WEBVTT - It's A Borrower's Bond Market, As Amazon Scores Record Low Rates. 0:00:02.640 --> 0:00:05.360 Welcome to the Bloomberg Penl Podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.760 Along with my co host Lisa Brahmas. Each day we 0:00:07.880 --> 0:00:10.440 bring you the most noteworthy and useful interviews for you 0:00:10.560 --> 0:00:12.640 and your money. Whether at the grocery store or the 0:00:12.680 --> 0:00:16.000 trading floor. Find a Bloomberg Penl podcast on Apple podcast 0:00:16.160 --> 0:00:18.080 or wherever you listen to podcasts, as well as at 0:00:18.079 --> 0:00:22.360 Bloomberg dot Com. We talked about the lack of coherence 0:00:22.520 --> 0:00:24.799 in markets. We're seeing that across the board at a 0:00:24.880 --> 0:00:29.440 time when America's cities are dealing with the unrest, the 0:00:29.480 --> 0:00:31.160 likes of which we have not seen since the late 0:00:31.240 --> 0:00:35.519 nineties sixties. We also see split fates among corporate America, 0:00:35.600 --> 0:00:38.640 with the haves and the have nots, the haves being 0:00:38.680 --> 0:00:42.040 able to borrow virtually for free, and the have nots 0:00:42.159 --> 0:00:44.960 going bankrupt. Joining us right now is Molly Smith, the 0:00:45.000 --> 0:00:48.680 corporate finance reporter for Bloomberg News, the latest Amazon dot 0:00:48.760 --> 0:00:52.760 Com borrowing money basically for free for three years. I 0:00:52.800 --> 0:00:57.080 mean really, I'm paying what twenty basis points above treasuries 0:00:57.240 --> 0:01:00.440 to borrow this amount of money? Molly, what do we 0:01:00.480 --> 0:01:04.680 know so far about this amount? So this is Amazon 0:01:04.720 --> 0:01:07.360 actually set a few records yesterday, not just on the 0:01:07.440 --> 0:01:10.280 three year, also for seven, ten, and forty year debt 0:01:10.880 --> 0:01:14.400 that these premiums are just mean, I feel weird calling 0:01:14.400 --> 0:01:16.840 it a premium. There's hardly one of any there. This 0:01:16.920 --> 0:01:20.040 is more or less a treasury bond, or perhaps even 0:01:20.160 --> 0:01:24.240 less in some cases. So it's uh, it's pretty impressive 0:01:24.280 --> 0:01:27.240 to see how Amazon was able to do this yesterday. 0:01:27.240 --> 0:01:29.520 But again, like you said, so just really speak to 0:01:29.560 --> 0:01:33.280 the divide in the market right now that Amazon Convertual 0:01:33.520 --> 0:01:36.560 can borrow for basically nothing, while you know, there are 0:01:36.560 --> 0:01:38.919 so many companies that don't have any bond market access 0:01:38.959 --> 0:01:41.840 at all right now. So Molly, you have a great 0:01:41.920 --> 0:01:44.759 chart in your article kind of looking at the high 0:01:44.840 --> 0:01:47.680 grade barring costs, and it's almost back to where it 0:01:47.800 --> 0:01:51.720 was pre pandemic. Is this just simply the market saying, 0:01:52.520 --> 0:01:56.200 you know, the Federal Reserve has our back here very much. 0:01:56.240 --> 0:01:58.640 So yes, so we can think that said for not 0:01:58.760 --> 0:02:01.760 only the rally here in spreads, which is the reflection 0:02:01.800 --> 0:02:04.480 of the demand and the secondary market, but also for 0:02:04.520 --> 0:02:06.960 all the issuance we've seen in the primary market that 0:02:07.400 --> 0:02:11.040 last week we hit the one trillion dollar annual issue, 0:02:11.080 --> 0:02:14.040 and for the fastest rate ever last year. We didn't 0:02:14.040 --> 0:02:17.240 get through that until November. So, uh, the said has 0:02:17.240 --> 0:02:20.160 been there for both supply and demand, and it's really 0:02:20.200 --> 0:02:23.639 just opened up a ton of issuance on this Matthew rally. 0:02:23.800 --> 0:02:28.680 So the trillion dollars that investment grade corporate corporations have 0:02:28.800 --> 0:02:31.680 borrowed in the first couple of months of the year, 0:02:32.000 --> 0:02:34.720 I'm wondering what people think. Is this to continue or 0:02:34.840 --> 0:02:39.440 is this just basically the largest best capitalized companies creating 0:02:39.520 --> 0:02:43.720 war stashes of cash just in case things deteriorate. So 0:02:43.760 --> 0:02:45.920 it's a lot of that, a lot of companies, like 0:02:46.000 --> 0:02:49.000 you said, capitalizing on these low interest rates. It's also 0:02:49.040 --> 0:02:51.799 been a lot of companies that genuinely do need the 0:02:51.880 --> 0:02:55.640 money and are still investment grade rated, like Carnival and 0:02:55.720 --> 0:03:00.000 Marriott UM hardly a borrower of an Amazon kind of status, 0:03:00.040 --> 0:03:03.160 but nonetheless are still rated investment grade and that they've 0:03:03.200 --> 0:03:06.120 come to the market as well. But uh, most strategies 0:03:06.200 --> 0:03:08.680 are seeing that this is going to slow down a 0:03:08.680 --> 0:03:10.800 lot in the second half of the year. That so 0:03:10.919 --> 0:03:14.359 much of what we've seen largely been pulled forward from 0:03:14.360 --> 0:03:16.560 what would have been uh in the second half of 0:03:16.560 --> 0:03:19.480 the year. So we're probably going to see issuance slow 0:03:19.520 --> 0:03:22.360 down some say, I think of America maybe even just 0:03:22.400 --> 0:03:25.000 two hundred billion dollars of issuance in the last six 0:03:25.040 --> 0:03:28.639 months smally in terms of use of proceeds, are most 0:03:28.639 --> 0:03:32.640 companies here refinancing existing debt or are they just as 0:03:32.639 --> 0:03:35.960 at least with steching, you know, taking down debt bolstering 0:03:36.000 --> 0:03:38.840 up putting cash on their balance sheet. Here, it's a 0:03:38.840 --> 0:03:41.280 little bit of both. So we've seen a ton of 0:03:41.320 --> 0:03:47.240 companies to liability management exercises in UH in tandem with 0:03:47.320 --> 0:03:51.280 these bond offerings, so they'll issue new debts hopefully and 0:03:51.440 --> 0:03:55.360 use those proceeds to take out debt that's coming up 0:03:55.640 --> 0:03:58.800 in UH in new in upcoming years. So we've seen 0:03:58.840 --> 0:04:02.760 a lot of those concurrent bond offerings and tender offers together. 0:04:03.080 --> 0:04:04.960 But then there are a lot of companies, like you said, 0:04:04.960 --> 0:04:07.480 all that are just they need the money and they're 0:04:07.520 --> 0:04:09.839 just trying to have the war chest now and who 0:04:09.880 --> 0:04:12.400 knows what's in front of us, So it's a combination 0:04:12.440 --> 0:04:15.960 of both. Molly, the last time Amazon dot Com borrowed 0:04:16.000 --> 0:04:18.920 money was ahead of their acquisition of Whole Foods. Now 0:04:19.000 --> 0:04:21.480 they're raising ten billion dollars at a time when they 0:04:21.480 --> 0:04:24.000 don't exactly need a ton of cash. It's not as 0:04:24.040 --> 0:04:27.039 if their business model is struggling right now. Do we 0:04:27.120 --> 0:04:31.640 have any idea of whether they're planning another acquisition? Uh, 0:04:31.880 --> 0:04:34.680 they could be, and I believe that's what our analysts 0:04:34.680 --> 0:04:38.479 at Bloomberg Intelligence uh speculate could be something that they're 0:04:38.520 --> 0:04:43.400 thinking about. Amazon also did borrow in in um, a 0:04:44.080 --> 0:04:47.000 smaller offering than this one, but like you said, yes, 0:04:47.040 --> 0:04:50.479 they've been a pretty infrequent borrower and the one that's 0:04:50.480 --> 0:04:52.919 really of note was for the Whole Foods acquisition. So 0:04:53.480 --> 0:04:55.960 it's hard to tell beyond what they said is just 0:04:56.040 --> 0:04:59.240 general corporate purposes as far as what this ten billion 0:04:59.279 --> 0:05:03.560 dollars maybe used for. Smally, how far how broad is this? 0:05:03.720 --> 0:05:06.559 Uh you know kind of uh rallying the bond market, 0:05:06.920 --> 0:05:09.560 new insurance market going down in terms of credit quality, 0:05:09.560 --> 0:05:12.000 we're seeing a lot of investment grade issues issuance where 0:05:12.000 --> 0:05:14.720 does it kind of get dicey here for an issuer? 0:05:16.160 --> 0:05:18.960 So the high old market has definitely been open to 0:05:19.440 --> 0:05:22.120 some of those custody or borrowers, like you said, even 0:05:22.200 --> 0:05:26.960 just today we're seeing some the like MGM uh, which 0:05:27.000 --> 0:05:30.159 is actually just the reek connected to the casinos is 0:05:30.160 --> 0:05:33.200 borrowing in the high old market. We also have Sick Goes, 0:05:33.240 --> 0:05:37.000 the US refinery unit of Pita Vesa so and outside 0:05:37.000 --> 0:05:38.840 of that, just more largely, we've seen a lot of 0:05:38.839 --> 0:05:42.640 issuance from hotels, casinos, a lot in the travel leisure 0:05:42.680 --> 0:05:47.359 sector more broadly. That really speaks to those sectors that, um, 0:05:47.400 --> 0:05:49.919 that need the cash right now. They're not looking to 0:05:50.000 --> 0:05:52.440 refinance that, they just need the money wherever they can 0:05:52.480 --> 0:05:54.520 get it from. Although let's be clear, some of the 0:05:54.520 --> 0:05:57.800 lower rated borrowers aren't exactly getting the best deals in 0:05:57.839 --> 0:05:59.760 the world. It's not like they're borrowing for free, right. 0:05:59.760 --> 0:06:01.840 I mean, we've seen them pledge islands. We've seen them, 0:06:02.279 --> 0:06:05.760 you know, pledge cruise ships. We've seen them pledge you know, 0:06:05.960 --> 0:06:08.479 the clothes in their closet. I mean, at a certain point, 0:06:09.160 --> 0:06:13.159 their ability to borrow isn't necessarily testament to a great 0:06:13.200 --> 0:06:16.719 desire for their debt correct, correct, you know. And that's 0:06:16.720 --> 0:06:18.640 a great point at Lisa, And yeah, and that's even 0:06:18.720 --> 0:06:20.800 and that's what's more remarkable, like you said, is that 0:06:20.839 --> 0:06:26.960 these are secured offerings, so there is some physical collateral protection, um, 0:06:27.000 --> 0:06:29.360 you know, like an island in the case of Norwegian. Uh. 0:06:29.800 --> 0:06:32.360 But it's like you said, most of these deals, they're 0:06:32.360 --> 0:06:35.440 coming at double digit interest rates. We've seen some think, 0:06:35.640 --> 0:06:37.760 off the top of my head, up to fourteen percent 0:06:38.200 --> 0:06:41.120 yields on some of these, which was I believe that 0:06:41.200 --> 0:06:44.280 was Landry's, which is the operator of a casino and 0:06:44.520 --> 0:06:48.400 restaurant empire. So we've seen well into the double digit 0:06:48.480 --> 0:06:50.880 interest rates, and like you said, these are hardly coming 0:06:50.920 --> 0:06:54.400 for free for some of the more challenge companies. Molly Smith, 0:06:54.400 --> 0:06:56.440 thanks much for joining us. Molly Smith is a corporate 0:06:56.440 --> 0:06:59.080 finance reporter for Bloomberg News. Brings us up to day 0:06:59.160 --> 0:07:00.720 on what has just been in a short and your 0:07:00.880 --> 0:07:03.840 new issue market, particularly in the investment grade market. Lisa 0:07:03.839 --> 0:07:06.719 a year today hitting that trillion dollar mark, uh, the 0:07:06.760 --> 0:07:10.560 earliest on record just recently. So again, if you need 0:07:10.680 --> 0:07:13.960 cash in your investment grade rated uh, boy, now is 0:07:14.000 --> 0:07:16.800 the time. Yeah. I can just already hear people saying 0:07:16.920 --> 0:07:20.360 bur like the cash printing machine that the Federal Reserve 0:07:20.600 --> 0:07:23.160 is making. I mean, that's essentially what a lot of 0:07:23.160 --> 0:07:26.040 people are attributing this to. Given how much the Feds 0:07:26.080 --> 0:07:29.040 actions stepping in saying that they're going to buy corporate 0:07:29.080 --> 0:07:33.000 debt for the first time in its history, pushing down 0:07:33.280 --> 0:07:36.560 yields considerably near their all time lows now for investment 0:07:36.600 --> 0:07:39.680 grade companies. Still, however, the question in my mind is 0:07:40.120 --> 0:07:43.920 at what point do investors start to price in the 0:07:43.960 --> 0:07:46.560 fact that the FEDS actions will not prevent certain companies 0:07:46.560 --> 0:07:49.560 from going bankrupt? Yeah? Absolutely, Looking at just the ten 0:07:49.640 --> 0:07:51.800 year yield on the treasures right now, the it's down 0:07:51.800 --> 0:07:54.080 three thirty seconds, pushing to yield up just slightly to 0:07:54.640 --> 0:07:58.120 uh point six. Let's call it point six on the 0:07:58.160 --> 0:08:05.400 tenure treasure just extraordin. We have been wondering about the 0:08:05.520 --> 0:08:08.040 disparities that we have been seeing in the job market, 0:08:08.200 --> 0:08:10.120 with some of the job losses in the wake of 0:08:10.120 --> 0:08:15.600 the coronavirus hammering the Black and Latino communities disproportionately. This 0:08:15.800 --> 0:08:18.560 just has come to the fore as the unrest in 0:08:18.600 --> 0:08:22.000 America cities gets harder and harder to combat. Joining us 0:08:22.080 --> 0:08:25.120 right now is John Stroyer, chief executive officer of Calvert 0:08:25.200 --> 0:08:28.840 Research and Management. I want to know from your perspective, 0:08:28.880 --> 0:08:33.120 you say that ending racism is the responsibility of corporations. 0:08:33.240 --> 0:08:36.079 Why do you say that? Thanks for having me on 0:08:36.320 --> 0:08:40.880 and and certainly we've given corporations a significant amount of 0:08:40.960 --> 0:08:45.800 power in the United States. They inform innumerable social and 0:08:46.040 --> 0:08:50.320 environmental outcomes. So as a result of having that power, 0:08:50.640 --> 0:08:54.040 which has been something they've acquired over time, they have 0:08:54.120 --> 0:08:59.839 a responsibility to help solve these types of issues. Additionally, 0:09:00.440 --> 0:09:04.680 their ability to take action and to drive positive social 0:09:04.800 --> 0:09:09.320 change is a significant driver for their brand value and 0:09:09.360 --> 0:09:13.080 their attractiveness and reputation as a provider of products and 0:09:13.120 --> 0:09:19.760 services as also as an employer. So they have that responsibility, 0:09:19.880 --> 0:09:22.280 they've taken it, and they've got to take action to 0:09:22.360 --> 0:09:25.640 help solve this. John, how about the counter argument that 0:09:25.679 --> 0:09:31.360 the responsibility of a company is to maximize shareholder profits. Well, 0:09:31.400 --> 0:09:33.800 I think there's a tie in here, because you know, 0:09:34.080 --> 0:09:38.160 society that is destabilized as results of civil and rest, 0:09:38.760 --> 0:09:46.040 which is an outcome of excessive inequality GDP, is suboptimal. 0:09:46.480 --> 0:09:50.760 So I do think that companies working to solve this 0:09:50.840 --> 0:09:54.920 problem will be able to see a benefit to long 0:09:55.080 --> 0:09:59.200 term value creation. I don't really think there's a conflict here, 0:09:59.679 --> 0:10:02.160 although markets may disagree, and I'm thinking of Facebook and 0:10:02.200 --> 0:10:05.960 Twitter in particular, and not necessarily on the racism question, 0:10:06.040 --> 0:10:09.400 but certainly on interfering and sort of making a judgment 0:10:09.480 --> 0:10:13.040 call when it comes to how people are using their platforms. 0:10:13.080 --> 0:10:16.480 Facebook aired on the side of not really interfering, and 0:10:16.480 --> 0:10:19.440 Twitter has loved a number of labels with warnings on 0:10:19.480 --> 0:10:23.160 it for a number of different leaders recently including President Trump. 0:10:23.600 --> 0:10:26.959 How can this not necessarily be what we're looking at 0:10:27.080 --> 0:10:30.120 longer term in terms of the benefit and attractions and interfering, 0:10:30.120 --> 0:10:32.320 because right now it seems like Facebook is one and 0:10:32.360 --> 0:10:36.600 Twitter is lost. Well, certainly in the short term, anything 0:10:36.679 --> 0:10:40.280 can happen with with security prices. UM. What we think 0:10:40.320 --> 0:10:43.960 about is long term value creation and what happens over 0:10:44.000 --> 0:10:47.320 a slightly longer time period. And I think it also 0:10:47.360 --> 0:10:51.960 extends well beyond social media. UM. Two companies that are 0:10:52.000 --> 0:10:55.880 doing business in in in every community. And I'm not 0:10:55.920 --> 0:10:58.520 sure that you know Twitter has won or lost or 0:10:58.559 --> 0:11:02.640 Facebook and Water loss. It's way too soon to tell. So, John, 0:11:02.760 --> 0:11:05.840 this discussion, your argument per se, seems to fit into 0:11:05.840 --> 0:11:09.120 the E s G kind of discussion environmental, social and 0:11:09.160 --> 0:11:12.440 governance that a lot more investors are paying attention to 0:11:12.559 --> 0:11:15.720 in their securities analysis. How do you think this fits 0:11:15.720 --> 0:11:19.400 into kind of E s G and overall analysis? Well, 0:11:19.400 --> 0:11:25.480 companies today UM are all striving to prove their capabilities 0:11:25.520 --> 0:11:29.280 on diversity and inclusion, whether that's t E s G 0:11:29.440 --> 0:11:33.360 investors or whether that's to the workplace of today in 0:11:33.400 --> 0:11:36.920 the future. So this is uh. This is a square 0:11:36.960 --> 0:11:41.760 on E s G issue, and investors and asset owners 0:11:42.240 --> 0:11:47.040 really expect companies to provide the necessary information so we 0:11:47.080 --> 0:11:50.040 know how they're really doing. And let me relate this 0:11:50.200 --> 0:11:54.880 to financial returns. Today, the demographics of the country that 0:11:55.080 --> 0:11:59.280 really shifted and changed. We have a much larger Black population, 0:11:59.280 --> 0:12:03.920 of much larger Hispanic population, and educational attainment across the 0:12:03.960 --> 0:12:08.560 board in minority groups is going up. So we want 0:12:08.720 --> 0:12:12.000 companies to be able to draw from a broad labor pool. 0:12:12.160 --> 0:12:15.480 We want companies to be able to achieve the benefits 0:12:15.520 --> 0:12:19.920 of diversity and inclusion. From an E s G investor's perspective, though, 0:12:20.280 --> 0:12:24.240 we need data from companies to really assess how they're 0:12:24.280 --> 0:12:28.080 doing and for companies to be able to be attractive 0:12:28.600 --> 0:12:33.120 workplaces for Blacks, Force band X, for Asians, for all 0:12:33.200 --> 0:12:36.200 people of color, and for everybody. They have to do 0:12:36.360 --> 0:12:40.520 a good job helping to actually use their voice and 0:12:40.640 --> 0:12:44.080 solve these larger social issues. So it's a square on 0:12:44.280 --> 0:12:47.760 E s G issue. By the way, I think the 0:12:47.840 --> 0:12:51.000 E s G investing community needs to do a lot 0:12:51.080 --> 0:12:55.079 more to push companies to help solve these problems and 0:12:55.440 --> 0:12:59.160 provide us the data that we need to know what 0:12:59.280 --> 0:13:04.280 outcomes are really achieving through these diversity and inclusion programs. John, 0:13:04.559 --> 0:13:07.720 your position a top Calvert Research Management which was acquired 0:13:07.720 --> 0:13:10.440 by eat Advance and overseas nearly twenty billion dollars with 0:13:10.480 --> 0:13:13.959 this focus on E s G is admirable, and I 0:13:14.000 --> 0:13:15.760 would love to see some of the things that you're 0:13:15.760 --> 0:13:18.559 talking about come to fruition. What are you looking for 0:13:19.040 --> 0:13:23.800 with respect to corporations steps that are meaningful towards ending racism? 0:13:23.800 --> 0:13:28.240 What can they actually do well? Racism is tied up 0:13:28.280 --> 0:13:33.959 with inequality, and inequality in this country is deeply embedded 0:13:34.200 --> 0:13:38.960 and starts with inequality of opportunity at every level. So 0:13:39.160 --> 0:13:41.920 there are a number of things that companies are responsible 0:13:42.000 --> 0:13:46.839 for doing. And they said a first thing is disclosure, 0:13:46.880 --> 0:13:51.640 providing us the real information about the demographics of their workplace, 0:13:52.000 --> 0:13:55.439 who has what jobs, so that we know how well 0:13:55.520 --> 0:14:00.640 the company is doing there. Next, creating attractive training and 0:14:00.679 --> 0:14:06.200 development programs for people of color and for um people 0:14:06.200 --> 0:14:10.720 who have not had those opportunities in the educational system 0:14:10.920 --> 0:14:14.880 is critical. Being able to develop talent across the board 0:14:15.160 --> 0:14:19.480 is essential UM. I think also working with the educational 0:14:19.520 --> 0:14:23.280 system in the communities where these companies draw from and 0:14:23.360 --> 0:14:28.440 helping to create equal opportunity in the educational system is 0:14:28.480 --> 0:14:31.400 also critical. And if you think about it, companies in 0:14:31.440 --> 0:14:37.720 America need to have a well educated workforce across every demographic. 0:14:38.120 --> 0:14:41.000 So there are a number of things that companies need 0:14:41.120 --> 0:14:45.360 to do in order to secure their place in the 0:14:45.440 --> 0:14:49.480 labor market and to help improve the workforce. So it 0:14:49.520 --> 0:14:51.520 isn't just what they should do, it's what they need 0:14:51.560 --> 0:14:53.920 to do. Hey, John, thanks so much for joining us. 0:14:53.960 --> 0:14:57.840 We appreciate that John Strayer uh CEO of Calvert Research 0:14:57.920 --> 0:15:00.680 and Management with that nineteen billion dollar dollars in assets 0:15:00.720 --> 0:15:03.440 on the management based in Bethesda, talking about racism and 0:15:03.480 --> 0:15:06.280 the role that corporations have Lisa, and it kind of 0:15:06.280 --> 0:15:08.160 goes back to that E s G discussion, is we 0:15:08.200 --> 0:15:11.600 think about UM companies holistically and their impact on their environment. 0:15:11.880 --> 0:15:13.600 It also goes to some of the comments that we've 0:15:13.640 --> 0:15:16.360 heard out of the chief executives from everyone from City 0:15:16.360 --> 0:15:19.640 Group to JP Morgan to black Rock in response to 0:15:19.680 --> 0:15:23.600 the protests really coming out in solidarity with the cause, 0:15:23.760 --> 0:15:30.360 certainly not the violence, but the cause. Then everything that's 0:15:30.360 --> 0:15:33.120 been going on, Paul, we have not discussed one area 0:15:33.160 --> 0:15:35.040 of the market that was super hot a couple of 0:15:35.080 --> 0:15:38.280 years ago, and that is the crypto assets sector, and 0:15:38.360 --> 0:15:41.800 it has actually been on fire, with Bitcoin rallying above 0:15:41.840 --> 0:15:45.840 ten thousand dollars once again and it has gained forty 0:15:46.080 --> 0:15:49.080 percent more than that so far this year. Let's talk 0:15:49.120 --> 0:15:52.520 about digital gold with maltolm Demers, chief strategy officer with 0:15:52.560 --> 0:15:55.200 coin Shares Group, which has about seven fifty million dollars 0:15:55.240 --> 0:15:58.000 in the digital space, joining us from London, Maltham, thank 0:15:58.000 --> 0:15:59.920 you so much for being with us. Can you talk 0:16:00.120 --> 0:16:03.720 about bitcoin and it's use or just a crypto assets 0:16:03.720 --> 0:16:08.520 sector in general. It's use is digital gold right now, absolutely, 0:16:08.560 --> 0:16:11.840 and thanks for having me on. So it's really interesting 0:16:11.880 --> 0:16:14.760 to be living in this time right now. Bitcoin with 0:16:14.880 --> 0:16:18.040 a product of the last financial crisis. As some of 0:16:18.080 --> 0:16:19.760 us who been the been in the space for a 0:16:19.800 --> 0:16:23.760 while they know, the Bitcoin white paper was written in 0:16:23.760 --> 0:16:26.800 two thousand nine and the network launched in two thousand ten. 0:16:27.280 --> 0:16:31.520 We're now eleven years into sort of the Bitcoin story 0:16:32.000 --> 0:16:34.920 and we're seeing bitcoin really come of age. And mature 0:16:35.120 --> 0:16:38.920 in this financial crisis we're going through right now, particularly 0:16:38.920 --> 0:16:41.520 as we've seen over the last three months, a lot 0:16:41.600 --> 0:16:45.000 of risk, a lot of uncertainty, and investors really starting 0:16:45.040 --> 0:16:49.080 to look at the investing landscape and reevaluating how they 0:16:49.080 --> 0:16:53.360 want to be allocated going into the next year and beyond. 0:16:53.840 --> 0:16:57.680 So the investment community obviously still has a lot of 0:16:57.760 --> 0:17:01.400 mixed views on bitcoin. Some and assement firms and investment 0:17:01.440 --> 0:17:04.640 managers have made big strides into the sector and are 0:17:04.680 --> 0:17:08.160 offering products and services to their clients. Where one example, 0:17:08.280 --> 0:17:11.320 we come from the commodity space as a team that 0:17:11.400 --> 0:17:13.639 have been in the digital assets space for the last 0:17:13.680 --> 0:17:18.840 seven years now. Other firms, most notably Goldman's wealth management team, 0:17:18.880 --> 0:17:22.040 have been less than hot on crypto assets. But one 0:17:22.080 --> 0:17:26.479 thing is sure, every investor is talking about bitcoin, getting 0:17:26.480 --> 0:17:29.679 smart on crypto assets and starting to develop a perceptive 0:17:29.760 --> 0:17:33.080 and really trying to figure out where bitcoin might fit 0:17:33.160 --> 0:17:37.159 into their portfolio going forward. So it's an exciting time. 0:17:37.680 --> 0:17:41.240 It's been a really wild time, and we're really excited 0:17:41.280 --> 0:17:47.000 about the intelligent conversation we see developing around bitcoin, digital assets, 0:17:47.040 --> 0:17:50.080 and this technology more broadly. So, maltime you mentioned the 0:17:50.080 --> 0:17:52.160 Golden Report, I remember when I came out and caused 0:17:52.200 --> 0:17:54.520 some waves here sometize what Goldman was saying there and 0:17:54.560 --> 0:17:59.120 whether kind of what if you agree or disagree with them? Absolutely, 0:17:59.400 --> 0:18:01.960 so it's import to know. UM. The report was issued 0:18:02.000 --> 0:18:05.560 by one of Goldman's chief investment officers, who has been 0:18:05.800 --> 0:18:08.480 an analyst of a lot of different trends in the 0:18:08.520 --> 0:18:11.480 investing space UM, and I think it was an interesting 0:18:11.520 --> 0:18:14.880 summary because it really used what's happening in macro markets 0:18:14.960 --> 0:18:17.480 was happening in gold as a way to flame why 0:18:17.520 --> 0:18:20.919 they felt bitcoin was not a great investment, UM, not 0:18:21.040 --> 0:18:24.320 a great long term value investments for investors. The way 0:18:24.400 --> 0:18:28.360 they described bitcoin, which I think was an interesting characterization. 0:18:28.880 --> 0:18:32.200 They talked a lot about issues pertaining to money laundering, 0:18:32.560 --> 0:18:35.280 and as we know, Goldman has itself been dealing with 0:18:35.320 --> 0:18:38.720 a number of issues related to money launderings following the 0:18:38.760 --> 0:18:41.960 fallout of the one MDB scandal and the other aspects. 0:18:42.040 --> 0:18:44.600 That was interesting is in this report they not only 0:18:44.640 --> 0:18:48.480 mentioned that they felt bitcoin was really just purely speculative 0:18:48.560 --> 0:18:52.520 and not really fundamental value investment, they also made a 0:18:52.600 --> 0:18:55.280 similar assessment of gold, where they stated they did not 0:18:55.440 --> 0:18:59.760 feel that gold was a significant investment opportunity for investors, 0:19:00.119 --> 0:19:02.560 and as we look at what's happened to those, both 0:19:02.560 --> 0:19:05.320 the price Schoold and the price of bitcoin, I think 0:19:05.359 --> 0:19:08.639 here is an interesting instance where the market certainly is 0:19:08.680 --> 0:19:13.560 indicating it's not in agreement with that particular assessment. But then, 0:19:14.600 --> 0:19:16.879 to be fair, though, I think they're not alone in 0:19:16.960 --> 0:19:19.639 saying that right there especially, I mean, I leave gold decide, 0:19:19.640 --> 0:19:22.199 But when it comes to crypto assets, Colman sacs Uh 0:19:22.359 --> 0:19:25.119 certainly has plenty of company and saying it's a speculative asset. 0:19:25.160 --> 0:19:27.560 Considering the fact that people are not using it the 0:19:27.600 --> 0:19:31.400 way that they would another currency, what's the counter argument 0:19:31.720 --> 0:19:35.080 to why this has staying power in a way that 0:19:35.160 --> 0:19:39.400 goes beyond what some people are saying. Sure, I think 0:19:39.400 --> 0:19:42.320 there's been a lot of great rebuttals written by the 0:19:42.400 --> 0:19:45.720 industry that use a great set of data. I think 0:19:46.040 --> 0:19:48.159 there's a lot of evidence to the contrary, and we 0:19:48.280 --> 0:19:50.800 have coined share and a lot of time surfacing that 0:19:50.960 --> 0:19:54.119 data and sharing it with our investors, our clients in 0:19:54.119 --> 0:19:56.160 the market. But I think there are a few key 0:19:56.200 --> 0:19:59.000 trends here on bitcoin is being used and the way 0:19:59.040 --> 0:20:01.960 it's being used by people. It's being used as a 0:20:02.000 --> 0:20:05.199 hedge against inflation and as a long term store values. 0:20:05.560 --> 0:20:08.399 There are more people than ever that whold bitcoin in 0:20:08.440 --> 0:20:12.159 their investment accounts, whether that's through a structured product like 0:20:12.200 --> 0:20:16.360 our xbt provider products or the gray Scale GBTC products. 0:20:16.400 --> 0:20:19.080 Here in the US, there are a lot of bitcoin 0:20:19.119 --> 0:20:22.520 wallets that have been created and that number continues to increase. 0:20:23.080 --> 0:20:26.240 The bitcoin that's held in those wallets of staying dormant, 0:20:26.280 --> 0:20:29.640 meaning people aren't speculating on it, they're really holding it. 0:20:30.119 --> 0:20:33.320 And then most importantly, we've seen just a tremendous number 0:20:33.359 --> 0:20:36.880 of inflows into bitcoin over the last two months alone. 0:20:37.320 --> 0:20:41.480 One interesting fact over the last two months, the demand 0:20:41.560 --> 0:20:46.000 for bitcoin has outpaced its supply. Uh So, as you know, 0:20:46.320 --> 0:20:50.359 bitcoin has a daily production of new bitcoins through an 0:20:50.359 --> 0:20:53.640 activity is called mining. And in the last two months alone, 0:20:53.680 --> 0:20:57.280 the amount of investor demands for bitcoin through things like 0:20:57.359 --> 0:21:00.880 squares cash app, Gray Scales, GBTC product US, and our 0:21:01.040 --> 0:21:04.720 XPT Provider products, which is an exchange traded product, there 0:21:04.760 --> 0:21:07.720 has been a hundred and fifty per cent demand for 0:21:07.920 --> 0:21:11.280 bitcoin that exceeds the supply being produced, which to me, 0:21:11.520 --> 0:21:15.760 again is a very bullish indicator. We're also seeing investors 0:21:15.880 --> 0:21:18.760 on the trading side, taking a lot of interest. H 0:21:18.800 --> 0:21:22.719 The Ciene Bitcoin futures contrast broke all time high in 0:21:22.760 --> 0:21:25.200 the last month in terms of outstanding up an interest 0:21:25.240 --> 0:21:27.439 on the platform, and at the end of May we 0:21:27.480 --> 0:21:29.840 saw one day where we had over a billion dollars 0:21:29.840 --> 0:21:32.280 of traded volume, which is an all time high for 0:21:32.320 --> 0:21:35.760 that particular product. Meltem thank you so much for joining us. 0:21:35.800 --> 0:21:38.520 Meltem demere she's a chief strategy officer for coin Shares 0:21:38.520 --> 0:21:41.760 group of seven million dollars in digits in the digital space, 0:21:41.800 --> 0:21:45.040 based in London, giving us the latest on Bitcoin which 0:21:45.160 --> 0:21:49.000 is rolling as Lisa mentioned earlier, and all things in 0:21:49.040 --> 0:21:53.320 the crypto space. Trying to get greater credibility in financial markets. 0:21:53.359 --> 0:21:55.439 It looks like they're having some success. Looking at the 0:21:55.440 --> 0:22:00.919 price of bitcoin, busy, busy, moreing here. We're taking a 0:22:00.960 --> 0:22:04.920 look here at an interesting story that we are seeing 0:22:04.920 --> 0:22:08.520 from Bloomberg Business Week about private equity firms. They've been 0:22:08.520 --> 0:22:11.760 really big investors in the hospital business, and they've also 0:22:11.880 --> 0:22:15.600 been beneficiaries of some of the bailout money. David Kaczynski, 0:22:16.000 --> 0:22:18.840 Bloomberg Business Week reporter, joins us. David, thanks so much 0:22:18.920 --> 0:22:23.520 for joining us. I think he's getting up right now. 0:22:23.560 --> 0:22:25.840 But it really is an interesting focal point because private 0:22:25.880 --> 0:22:28.359 equity was sort of carved out of a lot of 0:22:28.400 --> 0:22:31.800 the programs passed by the federal government, with them saying 0:22:32.119 --> 0:22:35.080 that they do not want these firms to be beneficiaries, 0:22:35.119 --> 0:22:37.800 and yet they have been such huge investors in the 0:22:37.840 --> 0:22:41.040 healthcare industry and hospitals in particular, that there's been an 0:22:41.119 --> 0:22:45.480 extra emphasis Paul on on on how to parse out 0:22:45.640 --> 0:22:49.200 the healthcare considerations with the efforts on the part of 0:22:49.280 --> 0:22:52.320 lawmakers and others to keep money away from private equity. Yeah, 0:22:52.320 --> 0:22:56.359 so let's welcome David and David Kozski. Bloomberg business Week reported, David, 0:22:56.359 --> 0:22:58.199 thanks so much for joining us here. Lisa and I 0:22:58.240 --> 0:23:02.399 were just talking about your story here. Private equity really 0:23:02.440 --> 0:23:06.280 investing in the hospital business and they've received some bailout money. 0:23:06.400 --> 0:23:08.480 Give us a sense of kind of the scope and 0:23:08.680 --> 0:23:11.920 scale of this, Well, well, the scope is still being 0:23:12.240 --> 0:23:15.359 we're still kind of digging through the numbers. Um. You know, 0:23:15.440 --> 0:23:19.119 there was concern when the administration and amongst some lawmakers 0:23:19.160 --> 0:23:21.679