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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moven news.

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Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 1: All right, let's get to the latest on Israel, because

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Speaker 1: it just once again we're just waiting it seems like

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Speaker 1: for Israel to make the next move here and how

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Speaker 1: decisive it will be. Mick mulroy joints us. He's a

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Speaker 1: former CIA Power military officer and he's a co founder

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Speaker 1: of the Lobo Institute. Mick, thanks so much for joining

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Speaker 1: us here. It just it seems like everything we see

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Speaker 1: and read from all the reporting that Israel is going

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Speaker 1: to go big into kaza I guess the question is

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Speaker 1: when and then what do you think? I guess more importantly,

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Speaker 1: what do you think a realistic objective for them is?

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Speaker 3: Well, it's good to be with you guys. I do

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Speaker 3: believe it's coming up. So I think we're in the

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Speaker 3: last stages of preparations. We've seen the preparatory fires to

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Speaker 3: soften up the targets, take out some leadership. We've seen

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Speaker 3: some small incursions, probably by special operations forces to try

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Speaker 3: to find the best route for the main body to

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Speaker 3: get in and potentially to try to get information on

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Speaker 3: where the hostages could be. And now we're going to

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Speaker 3: see a giant movement of all these tanks and armored

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Speaker 3: personnel carriers and combat engineer vehicles. They're going to leave

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Speaker 3: the assembly area. They're going to get in their attack

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Speaker 3: formations and then likely enter from ares up at the top,

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Speaker 3: because that's the best when it comes to terrain for

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Speaker 3: all these formations to get into and then funnel in

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Speaker 3: to the top going straight toward Gaza City. And to

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Speaker 3: your point, they're going big and it's going to be violent.

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Speaker 3: They'll probably have some come in from the sea to

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Speaker 3: create a dilemma from Hamas, maybe some coming from the

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Speaker 3: air to try to drop behind them in central in

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Speaker 3: central Gaza to also to try to create a dilemma

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Speaker 3: and develop them. But once they into the actual fighting,

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Speaker 3: it's going to be blocked by block I'm hearing the

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Speaker 3: Israeli planners that talk to me talk about Upper and

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Speaker 3: Lower Gaza. Upper being buildings and everything that you see

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Speaker 3: normally in the city lower is all these tunnels is

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Speaker 3: around three hundred miles of tunnels down there, and that's

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Speaker 3: going to be a bear militarily to try to conquer.

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Speaker 1: How deep are the tunnels?

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Speaker 2: Why can't A couple of questions I've had, and maybe

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Speaker 2: you can help, Mick, how do they block the sea border?

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Speaker 2: I mean, why wouldn't people in Gaza be able to

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Speaker 2: get out on boats or you know, even swimming as

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Speaker 2: rudimentary as it sounds, right, they're on the sea.

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Speaker 1: How do they block that?

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Speaker 3: So there's been a blockade, enable blockade and placed by

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Speaker 3: the Israelis for some time because that was one of

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Speaker 3: the means of which are on quite frankly, smuggled weapons

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Speaker 3: into Gaza. The other was through the tunnels leading into Egypt.

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Speaker 3: So that's been blocked. If boats were allowed in, there

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Speaker 3: could be some X bills, uh, you know, civilians leaving

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Speaker 3: that way. But I don't think the Israelis are letting

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Speaker 3: any any any vessels in any of the c space

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Speaker 3: right off the coast of Gaza. I do think they'll

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Speaker 3: try some kind of amphibious landing, maybe just a small

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Speaker 3: special operations type force or more like a giant or

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Speaker 3: you know, a large marine formation like the like the

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Speaker 3: Marine Corps type formation hitting hitting the beach. Almost everybody

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Speaker 3: is going south via vehicle or put I.

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Speaker 2: Also wonder, you know, we wondered, uh, we talked about

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Speaker 2: the objective for Israel, but going back to the terrorist

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Speaker 2: attacks that we saw last week, why did Hamas do that?

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Speaker 2: Other than you know, uh, spreading terror and I guess,

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Speaker 2: you know, retaliation against what they feel has been done

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Speaker 2: to them. Do you think they're trying to bait the

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Speaker 2: Israelis into Gaza.

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Speaker 3: Yes, and that's a good that's a good point of

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Speaker 3: your question. So when they attacked Israel like this, they

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Speaker 3: had to know that this was going to happen, and

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Speaker 3: I think they did. Why did they do it? Obviously

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Speaker 3: to your point terror, they're a terrorist organization, been designated

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Speaker 3: as such as nineteen ninety seven. But also they want

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Speaker 3: to disrupt all of the diplomatic efforts in the region.

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Speaker 3: We've already had the Abraham Accords Saudi Arabia and Israel.

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Speaker 3: We're getting close to normalizing relations. This is not good

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Speaker 3: for Hamas, it's not good for Iran. And if it's

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Speaker 3: not good for on it's not good for Hamas or Hesbela,

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Speaker 3: and that's potentially part of what you're trying to do.

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Speaker 3: And then the last part militarily is to get them

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Speaker 3: into a fight like this, because the IDEF is one

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Speaker 3: of the most advanced militaries in the world. But urban fighting,

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Speaker 3: tunneled fighting, is subterranean fighting is it takes away a

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Speaker 3: lot of those advantages. And they have this place wired

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Speaker 3: literally to fight the benefit on their side. So that

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Speaker 3: is why they want the IDEF to get into this

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Speaker 3: battle inside Gaza City for example.

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Speaker 1: And Mick, I mean, have do you think the IDF

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Speaker 1: has been able to identify over the years who actually

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Speaker 1: is in Hamas? I mean, the leadership is one thing,

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Speaker 1: but of the fifteen hundred or so Hamas terrorists that

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Speaker 1: came across the boarded, does Israel know who they are?

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Speaker 4: It?

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Speaker 1: Did they know? Really? Can they really neutralize Hamas as

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Speaker 1: a terrorist organization?

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Speaker 3: So there's gonna be a lot of the Hamas fryers

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Speaker 3: are going to fight, so they're they're going to die,

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Speaker 3: and that's gonna be Then they're going to gather all

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Speaker 3: those and then the ones that they capture, they're going

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Speaker 3: to go through every camera that and of course Israel,

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Speaker 3: like most modern countries, has cameras everywhere and try to

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Speaker 3: make sure that they've identified everybody either dead or alive.

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Speaker 3: It took part of that operation, and they also keep

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Speaker 3: detailed records on who they believe is in Hamas and

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Speaker 3: their leader Sinwar is in Gaza City. He is he

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Speaker 3: is one of the most significant leaders in Hamas. He's

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Speaker 3: going to be target number one. And they've already taken

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Speaker 3: about twelve of the sea and your leaders around him

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Speaker 3: out so far, just since the preparatory fires started.

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Speaker 1: And Nick, one of the question I asked kind of

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Speaker 1: consistently to guests on this topic is how much collateral

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Speaker 1: damage do you think Israel is willing to inflict in

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Speaker 1: order to achieve their military objectives.

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Speaker 3: Well, I would hope and I do believe they will

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Speaker 3: adhere to the law of armed conflict, which is to

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Speaker 3: do everything you can to limit civilian casualties. And the

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Speaker 3: first step is getting this humanitarian corridor that allows civilians

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Speaker 3: to leave northern Gaza and move to southern Gaza, hopefully

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Speaker 3: in a UN sponsored safe haven that's monitored. There's plenty

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Speaker 3: of effort underway to set that up, but I do

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Speaker 3: think Israel the IDF will do everything they can to

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Speaker 3: limit sivilian casually. That said, this is urban fighting with armored,

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Speaker 3: armored personnel carrier, multi dimension. There's no doubt that Hamas

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Speaker 3: is going to hide behind civilians. There's no doubt have

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Speaker 3: buildings wired, in tunnels wired. So there's going to be

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Speaker 3: a lot of civilian casualties, which is why I think

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Speaker 3: there's been so much effort recently to get as many

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Speaker 3: civilians as possible, and I think last I heard was

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Speaker 3: five hundred thousand have left northern Gaza. Everybody that can

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Speaker 3: leave should lead.

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Speaker 2: You know, last week was much harder for me than

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Speaker 2: I expected mentally, and I don't even have a dog

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Speaker 2: in this fight. It just hurt to see all of

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Speaker 2: the damage inflicted by the terrorist attack first and then

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Speaker 2: looking at the pictures of women and children in Gaza

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Speaker 2: in the hospitals was also I mean, the little.

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Speaker 1: Girls look like my little girl.

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Speaker 2: How do you deal with this as a soldier, as

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Speaker 2: a leader, how do you deal with that part of it?

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Speaker 3: So that's the part I think that's the most lingering

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Speaker 3: and the stuff that causes quite frankly, veterans the most

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Speaker 3: grief along with losing their friends for the longest period

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Speaker 3: of time. You know, you'd hope that if, quite frankly,

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Speaker 3: if adult men would star wars, they should be the

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Speaker 3: ones fighting it, right, not little kids as we see

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Speaker 3: around the world in so many places, and certainly not

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Speaker 3: all these innocent civilians who just happen to be caught

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Speaker 3: in the crossfire. As you said, whether it's in Israel,

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Speaker 3: whether it's in Gaza, or whether it's in Ukraine. It's

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Speaker 3: just unacceptable. It's why most of the UN protocols came

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Speaker 3: after World War Two is to try to prevent civilian

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Speaker 3: casualties like this. They just should not be part of

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Speaker 3: anybody's combat operations and their plans. They should be completely excluded. Unfortunately,

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Speaker 3: look like Hamas's sole purpose, quite frankly, was to kill

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Speaker 3: civilians when they went into Israel. They actually bypassed many

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Speaker 3: of the ideas there is. Now we need to try

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Speaker 3: to do everything we can to save civilians in Gaza.

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Speaker 1: All right, Mack, thanks so much for joining us. As always,

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Speaker 1: Mick mulroy of the lovelod Stude.

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Speaker 5: You're listening to the team. Ken's a live program Bloomberg

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Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot Com,

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Speaker 5: the iHeartRadio app and the Bloomberg Business app or listening

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Speaker 5: on demand wherever you get your podcast.

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Speaker 1: Apps Bloomberg News. How was some reporting thing one of

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Speaker 1: our mostly most read stories of the day. Apple's iPhones.

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Speaker 1: They're off to a sluggish start in China, that's according

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Speaker 1: to a study. So we want to bring in Ed Ludlow.

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Speaker 1: He knows all about this stuff. He does a lot

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Speaker 1: of work with the folks in Kupertino. Ed Lolo joins

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Speaker 1: as he's a host of Bloomberg Technology. So, Ed, what's

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Speaker 1: kind of the background here for iPhone sales in China?

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Speaker 6: I guess it's whether you look at it through the

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Speaker 6: lens of an economist or you look at it through

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Speaker 6: the lens of a smartphone market analyst. But this is

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Speaker 6: counterpoint research data that shows for the first seventeen days

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Speaker 6: after the iPhone fifteen went on sale in China, sales

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Speaker 6: are down four point five percent versus the same comparable

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Speaker 6: period a year ago when the iPhone fourteen went on sale.

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Speaker 6: And there are some caveats in that data, right, because

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Speaker 6: when Apple releases a new generation of iPhone, there is

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Speaker 6: multiple variants.

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Speaker 7: So in this case, the iPhone fifteen and fifteen.

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Speaker 6: Plus the base models and then the pro and Promacs,

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Speaker 6: the more premium models, but overall it's down. And you know,

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Speaker 6: China's economy is super interesting right now. It's an aging economy,

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Speaker 6: but youth unemployment's really high. And I think we get

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Speaker 6: a GDP print for China on Wednesday that's likely to

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Speaker 6: show modest uptick on growth quarter on quarter, but below

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Speaker 6: it's five percent target that Beijing has on an analyzed basis,

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Speaker 6: So it could be a softness thing, but it's also

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Speaker 6: a more competitive smartphone market domestically as well.

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Speaker 2: Well, and they've made rules that you're not allowed to

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Speaker 2: bring an iPhone in to certain places.

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Speaker 1: Right it was already uncool, I guess or.

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Speaker 4: Not?

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Speaker 2: I like that, Yeah, jibe with the Communist Party vibe.

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Speaker 2: But is this a China specific problem or do we

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Speaker 2: expect to see reports like this for iPhone sales across

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Speaker 2: other regions as well?

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Speaker 6: So what's fascinating about it is, according to the Counterpoint data,

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Speaker 6: it is a Chinese China specific problem because the Counterpoint

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Speaker 6: d it has showed that on the first nine days

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Speaker 6: of sales in the US, iPhone fifteen was up significantly

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Speaker 6: compared to the iPhone fourteen sales for that first nine

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Speaker 6: day period a year ago.

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Speaker 7: So that's interesting.

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Speaker 6: It also is completely counter to what we learned so

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Speaker 6: far this year that in the June course or the

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Speaker 6: quarter ending in June, what Apple told us was that

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Speaker 6: China was the point of strength in that domestic Chinese

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Speaker 6: or Greater China market. Apple had actually swung to top

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Speaker 6: line growth of eight percent from a three percent decline

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Speaker 6: the quarter before, and it was principally driven by iPhone

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Speaker 6: at a time where US or North American smartphone sales

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Speaker 6: were really weak. So the story we're playing seeing play

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Speaker 6: out reading the tea leaves is that there's a really

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Speaker 6: big tech upgride cycle going on in the US, not

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Speaker 6: so in China. But remember in the background there are

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Speaker 6: domestic smartphone market pressures because some of the Chinese players

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Speaker 6: have surprised us with competitive handsets in that period as well.

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Speaker 1: So, I mean, I guess if I were an Apple

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Speaker 1: executive or fire an investor, my biggest fear would be

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Speaker 1: just as nationalism on the part of the Chinese care

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Speaker 1: are they just not buying American or are they just

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Speaker 1: not buying Apple in this particular case.

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Speaker 2: And they're like twenty percent of your customer base, right A,

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Speaker 2: they make a huge chunk of Apples.

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Speaker 6: Well, from a revenue perspective, I mean, you make both

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Speaker 6: excellent questions, just really quick that even if your unit

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Speaker 6: sales are down overall, remember that the Chinese consumer skews

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Speaker 6: towards the higher end product, the pro and promax, So

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Speaker 6: you can still grow revenue because of higher average selling prices,

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Speaker 6: which is something that Apple's relied on. But I guess

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Speaker 6: it doesn't matter if you look at it as an

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Speaker 6: economist or as a market analyst. How do we price

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Speaker 6: in or understand the effects of that communist policy that

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Speaker 6: Matt was talking about. What Bloomberg's reported is that China

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Speaker 6: central government basically said to all government agencies and state

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Speaker 6: back corporations, tell your staff no iPhones. You cannot bring

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Speaker 6: an iPhone to work. You have to use a domestic model.

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Speaker 6: And everyone was pretty chill and sanguine about that at

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Speaker 6: the time the news came out. We don't know for certain,

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Speaker 6: but the question we're posing is does this data show

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Speaker 6: that this put off consumers in China from going out

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Speaker 6: and buying because their government said you can't use iPhones

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Speaker 6: in the workplace, all right.

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Speaker 1: So I mean, I guess is there do we have

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Speaker 1: any response out of Cooper Tino where they, to their

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Speaker 1: extent of their concern.

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Speaker 7: Here no Apple define to comment on the story.

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Speaker 6: But remember the guidance, right, The guidance was that iPhone

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Speaker 6: sales would accelerate into the last three months of this year.

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Speaker 6: This data conflicts with that guidance.

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Speaker 2: I also feel like it's we do get stories worried

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Speaker 2: about iPhone sales every cycle, right is that? Yes, just

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Speaker 2: we're always wrong my old exactly it is true, and

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Speaker 2: this is a company that loves to under promise and

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Speaker 2: over deliver as well.

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Speaker 1: So I don't know.

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Speaker 2: I mean, it's interesting stuff, yeah, and we'll put it

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Speaker 2: into our into our models, ed.

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Speaker 7: But so I don't know.

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Speaker 6: I do think what's changed this time around is that

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Speaker 6: the big tech surprise was that Huawei brought out the

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Speaker 6: Mate sixty Pro as a competitive five G enabled handset

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Speaker 6: in China with a semiconductor or a processor, which was

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Speaker 6: a generation ahead of what we thought China could do.

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Speaker 6: And if you look at the body of the story

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Speaker 6: that Bloomberg wrote, many analysts on Wall Street now believe

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Speaker 6: that Huawei will overtake Apple in China, and that there

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Speaker 6: will be, whether it's nationalism or it's just simply a

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Speaker 6: price point issue. There is now a smartphone available in

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Speaker 6: the market made in China by a Chinese company that

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Speaker 6: from a tech perspective at least gets closer to Apple's iPhone.

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Speaker 2: But the ux there, I mean, ed, I imagine you're

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Speaker 2: playing around with a lot of new phones other than Apple, right,

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Speaker 2: does is the operating system on anything else?

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Speaker 1: Approach at all? The elegance of Apple's.

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Speaker 6: Not really I mean, and bear in mind that the

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Speaker 6: Chinese consumer buys motivated by technology.

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Speaker 7: They want the latest technology. You know.

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Speaker 6: I was being asked on TV show earlier about the

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Speaker 6: comparison between LVMH and Apple, and yes, true, there is

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Speaker 6: kind of a Chinese middle class consumer that buys Apple

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Speaker 6: because of the Western brand recognition, But they're really highly

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Speaker 6: motivated about technology advancement and the A seventeen processor in

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Speaker 6: this iPhone fifteen pro and Promax, Apple's latest silicon was

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Speaker 6: widely to be believed to be a driver of sales

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Speaker 6: because of its performance.

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Speaker 1: All right, great stuff, as always appreciate it. We like

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Speaker 1: the microphone in the shot there. That is very cool.

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Speaker 1: That's a Tom Keen effect. I think for those that

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Speaker 1: watching as.

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Speaker 2: You can see the Golden gate Bridge behind him, what

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Speaker 2: an amazing view.

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Speaker 1: Our offices in San Francisco are outstanding, which is no

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Speaker 1: surprise to guess. They're outstanding in every city where we

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Speaker 1: have an office. I don't know how they do it.

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Speaker 5: You're listening to the tape can's our live program Bloomberg

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Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

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Speaker 5: You can also listen live on Amazon Alexa from our

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Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

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Speaker 1: Matt Miller, Paul Sweeney live here in our Bloomberg Interactive

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Speaker 1: Brooker Studio. Also streaming live on that YouTube thing, so

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Speaker 1: to head over to YouTube dot com and search Bloomberg Radio.

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Speaker 1: You know, Matt and I were just talking we may

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Speaker 1: not be long here for this radio business John, because

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Speaker 1: we're talking about Matt and I are going to go

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Speaker 1: maybe start a private credit fund. I think that's where

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Speaker 1: we are, and an ATF and an ETF. Okay, we'll

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Speaker 1: do an ETF on that as well. So so alternative capital,

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Speaker 1: alternative markets a growing source of opportunities for retail investors,

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Speaker 1: not just big institutional investors. Michael Whites joins us. He's

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Speaker 1: a founder and president of yield Street. Joins us live

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Speaker 1: here in our Bloomberg Interactive Brooker studio. Michael talk to

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Speaker 1: us about yield Street, what do you guys do there,

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Speaker 1: and then we'll dig into the kind of the market option.

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Speaker 8: Well, thanks for having me. It's always great to be

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Speaker 8: back here at Bloomberg. So at yield Street, we are

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Speaker 8: focused on making alternative investments more available. So we want

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Speaker 8: to help people rebalance their portfolios, not to just include

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Speaker 8: stocks and bonds, but to have private market investments alongside

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Speaker 8: them in their portfolio. So at yild Street, what we

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Speaker 8: do is invest in institutional quality opportunities, think things like

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Speaker 8: private credit as you just mentioned, private equity, real estate,

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Speaker 8: fine art, legal finance, structured notes. Basically trying to help

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Speaker 8: people access a diversified portfolio of private investments. We put

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Speaker 8: those online or on our app, and we have over

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Speaker 8: four hundred thousand in our community who are investing in

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Speaker 8: these products all across America.

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Speaker 2: So how do you get these products? Which are I

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Speaker 2: think some of them intended for sophisticated investors, right. I

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Speaker 2: can't get into a lot of private investments without meeting

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Speaker 2: certain criteria out to a retail investor like me.

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Speaker 8: So there's different buckets in the US. From a regulatory

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Speaker 8: perspective about what you're able to invest in. I would

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Speaker 8: say our primary investor is going to be an accredited investor.

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Speaker 8: There's fourteen million of those that live here in America.

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Speaker 8: The definition of an accredited investor for those that don't know,

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Speaker 8: is if you're single, your two hundred thousand dollars. If

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Speaker 8: you're married or filing jointly, it's three hundred thousand dollars

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Speaker 8: of income or a million dollars in networth. There are

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Speaker 8: fourteen million people like that. The next level are people

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Speaker 8: who are yet to be a credit investor. Hopefully one

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Speaker 8: day they might be, and those are going to be

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Speaker 8: roughly thirty five million Americans who are looking to invest

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Speaker 8: in private markets or alternatives but don't meet that threshold.

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Speaker 8: For that audience of people, there are things like a

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Speaker 8: rate of forty act fund or other types of products

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Speaker 8: that are designed for that audience, and so at Yield Street,

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Speaker 8: we're able to create and package products in a way

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Speaker 8: that's accessible to these various audiences.

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Speaker 1: Interesting. So what are the we were just talking a

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Speaker 1: little bit about private credit. Talk to us about kind

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Speaker 1: of your experience with private credit kind of and and

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Speaker 1: for your clients as well, are they asking about private

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Speaker 1: credit that they want exposure there?

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Speaker 8: I think you just hit on on a hot button.

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Speaker 8: So you know, what I've seen is a major shift

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Speaker 8: in investor demand over the last year and a half.

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Speaker 8: If you think back to let's say January twenty two,

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Speaker 8: we were in an incredibly sort of bull cycle at

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Speaker 8: the time, if you will, and investors at large were

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Speaker 8: looking for a great story. They wanted that next real

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Speaker 8: estate opportunity they could own. They wanted that big private

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Speaker 8: equity idea. They wanted that next big venture back company.

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Speaker 8: What folks have shifted their appetite amidst all the volatility

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Speaker 8: and increase in rates is a little bit less volatility,

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Speaker 8: more consistency. They've asked for debt or debt like products

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Speaker 8: that have consistent coupons and shorter duration. So the most

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Speaker 8: popular things for us now are three to five years

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Speaker 8: paying some type of a coupon, have a debt like

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Speaker 8: product in so much as they have collateral that's really

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Speaker 8: where people have shifted their appetite to. So practically what

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Speaker 8: we've seen is real estate debt, art debt, private credit.

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Speaker 8: So think of like supply chain finance, receivable funding, purchase

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Speaker 8: order funding, so real credit like instruments.

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Speaker 1: So how do you so, what would be a product

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Speaker 1: if I want to in that supply chain thing, or

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Speaker 1: if I want to art debt? What do you do

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Speaker 1: for me? What's your platform do for me?

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Speaker 8: So I think I think right now it might be available.

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Speaker 8: I'm not sure, but you'd have to look. You'd have

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Speaker 8: to look at the website. So for example, an art debt, right, So,

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Speaker 8: we bought a business called Athena Fine Art from Carlisle

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Speaker 8: in twenty nineteen. I think we paid roughly one hundred

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Speaker 8: and seventy million dollars for it, and that is the

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Speaker 8: sort of the pre eminent blue chip fine art lender

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Speaker 8: in America. What the product will offer you is a

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Speaker 8: diversified portfolio of loans that we've made to collectors or

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Speaker 8: galleries or dealers who put up collateral of fine art.

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Speaker 8: So call it five or ten million dollar pieces of art,

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Speaker 8: We'll lend them forty or fifty percent loan to value

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Speaker 8: we put it in one portfolio, so you get diversification,

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Speaker 8: and we'll pay you ten percent per quarter for investing

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Speaker 8: in that product. Okay, that's the art. For example, in

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Speaker 8: our supply chain product, we have a product in supply

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Speaker 8: chain where I think we've invested north of six hundred

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Speaker 8: million dollars since we started that product. And what you

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Speaker 8: will invest in is a six month supply chain offering.

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Speaker 8: So you're investing in an opportunity to put up dollars today.

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Speaker 8: As the product is delivered and paid forward by a

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Speaker 8: company that's doing north of two billion in revenue in

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Speaker 8: six months time, they will pay us back and we

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Speaker 8: will make a we will make a payment to our investors.

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Speaker 8: I believe that's eleven percent annually and pays in six months.

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Speaker 8: So those are some ideas of how credit works in

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Speaker 8: the real estate debt. It could be a one to

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Speaker 8: two year bridge loan financing or a senior or a

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Speaker 8: senior mortgage, and I can carry on sort of across

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Speaker 8: the gamut. But those are legal.

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Speaker 2: Legal finance is another thing that you do right, yes, indeed,

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Speaker 2: So what does that mean? Like if you're someone wants

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Speaker 2: to bring a big lawsuit against a defendant needs to

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Speaker 2: fund that and then you take a cut of the winnings.

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Speaker 8: So in legal finance there are different aspects of that

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Speaker 8: industry across sort of the risk return gamut. So you

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Speaker 8: have I would say, look, the safest part of the

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Speaker 8: industry is a settled case financing, So somebody has achieved

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Speaker 8: the settlement. The settlement is to be paid over a

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Speaker 8: period of time. They want to access some capital earlier,

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Speaker 8: so effectively you are buying a stream of cashuole in

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Speaker 8: the future that's already been agreed upon and settled. The

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Speaker 8: second bucket is what we would call law firm financing.

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Speaker 8: So you have many law firms that only i would

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Speaker 8: say practice on a success fee, and so their cash

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Speaker 8: flow is very lumpy. But they may have a huge

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Speaker 8: inventory of investments, but they want to be able to

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Speaker 8: manage their cash flow needs, and so you will make

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Speaker 8: a loan to the law firm, and as the law

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Speaker 8: firm generates cash flow from its various cases, it will

438
00:22:18,600 --> 00:22:21,760
Speaker 8: repay its investors. The next bucket is going to be

439
00:22:21,800 --> 00:22:24,360
Speaker 8: more risky, whereas you can take an interest in if

440
00:22:24,400 --> 00:22:28,680
Speaker 8: you will, alongside a plaintiff. So somebody may come and say, hey,

441
00:22:28,720 --> 00:22:32,800
Speaker 8: we're going to pursue this corporation for doing something terrible,

442
00:22:32,840 --> 00:22:35,200
Speaker 8: and we believe we have a case. We need some

443
00:22:35,359 --> 00:22:37,879
Speaker 8: capital to be able to pursue that case or to

444
00:22:37,880 --> 00:22:40,520
Speaker 8: be able to meet our sort of expenses on an

445
00:22:40,560 --> 00:22:43,200
Speaker 8: ongoing basis. Would you like to share in the winnings

446
00:22:43,240 --> 00:22:46,080
Speaker 8: with me? So there's different ways to invest in legal finance.

447
00:22:46,520 --> 00:22:48,080
Speaker 8: Prior to starting yall Street, I was one of the

448
00:22:48,080 --> 00:22:50,600
Speaker 8: sort of the preeminent players in legal finance dating back

449
00:22:50,640 --> 00:22:52,840
Speaker 8: to two thousand and nine. So it's an assea class

450
00:22:52,840 --> 00:22:54,760
Speaker 8: we know super well. It's an area that I think

451
00:22:54,880 --> 00:22:56,720
Speaker 8: Yall Street has a tremendous amount of respect on the

452
00:22:56,720 --> 00:22:58,520
Speaker 8: street and continues to invest actively in.

453
00:22:58,680 --> 00:23:01,920
Speaker 2: But essentially, I mean the ten thousand foot views, you're

454
00:23:01,920 --> 00:23:07,960
Speaker 2: looking at people that have ill liquid assets, that need

455
00:23:08,080 --> 00:23:10,560
Speaker 2: access to cash, and so you're willing to put up

456
00:23:10,560 --> 00:23:13,439
Speaker 2: some cash against some of their less liquid assets like

457
00:23:14,040 --> 00:23:18,879
Speaker 2: five million dollar painting or legal fees that are coming

458
00:23:18,920 --> 00:23:20,200
Speaker 2: in a lumpy way.

459
00:23:20,560 --> 00:23:22,720
Speaker 8: I definitely think that's a part of the business. I

460
00:23:22,760 --> 00:23:26,160
Speaker 8: think the macro perspective is thirty percent of your portfolio

461
00:23:26,240 --> 00:23:29,600
Speaker 8: should be in alternative investments. People don't know how to

462
00:23:29,720 --> 00:23:32,240
Speaker 8: access it or have an enjoyable way or simple way

463
00:23:32,280 --> 00:23:34,800
Speaker 8: to access it. It is our duty to help you

464
00:23:34,880 --> 00:23:38,280
Speaker 8: build a diversified portfolio. We work with the pre eminent

465
00:23:38,320 --> 00:23:41,399
Speaker 8: managers across the street to partner with them and participate

466
00:23:41,440 --> 00:23:42,679
Speaker 8: and make that available to you.

467
00:23:42,840 --> 00:23:44,560
Speaker 1: That's a fascinating business. I'm glad we had you, and

468
00:23:44,560 --> 00:23:46,960
Speaker 1: I didn't even know that stuff existed, so I learned

469
00:23:46,960 --> 00:23:50,920
Speaker 1: something new on in finance. Michael White's founder and president

470
00:23:51,000 --> 00:23:53,320
Speaker 1: of Yield Street is the name of the firm. Pretty

471
00:23:53,359 --> 00:23:55,880
Speaker 1: cool business. You appreciate getting some of his time.

472
00:23:57,320 --> 00:24:01,160
Speaker 5: You're listening to the team canjer Line program Bloomberg Markets

473
00:24:01,200 --> 00:24:04,280
Speaker 5: weekdays at ten am Eastern on Bloomberg dot com, the

474
00:24:04,359 --> 00:24:07,520
Speaker 5: iHeartRadio app and the Bloomberg Business app, or listen on

475
00:24:07,560 --> 00:24:09,520
Speaker 5: demand wherever you get your podcast.

476
00:24:11,160 --> 00:24:13,280
Speaker 1: Joining us in a studio. Right here's Bobby Gost He's

477
00:24:13,320 --> 00:24:16,639
Speaker 1: the editor of a Bloomberg Opinion. Joined Bloomberg Opinion in

478
00:24:16,640 --> 00:24:19,480
Speaker 1: twenty eighteen. I'm looking at his CB. Dude, you've been busy.

479
00:24:19,920 --> 00:24:22,240
Speaker 1: You've been everywhere. Maybe can't hold a job off to

480
00:24:22,320 --> 00:24:25,040
Speaker 1: talk about that later, but Bobby's been all over the

481
00:24:25,040 --> 00:24:27,679
Speaker 1: place covering the global geopolitics, and we're so fortunate to

482
00:24:27,680 --> 00:24:29,320
Speaker 1: get a couple of minutes of his time here in

483
00:24:29,359 --> 00:24:31,720
Speaker 1: the Bloomberg Interactive Brokers studio. Bobby, I know you've written

484
00:24:32,400 --> 00:24:36,360
Speaker 1: extensively on what's happening in Israel. What's your view.

485
00:24:36,240 --> 00:24:39,480
Speaker 2: Kind of Well, let's start with what you think Hamas

486
00:24:39,560 --> 00:24:42,520
Speaker 2: was intended to do, Like, what did they want with

487
00:24:42,760 --> 00:24:50,720
Speaker 2: this brutal, horrendous terrorist attack Beyond spreading you know, hate

488
00:24:50,800 --> 00:24:53,639
Speaker 2: and fear, what do you think they wanted to achieve?

489
00:24:53,760 --> 00:24:56,840
Speaker 9: Well, they wanted to achieve a couple of things. First

490
00:24:56,840 --> 00:24:58,919
Speaker 9: and foremost, they wanted to kill as many Israelis as

491
00:24:58,920 --> 00:25:02,560
Speaker 9: they could, and they didn't whether there were civilians, children, women,

492
00:25:02,920 --> 00:25:06,520
Speaker 9: grown men, soldiers didn't matter. They just wanted to kill

493
00:25:06,560 --> 00:25:08,520
Speaker 9: as many people as they could, which is the basic

494
00:25:09,119 --> 00:25:11,919
Speaker 9: modus operandi of any terrorist group. The second thing they

495
00:25:12,000 --> 00:25:14,600
Speaker 9: wanted is they wanted to engage. They wanted to bring

496
00:25:15,000 --> 00:25:18,720
Speaker 9: Israel into Gaza again, sort of bring the fight back

497
00:25:18,760 --> 00:25:22,520
Speaker 9: into Gaza where lots of other civilians, now Palestinian civilians,

498
00:25:22,560 --> 00:25:24,800
Speaker 9: would die. That also suits Hamas perfectly.

499
00:25:24,800 --> 00:25:26,760
Speaker 2: Well, they don't their own people.

500
00:25:26,520 --> 00:25:29,280
Speaker 9: Absolutely not. That's where they live. That's the whole idea

501
00:25:29,600 --> 00:25:33,800
Speaker 9: of Hamas. They've always had this sort of apocalyptic view

502
00:25:33,880 --> 00:25:37,800
Speaker 9: of the world. And also then you have some other

503
00:25:37,920 --> 00:25:43,960
Speaker 9: political objectives. One is to end the rapprochma between Israel

504
00:25:44,040 --> 00:25:47,600
Speaker 9: and Arab countries, specifically the deal that was very slowly

505
00:25:47,640 --> 00:25:52,359
Speaker 9: developing between Israel and Saudi Arabia. Remember, Hamas also has

506
00:25:52,480 --> 00:25:55,840
Speaker 9: answers to a master in Tehran, the Iranian regime, which

507
00:25:55,920 --> 00:25:58,320
Speaker 9: pays their bills and which has supported Hamas for a

508
00:25:58,359 --> 00:26:00,960
Speaker 9: couple of decades. Now this is part of the Iranian

509
00:26:01,000 --> 00:26:03,600
Speaker 9: agenda as well, to keep them addle East in play,

510
00:26:03,680 --> 00:26:07,159
Speaker 9: to keep things unstable, so that the eyes of the

511
00:26:07,200 --> 00:26:09,879
Speaker 9: world are on these various other things when we are

512
00:26:09,880 --> 00:26:12,560
Speaker 9: not paying attention to what's happening in Iran. So lots

513
00:26:12,600 --> 00:26:15,800
Speaker 9: of different goals, some big, some small, some very local,

514
00:26:15,880 --> 00:26:20,200
Speaker 9: some regional. So far, I'm sorry to say, Hamas seems

515
00:26:20,200 --> 00:26:21,720
Speaker 9: to be achieving most of its goals.

516
00:26:22,080 --> 00:26:25,800
Speaker 1: So now it's I guess the turn of Israel to respond,

517
00:26:26,440 --> 00:26:28,320
Speaker 1: what do you think they should do? And what do

518
00:26:28,359 --> 00:26:29,280
Speaker 1: you think they will do?

519
00:26:29,400 --> 00:26:30,720
Speaker 8: They're gonna do exactly.

520
00:26:30,480 --> 00:26:33,320
Speaker 1: What wants them to do, right, that's yeah.

521
00:26:33,359 --> 00:26:36,640
Speaker 9: I mean, look, Natanya, who is damned if he does

522
00:26:36,640 --> 00:26:40,360
Speaker 9: and he's damned if he doesn't. So as he has

523
00:26:40,400 --> 00:26:42,840
Speaker 9: always done in his career, he'll be damned if he does.

524
00:26:43,760 --> 00:26:43,879
Speaker 5: So.

525
00:26:44,280 --> 00:26:46,240
Speaker 9: I suspect he will go in and go in in

526
00:26:46,600 --> 00:26:53,840
Speaker 9: strength and try to disarm and decapitate Hamas. But we've

527
00:26:53,920 --> 00:26:56,119
Speaker 9: learned this from the past that this is not that

528
00:26:56,359 --> 00:26:58,720
Speaker 9: kind of a creature. This is not a traditional army,

529
00:26:58,840 --> 00:27:01,399
Speaker 9: This is not even a tradition terrorist group. This is

530
00:27:01,440 --> 00:27:05,000
Speaker 9: somewhere in between those two things. And so going in,

531
00:27:05,560 --> 00:27:11,960
Speaker 9: guns blazing, bringing down entire neighborhoods, forcing a million Palestinians

532
00:27:11,960 --> 00:27:14,680
Speaker 9: and Gaza to sort of head for the hills.

533
00:27:14,760 --> 00:27:15,400
Speaker 5: So it was.

534
00:27:15,560 --> 00:27:21,480
Speaker 9: These things don't really get to the objective that Israelis

535
00:27:21,560 --> 00:27:25,680
Speaker 9: say they want, which is to completely destroy her mass.

536
00:27:25,720 --> 00:27:27,880
Speaker 9: This is not that kind of creature. You can't completely

537
00:27:27,960 --> 00:27:31,399
Speaker 9: destroy her mass because with every effort you make, you

538
00:27:31,560 --> 00:27:36,440
Speaker 9: are potentially radicalizing young Palestinians who are today seeing their

539
00:27:36,440 --> 00:27:39,320
Speaker 9: houses being blown down, who are seeing we're being forced

540
00:27:39,320 --> 00:27:43,640
Speaker 9: to flee, who are seeing their entire population being denied water,

541
00:27:43,760 --> 00:27:46,480
Speaker 9: denied electricity, all those things. So even as you kill

542
00:27:46,960 --> 00:27:50,120
Speaker 9: a thousand Hermas soldiers, the risk is that a thousand

543
00:27:50,320 --> 00:27:55,280
Speaker 9: new Hermas recruits are being born. Metaphorically speaking, even as we.

544
00:27:55,240 --> 00:28:01,399
Speaker 2: Speak, what's the answer here, to limit civilian deaths, especially

545
00:28:01,440 --> 00:28:05,160
Speaker 2: of women and children, is their way to let them

546
00:28:05,200 --> 00:28:06,320
Speaker 2: out of Gaza.

547
00:28:07,359 --> 00:28:08,879
Speaker 1: And I know you want to.

548
00:28:08,880 --> 00:28:16,199
Speaker 2: Avoid taking all the Palestinians out of Gaza, right because that's.

549
00:28:13,520 --> 00:28:16,960
Speaker 9: The soldiers will go in that But we also have

550
00:28:17,000 --> 00:28:19,960
Speaker 9: to start with the reckoning that not everybody wants to leave.

551
00:28:20,040 --> 00:28:22,960
Speaker 9: Quite a lot of people in Palestine don't in Gaza

552
00:28:22,960 --> 00:28:24,840
Speaker 9: don't want to leave because they're terrified that they won't

553
00:28:24,840 --> 00:28:27,720
Speaker 9: be allowed back. For good reason that you know, many

554
00:28:27,760 --> 00:28:30,520
Speaker 9: of the majority of people who live in Gaza are

555
00:28:31,480 --> 00:28:35,520
Speaker 9: children and grandchildren of former refugees who were who fled

556
00:28:35,560 --> 00:28:37,960
Speaker 9: to Gaza from other places in Israel and never got

557
00:28:37,960 --> 00:28:40,280
Speaker 9: to go back to their homes. And so the people

558
00:28:40,280 --> 00:28:42,560
Speaker 9: in Gaza live in fear that if they leave now,

559
00:28:42,640 --> 00:28:45,920
Speaker 9: they will not be allowed back. But at the same time,

560
00:28:46,000 --> 00:28:48,520
Speaker 9: as the bombs come down, as their houses collapse, they

561
00:28:48,560 --> 00:28:50,800
Speaker 9: want they want their families to be safe. So there

562
00:28:50,840 --> 00:28:53,520
Speaker 9: will be a proportion of people who at least want

563
00:28:53,520 --> 00:28:57,640
Speaker 9: to get their children out. The question the trouble is

564
00:28:58,400 --> 00:29:03,440
Speaker 9: where can nobody want That's the tragedy of Gaza. They

565
00:29:03,440 --> 00:29:07,320
Speaker 9: have to deal with Hamas on one side, Israel on

566
00:29:07,360 --> 00:29:10,320
Speaker 9: the other side. They've got no place to go. None

567
00:29:10,320 --> 00:29:13,920
Speaker 9: of the other Arab countries want them because Indians. They

568
00:29:13,960 --> 00:29:16,200
Speaker 9: don't want the Palestinians because for two reasons. One is

569
00:29:16,240 --> 00:29:19,200
Speaker 9: they say, look, the Egyptians say this, first and foremost,

570
00:29:19,320 --> 00:29:22,320
Speaker 9: you bring hundreds of thousands of Palestinians into Egypt. That

571
00:29:22,360 --> 00:29:26,080
Speaker 9: creates a security problem for Egypt. The second thing they

572
00:29:26,080 --> 00:29:29,720
Speaker 9: say is that, look, you bring these people out of Palestine,

573
00:29:30,160 --> 00:29:33,480
Speaker 9: you're letting Israel off the hook, out of sight, out

574
00:29:33,480 --> 00:29:36,040
Speaker 9: of mind. Once the Palaestinians have left Palestine, then Israel

575
00:29:36,120 --> 00:29:40,440
Speaker 9: doesn't face any pressure to solve the problem. And then

576
00:29:40,480 --> 00:29:43,400
Speaker 9: there's the sort of cold reality, which is that these

577
00:29:43,440 --> 00:29:46,320
Speaker 9: countries simply don't want the headache of having to deal

578
00:29:46,400 --> 00:29:50,080
Speaker 9: with hundreds of thousands of Palestinians in their.

579
00:29:50,000 --> 00:29:53,040
Speaker 1: Midst Here's my naive question of the day. To what

580
00:29:53,200 --> 00:29:58,640
Speaker 1: extent does Hamas enjoy the support of the Palestinian people

581
00:29:58,640 --> 00:30:01,520
Speaker 1: in Gaza? Questions I asked much.

582
00:30:01,400 --> 00:30:02,080
Speaker 9: That's a good question.

583
00:30:02,120 --> 00:30:06,960
Speaker 1: Why don't they Why don't they force Hamas out somehow?

584
00:30:07,520 --> 00:30:08,240
Speaker 1: I don't. I don't know.

585
00:30:08,320 --> 00:30:11,040
Speaker 9: It's it's a question that I've asked myself a thousand times.

586
00:30:11,120 --> 00:30:14,120
Speaker 9: When I used to go to Gaza. The thing is

587
00:30:14,160 --> 00:30:19,560
Speaker 9: that Hamas has the guns. Ordinary citizens can't really afford

588
00:30:19,640 --> 00:30:23,400
Speaker 9: to rise up against Hamas because they've got again, they've

589
00:30:23,400 --> 00:30:26,440
Speaker 9: got no place to run. There's nobody backing them. Right

590
00:30:26,600 --> 00:30:30,440
Speaker 9: in other situations like this, why you have an armed

591
00:30:30,440 --> 00:30:35,920
Speaker 9: group subjugating the populace. The populace has or can at

592
00:30:36,000 --> 00:30:38,479
Speaker 9: least hope that somebody else will support them if they

593
00:30:38,560 --> 00:30:41,360
Speaker 9: rise up. Who's going to help the Palestinians if they

594
00:30:41,400 --> 00:30:41,760
Speaker 9: rise up?

595
00:30:41,880 --> 00:30:43,520
Speaker 1: Will it be there any entities?

596
00:30:44,880 --> 00:30:49,880
Speaker 9: Right now? The PLA is now long past it's revolutionary credentials.

597
00:30:49,920 --> 00:30:53,760
Speaker 9: It's a deeply corrupt, inept organizations. It's been right. They've

598
00:30:53,760 --> 00:30:57,239
Speaker 9: had no elections in sort of two decades. They're being

599
00:30:57,320 --> 00:31:01,440
Speaker 9: run by a gerontocracy of deeply corrupt and inept individuals.

600
00:31:01,440 --> 00:31:04,120
Speaker 9: So the PLA is out. It took them nearly a

601
00:31:04,160 --> 00:31:06,400
Speaker 9: week to come up with a statement to say Hamas

602
00:31:06,440 --> 00:31:09,960
Speaker 9: doesn't represent the Palestinian people. This should have been their

603
00:31:10,000 --> 00:31:12,960
Speaker 9: statement within minutes of the first news breaking, It took

604
00:31:12,960 --> 00:31:14,800
Speaker 9: them a week. That gives you a sense of how

605
00:31:14,920 --> 00:31:19,440
Speaker 9: useless their political leaders are. So they are really the

606
00:31:19,560 --> 00:31:21,920
Speaker 9: people of Gaza are really caught in a bad place.

607
00:31:22,160 --> 00:31:26,080
Speaker 9: We can never really know. There's plenty of anecdotal evidence

608
00:31:26,280 --> 00:31:29,840
Speaker 9: that they don't like Hamas. Whenever they've had an opportunity

609
00:31:29,920 --> 00:31:31,800
Speaker 9: to express that, that's the expression that.

610
00:31:31,760 --> 00:31:35,440
Speaker 2: They've given the Palestinian people in Gaza, particularly because I've.

611
00:31:35,360 --> 00:31:36,400
Speaker 1: Heard conflicting reports.

612
00:31:36,400 --> 00:31:38,920
Speaker 2: Some people say, you know, of course, very few of

613
00:31:38,960 --> 00:31:41,040
Speaker 2: them support Hamas than others say.

614
00:31:41,920 --> 00:31:42,680
Speaker 1: People I've talked to.

615
00:31:42,760 --> 00:31:45,600
Speaker 2: Last week say fifty percent of them like Hamas and

616
00:31:45,120 --> 00:31:48,200
Speaker 2: the others want someone a little bit more extreme than Hamas.

617
00:31:48,360 --> 00:31:50,560
Speaker 9: No, I wouldn't go that far. These are people who've

618
00:31:50,600 --> 00:31:54,920
Speaker 9: lived through the consequences of Hamas running their little enclave,

619
00:31:55,000 --> 00:31:59,360
Speaker 9: and they know what damage that has done. I'm forgive me.

620
00:32:00,120 --> 00:32:04,280
Speaker 9: Everybody I've ever talked to has said, we would like

621
00:32:04,480 --> 00:32:06,520
Speaker 9: not to have to depend on Hamas, but we've got

622
00:32:06,600 --> 00:32:09,160
Speaker 9: nothing else. We can never know because you can't hold

623
00:32:09,160 --> 00:32:11,200
Speaker 9: a pole. You can't hold an opinion poll in a

624
00:32:11,200 --> 00:32:13,280
Speaker 9: place like that with the Hamas guns around you. It's

625
00:32:13,320 --> 00:32:15,400
Speaker 9: like trying to hold it. How many people support Putin

626
00:32:15,440 --> 00:32:17,760
Speaker 9: in Russia? Right, We can never know. How many people

627
00:32:18,000 --> 00:32:21,520
Speaker 9: support the Castros in Cuba. We can never know because

628
00:32:21,560 --> 00:32:23,360
Speaker 9: people are not allowed to express themselves freely.

629
00:32:24,040 --> 00:32:27,880
Speaker 1: Do do you expect this to get really bad, to

630
00:32:27,920 --> 00:32:31,680
Speaker 1: widen out where Iran is involved. Is that something that

631
00:32:31,920 --> 00:32:33,720
Speaker 1: is a reasonable risk here that we need to be

632
00:32:33,840 --> 00:32:36,640
Speaker 1: I mean, I see the US sending a second carrier

633
00:32:36,680 --> 00:32:38,760
Speaker 1: group in there, which to me tells me that the

634
00:32:38,880 --> 00:32:42,000
Speaker 1: US is does have a valid concern about Iran.

635
00:32:42,400 --> 00:32:46,240
Speaker 9: Well, if we have, we should be concerned about Iran.

636
00:32:46,320 --> 00:32:49,680
Speaker 9: But I can't see the Ruanians themselves get involved. The

637
00:32:50,040 --> 00:32:52,880
Speaker 9: Iranian modus operandi with Israel has always been they will

638
00:32:52,920 --> 00:32:55,720
Speaker 9: fight to the last Arab. They don't want their blood

639
00:32:55,800 --> 00:32:58,160
Speaker 9: on the line, they don't want their people and their

640
00:32:58,200 --> 00:33:02,400
Speaker 9: regime at risk, happy to fight using other people as

641
00:33:02,400 --> 00:33:06,560
Speaker 9: they can and fodder, which is what Hamas is. But

642
00:33:06,640 --> 00:33:09,600
Speaker 9: they do have other proxies has Belah, most prominently the

643
00:33:10,240 --> 00:33:13,720
Speaker 9: Chiai militias in Iraq, the Hutis and Yemen. They've got

644
00:33:14,000 --> 00:33:18,080
Speaker 9: the sort of a number of catspaws, these little proxy

645
00:33:18,200 --> 00:33:21,880
Speaker 9: armies that they have supplied and trained and paid for

646
00:33:21,760 --> 00:33:25,720
Speaker 9: for decades. And that's what is the main concern. If

647
00:33:25,760 --> 00:33:26,880
Speaker 9: Hezbullah gets in.

648
00:33:27,560 --> 00:33:30,360
Speaker 2: Why does the Arab world allow them to have so

649
00:33:30,440 --> 00:33:31,280
Speaker 2: many proxies?

650
00:33:31,320 --> 00:33:32,240
Speaker 8: I mean, why.

651
00:33:33,560 --> 00:33:39,440
Speaker 2: Don't Saudi Arabia and Egypt. You know, Jordan, get together

652
00:33:39,720 --> 00:33:42,760
Speaker 2: and say no more of this Iranian outreach.

653
00:33:42,480 --> 00:33:44,760
Speaker 9: Because they're not led very well. They're not led by

654
00:33:44,920 --> 00:33:51,320
Speaker 9: by they're not open free societies, they're not elected representative leaders.

655
00:33:51,320 --> 00:33:55,840
Speaker 9: These are monarchies or dictatorships. They're highly corrupt and highly

656
00:33:55,840 --> 00:33:58,000
Speaker 9: not I mean the Saudi army. Take this out the

657
00:33:58,080 --> 00:34:00,360
Speaker 9: army for example, this is one of the if you

658
00:34:00,400 --> 00:34:03,200
Speaker 9: looked at just their hardware, they've been buying American best

659
00:34:03,200 --> 00:34:07,600
Speaker 9: of American military hardware forever, right. They pay top dollars.

660
00:34:07,600 --> 00:34:09,919
Speaker 9: They've got no shortage of money, and they buy the best,

661
00:34:10,040 --> 00:34:15,319
Speaker 9: shiniest weapons. And they got there. They got trashed by

662
00:34:15,600 --> 00:34:19,560
Speaker 9: these hoo thies in Yemen who are basically operating on

663
00:34:21,080 --> 00:34:25,040
Speaker 9: early twentieth century military strategies and sort of maybe late

664
00:34:25,040 --> 00:34:29,920
Speaker 9: twentieth century hardware. They got beaten to a pulp. These armies,

665
00:34:30,120 --> 00:34:33,319
Speaker 9: most of these Arab armies, are designed to protect the

666
00:34:33,400 --> 00:34:37,160
Speaker 9: regime from their own people. These armies are good at

667
00:34:37,239 --> 00:34:41,080
Speaker 9: beating up unarmed pro democracy protesters. They're no good at

668
00:34:41,160 --> 00:34:45,279
Speaker 9: actually fighting any wars, which is why they depend on

669
00:34:45,280 --> 00:34:48,560
Speaker 9: the American security umbrella, which is why they're not capable

670
00:34:48,600 --> 00:34:49,719
Speaker 9: of securing themselves.

671
00:34:50,040 --> 00:34:52,560
Speaker 1: Bobby, Thanks, so much for journeys. Really appreciate it. I

672
00:34:52,600 --> 00:34:53,920
Speaker 1: really try to read your stuff. Now. I'm going to

673
00:34:53,960 --> 00:34:55,400
Speaker 1: set up an alert because mentioned we had to set

674
00:34:55,440 --> 00:34:56,919
Speaker 1: up alert so I never miss any of your stuff.

675
00:34:56,920 --> 00:34:59,359
Speaker 1: Bobby Goes, he's the editor for Bloomberg Companion. We really

676
00:34:59,400 --> 00:35:01,520
Speaker 1: appreciate getting a few minutes of his time as we

677
00:35:01,560 --> 00:35:03,080
Speaker 1: try to figure out kind of what's I mean. We

678
00:35:03,120 --> 00:35:04,279
Speaker 1: could talk to Bobby for an hour.

679
00:35:04,880 --> 00:35:07,359
Speaker 5: I know you're listening to the tape. Can's our live

680
00:35:07,440 --> 00:35:11,840
Speaker 5: program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio,

681
00:35:12,000 --> 00:35:14,719
Speaker 5: the tune in app, Bloomberg dot Com, and the Bloomberg

682
00:35:14,760 --> 00:35:17,840
Speaker 5: Business App. You can also listen live on Amazon Alexa

683
00:35:17,920 --> 00:35:21,240
Speaker 5: from our flagship New York station, just say Alexa playing

684
00:35:21,320 --> 00:35:23,320
Speaker 5: Bloomberg eleven thirty.

685
00:35:24,239 --> 00:35:26,440
Speaker 1: Let's talk about the ipo market. You're just talking earlier

686
00:35:26,440 --> 00:35:29,680
Speaker 1: about Birkenstock. That was the latest of a number of

687
00:35:29,719 --> 00:35:32,680
Speaker 1: IPOs that we've seen since kind of that Labor Day weekend.

688
00:35:32,719 --> 00:35:34,440
Speaker 1: We had a bunch of them kind of teed up.

689
00:35:34,880 --> 00:35:37,840
Speaker 1: Birkenstock's trading up four percent today, but it is below

690
00:35:37,880 --> 00:35:40,880
Speaker 1: its ipo price. The question is, is this mark a

691
00:35:40,880 --> 00:35:44,080
Speaker 1: little bit of a beginning of reawakening of the IPO market.

692
00:35:44,480 --> 00:35:46,200
Speaker 1: Let's check in with our next guest. I think she

693
00:35:46,320 --> 00:35:48,719
Speaker 1: may have an opinion here. Katie Penny joins us. She

694
00:35:48,800 --> 00:35:53,360
Speaker 1: said of corporate transaction practice at Cross Country Consulting. She

695
00:35:53,480 --> 00:35:55,719
Speaker 1: joins us via zoom. Katie, thanks so much for joining

696
00:35:55,800 --> 00:35:59,279
Speaker 1: us here. We had a little open window there in

697
00:35:59,280 --> 00:36:01,680
Speaker 1: the IPO market right after Labor Day. Seems people were

698
00:36:01,680 --> 00:36:03,880
Speaker 1: getting back to work, getting off the beach. Talk to

699
00:36:03,960 --> 00:36:05,880
Speaker 1: us about kind of the IPO market today is at

700
00:36:05,920 --> 00:36:10,160
Speaker 1: the beginning of maybe a wider opening of this window

701
00:36:10,360 --> 00:36:10,680
Speaker 1: or not.

702
00:36:12,400 --> 00:36:15,719
Speaker 4: Yeah, thanks Paul and Matt for having me. You know,

703
00:36:15,840 --> 00:36:20,200
Speaker 4: certainly post Labor Day with arm and Instacart and the

704
00:36:20,239 --> 00:36:25,520
Speaker 4: most recent Birkenstock all coming out into the market, certainly

705
00:36:25,600 --> 00:36:30,520
Speaker 4: attracting attention as it relates to the IPO markets. But

706
00:36:30,600 --> 00:36:34,200
Speaker 4: I think in general what we have seen is with

707
00:36:34,719 --> 00:36:39,960
Speaker 4: the market volatility and the after market performance from each

708
00:36:40,000 --> 00:36:42,960
Speaker 4: of those that I specifically named, but others as well,

709
00:36:43,040 --> 00:36:48,160
Speaker 4: that in that net decline position. I think again there

710
00:36:48,360 --> 00:36:51,200
Speaker 4: likely could be some delays that are coming through as

711
00:36:51,200 --> 00:36:54,120
Speaker 4: it relates to those that might be considering going public.

712
00:36:54,400 --> 00:36:59,800
Speaker 4: I mean, Birkenstock is a strong brand, profitable company, steady

713
00:37:00,000 --> 00:37:04,960
Speaker 4: consumer base, and it is early, but with price declines

714
00:37:05,080 --> 00:37:08,400
Speaker 4: after their market debut, I think this may delay some

715
00:37:08,520 --> 00:37:12,080
Speaker 4: other companies that maybe considering an IPO debut right now.

716
00:37:12,920 --> 00:37:17,520
Speaker 2: Is I wonder if the problem with IPOs is that

717
00:37:17,760 --> 00:37:21,440
Speaker 2: the market environment is no good for them, or that

718
00:37:21,600 --> 00:37:25,879
Speaker 2: companies don't necessarily need to come to market the way

719
00:37:25,920 --> 00:37:28,240
Speaker 2: they previously did for their exits.

720
00:37:28,239 --> 00:37:28,799
Speaker 8: What do you think?

721
00:37:30,160 --> 00:37:33,440
Speaker 4: Yeah, I think the market environment certainly is not in

722
00:37:33,560 --> 00:37:36,520
Speaker 4: their favor. I mean, if we reflect back, we know

723
00:37:36,600 --> 00:37:40,160
Speaker 4: twenty two was certainly a stagnant year, but looking back

724
00:37:40,239 --> 00:37:44,160
Speaker 4: to twenty one when IPOs were at their ultimate high,

725
00:37:44,800 --> 00:37:47,760
Speaker 4: thinking about that strong and steady flow at that point,

726
00:37:47,760 --> 00:37:51,600
Speaker 4: you know, what were market conditions then, and consumers and

727
00:37:51,640 --> 00:37:56,239
Speaker 4: companies were coming out of hibernation so to speak, post pandemic.

728
00:37:56,560 --> 00:38:03,120
Speaker 4: Interest rates were low, financing was inexpensetive, consumer spending was up.

729
00:38:03,719 --> 00:38:06,000
Speaker 4: We know, valuations were high, and there was a lot

730
00:38:06,040 --> 00:38:10,480
Speaker 4: of focus on growth strategy, all of those influencing the

731
00:38:10,840 --> 00:38:14,600
Speaker 4: IPO markets. But if we take a look today, those

732
00:38:14,600 --> 00:38:19,319
Speaker 4: same conditions don't exist. We know interest rates are high,

733
00:38:19,320 --> 00:38:20,799
Speaker 4: and you were talking about that on one of your

734
00:38:20,800 --> 00:38:25,239
Speaker 4: earlier segments, the possibility of another rate increase, and this

735
00:38:25,400 --> 00:38:29,920
Speaker 4: concept of staying higher for longer certainly drives the cost

736
00:38:29,960 --> 00:38:35,440
Speaker 4: of capital to be expensive. There has been some discussion,

737
00:38:35,480 --> 00:38:38,080
Speaker 4: I know, around the pandemic savings coming to an end,

738
00:38:38,120 --> 00:38:44,000
Speaker 4: student loan payments, all coming back the geopolitical certainly as

739
00:38:44,000 --> 00:38:46,440
Speaker 4: it relates to Ukraine, and as I noticed on your

740
00:38:46,440 --> 00:38:50,279
Speaker 4: prior segment, the devastation and conflict in Israel, all of

741
00:38:50,320 --> 00:38:55,400
Speaker 4: those factors really being fluid and compounding and really I

742
00:38:55,400 --> 00:38:58,560
Speaker 4: think having some negative impact as it relates to those

743
00:38:58,560 --> 00:39:01,839
Speaker 4: that are considering coming into market through an IPO. So

744
00:39:02,200 --> 00:39:04,399
Speaker 4: some really tough market dynamics right now.

745
00:39:04,920 --> 00:39:09,400
Speaker 1: Hey, Katie, Back when I was doing these IPOs for business,

746
00:39:09,400 --> 00:39:14,440
Speaker 1: we never used these anchor investors. My anchor investor was

747
00:39:14,440 --> 00:39:16,880
Speaker 1: always Fidelity. I mean he was tooking twice the allocation

748
00:39:16,960 --> 00:39:21,000
Speaker 1: of the next highest of the number two offering. That

749
00:39:21,120 --> 00:39:23,600
Speaker 1: was kind of my anchor. But talk to us about

750
00:39:23,640 --> 00:39:25,799
Speaker 1: that anchor investor kind of thing. It seems to become

751
00:39:25,840 --> 00:39:27,080
Speaker 1: a little bit of a strategy here.

752
00:39:28,920 --> 00:39:31,560
Speaker 4: Yeah, I would say some companies, and this is somewhat

753
00:39:31,640 --> 00:39:34,200
Speaker 4: more more recent. So same as I look over my

754
00:39:34,320 --> 00:39:38,320
Speaker 4: career as well, it wasn't often to have these anchor

755
00:39:38,360 --> 00:39:42,680
Speaker 4: investors or cornerstones. But some companies with the strategy of

756
00:39:42,719 --> 00:39:46,120
Speaker 4: looking to potentially de risk their IPO through this way,

757
00:39:46,200 --> 00:39:51,719
Speaker 4: so more or less talking with investors early, using a

758
00:39:51,760 --> 00:39:56,600
Speaker 4: strategy to identify these anchor investors or cornerstones, really with

759
00:39:56,719 --> 00:40:01,200
Speaker 4: the idea to more or less attempt to demonstratevalidation and

760
00:40:01,280 --> 00:40:03,040
Speaker 4: confidence in their offering.

761
00:40:04,239 --> 00:40:06,520
Speaker 1: I don't know. I kind of when I first saw that,

762
00:40:06,560 --> 00:40:08,800
Speaker 1: I said, this is a deal that needs an anchor,

763
00:40:10,600 --> 00:40:13,439
Speaker 1: maybe can't stand on its own. That was my view.

764
00:40:14,520 --> 00:40:16,560
Speaker 1: I don't know, but I guess this seems to be

765
00:40:16,600 --> 00:40:18,840
Speaker 1: a little bit more accepted in the IPO marketplace. I

766
00:40:18,880 --> 00:40:20,759
Speaker 1: was wondering if that's just reflection something that seems to

767
00:40:20,800 --> 00:40:21,480
Speaker 1: have carried.

768
00:40:21,239 --> 00:40:23,839
Speaker 2: Over from spack investments.

769
00:40:23,040 --> 00:40:26,960
Speaker 1: Maybe, you know, maybe. So, how's the pipeline look, Katie,

770
00:40:27,000 --> 00:40:29,239
Speaker 1: as you look towards the remainder of the year.

771
00:40:31,200 --> 00:40:35,319
Speaker 4: Yeah, I think as far as looking out that more

772
00:40:35,440 --> 00:40:38,320
Speaker 4: or less given some of the challenges that we just mentioned,

773
00:40:38,760 --> 00:40:42,240
Speaker 4: it's really creating dynamics for the IPO market and again

774
00:40:42,400 --> 00:40:44,680
Speaker 4: reflecting on some of these that as we talk about

775
00:40:44,680 --> 00:40:48,000
Speaker 4: come out post Labor Day there after, market overall kind

776
00:40:48,000 --> 00:40:51,839
Speaker 4: of net decline. I'm not expecting to see a significant

777
00:40:51,960 --> 00:40:56,520
Speaker 4: uptick in IP as for the remainder of twenty twenty four. Certainly,

778
00:40:56,560 --> 00:40:59,799
Speaker 4: maybe if some of these challenges begin to subside, or

779
00:41:00,000 --> 00:41:03,440
Speaker 4: again we tend to move things to think of them

780
00:41:03,440 --> 00:41:07,000
Speaker 4: as normalcy, then there may be more periods for entry

781
00:41:07,040 --> 00:41:09,759
Speaker 4: as we head into the first half of twenty four

782
00:41:10,840 --> 00:41:14,640
Speaker 4: before the electioneers that again might narrow the window a bit.

783
00:41:14,760 --> 00:41:18,000
Speaker 4: So I think it'll again through the rest of this year.

784
00:41:18,320 --> 00:41:21,279
Speaker 4: I'm not expecting it a significant uptick, all right.

785
00:41:21,360 --> 00:41:22,440
Speaker 1: I don't know. If I had the S and P

786
00:41:22,560 --> 00:41:24,719
Speaker 1: up fifteen percent, I could get some companies through. I

787
00:41:24,760 --> 00:41:27,120
Speaker 1: don't know what these kids are doing today. Katie Penny,

788
00:41:27,120 --> 00:41:29,120
Speaker 1: thanks so much for joining as head of corporate Transaction

789
00:41:29,200 --> 00:41:33,120
Speaker 1: Practice at Cross Country Consulting. I mean, the deal's coming

790
00:41:33,120 --> 00:41:36,600
Speaker 1: out after the Liberty they all look like good companies,

791
00:41:36,640 --> 00:41:39,000
Speaker 1: you know, and they really Yeah, I thought they were.

792
00:41:39,239 --> 00:41:40,839
Speaker 2: I mean, there were a couple of companies I still

793
00:41:40,840 --> 00:41:42,560
Speaker 2: don't know exactly what they were doing.

794
00:41:42,640 --> 00:41:43,839
Speaker 1: I thought they were. I thought they were. I mean,

795
00:41:44,239 --> 00:41:46,239
Speaker 1: you know, ARM is a chip company. I don't know

796
00:41:46,280 --> 00:41:48,400
Speaker 1: that kind of felt like there were some solid companies,

797
00:41:48,440 --> 00:41:48,879
Speaker 1: solid track.

798
00:41:49,000 --> 00:41:54,719
Speaker 2: I get ARM for sure, Instacart two Kava, I get that. Yeah,

799
00:41:55,040 --> 00:41:56,280
Speaker 2: Burgenstock for sure.

800
00:41:56,400 --> 00:41:56,600
Speaker 8: Yeah.

801
00:41:56,640 --> 00:41:58,040
Speaker 1: So I mean I thought they were real companies, real

802
00:41:58,080 --> 00:42:00,520
Speaker 1: real businesses, real cash flows spread. They haven't trade a

803
00:42:00,520 --> 00:42:02,279
Speaker 1: little bit better, but we'll have to see.

804
00:42:02,280 --> 00:42:05,360
Speaker 5: Here you're listening to the tape. Cat's a our live program,

805
00:42:05,400 --> 00:42:09,360
Speaker 5: Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio,

806
00:42:09,520 --> 00:42:12,239
Speaker 5: the tune in app, Bloomberg dot Com, and the Bloomberg

807
00:42:12,280 --> 00:42:15,400
Speaker 5: Business app. You can also listen live on Amazon Alexa

808
00:42:15,440 --> 00:42:18,719
Speaker 5: from our flagship New York station. Just say Alexa play

809
00:42:18,840 --> 00:42:20,840
Speaker 5: Bloomberg eleven thirty.

810
00:42:21,800 --> 00:42:23,640
Speaker 1: Well, we're right in the midst of a lot of

811
00:42:23,640 --> 00:42:27,440
Speaker 1: the big banks reporting earnings, and obviously one of the

812
00:42:27,520 --> 00:42:31,640
Speaker 1: key topics it's just the advances in financial technology, how

813
00:42:31,640 --> 00:42:35,120
Speaker 1: they're trying to capitalize on that, how it represents fintech

814
00:42:35,160 --> 00:42:37,920
Speaker 1: represents perhaps a competitive threat. So we want to dive

815
00:42:37,920 --> 00:42:40,560
Speaker 1: a little deeper into that. Brian Hindeman he joins us.

816
00:42:40,560 --> 00:42:43,480
Speaker 1: He's the CEO of Blue Ocean Technologies. He joins us

817
00:42:43,600 --> 00:42:45,839
Speaker 1: via zoom Brian, thanks so much for joining us here.

818
00:42:45,920 --> 00:42:48,319
Speaker 1: Let's just take the thirty thousand foot view here talk

819
00:42:48,320 --> 00:42:51,600
Speaker 1: to us about Blue Ocean Technologies. What do you guys,

820
00:42:52,040 --> 00:42:53,720
Speaker 1: how do you guys play in this fintech space?

821
00:42:54,360 --> 00:42:57,120
Speaker 10: Yeah, well thanks for having me so very simply, Blue

822
00:42:57,120 --> 00:43:01,320
Speaker 10: Ocean Technologies, we have an ATS, a alternative trading system.

823
00:43:02,160 --> 00:43:05,880
Speaker 10: We trade US stocks National Market system stocks when the

824
00:43:05,920 --> 00:43:10,560
Speaker 10: traditional exchanges are closed. So starting at eight o'clock PM

825
00:43:10,600 --> 00:43:13,440
Speaker 10: Eastern Time to four o'clock in the morning, we'll trade

826
00:43:13,800 --> 00:43:19,279
Speaker 10: the most active National Market System US stocks during that

827
00:43:19,320 --> 00:43:24,799
Speaker 10: eight hour period on any given night. During the month

828
00:43:24,840 --> 00:43:27,719
Speaker 10: of September, we traded over four thousand different stocks on

829
00:43:27,800 --> 00:43:29,160
Speaker 10: any given night during the month.

830
00:43:29,760 --> 00:43:33,000
Speaker 1: So are you a market maker? Are you an agent?

831
00:43:33,160 --> 00:43:34,760
Speaker 1: Just putting together buyers and sellers?

832
00:43:34,760 --> 00:43:34,920
Speaker 7: Here?

833
00:43:34,960 --> 00:43:36,760
Speaker 1: Do you make a market? How does that work?

834
00:43:37,360 --> 00:43:39,799
Speaker 10: So we have market makers on the platform like Chain

835
00:43:39,840 --> 00:43:43,640
Speaker 10: Street and Virtuo that provide two sided liquidity. In these names,

836
00:43:44,160 --> 00:43:47,080
Speaker 10: we act like an alternative trading system or a very

837
00:43:47,120 --> 00:43:51,280
Speaker 10: exchange like just like Nasdaq. We match buyers and sellers

838
00:43:51,280 --> 00:43:53,000
Speaker 10: and don't take any principal position.

839
00:43:53,800 --> 00:43:56,640
Speaker 1: And so your is your commission? Straight up commission? Is

840
00:43:56,640 --> 00:43:58,800
Speaker 1: that how your business model works?

841
00:43:59,120 --> 00:43:59,319
Speaker 5: Yeah?

842
00:43:59,360 --> 00:44:03,359
Speaker 10: I mean basic as we call it, a maker taker fee.

843
00:44:03,600 --> 00:44:06,920
Speaker 10: We give a rebate to people that provide liquidity on

844
00:44:06,920 --> 00:44:09,880
Speaker 10: the platform. And we charge a take fee when someone

845
00:44:10,000 --> 00:44:12,680
Speaker 10: is hitting a bit or lifting an offer and removing liquidity.

846
00:44:13,280 --> 00:44:15,319
Speaker 10: And we also charge for market data. So there's two

847
00:44:15,400 --> 00:44:16,880
Speaker 10: revenue streams for the ATS.

848
00:44:17,400 --> 00:44:20,320
Speaker 1: So who are your customers? Who's trading here? Is that

849
00:44:20,480 --> 00:44:22,520
Speaker 1: individual is a retail as institutional?

850
00:44:23,360 --> 00:44:28,359
Speaker 10: Yeah, so primarily we only interface with finner registered broker dealers, right, so,

851
00:44:28,480 --> 00:44:31,399
Speaker 10: if you're a retail customer, you have to come through

852
00:44:31,440 --> 00:44:34,960
Speaker 10: your brokerage account like Robinhood or interactive brokers who are

853
00:44:35,000 --> 00:44:36,600
Speaker 10: currently connected to the platform.

854
00:44:37,080 --> 00:44:37,239
Speaker 7: Right.

855
00:44:37,320 --> 00:44:39,960
Speaker 10: So, right now, I would say it's ninety five to

856
00:44:39,960 --> 00:44:43,680
Speaker 10: almost one hundred percent retail, both here in the States,

857
00:44:44,200 --> 00:44:47,920
Speaker 10: but more importantly retail coming from the Asia pac region.

858
00:44:48,840 --> 00:44:51,880
Speaker 10: Those folks over there want to trade US stocks during

859
00:44:51,960 --> 00:44:53,160
Speaker 10: their daytime hours.

860
00:44:53,840 --> 00:44:56,480
Speaker 1: So what's kind of an average transaction size for you

861
00:44:56,560 --> 00:44:58,040
Speaker 1: and shares and dollars?

862
00:44:58,840 --> 00:45:02,239
Speaker 10: Yeah, so the average share size and we charge on

863
00:45:02,280 --> 00:45:04,800
Speaker 10: a per share basis, it's somewhere between one hundred and

864
00:45:04,840 --> 00:45:06,880
Speaker 10: fifty and two hundred shares on any given.

865
00:45:06,719 --> 00:45:11,560
Speaker 1: Night, per per transaction, per transaction, I got you. So,

866
00:45:11,560 --> 00:45:14,279
Speaker 1: so where are we in terms of like, you know,

867
00:45:14,560 --> 00:45:17,960
Speaker 1: one of the things I've you know, learned about crypto,

868
00:45:18,440 --> 00:45:21,920
Speaker 1: particularly bitcoin. And what's so unusual is it trades all

869
00:45:21,960 --> 00:45:24,480
Speaker 1: the time, twenty four hours a day, seven days a week.

870
00:45:25,280 --> 00:45:27,400
Speaker 1: And so you kind of you leave work on Friday

871
00:45:27,400 --> 00:45:29,360
Speaker 1: and you look at bitcoin. You remember it was trading

872
00:45:29,400 --> 00:45:31,680
Speaker 1: at like, you know, twenty four thousand. You come in

873
00:45:31,719 --> 00:45:34,239
Speaker 1: on Monday and it's twenty eight thousand, Like what Then

874
00:45:34,320 --> 00:45:36,920
Speaker 1: You're like, oh, yeah, they trades over the weekend. Are

875
00:45:36,920 --> 00:45:39,880
Speaker 1: we ever going to get to that kind of trading

876
00:45:39,960 --> 00:45:40,920
Speaker 1: for equities?

877
00:45:41,800 --> 00:45:44,200
Speaker 10: I think we are, and really because of you know,

878
00:45:44,239 --> 00:45:46,879
Speaker 10: the way crypto trades. I think US equities are now

879
00:45:46,920 --> 00:45:50,560
Speaker 10: trading twenty four by five. So years ago, when I

880
00:45:50,640 --> 00:45:53,799
Speaker 10: was at NASDAK running the NASDAK platform, we wanted to

881
00:45:53,840 --> 00:45:56,880
Speaker 10: go ahead and trade twenty four hours, but customers just

882
00:45:57,160 --> 00:46:00,360
Speaker 10: they weren't prepared a from a call it support for respected.

883
00:46:00,400 --> 00:46:03,480
Speaker 10: They didn't have the desk or the infrastructure to support

884
00:46:03,560 --> 00:46:06,959
Speaker 10: twenty four hour trading. But now that crypto, as you said,

885
00:46:07,040 --> 00:46:13,040
Speaker 10: trades twenty four by seven, right, futures even some options

886
00:46:13,080 --> 00:46:16,839
Speaker 10: trade twenty three, twenty four hours a day. The infrastructure

887
00:46:16,920 --> 00:46:19,279
Speaker 10: is in place now to trade twenty four by five.

888
00:46:19,360 --> 00:46:22,680
Speaker 10: We start trading on Sunday night at eight pm, and

889
00:46:22,719 --> 00:46:27,120
Speaker 10: we wrap up on Thursday, well really Friday at four

890
00:46:27,120 --> 00:46:31,680
Speaker 10: in the morning. Right now, because of anything clearance and settlement,

891
00:46:32,400 --> 00:46:35,640
Speaker 10: we're not really prepared as an industry to trade seven

892
00:46:35,680 --> 00:46:38,680
Speaker 10: days a week. But right now US equities are trading

893
00:46:38,760 --> 00:46:39,919
Speaker 10: twenty four by five.

894
00:46:40,280 --> 00:46:42,880
Speaker 1: Interesting, all right, So talk to just about your customers.

895
00:46:43,040 --> 00:46:46,239
Speaker 1: You mentioned Asia, So do you have any I mean,

896
00:46:46,400 --> 00:46:48,319
Speaker 1: how do you get customers in Asia? How does that

897
00:46:48,520 --> 00:46:50,480
Speaker 1: kind of all work? Did you work with maybe the

898
00:46:50,480 --> 00:46:52,359
Speaker 1: Tokyo Stock Exchange or how does that work?

899
00:46:52,840 --> 00:46:54,920
Speaker 10: Yeah, So, a couple of ways that customers can come in.

900
00:46:54,960 --> 00:46:56,960
Speaker 10: If thera fit or registered broke a dealer like many

901
00:46:57,000 --> 00:46:59,920
Speaker 10: of them over in Asia, are they have a US ARM,

902
00:47:00,000 --> 00:47:02,720
Speaker 10: they can come in directly and interfaced with Blue Ocean directly,

903
00:47:04,360 --> 00:47:06,520
Speaker 10: or they can come in sponsored access. So we have

904
00:47:06,600 --> 00:47:10,400
Speaker 10: some firms that they're finner registered broken dealers. We interface

905
00:47:10,520 --> 00:47:13,960
Speaker 10: with them and then they onboard the Asian brokers to

906
00:47:14,040 --> 00:47:14,959
Speaker 10: interface with them.

907
00:47:15,680 --> 00:47:15,839
Speaker 4: Right.

908
00:47:15,880 --> 00:47:18,680
Speaker 10: But then as you mentioned, we also recently did a

909
00:47:18,719 --> 00:47:22,440
Speaker 10: deal with the Tokyo Stock Exchange. The Tokyo Stock Exchange

910
00:47:22,440 --> 00:47:25,960
Speaker 10: took a five percent stak in Blue Ocean Technologies. They

911
00:47:26,000 --> 00:47:29,640
Speaker 10: have eighty two brokers that trade on their exchange that

912
00:47:29,760 --> 00:47:33,480
Speaker 10: will now have access to become subscribers of Blue Ocean,

913
00:47:33,560 --> 00:47:36,640
Speaker 10: either directly or in a sponsored access fashion like I

914
00:47:36,680 --> 00:47:37,680
Speaker 10: previously mentioned.

915
00:47:38,000 --> 00:47:42,719
Speaker 1: Interesting, how about some of the retail brokers here, like Robinhood.

916
00:47:43,239 --> 00:47:46,040
Speaker 1: I mean, robin Hood's has gotten so big so quickly,

917
00:47:46,960 --> 00:47:50,000
Speaker 1: and I'm guessing there's some demand from those customers.

918
00:47:50,880 --> 00:47:54,200
Speaker 10: Yeah, so Robinhood is a great example robin Hood Interactive brokers.

919
00:47:54,960 --> 00:47:58,000
Speaker 10: US clients want to trade at a time that's more

920
00:47:58,040 --> 00:48:01,000
Speaker 10: convenience when they get home from work. The exchanges could

921
00:48:01,040 --> 00:48:04,440
Speaker 10: be closed on the West Coast even after hours. Trading

922
00:48:04,480 --> 00:48:08,760
Speaker 10: closes at five o'clock on the exchanges. So robin Hood

923
00:48:08,840 --> 00:48:13,480
Speaker 10: offers in the US to trade on Blue Ocean twenty

924
00:48:13,520 --> 00:48:17,200
Speaker 10: four by five. But robin Hood's also expanding to the

925
00:48:17,200 --> 00:48:20,960
Speaker 10: European markets also, firms like Interactive Brokers, they have a

926
00:48:21,080 --> 00:48:23,799
Speaker 10: very large presence at in the Asia market and they

927
00:48:23,840 --> 00:48:26,840
Speaker 10: get US customers and they also get Asia customers trading

928
00:48:26,840 --> 00:48:27,600
Speaker 10: on Blue Ocean.

929
00:48:28,640 --> 00:48:32,200
Speaker 1: So I mean, are you seeing an expansion either or

930
00:48:33,160 --> 00:48:35,319
Speaker 1: maybe just kind of talks about you mentioned one hundred

931
00:48:35,320 --> 00:48:37,360
Speaker 1: and fifty to or two hundred shares. Do you expect

932
00:48:37,360 --> 00:48:40,880
Speaker 1: that to grow? Do you expect more stocks to be traded.

933
00:48:42,040 --> 00:48:44,120
Speaker 1: How do you expect the fighter If.

934
00:48:44,040 --> 00:48:46,360
Speaker 10: I look at the growth this year, We've grown almost

935
00:48:46,440 --> 00:48:52,000
Speaker 10: twenty times since December of twenty twenty two last year.

936
00:48:52,960 --> 00:48:57,120
Speaker 10: So there's been a real upward trajectory on the number

937
00:48:57,160 --> 00:48:59,000
Speaker 10: of stocks that we trade on any given night. Like

938
00:48:59,000 --> 00:49:01,000
Speaker 10: I said, during the month that's Tember, close to four

939
00:49:01,000 --> 00:49:04,319
Speaker 10: thousand different names which traded, the number of brokers that

940
00:49:04,360 --> 00:49:08,760
Speaker 10: are connected, retail customers coming in directly we sponsored access,

941
00:49:09,640 --> 00:49:11,600
Speaker 10: and the amount of shares on any given night. We're

942
00:49:11,600 --> 00:49:14,960
Speaker 10: close to thirty million shares on any given night where

943
00:49:14,960 --> 00:49:17,520
Speaker 10: we finished last year called it a half a million

944
00:49:17,520 --> 00:49:18,200
Speaker 10: shares per night.

945
00:49:18,920 --> 00:49:21,359
Speaker 1: Where do you think that thirty million goes? Maybe over

946
00:49:21,400 --> 00:49:21,839
Speaker 1: the next year.

947
00:49:21,960 --> 00:49:24,279
Speaker 10: So yeah, I think if I wanted to make some

948
00:49:24,360 --> 00:49:27,000
Speaker 10: forward looking statements, I would say that, you know, we

949
00:49:27,040 --> 00:49:30,000
Speaker 10: certainly can double that up. I think certainly get to

950
00:49:30,040 --> 00:49:32,760
Speaker 10: the sixty to ninety one hundred million over the course

951
00:49:32,800 --> 00:49:35,080
Speaker 10: of the next call it twelve to eighteen months.

952
00:49:35,440 --> 00:49:39,520
Speaker 1: So your company, Blue Ocean, what's the ownership of that company?

953
00:49:40,160 --> 00:49:40,239
Speaker 7: So?

954
00:49:40,440 --> 00:49:46,520
Speaker 10: Blue Ocean is owned by a variety of partners. Obviously

955
00:49:46,560 --> 00:49:50,120
Speaker 10: I mentioned the Tokyo Stock Exchange. Our largest investor is

956
00:49:50,239 --> 00:49:55,479
Speaker 10: Urbana Corporation. Urbana Corporation is a publicly traded company north

957
00:49:55,520 --> 00:49:58,800
Speaker 10: of the border Canadian company. They own, you know, in

958
00:49:58,880 --> 00:50:01,240
Speaker 10: excess of thirty five percent and a Blue Ocean.

959
00:50:01,120 --> 00:50:04,520
Speaker 1: Interesting, all right, really fascinating story. Brian Hindeman, he is

960
00:50:04,560 --> 00:50:09,240
Speaker 1: the CEO of Blue Ocean Technologies, talking about the trading

961
00:50:09,480 --> 00:50:13,600
Speaker 1: outside of market ours electronic trading, and question is whether

962
00:50:13,600 --> 00:50:17,760
Speaker 1: there every twenty four hour trading trend in equities truly,

963
00:50:18,120 --> 00:50:19,839
Speaker 1: you know, something like that. You have seven days a week,

964
00:50:19,880 --> 00:50:22,880
Speaker 1: so it's really interesting part of the trading dynamic.

965
00:50:24,640 --> 00:50:27,759
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can

966
00:50:27,760 --> 00:50:31,560
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever

967
00:50:31,640 --> 00:50:33,160
Speaker 2: podcast platform you prefer.

968
00:50:33,520 --> 00:50:34,320
Speaker 1: I'm Matt Miller.

969
00:50:34,560 --> 00:50:37,640
Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three.

970
00:50:37,920 --> 00:50:40,320
Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney.

971
00:50:40,440 --> 00:50:43,080
Speaker 1: Before the podcast, you can always catch us worldwide at

972
00:50:43,120 --> 00:50:44,839
Speaker 1: Bloomberg Radio