WEBVTT - Ford's EV Credit, Bitcoin, Powell, and Equinix (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.720 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:17.360 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.160 --> 0:00:23.360 Let's bring in Data Peterson. She's a chief economist this 0:00:23.440 --> 0:00:25.920 conference board. Dana, thanks so much for joining us here. 0:00:25.960 --> 0:00:28.400 Talk to us about the Leading Economic Index. What it, 0:00:28.720 --> 0:00:31.040 what you guys reported today, what it tells you, and 0:00:31.040 --> 0:00:32.159 what should we take away from all this? 0:00:33.280 --> 0:00:37.040 Absolutely so, the Leading Economic indicator fell again for I 0:00:37.040 --> 0:00:42.160 think the fourteenth consecutive months, and the weakness was definitely 0:00:42.240 --> 0:00:46.360 in expectations from the ism in terms of manufacturing and 0:00:46.400 --> 0:00:50.120 also from consumers. And then the yield curve continued to 0:00:50.159 --> 0:00:55.120 be negative, and also the leading credit indicator was negative. 0:00:55.480 --> 0:00:58.600 So that's all telling us that there's still some weakness 0:00:58.600 --> 0:01:01.480 out there. There's still expectations that maybe we'll go into 0:01:01.520 --> 0:01:06.080 a recession. Certainly it's pointing to recession starting probably about now. 0:01:06.160 --> 0:01:09.080 I know we keep forecasting it, but the key thing 0:01:09.200 --> 0:01:11.800 is that there's been strength in the labor market that's 0:01:12.000 --> 0:01:14.600 definitely forestalling what we think is the inevitable. 0:01:15.319 --> 0:01:18.560 It's interesting because even though it's a leading economic index, 0:01:18.600 --> 0:01:21.200 a lot of investors look at it more as lagging, 0:01:21.400 --> 0:01:23.640 just because of when you're looking at the economy, and 0:01:23.680 --> 0:01:26.200 since investors are looking you know, six months twelve months out, 0:01:26.240 --> 0:01:29.319 do you think that's why we're seeing the stock market 0:01:29.360 --> 0:01:31.959 more supported. Do you think investors think the worst of 0:01:31.959 --> 0:01:33.319 the pain is already passed? 0:01:34.680 --> 0:01:38.120 Well, I think investors are looking at data like labor markets, 0:01:38.160 --> 0:01:40.600 and indeed, in the leading economic indicator and even in 0:01:40.640 --> 0:01:45.560 our current economic indicator, the labor market data are holding up. Why. 0:01:45.720 --> 0:01:49.000 It's because of labor shortages and so many businesses instead 0:01:49.000 --> 0:01:52.200 of letting people go, they're holding on to their workers. 0:01:52.240 --> 0:01:54.920 And then you also still have a number of sectors 0:01:54.960 --> 0:01:57.040 that are still trying to catch up from losses during 0:01:57.040 --> 0:02:00.600 the pandemic, especially services that are in high demand. And 0:02:00.640 --> 0:02:03.400 so if you're looking at that, you know, I understand 0:02:03.400 --> 0:02:05.800 why investors might look at our measure and say, well, 0:02:05.880 --> 0:02:07.880 what's going on here? Right? 0:02:08.240 --> 0:02:10.560 So talk to us about the housing market data that 0:02:10.639 --> 0:02:12.720 continues to kind of befuddel me in the midst of 0:02:12.800 --> 0:02:16.000 rising interest rates, still strong. How do you think about 0:02:16.120 --> 0:02:17.200 the housing market right here? 0:02:18.240 --> 0:02:20.960 Well, I think you're coming off of very low levels. 0:02:21.160 --> 0:02:23.360 When you look at most of the housing market data, 0:02:23.840 --> 0:02:27.280 it really slowed dramatically last year, so and it seems 0:02:27.320 --> 0:02:29.919 like we kind of reached the bottom. So you're still 0:02:29.960 --> 0:02:31.600 you're in a hole and you're just trying to climb 0:02:31.639 --> 0:02:34.360 out of that hole. And so the thing is that 0:02:34.400 --> 0:02:36.560 we're probably not going to see a real resurgence in 0:02:36.600 --> 0:02:39.720 housing activity until next year, when we think the Fed 0:02:39.760 --> 0:02:41.280 will begin cutting interest rates. 0:02:41.800 --> 0:02:44.560 So if you're expecting more of that weakness in the 0:02:44.600 --> 0:02:48.000 economy to start around, Now, where is it being driven by? 0:02:48.200 --> 0:02:51.240 Is it the consumer, which obviously you know propelling GDP 0:02:51.440 --> 0:02:53.440 by more than two thirds of when you were looking 0:02:53.480 --> 0:02:54.480 at economic growth. 0:02:55.760 --> 0:02:58.880 Well, it's got to come from several places already. Like 0:02:58.919 --> 0:03:02.800 I said, the housing market, it has collapsed, and we 0:03:02.840 --> 0:03:04.880 don't we think it's just going to be middling, so 0:03:04.919 --> 0:03:08.200 it's not going to be a contributor. But businesses have 0:03:08.320 --> 0:03:13.960 been pulling back certainly on spending on equipment and also 0:03:14.080 --> 0:03:17.400 structures because the cost of capital is rising for many 0:03:17.440 --> 0:03:21.400 of them, and you definitely need consumers to spend less. 0:03:21.600 --> 0:03:24.120 So we have seen a little bit of moderation in 0:03:24.200 --> 0:03:27.040 terms of spending on big ticket items that you have 0:03:27.080 --> 0:03:29.840 to finance. The consumers are still spending a lot of 0:03:29.840 --> 0:03:33.840 money on services, especially travel and restaurants, things they couldn't 0:03:33.880 --> 0:03:36.680 really spend on during the pandemic. So the key thing 0:03:36.800 --> 0:03:40.920 is when that excess income that consumers have, you know, 0:03:40.920 --> 0:03:43.040 the excess savings go away. We think they're going to 0:03:43.080 --> 0:03:45.440 run out of steam in the second half of this year. 0:03:45.960 --> 0:03:48.480 And also we think consumers are going to become a 0:03:48.480 --> 0:03:51.760 little bit more concerned about job prospects and that might 0:03:51.800 --> 0:03:53.600 cause them to pull back on some of the spending 0:03:53.640 --> 0:03:54.000 as well. 0:03:54.320 --> 0:03:56.320 A follow up I have to that is when it 0:03:56.400 --> 0:03:59.280 comes to the repayment for the student debt that was 0:03:59.320 --> 0:04:02.800 delayed off and going through forbearance during the pandemic, that's 0:04:02.800 --> 0:04:05.640 supposed to presume in October. So when you're thinking about 0:04:05.640 --> 0:04:08.200 the consumer and those types of payments that are going 0:04:08.200 --> 0:04:10.839 to start up again, is that also going into those 0:04:10.880 --> 0:04:12.520 calculations of a pullback there. 0:04:13.600 --> 0:04:16.680 Absolutely we have folded that into our forecast for the 0:04:17.680 --> 0:04:20.480 last the second half of this year. And then also 0:04:20.600 --> 0:04:23.960 let's not forget the debt ceiling deal. While that's not 0:04:24.040 --> 0:04:26.400 really going to affect the fiscal year twenty twenty three, 0:04:26.560 --> 0:04:28.919 it does affect fiscal year twenty twenty four, and that 0:04:29.000 --> 0:04:31.440 starts in October as well. 0:04:31.560 --> 0:04:32.200 Dan, to talk to. 0:04:32.160 --> 0:04:35.120 Us about your view of the labor market here still, 0:04:35.600 --> 0:04:38.880 you know, very strong by historical measures here, and I 0:04:38.920 --> 0:04:41.520 know the Fed is talking about they expect the unemployment 0:04:41.600 --> 0:04:43.360 rate to go up and you know, maybe I have 0:04:43.360 --> 0:04:45.480 a fore handle here in a not too distant future. 0:04:45.960 --> 0:04:47.480 What's your view at the conference. 0:04:47.120 --> 0:04:50.640 Ward, Yes, we think also that we're probably going to 0:04:50.680 --> 0:04:53.360 have a four handle, that the unemployment rate may ultimately 0:04:53.480 --> 0:04:57.360 rise by one percentage point to four and a half percent, 0:04:57.440 --> 0:05:01.040 But that's that's not going to happen probably until early 0:05:01.640 --> 0:05:05.560 next year, because the unemployment rate really lags what goes 0:05:05.600 --> 0:05:10.160 on with GDP. And so certainly if the Fed continues 0:05:10.200 --> 0:05:12.920 to hike interest rates, which is strongly signaling a chair 0:05:13.040 --> 0:05:17.800 Powell signaled that certainly to Congress very recently, then that's 0:05:17.839 --> 0:05:21.720 also going the weigh on the economy and consequently the 0:05:21.800 --> 0:05:22.440 labor market. 0:05:22.680 --> 0:05:25.440 What industries do you think are most vulnerable to layoffs 0:05:25.520 --> 0:05:25.960 right now? 0:05:27.440 --> 0:05:31.600 So those pandemic darlings, those industries now are very vulnerable, 0:05:31.720 --> 0:05:36.800 so tech, finance, residential construction, and some of the sectors that. 0:05:36.800 --> 0:05:40.080 We've continued to see those cost cutting efforts, those are 0:05:40.120 --> 0:05:41.960 going to still be the ones that we'll. 0:05:41.760 --> 0:05:45.440 See absolutely because there's not as much demand for their 0:05:45.480 --> 0:05:46.560 products and services. 0:05:47.440 --> 0:05:49.479 All right, Dan, thank you so much for joining us. 0:05:49.560 --> 0:05:52.200 I always appreciate getting some thoughts from you. Dana Peterson, 0:05:52.279 --> 0:05:56.480 Chief Economists at the Conference Board. The Leading Economic Indicator 0:05:56.800 --> 0:06:00.360 data out today kind of showing some continuedness, and I 0:06:00.400 --> 0:06:02.120 think that Dantas had fourteen months in a row with 0:06:02.160 --> 0:06:05.720 a negative number, so it's very interesting to keep out 0:06:05.720 --> 0:06:06.279 an eye on that. 0:06:06.400 --> 0:06:06.599 Again. 0:06:06.640 --> 0:06:09.839 It came in it negative zero point seven percent on 0:06:09.920 --> 0:06:12.960 the Leading Index versus negative zero point six percent last month. 0:06:14.800 --> 0:06:18.240 You're listening to the Team Ken's are Live program Bloomberg 0:06:18.279 --> 0:06:21.640 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:06:21.720 --> 0:06:24.880 the iHeartRadio app and the Bloomberg Business app, or listen 0:06:24.920 --> 0:06:27.039 on demand wherever you get your podcasts. 0:06:30.120 --> 0:06:33.160 Let's pivot here to the Big Take story of the 0:06:33.240 --> 0:06:35.599 day on the Bloomberg terminal. This is we love the 0:06:35.600 --> 0:06:38.760 Big Take stories. They are so well researched, so well reported. 0:06:38.760 --> 0:06:39.480 Away the best. 0:06:39.560 --> 0:06:41.160 Yeah, deep, good team efforts. 0:06:41.200 --> 0:06:43.000 They really dive deep here and today is a good 0:06:43.000 --> 0:06:46.280 one talking about the electric vehicle market in Ford Motor 0:06:46.279 --> 0:06:50.359 Company in particular, they're racing as is GM and stillant 0:06:50.480 --> 0:06:53.479 Is to kind of really take the lead here in 0:06:53.520 --> 0:06:58.119 this ev transformation. Ford gets nine point two billion dollars 0:06:58.160 --> 0:07:01.600 from the US government for the effort. Oxshot Rathi one 0:07:01.600 --> 0:07:03.440 of the reporters on the story. He's a senior climate 0:07:03.480 --> 0:07:06.960 reporter with Bloomberg News. He joins us here. Okshot talk 0:07:06.960 --> 0:07:10.840 to us about Ford and the support it is receiving 0:07:10.960 --> 0:07:14.560 from the government authorities to kind of make this transformation 0:07:14.640 --> 0:07:16.160 to electric vehicles. 0:07:16.560 --> 0:07:19.680 Right, every car maker has to make this transformation and 0:07:19.800 --> 0:07:21.840 it's not going to be cheap. It has to be made, 0:07:21.920 --> 0:07:24.119 but it's not going to be cheap. And that's where 0:07:24.160 --> 0:07:27.720 the US government is coming in. Ford last year said 0:07:27.760 --> 0:07:30.200 it's going to spend us but just fifty billion dollars 0:07:30.520 --> 0:07:34.200 over the next four years towards electrification strategy. And this 0:07:34.440 --> 0:07:37.480 nine point two billion dollar loan, it's a conditional loan. 0:07:37.520 --> 0:07:40.400 The conditions are very light and they'll meet them, no doubt, 0:07:41.240 --> 0:07:45.200 but that will go towards building three battery factories. And 0:07:45.400 --> 0:07:48.160 that is a lot of battery factories, but still not enough. 0:07:48.800 --> 0:07:52.840 Ford has an ambition to electrify its entire fleet, but 0:07:52.920 --> 0:07:57.200 it's starting out with increasing its number of electric vehicles 0:07:57.240 --> 0:07:59.720 made from one hundred and thirty thousand last year to 0:07:59.760 --> 0:08:03.120 two million by twenty twenty six. So that's quite a 0:08:03.240 --> 0:08:05.920 jump and they need all the help they can and 0:08:06.080 --> 0:08:09.040 Joe Biden's Climate Plan is allowing the government to be 0:08:09.080 --> 0:08:12.400 able to give these billions out right now to be 0:08:12.400 --> 0:08:15.120 able to encourage these companies down the transition. 0:08:15.640 --> 0:08:18.480 And what you were mentioning for. Did have an investor 0:08:18.560 --> 0:08:21.160 event last month actually, where they were focusing on this 0:08:21.280 --> 0:08:25.800 fifty billion dollar plan for EV models and the availability 0:08:25.840 --> 0:08:28.840 in the cost of these crucial battery metals, and when 0:08:28.840 --> 0:08:31.760 you were thinking about nickel and cobalt, they've been key 0:08:31.760 --> 0:08:34.600 concerns for years among EV makers trying to build out 0:08:35.000 --> 0:08:37.040 their electric lineup. So what do you think are the 0:08:37.040 --> 0:08:38.280 main hurdles at play? 0:08:40.000 --> 0:08:44.160 So the main order from a Ford perspective actually is profitability. 0:08:44.760 --> 0:08:47.080 Ford is going to lose three billion dollars this year 0:08:47.160 --> 0:08:51.040 on its TV business, and it says it's going to 0:08:51.080 --> 0:08:55.760 turn the losses into profit by twenty twenty six. Of course, 0:08:56.240 --> 0:08:58.880 that is just from a company's perspective, but you're right, 0:08:59.040 --> 0:09:03.800 metals are going to be another constraint. And so this program, 0:09:03.880 --> 0:09:06.720 the US government program, it's called the Loan Program's Office, 0:09:06.760 --> 0:09:09.000 which gave this nine point two billion dollar loan for 0:09:09.040 --> 0:09:12.679 a battery manufacturing facility, is also giving out billions of 0:09:12.760 --> 0:09:16.600 dollars in battery recycling facility. And so the goal would 0:09:16.640 --> 0:09:20.040 there be to take the batteries that are already in 0:09:20.080 --> 0:09:23.280 the United States, recycle their metals, and reuse them. So 0:09:23.320 --> 0:09:25.520 that's one way in which you can deal with the 0:09:25.559 --> 0:09:29.679 metal crunch that is coming. But another is that you're 0:09:29.679 --> 0:09:32.120 going to have to mine metals. And now is America 0:09:32.200 --> 0:09:35.600 ready to do it domestically? That remains unclear. It's very 0:09:35.679 --> 0:09:38.160 much a live topic in the US Congress. 0:09:38.480 --> 0:09:40.720 So actually, I just gave us a sense of this 0:09:40.840 --> 0:09:43.640 nine point two billion dollars, the two or three plants 0:09:43.640 --> 0:09:46.719 they're thinking about here. Where is that in total the 0:09:47.120 --> 0:09:48.880 total need that they will have. 0:09:48.840 --> 0:09:50.079 For these types of facilities. 0:09:50.160 --> 0:09:53.400 Is this just kind of a good first step or 0:09:53.440 --> 0:09:55.600 is this kind of a giant leap for fulfilling their 0:09:55.640 --> 0:09:56.720 ultimate needs. 0:09:56.760 --> 0:10:00.320 I guess it's actually both, which is to say, they're 0:10:00.320 --> 0:10:03.480 going from zero battery facilities to three. So it's a giantly, 0:10:04.000 --> 0:10:05.880 but it's the first step because if you're going to 0:10:05.920 --> 0:10:08.640 have to electrify your entire fleet, you're going to have 0:10:08.679 --> 0:10:12.480 to build many more battery factories. And that's probably why 0:10:12.480 --> 0:10:16.800 this loan makes sense. If it's a giant leap, companies 0:10:17.400 --> 0:10:21.199 are typically conservative in taking those and getting a bit 0:10:21.240 --> 0:10:23.720 of government support, which would be in terms of a 0:10:23.800 --> 0:10:27.120 loan with conditions that are easier than what you would 0:10:27.120 --> 0:10:30.240 get on Wall Street, can make the difference between making 0:10:30.240 --> 0:10:33.520 a decision or not, and so that's going to help forward. 0:10:33.640 --> 0:10:36.640 But you're absolutely right, there is a long way to 0:10:36.679 --> 0:10:40.920 go for to transition to a fully electric vehicle company, 0:10:41.280 --> 0:10:44.840 which there is already one giant one in America called Tesla. 0:10:45.400 --> 0:10:47.560 I was just taking a look at Ford stock. Let's 0:10:47.559 --> 0:10:50.439 stick your simple afforts up about twenty two percent this 0:10:50.600 --> 0:10:54.040 year after that investor day last month, do you think 0:10:54.040 --> 0:10:57.520 they were successfully able to persuade investors on the merits 0:10:57.520 --> 0:10:59.680 of this plan when you are looking at this sixteen 0:10:59.720 --> 0:11:02.360 four increase an EV production in the span of just 0:11:02.400 --> 0:11:03.280 a few years. 0:11:04.920 --> 0:11:07.840 Well, Ford is trying to convince the investors as hard 0:11:07.880 --> 0:11:10.959 as it can. So there was a long conversation internal 0:11:11.040 --> 0:11:14.040 I'm sure even longer to try and see whether it 0:11:14.120 --> 0:11:17.199 is worth splitting the company into its TV business and 0:11:17.280 --> 0:11:21.480 into and its separate traditional engine business. But Ford came 0:11:21.520 --> 0:11:24.080 to a conclusion that that wouldn't be right because there 0:11:24.160 --> 0:11:29.079 are certain specializations between the two companies on design et cetera. 0:11:29.679 --> 0:11:34.760 On manufacturing also some components that are just too good 0:11:34.760 --> 0:11:36.840 to give up. You would have to replicate, you would 0:11:36.880 --> 0:11:40.240 have to actually increase costs. And so they decided in 0:11:40.280 --> 0:11:43.680 the end to stick with one company doing two things. 0:11:44.000 --> 0:11:46.559 But they are going to separate out the business in 0:11:46.720 --> 0:11:49.880 reporting terms, and that's going to give investors an insight 0:11:50.000 --> 0:11:53.320 into whether this transition is going as for things it 0:11:53.679 --> 0:11:58.760 can go with this current business structure. And you know, 0:11:59.160 --> 0:12:03.600 given that the stock prices up, clearly businesses clearly investors 0:12:03.679 --> 0:12:06.800 are in a position thinking that Ford's going in the 0:12:07.120 --> 0:12:13.040 right direction. But it's going to be analyzing as things go. 0:12:13.880 --> 0:12:16.840 There are clearly plans and Ford is starting to execute them. 0:12:17.240 --> 0:12:20.079 Now how well it executes them is the caution. 0:12:20.240 --> 0:12:22.840 Ok, shot, how about the Fords competitors in the US 0:12:22.960 --> 0:12:26.679 Stillantis and GM. Is the US government prepared to support 0:12:26.679 --> 0:12:28.400 those as well. 0:12:28.600 --> 0:12:33.520 So the US goverment has already funded a GM battery plant. 0:12:33.720 --> 0:12:36.560 So GM got two point five billion dollars last year 0:12:37.120 --> 0:12:38.920 in December twenty twenty two. 0:12:39.880 --> 0:12:40.280 And. 0:12:41.800 --> 0:12:45.880 STILLANTIS is actually getting money from the Canadian government. Okay, 0:12:46.200 --> 0:12:51.679 So in Canada, Volkswagen got ten billion dollars and STILLANTIS 0:12:51.800 --> 0:12:55.880 is in conversation to get something similar for its battery factories. 0:12:56.240 --> 0:12:59.800 But yes, it's one of those industries where profitability is hard, 0:13:00.520 --> 0:13:05.040 upfront investments high, and they tend to be national champions, 0:13:05.080 --> 0:13:08.720 so to speak, and governments want to protect them both 0:13:08.760 --> 0:13:12.960 for having the company domestically but also from the perspective 0:13:13.000 --> 0:13:16.480 of jobs that they give to many many different states 0:13:16.480 --> 0:13:17.560 that they. 0:13:17.600 --> 0:13:20.040 All right, Okshott, great reporting for you and your team. 0:13:20.080 --> 0:13:23.640 Appreciate that. Oxshot Rothy a senior reporter for climate for 0:13:23.679 --> 0:13:25.640 Bloomberg News. He and his team put out this Big 0:13:25.640 --> 0:13:28.120 Take story. Always good stories. You can find those stories 0:13:28.440 --> 0:13:32.560 at Bloomberg dot com, Slash Big Take or nispace Big Take. 0:13:32.720 --> 0:13:34.120 Go on the Bloomberg terminal. 0:13:34.520 --> 0:13:37.640 You're listening to the tape Cats are live program Bloomberg 0:13:37.679 --> 0:13:41.280 Markets weekdays at ten am Eastern on Bloomberg Radio. The 0:13:41.360 --> 0:13:44.560 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:13:44.600 --> 0:13:47.439 You can also listen live on Amazon Alexa from our 0:13:47.440 --> 0:13:51.840 flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 0:13:53.640 --> 0:13:56.360 Just meant Paul Sweeney here the Bloomberg Interactive Workers Studio. 0:13:56.360 --> 0:13:57.400 We're going to Mike McLoone. 0:13:57.559 --> 0:13:59.959 He's a senior macro strategist for Bloomberg Intelligence. 0:14:00.600 --> 0:14:01.839 Just should we tell Mike what we. 0:14:01.840 --> 0:14:06.240 Just yes, nicknamed him Miami Mike, Miami Mike. 0:14:06.400 --> 0:14:08.199 That's where we're going with Mike. That's that's You can 0:14:08.240 --> 0:14:10.640 thank Katie Greifeld for that. But you are forever known 0:14:10.720 --> 0:14:13.439 up here in the Bloomberg radio circles as Miami Mike. 0:14:13.480 --> 0:14:14.000 How do you like that? 0:14:14.760 --> 0:14:15.440 I'll take it. 0:14:15.480 --> 0:14:18.720 I actually last night got to shake of Mayor Mayor 0:14:18.920 --> 0:14:21.280 Suarez's hand for the fourth time last night, So I 0:14:21.280 --> 0:14:22.760 feel like I'm entrenched in the city. 0:14:22.880 --> 0:14:23.200 You are. 0:14:23.320 --> 0:14:26.360 You are our guy down there, and that's great. Hey, Mike, 0:14:26.400 --> 0:14:28.160 you know what we've been hearing about a lot over 0:14:28.200 --> 0:14:31.960 the last few days is that this equity market is 0:14:32.120 --> 0:14:33.280 over bought. 0:14:33.560 --> 0:14:34.640 A do you buy that? 0:14:34.880 --> 0:14:37.600 And b If so, what do you look at that 0:14:37.720 --> 0:14:39.200 kind of give you that sense. 0:14:39.480 --> 0:14:42.520 Well, I really appreciated your conversation about Gene and Martin 0:14:42.560 --> 0:14:45.440 Adams earlier. She has been spot on. But right now 0:14:45.480 --> 0:14:47.760 we have a little dichotomy, which we're supposed to with 0:14:47.960 --> 0:14:51.640 pure research professionals with on a Wong. On a Wong 0:14:51.760 --> 0:14:54.720 is our our chief economist. Now, she points out the 0:14:54.800 --> 0:14:57.480 term she's used for second half is ugly for the 0:14:57.600 --> 0:15:00.000 US economic It's trajectory. 0:15:00.120 --> 0:15:00.280 Now. 0:15:00.320 --> 0:15:02.800 She started saying this a year ago, and she said 0:15:02.840 --> 0:15:05.640 it would start in basically three Q she moved a 0:15:05.640 --> 0:15:08.480 little forward the banking crisis. So I'm going with that, 0:15:08.600 --> 0:15:10.600 and I look at it for first, you look at 0:15:10.640 --> 0:15:13.720 it a simple risk asset manager or a trader. Markets 0:15:13.720 --> 0:15:17.360 have bounced in this opium for a soft landing in 0:15:17.400 --> 0:15:19.960 the FED eventually ease. So the risk is it all 0:15:20.000 --> 0:15:23.200 tilts back towards a recession. The FED not easy in 0:15:23.200 --> 0:15:26.360 what you're seeing testifying right now from Erman Pow. He 0:15:26.640 --> 0:15:28.800 is banging hard and he has no incentive all to 0:15:28.880 --> 0:15:30.840 let the markets know they're going to provide more liquidity. 0:15:30.920 --> 0:15:33.920 So the lessons of liquidity and contraction. 0:15:33.600 --> 0:15:36.840 Money supplight minus five percent you mentioned LII, the annual 0:15:36.880 --> 0:15:39.440 measure is down has dropped the most in about thirty years. 0:15:39.440 --> 0:15:41.880 It's down almost eight percent. To me, that all tilts 0:15:41.920 --> 0:15:46.040 towards a pretty ugly second half, and I think that's 0:15:46.080 --> 0:15:48.400 the risk. Also, there was one little thing metric going 0:15:48.400 --> 0:15:52.080 with just last Friday and Tuesday, the Nasdaq reached about 0:15:52.120 --> 0:15:55.160 twenty four percent above its two hundred day movement average. 0:15:55.280 --> 0:15:58.280 It has not stayed sustained above that level, that high 0:15:58.360 --> 0:16:02.520 lofty level the Internet bubble that ended in two thousand. 0:16:03.200 --> 0:16:07.640 Now when it comes to what's happening with the bitcoin space, 0:16:07.800 --> 0:16:10.120 because I know you cover all things with this, it 0:16:10.160 --> 0:16:14.520 actually hit its highest soele level since April yesterday after 0:16:14.640 --> 0:16:18.200 obviously when you're thinking the correlation with this ETF type 0:16:18.200 --> 0:16:21.200 optimism that Katie Greyfield was just here talking to us 0:16:21.280 --> 0:16:24.240 about that what are you seeing there with bitcoin? And 0:16:24.400 --> 0:16:26.040 because the last time you were here, we were talking 0:16:26.040 --> 0:16:29.400 about how that thirty thousand sort of threshold level was 0:16:29.640 --> 0:16:34.240 the psychologically key level that investors were watching exactly. 0:16:34.280 --> 0:16:36.840 I stick with that, Jess, and I just sent an 0:16:36.960 --> 0:16:39.640 editorial I'm going to point that out for publishing tomorrow, 0:16:39.680 --> 0:16:43.560 that there's so much enthusiasm about this thirty thousand level. 0:16:43.560 --> 0:16:45.760 I think the risk is similar to the stock market. 0:16:45.800 --> 0:16:48.480 If we get a little bit of rollover the fastest 0:16:48.480 --> 0:16:50.840 horse in the race that went up the most this year, 0:16:50.880 --> 0:16:53.840 again it bounds, risks go back, going back down. Now, 0:16:53.880 --> 0:16:58.560 this ETF from Blackrock, Eric Belchunus points out it might 0:16:58.600 --> 0:17:01.320 not get approved until next We don't know that for sure, 0:17:01.320 --> 0:17:04.720 but there's so much enthusiasm here at this level. Here, 0:17:04.800 --> 0:17:07.680 I look at it as the macro is still unfavorable. 0:17:07.680 --> 0:17:10.760 Bitcoin phases its first recession. It's one of the riskiest 0:17:10.760 --> 0:17:13.600 assets in the business. It's still the least risky crypto, 0:17:13.920 --> 0:17:16.720 and it's at this key threshold. And my senses from 0:17:16.760 --> 0:17:18.760 digging into all the crypto people as they're all a 0:17:18.800 --> 0:17:21.720 little too giddy. I sense this around sixty thousand when 0:17:21.720 --> 0:17:23.840 Mayor Suarez took his salary in bitcoin. 0:17:23.920 --> 0:17:25.320 So I'm concerned at. 0:17:25.200 --> 0:17:27.800 These levels that we're gonna have here's the bottom line. 0:17:27.840 --> 0:17:30.800 I'm concerned we're gonna have that ebbing tied in the 0:17:30.840 --> 0:17:33.399 stock market. Hopefully Gino will be right, but I'm sensing 0:17:33.520 --> 0:17:36.159 more at least get a correction, and then Bitcoin will 0:17:36.200 --> 0:17:38.439 drop with that. So what we need eventually is bitcoin 0:17:38.480 --> 0:17:40.280 to either I'll perform the Nasdaq. But the problem is 0:17:40.280 --> 0:17:42.840 it's been the same level with the NASTEK since twenty seventeen. 0:17:42.880 --> 0:17:44.639 It's about two to one right now versus a. 0:17:44.680 --> 0:17:49.159 Nasdaq and it or we needed to transition in a 0:17:49.160 --> 0:17:52.399 recession towards trading more like treasury bonds or gold. 0:17:52.160 --> 0:17:54.399 And it's just not there yet. Maybe it's starting, but 0:17:54.440 --> 0:17:55.520 I don't see it yet. 0:17:55.800 --> 0:17:56.040 Mike. 0:17:56.640 --> 0:17:59.879 If we're having a top second half economically in the 0:18:00.000 --> 0:18:02.560 commodities space, are you looking at is this is my 0:18:02.640 --> 0:18:04.040 time to go out and b like pork bellies? 0:18:04.119 --> 0:18:05.040 What should I be thinking about? 0:18:05.119 --> 0:18:05.959 Yeah? 0:18:06.000 --> 0:18:08.160 Gold, I the only think I think goes backed up, 0:18:08.240 --> 0:18:10.080 it's rallied, but it's still a five percent in the 0:18:10.240 --> 0:18:13.520 I think gold's going to be the best performing commodity, 0:18:13.800 --> 0:18:16.000 probably one of the best reporting commodities as we tilt 0:18:16.080 --> 0:18:19.119 this recession specifically get to a serious recession. But the 0:18:19.160 --> 0:18:22.159 problem I see for most commodities it's still a bear market, 0:18:22.400 --> 0:18:25.520 and typically to bottom a bear market need a long 0:18:25.680 --> 0:18:29.040 lag to significant amount of federal reserve easy and we're 0:18:29.119 --> 0:18:31.639 still tightening, and that to me is the key thing. 0:18:31.720 --> 0:18:34.280 So just today, right now cordill is down another four percent, 0:18:34.280 --> 0:18:36.560 set sixty nine dollars a bill. I'm still looking afford 0:18:36.600 --> 0:18:39.280 to head towards fifty dollars a barrow, and there's precedent 0:18:39.320 --> 0:18:42.320 for that. It's done it since twenty fourteen to keep 0:18:42.320 --> 0:18:44.880 its actually since the financial crisis in two thousand and 0:18:44.920 --> 0:18:47.280 this year already natural gas has done the equivalent. 0:18:47.640 --> 0:18:48.359 So I look at. 0:18:48.280 --> 0:18:50.359 Commodities, there are still bear marketing. The bottom line is 0:18:50.400 --> 0:18:52.720 you have to ask yourself what ends that. All the 0:18:52.800 --> 0:18:57.040 data from China is disappointing, and the FED and most 0:18:57.040 --> 0:18:59.120 central banks are still tightening. We just saw the Bank 0:18:59.160 --> 0:19:02.760 of England just did a surprise fifty based point hike. 0:19:03.119 --> 0:19:04.879 That's not a good environment for commodities. 0:19:05.400 --> 0:19:05.600 Mike. 0:19:05.640 --> 0:19:09.119 When it comes to the gold to copper ratio, last 0:19:09.119 --> 0:19:11.280 time you were here, it was moving lower. Now it's 0:19:11.320 --> 0:19:13.800 actually moving higher this month. What do you think this 0:19:13.920 --> 0:19:16.960 is telling us in relation to when we're especially when 0:19:16.960 --> 0:19:19.199 it comes to copper and what that means for the 0:19:19.240 --> 0:19:20.680 trajectory of the global economy. 0:19:21.560 --> 0:19:25.360 Yes, so the gold outpracing copper is what I fully expect, 0:19:25.359 --> 0:19:29.840 and that's normally what happens in a recession, and when 0:19:29.880 --> 0:19:32.199 the FED starts it has to ease for that. So 0:19:32.240 --> 0:19:34.440 I think that's going to really break out and potentially 0:19:34.520 --> 0:19:37.199 make new highs. That's what it did during we had 0:19:37.200 --> 0:19:39.960 that big pump and liquidity, right they had twenty twenty one, 0:19:40.240 --> 0:19:43.080 And this is things like the bond manager Jeff Gunnle 0:19:43.119 --> 0:19:45.479 like watches. So gold to copper, I think is going 0:19:45.520 --> 0:19:49.359 to break out higher. And also remember the enduring propensity 0:19:49.400 --> 0:19:52.199 over time is for gold to beat most commodities. Certainly 0:19:52.200 --> 0:19:54.760 when it comes from having to hold that asset, it's 0:19:54.800 --> 0:19:58.160 the easiest, the cheapest to store. And so I'm quite 0:19:58.160 --> 0:20:02.120