Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Speaker 1: Wait inside from the reporters and editors who bring you
Speaker 1: America's most trusted business magazine plus global business, finance and
Speaker 1: tech news. The Bloomberg Business Week Podcast with Carol Messer
Speaker 1: and Tim Stenebeck from Bloomberg Radio.
Speaker 2: You folks, we are of course continuing to follow the
Speaker 2: latest on the accident at Baltimore's Francis Scott Keybridge. Six
Speaker 2: people are presumed dead after search officials just pointing that
Speaker 2: out press conference. So loss of life continues to be
Speaker 2: obviously top of mind. The bridge, as you know, collapsing
Speaker 2: in just a matter of seconds yesterday. But the consequence
Speaker 2: is tim the catastrophic consequences could be set to stretch
Speaker 2: out for weeks.
Speaker 3: Yeah, as much as two point five million tons of coal,
Speaker 3: hundreds of cars made by Ford and General Motors, and
Speaker 3: lumber and gypsum are threatened with disruption. It's just another
Speaker 3: pot factor that may need to go into the US
Speaker 3: economic model or not if the logistical world can adapt
Speaker 3: quickly so that Carol is where we go now it is.
Speaker 2: Let's get to our Key interview on this Wednesday back
Speaker 2: with US is Bloomberg News International Economics and Policy correspondent
Speaker 2: Mike McKee. He's here in our studio in New York City,
Speaker 2: along with Bloomberg News Global Economy reporter and occurr and
Speaker 2: he's out there in our Washington, DC bureau. First up, Mike,
Speaker 2: I do kind of want to start with you. You
Speaker 2: do put always everything that's happening in our world into
Speaker 2: the economic context for us. Are we hearing anything from
Speaker 2: FED officials or from the economics community about the concern
Speaker 2: that this will have on supply chains or is it
Speaker 2: still kind of too early.
Speaker 4: Nothink from the Fed yet? We have heard from economists
Speaker 4: on Wall Street who put pencil to paper and try
Speaker 4: to figure out what the impacts might be. And while
Speaker 4: this is a terrible tragedy in human terms, and it
Speaker 4: is going to have an economic impact, certainly on Baltimore
Speaker 4: for quite some time, it is not going to have
Speaker 4: a major impact on the overall UA economy. Tim brought
Speaker 4: up the idea of how quickly logistics can adapt, and
Speaker 4: we're being told by everybody in that business that they
Speaker 4: can adapt fairly quickly. The biggest thing, as you mentioned,
Speaker 4: is that automobiles. It was the biggest port for import
Speaker 4: export of automobiles. They've got to get the port open
Speaker 4: for about half of it. BW and BMW are outside
Speaker 4: of the bridge, so they can still take in some cars,
Speaker 4: and we understand may take in other people's as well,
Speaker 4: and there are other ports. Savannah's built up a big
Speaker 4: what they call roll on roll off capability and so
Speaker 4: they will take some as well. So it looks like
Speaker 4: they may be able to work this out relatively quickly now.
Speaker 4: Pete Buddha Judge was just briefing at the White House.
Speaker 4: He was asked how long it will take to get
Speaker 4: the port open, which is going to be the key
Speaker 4: economic question, and he said it's still too early to tell.
Speaker 4: They're trying to figure it out. It'll be up to
Speaker 4: how fast to the core of engineers can get Iron
Speaker 4: out of the way out of the harbor.
Speaker 3: Right, hey, and come on in here, because Mike just
Speaker 3: went through some of those individual companies and what they
Speaker 3: could do to adapt. But as you and the team
Speaker 3: writing the Economics Daily newsletter out earlier today, the US
Speaker 3: economy is in a different position right now. It's in
Speaker 3: a much better position than it was a few years
Speaker 3: ago to handle a challenge such as this, do we
Speaker 3: have the pandemic to thank for this or is it
Speaker 3: something else?
Speaker 5: Yeah, So anytime we got a kind of a supply
Speaker 5: chain scare, it's always benchmarked against what happened in the pandemic,
Speaker 5: which was such an unusual time. We had this year
Speaker 5: in the Red Sea crisis a you know, earlier part
Speaker 5: of this year, people were saying, is it going to
Speaker 5: be another global supply crunch? And of course now we
Speaker 5: have this disaster yesterday with the human tragedy first and foremost,
Speaker 5: with people asking what will this mean for the supply
Speaker 5: chain story. I think, as Mike was saying, it's more
Speaker 5: benign this time around, because there are a couple of differences.
Speaker 5: There's a lot of capacity on international and shipping at
Speaker 5: the moment, a lot of spare containers, a lot of
Speaker 5: spare ships. Sure rates have gone up a bit, but
Speaker 5: it's there, it's available if needed.
Speaker 3: That's number one. And number two.
Speaker 5: Of course, demand for goods is not like it was
Speaker 5: during the pandemic. So one of the reasons that there
Speaker 5: was such a choke point at ports and in manufacturers
Speaker 5: around the world a few years ago was just the
Speaker 5: share demand by people in the US spending their money
Speaker 5: staying at home buying the stuff that they need. That's
Speaker 5: not really there now. The hot side of the economy
Speaker 5: is more on the service side of things, So that's
Speaker 5: another reason why it's not expected to be, you know,
Speaker 5: the complete choke point that you might suggest on paper.
Speaker 5: And then as Mike's outlining, there's other options within the US.
Speaker 5: You got the West Coast for other alternative ports. There's
Speaker 5: road freight options to take some of this. So when
Speaker 5: you stack it up, it's certainly a complication. It's certainly
Speaker 5: a major issue for the regional economy up there around Baltimore,
Speaker 5: but I don't think anyone's yet suggesting this is going
Speaker 5: to be a major, major supply choke for the US
Speaker 5: or the global economy.
Speaker 4: One thing you just mentioned that Secretary of Budha Judge
Speaker 4: brought up as after the pandemic, the Biden administration set
Speaker 4: up a command post in the Transportation Department for logistics,
Speaker 4: and they're activating that now so that they can work
Speaker 4: with not just the UPS's and the Fedexes and the
Speaker 4: trucking companies in the area, but all the smaller companies
Speaker 4: in the area that need to coordinate getting in and
Speaker 4: out and getting their stuff together. So he was suggesting
Speaker 4: that that might make it easier for particularly smaller companies
Speaker 4: to adjust.
Speaker 6: Yeah.
Speaker 2: Right, if you remember logistics, it's the big guys, but
Speaker 2: there's a lot of little players too that get all
Speaker 2: that stuff to us. Having said that, Mike, right during
Speaker 2: the pandemic, as and I was pointing out, we were
Speaker 2: buying so much stuff because we couldn't go anywhere. Now
Speaker 2: we just want to go anywhere. And in my house too,
Speaker 2: I'm like, I'm done with this stuff.
Speaker 3: You don't need another couch. You're not going to need anything.
Speaker 4: I hope you're not going to drive through Baltimore.
Speaker 3: I'm not anytime soon.
Speaker 2: Having said that, goods inflation it's come down way, like
Speaker 2: where are we And if we do see a little
Speaker 2: bit of pressure on the good side, can we afford
Speaker 2: that economy?
Speaker 4: Yes, we could afford it. It was going down for
Speaker 4: months and months, and then in the last couple of months,
Speaker 4: goods inflation has gone up a little bit, and that
Speaker 4: is something the Fed is keeping an eye on because
Speaker 4: if it starts to if it continues to do that
Speaker 4: and picks up speed, then that's more of a concern.
Speaker 4: They did expect goods inflation to flatten out, and basically
Speaker 4: that's where we are with some minor increases. So we'll
Speaker 4: have to see if this does push any prices higher.
Speaker 4: Probably not, because of the fact that the country is
Speaker 4: so big and this is such a small area in
Speaker 4: terms of prices that will be affected. New car prices
Speaker 4: have gone down, they're going down now, actually disinflating, and
Speaker 4: so even if this puts a little straight on auto inventories,
Speaker 4: shouldn't raise prices too much.
Speaker 3: Might do we expect to hear from the FED at
Speaker 3: all on this?
Speaker 4: Oh? I would imagine that FED officials who speak will
Speaker 4: get asked about it. I would imagine they will say this, Jaye, how.
Speaker 2: Is are you talking on Friday?
Speaker 3: Friday?
Speaker 4: They will say the same thing that everybody else is saying.
Speaker 4: It All the officials at this point is we just
Speaker 4: don't know. We have to see how this plays out. Obviously,
Speaker 4: there are logistical issues around the world right now, from
Speaker 4: the Red Sea to Africa to.
Speaker 3: Asia and so all that.
Speaker 4: Will play into this, but it doesn't look like at
Speaker 4: this point it would be huge. But I don't think
Speaker 4: they have a good handle on it.
Speaker 2: And another element to this is certainly the job market
Speaker 2: right we're essentially back at full employment. I mean, how
Speaker 2: does that so that if one other port somewhere needs
Speaker 2: more workers are sown and so forth to pick up
Speaker 2: the slack as a result of what's going on in Baltimore,
Speaker 2: that's a positive.
Speaker 5: I'm assuming, well, that's the hopeful case that you know,
Speaker 5: people are back in the workforce, they are available, and
Speaker 5: the flexibility there. But you know, it depends, you know,
Speaker 5: if there was a real crunch on at the ports,
Speaker 5: remember the threat of labor action in some of the
Speaker 5: ports as well. You know, not benign to would be tested.
Speaker 5: Because we know that broadly speaking, the jobs market's so
Speaker 5: strong and there are plenty of employers in America complaining
Speaker 5: that they can't get stuff so right here right now,
Speaker 5: as we heard the White House say yesterday, the jobs
Speaker 5: market is in good order. People are there and working.
Speaker 5: That's a plus when you have something like this happening.
Speaker 5: But of course it's not hard to see how the
Speaker 5: labor market will be stretched a bit thin if there
Speaker 5: was a further stress test.
Speaker 4: One interesting aspect is that it will take time to
Speaker 4: get the port open, and the job's survey is taken
Speaker 4: during the week that includes the twelfth of the month.
Speaker 4: So if they're not open in two weeks, there's one
Speaker 4: hundred and forty thousand workers at the Port of Baltimore,
Speaker 4: and if they can't, they have stuff that's come in
Speaker 4: already that they're working and moving out. But if all
Speaker 4: that stuff moves out it isn't replaced, then you could
Speaker 4: have people who are laid off, and it could show
Speaker 4: up in the April jobs report. I mean, hopefully it's
Speaker 4: only temporary, but one hundred and forty thousand a lot
Speaker 4: of people who wouldn't who might not be at.
Speaker 3: It's not like, to Mike's point, those one hundred and
Speaker 3: forty thousand folks could pack up and go south to
Speaker 3: another port, or go north to the Port of New
Speaker 3: York and New Jersey. Is their capacity? You mentioned capacity
Speaker 3: on ships, but is there actual number of workers in
Speaker 3: capacity at the ports to accept more well.
Speaker 5: As I say, one of the big concerns of the
Speaker 5: ports around the US at the moment is the threat
Speaker 5: of strike action. If that was to go ahead, that
Speaker 5: would potentially cause significant disruption. But I think beyond that,
Speaker 5: my understanding is that ports are pretty much handling capacity
Speaker 5: at the moment and even with the extra capacity that's
Speaker 5: going to have to be spread out from Baltimore. Everyone
Speaker 5: I spoke to you yesterday said it can be absorbed
Speaker 5: into the system, but will just take a bit of
Speaker 5: reshuffling up and down the East coast and maybe across
Speaker 5: the West coast. I don't think that's going to be
Speaker 5: the primary concern. The bigger issue is going is I
Speaker 5: think effectively going to be on the port itself. How
Speaker 5: long will this block a germain? How long will it
Speaker 5: take to get that port reopened again, and how long,
Speaker 5: of course will take the bridge to get built. Everyone
Speaker 5: I've spoken to say that the rest of the just
Speaker 5: six network should be able to absorb what's going to
Speaker 5: happen over to coin months.
Speaker 2: All right, one thing I want to just kind of pivot.
Speaker 2: We've got about four minutes or so left here, and
Speaker 2: I'm thinking, Mike, certainly about the Friday inflation read. You
Speaker 2: guys are going to be here live reporting it out.
Speaker 1: Yeah.
Speaker 4: Jen Tecker was talking about people who get days off.
Speaker 2: Oh, come on, you love this stuff. Jay Powell's going
Speaker 2: to speak a few hours after that inflation reading. What's
Speaker 2: top of mine? And then I want to kind of
Speaker 2: spin it to you and about kind of the global
Speaker 2: inflation picture, because I do feel like we focus on
Speaker 2: the US, but you know, we got to kind of
Speaker 2: think about what's happening around the globe. But let's talk
Speaker 2: about Friday's data.
Speaker 4: Well, Friday is the income spending in PCEE numbers for
Speaker 4: the latest month for February, and it's it comes out
Speaker 4: much later than CPI, but the Fed follows the PCEE
Speaker 4: inflation numbers, so they're going to be very important, and
Speaker 4: they're expected to rise just a little bit the way
Speaker 4: that CPI did, but not as much as we saw
Speaker 4: in CPI, so there will be a lot of attention
Speaker 4: paid to those. We also get the income and spending numbers.
Speaker 4: Retail sales we're not particularly great, so there'll be some
Speaker 4: focus on whether Americans are still spending once you fold
Speaker 4: in the services. I mean, you're taking your trips, you're
Speaker 4: doing services, you're not buying goods.
Speaker 3: But we need to see some strength there.
Speaker 4: The one thing we have seen on a regular basis
Speaker 4: is that incomes have been relatively strong, particularly when you
Speaker 4: look at wages and salaries, and if that continues, then
Speaker 4: you relax a little bit about the spending, and that
Speaker 4: you know that people can afford it. They tend to
Speaker 4: spend what they earn. So that's why we're looking at
Speaker 4: all that, and then of course we get almost a
Speaker 4: real time reaction from the chairman. I'm sure first question
Speaker 4: will probably be the inflation numbers that day, and so
Speaker 4: we'll get a sort of set up. It's very early.
Speaker 4: They just met last week and we don't have another
Speaker 4: FED meeting till May first. First, so you have to
Speaker 4: kind of take anything. Jay pol says, not with a
Speaker 4: grain of salt. But obviously it's going to be a while.
Speaker 4: He could change his mind depending on what other data
Speaker 4: we get. But you know, the markets come Monday morning
Speaker 4: are all going to come in and react to it.
Speaker 4: And if you get notes from the bond market people,
Speaker 4: they're not really happy that he's doing this on a
Speaker 4: day when the markets are closed.
Speaker 2: You know, Josenthalen is you know, five things to watch
Speaker 2: every morning, and we all kind of read through it.
Speaker 2: And one of the things he was looking at is
Speaker 2: global inflation and a Canadian CPI for February grew less
Speaker 2: than expectations. You can flight inflation falling to its lowest
Speaker 2: level in over two years. Coming in also cooler than expected.
Speaker 2: I think Spain's preliminary harmonized CPI measure was less than
Speaker 2: expected slightly. I mean, and as he writes, every economy
Speaker 2: has its own story, but we are seeing a lot
Speaker 2: of it feels like correlation between global economies and global inflation.
Speaker 2: What do we know about that, what's the importance of
Speaker 2: that and what it tells us maybe about what's going
Speaker 2: on more globally around the world when it comes to
Speaker 2: price pressures.
Speaker 5: Carol, Absolutely, inflation's coming off right around the world. I
Speaker 5: heard an economists this morning actually make the point that
Speaker 5: in Europe inflation is going to come off much quicker
Speaker 5: than people anticipate, and that's going to clear away from
Speaker 5: mortgage rates, boring costs come down. Around the world, it's
Speaker 5: a very similar story. I mean, the US has had
Speaker 5: a bit of a scare earlier this year, as Mike
Speaker 5: was alluding to there, but broadly speaking is on track
Speaker 5: everywhere else. Let's not forget that the world's number two economy, China,
Speaker 5: is battling deflation. They've never had the inflation outbreak to
Speaker 5: begin with, but the other are Plenty of analysts will
Speaker 5: tell you that when Shawn is battling deflation that will
Speaker 5: take pressure off the global prices as well. So everyone
Speaker 5: I speak to you and everything I read suggest that
Speaker 5: this remains the year of this inflation around the world.
Speaker 5: Boring costs and industrates are going to come down. Switzerland
Speaker 5: has already moved, they had room to do so, of course,
Speaker 5: but several others are expected to follow suit, and I
Speaker 5: think once we get to midyear, you'll hear a loup
Speaker 5: more chatter around which major tuns of mind would be
Speaker 5: going first and by how much.
Speaker 4: Mike's final thought, well, I think the one thing we
Speaker 4: want to watch, particularly because it's a political year here
Speaker 4: in the United States, gasoline prices. Oil prices have been
Speaker 4: going up. We're getting into the season where there's more
Speaker 4: oil demand and more gasoline demand, so that'll put some
Speaker 4: pressure on prices, which would push headline inflation higher. That
Speaker 4: is a certain concern to the FED because they look
Speaker 4: at headline inflation. But it's also going to be a
Speaker 4: factor in probably the political races.
Speaker 2: I care when I go to the pump.
Speaker 3: Don't you care what everybody cares? That's everybody cares about
Speaker 3: the pump big time, all right.
Speaker 2: Mike McKee, International Economics and Policy correspondent here at Bloomberg
Speaker 2: End occurrent Global Economy Reporter. Bloomberg Radio will be live
Speaker 2: Friday for that inflation read in of course Chair Powell
Speaker 2: and his comments and speech. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenebeck on Bloomberg Radio and Television.
Speaker 2: All right, everybody, Carol mass inctentic life here in our
Speaker 2: New York studio. So I got to say that this
Speaker 2: is something we talk a lot about, Tim, and that
Speaker 2: is how financial inclusion major issue around the world. McKinsey
Speaker 2: noting last year that nearly a billion and a half
Speaker 2: people living in emerging economies don't have access to formal
Speaker 2: savings and credit, and that while the overall global wealth
Speaker 2: and income graph has narrowed since the eighties, inequality has
Speaker 2: actually increased within advanced economy. So it's not just emerging,
Speaker 2: it's advanced as well. YEH.
Speaker 3: Needless to say, there's still a lot of work to
Speaker 3: be done. And Shamina Saying knows that she's the founder
Speaker 3: and president of MasterCard Center for Inclusive Growth. She's held
Speaker 3: senior positions in the White House and the House of Representatives,
Speaker 3: including appointments by President Obama. She joins us now from
Speaker 3: New York City. Welcome, Shamina, How are you doing well?
Speaker 7: Thanks, thank you so much for having me.
Speaker 3: Yeah, thanks so much for joining us on this. So
Speaker 3: a lot of your professional life, what you've done as
Speaker 3: an adult, has centered around the global economy that takes
Speaker 3: everyone into account. It's not something that is actually happening
Speaker 3: right now. What's the nut that needs to be cracked
Speaker 3: to break the great financial divide that we talk about
Speaker 3: so much?
Speaker 7: Well, it's such an important point, and I think Carroll
Speaker 7: started off rather well, which is it really is about
Speaker 7: financial inclusion? You know, I think we take for granted
Speaker 7: that you know, sitting here in New York City certainly
Speaker 7: and a lot of times in the United States, you know,
Speaker 7: you have a phone that gives you access to a
Speaker 7: train ticket or a train or a bus ticket, or
Speaker 7: any kind of digital access that you need. That's just
Speaker 7: not true for many millions of people around the world.
Speaker 7: But we're making progress. I mean, I think at MasterCard
Speaker 7: in the Center, we actually made a commitment to bring
Speaker 7: a billion people into the formal financial system by twenty
Speaker 7: twenty five, and we're almost there. We're at about eight
Speaker 7: hundred and seventy million, so we are well on our
Speaker 7: way to hitting that goal. But it's also important that
Speaker 7: we make sure that small business owners succeed in what's
Speaker 7: increasingly becoming a digital economy. So we made a commitment
Speaker 7: there to ensure that we bring fifty million small business
Speaker 7: owners into the formal economy again by twenty twenty five,
Speaker 7: and we're almost there, that we're at forty eight million
Speaker 7: right now. But the final piece around small business and
Speaker 7: financial inclusion, to your point about closing that gap or
Speaker 7: cracking that nut, is to ensure that we include marginalized
Speaker 7: communities in those small business ownerships. And so as part
Speaker 7: of our commitment, we wanted to make sure that at
Speaker 7: least twenty five million of our target were women owned
Speaker 7: or women led businesses. And I'm really happy to say
Speaker 7: today that we surpassed that target and are now on
Speaker 7: our way to even going further. So I think that.
Speaker 2: What I want to one thing I want to ask you,
Speaker 2: and I think folks would applaud your efforts in the
Speaker 2: progress that you guys have made, and it seems like
Speaker 2: ahead of schedule. Having said that, I'm going to get
Speaker 2: a ton of hate mail if I don't ask you this,
Speaker 2: and this is major credit card companies. To be fair,
Speaker 2: they are quick to amp up rates on customers, even
Speaker 2: good customers, but that may have a balance that maybe
Speaker 2: is growing a little bit unwieldy, if you will, but
Speaker 2: nonetheless maybe making their payments a way above the Fed
Speaker 2: Funds rate, way above the prime rate. I mean, I'm
Speaker 2: talking about what we've got a Fed funds rate I
Speaker 2: think at about five or five and a half percent here,
Speaker 2: and you're talking about rates that go to eighteen, nineteen,
Speaker 2: twenty twenty eight percent so quickly on individuals. So what's
Speaker 2: the thinking around that to make it easier for more
Speaker 2: consumers and also for small business folks.
Speaker 7: I think it's I mean, look, I think it's a
Speaker 7: really important point. We've seen rates around the world, especially
Speaker 7: in unregulated markets, climb way above even twenty percent, and.
Speaker 2: Even in the US market, which is a regulated market,
Speaker 2: we see them climb and I know it's within the law,
Speaker 2: but nonetheless it seems many would argue, really not.
Speaker 7: Fair, No exactly. I mean, the truth is that unless
Speaker 7: we're working on making sure that small business owners and
Speaker 7: those who are interested in participating in the digital economy
Speaker 7: through regulated bank accounts, which is where we're focused. It's
Speaker 7: going to be really important that we also include responsible
Speaker 7: lending practices and the education that's required to ensure that
Speaker 7: once you join the formal financial system, you're operating within
Speaker 7: it in a way that helps you not only survive
Speaker 7: but thrive in the digital economy.
Speaker 3: If parents don't teach their kids that stuff, where are
Speaker 3: they supposed to learn it?
Speaker 7: So I think that's again it's a great point. As
Speaker 7: part of the work that we've been doing in the
Speaker 7: United States and in around the world, we've launched a
Speaker 7: program that we call Strive, which is a focus on
Speaker 7: small business owners. Like I said, in the United States
Speaker 7: and around the world. In the United States in particular,
Speaker 7: we're at a historic moment, and this is because there
Speaker 7: are literally billions of dollars coming out of the federal
Speaker 7: governments to the states to help support small business owners.
Speaker 7: The problem is that but that money may or may
Speaker 7: not get to them directly, as we saw during COVID,
Speaker 7: and so part of our work with STRIVE is to
Speaker 7: ensure that we're helping those intermediaries, those organizations that are
Speaker 7: called community development finance institutions across the United States, they're
Speaker 7: closest to the small business owner, and they're really the
Speaker 7: ones who provide culturally competent and proximate education around financial lending,
Speaker 7: the things that you're talking about. And so one of
Speaker 7: the things that we really encourage is that small business
Speaker 7: owners who are looking to capitalize on the enormous amount
Speaker 7: of money that's coming out of the government right now,
Speaker 7: they really connect with their local community development finance institution
Speaker 7: to get close to the education as well as the
Speaker 7: capital they need to start their business.
Speaker 2: But you know, and I guess would I guess I
Speaker 2: would jump in and just say that for a lot
Speaker 2: of individuals, individuals are small business owners, they are responsible.
Speaker 2: I feel like Mohammed Yunis of the Gramin Bank and
Speaker 2: microlending have really taught us that these small entrepreneurs tend
Speaker 2: to be very very responsible with their money, whether it's
Speaker 2: especially in emerging in the emerging world, but also in
Speaker 2: the developed world. And I guess it still seems like
Speaker 2: the difficulty of getting the access and that is still
Speaker 2: very very tricky. How do we open up that pipeline
Speaker 2: even more without all the kind of connections or higher
Speaker 2: costs that seem to go along with it.
Speaker 7: I think you're one hundred percent right. I mean, you
Speaker 7: can look at one of our partners right here in
Speaker 7: the United States is actually grimen USA. Another partner is
Speaker 7: the acci On Opportunity Fund, the Community Reinvestment Fund. There
Speaker 7: are all sorts of again, they're called CDFI's in the
Speaker 7: United States. They're called microfinance institutions outside of the United States,
Speaker 7: but they're really the one. They're really organizations who are
Speaker 7: working very closely with small business owners. And my view is,
Speaker 7: and what we've seen is a lot of small business
Speaker 7: owners don't actually know that these organizations exist. I can
Speaker 7: just give you one example in South Dakota of a
Speaker 7: woman who just opened her coffee shop and she had
Speaker 7: been using her own personal credit card, which many times
Speaker 7: small business owners do to borrow against that to kind
Speaker 7: of buy the things she needed to start start her business.
Speaker 7: Once she was connected to an organization called Four Bands
Speaker 7: Financial Institution, which is a CDFI based in South Dakota,
Speaker 7: they worked with her over several years to not only
Speaker 7: ensure that her responsible her responsible perspective was supplemented with
Speaker 7: the educational components she needed, but they worked with her
Speaker 7: to get the actual capital she needed to open and
Speaker 7: run her business. And so this is not a multi
Speaker 7: day strategy. This is a multi year strategy if we
Speaker 7: really want to make sure that small businesses not only
Speaker 7: have the on ramps, but the tools, education, capital, also
Speaker 7: access to digital that they need to succeed.
Speaker 3: Heysh. I mean, if we think about your goals at
Speaker 3: the center here in the US, I want to specifically
Speaker 3: focus in the US before talking about the entire world.
Speaker 3: If we think about your goals here in the US
Speaker 3: when it comes to financial inclusion and closing the gap here,
Speaker 3: what's the biggest impediment out there right now? What's the
Speaker 3: biggest thing that holds people back?
Speaker 7: Well, I think, you know, I think both you and
Speaker 7: Carol have mentioned it when we've done our research and
Speaker 7: uh and from you know, obviously personal experience. Being the
Speaker 7: daughter of immigrants, I've seen it firsthand. My parents tried
Speaker 7: to open a business when I was growing up in
Speaker 7: southern Virginia and many of my colleagues have as well.
Speaker 7: And the real what what we have seen and what
Speaker 7: the research shows is that entrepreneurs aren't necessarily the ones
Speaker 7: that we see in Silicon Valley who are looking for
Speaker 7: that unicorn, who are looking for that that lightning bolt
Speaker 7: path to you know, multi billion dollar valuation. Most entrepreneurs
Speaker 7: that we have found are looking for stability. We call
Speaker 7: them stability entrepreneurs. They want to make a good living,
Speaker 7: they want to hire good, good staff from them, and
Speaker 7: they want to grow in a consistent and responsible way.
Speaker 7: And that's a little bit of a different framework than
Speaker 7: I think folks think about when we think about entrepreneurs
Speaker 7: and small business owners. That's one big thing is our mindset.
Speaker 7: We need to meet them where they are, which is
Speaker 7: in a place of let's get this right, let's grow
Speaker 7: over time, let's go responsibly. But then they also have
Speaker 7: to ensure that they get that access to capital so
Speaker 7: that they're not using their personal credit cards that are
Speaker 7: actually getting formal lending from CDFIs or banks. They go digital.
Speaker 7: We found that during COVID, if you weren't going, if
Speaker 7: you weren't in a position to go digital, were really
Speaker 7: at a disadvantage for continuing your business. And finally, as
Speaker 7: we've talked about, they have to grow their networks in
Speaker 7: their know how so doing this in a way that
Speaker 7: is not only expanding their capabilities with the nuts and
Speaker 7: bolts of what you need to understand about interest rates
Speaker 7: and marketing and markets, but you also need to be
Speaker 7: able to access your peers who are on the journey
Speaker 7: with you. And as Carol said, that's really about That's
Speaker 7: really what the Gremen model taught us is that your
Speaker 7: peer network is very important in your success.
Speaker 8: All Right?
Speaker 2: Can I leave it on that note, Shamina, thank you
Speaker 2: so much, appreciate some time with you on this Wednesday,
Speaker 2: shaminas saying she's founder and president at the MasterCard Center
Speaker 2: for Inclusive Growth. Joining us there in New York City.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 8: Well, time to share.
Speaker 3: This is not the Kasso is a service that allows
Speaker 3: you to own a share of the vacation home instead
Speaker 3: of having to buy the whole thing. Like I said,
Speaker 3: maybe an eighth of a share of a skihouse in
Speaker 3: Park City or Breckinridge that'll set you back maybe seven
Speaker 3: hundred and fifty five thousand dollars, or an eighth of
Speaker 3: a share of a home in Malibu for under a
Speaker 3: million dollars. So it's not just that you own a
Speaker 3: share of it. You share the costs that are associated
Speaker 3: with the home as well the other co owners, and
Speaker 3: then Picasso handles the maintenance and other management issues.
Speaker 2: All right, and now it's looking the company to broaden
Speaker 2: it's appeal by offering shares at a lower price point.
Speaker 2: So let's get into it with Austin Allison. He's co
Speaker 2: founder and chief executive officer of Picasso. He joins us
Speaker 2: in our studio, but coming in from San Francisco. How
Speaker 2: are you.
Speaker 6: I'm doing well. Thanks for having me today.
Speaker 2: It's great to have you here. You know, before we
Speaker 2: got started, you said you guys were launched in twenty twenty,
Speaker 2: so you're coming up on your fourth year.
Speaker 6: Yeah, three and a half years since launching. It's been
Speaker 6: a wild ride.
Speaker 2: I bet it is, all right, So give us an
Speaker 2: idea of the trajectory. I mean, from when you started,
Speaker 2: and I mean I'm assuming that was kind of fast
Speaker 2: and furious and that there was a lot of demand
Speaker 2: or was there?
Speaker 6: Yeah, it was a crazy time for sure. Let me
Speaker 6: just start with the mission and the vision of the company.
Speaker 6: The vision is about empowering more people to find their
Speaker 6: happy place through co ownership. And we started the company
Speaker 6: in twenty twenty in San Francisco. We've grown to now
Speaker 6: almost every market around the US, but until the week
Speaker 6: we were operating in about forty destinations around the US
Speaker 6: as well as Paris, London, and Mexico. And what we
Speaker 6: do is very simple. We empower families to co own
Speaker 6: beautiful luxury vacation homes together and Picasso manages every detail,
Speaker 6: everything from design to furnishing to bill pay and maintenance.
Speaker 3: Who determines the time that these families get to go
Speaker 3: spring break is oftentimes overlaps with other spring break of families.
Speaker 6: Yeah, so this is the number one question that we
Speaker 6: get from prospective buyers. And the answer is we've created
Speaker 6: a proprietary scheduling tool that we call smart Stay. It's
Speaker 6: available from an app on your iPhone or Android, and
Speaker 6: smart Stay will ensure that you get your pro rat
Speaker 6: of time throughout the year. So if you own one
Speaker 6: eighth of a home, smart Stay will ensure that you
Speaker 6: get one eighth of the peak season, one eighth of
Speaker 6: the non peak season, and one eighth of the holidays.
Speaker 2: All right, so when the plumbing goes everybody's got to
Speaker 2: chip in.
Speaker 6: Well, yeah, and a lot of that is accounted for
Speaker 6: and planned and advanced. So as the manager of the home,
Speaker 6: Picasso is thinking about what things might break or what
Speaker 6: things may wear over time, and we're actually accruing in
Speaker 6: the budget so that there's funds available to repair some
Speaker 6: of those things when they occur.
Speaker 2: Yeah, go ahead, Carl, No, no, no, no, no, go ahead.
Speaker 3: So talk to us about the business. Because you guys
Speaker 3: sell you you buy the homes and then you resell
Speaker 3: them as shares. Is that correct?
Speaker 6: Well, kind of. Usually the way that it works is
Speaker 6: we have thousands of listings on our website at Picasso
Speaker 6: dot com. You can also see them on our app,
Speaker 6: and consumers will go to our website and express interest
Speaker 6: in homes that meet their needs. Once we see enough
Speaker 6: interest in a particular home, then Picasso gets involved, works
Speaker 6: with the listing agent to get the home under contract,
Speaker 6: We do diligence on behalf of the ownership group, and
Speaker 6: then we convert it into a co owned Picasso home.
Speaker 2: Fascinating. Talk to us about the ramp up and demand
Speaker 2: and types of sales. Just give us, give us some metrics.
Speaker 2: We're bloomberg as we all. Yeah, I'd love to know
Speaker 2: some of them else.
Speaker 6: Yeah, Well, back to your question what it was like
Speaker 6: launching during the pandemic. The first couple of years were crazy.
Speaker 6: I mean, we grew from zero to We've done more
Speaker 6: than a billion dollars in revenue over the course of
Speaker 6: the first three years of the company's history. We have
Speaker 6: thousands of owners and the way that our model works
Speaker 6: is when we aggregate an ownership group and identify the home,
Speaker 6: we make a service fee that's baked into the share
Speaker 6: price of the home, and then we provide a variety
Speaker 6: of services throughout the life of the relationship that we
Speaker 6: have with our customers. So that includes things like property management, financing.
Speaker 6: About seventy percent of people who buy a Picasso use financing,
Speaker 6: and Picasso is the originator of those loans. We also
Speaker 6: help with resale, so when you buy an eighth or
Speaker 6: a quarter of a beautiful vacation home through Picasso, and
Speaker 6: someday you decide to sell, we help with that sales
Speaker 6: process as well, and it's really easy.
Speaker 2: How long do people stay with their ownership, I'm curious
Speaker 2: about turnover.
Speaker 6: Yeah, it depends on the owner, but we estimate that
Speaker 6: the average owner going to stay in their Picasso home
Speaker 6: for about five years because.
Speaker 2: They are staying in I mean you're now three and
Speaker 2: a half years in, so the people.
Speaker 6: Yeah, we're looking at cohort trends to estimate what we
Speaker 6: think the average life is going to be. A whole
Speaker 6: home somebody would typically stay in for you know, seven
Speaker 6: to eight years on average.
Speaker 3: Okay, let's say I'm interested in home in the mountains
Speaker 3: in the winter, I want to ski there in the summer.
Speaker 3: I want a mountain bike there. Where do I leave
Speaker 3: my skis? Where do I leave my mountain bike? So
Speaker 3: the seven other families don't mess with my stuff?
Speaker 6: Well, one of the best parts of owning a home
Speaker 6: is that you get to keep your stuff there. That's
Speaker 6: true of owning a Picasso as well. We outfit every
Speaker 6: Picasso home with eight owners closets, so when you show
Speaker 6: up at the home, you pull your stuff out of
Speaker 6: your owner's closet and you enjoy the home with none
Speaker 6: of the headaches or none of the hassle.
Speaker 2: What are some of the common headaches that come up
Speaker 2: in this process.
Speaker 6: Well, there aren't really any any headaches because we're taking
Speaker 6: on that burden as the manager of the property. But
Speaker 6: I would say the compromise associated with co ownership is
Speaker 6: that you don't own a undred percent of the home,
Speaker 6: which means you're not going to get one hundred percent
Speaker 6: of the calendar.
Speaker 2: You can't say, hey, honey, let's just for the weekend,
Speaker 2: go up and.
Speaker 6: You know, well, actually you can. You can, so as
Speaker 6: long as the home is available, you can. But basically,
Speaker 6: the main compromise with co ownership is that you're sharing
Speaker 6: the calendar with other people. So the way that most
Speaker 6: of our owners describe the calendar benefit is you're going
Speaker 6: to get about eighty percent of the dates that you
Speaker 6: want out of the calendar, and you're happy to make
Speaker 6: the trade off on the twenty percent that you're not
Speaker 6: getting because you're saving so much money. It's about eighty
Speaker 6: five percent less expensive to own a picasso when compared
Speaker 6: to owning the whole home. It's about seventy five percent
Speaker 6: less expensive per night than renting a comparable Airbnb or
Speaker 6: short terminal. So it just makes a lot of sense financially,
Speaker 6: and it's a lot easier as well, because we manage
Speaker 6: the whole experience.
Speaker 3: How do you make decisions that for personalization? For example,
Speaker 3: let's say, I want to get a hot tub at
Speaker 3: that mountain home, but you know the other families don't
Speaker 3: want a hot tub there. How do you do that?
Speaker 2: It's like the co op, right kind of tested.
Speaker 6: Yeah, it is analogous to the co op in some ways.
Speaker 6: But when owners buy into a Picasso, they're typically buying
Speaker 6: into the style of that home, the design of that home,
Speaker 6: which which we manage, and the amenities of that home.
Speaker 6: So if somebody wants to make a change, like let's
Speaker 6: say that you bought into a home without a pool,
Speaker 6: and later you decide you want a home with a pool,
Speaker 6: most people would just sell out of their Picasso without
Speaker 6: a pool and sell into a new one. But it
Speaker 6: is possible for all the owners in a home to
Speaker 6: actually vote and make a change to a home such
Speaker 6: as a bedroom or a pool, and in that scenario,
Speaker 6: Picasso would facilitate the project on their behalf awestin I'm.
Speaker 2: Curious though, if you buy fractional ownership into a particular
Speaker 2: piece of property and then you sell, do you sell
Speaker 2: at the price you bought into or you with the
Speaker 2: market bear? Like, how does that work? Because can you
Speaker 2: lose money on that initial investment?
Speaker 6: Well, like any real estate purchase. Yes, you could lose money,
Speaker 6: but most real estate goes up in value over time,
Speaker 6: and that's certainly what's happened with our real estate. So
Speaker 6: people who have purchased a pic and later resold our
Speaker 6: customers have made on average a ten percent gain over
Speaker 6: what they paid. But it trans I mean with Picasso,
Speaker 6: you're buying a home. The only difference is you're buying
Speaker 6: a portion of it instead of the whole thing. So
Speaker 6: it trades just like the underlying real estate would if
Speaker 6: you were selling the whole home. But we make the
Speaker 6: process easier by facilitating the share of part of the home.
Speaker 3: There's a huge affordability problem in a lot of these towns,
Speaker 3: absolutely right. How do you handle pushback? I know that
Speaker 3: in some areas where you operate, for example in St. Helena, California,
Speaker 3: you had to reach a settlement with the town. How
Speaker 3: do you anticipate pushback on this model?
Speaker 6: Yeah, well, the housing affordability problem is real and it's
Speaker 6: here to stay. You know, homes aren't going to get
Speaker 6: a whole lot cheaper into the future. So what we're
Speaker 6: seeing is consumers are resorting to co ownership as a
Speaker 6: way to make housing more affordable that could.
Speaker 3: Also be said to price out locals from living there.
Speaker 6: No, it actually has the opposite effect in a small town.
Speaker 6: So one of the challenges in a small vacation home
Speaker 6: community is that second home buyers are buying up a
Speaker 6: lot of the median price homes. The beauty of this
Speaker 6: model is it's kind of like car pulling, but for
Speaker 6: second homes, where we're aggregating demand into fewer properties. So
Speaker 6: instead of having eight families in San Francisco buying median
Speaker 6: price homes in Napa just to have them sit empty
Speaker 6: ten months per year, our model concentrates those eight families
Speaker 6: into one home, so it actually creates more opportunity for
Speaker 6: the local workforce. But like any new category, it takes
Speaker 6: time to be understood.
Speaker 2: Who's your typical buyer? Just got about thirty seconds.
Speaker 6: Yeah, So the typical buyer ranges from a young family
Speaker 6: that's early in their career and maybe can't afford or
Speaker 6: can't justify owning the home of their dreams, all the
Speaker 6: way to a very established, you know, empty nester that's
Speaker 6: looking for a special happy place for the family.
Speaker 2: Regat well that's the range. Just quickly, is there a bulk?
Speaker 2: Is it like people a certain demographic in terms of age, I.
Speaker 6: Would say the sweet spot is like forty to sixty
Speaker 6: in terms of of age. And I would say seventy
Speaker 6: to eighty percent of people are looking for a home
Speaker 6: that's within a two to three hour commute from their
Speaker 6: primary home.
Speaker 2: And just quickly, one last question ten seconds. Do you
Speaker 2: make money on every transaction? How does it do?
Speaker 6: What's the business? We make money on the service fee upfront,
Speaker 6: and then we make money on the recurring services that
Speaker 6: we provide, including property management, financing and resale.
Speaker 2: Really interesting, really cool stuff.
Speaker 6: Thank you, Thank you so much.
Speaker 2: Austin Allison, co founder a CEO of Picasso, joining us
Speaker 2: here in studio.
Speaker 1: Come brother Marco a journal How about you let me drive?
Speaker 5: Oh no, no, no, no, who's going to drive?
Speaker 1: Honey?
Speaker 6: Please, I'll do the gravels. Let's wait, I want to drive.
Speaker 6: It's good question.
Speaker 3: This is the drive to the Globe.
Speaker 8: Dot com communing well, Bun Jelda Don on Bluebird Radio.
Speaker 2: All right, everybody, just about eighteen minutes left in today's
Speaker 2: trading sessions. Some buying into the clothes. We got to
Speaker 2: pop to the pside, which is kind of interesting. I
Speaker 2: feel like in the last I don't know ten or
Speaker 2: fifteen minutes. So fascinating to see still just up, as
Speaker 2: John mentioned, about three tens of a percent on the
Speaker 2: Nasdaq one hundred up, about seven tens of a percent
Speaker 2: on the S and P five hundred, Dow up more
Speaker 2: than one percent. But it's a straight lineup, So I'm
Speaker 2: not sure. We talk about volatility as we get near
Speaker 2: the end of the quarter, so maybe some of that
Speaker 2: is at play, but nonetheless certainly notable as I look
Speaker 2: at my Bloomberg and I look at the charts across
Speaker 2: the board.
Speaker 3: Also a reminder Carol that this quarter we're toward the
Speaker 3: end of the quarter, but this quarter we're seeing the
Speaker 3: market serge close to ten percent.
Speaker 2: Yeah, it's been quite great quarter.
Speaker 3: Yeah, I seven on the S and P five Was it.
Speaker 2: Just last week? We had the best week right for
Speaker 2: the four stocks here in twenty twenty four.
Speaker 3: I want to think get an idea for what Mace
Speaker 3: McCain has to say about all this. Mace's chief investment
Speaker 3: officer at Frost Investment Advisors. They've got about five point
Speaker 3: one billion dollars in assets under management, Mace joining us
Speaker 3: from San Antonio, Texas. Mace, how are you very good?
Speaker 8: Thank you for having me on today.
Speaker 3: Yeah, good to have you with us. How are you
Speaker 3: looking at a year where the quarter has already sent
Speaker 3: shares hire by ten percent and we're not even three
Speaker 3: months into this yet.
Speaker 9: Well, in the very near term, we're a little cautious
Speaker 9: in that, you know, measures of in semester sentiment are
Speaker 9: pretty extreme and look like they could be overbought in
Speaker 9: near term.
Speaker 8: Of course, those conditions can stay over.
Speaker 2: Oops, we're having a little technical difficulty, so we're going
Speaker 2: to see if we can get back and reconnect with
Speaker 2: Mace McCain over at Frost Investment Advisors.
Speaker 6: Yeah.
Speaker 3: Interesting about the sentiment, right.
Speaker 2: Yeah, well, you know, quite a bounce, and I think
Speaker 2: a lot of it has to do with and we've
Speaker 2: talked about this right a lot about expectations in terms
Speaker 2: of global central banks finally saying okay, we're ready to
Speaker 2: start cutting rates. It's just it's not no longer. It's
Speaker 2: no longer. You know, if we're going to do it,
Speaker 2: it's just a case of time and when we're going
Speaker 2: to do it.
Speaker 3: I don't know about that though, right We know that
Speaker 3: it's going to happen, We just don't know if there's
Speaker 3: actually going to be three this year from the Federal Reserve.
Speaker 3: We don't know if we've had or exactly we've had
Speaker 3: more and more folks come on our air lately and say,
Speaker 3: wait a second, we're looking you know the whoky said
Speaker 3: yesterday Carol, that the FED is looking for an excuse
Speaker 3: not to.
Speaker 2: Cut exactly our guest that was in here. But it's interesting.
Speaker 2: I'm looking at what, as you said, the S and
Speaker 2: P five hundred since the beginning of the year, or
Speaker 2: at least in this quarter, up about eleven percent. We're
Speaker 2: looking at a Nasdaq one hundred that's up about fourteen percent,
Speaker 2: so pretty significant run. Hey, we're back with Mace McCain,
Speaker 2: chief investment officer at Frost Investment Advisors. So Mace, you
Speaker 2: were talking a little bit about sentiment and what we're
Speaker 2: seeing and maybe what it means perhaps going forward from here.
Speaker 9: Yes, we look to be a little overbought in the
Speaker 9: short term, but as I say, we could stay that
Speaker 9: way for a while. But I think that your points
Speaker 9: on the FED are very important. I mean, the FED
Speaker 9: risk is skewed at this time.
Speaker 8: The FED is.
Speaker 9: You know, not going to be raising rights if inflation
Speaker 9: stays sticky and comes in hot, we're just going to
Speaker 9: get higher for longer. But if they have the opportunity,
Speaker 9: they're going to start to cut later in the year.
Speaker 9: So we kind of skewed bed risk to towards cutting
Speaker 9: rather than raising.
Speaker 8: So that's pretty supportive into markets.
Speaker 2: But is it dangerous to rule out the idea that
Speaker 2: maybe the FED ultimately considering. I don't know. We were
Speaker 2: talking with Mike right a little bit about some of
Speaker 2: the weakness we're starting to see in data points, But
Speaker 2: you know, are we being still too enthusiastic when it
Speaker 2: comes to expectations about how many FED cuts we might get.
Speaker 9: Well, I think that they're off the table for a while.
Speaker 9: And what's more important though, is, you know, we're in
Speaker 9: an environment where we seem to be having either a
Speaker 9: soft or no landing scenario. So people are figuring that
Speaker 9: we're going to have a rate cut eventually. But right
Speaker 9: now we're seeing a broadening of the market. We're seeing
Speaker 9: mid caps and small caps a little bit better. And
Speaker 9: I think people's expectations for growth is gone, I know,
Speaker 9: and maybe we're going to get out of what has
Speaker 9: been a profits recession ast we look into the next year.
Speaker 9: So I think that the fundamental side, the earning side,
Speaker 9: the cop of corporate side, is strengthening, and so as
Speaker 9: long as that's going on for a while, it takes
Speaker 9: the FED out of the it becomes less important in
Speaker 9: the mix.
Speaker 3: A means where do you not want to be right now?
Speaker 8: The everything is run?
Speaker 9: You know, we've seen junk bonds go up, credit credit
Speaker 9: go up, interest rates have really rallied off of this
Speaker 9: last falls highs and so.
Speaker 8: On the credit market.
Speaker 9: You know, we were looking at bonds and the basically
Speaker 9: the shorter end the value of the curve three to
Speaker 9: five years, looking to anticipate the FED easing. We also
Speaker 9: think once again that we're going to see a rally
Speaker 9: possibly in a mid cap and small cap if we
Speaker 9: continue to see the product market broadened and we continue
Speaker 9: to see growth surprise to the upside. So all that
Speaker 9: is positive. It will probably take a little bit of
Speaker 9: the spotlight of the leading leaders on technology as we
Speaker 9: broaden the market, but that would be healthy to us.
Speaker 2: Where don't you want to be in this market environment?
Speaker 9: You know, we are concerned enough about sticky inflation that
Speaker 9: I wouldn't want to be buying out.
Speaker 8: Beyond ten years in the bond market.
Speaker 9: We think that inflation expectations could rise based mostly on
Speaker 9: the fact that we're going to we continue to be
Speaker 9: short labor. If we do see manufacturing continue to strengthen
Speaker 9: we're just going to.
Speaker 8: See more demand for labor.
Speaker 9: And unless we see workforce participation come up, we think that,
Speaker 9: you know, seeing significant progress towards our heads inflation targets
Speaker 9: could take a long time.
Speaker 3: I'm curious about asset allocation in a market that's up
Speaker 3: ten percent on the year, that had a great year
Speaker 3: last year. If if somebody comes to you, a client
Speaker 3: comes to you, a new client comes to you with
Speaker 3: new money and says, you know, throw this money where
Speaker 3: you think it should go for the next few years,
Speaker 3: what does that asset allocation look like.
Speaker 9: Well, you know, we had a great year last year
Speaker 9: in the stock market, but if you look at two
Speaker 9: years where it's not such great returns, So we borrowed
Speaker 9: a lot this year, you know, catching up from last
Speaker 9: year twenty three was based on a really four twenty two.
Speaker 9: We're not at extreme valuations, very doubt believe. So we
Speaker 9: still like stocks and so we think that you know,
Speaker 9: the returns will be more modest because of valuations where
Speaker 9: they are and the pe ratios, but we do think
Speaker 9: that stocks will still be the best place to be
Speaker 9: as and as I said, if we do get some
Speaker 9: economic strength, we think that we could finally see some
Speaker 9: participation in the small and mid cap and so hopefully
Speaker 9: that'll out to market and help returns.
Speaker 8: In the next year.
Speaker 2: All Right, Mace, gonna leave it on that listen. Thank
Speaker 2: you so much, so appreciate it. Mace mccainey's chief investment
Speaker 2: officer at Frost Investment Advisors, as you mentioned earlier, about
Speaker 2: five point one billion in assets under management, and he
Speaker 2: was joining us there from San Antonio, Texas.
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