WEBVTT - Facebook Takes Heat From Skeptical Senators on Libra 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel podcast and Paul swing you. 0:00:05.360 --> 0:00:07.760 Along with my co host Lisa Brahmas. Each day we 0:00:07.880 --> 0:00:10.399 bring you the most noteworthy and useful interviews for you 0:00:10.520 --> 0:00:12.640 and your money, whether at the grocery store or the 0:00:12.640 --> 0:00:15.960 trading floor. Find a Bloomberg Penil podcast on Apple podcast 0:00:16.120 --> 0:00:18.000 or wherever you listen to podcasts, as well as that 0:00:18.079 --> 0:00:23.360 Bloomberg dot Com. Joining us now is Leonel Laurant. He 0:00:23.480 --> 0:00:27.600 covers He covers all things for us from Bloomberg Opinion. 0:00:28.080 --> 0:00:30.720 Uh and Leonel, can we just start with what we're 0:00:30.760 --> 0:00:35.880 expecting to learn from these hearings? Why are they important? Well, 0:00:35.920 --> 0:00:40.360 I think the opening comments testimony from David Marcus kind 0:00:40.400 --> 0:00:45.120 of lays out already what the important parts are, I mean, 0:00:45.240 --> 0:00:48.520 from from the from the regulatory political point of view. 0:00:48.880 --> 0:00:51.960 They clearly have to answer or push on two questions, 0:00:51.960 --> 0:00:54.840 which is, where does the day to go? How is 0:00:54.880 --> 0:00:57.800 it really kept at our length from Facebook? And what 0:00:58.080 --> 0:01:00.800 does libor mead for financial stability given that it's going 0:01:00.800 --> 0:01:04.520 to be investing in big currencies like the dollar, like 0:01:04.600 --> 0:01:07.200 the euro. And I think that's already the opening testimony 0:01:07.240 --> 0:01:09.360 from David Marcus, who is trying to tell everyone looks, 0:01:09.920 --> 0:01:11.800 don't worry. We're not even going to move. We're not 0:01:11.840 --> 0:01:14.400 going to budge on this until everyone is happy, and 0:01:14.440 --> 0:01:18.199 we're going to want to be regulated to an almost 0:01:18.240 --> 0:01:20.640 extreme level before this even gets off the ground. So 0:01:20.680 --> 0:01:22.200 it's going to be a lot of kind of soothing 0:01:22.280 --> 0:01:26.120 language from from Facebook on this and hopefully more transparency. 0:01:26.319 --> 0:01:28.440 So you know, I'm glad you brought up to kind 0:01:28.440 --> 0:01:31.319 of the type that the statement from Mr Marcus, because 0:01:31.319 --> 0:01:34.680 it was extremely conciliatory. I would say, in terms of 0:01:34.720 --> 0:01:36.680 as you mentioned that they will not move until they 0:01:36.680 --> 0:01:40.959 get full regulatory approval. What is this sense within kind 0:01:40.959 --> 0:01:44.960 of the technology world of financial regulatory world whether Facebook 0:01:44.959 --> 0:01:49.840 can ever get approval for this type of currency. So 0:01:50.080 --> 0:01:53.160 I think that's what we're seeing now is primarily a 0:01:53.280 --> 0:01:58.840 political reaction. It is as though came with Analystica was happening. Again. 0:01:59.520 --> 0:02:03.320 This is from the lawmaker Congress side of things. I 0:02:03.360 --> 0:02:06.240 think on the on the regulation front, I think that 0:02:06.280 --> 0:02:08.320 there is actually a lot of debate, a lot of 0:02:08.360 --> 0:02:11.200 kind of open debate about whether there should be there 0:02:11.200 --> 0:02:14.800 should be a trigger for say, digital currencies to be 0:02:14.800 --> 0:02:18.040 shue directly by the central bank. I think that regulators 0:02:18.080 --> 0:02:20.560 like Mark Karney, for instance, have been more open than 0:02:20.639 --> 0:02:22.639 others and saying why don't we just bring them into 0:02:22.639 --> 0:02:24.639 our tent and keep a really close eye on them 0:02:24.680 --> 0:02:27.799 as the condition for letting them launch. I have yet 0:02:27.840 --> 0:02:30.600 to hear anyone say let's band this, So I think 0:02:30.639 --> 0:02:34.239 that a lot of this reaction is primarily about politically 0:02:34.840 --> 0:02:38.520 keeping a check on Facebook's power, and not because everyone 0:02:38.600 --> 0:02:40.639 has suddenly agreed that this should never see the light 0:02:40.639 --> 0:02:45.800 of day. You know, I'm trying to figure out what 0:02:45.800 --> 0:02:48.720 what exactly liberal is. Do we have a sense of 0:02:48.760 --> 0:02:52.120 what exactly it is or is it more concept than 0:02:52.200 --> 0:02:56.520 even a firmed up reality or potential of reality in 0:02:56.520 --> 0:03:00.680 the near future. So I think Facebook would would like 0:03:00.760 --> 0:03:04.480 it to be seen as money, electronic money. This is 0:03:04.520 --> 0:03:07.680 why they're saying Libra is cash. It's why they're saying 0:03:07.760 --> 0:03:13.160 they will be regulated as a money services business. But 0:03:13.560 --> 0:03:16.560 they how can I put this? May be disappointed to 0:03:16.560 --> 0:03:19.799 find that regulators don't agree with the definition, because remember, 0:03:19.840 --> 0:03:22.799 on the cryptocurrency France, there were plenty of discussions like 0:03:22.840 --> 0:03:27.160 whether Bitcoin and ethereum were securities or commodities, and Libra 0:03:27.280 --> 0:03:30.200 may endure being viewed as an exchange traded fund because 0:03:30.720 --> 0:03:34.160 theoretically or conceptually, you can see how someone is putting 0:03:34.400 --> 0:03:38.200 money into Libra and receiving in exchange a slice of 0:03:38.320 --> 0:03:41.640 something that is investing in currencies, in testing in assets. 0:03:41.680 --> 0:03:44.680 So there's a very good argument to say it's it's 0:03:44.680 --> 0:03:47.480 an ETS. So there's a whole debate about what it 0:03:47.520 --> 0:03:50.560 should be that may not go Facebook's way. Leon. I 0:03:50.640 --> 0:03:53.880 know some Facebook investors have been asking the basic question 0:03:53.960 --> 0:03:57.760 of why why would Facebook, you know, attempt to get 0:03:57.800 --> 0:04:00.800 into a business that is so highly regulated, not just 0:04:00.840 --> 0:04:03.480 in the US but around the world, particularly given a 0:04:03.960 --> 0:04:07.360 time when there are serious concerns being raised about some 0:04:07.440 --> 0:04:10.480 of their core business the privacy and data security and 0:04:10.520 --> 0:04:14.360 so on. Well, it's interesting because in it's very easy 0:04:14.400 --> 0:04:16.520 to say in hindsight, but I remember when Libra was 0:04:16.560 --> 0:04:18.839 first announced, there are plenty of self had analysts saying 0:04:18.839 --> 0:04:21.880 this is fantastic, It's a whole new revenue stream. It's 0:04:21.640 --> 0:04:24.919 the question is almost why this particular structure with the 0:04:24.960 --> 0:04:27.680 crypto side of things. Because Facebook has tried several times 0:04:27.680 --> 0:04:29.800 to get a payments business off the ground, you can 0:04:29.839 --> 0:04:33.000 see why. It's a business model of ninety percent advertising 0:04:33.080 --> 0:04:36.119 is way too concentrated and could do with an actual 0:04:36.160 --> 0:04:38.159 revenue stream where people pay for things on Facebook. That 0:04:38.200 --> 0:04:41.320 makes complete sense, but because their previous bids have flopped, 0:04:41.360 --> 0:04:44.200 they clearly entrusted David Marcus with finding a new way 0:04:44.240 --> 0:04:47.279 to do it a successful way. He went the cryptocurrency route. 0:04:47.320 --> 0:04:49.159 And I think that is a big question, that is, 0:04:49.279 --> 0:04:52.160 why why go down this blockchain route? Why go down 0:04:52.160 --> 0:04:55.599 this attempt at being decentralized and trying to please all 0:04:55.640 --> 0:05:00.080 types of people, including blockchain developers and bitcoin buyers. That 0:05:00.080 --> 0:05:03.599 that's a declution question. Lena Laurent, thank you so much 0:05:03.640 --> 0:05:21.080 for being with us calumnist for Blueberg Opinion. Well, the 0:05:21.120 --> 0:05:25.000 grocery business clearly has historically been a very competitive business, 0:05:25.160 --> 0:05:29.440 very tough, tight margins, particularly in New York City with 0:05:29.480 --> 0:05:32.360 all of the bodegas and independent groceries. The question I've 0:05:32.360 --> 0:05:37.120 always had is who supplies these small bodegas and independent grocers. 0:05:37.160 --> 0:05:40.560 Well we found the answer Krasdale food Steve Silver as 0:05:40.640 --> 0:05:43.719 president and CEO of Krasdale Foods based on White Plains 0:05:43.800 --> 0:05:45.919 and the Bronx New York. Steve, thanks so much for 0:05:46.000 --> 0:05:50.960 joining us. Tell us about Crassdale Foods. What is who 0:05:50.960 --> 0:05:54.200 are your customers and kind of what is the history 0:05:54.240 --> 0:05:57.640 of your company. Certainly, thank you, Paul, thanks for having 0:05:57.640 --> 0:06:01.000 me here. Uh quite a story. Cras Sdale Foods hundred 0:06:01.000 --> 0:06:04.120 ten year old, family owned business, now in its third generation. 0:06:05.040 --> 0:06:10.640 UM servicing, as you said, Odega's and independently owned supermarkets 0:06:10.640 --> 0:06:15.200 throughout the metropolitan area. Company for the longest period of time, 0:06:15.640 --> 0:06:19.640 up until maybe the mid seventies, strictly serviced any supermarket, 0:06:19.760 --> 0:06:22.400 any chain. If you had a convenience store, if you 0:06:22.440 --> 0:06:25.719 had a Delhi, we had an army of salespeople out 0:06:25.720 --> 0:06:28.560 in the street that would take orders and just uh 0:06:28.680 --> 0:06:30.680 and then we would follow it up and deliver you goods. 0:06:30.680 --> 0:06:35.320 I mean, we were essentially a Dreyer. Where Crasdale transformed 0:06:35.360 --> 0:06:38.520 into a full service company is in the seventies when 0:06:38.560 --> 0:06:42.520 most of your vertically integrated chains were leaving the city, 0:06:42.920 --> 0:06:46.400 leaving the urban area, heading out to suburbia looking for 0:06:46.520 --> 0:06:51.600 more golden grounds, larger formats, larger stores, and essentially abandoned 0:06:53.000 --> 0:06:56.320 the people of New York, leaving food deserts all over 0:06:56.360 --> 0:06:59.680 the place. Management at the time that's prior to me 0:06:59.800 --> 0:07:01.719 is which as you know, I've been there thirty eight years, 0:07:01.760 --> 0:07:04.080 but that was still prior to me. Had the insight 0:07:04.160 --> 0:07:08.160 and the foresight to see if they can collectively grab 0:07:08.240 --> 0:07:11.680 up many of those independently owned supermarkets and see if 0:07:11.720 --> 0:07:14.720 we can't get them to operate under common banners. And 0:07:14.800 --> 0:07:17.680 that was the birth of our Sea Town program. So 0:07:17.760 --> 0:07:20.640 while we don't own the stores, we service those stores. 0:07:21.160 --> 0:07:24.680 We give the store owner the opportunity to operate as 0:07:24.720 --> 0:07:27.880 if he was a vertically integrated chain. We provide all 0:07:28.320 --> 0:07:31.880 the specialized services of a supermarket would need from professional help, 0:07:31.920 --> 0:07:36.160 front and help, specialty help, perishables, anything that a chain 0:07:36.200 --> 0:07:39.120 would deliver it to their vertically integrated stores, we would 0:07:39.120 --> 0:07:42.320 deliver it to those supermarkets. And then obviously we would 0:07:42.360 --> 0:07:46.320 get them all to run o the common Merchandising program, 0:07:46.360 --> 0:07:49.680 so collaboratively and collectively they could get the cloud, the 0:07:49.720 --> 0:07:51.720 purchasing cloud that we could bring to bear and go 0:07:51.760 --> 0:07:55.080 to our CpG companies and essentially become a portal for 0:07:55.120 --> 0:07:57.440 them to ship goods into the city. So we when 0:07:57.440 --> 0:08:00.240 we can talk about food deserts, there is a concept. 0:08:00.520 --> 0:08:03.200 We've see it play out across the country, across the 0:08:03.280 --> 0:08:07.720 United States. How in UH poorer areas, typically it's harder 0:08:07.760 --> 0:08:10.760 to get fresh foods and and really anything other than 0:08:10.840 --> 0:08:13.600 fast food or processed foods. Highly processed foods, it tends 0:08:13.600 --> 0:08:16.880 to also be cheaper. I understand very much the social 0:08:16.920 --> 0:08:20.240 case of why it's important to get healthier foods to 0:08:20.360 --> 0:08:24.080 some of those neighborhoods. What is the business case from 0:08:24.160 --> 0:08:28.240 Crasdale's perspective about why it is beneficial to go into 0:08:28.320 --> 0:08:31.720 those areas well? Quite quite frankly, we've always been in 0:08:31.760 --> 0:08:36.440 those areas, um but opportunity. Obviously, when these chains left 0:08:36.440 --> 0:08:38.840 the city at left a vacuum, we figured out the 0:08:38.840 --> 0:08:44.240 best way to essentially and economically drive those products into 0:08:44.240 --> 0:08:47.600 those to us of those consumers could eat healthy, good 0:08:47.600 --> 0:08:51.840 meals at a reasonable price. Um. Again, that was the 0:08:51.840 --> 0:08:55.600 C Town Group. Uh. It took you know, independently owned 0:08:55.600 --> 0:08:58.480 supermarkets who were very not very skilled and not very 0:08:58.480 --> 0:09:01.720 professional in terms of their built to raise capital and 0:09:01.760 --> 0:09:04.880 go to banks and maybe operate like a story you 0:09:04.920 --> 0:09:08.920 would typically see in suburbia to to use our expertise. 0:09:09.040 --> 0:09:12.320 We would provide capital for expansion, remodeling, getting the stores 0:09:12.360 --> 0:09:14.720 to look essentially the way they do today and be 0:09:15.200 --> 0:09:18.000 you know, really shopping places to go look for a 0:09:18.040 --> 0:09:20.120 consumer and where they can get a healthy meal at 0:09:20.160 --> 0:09:24.120 a reasonable price. Uh So, it's basically opportunity. The opportunity 0:09:24.200 --> 0:09:26.360 was there, we filled the vacuum. We did it well. 0:09:26.920 --> 0:09:29.160 We did it so well that we got a lot 0:09:29.200 --> 0:09:32.920 of copy cat you know, companies coming in after the fact. 0:09:32.920 --> 0:09:35.000 And now there are no more food deserts in New York. 0:09:35.280 --> 0:09:38.040 In fact, there's probably too many supermarkets. It gets more 0:09:38.080 --> 0:09:40.440 and more difficult, you know, for not only us, but 0:09:40.520 --> 0:09:42.719 for US store owners to run profitably. It's a very 0:09:42.760 --> 0:09:46.160 low margin business. Uh. And when you're where it used 0:09:46.200 --> 0:09:48.640 to be, as you said, Lisa, one one seat down 0:09:48.640 --> 0:09:50.240 on the corner, and it might not be three or 0:09:50.280 --> 0:09:54.280 four stores on the corner on top of drug stores, 0:09:54.360 --> 0:09:58.800 convenience stores, dollars stores, big box stores. Now we have 0:09:58.880 --> 0:10:02.000 to deal with online order ring so everybody picking away. 0:10:03.120 --> 0:10:05.520 So in New York City is obviously tremendously diverse in 0:10:05.559 --> 0:10:08.080 the in terms of ethnicity population. I mean, how do 0:10:08.120 --> 0:10:09.640 you have to you have to have the knowledge of 0:10:09.760 --> 0:10:11.880 to have you know, Korean food in the Korean neighborhood, 0:10:11.920 --> 0:10:15.280 Hispanic food in Hispanic neighbor exactly right, well, exactly right. 0:10:15.320 --> 0:10:17.040 In fact, you could go five blocks away and being 0:10:17.040 --> 0:10:20.199 an entirely different neighborhood than when you just came from 0:10:20.280 --> 0:10:22.600 the beauty of our program. While we put together a 0:10:22.640 --> 0:10:26.240 base merchandising program that every store would have to run, 0:10:26.880 --> 0:10:29.000 what we did that was not common at the time 0:10:29.080 --> 0:10:32.200 was we gave those independent leone supermarkets the ability to 0:10:32.320 --> 0:10:36.920 tailor or customize that program so that they could then 0:10:37.000 --> 0:10:39.200 sell those items that they need to sell to their 0:10:39.240 --> 0:10:41.800 customers that are in that neighborhood. We were smart enough 0:10:41.800 --> 0:10:44.800 to realize that the owner of that supermarket knows his 0:10:44.880 --> 0:10:47.400 area better than us. Just use us to be able 0:10:47.440 --> 0:10:50.080 to bring the cloud of the two hundred stores that 0:10:50.080 --> 0:10:52.560 we now have working collectively to bring them the best 0:10:52.600 --> 0:10:55.320 products at the best price. And that's how it grew, 0:10:55.720 --> 0:10:58.040 and it was wildly successful. It went from just a 0:10:58.080 --> 0:11:01.080 handful of stores in the seventies to maybe two hundred 0:11:01.160 --> 0:11:05.199 stores by so successful at it, you know, we start 0:11:05.200 --> 0:11:09.400 another band is Bravo. Supermarkets are AIM supermarkets aims a 0:11:09.440 --> 0:11:13.520 little twist AIM. A lot of these independently owned supermarkets 0:11:13.520 --> 0:11:17.040 still like the independence of their own name, so we 0:11:17.160 --> 0:11:19.720 call AIM. They can operate like a de Chico is 0:11:19.720 --> 0:11:23.040 an AIM program. North Sure Foods is an AIM program, 0:11:23.040 --> 0:11:25.520 all right, So i AM become secondary then name their 0:11:25.640 --> 0:11:28.640 family name. These are royal family owned businesses like Rasdale, 0:11:28.640 --> 0:11:31.080 and we're dealing with, yeah, that they can keep their 0:11:31.480 --> 0:11:34.360 own identity. Steve Slilver, thank you so much for being here, President, 0:11:34.400 --> 0:11:38.160 Chief Operating Officer of Crasdale Foods. Very much in New 0:11:38.240 --> 0:11:40.880 York City, story near and dear to my heart, considering 0:11:40.920 --> 0:11:43.480 that's where I was born and raised. Steve Silver, thank 0:11:43.520 --> 0:12:01.199 you so much for being here. Let's turn our attention 0:12:01.240 --> 0:12:05.280 to Amazon Prime Day, not because we want to necessarily 0:12:05.320 --> 0:12:07.320 push this, but because we think it is important to 0:12:07.320 --> 0:12:11.160 sort of gauge the consumer sentiment currently as well as 0:12:11.280 --> 0:12:15.400 Amazon's overall goal going forward and and their success in 0:12:15.440 --> 0:12:18.360 getting new Prime members joining us now. Evan Clark, Deputy 0:12:18.360 --> 0:12:21.560 Managing editor for Women's Where Daily. Evan, I want to 0:12:21.600 --> 0:12:25.120 just first start by what are you expecting this Amazon 0:12:25.240 --> 0:12:29.000 Prime go around and how important is it to retailers. Well, 0:12:29.040 --> 0:12:31.400 I think it's really important for Prime and for the 0:12:31.440 --> 0:12:33.440 rest of the industry. But I think there's also kind 0:12:33.480 --> 0:12:36.440 of a little bit of context in that Amazon's really 0:12:36.520 --> 0:12:39.240 kind of packaged this in a really savvy way, but 0:12:39.360 --> 0:12:42.560 it's a sale and retail has been holding sales forever 0:12:42.679 --> 0:12:44.600 from you know, It's something that kind of comes between 0:12:44.640 --> 0:12:49.319 the fourth July Memorial Day sales and Labor Day. Evan, 0:12:49.360 --> 0:12:51.600 thank you for the real speak. By the way, let's 0:12:51.640 --> 0:12:55.320 just talk about what it actually is. A sale go on, right, So, 0:12:55.800 --> 0:12:58.439 but it's uh, you know, but all that we're we're 0:12:58.480 --> 0:13:01.360 talking about Amazon. A lot of consumers are out there. 0:13:01.360 --> 0:13:04.320 There's over a hundred million Prime members. Two thirds of 0:13:04.360 --> 0:13:06.840 them are expected to be shopping on this kind of 0:13:06.920 --> 0:13:11.640 prime to day uh event here, So they're generating. They're 0:13:11.679 --> 0:13:14.360 doing exactly what merchants always are trying to do is 0:13:14.520 --> 0:13:17.640 kind of gin up some interest in some buzz, and 0:13:17.679 --> 0:13:20.559 a lot of retailers have you know, not to be 0:13:20.679 --> 0:13:24.200 kind of outdone, have jumped on this. Amazon or eBay 0:13:24.440 --> 0:13:28.040 has a crash sale, which is kind of a reference, 0:13:28.160 --> 0:13:31.400 cheeky reference to Amazon has crashed in the past on 0:13:31.480 --> 0:13:35.040 this day. I think it's total two fifty retailers are 0:13:35.040 --> 0:13:37.800 expected to be holding some kind of Prime Day events. 0:13:37.840 --> 0:13:39.800 So there's a lot going on. But in the end, yeah, 0:13:39.920 --> 0:13:42.840 it's a it's a it's a basically a way to 0:13:42.880 --> 0:13:46.040 cut price and you know, kind of get shopper and 0:13:46.120 --> 0:13:50.439 motivate shoppers. So what do the typical Prime Day customers 0:13:50.520 --> 0:13:54.040 buy is anything different than what typically is done. Now, 0:13:54.080 --> 0:13:57.040 I think it's this it looks like we've seen in 0:13:57.080 --> 0:13:59.400 the past. I mean, the two of the big categories 0:13:59.400 --> 0:14:03.000 are electron Onyx and fashion, and fashion is an area. 0:14:03.360 --> 0:14:07.160 You know, Electronics is something that Amazon's in in its 0:14:07.200 --> 0:14:09.480 own right. There's a lot of Alexa deals, there's a 0:14:09.559 --> 0:14:12.880 lot of echo speakers and things like that. And fashion 0:14:12.960 --> 0:14:15.080 is an area where Amazon is very kind of keen 0:14:15.200 --> 0:14:17.600 to build. So that those are two of the categories 0:14:17.600 --> 0:14:20.760 to watch. One thing I'm trying to figure out is 0:14:20.960 --> 0:14:24.200 how retailers that are not affiliated with Amazon feel about 0:14:24.200 --> 0:14:26.400 all of this. In other words, they're being forced to 0:14:26.440 --> 0:14:30.560 discount things yet again during the year, and they potentially 0:14:30.600 --> 0:14:35.240 have to pay, you know, to Amazon. Bloomberg opinion Columnistsura 0:14:35.320 --> 0:14:39.200 Ovidate calculated twenty six cents on each dollar to Amazon, 0:14:39.280 --> 0:14:42.320 and that doesn't include any additional fees to pay for 0:14:42.400 --> 0:14:45.400 advertising to get better placement in the search results. How 0:14:45.480 --> 0:14:49.000 what's their what's their sense of this type of day? Well, 0:14:49.040 --> 0:14:52.000 I think, you know, retailers don't need again, they don't 0:14:52.000 --> 0:14:54.920 need a whole lot of pressure to cut price. It's 0:14:54.960 --> 0:15:01.200 kind of what they do. Um. But Amazon certainly is 0:15:01.480 --> 0:15:05.560 is a is an immense competitive force on the online sphere, 0:15:06.200 --> 0:15:09.760 and retailers have to answer this, so you know, they're 0:15:09.920 --> 0:15:11.960 whether or not they want to, they they kind of 0:15:11.960 --> 0:15:14.080 really have to jump in. And I think it's also 0:15:14.120 --> 0:15:17.280 a chance to you know, it might be a little 0:15:17.280 --> 0:15:19.520 bit of glee here in a certain sense, and that 0:15:19.640 --> 0:15:23.080 here's an opportunity for retailers to try to kind of 0:15:23.880 --> 0:15:26.320 not let Amazon just run away with the day. So 0:15:26.360 --> 0:15:29.680 they're trying to you know that they on on their own. 0:15:29.840 --> 0:15:33.120 Individual retailers really have a difficulty kind of standing up 0:15:33.160 --> 0:15:36.200 against Amazon. But if you have Amazon having their big 0:15:36.240 --> 0:15:39.760 sale and two fifty retailers are trying to counter them, 0:15:39.840 --> 0:15:41.800 there's actually a little bit of juice there. So I 0:15:41.800 --> 0:15:45.280 think it's all of this just gets the conspetitive spirit firing. 0:15:45.600 --> 0:15:48.840 So Evan, I saw yesterday that there's actually a small 0:15:49.000 --> 0:15:51.920 strike at one of the filming centers for Amazon. You 0:15:51.960 --> 0:15:55.760 can tell us about is anything for Amazon to worry about? Well, yeah, 0:15:55.840 --> 0:15:59.320 I think Amazon has in the past been criticized for 0:15:59.800 --> 0:16:02.720 how it's treated some of its workers and and and 0:16:02.720 --> 0:16:05.880 and you know, there was a big expose a few 0:16:05.960 --> 0:16:08.840 years back, and since then, I think they've really tried 0:16:08.880 --> 0:16:13.360 to rehab their image to uh to an extent, and 0:16:13.400 --> 0:16:17.040 they've focusing on the um and they've used their their might. 0:16:17.480 --> 0:16:21.240 They're kind of financial might going to minimum wage of 0:16:21.280 --> 0:16:25.200 fifteen an hour. So it really that's kind of what's 0:16:25.240 --> 0:16:28.400 going on. I think it's it's you know, Amazon's big 0:16:28.440 --> 0:16:32.200 you know, namesake day, so people who are trying to 0:16:32.440 --> 0:16:36.120 you know, raise complaints about the company or the working 0:16:36.120 --> 0:16:38.320 conditions kind of use that as the moment to hit. 0:16:38.400 --> 0:16:40.800 So it's Amazon's big day, but it's also kind of 0:16:40.800 --> 0:16:44.600 Amazon pile one day, right, a big day for Amazon. 0:16:44.680 --> 0:16:47.120 Looking at I'm seeing some numbers, you know, five to 0:16:47.200 --> 0:16:50.760 six billion dollars of goods bought and sold, So being 0:16:50.800 --> 0:16:53.760 bought by consumers on Amazon during Prime days just extraordinary. 0:16:53.840 --> 0:16:56.560 So I'm not one of them, are you, Lisa? I 0:16:57.000 --> 0:17:01.640 did buy a gift, Yeah, I figured why not? Right? Well, 0:17:01.680 --> 0:17:04.280 Tom was scrolling. Tom was scrolling across it all this 0:17:04.320 --> 0:17:07.320 morning finding great deals. Seriously, you're you're you're outing him, 0:17:07.440 --> 0:17:10.119 you're basically outing what he was doing while he was 0:17:10.160 --> 0:17:14.240 on radio. He was actually scrolling through deals on its exactly. 0:17:14.280 --> 0:17:16.439 We could find we could find some scooter deals for 0:17:16.480 --> 0:17:19.720 you could, yeah, and helmets because We're gonna be safe. 0:17:19.840 --> 0:17:22.760 Evan Clark, Deputy Managing editor, Women's World Barely. Thank you 0:17:22.800 --> 0:17:26.240 so much for joining us again. A big day for Amazon. 0:17:26.600 --> 0:17:29.439 It's interesting these big days. It's it's is what it is. 0:17:29.520 --> 0:17:31.639 It's a sale, and it's a sale in the summer 0:17:31.640 --> 0:17:35.040 to drive traffic. It's also a way to I think, 0:17:35.080 --> 0:17:37.520 really attract more prime members. And we know the prime 0:17:37.520 --> 0:17:40.879 members spend so much more on Amazon than non prime members, 0:17:40.880 --> 0:17:43.400 and it's just good business, so they continue to drive 0:17:43.440 --> 0:18:02.240 the prime membership. Well. It is bank earnings day today, 0:18:02.680 --> 0:18:06.720 JP Morgan, Goldman, Sachs, Wells Fargo, all reporting earnings to 0:18:06.720 --> 0:18:09.840 get the latest. We welcome y'allman On Iran, senior finance 0:18:09.880 --> 0:18:13.000 writer for Bloomberg News, joining us here in our Bloomberg 0:18:13.040 --> 0:18:16.399 Interactive Broker studio. Yaman, thanks so much for joining us. 0:18:16.400 --> 0:18:19.000 I know you're busy crunching all these numbers, getting out 0:18:19.520 --> 0:18:23.919 your notes on these companies. What's your key takeaways maybe 0:18:23.920 --> 0:18:27.840 from some of these big investment banks reporting today? Um, 0:18:27.880 --> 0:18:30.920 you know, I think investors are are kind of happy 0:18:30.960 --> 0:18:35.480 with Goldman's numbers. Um, although and that's probably because their 0:18:35.520 --> 0:18:40.119 equities trading was was up while everybody else's was down. 0:18:40.760 --> 0:18:45.000 Fixed income is down across the companies, but that was 0:18:45.040 --> 0:18:47.760 sort of more expected, you know, fixed income going down, 0:18:47.800 --> 0:18:50.800 but equities was also down at City and JP Morgan, 0:18:50.960 --> 0:18:53.800 while Goldman held up on that and trading is is 0:18:53.800 --> 0:18:56.080 so crucial for these guys that that that that's really 0:18:56.119 --> 0:19:00.240 the bottom line. Everybody looks at UM the universal banks 0:19:00.280 --> 0:19:02.840 that also do a lot of lending, and you know 0:19:02.880 --> 0:19:06.760 they take deposits like JP Morgan, City and and Wells Um. 0:19:06.800 --> 0:19:11.400 There we see net income nets. Interest income is still rising, 0:19:11.480 --> 0:19:14.960 which is amazing because interest rates are dropping again. But 0:19:15.000 --> 0:19:18.040 they're writing more loans, right right, I mean they are, 0:19:18.080 --> 0:19:20.359 so the volume is growing exactly. You you got, you 0:19:20.440 --> 0:19:23.320 hit it on the head. They're able to expand how 0:19:23.400 --> 0:19:26.800 much they land even though their margin strengths because rates 0:19:26.840 --> 0:19:29.479 are dropping. But but that's great because you know, for 0:19:29.520 --> 0:19:32.480 the rest of the developed world that's something they can't 0:19:32.520 --> 0:19:35.080 really they just don't have the margins and they don't 0:19:35.080 --> 0:19:37.159 have the growth. So that's what it's they're hurting. So 0:19:37.240 --> 0:19:41.879 the story that I gather from JP Morgan, Bank of America, 0:19:42.280 --> 0:19:45.840 City Group, and Wells Fargo is that the consumer is 0:19:45.960 --> 0:19:49.680 very strong. You're seeing a very robust deliverance there from 0:19:49.840 --> 0:19:53.680 those units, and that investment banking is lagging behind that 0:19:53.840 --> 0:19:57.119 They're just there isn't the type of fee revenue that 0:19:57.160 --> 0:20:00.119 there has been, at least the fee revenue growth that 0:20:00.160 --> 0:20:04.120 there has been in the past. I'm just wondering did 0:20:04.119 --> 0:20:06.920 Goldman Sacks given any indication of why they are not 0:20:07.119 --> 0:20:09.640 in that crew, because they have come out and actually 0:20:09.760 --> 0:20:15.360 beat on equities trading, and they beat on investment banking revenue. Um, 0:20:15.400 --> 0:20:19.159 you know they do. But even while beating, you know, 0:20:19.240 --> 0:20:21.880 you look at investment banking revenue for Goldment it's down. 0:20:22.160 --> 0:20:25.680 So so investment banking is not doing great. Um. And 0:20:25.720 --> 0:20:28.520 this has been a few quarters now. It's not just disquarter. 0:20:28.600 --> 0:20:30.960 Really you look at the last couple of quarters. The 0:20:31.000 --> 0:20:36.080 consumer is is still kicking strong, but but the trading 0:20:36.160 --> 0:20:39.840 investmentking side of the business is really slowed down. Um. 0:20:39.880 --> 0:20:42.400 It's still general and great revenues, but they're they're lower 0:20:42.560 --> 0:20:45.840 when you look at last year's quarters similar quarters. So 0:20:45.840 --> 0:20:49.399 so that's across the board. UM. Goldman had an incredible 0:20:49.440 --> 0:20:54.400 wonderful jump in its uh on Investing and Lending UH division, 0:20:54.400 --> 0:20:59.119 which is their their their own investments UM. Like merchant banking, 0:20:59.160 --> 0:21:01.120 I mean, you know, and and the companies their private 0:21:01.200 --> 0:21:04.400 equity where they buy the companies investing companies and then 0:21:04.760 --> 0:21:07.119 then they I p o them. So they had several 0:21:07.119 --> 0:21:10.360 I pos I guess during the quarter and and monetize 0:21:10.400 --> 0:21:14.920 those those uh increases. So so they did great on that, 0:21:14.960 --> 0:21:18.920 but the other sides of the businesses are not doing well. Um. 0:21:18.960 --> 0:21:22.080 They talked a lot during the call at Goldman about 0:21:22.200 --> 0:21:25.160 Marcus and and their consumer lending as well, because they're 0:21:25.200 --> 0:21:27.720 trying to make more money on there and and there 0:21:27.800 --> 0:21:30.440 they are probably able to, but it for Goldman that's 0:21:30.440 --> 0:21:34.119 still such a small amount that it doesn't really showing 0:21:34.160 --> 0:21:37.119 their earnings. But their you know, their goal is to 0:21:37.200 --> 0:21:41.639 really bring consumer lending and consumer deposits to be a 0:21:41.680 --> 0:21:44.520 bigger revenue item for them. Is there a sense that 0:21:44.600 --> 0:21:47.520 we've had, you know, several quarters, you know, maybe even longer, 0:21:47.560 --> 0:21:50.240 I think longer where the capital market side of the business, 0:21:50.280 --> 0:21:53.520 that whether it's the equity trading the fixed income trading 0:21:53.560 --> 0:21:56.359 sides of the business, you know, is there an expectation 0:21:56.440 --> 0:21:59.719 that those businesses are going are ever going to become 0:22:00.240 --> 0:22:03.560 meaningful profit drivers in the future, or they're just as 0:22:03.600 --> 0:22:06.600 a regulatory environment changed so much that you know, it's 0:22:06.640 --> 0:22:09.440 just not worth the capital to really drive those businesses. 0:22:10.200 --> 0:22:12.480 For the U S banks, they still make good money 0:22:12.480 --> 0:22:16.840 on that side. Europeans are having second thoughts about that. 0:22:16.840 --> 0:22:21.160 That's why which really UH going down um and not 0:22:21.280 --> 0:22:24.399 just just even b MP party which is now like 0:22:24.480 --> 0:22:28.439 the stronglooking European bank that's trying to take away some 0:22:28.560 --> 0:22:32.720 of Dot's businesses as does shrinks. They've slowed down in 0:22:32.800 --> 0:22:35.679 some areas of capital markets as well. Because for the 0:22:35.720 --> 0:22:39.400 Europeans whose capital markets are not that strong and they 0:22:39.400 --> 0:22:41.560 have to be really in the US to get more 0:22:42.040 --> 0:22:45.760 volume and more more value for their buck um, they're 0:22:45.800 --> 0:22:48.960 not It's not great UH proposal for them. But for 0:22:49.119 --> 0:22:51.440 US banks they still make a lot of money. They'll 0:22:51.480 --> 0:22:54.560