WEBVTT - Wall Street's Unwinding from Russia 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.760 pm Eastern Time on the Bloomberg Radio or watch us 0:00:27.760 --> 0:00:31.760 on YouTube search Bloomberg Global News. One of our favorite 0:00:31.800 --> 0:00:35.199 people all time is in studio with us um. She's 0:00:35.240 --> 0:00:36.920 going to tackle some of the most read stories on 0:00:36.960 --> 0:00:39.959 the Bloomberg. One includes about Wall Streets, Russia pull back 0:00:40.040 --> 0:00:43.200 on raveling decades of investment. This is really coming Tim 0:00:43.200 --> 0:00:46.400 on something we talked about yesterday, UH JPMorgan Chase joining 0:00:46.400 --> 0:00:49.400 Goldman Sachs Group and pulling back from Russia in response 0:00:49.400 --> 0:00:52.920 to the country's invasion of Ukraine and subsequent war UH 0:00:52.960 --> 0:00:55.600 in that country. We're joined now by Shinnali Basik, Wall 0:00:55.600 --> 0:00:57.640 Street reporter for Bloomberg News she's with us in the 0:00:57.640 --> 0:01:00.520 Bloomberg Interactive Broker studio. She's only care mentioned some of 0:01:00.520 --> 0:01:02.840 the names there, JP Morgan, Chase, Goldman Sacks, if we 0:01:02.920 --> 0:01:05.200 talked about yesterday. Of course, give us a lay of 0:01:05.200 --> 0:01:07.360 the land right now, an overview of who's doing business 0:01:07.360 --> 0:01:09.840 in Russia and to what extent they're actually pulling out 0:01:09.920 --> 0:01:11.800 now when it comes to the biggest banks. Yeah, it's 0:01:12.040 --> 0:01:14.080 very interesting. A little bit of history here is worth 0:01:14.120 --> 0:01:17.000 getting into a lot of these banks, Goldman Sachs, Morgan's only. 0:01:17.080 --> 0:01:19.920 JP Morgan really got into Russia in the wake of 0:01:19.920 --> 0:01:24.200 the fall of the Soviet Union, and so Goldman and 0:01:24.360 --> 0:01:26.800 JP Morgan they were huge in terms of not just 0:01:26.880 --> 0:01:30.120 helping the Russian government, you know, stave off their debt crisis, 0:01:30.240 --> 0:01:34.200 but also in terms of helping get a very liquid 0:01:34.319 --> 0:01:37.320 underwriting market for a lot of Russian companies. So fast 0:01:37.360 --> 0:01:40.640 forward a couple of decades later, they have built fairly 0:01:40.720 --> 0:01:44.560 robust presences there, but they are much smaller in um 0:01:44.600 --> 0:01:46.840 in terms of the whole scope of the operation. So 0:01:46.920 --> 0:01:49.880 for Goldman Sachs, for example, it's only about any employees. 0:01:50.160 --> 0:01:53.800 For Morgan Stanley it's you know, a couple dozen, And 0:01:54.120 --> 0:01:57.760 for JP Morgan, it's a couple of hundred and uh 0:01:57.800 --> 0:01:59.720 for City Group it's much bigger as about three thousand. 0:02:00.160 --> 0:02:02.960 But most of these banks, they started really the retreat 0:02:03.120 --> 0:02:06.600 back in the last time we were talking about sanctions, 0:02:07.000 --> 0:02:10.000 and now they've been back, they have been pulling back, 0:02:10.040 --> 0:02:13.920 and so the exposure is somewhat limited. But with that said, 0:02:13.960 --> 0:02:16.720 as you see by these big funds, there's still billions 0:02:16.760 --> 0:02:19.120 of dollars on the line for a lot of big 0:02:19.160 --> 0:02:21.880 asset managers, which are big clients of the banks. So 0:02:22.000 --> 0:02:24.840 even with these pull backs, you are seeing banks having 0:02:24.880 --> 0:02:27.320 to engage in the market making function of what they 0:02:27.360 --> 0:02:30.320 do and help their clients unwind a lot of these trades. 0:02:31.000 --> 0:02:34.000 Are these banks involved with the oligarchs? That is the 0:02:34.080 --> 0:02:38.800 million dollar questions, Yes, and and and not just you know, 0:02:38.840 --> 0:02:40.960 the people who are sanctioned themselves and the people who 0:02:41.040 --> 0:02:43.120 might potentially be sanctioned moving forward. I mean that is 0:02:43.120 --> 0:02:45.240 a very big question because it's not just you know, 0:02:45.280 --> 0:02:47.680 whether they're wealth clients, but you know, are they involved 0:02:47.720 --> 0:02:50.120 in any of the assets that they own, and you 0:02:50.160 --> 0:02:52.520 know to what extent or any of these people's buyers 0:02:52.560 --> 0:02:54.840 on the other side of things, right, So I mean 0:02:54.880 --> 0:02:56.720 I know, that's a very big issue when it comes 0:02:56.760 --> 0:03:00.880 to the banks unwinding their derivative trades. For example with VTB. 0:03:01.000 --> 0:03:03.000 On the other side, there are certain banks that have 0:03:03.080 --> 0:03:05.720 asked regulators for an extension so that they could figure 0:03:05.720 --> 0:03:09.440 out how to unwind those trades. It is very complicated, 0:03:09.560 --> 0:03:12.200 even the entities that are not sanctioned. Guys, if you 0:03:12.200 --> 0:03:14.079 look at the way the CDs is trading, there's a 0:03:14.160 --> 0:03:18.200 high risk of default. And so there's there's two kind 0:03:18.240 --> 0:03:21.800 of buckets of things here, things that have sanctions already 0:03:21.800 --> 0:03:24.040 imposed on them, things that might in the future, and 0:03:24.240 --> 0:03:27.280 things that just come with a lot of reputational risks. 0:03:27.320 --> 0:03:29.920 Sounds like an emerging market. No, I'm just thinking about 0:03:29.919 --> 0:03:32.760 the risk reward, which is why, right we see banks 0:03:32.800 --> 0:03:35.960 and others go into these areas. And we probably thought 0:03:36.040 --> 0:03:38.600 because of the walk coming down, you know how many 0:03:38.600 --> 0:03:41.040 decades ago, that it was more of a sure thing 0:03:41.080 --> 0:03:44.280 in a closer move towards a market economy, which we 0:03:44.360 --> 0:03:48.279 have seen. And yet here we are. It's very complicated. 0:03:48.280 --> 0:03:50.240 And even today as I sit here with you, you know, 0:03:50.280 --> 0:03:52.000 I've got to say I've been on the phone with 0:03:52.040 --> 0:03:54.040 a lot of people in the restructuring world and in 0:03:54.080 --> 0:03:57.720 the fund management world, saying that, you know, they're wondering 0:03:57.760 --> 0:04:00.920 who of their peers, they're wondering if they themselves want 0:04:00.960 --> 0:04:03.240 to buy anything on the cheap right now that's not sanctioned, 0:04:03.280 --> 0:04:05.520 and so it's a very complicated question. They're really worried 0:04:05.560 --> 0:04:08.720 about the reputational risk, which obviously there's a lot of. 0:04:09.080 --> 0:04:11.640 So a Wall Street pull back from Russia is, you know, 0:04:11.680 --> 0:04:13.360 not really the whole story. I want to hit on 0:04:13.400 --> 0:04:16.279 the reputational risk ELEMNTIONALI. You know, you've been on the 0:04:16.279 --> 0:04:20.120 phone with sources, You've been passing through the very carefully 0:04:20.160 --> 0:04:22.920 worded statements that could that come from these banks. Are 0:04:22.920 --> 0:04:25.760 you getting the impression that they're pulling out for good, 0:04:26.000 --> 0:04:29.240 that this is indefinite, or that there is an opportunity 0:04:29.560 --> 0:04:32.720 if tensions ease, to go back in, Because Caroline, I've 0:04:32.760 --> 0:04:35.400 been talking two weeks, for two weeks about the reputational 0:04:35.480 --> 0:04:38.360 risk of of of going back to a place where 0:04:38.680 --> 0:04:41.880 the person in power did something that was so atrocious. 0:04:42.040 --> 0:04:44.279 You know, this is this is on a scale. I 0:04:44.360 --> 0:04:46.279 asked a bank executive the other day. I was like, 0:04:46.320 --> 0:04:49.600 can you compare this to any time in your history? 0:04:50.200 --> 0:04:54.880 And there was just a lot of silence on the phone. Uh, 0:04:54.960 --> 0:04:59.440 you know this is yes because you know is are 0:04:59.480 --> 0:05:03.040 the nineties with the Russia any um comparison right these 0:05:03.080 --> 0:05:05.760 in South Africa divestment, which you know has come up 0:05:05.800 --> 0:05:08.800 a little bit. But this is this is different. I mean, 0:05:08.800 --> 0:05:13.200 this scale is just so large. And you know the 0:05:13.279 --> 0:05:16.200 other question, the ripple effect that comes of this is 0:05:16.560 --> 0:05:21.800 does this change global geopolitics? Are there other countries they 0:05:21.839 --> 0:05:24.640 need to read? They will with the sanctions day in place. Yeah, 0:05:24.720 --> 0:05:26.360 and and that's the thing at the end. On one hand, 0:05:26.400 --> 0:05:30.320 the very simple answer is if you're sanction nity, the 0:05:30.360 --> 0:05:33.680 government and multiple governments have said no dice so like 0:05:33.839 --> 0:05:37.200 it's as simple as that. But on top of that is, 0:05:37.360 --> 0:05:39.960 you don't if they haven't pulled back already from even 0:05:40.000 --> 0:05:42.719 on the unsanctional individuals. They don't want to find themselves 0:05:42.720 --> 0:05:44.480 on the other end of a fine a few years 0:05:44.560 --> 0:05:47.720 from now. And that is just the least of their problems, right, 0:05:47.760 --> 0:05:49.920 And there are costs of going back and forth. Black Rock, 0:05:50.200 --> 0:05:51.760 Just in context, what do we need to I mean, 0:05:51.880 --> 0:05:53.880 they have what tent or they did have tenrillly and 0:05:53.920 --> 0:05:55.800 I think as of the beginning of this year or right, 0:05:55.839 --> 0:05:57.919 from the beginning. It's funny. Leave it to you, Carrol, 0:05:58.000 --> 0:05:59.880 to make sure that we're marking the market. Um so 0:06:00.320 --> 0:06:02.560 get black Rock with more than ten twillion dollars under 0:06:02.560 --> 0:06:04.919 management at the beginning, they see her lost seventeen billion. 0:06:04.960 --> 0:06:08.400 That's only point two per cent of the firm's assets, 0:06:08.440 --> 0:06:11.440 but seventeen billion in the pure dollar terms is a 0:06:11.440 --> 0:06:13.160 lot of money. And if you look at the specific 0:06:13.160 --> 0:06:16.159 funds themselves, yes, the one specifically tied to Russia have 0:06:16.560 --> 0:06:19.080 stopped trading. The ones that are liquid, they've been halted. 0:06:19.320 --> 0:06:21.600 But there's also liquid funds that are still trading that 0:06:21.720 --> 0:06:24.120 still have exposure to Russia, like a m B there 0:06:24.160 --> 0:06:27.039 emerging market fund, which you know, it's exposed to tons 0:06:27.040 --> 0:06:30.000 of different funds around the world, tons of different sovereign debt, 0:06:30.360 --> 0:06:33.360 and is exposed to Russian sovereign bonds. You follow this 0:06:33.400 --> 0:06:35.800 sector just got fifteen seconds. I mean, if there's an 0:06:35.800 --> 0:06:38.839 opportunity of money to be made, would the financial community 0:06:38.839 --> 0:06:41.360 go back in? Do you think real quickly? It's too 0:06:41.360 --> 0:06:45.120 soon to tell. Okay, nicely said, and you've covered a lot. 0:06:45.160 --> 0:06:47.280 Thank you so much, Shinali Bostic, as I said, one 0:06:47.320 --> 0:06:49.800 of our faves Wall Street reporter up Bloomberg News here 0:06:49.800 --> 0:06:52.320 in our interactive broker studio. Check her out at shiny 0:06:52.360 --> 0:06:58.560 Bosk on Twitter. You're listening to Bloomberg Radio. You're listening 0:06:58.600 --> 0:07:02.400 to Bloomberg Business Way with Carol Messer and Bloomberg Quick 0:07:02.480 --> 0:07:06.800 Takes Tim Stinovic on Bloomberg Radio south By Southwest. It 0:07:06.839 --> 0:07:11.320 brings together tech, film, music industries gets underway today in Austin, Texas. 0:07:11.920 --> 0:07:13.920 The more than weeklong event is in person for the 0:07:13.920 --> 0:07:15.800 first time in three years. This was supposed to be 0:07:15.880 --> 0:07:19.440 also the first year Ukraine would send an official delegation 0:07:19.480 --> 0:07:21.920 of startups to the event. That plan no tim of course, 0:07:21.960 --> 0:07:25.440 disrupted by the war at home. Sarah McBride profiles some 0:07:25.480 --> 0:07:27.760 of those people who were supposed to be there and 0:07:28.120 --> 0:07:31.520 mostly now is still in Ukraine. She's venture capital reporter 0:07:31.560 --> 0:07:33.640 for Bloomberg News. She joins us on the phone from 0:07:33.960 --> 0:07:37.880 San Francisco. Sarah, there's no probably no better way to 0:07:37.880 --> 0:07:39.640 put this than the way that you wrote about it. 0:07:39.760 --> 0:07:41.920 Really at the beginning of your story. Somebody who was 0:07:41.960 --> 0:07:44.600 supposed to be in Austin, Texas this week, staying in 0:07:44.600 --> 0:07:47.520 an Airbnb now finds herself in the middle of the 0:07:47.600 --> 0:07:50.640 night hearing air raid sirens and waking her two year 0:07:50.680 --> 0:07:52.840 old up and hiding in a bathroom to try to 0:07:52.880 --> 0:07:58.080 stay safe. Yes, that was just the most heart wrenching story. 0:07:58.440 --> 0:08:01.440 She and her high men, who's also a co founder 0:08:01.520 --> 0:08:06.120 of the company, left Kia the day before the attack 0:08:06.200 --> 0:08:08.880 on Ukraine started. They got there two year old, they 0:08:08.880 --> 0:08:11.960 had to find an apartment. He's asking what's going on. 0:08:12.280 --> 0:08:14.200 They tell him it's hide and seek and they have 0:08:14.360 --> 0:08:17.440 to hide in the bathroom and look for dinosaurs there, 0:08:17.960 --> 0:08:21.120 and all the stories they tell him. It was just 0:08:21.320 --> 0:08:24.920 the most surreal feeling. Their whole life has been upended. 0:08:25.000 --> 0:08:28.240 And I was interviewing her over zoom and she could 0:08:28.280 --> 0:08:30.960 just see the news room in the background with everybody 0:08:31.080 --> 0:08:34.240 just going about their business and here she was in 0:08:34.280 --> 0:08:38.280 the middle of the war. Just was the most wrenching 0:08:38.600 --> 0:08:42.520 reporting experience. You know, Sarah's something that we grappled with, right, 0:08:42.559 --> 0:08:45.120 because what we do here at Bloomberg is we report 0:08:45.160 --> 0:08:47.319 on companies, what they do. We report on the financial 0:08:47.400 --> 0:08:51.240 markets and world's events how they impact the markets. And 0:08:51.320 --> 0:08:53.559 of course we've done that with the Russian invasion of 0:08:53.679 --> 0:08:57.640 Ukraine the subsequent war. So in reporting out your story, right, 0:08:57.760 --> 0:09:00.560 we cannot forget the humanitarian impact. But you also wanted 0:09:00.600 --> 0:09:04.319 to shed some light on what what these entrepreneurs who 0:09:04.320 --> 0:09:08.240 have created these companies, what they're doing right. And so, 0:09:08.520 --> 0:09:12.600 for example, that startup founder who rents a company called 0:09:12.679 --> 0:09:16.760 EFA makes disposable toothbrushes, and they were getting a lot 0:09:16.840 --> 0:09:19.359 of traction. They were getting into a bunch of hotels 0:09:19.440 --> 0:09:22.040 in the US. She told me they were talking to 0:09:22.200 --> 0:09:25.440 Netflix and she was hoping to use south By Southwest 0:09:25.520 --> 0:09:29.640 to really build on this momentum. Now, as well as 0:09:29.800 --> 0:09:34.760 worrying about her family, she and her employees all over Ukraine, 0:09:35.760 --> 0:09:38.960 it's also her business. She had a shipment of toothbrushes 0:09:39.040 --> 0:09:42.120 that are now stuck in Romania. A bunch of their 0:09:42.200 --> 0:09:46.599 disposable razors are in an office building and TV she 0:09:46.679 --> 0:09:49.880 has no idea if they're safe or not. And then 0:09:49.920 --> 0:09:52.040 the other people I spoke to who are trying to 0:09:52.200 --> 0:09:56.640 juggle dealing with a war and fleeing from their homes 0:09:57.400 --> 0:10:00.720 and trying to solvage what they can at our businesses 0:10:00.800 --> 0:10:03.920 and hoping their businesses make it to the other side 0:10:03.960 --> 0:10:08.600 of this. And uh, they're all at different stages um, 0:10:09.200 --> 0:10:16.120 all experiencing just crazy range of emotions, UM, and many 0:10:16.240 --> 0:10:20.240 of them are still in Ukraine. Many of them had 0:10:20.280 --> 0:10:24.240 to lead in nearby countries like Poland. So, Sarah, what 0:10:24.400 --> 0:10:25.920 what is going to be going on at south By 0:10:26.000 --> 0:10:30.440 Southwest in place of where these Ukrainian entrepreneurs were going 0:10:30.480 --> 0:10:31.839 to be? They were they were supposed to have a 0:10:31.880 --> 0:10:35.480 booth their sponsored by the Ukrainian government. How will they 0:10:35.520 --> 0:10:41.560 be represented? Well? Um? The first notion in the first 0:10:41.640 --> 0:10:44.520 word that many of them got from the ministry. They're 0:10:44.520 --> 0:10:48.120 all on a telegram group chat and they got the 0:10:49.640 --> 0:10:52.920 Ministry of Digital Transformation in Ukraine was supposed to be 0:10:53.520 --> 0:10:56.720 through various grants funding parts of their chips, and they 0:10:56.800 --> 0:11:00.400 got a message saying basically, sorry, we need that money 0:11:00.520 --> 0:11:04.680 for the war efforts. UM, please return it and glory 0:11:04.760 --> 0:11:09.839 to Ukraine. So invade uh. I think at that point, Uh, 0:11:10.280 --> 0:11:12.880 their priorities had already shifted from trying to get to 0:11:13.000 --> 0:11:16.280 south By Southwest. But there is one person from the 0:11:16.360 --> 0:11:20.679 ministry who's still going, and there is another representative of 0:11:20.800 --> 0:11:24.920 the startup community there. They were just kind of frantically 0:11:25.360 --> 0:11:28.280 figuring out what to do. They were debating whether to 0:11:28.360 --> 0:11:31.280 have the founders come in by a zoom link to 0:11:31.400 --> 0:11:35.800 pitch the latest I've heard if they're looking for volunteers 0:11:36.400 --> 0:11:39.280 who can pitch on behalf of these startups at south 0:11:39.360 --> 0:11:42.600 By Southwest. But the booth is still going to be there, 0:11:42.720 --> 0:11:46.400 which is impressive. It is incredibly impressive. And so glad 0:11:46.520 --> 0:11:48.320 you were able to bring this story up to us 0:11:48.360 --> 0:11:50.679 and remind us of the work that they're doing. And 0:11:50.760 --> 0:11:54.440 hopefully these individuals um get to put out their companies 0:11:54.480 --> 0:11:56.480 at a future of it and just hope that they 0:11:56.559 --> 0:11:59.959 say safe uh, and so do their families. All right, Sarah, 0:12:00.000 --> 0:12:02.480 thank you so much. Sarah McBride Cheese, VC reporter here 0:12:02.480 --> 0:12:06.680 at Bloomberg News. This is Bloomberg Business Week with Carol 0:12:06.720 --> 0:12:11.120 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:12:11.480 --> 0:12:14.480 Well Today's Bloomberg Big Take. It's also among the most read. 0:12:14.559 --> 0:12:17.679 It's in the new issue also of Bloomberg Business Week magazine, 0:12:17.679 --> 0:12:20.240 which is now online at business Week, in Bloomberg dot com, 0:12:20.280 --> 0:12:23.280 also on the Bloomberg terminal and on news stands. It's 0:12:23.440 --> 0:12:28.080 a story about how Well's Fargo left black homeowners behind 0:12:28.160 --> 0:12:31.280 in a pandemic mortgage refinancing boom. Tim Sean Donn and 0:12:31.400 --> 0:12:34.599 his senior economics writer at Bloomberg News. He's one of 0:12:34.640 --> 0:12:39.199 the bylines on this exhaustively researched and written uh story 0:12:39.280 --> 0:12:42.320 in the current issue of Bloomberg Business Week. Sean joins 0:12:42.360 --> 0:12:46.520 us from our studio in Washington, d C. Sean, I 0:12:46.640 --> 0:12:49.120 was really shocked to see these numbers, especially, you know, 0:12:49.200 --> 0:12:50.959 given that this was over the last two years and 0:12:51.040 --> 0:12:53.080 not something that we think that's you know, more historical. 0:12:53.080 --> 0:12:54.880 So I'm just gonna go right into it and share 0:12:54.920 --> 0:12:57.920 the data nationwide. Only for scent of black homeowners who 0:12:58.040 --> 0:13:01.920 completed a REFI application with Waltz Fargo were approved. That 0:13:02.040 --> 0:13:05.160 compares with seventy of white homeowners. This is according to 0:13:05.200 --> 0:13:10.800 a Bloomberg News analysis of federal mortgage data. Why and how, Yeah, Look, 0:13:10.840 --> 0:13:13.000 the question why is something we're still trying to get at. 0:13:13.320 --> 0:13:17.559 Wells Fargo says that it is simply stricter than other lenders, 0:13:18.400 --> 0:13:21.480 that it treats all lenders the same, but the data 0:13:21.559 --> 0:13:25.240 clearly shows a big disparity there. I think, you know, 0:13:25.320 --> 0:13:28.040 there's the Wells Fargo story. There's also a bigger story here, 0:13:28.160 --> 0:13:31.079 which is that we've coming to the end of of 0:13:31.160 --> 0:13:34.040 a huge wealth event really in America, something like five 0:13:34.120 --> 0:13:37.080 trillion dollars in mortgages have been refinanced in the last 0:13:37.160 --> 0:13:40.679 two years. When the Fed next week raises interest rates, 0:13:40.760 --> 0:13:44.480 it will be kind of calling time on that refinancing boom. 0:13:44.559 --> 0:13:46.840 And a lot of families around America have been able 0:13:46.920 --> 0:13:50.600 to take advantage of rising home prices, low interest rates, 0:13:51.000 --> 0:13:54.240 pull out some equity, maybe finance kids education, and so on. 0:13:54.600 --> 0:13:56.800 And the reality is black homeowners have had a much 0:13:56.880 --> 0:13:59.560 harder time, and they had a much harder time than 0:13:59.600 --> 0:14:01.240 in the rest to the industry when they tried to 0:14:01.640 --> 0:14:04.840 refinance with Wells Fargo. In want to bring in Bloomberg 0:14:04.880 --> 0:14:06.920 Business Week out of Jill Webber with us here in 0:14:07.000 --> 0:14:09.200 our interactive Broker studio, I feel like I see Wells 0:14:09.240 --> 0:14:12.000 Fargo Joel that all all of a sudden like jump back, 0:14:12.040 --> 0:14:14.640 because it does feel like it's been many years of 0:14:14.760 --> 0:14:18.079 things where whether it's the culture or something, the company 0:14:18.280 --> 0:14:21.440 is just not getting it right. Yeah, the banks had 0:14:21.840 --> 0:14:24.800 plenty of issues through the years. UM and you know 0:14:24.920 --> 0:14:28.840 the one that um that Sean writes about UM in 0:14:28.920 --> 0:14:31.400 this story. You know, the thing that really just struck 0:14:31.480 --> 0:14:33.560 me was was the data. Because when you when you 0:14:33.600 --> 0:14:37.360 see the data, it just becomes really Stark. Um and 0:14:37.520 --> 0:14:39.720 you know that the the part of it that I 0:14:39.800 --> 0:14:43.680 think is um what makes it an interesting Business Week 0:14:43.720 --> 0:14:45.920 story has been this on going coverage we have about 0:14:46.520 --> 0:14:49.080 how much wealth is locked up in real estate and 0:14:49.320 --> 0:14:53.600 when when you have access to that, you can really 0:14:54.040 --> 0:14:58.840 have intergenerational transfers of wealth and and and rise with that. 0:14:58.960 --> 0:15:01.440 And if you're locked out of it, you're just always 0:15:01.480 --> 0:15:05.080 in on the sidelines. Um and And Sean I was wondering, um, 0:15:05.240 --> 0:15:08.480 you know what, you know, being so intimate with his data, 0:15:08.760 --> 0:15:12.200 um and and sort of the the the element of 0:15:12.640 --> 0:15:17.040 of wealth that a company's home ownership and and what's 0:15:17.080 --> 0:15:20.640 the cost of of a fact of the reporting about 0:15:20.640 --> 0:15:23.640 Wills Pargo And yeah, and look, I mean yeah, I 0:15:23.840 --> 0:15:25.280 think a lot of time when we talk about wealth 0:15:25.320 --> 0:15:27.640 in America and the racial wealth gap, we talk about 0:15:27.800 --> 0:15:31.600 the gap in home ownership between white and black families. 0:15:31.640 --> 0:15:34.560 Black families have a much lower home ownership rate than 0:15:34.640 --> 0:15:37.200 white families. What was really striking to me here is 0:15:37.320 --> 0:15:40.560 that we are talking about black families that have overcome 0:15:40.640 --> 0:15:43.960 that gap. We're talking about black middle class homeowners in 0:15:44.240 --> 0:15:46.760 the suburbs. The characters we were talking to were in 0:15:46.800 --> 0:15:50.320 the suburbs of Atlanta. These are not UH, poor inner 0:15:50.440 --> 0:15:55.120 city black families. These are relatively affluent black middle class 0:15:55.160 --> 0:16:00.440 families who still have trouble literally leveraging the wealth that 0:16:00.560 --> 0:16:04.160 they have and taking advantage of this historic event UH 0:16:04.280 --> 0:16:06.040 in terms of the low interest rates we've seen in 0:16:06.080 --> 0:16:08.560 the in the last couple of years. What's also striking 0:16:08.600 --> 0:16:10.280 to me, and what I couldn't get out of my 0:16:10.320 --> 0:16:12.480 head when I was looking at this data, is that 0:16:12.560 --> 0:16:14.880 a lot of what we were looking at in terms 0:16:14.960 --> 0:16:18.840 of the practices by banks UH and Wells Fargo, took 0:16:18.920 --> 0:16:22.200 place in twenty and at a time when we were 0:16:22.240 --> 0:16:27.280 having the supposed racial reckoning over the gaps in the 0:16:27.360 --> 0:16:30.760 American economy. UH. And here it is. It's it's right there, 0:16:30.800 --> 0:16:33.640 it's stark, it's um. It's just hard to get your 0:16:33.680 --> 0:16:36.840 head past that. And you've you look at this and 0:16:36.960 --> 0:16:38.600 you think back over the last couple of years, and 0:16:39.280 --> 0:16:42.400 and it's hard to to come to any other conclusion 0:16:42.480 --> 0:16:45.360 other than you know, racial wealth and equality in America 0:16:45.480 --> 0:16:48.680 has widened in the last couple of years. And housing 0:16:48.800 --> 0:16:50.920 is a big part of that story. And refinancing is 0:16:50.960 --> 0:16:53.360 a big part of the housing story. Sean, Who's Who's 0:16:53.440 --> 0:16:55.760 Christie Furchio and what is she doing at Wells Fargo 0:16:55.800 --> 0:16:58.560 and why is why is she unique in her position? Yeah, 0:16:58.600 --> 0:17:01.560 so she's really interesting. She is brought in in the 0:17:01.640 --> 0:17:04.840 middle of u in the summer of as the head 0:17:04.880 --> 0:17:07.280 of the mortgage business there, and she's the first black woman, 0:17:07.880 --> 0:17:10.480 UH to head up that that that mortgage business. She's 0:17:10.480 --> 0:17:14.000 also the head of the Mortgage Bankers Association in America 0:17:14.400 --> 0:17:17.760 right now, UM, and she is sitting on some panels 0:17:17.760 --> 0:17:20.760 that are looking at at credit in America and how 0:17:20.800 --> 0:17:24.560 credit scores are are are divvied out. And she's interesting. 0:17:24.600 --> 0:17:27.240 I mean, she's someone who is quite frank about the 0:17:27.320 --> 0:17:30.320 problems that that Wells Fargo has had in the past 0:17:30.400 --> 0:17:33.240 and that the broader industry has in terms of servicing 0:17:33.800 --> 0:17:37.800 UM black homeowners. And she makes a point that part 0:17:37.880 --> 0:17:40.240 of this is cultural and part of this is a legacy. 0:17:40.359 --> 0:17:42.680 And she when we talked to her, sided her own 0:17:42.720 --> 0:17:46.280 mother who had a thirty year mortgage and never refinanced 0:17:46.359 --> 0:17:50.760 at once. And this makes Christie's own head spend because 0:17:50.800 --> 0:17:54.240 she's a banker and she's all about helping people refinance. Hey, 0:17:54.440 --> 0:17:57.040 UM sean to be fair Wells versus other big banks. 0:17:57.200 --> 0:18:01.879 What did we find out. Yeah, so Wells has by 0:18:01.960 --> 0:18:04.920 far the lowest approval rate or had by far the 0:18:04.960 --> 0:18:10.480 lowest approval rate in h among big banks. You look 0:18:10.680 --> 0:18:14.840 at banks like Bank of America. Uh, they were in 0:18:14.920 --> 0:18:17.879 the sixties in terms of an approval rate. JP Morgan 0:18:17.960 --> 0:18:20.360 had a higher approval rate than that, and Rocket Mortgage, 0:18:20.359 --> 0:18:24.159 which was the bigger refinance the biggest refinanced player in 0:18:24.320 --> 0:18:29.520 in in twenty twenty, had a rate up around eight plus. Uh. 0:18:29.760 --> 0:18:32.720 So I think you know the gap in terms of 0:18:32.800 --> 0:18:37.560 Wells Fargo uh is really it was the only major 0:18:37.720 --> 0:18:42.720 bank that approved less mortgages than it rejected, and that's 0:18:42.760 --> 0:18:45.239 for people who completed applications. All Right, there's a lot 0:18:45.320 --> 0:18:47.560 in this story and I highly recommend that folks check 0:18:47.600 --> 0:18:49.879 it out online on the Bloomberger. Also pick up the 0:18:49.920 --> 0:18:53.879 news stand because um again another revealing story about the 0:18:53.920 --> 0:18:56.359 inequities when it comes to home ownership, and as Joel mentioned, 0:18:56.600 --> 0:18:58.600 that has a lot to do with wealth creation when 0:18:58.640 --> 0:19:01.120 it comes to generational wealth. Our thanks to Sean Donna 0:19:01.160 --> 0:19:03.840 and senior economics writer at Bloomberg News and to Joel Webber, 0:19:03.960 --> 0:19:07.920 editor a Business Week. You're listening to Bloomberg Business Week 0:19:08.160 --> 0:19:12.040 with Carol Messer and Bloomberg Quick Takes. Tim Stenovic on 0:19:12.280 --> 0:19:14.640 Bloomberg Radio, we do want to get to our weekly 0:19:14.680 --> 0:19:17.800 crypto segment because this week present Biden signing an executive 0:19:17.880 --> 0:19:20.880 order directing government agencies to focus more on the fast 0:19:20.920 --> 0:19:23.840 growing crypto market, from researching a US digital dollar to 0:19:24.000 --> 0:19:27.240 combat and illicit finance, the White House saying on Wednesday 0:19:27.320 --> 0:19:30.879 calling on all agencies across the government to coordinates what's 0:19:31.240 --> 0:19:33.840 thus far been a kind of scattershot approach to the 0:19:33.880 --> 0:19:36.440 asset class. However, I gotta say, Tim, it falls short 0:19:36.480 --> 0:19:39.600 of providing clear direction when it comes to regulation. Kindness. 0:19:39.960 --> 0:19:42.760 Speaking of direction, we saw bitcoin surge on Wednesday after 0:19:42.840 --> 0:19:45.160 this news came out, which was actually before the executive 0:19:45.240 --> 0:19:47.960 order came out. That's an entirely different story, though, Carol. Thursday, 0:19:48.040 --> 0:19:50.520 it's selled off a little bit, and today we're actually 0:19:50.560 --> 0:19:52.240 seeing it lower by just a little bit. To Nel 0:19:52.280 --> 0:19:55.800 Dixon is CEO and executive director of Stellar Development Foundation. 0:19:56.400 --> 0:19:59.600 Uh Dnnell joins us once again from Oakland, California, to now, 0:19:59.640 --> 0:20:03.360 how are you? I'm wonderful, how are you both doing well? 0:20:03.680 --> 0:20:06.480 I should note that Stellar Development Foundation, it's a nonprofit, 0:20:06.640 --> 0:20:10.159 uses blockchain tech to help unlock the world's potential by 0:20:10.240 --> 0:20:13.640 making money more fluid and opening up markets, uh and more. 0:20:14.160 --> 0:20:16.200 Let's start with this executive order. What does the White 0:20:16.240 --> 0:20:19.600 House Executive Order mean for the crypto industry? You know, 0:20:19.760 --> 0:20:22.639 it's just such an opportunity for the crypto industry. I 0:20:22.680 --> 0:20:24.720 think that what it shows is that there's been so 0:20:24.840 --> 0:20:27.560 much progress that we've made domestically in the US with 0:20:28.080 --> 0:20:31.119 the administration as well as with policymakers and regulators to 0:20:31.280 --> 0:20:33.879 make them pay attention to this particular market, in this 0:20:34.040 --> 0:20:36.480 industry as a whole. And what I'm hopeful that we 0:20:36.520 --> 0:20:38.400 can get out of this because it would be amazing 0:20:38.600 --> 0:20:40.760 for us to have a lot more clarity around the 0:20:40.880 --> 0:20:43.119 roles of engagement for each of these agencies, so that 0:20:43.240 --> 0:20:47.119 there's a lot more specificity around what their lanes of 0:20:47.160 --> 0:20:49.000 operation are. And I think that that's going to just 0:20:49.359 --> 0:20:51.480 eliminate some of the concern that we see in the 0:20:51.560 --> 0:20:54.800 ecosystem broadly for blockchain and cryptocurrency about how to operate. 0:20:54.880 --> 0:20:56.760 You know, sometimes you have to do something to nudge 0:20:57.280 --> 0:21:00.119 and get things going. Because I'm wondering about exact get 0:21:00.160 --> 0:21:01.760 of order which can be overturned. Right, we know how 0:21:01.840 --> 0:21:05.520 this works versus some kind of congressional or regulatory action. 0:21:05.720 --> 0:21:09.760 So is it a good, good, kind of you know, 0:21:10.480 --> 0:21:14.040