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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg P L Podcast

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Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. It is

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Speaker 1: time for me to talk about my favorite subject, potential

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Speaker 1: market catastrophes. I really like to sort of think about

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Speaker 1: the potential iterations of what could unfold. Somebody once said

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Speaker 1: to me, you should should have start something called catastrophe corner.

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Speaker 1: But here with me to to sort of join me

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Speaker 1: in my catastrophe corner is Nick Sargeant, chief economist at

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Speaker 1: Fort Washington investment advisor and author of the new book

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Speaker 1: Global Shocks. One of the things that you take a

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Speaker 1: look at, that you are looking at right now is

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Speaker 1: whether Donald Trump, the next president of the United States,

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Speaker 1: will be a global stock. So will he be? UM?

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Speaker 1: And I think the answer is to be determined. UM.

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Speaker 1: I think his policies have the potential to be transformative

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Speaker 1: as Ronald Reagan's work. So what do I mean by that? UM?

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Speaker 1: Big tax cuts, but also you don't have spending under control.

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Speaker 1: So the good news the market likes tax cuts deregulation.

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Speaker 1: The bad news is outsized budget deficits. And the biggest

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Speaker 1: difference though in the Reagan era was interest rates. He

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Speaker 1: inherited record high rates thanks to him and the Fed,

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Speaker 1: they brought down inflation, so um interest bond yields declined,

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Speaker 1: but after adjusting for inflation, they actually rose in real terms.

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Speaker 1: So the difference today with Trump is easy inheriting record

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Speaker 1: low rates. And so what I see is the potential

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Speaker 1: for significantly higher bond yields and a super strong dollar,

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Speaker 1: which will make it harder for him to contain trade. Well,

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Speaker 1: here's here's what I'm wondering. I mean, the market is

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Speaker 1: pricing in a lot of hypotheticals right now. It's been

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Speaker 1: very hard to sort of understand the moves and sort

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Speaker 1: of whether they are long term or very short term.

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Speaker 1: Knee jerk. As we were talking about offline, how much

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Speaker 1: control does does President elect Trump really have? I mean,

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Speaker 1: can't the market get ahead of him before he does anything? Oh? Absolutely?

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Speaker 1: And that's why I say, you know, I think right now, um,

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Speaker 1: when I ask the direction of the moves. Um, it

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Speaker 1: was a surprise outcome for me, So I have to

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Speaker 1: scrap what I had written before and said, well, wait

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Speaker 1: a minute, Um, if this is the case, what would

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Speaker 1: I expect. The easy call for me was higher bond yields,

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Speaker 1: stronger dollar, I said, stock market people are gonna like

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Speaker 1: tax cuts, so I can see that going up. But

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Speaker 1: what you know, to your point, what I think they're

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Speaker 1: not thinking is second round effects. Uh, we've had six

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Speaker 1: consecutive quarters of profits declining or flat. So if he

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Speaker 1: can't turn that around overnight, and if suddenly I wake

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Speaker 1: up and I've got significantly higher bond deals to me,

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Speaker 1: the market then is vulnerable to a correction. And how

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Speaker 1: long do we see? How long does the market give

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Speaker 1: Trump to see? You know, as Leasa pointed out, all

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Speaker 1: of us is rhetoric right now. We don't know what's

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Speaker 1: going to happen, So how long until we make those

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Speaker 1: judgments or do we just kind of you know, bet here,

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Speaker 1: bet here, bet here, kind of hedge against everything. Yeah,

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Speaker 1: that's great question. I don't have the answer, but here's

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Speaker 1: what I'm looking for. You don't have anything right now.

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Speaker 1: Everything's clay, it's putty. It can be changed. The most

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Speaker 1: important decision is going to be who's his secretary of Treasury.

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Speaker 1: What is his secretary of the Treasury say, because on

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Speaker 1: his campaign, which I heard and I was in New York,

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Speaker 1: he's talking massive tax cuts and spending increases, and I'm

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Speaker 1: sure every advisor, I'm sure con Ris is going to say,

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Speaker 1: Mr President, with all due respect, he can't do that,

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Speaker 1: and so then he may scale back. So I would

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Speaker 1: say to you, I want to see a plan in place,

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Speaker 1: and you're not going to see that until you've got

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Speaker 1: the new Secretary of the Treasury to work with him.

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Speaker 1: So in the meantime, I think we're in limbo land. Well,

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Speaker 1: when you talk about a global shock, I want to

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Speaker 1: go back to your book. Uh, what is the sort

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Speaker 1: of transmission mechanism here? Because the last one it was

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Speaker 1: the financial sector. What is it going to be this time?

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Speaker 1: You know, they all play out differently. Most people this time,

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Speaker 1: even before Trump would say, is the bond market a bubble?

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Speaker 1: You know we have these record low interest rates. Um,

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Speaker 1: I'm an economist. I say that can't continue forever. So

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Speaker 1: you know you were anticipating could there be some development,

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Speaker 1: could it be higher inflation, stronger growth, whatever, um. But

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Speaker 1: I would say, Lisa, if that was what I was

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Speaker 1: talking about, then I would say, you know what, that's

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Speaker 1: going to be a sell off. But I don't put

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Speaker 1: it in the category of catastrophe of crisis. So what

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Speaker 1: I'm basically saying is, to me, the thing I'm most

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Speaker 1: concerned about is the potential for a trade war that

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Speaker 1: is not priced into the market. Now again, hold on

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Speaker 1: a second. You said it's not priced into the into

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Speaker 1: the market. What would you have to see for a

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Speaker 1: trade war to be price into the market. I think again,

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Speaker 1: what people are waiting to see with Donald Trump? He's

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Speaker 1: a self described negotiator. So is he going to talk

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Speaker 1: tough with Mexico with China and then say I want

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Speaker 1: to scare them and I'm going to get better concessions

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Speaker 1: out of them. If that were the case, I'd be okay.

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Speaker 1: But if we get to the point where he takes action,

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Speaker 1: whether or NAFTA, whether um, whether um, you know, on

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Speaker 1: the RMB, declaring it, you know, manipulative currency and I'm

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Speaker 1: going to impose tariffs, that's when the market would react.

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Speaker 1: So it's actions speak louder than words. With the market react, Oh,

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Speaker 1: Martin would sell off the scary you know. UM, here's

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Speaker 1: again what I think is interesting. I listened to Donald Trump,

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Speaker 1: and UM, I understand his his domestic policies on the

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Speaker 1: on the international policies. He comes from the school of

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Speaker 1: thinking called mercantil is. Um, if you have a trade deficit,

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Speaker 1: it's bad. If you have a trade surplus, it's good.

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Speaker 1: That's the story. There winners, there's losers. And so what

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Speaker 1: I'm saying that concerns me is the type of policies

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Speaker 1: that we're pursuing because we saw it on the Reagan

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Speaker 1: will expand the trade deficit, but will blame the foreigner

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Speaker 1: for it. Nick Sargeant, thank you so much for being

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Speaker 1: with us. Nick Sargeant, chief Economist. Right now, I'm looking

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Speaker 1: at a thirty year treasury yield that is at the

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Speaker 1: highest since December of last year. It has exceeded three

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Speaker 1: once again, this is the big question, and here we

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Speaker 1: have Lacey Hunt to answer at Lacy Hunt is chief

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Speaker 1: economist at Hoisington's Investment management company. UM, is a long

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Speaker 1: bond is that I'll just gonna keep rising here. Well,

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Speaker 1: anything that happened over the short run. Um. But my

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Speaker 1: view is that rates can go up for any number

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Speaker 1: of variety of reasons, just as we've seen in a

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Speaker 1: very vicious fashion over the over the day since the

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Speaker 1: end of the election. But the economy is too fundamentally

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Speaker 1: weak for the rates to stay up well, I mean,

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Speaker 1: so here, what's the big thinking behind uh the significant

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Speaker 1: rise in rates is basically that people are expecting that

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Speaker 1: a combination of President elect Trump's trade policies along with

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Speaker 1: his infrastructure spending will spur market increases in consumer prices

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Speaker 1: that will force the Fed to raise rates UH faster

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Speaker 1: than they had expected. That people are pricing in UM.

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Speaker 1: It would also lead to people to demand how our

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Speaker 1: yields just to compensate them to offset the inflation risk?

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Speaker 1: Is that what's going on here is this selling from

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Speaker 1: foreign investors. I don't Foreign investors don't hold long bonds.

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Speaker 1: If you look at the treasuries study of the foreign

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Speaker 1: ownership of the treasuries UM, foreign investors only have six

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Speaker 1: percent of their holdings and ten year securities are longer.

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Speaker 1: They own a lot of short paper builds in two

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Speaker 1: year notes, three year notes, that's their holdings are. Yeah,

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Speaker 1: the long bond is a domestic market has been always

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Speaker 1: and the and the one the foreign investors that hold

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Speaker 1: the tenure in older paper are the big European insurance

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Speaker 1: companies who have dollar based liabilities, then they're they're not

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Speaker 1: hot players. Um, what we've seen in here is a

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Speaker 1: massive rush to judgment. And there is a presumption that

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Speaker 1: sounds biblical that biblical times we're seeing a rush to

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Speaker 1: judgment in the treasure market. What is that judgment? What

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Speaker 1: we've seen that we've seen this before. When when when

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Speaker 1: President Obama and bailed his one trillion dollar stimulus that

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Speaker 1: was assumed to be highly inflationary is going to lead

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Speaker 1: to a boom, fond yells would rise, the dollar would collapse. UM,

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Speaker 1: when quantitative easing one was announced, UH saw the same pattern.

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Speaker 1: Quantitative to markets presume that they understand the complexities of

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Speaker 1: the macroeconomics. And the fact of the matter is that

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Speaker 1: um that that deficit spending actually carries a negative multiplier,

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Speaker 1: It contracts the economy, doesn't croyd. This is this is

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Speaker 1: the big debate to me, and I'm so glad that

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Speaker 1: you raised this because you know, people say this is

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Speaker 1: going to finally ignite inflation. This is what we've been

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Speaker 1: waiting for. We're waiting, We've been waiting for the fiscal stimulus,

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Speaker 1: and then you have people like yourself who are telling me, yeah,

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Speaker 1: deficit spending actually has the opposite effect. It hampers growth

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Speaker 1: in the long run. So what's going to have to

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Speaker 1: happen for markets to wake up to that reality? Or

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Speaker 1: is that a controvers sial issue. I mean it is

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Speaker 1: a controversial issue. Some people would disagree. Well, it's hard

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Speaker 1: to know when the markets UH will focus on the

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Speaker 1: long run fundamentals. That's why I don't try to do it.

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Speaker 1: We had Poisington Management. We we look on we key

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Speaker 1: our investments on the long run trend and inflation. And

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Speaker 1: the most critical factor is to look at what's happening

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Speaker 1: to the rate of growth and money supply and the

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Speaker 1: velocity of money. They're equal partners in in this stance.

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Speaker 1: And money supply growth has been right at its one

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Speaker 1: year average, one years average. Nothing has happened there. But

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Speaker 1: but the velocity of money has fallen to a six

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Speaker 1: quarter low. It's only one point four four. It's the

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Speaker 1: lowest UH in modern times really except for right after

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Speaker 1: World War Two. Now, the velocity of money is influenced

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Speaker 1: by a lot of factors, but the most important of

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Speaker 1: which is the productivity of our debt, and the productivity

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Speaker 1: of our debt is increasingly worse. Another, it's not doing

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Speaker 1: enough with our debt to actually stimulate gross And give

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Speaker 1: you a couple of numbers. From nineteen fifty one, one

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Speaker 1: dollar and seventy cents of new debt generated one dollar

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Speaker 1: of GDP. From from to two thousand, it took three

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Speaker 1: dollars and thirty cents of debt to generate one dollar

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Speaker 1: of GDP. Last year, last four quarters, I should say

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Speaker 1: we took on two point two trallion dollars of debt.

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Speaker 1: Our GDP was only a four fifty billion, So it

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Speaker 1: took nearly five dollars of new debt to generate one

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Speaker 1: dollar of GDP. Now, and why is that because because

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Speaker 1: the debt is basically financing consumption, it's financing things that

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Speaker 1: will not generate an income stream to repay principle and interest. Okay, well,

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Speaker 1: let's let's talk about the number that I'm staying. We've stopped.

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Speaker 1: You've got to let me finish here. The critical point is,

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Speaker 1: in this rush to judgment, you've had a massive increase

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Speaker 1: in the long term rates, not just in the United

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Speaker 1: States but worldwide and even even a greater rising in

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Speaker 1: the emerging markets. And this rate rise has occurred everywhere,

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Speaker 1: and you've seen in a lot of countries where UH

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Speaker 1: interest rates that were negative gone positive. And at the

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Speaker 1: same time, there hasn't been a dramatic surge in the dollar.

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Speaker 1: Dollar is it a fourth junior high unprecedentedly high? Well,

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Speaker 1: the surgeon long term rates UH encourages more saving, less spending,

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Speaker 1: that puts downward pressure on velocity that is already declining precipitously.

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Speaker 1: In addition, the surge and the dollar will serve to

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Speaker 1: bring into the United States a wide range of lower

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Speaker 1: costs goods, and it will cost domestic firms profits when

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Speaker 1: they convert their foreign earnings back into dollars. It will

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Speaker 1: cost them market are at home and abroad. And so

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Speaker 1: the events of the last several days are our giant

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Speaker 1: constraining action that will put both downward pressure on the

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Speaker 1: radar growth and money and ready the growth and velocity.

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Speaker 1: And so in essence, what we've seen is there has

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Speaker 1: been a massive market tightening of monetary conditions. Massive and

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Speaker 1: so when the tax cut takes effect, if it does

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Speaker 1: take effect in a timely manner, that's something we really

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Speaker 1: don't know. It's quite possible that the markets have already

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Speaker 1: negated its effectiveness. And if you go back and look

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Speaker 1: at the at the Reagan tax cuts, UM, the conditions

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Speaker 1: were a lot different, a lot a lot different. First

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Speaker 1: of all, debt, government debt was fifty GDP, not a

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Speaker 1: hundred and seven. And we had favorable demographics. We have

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Speaker 1: very unfavorable to the birthrates the lowest spend. We have

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Speaker 1: a huge percentage our households uh in the of our

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Speaker 1: of our youngsters in court living at home. The demographics

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Speaker 1: are not good. And also when Reagan tax cuts took effect, UM,

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Speaker 1: monetary policy was working in tandem. Monetary policy has to

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Speaker 1: be supportive, not adversarial. And and that's that's the markets

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Speaker 1: have made sure that the beginning is very adversarial. Lacy Hunt,

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Speaker 1: thank you so much for being with us. Lacy Hunt,

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Speaker 1: chief economist at Hoysington's Investment Management. Looking at the long bond,

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Speaker 1: it is down almost seven percent so far in November.

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Speaker 1: I'm Lisa Brown Boys here with Shelley Banjo, my co

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Speaker 1: host Pim Fox on vacation. This is per blah blah blah.

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Speaker 1: That's how a renowned economist summed up the state of

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Speaker 1: macro economics. I'm Lisa Brown Boys I'm here with my

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Speaker 1: co host for the day, Shelley Banjo pim Fox. My

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Speaker 1: co host is on vacation and we'll be back in

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Speaker 1: about a week. So, Shelly, this story caught my eye.

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Speaker 1: I thought that it was so interesting because it just

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Speaker 1: highlights some of the frankly what people say behind closed

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Speaker 1: doors or in private conversations, which is macro economics have

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Speaker 1: gotten has gotten it so wrong, And then one of

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Speaker 1: their own came out and said it very publicly. Uh,

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Speaker 1: I want to bring in one of the authors of

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Speaker 1: this story, Craig TORUS Economy and Federal Reserve reporter at Bloomberg.

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Speaker 1: What kind of response have you gotten from this story,

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Speaker 1: Craig Ey, Lisa, Hi, Shelley. It's funny, but economists love it.

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Speaker 1: Why they like to sort of bend at each other

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Speaker 1: because it's just like what you said, right, They all

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Speaker 1: knew that the house was burning down, and and but

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Speaker 1: nobody really wanted to say it. So walk us through

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Speaker 1: the sort of what made Paul Romer, who was had

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Speaker 1: a in as the World banks next chief economist when

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Speaker 1: he wrote this paper? Why did he write this paper

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Speaker 1: that essentially tore down macro economics. So he said he

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Speaker 1: had a like a space and a journal that he

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Speaker 1: had to fill and um, so he's going to write something.

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Speaker 1: And then he saw a movie about scientology, and so

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Speaker 1: it started to make him think, well, you know, maybe

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Speaker 1: macro is a bit of a personality quote as well.

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Speaker 1: With all these schools of economists, you know, um, the

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Speaker 1: Robert Lucas school of Rational expectations and real business cycle

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Speaker 1: theory versus the Kynesians, and then he started to think,

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Speaker 1: you know, these guys are so busy arguing among themselves

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Speaker 1: and devising these big, intricate mathematical models that they've entered

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Speaker 1: what he calls post real economics. Love that that's the

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Speaker 1: best description ever. Um. You know, this story reminds me

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Speaker 1: of back when I went to business school and the

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Speaker 1: people who were started rewriting a macro economics books after

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Speaker 1: two tho Nate, they were doing full rewrites of textbooks.

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Speaker 1: I mean, what happened to that? What? What didn't this

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Speaker 1: debate kind of unfold in two thousand and eight? Why

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Speaker 1: the why the big shock now with this with this um,

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Speaker 1: you know, rummer scandal. So what economists didn't really have

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Speaker 1: in those models were things like financial markets, and I

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Speaker 1: think so, uh, you know, I spent a year in

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Speaker 1: business school too, and actually this idea of Robert Lucas

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Speaker 1: Nobel Prize winning economists from University of Chicago was very powerful.

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Speaker 1: It said, whatever government does, it kind of is ineffective

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Speaker 1: because consumers anticipated and um and they adjust and businesses anticipated.

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Speaker 1: But if you think about ordinary life, um uh, you know,

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Speaker 1: often as rational as we are, we we make mistakes.

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Speaker 1: And one area where you could see this is um

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Speaker 1: a book I read and I like a lot called

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Speaker 1: Deep Survival, which studies how accidents occur. Let's take a

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Speaker 1: group of climbers in Yosemite and they say, you know,

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Speaker 1: it's a beautiful day, we're going to go up the

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Speaker 1: wall of El Capitan, and the weather forecast is perfect.

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Speaker 1: But then something changes, like well they didn't really research

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Speaker 1: the weather enough, their expectations were flawed or the weather

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Speaker 1: model was flawed, and then they get trapped up there

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Speaker 1: and they're in serious trouble. So you could say, you know,

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Speaker 1: whatever it is, subprime or the kind of odd things

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Speaker 1: that happen in human behavior. Those models don't incorporate that

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Speaker 1: at all. They don't plan for them, and you get

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Speaker 1: these explosions that are completely unexpected. Well, and I love

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Speaker 1: the line that you quoted of his paper, assume a

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Speaker 1: assumed b blah blah blah, and so we have proven

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Speaker 1: that p is true. Um, you know, on one hand,

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Speaker 1: it's comical. And as you said, you know, people kind

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Speaker 1: of evolve been talking about this, uh, you know, not

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Speaker 1: in private, right, in private conversation. But this, really BAC

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Speaker 1: economics have has a much broader effect. I mean, if

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Speaker 1: you think about the Federal Reserve or other central banks,

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Speaker 1: I mean they base a lot of their policies on

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Speaker 1: macroeconomic theory. Right. That's why I think this is interesting.

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Speaker 1: Is right now this year is a matter of fact,

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Speaker 1: we're seeing none other than Janet Yellen start to talk

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Speaker 1: about the flaws of what economists call representative agent models.

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Speaker 1: So in these models, they have household a and business

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Speaker 1: be and those households representative households and business. You know,

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Speaker 1: representative business will always respond to a price or an

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Speaker 1: interest rate in this way. And what she said in

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Speaker 1: October at a Boston Fed conferences, we need to look

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Speaker 1: underneath the hood and ask ourselves are various cohorts are

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Speaker 1: young people responding that way, our savers responding, how are

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Speaker 1: they responding? I think that's very healthy. You mean to

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Speaker 1: actually think about facts and and maybe it's cross check

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Speaker 1: it with reality. Um Craig torres thank you so much

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Speaker 1: for speaking with a S. Creig Touris Economy and Federal

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Speaker 1: Reserve reporter for Bloomberg coming to us from Washington, d C.

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Speaker 1: About blah blah blah Black Friday. We're getting closer, so

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Speaker 1: we need to talk about it, all about it, which

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Speaker 1: we expect. With us, we have Tom McKee, CEO of

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Speaker 1: the International Council of Shopping Centers. You know what's gonna happen.

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Speaker 1: What's gonna happen? Are we gonna be talking on the

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Speaker 1: Monday after the Saturday after Black Friday that it was

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Speaker 1: the best ever and that it saved the retail sector?

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Speaker 1: Always the best ever? I wish I knew everything that

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Speaker 1: was going to happen, but I do think we'll be

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Speaker 1: talking the following Monday and saying it was a very

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Speaker 1: good Black Friday and holiday weekend. We just recently did

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Speaker 1: a survey. We expect about a hundred and fifty million

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Speaker 1: Americans to go shopping over the Thanksgiving Day holiday, which

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Speaker 1: is you know, which is clearly strong. Uh you know,

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Speaker 1: Black Friday is kind of instituted in our American psyche.

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Speaker 1: I think is A is a big part of the

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Speaker 1: holiday weekend. Our survey Consumer Survey I indicated that holiday

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Speaker 1: sales overall will increase about three point three. They're going

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Speaker 1: to be winners and losers. Retail is a fiercely competitive business. Actually,

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Speaker 1: I think that I think the retailers that will win

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Speaker 1: are really I'm not gonna give your names, but I

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Speaker 1: think it's I think omni channel retailers will win. I

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Speaker 1: think what's happening in retail, and which is often kind

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Speaker 1: of an untold story. And I know, Shelly, you cover

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Speaker 1: the industry a lot, is you know, we tend to

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Speaker 1: position the industry in bricks and mortars versus online, and

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Speaker 1: I think that's really kind of an antiquated, uh you

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Speaker 1: know comparison. I think what's really happening is technology is

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Speaker 1: being integrated into shopping, just like it's been integrated into

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Speaker 1: every part of American life. And I think those retailers

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Speaker 1: that have an integrated omni channel experience over the long

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Speaker 1: run will do much better. In fact, you know, our

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Speaker 1: surveys would indicate that the vast majority people will shop

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Speaker 1: at omni channel retailers. An omni channel of course, being

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Speaker 1: both digital and people that retailers that have a presence

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Speaker 1: online and in the physical space. And I think what

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Speaker 1: you're another, I think untold story is a lot of

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Speaker 1: online only retailers are moving into the physical space, and

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Speaker 1: so that will create additional demand. Even Amazon, you know,

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Speaker 1: is announcing opening up two thousand grocery stores, etcetera. So

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Speaker 1: when was when was the survey conducted? Was this pre election? Now?

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Speaker 1: The Black Friday survey was was posted? Was post election?

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Speaker 1: And so did you the kind was three? Was pre election?

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Speaker 1: Did you guys see anything that surprised you that came

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Speaker 1: from any kind of election showing up there? No, I mean,

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Speaker 1: I don't think I could attribute any of the findings

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Speaker 1: directly to the election. I think, obviously, you know, there's

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Speaker 1: a level of uncertainty that's been removed from the economy

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Speaker 1: and from consumer psyche relative the conclusion the election. But

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Speaker 1: as you know, I mean, last month's retail sales were

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Speaker 1: pretty strong, uh, and that happened in the midst of

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Speaker 1: the election season. So I think just generally a king

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Speaker 1: we're in an environment where you know, incomes have improved,

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Speaker 1: the job markets improved. Obviously all of us want the

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Speaker 1: economy be stronger, but I think we are in a

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Speaker 1: better place today than we were a year ago. Tom,

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Speaker 1: What am I going to get for the holidays? I mean,

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Speaker 1: what are people buying? Are they going to be buying? Uh,

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Speaker 1: you know, clothes? Are they buying? Uh? They buying new blenders,

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Speaker 1: they buying juicers? Like what they want? It's the holidays, right,

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Speaker 1: So I think that, you know, if you look at historically,

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Speaker 1: and I think our survey results would align with what

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Speaker 1: historically happens. And electronics are always popular. Toys are always popular.

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Speaker 1: I mean it's holidays. Apparel is going to be popular

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Speaker 1: because it is always popular. Gift Cards are also, you know,

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Speaker 1: a big expenditure during the holiday season because people give

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Speaker 1: gifts and they don't exactly what are lazy. They don't

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Speaker 1: want to actually have to pick anything out for somebody else.

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Speaker 1: They just exactly say time you go return it. I mean,

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Speaker 1: come on, I don't know you or Picky, I understand that,

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Speaker 1: but as the mother of two young children, the idea

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Speaker 1: of then you're not going to give your kids gift cards.

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Speaker 1: You're getting by them. They would love they would love that.

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Speaker 1: So it has the importance of Black Friday diminished over time?

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Speaker 1: I think that. I think symbolically Black Friday is still

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Speaker 1: really important in the American psyche and as we evaluate

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Speaker 1: the retail industry, I think, however, when you look at

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Speaker 1: the holiday shopping season, it's really become longer. It's become

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Speaker 1: a much longer season. It really starts kind of in

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Speaker 1: November and continues all the way you know through Christmas Eve.

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Speaker 1: There's a lot of people that still shop, you know,

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Speaker 1: that Super Saturday right up until Christmas Eve. So I

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Speaker 1: don't think it has um the direct impact that it

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Speaker 1: once had on you know, retailer's fortunes for that year.

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Speaker 1: But I do think it's symbolically and important um day

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Speaker 1: in the shopping season and in the holiday season for sure.

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Speaker 1: Do you think that perhaps that Saturday it's going to

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Speaker 1: continue to be even more important than Black Friday? Saturday? Yeah,

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Speaker 1: because it's the last time you can get a gift

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Speaker 1: for someone you can't shop online at Amazon. I do

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Speaker 1: I think Super Saturday will continue to be important. I

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Speaker 1: think it's part of it's just human nature. People tend,

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Speaker 1: you know, where people are busy, and they have lots

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Speaker 1: of polls on their time, and so it's logical that

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Speaker 1: some folks procrastinate and uh, and so that lays plays

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Speaker 1: into Super Saturday. I also think that people, um, you know,

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Speaker 1: just part of the holiday season that you remember you

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Speaker 1: need to buy two or three more gifts that you

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Speaker 1: didn't think about. And so I think that is going

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Speaker 1: to continue to be important. What about the experience economy

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Speaker 1: when we hear so much about how people are moving

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Speaker 1: away from the traditional shopping experience and for going physical

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00:25:36,480 --> 00:25:39,919
Speaker 1: things for experiences, I mean, are you seeing that in

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00:25:40,000 --> 00:25:43,040
Speaker 1: any way? Does that play out at all? You can see?

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00:25:43,800 --> 00:25:45,879
Speaker 1: I do? I think it's well, I think, first of all,

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00:25:45,880 --> 00:25:47,840
Speaker 1: I think the holiday season. I mean, if you really,

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00:25:48,160 --> 00:25:49,760
Speaker 1: you know, kind of take a step back. Before we

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00:25:49,760 --> 00:25:54,760
Speaker 1: started talking about experience, the holiday season was always really experiential, right,

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00:25:54,800 --> 00:25:56,760
Speaker 1: That's when you go shopping and you see the decorations.

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00:26:00,200 --> 00:26:03,520
Speaker 1: But I do think, I do think the retailers that

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00:26:03,640 --> 00:26:07,680
Speaker 1: win will create a differentiated experience for their consumers. That's

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00:26:07,720 --> 00:26:10,080
Speaker 1: part of this omni channel environment. I also think it's

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00:26:10,119 --> 00:26:13,399
Speaker 1: part of great customer service. It's also integration of technology

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00:26:13,400 --> 00:26:17,840
Speaker 1: into the retail experience. Whether it's you know, being able

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00:26:17,920 --> 00:26:21,199
Speaker 1: to use technology to help you fit you know, the

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00:26:21,280 --> 00:26:23,960
Speaker 1: right piece of clothing, whether it's to use technology to

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00:26:24,359 --> 00:26:26,400
Speaker 1: make sure you're buying the right sneakers and you kind

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00:26:26,400 --> 00:26:28,639
Speaker 1: of test them out on a on a half court,

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00:26:29,240 --> 00:26:31,119
Speaker 1: you know, and and say are these the right speakers

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00:26:31,119 --> 00:26:32,920
Speaker 1: for me? Do I get the right kind of response time?

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00:26:33,160 --> 00:26:34,959
Speaker 1: So all of those things, I think are are going

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00:26:35,000 --> 00:26:37,400
Speaker 1: to continue to be important, and I think you'll see

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00:26:37,400 --> 00:26:41,280
Speaker 1: technology and experience be integrated the shopping experience going forward.

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00:26:41,280 --> 00:26:44,560
Speaker 1: But I think ultimately, what I think is important is

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00:26:44,560 --> 00:26:47,760
Speaker 1: that people don't there is this at this time of

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00:26:47,800 --> 00:26:50,000
Speaker 1: the year, this sense that, oh, by goodness, e commerce

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00:26:50,080 --> 00:26:52,600
Speaker 1: is taking over and that's not happening. I think that

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00:26:52,760 --> 00:26:56,080
Speaker 1: e commerce is certainly a big part of the retail landscape,

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00:26:56,520 --> 00:26:59,960
Speaker 1: but brick and mortar, physical retailers are the by far

456
00:27:00,000 --> 00:27:02,159
Speaker 1: are the largest part of the retail landscape. But I

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00:27:02,200 --> 00:27:05,520
Speaker 1: think you're having an integration of technology and physical and

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00:27:05,560 --> 00:27:07,040
Speaker 1: I think we'll get to a point where we won't

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00:27:07,080 --> 00:27:09,919
Speaker 1: talk about online versus physical, We'll talk about an omnichannel

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00:27:09,960 --> 00:27:12,800
Speaker 1: retail environment. Talk to us about malls though, what you

461
00:27:12,840 --> 00:27:16,720
Speaker 1: know traffic is, you know, constantly down month after month.

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00:27:16,720 --> 00:27:19,880
Speaker 1: It's going to be something that's not going to stop. Um,

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00:27:19,920 --> 00:27:22,399
Speaker 1: what are malls doing this holiday season to get people

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00:27:22,440 --> 00:27:25,400
Speaker 1: in to convince them to come shopping, spend some time there?

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00:27:25,840 --> 00:27:29,000
Speaker 1: You know? You know? Uh, I think as it relates

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00:27:29,000 --> 00:27:31,639
Speaker 1: to traffic, obviously there's there. First of all, there's no

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00:27:31,720 --> 00:27:34,320
Speaker 1: real good measurement of traffic that's out there. There's nobody

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00:27:34,320 --> 00:27:37,720
Speaker 1: that measures traffic and says this is what's really happening. Also,

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00:27:37,800 --> 00:27:41,159
Speaker 1: remember sales overall have been going up, and so what

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Speaker 1: is really happening, I think is you have a more

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00:27:43,800 --> 00:27:47,440
Speaker 1: efficient shopper. They do a lot of research online, they

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00:27:47,480 --> 00:27:51,200
Speaker 1: come into the store prepared to consummate that transaction. Efficient

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Speaker 1: shoppers we're having. We had a wonderfully efficient conversation. We

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Speaker 1: learned all about what we're gonna buy and what we

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00:27:56,440 --> 00:27:58,400
Speaker 1: can expect for the holiday season. Thank you so much.

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Speaker 1: Thanks for listening to the Bloomberg pien L podcast. You

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00:28:08,280 --> 00:28:12,200
Speaker 1: can subscribe and listen to interviews at iTunes, SoundCloud, or

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00:28:12,440 --> 00:28:16,520
Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm out

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00:28:16,520 --> 00:28:19,399
Speaker 1: there on Twitter at Pim Fox. I'm out there on

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00:28:19,440 --> 00:28:22,680
Speaker 1: Twitter at Lisa Abramo it's one before the podcast. You

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00:28:22,680 --> 00:28:25,359
Speaker 1: can always catch us worldwide on Bloomberg Radio