WEBVTT - ISM Manufacturing & the Burning Hot Economy 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Millah. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:20.800 at Bloomberg dot com slash podcast. Now, I want to 0:00:20.800 --> 0:00:24.799 bring in Timothy fiora chairman of the Manufacturing Business Survey 0:00:24.920 --> 0:00:27.880 from the Institute for Supply Management. We saw a beat 0:00:27.960 --> 0:00:33.400 tim today and um again over the previous figure. What 0:00:33.479 --> 0:00:36.320 does this tell us about, you know, the reopening of 0:00:36.400 --> 0:00:40.400 the US economy. Good morning, Pol, morning Matt. So this 0:00:40.479 --> 0:00:42.720 is the fourth month over sixty man, We're we are 0:00:42.760 --> 0:00:46.040 burning hot. So this is the second highest pm I 0:00:46.120 --> 0:00:48.680 number that we've seen since May of o for and 0:00:48.840 --> 0:00:50.720 this number is better than any number that we saw 0:00:50.800 --> 0:00:54.720 in the nine run up that was probably one of 0:00:54.720 --> 0:00:57.040 the highest quality manufacturing run ups that we've had in 0:00:57.040 --> 0:01:00.280 the last twenty year. So things are really off in 0:01:00.520 --> 0:01:02.800 very well, except we've got issues on the labor side. 0:01:02.800 --> 0:01:06.120 I mean, this number would have been stronger if if 0:01:06.120 --> 0:01:08.959 the employment number at our panelists companies would have been 0:01:09.000 --> 0:01:11.960 allowed to grow. And you know, clearly with the supply 0:01:12.080 --> 0:01:14.560 delivery number being as highed as they're struggling with still 0:01:14.600 --> 0:01:17.640 attracting people back to the workforce. So it's all the 0:01:17.680 --> 0:01:20.399 whole issue now is people coming back to the workforce 0:01:20.680 --> 0:01:22.880 because there's plenty of demand there and plenty of backblog 0:01:22.920 --> 0:01:25.320 to work on. Talk to us about this supply chain. 0:01:25.360 --> 0:01:27.680 We know we keep hearing stories about how a lot 0:01:27.720 --> 0:01:31.360 of these manufacturers are finding trouble or having trouble finding 0:01:31.640 --> 0:01:34.400 the raw materials and on a timely basis, how's that 0:01:34.480 --> 0:01:37.240 impacting the numbers that you look at tim Well, we 0:01:37.280 --> 0:01:39.320 have a record lead time, so we've never had lead 0:01:39.319 --> 0:01:42.720 times extended out this long ever. UH had many panelists 0:01:42.760 --> 0:01:46.520 comment about they've never been years in the businesses, They've 0:01:46.520 --> 0:01:50.320 never seen a combination of shortages, lead time extensions and 0:01:50.400 --> 0:01:53.280 price increases like they've seen over the last six or 0:01:53.320 --> 0:01:55.720 nine months. So you know, if you peel the whole 0:01:55.720 --> 0:01:58.400 thing back, it's the supply community is having trouble getting 0:01:58.400 --> 0:02:02.800 people to response to work request to we we had 0:02:03.640 --> 0:02:07.040 my employment comments were companies trying to hire and of 0:02:07.160 --> 0:02:10.000 that said that they are having difficulty and hiring that's 0:02:10.000 --> 0:02:13.080 a really dramatic number. On the sentiment side, we had 0:02:13.120 --> 0:02:16.080 thirty six for every one person who was really positive 0:02:16.120 --> 0:02:18.680 about the future. That's I've never seen a number that high. 0:02:19.040 --> 0:02:21.680 And from an employment standpoint, we have twelve people trying 0:02:21.720 --> 0:02:25.120 to hire with one person trying to a trip or 0:02:25.240 --> 0:02:29.600 freeze or hiring manpower style, so all really positive numbers here. 0:02:30.120 --> 0:02:33.160 The horizon looks very strong. This number would have been 0:02:33.240 --> 0:02:36.560 quite a bit higher if if our panelist companies could 0:02:36.560 --> 0:02:38.600 have hired more. You know, at the fifty point four 0:02:39.240 --> 0:02:41.720 fifty point nine number on the employment compared to all 0:02:41.720 --> 0:02:44.840 the others that we're getting closest to a sixty and 0:02:44.880 --> 0:02:49.160 sixty five. That was the whole story. Inventories, the shelves 0:02:49.200 --> 0:02:53.519 are empty. Tim or is the hiring problem because they're 0:02:53.560 --> 0:02:57.200 not paying enough. I mean, um, you know, I'll do 0:02:57.320 --> 0:03:01.160 probably anything for you if you double my salary. But 0:03:01.160 --> 0:03:03.280 but obviously there are some things that I can't do 0:03:03.320 --> 0:03:05.519 because I don't know how to. Is it a skill 0:03:05.680 --> 0:03:11.239 issue or is it a wage issue? Well, it's competition. 0:03:11.360 --> 0:03:14.359 So everybody has been paying more. They've been paying bonuses, 0:03:14.520 --> 0:03:18.639 they've been paying hazard pay, signing bonuses, referrals and they've 0:03:18.680 --> 0:03:21.600 been increasing wages to to attract more people. At some 0:03:21.680 --> 0:03:24.720 point you kind of cap out because this kind of 0:03:24.840 --> 0:03:28.000 imbalance in the labor market doesn't last forever for the 0:03:28.000 --> 0:03:31.040 wage increased us. So people are kind of saying, Okay, 0:03:31.080 --> 0:03:32.520 I've done as far as I can go. I'm not 0:03:32.520 --> 0:03:33.960 going to pay through the dollars an hour for a 0:03:33.960 --> 0:03:35.840 twenty dollar an hour job because I'm stuck with it. 0:03:36.160 --> 0:03:37.880 I'd have to lay everybody off at the end of 0:03:37.880 --> 0:03:40.000 this thing to get back down to the right cost structure. 0:03:40.400 --> 0:03:43.440 So we're kind of frozen and you get the combination now. Though. 0:03:43.440 --> 0:03:45.280 The good thing is you get the summertime coming, so 0:03:45.360 --> 0:03:47.360 people know how to deal with their children in the summertime. 0:03:47.680 --> 0:03:49.760 The school issue is no longer an issue, so that's 0:03:49.760 --> 0:03:52.480 off the table. There's twenty states that have that have 0:03:52.560 --> 0:03:56.560 decided to suspend federal support on the unemployment side and 0:03:56.560 --> 0:03:59.040 the special unemployment. I think that's a really good thing. 0:03:59.040 --> 0:04:00.760 There's a lot of states are trying to get people 0:04:00.760 --> 0:04:03.680 back to work and paying them. That sets up a conflict. 0:04:04.480 --> 0:04:06.440 Uh So, I think this thing is going to run 0:04:06.480 --> 0:04:08.720 with us though until the end of September, because we 0:04:08.800 --> 0:04:11.920 got thirty states that aren't withdrawing the federal support. So 0:04:12.480 --> 0:04:15.160 number one, you get the employment issue for the schooling 0:04:15.160 --> 0:04:17.200 issue going away. We're in the summertime. People know how 0:04:17.200 --> 0:04:19.240 to take care of the kids in the summertime. It's 0:04:19.240 --> 0:04:20.760 no longer do when they go to class or not. 0:04:20.880 --> 0:04:23.279 And then the second thing here is that we're withdrawing 0:04:23.320 --> 0:04:25.720 that financial incentive for people to kind of debate about 0:04:25.720 --> 0:04:27.840 whether they should stay home or not. But there are 0:04:27.839 --> 0:04:30.480 still thirty states that are not doing that. So by 0:04:30.520 --> 0:04:32.800 the time we get to September October, this whole thing 0:04:32.800 --> 0:04:35.359 should kind of clear up. In the meantime, there's plenty 0:04:35.360 --> 0:04:38.440 of work out there. There's plenty of business. We just 0:04:38.480 --> 0:04:40.920 need the people to come in to do it, all right, 0:04:40.960 --> 0:04:43.080 and thanks so much for joining us. Just some historic 0:04:43.160 --> 0:04:45.000 numbers coming out on the other side of this. Again, 0:04:45.000 --> 0:04:46.920 there were historic going into it as we think about 0:04:46.960 --> 0:04:48.640 a year ago, and we're starting to see the flip 0:04:48.680 --> 0:04:52.240 side of that here, certainly from the manufacturing site extraordinary numbers, 0:04:52.240 --> 0:04:56.279 Tim Fury, chairman, the Manufacturing Business Survey for the Institute 0:04:56.320 --> 0:04:59.800 for Supply Management, and the numbers matter just you know, 0:05:00.000 --> 0:05:02.599 straordinary and the labors a key issues as we heard 0:05:02.600 --> 0:05:08.080 from Tim well, certainly as we begin to emerge from 0:05:08.080 --> 0:05:11.640 this pandemic and the economic carnage caused by it. You 0:05:11.720 --> 0:05:14.720 just need to walk down Main Street USA around this 0:05:14.760 --> 0:05:18.279 country and you see so many vacant storefronts here and 0:05:18.279 --> 0:05:22.120 it becomes so apparent how small businesses were really impacted 0:05:22.120 --> 0:05:26.440 by this economic disruption and questions how will they recover 0:05:26.560 --> 0:05:29.160 on the other side of a. J. Demarto, he's had 0:05:29.160 --> 0:05:32.279 of commercial distribution at TD Bank. They have a small 0:05:32.320 --> 0:05:35.840 business survey and lots of cool information. Jay, thanks so 0:05:35.920 --> 0:05:38.599 much for joining us here. Again, it seems like small 0:05:38.600 --> 0:05:42.920 businesses really bore the brunt of the economic disruption caused 0:05:42.960 --> 0:05:45.960 by the pandemic. How do they expect to recover here 0:05:46.000 --> 0:05:49.279 as we emerge on the other side, Well, you know, 0:05:49.360 --> 0:05:53.680 we we survey companies every year and um this year 0:05:53.720 --> 0:05:56.840 we surveyed seminar and fifty and it's always important to 0:05:56.880 --> 0:05:59.599 remember how small some of these companies really are. There's 0:05:59.640 --> 0:06:04.600 thirty and small businesses in the US, and of them 0:06:04.600 --> 0:06:07.479 are sold props, so they're working for themselves by themselves 0:06:07.880 --> 0:06:10.440 and small business That thirty million is the largest segment 0:06:10.480 --> 0:06:13.960 of businesses in the US and of all businesses, so 0:06:14.600 --> 0:06:17.080 it tells you just out of the gate. Very many 0:06:17.200 --> 0:06:21.200 businesses are just you know, one person working for themselves, 0:06:20.360 --> 0:06:23.480 and of them have revenue less than a hundred thousand dollars, 0:06:23.480 --> 0:06:25.800 so they're not they're not big. They don't have a 0:06:25.839 --> 0:06:28.480 lot of capital, and uh, you know, to get through 0:06:28.520 --> 0:06:31.480 a pandemic or whether a storm. We actually look at 0:06:31.480 --> 0:06:34.599 business closings and our survey results. They actually did pretty well, 0:06:34.720 --> 0:06:37.240 which shows some of the government programs had a good 0:06:37.240 --> 0:06:40.760 effect and they you know, tighten their belts and found 0:06:40.800 --> 0:06:44.599 other ways to accept payments and change their business lines 0:06:44.680 --> 0:06:49.400 and and uh, you know survive, which was huge. Do 0:06:49.440 --> 0:06:55.599 we need, um the fiscal support to keep coming? You know, 0:06:55.800 --> 0:06:59.279 it was it was highly effective. If you think about 0:06:59.320 --> 0:07:03.280 P P P and particular, I think there were ow 0:07:03.960 --> 0:07:07.920 um you know, eight million or so loans done by 0:07:07.920 --> 0:07:11.800 the government. We a TD bank, We did um a 0:07:11.880 --> 0:07:13.840 hundred and thirty three thousand of them ourselves. We were 0:07:13.960 --> 0:07:17.120 top ten bank participating in it. And I found that, 0:07:17.200 --> 0:07:20.640 you know, people who took those loans um really needed them. 0:07:20.920 --> 0:07:23.720 Um you know, about a third of all companies in 0:07:23.760 --> 0:07:27.240 the US took a loan, which is pretty incredible. So uh, 0:07:27.280 --> 0:07:29.720 you know, sixty of the people we surveyed said they 0:07:29.760 --> 0:07:33.160 were effective, and they also said they could be more 0:07:33.200 --> 0:07:36.840 effective by you know, getting more money. Um. The original 0:07:36.880 --> 0:07:39.280 loan amount was two and a half times one month 0:07:39.320 --> 0:07:43.360 of payroll expenses, so that anticipated the pandemic would probably 0:07:43.440 --> 0:07:46.160 last this summer. Last year, we all know when quite 0:07:46.200 --> 0:07:48.520 a bit longer. So that's you know, hence the program 0:07:48.560 --> 0:07:50.520 that came out this year kind of doubled down and 0:07:50.520 --> 0:07:53.040 helped people out this year as well. So I do 0:07:53.080 --> 0:07:55.840 think overall they were effective. You know, small business closings 0:07:55.840 --> 0:07:59.880 we're seeing in our customer base and also just nationally 0:08:00.280 --> 0:08:03.240 UM really haven't gone up. I know you mentioned retail 0:08:03.280 --> 0:08:05.520 at the beginning of the segment. That was a hard 0:08:05.560 --> 0:08:09.320 hit segment clearly, as well as you know, hospitality, restaurants 0:08:09.320 --> 0:08:13.400 and the like. But you know, construction, accounting, UM, a 0:08:13.440 --> 0:08:16.200 lot of those other industries that they did well, they thrived, 0:08:16.680 --> 0:08:20.680 So Jay, you know, again, as you walk down Main Street, USA, UM, 0:08:20.720 --> 0:08:23.720 you see some abandoned storefronts for businesses that went out 0:08:23.760 --> 0:08:27.240 of business. But the businesses that survived you see in 0:08:27.320 --> 0:08:30.920 their windows. Help want it talk to us about some 0:08:30.960 --> 0:08:33.680 of these small businesses. Are they able to hire the 0:08:33.679 --> 0:08:36.959 people they need to either reopen or or maybe grow. 0:08:38.160 --> 0:08:41.360 You know, that has been a problem. UM. In our survey, 0:08:42.440 --> 0:08:46.720 all the businesses business owners are fairly optimistic. Uh, you know, 0:08:46.760 --> 0:08:51.160 for six percent said they're either going to grow revenue 0:08:51.240 --> 0:08:53.160 or stay the same. The way they're going to grow 0:08:53.679 --> 0:08:58.080 is by expanding hours or expanding products and services. Sing 0:08:58.080 --> 0:09:01.480 gonna expand hours. Over five percent say they want to 0:09:01.520 --> 0:09:05.920 expand products and services. That type of UM. You know, 0:09:05.960 --> 0:09:11.280 growth requires hiring that you mentioned, and you know, trying 0:09:11.280 --> 0:09:13.600 to find employees now. And I'm hearing from all of 0:09:13.600 --> 0:09:18.040 our customers that it's a very tight labor market. So 0:09:18.120 --> 0:09:21.040 I wonder what you think of the possibility of inflation 0:09:21.120 --> 0:09:26.040 then being less than transient. Yeah, there's a lot of 0:09:26.040 --> 0:09:28.400 money in the system, you know, I mentioned p PP. 0:09:28.720 --> 0:09:33.640 We've seen a lot of was nut so right, I 0:09:33.679 --> 0:09:37.360 mean last week and and so there's more of it 0:09:37.360 --> 0:09:40.040 there too. You're right, UM, all kinding capital coming in, 0:09:40.120 --> 0:09:43.120 and we're seeing in our deposit accounts of our small 0:09:43.120 --> 0:09:46.280 business customers and just business customers they're pretty inflated. So 0:09:46.679 --> 0:09:48.800 they should be in a good capital position, and a 0:09:48.840 --> 0:09:51.360 lot of them have applied for lines of credit or 0:09:51.760 --> 0:09:56.160 kind of backstop type of facilities. So yes, I think 0:09:56.200 --> 0:09:58.280 inflation and you see that much money in the system, 0:09:58.600 --> 0:10:01.000 and you know, labor rates are gonna have to go 0:10:01.080 --> 0:10:03.160 up to attract labor. And I know you guys have 0:10:03.240 --> 0:10:05.719 heard the statistics on things like you know, two by 0:10:05.720 --> 0:10:11.720 fours and construction materials all highly inflated right now. All right, Jay, 0:10:11.720 --> 0:10:14.240 thanks so much for joining us. We really appreciate you 0:10:14.360 --> 0:10:17.240 coming on sharing some of the findings from the TD 0:10:17.320 --> 0:10:21.880 banks small business survey. Generally an optimistic crew, um, you know, 0:10:21.880 --> 0:10:24.800 the small business folks. J Demarto, he's had of commercial 0:10:24.840 --> 0:10:27.560 distribution for TD Bank. When you think about small business owners, 0:10:27.720 --> 0:10:31.320 I think, by nature, um, you know, they're pretty optimistic crew, 0:10:31.320 --> 0:10:34.480 because they're putting a lot of capital risk of putting 0:10:34.480 --> 0:10:37.439 their welfare at risk. But we're starting to see more 0:10:37.440 --> 0:10:39.439 and more of these stores reopening and that's good to 0:10:39.480 --> 0:10:45.640 see across UH Middle America. Here on Main Street, Melding 0:10:45.640 --> 0:10:49.840 and David Steamer, he is the CEO at Wave. Financial 0:10:49.920 --> 0:10:53.120 Wave was set up to bridge the divide between the 0:10:53.160 --> 0:10:59.080 traditional investment management business and crypto assets and they've gotten now, 0:10:59.440 --> 0:11:03.160 um what, five hundred million dollars in assets under management. David, 0:11:03.160 --> 0:11:06.280 I'm wondering who you're clients are. What's your client base 0:11:06.360 --> 0:11:10.440 look like? Yeah, all right, thanks for having me first. Um, yeah, 0:11:10.440 --> 0:11:12.160 it's a mix. We have a lot of high net worths, 0:11:12.840 --> 0:11:16.320 probably how about half our clients where we call crypto natives, 0:11:16.360 --> 0:11:18.160 so they're most our networth of crypto. We do a 0:11:18.160 --> 0:11:20.640 lot of yield strategies for them, and I mean less 0:11:20.720 --> 0:11:23.880 kind of crypto native or less cryptognoledgeable. It's more access strategies, 0:11:23.880 --> 0:11:26.200 you know, get them, you know, bitcoin or other tokens, 0:11:26.520 --> 0:11:30.440 and then eventually putting yield strategies around us. David talked 0:11:30.440 --> 0:11:33.360 to us about the volatility we've seen in crypto really 0:11:33.400 --> 0:11:35.880 over the last month or so. I think that's kind 0:11:35.880 --> 0:11:37.920 of for a lot of critics. It's given them some 0:11:37.960 --> 0:11:40.880 ammunition saying, you look at bitcoin and some of the others, 0:11:41.440 --> 0:11:44.360 the volatility there just takes away some of the legitimacy 0:11:44.440 --> 0:11:48.160 or calls into question some of the legitimacy as cryptos 0:11:48.200 --> 0:11:52.760 as an asset class. What are your views, Yeah, I 0:11:52.800 --> 0:11:55.719 mean what happened in the last month is and this 0:11:55.880 --> 0:11:57.760 is what's kind of been a cycle we've seen the 0:11:57.840 --> 0:11:59.959 last eight years. Is you know, a lot of crypto 0:12:00.000 --> 0:12:03.160 originally was held in China. A lot of it's I've 0:12:03.200 --> 0:12:05.120 been kind of flowing out of China recently, which is 0:12:05.160 --> 0:12:06.600 what you know, it's kind of been rushing onto pushing 0:12:06.600 --> 0:12:09.480 the prices down. And every year, right around this time 0:12:09.520 --> 0:12:11.440 of year, China makes a bunch of announcements, some of 0:12:11.440 --> 0:12:13.680 which they follow through on somewhere they don't, which really 0:12:13.720 --> 0:12:17.160 affect the price. UM. As far as legitimacy of crypto, 0:12:17.280 --> 0:12:18.959 you know, it's a little bit of different question. Yes, 0:12:18.960 --> 0:12:22.120 the volatility is scary when it's downside volatility. Obviously, when 0:12:22.160 --> 0:12:25.120 it's upside volatility, it's not that scart um, But it's 0:12:25.120 --> 0:12:26.880 this kind of nature of the asset. You know, it 0:12:27.000 --> 0:12:29.040 is part of why Wave focus is pretty heavily on 0:12:29.120 --> 0:12:31.400 yield strategies, Like we do a lot of derivative strategies 0:12:31.400 --> 0:12:34.240 for our clients UM to put you know, the futility 0:12:34.320 --> 0:12:36.360 is not neither good nor bad it by itself. You know, 0:12:36.360 --> 0:12:38.720 if you can leverage of alatility into certain ways, that's 0:12:38.720 --> 0:12:41.440 it's pretty powerful. Um. But yeah, it does spook a 0:12:41.440 --> 0:12:43.400 lot of people. There was a lot of talking ets 0:12:43.480 --> 0:12:46.480 coming out in the next you know, in the US, uh, 0:12:46.520 --> 0:12:48.599 you know, approval by the sec and I think this 0:12:48.760 --> 0:12:51.440 little bout of alatility will probably have a negative impact 0:12:51.480 --> 0:12:53.920 on that will probably give them justification to continue to 0:12:54.080 --> 0:12:57.760 push that out. Nonetheless, we're talking about lines of code 0:12:57.800 --> 0:13:01.440 that over a decade have gone from being worth nothing 0:13:01.880 --> 0:13:05.520 to being worth forty tho bucks apiece. I mean, the 0:13:05.880 --> 0:13:10.200 growth is impressive. I'm wondering about your yield strategies. I've 0:13:10.240 --> 0:13:12.840 been hearing more and more about this. Joe Wisenhal's podcast 0:13:12.920 --> 0:13:19.000 interviewed a yield farmer the other day. What what is that? Yeah, 0:13:19.040 --> 0:13:20.880 I mean, so these are really unique assets. So a 0:13:20.880 --> 0:13:22.880 lot of the world still can only think of like 0:13:22.920 --> 0:13:25.680 bitcoin as kind of a digital stock certificates, and it's 0:13:25.679 --> 0:13:27.840 it's actually a lot more than that. And it's it's fractionable. 0:13:27.880 --> 0:13:31.199 It's one's fractionable in the hundreds of millions. You can 0:13:31.200 --> 0:13:33.560 wrap them in certain other assets and take them into 0:13:33.679 --> 0:13:37.720 like a centralized finance. Again, these are very dynamic assets. 0:13:37.720 --> 0:13:39.720 You know, most of the coins now we're staking coins, 0:13:39.760 --> 0:13:41.120 which is a you know, kind of different than the 0:13:41.160 --> 0:13:43.960 mining network. It's a way of registering your tokens to 0:13:43.960 --> 0:13:46.400 a network. But the fact that they yield nothing. David 0:13:46.720 --> 0:13:52.520 has been a criticism doesn't yield anything, you know, don't 0:13:52.559 --> 0:13:55.920 yield anything. People people always say that, just like they've 0:13:55.920 --> 0:13:58.480 always criticized gold for the same reason. Um, and I 0:13:58.520 --> 0:14:01.000 get it. But you talk about yeld strategy, So what 0:14:01.040 --> 0:14:04.680 are what are yield strategies? Yeah, So there's a huge 0:14:04.760 --> 0:14:07.120 lack of liquidity in crypto, meaning in the sense of 0:14:07.280 --> 0:14:09.400 there's a lot of need for dollars. So you have 0:14:09.520 --> 0:14:12.400 cash now it's the odd of any currency, and you're 0:14:12.400 --> 0:14:14.280 willing to lend it into crypto, which is going to 0:14:14.440 --> 0:14:17.320 people that are like financy, mining equipment or you know, 0:14:17.520 --> 0:14:20.440 market usual headphones things like that. There's a really high 0:14:20.520 --> 0:14:24.200 yield upwards of a year, which obviously is not sustainable 0:14:24.240 --> 0:14:26.720 long term, but it's a really nice yield UM. So 0:14:26.760 --> 0:14:28.840 you can lend cash into the markets. You can also 0:14:28.920 --> 0:14:31.120 lend the actual crypto assets. We do a lot of 0:14:31.440 --> 0:14:34.040 bitcoin lending for our clients. People want to borrow it 0:14:34.080 --> 0:14:37.040 to shortage or whatever. You know, you can get you know, 0:14:37.160 --> 0:14:39.040 you can rapid uneath and put in de fi. You 0:14:39.040 --> 0:14:41.040 can get up words of like six seven percent a year. 0:14:41.680 --> 0:14:43.600 It was just pretty material in this day and age. 0:14:43.600 --> 0:14:45.480 I mean every year you have six or seven percent 0:14:45.520 --> 0:14:49.640 more bitcoin um so so it's pretty powerful strategies and 0:14:49.640 --> 0:14:51.320 that's kind of where we Wave was built to take 0:14:51.320 --> 0:14:58.080 advantage of. Um, Yeah, David, what's the next notable event 0:14:58.160 --> 0:15:01.280 that you need to see just in broad crypto, maybe 0:15:01.320 --> 0:15:03.880 just make a little bit more mainstream. What's what's the 0:15:03.920 --> 0:15:07.680 defining thing that you need to see next? And most 0:15:07.680 --> 0:15:09.880 of it comes down to regulation, I mean, I think, 0:15:09.880 --> 0:15:11.520 which we're starting to see. There's been a lot of 0:15:11.560 --> 0:15:14.480 pronouncements recently, you know, for people that are die hard 0:15:14.560 --> 0:15:16.680 crypt of people like myself, like you don't really want 0:15:16.680 --> 0:15:19.520 to see the regulators way in. But for broad adoption, 0:15:19.520 --> 0:15:22.280 and it's it's very powerful, you know. So eventually we 0:15:22.320 --> 0:15:25.800 will see SEC approved you know, bitcoin ETF and things 0:15:25.800 --> 0:15:27.800 like that, which I think will add a lot of adoption, 0:15:27.920 --> 0:15:30.280 just moves a lot of the barriers, also provide that 0:15:30.840 --> 0:15:33.400 umbrella of legitimacy to a lot of other users that 0:15:33.920 --> 0:15:35.880 you know, haven't spent ten years in misassa class and 0:15:35.960 --> 0:15:39.160 got comfortable with it. So so they'll be I think 0:15:39.360 --> 0:15:41.240 I think the regulators will lead the way on some 0:15:41.320 --> 0:15:43.480 of these things. Now, I think it will take time. Right, 0:15:43.840 --> 0:15:47.840 we actually looked launching a bitcoin ets and have a 0:15:47.880 --> 0:15:50.200 lot of money on it and then stop spending money 0:15:50.240 --> 0:15:51.760 on it when it looked like it wasn't gonna happen 0:15:51.800 --> 0:15:53.840 for years, and we still don't know. I mean, everyone 0:15:53.960 --> 0:15:56.040 thought at bitcoin e ts in the US is like 0:15:56.120 --> 0:15:59.560 three to six months away for five years, all right, David, 0:15:59.560 --> 0:16:01.520 thanks so much for joining us. We really appreciate that, 0:16:01.560 --> 0:16:04.760 really fascinating stuff. David Seemur's the CEO of Wave Financial, 0:16:04.880 --> 0:16:07.680 really all over that crypto space. It's you know, you 0:16:07.720 --> 0:16:10.920 feel like it's just very very much in its infancy, 0:16:11.200 --> 0:16:12.840 although it's been around for a while, and Matt, you've 0:16:12.880 --> 0:16:14.840 certainly been talking about it for a long time, but 0:16:14.880 --> 0:16:16.920 it just feels like it's in its infancy and there's 0:16:16.960 --> 0:16:19.680 just a tremendous amount of growth ahead of it. And 0:16:19.720 --> 0:16:25.280 the question is to what extent will it be regulated? Matt, 0:16:25.320 --> 0:16:28.680 I'm sure you've owned, you know, forever, the big tech names, 0:16:28.680 --> 0:16:31.400 the Amazon's, the Google's of facebooks, and you've just been 0:16:31.480 --> 0:16:32.880 laughing all the way to the bank. But a lot 0:16:32.880 --> 0:16:36.720 of folks felt like they missed it and will there 0:16:36.720 --> 0:16:38.720 ever be an opportunity to get some of those hyper 0:16:38.720 --> 0:16:41.800 growth names again. While our next guest suggests maybe so, 0:16:41.920 --> 0:16:45.680 Vincent del Ward he's a global macro strategist for stone 0:16:46.000 --> 0:16:48.760 X and they just put out a report entitled Impossible 0:16:48.800 --> 0:16:53.760 Growth at an Unreasonable Price The sixty Next Amazons Vinca, 0:16:53.800 --> 0:16:56.320 thanks so much for joining us here. What's kind of 0:16:56.320 --> 0:17:00.120 the key takeaway from your most recent report about m 0:17:01.200 --> 0:17:05.879 sixty next Amazons? Well, thanks for having me, Um. The 0:17:05.960 --> 0:17:08.760 key takeaway is that you know, we have a lot 0:17:08.800 --> 0:17:12.880 of excitement about growth and a certain very large GTF 0:17:13.119 --> 0:17:17.160 bedding on a on a bright future, Um, and it's 0:17:18.520 --> 0:17:21.120 it's possible. I mean, we saw it with the big 0:17:21.160 --> 0:17:23.679 text on the Magastons, that we see the x flory 0:17:23.720 --> 0:17:27.920 growth that surprises everybody. The question is how many of 0:17:27.960 --> 0:17:30.800 these stocks can we expect to see? And what I 0:17:30.880 --> 0:17:34.520 did in this report is I projected the growth pass 0:17:34.520 --> 0:17:41.200 of the magathtock so Microsoft, Apple, Google, Um, Amazon, Yeah, 0:17:41.440 --> 0:17:46.000 and and discounted it to the present and founded the 0:17:46.080 --> 0:17:51.280 market is already pricing the scenario and more for sixty stocks. 0:17:51.320 --> 0:17:53.440 So either we were live in a bright future where 0:17:53.480 --> 0:17:55.960 we'll have trying cars and we live forever and we're 0:17:55.960 --> 0:17:59.719 longer have to work, or some of these names are 0:18:00.280 --> 0:18:03.440 obscene me and observed me over value. Yeah. So your 0:18:03.440 --> 0:18:07.000 point is not that these are sixty stocks that you 0:18:07.000 --> 0:18:08.919 can make a killing on the way you would have 0:18:09.000 --> 0:18:13.520 with Amazon twenty years ago, but that it's just terribly unlikely. 0:18:13.760 --> 0:18:17.600 They're just so highly valued that people are gonna lose 0:18:17.760 --> 0:18:21.560 money on these what are the one are the biggest 0:18:21.560 --> 0:18:26.600 defenders here vincent um. So yeah, that that that is correct. 0:18:26.880 --> 0:18:31.240 Uh The uh the way the stocks on priced today 0:18:31.600 --> 0:18:34.439 is that some of these stocks on precedent, even if 0:18:34.480 --> 0:18:37.800 we're projected the same growth stats as the Magat stocks, 0:18:38.200 --> 0:18:42.040 they would still lose money because they discount the future 0:18:42.200 --> 0:18:45.080 and even some more. Uh So most of that is 0:18:45.119 --> 0:18:49.359 in the healthcare sector specifically, is a biotech um and 0:18:49.400 --> 0:18:54.200 I can understand to some extent the approach. I mean, 0:18:54.200 --> 0:18:57.560 this is the nature of biotech investing. Uh is you know, 0:18:57.640 --> 0:19:00.879 you just throw money at ideas and you know, you 0:19:00.960 --> 0:19:03.960 know that ninety are are going to you know, not 0:19:04.280 --> 0:19:06.600 not pan out, and you don't know which one is 0:19:06.640 --> 0:19:08.080 going to be the one that you know had the 0:19:08.200 --> 0:19:12.520 one x return. So that's that's just the investing model. 0:19:13.359 --> 0:19:15.320 The problem is wants to get to such a level 0:19:15.359 --> 0:19:18.639 of high valuations even finding that can lose is you know, 0:19:19.280 --> 0:19:22.960 world changing stock returning to the next Amazon would not 0:19:23.040 --> 0:19:26.119 be enough to save the rest of their portfolios. You know, 0:19:26.160 --> 0:19:29.399 one of the interesting things um about Amazon to me, 0:19:29.440 --> 0:19:31.680 at least i'm watching it. You know since the beginning 0:19:32.320 --> 0:19:35.639 is the markets willingness to give Jeff Bezos and his 0:19:35.720 --> 0:19:40.320 management team carte blanche to take every potential penny of 0:19:40.440 --> 0:19:43.119 profit and reinvested in the business. So there were you know, 0:19:43.440 --> 0:19:46.360 many many many years when the stock was working extraordinarily 0:19:46.359 --> 0:19:50.080 well that there was no profits and the evaluation calls 0:19:50.160 --> 0:19:53.159 is crazy. Now with with you know, the cloud and 0:19:53.200 --> 0:19:55.440 with their advertising business actually have some profits on the 0:19:55.480 --> 0:19:59.800 bottom line, But how do you explain that? Right? Right? 0:19:59.840 --> 0:20:01.560 I I think it is so much did you think 0:20:01.560 --> 0:20:03.840 the Amazon by the way, first of all, I mean 0:20:03.880 --> 0:20:06.320 the profits weren't there, but the free gastrow generation was 0:20:06.359 --> 0:20:08.600 pretty good. I mean you could see that. You know, um, 0:20:08.880 --> 0:20:11.679 the reason you know that the firm was growing very fast, 0:20:11.880 --> 0:20:13.600 and then that's why you know, everything had to be 0:20:13.680 --> 0:20:16.080 brought back into the business. But the underlying of the 0:20:16.119 --> 0:20:19.480 business was was actually pretty good. Also, I was point 0:20:19.560 --> 0:20:22.119 that you know, this is suel Amazon. This is not 0:20:22.240 --> 0:20:24.479 true of the other magat stocks. I mean, you know, 0:20:24.680 --> 0:20:28.879 they were profitable failurely on. Yeah, that's that's that's a 0:20:28.920 --> 0:20:34.120 big difference between the maga, the old and the one 0:20:34.160 --> 0:20:37.439 of the maga. And I'm talking about where if you 0:20:37.480 --> 0:20:40.240 look at the hyper growth stocks, uh, the stuff of 0:20:40.280 --> 0:20:42.879 the stoff that traded for more than ten times sale 0:20:42.920 --> 0:20:47.600 in the US, it really hasn't been any earnings uh 0:20:47.760 --> 0:20:51.520 for in aggregate at least uh for the last five years. 0:20:51.520 --> 0:20:55.240 If anything, I did a sunny experiment and I saw 0:20:55.280 --> 0:20:57.640 that they spent more about the same in stock based 0:20:57.640 --> 0:21:00.840 confrontation as they had earned over the last starve years. 0:21:00.840 --> 0:21:06.000 So um, again, it could be that they aren't want amazons. 0:21:06.040 --> 0:21:09.920