WEBVTT - A Look At Crypto Regulation And The Markets 0:00:00.800 --> 0:00:04.000 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 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.000 at Bloomberg dot com slash podcast. Now, let's get to crypto. 0:00:23.160 --> 0:00:26.240 I've been waiting. Marco Santor joins us. He's the chief 0:00:26.480 --> 0:00:32.159 legal officer at Kraken and Marco. It's interesting, you know, um, 0:00:32.200 --> 0:00:37.360 a lot of bears, Jamie Diamond among them, are you know, 0:00:37.479 --> 0:00:39.680 continually ensuring the market. Hey, you know what, the US 0:00:39.760 --> 0:00:43.760 Government's gonna regulate this space, and it seems like the 0:00:43.840 --> 0:00:47.080 more it gets regulated, the higher the price climbs. Anyway, 0:00:47.200 --> 0:00:50.240 is it really a bad thing if crypto is regulated? 0:00:52.120 --> 0:00:55.360 That's a that's a terrific question, and really like the 0:00:55.440 --> 0:00:59.400 perfect lens to view crypto regulation as it relates to 0:00:59.440 --> 0:01:03.880 the price. Listen, the price of crypto. Are the price 0:01:03.880 --> 0:01:05.880 of crypto is going to go up. It's just gonna 0:01:05.920 --> 0:01:07.640 go up, and it's gonna go up and sometimes it's 0:01:07.640 --> 0:01:10.880 gonna go down. But By and large, the reason why 0:01:10.920 --> 0:01:13.720 the price of crypto keeps going up is not because 0:01:13.720 --> 0:01:17.679 of a speculative frenzy. It's not because governments have been 0:01:17.760 --> 0:01:21.480 laying off and once they do really crack down, it's 0:01:21.520 --> 0:01:23.560 going to get destroyed. The bottom is going to fall out. 0:01:23.560 --> 0:01:26.120 That is completely the wrong ones to view it. The 0:01:26.280 --> 0:01:27.920 right lens to view it is that this is a 0:01:27.959 --> 0:01:34.720 technological transformation, technological revolution, and unlike other technological revolution, this 0:01:34.760 --> 0:01:38.400 one has a price picker. That's the that's the that's 0:01:38.440 --> 0:01:40.679 the bottom line is that if you could, if you 0:01:40.680 --> 0:01:43.760 could invest in the in the very early days of 0:01:43.920 --> 0:01:49.320 arpa net right, the progenitor to the Internet. Gosh, I mean, 0:01:49.640 --> 0:01:51.800 of course you would have done that. You know. The 0:01:51.840 --> 0:01:54.800 early is that the Internet had websites, right, you can 0:01:54.840 --> 0:01:58.160 buy and sell websites, but it was a highly inefficient market. 0:01:58.200 --> 0:02:03.080 It happened very slowly, it was largely insecure. The difference 0:02:03.120 --> 0:02:06.360 between what happened then and what's happening now is not 0:02:06.520 --> 0:02:10.880 that crmino is any lesson the Internet. Actually it will be, 0:02:11.080 --> 0:02:14.880 and it will be significantly more. I think it's going 0:02:14.919 --> 0:02:18.800 to change every aspect of our financial lives. But the 0:02:18.840 --> 0:02:22.720 difference is that well, this time, there there's there's there's 0:02:22.880 --> 0:02:26.959 there's financial opportunity all tied up in it for everyday 0:02:26.960 --> 0:02:32.160 people because these tokens, many of them work like functional goods. Um. 0:02:32.280 --> 0:02:36.560 And that's that's a that is not only a generational opportunity. 0:02:36.600 --> 0:02:39.840 I think it's a historical opportunity. So look, I wouldn't 0:02:39.840 --> 0:02:42.200 say jump in and by a bunch of crypto because 0:02:42.240 --> 0:02:43.920 you think that because you think the price is going 0:02:43.960 --> 0:02:46.239 to go up. That's that's the wrong lens to view 0:02:46.240 --> 0:02:49.000 it through. You have to view this through. What's really happening. 0:02:49.440 --> 0:02:53.480 This this ground swell opportunity. Uh In in terms of 0:02:53.639 --> 0:02:57.840 technological innovation, Marco, there's a new sheriff on Wall Street, 0:02:57.840 --> 0:03:01.080 if you will, in SEC chair Gary Gensler. What do 0:03:01.240 --> 0:03:03.200 you know about him? What do you know about his 0:03:03.360 --> 0:03:09.720 views on crypto? Gary Densler understands, So I think better 0:03:09.760 --> 0:03:13.360 than better than most people. Um. You know, we we 0:03:13.360 --> 0:03:16.920 we keep open lines of communication with regulators even if 0:03:16.919 --> 0:03:20.000 they are in our primary functional regulator. The SEC is 0:03:20.040 --> 0:03:23.720 not our primary functional regulator. They are not the primary 0:03:23.760 --> 0:03:29.240 functional regulator of any crypto exchanges in the US, UH 0:03:29.360 --> 0:03:32.480 that I'm aware of. But look, I mean, you don't 0:03:32.720 --> 0:03:35.640 need a microscope to to figure out that that they 0:03:35.680 --> 0:03:39.200 probably want to be. Gensler has said on a number 0:03:39.200 --> 0:03:44.360 of occasions that he believes that the protections required uh 0:03:44.520 --> 0:03:48.880 for users of crypto exchanges are investor protections, not just 0:03:49.000 --> 0:03:53.400 consumer protections. And that would mean a real shift from 0:03:53.920 --> 0:03:57.480 the kinds of regulation that applies to crypto exchanges today, 0:03:57.960 --> 0:04:01.160 which is primarily money transmit a regulation or the kind 0:04:01.160 --> 0:04:03.200 of regulation that that that you get when you walk 0:04:03.240 --> 0:04:06.680 into a MoneyGram or a Western unions that he thinks 0:04:06.680 --> 0:04:11.320 it ought to be something different, something more investor protection regulation. 0:04:11.760 --> 0:04:15.480 So all of the investor protector regulations that you talk 0:04:15.560 --> 0:04:17.680 about on this show every day, the kind of regulation 0:04:17.720 --> 0:04:25.000 that applies to broker dealers, um, national securities exchanges, investment advisors, 0:04:25.040 --> 0:04:28.320 that that sort of thing. So UM, I think that's 0:04:28.360 --> 0:04:31.719 that's where we're headed. Uh. It's not really a legal 0:04:31.760 --> 0:04:34.520 discussion yet, it's or at least it shouldn't be. It's 0:04:34.960 --> 0:04:38.800 it's a policy discussion, the question of what kinds of 0:04:38.839 --> 0:04:45.320 regulation to apply to crypto companies, exchanges, custodians, that sort 0:04:45.320 --> 0:04:48.040 of thing. And I don't think it's so easy as 0:04:48.279 --> 0:04:50.000 as to look at it and say, well it looks, 0:04:50.040 --> 0:04:52.080 it walks like a duck, it class like a duck. 0:04:52.120 --> 0:04:54.880 It's got steads. So let's call all these things broker 0:04:54.920 --> 0:04:57.080 dealers and call it a day. I think that would 0:04:57.120 --> 0:05:00.359 be throwing the baby out with bath. Moderate in a 0:05:00.480 --> 0:05:04.760 opportunity to establish a regulatory regime that really works for 0:05:04.800 --> 0:05:08.160 crypto uses. I wonder what it's like as a lawyer 0:05:08.200 --> 0:05:13.479 to deal with. UM. You know, an asset that doesn't 0:05:13.680 --> 0:05:18.480 have you can't touch, it doesn't exist other than as 0:05:18.520 --> 0:05:22.360 a line of code, and it doesn't have any um 0:05:22.960 --> 0:05:27.760 intrinsic value or purpose other than to be you know, 0:05:28.720 --> 0:05:31.800 worth money. Is it different than other kinds of I 0:05:31.960 --> 0:05:34.760 P or do you just lump it all in the 0:05:34.800 --> 0:05:40.440 same kind of baskin. It's absolutely different. It's absolutely different. 0:05:40.800 --> 0:05:42.960 And I can tell you, as a lawyer who's practiced 0:05:43.000 --> 0:05:47.960 in this space since late that makes me aged agent 0:05:48.440 --> 0:05:52.000 in this industry. UM, let me let me tell you 0:05:52.200 --> 0:05:55.560 it is. It is. It is the most fantastic opportunity 0:05:55.680 --> 0:06:02.080 to investigate, to reinvestigate first principles of good regulation, to 0:06:02.160 --> 0:06:06.320 reinvestigate how, how how these laws were originally crafted to 0:06:06.360 --> 0:06:10.359 protect people. UM, and I gotta tell you it is 0:06:10.400 --> 0:06:14.040 a It is a terrific opportunity to to question why 0:06:14.120 --> 0:06:17.280 we have disclosure regimes, for example, just the most fundamental 0:06:17.360 --> 0:06:20.680 questions about how we how we protect people and how 0:06:20.720 --> 0:06:23.960 we protect investors. You know, today we have these disclosure 0:06:24.000 --> 0:06:28.440 regimes that require companies who are issuers to tell all 0:06:28.480 --> 0:06:30.560 the public about what the company is doing so that 0:06:30.640 --> 0:06:34.120 people aren't caught off guard by by things that could 0:06:34.480 --> 0:06:39.880 affect their financial future. Do we need that for crypto? Well, 0:06:40.600 --> 0:06:43.919 we need something like it maybe, But I mean, you 0:06:44.040 --> 0:06:48.080 can't ask a digital you can't ask a computer protocol 0:06:48.560 --> 0:06:52.160 to publish a phase, right, Like that's never going to 0:06:52.279 --> 0:06:54.599 happen for a bitcoint and it would be folly for 0:06:54.680 --> 0:06:58.520 government to require it for some companies though, or for 0:06:58.520 --> 0:07:02.000 for some protocols are actually our companies behind them and 0:07:02.080 --> 0:07:05.440 for them, Well, I think we to start what what 0:07:05.560 --> 0:07:08.440 a new disclosure regime looks like? What it really awful? 0:07:10.000 --> 0:07:13.200 All right? Thanks so much for joining us. Really interesting stuff, 0:07:13.240 --> 0:07:20.360 Marco Sentori there from Kraken. Let's get a sense here 0:07:20.440 --> 0:07:24.560 on this market. We talk about the wall of worry, 0:07:24.720 --> 0:07:27.360 if you will, and there are many bricks in that 0:07:27.440 --> 0:07:30.720 wall of worry. Um, let's get a sense. And people 0:07:30.720 --> 0:07:33.040 are asking themselves. Boys, the next ten percent move gonna 0:07:33.040 --> 0:07:35.680 be up or down. I think the camps are. It 0:07:35.720 --> 0:07:40.480 feels like it's fairly evenly dispersed their Jeff Camarta, Chairman, 0:07:40.560 --> 0:07:43.640 CEO and portfolio board chair of the Camarda Wealth Advisory Group, 0:07:43.880 --> 0:07:46.720 is also author of the Financial Storm Warning for investors, 0:07:46.720 --> 0:07:49.880 How to Prepare and Protect your wealth from taxis and 0:07:49.960 --> 0:07:54.280 market crashes. Jeff, are you concerned about a significant pullback 0:07:54.480 --> 0:07:57.920 in this market? I think it's just inevitable. I mean, 0:07:57.960 --> 0:08:00.520 the market has been soaring, really floated up into space 0:08:00.560 --> 0:08:03.800 as the world burns since COVID. COVID presented in early 0:08:04.960 --> 0:08:07.200 So whether this is the beginning of it or both 0:08:07.240 --> 0:08:09.840 continuing bill trend for a bit longer, I'm not sure, 0:08:09.960 --> 0:08:12.440 but I think sooner or later we're in for quite 0:08:12.480 --> 0:08:16.560 a shock. So how do you especially tax hikes, I'm 0:08:16.600 --> 0:08:20.480 I'm wondering, how do you protect your wealth from tax hikes? 0:08:20.520 --> 0:08:24.000 There's a lot of it regional. I notice you're in Florida. Well, 0:08:24.080 --> 0:08:25.960 I think I think you know. The biggest pie, certainly 0:08:26.080 --> 0:08:28.280 is is federal and there are so many dark forces 0:08:28.320 --> 0:08:32.400 that are really conspiring I think to drive really atrocious 0:08:32.600 --> 0:08:36.880 wealth stormed conditions, But protecting yourself from tax hikes really 0:08:37.160 --> 0:08:40.680 is the function of understanding tax law and what the 0:08:40.720 --> 0:08:45.280 opportunities for legal tax avoidance are. All right, So, Jeff, 0:08:45.360 --> 0:08:49.840 you're you're really worried, You're concerned about a significant pullback 0:08:49.880 --> 0:08:53.800 in this market. What would be the catalyst for that 0:08:53.840 --> 0:08:56.560 in your mind? It really is hard to say. You know, 0:08:56.679 --> 0:08:58.679 right now, we're still pretty much in greed mode and 0:08:58.960 --> 0:09:01.600 folks are buying, you know, it's applying demand and which sellers, 0:09:01.679 --> 0:09:05.800 you know, um out number buyers, and it flips, and 0:09:05.840 --> 0:09:08.160 it's it's really hard to tell what the tipping point 0:09:08.160 --> 0:09:10.440 would be. Could have been an attack in Taiwan, you 0:09:10.440 --> 0:09:13.079 know it, could it be an acknowledgement that inflation really 0:09:13.120 --> 0:09:15.320 is insidious and a lot worse than the FED has 0:09:15.400 --> 0:09:18.000 led us to believe. There are so many different things 0:09:18.040 --> 0:09:20.640 that are really could triggered. But when it happens as 0:09:20.679 --> 0:09:23.800 it did, you know ad mid the third quarter of 0:09:23.840 --> 0:09:27.280 oh eight, you know, it's pretty rapid. By the way. 0:09:27.320 --> 0:09:29.960 As a side note, everything lately is reminding me of 0:09:31.080 --> 0:09:36.760 you know that book by Admiral Turvid so good and 0:09:37.000 --> 0:09:40.160 uh a Taiwan issue is one of the things that 0:09:40.240 --> 0:09:44.640 happens I'm more concerned. Um, well, let's say we're more 0:09:44.679 --> 0:09:48.400 focused on a daily basis on inflation and growth. What 0:09:48.480 --> 0:09:52.559 are your views on economic growth, you know, barring something 0:09:52.640 --> 0:09:56.040 like you know, Grace on black swan issue like an 0:09:56.040 --> 0:09:58.439 attack on Taiwan. What what are your views on growth 0:09:58.480 --> 0:10:00.520 and inflation in the US economy right now? Well? I 0:10:00.559 --> 0:10:02.880 think inflation is a really big factor, right and which 0:10:02.960 --> 0:10:06.200 is not fully acknowledged by by a lot of players. 0:10:06.240 --> 0:10:08.600 For instance, deal is up four times in a year, 0:10:08.679 --> 0:10:11.559 four times. It's an important industrial input, right, And that's 0:10:11.640 --> 0:10:13.760 before you look at logistical problems and you know, you 0:10:13.760 --> 0:10:16.000 get the last count there was sixty five ships anchored 0:10:16.040 --> 0:10:18.400 off the l A port. You can't move the stuff. 0:10:18.760 --> 0:10:21.400 Shipping costs have gone through the roof. Um. But to 0:10:21.679 --> 0:10:24.920 answer your question, you know, the economy still is while 0:10:25.040 --> 0:10:27.760 some sectors are doing well in some countries have done okay, 0:10:28.120 --> 0:10:31.080 it's still very much in tatters, you know, and damaged 0:10:31.120 --> 0:10:35.080 in really unknowable ways. Um. And uh, eventually I think 0:10:35.120 --> 0:10:37.440 that that that that financial stress is going to throughput 0:10:37.559 --> 0:10:40.320 into market prices. Jeff, how long have you had this 0:10:40.480 --> 0:10:43.599 view of markets here, this negative view of markets? And 0:10:43.960 --> 0:10:45.679 what do you tell your clients. What's your advice to 0:10:45.679 --> 0:10:49.000 your clients? I wrote the book Between Semesters, A George 0:10:49.120 --> 0:10:53.200 George town Law last last Christmas, and it really began 0:10:53.440 --> 0:10:57.080 to um, you know, to be unclear to me as 0:10:57.120 --> 0:11:00.040 the COVID stock bubble floated up into space, right, the 0:11:00.080 --> 0:11:04.040 world catches fire in early and stock levels just go, 0:11:04.360 --> 0:11:07.880 you know, incredible record highs, and you're starting to examine. 0:11:07.920 --> 0:11:11.640 I wrote a piece for Forbes, um uh probably about 0:11:11.640 --> 0:11:13.840 a year ago that that got a hundred thousand hits, 0:11:13.840 --> 0:11:16.199 which is, you know, unusual for me. And I really 0:11:16.240 --> 0:11:19.920 focus you know on the various uh, the various factors. 0:11:19.960 --> 0:11:22.079 So what we tell clients, and we've really gone. I've 0:11:22.120 --> 0:11:24.319 been a died in the wolf fundamentalist old CF A 0:11:24.559 --> 0:11:28.360 kind of um efficient markets guy well throughout my decades 0:11:28.360 --> 0:11:31.360 of training. But what happened would COVID really moved me? 0:11:31.600 --> 0:11:34.760 And why the the world's on fire and stock prices 0:11:34.800 --> 0:11:37.079 go through the roof didn't make any sense and that's real. 0:11:37.120 --> 0:11:39.040 And when we really started to examine what was going 0:11:39.080 --> 0:11:42.720 on and look at ways to develop countermeasures to protect 0:11:42.800 --> 0:11:45.440 our clients and to readers, you know, from what we 0:11:45.480 --> 0:11:48.240 see as an inevitable but really devastating market bull back 0:11:48.280 --> 0:11:51.600 and that just stops, right, bonds have got some more stresses. Well, 0:11:51.960 --> 0:11:54.600 you know what, I think it's interesting, um if you 0:11:54.679 --> 0:11:58.480 look in emerging markets, crypto has long had a draw 0:11:58.640 --> 0:12:01.679 just because they're bet and sees are you know, can 0:12:01.720 --> 0:12:04.200 be boxed up and wheelbarrowed out and and and still 0:12:04.200 --> 0:12:06.920 be worthless. What do you think though about the bitcoin 0:12:07.040 --> 0:12:11.120 right now? As from a from a US perspective, it's 0:12:11.160 --> 0:12:14.840 difficult to justify the value right and also as a 0:12:14.840 --> 0:12:17.400 as um as a medium of exchange, you know, with 0:12:17.440 --> 0:12:20.839 a wildly volatile and fluction winning value. Um uh. And 0:12:21.080 --> 0:12:23.720 they're also significant fraud you know, how do you can be? 0:12:23.880 --> 0:12:27.600 By its very nature, it's really hard to identify who 0:12:27.600 --> 0:12:30.000 owns it? So I think that that as part of 0:12:30.040 --> 0:12:34.280 the gold sir, not as hard as gold. Yeah. If 0:12:34.360 --> 0:12:36.000 I throw a gold bar on the floor, who owns that? 0:12:36.120 --> 0:12:39.000 You know? That's right? Yeah, well it depends to guests 0:12:39.000 --> 0:12:41.760 do it first? I guess right, that's a good point. 0:12:42.240 --> 0:12:46.000 I just always, you know, I think it's interesting that 0:12:46.040 --> 0:12:48.079 people are looking at as a as a hedge or 0:12:48.120 --> 0:12:50.160 a store of wealth and it has you know, no 0:12:50.240 --> 0:12:54.480 track record and and really no intrinsic value. I mean, 0:12:54.520 --> 0:12:59.160 it's worth what someone will pay for it. All right, 0:12:59.240 --> 0:13:02.320 interesting stuff, and of course we could go on. I'd 0:13:02.320 --> 0:13:04.520 love to have you back on the program, So appreciate 0:13:04.559 --> 0:13:07.280 you joining us. Jeff Jeff Camera out of their chairman 0:13:07.440 --> 0:13:12.000 and CEO Camerata Wealth Advisory Groups talking to us about 0:13:12.280 --> 0:13:15.840 how to well. He wrote the book about the Financial Storm, 0:13:15.960 --> 0:13:18.840 warning for investors how to prepare and protect your wealth 0:13:18.920 --> 0:13:24.600 from tax hikes and market crashes. Now, let's bring in 0:13:24.600 --> 0:13:29.160 Shawn Snyder, head of investment strategy at City US Consumer 0:13:29.200 --> 0:13:32.920 Wealth Management. Sean great having on the program. What are 0:13:33.000 --> 0:13:36.520 your biggest concerns looking at this market? Is it? Is 0:13:36.520 --> 0:13:40.920 it washing in d C um and and tax policy? 0:13:41.040 --> 0:13:45.199 Is it inflation? Is it the Fed? Is it earning season? What? What? 0:13:45.200 --> 0:13:48.640 What's keeping you up at night? If anything? First off, 0:13:48.679 --> 0:13:51.160 thank you for having me. I guess all of those 0:13:52.000 --> 0:13:54.760 are are a good spot to start. Um. You know, 0:13:54.800 --> 0:13:57.920 the DC drama continues to kind of be an overhang 0:13:57.960 --> 0:14:00.760 on the market. Um. You know, I like to think 0:14:00.840 --> 0:14:03.240 that you know, this kicking the can down the oone 0:14:03.240 --> 0:14:05.920 actually gives them more time to um, you know, kind 0:14:05.920 --> 0:14:08.920 of solidify the party and finalize the details, but it's 0:14:08.960 --> 0:14:12.480 not clear whether you know, no immediate crisis means no 0:14:12.559 --> 0:14:15.440 immediate action. Uh, and are we looking at it an 0:14:15.440 --> 0:14:19.480 awkward Thanksgiving dinner yet again with Congress simply um forcing 0:14:19.520 --> 0:14:23.480 the deadline issue to December three instead of um, you know, 0:14:23.520 --> 0:14:26.720 October eighteen. So I think that's an overhanging uncertainty that 0:14:26.760 --> 0:14:30.520 weighs on the market. You know, history heavily suggests that 0:14:30.560 --> 0:14:32.880 they do get it done. I mean, the White House 0:14:32.880 --> 0:14:36.080 and Congress have acted uh ninety eight times since the 0:14:36.200 --> 0:14:38.240 end of World War Two to modify the debt limit. 0:14:38.240 --> 0:14:40.680 They've always done it seems like they will get it 0:14:40.720 --> 0:14:43.840 done again. Um, you know. Likewise, as far as the 0:14:43.880 --> 0:14:48.080 budget reconciliation bills and infrastructure, uh, twenty one out of 0:14:48.120 --> 0:14:51.400 twenty five reconciliation bills have went on to be signed 0:14:51.400 --> 0:14:54.560 by the President. So still a very heavy lift to 0:14:54.560 --> 0:14:57.960 get the Biden agenda off the ground, But you know, 0:14:58.360 --> 0:15:00.120 I think they should be able to do it. The 0:15:00.160 --> 0:15:02.880 other thing with d C that's interesting is by delaying it, 0:15:02.960 --> 0:15:06.400 they actually give the Treasury Department more time to kind 0:15:06.440 --> 0:15:10.640 of bolster their extraordinary measures. So um, it's possible that 0:15:10.680 --> 0:15:13.640 the soft deadline for the debt ceiling is now December three, 0:15:13.640 --> 0:15:16.680 but if they can bolster those extraordinary measures, then maybe 0:15:17.280 --> 0:15:22.280 the actual hard that ceiling deadline is maybe well into 0:15:22.560 --> 0:15:24.120 So I think that's something to keep an eye on 0:15:24.280 --> 0:15:27.440 and the other things you mentioned. Probably the biggest thing 0:15:27.480 --> 0:15:29.640 I'm hearing about on the street is this notion of 0:15:29.720 --> 0:15:34.560 stag inflation, where we get persistent inflation and weaker than 0:15:34.600 --> 0:15:38.640 expected economic growth, and there are some signs that supply 0:15:38.880 --> 0:15:42.040 chain issues are are causing problems. Um. If you look 0:15:42.040 --> 0:15:45.280 at the Atlanta Fed GDP now tracker, it's at just 0:15:45.360 --> 0:15:49.000 one point three for the third quarter, and I think 0:15:49.040 --> 0:15:51.960 that would surprise most investors if that's what actually happens. 0:15:52.560 --> 0:15:55.080 And we get that report October, which is of course 0:15:55.160 --> 0:15:58.480 just before the FED meeting on November three, where it's 0:15:58.520 --> 0:16:00.960 why they expected that will begin to take bond purchases. 0:16:01.680 --> 0:16:07.160 I think importantly most of this slowing is probably related 0:16:07.160 --> 0:16:10.240 to supply chain issues. UM. If you look at leisure 0:16:10.240 --> 0:16:14.000 and hospitality wages are up ten percent, that still suggests 0:16:14.000 --> 0:16:17.800 as demand for workers. Just four percent of small businesses 0:16:17.840 --> 0:16:21.880 are reporting that poor sales are the most important problem. Uh, 0:16:21.920 --> 0:16:24.960 And we have ten two point eight million more job 0:16:25.000 --> 0:16:27.760 openings that unemployed. So it seems to suggest that we're 0:16:27.800 --> 0:16:30.400 seeing a slowing due to the supply chain issues, but 0:16:30.480 --> 0:16:33.800 the demand is still there and the economy should snap back. 0:16:33.840 --> 0:16:37.360 One seases. So we're about to kick off third quarter 0:16:37.440 --> 0:16:41.040 earning season, Sean, what are you looking for over the 0:16:41.080 --> 0:16:43.880 next several weeks here as we hear from some of 0:16:43.880 --> 0:16:47.760 the larger companies. Sure, I think we'll see a pretty 0:16:47.800 --> 0:16:52.200 good earning season SMP five hundred. Earnings per share expected 0:16:52.200 --> 0:16:55.680 advise about twenty eight percent year and year. A couple 0:16:55.720 --> 0:16:58.440 of things that people will be watching is they'll see 0:16:59.040 --> 0:17:03.000 probably see norm realization in the earnings of so called 0:17:03.080 --> 0:17:06.000 value companies. We saw a massive surge in the second 0:17:06.080 --> 0:17:09.960 quarter for financials and energy and some of those value 0:17:09.960 --> 0:17:13.320 company earnings rose eighty seven percent in the second quarter. 0:17:13.960 --> 0:17:16.359 That's unlikely to repeat. It's likely to come down maybe 0:17:16.359 --> 0:17:19.800 twenty something. I'm along those lines. We'll be watching that. 0:17:20.280 --> 0:17:22.520 Uh and then people are gonna be watching very closely 0:17:23.160 --> 0:17:27.200 any comments about margin pressures, and you're gonna want to 0:17:27.240 --> 0:17:30.640 see if these companies can pass on uh these increased 0:17:30.680 --> 0:17:34.040 costs or input costs onto consumers or not. UM. You know, 0:17:34.040 --> 0:17:37.439 it looks like maybe industrials and retail companies may not 0:17:37.560 --> 0:17:39.439 be as able to pass on those costs as some 0:17:39.480 --> 0:17:42.600 of the other ones, so investors will probably be watching 0:17:42.640 --> 0:17:47.919 that closely. What do you think about hedges? You know, 0:17:48.520 --> 0:17:51.440 gold hasn't been performing the way you might have expected 0:17:51.440 --> 0:17:54.239 it to inflation either, even if you don't, even if 0:17:54.240 --> 0:17:55.600 you're not afraid of it, you might want to hedge 0:17:55.640 --> 0:17:59.560 a little bit against it. How do you do that? Well? 0:17:59.600 --> 0:18:02.440 In some ways, you can actually use the energy sector 0:18:02.640 --> 0:18:05.800 and the financial sector is a hedge against higher interest rates, 0:18:05.800 --> 0:18:08.880 and that's what we've seen almost all year long. Financials 0:18:09.040 --> 0:18:12.040 is the second top performing sector, energy the number one 0:18:12.359 --> 0:18:15.879 performing sector. Uh in those two sectors tend to do 0:18:16.000 --> 0:18:18.560 well when interest rates rise. So if we believe that 0:18:19.000 --> 0:18:21.760 interest rates are going to rise because we're seeing more 0:18:21.800 --> 0:18:25.800 persistent inflation, the feed is about to potentially taper on 0:18:25.880 --> 0:18:29.520 November three, then then those are good hedges against that trade. UM. 0:18:29.600 --> 0:18:31.919 Other things you can do is more of like a 0:18:32.000 --> 0:18:35.679 longer term you know, goal or change in your portfolio 0:18:35.800 --> 0:18:39.560 is to shift over to higher quality companies, companies that 0:18:39.640 --> 0:18:43.760 have really strong revenue growth and earnings growth um even 0:18:43.760 --> 0:18:47.480 in times of more mid cycled type conditions where the 0:18:47.520 --> 0:18:50.760 economy is kind of slowed down from its initial reopening, 0:18:50.880 --> 0:18:54.080 and healthcare shares are a great example of that. They're 0:18:54.160 --> 0:18:57.639 really really stable revenue growth UM. So we're looking at 0:18:57.720 --> 0:19:02.520 higher quality companies UM, strong revenue, strong balance sheets, and 0:19:02.560 --> 0:19:05.679 then also companies with high dividends and their ability to 0:19:05.720 --> 0:19:08.480 grow dividends. Those types of companies do better as you 0:19:08.520 --> 0:19:11.560 move into this more mid cycle type conditions. So that's 0:19:11.560 --> 0:19:13.960 what we're telling our clients to do. Hey, Sean, thanks 0:19:14.000 --> 0:19:16.280 so much for joining us. We really appreciate you taking 0:19:16.280 --> 0:19:19.800 the time here. Shawn Snyder, head of investment strategy for 0:19:19.920 --> 0:19:24.240 City US Consumer Wealth and Management, giving us his sense 0:19:24.320 --> 0:19:26.840 of this market. Again. We've got earnings really kicking off 0:19:26.960 --> 0:19:30.479 in earnest tomorrow. We'll get the banks this week at 0:19:30.480 --> 0:19:33.080 the big banks, and obviously we always like hearing what 0:19:33.119 --> 0:19:36.080 the bank management teams are saying about their customers and 0:19:36.160 --> 0:19:38.680 loan demand and just business conditions. And of course, while 0:19:38.840 --> 0:19:42.080 full earnings coverage over the next several weeks, this is 0:19:42.119 --> 0:19:48.760 Bloomberg all right. Berndia uh said, Home managing partner said. 0:19:48.800 --> 0:19:51.840 Home Law Group joins us here and a great great timings. 0:19:51.880 --> 0:19:54.040 We think about just looking at the news this morning. 0:19:54.119 --> 0:19:58.240 John Gruden, uh, the head coach of Las Vegas. We 0:19:58.280 --> 0:20:01.040 can't even talk about that, y leaders. I mean you 0:20:01.080 --> 0:20:03.439 know kind of it's bad. Yeah, it's it's bad. Some 0:20:03.520 --> 0:20:05.320 bad emails there, and it kind of goes to the 0:20:05.840 --> 0:20:08.640 you know, the workplace and behavior and what's acceptable what's 0:20:08.640 --> 0:20:12.240 not acceptable in the toxicity of that workplace. And so Ronnie, 0:20:12.280 --> 0:20:14.840 I thank so much for joining us here. Boy, it 0:20:14.920 --> 0:20:16.640 seems like, you know, you look at some of these 0:20:16.640 --> 0:20:21.080 big companies like Blue Origin, Amazon, Tesla, some real issues 0:20:21.119 --> 0:20:25.359 about the workplace and toxicity, toxicity of that workplace in 0:20:25.400 --> 0:20:28.080 today's environment. Give us a sense of kind of how 0:20:28.160 --> 0:20:32.600 you think this this situation is developing across corporate America. 0:20:33.119 --> 0:20:35.440 Thanks so much for having me on the show. I 0:20:35.720 --> 0:20:39.080 I don't necessarily think this is developing across America. I 0:20:39.160 --> 0:20:42.640 think we're hearing about it now. I think these issues 0:20:42.720 --> 0:20:47.639 have been um sort of swept under the rug previously, 0:20:47.960 --> 0:20:54.879 and now victims have been finding their voice and going 0:20:55.080 --> 0:20:57.040 through the process that they need to go through in 0:20:57.160 --> 0:21:04.680 order to seek some kind of redress. So what is 0:21:04.680 --> 0:21:07.879 is there a line you can draw between things that 0:21:08.400 --> 0:21:11.560 you definitely can't say with colleagues or other people in 0:21:11.600 --> 0:21:14.880 your in your business or your industry, and things that 0:21:14.960 --> 0:21:18.480 you say, you know, to your friends in a private 0:21:18.520 --> 0:21:21.440 group or as you know, President Trump would have said 0:21:21.440 --> 0:21:25.600 the locker room, for example, where's that line? You know 0:21:25.760 --> 0:21:30.040 the line is blurring. On a daily basis, you have 0:21:30.240 --> 0:21:32.920 to be careful about what you're saying and just ask 0:21:32.960 --> 0:21:36.240 yourself before you make your comment, what is the rationale 0:21:36.280 --> 0:21:40.240 behind your comment? Some people say things, uh that are 0:21:40.280 --> 0:21:43.280 meant to be a joke, and that could be okay 0:21:43.320 --> 0:21:46.879 depending on the receiving end. Right, does this person with 0:21:46.880 --> 0:21:49.360 whom you're speaking think it's a joke outside of the workplace. 0:21:50.000 --> 0:21:55.520 But sometimes people say things and they don't care about 0:21:55.560 --> 0:21:58.280 the consequence of what they're saying. For example, in this 0:21:58.440 --> 0:22:01.760 letter that was written by a blue Origin employees or 0:22:01.920 --> 0:22:05.320 in former employees, there was someone who actually stated, you 0:22:05.320 --> 0:22:09.240 should ask my opinion because I'm a man. That type 0:22:09.560 --> 0:22:16.240 of I guess uh statement should not really be permitted 0:22:16.280 --> 0:22:18.879 to be said in the workplace at the very least 0:22:19.320 --> 0:22:24.920 because men and women should be treated equally. And while 0:22:25.000 --> 0:22:28.720 there are various levels of intellect across the board, men 0:22:28.760 --> 0:22:30.960 are not smarter than women. Women are not smarter than men. 0:22:31.119 --> 0:22:34.679 It is on a you know, individualized basis, and to 0:22:34.800 --> 0:22:40.400 just insult an entire group of people, it's not just offensive, 0:22:40.440 --> 0:22:44.720 it's also illegal. You cannot have discriminatory animus in the workplace. 0:22:45.320 --> 0:22:48.200 It's just that simple, Ronnie. What do you advise your 0:22:48.320 --> 0:22:52.719 corporate clients to do here? I mean, there are there 0:22:52.880 --> 0:22:56.840 some best practices that some corporations, or some companies or 0:22:56.880 --> 0:23:00.000 some entities are doing that perhaps should be adopted by 0:23:00.040 --> 0:23:03.520 more others. Yes, that's a great question, Thank you for asking. 0:23:03.560 --> 0:23:07.240 I don't know how widespread these best practices are. Certainly 0:23:07.280 --> 0:23:10.960 when I work with my employer clients, we discuss it, 0:23:11.080 --> 0:23:13.840 and the first thing is to ask yourself, why is 0:23:13.880 --> 0:23:18.359 this happening? Was it just you know, one bad actor actress. 0:23:18.880 --> 0:23:22.040 If so, you know, terminating that person is sufficient, But 0:23:22.640 --> 0:23:25.760 usually it's not just one actor actress. Usually it's a 0:23:25.800 --> 0:23:29.080