Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovik. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
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Speaker 1: Eastern Time on Bloomberg Radio or watch us on YouTube
Speaker 1: search Bloomberg Clovel News. We are seeing the world reopening
Speaker 1: again um post a Macron. But let's not forget that
Speaker 1: the full impact of code on our well being, Tim
Speaker 1: will be felt for years to come. And I'm talking
Speaker 1: about our health and also our mental well being. Yeah,
Speaker 1: it's certainly taken. I think become an increase in sharper
Speaker 1: focus over the last couple of years during the pandemic.
Speaker 1: Let's talk about it with Angelina May, licensed mental health
Speaker 1: counselor also the executive director of a MFM Healthcare. She
Speaker 1: joins us on the phone from Washington State Angelina, how
Speaker 1: are you hi, I'm greats wonderful to meet you, Carol
Speaker 1: and Tim. Thanks for having me on the show. Yeah,
Speaker 1: thanks so much for joining us, Angelina. And I'm wondering,
Speaker 1: what can you tell us about the way that mental
Speaker 1: health issues have increased during the pandemic. What's the data
Speaker 1: tell us. Well, it's telling us that things are of
Speaker 1: urgent needs right now and we really need to have
Speaker 1: significant interventions so we can really meet the needs of Americans. Um,
Speaker 1: we've had a significant um increase in depression of anxiety
Speaker 1: among adolescents, adults, and even UM our elderly population. Can
Speaker 1: we talk about adolescents in particulars having a conversation UM
Speaker 1: with someone last night talking about their toddler and that
Speaker 1: they were so glad to actually, I think it one
Speaker 1: or two year old be able to get them into
Speaker 1: a school because they needed socialization. It was good for everyone.
Speaker 1: What is potentially the lasting impact of our younger generation?
Speaker 1: Our kids are really young kids if they're not socialized
Speaker 1: properly at this age. Yeah. Absolutely, And this topic, like
Speaker 1: you brought up, you were just having a conversation last night.
Speaker 1: It's on the minds of a lot of Americans. Right now,
Speaker 1: and we've seen I think we just to take a
Speaker 1: step back and recognize we've gone through a collective trauma
Speaker 1: as society and the impact has is going to be
Speaker 1: seen for years. So particularly for young children, UM, they've
Speaker 1: been hit harder by this trauma. Thinking that you know,
Speaker 1: as adults, we've had decades of kind of security and
Speaker 1: normalcy that we can put this into perspective, But for adolescents, children, UM,
Speaker 1: this really has essentially impacted their life. And then when
Speaker 1: we look at like you mentioned, the kind of social
Speaker 1: skills and developmental stages of not having that social interaction
Speaker 1: or having different platforms, you know, socializing through UM virtual platforms,
Speaker 1: it's been very challenging. And I think that you know,
Speaker 1: kind of the core of UM, of one of our
Speaker 1: human needs is that connectiveness with others, and that leads
Speaker 1: to like security and belonging and and so that's why
Speaker 1: we're seeing a lot of the increases around UM depression, anxiety,
Speaker 1: even with younger children. Angelina, I want to talk a
Speaker 1: little bit about the role of social media. Here we
Speaker 1: are today Meta Platforms, the company formerly known as Facebook.
Speaker 1: It owns Instagram and Facebook of course, UM. Where does
Speaker 1: social media fit into mental health. Well, there's that you know,
Speaker 1: when used um in a positive way, those social media
Speaker 1: platforms can be extremely helpful when we've had to transition
Speaker 1: our lives to you know, virtual platforms for connecting with others.
Speaker 1: There's great um support groups and finding others that we
Speaker 1: can connect with, whether it's our hobbies and we think
Speaker 1: about a lot of our school activities have been discontinued
Speaker 1: or the book clubs we belong to and things like that.
Speaker 1: So we're using social media in those positive ways can
Speaker 1: help us feel connected to others that have shared interests. UM.
Speaker 1: So that's a really positive thing. And then but also
Speaker 1: recognizing that when we have our soul um kind of
Speaker 1: interactions through our virtual platforms, then we um, we we
Speaker 1: miss on some of those needs of you know, physical
Speaker 1: touch and physical interaction UM and just being present um
Speaker 1: with others. And sometimes we're on social media. UM. I
Speaker 1: think we're all guilty of this is as being um
Speaker 1: multitasking kind a bit and UM so being really fully
Speaker 1: present and being intentional about that can really improve our
Speaker 1: you know, feelings of connecting with others. I can't tell
Speaker 1: you how many times I've heard the word intentional. Uh recently,
Speaker 1: and it's it's a really good point because UM we
Speaker 1: are constantly kind of lauding people for being able to
Speaker 1: do a million things at once, and I think we
Speaker 1: just missed the mark in such a big way. Hey,
Speaker 1: I am curious, though, what kind of activity or demand
Speaker 1: have you seen for your services since the pandemic began,
Speaker 1: because you know, you guys specifically, you're a private behavioral
Speaker 1: health treatment center. So I'm just curious what uptick and
Speaker 1: demand have you seen and what types of cases. Yeah,
Speaker 1: that's so that's a great question. So um M s
Speaker 1: M Healthcare UM really our program and our ganization is
Speaker 1: geared around meeting the needs of our our community. And
Speaker 1: so you know, even when we started twelve years ago
Speaker 1: that we saw a need for residential of people that
Speaker 1: have mental health and substance US and so we strive
Speaker 1: to meet that need. And one thing we've done since
Speaker 1: the pandemic is, as we were talking about the virtual
Speaker 1: platforms and really seeing the need for continued access to
Speaker 1: mental health services UM is we launched our Mission Connection UM,
Speaker 1: which is a branch that offers UM Virtual Intensive Outpatient
Speaker 1: and PHP, which is UM they treatment. It. It consists
Speaker 1: of therapeutic groups during the day, individual therapy, psychiatric all
Speaker 1: that can be done virtually UM. So that's an area
Speaker 1: that we have recognized you don't have a need for it.
Speaker 1: And then you know, broader from that, we see with
Speaker 1: the UM there's been a great since the pandemic. It's
Speaker 1: just a greater UM burden on our hospital systems and
Speaker 1: on our first responders, and so a lot of times
Speaker 1: we see people going through you know, they're in a
Speaker 1: health crisis, they interact with the fire department, maybe end
Speaker 1: up in a yer, go to a crisis program for
Speaker 1: just three to five days, and then they're discharged back
Speaker 1: to our patients. So our residential programs, yeah, that's you know,
Speaker 1: typically forty five days. They can really um fill that
Speaker 1: connectivity with others, really work on their underlying mental health
Speaker 1: and depression anxiety. It's a it's no, no, that's okay,
Speaker 1: we're running in a time, But I do. I think
Speaker 1: that's such an interesting point. It's like how we think
Speaker 1: about going to physical therapy when something goes wrong. We
Speaker 1: may not need it for a long time, but we
Speaker 1: need some help or acupuncture, and we need to think
Speaker 1: about mental wellness in the same way. Angelina may thank
Speaker 1: you so much, executive director for a MFM Healthcare on
Speaker 1: the phone from Washington State. You're listening to Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic
Speaker 1: on Bloomberg Radio. It is our most read story on
Speaker 1: the Bloomberg. It's also today's Bloomberg Big Take. It's a reminder.
Speaker 1: I guess you could save another era as big bonuses
Speaker 1: on Wall Street. Tim, they are back the stories by
Speaker 1: Shrinadarajin and Hannah Hannah levitt shere joins us. Now he's
Speaker 1: finance reporter for Bloomberg News. He's what this is in
Speaker 1: the Bloomberg inactor broker studio. Okay, So let's let's talk
Speaker 1: numbers here because we're we're starting to learn and we
Speaker 1: did learn last week, uh, fifteen million dollars, twenty five
Speaker 1: million dollars, thirty five million dollars, just how much executives
Speaker 1: were paid in who got paid what, and how is
Speaker 1: that different from recent years? Look anyway you slice and
Speaker 1: dice it when you look across the street, when you
Speaker 1: look at compensation levels from the most junior ranks to
Speaker 1: the most senior ranks, this has been the biggest windfall
Speaker 1: in the generation, you really have to go back to
Speaker 1: two thousand and nine, and in some ways it does
Speaker 1: feel like this is going back to the good old
Speaker 1: days for rainmakers on Wall Street. We've gone through a
Speaker 1: stretch nearly a decade post crisis, where after inviting a
Speaker 1: lot of scrutiny and anger from lawmakers, especially in the
Speaker 1: wake of the crisis, when the big banks went ahead
Speaker 1: and rewarded some of their top talent in two thousand nine,
Speaker 1: a year after the federal bailouts that forced them to
Speaker 1: put a lid on how much they were paying these people.
Speaker 1: And we also went through a period of what felt
Speaker 1: like a little bit of a secular decline. Definitely in
Speaker 1: trading all that change with the pandemic. There are some
Speaker 1: echoes to what happened in the crisis, government intervention, market stabilized,
Speaker 1: unleashed sort of this wild trading activity do you making
Speaker 1: bonanza in twenty they showed some level of restraint. They
Speaker 1: were printing record revenues and profits, but they were willing
Speaker 1: to gap how much they were willing to pay people
Speaker 1: because a they didn't know how long this would last,
Speaker 1: and be the optics aren't really great to pay people
Speaker 1: top dollar in the middle of a pandemic. Moving to
Speaker 1: boom rumbled into a second straight here, but the conversation
Speaker 1: shifted to retaining talent, the war for talent, people getting
Speaker 1: fed up, tired and wanting to switch seats and frankly,
Speaker 1: much better opportunities elsewhere in the financial landscape that has
Speaker 1: forced the big bosses at the major US bank to
Speaker 1: really open up their wallets. So was this going to
Speaker 1: happen pandemic or no pandemic or was it accelebrated exacerbated
Speaker 1: because of the fight for talent as some people maybe
Speaker 1: left the workforce andone elsewhere. You really struggled to make
Speaker 1: a case for this happening without a pandemic, because without
Speaker 1: a pandemic, there was no reason in the typical growth
Speaker 1: rate we've been seeing in trading and dealmaking activities for
Speaker 1: banks to be able to print the kind of numbers
Speaker 1: that they did, whether they accepted or not. That was
Speaker 1: certainly this government intervention that started in March that a
Speaker 1: stabilized the market and then ensured that it absolutely zoomed ahead.
Speaker 1: And there is a very real argument to make that
Speaker 1: without federal support through the absolute depth of the pandemic,
Speaker 1: it wouldn't have happened. Can we talk about the coach
Speaker 1: we got? We got to talk about the coach because
Speaker 1: you and Hannah Levitt, who's the co author on that's
Speaker 1: got some incredi information about Goldman CEOs coach. What did
Speaker 1: you learn about a coaching session that they had to
Speaker 1: prepare for congressional testimony? Just just to give our listeners
Speaker 1: a sense of what we're talking about, we do point
Speaker 1: out that not so long after David Solomon rose to
Speaker 1: the top rank became CEO at Goldman Sex, he was
Speaker 1: preparing for a congressional hearing. And there is a process
Speaker 1: that's known as murder boarding, where effectively people executives at
Speaker 1: the firm will throw all sorts of questions at the
Speaker 1: top executive to try and give them a sense of
Speaker 1: what they can expect from lawmakers at the Real Deal.
Speaker 1: One of the questions posted David Solomon was would you
Speaker 1: be open to paying higher taxes if it went towards
Speaker 1: spending on social services? At first, he fume he thought
Speaker 1: it wasn't the smartest question, but then the court said,
Speaker 1: you know, Jamie Diamond has been awfully public about this
Speaker 1: idea that he would willingly do it to which we
Speaker 1: understand Solomon said, of course Jamie can say that because
Speaker 1: he's made all his money. Why that is interesting is
Speaker 1: that it offers a little window into the mindset. David
Speaker 1: Solomon is among the class of newly climbing executives. He's
Speaker 1: preached the top spot at Goldman Sachs in a very
Speaker 1: different era than when Jamie Diamond ascended to the top.
Speaker 1: And we talked about this new generation, this generation that's
Speaker 1: at the top right now. They have missed out on
Speaker 1: the richest reaped by executives and leaders who came much
Speaker 1: before them, and that shows in the numbers. Jamie Diamond
Speaker 1: is a billionaire two times over, and David Solomon is
Speaker 1: not close to that. No one is saying David Solomon
Speaker 1: is not rich quote unquote, but there still is a difference.
Speaker 1: It's the sound of the times. Go to Bloomberg dot
Speaker 1: com and read the story. We'll put it out on
Speaker 1: Twitter Street down Rage and thank you so much, Financial
Speaker 1: proter rat Bloomberg News. This is Bloomberg Business Week with
Speaker 1: Carol Master and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio.
Speaker 1: All right, well, in the New yatsh of Bloomberg Business
Speaker 1: read out in its entirety tomorrow online, on the Bloomberg
Speaker 1: and on NEWSSTANDZA story about the investors who have been
Speaker 1: backing Kathy Wood in our arcs array of E t F.
Speaker 1: They're sticking with our even as our flagship fund has
Speaker 1: plummeted big time. Tim They are what the headline refers
Speaker 1: to as true believers. Joe Weber is editor at Bloomberg Business.
Speaker 1: He joins us on the access line from Brooklyn. The
Speaker 1: story written by Sam Potter, among others. Sam is Senior
Speaker 1: editor and E t F s R at Bloomberg News.
Speaker 1: Check out this story. It'll be featuring the upcoming issue
Speaker 1: of Business Week magazine. Also, you can read it now
Speaker 1: at Bloomberg and on the Bloomberg terminal. I tweeted out
Speaker 1: earlier today, Joel, what's happened with Kathy Wood's fund? We
Speaker 1: know we've covered the performance close, their audience is familiar
Speaker 1: with it, but something really interesting has happened. Um investors
Speaker 1: are sticking with her, That's right. So it's um an
Speaker 1: interesting phenomenon when from peak, you know, I think it's
Speaker 1: down something like while S and P is up. Uh,
Speaker 1: you would think most fund managers who endured something like that,
Speaker 1: something like a sixty percentage points spread would see upflows.
Speaker 1: And yet that's not entirely the case with Wood. Um,
Speaker 1: it's proving to be really sticky assets. And why why
Speaker 1: is that? Why do we think that's to be true? Sam? Yeah,
Speaker 1: I'm because afternoon everyone. I mean, the fact is that
Speaker 1: Chassie Wood has has really sold a story and narrative
Speaker 1: of the future that investors appear her investors certainly appear
Speaker 1: to really be on board with and to believe in. UM.
Speaker 1: I mean to give some figures to what we're talking
Speaker 1: about here. UM, the main fund, the ARC Innovation Fund,
Speaker 1: is down about so far this year. It's actually got
Speaker 1: positive flows, so it's got net inflows for this year
Speaker 1: while it's poor. Um. The reasons are, you know, our
Speaker 1: BI guys like to do a lot of analysis on this,
Speaker 1: and they talk about how most invested these days are
Speaker 1: heavily invested into big index funds, big boring market following funds,
Speaker 1: and then what they do is with a little slice
Speaker 1: of their investment, they take a risk, they take a gain,
Speaker 1: or they want to put it on meme stocks or
Speaker 1: on crypto, and ARC seems to fall into this this
Speaker 1: kind of bracket. They call it the hot source. So
Speaker 1: people have prepared to put their money in and leave
Speaker 1: it in, and even with these heavy losses, they're still
Speaker 1: kind of strugging and saying, you know what, I think,
Speaker 1: I think this might come good and even if it doesn't,
Speaker 1: come along for the ride. Well. And what's interesting too,
Speaker 1: as you point out Tam and your story, is that
Speaker 1: a lot of these people who have gotten in, a
Speaker 1: lot of them right, have gotten in at the peak.
Speaker 1: So I mean, if you were there from the get
Speaker 1: go when she started out inception of all at all
Speaker 1: of this, you made a lot of money. But if
Speaker 1: you got in at the highs, you're hurting. Yeah, it's
Speaker 1: a It's a classic story of sentiment, isn't it. The
Speaker 1: bulk of the money came in just as as the
Speaker 1: arc story really peaked. We're talking early last year. Um,
Speaker 1: So when you actually calculate the volume of cash coming
Speaker 1: in by the price that was paid at the time,
Speaker 1: I mean, it's an estimate, but but you're looking at
Speaker 1: being underwater by about maybe twenty five percent sometimes in
Speaker 1: the main fund for example. So yeah, people, the majority
Speaker 1: of cast that's come in is arguably now reduced, but again.
Speaker 1: You know, we've seen star managers before in history tells
Speaker 1: us a tale, and it all unwinds when investors have
Speaker 1: had enough and walked away. At one point, the arc
Speaker 1: innovation thumb was down about six from its peak, and
Speaker 1: yet we again we have inflows this year. You know,
Speaker 1: it's an incredible story of faith. Blows are high. Isn't
Speaker 1: that what we're supposed to do? So So another thing
Speaker 1: that kind of stands out to me, or that I'm
Speaker 1: curious about CM is you know, you mentioned the Innovation
Speaker 1: Fund their flagship a r k K, but she has
Speaker 1: other E T F that all have, you know, their
Speaker 1: own spin on things. How sticky are the assets and
Speaker 1: those funds compared to the flagship? Point it is true
Speaker 1: that they are not they're not proving as durable. Um
Speaker 1: we see, I mean it's a mixed picture across the
Speaker 1: funds that we do see that proportional to the assets,
Speaker 1: the outflows have been higher and the performance of a
Speaker 1: number of those times is similar to our innovation So um,
Speaker 1: it isn't you know, it isn't the universal thing. And
Speaker 1: it's going to be really interesting to see how some
Speaker 1: of those domes, especially the ones she launched quite late
Speaker 1: on the Space Fund, the Transparency funds. It will be
Speaker 1: interesting to see how those they're Um, I'm reasonably confident
Speaker 1: this our innovation fund these around for the long haul,
Speaker 1: but whether and how well the others survived remains to
Speaker 1: be seen. Hey, um, just real quick, Sam, I'm I'm
Speaker 1: wondering specifically about the idea of her social media following.
Speaker 1: And it's interesting in here. I didn't know that she
Speaker 1: had more followers than the biggest et f issuers can combined.
Speaker 1: Right now, Yeah, that's right. She's got more than a
Speaker 1: million followers herself and then her analysts, and it's not
Speaker 1: a very big team ARC. I think the whole firm
Speaker 1: is about forty five people. Um, the they've collectively got
Speaker 1: another half a million, so taken together, is more than
Speaker 1: Stage Street, Black Rock and Vanguard official Twitter handles combined.
Speaker 1: And that sort of speaks to her breadth and her popularity.
Speaker 1: And one of one of the ARC portfolio managers is
Speaker 1: in the story and saying, you know, one of the
Speaker 1: things that people like about us and why we have
Speaker 1: these fans is because we're very transparent, you know, and
Speaker 1: they do, to their credit, they do, you know, they're
Speaker 1: cat Wood is often online. She tweets her research. They're thinking.
Speaker 1: They are very engaged and as we've had a sort
Speaker 1: of retail investor boom, I think that's really played into
Speaker 1: their hands. Well, it's fascinating you really get into the
Speaker 1: details that she's drawn in money. You know how she's
Speaker 1: had to maybe lay out to some different bets and
Speaker 1: those names that maybe don't trade as actively. Um, we
Speaker 1: gotta run, Sam, Thank you so much. Sam Potter, Senior
Speaker 1: Editor and e T. F s are Bloomberg News from London.
Speaker 1: Joe Webber, Editor Bloomber business Week. This story in the
Speaker 1: upcoming new issue of Business Week magazine. I also tweeted out,
Speaker 1: so you can see that on my Twitter feed as well.
Speaker 1: Wait a lot today, I'm tweeting a lot. I love
Speaker 1: the stories. I'm starting to tweet again. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. So we've been talking about
Speaker 1: what's the best credit card to get with our Jenny
Speaker 1: Serene because she tracks this. Yeah, she covers fintech, she
Speaker 1: covers credit cards, and we have her in the studio
Speaker 1: for the first time in a while, So we gotta
Speaker 1: do Jenny, what is the credit card that we should
Speaker 1: have right now? How do we get the point? She
Speaker 1: should start a blog. She really should. She's the points guy.
Speaker 1: She's our own version of the points guy. Uh. Meantime,
Speaker 1: we do want to talk about PayPal because man, it's
Speaker 1: getting whacked today. Right now. It's down about uh certainly
Speaker 1: I think the top decliner in the Nasdaq one hundred. Uh.
Speaker 1: Let's get to it because apparently the company is getting
Speaker 1: stung by bad actors. Jenny Strain is finance reporter for
Speaker 1: Bloomberg News. She's with US and the Bloomberg Interactive Broker.
Speaker 1: She wrote about these bad actors um PayPal as a
Speaker 1: result shutting four point five million accounts, among other reasons,
Speaker 1: the company taking a hit in the trade today. What
Speaker 1: are bad actors? So? Last year, for the first time,
Speaker 1: really ever, PayPal started to do what we've seen a
Speaker 1: lot of other FinTechs do, which is say, um, you know,
Speaker 1: if you sign up for a new account, will give
Speaker 1: you ten dollars UM and really going hard after those
Speaker 1: new users. And basically what they got hit with was
Speaker 1: a bunch of fraudsters using bot farms um opening a
Speaker 1: bunch of accounts fraudulently and not UM you know, not
Speaker 1: intending to be legitimate customers at all. And so after
Speaker 1: this big review they go through, they decide, Okay, we're
Speaker 1: going to close those that we know our problem and
Speaker 1: they're actually gonna stop doing that type of marketing in general.
Speaker 1: So they have said, you know, we're no longer going
Speaker 1: to like shoot for just growth and new users. Were
Speaker 1: really going to try and focus on our existing users
Speaker 1: and get them to use us more. Not about quantity,
Speaker 1: but quality, that's what they're saying. But I mean, this
Speaker 1: is an important metric right for how we measure the
Speaker 1: successive PayPal and that's why this is dragging down or
Speaker 1: in part really dragging down the share price today. Yeah,
Speaker 1: so yesterday it was really interesting to hear the executives
Speaker 1: on the earnings called talk about UM. You know, we're
Speaker 1: not like a subscription business. We're not like a Netflix
Speaker 1: where every new user automatically yields fifteen dollars a month
Speaker 1: in revenue. So they really do depend on their existing
Speaker 1: users using them a lot. And we did see a
Speaker 1: little bit of that improve in the quarter. UM. I
Speaker 1: think folks are using them. It's usually around forty five
Speaker 1: to fifty times UM on average. And so that I
Speaker 1: mean that month quarter, yeah, quarter exactly UM. And so
Speaker 1: I mean, and that's going up. And so that's what
Speaker 1: they want to see. And and so they're just saying,
Speaker 1: you know, instead of putting our marketing dollars around, you know,
Speaker 1: getting to our first billion users or whatever, um, they're
Speaker 1: really focused on just making sure that the million that
Speaker 1: they have are are using them a lot. You what's crazy?
Speaker 1: In Max Chafkin's book about Peter Tile and they talk
Speaker 1: about the origins of PayPal. This was an issue when
Speaker 1: PayPal first started back in like twenty years ago, and
Speaker 1: they're still battling it out today. Yeah, what's old is
Speaker 1: new again. That's very that's very very true. I mean
Speaker 1: it's honestly, it was kind of a perfect storm for PayPal.
Speaker 1: They're dealing with a lot right now. Their former parent company,
Speaker 1: eBay has announced that they you know, are moving there.
Speaker 1: They're going their separate ways. So that's happening to them.
Speaker 1: In general. ACoM didn't do as well as folks thought
Speaker 1: it would during the holiday season. Um, that's obviously PayPal's
Speaker 1: bread and butter. So they're just dealing with a lot
Speaker 1: of different headwinds right now. Is there also just a
Speaker 1: lot more competition out there? Or or tell me, like
Speaker 1: what is paypals you know, future place in our financial world.
Speaker 1: They are really aiming to be, honestly, the next like
Speaker 1: Aunt financial or the next we chat. The things that
Speaker 1: we've seen over in China that have done really well
Speaker 1: is like a super app. So they want to be, um,
Speaker 1: you're one stop shop for all things. I want to
Speaker 1: be a wonder woman too, but you know here I am. Um.
Speaker 1: The thing is they've really dominated an online checkout, So
Speaker 1: that little button that you see when you're ready to
Speaker 1: go check out online, um, PayPal is buying buying a
Speaker 1: way the biggest player there. And they have secured and
Speaker 1: established and fought off any other potential um you know,
Speaker 1: up start there. So they're ready to do more. And
Speaker 1: I think this will be a big test as to
Speaker 1: whether or not, you know, adding all these new services
Speaker 1: like crypto trading or coupons or shopping, you know, does
Speaker 1: that really work? Does that? Is that what consumers think
Speaker 1: of when they think of PayPal? Well, Jenny, because they
Speaker 1: have had so much success when it comes to check out,
Speaker 1: I'm wondering what exactly that product is and how it
Speaker 1: benefits the company, because isn't it just using your PayPal
Speaker 1: account to pay for whatever you're buying and the PayPal
Speaker 1: account is linked to a debit card. Yes, so they
Speaker 1: I mean they take a little bit of a percentage
Speaker 1: the merchants. Every time you check out using PayPal, they
Speaker 1: take a little bit of a percentage from the merchants. UM,
Speaker 1: and that take great UM. It actually didn't decline last quarter,
Speaker 1: which they were celebrating it. UM that take greade that
Speaker 1: they get per transaction had been on the decline for
Speaker 1: um a few quarters in a row. UM, so that's
Speaker 1: looking a little bit better. But I think they realized
Speaker 1: that that is not, you know, the kind of growth
Speaker 1: story that everyone's excited about, and really not the growth
Speaker 1: story that they sold during much of the pandemic when
Speaker 1: e commerce was going crazy and folks were turning into
Speaker 1: them left and right and volumes were through the roof. UM.
Speaker 1: So they're really definitely focused on this super app strategy. UM.
Speaker 1: But it's early days, and I don't think that they've
Speaker 1: convinced everyone that, you know, that's the future. It's a
Speaker 1: massive company and dollar market cap. I was kind of
Speaker 1: surprised like it. But I do wonder, like, are they
Speaker 1: it doesn't make sense for them to ultimately link up
Speaker 1: with someone an established, more traditional financial company. Is that
Speaker 1: a good way of kind of melding. I don't know.
Speaker 1: I think well, so last year, UM, there was lots
Speaker 1: of talk of them linking up with Pinterest, which was
Speaker 1: kind of an interesting UM that's not what I was
Speaker 1: thinking about, yeah, um, And but I think that's really
Speaker 1: more what they're thinking. I don't think that they want
Speaker 1: to go the route of, you know, linking up with
Speaker 1: the bank, UM, but it could make sense. I think
Speaker 1: they're a very interesting player in the sense that they
Speaker 1: are a fintech. They're a tech giant, but they're firmly
Speaker 1: in financial UM space. They have really good relationships with regulators.
Speaker 1: They know how to navigate the intricacies of being a
Speaker 1: big behemoth and finance and payments UM. So we'll see,
Speaker 1: we'll see what they end up. Do they just very briefly,
Speaker 1: do they have a they don't have a bank charter
Speaker 1: right now. Do they work with other banks or do
Speaker 1: they like other FinTechs UM for lots of different products,
Speaker 1: they have bank partners and and all sorts of different
Speaker 1: processing partners. Um, but they are not a bank, and
Speaker 1: I know it's not apples to apples, but it's not
Speaker 1: a UBS wealth front kind of thing. Like you don't
Speaker 1: see something. They just feel like there's so much movement
Speaker 1: right now. There could be they're just such an unusual
Speaker 1: player and they're giant. I mean to your point, I
Speaker 1: don't see a bank selling out two billions billion right now. Yeah,
Speaker 1: all right, to be continued. As we'd like to say
Speaker 1: to Seraine, we always have a great time when she's
Speaker 1: in our studio or just we're chatting with her. She's
Speaker 1: financial porter at Bloomberg News. Here in our interactive broker studio.
Speaker 1: Check around on Twitter at Jenny Seraine. This is Bloomberg Radio.
Speaker 1: I'm rod. Yeah, but you let me drive, no, honey, please,
Speaker 1: I want to drive the question drive. This is the
Speaker 1: Drive to the Clothing Well on Bloomberg Radio. All right,
Speaker 1: got about eleven minutes, call it ten minutes exact left
Speaker 1: in today's trading session. Let's get to it with our
Speaker 1: Drive to the close. Guest Michael Rosen is co founder
Speaker 1: and ce IO at the multi asset investment firm for
Speaker 1: institutional and private wealth and investors. Angelus Wealth Management. He
Speaker 1: is on the phone in Santa Monica, California. Um, Michael,
Speaker 1: nice to have you here on Bloomberg. How are you?
Speaker 1: I'm great? Thanks? How are you? You know? Seventeen sunny
Speaker 1: out here? That's a little cold. There should be seventy.
Speaker 1: As a California we can say it's kind of a
Speaker 1: cold day. It's not what we get out here in
Speaker 1: New York. Um, it's it's warm though. It's a little
Speaker 1: more seatier on Wall Street has been what the last
Speaker 1: four days or so? Um, how do you read the market? Trade? Well? Uh,
Speaker 1: you know, I think, uh we we we saw a
Speaker 1: correction of ten per cent or so in the SMP
Speaker 1: and uh, you know, just a rotation out of expensive
Speaker 1: tech stocks and the market a little unsettled around what
Speaker 1: FED policy is going to look like, along with some
Speaker 1: variability and data due to the omicron variant. So a
Speaker 1: lot of things going on causing the market to sell
Speaker 1: off of it. But I think if you if you
Speaker 1: do not think that the economy is going to go
Speaker 1: into a recession, which is my view, uh than corrections
Speaker 1: historically have been good buying opportunities, and I think the
Speaker 1: market just sort of realized that a couple of days ago,
Speaker 1: and uh that's while we're up. So did investors miss
Speaker 1: the opportunity to buy or is it going to be
Speaker 1: kind of a rocky road for the next few months. No,
Speaker 1: I don't think the investors missed the opportunity to buy.
Speaker 1: I mean, we're still off our our highs here, although
Speaker 1: obviously we've had a nice, nice little bounce back here. Again,
Speaker 1: I think the underlying fundamentals of the economy are still
Speaker 1: pretty strong. I think the economy will continue to grow.
Speaker 1: Uh And you know, obviously questions around inflation and FED
Speaker 1: policy and where where interest rates will will go. But rates,
Speaker 1: you know, have you come down off their their peaks
Speaker 1: here the curve is flattened, and you know, generally the
Speaker 1: Fed is still pretty accommodative. Even with all the comments
Speaker 1: around uh FED tightening and concerns about inflation, the Fed
Speaker 1: today is still in the market buying bonds, the balance
Speaker 1: sheet is still expanding, interest rates uh FED funds rate
Speaker 1: is still as zero, So it's still very accommodate policy
Speaker 1: and supportive of of assets at the moment. So does
Speaker 1: the Fed then, potentially Michael need to shock as an
Speaker 1: equity investor, as an investor overall managing portfolios for our
Speaker 1: institutional investors high you know, high net worth individuals who
Speaker 1: are looking at all different kinds of asset classes. Does
Speaker 1: the FED though to some extent? Are you looking for
Speaker 1: them to shock the markets a little bit with a
Speaker 1: half a point increase? Would that be a good thing,
Speaker 1: um maybe for the markets and taking some of the
Speaker 1: fluff and some of the concerns about inflation out or
Speaker 1: do you think that could be potentially an overdone move
Speaker 1: by them. Yeah? I do. First, I don't think the
Speaker 1: FED is going to do that. I think a basis
Speaker 1: point move, a gradual, marginal move. I just don't think
Speaker 1: they've really fully embraced the idea that inflation is a
Speaker 1: big concern, and the markets have not embraced that at all.
Speaker 1: We you know, we we see break even assumptions have
Speaker 1: been coming down. The market thinks that inflation over the
Speaker 1: next ten years will average actually less than two and
Speaker 1: a half percent a year. So the market is not
Speaker 1: concerned about inflation. The FED isn't either. I don't think
Speaker 1: the FIT is going to make any dramatic moves. I
Speaker 1: do think the FED is in the market actually is
Speaker 1: perhaps underestimating the inflationary pressures that are are still in
Speaker 1: the economy, and the FED is behind the curve, and
Speaker 1: so I do think that there's a risk that the Fed, well,
Speaker 1: we'll have to move further and faster at some point.
Speaker 1: But my sense is that at the moment, the first
Speaker 1: hike is just going to be a basis points as
Speaker 1: they I think signals. Hey, we've been talking a lot
Speaker 1: about the jobs report this week because the range is
Speaker 1: just massive. And look what we saw from a DP
Speaker 1: today UM an economists survey by Bloomberg expect a hundred
Speaker 1: and fifty thousand. The range though, goes from you know,
Speaker 1: negative several hundred thousand up to positive several hundred thousand
Speaker 1: jobs added. Um. Yeah, like at the at the length,
Speaker 1: not the width, right. Yeah, It's just a massive, massive
Speaker 1: variability there. I'm wondering, Michael, how investors should should read
Speaker 1: into that if it is a big miss. I mean,
Speaker 1: who knows what the market reaction will be. But does
Speaker 1: that change your and in about the fundamentals of the
Speaker 1: economy at all. Yeah, So, the the ADP report this
Speaker 1: morning was obviously a huge surprise on the downside, and
Speaker 1: you know, you saw the market react, you very quickly,
Speaker 1: bonds moved up very sharply, but have since, you know,
Speaker 1: really come down and now there you know, I don't know,
Speaker 1: maybe flat slightly up for the day, but uh so
Speaker 1: an initial big reaction in the bond market. Stock future
Speaker 1: has never really moved much. Uh So the stock market
Speaker 1: doesn't really seem to be paying attention to the bond market,
Speaker 1: did um. I think this sort of goes to the
Speaker 1: volatility that we've seen some of the turbulence that we've
Speaker 1: seen in the in the markets over the last month
Speaker 1: or so, because we're getting a lot of data and
Speaker 1: it's kind of all over the place, uh and you know,
Speaker 1: a lot of it just feel still relates around the
Speaker 1: omicron variant and the impact that that's had on some
Speaker 1: of the economic activity, along with uh just concerns about
Speaker 1: where inflations going and policy is going. So there's just
Speaker 1: a lot of stuff going on here, and that's what
Speaker 1: I think is leading to this volatility. I think the
Speaker 1: the uh the Friday report, uh, you know, all over
Speaker 1: the map. I have no idea where it's going to come,
Speaker 1: but my senses though, uh that investors will probably look through,
Speaker 1: at least in the stock market because the underlying economy
Speaker 1: is strong. The labor market is tight. I just can't
Speaker 1: envision a report on Friday that would really change that
Speaker 1: that bigger narrative. Again, there there's variability around it due
Speaker 1: to again some you know, whether its supply constraints or
Speaker 1: or the pandemic related job issues. But fundamentally the labor
Speaker 1: market is still very strong, and I think that's the
Speaker 1: that's the message that equity investors anyway will will take
Speaker 1: from from the data. Michael got about a minute left here.
Speaker 1: So with all that you said, kind of on the macro,
Speaker 1: what does it mean when you've actually put new money
Speaker 1: or client money to work, where do you want to
Speaker 1: commit it right now? Well throughout Jane where we raised
Speaker 1: a bit of cash as the market was sort of
Speaker 1: moving up and down, and um just in the last
Speaker 1: week or so started to reinvest that cash. And I
Speaker 1: don't think it's too late either. So I think I
Speaker 1: think equities really are the place for for investors. Bonds
Speaker 1: offer no value, in fact negative value. Uh and uh,
Speaker 1: and I think the economy will continue to grow. Is
Speaker 1: that a Tina comment? There is no alternative? Well, uh,
Speaker 1: to a large except that that's that's true and that's
Speaker 1: to a large extent, that's by design. The FETE has,
Speaker 1: you know, created policies where we have inflation and low
Speaker 1: interest rates and you know, forcing investors to get rid
Speaker 1: of their their their cash and bonds and go into equities.
Speaker 1: And and again I think, as as long as the
Speaker 1: underlying economy is strong, uh, we don't go into a recession,
Speaker 1: equity investors will will perform better than investors in in
Speaker 1: other asset classes. All Right, We're gonna have to leave
Speaker 1: it on that note. Hey, listen, Thank you so much.
Speaker 1: Michael Rosen, his chief investment officer at Angelus Wealth Management,
Speaker 1: on the phone from Santa Monica, California. Some good macro
Speaker 1: thoughts there. Yeah, you know, also not a bad place
Speaker 1: to be Santa Monica, seventy degrees And Sonny, right in
Speaker 1: the beginning of February groundhog Day. That is a very
Speaker 1: very good points I could take a little son Thanks
Speaker 1: for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud,
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