1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Panel podcast. I'm Paul swing you 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor, find a Bloomberg penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,200 Speaker 1: at Bloomberg dot com. We're getting some earnings. It's been 8 00:00:22,239 --> 00:00:24,880 Speaker 1: a great year for pretty much everything because we have 9 00:00:24,920 --> 00:00:28,800 Speaker 1: experienced the everything rally that if you were entirely expecting. 10 00:00:29,160 --> 00:00:31,479 Speaker 1: Joining us on to talk about how to position heading 11 00:00:31,480 --> 00:00:33,800 Speaker 1: into your end is Greg han. He is chief investment 12 00:00:33,840 --> 00:00:36,920 Speaker 1: officer for Winthrop Capital Management, joining us here in our 13 00:00:36,960 --> 00:00:40,040 Speaker 1: Bloomberg Interactive Broker studios. So, Greg, what are you doing 14 00:00:40,159 --> 00:00:42,839 Speaker 1: cashing in, sitting on your hands and waiting for the 15 00:00:42,920 --> 00:00:46,279 Speaker 1: year to pass. No, I wouldn't say we're cashing in, 16 00:00:46,280 --> 00:00:48,720 Speaker 1: but we are moving to risk out of portfolios, both 17 00:00:48,760 --> 00:00:51,320 Speaker 1: on the fixed income side and the equity side. This 18 00:00:51,400 --> 00:00:55,320 Speaker 1: is something we started probably midway through the last quarter 19 00:00:55,640 --> 00:00:57,720 Speaker 1: and we're trying to get it done before mid November. 20 00:00:58,080 --> 00:01:01,320 Speaker 1: So what is your view for as we know pair 21 00:01:01,440 --> 00:01:03,319 Speaker 1: through these earnings here and we start to look out, 22 00:01:05,440 --> 00:01:07,399 Speaker 1: do you think the FED will be continued to be 23 00:01:07,440 --> 00:01:09,720 Speaker 1: supportive and you might go a little bit more risk 24 00:01:09,760 --> 00:01:13,080 Speaker 1: on as you head into next year. Um, so this 25 00:01:13,240 --> 00:01:15,440 Speaker 1: is a change for us heading into this quarter. What 26 00:01:15,520 --> 00:01:18,000 Speaker 1: we're looking at, we would have been saying, yes, we're 27 00:01:18,000 --> 00:01:20,600 Speaker 1: going to continue to de risk. We're seeing enough momentum 28 00:01:20,600 --> 00:01:24,280 Speaker 1: in Brexit and US China trade issues that could be 29 00:01:24,880 --> 00:01:28,440 Speaker 1: a catalyst for fixed investment and consumption from a global standpoint, 30 00:01:28,760 --> 00:01:32,840 Speaker 1: those barriers get reduced. I don't know that they'll be removed, 31 00:01:32,880 --> 00:01:36,240 Speaker 1: but reduced. We could actually see this economic recovery go 32 00:01:36,720 --> 00:01:39,240 Speaker 1: into the next two quarters in two thousand twenty. So 33 00:01:39,280 --> 00:01:42,960 Speaker 1: which assets in particular look like a bye that wouldn't 34 00:01:43,000 --> 00:01:46,479 Speaker 1: have otherwise looked like a bye? If Brexit is resolved 35 00:01:46,600 --> 00:01:48,920 Speaker 1: and there is some sense of some sort of trade 36 00:01:48,920 --> 00:01:52,080 Speaker 1: truce between the US and China. Large cap equity has 37 00:01:52,120 --> 00:01:54,040 Speaker 1: had a great run, so the S and ps up 38 00:01:54,040 --> 00:01:56,760 Speaker 1: over but when you look at mid cap and small cap, 39 00:01:57,120 --> 00:01:59,960 Speaker 1: small caps legged. So that's one area, and with private 40 00:02:00,080 --> 00:02:02,760 Speaker 1: credit expansion, we'd expect small cap to do well. The 41 00:02:02,800 --> 00:02:06,240 Speaker 1: other areas the international space, developed countries have lagged. We 42 00:02:06,360 --> 00:02:08,880 Speaker 1: have not been a big mean reversion kind of firm. 43 00:02:09,280 --> 00:02:12,040 Speaker 1: We're looking for capital flows to help support that, and 44 00:02:12,080 --> 00:02:15,200 Speaker 1: so we'll probably increase our allocation to international next year. 45 00:02:15,360 --> 00:02:17,960 Speaker 1: And does that include emerging markets? It does, Yeah, as 46 00:02:17,960 --> 00:02:21,120 Speaker 1: long as capital is flowing. And that was historically the 47 00:02:21,160 --> 00:02:25,200 Speaker 1: European banks were big lenders into the the emerging economies. Um, 48 00:02:25,280 --> 00:02:27,000 Speaker 1: but it's right now, it's still It looks like a 49 00:02:27,000 --> 00:02:28,679 Speaker 1: train wreck when you look backwards, but you have to 50 00:02:28,720 --> 00:02:31,480 Speaker 1: look forwards and look for the opportunity. So right now, 51 00:02:31,520 --> 00:02:34,680 Speaker 1: what's your sort of breakdown in terms of the US 52 00:02:34,840 --> 00:02:39,959 Speaker 1: versus international exposure? We're um in our in our portfolios 53 00:02:40,040 --> 00:02:44,880 Speaker 1: were about fift internationals, so it would be developed, developed, 54 00:02:44,919 --> 00:02:49,680 Speaker 1: five percent emerging. So in your fixed income portfolio, you know, 55 00:02:49,720 --> 00:02:52,520 Speaker 1: I'm starting to think about credit quality a little bit 56 00:02:52,560 --> 00:02:54,720 Speaker 1: more as were you know, ten eleven years into this 57 00:02:54,760 --> 00:02:58,400 Speaker 1: economic cycle. It's got to end sometime. What are you 58 00:02:58,440 --> 00:03:01,400 Speaker 1: see in terms of the credit quality? So we have 59 00:03:01,560 --> 00:03:05,400 Speaker 1: been watching closely for a shift in credit and it's 60 00:03:05,400 --> 00:03:08,239 Speaker 1: a great question. We're focused in the leverage loan market. 61 00:03:08,320 --> 00:03:11,600 Speaker 1: That's where the biggest his you know, where the change 62 00:03:11,600 --> 00:03:14,800 Speaker 1: in covenants, that's the first sign of a deterioration. But 63 00:03:14,840 --> 00:03:17,320 Speaker 1: when you look at banks, the when you when you 64 00:03:17,360 --> 00:03:20,280 Speaker 1: look at the loan lost provisions, UM, they're the banks 65 00:03:20,280 --> 00:03:22,200 Speaker 1: are really really healthy right now. So we're not seeing 66 00:03:22,240 --> 00:03:25,160 Speaker 1: it in the credit side. Go back twenty five years 67 00:03:25,200 --> 00:03:28,560 Speaker 1: and two thirds of the investment grade market was rated 68 00:03:28,600 --> 00:03:32,680 Speaker 1: single and higher. Today two thirds of the corporate market 69 00:03:32,720 --> 00:03:35,440 Speaker 1: is rated triple B and lower. It's it's you know, 70 00:03:35,480 --> 00:03:38,440 Speaker 1: it's it's shifted and we have lower interest rates and 71 00:03:38,440 --> 00:03:41,160 Speaker 1: lower cost of capital for companies. It doesn't make sense 72 00:03:41,200 --> 00:03:43,840 Speaker 1: from great So so people have been raising this issue 73 00:03:43,840 --> 00:03:46,320 Speaker 1: for a while, and everyone's been looking for the cracks 74 00:03:46,360 --> 00:03:49,680 Speaker 1: in credit markets, and some people point to leverage loans 75 00:03:50,080 --> 00:03:52,440 Speaker 1: UH and even higher bond saying that there is a 76 00:03:52,560 --> 00:03:55,200 Speaker 1: slice of them, both markets that have fallowen out of 77 00:03:55,240 --> 00:03:59,120 Speaker 1: bed recently plunging in price. Is this a market event 78 00:03:59,680 --> 00:04:03,440 Speaker 1: or an economic event. That's a good question, Lisa Um. 79 00:04:03,600 --> 00:04:06,960 Speaker 1: From from the standpoint of capital flows, I would say 80 00:04:07,040 --> 00:04:11,160 Speaker 1: that this is this is a capital market event, UM. 81 00:04:11,200 --> 00:04:13,800 Speaker 1: And it's when you look at concentrations in certain sectors, 82 00:04:13,840 --> 00:04:16,200 Speaker 1: like the energy sector in the high yield space, that's 83 00:04:16,200 --> 00:04:19,960 Speaker 1: citiosyncratic I think in that area, UM. But the rest 84 00:04:20,040 --> 00:04:22,560 Speaker 1: of the market looks. I mean it's it's credit has 85 00:04:22,560 --> 00:04:25,000 Speaker 1: been really really healthy, consumers healthy, and we'll tell you 86 00:04:25,080 --> 00:04:29,599 Speaker 1: the manufacturing sector is healthy. So the FED meets next week, 87 00:04:29,960 --> 00:04:33,359 Speaker 1: UM on the what do you expect from the Fed? 88 00:04:33,440 --> 00:04:36,039 Speaker 1: And do you think the Fed will continue to be 89 00:04:36,720 --> 00:04:39,120 Speaker 1: dubbish and supportive of this economy? Yeah, Paul, I think 90 00:04:39,200 --> 00:04:42,400 Speaker 1: this is um. We we're expecting twenty five basis points 91 00:04:42,480 --> 00:04:45,200 Speaker 1: and then in December our base case has shifted out 92 00:04:45,200 --> 00:04:48,320 Speaker 1: to a hold with improvement. It's all contingent on what 93 00:04:48,360 --> 00:04:51,080 Speaker 1: we see how a Brexit and the US China trade issues. 94 00:04:52,080 --> 00:04:55,880 Speaker 1: So right now, what do you like the least to 95 00:04:55,960 --> 00:04:59,560 Speaker 1: own heading into your end? That's a great question. So 96 00:04:59,640 --> 00:05:02,680 Speaker 1: financi twill assets have been challenged probably the least. Right 97 00:05:02,680 --> 00:05:06,960 Speaker 1: now we are reducing significantly high yield. So we still 98 00:05:06,960 --> 00:05:08,920 Speaker 1: have a short sleeve in short duration high yield, but 99 00:05:08,960 --> 00:05:12,320 Speaker 1: hi yell pulling that that out, uh anything levered so 100 00:05:12,440 --> 00:05:15,160 Speaker 1: leverage loans, b dcs. We want to stay out of 101 00:05:15,200 --> 00:05:18,520 Speaker 1: the levered part of UM the markets, and we're really 102 00:05:18,600 --> 00:05:21,200 Speaker 1: running right up the middle UM dividend paint stocks we 103 00:05:21,240 --> 00:05:23,760 Speaker 1: still are invested in, So I was gonna shift gears 104 00:05:23,760 --> 00:05:26,159 Speaker 1: to stocks. So Again, one of the things we hear 105 00:05:26,320 --> 00:05:30,080 Speaker 1: a lot from folks that are managing money is need 106 00:05:30,120 --> 00:05:33,279 Speaker 1: to be defensive. But me talk defensive whether it's utilities 107 00:05:33,400 --> 00:05:37,560 Speaker 1: or reads or consumer staples. We also hear that those 108 00:05:37,560 --> 00:05:40,320 Speaker 1: sectors aren't cheap, and so you kind of run into 109 00:05:40,320 --> 00:05:42,920 Speaker 1: the risk because how do you manage that balance? Yeah, 110 00:05:42,920 --> 00:05:46,239 Speaker 1: that's that's that's another good point that both bull sectors, 111 00:05:46,240 --> 00:05:48,240 Speaker 1: reads and utilities have had a great run this year. 112 00:05:48,560 --> 00:05:51,279 Speaker 1: And really what it is now is named names specific 113 00:05:51,640 --> 00:05:53,640 Speaker 1: and if you're investing in e t F, you've gotta 114 00:05:53,640 --> 00:05:55,599 Speaker 1: be careful because a lot of E t F sleeves 115 00:05:55,600 --> 00:05:59,599 Speaker 1: have concentration issues in um single names like Microsoft in 116 00:05:59,600 --> 00:06:02,359 Speaker 1: the in the technology sleeve. So you kind of have 117 00:06:02,440 --> 00:06:04,200 Speaker 1: to do your homework to see what's in there. And 118 00:06:04,200 --> 00:06:07,120 Speaker 1: you've got to pick your stocks right. So let's say 119 00:06:07,760 --> 00:06:10,560 Speaker 1: you do everything right heading into your end, what kind 120 00:06:10,560 --> 00:06:13,200 Speaker 1: of returns are you expecting? So if we ended the 121 00:06:13,279 --> 00:06:15,920 Speaker 1: year today, which was I start to say that uh 122 00:06:15,960 --> 00:06:17,800 Speaker 1: the S and P WED it would be twenty it 123 00:06:17,839 --> 00:06:21,400 Speaker 1: would be return and bonds at eight percent in this 124 00:06:21,440 --> 00:06:23,880 Speaker 1: interest rate environment, to have an eight percent return in 125 00:06:23,960 --> 00:06:27,560 Speaker 1: fixed income is surreal, So then why not just cash 126 00:06:27,600 --> 00:06:30,120 Speaker 1: in well, we have to stay fully invested. Were so 127 00:06:30,240 --> 00:06:32,880 Speaker 1: much of what we do is either funding liabilities or 128 00:06:32,960 --> 00:06:35,599 Speaker 1: relative return, and we're not market timers, and we're not 129 00:06:35,640 --> 00:06:38,080 Speaker 1: good at that the timing thing. So we're about a 130 00:06:38,080 --> 00:06:41,080 Speaker 1: fifth of the way through earnings. Anything jump out at you. 131 00:06:41,160 --> 00:06:43,160 Speaker 1: Here's you kind of parsed through some of the early 132 00:06:43,200 --> 00:06:46,599 Speaker 1: country reporting. Yeah, the banks have done really well. Again, 133 00:06:46,640 --> 00:06:48,800 Speaker 1: I was surprised at how well the bank earnings have 134 00:06:48,880 --> 00:06:51,240 Speaker 1: come through, and and um, so that was that was 135 00:06:51,279 --> 00:06:53,799 Speaker 1: a pleasant surprise. We're we're gonna be looking at Microsoft 136 00:06:53,800 --> 00:06:57,600 Speaker 1: coming up and the Amazon comes up this week also, 137 00:06:57,640 --> 00:06:59,960 Speaker 1: so we're watching that. Sorry, are you long the banks 138 00:07:00,160 --> 00:07:03,800 Speaker 1: right here? How's your exposure? Yeah, we've we've we've shifted. Um, 139 00:07:03,920 --> 00:07:06,800 Speaker 1: we we swapped Bank America into City. We still own 140 00:07:06,920 --> 00:07:10,560 Speaker 1: JP Morgan and we're trying to get into the regional sleeve. Um, 141 00:07:10,560 --> 00:07:13,720 Speaker 1: we've been longholders of Wells Fargo and we're encouraged by 142 00:07:13,720 --> 00:07:16,360 Speaker 1: new management. So very good. Greig Han, thanks so much 143 00:07:16,400 --> 00:07:19,040 Speaker 1: for joining us. Craig Han as President, chief Investment Officer 144 00:07:19,320 --> 00:07:22,720 Speaker 1: Winthrop Capital Management based in Indianapolis, but joining us here 145 00:07:22,720 --> 00:07:26,800 Speaker 1: in our Bloomberg Broker's Interact. Their Brokers studio. Greig, thanks 146 00:07:26,840 --> 00:07:44,880 Speaker 1: so much for joining us. All Right, now let's shift 147 00:07:44,880 --> 00:07:48,120 Speaker 1: gears to UBS for getting earnings from a number of 148 00:07:48,160 --> 00:07:51,960 Speaker 1: banks UVS reporting it's investment bank lagging behind here with 149 00:07:52,000 --> 00:07:56,520 Speaker 1: all the details. Alison Williams, Bloomberg Intelligence Senior Financial Analyst. Alison, 150 00:07:57,040 --> 00:08:01,040 Speaker 1: what are sort of the highlights of the financial report here? So? 151 00:08:01,080 --> 00:08:04,520 Speaker 1: I think the number one highlight was the strong wealth flows, 152 00:08:04,600 --> 00:08:08,240 Speaker 1: especially in Asia. This is of strategic importance for you, 153 00:08:08,360 --> 00:08:11,600 Speaker 1: bas It's I think why a lot of investors own 154 00:08:11,640 --> 00:08:14,160 Speaker 1: the stock and we saw sort of a dip last quarter, 155 00:08:14,840 --> 00:08:18,520 Speaker 1: very strong flows there and invested assets at a record. 156 00:08:18,560 --> 00:08:21,480 Speaker 1: Obviously we have to watch what's happening with asset prices 157 00:08:21,520 --> 00:08:25,280 Speaker 1: going forward. The negative, um was the investment bank because 158 00:08:25,320 --> 00:08:30,000 Speaker 1: you pointed out and so profit coming in below expectations. Um, 159 00:08:30,040 --> 00:08:32,560 Speaker 1: you know a lot of companies have been beating the numbers. 160 00:08:32,640 --> 00:08:36,480 Speaker 1: However they're beating, they're beating beaten down expectations and unfixed 161 00:08:36,520 --> 00:08:39,080 Speaker 1: income treating which isn't a big as big of a 162 00:08:39,120 --> 00:08:42,600 Speaker 1: piece for UBS. But I think that the critical thing 163 00:08:42,640 --> 00:08:45,640 Speaker 1: that they talked about was they are they're reorganizing the bank. 164 00:08:45,679 --> 00:08:48,679 Speaker 1: This is something that Bloomberg News has reported on UM. 165 00:08:48,760 --> 00:08:51,520 Speaker 1: They didn't say specifics there, but they did say they're 166 00:08:51,520 --> 00:08:54,720 Speaker 1: going to take a one hundred million dollar restructuring charge 167 00:08:55,440 --> 00:09:00,640 Speaker 1: leading to ninety million dollars of annual savings going forward. So, Alison, 168 00:09:00,640 --> 00:09:02,800 Speaker 1: what do you think what is your view of UBS? 169 00:09:02,920 --> 00:09:05,400 Speaker 1: Can they continue to be? Well? First of all, are 170 00:09:05,440 --> 00:09:07,520 Speaker 1: they a global investment bank? And if so, can they 171 00:09:07,559 --> 00:09:10,480 Speaker 1: continue to be Because we've seen, you know, Deutsche Bank 172 00:09:10,640 --> 00:09:13,319 Speaker 1: essentially say we're not a global investment bank and we're 173 00:09:13,360 --> 00:09:16,880 Speaker 1: cutting back. What's the UB strategy? So I think they 174 00:09:16,920 --> 00:09:19,320 Speaker 1: are global investment bank, but they do have a little 175 00:09:19,320 --> 00:09:22,240 Speaker 1: bit of a different mix. So they are more focused 176 00:09:22,360 --> 00:09:26,160 Speaker 1: on Asia and they are more focused on Europe UM, 177 00:09:26,200 --> 00:09:28,840 Speaker 1: and so they say they're gaining share in those areas. 178 00:09:28,920 --> 00:09:30,920 Speaker 1: We don't have sort of all the numbers in from 179 00:09:31,000 --> 00:09:33,600 Speaker 1: from some of those local competitors to sort of validate 180 00:09:33,679 --> 00:09:37,080 Speaker 1: that UM, but they are generally more focused on those 181 00:09:37,120 --> 00:09:40,280 Speaker 1: areas which have been feeling the pressure. And I was 182 00:09:40,360 --> 00:09:43,559 Speaker 1: waiting for you, Paul to ask me if the savings 183 00:09:43,600 --> 00:09:46,800 Speaker 1: meant staff cut. That's where I was going. And I 184 00:09:46,880 --> 00:09:49,079 Speaker 1: was prepared with my answer this time, which is you 185 00:09:49,120 --> 00:09:51,480 Speaker 1: always asked me this class savings me and staff cuts. 186 00:09:51,880 --> 00:09:53,880 Speaker 1: And my answer to you is always like, well, there's 187 00:09:53,880 --> 00:09:57,880 Speaker 1: staff with Zoso technology and we're seeing both at ubs. 188 00:09:57,960 --> 00:10:00,600 Speaker 1: And basically what they're saying is, look, you know, we 189 00:10:00,640 --> 00:10:03,560 Speaker 1: are gonna cut some staff a hundred percent of the 190 00:10:03,559 --> 00:10:06,240 Speaker 1: cost savings are going to be in compensation, but we're 191 00:10:06,240 --> 00:10:08,520 Speaker 1: going to continue to invest in technology. And I think 192 00:10:08,559 --> 00:10:11,480 Speaker 1: that's important because I think that's really what the US 193 00:10:11,559 --> 00:10:14,560 Speaker 1: banks have done, right, is that you know, they sort 194 00:10:14,559 --> 00:10:17,439 Speaker 1: of benefited from this virtuous cycle about our economy. We 195 00:10:17,559 --> 00:10:20,200 Speaker 1: got the tax cuts, they were able to spend. But 196 00:10:20,280 --> 00:10:23,360 Speaker 1: I think you know, UMS has had some interesting anecdotal 197 00:10:23,360 --> 00:10:29,319 Speaker 1: wins in their research department. They have this UM Evidence lab. 198 00:10:29,600 --> 00:10:33,200 Speaker 1: They've also invested in their electronic trading platform, and I 199 00:10:33,200 --> 00:10:35,640 Speaker 1: think that's the story we're going to continue to hear 200 00:10:35,720 --> 00:10:38,240 Speaker 1: more about. In terms of fixed income trading. We also 201 00:10:38,280 --> 00:10:40,880 Speaker 1: got this big announcement from Deutsche Bank. We knew they 202 00:10:40,920 --> 00:10:43,400 Speaker 1: were going to be making cuts to their rate business, 203 00:10:43,800 --> 00:10:45,679 Speaker 1: Bloomberg News saying they think it's going to be ten 204 00:10:45,720 --> 00:10:49,640 Speaker 1: per cent. Um also saying, and again this is hearsay, 205 00:10:49,720 --> 00:10:51,680 Speaker 1: but you know that the bank is going to continue 206 00:10:51,679 --> 00:10:54,640 Speaker 1: to invest on technology. You know, the shift in fixed 207 00:10:54,679 --> 00:10:57,400 Speaker 1: income trading that we've seen in equities trading I think 208 00:10:57,480 --> 00:11:00,000 Speaker 1: is going to continue, and I think it is important. 209 00:11:00,080 --> 00:11:03,040 Speaker 1: And to your point, if you want to be a player, 210 00:11:03,160 --> 00:11:07,200 Speaker 1: that you need to invest just get your sense. Do 211 00:11:07,240 --> 00:11:10,240 Speaker 1: you think that UBS would be better off just as 212 00:11:10,280 --> 00:11:14,120 Speaker 1: a wealth management unit and not with its investment bank? 213 00:11:14,679 --> 00:11:17,840 Speaker 1: I think And that is the questions that investors asked 214 00:11:17,880 --> 00:11:20,640 Speaker 1: because I think, you know, when people look at companies 215 00:11:20,640 --> 00:11:23,760 Speaker 1: like UBS and Credit SUITEZ, that's what they want to own. 216 00:11:23,800 --> 00:11:26,520 Speaker 1: They want to own the wealth management business, recurring revenue, 217 00:11:27,679 --> 00:11:31,800 Speaker 1: very high return on equity um. But there are sort 218 00:11:31,800 --> 00:11:35,920 Speaker 1: of benefits of having the investment capabilities. Think about wealthy 219 00:11:35,960 --> 00:11:38,200 Speaker 1: Asians that want to sell their businesses, the M and 220 00:11:38,200 --> 00:11:42,559 Speaker 1: A opportunities, the financing opportunities, and UBS and credit switets, 221 00:11:42,920 --> 00:11:45,240 Speaker 1: you know, continue to pound the table to make the 222 00:11:45,240 --> 00:11:48,240 Speaker 1: case of the synergies between the banks. You know. I 223 00:11:48,280 --> 00:11:51,160 Speaker 1: do think that there is some, uh, there is some 224 00:11:51,280 --> 00:11:54,760 Speaker 1: validity to that argument, um. And I think we will 225 00:11:54,800 --> 00:11:57,160 Speaker 1: see from from Credit Suite next week, who has also 226 00:11:57,200 --> 00:12:01,280 Speaker 1: been under pressure given they're sort of trailing trading revenue 227 00:12:01,320 --> 00:12:02,880 Speaker 1: a lot of which I do think it is due 228 00:12:02,920 --> 00:12:05,840 Speaker 1: to mix. You know theyy I think are going to 229 00:12:05,840 --> 00:12:09,280 Speaker 1: continue to outperform when they report next week. Alison William 230 00:12:09,320 --> 00:12:11,319 Speaker 1: thanks so much for joining us. We really appreciate. We 231 00:12:11,360 --> 00:12:13,960 Speaker 1: know it's a busy time with the global investment banks 232 00:12:13,960 --> 00:12:17,320 Speaker 1: reporting earnings. Allison's the senior analysts covering global investment banks 233 00:12:17,320 --> 00:12:20,720 Speaker 1: and asset management for Bloomberg Intelligence, joining us on uh 234 00:12:20,760 --> 00:12:40,000 Speaker 1: the phone. Well, we all know that the cannabis market 235 00:12:40,040 --> 00:12:43,320 Speaker 1: in the United States is growing rapidly and there's a 236 00:12:43,360 --> 00:12:45,959 Speaker 1: lot of players that are trying to find their niche 237 00:12:45,960 --> 00:12:48,440 Speaker 1: within the business that includes the marketing and advertising and 238 00:12:48,559 --> 00:12:51,720 Speaker 1: education around cannabis, and our next guests are certainly trying 239 00:12:51,800 --> 00:12:54,760 Speaker 1: to make their mark there. We welcome Jeremy Jacob's, co 240 00:12:54,800 --> 00:12:58,320 Speaker 1: founder and chairman of Enlightened, and Colby mackenzie, co founder 241 00:12:58,520 --> 00:13:00,640 Speaker 1: also on their board of managers of Enlightened. Both of 242 00:13:00,640 --> 00:13:03,880 Speaker 1: them join us here in our Bloomberg Interactive Brokers studio. 243 00:13:04,080 --> 00:13:05,480 Speaker 1: So Jeremy and let me let me start with you, 244 00:13:05,480 --> 00:13:07,920 Speaker 1: which give us a sense of what Enlightened is and 245 00:13:08,000 --> 00:13:10,080 Speaker 1: what you guys are trying to do in this market. Yeah, 246 00:13:10,160 --> 00:13:13,480 Speaker 1: so Enlightened feels a really interesting niche. We're the largest 247 00:13:14,200 --> 00:13:17,120 Speaker 1: media company within the cannabis space. We operate a network 248 00:13:17,160 --> 00:13:20,600 Speaker 1: of television screens and roughly a thousand cannabis dispensaries across 249 00:13:20,640 --> 00:13:23,480 Speaker 1: thirty six states and three countries. Really to kind of 250 00:13:23,480 --> 00:13:25,440 Speaker 1: get a feel. If you imagine standing in line and 251 00:13:25,480 --> 00:13:28,560 Speaker 1: you look up and there's a television screen. It's educating you, 252 00:13:28,600 --> 00:13:31,720 Speaker 1: it's entertaining you, but it's also advertising to you. That's 253 00:13:31,720 --> 00:13:36,040 Speaker 1: the biggest part of enlightened business. So Colby, how often 254 00:13:36,120 --> 00:13:40,400 Speaker 1: are people standing online at a cannabis dispensary able to 255 00:13:40,480 --> 00:13:44,280 Speaker 1: watch television? Yeah, it's It's actually an interesting thing because 256 00:13:44,720 --> 00:13:47,760 Speaker 1: I was definitely a newbie to the space when I 257 00:13:47,800 --> 00:13:50,439 Speaker 1: co founded this with Jeremy and expected it to be 258 00:13:50,480 --> 00:13:52,520 Speaker 1: like most of a retail where you just walk in 259 00:13:52,720 --> 00:13:55,880 Speaker 1: walk out as fast as you can. But you've kind 260 00:13:55,880 --> 00:13:58,040 Speaker 1: of seen this trend in retail as a whole, and 261 00:13:58,120 --> 00:14:00,800 Speaker 1: cannabis is kind of leading that, and it's really become 262 00:14:00,840 --> 00:14:03,240 Speaker 1: like this experience. So you're not going there just to 263 00:14:03,360 --> 00:14:07,360 Speaker 1: have a quick general store type transaction. Instead, you're going 264 00:14:07,400 --> 00:14:10,040 Speaker 1: there to experience and learn and really find your niche 265 00:14:10,080 --> 00:14:13,480 Speaker 1: within the space. And so we actually have tracking technology 266 00:14:13,600 --> 00:14:15,680 Speaker 1: that says they're in there for twenty one minutes. Okay, 267 00:14:15,720 --> 00:14:19,000 Speaker 1: when when when you say you're in cannabis dispensary for 268 00:14:19,040 --> 00:14:21,680 Speaker 1: an experience, I know, I just think, okay, so you 269 00:14:21,720 --> 00:14:25,400 Speaker 1: go there to get high? Is that? What's going on? UM? 270 00:14:25,480 --> 00:14:28,040 Speaker 1: A little different than that. So, because there's so many 271 00:14:28,040 --> 00:14:30,600 Speaker 1: different strains, so many different types, so many different things 272 00:14:30,640 --> 00:14:34,040 Speaker 1: that you have options, it actually is like information overload 273 00:14:34,560 --> 00:14:38,160 Speaker 1: and it turns into this like please help me, like 274 00:14:38,280 --> 00:14:40,600 Speaker 1: deer in the headlights type experience. And that's why our 275 00:14:40,640 --> 00:14:42,840 Speaker 1: screen is there to kind of guide them along the 276 00:14:42,840 --> 00:14:45,560 Speaker 1: way without feeling embarrassed. So, Jeremy, what are the types 277 00:14:45,600 --> 00:14:49,560 Speaker 1: of advertisers that advertise on the Enlightened Network? Great question. Really, 278 00:14:49,600 --> 00:14:52,440 Speaker 1: they fall into two categories. The first one is obvious, 279 00:14:52,440 --> 00:14:55,160 Speaker 1: the endemic advertisers the products that would be carried on 280 00:14:55,200 --> 00:14:56,840 Speaker 1: the shield same way if you had a screen in 281 00:14:56,880 --> 00:15:00,160 Speaker 1: a convenience store and be obvious to promote candy balls 282 00:15:00,200 --> 00:15:04,239 Speaker 1: and cokes, well, vape pins, edibles, uh, you know, premium 283 00:15:04,320 --> 00:15:08,160 Speaker 1: bud that's prepackaged. Those types of advertisers. But what we're 284 00:15:08,160 --> 00:15:11,960 Speaker 1: seeing really more than anything, is an increasing demand from 285 00:15:12,080 --> 00:15:16,680 Speaker 1: non cannabis companies that have decided to focus on that 286 00:15:16,800 --> 00:15:20,440 Speaker 1: cannabis market. For example, Vice Showtime, a lot of entertainment 287 00:15:20,480 --> 00:15:24,240 Speaker 1: companies that come out with programs like Long Appetite Obviously 288 00:15:24,280 --> 00:15:27,160 Speaker 1: that's catered towards the cannabis market. Uh. And then you 289 00:15:27,200 --> 00:15:29,920 Speaker 1: look at companies like door Dashes an advertiser of ours, 290 00:15:29,960 --> 00:15:33,760 Speaker 1: and Vans delivery of food that's excellent for cannabis consumers 291 00:15:33,760 --> 00:15:36,480 Speaker 1: both hungry and lazy, as well as Vans, you know, 292 00:15:36,560 --> 00:15:39,320 Speaker 1: a very popular skateboarding shoe. So there is a portion 293 00:15:39,400 --> 00:15:42,160 Speaker 1: of the cannabis demographic that that fits perfectly. So we're 294 00:15:42,200 --> 00:15:45,440 Speaker 1: really seeing a growth in the non endemic advertisers in 295 00:15:45,440 --> 00:15:48,440 Speaker 1: a really big way. How many cannabis dispensaries are there 296 00:15:49,200 --> 00:15:53,600 Speaker 1: so interesting question because it is a transition from a 297 00:15:53,680 --> 00:15:56,120 Speaker 1: gray market in many states to a legal market. So 298 00:15:56,200 --> 00:15:59,680 Speaker 1: from a legal perspective, you're looking at about five thousand 299 00:16:00,000 --> 00:16:02,400 Speaker 1: cross the nation. So I guess that when you say 300 00:16:02,400 --> 00:16:05,800 Speaker 1: it's a gray area, are there other facilities that have 301 00:16:05,880 --> 00:16:10,800 Speaker 1: access to your television feed? Sadly, no, we actually only 302 00:16:10,800 --> 00:16:12,880 Speaker 1: work in the legal ones. But sadly, when I say gray, 303 00:16:12,920 --> 00:16:15,880 Speaker 1: you're talking largely about like a California market where it 304 00:16:16,000 --> 00:16:19,080 Speaker 1: was medical and it was very kind of gray as 305 00:16:19,080 --> 00:16:22,080 Speaker 1: to what was a dispensary. We've always had a role 306 00:16:22,080 --> 00:16:24,840 Speaker 1: in a board. Our board is very strict on this rule, 307 00:16:25,160 --> 00:16:28,960 Speaker 1: legal or no TV for them. So so Jeremy, give 308 00:16:29,000 --> 00:16:30,720 Speaker 1: us a sense of and Kobe as well. I know 309 00:16:30,800 --> 00:16:33,880 Speaker 1: you guys have maybe some maybe different thoughts. Where are 310 00:16:33,920 --> 00:16:35,240 Speaker 1: we Just give us a sense of where are we 311 00:16:35,280 --> 00:16:39,240 Speaker 1: in terms of the states, How many states have legalized marijuana, 312 00:16:39,320 --> 00:16:42,280 Speaker 1: and what is I would guess the holding grail for 313 00:16:42,360 --> 00:16:45,080 Speaker 1: the industry would be a federal legalization. Give us a 314 00:16:45,080 --> 00:16:47,120 Speaker 1: sense where you think that might be. Yeah, so you've 315 00:16:47,200 --> 00:16:50,600 Speaker 1: you've got about a dozen states that are now recreational. Uh, 316 00:16:50,640 --> 00:16:53,280 Speaker 1: and you know that's really when the tipping point occurs, 317 00:16:53,520 --> 00:16:57,480 Speaker 1: especially for sales volume, is when you go recreational. Outside 318 00:16:57,520 --> 00:17:01,160 Speaker 1: of that totality, you've got around thirty thirty three thirty six, 319 00:17:01,160 --> 00:17:03,280 Speaker 1: depending on how you look at medical marijuana, whether it's 320 00:17:03,320 --> 00:17:06,080 Speaker 1: been elected or actually implemented. So you're looking at two 321 00:17:06,119 --> 00:17:09,960 Speaker 1: thirds of the country past that there's at least decriminalization 322 00:17:10,000 --> 00:17:12,119 Speaker 1: and most of the other states. There's very few states 323 00:17:12,119 --> 00:17:15,439 Speaker 1: that don't have some sort of cannabis legislation that's in place. 324 00:17:15,880 --> 00:17:18,160 Speaker 1: As far as federal legalization, I think that's a big 325 00:17:18,200 --> 00:17:20,399 Speaker 1: debate with everyone, but most of us with inside the 326 00:17:20,480 --> 00:17:23,320 Speaker 1: industry definitely feel it's within two years. You know, it's 327 00:17:23,320 --> 00:17:26,760 Speaker 1: a strong political marketplace right now, and so everybody wants 328 00:17:26,800 --> 00:17:28,920 Speaker 1: to grab ahold of that. I wonder how much though 329 00:17:28,960 --> 00:17:32,240 Speaker 1: the vaping scare recently has sort of set that effort 330 00:17:32,240 --> 00:17:34,280 Speaker 1: back me. I mean, have you've seen a sort of 331 00:17:34,280 --> 00:17:36,320 Speaker 1: fewer people showing up to the dispensaries or if not 332 00:17:36,440 --> 00:17:39,800 Speaker 1: that more pushback from regulators and so the interesting thing 333 00:17:40,000 --> 00:17:42,320 Speaker 1: on the vaping scare is, I feel like you saw 334 00:17:42,359 --> 00:17:46,200 Speaker 1: a ton of reaction outside the industry. Inside the industry, 335 00:17:46,240 --> 00:17:49,560 Speaker 1: it was it wasn't really viewed in any major capacity 336 00:17:49,680 --> 00:17:52,520 Speaker 1: because it actually shows a sign that you need to 337 00:17:52,520 --> 00:17:56,800 Speaker 1: move towards legalization because with legalization you have more regulation, 338 00:17:56,880 --> 00:18:00,679 Speaker 1: particularly coming from federal assistance and money, and all of 339 00:18:00,680 --> 00:18:04,360 Speaker 1: the illegal activity and kind of the vaping scare came 340 00:18:04,440 --> 00:18:07,280 Speaker 1: from stuff that turned out to be not legal. Jeremy, 341 00:18:07,359 --> 00:18:09,720 Speaker 1: we have literally twenty seconds. How much buying power do 342 00:18:09,800 --> 00:18:13,120 Speaker 1: these people have? Cannabas consumers are some of the strongest 343 00:18:13,160 --> 00:18:15,080 Speaker 1: bars on the planet. There's some of the most loyal 344 00:18:15,119 --> 00:18:17,520 Speaker 1: They're big spenders. They spend on averages short of a 345 00:18:17,560 --> 00:18:21,159 Speaker 1: hundred extra dollars on cannabis, and so they've been proven 346 00:18:21,160 --> 00:18:24,080 Speaker 1: to be some of the most loyal, biggest spenders. Jeremy 347 00:18:24,119 --> 00:18:28,800 Speaker 1: Jacobs as well as Colby Mackenzie, co founders of the 348 00:18:28,840 --> 00:18:35,160 Speaker 1: company Enlightened, which runs a television in dispensaries across the country. 349 00:18:36,000 --> 00:18:38,320 Speaker 1: Who knew that it was twenty one minutes in in 350 00:18:38,400 --> 00:18:40,040 Speaker 1: a cannabis Who knew a lot of these things. We're 351 00:18:40,080 --> 00:18:43,320 Speaker 1: having so many people associated with the cannabis business come 352 00:18:43,359 --> 00:18:45,399 Speaker 1: in here, and there's so many different ways that this 353 00:18:45,480 --> 00:18:47,520 Speaker 1: is actually growing as a business. Yeah, and then it's 354 00:18:47,520 --> 00:19:07,040 Speaker 1: a it's a real big money maker. The official data 355 00:19:07,200 --> 00:19:10,919 Speaker 1: is confusing, conflicted, and often not enough. That has been 356 00:19:10,920 --> 00:19:13,359 Speaker 1: the conclusion of many investors certainly that are looking for 357 00:19:13,480 --> 00:19:17,160 Speaker 1: alternative sources of data, one of them being yelped, where 358 00:19:17,200 --> 00:19:20,639 Speaker 1: you write reviews of the places you go. Uh. Carl Biolic, 359 00:19:20,720 --> 00:19:24,119 Speaker 1: Data science editor joining us here for yelp in our 360 00:19:24,119 --> 00:19:26,840 Speaker 1: Blombergadder Actor Broger Studios. Carl, can you give us a 361 00:19:26,880 --> 00:19:31,280 Speaker 1: sense you have this yelp economic average? Can you give 362 00:19:31,359 --> 00:19:32,600 Speaker 1: us a sense of what it is and what it's 363 00:19:32,600 --> 00:19:35,639 Speaker 1: showing us right now? Sure, it's a look at how 364 00:19:35,760 --> 00:19:39,560 Speaker 1: businesses are doing, and how consumers are engaging with businesses 365 00:19:39,680 --> 00:19:44,520 Speaker 1: and how that's changing. And it's across many different industries 366 00:19:44,560 --> 00:19:47,359 Speaker 1: and all across the country, including in fifty metros that 367 00:19:47,400 --> 00:19:52,160 Speaker 1: we track, And we just released today our third quarter findings, 368 00:19:52,400 --> 00:19:56,880 Speaker 1: which show that things were pretty flat. The economic average 369 00:19:56,920 --> 00:20:00,240 Speaker 1: was up about zero point one percent, so a little 370 00:20:00,280 --> 00:20:02,879 Speaker 1: bit of good news, sort of the sum total of 371 00:20:02,920 --> 00:20:05,879 Speaker 1: all the different things we saw affecting the national and 372 00:20:05,880 --> 00:20:08,159 Speaker 1: local economy in the third quarter. So, Carl, is there 373 00:20:08,160 --> 00:20:11,840 Speaker 1: anything did you guys in your data see any regional differences. 374 00:20:11,840 --> 00:20:14,960 Speaker 1: Are certain parts of the country doing better than others. Yeah, 375 00:20:15,000 --> 00:20:19,000 Speaker 1: this time we really focused on California and California metros 376 00:20:19,000 --> 00:20:21,879 Speaker 1: which have been struggling, in particular in the Bay Area. 377 00:20:22,160 --> 00:20:25,359 Speaker 1: San Jose, out of the fifty big metro's we've been 378 00:20:25,359 --> 00:20:28,160 Speaker 1: tracking for almost three years now, has fallen the most 379 00:20:28,280 --> 00:20:30,800 Speaker 1: and San Francisco has fallen the second most, So it's 380 00:20:30,800 --> 00:20:35,160 Speaker 1: a pretty clear picture. In northern California, Sacramento is also 381 00:20:35,200 --> 00:20:37,760 Speaker 1: below average. And then if you go to southern California, 382 00:20:37,840 --> 00:20:40,879 Speaker 1: San Diego is one of the worst performing metros. In 383 00:20:41,040 --> 00:20:42,400 Speaker 1: l A is in the bottom town as the West 384 00:20:42,400 --> 00:20:45,600 Speaker 1: wrong with California. Well, so this has changed since the 385 00:20:45,600 --> 00:20:48,600 Speaker 1: third quarter of fourth quarter of sixteen. So there's certainly 386 00:20:48,720 --> 00:20:51,239 Speaker 1: many great things going on in California. I say, is 387 00:20:51,320 --> 00:20:53,680 Speaker 1: you know California based business. I mean, there's there's great 388 00:20:54,040 --> 00:20:55,480 Speaker 1: things in the economy. It would be one of the 389 00:20:55,480 --> 00:20:58,360 Speaker 1: world's largest economies. There is what nasty letters from people 390 00:20:58,359 --> 00:21:01,760 Speaker 1: living in California. But you know this has changed, so 391 00:21:01,800 --> 00:21:05,159 Speaker 1: there are struggles. There are declines that we attribute, we 392 00:21:05,240 --> 00:21:07,679 Speaker 1: think mainly to just the difficulty of being able to 393 00:21:07,680 --> 00:21:10,200 Speaker 1: set up shop in California and then to find workers 394 00:21:10,200 --> 00:21:12,840 Speaker 1: who are near your business and to be able to 395 00:21:12,920 --> 00:21:15,160 Speaker 1: pay them enough that they can afford to live near 396 00:21:15,200 --> 00:21:18,520 Speaker 1: your business while still turning a profit and having enough 397 00:21:18,560 --> 00:21:21,560 Speaker 1: customers nearby who are going to give you that density 398 00:21:21,600 --> 00:21:24,320 Speaker 1: that you need to to stay competitive. Are there areas 399 00:21:24,400 --> 00:21:28,000 Speaker 1: where you saw a surprising amount of strength. Yeah. We 400 00:21:28,000 --> 00:21:29,760 Speaker 1: we've been tracking for the last two quarters. A We 401 00:21:29,840 --> 00:21:32,159 Speaker 1: call the five boom towns, the ones each quarter that 402 00:21:32,320 --> 00:21:34,639 Speaker 1: have grown the most since the start of this series 403 00:21:34,680 --> 00:21:38,040 Speaker 1: three years ago. This time, Milwaukee was the strongest. There's 404 00:21:38,080 --> 00:21:43,200 Speaker 1: also strength in Buffalo, Portland, Maine, Honolulu. You know, maybe 405 00:21:43,280 --> 00:21:44,960 Speaker 1: these are not the ones you would put on a 406 00:21:45,000 --> 00:21:47,880 Speaker 1: list normally, and you know, what do we say they 407 00:21:47,880 --> 00:21:49,800 Speaker 1: have in common besides that they've been doing very well 408 00:21:49,800 --> 00:21:51,359 Speaker 1: in the ELP economic average. But we do think there 409 00:21:51,400 --> 00:21:54,600 Speaker 1: are these smaller metros that have been able to attract 410 00:21:54,640 --> 00:21:58,399 Speaker 1: businesses and uh, you know, allow people to take more 411 00:21:58,520 --> 00:22:00,440 Speaker 1: risks perhap. But is this is this a real sort 412 00:22:00,440 --> 00:22:03,760 Speaker 1: of sense of where we are in terms of you know, however, 413 00:22:03,800 --> 00:22:07,600 Speaker 1: many years into this economic recovery, the areas that kind 414 00:22:07,600 --> 00:22:11,439 Speaker 1: of lagged behind for longest are finally seeing some positive 415 00:22:11,480 --> 00:22:13,760 Speaker 1: momentum in their local growth. Is that sort of the 416 00:22:13,800 --> 00:22:16,320 Speaker 1: story here? I think that's a big part of it. Yes, 417 00:22:16,359 --> 00:22:18,720 Speaker 1: I think we are seeing that there are places that 418 00:22:19,280 --> 00:22:21,280 Speaker 1: if you had checked in, you know, ten years ago 419 00:22:21,320 --> 00:22:23,040 Speaker 1: and where were they relative to each other, you might 420 00:22:23,080 --> 00:22:27,600 Speaker 1: see something really different. And that this last three year 421 00:22:27,600 --> 00:22:29,760 Speaker 1: periods of interesting period, as you're saying, like in terms 422 00:22:29,800 --> 00:22:32,200 Speaker 1: of recovery. We've had a new president during this time. 423 00:22:32,600 --> 00:22:35,639 Speaker 1: So it is really just this change through the history 424 00:22:35,680 --> 00:22:37,399 Speaker 1: of this average, and we're gonna be interested to see 425 00:22:37,400 --> 00:22:40,240 Speaker 1: what's the boom town in one year, in five years. So, Caroll, 426 00:22:40,320 --> 00:22:42,240 Speaker 1: one of the great things about the YELP reviews is 427 00:22:42,400 --> 00:22:45,800 Speaker 1: the restaurant reviews, So what are you seeing in that categories. 428 00:22:45,800 --> 00:22:48,680 Speaker 1: I'm sure you guys have a lot of data points there. Yeah, 429 00:22:48,760 --> 00:22:52,679 Speaker 1: and we're looking at reviews potentially, but also all the 430 00:22:52,720 --> 00:22:56,639 Speaker 1: other things people do with restaurants and seeing that really 431 00:22:56,720 --> 00:22:59,880 Speaker 1: the lower priced restaurants and the restaurant and food options 432 00:23:00,040 --> 00:23:01,639 Speaker 1: that you might go to when you really want to 433 00:23:01,640 --> 00:23:03,600 Speaker 1: eat at home and they're supplying food that you're gonna 434 00:23:03,600 --> 00:23:06,840 Speaker 1: take and eat at home, those are the strongest um. 435 00:23:06,880 --> 00:23:08,920 Speaker 1: You know, there are some exceptions, but we're also seeing 436 00:23:08,960 --> 00:23:13,080 Speaker 1: some of the more expensive categories and restaurants declining, which 437 00:23:13,160 --> 00:23:15,800 Speaker 1: you know, could be a signal that people are being 438 00:23:15,880 --> 00:23:18,120 Speaker 1: more frugal, but they might also just want to eat 439 00:23:18,480 --> 00:23:20,680 Speaker 1: food made outside the home more often, so they're going 440 00:23:20,720 --> 00:23:23,000 Speaker 1: to lower priced options to make that possible. But it's 441 00:23:23,000 --> 00:23:25,040 Speaker 1: interesting to see strength in some of these categories like 442 00:23:25,080 --> 00:23:28,560 Speaker 1: pizza and chicken wings and delis. Although this all goes together, right, 443 00:23:28,640 --> 00:23:32,880 Speaker 1: some of the higher priced markets are seeing the slowest growth, 444 00:23:33,480 --> 00:23:36,760 Speaker 1: and you know, when whether it's in other businesses as well. California, 445 00:23:36,840 --> 00:23:39,320 Speaker 1: I know that New York with property, but you're also 446 00:23:39,359 --> 00:23:42,520 Speaker 1: seeing slower growth or less popularity at the higher end 447 00:23:42,520 --> 00:23:46,040 Speaker 1: of restaurants. What is the implication economically if the high 448 00:23:46,160 --> 00:23:49,000 Speaker 1: end is starting to pull back a bit, I mean, 449 00:23:49,000 --> 00:23:51,840 Speaker 1: it could it could suggest that there's some lack of 450 00:23:51,880 --> 00:23:55,639 Speaker 1: confidence in you know, spending money and consumption. Uh, there 451 00:23:55,640 --> 00:23:57,719 Speaker 1: are other signals we look to for that, of course, 452 00:23:57,920 --> 00:24:02,640 Speaker 1: but you know, I think that it's it's a complex 453 00:24:02,680 --> 00:24:05,520 Speaker 1: picture because I think there's also just shifting geographically and 454 00:24:05,600 --> 00:24:07,960 Speaker 1: that may have to do with how expensive markets are, 455 00:24:08,000 --> 00:24:10,840 Speaker 1: but also what the local regulations are and opportunities for 456 00:24:10,880 --> 00:24:14,160 Speaker 1: workers in different sectors around the country. And in terms 457 00:24:14,200 --> 00:24:17,639 Speaker 1: of food, I think one thing that we've seen as 458 00:24:17,640 --> 00:24:19,560 Speaker 1: a company in general is just a stepping up of 459 00:24:19,680 --> 00:24:22,160 Speaker 1: quality in the lower price categories. So I think people 460 00:24:22,200 --> 00:24:25,399 Speaker 1: also have recognized that that, you know, what used to 461 00:24:25,440 --> 00:24:28,840 Speaker 1: be considered like fast food, let's say, has has really 462 00:24:28,840 --> 00:24:31,080 Speaker 1: stepped up in a lot of cases. You know, some 463 00:24:31,119 --> 00:24:33,600 Speaker 1: of the lower priced local restaurants as well have really 464 00:24:33,600 --> 00:24:36,000 Speaker 1: been competitive in quality. Carl bial like, thank you so 465 00:24:36,080 --> 00:24:39,080 Speaker 1: much for joining us. Carls a data science editor for YEP, 466 00:24:39,160 --> 00:24:42,800 Speaker 1: joining us here in our Bloomberg Inactive Broker studio. Thanks 467 00:24:42,800 --> 00:24:44,960 Speaker 1: for listening to the Bloomberg P and L podcast. You 468 00:24:45,000 --> 00:24:47,679 Speaker 1: can subscribe and listen to interviews at Apple Podcasts or 469 00:24:47,680 --> 00:24:51,040 Speaker 1: whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter 470 00:24:51,080 --> 00:24:53,359 Speaker 1: at pt Sweeney. I'm Lisa abram Boy. It's I'm on 471 00:24:53,400 --> 00:24:56,160 Speaker 1: Twitter at Lisa A. Bramwoy. It's One before the Podcast. 472 00:24:56,240 --> 00:25:01,320 Speaker 1: You can always catch us worldwide on Bloomberg Radio to 473 00:25:01,400 --> 00:25:01,760 Speaker 1: belated