The cost of executive blunders

Today on the show, we'll talk to a business owner who's just starting, a business owner who's selling, and we'll talk about a business leader who is suddenly associated with risk. From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab, in for Kai Risdahl. It's Monday, November 9th, and it's good to be here with you. By now, I'm sure you've heard, NVIDIA's board has opened an investigation into its CEO, Jensen Huang, who's admitted to having an affair with a woman suspected by the U.S. government of being a spy for China. It may be a problem for national security, it's likely a problem for the already soured image of AI, and it's definitely a problem for NVIDIA, especially because the chipmaker's public identity is deep. He co-founded the company in 1993, and has developed something of a cult following among investors. Now, having a CEO who's basically synonymous with a brand isn't all that rare, especially in tech. But as Marketplace's Henry Up reports, it has its pluses and pitfalls. Having a highly visible CEO can be a good thing for a company. For one, it puts a human face on a corporation, says Marguerite Wiersema, a professor emeritus at UC Irvine. A company is kind of abstract, you know, like, who is McDonald's? I had to look it up. The CEO of McDonald's is a guy named Chris Kempchinsky. But think Tesla or SpaceX, that's Elon Musk, OpenAI, Sam Altman. If a celebrity CEO resonates with the public, that can generate more customers, Wiersema says. Plus, CEOs matter to analysts, who rate whether public company stocks are worth buying. When they evaluate these companies, the CEO, is a large part of that valuation. A CEO investors are confident in can drive a stock price up. But there's also a lot of risk in tying a company's fortune to one person, because attitudes among the public and investors can change. Youjad Cheng is at the University of Virginia. In the past, maybe you have a CEO whose identity really kind of resonates with the customers or the broader community. But that doesn't necessarily mean that that's going to continue into the future. The public turns on a CEO. And maybe they turn to competitors. Not great. The other risk is if something unexpected happens to that famous CEO, say, a medical crisis, or they're found to have had an affair with a suspected spy. Then what? That's why it's important for corporate boards to do succession planning, Cheng says. I think it should always be kind of on the back of the board's mind of like, OK, who's next? Best practice, says Anthony Nyberg at the University of South Carolina, is for a board to push company leaders to identify top talent within their ranks. And make sure that that talent is getting developed in a way that there is some optionality for the board for whatever might come in the long term in terms of future transitions. That's a difficult conversation with any CEO, Nyberg says. And the problem with celebrity CEOs is they often gain more and more influence over their board. And that makes it even more difficult for the board to push back and make sure that there's a strong successor leader in the pipeline. The worst case scenario for a company? A charismatic CEO gets pushed out and there's no clear leader ready to take their place. I'm Henry App for Marketplace. Wall Street today. You can guess how NVIDIA performed, but it didn't seem to put a dent in the markets. We'll have the details when we do the numbers. The average 30-year fixed-rate mortgage sits at 7.18 percent, according to Freddie Mac's latest reading. That's not exactly low by recent standards. The rate hovered around a percent less for much of 2025 and early 2026. But it is a recent low. Throughout the summer and early fall, the 30-year fixed sat around 7.4%. As war in the Middle East and inflation heated up, and as the Fed started raising interest rates, is this recent downward shift going to help bring some movement back to the housing market? Marketplace's Mitchell Hartman reports. First thing to know is that mortgage rates are pegged to that key long-term investment benchmark, the 10-year treasury bond. Second thing to note, says Susan Wachter, real estate professor at the Wharton School. The impossible forecast is forecasting the 10-year, and therefore, the mortgage rate. But we can look back to try and understand what's been moving them recently. Why the pullback in rates? It's because inflation, it's hoped, will come down with oil prices coming down. Investors are increasingly betting, following the midterms, that the Middle East war will wind down, and the Fed will hike short-term rates one more time, then pause for a bit. Guy Sakala tracks the market at Inside Mortgage Finance. The drop we've seen in mortgage rates is certainly very well. But it's probably not enough to move the housing market significantly. We still have a war in the Middle East. We still have tariffs. His prediction for mortgage rates? In the next month or two, I think we're going to bounce around 7%, somewhere below 7.25%. I'm not holding my breath for mortgage rates to come down. I don't think any seller or buyer should be waiting for that to happen. Economist Daryl Fairweather at real estate firm Redford, says while no one's likely to save on their mortgage payment in the near term, there is better news on the cost of purchasing a home. Home prices are very slowly correcting down. They are increasing slower than the pace of inflation, which means that there is an opportunity for wages to catch up to home prices and for affordability to improve. Unfortunately, there's little hope for a surge in housing supply to come online anytime soon. Builder Sentiment right now, it is the lowest level since June 2012. Dhanushka Nanayakara is with the National Association of Home Builders. It's really a tough situation for the builders right now. Interest rates and then energy and the material costs and the worsening labor situation too. She says deportations are causing a shortage of construction workers, while data centers are competing fiercely for skilled tradespeople driving up wages. I'm Mitch. I'm Rachel Hartman for Marketplace. We'll be getting a lot of data on business conditions this week. There's small business optimism out tomorrow and the producer price index, which measures input prices out on Friday. Those top line numbers give us the big picture of how businesses are dealing with fuel costs and inflation and tariffs, but they don't get into the nitty gritty. So we called up Erin Calvo Bocci to get her take. She's the owner of CB Stuffer, a specialty candy retailer and wholesaler in Massachusetts. Hi, Erin. How are you? How are you, Kristen? Good. Crazy, but good. Crazy, but good? I shouldn't say crazy, just different. Just different. Well, tell me why. I hear you have some news. Yeah, so I have some big news. CB Stuffer has sold. So just two weeks ago, we sold the company, and now I'm in the transition stage of the company. And he's actually asked me to stay on for a bit with helping with marketing. Wow, that's a big step. How do you feel? Today is the first day that I feel like I'm in the right place. I feel like a fish out of water. I don't know what to do. So I'm happy I sold. However, it's very unsettling. So in that regard, it's different. I'm sure it will all come together. I have just started last night. I'm teaching now for high school students who are interested in entrepreneurial studies. Wow, that's great. I mean, the last time we talked, you seemed cautiously positive. What was behind the decision to sell? So my decision behind selling is really because we just got hit with another round of increases. And I was starting to panic in the sense of thinking, okay, how much more debt am I going to create for myself? And really feeling overwhelmed with what's going to happen because accounts that we had been selling into, that would be really busy this time of the year, such as orchards, they were cutting back. This just became more fear of what it was like back in 2008, which I have already gone through that. And I honestly, I just don't have it in me to do that again. I really could not forecast what we should be doing in regards to all the expenses that are going out. Where were you seeing cost increases the most? uh, logistics that I literally saw. I had booked transportation, uh, for a truck to come and pick up going. We were sending a pallet to our customer that we have been selling into. And literally from one day to the next, the rates went up because of the fuel increases. Everyone else was adding more to what their costs are. So our pulp, so all the packaging, the boxes, that increased. And then for that to get to us was another increase. So it just really became hard to manage in a shorter amount of time. Yeah. Was that, that moment a defining one for you when you were just like, this is not working anymore? Yes. Yeah. There, there certainly was a day that I said, I, I left and my husband, he said it, he's like, I can tell you done. So when the person came to us and said they were interested, it just all felt like everything had aligned. Kismet. Yes. You were in business for more than 20 years then. Is that right? Yes. Yes. 23 years. That's a lot of business expertise. How have you seen business conditions, change? It's, that's a great question, Kristen, because back then you didn't have the internet and now it's, there is just so much more that we're inundated with. So it becomes harder because the customer is more particular now and they're willing to spend money, which is fabulous, but they, they want everything to be perfect for every dime that they're spending. So it became a pivot of who's a sustainable customer and, and that's the million dollar question still, because I don't know exactly who the million, who the sustainable customer is now. Well, Erin, after this transition is up, what's next for you? You know, I still love specialty retail, so I still want to stay, you know, I still want to stay in business development, but me going into this teaching high school students, that could be a new career. So I'm really open to, to seeing just wherever the cars are going to fall at this point. Well, we wish you the best in this transition. I'm sure those students have a lot to learn from you. Oh, thank you, Kristen. I, if for nothing else, I want a more educated entrepreneur to understand what the challenge is. And then how can you get above it? Because there is still room. And like I said, I'm so proud that we were able to sell the business versus closing it. Erin Calvo Bocci, longtime small business owner and now teacher. Thanks, Erin. Thank you, Kristen. Have a great day. Coming up, we would see if I could turn my Etsy shop into a full-time business. Every business starts somewhere. But first, let's do the numbers. The Dow Jones Industrial Average leaped 1,104 points, about two and two-tenths percent, to close at 52,389. The Nasdaq surged 673 points, about two and three-quarters percent, to finish at 25,253. And the S&P 500 rose 173 points, about two and four-tenths percent, to end at 7549. Let's talk NVIDIA. Shares slid about four and three-tenths percent. Chipmaking competitor Advanced Micro Devices saw shares jump about 13 and a quarter percent. Bonds fell. The yield on the 10-year T-note rose to 4.88 percent. You're listening to Marketplace. This is Marketplace. I'm Kristen Schwab. China is the world's largest exporter of stuff, around $4 trillion worth of stuff, according to the World Trade Organization. Exactly what that stuff is has changed a lot over the last couple decades. The production powerhouse was once associated with plastic toys and T-shirts. And now, of course, China makes computer chips and self-driving cars. That advanced manufacturing has changed a lot over the last couple decades. has trickled down into more everyday consumer goods, like fountain pens and running shoes. And Americans are increasingly seeking out labels that say, made in China. Wes Kosova wrote about this for Bloomberg. Wes, thanks for coming on the show. Thanks for having me. When I was growing up, made in China kind of symbolized low cost and low quality. How has that changed over time? I think a lot of people still have that association. And it's a familiar path. A long time ago, it used to be like made in Germany was the kind of gold standard. And if you saw made in Japan, you thought, oh, that was kind of cheaper. But then they got really good at manufacturing. And now that's kind of like a standard. People like that. And made in China for quite some time now has been really, really good. If you have an iPhone or any other kind of phone, it's likely made in China. And so the quality of made in China is so much better than I think people's associations with it that are still lagging in certain products. Hmm. Yeah, let's talk about advancement in manufacturing. What are some things that China makes really well? Well, the fact is anything that they want to make really well, they make really well now. They started out with that kind of cliche of being the factory floor for the rest of the world. And so people would bring their designs and they would make stuff. And then a lot of companies that used to manufacture for other brands started saying, well, why don't we create our own brands and start making this stuff ourselves? And this is where this story that I wrote kind of comes in. Because even though we are all using a lot of made in China products, among people who are really particular about products they care about, like hobbyists, they still had this kind of feeling that made in China wasn't as good. And so things like camera lenses, you know, if you're an amateur or even a pro photographer, you really care about your camera lenses. And so lenses made by a big company like Nikon or Sony, you wanted those lenses because they were great. Well, Chinese manufacturers started making lenses and they were okay. Like some of them were pretty good. A company like Viltrox started making lenses. And at first they were fine. And they were kind of like the budget alternatives. But then Viltrox started really investing in manufacturing and in materials and they started getting really good. Now a Viltrox lens is able to compete with some of the big brands, some of these Fujifilm lenses at a lower price. And now if you're a photographer, that kind of, I don't know if you'd quite call it a stigma, but maybe a hesitation you would have about a Chinese made lens is starting to dissipate. Hmm. I sense maybe you're a photography guy. Does this include you? Is this personal experience? Yeah. You know, this is one of those kinds of stories you write based on your own experience, which is always a dangerous thing. But the reason I like to talk about this is because I think it's I wanted to write this story. It was, I did start to see this evolution. And it used to be, if you would go into like one of the photography forums and people would say, Hey, I tried out this new Chinese lens. You would get a lot of, Oh, I would never put a Chinese lens on my camera. And a lot of that is dissipated. And I think it has to do not so much anymore with Chinese products still being more cost-effective. And a lot of them are what they've done. A lot of these companies is in the market and found kind of spaces where the big manufacturers maybe don't have a lens that people want. They go in and they ask all these enthusiasts who are hanging out in these places talking about photography or other things. They say, what do you guys want? And then they listen and they very quickly then turn around products. So they're finding places where they can make a difference where sometimes they don't have to go head to head with a premium product that already exists and has a loyal following. Hmm. For consumers, is there just a generational difference here too? I mean, if you weren't around in the early 2000s, do you just see Chinese made products differently? Yeah. In fact, this is a really important point. I talked to this professor named Glenn Atwala, who is a business professor at the Burgundy School of Business in France. And he studies why people choose one product versus another. And one of the things he found is that there really is a generational difference. That is that especially among younger people, there's this kind of idea that, well, China is just faster to adapt. They're more of the times. They are more technologically advanced. Yeah. They just don't see made in China as being lesser than in the same way that older generations do. Do you think this says something about the cultural relevance of China or its soft power? What does it say about where China sits in the world? Sits in the economy? I think that what it really says is that China. has finally reached a place where they really do compete on a level with the major companies from all over the world. Part of that is because so many of the major companies around the world depend on Chinese manufacturing. And part of it is that China itself has just, over time, become so ubiquitous in such a normal part of everyday life for people all the way around the world that it's just impossible to avoid the products that they're making. Wes Kosova is editor-at-large at Bloomberg Businessweek. Thanks, Wes. Thanks, Kristen. There's this sentiment floating around the internet, right? That we should all do more side quests. You know, things that aren't necessarily productive, that don't need to make money, that you don't even need to master. But sometimes the pull of the side quest is too strong, and suddenly the side quest becomes the main quest. That brings us to the latest installment of our series, Clocked Out. My name is Stephanie Servi, and I'm in Monterey, California. And in mid-2025, I turned my side hustle with an Etsy shop. Into a successful full-time business running a local yarn shop. My previous job was with the Naval Postgraduate School on an in-house contract design team. I was doing what I love, but after a while, I started noticing I was having nerve problems in my hands. I got carpal tunnel syndrome and cubital tunnel syndrome in both. I tried my best to stick it out and keep working because it was meaningful work. But eventually, I just had to admit, this isn't working anymore. Leaving my traditional corporate job was absolutely scary. And I sat down with my parents, and what we ended up deciding was this side hustle. This was a side hustle that I'd had since before I left college, which was just making little jewelry pieces or doing freelance design here and there for people. We would see if I could turn my Etsy shop into a full-time business. So, I started designing fiber arts tools. I had a couple of people from my local craft guild come to me and say, Hey, can you design more bobbins for my spinning wheel? Can you make a tool for my tatting that makes this particular technique? Can you make a technique that makes this particular technique less fatiguing on my hands? And soon, I had more ideas and products I was designing than I knew what to do with. Even just in the past year and a half, my disability has progressed. But even with those limitations, I have still been breaking even. So, in about a year, maybe two, I want to have a retailer. I want to have a retail shop. I have a budget figured out for how much money it's going to cost me to do that. And it's a big number. But being able to work from home all day, being able to take breaks when I need to, I can now pace my work to my body instead of having to pace my body to my work. Stephanie Servi, a yarn shop owner in Monterey, California. We're bringing you stories from this series all week. About people leaving the corporate world to do their own thing. Tell us your story at marketplace.org slash clocked out. This final note on the way out today. We got the latest survey of consumer expectations from the New York Fed. Remember, this survey was done in October, so before the midterm elections. And before we got last week's great job. The good, or at least not bad. Inflation expectations in the short, medium, and long term were basically the same as the month before. The bad? People increasingly are on edge about jobs. Unemployment expectations for a year from now went up to its highest reading since April of 2020. And we all remember what was happening back then. The sentiment was especially sour for people without a college degree. Amir Babawi. Caitlin Esch. Noya Karr. Steve Mullis. And Stephanie Seek are the Marketplace editing staff. Kelly Silvera is the news director. And I'm Kristen Schwab. We'll see you back here tomorrow. This is APM.