Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanabek. We're here every day bringing
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Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News Listen. We've got winter storms
Speaker 1: slowing down the vaccination drive in New York, Florida, and
Speaker 1: Puerto Rico, a lot of other places. Anthony Fauci Nation's
Speaker 1: top infectious disease dr Tim saying inoculations have come to
Speaker 1: a grinding halt in some places. So that's a little worrisome. Yeah,
Speaker 1: it certainly is. That That's why we see the numbers
Speaker 1: come down in the Bloomberg Vaccine Tracker. If there is
Speaker 1: bad weather, it can change not just in a state,
Speaker 1: but also the supply chain. Yeah, exactly, So watching all
Speaker 1: of that closing right now, really closely, excuse me right now,
Speaker 1: cases ex eating a hundred and ten million around the world.
Speaker 1: Let's get into our next guest, who has spent over
Speaker 1: three decades working to boost the health, safety, and sustainability
Speaker 1: of our planet and the people working on it. Dr
Speaker 1: Shelley Hearn back with us, director of the Johns Hopkins
Speaker 1: Center for Public Health Advocacy at the Johns Hopkins Bloomberg
Speaker 1: School of Public Health, which is supported by Michael R. Bloomberg, founder,
Speaker 1: Bloomberg LP, and Bloomberg Philanthropies. She's with us once again
Speaker 1: from Charleston, South Carolina. Doctor her, Nice to have you
Speaker 1: back with us. Um, how are you. I'm doing whale, Carol.
Speaker 1: Thank you though, just like so many other Americans, I
Speaker 1: can't wait to get my vaccination shot right right and
Speaker 1: forgive me my understanding is you're in d C, not
Speaker 1: in South Carolina. Yeah, how do you think it's going?
Speaker 1: It feels like over the last couple of days we've
Speaker 1: been asking internally and our reporters have been reporting on
Speaker 1: it about hey, is the worst over because it did
Speaker 1: feel like with cases and hospitalizations coming down and more
Speaker 1: vaccines getting at it did feel like it was getting better.
Speaker 1: How do you see it? What are you hearing? Well?
Speaker 1: It absolutely is going in the right direction. You've seen
Speaker 1: the trends. We had our highest peaks ever in actual
Speaker 1: COVID desks in January, over four thousand a day. We're
Speaker 1: dropping now to two thousand, which is the right direction,
Speaker 1: but it's still much higher than the horrific peaks that
Speaker 1: we had in the summer. So we got to continue
Speaker 1: to stay vigilant, keep on this vaccines. It's just one
Speaker 1: part of that equation, but it comes down to also
Speaker 1: the mass, the social distancing um, the care that we
Speaker 1: have to do and continue to keep up. Why do
Speaker 1: you think we're seeing such a dramatic drop in such
Speaker 1: a short time. Is it is it too early because
Speaker 1: to see the effects of the vaccine, or is it
Speaker 1: because we're over that post holiday bump. You know, it's
Speaker 1: speculation and there are a number of different theories. We
Speaker 1: haven't the science hasn't come in yet, but it's probably
Speaker 1: a small contribution um the number of people that have
Speaker 1: actually had COVID that are gettingvaccinated. I think with news
Speaker 1: on the variant being out there, people have heightened again
Speaker 1: their vigilance and being careful on social distancing and wearing masks.
Speaker 1: You see more mandates. So it really comes down to
Speaker 1: a number of factors that helped turn this around. Uh,
Speaker 1: and hopefully down the road we will have that herd
Speaker 1: immunity and will be at a much better place. Selly,
Speaker 1: how do you think mind iminstration is doing so far? Well,
Speaker 1: you know someone who's a professor who's used to handing
Speaker 1: out grades. Uh, it's it isn't incomplete, but I've seen
Speaker 1: some very important signs, uh in terms of progress. So
Speaker 1: you know, the good news is we Uh there was
Speaker 1: a pledge to have a hundred million Americans vaccinated in
Speaker 1: a hundred days, which is ambitious. But I did have
Speaker 1: a chance to talk to the White House vaccine coordinator today.
Speaker 1: They even with the weather, appear to be on track.
Speaker 1: They're up to now about one point seven million and
Speaker 1: shots going into people's arms per day. So that's that's
Speaker 1: helping you with the math um. But but you know,
Speaker 1: we we started before this administration came in, we had
Speaker 1: about eight million doses a week going out to the states.
Speaker 1: Were now up to twelve million. But you know, just
Speaker 1: as well as everyone who's out there who's trying to
Speaker 1: help family members or themselves find a vaccine. It's complicated
Speaker 1: out there, and it's a bit of a mess from
Speaker 1: state to state. You know what I have to say
Speaker 1: one of the I don't know how you tim at home,
Speaker 1: but our conversations. What's confusing to me is I would assume,
Speaker 1: even if it was a little messy with the new
Speaker 1: administration coming in and trying to figure out getting up
Speaker 1: to speed, wouldn't a couple of phone calls to like,
Speaker 1: you know, Maderna and Fiser and say, all right, how
Speaker 1: many have we ordered? How many to make sure they're
Speaker 1: getting out, and a couple of calls to the states
Speaker 1: to say, let's just get it out. Um. I understand
Speaker 1: it's not as easy as that, but it does feel
Speaker 1: like it's taking a lot slow or than and maybe
Speaker 1: it said, well, I know there are a lot of
Speaker 1: sleepless nights for a lot of people out there, and
Speaker 1: those calls have been made and there the vaccine companies
Speaker 1: are stepping up, and there have been new commitments for
Speaker 1: additional doses from MODERNA from the soon hopefully coming online
Speaker 1: Johnson Johnson vaccine, So there's more that should be coming
Speaker 1: into the supply chain and they're talking about by July, uh,
Speaker 1: six hundred doses being available, which would would cover for
Speaker 1: everybody who needs and should have a shot. But it
Speaker 1: is still slow. And the thing that concerns me the
Speaker 1: most is, yes, we've got companies ramping up. Yes, the
Speaker 1: administration is trying to find as many different venues in
Speaker 1: ways to get this out there, but you have every
Speaker 1: state doing their own guidelines. It's um, it's a it's
Speaker 1: it's crazy to see this patchword taking place when we
Speaker 1: did have guidance put in as by the federal government
Speaker 1: of who should be prioritized how to roll it out,
Speaker 1: and it seems to have been forgotten. So that's that's
Speaker 1: the kind of thing I'd like us to have. UM
Speaker 1: that it's an equal opportunity versus people having to go
Speaker 1: hunting and pecking and shopping for a vaccine. Agreed. Agreed.
Speaker 1: I think it makes it really confusing and complicated for
Speaker 1: for all of US citizens. UM. Dr Jelleyharn, thank you
Speaker 1: so much. Really appreciate the time you find for us.
Speaker 1: Director of the Johns Hopkins Center for Public Health Advocacy
Speaker 1: at Johns Hopkins Bloomberg School of Public Health, of course,
Speaker 1: supported by Michael R. Bloomberg, founder of Bloomberg ELP and
Speaker 1: Bloomberg Philanthropies. That patchwork, Tim worries me. Yeah, it worries
Speaker 1: me as well. And I wondered to what extend public
Speaker 1: private partnerships are going to be something moving forward when
Speaker 1: it comes to vaccine distribution. If you think about how
Speaker 1: we get flu shots every year, so many of them
Speaker 1: happen at offices nationwide, is that what it's gonna look
Speaker 1: like in the future for COVID vaccine. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes Tim
Speaker 1: Stenovic on Bloomberg Radio. We continue to watch Tim a lot.
Speaker 1: What is happening in the big freeze in Texas. We
Speaker 1: know it's becoming a global oil market crisis as well,
Speaker 1: so much output comes out of Texas. And then let's
Speaker 1: not forget there was a story our Bloomberg News team
Speaker 1: reporting that Texas is restricting the flow of natural gas
Speaker 1: across state lines. There's a lot of interesting things going
Speaker 1: on here. Yeah. Unfortunately, we have Jennifer Delowe, energy and
Speaker 1: environmental policy reporter for Bloomberg News joining us on the
Speaker 1: phone now from Washington, d C. Jennifer it's it's great
Speaker 1: to speak with you again, and you've we've been joining
Speaker 1: us on Quick Take throughout the week and we really
Speaker 1: appreciate it. UM. Governor Greg Abbott has announced this, this
Speaker 1: order he is On Wednesday, he said that he was
Speaker 1: banning gas from leaving the state through February to ensure
Speaker 1: in state power generators had ample supplies. UM. Is this constitutional? Well,
Speaker 1: there's certainly a lot of questions being raised about the
Speaker 1: authority that he's using here. UH. And and certainly there
Speaker 1: have been questions raised about whether this violates the Constitution's
Speaker 1: Commerce Clause, which allows UH state governments to UM engage
Speaker 1: in interstate trade and prohibits them from interfering in interstate
Speaker 1: commerce the UH. Interestingly, the Biden administration was asked about
Speaker 1: how they're viewing this and and they said very clearly, UH.
Speaker 1: One of their top officials said just about an hour
Speaker 1: ago that, uh, the UH this is a state issue,
Speaker 1: This is a state authority here. Still questions are being raised,
Speaker 1: and it's not quite clear to us that that UH
Speaker 1: the gas exporters who are affected by this are inclined
Speaker 1: to follow the order. It's no longer just an order
Speaker 1: from Abbot, but in fact, the Railroad Commission of Texas
Speaker 1: has now it's been a notice to operators as well.
Speaker 1: Do you know what I love about these stories, Jen,
Speaker 1: is that it's it's a crisis and then all of
Speaker 1: a sudden we understand first of all how important Texas
Speaker 1: is globally to the oil market, their own power grid,
Speaker 1: and then we you know, start to learn about you know,
Speaker 1: constitutional so called you know, commerce clauses. I mean, these
Speaker 1: are things that in a normal day we don't even
Speaker 1: think about, right, but you know, there's these structures in
Speaker 1: place that can make things problematic, um and make you
Speaker 1: wonder kind of how things work right. And Texas is
Speaker 1: is so unique in many ways here because it is
Speaker 1: you know, a bit of an island in terms of
Speaker 1: its electric grid, which is not like the rest of
Speaker 1: the of the country. It is or cot is separate
Speaker 1: from the rest of the country's grid and and uh
Speaker 1: and that creates kind of a unique environment for um,
Speaker 1: for investments, but also for the challenges that we've seen
Speaker 1: over the last few days. And you know, in a crisis,
Speaker 1: let's not forget the you know, we're all looking to
Speaker 1: you know, political leaders to to act, and certainly Texans
Speaker 1: who have gone without power, Uh for days. Are are
Speaker 1: looking to their leader's act and that may be a
Speaker 1: big factor. And why you know that the governor came
Speaker 1: out and took this step yesterday. Hey, Jen, I gotta
Speaker 1: ask about the history here, because as uh, as you
Speaker 1: wrote in an earlier story about this, Texas was warned
Speaker 1: a decade ago that its grid was unready for the cold.
Speaker 1: There was a storm back in twenty eleven. Uh. We
Speaker 1: do see this storm like a black Swan event, is
Speaker 1: how it's being referred to a once in a century storm.
Speaker 1: But but but Texas, the critics say, Texas knew this
Speaker 1: could happen, right, Well, that's exactly right. So it actually
Speaker 1: wasn't even just two thousand eleven. Uh. Federal regulators have
Speaker 1: been warning repeatedly UH Texas and other southern states to
Speaker 1: harden their assets and to be better prepared for the cold.
Speaker 1: So two thousand eleven was certainly a big event. It
Speaker 1: wasn't as bad as this time. Temperatures were a little
Speaker 1: bit higher in Texas and New Mexico during two thousand eleven,
Speaker 1: But an incident in nineteen was also very destructive and
Speaker 1: caused the state's first rolling blackout. So you know, even
Speaker 1: if it's uh, you know, not on the on the
Speaker 1: scale of this disaster. Certainly these storms have provided a
Speaker 1: lot of thought for the problems here, and and regulators
Speaker 1: have said, it's a simple matter of weatherizing your assets, uh,
Speaker 1: making sure that you put heating elements and instrumentation panels,
Speaker 1: and that you put you know, thermal protection and insulation
Speaker 1: around pipes and other equipment. Jen really quickly fifteen seconds.
Speaker 1: So do things change going forward as a result of this.
Speaker 1: There's gonna be a lot of investigations and a lot
Speaker 1: of questions where folks are going to be asking that
Speaker 1: exact question, Uh, Governor Perry. Yesterday, former Governor Perry warned
Speaker 1: that the state prefers its free market and uh said he's, uh,
Speaker 1: he doesn't he doesn't support those changes. Yes, yeah for
Speaker 1: me once, shame on, you know, you know this works
Speaker 1: all right, Jen Delowie, thank you so much. Energy environmental
Speaker 1: policy reporter at Bloomberg News joining us from the nation's capital.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. All right, we
Speaker 1: are also closely watching bitcoin because man, it seems to
Speaker 1: take out one record after another. Tim. Uh, and we
Speaker 1: just talked about Jeff good Luck now changing his mind,
Speaker 1: seeming to now consider a bitcoin a better trade. He
Speaker 1: tweeted that out. So much going on, all of this
Speaker 1: leading to a micro Reagan reporting online for Bloomberg Business
Speaker 1: Week about the Wall Street skeptics who are sitting up
Speaker 1: and paying attention now. Mike is Bloomberg Market senior editor.
Speaker 1: He's with us on the phone in New Jersey along
Speaker 1: with Bloomberg Business Week editor Joe Webber on the access
Speaker 1: line in Brooklyn. How the tides have changed a little
Speaker 1: bit here. It seems like Joel, Yeah, well that and
Speaker 1: that was sort of uh, what cut our attention is?
Speaker 1: You know, just it seems like comes in in waves
Speaker 1: and fits and starts and takes years, but like slowly.
Speaker 1: It just seems like bitcoin has made this kind of
Speaker 1: relentless progress and turned skeptics into believers or at least
Speaker 1: at least um less skeptics maybe whatever that whatever that
Speaker 1: word is um And you know, we watched it happen
Speaker 1: with with Tesla starting to talk about it in a
Speaker 1: different way and corporate balance sheets starting to maybe have
Speaker 1: the prospect of it. Of my mean suddenly becoming a
Speaker 1: place that might try and get bring bitcoin onto its books.
Speaker 1: And it just kind of turned to Mike and say, like,
Speaker 1: you know what, what's happening is Is this really happening?
Speaker 1: And what's your take, Mike? Is it is this Bitcoin's moment?
Speaker 1: You know? Joel Uh, Like I wrote, I think a
Speaker 1: lot of people in the sort of traditional financial industry
Speaker 1: roles had kind of hoped bitcoin was a fad and
Speaker 1: so we go away and they wouldn't really have to
Speaker 1: worry about it. And I think this month and maybe
Speaker 1: the last few weeks is really destroyed anyone's ability to
Speaker 1: just ignore it from now on. As you point out, uh,
Speaker 1: Tesla is scoring some of its cash on its bound
Speaker 1: sheet in the form of bitcoin. Uh. Another software company
Speaker 1: micro strategy family famously doing the same. Um. Now Pestils
Speaker 1: in the SMP five micro strategy is actually now big enough.
Speaker 1: It's bigger than some companies in the SMP five. D Uh,
Speaker 1: some of the smaller companies, so you know, technically could
Speaker 1: be added some nights. So as an investor who was
Speaker 1: kind of trying to ignore bitcoin and hope the fact
Speaker 1: that goes away, you really can't do that anymore. Because
Speaker 1: it's starting to, as you point out, get ingrained in
Speaker 1: the traditional financial system. And I think, you know, the
Speaker 1: big question is will other companies, will other corporate treasures
Speaker 1: and CFOs be inspired to do what Elon Musk and
Speaker 1: Michael Sailor at micro Strategy are doing and actually store
Speaker 1: some of their retained earnings their cash in bitcoin. Because yeah,
Speaker 1: there's a common complaint that it's your typical way of
Speaker 1: holding cash, like investments on your balance sheet is through
Speaker 1: treasury bills. They're not yielding anything. So as as Michael
Speaker 1: Seller puts it, it's like it's like having a melting
Speaker 1: ice cube on your balance sheet when you look at
Speaker 1: all this asset price inflation elsewhere, and to just be
Speaker 1: holding cash that's fielding nothing is an issue for a
Speaker 1: lot of treasures, So I think, you know, I'm not
Speaker 1: sure how many will follow their lead, Carol, but I
Speaker 1: think the dis action that's going to happen to be fair.
Speaker 1: We've talked to Michael Sailor on air. I mean, he
Speaker 1: is all in big time on bitcoin, So just like
Speaker 1: put that out there. Um, Mike, why why do you
Speaker 1: think bitcoin is so polarizing? I mean, I mean, you
Speaker 1: have people who are like so passionate about it. They
Speaker 1: say it's the future, this is going to change everything,
Speaker 1: and then you have people who refuse to acknowledge that
Speaker 1: it has any value. So I think it's because, you know,
Speaker 1: if you came up studying finance. Uh, in the traditional finance,
Speaker 1: you always look at an investment as far as okay,
Speaker 1: what or what's the act and I'm buying here? Does
Speaker 1: it have a cash flow attached to it and therefore
Speaker 1: a yield? Or if it's a currency, what's it backed by?
Speaker 1: Backed by a stable government with strong finances or a
Speaker 1: weak government with a huge deficit that's going to keep
Speaker 1: trying money? You know, the same thing in the bottom market.
Speaker 1: What's the likelihood that this yield I'm getting he is sustainable?
Speaker 1: You know, is the nation or the company gun a
Speaker 1: go bust? There was bitcoin there's really nothing like that
Speaker 1: to analyze. I mean, is it is just a you
Speaker 1: often hear the knock Uh it's called a digital pool
Speaker 1: of kind of referring back to the Dutch pool of
Speaker 1: craze of the seventeenth century. UM, meaning it's just kind
Speaker 1: of a fad, a market mania that people get excited about. UM.
Speaker 1: I think that sentiment is is changing fastly now because
Speaker 1: of this corporate interest. The notion that does the number
Speaker 1: of bitcoins is limited, the supply is limited where in
Speaker 1: currency markets, um, you know, the money supply keeps on
Speaker 1: increasing as far as U S dollars because of what
Speaker 1: the FET is doing. UM. So this notion that it
Speaker 1: you know, it's sort of a way to preserve capital. UH,
Speaker 1: that will has more of a chance at least in
Speaker 1: the believer's eyes, of appreciating in value than depreate depreciating. UM.
Speaker 1: It's really starting to click with a lot of people.
Speaker 1: And I think that's why, you know, it's not just
Speaker 1: Elon Musk and and UH and micro strategy, but you know,
Speaker 1: the tide is really turning where people see the the
Speaker 1: value in this um. You know. I think you could
Speaker 1: be say, wake up one day and see a big
Speaker 1: drop in the in the value of bitcoin and maybe
Speaker 1: that notion such you know, we'll have a big setback. UM.
Speaker 1: But for now, when when all it's doing is going up,
Speaker 1: I think it's just lowering more more and more people
Speaker 1: into sort of the true believer camp of bitcoin. Yeah,
Speaker 1: you know, Mike, I think the other element and alluded
Speaker 1: to this is just that this idea of like, you know,
Speaker 1: we call it a cryptocurrency and that you know, it's
Speaker 1: kind of been you know, like for lack of a
Speaker 1: better phrase. But in many ways, it's like it's starting
Speaker 1: to look less like a real currency than it is
Speaker 1: just a store of value in in a in a
Speaker 1: stranger sense, it's it's actually, you know, not something that
Speaker 1: we might be you know, paying our phone bills with
Speaker 1: or you know, I guess you could buy your your
Speaker 1: your next tesla with a supposedly, but it does not
Speaker 1: seem like it's a transactional thing so much as something else. Um,
Speaker 1: what do you think of that? Just quickly? My think, Yeah,
Speaker 1: I don't think the appeal is still yet in the
Speaker 1: it's use as a means of transaction. I mean, you
Speaker 1: remember a few years ago when bitcoin first uh started
Speaker 1: getting hot. I mean, I guess it's several years ago now. Also,
Speaker 1: it's the companies, you know, we're saying, oh, you can
Speaker 1: buy our products or service. You can buy pizza with bitcon,
Speaker 1: you can buy how many people did um write? I
Speaker 1: think it really is just the hope that this is
Speaker 1: an appreciation. This is Bloomberg Business Week with Carol Messer
Speaker 1: and Bloomberg quick takes Tim Stinovic on Bloomberg Radio. Tom, Tom,
Speaker 1: how did I do that? Hey? That's my dad. Okay,
Speaker 1: well that's nice. Sorry, sorry, my Tim's man. Tim. Anything
Speaker 1: going on in Washington today, Yeah, a little bit. You know,
Speaker 1: it's it's get It's all the rage on Twitter. It's
Speaker 1: what people are tweeting about right now. It is the hearing,
Speaker 1: of course that we are talking about happening in Washington
Speaker 1: and the game stop hearing. Yeah, it's been a big
Speaker 1: deal and we've been following it. Uh, and we talked
Speaker 1: about it earlier, you know, the CEO of Robin Hood,
Speaker 1: CEF Citadel, CEE of Melvin Capital, the co founder read it.
Speaker 1: I mean, there's a lot going on. So let's get
Speaker 1: to somebody who's been following it very closely. Larry tab Is,
Speaker 1: Bloomberg Intelligence head and director of Market Structure Research, on
Speaker 1: the phone from Cape Cod, Massachusetts. Larry, good to have
Speaker 1: you here with Tim and myself. So what's jumping out
Speaker 1: for you besides the heated exchange between the lawmakers and
Speaker 1: the witnesses. Great to be here, guys. Um, Yeah, it's
Speaker 1: an interesting discussion. It's really interesting to you know, to
Speaker 1: hear what the lawmakers take is on this whole issue. UM.
Speaker 1: That said, it's really difficult to get any serious points
Speaker 1: across because everybody only has a couple of minutes, So
Speaker 1: everybody's trying to push everybody to a guest or no answer. Uh,
Speaker 1: two questions that really deserve a lot more than yes
Speaker 1: or no. That said, finally, in the last couple of minutes,
Speaker 1: there have been some issues and uh payment for the
Speaker 1: water flow and price improvement and issues. Really I think
Speaker 1: that really mean a lot to investors. Hey, Larry, does
Speaker 1: anything come of this? You know? I heard a lot
Speaker 1: of the questions about payment for order flow uh and
Speaker 1: and questions about the actual execution of these trades. But
Speaker 1: what happens on the other side of this, I mean,
Speaker 1: is there any regulatory action that's taken? Good question? Uh.
Speaker 1: Reporters said they're gonna be two more hearings at least
Speaker 1: on this, so I'm not sure that anything's going to
Speaker 1: come directly out of this. Um. You know, there were
Speaker 1: some discussions around all different things, everything from you know,
Speaker 1: is this manipulation, what's going on with paying Florida flow?
Speaker 1: People were talking about transaction taxes. Hopefully nothing UM. You know,
Speaker 1: substantial happens from this meeting, So I'm not sure we
Speaker 1: really got it at the details, enough details to really
Speaker 1: get at the heart of the matter. But we'll see
Speaker 1: what happens there for the next two two hearings. All right, Larrys.
Speaker 1: So I've got to ask you, does anything need to
Speaker 1: have up in Like It's interesting I've been hearing some
Speaker 1: of the guests on Bloomberg Radio the analysis and is
Speaker 1: it just the big guys kind of ticked off at
Speaker 1: the little guys for figuring out how too smart to
Speaker 1: do smart trading? Yeah? You know, I think, you know,
Speaker 1: there there are some things that we should be putting in,
Speaker 1: you know, on the on the side and really looking
Speaker 1: more into like, you know, Israel show really, you know,
Speaker 1: could it be tightened up in terms of short selling,
Speaker 1: transparency and disclosure? UM? Is market manipulation? Can it really occur?
Speaker 1: You know through bullet and boards? And you know, you
Speaker 1: usually when we think about market market manipulation, it's usually
Speaker 1: by a very limited group of people. UM. But what
Speaker 1: happens when it's a bunch of little investors completely distributed? Um?
Speaker 1: And how does that? How does that work? UM? Payment
Speaker 1: for waterflow? I think I think that I think that
Speaker 1: stays where it is. Um. I think that gives uh
Speaker 1: UM brokers or investors free commissions, and I think it
Speaker 1: gives creates some incentive for market makers like Citadel the
Speaker 1: provide price improvement. But I think the institutions would like
Speaker 1: to get access to that flow. So so maybe we
Speaker 1: see tightening spreads on markets so that more flow can
Speaker 1: actually occur on exchange, because that's one of the key
Speaker 1: issues about why that doesn't take place on exchanges because
Speaker 1: there's a penny tick size limit. So there are some
Speaker 1: things that are kind of cropping up that me may
Speaker 1: deserve further investigation. But I think, um, you know anything
Speaker 1: directly from this, You know, I'm not sure we're going
Speaker 1: to see any direct actions. You know, Tim, you brought
Speaker 1: this up on our on our planning call about this
Speaker 1: whole idea of payment for order flow. UM. I know
Speaker 1: we've got another guest coming up at the close to
Speaker 1: talk about this. What do we need to understand the
Speaker 1: larry about paying for order flow and this whole concept
Speaker 1: of best price because it's not always the best price
Speaker 1: because the fidelity versus a Robin Hood or somebody might
Speaker 1: not be getting the price well the way that sec
Speaker 1: to turn you know things about best prices, that it's
Speaker 1: act more better than the displayed price in the market,
Speaker 1: which is which is locked at a penny minimum spread.
Speaker 1: But the problem is that UM, a lot of stocks
Speaker 1: should be traded more efficiently than that. So so, and
Speaker 1: that has to do with the size of the order.
Speaker 1: Because you know, my year hundred share order, UM, you
Speaker 1: know doesn't impact supplying to man. But let's just say
Speaker 1: you know, UM, large mutual funds order, a large hedge
Speaker 1: funds order, will that that a market maker can pay
Speaker 1: a little bit more UH for these retail flow orders
Speaker 1: because it knows that there's not a million shares behind it,
Speaker 1: are half a million shares behind it. Because any order
Speaker 1: that's placed in the traditional markets could be accessed by anybody.
Speaker 1: It could be you, me, It could also be Stevie Cohner,
Speaker 1: some big mutual fund. The house hearing on game stock
Speaker 1: market volatility is happening right now. We are broadcasting it
Speaker 1: live on Bloomberg Quick Take right now. You can catch
Speaker 1: it at Bloomberg dot com slash qt if you want
Speaker 1: to watch it. Larry I got I gotta ask here. Um.
Speaker 1: When it comes to the questions that that lawmakers are
Speaker 1: asking right now, does it seem like that they're asking
Speaker 1: the right questions here? Would you ask different questions? M
Speaker 1: I think they're kind of hinting in the right spaces.
Speaker 1: The problem is that the five minute time constraint doesn't
Speaker 1: allow an intelligent answer because these answers are not yes
Speaker 1: or no. If you need to understand even just the
Speaker 1: dynamics around payment for order flow, why can't you give
Speaker 1: a hundred sure you know, uh trade a better price
Speaker 1: than you can give a half million sure trade? Um?
Speaker 1: Those need a little bit of time to suss out. Um.
Speaker 1: So I think they're they're hinting around at the right thing.
Speaker 1: That said, I'm not sure there's enough time to really
Speaker 1: get at the heart of the matter. Hey just quickly,
Speaker 1: just got about thirty seconds here. But in terms of
Speaker 1: the individual investor, the retail investor, these you know, no
Speaker 1: cost trading platforms like a robin Hood and others. That
Speaker 1: has given them a lot of access to the market.
Speaker 1: It's a good thing. Can we say that? Oh, no question.
Speaker 1: You know, first of all, you know, when I started
Speaker 1: in the business, God, when they when they carved trades
Speaker 1: on the stone back in the eighties. Um, you had
Speaker 1: to pay two hundred dollars aside to get in and
Speaker 1: out of of of a stock. You can for a
Speaker 1: hundred shares. Now you get in out for free. Um.
Speaker 1: You know before back then, UM, I remember getting priced
Speaker 1: worse than the daily high or low. Um, and not
Speaker 1: in a good way. You know now and you get
Speaker 1: from filled in a second. So so the markets are
Speaker 1: much better and actually much better for individuals than even institutions.
Speaker 1: I just think it's an important point, especially as they
Speaker 1: move forward and thinking about any kind of regulatory oversight
Speaker 1: of especially these new trading platforms. Larry, thank you so much,
Speaker 1: really appreciate it. Larry tab head of Market structure at
Speaker 1: Bloomberg Intelligence, joining us from Cape Cob, Massachusetts. Roam turn on. Yeah,
Speaker 1: but you let me drive? No, no, no home, honey, please,
Speaker 1: I'll do the riding drivel lets me. I want to drive,
Speaker 1: Just drive, baby. The question trying This is the drive
Speaker 1: to the globe. Thanks, we'll drying us Dawn on Bloomberg Radio.
Speaker 1: All right, we're just about eleven minutes away from that
Speaker 1: closing bell on this Thursday. It is time for the
Speaker 1: drive to the close. And great to have back with us.
Speaker 1: Dan Pippotone, co founder of Trade zero America, joining us
Speaker 1: once again on the phone in Brooklyn. Dan, good to
Speaker 1: have you here with Tim and myself. How are you great?
Speaker 1: Thanks for having me cal So were you glued to
Speaker 1: your TV or radio or streaming service when it came
Speaker 1: to the hearings today in Washington? I had one ear
Speaker 1: on and one eye on the screen. But yeah, interesting times. Uh,
Speaker 1: it's it's really interesting to see kind of the lawmakers
Speaker 1: take on on what happened. Uh. You know, we feel
Speaker 1: that they're constantly trying to paint the picture of you know,
Speaker 1: the markets being rigged or stacked against the little guy.
Speaker 1: And optically, while that's a great story and a great headline,
Speaker 1: it's it's refreshing to hear you know, some of these guys,
Speaker 1: the CEO of Citadel amongst them, to really stand their
Speaker 1: ground and and you know, let the regulators and the
Speaker 1: lawmakers know exactly what happened that day. So Dan, wait
Speaker 1: wait wait wait wait wait, So what exactly happened that day? Uh?
Speaker 1: Robin Hood had a capital call. DTC is sort of
Speaker 1: the clearing firm's clearing firm. For whatever reason, they they
Speaker 1: don't know if they were unable to or or or
Speaker 1: against meeting it. But they wanted to make sure that
Speaker 1: the call didn't get any bigger, uh, And that was
Speaker 1: why they were stricted trading and some of those real
Speaker 1: volable stocks. So were the lawmakers asking the right questions?
Speaker 1: Where any lawmakers asking the right questions? In your opinion,
Speaker 1: I I think some of the guys on the Republican
Speaker 1: side did kind of get to the heart of the matter,
Speaker 1: you know, really demonstrating that you know, the markets operated
Speaker 1: as they should, um. You know, um, the the hedge
Speaker 1: funds and institutions really had had you know, had their
Speaker 1: play handed to them by the retail investor. And I
Speaker 1: think just that dynamic, uh and kind of turning Wall
Speaker 1: Street on its ear, where the little guy winning, I
Speaker 1: think is one of the main drivers of kind of
Speaker 1: one you know, the updoor for all of us, for
Speaker 1: all of us, but the market, the stopping of the trading,
Speaker 1: is that the market functioning as it should or is
Speaker 1: there something that does need to still be worked out
Speaker 1: in your view? Well, and that's why they're talking about,
Speaker 1: you know, tightening up the settlement times because you know
Speaker 1: the way that the markets are structured right now. It
Speaker 1: did operate as designed. But to your point, the rules
Speaker 1: and and the means in which these capital calls are calculated,
Speaker 1: I think need to be revised, need to be a
Speaker 1: little bit more transparent, which is why the folks at
Speaker 1: Citadel and Robin Hood uh and many in the industry
Speaker 1: are pushing more for instant settlements of trades. Dan, there
Speaker 1: is a lot of controversy and focus well I should
Speaker 1: say focus not necessarily controversy around payment for order flow.
Speaker 1: When you joined us on quick Take a few weeks ago,
Speaker 1: I asked you about payment for order flow because it
Speaker 1: is one of the ways that that you guys make money, right, Yes,
Speaker 1: it is. It's been around for a while. It's within
Speaker 1: the you know as well, within the rules. But for us,
Speaker 1: I think that the difference in terms of how we
Speaker 1: do it and maybe maybe the way some others do,
Speaker 1: is that for us, we're gearing and catering to the
Speaker 1: active trader, those folks where you know, pennies and fractions
Speaker 1: of pennies matter. Uh. So you know, we would be
Speaker 1: called out quicker than Robin Hood was for shutting up
Speaker 1: game stop if you know what we were doing was
Speaker 1: filling I'll cost summers at the best possible displayed price.
Speaker 1: There is a lot of activity that occurs in between
Speaker 1: the bit and the ask. So for us and for
Speaker 1: the routing that we that we do choose and we
Speaker 1: and that we choose select select to route to, it's
Speaker 1: important for us that those venues understand that price improvement
Speaker 1: is really the main driver. I'm really the main factor
Speaker 1: for the trading experience for our customers. UM. Okay. So
Speaker 1: there there were a lot of questions around payment for
Speaker 1: order flow, especially a little after one pm Eastern time,
Speaker 1: UM when one lawmaker in particular was asking Citadel's Griffin
Speaker 1: about about the practice. Um, are you at all concerned
Speaker 1: that in the wake of this, the SEC might change
Speaker 1: its rules around payment for order flow and how that
Speaker 1: could affect your business? It's it is a concern, but
Speaker 1: obviously if they're changing it for you know, for me,
Speaker 1: they're changing it for everyone. So you know, as a
Speaker 1: broker dealer and as someone who's going doing this for
Speaker 1: twenty plus years, we'll roll with those punches. What is
Speaker 1: the concern that you have And I understand that you know,
Speaker 1: playing with the retail investor, the individual investor, this is
Speaker 1: a benefit for you. So I just want to kind
Speaker 1: of put that out there, But what is the concern
Speaker 1: that you have that lawmakers come down somewhere on this
Speaker 1: process that will ultimately not impact the big guys, the
Speaker 1: big investors, but will the little investors. So some of
Speaker 1: the questions today were regarding around did Robin hood or
Speaker 1: broker's police the fact that these stocks that the g
Speaker 1: m E s and the A m c s of
Speaker 1: the world were being touted and pushed on social media,
Speaker 1: which I think is kind of preposterous, where you know
Speaker 1: this this gentleman who started this this Wall Street fests
Speaker 1: board and was one of the main guys behind these trades,
Speaker 1: were just sharing what he was doing. So my concern
Speaker 1: is sort of the overreaction and overreach where broker dealers
Speaker 1: would would would now be asked to, you know, monitor
Speaker 1: social media and and other things that are sort of
Speaker 1: outside the realm of what we normally do. But do
Speaker 1: we need to be concerned there's a little bit of
Speaker 1: a pump and dump. I mean, were these people really
Speaker 1: trading when it came to game? Stop thinking the fundamentals
Speaker 1: of this company and who knows, right, we don't know
Speaker 1: the future, But do we need to be a little
Speaker 1: bit smart and savvy here about that possibility. Well, you know,
Speaker 1: I'll ask the flip side of that is those people
Speaker 1: who were trading game stock at two fifty three D
Speaker 1: and three fifty if if if they had any indication
Speaker 1: of how the markets function, they would understand that they
Speaker 1: were trading into a momentum play where the bottom can
Speaker 1: fall at at any time. It's sort of buy or beware. Um.
Speaker 1: You know when you have when you have situations that
Speaker 1: diverge so far from uh, you know what we know
Speaker 1: to be reality as it relates to the company and
Speaker 1: its operations. Uh, you know, those are situations that I
Speaker 1: think people are you know, they need to be a
Speaker 1: little bit more aware of, you know, what what they're
Speaker 1: doing and the fact that they committing capital at risk. Um,
Speaker 1: there is a there is the potential to lose that. Dan,
Speaker 1: we only have like ten seconds for this wors worst
Speaker 1: case scenario. On the other side of this, you got
Speaker 1: really twenty five. I'm going to give you a worst
Speaker 1: case scenario is extra regulation that doesn't get to the
Speaker 1: core of what they're trying to mitigate, uh, and just
Speaker 1: creates unnecessary and unwanted burden on the industry, which could
Speaker 1: potentially have effects on liquidity and the way that the
Speaker 1: capital markets function in a you know, liquid and orderly way.
Speaker 1: Good stuff. Thank you so much, really appreciate it. Dan Pipotone,
Speaker 1: co founder Trade zero America on the phone from Brooklyn.
Speaker 1: What are you aryl keeping me honest with the timing? Well,
Speaker 1: you know a little bit more and hease it. He
Speaker 1: talks pretty quickly. Thanks for listening to Bloomberg Business Week.
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