1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Millah. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast 5 00:00:15,560 --> 00:00:18,479 Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:20,800 Speaker 1: at Bloomberg dot com slash podcast. Now, I want to 7 00:00:20,800 --> 00:00:24,799 Speaker 1: bring in Timothy fiora chairman of the Manufacturing Business Survey 8 00:00:24,920 --> 00:00:27,880 Speaker 1: from the Institute for Supply Management. We saw a beat 9 00:00:27,960 --> 00:00:33,400 Speaker 1: tim today and um again over the previous figure. What 10 00:00:33,479 --> 00:00:36,320 Speaker 1: does this tell us about, you know, the reopening of 11 00:00:36,400 --> 00:00:40,400 Speaker 1: the US economy. Good morning, Pol, morning Matt. So this 12 00:00:40,479 --> 00:00:42,720 Speaker 1: is the fourth month over sixty man, We're we are 13 00:00:42,760 --> 00:00:46,040 Speaker 1: burning hot. So this is the second highest pm I 14 00:00:46,120 --> 00:00:48,680 Speaker 1: number that we've seen since May of o for and 15 00:00:48,840 --> 00:00:50,720 Speaker 1: this number is better than any number that we saw 16 00:00:50,800 --> 00:00:54,720 Speaker 1: in the nine run up that was probably one of 17 00:00:54,720 --> 00:00:57,040 Speaker 1: the highest quality manufacturing run ups that we've had in 18 00:00:57,040 --> 00:01:00,280 Speaker 1: the last twenty year. So things are really off in 19 00:01:00,520 --> 00:01:02,800 Speaker 1: very well, except we've got issues on the labor side. 20 00:01:02,800 --> 00:01:06,120 Speaker 1: I mean, this number would have been stronger if if 21 00:01:06,120 --> 00:01:08,959 Speaker 1: the employment number at our panelists companies would have been 22 00:01:09,000 --> 00:01:11,960 Speaker 1: allowed to grow. And you know, clearly with the supply 23 00:01:12,080 --> 00:01:14,560 Speaker 1: delivery number being as highed as they're struggling with still 24 00:01:14,600 --> 00:01:17,640 Speaker 1: attracting people back to the workforce. So it's all the 25 00:01:17,680 --> 00:01:20,399 Speaker 1: whole issue now is people coming back to the workforce 26 00:01:20,680 --> 00:01:22,880 Speaker 1: because there's plenty of demand there and plenty of backblog 27 00:01:22,920 --> 00:01:25,320 Speaker 1: to work on. Talk to us about this supply chain. 28 00:01:25,360 --> 00:01:27,680 Speaker 1: We know we keep hearing stories about how a lot 29 00:01:27,720 --> 00:01:31,360 Speaker 1: of these manufacturers are finding trouble or having trouble finding 30 00:01:31,640 --> 00:01:34,400 Speaker 1: the raw materials and on a timely basis, how's that 31 00:01:34,480 --> 00:01:37,240 Speaker 1: impacting the numbers that you look at tim Well, we 32 00:01:37,280 --> 00:01:39,320 Speaker 1: have a record lead time, so we've never had lead 33 00:01:39,319 --> 00:01:42,720 Speaker 1: times extended out this long ever. UH had many panelists 34 00:01:42,760 --> 00:01:46,520 Speaker 1: comment about they've never been years in the businesses, They've 35 00:01:46,520 --> 00:01:50,320 Speaker 1: never seen a combination of shortages, lead time extensions and 36 00:01:50,400 --> 00:01:53,280 Speaker 1: price increases like they've seen over the last six or 37 00:01:53,320 --> 00:01:55,720 Speaker 1: nine months. So you know, if you peel the whole 38 00:01:55,720 --> 00:01:58,400 Speaker 1: thing back, it's the supply community is having trouble getting 39 00:01:58,400 --> 00:02:02,800 Speaker 1: people to response to work request to we we had 40 00:02:03,640 --> 00:02:07,040 Speaker 1: my employment comments were companies trying to hire and of 41 00:02:07,160 --> 00:02:10,000 Speaker 1: that said that they are having difficulty and hiring that's 42 00:02:10,000 --> 00:02:13,080 Speaker 1: a really dramatic number. On the sentiment side, we had 43 00:02:13,120 --> 00:02:16,080 Speaker 1: thirty six for every one person who was really positive 44 00:02:16,120 --> 00:02:18,680 Speaker 1: about the future. That's I've never seen a number that high. 45 00:02:19,040 --> 00:02:21,680 Speaker 1: And from an employment standpoint, we have twelve people trying 46 00:02:21,720 --> 00:02:25,120 Speaker 1: to hire with one person trying to a trip or 47 00:02:25,240 --> 00:02:29,600 Speaker 1: freeze or hiring manpower style, so all really positive numbers here. 48 00:02:30,120 --> 00:02:33,160 Speaker 1: The horizon looks very strong. This number would have been 49 00:02:33,240 --> 00:02:36,560 Speaker 1: quite a bit higher if if our panelist companies could 50 00:02:36,560 --> 00:02:38,600 Speaker 1: have hired more. You know, at the fifty point four 51 00:02:39,240 --> 00:02:41,720 Speaker 1: fifty point nine number on the employment compared to all 52 00:02:41,720 --> 00:02:44,840 Speaker 1: the others that we're getting closest to a sixty and 53 00:02:44,880 --> 00:02:49,160 Speaker 1: sixty five. That was the whole story. Inventories, the shelves 54 00:02:49,200 --> 00:02:53,519 Speaker 1: are empty. Tim or is the hiring problem because they're 55 00:02:53,560 --> 00:02:57,200 Speaker 1: not paying enough. I mean, um, you know, I'll do 56 00:02:57,320 --> 00:03:01,160 Speaker 1: probably anything for you if you double my salary. But 57 00:03:01,160 --> 00:03:03,280 Speaker 1: but obviously there are some things that I can't do 58 00:03:03,320 --> 00:03:05,519 Speaker 1: because I don't know how to. Is it a skill 59 00:03:05,680 --> 00:03:11,239 Speaker 1: issue or is it a wage issue? Well, it's competition. 60 00:03:11,360 --> 00:03:14,359 Speaker 1: So everybody has been paying more. They've been paying bonuses, 61 00:03:14,520 --> 00:03:18,639 Speaker 1: they've been paying hazard pay, signing bonuses, referrals and they've 62 00:03:18,680 --> 00:03:21,600 Speaker 1: been increasing wages to to attract more people. At some 63 00:03:21,680 --> 00:03:24,720 Speaker 1: point you kind of cap out because this kind of 64 00:03:24,840 --> 00:03:28,000 Speaker 1: imbalance in the labor market doesn't last forever for the 65 00:03:28,000 --> 00:03:31,040 Speaker 1: wage increased us. So people are kind of saying, Okay, 66 00:03:31,080 --> 00:03:32,520 Speaker 1: I've done as far as I can go. I'm not 67 00:03:32,520 --> 00:03:33,960 Speaker 1: going to pay through the dollars an hour for a 68 00:03:33,960 --> 00:03:35,840 Speaker 1: twenty dollar an hour job because I'm stuck with it. 69 00:03:36,160 --> 00:03:37,880 Speaker 1: I'd have to lay everybody off at the end of 70 00:03:37,880 --> 00:03:40,000 Speaker 1: this thing to get back down to the right cost structure. 71 00:03:40,400 --> 00:03:43,440 Speaker 1: So we're kind of frozen and you get the combination now. Though. 72 00:03:43,440 --> 00:03:45,280 Speaker 1: The good thing is you get the summertime coming, so 73 00:03:45,360 --> 00:03:47,360 Speaker 1: people know how to deal with their children in the summertime. 74 00:03:47,680 --> 00:03:49,760 Speaker 1: The school issue is no longer an issue, so that's 75 00:03:49,760 --> 00:03:52,480 Speaker 1: off the table. There's twenty states that have that have 76 00:03:52,560 --> 00:03:56,560 Speaker 1: decided to suspend federal support on the unemployment side and 77 00:03:56,560 --> 00:03:59,040 Speaker 1: the special unemployment. I think that's a really good thing. 78 00:03:59,040 --> 00:04:00,760 Speaker 1: There's a lot of states are trying to get people 79 00:04:00,760 --> 00:04:03,680 Speaker 1: back to work and paying them. That sets up a conflict. 80 00:04:04,480 --> 00:04:06,440 Speaker 1: Uh So, I think this thing is going to run 81 00:04:06,480 --> 00:04:08,720 Speaker 1: with us though until the end of September, because we 82 00:04:08,800 --> 00:04:11,920 Speaker 1: got thirty states that aren't withdrawing the federal support. So 83 00:04:12,480 --> 00:04:15,160 Speaker 1: number one, you get the employment issue for the schooling 84 00:04:15,160 --> 00:04:17,200 Speaker 1: issue going away. We're in the summertime. People know how 85 00:04:17,200 --> 00:04:19,240 Speaker 1: to take care of the kids in the summertime. It's 86 00:04:19,240 --> 00:04:20,760 Speaker 1: no longer do when they go to class or not. 87 00:04:20,880 --> 00:04:23,279 Speaker 1: And then the second thing here is that we're withdrawing 88 00:04:23,320 --> 00:04:25,720 Speaker 1: that financial incentive for people to kind of debate about 89 00:04:25,720 --> 00:04:27,840 Speaker 1: whether they should stay home or not. But there are 90 00:04:27,839 --> 00:04:30,480 Speaker 1: still thirty states that are not doing that. So by 91 00:04:30,520 --> 00:04:32,800 Speaker 1: the time we get to September October, this whole thing 92 00:04:32,800 --> 00:04:35,359 Speaker 1: should kind of clear up. In the meantime, there's plenty 93 00:04:35,360 --> 00:04:38,440 Speaker 1: of work out there. There's plenty of business. We just 94 00:04:38,480 --> 00:04:40,920 Speaker 1: need the people to come in to do it, all right, 95 00:04:40,960 --> 00:04:43,080 Speaker 1: and thanks so much for joining us. Just some historic 96 00:04:43,160 --> 00:04:45,000 Speaker 1: numbers coming out on the other side of this. Again, 97 00:04:45,000 --> 00:04:46,920 Speaker 1: there were historic going into it as we think about 98 00:04:46,960 --> 00:04:48,640 Speaker 1: a year ago, and we're starting to see the flip 99 00:04:48,680 --> 00:04:52,240 Speaker 1: side of that here, certainly from the manufacturing site extraordinary numbers, 100 00:04:52,240 --> 00:04:56,279 Speaker 1: Tim Fury, chairman, the Manufacturing Business Survey for the Institute 101 00:04:56,320 --> 00:04:59,800 Speaker 1: for Supply Management, and the numbers matter just you know, 102 00:05:00,000 --> 00:05:02,599 Speaker 1: straordinary and the labors a key issues as we heard 103 00:05:02,600 --> 00:05:08,080 Speaker 1: from Tim well, certainly as we begin to emerge from 104 00:05:08,080 --> 00:05:11,640 Speaker 1: this pandemic and the economic carnage caused by it. You 105 00:05:11,720 --> 00:05:14,720 Speaker 1: just need to walk down Main Street USA around this 106 00:05:14,760 --> 00:05:18,279 Speaker 1: country and you see so many vacant storefronts here and 107 00:05:18,279 --> 00:05:22,120 Speaker 1: it becomes so apparent how small businesses were really impacted 108 00:05:22,120 --> 00:05:26,440 Speaker 1: by this economic disruption and questions how will they recover 109 00:05:26,560 --> 00:05:29,160 Speaker 1: on the other side of a. J. Demarto, he's had 110 00:05:29,160 --> 00:05:32,279 Speaker 1: of commercial distribution at TD Bank. They have a small 111 00:05:32,320 --> 00:05:35,840 Speaker 1: business survey and lots of cool information. Jay, thanks so 112 00:05:35,920 --> 00:05:38,599 Speaker 1: much for joining us here. Again, it seems like small 113 00:05:38,600 --> 00:05:42,920 Speaker 1: businesses really bore the brunt of the economic disruption caused 114 00:05:42,960 --> 00:05:45,960 Speaker 1: by the pandemic. How do they expect to recover here 115 00:05:46,000 --> 00:05:49,279 Speaker 1: as we emerge on the other side, Well, you know, 116 00:05:49,360 --> 00:05:53,680 Speaker 1: we we survey companies every year and um this year 117 00:05:53,720 --> 00:05:56,840 Speaker 1: we surveyed seminar and fifty and it's always important to 118 00:05:56,880 --> 00:05:59,599 Speaker 1: remember how small some of these companies really are. There's 119 00:05:59,640 --> 00:06:04,600 Speaker 1: thirty and small businesses in the US, and of them 120 00:06:04,600 --> 00:06:07,479 Speaker 1: are sold props, so they're working for themselves by themselves 121 00:06:07,880 --> 00:06:10,440 Speaker 1: and small business That thirty million is the largest segment 122 00:06:10,480 --> 00:06:13,960 Speaker 1: of businesses in the US and of all businesses, so 123 00:06:14,600 --> 00:06:17,080 Speaker 1: it tells you just out of the gate. Very many 124 00:06:17,200 --> 00:06:21,200 Speaker 1: businesses are just you know, one person working for themselves, 125 00:06:20,360 --> 00:06:23,480 Speaker 1: and of them have revenue less than a hundred thousand dollars, 126 00:06:23,480 --> 00:06:25,800 Speaker 1: so they're not they're not big. They don't have a 127 00:06:25,839 --> 00:06:28,480 Speaker 1: lot of capital, and uh, you know, to get through 128 00:06:28,520 --> 00:06:31,480 Speaker 1: a pandemic or whether a storm. We actually look at 129 00:06:31,480 --> 00:06:34,599 Speaker 1: business closings and our survey results. They actually did pretty well, 130 00:06:34,720 --> 00:06:37,240 Speaker 1: which shows some of the government programs had a good 131 00:06:37,240 --> 00:06:40,760 Speaker 1: effect and they you know, tighten their belts and found 132 00:06:40,800 --> 00:06:44,599 Speaker 1: other ways to accept payments and change their business lines 133 00:06:44,680 --> 00:06:49,400 Speaker 1: and and uh, you know survive, which was huge. Do 134 00:06:49,440 --> 00:06:55,599 Speaker 1: we need, um the fiscal support to keep coming? You know, 135 00:06:55,800 --> 00:06:59,279 Speaker 1: it was it was highly effective. If you think about 136 00:06:59,320 --> 00:07:03,280 Speaker 1: P P P and particular, I think there were ow 137 00:07:03,960 --> 00:07:07,920 Speaker 1: um you know, eight million or so loans done by 138 00:07:07,920 --> 00:07:11,800 Speaker 1: the government. We a TD bank, We did um a 139 00:07:11,880 --> 00:07:13,840 Speaker 1: hundred and thirty three thousand of them ourselves. We were 140 00:07:13,960 --> 00:07:17,120 Speaker 1: top ten bank participating in it. And I found that, 141 00:07:17,200 --> 00:07:20,640 Speaker 1: you know, people who took those loans um really needed them. 142 00:07:20,920 --> 00:07:23,720 Speaker 1: Um you know, about a third of all companies in 143 00:07:23,760 --> 00:07:27,240 Speaker 1: the US took a loan, which is pretty incredible. So uh, 144 00:07:27,280 --> 00:07:29,720 Speaker 1: you know, sixty of the people we surveyed said they 145 00:07:29,760 --> 00:07:33,160 Speaker 1: were effective, and they also said they could be more 146 00:07:33,200 --> 00:07:36,840 Speaker 1: effective by you know, getting more money. Um. The original 147 00:07:36,880 --> 00:07:39,280 Speaker 1: loan amount was two and a half times one month 148 00:07:39,320 --> 00:07:43,360 Speaker 1: of payroll expenses, so that anticipated the pandemic would probably 149 00:07:43,440 --> 00:07:46,160 Speaker 1: last this summer. Last year, we all know when quite 150 00:07:46,200 --> 00:07:48,520 Speaker 1: a bit longer. So that's you know, hence the program 151 00:07:48,560 --> 00:07:50,520 Speaker 1: that came out this year kind of doubled down and 152 00:07:50,520 --> 00:07:53,040 Speaker 1: helped people out this year as well. So I do 153 00:07:53,080 --> 00:07:55,840 Speaker 1: think overall they were effective. You know, small business closings 154 00:07:55,840 --> 00:07:59,880 Speaker 1: we're seeing in our customer base and also just nationally 155 00:08:00,280 --> 00:08:03,240 Speaker 1: UM really haven't gone up. I know you mentioned retail 156 00:08:03,280 --> 00:08:05,520 Speaker 1: at the beginning of the segment. That was a hard 157 00:08:05,560 --> 00:08:09,320 Speaker 1: hit segment clearly, as well as you know, hospitality, restaurants 158 00:08:09,320 --> 00:08:13,400 Speaker 1: and the like. But you know, construction, accounting, UM, a 159 00:08:13,440 --> 00:08:16,200 Speaker 1: lot of those other industries that they did well, they thrived, 160 00:08:16,680 --> 00:08:20,680 Speaker 1: So Jay, you know, again, as you walk down Main Street, USA, UM, 161 00:08:20,720 --> 00:08:23,720 Speaker 1: you see some abandoned storefronts for businesses that went out 162 00:08:23,760 --> 00:08:27,240 Speaker 1: of business. But the businesses that survived you see in 163 00:08:27,320 --> 00:08:30,920 Speaker 1: their windows. Help want it talk to us about some 164 00:08:30,960 --> 00:08:33,680 Speaker 1: of these small businesses. Are they able to hire the 165 00:08:33,679 --> 00:08:36,959 Speaker 1: people they need to either reopen or or maybe grow. 166 00:08:38,160 --> 00:08:41,360 Speaker 1: You know, that has been a problem. UM. In our survey, 167 00:08:42,440 --> 00:08:46,720 Speaker 1: all the businesses business owners are fairly optimistic. Uh, you know, 168 00:08:46,760 --> 00:08:51,160 Speaker 1: for six percent said they're either going to grow revenue 169 00:08:51,240 --> 00:08:53,160 Speaker 1: or stay the same. The way they're going to grow 170 00:08:53,679 --> 00:08:58,080 Speaker 1: is by expanding hours or expanding products and services. Sing 171 00:08:58,080 --> 00:09:01,480 Speaker 1: gonna expand hours. Over five percent say they want to 172 00:09:01,520 --> 00:09:05,920 Speaker 1: expand products and services. That type of UM. You know, 173 00:09:05,960 --> 00:09:11,280 Speaker 1: growth requires hiring that you mentioned, and you know, trying 174 00:09:11,280 --> 00:09:13,600 Speaker 1: to find employees now. And I'm hearing from all of 175 00:09:13,600 --> 00:09:18,040 Speaker 1: our customers that it's a very tight labor market. So 176 00:09:18,120 --> 00:09:21,040 Speaker 1: I wonder what you think of the possibility of inflation 177 00:09:21,120 --> 00:09:26,040 Speaker 1: then being less than transient. Yeah, there's a lot of 178 00:09:26,040 --> 00:09:28,400 Speaker 1: money in the system, you know, I mentioned p PP. 179 00:09:28,720 --> 00:09:33,640 Speaker 1: We've seen a lot of was nut so right, I 180 00:09:33,679 --> 00:09:37,360 Speaker 1: mean last week and and so there's more of it 181 00:09:37,360 --> 00:09:40,040 Speaker 1: there too. You're right, UM, all kinding capital coming in, 182 00:09:40,120 --> 00:09:43,120 Speaker 1: and we're seeing in our deposit accounts of our small 183 00:09:43,120 --> 00:09:46,280 Speaker 1: business customers and just business customers they're pretty inflated. So 184 00:09:46,679 --> 00:09:48,800 Speaker 1: they should be in a good capital position, and a 185 00:09:48,840 --> 00:09:51,360 Speaker 1: lot of them have applied for lines of credit or 186 00:09:51,760 --> 00:09:56,160 Speaker 1: kind of backstop type of facilities. So yes, I think 187 00:09:56,200 --> 00:09:58,280 Speaker 1: inflation and you see that much money in the system, 188 00:09:58,600 --> 00:10:01,000 Speaker 1: and you know, labor rates are gonna have to go 189 00:10:01,080 --> 00:10:03,160 Speaker 1: up to attract labor. And I know you guys have 190 00:10:03,240 --> 00:10:05,719 Speaker 1: heard the statistics on things like you know, two by 191 00:10:05,720 --> 00:10:11,720 Speaker 1: fours and construction materials all highly inflated right now. All right, Jay, 192 00:10:11,720 --> 00:10:14,240 Speaker 1: thanks so much for joining us. We really appreciate you 193 00:10:14,360 --> 00:10:17,240 Speaker 1: coming on sharing some of the findings from the TD 194 00:10:17,320 --> 00:10:21,880 Speaker 1: banks small business survey. Generally an optimistic crew, um, you know, 195 00:10:21,880 --> 00:10:24,800 Speaker 1: the small business folks. J Demarto, he's had of commercial 196 00:10:24,840 --> 00:10:27,560 Speaker 1: distribution for TD Bank. When you think about small business owners, 197 00:10:27,720 --> 00:10:31,320 Speaker 1: I think, by nature, um, you know, they're pretty optimistic crew, 198 00:10:31,320 --> 00:10:34,480 Speaker 1: because they're putting a lot of capital risk of putting 199 00:10:34,480 --> 00:10:37,439 Speaker 1: their welfare at risk. But we're starting to see more 200 00:10:37,440 --> 00:10:39,439 Speaker 1: and more of these stores reopening and that's good to 201 00:10:39,480 --> 00:10:45,640 Speaker 1: see across UH Middle America. Here on Main Street, Melding 202 00:10:45,640 --> 00:10:49,840 Speaker 1: and David Steamer, he is the CEO at Wave. Financial 203 00:10:49,920 --> 00:10:53,120 Speaker 1: Wave was set up to bridge the divide between the 204 00:10:53,160 --> 00:10:59,080 Speaker 1: traditional investment management business and crypto assets and they've gotten now, 205 00:10:59,440 --> 00:11:03,160 Speaker 1: um what, five hundred million dollars in assets under management. David, 206 00:11:03,160 --> 00:11:06,280 Speaker 1: I'm wondering who you're clients are. What's your client base 207 00:11:06,360 --> 00:11:10,440 Speaker 1: look like? Yeah, all right, thanks for having me first. Um, yeah, 208 00:11:10,440 --> 00:11:12,160 Speaker 1: it's a mix. We have a lot of high net worths, 209 00:11:12,840 --> 00:11:16,320 Speaker 1: probably how about half our clients where we call crypto natives, 210 00:11:16,360 --> 00:11:18,160 Speaker 1: so they're most our networth of crypto. We do a 211 00:11:18,160 --> 00:11:20,640 Speaker 1: lot of yield strategies for them, and I mean less 212 00:11:20,720 --> 00:11:23,880 Speaker 1: kind of crypto native or less cryptognoledgeable. It's more access strategies, 213 00:11:23,880 --> 00:11:26,200 Speaker 1: you know, get them, you know, bitcoin or other tokens, 214 00:11:26,520 --> 00:11:30,440 Speaker 1: and then eventually putting yield strategies around us. David talked 215 00:11:30,440 --> 00:11:33,360 Speaker 1: to us about the volatility we've seen in crypto really 216 00:11:33,400 --> 00:11:35,880 Speaker 1: over the last month or so. I think that's kind 217 00:11:35,880 --> 00:11:37,920 Speaker 1: of for a lot of critics. It's given them some 218 00:11:37,960 --> 00:11:40,880 Speaker 1: ammunition saying, you look at bitcoin and some of the others, 219 00:11:41,440 --> 00:11:44,360 Speaker 1: the volatility there just takes away some of the legitimacy 220 00:11:44,440 --> 00:11:48,160 Speaker 1: or calls into question some of the legitimacy as cryptos 221 00:11:48,200 --> 00:11:52,760 Speaker 1: as an asset class. What are your views, Yeah, I 222 00:11:52,800 --> 00:11:55,719 Speaker 1: mean what happened in the last month is and this 223 00:11:55,880 --> 00:11:57,760 Speaker 1: is what's kind of been a cycle we've seen the 224 00:11:57,840 --> 00:11:59,959 Speaker 1: last eight years. Is you know, a lot of crypto 225 00:12:00,000 --> 00:12:03,160 Speaker 1: originally was held in China. A lot of it's I've 226 00:12:03,200 --> 00:12:05,120 Speaker 1: been kind of flowing out of China recently, which is 227 00:12:05,160 --> 00:12:06,600 Speaker 1: what you know, it's kind of been rushing onto pushing 228 00:12:06,600 --> 00:12:09,480 Speaker 1: the prices down. And every year, right around this time 229 00:12:09,520 --> 00:12:11,440 Speaker 1: of year, China makes a bunch of announcements, some of 230 00:12:11,440 --> 00:12:13,680 Speaker 1: which they follow through on somewhere they don't, which really 231 00:12:13,720 --> 00:12:17,160 Speaker 1: affect the price. UM. As far as legitimacy of crypto, 232 00:12:17,280 --> 00:12:18,959 Speaker 1: you know, it's a little bit of different question. Yes, 233 00:12:18,960 --> 00:12:22,120 Speaker 1: the volatility is scary when it's downside volatility. Obviously, when 234 00:12:22,160 --> 00:12:25,120 Speaker 1: it's upside volatility, it's not that scart um, But it's 235 00:12:25,120 --> 00:12:26,880 Speaker 1: this kind of nature of the asset. You know, it 236 00:12:27,000 --> 00:12:29,040 Speaker 1: is part of why Wave focus is pretty heavily on 237 00:12:29,120 --> 00:12:31,400 Speaker 1: yield strategies, Like we do a lot of derivative strategies 238 00:12:31,400 --> 00:12:34,240 Speaker 1: for our clients UM to put you know, the futility 239 00:12:34,320 --> 00:12:36,360 Speaker 1: is not neither good nor bad it by itself. You know, 240 00:12:36,360 --> 00:12:38,720 Speaker 1: if you can leverage of alatility into certain ways, that's 241 00:12:38,720 --> 00:12:41,440 Speaker 1: it's pretty powerful. Um. But yeah, it does spook a 242 00:12:41,440 --> 00:12:43,400 Speaker 1: lot of people. There was a lot of talking ets 243 00:12:43,480 --> 00:12:46,480 Speaker 1: coming out in the next you know, in the US, uh, 244 00:12:46,520 --> 00:12:48,599 Speaker 1: you know, approval by the sec and I think this 245 00:12:48,760 --> 00:12:51,440 Speaker 1: little bout of alatility will probably have a negative impact 246 00:12:51,480 --> 00:12:53,920 Speaker 1: on that will probably give them justification to continue to 247 00:12:54,080 --> 00:12:57,760 Speaker 1: push that out. Nonetheless, we're talking about lines of code 248 00:12:57,800 --> 00:13:01,440 Speaker 1: that over a decade have gone from being worth nothing 249 00:13:01,880 --> 00:13:05,520 Speaker 1: to being worth forty tho bucks apiece. I mean, the 250 00:13:05,880 --> 00:13:10,200 Speaker 1: growth is impressive. I'm wondering about your yield strategies. I've 251 00:13:10,240 --> 00:13:12,840 Speaker 1: been hearing more and more about this. Joe Wisenhal's podcast 252 00:13:12,920 --> 00:13:19,000 Speaker 1: interviewed a yield farmer the other day. What what is that? Yeah, 253 00:13:19,040 --> 00:13:20,880 Speaker 1: I mean, so these are really unique assets. So a 254 00:13:20,880 --> 00:13:22,880 Speaker 1: lot of the world still can only think of like 255 00:13:22,920 --> 00:13:25,680 Speaker 1: bitcoin as kind of a digital stock certificates, and it's 256 00:13:25,679 --> 00:13:27,840 Speaker 1: it's actually a lot more than that. And it's it's fractionable. 257 00:13:27,880 --> 00:13:31,199 Speaker 1: It's one's fractionable in the hundreds of millions. You can 258 00:13:31,200 --> 00:13:33,560 Speaker 1: wrap them in certain other assets and take them into 259 00:13:33,679 --> 00:13:37,720 Speaker 1: like a centralized finance. Again, these are very dynamic assets. 260 00:13:37,720 --> 00:13:39,720 Speaker 1: You know, most of the coins now we're staking coins, 261 00:13:39,760 --> 00:13:41,120 Speaker 1: which is a you know, kind of different than the 262 00:13:41,160 --> 00:13:43,960 Speaker 1: mining network. It's a way of registering your tokens to 263 00:13:43,960 --> 00:13:46,400 Speaker 1: a network. But the fact that they yield nothing. David 264 00:13:46,720 --> 00:13:52,520 Speaker 1: has been a criticism doesn't yield anything, you know, don't 265 00:13:52,559 --> 00:13:55,920 Speaker 1: yield anything. People people always say that, just like they've 266 00:13:55,920 --> 00:13:58,480 Speaker 1: always criticized gold for the same reason. Um, and I 267 00:13:58,520 --> 00:14:01,000 Speaker 1: get it. But you talk about yeld strategy, So what 268 00:14:01,040 --> 00:14:04,680 Speaker 1: are what are yield strategies? Yeah, So there's a huge 269 00:14:04,760 --> 00:14:07,120 Speaker 1: lack of liquidity in crypto, meaning in the sense of 270 00:14:07,280 --> 00:14:09,400 Speaker 1: there's a lot of need for dollars. So you have 271 00:14:09,520 --> 00:14:12,400 Speaker 1: cash now it's the odd of any currency, and you're 272 00:14:12,400 --> 00:14:14,280 Speaker 1: willing to lend it into crypto, which is going to 273 00:14:14,440 --> 00:14:17,320 Speaker 1: people that are like financy, mining equipment or you know, 274 00:14:17,520 --> 00:14:20,440 Speaker 1: market usual headphones things like that. There's a really high 275 00:14:20,520 --> 00:14:24,200 Speaker 1: yield upwards of a year, which obviously is not sustainable 276 00:14:24,240 --> 00:14:26,720 Speaker 1: long term, but it's a really nice yield UM. So 277 00:14:26,760 --> 00:14:28,840 Speaker 1: you can lend cash into the markets. You can also 278 00:14:28,920 --> 00:14:31,120 Speaker 1: lend the actual crypto assets. We do a lot of 279 00:14:31,440 --> 00:14:34,040 Speaker 1: bitcoin lending for our clients. People want to borrow it 280 00:14:34,080 --> 00:14:37,040 Speaker 1: to shortage or whatever. You know, you can get you know, 281 00:14:37,160 --> 00:14:39,040 Speaker 1: you can rapid uneath and put in de fi. You 282 00:14:39,040 --> 00:14:41,040 Speaker 1: can get up words of like six seven percent a year. 283 00:14:41,680 --> 00:14:43,600 Speaker 1: It was just pretty material in this day and age. 284 00:14:43,600 --> 00:14:45,480 Speaker 1: I mean every year you have six or seven percent 285 00:14:45,520 --> 00:14:49,640 Speaker 1: more bitcoin um so so it's pretty powerful strategies and 286 00:14:49,640 --> 00:14:51,320 Speaker 1: that's kind of where we Wave was built to take 287 00:14:51,320 --> 00:14:58,080 Speaker 1: advantage of. Um, Yeah, David, what's the next notable event 288 00:14:58,160 --> 00:15:01,280 Speaker 1: that you need to see just in broad crypto, maybe 289 00:15:01,320 --> 00:15:03,880 Speaker 1: just make a little bit more mainstream. What's what's the 290 00:15:03,920 --> 00:15:07,680 Speaker 1: defining thing that you need to see next? And most 291 00:15:07,680 --> 00:15:09,880 Speaker 1: of it comes down to regulation, I mean, I think, 292 00:15:09,880 --> 00:15:11,520 Speaker 1: which we're starting to see. There's been a lot of 293 00:15:11,560 --> 00:15:14,480 Speaker 1: pronouncements recently, you know, for people that are die hard 294 00:15:14,560 --> 00:15:16,680 Speaker 1: crypt of people like myself, like you don't really want 295 00:15:16,680 --> 00:15:19,520 Speaker 1: to see the regulators way in. But for broad adoption, 296 00:15:19,520 --> 00:15:22,280 Speaker 1: and it's it's very powerful, you know. So eventually we 297 00:15:22,320 --> 00:15:25,800 Speaker 1: will see SEC approved you know, bitcoin ETF and things 298 00:15:25,800 --> 00:15:27,800 Speaker 1: like that, which I think will add a lot of adoption, 299 00:15:27,920 --> 00:15:30,280 Speaker 1: just moves a lot of the barriers, also provide that 300 00:15:30,840 --> 00:15:33,400 Speaker 1: umbrella of legitimacy to a lot of other users that 301 00:15:33,920 --> 00:15:35,880 Speaker 1: you know, haven't spent ten years in misassa class and 302 00:15:35,960 --> 00:15:39,160 Speaker 1: got comfortable with it. So so they'll be I think 303 00:15:39,360 --> 00:15:41,240 Speaker 1: I think the regulators will lead the way on some 304 00:15:41,320 --> 00:15:43,480 Speaker 1: of these things. Now, I think it will take time. Right, 305 00:15:43,840 --> 00:15:47,840 Speaker 1: we actually looked launching a bitcoin ets and have a 306 00:15:47,880 --> 00:15:50,200 Speaker 1: lot of money on it and then stop spending money 307 00:15:50,240 --> 00:15:51,760 Speaker 1: on it when it looked like it wasn't gonna happen 308 00:15:51,800 --> 00:15:53,840 Speaker 1: for years, and we still don't know. I mean, everyone 309 00:15:53,960 --> 00:15:56,040 Speaker 1: thought at bitcoin e ts in the US is like 310 00:15:56,120 --> 00:15:59,560 Speaker 1: three to six months away for five years, all right, David, 311 00:15:59,560 --> 00:16:01,520 Speaker 1: thanks so much for joining us. We really appreciate that, 312 00:16:01,560 --> 00:16:04,760 Speaker 1: really fascinating stuff. David Seemur's the CEO of Wave Financial, 313 00:16:04,880 --> 00:16:07,680 Speaker 1: really all over that crypto space. It's you know, you 314 00:16:07,720 --> 00:16:10,920 Speaker 1: feel like it's just very very much in its infancy, 315 00:16:11,200 --> 00:16:12,840 Speaker 1: although it's been around for a while, and Matt, you've 316 00:16:12,880 --> 00:16:14,840 Speaker 1: certainly been talking about it for a long time, but 317 00:16:14,880 --> 00:16:16,920 Speaker 1: it just feels like it's in its infancy and there's 318 00:16:16,960 --> 00:16:19,680 Speaker 1: just a tremendous amount of growth ahead of it. And 319 00:16:19,720 --> 00:16:25,280 Speaker 1: the question is to what extent will it be regulated? Matt, 320 00:16:25,320 --> 00:16:28,680 Speaker 1: I'm sure you've owned, you know, forever, the big tech names, 321 00:16:28,680 --> 00:16:31,400 Speaker 1: the Amazon's, the Google's of facebooks, and you've just been 322 00:16:31,480 --> 00:16:32,880 Speaker 1: laughing all the way to the bank. But a lot 323 00:16:32,880 --> 00:16:36,720 Speaker 1: of folks felt like they missed it and will there 324 00:16:36,720 --> 00:16:38,720 Speaker 1: ever be an opportunity to get some of those hyper 325 00:16:38,720 --> 00:16:41,800 Speaker 1: growth names again. While our next guest suggests maybe so, 326 00:16:41,920 --> 00:16:45,680 Speaker 1: Vincent del Ward he's a global macro strategist for stone 327 00:16:46,000 --> 00:16:48,760 Speaker 1: X and they just put out a report entitled Impossible 328 00:16:48,800 --> 00:16:53,760 Speaker 1: Growth at an Unreasonable Price The sixty Next Amazons Vinca, 329 00:16:53,800 --> 00:16:56,320 Speaker 1: thanks so much for joining us here. What's kind of 330 00:16:56,320 --> 00:17:00,120 Speaker 1: the key takeaway from your most recent report about m 331 00:17:01,200 --> 00:17:05,879 Speaker 1: sixty next Amazons? Well, thanks for having me, Um. The 332 00:17:05,960 --> 00:17:08,760 Speaker 1: key takeaway is that you know, we have a lot 333 00:17:08,800 --> 00:17:12,880 Speaker 1: of excitement about growth and a certain very large GTF 334 00:17:13,119 --> 00:17:17,160 Speaker 1: bedding on a on a bright future, Um, and it's 335 00:17:18,520 --> 00:17:21,120 Speaker 1: it's possible. I mean, we saw it with the big 336 00:17:21,160 --> 00:17:23,679 Speaker 1: text on the Magastons, that we see the x flory 337 00:17:23,720 --> 00:17:27,920 Speaker 1: growth that surprises everybody. The question is how many of 338 00:17:27,960 --> 00:17:30,800 Speaker 1: these stocks can we expect to see? And what I 339 00:17:30,880 --> 00:17:34,520 Speaker 1: did in this report is I projected the growth pass 340 00:17:34,520 --> 00:17:41,200 Speaker 1: of the magathtock so Microsoft, Apple, Google, Um, Amazon, Yeah, 341 00:17:41,440 --> 00:17:46,000 Speaker 1: and and discounted it to the present and founded the 342 00:17:46,080 --> 00:17:51,280 Speaker 1: market is already pricing the scenario and more for sixty stocks. 343 00:17:51,320 --> 00:17:53,440 Speaker 1: So either we were live in a bright future where 344 00:17:53,480 --> 00:17:55,960 Speaker 1: we'll have trying cars and we live forever and we're 345 00:17:55,960 --> 00:17:59,719 Speaker 1: longer have to work, or some of these names are 346 00:18:00,280 --> 00:18:03,440 Speaker 1: obscene me and observed me over value. Yeah. So your 347 00:18:03,440 --> 00:18:07,000 Speaker 1: point is not that these are sixty stocks that you 348 00:18:07,000 --> 00:18:08,919 Speaker 1: can make a killing on the way you would have 349 00:18:09,000 --> 00:18:13,520 Speaker 1: with Amazon twenty years ago, but that it's just terribly unlikely. 350 00:18:13,760 --> 00:18:17,600 Speaker 1: They're just so highly valued that people are gonna lose 351 00:18:17,760 --> 00:18:21,560 Speaker 1: money on these what are the one are the biggest 352 00:18:21,560 --> 00:18:26,600 Speaker 1: defenders here vincent um. So yeah, that that that is correct. 353 00:18:26,880 --> 00:18:31,240 Speaker 1: Uh The uh the way the stocks on priced today 354 00:18:31,600 --> 00:18:34,439 Speaker 1: is that some of these stocks on precedent, even if 355 00:18:34,480 --> 00:18:37,800 Speaker 1: we're projected the same growth stats as the Magat stocks, 356 00:18:38,200 --> 00:18:42,040 Speaker 1: they would still lose money because they discount the future 357 00:18:42,200 --> 00:18:45,080 Speaker 1: and even some more. Uh So most of that is 358 00:18:45,119 --> 00:18:49,359 Speaker 1: in the healthcare sector specifically, is a biotech um and 359 00:18:49,400 --> 00:18:54,200 Speaker 1: I can understand to some extent the approach. I mean, 360 00:18:54,200 --> 00:18:57,560 Speaker 1: this is the nature of biotech investing. Uh is you know, 361 00:18:57,640 --> 00:19:00,879 Speaker 1: you just throw money at ideas and you know, you 362 00:19:00,960 --> 00:19:03,960 Speaker 1: know that ninety are are going to you know, not 363 00:19:04,280 --> 00:19:06,600 Speaker 1: not pan out, and you don't know which one is 364 00:19:06,640 --> 00:19:08,080 Speaker 1: going to be the one that you know had the 365 00:19:08,200 --> 00:19:12,520 Speaker 1: one x return. So that's that's just the investing model. 366 00:19:13,359 --> 00:19:15,320 Speaker 1: The problem is wants to get to such a level 367 00:19:15,359 --> 00:19:18,639 Speaker 1: of high valuations even finding that can lose is you know, 368 00:19:19,280 --> 00:19:22,960 Speaker 1: world changing stock returning to the next Amazon would not 369 00:19:23,040 --> 00:19:26,119 Speaker 1: be enough to save the rest of their portfolios. You know, 370 00:19:26,160 --> 00:19:29,399 Speaker 1: one of the interesting things um about Amazon to me, 371 00:19:29,440 --> 00:19:31,680 Speaker 1: at least i'm watching it. You know since the beginning 372 00:19:32,320 --> 00:19:35,639 Speaker 1: is the markets willingness to give Jeff Bezos and his 373 00:19:35,720 --> 00:19:40,320 Speaker 1: management team carte blanche to take every potential penny of 374 00:19:40,440 --> 00:19:43,119 Speaker 1: profit and reinvested in the business. So there were you know, 375 00:19:43,440 --> 00:19:46,360 Speaker 1: many many many years when the stock was working extraordinarily 376 00:19:46,359 --> 00:19:50,080 Speaker 1: well that there was no profits and the evaluation calls 377 00:19:50,160 --> 00:19:53,159 Speaker 1: is crazy. Now with with you know, the cloud and 378 00:19:53,200 --> 00:19:55,440 Speaker 1: with their advertising business actually have some profits on the 379 00:19:55,480 --> 00:19:59,800 Speaker 1: bottom line, But how do you explain that? Right? Right? 380 00:19:59,840 --> 00:20:01,560 Speaker 1: I I think it is so much did you think 381 00:20:01,560 --> 00:20:03,840 Speaker 1: the Amazon by the way, first of all, I mean 382 00:20:03,880 --> 00:20:06,320 Speaker 1: the profits weren't there, but the free gastrow generation was 383 00:20:06,359 --> 00:20:08,600 Speaker 1: pretty good. I mean you could see that. You know, um, 384 00:20:08,880 --> 00:20:11,679 Speaker 1: the reason you know that the firm was growing very fast, 385 00:20:11,880 --> 00:20:13,600 Speaker 1: and then that's why you know, everything had to be 386 00:20:13,680 --> 00:20:16,080 Speaker 1: brought back into the business. But the underlying of the 387 00:20:16,119 --> 00:20:19,480 Speaker 1: business was was actually pretty good. Also, I was point 388 00:20:19,560 --> 00:20:22,119 Speaker 1: that you know, this is suel Amazon. This is not 389 00:20:22,240 --> 00:20:24,479 Speaker 1: true of the other magat stocks. I mean, you know, 390 00:20:24,680 --> 00:20:28,879 Speaker 1: they were profitable failurely on. Yeah, that's that's that's a 391 00:20:28,920 --> 00:20:34,120 Speaker 1: big difference between the maga, the old and the one 392 00:20:34,160 --> 00:20:37,439 Speaker 1: of the maga. And I'm talking about where if you 393 00:20:37,480 --> 00:20:40,240 Speaker 1: look at the hyper growth stocks, uh, the stuff of 394 00:20:40,280 --> 00:20:42,879 Speaker 1: the stoff that traded for more than ten times sale 395 00:20:42,920 --> 00:20:47,600 Speaker 1: in the US, it really hasn't been any earnings uh 396 00:20:47,760 --> 00:20:51,520 Speaker 1: for in aggregate at least uh for the last five years. 397 00:20:51,520 --> 00:20:55,240 Speaker 1: If anything, I did a sunny experiment and I saw 398 00:20:55,280 --> 00:20:57,640 Speaker 1: that they spent more about the same in stock based 399 00:20:57,640 --> 00:21:00,840 Speaker 1: confrontation as they had earned over the last starve years. 400 00:21:00,840 --> 00:21:06,000 Speaker 1: So um, again, it could be that they aren't want amazons. 401 00:21:06,040 --> 00:21:09,920 Speaker 1: I tend to think that Amazon really was an explored miracle. 402 00:21:10,080 --> 00:21:13,480 Speaker 1: You had the management that was you know, visionary, You 403 00:21:13,520 --> 00:21:17,200 Speaker 1: have fantastic execution, You had a you know the c P, 404 00:21:17,359 --> 00:21:21,359 Speaker 1: a company that built the monopoly orger online trade. I mean, 405 00:21:21,400 --> 00:21:23,920 Speaker 1: these things are not likely to we happen to happen 406 00:21:23,960 --> 00:21:28,240 Speaker 1: against times in the mixtacade. Monopolies are so great when 407 00:21:28,280 --> 00:21:32,400 Speaker 1: you want to make money, right. Um. Without getting further 408 00:21:32,440 --> 00:21:36,080 Speaker 1: into that assessment of Amazon, because it's dangerous obviously for 409 00:21:36,080 --> 00:21:38,280 Speaker 1: for shareholders, what what what are some of the did 410 00:21:38,280 --> 00:21:42,920 Speaker 1: you come across any of these moonshot stocks that aren't 411 00:21:43,000 --> 00:21:46,359 Speaker 1: insanely over value. Do you see anything out there, Vincent 412 00:21:46,600 --> 00:21:51,000 Speaker 1: that UM looks like it could pay off but isn't 413 00:21:51,080 --> 00:21:57,440 Speaker 1: trading at ten x earnings ten x. I don't have 414 00:21:57,600 --> 00:22:02,480 Speaker 1: the you know, expert, especially something like like biotech. Uh. 415 00:22:02,720 --> 00:22:06,720 Speaker 1: I'm sure they will be. Uh they you know that 416 00:22:06,800 --> 00:22:09,840 Speaker 1: there will be some of these. I mean, I'm sorely 417 00:22:09,840 --> 00:22:13,280 Speaker 1: bullish on on the future of healthcare and biotech, and 418 00:22:13,480 --> 00:22:15,400 Speaker 1: I do think that this is where we are going 419 00:22:15,480 --> 00:22:19,400 Speaker 1: to see the next Amazon. The thing is, I'm I'm 420 00:22:19,440 --> 00:22:23,000 Speaker 1: not smart enough to know which one it will be. 421 00:22:24,320 --> 00:22:27,320 Speaker 1: One thing though, that I would I would point is 422 00:22:27,359 --> 00:22:33,199 Speaker 1: that UM the buying the sector as a whole in 423 00:22:33,240 --> 00:22:35,520 Speaker 1: the hope or like, well, you know, I don't know 424 00:22:35,560 --> 00:22:38,240 Speaker 1: what I'm getting some I'm just gonna buy a diversifyeddts 425 00:22:38,280 --> 00:22:39,879 Speaker 1: and then I'm gonna try to hold as many as 426 00:22:39,880 --> 00:22:42,840 Speaker 1: possible and then you know how, we'll get it. By default, 427 00:22:43,480 --> 00:22:50,000 Speaker 1: it's probably not going to work. Um, I rant I'll 428 00:22:50,080 --> 00:22:55,480 Speaker 1: let you your words. Not buying. Uh. The question mark 429 00:22:55,520 --> 00:22:58,879 Speaker 1: at the end of that, yes, well, if if we 430 00:22:58,920 --> 00:23:01,360 Speaker 1: apport to see if it's the stem portray E complreaty 431 00:23:01,400 --> 00:23:04,639 Speaker 1: Mons two thousand issue at Bob basically all the hypergole 432 00:23:04,720 --> 00:23:08,359 Speaker 1: stocks in marshrew thousand, thinking okay, one of them is 433 00:23:08,400 --> 00:23:11,199 Speaker 1: going to turn out. You would have been correct, like 434 00:23:11,280 --> 00:23:14,399 Speaker 1: you would have bought indeed Amazon and Dad, which you 435 00:23:14,400 --> 00:23:17,679 Speaker 1: know have been a hundred dollars. But the problem is 436 00:23:17,720 --> 00:23:19,960 Speaker 1: the stocks that mean a tiny fraction of your board 437 00:23:20,000 --> 00:23:24,359 Speaker 1: for you at the time, um, Yahoo was four times 438 00:23:24,440 --> 00:23:27,800 Speaker 1: larger than than Amazon. And what happens and then you 439 00:23:31,000 --> 00:23:33,280 Speaker 1: all right, Vincent, thank you so much for joining us. 440 00:23:33,280 --> 00:23:37,440 Speaker 1: Really fascinating report. Vincent Ward at Global macro Strategist at 441 00:23:37,560 --> 00:23:41,080 Speaker 1: stone X with some really thought provoking work. Thanks for 442 00:23:41,080 --> 00:23:44,560 Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and 443 00:23:44,640 --> 00:23:48,720 Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform 444 00:23:48,760 --> 00:23:52,080 Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt 445 00:23:52,119 --> 00:23:55,119 Speaker 1: Miller nine seventy three. Get on Ball Sweeney I'm on 446 00:23:55,160 --> 00:23:58,080 Speaker 1: Twitter at kt Sweeney. Before the podcast, you can always 447 00:23:58,119 --> 00:23:59,920 Speaker 1: catch us worldwide at Bloomberg Radio.