Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
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Speaker 1: search Bloomberg clovel News. All right, we are watching the
Speaker 1: energy markets. Of course, we just heard from President Biden
Speaker 1: UH pushing the oil release, saying in his planned to
Speaker 1: release a million barrels of oil a day from US
Speaker 1: reserves as for the six for six months. It's really
Speaker 1: massive and aggressive, laying a foundation for the country to
Speaker 1: achieve independence from foreign energy suppliers. This is our new
Speaker 1: world order. As for w t I crude right now
Speaker 1: pretty much hovering near loads of the session, down about
Speaker 1: uh six and a quarter percent, down almost seven bucks.
Speaker 1: So let's get to it with our guest Julia Fanzeris
Speaker 1: is oil markets reporter for Bloomberg New She's with us
Speaker 1: right now in the Bloomberg Interactive Broker's studio. Julia a
Speaker 1: journalist asking President Biden how quickly and how much is
Speaker 1: this going to lower prices at the pump? The President
Speaker 1: didn't really have a clear answer for that. Of course,
Speaker 1: it's market based, but based on your research, based on
Speaker 1: your reporting, uh, how much is it going to affect
Speaker 1: prices at the pump? Right? And it was a good question,
Speaker 1: because it's going to take at least three weeks for
Speaker 1: any crude future price to reach to the pump, and
Speaker 1: so taking that into consideration, you have to realize that there,
Speaker 1: as you mentioned other aspects going into this. It's also
Speaker 1: we're going into summer driving season, and that in itself
Speaker 1: is ratcheting up demand. And so even with these higher
Speaker 1: crude amounts, they're still going to be high demand and
Speaker 1: that's going to be the real problem. So, yes, it
Speaker 1: probably will lower gas prices for a little bit, but
Speaker 1: traders and all of my sources are saying this is
Speaker 1: just a short term band aid solution. It's not going
Speaker 1: to help in the long term. Well, the other thing
Speaker 1: that I had heard and this was gone back a
Speaker 1: couple of months when we're talking about higher energy prices.
Speaker 1: I think this was pre war. Um is that you
Speaker 1: know some states that added taxes, like you have to
Speaker 1: understand that there's a lot of things that ultimately go
Speaker 1: in to what you pay at the pump exactly. And
Speaker 1: this is no one likes higher prices, no one. The
Speaker 1: consumers don't like it. Obviously politicians don't like it. And
Speaker 1: so but to try to game the market and to
Speaker 1: try to lower prices like that, it's just not going
Speaker 1: to work. And we have to remember the spair is
Speaker 1: supposed to be used in emergencies, and so to use
Speaker 1: such a large amount to try to fix these high
Speaker 1: gasoline prices. A lot of people have been talking to
Speaker 1: him and saying, well, you're just going to drain the
Speaker 1: spr how are you going to get all of that
Speaker 1: crewed back and then when there's a real emergency that's
Speaker 1: a huge problem. Well, he called it a wartime bridge
Speaker 1: to up supply until production ramps up. He did say
Speaker 1: that they will uh sell the oil at market now
Speaker 1: and then use that money to then buy oil back
Speaker 1: when the price you know, ostensibly goes lower. But I
Speaker 1: want to go to the production part because he called
Speaker 1: out companies. He was pretty harsh, Um, what was your
Speaker 1: reaction to that? And what are they what could they
Speaker 1: be doing right now to help ease this supply crunch.
Speaker 1: What was funny about that is he saying, you know,
Speaker 1: it's a bridge until the production ramps up. But why
Speaker 1: would production ramp up in December and not right now?
Speaker 1: If so, it doesn't really make sense that he's saying, well,
Speaker 1: it's a bridge until the later, until the winter when
Speaker 1: they start ramping up production. Because if companies wanted to
Speaker 1: ramp up production, they were going to do it now.
Speaker 1: And as we mentioned previously, companies don't really want to
Speaker 1: ramp up production for several reasons. One, this administration has
Speaker 1: not been friendly towards oil companies, so the idea of
Speaker 1: them ramping up production in the meantime just doesn't seem
Speaker 1: like a good idea to them. They don't they don't
Speaker 1: want to be stuck like two fourteen with all of
Speaker 1: these extra barrels when demand then lowers down and it
Speaker 1: takes a while to ramp up production. So Biden was
Speaker 1: writ in the sense that it does take a while
Speaker 1: to ramp up production, but they would have to have
Speaker 1: started months ago. So what's the likelihood if we take
Speaker 1: the big picture, especially if you consider the conversations and
Speaker 1: the aggressive ones that we've been having about a pivot
Speaker 1: towards more alternative energy. Again, like you say, you know,
Speaker 1: I've seen you know, the rush up in the back
Speaker 1: ends a few years ago with all of the frocking
Speaker 1: and everybody, you know, just frenetic activity. But that's an
Speaker 1: area that's seeing boom and busts. So what is the
Speaker 1: likelihood that companies do anything in terms of investments are
Speaker 1: opening up the spigots when it comes to increasing the
Speaker 1: oil supplies or how long, like how they're gonna wait,
Speaker 1: They're going to wait. And we've even had he even
Speaker 1: sided that there was one oil company that said, even
Speaker 1: at two dollars barrel, we're not going to drill more.
Speaker 1: There are some companies that way, wait, slow down two barrel,
Speaker 1: and they still will not. So what is the break
Speaker 1: even point or what is the tipping point that says okay,
Speaker 1: we're in this. Well part of it is right now
Speaker 1: the market is fluctuating so much, the volatility so high,
Speaker 1: so it needs to be sustained higher prices and I
Speaker 1: think that production. They're not seeing that, they're not seeing
Speaker 1: sustained higher prices, they're just seeing Okay, well, this is
Speaker 1: because of the geopolitical risk premium, and so it doesn't
Speaker 1: make sense for us to start upping up and it
Speaker 1: takes months for it to get on the market if
Speaker 1: prices are not going to stay elevated. But isn't the
Speaker 1: geopolitical risk premium going to be something that continues for months?
Speaker 1: I don't sustainable right exactly? See, and based on everyone
Speaker 1: we talked to, it doesn't look like if Russia were to,
Speaker 1: you know, suddenly pulled back from Ukraine. It's not like
Speaker 1: multinational energy companies would go back into that country or
Speaker 1: start buying oil to the same extent that they were
Speaker 1: buying it before. That is a really good point, and
Speaker 1: it wouldn't be to that extent. But right now, the
Speaker 1: geopolitical risk premium, it's a premium. It is not necessarily
Speaker 1: pricing exactly what's happening, and so that is the big issue.
Speaker 1: But I completely agree, it's not like we're going to
Speaker 1: go back to the before times, but there is going
Speaker 1: to be this easy Can you just explain something real quickly.
Speaker 1: We've only got about forty twos. I mean there's different
Speaker 1: types of crewed, right, So the strategic SPR is that
Speaker 1: is the oil the crew that we use at the pump, no,
Speaker 1: And so that's the thing it's going to. We also
Speaker 1: need high refined new markets. We need refiners to be
Speaker 1: able to turn that into gasoline because they're not just
Speaker 1: giving out gassling. They're giving out crude and they're giving
Speaker 1: out sour crewd, which is well, we're not sure yet,
Speaker 1: but the first time, the first SPR when it was released,
Speaker 1: it was sour, which producers didn't want to buy because
Speaker 1: that's not the good type crew. They wanted sweet crude.
Speaker 1: So we need to see what type of crew they're
Speaker 1: gonna give us. You know, it's like when we were
Speaker 1: making a vaccine, like we were learning about so much.
Speaker 1: I think about how many times how long we've been
Speaker 1: covering these markets, right, But it's something like a crisis
Speaker 1: that you really understand the intricacies of a market for
Speaker 1: light sweet crewed or do you prefer sour crewed. I'm
Speaker 1: kind of a sour crude, can't you tell? All Right, Julia,
Speaker 1: thank you so much. Well appreciate Julia Fanzaris. She's oil
Speaker 1: markets reporter at Bloomberg News here and her Interactive broker
Speaker 1: studio wt I crewed right now down about six and
Speaker 1: a half percent, down over seven bucks on five cents
Speaker 1: a barrel. You're listening to Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio.
Speaker 1: Hey listen. We often tap the world of sports for
Speaker 1: clues of leadership, business trends, investment trends, which takes us
Speaker 1: to this week's Bloomberg Business Week domestic cover story. It's
Speaker 1: all about NBA superstar Chris Paul. The cover says it
Speaker 1: all Chris Paul wants to win it all. This story
Speaker 1: is by Aaron Cohen and Joel Weber. Arian is a
Speaker 1: writer at Bloomberg Business which she joins us down the
Speaker 1: phone from Portland, Oregon. Joel Webber is editor at Bloomberg
Speaker 1: Business Week. He's with us in the Bloomberg Interactive Broker Studio. Joel,
Speaker 1: I want to start with the cover though, because I
Speaker 1: love this cover. This is the domestic cover story. Once again,
Speaker 1: it will be uh. It is available now on newsstands,
Speaker 1: on the Bloomberg and at Bloomberg dot com, Slash Business week, Um,
Speaker 1: how do we get to hear so? Chris Paul is
Speaker 1: someone that we've um watched on TV playing basketball for years.
Speaker 1: He has just an amazing on the court presence right
Speaker 1: now Phoenix Suns, where he's the point guard UM our
Speaker 1: top seed heading into the NBA playoffs. Uh. He has
Speaker 1: also done something that's pretty remarkable off the court, which
Speaker 1: is build this little bursioning Uh it's not even a little,
Speaker 1: it's huge, actually versioning business empire. And that was sort
Speaker 1: of what we were interested in it because you know,
Speaker 1: increasingly we've seen athletes be able to do this where
Speaker 1: they can sort of create an off the court empire,
Speaker 1: no longer waiting for retirement to do it. And Chris
Speaker 1: is sort of the embodiment of that. And he's got
Speaker 1: some pretty interesting mentors. Um. When in particular, uh, Arian,
Speaker 1: what did you learn about his approach to business when
Speaker 1: you got to talk to him? Yeah, Chris po is
Speaker 1: a really interesting guy. I really enjoyed getting to hang
Speaker 1: out with him a little bit. Unlike most of the
Speaker 1: retired athletes portfolios, when you kind of look at what
Speaker 1: they own, usually it's like restaurants and you know, some
Speaker 1: chain store somewhere. Um, you don't really get much of
Speaker 1: a sense of them and their interests. But um, with Chris,
Speaker 1: you really get a direct sense of what's in his refrigerator,
Speaker 1: what he's wearing on his wrist, what he's watching on TV,
Speaker 1: from his investments on. One of the first questions he
Speaker 1: asked when he's considering an investment is how does this
Speaker 1: company impact my life day to day? Which is not
Speaker 1: the question that most of sirts are asking. Uh. And
Speaker 1: so he just has fingers and everything. He has a
Speaker 1: large portfolio implant based foods, um, he has his own
Speaker 1: media company. He has some family and child oriented uh
Speaker 1: app that he owns parts of, and even like medication products.
Speaker 1: But he's just all over the place in it always
Speaker 1: directly connected a personal atists. Well, let's go, Joel. I
Speaker 1: want to go right to this mentor here, because you
Speaker 1: mentioned he's got a mentor and somebody who you got
Speaker 1: to speak to um our audience very familiar with him,
Speaker 1: Bob Iger. How did this relationship come about, Joel? So,
Speaker 1: Chris got treated to the l A clippers and number
Speaker 1: of years ago, and and I think it sort of
Speaker 1: coincided with a moment where he was also really interested
Speaker 1: in kind of taking his business game to the next level,
Speaker 1: and like, you do you just text the CEO, right, um,
Speaker 1: which was amazing insight about Chris. He basically learned like,
Speaker 1: if you text CEOs, um, nobody else is texting him.
Speaker 1: They text you, right except for annoying with Hilari exactly.
Speaker 1: So he reached out to Bob Iger and uh, Bob Iger,
Speaker 1: and he sort of kicked off a relationship that was started.
Speaker 1: You know. Basically, Chris was like, hey, I need a mentor,
Speaker 1: and Bob was like, yeah, I've heard I kind of
Speaker 1: heard that before. Um, and you're You're not the first
Speaker 1: person who's asked this, so I don't know if it
Speaker 1: was a brush off or not, but basically, uh, it's stuck.
Speaker 1: And Bob, who who I interviewed, has been genuinely impressed
Speaker 1: with with Chris's business acumen um, and what started as
Speaker 1: sort of a mentor relationship has actually just become a
Speaker 1: really close friendship and the two of them talk multiple
Speaker 1: times a day. Uh. Bob watches a lot of the
Speaker 1: basketball games. His sons are big fans, so it's it's
Speaker 1: pretty pretty cool. I did ask Bob if he had
Speaker 1: a Chris Paul Jersey and he said not, but his
Speaker 1: kids do what Yeah? Yeah, maybe would be a good
Speaker 1: gift together, A mentor would be I'm sure you know,
Speaker 1: if Chris wins the championship this year, you know, I'm
Speaker 1: sure Bob will will will you know, maybe I'll y
Speaker 1: for that. I know we talked about this story earlier,
Speaker 1: but I still what sticks with me from this column
Speaker 1: is but uh Iger said about we talked about jettisoning
Speaker 1: anything else discretionary from your life except for work and family,
Speaker 1: because there just isn't room for anything else. When either
Speaker 1: of these guys, whether it's Bob or um, you know,
Speaker 1: Chris Paul, this is going to have this kind of job. Hey, Arian,
Speaker 1: let me just come back to you, because there are
Speaker 1: a lot of athletes who get into investments, right successful ones.
Speaker 1: Uh Lebron has been, you know, on the cover of
Speaker 1: Business Week as well. What is it that stood out
Speaker 1: for you with Chris Paul? He is so personally involved
Speaker 1: in all of this, and his family is very personally
Speaker 1: involved in all of this. His brother c J. Handles
Speaker 1: a lot of his business ventures, and he's really hands
Speaker 1: picking what he does, which is very different from the
Speaker 1: model that other people have used, where they really sort
Speaker 1: of assemble a team to make good business decisions. Chris,
Speaker 1: I mean he spent ten years, you know, studying everything
Speaker 1: Bob Iger does so that he can really understand it
Speaker 1: and make his own decisions and kind of build his
Speaker 1: own empire. So arian a question that we talked about
Speaker 1: earlier in the day because we do feature in part
Speaker 1: of our editor's roundtable in our Bloomberg Business Week weekend show,
Speaker 1: which will be available starting on Saturday morning. Um, I
Speaker 1: wanted to talk a little bit about the actual investments
Speaker 1: that he's made because it's it's a really interesting group.
Speaker 1: You mentioned some of the plant based companies beyond meat,
Speaker 1: he was an investor in that, uh In, then the
Speaker 1: media company. But what is the common thread that runs
Speaker 1: through these companies? Yeah, you know, on the court, he
Speaker 1: has this amazing vision where he can see up close
Speaker 1: a play or a player and at the same time
Speaker 1: kind of zoom wide and see the whole court. And
Speaker 1: he does the same thing in his investing. He really
Speaker 1: invests end to end. So for example, in his plant
Speaker 1: based food portfolio, he's got a farm investment called Bowery Farms.
Speaker 1: He has a seaweed protein investment called Omarrow Foods, right
Speaker 1: at the beginning of the supply chain. Then you'll find
Speaker 1: him in supermarkets he's heavily invested in Beyond Meat and Coya,
Speaker 1: which is a protein during company. And then you see
Speaker 1: him at the end at the kind of delivery side
Speaker 1: of things, where he's invested in Roots Food Group, which
Speaker 1: they do at prepared meals, and another one called Go Cups,
Speaker 1: which is grocery delivery. Because his his angle um and
Speaker 1: his way of sort of encompassing the whole chain um
Speaker 1: is really quite a strong and notable strategy. Well, it's
Speaker 1: a great story. It's the domestic cover story of this
Speaker 1: week's edition at Bloomberg Business Week magazine, available now on
Speaker 1: news stands, on the Bloomberg and at Bloomberg dot com
Speaker 1: Slash business Week. A big thank you to Joe Webber,
Speaker 1: editor at Bloomberg Business Week, and Aaron Cohen, writer for
Speaker 1: Bloomberg Business Week, who joined us on the phone from Portland, Oregon.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. Yes, President Joe Biden,
Speaker 1: he had his second booster shot that was yesterday. He
Speaker 1: said it didn't hurt you know, every time I got one,
Speaker 1: I'm like, have you done it yet? Because I look
Speaker 1: away because I'm a chicken. So then they're like, everyone
Speaker 1: knows to look away when you're getting a shot. Are awful?
Speaker 1: All right? Well, we do know the C A C
Speaker 1: d C has recommended a fourth fiser and Madernak COVID
Speaker 1: vaccine for those fifty and older. And we've also seen
Speaker 1: some data about rises in COVID cas, especially among a
Speaker 1: younger population, particularly here in New York, even concentrated in Manhattan.
Speaker 1: Dr Chris Byra is director of the Center for Public
Speaker 1: Health and Human Rights at the Johns Hopkins Bloomberg School
Speaker 1: of Public Health. The Johns Hopkins Bloomberg School of Public
Speaker 1: Health is supported by Michael or Bloomberg, founder of Bloomberg
Speaker 1: GELPI and Bloomberg Philanthropies. Dr Biro, it's good to chat
Speaker 1: with you again. You know, it's so interesting because a
Speaker 1: lot of what I see on social media right now
Speaker 1: when it comes to the pandemic is people, uh, my
Speaker 1: friends uh and acquaintances testing positive once again. And it
Speaker 1: sort of feels like, you know, at least from a
Speaker 1: numbers perspective, we're kind of at that pre amicron place
Speaker 1: are that we were at, you know, back in December,
Speaker 1: and I'm wondering how we avoid another omicron surge in
Speaker 1: just a few weeks. We've been in a lull um
Speaker 1: and of course we had that severe o macron surge
Speaker 1: which then rapidly declined. That's what happens, and we've seen
Speaker 1: that many countries with a macron. But what's circulating now
Speaker 1: is the sub variant, the B a two sub variant
Speaker 1: of a macron, which, like the parent a macron, is
Speaker 1: a very infectious virus. It does seem to bypass immunity.
Speaker 1: There are more breakthrough infections with people who have been vaccinated. Uh,
Speaker 1: And of course the numbers are starting to creep up
Speaker 1: a bit. So we are worried about that. New York
Speaker 1: has been in the vanguard of a number of surges
Speaker 1: in the past. That's one way to describe it, the
Speaker 1: vanguard exactly. Story. But it's an international travel hub, of course,
Speaker 1: and it's connected to Europe. So we keep calling it
Speaker 1: a global pandemic that we're in because we're not out
Speaker 1: of it. We're not on the other side of it.
Speaker 1: And that's why, like if we ever say, oh, the
Speaker 1: end of the you know, we're on the other side
Speaker 1: of it. Everybody's like, where do you live? Because we're
Speaker 1: still in it. How do you see the rest of
Speaker 1: the year playing at Is there a point where we
Speaker 1: look back at you know, by the end of the
Speaker 1: year that we're saying, okay, it's endemic. You know, we're
Speaker 1: going to have some kind of universal vaccine. Okay, help
Speaker 1: me here. Yeah, well there are there are some encouraging
Speaker 1: things to say. And first of all, to say that
Speaker 1: for people who are boosted, and of course it's good
Speaker 1: news about the approval of the second boost or the
Speaker 1: fourth dose for people over age fifty um amicron itself
Speaker 1: had quite low rates of hospitalization and serious disease, and
Speaker 1: that's the same with the b A two um uh.
Speaker 1: It is really a problem. And for example, in Hong Kong,
Speaker 1: where we're seeing high death rates where you have elderly
Speaker 1: unvaccinated people, they were very slow to get the elderly
Speaker 1: population fully vaccinated there. Well, we're not expecting to see
Speaker 1: as much of that um same situation. However, boosting has
Speaker 1: been slow. People have not ramped up getting even that
Speaker 1: first booster dose, so we're only at about under a
Speaker 1: third of eligible adults being boosted. So the message, I
Speaker 1: think really is get boosted now. We need to blunt
Speaker 1: what is what is to come. The other reality is
Speaker 1: that what we've seen in a number of populations is
Speaker 1: that the natural immunity to previous uh COVID nineteen infections wane,
Speaker 1: and the model is will tell you that the waning
Speaker 1: of many people in the US who are not vaccinated
Speaker 1: but who've had COVID is going to really be around June.
Speaker 1: So the time to get boosted is now, before June
Speaker 1: and before what looks like the potential for another surge
Speaker 1: probably of infections much less hospitalization. Dr help our our
Speaker 1: listeners out. I got a text message from my mother
Speaker 1: in law yesterday asking if she should get boosted. She's
Speaker 1: over sixty five. Uh And I actually got the same
Speaker 1: asked then asked my parents if they were doing it.
Speaker 1: They're over sixty five. My mom text me back, she says,
Speaker 1: Dad wants to I'm on the fence about it. What's
Speaker 1: the guidance doesn't seem to totally clear here. It was
Speaker 1: very clear with the first booster, but with the second
Speaker 1: booster is not totally clear. Well. Uh so the CDC
Speaker 1: guidance um is that it's it's really and and this,
Speaker 1: by the way, is based on the data from Israel.
Speaker 1: Most of this decision has been driven by reports from
Speaker 1: Israel about how fourth boosters were reducing hospitalizations and serious
Speaker 1: disease in older people and people with chronic conditions. So
Speaker 1: really the window is five to six months. If you
Speaker 1: are more than five months out from dose three, UH,
Speaker 1: it is time to consider a booster. H. If you
Speaker 1: are fifty and older, and particularly if you have any
Speaker 1: of the chronic or underlying conditions that are associated with
Speaker 1: poor outcomes from COVID, that time is now um and UH.
Speaker 1: And it's particularly important of course for people who have
Speaker 1: somebody I you know, compromised in the home, also people
Speaker 1: living with kids under five, because as we know, they're
Speaker 1: not eligible yet. Well, listen, we really appreciate your thoughts
Speaker 1: on all of this, because this is certainly top of
Speaker 1: mind amid everything else that's going on in the world.
Speaker 1: We're trying to stay on top of this, certainly for
Speaker 1: our listeners and viewers. Dr Chris Buyer. He is director
Speaker 1: of the Center for Public Health and Human Rights at
Speaker 1: Johns Hopkins Bloomberg School of Public Health. Of course, supported
Speaker 1: by Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies.
Speaker 1: He joined us on the phone from Baltimore. One thing
Speaker 1: that's five months out, he said, for the booster, after
Speaker 1: the after the third shot, and I think you know
Speaker 1: it all comes it's it's all happening at a time
Speaker 1: when we're seeing, you know, increasing numbers of people not
Speaker 1: wearing masks indoors, and in fact New York City telling
Speaker 1: young people to wear masks indoors despite the fact that
Speaker 1: the levels here are still remained long we've been masks off,
Speaker 1: and I've had colleagues given coming to me like I think,
Speaker 1: can I throw my mask back on? And I've been
Speaker 1: kind of wearing masks all right. You're listening to Bloomberg
Speaker 1: Business Week right here on Bloomberg Radio. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. So among our most read
Speaker 1: stories on the Bloomberg throughout the day has been on
Speaker 1: Amazon renewing it's co branded credit card deal with JPMorgan
Speaker 1: and Visa. Tim bottom line, it is about bottom line.
Speaker 1: It's a big business for the big banks that compete
Speaker 1: for this. It is, well, Jenny, I want to get
Speaker 1: your opinion because you a lot of times when you
Speaker 1: write stories, they are among the most read on the terminal.
Speaker 1: Oh sorry, yeah, I'm so sorry. She's like in our
Speaker 1: studio and we've been talking to hers, so I just
Speaker 1: like think everybody's with us. Jenny Seraine, finance reporter for
Speaker 1: Bloomberg News. She's with us in the Bloomberg Interactive Broker studio. Jenny,
Speaker 1: forgive me when you do when when you do a
Speaker 1: lot of your stories do end up at the top
Speaker 1: of the most read and it's one of the reasons
Speaker 1: we love to have you come on the program. But
Speaker 1: is it the fact that this is a big part
Speaker 1: of the company's business or is it a part that
Speaker 1: you know, our our our customers love to read about
Speaker 1: credit cards. I think it's a little bit of both.
Speaker 1: This is one of the most popular credit cards in
Speaker 1: the country in general, so lots of users of the
Speaker 1: Amazon Chase card. Um, but I don't realized it was
Speaker 1: one of the most popular. Are you kidding? Yeah? Five
Speaker 1: cash back on all Amazon purchases, right, really? Okay, Jenny's nodding, Okay,
Speaker 1: bigger ones, Yeah, and then I think it's also the
Speaker 1: fact that you know, last year there were a lot
Speaker 1: of headlines that Amazon was looking to possibly move this
Speaker 1: away from Chase, away from Visa. So for a lot
Speaker 1: of the investors in those companies or employees in those companies,
Speaker 1: it's probably welcome news that Amazon decided to stick with
Speaker 1: its long, long time partners. How much this bank make
Speaker 1: How like do banks make off of this? I mean
Speaker 1: every transaction they get a little snippet right every Yes,
Speaker 1: So that's that's definitely true. I think with this it's like, um,
Speaker 1: a really good way to get lots of customers who
Speaker 1: feel very loyal to these cards because they're usually very
Speaker 1: loyal to the retailers that are attached to them. So
Speaker 1: what about for the banks? Yeah, so I think it
Speaker 1: swings both ways. So the banks they usually do a
Speaker 1: revenue sharing agreement. Um, they also do a lot sharing agreement.
Speaker 1: UM so you know, hopefully consumers can pick up with
Speaker 1: their bills. But um, but yeah, so these are very
Speaker 1: lucrative portfolios for both the banks and the the merchants
Speaker 1: that they partner with on these. And so that's why
Speaker 1: you see there's so much interest in both Amazon's the Deltas,
Speaker 1: the Americans, the Uniteds of the world. UM, these big,
Speaker 1: big card portfolios, they're they're very lucrative. But there was
Speaker 1: some drama in the past few months about this, and
Speaker 1: that's why I think it's also a surprise to many
Speaker 1: people because Amazon in Singapore and Australia last year started
Speaker 1: posing small search charges on Visa transactions you right, and
Speaker 1: at one point announced its intention to ban UK issued
Speaker 1: Visa credit cards. So it's said it was Amazon was
Speaker 1: not happy about its relationship with Visa at a certain
Speaker 1: point and is now renewing it. Yes, so they did
Speaker 1: get into a little spat um for most of last
Speaker 1: for the last few months of last year and starting
Speaker 1: off this year. UM, they have reached a global agreement
Speaker 1: and so I think a lot of folks assumed that
Speaker 1: the credit card would be part of that. But today
Speaker 1: really put that to rest and kind of confirmed that. No,
Speaker 1: they seemed to be on good footing again and they've
Speaker 1: renewed and they're gonna be partners for many, many years
Speaker 1: to come. UM. So I think it definitely was welcome
Speaker 1: news for Visa investors and UM and kind of put
Speaker 1: that that we're eat to rest for a lot of folks. Yeah,
Speaker 1: it is interesting, Like, I mean, is there something to
Speaker 1: Amazon staying with the same banks in terms of I
Speaker 1: don't know. I don't know does it matter if they
Speaker 1: move it around to customers really care or what? Oh?
Speaker 1: I mean for sure we've seen I think the last
Speaker 1: really big portfolio move we saw was when Costco moved
Speaker 1: from m X to City Group, and um, there was
Speaker 1: a big spat. I remember that there was. It was
Speaker 1: a very big sat Yes, And sometimes these get really
Speaker 1: um yeah, really angry, and customers like what they like
Speaker 1: and they're very used. They don't like change. And so
Speaker 1: I think whenever a retailer is thinking about this, that's
Speaker 1: in the back of their minds, Like if I move
Speaker 1: from Chase and suddenly have to reissue a whole portfolio
Speaker 1: of cards, am I gonna lose customers? Am I gonna
Speaker 1: upset people? So I think that's always um in the
Speaker 1: favor of the existing partner. Um, you know, you always
Speaker 1: have that in your corner. But um, this is at
Speaker 1: the end of the day, is all about deals and economics,
Speaker 1: and so that that's always a huge part of these negotiations.
Speaker 1: One part I think that's really notable about this card
Speaker 1: is that it's really simple in terms of benefits. You
Speaker 1: know a lot of the cards that you write about
Speaker 1: are the really high end cards, the Chase Sapphire Preferred
Speaker 1: in reserves and the amex platinums, and you know you
Speaker 1: really have to kind of study the benefits. They're like,
Speaker 1: activate them online and this quarter, it's this, this quarter,
Speaker 1: it's that. It's it kind of is ever changing. Amazon
Speaker 1: Amazons is just simple. Yeah, I mean, if you're a
Speaker 1: big Amazon spender, this is the best card to have,
Speaker 1: is I think what they want, and so that's why
Speaker 1: they they design it that way. They want their big
Speaker 1: spenders to feel rewarded and feel loyal and and that's
Speaker 1: what these cards do. Do people mostly use it for
Speaker 1: Amazon purchases or whole foods or do they also use
Speaker 1: it for everything? Do you see diapers the Amazon more
Speaker 1: so than whole foods, but with online delivery for whole
Speaker 1: foods as well. Yeah, and this card so Amazon has
Speaker 1: actually a lot of credit cards, so this is just
Speaker 1: one of many that they offer, and this one is
Speaker 1: designed to also be rewarding on purchases outside of the
Speaker 1: Amazon ecosphere, So they also give you extra points on
Speaker 1: restaurants and um, I think there was grocery stores and
Speaker 1: there's so I think it's meant to be for more
Speaker 1: than just Amazon. UM. They have other cards that are
Speaker 1: really specifically for Amazon UM. But it's definitely lucrative for Amazon.
Speaker 1: Five points per dollar spent on purchases at the Amazon
Speaker 1: side our whole foods market stores. That's a lot. We're
Speaker 1: spending a lot on Amazon, like we are. All right,
Speaker 1: Jenny Seraine, thank you so much for coming in and
Speaker 1: telling us more about this story. Jenny is financial reporter
Speaker 1: at Bloomberg News. Check her out at Jenny Seraine on Twitter.
Speaker 1: I'm yeah, but you let me drive. No, no, no no home, honey, please,
Speaker 1: I'll do the bride gravels. I want to drive. Good question.
Speaker 1: This is the drive to the Globe on Bloomberg Radio.
Speaker 1: All right, just got about ten minutes left in today's
Speaker 1: trading session, folks. We are at our loads of the day.
Speaker 1: We're seeing some selling into the closest. We get ready
Speaker 1: to wrap up that first quarter. Tim, I'm eager to
Speaker 1: hear what our next guest has to think about this
Speaker 1: quarter and the remainder of the year. Jimmy Lee is
Speaker 1: founder and a chief executive officer of the Wealth consulting Group.
Speaker 1: He joins us on the phone from Las Vegas. Jimmy,
Speaker 1: how are you great? Thanks for having me on again. Yeah,
Speaker 1: it's good to have you back with us. And I'm
Speaker 1: looking over the notes that you sent our producer Paul Brennan,
Speaker 1: and it's it's really interesting to me to find that
Speaker 1: you actually think, uh, you're sticking to your outlook that
Speaker 1: you had prior to the war in Ukraine and not
Speaker 1: making any changes to it as a result of that
Speaker 1: when we're seeing so many changes when it comes to
Speaker 1: commodities and commodities having it their best quarter in years
Speaker 1: and that leading to a spike in inflation. So why
Speaker 1: is that? Well, the ward certainly has changed my thinking
Speaker 1: on the climbing and how often and how severe that said,
Speaker 1: my rate raise rate, But it's still I believe that
Speaker 1: there's uh potential optimism for inflation not being it is
Speaker 1: ugly towards the end of the year, even with the war.
Speaker 1: Now what Kuryan sorts of is and how this war
Speaker 1: concludes and what the effects of it will be in
Speaker 1: the long run, but in the short term, certainly, all
Speaker 1: prices if you need to get you know, volatile and
Speaker 1: UH with the news of the losing cstrate reserves. That's
Speaker 1: helping a little bit. But until the war is over,
Speaker 1: I don't think that the volatility and oil and gas
Speaker 1: is uh going to be over. So I think that's
Speaker 1: one commodity that's going to continue to see a lot
Speaker 1: of volatility, and also other commodities um potentially will continue
Speaker 1: to maybe go up in price until we get the
Speaker 1: supply situation and inflation better. But I think that's going
Speaker 1: to be something down the road that we can go
Speaker 1: forward to. Do you think about when you're having conversations
Speaker 1: about kind of longer term where equities go globally, is
Speaker 1: this kind of a point in time where there are
Speaker 1: some really dynamic, make longer term trends create being created.
Speaker 1: Whether it's with energy and whether it's that shift to
Speaker 1: all energy, you know, whether it's global supply chains, maybe
Speaker 1: there's more domestic production being done. I mean, I just wonder,
Speaker 1: will we look back at some point at this time
Speaker 1: and say, Wow, there are a lot of major shifts
Speaker 1: that were going on globally economically market wise that ultimately
Speaker 1: will be reflected in global share prices. I absolutely believe
Speaker 1: that to be true. And I think that you know,
Speaker 1: not just from the war in Ukraine, but also from
Speaker 1: the pandemic and as as many consumers and people realize
Speaker 1: that a lot of the pharmaceutic the drug that we
Speaker 1: produced company to produce UM depend on ingredients or nations
Speaker 1: that you can't necessarily always count on UM. I think,
Speaker 1: you know a lot of different commodities in different ways
Speaker 1: that we've made products that we consume here in the
Speaker 1: United States. I think, uh, you know, industry reason will change.
Speaker 1: And the automobile industry, for example, that's been reliant on
Speaker 1: semi conductors and chips and all those different types of
Speaker 1: model that they rely on too, you know, produce a
Speaker 1: vehicle they can take off a lot UM. I think
Speaker 1: a lot of those UM industries are going to change
Speaker 1: in the supplight on how they look at the supply
Speaker 1: chain and as tumors, we may end up with higher
Speaker 1: prices at the end of the days over that, but
Speaker 1: I do believe that you're going to see a trend
Speaker 1: and I don't think that's going to stop. Actually, well,
Speaker 1: higher prices for how long. Jimmy, Well, you know, globalism
Speaker 1: has had a lot of advantages and over the years,
Speaker 1: I thinks really that the US has been a benefactor
Speaker 1: of that. The consumer has been a benefactor of that.
Speaker 1: But I think there's a negative to that, as we're
Speaker 1: seeing now when we have destructions um in the global
Speaker 1: contunlector's had over the last but two years with the
Speaker 1: pandemic and now it's war in Russia. But I'm sorry
Speaker 1: in Ukraine and Russia and what's going on duo plitically
Speaker 1: and the ramifications of that on a global basis for economics,
Speaker 1: for the world of economics. Right, So I think, um,
Speaker 1: you know, it's it's a longer term spend. So I
Speaker 1: don't think we're gonna see if anything immediate because as
Speaker 1: you know, UH factories and manufactually take years to be evolved,
Speaker 1: and so I think it's going to be something that's
Speaker 1: more a longer term trend um. In the short term,
Speaker 1: I think it's gonna be continued. We're going to continue
Speaker 1: to see what we have in the past, and I'm
Speaker 1: just helping that the supply situation gets better. Prior to
Speaker 1: the UH invasion into your train, the shipping prices that
Speaker 1: we track we're coming down substantially, the commodities we're coming down,
Speaker 1: and so there were some some optimism there and I
Speaker 1: still think that the equities was a great place to be,
Speaker 1: I'd be very cautious as a bond investor. Bond investors
Speaker 1: have been very um you know, in been pits this
Speaker 1: year so far more than they they thought that they
Speaker 1: could get hit in from the bottle of their own
Speaker 1: but from equities. From an equity standpoint, really have to
Speaker 1: focus when you get kind the war on the FED
Speaker 1: and in past hiking cycles since like thank me do,
Speaker 1: in every cycle, stocks were get investment to own, and
Speaker 1: actually growth performed values even though we're overlated, and some
Speaker 1: of the econmy opening value sectors right, Broth performed very well.
Speaker 1: So I think that actually investors we'll get back into
Speaker 1: the growth names, but maybe not the names that they
Speaker 1: rallied into during the pandemic that that movie saw high
Speaker 1: evaluations and and really investors have devastated some of those stocks. Hey,
Speaker 1: I just want to let our audience know that we're
Speaker 1: seeing some selling into the clothes here. So we've definitely
Speaker 1: picked up some downward momentum here. We're now at our
Speaker 1: lows on the S and P, the Dow, and the
Speaker 1: Nazic down about one on all of those major averages. Actually,
Speaker 1: the NASAIC down about one in a quarter percent. But nonetheless,
Speaker 1: whether that has to do with some end of the
Speaker 1: quarter adjusting perhaps, but we are definitely seeing um some selling.
Speaker 1: Hey Jimmy, UM just got about forty seconds left here.
Speaker 1: So if you had to put new money to work,
Speaker 1: would Big Tech Mega Tech, which has had quite a
Speaker 1: bounce back, would that be on your buying list? It is,
Speaker 1: I think, very selectively. So I think this year is
Speaker 1: an year where we're active investors for foil managers can shine,
Speaker 1: and so I think just going into exactly is not
Speaker 1: good enough, and selectively buying companies that have good earnings
Speaker 1: and quality growth is where the money is going to
Speaker 1: be going towards. And I'll say that I think with
Speaker 1: now the kind of Hockey sentiments that you've heard from
Speaker 1: Sherman Powell, he's given himself some room on both sides
Speaker 1: either to when when maybe the does freeze rates you know,
Speaker 1: if they do fifty most likely, and then but also
Speaker 1: then the back off later on, depending on what the
Speaker 1: economic gut is. So I would be a buyer on these.
Speaker 1: I know it's kind of cliche and saying this for
Speaker 1: a long time, but take advantage of it. Yes, all right,
Speaker 1: good to leave it there. Hey Jimmy, thank you so much.
Speaker 1: Jimmy Lee. He's founder in chief executive officer at the
Speaker 1: Wealth Consulting Group. Joining us. They've got about four point
Speaker 1: four billion of client assets. Joining us on the phone
Speaker 1: from Las Vegas. Thanks for listening to Bloomberg Business Week.
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