1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,040 Speaker 1: and of course on the Bloomberg Terminal. Right now, in 6 00:00:30,080 --> 00:00:32,800 Speaker 1: Oil with a global view on what we've witnessed with 7 00:00:32,880 --> 00:00:35,559 Speaker 1: cyber attacks in the United States, Amrita send joins US 8 00:00:35,960 --> 00:00:40,680 Speaker 1: Energy Aspects Director of Research in chief Oil Analysts Emery Day. 9 00:00:40,680 --> 00:00:44,680 Speaker 1: If as you look at the distribution of hydro carbons worldwide, 10 00:00:45,240 --> 00:00:51,440 Speaker 1: how vulnerable are they to a cyber attack? Well, in 11 00:00:51,560 --> 00:00:55,680 Speaker 1: great question, I would say pretty much everywhere. More and more, 12 00:00:55,720 --> 00:00:58,560 Speaker 1: I think everybody is. I mean, the Colonial pipeline is 13 00:00:58,840 --> 00:01:01,520 Speaker 1: a great example, but look at the Middleast, a lot 14 00:01:01,560 --> 00:01:05,319 Speaker 1: of even up kick to that matter, there were elements 15 00:01:05,760 --> 00:01:09,000 Speaker 1: um of kind of cyber attacks involved in that, but 16 00:01:09,080 --> 00:01:12,120 Speaker 1: even more recently within the Middle East you do get 17 00:01:12,160 --> 00:01:17,440 Speaker 1: a lot of infrastructure um, not necessarily disruptions, but targets 18 00:01:18,000 --> 00:01:19,959 Speaker 1: um And I think this is just the new normal. 19 00:01:20,240 --> 00:01:23,200 Speaker 1: There are more and more companies spending on this and 20 00:01:23,319 --> 00:01:25,360 Speaker 1: it just needs to get higher from here, because you 21 00:01:25,400 --> 00:01:29,520 Speaker 1: know it's not the warfedge generally is changing. The landscapes 22 00:01:29,560 --> 00:01:32,760 Speaker 1: completely changed. I mean in Malaysia they're they're doing a 23 00:01:32,840 --> 00:01:36,920 Speaker 1: twenty four mile thirty mile key pipeline having to do 24 00:01:37,000 --> 00:01:39,240 Speaker 1: with the distribution. I believe it's up the west coast 25 00:01:39,280 --> 00:01:42,679 Speaker 1: of Malaysia. How many spots do you perceive to be 26 00:01:42,880 --> 00:01:47,440 Speaker 1: out there like the colonial pipeline worldwide? Is it ten 27 00:01:47,480 --> 00:01:52,360 Speaker 1: other hot spots or is it hundreds? It's gonna be hundreds, 28 00:01:52,400 --> 00:01:54,520 Speaker 1: because if you think about the distribution, I mean, if 29 00:01:54,720 --> 00:01:57,720 Speaker 1: if you're really going down that route, you're talking about 30 00:01:57,880 --> 00:02:02,120 Speaker 1: a huge distribution or pipeline net works within China, within India, 31 00:02:02,160 --> 00:02:04,840 Speaker 1: even Europe. Europe has a huge network both for crew 32 00:02:04,880 --> 00:02:08,000 Speaker 1: down for products. Looking more broadly then and racon when 33 00:02:08,000 --> 00:02:09,760 Speaker 1: way to talk to any one of the commodity market. 34 00:02:09,919 --> 00:02:13,280 Speaker 1: Right now, they're not concerned about this colonial pipeline shut down. 35 00:02:13,320 --> 00:02:15,520 Speaker 1: There's just a belief that will adjust, it will come 36 00:02:15,520 --> 00:02:17,840 Speaker 1: back online and will get back to normal. Any aspects 37 00:02:17,840 --> 00:02:21,960 Speaker 1: of the infrastructure, the distribution in America, the transportation of 38 00:02:22,080 --> 00:02:27,120 Speaker 1: energy that you would be concerned about, No, I mean 39 00:02:27,160 --> 00:02:29,520 Speaker 1: not right now, and not the scale at which this 40 00:02:29,560 --> 00:02:32,520 Speaker 1: attack has happened. I do agree with what you just said. 41 00:02:32,520 --> 00:02:35,520 Speaker 1: I think the pipeline and just generally everything should be 42 00:02:35,520 --> 00:02:38,160 Speaker 1: back up and running in about three to five days. 43 00:02:38,240 --> 00:02:41,080 Speaker 1: But you don't never say never. This is it's definitely 44 00:02:41,160 --> 00:02:44,639 Speaker 1: unprecedented in the scale at at which is happening, So 45 00:02:45,320 --> 00:02:49,240 Speaker 1: it will require coordination from various government bodies and that 46 00:02:49,320 --> 00:02:52,320 Speaker 1: can take some time. Um. I don't think there's going 47 00:02:52,360 --> 00:02:53,880 Speaker 1: to be more and I think after this attack, I 48 00:02:54,200 --> 00:02:57,640 Speaker 1: do think a lot of US networks natural gas as well. 49 00:02:57,720 --> 00:03:00,440 Speaker 1: Let's not forget that they will probably tight and up 50 00:03:00,520 --> 00:03:03,359 Speaker 1: what they can do to protect their networks going forward. 51 00:03:03,400 --> 00:03:05,000 Speaker 1: I'm ready to coming forward from here build on the 52 00:03:05,000 --> 00:03:07,160 Speaker 1: other issues surrounding the old market. Right now, we've talked 53 00:03:07,160 --> 00:03:09,520 Speaker 1: a ton about supply, let's talk about it a little 54 00:03:09,520 --> 00:03:12,240 Speaker 1: bit more out if Iran can we open things up 55 00:03:12,240 --> 00:03:14,320 Speaker 1: a little bit more. What the negotiations look like. If 56 00:03:14,360 --> 00:03:16,840 Speaker 1: you said twelve eighteen months ago that we'd have a 57 00:03:16,840 --> 00:03:20,720 Speaker 1: president Joe Biden, a democratic sweep, we'd be talking potentially 58 00:03:20,760 --> 00:03:23,320 Speaker 1: about loosening things up with Iran, and we still having 59 00:03:23,360 --> 00:03:27,919 Speaker 1: that discussion. Yeah, we are, and you know we've always 60 00:03:27,960 --> 00:03:30,760 Speaker 1: said that we're expecting some kind of a breakthrough over 61 00:03:31,160 --> 00:03:33,680 Speaker 1: kind of April and May and then sanctions relieved by July. 62 00:03:33,840 --> 00:03:37,160 Speaker 1: I will say, however, talks are progressing, but progressing probably 63 00:03:37,160 --> 00:03:41,200 Speaker 1: a bit slower than we've been expecting. No, no major changes. 64 00:03:41,280 --> 00:03:43,760 Speaker 1: But the thing I will warn is that everybody is 65 00:03:43,800 --> 00:03:46,960 Speaker 1: expecting a deal in the coming weeks and then sanctions 66 00:03:46,960 --> 00:03:50,760 Speaker 1: relief over Q three UM. But if there isn't a 67 00:03:50,800 --> 00:03:53,320 Speaker 1: deal before they are in an elections, which are next month, 68 00:03:53,720 --> 00:03:56,440 Speaker 1: that's the thing to watch out for because then it 69 00:03:56,520 --> 00:03:59,680 Speaker 1: could get dragged on and then the deal becomes a 70 00:04:00,240 --> 00:04:02,560 Speaker 1: twenty two story. I don't think that's in the price 71 00:04:02,600 --> 00:04:06,040 Speaker 1: at all. What is the link em right up that 72 00:04:06,200 --> 00:04:09,480 Speaker 1: you see between oil is a huge weighting of c 73 00:04:09,760 --> 00:04:13,840 Speaker 1: RB or the Bloomberg Commodity Index with all the other commodities. 74 00:04:13,920 --> 00:04:18,359 Speaker 1: They don't trade and lack step do they No, not 75 00:04:18,480 --> 00:04:20,240 Speaker 1: at all. And I mean if you you guys were 76 00:04:20,240 --> 00:04:22,400 Speaker 1: saying as well, just s and B it recordized. But 77 00:04:22,400 --> 00:04:25,360 Speaker 1: if you look at metals, metals markets are soaring, and 78 00:04:25,400 --> 00:04:28,160 Speaker 1: you know oil oil has been a very strong performance 79 00:04:28,160 --> 00:04:32,000 Speaker 1: this year, but still hasn't been um as a strong 80 00:04:32,040 --> 00:04:34,719 Speaker 1: as some of the other commodities and part of that 81 00:04:34,880 --> 00:04:38,279 Speaker 1: is because you know, transportation was the worst hit during COVID. 82 00:04:38,520 --> 00:04:41,080 Speaker 1: It is coming back, but it's not fully back yet. 83 00:04:41,400 --> 00:04:44,320 Speaker 1: But there's also so much kind of talks around working 84 00:04:44,360 --> 00:04:46,360 Speaker 1: from home, how much are we going to lose permanently 85 00:04:46,360 --> 00:04:48,160 Speaker 1: for oil demand? But I mean, I will say, there's 86 00:04:48,160 --> 00:04:51,839 Speaker 1: all the data we're getting right now. Personal incomes are 87 00:04:51,960 --> 00:04:54,359 Speaker 1: back at pre COVID levels, and many many parts of 88 00:04:54,360 --> 00:04:56,719 Speaker 1: the world. I think the summer is going to be huge. 89 00:04:56,800 --> 00:04:59,080 Speaker 1: People are going to spend, and the bounce back in 90 00:04:59,160 --> 00:05:02,240 Speaker 1: oil demand it's probably going to be significantly more than 91 00:05:02,279 --> 00:05:04,680 Speaker 1: people have been expecting. That is the line that Jeff 92 00:05:04,680 --> 00:05:06,720 Speaker 1: carry A government is pushing too. I'm Reachel, it sounds 93 00:05:06,720 --> 00:05:08,160 Speaker 1: like you're on the same page. It's gonna hear from you. 94 00:05:08,200 --> 00:05:16,799 Speaker 1: I'm ready to send their energy aspects. We're talking about 95 00:05:16,800 --> 00:05:20,000 Speaker 1: this huge environmental transition on top of a demand boom. 96 00:05:20,040 --> 00:05:22,960 Speaker 1: Two pins some of that as well. So the traditional 97 00:05:23,000 --> 00:05:25,359 Speaker 1: sychnical rate that you might get from copper it's a 98 00:05:25,400 --> 00:05:28,480 Speaker 1: little bit distorted this time around, given the political environment 99 00:05:28,480 --> 00:05:30,600 Speaker 1: that we're in at the moment. The clear message of 100 00:05:30,640 --> 00:05:33,200 Speaker 1: two thousand twenty one being different from two thousand two 101 00:05:33,240 --> 00:05:36,320 Speaker 1: from Mr curry at Golden Saxon. That has always been 102 00:05:36,360 --> 00:05:39,480 Speaker 1: a consistent theme with Ian Bremer of Eurasia Group, whose 103 00:05:39,480 --> 00:05:42,200 Speaker 1: books are too many to mention. I can pick one 104 00:05:42,240 --> 00:05:44,120 Speaker 1: of them, one of their titles and say it is 105 00:05:44,160 --> 00:05:47,480 Speaker 1: also about this moment. We welcome Dr Bremer this morning 106 00:05:47,760 --> 00:05:51,440 Speaker 1: as we speak of every nation for itself. Dr Bremmer, 107 00:05:51,520 --> 00:05:57,200 Speaker 1: once again, food dynamics. Rice in Cambodia really matters rice 108 00:05:57,360 --> 00:06:00,800 Speaker 1: in America less. So what does the food dynamic that 109 00:06:00,920 --> 00:06:05,240 Speaker 1: you observe a this commodity lift. It just tells me 110 00:06:05,680 --> 00:06:09,440 Speaker 1: that the gap between rich and four countries on the 111 00:06:09,480 --> 00:06:13,120 Speaker 1: back of the pandemic and the rebound from the pandemic 112 00:06:13,560 --> 00:06:18,360 Speaker 1: is being felt so so greatly differently. Um, you know 113 00:06:18,640 --> 00:06:23,440 Speaker 1: this is UH that you already have UH before the pandemic. 114 00:06:23,520 --> 00:06:26,360 Speaker 1: Yet about a quarter, for example, of everyone in Yemen 115 00:06:26,480 --> 00:06:28,840 Speaker 1: being food stressed, not being able to have enough to eat, 116 00:06:29,080 --> 00:06:32,640 Speaker 1: and Sudan numbers are similar. Those numbers are doubling on 117 00:06:32,760 --> 00:06:35,479 Speaker 1: the back of the pandemic right now. One of the 118 00:06:35,600 --> 00:06:39,480 Speaker 1: one of the most disheartening statistics that was indirect from 119 00:06:39,520 --> 00:06:42,400 Speaker 1: the pandemic was the fact that we had an increase 120 00:06:42,400 --> 00:06:46,080 Speaker 1: of fifty million of extreme four people around the world. 121 00:06:46,160 --> 00:06:48,760 Speaker 1: The first time that number has gone up UM in 122 00:06:49,000 --> 00:06:52,479 Speaker 1: well over uh in generations. It's like forty years since 123 00:06:52,480 --> 00:06:55,720 Speaker 1: that numbers increased year on year. That's that's that's you know, 124 00:06:56,279 --> 00:06:59,200 Speaker 1: that means food insecurity, that's first and foremost the most 125 00:06:59,240 --> 00:07:01,720 Speaker 1: important things to be that kid. And you're gonna see 126 00:07:01,720 --> 00:07:03,360 Speaker 1: that play out in so many of these contries with 127 00:07:03,480 --> 00:07:05,880 Speaker 1: these prices have gone up and the people, the governments 128 00:07:05,880 --> 00:07:09,400 Speaker 1: don't have any capacity to provide support. And I'm sure 129 00:07:09,400 --> 00:07:12,760 Speaker 1: you saw Arama Chander Gua's magnificent essay and the ft 130 00:07:12,920 --> 00:07:15,840 Speaker 1: I'm gonna say ten days ago about the collapse of 131 00:07:15,960 --> 00:07:18,560 Speaker 1: his India. Do you eurise your group? Look at this 132 00:07:18,640 --> 00:07:23,240 Speaker 1: pandemic and the horrific news from India is being politically 133 00:07:23,640 --> 00:07:29,240 Speaker 1: and your Aisia group destabilizing for the region. Um, It's 134 00:07:29,320 --> 00:07:33,679 Speaker 1: it's not destabilizing inside India. You know on India's Prime 135 00:07:33,680 --> 00:07:39,280 Speaker 1: Minister Modi, despite having incredibly badly mishandled the last wave 136 00:07:39,400 --> 00:07:44,160 Speaker 1: of this crisis, um is still um. You know, the 137 00:07:44,200 --> 00:07:47,200 Speaker 1: popularity base that he had was higher coming in that 138 00:07:47,360 --> 00:07:49,720 Speaker 1: of any other major leader. So he has a long 139 00:07:49,760 --> 00:07:53,000 Speaker 1: way to go Before you talk about domestic instability domestic 140 00:07:53,760 --> 00:07:56,840 Speaker 1: opposition would have a long way to strengthen before they 141 00:07:56,880 --> 00:08:00,400 Speaker 1: could be cohesive and and really pose a chat olenge 142 00:08:00,440 --> 00:08:03,640 Speaker 1: to him. But but there's no question that when you 143 00:08:03,680 --> 00:08:07,480 Speaker 1: see the India variant spreading as much as it is 144 00:08:07,720 --> 00:08:11,080 Speaker 1: across Southeast Asia. Now, when you see the fact that 145 00:08:11,120 --> 00:08:15,320 Speaker 1: the Indians, who have been the largest producers of vaccines 146 00:08:15,440 --> 00:08:19,240 Speaker 1: around the world, and now they have massive shortages inside 147 00:08:19,240 --> 00:08:23,120 Speaker 1: their own country, they've had to suspend all export. Most 148 00:08:23,200 --> 00:08:27,040 Speaker 1: of that export was going to other countries in the region. 149 00:08:27,400 --> 00:08:31,960 Speaker 1: So this is now where the broader epicenter of coronavirus 150 00:08:32,000 --> 00:08:35,240 Speaker 1: crisis is. It's India, but it's also South and Southeast Asia. 151 00:08:35,480 --> 00:08:37,320 Speaker 1: It's also the region that's going to have some of 152 00:08:37,360 --> 00:08:41,520 Speaker 1: the least capacity to actually fight it. And and by 153 00:08:41,559 --> 00:08:45,200 Speaker 1: the way, um, the the India based and Chinese based 154 00:08:45,280 --> 00:08:47,960 Speaker 1: vaccines aren't as effective as the m R and A vaccines. 155 00:08:47,960 --> 00:08:51,720 Speaker 1: And I saw some extremely disturbing UH news. I don't 156 00:08:51,720 --> 00:08:54,720 Speaker 1: know if you noticed this from the Seychells say Shells 157 00:08:54,760 --> 00:08:57,720 Speaker 1: has had more vaccine rollout than any other country in 158 00:08:57,760 --> 00:09:01,280 Speaker 1: the world for their small population. They now also have 159 00:09:02,000 --> 00:09:06,199 Speaker 1: more human to humans spread per capita in cases new 160 00:09:06,240 --> 00:09:11,240 Speaker 1: cases than India. That's astonishing, and that's because most of 161 00:09:11,240 --> 00:09:15,480 Speaker 1: the vaccines are are coming from coming from China and 162 00:09:15,520 --> 00:09:18,480 Speaker 1: they don't have the efficacy in stopping spread. That's again 163 00:09:18,559 --> 00:09:22,360 Speaker 1: a serious problem for the developing world right now, largely 164 00:09:22,480 --> 00:09:25,880 Speaker 1: isn't about Madearna Advisor, which is much more efficacy. So yeah, 165 00:09:26,120 --> 00:09:28,400 Speaker 1: I'm actually quite worried about what this is gonna look 166 00:09:28,440 --> 00:09:30,120 Speaker 1: like over the coming month. How the West can have 167 00:09:30,320 --> 00:09:32,040 Speaker 1: that's the big question right now, and I've got to 168 00:09:32,040 --> 00:09:33,880 Speaker 1: say the answer to that question is so in some 169 00:09:33,880 --> 00:09:36,440 Speaker 1: real division between Europe and the United States at the moment, 170 00:09:36,679 --> 00:09:39,600 Speaker 1: the US, as you know, in trying to suspend IP 171 00:09:39,600 --> 00:09:41,520 Speaker 1: protection at least trying to push that issue through the 172 00:09:41,679 --> 00:09:44,160 Speaker 1: w c O, and then you've got Europe turning around 173 00:09:44,160 --> 00:09:46,079 Speaker 1: and saying, well, we don't think that's going to help. 174 00:09:46,240 --> 00:09:49,360 Speaker 1: Germany is looking at the United States for holding vaccines 175 00:09:49,360 --> 00:09:51,160 Speaker 1: and not exporting them. What did you make of the 176 00:09:51,240 --> 00:09:54,280 Speaker 1: U S decision last week? And without bringing the allies 177 00:09:54,320 --> 00:09:56,800 Speaker 1: on board, because this is playing out quite publicly, and 178 00:09:56,800 --> 00:09:59,360 Speaker 1: it did so through the weekend. Yeah, this is playing 179 00:09:59,360 --> 00:10:01,640 Speaker 1: out publicly. But you know the funny thing, first of all, 180 00:10:01,720 --> 00:10:04,440 Speaker 1: I mean the German response, um that this is not 181 00:10:04,520 --> 00:10:06,560 Speaker 1: the way to actually provide help in the near term. 182 00:10:06,760 --> 00:10:08,680 Speaker 1: That's true. I mean it would take a very long time. 183 00:10:08,679 --> 00:10:10,800 Speaker 1: We're talking about not just weeks or months with his 184 00:10:11,000 --> 00:10:13,760 Speaker 1: urgent need right now, but but a year or more 185 00:10:14,320 --> 00:10:17,040 Speaker 1: to get the kind of manufacturing capacity that would be 186 00:10:17,080 --> 00:10:19,600 Speaker 1: aligned with just opening up the patent. So it's it's 187 00:10:19,640 --> 00:10:23,720 Speaker 1: important symbolically um for a lot of progressives in the 188 00:10:23,760 --> 00:10:27,080 Speaker 1: Democratic Party, and Biden will will benefit from that. But 189 00:10:27,160 --> 00:10:29,160 Speaker 1: this isn't what's going to move the needle for the 190 00:10:29,200 --> 00:10:32,520 Speaker 1: problem that we just talked about. The big issue is 191 00:10:32,559 --> 00:10:35,840 Speaker 1: that here's a Biden administration trying to do the right 192 00:10:35,920 --> 00:10:40,400 Speaker 1: thing and not coordinating with allies in advance. That's the mistake. 193 00:10:40,400 --> 00:10:43,960 Speaker 1: It feels just like the announcement to leave Afghanistan. I mean, 194 00:10:44,000 --> 00:10:47,040 Speaker 1: when your allies are absolutely critical, you shouldn't be in 195 00:10:47,080 --> 00:10:50,200 Speaker 1: a position where the German government, where the EU is 196 00:10:50,240 --> 00:10:54,560 Speaker 1: caught blindsided by you saying you're gonna suspend IP protection. 197 00:10:54,800 --> 00:10:57,880 Speaker 1: The Americans in talking about helping the rest of the 198 00:10:57,920 --> 00:11:01,760 Speaker 1: world in terms of this endemic, we need to be 199 00:11:01,840 --> 00:11:05,240 Speaker 1: talking in advance of our announcements with all of the 200 00:11:05,320 --> 00:11:07,960 Speaker 1: key allies. It's such an easy thing to do. The 201 00:11:08,000 --> 00:11:10,760 Speaker 1: Biden team should be good at this. This is where 202 00:11:10,760 --> 00:11:16,680 Speaker 1: they're following. Um. I think because they're used to do. 203 00:11:16,800 --> 00:11:19,520 Speaker 1: These are experienced men and women that have been around 204 00:11:19,600 --> 00:11:24,120 Speaker 1: foreign policy establishment for decades and for them, UM, you know, 205 00:11:24,240 --> 00:11:27,520 Speaker 1: multilateralism means the United States does the right thing and 206 00:11:27,520 --> 00:11:30,959 Speaker 1: other allies just go along with us. It doesn't mean 207 00:11:31,000 --> 00:11:33,800 Speaker 1: that we actually might be wrong or might have to compromise. 208 00:11:34,080 --> 00:11:36,880 Speaker 1: Because we've been a position of such strength and because 209 00:11:36,920 --> 00:11:40,240 Speaker 1: the alliance itself has been so much more cohesive. That's 210 00:11:40,280 --> 00:11:42,760 Speaker 1: not as true today. Part of that has been four 211 00:11:42,840 --> 00:11:44,959 Speaker 1: years in the Trump administration, but part of that is 212 00:11:45,000 --> 00:11:47,839 Speaker 1: just Europe itself is moving in a different direction. There. 213 00:11:47,880 --> 00:11:51,199 Speaker 1: Their feeling of their social contract, their feeling of the 214 00:11:51,480 --> 00:11:55,880 Speaker 1: effectiveness of their representative democracy, UM, just is different than 215 00:11:55,960 --> 00:11:57,880 Speaker 1: that of the United States right now, and I think 216 00:11:57,880 --> 00:12:00,839 Speaker 1: we're living that experience a firm or your top risks 217 00:12:00,920 --> 00:12:03,400 Speaker 1: of two thousand twenty one, you have been out front 218 00:12:03,440 --> 00:12:06,240 Speaker 1: and saying we have to pay attention to cyber. You 219 00:12:06,320 --> 00:12:10,080 Speaker 1: talk about a cyber tipping point in January, and here 220 00:12:10,080 --> 00:12:13,040 Speaker 1: we are talking about it for real with this pipeline 221 00:12:13,080 --> 00:12:16,440 Speaker 1: across the nation. Give us an update on the tipping point, 222 00:12:16,520 --> 00:12:19,600 Speaker 1: you see. Yeah, I mean the funny thing is, I 223 00:12:19,640 --> 00:12:22,480 Speaker 1: don't think the tipping point is between the US and Russia, 224 00:12:22,640 --> 00:12:25,640 Speaker 1: between the US and China, because there is a level 225 00:12:25,720 --> 00:12:30,040 Speaker 1: of deterrence on cyber attacks between those countries. We do 226 00:12:30,200 --> 00:12:34,240 Speaker 1: espionage against them, they do espionage against us. We use 227 00:12:34,320 --> 00:12:36,480 Speaker 1: the data in ways that are useful for US, but 228 00:12:36,559 --> 00:12:39,000 Speaker 1: we don't break things. We don't go in and and 229 00:12:39,040 --> 00:12:42,000 Speaker 1: destroy critical infrastructure. We don't take the kind of actions 230 00:12:42,040 --> 00:12:46,600 Speaker 1: that could precipitate a kinetic response a hot war where 231 00:12:47,040 --> 00:12:50,120 Speaker 1: when you the problem is unlike news where you had 232 00:12:50,160 --> 00:12:52,640 Speaker 1: that nuclear balance, but those were only the the only 233 00:12:52,679 --> 00:12:56,200 Speaker 1: countries that had that capacity in the Cold War. Um 234 00:12:56,240 --> 00:12:59,800 Speaker 1: in the case of cyber you know, we stop the 235 00:13:00,080 --> 00:13:03,000 Speaker 1: audience from developing News were trying to get back into 236 00:13:03,000 --> 00:13:04,920 Speaker 1: a deal to do that. We haven't stopped them from 237 00:13:04,920 --> 00:13:08,319 Speaker 1: developing some of the world's most effective offensive cyber capabilities. 238 00:13:08,600 --> 00:13:12,760 Speaker 1: Criminal networks in Russia and Eastern Europe, in the United States, 239 00:13:12,800 --> 00:13:19,440 Speaker 1: around the world have incredibly sophisticated cyber capacity to destroy things. 240 00:13:19,840 --> 00:13:23,920 Speaker 1: And we see that with the smash and grab both 241 00:13:24,040 --> 00:13:28,280 Speaker 1: on the data of this critical pipeline over the weekend, 242 00:13:28,920 --> 00:13:32,439 Speaker 1: but also in the in the the ransomware attack to 243 00:13:32,559 --> 00:13:36,200 Speaker 1: shut them down. UM, and you know, we just don't 244 00:13:36,240 --> 00:13:40,800 Speaker 1: have cyber defenses to deal with this. I was I've 245 00:13:41,000 --> 00:13:44,079 Speaker 1: particularly worried that they were going to shut down hospitals 246 00:13:44,600 --> 00:13:47,160 Speaker 1: UM in the middle of vaccine rollout. You know, in 247 00:13:47,160 --> 00:13:49,520 Speaker 1: the early days, that was something they were clearly capable 248 00:13:49,559 --> 00:13:52,600 Speaker 1: of doing, these these criminal networks, and thankfully for us, 249 00:13:52,640 --> 00:13:57,360 Speaker 1: they didn't. But the vulnerabilities massive and it's gonna catch 250 00:13:58,679 --> 00:14:06,360 Speaker 1: he writes, A great president and found a let's brink in. 251 00:14:06,440 --> 00:14:08,840 Speaker 1: Jared woods Champ, we thank for America Securities, Head of 252 00:14:08,920 --> 00:14:11,920 Speaker 1: Research Investment Committee. Can we just start with the supply 253 00:14:12,080 --> 00:14:15,440 Speaker 1: side at the moment, Jared, whether it's the Colonial pipeline 254 00:14:15,440 --> 00:14:17,920 Speaker 1: and the issues there, we can solve them with higher prices. 255 00:14:17,960 --> 00:14:20,520 Speaker 1: If you want to import some gasoline from Europe, if 256 00:14:20,560 --> 00:14:23,320 Speaker 1: it's the labor market shortage, you can hire, put up wages. 257 00:14:23,560 --> 00:14:25,560 Speaker 1: What do you see in that dynamic on the supply side. 258 00:14:25,560 --> 00:14:29,520 Speaker 1: Can it all be addressed with higher prices? Well, some 259 00:14:29,600 --> 00:14:31,160 Speaker 1: of it can be addressed, not all of it. I 260 00:14:31,160 --> 00:14:33,440 Speaker 1: mean semi conductors is the big one. I think that's 261 00:14:33,760 --> 00:14:37,520 Speaker 1: that's an affected even the labor market possibly, uh in 262 00:14:37,840 --> 00:14:40,200 Speaker 1: that latest report, and something is going to take a 263 00:14:40,240 --> 00:14:42,520 Speaker 1: little while to sort out as far as we can tell. UM. 264 00:14:42,560 --> 00:14:45,600 Speaker 1: But it's also not, you know, a sort of catastrophe. 265 00:14:46,000 --> 00:14:48,600 Speaker 1: But most of the big headlines, whether it's in commodities 266 00:14:48,880 --> 00:14:51,520 Speaker 1: or or in labor, we think can be addressed with 267 00:14:51,640 --> 00:14:55,400 Speaker 1: higher prices, higher wages UM. And you know, it's it's 268 00:14:55,560 --> 00:14:58,920 Speaker 1: uh kind of a two period market. I think everyone's 269 00:14:58,960 --> 00:15:01,320 Speaker 1: ready and I think proper should be strapped in for 270 00:15:01,480 --> 00:15:03,800 Speaker 1: what could be very wild summer. But if we look 271 00:15:03,840 --> 00:15:06,200 Speaker 1: ahead six months, we looked at the end of the year, UM, 272 00:15:06,240 --> 00:15:10,800 Speaker 1: we expect fairly normal conditions, even inflation back down to 273 00:15:11,000 --> 00:15:14,000 Speaker 1: levels that were more consistent with what we saw before 274 00:15:14,040 --> 00:15:17,720 Speaker 1: the pandemic. Sign on bonuses transitory, JAREDS. You've made this 275 00:15:17,760 --> 00:15:20,280 Speaker 1: point that the conversation Tom and I were having early 276 00:15:20,320 --> 00:15:23,400 Speaker 1: this morning ten minutes ago on the labor market, Steve 277 00:15:23,440 --> 00:15:27,600 Speaker 1: Fault offering an appreciation bonus UBS for certain bankers getting 278 00:15:27,600 --> 00:15:30,280 Speaker 1: a bonus if they get a promotion. That is all 279 00:15:30,360 --> 00:15:33,120 Speaker 1: discretion were spending, Jared, in terms of just the extra bonus. 280 00:15:33,120 --> 00:15:35,560 Speaker 1: It's not base salary. And Jared, I just wonder from 281 00:15:35,560 --> 00:15:37,560 Speaker 1: your perspective whether that plays into the fed's hands a 282 00:15:37,560 --> 00:15:39,760 Speaker 1: little bit on the labor market that on either end 283 00:15:39,760 --> 00:15:42,640 Speaker 1: of the waste spectrum, we're talking about bonuses and we're 284 00:15:42,680 --> 00:15:46,280 Speaker 1: not talking about higher base. Yeah, that's this is exactly 285 00:15:46,280 --> 00:15:48,640 Speaker 1: what the third wants. I think if if you're if 286 00:15:48,640 --> 00:15:52,200 Speaker 1: you're worried about long term wage price spiral, I think 287 00:15:52,240 --> 00:15:54,720 Speaker 1: I think you you can relax a little bit here 288 00:15:54,760 --> 00:15:56,920 Speaker 1: because assigning bonus is not a raise. You know, whether 289 00:15:56,960 --> 00:15:59,480 Speaker 1: it's fifty dollars to show up for McDonald's you know, 290 00:15:59,560 --> 00:16:04,400 Speaker 1: job and review or yeah then I mean or at 291 00:16:04,440 --> 00:16:06,280 Speaker 1: the high end, these higher bonuses at the high end, 292 00:16:06,280 --> 00:16:09,240 Speaker 1: these are not permanent salary increases. If they were, that's 293 00:16:09,240 --> 00:16:11,480 Speaker 1: a different conversation. But so far there's no evidence of 294 00:16:11,520 --> 00:16:16,280 Speaker 1: anything persistent because employers and workers both understand that. Again, 295 00:16:16,360 --> 00:16:18,560 Speaker 1: six and nine months from now, things are probably gonna 296 00:16:18,560 --> 00:16:21,800 Speaker 1: be a lot more uh normal than we expect. Yeah, John, 297 00:16:21,800 --> 00:16:23,560 Speaker 1: it was great. All from New Jersey sent me a 298 00:16:23,600 --> 00:16:26,480 Speaker 1: fifty dollar check and said, sure there's change liftover. How 299 00:16:26,520 --> 00:16:29,040 Speaker 1: did you count on McDonald's. I don't know. It was great. 300 00:16:29,680 --> 00:16:32,200 Speaker 1: There were two value meal and you know what coffee? 301 00:16:33,280 --> 00:16:35,480 Speaker 1: I went large. I got the extra large fries just 302 00:16:35,560 --> 00:16:38,000 Speaker 1: to get me through today, Jared, you have a single 303 00:16:38,120 --> 00:16:41,640 Speaker 1: sentence in your note that's just so so important and 304 00:16:41,760 --> 00:16:45,440 Speaker 1: really wise. You gotta have the courage to buy inflation 305 00:16:45,600 --> 00:16:49,400 Speaker 1: surge when there's no inflation. But then, what do you 306 00:16:49,480 --> 00:16:53,400 Speaker 1: do when inflation expectations finally go? What do you do 307 00:16:53,440 --> 00:16:58,520 Speaker 1: when the expectations of inflation are finally there to sell? Well, look, 308 00:16:58,560 --> 00:17:01,160 Speaker 1: let's let's look a little bit of history. Okay, our 309 00:17:01,200 --> 00:17:04,560 Speaker 1: economists expect I think three point six percent cp I 310 00:17:04,680 --> 00:17:08,119 Speaker 1: this quarter. Um, you know, I think that's exactly right. 311 00:17:08,240 --> 00:17:09,720 Speaker 1: And if you look at what's happened in the past, 312 00:17:09,880 --> 00:17:12,600 Speaker 1: we've seen inflation surgeries above three and a half percent 313 00:17:13,000 --> 00:17:14,720 Speaker 1: just the past thirty years. There's been quite a few 314 00:17:14,720 --> 00:17:17,399 Speaker 1: of those occasions. We looked at the market, you know, 315 00:17:17,440 --> 00:17:20,880 Speaker 1: impact market data around those prints, and if you bought 316 00:17:20,920 --> 00:17:24,160 Speaker 1: all the inflation trades and commodities, you know you're versus us, 317 00:17:24,280 --> 00:17:28,439 Speaker 1: etcetera on those occasions past thirty years, on average, one 318 00:17:28,520 --> 00:17:31,960 Speaker 1: year later your inflation trades loss money. Now, So that 319 00:17:32,080 --> 00:17:34,000 Speaker 1: so to me, that says that if you believe the 320 00:17:34,000 --> 00:17:36,439 Speaker 1: inflation trade, now you know it is something you have 321 00:17:36,520 --> 00:17:38,719 Speaker 1: to buy when it's already priced into the market at 322 00:17:38,720 --> 00:17:40,760 Speaker 1: those trades, some of those trades have already done really well, 323 00:17:41,080 --> 00:17:42,680 Speaker 1: then you've got to be convinced that this is the 324 00:17:42,720 --> 00:17:45,120 Speaker 1: big one, and we just don't see any evidence of that. Instead, 325 00:17:45,359 --> 00:17:47,639 Speaker 1: we we think investors still have to keep a kind 326 00:17:47,640 --> 00:17:50,240 Speaker 1: of a balanced approach within the inflation trades. Within the 327 00:17:50,280 --> 00:17:53,159 Speaker 1: inflation trades, we still like financials very much, but I 328 00:17:53,200 --> 00:17:55,960 Speaker 1: think that the you know, the commodities and materials and energy, 329 00:17:56,080 --> 00:17:57,840 Speaker 1: there's just not enough evidence on that on the on 330 00:17:57,880 --> 00:18:00,359 Speaker 1: that side, and if you do see more more dips 331 00:18:00,800 --> 00:18:03,960 Speaker 1: um corrections, even in attack and the growth kind of trades, 332 00:18:04,200 --> 00:18:07,320 Speaker 1: for a long term investor, those have to be viable opportunities. Jared, 333 00:18:07,359 --> 00:18:09,479 Speaker 1: what do you think of the fans David Costons at 334 00:18:09,480 --> 00:18:11,960 Speaker 1: the dust Star, Gold and Sex making a big splash 335 00:18:12,000 --> 00:18:15,480 Speaker 1: this weekend on valuation of the things. Do you agree 336 00:18:15,520 --> 00:18:20,959 Speaker 1: that the fangs actually offer value given their growth characteristics 337 00:18:21,080 --> 00:18:24,960 Speaker 1: versus the ten uere yield. I think the trading vehicles, 338 00:18:25,280 --> 00:18:27,399 Speaker 1: you know, perhaps at this point some of these big 339 00:18:27,880 --> 00:18:31,120 Speaker 1: megacap growth trades um and so you can use they're 340 00:18:31,119 --> 00:18:33,640 Speaker 1: they're they're almost kind of like a macro expression of 341 00:18:33,680 --> 00:18:36,359 Speaker 1: what's happen with growth inflation. But but they're not. I 342 00:18:36,359 --> 00:18:38,760 Speaker 1: don't think people are looking at them as devalue. But 343 00:18:38,880 --> 00:18:41,360 Speaker 1: by any means, if you if you like the sort 344 00:18:41,359 --> 00:18:44,000 Speaker 1: of the tech and and and and growth type stocks, 345 00:18:44,000 --> 00:18:46,960 Speaker 1: I think small and midcaps are more attractive here. Jed 346 00:18:47,000 --> 00:18:48,359 Speaker 1: caught up with a Greater to a black Rock a 347 00:18:48,400 --> 00:18:50,720 Speaker 1: couple of days ago on Friday, and he was talking 348 00:18:50,760 --> 00:18:53,840 Speaker 1: about running a higher cash position across some of the portfolio. 349 00:18:53,960 --> 00:18:57,120 Speaker 1: Was something in the double digits mad teens. Maybe does 350 00:18:57,119 --> 00:18:59,399 Speaker 1: that make sense going into some attempt that dry powder. 351 00:19:01,280 --> 00:19:03,239 Speaker 1: I think it does make sense to have to have 352 00:19:03,320 --> 00:19:05,440 Speaker 1: some cash ready to deploy if it's if it's a 353 00:19:05,520 --> 00:19:08,560 Speaker 1: question of something tactical to to be ready. If there's 354 00:19:08,560 --> 00:19:10,639 Speaker 1: some big dislocations you know and I or either end, 355 00:19:10,640 --> 00:19:14,439 Speaker 1: we could see overheated reflation trades um that you know 356 00:19:14,480 --> 00:19:16,680 Speaker 1: you want to sell to go rotate back into growth. 357 00:19:16,760 --> 00:19:18,520 Speaker 1: You could see the reverse where we get another bad 358 00:19:18,560 --> 00:19:21,880 Speaker 1: job sprint and people start to really get gloomy. Either case, 359 00:19:21,880 --> 00:19:23,840 Speaker 1: you want to have cash ready. I don't think it's 360 00:19:23,840 --> 00:19:26,320 Speaker 1: a it's a good moment to be sort of allocating 361 00:19:26,440 --> 00:19:30,600 Speaker 1: higher permanent portfolio positions into into cash or anything else 362 00:19:30,880 --> 00:19:33,920 Speaker 1: that's um that's gonna change your fundamental mix because right now, 363 00:19:34,240 --> 00:19:36,280 Speaker 1: you know, there's so many cross currents. You can roll 364 00:19:36,320 --> 00:19:37,840 Speaker 1: the dice and and and any you know, it's can 365 00:19:37,840 --> 00:19:39,960 Speaker 1: tell you any number of ten different things. When there's 366 00:19:39,960 --> 00:19:42,200 Speaker 1: that much confusion in the market, that much confusion the 367 00:19:42,280 --> 00:19:44,480 Speaker 1: labor data, I don't think it's a good time to 368 00:19:44,520 --> 00:19:46,920 Speaker 1: make permanent decisions just quickly without challenge. What would fund 369 00:19:46,920 --> 00:19:50,879 Speaker 1: that position? Would you trind broadly or some hi specific Well, 370 00:19:50,880 --> 00:19:52,760 Speaker 1: it would trade some of the mega cap stocks, whether 371 00:19:52,800 --> 00:19:55,800 Speaker 1: it's tech or or otherwise. Um, my colleagues to be 372 00:19:55,800 --> 00:19:58,800 Speaker 1: the superman, and is I think been fairly you know, uh, 373 00:19:58,960 --> 00:20:00,960 Speaker 1: you know, neutral on on some of the mega cap 374 00:20:01,000 --> 00:20:03,520 Speaker 1: stocks for a while and and uh and at the 375 00:20:03,520 --> 00:20:06,159 Speaker 1: bank where we're much more favorable on small and mint caps. 376 00:20:06,240 --> 00:20:08,160 Speaker 1: So I think that the trades that have already done 377 00:20:08,240 --> 00:20:11,119 Speaker 1: very well, the really liquid names, are the obvious places 378 00:20:11,160 --> 00:20:13,720 Speaker 1: to look for cash um and and that can even 379 00:20:13,760 --> 00:20:17,000 Speaker 1: include an investment great credit for multist portfolios. We're kind 380 00:20:17,000 --> 00:20:18,919 Speaker 1: of bearish on on that part of the credit market 381 00:20:19,119 --> 00:20:22,320 Speaker 1: and see better opportunities elsewhere. Gonna see you gotta cash 382 00:20:22,359 --> 00:20:23,919 Speaker 1: up on a range of asuas John would have been 383 00:20:25,040 --> 00:20:34,399 Speaker 1: head of Research Investment Committee, this is the right person 384 00:20:34,480 --> 00:20:37,720 Speaker 1: at the right time to talk about the retail cadence 385 00:20:37,760 --> 00:20:41,440 Speaker 1: of America. Friday, we get retail from the lowest price 386 00:20:41,520 --> 00:20:44,600 Speaker 1: point to the highest price point. And Steve Sadov is 387 00:20:44,800 --> 00:20:49,040 Speaker 1: expert at this. Mr Sadoff is with master Card senior advisor. 388 00:20:49,160 --> 00:20:53,320 Speaker 1: But that barely describes his contribution and retail herbal lessons 389 00:20:53,320 --> 00:20:56,040 Speaker 1: and all that boom a million years ago in shampoo. 390 00:20:56,440 --> 00:21:00,199 Speaker 1: It's Sadov's fault and he's the guy at SAX who 391 00:21:00,520 --> 00:21:04,200 Speaker 1: exclusive is literally inventing that out of pixie. Does Steve say, 392 00:21:04,480 --> 00:21:08,160 Speaker 1: let me talk about MasterCard and the knowledge that MasterCard 393 00:21:08,280 --> 00:21:11,120 Speaker 1: has tick by tick and you say it even goes 394 00:21:11,160 --> 00:21:16,600 Speaker 1: over to the department stores are enjoying this resurgence. Good 395 00:21:16,640 --> 00:21:18,520 Speaker 1: to see you, Tom, And yeah, I think that the 396 00:21:18,560 --> 00:21:22,320 Speaker 1: month of April, the master Card spending pulse numbers show 397 00:21:22,400 --> 00:21:25,280 Speaker 1: that the consumer is really coming back with a vengeance. 398 00:21:25,560 --> 00:21:28,600 Speaker 1: You saw overall sales and this is now not just 399 00:21:28,640 --> 00:21:32,120 Speaker 1: the MasterCard sales, but it cuts across all forms of tender. 400 00:21:32,520 --> 00:21:36,000 Speaker 1: Sales were up twenty three point three percent versus year 401 00:21:36,359 --> 00:21:38,920 Speaker 1: versus year ago, but importantly they were up ten point 402 00:21:38,960 --> 00:21:42,679 Speaker 1: eight percent versus nineteen and this is ex auto and gas. 403 00:21:42,680 --> 00:21:45,560 Speaker 1: So you're seeing a consumer that's coming back, and it's 404 00:21:45,600 --> 00:21:50,919 Speaker 1: across all sectors. You mentioned department stores, but it's in restaurants, 405 00:21:51,040 --> 00:21:56,679 Speaker 1: it's in the categories like uh, jewelry and apparel, and 406 00:21:56,720 --> 00:21:59,120 Speaker 1: you're starting to see the consumer saying, hey, I want 407 00:21:59,160 --> 00:22:01,280 Speaker 1: to get back out of it. Let me ask yourself 408 00:22:01,320 --> 00:22:05,760 Speaker 1: side question, then, are we pulling forward next autumn sales? 409 00:22:06,240 --> 00:22:09,920 Speaker 1: Are we redoing the closet now where nothing ebbs as 410 00:22:09,960 --> 00:22:14,360 Speaker 1: we go into the holiday season? What is that dynamic? Well, 411 00:22:14,400 --> 00:22:17,360 Speaker 1: there's no question that that we're redoing our closets. We've 412 00:22:17,400 --> 00:22:20,680 Speaker 1: been wearing sweatpants for the last year, and you're seeing 413 00:22:20,680 --> 00:22:24,320 Speaker 1: a new fashion cycle starting. Uh. The guys in the 414 00:22:24,480 --> 00:22:28,160 Speaker 1: gene business are all talking about bagg year higher ways. 415 00:22:28,280 --> 00:22:32,960 Speaker 1: It's a new newness, excitement getting out again, and you're 416 00:22:32,960 --> 00:22:36,080 Speaker 1: seeing it hit just the apparel fashion, but you're seeing 417 00:22:36,080 --> 00:22:39,800 Speaker 1: it in the UH handbags, the shoes, the jewelry. So 418 00:22:39,920 --> 00:22:43,200 Speaker 1: I don't know that it's necessarily pulling forward the volume 419 00:22:43,240 --> 00:22:45,680 Speaker 1: from the fall because there's so much pent up demanded 420 00:22:45,760 --> 00:22:49,080 Speaker 1: savings that's out there. And the interesting thing is it's 421 00:22:49,119 --> 00:22:53,640 Speaker 1: not just online anymore. Online is now of all commerce 422 00:22:53,960 --> 00:22:57,239 Speaker 1: and growing still at but people are back in the 423 00:22:57,280 --> 00:23:00,199 Speaker 1: stores and brick and mortars started to see that ent 424 00:23:00,240 --> 00:23:02,840 Speaker 1: up demand. Steve, I'm going to avoid the baggy, higher 425 00:23:02,880 --> 00:23:05,600 Speaker 1: waste things somehow. I don't think the higher waste genes 426 00:23:05,640 --> 00:23:08,959 Speaker 1: can work on me as well. Steve, you are a 427 00:23:09,040 --> 00:23:11,080 Speaker 1: student of all this. And if I can move up 428 00:23:11,119 --> 00:23:14,000 Speaker 1: the scale to luxury and such, will there be a 429 00:23:14,080 --> 00:23:18,120 Speaker 1: consolidation we have? We have luxury which is three big 430 00:23:18,160 --> 00:23:21,240 Speaker 1: French companies. You know it better than me. But how 431 00:23:21,280 --> 00:23:23,280 Speaker 1: does how does how do we come out of this 432 00:23:23,359 --> 00:23:27,040 Speaker 1: on an equity basis further consolidation or is it going 433 00:23:27,080 --> 00:23:29,960 Speaker 1: to be entrepreneurial with I p O s and the rest. 434 00:23:30,920 --> 00:23:32,760 Speaker 1: I think it's gonna be a combination of both. That 435 00:23:32,880 --> 00:23:35,320 Speaker 1: you have, the strong ones are going to be picking 436 00:23:35,359 --> 00:23:37,919 Speaker 1: off some of the big brands. You'll see the consolidation 437 00:23:37,960 --> 00:23:40,240 Speaker 1: for the lvm ages and the reached months of the world. 438 00:23:40,600 --> 00:23:44,639 Speaker 1: But you're seeing companies like the Tapestries performing uh much better. 439 00:23:44,880 --> 00:23:47,560 Speaker 1: You're I think you're gonna continue to see these niche 440 00:23:48,040 --> 00:23:50,879 Speaker 1: segmented brands that come out and do their I p 441 00:23:50,960 --> 00:23:55,280 Speaker 1: O s. Uh. The consumer wants values, they want a story, 442 00:23:55,400 --> 00:23:57,600 Speaker 1: they want to and I think that in the luxury 443 00:23:57,640 --> 00:23:59,880 Speaker 1: space you're going to continue to see a lot of innovation. 444 00:24:00,400 --> 00:24:02,560 Speaker 1: Steve said, how did you bring it back to master 445 00:24:02,640 --> 00:24:05,720 Speaker 1: Card in your work for them now as a senior advisor? 446 00:24:05,720 --> 00:24:08,840 Speaker 1: How is our relationship with our cards changing? There's a 447 00:24:08,840 --> 00:24:12,800 Speaker 1: lot of dynamics in fintech and digital dynamics. How does 448 00:24:12,880 --> 00:24:16,800 Speaker 1: master Card model that forward? Well, I think what you 449 00:24:16,840 --> 00:24:19,720 Speaker 1: have as a consumer that is going much more cash less, 450 00:24:20,080 --> 00:24:22,960 Speaker 1: so that they want touchless, they want ease of transaction. 451 00:24:23,040 --> 00:24:26,360 Speaker 1: They still love their cards, and I think that it's 452 00:24:26,560 --> 00:24:29,600 Speaker 1: it boats very well for the master Cards of the 453 00:24:29,640 --> 00:24:32,280 Speaker 1: world in terms of the changing behaviors. And it's not 454 00:24:32,359 --> 00:24:35,159 Speaker 1: just the transaction, it's what you do with some of 455 00:24:35,200 --> 00:24:38,399 Speaker 1: the data and the analytics and the ability to understand 456 00:24:38,800 --> 00:24:41,320 Speaker 1: consumers better. Right. I think that this is the value 457 00:24:41,359 --> 00:24:45,600 Speaker 1: added proposition that all of these UH retailers need, and 458 00:24:45,600 --> 00:24:47,680 Speaker 1: you're seeing a lot more of that coming out of 459 00:24:47,840 --> 00:24:50,800 Speaker 1: the use of data and meeting the consumer needs. On 460 00:24:50,840 --> 00:24:53,840 Speaker 1: a level of one, What is the permanent change of 461 00:24:53,840 --> 00:24:57,159 Speaker 1: the consumer out of this natural disaster we've all lived. 462 00:24:58,320 --> 00:25:02,480 Speaker 1: I think the consumer go back to the value and values. 463 00:25:03,040 --> 00:25:05,720 Speaker 1: They're want to be safe, they want to be able 464 00:25:05,760 --> 00:25:09,160 Speaker 1: to get what they want when they wanted. This omni 465 00:25:09,280 --> 00:25:12,439 Speaker 1: channel shopping is here to stay. Uh. These are some 466 00:25:12,480 --> 00:25:16,600 Speaker 1: fundamental changes that had started earlier before the pandemic that 467 00:25:16,640 --> 00:25:19,720 Speaker 1: it probably accelerated six years over the last year in 468 00:25:19,840 --> 00:25:22,959 Speaker 1: terms of the shift to come the channel and segmented 469 00:25:23,080 --> 00:25:27,080 Speaker 1: and differentiated brands. You just described Amazon. They're doing an 470 00:25:27,080 --> 00:25:31,760 Speaker 1: a trunch offering today of a gazillion dollars in bonds. 471 00:25:31,800 --> 00:25:35,600 Speaker 1: How does Amazon adapt to the Steve Sadoff world. Oh, 472 00:25:35,880 --> 00:25:38,800 Speaker 1: Amazon's a winner. I think the Amazon's the Walmart. The 473 00:25:38,800 --> 00:25:41,760 Speaker 1: targets continue to do well. Doesn't mean they are the 474 00:25:41,800 --> 00:25:45,160 Speaker 1: only ones that are going to do well. But marketplaces 475 00:25:45,280 --> 00:25:48,200 Speaker 1: are important in this environment. They're not gonna be Amazon 476 00:25:48,280 --> 00:25:50,320 Speaker 1: is not the only marketplace. You're gonna have the far 477 00:25:50,440 --> 00:25:53,359 Speaker 1: fetches of the world that will do well. But the 478 00:25:53,760 --> 00:25:58,200 Speaker 1: consumer loves convenience ease. Amazon sets the standards the way 479 00:25:58,240 --> 00:26:01,320 Speaker 1: that they do, the pres dentation of the product, They 480 00:26:01,400 --> 00:26:06,959 Speaker 1: understand the personalization. That's going to be the expectation. Amazon's 481 00:26:06,960 --> 00:26:08,960 Speaker 1: a winner over time, but I think that there's gonna 482 00:26:08,960 --> 00:26:11,320 Speaker 1: be a lot of others as well. And you also 483 00:26:11,359 --> 00:26:14,760 Speaker 1: have the new evolving, whether it's the resale, the rental. 484 00:26:15,160 --> 00:26:17,040 Speaker 1: All of this is this new age in terms of 485 00:26:17,080 --> 00:26:22,280 Speaker 1: how retails evolving. S does Amazon take luxury from luxury? 486 00:26:22,320 --> 00:26:26,280 Speaker 1: I mean, as Gucci gonna actually sell off Amazon. My 487 00:26:26,520 --> 00:26:29,120 Speaker 1: guess is the answer is probably not. I think that 488 00:26:29,160 --> 00:26:31,879 Speaker 1: the Gucci's and the lvmhs are going to play in 489 00:26:32,600 --> 00:26:35,399 Speaker 1: other kinds of market places. Maybe they'll play in the 490 00:26:35,440 --> 00:26:39,560 Speaker 1: far fetches, the Netta portes, the Sacks dot com which 491 00:26:39,640 --> 00:26:42,600 Speaker 1: is separated from the full line stores. I don't know 492 00:26:42,680 --> 00:26:45,680 Speaker 1: that those brands play in the Amazon world. But Amazon 493 00:26:46,119 --> 00:26:48,919 Speaker 1: will play very They'll be the major player in uh 494 00:26:49,000 --> 00:26:50,840 Speaker 1: in apparel. I'm just not so sure it's gonna be 495 00:26:50,880 --> 00:26:53,840 Speaker 1: at the very high end luxury. It's been too long. 496 00:26:54,600 --> 00:26:58,000 Speaker 1: Thank you so much, greatly appreciated inventing retail and exclusives 497 00:26:58,040 --> 00:27:00,440 Speaker 1: at Sacks and of course a master card as a 498 00:27:00,520 --> 00:27:06,520 Speaker 1: senior advisor. This is the Bloomberg Surveillance Podcast. Thanks for listening. 499 00:27:06,880 --> 00:27:10,240 Speaker 1: Join us live weekdays from seven to ten am Eastern 500 00:27:10,480 --> 00:27:14,520 Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from 501 00:27:14,560 --> 00:27:19,840 Speaker 1: six to nine am for insight from the best in economics, finance, investment, 502 00:27:19,960 --> 00:27:25,000 Speaker 1: and international relations. And subscribe to the Surveillance podcast, on 503 00:27:25,080 --> 00:27:28,879 Speaker 1: Apple Podcast, SoundCloud, Bloomberg dot com, and of course, on 504 00:27:29,000 --> 00:27:33,200 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg