Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovik. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all purnising the power of Business
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Speaker 1: Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well, we caught up with
Speaker 1: our next guest on the first trading day of this year.
Speaker 1: Tim was back in January and we talked about how
Speaker 1: things were going, how the pandemic has changed and shifted
Speaker 1: the world of technology and I t demand. So it's
Speaker 1: great to get his perspective again. Yeah. Rom Nagapon is
Speaker 1: chief information Officer at bn Y Melon's Pershing. He joins
Speaker 1: us on the phone from New Jersey, Ron, how you
Speaker 1: doing doing good, doing good? Happy to be here with
Speaker 1: you during the week of insight to the in line
Speaker 1: Melon Pershing as Yeah, we are excited to have you back. UM,
Speaker 1: take us through how things have shifted over the last
Speaker 1: five months. Is as we have started this move many
Speaker 1: of us and many of your clients back to the office. Yeah,
Speaker 1: meaning we do see everybody moving into the hybrid. From
Speaker 1: a technology point of view, I want to say we
Speaker 1: did have technology that helps us work on remote, but
Speaker 1: I want to say there's going to be a lot
Speaker 1: of innovation and changes that's going to happen in this
Speaker 1: space because whatever the tools we have has helped us,
Speaker 1: but it is not the best. So the remote work
Speaker 1: or working in a different places is going to exist,
Speaker 1: and a newer technology and a new way of how
Speaker 1: we collaborate is going to happen. We see more and
Speaker 1: more digital capability is going to be rolled out, and
Speaker 1: the experience that our clients are going to face while
Speaker 1: they work, whatever they work, however they work, it's going
Speaker 1: to be very different and it's going to be all
Speaker 1: digital and more innovation is going to happen. And that's
Speaker 1: what I see in this UM. You know, I would
Speaker 1: say the hybrid work, uh environment that's going to go
Speaker 1: into So we're all excited to come back to work. Actually,
Speaker 1: and it's slowly progressing. I would say, we take it
Speaker 1: day by day as things are getting back to our
Speaker 1: original and hope you'll expected to come back to the
Speaker 1: original as soon as possible. Well, I can't wait to
Speaker 1: be with you guys, uh within sight in person because
Speaker 1: it's such a great check from I always feel like
Speaker 1: for me and for a Bloomberg audience to get an
Speaker 1: idea of what's on the mind of investment advisors, what
Speaker 1: they're hearing from clients. You know, what are the themes
Speaker 1: and trends that we need to be aware of. And
Speaker 1: you really kind of put it together. In terms of
Speaker 1: the technology world. You say, more digital, more innovation in
Speaker 1: space to come from. So what does that mean more specifically, Yeah, so,
Speaker 1: so more specifically, what I would say is people are
Speaker 1: applying technology to either be efficient or to deliver the
Speaker 1: right experience and the growth. But here is what I
Speaker 1: wanted to say. I mean people are looking at it
Speaker 1: in an incremental fashion. That's good, there's nothing wrong in
Speaker 1: doing applying technology to make it better in an incremental way.
Speaker 1: But what I would you know, advise or make all
Speaker 1: the innovators think is to be completely reinvent what you
Speaker 1: do using this opportunity reinvent Either it could be a
Speaker 1: business model or it could be the way in which
Speaker 1: we deliver products and tools. So meaning even in the inside,
Speaker 1: we're talking about how the advisory is changing from selling
Speaker 1: products and using tools to almost like perfecting your practice
Speaker 1: and focusing on your clients. So it's it's it's all
Speaker 1: about reinventing your business applying the technology. So it's more
Speaker 1: like technology driving and technology is enabling you to do
Speaker 1: these kind of What about when it comes to new
Speaker 1: innovations like cryptocurrency? Carol and I were talking about bitcoin
Speaker 1: and Al Salvador becoming the first country to actually make
Speaker 1: bitcoin legal tender bitcoin right now trading it about thirty
Speaker 1: six thou dollars. How is technology changed that just during
Speaker 1: the pandemic. Yeah, So so talking about crypto, the underlying blockchain,
Speaker 1: it's used for the digital currency as well as other
Speaker 1: so the technology of blockchain is there to exist now
Speaker 1: talking about crypto per se um, it's it's it is
Speaker 1: volatile and there's a lot of regulatory oversight on it.
Speaker 1: So we at the environment and you know, actually announced
Speaker 1: that we are going to be supporting the crypto pretty
Speaker 1: much the entire life cycle for our clients to come
Speaker 1: and consume either from creation of the asset all the
Speaker 1: way to UM custoding and other type of things on
Speaker 1: top of the crypto. So my view on this is
Speaker 1: the technology is pretty solid, not only in the space
Speaker 1: of the cryptocurrency, but also into a smart contract and
Speaker 1: other type of lockchain applications. UM that's here to stay.
Speaker 1: Even the cryptocurrency is here to say, it's just that UM.
Speaker 1: You know, we need to be conscious about where it
Speaker 1: gets applied, how it gets applied, based on the volatility
Speaker 1: and other things people need to select learned. I think
Speaker 1: the first thing is about the advisory community. It's all
Speaker 1: about learning the new as a classes and we will
Speaker 1: provide all the capabilities, but you need to match exactly
Speaker 1: where to use crypto with your clients and all of
Speaker 1: those is going to happen. So it's an evolving space.
Speaker 1: But I wanted to say it's a space, it's an
Speaker 1: asset class that is here to stay. Run. What was
Speaker 1: the moment that that you realize that it was here
Speaker 1: to stay and you needed to make these changes from
Speaker 1: a technological perspective to offer this to clients. My thing
Speaker 1: is when when you see the price fluctuates and institutions
Speaker 1: getting in. See it started in a long time back.
Speaker 1: It actually started as a retail you know, the initial
Speaker 1: coin offering. But then when the institutions get inside, then
Speaker 1: it's further real. It's further real. It's it's for the time.
Speaker 1: It's here to stay because everyone big and well they're
Speaker 1: all looking at the ethic classes. The regulation is looking
Speaker 1: at it. So they're trying to whether regulations are all
Speaker 1: looking at it. This is an asset class that's here
Speaker 1: to stay because they're all going to make it. You know,
Speaker 1: I don't want to say save and sound and correct
Speaker 1: and um for that athet class to say, and then
Speaker 1: it's for real. It's for you to stay, all right?
Speaker 1: Can I leave with there? Rom so good to hear
Speaker 1: your voice. I'll be well and look forward to talking
Speaker 1: with you again. Rom Nagapon his chief information officer at
Speaker 1: B and Y Malon's pershing on the phone from New
Speaker 1: Jersey and interesting to hear him describe it as an
Speaker 1: asset class I know, and especially the way that they're
Speaker 1: involved in the process from blockchain creation, from the creation
Speaker 1: of the asset on the blockchain, or way they're thinking
Speaker 1: about the blockchain. Michael Clans and we're all going to
Speaker 1: have a piece of it in our portfolio at some point,
Speaker 1: I know who knows. You're listening to Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. Check it out. Another batch of names have
Speaker 1: been added to the meme stock frenzies. Retail traders latched
Speaker 1: down to their latest favorites today. So yes, we've had
Speaker 1: game Stop AMC hurts so last year, and yesterday we
Speaker 1: talked about Clever Health and Wednesdays. Today, Tim, we got
Speaker 1: some new names we do. Katie Gratfeld from Bloomberg News
Speaker 1: is here to tell us all about it. She's cross
Speaker 1: Asset reporter and joins us in the Bloomberg Interactive Broker Studio.
Speaker 1: She's also my anchor for Bloomberg Quick Take Stock. It
Speaker 1: happens each end every day at noon. You guys talk
Speaker 1: about meme stocks today, today, yesterday, probably tomorrow. It's what
Speaker 1: there is, It's what is happening. And the big, the big,
Speaker 1: big question I have, Katie, is is what makes a
Speaker 1: stock a meme stock? That is what I'm trying to
Speaker 1: figure out, because I mean, if you look at the
Speaker 1: names that are moving today. You have GEO for example,
Speaker 1: that's a prison operator. You have Clean Energy Fuels that
Speaker 1: operates natural gas filling stations. It feels a little bit random.
Speaker 1: I mean, at least GEO. If you look at the
Speaker 1: short interests a G EO not GEO, No, it's GEO,
Speaker 1: and short interest is pretty high. It's a thirty five
Speaker 1: per cent, So that's the potential short squeeze target. But
Speaker 1: it's not as clear. On Clean Energy Fuels. It just
Speaker 1: feels very much as high. I saw it on that
Speaker 1: and Wendy's yesterday wasn't that high, No, Wendy's. So Wendy's
Speaker 1: fits is interesting because it fits into this broader trend
Speaker 1: of very nostalgic names like very early two thousand's names
Speaker 1: like game Stop, AMC. BlackBerry expressed. Those are all names
Speaker 1: that I don't know, at least to me, they evoke
Speaker 1: a specific place and time and that you have seen
Speaker 1: a little bit of that. But in these names that
Speaker 1: we're moving today, I don't think anyone has any warm,
Speaker 1: fuzzy feelings attached to GEO. For example, that prison operator.
Speaker 1: I think that's fair to say, yeah, well, but but
Speaker 1: you know, we we were talking earlier before we get
Speaker 1: started a conversation we were having with Jail Webber, editor
Speaker 1: of Bloomber business Week magazine, because we have to think
Speaker 1: about how do we cover this because often there's a
Speaker 1: fair amount of volume in these names, right, and so
Speaker 1: when you look at the markets overall, but I do
Speaker 1: feel like when you look at market caps and things,
Speaker 1: there's such a small sliver of our financial and market
Speaker 1: universe exactly. It almost feels like Russian roulette, where suddenly
Speaker 1: one day you're gonna wake up and there's just gonna
Speaker 1: be crazy volumes in names that really haven't seen anything
Speaker 1: like it. And it's interesting to me. I mean, it's
Speaker 1: interesting to try to track this ball of money around
Speaker 1: the markets. But it's also interesting to see professional investors
Speaker 1: trying to adapt to it, because I mean, what do
Speaker 1: you do? And there's actually a great article on the
Speaker 1: terminal right now from my colleague Lou Wang, who woke
Speaker 1: to who spoke to Chris Harvey from Walls Fargo, who
Speaker 1: who said that his hedge fund clients they don't want
Speaker 1: to short any specific names. They're afraid of getting squeezed,
Speaker 1: so they're moving into shorting e t f s and
Speaker 1: really large companies because you don't want to end up
Speaker 1: in this situation if you have a lot of money
Speaker 1: on the line. Well, I wonder about the chatter that's
Speaker 1: happening in places like Wall Street Bets right now, and
Speaker 1: it's a place that you spend a lot of time
Speaker 1: and look it's for work, saying I do, because that's
Speaker 1: where you're lurking on most days, and I do. I
Speaker 1: do wonder what they're saying about these companies today. And
Speaker 1: also if it's possible for some hedge fund to come
Speaker 1: in and you know, front run essentially the conversation in
Speaker 1: there and say, wait a second, we're going to get
Speaker 1: in early on this because we know that when people
Speaker 1: talk about this in this forum, there's increased activity. I mean,
Speaker 1: you have heard a few investors or hedge funds come
Speaker 1: out and say that you know, we are basically doing that.
Speaker 1: And if you do scroll through these pages, I mean
Speaker 1: you can kind of get a sense of people are
Speaker 1: trying to like put together blueprints, trying to identify short
Speaker 1: potential short squeeze targets. So there is a sense that,
Speaker 1: I mean, this can't all be retail. At a certain point,
Speaker 1: you probably see some more institutional some professional names come
Speaker 1: in and try to capitalize on that. What's interesting is
Speaker 1: Clean Energy Fuels UM is up six out of the
Speaker 1: past seven trading sessions for a gain of nearly forty percent.
Speaker 1: It's up like forties six or five. I mean these
Speaker 1: are names. If you look at GEO Group, it's up
Speaker 1: eight of the past nine trading days for a gain
Speaker 1: of eighty two percent. So I mean it's it's half
Speaker 1: being over a week's period of time. And I do
Speaker 1: wonder when does it hit your radar or our radar
Speaker 1: that we put it in a story on the Bloomberg.
Speaker 1: I think that's a great point, and that was something
Speaker 1: I was thinking about with clover Health earlier. Today. It's
Speaker 1: not doing so well today, but had an amazing day yesterday,
Speaker 1: and you saw options volume just spike yesterday. But if
Speaker 1: you look into April for example, or even last week,
Speaker 1: a few weeks leading up to yesterday, it was something
Speaker 1: you saw building. So it feels like it doesn't It's
Speaker 1: not like turning on a light switch. It's is something
Speaker 1: that builds, and but it just feels like it explodes
Speaker 1: onto the radar on one specific day. And when you
Speaker 1: get double digit moves right, and I do wonder like,
Speaker 1: is there some formula or algorithm that people are trying
Speaker 1: to figure out that how do you track? Do you
Speaker 1: all of these meme stocks go up for about eight days?
Speaker 1: You know what I mean? Like I do wonder like
Speaker 1: what is how do we kind of find what the
Speaker 1: next one is? Because I knew Bloomberg Intelligence has been
Speaker 1: looking at this stuff. Yeah, and that's something that I mean,
Speaker 1: my colleagues and I are trying to determine is there
Speaker 1: some pattern here? But then you have companies like a
Speaker 1: m C and Game Stop that just are constantly in
Speaker 1: the conversation that started the conversation, still in it. Well,
Speaker 1: you've got lots of work to do. From Bloomberg News
Speaker 1: Cross as a reporter, also Bloomberg Quick Take co anchor.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. All right,
Speaker 1: I can't sing this, but you know, Marguerite de Ville,
Speaker 1: it's definitely a hit song. I could. It's a chill
Speaker 1: state of mind. It's a multibillion dollar marketing empire, and Tim,
Speaker 1: it is a news attraction in Times Square. It is
Speaker 1: it's also the cover story for the new issue of
Speaker 1: Bloomberg business Week magazine. It's available on news stands and
Speaker 1: at bloomberg dot com slash business Week. Joining us now
Speaker 1: is Joel Webber, editor of Bloomberg business Week. He joins
Speaker 1: us right here in the Bloomberg Interactive Broker studio, and
Speaker 1: Austin Carr, technology reporter for Bloomberg News, joining us on
Speaker 1: the phone from l A Joel, I learned so much.
Speaker 1: I learned all I always learned when I read stories
Speaker 1: and delivered business. I had no idea that Marguerita Ville's
Speaker 1: empire was this big. That's the best thing about this
Speaker 1: story is that little I mean, you know Jimmy Buffett
Speaker 1: from music, I mean it's near and dear to me,
Speaker 1: um being the parenthead that I am. Uh. And the
Speaker 1: fact that he was able to turn one song into
Speaker 1: basically something that's even bigger than his music success. Um.
Speaker 1: This the scale of this empire is amazing and and
Speaker 1: it is a I'll call it a modest news hook.
Speaker 1: But they are in the process of opening Margaritaville in
Speaker 1: Times Square, right off Times Square on four Year Street,
Speaker 1: and it is the it feels just like the perfect
Speaker 1: time to take over Manhattan with Margaritaville right as the
Speaker 1: city reopens and uh, you know we're all vaccinated and
Speaker 1: get to go celebrate with you know, um, way too
Speaker 1: many margaritis, I'm sure. Um. So, so Austin rewind the
Speaker 1: clock a little bit. Tell us about how you got
Speaker 1: this story. So um. I actually started reporting this story
Speaker 1: because I had come across their frozen concoction maker, UM,
Speaker 1: which I would highly recommend. I think we described it
Speaker 1: in the story as the uh iPhone of adult beverage makers,
Speaker 1: and it very much is that. I mean, it's it's
Speaker 1: really a beautiful piece of machinery. And I just realized,
Speaker 1: oh my god, like if this company, Margaritaville, which I
Speaker 1: also had not associations to the song or to you know,
Speaker 1: a tequila hangover, but not to this sort of hardware
Speaker 1: maker or hotel empire um. And so I just started
Speaker 1: getting interested in diving deeper into the research, and that's
Speaker 1: where this story started, and we realized there was so
Speaker 1: much more when we started talking with Margaritaville, their executives
Speaker 1: in Florida and just realizing they were not only opening
Speaker 1: this three and seventy million dollar property in Times Square,
Speaker 1: but right now we're in the process of developing twenty
Speaker 1: five or twenty six or more properties around the globe,
Speaker 1: from retirement villages to boutique hotels, to resorts, to r
Speaker 1: V parks, parks, you name it. Uh. They're sort of
Speaker 1: really involved in so many different entities that that just
Speaker 1: sort of boggles the mind. How did it all get started?
Speaker 1: Often so we actually rewinds. Uh it goes back to
Speaker 1: the late nineties nineties. Uh. Margaritaville's CEO is a guy
Speaker 1: named John Colin. Uh, and he was moving down to
Speaker 1: Palm Beach uh and and met Jimmy Buffett through mutual friends.
Speaker 1: And he has been in private equity before, just working
Speaker 1: at a company that owned Long John Silver's and and
Speaker 1: later bought Snapple and was involved in consumer branding. And
Speaker 1: when at a Jimmy Buffett, he just realized this is
Speaker 1: the biggest brand there is. These parrot heads sort of uh,
Speaker 1: you know, just really enjoying themselves at this concert, moving
Speaker 1: in universities and could sort of sort of you know,
Speaker 1: win over more consumers than uh, you know, Long John
Speaker 1: Silver's ever could. And they started exploring John Colin and
Speaker 1: Jimmy whether or not they could build this into a
Speaker 1: larger empire. And the first thing that they opened was
Speaker 1: a big, massive restaurant in Orlando, UH near Universal Studios
Speaker 1: theme Park, which was sort of an ode to Jimmy
Speaker 1: Buffett and what he stood for in terms of Margaritaville's music, um,
Speaker 1: you know, sort of the general salt shaker vibe that
Speaker 1: he has. And they've built it from there throughout the
Speaker 1: two thousands, turning it into more restaurants, a beer brand
Speaker 1: with Anneiser Busch Um, and a lot of consumer goods,
Speaker 1: including that Daquary maker I mentioned, which which retails for
Speaker 1: up to five dollars. You sounded like that one. I
Speaker 1: have to ask Houston five hundred dollars on a deactory maker.
Speaker 1: You saw the Bolli version which only retails for three.
Speaker 1: I'm you know, don't checking. Don't worry, Jill. You we
Speaker 1: will prove that at the end of I think. Okay.
Speaker 1: But the interesting thing is, and we Tim and I
Speaker 1: were talking about this off air, it seems the model
Speaker 1: is very similar to President Trump's model of they don't
Speaker 1: own a lot, right, they don't own a ton of
Speaker 1: real estate behind all of this, they own a lot
Speaker 1: of I p intellectual property that's spread. It's what it's
Speaker 1: called an asset light model. UM. You know, that's Hilton has.
Speaker 1: I mean, that's frankly what European b has or uper
Speaker 1: has to UM. I think it's the one thing that
Speaker 1: they were extremely successful was in a way that perhaps uh,
Speaker 1: former President Trump was not, was just in terms of
Speaker 1: overseeing the quality of products they licensed their name to,
Speaker 1: enforcing strict quality standards, so they're they're very involved in
Speaker 1: the design process, the development resorts, and the branding that
Speaker 1: goes into these things, just to make sure they live
Speaker 1: up to their standards. So there's not sort of the
Speaker 1: equivalent of you know, there actually is a Margaritaville University.
Speaker 1: I was just going to ask if there was a
Speaker 1: Mary Niversity. It's a funny name they used for a
Speaker 1: college ambassador program just to sort of get younger fans
Speaker 1: on board, so they're not actually uh teaching kids. But
Speaker 1: it was I believe a lot more successful than Trump
Speaker 1: University was. But the in terms of just some of
Speaker 1: the other ecosystem products they have, Yeah, it's definitely that model.
Speaker 1: If they like to sort of make sure you're you're
Speaker 1: drinking Jimmy's beer at the same time you're buying Jimmy's tequila,
Speaker 1: staying at their branded restaurants and hopefully later on their hotels,
Speaker 1: their vacation cottages and so forth. So it's sort of
Speaker 1: products that feed into each other and this this this
Speaker 1: virtuous brand loop. So Austin, how do they get the
Speaker 1: next generation of parrot heads? You mentioned the Margarita Ville
Speaker 1: University of the Ambassador program, but but how do they
Speaker 1: make sure that this transcends age? Yeah? I think what
Speaker 1: they're trying to do is make sure that this is
Speaker 1: identified with more of a lifestyle rather than an individual.
Speaker 1: In other words, I think a lot of bands, no
Speaker 1: matter how old how young, will know that song and
Speaker 1: sort of can generally define what it stands for and
Speaker 1: sort of in terms of this beachy cash at a
Speaker 1: sort of sort of vacation island vibe, and that's what
Speaker 1: they're building up more of. Um. I talked to Warren
Speaker 1: Buffett for the story UM, and and that was one
Speaker 1: thing he stood for He sort of mentioned was that
Speaker 1: this idea that it's sort of, um, you know, Jimmy
Speaker 1: is is not just Jimmy. He's sort of an institution
Speaker 1: that stands for this overall lifestyle that you know, Lord
Speaker 1: knows Hyatt would like to have, Lord knows you know
Speaker 1: Airbnb would want to you know have in the sense
Speaker 1: that this stands for something more universal, and I think
Speaker 1: that's how they're going to go after younger fans. They
Speaker 1: also have, you know, land Shark beer, which you might
Speaker 1: have heard of, which is a competitor to Corona Um,
Speaker 1: and they have a lot of consumer goods that are
Speaker 1: targeting younger generations of fans that you know, are just
Speaker 1: different from your average parrot head. I would say, I
Speaker 1: think the article cover story, uh, it makes you look
Speaker 1: at your life and look at your choices, and like,
Speaker 1: you know, it makes me want to build a business
Speaker 1: empired inspired off of a song, and also makes me
Speaker 1: wish I were Austin Car and like have three dollar
Speaker 1: decrees that inspire these stories. So thank you, Austin. We're
Speaker 1: on our way. We'll go ahead. I was just gonna say,
Speaker 1: just to be clear, Joel, I did not expend then,
Speaker 1: needless to say, we're getting on a plane, We're coming over,
Speaker 1: and you've got to make some tagories or margarite is
Speaker 1: for us, um great stuff. Austin Car. It's the domestic
Speaker 1: cover story of Business Week. Magazine Tech Report, Bloomberg News,
Speaker 1: joining us from l A. Weber, editor Bloomberg Business Week.
Speaker 1: I gotta say I love that they the two buffets.
Speaker 1: No no relation though relation relation. Yeah, it's Jimmy is
Speaker 1: definitely the other buffet in our world, you know. But
Speaker 1: clearly that world's bigger than world, depending on your level
Speaker 1: of being a parenthead. Right, yes, exactly. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. So in about ninety minutes
Speaker 1: or so, we're gonna get earnings from the meme stock
Speaker 1: that started all I guess you could say we're talking
Speaker 1: about game stop. Yes, but do earnings even matter? I
Speaker 1: don't think they do. They've had a twenty one billion
Speaker 1: dollars in market value this year. It's one billion. It's
Speaker 1: the original, it's the it's the original meme stock, Carol,
Speaker 1: Yeah exactly. So all right, let's get some perspective, and
Speaker 1: lucky for us, Bloomberg News Equities reporter Bailey lips Shelter
Speaker 1: is with us on the phone in New York City.
Speaker 1: Barely good to have you here with Tim and myself.
Speaker 1: So as to mentioned the results that we get from
Speaker 1: Game Stop. The fundamental earnings and sales outlooked as it matter,
Speaker 1: not really all right, interviews over and let's you're looking
Speaker 1: from about one point one seven billion and quarterly revenue.
Speaker 1: But outside of that, there's really more of a focus
Speaker 1: on what's next. Obviously, they named Ryan Cohen chairman earlier
Speaker 1: today at their annual meeting, so that was a big
Speaker 1: news um peg and then he spoke to investors, which
Speaker 1: kind of took Reddit by storm. But for the most part,
Speaker 1: from a fundamental standpoint, I don't think you can get
Speaker 1: anyone to come out and say poleheartedly that earnings today
Speaker 1: actually matter given where the stocks trading. Okay, so Bailey,
Speaker 1: what is that future that big believers in games Stop,
Speaker 1: people who have been behind the stock for months? What
Speaker 1: does that future look like? How does it compete with
Speaker 1: Best Buy? How does it compete with Amazon? It's been
Speaker 1: pretty mom Cohen came out today saying that he thinks
Speaker 1: they're going in the right place and they have clear goals,
Speaker 1: but didn't offer too much um in the grand scheme
Speaker 1: of what that strategy looks like. Obviously, they've wiped out
Speaker 1: their dead they're working on closing down storefronts, which we're
Speaker 1: driving big losses. Before Cohen really pushed his way onto
Speaker 1: the board. Um, but from a grand scheme of things,
Speaker 1: the idea is that he'll be able to do what
Speaker 1: happened with Chuli. Obviously everyone said Chuli would be successful
Speaker 1: with your pet cos and pet Smarts, and then obviously
Speaker 1: online retailers. The video games is obviously much much more
Speaker 1: difficult because you can download game straight to the PlayStation
Speaker 1: or straight to your Xbox, and you don't really need
Speaker 1: a company to deliver those products, right especially you know,
Speaker 1: I do wonder is there a way like the Apple
Speaker 1: store has created an experience where you go in and
Speaker 1: play with products. I mean, you can order a lot
Speaker 1: of Apple stuff just online, right, you can easily do that.
Speaker 1: Is there a way for them to create some kind
Speaker 1: of experience at a game stop store that brings people
Speaker 1: in that somehow supports that retail environment. It seems far fetched,
Speaker 1: but I'm just curious. But that's been one of the
Speaker 1: things that, depending who you talk to and who are
Speaker 1: core believers, see as a potential option. Obviously, it's as
Speaker 1: you said, it is a bit parfessional, hard to wrap
Speaker 1: your mind around, but you could have them get into
Speaker 1: the gaming in some capacity, whether that's sponsoring or owning
Speaker 1: a team professionally, or building up kind of like a
Speaker 1: training ground built into the stores that you go and
Speaker 1: practice against peers um in person and online. But that's
Speaker 1: kind of one of these one of the things that
Speaker 1: more people I talked to you want to see that
Speaker 1: laid out. They want to see the future vision, vision,
Speaker 1: and something that can justify a lofty market value that's
Speaker 1: kind of much larger than what it was when it
Speaker 1: was trading for about four dollars last a lot. Bailey,
Speaker 1: you mentioned Ryan Cohen. Talk a little bit about him
Speaker 1: and how important he is to the Game Stops story,
Speaker 1: at least as the retail investors see it. He's what
Speaker 1: you got behind when he came out with r C
Speaker 1: Veners and bought a twelve thirteen take in the company,
Speaker 1: pushed his way onto the board and obviously is now
Speaker 1: chairman um the company is looking for a CEO. So
Speaker 1: it's truly are investing in Game Stop. You're a believer
Speaker 1: that Ryan when he's going to come in and he's
Speaker 1: going to do what he's able to do with Chewy,
Speaker 1: and there is a long term vision where it can
Speaker 1: be very successful. I mean that's only thirtain five years
Speaker 1: old co founder. Obviously, if Chewy turned into a private
Speaker 1: equity investor and has wiped up the board and really
Speaker 1: brought in alumni from Chewey and Amazon with a push
Speaker 1: towards consumer experience. So the goal is, um to kind
Speaker 1: of put your eggs in the basket. Hold on for
Speaker 1: a guy who makes a lot of jokes on Twitter
Speaker 1: with memes, but seems very locked in and obviously pretty
Speaker 1: closed off and hiding his cards. But you do wonder.
Speaker 1: I mean, they did lease write a huge distribution center
Speaker 1: right seven square feet uh in Pennsylvania to improve its
Speaker 1: distribution and delivery, so they obviously have high expectations. I
Speaker 1: do wonder, as you said, Bailey, they've gotten rid of
Speaker 1: their debts, so they have certainly improved their financial house.
Speaker 1: Are their acquisitions they could make that could totally kind
Speaker 1: of turn this company into something different that ultimately made
Speaker 1: be as spun out or sold or acquired by somebody else.
Speaker 1: I think that's the question, Um, what what is the
Speaker 1: big dep what is the big leap for game Stop?
Speaker 1: Do they get into game publishing? Maybe I don't know.
Speaker 1: Do they find a way to partner up with some
Speaker 1: of the game producers, or as you said, a real
Speaker 1: in person experience you look at like David Busters. Is
Speaker 1: that something in a future to be like, Uh, it's
Speaker 1: really remains to be seen. Bailey, we're you're you're you're
Speaker 1: one of the guys who covers meme stocks. Here you're
Speaker 1: one of the people who covers meme stocks. And I'm wondering,
Speaker 1: did you think that, you know, five months after what
Speaker 1: we saw earlier in the year with Game Stop, we'd
Speaker 1: still be talking about game Stop or did you think
Speaker 1: that this would be short lived? I thought we would
Speaker 1: be talking about it. I did not imagine that we
Speaker 1: would see a trend where the basket of the O
Speaker 1: G Memes stock is treading where it was back in
Speaker 1: late January. And I wouldn't have thought that AMC would
Speaker 1: take the world by storm like it has Windy's um
Speaker 1: you name the company clean Energy Tools. People were making
Speaker 1: jokes about cow poop on read it. I did not
Speaker 1: imagine you did big of a deal and this closely
Speaker 1: at touched to buy a core financial institutions. I just
Speaker 1: you know, one of the fun things I did, Bailey
Speaker 1: earlier today was like who owns game Stop and it's
Speaker 1: black Rock. I mean I understands probably in an index fund,
Speaker 1: right and stuff. But and I know the's question is
Speaker 1: about whether it moves out of the Russell correct same
Speaker 1: with you and same with AMC. Right. So I mean
Speaker 1: there's a lot of big institutional investors. But you know, uh,
Speaker 1: Ryan cautioning that we've got a lot of work in
Speaker 1: front of us. I mean, this is not something that
Speaker 1: they flip a switch over night, Bailly, and it's a
Speaker 1: different company or a different story exactly. And it's very
Speaker 1: tough because as an investor, um if your an institution
Speaker 1: almost twenty four billion dollars in market cap, is really
Speaker 1: tough to get behind when you're just talking about a
Speaker 1: vision and what it could be in this curriculaane task
Speaker 1: that is to reinvent and recreate Game Stop and making
Speaker 1: a core part of beginning then ecosystem. It's obviously very
Speaker 1: optimistic and there is a huge growth potential, but what
Speaker 1: does that look like? Because if you're managing a good
Speaker 1: amount of money, it's hard to get behind a guy
Speaker 1: who was great one time with evaluation where it is
Speaker 1: now and let the stock trading got dollars when it
Speaker 1: was again four dollars about eleven months ago. All right,
Speaker 1: we'll be watching nonetheless for Game Stop earnings and we'll
Speaker 1: see what happens on that report. Bailey, great stuff, as
Speaker 1: I always blew R News Equities reporter Bailey Lipshelts brother
Speaker 1: a journal Yeah, but you let me drive. Oh no, no, no, no, home, honey, please,
Speaker 1: I'll do the right gravel. Let me. I want to drive,
Speaker 1: all Just drive, baby. It's good questions trying. This is
Speaker 1: the drive to the globe than on Bloomberg Radio. All right,
Speaker 1: let's get to it. Everyone. Just about ten and a
Speaker 1: half minutes left in today's trading session. It is time
Speaker 1: for the drive to the clothes. We've been bouncing around,
Speaker 1: but we are just we've took another leg down in
Speaker 1: the last hour, so so we're near a loads of
Speaker 1: the session. Let's bring Julian Brigden, co founder and president
Speaker 1: of Macro Intelligence. Are m I two partners. It's a
Speaker 1: global macroeconomic research firm. It's been around for a decade.
Speaker 1: Julian's with us on the phone in Colorado. Julian, how
Speaker 1: are you. I'm fantastic, Thank you very much. I was
Speaker 1: just listening to the weather forecast and relazy realizing why
Speaker 1: I'm glad I moved to Colorado. Hey way to rub
Speaker 1: it in, Okay, exactly three hundred days of sunshiny year
Speaker 1: skiing in the in the winter. All Right, it's a
Speaker 1: little rough here right now. Not for you, though, UM
Speaker 1: markets makes sense of it. For us right now, we're
Speaker 1: we did see a leg down in the last hour.
Speaker 1: We're down undred and thirty seven, is Charlie just mentioned
Speaker 1: on the Dow. So little change the overall when it
Speaker 1: comes to the SMP and NASDAC. It feels like we're
Speaker 1: waiting for that inflation report tomorrow. But how do you
Speaker 1: see the trade right now? So I think, I mean,
Speaker 1: I think these are incredibly calm markets. I mean there's
Speaker 1: really very very little going on. It's almost as though
Speaker 1: the sort of worlds decided post COVID or sending the
Speaker 1: U S has that they're going to disappear on vacation
Speaker 1: early for the summer. But they do think, what do
Speaker 1: you mean calm, the lack of volatility or just what
Speaker 1: what do you mean just lack of lack of clear direction.
Speaker 1: I think, to be briefly honest, I mean, you know,
Speaker 1: we were stuck in relatively big ranges. Whether you look
Speaker 1: at the effects. Some commodities have come off the board
Speaker 1: a little bit, equities really sort of quite quiet and
Speaker 1: a little boring, and volumes that seemed to be very
Speaker 1: lack luster. As I said, it almost feels like an
Speaker 1: August market a month early or too early. But you
Speaker 1: you remember in summer's past, at least pre COVID that
Speaker 1: we saw I want to say, in eighteen and nineteen,
Speaker 1: maybe even before that, that often all of a sudden
Speaker 1: late summer. I only know because I'm often on vacation
Speaker 1: that the market comes apart. We have a big sell off, yes,
Speaker 1: And I don't really see that so much this year.
Speaker 1: I've got to be honest with you. I mean I think, um,
Speaker 1: you know, there are some very important events coming up.
Speaker 1: We do have obviously the ECB tomorrow, and then also
Speaker 1: we've got this inflation print. But I think, you know,
Speaker 1: when I look at the inflation store and I think
Speaker 1: it's a huge story. And I'm not as sanguine as
Speaker 1: the FED when it comes to this assumption of transitory
Speaker 1: at least I think from a market sex perspective. I mean,
Speaker 1: I think the FED would argue that their transitory maybe
Speaker 1: two years out. I really don't think the market is
Speaker 1: going to give them the benefits that about UM. But
Speaker 1: when I look at tomorrow, I'm looking for a pretty
Speaker 1: high number. Our work suggests that we could be looking
Speaker 1: for a number in the very high fives, possibly as
Speaker 1: high as six. For the headline CPI UM. I think, yeah,
Speaker 1: it's just look I mean in part, and it's just
Speaker 1: base effect. It's a natural way of doing that. But
Speaker 1: when you look at just look at simple things like
Speaker 1: how high PPI is going UM and the rate of
Speaker 1: change on those, you can pretty much get a pretty
Speaker 1: good estimate for cp I. And I know J. Powell
Speaker 1: has told us that companies will be reluctant to pass
Speaker 1: on price increases, but I'm calling his bluff on that one.
Speaker 1: I just I think we can see it in every
Speaker 1: single CEO conference call that when you create essentially in
Speaker 1: elastic demand by you know, stimulating the economy to this
Speaker 1: degree and then opening up, then companies do have pricing power,
Speaker 1: and I think CEOs are taking it with both hands
Speaker 1: and using that to push on those increases. So I
Speaker 1: think you get a high print tomorrow, then I think
Speaker 1: we settle down and it's a it's a waiting game
Speaker 1: because we now have to and that the definition is
Speaker 1: we have to discuss this transitory and that doesn't happen
Speaker 1: in a month. It might happen in three months, it
Speaker 1: might happen in six months. Um. But it comes as
Speaker 1: much more as I said, it becomes a weighting game
Speaker 1: and not a sort of where's the peak, let's pickin
Speaker 1: that tail on that if if there is a high
Speaker 1: print tomorrow, what happens to the equity market? Okay, I
Speaker 1: mean it really Well, the first question is what happens
Speaker 1: to the bomb market? I mean the bomber has settled down? Yeah,
Speaker 1: I mean really coming quite a lot. And I do
Speaker 1: think in part Carol, that's because people recognize this is
Speaker 1: likely to be the high print, right, you know, just
Speaker 1: from a base effect perspective. And then I said, we
Speaker 1: go into this longer before elongated debate. Um. But obviously
Speaker 1: I think if you saw a number of this magnitude, mechanically,
Speaker 1: you've got to see a move in things like break evens,
Speaker 1: which should push push put some pression on on on nominals. Well, Jilian,
Speaker 1: but you know most of us, as I know, I've
Speaker 1: got my logical brain and I've got my oh my god,
Speaker 1: look at that print. Our Bloomberg intelligence team has been
Speaker 1: reminding us that it's all going to take more time
Speaker 1: when it comes to these inflation numbers and really economic
Speaker 1: data points, and they're talking about in two to fully
Speaker 1: separate when it comes to things like you know, the
Speaker 1: transfer tory forces pushing prices higher than durable increases inflation,
Speaker 1: we will we be logical though, when we see kind
Speaker 1: of a crazy print tomorrow. Do you think, especially when
Speaker 1: we're waiting kind of on earnings and that next batch
Speaker 1: of reports where CEO is give us some indication of
Speaker 1: what's going on. So look, I mean, I think there's
Speaker 1: enough stimulus, There is enough economic momentum in the economy.
Speaker 1: I mean, if I just look at so the invatory cycle,
Speaker 1: it's only really starting now and we can barely get
Speaker 1: ahead of the thing. When I look at the capex cycle,
Speaker 1: to me, this seems early cycled type stuff. I mean,
Speaker 1: I think we've got enough economic remains to keep this
Speaker 1: economy going into the middle of next year. So you know, look,
Speaker 1: if you get a knee joke reaction on the NASTAC
Speaker 1: and I do think that's a market that still looks
Speaker 1: very very expensive, or should we say growth in inverted
Speaker 1: commas versus value looks still extraordinarily expensive even where the
Speaker 1: bond market is now. I mean, our work suggests that
Speaker 1: that ratio between CDs and BE growth indexes and BE
Speaker 1: value index should be even where bond deals are now.
Speaker 1: Um that we could continue some of this sort of
Speaker 1: rotation game and you could get a knee jerk reaction tomorrow. UM,
Speaker 1: I'd love to say, I think it's going to be
Speaker 1: extraordinarily volatile, because that's what makes our day. I think
Speaker 1: we're going to be turning our wheels for a little bit.
Speaker 1: How do you think equities are priced right now relative
Speaker 1: to where you think the economy is going, because you
Speaker 1: said the economy can continue strong into Excuse me, but
Speaker 1: I'm wondering what's priced into equities right now? And you
Speaker 1: said now that you think you're both so I think
Speaker 1: I think well, I think in general, I think the
Speaker 1: US looks extraordinarily expensive. Um. You know, I like to
Speaker 1: be invested in exuities. I think you know, macro guys
Speaker 1: and we always get a bad rap for this. You
Speaker 1: know constantly want to pick the tops and things. But
Speaker 1: we all know that you don't really make that much
Speaker 1: money doing that. Long term, you've got to be invested
Speaker 1: um And when I look at US markets, they are
Speaker 1: extraordinarily high and extraordinarily high. But just to wrap up Julian,
Speaker 1: maybe not though, if that's where the growth is ultimately like,
Speaker 1: if the US market is leading in terms of growth, right,
Speaker 1: don't we have to compare it to kind of what's
Speaker 1: going on around the rest of the world. Not really,
Speaker 1: because it's I think one factor that people don't necessarily
Speaker 1: take into account is the role of the dollar and
Speaker 1: the ability of the dollars the sucking that flow of
Speaker 1: funds to prop up those equities. And I think now
Speaker 1: that the dollar has started what I think is going
Speaker 1: to be a multi year decline. I mean the sort
Speaker 1: of thing that we saw between say two thousand and
Speaker 1: two and two thousand and eight, where the dollar drop um.
Speaker 1: US equities tend to underperform in that environment because because
Speaker 1: foreign equity investors tend to take their money home because
Speaker 1: they don't hedge. So every day when they wake up
Speaker 1: their statement and they see, oh, well look they have
Speaker 1: that up a few percent, wait a second, the dollars
Speaker 1: down and equally offsetting them out they're not making any
Speaker 1: money in their currency, so I think, to me, that's
Speaker 1: an important point going forward. It just go ahead, girl,
Speaker 1: go ahead. I was just gonna ask about wage growth
Speaker 1: and how important wage growth is because that, yeah, seconds
Speaker 1: extraordinarily important. And I think the big mistake that FED
Speaker 1: is making is that they viewed this as a O
Speaker 1: A CO nine type situation. When you look at the numbers,
Speaker 1: they look nothing like that. We're not dropping anywhere close
Speaker 1: to that degree. So we're starting at a much high level. Tim. Yeah,
Speaker 1: it definitely feels like a different thing. What fun come back?
Speaker 1: Please soon. Julian bringed In, his co found and president
Speaker 1: of the Macro of Macro Intelligence are am I, two partners,
Speaker 1: as we mentioned, a global macro economic research burn from
Speaker 1: that's been around for about a decade. Thanks for listening
Speaker 1: to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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