WEBVTT - The Markets And Economy Amid Rising Inflation 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:24.680 at Bloomberg dot com slash podcast. Inflation, Matt, it's out there, 0:00:24.920 --> 0:00:27.200 It's real. The question I think a lot of folks 0:00:27.240 --> 0:00:28.880 are saying is they look at the CPI did and 0:00:28.920 --> 0:00:32.479 the PPI data is has it peaked? Are we close 0:00:32.560 --> 0:00:35.240 to a peak? Well? Robert Rosener joins US executive director, 0:00:35.320 --> 0:00:41.200 senior US economist for our good friends over at Morgan Stanley. Robert, 0:00:41.200 --> 0:00:43.760 what say you? What's your inflation call? Right here? Are 0:00:43.760 --> 0:00:49.320 we at or near a peek in this inflation? Well, 0:00:49.320 --> 0:00:52.839 we do think we're near the peak, not just there yet. 0:00:52.920 --> 0:00:54.440 We still have a couple of months ahead of us 0:00:54.440 --> 0:00:57.120 where we're likely to see the inflation numbers, particularly year 0:00:57.160 --> 0:01:00.480 over year, creeping a little bit higher up. There are 0:01:00.600 --> 0:01:03.200 signs that that peak is ahead of us in terms 0:01:03.200 --> 0:01:05.400 of what we know so far. We saw the consumer 0:01:05.400 --> 0:01:08.800 Price Index data just yesterday, which showed pretty steady inflationary 0:01:08.800 --> 0:01:11.479 pressures into the end of the year, but some early 0:01:11.520 --> 0:01:13.840 signs of cooling in the producer price index, as well 0:01:13.840 --> 0:01:16.760 as some very early signs of potentially some release in 0:01:17.040 --> 0:01:21.040 supply chains, suggests that we may still see cooler numbers 0:01:21.040 --> 0:01:25.399 ahead as we look further into Robert you or the 0:01:25.440 --> 0:01:28.560 winner or are the winner of the NAB the National 0:01:28.560 --> 0:01:34.720 Association for Business Economics Outlook award the most accurate economic forecasts. Yeah, 0:01:34.959 --> 0:01:37.200 I mean that is big, especially at a time when 0:01:37.200 --> 0:01:41.160 there's so much divergence and forecasts, um and there's so 0:01:41.200 --> 0:01:43.720 much uncertainty out there. What do you do? What do 0:01:43.760 --> 0:01:46.520 you think you do differently than others when you're putting 0:01:46.560 --> 0:01:51.440 together a forecast. I think the key to forecasting through 0:01:51.480 --> 0:01:54.840 the pandemic has been to look not just top down, 0:01:54.880 --> 0:01:57.680 but bottoms up. We have to understand that what's going 0:01:57.720 --> 0:01:59.960 on in particular sectors of the economy. We have done 0:02:00.080 --> 0:02:02.440 erstand what's going on very high frequency with things like 0:02:02.520 --> 0:02:06.440 consumer behavior and business behavior, what's going on with hiring, 0:02:06.920 --> 0:02:09.760 and that definitely pertains to inflation as well. You know, 0:02:09.800 --> 0:02:13.560 inflation has been uh, certainly a macro phenomenon, but there's 0:02:13.600 --> 0:02:16.720 been micro details that have been driving the numbers that 0:02:16.760 --> 0:02:19.600 are really important to watch the pulse of what's moving. 0:02:19.720 --> 0:02:21.920 So we need to know what's going on in the 0:02:21.919 --> 0:02:25.280 auto market. We need to be working collaboratively across our 0:02:25.280 --> 0:02:27.560 research department and more against Stanley to understand what our 0:02:27.600 --> 0:02:30.480 auto analysts are saying, what our sector analysts are saying. 0:02:31.240 --> 0:02:35.440 Because individual sectors that might ordinarily have been smaller moving 0:02:35.800 --> 0:02:38.320 in such large ways, it's really impacting the macro data. 0:02:39.000 --> 0:02:40.200 I think what you just said is you got to 0:02:40.240 --> 0:02:42.480 work much harder. Got to work hard. That sounds like 0:02:42.520 --> 0:02:44.600 a lot of work, it does. I mean, I'm not 0:02:44.880 --> 0:02:47.080 sure I'm into that, but but you know, I've competed 0:02:47.080 --> 0:02:49.440 against Morgan, Stanley and micers A sell side analysts for 0:02:49.520 --> 0:02:53.359 years and they're always always so good. One analysts leaves. 0:02:53.360 --> 0:02:56.240 I get someone as good or better Robert. You know, 0:02:56.400 --> 0:02:59.240 I guess one of the issues is um you As 0:02:59.280 --> 0:03:01.560 we think about the labor market, it's such an important 0:03:01.560 --> 0:03:03.960 part of the economy, consumer spending. It ties into so 0:03:03.960 --> 0:03:06.399 many things. My question to you is, and I've asked 0:03:06.400 --> 0:03:08.040 a lot of smart people and I'm trying to get 0:03:08.080 --> 0:03:10.680 my head around this. The four to five million folks 0:03:10.720 --> 0:03:15.040 that have left the labor force. Who are they, Where 0:03:15.040 --> 0:03:19.520 did they go? Are they coming back? Yeah, it's it's 0:03:19.560 --> 0:03:22.360 probably one of the most important questions for the year ahead, 0:03:22.400 --> 0:03:25.000 if not for the next couple of years. Is there's 0:03:25.080 --> 0:03:29.760 still yawning shortfall in jobs relative to pre COVID peaks. 0:03:30.080 --> 0:03:32.359 And of course that's represented as well in the shortfall 0:03:32.480 --> 0:03:35.520 and labor force participation. There's just fewer people in this 0:03:35.600 --> 0:03:38.960 labor force than there were prior to COVID. Now we 0:03:39.040 --> 0:03:42.040 know a big chunk of that is because of retirements, 0:03:42.040 --> 0:03:45.040 which looked like they caught up pretty significantly over the 0:03:45.080 --> 0:03:48.240 last eighteen months. Those are labor force decisions that are 0:03:48.240 --> 0:03:51.560 probably going to prove to be stickier, and that, in 0:03:51.600 --> 0:03:54.560 our estimates, is about two thirds of the shortfall in 0:03:54.640 --> 0:03:58.040 labor force participation, and that's the element that we might 0:03:58.120 --> 0:04:01.040 just not see return. But there's still an element of 0:04:01.080 --> 0:04:04.840 the shortfall labor force participation that comes from things like 0:04:04.920 --> 0:04:08.240 disruptions due to COVID, or people just waiting to get 0:04:08.240 --> 0:04:11.200 back into the labor market, having to deal with childcare issues, 0:04:11.280 --> 0:04:14.320 all of the disruptions from the pandemic. Now that may 0:04:14.360 --> 0:04:16.680 be slower to return, but there is still some room 0:04:16.720 --> 0:04:18.520 there to move the needle in terms of bringing labor 0:04:18.520 --> 0:04:22.360 fertipation higher. You know what, what it brings up for me, Robert, 0:04:22.440 --> 0:04:27.480 is a question about UM. What cynics or critics called 0:04:27.520 --> 0:04:31.039 the plunge Protection team, because a lot of people the 0:04:31.080 --> 0:04:33.640 plunge protection team like the the idea that the FED 0:04:33.800 --> 0:04:36.800 is going to freak out one markets fall and come 0:04:36.800 --> 0:04:39.599 back and be very supportive. And the reason that I 0:04:39.640 --> 0:04:43.240 think UM it's an important question now is if you've 0:04:43.279 --> 0:04:45.920 got these three, four or five million people that decided 0:04:45.960 --> 0:04:48.280 they could retire early. A part of that was how 0:04:48.320 --> 0:04:53.760 well they had done in the markets, right. I mean, 0:04:53.800 --> 0:04:56.159 we all know people, I think who have done so 0:04:56.200 --> 0:04:58.400 well in the markets. And of course they saved early 0:04:58.520 --> 0:05:01.359 and they put money away, and that was mark. But 0:05:01.760 --> 0:05:04.000 the reason they were able to step away is that 0:05:04.040 --> 0:05:06.760 we were up twenty seven percent last year. We were 0:05:06.880 --> 0:05:10.440 up eighteen percent in twenty we were up twenty in 0:05:10.480 --> 0:05:13.320 twenty nineteen. And if you see a twenty percent correction, 0:05:14.200 --> 0:05:19.239 can the FED really continue to fight inflation by staying 0:05:19.279 --> 0:05:22.039 on the path to rising rates or does it have 0:05:22.160 --> 0:05:26.200 to capitulate and come in and save UM shareholders that 0:05:26.240 --> 0:05:30.440 are at risk. Well, that's a really great question, and 0:05:30.480 --> 0:05:32.679 I think we have to begin from a starting point 0:05:32.680 --> 0:05:36.479 where the FED is moving towards tightening monetary policy, and 0:05:36.640 --> 0:05:38.840 one of the reasons that is allowing them to do 0:05:38.920 --> 0:05:43.440 so is that financial conditions remain extraordinarily accommodative. And by 0:05:43.440 --> 0:05:45.920 that I mean movements in markets that we've seen over 0:05:45.960 --> 0:05:49.040 the last year. The current state of how financial markets 0:05:49.040 --> 0:05:52.320 are interacting with the economy, it's supportive for growth. So 0:05:52.360 --> 0:05:56.839 exactly as you described, household wealth is higher, um just 0:05:56.920 --> 0:05:59.680 the overall state of markets is supportive for the economy. 0:06:00.040 --> 0:06:02.159 And this is a FED that's looking to dial back 0:06:02.240 --> 0:06:04.799 the amount of support that it's providing for the economy. 0:06:04.839 --> 0:06:08.039 And so it's likely to be a FED that's accepting 0:06:08.720 --> 0:06:12.000 of some tightening and financial conditions, whether that comes from 0:06:12.279 --> 0:06:17.240 lower equity valuations, higher rates, stronger dollar, just the general 0:06:17.279 --> 0:06:19.919 backdrop of financial conditions may need to snug up a 0:06:19.960 --> 0:06:23.800 little bit in order to get the economy, take some 0:06:23.880 --> 0:06:25.919 of the steam out of the economy and take some 0:06:25.960 --> 0:06:28.039 of the steam out of inflation as well. So I 0:06:28.040 --> 0:06:30.040 think that may come as a surprise to some people 0:06:30.160 --> 0:06:32.960 is that the FED might not be there to respond 0:06:33.000 --> 0:06:35.520 to every hiccup in the market when they are looking 0:06:35.560 --> 0:06:37.800 to get to a backdrop where financial conditions are at 0:06:37.880 --> 0:06:40.520 least more neutral in terms of how they're interacting with 0:06:40.560 --> 0:06:43.279 the economy. All right, Robert, thank you so much for 0:06:43.360 --> 0:06:46.400 joining us. We really appreciate getting some of your time. 0:06:46.440 --> 0:06:49.240 I'm sure you're busy these days thinking about where this 0:06:49.320 --> 0:06:53.239 economy is going. Robert Rosen, Executive Director. He's a senior 0:06:53.320 --> 0:06:56.880 US economists with our good friends at Morgan Stanley here 0:06:56.880 --> 0:07:03.680 in Midtown Manhattan, m Bloomberg Markets. Today is brought to 0:07:03.680 --> 0:07:07.239 you by Commonwealth, supporting more than two thousand independent financial 0:07:07.240 --> 0:07:10.440 advisors with the solutions they need to grow a thriving business. 0:07:10.480 --> 0:07:14.560 Commonwealth Go where you Grow. Visit Commonwealth dot com to 0:07:14.760 --> 0:07:18.440 learn more. I wonder what people, the real people out there, Matt, 0:07:18.520 --> 0:07:21.960 that are you know, putting their daily paychecks giving it 0:07:22.000 --> 0:07:24.320 to their financial advisors saying, you know, where do I 0:07:24.440 --> 0:07:26.760 go with my money? Here? I've got in a market 0:07:26.800 --> 0:07:29.160 where I think we're gonna have rising interest rates throughout 0:07:29.240 --> 0:07:32.520 this year. What do I do? Well? Fortunately, we have 0:07:32.600 --> 0:07:35.600 some smart people to help us think about that. Tammy Hey, 0:07:35.600 --> 0:07:39.360 good financial advisor for UBS, joins us and Tammy, I'd 0:07:39.440 --> 0:07:42.960 love to hear what a typical phone call these days, 0:07:43.400 --> 0:07:45.920 in the early days of two between you and your 0:07:45.960 --> 0:07:51.560 clients are what are they asking you? Good morning, thank 0:07:51.560 --> 0:07:57.120 you for having me. UM. It is clear that one 0:07:57.160 --> 0:08:02.800 of the first conversations that we're talking about out this inflation. UM, 0:08:02.920 --> 0:08:08.000 you don't have to be on the news cycle. Just 0:08:08.080 --> 0:08:11.400 go to the grocery store and understand that prices are 0:08:11.480 --> 0:08:17.400 higher than they've been. And with the news on earlier 0:08:17.440 --> 0:08:22.440 this week, inflation at a thirty nine year high, it's 0:08:22.480 --> 0:08:26.080 it's on the forefront of most people's mind. I think 0:08:26.120 --> 0:08:30.440 the thing that doesn't get talked about nearly as much, 0:08:30.600 --> 0:08:35.280 but is a balancing effect for us is UM the 0:08:35.280 --> 0:08:41.320 fact that jobless claims at a fifty year below so 0:08:42.760 --> 0:08:47.439 for us to enter the Barbell temm, that concern I 0:08:47.480 --> 0:08:50.400 guess I would have as an investor is that, you know, 0:08:50.480 --> 0:08:52.640 not only do I want to make more than inflation, 0:08:53.200 --> 0:08:56.800 but UM, I'm looking at out the corner of my 0:08:56.840 --> 0:08:59.760 eye at the Federal Reserve and if they're getting really 0:08:59.800 --> 0:09:06.200 a restive that typically UM has held back growth and uh, 0:09:06.440 --> 0:09:10.280 it's it's not It's not unusual for stock markets to 0:09:10.320 --> 0:09:13.520 take a hit when the Fed is in a hiking cycle. 0:09:13.640 --> 0:09:17.199 So are you worried, um, that your that your clients 0:09:17.280 --> 0:09:20.800 are going to see returns diminished compared to what they 0:09:20.840 --> 0:09:28.600 saw last year as the Fed starts to raise rates. Well, 0:09:29.840 --> 0:09:41.200 I think that we're outside returns for the SMP five hundreds, 0:09:41.280 --> 0:09:47.000 So we would not suggest that that is it's going 0:09:47.080 --> 0:09:51.080 to be the norm. But we do have a very 0:09:51.160 --> 0:09:58.760 strong consumer, We have wages that are rising, and we 0:09:58.880 --> 0:10:05.880 have easy capital, even with the Federal Reserve raising rates, 0:10:06.400 --> 0:10:10.880 and so we think that that's gonna m bode well 0:10:11.040 --> 0:10:16.200 for both the consumer and corporate earn. So we really 0:10:16.240 --> 0:10:22.360 believe that we're looking at a twelve precent smp UM 0:10:22.400 --> 0:10:31.439 in two and maybe even nine. How about Tammy, I'm 0:10:31.440 --> 0:10:34.120 gonna go, by the way, what's that bad? That's awesome? 0:10:34.360 --> 0:10:36.120 That would be great. If that would really happen, that 0:10:36.120 --> 0:10:38.520 would be awesome. I think you know, Um, a lot 0:10:38.559 --> 0:10:40.480 of folks would take that, particularly after the last three 0:10:40.559 --> 0:10:43.200 years where we've had such outsize gains. Doesn't look as 0:10:43.200 --> 0:10:45.960 good if you take out seven for c p I. No, 0:10:46.080 --> 0:10:48.960 but I don't think I think we're gonna be seven 0:10:49.320 --> 0:10:52.560 cp I for very long. But who knows, we'll see Sammy, Tammy, 0:10:52.600 --> 0:10:55.840 I'd love to get your thoughts here on crypto because 0:10:56.000 --> 0:10:58.319 we get so many questions about that. And I wonder 0:10:58.360 --> 0:11:02.200 when one of your good clients calls you up and says, Tammy, 0:11:02.240 --> 0:11:04.200 what should I be doing with crypto? Should it be 0:11:04.240 --> 0:11:08.600 in my portfolio? How do you respond to that? Well, 0:11:09.160 --> 0:11:14.680 we don't advise on crypto at this point at ubs UM. 0:11:15.160 --> 0:11:19.560 It's still a big unknown for us. Even the term 0:11:19.600 --> 0:11:25.920 crypto has many different UM terms associated with it. UM. 0:11:25.960 --> 0:11:31.679 We do believe that perhaps the there will be a 0:11:31.760 --> 0:11:37.920 crypto market. We're certainly seeing it UM. I think coin 0:11:38.040 --> 0:11:44.840 base was UM reported as having gun and started to 0:11:45.000 --> 0:11:50.440 do alternatives in the crypto bocket UM options. So we 0:11:50.600 --> 0:11:55.320 think that it will exist. But it's just too speculative 0:11:55.400 --> 0:11:58.560 for us to get our owns around right now. I mean, man, 0:11:58.640 --> 0:12:01.000 you'd be super rich and with all your clients if 0:12:01.040 --> 0:12:04.200 you had been advising starting ten years ago. Is it 0:12:04.400 --> 0:12:07.720 something that you're increasingly think thinking about. Is it something 0:12:07.760 --> 0:12:11.720 that you know UBS financial advisors need to take a 0:12:11.760 --> 0:12:18.880 course on. Well, I think that we we are watching 0:12:18.960 --> 0:12:25.280 it very carefully and UM not to be argumentative, but 0:12:26.960 --> 0:12:29.000 we would have rich people if we got them in 0:12:29.080 --> 0:12:33.080 ten years ago. If we got them in twelve months ago, 0:12:33.840 --> 0:12:37.239 maybe they would have half as much money because it's 0:12:37.240 --> 0:12:41.079 still be super rich twelve months. Twelve months is pretty 0:12:41.080 --> 0:12:45.720 good for for bitcoin. I mean right now, um, you'd 0:12:45.720 --> 0:12:49.080 be looking at a rise over the last twelve months 0:12:49.080 --> 0:12:53.160 of about well not everybody's uh into this crypto thing 0:12:53.200 --> 0:12:55.520 like you've been on it since the beginning. All right, Tammy, 0:12:55.559 --> 0:12:57.280 thank you so much for joining us. Tammy, Hey, good 0:12:57.320 --> 0:13:05.720 financial advisor at GUBS giving thoughts on these markets. Let's 0:13:05.760 --> 0:13:10.320 bring in our next guest please, Isabel Winkles, CFO of Braves. 0:13:10.400 --> 0:13:13.640 That's a publicly traded company symbol b r z E 0:13:14.040 --> 0:13:16.840 about five point eight billion dollars in market cap. They 0:13:16.880 --> 0:13:19.559 are cloud based software company. Isabel, thanks so much for 0:13:19.640 --> 0:13:21.880 joining us. We're not going to ask any car questions, 0:13:22.280 --> 0:13:25.000 but we'd love to just start with talk to us 0:13:25.040 --> 0:13:27.280 about Brays. What do you guys do? Where do you 0:13:27.320 --> 0:13:31.080 fit into that technology stack? As it could say, yeah, 0:13:31.120 --> 0:13:33.720 thank you for having me so. Braise is a leading 0:13:33.880 --> 0:13:40.200 comprehensive customer engagement platform that powers interactions between consumers and 0:13:40.280 --> 0:13:43.800 the brands that they love. So with Braves, global brands 0:13:43.880 --> 0:13:50.240 can power contextually relevant, personalized cross channel campaign marketing campaigns 0:13:50.280 --> 0:13:54.560 that build lasting, high value relationships between these brands and 0:13:54.600 --> 0:13:57.160 their consumers. Hang on, I gotta get my millennial dictionary 0:13:57.160 --> 0:14:00.120 out here to understand what you're saying. Um. And also, oh, 0:14:00.320 --> 0:14:02.280 you know what, I only interact with brands that I 0:14:02.320 --> 0:14:05.079 hate for the most part on social media. Is that 0:14:05.160 --> 0:14:07.840 does that make me unusual? I usually reach for social 0:14:07.880 --> 0:14:11.040 media when somebody's really made me angry, typically in airline. 0:14:12.360 --> 0:14:15.200 That's funny. So you know, the brands that we are 0:14:15.440 --> 0:14:20.080 that that we service are really across multiple industries. We 0:14:20.160 --> 0:14:25.120 service brands UH in retail and e commerce, beyond demand space, media, 0:14:25.280 --> 0:14:28.600 entertainment and streaming. We're within the financial services sectors. Were 0:14:28.600 --> 0:14:32.880 incredibly broad. We service about it dozen different industries globally. Um. 0:14:33.120 --> 0:14:35.320 And so you know, it's less about the interactions that 0:14:35.360 --> 0:14:38.000 happen on social media and more about really the first 0:14:38.040 --> 0:14:42.560 party relationship that is built between yourself as a consumer 0:14:43.000 --> 0:14:45.760 and the individual brand that actually you want to develop 0:14:45.800 --> 0:14:49.400 a relationship with, and and you are willing to download 0:14:49.480 --> 0:14:52.360 that app stage on a mobile side, on a website, 0:14:52.600 --> 0:14:54.880 and you're actually hoping to to really get as much 0:14:54.880 --> 0:14:56.960 out of that brand as possible, and that brand wants 0:14:57.000 --> 0:15:00.600 to develop that through genuine relationship with you and need 0:15:00.720 --> 0:15:04.760 to message you in a way that fields relevant, actionable, 0:15:04.880 --> 0:15:08.840 personal and timely. So what kind of brands do you 0:15:08.960 --> 0:15:11.560 typically work with at Braise? I mean, I'd love to 0:15:11.560 --> 0:15:16.320 get a sense of just kind of like your typical client. Yeah. 0:15:16.360 --> 0:15:19.600 So again, you know, across a doten different industries, both 0:15:19.640 --> 0:15:22.640 in the US and outside the US. Of our revenue 0:15:22.680 --> 0:15:25.160 comes from outside the US. But maybe, um, you know, 0:15:25.200 --> 0:15:26.880 the best thing is to to sort of give you 0:15:26.960 --> 0:15:29.720 a customer example. UM, And I'll actually pick one that's 0:15:29.800 --> 0:15:33.080 kind of outside of the traditional kind of retail set sector, uh, 0:15:33.120 --> 0:15:35.400 and one that's outside the U S. So a company 0:15:35.440 --> 0:15:38.480 called Canvas. This is a software as a service company 0:15:38.520 --> 0:15:42.480 based in Sydney, Australia, and they actually offer online design 0:15:42.600 --> 0:15:45.400 and publishing platform UM. And their mission is really to 0:15:45.440 --> 0:15:48.080 empower everyone in the world to basically be able to 0:15:48.080 --> 0:15:52.160 design anything and publish their content anywhere. So they came 0:15:52.200 --> 0:15:53.920 to us and they bought Braise, and what they were 0:15:53.920 --> 0:15:57.160 really looking to do was just better support this vast 0:15:57.200 --> 0:15:59.360 design community around the world, and they wanted to be 0:15:59.360 --> 0:16:02.880 able to produce more targeted and helpful content to these 0:16:03.000 --> 0:16:05.240 to their various users. So they needed a way to 0:16:05.280 --> 0:16:08.360 reach millions of users across the globe with this more 0:16:08.360 --> 0:16:11.760 relevant information tailored to their local interests, and they needed 0:16:11.760 --> 0:16:15.160 to do it numerous languages. So as the Solution and 0:16:15.240 --> 0:16:18.840 Grace poward this, they executed an email campaign that actually 0:16:18.920 --> 0:16:23.640 increase their overall email distribution but actually managed to increase 0:16:23.720 --> 0:16:27.560 the overall UH click through rate and engagement rate UH. 0:16:27.600 --> 0:16:29.120 And they were able to do this in a way 0:16:29.160 --> 0:16:32.400 that targeted their users with highly relevant content. They were 0:16:32.440 --> 0:16:35.360 able to do it in multiple languages to be as 0:16:35.440 --> 0:16:38.160 relevant and applicable. And what that does is really make 0:16:38.240 --> 0:16:41.360 the end users feel like Canada is actually paying attention 0:16:41.560 --> 0:16:43.240 to what it is they want, what it is they 0:16:43.280 --> 0:16:45.800 need UH. And it helps to build that trust and 0:16:45.840 --> 0:16:50.160 that ongoing relationship and turns a casual user into potentially 0:16:50.200 --> 0:16:52.040 much more of an evangelist, which is really what the 0:16:52.080 --> 0:16:54.560 brands are looking to do over the long term. Yeah. Absolutely, 0:16:54.600 --> 0:16:56.440 it seems like it would take a lot of personnel. 0:16:56.880 --> 0:16:59.720 What kind of growth, UM, what kind of employee base 0:16:59.760 --> 0:17:04.200 are you looking at? So were our company has over 0:17:04.280 --> 0:17:07.120 a thousand employees UM, and you know we've been growing 0:17:07.359 --> 0:17:10.880 uh several hundred employee head counts year over year. Uh, 0:17:10.920 --> 0:17:14.040 and so our our growth has been material in terms 0:17:14.040 --> 0:17:15.800 of our top line. That's kind of batched our top 0:17:15.840 --> 0:17:18.600 line growth. We've been growing, you know north you can 0:17:18.600 --> 0:17:20.639 see our our most recent quarter. We were north of 0:17:20.680 --> 0:17:23.320 sixty year over year growth in the quarter. Um. The 0:17:23.320 --> 0:17:26.200 market opportunity that is ahead of us is just sumterial. 0:17:26.280 --> 0:17:29.000 We talked about a sixteen billion dollar ham in the 0:17:29.080 --> 0:17:32.120 US alone. That's a huge market opportunity. You know, we're 0:17:32.119 --> 0:17:34.040 a company that's sort of operating in sort of the 0:17:34.359 --> 0:17:37.359 you know, two hundred million dollar revenue range at the moment. 0:17:37.760 --> 0:17:40.960 There were so early in our ability to continue to 0:17:41.000 --> 0:17:44.439 penetrate the market. The growth opportunities material. Isabel, thanks so 0:17:44.520 --> 0:17:47.199 much for joining us and explaining Braise and what you do. 0:17:47.280 --> 0:17:50.159 Isabel winkles there. She is the chief financial officer of 0:17:50.240 --> 0:17:57.399 Brais ticker b r z E. Let's get over to 0:17:57.640 --> 0:18:00.520 another fan of four on the floor. Barrier Holts joins 0:18:00.600 --> 0:18:03.119 us right now. Bloomberg opinion columnist and the host of 0:18:03.200 --> 0:18:07.119 Masters of Business, the popular podcast, as well as a 0:18:07.160 --> 0:18:13.240 Bloomberg opinion columnist, and I probably most importantly, UM, you 0:18:13.320 --> 0:18:17.159 make calls on the market for clients. Barry and I 0:18:17.200 --> 0:18:20.240 wonder what your take is on the Fed path right now. 0:18:20.240 --> 0:18:24.960 It seems like consensus is that they're gonna taper, run 0:18:25.000 --> 0:18:28.080 off the balance sheet, and raise rates. And now we're 0:18:28.119 --> 0:18:33.000 hearing some people say Golden Sacks says four times, and um, 0:18:33.160 --> 0:18:35.960 Jim Bullard said, you know, yeah, maybe four times is right. 0:18:36.080 --> 0:18:39.000 But I've heard a few contrarians out there say, you 0:18:39.080 --> 0:18:41.200 know what, as soon as we get a twenty percent correction, 0:18:41.240 --> 0:18:44.399 as soon as the market dies by percent or thirty percent, 0:18:44.440 --> 0:18:46.560 you're gonna get the plunge protection team coming back to 0:18:46.560 --> 0:18:49.640 save us. What do you think? So, first, the plunge 0:18:49.680 --> 0:18:53.920 protection team has done a pretty terrible job, assuming they 0:18:53.920 --> 0:18:57.600 exist in assuming that's their job description. We went through 0:18:57.600 --> 0:19:01.879 a thirty four percent crash, in a fifty seven percent 0:19:01.960 --> 0:19:05.320 crash in o eight oh nine. I was just looking 0:19:05.440 --> 0:19:09.240 at peak to trough. Nasdaq fell eighty two point nine 0:19:10.000 --> 0:19:13.600 from the peak in March two thousand to the lows 0:19:13.680 --> 0:19:18.040 in October oh two. I'm not saying these guys are 0:19:18.119 --> 0:19:22.000 bad at their jobs, but really, how you know, at 0:19:22.040 --> 0:19:27.360 what point does it become clear that they don't do 0:19:27.400 --> 0:19:29.520 what they're supposed to do? This they're supposed to be 0:19:29.600 --> 0:19:33.920 liquidity and the system is supposed to function, but their 0:19:34.000 --> 0:19:37.760 role isn't to stop markets from rolling over and ps. 0:19:37.800 --> 0:19:40.760 I don't know if you've noticed, but this is a 0:19:40.800 --> 0:19:46.200 pretty hot economy. This is a pretty strong economy. I'm 0:19:46.240 --> 0:19:49.440 My contrarian take is the world will be fine if 0:19:49.440 --> 0:19:52.840 there are four increases that bring us up to boo 0:19:52.880 --> 0:19:57.200 hoo one percent, FED funds rates well and running off 0:19:57.200 --> 0:20:00.800 the balance sheet. I mean muhammaday arian Um says he's 0:20:00.800 --> 0:20:02.560 been saying for a long time, there behind the curve, 0:20:02.640 --> 0:20:05.840 but he likens this to a football team that is 0:20:05.880 --> 0:20:08.359 behind with two minutes to go and has to all 0:20:08.400 --> 0:20:10.879 of a sudden hurry up on their offense with maybe 0:20:10.880 --> 0:20:14.240 a Hail Mary for the touchdown, but also maybe throwing 0:20:14.280 --> 0:20:17.200 an interception or fumbling the ball. Yeah, I'm a I'm 0:20:17.240 --> 0:20:21.000 a fan of muhammadalarians, but that's a terrible metaphor. A 0:20:21.040 --> 0:20:23.640 football game has sixty minutes and then the clock ends. 0:20:24.160 --> 0:20:28.600 Last I checked, the duration of the FED balance sheets 0:20:28.880 --> 0:20:32.919 is until the sun explodes in seven billion years. So 0:20:33.080 --> 0:20:36.320 I think we're not in the two minute warning. If 0:20:36.359 --> 0:20:40.000 you think they're behind the curve, meaning inflation has gotten 0:20:40.040 --> 0:20:43.360 away from them, and you ignore all of the supply 0:20:43.560 --> 0:20:48.160 chain issues. Uh, maybe you can make the case that 0:20:48.240 --> 0:20:52.280 they should have been raising earlier. I don't really see 0:20:52.320 --> 0:20:56.040 what the problem is getting off of this emergency footing 0:20:56.640 --> 0:21:00.880 and onto a more normal rate regime. Money is not 0:21:00.960 --> 0:21:04.720 supposed to be free, borrowing capital is not supposed to 0:21:04.760 --> 0:21:08.760 be zero, and you know, the US running a GDP 0:21:08.960 --> 0:21:13.080 higher than China, that's not supposed to happen. So just 0:21:13.200 --> 0:21:16.159 taking us to normal isn't isn't the worst thing in 0:21:16.200 --> 0:21:20.840 the world. So how should your client's position their portfolios 0:21:20.920 --> 0:21:25.320 barry in what will be an environment where rates will 0:21:25.400 --> 0:21:30.040 be rising the short the intermediate term at least. How 0:21:30.040 --> 0:21:32.760 do you think about that? So you you have to 0:21:32.960 --> 0:21:36.000 understand why you have fixed income in your portfolio for 0:21:36.040 --> 0:21:39.959 the past couple of years. Uh, it hasn't been for yield. 0:21:40.000 --> 0:21:44.240 It's been for balance that is less volatile than equities. Uh. 0:21:44.280 --> 0:21:47.240 There are a handful of exceptions to that, like tips 0:21:47.280 --> 0:21:51.280 have done very very well. The Treasury inflation protected bonds, 0:21:51.280 --> 0:21:54.159 which are part of our fixed income portfolios, have had 0:21:54.200 --> 0:21:57.000 a great couple of years and probably are are going 0:21:57.040 --> 0:22:00.760 to do pretty well for the next few quarters or beyond. 0:22:01.520 --> 0:22:04.320 But you know, we don't see any of the usual 0:22:04.359 --> 0:22:07.760 signs that suggest this economic cycle is coming to an end, 0:22:08.320 --> 0:22:12.040 or that the markets are you know, excessively valued or 0:22:12.040 --> 0:22:14.639 a long in the tooth. I've been hearing for a 0:22:14.840 --> 0:22:18.879 decade since you know, two thousand and ten eleven, lower 0:22:18.880 --> 0:22:23.000 your return of expectations. Hey, eventually that'll be good advice. 0:22:23.080 --> 0:22:27.480 But it's been eleven years of of thirteen percent a year. 0:22:27.600 --> 0:22:31.480 That's a tremendous, tremendous run. And then you add in dividends, 0:22:31.520 --> 0:22:36.000 it's even better. We don't see any signs that the 0:22:36.080 --> 0:22:40.479 trend is about to end anytime soon. It's been you know, 0:22:40.600 --> 0:22:42.560 it's been a fool's error and trying to guess when 0:22:43.119 --> 0:22:45.960 the underlying trend in the market UH is going to 0:22:46.040 --> 0:22:47.640 come to. By the way, you should do a column 0:22:47.640 --> 0:22:49.800 on the things you hear at the beginning of every year. 0:22:50.359 --> 0:22:53.240 At the beginning of every year, it's gonna be UH 0:22:53.359 --> 0:22:57.359 stockpickers market active, is gonna trounce passive. There's gonna be 0:22:57.359 --> 0:23:02.080 a rotation into value overgrow oath um. Just starting to 0:23:02.119 --> 0:23:06.440 see that value rotation. Cliff Fastness just was quoted in Bloomberg. Hey, 0:23:06.480 --> 0:23:08.879 it's a little early to to take a victory lap. 0:23:08.880 --> 0:23:11.600 But we're seeing we're starting to see that so at 0:23:11.640 --> 0:23:16.080 least that it appears to be coming true. The the 0:23:16.119 --> 0:23:19.080 stockpickers market. We we've been hearing there for a long time. 0:23:19.960 --> 0:23:22.560 I don't know if you've noticed, but last year, the 0:23:22.800 --> 0:23:25.840 which was also supposed to be a stockpickers market, they 0:23:25.920 --> 0:23:29.800 underperformed the SMP five hundred five four hundred basis points 0:23:30.280 --> 0:23:32.119 unless you want to include dividends, and then it was 0:23:32.160 --> 0:23:37.080 over five basis not not. Last year was not a 0:23:37.080 --> 0:23:38.840 stock pick You know what you I've been hearing the 0:23:38.920 --> 0:23:41.520 last couple of years is Europe is going to be 0:23:41.560 --> 0:23:43.520 the place to be. It's trading at such a huge 0:23:43.560 --> 0:23:48.520 discount to the US, and now it's the continents time 0:23:48.600 --> 0:23:52.359