WEBVTT - Elon Musk Sows Doubt Over His Twitter Takeover 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all hartnessing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.880 --> 0:00:32.599 YouTube search Bloomberg Global News. So Credit Suite, you know 0:00:32.920 --> 0:00:36.000 they have been announcing an array of management changes. We 0:00:36.120 --> 0:00:39.080 got that back in April, the departure as CFO, their 0:00:39.120 --> 0:00:42.080 Asia had their general council. Well, we just got a 0:00:42.080 --> 0:00:44.320 headline crossing the Bloomberg terminal and Credit Suits wearing the 0:00:44.360 --> 0:00:48.879 exit of the company CEO Thomas Gottstein. Uh. And we 0:00:48.920 --> 0:00:52.400 have certainly done some reporting over the last month or so. Uh. 0:00:52.440 --> 0:00:57.400 Justin late April, the company's chairman Axe Lehman express support 0:00:57.440 --> 0:01:01.320 for that CEO. But this was a again a bank 0:01:01.400 --> 0:01:04.560 that has been overseeing a streak of profit warnings more 0:01:04.600 --> 0:01:07.000 scandals which have saddled the bank with losses worth billions 0:01:07.000 --> 0:01:09.840 of dollars, damaged its reputation for risk management, and triggered 0:01:09.840 --> 0:01:12.400 a shake up of its leadership. So again, just crossing 0:01:12.480 --> 0:01:15.480 moments ago, a Bloomberg headline credit Sweet weighing the exit 0:01:15.880 --> 0:01:18.920 of Thomas Gottstein as soon as this year well, speaking 0:01:18.959 --> 0:01:21.800 of a leadership shake up. Twitter shares are down nine 0:01:21.800 --> 0:01:25.759 point five percent after Elon musk tweeted earlier this morning 0:01:26.200 --> 0:01:30.040 that the deal was on hold, this billion dollar takeover 0:01:30.080 --> 0:01:32.399 of Twitter. He did follow up a little bit later, 0:01:32.760 --> 0:01:35.119 saying that, you know, trying to clarify. I think when 0:01:35.120 --> 0:01:37.399 he saw that the stock was down and pre market 0:01:37.400 --> 0:01:40.080 trading um that it's still proceeding. But let's get the 0:01:40.120 --> 0:01:42.480 details now with Ed Love. Though he's West Coast correspondent 0:01:42.520 --> 0:01:44.720 for Bloomberg News, he's with us from our Bloomberg nine 0:01:44.760 --> 0:01:47.840 sixties studios in San Francisco. At never a dull moment 0:01:47.840 --> 0:01:51.120 when you're covering Elon Musk, Um, I do wonder what 0:01:51.240 --> 0:01:53.160 the strategy is here, because if you think about this 0:01:53.200 --> 0:01:55.400 from the perspective of somebody who you know, you'd think 0:01:55.400 --> 0:01:58.760 would do some serious due diligence. Um, the problem that 0:01:58.800 --> 0:02:02.400 he has is with the spot fake accounts. He's concerned 0:02:02.680 --> 0:02:05.320 that there are more than five that they make up 0:02:05.360 --> 0:02:08.440 more than five of Twitter's users. Um, wouldn't this be 0:02:08.480 --> 0:02:10.760 something that you kind of figure out before you make 0:02:10.800 --> 0:02:14.239 at four billion dollar takeover? Yeah? Well, first things first, 0:02:14.840 --> 0:02:18.960 Remember he waived due diligence, and we've known that for 0:02:19.040 --> 0:02:24.000 some time. And and you're completely right, because there's only 0:02:24.120 --> 0:02:28.079 one point he's been consistent on throughout this whole process, 0:02:28.120 --> 0:02:30.680 which is he wants to remove bots from the platform. 0:02:30.760 --> 0:02:34.639 He's very aware of bots on the platform. But then 0:02:34.680 --> 0:02:36.880 to suddenly turn around and be like, WHOA put the 0:02:36.919 --> 0:02:40.040 brakes on, guys, it's weird. And I'll tell you why, guys. 0:02:41.080 --> 0:02:44.720 The the language Twitter used in its regulatory Friday Friday 0:02:44.720 --> 0:02:48.120 Morning is standard boiler plate. They use it all the time, 0:02:48.440 --> 0:02:55.680 every quarter, So why now? So sometimes I think ed 0:02:55.960 --> 0:03:00.239 Elon Musk is just as he thinks. He just puts 0:03:00.240 --> 0:03:04.120 it out to everybody, you know, versus editing himself and 0:03:04.160 --> 0:03:07.040 saying what I you know, like most normal people like 0:03:07.120 --> 0:03:09.720 to do. But I'm just saying I do feel like synomons. 0:03:09.720 --> 0:03:11.720 It's the thought process and it just comes out. I mean, 0:03:11.840 --> 0:03:14.640 I don't know how so is he still committed to 0:03:14.680 --> 0:03:16.720 this deal? What do we know on that front? And 0:03:16.720 --> 0:03:19.080 I'm thinking about all the investors who are lining up 0:03:19.120 --> 0:03:22.280 behind him, or the money that's lining up behind increasingly 0:03:22.320 --> 0:03:25.560 other people's right money, not his. Maybe Yeah, So I 0:03:25.600 --> 0:03:28.600 mean he tim tweet said, he tweeted by the way 0:03:28.639 --> 0:03:33.080 to clarify, I'm committed to the deal. So you follow 0:03:33.120 --> 0:03:36.240 it on a blow by blow basis to our listeners 0:03:36.360 --> 0:03:38.440 and tell him to get everything on social media. We 0:03:38.440 --> 0:03:42.240 should trust well, we have no other mechanism to talk 0:03:42.280 --> 0:03:45.240 to him. Remember, there is no spokesperson, there's no sort 0:03:45.240 --> 0:03:49.800 of active press team. Um, go on the Bloomberg terminal 0:03:49.880 --> 0:03:51.920 if you're a subscribable and Bloomberg dot com if not, 0:03:52.040 --> 0:03:56.200 and read Matt Levin's column. According to Matt Levine Bloomberg 0:03:56.200 --> 0:03:58.880 opinion columnists, you can't just say I'm putting a deal 0:03:58.960 --> 0:04:04.200 on hold. Why you have a binding contract? That's it. Yeah, 0:04:04.280 --> 0:04:06.920 And I'm wondering what this has to do with price, 0:04:07.160 --> 0:04:12.360 because you know, the SMP five dred is down just 0:04:12.600 --> 0:04:16.520 in the last month since April four. April four was 0:04:16.560 --> 0:04:20.160 the day that Twitter shares closed hired by after Musk 0:04:20.360 --> 0:04:22.600 took that nine percent stake, so it was before he 0:04:22.640 --> 0:04:24.640 made the offer for Twitter. This was a passive one. 0:04:25.320 --> 0:04:27.479 But I wonder how much this has to do with 0:04:27.520 --> 0:04:29.440 the broader route that we've seen in tech stocks, and 0:04:29.440 --> 0:04:31.359 if Elon Musk is using this as an opportunity to 0:04:31.360 --> 0:04:34.440 try to get Twitter for a lower price. Yeah, there 0:04:34.480 --> 0:04:38.760 is a school of thought. Hindenberg short seller research company 0:04:38.920 --> 0:04:40.559 put it out there at the beginning of this week 0:04:40.720 --> 0:04:44.919 that this could be a sign of Elon Musk potentially 0:04:44.920 --> 0:04:47.920 coming back with a lower offer. You know, Twitter has 0:04:47.960 --> 0:04:50.840 not been caught up in the sell off in technology 0:04:50.880 --> 0:04:53.880 stocks because it's pending a deal, right, and you look 0:04:53.880 --> 0:04:57.880 at the spread between the offer price fifty four dollars 0:04:57.920 --> 0:05:02.719 twenty cents and the current share price, it's getting wider wider, wider, 0:05:02.839 --> 0:05:05.440 especially with today's sell off in Twitter stock. And that's 0:05:05.440 --> 0:05:08.599 an indication, a soft indication that Wall Street is betting 0:05:09.120 --> 0:05:10.719 this deal is not going to happen, at least not 0:05:10.800 --> 0:05:14.120 in its current form. Yeah, I mean, I just feel like, 0:05:14.160 --> 0:05:18.599 you know, it's interesting. Um David western Um talking to 0:05:18.640 --> 0:05:21.560 a guest earlier, Eric Gordon, who follows M and A 0:05:21.800 --> 0:05:24.599 and teaches it to students and was like, how do 0:05:24.600 --> 0:05:27.880 you teach Elon Musk to business school students? And you know, 0:05:27.960 --> 0:05:30.120 he's just got his own rules right ed. And I 0:05:30.120 --> 0:05:32.960 think about you folks who have to report on him, 0:05:33.000 --> 0:05:36.840 Like how you have to interpret these things he does well. 0:05:36.880 --> 0:05:39.400 I mean, it's the lack of sleep that's the hardship, 0:05:39.520 --> 0:05:45.120 it's not the interpreting. Um, let's remember, let's recap the reporting, 0:05:45.720 --> 0:05:50.720 multiple media reports, the FTC. The SEC are looking at 0:05:50.720 --> 0:05:55.080 the deal and how Elon Musk steaks was acquired and communicated. 0:05:55.200 --> 0:05:58.120 So you know, he's not free or above the law, 0:05:58.839 --> 0:06:00.960 but he does have his own way of doing things 0:06:01.040 --> 0:06:05.080 that is atypical for an executive of a large publicly 0:06:05.120 --> 0:06:08.360 traded or private company. And we have thirty seconds left. 0:06:08.480 --> 0:06:11.520 What's happening inside Twitter right now? Yesterday the CEO let 0:06:11.640 --> 0:06:14.159 go of two executives there. What are you thinking if 0:06:14.200 --> 0:06:16.560 you're working at Twitter right now, They're hiring Freeze, they're 0:06:16.560 --> 0:06:18.920 re sending offers take us into it. Yeah, I mean 0:06:18.960 --> 0:06:23.040 I'm hearing that in some respects this business is normal. Um. 0:06:23.080 --> 0:06:25.400 They're surprised that Elon Musk didn't know about the bots. 0:06:26.040 --> 0:06:28.960 It's a kind of well known thing. Internally. Um, but 0:06:30.160 --> 0:06:33.880 they're bracing what Twitter looks like. You know, there was 0:06:34.000 --> 0:06:37.600 expectations that some management would go and we're starting to 0:06:37.600 --> 0:06:42.680 see that play out now. Yeah. Anyway, all right, it 0:06:42.720 --> 0:06:45.880 continues the story that continues to give and give and give. 0:06:46.400 --> 0:06:49.120 Sleep from Ed luve Blow. Yeah, yeah, it doesn't seem 0:06:49.120 --> 0:06:50.960 like Elon must look sleeps at all all. The West 0:06:51.000 --> 0:06:54.320 Coast correspondent Bloomberg News Twitter share of selling off Tesla shares. 0:06:54.640 --> 0:06:59.599 They're rallying. This is Bloomberg. You're listening to Bloomberg Business Week. 0:06:59.760 --> 0:07:03.800 We've Carol Masser and Bloomberg Quick Takes. Tim Stinovic on 0:07:03.920 --> 0:07:07.080 Bloomberg Radio. We're still in a pandemic everyone, and COVID 0:07:07.120 --> 0:07:10.640 is searching again in the US. Reinfections a chief culprit. 0:07:10.680 --> 0:07:13.280 Let's get to it. Dr I los Bader is clinical 0:07:13.320 --> 0:07:15.720 Professor of Medicine at n y U Landgoing Medical Center. 0:07:15.760 --> 0:07:17.720 On the phone from New York City. My guess is 0:07:17.760 --> 0:07:19.560 thou e and first of all, great to have you 0:07:19.600 --> 0:07:22.720 here with him and myself. You would say it's okay 0:07:22.720 --> 0:07:26.560 to be out and about. Well, uh are now it's 0:07:26.560 --> 0:07:29.920 always fair to be prudent, Happy Friday. But Carol and 0:07:29.960 --> 0:07:33.080 tim and two years ago we did talk about that 0:07:33.200 --> 0:07:36.680 everyone would be getting COVID eventually. I certainly did not 0:07:36.800 --> 0:07:40.680 anticipate all of the mutations and the O macron sub 0:07:40.760 --> 0:07:43.160 variants that are coming out. And I think we are 0:07:43.280 --> 0:07:45.600 we are certainly seeing and I'm seeing in the office 0:07:46.000 --> 0:07:48.960 more COVID infections a lot of people. I think we're 0:07:49.040 --> 0:07:52.720 under counting because people are testing at home. The home 0:07:52.760 --> 0:07:55.760 tests are fairly accurate, and so we really are seeing 0:07:55.880 --> 0:07:59.280 a surge. Some of those people. We are getting taxl 0:07:59.320 --> 0:08:02.840 of it for you're older born, firm underlying disease, but 0:08:02.920 --> 0:08:06.760 a lot of people are getting it, and I think, um, 0:08:06.800 --> 0:08:09.720 you know, going out to big venues, you know, does 0:08:09.800 --> 0:08:14.280 pose some risk. Fortunately, most of these omicron infections are 0:08:14.360 --> 0:08:18.480 like that cold sinus cloth, sore throat. We're not really 0:08:18.480 --> 0:08:20.840 seeing a bump in the deaths. We've had enough deaths, 0:08:20.880 --> 0:08:23.880 you know, a million in the United States, fifteen million 0:08:23.960 --> 0:08:27.280 excess deaths around the world. So uh, this has been 0:08:27.360 --> 0:08:32.160 quite ago. But it's frustrating that despite people who have 0:08:32.240 --> 0:08:36.640 had vaccines two or three, and people even four vaccines, 0:08:36.720 --> 0:08:39.480 or if they've even had COVID, they are still getting 0:08:39.480 --> 0:08:42.240 O Macron And that's been very frustrating, So going out 0:08:42.280 --> 0:08:46.480 to concerts. Probably it's not a zero risk, let's put 0:08:46.480 --> 0:08:48.080 it that way. And we've seen it front and center 0:08:48.120 --> 0:08:50.080 with our colleagues. Ten Yeah, we have, um I mean, 0:08:50.120 --> 0:08:52.160 and it's not just in the data. Anecdotally, we've had 0:08:52.200 --> 0:08:55.800 more and more colleagues who are getting sick dr les better. 0:08:55.840 --> 0:08:58.040 Why is it so difficult to get packs of it? Still? 0:09:00.320 --> 0:09:04.120 Uh Well, typically we try and reserve that for people 0:09:04.160 --> 0:09:07.560 who are older sixty five or of underlying medical problems. 0:09:08.360 --> 0:09:10.480 I have not had that much trouble getting it. We 0:09:10.600 --> 0:09:13.640 use a specific pharmacy, which I'm not going to mention 0:09:13.679 --> 0:09:16.600 on air, but who do seem to be able to 0:09:16.640 --> 0:09:19.720 get it for most patients? As patients over sixty five 0:09:19.920 --> 0:09:23.040 you're saying, or with underlying conditions, not necessarily like you know, 0:09:23.280 --> 0:09:25.960 if I'm under forty and I got it, I wouldn't 0:09:25.960 --> 0:09:28.760 be able to get packs of it. It's it's much 0:09:28.800 --> 0:09:32.480 more difficult um A. You have to upload and document 0:09:32.640 --> 0:09:36.160 one that you have a positive test. Um. I have 0:09:36.280 --> 0:09:39.360 a few patients who are under forty or or under 0:09:39.360 --> 0:09:42.240 sixty five, we're getting it. In general, most doctors are 0:09:42.240 --> 0:09:44.800 trying to reserve it for older people, because most young 0:09:44.880 --> 0:09:47.839 people do seem to get through it, you know, seven 0:09:47.880 --> 0:09:50.600 to ten days, that's the quarantine. They may have some 0:09:50.679 --> 0:09:54.120 residual you know, cough. I've had patients coughing for several 0:09:54.160 --> 0:09:57.600 months after. Unfortunately, we don't have great treatment for post 0:09:57.640 --> 0:10:00.480 COVID or long long haul at this point, although we're 0:10:00.480 --> 0:10:02.680 looking at a number of things. But yes, young people, 0:10:02.920 --> 0:10:05.400 it is harder to get pack lav it true. You know, 0:10:05.559 --> 0:10:07.280 we have a Bloomberg story out there and it says 0:10:07.360 --> 0:10:09.839 experts say that it's difficult to know what the next 0:10:10.080 --> 0:10:13.280 few months will bring, uh and just says how the 0:10:13.360 --> 0:10:15.080 virus is not behaving the same way it has in 0:10:15.120 --> 0:10:16.640 the past, and the majority of the country is living 0:10:16.679 --> 0:10:20.280 like the pandemic is over. How do you think about 0:10:20.480 --> 0:10:21.960 I don't know the next the rest of the year 0:10:21.960 --> 0:10:24.080 in terms of what we might see when it comes 0:10:24.080 --> 0:10:27.360 to the pandemic, you know, I think we should be 0:10:27.400 --> 0:10:30.560 focusing or if I were in leadership, I would try 0:10:30.559 --> 0:10:36.640 and encourage an omicron vaccine or a universal COVID coronavirus 0:10:36.720 --> 0:10:41.079 vaccine because clearly this virus is mutating faster than we thought. 0:10:41.880 --> 0:10:45.520 People are getting reinfected multiple times. As for the Bloomberg article. 0:10:46.480 --> 0:10:50.640 Even natural antibodies are not providing protection, so and paxl 0:10:50.640 --> 0:10:53.120 of it is in limited amounts. So I think we 0:10:53.360 --> 0:10:55.680 I think vaccines can be helpful, but they have to 0:10:55.720 --> 0:10:58.800 be more of a universal like universal flu vaccine or 0:10:58.880 --> 0:11:02.280 universal coronaviru respect scene. And I would say if you 0:11:02.360 --> 0:11:06.680 are elderly or from be careful going to concerts. You know, 0:11:06.800 --> 0:11:10.920 so outdoors said certainly safer than indoors, and be prudent. 0:11:11.600 --> 0:11:13.240 I just say, I'm getting ready to do some traveling 0:11:13.240 --> 0:11:15.760 outside the country, and it's it's pretty there's strict rules 0:11:15.760 --> 0:11:18.040 out there. You got those masks ready. I have the 0:11:18.240 --> 0:11:20.560 masks ready. But going into a country and then coming 0:11:20.559 --> 0:11:22.040 back to the US, I mean they want to make 0:11:22.080 --> 0:11:24.280 sure you're not carrying stuff around. I hope you don't 0:11:24.280 --> 0:11:30.120 get stuck in some beautiful location for ten days because 0:11:30.160 --> 0:11:34.160 you just continue to test positive comment Sorry guys, still positive, 0:11:34.240 --> 0:11:38.640 Maybe with like a nice beach or tropical climate comments comment. 0:11:38.920 --> 0:11:41.160 Dr Iain LUs Bader, thank you so much, clinical professor 0:11:41.200 --> 0:11:43.280 of medicine and go to for us throughout the pandemic. 0:11:43.320 --> 0:11:45.280 Key's over at n y U lend Going Medical Center. 0:11:47.040 --> 0:11:51.079 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:11:51.160 --> 0:11:55.040 Quick Takes Tim Stinovic on Bloomberg Radio. The remarks in 0:11:55.080 --> 0:11:58.280 the new isshue of Bloomberg business Week really taps into 0:11:58.480 --> 0:12:01.760 what has been going on in the trade and kind 0:12:01.760 --> 0:12:04.720 of where we are right and and our markets actually 0:12:04.720 --> 0:12:06.920 starting to make some sense at this point. Well, that's 0:12:06.960 --> 0:12:09.360 the question. I mean, the valuations have certainly come down 0:12:09.360 --> 0:12:12.320 a lot. Michael mackenzie is rates reporter who covers the 0:12:12.320 --> 0:12:15.200 bond market here at Bloomberg News. He joins us on 0:12:15.200 --> 0:12:18.160 the phone from New York City. He's the author of 0:12:18.200 --> 0:12:22.280 the remarks in the current issue of Bloomberg Business Week magazine. 0:12:22.280 --> 0:12:24.679 It's available on newstands, on the Bloomberg and at Bloomberg 0:12:24.679 --> 0:12:26.840 dot com Slash business Week. Also with us right now 0:12:26.920 --> 0:12:30.280 is Joel Weber, editor at Bloomberg Business Week. He's with 0:12:30.400 --> 0:12:33.280 us in the Bloomberg Interactive Broker Studio. Joel Ober, the 0:12:33.360 --> 0:12:38.520 editor of the magazine. Joel Um. The party well today 0:12:38.559 --> 0:12:42.199 notwithstanding um, but you know these are sort of characteristics 0:12:42.200 --> 0:12:45.400 of bear markets. The party it's over? Do we know 0:12:45.600 --> 0:12:48.000 if it's over? I mean, we may have time. This 0:12:48.160 --> 0:12:53.240 article so perfect, guys are perfect with time man. So 0:12:53.559 --> 0:12:55.599 should We talked to Michael this week, and obviously this 0:12:55.640 --> 0:12:58.240 has been a really interesting week to watch things continue 0:12:58.280 --> 0:13:02.880 to fall. We've seen weeks of declines. Now everyone's kind 0:13:02.880 --> 0:13:05.680 of looking for that bottom. And you know, in our 0:13:05.760 --> 0:13:08.160 business week way we were we were like, we're in 0:13:08.160 --> 0:13:11.240 the hangover right, Like this is It's been a decade 0:13:11.320 --> 0:13:17.720 long party, easy money, free money, memestocks, crypto, everything was 0:13:17.760 --> 0:13:21.400 just you know, so easy. And when we started talking 0:13:21.440 --> 0:13:23.360 to Michael about this, it's like, yeah, this is gonna 0:13:23.440 --> 0:13:27.680 it's there's a turn that's happening, and inflation, interest rates, 0:13:27.720 --> 0:13:29.439 all of these things is going to make it much 0:13:29.920 --> 0:13:34.360 a much different, more difficult environment. And and when we 0:13:34.400 --> 0:13:36.360 talked to Michael about that, we were like, oh, yeah, 0:13:36.400 --> 0:13:39.880 that the hangover is here. Uh and maybe we're already 0:13:39.920 --> 0:13:41.640 on the other side of that hangover and more powering 0:13:41.679 --> 0:13:44.400 through on this Friday, Michael. But what were the elements 0:13:44.440 --> 0:13:46.520 that really stood out to you as you dug into 0:13:46.559 --> 0:13:50.400 writing this story. Well, I think what I've always enjoyed 0:13:50.440 --> 0:13:52.439 being a financial genus out for twenty years. It's like 0:13:52.640 --> 0:13:55.559 you do get to make people during that journey. A 0:13:55.600 --> 0:13:57.160 lot of them has been around mother than I have 0:13:58.120 --> 0:14:01.120 and so people like David Drew a tro price and 0:14:01.200 --> 0:14:04.600 wha why not at research serious? You know, they've been 0:14:04.840 --> 0:14:08.920 sounding the quarter intel for some time. And so when 0:14:08.960 --> 0:14:11.120 I was thinking to them a year ago on other stories, 0:14:11.600 --> 0:14:15.199 they were currently, well, it's just things are too easy, 0:14:15.360 --> 0:14:19.880 the mean stock to start phrase, cryptocurrencies. Everything suggested to 0:14:19.920 --> 0:14:24.520 them that things are getting very, very hot, and it 0:14:24.600 --> 0:14:27.760 was time to sort of raise cash and focus on values, 0:14:27.880 --> 0:14:31.640 focus on doing your homework and prepare for for rougher waters. 0:14:31.680 --> 0:14:33.760 And I think what you know, if you look back 0:14:33.760 --> 0:14:36.960 to what happened in two thousand, what happened before two 0:14:36.960 --> 0:14:39.400 thousand made a lot of the market turmoil you do 0:14:39.520 --> 0:14:42.160 get comes when the Fed Reserve decided you to start 0:14:42.240 --> 0:14:45.560 raising rates. It has to tighten up the cost of money. 0:14:46.120 --> 0:14:48.680 And I think we've been through an extraordinary period since 0:14:48.720 --> 0:14:52.280 the pandemic. We didn't just get zero interest rate an 0:14:52.400 --> 0:14:55.040 enormous amount of bombying from the FED. We got it 0:14:55.080 --> 0:14:58.160 from other global central banks, some of whom did quantitative 0:14:58.200 --> 0:15:01.160 easy for the those first time, such as earlier. And 0:15:01.200 --> 0:15:03.720 we also had a huge amount of fiscal stimulus that 0:15:03.800 --> 0:15:07.320 came the cities in the US, and that combination has 0:15:07.320 --> 0:15:11.960 given us a legacy of near double digit inflation, and 0:15:12.000 --> 0:15:14.520 you've suddenly got a federal reserve that has a dual mandate. 0:15:14.520 --> 0:15:17.480 It's looking there to make sure the employment market is 0:15:17.520 --> 0:15:20.760 strong but also price stability in the form of an 0:15:20.760 --> 0:15:25.400 inflation rate around a target of two. At the moment, 0:15:25.440 --> 0:15:27.160 they're doing very well on the employment side of that 0:15:27.280 --> 0:15:30.720 dual mandate, they're not doing very well on the inflation side. 0:15:30.880 --> 0:15:34.720 So it's very reasonable as an investor be thinking, this 0:15:34.880 --> 0:15:37.240 is a FED that's really focused on one thing, and 0:15:37.280 --> 0:15:40.160 that is getting inflation down. And this is why we 0:15:40.240 --> 0:15:42.400 keep hearing more and more references back to what poor 0:15:42.480 --> 0:15:46.040 volcadicament view was share of the said reserves in the 0:15:46.120 --> 0:15:49.360 late seventies and eighties, when he really did crack the 0:15:49.360 --> 0:15:53.640 wid and in the end got inflation down, but at 0:15:53.640 --> 0:15:56.360 the cost of a very hard landing for the economy. 0:15:56.560 --> 0:15:58.480 And I guess right now the market is called in 0:15:58.480 --> 0:16:00.760 this environment, is the said going to be able to 0:16:00.800 --> 0:16:05.760 secure a softer landing, and therefore evaluations will continue to 0:16:05.960 --> 0:16:08.120 under pressure. But there's probably a time now to start 0:16:08.120 --> 0:16:10.600 scaling into some of the things you'd like and which 0:16:10.640 --> 0:16:13.640 do look cheap um. But the risk here is that 0:16:13.680 --> 0:16:15.760 we get a harder landing, so it could be for 0:16:15.920 --> 0:16:19.480 the Hall to come likely and credit. Michael, That's what's 0:16:19.840 --> 0:16:21.600 been kind of interesting to watch this. We have just 0:16:21.720 --> 0:16:25.040 talked NonStop about inflation, inflation, inflation, and so of course 0:16:25.040 --> 0:16:26.600 the FED has to be aggressive when it comes to 0:16:26.640 --> 0:16:29.480 interest rates. I feel like that the conversation, especially in 0:16:29.480 --> 0:16:34.600 the last week or two, has aggressively and increasingly moved 0:16:34.600 --> 0:16:37.360 to a wait a minute, FED raising rates, what happens 0:16:37.400 --> 0:16:39.800 to growth? And that's what we're all focusing on that 0:16:39.920 --> 0:16:43.200 the now we're looking at probably some kind of slowdown, 0:16:43.200 --> 0:16:45.840 and who knows what kind of a slowdown and how 0:16:45.880 --> 0:16:49.520 long it lasts, how deep and how long exactly. So 0:16:49.840 --> 0:16:52.080 I mean a lot of people are sort of looking 0:16:52.240 --> 0:16:56.000 at the template of team where the Fed raising said 0:16:56.040 --> 0:16:59.160 times rates around two and a half per cent, and 0:16:59.440 --> 0:17:02.200 we had an I guess, the tantrum in both equities 0:17:02.200 --> 0:17:05.120 and credit, and the FED stopped, but they also could 0:17:05.160 --> 0:17:07.920 see that the economy was really staring down. I think 0:17:07.920 --> 0:17:11.760 what's problematic this time is that rent and shelter about 0:17:11.800 --> 0:17:15.480 a third nearly a third or how the US calculates 0:17:15.760 --> 0:17:20.040 consumer price index, and we've had an explosive housing market 0:17:20.720 --> 0:17:24.960 and that re announcing rent increases through big sings big 0:17:24.960 --> 0:17:28.120 cities such as New York and San Francisco really taking off. 0:17:28.520 --> 0:17:30.720 It's also happening in the areas of the country where 0:17:30.760 --> 0:17:33.760 people have moved to because they have a more flexible 0:17:33.800 --> 0:17:38.600 work environment. They can work from home, so Florida, Austin, Texas. 0:17:39.080 --> 0:17:42.200 So you've not got to rent and housing price problem 0:17:42.720 --> 0:17:46.240 that's feeding through into CPI and could very well continue 0:17:46.280 --> 0:17:47.760 for much of this year. So you don't have a 0:17:47.800 --> 0:17:52.800 situation where growth is slowing that inflation remains high. We 0:17:52.920 --> 0:17:56.040 also still have a war in Ukraine, which is putting 0:17:56.080 --> 0:18:00.240 pressure on commodity prices, particularly food. Now the flip side, 0:18:00.240 --> 0:18:03.200 of course, is that high super crisis tend to eat 0:18:03.240 --> 0:18:07.240 into people's into people's persons and walls to excuse the time, 0:18:07.720 --> 0:18:09.840 and therefore that will slow the economy. But I think 0:18:09.880 --> 0:18:12.320 it's a very clicky time and I think it's This 0:18:12.440 --> 0:18:14.880 is why when I was talking to investors, their sort 0:18:14.920 --> 0:18:17.360 of view was, I'm taking long term view and I'm 0:18:17.400 --> 0:18:20.160 going to scalely in the areas that I like. I'm 0:18:20.160 --> 0:18:22.440 not going full in, but I'm starting to scale in 0:18:22.520 --> 0:18:24.400 because we've seen enough of a fall now. But they're 0:18:24.400 --> 0:18:27.640 also adopting a sort of our strategy here that there 0:18:27.680 --> 0:18:30.520 could very well be further drops, but from a sort 0:18:30.560 --> 0:18:32.480 of if you sort of take a three to five 0:18:32.560 --> 0:18:35.800 year time horizon there, it's usually these are these are 0:18:35.800 --> 0:18:37.520 the times to buy. You can hold in the next 0:18:37.560 --> 0:18:39.480 three to five years, you'll be You'll come out of 0:18:39.480 --> 0:18:45.040 that um looking far better. So the album, the famous 0:18:45.080 --> 0:18:49.200 album was start making sense? Do markets finally start making sense? 0:18:49.240 --> 0:18:54.360 Michael really quickly? Like seconds? Um, I think a year 0:18:54.400 --> 0:18:57.119 ago we had what sixteen crew the negative eut in bonds. 0:18:57.280 --> 0:19:00.600 He is now down to about only about sup treally now, um, 0:19:00.640 --> 0:19:02.560 that's the word. Best thing that tells you that they're 0:19:02.560 --> 0:19:04.560 starting to make sense when we no longer have negative 0:19:04.600 --> 0:19:08.960 viewer in bonds. By you're paying someone so your money 0:19:09.160 --> 0:19:13.040 is ridiculous. I think that's the key. That's killer and 0:19:13.119 --> 0:19:15.840 so perfect. After what a week, Bloomberg Business Week editor 0:19:15.920 --> 0:19:17.840 Joel Webber in studio, thank you, And of course that 0:19:17.920 --> 0:19:20.480 voice you just heard Bloomberg News Rates reporter Michael Mackenzie 0:19:20.880 --> 0:19:23.000 on the phone in New York City. That is the remarks. 0:19:23.040 --> 0:19:26.080 The new issue of Bloomberg Business Week out now. This 0:19:26.160 --> 0:19:31.080 is Bloomberg Radio you're listening to Bloomberg Business Week with 0:19:31.160 --> 0:19:35.960 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:19:36.400 --> 0:19:39.680 Crypto though for equities, it's been a vault to work 0:19:39.720 --> 0:19:43.720 for a lot of asset classes, including the cryptocurrency markets, 0:19:44.240 --> 0:19:46.160 we have seen kind of a crazy week, to say 0:19:46.200 --> 0:19:48.480 the least. We've got a great voice to join us 0:19:48.480 --> 0:19:51.080 to talk all things crypto right now. Giante Sue is 0:19:51.119 --> 0:19:54.399 the co founder and CEO of alex It's a decentralized 0:19:54.440 --> 0:19:58.600 finance de FI platform for bitcoin. Santa, Good to have 0:19:58.640 --> 0:20:02.040 you with us. How are you, Hi, Carol, Hi Tiam. 0:20:02.200 --> 0:20:04.600 Thank you for having me join you today. Yeah, thanks 0:20:04.600 --> 0:20:06.520 so much for joining us. I want to go back 0:20:06.560 --> 0:20:08.880 to something that Carol shared from our colleague Mike Reagan, 0:20:08.920 --> 0:20:12.280 senior Markets editor here at Bloomberg, about a story that 0:20:12.320 --> 0:20:14.680 he wrote earlier this week. One point eight trillion dollars 0:20:14.720 --> 0:20:17.960 is the value of cryptocurrencies that has evaporate evaporated since 0:20:18.000 --> 0:20:20.719 the market top to three trillion dollars in early November. 0:20:20.720 --> 0:20:24.359 That's more than fifty drop, according to coin get Go. 0:20:24.840 --> 0:20:26.720 When I see numbers like that, I think to myself, 0:20:27.280 --> 0:20:32.240 this as Mike Reagan rights could be a turning point 0:20:32.359 --> 0:20:36.159 in the crypto industry. What do you think? Well, I 0:20:36.240 --> 0:20:39.480 think the overall my care team is that it is 0:20:39.520 --> 0:20:43.639 definitely undergoing a massive correction and largely due to you know, 0:20:43.760 --> 0:20:47.679 delayed fat high tried to curb inflation. And crypto is 0:20:47.760 --> 0:20:52.000 highly correlated with tech, which is an injurery sensitive sector. 0:20:52.440 --> 0:20:55.160 So we're interesting, right, you know the value of those 0:20:55.160 --> 0:20:58.879 future and the is greatly discounted. Let's just face it. 0:20:58.960 --> 0:21:03.399 The macro environment is challenging on several fronts. The conflict UQUES, 0:21:03.680 --> 0:21:07.399 slowing growth in China, US and other central banks are 0:21:07.480 --> 0:21:10.560 tight or they are tightening. So all these are contribute 0:21:10.600 --> 0:21:13.920 to the pencil of were seeing not just incredible, but 0:21:14.280 --> 0:21:16.679 you know, the global market as a whole, So I 0:21:16.680 --> 0:21:20.080 would say the downside race to growth definitely dominates, with 0:21:20.400 --> 0:21:23.760 very very limited upside for crypto and for the whole 0:21:23.840 --> 0:21:27.960 market as well. You say we shouldn't think about what's 0:21:28.000 --> 0:21:31.720 going on um with crypto right now as a Leman moment. 0:21:31.800 --> 0:21:37.720 Is that fair? Um? That's my personal opinion, Carol, because 0:21:37.880 --> 0:21:43.280 you know, interestingly, people does people do associate this, particularly 0:21:43.280 --> 0:21:46.159 the collapse of the terror stable point u S t 0:21:46.640 --> 0:21:50.199 with LIMA moment. Right, my prisents of personal opinion is 0:21:50.200 --> 0:21:52.719