Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple Car playing Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Bloomberg Audio Studios, podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple Car playing Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Billy Lipteltz joining us. Obviously, the memestocks. This was all the rage but GameStop today, so they came out with earnings kind of unexpectedly. They also were in the market issuing shares. I feel like it took them a minute to get it together.

Billy Lipteltz joining us. Obviously, the memestocks. This was all the rage but GameStop today, so they came out with earnings kind of unexpectedly. They also were in the market issuing shares. I feel like it took them a minute to get it together.

No did, and that's really been the thing we've been writing about it this week. We wrote I Believe on Wednesday basically saying the window to capitalize was narrowing, if not closing, because GameStop their quarter ended a few weeks ago, so they needed preliminary results before they could file to potentially sell shares. They did all of that this morning, but Alex, as you point out, the stock was trading north of fifty bucks on Tuesday. Before the even got a chance to sell, it crashed back below twenty eight. So now we're seeing selling pressure down twenty seven percent. Fifty five million shares have traded so far. Again, an ATM allows them and allows their bank to sell up to forty five million chairs, not necessarily a sign that they have, but reading between the lines would mean that they probably are.

No did, and that's really been the thing we've been writing about it this week. We wrote I Believe on Wednesday basically saying the window to capitalize was narrowing, if not closing, because GameStop their quarter ended a few weeks ago, so they needed preliminary results before they could file to potentially sell shares. They did all of that this morning, but Alex, as you point out, the stock was trading north of fifty bucks on Tuesday. Before the even got a chance to sell, it crashed back below twenty eight. So now we're seeing selling pressure down twenty seven percent. Fifty five million shares have traded so far. Again, an ATM allows them and allows their bank to sell up to forty five million chairs, not necessarily a sign that they have, but reading between the lines would mean that they probably are.

Do we have any better idea here? Who any of these fifty five million share people are?

Do we have any better idea here? Who any of these fifty five million share people are?

Like?

Like?

Who's trading this stuff? Again? Is it going to go back to your thoughts about that the quant hedge funds that are kind of really generating the activity.

Who's trading this stuff? Again? Is it going to go back to your thoughts about that the quant hedge funds that are kind of really generating the activity.

Yeah, and we're still not seeing really the volume that we saw on Fidelity, on interactive brokers, on some of the retail platforms that we did see back in twenty twenty one.

Yeah, and we're still not seeing really the volume that we saw on Fidelity, on interactive brokers, on some of the retail platforms that we did see back in twenty twenty one.

And that's that's data. You guys can see the publican see.

And that's that's data. You guys can see the publican see.

You can see it if you have an account, so like I had to create a Fidelity it used to not be behind the paywall.

You can see it if you have an account, so like I had to create a Fidelity it used to not be behind the paywall.

They put it behind the paywall.

They put it behind the paywall.

But like, if you have an account, you can see what on a given day people are buying and selling.

But like, if you have an account, you can see what on a given day people are buying and selling.

It's just the orders, but it's mixed at SPENSA. I do not want a personal account.

It's just the orders, but it's mixed at SPENSA. I do not want a personal account.

Oh, I thought you were just did it for reporting?

Oh, I thought you were just did it for reporting?

No, I do now expense a premium exitcount, though that was a recent edition nice, good small ones.

No, I do now expense a premium exitcount, though that was a recent edition nice, good small ones.

CRETA won't mind the big the small ones matter. Do we know why it didn't last longer? Is this just basically there's weren't as many shorts out there? Is that why the Memestock rally was a hot minute.

CRETA won't mind the big the small ones matter. Do we know why it didn't last longer? Is this just basically there's weren't as many shorts out there? Is that why the Memestock rally was a hot minute.

It's a really different backdrop.

It's a really different backdrop.

So not only do you not have people stuck at home looking for entertainment, flush with stimulus checks, short interest is about twenty five percent. It used to be north of one hundred back in the peak mania. A lot of Again, the buying and selling that we saw Monday and Tuesday seemed to have Wall Street's fingerprints, so it never really got retail traders back in like back in twenty twenty one. And also you had a quiet Monday and Tuesday session ahead of the inflation data on Wednesday. And then you add in the fact that investors, retail traders probably bought in and were sitting on big paper losses, so you provide an exit rant for them.

So not only do you not have people stuck at home looking for entertainment, flush with stimulus checks, short interest is about twenty five percent. It used to be north of one hundred back in the peak mania. A lot of Again, the buying and selling that we saw Monday and Tuesday seemed to have Wall Street's fingerprints, so it never really got retail traders back in like back in twenty twenty one. And also you had a quiet Monday and Tuesday session ahead of the inflation data on Wednesday. And then you add in the fact that investors, retail traders probably bought in and were sitting on big paper losses, so you provide an exit rant for them.

Why would they not take advantage?

Why would they not take advantage?

Did Bill Gross make money on this with his straddle?

Did Bill Gross make money on this with his straddle?

He still is those expired today.

He still is those expired today.

I haven't talked to him since he told you he laid out the initial trade, so he might have closed it or tapered it down, but that straddle still is very much in played in the in the money, assuming shares don't.

I haven't talked to him since he told you he laid out the initial trade, so he might have closed it or tapered it down, but that straddle still is very much in played in the in the money, assuming shares don't.

So he bought calls and puts at forty dollars, right.

So he bought calls and puts at forty dollars, right.

He sold you logged in, So now I'm off the terminal.

He sold you logged in, So now I'm off the terminal.

Oh but you were using my log I sat down where you.

Oh but you were using my log I sat down where you.

Were marriage off.

Were marriage off.

Though.

Though.

There's a certain person, a morning anchor that leaves his Twitter account open.

There's a certain person, a morning anchor that leaves his Twitter account open.

Does I find that helpful?

Does I find that helpful?

Yes?

Yes?

I know.

I know.

Let me.

Let me.

I want to go to another area here. But we were just talking about Reddit and how that was such a great ipo and they had some good news today, pop on the stock up again. Here we have a number of really good IPOs performing over the last couple of months. I got David Solomon up on stages saying, the backlogs building. We're all my IPOs.

I want to go to another area here. But we were just talking about Reddit and how that was such a great ipo and they had some good news today, pop on the stock up again. Here we have a number of really good IPOs performing over the last couple of months. I got David Solomon up on stages saying, the backlogs building. We're all my IPOs.

I need to see five or six a week. The backlog has been building for three years.

I need to see five or six a week. The backlog has been building for three years.

Of every banker you talked to is like, the backlog's been better than it's ever been.

Of every banker you talked to is like, the backlog's been better than it's ever been.

I want to see days when we have four printing, like on a Thursday.

I want to see days when we have four printing, like on a Thursday.

Yeah, well, don't hold your breath.

Yeah, well, don't hold your breath.

So what are we waiting for here? At this point?

So what are we waiting for here? At this point?

Well, the real thought is is drawing back investors.

Well, the real thought is is drawing back investors.

So you have read it performing well.

So you have read it performing well.

You have a stera of labs, Viking, Bougie cruises for lack of a better frame, all performing well.

You have a stera of labs, Viking, Bougie cruises for lack of a better frame, all performing well.

But you have to get deals that are priced well.

But you have to get deals that are priced well.

To Paul's point, make the investors money, make the sponsors happy, and perform well. And that's really still kind of weaning back into the system. There is still uncertainty around how much of a slowdown what we have in the summer, just because bankers and investors are on vacation. We do have an election in November. It seems like we will have a more active than usual June July than historically speaking. But the big focus still is on that post Labor Day window, which will be kind of compressed because you want to get out before the election, but also when people are actually at their desks and you can go visit t Row and Fidelity and have a real pitche.

To Paul's point, make the investors money, make the sponsors happy, and perform well. And that's really still kind of weaning back into the system. There is still uncertainty around how much of a slowdown what we have in the summer, just because bankers and investors are on vacation. We do have an election in November. It seems like we will have a more active than usual June July than historically speaking. But the big focus still is on that post Labor Day window, which will be kind of compressed because you want to get out before the election, but also when people are actually at their desks and you can go visit t Row and Fidelity and have a real pitche.

There are days back in the day when Morgan Stanley Goldman's as a credit Swisser song, we do have to get on the phone and say, all right, guys, we're all going to be in New York on Thursday. We got to coordinate this are you do your lunch at the Four Seasons eleven, I'll do mine at the Intercontinental twelve? You do years. That's how busy it was, you know. And and because you get those those windows, I.

There are days back in the day when Morgan Stanley Goldman's as a credit Swisser song, we do have to get on the phone and say, all right, guys, we're all going to be in New York on Thursday. We got to coordinate this are you do your lunch at the Four Seasons eleven, I'll do mine at the Intercontinental twelve? You do years. That's how busy it was, you know. And and because you get those those windows, I.

Feel like I haven't this window.

Feel like I haven't this window.

Well that's and when I talk to investors in bankers, the big argument that they make is the window has always been open for good companies. It's just that good companies who have access to the private markets maybe don't want to go out just yet and be.

Well that's and when I talk to investors in bankers, the big argument that they make is the window has always been open for good companies. It's just that good companies who have access to the private markets maybe don't want to go out just yet and be.

The first here.

The first here.

I mean, these Pea guys whining. They've been sitting in these things for five, six, seven, eight, ten years.

I mean, these Pea guys whining. They've been sitting in these things for five, six, seven, eight, ten years.

They're looking for an exit.

They're looking for an exit.

Well, like, okay, if you don't want to like you know, if you don't want to take the streets mark, then let's hit it. Let's go.

Well, like, okay, if you don't want to like you know, if you don't want to take the streets mark, then let's hit it. Let's go.

Well, that's the big issue on a down round. You have to call it a down round.

Well, that's the big issue on a down round. You have to call it a down round.

You have to cave a little bit on valuation, especially because a lot of to your point, a lot of these pe assets are heavily straddled with debt, and investors don't want debt right now. They want clean uh stories they can be sold to them. Viking was one that's interesting that has a large detlog, but it's viewed as kind of being recession proof because it's wealthy people, older people taking cruises.

You have to cave a little bit on valuation, especially because a lot of to your point, a lot of these pe assets are heavily straddled with debt, and investors don't want debt right now. They want clean uh stories they can be sold to them. Viking was one that's interesting that has a large detlog, but it's viewed as kind of being recession proof because it's wealthy people, older people taking cruises.

Interesting, you just did a flux there. He called it a flex before wealthy people taking cruises. All right, Bailey, thanks a lot, super appreciated.

Interesting, you just did a flux there. He called it a flex before wealthy people taking cruises. All right, Bailey, thanks a lot, super appreciated.

Happy weekend.

Happy weekend.

Billy Lipschaltz joining us Ipo market as well as the Meme stocks.

Billy Lipschaltz joining us Ipo market as well as the Meme stocks.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa playing Bloomberg eleven thirty.

It has been definitely a week. We had some nice records. We haven't seen this kind of move in months for the S and P.

It has been definitely a week. We had some nice records. We haven't seen this kind of move in months for the S and P.

So what do you do?

So what do you do?

On a headline level, we may continue to be a little bit boring, but underneath there's some really individual stock moves that are gaining a lot of traction here. So let's get more with Shelby McFadden, investment analyst at Motley Full Asset Management. She is joining us. So, Shelby, are we in a world where like the headline level is going to continue to grind higher, but it's going to be those individual names where you get the action, you know.

On a headline level, we may continue to be a little bit boring, but underneath there's some really individual stock moves that are gaining a lot of traction here. So let's get more with Shelby McFadden, investment analyst at Motley Full Asset Management. She is joining us. So, Shelby, are we in a world where like the headline level is going to continue to grind higher, but it's going to be those individual names where you get the action, you know.

I think that's absolutely possible.

I think that's absolutely possible.

And part of it is we've seen the evidence of that happening for not just one year, but two years, right. We've seen it go from the S and P five hundred to sort of the S and P seven to the SMP four, And so it's not completely unreasonable to have to pop the hood and really see, breaking into sectors and industries, what's really going on in the market. And so if you're sort of just interesting in owning the overall market and being okay with it being driven by fewer than ten stocks, sure, but the inverse is not necessarily true that how those top ten are doing is necessarily representative of the overall market.

And part of it is we've seen the evidence of that happening for not just one year, but two years, right. We've seen it go from the S and P five hundred to sort of the S and P seven to the SMP four, And so it's not completely unreasonable to have to pop the hood and really see, breaking into sectors and industries, what's really going on in the market. And so if you're sort of just interesting in owning the overall market and being okay with it being driven by fewer than ten stocks, sure, but the inverse is not necessarily true that how those top ten are doing is necessarily representative of the overall market.

Shelby, we had a I guess a weaker than expected retail sales number yesterday, yet combined with some pretty strong sales numbers out of Walmart. How do you square those two things? How do you view the consumer out there?

Shelby, we had a I guess a weaker than expected retail sales number yesterday, yet combined with some pretty strong sales numbers out of Walmart. How do you square those two things? How do you view the consumer out there?

I think when we sort of look at those two things, we see the fact that consumers are looking for value. And so when we do look at Walmart. We consider the fact that general merchandise for that retailer is still weaker than they would like to see, and a lot of the performance comes from the necessities like food and different staples.

I think when we sort of look at those two things, we see the fact that consumers are looking for value. And so when we do look at Walmart. We consider the fact that general merchandise for that retailer is still weaker than they would like to see, and a lot of the performance comes from the necessities like food and different staples.

So when we see those.

So when we see those.

Weaker retail sales, we're realizing that discretionary income is still being pressured quite a bit, and that when people are looking to spend what discretionary income they have, they're looking to get value. So in the past they may have been a little bit indifferent about saying, let's just go ahead and order the TV from this online retailer or pick it up from this standard big box retailer. Now they're considering, you know what, let's check out Walmart. I think they actually have a lot of value that they can offer us.

Weaker retail sales, we're realizing that discretionary income is still being pressured quite a bit, and that when people are looking to spend what discretionary income they have, they're looking to get value. So in the past they may have been a little bit indifferent about saying, let's just go ahead and order the TV from this online retailer or pick it up from this standard big box retailer. Now they're considering, you know what, let's check out Walmart. I think they actually have a lot of value that they can offer us.

For those of you who didn't hear yesterday's show, Paul is going to a Walmart for the first time in a long time.

For those of you who didn't hear yesterday's show, Paul is going to a Walmart for the first time in a long time.

Is going to some channel checks.

Is going to some channel checks.

Tomorrow, right, Yep, it's going to be huge. So Walmart stock at a fifty two week high today. Is this priced in? Or is there more upside here? You think to Walmart?

Tomorrow, right, Yep, it's going to be huge. So Walmart stock at a fifty two week high today. Is this priced in? Or is there more upside here? You think to Walmart?

I think part of what we're also seeing in the sort of little Walmart run up is the fact that they've made that decision i think within the last couple of weeks to close a lot of their health clinics. And they're also having some staff reduction and they're cracking down on folks working remotely, so they're doing some of that op X as well. So what we're seeing now is the effect of the bottom line boost. So at first Walmart was able to sort of hold onto their top line for a bit longer than others.

I think part of what we're also seeing in the sort of little Walmart run up is the fact that they've made that decision i think within the last couple of weeks to close a lot of their health clinics. And they're also having some staff reduction and they're cracking down on folks working remotely, so they're doing some of that op X as well. So what we're seeing now is the effect of the bottom line boost. So at first Walmart was able to sort of hold onto their top line for a bit longer than others.

I think what's being priced.

I think what's being priced.

In now is the fact that they are leaning out in ways that they don't usually take on. They traditionally just kind of cut their hourly workforce, but now they're really looking at the big picture of investment, and I think that's the sort of pop in the stock we saw yesterday.

In now is the fact that they are leaning out in ways that they don't usually take on. They traditionally just kind of cut their hourly workforce, but now they're really looking at the big picture of investment, and I think that's the sort of pop in the stock we saw yesterday.

So Shelby, I guess one of the questions here is, I guess the lower end of consumer, how are they dealing with? Where are they going with their dollars? Is it to are they staying with Walmart target, They're going down to the dollar stores? How is the lower end consumer how are they spending their discretionary income.

So Shelby, I guess one of the questions here is, I guess the lower end of consumer, how are they dealing with? Where are they going with their dollars? Is it to are they staying with Walmart target, They're going down to the dollar stores? How is the lower end consumer how are they spending their discretionary income.

I think what we've seen in a combination of between Walmart and they're sort of not retailers but manufacturers that have branded material. Is that consumers are choosing brands even at the lower end where there is the most premiumization that they require, But then they are choosing more of a Walmart over a Target at the lower end because at this point you can't really stop how much food you're going to need. You can try and make your clothing and other sort of discretionary items last a little bit longer, stretch them a bit longer, but food is just such a requirement. And so when we then combine that with what we saw from the financials companies, we're seeing that at the lower end they are just using less credit, trying to get paid off what they can, and so if they're just working with cash, it's going to be all right, let's get all the discretionary stuff that we have to get on top of the staples we need at a place like Walmart. And I'm not quite sure that we're seeing that absolute trade down into say, food shopping at dollar stores quite yet. I don't think we're there just yet.

I think what we've seen in a combination of between Walmart and they're sort of not retailers but manufacturers that have branded material. Is that consumers are choosing brands even at the lower end where there is the most premiumization that they require, But then they are choosing more of a Walmart over a Target at the lower end because at this point you can't really stop how much food you're going to need. You can try and make your clothing and other sort of discretionary items last a little bit longer, stretch them a bit longer, but food is just such a requirement. And so when we then combine that with what we saw from the financials companies, we're seeing that at the lower end they are just using less credit, trying to get paid off what they can, and so if they're just working with cash, it's going to be all right, let's get all the discretionary stuff that we have to get on top of the staples we need at a place like Walmart. And I'm not quite sure that we're seeing that absolute trade down into say, food shopping at dollar stores quite yet. I don't think we're there just yet.

I don't.

I don't.

No, man, food shopping a dollar stores feels like you are asking for expired stuff.

No, man, food shopping a dollar stores feels like you are asking for expired stuff.

Uh, it's a tough.

Uh, it's a tough.

Read and the person at the checkout because you don't want that, sir, like.

Read and the person at the checkout because you don't want that, sir, like.

It's green, Why do you fund something that's green. To that point, Shelby, there's tons of retail action next week, right, get Macy's, Target, you do, get the dollar stores, Ross stores, like, get the specialty guys.

It's green, Why do you fund something that's green. To that point, Shelby, there's tons of retail action next week, right, get Macy's, Target, you do, get the dollar stores, Ross stores, like, get the specialty guys.

What's going to be a macro signal.

What's going to be a macro signal.

For you here? To me, I think it's actually going to be these sort of the sort of middle to lower end, the Ross, the Burlington, the Dollar stores, letting us know how much of a higher income customer share they're picking up, because it's been very obvious that they were going to get more of the middle to lower end. That's the whole point of their of their retail premise.

For you here? To me, I think it's actually going to be these sort of the sort of middle to lower end, the Ross, the Burlington, the Dollar stores, letting us know how much of a higher income customer share they're picking up, because it's been very obvious that they were going to get more of the middle to lower end. That's the whole point of their of their retail premise.

Right.

Right.

So the question now is how much of the upper end consumer are you raining in for Ross? Are you capturing some of the consumer that was going to Marshals or even Nordstrom Rack? Similar for Burlington? And then when we look at Target, are they able to capture or hold on to any middle income to lower income share because we do know that they have a little bit more of a premium product.

So the question now is how much of the upper end consumer are you raining in for Ross? Are you capturing some of the consumer that was going to Marshals or even Nordstrom Rack? Similar for Burlington? And then when we look at Target, are they able to capture or hold on to any middle income to lower income share because we do know that they have a little bit more of a premium product.

Just so we're clear here in the journal, today, there was an article about Tjmax and why it's awesome because they were like anyone who's anyone can now go and buy like super high designers for like a third of the price. I love TJ Max. It's like in my blood. But I mean it was in the journal. I'm just saying, so now it's already happening. But now, like you know, real people with like serious money, like real housewives people are doing it, but them out of the year.

Just so we're clear here in the journal, today, there was an article about Tjmax and why it's awesome because they were like anyone who's anyone can now go and buy like super high designers for like a third of the price. I love TJ Max. It's like in my blood. But I mean it was in the journal. I'm just saying, so now it's already happening. But now, like you know, real people with like serious money, like real housewives people are doing it, but them out of the year.

Know that according from the.

Know that according from the.

Journal, very good what the journal has it? Yeah, I'm going with it a Shelby And in some of your stock picks here, one of them is ken View. Just remind her that was to spin out from Johnson and Johnson I guess talk to us about Kenview.

Journal, very good what the journal has it? Yeah, I'm going with it a Shelby And in some of your stock picks here, one of them is ken View. Just remind her that was to spin out from Johnson and Johnson I guess talk to us about Kenview.

Yeah.

Yeah.

What's interesting about ken View is they sort of followed in a trend that a lot of pharmaceutical companies were doing where they went ahead and separated their consumer brands. So we're talking about, you know, the tail and alls of the world into a completely separate company. And what interested me about that going into earning season was whether or not they would be able to sort of maintain that demand on premiumization when we think about the fact that if I need tile at all, I could just buy a seat of minifit and it's cheaper. And what they showed us in earnings is that they've been able to do it. So the brands that they've cultivated have held onto people to spend that extra dollar or dollar fifty on baby wipes, on feminine products, on pain and other healthcare. So that was a great signal to us that to some degree, with the right mix of pricing, you're able to hold onto people for even brand named staples, And I think that is really important.

What's interesting about ken View is they sort of followed in a trend that a lot of pharmaceutical companies were doing where they went ahead and separated their consumer brands. So we're talking about, you know, the tail and alls of the world into a completely separate company. And what interested me about that going into earning season was whether or not they would be able to sort of maintain that demand on premiumization when we think about the fact that if I need tile at all, I could just buy a seat of minifit and it's cheaper. And what they showed us in earnings is that they've been able to do it. So the brands that they've cultivated have held onto people to spend that extra dollar or dollar fifty on baby wipes, on feminine products, on pain and other healthcare. So that was a great signal to us that to some degree, with the right mix of pricing, you're able to hold onto people for even brand named staples, And I think that is really important.

Your last pick here that you have on the notes here is master Card. Why do you like this dog versus some of the other guys.

Your last pick here that you have on the notes here is master Card. Why do you like this dog versus some of the other guys.

Yeah.

Yeah.

One of the things we love about MasterCard really in general is that they're really just a toll taker, right, so even in a sort of downturn, the rails still have to be used to process payment. The other thing is really their weight to credit compared to debit. So we do know that a while ago we had that legislation that really compressed on debit fees. So when we look at their competitor, we see that they've got that better mix to that sort of higher fee for using the credit rails, and also knowing that consumers leaning a little bit more on credit in these types of times, at least in the middle to upper end, generates more fees for MasterCards. So when we think about the credit to debit mix, plus their international opportunities, we feel that they're really well positioned when it comes to the payment network space.

One of the things we love about MasterCard really in general is that they're really just a toll taker, right, so even in a sort of downturn, the rails still have to be used to process payment. The other thing is really their weight to credit compared to debit. So we do know that a while ago we had that legislation that really compressed on debit fees. So when we look at their competitor, we see that they've got that better mix to that sort of higher fee for using the credit rails, and also knowing that consumers leaning a little bit more on credit in these types of times, at least in the middle to upper end, generates more fees for MasterCards. So when we think about the credit to debit mix, plus their international opportunities, we feel that they're really well positioned when it comes to the payment network space.

All right, Shelby, thank you so much for joining us. Shelby McFadden Investment analys that Motley Fool Asset Management joining us from Alexandria, Virginia via zoom. You may show you how cutting edge I am on fintech. When I go buy my salad today for lunch, you can use Apple pay.

All right, Shelby, thank you so much for joining us. Shelby McFadden Investment analys that Motley Fool Asset Management joining us from Alexandria, Virginia via zoom. You may show you how cutting edge I am on fintech. When I go buy my salad today for lunch, you can use Apple pay.

Hey, look at you. What happens to the water cash in your pocket?

Hey, look at you. What happens to the water cash in your pocket?

I still have the water cash. It just it lasts a lot longer. Like when I was growing up, even as a young adult, I would only use credit cards for big purchase and special one off type of things, not for day to day I use cash cut now. It's it's the exact I think after in society. It's just used it for everything.

I still have the water cash. It just it lasts a lot longer. Like when I was growing up, even as a young adult, I would only use credit cards for big purchase and special one off type of things, not for day to day I use cash cut now. It's it's the exact I think after in society. It's just used it for everything.

I'm sorry.

I'm sorry.

Michael Bar Michael Bar, Oh my god.

Michael Bar Michael Bar, Oh my god.

First of all, he pulls out a lot of cash, A couple of one hundred dollars bills. Absolutely, you know, not the deed the boardwalk like I have in mind, but wow, what happened to cash?

First of all, he pulls out a lot of cash, A couple of one hundred dollars bills. Absolutely, you know, not the deed the boardwalk like I have in mind, but wow, what happened to cash?

You know?

You know?

The only reason I have cash? And John Tucker can back me up on this. You go down to the Jersey Shore. That's a cash economy down. Do you walk up to a Jersey Shore bar, you don't apple pay, You throw a fifty or hondy on the bar and that's how you announce your uh.

The only reason I have cash? And John Tucker can back me up on this. You go down to the Jersey Shore. That's a cash economy down. Do you walk up to a Jersey Shore bar, you don't apple pay, You throw a fifty or hondy on the bar and that's how you announce your uh.

I also love the use a hundy because I say that at home. My husband like refuses to talk to me.

I also love the use a hundy because I say that at home. My husband like refuses to talk to me.

But to that point, but actually, tipping is the problem. Like if you don't have cash, I never carry cash anymore, and then tipping is huge. Like if you go get a Manny petty, it's like, oh god, you guys have venmo and then you're like scrambling and it's stressful.

But to that point, but actually, tipping is the problem. Like if you don't have cash, I never carry cash anymore, and then tipping is huge. Like if you go get a Manny petty, it's like, oh god, you guys have venmo and then you're like scrambling and it's stressful.

It's a changing world out there in terms of world. You have to be on top of this fintech And a lot of people say it's just by Master Carter resent that gets your exposure to fintech because it's all got a over their systems. And remember take care of your brant tenders, ladies and gentlemen. Exactly right.

It's a changing world out there in terms of world. You have to be on top of this fintech And a lot of people say it's just by Master Carter resent that gets your exposure to fintech because it's all got a over their systems. And remember take care of your brant tenders, ladies and gentlemen. Exactly right.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Just get to tech. There's been some fun news. I was taking a look at this Reddit open ai thing. So apparently the deal between the two helps display Reddit its content and also train open ai systems on its partners data. So this is kind of what they promised when the iPod and then maybe a little extra. Man Deep Singh joins us now he is a Bloomberg Senior technology analyst, mandeep give me some of the particulars here.

Just get to tech. There's been some fun news. I was taking a look at this Reddit open ai thing. So apparently the deal between the two helps display Reddit its content and also train open ai systems on its partners data. So this is kind of what they promised when the iPod and then maybe a little extra. Man Deep Singh joins us now he is a Bloomberg Senior technology analyst, mandeep give me some of the particulars here.

Well, they haven't told us who is paying whom. It's just that I mean, look, man, we know Google pays Reddit almost sixty million a year for its content, and in return, I think Reddit benefits more in the sense that, yes, they get paid, and they also get traffic from Google. You know Google displaying reddits links on its search. But in this case, I think open ai probably needs Reddit data more simply because you have to constantly train these llms. I mean, Reddit has almost one billion posts a year. Look at the magnitude of the user generated content. So yes, OpenAI has the most powerful LLM out there. But llms needs these large data sets, and that's where Reddit is one of the most coveted data sets on the open Internet. If you think about it, Twitter being another one. There are other forums that generate a lot of user generated content, but that's what you need to constantly train these Larzagrig models. And I thought Google's LM had an advantage because one they were training on these Reddit data sets, which open Ai didn't have license for. And also it establishes a trend that you have to pay for content. Now it's not free anymore, so every content provider will start charging a licensing fee.

Well, they haven't told us who is paying whom. It's just that I mean, look, man, we know Google pays Reddit almost sixty million a year for its content, and in return, I think Reddit benefits more in the sense that, yes, they get paid, and they also get traffic from Google. You know Google displaying reddits links on its search. But in this case, I think open ai probably needs Reddit data more simply because you have to constantly train these llms. I mean, Reddit has almost one billion posts a year. Look at the magnitude of the user generated content. So yes, OpenAI has the most powerful LLM out there. But llms needs these large data sets, and that's where Reddit is one of the most coveted data sets on the open Internet. If you think about it, Twitter being another one. There are other forums that generate a lot of user generated content, but that's what you need to constantly train these Larzagrig models. And I thought Google's LM had an advantage because one they were training on these Reddit data sets, which open Ai didn't have license for. And also it establishes a trend that you have to pay for content. Now it's not free anymore, so every content provider will start charging a licensing fee.

Jump on.

Jump on.

You know what's impressive about mandeep so many things on a Friday in studio.

You know what's impressive about mandeep so many things on a Friday in studio.

I totally knew you were going to bring this up now.

I totally knew you were going to bring this up now.

So he basically leaves our bi effort in New York because the senior management is safely asconced leading from the RUAR in Princeton. So he's our guy here in the world's financial capital. But what I love about the Reddit story is I love this Reddit manager team. They get the gold star.

So he basically leaves our bi effort in New York because the senior management is safely asconced leading from the RUAR in Princeton. So he's our guy here in the world's financial capital. But what I love about the Reddit story is I love this Reddit manager team. They get the gold star.

Now.

Now.

They went public saying they were going to do something, and they did it, and the IPO shareholders are benefiting. That is such a class move man. They want to come back and sell more stock, I'll buy it.

They went public saying they were going to do something, and they did it, and the IPO shareholders are benefiting. That is such a class move man. They want to come back and sell more stock, I'll buy it.

The rays And look, I mean, compare them to a company like Pinterests. Same number of daily active users, same number of monthly active users. Pinterest rates that are twenty five billion market gap. Reddit is still a ten billion dollar market gap. Yes, there is a revenue gap. I mean, obviously Pinterests generates three point five billion in revenue. Reddits is much smaller. But in terms of engagement user trends, everything looks similar.

The rays And look, I mean, compare them to a company like Pinterests. Same number of daily active users, same number of monthly active users. Pinterest rates that are twenty five billion market gap. Reddit is still a ten billion dollar market gap. Yes, there is a revenue gap. I mean, obviously Pinterests generates three point five billion in revenue. Reddits is much smaller. But in terms of engagement user trends, everything looks similar.

So we'll get to Snowflake in a second. But I have one more silly question. So when I'm going on Google and I'm searching something now and then it gets me eventually to all the here's what Reddit's saying and all those links, is that because of these kind of partnerships.

So we'll get to Snowflake in a second. But I have one more silly question. So when I'm going on Google and I'm searching something now and then it gets me eventually to all the here's what Reddit's saying and all those links, is that because of these kind of partnerships.

I mean, look, Reddit again has the most authentic user content communities that people want to know. Like, they don't want canned LLLM generated answers. People want real answers where users are having an engagement and discussing a topic. And that's why Google is prioritizing reddits results in their ten blue links. I mean, yes, they are adding genera like AI overviews and all that, but they are prioritizing Reddit in their first ten links because they find these links to be more engaging for their users.

I mean, look, Reddit again has the most authentic user content communities that people want to know. Like, they don't want canned LLLM generated answers. People want real answers where users are having an engagement and discussing a topic. And that's why Google is prioritizing reddits results in their ten blue links. I mean, yes, they are adding genera like AI overviews and all that, but they are prioritizing Reddit in their first ten links because they find these links to be more engaging for their users.

And can let me just give these guys a pat pat on the back here Reddit when public September seventeenth to twenty twenty four to thirty four dollars to share the stocks at sixty three and change here today up eighty five percent. That's a nice trade. It's a nice investment. They should be doing some more stock and more companies should become in public. I don't know why the full Gates aren't just gushing with IPOs. What is Snowflake and what's their AI strategy?

And can let me just give these guys a pat pat on the back here Reddit when public September seventeenth to twenty twenty four to thirty four dollars to share the stocks at sixty three and change here today up eighty five percent. That's a nice trade. It's a nice investment. They should be doing some more stock and more companies should become in public. I don't know why the full Gates aren't just gushing with IPOs. What is Snowflake and what's their AI strategy?

Well, so, Snowflake is a layer that's on top of your hyperscalers. You'd remember hyperscalers gives you the compute the database. So Snowflake is like, I will aggregate all your data into a nice dashboard. That was their value proposition. They were immensely successful until this whole generative AI and LLLM wave popped up, which was very disruptive because one Snowflake didn't have any of their large anguid models that all these companies, the hyperscalers have, And then obviously, abruptly their CEO resigned and they appointed a new CEO, and his playbook seems to be to develop an LLM because otherwise they're at the risk of getting disintermediated. Look, it's still a high growth company, still mid twenty percent growth, hugely impressive. But for a while they couldn't put a step wrong. They were growing forty percent plus and so suddenly that growth decelerated, and I think it was because of the not having an LLLM. So that's what they're trying to solve for here.

Well, so, Snowflake is a layer that's on top of your hyperscalers. You'd remember hyperscalers gives you the compute the database. So Snowflake is like, I will aggregate all your data into a nice dashboard. That was their value proposition. They were immensely successful until this whole generative AI and LLLM wave popped up, which was very disruptive because one Snowflake didn't have any of their large anguid models that all these companies, the hyperscalers have, And then obviously, abruptly their CEO resigned and they appointed a new CEO, and his playbook seems to be to develop an LLM because otherwise they're at the risk of getting disintermediated. Look, it's still a high growth company, still mid twenty percent growth, hugely impressive. But for a while they couldn't put a step wrong. They were growing forty percent plus and so suddenly that growth decelerated, and I think it was because of the not having an LLLM. So that's what they're trying to solve for here.

So they're in talks to acquire RecA.

So they're in talks to acquire RecA.

I'm saying that right.

I'm saying that right.

Yeah, Areca AI for more than a billion, so that would solve their LLM problem.

Yeah, Areca AI for more than a billion, so that would solve their LLM problem.

I don't know if it's gonna solve because with llms, the clear leaders have been established, it's Open AI, Google, Mistral, and Meta, the four or five players. All the smaller players are finding it's too expensive to constantly train their llms. So the con solidation is happening. And now obviously you know they are getting sold, but in this case, Snowflake bought them first. I'm sure Amazon is looking to buy somebody, and so are other company Apple probably it is looking to buy someone as well, because that's what you need. You need your own LLM. You can't rely on someone else to provide the LLM if you're a large tech.

I don't know if it's gonna solve because with llms, the clear leaders have been established, it's Open AI, Google, Mistral, and Meta, the four or five players. All the smaller players are finding it's too expensive to constantly train their llms. So the con solidation is happening. And now obviously you know they are getting sold, but in this case, Snowflake bought them first. I'm sure Amazon is looking to buy somebody, and so are other company Apple probably it is looking to buy someone as well, because that's what you need. You need your own LLM. You can't rely on someone else to provide the LLM if you're a large tech.

How many large language model companies are there out there? Is my son starting up one, then he's gonna get bought after like a gajillion dollars.

How many large language model companies are there out there? Is my son starting up one, then he's gonna get bought after like a gajillion dollars.

It's very hard to start an LLLM company one because you need a lot of compute the Nvidia GPUs, you need a lot of data like Reddit is one data set. You need thousands of data sets to create your LLLM foundational model, and then you have to constantly train these models. So this is an expensive proposition and I feel that's why the hyperscalers are the ones who have the capex and the d pockets to do this.

It's very hard to start an LLLM company one because you need a lot of compute the Nvidia GPUs, you need a lot of data like Reddit is one data set. You need thousands of data sets to create your LLLM foundational model, and then you have to constantly train these models. So this is an expensive proposition and I feel that's why the hyperscalers are the ones who have the capex and the d pockets to do this.

And okay, bear with me on this dumb question.

And okay, bear with me on this dumb question.

And we care about this because why because then I can go on Google and then they tell me stuff.

And we care about this because why because then I can go on Google and then they tell me stuff.

Think of you know, co pilots and AI agents, all these new concepts that are coming to the scene are enabled by llms because llms have the IQ of an average human being, and then it can be you know, customized to do specific tasks according to you know, customer service or booking travel. But basically, behind the scenes, you've got a very intelligent algorithm that has a knowledge of you know, the volte and you can talk to it, you can converse in it. It's not canned answers. It's not a database that you're searching for. It's an intelligent person.

Think of you know, co pilots and AI agents, all these new concepts that are coming to the scene are enabled by llms because llms have the IQ of an average human being, and then it can be you know, customized to do specific tasks according to you know, customer service or booking travel. But basically, behind the scenes, you've got a very intelligent algorithm that has a knowledge of you know, the volte and you can talk to it, you can converse in it. It's not canned answers. It's not a database that you're searching for. It's an intelligent person.

Okay, this is not like me asking Alexa what's the weather like?

Okay, this is not like me asking Alexa what's the weather like?

And she's not like, I don't understand your question.

And she's not like, I don't understand your question.

Like.

Like.

It's not that No, God, it's much more sophisticated.

It's not that No, God, it's much more sophisticated.

All right.

All right.

I mean, whatever video next week and Vidia next week starts up ninety percentage year, they better Is this another quarter where they have to knock it out of the ballpark?

I mean, whatever video next week and Vidia next week starts up ninety percentage year, they better Is this another quarter where they have to knock it out of the ballpark?

I mean, the basic thing is are they under shipping demands? Still?

I mean, the basic thing is are they under shipping demands? Still?

Are they under shipping demand?

Are they under shipping demand?

Because everyone corroborates that vir supply constraint when it comes to Nvidia GPUs, So they will keep writing this until the you know, the demand environment is such a demand exceed supply, and I think they have a good shot of beating and raising a game.

Because everyone corroborates that vir supply constraint when it comes to Nvidia GPUs, So they will keep writing this until the you know, the demand environment is such a demand exceed supply, and I think they have a good shot of beating and raising a game.

The options market is interesting.

The options market is interesting.

Isn't pricing the same kind of exuberance that we've seen in the past, which doesn't necessarily mean anything. It just means that maybe positioning is in a particular place going in and we're not expecting that exuberant call buying.

Isn't pricing the same kind of exuberance that we've seen in the past, which doesn't necessarily mean anything. It just means that maybe positioning is in a particular place going in and we're not expecting that exuberant call buying.

Man Deep, thank you so much. We appreciate you always.

Man Deep, thank you so much. We appreciate you always.

Man keep saying. Bloomberg Intelligence Senior Technology and Lest.

Man keep saying. Bloomberg Intelligence Senior Technology and Lest.

You're listening to the Bloomberg Intelligence Podcast, catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast, catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa playing Bloomberg eleven thirty.

This is Bloomberg Intelligence Radio. We bring you all the top news and business, economics and finance through our lens of our Bloomberg Intelligence analysts.

This is Bloomberg Intelligence Radio. We bring you all the top news and business, economics and finance through our lens of our Bloomberg Intelligence analysts.

They're four hundred of them worldwide.

They're four hundred of them worldwide.

They covered two thousand companies and one hundred and thirty industries.

They covered two thousand companies and one hundred and thirty industries.

We got you covered. We just talked about retail.

We got you covered. We just talked about retail.

We saw Walmart, we got Macy's targets and dollar stores also coming up. So we go nerdy because we can do that on Bloomberg Intelligence Radio and we can talk to a forest and paper products analyst. It's a box analyst. Our box is shipping. Where's the demand? How's it going? Ryan Fox is a Bloomberg Intelligence market analyst for forest and paper products and he joins us. Now, Ryan, we are super excited to talk to you about this. How's the box business?

We saw Walmart, we got Macy's targets and dollar stores also coming up. So we go nerdy because we can do that on Bloomberg Intelligence Radio and we can talk to a forest and paper products analyst. It's a box analyst. Our box is shipping. Where's the demand? How's it going? Ryan Fox is a Bloomberg Intelligence market analyst for forest and paper products and he joins us. Now, Ryan, we are super excited to talk to you about this. How's the box business?

Well, the boxing business is not seen as best days. We had the worst first quarter in the last eight years. Box shipments are down over the last two years almost ten percent. And maybe there's some silver lining because the second quarter, statistically speaking of the last thirty years has more often than not been a better quarter than the first. So we do see maybe there's going to be an increase. On average increase was three point two percent, like I said, over the last thirty years. However, given the backdrop that we're seeing in the broader economy, we think we're going to see a more muted increase, maybe more like one percent sequentially, which would still be a year over year to client of about one percent.

Well, the boxing business is not seen as best days. We had the worst first quarter in the last eight years. Box shipments are down over the last two years almost ten percent. And maybe there's some silver lining because the second quarter, statistically speaking of the last thirty years has more often than not been a better quarter than the first. So we do see maybe there's going to be an increase. On average increase was three point two percent, like I said, over the last thirty years. However, given the backdrop that we're seeing in the broader economy, we think we're going to see a more muted increase, maybe more like one percent sequentially, which would still be a year over year to client of about one percent.

So Ryan, I know you and other analysts investors look at the year on year kind of growth rates and that's kind of big. Just give us a sense of the absolute numbers, like how many boxes whatever units you use, are being used, like today versus twenty nineteen.

So Ryan, I know you and other analysts investors look at the year on year kind of growth rates and that's kind of big. Just give us a sense of the absolute numbers, like how many boxes whatever units you use, are being used, like today versus twenty nineteen.

Yeah, so in one of the best terms is in billions of square feet. Right, so when you were to if you were to take a box and unfold it and lay it out flat, you know, you just do link them with and all that.

Yeah, so in one of the best terms is in billions of square feet. Right, so when you were to if you were to take a box and unfold it and lay it out flat, you know, you just do link them with and all that.

So comes my job to break them down of course.

So comes my job to break them down of course.

Understood, Well, yeah, you got a flatinum and then put them in your recycling.

Understood, Well, yeah, you got a flatinum and then put them in your recycling.

Is that just throws them in their recycling? Well, trying to think out of the side of the box.

Is that just throws them in their recycling? Well, trying to think out of the side of the box.

Oh no, no, no.

Oh no, no, no.

No, right, all right, right, let's get back to it just again today's demand versus you know, pre pandemic.

No, right, all right, right, let's get back to it just again today's demand versus you know, pre pandemic.

Yeah. So in twenty nineteen that volume was like three hundred and ninety three billion square feet, right, a big, big number. During the pandemic, it grew to four hundred and sixteen billion square feet. Last year it fell to three eighty and this year our projections, our mid year outlook says it's going to fall again to about three seventy six. Yes, again a slight decline over last year. We're just not seeing super strong economic signals and our box so our box producers. You know, Green Markets is a Bloomberg company. They go out and they survey box producers all across the US, and they have a good signal. Right The signal right now is that second quarter could be up as much, which is three and a half percent, which is in line with the statistic statistics we've seen over time. However, again, first quarter was down substantially, so we think there's some optimism rror and we would we would guide down based on that known optimism error.

Yeah. So in twenty nineteen that volume was like three hundred and ninety three billion square feet, right, a big, big number. During the pandemic, it grew to four hundred and sixteen billion square feet. Last year it fell to three eighty and this year our projections, our mid year outlook says it's going to fall again to about three seventy six. Yes, again a slight decline over last year. We're just not seeing super strong economic signals and our box so our box producers. You know, Green Markets is a Bloomberg company. They go out and they survey box producers all across the US, and they have a good signal. Right The signal right now is that second quarter could be up as much, which is three and a half percent, which is in line with the statistic statistics we've seen over time. However, again, first quarter was down substantially, so we think there's some optimism rror and we would we would guide down based on that known optimism error.

Ryan, this is a really dumb question, but I feel like the trend is don't ship stuff in a box like I can order from different places. That shoes, I agree that they're in a shoe box, but you don't put them like another box. You just ship that shoe box. Is that eating into this market at all?

Ryan, this is a really dumb question, but I feel like the trend is don't ship stuff in a box like I can order from different places. That shoes, I agree that they're in a shoe box, but you don't put them like another box. You just ship that shoe box. Is that eating into this market at all?

It certainly is. And I could talk for an hour about this but I won't. But yes, you're exactly right. There is a there's a definite move by brands to reduce their waste and become more sustainable. So you are seeing companies like Amazon ulize paper bags and things like that.

It certainly is. And I could talk for an hour about this but I won't. But yes, you're exactly right. There is a there's a definite move by brands to reduce their waste and become more sustainable. So you are seeing companies like Amazon ulize paper bags and things like that.

So talk to us about the green options out there. What are the green options?

So talk to us about the green options out there. What are the green options?

Well, it depends on what you mean by green, right, So they are well, so there are two main initiatives, right, So the first green initiative is to find something that's more circular in nature, like a paper bag, because most people identify paper as a more sustainable, more circular option. Now, if you're looking at the data, that paper may have a higher greenhouse gas emission index. So while it's more circular, it's going to have it's it's trade offs. If you're looking for chasing a greenhouse gas initiative, maybe you're going to a plastic something that's lighter in weight. Very broadly speaking, greenhouse gas emissions follow weight, So if you're using a very light weight paper or plastic bag, it will likely have a lower GHG emission, but it's less circular. So it really depends on the goal of the company.

Well, it depends on what you mean by green, right, So they are well, so there are two main initiatives, right, So the first green initiative is to find something that's more circular in nature, like a paper bag, because most people identify paper as a more sustainable, more circular option. Now, if you're looking at the data, that paper may have a higher greenhouse gas emission index. So while it's more circular, it's going to have it's it's trade offs. If you're looking for chasing a greenhouse gas initiative, maybe you're going to a plastic something that's lighter in weight. Very broadly speaking, greenhouse gas emissions follow weight, So if you're using a very light weight paper or plastic bag, it will likely have a lower GHG emission, but it's less circular. So it really depends on the goal of the company.

Are people willing to pay more for greener packaging?

Are people willing to pay more for greener packaging?

Do we know that?

Do we know that?

Is?

Is?

They say they are, They say they are, but no one, no one's really, no one really is. I mean, at the end of the day, it's I think it's all it's just opinion and it doesn't really mean anything.

They say they are, They say they are, but no one, no one's really, no one really is. I mean, at the end of the day, it's I think it's all it's just opinion and it doesn't really mean anything.

So what did some of the big what are the companies that you follow that if if thats just want to get exposure to this, where should they look?

So what did some of the big what are the companies that you follow that if if thats just want to get exposure to this, where should they look?

Well, I mean on the on the Bloomberg terminal are our packaging dashboard? PACKG is the call numbers there we follow International Paper, West Rock Packaging Corporation of America are the big three in the US. They represent about a forty five billion dollars market cap.

Well, I mean on the on the Bloomberg terminal are our packaging dashboard? PACKG is the call numbers there we follow International Paper, West Rock Packaging Corporation of America are the big three in the US. They represent about a forty five billion dollars market cap.

What represents the best kind of value? Like, how are these guys sort of trading right now? What's priced?

What represents the best kind of value? Like, how are these guys sort of trading right now? What's priced?

In?

In?

A great question? That's way above my scope. So I'm more of a market analyst and follow the bigger industry trends, supply, demand and pricing. I don't really get into the stocks themselves or the companies themselves.

A great question? That's way above my scope. So I'm more of a market analyst and follow the bigger industry trends, supply, demand and pricing. I don't really get into the stocks themselves or the companies themselves.

That's fair enough.

That's fair enough.

So can I make an inference about inflation out there by looking at volumes of packages being shipped and all that kind of stuff?

So can I make an inference about inflation out there by looking at volumes of packages being shipped and all that kind of stuff?

Absolutely?

Absolutely?

What is it?

What is it?

So? How does that work?

So? How does that work?

Yeah?

Yeah?

Well, well so there is there's some discrepancy. So right now, if you were to look at like some of the federal data, a real PCE for goods, for instance, that number is still very very high relative to the fact that consumer goods are not trending very well. I mean, if a very high number ninety percent plus of consumer goods ride in a corgated box and that volume is down ten percent essentially over the last two years, how in the world is our goods spending still up? If if it's a real number and it's an adjusted for inflation, there's there's a disconnect there, and I have some speculation on why that is. I think, you know, historically speaking, when you think of things like software. Thirty years ago, software came, it was an actual thing, it was a disc that may still be one of the items. It's accounted as a good, but it's no longer a good. It's it's a downloadable thing, it's a software as a service, it's a something else. And so there's probably some noise in there that's not allowing us to see some of this clearly.

Well, well so there is there's some discrepancy. So right now, if you were to look at like some of the federal data, a real PCE for goods, for instance, that number is still very very high relative to the fact that consumer goods are not trending very well. I mean, if a very high number ninety percent plus of consumer goods ride in a corgated box and that volume is down ten percent essentially over the last two years, how in the world is our goods spending still up? If if it's a real number and it's an adjusted for inflation, there's there's a disconnect there, and I have some speculation on why that is. I think, you know, historically speaking, when you think of things like software. Thirty years ago, software came, it was an actual thing, it was a disc that may still be one of the items. It's accounted as a good, but it's no longer a good. It's it's a downloadable thing, it's a software as a service, it's a something else. And so there's probably some noise in there that's not allowing us to see some of this clearly.

That's really interesting.

That's really interesting.

Thanks a lot, Ryan, this was great. We both really loved this segment. A Ryan Fox, Boomberg Intelligence Analyst, covers paper packaging trends, sort of diving in to all of that.

Thanks a lot, Ryan, this was great. We both really loved this segment. A Ryan Fox, Boomberg Intelligence Analyst, covers paper packaging trends, sort of diving in to all of that.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

I'm Alex the alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We cover all the top news and economics and finance through a lens of our Bloomberg Intelligence analysts. They cover two thousand companies one hundred and thirty industries worldwide, and there's about four hundred of them and a large chunk of them actually cover ESG. So let's rewind to about four years ago, middle of COVID. Everyone was talking about ESG. Blackrock was talking about allocating a bunch to ESG.

I'm Alex the alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We cover all the top news and economics and finance through a lens of our Bloomberg Intelligence analysts. They cover two thousand companies one hundred and thirty industries worldwide, and there's about four hundred of them and a large chunk of them actually cover ESG. So let's rewind to about four years ago, middle of COVID. Everyone was talking about ESG. Blackrock was talking about allocating a bunch to ESG.

This was where all the money was supposed to be flowing.

This was where all the money was supposed to be flowing.

A new report from Sin Contractor She's Bloomberg Intelligence senior ESG strategists says that liquidation of US ESG ETFs reached almost thirty percent of all closings so far this year and could continue amid some slowing our flows, particularly if the backlash we've now seen in the US on ESG continues. Geen, great to see you, thank you for joining in studio. So I guess let's take a step back for a second, and ESG it's environmental, social and governance. Right, where did that go so wrong? Like how do we get from twenty twenty to here?

A new report from Sin Contractor She's Bloomberg Intelligence senior ESG strategists says that liquidation of US ESG ETFs reached almost thirty percent of all closings so far this year and could continue amid some slowing our flows, particularly if the backlash we've now seen in the US on ESG continues. Geen, great to see you, thank you for joining in studio. So I guess let's take a step back for a second, and ESG it's environmental, social and governance. Right, where did that go so wrong? Like how do we get from twenty twenty to here?

So Alex, just to you know, paint a few numbers. In the first quarter, we saw about four billion in outflows. I mean, compare this to twenty twenty one, which is about I want to say, close to fifty billion in influats. Now, I wouldn't call it where we went wrong. I think what we're seeing today is slowing flows because you know, the market is maturing. But at the same time, these outflows that we're seeing, they're very concentrated to a few funds, so actually no il repurpose. Where we went wrong is that that rise in assets was very concentrated to a few funds and a few investors. So it's very noticeable when that comes out, and that's what we're seeing.

So Alex, just to you know, paint a few numbers. In the first quarter, we saw about four billion in outflows. I mean, compare this to twenty twenty one, which is about I want to say, close to fifty billion in influats. Now, I wouldn't call it where we went wrong. I think what we're seeing today is slowing flows because you know, the market is maturing. But at the same time, these outflows that we're seeing, they're very concentrated to a few funds, so actually no il repurpose. Where we went wrong is that that rise in assets was very concentrated to a few funds and a few investors. So it's very noticeable when that comes out, and that's what we're seeing.

So who are those investors or those investor types and why are they pulling the money out?

So who are those investors or those investor types and why are they pulling the money out?

So one example is ESGU. It's the icehes ESG aware it's probably the largest ESG ETF in the world. Last year it's saw about nine billion in outflows, and we attribute this to model portfolio changes, So you know, that could be allocative or it could be due to ESG. For example, you know, an investor doesn't want equity anyone, they just want cash. They just you know, sell out of equity. So whether it's ESG, whether it's not, to be honest, we don't know. A lot of these outflows are also from European investors. I wan't attribute at that to the backlash.

So one example is ESGU. It's the icehes ESG aware it's probably the largest ESG ETF in the world. Last year it's saw about nine billion in outflows, and we attribute this to model portfolio changes, So you know, that could be allocative or it could be due to ESG. For example, you know, an investor doesn't want equity anyone, they just want cash. They just you know, sell out of equity. So whether it's ESG, whether it's not, to be honest, we don't know. A lot of these outflows are also from European investors. I wan't attribute at that to the backlash.

Meaning that the backlash has been more in the US versus say, in Europe. Correct, you do we need to separate the the S and the G, separate the social from the government's from the environmental or at least separate the environmental part.

Meaning that the backlash has been more in the US versus say, in Europe. Correct, you do we need to separate the the S and the G, separate the social from the government's from the environmental or at least separate the environmental part.

I would say no, I mean, I know that's an argument, but I still think that ESG is about material rising opportunities to a particular company. For some it's E, for some it's S. So it's going to be very hard to talk about this separately.

I would say no, I mean, I know that's an argument, but I still think that ESG is about material rising opportunities to a particular company. For some it's E, for some it's S. So it's going to be very hard to talk about this separately.

To what extent is the environment for flows in ESG in the US versus Europe or US versus the rest world? How are they different?

To what extent is the environment for flows in ESG in the US versus Europe or US versus the rest world? How are they different?

Very different? Okay, so again the US four billion and outflows the first quarter, you're a total flows for about six billion in in flows so the rest of it was almost entirely Europe. So Europe continues to sort of it.