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Speaker 2: Where is the Federal Reserve going to go?
Speaker 3: We've got a lot of economic data out there that
Speaker 3: I guess, with the hindsight, still looks okay. But boy,
Speaker 3: if you look at some of the survey data, whether
Speaker 3: it's you miss data from a couple of weeks ago,
Speaker 3: which we'll get some updated you miss data on this Friday,
Speaker 3: whether it's some other survey data, it shows that the
Speaker 3: consumers a little bit concerned out there, inflation expectations a
Speaker 3: little bit heightened.
Speaker 2: So how does the Fed take that into account? Well?
Speaker 3: I know Danielle di Martino Booth, she'll have some thoughts here.
Speaker 3: She's the CEO and chief strategist at QI Research. Danielle,
Speaker 3: what's the data you're looking at? Give you a sense
Speaker 3: of where this economy really is today? Maybe we're inflation
Speaker 3: expectations are today? Because the Fed probably needs to be
Speaker 3: a little bit nimble here, don't they?
Speaker 4: Yes, good morning, and thank you for having me. And
Speaker 4: absolutely the FED does need to be nimble. We actually
Speaker 4: saw with the Durable Goods report that came out kind
Speaker 4: of the first hard data that agrees with you. Across
Speaker 4: the board, every single regional Federal Reserve survey has shown
Speaker 4: reduced capital expenditure planning going into the future, reduced employment
Speaker 4: going into the future as well. And most of what
Speaker 4: we've been seeing has been, as you said, soft survey data.
Speaker 4: Now we have hard data to back that up with
Speaker 4: this morning's report, and so the Fed's going to have
Speaker 4: to start thinking. The Dallas Federal Reserve did some great
Speaker 4: work about a year ago that showed that it is investment,
Speaker 4: business investment that leads the US economy in and out
Speaker 4: of recession. With the looks that that is going to
Speaker 4: be turning down, and again corroborated by every single regional
Speaker 4: FED survey all the way down to the Richmond FED
Speaker 4: and Philly FED that we've had these last few days,
Speaker 4: the Fed's going to have to become more concerned, as
Speaker 4: we saw in that CFO survey, about the possibility of recession.
Speaker 4: So they're going to have to balance the two when
Speaker 4: they're making their policy there's two non farm pair reports
Speaker 4: before they meet again on May six and seventh.
Speaker 5: And that's what I was going to say, six weeks
Speaker 5: away before we get the next Federal Reserve decision, and
Speaker 5: you were mentioning those key economic data points that are
Speaker 5: going to be coming ahead of that, as well as
Speaker 5: that reciprocal tariff deadline on April A second here, So
Speaker 5: what's the playbook you think ahead of this Federal Reserve
Speaker 5: meeting and what do you think needs to happen in
Speaker 5: the data depending on what could force them to move
Speaker 5: in a particular way.
Speaker 4: So, you know, given the magnitude of the challenge, your
Speaker 4: Grand Christmas layoffs one hundred and seventy two thousand, only
Speaker 4: sixty two thousand of which we're attributable to the public sector.
Speaker 4: In February, we're at about the same run rate. We're
Speaker 4: running at about one hundred and fifty thousand layoffs layoffs
Speaker 4: announced in the month of March. It's looking like the
Speaker 4: Fed might get to that four point four percent year
Speaker 4: end unemployment rate target by the time they meet again.
Speaker 4: So I think that the real risk is that Powell's
Speaker 4: going to have to pivot again in favor of the
Speaker 4: employment mandate. If what we're seeing on the ground with
Speaker 4: layoffs and of course Bcygo bankruptcy is runing at about
Speaker 4: a twenty two pace for fifty million or more liabilities
Speaker 4: on the terminal that you can follow, they're going to
Speaker 4: have to start paying more attention to what higher for
Speaker 4: longer is doing to the real economy.
Speaker 2: So what is the focus here right now?
Speaker 3: If you think of the Fed danielle is inflation is
Speaker 3: an employment?
Speaker 2: How do they balance that these days?
Speaker 4: So they're definitely focused on inflation expectations. We saw you
Speaker 4: fairly Dubvish voter Austin Goolsby saying we really have to
Speaker 4: pay attention to see if these inflation expectations become on
Speaker 4: him and start to filter their way into the actual
Speaker 4: inflation metrics. But we haven't seen that yet. And the
Speaker 4: fact is, what we're hearing from one company after another
Speaker 4: is that there's a margin squeeze going on. They are
Speaker 4: having to deal with higher input prices. There was a
Speaker 4: lot of stockpiling ahead of the potential for imposed tariffs,
Speaker 4: not that we know what they're going to look like yet,
Speaker 4: but companies are reporting one after another that they cannot
Speaker 4: pass through these prices to the end consumer, whether you're
Speaker 4: talking about Walmart or Dollar Tree.
Speaker 5: That's interesting too because when I've talked to Tom Barkin
Speaker 5: before at the Richmond FED, he talked about how he
Speaker 5: would actually look at the price mixed volume. When you're
Speaker 5: looking at a lot of these companies and consumer package
Speaker 5: good companies, whether it's like a Coca Cola, PepsiCo, craft
Speaker 5: times and especially what it was meaning for inflation and
Speaker 5: things like that, what do you like to look at
Speaker 5: Because I mean, you have so much experience. You previously
Speaker 5: were an advisor at the Fed Bank of Dallas during
Speaker 5: the global financial crisis. So when you're looking at some
Speaker 5: of these key consumers type names, and what do you
Speaker 5: think it could mean for infleetion other forms of growth
Speaker 5: on the other side of the employment thing, what are
Speaker 5: you watching there?
Speaker 4: So you know, I think everybody's focus right now is
Speaker 4: on consumer discretionary But to Barkin's point and to your point,
Speaker 4: we're actually seeing the staples come under pressure because of
Speaker 4: what we've heard from some of the lowest cost retailers
Speaker 4: out there, and that's that some US households are even
Speaker 4: beginning to cut back on essential spending. They're moving away
Speaker 4: from brands. They're moving away from packaged goods. Whereas these
Speaker 4: companies were able to pass through these prices for several
Speaker 4: years following the pandemic, now they're hitting a wall. McCormick
Speaker 4: was the latest to come out and make those types
Speaker 4: of comments here in the last forty eight hours or so.
Speaker 4: So we really do have to be cognizant of the
Speaker 4: potential for a margin squeeze here, and that I think
Speaker 4: has to be on the feder radar. Again. It is
Speaker 4: business investment and not consumption. Despite consumption being a record
Speaker 4: seventy one percent of USGDP, business investment has always led
Speaker 4: the US economy in and out of its cycles of
Speaker 4: expansion and recession.
Speaker 3: I'm looking at the WRP function Danielle in the Bloomberg
Speaker 3: terminal of the world interest rate probability. It looks like
Speaker 3: the market's pricing and maybe just a little bit more
Speaker 3: than two rate cuts this year.
Speaker 5: I feel like it's always all over the place. Though
Speaker 5: when we look at that function.
Speaker 3: It is, it is, and I have it, you know,
Speaker 3: you know, not a whole lot of confidence in it,
Speaker 3: not to say it's not very representative or interesting and useful,
Speaker 3: but boy, it's all over the place, but a little
Speaker 3: more than two rate cuts this year, Danielle, Does that
Speaker 3: seem reasonable to you?
Speaker 4: You know, I really think we're going to see maybe
Speaker 4: double that or more.
Speaker 2: Wow.
Speaker 4: We're setting up for the September meeting a lot like
Speaker 4: exccuse me. We're setting up for the main meeting a
Speaker 4: lot like we did in between July and September of
Speaker 4: twenty twenty four. Some non farm PAI reports are a
Speaker 4: little bit lagged in terms of their release. The April
Speaker 4: report is actually released on May second, so that is
Speaker 4: five days before the FED meets again, but during blackout.
Speaker 4: So the Fed's going to have to be very very
Speaker 4: cognisant of its employment mandate because I think that that
Speaker 4: in particular is moving in such a way the momentum.
Speaker 4: We're seeing it with fewer jobs in the Consumer Confidence Report,
Speaker 4: we're seeing with sixty six percent of Americans in you
Speaker 4: Mish saying that they anticipate the unemployment rates going to
Speaker 4: rise in a year. We've never been at these levels,
Speaker 4: whether it's Conference Board or University of Michigan, when the
Speaker 4: US economy has not already been in recession. Looking through
Speaker 4: the mirror, all.
Speaker 3: Right, we're going to get some more new University of
Speaker 3: Michigan data this Friday, so we'll be having that for.
Speaker 2: You as well. Danielle give Martino Booth.
Speaker 3: She's the CEO and chief strategist at QI Research. One
Speaker 3: of the smarter folks we talked to when it comes
Speaker 3: to all things Fed, a reserve, and kind of how
Speaker 3: the Fed's trying to deal with current economic condition.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 1: Just say Alexa, play Bloomberg eleven thirty.
Speaker 3: The next move the Federal Reserve will take maybe a
Speaker 3: hike this fall. You don't see that every day, So
Speaker 3: that's where I want to start. Skylar Linen joins his
Speaker 3: CIO of Reagan Capital Management down at the Hedge Fund
Speaker 3: Hotel down in Dallas, Texas to the Crescent Court. Spent
Speaker 3: many a day there, got tons of II votes there,
Speaker 3: stayed at the hotel there. It's a good place to be. Skyler,
Speaker 3: talk to us about kind of how.
Speaker 2: You're approaching the market these days.
Speaker 3: We've had that ten percent pullback in the market got
Speaker 3: people's attention.
Speaker 2: We've bounced off that a little bit. Where do you
Speaker 2: think we go from here? Long term? Up?
Speaker 6: Oh, sure, you know it's going to be volatile. But
Speaker 6: what we're seeing is that the consumer and corporations in
Speaker 6: the US are still so strong. Corporate leverage levels are
Speaker 6: the lowest they've been in recorded history at about twenty percent,
Speaker 6: and consumer balance sheets are extremely strong. In aggregate, you're
Speaker 6: looking at one hundred and sixty trillion dollars of net
Speaker 6: wealth in the United States. A lot of that has
Speaker 6: come from the stock market and real estate, and so
Speaker 6: you know that spending is going to come. But for
Speaker 6: right now, you know, people are a little bit nervous
Speaker 6: corporate activity, corporate M and A are in the same
Speaker 6: boat as consumers. But long term, you know, we kind
Speaker 6: of see this this market running for at least the
Speaker 6: next three to four years based on how much dry
Speaker 6: powder is available for consumers and corporations.
Speaker 5: So you're thinking of potential hike maybe in the fall,
Speaker 5: of what would need to happen in order for that.
Speaker 6: To occur, it's already happening, right, So look at inflation,
Speaker 6: look at what was really interesting about the recent FED
Speaker 6: meeting a week ago was not only you know the
Speaker 6: press are and what they did, but if you look
Speaker 6: at the dot plot and if you look at their predictions,
Speaker 6: they make those predictions once a quarter of where GDP
Speaker 6: is going, where PCE is going, and where inflation's going.
Speaker 6: They're predicting pcee to to actually it moved up from
Speaker 6: December to December to March. And they're predicting that rates,
Speaker 6: you know, inflation is not going to fall below two
Speaker 6: for yours you know, two plus years. They're predicting unemployment
Speaker 6: to actually fall. So unemployment's coming down, inflation's going up.
Speaker 6: Those are their two mandates, right, and so there is
Speaker 6: absolutely no one can make any reasoning for me as
Speaker 6: to why they would hike in this environment. Okay, yes,
Speaker 6: financial conditions are restrictive. They're saying they're fairly restrictive right now.
Speaker 6: But if terrorists come to come to boot and if
Speaker 6: that causes inflation, we're going to see another you know,
Speaker 6: Paul Voker type of moment where they're like, all right,
Speaker 6: we need to get this under control. We need to
Speaker 6: hike back up to you know, four fifty to five percent.
Speaker 3: So given that backdrop here, we've gotten, I guess, a
Speaker 3: lot of noise that the markets have to deal with
Speaker 3: on a short term basis with policy decisions coming out
Speaker 3: of Washington. Are we embracing risk in the equity markets,
Speaker 3: are we embracing risk in the fixed income markets? Are
Speaker 3: kind of just holding back a little bit on.
Speaker 6: The fixed income side, you still have to stay short.
Speaker 6: You know, the Fed cut last September, roughly six months ago.
Speaker 6: Fixed income has not done very well since then. The
Speaker 6: agg was up one in a quarter last year. It's
Speaker 6: up about two percent so far this year. So the
Speaker 6: egg's done okay, but from September to day it's down okay,
Speaker 6: So it's basically flat. So and if you look at
Speaker 6: the shape of the curve, you're not getting paid. You know,
Speaker 6: you can sit there in cash at four thirty. You
Speaker 6: can buy agency government guaranteed mortgage bonds that are floating
Speaker 6: rate at five and a quarter okay, so you get
Speaker 6: paid five handle yield to sit there, and the belly
Speaker 6: of the curves inverted. International.
Speaker 3: A lot of people are talking to me about international markets,
Speaker 3: and they've had such a good start European markets.
Speaker 2: In particular this year.
Speaker 3: How do you guys think about the US versus non
Speaker 3: US these days.
Speaker 6: Well, part of that's due to the dollar. You know,
Speaker 6: the dollars come down. If you look at Asia, for example,
Speaker 6: Asia's not done very well this year, but dollar adjusted
Speaker 6: it has so that's part of it. But you know,
Speaker 6: so that's helped out ur it a little bit. But
Speaker 6: you know, Germany announces that they're going to turn the
Speaker 6: printers on and they're going to issue tons of debt,
Speaker 6: and going back to World War One, Germany is a
Speaker 6: very austere economy and now all of a sudden, you know,
Speaker 6: based on the Ukraine War, all right, we're going to
Speaker 6: see a ton of debt printing and so that's really
Speaker 6: ignited a certain sectors, obviously like defense. So yeah, it
Speaker 6: pays to be you know, well diversified both in terms
Speaker 6: of uh, you know, equities, but also in terms of
Speaker 6: locations as well.
Speaker 5: How long does that story last for international just because
Speaker 5: they underperformed so much relative to the last year and
Speaker 5: especially the last two years of the bull market run
Speaker 5: in the s and P five hundred because of what
Speaker 5: was going on with AI and obviously these are the
Speaker 5: corners were cheaper.
Speaker 2: But is this something more.
Speaker 5: Temporary that you think is going to happen more international?
Speaker 7: Does it stick?
Speaker 8: Yeah?
Speaker 6: So, you know, we're a couple months into the administration,
Speaker 6: two and a half months, right, and they came out,
Speaker 6: you know, the administration came out and said, hey, look
Speaker 6: we're going to break some things for the first hundred days.
Speaker 6: So what do we got.
Speaker 2: We're halfway there.
Speaker 6: We're halfway to one hundred days basically, So, you know,
Speaker 6: three four months into it, we got a couple months
Speaker 6: to go before the spotlight comes back on the United
Speaker 6: States and volatility decreases. We're seeing that in the VIX.
Speaker 6: You know, VIX almost hit sixteen handle yesterday, and so
Speaker 6: when that volatility subsides, I think the spotlight comes back
Speaker 6: onto the US, it comes back onto the big meg seven, tech, AI,
Speaker 6: you name it.
Speaker 3: Thirty seconds left. Earnings, what's your feeling earnings? Can we
Speaker 3: depend upon earnings to drive this market?
Speaker 6: No? No, So earnings will be there, but at a
Speaker 6: decreasing rate. Okay, So we've had a Gangbuster three years
Speaker 6: right in, you know, two and a half years, so
Speaker 6: earnings will be coming down on a you're over your basis.
Speaker 6: We can't continue to produce just Gangbuster. You're over your
Speaker 6: earnings and so yeah, you know, you know, maybe the
Speaker 6: stock market eeks out five eight percent this year, but
Speaker 6: above and beyond that, seeing the twenty plus percent that
Speaker 6: we saw the last few years, that's not gonna happen.
Speaker 3: Right, That's kind of kind of what we've been hearing
Speaker 3: from a lot of folks looking at an earnings growth
Speaker 3: rate or stock market return rate, if you know, kind
Speaker 3: of mid to high single digits, as opposed to the
Speaker 3: twenty twenty five percent we've seen over the last couple
Speaker 3: of years. Skylar Wine, and thank you so much for
Speaker 3: joining us.
Speaker 2: Skylar Wine.
Speaker 3: And he's the cio Reagan Capital Management. They're based down
Speaker 3: there in the Big d Dallas, Texas, but he's joining
Speaker 3: us here live in our Bloomberg Interactive Broker Studio.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 3: Joy Yang, head of index product manager at market Vector Indexes.
Speaker 2: Joins us here in our Bloomberg Interactive Broker studio.
Speaker 3: Joey, are you surprised we haven't seen we're not seeing
Speaker 3: a higher level of the VIX given some of the
Speaker 3: uncertainty that I think a lot of investors feel so
Speaker 3: far this year.
Speaker 8: Yeah, thanks for having me so. Yes, I think it's undeniable.
Speaker 8: We're in a period of heightened uncertainty. But uncertainty is
Speaker 8: actually quite hard to measure, and as you mentioned, when
Speaker 8: you look at the VIX, it's unusually low for what
Speaker 8: we should expect in a fear oriented market. But if
Speaker 8: you look at the Economic Policy Uncertainty Index, that's shooting
Speaker 8: straight up and it's a it's second time high, and
Speaker 8: I think this is reflecting two kind of very rational
Speaker 8: strategies that we're seeing in the market. One is this
Speaker 8: kind of weight and see because people just don't know
Speaker 8: what's going to happen next, and they've been burnt previously,
Speaker 8: so I think they're going to park their assets in
Speaker 8: something liquid and be ready to pivot very quickly. So
Speaker 8: that's gold and we're seeing this all time high and gold.
Speaker 3: I keep for pointing out this US Economic Policy Uncertainty Index.
Speaker 3: I wasn't that familiar with it, but you're right, it
Speaker 3: is now screaming higher. Baker, Bloom and Davis are the
Speaker 3: source there. So if you're in front of a terminal,
Speaker 3: just type in you know, US economic uncertainly and you
Speaker 3: see this indexing, you can graph it and says, oh, yeah,
Speaker 3: that's that's the thing.
Speaker 5: And to your point, Paul, because you were talking about
Speaker 5: the VICS. When I was talking to a lot of treaders,
Speaker 5: especially once it got close to thirty inch a day
Speaker 5: earlier this month, a lot of them didn't want to
Speaker 5: pay for puts above that because it just would have
Speaker 5: been too expensive. So I was curious joy your thoughts
Speaker 5: on the dynamic there and what that tells us because
Speaker 5: we still see realized wall picking up.
Speaker 8: Yeah, so I think, you know, this is just kind
Speaker 8: of the lull before we get clarity, and I think
Speaker 8: we're getting clarity in April second. Maybe possibly right, but
Speaker 8: people want to stay invested. You know, you really don't
Speaker 8: want to be holding cash, So staying invested means buying
Speaker 8: something that's liquid, but we'll still will offer you either
Speaker 8: hedge or some growth opportunity, and that's gold. Right now,
Speaker 8: it's at all time high and we're seeing a lot
Speaker 8: of flows into gold and gold dtfs and.
Speaker 3: Gold up another six dollars here today, three thy sixty one.
Speaker 3: I go back to the Goldman Sax call maybe a
Speaker 3: month ago, five weeks ago, Yeah, thirty one hundred on
Speaker 3: gold when it was a twenty eight hundred. Great call
Speaker 3: there by your buddies at Goldman Sax. A lot of
Speaker 3: money is going to international stocks, including Asia, not just
Speaker 3: Europe but Asia as well.
Speaker 2: Is that a trend or is that a trade? Do
Speaker 2: you think?
Speaker 8: Well, if you go back and you see this other
Speaker 8: kind of strategy people are playing, is you know, we
Speaker 8: don't know what's going on, but we do know that,
Speaker 8: you know, US markets have been up unusually high, So
Speaker 8: I think that's really kind of the unusual period, not
Speaker 8: this correction that we're seeing, but up twenty percent over
Speaker 8: two years. So let's go back to maybe focusing things
Speaker 8: that we do know, which is, you know, markets are volatile,
Speaker 8: but let's look at fundamentals. So when you look get
Speaker 8: fundamentals and you think that corrections are a good time
Speaker 8: to buy, well, Europe, Asia they've had bigger corrections than
Speaker 8: what we've seen in the US. And if you look
Speaker 8: at fundamentals, you know the companies that are trading in
Speaker 8: these markets, whether it's Ali Baba Bid, they're trading at
Speaker 8: you know, half the pe of their American counterparts, so
Speaker 8: that's a great buying opportunity. And the same with European
Speaker 8: you know, whether it's European defense stocks, European other you know,
Speaker 8: any other industry.
Speaker 5: You're like, yeah, those European defense stocks really taking off,
Speaker 5: and a lot of them when you're looking at those
Speaker 5: PEU ratios being a lot cheaper than some of their
Speaker 5: peers more internationally, how long do you think that can continue?
Speaker 5: Is this something more shorter term? Just given their underperformance
Speaker 5: in recent years relative to the US and the first
Speaker 5: two year a full run fueled by AI.
Speaker 8: Well, this is definitely a structural shift because you know,
Speaker 8: the US message was very clear, you know, whether intended
Speaker 8: or unintended, as we saw in text messages this week,
Speaker 8: that we're not going to go out there and support
Speaker 8: the rest of the world. Right, So you know, the
Speaker 8: Europeans are looking at this and they're reinvesting back to
Speaker 8: their own military autonomy. And we know that government defense
Speaker 8: spending is physical stimulus, right, but it's it's big and
Speaker 8: it's long. So these are big, structural you know, dynamics.
Speaker 8: And we think that European defense stocks, which have already
Speaker 8: been up double digits here today will continue because there's
Speaker 8: going to be more to come. But I would also
Speaker 8: say don't discount US defense stocks, you know, because I
Speaker 8: think the rest of the world still needs some of
Speaker 8: the technology. And I think, you know, warfare has moved
Speaker 8: from ground to air to cyber security. So companies like Talenteer,
Speaker 8: which are AI intelligence, are still going to be quite
Speaker 8: important in this space.
Speaker 3: I look at Ali Baba for variety reasons, one of
Speaker 3: which is my good buddies the co founder there. But
Speaker 3: it is a for me at least, a proxy on
Speaker 3: how investors view the Chinese stock market. They like it,
Speaker 3: olibab is going to move higher. If they don't like
Speaker 3: it's been for the last several years, it's going to
Speaker 3: move lower. Stock's up fifty six percent year to date.
Speaker 3: Do you feel comfortable in the Chinese stock market?
Speaker 2: There's you know these well if you.
Speaker 8: Look at you know, stocks like whether it's in Video
Speaker 8: or Amazon, they're up double ditches, you know if you
Speaker 8: look back twelve, you know, or two years. And I
Speaker 8: think this is part of you know, what we tend
Speaker 8: to forget when we focus so much on one country,
Speaker 8: one stock, is that necessity is the mother in invention,
Speaker 8: and you know, innovation will happen anywhere. Competition will shift
Speaker 8: innovation to where you know it's going to you know
Speaker 8: it's going to surface. And I think Chinese stocks are
Speaker 8: you know, they've been kind of quiet.
Speaker 2: In the background.
Speaker 8: We've forgotten to look at them, and now they're visible
Speaker 8: and we've just noticed, well, they've been like doing things also,
Speaker 8: you know within you know, their own area.
Speaker 3: Yeah, so again Olibab, but fifty six percent year to
Speaker 3: day of eighty five percent over the trunk twelve months,
Speaker 3: so people spaying paying some more attention to the Chinese
Speaker 3: equity markets.
Speaker 2: Joey Yang, thank you.
Speaker 3: So much for joining us, Head of Index Product Management
Speaker 3: and Market Vector Indexes.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: What I've noticed is institutional buying and.
Speaker 3: Institutional embrace of crypto seems to be pretty interesting to me.
Speaker 3: Aisha kan Kiani joint just she's the COO of.
Speaker 2: M and C Group.
Speaker 3: She joins us, Here in our studio, I'm looking in
Speaker 3: fidelity Is. You know Rais it has assets on our
Speaker 3: management group by over forty percent eight billion dollars.
Speaker 2: Blackrock is into the crypto space.
Speaker 3: What are some of the latest trends in crypto that
Speaker 3: you're following now that we presumably have a pro crypto
Speaker 3: presidency and administration.
Speaker 9: So it all started a couple of years ago, but
Speaker 9: now given the administration change, right, we have a bit
Speaker 9: more acceptance to it, and given the regulatory change around
Speaker 9: it too, or at least on you know, the commissioner levels,
Speaker 9: we have started seeing a lot more institutional entering. So
Speaker 9: we have started seeing more stable coin buying right and
Speaker 9: basically trying to have a bit more stable coin exposure.
Speaker 9: The other thing is, obviously we're seeing large fortune five
Speaker 9: hundred companies buying BTC or stable coins you know, on
Speaker 9: their balance sheet. We see almost everyone saying that they're
Speaker 9: either looking to you know, build a blockchain or working
Speaker 9: on a private blockchain solution for their company on how
Speaker 9: to decentralize their data.
Speaker 7: So, yes, we have Fidelity, we have Blackrock.
Speaker 9: We have seen a lot of conversations around tokenizing assets.
Speaker 9: Blackrock is obviously spirit heeading that effort. But yes, we
Speaker 9: are seeing a bit more acceptance that we've seen in
Speaker 9: the past.
Speaker 5: Walk us through some of the regulational changes, because that
Speaker 5: has been a big criticism in recent years about the
Speaker 5: lack of regulation. So have things changed.
Speaker 9: So over the years, right, we heard we heard large
Speaker 9: banks saying that, look, we cannot trade this asset because
Speaker 9: even though it's for us, it's just a ticket.
Speaker 8: Right.
Speaker 9: We don't know how SEC or CFTC were treated as Right.
Speaker 7: What has happened in the past month or.
Speaker 9: So is that SEC has literally, you know, let go
Speaker 9: most of the enforcement hasks that were going after crypto companies.
Speaker 9: One all of the SEC charges have been dropped against
Speaker 9: Coinbase and Beautible, Moon Pay.
Speaker 7: All of the companies that were open. So that has
Speaker 7: changed this shift. Same thing with CFTC.
Speaker 9: They've tried to set up you know, coworking groups just
Speaker 9: to focusing.
Speaker 7: On digital assets.
Speaker 9: So even if crypto or blockchain or bitcoin as a
Speaker 9: whole doesn't get a special category under the asset, probably
Speaker 9: we just treated like another ascid under SEC, you know,
Speaker 9: just the same investor protection.
Speaker 7: Just one of the stocks that you could trade on
Speaker 7: the market.
Speaker 3: Is that is that where you think we're going to go,
Speaker 3: because I would think that's where the industry.
Speaker 7: Would like to be, right, that's where the industry would
Speaker 7: like to be.
Speaker 9: Absolutely, but we would see that's where it is headed.
Speaker 2: Okay, so that's good news, right, Yeah.
Speaker 3: So I mean, is this administration perceived still as pro
Speaker 3: crypto or maybe maybe they just don't care?
Speaker 2: And that's okay too.
Speaker 9: No, no, no, a very pro crypto, okay, very extremely
Speaker 9: You know, we had an industry conference here in New
Speaker 9: York last week and not as big as Consensus or
Speaker 9: you know, a couple of others, and President Trump had
Speaker 9: a message, yes, had a recorded Yeah, so we carry
Speaker 9: exactly so and then you know World liber Financial of
Speaker 9: the organization under him, they they're buying tokens consistently.
Speaker 2: Yeah, okay.
Speaker 5: You know it's interesting too because if you're just looking
Speaker 5: at its performance here to date, still lower here cools
Speaker 5: to about six percent. So I mean, what's the deal?
Speaker 7: It's dead?
Speaker 9: I mean, honestly, speak as hyped. I'd be very honest
Speaker 9: about this as hyped. You know, we have you know,
Speaker 9: as hyped. We have basically done with the industry in
Speaker 9: the past three to four months. Right ever since the
Speaker 9: administration change, we haven't seen new volumes come in, and
Speaker 9: we haven't seen new liquidity come in.
Speaker 7: We haven't seen a lot more large.
Speaker 9: Institutional just plug in and say here's the capital, just
Speaker 9: go trade.
Speaker 5: Why do you think that is?
Speaker 9: Because I think at the end of the day, in
Speaker 9: months or so, everyone rather manage their own book than
Speaker 9: handing to like Cryptonata funds or plugging into all.
Speaker 2: Right, I don't know anything about this, and I take
Speaker 2: great pride not knowing anything about this.
Speaker 3: I come from the day of creating blocks of stocks.
Speaker 3: Has the story kind of faded here?
Speaker 2: For crypto?
Speaker 3: It feels like the momentum is maybe out of the story.
Speaker 3: We don't talk about it as much as.
Speaker 2: We used to.
Speaker 3: I quote it, but when I quote it, we like
Speaker 3: I'm quoting stocks, bonds.
Speaker 2: I feel like, should I even be quoting bitcoin?
Speaker 7: I think we're not as special as we used to?
Speaker 9: Okay, that's that's that you're you're right there, but we're
Speaker 9: not as special as we used to.
Speaker 7: We were a hedge against inflation.
Speaker 9: We were you know one of that did Alas said
Speaker 9: that you could buy so your grand you know your
Speaker 9: grand kids could be proud of.
Speaker 5: But like for the criticism agids that being a hedge
Speaker 5: against inflation, I mean that clearly didn't work in various
Speaker 5: instances over the last three years during the Fed's hiking
Speaker 5: cycle to try to tame inflation.
Speaker 9: It worked in twenty twenty, and it worked in early
Speaker 9: twenty twenty one.
Speaker 7: Right now, it's just following the macro and which it.
Speaker 9: Shouldn't have if it had followed it's an initial narrative
Speaker 9: it was. You know, we're an asset class off its own.
Speaker 9: Right now, we're just treated like another tex style.
Speaker 2: So what's the next big issue or big mile post
Speaker 2: for the cryptos spaces.
Speaker 3: There's something piece of news out there that we're waiting for,
Speaker 3: whether it's a piece of legislation, whether it's a new
Speaker 3: product offering, or what's the next new thing.
Speaker 9: I think we are getting everything that we've ever wanted,
Speaker 9: right We are getting you know, a bit more understanding
Speaker 9: from regulators. We'll probably even have stable coin legislations come in.
Speaker 9: I heard that a lot at like Milk and Symposium
Speaker 9: a couple of weeks ago. We're going to see you know,
Speaker 9: stable coins begin integrated just like you know dollar into
Speaker 9: like large banks or large banks issuing their own stable coins.
Speaker 9: I think we're slowly, slowly progressing there. My internal skepticism
Speaker 9: as always is the tech ready.
Speaker 7: But I could go on on that for days.
Speaker 9: But I think from the regulatory perspective, from the market's perspective,
Speaker 9: we have accomplished.
Speaker 3: You know, But are the kids at NYU that you
Speaker 3: talked to every are they still cryptos crypto that cryptos
Speaker 3: that I want to go into crypto. I don't want
Speaker 3: to go to Morgan Stanley and be an investment banker
Speaker 3: or trader.
Speaker 2: I want to get into crypto. Are they still saying that.
Speaker 9: Fifty percent split because the other fifty percent have moved
Speaker 9: on to AI.
Speaker 10: Yeah.
Speaker 9: So my course is still very popular. I still have
Speaker 9: the wait list everything. I still have kids building under me,
Speaker 9: writing under me. But now it's like, hey, professor, this
Speaker 9: is cool, but let's talk about AI.
Speaker 5: Also, so you had mentioned we only have about thirty
Speaker 5: seconds left. But what was the issue with the tech
Speaker 5: that you were maybe skeptical about.
Speaker 9: I think that if you really really break it down
Speaker 9: with ethereum or Salona or like you know, if you
Speaker 9: come on chain levels, can we handle that kind of volume, right,
Speaker 9: like if as I remember on my first show with Tom,
Speaker 9: he said, I mean, none of this makes sense. So
Speaker 9: but I don't know why this trade acid is trading
Speaker 9: at seventy thousand, so please, you know, clarify.
Speaker 2: Yeah, and then it went up to five hundred exactly.
Speaker 9: And Paul kicked in and Paul said, you know, why
Speaker 9: don't you teach us so like why so that's the thing,
Speaker 9: like beautiful in order to be at one hundred and ten?
Speaker 2: Again?
Speaker 7: Is the tech enough?
Speaker 2: Okay? A Keani, COO of m n n C A group.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 3: Let's get a look at those newspapers with Lisa Matata, Lisha,
Speaker 3: what are you looking at all?
Speaker 5: Right?
Speaker 11: So remember when Elon must put out the request of
Speaker 11: federal workers to submit those five bullet points detailing their weeks,
Speaker 11: when we have a challenge doing that, Well, a lot
Speaker 11: of workers have been doing it, but now they're running
Speaker 11: into an issue, and the issue is apparently the inbox
Speaker 11: is full. Oh so their emails are getting bounced back.
Speaker 11: So now they're putting in the effort, but it's not
Speaker 11: going through. So what the workers are being told. So,
Speaker 11: for example, you have the Department of Health and Human Services,
Speaker 11: they're telling employees that, okay, we know.
Speaker 2: What's going on.
Speaker 11: So they're directing them to send their weekly five things
Speaker 11: emails to a different o PM email address. Even NASA
Speaker 11: unveiled this app so that workers could send their reports
Speaker 11: there too. So they're doing all these different things because
Speaker 11: remember he had said that workers would be fired if
Speaker 11: they didn't reply. I mean, the White House kind of,
Speaker 11: you know, pulled back and said, you know what, let's
Speaker 11: let's explain. You know, we'll leave it up to the
Speaker 11: leadership of each agency to determine, you know.
Speaker 3: That we know who's presumably reviewing these emails to say,
Speaker 3: are these five things you're doing?
Speaker 2: Are they good? Or evaluating what you're doing?
Speaker 10: Is there anybody know who's reading these questioner, Now they're
Speaker 10: getting bounced back, But it's a good question, all right, Okay,
Speaker 10: so we have we talked about the housing crisis right
Speaker 10: sparking it's what it's doing now, is that it's sparking
Speaker 10: new alternatives to building homes.
Speaker 11: So we're talking about builders using everything from three D printing,
Speaker 11: assembling homes inside a factory, and then using hemp, yes,
Speaker 11: hemp to make building blocks for walls. So this is
Speaker 11: from the Associated Press. They visited this factory where they're
Speaker 11: pumping out five hundred homes in just over three years
Speaker 11: of operation. Each takes about five to seven days to build. Okay,
Speaker 11: So they're inside this factory.
Speaker 2: They get everything the walls.
Speaker 11: The wiring, the plumbing, the countertops, and then they're shrink
Speaker 11: wrapped and shipped out. So this is like how they're
Speaker 11: pumping it out there. Then, as far as the three
Speaker 11: D printing, they make like these curved walls that are
Speaker 11: unlike concrete block. But the only drawback is that it's pricy. Right,
Speaker 11: three D printers are expensive, the engineers to work them
Speaker 11: are expensive, other skilled employees are expensive. And then this
Speaker 11: hemp and line mixture. I did not know that it's
Speaker 11: called hemp crete, and it's this natural insulation. It's mold
Speaker 11: fire resistant. Acts as this outer wall of insulation. You
Speaker 11: still need kind of like the woods and the frames
Speaker 11: you know, to build the walls. But it basically cuts
Speaker 11: down because it replaces three wall building components with just one.
Speaker 3: Actually, all right, I don't understand how we got into
Speaker 3: this where we don't have enough housing.
Speaker 2: We aren't having children anymore. I mean, the birth rate
Speaker 2: is way down.
Speaker 3: Are we knocking down homes such that we don't? All
Speaker 3: I see when I drive around is these multi family
Speaker 3: housing units being built everywhere.
Speaker 5: You didn't use three D printing for the compound.
Speaker 3: I just don't understand that the fundamental concept why we
Speaker 3: have a housing I guess.
Speaker 11: People just don't want to give it up because you have.
Speaker 7: Tell those boomers.
Speaker 2: Building over the place.
Speaker 3: They walk into Middle America, They're building these multi family
Speaker 3: units all over the place. I don't understand. So that's
Speaker 3: my I'm not buying this. There's not enough homes out there,
Speaker 3: that's my things. I'm not buying the whole concept.
Speaker 11: Last one Megan Markle's new Netflix cooking show. Not sure
Speaker 11: if either of you have seen it, but apparently it's gotten.
Speaker 11: You know, critics are bashing it and saying, you know,
Speaker 11: what does she know? But what they love is her fashion.
Speaker 11: It's called with Love Megan. So apparently she has this
Speaker 11: fashion selling power that everything she wears like dresses, shirts, vests,
Speaker 11: Kashmir cardigans. They all go viral and really buy them
Speaker 11: and the stores are getting sold out. Wow, weightless, So you.
Speaker 2: Guys are not the demo for this, I guess.
Speaker 5: I actually haven't seen the show yet, but I saw
Speaker 5: a promo on Netflix.
Speaker 11: It looks beautiful. It does, and I do like what
Speaker 11: she wears. I don't know if I would buy it
Speaker 11: or be able to afford it for that factor, but
Speaker 11: I mean, she's also starting like this shop my page
Speaker 11: where she can actually make affiliate revenue from these things,
Speaker 11: so she's kind.
Speaker 5: Of turning her So this is a cooking show, right.
Speaker 11: It's a cooking slash like she gardens, she entertains, it's
Speaker 11: a lifestyle okay, okay, lifestyle And apparently it got renewed
Speaker 11: for a second season, So.
Speaker 3: I'm not down on Megan Mark for everybody else's I
Speaker 3: have no opinion one way or the other, but we'll
Speaker 3: have to see, all right, lish Mateo Newspapers, thank you
Speaker 3: so much. We appreciate that.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify
Speaker 1: and anywhere else you get your podcasts. Listen live each
Speaker 1: weekday seven to ten am Eastern on Bloomberg dot com,
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app.
Speaker 1: You can also watch us live every weekday on YouTube
Speaker 1: and always on the Bloomberg terminal