WEBVTT - Tesla, Markets, Bitcoin, and Deere (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.600 at Bloomberg dot com slash podcast. Auto Nation they put 0:00:23.640 --> 0:00:27.680 out some good numbers. Stock is up pretty substantially today. 0:00:27.720 --> 0:00:30.440 But here's something that um talking about the car business. Matt, 0:00:30.480 --> 0:00:32.680 so I just want to come come along with us. 0:00:33.040 --> 0:00:36.239 The uh they're talking the CEO is talking about he 0:00:36.280 --> 0:00:38.840 expects light vehicle sales to be close to fifteen million 0:00:38.880 --> 0:00:42.280 this year, up from thirteen point seven million in two. 0:00:42.440 --> 0:00:45.800 Where's the seventeen million number. Let's let's get Kevin Tynan 0:00:45.880 --> 0:00:48.200 on here. Kevin Tyne he covers all the auto stuff, 0:00:48.200 --> 0:00:51.640 the car stuff, truck stuff for Bloomberg Intelligence. He is 0:00:51.800 --> 0:00:55.840 clearly an expert. So Kevin, I look at the Auto 0:00:55.880 --> 0:00:59.400 Nation numbers, good numbers, But the CEO saying fifteen million SAR? 0:00:59.680 --> 0:01:01.320 Is that? Is that all you guys can do? Kevin? 0:01:01.320 --> 0:01:04.479 There's nothing, there's almost nothing that makes Paul angrier than 0:01:04.520 --> 0:01:08.559 not aiming for peaks are other than working from home, 0:01:08.720 --> 0:01:11.120 which makes him less angry now that he has a 0:01:11.160 --> 0:01:21.520 beach house. Yes, Kevin, am I here here all right? 0:01:21.959 --> 0:01:24.120 So here's I thought was interesting about some of the 0:01:24.280 --> 0:01:27.920 Auto Nation numbers. Was you know, they talked about beware 0:01:27.920 --> 0:01:30.800 going forward, you know, chips not so much an issue. 0:01:31.160 --> 0:01:37.200 Uh uh, left some demand on the table in in two. 0:01:37.520 --> 0:01:42.080 So automakers ramping up some production and prices are gonna fall, 0:01:42.760 --> 0:01:44.759 which is not what happened in the fourth quarter, right, 0:01:44.840 --> 0:01:47.600 It was I think the third consecutive record price or 0:01:47.640 --> 0:01:53.240 average revenue per transaction for Auto Nations specifically in the quarter. 0:01:53.320 --> 0:01:58.440 But but gross profit per vehicle new and used was compressed. 0:01:58.760 --> 0:02:01.840 And really what that comes down too is the manufacturers 0:02:01.880 --> 0:02:08.240 seeing retailers getting over sticker from November one through November 0:02:08.320 --> 0:02:11.120 twenty two and saying, well, obviously we're not We're not 0:02:11.200 --> 0:02:15.160 charging enough at wholesale. So margins are compressing for automation, 0:02:15.200 --> 0:02:17.680 which is where they kind of directed your eye during 0:02:17.720 --> 0:02:22.040 the call or during the release. Yet prices are still 0:02:22.200 --> 0:02:24.919 very high, in fact, another record for them for this quarter. 0:02:25.040 --> 0:02:28.600 So yeah, I mean, I think the industry or the automakers. 0:02:28.639 --> 0:02:33.120 The manufacturers don't want to leave sales behind, so that 0:02:33.200 --> 0:02:35.800 means a little bit more production, which just comes along 0:02:35.800 --> 0:02:39.080 with with softer pricing. But we're not going back to 0:02:41.560 --> 0:02:45.839 pricing structures. I always thought, you know in the Sopranos, 0:02:45.840 --> 0:02:50.600 when Tony takes over that um, gambling addicts sports business, 0:02:50.760 --> 0:02:53.120 and he just squeezes in for every penny he got 0:02:53.280 --> 0:02:57.840 until the guys broke. I feel like the automakers are 0:02:57.960 --> 0:03:00.679 kind of doing that to the average consume. We're right now, 0:03:01.120 --> 0:03:05.280 the average monthly payment for a new car is seven 0:03:05.360 --> 0:03:10.080 hundred and seventy seven dollars. That's double what it was 0:03:10.480 --> 0:03:14.880 in late nineteen pre pandemic. UM. And now we hear 0:03:15.440 --> 0:03:20.280 uh from the credit card companies that, um, they're having 0:03:20.320 --> 0:03:24.480 problems meeting those payments. Mary baritole us yesterday. The lower 0:03:24.560 --> 0:03:29.000 end consumers are starting to miss their auto payments. I mean, 0:03:29.040 --> 0:03:31.120 at some point this is going to be a problem, 0:03:31.120 --> 0:03:34.280 a problem. The prices are just too high, Kevin, Yeah, 0:03:34.320 --> 0:03:36.400 and it's and a lot of that is due to mix. Remember, 0:03:36.480 --> 0:03:39.920 you know, we we can go back to which was 0:03:40.000 --> 0:03:42.680 the last time in the US truck and car mix 0:03:42.760 --> 0:03:45.200 was fifty fifty and it hasn't been closed since, right, 0:03:45.200 --> 0:03:48.280 So there's there's a part of that that is, hey, 0:03:48.360 --> 0:03:51.320 if there is a finite amount of chips or production 0:03:51.560 --> 0:03:54.280 or our cost structure is is lean enough, we're just 0:03:54.320 --> 0:03:57.720 gonna make the most profitable things. Uh. And along with 0:03:57.800 --> 0:04:00.480 that comes higher prices. So you know, I don't know, 0:04:01.320 --> 0:04:06.480 there there's very little opportunity to go back because the 0:04:06.520 --> 0:04:10.040 more affordable things just don't exist anymore. Right. So I 0:04:10.040 --> 0:04:13.720 think that's where you get the automakers looking at it 0:04:13.760 --> 0:04:16.600 and saying, well, buy something certified, pre owned or pre 0:04:16.640 --> 0:04:19.559 owned from your dealerships. We don't live in that twenty 0:04:20.000 --> 0:04:22.720 dollar space anymore. And that's you know, even use cars 0:04:22.720 --> 0:04:25.880 are twenty to thirty dollars now. So yeah, it's it's 0:04:25.880 --> 0:04:30.000 certainly going to affect demand, but I think at different 0:04:30.400 --> 0:04:34.320 points in the supply they don't care as much as 0:04:34.360 --> 0:04:36.719 they used to write because your fixed cost structure is 0:04:36.720 --> 0:04:38.839 now rationalized to the point where you don't have to 0:04:38.839 --> 0:04:42.200 sell every possible thing at any possible price, and you 0:04:42.240 --> 0:04:43.880 can kind of hold out and say, no, we live 0:04:43.880 --> 0:04:47.400 in this fifty dollar market. And I mean the volume 0:04:47.400 --> 0:04:51.599 brands that GM has or that Ford has or Toyota, 0:04:51.720 --> 0:04:54.560 you know those are those are moving up because their 0:04:54.600 --> 0:04:57.680 mixes so much richer. Hey, Kevin, you know we had 0:04:59.080 --> 0:05:02.760 Mary Barra here yesterday at Bloomberg talking to our print folks, 0:05:02.800 --> 0:05:07.080 are radio and TV folks, and boy, really aggressive commentary 0:05:07.160 --> 0:05:11.679 on their push into evs. Give us your your latest 0:05:11.720 --> 0:05:14.120 feeling about kind of what we're gonna hear from the Fords, 0:05:14.120 --> 0:05:16.520 from the GMS, and maybe what it means for the incumbents. 0:05:16.560 --> 0:05:21.000 Like I gotta say, from what I heard Mary tell 0:05:21.279 --> 0:05:24.839 us and what she told David Weston on Bloomberg Television 0:05:24.839 --> 0:05:28.920 and Radio, um, it seems like GM their E V 0:05:29.080 --> 0:05:32.960 business is a coiled spring that's just about to get 0:05:33.000 --> 0:05:36.400 set off. I mean they want to make uh and 0:05:36.520 --> 0:05:41.479 sell fifty billion dollars worth of evs profitable, fifty billion 0:05:41.560 --> 0:05:46.760 dollars the evs by that's just that's like next year, right, yeah, 0:05:46.760 --> 0:05:49.279 that is and and and what was you know, unit 0:05:49.320 --> 0:05:52.400 wise was that's a million, dude, that's a million at 0:05:52.440 --> 0:05:55.400 fifty grand apiece. Right, It's a million in two years 0:05:55.440 --> 0:06:00.600 from forty thousand last year. Right. So so the thing 0:06:00.640 --> 0:06:04.200 I see with that is right, it's it's going to 0:06:04.320 --> 0:06:08.800 be if, if it's possible, it's going to have to 0:06:08.800 --> 0:06:12.240 be a lot of the I don't know, thirty dollars 0:06:12.279 --> 0:06:16.640 you said that, Yester, right, I mean, so, so you 0:06:16.800 --> 0:06:19.600 have to be concerned about margin and profitability if that's 0:06:19.640 --> 0:06:23.000 what you're planning to do, because essentially, right, if you 0:06:23.080 --> 0:06:26.160 look across at Ford who talked about break even on 0:06:26.279 --> 0:06:29.960 Mustang Maki going back, you know, several quarters fifty dollars 0:06:30.080 --> 0:06:33.320 now because of material costs, it's maybe sixty dollars. Well, 0:06:33.360 --> 0:06:36.080 how many thirty thousand dollar things do you want to sell? 0:06:36.880 --> 0:06:39.040 You know, if your cost to produce them is above that, 0:06:39.400 --> 0:06:42.240 you know, a million of them, that's you know, that's 0:06:42.480 --> 0:06:44.720 that's just not how you usually run the business. So 0:06:45.279 --> 0:06:47.360 one or two things has to happen. Either you're gonna 0:06:47.360 --> 0:06:49.640 give up a ton of profitability a margin to make 0:06:49.800 --> 0:06:53.880 that transition and hope you're rewarded with profitability kind of 0:06:53.920 --> 0:06:57.960 the way you know Tesla operated, I'm going to market. 0:06:58.279 --> 0:06:59.960 I mean, there are a lot of people out there, Kevin, 0:07:00.080 --> 0:07:03.600 who were skeptical on Tesla for a long time, and 0:07:03.800 --> 0:07:06.920 yet that company was worth over a trillion dollars for 0:07:07.000 --> 0:07:09.760 a substantial period. Right, So maybe that's the trade is 0:07:09.800 --> 0:07:11.280 that you say, well, we're going to give up some 0:07:11.360 --> 0:07:14.360 profitability or a lot of profitability to do one million 0:07:14.480 --> 0:07:17.040 units in the next two years, um, but we'll be 0:07:17.160 --> 0:07:20.320 rewarded in market cap. What are you driving these days, Kevin? 0:07:21.600 --> 0:07:27.360 It's still my V twelve. Oh, no, big deal like it. 0:07:27.480 --> 0:07:29.960 I think the transition from internal combustion engine to e 0:07:30.040 --> 0:07:31.720 V is gonna ge a tough one. What's the V twelve. 0:07:31.720 --> 0:07:36.120 It's like an SL six five. It's a nice Yeah, 0:07:36.160 --> 0:07:38.520 I don't see the I'll be the last one. You're 0:07:38.520 --> 0:07:42.280 gonna be the last one, all right, Kevin Tyden, thanks 0:07:42.320 --> 0:07:44.200 so much for joining us. Kevin Titan is the senior 0:07:44.240 --> 0:07:47.760 Auto's analyst for Bloomberg Intelligence, working out of our lovely 0:07:48.200 --> 0:07:50.800 Princeton office in Princeton, New New Jersey, and he is 0:07:50.840 --> 0:07:55.440 a noted card geek of some magnitude. Uh I heard 0:07:55.480 --> 0:07:57.880 he bought his car based he bought his house based 0:07:57.920 --> 0:08:01.080 on the garage. Yes, exactly, he said. Went searching for garages, 0:08:01.160 --> 0:08:03.200 his wife was searching for houses, and they find finally 0:08:03.240 --> 0:08:09.440 found one that kind of satisfied both to get to 0:08:09.520 --> 0:08:11.840 these markets. Here Omar Aguilar, he joins us. He's the 0:08:11.920 --> 0:08:15.160 CEO and c i O. A Schwab asset management swap. 0:08:15.240 --> 0:08:16.640 Just give you a sense how big these guys are. 0:08:16.720 --> 0:08:22.000 Schwab seven seven seven billion in assets under managed management, 0:08:22.040 --> 0:08:24.200 the third largest provider of index mutual funds, the fifth 0:08:24.280 --> 0:08:27.200 largest provider of etf These guys are massive. But I'm 0:08:27.240 --> 0:08:28.960 not sure I want to go up to Omar Cock 0:08:29.000 --> 0:08:31.640 to party and initiative discussion. Get this, he's got a 0:08:31.760 --> 0:08:35.760 PhD Statistics and decision sciences. Now the good news is 0:08:35.840 --> 0:08:38.880 from Duke. But who gets a pH d in statistics 0:08:38.920 --> 0:08:42.000 and decisions? I loved statistics. It was brutal. I mean 0:08:42.040 --> 0:08:45.040 I took one class and I quite enjoyed it. All right, 0:08:45.080 --> 0:08:48.640 good stup Omar, thanks so much for joining us here. Boy. 0:08:48.720 --> 0:08:52.000 I think about all of the SWAB clients all over 0:08:52.160 --> 0:08:55.240 this planet. Boy, I mean, what do you tell them 0:08:55.280 --> 0:08:58.760 after what was a brutal, brutal year in two, whether 0:08:58.760 --> 0:09:00.719 those equities or fit s income waity, what are you 0:09:00.720 --> 0:09:05.160 tell them about three? Well, you know, thanks for having me, 0:09:05.240 --> 0:09:07.920 and thanks for you know, talking about his statistics. That's 0:09:07.960 --> 0:09:11.400 definitely been uh, you know a big part of my life. Uh. 0:09:11.480 --> 0:09:13.599 And it's not as bad as you think once you 0:09:13.720 --> 0:09:16.480 get used and find the good thing on it on 0:09:16.559 --> 0:09:18.959 how you can actually use that to help people. But 0:09:19.200 --> 0:09:21.719 but you're right, you know, two was probably one of 0:09:21.760 --> 0:09:25.880 the most difficult years for all investors and particularly you know, 0:09:26.000 --> 0:09:29.000 when people look at their statements, even in the worst 0:09:29.080 --> 0:09:32.640 possible scenarios. You know, over the last you know, thirty years, 0:09:32.720 --> 0:09:36.880 when equity markets and risky assets on their perform, you know, 0:09:37.040 --> 0:09:39.640 everybody counted on the fact that they a you know, 0:09:39.720 --> 0:09:41.800 could have their bonds or their cash doing you know, 0:09:41.920 --> 0:09:44.719 most of the you know, saving and in in last year, 0:09:45.000 --> 0:09:47.640 there were only two asset classes that ended up having 0:09:47.840 --> 0:09:51.520 you know, positive returns, cash and commodities, and you know, 0:09:51.600 --> 0:09:54.640 outside of those two asset classes, the rest ended up 0:09:54.720 --> 0:09:57.559 you know, on their performing. So so clearly just from 0:09:57.600 --> 0:10:01.800 the perspective of of clients that had expectations of using 0:10:02.240 --> 0:10:05.240 you know, fixed income as a as a cushion or 0:10:05.360 --> 0:10:08.840 when when volatility inequities, you know, that obviously didn't work. 0:10:09.200 --> 0:10:11.400 So what we talk clients, you know, is that these 0:10:11.559 --> 0:10:13.839 you know, these tends will happen. This is very rare. 0:10:14.000 --> 0:10:16.199 There are very rare occasions with these happens, and it 0:10:16.320 --> 0:10:19.280 happens usually because we had something that we didn't expect. 0:10:19.320 --> 0:10:21.760 Actually would probably say two things that didn't expect. One 0:10:21.920 --> 0:10:24.360 is we're just coming out of COVID, and in fact, 0:10:24.440 --> 0:10:26.439 you know, we're still in the process of coming out 0:10:26.480 --> 0:10:29.760 of COVID. And second, we nobody expected to have a 0:10:29.840 --> 0:10:33.360 war that just you know, ignorite inflation pressures that made 0:10:33.440 --> 0:10:36.640 things really, really hard. Um So what we talk about 0:10:36.679 --> 0:10:39.679 now is what what happens from now on. And the 0:10:39.920 --> 0:10:42.959 good news is that there is more opportunities to invest 0:10:43.040 --> 0:10:45.880 in diversify now than what we had even you know, 0:10:46.040 --> 0:10:48.599 just you know, six to eight months ago. What do 0:10:48.720 --> 0:10:53.040 you what do you do at Schwab asset Management about 0:10:53.320 --> 0:10:57.640 the sort of newer or alternative asset classes that retail 0:10:57.679 --> 0:10:59.920 investors are just starting to dip their toes into. A 0:11:00.040 --> 0:11:03.920 mean e t f s are just gaining so much ground, 0:11:04.040 --> 0:11:06.480 I know, spies thirty, but it's still new ish as 0:11:06.520 --> 0:11:11.120 a rapper at least um uh Crypto has had a 0:11:11.240 --> 0:11:14.120 rough year obviously, but it's a new asset class that 0:11:14.200 --> 0:11:17.120 some people are interested in. And then hedge funds did 0:11:17.160 --> 0:11:19.439 well last year, private credit did well last year, but 0:11:19.559 --> 0:11:22.960 that's normally just set aside for sophisticated investors. So how 0:11:23.000 --> 0:11:27.400 do you deal with these things at Schwab? Well, great question, 0:11:27.520 --> 0:11:30.599 and yes, this happens all the time, and we we 0:11:30.800 --> 0:11:34.280 have had you know, significant amount of interest, you know, 0:11:34.480 --> 0:11:37.199 and and this you know happens in many cases. You know, 0:11:37.280 --> 0:11:40.840 you may recall not too long ago, the discussion about memestocks, 0:11:40.920 --> 0:11:43.520 and you know what, people can use that information to 0:11:43.640 --> 0:11:46.800 invest and you know how they can use several information 0:11:47.000 --> 0:11:49.200 is the good news is that you know, we attract 0:11:49.240 --> 0:11:53.560 a lot of investors to start in being interested in investing. 0:11:53.760 --> 0:11:57.520 I think our challenge and our goal and mission continues 0:11:57.559 --> 0:11:59.920 to be to educate clients on how to think about 0:12:00.080 --> 0:12:02.800 the long term and what to think about the way 0:12:02.880 --> 0:12:05.240 to invest from the basic level of what are the 0:12:05.320 --> 0:12:09.400 fundamentals of what you try to achieve financially an investment 0:12:09.480 --> 0:12:11.920 wise for each one of your goals. And what that 0:12:12.080 --> 0:12:14.800 means is that areas like you know, for example, you know, 0:12:15.200 --> 0:12:19.160 digital assets, any type of of of related information that 0:12:19.320 --> 0:12:21.360 is more supply and demand that there is little in 0:12:21.520 --> 0:12:25.319 terms of fundamental there's little in terms of history. You know, 0:12:25.480 --> 0:12:28.040 they tend to just be an option for clients to 0:12:28.120 --> 0:12:32.120 start getting their interest in investing, but not necessarily to 0:12:32.240 --> 0:12:35.360 form the core of their long term strategy. We tend 0:12:35.400 --> 0:12:38.040 to just you know, continue to educate clients to say, well, 0:12:38.240 --> 0:12:41.240 you know, the basic asset classes, the basic areas of 0:12:41.640 --> 0:12:44.520 investing for the long run as of today, you know, 0:12:44.640 --> 0:12:48.120 still consists on the basic cash fixed income equities, and 0:12:48.280 --> 0:12:50.839 yes there will be other alternatives that are based on 0:12:50.920 --> 0:12:54.920 fundamentals that could actually help in the diversification process. So, Mari, 0:12:55.920 --> 0:12:58.240 I just think it's just a huge, huge number of 0:12:58.360 --> 0:13:01.640 clients out there. Um, how do you attract new clients, 0:13:01.760 --> 0:13:04.880 younger clients. What's the schwab way to get some of 0:13:04.920 --> 0:13:07.719 these young folks to really think about investing for the 0:13:07.800 --> 0:13:11.520 long term. Yes, we we have done, you know, quite 0:13:11.559 --> 0:13:13.640 a bit of workfoll and this where you know, we 0:13:13.840 --> 0:13:16.880 we started at the early stages of working with with 0:13:17.440 --> 0:13:20.120 our current clients and let them know that it's actually 0:13:20.480 --> 0:13:24.079 you know, good for for for their own families to 0:13:24.240 --> 0:13:26.560 just get invested in the clients, you know, whether it's 0:13:26.920 --> 0:13:30.160 investing in slices of stuffs that they like on their 0:13:30.240 --> 0:13:33.559 own and create opportunities in areas that they can have 0:13:33.760 --> 0:13:36.600 like for example, investment teams and things where they can 0:13:36.640 --> 0:13:40.280 actually start putting you know, information for their own families, 0:13:40.320 --> 0:13:42.320 for their own kids, to just try to get early 0:13:42.400 --> 0:13:45.480 into the investment area and understand that it's it's something 0:13:45.600 --> 0:13:48.120 that they need to balance risk and returns and think 0:13:48.160 --> 0:13:50.920 about you know, holding and saving, and that's probably the 0:13:51.040 --> 0:13:54.439 key word, you know, continue to educate clients to save 0:13:54.880 --> 0:13:57.079 so that they can continue to form you know, a 0:13:57.240 --> 0:13:59.319 nest you know as they go. The other piece that 0:13:59.360 --> 0:14:01.360 we actually try to have is we're here to help, 0:14:01.640 --> 0:14:04.760 you know, trying to work with the financial advisor, trying 0:14:04.840 --> 0:14:07.280 to work with somebody that has you know, being in 0:14:07.360 --> 0:14:09.360 the business for a while then can guide them in 0:14:09.440 --> 0:14:11.600 what is the best way to use their resources. It's 0:14:11.640 --> 0:14:13.800 another big part. And the last thing we do is 0:14:14.160 --> 0:14:16.120 understand that we are humans. You know. We do a 0:14:16.240 --> 0:14:19.880 lot of work in decision sciences and behavioral aspects so 0:14:20.000 --> 0:14:22.920 that we can understand, you know, when people emotions get high, 0:14:23.280 --> 0:14:26.080 especially in these periods of high uncertainty, and therefore we 0:14:26.160 --> 0:14:28.640 try to educate people on what is what is sort 0:14:28.680 --> 0:14:31.280 of the utility function and the reaction function they can 0:14:31.440 --> 0:14:34.760 use in periods when things are not as clear. Omar, 0:14:34.840 --> 0:14:37.280 what are you expecting from the economy this year? We're 0:14:37.320 --> 0:14:42.760 getting some uh more bad news on the consumer, which 0:14:42.800 --> 0:14:46.240 seems to be that um he or she is still 0:14:46.320 --> 0:14:48.520 spending a ton, but a lot of it's going on 0:14:48.720 --> 0:14:54.920 credit cards and delinquencies are rising. Yes, Um, we expect 0:14:55.200 --> 0:14:59.600 a really bumpy ride. We expect the economy going in 0:14:59.680 --> 0:15:03.240 through uh really you know on certain times, you know, 0:15:03.400 --> 0:15:06.840 for the next three quarters, it's gonna be a roller coaster. 0:15:07.080 --> 0:15:09.160 I I can I can tell you that you know, 0:15:09.240 --> 0:15:13.080 we're still in these you know, very confusing set of 0:15:13.200 --> 0:15:15.320 level of indicators that we get every time that we 0:15:15.480 --> 0:15:17.840 need to get a new data point, you know, and 0:15:18.040 --> 0:15:21.160 of course you know, the whole discussion between you know, 0:15:21.280 --> 0:15:25.120 what will be the reaction from central banks and into 0:15:25.200 --> 0:15:28.080 their fight of inflation and how much of these inflation 0:15:28.280 --> 0:15:31.120 is as sticky as it looks like just the Prince 0:15:31.280 --> 0:15:33.960 this year with cp I p p I suggesting that, 0:15:34.160 --> 0:15:36.520 you know, the long road to get the two percent 0:15:36.640 --> 0:15:41.040 target for the FED is really gonna be long and bumpy. Um. 0:15:41.160 --> 0:15:43.400 You know, not too long ago people were talking about 0:15:43.480 --> 0:15:46.640 still the rate cuts because they thinking that the economy 0:15:46.720 --> 0:15:49.240 was going to recover quickly. Well, we are not even 0:15:49.320 --> 0:15:52.080 in a you know, talking about recession anymore. We're talking 0:15:52.120 --> 0:15:55.640 about a potentially and re engineering of the economy that 0:15:55.760 --> 0:15:58.160 may not even get into a landing. So so the 0:15:59.000 --> 0:16:01.280 strength and receiling of the economy, at least on the 0:16:01.400 --> 0:16:04.400 data that we have, suggest that it will take some 0:16:04.600 --> 0:16:08.960 more time for everything that the fettes manufacturing to actually 0:16:09.080 --> 0:16:11.440 play a role. And when that happens, then we can 0:16:11.480 --> 0:16:14.800 actually feel a little more you know stable for actually 0:16:14.920 --> 0:16:18.680 make you know, changes into our economic forecast. So putting that, uh, 0:16:19.000 --> 0:16:22.280 that motif altogether, that backdrop altogether, omar, what's in thirty 0:16:22.320 --> 0:16:25.120 seconds kind of what's your main communication point to your 0:16:25.160 --> 0:16:29.480 clients about well, Tina is no longer in existent, Paul, 0:16:29.640 --> 0:16:33.280 that there's a lot of opportunities for people to actually invest. 0:16:33.400 --> 0:16:37.320 I think some of your earlier commentary was that related. 0:16:37.360 --> 0:16:39.200 If you actually think that the short term of the 0:16:39.280 --> 0:16:42.280 curve today in fixed income, it's probably giving you as 0:16:42.400 --> 0:16:45.280 much you know, yield as you can get with earnings. 0:16:45.440 --> 0:16:48.040 And if you think about that, you know, the opportunity 0:16:48.120 --> 0:16:50.920 to just diversify between you know, the short term, the 0:16:51.000 --> 0:16:53.560 long term and equities is probably the best we have 0:16:53.680 --> 0:16:55.680 had in a while. So this is a good opportunity 0:16:55.760 --> 0:16:59.480 for people to you know, diversify their strategies between bonds 0:16:59.520 --> 0:17:01.760 and equally is that we probably haven't had for at 0:17:01.840 --> 0:17:05.320 least fiefteen years. All right, o'mark, I really appreciate you 0:17:05.400 --> 0:17:07.760 taking a time to check in with us Omar Aguilar. 0:17:07.880 --> 0:17:12.320 He's CEO and c i O of Schwab Asset Management, 0:17:12.720 --> 0:17:16.680 talking about diversification, talking about the longer term investment parameters 0:17:16.800 --> 0:17:19.440 that you know most investors you know, need to probably 0:17:19.480 --> 0:17:22.800 focus on. Um, we should have got his favorite professor 0:17:23.040 --> 0:17:25.560 from from Duke from Duke. Yeah, we'll do that next time. 0:17:25.640 --> 0:17:29.080 I mean these statistics and decision sciences. That sounds pretty 0:17:29.080 --> 0:17:31.240 heavy on the math. That sounds awesome to me. I 0:17:31.280 --> 0:17:32.840 don't know. I was told there wouldn't be any math 0:17:32.880 --> 0:17:35.159 theoris like game theory. I guess. I guess there's some 0:17:35.240 --> 0:17:38.159 smart people down there at Duke. So uh, good stuff. 0:17:40.760 --> 0:17:43.680 We had a story overnight that credit card debt for 0:17:43.920 --> 0:17:48.160 Americans has risen to almost a trillion dollars. I don't 0:17:48.160 --> 0:17:50.800 know if that means Americans are using credit cards more 0:17:51.760 --> 0:17:54.400 or that prices are higher. And there's a business I've 0:17:54.400 --> 0:17:56.800 been looking into for a few weeks now called Imprint, 0:17:57.440 --> 0:17:59.720 and as far as I can understand, what they do 0:18:00.359 --> 0:18:04.280 is to try and help other companies with credit card 0:18:04.359 --> 0:18:07.640 issuance with rewards programs and loyalty programs, that kind of thing. 0:18:08.040 --> 0:18:10.719 I've managed to get the CEO in here in our 0:18:10.760 --> 0:18:13.880 studio in New York City. Dara Murphy joins us. He's 0:18:13.920 --> 0:18:16.040 also the founder of the business. So great to have 0:18:16.160 --> 0:18:19.320 you here. Dara tell us, first of all, what Imprint 0:18:19.600 --> 0:18:24.080 does well, thanks for having me on. Imprint was started. 0:18:24.280 --> 0:18:26.200 It's about two and a half years ago, and the 0:18:26.280 --> 0:18:29.240 goal was to compete with banks that help America's great 0:18:29.280 --> 0:18:32.199 bronze launch credit cards. Co branded credit cards have been 0:18:32.200 --> 0:18:34.639 a thing for thirty years in the America. You can 0:18:34.720 --> 0:18:36.280 you get a great Delta card if you work with 0:18:36.320 --> 0:18:38.320 om X. But there's a lot of great bronze out 0:18:38.359 --> 0:18:40.960 there that the biggest banks, the bulge bracket banks, won't 0:18:40.960 --> 0:18:43.240 work with. And we saw an opportunity to go help 0:18:43.320 --> 0:18:46.080 those those great brodens, whether their hotel companies been a 0:18:46.119 --> 0:18:48.119 around for thirty years, grocery stores, or some of our 0:18:48.160 --> 0:18:50.840 clients that have been around for a hundred years. Our 0:18:50.880 --> 0:18:52.639 goal is to help them issue credit cards. And so 0:18:52.760 --> 0:18:54.520 what we do and we talk to them, is we 0:18:54.600 --> 0:18:56.600 give them a pitch that we're like a buying plus 0:18:56.640 --> 0:18:59.440 a technology company and you get everything from us that 0:18:59.480 --> 0:19:01.840 you would get from Barclays, for example, which is a 0:19:01.880 --> 0:19:04.480 big co branded credit card business. But in addition, you 0:19:04.640 --> 0:19:07.480 get an experience that a great brand can be proud of. 0:19:07.760 --> 0:19:10.400 So what what is um let's take the grocery store, 0:19:10.480 --> 0:19:13.800 for instance. What is the benefit to them? Is it? 0:19:14.000 --> 0:19:16.480 I guess loyalty? Right? If you have a brand and 0:19:16.520 --> 0:19:18.720 credit card, you must really like that business. But do 0:19:18.880 --> 0:19:22.040 consumers get a discount? Are they encouraged the shop? They're 0:19:22.119 --> 0:19:26.000 more often? Are there other programs? Does it work? It 0:19:26.040 --> 0:19:29.040 should be a virtuals cycle, right, so the brand should 0:19:29.080 --> 0:19:31.600 get a stickier customer that comes back more and more. 0:19:31.920 --> 0:19:34.640 You get this beautiful boost of incrementality when you put 0:19:34.680 --> 0:19:36.760 a credit card in the person's pocket. And the reason 0:19:36.840 --> 0:19:39.480 you get the incrementality is you give the person a 0:19:39.560 --> 0:19:42.120 reason to come back. So you give them some base rewards. 0:19:42.119 --> 0:19:44.639 Everybody knows that five at the brand, one and a 0:19:44.680 --> 0:19:46.520 half two percent everywhere else, so it's a reason to 0:19:46.640 --> 0:19:48.359 use the card all the time. And then you make 0:19:48.400 --> 0:19:51.439 them feel more special. Right. We're working with our grocery 0:19:51.480 --> 0:19:54.600 partner on express checkout lanes only for card holders. UM, 0:19:55.480 --> 0:19:58.000 we have that in our I just noticed that that's 0:19:58.000 --> 0:19:59.960 a good enough. That was just in the past couple 0:20:00.080 --> 0:20:03.639 months at the ACME in UH somewhere in New Jersey. 0:20:03.680 --> 0:20:05.359 I don't know the shop right by me. The lines 0:20:05.359 --> 0:20:07.879 are always so damn long. But I feel like I 0:20:07.880 --> 0:20:09.520 would definitely get a credit card if I could go 0:20:09.600 --> 0:20:13.680 to I mean, you open a company right at the 0:20:13.760 --> 0:20:17.480 beginning of a pandemic, but I would think, like, just 0:20:17.640 --> 0:20:20.920 for me personally, I use my cards much more frequently 0:20:21.080 --> 0:20:23.880 now than I ever did before. And I'm guessing that's 0:20:23.880 --> 0:20:26.120 a trend. How did how did? How have you seen 0:20:26.160 --> 0:20:27.880 the business kind of involved over the past few years. 0:20:28.320 --> 0:20:30.280 We've just been fortunate over the last few years that 0:20:30.800 --> 0:20:33.120 customers are coming back to commerce. They're going back into 0:20:33.160 --> 0:20:35.880 the real world. On brands that we work with, which 0:20:35.920 --> 0:20:39.040 we call America's great brands, really want to away to 0:20:39.080 --> 0:20:41.639 lock in their customers. All brands that have been around 0:20:41.720 --> 0:20:44.680 for over thirty years, they're under threat from the e 0:20:44.760 --> 0:20:47.960 commerce giants, whether that's Instant Cart or door Dash or Amazon, 0:20:48.359 --> 0:20:50.440 who have a trove of data. You think about Uber, 0:20:50.480 --> 0:20:52.600 you open the Uber app. Before you open the Uber app, 0:20:52.640 --> 0:20:54.560 it knows whether you're going to order food or whether 0:20:54.600 --> 0:20:57.360 you're going to order an Uber and all of these 0:20:57.720 --> 0:21:00.240 UH incumbents are in trouble because they don't have access 0:21:00.280 --> 0:21:01.920 to that data. Well, credit cards are a great way 0:21:01.920 --> 0:21:03.840 to bothe get your customers to spend more and become 0:21:03.880 --> 0:21:05.840 more loyal, but also get to know more about your 0:21:05.840 --> 0:21:08.119 customers and give them reasons to come back. And so 0:21:08.480 --> 0:21:10.640 when we started the company, we've been riding this wave 0:21:10.720 --> 0:21:13.040 of all of these great brands that people have tons 0:21:13.119 --> 0:21:15.879 of affinity for, love the actual experience and go to 0:21:15.960 --> 0:21:18.639 the hotel or going into the grocery store and giving 0:21:18.680 --> 0:21:21.120 them the power to lock in their customer better, giving 0:21:21.160 --> 0:21:23.440 that customer a better deal. And so, as we talked about, 0:21:23.520 --> 0:21:27.040 it should be this um self propelling circle of you 0:21:27.119 --> 0:21:28.680