Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Katie Greifeld, you look
Speaker 1: a little bit shell shocked. You're a cross asset reporter,
Speaker 1: and I know what asset you're focused on right now?
Speaker 1: Which one crypto? Oh my god, I am living. Am
Speaker 1: I shell shocked to you? She's like glowing. It's it's
Speaker 1: a it's a it's a look. I will say that
Speaker 1: my heart is pounding. Uh. This is pretty enormous news,
Speaker 1: profound implications for the crypto industry and what it looks
Speaker 1: like going forward. It should be right, there should be
Speaker 1: profound implications for the asset class. But I don't really
Speaker 1: see bitcoin moving that much. It is amazing that we're
Speaker 1: looking at bitcoin almost around seventeen thousand and dollars a coin.
Speaker 1: I don't have a good answer for you, but I
Speaker 1: see your point. Did I tell you my Lehman Brothers analogy.
Speaker 1: I want to hear it again. So first of all,
Speaker 1: I don't know you're probably the only person in the building.
Speaker 1: I haven't told this, but back in September eight, I
Speaker 1: got off a plane from Germany and I turned on
Speaker 1: my BlackBerry. Everybody on the plane turned on his or
Speaker 1: her blackberries, and we all were shocked that Lehman Brothers
Speaker 1: had gone under. Now, the same thing happened to me
Speaker 1: on Sunday or sorry, on Tuesday. Tuesday night, I got
Speaker 1: in from I was in Indonesia for a few weeks.
Speaker 1: I turned on my iPhone this time because you know,
Speaker 1: my BlackBerry doesn't work anymore, and I find out that
Speaker 1: f t X is going down. Shocked again. But the
Speaker 1: thing is just like back when Lehman Brothers failed, there
Speaker 1: wasn't a tremendous drop in the value of the dollar.
Speaker 1: Now f t X is failing, there's not a tremendous
Speaker 1: drop in the value of bitcoin. You see, we have
Speaker 1: to separate. Maybe Mattie's stop getting off plane. Yeah exactly.
Speaker 1: I mean, you even look at the likes of Salona,
Speaker 1: which is really the token to watch here. When you
Speaker 1: think about the Salona blockchain and what a big back
Speaker 1: or SPF and why f T that token to watch
Speaker 1: because f T T I mean, if you have brought
Speaker 1: them down, like the magnitude of the number of people
Speaker 1: invested Salana, Definitely there's much more wealth at stake in
Speaker 1: Salana than there is an FTT at this point. But anyway,
Speaker 1: my point being that if you look at uh Salana,
Speaker 1: it's I mean, it's down significantly over nine percent, but
Speaker 1: it was down much more about half an hour ago,
Speaker 1: so we'll see. I mean, a lot of bad news
Speaker 1: is already priced in. I would agree with you that
Speaker 1: seventeen thousand dollars for bitcoin in the wake of this
Speaker 1: news does seem a little bit on intuitive, just on
Speaker 1: a numbers basis. But again, you think about the tremendous
Speaker 1: draw down already in the space, there's a lot of
Speaker 1: bad news in there. Let's bring in our other roundtable
Speaker 1: guest here, Cameron Christ, also known as Macroman. He writes
Speaker 1: a Macroman column for for Bloomberg as well as the
Speaker 1: macro strategists. Cam put this into the perspective of someone
Speaker 1: who perhaps isn't a crypto fanatic. How much of your
Speaker 1: trad fight take Oh my god? Well, actually, though, what
Speaker 1: is your traditional finance take what is the contagion effect
Speaker 1: here into the broader markets. I think it's probably relatively limited.
Speaker 1: I mean, listen, crypto gets a lot of attention and
Speaker 1: it's full of a lot of loud mouth, but uh listen,
Speaker 1: at its peak, the market cap of crypto is what
Speaker 1: about three trillion UM and now it's down to whatever
Speaker 1: eight million or nine hundred million or whatever it is,
Speaker 1: uh billion. Excuse me, um uh you can explain. I
Speaker 1: mean that basically matches the combined market cap loss of
Speaker 1: like Amazon, Meta and Tesla over the over the same period,
Speaker 1: so just three companies have lost as much money for
Speaker 1: their investors. There's all of this crypto stuff. Now you
Speaker 1: could argue that crypto is more broadly uh owned by
Speaker 1: retail who have levered positions, and yeah, that's right. So
Speaker 1: obviously for an individual it might matter more. But on
Speaker 1: a on a on an aggregate basis, um the the
Speaker 1: only real threat I think it's some sort of transmission
Speaker 1: from crypto to to the more traditional um uh financial system.
Speaker 1: And that would be a case if a big bank,
Speaker 1: for example, had uh massive exposure to fpx uh and
Speaker 1: it was suddenly looking at a five or a ten
Speaker 1: billion dollar hole. Um, I don't think that's the case. So, um,
Speaker 1: you know, I'm sorry to be skeptical, and I don't
Speaker 1: mean to dance on on the financial grades of people
Speaker 1: who have been suffering through this. But you know, when
Speaker 1: you play stupid games, you win stupid prizes. And if
Speaker 1: you buy you know, if you buy stuff on a
Speaker 1: joke because someone tweets out a rocketship emoji, if that's
Speaker 1: your investment case, this is kind of natural. Well, I
Speaker 1: mean you have We should all be skeptical, right, that's
Speaker 1: our job as journalists, but we also have to differentiate.
Speaker 1: There's a difference between bitcoin and doge coin, right yeah, yeah, sure,
Speaker 1: But I mean what's the you know, I'm I'm all
Speaker 1: enough to remember five years ago people are talking about bitcoin.
Speaker 1: You know, the the US case for bitcoin was based
Speaker 1: on blockchain applications, Right, yeah, I think we can all
Speaker 1: agree that that that horace has bolted. No one can
Speaker 1: seriously claim that the bitcoin blockchain is the reason that
Speaker 1: people buy bitcoin. Well, you would back against you and
Speaker 1: I are the only ones who are old enough to
Speaker 1: remember five years ago. Well no, but if you're going
Speaker 1: to use the blockchain, bitcoin is incredibly uh inefficient. You're right,
Speaker 1: so people would rather use the blockchain of ethereum, for example,
Speaker 1: to build unless I mean I've asked people this question
Speaker 1: all the time. Why doesn't bitcoin, for example, just go
Speaker 1: to proof of stake if you're so worried about the
Speaker 1: energy consumption. It's because the blockchain of bitcoin, the o G,
Speaker 1: is supposed to be more secure. And I mean no, no, no,
Speaker 1: proof proof of work is far more secure than proof
Speaker 1: of sake. The reason is they want to restrict supply
Speaker 1: because the people who already own it have a vested
Speaker 1: interest in seeing the price goes up, go up. I mean,
Speaker 1: I mean, the most of this stuff, the primary use
Speaker 1: case is to enrich people who are early adopters end
Speaker 1: of uh. And that is not a particularly productive use
Speaker 1: of financial capital or intellectual capital, frankly, um. And you
Speaker 1: can see the kind of caliber that the people that
Speaker 1: it's attracted. I mean, I don't know if you've seen this,
Speaker 1: and I mean, is this a comment on Michael nova
Speaker 1: Grant specifically? Who are you talking about? I'm talking about
Speaker 1: you know, this bankman, freed guy. Have you seen this
Speaker 1: video clip of this this woman who is the CEO
Speaker 1: of Alameda basically a couple, couple of people basically saying,
Speaker 1: stop losses on an effective risk management tool. Oh really,
Speaker 1: I mean this is from on one who had an
Speaker 1: experience of what a year and a half is a
Speaker 1: junior and another hedge fund before she assumed this role
Speaker 1: of significant responsibility, and she doesn't understand the basic principles
Speaker 1: of risk management. I mean, it's a it's a joke, uh,
Speaker 1: and it it in my opinion, it's the natural outcome
Speaker 1: of too much free money, too much liquidity that's been
Speaker 1: pumped into the global financial system for too long, and
Speaker 1: it's flown to it's flowed to these frankly ludicrous uh endeavors.
Speaker 1: I mean, you've no doubt seen this, this whole thing
Speaker 1: about these people at Sequoia being blown away by by
Speaker 1: by old Sam while he's playing a video game. I mean,
Speaker 1: give me a break. I think it is an in
Speaker 1: fun thought exercise. I think, would this all be happening
Speaker 1: if the FED weren't hiking our faces off right now?
Speaker 1: I mean, if the line was going up, I think
Speaker 1: that the business of f TX perhaps we wouldn't be
Speaker 1: having But you're saying this happened because the FED was
Speaker 1: cutting had cut too, so low, and because we were
Speaker 1: spending trillions and trillions of dollars in fiscal's just sort
Speaker 1: of passing it out with a helicopter. Yeah, and and
Speaker 1: and you know, the the genius quote unquote geniuses who
Speaker 1: have disrupted things. I mean, I thought this was supposed
Speaker 1: to be decentralized finance, and yet we, funny enough, end
Speaker 1: up with a huge concentration of risk and wealth in
Speaker 1: the hands of a few people and a few institutions
Speaker 1: who were committing the same mistakes that quote unquote Track
Speaker 1: five have been making over three or four hundred years,
Speaker 1: and have not entirely learned their lesson, but learned their
Speaker 1: lesson to some extent, or at least had regulation to
Speaker 1: prevent the most egregious of these, uh of these, you know,
Speaker 1: these misdeeds, I mean, taking client money and spending it
Speaker 1: on something else. It's just you can't do it. And
Speaker 1: I think these that's under investigation right now. Just to
Speaker 1: be clear, we're not exactly that allegation. But the I mean,
Speaker 1: the the in my mind, the appropriate analog is not Lehman,
Speaker 1: because none of this crypto stuff is systemically important enough,
Speaker 1: as I said, to be to be to be Lehman.
Speaker 1: But it it's more like I'm f Global, you know
Speaker 1: where John Corzine took took client money and bought two
Speaker 1: year BTPs uh which went horribly wrong and MS global
Speaker 1: blew up. Yeah. I mean, I don't think the Lehman
Speaker 1: analogy is not that not that this is a Lehman
Speaker 1: Brothers moment for the market at large, but just for
Speaker 1: the crypto industry. Um. The concern is this has shaken
Speaker 1: confidence so much in what you clearly view as a
Speaker 1: con game. Um, and now they're going to have to
Speaker 1: do something about it to try and get well. Then
Speaker 1: the irony is that the whole, the whole philosophy behind
Speaker 1: crypto is trust list finance, right, and yet how much
Speaker 1: trust was implicitly placed in these centralized exchanges which are
Speaker 1: actually half exchange and half broker. I mean, I I
Speaker 1: you know, if if the whole point is that you
Speaker 1: get get out of traditional finance, and yet you you
Speaker 1: to introduce counterparty risk to these centralized exchanges, it's kind
Speaker 1: of counter to the underlying ethos, isn't it. It's a
Speaker 1: good question, I mean, to your point that it's supposed
Speaker 1: to be trust less when you introduce centralization that trustlessness
Speaker 1: goes away. It's not the same as trusting a piece
Speaker 1: of code, trusting a smart contract to execute. You actually
Speaker 1: have to trust other humans. Again, I think you also
Speaker 1: have to differentiate between the asset itself and the businesses
Speaker 1: that now have been built around it. Um. Yeah, But
Speaker 1: I would say this, to deny the likelihood that you're
Speaker 1: going to get centralization or a concentration of of ownership
Speaker 1: and wealth in some large institutions is to deny human nature.
Speaker 1: And I mean it reminds me a bit of the
Speaker 1: m m T. People would say, well, uh, if we
Speaker 1: get inflation because of m m T, WHI all the
Speaker 1: government has to do is tighten fiscal policy radically and
Speaker 1: now I'll get rid of the inflation. Okay, fine, but
Speaker 1: in what real world is uh? Is a government going
Speaker 1: to tighten fiscal policy when when inflation becomes problematic and
Speaker 1: and starts to hit growth. I mean maybe the UK
Speaker 1: is going to do it, uh, ironically enough after the
Speaker 1: loose trust budget blew up. But I mean you really
Speaker 1: think that the US government is going to engage in
Speaker 1: an explicit and massive fiscal tightening for the sole purpose
Speaker 1: of controlling inflation. Of course, it's politically. I mean, it's
Speaker 1: just that's not the way human nature works. Are you
Speaker 1: surprised though that? Are you surprised in that case that
Speaker 1: even after this, um, we've you know, the tide has
Speaker 1: gone out and we've seen the SPF is not wearing
Speaker 1: a bathing suit. Nonetheless, one bitcoin is one one bitcoin
Speaker 1: is still worth seventeen thousand dollars um. It's a lot
Speaker 1: of money. I mean, it's still it a lot more
Speaker 1: than it even costs to mind a bitcoin. Uh. Yeah,
Speaker 1: although I gather that calculus has narrowed quite quite substantially. Sure,
Speaker 1: but it's well, just it's a lot of money for
Speaker 1: a line of code that the only thing really that
Speaker 1: gives it value is the belief of the group that
Speaker 1: it has value even beyond something like gold, and certainly
Speaker 1: far beyond something like the dollar. Yeah. I mean listen, if, if, if,
Speaker 1: even after all this, uh, there is a significant cohort
Speaker 1: of people that collectively agree that the Emperor's new code
Speaker 1: is actually still pretty stunning, then it is pretty stunning
Speaker 1: unless you know, a critical mass of people say, actually,
Speaker 1: he's not wearing it at all. He's got thank you,
Speaker 1: he's he's wearing you know, he doesn't have the bathing
Speaker 1: suit on um to to mix metaphors. UM, but it
Speaker 1: listens the entire crypto And again I think all comes razor.
Speaker 1: You know, why do you see crypto doing what it's
Speaker 1: doing today? Why do you see people saying what they're saying.
Speaker 1: It's because they benefit UM, and there's invested interest in
Speaker 1: keeping the ball in the air UH as as high
Speaker 1: as possible. I mean, like a micro strategy for example.
Speaker 1: Obviously they've pivoted their entire company to being essentially a
Speaker 1: bitcoin etf And I mean I've looked at some of
Speaker 1: this Sailor guys tweets. It's I mean the guy, the
Speaker 1: guy spends all day tweeting absolute inanities about about about
Speaker 1: crypto that sound deep but are actually complete and pain
Speaker 1: and nonsense. UM. But hey, he's trying to drum up
Speaker 1: an ongoing narrative that this is where you want to
Speaker 1: be well and a lot of Wall Street has joined
Speaker 1: in on that, right, I mean otherwise, absolutely absolutely UM.
Speaker 1: But obviously again, anyone what's a passing history of traditional
Speaker 1: finance can tell you that just because Walls Freed embraces
Speaker 1: a certain investment trend doesn't mean that it's useful or
Speaker 1: profitable in the long run. Funny enough, on my YouTube algorithm,
Speaker 1: I seem to be getting a lot of clips of
Speaker 1: the big short these days, which, uh, I don't know
Speaker 1: it is probably says something about karma. I guess in
Speaker 1: the context of what's going on in the in the cryptospec.
Speaker 1: So as an investor, then, I mean, with this kind
Speaker 1: of skepticism, do you just stay completely out or do
Speaker 1: you see a way that an investor could get involved
Speaker 1: in this still for some kind of healthy return. Well,
Speaker 1: I mean, obviously I'm not the right person to ask
Speaker 1: which of these little digital tulips is the right one
Speaker 1: to uh, is the right one to to to purchase?
Speaker 1: Or how you should trade that? UM, what I will
Speaker 1: say is is that there's one sort of universal truth,
Speaker 1: which is the people that get rich in a gold mine,
Speaker 1: in a gold rush typically the people that sell the
Speaker 1: picks and jubbles. Right. Well, I I want to go
Speaker 1: back to the um, to the blockchain, because that seems
Speaker 1: to be the beginning, what was the beginning of what
Speaker 1: drew Wall Street into the crypto area, And it still
Speaker 1: makes sense that you could build a lot of useful
Speaker 1: products on the blockchain. You could keep deeds of ownership
Speaker 1: on it or UM you know, driver's licenses, etcetera. I've
Speaker 1: never said why that means you would want to bid
Speaker 1: up the token though. What do you think about building
Speaker 1: businesses or products applications on the blockchain? Well, I mean, listen,
Speaker 1: I I think, again, with with being sort of a
Speaker 1: moderately informed lay person, I would suggest to you that
Speaker 1: the vast majority of use cases for the blockchain itself
Speaker 1: are simply replicating databases. Uh and uh you can you
Speaker 1: can achieve just as much with a standard SQL database
Speaker 1: or whatever as you can with the blockchain. I mean,
Speaker 1: is it you really need to have a driver's life
Speaker 1: is on the blockchain rather than a standard database. I mean,
Speaker 1: what's the marginal what's the marginal utility of that? I
Speaker 1: was just suggesting that, No, no, no, but you know,
Speaker 1: we're onions or or what you know whatever. I think
Speaker 1: there's a pretty limited, uh marginal utility for putting them
Speaker 1: in the blockchain rather than current UM database storage. Uh.
Speaker 1: You know, there are exceptions, and I will I will,
Speaker 1: I will concede that. But again, if you're going to
Speaker 1: use it for the express purpose of the blockchain, surely
Speaker 1: the most efficiently run blockchain is the one you want
Speaker 1: to use, not the one that just has the little
Speaker 1: the little widget that goes up the highest and price.
Speaker 1: But obviously Wallace read makes money from the widget going
Speaker 1: up in price rather than the underlying blockchain technology. So
Speaker 1: naturally that's where grabbing, that's where attention is focused. I
Speaker 1: jump in here because this is something I think about
Speaker 1: all the time. To Camp's point that it's just a database,
Speaker 1: sometimes I think about what the ambition of crypto is this,
Speaker 1: This is something I thought about all the time while
Speaker 1: reading at Levine's crypto piece, which came out two weeks ago.
Speaker 1: It just feels like if you're trying to recreate a
Speaker 1: parallel financial system that is more efficient, there is more secure.
Speaker 1: Uh that is, to get back to what we're talking
Speaker 1: about trust lists, is can that be enough? Why shouldn't
Speaker 1: that be enough if we make the financial system a
Speaker 1: little bit more efficient? I think it's when you get
Speaker 1: into the extreme speculation that we've seen in the crypto space,
Speaker 1: when you think about, you know, creating a new world
Speaker 1: reserve currency that it just feels like we've sort of
Speaker 1: lost but could be actually a really cool use case. Yeah,
Speaker 1: But but again I would say that is sort of
Speaker 1: an inevitable product of human nature. Right. If you include
Speaker 1: a a financial instrument that that floats in price, people
Speaker 1: are going to speculate on it. And I mean a
Speaker 1: lot of my old friends from foreign exchange UH over
Speaker 1: the last decade have pivoted to crypto because frankly, you
Speaker 1: wanna this year is a slightly different, but you know
Speaker 1: for years, you know, do you want to trade the
Speaker 1: euro which trades on a sixth ball and maybe moves
Speaker 1: thirty pips today, or do you want to trade bitcoin
Speaker 1: that moves ten percent a day? I mean, where do
Speaker 1: you think you're going to make more money? Where the
Speaker 1: spreads wider um, where the fees bigger? Where is there
Speaker 1: more juice the thing that moves a lot and is
Speaker 1: much less efficient. So naturally that's what That's where Wall
Speaker 1: Street is focused its attention on part of the whole
Speaker 1: crypto sphere, the bit with the biggest, fattest, juiciest margins.
Speaker 1: And I mean it is a fascinating market structure experiment.
Speaker 1: Who knows where it goes from here? But I was
Speaker 1: actually at crypto Twitter drinks last night in a wine cellar.
Speaker 1: There were a lot of sad people in that room,
Speaker 1: but a lot of them can because of those two products.
Speaker 1: I mean, you've already heard about the skepticism that Cameron
Speaker 1: has for crypto, and I can unload on Twitter. I
Speaker 1: can't believe you're still participating in that. By the way,
Speaker 1: do you feel like it's in a way it's immoral?
Speaker 1: Do I feel that Twitter, the social media platform is immoral? Yes? No,
Speaker 1: I mean most social media platforms are responsible only for
Speaker 1: negativity in this world. Feels like a deep seated issue.
Speaker 1: But I would say that a lot of the people
Speaker 1: in that room last night came from high frequency traders.
Speaker 1: They came from Wall Street Wall Street traditional finance roles
Speaker 1: simply because I mean, like Camp said, there's a lot
Speaker 1: of juicy spreads there. There's a lot of money to
Speaker 1: be made. But also it's interesting to a lot of
Speaker 1: these people to be part of building an asset class
Speaker 1: in real time. I mean, how often I wasn't around
Speaker 1: when junk bond trading became a thing. Where it goes
Speaker 1: from here is an open question, obviously. I want to
Speaker 1: Camp Cameron. I want to you to apply your healthy
Speaker 1: skepticism to social media. What do you think about social media?
Speaker 1: Just for a second, before I get to cp I
Speaker 1: and the markets. Oh, I mean, and I think it's
Speaker 1: the cancer on society by and large. Um, I think it. Uh.
Speaker 1: It exposes and amplifies the worst of human nature unfortunately. UM.
Speaker 1: And it's it's it's it enforces what I termed sort
Speaker 1: of the the Gresham's law of discourse. Gresham's law of
Speaker 1: being a sort of a seventeenth century Montary theory back
Speaker 1: when money was actual coins, that bad money drives out
Speaker 1: good in the sense, if you've got a clip coin
Speaker 1: or a real full silver coin, you're gonna spend the
Speaker 1: clip coin and keep the silver coin, right. Uh. Social
Speaker 1: media essentially drives out reasonable opinion, and it encourages the
Speaker 1: use of outrage, UH, conflict, entrepreneurship, UM, propaganda, this this
Speaker 1: sort of stuff which I think is not beneficial to
Speaker 1: a well functioning UH society. I can't disagree outrage gets rewarded.
Speaker 1: I can't disagree it outrages me. I want to ask
Speaker 1: you about UM C p I and the incredible run
Speaker 1: in markets. Yesterday, Valerie Title, a producer of ours out
Speaker 1: of London, pointed out that we haven't seen a move
Speaker 1: that big since the US government dumped two trillion dollars
Speaker 1: of stimulus into the system. Is that Does that make
Speaker 1: sense to you that CPI coming in at seven point
Speaker 1: seven percent instead of seven point nine percent is enough
Speaker 1: to drive a five and a half percent gain on
Speaker 1: the SMPN one day. Um well no, obviously, um we
Speaker 1: had a similar downside miss on CPI in reported in
Speaker 1: August and obviously we didn't see anything like that kind
Speaker 1: of that kind of move. Let's bring in Jay Hatfield
Speaker 1: right now, CEO and founder over an Infrastructure Capital Advisers.
Speaker 1: Um G. Great to have you in the studio after
Speaker 1: an unbelievable rally in stocks yesterday, um all driven by
Speaker 1: a cp I print that was just barely under expectations.
Speaker 1: What do you think about it? Thanks for having me
Speaker 1: on that. We actually have been a pretty optimistic about
Speaker 1: inflation and particularly next quarter when we start to lap
Speaker 1: the energy price spike, so we were not too surprised,
Speaker 1: but we're worried that it would take a while because
Speaker 1: CPI does have a pretty big lag. So that's why
Speaker 1: um uh, you know, we think that the market really
Speaker 1: took off like a rocket because it's not just this
Speaker 1: CPI report, but particularly it was we lap through that
Speaker 1: energy crisis where CPI is likely to know really decelerate. Well,
Speaker 1: let's bring in Joe Meyer, the founder CEO at Meyer Capital.
Speaker 1: I'd like to get your take as well on the
Speaker 1: By the way, a five point three percent rally yesterday
Speaker 1: and we're about half a percent today. What's your take.
Speaker 1: Thank creating Matt, thanks again for having me on Jane
Speaker 1: I speech as well. You know, I think that is
Speaker 1: as you take a look at the rally, mostly in
Speaker 1: technology stocks, people understand the importance of automation and what
Speaker 1: technology is going to play for us in the future,
Speaker 1: and that's that's really what we're excited about and investing
Speaker 1: in heavily. And I think that the more you leverage technology,
Speaker 1: the more you're going to see people getting in from
Speaker 1: the sidelines and jumping onto the technology bandwagon, which I
Speaker 1: think is critical to get leverage, which is what's needed
Speaker 1: to um take advantage of these challenging markets. By the way,
Speaker 1: before we go any further on the market discussion, I
Speaker 1: want to say thank you for your service. Joe served
Speaker 1: in the U. S. Army. He was a major and
Speaker 1: I was thinking about this this morning. The bond market
Speaker 1: honors our veterans with a holiday the New York Stock
Speaker 1: Exchange and the equities markets days open, it seems almost
Speaker 1: like they don't care. Do you take offense to that
Speaker 1: in anyway, Joe, Well, Matt, thank you very much. You know,
Speaker 1: one of the things I think that's important on Veterans
Speaker 1: Day is it is great that we honor the veterans.
Speaker 1: It's up to folks how they want to honor it.
Speaker 1: But more importantly, I think it's a families of veterans
Speaker 1: who also deserve a lot of respect and honor because
Speaker 1: they put up with a lot of unknowns, and I
Speaker 1: think we need to remember that on these days too.
Speaker 1: But more importantly, know whether the bond market honors or
Speaker 1: the market doesn't. To me, it's it's it's a chance
Speaker 1: at least say thanks to all the veterans who have
Speaker 1: served in all their families. So that's kind of my
Speaker 1: pot process on that. Yeah, I'm being I was being
Speaker 1: a little ton of cheek about the market. I do
Speaker 1: think it's important to honor our veterans. And I come
Speaker 1: from a family military family, and you know, sometimes um
Speaker 1: they do things for the country that not everybody else
Speaker 1: is willing to do. So thank you very much for that.
Speaker 1: Let's get back to our talk on the markets and
Speaker 1: JAU some of the e t F you run in
Speaker 1: for cap Equity Income Fund MLB e t F preferred
Speaker 1: e t F. The latter to me is pretty interesting
Speaker 1: right now, especially in this high rate environment, and maybe
Speaker 1: they're going to continue to go even higher. How do
Speaker 1: you think about real estate investment and reads specifically in
Speaker 1: this in this environment, Well, we think, Matt, that there
Speaker 1: significantly undervalued. We don't, but you're correct that if rates
Speaker 1: just keep going higher and higher higher, they valuations will
Speaker 1: go down. But what a lot of investors gonna appreciate
Speaker 1: is that's true of all asset classes, not just tech stocks.
Speaker 1: All stocks have very long duration. So that's why you
Speaker 1: really saw this huge down draft in the market when
Speaker 1: rates went from two RAD to UM to four. But
Speaker 1: reats have been we think on early punished, and when
Speaker 1: the capital markets stabilizer think it will see some go
Speaker 1: private because they're well below UM what would be considered
Speaker 1: to be normal fair value. Well, talking about normal fair value,
Speaker 1: it kind of feels like the equity market was primed
Speaker 1: for a rebound anyway. And I think there's a lot
Speaker 1: of questions about whether or not the price action we
Speaker 1: saw yesterday was indeed a short squeeze or really based
Speaker 1: on the fundamentals. I feel like there is a camp
Speaker 1: to say that perhaps it was based on the fundamentals,
Speaker 1: because this kind of moment of capitulation that the market
Speaker 1: I think has been waiting for for for nine months,
Speaker 1: we hit that, and then you kind of saw this
Speaker 1: pivot point becoming a everyone by everything right now? What
Speaker 1: would be the bare case for the markets if the
Speaker 1: idea is that recession has been priced in for the
Speaker 1: last nine months or so, and on top of that,
Speaker 1: inflation has peaked and it's coming down even faster than
Speaker 1: expected because base effects are finally going to work in
Speaker 1: its favor. Well, I think there's three over haangs on
Speaker 1: the market, the FED, the FED, and the Fed. They
Speaker 1: are going to be the last to know that inflation
Speaker 1: is going down. As I started to refer to UM initially, UM,
Speaker 1: they really have misdead nosed the seventies. It was really
Speaker 1: driven by two gigantic oil price shocks with some loose
Speaker 1: monetary policy. So they're focused on the expectations theory. And
Speaker 1: last time I was on WE we were talking about
Speaker 1: you know, there's no longer FED poot it's really the
Speaker 1: FED short So that's really the key. Even yesterday the
Speaker 1: market came off when there was some Fed commentary, So
Speaker 1: that's really the opening, is that the Fed is the
Speaker 1: last to know. They keep tightening and we have a
Speaker 1: mild recession. But to your point on that the Fed
Speaker 1: is the last to know, aren't they already making steps
Speaker 1: to at least have a step down and to slow
Speaker 1: down a little bit. This was something that was expected
Speaker 1: in September where we're supposed to see the last seventy
Speaker 1: five basis point hike. Now they're still talking about some
Speaker 1: economists predicting seventy five in December, but ultimately that mean
Speaker 1: the last really jumbo rate hike that we see from
Speaker 1: the federal reserves. So aren't they already kind of accommodating
Speaker 1: this lag that you're talking about? Well, there seems to
Speaker 1: be some disagreement within the FED, because you did see that,
Speaker 1: you know, on Fed Day where the statement was viewed
Speaker 1: being super bullish, but the press conference is barished. So
Speaker 1: I think there's a debate between sort of the expectations
Speaker 1: camp that we have to be the new Paul Boker
Speaker 1: crush this entrenched inflation. We don't really believe in entrenched
Speaker 1: inflation that comes from really two things, um, excessive monetary
Speaker 1: growth and usually energy price shocks, not expectations, but there
Speaker 1: is that expectations camp and so they're going to keep
Speaker 1: pounding on this notion of being hawkish, which could and
Speaker 1: raise rates more than they need to, so you could
Speaker 1: have a mild recession. We're not concerned about that. But
Speaker 1: in terms of just going all in in the market
Speaker 1: right now, you just have to be where the Fed
Speaker 1: at any moment can come out and make a statement
Speaker 1: and take the market down. So we think next quarter
Speaker 1: will be more stable than this quarter. Joe, what do
Speaker 1: you think about rates? I mean it plays in especially
Speaker 1: to the tech area in which you're more interested. Um,
Speaker 1: how do you feel about where we're going and how
Speaker 1: much does it matter to the stocks that you like? Yeah,
Speaker 1: I think that the reason why you're seeing such a
Speaker 1: bounce and technology right now, and you know stocks up three, four,
Speaker 1: five seven in some cases is because it is stocks
Speaker 1: created in place and hedge for you. Basically, what I'm
Speaker 1: saying is that when you invest in technology, when companies
Speaker 1: invest in technology, you're basically getting a asset at a
Speaker 1: at a price that doesn't inflate as quickly as say
Speaker 1: salaries or oil or other things that are required to
Speaker 1: bring your product to market. And so by investing in technology,
Speaker 1: you know companies like Service now, UM, You've got Oracle,
Speaker 1: You've got the payment companies. All those investments that you
Speaker 1: make today are really hedges against the other inflation items
Speaker 1: that hitch in. So rates do matter, but I think
Speaker 1: the technology stocks get hammered much more than they should
Speaker 1: when rates go up, and so if rates drop, people
Speaker 1: are gonna put more money back to work in technology.
Speaker 1: And I think when the rates drop that's really more
Speaker 1: of the trader types that are trying to get leverage
Speaker 1: on technology, and I think that's one of the reasons
Speaker 1: why you're seeing such a bump in technology now. But
Speaker 1: I really think it's it's an inflation hedge when you
Speaker 1: invest in technology, which is why we focus on both
Speaker 1: in public companies and private I wanted to get into
Speaker 1: UM the investments that you guys are UM specifically interested in. Uh, Jay,
Speaker 1: let me start with you. I'm gonna get back to
Speaker 1: Joe and the tech s docs in a moment. Are
Speaker 1: you focused more on the infrastructure, more on the energy plays,
Speaker 1: more on the real estate stuff. Well, we think that
Speaker 1: all of those sectors are going to continue to do well.
Speaker 1: We've been super negative out tech stocks throughout the year
Speaker 1: so far, but um really, if we're correct about inflation decelerating,
Speaker 1: that means a dollar weekend and tech stocks will do
Speaker 1: way better because they've been hurt by foreign currency. But
Speaker 1: we would still be a little bit defensive through the
Speaker 1: rest of this year. As I mentioned, we're concerned about
Speaker 1: um fed speak and potentially taken us into a recession.
Speaker 1: And all those companies are much lower multiples, have higher
Speaker 1: dividend yields, more defensive if we have another down draft
Speaker 1: in the market, So we'd still be pretty defensive and
Speaker 1: go after dividend yields with preferred stocks reads MLPs, we
Speaker 1: think are still fairly valued increasing dividends. Joe, what do
Speaker 1: you think? Yeah, Look, it's the technology strategy is critical
Speaker 1: for us because we we fundamentally believe that small and
Speaker 1: midsize companies are really going to get steamrolled if they
Speaker 1: can't get into the same level of service that big
Speaker 1: companies are doing, and the only way you do that
Speaker 1: is with technology. So to us, what's going to happen
Speaker 1: in the next two to three months is interesting. But
Speaker 1: what we're looking at is what companies do we get
Speaker 1: into now that will give us a long term run
Speaker 1: over the next two to three years. And so um,
Speaker 1: that to us is technology because you have to bring
Speaker 1: the service level. We've all done it where you've ordered
Speaker 1: items and you need to change and if you don't
Speaker 1: get a return merchandise uh component put together and have
Speaker 1: all that technology connected, you're you're gonna be hurt. And
Speaker 1: I think that companies like Zebra, which really ties you
Speaker 1: to the Internet of things, you know, they're at uh
Speaker 1: two dollars right now, give or take change. I think
Speaker 1: they're all time high with five dollars, so you're getting
Speaker 1: it at almost a discount. UM service now is down.
Speaker 1: Ui Path is a great automation company that are at
Speaker 1: eleven dollars that came out at eight. All of those
Speaker 1: types of companies have found a nice bottom here, and
Speaker 1: I think that now is the time to start buying
Speaker 1: into them. And that's what we've been doing for the
Speaker 1: last month or so. So you know, I think it's
Speaker 1: a great opportunity to really start getting back into technology,
Speaker 1: especially as the dollar weekends. To Jay's point, and um,
Speaker 1: you know, the rates are going to drop a little
Speaker 1: bit or at least stay steady, and that allows these
Speaker 1: companies to invest, both large companies and the smaller medium
Speaker 1: ones which really need to invest in technology. And you
Speaker 1: think about it, there, their last major upgrade cycle is
Speaker 1: y two K and they've got to invest and I
Speaker 1: think that's where they're going to do well. Microsoft will
Speaker 1: do well this in this area as well. When you
Speaker 1: see these headlines about massive layoffs across the tech based meta,
Speaker 1: for example, Stripe, even Um, Twitter will put aside because
Speaker 1: a little bit of a different story. But when you
Speaker 1: see these tech layoffs, what camp are you in. Is
Speaker 1: this the big macro signal that I think lot of
Speaker 1: people were waiting for when it comes to the labor
Speaker 1: market or is this a tech specific phenomenon where hiring
Speaker 1: was kind of on the up and up for so
Speaker 1: long that this is just the natural reversal of it all. Yeah, Cret,
Speaker 1: great question. You know there was a race for talent.
Speaker 1: I mean you've got, uh these young men and women
Speaker 1: that are coming out of these universities and they're trying
Speaker 1: to decide do they want to go into tech and
Speaker 1: they want to go into consulting, or do they want
Speaker 1: to go into banking. And so I've got a couple
Speaker 1: of children that have been out of school for a
Speaker 1: little while, and so I saw the race for talent,
Speaker 1: and they just these large technology companies were just hiring
Speaker 1: as fast as they could because they know they needed
Speaker 1: that talent. You also had Crypto hiring or trying to
Speaker 1: hire a lot of talent, and so that's gonna dampen
Speaker 1: the race for talent a little bit. And I think
Speaker 1: now the technology companies believe that they have to pull
Speaker 1: their horns in. This is a great opportunity to do it,
Speaker 1: to call the bottom out a little bit and keep
Speaker 1: the best folks at at the top. And I think that, uh,
Speaker 1: those layoffs are basically a chance to regroup and this
Speaker 1: is this is probably the best time to do it
Speaker 1: before they have to start figuring out where they go next. Jay,
Speaker 1: I'd love to get your take on cryptom in a sense,
Speaker 1: there's kind of infrastructure story here, right. I heard Squarey
Speaker 1: from American Express talk about the fact that he didn't
Speaker 1: think they're going to take over the payment rails. Um.
Speaker 1: When you look at the the industry, um, what do
Speaker 1: you think first of all about you know, the wild
Speaker 1: westness of it, and then when you look at the
Speaker 1: asset class doesn't have any value to you. Well, we've
Speaker 1: been kind of super crypto bears. We thought that the
Speaker 1: big run up in bitcoin was solely driven by the
Speaker 1: increase in the money supply, and so when a crypto
Speaker 1: is at forty, we were predicting twenty. But if you
Speaker 1: really look at it, the bitcoin price before or the
Speaker 1: big FED liquidity injection was ten thousand, so that would
Speaker 1: really be our target. So we've been super negative about
Speaker 1: the asset class, partly because Article one of the Constitution
Speaker 1: makes it clear you cannot create your own currency, so
Speaker 1: it's it's flat out legal in the United States, so
Speaker 1: it really is an a currency, it's a token, and
Speaker 1: what apparently has been happening is that it really was
Speaker 1: a house of cards where the exchanges were propping up
Speaker 1: their own tokens and also propping up other exchanges. So
Speaker 1: we would continue to be bears on it, and also
Speaker 1: just use it as a lesson that investors should always
Speaker 1: focus on cash flow, earnings, dividends and be relatively conservative
Speaker 1: because in down markets you're gonna lose plenty of money
Speaker 1: anyway without taking that kind of risk. Just got thirty seconds.
Speaker 1: What do you think? No, I think the blockchain is
Speaker 1: here to stay. I think that crypto is interesting to me.
Speaker 1: I think for folks to have a little bit of
Speaker 1: it in their portfolio, is A is a high risk component?
Speaker 1: Is fine? Um? You know, we've we owned a little bit,
Speaker 1: and I think that there's for example, micro strategies. To me,
Speaker 1: is A is a simple play to make. They've got
Speaker 1: their stocks basically price where it has been historically before
Speaker 1: they even got into crypto. So if you buy a
Speaker 1: micro strategy right now, you're basically getting their crypto for
Speaker 1: free and their their Web three strategy for free. So
Speaker 1: you know, to me, I think it's a smart play. Um.
Speaker 1: But I think that the whole technology side is is
Speaker 1: where the opportunity lies, and it's all about automation. Joe,
Speaker 1: thanks so much for joining us. Joe Meyer their CEO
Speaker 1: and founder at Meyer Capital. Jay Hatfield, CEO and founder
Speaker 1: Infrastructure Capital Advisor. Is great to have you in the studio. Look,
Speaker 1: we're talking a lot about the crypto chaos today, but
Speaker 1: I really think the story on the sun the stock
Speaker 1: market is really crucial because we had a five point
Speaker 1: three percent rally yesterday one that we hadn't seen since
Speaker 1: the depths of the pandemic back in as Matt quotes
Speaker 1: our producer of Valerie Titele, the last time we saw
Speaker 1: this kind of rally, two trillion dollars of stimulus was
Speaker 1: pumped into the American economy. So to see that kind
Speaker 1: of reaction really begs the question is it sustainable? Is
Speaker 1: it real? Is that bear market carnage that we've seen
Speaker 1: the stock market finally over? Who better to ask? Was
Speaker 1: it a short squeeze? Oh my gosh, Okay, it was
Speaker 1: a short squeeze. I don't believe it was a short squeeze,
Speaker 1: but we are going to ask someone who might just
Speaker 1: have the answer to that. David Kat's, President, CEO of
Speaker 1: Matrix Asset Advisers. Rescue us, David, because Matt and I
Speaker 1: are having a major argument that started at three am
Speaker 1: this morning. It's going on for eight hours about whether
Speaker 1: or not yesterday was a short squeeze or really had
Speaker 1: a fundamental driver behind it. We think it's a combination
Speaker 1: of both. Right now, the market you can't say both.
Speaker 1: It is this Sophie's choice man. Sorry guys, Uh, the
Speaker 1: market is so negative and you have this sell off
Speaker 1: an aggregate for the SMP and for a lot of
Speaker 1: technology companies. Everybody's thinking the market's going to go lower.
Speaker 1: So you finally had a bit of good news with
Speaker 1: the CPI numbers, and you had a lot of people
Speaker 1: piling in. So you had people who were out of
Speaker 1: the market fearful they'd missed the rally that jumped in
Speaker 1: very quickly, and then that accelerated with that short squeeze,
Speaker 1: So a combination of the two things. We think very importantly.
Speaker 1: It's impossible to predict the day to day trading, but
Speaker 1: if you look at a six to twelve month time horizon,
Speaker 1: we think there's a very good likelihood stocks will be
Speaker 1: meaningfully higher. We wouldn't chase rallies like yesterday, but when
Speaker 1: the next time the market sells off a few percent,
Speaker 1: we'd be putting money to work. There are a lot
Speaker 1: of great businesses at great prices. You know, that's a
Speaker 1: phrase that I picked up in your note. Great businesses
Speaker 1: and equally great prices in a number of stocks that
Speaker 1: you don't just recommend, you also own them for yourself.
Speaker 1: Amazon is one, Google is another. Microsoft. Um have valuations
Speaker 1: come down enough, We think they have. You know, surely
Speaker 1: in Google's case, this is a great growth company. It's
Speaker 1: the premier search company of the world. Uh yet a
Speaker 1: week ago was selling it about sixteen times next year's numbers.
Speaker 1: That's a really good price. Microsoft also dominant franchise at
Speaker 1: twenty two times earnings. Amazon is a little bit more
Speaker 1: complicated since they don't earn money. But if you look
Speaker 1: at them and a on a price to sales or
Speaker 1: price to eat it off basis, it's selling it. It's
Speaker 1: lows for the last ten years. So we think Amazon
Speaker 1: is a good opportunity. We think the others are compelling
Speaker 1: in terms of the stock prices on evaluation basis and
Speaker 1: as an opportunity. I am fascinated, Matt by the fact
Speaker 1: that so many tech bowls are coming out of the
Speaker 1: woodwork when for so long, for ten months, we've literally
Speaker 1: heard that tech is just not worth the bid anymore
Speaker 1: for for lack of better term, because of the kind
Speaker 1: of great strategy, And now you have more of these
Speaker 1: valuations were so high and now the market head but
Speaker 1: we had come down. But even with those valuations, they
Speaker 1: were still the fastest growing companies on the SMP five hundred,
Speaker 1: and no one was buying into them. But I think David,
Speaker 1: to your point, we only have about a minute left.
Speaker 1: But I have to ask, does this mean if you
Speaker 1: are bullish on tech? Are you bullish then by association
Speaker 1: on the entire market, on the entire benchmark, Well, we
Speaker 1: are bullish on the on the overall market, we think
Speaker 1: there are lots of opportunities. To your question, we were
Speaker 1: pretty careful and cautious on technology going into the year,
Speaker 1: but after this sell up, we like it, but we
Speaker 1: think there are other places to make good money. We
Speaker 1: like the financial group. We think is very well positioned
Speaker 1: for the upcoming year. We think some medical product companies
Speaker 1: are in very good valuation territory, so there are lots
Speaker 1: of places to put money that we think you'll be
Speaker 1: very profitable twelve months out. UM the chips to me
Speaker 1: is the most uh interesting and hard to get my
Speaker 1: head round aspect of text because UM seems like we
Speaker 1: have way too many chips for PCs and still not
Speaker 1: nearly enough for cars. What do you like so Qualcom
Speaker 1: we think is a great play in the chip area.
Speaker 1: They the stock has done very poorly this year. Uh,
Speaker 1: they lowered guidance on their last earning school, but they're
Speaker 1: still selling at ten times earnings. Based on this lowered guidance,
Speaker 1: they have a dominant franchise in phones, but interestingly they're
Speaker 1: expanding that they are going to be the dominant player
Speaker 1: in automobiles for communications. Very good growth forecast and at
Speaker 1: ten eleven times earnings. This is exactly the time to
Speaker 1: buy it. Visibility very low, long term visibility very high.
Speaker 1: David always great to get you on UM. Never enough time,
Speaker 1: David Casts, President, Chief investment Officer over at Matrix Asset Advisors.
Speaker 1: We have Tritty and I are great friends, and we
Speaker 1: have one of our best friends in the studio with us,
Speaker 1: Shinali Vassett, cover Wall Street for Bloomberg News, and she
Speaker 1: knows everybody in the crypto world as well. So with
Speaker 1: the implosion of f t X, Curtin and I thought,
Speaker 1: who better to invite into the interactive broker studiovengtionality yourself.
Speaker 1: So f t X has now filed for bankruptcy Sam
Speaker 1: Bankman Freed has stepped down as CEO. Does this mean
Speaker 1: no rescue, no bailout, no White Knight correct? Correct? Correct?
Speaker 1: So I think what's interesting is UM, you know, we
Speaker 1: have the CEO of Circle Online tweeting asking are there
Speaker 1: any other opaque, unregulated offshore entities we need to worry
Speaker 1: about here? Uh, the answer is probably yes. Like a
Speaker 1: lot of companies went off shore when it came to cryptocurrencies.
Speaker 1: When you look at the bankruptcy filing for Sam Bankman
Speaker 1: Freed's entity, he stepped down as CEO. Uh, they bought
Speaker 1: in as a new CEO, the person who has brought
Speaker 1: in to help clean up the Enron scandal and recoup
Speaker 1: funds for investors. And in this instance, when it comes
Speaker 1: to f TSS, you have to ask yourself, it's a
Speaker 1: hundred and thirty entities across the entire globe, what are
Speaker 1: the actual assets behind them that can be recouped for
Speaker 1: clients and for investors? A lot of investors are already
Speaker 1: marking down their stakes to nothing. Well, what's fascinating to
Speaker 1: me here is that on these headlines you had bitcoins,
Speaker 1: specifically marine US as a poster child for cryptocurrencies broadly
Speaker 1: just for the sake of this conversation, but it did
Speaker 1: actually drop i want to say, below seventeen thousand at
Speaker 1: that point for the headlines, it kind of came back
Speaker 1: up haired some of the losses there you saw a
Speaker 1: similar fade on the SMP five hundred in the NASDAC,
Speaker 1: but those came back as well. This concept of this
Speaker 1: is the Lehman moment, but for crypto only is interesting
Speaker 1: because it kind of feels like the broader market has
Speaker 1: said there is no systemic risk, there is no contagion,
Speaker 1: But does that mean that there couldn't be down the road.
Speaker 1: It's close to us next year. Even somebody I know,
Speaker 1: a CEO of cryptocompany online, was tweeting saying that we've
Speaker 1: been asking what's the contagion, what's the contagion? And the
Speaker 1: argument he makes is this is the contagion. We have
Speaker 1: been seeing crypto companies fail all year long, and now
Speaker 1: we're watching one of the biggest exchanges in the world
Speaker 1: face bankruptcy. And by the way, they have clients block
Speaker 1: and they have investments Block five is halting withdrawals. People
Speaker 1: are just as worried about that. Anthony Scaramucci thirty percent
Speaker 1: of his firm was recently sold to f t X Ventures,
Speaker 1: and he owns lots of f t X stock as
Speaker 1: well as or his firm does, as well as half
Speaker 1: of his assets being in cryptocurrencies. So you think about
Speaker 1: just one by one multiplied that by all of f
Speaker 1: t X is clients that can't get their money back,
Speaker 1: and what kind of cash crunch there in because of it.
Speaker 1: But then you know, you think Mike Wilson and Morgan Stanley,
Speaker 1: the equity strategist, had made a good point this morning
Speaker 1: to Jonathan Faraoh on television, which was that this is
Speaker 1: all a product of tighter financial conditions. That idea is
Speaker 1: not a contagion. It is just a market reality that
Speaker 1: cryptocurrency firms are facing. By the way, musquwarmed about a
Speaker 1: potential Twitter bankruptcy if they can't be more cash rich
Speaker 1: in some amount of time. And by the way, this
Speaker 1: idea that bankruptcies will come more and more. The restructuring
Speaker 1: advisors that I spoke to Lizard was one of the
Speaker 1: biggest on the record just a couple of weeks ago.
Speaker 1: They said, the velocity of restructuring conversations are starting to
Speaker 1: pick up, meaning you could very well see many more
Speaker 1: companies go bankrupt Crypto or not. Um Is everybody mad
Speaker 1: at c z? Is anyone mad at him because he
Speaker 1: effectively brought f t X down? Well, well, wait a minute,
Speaker 1: So if you have by the way, typically on Wall
Speaker 1: Street Now, if you have a bunch of assets that
Speaker 1: you want to sell, you don't pre announce that sale
Speaker 1: and therefore the price that you would get. Unless if
Speaker 1: I'm if I'm the Bank of Shinale, I don't go
Speaker 1: around running around saying the Bank of matt looks like
Speaker 1: it's got nothing behind it, right like that would cause
Speaker 1: a bank run. But what happened here according to a
Speaker 1: lot of reporting, the Journal broke this part yesterday that
Speaker 1: was incredible that of sixteen billion dollars of consumer assets
Speaker 1: at f t X, more than half eight billion or
Speaker 1: so were lent to Alameda, the trading firm run by
Speaker 1: Sam big Man Freed. So there's a bigger issue here
Speaker 1: of what happened to customer funds were The big question
Speaker 1: for regulators is an authorities at this point, we're investigating
Speaker 1: the situation where they misused and were they unclear about
Speaker 1: how customer funds were being used and where they went,
Speaker 1: And that is an f t X issue and not
Speaker 1: a finance issue. It just seems to me that c
Speaker 1: Z could have gone to SPF and said, dude, it
Speaker 1: looks like there's something not proasting on the fire, is
Speaker 1: what you're saying. Before I sink your boat on Twitter? Right,
Speaker 1: why don't you take care of these? A little bit
Speaker 1: could happened. Speaking of Twitter, we should bring in our
Speaker 1: other guests today. Ed Ludlow joins us from San Francisco.
Speaker 1: We gave a massive, big introductions to Shnali. Uh, we
Speaker 1: should give one to Ed as well. He's our star
Speaker 1: West Coast correspondent and my former producer and Matt's former
Speaker 1: producer and my bestie. Okay, so just because my company
Speaker 1: is not imploding as much as yours, well, well, yeah, debatable.
Speaker 1: Let's go to the Twitter story though, because ft X
Speaker 1: is not the only one that is dealing with bakermancy.
Speaker 1: Twitter is not a dealing with bankruptcy, to be super clear,
Speaker 1: but there is speculation that it might be on the
Speaker 1: brink ofpeculation from the owner of the CEO. Okay, well
Speaker 1: take it away. Yes, So yesterday Elon Musk held in
Speaker 1: all hands with the staff that are left. Remember he
Speaker 1: laid off of them almost two weeks ago now, and
Speaker 1: he told the staff gathered on this virtual meeting that
Speaker 1: there's a sense of urgency here. Advertising revenue has dropped significantly,
Speaker 1: either because names that are upset or a cautious have
Speaker 1: paused advertising. Must said he didn't know what the run
Speaker 1: rate for the company was, which is worrying. But remember
Speaker 1: he tweeted previously that that eLearning four million dollars a day,
Speaker 1: which is why they had to lay off all the staff.
Speaker 1: And then to wrap it up, he kind of floated
Speaker 1: the idea that bankruptcy is a real possibility for Twitter,
Speaker 1: which sort of two weeks into ownership at a time
Speaker 1: where you're trying to sell billion dollars of debt or
Speaker 1: twelve point five billion dollars of debt to the street,
Speaker 1: is a strange messaging tactic. So why what's going on there?
Speaker 1: I think that he's just trying to lay down the law.
Speaker 1: You know, you look at some of the other things
Speaker 1: that sources tell me. He told staff, you know that
Speaker 1: the days of Silicon Valley ethos and culture are over.
Speaker 1: He's taking away free food, he's taking away other perks.
Speaker 1: He's already canceled return remote working. And what was interesting,
Speaker 1: he wouldn't everyone who can quit quit? Yes, yes, So
Speaker 1: we're hearing that people are resigning of their own volition,
Speaker 1: you know, even if they survived the layoffs. Um. He
Speaker 1: also told, you know, the remaining staff that many of
Speaker 1: them will have to work eighty hours a week. You
Speaker 1: remember we only just reported that when he canceled remote working,
Speaker 1: he said everyone has to be in an office forty
Speaker 1: hours a week. Now he's telling the staff eight hours.
Speaker 1: And have you guys been on Twitter in the last
Speaker 1: twenty four hours? I haven't, but it is live on Twitter.
Speaker 1: I think it is. It is scary out that. It
Speaker 1: is pretty scary out there. I mean, I mean trusted
Speaker 1: if your feedback, but everybody on there has a blue check. Now.
Speaker 1: I don't know what your guys experiences, but everyone has
Speaker 1: a blue check. And then this morning, what happens Twitter,
Speaker 1: Blue just disappears from the platform. It's not clear what's
Speaker 1: going on. You could join me on discord ed. All right,
Speaker 1: Unfortunately we have to go, but I'm just going to
Speaker 1: call you up over the weekend to try and least
Speaker 1: going on at least Ed Ludlow joining us from San Francisco.
Speaker 1: Hinale Basic joining us from three desks over. That's it
Speaker 1: for me and Pritty. This is Bloomberg. Thanks for listening
Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen
Speaker 1: to interviews with Apple Podcasts or whatever podcast platform you
Speaker 1: prefer I'm Matt Miller. I'm on Twitter at Matt Miller
Speaker 1: nineteen seventy three. And I'm fall Sweeney. I'm on Twitter
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
Speaker 1: us worldwide at Bloomberg Radio