WEBVTT - Energy M&A, Bitcoin ETFs, and Hertz 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.280 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 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 0:00:17.400 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:21.200 --> 0:00:25.520 Another deal in the energy space, this time Chesapeake Energy. 0:00:25.640 --> 0:00:28.160 I'm going to buy Southwestern Energy for seven point four 0:00:28.160 --> 0:00:30.600 billion dollars in an all stock deal. 0:00:30.800 --> 0:00:33.760 So I mean crazy, which means we get the opportunity 0:00:33.800 --> 0:00:36.599 to speak to our good friend Vince Piazza, senior industry 0:00:36.600 --> 0:00:40.400 analysts covering all the energy space for Bloomberg Intelligence. Of course, 0:00:40.400 --> 0:00:43.680 the highlight of his career, former sportscaster, talk show host 0:00:43.720 --> 0:00:48.879 at the famed WFUV radio station at Fordham University, which 0:00:48.880 --> 0:00:52.680 has launched so many legendary broadcasting careers, particularly in the 0:00:52.680 --> 0:00:55.760 sports biz. Vince, we'll talk radio at another time. Let's 0:00:55.760 --> 0:00:57.960 talk about this deal here. What's going on in your business? 0:00:57.960 --> 0:00:58.120 Here? 0:00:58.160 --> 0:01:02.000 It is the consolidation is fast and furious, isn't it? 0:01:02.000 --> 0:01:02.680 It really is? 0:01:02.880 --> 0:01:06.240 And we talked about this in our outlook for twenty 0:01:06.280 --> 0:01:10.520 twenty four, the consolidation continues. You know, we have reached 0:01:10.560 --> 0:01:14.760 a maturity phase in this industry. We had the shakeout 0:01:14.840 --> 0:01:19.880 and now you have established players looking for increased scale 0:01:20.000 --> 0:01:24.959 and concentration. You're selling a commodity, there's little differentiation. The 0:01:24.959 --> 0:01:28.080 only way you can differentiate is by having more of 0:01:28.120 --> 0:01:31.880 it so that you can gain efficiencies, economies of scale, 0:01:32.000 --> 0:01:35.560 better productivity. And this is a prime example, Paul. Right, 0:01:35.840 --> 0:01:39.280 So you have two very large players getting together to 0:01:39.480 --> 0:01:46.400 form the third largest natural gas producer behind Chevron and Exxon. 0:01:46.520 --> 0:01:50.800 So this is a globally relevant producer that will have 0:01:51.040 --> 0:01:56.760 access via its exposure to the Hainesville shale, to Gulf 0:01:56.840 --> 0:02:02.000 Coast markets, Seaborn markets, and being able to push those 0:02:02.080 --> 0:02:06.880 flows out there in the international marketplace, which allows for 0:02:07.120 --> 0:02:10.720 greater diversification of selling hubs. You know, they're going to 0:02:10.760 --> 0:02:15.040 be exposed roughly twenty twenty five percent to that Seaborn market. 0:02:15.240 --> 0:02:20.680 They're going to have various selling hubs that they can 0:02:20.720 --> 0:02:24.520 push product through something like over two dozen. So the 0:02:24.639 --> 0:02:27.839 deal makes sense on paper. What I don't think most 0:02:27.919 --> 0:02:31.040 folks are really focusing on, and I invite you all 0:02:31.120 --> 0:02:35.160 to touch base with the Jennifer Reesho's our anti trust specialist. 0:02:35.520 --> 0:02:38.959 This deal will get lots of scrutiny. I think a 0:02:40.840 --> 0:02:45.200 deal like EQT buying up Quantum assets for about four 0:02:45.240 --> 0:02:48.120 and a half billion, that deal took about a year 0:02:48.160 --> 0:02:51.480 to close. So this is a much larger deal. It's 0:02:51.600 --> 0:02:56.960 much more concentrated in two very important specific plays, and 0:02:57.000 --> 0:02:59.520 so I think that's going to get a lot more scrutiny. 0:03:00.240 --> 0:03:03.000 So this isn't a done deal, but on paper, it 0:03:03.120 --> 0:03:06.760 is a very rational approach to a commoditized marketplace. 0:03:06.880 --> 0:03:08.880 Yeah, you read my mind, Vince, because I was going 0:03:08.919 --> 0:03:11.480 to ask you what does FTC think on these you know, 0:03:11.639 --> 0:03:15.720 large large gas and oil deals. I got to talk 0:03:15.720 --> 0:03:18.160 about this whole trend of consolidation. Are we going to 0:03:18.160 --> 0:03:20.840 see this continue into twenty twenty four? I mean, is 0:03:20.840 --> 0:03:22.520 this going to be a big part of all these 0:03:22.520 --> 0:03:23.600 companies gaining scale. 0:03:24.919 --> 0:03:28.800 Yeah. As part of our outlook, we looked at gas 0:03:28.840 --> 0:03:31.880 in general relative to oil, and we have we have 0:03:32.000 --> 0:03:34.920 had all of these deals in the Permian, but gas 0:03:34.920 --> 0:03:37.840 deals have been rather quiet in twenty twenty three, and 0:03:37.880 --> 0:03:43.000 that's because of the way the benchmarks performed in twenty 0:03:43.080 --> 0:03:45.520 twenty three. We think that that gas the worst is 0:03:45.880 --> 0:03:49.160 the worst is passed that gas, we could see better 0:03:49.240 --> 0:03:52.880 improvement in tighter markets for twenty twenty four. We think 0:03:52.880 --> 0:03:55.920 the market tightness will show itself in the second half, 0:03:55.960 --> 0:03:59.280 so we think we will have more consolidation in a 0:03:59.360 --> 0:04:03.520 natural gas space. This will likely set things off. How 0:04:03.680 --> 0:04:08.400 EQT responds, which was the largest producer, still is the 0:04:08.480 --> 0:04:12.360 largest producer until this deal closes. How they respond will 0:04:12.400 --> 0:04:16.719 be very important. And Taro and CNX have been relatively 0:04:16.839 --> 0:04:19.480 absent from the M and A game. How they respond 0:04:19.520 --> 0:04:24.839 will be very important as well. So it will likely 0:04:25.000 --> 0:04:28.560 set off a mini way of decisions that many of 0:04:28.600 --> 0:04:31.680 these operators will have to make in order to gain 0:04:31.720 --> 0:04:35.839 that scale. The scale and concentration is very important when 0:04:35.839 --> 0:04:37.880 you're selling a commoditized asset. 0:04:38.560 --> 0:04:41.280 So Vince, I see the stock of Chesapeake Energy is 0:04:41.279 --> 0:04:44.680 actually up about six percent. You don't often or always 0:04:44.680 --> 0:04:47.560 see that when you Acquier makes a deal here because 0:04:47.560 --> 0:04:50.000 there might be some delution concerns. Why do you think 0:04:50.000 --> 0:04:51.719 this stock is up here? Is just a good good 0:04:51.800 --> 0:04:54.720 valuation aside from the strategic side to it. 0:04:56.000 --> 0:05:00.919 I think it's exclusively about the strategic rationale behind the deal. 0:05:01.560 --> 0:05:04.760 And when you think about the twenty twenty five strip, 0:05:05.360 --> 0:05:09.440 things should look better for natural gas, natural gas market, 0:05:09.520 --> 0:05:13.120 natural gas sentiment in general. So I think it's a 0:05:13.240 --> 0:05:16.720 vote of confidence about the deal, and I think it's 0:05:16.720 --> 0:05:19.880 a voted confidence for nat gas going forward. You want 0:05:19.920 --> 0:05:24.719 to have more assets in concentrated hands and more solid hands. 0:05:25.920 --> 0:05:31.000 How fragmented vince Er does this natural gas and still 0:05:31.040 --> 0:05:33.160 remain Are there private players out there that can be 0:05:33.320 --> 0:05:35.360 rolled up? Or are we looking at a handful of 0:05:35.400 --> 0:05:37.960 public companies that just have to figure out who's going 0:05:38.000 --> 0:05:38.479 to go with who? 0:05:39.640 --> 0:05:42.839 Yeah, So if you think about where Chesapeake came from 0:05:42.920 --> 0:05:47.719 and where Southwestern came from, even EQT, you saw public 0:05:48.080 --> 0:05:53.000 buying private as the pe firms monetize their legacy investments 0:05:53.040 --> 0:05:57.039 to regenerate that capital. What we're going to see now, 0:05:57.120 --> 0:06:01.279 I think is still a good amount of public buying private. 0:06:01.520 --> 0:06:04.080 But I think now we're going to see public on 0:06:04.360 --> 0:06:11.479 public mergers, mergers of equals, low premium consolidation as well, 0:06:11.920 --> 0:06:17.760 because I think the next step is investors still want 0:06:17.800 --> 0:06:20.320 to see free cash flow. They want to see the 0:06:20.400 --> 0:06:23.440 return of excess cash. We had all this investment in 0:06:23.520 --> 0:06:27.160 the space during shale one point zero, where a lot 0:06:27.160 --> 0:06:29.760 of capital was sunk in the ground to prove up 0:06:30.040 --> 0:06:33.240 the assets. We now have these assets proved up. It 0:06:33.360 --> 0:06:36.839 is a manufacturing process now, and now we've hit the 0:06:36.880 --> 0:06:40.640 point of maturity where there's not a lot of growth capital. 0:06:40.720 --> 0:06:44.480 So it's really sucking out that excess cash, growing at 0:06:44.520 --> 0:06:48.680 a more modest space, controlling your expenses because you have 0:06:48.839 --> 0:06:52.760 that scale, because you have that concentration, and generating that 0:06:52.839 --> 0:06:56.640 free cash flow that right now in general is in 0:06:56.680 --> 0:06:59.800 the high to high a single digits to low team 0:07:00.400 --> 0:07:03.919 for the industry, and giving back that capital to the 0:07:04.000 --> 0:07:07.920 investor base. That is not really an issue, and a 0:07:07.960 --> 0:07:10.560 lot of the maturities have been pushed out, so leverage 0:07:10.560 --> 0:07:11.600 isn't merely a concern. 0:07:12.440 --> 0:07:15.040 Haven's before you go, I have to ask APA's kal 0:07:15.160 --> 0:07:15.720 on purchase. 0:07:16.440 --> 0:07:17.160 I read j aricle. 0:07:17.200 --> 0:07:18.800 You said, it's not all it's cracked. 0:07:18.640 --> 0:07:18.920 Up to be. 0:07:20.560 --> 0:07:25.600 Yeah. So it's interesting because usually when you consolidate, and 0:07:25.640 --> 0:07:30.160 you consolidate for scale, you are buying up near acreage 0:07:30.440 --> 0:07:34.080 or near assets. In this case, the assets seem to 0:07:34.080 --> 0:07:40.040 be somewhat diffuse from where APA is historically located. So 0:07:40.240 --> 0:07:45.679 I think this that deal was done to generate cash flow. 0:07:45.720 --> 0:07:49.960 As a cash flow bridge for APA to get past 0:07:50.040 --> 0:07:55.920 this period of uncertainty when their longer term, their longer 0:07:55.920 --> 0:07:57.680 cycle assets come online. 0:07:58.280 --> 0:08:00.520 Evin's always going to talk to you. That's a deal 0:08:00.560 --> 0:08:02.720 flow in your space. We appreciate you giving us some 0:08:02.760 --> 0:08:04.760 time here as we try to piece it all together. 0:08:04.880 --> 0:08:09.360 Vince Piazza, he's a senior energy analyst at Bloomberg Intelligence. 0:08:09.920 --> 0:08:13.600 Another deal in the natural gas space, the shale space. 0:08:13.640 --> 0:08:15.880 So we stay on top of it. The good analysts, 0:08:15.920 --> 0:08:17.760 the research channels go and keep on top of it 0:08:17.760 --> 0:08:18.080 as well. 0:08:19.320 --> 0:08:20.520 You're listening to the team. 0:08:20.840 --> 0:08:24.240 Ken's our live program, Bloomberg Markets weekdays at ten am 0:08:24.240 --> 0:08:27.640 Eastern on Bloomberg dot com, the iHeartRadio app and the 0:08:27.680 --> 0:08:30.720 Bloomberg Business app, or listen on demand wherever you get 0:08:30.760 --> 0:08:31.680 your podcasts. 0:08:33.840 --> 0:08:36.640 James Safer joins us here and this is the guy 0:08:36.679 --> 0:08:39.959 to speak to. He, along with Eric baltunis at Bloomberg Intelligence, 0:08:40.200 --> 0:08:45.400 the leading research on ETF's period for as long as 0:08:45.440 --> 0:08:47.480 we've been doing this at Bloomberg Intelligence, these are the 0:08:47.520 --> 0:08:49.360 folks that really are on top of it, and they've 0:08:49.360 --> 0:08:51.959 been on top of this Bitcoin ETF because it's such 0:08:51.960 --> 0:08:54.440 a big deal in the world of ETFs. James, thanks 0:08:54.440 --> 0:08:56.120 so much for joining us. I know you're super busy 0:08:56.160 --> 0:09:00.240 here today. When we have eleven new bitcoin ETFs hit 0:09:00.240 --> 0:09:02.680 the market, I don't know what to look at. Which 0:09:02.679 --> 0:09:04.440 one should I look at? Which ones are important? What 0:09:04.480 --> 0:09:05.360 are you guys looking at? 0:09:05.520 --> 0:09:07.160 So I'm looking at all of them, Okay, I want 0:09:07.200 --> 0:09:09.199 to see how all of them are doing. The thing 0:09:09.280 --> 0:09:11.080 is everyone's going to try to figure out what happened 0:09:11.080 --> 0:09:13.400 with flows right problem is we don't know what's happening 0:09:13.400 --> 0:09:15.480 with flows right now. I'm sure there's some trading desks 0:09:15.480 --> 0:09:18.040 and the authorized participants in the banks, that these brokerages, 0:09:18.440 --> 0:09:20.360 they know what's happening with flows, but we won't see 0:09:20.400 --> 0:09:22.640 it till after market clothes today that said, what we 0:09:22.720 --> 0:09:25.199 can watch is volume, and that's what I'm watching. We're 0:09:25.280 --> 0:09:27.560 right around two billion dollars already and traded in all 0:09:27.600 --> 0:09:31.520 eleven of these ETFs. It's being led by GBDC from Grayscale, 0:09:31.600 --> 0:09:33.440 and then I BIT from black Rock, and then you 0:09:33.440 --> 0:09:36.560 have Fidelity and ARC are following suit. Now I think 0:09:36.679 --> 0:09:38.120 there's no what like I said, there's no way to 0:09:38.160 --> 0:09:40.600 know which way the flows are going in this volume. 0:09:40.679 --> 0:09:43.320 It's significant, this is a huge launch, but I have 0:09:43.360 --> 0:09:44.319 my guesses. 0:09:44.280 --> 0:09:46.160 And the guess is we'll pay for the guests. 0:09:46.200 --> 0:09:50.160 Yeah. Yeah, I'm fairly confident that this money. GBDC, they 0:09:50.200 --> 0:09:52.360 are trading with the tightest spread too. That's something else 0:09:52.400 --> 0:09:54.760 I'm watching, trying to see who's trading the tightest on 0:09:54.800 --> 0:09:57.679 that bidass spread. GBDC is trading very tight, So we're 0:09:57.720 --> 0:09:59.319 most of these other ones, there's no there's no one 0:09:59.320 --> 0:10:01.160 really trading out of line. But I think GVTC is 0:10:01.160 --> 0:10:04.920 seeing significant outflows. I've called for GVTC to see outflows 0:10:04.920 --> 0:10:07.120 in my research because they left their fee at one 0:10:07.120 --> 0:10:09.160 point five percent. All these other guys are at zero, 0:10:09.440 --> 0:10:11.840 So there's significant capital in there. Might be locked up 0:10:11.840 --> 0:10:13.280 with cap gains, but there's a lot of it that's 0:10:13.320 --> 0:10:14.640 going to be leaving because they don't want to be 0:10:14.640 --> 0:10:15.600 paying that fee anymore. 0:10:15.760 --> 0:10:18.280 So how much money are these eleven likely to generate? 0:10:18.320 --> 0:10:21.040 How much money generate is in flows or it generates 0:10:21.080 --> 0:10:21.840 in revenue? 0:10:22.120 --> 0:10:22.280 Yeah? 0:10:23.280 --> 0:10:26.440 Coming in, I mean like we don't. Yeah, Like, are 0:10:26.440 --> 0:10:28.199 they gonna all go out there and start buying bitcoin 0:10:28.280 --> 0:10:28.640 kind of thing? 0:10:29.040 --> 0:10:29.920 Yeah, I mean. 0:10:29.840 --> 0:10:31.599 That's exactly what's happening, right, They are going to be 0:10:31.640 --> 0:10:33.560 They're gonna be buying bitcoin. This money that's coming in. 0:10:33.600 --> 0:10:35.120 It's the question is figuring out how much of it 0:10:35.120 --> 0:10:37.400 is new money buying bitcoin versus shifting around like we're 0:10:37.400 --> 0:10:40.360 seeing likely right now with greyscale, money's pouring out. As 0:10:40.360 --> 0:10:42.960 far as how much money's being made, most the only 0:10:43.000 --> 0:10:45.000 one making real money right now is greys Scale, who's 0:10:45.000 --> 0:10:46.800 are charging I fee, but they're seeing money pour out 0:10:46.840 --> 0:10:48.559 everyone else for the most part, most of them are 0:10:48.559 --> 0:10:51.800 offering zero fee waivers, so it's literally free to hold 0:10:51.800 --> 0:10:54.000 these things for the next six months. So there everyone's 0:10:54.040 --> 0:10:55.960 doing everything they can to get assets for the long 0:10:56.040 --> 0:10:58.600 term play to keep those assets and then earn fees 0:10:58.640 --> 0:11:00.640 on them. And even the fees of the long term 0:11:00.640 --> 0:11:03.600 they're really low. They're competitive with other ETFs in the 0:11:03.679 --> 0:11:04.560 US landscape. 0:11:05.080 --> 0:11:07.439 How big is this for I mean you guys, you 0:11:07.480 --> 0:11:09.800 and Eric and your team, they have a team. I'm like, 0:11:09.840 --> 0:11:12.440 we have to have a team for ETFs and they're like, yeah, yes, 0:11:13.080 --> 0:11:15.080 so we built a team. 0:11:15.600 --> 0:11:16.400 How big is this. 0:11:16.280 --> 0:11:19.600 Bitcoin thing in the overall scheme of kind of ETFs. 0:11:20.120 --> 0:11:22.520 So we we like to look at this and we 0:11:22.640 --> 0:11:26.000 like the media tends to cover like ninety five percent 0:11:26.160 --> 0:11:29.199 of what is in your Sorry, let me restart. 0:11:29.280 --> 0:11:31.079 Yeah, the media tends to look at stuff. 0:11:31.200 --> 0:11:33.240 It's five percent of your portfolio, but the media spends 0:11:33.280 --> 0:11:34.120 ninety five percent of it. 0:11:34.120 --> 0:11:35.720 And that's what's happening here with bitcoin, right. 0:11:35.640 --> 0:11:37.800 Like we think these bitcoin ETFs could get to something 0:11:37.840 --> 0:11:40.760 like one to two percent of overall ETF assets four 0:11:40.840 --> 0:11:43.600 or five years from now crypto ETFs in general. But 0:11:43.840 --> 0:11:46.760 that's it. That said, this is really interesting, it is fascinating. 0:11:46.760 --> 0:11:49.080 There's politics at play, there's a lot of money at play. 0:11:49.280 --> 0:11:50.720 There's a lot of big names at play. I mean 0:11:50.720 --> 0:11:52.840 I just mentioned black Rock my shares in Vesco. 0:11:53.040 --> 0:11:55.199 Well, like one of the things that we've been talking about, 0:11:55.200 --> 0:11:58.439 like gold, how many gold atfs are there? 0:11:58.440 --> 0:11:59.960 I mean gold is gold is gold? 0:12:00.040 --> 0:12:02.560 How he differentiate one ETF versus another? So how many 0:12:02.840 --> 0:12:05.120 goldietfs are there? I don't know the exact number of 0:12:05.120 --> 0:12:07.000 the top of my head. It's somewhere around eight or nine, okay, 0:12:07.040 --> 0:12:07.960 so you'd be surprised. 0:12:08.080 --> 0:12:08.800 And a lot of them. 0:12:08.840 --> 0:12:10.920 So State Street is the main one they offer GLD, 0:12:11.320 --> 0:12:14.520 but Blackrock also one has one IAU and each of 0:12:14.520 --> 0:12:16.520 those have a sibling that charges a quarter of what 0:12:16.559 --> 0:12:20.000 the other one charges. So GLDM mini shares and IAU 0:12:20.200 --> 0:12:23.520 M also mini shares essentially, and they just undercut themselves 0:12:23.559 --> 0:12:25.960 because they have enough liquidity in the other products. And 0:12:25.960 --> 0:12:28.560 then they offer this cheaper portfolio diversifire that people can 0:12:28.640 --> 0:12:30.640 use and only charge like ten bases points to hold it. 0:12:31.080 --> 0:12:36.319 My mind is blown, right, So the SEC approval, this 0:12:36.400 --> 0:12:39.560 is not the SEC giving that, you know, stamp of 0:12:39.559 --> 0:12:40.520 approval to bitcoin. 0:12:40.640 --> 0:12:41.080 Correct? 0:12:41.320 --> 0:12:41.520 Yes? 0:12:41.600 --> 0:12:41.920 Correct? 0:12:41.960 --> 0:12:43.599 I mean if you read the letters from some of 0:12:43.640 --> 0:12:46.480 the Democratic Commissioners yesterday after they approved this thing, and 0:12:47.120 --> 0:12:49.640 Chairman Gary Gensler he kind of approved this thing tongue 0:12:49.640 --> 0:12:51.480 in cheeks that the courts were forcing us. But at 0:12:51.520 --> 0:12:53.559 the end of the day, what they were saying is true. 0:12:53.800 --> 0:12:56.000 It's the reason why we've been saying the SEC shouldn't 0:12:56.000 --> 0:12:58.080 have been denying the Bitcoin ETFs in the most recent 0:12:58.080 --> 0:13:01.560 denials because the SEC is not a merit regulator. Their 0:13:01.640 --> 0:13:03.839 job is not to say whether an investment has merit. 0:13:03.840 --> 0:13:05.840 Their job is to make sure that the proper disclosures 0:13:05.840 --> 0:13:08.640 are made and let investors decide whether it has merits. 0:13:08.640 --> 0:13:10.600 So they aren't supposed to be the ones dictating whether 0:13:10.600 --> 0:13:13.280 there's value here. Let the end investors choose, which is 0:13:13.280 --> 0:13:15.920 what's happening here and why I think it's right that 0:13:15.960 --> 0:13:16.840 these things are now trading. 0:13:16.960 --> 0:13:20.160 So just to be clear, because Rich Truman, my intrepid producer, 0:13:20.280 --> 0:13:23.680 pointed out earlier, what did Gary Ginstler do from a 0:13:23.800 --> 0:13:26.520 vote perspective that Gary Ginster the chairman of the SEC. 0:13:26.679 --> 0:13:28.880 Did he vote for this against us? Did he vote 0:13:28.880 --> 0:13:31.000 for it with like a big asterisk next to it 0:13:31.120 --> 0:13:32.080 or what happened? 0:13:32.120 --> 0:13:33.600 Yeah, I guess the way to think about it what 0:13:33.640 --> 0:13:35.400 he's voted with an asterisk. So the way that the 0:13:35.440 --> 0:13:38.720 SEC is set up is it's by a five member commission, right, 0:13:38.760 --> 0:13:41.400 so typically it's two Democrats, two Republicans and a chairman 0:13:41.800 --> 0:13:44.000 and the person who appoints the chairman as the president. 0:13:44.080 --> 0:13:47.200 So typically, right now, it's run by the Democrats. Okay, 0:13:47.240 --> 0:13:50.200 so what happened here is the two Democrats dissented on 0:13:50.240 --> 0:13:52.959 this decision, the two Republicans agreed with it, and Gary 0:13:52.960 --> 0:13:55.160 Gensler was the deciding vote that got this pushed through. 0:13:55.600 --> 0:13:57.000 I think it was all a political move. 0:13:57.000 --> 0:13:58.560 The Democrats didn't want to have to do this, They 0:13:58.600 --> 0:14:00.680 didn't really have much of a choice as far as unconcerned, 0:14:00.960 --> 0:14:03.200 so by Gary being the siding vote saying yeah, I 0:14:03.240 --> 0:14:04.720 know we have to do this based in the courts 0:14:04.720 --> 0:14:06.440 and these other things, but we really don't like it. 0:14:06.480 --> 0:14:07.160 We didn't want to do it. 0:14:07.200 --> 0:14:09.280 I hate to get into politics when we're talking money, 0:14:09.280 --> 0:14:11.960 which is my preferred thing to talk about. But why 0:14:11.960 --> 0:14:13.880 would the Democrats not want this? 0:14:14.360 --> 0:14:14.600 Yeah? 0:14:14.600 --> 0:14:17.199 They, I mean Elizabeth Warren specifically is since she's raising 0:14:17.200 --> 0:14:19.280 an anti crypto army, she hates that. 0:14:19.320 --> 0:14:21.800 She hates the cryptocrowd. I mean, I understand some of it. 0:14:21.840 --> 0:14:23.800 There's been a lot of fraud, a lot of manipulation, 0:14:23.840 --> 0:14:26.080 a lot of bad okay bad at space, So I 0:14:26.080 --> 0:14:27.880 get why they don't like it, but that's not the 0:14:28.040 --> 0:14:30.680 entire space. And like I said, the SEC shouldn't be 0:14:30.720 --> 0:14:32.880 a merit regular that they shouldn't be deciding whether there's 0:14:32.960 --> 0:14:34.480 merit and an investment. They should worry. 0:14:34.520 --> 0:14:37.800 The SEC was also saying we regulate securities and we 0:14:37.800 --> 0:14:40.240 don't think this is a security right. It's also one 0:14:40.240 --> 0:14:41.520 of their arguments. 0:14:41.000 --> 0:14:42.920 Correct, but we have I mean, gold is not a 0:14:42.920 --> 0:14:45.560 security either, it's a commodity. So bitcoin technically is going 0:14:45.600 --> 0:14:48.160 to be regulated, is regulard by the CFTC. But still 0:14:48.200 --> 0:14:51.120 the bitcoin ETFs are regulated by the SEC because ETFs 0:14:51.120 --> 0:14:52.200 are securities. 0:14:51.760 --> 0:14:53.080 Which brings me to another point. 0:14:53.120 --> 0:14:54.760 One of the reasons why these are so important is 0:14:54.800 --> 0:14:57.880 many of these institutions they can't hold anything but securities 0:14:57.960 --> 0:14:59.200 or bonds, what have you. 0:14:59.280 --> 0:15:00.760 This puts them in rapper. 0:15:00.440 --> 0:15:03.040 That now institutions, advisors and more people can can play 0:15:03.080 --> 0:15:05.120 with bitpoint, they can't touch the underlying stuff for the 0:15:05.160 --> 0:15:05.680 most part. 0:15:05.760 --> 0:15:07.880 All right, So you and Eric are gonna come out 0:15:07.880 --> 0:15:10.640 with some research tonight after the close that I have 0:15:11.160 --> 0:15:14.080 what what are you guys like really tracking what's going 0:15:14.120 --> 0:15:17.080 to be? I don't know what what's your call here? 0:15:17.120 --> 0:15:18.960 We're ten forty eight am. It's just been a good 0:15:19.040 --> 0:15:21.040 day for DTF biz and crypto. 0:15:21.160 --> 0:15:22.360 It's been an obscenely good day. 0:15:22.440 --> 0:15:24.440 I mean, we're probably I mean I haven't been at 0:15:24.440 --> 0:15:25.840 my desk for a while looking at the volumes, but 0:15:25.840 --> 0:15:27.840 I'm guessing we're over two billion in trading volume at 0:15:27.840 --> 0:15:30.040 this point. I mean, that is a monster day. That's 0:15:30.160 --> 0:15:31.200 not something you really. 0:15:31.000 --> 0:15:33.880 That's a monster day for an ETF launch kind of 0:15:33.880 --> 0:15:34.920 how you're phrasing it. 0:15:34.960 --> 0:15:38.280 Yes, exactly, it even still like for a brand new ETF. 0:15:38.280 --> 0:15:40.120 It's it's exceptionally well. I mean, even if you take 0:15:40.160 --> 0:15:42.920 GBTC out which is trust that was trading over the 0:15:42.920 --> 0:15:45.920 counter is now a ETF. These are still having very 0:15:45.920 --> 0:15:48.480 big trading days. Like even if these things were only 0:15:48.480 --> 0:15:51.360 trading this number two billion for the entire day after 0:15:51.400 --> 0:15:54.400 we take out Gradescale, I would say that's a successful day. 0:15:54.440 --> 0:15:56.120 I said, if they get over over a billion, over 0:15:56.120 --> 0:15:58.440 two billion, I think that's a pretty successful day. 0:15:58.680 --> 0:16:01.520 We're only uh, we're only an hour and change into 0:16:01.560 --> 0:16:02.400 this day, so all. 0:16:02.320 --> 0:16:04.000 Right, see how it goes. All right, we'll follow your 0:16:04.040 --> 0:16:07.760 research folks, big on the terminal for terminal users, get 0:16:07.760 --> 0:16:11.200 the research all on the EETF business James Seifert ETF 0:16:11.200 --> 0:16:13.480 research channels for Bloomberg Intelligence. Thanks for taking the time, 0:16:13.520 --> 0:16:17.840 but coming into our studio again. Some big ones I'm following, Grayscale, 0:16:17.840 --> 0:16:22.960 Bitcoin Trust, GBTC, the I shares one ib it. That's 0:16:22.960 --> 0:16:23.560 what I'm looking at. 0:16:23.720 --> 0:16:24.440 This is Bloomberg. 0:16:24.600 --> 0:16:27.680 You're listening to the tape catch are live program Bloomberg 0:16:27.720 --> 0:16:31.320 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:16:31.360 --> 0:16:33.400 tune in app, Bloomberg dot com. 0:16:33.160 --> 0:16:34.600 And the Bloomberg Business app. 0:16:34.640 --> 0:16:37.440 You can also listen live on Amazon Alexa from our 0:16:37.480 --> 0:16:42.440 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:16:43.800 --> 0:16:45.680 Let's talk about this market here. We're just talking with 0:16:45.760 --> 0:16:48.280 Jess mettin there, but let's think about kind of where 0:16:48.280 --> 0:16:50.480 we go in twenty twenty four after that stellar you know, 0:16:50.560 --> 0:16:52.160 ten eleven week run there. At the end of twenty 0:16:52.200 --> 0:16:54.960 twenty three, we got a professional in the Bloomberg Interactive 0:16:54.960 --> 0:16:58.160 Broker studio. Joe Mazzoli's a managing director of trader Education 0:16:58.760 --> 0:17:03.080 at Charles Schwab. Joe, again, that last finish we had 0:17:03.120 --> 0:17:04.880 there in twenty twenty three, I haven't seen anything. I've 0:17:04.880 --> 0:17:06.480 been doing this a long time. I haven't seen anything 0:17:06.520 --> 0:17:08.879 like that in a while. What did you guys at 0:17:08.920 --> 0:17:11.679 Schwab make of that performance? You're so both in the 0:17:11.680 --> 0:17:13.720 equity markets and in the fixed income market. 0:17:14.119 --> 0:17:15.919 You know, for me, there's one word rotation. 0:17:16.840 --> 0:17:20.960 I think that that was a big change from what 0:17:21.040 --> 0:17:23.720 we saw basically all at twenty twenty three. When you 0:17:23.720 --> 0:17:26.760 think about the fact that in March of twenty twenty 0:17:26.760 --> 0:17:29.480 three yet you know, the financial meltdown if you will, 0:17:29.920 --> 0:17:33.040 that's when megacap just really caught a bit right. Everybody said, 0:17:33.080 --> 0:17:35.960 we want to move into companies that have high free 0:17:35.960 --> 0:17:39.000 cash flow. We feel a little bit more comfortable with that. 0:17:39.040 --> 0:17:41.240 I mean people are looking at these megacaps as almost 0:17:41.240 --> 0:17:42.760 like a I don't want to say a hedge, but 0:17:42.800 --> 0:17:45.040 maybe a safe haven. And then as you get towards 0:17:45.080 --> 0:17:47.480 the end of the year, what happens. You get a 0:17:48.080 --> 0:17:51.119 dubbish fed if you will, you get CPI that's come 0:17:51.160 --> 0:17:53.200 down quite a bit, and then people say, hey, we 0:17:53.600 --> 0:17:56.960 can feel more comfortable rolling back into maybe some of 0:17:57.000 --> 0:17:59.959 the sectors that hadn't performed as well. And that's exactly 0:18:00.320 --> 0:18:01.560 what we saw from our clients. 0:18:01.960 --> 0:18:04.680 Now, new Year, new things that you guys are launching. 0:18:04.880 --> 0:18:07.600 I want to get into that Schwab Trading Activity index. 0:18:07.720 --> 0:18:09.760 So what exactly does this offer? 0:18:09.840 --> 0:18:11.800 What data comes out for December? 0:18:12.080 --> 0:18:14.320 Yeah, it's a it's a cool name, stacks Y, right, 0:18:14.320 --> 0:18:15.760 people remember that one, stacks. 0:18:15.800 --> 0:18:16.600 I like that one. 0:18:17.320 --> 0:18:21.040 Basically, stacks is it's a behavioral index, right. So we're 0:18:21.040 --> 0:18:24.040 looking at kind of what our clients are doing. They're 0:18:24.080 --> 0:18:27.560 trading activity in their accounts. So what's interesting is we 0:18:27.640 --> 0:18:29.640 use like a you know, we have millions of clients, right, 0:18:29.880 --> 0:18:31.760 so we look at a sample size and we say 0:18:31.800 --> 0:18:33.920 where are the net buys versus what are the nets cells? 0:18:34.000 --> 0:18:36.600