RUSH TRANSCRIPT Laughter Good ░░░░░░░░ see you thank you ░░░░░░░░ prime day is live ░░░░░░░░ sellers are warning that ░░░░░░░░ may be fewer items ░░░░░░░░ stock as a result ░░░░░░░░ these supply chain sn ░░░░░░░░ Let s get perspective ░░░░░░░░ George b and michelle ░░░░░░░░ on how this could ░░░░░░░░ e commerce giants and ░░░░░░░░ customers as well This ░░░░░░░░ a huge issue George ░░░░░░░░ industries and big box ░░░░░░░░ hitting small industr ies ░░░░░░░░ A girlfriend of mine ░░░░░░░░ telling me it s ░░░░░░░░ the bicycle industry I ░░░░░░░░ just everything is getting ░░░░░░░░ up because of the ░░░░░░░░ people not working it ░░░░░░░░ t seem to be ░░░░░░░░ better yet Well jackie ░░░░░░░░ put the car in ░░░░░░░░ garage for months and ░░░░░░░░ and months and then ░░░░░░░░ take it out and ░░░░░░░░ to go 0 60 ░░░░░░░░ three seconds and it ░░░░░░░░ and kind of curves ░░░░░░░░ to the right a ░░░░░░░░ more than you d ░░░░░░░░ and you re surprised ░░░░░░░░ that and really it ░░░░░░░░ absolutely no surprise the ░░░░░░░░ chains were basically dormant ░░░░░░░░ quite some period of ░░░░░░░░ and now they are ░░░░░░░░ and there s a ░░░░░░░░ for all of this ░░░░░░░░ to flow through the ░░░░░░░░ chains efficiently and effectively ░░░░░░░░ they just aren t ░░░░░░░░ s going to take ░░░░░░░░ while to re coup ░░░░░░░░ then you ve got ░░░░░░░░ pressures beyond that so ░░░░░░░░ with getting squeezed on ░░░░░░░░ margins having to reprice ░░░░░░░░ goods so it s ░░░░░░░░ lot to juggle all ░░░░░░░░ once Michelle When you ░░░░░░░░ at this when do ░░░░░░░░ think things will be ░░░░░░░░ to normal there s ░░░░░░░░ of you know the ░░░░░░░░ of thought that things ░░░░░░░░ never be quite as ░░░░░░░░ as they were again ░░░░░░░░ the pandemic has just ░░░░░░░░ our consumption patterns and ░░░░░░░░ of this online shopping ░░░░░░░░ we re sort of ░░░░░░░░ going to have to ░░░░░░░░ a little Well yes ░░░░░░░░ we can say more ░░░░░░░░ a new normal than ░░░░░░░░ to the old normal ░░░░░░░░ in terms of Amazon ░░░░░░░░ looking at that and ░░░░░░░░ supply chain I mean ░░░░░░░░ is totally real but ░░░░░░░░ s so interesting about ░░░░░░░░ in general is that ░░░░░░░░ 24 hour delivery has ░░░░░░░░ stopped even before prime ░░░░░░░░ When I order stuff ░░░░░░░░ Amazon now I have ░░░░░░░░ wait two three sometimes ░░░░░░░░ five days to get ░░░░░░░░ even though I m ░░░░░░░░ Amazon prime member and ░░░░░░░░ with all of these ░░░░░░░░ that are saying they ░░░░░░░░ going to have tough ░░░░░░░░ of delivery because of ░░░░░░░░ supply chain disruption and ░░░░░░░░ ve got the sue ░░░░░░░░ canal blocked up a ░░░░░░░░ of big ports in ░░░░░░░░ when will that go ░░░░░░░░ I think that it ░░░░░░░░ going to take a ░░░░░░░░ longer here because it ░░░░░░░░ not just the only ░░░░░░░░ It is definitely illustrates ░░░░░░░░ entire problem that we ░░░░░░░░ which is just a ░░░░░░░░ cost of raw materials ░░░░░░░░ up the shortage of ░░░░░░░░ materials going up the ░░░░░░░░ out weigh ing the ░░░░░░░░ and then you add ░░░░░░░░ shipping problems and those ░░░░░░░░ going up so I ░░░░░░░░ it s going to ░░░░░░░░ an interesting prime situation ░░░░░░░░ day situation for Amazon ░░░░░░░░ Last time they made ░░░░░░░░ 4 billion they are ░░░░░░░░ 7 3 billion and ░░░░░░░░ ll see if they ░░░░░░░░ that goal It will ░░░░░░░░ interesting to watch and ░░░░░░░░ those numbers are really ░░░░░░░░ Look Amazon was seen ░░░░░░░░ a saviour during the ░░░░░░░░ right We all were ░░░░░░░░ at home and we ░░░░░░░░ ordering packages and we ░░░░░░░░ t care if they ░░░░░░░░ in in two days ░░░░░░░░ 10 days as long ░░░░░░░░ they came and we ░░░░░░░░ able to get the ░░░░░░░░ that we needed however ░░░░░░░░ that things are up ░░░░░░░░ running and people s ░░░░░░░░ have changed their expectations ░░░░░░░░ prime day has changed ░░░░░░░░ If they don t ░░░░░░░░ get the items when ░░░░░░░░ were expecting them they ░░░░░░░░ disappointed They will be ░░░░░░░░ a while I do ░░░░░░░░ things are going to ░░░░░░░░ back to normal I ░░░░░░░░ the wonderful thing about ░░░░░░░░ is it s ruthlessly ░░░░░░░░ at maximiz ing profits ░░░░░░░░ maximiz ing speed of ░░░░░░░░ and Amazon is a ░░░░░░░░ at that but it ░░░░░░░░ take sometime and in ░░░░░░░░ long term the inflationary ░░░░░░░░ is bigger than correcting ░░░░░░░░ supply chain situation because ░░░░░░░░ think it s going ░░░░░░░░ be really hard for ░░░░░░░░ wholesalers to pass through ░░░░░░░░ price increases to retailers ░░░░░░░░ retailers passing through to ░░░░░░░░ I think there s ░░░░░░░░ to be a lot ░░░░░░░░ pain along that supply ░░░░░░░░ in terms of pricing ░░░░░░░░ we go forward It ░░░░░░░░ going to take a ░░░░░░░░ time to reset because ░░░░░░░░ don t think the ░░░░░░░░ pressures we re seeing ░░░░░░░░ done I think they ░░░░░░░░ keep coming That s ░░░░░░░░ really good point because ░░░░░░░░ think a lot of ░░░░░░░░ participants would agree and ░░░░░░░░ are worried about the ░░░░░░░░ how long it lasts ░░░░░░░░ michelle I ll go ░░░░░░░░ to you because you ░░░░░░░░ this out very nicely ░░░░░░░░ us looking at some ░░░░░░░░ those specific industry groups ░░░░░░░░ you see the price ░░░░░░░░ the raw materials go ░░░░░░░░ the only thing that ░░░░░░░░ happen is it gets ░░░░░░░░ on to the consumer ░░░░░░░░ at a certain point ░░░░░░░░ consumer is not going ░░░░░░░░ be able to afford ░░░░░░░░ prices and maybe isn ░░░░░░░░ going to be spending ░░░░░░░░ much They tighten up ░░░░░░░░ you see that happen ░░░░░░░░ just on Amazon but ░░░░░░░░ restaurants and across the ░░░░░░░░ with spending all of ░░░░░░░░ sudden you have a ░░░░░░░░ problem for the economy ░░░░░░░░ and I certainly totally ░░░░░░░░ with gary but I ░░░░░░░░ will say that I ░░░░░░░░ the stagflation scenario is ░░░░░░░░ we ve been talking ░░░░░░░░ for a very very ░░░░░░░░ time I am around ░░░░░░░░ enough to have seen ░░░░░░░░ last inflation cycle and ░░░░░░░░ stagflation happen and even ░░░░░░░░ my time there was ░░░░░░░░ stagflation period that went ░░░░░░░░ for a very long ░░░░░░░░ from the late 60s ░░░░░░░░ we got into a ░░░░░░░░ inflation and finally after ░░░░░░░░ we got into more ░░░░░░░░ a growth and I ░░░░░░░░ that all of these ░░░░░░░░ that you just mentioned ░░░░░░░░ are real These raw ░░░░░░░░ you can t just ░░░░░░░░ wow we need more ░░░░░░░░ materials and take them ░░░░░░░░ the shelf They grow ░░░░░░░░ mine and there has ░░░░░░░░ a real deliberate cut ░░░░░░░░ before the pandemic because ░░░░░░░░ was such low prices ░░░░░░░░ then you have that ░░░░░░░░ took so when you ░░░░░░░░ it all up I ░░░░░░░░ think it s going ░░░░░░░░ pinch the consumer It ░░░░░░░░ is anybody who goes ░░░░░░░░ now realizes they will ░░░░░░░░ a lot more and ░░░░░░░░ see that continuing at ░░░░░░░░ at least for another ░░░░░░░░ maybe two And George ░░░░░░░░ just want to make ░░░░░░░░ point because we ve ░░░░░░░░ about it indifferent aspects ░░░░░░░░ this show where we ░░░░░░░░ getting the raw materials ░░░░░░░░ as well right Inflation ░░░░░░░░ prices up and that ░░░░░░░░ part of the problem ░░░░░░░░ the supply chain but ░░░░░░░░ lot of the problem ░░░░░░░░ something President Trump was ░░░░░░░░ to do away with ░░░░░░░░ a lot of our ░░░░░░░░ from China and this ░░░░░░░░ makes it impossible not ░░░░░░░░ right That s exactly ░░░░░░░░ and I would focus ░░░░░░░░ something more high tech ░░░░░░░░ jackie which is Taiwan ░░░░░░░░ which manufactures most of ░░░░░░░░ semiconductors we utilize in ░░░░░░░░ our high tech components ░░░░░░░░ automobiles and everything else ░░░░░░░░ ve seen a severe ░░░░░░░░ in that and there ░░░░░░░░ a major effort on ░░░░░░░░ part of the government ░░░░░░░░ bring manufacturing capacity for ░░░░░░░░ back to the U ░░░░░░░░ so we don t ░░░░░░░░ a bottleneck there which ░░░░░░░░ very possible especially with ░░░░░░░░ rattling Taiwan right now ░░░░░░░░ that whole situation so ░░░░░░░░ s lots of things ░░░░░░░░ that going on lots ░░░░░░░░ cross currents and it ░░░░░░░░ very difficult to manage ░░░░░░░░ right now You can ░░░░░░░░ with the semiconductor shortages ░░░░░░░░ right now to us ░░░░░░░░ at home There are ░░░░░░░░ semiconductor chips are in ░░░░░░░░ that we use some ░░░░░░░░ of that Even in ░░░░░░░░ you wouldn t imagine ░░░░░░░░ so it be a ░░░░░░░░ impact and we need ░░░░░░░░ work on some things ░░░░░░░░ adminitration was doing it ░░░░░░░░ t seem like this ░░░░░░░░ is George michelle great ░░░░░░░░ see you both thank ░░░░░░░░ for laying this out ░░░░░░░░ s such an important ░░░░░░░░ issue for people to ░░░░░░░░ Thank you jackie Coming ░░░░░░░░ the 2021 Tokyo olympic ░░░░░░░░ just around the corner ░░░░░░░░ officials are making an ░░░░░░░░ pertaining to fans attending ░░░░░░░░ events We re going ░░░░░░░░ discuss that after the ░░░░░░░░ Hi this is Michael ░░░░░░░░