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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube. Visit the

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Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

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Speaker 2: mornings from seven to ten am Eastern from our global

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Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg.

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Speaker 3: Terminal, and the Bloomberg Business App.

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Speaker 2: This is an important conversation and perfect to start the

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Speaker 2: second quarter. David Sowerby is out in Detroit with Encora.

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Speaker 2: We're thrilled to join us today and looking really at

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Speaker 2: mid cap, small cap and now on lovely are David,

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Speaker 2: I think this is something everybody, including me, has wrong. Okay,

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Speaker 2: I didn't buy Nvidia, Sweeney owns it. I didn't buy

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Speaker 2: the other magnificent for whatever. But the answer is large

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Speaker 2: cap over the last decades up twelve thirteen percent a year.

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Speaker 2: MidCap is terrible, lagging way behind Beloney. It's up eleven

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Speaker 2: percent per year the Vanguard MidCap fun Why are midcaps

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Speaker 2: so on, love David sowerby.

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Speaker 4: Tom I think it's because they sit a little bit

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Speaker 4: in no man's land. You have small cap stocks that

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Speaker 4: are trying to graduate to MidCap, large cap stocks that

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Speaker 4: sometimes are on their way to mid cap. And if

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Speaker 4: you think about as you position portfolios, the small cap

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Speaker 4: manager is going to own names and continue to have

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Speaker 4: conviction at migrate up. Large cap managers are going to

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Speaker 4: migrate down in cap, and sometimes that exclusive MidCap manager

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Speaker 4: gets forgotten. That's why I like something like smid small

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Speaker 4: and mid combined small and midcom.

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Speaker 5: I think about kelen Nova. I don't know where you

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Speaker 5: put that. I mean, that's a twenty billion dollar market cap. Yeah,

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Speaker 5: I have to spun off from Kellogg's because cheese It's Tom's,

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Speaker 5: and we like cheese. Its here at seven we do,

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Speaker 5: like Jesus, yes we do.

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Speaker 2: That's the official food of Bloomberg Surveillance exactly.

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Speaker 5: So David talked to us about a company like kelen Nova.

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Speaker 4: Sure don't don't forget pop Tarts and pringles of course, Well,

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Speaker 4: of course they're growing internationally, Bottle creep and in both

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Speaker 4: cases yes, and and Kellogg, the old Cereal play is

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Speaker 4: having a good run as well. If you look at

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Speaker 4: the Bloomberg Spinoff Index, it's up twenty five percent year

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Speaker 4: to date. Over the long term, one of the best,

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Speaker 4: if not the absolute best formula for unlocking value in

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Speaker 4: that small MidCap area is to buy the spinoffs. And

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Speaker 4: they're back on their on their treadmill again in twenty

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Speaker 4: twenty four. And that's why I think the ability for

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Speaker 4: a small MidCap manager to outperform their benchmark is going

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Speaker 4: to come buying spinoff stocks like Kelenopa, like Era Mark,

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Speaker 4: which spun off it's its uniform business and now it's

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Speaker 4: just food at sports venues, universities, hospitals. I like spinoffs.

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Speaker 2: In our great final four appearances, it looks great. Bloomberg

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Speaker 2: Spinoff Index, Paul Sweeny bn SPI N b N SPI

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Speaker 2: N is the index. It's on the Bloomberg terminal in

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Speaker 2: your car and next to your YouTube remote control.

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Speaker 5: Exactly right, all right, David, So we step back and

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Speaker 5: we think about this market here. The first quarter was

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Speaker 5: just such an extraordinary performance and really coming off those

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Speaker 5: October lows, you know, up over twenty five percent for

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Speaker 5: the s and P five hundred. Do you get concerned

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Speaker 5: that this market might be overextended here a little bit,

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Speaker 5: not so much.

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Speaker 4: Over extended, but maybe that pause that refreshes. And even

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Speaker 4: though the market had that ten percent gain in the

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Speaker 4: first quarter, the median S and P five hundred stock

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Speaker 4: the median was up about seven percent, So I think

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Speaker 4: there's more room to go. You're able to find companies

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Speaker 4: that are generating favorable free cash flow margins, growing the

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Speaker 4: dividend that close to a double digit pace, and I

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Speaker 4: think there's more room to go. Recognizing that, ever elusive,

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Speaker 4: we will get that ten percent correction.

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Speaker 3: You just got.

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Speaker 4: To fight and grind through it because taking too much

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Speaker 4: evasive action trying to predict it.

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Speaker 5: Feudal Crane ce xt currency printing presses.

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Speaker 3: I'd been to their factors was a rite of passage.

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Speaker 2: You went to Crane stationary and et you were bored.

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Speaker 2: If you fell over, you'd fall into a vat and

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Speaker 2: die exactly.

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Speaker 5: So, I mean, I haven't thought of Crane seext in

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Speaker 5: a long time. Talk to us about that story.

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Speaker 4: Well, it's a spinoff from Crane, the industrial company that

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Speaker 4: has one hundred year history. So what we're seeing is

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Speaker 4: not just currency demand in the US, as the FED

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Speaker 4: was on this twenty five to money supply growth rate,

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Speaker 4: but we're seeing it internationally and there and there's more

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Speaker 4: concern about fraud, so that plays into their ability to

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Speaker 4: print currency and avoid fraud. And that's a global story,

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Speaker 4: and it's a spinoff story as well.

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Speaker 3: Yeah.

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Speaker 2: I look at this, David, and it's a great bullmarket,

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Speaker 2: and I'm going to take it off the what I

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Speaker 2: call the kompor yard Denny Low of October two ago.

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Speaker 2: What happens in a second leg of a bull market?

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Speaker 2: I mean, you know, you're a trustee of some serious money.

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Speaker 2: What's our behavior we should expect in this second leg

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Speaker 2: of a bullmarket?

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Speaker 4: I think it's it's still that the micro is going

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Speaker 4: to trump the ever concerns over the world is a

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Speaker 4: more dangerous place macro uncertainty. Companies are going to grow

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Speaker 4: their free cash at about fifteen percent in twenty twenty four.

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Speaker 4: Valuations today for US stocks large cap and small cap,

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Speaker 4: I think bode over the next three to five years

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Speaker 4: to compound at a seven to eight percent price gain

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Speaker 4: and in the dividend, and it's hard to beat that

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Speaker 4: anywhere outside the US. So I think continuing to migrate

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Speaker 4: into US stocks and for those small cap stocks, maybe

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Speaker 4: a little less money into private equity given the leverage

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Speaker 4: and deploying that in small cap makes sense too.

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Speaker 2: David, thank you. A great way to start the second quarter.

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Speaker 2: He is mister Sarby. David Sarby. He's a huge fan

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Speaker 2: of the undefeated Detroit Typers. The closest ball Sween and

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Speaker 2: I got to five beta Kap was a cliff notes.

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Speaker 3: Greek remember Greek one on one in the school.

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Speaker 2: It was like a one week course. Then you took

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Speaker 2: Latin one on one and that was it. That was

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Speaker 2: just because five Beta Cap was a great sorority. She's

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Speaker 2: the real deal. Lori Calvissina, for years of credits we

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Speaker 2: sent unto RBC, has delivered intelligence on something nobody wants

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Speaker 2: to talk about, which is small cabs. Paul, you guys

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Speaker 2: can explain this. Small cabs like every ten years they're

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Speaker 2: in right and then they go on hiatus. Yeah, she's

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Speaker 2: the smartest in the block.

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Speaker 6: There's no other way to put it exactly.

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Speaker 5: Lri Cavalsina joins us here in our Bloomberg Interactive Broker studio.

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Speaker 5: She does a mill it in Lori Cavalsina is the

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Speaker 5: head of US equity strategy for RBC Capital Markets. LOURI

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Speaker 5: were up twenty five percent since those October lows. I mean,

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Speaker 5: what's going on out there? I don't see earnings, you know,

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Speaker 5: rising twenty five percent in terms.

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Speaker 7: Of looking at the small caps specifically.

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Speaker 5: Yeah, I mean it's just amazing.

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Speaker 7: So look, I think there are a couple of things.

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Speaker 7: I think the big move in November December they were

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Speaker 7: over sold. You saw it on valuation data. You were

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Speaker 7: close to sort of recession type lows on forward pees

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Speaker 7: in the space, and positioning data wasn't at all time lows.

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Speaker 7: But back in twenty twenty two you had been down

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Speaker 7: around recession type lows. So they were starting to climb

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Speaker 7: out of the hole. I think when people were ready

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Speaker 7: to put on the FED rate cut playbooks, that's what

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Speaker 7: sort of sparked the November December rotation. You evaporated those

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Speaker 7: oversold conditions. I think where they sit today, they're due

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Speaker 7: for a bit of a catch up trades. You've got

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Speaker 7: average valuations three year high, but not all time high.

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Speaker 7: On positioning. There's been some debate right about what the

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Speaker 7: Fed's going to do and when they're going to cut

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Speaker 7: and if they're going to cut, but it seems like

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Speaker 7: we're still leaning in favor of that right now in

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Speaker 7: the market consensus, So I think that's causing people to

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Speaker 7: look at them again. And there's been some stealth stabilization

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Speaker 7: there right now, as many people are talking about it lately.

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Speaker 7: The thing that's happening now right is that economic expectations

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Speaker 7: are being revised up in a hurry. So you got

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Speaker 7: the rate cutpeede and piece in place, You've got the

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Speaker 7: cyclicality starting to develop. And if we get allows the

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Speaker 7: unemployment rate, I don't really care because small caps tend

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Speaker 7: to outperform around the same time the unemployment rate starts

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Speaker 7: to move out.

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Speaker 2: Now, I just looked at a small cap called draft Kings.

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Speaker 2: They took all my money on my final one.

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Speaker 3: It's my final one and right doing that.

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Speaker 2: But most small caps don't have thirty five people following

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Speaker 2: them like the popular DraftKings. Is your world removed from

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Speaker 2: the financial world because so few people follow small caps,

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Speaker 2: so there.

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Speaker 7: Are fewer people. I mean, frankly, you know, just over

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Speaker 7: start doing small cap in two thousand and seven, and

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Speaker 7: I would I can't even calculate how long I've been

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Speaker 7: doing it, but I think I did notice as ZSG

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Speaker 7: really took off. I saw a lot of my small

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Speaker 7: cap portfolio managers repurposed as ESG investors, you know, kind

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Speaker 7: of move from an area that was struggling a little

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Speaker 7: bit to a hotter part of the market. So there's

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Speaker 7: a been a big etfhysation of the small cap world.

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Speaker 7: And you know, in terms of the au WIM that's there.

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Speaker 7: But the active managers, you know, they're still out there

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Speaker 7: doing good work. They really try to be out of consensus.

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Speaker 7: They try to find hidden gems and I think, you know,

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Speaker 7: there are some benchmark issues that make it kind of tough, right,

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Speaker 7: But in general, you know, I think a lot of

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Speaker 7: the small cap pms I see, you know, they are

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Speaker 7: talked to. They just feel a lot of opportunity out

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Speaker 7: there because frankly, there are fewer eyeballs on.

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Speaker 5: The space you mentioned ESG. How does that figure into

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Speaker 5: kind of your work in general? How does RBC think

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Speaker 5: about Yeah, you.

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Speaker 7: Know, I had a phenomenal associate. Her name was Sarah Mahaffey,

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Speaker 7: and we spun her out I think in twenty twenty,

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Speaker 7: twenty twenty one to be our ESG strategist. Okay, So

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Speaker 7: to be honest, we've just really it became such a

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Speaker 7: big thing it didn't make sense as part of my

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Speaker 7: product really, and she was just doing a phenomenal job

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Speaker 7: with it. So I really do feel like it's kind

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Speaker 7: of its own world, the same way Small Cap was

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Speaker 7: its own world for me back in two thousand and

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Speaker 7: seven or so. It comes up less in my conversations

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Speaker 7: for general equity strategy. I think people who are going

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Speaker 7: to incorporate it into their process have done it, and

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Speaker 7: they've got their system set up and they go talk

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Speaker 7: to Sarah because she's still the real, you know, sort

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Speaker 7: of expert on it. But that's very different from maybe

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Speaker 7: say five years ago, when everyone was trying to get

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Speaker 7: smart on it.

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Speaker 6: In the US.

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Speaker 5: Right, it seems like maybe in the US it's it's

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Speaker 5: kind of waned a little bit, whereas I know in

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Speaker 5: Europe it's still the place to be. Where do you

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Speaker 5: see opportunities here? I'm not sure if it's mark a cap,

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Speaker 5: it's if it's factor, if it's sector, where are you

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Speaker 5: seeing opportunities right here? Because a lot of folks are saying, poay,

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Speaker 5: this market's moves pretty aggressively.

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Speaker 7: You know, Look, I make sector calls, I don't talk

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Speaker 7: about them quite as much in my meetings the last

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Speaker 7: few months. You know, we've been talking a bit about

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Speaker 7: energy utilities recently. But the reality is it's mag seven

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Speaker 7: versus everything else. And everything else can include small caps, financials, energy, healthcare.

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Speaker 7: There's a lot of stuff that looks really interesting out

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Speaker 7: there in your meetings.

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Speaker 2: And you're a worker bee and you're in all sorts

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Speaker 2: of meetings where I'm sure people are saying, look, I

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Speaker 2: miss this. I missed last October, I missed two octobers ago.

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Speaker 2: Forget about nvidiing all that, LORI kelvisina. How do I

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Speaker 2: catch up? How do I enter the market? You're not

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Speaker 2: going to give me dollar cost averaging right right?

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Speaker 7: And look what I'm telling people is, let's start on

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Speaker 7: why we missed it. What I think essentially happened in

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Speaker 7: twenty twenty two is we had something really really close

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Speaker 7: to a recession two negative GDP quarters any valuation metric

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Speaker 7: and small cap or just general sentiment barometer. I can

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Speaker 7: look at to recession type.

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Speaker 3: Without without the stimulus.

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Speaker 7: I think everybody's right, And you know, why did people

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Speaker 7: feel so bad?

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Speaker 4: Right?

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Speaker 7: You look at the Michigan's Consumer Sentiment index, it went

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Speaker 7: down to recession type loos or worse than a recession

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Speaker 7: as inflation spike. So the misery index did what it

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Speaker 7: does typically in a recession, but it did it because

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Speaker 7: of inflation spiking, not unemployment spiking. So I think you

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Speaker 7: have to look at recovery traits. Small caps are part

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Speaker 7: of that, cyclicals are part of that. Financials are part

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Speaker 7: of that is kind of the plumbing of the economy,

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Speaker 7: and you look for things that have these recovery aspects

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Speaker 7: that still have some good valuations in them.

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Speaker 5: How about energy. I got wt CUD oil.

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Speaker 2: I look this week and it's amazing how x on

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Speaker 2: is behind.

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Speaker 5: Yes, I filled up the ride this weekend. Then there's

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Speaker 5: a sure three dollars and twenty cents a gallen. What's

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Speaker 5: going on with energy?

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Speaker 7: So look, energy is a cheap sector. Despite the move,

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Speaker 7: it still looks cheap, both large cap and small cap.

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Speaker 7: If the oil prices continue to be strong, then we'll

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Speaker 7: see the earnings revisions come. They haven't really yet, But

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Speaker 7: I think this sector is one in inflation edge, and

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Speaker 7: two I also think that it's just a different sector

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Speaker 7: than five ten years ago, the ESG concerns have kind

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Speaker 7: of fallen by the wayside. The dividend yield is the

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Speaker 7: highest of any S and P sector, and it's also

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Speaker 7: very very high relative to history. So in an S

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Speaker 7: and P five hundred world where very few companies offer

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Speaker 7: a dividend yield and access and the ten year treasury,

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Speaker 7: you can find a lot of that and energy if

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Speaker 7: you're an income seeking in.

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Speaker 2: My theme quickly, my theme two years ago was a

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Speaker 2: roll up, the great zombie roll up, and it can

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Speaker 2: be zombies or frankly, can be quality companies. Is that's

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Speaker 2: what's coming this year, as we're going to see a

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Speaker 2: roll up a small cap in a mid, mid into large.

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Speaker 7: I don't know if you're you know, I've had some

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Speaker 7: questions on M and A and if it's coming back.

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Speaker 5: You know.

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Speaker 7: One PM I talked to recently was talking about how

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Speaker 7: the and the small k PM's all right, look at

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Speaker 7: their portfolios end of the year. How many takeouts did

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Speaker 7: I have? But one guy tell me it was as

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Speaker 7: low as he's seen it in the history of his career,

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Speaker 7: and so he's sort of wondering if it's coming back.

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Speaker 7: The only thing that gives me a little bit pause

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Speaker 7: in saying that it is is that I do think

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Speaker 7: one of the things that pushes M and A is

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Speaker 7: the idea that economic growth is lacking and economic growth

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Speaker 7: forecasts are picking up in a hurry. So I'm not

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Speaker 7: saying he's wrong, but I don't know that the need

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Speaker 7: to go out and buy growth is all that strong.

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Speaker 3: Lori Kelvistine to thank you.

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Speaker 2: Soone's terrific brief back to back David Sawerby and Lori Kelvisina,

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Speaker 2: inspired by the surveillance scenes inspired.

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Speaker 5: I mean, it's a nut back there. And that's somebody

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Speaker 5: who's this weekend.

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Speaker 2: Ian Bremer's smartest guy in the block. He stole from

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Speaker 2: Bloomberg News. Emery Pakar who joins us now, who was

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Speaker 2: definitive in corporate finance, and you know the crash and

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Speaker 2: all that seven eight oh nine, and now is on

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Speaker 2: the Turkey Watch for Eurasia Group and we're thrilled at

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Speaker 2: memory in short notice could join us this morning. The

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Speaker 2: shock of this election emirate and I look at Airdawan

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Speaker 2: saying this is my roots. I was the mayor. Istanbul

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Speaker 2: is my heart. But he's lost. Istanbul. What does it

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Speaker 2: signal for someone? Twenty two years on the watch.

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Speaker 8: Yeah, thanks for having me on, Tom, great to be

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Speaker 8: on show. So I think it says two things. The

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Speaker 8: first and groundshaking one is that add On and the

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Speaker 8: AKP's dominance of Turkish politics is over. As you will

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Speaker 8: well know that people used to call the teflon ardon right.

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Speaker 8: Nothing bad stuck to him ever, including very bad economic circumstances.

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Speaker 8: But going forward to add On and the AKP will

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Speaker 8: have to fight two cent nail for every vote that

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Speaker 8: are down to thirty five percent now, which is roughly

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Speaker 8: where they started when they first found the party in

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Speaker 8: two thousand and one. The second point that I'd like

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Speaker 8: to highlight is that despite more than a decade of

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Speaker 8: political polarization, values, social issues, etc. At the end of

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Speaker 8: the day, people are still voting with their pockets. And

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Speaker 8: this was Turkey's version of it's the economy stupid.

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Speaker 2: What does he do with his new central bank team,

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Speaker 2: with his i'll call a chance of the exchequer? What

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Speaker 2: does he do to stop Paul what did you say,

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Speaker 2: eighty percent inflation?

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Speaker 3: Something like that? Yeah, what does to do Emory to

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Speaker 3: turn the.

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Speaker 2: Ship around other than a lira devaluation?

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Speaker 8: I think it sticks to the game plan in the

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Speaker 8: short term. Right Treasury and Finance Minister man At Shimshek

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Speaker 8: has been administrating the bitter pill in slow but increasingly

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Speaker 8: harsher doses since June of last year when he came

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Speaker 8: back to government took over the reins's economiz are. The

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Speaker 8: Central Bank is working in very close coordination with Shimshek.

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Speaker 8: We don't anticipate that to change, especially in the short term.

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Speaker 8: Ardon's comments last night also suggests that he's wedded to

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Speaker 8: this economic policy rebalancing normalization effort, but he will want

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Speaker 8: to see results. So if a don't had done better yesterday,

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Speaker 8: Shimshek would have a much greater maneuvering room now. Adam

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Speaker 8: will want to see results from summer onwards, once we've

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Speaker 8: hit peak inflation and swaited around seventy five percent in May.

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Speaker 8: If Shimshik doesn't deliver, then I think we're in a

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Speaker 8: bit of a tight spot from fall onwards. And in

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Speaker 8: terms of what he will do, we spain him to

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Speaker 8: continue quashing consumer demands, so it's very bad for the

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Speaker 8: households and then selective lending to export oriented businesses, but

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Speaker 8: a lot of SMEs are going to be hurting from.

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Speaker 5: This, so right, just give us a little history lesson here.

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Speaker 5: How do we get to this point with the Turkish economy.

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Speaker 8: Let's see twenty eleven. Aard on Secure's re election as

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Speaker 8: Prime Minister calls it my master period and starts banging

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Speaker 8: on about the interest rate lobby and says high rates

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Speaker 8: cause high inflation. I want low rates. A succession of

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Speaker 8: central bank governors play magical realism, create these interest rate corridors,

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Speaker 8: do backdoor tightening while loosening at the front the banking

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Speaker 8: authority undermines what they're doing. Fiscal and monetary policy don't

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Speaker 8: speak to each other, and in the end Adam puts

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Speaker 8: all the burden on very loose credit to keep consumer

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Speaker 8: demanded going. You have that, especially on the back of

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Speaker 8: the global financial crisis and the period that followed with

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Speaker 8: all the qunitive easing, extra lease monte policies, negative real rates.

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Speaker 8: He got away with it for years and years and

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Speaker 8: years until he couldn't and it really accelerated under the

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Speaker 8: first executive presidency terms starting in twenty eighteen, when he

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Speaker 8: got rid of all the capable policymakers in his cabinet,

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Speaker 8: appointed his son in law to run the economy who

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Speaker 8: proceed to sell more than one hundred and twenty five

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Speaker 8: billion dollars in reserves to keep the currency stable. And

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Speaker 8: that's where we.

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Speaker 3: Ended up camera.

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Speaker 5: That's a lot.

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Speaker 2: Yeah, in the time we got left and there's any

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Speaker 2: ways to go here. But let me call us at

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Speaker 2: around the US response. I don't want to do a

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Speaker 2: clinic now. And how smart I am on Turkey, I'm not,

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Speaker 2: but I look at someone like you, and that would

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Speaker 2: be Sonar Kagopte in his wonderful book Erdowan's Empire was

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Speaker 2: my book of the summer X years ago and his

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Speaker 2: new book is Assaultant in Autumn is erediwan in his

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Speaker 2: Autumn Facing Winter or it's seventy years old.

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Speaker 3: He just keep going.

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Speaker 8: I think you will find it increasingly difficult to keep going.

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Speaker 8: Folks that I talked to in Anka and also in

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Speaker 8: Istanbul who are close to the president always say that

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Speaker 8: add On is no different than any other successful, strong

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Speaker 8: Turkish leader. He will be at it until the very end.

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Speaker 8: So I don't anticipate add On to willfully step down

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Speaker 8: from any powers of positions of power. That said, yes

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Speaker 8: Day's election results, the makeup of parliament currently, the economic

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Speaker 8: challenges these are the worst circumstances he's ever faced since

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Speaker 8: coming to power two decades ago. So I'd absolutely agree

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Speaker 8: with Sona's take that this is add On's autumn. Maybe

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Speaker 8: we're still in the September mid September face, so there's

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Speaker 8: a way to go, but it's not going to be

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Speaker 8: easy for it.

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Speaker 2: How should mister Biden in any future administrations respond to

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Speaker 2: our NATO allies.

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Speaker 8: New vote business as usual? I think what the Biden

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Speaker 8: administration has succeeded in doing is very important, which is

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Speaker 8: reinstitutionalize relationships with Turkey. I anticipate that to continue because

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Speaker 8: Aardon also needs stability on the foreign policy front to

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Speaker 8: continue his balancing act between NATO Allies, Russia and the

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Speaker 8: Ukraine War in the Middle East, given the Israel Hamas War,

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Speaker 8: and in all of these things, having good relationships with

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Speaker 8: the US help. So I think Biden and add On

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Speaker 8: will continue to work in a transaction but constructive manner,

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Speaker 8: and add On will want to keep that up after

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Speaker 8: the November elections in the US, as might.

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Speaker 2: Pacar with e Raisia, Groupean Bremers. Thank you so much

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Speaker 2: for that brief. Lisa Mattel here with a truncated newspaper.

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Speaker 3: How do you follow?

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Speaker 6: He is still spinning.

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Speaker 1: I can't even all right, we're talking about home ownership.

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Speaker 1: How much it will take you in salary to be

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Speaker 1: able to afford regular home.

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Speaker 6: Okay, so this is from Banker. It's a new study.

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Speaker 1: It says you would need a six figure salary. So

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Speaker 1: that's nearly a fifty percent increase just the last few years.

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Speaker 1: Here's the specifics, just to give you an idea. So

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Speaker 1: to afford a media price home, let's say nearly four

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Speaker 1: hundred and three thousand dollars, Americans need to make an

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Speaker 1: annual income of just over one hundred.

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Speaker 6: And ten thousand dollars.

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Speaker 8: It's global.

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Speaker 2: In Paris, the topic, well, why people they are talking

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Speaker 2: about a housing.

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Speaker 5: We're not our population is not exploiting. Why are we

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Speaker 5: just building more houses? I don't get this whole thing.

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Speaker 6: Yeah, yeah, that's that's that is the talent of face.

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Speaker 6: I cannot be.

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Speaker 5: We got a lot of land in this country just built.

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Speaker 6: I'm gonna get them. Okay, Oh gosh, all right. This

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Speaker 6: is for the kids.

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Speaker 1: So if you have kids who are on Snapchat, there's

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Speaker 1: a paid feature. Apparently it's called Snapchat Plus. It'll cost

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Speaker 1: about four dollars a month extra. But here's here's what

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Speaker 1: it's doing. It's getting kids anxiety because it lets them

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Speaker 1: see their position in their friends digital orbits. So, for example,

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00:22:45,359 --> 00:22:48,480
Speaker 1: it lets you know how much your friends are communicating

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00:22:48,480 --> 00:22:49,720
Speaker 1: with you, and it puts it into like.

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00:22:49,680 --> 00:22:51,440
Speaker 6: This solar system metaphor.

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00:22:51,600 --> 00:22:54,399
Speaker 1: So if you're a mercury, that's good because that's the

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00:22:54,400 --> 00:22:55,800
Speaker 1: planet closest to your friend.

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00:22:55,840 --> 00:22:57,760
Speaker 6: So you see it. It does these little metaphors.

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00:22:58,040 --> 00:23:00,720
Speaker 1: It can be shut off, but it you know, it's

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00:23:00,720 --> 00:23:03,000
Speaker 1: on by default. So these kids are getting, you know,

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00:23:03,080 --> 00:23:08,359
Speaker 1: into fights, these BFFs, boyfriends, girlfriends. Everyone's arguing because they're

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00:23:08,400 --> 00:23:09,240
Speaker 1: not at the top.

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00:23:09,080 --> 00:23:09,600
Speaker 6: Of the list.

447
00:23:10,840 --> 00:23:12,280
Speaker 3: This has nothing to do with the news.

448
00:23:12,280 --> 00:23:14,399
Speaker 2: This is the Mateo household.

449
00:23:15,800 --> 00:23:16,159
Speaker 3: About you.

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00:23:16,359 --> 00:23:18,400
Speaker 6: Well, I won't pay the four dollars extra for my daughter.

451
00:23:18,440 --> 00:23:20,080
Speaker 6: You can't, I'll tell you that much.

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00:23:20,560 --> 00:23:23,200
Speaker 1: This is another teen thing, Brandy Melville. So we talked

453
00:23:23,200 --> 00:23:26,720
Speaker 1: about this before. It's run by this secretive Italian family. Okay,

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00:23:26,760 --> 00:23:29,720
Speaker 1: so it's one size fits all. I went to the

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00:23:29,720 --> 00:23:32,040
Speaker 1: store with my daughter and I'm looking at the shirt saying,

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00:23:32,600 --> 00:23:35,360
Speaker 1: how is everybody going to fit into this tiny little thing?

457
00:23:35,359 --> 00:23:37,120
Speaker 1: I don't understand how it's one size of it all,

458
00:23:37,359 --> 00:23:39,159
Speaker 1: but that's the whole controversy behind it.

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00:23:39,200 --> 00:23:40,640
Speaker 6: A lot of people are saying it's made.

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00:23:40,480 --> 00:23:43,639
Speaker 1: For skinny mostly blonde girls are filling its social media

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00:23:43,680 --> 00:23:47,120
Speaker 1: feed and staffing its stores too, So that's kind of

462
00:23:47,160 --> 00:23:48,960
Speaker 1: the controversy behind this hole.

463
00:23:49,040 --> 00:23:49,879
Speaker 3: It's Italian.

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00:23:51,000 --> 00:23:53,399
Speaker 6: I just assumed secretive Italian fanily.

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00:23:53,400 --> 00:23:55,000
Speaker 3: I just assumed it was American.

466
00:23:55,080 --> 00:23:57,560
Speaker 2: And I'm walking down the street in Florence and there's

467
00:23:57,600 --> 00:23:59,600
Speaker 2: a line out the door like it's the best pizza

468
00:23:59,600 --> 00:24:02,399
Speaker 2: in town kind of thing. No, it's a line of

469
00:24:02,560 --> 00:24:06,520
Speaker 2: ugly Americans lined up to buy one size fits all

470
00:24:07,080 --> 00:24:08,400
Speaker 2: hit Brandy Melville.

471
00:24:08,480 --> 00:24:09,720
Speaker 3: Does anybody copy in this?

472
00:24:10,240 --> 00:24:10,720
Speaker 6: Yeah?

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00:24:11,200 --> 00:24:13,560
Speaker 1: Well, you know what it is they're going against because

474
00:24:13,600 --> 00:24:17,520
Speaker 1: all these fashion brands are leaning into inclusivity. You know,

475
00:24:17,560 --> 00:24:20,840
Speaker 1: they're adding bigger sizes and more plus size and racially

476
00:24:20,840 --> 00:24:23,640
Speaker 1: diverse models. Brandy Bell Mills, they're not doing it.

477
00:24:23,760 --> 00:24:24,520
Speaker 6: So I don't know.

478
00:24:24,640 --> 00:24:27,240
Speaker 1: Forty one of its fifty stores are in the US.

479
00:24:27,320 --> 00:24:30,080
Speaker 6: Actually, yes, so okay, one more.

480
00:24:30,040 --> 00:24:33,320
Speaker 1: All right, one more so if you're tired of getting

481
00:24:33,359 --> 00:24:36,479
Speaker 1: that ping or email or phone calls from your boss

482
00:24:36,480 --> 00:24:41,200
Speaker 1: and off work hours, Okay, there is a new legislation.

483
00:24:41,680 --> 00:24:44,760
Speaker 1: It's from a San Francisco lawmaker trying to be the

484
00:24:44,800 --> 00:24:46,960
Speaker 1: first and that stay in the country to give employees

485
00:24:46,960 --> 00:24:49,760
Speaker 1: the right to be able to ignore it, to hit

486
00:24:49,800 --> 00:24:52,480
Speaker 1: the ignore button, except if it's an emergency or if

487
00:24:52,520 --> 00:24:54,640
Speaker 1: there's a scheduling change issue because of it.

488
00:24:54,880 --> 00:24:57,359
Speaker 6: But this is a democratic assembly of a Matt Haney.

489
00:24:57,440 --> 00:25:01,160
Speaker 1: He's trying to do this to allow employees to kind

490
00:25:01,160 --> 00:25:04,639
Speaker 1: of ignore those He got the idea from Australia actually

491
00:25:04,640 --> 00:25:06,879
Speaker 1: has a right to disconnect. The law that's going to

492
00:25:06,880 --> 00:25:10,159
Speaker 1: be implemented later this year, but it originated in France.

493
00:25:10,200 --> 00:25:16,480
Speaker 1: This whole idea, Okay, it's spread to different forms from Canada, Italy, Belgium, Philippines.

494
00:25:16,520 --> 00:25:17,639
Speaker 6: They're doing this as well.

495
00:25:17,920 --> 00:25:20,959
Speaker 1: New York City tried it in twenty eighteen. Didn't adopt

496
00:25:21,040 --> 00:25:23,840
Speaker 1: it though, but there's a couple restrictions behind it. But

497
00:25:23,840 --> 00:25:25,919
Speaker 1: they're trying to give employees that right to say, you

498
00:25:25,920 --> 00:25:27,119
Speaker 1: know what, don't bother me.

499
00:25:27,160 --> 00:25:28,479
Speaker 6: It's the weekend off hours.

500
00:25:28,680 --> 00:25:30,960
Speaker 2: Well when I see when I see on my phone

501
00:25:31,119 --> 00:25:33,040
Speaker 2: somebody has notifications shut.

502
00:25:32,920 --> 00:25:34,879
Speaker 3: Off, right, I try to respect that.

503
00:25:34,960 --> 00:25:37,159
Speaker 2: Yeah, I mean, you know, I was going back and

504
00:25:37,200 --> 00:25:40,040
Speaker 2: forth with Rachel the Boiler maker, and you know her

505
00:25:40,040 --> 00:25:42,480
Speaker 2: notifications are shut off because she's at the game.

506
00:25:42,800 --> 00:25:45,280
Speaker 3: Yeah, and okay, you know I try to respect that,

507
00:25:46,760 --> 00:25:46,960
Speaker 3: do you.

508
00:25:48,320 --> 00:25:51,320
Speaker 5: When I was managing Bloomberg Intelligence, I assumed that my

509
00:25:51,359 --> 00:25:54,760
Speaker 5: people were twenty four to seven. Yeah, yeah, this is

510
00:25:55,000 --> 00:25:57,800
Speaker 5: that's how I grew worled uh for seven. But maybe

511
00:25:57,840 --> 00:25:58,439
Speaker 5: it's different now.

512
00:25:58,440 --> 00:25:59,359
Speaker 3: I don't know it's different.

513
00:25:59,400 --> 00:26:01,639
Speaker 2: I hear from a lot of people's different list. I'm

514
00:26:01,640 --> 00:26:04,320
Speaker 2: gonna tell you, thank you so much for the newspapers.

515
00:26:04,359 --> 00:26:07,840
Speaker 2: Here's the podcast. Thank you for that. This is a

516
00:26:07,880 --> 00:26:12,879
Speaker 2: Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment,

517
00:26:13,080 --> 00:26:16,679
Speaker 2: and international relations. You can also watch the show live

518
00:26:16,920 --> 00:26:21,240
Speaker 2: on YouTube. Visit the Bloomberg Podcast channel on YouTube to

519
00:26:21,359 --> 00:26:24,760
Speaker 2: see the show weekday mornings from seven to ten am

520
00:26:24,800 --> 00:26:25,720
Speaker 2: Eastern from.

521
00:26:25,600 --> 00:26:27,920
Speaker 3: Our global headquarters in New York City.

522
00:26:28,280 --> 00:26:32,080
Speaker 2: Subscribe to the podcast on Apple, Spotify, or anywhere else

523
00:26:32,119 --> 00:26:35,520
Speaker 2: you listen, and always on Bloomberg Radio, the Bloomberg

524
00:26:35,640 --> 00:26:38,160
Speaker 3: Terminal, and the Bloomberg Business app.