Good morning.
The brutal terror attacks on Israel and the escalating violence they have triggered have cast a terrible pall over the world for the last two weeks. Many CEOs have spoken out on the issue, as Yale’s Jeff Sonnenfeld writes in a commentary piece here. Many more are dealing with consequences affecting employees with friends and family in both Israel and Gaza.
I had an interesting conversation with one Israeli entrepreneur this week who found a silver lining amid the horror. His name is Gal Krubiner, and he is co-founder and CEO of Pagaya. The company employs 700 people, 400 of whom are in Israel. It works with U.S. banks to make loans to people who otherwise would not have access to credit, using AI to qualify them. “Fifty percent of people applying for a loan are getting denied,” Krubiner said. Pagaya aims to help fix that. The company went public through a SPAC transaction last year, and currently has a market cap of around a billion dollars. It has funded more than $18 billion in loans, it says.
Krubiner says many of his Israeli employees have joined the war effort, and as a result, he is having to rely somewhat more on his U.S. employees to run the business. (Less than 10% of the total workforce has been called upon for duty, according to Pagaya.) But, Krubiner says:
“To see the people, even between the U.S. and Israel, helping each other is amazing. People are actually wanting to help, rather than running away. In Israel in the last few years, I think that when you would see the news, you would see how politicians have been dividing everyone. There have been Orthodox and not Orthodox, Arabs and Jews, right wing and left wing. Then in a single day, everyone is united. It’s like, unfortunately, your 9/11. Everyone is coming together. So it’s very bitter, but a little bright.”
You can find more on how CEOs and others are responding to the conflict here, and see one case study of a CEO who got it wrong here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
[This article has been updated with further details from Pagaya about how many loans it has funded and how many of its employees have joined the Israeli war effort.]
TOP NEWS
The hot Midwest
Eight of the nine housing markets that reported the greatest appreciation in home values for the year ending Aug. 31 are in the Midwest—with Kansas City leading the pack. “Cities like Cleveland, Columbus, and Pittsburgh have more going for them in the near future than a Las Vegas or Phoenix,” says Ed Pinto, director of the AEI’s Housing Center, which compiled the data. Pinto blames a “price explosion in the Southern tier” for creating a “huge barrier for most potential buyers.” Fortune
Beijing merger meddling
Chinese officials are reportedly considering whether to delay approval of chip company Broadcom’s $69 billion deal to buy VMWare. Beijing had earlier dragged its feet on approving Intel’s $5.4 billion acquisition of Tower Semiconductor, eventually scuttling the deal. China reserves the right to evaluate mergers—even those involving two non-Chinese companies—if they conduct significant business in China. Financial Times
A problem with Jon Stewart
Apple is reportedly ending its show with comedian and former Daily Show host Jon Stewart due to creative disagreements on content involving AI and China. Apple executives were also concerned that more disputes might arise heading into the 2024 U.S. presidential election. China is important to Apple, both as a consumer market and production hub. CEO Tim Cook made a surprise trip to the country this week, meeting with commerce minister Wang Wentao. The New York Times
AROUND THE WATERCOOLER
Tesla’s poor Q3 numbers show it’s not a tech juggernaut, but a struggling car company by Shawn Tully
One Wall Street Bank says ‘Blame the Boomers’ for the broken housing market—but it’s overlooking these 4 factors by Ben Carlson
It’s official: The housing market is turning millennials into their parents. A Fortune 500 economist says it’s a déja vù market that is replaying the 1980s by Will Daniel and Sydney Lake
Macau is back as the world’s top gambling hub—and casino companies like Las Vegas Sands are starting to reap the rewards by Lionel Lim
Elon Musk used the Tesla earnings call to bash the work-from-home crowd. He says advocates give off ‘Marie Antoinette vibes’ and are ‘detached from reality’ by Eleanor Pringle
This edition of CEO Daily was curated by Nicholas Gordon.
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