WEBVTT - Secondhand Watch Market Growth 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.600 plus technology, politics, economics, all furnishing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.200 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.880 --> 0:00:31.720 YouTube search Bloomberg Global News. Well, let's talk more restaurants. 0:00:31.720 --> 0:00:35.200 We heard from shake Shack after hours. Uh, and let's 0:00:35.200 --> 0:00:37.720 talk a little bit about Red Lobster. Kelly Valid is 0:00:37.840 --> 0:00:39.760 CEO of Red Bobster. She joins us on the phone 0:00:39.760 --> 0:00:42.839 from Orlando, Florida. Kelly, great to have you. How are you. 0:00:44.000 --> 0:00:46.479 I'm well, thank you, it's great to be here. Good. Well, 0:00:46.520 --> 0:00:49.599 we've been you know, Red Lobster privately held company, so 0:00:49.640 --> 0:00:53.320 we have insight into how competitors have been doing. Um, 0:00:53.360 --> 0:00:55.560 and you know, we're hearing a lot about cost pressures. 0:00:55.560 --> 0:00:59.960 We're hearing a lot about inflation, rising food prices, rising wages. 0:01:00.080 --> 0:01:05.160 Is uh, what is the state of Red Lobster right now? Yeah, exactly, 0:01:05.200 --> 0:01:07.240 it's a It's an interesting time for sure. So all 0:01:07.319 --> 0:01:09.679 that is is true and we've said this all along 0:01:10.000 --> 0:01:12.320 here at Red Lobster that Covid has been an equal 0:01:12.360 --> 0:01:16.760 opportunity disruptor in the way of Yeah, the rising wages, Um, 0:01:16.880 --> 0:01:19.360 you know that's here to stay, right, that won't undo itself. 0:01:19.400 --> 0:01:22.240 And yet we are seeing some stabilization of the of 0:01:22.240 --> 0:01:25.720 the workforce, being able to retain the folks that we have, 0:01:25.880 --> 0:01:28.520 and then we're just continuing to hire and look for 0:01:28.560 --> 0:01:30.800 great people. On the supply chain side. We've got a 0:01:30.840 --> 0:01:33.759 fantastic team. We've stayed in product and we've been able 0:01:33.800 --> 0:01:36.840 to pivot and and still offer great value. We've just 0:01:36.920 --> 0:01:39.800 launched value forward offers on our menu that dropped on 0:01:39.880 --> 0:01:43.640 January first. So, um, we're we're finding that balance and 0:01:43.680 --> 0:01:46.000 that's the key right now. So let's there's a lot there, 0:01:46.120 --> 0:01:47.840 So let's unpack some of it. First of all, when 0:01:47.880 --> 0:01:51.760 it comes to managing labor costs and also having access 0:01:51.760 --> 0:01:54.800 to the workers you need, walk us through both of those. 0:01:54.880 --> 0:01:57.360 Are you paying more for workers? What is that doing 0:01:57.400 --> 0:02:00.400 to your you know, bottom line, And are you even 0:02:00.400 --> 0:02:02.440 being able to find the workers that you need because 0:02:02.440 --> 0:02:07.560 you can do just so much online, you still need people. Yeah, absolutely, Yes, 0:02:07.600 --> 0:02:09.840 a lot of our our business has pivoted off premise 0:02:09.919 --> 0:02:13.040 and catering and delivery, but yes, we still have lots 0:02:13.040 --> 0:02:15.440 of people in the restaurants and the demand has has 0:02:15.480 --> 0:02:17.800 rebounded certainly, which means we've got to have great people 0:02:17.840 --> 0:02:20.320 to take care of them. So then we have no doubt. 0:02:20.320 --> 0:02:23.040 We we're paying more everyone is, and we're paying more, 0:02:23.080 --> 0:02:25.400 and we're keeping up with that same pace you have to. 0:02:25.880 --> 0:02:28.680 And then we are doing everything possible and using every 0:02:28.840 --> 0:02:32.120 channel you can imagine to recruit new talent. And at 0:02:32.120 --> 0:02:33.959 the same time, we're focused on taking care of the 0:02:33.960 --> 0:02:36.640 employees we have so that they choose to stay with 0:02:36.760 --> 0:02:38.839 us for the long haul. So, Kelly, does that mean 0:02:38.880 --> 0:02:41.200 you aren't getting all the workers that you would like 0:02:41.320 --> 0:02:46.000 to be hiring. Well, we're hiring an incredible clip forty 0:02:46.080 --> 0:02:49.400 thousand plus, uh is what. Well, we'll hire more than 0:02:49.440 --> 0:02:52.000 that this year, so we are getting we are finding 0:02:52.000 --> 0:02:55.280 those workers. Sure, it's a challenge, but again the strategies 0:02:55.280 --> 0:02:57.680 are I think outside the box, do whatever we can 0:02:57.760 --> 0:03:00.040 to to just get more people in the door and 0:03:00.120 --> 0:03:03.600 keep the staffing levels up. Level forgiving sounds like a lot. 0:03:03.720 --> 0:03:05.480 It is a lot, but it's not a lot if 0:03:05.480 --> 0:03:08.720 you really need eighty thou workers. To give me some 0:03:08.800 --> 0:03:13.000 perspective here, Yeah, I mean we we need, we will 0:03:13.040 --> 0:03:15.880 need and higher about a total of about fifty thousand 0:03:15.960 --> 0:03:19.720 this year. And you know, um that's about what we need. 0:03:19.760 --> 0:03:23.320 And we're close to forty thou you know. So we 0:03:23.400 --> 0:03:26.640 are in a good place and not yet where we'd 0:03:26.639 --> 0:03:28.560 like to be, but in a in a good place 0:03:28.560 --> 0:03:32.320 in terms of our hiring right now. Uh. Wages, Uh, 0:03:32.440 --> 0:03:34.480 can you give us any numbers average wages? How much 0:03:34.520 --> 0:03:38.280 you've had to increase them as as the pressures have increased. Yes, 0:03:38.360 --> 0:03:41.680 we've increased our wages. Uh, probably about eleven a little 0:03:41.680 --> 0:03:46.360 over eleven percent at this point. So what's an average? 0:03:46.360 --> 0:03:49.400 What's stay away from? Yeah, I'll probably stay away from 0:03:49.440 --> 0:03:52.280 what our average hourly rates is. That's a pretty it's 0:03:52.320 --> 0:03:55.320 so competitive about there right now. We are competitive and 0:03:55.360 --> 0:03:57.320 we are where the industry is paying in full service 0:03:57.360 --> 0:04:01.040 restaurants right now. You mentioned a lot Pivoto online, so 0:04:01.080 --> 0:04:03.760 many of the restaurant space quickly figured it out right. 0:04:03.840 --> 0:04:05.720 It sounds like you guys did too. How much of 0:04:05.760 --> 0:04:12.120 your business is online versus in store? Yeah, our business, 0:04:12.120 --> 0:04:15.080 we tripled our off premise, and off premise would be delivery, 0:04:15.120 --> 0:04:18.800 catering and explaine takeout. We've tripled that, so we are 0:04:18.960 --> 0:04:22.720 over of our business today is takeout and delivery, and 0:04:22.760 --> 0:04:25.880 that is about where the industry sits as well, and 0:04:26.080 --> 0:04:28.480 we expect that to be a permanent there's a permanent 0:04:28.520 --> 0:04:31.760 trend change or permanent behavior changes and shifts. So our 0:04:31.800 --> 0:04:35.000 primary businesses obviously still dine in, but you see people 0:04:35.040 --> 0:04:37.760 pivot to off premise and to go when they want 0:04:37.760 --> 0:04:41.080 to feel safe when things change, uh, and they need 0:04:41.120 --> 0:04:42.560 to us to meet him where they are. And the 0:04:42.560 --> 0:04:45.560 exciting thing is we're getting that's an incremental guests in 0:04:45.600 --> 0:04:47.480 a lot of cases that is now choosing to come 0:04:47.520 --> 0:04:49.640 to Red Lobster. Kelly, Does that mean there's a physical 0:04:49.720 --> 0:04:52.920 redesign or rethink of the actual layout of the restaurant? 0:04:53.920 --> 0:04:56.000 And that's a great question, and that that's all a 0:04:56.080 --> 0:04:57.960 lot of what we're looking at right now. So it 0:04:58.080 --> 0:05:01.240 certainly can. But there's also things like virtual brands that 0:05:01.240 --> 0:05:03.839 were exploring, you know, just how do you find a 0:05:03.880 --> 0:05:06.880 way to get your food into more people's hand, So 0:05:07.160 --> 0:05:10.560 it could be a physical redesign. We've optimized the space 0:05:10.600 --> 0:05:12.919 that we have. We've got the factis actually we have 0:05:12.960 --> 0:05:14.960 big restaurants. We have a lot of space to work with. 0:05:15.080 --> 0:05:17.640 So there's been a lot of redesign that's already happened 0:05:17.640 --> 0:05:20.400 in modifications and will continue to look at that as well. Well, 0:05:20.400 --> 0:05:23.600 what's the modification We just got about seconds and we'll 0:05:23.600 --> 0:05:24.960 come back and chat some more, but what is a 0:05:24.960 --> 0:05:28.560 modification that you guys are thinking about? Yeah, you could, 0:05:28.560 --> 0:05:30.880 you know, so we have to go doors and windows today, 0:05:30.880 --> 0:05:34.400 but optimizing that space, um, you know, there are some 0:05:34.440 --> 0:05:36.840 looking at drive thrus. That's a possibility that we'll look at. 0:05:36.880 --> 0:05:39.800 But we've optimized the space and we've got separate rooms 0:05:39.839 --> 0:05:43.160 where we can facilitate greater you know, throughput of our 0:05:43.279 --> 0:05:45.720 to go windows and are to go doors to get 0:05:45.720 --> 0:05:48.520 the food out quicker to the parking lots. Kelly, help 0:05:48.600 --> 0:05:51.039 us understand the ownership structure here because you've been on 0:05:51.279 --> 0:05:53.599 a CEO for less than a year right now, and 0:05:53.600 --> 0:05:55.320 as Carol mentioned before we went to break it was 0:05:55.360 --> 0:05:57.560 owned by Darden for years, then two off to a 0:05:57.560 --> 0:06:00.320 private equity company for a few years and now it's 0:06:00.320 --> 0:06:02.840 owned by this investor group. How does that work and 0:06:03.240 --> 0:06:04.960 how do you work that into your and what's that 0:06:05.000 --> 0:06:08.839 like for you in terms of how you report a CEO? Yeah, sure, 0:06:08.960 --> 0:06:11.560 it's it's basically a board structure. You know, they own 0:06:11.640 --> 0:06:15.080 a fake and and there I have a board assembled 0:06:15.080 --> 0:06:18.359 of mostly those folks in Thailand. How Union is the 0:06:18.480 --> 0:06:22.120 company and the investor group, and then I've got a great, 0:06:22.440 --> 0:06:25.760 really well rounded board, uh, comprised of other folks that 0:06:25.800 --> 0:06:28.560 are industry experts. So it's a great it's a it's 0:06:28.560 --> 0:06:32.960 a pretty normal structure and great relationship and great partnership. 0:06:33.279 --> 0:06:35.440 We'll talk a little bit about supply chain here, because 0:06:35.520 --> 0:06:38.799 how Union is a huge seafood supplier and I'm wondering 0:06:38.800 --> 0:06:43.080 how that works into your supply chain. Yeah, sure, they 0:06:43.120 --> 0:06:46.479 absolutely are supplier of shrimp for us and and a 0:06:46.480 --> 0:06:49.360 few other things. But they Yeah, we keep We've got 0:06:49.360 --> 0:06:53.200 some some great firewalls in place, and uh, they're they're 0:06:53.240 --> 0:06:56.440 able to help us, you know, wherever possible and provide 0:06:56.480 --> 0:06:59.800 great solutions as we you know, are in a challenge environment. Shure, 0:07:00.120 --> 0:07:02.039 We'll forgive me, But why do you need firewalls in place. 0:07:02.080 --> 0:07:03.640 I mean it sounds like, well, if they own you, you 0:07:03.520 --> 0:07:06.920 you can they can provide you with seafood. Oh absolutely, 0:07:06.960 --> 0:07:08.680 just to make sure it's competitive, just to make sure 0:07:08.680 --> 0:07:11.360 we're doing all the right things. Absolutely they can. Sure. Yeah. 0:07:12.400 --> 0:07:15.000 Well and it's interesting too. I mean I do wonder 0:07:15.280 --> 0:07:20.360 about being do you prefer being privately held in a 0:07:20.440 --> 0:07:23.840 market environment that can be very tough on companies. We 0:07:23.880 --> 0:07:27.240 talk about this a lot. We see entrepreneurs in startups. 0:07:27.280 --> 0:07:30.360 We talked about earlier this week about the billions you know, 0:07:31.040 --> 0:07:34.680 uh plus unicorns that are out there. But companies are 0:07:34.720 --> 0:07:37.000 able to grow and stay private for a lot longer 0:07:37.040 --> 0:07:39.640 because there's a lot of money out there that enables 0:07:39.640 --> 0:07:41.920 them to do it. Tell us about the benefits of 0:07:42.000 --> 0:07:46.640 being private, Well, sure, there are those benefits. There absolutely are, 0:07:46.640 --> 0:07:49.720 and I've lived in both worlds. In the public facing 0:07:49.760 --> 0:07:52.480 environment can be challenging and it teaches you, uh well, 0:07:53.080 --> 0:07:55.720 there's a great discipline in that. There's a lot that 0:07:55.720 --> 0:07:58.360 comes with being publicly held and being out there in 0:07:58.560 --> 0:08:01.760 front of of everyone to see your results. So it 0:08:01.800 --> 0:08:04.880 does help. It helps where when there is a need. 0:08:05.160 --> 0:08:07.440 This is a brand will continue to have a revitalization 0:08:07.520 --> 0:08:10.240 strategy in place, and when there's a need for investments, 0:08:10.240 --> 0:08:13.760 there's patience for that and uh, in that case, yeah, 0:08:13.840 --> 0:08:16.640 there's an understanding of what's what's really needed to doing 0:08:16.680 --> 0:08:18.480 the right thing for the business that can help sometimes 0:08:18.480 --> 0:08:22.160 for that reason. Kelly, how have you navigated changing COVID mandates, 0:08:22.200 --> 0:08:27.040 MASK mandates, different restrictions throughout the different states, counties, towns 0:08:27.320 --> 0:08:31.640 where you have read lobster locations. Yeah, it's been interesting 0:08:31.680 --> 0:08:34.520 and you've had to just really make it part of 0:08:34.640 --> 0:08:37.840 every you know, every single day understanding what's happening. We've 0:08:37.880 --> 0:08:39.920 got a task force, we've got a crisis team that's 0:08:39.920 --> 0:08:42.720 in place. We've got QA folks kind of you know 0:08:42.880 --> 0:08:45.640 again that they wake up every day thinking about making 0:08:45.640 --> 0:08:47.760 sure that um, we are up to date on everything 0:08:47.800 --> 0:08:50.240 that has to happen. And so we stayed a prize 0:08:50.240 --> 0:08:52.800 of it, and we listen to listen to our guests. 0:08:52.840 --> 0:08:56.560 We've listened in social sentiment, we understand what's important to 0:08:56.600 --> 0:08:58.560 them as well. And then we've just tried to be 0:08:58.679 --> 0:09:01.920 really clear about our safety protocols and steadfast in what 0:09:01.960 --> 0:09:06.120 we're doing. Uh, stay stay along, you know, go along 0:09:06.160 --> 0:09:10.080 with everything that we need to and UM keep guests 0:09:10.080 --> 0:09:11.880 and employee safe. We've been able to do that. So 0:09:12.480 --> 0:09:15.680 in place, were there ever situations where you had vaccine 0:09:15.679 --> 0:09:18.520 mandates in place and restaurants because a city or a 0:09:18.559 --> 0:09:22.240 town or a state required them of employees. Yeah, absolutely, 0:09:22.400 --> 0:09:26.960 UH in New York, UM, where the guests that required 0:09:26.960 --> 0:09:28.960 the guests to have it. We have absolutely had to 0:09:29.000 --> 0:09:31.200 deal with some things there. In Canada, where have we 0:09:31.200 --> 0:09:33.679 have restaurants that are company owning Canada, we've also had 0:09:33.720 --> 0:09:37.800 restrictions California sets and unique restrictions UM, primarily based on 0:09:38.120 --> 0:09:41.240 the guests and then requirements for employees. Are there different 0:09:41.280 --> 0:09:45.760 dining patterns in those areas due to restrictions? Yeah, i'd 0:09:45.760 --> 0:09:48.160 say you you would feel it. Sure. Yeah, we definitely 0:09:48.200 --> 0:09:50.760 had felt it in UH in New York And in 0:09:51.200 --> 0:09:53.360 response to that, you would have Yeah, there was. I 0:09:53.360 --> 0:09:56.160 think that's obvious. We've seen by now how divisive some 0:09:56.200 --> 0:09:58.640 of this could be. Unfortunately, so you would definitely hear 0:09:58.920 --> 0:10:01.320 at times from guests and and we could we could 0:10:01.320 --> 0:10:04.280 feel the difference with those mandates in place. Not tricky. Hey, listen, 0:10:04.360 --> 0:10:06.959 you have been in this industry a long time. UM. 0:10:07.000 --> 0:10:09.480 We love talking with folks who are dealing with you know, 0:10:09.600 --> 0:10:13.000 consumers um just got about thirty thirty five seconds left here. 0:10:13.440 --> 0:10:16.160 Based on what you're seeing, the outlook, the visibility, how 0:10:16.200 --> 0:10:18.040 do you think the consumer is doing and what does 0:10:18.080 --> 0:10:19.760 it tell you about where we are in terms of 0:10:19.800 --> 0:10:24.240 economic growth? Yeah, I think the consumer is still they're 0:10:24.320 --> 0:10:26.800 very sensitive to all the price that's been that that's happening, 0:10:26.800 --> 0:10:29.080 all the things that are happening around inflation that I 0:10:29.080 --> 0:10:31.079 think they feel that they know that, you know, we're 0:10:31.120 --> 0:10:33.920 doing everything we can to price under where inflation is 0:10:33.960 --> 0:10:37.400 and still have great value forward offers h in place 0:10:37.440 --> 0:10:39.200 of red lobster. People count on us for that, so 0:10:39.240 --> 0:10:41.440 we're working really hard on that. I think the consumer, 0:10:41.600 --> 0:10:45.840 you know, there's obvious, uh, the tax returns and the 0:10:45.920 --> 0:10:48.920 idea of maybe those being smaller this year. I think, well, 0:10:48.920 --> 0:10:51.080 we could certainly have an impact. The consumer headset, I 0:10:51.080 --> 0:10:53.520 think is still a little bit uncertain, and yet they 0:10:53.559 --> 0:10:55.800 still want to be out in restaurants enjoying a great 0:10:55.840 --> 0:10:58.880 meal around the table with friends and family. So I'm 0:10:58.920 --> 0:11:01.920 optimistic and that Guarden Alright, We're gonna leave on that note. 0:11:01.920 --> 0:11:04.640 Thank you so much, really appreciated all your time, Kelly 0:11:04.720 --> 0:11:08.320 valat Vlad. Excuse me, Kelly Valade, uh CEO Red Lobster 0:11:08.440 --> 0:11:11.320 joining us on the phone in Orlando, Florida. Great snapshot 0:11:11.360 --> 0:11:13.839 of the restaurant industry, which we know has had such 0:11:13.880 --> 0:11:15.839 a tough time during the pandemic. And just to hear 0:11:15.880 --> 0:11:17.840 her insight, Yeah, Kelly, you gotta come back soon. That 0:11:17.920 --> 0:11:20.719 was just fantastic. So we've been watching a lot of 0:11:20.720 --> 0:11:22.480 the markets. Just want to point out that we are 0:11:22.840 --> 0:11:25.360 going to new lows here on those major equity average 0:11:25.400 --> 0:11:27.720 in fact right now down about two point seven percent 0:11:27.800 --> 0:11:30.160 on the Nazis Charlie mentioned, two percent down on the 0:11:30.320 --> 0:11:32.480 S and P and the Dow down about one point 0:11:32.480 --> 0:11:35.120 eight percent. So as Charlie mentioned, that selling intensifying, and 0:11:35.120 --> 0:11:38.040 we've also seen some pressure when it comes to the 0:11:38.080 --> 0:11:40.760 oil market as well. Yeah, that's right. We're actually seeing 0:11:40.760 --> 0:11:44.560 West Texas Intermediate down two dollars right now, Yeah, down 0:11:44.600 --> 0:11:47.280 about two point two. Yeah. Interestingly enough, Hey, we got 0:11:47.280 --> 0:11:49.640 a really special guest with us today, Mike mclogan's senior 0:11:49.640 --> 0:11:52.720 Commodity Strategies at Bloomberg Intelligence. It is I say special 0:11:52.760 --> 0:11:55.439 because he's with us in the Bloomberg Interactive Broker studio 0:11:55.840 --> 0:11:59.640 from Miami where he is now based. These days, Mike, 0:11:59.679 --> 0:12:01.000 I want to start with oil and then of course 0:12:01.040 --> 0:12:03.960 talk crypto with you as well. Um help us understand 0:12:04.000 --> 0:12:06.680 the oil move that we're seeing today, because if tensions 0:12:06.840 --> 0:12:10.160 do and as they have been rising on the border 0:12:10.160 --> 0:12:12.520 of Russia and Ukraine, shouldn't we see that reflected in 0:12:12.679 --> 0:12:15.240 higher oil prices. Yes, I think oil is doing a 0:12:15.280 --> 0:12:18.920 two thousand and eight. It went up on the escalator 0:12:18.960 --> 0:12:20.760 and down on the elevator, so we have to worry 0:12:20.760 --> 0:12:22.840 about that. So right now it's got a very significant 0:12:22.840 --> 0:12:25.040 reason to be high potential war with a lot one 0:12:25.040 --> 0:12:27.880 of the largest crudeil exporters in the world against one 0:12:27.880 --> 0:12:29.920 of the largest grain exporters in the world. But you 0:12:29.960 --> 0:12:31.800 can only go so far. You get leverage positions and 0:12:31.840 --> 0:12:33.440 you pull back. I think we're just seeing some of 0:12:33.440 --> 0:12:37.040 that today. But if this armed conflict happens, crudel can 0:12:37.080 --> 0:12:39.640 easily jump well of a hundred dollars. But I think 0:12:39.679 --> 0:12:42.000 that will be the beginning of its end and its demise, 0:12:42.040 --> 0:12:44.080 because they will kick into a recession. It's like a 0:12:44.120 --> 0:12:46.080 repeat of two thousand and eight. That's my prediction. But 0:12:46.240 --> 0:12:48.439 right now what we're seeing is just a little pull 0:12:48.520 --> 0:12:50.480 black in that bull trend and The key thing is 0:12:50.480 --> 0:12:52.959 we're seeing the great reversion in total as surprises like 0:12:53.000 --> 0:12:55.240 Carol mentioned, you know stock markets down, what don't we 0:12:55.280 --> 0:12:57.240 down in the year almost almost twelve percent in the 0:12:57.320 --> 0:12:59.559 NASTAC To me, that's what's happening. So at the beginning 0:12:59.559 --> 0:13:01.920 of the year, where facing okay, FED going to tighten. 0:13:02.120 --> 0:13:05.080 Now we're facing the FED and the war um. So 0:13:05.240 --> 0:13:07.120 to me, that's what's part of it. Just crude oil 0:13:07.240 --> 0:13:10.640 is year is making everything worse, it's just pulling back 0:13:10.679 --> 0:13:12.400 a little bit. Well that's what I mean. How do 0:13:12.480 --> 0:13:17.160 we incorporate crude as an indicator of inflation, Well, it's 0:13:17.240 --> 0:13:19.480 it's look at two thousand and eight crude oil peak 0:13:19.520 --> 0:13:23.800 that onl in July, and that was right before everything collapsed. 0:13:23.800 --> 0:13:26.280 So it is one of the prime indicators. But the 0:13:26.400 --> 0:13:29.960 juxtaposition of which happened versus then and now is unique. 0:13:30.200 --> 0:13:33.040 Back then, the US had a property crisis, and we're 0:13:33.080 --> 0:13:36.440 the largest net importer. Who's doing that? Now China is 0:13:36.480 --> 0:13:38.920 having a property crisis and there's the world's largest net 0:13:38.920 --> 0:13:42.520 import and what's net exporters? So US is very well 0:13:42.559 --> 0:13:46.079 poised for this potential conflict. That's the binary nut model 0:13:46.200 --> 0:13:49.000 right now, If there's a conflict, then Crudel will continue 0:13:49.040 --> 0:13:51.280 advance in the shorter term, but it will lead to 0:13:51.320 --> 0:13:53.600 a move back towards fifty. Why fifty that's the cost 0:13:53.640 --> 0:13:56.240 of production to the US or below that. If if, 0:13:56.520 --> 0:13:59.520 if there's a cleat complete pullback, stocks will do well. 0:13:59.600 --> 0:14:02.120 Crewe Kroto goes back right back to seventy. And that's 0:14:02.160 --> 0:14:04.160 what the forward curve of pricing for. So it's violatively 0:14:04.200 --> 0:14:05.960 but it's just so much going on there. And look, 0:14:06.000 --> 0:14:07.679 we probably see a lot of pressure ease at the 0:14:07.720 --> 0:14:10.640 pump for American consumers, which is something that there are 0:14:10.679 --> 0:14:12.079 a place through they're feeling a lot of pressure. Like 0:14:12.120 --> 0:14:13.200 I want to go back to what you said about 0:14:13.200 --> 0:14:16.599 a possible recession here. Um yeah, well what makes you 0:14:16.640 --> 0:14:19.280 say that all the signs of starting to starting to 0:14:19.280 --> 0:14:21.480 show up in the curve. This was one of the things. Obviously, 0:14:21.560 --> 0:14:22.680 I was one of those people who did well in 0:14:22.680 --> 0:14:25.640 two thousand and eight. I was just too early. Um 0:14:26.200 --> 0:14:28.400 ti timing. Yeah, it is time you get stopped out 0:14:28.400 --> 0:14:30.200 Like the big short he was just able to hold on. 0:14:30.680 --> 0:14:33.640 And there's no better way. I mean, let's put it 0:14:33.720 --> 0:14:35.640 this way. If we have armed conflict in Europe and 0:14:35.760 --> 0:14:38.160 commands continues like there's a very good chance we're gonna 0:14:38.160 --> 0:14:41.120 have a global recession. We're way overdue because we had 0:14:41.120 --> 0:14:43.480 that massive stimulus. They had a sugar high, and it's 0:14:43.520 --> 0:14:46.080 all going away, right. Every central bank in the planet 0:14:46.080 --> 0:14:48.960 is looking to titan except maybe in China for reasons 0:14:48.960 --> 0:14:51.040 they have to. So that's what I think we're looking 0:14:51.080 --> 0:14:52.920 forward to here, and the stock market might be the 0:14:52.920 --> 0:14:55.280 best thing to price it in. If the stock market way, 0:14:55.320 --> 0:14:57.840 we're doing correction. We did it in two thousand nineteen 0:14:57.840 --> 0:15:00.280 and those who worked up fine was that eighteen I 0:15:00.280 --> 0:15:02.480 think was the end of eighteen um. But it's way 0:15:02.520 --> 0:15:04.680 overdue for that, and I think that's what's happening. It's 0:15:04.720 --> 0:15:07.000 just a question. The unique thing is also bitcoin has 0:15:07.040 --> 0:15:09.240 been a leading indicator. It's been weird. Hell that's been 0:15:09.280 --> 0:15:11.000 working like today it was are you saying we should 0:15:11.000 --> 0:15:13.400 be following what bitcoin is doing? Absolutely like today. It 0:15:13.600 --> 0:15:16.040 showed weakness from the very I shot last night, and 0:15:16.040 --> 0:15:18.120 it's predicting what you said right at the top of 0:15:18.120 --> 0:15:19.720 the show that the stock markets down a lot. It's 0:15:19.760 --> 0:15:22.640 been doing that consistently, and we have those days when 0:15:22.640 --> 0:15:24.920 the stock markets down a lot and bitcoin starts move 0:15:24.960 --> 0:15:27.440 bumping up the stock market foul. So it's unique. So 0:15:27.520 --> 0:15:29.960 far this year, bitcoin has been a very good leading indicator. 0:15:30.880 --> 0:15:33.280 But it's it's it's just a question of how long 0:15:33.360 --> 0:15:35.200 that lasts. That's what's so strange, because you know, months 0:15:35.240 --> 0:15:36.800 ago we talked about and you would come in here 0:15:36.800 --> 0:15:38.960 and we talked about it being digital gold right like. 0:15:39.200 --> 0:15:41.680 And on Bloomberg TV when we were joining our friends 0:15:41.680 --> 0:15:44.640 at Bloomberg TV, Caroline Hide had her chart that showed 0:15:44.680 --> 0:15:49.080 the divergence of gold and bitcoin right now, and they're 0:15:49.080 --> 0:15:53.120 moving in completely opposite directions and Bitcoin not not acting 0:15:53.120 --> 0:15:55.200 like hey then can't make it easy. So the way 0:15:55.240 --> 0:15:57.080 I like to describe goal is you can't hold the 0:15:57.120 --> 0:16:00.000 old analog anymore without having some bitcoin into space. Because 0:16:00.120 --> 0:16:03.120 it's a fact that their gold is being replaced in 0:16:03.160 --> 0:16:05.920 portfolios with bitcoin. It's a question of the duration of that. 0:16:06.000 --> 0:16:08.920 So I fully expect Bitcoin to come out ahead. And 0:16:08.960 --> 0:16:11.920 what I see is a very bullish gold. One problem 0:16:11.960 --> 0:16:14.640 with bitcoin and all cryptos if they advanced so much 0:16:14.680 --> 0:16:17.360 so far, they're still very speculative and they have the 0:16:17.400 --> 0:16:19.880 most room to go back. But I think they will 0:16:19.920 --> 0:16:21.560 come out ahead. It's just gonna take time and a 0:16:21.600 --> 0:16:24.600 lot of opinion between It's particularly if the stock market 0:16:24.640 --> 0:16:26.600 continues to drop. You know what happens when stock mark 0:16:26.680 --> 0:16:28.760 drops a lot, more correlations go to one. I don't 0:16:28.760 --> 0:16:30.360 know if you say this story about Heavier Blast and 0:16:30.360 --> 0:16:32.720 Marcus Ashroth by central banks got inflation so wrong, and 0:16:32.720 --> 0:16:37.600 it just talks about monetary policymakers um misjudging commodity markets. 0:16:37.680 --> 0:16:40.640 What do policymakers have to be careful about as they 0:16:40.680 --> 0:16:43.520 look at commodity market moves? So I'm a big fan 0:16:43.560 --> 0:16:45.760 of Javier um and I did you agree with this 0:16:46.280 --> 0:16:48.160 a little bit? I think the key thing is they 0:16:48.200 --> 0:16:51.120 didn't get it wrong. They were too late because it 0:16:51.160 --> 0:16:52.880 was the most of an inflation we're having now is 0:16:52.920 --> 0:16:55.640 not from commodities commandies are. Finally, let's look at Crudel. 0:16:55.680 --> 0:16:58.640 If the Crudel catches up to its peak price in 0:16:59.680 --> 0:17:01.480 UM two thousand and eight in terms of pp I 0:17:01.480 --> 0:17:03.840 would be two a barrel. Yeah, so that's a barren 0:17:03.920 --> 0:17:05.800 market and it's going to continue that beer market. That 0:17:05.920 --> 0:17:09.960 most inflation is from um UM employment cost index is 0:17:10.040 --> 0:17:15.400 from that's owner's equivalent rent and and wages, So crude. 0:17:15.640 --> 0:17:18.080 That's why I look at Crudel's a great leading indicator though, 0:17:18.119 --> 0:17:21.199 because it's it's potential for a reversion is what I 0:17:21.240 --> 0:17:23.760 think will lead this total reversion and everything. But right 0:17:23.760 --> 0:17:26.719 now it's at that stage where there's a war potential war, 0:17:26.800 --> 0:17:29.800 and it's just bidding for that potential. Like you know, 0:17:29.880 --> 0:17:33.960 exactly why the bid is because of the geopolitical is 0:17:34.000 --> 0:17:36.240 completely geolomical, because this is just going to make more 0:17:36.240 --> 0:17:38.080 supply commine. We love when you're in town. We love 0:17:38.080 --> 0:17:39.680 when you're in Florida, but it's even nicer when you're 0:17:39.680 --> 0:17:42.520 in town. Mike mcleogan, Senior Commodity Strategies of Bloomberg Intelligence, 0:17:42.520 --> 0:17:46.960 here with us. Well. According to Mckinzion Coast sales of 0:17:47.000 --> 0:17:50.879 pre on watches which reached nineteen billion and nineteen our 0:17:50.960 --> 0:17:54.560 forecast to grow to more than thirty billion. Remember that's 0:17:54.600 --> 0:17:57.400 something our Bloomberg Pursuits team highlighted in last week's issue 0:17:57.400 --> 0:18:00.200 of Bloomberg Business Week. The team took the time time 0:18:00.240 --> 0:18:02.840 to really dig into how to buy a vintage watch online. 0:18:02.880 --> 0:18:04.720 Not only did they take the time to do that, Carol, 0:18:04.760 --> 0:18:08.520 they really dug into the pre owned sector of watches. 0:18:08.560 --> 0:18:10.480 We have the perfect guest to join us right now. 0:18:10.600 --> 0:18:14.240 Are Vander wall Is, CEO of watch Finder and Company, 0:18:14.440 --> 0:18:16.480 joining us on the phone from London. Are you and 0:18:16.520 --> 0:18:20.000 how are you? I'm doing very well. It's thank you 0:18:20.080 --> 0:18:21.840 for having me well, thank you so much for joining 0:18:21.920 --> 0:18:25.040 us on this. It seems like pre owned watches everywhere 0:18:25.080 --> 0:18:27.560 I turn. You know, a new friend is starting this 0:18:27.640 --> 0:18:31.480 watch collection and I'm wondering the activity that you're seeing 0:18:31.600 --> 0:18:34.520 right now and why you think that. Look. I think 0:18:34.560 --> 0:18:36.879 it's fair to say watches have always had a moment, 0:18:36.960 --> 0:18:39.240 but it really feels particularly right now, like the stats 0:18:39.280 --> 0:18:44.080 that Carol shared, they're having a moment. Yeah, it's there's 0:18:44.119 --> 0:18:46.920 an an incredible I would say the watch Finder we've 0:18:46.920 --> 0:18:50.440 been around this year will actually be our twentieth anniversary year. 0:18:51.200 --> 0:18:54.639 And there's been I would say tremendous growth throughout, but 0:18:54.880 --> 0:18:57.760 especially in the last two years, and there's a there's 0:18:57.760 --> 0:19:00.480 a further acceleration, and I think it's just at the 0:19:00.560 --> 0:19:04.800 overall level of awareness has has grown significantly, so that 0:19:05.160 --> 0:19:09.240 previously many customers they simply didn't know that you could 0:19:09.280 --> 0:19:11.360