Speaker 1: Welcome to the Bloomberg Penel podcast and Paul swing you.
Speaker 1: Along with my co host Lisa Brahmas. Each day we
Speaker 1: bring you the most noteworthy and useful interviews for you
Speaker 1: and your money, whether at the grocery store or the
Speaker 1: trading floor. Find a Bloomberg Penil podcast on Apple podcast
Speaker 1: or wherever you listen to podcasts, as well as that
Speaker 1: Bloomberg dot Com. Joining us now is Leonel Laurant. He
Speaker 1: covers He covers all things for us from Bloomberg Opinion.
Speaker 1: Uh and Leonel, can we just start with what we're
Speaker 1: expecting to learn from these hearings? Why are they important? Well,
Speaker 1: I think the opening comments testimony from David Marcus kind
Speaker 1: of lays out already what the important parts are, I mean,
Speaker 1: from from the from the regulatory political point of view.
Speaker 1: They clearly have to answer or push on two questions,
Speaker 1: which is, where does the day to go? How is
Speaker 1: it really kept at our length from Facebook? And what
Speaker 1: does libor mead for financial stability given that it's going
Speaker 1: to be investing in big currencies like the dollar, like
Speaker 1: the euro. And I think that's already the opening testimony
Speaker 1: from David Marcus, who is trying to tell everyone looks,
Speaker 1: don't worry. We're not even going to move. We're not
Speaker 1: going to budge on this until everyone is happy, and
Speaker 1: we're going to want to be regulated to an almost
Speaker 1: extreme level before this even gets off the ground. So
Speaker 1: it's going to be a lot of kind of soothing
Speaker 1: language from from Facebook on this and hopefully more transparency.
Speaker 1: So you know, I'm glad you brought up to kind
Speaker 1: of the type that the statement from Mr Marcus, because
Speaker 1: it was extremely conciliatory. I would say, in terms of
Speaker 1: as you mentioned that they will not move until they
Speaker 1: get full regulatory approval. What is this sense within kind
Speaker 1: of the technology world of financial regulatory world whether Facebook
Speaker 1: can ever get approval for this type of currency. So
Speaker 1: I think that's what we're seeing now is primarily a
Speaker 1: political reaction. It is as though came with Analystica was happening. Again.
Speaker 1: This is from the lawmaker Congress side of things. I
Speaker 1: think on the on the regulation front, I think that
Speaker 1: there is actually a lot of debate, a lot of
Speaker 1: kind of open debate about whether there should be there
Speaker 1: should be a trigger for say, digital currencies to be
Speaker 1: shue directly by the central bank. I think that regulators
Speaker 1: like Mark Karney, for instance, have been more open than
Speaker 1: others and saying why don't we just bring them into
Speaker 1: our tent and keep a really close eye on them
Speaker 1: as the condition for letting them launch. I have yet
Speaker 1: to hear anyone say let's band this, So I think
Speaker 1: that a lot of this reaction is primarily about politically
Speaker 1: keeping a check on Facebook's power, and not because everyone
Speaker 1: has suddenly agreed that this should never see the light
Speaker 1: of day. You know, I'm trying to figure out what
Speaker 1: what exactly liberal is. Do we have a sense of
Speaker 1: what exactly it is or is it more concept than
Speaker 1: even a firmed up reality or potential of reality in
Speaker 1: the near future. So I think Facebook would would like
Speaker 1: it to be seen as money, electronic money. This is
Speaker 1: why they're saying Libra is cash. It's why they're saying
Speaker 1: they will be regulated as a money services business. But
Speaker 1: they how can I put this? May be disappointed to
Speaker 1: find that regulators don't agree with the definition, because remember,
Speaker 1: on the cryptocurrency France, there were plenty of discussions like
Speaker 1: whether Bitcoin and ethereum were securities or commodities, and Libra
Speaker 1: may endure being viewed as an exchange traded fund because
Speaker 1: theoretically or conceptually, you can see how someone is putting
Speaker 1: money into Libra and receiving in exchange a slice of
Speaker 1: something that is investing in currencies, in testing in assets.
Speaker 1: So there's a very good argument to say it's it's
Speaker 1: an ETS. So there's a whole debate about what it
Speaker 1: should be that may not go Facebook's way. Leon. I
Speaker 1: know some Facebook investors have been asking the basic question
Speaker 1: of why why would Facebook, you know, attempt to get
Speaker 1: into a business that is so highly regulated, not just
Speaker 1: in the US but around the world, particularly given a
Speaker 1: time when there are serious concerns being raised about some
Speaker 1: of their core business the privacy and data security and
Speaker 1: so on. Well, it's interesting because in it's very easy
Speaker 1: to say in hindsight, but I remember when Libra was
Speaker 1: first announced, there are plenty of self had analysts saying
Speaker 1: this is fantastic, It's a whole new revenue stream. It's
Speaker 1: the question is almost why this particular structure with the
Speaker 1: crypto side of things. Because Facebook has tried several times
Speaker 1: to get a payments business off the ground, you can
Speaker 1: see why. It's a business model of ninety percent advertising
Speaker 1: is way too concentrated and could do with an actual
Speaker 1: revenue stream where people pay for things on Facebook. That
Speaker 1: makes complete sense, but because their previous bids have flopped,
Speaker 1: they clearly entrusted David Marcus with finding a new way
Speaker 1: to do it a successful way. He went the cryptocurrency route.
Speaker 1: And I think that is a big question, that is,
Speaker 1: why why go down this blockchain route? Why go down
Speaker 1: this attempt at being decentralized and trying to please all
Speaker 1: types of people, including blockchain developers and bitcoin buyers. That
Speaker 1: that's a declution question. Lena Laurent, thank you so much
Speaker 1: for being with us calumnist for Blueberg Opinion. Well, the
Speaker 1: grocery business clearly has historically been a very competitive business,
Speaker 1: very tough, tight margins, particularly in New York City with
Speaker 1: all of the bodegas and independent groceries. The question I've
Speaker 1: always had is who supplies these small bodegas and independent grocers.
Speaker 1: Well we found the answer Krasdale food Steve Silver as
Speaker 1: president and CEO of Krasdale Foods based on White Plains
Speaker 1: and the Bronx New York. Steve, thanks so much for
Speaker 1: joining us. Tell us about Crassdale Foods. What is who
Speaker 1: are your customers and kind of what is the history
Speaker 1: of your company. Certainly, thank you, Paul, thanks for having
Speaker 1: me here. Uh quite a story. Cras Sdale Foods hundred
Speaker 1: ten year old, family owned business, now in its third generation.
Speaker 1: UM servicing, as you said, Odega's and independently owned supermarkets
Speaker 1: throughout the metropolitan area. Company for the longest period of time,
Speaker 1: up until maybe the mid seventies, strictly serviced any supermarket,
Speaker 1: any chain. If you had a convenience store, if you
Speaker 1: had a Delhi, we had an army of salespeople out
Speaker 1: in the street that would take orders and just uh
Speaker 1: and then we would follow it up and deliver you goods.
Speaker 1: I mean, we were essentially a Dreyer. Where Crasdale transformed
Speaker 1: into a full service company is in the seventies when
Speaker 1: most of your vertically integrated chains were leaving the city,
Speaker 1: leaving the urban area, heading out to suburbia looking for
Speaker 1: more golden grounds, larger formats, larger stores, and essentially abandoned
Speaker 1: the people of New York, leaving food deserts all over
Speaker 1: the place. Management at the time that's prior to me
Speaker 1: is which as you know, I've been there thirty eight years,
Speaker 1: but that was still prior to me. Had the insight
Speaker 1: and the foresight to see if they can collectively grab
Speaker 1: up many of those independently owned supermarkets and see if
Speaker 1: we can't get them to operate under common banners. And
Speaker 1: that was the birth of our Sea Town program. So
Speaker 1: while we don't own the stores, we service those stores.
Speaker 1: We give the store owner the opportunity to operate as
Speaker 1: if he was a vertically integrated chain. We provide all
Speaker 1: the specialized services of a supermarket would need from professional help,
Speaker 1: front and help, specialty help, perishables, anything that a chain
Speaker 1: would deliver it to their vertically integrated stores, we would
Speaker 1: deliver it to those supermarkets. And then obviously we would
Speaker 1: get them all to run o the common Merchandising program,
Speaker 1: so collaboratively and collectively they could get the cloud, the
Speaker 1: purchasing cloud that we could bring to bear and go
Speaker 1: to our CpG companies and essentially become a portal for
Speaker 1: them to ship goods into the city. So we when
Speaker 1: we can talk about food deserts, there is a concept.
Speaker 1: We've see it play out across the country, across the
Speaker 1: United States. How in UH poorer areas, typically it's harder
Speaker 1: to get fresh foods and and really anything other than
Speaker 1: fast food or processed foods. Highly processed foods, it tends
Speaker 1: to also be cheaper. I understand very much the social
Speaker 1: case of why it's important to get healthier foods to
Speaker 1: some of those neighborhoods. What is the business case from
Speaker 1: Crasdale's perspective about why it is beneficial to go into
Speaker 1: those areas well? Quite quite frankly, we've always been in
Speaker 1: those areas, um but opportunity. Obviously, when these chains left
Speaker 1: the city at left a vacuum, we figured out the
Speaker 1: best way to essentially and economically drive those products into
Speaker 1: those to us of those consumers could eat healthy, good
Speaker 1: meals at a reasonable price. Um. Again, that was the
Speaker 1: C Town Group. Uh. It took you know, independently owned
Speaker 1: supermarkets who were very not very skilled and not very
Speaker 1: professional in terms of their built to raise capital and
Speaker 1: go to banks and maybe operate like a story you
Speaker 1: would typically see in suburbia to to use our expertise.
Speaker 1: We would provide capital for expansion, remodeling, getting the stores
Speaker 1: to look essentially the way they do today and be
Speaker 1: you know, really shopping places to go look for a
Speaker 1: consumer and where they can get a healthy meal at
Speaker 1: a reasonable price. Uh So, it's basically opportunity. The opportunity
Speaker 1: was there, we filled the vacuum. We did it well.
Speaker 1: We did it so well that we got a lot
Speaker 1: of copy cat you know, companies coming in after the fact.
Speaker 1: And now there are no more food deserts in New York.
Speaker 1: In fact, there's probably too many supermarkets. It gets more
Speaker 1: and more difficult, you know, for not only us, but
Speaker 1: for US store owners to run profitably. It's a very
Speaker 1: low margin business. Uh. And when you're where it used
Speaker 1: to be, as you said, Lisa, one one seat down
Speaker 1: on the corner, and it might not be three or
Speaker 1: four stores on the corner on top of drug stores,
Speaker 1: convenience stores, dollars stores, big box stores. Now we have
Speaker 1: to deal with online order ring so everybody picking away.
Speaker 1: So in New York City is obviously tremendously diverse in
Speaker 1: the in terms of ethnicity population. I mean, how do
Speaker 1: you have to you have to have the knowledge of
Speaker 1: to have you know, Korean food in the Korean neighborhood,
Speaker 1: Hispanic food in Hispanic neighbor exactly right, well, exactly right.
Speaker 1: In fact, you could go five blocks away and being
Speaker 1: an entirely different neighborhood than when you just came from
Speaker 1: the beauty of our program. While we put together a
Speaker 1: base merchandising program that every store would have to run,
Speaker 1: what we did that was not common at the time
Speaker 1: was we gave those independent leone supermarkets the ability to
Speaker 1: tailor or customize that program so that they could then
Speaker 1: sell those items that they need to sell to their
Speaker 1: customers that are in that neighborhood. We were smart enough
Speaker 1: to realize that the owner of that supermarket knows his
Speaker 1: area better than us. Just use us to be able
Speaker 1: to bring the cloud of the two hundred stores that
Speaker 1: we now have working collectively to bring them the best
Speaker 1: products at the best price. And that's how it grew,
Speaker 1: and it was wildly successful. It went from just a
Speaker 1: handful of stores in the seventies to maybe two hundred
Speaker 1: stores by so successful at it, you know, we start
Speaker 1: another band is Bravo. Supermarkets are AIM supermarkets aims a
Speaker 1: little twist AIM. A lot of these independently owned supermarkets
Speaker 1: still like the independence of their own name, so we
Speaker 1: call AIM. They can operate like a de Chico is
Speaker 1: an AIM program. North Sure Foods is an AIM program,
Speaker 1: all right, So i AM become secondary then name their
Speaker 1: family name. These are royal family owned businesses like Rasdale,
Speaker 1: and we're dealing with, yeah, that they can keep their
Speaker 1: own identity. Steve Slilver, thank you so much for being here, President,
Speaker 1: Chief Operating Officer of Crasdale Foods. Very much in New
Speaker 1: York City, story near and dear to my heart, considering
Speaker 1: that's where I was born and raised. Steve Silver, thank
Speaker 1: you so much for being here. Let's turn our attention
Speaker 1: to Amazon Prime Day, not because we want to necessarily
Speaker 1: push this, but because we think it is important to
Speaker 1: sort of gauge the consumer sentiment currently as well as
Speaker 1: Amazon's overall goal going forward and and their success in
Speaker 1: getting new Prime members joining us now. Evan Clark, Deputy
Speaker 1: Managing editor for Women's Where Daily. Evan, I want to
Speaker 1: just first start by what are you expecting this Amazon
Speaker 1: Prime go around and how important is it to retailers. Well,
Speaker 1: I think it's really important for Prime and for the
Speaker 1: rest of the industry. But I think there's also kind
Speaker 1: of a little bit of context in that Amazon's really
Speaker 1: kind of packaged this in a really savvy way, but
Speaker 1: it's a sale and retail has been holding sales forever
Speaker 1: from you know, It's something that kind of comes between
Speaker 1: the fourth July Memorial Day sales and Labor Day. Evan,
Speaker 1: thank you for the real speak. By the way, let's
Speaker 1: just talk about what it actually is. A sale go on, right, So,
Speaker 1: but it's uh, you know, but all that we're we're
Speaker 1: talking about Amazon. A lot of consumers are out there.
Speaker 1: There's over a hundred million Prime members. Two thirds of
Speaker 1: them are expected to be shopping on this kind of
Speaker 1: prime to day uh event here, So they're generating. They're
Speaker 1: doing exactly what merchants always are trying to do is
Speaker 1: kind of gin up some interest in some buzz, and
Speaker 1: a lot of retailers have you know, not to be
Speaker 1: kind of outdone, have jumped on this. Amazon or eBay
Speaker 1: has a crash sale, which is kind of a reference,
Speaker 1: cheeky reference to Amazon has crashed in the past on
Speaker 1: this day. I think it's total two fifty retailers are
Speaker 1: expected to be holding some kind of Prime Day events.
Speaker 1: So there's a lot going on. But in the end, yeah,
Speaker 1: it's a it's a it's a basically a way to
Speaker 1: cut price and you know, kind of get shopper and
Speaker 1: motivate shoppers. So what do the typical Prime Day customers
Speaker 1: buy is anything different than what typically is done. Now,
Speaker 1: I think it's this it looks like we've seen in
Speaker 1: the past. I mean, the two of the big categories
Speaker 1: are electron Onyx and fashion, and fashion is an area.
Speaker 1: You know, Electronics is something that Amazon's in in its
Speaker 1: own right. There's a lot of Alexa deals, there's a
Speaker 1: lot of echo speakers and things like that. And fashion
Speaker 1: is an area where Amazon is very kind of keen
Speaker 1: to build. So that those are two of the categories
Speaker 1: to watch. One thing I'm trying to figure out is
Speaker 1: how retailers that are not affiliated with Amazon feel about
Speaker 1: all of this. In other words, they're being forced to
Speaker 1: discount things yet again during the year, and they potentially
Speaker 1: have to pay, you know, to Amazon. Bloomberg opinion Columnistsura
Speaker 1: Ovidate calculated twenty six cents on each dollar to Amazon,
Speaker 1: and that doesn't include any additional fees to pay for
Speaker 1: advertising to get better placement in the search results. How
Speaker 1: what's their what's their sense of this type of day? Well,
Speaker 1: I think, you know, retailers don't need again, they don't
Speaker 1: need a whole lot of pressure to cut price. It's
Speaker 1: kind of what they do. Um. But Amazon certainly is
Speaker 1: is a is an immense competitive force on the online sphere,
Speaker 1: and retailers have to answer this, so you know, they're
Speaker 1: whether or not they want to, they they kind of
Speaker 1: really have to jump in. And I think it's also
Speaker 1: a chance to you know, it might be a little
Speaker 1: bit of glee here in a certain sense, and that
Speaker 1: here's an opportunity for retailers to try to kind of
Speaker 1: not let Amazon just run away with the day. So
Speaker 1: they're trying to you know that they on on their own.
Speaker 1: Individual retailers really have a difficulty kind of standing up
Speaker 1: against Amazon. But if you have Amazon having their big
Speaker 1: sale and two fifty retailers are trying to counter them,
Speaker 1: there's actually a little bit of juice there. So I
Speaker 1: think it's all of this just gets the conspetitive spirit firing.
Speaker 1: So Evan, I saw yesterday that there's actually a small
Speaker 1: strike at one of the filming centers for Amazon. You
Speaker 1: can tell us about is anything for Amazon to worry about? Well, yeah,
Speaker 1: I think Amazon has in the past been criticized for
Speaker 1: how it's treated some of its workers and and and
Speaker 1: and you know, there was a big expose a few
Speaker 1: years back, and since then, I think they've really tried
Speaker 1: to rehab their image to uh to an extent, and
Speaker 1: they've focusing on the um and they've used their their might.
Speaker 1: They're kind of financial might going to minimum wage of
Speaker 1: fifteen an hour. So it really that's kind of what's
Speaker 1: going on. I think it's it's you know, Amazon's big
Speaker 1: you know, namesake day, so people who are trying to
Speaker 1: you know, raise complaints about the company or the working
Speaker 1: conditions kind of use that as the moment to hit.
Speaker 1: So it's Amazon's big day, but it's also kind of
Speaker 1: Amazon pile one day, right, a big day for Amazon.
Speaker 1: Looking at I'm seeing some numbers, you know, five to
Speaker 1: six billion dollars of goods bought and sold, So being
Speaker 1: bought by consumers on Amazon during Prime days just extraordinary.
Speaker 1: So I'm not one of them, are you, Lisa? I
Speaker 1: did buy a gift, Yeah, I figured why not? Right? Well,
Speaker 1: Tom was scrolling. Tom was scrolling across it all this
Speaker 1: morning finding great deals. Seriously, you're you're you're outing him,
Speaker 1: you're basically outing what he was doing while he was
Speaker 1: on radio. He was actually scrolling through deals on its exactly.
Speaker 1: We could find we could find some scooter deals for
Speaker 1: you could, yeah, and helmets because We're gonna be safe.
Speaker 1: Evan Clark, Deputy Managing editor, Women's World Barely. Thank you
Speaker 1: so much for joining us again. A big day for Amazon.
Speaker 1: It's interesting these big days. It's it's is what it is.
Speaker 1: It's a sale, and it's a sale in the summer
Speaker 1: to drive traffic. It's also a way to I think,
Speaker 1: really attract more prime members. And we know the prime
Speaker 1: members spend so much more on Amazon than non prime members,
Speaker 1: and it's just good business, so they continue to drive
Speaker 1: the prime membership. Well. It is bank earnings day today,
Speaker 1: JP Morgan, Goldman, Sachs, Wells Fargo, all reporting earnings to
Speaker 1: get the latest. We welcome y'allman On Iran, senior finance
Speaker 1: writer for Bloomberg News, joining us here in our Bloomberg
Speaker 1: Interactive Broker studio. Yaman, thanks so much for joining us.
Speaker 1: I know you're busy crunching all these numbers, getting out
Speaker 1: your notes on these companies. What's your key takeaways maybe
Speaker 1: from some of these big investment banks reporting today? Um,
Speaker 1: you know, I think investors are are kind of happy
Speaker 1: with Goldman's numbers. Um, although and that's probably because their
Speaker 1: equities trading was was up while everybody else's was down.
Speaker 1: Fixed income is down across the companies, but that was
Speaker 1: sort of more expected, you know, fixed income going down,
Speaker 1: but equities was also down at City and JP Morgan,
Speaker 1: while Goldman held up on that and trading is is
Speaker 1: so crucial for these guys that that that that's really
Speaker 1: the bottom line. Everybody looks at UM the universal banks
Speaker 1: that also do a lot of lending, and you know
Speaker 1: they take deposits like JP Morgan, City and and Wells Um.
Speaker 1: There we see net income nets. Interest income is still rising,
Speaker 1: which is amazing because interest rates are dropping again. But
Speaker 1: they're writing more loans, right right, I mean they are,
Speaker 1: so the volume is growing exactly. You you got, you
Speaker 1: hit it on the head. They're able to expand how
Speaker 1: much they land even though their margin strengths because rates
Speaker 1: are dropping. But but that's great because you know, for
Speaker 1: the rest of the developed world that's something they can't
Speaker 1: really they just don't have the margins and they don't
Speaker 1: have the growth. So that's what it's they're hurting. So
Speaker 1: the story that I gather from JP Morgan, Bank of America,
Speaker 1: City Group, and Wells Fargo is that the consumer is
Speaker 1: very strong. You're seeing a very robust deliverance there from
Speaker 1: those units, and that investment banking is lagging behind that
Speaker 1: They're just there isn't the type of fee revenue that
Speaker 1: there has been, at least the fee revenue growth that
Speaker 1: there has been in the past. I'm just wondering did
Speaker 1: Goldman Sacks given any indication of why they are not
Speaker 1: in that crew, because they have come out and actually
Speaker 1: beat on equities trading, and they beat on investment banking revenue. Um,
Speaker 1: you know they do. But even while beating, you know,
Speaker 1: you look at investment banking revenue for Goldment it's down.
Speaker 1: So so investment banking is not doing great. Um. And
Speaker 1: this has been a few quarters now. It's not just disquarter.
Speaker 1: Really you look at the last couple of quarters. The
Speaker 1: consumer is is still kicking strong, but but the trading
Speaker 1: investmentking side of the business is really slowed down. Um.
Speaker 1: It's still general and great revenues, but they're they're lower
Speaker 1: when you look at last year's quarters similar quarters. So
Speaker 1: so that's across the board. UM. Goldman had an incredible
Speaker 1: wonderful jump in its uh on Investing and Lending UH division,
Speaker 1: which is their their their own investments UM. Like merchant banking,
Speaker 1: I mean, you know, and and the companies their private
Speaker 1: equity where they buy the companies investing companies and then
Speaker 1: then they I p o them. So they had several
Speaker 1: I pos I guess during the quarter and and monetize
Speaker 1: those those uh increases. So so they did great on that,
Speaker 1: but the other sides of the businesses are not doing well. Um.
Speaker 1: They talked a lot during the call at Goldman about
Speaker 1: Marcus and and their consumer lending as well, because they're
Speaker 1: trying to make more money on there and and there
Speaker 1: they are probably able to, but it for Goldman that's
Speaker 1: still such a small amount that it doesn't really showing
Speaker 1: their earnings. But their you know, their goal is to
Speaker 1: really bring consumer lending and consumer deposits to be a
Speaker 1: bigger revenue item for them. Is there a sense that
Speaker 1: we've had, you know, several quarters, you know, maybe even longer,
Speaker 1: I think longer where the capital market side of the business,
Speaker 1: that whether it's the equity trading the fixed income trading
Speaker 1: sides of the business, you know, is there an expectation
Speaker 1: that those businesses are going are ever going to become
Speaker 1: meaningful profit drivers in the future, or they're just as
Speaker 1: a regulatory environment changed so much that you know, it's
Speaker 1: just not worth the capital to really drive those businesses.
Speaker 1: For the U S banks, they still make good money
Speaker 1: on that side. Europeans are having second thoughts about that.
Speaker 1: That's why which really UH going down um and not
Speaker 1: just just even b MP party which is now like
Speaker 1: the stronglooking European bank that's trying to take away some
Speaker 1: of Dot's businesses as does shrinks. They've slowed down in
Speaker 1: some areas of capital markets as well. Because for the
Speaker 1: Europeans whose capital markets are not that strong and they
Speaker 1: have to be really in the US to get more
Speaker 1: volume and more more value for their buck um, they're
Speaker 1: not It's not great UH proposal for them. But for
Speaker 1: US banks they still make a lot of money. They'll
Speaker 1: stay in and they'll keep grabbing more markets share from
Speaker 1: from the European peers. Did we hear anything on the
Speaker 1: calls or elsewhere about how much business some of the
Speaker 1: US banks are getting from Deutsche Bank? Vaguely people were
Speaker 1: asked about it and they all said, well, we do
Speaker 1: expect to, but nobody has really said, you know, this
Speaker 1: has been a boon. We're getting everything, you know. I'm
Speaker 1: sure they're all and you know, today we have a
Speaker 1: story on the Bloomberg terminal about about dotsches hedge fund
Speaker 1: clients already deserting before it could be transferred to two
Speaker 1: b MP part but which is an agreement that to
Speaker 1: have UM. So they're all probably going fleeing, but they
Speaker 1: all go in different directions. So it's not going to
Speaker 1: one firm. They're all going to go to different firms.
Speaker 1: And though they probably have relations with those firms anyway.
Speaker 1: Typically one fund doesn't work with just one broker firm UM.
Speaker 1: They have multiple brokers, so they probably cut one broker
Speaker 1: and and increase or stay with three brokers that they
Speaker 1: already had. So spent a minute on Wells Fargo. They've
Speaker 1: got a little bit of a problem there that they
Speaker 1: don't have a CEO. Did they have any new news
Speaker 1: today about there? They have a lot of problems, not
Speaker 1: just not having I mean their biggest when you look
Speaker 1: at the numbers which which which are announced today and
Speaker 1: and those several quarters that that I've looked at their numbers,
Speaker 1: their problem is that they cannot grow. So when you
Speaker 1: can't grow, when you have a cap on your growth,
Speaker 1: you have, it's very hard to really do, you know,
Speaker 1: make more money. You cannot make more money when you
Speaker 1: can't grow unless the margins keep expanding, and you can't
Speaker 1: expand margins when rates are falling. So initially they did
Speaker 1: manage to expand their margins a little bit by cutting
Speaker 1: costs um and squeezing more out of of the loans
Speaker 1: they were making. But now there you know, rates are falling,
Speaker 1: the margins are shrinking, and they can't grow the volume
Speaker 1: because they're they're capped with with their asset and and
Speaker 1: and balance sheet size, so so it's a problem for them.
Speaker 1: So their numbers are always restricted and they don't have leadership,
Speaker 1: and it's a tough sounds like a great job for me.
Speaker 1: Go ahead, feedba yelloman owner on, Actually please don't. I
Speaker 1: would miss you too much. Y'elloman owner on, a senior
Speaker 1: finance writer for Bloomberg. Thank you so much for being
Speaker 1: here with us. Thanks for listening to the Bloomberg P
Speaker 1: and L podcast. You can subscribe and listen to interviews
Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. I'm
Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa
Speaker 1: abram Woods. I'm on Twitter at Lisa abram woits one
Speaker 1: before the podcast. You can always catch us worldwide on
Speaker 1: Bloomberg Radio