemic. But four years later, Amanda says there's little evidence that locking up essentials has done retailers any good. And now, there's more and more evidence… that the practice might be backfiring. Tim Wentworth: When you lock things up, for example, you don't sell as many of them. We've kind of proven that pretty conclusively. Holder: That was Walgreens' CEO, Tim Wentworth, on an earnings call in January. It was a surprising admission. Because locking up items started off as a move that a lot of companies adopted as part of a broader fight against shoplifting. And now... Mull: He acknowledged that locking stuff up has hurt the retailer. It has reduced sales. It has annoyed customers. It has driven people to shop elsewhere. Holder: So where does that leave shoppers on a hot, busy day? Will your body wash stay behind lock and key? Will that Olay ever see the light of day? TikTok: I had to keep pressing the button of like 'assistance needed for people who smell bad' and over and over, and no one ever came. No one ever came! What? Holder: This is the Big Take from Bloomberg News. I'm Sarah Holder. Today on the show: the consequences of the retail lock-up era. How the trend caught on, what it would take for it to end – and how it's already changed the way we shop. Holder: When did you first start to see items locked up on store shelves? Mull: Locking up certain types of things in certain types of stores goes back to like when I was working at Best Buy in college in the mid-2000s. There has for a really long time been like very particular products that are like a high theft risk because they're small, they're valuable, they're in high demand. Mull: When I was there, it was a lot of like PlayStation games, now you see a lot of expensive cell phone accessories, sometimes phone chargers, things that are easy to conceal, it would be easy to flip. Holder: These days, Amanda covers retail and writes a column about consumer culture for Businessweek. Since her college days at Best Buy, stores have changed pretty significantly. Amanda says they're not just locking up small, expensive electronic products. They're locking up… everything. Mull: At a particular Target, I found men's underwear, men's socks, all kinds of cleaning products, laundry detergent, mops, shampoo, body wash, I've seen, um, like, shower puffs locked up, which cost, like, a dollar. Sometimes you walk down a certain aisle and the entire aisle on both sides is fully encased in plexiglass and locked. So the average value of stuff being locked up is, on a lot of these aisles, less than $10. Holder: Amanda says, this new age of retail lockups, where anything and everything is fair game… took off in earnest coming out of the pandemic. Mull: In 2021, I wrote about what I called at the time 'The Great Shoplifting Freakout,' which was this sort of like generalized media panic about what they termed as like increased rates of theft from retail stores. There were like a couple of videos that went viral showing, you know, groups of people rushing into, there was a Nordstrom in California, there are a couple, like, of famous videos of this. And that all got sort of spun into this idea that retailers are at the mercy of the sort of lawless public. And, if you think about what 2021 was like in the US, there was like a real sense of general unease, coming out of the pandemic and people being nervous about going out again and a lot of people got really used to shopping online. So it tapped into this, like, generalized anxiety about the outside world. Holder: Whether this shoplifting panic was backed up by concrete evidence, Amanda says, is another story. Mull: There's not a lot of good data available on theft rates. Often these numbers are released by like, industry lobby groups and people who are trying to demonstrate a phenomenon that they believe is happening from surveys that ask retail management how they feel about shoplifting, how they feel about certain types of product loss as a threat to their business. It is very squishy. Holder: Feelings are a lot different than numbers. Mull: Yes. Yes. They're asking about perception instead of asking for proof. Holder: These stores do keep tabs on what they call 'shrinkage'. Mull: Which is the industry term for inventory that's lost and cannot be sold for any cause. And that can be cargo theft, it can be employee theft, it can be shoplifting, it can be checkout errors, it can be paperwork errors, it can be missed delivery. You get spoilage, damage. Holder: Kind of like the cost of doing business. Mull: Right. You can lose inventory in like a zillion ways. But like over the past like 15 or 20 years, the shrink rate in US retail is like pretty stable. That generally hovers at about 1.5%. So if you are a retailer, on average, you're going to lose about one and a half percent of your sellable inventory to something that is, like, sort of beyond your control. Holder: So that shrink rate hasn't changed much. It's a similar amount of inventory lost over the last few decades. But Amanda says, what has changed is the number of employees stocking the shelves. Mull: Something that's really important to understand about retail stores in the US, especially retailers that sell sort of like low dollar, everyday essential types of things — drugstores, big box stores — is that they are almost entirely like woefully understaffed. It is really hard to staff these stores, because the jobs themselves just aren't very good. They don't pay very well, their hours are not predictable, you're on your feet all day, you may or may not get benefits. So, retailers are understaffed, and over the years, retailers have cut staffing even further. And that is, like, sort of an ideological thing, like, retailers really love to reduce labor costs, and that, after a certain point, just means having fewer workers. So, when you get to that point, it becomes really hard to manage a store well. So what retailers have done is sort of retrofit stores with systems that mean in their minds that they can run a store with fewer employees. That's what self checkout is. And that's what these locked up shelves are. Holder: And that Great Shoplifting Freakout of 2021? Amanda says it just helped justify these sorts of measures. Mull: If retailers can't and won't hire more people, then what they're going to have to do is justify the sort of externalities of these staffing choices. So you lose the essential functions of the store. And more of the labor of running the store is put on the customer. And it's really convenient to have sort of an external threat that has forced you to do these things rather than your own management decisions that has forced you to do these things. Holder: That's so interesting. So, basically, stores stopped hiring people at the same rate, to do the work of actually staffing these stores, helping people with checkout, and keeping an eye on things, making sure people weren't stealing goods. And so, instead of hiring more people, they installed more plexiglass. Mull: Yes. And when you do that, you get some externalities. Holder: Externalities that you're probably familiar with. Mull: You press the button, nobody comes. You press the button again, and, you know, it's been five minutes, ten minutes. You gotta go back to work, you're on your lunch break. You just leave. Holder: Social media is filled with angry customers complaining that locked shelves have ruined their shopping experience: TikTok: It took me 15 minutes to get somebody to come over to like get some laundry soap. TikTok: This turned into like a 30-minute ordeal just to get facial cleanser. Mull: It is one of the fundamental building blocks of, like, modern life in the United States that these stores work. And when they stop working, people get really mad. Holder: Because you want to pop in, get your toothpaste, and leave. Mull: Right, it is a situation in which something that should be easy, something that has been easy for decades becomes totally unworkable. Holder: How have shoppers reacted to these changes? Mull: They've reacted by moving their consumption of these items to a different retailer. So, it's been a boon for grocery stores because a lot of them carry these same goods, and it's been a big boon for online retailers. Holder: It's hurting retail employees too. Who are good at reducing all kinds of shrink. Not just elusive shoplifters, but self-checkout issues and paperwork errors; tracking shipments that arrive with only 19 bars of soap instead of 20. Mull: The retail employees that I've talked to, sort of uniformly hate this system. Your employer is making you run around like a chicken with your head cut off to, like, unlock cabinets of moisturizer or whatever. So you're forcing out people who are your best workers, in most cases, and you're just going to lose product in, like, so many different ways. The store's going to leak like a sieve. Holder: So customers aren't happy, employees aren't happy… and companies' bottom lines are taking a hit too. More on that, and what they're doing about it… after the break. On top of alienating customers and annoying employees… locked up shelves at retail stores have not exactly been good for business. Mull: I think Walgreens and CVS in particular, if you look at their financial results over the past few years, like, it's not been great. They are two companies in a situation where they really do need to figure out how to gain back, um, some customer loyalty and encourage more foot traffic into their stores and things like that. Holder: Amanda says, the first domino to fall was Walgreens CEO Tim Wentworth's admission on an earnings call… that this policy had hurt sales– that locking things up made them harder to buy. Wentworth: When you lock things up, for example, you don't sell as many of them. We've kind of proven that, uh, pretty, pretty conclusively. Holder: How big was that, to hear that from him? Mull: It was huge. This is a topic that retailers do not want to talk about because they know that the general public hates this and so hearing a CEO of one of the main culprits in this phenomenon, say like, 'hey, we understand that this is bad, that this is not a benefit to customers, that something's got to give here, that we are turning away shoppers.' It was one of the few, like, rare public acknowledgments that like this system is bad. We got to figure out something else to do here. Holder: In March Walgreens agreed to a sale — it will go private, after years of shrinking profit margins and a volatile stock price. Slumping retail sales didn't help. It's not the only company that's looking closer at its lock-up strategy. A few weeks after that Walgreens earnings call… came news from CVS: Mull: CVS announced that it was expanding a pilot program that it been running quietly in a couple of New York City stores. What it does is allow people with the CVS Health app on their phones to unlock certain cabinets themselves. Holder: Do you think it'll work? Mull: Well, I think that the theory is, that they're going to have your name, your information, like, you are a known quantity to them, so it takes an element of anonymity out of opening those shelves. And could potentially be a way to move the middleman, which is the employee with the big key ring, out of these transactions in a way that, like, helps the store run a little bit more smoothly. Holder: It's not quite removing the locked shelves altogether. But Amanda says, it's essentially a way to walk back the policy and put more control in consumers' hands. Mull: I think that they understand that they have like overcorrected or gone too far in like how these, programs were implemented. And they can't like fully walk them back. Holder: Because it's just too expensive to rip up your work? Mull: It's too expensive and also it signals failure. Like, you have to sort of present to the investing public the idea that, like, oh, like, the numbers aren't great, but this is working, because if you rip all that stuff out, then people have other questions. Holder: CVS appears to be doubling down on its app-based unlock system: a company spokesperson told us they 'plan to introduce it in other communities this year.' On social media, people have raised privacy concerns about the data the app collects… because it requires customers to sign in to use it. CVS said it 'complies with all applicable regulations to protect customer information. For customers who prefer not to scan the app, assistance is available to unlock the merchandise.' So we're not necessarily going to see our locked up socks unleashed overnight. But not because keeping them behind plexiglass is the best way to deter theft. Mull: The best way to deter theft, like this is, has been studied, is to properly staff your stores. To make people who might be thinking about stealing something feel like they're going to be seen, they're going to be caught, that they cannot just go in there undetected and walk out with whatever they want. Holder: What do you think the future of shopping might look like at places where these lockups have been so central? Mull: Stores in that arena are probably going to feel more and more like vending machines. I went to a retail conference recently where like there was a lot of exhibitors with third party vendors that sell like technology solutions for automating more things within stores, that make it possible for a customer to unlock something themselves, that makes it easier to track customers in stores, and identify people that, that do all of this stuff, that seems to be bent toward automating a lot of these things or putting more things on the customer's plate to do themselves. I think there's been like a re-estimation of the value of like a good in store experience in a lot of other types of retailers. And I think this has been a pretty effective cautionary tale because, like, the level of ire and the level of anger that is directed toward retailers that do this, and the level of, like, grudge-holding that people will do against these retailers, I think has been instructive for other retailers to say, all right, we know what not to do. More stories like this are available on
Mint
17-07-2025
- Business
- Mint
Jane Street Scrutiny in India Puts Secretive Firm in the Spotlight
(Bloomberg) -- Never miss an episode. Follow The Big Take daily podcast today. Jane Street is one of Wall Street's most profitable and secretive firms. And when Indian regulators accused it of market manipulation earlier this month, it rocked the finance world. On today's Big Take podcast, Bloomberg finance reporter Katherine Doherty joins host Sarah Holder to go inside Jane Street's unique trading strategy and what new regulatory scrutiny could mean for the high frequency trading industry. Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts. Terminal clients: click here to subscribe. Here is a lightly edited transcript of the conversation: Sarah Holder: Jane Street is one of Wall Street's most profitable trading firms. You've maybe heard the name. But unless you're a Wall Street insider, you might not know who they are, or what exactly they do. Katherine Doherty: They are the middleman in many ways. Holder: Katherine Doherty is a finance reporter for Bloomberg. Doherty: Even though they're such a powerful player in finance, you wouldn't really know that you are interacting with them in the market. Holder: If you've ever bought stock on Robinhood or made an investment with your retirement fund, chances are… Jane Street, or a firm like it, helped process that trade, behind the scenes. Every day, they facilitate billions of transactions between buyers and sellers, across markets. Doherty: Jane Street is connected to all of the pipes, all of the plumbing of the market. Holder: And that means Jane Street makes a lot of money from trades. In 2024, its revenue was $20.5 billion, almost double what it brought in, in 2023. But that growth has also come with new scrutiny. Earlier this month, India's main financial regulator accused the firm of market manipulation. Bloomberg TV: India's market regulator is barring Jane Street from access to its local securities market. Bloomberg TV: It may actually be the biggest fine if it materializes ever, uh, you know, for such kind of market manipulation, alleged market manipulation. Holder: Jane Street has called the regulator's conclusions 'fundamentally mistaken' and has said it will assess its legal options. But Katherine says, the rest of the industry is watching to see whether this investigation sets off a reckoning that could change the way firms like Jane Street operate around the world. And just how fast they might grow. I'm Sarah Holder, and this is the Big Take from Bloomberg News. Today on the show: we take a look at one of Wall Street's most secretive firms. How Jane Street's trading got it in hot water — and what that could mean for regulation in a corner of the industry that not many people pay attention to. Jane Street has a reputation as a firm with highly-compensated, high-performing talent. Doherty: The people at Jane Street are often described as mathematical. A lot of them play poker. They have puzzles in their offices. They're problem solvers in the most advanced way. Holder: And those puzzle-playing problem solvers spend their days helping institutions and other investors make trades. Doherty: Essentially, they're matching a buyer and a seller. You think that when you place an order it's as if you go to the grocery store and you're buying something. Well in the markets, there needs to be someone that actually helps make that match happen. Jane Street is that firm. Holder: They're the middlemen for all sorts of transactions. If you buy stock in a company through a trading app or if you ask a broker to invest your money, Jane Street might be the firm behind the curtain, helping move that money around. Or you might be interacting with one of its competitors. Doherty: And you don't know if it was Jane Street or if it was Citadel Securities or Susquehanna. There are so many of these market-making firms, and frankly, until the meme stock craze, retail traders didn't seem to care, or at least there wasn't as much discussion. Holder: Jane Street is a private company — and not a bank. While it has to abide by market rules, it isn't subject to the same degree of regulation that big banks such as JPMorgan and Goldman Sachs have faced since the 2008 financial crisis. Those other financial institutions are under pressure to avoid risk-taking. And that gives Jane Street an edge. Doherty: They can invest in their technology in the way that banks can't because banks have to be a little bit more conservative with their own money. And the secret sauce is that they're able to code in this special language as well. And what that means is it is hard for other firms to copy exactly what Jane Street is doing. And they're able to take really big bets in the market. They're not in the game to necessarily invest in a company because they think that the company's earnings are going to increase over time. Or they're not looking to invest in even a sector because they believe in that sector. Their primary goal is to just be greasing the pipes of the markets. Holder: They're not just using elbow grease. They're using powerful technology to guide their trades. If they can anticipate how markets are moving from one second to the next, they can offer the right prices — and profit. Doherty: So they've developed algorithms. They're using data and they're digesting that data to make inferences, they're guessing where the market's going to be moving. So if they, for example, see a share, maybe it's a share of Apple and there's a buyer in the market that is looking to buy at a certain price and there's a seller in the market, their algorithm is telling them to match at a certain time, at a certain price, and it is in milliseconds. So this is very, very fast. And they're doing this with so many shares that the way that they make money is they're taking a tiny profit—the difference between where the share is sold and where the share is bought—and they're pocketing that, and it might be pennies. You might think, 'oh, this company that makes $20 billion in a year, how do they do that?' It adds up over time, and because they're using their algorithms, their technology, their people, over time they make billions of dollars. Holder: So it's a volume game and it's a speed game. Doherty: Yes. Holder: A volume and speed game known as high-frequency trading. Still, there's a lot about the firm we don't know. And that sense of secrecy is deeply embedded in the company's culture. Its offices even hung a poster with a famous World War II slogan: 'Loose Lips Sink Ships.' Doherty: You don't see a lot of Jane Street executives in the public eye. They're not ever really on TV or even in really niche financial conferences. If you go on LinkedIn, at one time, profiles were discouraged. And now if you do see a profile, there's often not a title attached to a person's name, and that is reflective of how this firm operates in terms of its culture. The times that it has been brought into the public eye, it's probably something they would not want. Holder: One of those moments came with the collapse of FTX, the multibillion-dollar crypto company that had been founded by a former Jane Street employee, Sam Bankman-Fried. Doherty: When FTX collapsed, there was a lot of discussion about the risk-taking that Sam's firm took, and some comparisons to Jane Street. Holder: But Jane Street hasn't been the target of any major regulatory investigations itself. Until… now. Earlier this month, India's regulator, the Securities and Exchange Board, or SEBI, started investigating the firm for market manipulation. Holder: Why did regulators start circling? Do we know what made them want to investigate Jane Street in India? Doherty: So it all stems back to a lawsuit that the firm had with former employees that went to the hedge fund Millennium, and they were suing these former employees for, we didn't know it at the time, but ended up being identified as an options trading strategy. They identified what they didn't want to lose as proprietary information. Through this case, the number, the profit that they were making in options specifically, and in India, came out. It was such a large number that the regulators in India said, 'hold on a second. We have to look into this.' Holder: We get into what those regulators found, and what it could mean for the way firms like Jane Street operate around the world…. After the break. Holder: In the past few years, Jane Street and other market-making firms saw an opportunity to expand their presence in Indian markets. Over the past five years, India's options market has boomed — along with the number of retail traders. That growth has also led to more volatility, and a higher potential for profit. And for Jane Street, that paid off — the firm made more than $4 billion in India in just over two years. Meanwhile, regulators in India said nine out of 10 individual traders who bet on futures and options lost a significant amount of money doing so. And that's part of what got regulators looking at how these firms were operating. Bloomberg's Katherine Doherty walked me through what happened. Doherty: You have the options market and you have the equity market. They're directly correlated. Holder: The equities market is where you buy or sell stocks. The options market is where you buy the option to buy or sell stocks at a certain price at a future date. The key is betting on which direction the stock price might go… Something that's influenced by activity in the equities market. Doherty: The regulator in India, the Securities and Exchange Board, is accusing the firm of manipulating the market. Using its money to place such large bets on one market that it moves the other market in a way that the firm knows they're going to profit from it. The firm has said that this is the term 'arbitrage.' Arbitrage is just when you spot a dislocation or you can see that the market is inefficient in a way that you can profit from that. And you can essentially, what the firm would argue is, we were actually making the marketplace better. We were making it more efficient. So yes, it might have moved, but it was moving, in some ways, closer to where it should. Holder: Basically, the regulator is accusing Jane Street of playing both sides of these markets — and alleging that the firm was putting so much money on one market that it was impacting the other. The regulator ordered the seizure of about $570 million in profits from the firm, which it claims were unlawful gains. It also temporarily banned Jane Street from trading in the Indian securities market, while it conducts its investigation. Holder: I mean, the Indian options market is pretty unique. What could this order mean for Jane Street's or other similar market-making firms' operations elsewhere around the world? Doherty: First and foremost, there's nothing stopping a regulator from looking into a firm that they regulate. That's their job. So anytime a firm is in the news, like, like Jane Street, there's increased scrutiny. Holder: Does it mean that other regulators from other countries where Jane Street operates might be wanting to turn over more stones? Doherty: Yes. I talked to someone that said, regulators don't wanna be asleep at the wheel. So even if it's just precautionary, it's very likely that a regulator might take a second look at what they have access to. And if they don't have access or they have more questions, they might ask Jane Street to answer those questions, just so they have some reassurance that there's nothing that they see as potentially nefarious or manipulative. And it goes the same for a peer of Jane's. I've talked to other market participants that would be competitors to Jane, other market-makers, and one firm said that right after this order came out, they were digging through the order and they also had an internal meeting amongst themselves to say, 'hey, are we doing anything that might not be exactly the same as what Jane Street was doing, but let's look through our trading strategies to make sure there's nothing that comes across as questionable or that could be brought up by regulators as nefarious.' And this person was quick to say, like, 'We didn't, you know, come to that conclusion.' But you have to be proactive. Holder: Jane Street has set aside nearly $570 million in an escrow account, to comply with SEBI's order while it investigates. A person familiar with the matter told Bloomberg that the firm doesn't plan to immediately return to India's options market. For now, market-watchers will wait to see what the regulator's investigation turns up, and whether Jane Street decides to file an appeal. Holder: What could this scrutiny of Jane Street mean for the entire high frequency trading, market-making industry? Doherty: It's a really important question, and it depends who you ask. People in the industry even when I ask that question just about Jane Street's future, I had a quick answer from someone that said they're so large and they're so good at what they do, that this won't impact the amount of trading that they're still able to facilitate and that they're just going to keep doing what they do because they have such an important role, across global markets. More stories like this are available on ©2025 Bloomberg L.P.
Bloomberg
15-07-2025
- Politics
- Bloomberg
The Leaked Phone Call that Plunged Thailand Into Crisis
On today's Big Take Asia podcast, how a leaked phone call between Thai leader Paetongtarn Shinawatra and former Cambodian Prime Minister Hun Sen triggered a political firestorm. Never miss an episode. Follow The Big Take daily podcast today.
