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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: US live on YouTube.

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Speaker 2: Let's get some of those geopolitical issues coming out of

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Speaker 2: your Ros Matheson joins us, Bloomberg News Director for Europe,

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Speaker 2: the Middle East, and Africa, on these US and Russia

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Speaker 2: talks here, Ros, what do you think the strategy is

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Speaker 2: for the US and Russia Here at these early early

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Speaker 2: stages of the talks.

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Speaker 3: It's very clear that they're trying to enact Donald Trump's agenda,

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Speaker 3: which is for a quick resolution to this conflict. But

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Speaker 3: also it seems to be about a really broad reset

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Speaker 3: of the relationship between the US and Russia. Of course,

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Speaker 3: under Joe Biden and Russia was very much seen as

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Speaker 3: a pariah state. He called him a dictator and other things,

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Speaker 3: and so there was very little contact, and certainly the

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Speaker 3: US was amongst those imposing very sweeping sanctions and penalties

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Speaker 3: on Russia. And this is all signaling a very different

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Speaker 3: mindset from the current administration. Which is about engaging with Russia,

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Speaker 3: perhaps no longer so strenously policing those sanctions, collaborating even

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Speaker 3: with Russia on issues around energy supply and so on,

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Speaker 3: and certainly a core part of that is bringing this

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Speaker 3: war at least to a cease five very quick quickly.

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Speaker 3: So that's a very startling turnaround in just a matter

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Speaker 3: of weeks. The question now is, off the back of

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Speaker 3: this meeting, at what point do we see Vladimir Putin

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Speaker 3: and Donald Trump sit down together.

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Speaker 2: Let's we'll get to that into just a second. What

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Speaker 2: role though, should Ukraine, mister Zelenski and maybe even broader

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Speaker 2: Europe play in these discussions. I suspect that, you know,

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Speaker 2: a lot of politicians, a lot of ambassadors in Europe

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Speaker 2: are really on their heels today.

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Speaker 3: Well, that's been the concern and certainly was brought home

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Speaker 3: with the speech by JD Vance to the Munich Security

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Speaker 3: Forum here in Europe just last week. The strong sense

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Speaker 3: of a completely different relationship with Europe, and the concern

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Speaker 3: that you hear a lot amongst European officials is they're

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Speaker 3: going to get squeezed out of the conversation when it

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Speaker 3: comes to Ukraine and effectively defense on their doorstep in

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Speaker 3: their own region, and what part do they play in

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Speaker 3: the parameters of an agreement on Ukraine, and what role

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Speaker 3: are they expected to play afterward, potentially with peacekeepers or

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Speaker 3: funding collective defense in the region. And certainly you can

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Speaker 3: see from the news just recently that blood Muslimski has

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Speaker 3: now canceled his trip to Saudi Arabia tomorrow. He was

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Speaker 3: due to be there in the aftermath of these US

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Speaker 3: Russia talks, and the concern optically there is obviously that

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Speaker 3: he was coming to get some kind of readout from

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Speaker 3: the Saudi Arabians from a call that he was excluded

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Speaker 3: from from those meetings, and that he's now decided longer

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Speaker 3: going to go. And that's a really telling signal from

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Speaker 3: Ukraine again that they're at this point feeling they're completely

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Speaker 3: cut out of the conversation.

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Speaker 2: Do we have any sense of what can actually be

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Speaker 2: agreed upon between the US and Russia that does not

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Speaker 2: include Ukraine in that agreement? It doesn't seem like I'm

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Speaker 2: not sure anything substantial can really be agreed to if

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Speaker 2: it doesn't include Ukraine.

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Speaker 3: Well, that's right, And does Ukraine just then reject whatever

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Speaker 3: is presented to them and what role do the Europeans

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Speaker 3: have in that, And it seems to be from the

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Speaker 3: europe sod at least about trying to help shape what

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Speaker 3: the US and Russia are talking about shape it early

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Speaker 3: for some of those concerns that are on the table

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Speaker 3: again about does this involve Ukraine having to see territory?

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Speaker 3: If so, how much territory does it have to seed

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Speaker 3: for an agreement to be done, What does it look

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Speaker 3: like in the future in terms of a frozen conflict

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Speaker 3: in potentially you know, what does it mean for security

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Speaker 3: guarantees for Ukraine and what are those? I mean, it's

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Speaker 3: clear the US doesn't want Ukraine part of NATO, for example,

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Speaker 3: doesn't want to put its own troops on the ground

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Speaker 3: inside Ukraine. But can Europe do that in some fashion

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Speaker 3: And that's a very difficult question for Europe as well,

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Speaker 3: And so it just feels like they're worried that some

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Speaker 3: kind of understandings will be reached and then in essence

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Speaker 3: an agreement kind of gets presented to Ukraine collectively by

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Speaker 3: the US and Russia and is it to take it

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Speaker 3: or leave it? Equation at that point.

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Speaker 2: So the next step, maybe one of the next step

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Speaker 2: for OZ is actually a meeting between mister Putin and

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Speaker 2: President Trump. Is there any consensus about when that could

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Speaker 2: happen and where maybe, well.

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Speaker 3: There have been some talk it could happen as soon

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Speaker 3: as next week, also in Saudi Arabia, but it's it

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Speaker 3: seems clear from the readouts from the meetings today that

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Speaker 3: that's unlikely. And obviously it's an incredibly tricky logistical exercise

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Speaker 3: to get them together, even in a country like Saudi Arabia.

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Speaker 3: I've got a lot of security issues around that. The

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Speaker 3: optics of putting the meeting together. What does that look

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Speaker 3: like in terms of basic stuff like where do they walk,

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Speaker 3: where do they sit down? All that has to be

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Speaker 3: agreed and then you know, in a way, it's a

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Speaker 3: trickier meeting for Donald Trump. You can see perhaps why

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Speaker 3: the Americans have decided not to rush it next week,

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Speaker 3: because on the surface of it, he has more to

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Speaker 3: lose from a meeting. Vladimir Putin doesn't have much to

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Speaker 3: lose from sitting down with Donald Trump. It's only really

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Speaker 3: upside for him. But for Donald Trump it's not without

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Speaker 3: some risk for his own reputation. So perhaps the Americans

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Speaker 3: want to take a bit of a pause there and

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Speaker 3: work out again how they would come into that meeting

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Speaker 3: and what they want to get out of it, and

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Speaker 3: so are slowing things down a bit, but it doesn't

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Speaker 3: seem like it's going to be on the cards at

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Speaker 3: least now for next week.

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Speaker 2: All right, Rose, thank you very much for your reporting.

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Speaker 2: Appreciate getting a few minutes of your times. Ross Matthewson.

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Speaker 2: She's news director for Europe, the Middle East and Africa

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Speaker 2: for Bloomberg new She is based in London, and we'll

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Speaker 2: keep in touch with her and her reporting as this

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Speaker 2: situation remains extraordinarily fluid, and we'll see again. Maybe one

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Speaker 2: of the next steps in this process will be Resident

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Speaker 2: Trump sitting down with mister Putin and maybe trying to

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Speaker 2: move this ball forward. The question then remains for a

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Speaker 2: lot of observers is what role is there for President

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Speaker 2: Zelenski and Ukraine.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business App. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: I am Paul Sweeney. You're live here in our Bloomberg

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Speaker 2: Interactive Broker Studio and we are streaming live on youtube'shead

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Speaker 2: everyday YouTube dot com and search Bloomberg Podcast Live, and

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Speaker 2: that's where you'll find us. As Lisa was just reporting here,

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Speaker 2: we got kind of a mixed tape out there, but

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Speaker 2: a pretty good start to the year. S and P

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Speaker 2: up about four percent, and even if you look at

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Speaker 2: the equal weighted SMP up a similar levels, so maybe

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Speaker 2: a little bit of a broadening there. Grace Lee joins,

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Speaker 2: a senior portfolio manager Columbia thread Needle from the great

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Speaker 2: town of Boston. One of my all time faves. Grace,

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Speaker 2: thanks so much for joining us here. You know a

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Speaker 2: lot of folks saying for this equity market to continue

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Speaker 2: to move higher, it really has to be earnings driven,

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Speaker 2: because it doesn't look like the feeder reserve is going

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Speaker 2: to do a whole lot for UH equity investors. How

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Speaker 2: do you think about the drivers of this equity market here?

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Speaker 4: Thanks for having me, Paul. Yeah. I do think that

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Speaker 4: earnings are starting to catch up for the non mag

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Speaker 4: seven and we started to see that late last year,

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Speaker 4: and I think the market actually is in a pretty

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Speaker 4: good place year to date. The most interesting things that

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Speaker 4: stand out to me is that UH, and we don't

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Speaker 4: play our funds don't play specifically in Europe, but Europe

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Speaker 4: is outperforming the US. Value is outperforming growth. So far,

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Speaker 4: that's a very different UH setup than we've had in

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Speaker 4: the last two years, where where you've had, you know,

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Speaker 4: where it's been so tech and growth dominated. And what

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Speaker 4: that tells me right now is that I think the

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Speaker 4: FOMO is fading, particularly as it relates to the growth

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Speaker 4: the MAG seven group. I think investors are starting to

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Speaker 4: look elsewhere and probably should be looking elsewhere for growth

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Speaker 4: opportunities and investment opportunities.

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Speaker 2: So outside of the MAG seven, outside of tech, which

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Speaker 2: in fact obviously has been the big driver of aggregate

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Speaker 2: markets for years and years and years, to the extent,

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Speaker 2: people wanted to look for value opportunities in other sectors.

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Speaker 2: What screens well for you these days?

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Speaker 4: So I think within tech, the old tech is actually

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Speaker 4: pretty interesting. There are companies like QA Packard Enterprises or

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Speaker 4: Cisco Systems that trade below the market multiple Still IBM

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Speaker 4: is turning into turning from the old tech hardware focused

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Speaker 4: company to more of a faster growth software company. And

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Speaker 4: then separately, I think financials are very interesting still, They've

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Speaker 4: had quite a run since the election, but coming up ahead,

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Speaker 4: probably in the next year or two, you'll have potentially

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Speaker 4: greater capital returns from the largest banks, which are probably

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Speaker 4: sitting on too much capital. And as the FED eases

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Speaker 4: those those requirements, I think you'll see, you know, these

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Speaker 4: sleeping giants really wake up.

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Speaker 2: I guess you know, in terms of this is going

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Speaker 2: to be an earnings driven marketplace, you have to obviously

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Speaker 2: have to be right on the economy. You have to

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Speaker 2: be pretty optimistic about the economy. What is your economic call?

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Speaker 2: I think most of the data feels pretty good, but

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Speaker 2: I guess there's some uncertainty out there, whether it's tariffs

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Speaker 2: or anything else like that.

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Speaker 4: Yeah, I think I think the data is still pretty strong.

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Speaker 4: We saw that in the CPI numbers, you know, offset

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Speaker 4: a little bit by the retail weakness, which I think

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Speaker 4: might just be somewhat more seasonal and weather related. But

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Speaker 4: in general, I think the numbers are still strong. The

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Speaker 4: data is still strong. Does it mean that inflation could

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Speaker 4: be a little bit stickier, yes, possibly, But does it

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Speaker 4: mean that we're going to see higher rates or the

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Speaker 4: FED actually raising I think that's a really tough scenario

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Speaker 4: for that to play out. I think most people are

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Speaker 4: still looking for lower rates, even marginally lower rates, or

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Speaker 4: I think right now we're in a holding pattern. But

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Speaker 4: I think that that in general things are strong, and

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Speaker 4: I think that the Fed is going to be very

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Speaker 4: careful about about the great outlook and how that impacts

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Speaker 4: the economy here in.

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Speaker 2: Terms of sentiment, Grace, I mean, you think about the

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Speaker 2: election and the inauguration, some pretty strong animal spirits in

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Speaker 2: the marketplace were unleashed. I think people, you know, trying

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Speaker 2: to discount maybe lower taxes, maybe less regulation, maybe a

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Speaker 2: little bit better environment for m and A. A do

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Speaker 2: you do you buy into that?

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Speaker 4: And B?

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Speaker 2: Do you do you think it's long term?

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Speaker 4: Does it have some legs? Yeah? I think that, you know,

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Speaker 4: there's definitely been a lot of fits and starts. I

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Speaker 4: think there was a lot of exuberance post election that

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Speaker 4: the Trump administration would be, you know, certainly more business friendly,

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Speaker 4: and I think that will be the case. Right now,

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Speaker 4: I think we're still digesting all of the tariff headlines.

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Speaker 4: They're coming pretty fast and furious these days, and it's

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Speaker 4: it's hard to really play tariff blackamole. I think we

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Speaker 4: just have to wait till till they figure things out

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Speaker 4: maybe on a more country by country basis in April

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Speaker 4: or so, you know. But but yeah, I think we've

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Speaker 4: had a bit of a honeymoon in terms of the

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Speaker 4: market sentiment and and we might be getting into a

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Speaker 4: bit more of a reality phase where where you know,

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Speaker 4: we're waiting for a lot of the the goodness to

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Speaker 4: play out, and we might hit a couple of air

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Speaker 4: pockets here and there. But but I do think on

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Speaker 4: the you know, coming out of this, I think we

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Speaker 4: will end up with a better regulatory environment for businesses,

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Speaker 4: you know, possibly lower to tens or certainly you know,

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Speaker 4: maybe in an extension of the tax breaks we got

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Speaker 4: in twenty seventeen, and I think it should still be

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Speaker 4: a constructive environment for business and the economy.

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Speaker 2: Right, Grace, thank you so much for joining us. I

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Speaker 2: always appreciate getting a few minutes of your time. Grace Lee,

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Speaker 2: Senior portfolio manager at Thread Columbia. Thread Needle up there

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Speaker 2: in Boston, joining us via zoom.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 2: Okay, a bitcoin here off about eight tens to one

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Speaker 2: percent here today just about just below ninety six thousand

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Speaker 2: dollars per token. It did reach a high of one

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Speaker 2: hundred and seven thousand dollars per token right after President

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Speaker 2: Trump was elected in the inauguration time, his administration touting

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Speaker 2: itself as a crypto friendly administration. Let's see if that's

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Speaker 2: actually playing out. Ian Ballina joints his founder at see

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Speaker 2: of Token Metrics. Ian, give us a sense of kind

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Speaker 2: of how the crypto community is viewing this incoming, this

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Speaker 2: Trump administration and its view of all things crypto.

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Speaker 5: Thanks for having me, glad to be here. So the

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Speaker 5: new Trump administration being pro crypto. They've mentioned that they

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Speaker 5: anticipate having procrypto regulation within six months. So long term

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Speaker 5: this is amazing for crypto. For the first time in

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Speaker 5: this history, crypto is running downhill, not uphill. But in

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Speaker 5: the short term there has been a large correction in

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Speaker 5: crypto from different sectors, from AI to DeFi and but

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Speaker 5: crypto hasn't really taken off as people had anticipated. Trump

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Speaker 5: entering office has led to essentially buy the rooms seldom US.

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Speaker 5: But long term, this is bullsh for crypto long term?

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Speaker 2: Well, how about you mentioned distributed finance AI crypto a

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Speaker 2: lot of stuff wrapped up in that. Where do you

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Speaker 2: see or where are you and your clients and your vests.

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Speaker 2: Where do you see the most opportunity here?

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Speaker 5: AI? AI still has the most opportunity. If you just

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Speaker 5: take the total crypto mind share in the last one

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Speaker 5: year or so peaked at about seventy percent being fully AI.

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Speaker 5: What does that mean? That means the attention, the awareness

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Speaker 5: in the crypto space was solely focused on AI sector

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Speaker 5: AI projects, from products like A sixteen Z to products

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Speaker 5: like ARC and others. People are seeing what's happening in

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Speaker 5: just tech in general with open ai, XAI and all

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Speaker 5: these other competitors, and that's leading into a rising tide.

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Speaker 5: Looks all both kind of mentality in crypto in the

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Speaker 5: crypto AI space because people see AI as the future.

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Speaker 5: But why it's beautiful in crypto Crypto and AI are

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Speaker 5: marriage made in heaven because in a digital world with

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Speaker 5: digital AI agents, you have Sam Altman saying that AI

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Speaker 5: agents is the biggest narrative in all of tech for

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Speaker 5: this year.

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Speaker 2: So de find what that is?

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Speaker 5: AI agents basically other AI is working together as a

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Speaker 5: team of AIS. These teams of AI is working together,

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Speaker 5: how do you trust each other? That's what cryptos is about.

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Speaker 5: Cryptos built on cryptography, having people online transact through different

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Speaker 5: currencies without having to trust each other. Applying that to

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Speaker 5: AI agents to me does naturally makes sense.

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Speaker 4: Well.

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Speaker 2: One of the areas that I a lot of folks

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Speaker 2: that maybe aren't as involved in AI, in crypto, in

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Speaker 2: some of these new technologies is does there need to

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Speaker 2: be regulation? If so, how much and by whom where

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Speaker 2: are we there?

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Speaker 5: Yes, there's definitely does need to be regulation in the

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Speaker 5: cryptic space, also in the AI space as well, but

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Speaker 5: not to a level what it stops or restricts innovation,

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Speaker 5: right because AI, as mentioned by the administration, is essentially

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Speaker 5: a national security issue. China is basically just flying but

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Speaker 5: by their pants, and we can really allow the US

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Speaker 5: to become backwards in terms of technology with AI and

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Speaker 5: the same thing with crypto. So I don't think restriction

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Speaker 5: that inhibits innovation makes sense. That's why I think David

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Speaker 5: Sachs the AI cryptos are was actually a pointed to

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Speaker 5: that role. Those two are tied together. AI and cryptoire

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Speaker 5: tie together because for America to stay forward as a company,

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Speaker 5: as a country in terms of the economy and just

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Speaker 5: technology and advancement. They have to innovate. And for the

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Speaker 5: last almost eight years in crypto, with the SEC and

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Speaker 5: other different regulators, they forced US entrepreneurs offshore, and now

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Speaker 5: by the administration wanting to make crypto or rather make

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Speaker 5: America the crypto capital of the world, they have to

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Speaker 5: basically be open for business and they have to welcome innovation,

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Speaker 5: not try to social offshore.

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Speaker 2: So one of the uncertainties I guess of the Biden

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Speaker 2: administration was who in fact would regulate some of these technologies,

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Speaker 2: particularly across the crypto space. Was a Gary Gensler at

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Speaker 2: the SEC. Was the CFTC, the Commodities Futures UH Commission Commission?

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Speaker 2: Where are we going now? Where where's where's the wind

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Speaker 2: takeing us?

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Speaker 4: Now?

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Speaker 2: Who's going to regulate this thing?

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Speaker 5: So right now it looks like it's basically a team effort.

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Speaker 5: It's both does CFTC kind of taking the lead and

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Speaker 5: also the SEC as well. But regardless of who's taking

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Speaker 5: the lead, they all have to really understand crypto at

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Speaker 5: a deep level. They can be crypto and a sayers, Yes,

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Speaker 5: they are risking and crypto. Yes, scripture is not perfect,

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Speaker 5: it's not ideal, it's new to technology is still being polished,

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Speaker 5: but you have to kind of take a very optimistic

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Speaker 5: approach in terms of seeing the future and the possibilities

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Speaker 5: of crypto.

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Speaker 2: So, you know, Bloomberg News did a story a couple

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Speaker 2: of quarters ago when every single one of the S

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Speaker 2: and P five hundred companies mentioned AI in their quarterly

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Speaker 2: earnings release and comments that came. That's up from like,

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Speaker 2: you know, a handful a quarter or two before that.

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Speaker 2: Where do you see the real I guess applications of

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Speaker 2: AI where most of us going to see it day

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Speaker 2: to day? How are you guys thinking about that?

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Speaker 5: So, what we're seeing with our customers and even people

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Speaker 5: in a cry crypto space is AI is unlocking a

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Speaker 5: completely new user experience. So, for example, take define the

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Speaker 5: centralized finance and crypto space. Whether it's yield optimization, whether

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Speaker 5: it's trading agents, different complexities that you basically had to

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Speaker 5: be a crypto expert or quant expert to leverage. You

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Speaker 5: can now just use AI to help manage all that

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Speaker 5: for you. What does that mean? Let's say you want

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Speaker 5: to do a flash loan which is basically complicated where

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Speaker 5: in crypto of borrowing money and making a trade and

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Speaker 5: paying it back all in real time, all in one transaction,

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Speaker 5: very hard to execute. But now with AI in the

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Speaker 5: same way how chad GPT has unlocked and given everybody

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Speaker 5: pretty much a PhD on their computer, you can now

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Speaker 5: have that same PhD person doing all kinds of innovations

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Speaker 5: in the crypto space, from trading to investing to rebouncing

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Speaker 5: your portfolio, for example, talking about we're building trading agents

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Speaker 5: to allow people to trade crypto using AI passive way.

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Speaker 5: So we're seeing this completely unlock different elements that the

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Speaker 5: average person didn't really tap into will have access to.

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Speaker 2: How and it's it's early in the Trump administration. Hell

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Speaker 2: I guess optimistic are folks in the crypto space that

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Speaker 2: President Trump and his team will in fact deliver on being,

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Speaker 2: you know, a very positive force for crypto.

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Speaker 5: Very very optimistic because if you just kind of zoom

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Speaker 5: out and see the history of crypto, crypto has grown

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Speaker 5: to become a three trillion dollar asset class. We think

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Speaker 5: it can go to about eight to fourteen trillion by

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Speaker 5: twenty twenty six. But that entire time it's been basically

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Speaker 5: pushed down by an anti procrypto regulation. And now crypto

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Speaker 5: finally has a seat at the table. From the Crypto

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Speaker 5: ball to the Crypto Council to the AI. Cryptos are

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Speaker 5: the Finally, there's finally a pathway to crypto having a

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Speaker 5: seat at the table and to crypto coming in much

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Speaker 5: bigger asset class.

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Speaker 2: All right, Ian, thank you so much for joining us.

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Speaker 2: Fascinating discussion there. Ian Balina he is the founder and

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Speaker 2: CEO of Token Metrics, joining us via zoom from Austin, Texas.

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