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Speaker 2: Let's get some of those geopolitical issues coming out of
Speaker 2: your Ros Matheson joins us, Bloomberg News Director for Europe,
Speaker 2: the Middle East, and Africa, on these US and Russia
Speaker 2: talks here, Ros, what do you think the strategy is
Speaker 2: for the US and Russia Here at these early early
Speaker 2: stages of the talks.
Speaker 3: It's very clear that they're trying to enact Donald Trump's agenda,
Speaker 3: which is for a quick resolution to this conflict. But
Speaker 3: also it seems to be about a really broad reset
Speaker 3: of the relationship between the US and Russia. Of course,
Speaker 3: under Joe Biden and Russia was very much seen as
Speaker 3: a pariah state. He called him a dictator and other things,
Speaker 3: and so there was very little contact, and certainly the
Speaker 3: US was amongst those imposing very sweeping sanctions and penalties
Speaker 3: on Russia. And this is all signaling a very different
Speaker 3: mindset from the current administration. Which is about engaging with Russia,
Speaker 3: perhaps no longer so strenously policing those sanctions, collaborating even
Speaker 3: with Russia on issues around energy supply and so on,
Speaker 3: and certainly a core part of that is bringing this
Speaker 3: war at least to a cease five very quick quickly.
Speaker 3: So that's a very startling turnaround in just a matter
Speaker 3: of weeks. The question now is, off the back of
Speaker 3: this meeting, at what point do we see Vladimir Putin
Speaker 3: and Donald Trump sit down together.
Speaker 2: Let's we'll get to that into just a second. What
Speaker 2: role though, should Ukraine, mister Zelenski and maybe even broader
Speaker 2: Europe play in these discussions. I suspect that, you know,
Speaker 2: a lot of politicians, a lot of ambassadors in Europe
Speaker 2: are really on their heels today.
Speaker 3: Well, that's been the concern and certainly was brought home
Speaker 3: with the speech by JD Vance to the Munich Security
Speaker 3: Forum here in Europe just last week. The strong sense
Speaker 3: of a completely different relationship with Europe, and the concern
Speaker 3: that you hear a lot amongst European officials is they're
Speaker 3: going to get squeezed out of the conversation when it
Speaker 3: comes to Ukraine and effectively defense on their doorstep in
Speaker 3: their own region, and what part do they play in
Speaker 3: the parameters of an agreement on Ukraine, and what role
Speaker 3: are they expected to play afterward, potentially with peacekeepers or
Speaker 3: funding collective defense in the region. And certainly you can
Speaker 3: see from the news just recently that blood Muslimski has
Speaker 3: now canceled his trip to Saudi Arabia tomorrow. He was
Speaker 3: due to be there in the aftermath of these US
Speaker 3: Russia talks, and the concern optically there is obviously that
Speaker 3: he was coming to get some kind of readout from
Speaker 3: the Saudi Arabians from a call that he was excluded
Speaker 3: from from those meetings, and that he's now decided longer
Speaker 3: going to go. And that's a really telling signal from
Speaker 3: Ukraine again that they're at this point feeling they're completely
Speaker 3: cut out of the conversation.
Speaker 2: Do we have any sense of what can actually be
Speaker 2: agreed upon between the US and Russia that does not
Speaker 2: include Ukraine in that agreement? It doesn't seem like I'm
Speaker 2: not sure anything substantial can really be agreed to if
Speaker 2: it doesn't include Ukraine.
Speaker 3: Well, that's right, And does Ukraine just then reject whatever
Speaker 3: is presented to them and what role do the Europeans
Speaker 3: have in that, And it seems to be from the
Speaker 3: europe sod at least about trying to help shape what
Speaker 3: the US and Russia are talking about shape it early
Speaker 3: for some of those concerns that are on the table
Speaker 3: again about does this involve Ukraine having to see territory?
Speaker 3: If so, how much territory does it have to seed
Speaker 3: for an agreement to be done, What does it look
Speaker 3: like in the future in terms of a frozen conflict
Speaker 3: in potentially you know, what does it mean for security
Speaker 3: guarantees for Ukraine and what are those? I mean, it's
Speaker 3: clear the US doesn't want Ukraine part of NATO, for example,
Speaker 3: doesn't want to put its own troops on the ground
Speaker 3: inside Ukraine. But can Europe do that in some fashion
Speaker 3: And that's a very difficult question for Europe as well,
Speaker 3: And so it just feels like they're worried that some
Speaker 3: kind of understandings will be reached and then in essence
Speaker 3: an agreement kind of gets presented to Ukraine collectively by
Speaker 3: the US and Russia and is it to take it
Speaker 3: or leave it? Equation at that point.
Speaker 2: So the next step, maybe one of the next step
Speaker 2: for OZ is actually a meeting between mister Putin and
Speaker 2: President Trump. Is there any consensus about when that could
Speaker 2: happen and where maybe, well.
Speaker 3: There have been some talk it could happen as soon
Speaker 3: as next week, also in Saudi Arabia, but it's it
Speaker 3: seems clear from the readouts from the meetings today that
Speaker 3: that's unlikely. And obviously it's an incredibly tricky logistical exercise
Speaker 3: to get them together, even in a country like Saudi Arabia.
Speaker 3: I've got a lot of security issues around that. The
Speaker 3: optics of putting the meeting together. What does that look
Speaker 3: like in terms of basic stuff like where do they walk,
Speaker 3: where do they sit down? All that has to be
Speaker 3: agreed and then you know, in a way, it's a
Speaker 3: trickier meeting for Donald Trump. You can see perhaps why
Speaker 3: the Americans have decided not to rush it next week,
Speaker 3: because on the surface of it, he has more to
Speaker 3: lose from a meeting. Vladimir Putin doesn't have much to
Speaker 3: lose from sitting down with Donald Trump. It's only really
Speaker 3: upside for him. But for Donald Trump it's not without
Speaker 3: some risk for his own reputation. So perhaps the Americans
Speaker 3: want to take a bit of a pause there and
Speaker 3: work out again how they would come into that meeting
Speaker 3: and what they want to get out of it, and
Speaker 3: so are slowing things down a bit, but it doesn't
Speaker 3: seem like it's going to be on the cards at
Speaker 3: least now for next week.
Speaker 2: All right, Rose, thank you very much for your reporting.
Speaker 2: Appreciate getting a few minutes of your times. Ross Matthewson.
Speaker 2: She's news director for Europe, the Middle East and Africa
Speaker 2: for Bloomberg new She is based in London, and we'll
Speaker 2: keep in touch with her and her reporting as this
Speaker 2: situation remains extraordinarily fluid, and we'll see again. Maybe one
Speaker 2: of the next steps in this process will be Resident
Speaker 2: Trump sitting down with mister Putin and maybe trying to
Speaker 2: move this ball forward. The question then remains for a
Speaker 2: lot of observers is what role is there for President
Speaker 2: Zelenski and Ukraine.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: I am Paul Sweeney. You're live here in our Bloomberg
Speaker 2: Interactive Broker Studio and we are streaming live on youtube'shead
Speaker 2: everyday YouTube dot com and search Bloomberg Podcast Live, and
Speaker 2: that's where you'll find us. As Lisa was just reporting here,
Speaker 2: we got kind of a mixed tape out there, but
Speaker 2: a pretty good start to the year. S and P
Speaker 2: up about four percent, and even if you look at
Speaker 2: the equal weighted SMP up a similar levels, so maybe
Speaker 2: a little bit of a broadening there. Grace Lee joins,
Speaker 2: a senior portfolio manager Columbia thread Needle from the great
Speaker 2: town of Boston. One of my all time faves. Grace,
Speaker 2: thanks so much for joining us here. You know a
Speaker 2: lot of folks saying for this equity market to continue
Speaker 2: to move higher, it really has to be earnings driven,
Speaker 2: because it doesn't look like the feeder reserve is going
Speaker 2: to do a whole lot for UH equity investors. How
Speaker 2: do you think about the drivers of this equity market here?
Speaker 4: Thanks for having me, Paul. Yeah. I do think that
Speaker 4: earnings are starting to catch up for the non mag
Speaker 4: seven and we started to see that late last year,
Speaker 4: and I think the market actually is in a pretty
Speaker 4: good place year to date. The most interesting things that
Speaker 4: stand out to me is that UH, and we don't
Speaker 4: play our funds don't play specifically in Europe, but Europe
Speaker 4: is outperforming the US. Value is outperforming growth. So far,
Speaker 4: that's a very different UH setup than we've had in
Speaker 4: the last two years, where where you've had, you know,
Speaker 4: where it's been so tech and growth dominated. And what
Speaker 4: that tells me right now is that I think the
Speaker 4: FOMO is fading, particularly as it relates to the growth
Speaker 4: the MAG seven group. I think investors are starting to
Speaker 4: look elsewhere and probably should be looking elsewhere for growth
Speaker 4: opportunities and investment opportunities.
Speaker 2: So outside of the MAG seven, outside of tech, which
Speaker 2: in fact obviously has been the big driver of aggregate
Speaker 2: markets for years and years and years, to the extent,
Speaker 2: people wanted to look for value opportunities in other sectors.
Speaker 2: What screens well for you these days?
Speaker 4: So I think within tech, the old tech is actually
Speaker 4: pretty interesting. There are companies like QA Packard Enterprises or
Speaker 4: Cisco Systems that trade below the market multiple Still IBM
Speaker 4: is turning into turning from the old tech hardware focused
Speaker 4: company to more of a faster growth software company. And
Speaker 4: then separately, I think financials are very interesting still, They've
Speaker 4: had quite a run since the election, but coming up ahead,
Speaker 4: probably in the next year or two, you'll have potentially
Speaker 4: greater capital returns from the largest banks, which are probably
Speaker 4: sitting on too much capital. And as the FED eases
Speaker 4: those those requirements, I think you'll see, you know, these
Speaker 4: sleeping giants really wake up.
Speaker 2: I guess you know, in terms of this is going
Speaker 2: to be an earnings driven marketplace, you have to obviously
Speaker 2: have to be right on the economy. You have to
Speaker 2: be pretty optimistic about the economy. What is your economic call?
Speaker 2: I think most of the data feels pretty good, but
Speaker 2: I guess there's some uncertainty out there, whether it's tariffs
Speaker 2: or anything else like that.
Speaker 4: Yeah, I think I think the data is still pretty strong.
Speaker 4: We saw that in the CPI numbers, you know, offset
Speaker 4: a little bit by the retail weakness, which I think
Speaker 4: might just be somewhat more seasonal and weather related. But
Speaker 4: in general, I think the numbers are still strong. The
Speaker 4: data is still strong. Does it mean that inflation could
Speaker 4: be a little bit stickier, yes, possibly, But does it
Speaker 4: mean that we're going to see higher rates or the
Speaker 4: FED actually raising I think that's a really tough scenario
Speaker 4: for that to play out. I think most people are
Speaker 4: still looking for lower rates, even marginally lower rates, or
Speaker 4: I think right now we're in a holding pattern. But
Speaker 4: I think that that in general things are strong, and
Speaker 4: I think that the Fed is going to be very
Speaker 4: careful about about the great outlook and how that impacts
Speaker 4: the economy here in.
Speaker 2: Terms of sentiment, Grace, I mean, you think about the
Speaker 2: election and the inauguration, some pretty strong animal spirits in
Speaker 2: the marketplace were unleashed. I think people, you know, trying
Speaker 2: to discount maybe lower taxes, maybe less regulation, maybe a
Speaker 2: little bit better environment for m and A. A do
Speaker 2: you do you buy into that?
Speaker 4: And B?
Speaker 2: Do you do you think it's long term?
Speaker 4: Does it have some legs? Yeah? I think that, you know,
Speaker 4: there's definitely been a lot of fits and starts. I
Speaker 4: think there was a lot of exuberance post election that
Speaker 4: the Trump administration would be, you know, certainly more business friendly,
Speaker 4: and I think that will be the case. Right now,
Speaker 4: I think we're still digesting all of the tariff headlines.
Speaker 4: They're coming pretty fast and furious these days, and it's
Speaker 4: it's hard to really play tariff blackamole. I think we
Speaker 4: just have to wait till till they figure things out
Speaker 4: maybe on a more country by country basis in April
Speaker 4: or so, you know. But but yeah, I think we've
Speaker 4: had a bit of a honeymoon in terms of the
Speaker 4: market sentiment and and we might be getting into a
Speaker 4: bit more of a reality phase where where you know,
Speaker 4: we're waiting for a lot of the the goodness to
Speaker 4: play out, and we might hit a couple of air
Speaker 4: pockets here and there. But but I do think on
Speaker 4: the you know, coming out of this, I think we
Speaker 4: will end up with a better regulatory environment for businesses,
Speaker 4: you know, possibly lower to tens or certainly you know,
Speaker 4: maybe in an extension of the tax breaks we got
Speaker 4: in twenty seventeen, and I think it should still be
Speaker 4: a constructive environment for business and the economy.
Speaker 2: Right, Grace, thank you so much for joining us. I
Speaker 2: always appreciate getting a few minutes of your time. Grace Lee,
Speaker 2: Senior portfolio manager at Thread Columbia. Thread Needle up there
Speaker 2: in Boston, joining us via zoom.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: Okay, a bitcoin here off about eight tens to one
Speaker 2: percent here today just about just below ninety six thousand
Speaker 2: dollars per token. It did reach a high of one
Speaker 2: hundred and seven thousand dollars per token right after President
Speaker 2: Trump was elected in the inauguration time, his administration touting
Speaker 2: itself as a crypto friendly administration. Let's see if that's
Speaker 2: actually playing out. Ian Ballina joints his founder at see
Speaker 2: of Token Metrics. Ian, give us a sense of kind
Speaker 2: of how the crypto community is viewing this incoming, this
Speaker 2: Trump administration and its view of all things crypto.
Speaker 5: Thanks for having me, glad to be here. So the
Speaker 5: new Trump administration being pro crypto. They've mentioned that they
Speaker 5: anticipate having procrypto regulation within six months. So long term
Speaker 5: this is amazing for crypto. For the first time in
Speaker 5: this history, crypto is running downhill, not uphill. But in
Speaker 5: the short term there has been a large correction in
Speaker 5: crypto from different sectors, from AI to DeFi and but
Speaker 5: crypto hasn't really taken off as people had anticipated. Trump
Speaker 5: entering office has led to essentially buy the rooms seldom US.
Speaker 5: But long term, this is bullsh for crypto long term?
Speaker 2: Well, how about you mentioned distributed finance AI crypto a
Speaker 2: lot of stuff wrapped up in that. Where do you
Speaker 2: see or where are you and your clients and your vests.
Speaker 2: Where do you see the most opportunity here?
Speaker 5: AI? AI still has the most opportunity. If you just
Speaker 5: take the total crypto mind share in the last one
Speaker 5: year or so peaked at about seventy percent being fully AI.
Speaker 5: What does that mean? That means the attention, the awareness
Speaker 5: in the crypto space was solely focused on AI sector
Speaker 5: AI projects, from products like A sixteen Z to products
Speaker 5: like ARC and others. People are seeing what's happening in
Speaker 5: just tech in general with open ai, XAI and all
Speaker 5: these other competitors, and that's leading into a rising tide.
Speaker 5: Looks all both kind of mentality in crypto in the
Speaker 5: crypto AI space because people see AI as the future.
Speaker 5: But why it's beautiful in crypto Crypto and AI are
Speaker 5: marriage made in heaven because in a digital world with
Speaker 5: digital AI agents, you have Sam Altman saying that AI
Speaker 5: agents is the biggest narrative in all of tech for
Speaker 5: this year.
Speaker 2: So de find what that is?
Speaker 5: AI agents basically other AI is working together as a
Speaker 5: team of AIS. These teams of AI is working together,
Speaker 5: how do you trust each other? That's what cryptos is about.
Speaker 5: Cryptos built on cryptography, having people online transact through different
Speaker 5: currencies without having to trust each other. Applying that to
Speaker 5: AI agents to me does naturally makes sense.
Speaker 4: Well.
Speaker 2: One of the areas that I a lot of folks
Speaker 2: that maybe aren't as involved in AI, in crypto, in
Speaker 2: some of these new technologies is does there need to
Speaker 2: be regulation? If so, how much and by whom where
Speaker 2: are we there?
Speaker 5: Yes, there's definitely does need to be regulation in the
Speaker 5: cryptic space, also in the AI space as well, but
Speaker 5: not to a level what it stops or restricts innovation,
Speaker 5: right because AI, as mentioned by the administration, is essentially
Speaker 5: a national security issue. China is basically just flying but
Speaker 5: by their pants, and we can really allow the US
Speaker 5: to become backwards in terms of technology with AI and
Speaker 5: the same thing with crypto. So I don't think restriction
Speaker 5: that inhibits innovation makes sense. That's why I think David
Speaker 5: Sachs the AI cryptos are was actually a pointed to
Speaker 5: that role. Those two are tied together. AI and cryptoire
Speaker 5: tie together because for America to stay forward as a company,
Speaker 5: as a country in terms of the economy and just
Speaker 5: technology and advancement. They have to innovate. And for the
Speaker 5: last almost eight years in crypto, with the SEC and
Speaker 5: other different regulators, they forced US entrepreneurs offshore, and now
Speaker 5: by the administration wanting to make crypto or rather make
Speaker 5: America the crypto capital of the world, they have to
Speaker 5: basically be open for business and they have to welcome innovation,
Speaker 5: not try to social offshore.
Speaker 2: So one of the uncertainties I guess of the Biden
Speaker 2: administration was who in fact would regulate some of these technologies,
Speaker 2: particularly across the crypto space. Was a Gary Gensler at
Speaker 2: the SEC. Was the CFTC, the Commodities Futures UH Commission Commission?
Speaker 2: Where are we going now? Where where's where's the wind
Speaker 2: takeing us?
Speaker 4: Now?
Speaker 2: Who's going to regulate this thing?
Speaker 5: So right now it looks like it's basically a team effort.
Speaker 5: It's both does CFTC kind of taking the lead and
Speaker 5: also the SEC as well. But regardless of who's taking
Speaker 5: the lead, they all have to really understand crypto at
Speaker 5: a deep level. They can be crypto and a sayers, Yes,
Speaker 5: they are risking and crypto. Yes, scripture is not perfect,
Speaker 5: it's not ideal, it's new to technology is still being polished,
Speaker 5: but you have to kind of take a very optimistic
Speaker 5: approach in terms of seeing the future and the possibilities
Speaker 5: of crypto.
Speaker 2: So, you know, Bloomberg News did a story a couple
Speaker 2: of quarters ago when every single one of the S
Speaker 2: and P five hundred companies mentioned AI in their quarterly
Speaker 2: earnings release and comments that came. That's up from like,
Speaker 2: you know, a handful a quarter or two before that.
Speaker 2: Where do you see the real I guess applications of
Speaker 2: AI where most of us going to see it day
Speaker 2: to day? How are you guys thinking about that?
Speaker 5: So, what we're seeing with our customers and even people
Speaker 5: in a cry crypto space is AI is unlocking a
Speaker 5: completely new user experience. So, for example, take define the
Speaker 5: centralized finance and crypto space. Whether it's yield optimization, whether
Speaker 5: it's trading agents, different complexities that you basically had to
Speaker 5: be a crypto expert or quant expert to leverage. You
Speaker 5: can now just use AI to help manage all that
Speaker 5: for you. What does that mean? Let's say you want
Speaker 5: to do a flash loan which is basically complicated where
Speaker 5: in crypto of borrowing money and making a trade and
Speaker 5: paying it back all in real time, all in one transaction,
Speaker 5: very hard to execute. But now with AI in the
Speaker 5: same way how chad GPT has unlocked and given everybody
Speaker 5: pretty much a PhD on their computer, you can now
Speaker 5: have that same PhD person doing all kinds of innovations
Speaker 5: in the crypto space, from trading to investing to rebouncing
Speaker 5: your portfolio, for example, talking about we're building trading agents
Speaker 5: to allow people to trade crypto using AI passive way.
Speaker 5: So we're seeing this completely unlock different elements that the
Speaker 5: average person didn't really tap into will have access to.
Speaker 2: How and it's it's early in the Trump administration. Hell
Speaker 2: I guess optimistic are folks in the crypto space that
Speaker 2: President Trump and his team will in fact deliver on being,
Speaker 2: you know, a very positive force for crypto.
Speaker 5: Very very optimistic because if you just kind of zoom
Speaker 5: out and see the history of crypto, crypto has grown
Speaker 5: to become a three trillion dollar asset class. We think
Speaker 5: it can go to about eight to fourteen trillion by
Speaker 5: twenty twenty six. But that entire time it's been basically
Speaker 5: pushed down by an anti procrypto regulation. And now crypto
Speaker 5: finally has a seat at the table. From the Crypto
Speaker 5: ball to the Crypto Council to the AI. Cryptos are
Speaker 5: the Finally, there's finally a pathway to crypto having a
Speaker 5: seat at the table and to crypto coming in much
Speaker 5: bigger asset class.
Speaker 2: All right, Ian, thank you so much for joining us.
Speaker 2: Fascinating discussion there. Ian Balina he is the founder and
Speaker 2: CEO of Token Metrics, joining us via zoom from Austin, Texas.
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