WEBVTT - Layoffs, ETFs, ChatGPT, and David Solomon (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.480 at Bloomberg dot com slash podcast. I've been waiting all 0:00:21.560 --> 0:00:23.840 week talk to Sarah Green Carmike, so we will good 0:00:23.920 --> 0:00:27.000 night these two all right, and say thank you very much, Abigail, 0:00:27.040 --> 0:00:29.520 Thank you very much. Brian. Let's bring in Sarah Green 0:00:29.560 --> 0:00:31.720 Carmichael because she wrote an opinion piece at the beginning 0:00:31.720 --> 0:00:35.200 of the week that really piqued my interest talking about 0:00:35.200 --> 0:00:37.600 the fact that all these layoffs were reporting on and 0:00:37.640 --> 0:00:40.320 now it's every day. UM, a few thousand at least 0:00:40.840 --> 0:00:45.200 could be a really bad idea by the executive board. 0:00:45.240 --> 0:00:50.120 So Sarah joins us now on Bloomberg Radio. UM. She's 0:00:50.159 --> 0:00:52.720 a former executive editor at the Harvard Business Review, where 0:00:52.720 --> 0:00:55.360 she hosted the HBr idea cast for mentor at Brown 0:00:55.440 --> 0:00:59.920 University's Women's launch Pad, and of course you probably recognize 0:01:00.000 --> 0:01:03.639 her from barrens um. Now she's writing for us. Sarah, 0:01:03.920 --> 0:01:06.400 What's what's the idea here that these companies have just 0:01:06.480 --> 0:01:10.559 gone through so much and spent a lot to hire people, 0:01:10.800 --> 0:01:14.959 now they're starting to fire those very same people. Yeah, 0:01:15.000 --> 0:01:17.479 it seems like a little bit of wasted resources. It's 0:01:17.480 --> 0:01:19.600 sort of like you painted the room and now you've 0:01:19.600 --> 0:01:23.600 decided to get renovate it. Um. So it makes the 0:01:23.640 --> 0:01:26.920 company's look a little bit uh, shortsighted, I guess, and 0:01:27.200 --> 0:01:29.680 I think you know, the big message that when I 0:01:29.720 --> 0:01:31.920 looked into the research and talk to people was that 0:01:32.200 --> 0:01:34.640 you've spent all this money to hire people. What's most 0:01:34.680 --> 0:01:38.680 important is not the exact number of employees, but your culture. 0:01:38.720 --> 0:01:41.840 Do you have a culture of innovation? Um? If you do, 0:01:42.040 --> 0:01:44.760 you could weather the recession and ask yourself, you know, 0:01:44.959 --> 0:01:46.959 what do we do with this extrac capacity? You know, 0:01:47.040 --> 0:01:49.080 what new things do we create? How do we take 0:01:49.120 --> 0:01:52.000 advantage of this time? Um? But instead it seems like 0:01:52.000 --> 0:01:54.920 companies are being a little bit penny wise count foolish 0:01:55.040 --> 0:01:58.720 by saying, you know, jettison ng um sometimes a small 0:01:58.760 --> 0:02:01.200 percentage of their workforce, but still you know tens of 0:02:01.240 --> 0:02:05.080 thousands of people, Sarah. Do we know a couple of things. 0:02:05.120 --> 0:02:08.080 One is these companies. A lot of these tech companies 0:02:08.160 --> 0:02:11.079 have almost doubled their workforces in the last three to 0:02:11.160 --> 0:02:14.080 four to five years, so one could argue, boy, they overhired. 0:02:14.080 --> 0:02:16.680 And second, there's also an argument that, you know, like 0:02:16.720 --> 0:02:19.040 a lot of companies, a lot of industries, they didn't 0:02:19.040 --> 0:02:21.480 really let people go during the pandemic. That would be 0:02:21.560 --> 0:02:23.679 kind of heartless here, So maybe they got some ketchup 0:02:23.720 --> 0:02:26.440 to do there. What do you do? You get a 0:02:26.480 --> 0:02:29.360 sense that this is specific to the tech industry because 0:02:29.520 --> 0:02:31.600 Michael Barr from Bloomberg News was just in here this 0:02:31.639 --> 0:02:35.680 morning reporting Taco Bell they need employees. You know, Chipotle 0:02:35.760 --> 0:02:38.680 they need twenty thousand employees. I don't know, it's kind 0:02:38.680 --> 0:02:42.280 of tough to circle that square there. Yeah, you know, 0:02:42.440 --> 0:02:45.720 we've been talking about the k saped economy for years now, 0:02:45.760 --> 0:02:48.200 and it does seem a little bit like this is 0:02:48.480 --> 0:02:51.600 you know, tech companies, it's also some financial firms UM 0:02:51.639 --> 0:02:54.919 and consulting firm UM. You know, maybe some of these 0:02:54.960 --> 0:02:58.400 firms are a little overstaffed, especially the tech companies, because 0:02:58.440 --> 0:03:00.600 in some cases, you know, they still have many more 0:03:00.600 --> 0:03:02.800 employees than they did at the start of the pandemic 0:03:02.880 --> 0:03:06.360 even with the layoffs. Right, So they're still growing UM, 0:03:06.400 --> 0:03:09.200 so that you could make it. I think a solid 0:03:09.240 --> 0:03:11.120 argument is that the tech companies might be in a 0:03:11.200 --> 0:03:15.680 slightly different position. UM. But I think, you know, for 0:03:15.760 --> 0:03:19.160 so many companies, you know you mentioned food service, UM, 0:03:19.240 --> 0:03:23.040 retail businesses. So many companies are having trouble just hiring anyone. 0:03:23.160 --> 0:03:25.400 So it's a very sort of weird economy where you 0:03:25.440 --> 0:03:27.680 can't get enough people at one level and other companies 0:03:27.760 --> 0:03:30.600 think maybe they've got slightly too many. I do think 0:03:30.639 --> 0:03:35.040 that if those tech companies are continuing to grow UM, 0:03:35.320 --> 0:03:37.800 hiring freeze might have been better than the kind of 0:03:37.840 --> 0:03:41.680 incredibly morale damaging prospect of LAOPP. That's the one of 0:03:41.720 --> 0:03:43.960 the big problems, right, is the damage to morale, Because 0:03:44.760 --> 0:03:47.080 you know, if you get fired, that's bad, UM. But 0:03:47.080 --> 0:03:49.680 if if you're worried about getting fired for months and 0:03:49.680 --> 0:03:52.400 then you narrowly avoid the acts, that's still not great. 0:03:53.160 --> 0:03:55.119 Especially if some of the people out the door are 0:03:55.240 --> 0:03:57.000 you're you know, you're still close with you might end 0:03:57.080 --> 0:03:59.560 up hating your managers and what do you call it 0:03:59.640 --> 0:04:03.280 quiet quitting? Yes, exactly, Yeah, I mean I think one 0:04:03.280 --> 0:04:05.720 of the things that really comes through in the data 0:04:06.200 --> 0:04:08.880 is that layoffs you lead to higher turnover. Do you 0:04:08.920 --> 0:04:11.520 have the people that you fire, um, and then you 0:04:11.560 --> 0:04:13.520 have the people who all then spend the next few 0:04:13.520 --> 0:04:16.240 months dusting off their resumes and looking for work elsewhere. 0:04:16.320 --> 0:04:18.280 So it really could lead to a lot of attrition 0:04:18.279 --> 0:04:21.039 which could lead some of these firms to become understaffed, 0:04:21.080 --> 0:04:23.320 which can be very costly. How much of this is 0:04:23.520 --> 0:04:25.600 We used to have a function on the Bloomberg terminal 0:04:26.120 --> 0:04:29.120 l O S S Go Lost Go, and I think 0:04:29.160 --> 0:04:31.040 we got rid of it because it felt heartless. What 0:04:31.040 --> 0:04:33.240 it would do is did put up a price chart 0:04:33.320 --> 0:04:35.600 of the stock, and then it would put red circles 0:04:35.640 --> 0:04:39.800 around the firing announcements. And of course usually when you 0:04:39.839 --> 0:04:43.720 announce firings, Wall Street, being the heartless mob that it is, 0:04:44.400 --> 0:04:46.520 goes and buys the stock. Right. How much of this 0:04:46.600 --> 0:04:48.120 do you think is driven by that because these tech 0:04:48.120 --> 0:04:51.560 stocks have gotten hit hard. I think it's very much 0:04:51.760 --> 0:04:56.119 driven by quarterly expectations um so. And I think what's 0:04:56.480 --> 0:04:58.800 a shame is that you will see if stock rise 0:04:58.839 --> 0:05:02.599 a little bit, usually on announcing layoffs um. But then 0:05:02.760 --> 0:05:05.000 you know what happens the next quarter or the quarter 0:05:05.120 --> 0:05:08.400 after that, You know, the stock usually settles right back down. Again. UM, 0:05:08.480 --> 0:05:11.240 so it does seem like it's actually very short term 0:05:11.279 --> 0:05:13.680 thinking kind of saying, how can we play K Wall Street? 0:05:13.720 --> 0:05:16.159 What can we do to show them that we're taking 0:05:16.160 --> 0:05:19.479 it seriously? Um And unfortunately, I think, you know, the 0:05:19.600 --> 0:05:22.520 message so often to the remaining employees is you know, 0:05:22.600 --> 0:05:24.599 we'll just have to do more with less. And I 0:05:24.640 --> 0:05:26.960 think what actually might happen at some of these companies 0:05:27.040 --> 0:05:29.279 is people will have to do less with less. You know, 0:05:29.320 --> 0:05:32.000 it will affect revenue, it will affect other opportunities that 0:05:32.080 --> 0:05:34.039 they you know, I would hope to achieve in the 0:05:34.080 --> 0:05:37.120 long run. Alright, great stuff. I really appreciate you taking 0:05:37.120 --> 0:05:39.760 the time. Sarah Green Carmichael, she is the editor Bloomberg 0:05:39.800 --> 0:05:42.560 Opinion talking about layoffs and we've seen it again. It's 0:05:42.640 --> 0:05:45.000 it's tough to kind of, you know, kind of take 0:05:45.040 --> 0:05:47.120 a look at all the data with the the global 0:05:47.680 --> 0:05:50.040 labor market is so so strong. But these tech companies, 0:05:50.480 --> 0:05:53.160 we've seen a lot of headline noise here in terms 0:05:53.200 --> 0:05:55.359 of layingoff the panel and it hasn't been driving the 0:05:55.400 --> 0:05:59.120 price up recently. Maybe initially yeah, maybe, uh, you know, 0:05:59.200 --> 0:06:01.840 the non tech comes especially when three M says we 0:06:01.960 --> 0:06:03.960 gotta fire thousands of people, or in IBM says we 0:06:04.000 --> 0:06:06.560 gotta fire thousands of people. People say, ohs, what's what's 0:06:06.560 --> 0:06:09.000 the deal with your demand? Exactly right, So we'll see 0:06:09.000 --> 0:06:10.360 if we're gonna get more of that. We a lot 0:06:10.400 --> 0:06:13.160 of tech earnings next week and we'll stay on top 0:06:13.160 --> 0:06:14.480 of that. We'll see what they want to do with 0:06:14.520 --> 0:06:21.040 their head count. This is Bloomberg Ben Slaven, global head 0:06:21.040 --> 0:06:25.080 of E T F S. Yeah, exactly, Ben Slaven, He's 0:06:25.080 --> 0:06:26.400 a global head of E t S or B and 0:06:26.520 --> 0:06:29.400 Y Melon Assets Servicing. He's here in a Bloomberg Interactive 0:06:29.440 --> 0:06:31.719 Broker studio. So he gets the gold star today for 0:06:31.760 --> 0:06:34.640 showing up when most people don't show up at work. 0:06:34.640 --> 0:06:37.600 And literally I'm looking around, I don't see a body here. Um, 0:06:37.640 --> 0:06:40.000 but that's kind of how the world is these days. Ben. 0:06:40.080 --> 0:06:43.480 I mean it's Friday, right, I know, I guess that's whatever. 0:06:43.800 --> 0:06:46.240 So Ben, you at E T F S, I mean, 0:06:46.400 --> 0:06:48.919 you can't help but grow. It's just a question of 0:06:49.080 --> 0:06:52.479 how much you do grow in the E T F business. 0:06:52.720 --> 0:06:54.360 Talk to us about B and Y Melon. What are 0:06:54.360 --> 0:06:56.920 you guys seeing in the business these days? Well, first, 0:06:57.000 --> 0:06:59.480 thanks for having me. Great to be here. And before 0:06:59.480 --> 0:07:01.320 we begin, I just want to give a quick happy 0:07:01.360 --> 0:07:04.800 birthday shout out to Spy. So we're thirty. We are. 0:07:04.880 --> 0:07:08.440 We are thirty years into the e t F journey 0:07:08.760 --> 0:07:15.040 and years maybe Nate Nate most was sort of the 0:07:15.200 --> 0:07:18.880 considered the godfather all those years ago. Um, he actually 0:07:18.920 --> 0:07:23.520 recently passed, but the legacy lives on. But here we are, 0:07:25.000 --> 0:07:29.080 Oh is that right? Okay? Yet long gone? At this point, 0:07:29.120 --> 0:07:32.800 I actually think it's condos. But in in this environment, 0:07:32.920 --> 0:07:37.520 we've seen an acceleration of not only product launches, but 0:07:37.560 --> 0:07:40.720 also adoption by investors. So last year was a record 0:07:40.840 --> 0:07:43.680 for the e t F industry. UM. Actually, in the 0:07:43.760 --> 0:07:45.600 last two years at B and Y Melon, on our 0:07:45.640 --> 0:07:50.000 platform that we service a large percentage of the industry, 0:07:50.200 --> 0:07:52.720 we were launching almost one e t F a day 0:07:52.840 --> 0:07:56.240 on our platform. Now that is slowed in. Our expectation 0:07:57.000 --> 0:07:59.680 is that it will slow a bit and also closures 0:07:59.680 --> 0:08:01.600 will pickup, so on a net basis, we might not 0:08:01.720 --> 0:08:04.120 hit that record, but the que looks strong and one 0:08:04.120 --> 0:08:07.280 of those drivers is really the mutual funds starting to 0:08:07.320 --> 0:08:10.400 convert to e t reasons right, we had a regulatory 0:08:10.520 --> 0:08:13.480 change that allowed mutual fund conversions to e t f 0:08:13.560 --> 0:08:16.440 s and frankly, e t F s are just a 0:08:16.480 --> 0:08:18.680 lot cheaper. I mean, if you're an investor, it makes 0:08:18.720 --> 0:08:21.680 a lot more sense depending on obviously your goals and 0:08:21.720 --> 0:08:23.920 what you want to deal with, your risk holrange, ceter But, uh, 0:08:24.000 --> 0:08:28.160 you're looking at twenty five or fifty basis points maybe 0:08:29.000 --> 0:08:31.480 or a hundred rather than you know, one and a 0:08:31.480 --> 0:08:34.640 half or two percent. Fees matter um, and that has 0:08:34.679 --> 0:08:36.960 been one of the drivers of e t F adoption. 0:08:37.440 --> 0:08:41.200 But look, you know, from an asset manager standpoint, investors 0:08:41.240 --> 0:08:45.560 are clearly preferring the e t F structure, and that 0:08:45.679 --> 0:08:47.880 is putting a lot of pressure on the industry. So 0:08:48.160 --> 0:08:51.520 some of the mutual fund sponsors are saying, hey, if 0:08:51.520 --> 0:08:54.320 we can't beat them, join them. And now that the 0:08:54.440 --> 0:08:56.960 path is open to convert a mutual fund to an 0:08:56.960 --> 0:09:01.440 e t F, it just provides another way for large 0:09:01.520 --> 0:09:04.400 mutual fund complexes to enter the e t F space 0:09:04.440 --> 0:09:07.199 and continue to grow their funds and to some degree 0:09:07.240 --> 0:09:09.280 stop some of the bleeding that we've seen coming out 0:09:09.320 --> 0:09:11.480 of mutual funds at the expense of e t F. 0:09:11.640 --> 0:09:13.360 I don't. I don't. When I was a sell side 0:09:13.360 --> 0:09:16.240 of analysts, I made a living with the mutual funds. 0:09:16.400 --> 0:09:19.680 I go up to Boston, see you know, Fidelity and 0:09:19.840 --> 0:09:23.400 Putnam and all those guys. So that's because they had 0:09:23.400 --> 0:09:26.160 a ga jillion analysts covering chemicals and media and all 0:09:26.200 --> 0:09:29.000 that kind of stuff, and lots of portfolio managers. If 0:09:29.000 --> 0:09:31.160 they were to convert to an e t F and 0:09:31.320 --> 0:09:34.640 cut the fees by like a jillion, what happens to 0:09:34.679 --> 0:09:37.640 all those all that cost, the analyst, that portfolio manages 0:09:37.679 --> 0:09:40.360 all that stuff, what happens to that cost? It's putting 0:09:40.360 --> 0:09:43.439 an incredible amount of pressure on those asset managers. In fact, 0:09:43.440 --> 0:09:45.840 I read an analysis UM and I believe it was 0:09:46.040 --> 0:09:49.199 one of the Bloomberg analysts who made an assumption that 0:09:49.480 --> 0:09:53.920 roughly twenty billion in revenue has been sucked out of 0:09:53.960 --> 0:09:57.360 the asset management industry sector, and a large degree of 0:09:57.400 --> 0:09:59.520 that is due to e t f s, whether it 0:09:59.600 --> 0:10:03.960 be simply the cost as you were mentioning, but also um, 0:10:04.000 --> 0:10:06.600 you know, really the fact that it's a lot of 0:10:06.640 --> 0:10:09.880 that asset is passive UM that has come in to 0:10:10.040 --> 0:10:14.079 the industry which doesn't require those those analysts. Although there's 0:10:14.080 --> 0:10:16.880 a lot of actively managed ETFs and they're really gaining 0:10:16.880 --> 0:10:20.320 in popularity. I mean, Jack Bogel would be ironically, I 0:10:20.360 --> 0:10:24.160 think celebrating in his grave right now because this is 0:10:24.720 --> 0:10:27.360 part of his legacy as well, even though he turned 0:10:27.400 --> 0:10:30.520 down uh what is it, Nate most when he first 0:10:30.559 --> 0:10:33.440 came to his office. Yeah, I mean the old the 0:10:33.480 --> 0:10:36.559 old e t f adage is the whole passive is massive, 0:10:37.120 --> 0:10:40.560 you know, sort of tagline. But you're right, it's changing 0:10:40.800 --> 0:10:43.400 from a product development standpoint. If you think at what's 0:10:43.440 --> 0:10:46.640 happening now versus where the assets are, more than half 0:10:46.720 --> 0:10:48.960 of the products in the industry that we're launched in 0:10:49.000 --> 0:10:51.640 this sort of latest sort of wave of new products 0:10:51.720 --> 0:10:54.240 are actively managed. In fact, that that's what we saw 0:10:54.240 --> 0:10:56.200 on our own platform and if you look at our 0:10:56.240 --> 0:10:59.160 que going forward again, the majority of the products are 0:10:59.200 --> 0:11:01.559 active and if you see what is going on just 0:11:01.640 --> 0:11:04.520 this year. At this point in the market cycle, actively 0:11:04.559 --> 0:11:08.240 managed ETFs are about three percent roughly of the industry, 0:11:08.600 --> 0:11:12.079 but they've accounted for about forty of the flows here 0:11:12.360 --> 0:11:16.320 in three in January. So again small base, but you 0:11:16.400 --> 0:11:19.240 are seeing, um, you know, quite a bit of investor interest. 0:11:19.360 --> 0:11:21.560 Part of that is the market cycle, and part of 0:11:21.559 --> 0:11:23.880 that is there's just frankly more product and choice for 0:11:24.000 --> 0:11:26.720 investors to to choose from and and that's driving it. 0:11:26.920 --> 0:11:31.280 So does the corporations to companies. Did they offer e 0:11:31.360 --> 0:11:34.000 t f s for the four one case because some 0:11:34.040 --> 0:11:37.320 people study that's that's kind of where that's for mutual funds. Yeah, 0:11:37.360 --> 0:11:40.000 it's a it's a great question. Um. You know, four 0:11:40.000 --> 0:11:42.360 o one case have been kind of the last stand 0:11:42.679 --> 0:11:45.679 um really for mutual funds, and that is where the 0:11:45.720 --> 0:11:48.600 stickiest and and sort of mutual funds remain dominant. But 0:11:48.720 --> 0:11:50.760 the bottom line is e t f s are starting 0:11:50.760 --> 0:11:53.839 to crack into that market. The fact is for more 0:11:53.880 --> 0:11:56.200 than a decade you can have e t f s 0:11:56.200 --> 0:11:58.599 and four oh one case. I've had one myself and 0:11:58.679 --> 0:12:00.480 invested in e t f I don't think you simply 0:12:00.520 --> 0:12:02.840 need a broke rach account right to be able to 0:12:03.520 --> 0:12:06.160 access those ETFs. And so it really is a matter 0:12:06.200 --> 0:12:09.719 of the four one k plan itself allowing investors to 0:12:09.960 --> 0:12:13.959 access ETFs, and so we can by the way he 0:12:14.280 --> 0:12:20.040 manages doesn't fidelity dolom my my guy Rick at a 0:12:20.120 --> 0:12:24.720 Meret prize UM. He sent me recently a few um 0:12:24.840 --> 0:12:27.120 options and s junk was one of them. So I 0:12:27.120 --> 0:12:28.880 told him, I told him, I want high yield, but 0:12:29.200 --> 0:12:33.040 so you can and I think the real um One 0:12:33.080 --> 0:12:35.440 of the other big drivers though, is that the kids 0:12:36.000 --> 0:12:38.839 are investing in apps right, and they don't want as 0:12:38.880 --> 0:12:41.520 much of the red tape when they're using robin Hood 0:12:41.600 --> 0:12:44.480 or we Bowl or whatever. And this is just a 0:12:44.600 --> 0:12:48.760 much easier way to invest in the diversified product if 0:12:48.920 --> 0:12:50.920 that's what you're after. You can also besting single stock 0:12:50.960 --> 0:12:54.840 ETFs and leverage up, but this just seems like so 0:12:54.960 --> 0:13:00.280 much cleaner and uh than than a mutual fund, right Lukely. 0:13:00.320 --> 0:13:02.400 And again there's the other benefits we talked about. Certainly 0:13:02.440 --> 0:13:04.400 liquidity in the low cost is a piece of it, 0:13:04.440 --> 0:13:08.400 but remember even when we're talking about retirement accounts, you know, 0:13:08.520 --> 0:13:13.400 it's also about the ability to construct with precision asset 0:13:13.400 --> 0:13:17.360 allocation models that fit a variety of not only time horizons, 0:13:17.360 --> 0:13:21.600 but profiles. And again, the ETFs continue to proliferate, and 0:13:21.679 --> 0:13:25.520 that precision allows the asset allocators or those putting that 0:13:25.600 --> 0:13:28.400 kind of investment advice out there for investors, whether it 0:13:28.440 --> 0:13:32.360 be packaged or not, with an incredible amount of precision 0:13:32.800 --> 0:13:36.320 and the ability to again customize those portfolios. That really 0:13:36.320 --> 0:13:38.960 makes sense for investors, which is just very difficult to do, 0:13:39.400 --> 0:13:43.640 uh in a mutual fund rapper. I mean, I can't 0:13:43.640 --> 0:13:46.520 even think of any reason to be long the asset 0:13:46.520 --> 0:13:50.640 management business at all. This ETFs thing, it's a long 0:13:50.760 --> 0:13:54.679 term story, it seems to me. I mean, is Boston Fidelity, 0:13:54.760 --> 0:13:58.440 Putnam Wellington? You know those guys, what do they do? 0:13:59.240 --> 0:14:00.719 I mean, a lot of them are trying to jump 0:14:00.720 --> 0:14:04.439 into If you can't beat them, join them. I mean, 0:14:04.440 --> 0:14:06.600 Fidelity is a great example. I mean they have come 0:14:06.640 --> 0:14:09.600 in to the e t F market UM and now 0:14:09.640 --> 0:14:12.040 they're really starting to ramp up not only the product 0:14:12.040 --> 0:14:14.880 development but also the distribution of those products, and you're 0:14:14.920 --> 0:14:17.720 starting to see the assets move forward. JP Morgan another 0:14:17.800 --> 0:14:20.720 large firm that's really trying to lean into the e 0:14:20.800 --> 0:14:24.400 t F effort. That's again had a legacy mutual fund business, 0:14:24.400 --> 0:14:26.040 so it's it's changed. What do you guys do it? 0:14:26.560 --> 0:14:29.000 And y Mel and assets Servicing? How do you So? 0:14:29.200 --> 0:14:34.080 We we provide infrastructure to the entire industry, so roughly 0:14:34.120 --> 0:14:36.760 we have a quarter of the industry's assets UM and 0:14:36.840 --> 0:14:39.400 we saw last year because of the record volume, we 0:14:39.440 --> 0:14:43.360 saw close to one point a trillion dollars in notional 0:14:43.440 --> 0:14:46.080 volume flowed through our pipes. And these are the creation 0:14:46.080 --> 0:14:48.720 and redemption orders that are coming through all the e 0:14:48.800 --> 0:14:51.720 t f s we service and company we have, you know, 0:14:51.840 --> 0:14:55.560 again provide all of that back middle office services to 0:14:55.720 --> 0:14:59.080 power up our sponsors e t f s and again 0:14:59.160 --> 0:15:02.000 that businesses grow going for sure, and at the same 0:15:02.040 --> 0:15:04.520 time the complexity is growing as well as these products 0:15:04.520 --> 0:15:08.560 proliferate UM and you know, again covering almost every asset class, 0:15:08.920 --> 0:15:11.480 every market in the world that you can possibly think 0:15:11.520 --> 0:15:12.960 of putting in an e t F at this point. 0:15:13.320 --> 0:15:14.600 One of the things that drew me to e t 0:15:14.800 --> 0:15:18.240 f s to begin with was well, Eric Valtunists and 0:15:18.520 --> 0:15:21.840 um uh Tony Santa Tara Vegas, who who do research 0:15:21.880 --> 0:15:24.480 for us, are on the money. UM. They run through 0:15:24.520 --> 0:15:27.080 the flows and you can really read so much what's 0:15:27.080 --> 0:15:29.320 going in the broader market by e t F flows. 0:15:29.600 --> 0:15:31.680 And that's what I thought initially was so cool. What 0:15:31.720 --> 0:15:35.040 do you see in the flows right now? Lack of conviction. 0:15:35.760 --> 0:15:37.800 That's not a great answer. I knew you were gonna 0:15:37.880 --> 0:15:40.040 I knew you were gonna You're gonna be unhappy with that, 0:15:40.120 --> 0:15:43.080 but that is the fact. It is interesting to see. 0:15:43.120 --> 0:15:45.360 So if you just take something like fixed income, which 0:15:45.680 --> 0:15:49.800 again we saw a very large churn in fixed income 0:15:49.960 --> 0:15:52.000 last year. I mean obviously due to the bond market 0:15:52.080 --> 0:15:55.040 route again money coming out of mutual funds into e 0:15:55.200 --> 0:15:57.280 t F s UM where E t F again picked 0:15:57.320 --> 0:15:59.200 up market share. And you look at what's happening in 0:15:59.280 --> 0:16:02.160 January and I just took a look at the leaderboard 0:16:02.280 --> 0:16:06.360 and you see UM not only short duration. You see 0:16:06.360 --> 0:16:08.600 the long bond tilt. You know that's one of year 0:16:08.600 --> 0:16:11.200 plus picking up flow. You see high yield, you see 0:16:11.240 --> 0:16:13.720 investment grade UM. I see a g G which is 0:16:13.760 --> 0:16:17.200 the total bond market all picking up flow. Hence my 0:16:17.360 --> 0:16:19.960 comment at this point lack of conviction. The one thing 0:16:20.000 --> 0:16:22.800 we are seeing that's unique as international UM, and that's 0:16:22.800 --> 0:16:24.800 been a sort of hot you know, coming into the 0:16:24.840 --> 0:16:26.960 beginning of this year. All right, Ben, great stuff, Ben Slaving, 0:16:27.000 --> 0:16:29.120 Global head of e t S b N Y Melon 0:16:29.200 --> 0:16:35.560 Assets Servicing chat GPT. I don't know what it is, 0:16:35.600 --> 0:16:37.920 but you know, you build. You take a look, what's 0:16:37.920 --> 0:16:40.320 it take to build a website these days? You just 0:16:40.720 --> 0:16:42.480 hire some kid and he does it for you. I 0:16:42.480 --> 0:16:45.000 think chat GPT now is that kid and it does 0:16:45.040 --> 0:16:47.800 it in thirty seconds. I mean it depends again like 0:16:47.920 --> 0:16:52.720 the AI told us when Sam Potter and Katie Greifeld 0:16:52.760 --> 0:16:55.640 tried to put an e t F together. It really 0:16:55.680 --> 0:16:58.240 depends on your parameters, right, You've got to be a 0:16:58.280 --> 0:17:00.640 little more specific, and you just build me a website. 0:17:00.640 --> 0:17:02.280 All right, Let's talk to someone you kind of in 0:17:02.320 --> 0:17:07.320 this space. James Cliff, founder of the firms called Durable. Uh, James, 0:17:07.359 --> 0:17:09.119 thanks so much for joining us here. Tell us what 0:17:09.359 --> 0:17:12.240 Durable does, and then we'll get into the whole chat. 0:17:12.280 --> 0:17:14.959 GPT MAC can talk about it, because I really don't know. 0:17:16.119 --> 0:17:19.520 Thanks for having me. Yeah, So, Durable helps small businesses 0:17:19.520 --> 0:17:23.560 get online in less than thirty seconds. So with three inputs, 0:17:23.680 --> 0:17:28.080 your location, your business category. Um, wait, there's two inputs, 0:17:28.480 --> 0:17:30.879 you essentially have a working website. We rate the copy, 0:17:30.960 --> 0:17:32.880 we pick your images, we pick your colors, we pick 0:17:32.880 --> 0:17:35.320 your layout. Give you everything you need to launch a 0:17:35.440 --> 0:17:38.760 beautiful website in less than thirty seconds. Get a customed 0:17:38.800 --> 0:17:41.200 domain name, get analytics built in, and then you're off 0:17:41.200 --> 0:17:42.959 to the races. And what's that called? And what does 0:17:43.000 --> 0:17:47.160 that cost me? Right now? It's free for thirty days 0:17:47.280 --> 0:17:50.399 and ten dollars a month. So I so exactly. So 0:17:50.440 --> 0:17:52.960 I had read about Durable. I've heard about this, and 0:17:52.960 --> 0:17:55.520 that's why my guest thirty seconds was pretty much on 0:17:55.560 --> 0:17:58.719 the money. Um, and then what's the next step. I mean, 0:17:58.760 --> 0:18:00.679 I assume you can find two in it at some 0:18:00.760 --> 0:18:05.200 point after you give those just those two variables exactly. 0:18:05.280 --> 0:18:07.439 There's a there's a custom editor within it. We actually 0:18:07.440 --> 0:18:09.520 have AI within the platform as well, so you can 0:18:09.600 --> 0:18:14.440 regenerate different components, you can test different copy. Essentially, our 0:18:14.440 --> 0:18:18.040 whole product is thinking it from an AI perse perspective, 0:18:18.160 --> 0:18:20.240 So just making it really easier for people to play 0:18:20.280 --> 0:18:23.480 around with different layouts, different images, getting to a point 0:18:23.480 --> 0:18:25.720 where they're just excited about what they're creating and what 0:18:25.720 --> 0:18:29.960 they're launching. So typically this website building process for an individual, 0:18:30.000 --> 0:18:32.040 one you're doing on your phone when you're in a 0:18:32.160 --> 0:18:34.840 McDonald's drive through half the time, So like, how do 0:18:34.840 --> 0:18:37.560 you make that experience fun and enjoyable as opposed to 0:18:37.600 --> 0:18:40.800 this kind of clunky experience where you're trying to get 0:18:40.840 --> 0:18:43.480 a pixel to be in the right place. Um. And 0:18:43.520 --> 0:18:45.240 that's really how we're thinking about, is how do we 0:18:45.280 --> 0:18:49.280 make this accessible to the folks out there that I 0:18:49.359 --> 0:18:52.000 want a website but don't have one yet. The cool 0:18:52.040 --> 0:18:54.920 thing is I've owned a domain name for I'm gonna 0:18:54.920 --> 0:18:57.159 say over fifteen years. Have you that? I just have 0:18:57.240 --> 0:18:59.320 never acted a few of them actually because I had 0:18:59.320 --> 0:19:01.080 this idea way back in the day. So I bought 0:19:01.080 --> 0:19:04.399 go to hell pants dot com and Cocktail party pants 0:19:04.440 --> 0:19:07.520 dot com and Mr fancy Pants where you're going, okay exactly, 0:19:07.560 --> 0:19:09.879 but I never I was like, I don't know what 0:19:10.040 --> 0:19:14.239 ht ellie even stands for. So I've never acted on that. 0:19:14.320 --> 0:19:15.919 So now I guess I could do it with UH 0:19:16.160 --> 0:19:22.400 with durable exactly. Who who is your your typical customer James? Yeah, 0:19:22.400 --> 0:19:25.639 So typically we're we're working with solo business owners, so 0:19:25.760 --> 0:19:28.840 someone who's I'm an owner operator of their business. So 0:19:28.920 --> 0:19:32.200 primarily in the services space, so we have a very 0:19:32.200 --> 0:19:37.240 wide variety of those folks though, So personal trainers, creatives, consultants, 0:19:37.359 --> 0:19:41.240 home services, essentially anywhere where you're trading your hours for 0:19:41.320 --> 0:19:44.320 dollars or hours for projects. Were really great fit because 0:19:44.359 --> 0:19:47.360 typically these folks don't have the time or the budget 0:19:47.440 --> 0:19:51.119 to hire expensive web development firms, and they're pretty simple 0:19:51.119 --> 0:19:53.040 businesses that you're trying to operate. You're not trying to 0:19:53.119 --> 0:19:57.199 run these complex e commerce inventory. It's Hey, I'm offering 0:19:57.200 --> 0:19:59.680 a service, how do I get that online? Get more 0:19:59.720 --> 0:20:02.120 cost mers and make my life easier. UM. That's really 0:20:02.160 --> 0:20:05.679 who we're working with. All right, So chat GPT you 0:20:05.760 --> 0:20:09.359 say it's dominated your inbox and news feeds. Talk to 0:20:09.400 --> 0:20:11.760 us about that business and kind of the impact of 0:20:11.840 --> 0:20:18.440 chat GPT on your Um, they're a partner, Yeah, I think, Um. 0:20:18.480 --> 0:20:21.000 I mean it's the most exciting technology that I've seen 0:20:21.000 --> 0:20:23.639 in my fifteen years working on the internet. UM. And 0:20:23.680 --> 0:20:27.840