WEBVTT - How The Ultra-Wealthy Are Investing 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.640 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.560 at Bloomberg dot com slash podcast. Well, it's really a 0:00:22.680 --> 0:00:24.880 joy to speak to our next guest, Michael sanin Felt. 0:00:24.920 --> 0:00:27.760 He's the chairman and founder of Tiger twenty one. Tiger 0:00:27.800 --> 0:00:31.000 twenty one is a peer membership organization for high net 0:00:31.000 --> 0:00:34.519 worth wealth creators and preservers, helping them to navigate the 0:00:34.640 --> 0:00:38.720 challenges and opportunity to that success creates. Tiger twenty one 0:00:38.720 --> 0:00:42.199 has nine members with more than eighty eight billion dollars 0:00:42.240 --> 0:00:45.720 in assets, so are really unique perspective and some from 0:00:46.600 --> 0:00:50.680 the group of ultrawealthy UH individuals business owners that have 0:00:50.760 --> 0:00:53.800 monetized their businesses. Uh. Michael, thanks so much for joining us. 0:00:53.920 --> 0:00:57.360 I love to get your thoughts on what your members 0:00:57.400 --> 0:01:00.800 are telling you now that at least in the US, 0:01:00.840 --> 0:01:03.200 there are clear signs that we're coming out on the 0:01:03.200 --> 0:01:06.360 other side of this pandemic. How are they viewing the 0:01:06.400 --> 0:01:10.840 world and investment opportunities. Well, thanks for having me, Um. 0:01:10.880 --> 0:01:13.640 You know, it's an interesting time. In one sense. If 0:01:13.680 --> 0:01:15.880 you were ripped rand Winkle and you went to sleep 0:01:15.920 --> 0:01:18.200 a year and a half ago and you woke up today, 0:01:18.760 --> 0:01:21.000 you wouldn't be all that shock. You might not even 0:01:21.040 --> 0:01:24.600 have known there was a pandemic looking at the financial numbers. 0:01:24.640 --> 0:01:27.920 But at this particular moment, I think our members are 0:01:28.000 --> 0:01:32.520 digesting some incredibly mixed signals. On the one hand, uh, 0:01:32.520 --> 0:01:35.679 there's a lot of concern about inflation, uh, and mixed 0:01:35.720 --> 0:01:39.679 messages about areas of the economy where there is inflation. 0:01:40.200 --> 0:01:42.679 And on the other hand, as you've just talked about 0:01:42.760 --> 0:01:45.760 the you know, there's some question about whether that we're 0:01:45.760 --> 0:01:47.600 in a bubble and whether we're at the top of 0:01:47.640 --> 0:01:50.880 a market and how do you protect yourself? Uh. And 0:01:50.960 --> 0:01:55.000 yet there are these long term businesses that have incredible potential. 0:01:55.440 --> 0:01:57.520 So it's a lot of mixed signals that feels a 0:01:57.600 --> 0:02:00.480 little different than we've had in the past. It's pretty 0:02:00.520 --> 0:02:04.000 much a spring back effect coming out of the pandemic. 0:02:04.080 --> 0:02:07.120 I think, Michael, how are your clients preparing for the 0:02:07.200 --> 0:02:12.840 changes that can emerge when it comes to taxes. Sure, 0:02:13.360 --> 0:02:16.720 First of all, they're not clients their members UM because 0:02:17.120 --> 0:02:19.639 these are all people who joined the organization and we're 0:02:19.680 --> 0:02:22.919 not an advisor, but we do get a sense of 0:02:22.960 --> 0:02:26.600 what they're doing. We had a UM we had a 0:02:26.600 --> 0:02:30.520 poll which was really interesting that showed with members that 0:02:30.600 --> 0:02:36.800 when taxes grow more than five percent, differential behavior starts changing. 0:02:37.120 --> 0:02:38.720 And one of the things we talked about in our 0:02:38.760 --> 0:02:42.680 groups we have seventy five groups across the globe UM 0:02:42.880 --> 0:02:46.640 is you know what happens when taxes really rise quickly? 0:02:46.720 --> 0:02:49.079 Capital gains is the one we talk about a lot. 0:02:49.480 --> 0:02:52.880 There's some evidence when you raise capital gains above thirty 0:02:53.960 --> 0:02:57.160 you may not actually increase revenue to the government because 0:02:57.200 --> 0:03:00.720 people's behavior change and they don't realize as many gains 0:03:00.720 --> 0:03:04.959 and it becomes counterproductive. So depending on where the changes 0:03:05.080 --> 0:03:11.120 occur will impact behavior. Obviously, you have tremendous migration out 0:03:11.120 --> 0:03:15.359 of New York into Florida and out of Silicon Valley 0:03:15.400 --> 0:03:19.600 into Austin, just to use as an example, because when 0:03:19.600 --> 0:03:23.280 you had the elimination of the deductibility of state and 0:03:23.360 --> 0:03:28.239 local taxes, it made the high tax states really expensive 0:03:28.280 --> 0:03:31.400 and for some people they want to change their lifestyle 0:03:31.440 --> 0:03:34.559 as a result of it, again that five percent differential 0:03:34.880 --> 0:03:38.240 start showing behavioral changes. Michael, I'd love to get a 0:03:38.280 --> 0:03:41.880 sense of kind of what your members think about cryptocurrencies. 0:03:41.920 --> 0:03:44.400 A lot of investors just across the spectrum or are 0:03:44.480 --> 0:03:48.400 a trying to understand what the whole world of crypto 0:03:48.520 --> 0:03:51.680 and then be if I do have a working understanding 0:03:51.720 --> 0:03:53.800 of it, how do I invest in it? So how 0:03:53.800 --> 0:03:56.920 are your folks, again, the ultry wealthy folks thinking about 0:03:56.920 --> 0:04:01.160 this space? Sure, so we tend to separate. First of all, 0:04:01.240 --> 0:04:04.360 our members are not only interested in crypto, but some 0:04:04.520 --> 0:04:07.320 of them are running some of the new crypto funds 0:04:07.320 --> 0:04:10.640 and have really extraordinary expertise. That's one of the advantages 0:04:10.680 --> 0:04:14.480 about being in our groups. But generally the first order 0:04:14.680 --> 0:04:18.279 is sort of a substitute for gold. Some attributes of 0:04:18.360 --> 0:04:22.880 particularly bitcoin superior to gold, the most being that you 0:04:23.000 --> 0:04:28.520 have a capped amount of bitcoin, so that you have scarcity. Uh. 0:04:28.560 --> 0:04:31.960 And historically gold was a one to three percent asset 0:04:32.080 --> 0:04:36.120 across the average of our members, and today my guess 0:04:36.200 --> 0:04:40.120 is that bitcoin is approaching perhaps a one percent number. 0:04:40.440 --> 0:04:43.760 You know, with a scale of our organization that's still 0:04:43.800 --> 0:04:49.280 approaching a billion dollars of bitcoin potentially UM, but the 0:04:49.720 --> 0:04:55.120 bigger story is the blockchain story. The blockchain story many 0:04:55.120 --> 0:04:57.960 members think could be as big as the Internet itself 0:04:58.000 --> 0:05:01.919 because of the disruptive nature UH that it will have 0:05:02.080 --> 0:05:06.200 on trade, commerce and finance. So in the bitcoin and 0:05:06.279 --> 0:05:09.760 in the cryptocurrencies, in the public area, you have things 0:05:09.800 --> 0:05:13.160 like UH, I think it's great scale bitcoin trust and 0:05:13.200 --> 0:05:16.360 I think they have some other publicly traded trusts, so 0:05:16.400 --> 0:05:18.640 you can buy it like a stock, and it reflects 0:05:19.120 --> 0:05:22.000 the rise and fall of the price of bitcoin. But 0:05:22.080 --> 0:05:25.640 if you're interested in the broader and of course coin 0:05:25.720 --> 0:05:31.560 Base having gone public is the largest infrastructure play for 0:05:31.680 --> 0:05:37.120 cryptocurrency and in the in the broader blockchain area, UM. 0:05:37.120 --> 0:05:41.719 Probably the number one UH company involved in blockchain because 0:05:41.760 --> 0:05:44.760 of commerce is Amazon. Of course, if you buy Amazon, 0:05:45.200 --> 0:05:48.200 you're buying a lot of other themes as well. But 0:05:48.320 --> 0:05:50.599 over the long term, they, they and some of the 0:05:50.640 --> 0:05:56.320 other tech giants really are looking at how blockchain will 0:05:56.400 --> 0:05:58.920 change the world. I'd love to switch gears just a 0:05:58.960 --> 0:06:02.039 little bit to another hot button area, which is real estate. 0:06:02.120 --> 0:06:06.680 With prices so high, are your members buying, are they 0:06:06.800 --> 0:06:10.440 waiting or what are they doing in regard to their 0:06:10.440 --> 0:06:13.840 real estate purchases right now. So so you know, our 0:06:13.880 --> 0:06:18.200 members um joined Tiger when they have liquidity events and 0:06:19.000 --> 0:06:22.719 have built a large, successful company. And the number one 0:06:22.839 --> 0:06:27.479 asset among our members has been real estate for over 0:06:27.560 --> 0:06:31.359 a decade, followed by private equity and then public equity 0:06:31.440 --> 0:06:34.679 or today it's been reversed with public equity. Going forward, 0:06:34.760 --> 0:06:37.360 real estate is king and the reason is that's where 0:06:37.360 --> 0:06:40.600 our members have expertise. But um, you know when they 0:06:40.600 --> 0:06:44.200 say like still water runs deep. Um, if you say 0:06:44.200 --> 0:06:46.840 the word real estate, it sounds like it's a single market, 0:06:46.960 --> 0:06:50.080 but there's no market more in transition. If you look 0:06:50.120 --> 0:06:54.960 at the retail space, there's just uh, endless negativity going 0:06:55.080 --> 0:06:59.560 forward because those Internet sales have changed the way people 0:06:59.600 --> 0:07:04.000 buy forever. And if that's hurt the retail space, the 0:07:04.080 --> 0:07:08.279 industrial space that serves those internet sales, the last mile 0:07:08.720 --> 0:07:13.040 delivery and some of the telecommunications industrial real estate has 0:07:13.040 --> 0:07:16.480 been on fire. That's been amazing. And in the middle, 0:07:16.960 --> 0:07:19.880 you know, you have the big question about residential, which 0:07:19.960 --> 0:07:23.800 is just the perennial favorite. It's income producing an office. 0:07:23.920 --> 0:07:27.120 Everybody's gonna wonder what's happening with office. That's that's the 0:07:27.160 --> 0:07:30.200 big question. Hey, Michael, Thanks so much for joining us again. 0:07:30.280 --> 0:07:33.320 We always love getting your perspective. It is a unique perspective. 0:07:33.400 --> 0:07:36.640 Michael Son and Felt, chairman and founder of a tiger 0:07:37.160 --> 0:07:45.840 one billion dollars assets. This is Bloomberg. Well, we did 0:07:45.840 --> 0:07:49.320 get the I s M Services Index data this morning. 0:07:49.320 --> 0:07:50.760 I guess for the month of June it fell to 0:07:50.880 --> 0:07:55.080 sixty point one versus the record sixty four May. So 0:07:55.160 --> 0:07:58.000 that's not so good. The expectation was for sixty three 0:07:58.080 --> 0:08:00.720 point five, so came in a little bit below expectations. 0:08:00.880 --> 0:08:03.880 That's not so good. But heck, are reading a sixty 0:08:03.880 --> 0:08:06.240 point one in and of itself is very good. So 0:08:06.280 --> 0:08:08.880 how to really pass through this? We welcome Steve you 0:08:08.920 --> 0:08:12.400 should oh he's a chief economist for Miszoo ho Security. Steve, 0:08:12.440 --> 0:08:15.280 what was your takeaway this i SM data this morning? Well, 0:08:15.280 --> 0:08:16.720 I mean you kind of hit the nail on the 0:08:16.760 --> 0:08:18.760 head a moment ago PUB when you talked about the 0:08:18.800 --> 0:08:21.400 fact that you know it's down relative to expectations, but 0:08:21.520 --> 0:08:24.920 the headline number is still in that expansion every phase. 0:08:24.960 --> 0:08:28.000 Now this is for the service component of the economy. 0:08:28.040 --> 0:08:31.880 The manufacturing number are disappointed as well relative to expectations, 0:08:32.160 --> 0:08:34.839 but again still at a healthy level. But what's most 0:08:34.920 --> 0:08:38.280 important about the data in here is the details of 0:08:38.360 --> 0:08:40.959 the report, you know, the details of the report getting 0:08:40.960 --> 0:08:43.600 at what was actually happening in terms of orders and 0:08:43.679 --> 0:08:46.760 employment and things of that nature. Whereas where we saw 0:08:46.840 --> 0:08:49.960 the weakness and the biggest negative surprise was in that 0:08:50.080 --> 0:08:52.880 employment component, which came in at minus four. It came 0:08:52.880 --> 0:08:56.240 in at forty nine point three versus fifty five point three, 0:08:56.280 --> 0:08:58.920 and that's really a fairly large drop. That's a six 0:08:59.280 --> 0:09:03.120 index point drop in the employment component. And considering that 0:09:03.200 --> 0:09:06.120 this is what's really being the factors that people are 0:09:06.160 --> 0:09:10.800 looking at in driving monetary policy, especially after that solid 0:09:10.800 --> 0:09:14.120 payroll employment number yesterday, I'll ask Friday in terms of 0:09:14.120 --> 0:09:17.120 the headline number coming into eight hundred and fifty, this 0:09:17.200 --> 0:09:21.360 disappointment tells you that perhaps the fifty numbers more an 0:09:21.360 --> 0:09:25.400 anomaly than it is going to be the new norm. Well, 0:09:25.440 --> 0:09:29.400 what are some of the more complicated aspects of this, right? 0:09:29.440 --> 0:09:34.720 You know? I S M had said material shortages, inflation, logistics, 0:09:34.720 --> 0:09:38.760 and employment resources continue to be a problem. Right, And 0:09:38.800 --> 0:09:41.199 so it looks like you hit a snag and one 0:09:41.200 --> 0:09:43.640 part of the economy and then it impacts another part 0:09:43.640 --> 0:09:46.560 of the economy, and it looks like, um, there's a 0:09:46.559 --> 0:09:50.760 bit of a tangled web of issues here. So how 0:09:51.040 --> 0:09:54.080 do how does this number kind of stand when you 0:09:54.120 --> 0:09:58.960 think about broader economic recoveries here? Well, I mean, look, 0:09:59.320 --> 0:10:01.720 the reality as the economy is going to put in 0:10:01.760 --> 0:10:03.920 a very very good growth rate number this year. Okay, 0:10:04.480 --> 0:10:07.240 second quarter g DP our number seven and a half percent. 0:10:07.400 --> 0:10:10.440 That's a really solid number. But it doesn't compare to 0:10:10.440 --> 0:10:14.000 the nine percent numbers people have been talking about. And 0:10:14.120 --> 0:10:17.000 this data again doesn't fit with the numbers that have 0:10:17.200 --> 0:10:20.760 people and being discussed in some areas. It consistent with 0:10:20.800 --> 0:10:24.440 you know, a million workers being added every month between 0:10:24.480 --> 0:10:26.840 now and the end of the year. In terms of 0:10:26.880 --> 0:10:29.560 the employment numbers, these numbers are telling you that a 0:10:29.640 --> 0:10:32.800 lot of the incentive to the economy that was provided 0:10:33.240 --> 0:10:36.520 by the by the two point eight trillion in stimulus 0:10:36.600 --> 0:10:39.480 that we were given UM earlier this year, between the 0:10:39.520 --> 0:10:42.760 Trump program and the Biden program, the nine hundred billion 0:10:42.800 --> 0:10:45.480 and the and the one point nine trillion program, that 0:10:45.679 --> 0:10:48.520 is largely run its course, and you're starting to see 0:10:48.520 --> 0:10:52.400 the economy come back slowly to a more realistic growth level. 0:10:52.640 --> 0:10:54.959 It's still going to be robust and solid relative to 0:10:55.000 --> 0:10:57.719 our historical norms for the next couple of quarters. But 0:10:57.800 --> 0:10:59.880 the upside momentum is kind of over and done with. 0:11:00.280 --> 0:11:02.240 We've seen the peak in the economy and now we're 0:11:02.320 --> 0:11:05.319 rolling down the other side of that. Do you think, so, 0:11:05.400 --> 0:11:07.200 how do you think the FED kind of looks at 0:11:07.400 --> 0:11:10.480 at that Steve that Does the FED feel like I can, 0:11:10.600 --> 0:11:13.880 in fact stay on the sidelines or do we think 0:11:13.920 --> 0:11:15.760 back to the last FED meeting where the dot plots 0:11:15.800 --> 0:11:19.240 got some people's attention about potentially tightening you know, again, 0:11:19.320 --> 0:11:22.400 when the Fed changes its dots in three which, to 0:11:22.440 --> 0:11:24.880 be honest, it's a year and a half out um, 0:11:25.520 --> 0:11:27.839 you know, and people pay attention to that. That I 0:11:27.960 --> 0:11:30.880 think is the mistake, you know, talking about going from 0:11:31.000 --> 0:11:33.679 one dot to two dots in terms of one hike 0:11:33.760 --> 0:11:36.840 to two hikes in twenty the end of twenty three, 0:11:37.360 --> 0:11:41.320 in an environment where the unemployment rate actually moved up 0:11:41.800 --> 0:11:45.280 to five point nine percent from five point eight percent 0:11:45.360 --> 0:11:47.760 when everyone's expecting it to drop. The five point six 0:11:48.840 --> 0:11:51.840 is going to be a problem for those more hawkish 0:11:51.920 --> 0:11:54.880 members of the committee because even though the employment number 0:11:54.960 --> 0:11:58.480 was good at fifty thousand, the more political aspect of 0:11:58.559 --> 0:12:02.400 this is the jobless rate and the household employment numbers 0:12:02.440 --> 0:12:04.920 weren't particularly robust. So I think when you look at 0:12:04.960 --> 0:12:08.000 all this, it's a really good economy. It's just not 0:12:08.120 --> 0:12:11.000 as strong as people want to see to fit with 0:12:11.240 --> 0:12:14.000 what we have seen in terms of the Hawks discussions 0:12:14.320 --> 0:12:17.520 and the optimistic scenarios as to where this economy is 0:12:17.559 --> 0:12:20.199 going to go. Essentially, members of the Committee and I 0:12:20.280 --> 0:12:22.599 think a lot of people in the financial community have 0:12:22.760 --> 0:12:26.760 written checked this economy can't cash into great economy, but 0:12:26.960 --> 0:12:29.800 it's not as strong as they would like. I like 0:12:29.960 --> 0:12:33.040 a little top Gun reference there, Stevens Judeo, chief economist 0:12:33.080 --> 0:12:36.559 for Missoo Securities USA. I'm sure he's getting ready for 0:12:36.640 --> 0:12:39.719 top Gun two, which I think is coming in the 0:12:39.880 --> 0:12:43.120 fall from power Amount Stevens Judo. Good to have him 0:12:43.200 --> 0:12:45.480 on here talking about this. I S M data still 0:12:45.679 --> 0:12:48.760 pretty strong. Don't freak out. The bond market definitely paying 0:12:48.800 --> 0:12:53.640 attention here with the ten uere you know, below two um, 0:12:53.880 --> 0:12:59.079 but still a good number overall. Looking at w t 0:12:59.160 --> 0:13:02.160 I crude oil here seventy four hours thirty three cents 0:13:02.160 --> 0:13:04.960 announced off about eighties cents, but it had been as 0:13:05.080 --> 0:13:08.719 high as seventies six dollars and cents earlier Today so 0:13:08.840 --> 0:13:12.200 this is uh, just moving higher. We've seen oil really 0:13:12.200 --> 0:13:14.720 over the last several weeks, and all I know about 0:13:14.800 --> 0:13:17.880 that is it's a commodity, so it's supply, it's demand. 0:13:18.360 --> 0:13:21.840 So I'm guessing demand ising, you know, more than supply 0:13:22.000 --> 0:13:24.920 right here. So that's basically my analysis. Fortunately, we have 0:13:25.040 --> 0:13:28.280 somebody much much smarter on this to explain it to us, 0:13:28.440 --> 0:13:32.480 Fernando Valier. He's an oil and gas analyst for Bloomberg Intelligence. Fernando, 0:13:32.559 --> 0:13:36.079 let's start with OPEC here. Um, they didn't get it 0:13:36.120 --> 0:13:38.400 done this weekend, So tell us what's going on with OPEK, 0:13:38.800 --> 0:13:40.559 what happened over the weekend, and kind of how you 0:13:40.600 --> 0:13:44.160 think it might play out. Sure, both, First, thanks for 0:13:44.240 --> 0:13:48.040 being for let me participate today. Um, there's a major 0:13:48.160 --> 0:13:52.199 disagreement between OPEC plus in putting Russia UH and the 0:13:52.480 --> 0:13:56.120 u A, the United Arab Emirates, And the big dispute 0:13:56.240 --> 0:13:58.439 is really about when you set the baseline for the 0:13:58.520 --> 0:14:03.079 OPEC plus cards their stock of extending the cuts beyond 0:14:03.280 --> 0:14:07.360 A two. The EE doesn't want to extend this early ahead, 0:14:07.440 --> 0:14:10.800 but they are okay to complain with the cuts, but 0:14:11.000 --> 0:14:15.160 their baseline for production is set in October, and they 0:14:15.320 --> 0:14:20.160 added to tacity UH just after that. So currently the 0:14:20.240 --> 0:14:22.760 EE has about a third of its capacity that's been 0:14:22.840 --> 0:14:28.160 idled since the cuts in UM and so they want 0:14:28.240 --> 0:14:30.840 to bring back. They want to reset the baseline to 0:14:30.920 --> 0:14:34.320 be their production production production capacity as it stands as 0:14:34.360 --> 0:14:39.560 opposed to October and as opposed to the Saudi Arabian economy, 0:14:39.640 --> 0:14:41.880 the EE is a lot more depending on oil revenue. 0:14:41.920 --> 0:14:44.560 So even though they're benefiting from the rise in oil prices, 0:14:45.040 --> 0:14:47.400 they're still struggling a little bit with the fiscal balance 0:14:47.880 --> 0:14:52.160 without that additional production. Can you draw out what's at 0:14:52.320 --> 0:14:56.000 stake here, because really it looks like it's the stability 0:14:56.520 --> 0:14:59.440 of the global economic recovery. Oil is already at a 0:14:59.480 --> 0:15:04.360 six year I what are the ramifications of a lot 0:15:04.400 --> 0:15:08.920 of these delays and the volatility that's arising from them. Well, 0:15:09.040 --> 0:15:12.640 currently the biggest issue is just higher oil prices for 0:15:12.720 --> 0:15:14.920 the short term, although right now they're trading down a 0:15:15.000 --> 0:15:19.600 little bit. But without resetting that baseline UH and getting 0:15:19.600 --> 0:15:23.840 additional volume, we would be and in the current status 0:15:23.880 --> 0:15:26.040 grow of the mint recovery in O E C D, 0:15:26.680 --> 0:15:30.120 we would expect this UH in balance to continue and 0:15:30.440 --> 0:15:33.280 drive oil prices higher. And there's actually pressure from the 0:15:33.320 --> 0:15:36.520 Biden administrations for OPEX to increase some of that production 0:15:36.600 --> 0:15:39.960 back so we don't see a disparate impact on inflation 0:15:40.080 --> 0:15:43.080 as we're seeing with other commodities. So that's really what's 0:15:43.160 --> 0:15:47.040 in the balance now. And ultimately UH energy is really 0:15:47.560 --> 0:15:51.200 um hinges on GDP growth in in gasoline and jet 0:15:51.360 --> 0:15:55.240 on disposal income growth. So higher oil prices are actually 0:15:56.280 --> 0:16:00.280 a long term issue for oil demand. So there is 0:16:00.600 --> 0:16:04.120 an interest for OPEC to not get back to the 0:16:04.240 --> 0:16:08.000 hundred hunder dollar oil prices that we saw in two 0:16:08.080 --> 0:16:11.280 thousand and ten to two thousand fourteen, because really that's 0:16:11.320 --> 0:16:13.840 what gave Ryan's to shale, that's what gave rise to 0:16:13.880 --> 0:16:17.320 a lot of the UH improvements in my legion that 0:16:17.600 --> 0:16:22.040 that really have curtailed oil and man. So Fernando generally speaking, 0:16:22.280 --> 0:16:27.320 where would OPEC like oil to trade in an ideal world. 0:16:27.400 --> 0:16:29.720 I know different countries, I guess have different break evens, 0:16:29.800 --> 0:16:33.160 and just give us a sense of how that works. Yeah, exactly. 0:16:33.200 --> 0:16:35.080 So the break even is opposed to a company is 0:16:35.120 --> 0:16:37.200 not what it takes for you to cover your operating 0:16:37.240 --> 0:16:41.120 expenses and everything else. It's because these these countries are 0:16:41.280 --> 0:16:45.880 essentially almost at dependent on oil is how much what 0:16:46.040 --> 0:16:49.680 oil prices they require in order to cover their fiscal costs, 0:16:50.280 --> 0:16:53.080 and that will vary from Pennezuela, which is into two 0:16:53.160 --> 0:16:56.880 hundreds UH, society which is probably closer to fifty five 0:16:56.960 --> 0:17:02.880 to sixty depending on their production levels and UM. So 0:17:03.560 --> 0:17:06.480 the Saudi and Russia can can make do in the 0:17:06.560 --> 0:17:10.200 six to seventy dollar range UM, but they probably prefer 0:17:10.359 --> 0:17:13.120 anywhere between seventy to eighty dollars. I think that tends 0:17:13.160 --> 0:17:16.040 to be a price where you can start to see 0:17:16.720 --> 0:17:20.080 an impact on global demand. We have a heuristic that 0:17:20.440 --> 0:17:23.280 when at total energy costs are over seven percent of 0:17:23.440 --> 0:17:27.960 global UH the domestic product, it starts to be detrimental 0:17:28.080 --> 0:17:31.679 to overall growth. So I think that gets you anywhere 0:17:31.720 --> 0:17:34.920 between six to seventy five. I think that's probably their 0:17:34.960 --> 0:17:38.440 Goldilock scenario where they're making a lot of money UM, 0:17:38.600 --> 0:17:40.880 but at the same time they're not damaging a long 0:17:41.000 --> 0:17:44.080 term reman. Can you give us a roadmap here of 0:17:44.160 --> 0:17:46.359 what the next couple of days should look like and 0:17:46.920 --> 0:17:51.040 what the conflicts might be in the interim, Well, I 0:17:51.119 --> 0:17:55.800 think that's that's everybody's cats. Now. THEE has said the 0:17:55.920 --> 0:17:58.760 meeting has been postponed, while SARDI and Russia said the 0:17:58.840 --> 0:18:03.399 meeting was canceled. UM. So I think for now, at 0:18:03.440 --> 0:18:05.480 least in the short term, we're going to continue having 0:18:05.560 --> 0:18:09.320 these dually narratives. I think talks of the U E 0:18:09.520 --> 0:18:15.200 leaving OPEC are probably not unfounded, but I think we'll 0:18:15.280 --> 0:18:18.560 we'll get more pressure to at least get a temporary, 0:18:19.760 --> 0:18:22.080 at least a small increasing in production over the next 0:18:22.520 --> 0:18:25.520 couple of days UH, and that could be coupled with 0:18:26.040 --> 0:18:30.480 extending the deal beyond the current expiry. Hey, Fernando, you 0:18:30.560 --> 0:18:33.119 mentioned earlier the U S shale producers. They have not 0:18:33.200 --> 0:18:36.800 been the most disciplined lot historically. Do we expect them 0:18:37.720 --> 0:18:41.760 to just start drilling again? Well, so far we haven't 0:18:41.800 --> 0:18:45.240 seen that, except for the private operators. The public operators 0:18:45.320 --> 0:18:48.399 have stuck to their capital discipline, and part of that 0:18:48.560 --> 0:18:50.919 is because they have to, because they took on too 0:18:51.000 --> 0:18:53.639 much debt during the pandemic and the focus now is 0:18:53.680 --> 0:18:56.800 to reduce that debt rather than continue to grow. Um. 0:18:57.160 --> 0:19:00.359 You've seen anywhere one from chronical Phillips, who has always 0:19:00.400 --> 0:19:04.119 been disciplined increasing share by backs UH to OXY that 0:19:04.520 --> 0:19:07.520 UH hasn't always been the most discipline but focusing instead 0:19:07.560 --> 0:19:10.400 of on debt reduction. So right now, when you look 0:19:10.440 --> 0:19:14.040 at the track spread count UM, which is how many 0:19:14.080 --> 0:19:18.240 walls are completed, UH, only the permian is up significantly 0:19:18.320 --> 0:19:22.800 from the loads of April, but even that there we 0:19:22.880 --> 0:19:25.920 haven't seen a return to twenty nineteen levels. So we're 0:19:25.920 --> 0:19:29.200 seeing that discipline. Most of the growth has been from 0:19:29.240 --> 0:19:32.359 private operators that don't have the same pressures as the 0:19:32.440 --> 0:19:35.560 public ones, and the public ones have outlined more plans 0:19:35.640 --> 0:19:38.000 to return capital as opposed to continue English to grow. 0:19:39.000 --> 0:19:41.600 What can we see coming out of Washington, UM, real 0:19:41.680 --> 0:19:44.439 quick here, really in thirty seconds or so. What can 0:19:44.520 --> 0:19:49.480 we expect from Joe Biden in terms of guidance? I 0:19:49.600 --> 0:19:55.200 think mostly diplomacy as opposed to outward comments. The administrations 0:19:55.240 --> 0:19:57.560 in a tough spot where they have to promote higher 0:19:57.600 --> 0:20:03.040 oil production, which is really against their overall UH stated goals, 0:20:03.800 --> 0:20:07.000 but in order to prevent higher inflation that could be 0:20:07.160 --> 0:20:09.320 damaging to the to the U S and global economy, 0:20:09.800 --> 0:20:12.520 they have to pressure OPEC plus to raise production a 0:20:12.600 --> 0:20:14.560 little bit, but they can't be seen out the lead 0:20:14.640 --> 0:20:18.960 to be doing that. So so so Setst. Fernando, thank 0:20:18.960 --> 0:20:20.960 you so much for joining us. We appreciate it as 0:20:21.040 --> 0:20:24.520 always your go to person for global oil. Fernando val 0:20:25.040 --> 0:20:28.080 oil and gas analysts for Bloomberg in intelligence, looking at 0:20:28.200 --> 0:20:30.239 w t I crude here, it's been a really volatile day. 0:20:30.240 --> 0:20:33.159 Trader as high as seventy seven dollars for barrel, now 0:20:33.320 --> 0:20:37.240 down trading down to seventy four dollars. So volatility continues 0:20:37.320 --> 0:20:40.000 in the global energy markets. Will pay attention to OPEC. 0:20:40.320 --> 0:20:47.440 This is Bloomberg. All right. Let's talk plastic waste. It's 0:20:47.440 --> 0:20:49.880 a big, big issue for a lot of consumer products 0:20:49.960 --> 0:20:53.280 companies as they try to combat this issue. There's different 0:20:53.320 --> 0:20:56.800 technologies out there for doing that, and we as consumers 0:20:56.880 --> 0:20:59.600 try to do our part by recycling. Let's check in 0:20:59.680 --> 0:21:02.240 with marking staff and he's a deputy CEO of Carbios. 0:21:02.320 --> 0:21:05.080 Carbios is a company that trades on the UNEXT under 0:21:05.119 --> 0:21:08.800 the ticker symbol a l c RB, based in France. Martin, 0:21:08.880 --> 0:21:11.199 thanks so much for joining us here. Talk to us, 0:21:11.280 --> 0:21:14.520 just frame out for us the global problem that is 0:21:14.600 --> 0:21:20.800 plastics waste. Yes, thank you for inviting me. Uh. You know, 0:21:21.600 --> 0:21:25.560 three and fifty million metric tons of plastics are produced 0:21:25.640 --> 0:21:29.760 every year, of which ten million metric tones end up 0:21:29.800 --> 0:21:32.959 in the environment every year, So it's a big issue 0:21:33.160 --> 0:21:36.200 and the issue is not plastics. The issue is plastic 0:21:36.320 --> 0:21:40.639 waste because we have been producing plastics for more than 0:21:40.800 --> 0:21:44.840 fifty years and we have not taken enough care of 0:21:45.080 --> 0:21:48.639 the end of life of plastics and carbios. We are 0:21:48.760 --> 0:21:52.680 the first and only company to develop biological technologies for 0:21:52.840 --> 0:21:56.200 the end of life of plastics and fibers. Martin, maybe 0:21:56.200 --> 0:21:59.960 you could speak a little to how large global corporations 0:22:00.280 --> 0:22:04.440 like Laureale or Pepsi are able to be a part 0:22:04.480 --> 0:22:09.080 of the solution better than the problem. They are part 0:22:09.119 --> 0:22:12.440 of the solution, Yes, and they really feel responsible for that. 0:22:12.560 --> 0:22:15.919 It's a co responsibility, you know, to tackle this plastic 0:22:16.040 --> 0:22:19.719 pollution issue. Nobody will be able to put an end 0:22:19.760 --> 0:22:23.840 to plastic pollution by itself, so it's really a global play. 0:22:24.480 --> 0:22:29.960 And our partners, you know, laur Real Nicely, PepsiCo Century, 0:22:30.760 --> 0:22:35.399 they are very aware that it's by collaborating with a 0:22:35.520 --> 0:22:40.840 startup like us, with governance, with NGOs that we will 0:22:41.040 --> 0:22:45.480 develop solutions to really tackle this plastic solution issue, which 0:22:45.600 --> 0:22:49.200 is not acceptable. Talk to us, Martin about kind of 0:22:49.359 --> 0:22:52.960 what your technology is, what it does and in kind 0:22:53.000 --> 0:22:56.600 of how it's being used. Yes, so we use a 0:22:56.680 --> 0:23:00.600 biological tool, which is an enzyme. You know, we have 0:23:00.760 --> 0:23:04.119 a lot of enzymes in our body. An enzyme is 0:23:04.480 --> 0:23:08.560 a catalyst which triggers a reaction. Normally, it triggers a 0:23:08.640 --> 0:23:13.800 biological reaction, but our scientists had the idea to use 0:23:13.960 --> 0:23:18.639 this biological tool to trigger not a biological reaction, but 0:23:18.760 --> 0:23:23.040 a chemical reaction. And this chemical reaction is to break 0:23:23.119 --> 0:23:30.240 down plastics into its monomaiers, which are the common building 0:23:30.280 --> 0:23:34.640 blocks of plastics. So instead of putting together the same 0:23:34.720 --> 0:23:38.199 molecule sudden of times to make a plastic or a fiber, 0:23:39.080 --> 0:23:43.760 our enzyme breaks down this long chain of molecule into 0:23:44.320 --> 0:23:49.520 single molecules which are called monomers. Then we isolate the monomaers, 0:23:49.720 --> 0:23:53.640 we purify them, and we recombine them again to make 0:23:53.800 --> 0:23:57.600 new plastic with the same quality as plastics which are 0:23:57.680 --> 0:24:01.080 made from petrochemicals. So it's a real a solution for 0:24:01.200 --> 0:24:03.720