WEBVTT - Stocks Gain on U.S. Tax Plan; Bitcoin Rallies 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.920 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Just 0:00:34.159 --> 0:00:37.880 how at risk are you of having a flood? Well? 0:00:38.040 --> 0:00:41.640 When it came to Hurricane Harvey, about forty percent of 0:00:41.680 --> 0:00:45.479 the people who suffered damages of homeowners were outside of 0:00:45.560 --> 0:00:49.520 the flood zone and did not have insurance through the 0:00:49.640 --> 0:00:53.080 National Flood Insurance Program. Here to talk about how to 0:00:53.159 --> 0:00:56.160 assess your risk of flooding and why it is important 0:00:56.160 --> 0:00:59.720 to consider private insurance is Mark Aunky Larry uh CEO 0:00:59.880 --> 0:01:02.400 of Various Analytics and I enjoy us here in our 0:01:02.400 --> 0:01:04.440 Bloombrick eleven three our studios. So, first of all, what 0:01:04.560 --> 0:01:07.959 is Various Analytics. Well, Various Canalytics has some great data 0:01:08.040 --> 0:01:13.240 which provides our customers, insurers, natural resources area as well 0:01:13.280 --> 0:01:16.000 as financial services with great insights into the risk and 0:01:16.040 --> 0:01:18.120 about the decisions they need to make. So how do 0:01:18.160 --> 0:01:21.200 people determine truly their risk if they are not in 0:01:21.480 --> 0:01:25.000 a flood zone and they are not on the coasts. 0:01:25.880 --> 0:01:27.920 I mean, what goes into that? Sure? Well, I mean 0:01:27.920 --> 0:01:30.360 the first thing you have to understand is long ago 0:01:30.560 --> 0:01:34.399 the hundred year plane is really about lenders. Lenders want 0:01:34.400 --> 0:01:36.760 to make sure that their assets, the mortgage that they're 0:01:36.760 --> 0:01:40.240 putting on a home, had insurance. So over the course 0:01:40.240 --> 0:01:43.280 of time, Um, there is a lot of floodplane prone 0:01:43.280 --> 0:01:46.040 areas that aren't covered by those maps. So you're at 0:01:46.160 --> 0:01:48.840 risk well outside those maps. And the fact you just 0:01:48.880 --> 0:01:55.120 provided inside of Harvey of the loss was outside of 0:01:55.120 --> 0:01:59.560 those traditional floodplanes. So risk is much bigger and much expected. 0:01:59.640 --> 0:02:02.400 A lot of consumers have no idea, and at the 0:02:02.400 --> 0:02:06.440 same time, the actual boundaries of flood are extending every day. 0:02:06.800 --> 0:02:09.520 So I just have to wonder, when you start to 0:02:09.639 --> 0:02:12.880 do analytics on this kind of thing, what are you 0:02:12.960 --> 0:02:17.960 looking for? Are you looking for the elevation, the whether 0:02:18.000 --> 0:02:20.799 they're hills, whether it's just a flat plane, whether it's 0:02:20.840 --> 0:02:23.040 covered in concrete, the soil. I mean, what do you 0:02:23.040 --> 0:02:26.120 look for? So great, great opening almost all those So 0:02:26.160 --> 0:02:28.120 there's a lot of very advanced models that take a 0:02:28.120 --> 0:02:30.720 look at all that. So if you price or understanding 0:02:30.919 --> 0:02:33.799 homeowner's insurance policy. A lot of those perils are all 0:02:34.000 --> 0:02:36.959 captured in that. So the models are very effective and 0:02:37.080 --> 0:02:40.080 understanding both the floodplains. But what they do is they 0:02:40.120 --> 0:02:42.760 go beyond to understand how rising water will effect an area, 0:02:43.440 --> 0:02:47.080 whether it's paved or not paved. An example, distance to coast, 0:02:47.240 --> 0:02:52.120 distance to you know, the various natural tributaries, tributaries. The 0:02:52.200 --> 0:02:55.160 elements of risk are beyond just what has been a 0:02:55.919 --> 0:02:58.760 UH map that's been around for a long time that 0:02:58.840 --> 0:03:02.560 has been kind of altered for different legislative problems and issues. 0:03:02.720 --> 0:03:05.800 So how who pays you? I mean do insurance companies basically, 0:03:05.840 --> 0:03:08.200 So it's basically the insurers who are looking to write 0:03:08.240 --> 0:03:10.880 those risks. So I think there's a great opportunity to 0:03:10.919 --> 0:03:14.359 take some of what is you know, the flood insurance 0:03:14.400 --> 0:03:17.040 and bring it to the private market so insurers can 0:03:17.040 --> 0:03:20.200 provide that to consumers. And I think that's a very 0:03:20.320 --> 0:03:23.320 viable and opportunity. I don't really see how they could 0:03:23.360 --> 0:03:26.240 do that if they could compete with the National Flood 0:03:26.280 --> 0:03:28.680 Insurance Program of the U S which is set to 0:03:28.720 --> 0:03:31.000 expire later this year. But I'm sure we'll get pasted 0:03:31.040 --> 0:03:33.280 again because politically it would be unviable for them to 0:03:33.280 --> 0:03:35.600 say to all the people on the coast of Florida 0:03:35.880 --> 0:03:39.440 and North Carolina, well, go go fish, go go figure 0:03:39.440 --> 0:03:41.000 it out for yourselves, and we're not going to insure 0:03:41.000 --> 0:03:43.839 you anymore. Um. But a lot of people have said 0:03:43.840 --> 0:03:47.280 that that's not an economically viable program, that there will 0:03:47.320 --> 0:03:50.280 be much bigger losses than the income that they bring in. 0:03:50.800 --> 0:03:54.480 So any private insurance policy would be vastly more expensive. No, 0:03:55.160 --> 0:03:58.119 So I think the answer is not necessarily to replace 0:03:58.400 --> 0:04:00.280 uh the n f I paper. I think that needs 0:04:00.280 --> 0:04:03.240 to continue. I'm not going to get into the politics 0:04:03.280 --> 0:04:06.040 of that, but the reality is there should it needs 0:04:06.040 --> 0:04:09.600 to be private insurance to augment it, to provide insurance 0:04:09.640 --> 0:04:12.720 to those who are in a floodplaine that have risk. Um. 0:04:12.760 --> 0:04:14.720 I think what we are looking to do is try 0:04:14.760 --> 0:04:17.120 to provide the same type of options and flexibility that 0:04:17.160 --> 0:04:20.680 are available from a homeowner's perspective, trying to provide things 0:04:20.720 --> 0:04:24.080 that's affordable and available from a private perspective outside those 0:04:24.080 --> 0:04:25.880 flood zones. And I think, you know, you need to 0:04:25.880 --> 0:04:28.919 actually have some actual sound rating information so that the 0:04:28.920 --> 0:04:31.800 pricing is accurate. Your point is valid there, it's been 0:04:31.800 --> 0:04:34.800 a little bit subsidized, a little bit subsidized. It's a 0:04:34.880 --> 0:04:38.039 very very diplomatic way of putting it, compared to some 0:04:38.120 --> 0:04:40.560 of the language I've heard from other people. Uh, just 0:04:40.640 --> 0:04:42.640 can you give us a sense of which insurance companies 0:04:42.680 --> 0:04:46.320 are interested in underwriting this type of policy. So right now, 0:04:46.400 --> 0:04:48.840 there's a group of very large insurers they're called write 0:04:48.839 --> 0:04:51.839 your own um. Historically they have been kind of focused 0:04:51.880 --> 0:04:54.600 on providing is a distribution channel to the n f 0:04:54.680 --> 0:04:57.120 I pay um. I think under some of the more 0:04:57.160 --> 0:05:00.440 recent legislation, they will now be allowed to both uh 0:05:00.600 --> 0:05:03.320 distribute the n f I P insurance as well as 0:05:03.360 --> 0:05:05.479 write your own I think many sharers, both on the 0:05:05.480 --> 0:05:09.520 commercial and personal lines will write the program to get 0:05:09.520 --> 0:05:13.480 the proper pricing and rates. And I'm sure that it's 0:05:13.520 --> 0:05:15.479 not too hard to find investors who want to put 0:05:15.520 --> 0:05:17.520 up the capital on the other side, because everyone's looking 0:05:17.520 --> 0:05:19.200 for yields, and you can probably get a good yield 0:05:19.240 --> 0:05:21.320 for this, right I would agree what kind of yields 0:05:21.320 --> 0:05:23.800 are looking at? Well, I think you'd see that from 0:05:23.800 --> 0:05:26.320 an insurance perspective, r O s IF in the industry 0:05:26.320 --> 0:05:28.880 have historically been around seven percent, So I think most 0:05:28.880 --> 0:05:30.719 people who are kind of coming in from an alternative 0:05:30.720 --> 0:05:33.599 capital are going to look something that would be low 0:05:33.839 --> 0:05:36.480 sick double digits. All right, thank you so much, low 0:05:36.480 --> 0:05:40.640 double digits eleven twelve. In a time like this of 0:05:41.040 --> 0:05:44.160 nine point seven trillion dollars of negative yielding debt, I'm 0:05:44.200 --> 0:05:46.200 sure they could find some some takers for that mark. 0:05:46.279 --> 0:05:48.320 Uncle Larry, thank you so much for joining us chief 0:05:48.360 --> 0:05:51.360 operating Officer of various Analytics, which takes a look at 0:05:51.440 --> 0:05:56.640 the risks that are implied when people take out flood insurance. Uh. 0:05:56.960 --> 0:05:58.839 Of course, if you want to know the truth. I 0:05:58.839 --> 0:06:02.400 actually bought my apartments specifically because it was an elevation 0:06:02.480 --> 0:06:04.240 that would not get flooded. But now I'm going to 0:06:04.320 --> 0:06:05.960 have to go back and this will be another thing 0:06:06.000 --> 0:06:07.800 that I can worry about later to late at night 0:06:07.839 --> 0:06:25.680 when I don't have anything else to worry about. Semi 0:06:26.040 --> 0:06:31.440 followed Cebo opening up for bitcoin futures trading last night, 0:06:31.560 --> 0:06:33.960 and the results have been pretty good. They have not 0:06:34.040 --> 0:06:38.480 seen major hiccups, they have seen the trading volumes that 0:06:38.720 --> 0:06:42.839 they have been good. All systems seem ago here to 0:06:43.120 --> 0:06:46.400 put this into perspective and figure out whether this paves 0:06:46.440 --> 0:06:51.799 the path for more institutional money flying into this cryptocurrency 0:06:51.839 --> 0:06:55.599 as Ken Fisher, Founder, chairman and co chief investment officer 0:06:55.640 --> 0:06:59.160 of Fisher Investments. Ken, thank you so much for joining us. 0:06:59.720 --> 0:07:02.359 I want to start with I want to start with 0:07:02.400 --> 0:07:06.279 bitcoin because it seems to be the rage right now, 0:07:06.440 --> 0:07:11.400 and because it's sort of highlights the degree of desire 0:07:11.840 --> 0:07:15.840 for volatility and bigger profits than you can get elsewhere. 0:07:16.280 --> 0:07:18.320 What's your take on it? Are you investing in it? 0:07:18.360 --> 0:07:20.200 Are you staying away from it? Do you see it 0:07:20.200 --> 0:07:24.840 as a sign of a bubble? Uh? So I've got 0:07:24.840 --> 0:07:27.800 to take on it that I haven't had until last week, 0:07:29.360 --> 0:07:33.440 which is last week. I'm in Manhattan, and I'm appearing 0:07:33.440 --> 0:07:37.120 in various places, and I'm commenting on bitcoin, and I 0:07:37.160 --> 0:07:42.800 was routinely in print, taken out of context and misinterpreted 0:07:42.840 --> 0:07:46.040 in almost everything that I said by people who seem 0:07:46.120 --> 0:07:49.040 to have some other goal. And I've never seen that 0:07:49.080 --> 0:07:51.960 happen before. So I've made a conscious decision as of 0:07:52.080 --> 0:07:55.200 last week, I'm not talking about bitcoin ever or crypto ever, 0:07:55.360 --> 0:07:59.200 because it's a crazy world. People just cannot keep themselves 0:07:59.240 --> 0:08:01.760 to the facts. The things that I said, which was 0:08:01.920 --> 0:08:06.960 all actually on TV, are clear because there's a clear 0:08:07.000 --> 0:08:08.840 record off I didn't do any other interviews, and there's 0:08:08.880 --> 0:08:11.880 all these other things that appeared online in print saying 0:08:11.920 --> 0:08:13.920 things that I said, things that I never said. I 0:08:13.960 --> 0:08:15.680 think that's crazy, and I think that's an awful lot 0:08:15.680 --> 0:08:19.600 of what goes on with the rest of bitcoin. Oh. 0:08:20.600 --> 0:08:23.200 You know, I'm to go back that stuff on CNBC 0:08:23.320 --> 0:08:26.400 and on the street dot com. And you know, basically 0:08:26.640 --> 0:08:27.920 all that I said was I don't know if the 0:08:27.920 --> 0:08:31.320 bubble or not. I hate that term bubble, but the 0:08:31.360 --> 0:08:35.480 price movement in trading days before and after where we 0:08:35.559 --> 0:08:39.840 are as of last week is in percentage magnitude bigger 0:08:39.880 --> 0:08:42.960 than any of the bubbles of history. That doesn't make 0:08:43.000 --> 0:08:45.960 it a bubble. It just makes it a big price movement. Uh. 0:08:46.000 --> 0:08:47.920 The other thing that I've said and that I'll say 0:08:47.920 --> 0:08:51.680 about bitcoin is it in every long bull cycle, there 0:08:51.840 --> 0:08:56.560 is some non stock market phenomena or close to stock 0:08:56.600 --> 0:09:00.160 market phenomena that gives you a kind of a you 0:09:00.200 --> 0:09:03.199 into a kind of a window pane into the coming 0:09:03.200 --> 0:09:07.040 euphoria stocks. Coming back to John Templeton's line, the bull 0:09:07.080 --> 0:09:10.520 markets are born on pessimism, growing skepticism, ature on optimism, 0:09:10.520 --> 0:09:15.560 and die of euphoria, and that euphoria, which is normally 0:09:15.600 --> 0:09:18.640 the end of a bull market unless something governmental comes 0:09:18.679 --> 0:09:21.920 along and noxious under first is something it's always not 0:09:22.160 --> 0:09:24.880 clear fully that we're going to get to. But I 0:09:24.920 --> 0:09:28.199 think the crypto thing is the first real sign we're 0:09:28.240 --> 0:09:31.959 seeing in this long cycle of the coming of euphoria. 0:09:32.080 --> 0:09:35.280 It's the window pane into the coming of euphoria for stocks. 0:09:36.000 --> 0:09:39.000 So what are you looking for to determine whether that 0:09:39.080 --> 0:09:41.480 euphoria has started to bleed over? I mean, how do 0:09:41.520 --> 0:09:44.880 you know that we aren't there yet? Oh, that's easy, 0:09:45.080 --> 0:09:48.880 that's trivial. Look at all of the nonsense that people 0:09:48.960 --> 0:09:51.280 worry about that they stop worrying about when you get 0:09:51.280 --> 0:09:54.200 to euphoria. I mean, I've been doing this stuff, you know, 0:09:54.280 --> 0:09:57.640 since the early seventies. And when you get to euphoria, 0:09:57.760 --> 0:09:59.960 people stop worrying about things like are there too many 0:10:00.040 --> 0:10:03.240 new highs? Uh? They stop worrying about things like as 0:10:03.280 --> 0:10:07.120 the markets pe two high, they stop worrying about all 0:10:07.120 --> 0:10:11.400 of the kinds of things like uh, the next said hike. 0:10:11.800 --> 0:10:14.240 Because you actually get to that point when there's euphoria 0:10:14.280 --> 0:10:16.480 where they invert the yel curve and nobody much pays 0:10:16.480 --> 0:10:18.920 attention or notices because they conclude that it doesn't matter. 0:10:19.600 --> 0:10:24.800 It's the worrying stopping about the things that people have 0:10:24.880 --> 0:10:28.360 worried about over and over and over again wrongly, which 0:10:28.400 --> 0:10:31.400 ironically is about the time to get worried. But we 0:10:31.480 --> 0:10:33.840 still have those things. We still have people that have 0:10:33.880 --> 0:10:36.480 a fear of heights, that think the market has been 0:10:36.520 --> 0:10:39.959 too strong, particularly in America. That's true more so than 0:10:40.000 --> 0:10:43.160 overseas because of the UH you know, if you look 0:10:43.240 --> 0:10:48.439 overseas Britain, some continental Europe, more the equity returns have 0:10:48.480 --> 0:10:52.240 been muted by currency strength, and so there's has been 0:10:52.280 --> 0:10:55.440 so buoyant normally in the late stages of bowl markets. 0:10:55.480 --> 0:10:58.240 As you move into that eusphoria phase, you get some 0:10:58.559 --> 0:11:02.679 multiple big years this cycle, and we haven't really had 0:11:02.720 --> 0:11:05.160 that normally. The first third of time of a ballmark 0:11:05.240 --> 0:11:08.000 it's pretty steep, the middle thirds flatish in the back 0:11:08.080 --> 0:11:10.800 their steep and of the return comes in the first 0:11:11.200 --> 0:11:14.400 and last the ball market only about the middle third. 0:11:15.440 --> 0:11:17.800 Before I came on, there was a comment that we've 0:11:17.840 --> 0:11:22.640 had the most new high since nineteen which is true, um, 0:11:22.679 --> 0:11:27.360 but also people forget that NT was at seven percent 0:11:27.480 --> 0:11:30.440 year and still had years ahead of it in the 0:11:30.440 --> 0:11:33.520 ball market. Uh, an interesting point that I think people 0:11:33.600 --> 0:11:36.640 kind of miss in context. We still have a long 0:11:36.720 --> 0:11:40.360 ways to go unless the government does something stupid, which 0:11:40.360 --> 0:11:43.320 is so possible. Well, so if that's the case, it 0:11:43.360 --> 0:11:47.680 sounds like, are you getting more heavily invested in risk 0:11:47.800 --> 0:11:49.920 your stocks? I mean, is this time the time to 0:11:49.920 --> 0:11:51.920 go all in if we still have the last third 0:11:51.920 --> 0:11:55.679 of games to go? The time to get all in 0:11:55.920 --> 0:11:59.959 was two thousand and nine, and I've been nearly endlessly bullish, 0:12:00.080 --> 0:12:03.319 but not in what you think of as risk gier stocks. 0:12:03.320 --> 0:12:05.600 In the back third of the time of the ball market, 0:12:05.920 --> 0:12:08.559 the categories of stocks that typically do best are not 0:12:08.640 --> 0:12:11.680 the ones that people think they will, because the market 0:12:11.880 --> 0:12:14.959 is a function that works off surprise. The things that 0:12:15.040 --> 0:12:17.000 do best in the last stage of a ball market 0:12:17.280 --> 0:12:21.720 are categorically what you could call comfort stocks. They're big, 0:12:22.160 --> 0:12:27.520 they're reputationally impeccable. There are things that are not thought 0:12:27.520 --> 0:12:31.199 of as needles in the haystack, but as too obvious 0:12:31.240 --> 0:12:34.560 to likely do well. They're perfectly the stocks that the 0:12:34.679 --> 0:12:37.480 last greater fool who gets into the market that was 0:12:37.520 --> 0:12:40.400 too afraid to buy a single thing one week before 0:12:40.960 --> 0:12:44.880 is ready to dip his toe into because their comfort stocks. 0:12:44.920 --> 0:12:50.200 So this would be big, global, high quality, well branded names. 0:12:50.679 --> 0:12:53.480 This is why the Fangs are doing so well. Uh. 0:12:53.520 --> 0:12:58.600 It's classically big pharma for the same reason. The person 0:12:58.679 --> 0:13:03.160 with money, who is typically older, buys the drugs, knows 0:13:03.240 --> 0:13:07.760 his friends would buy the drugs. Big global name, high quality, 0:13:08.080 --> 0:13:11.360 easy to do. The last people to get into the 0:13:11.400 --> 0:13:13.720 market to push it up the most. You keep pushing 0:13:13.720 --> 0:13:17.000 it up even as it's starting to fall. Those people, 0:13:17.679 --> 0:13:19.560 they were too afraid to buy anything before, so they 0:13:19.640 --> 0:13:21.560 might buy the stock of the company they worked for. 0:13:21.840 --> 0:13:23.840 They might buy the stock of the company their spouse 0:13:23.880 --> 0:13:26.360 works for. They might buy the one that brother works for. 0:13:26.679 --> 0:13:28.480 And when you get a little beyond that, they buy 0:13:28.640 --> 0:13:31.840 big global, safe names. Ken Fisher, thank you so much 0:13:31.840 --> 0:13:34.640 for joining us. Ken Fisher, Founder, chairman and co chief 0:13:34.720 --> 0:13:55.720 investment officer of Fisher Investments. Shoppers spent a record seventy 0:13:55.920 --> 0:14:00.760 seven point five billion dollars online. That's just since November 0:14:00.840 --> 0:14:04.400 one through yesterday. Every single one of those forty four 0:14:04.480 --> 0:14:09.240 days has been a billion dollar day. Some shocking statistics, 0:14:09.679 --> 0:14:13.480 uh from Adobe Sense and I'd love to get some 0:14:13.559 --> 0:14:16.480 insight on what we can expect in the remaining a 0:14:16.520 --> 0:14:19.000 few months and weeks of the year to America. Affney 0:14:19.040 --> 0:14:22.960 joins us now. She's senior director of Adobe Digital Insights, 0:14:23.000 --> 0:14:26.840 which has been looking into some of the data from 0:14:27.040 --> 0:14:30.960 the biggest online retailers and trying to project what we 0:14:31.000 --> 0:14:34.160 can expect. Tamara, thank you so much for joining us. 0:14:35.280 --> 0:14:37.480 Good morning. It's great to be here. Good morning. So 0:14:37.480 --> 0:14:40.960 so let's just get us start with how much can 0:14:41.040 --> 0:14:46.240 we see online sales accelerate before it becomes a logistics nightmare. Oh, 0:14:46.280 --> 0:14:49.360 that's a really great question. We actually are seeing right 0:14:49.400 --> 0:14:53.400 now about a thirteen point one percent growth in online 0:14:53.440 --> 0:14:56.760 shopping versus last year. We're expecting that to end up 0:14:56.800 --> 0:14:59.160 at thirteen point eight percent because the last couple of 0:14:59.200 --> 0:15:02.240 weeks of of the month actually turned out to be 0:15:02.360 --> 0:15:06.080 higher growth rate months weeks because of the fact that 0:15:06.120 --> 0:15:09.160 people can ship later and later, Which brings me to 0:15:09.200 --> 0:15:11.200 your question, which is how much more can we ship? 0:15:11.680 --> 0:15:14.360 And Uh, I think that is we're just lucky that 0:15:14.400 --> 0:15:17.560 we haven't had any big storms to slow down any 0:15:17.600 --> 0:15:20.840 of those shipping and delivery services. Well, I mean we've 0:15:20.840 --> 0:15:25.160 already heard about ups, for example, being worried about some 0:15:25.280 --> 0:15:30.000 kind of logistic interruption. I'm sure that they're all racing 0:15:30.080 --> 0:15:32.440 to make sure that their stations are up to speed. 0:15:32.920 --> 0:15:35.880 We know that UPS and FedEx both are considering having 0:15:35.960 --> 0:15:39.920 some kind of voluntary pick up at drug stores or 0:15:39.960 --> 0:15:45.800 local businesses to try to expedite some of the the deliveries. 0:15:46.120 --> 0:15:50.040 I'm just wondering, is the infrastructure okay with this growth? 0:15:50.040 --> 0:15:52.840 At what point will it not be Well? At this 0:15:52.920 --> 0:15:55.240 point seems to be okay, but you do see the 0:15:55.400 --> 0:16:00.320 pure play online retailers investing in actual physical store look stations, 0:16:00.360 --> 0:16:02.240 and part of the reason why they be doing that 0:16:02.680 --> 0:16:04.120 is to make sure they do have a place to 0:16:04.200 --> 0:16:08.239 drop off when the event happens that online shopping overcomes 0:16:08.280 --> 0:16:13.440 our logistic capacity and trucking just becomes overloaded. Uh. The 0:16:13.480 --> 0:16:15.360 other thing is going on right now is that the 0:16:15.440 --> 0:16:18.360 average order value that's how much is put into a cart, 0:16:18.680 --> 0:16:21.280 is a little bit down, but the amount of orders 0:16:21.360 --> 0:16:22.960 is up, and that means there are more and more 0:16:23.000 --> 0:16:25.960 boxes floating around. I was in Manhattan last year and 0:16:26.000 --> 0:16:28.040 it was a sea of boxes. I'm sure it's like 0:16:28.080 --> 0:16:30.800 that today. So it's so yes, this is going to 0:16:30.880 --> 0:16:34.600 be a challenge. But Amazon Whole Foods now, so anywhere 0:16:34.640 --> 0:16:36.200 there's a whole Foods. If they want to ship to 0:16:36.280 --> 0:16:38.440 that location, they might be able to just have people 0:16:38.480 --> 0:16:42.520 going to pick up stuff. So is the the sales profile? 0:16:42.600 --> 0:16:45.440 Is it pretty much even across the retailers. Is it 0:16:45.600 --> 0:16:49.240 mostly Amazon dot Com that's sucking up all the gains 0:16:49.320 --> 0:16:52.240 here or were also seeing an increase in Walmart and 0:16:52.360 --> 0:16:56.560 even in same Nordstrom. Well, you know, in my data set, 0:16:56.600 --> 0:16:58.920 I need to give you more broad answer, so I 0:16:58.920 --> 0:17:01.480 can tell you that the law are just retailers. The 0:17:01.560 --> 0:17:04.080 ones who have a massive shopping catalog where it's a 0:17:04.119 --> 0:17:07.360 one shop kind of deal are picking up much more 0:17:07.480 --> 0:17:11.840 than average. The place where small retailers are winning is 0:17:11.880 --> 0:17:15.200 in the mobile shopping category. They're actually with a more 0:17:15.240 --> 0:17:18.880 targeted catalog and more specific items that you go there 0:17:18.920 --> 0:17:21.440 to buy. It's much easier when you're under mobile phone. 0:17:21.640 --> 0:17:23.000 I don't know about you, but if I want to 0:17:23.040 --> 0:17:27.080 go find something like a silver bracelet, I don't want 0:17:27.080 --> 0:17:30.520 to look at a thousand pages on my phone. So 0:17:30.760 --> 0:17:33.639 that so there's a place for small retailers. There's obviously 0:17:34.000 --> 0:17:36.639 the big places for the super large retailers. The middle 0:17:36.680 --> 0:17:40.960 guys are not doing so hot. What about apparel? Apparel 0:17:41.080 --> 0:17:43.720 is really interesting It's one of the only categories that 0:17:43.800 --> 0:17:48.360 continues to see discounts even after Christmas is over. Right 0:17:48.359 --> 0:17:51.399 now with discounts, we're still seeing some fairly good deals. 0:17:51.720 --> 0:17:55.160 TVs are at about fifteen point three percent discount that's 0:17:55.200 --> 0:17:58.760 coming off of though on Black Friday, So things are 0:17:58.760 --> 0:18:01.000 starting to get more and more sensitive. But a perilous 0:18:01.040 --> 0:18:03.479 one of those areas that doesn't get more expensive. It 0:18:03.480 --> 0:18:06.280 actually gets cheaper as soon as you get into January. 0:18:06.320 --> 0:18:10.159 Are we seeing tech really still being the hot spot? 0:18:10.240 --> 0:18:13.639 And if so, is it all concentrated in one area 0:18:13.760 --> 0:18:16.840 is it pretty much across the board with basically kids 0:18:16.880 --> 0:18:19.240 across the world seeing what my children do, which is 0:18:19.280 --> 0:18:22.840 just they want anything and all things tech. It's true, 0:18:22.920 --> 0:18:25.679 tech is one of those categories that just keeps growing 0:18:25.720 --> 0:18:28.679 and growing. In fact, it's almost hard to differentiate a 0:18:28.720 --> 0:18:32.119 toy from tech at this point. Is the new video 0:18:32.160 --> 0:18:36.400 game console the PlayStation for Pro with VR is that tech? 0:18:36.520 --> 0:18:39.200 Or is that a game or toy? What is that now? 0:18:39.520 --> 0:18:43.040 But yeah, the electronics category is seeing iPads and air 0:18:43.080 --> 0:18:47.040 pods and Amazon Fire TVs and echo devices flying off 0:18:47.040 --> 0:18:50.200 the shelves, and those discounts are pretty good right now 0:18:50.240 --> 0:18:55.200 as well. Computers, for example, are at about seven percent down. 0:18:55.880 --> 0:18:59.840 Black Friday saw six discounts, So again all of that 0:19:00.160 --> 0:19:02.879 it's going to be under the Christmas tree and giving 0:19:03.280 --> 0:19:06.520 gifts to all those from every category from kids to 0:19:07.000 --> 0:19:10.000 two dads to moms and and and even grandparents are 0:19:10.000 --> 0:19:12.960 getting in on the tech tech buying. To Mary Gaffney, 0:19:12.960 --> 0:19:14.880 thank you so much for joining us to Mary Gaffney 0:19:15.000 --> 0:19:34.639 is Senior director of Adobe Digital Insights. There's been a 0:19:34.680 --> 0:19:38.199 lot of talk about retailers that have slowly been dying 0:19:38.480 --> 0:19:41.160 for a number of years, and the question has been 0:19:41.480 --> 0:19:43.960 when are they going to finally kick the bucket? You know? 0:19:44.080 --> 0:19:47.160 And today I looked at a story at Bonton's Stories 0:19:47.200 --> 0:19:50.480 to lead a December fifteenth payment on some of its debt. 0:19:51.359 --> 0:19:54.400 Hasn't a fault yet. They still have a just grace period, 0:19:54.520 --> 0:19:58.000 but it's sort of eching closer to that sort of 0:19:58.000 --> 0:20:01.359 tipping point. Bert Flickinger here with us, managing director at 0:20:01.359 --> 0:20:06.520 Strategic Resource Group UH Bonton is one of these stores 0:20:06.560 --> 0:20:08.960 that has been on death watch. Is this the final nil? 0:20:09.800 --> 0:20:13.440 It could be the final nil, Lisa for three reasons. One, 0:20:13.520 --> 0:20:18.119 it's primarily a rust belt retailer, and the better economy 0:20:18.200 --> 0:20:21.359 hasn't gotten to the regions where many of the retail 0:20:21.400 --> 0:20:25.040 stores are to Uh, the off price retailers from Burlington 0:20:25.160 --> 0:20:28.920 to t j X Max Marshalls have opened very aggressively 0:20:29.000 --> 0:20:33.080 against them, So that's very problematic. And three, they've had 0:20:33.119 --> 0:20:36.640 a lot of leadership changes. So when when they when 0:20:36.640 --> 0:20:39.920 they lost a couple of good CEOs back to back. 0:20:40.040 --> 0:20:42.879 The vendors had been supportive of the Bontan stores, but 0:20:42.920 --> 0:20:46.760 the Herburger stores have been in recently in North Dakota, Minnesota, 0:20:47.359 --> 0:20:52.560 upper Midwestern region, Carson's in Chicago. Uh, inventories a little light, 0:20:53.000 --> 0:20:56.120 the circular pages, the ad pages a little light. Uh 0:20:56.160 --> 0:20:59.159 So getting the cash in for Christmas, Hanukah, New Year's 0:20:59.480 --> 0:21:02.240 is going to be concerning to your important point. Well, 0:21:02.280 --> 0:21:04.760 I just have to wonder though, also whether we're reaching 0:21:04.760 --> 0:21:08.760 a point given the increasing pressure from Amazon dot Com, 0:21:08.800 --> 0:21:11.760 the fact that there have been so many years when 0:21:11.760 --> 0:21:15.600 these struggling retailers have failed to turn themselves around. Dr J. C. Penney, 0:21:15.640 --> 0:21:19.119 I'm talking Claire's, I'm talking uh years, I'm talking you know, 0:21:19.160 --> 0:21:22.800 you're your sort of a list of laggards. I'm just wondering, 0:21:22.920 --> 0:21:24.879 is next year going to be the one when we 0:21:24.960 --> 0:21:27.720 actually start to see the fallout here. Next year is 0:21:27.760 --> 0:21:29.680 going to be the one. And then uh t TM 0:21:29.760 --> 0:21:32.639 or trailing twelve months is you You and your team 0:21:32.640 --> 0:21:35.600 of Bloomberg News have reported well as well as the 0:21:35.600 --> 0:21:39.879 Bloomberg terminal twenty retail chains of file for either bankruptcy 0:21:39.960 --> 0:21:43.520 or liquidation this year, so in the last twelve months. 0:21:43.960 --> 0:21:47.560 And but the key ones to your your key point 0:21:47.920 --> 0:21:52.680 are going to be in and nineteen and primarily eighteen 0:21:53.160 --> 0:21:58.480 where the vendors are seeing price deflation. Ors Tom Keane 0:21:58.800 --> 0:22:01.639 always says, I want to know, ay, you are average 0:22:01.720 --> 0:22:05.200 unit retail and the vendors are seeing average unit retailer. 0:22:05.400 --> 0:22:08.119 The retailers are seeing average unit retail. And if you 0:22:08.160 --> 0:22:12.520 can't drive higher sales like the well capitalized competitors, the Bonton's, 0:22:12.560 --> 0:22:16.000 the Sears, the Claire's, all the key concerning change of 0:22:16.080 --> 0:22:21.119 referenced are are brilliant for tough times. What's the what's 0:22:21.160 --> 0:22:25.000 the catalyst here? Why now? Or why next year? Why now? 0:22:25.240 --> 0:22:28.880 Is the toys r US bankruptcy really caught the vendor 0:22:28.960 --> 0:22:32.240 community by surprise. We've met with the vendor community over 0:22:32.280 --> 0:22:35.520 the summer. They've been fully supportive. UH two toys r 0:22:35.680 --> 0:22:38.199 US and you could see it in the Toys her 0:22:38.320 --> 0:22:42.840 US ads that ran last weekend and uh pre and 0:22:42.920 --> 0:22:46.480 during Black Friday it's only four pages, while Target is 0:22:46.480 --> 0:22:49.359 putting out a seventy two page full color toy book. 0:22:49.840 --> 0:22:53.160 And so it is your referencing Amazon shifting the sales, 0:22:53.200 --> 0:22:57.080 Target Walmart shifting the sales. The under capitalized retailers aren't 0:22:57.119 --> 0:23:01.960 getting the extra money to advertise TV, radio, social, digital 0:23:02.280 --> 0:23:05.200 connective and the key circulars that go to the homes 0:23:05.200 --> 0:23:08.199 in the in the Sunday papers, and with that it 0:23:08.280 --> 0:23:12.600 hurts customer count. And Bontan and the others don't benefit 0:23:12.680 --> 0:23:16.920 from Star Wars setting box office records this weekend. They 0:23:16.960 --> 0:23:20.520 have the FAO Schwartz toys, not the Star Wars license toys. 0:23:20.560 --> 0:23:23.600