Surveillance: Trumponomics Not Unlike Mussolini, Posen Says

Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and of course on the Bloomberg So a good amount of time this morning with Adam Posen of the Peterson Institute. He has taken over from Fred Burgston brought in all sorts of top like talent, including Olivia Blanchard of I am f in the Massachusetts Institute of Technology. Dr Posen, Good morning, eighteen things to speak to you about. Let me start with Europe because I know David wants to

get to American economics as well. You are a congenital optimist. Can you be optimistic on Italy clearing its social and political psyche and markets? Of a genital optimist? Mr Keane with low expectation, so I'm always satisfied. Um, I think Italy can clear this mess in the banking system. I think Italy can continue to be aggressive about its fiscal situation, as it has been running a primary surplus for quite some time. I think getting Italy beyond that into a growing, vital,

lively economy is a much harder task. I mean, David, this is a critical issue. Just Stiglets among others taking a basic Frankly blench had like equation and in the denial dominator David Gurry is this strange little g and if the little G doesn't go, the rest of the equation doesn't matter. That's all there is to it. Let me bring it to to the US is as Tom promised, and and Dr Posen. I wonder if we are any closer to having a definition of what trump ponomics is.

I think we are. Um, we can always hope it changes, both in the sense that what it is isn't very good and in the sense that every president shouldn't be stuck with accusations of hypocrisy when we want them to learn and adapt. But trump ponomics right now seems to have several components, and the key guiding philosophy is that it's actually a very arbitrary interventionist for economics, it's far

from conservative, far from market. Whether it's in trade deals they're trying to target particular deals about particular countries on a bilateral basis, in particular industries, whether it's deregulating specific industry in specific ways, like they plan to do with energy, including coal, Whether it's a tax code that's designed to favor specific groups of people, like people with large inheritances.

I mean it is it is a economics that either genuinely believes or rationalizes such behavior as better outcomes than letting either the market work or having general economic principles, and most economists don't buy it. Is it something wholly new or can you trace its evolution to to other schools of economics? Um you, I'm about to say something that that is going to sound more political than I

mean it to be. It is not dissimilar from what Peron did in Argentina, or Mussolini did in Italy, or various more recent Latin American populist movements did in the seventies and eighties nineties. My colleague at Peterson Institute, thanks Tom for the shout out. Monica Dbolah just wrote a very prerogative essay for us that's gotten a lot of play.

Taking lessons from the crack up in Brazil over the last few years, where they used the bnd S National Bank as a piggy bank for particular projects and chrony capitalism, We've seen something similar occasionally in Asia Indonesia before the

the economic crisis. I mean, again, I'm not trying to just put labels on things, but when you have a government that is committed to targeting specific industries, deals, businesses through individual deal making by the people in power, even if you don't accuse them of corruption, you are distorting the economic system. When you look at this infrastructure package, Uh, it's been floated, hasn't been proposed, but it's been floated.

Do you do you think that it's too light to have a debate over its its merits and efficacy or we will pass that. No. No, I think it's absolutely the right time to have a debate about it. It hasn't gone to Congress yet, and hope that Speaker Ryan and the leadership on both sides of the Aisle gives

us a constructive debate. I mean, broadly speaking, the idea that there is a huge load of infrastructure to be done in the US, that we haven't kept up with needs and that there could be job benefits from doing so in an environmental low interest rates is something I

think almost everybody can agree on. The question is how much of the money is spent on things that are targeted that our finite and involved maintenance and rebuilding, as my colleague of a blood Chart has said, versus how many things are handouts to private sector people who were going to do projects anyways, and you just subsidize the

projects they're doing. It's also a question of how much productivity gain you get out the other end, and you know some you're never going to get a winner on every project, but you want to have a portfolio of

projects that's broadly conducing to productivity gains. That remains to be debated and specificy rat felt choice that he's the CEO of NASDAC head of an event this morning the Council inform E Legends will be speaking with our editor in chief John mcilcoy about the the effective the U S presidential election, the Bregs referendum and and all of that on market. So let's start there, and with all the volatility we've seen. Is this the new normal? The

volatle markets? We've been saying, well, I think we've been through a period of time of depressed volatility, so I think the new normal would be back to what I would call normal. So we expect volatility to be higher than it has been the last three to four years. What you know, You you look at the Brekes reference, you look at what we we've seen here after the US presidential election telegraph for us. What you think investors

are thinking of what they were thinking on election night? Well, I think what was impressive to me is the market quickly realized that they had elected a pro business president. So you had the emotion associated with other issues that quickly went to the background said okay, we have now a president who wants to be pro business, and the

market responded accordingly. I also think the market responded intelligently in that certain stocks to particularly well, uh, you know, better than the market recognizing where the pro business policies might lead us. It wasn't long after the election that you saw on the transition team's website their first priority. The first thing they posted was about their desire to do away with with Dodd Frank. What is the regulatory landscape.

What does that terrain look like once Donald Trump becomes president. Well, I believe when Donald Trump becomes president, you'll see a period of refinement as opposed to replacement. So clearly Dodd Frank has many areas that need improvement, and hopefully the focus is on that. But like anything else, there's parts of there are fine, parts of it are okay or good,

and hopefully that stays. Take through a few of those if you would, you you've watched this unfold, You've watched the implementation of that law through the rule writing and the votes and the more rule writing. What should stay in your mind? What's worked well and what are the deficits as you see in Well, I would say anything that brings transparency to markets is good. Right as NAZAC, we believe in trans parent markets. So we saw increased

transparency in the market. Anything that restricts liquidity coming into the markets we put in the bad categories. So you have different rules Vulker and others that really hamper the bank's ability to support and really make the markets more deep and liquid. What's your relationship been like thus far with the with the President elect, with the transition team, I imagine they are curious about what you and others

think should happen. Have come January? Well, I think they're very busy and not so much focused on where the exchanges are right now, but I think that will be uh An increased topic is some of the you know what i'll call the headline and appointments and our issues have put to bed? Is that is the relationship between New York other financial capitals in Washington better than it had been? Or do is that that geographic divide still something that needs to be overcome. I think it's somewhat

needs to be overcome. I mean, we definitely had a period, We've been through a period of time where everything has been centered around Washington and US in the financial center in New York has seen as somewhat the big evil. Uh. So hopefully we'll enter a time where you have a more productive working relationship with the policymakers down in Washington. Bob, I see Hunter Maritime acquisition, which I guess was an I p O that the NAS deck did a week or so ago, And I don't want to nail you

on it because it's all the detail here. I don't really don't understand it's a ball dry shipping thing, and that the exchanges in the markets are driven it seems by ETFs and by closed end funds and all that. Are they your friend or enemy at the NAS deck to financial engineered instruments get in the way of a better market in a better marketplace, I I don't believe so. So certainly you see the rise of passive investing, and

I think that trend line will continue. I think you'll see a greater acceleration of what we call smart beta, that is passive, passively managed with some degree of intelligence to that. So I think that's represented a innovation in the marketplace I think has served investors very well. But the lifeblood of the market still is operating companies that come to market I pos that come to market, and

obviously our established companies as they continue to grow. There was a period of time when I was talking with our ip O reporter here, Alex Brinka, and she was desperately hoping there would be some I p O action. We have a bit of a lull there for a while. What's what's the outlook for companies going public? Well, I would say two thousand sixteen is a year of quality. So If you look at the i p o s have come public this year, certainly they're down. We've had

eighty five, so it's not non existent. We've made eighty five I p o s this year, but they're up. What do you something per cent since the I p O date and that's different shares you gave us were great? You know you know anything? Twins? Do you know that your twins? Your twins are all blind trusted with bob Byfield. There we go, We're we aimed to please Tom, so

we're we're pleasing. So we've we've seen quality and I believe that the quality of the i p os in a given year is a predictor of the quantity of the I p o s in the following year. So I think two thousand seventeen, based on the quality of this year, will be a strong year fry p os. And we do see the calendar picking up, the backlog picking up. Obviously, external events can change that. If you

look at it today, we're saying some building momentum. As you talked to two executives that companies considering going public, what's the biggest hurdle still is an uncertainty. What are they what are they saying to you, is they as they weigh that decision to go public. Well, one is you have to have structural reasons why you should go public, and uh you should not be focused on the particular openings of the windows or not. Right. We tend to

focus then on the week or two before. But you know, do you need currency to make acquisitions, you need to provide liquidity for employees, you need liquidity to grow Those are the real reasons why you should come uh come public. One of the reasons you stop by today was to talk about technology and the idea of where does let's bring it to the nasdack. What's the next next for the exchanges in technology, particularly wrapped around dovetailing equity, more

markets into derivative markets. Yeah, I would say this when we think about ourselves, we think of ourselves as a technology company, and we're spending a lot of time, effort, and money with respect to machine learning, big data. Uh, not so much artificial intelligence, but close to it. So you're seeing the ability of machine learning to really change the nature of how work is produced in financial services. So we're like that was the record jargon to learn

for November. But there what translate that for us. I'm gonna try, Tom, I'm gonna try as far as I can. So the low hanging fruit we have is a surveillance. So right now, there's so much activity going on in the marketplace, and we have tools today that recognize patterns and say, okay, this pattern looks like something suspicious might be happening. There are so many false positives in those patterns.

So now we want to put machine intelligence to that's okay based upon what I've learned in a dynamic fashion. This is not a positive of this is a negative, and then isolate down to things that should be focused on. The machine intelligence means a Bloomberg terminal, definitely, okay to the top of every pyramid table. You have been incredibly acquisitive over these last few years, acquiring exchanges and other companies. Yeah. Do you expect more of that to continue here as

you look to become more focused on technology. We do. We have two types of acquisitions. The one that we focus on those that really add to our core business. So if you we've done four acquisitions so far this year, and there are businesses that we're in, and then we have obviously expense synergies associated with it, and its strengthens our strengthens our market positions in markets we've chosen to be leading competitors, and so yes, we'll expect that to continue.

Robert Rai felt with nasty. Of course, thank you so much. Appreciate your great greatly greatly appreciate it as well. Who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the tune of four trillion dollars. Why they see their role is to serve, not sell. That's why Charles Schwab is committed to the success of over seven thousand independent financial advisors who passionately

dedicate themselves to helping people achieve their financial goals. Learn more and find your independent advisor dot com. George Bori is in charge of medication at Willis Figo. Kind of credit strategy. How bad he is it, George? How much blood is on the street or is it really a non event? What we've seen the last uh, I'll call it twenty days. Good morning everyone, h Well, there's been quite a bit of blood. Um. If you look at

total returns across fixed income, they're down. They're down markedly. If you own a diversified treasury. You're down almost four on the quarter. Uh, And that's a pretty healthy loss for folks that are really not expecting a lot of losses. And the same can be said for you know, high quality bonds, the ones that are most closely attached or most closely linked to that sort of government like risk. But as you go further down the spectrum, as you

go towards more risks in areas like high yield. The high yield bond markets down a quarter of a percent. It's still negative, and people don't want negative returns, but a quarter of a percent is not that bad in the world of bonds, when the highest quality bond is down almost four percent, and that kind of gives people some solace. David, good morning to Jack Vogel Vanguard. I

just used folks as a proxy. The Vanguard Total Bond Market Fund down three point seven percent, David, down annualized from that third week of August where used my vacation. You mentioned Mr Vogel too, But I wonder, George, so how the institutional investor is playing us looking at what we're seeing in the spreads. So institutional investors they like higher yields. So you know, if you're a pension fund or if you're an insurance company, you're actually thankful that

that yields are moving higher. You've probably harbored a lot of cash and you've been waiting for this moment. And so we've seen institutional investors actually start to buy the market.

It's really the retail investor. The folks, the folks that maybe had money in a cash account or money market account and have been slowly creeping out what we'd call the risk spectrum, were now looking at some negative returns in their portfolio, and they've actually started a whole money out of out of mutual funds and even out of some of the e t f So there's there's a little bit of a battle, if you will, going on between the institutional investor and the retailers. Well well explained,

but help me here. The institutional pros got cash for seven percent whatever they start putting it to work. I get that. But aren't they marking to at sixteen loss or decline in their port Uh? Not yet? Not yet. Full year returns are still are still strongly positive both in the in the world of corporate bonds, at least, Treasury is a little bit less so um and and and the addition to the other, the other sort of

thing to consider. An institutional investor does tend to have a slightly long we're all short term investors at the end of the day, but they do tend to have a longer term horizon our profile. So a life insurance company, you know, is matching liabilities against long dated um UH investments, so they can take a slightly longer term UH time horizon. Not everyone can do it, but some can. What's your your outlook here, George, for for volatility and credit spread,

what do you think they're gonna start to tighten? Well, credit spreads themselves have actually started to tighten um and again in at the higher end of the rating spectrum, where you're very closely linked to trade injuries, they've tightened a bit, you know, call it five to ten basis points um and and that's kind of to be expected. As as as negative returns kind of forced people out of the asset class, spreads will only tighten a little bit.

So what we would say they're they're grinding tighter. But in the world of high yield, where your spreads can be anywhere from four to five to six hundred basis points above a typical treasury, those spreads can move much further. Uh, and they also tend to be kind of shorter in duration, so further further down the maturity spectrum. And we've actually seen high yield spreads, you know, come in thirty basis points, and I think there's plenty of potential for that to

continue into next year. And the point about kind of institutional versus retail I think is critically important. The institutional investor base is bigger than the retail institutional base, but they just move more slowly. They're more disciplined in the sense that they have very specific investment requirement. So we're

optimistic that credit spreads should do well. Um, they're going to be volatile when you have negative returns in the asset class, there's a lot of movement of money, but over time credit spreads should should tighten as yields going. Do you have a ten year yield equivalent to where retail says I can't take any more price decline? If we had two point four zero or two point five zero or two point seven zero, do you begin to

see a lot of selling. So that's a great question historically about a negative a negative return of about three percent over a three month period, so it's's very easy to remember. Negative three over three months tends to start the flow of money out of the asset class. And that's exactly what's happened this time around. Are we seeing it yet? Yep, we've seen about right now you're running, uh roughly, let's call it. About a billion dollars a week is coming out of coredit. Okay, George, boy where

us was all farger? That's exceptionally important, folks. I can't say enough, folks, how the street and the median and certainly Bloomberg surveillance quotes yield quotes, yield quotes, yield and there's a point where yields go up and all of a sudden, everybody, David Girls looking at their ship, going what's the price of that? David Gray here with Tom Keane on Bloomberg Surveillance. We're talking with George Barry had

of credit strategy at Wells Farging. We have yet to talk about the presidential transition and the effect that may have here on the credit space. Give us give us your sense of what that looks like, George. So, I think the new administration has the potential to really I think help credit conditions. Um, if there's a big if

that hangs all hangs over this. But if you know, if you're if you're going to see an increase in government spending and a loosening in regulatory constraints on certain industries, particularly in places like maybe healthcare as well as energy. Uh and in addition to that, you get you get tax cuts. You know, that has the potent chilled to be very stimulative for for the U. S economy. I think that trickle down effect to corporates could be very powerful.

And uh, the trends we've seen over the past couple of years as companies have been really levering up their balance sheet, they're borrowing a lot of money to buy back stock to offset a very slow and sluggish growth backdrop. If we were to see a little bit of an uptick in growth in top line growth, in earnings, sorry, in sales, UM, that could be a very powerful um positive for for companies and companies credit worthiness. So we're encouraged going into next year, um, you know for for

the corporate sector. And what does that mean for for mergers and acquisitions? If if we see Trump and omics. As we're thinking we're going to see again whether we're short on details here, what does that mean for M and A activity? So M and A has been been very robust over the past couple of years. The lower for longer or the low rate structure has encouraged companies

to consolidate. UH and and industries to consolidate used a lot of relatively cheaply borrowed money to to fuel that M and A. You know, you've had well over a trillion dollars of closed M and A each year, last year and this year. UM. The prospect of more growth, I think actually accelerates that trend. UM. You know, you have industries like like the community, the broader communications industries,

the consumer staples industries, energy, healthcare. They're relatively fragmented. And if there's an emphasis on domestic growth, which is what the Republican agenda seems to to want to emphasize, then within our country there's there's there's plenty of potential for for some of these industries to to see in market consolidation. We think you could get back to sort of an all time high in in M and A um as as we go into next year. Again George boy with us.

As we look at yield up, price um down? What do you do with duration? Now? Somebody walks into Wells Fargo they got their pot of money. Do you ladder into a portfall? Yo? Do you? I love this? John Tuco help me? Do you barbell strategy? Do you pile it all in the eighty year Austrian paper? What do you do? Well? I think you I think as as you point, if you're an individual coming in, I think I think the laddering strategy makes a lot of sense. I think the emphasis should be on shorter durations, so

shorter maturity profiles. Rates have gone up materially, so there are more attractive yields as you go out along the yield curve, but our expectations those yields should continue to go up. And as we just mentioned, there's a big if hanging over you know, a lot of decisions right now. But if the government is going to be much more aggressive in its borrowing and spending strategies, that tends to push yields up over time. So we would be a little bit more conservative out at the longer end of

the curve. But shorter duration profiles, especially in the world of corporate bonds like like high yield um make a lot of sense. The the average yield on on a high yield fund is roughly about six and a half maybe as high at seven percent, depending on the fund and those durations. The maturity profile tends to be between say two and five years, so you will you will earn a lot of income that can offset both the price volatility as well as some potential decline in in

some of the prices. So over time you'll still you'll still generate a meaningfully positive return despite the fact that that yields more broadly or going up. So I think that's actually not not a bad place to to put your money. Right now, you're sticking with investment grade right now? Are you looking at high yield? What about that difference? We like high yield over investment grade for that exact reason.

High yield number one, as it states, has got a much higher yield that you know, call it six and a half percent, It's got a shorter maturity profile. And importantly, the companies that make up the world of high yield are very domestically focused, and we think that's an important distinction. The investment grade world tends to be much more global

and international in scope. It also has a much longer duration, so more like a ten year maturity, and the average yield on an investment grade fund is roughly about three point four per cent, So there's some very big differences. And if you're an individual, I think you want the higher yield, the shorter duration, and the US emphasis. George, thank you so much. Jorge will thank you. Guys. The reality of christ lower yields higher is old to speak

to our global audience and those of you worldwide. You have to see it to believe it. I was on I think fifties sixth Street over in Madison, trying to get to the suit store, the good people at Oxford Clothes who make my suits, and I couldn't get there. I was blocked, you know, as police officer said, where are you going? This is behind the Trump Tower. I said, I want to go to Oxford close and they let me through. But that's how much it took me to

get through the door. Mortimer Singer knows a lot about traffic. He's with Trout, of course, iconic in New York retailing, but with just a terrific experience of the grind of retail mart Singer thrilled day. Have you on have you ever seen anything like what Midtown retails going through right now? Uh? Well, Fussel's good to be with you, guys, Hi, Tom Um, I have not, and I'm particularly conscious of Tiffany, of Gucci and of Apercrombie and Fitch that are immediately adjacent

to and in Gucci's case, inside Trump Tower. H and I think in fact is closed and during the holiday season, so you can imagine what that's doing for for those three companies. I mean to give an idea of folks. Morts Singer's vice chairman of the French instant to Aliance Franca, which is like three streets above all these madness. Tiffany's out with their rings today says there has been an effect. Do you think it will be folded into other companies

retail reports? Oh, I think in particular Abercrombie that's a big store for them, um, and that Gucci store is not in significant either. But then if the blast radius of this goes down Fifth Avenue and up as well, so um, it will be interesting to see what they say. Astonishing for me more' seeing to walk down Fifth Avenue look at these stores, look at these flagship stories and see the amount of money that's been poured into making them what they are today. What are these companies to

do in light of what they're saying with regard to security. Well, I was hoping. I was talking about it just yesterday actually regarding business interruption insurance and whether it's qualified. These companies are spending you know, upputs of a thousand dollars of foot to build out these locations. Not only that they have to they have to pay rent that you know, on the ground floor it can reach two thousand dollars

a foot. So, uh, they're really marketing engines. And if you don't get the eyeballs to within the vicinity to see those billboards, this is not just about retail sales about it's about being a billboard to send people to your website. Um, it's a it's a it's a tough proposition. So we'll have to see how the security concerns actually affect up the Fifth Avenue because it's a it's a real mecca for commerce in this city. It's about getting people to the website, you say, And I think this

bears explanation. We hear so much talk in other parts of the retail sector about how there's a movement from brick and mortar stories to the online space when you're looking at high end retail. Is that simply not happening and is it not going to happen? Are these stories are going to continue to be as important as they have been? Oh? I think you will see absolutely a

big migration. In fact, the online luxury online UM sales are set to double by There are many marketplaces like Orchard Mile and far Fetch and Lift who are activating e commerce for luxury brands UM, and that's going to continue. I think that also UM. You know, they've been a little slow, frankly, the luxury brands in getting up to speed with the rest of the industry on this because they felt that e commerce by definition was somewhat too

broad a distribution. Now they're seeing that e commerce is about service, so they're all deciding that they need to get on the bandwagon. So it's going to be increasingly important and you're seeing it happen a lot. What are you watching for this retail season? What is the distinctive feature as we dive into December? Well, mobile, you know, mobile traffic has now for the first time. UM been the major door for digital used to be obviously desktop.

It's now no longer the case. Uh. In fact, even at the Thanksgiving table, I mean people thirty percent of consumers said they were shopping at Thanksgiving table. I'm so that's what my kids were doing. Es what they were doing when you said I want another bow tie it, Tom, they said they would get it under the table and then, you know, anything to avoid talk mart Singer. There there's Mr Tucker has the correct analysis as well. In the midst of the retail season. Always good to speak with

Mortimer Singer, chief executive officer of TROUB. We've been talking about Trump fifth avenue of the President elect. Now we turn to the real war that's going on. Uh. In case you didn't know this, David DVF has the DVF Vierra Lace dress four dollars. You can't get it at Bloomingdale's. You can't. You have to go to the meat packing because we gotta go to the DVF store, which we've done to the light of the lightning of our wallet. More.

This is serious stuff. Course, Michael Cores, coach DVF, have just said enough to the department stores. Are they going to have any dresses to sell in five years? Well, look, at the end of the day, this is the double edged sword. I mean, everyone's got to balance brand equity against chasing a P and L. And those things are obviously sometimes at odds. Brand equity meaning preserving one's one's image and brand and therefore discounting maybe being at odds

with that. But obviously the department store channel is a huge driver of business and I would say, in most cases still the largest single channel for anybody. Um. And therefore, you know, being somewhat emotional about what discounting means to the consumer, which is effectively, um, you know, something that they expect, something that they look for, um, you know, the consumer will will jump around. And so the brands are trying to obviously reconcile their pricing. That's absolutely normal.

They have their own channels, the distribution, they have their own retail stores. Obviously now too, it's not just the department stores that they depend on. So they're trying to exert some control. And that's understandable given that will we have departments to is in two, five, ten years, absolutely

we will have department stores. These these entities have the most powerful and important real estate, and the major cities in this country and around the world, the model might shift somewhat from what's called an owned board model, which is the when you buy at wholesale and sell at retail, to maybe more of a blend of concession, which is effectively shopping shops or leasing shops within department stores, which

is effectively what happens in Europe and in Asia. The American model has predominantly been owned bought, so UM, I think that the department stores are shifting the way they work. Their obviously going to leverage that real estate because you know, many of these department stores hold that real estate either least or owned, at about three percent of revenue. If you want to open a store on a street, your

occupancy cast will be about fifteen percent. So there's a wonderful arbitrage there on occupancy costs, and they just have to leverage the brand uh and get them into the store. That was brilliantly explained about the difference in real estate cars between the own shop and being in a department store. If I look at this, then do you just assume fewer stores are given sacks are given Bloomingdale's, I mean Burgdorf. I guess there is one store, But is it just

going to be fewer stores? Is Bergdorf Goodman way out front and where we're gone, Well we'll think about it. In Burgdorf is owned by Neiman Marcus, and even Marcus is going to open their first New York City store, so the same group, same city at Hudson Yards in two years. If you had told me five years ago that before new department stores opened in New York City by Sacks Norths from Barney's and the Nemon Marcus, I would have probably told you you were wrong, and I

would have been wrong. And it's because cities are the most important thing today. I mean the power of anchor gateway cities like New York, London, Paris, Shanghai. People are doubling down in those cities as other department stores and out of the brand, which is why you know the Fifth Avenue rents, notwithstanding the issues on up a Fifth, are where they are. I mean they're at all time high, softening a little bit, but nonetheless it's incredibly high. Help

me understand the aspirational reach of high end retail. I think of what you've been saying about department stories, about the migration to the online space. I would think I'd be more likely to go into a department store and buy a pair of Gucci loafers. I know Tom is more comfortable going to the store itself, but it seems

like I would be willing to do that. I'd be willing to do it online more so than to go into a boutique where I'm going to have to deal with or interact with, you know, four or five sales personnel in the store. Do high end retailers like the fact that they have some aspirational reach to people who

may not be at high end retailers all the time. Well, I think you just articulate that incredibly eloquently, because if you think about what you just said, there are horses for courses, and some people are prefer the more approachable environment of a depot art and store. They get special points for their loyalty, they can use those points for experiences or discounts, and it's there's in some cases there are more approachable sales and stuff in a boutique. I

would say that it's somewhat different. It's more intimidating, it's a little bit more um sort of an environment that is somewhat more daunting because of the build out, and therefore it imposes luxury and quality and therefore price. The assumption is this looks very expensive. That's why I'd rather go somewhere else. And I think that the channels live together and should flourish together, because at the end of the day, everyone talks about omni channel, but it's really

uni channel. It's it's one pipe of commerce, and some customers prefer it in one place and some in another. What will Amazon do next year? From where you sit with trub and consulting all of retail, what would you suggest as Amazon's retail fashion ploy if you will for next year. Amazon is making strides into this space. It's something that's saluted them. I doubt that they will be able to do it um with their own name, but

that said, they're plumbing. Their infrastructure is second to none in this country when it comes to e commerce, digital marketing, the reach of their prime customer that's an affluent customer as well UM and I believe that they will be able to and I expect them to over time bolton acquisitions that will be have the the face or the skin of of a different brand, but be powered by by Amazon, and I would not be surprised if that

would have happened. What Singer, thank you so much was the mone retail here as we dive into the season, David Gura, I mean, I just has your name on it. The d V of Heaven wrap Ground Heaven name Heaven is spelled h e a v y n, which means your wallet will be like the DVF Heaven h e a v y n. You know, I was at the

Allen Company conference in sun Valley, Diane person Burgley. There she opened a pop up store and I could not bring myself to go in, despite the lure of the head of the brand herself and the free champagne pop up store store at the conference, and it was it was well attended. She brought in a ton of clothes and a ton of people to to wear them and sell them. We like to do it. Thank you to more, Singer.

Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. I'm out on Twitter at Tom Keene. David Gura is at David Gura before the podcast. You can always catch us worldwide. I'm Bloomberg Radio m H. Who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the tune of

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