Latest / Bloomberg Intelligence / The Markets, Ukraine, Cyberthreats, And Supply Risks

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The Markets, Ukraine, Cyberthreats, And Supply Risks · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Read on this screen
• 0:22
  Speaker 1: here on this Monday morning. We've got rising interest rates,
• 0:26
  Speaker 1: we've got a slowing economy. Where do you put your
• 0:28
  Speaker 1: money to work? In that type of backdrop, let's check
• 0:31
  Speaker 1: in with Katie Nixon. She's a c IO of wealth
• 0:34
  Speaker 1: management at Northern Trust. That is a big, big account
• 0:38
  Speaker 1: for me back in the day when I was in analyst,
• 0:40
  Speaker 1: when I went to Chicago, had to check in with
• 0:42
  Speaker 1: the good friends of Northern Trust, had to get their
• 0:44
  Speaker 1: I I vote back in the day, and I'm proud
• 0:46
  Speaker 1: to report today always did. Okay, what's the I I vote.
• 0:49
  Speaker 1: It's the Institutional Investor magazine. Yes, that benchmark your total
• 0:54
  Speaker 1: wealth in the total worth in the world. And so
• 0:57
  Speaker 1: in Chicago it was Northern Trust plus a couple of others.
• 1:00
  Speaker 1: All right, Katie, thanks so much for joining us. Here.
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  Speaker 1: What's an investor to do here? In a rising interest
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  Speaker 1: rate environment, slowing growth economy, it seems like a tough backdrop. Well,
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  Speaker 1: good morning, and yes, a very difficult period certainly for investors,
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  Speaker 1: as all periods of transition are. And you noted we're
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  Speaker 1: in a period of transition related to some of the
• 1:21
  Speaker 1: macro outlook. We have slowing growth UM our perspectives will
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  Speaker 1: also have slowing inflation as we get towards the middle
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  Speaker 1: and the later part of this year. But we're also
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  Speaker 1: wanted very important transition with respect monetary policy, going from
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  Speaker 1: alter easy to less so UM. But what we would
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  Speaker 1: characterize it as UM tighter, not tight. We still believe
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  Speaker 1: that conditions are going to be at the end of
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  Speaker 1: the day still quite accomminative UM, mainly because we don't
• 1:48
  Speaker 1: think the Fed is going to be able to go
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  Speaker 1: through with all the rate hikes that are now built
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  Speaker 1: into built into market expectations. Do days then, like uh,
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  Speaker 1: well this morning or Friday presented buying opportunity because clearly
• 2:01
  Speaker 1: this sell off is on the back of geopolitical risk. Well,
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  Speaker 1: I mean, I think if you look historically, what you
• 2:07
  Speaker 1: see as periods of high volatility typically are outside of recessions,
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  Speaker 1: good time a good time to buy. What I would
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  Speaker 1: say though, when it kind of goes back to one
• 2:16
  Speaker 1: of the comments made earlier about cash. You know, investors
• 2:21
  Speaker 1: right now need to go back to their plan and
• 2:23
  Speaker 1: make sure that their plan is right, that it's aligned
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  Speaker 1: with their financial goals, that they have the liquidity, that
• 2:28
  Speaker 1: they have cash on hand to fund their goals during
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  Speaker 1: periods of volatility. And right now we see volatility in
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  Speaker 1: both the stock and the bond market, so you don't
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  Speaker 1: want to be forced to sell your investment grade bonds,
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  Speaker 1: your muni bonds, or your equities under durest. So it's
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  Speaker 1: pretty safe to say it's a good strategy to have,
• 2:45
  Speaker 1: you know, a year of spending sitting in cash. Sometimes
• 2:48
  Speaker 1: it's an expensive insurance policy, certainly with zero interest rates
• 2:51
  Speaker 1: and an expensive insurance policy, but it's worth it during
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  Speaker 1: periods like this when you can draw down your cash
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  Speaker 1: and avoid having to sell other assets under durest. So
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  Speaker 1: my best advice right now is go back to your plan,
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  Speaker 1: make sure you have the cash that you might need
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  Speaker 1: over the next year, because we're certainly going to be
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  Speaker 1: in for a period of volatility here. This is becoming
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  Speaker 1: consensus cash went from cash to king right as at
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  Speaker 1: my wad of cash Paul. Paul has always been a
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  Speaker 1: bullish cash. But but honestly, Katie, we've seen, um, you know,
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  Speaker 1: cash was not favored last year, and it seems that now,
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  Speaker 1: I mean you're talking about it. Golden Sacks I mentioned
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  Speaker 1: earlier is recommending investors go to a substantial portion of cash. So, um,
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  Speaker 1: it seems like the right time. Well, I would say
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  Speaker 1: we always give that advice. Though. We have a goal
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  Speaker 1: based framework where we specifically align clients financial goals with
• 3:45
  Speaker 1: assets and strategies, So we always recommend having a year
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  Speaker 1: of cash um in portfolios. But I would say, though,
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  Speaker 1: is you know, it's been a tough call for tactical
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  Speaker 1: investors with respect to cash because you're you know, you're
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  Speaker 1: getting zero um interest rates. You know, with high level inflation,
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  Speaker 1: you're getting a deeply negative real rate. So for tactical
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  Speaker 1: investors or shorter term time horizons that aren't aligned against goals,
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  Speaker 1: it's been very difficult and challenging to hold cash. All right,
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  Speaker 1: So if I'm not in cash, I want to be
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  Speaker 1: in equities. I have the courage to be in equities.
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  Speaker 1: As Tom King would say, am I looking at the
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  Speaker 1: big growth names that have been so good for so long.
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  Speaker 1: I'm thinking more than a decade? Really, Uh, you know,
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  Speaker 1: the Damazons and the Apples have delivered for shareholders. Or
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  Speaker 1: do I stick with that cyclical trade um that's worked
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  Speaker 1: so well over the past couple of years. You know,
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  Speaker 1: I would say both, um, And here's the reason. So
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  Speaker 1: we we certainly see economic growth being above trend um
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  Speaker 1: for this year, So that would suggest leaning into some
• 4:43
  Speaker 1: of those cyclical areas, including European stocks that have high leverage,
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  Speaker 1: high exposure to global growth. That's said, though, think about
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  Speaker 1: the forward forecast going into and beyond. Growth is going
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  Speaker 1: to come off the boil, and when growth balls you
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  Speaker 1: tend or or is the very slow and sluggish you
• 5:01
  Speaker 1: tend to see growth stocks outperform. So I would say,
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  Speaker 1: don't try to time the turn in the cycle. You
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  Speaker 1: want to own both and if you can add an
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  Speaker 1: additional layer of sort of quality over both your growth
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  Speaker 1: and value stocks, I think those are the kinds of
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  Speaker 1: companies that will be able to really serve you well
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  Speaker 1: during this period of excessive volatility and probably slower growth
• 5:21
  Speaker 1: going forward. You just want to finally wrap up your
• 5:23
  Speaker 1: thoughts on the FED because you said you don't think
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  Speaker 1: they're going to be able to go through with the
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  Speaker 1: what um, four or five rate hikes and then reducing
• 5:30
  Speaker 1: the balance sheet. What do you think is going to
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  Speaker 1: flip the Fed? Well, I mean, I think the markets
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  Speaker 1: right now piking in somewhere between five and seven rate hikes. UM.
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  Speaker 1: We think that's way too aggressive given given our outlook
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  Speaker 1: for where the economy is going and really what the
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  Speaker 1: economy is going to look like, um and the next uh,
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  Speaker 1: you know, once we get past sort of the spring
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  Speaker 1: in early summer, and I would say, you know, the
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  Speaker 1: Fed may prefer they want to raise rates and start normalizing,
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  Speaker 1: but the constraint is going to be the YEO curve,
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  Speaker 1: and what we see right now is starty basis point.
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  Speaker 1: The market is not giving the Feed a lot of
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  Speaker 1: wiggle room here to raise rates five to seven times.
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  Speaker 1: We think maybe the Fed's going to go and March.
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  Speaker 1: That's that's a fet a complete could be fifty fifty
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  Speaker 1: basis points. We hope they do. That will give a
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  Speaker 1: strong message to the market that they're they're trying to
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  Speaker 1: catch up, and then they may go a couple more times.
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  Speaker 1: But We certainly don't think five to seven is in
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  Speaker 1: the cards. All right, Katie, thank you so much for
• 6:22
  Speaker 1: joining us. Always appreciate getting your thoughts. Katie Nixon, ce
• 6:26
  Speaker 1: I O of Walth Management at Northern Trust, giving our
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  Speaker 1: thoughts on these markets. Again, we have got a sell
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  Speaker 1: off in the markets right today. In the last two years,
• 6:39
  Speaker 1: we've all been or many of us, many of us
• 6:41
  Speaker 1: have been working from home, learning from home. That's putting
• 6:45
  Speaker 1: a lot of data out there in the cloud. It's
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  Speaker 1: putting it outside of the corporate offices, which raises all
• 6:53
  Speaker 1: kinds of cybersecurity issues. Let's get a handle on how
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  Speaker 1: that's developing here, David Brittain, Global Strategy, were identity and
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  Speaker 1: fraud from the firm experience at the ESPN Trades in London. Uh, David,
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  Speaker 1: thanks much for joining us here. What have you guys
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  Speaker 1: noticed from your clients in terms of data security, cyber fraud,
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  Speaker 1: all those issues. How have they trended over the past
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  Speaker 1: couple of years. Yeah? Thanks, it's a well, first of all,
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  Speaker 1: it's a pleasure to be with you guys again and
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  Speaker 1: to share a little bit of the thoughts that we've gotten.
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  Speaker 1: Maybe for a little bit of context, are The group
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  Speaker 1: that I work within where I leave strategy is the
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  Speaker 1: identity and fraud group within Experience, as you rightly pointed out,
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  Speaker 1: which we get access to a lot of interesting insights.
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  Speaker 1: Uh And and with this rush to digital, unfortunately, the
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  Speaker 1: digital progress has caused real rush to digital fraud as
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  Speaker 1: well in fraud vulnerability. And so we we put out
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  Speaker 1: a number of different predictions where we think fraud is
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  Speaker 1: moving this year. It includes areas like we believe that
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  Speaker 1: you know, we've all been hearing about ransomware. We think
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  Speaker 1: ransomware a tax is going to increase going forward. Um,
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  Speaker 1: and the and the crime that occurs there's not us
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  Speaker 1: the ransom payout, that's the one that everybody is seemingly
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  Speaker 1: most concerned about. But there's also data theft issues there
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  Speaker 1: When those procesters get in and start to disrupt the networks,
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  Speaker 1: there's a disruption to business. And then there's data theft
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  Speaker 1: and compromise, which ultimately leads to a loss of trust.
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  Speaker 1: So that's one thing that I think businesses need to
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  Speaker 1: be increasingly aware of coming into the new year. How
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  Speaker 1: do we the next one is David. First of all,
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  Speaker 1: Nathan's mom works for you, and UH, we heard that
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  Speaker 1: Nathan's mom works from home a lot of time. So
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  Speaker 1: you have workers at home. Are you confident in UM
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  Speaker 1: your ability to keep things safe even as not all
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  Speaker 1: of your employees are in the office. You know, it's
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  Speaker 1: we We absolutely embrace what we call a security first
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  Speaker 1: philosophy here at Experience, and we we ensure that the people,
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  Speaker 1: the systems, and the processes are under a constant review
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  Speaker 1: UH to ensure that they maintain we maintain a best
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  Speaker 1: in class security posture, and we spent a lot of
• 8:57
  Speaker 1: time and energy on that. Not really the area of
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  Speaker 1: MYFA specifically. I'm more focused on some of the solutions,
• 9:03
  Speaker 1: the data, the solutions and technologies we offer to the market,
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  Speaker 1: and that's where we see things like along, I didn't
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  Speaker 1: really mean your ability to to stay safe. I meant
• 9:12
  Speaker 1: all of us, you know, because we're all doing that
• 9:14
  Speaker 1: right now, David Um not being Paul but or Nathan,
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  Speaker 1: but everyone else seems is working from home and UM
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  Speaker 1: there haven't been any massive catastrophes yet. Yeah. I think
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  Speaker 1: it speaks to the work that had been done leading
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  Speaker 1: up to this, the trends around what businesses were investing
• 9:33
  Speaker 1: in to be able to enter and maintain that security,
• 9:36
  Speaker 1: the practices that were being laid out, they had to
• 9:39
  Speaker 1: be accelerated. We advanced the agenda of what it meant
• 9:42
  Speaker 1: to be digital very quickly over the course of two years,
• 9:45
  Speaker 1: probably ten years in advance and when they thought they
• 9:47
  Speaker 1: may need them. Um and and so there's a number
• 9:50
  Speaker 1: of different things. And for consumers themselves, Uh, there are
• 9:53
  Speaker 1: a couple of other things to consider. One is around
• 9:56
  Speaker 1: the evolution of the crypto and the crypto scams that
• 9:59
  Speaker 1: are happening. There's reportedly half a billion dollars in losses
• 10:02
  Speaker 1: recorded last year on crypto payment scams, and that goes
• 10:06
  Speaker 1: to uh, sort of a bit appropriate to the topic today,
• 10:10
  Speaker 1: appropriate for Valentine's Days, are on the romance scams, where
• 10:14
  Speaker 1: we've seen a lot of an increase over the last year,
• 10:17
  Speaker 1: specifically in the vulnerability and as you mentioned, we're all
• 10:20
  Speaker 1: working from home, we're all sort of isolated during the
• 10:23
  Speaker 1: pandemic and there's a need to reach out, and so
• 10:26
  Speaker 1: romance scams were it was the most profitable year for
• 10:29
  Speaker 1: romance scams last year in the market. Yeah, yeah, interesting.
• 10:33
  Speaker 1: All right, David, too short a time. We're gonna get
• 10:34
  Speaker 1: you back on. We'll chat. I want to talk about
• 10:36
  Speaker 1: zel scams with David. Yes, and honestly about the the
• 10:41
  Speaker 1: the the solutions they offer consumers. You know, I guess
• 10:47
  Speaker 1: the question here is a micron as it eases here
• 10:50
  Speaker 1: in many parts of the country, particularly here in New York,
• 10:52
  Speaker 1: it's the infection rate is extraordinarily low, kind of pre
• 10:56
  Speaker 1: um kind of omicron levels. The question once again end
• 11:00
  Speaker 1: for employers turns back to how do I get people
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  Speaker 1: back to work? Do I want to get people back
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  Speaker 1: to work? Do people want to come back to the
• 11:08
  Speaker 1: office per se? Uh? It continues to be an issue
• 11:11
  Speaker 1: for Corporate America. John Fish, he's a CEO and chairman
• 11:14
  Speaker 1: of Suffolk Construction Company. John, thanks so much for joining
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  Speaker 1: us here. What's your take of how this might normalize?
• 11:22
  Speaker 1: I e. Will people come back to the office, will
• 11:24
  Speaker 1: they work from home? Will they hybrid? What's your take? Well,
• 11:28
  Speaker 1: Matt and Paul, it's a pleasure to be with you
• 11:30
  Speaker 1: this morning. I want to thank you very much. I
• 11:31
  Speaker 1: do believe it's not if, but it's when. I think
• 11:34
  Speaker 1: most people want to return to the work once they
• 11:37
  Speaker 1: feel safe. So I think what we need to be
• 11:39
  Speaker 1: doing is a society is really following the data all
• 11:42
  Speaker 1: along and right now, I think we really are transitioning
• 11:44
  Speaker 1: really from a pandemic to an endemic, and we can
• 11:47
  Speaker 1: see that through the numbers. So my sense right now,
• 11:49
  Speaker 1: the average office is about forty full. I think by
• 11:52
  Speaker 1: the springtime we're gonna be seeing eight and hopefully by
• 11:55
  Speaker 1: the summertime end of the sum we're seeing about But
• 11:58
  Speaker 1: I think at the end of the day, I think
• 11:59
  Speaker 1: that's a direct we're going in right now. I gotta
• 12:02
  Speaker 1: push back against that. Um, if I were allowed to
• 12:05
  Speaker 1: work from home, I would never want to come back
• 12:06
  Speaker 1: to the office because I'd be working from home in Montana.
• 12:10
  Speaker 1: You know I would. But now you're gonna be in
• 12:12
  Speaker 1: Westchester community, and I love coming here, so don't get
• 12:16
  Speaker 1: me wrong. UM, And I love Westchester and I love
• 12:20
  Speaker 1: Suffolk County. I don't know where you are, John, but UM,
• 12:23
  Speaker 1: I'm guessing Boston. I think I think most people who
• 12:28
  Speaker 1: can are going to move are the kids, let's say,
• 12:31
  Speaker 1: are going to move to someplace that's not New York
• 12:33
  Speaker 1: prices and work for a place that is New York salary. UM,
• 12:37
  Speaker 1: I don't know, Uh, I don't know. I guess the
• 12:40
  Speaker 1: answer and we'll find out. But what are you hearing
• 12:44
  Speaker 1: from business leaders as far as getting people back in.
• 12:48
  Speaker 1: You know, I think fundamentally in the United States today,
• 12:51
  Speaker 1: in order for us to be competitive globally, we need
• 12:54
  Speaker 1: that energy, We need that cultural impetus to drive our
• 12:57
  Speaker 1: successes at our companies right now. And we saw the
• 13:00
  Speaker 1: experiment with education. Education really was a failed experiment. I
• 13:04
  Speaker 1: don't think the kids retained or learned much during the
• 13:08
  Speaker 1: last eighteen months during this virus itself. And also the
• 13:11
  Speaker 1: impact and we talk about the cities. When you think
• 13:13
  Speaker 1: about service oriented type of jobs that are really our economy,
• 13:18
  Speaker 1: they basically shut down in our city areas and people
• 13:20
  Speaker 1: the white college jobs were able to work remotely. But
• 13:23
  Speaker 1: at the end of the day, if we don't have
• 13:25
  Speaker 1: thriving cities, we're not going to have a strong economy
• 13:27
  Speaker 1: of the overall. And lastly, I would say this way
• 13:31
  Speaker 1: is that when you think about competitive edge, I've never
• 13:34
  Speaker 1: heard of anybody really having been able to build a
• 13:36
  Speaker 1: culture remotely, or mentor remotely, or provide a sense of
• 13:41
  Speaker 1: leadership remotely. And probably most how do people get promoted remotely?
• 13:46
  Speaker 1: And I'm not saying people cannot work remotely, but I'm saying,
• 13:49
  Speaker 1: generally speaking, in order for this our society that continue
• 13:52
  Speaker 1: going forward in a productive, equal way. We need our
• 13:58
  Speaker 1: cities and our offices to come back to full health.
• 14:01
  Speaker 1: You know, I see a lot of you know on
• 14:02
  Speaker 1: TV and things. When I see you know, stories about
• 14:05
  Speaker 1: coming back to the office. I see a lot of
• 14:06
  Speaker 1: officers have the plastic dividers up between deaths. Have you
• 14:10
  Speaker 1: seen that around? What? What do you what are you
• 14:12
  Speaker 1: seeing in some of your building, some of your clients?
• 14:14
  Speaker 1: You know? What's really about is I think over the
• 14:17
  Speaker 1: last ten years is we know cities have grown quite
• 14:19
  Speaker 1: a bit old temper cent over the last ten years,
• 14:21
  Speaker 1: and this whole office space grew quite a bit and
• 14:23
  Speaker 1: it became very expensive. So what people did is they
• 14:26
  Speaker 1: took of the average squift foot allocation for a person
• 14:29
  Speaker 1: from probably about a hundred and seventy five down to
• 14:33
  Speaker 1: some even went below a hundred square feet. I think
• 14:35
  Speaker 1: what we're gonna see now with the omicrone virus subsiding,
• 14:38
  Speaker 1: I think people coming back to work and that squift
• 14:40
  Speaker 1: footage figure is probably gonna move back to that one
• 14:43
  Speaker 1: fifty to two square foot range. So at the end
• 14:46
  Speaker 1: of the day, in the next two or three years,
• 14:48
  Speaker 1: I do think the office market will move back to
• 14:51
  Speaker 1: where it originally was. It will set this resiliency and
• 14:55
  Speaker 1: I think people will want to come back to work
• 14:56
  Speaker 1: with each other. I wonder about travel between you know,
• 15:01
  Speaker 1: along the Eastern Seaboard. You are obviously, um we hear
• 15:05
  Speaker 1: a little Boston there, and I think you're rated one
• 15:08
  Speaker 1: of the one most important people in Boston one hundred
• 15:12
  Speaker 1: most influential people in Boston by Boston Magazine. You also
• 15:15
  Speaker 1: sit on the executive committee of the Real Estate Board
• 15:19
  Speaker 1: of New York, so you're up and down the Eastern Seaboard.
• 15:23
  Speaker 1: Is the mobility what you want to see right now?
• 15:26
  Speaker 1: You know it's again I'm gonna go back to this
• 15:28
  Speaker 1: issue of safety going to the airport's right now. I
• 15:31
  Speaker 1: think you look at their protocols have been put in place,
• 15:34
  Speaker 1: and I believe it is safe for people to travel today,
• 15:37
  Speaker 1: especially on your lines. You take a look at the
• 15:39
  Speaker 1: how to improve the hb A system on these build planes.
• 15:42
  Speaker 1: It's never been as strong as it has been right now.
• 15:44
  Speaker 1: But at the end of the day, what we are
• 15:46
  Speaker 1: seeing is dealing with an endemic. Right now. The numbers
• 15:49
  Speaker 1: in the data show the things the virus is subsiding,
• 15:53
  Speaker 1: and we are getting close hopefully to what we call
• 15:55
  Speaker 1: herd immunity. At the end of the day, if we
• 15:57
  Speaker 1: can achieve that, I think we're all back in business.
• 16:00
  Speaker 1: I think at the end of the day, in a
• 16:01
  Speaker 1: competitive society, especially in globalization, we have to be with
• 16:05
  Speaker 1: each other. Totally agree. I just want to wonder what
• 16:08
  Speaker 1: you want to see beyond it. I mean, Paul and
• 16:10
  Speaker 1: I were done with the pandemic, so what's next to me?
• 16:15
  Speaker 1: I think in a sense of normalcy, I think what
• 16:17
  Speaker 1: people want to be they want to be with their
• 16:19
  Speaker 1: families with a sense of confidence and comfort, they want
• 16:22
  Speaker 1: to be with their work is in work and having
• 16:24
  Speaker 1: that social experience. At the end of the day, we
• 16:27
  Speaker 1: all think about building up personally and professional balance sheets.
• 16:30
  Speaker 1: We can't build that personal balance sheet or our professional
• 16:33
  Speaker 1: balance sheet working remotely in isolation. And I think the
• 16:36
  Speaker 1: whole issue of the school experience naturally prove that out. Hey, John,
• 16:41
  Speaker 1: thanks so much for joining us. Really appreciate getting some
• 16:44
  Speaker 1: of your time here, John Fish, CEO and chairman of
• 16:47
  Speaker 1: Suffol Construction Company, getting a little sense of kind of
• 16:50
  Speaker 1: what the new normal might look like for back to work. Um,
• 16:54
  Speaker 1: you know, it's it's interesting here in New York city.
• 16:57
  Speaker 1: You cannot get an apartment. There's not any vacancies for apartments.
• 17:02
  Speaker 1: But I don't know where the do the kids still
• 17:06
  Speaker 1: go to hobo? They do, but yeah they do, But
• 17:08
  Speaker 1: I mean, but they're not going to the office. Is
• 17:10
  Speaker 1: that's really odd. One of the topics that Matt and
• 17:15
  Speaker 1: I like to discuss is the supply chain issue, which
• 17:18
  Speaker 1: has become such an economic headwin on a global scale
• 17:21
  Speaker 1: as as a one of the fallouts from this pandemic.
• 17:24
  Speaker 1: And when we do that, we often talk about some
• 17:26
  Speaker 1: of the big, big companies, whether it's a big box
• 17:29
  Speaker 1: retailer like Walmart or a big transportation company like some
• 17:32
  Speaker 1: of the railroads. But I'm gonna go at it from
• 17:34
  Speaker 1: the angle of some smaller, newer businesses, and our next
• 17:37
  Speaker 1: guests can help us talk about that. Laura Modi, CEO
• 17:41
  Speaker 1: and co founder of Bobby. Bobby is a baby formula
• 17:44
  Speaker 1: delivery startup that sells direct to consumer and offers a
• 17:47
  Speaker 1: subscription service to parents across the United States. Laara, thanks
• 17:51
  Speaker 1: so much for joining us here. Talk to us about
• 17:53
  Speaker 1: your business getting stuff, delivering stuff. How are you dealing
• 17:58
  Speaker 1: with what is in you know, a supply change challenge
• 18:01
  Speaker 1: for so many sectors of this economy. Yeah, I'm delighted
• 18:05
  Speaker 1: to be chatting at you guys again. Look, I mean
• 18:08
  Speaker 1: there's global supply chain issues in every industry, but I
• 18:12
  Speaker 1: think we're seeing it. And the anxiety around infant formula
• 18:17
  Speaker 1: is it's at an all time high. And it is
• 18:20
  Speaker 1: because if there's any product that you shouldn't be running
• 18:23
  Speaker 1: out of, I mean, infant formula is one of those.
• 18:26
  Speaker 1: So what we offer is we're directed consumer infant formula
• 18:30
  Speaker 1: delivery service. Bobby is one of the first organically and
• 18:34
  Speaker 1: infantformers on the market in the last six years, and
• 18:36
  Speaker 1: we get the product wherever you are, to your door.
• 18:40
  Speaker 1: Like when you do look at why is there a shortage?
• 18:45
  Speaker 1: The consumer behavior is rapidly changing, and it's changing in
• 18:49
  Speaker 1: the way they shop, where they shop, the quantity at
• 18:51
  Speaker 1: which they're buying. And because of that, retailers are just
• 18:54
  Speaker 1: not quick enough to be able to respond. But online
• 18:58
  Speaker 1: we are last order. In Q four of last year,
• 19:02
  Speaker 1: we saw a hundred and eight percent increase in our
• 19:06
  Speaker 1: subscriptions because parents want the security in getting their formula
• 19:12
  Speaker 1: well and because it's difficult to get the kind of
• 19:14
  Speaker 1: formula you offer in this country. As you know, we've
• 19:16
  Speaker 1: spoken before. UM, I just moved over here from Berlin,
• 19:20
  Speaker 1: and the formula that um, everybody on Park Avenue wants
• 19:25
  Speaker 1: is is only available in Europe, it seems, so why
• 19:29
  Speaker 1: is that? Why? Um, have you been the first person
• 19:33
  Speaker 1: to fill this gap? You know, why didn't anybody else
• 19:36
  Speaker 1: see the problem and shoot in first? Well? First, I
• 19:42
  Speaker 1: mean Berlin, Germany is the birthplace of high quality insan
• 19:46
  Speaker 1: formia and in many ways was the inspiration to getting
• 19:48
  Speaker 1: Bobby off the ground. I would say many people noticed it,
• 19:53
  Speaker 1: and you know, as a tired, exhausted mom, it's the
• 19:55
  Speaker 1: first thing you see, which is why are returning to
• 19:58
  Speaker 1: a black market for European infant formula? Why are we
• 20:02
  Speaker 1: not able to get high quality intant formula here? Now?
• 20:05
  Speaker 1: It would be remiss to not say that this wasn't
• 20:08
  Speaker 1: a journey. It takes a long time to essentially redesign
• 20:13
  Speaker 1: an intrant formula, find the suppliers of choice, and then
• 20:18
  Speaker 1: get it approved here in the US. So we went
• 20:20
  Speaker 1: on a three year journey just to get the FDA
• 20:24
  Speaker 1: green light to launch our formula. This is not a
• 20:27
  Speaker 1: pantry product. You can't just enter the market easily. It
• 20:31
  Speaker 1: takes a lot of rigor a lot of quality, and
• 20:34
  Speaker 1: we're very fortunate. By the way. I don't want to
• 20:36
  Speaker 1: go off on too much of a tangent, but when
• 20:38
  Speaker 1: I think of the importance of formula and nutrition for
• 20:42
  Speaker 1: infants and children, it always reminds me of there was
• 20:45
  Speaker 1: a Freakonomics in the first book when they talk about
• 20:48
  Speaker 1: changes made in the seventies lead to drops in crime
• 20:51
  Speaker 1: rates in the nineties. And I always think about the
• 20:54
  Speaker 1: importance of feeding our children well nutritionally. Um is up
• 21:01
  Speaker 1: there with like giving them love right in terms of
• 21:03
  Speaker 1: creating better citizens when they're eighteen, you know, and we don't,
• 21:07
  Speaker 1: and we have a real problem with that, I think, Um,
• 21:09
  Speaker 1: in this country, Laura, I don't know if if you've
• 21:12
  Speaker 1: noticed it, because judging by your accent, you didn't grow
• 21:14
  Speaker 1: up here, but it could make such a big difference. Um,
• 21:19
  Speaker 1: what do you do for the to help the underserved
• 21:21
  Speaker 1: or the underprivileged people who can't afford good formula? Yeah,
• 21:27
  Speaker 1: well said, I mean, I think we forget as well
• 21:30
  Speaker 1: that infant formula is the first food that a baby
• 21:33
  Speaker 1: is going to consume. So why is it that the
• 21:35
  Speaker 1: first ingredient is corn syrup or not setting them up
• 21:39
  Speaker 1: for success. We need to make sure that the nutrients
• 21:42
  Speaker 1: and ingredients in this product do set them up for
• 21:45
  Speaker 1: success at an adolescent as an adult. Um So for
• 21:50
  Speaker 1: the underserved, I mean this is really really important for
• 21:53
  Speaker 1: us that the affordability and access to high quality formulas
• 21:57
  Speaker 1: out there for everyone. We've made a commitment that every
• 22:00
  Speaker 1: CAWNT purchase it equals a feed to a baby, and
• 22:03
  Speaker 1: we've made many different partnerships with those underserved communities like
• 22:07
  Speaker 1: Brilliant a Choice where we're giving Bobby back to make
• 22:11
  Speaker 1: sure it is accessed by everyone. Lauren, thank you so
• 22:16
  Speaker 1: much for joining us. We always appreciate getting your perspective
• 22:20
  Speaker 1: on the day to day small business in America dealing
• 22:24
  Speaker 1: with some of the challenges of growth and supply chain.
• 22:26
  Speaker 1: Laura Modi, CEO and co founder of the firm Bobby,
• 22:30
  Speaker 1: which provides a baby formula delivery. Thanks for listening to
• 22:34
  Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
• 22:38
  Speaker 1: interviews of Apple podcasts or whatever podcast platform you prefer.
• 22:42
  Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller. Put
• 22:47
  Speaker 1: on fall Sweeney I'm on Twitter at pt Sweeney. Before
• 22:49
  Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio,