Speaker 1: Welcome to the Bloombergs Surveillance Podcast. Hometim Keene along with
Speaker 1: Jonathan Ferrill and Lisa A. Brown Witz Jaylie, we bring
Speaker 1: you insight from the best an economics, finance, investment and
Speaker 1: international relations, Fine Bloomberg Surveillance and Apple podcast, SoundCloud, Bloomberg
Speaker 1: dot Com, and of course on the Bloomberg terminal. Let's
Speaker 1: set the stage. We come into three. The consensus is
Speaker 1: pretty clear. The first half is gonna be tough. We've
Speaker 1: gotta pay the bill for the tightening of the last
Speaker 1: twelve months. Got it. Second half is gonna be better.
Speaker 1: You get a recovery. The year starts boom, everyone's wrong.
Speaker 1: Then that's Stack one hundreds up about eight percent year
Speaker 1: to day, the stocks fifty, the euro stocks fifty here
Speaker 1: in Europe is up about nine percent year today. Max
Speaker 1: Kenna of HSBC said, get on board. Max joins us. Now, Max,
Speaker 1: I have to say once I new is coming to
Speaker 1: London for a week. You were the man I wanted
Speaker 1: to catch up with that note from a couple of
Speaker 1: weeks ago, and I'll share the quote with our audience
Speaker 1: just in case they missed it. So he bears the
Speaker 1: whole of twenty two super underweight max underweight. Then you
Speaker 1: said this to start twenty three having been staunched bear
Speaker 1: so much of twenty two we think the consensus is wrong.
Speaker 1: We see a variety of reasons to be less bearish
Speaker 1: on risk assets in the first half. So let's talk
Speaker 1: about what you see so far. Do you like what
Speaker 1: you see so far? So far? I think yes, But
Speaker 1: we've got to be honest and also say there has
Speaker 1: been some you know, some easing also on the bond
Speaker 1: side of things, right, So it's not just been cyclical strength,
Speaker 1: but it's also been strength on the bond side of things.
Speaker 1: So that has been taken pretty positively, I would say
Speaker 1: by risk acters as well. That's part of the reason
Speaker 1: also why the nastag was out performing, why growth and
Speaker 1: text dogs were out of performing. Now, I do think
Speaker 1: if we look at the consensus, right, I do think, look,
Speaker 1: we've got very pessimistic expectations. I think everyone is saying, look,
Speaker 1: earnings expectations are still too high. I don't disagree with that,
Speaker 1: but I disagree with the sequencing. I disagree with the
Speaker 1: timing right, because if we've got pretty much everyone agreeing
Speaker 1: that age one is going to be tough if we've
Speaker 1: got you know, economists agreeing like they've never agreed before.
Speaker 1: Look at the Philadelphia Fed survey right on this, on
Speaker 1: this recession probability that's on like as the highest in
Speaker 1: fifty years. So we've got consensus agreeing on the probability
Speaker 1: of a recession, on the factors driving it, and on
Speaker 1: the timing. Now, what's the dime downside surprise? Then? Right?
Speaker 1: What's the downside surprise to earnings? If you've seen a
Speaker 1: queue for and now in Q one those earnings revisions
Speaker 1: down what's particularly in the cyclicals, in consumer discrestion, in materials,
Speaker 1: in the megacaptain, I T and communication services, so exactly
Speaker 1: where we want to see them, what's the what's the
Speaker 1: actual downside surprice? Now I would I would argue, look,
Speaker 1: if we get an average recession, right, it's not going
Speaker 1: to blow anyone's boats. It's not going to be like,
Speaker 1: oh yeah, this is a massive surprise, you know, this
Speaker 1: is this is why we need to get baris No,
Speaker 1: not at all. Actually, what we need now is we
Speaker 1: need to get something properly going wrong right well, and
Speaker 1: we need to have something break. Then you can be barish.
Speaker 1: You clearly thought it was upside risk. We've got a
Speaker 1: squeeze right now, that's clear. I'm trying to work out
Speaker 1: one of the durable tail with for this market. I
Speaker 1: get it. Everything you've said had a lot of people
Speaker 1: on board with it. What's durable about what we're saying.
Speaker 1: I think it's still durable because sentiment and positioning is
Speaker 1: still so, you know, so down beat. I mean, let's
Speaker 1: not forget. We've just updated our sort of aggregatet real
Speaker 1: money invested positioning study on Monday, and that still shows
Speaker 1: underweight positions on aggregate in equities and in high yield credit.
Speaker 1: That's normally not the case, right, That's historically been rarely
Speaker 1: the case that you see outright underweight positions. You see
Speaker 1: the same thing, right If you look at c t
Speaker 1: A equity beaters, they're still down. Yes, they've gone up
Speaker 1: a bit, but there's still on the in level terms,
Speaker 1: still down. Look at equity beaters of u as equality
Speaker 1: funds massively underweight, multi acid fund beaters are sort of average.
Speaker 1: None of that is telling us, oh yeah, like everyone's
Speaker 1: already gone bullish. And if anything, when we talk to
Speaker 1: clients in the last of two three weeks, the biggest
Speaker 1: pushback we've got was, well, I know that everyone else
Speaker 1: is already bullish, Therefore I have to continue to be
Speaker 1: let's break this up Equodi's versus credit and Star with equities,
Speaker 1: Microsoft desmonic or rather after the close yesterday, how many
Speaker 1: messages did you get saying look at Microsoft, you're runk.
Speaker 1: What did you say back? Now? Look, I mean what
Speaker 1: I would say is it's not the time yet to
Speaker 1: go full on max overweight equities. Right with that, I agree,
Speaker 1: But that is mostly very very tactical because look at
Speaker 1: what's priceton for the FIT for the next two meetings.
Speaker 1: We've got less than fifty basis points priced in into
Speaker 1: FIT funds now cumulatively from the next two meetings. So
Speaker 1: they're just gonna come out next week and say, look,
Speaker 1: we're gonna go go, but we'll do another in March. Right,
Speaker 1: they're going to guide us to towards that, And even
Speaker 1: that would already be a slightly hawkish surprise, and that
Speaker 1: would weigh on high multiple tech stocks and so on. Right,
Speaker 1: it would weigh on valuations again, perhaps a bit of
Speaker 1: a higher rates well, but a bit of higher real
Speaker 1: rates than that means than weighing on multiples in tech,
Speaker 1: so very tactically. I don't like equities like you know,
Speaker 1: I'm not massively massively bullish on equities just yet. I
Speaker 1: would say in a modeling through scenario right where you say, look,
Speaker 1: it's gonna be not neither here or there, right, we
Speaker 1: uddling through in terms of growth, slow grind lower rather
Speaker 1: than really a swoshdown and the recovery and H two.
Speaker 1: That means that credit, you know how yeld credit is fine.
Speaker 1: Emerging market debt is fine. I G debt is fine. Right,
Speaker 1: all of that you just turn over the carry. That's fine. Well,
Speaker 1: let's talk about emerging markets, and let's talk about credit
Speaker 1: emerging markets. I think it was more constandy investment management yesterday.
Speaker 1: Get on board, They're not alone. That's quickly becoming consensus
Speaker 1: em international outperforms. Can we talk about domestic US credit?
Speaker 1: Triple C's City came out yesterday, and I have to
Speaker 1: say it was a nuanced report, but the headline is
Speaker 1: by Triple CS, how much risk do you want to
Speaker 1: take in credit? Do you want to go right to
Speaker 1: the bottom of the quality stack and get into high
Speaker 1: yield in Triple CS? Yeah? I think that doesn't make sense.
Speaker 1: To an extent. Right, if we look at triple Bees
Speaker 1: versus single A's and we compare that against P. M. Myers,
Speaker 1: there is actually much less weakness price. Then if you
Speaker 1: look at triple cs versus double Bees, that looks you know,
Speaker 1: it looks much fairer priced relative to where macro indicators on.
Speaker 1: So there you could actually argue, well, the weakness as price,
Speaker 1: particularly if you compare it right with then high yield,
Speaker 1: that weakness is pretty much under price. So that's good, right,
Speaker 1: it would be much worrying I think if we talk
Speaker 1: about the macro side of things as well. One of
Speaker 1: the pushbacks we got is I remember we had a
Speaker 1: note doubt, and you know, people said, but look at
Speaker 1: the I M look at the services or something. He orders,
Speaker 1: it's forty credit with turn more constructive. Now. My answer
Speaker 1: is very simple. I wouldn't turn constructive. It was if
Speaker 1: it was still at fifty five or sixty, because then
Speaker 1: now leading indicators would still point out and we'd say,
Speaker 1: hey we've got another ten fifteen points lower. Be careful
Speaker 1: now you're at forty five. I look at him like, well,
Speaker 1: this is exactly what I wanted to see done. Right,
Speaker 1: Let's get on Max Kenny, You make it sounds simple,
Speaker 1: it's not. We've got a challenging year ahead of ahs
Speaker 1: v C. Max Kenner there of HSPC has framed the
Speaker 1: last twelve months. This is important. We've been wrestling worldwide
Speaker 1: with inflation and central banks have made a move. The
Speaker 1: u c B has gone to fifty, the Bank of
Speaker 1: England's gone to three fifty, the Fellow Reserve has gone
Speaker 1: to four fifty. The Bank of Japan, the b o J,
Speaker 1: has done absolutely nothing. Is that going to change this year?
Speaker 1: Jane Furley of Rabbit Bank alongside us and the beating
Speaker 1: card of foreign Exchange, Jane, fantastic, the catch up with you.
Speaker 1: Let's start there sub zero with the b J. Is
Speaker 1: that going to change this year? You know it might,
Speaker 1: but it might not. And I think that's the really
Speaker 1: crucial here, crucial point here because if we saw, you know,
Speaker 1: the meeting in January, it's all speculators all egging on
Speaker 1: for a change in your curve control, and what do
Speaker 1: they get? Nothing? And I think this is the risk
Speaker 1: the market is now assuming that we're going to get
Speaker 1: a replacement for Corroda in in April. Of course, as
Speaker 1: he steps back and they're assuming that we're going to
Speaker 1: get maybe a significant change in policy. We might get
Speaker 1: a change in policy, but it may not be significant,
Speaker 1: and that's the point. We might get another tweek two
Speaker 1: your curve control. We may get an interest rate high.
Speaker 1: We may not because if you look at the type
Speaker 1: frame for the Bank of Japan, they're probably not going
Speaker 1: to be hiking interest rates next year, when, for instance
Speaker 1: of the FED could be easy in another central So
Speaker 1: you know you've got a limited time frame. But then
Speaker 1: you look at the fundamentals. At the fundamentals, yes, inflation
Speaker 1: is above its target, but only because import prices are
Speaker 1: not because it's domestically generated, which is the golden goose
Speaker 1: for the Bank of Japan. And if Corona gets replaced,
Speaker 1: as a very good chance that he gets replaced, maybe
Speaker 1: by one of his deputies, maybe by somebody else from
Speaker 1: the Bank of Japan, all of which have been supportive
Speaker 1: of the very accommodative policies for a long time, so
Speaker 1: disappointment could be coming. Well, let's pick up on what
Speaker 1: you just said, is the replacement. I think that's what
Speaker 1: everyone's attention. The fact that we have this final meeting
Speaker 1: with Corona in March and then the handoff in April,
Speaker 1: which chalice carries the most poison? Does Governor Corona handover
Speaker 1: policy already sit on a path to move away from
Speaker 1: your curve control and towards higher interest rates? Or is
Speaker 1: he handover what there is right now? Which chalice carries
Speaker 1: the most poison? I think it depends on the outcome
Speaker 1: of the Spring wag Weight rounds, really, and you know
Speaker 1: that the indicators are that, yes, the Spring ray Weight
Speaker 1: rounds are going to bring some moderate increase in domestically
Speaker 1: generated inflation age in plation, which is what they wanted
Speaker 1: to see. And you know that could lay the framework
Speaker 1: for a change in your co control and another tweak.
Speaker 1: Will it lay the phonework for a change in interest
Speaker 1: rate policy? You know that's a little bit further down
Speaker 1: the line. I don't think we can make that decision yet.
Speaker 1: But you know that the the the Corona might be
Speaker 1: leading the Bank of Japan, but he leaves it with
Speaker 1: a whole board, and that board won't necessarily be changed
Speaker 1: that much. So I think there is not going to
Speaker 1: be this massive change towards a very hawkish central bank.
Speaker 1: You may get a slightly less dubbish central bank. The
Speaker 1: perspective within the BOJ was that this was perhaps a
Speaker 1: once in a generation opportunity to reset inflation and expectations higher.
Speaker 1: He's been doing this now for ten years. I think
Speaker 1: we all remember when he took this on back in
Speaker 1: Does he leave walk away with any success whatsoever? I
Speaker 1: think there is some success. I mean again that that
Speaker 1: hurts back to that the whole Peter Pan issue, that
Speaker 1: the whole psychological issue, that he thought that if you
Speaker 1: would bring in an inflation target, people would assume inflation
Speaker 1: might be higher and they would alter their spending behavior accordingly.
Speaker 1: But as we know, that really has taken a very
Speaker 1: long time. But you know, with inflation around the globe,
Speaker 1: this perhaps has given a little bit of an inPulse
Speaker 1: impetus into inflation. So there is a little bit here.
Speaker 1: You've got the government of the Bank of Japan behind Coroda.
Speaker 1: You've got the Prime Minister saying to fans, yeah, you know, guys,
Speaker 1: you need to raise wages, and therefore you get what
Speaker 1: they're looking for, which is a virtuous circle behind higher wages,
Speaker 1: high domestic demand, higher profitability, etcetera. And there are some
Speaker 1: glimmers of optimism that this might be coming but I
Speaker 1: don't think there's a huge amount of confidence that they're
Speaker 1: there yet, Hence the cautious take you've implied there could
Speaker 1: be some disappointment Dolly's come back from one fifty subone
Speaker 1: thirty about right now, push that through the ethics market
Speaker 1: for me, where does that leave Dolly, Anne, I think
Speaker 1: we can still see one in three months. Of course
Speaker 1: we we are, assuming it was the dollar is weak
Speaker 1: and that's perhaps a large part of that movement back
Speaker 1: from one fifty, So you know, is possible, can say,
Speaker 1: you know, there is the possibility of another movement, another
Speaker 1: tweak in your curve control, maybe some indication that they
Speaker 1: could move away from that in the months ahead. But
Speaker 1: the problem is again is that the wind of opportunity
Speaker 1: is quite short. So is possible, you know, maybe even
Speaker 1: one six and in the middle of the year, But
Speaker 1: I don't think we're going to be, you know, falling
Speaker 1: hugely in Dolly. And you mentioned the U. S. Dollar.
Speaker 1: I remember Tom, Lisa and I sitting here with you
Speaker 1: maybe in September. I think it was back end of
Speaker 1: September we were looking at cable at one oh three
Speaker 1: fifty strong dollar Euro dollar ninety five something strong dollar.
Speaker 1: It's all back away since then. I think it's been
Speaker 1: a ten eleven move on the x y. I'm sitting
Speaker 1: here this week trying to work out what's durable about
Speaker 1: all of this, particularly for euro dollar. I know there
Speaker 1: is a positive surprise. I know that we've got that
Speaker 1: adjustment as we move away from the risk of recession.
Speaker 1: What's durable about these tail winds that we're seeing start
Speaker 1: to build? Well, you know, I think this is really
Speaker 1: particularly interesting when you come to the Euro part of
Speaker 1: euro dollar, because you know, the market has now priced
Speaker 1: in a much better situation then was it was supposed
Speaker 1: to be. We were supposed to be in recession for Germany,
Speaker 1: and now we've got the Schultz the chancellor last week,
Speaker 1: so no recession for Germany. We've got the governors of
Speaker 1: the Bank of France, the governors at the Bank of
Speaker 1: Italy saying, yeah, you know, our outlooks are improving. You
Speaker 1: look at the performance of European stocks this year relative
Speaker 1: to US, so that the market has been buying into
Speaker 1: this far better than expected story for Europe, and we've
Speaker 1: got euro dollar in a touching this week at at
Speaker 1: one oh nine. I think the big question is how
Speaker 1: much of that is priced in and how much further
Speaker 1: can the Euro sort of dine out on on that story,
Speaker 1: because you know, it looked this week at the Poms
Speaker 1: the perms were like, oh, you know, they're not really
Speaker 1: that good. There are still head winds coming and as
Speaker 1: we move into the certainly into the summer and the autumn,
Speaker 1: we could have another phase of the energy crisis. We
Speaker 1: don't know how cold next winter is going to be,
Speaker 1: so there are still head winds facing the Euro. And
Speaker 1: the market now was quite long of the Euro, so
Speaker 1: don't think it's going to be that easy to push
Speaker 1: up to another leg. But of course a crucial element
Speaker 1: of this is the honor and will the market continue
Speaker 1: to disbelieve the FED guidance the interest rate outlet for
Speaker 1: this year? So I've asked this question three times this week.
Speaker 1: Maybe you've heard me ask it. Let's make it four.
Speaker 1: Who hikes more this year the feed of the CP.
Speaker 1: I have heard you asked that, and I have had
Speaker 1: the answers, and I think you know what I'm going
Speaker 1: to say too, because it's the same as everybody else.
Speaker 1: You know that that the CP is likely to to
Speaker 1: hike more. But the question really is is that in
Speaker 1: the price now or not it's fourth or four and
Speaker 1: that's an important question, that's for sure, Ji of Rabba Bank,
Speaker 1: that's tasting the cash up with you here in London.
Speaker 1: Let's get to it. If you're if you're in Global
Speaker 1: Wall Street, this is with our question your interview of
Speaker 1: the day. If you need to be optimistic, there's no
Speaker 1: better place to be in a Deutsche Bank with their
Speaker 1: chief global strategist and how to ask an allocation bank
Speaker 1: from Charter. Mr Charter has made clear he is enthusiastic
Speaker 1: and as it hasn't happened, he's simply moved his timeline out.
Speaker 1: We're got an update this morning from BANKI Charter, Banky,
Speaker 1: you're at fort hundred, no what it believes you. You've
Speaker 1: never been this lonely in your storied career. Give us
Speaker 1: the X access. When's the timeline when Schota Nirvana happens. So, actually,
Speaker 1: what we have in terms of our outlook for this
Speaker 1: year is really the rally in Q one, which we
Speaker 1: think of as basically a continuation of the rally that
Speaker 1: began late last year. I wouldn't necessarily describe it as
Speaker 1: you know, sort of a bullish view on fundamentals. Uh,
Speaker 1: the the basic driver of the rally in our view,
Speaker 1: is really a positioning squeeze. As we know since late
Speaker 1: April of last year, it's all really been about the
Speaker 1: central banks. And if you look at our measures of positioning,
Speaker 1: you know, the fundamental investors we call them the discretionary
Speaker 1: equity investors, you know very quickly moved down to neutral
Speaker 1: too slightly negative. What got squeezed as a result of
Speaker 1: the last six months of last year is really systematic strategies.
Speaker 1: Systematic strategies ned to follow the market. So to have
Speaker 1: this big divide between systematic strategies, you know, two Z
Speaker 1: scores below neutral, let alone where they most of the
Speaker 1: slugged out on the CFS and Chase Well Fan Kompor
Speaker 1: and technical analysis is adamant we made in October low
Speaker 1: and the dal Jones industrial average. He's as bullish as
Speaker 1: you are. So there's a short squeeze. We're squeezing out
Speaker 1: the bloom. I get that. What's the then what after
Speaker 1: we squeeze out the bloom for you? And Mr ran Kampora,
Speaker 1: so you know we have our your end target, which yes,
Speaker 1: I understand it looks bullish. I would say it's only
Speaker 1: a little bit more than ten percent up from where
Speaker 1: we've been recently. We see most of that happening basically
Speaker 1: in Q one, and then we have basically, as you know,
Speaker 1: a call for a recession in the US starting in
Speaker 1: Q three, so second quarter, keeping in you know, in
Speaker 1: line with the recession playbook. Historically we have the market
Speaker 1: going sideways. So that's still we have if the recession
Speaker 1: happens in Q three, Uh, pretty severe sell off which
Speaker 1: would take us all the way down to thirty two fifty.
Speaker 1: But I think you know, very important aspect of the
Speaker 1: recession playbook to keep in mind if you're thinking about
Speaker 1: twelve months is that equities, you know, pretty robustly bottom
Speaker 1: about halfway through. So if we have a two quarter recession,
Speaker 1: they will come all the way back basically in Q four.
Speaker 1: And so my Q one target is my year end target. Yeah,
Speaker 1: you said something pretty radical that it's all been about
Speaker 1: the FED. It is not necessarily about some of these
Speaker 1: other issues like earnings, which we keep getting in a
Speaker 1: lot of people keep looking at. So how do you
Speaker 1: push back against that? And how much do you expect
Speaker 1: tech to continue to lead regardless of the up or
Speaker 1: the down because of that macro play. Yeah, so a
Speaker 1: tactically our call is to be you know, the rally
Speaker 1: will be led by tech in the financials UH and
Speaker 1: and and some of the consumer six goals where you know,
Speaker 1: priced in of an average recession. I think it's UH
Speaker 1: starts to make things pretty asymmetric. Um. You know, I'm
Speaker 1: sorry I lost the last part of this is an
Speaker 1: issue because right now we're looking to just because of me,
Speaker 1: you know, this is an issue interesting issue because right
Speaker 1: now I'm watching earnings and people are saying there's a
Speaker 1: real fundamental shift underneath the market that you have tech
Speaker 1: that's not necessarily going to lead in growth, even though
Speaker 1: they now are leading in returns to simply because it
Speaker 1: cuts etcetera. And I'm wondering whether you see that, whether
Speaker 1: we're heading back to a different normal in terms of leadership,
Speaker 1: or whether we're heading back to the same regime. It's
Speaker 1: just sort of dependent on the FED. So you know,
Speaker 1: in terms of earnings UH for the year as a whole,
Speaker 1: you know, if you put in a recession in there
Speaker 1: like we have, you know, we're talking about a hundred
Speaker 1: and so the question is, you know, what happens if
Speaker 1: the alternative, which is a very popular question given the
Speaker 1: market price action, and it's more likely to go sideways
Speaker 1: and even just start to recover. I think in terms
Speaker 1: of thinking about earnings, you know, everybody talks always about
Speaker 1: growth rates. I think it's also important to keep in
Speaker 1: mind where the levels are. You know, equity evaluations come
Speaker 1: off of levels, and and earnings have been running you know,
Speaker 1: sort of well well above trend levels, and and and
Speaker 1: and so you know, we have this issue where I mean,
Speaker 1: even if you looked at real activity, you know, the
Speaker 1: good side of the economy, it's essentially been going sideways
Speaker 1: for two d Now you know SPX and what Mr
Speaker 1: Chat has just said there, Lisa is religion to me?
Speaker 1: Which is it financial? TV is addicted to change movements.
Speaker 1: Stay with us Microsoft right now down under two thirties six,
Speaker 1: that kind of stuff. He's looking at levels and this
Speaker 1: is the bathtub story. You're looking at the water coming
Speaker 1: in and out of the bathtub, or you're looking at
Speaker 1: the level. Olivier Blanchard and his new monograph is on
Speaker 1: the same page in economics has been from Chatta inequities.
Speaker 1: Levels matter, the levels, the scale the mass of Microsoft matters. M.
Speaker 1: William mcdonnaugh is founder, he's chief executive officer. They've got
Speaker 1: a bunch of other titles for him and Element Funds.
Speaker 1: What he is is one of the wisest people across
Speaker 1: a span of this thing called wealth management, is managing
Speaker 1: money and really really trying hard to do the hardest thing,
Speaker 1: which is not lose money. We are thrilled that William
Speaker 1: McDonagh can join us today. It's wrapped around Tesla, It's
Speaker 1: wrapped around what Mr Musk is doing in these historic
Speaker 1: Muskie and times, but there's about eight other things to
Speaker 1: talk about as well. Well, thank you for joining us.
Speaker 1: You really center and in your research note that the
Speaker 1: Tesla cars are a trojan horse. So many people agree
Speaker 1: with you on that. What does Mr Musk really up to? Well,
Speaker 1: you know, let's look back to two thousand six when
Speaker 1: Musk really kicked the thing off and and and his
Speaker 1: kind of opening mandate for the company was build a
Speaker 1: sports car, use the money to build an affordable car,
Speaker 1: use the money to build a more affordable car, and
Speaker 1: provide zero emissions power generations options to the world. Um,
Speaker 1: he's following that. We need to listen to what he said,
Speaker 1: and I think what we're gonna see from Tesla when
Speaker 1: they report today, we might not see Musk. I think
Speaker 1: they're starting to realize that maybe he isn't the optimal
Speaker 1: person to do the SEC communications, much like Apple did
Speaker 1: with Steve Jobs back in the day. Let's throw a
Speaker 1: black turtleneck on this guy, Let's put him on stage,
Speaker 1: let's talk about the cyber truck. Let's stop all these
Speaker 1: communications with regulators that ain't his highest invest us that basically,
Speaker 1: how much can you put him into? The back? Continues?
Speaker 1: Will you when you say a trojan to horse for
Speaker 1: the ev for the battery? Is this a positive for
Speaker 1: the stock or a negative when you look at its
Speaker 1: longer term market share and potential? Well, you know, I
Speaker 1: was interested in what Julian just said, and I think
Speaker 1: there's a broader war on Wall Street right now and
Speaker 1: in a juxtaposition between the top line and the bottom line,
Speaker 1: like what are we do being judged by these days?
Speaker 1: We just came out of an environment where it was growth, growth,
Speaker 1: growth at at all costs. I don't care what it
Speaker 1: costs to acquire a user, get the user. And then
Speaker 1: the tide went out and we saw that that probably
Speaker 1: wasn't the right way to approach it, and now people
Speaker 1: are repositioning their thoughts around, well, what's the bottom line,
Speaker 1: what's the revenue, what's the ebit dot And when you
Speaker 1: look at a company like Tesla, you know there's no
Speaker 1: justification for it being a one point two trillion dollar company.
Speaker 1: We have our perspectives on on why that happened, which
Speaker 1: I'll share, But when you really look at their numbers,
Speaker 1: you know they have less revenue than GM, than four
Speaker 1: than VOLKSWAG and then BMW, but they have eight times
Speaker 1: the market cap of Ford and GM. So what are
Speaker 1: we really doing here? What are we really looking at?
Speaker 1: We think investors played Tesla as a vehicle to get
Speaker 1: exposure to EV adoption, But um, what our business charge,
Speaker 1: our ticker on the New York Stock Change allows people
Speaker 1: to do. It's just by the base metals that are
Speaker 1: required for all EV, all solar and all the wind. Well,
Speaker 1: but well, then what are you looking for in today's
Speaker 1: Tesla earnings? Because your sound sounds like you've got a
Speaker 1: very strong belief there are a lot of questions people
Speaker 1: are gonna be asking about the discounts that recently elon
Speaker 1: Musk and Tesla and stated in some of the vehicles.
Speaker 1: What are you looking for to inform how much you
Speaker 1: amp up your view? Yeah, I think that they're gonna
Speaker 1: put their toe in the water a bit today. I
Speaker 1: don't believe that they're gonna come heavy. You know, they
Speaker 1: have announced that in March they're going to do their
Speaker 1: first investor day and that you're going to brand that.
Speaker 1: There has been talks that they're going to launch their
Speaker 1: own investor platform that's going to allow for them to
Speaker 1: engage directly with their investors, much like you've seen must
Speaker 1: do with Twitter pulling. Do you think I should be
Speaker 1: CEO or not? I think you're going to see more
Speaker 1: engagement directly with the investors. The investors feel like they're
Speaker 1: doing what they want to do. But if I'm Tesla
Speaker 1: and I'm on the board of Teslau, I looked to
Speaker 1: I'm putting him back in his corner and saying, go
Speaker 1: stand next to the semi truck and let us report
Speaker 1: the numbers and then let's do the fancy stuff and
Speaker 1: the exciting stuff in March. Well, I got eight ways
Speaker 1: to go here. Whant to get you on here in
Speaker 1: Tesla and musk is is interesting. I want to go
Speaker 1: to your experience not only with Bob Diamond, and we
Speaker 1: thank Bob Diamond so much for coming on recently on
Speaker 1: the death of Scott Minored. But I want to talk
Speaker 1: to you Will about your stance in Florida and your
Speaker 1: management of people's money, celebrity management, and that in this
Speaker 1: thing called crypto, the Bitcoin losses have been taken, but
Speaker 1: far more the upset of crypto right now, which is
Speaker 1: tard and feathered. I believe one of your clients over
Speaker 1: the years, Mr Brady, who throws footballs in Tampa, tell
Speaker 1: me about the McDonough view on crypto. I think what
Speaker 1: happened in crypto in the last kind of hundred days
Speaker 1: is net positive for the industry um because it flushed
Speaker 1: out a lot of the centralized players. It flushed out
Speaker 1: a lot of the unregulated players. Which crypto needs to
Speaker 1: have a barbell approach to success. It needs to have
Speaker 1: pure decentralization that allows people globally to interact with it
Speaker 1: in a fair way. And then it also needs to
Speaker 1: have a heavily regulated on ramp that allows investors and
Speaker 1: allows scale to come into the space and trust who
Speaker 1: their counterparties are. And I think if both of those
Speaker 1: things are accomplished blockchain has no end. How does the
Speaker 1: United States use a regulatory reach internationally? Given the criminal
Speaker 1: allegations within crypto? The U S is the on ramp
Speaker 1: for all global financial systems, right, I mean, let's just
Speaker 1: admit it. The volumes that come in through the US markets,
Speaker 1: the volumes that trade on the US exchanges, this is
Speaker 1: where the money comes from. Even if it isn't sourced here,
Speaker 1: it's managed here. And so this is the on ramp
Speaker 1: to crypto. That's how they can control it is by
Speaker 1: saying we control how you get money into the system
Speaker 1: and out of the system. And then the good thing
Speaker 1: about these block chains is that they're very easily auditable.
Speaker 1: And so once you're on that system and we know
Speaker 1: who you were coming in, I can track what you
Speaker 1: do while you're in there and then you come back out.
Speaker 1: But do you have and with with your immense you know,
Speaker 1: international perspective or your work at Golden SAX over the years, etcetera.
Speaker 1: William I, I'm absolutely fascinated how a guy like you
Speaker 1: feels Department of Justice or SEC can fix the international
Speaker 1: regulation conundrum of crypto. How do you envision them moving forward?
Speaker 1: I think they need to do it just like they've
Speaker 1: done any other industry over the last one years. You
Speaker 1: gotta punch it right in the face, and you've got
Speaker 1: to address it and embrace it and really get to
Speaker 1: know it and understand it. You know, some of the
Speaker 1: times they've come out with statements have just shown that
Speaker 1: they actually truly don't understand the underlying when I believe
Speaker 1: that the majority of the real players and crypto embrace
Speaker 1: that regulation because they know that that will open up
Speaker 1: those floodgates for that institutional capital, and so they just
Speaker 1: to really get people around the table that know what
Speaker 1: they're talking about and put some regulation in plate. It
Speaker 1: brings comfort to be clear here, Well, bitcoin fifteen to
Speaker 1: twenty three thousand, are you considering it's appropriate in a
Speaker 1: portfolio today? I always do, you know. I think bitcoin's
Speaker 1: trading at year end was somewhat driven around the fact
Speaker 1: that people tax lost harvest into the new year and
Speaker 1: they realized that they can put a little bit away.
Speaker 1: People don't realize that bitcoin isn't subject to wash rules,
Speaker 1: So there's a lot of trading like that that occurs.
Speaker 1: And then you've seen a lot of people leaning in
Speaker 1: here in Q one because the FCX stuff and a
Speaker 1: lot of bad stuff flushed out in Q four. I'm
Speaker 1: not sure how much bad news can can continue to come. Well,
Speaker 1: thank you so much, very candid there well William McDonald
Speaker 1: with us from Element Funds Today. This is the Bloomberg
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