U.S. Power Crisis Leaves Millions Cold, Dark as Blackouts Expand

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. President Biden saying in a tweet, the US would excel his or what exceed excuse me, his goal of administering a hundred million vaccine doses in his first one hundred days in office. Tim also we saw US cases and hospitalizations dropping dramatically, suggesting that measures to interrupt transmission they are working, at least for now.

Fingers cross Yeah, for now, fingers crossed. The big question is are we sort of out of the woods at this point from the latest peak. That's something I've been thinking about a lot and a lot of people saying it could be another rough twelve to fourteen weeks because of variants. Let's check in with Dr Peter alp In, VP of a Doximity. It's a professional medical network for physicians, he joins us on the phone in San Francisco. That's where he has a private practice. Dr Alpern, good to

have you here with Tim and myself. How are you What are you seeing in terms of the number and severity of cases as well as the rollout of vaccines. Nice to be on the show, Thank you so much. Yeah, in San Francisco, we are seeing a decrease in general, so a decrease in the number of hospitalizations and also importantly improved UM, I see you capacity, as well as

the death rates from COVID starting to decrease. But of course death from the illness is a lagging indicators, so that's something that does take, you know, several weeks to sort of start to come down after we see the

number of patients being admitted come down. In terms of vaccinations, UM, we were had set up many vaccine sits here in San Francisco and in the Bay Area, but like most of the country, we are also prisoners to the UH the amount of vac scene it's made available to us, and so just recently, UM San Francisco has had to temporarily pause on vaccinating UM the citizens of the city

and county simply because of a lack of vaccine. So so here we are at the at the where daily levels are basically at their lowest levels in months, um doctor, Does this have to do with vaccine? Does it have to do with the fact that we're weeks after a holiday and the post holiday bump that happened is now going down? Why are we seeing the decline here? All of the above? Yeah, exactly, it really isn't all of

the above. M situation. So obviously, as people have the gatherings of around Thanksgiving and Christmas have sort of wound their way through the system and we and people were pretty good about not trying to get together for the Super Bowl, we seem to have experienced UM sort of the decline that we expected. And absolutely vaccinations are having

an effect. If you really think about what vaccination does, it's really about reducing that really severe illness and making it so that people who do catch the COVID catch coronavirus and leading to COVID will end up having more of a flu like illness, but will not have those extremely severe reactions which of course can ultimately and unfortunately

lead to death. What are you thinking as far as timeline for when we will see widespread inoculation, given that the Biden administration made this announcement today and that, you know, despite early speed bumps where it seems to be like

we are on a relatively good trajectory here. Yeah. So, um, that's a great question, you know, on on doximity, what we're seeing is, you know, we have the advantage of being able to see the conversations among hundreds of thousands of physicians, and what we're seeing is a general belief that with the new vaccines coming online, with Astra Zeneca and some of the other producers UM bringing on supply of vaccine UM, that we should be able to make a dent over the next several weeks to months with

just an increase in supply. So that's the hope. But as they say, um, you know, vaccines don't prevent the illness. Vaccination does, and um, so it is going to still be incumbent on all those local jurisdictions and health plans and insurance companies and everybody pitching in to be able to get those vaccines and everybody's arms. Dr Alpern, are you in favor of dose stretching policies, so stretching out the interval between the first and second doses. Yeah, so

there's been a lot of discussion around that. Um, that's not something that I'm absolutely an expert on. I I believe I follow what's being um uh you know, broadcast and written down by the CDC, and at this point that is not something that's it's in favor. And I know that there's a lot of experts and vaccines who are having a very um uh you know, robust discussion about this, and really for my position, UM, as a person who is delivering care, what I would basically do

is just really follow their guidance. What about schools and opening schools, Yeah, opening schools is um is obviously on the forefront of every everybody's mind and every parent's mind. Um. You know what we really need to do for schools is getting is you know, get our teachers vaccinated. Um. And I know that a lot of places are doing that as well. UM. I know there is a lot of data to suggest that bringing people bringing kids back to schools. UM is actually very you know, a lot

safer than than people may think. UM. But I do know that uh, um, you know, getting teachers and other school personnel vaccinated is really the key to that whole process. I want to just end talking a little bit about variants here. UM. How concerned are you about the spread of mutations variants that we've seen already exist here in the United States? UM, So I think the variant UM

is situated that the issue with variances is interesting. So most of the variants that we've seen don't seem to show, um, an increased virulence or severity. What they show is an increasability to you know, cause UM contagion and so UM. I think all the studies so far that have been done on the existing vaccines show that these vas existing vaccines are effective. UM. But but I think that the UM, I think that we're gonna have to wait and see.

Obviously this is very new to everybody else as well. UM. I do know that patients are concerned, and I do know that patients are asking all about these kinds of things, and I think what they need to do is to try to interact with their physicians by any means necessary, make an appointment or get a tellhelp, got it, got it, gotta run. Dr Peter Alper and Vice President Do Simity

on the phone from San Francisco. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. No doubt about it. Tim. A top story on this Tuesday, the energy crisis, gribbling power grids across the US and we're seeing blackouts leaving about finally in customers without electricity. Uh, it's all because of unprecedented coal weather across Texas and other states that are normally pretty warm this time of year. And get this, there

are global links to this. Briank Sullivan is Bloomberg News Weather reporter and he joins us now on the phone from Boston. M Brian, Let's start out with just the big question, right, like, how did this happen? The wet weatherwise? Why is it so cold in so many parts of the country that doesn't don't usually see temperatures like this. So during the first week of January, there was a burst of warm air over the North Pole and that

may sound um a bit of a paradox. But warm air will come in over the north pole, and what this does is it displaces the colder air up there. The you have the pole of vortex, which is like a girdle of wind that keeps the cold in the north pole. This warm air will weaken that and it allows the cold to spill out. So this has been weeks in the making, but it's you know, it finally got here at the end of last week and it's really dug in now, all right. So that on top

of how come the power grid couldn't deal with it? Well, that's good, that's a good question. And that's one of the ones that things that a lot of people are looking into. And part of it is that the cold was just so severe when it got into Texas. Um a lot of these places just aren't equipped in you know, the infrastructure isn't equipped to deal with such bitter cold. You know, in the north or the northern Great Plains for instance, they're used to see and temperatures go down

to single digits and whatnot. But in Texas now you have equipment failing and you know, it just turned into a cascade. So is there a climate change connection here? Is it too early to tell. Um, It's more a question of too early to tell. I mean, there are people who study the Arctic, and they've been studying the warming up there, the fact that there's a lack of sea ice and uh, for instance Judico and at a R and he says that there's definitely a climate change

connection here. Other scientists want to look at it longer, want to take more studies before they make a commitment. Hey, bron, what was to ask you about? Is the Texas Railroad Commission g Jim Right or a commissioner. He told Bloomberg TV that renewable energy sources such as wind turbines are diverting resources away from reliable fossil fuel sources like natural gas. So I want to ask you you study this is

alternative energy sources partly to blame. We have a story on a system right now by our colleagues, and I you know that that wasn't The conclusion I drew after reading the story was that, you know, I I didn't really see that in their reporting, So I wouldn't I wouldn't want to comment on that further. Is it more that the power grid problems and limitations and aging of

you know, which is not a new story. Brian, you know this well, you know, is it just I mean, we've been talking about this for years, for decades, right, Well, I mean, you know it's not just Texas either. I mean we're all the summer where it was extreme temperatures in the other direction, hot weather that caused all these problems in calif Fornia where they had issues, and there have been other issues in the Northeast as well. I believe in Long Island a few years ago had some

severe issues out to some severe weather events. So I think, you know, we're seeing the chickens are coming home to roost. I guess is what I would say, Hey, Brian, Um, what needs to happen with the grid, with infrastructure in California, in Texas and other parts of the country to make sure that this type of thing doesn't keep happening. The scientists tell me, we have to accept the fact that we live in a changing climate, in a changing world, and we have to prepare for it. Um. Insurers tell

me this as well. I talked to a lot of different insurance companies and they're always saying the same thing. The world is changing. Its changing at a very fast rate. And we have to prepare for it. Um. Every insurer I ever talked to they say, prepare, prepare, prepare, prepare, And you know, none of them dispute climate change. They say that it's coming, it's here, it's now, and it's a problem. It's why I really climate change. For such a long time people are like, well, it's you know,

not a financial story, it's not an economic story. And yes it is, and we have definitely seen it, you know, Brian, just quickly over the last few years, how much so it is. Oh, I totally agree with you. I mean, I think the climate change is a financial story and to look at it from any differently is the wrong concon to take, all right, because it's going to affect the banks and everyone else. Totally all right, Brian, thank

you so much. We'll appreciate your reporting. Brian K. Sullivan of Bloomberg News joining us on the phone from Boston. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stanovic on Bloomberg Radio. You're listening to Bloomberg Business Week Carol mass along with Tim Stanovic. Impossible foods cutting It suggested retail prices by twent at US grocery stores. This move seen as key by the company's president Tim to get people to try the brand

and keep on coming back. That's disclosure. Two pounds over the weekend. Two pounds all right, So let's get into it and let's see what he has to say. Impossible Foods. President A. Woodside is with us, joining us on the phone in Menlo Park, California. Denist by the way, former CEO of Dropbox, was the CEO of Motorola Mobility, put in charge of leading its transition after its acquisition by Google. Dennis, So nice to have you here with us. How are

you and tell us about the strategy. What was the catalyst? Well, first of all, thanks for having me Tim, thanks for being a customer. So the the catalyst. Look, you know, our mission is to completely replace animals in your diet, and for us to do that, we have to produce the product that tastes great. We have that, but it has to be priced right and people consumers are very price sensitive when it comes to their meat and the meats that they purchased in grocery stores. We've scaled so

quickly over the last year. We've done from two hundred grocery stores over seventeen thousand. That we've been able to get a lot of efficiencies in our supply chain and uh drive our costs down. So we we've passed those costs onto our consumers in the form of price decrease. We don't think this will be our last we have to peat with animal animal products, that we're going to do that. So when will it be as cheap as ground beef? Well, if you think about what we what

we do. We take plants and we turn them directly into meat. And what the animal does, it's the animals kind of an intermediary that uh that that requires a lot more land, a lot of water, a lot of labor, a lot of transportation oil gas to move cows around, that sort of thing. So in theory our products should be much lower priced than than cows over time, but it just takes time for us optimize the supply chain

to scale up. Uh. You know, animal based meat today is less than one percent of total meat consumed in the US. But that's gonna change pretty rapidly. And as that does, the cost for the whole industry, including ups will come down and we'll be able to compete much more aggressively on price. But timeline wise, though, is there are you thinking you know in years that you can count on one hand, or or is this like a decades long progression absolutely years that you can count on

one hand. There are poor of our product now or elements of our product now that are are at the cost of the cow. But there's a lot of Uh, there's a lot of processing costs and transportation costs, packaging, all those things that we have not yet fully optimized and that take that just take time and scale to get right. So the packaging, what what the actual products shows up in on shelf, that's expensive. But as you get bigger that those costs come down. So that's what

I was going to ask you. Is it just a case of when you're selling more Dennis, the math just changes. When you're selling more product, the cost go down. Is that what it comes down to? Or is it is it a case of being able to squeeze even more costs out of the current systems. It's a little of both. So what we do, what we've been able to do over the last year is go back to our suppliers UH and negotiate better prices. Because we're we're driving a

big part of their growth. We've also been able to get better utilization out of our factory, so we're running three shifts today instead of two. Uh. And you advertize that fixed costs of the factory over more products and that allows you to take your take your price down over time time. Hey, I'm curious see that stopping, that's just going to continue. I'm curious to Dennis, have you guys done some focus groups with customers are just like, it's too expensive right now. We just I can't do it.

I want to do, but I can't. So people, So first of all, over people who are trying impossible for the first time, they're coming their meat eaters, so so they are they are substituting impossible for for all kinds of meat products, not just ground beef. But and when we when they try it, the number one thing that they say they love about the product is the taste. It tastes just like beefs defa same nutritional profiles beef.

The one thing that they say that they don't like as much as the price, and that is absolutely a barrier to to repeat and repeat purchase and frequency of purchase. But we can get the price right. You know, that's a pretty pretty obvious lever to pull to to grow our our volume and continue to scale. How do the habits of how people are are eating this type of product,

how do they change or have they changed during the pandemic. Well, you know, so a year ago we weren't even available in retail, and when the pandemic hit, we realized that the retailer, we were available in two stores. We realized that we needed to scale up really quickly. And what we noticed was that consumers we were uh flocking to plant based products. They were cooking more at home, and

they were willing to try something different. They had a little maybe a little bit more time to cook or they were cooking and in the past they were would have been eating out. Uh, So they were open to trying new products. And that's why our sales have really taken off at retail. And what we're also noticing, obviously there's a lot more delivery activity. Consumers buying impossible on digital platforms, whether it's direct delivery from grocery through instatcart

or they're buying uh finished uh entrees through dordash. So so we're seeing growth across all of those areas. The one area that's obviously been impacted quite a bit are the smaller restaurants, which was really suffered. They talked us to Dennis about collaborations. I'm curious what lasting traction you are finding from some of the collaborations and partnerships that

you have been doing. We know all the folks in kind of the alt food space have been linking up with the likes of whether it's a Taco Bell, McDonald's and you guys, I know had teamed up last year, No, in twenty nineteen, I think it was with Burger King for Impossible Whoppers. So I'm just curious how those are helping you in your mission. Yeah, so we we have apostles now available pretty broadly in the U. S p K. You know you mentioned Burger King, Whitecastle, rever Rob and

Kidoga are just a handful. We added Starbucks Starbucks Breakfast Sandwich in the middle of the pandemic in June of last year, and we've and we've seen that product do incredibly well, exceeding both of our expectations. So these these partnerships are very important, and every restaurant operator is realizing they need to have a plant based meat option on

the menu. Consumers are are asking for for for choices and asking for alternatives, and so it's at the top of the top of agenda of every executive in the UH in the two SR space that I that I talked to for sure, UH and those who don't have a plant based meat option now are absolutely considering one. And Dennis, what is the difference between beyond meat and impossible foods in terms of in terms of taste of In terms of taste of product, I should say, yeah.

The two things that consumers tell us is, first of all, taste our product taste just like me. And survey after survey shows that the the liking scores of preference scores for our product versus animal based meat are relatively even, so people have a hard time telling the too apart. The second thing that that steps tell us is the

product handles just like ground beef. The color when it comes in raw, the way it transitions from a pink or a reddish raw state to a cooked state, the way it sizzles, the way it smokes, all those things, and and and that's UH mostly due to the intellectual property we have around an ingredient called hem which is found in every animal, but we've been able to, uh to to ferment it from plants and use that as the key ingredient that aids in the transition of of

the product and the color of the product. So it's meteor like, it's more like me. It's much meteor That's what we're trying to do. We're we are simply trying to replicate the animal in every sense, the nutritional profile over time, better the animal. We need to beat the beat the cows. What we say, well, and I have to say that in our lunch offerings here at Bloomberg, like often comes up some alternatives, right, and I'm not quite sure who who they are, um so, so I

can't speak to that. What I am curious though, to Dennis is you guys have been spending a lot on R and D and you plan to double the size of your R and D team. From what I understand, what's the R and D focusing on and does it include anything like three D meat, which is something we've started to talk about. You hear the Bloomberg Yeah, yeah, so so so what we're trying to do is replicate

every animal protein that you consume. Uh, there's well over a trillion pounds of animal protein consumed every year, So this market is absolutely massive. It's one of the largest technology markets, if you call the technology UH in the world, and there hasn't been a whole lot of innovation. We're eating kind of the same products our grandparents date prepared kind of the same way, with the same nutritional profile.

So we're we're one of the first companies that's focused at the molecular level on re engineering UH meat all from plats and so that's starting with ground beef because it's such an iconic product for most Americans. But focusing on pork. We have a pork product that we shared at c Yes last year. UH we sausages. We have lab prototypes of basically every meat imaginable, including steak UH and we see a day when we'll be able to offer any protein on the menu in a plant based form.

It might take it will take a while for us to get there, but that's what we're why we're investing so heavily. And are you going to go into also fish? And I know we've got somebody we've been planning to get on the show that's got plant bas shrimp. So I'm just curious. Is it just you can't go anywhere

and do and will you? Yeah? Well, well, we believe that the technology, we have, the intellectual property around him, which is in every single type of meat in the world, as well as all we've learned in building Impossible Burger, gives us the opportunity to compete in all those spaces. You know, for now it's our primary product is ground beef, but that's going to change very rapidly. What's the what's the exit plan here for for investors? You and I

were both thinking about this. Well, I mean, look, you're you know beyond me. The the I would argue the the chief rival UM is a publicly traded company. UM. You've raised a lot of money from a lot of significant investors. What's the I p O plan? Yeah, Well, Pat Brown, our our founder and CEO, he has said that eventually you know that we will we will need to go public. We will want access to the public market financings, will want to access to credit markets as well,

but we'll do that on our own timeline. We're well funded, as you mentioned, We've got plenty of cash in the bank. We have a number of big investments that we're gonna be making over the next year in capacity, so in manufacturing facilities UH and UH, and in new products that we'll be launching. UM. At some point in time, it will be the right time to make that kind of public decision, But for now, we're we're we're pressing ahead as a private company and continuing to scale our scale

the business. Well, it's safe to say, Dennis, there's some upside to that to not have to do this R and D and expansion and kind of experiment a little bit with maybe some new areas, to be able to do it without being public. Well, we are. Our shareholders are very supportive of us being very aggressive. They see

the size of the market UM. Bill Gates is recently talking about the importance of developed economies moving to more of a plant based diet or plant based meats, and how that's so important for the environment and for the sustainability of the planet. That there's there's a wave of consumer sentiment, government sentiment all behind supporting this this industry, and so our investors earned it for the long game.

If we are sitting here in ten years, I I believe a large percentage of all Americans diets will have moved to a plant based product and UH, and that's a very big business opportunity for us. And that's what our investors see, so they can be patient and UH and give us some time for that to happen. Is it becoming healthier though, like I look at sodium and

all those different things. Is it getting better? Absolutely? So. If you look at the sausage in the UH Starbucks Impossible Breakfast sandwich as an example, UH, that contains about a third fewer calories, meaningfully lower satiurated fat, no cholesterol whatsoever. So sausage is a is a really indulgent product. It tastes amazing, but it's got it's got a lot of saturated fat, it's got a lot of you know, a

lot of cholester a lot of calories. So you know, in our first iteration we've been able to reduce that quite meaningfully. And as we can see to innovate, we'll get better. So the product will get healthier, will have different nutritional profiles. UH. That as we respond to consumer demand and also as we just continue to improve upon our own technology. It really is a technology business, and in the past food has not been thought of that way.

That's fascinating, Like to think about it that way, and I agree. Dennis, Thank you so much and thanks so much for giving us such a large trunk chunk of time. We really appreciate it. Dennis Woodside, he's president and impossible Foods on the phone from Menlo Park, California, Brother macro a journal. Yeah but you let me drive? Oh no, no, no, no, drive home, honey, please, I'll do the right gravel. Excuse me, I want to drive. Just drive, baby, it's the questions trying.

This is the drive of the close radios. All right, just got about thirteen minutes left in today's trading session. It is time for the drive to the closed duck Cioco back with us CEO on partner at Cavar Capital Partners roughly million dollars in assets under management, and they're based in Leewood, Kansas, and Doug joining us once again from there. Doug, Hey, good to have you here. How are you hey? I'm great, Thank you, thank you for having me on. Do you have Kansas? Is it? I mean,

do you have Kansas? Is it? Do you have snow? Is it cold? What's going on? It is beyond cold. It is we are in the middle of the polar bar tex We woke up this morning was minus ten now plus eight, so we really flipped at the scripts and the sun's out, which is helpful. But it's gonna be with us below freezing, I think for at least another four or five days. But blow zero all weekend. That is crazy. But you've got power right and you're safe. It's rolling. Yeah, the first time I've been here twenty

some years, I've never seen it happen before. They're rolling the grids around town with some regularity. I hope I always stay connected for the extent of this conversation. He so, So what does that mean though, for for you moving forward? I just I mean, if this is like the first time in decades that you've experienced this, I mean, does that mean that you're going to go out and buy a generator? Does it mean that you're going to make changes to your home? Uh? Probably neither, Tim, But that

might consider either if I actually owned any tools. But the reality is just such an outlying event I don't think will make much in the way of lifestyle adjustments, you know, an anticipation of it being more regular, But how does it make you think about climate change and the financial impact? It is having the economic impact it

is having on our world. I mean, I go back a few years and people are like climate change, it's, you know, we don't have to think about it, and increasingly it's it's much more of a story that impacts all of us on an economic level and a financial level. Yeah. I think that's a great thought, Carol, and I do think it is not inconsistent with the way a lot of information is transmitted, I mean, with its immediacy intensity, and then you know, whatever we feel it's appropriate reactivity.

But you know, I think that it's it's so dispersed and hopefully what we learned or what what other cities and communities have learned and dealing with something like this will be something that can be leveraged in more widespread elevation of people, knowledge based and preparedness in the future. But it's just it is undeniable that it's something that's going to have an impact on cash flows, profitability, dispersion

of assets. And if you don't take it into consideration as an investor, I think it's to your own peril. So to that end, Doug, where are you seeing opportunity in the markets right now? Yeah, we we see a lot of opportunities to him. I mean, I think if you look at the market and in hitting new highs and and you know, it seemingly each day and each week.

It was so funny a couple of weeks ago and three and a half percent downturn of the market and the worst week since October, and I really thought that might have some traction until the following week and was the best week since October. And then we returned at all time high last week. And you know, we do still think that there's a lot of opportunity in certain sectors of the market if those rotation, which is the underway,

continues to demonstrate some traction. Because we're very bullish on the economy in two thousand twenty one, it's just a function of finding the appropriate assets to have that reflected in areas of the market that are not overvalued. Well, and I know we don't normally talk specific stocks, but what about areas because we've spent a lot of time Doug talking about the small cap space. We talked about microcaps which are really outperforming, Uh this year. Where do

you see the opportunities, Yeah, a few areas. You know, we are big believers in that there are going to be some very permanent and positive, positive residual impacts from the pandemic, and finding those opportunities should provide some pretty interesting and outsized return potential opportunities. And within that um uh intro, like we love fintech, right, if you think of it's really amazing just a year ago, how much, how many what percentage of all transactions were still consummated

in cash in this country? Right? And then you flashboard where no one wants to touch cash of their own and wants to touch someone else's cash, and wants eavening their homes, and it's just ushered in this this this incredible opportunity for digital exchange of goods and services. So that's one area. You know, healthcare and life sciences did very well as a sector last year. We think it's

not even scratched the service of its potential. You know, hopefully the hurdles to get life saving products and formulas to market have now been permanently and positively lowered, and that's gonna usher in kind of a whole new generation

of interesting life sciences and biotechnology companies. And then certainly even within emerging market, especially talking about this I think when I was on in December and seeing e M gained prominence this year because of the labor, intellectual capital outsource, and it's taking place with no barriers, right because if you can't go across town, there's really no difference between going across an ocean. And we think they're going to

continue to enhance margins, introduce new opportunities. The weakening dollar as a is a big part of that, as is sort of that the the the demand that tend up for the consumption of a lot of natural resources that it didn't missed a certain parts of the M world. Are you planning for some sort of correction here, Doug? You did say a few moments ago that you know, the sell off that we saw a couple of weeks ago,

you thought it might have some legs. Are you expecting some sort of correction, some sort of sell off in the near future. I mean, I don't know tim anymore than we would typically be expecting such in any given year. And I think I saw a couple of weeks ago that the average pullback in any twelve months or counter years about fourteen and a half percent, going back to night and last year, we had obviously the lopper of

all pullbacks. We also had to know a little aftershocks one in September, one in October, and two thousand nineteen had none in two thousand eighteen had a big one in the fourth quarter. It would be hard pressed for

us to escape a draw down. I think this year that wouldn't be honor around that average pullback because the market, as I said earlier, is reasonably overvalued if you just consider the market, and that's the big part of its composition is because of the mega caps and the text sestors,

tech sectors, pre text sectors, pre evidence. But we still think if you consider some of the other areas that have not taken place and not that that participated last year, there's still areas in the market that will command opportunities to put dry powder if we do get that, do you hey, what do you make? Um Doug of Treasury yields up to the highest since February of our story says that these stimulus impacts still kind of getting priced

into that trade. But do those higher rates still low historically start to get pro you know, problematic any time? Or are are they an indicator of something that we need to be concerned about going forward. I think you should always be concerned. I Right now, I think Carol, we're in the positive aspects of what's taking place right If you think we've seen a lift and we know the set is anchored to the front end for probably

at least eighteen months, maybe a little bit longer. So if we see a lifted interest rates, it's positive for three reasons. One of steep Field curve is positive for financial services companies, which are still, you know, the key catalyst to expressing money into the economy to exhibit that multiplier effect to better savings rates. We have so many clients and there's so many people out there that don't want to be forced into taking risk to earn a

reasonable rate of return for a conservative allocation. And three, you get this return of constructive pricing power in the form of modest inflation. That's positive right for companies, particularly as we see kind of the global economy opening up and they're exhibiting and experiencing more demand for what they're selling. A little pricing power I think is very positive for

valuations in cash flow generation. Democrats right now are trying to get other Democrats, some more moderate democrats on board with at one point nine trillion dollars spending package from the binding administration. Doug, what do you want to see out of Washington? What's effective policy? You know, I don't know that we did we'd get that much to him.

I don't know that we need that much, particularly because I think it's logical to think there's going to be an infrastructure bill that gets introduced in the not too distant future after the blessing of the next pandemic stimulus plan um. I think that the set up in Washington is actually pretty positive for the market and the economy in general because there is that that quote unquote beneficial gridlock.

But I don't feel like any single party is going to have this clear pathway of ramarting legislation that's superpartisan. I think because of that, regulation stays reasonably low, taxes stay reasonably low, and that is by a large pretty positive for the economy and subsequently the market. Hey just got thirty seconds left here? Forty seconds? Is there one place in the market you definitely don't want to be right now? Oh, I don't know. I mean, I think

that's a hard that's a hard call to make. I mean, I think it was some of the speculation like that that we're seeing around, um the spacks and some of the cheerleaders and the short squeezes. And you know, it was interesting back twenty years ago, right, Those fomo instincts were hard to turn back during the dot com years.

But I just think super selectivity is really important. And ultimately, if there are no cash, lest discount, no tangible operations to assess, the whole process possesses a lot of speculation. You need to be careful. Hey, I didn't hear you say corn. Okay, nothing in that portfolio, al right, Desioca be well, stay warm. B B Safe, Chief executive Officer, partner at Covar Capital Partners, roughly nine hundred million in assets under management, on the phone from a really chilly Leewood, Kansas.

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