1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,280 Speaker 1: at Bloomberg dot com slash podcast Now. I'm very happy 7 00:00:22,280 --> 00:00:24,799 Speaker 1: to have Neil Grossman here with me in the studio. 8 00:00:24,920 --> 00:00:27,680 Speaker 1: He is the co founder UM and a former c 9 00:00:27,920 --> 00:00:31,080 Speaker 1: i O of t KNNG Capital. He's spent two decades 10 00:00:31,120 --> 00:00:34,800 Speaker 1: in the financial industry as a prop trader, asset manager, 11 00:00:34,920 --> 00:00:39,520 Speaker 1: market maker. UM advised the Norwegian Central Bank, among other things. 12 00:00:39,920 --> 00:00:44,080 Speaker 1: UM and UH, I want to just start the conversation 13 00:00:44,120 --> 00:00:47,600 Speaker 1: off on what happened that we're at this point before 14 00:00:47,600 --> 00:00:49,960 Speaker 1: we get to what we need to do to fix it, 15 00:00:49,960 --> 00:00:51,640 Speaker 1: because a lot of people have been saying it's the 16 00:00:51,640 --> 00:00:56,000 Speaker 1: COVID stimulus that drove this inflation that got us here, UM, 17 00:00:56,040 --> 00:00:59,720 Speaker 1: but a new friend of mine, from an anarchist from Twitter, 18 00:00:59,800 --> 00:01:03,280 Speaker 1: has suggested, and I think she's right, that it's really 19 00:01:03,360 --> 00:01:08,240 Speaker 1: the original quantitative easing that got us in this spot. 20 00:01:08,240 --> 00:01:12,160 Speaker 1: We've never gotten the hangover from that high. Um, I 21 00:01:12,160 --> 00:01:13,920 Speaker 1: would say you have to actually go back a little further. 22 00:01:14,000 --> 00:01:17,680 Speaker 1: Mat The original sin honestly was Alan Greenspan and the 23 00:01:17,880 --> 00:01:22,840 Speaker 1: irrational exuberant speech and the concept and the concept that 24 00:01:22,920 --> 00:01:26,039 Speaker 1: you were going to give the market a put if 25 00:01:26,080 --> 00:01:28,800 Speaker 1: they weren't if the stock market went down. And so 26 00:01:28,880 --> 00:01:31,399 Speaker 1: the FED moved into a situation where I call them 27 00:01:31,400 --> 00:01:34,959 Speaker 1: a central asset manager, They're not a central bank, and 28 00:01:35,080 --> 00:01:41,720 Speaker 1: so policy became asymmetrically accommodating, and they were very reluctant 29 00:01:42,000 --> 00:01:44,960 Speaker 1: to to to to remove it. Is that over? Now? 30 00:01:45,040 --> 00:01:47,800 Speaker 1: Is the Fed put done? Because that's what everyone's saying, Well, 31 00:01:47,840 --> 00:01:50,800 Speaker 1: I mean it's still there right now. Seventy basis points 32 00:01:50,880 --> 00:01:53,200 Speaker 1: is not? Is still? I mean they should have gone 33 00:01:53,280 --> 00:01:57,640 Speaker 1: probably three yesterday. I mean, let's let's take I know 34 00:01:57,640 --> 00:02:00,600 Speaker 1: we're getting off subject quickly, but um, the idea that 35 00:02:00,640 --> 00:02:02,160 Speaker 1: you have a two to two and a half percent 36 00:02:02,240 --> 00:02:04,440 Speaker 1: neutral rate at this point within not eight or nine 37 00:02:04,480 --> 00:02:07,200 Speaker 1: percent as they quote the inflation rate. If you want 38 00:02:07,240 --> 00:02:09,920 Speaker 1: to compare this to the seventies, by the way, and 39 00:02:09,919 --> 00:02:12,680 Speaker 1: and use the methodology that was in place back then, 40 00:02:12,720 --> 00:02:14,440 Speaker 1: this rate would be a lot higher. In any event, 41 00:02:15,480 --> 00:02:19,000 Speaker 1: neutral depending on you know who you want to speak to. 42 00:02:19,720 --> 00:02:22,960 Speaker 1: Using more objective measures would probably be between at this 43 00:02:23,000 --> 00:02:26,639 Speaker 1: point five and seven. And given the type of inflation 44 00:02:26,680 --> 00:02:30,239 Speaker 1: we have, in theory, it's supposed to be restrictive. So 45 00:02:30,360 --> 00:02:33,680 Speaker 1: they are still providing accommodation. They still have not started 46 00:02:33,680 --> 00:02:37,200 Speaker 1: to see their balance sheet reduced. So, you know, seventy 47 00:02:37,240 --> 00:02:40,880 Speaker 1: five was nice, but it's not enough. So so neil Um, 48 00:02:41,240 --> 00:02:43,480 Speaker 1: if you think about something more aggressive, you suggested maybe 49 00:02:44,120 --> 00:02:47,200 Speaker 1: basis points or something along those lines. Clearly, this Federal 50 00:02:47,240 --> 00:02:50,560 Speaker 1: Reserve is trying to I guess balance, you know, fighting 51 00:02:50,600 --> 00:02:54,359 Speaker 1: inflation without pushing the country into a recession or two 52 00:02:54,400 --> 00:02:56,880 Speaker 1: deep of a recession. How do you think about that 53 00:02:56,919 --> 00:02:59,200 Speaker 1: balancing act? Well, I think the fact is that at 54 00:02:59,200 --> 00:03:01,280 Speaker 1: this point it's very late to worry about the the 55 00:03:01,320 --> 00:03:05,640 Speaker 1: economic concept quinces to growth and employment. As a general matter, 56 00:03:05,960 --> 00:03:08,480 Speaker 1: they have a dual mandate and basically, and this is 57 00:03:08,520 --> 00:03:10,080 Speaker 1: one of the things that have gone over time, they've 58 00:03:10,120 --> 00:03:13,040 Speaker 1: totally thrown that out the door. We have an enormous 59 00:03:13,120 --> 00:03:15,560 Speaker 1: rate of inflation and if you want to measure the 60 00:03:15,639 --> 00:03:18,160 Speaker 1: impact of what eight or nine percent or I guess 61 00:03:18,160 --> 00:03:20,120 Speaker 1: we'll have probably six to seven percent in place in 62 00:03:20,200 --> 00:03:22,640 Speaker 1: two years in a row. I mean, that's a couple 63 00:03:22,639 --> 00:03:26,040 Speaker 1: of trillion dollar consequence to this economy. And the longer 64 00:03:26,080 --> 00:03:30,680 Speaker 1: you go without allowing, without removing the price pressures of that, 65 00:03:30,720 --> 00:03:33,680 Speaker 1: the worstest is going to get. In my view, to 66 00:03:33,720 --> 00:03:35,960 Speaker 1: be honest with you, UM, I think what they should 67 00:03:36,000 --> 00:03:40,120 Speaker 1: have done yesterday would have been maybe one percent, honestly 68 00:03:40,120 --> 00:03:42,120 Speaker 1: three percent someone extreme. But I think they should have 69 00:03:42,160 --> 00:03:44,880 Speaker 1: started immediately reducing the balance sheet and announced it could 70 00:03:44,880 --> 00:03:47,000 Speaker 1: have been done at a slower pace. Remember, they haven't 71 00:03:47,000 --> 00:03:50,280 Speaker 1: even started to to indicate they're going to sell. They're 72 00:03:50,320 --> 00:03:52,640 Speaker 1: gonna let it run off. At this point, the balance 73 00:03:52,680 --> 00:03:55,240 Speaker 1: sheet is and that goes back to Matt's first question. 74 00:03:55,960 --> 00:03:58,880 Speaker 1: Quantitative easing, which I apologize I use referred to as 75 00:03:58,960 --> 00:04:03,200 Speaker 1: q s UM is a very bad idea. The only 76 00:04:03,280 --> 00:04:06,920 Speaker 1: reason for for that, in my opinion, is to actually 77 00:04:06,960 --> 00:04:09,840 Speaker 1: deal with a freezing of liquidity in the market. And 78 00:04:09,920 --> 00:04:11,880 Speaker 1: that happened to no way, and that's fine, but they 79 00:04:11,880 --> 00:04:15,560 Speaker 1: should have immediately begun to remove that as soon as 80 00:04:15,760 --> 00:04:18,560 Speaker 1: as soon as the liquidity mechanism began to function. I mean, 81 00:04:18,600 --> 00:04:21,280 Speaker 1: I think we can all we can appreciate, maybe not all, 82 00:04:21,320 --> 00:04:24,480 Speaker 1: but Paul and I can appreciate your ideology here. However, 83 00:04:24,680 --> 00:04:29,039 Speaker 1: given the political constraints that this independent FED faces and 84 00:04:29,080 --> 00:04:31,360 Speaker 1: I'm using air quotes for those of you can't see me, 85 00:04:31,839 --> 00:04:35,719 Speaker 1: which is all of you, given those political constraints, Uh, 86 00:04:36,040 --> 00:04:38,560 Speaker 1: how do you respond as an investor? You know they're 87 00:04:38,560 --> 00:04:40,880 Speaker 1: not going to raise three basis points? Now, this isn't 88 00:04:40,880 --> 00:04:43,400 Speaker 1: Paul Volker, It's not the seventies or eighties, right, So 89 00:04:43,800 --> 00:04:46,360 Speaker 1: what what do you do as an investor right now? Well, 90 00:04:46,560 --> 00:04:49,000 Speaker 1: it's a general metal. Look, it's funny I've started that 91 00:04:49,120 --> 00:04:52,080 Speaker 1: I've been short. I wasn't short enough, but I've certainly 92 00:04:52,120 --> 00:04:54,880 Speaker 1: had a reasonable protection on, but not as much as 93 00:04:54,880 --> 00:04:56,680 Speaker 1: I wanted. Because I call the FED the enemy of 94 00:04:56,720 --> 00:05:00,080 Speaker 1: the rational, They've been very, very difficult to a is 95 00:05:00,200 --> 00:05:03,800 Speaker 1: to pate if you wanted to behave and and minimize 96 00:05:03,920 --> 00:05:07,120 Speaker 1: or you know, have a reasonable risk profile. At this point, 97 00:05:07,640 --> 00:05:10,800 Speaker 1: I think there are things that are opportunistically available if 98 00:05:10,839 --> 00:05:12,800 Speaker 1: you want a little bit of risk. Um, if you 99 00:05:12,839 --> 00:05:14,839 Speaker 1: have too much risk on, you better be careful because 100 00:05:14,839 --> 00:05:17,800 Speaker 1: there's certainly a reasonable chance we keep going down in 101 00:05:17,839 --> 00:05:20,480 Speaker 1: the short run. How much further do you think, by 102 00:05:20,480 --> 00:05:22,200 Speaker 1: the way, Neil, I mean, considering the fact that I 103 00:05:22,240 --> 00:05:24,240 Speaker 1: think we're probably close to the shorter term bottom with 104 00:05:24,400 --> 00:05:26,279 Speaker 1: me my view, if you want to take my view 105 00:05:26,279 --> 00:05:29,400 Speaker 1: on longer term, I tell people I have a patriotically 106 00:05:29,480 --> 00:05:33,200 Speaker 1: optimistic target for the for the SMP of seventeen seventy six, 107 00:05:34,640 --> 00:05:37,080 Speaker 1: which is way off right, I mean, But but let 108 00:05:37,080 --> 00:05:39,680 Speaker 1: me just say one thing on that mat just for 109 00:05:39,760 --> 00:05:41,840 Speaker 1: listeners who don't know. Right now we're looking at SMP, 110 00:05:43,160 --> 00:05:45,200 Speaker 1: so it's it's a long way down. But but you 111 00:05:45,200 --> 00:05:47,200 Speaker 1: have to understand. One of the main factors and how 112 00:05:47,240 --> 00:05:50,239 Speaker 1: you value with stock or an asset is the cost 113 00:05:50,320 --> 00:05:54,200 Speaker 1: of money. And for equities, which are the longest duration asset. Theoretically, 114 00:05:54,200 --> 00:05:58,080 Speaker 1: the twenty year bond is a very good indicator of 115 00:05:58,080 --> 00:05:59,960 Speaker 1: the type of discount. Right, you can throw a spread 116 00:06:00,000 --> 00:06:03,360 Speaker 1: on if you want. The long bond is still about 117 00:06:03,800 --> 00:06:06,600 Speaker 1: one thirty, which means your thirty percent just a potential 118 00:06:06,680 --> 00:06:08,920 Speaker 1: drop just to get to a six percent yield, which 119 00:06:08,920 --> 00:06:10,800 Speaker 1: is at least where it belongs to. Now, all right, now, 120 00:06:10,839 --> 00:06:13,800 Speaker 1: we gotta have you back on UM very soon. Really 121 00:06:13,839 --> 00:06:18,360 Speaker 1: appreciate you coming into the Bloomberg Interactive Broker Studio. Neil Grossman, 122 00:06:18,440 --> 00:06:20,720 Speaker 1: their co founder and former ciot t K A N 123 00:06:20,760 --> 00:06:27,839 Speaker 1: g Capital, also advisor to the Nougust Bank. All right, 124 00:06:27,880 --> 00:06:30,120 Speaker 1: let's bring in Brett Downley. He is a president of 125 00:06:30,240 --> 00:06:33,960 Speaker 1: Spectr Markets. UH. A lot going on in the marketplace here, Brent. 126 00:06:34,080 --> 00:06:35,760 Speaker 1: Just in the last forty eight hours we've had to 127 00:06:35,880 --> 00:06:39,440 Speaker 1: central banks really moving pretty aggressively here, So let's start 128 00:06:39,440 --> 00:06:42,799 Speaker 1: with this US Federal Reserve seventy five basis points yesterday 129 00:06:43,200 --> 00:06:45,919 Speaker 1: can perceive by I think many market participants as a 130 00:06:45,920 --> 00:06:48,320 Speaker 1: pretty bold move. But we had a recent guest on 131 00:06:48,360 --> 00:06:50,680 Speaker 1: Brent that said they should have been even more aggressive. 132 00:06:51,080 --> 00:06:53,960 Speaker 1: What did you make of yesterday's news? Sure, well, I 133 00:06:54,000 --> 00:06:56,000 Speaker 1: agree with that, but the reason the market is not 134 00:06:56,080 --> 00:06:58,880 Speaker 1: really reacting is that that was leaked, um a couple 135 00:06:58,880 --> 00:07:01,880 Speaker 1: of days in advance. So it's You've actually caught me 136 00:07:01,880 --> 00:07:05,440 Speaker 1: at a really interesting time because I've been bullished the 137 00:07:05,480 --> 00:07:09,240 Speaker 1: dollar for about the last three months, mostly on central 138 00:07:09,240 --> 00:07:12,880 Speaker 1: bank divergence. So what you had was a very hawkish 139 00:07:12,920 --> 00:07:15,640 Speaker 1: FED pivoting doing q T, and then you had a 140 00:07:15,640 --> 00:07:17,920 Speaker 1: lot of other central banks that were very reticent to 141 00:07:17,960 --> 00:07:21,559 Speaker 1: do anything um. For example, even the Bank of England 142 00:07:21,600 --> 00:07:24,760 Speaker 1: who was hiking, was doing so in a very hesitant way. 143 00:07:24,800 --> 00:07:27,360 Speaker 1: You had the b O J not doing anything, Swiss 144 00:07:27,480 --> 00:07:31,680 Speaker 1: National Bank not doing anything. And now actually my view 145 00:07:31,760 --> 00:07:35,440 Speaker 1: has changed today. Um, I think we're we could be 146 00:07:35,520 --> 00:07:37,679 Speaker 1: at the peak for the dollar as now we're getting 147 00:07:38,120 --> 00:07:41,880 Speaker 1: We had divergence before and now we're getting convergence. So 148 00:07:42,200 --> 00:07:45,040 Speaker 1: we had the SNB, the Swiss National Bank hiked fifty 149 00:07:45,040 --> 00:07:49,200 Speaker 1: basis points overnight, which was a big surprise. And then 150 00:07:49,320 --> 00:07:52,280 Speaker 1: we also have the b o J tonight potentially moving 151 00:07:52,280 --> 00:07:55,720 Speaker 1: their yield curve target um. And then you also have 152 00:07:55,840 --> 00:07:58,360 Speaker 1: the e c B saying they don't really want any 153 00:07:58,360 --> 00:08:01,080 Speaker 1: more currency weakness and they're trying to build some kind 154 00:08:01,120 --> 00:08:04,600 Speaker 1: of anti fragmentation tool so that they can high rate 155 00:08:04,760 --> 00:08:08,280 Speaker 1: while keeping the peripheral debt um sell off in check. 156 00:08:08,760 --> 00:08:11,800 Speaker 1: So what you have now is convergence and that that 157 00:08:11,960 --> 00:08:14,280 Speaker 1: I think could be bad for the dollar. Now, did 158 00:08:14,320 --> 00:08:17,040 Speaker 1: you say you've been short the dollar for three months? No, 159 00:08:17,160 --> 00:08:20,000 Speaker 1: I've been bullish. Okay, okay, So you've been bullish dollar 160 00:08:20,040 --> 00:08:24,240 Speaker 1: and now you might be ready to turn I'm just wondering, mechanically, Brent, 161 00:08:24,320 --> 00:08:28,760 Speaker 1: how you put that trade on. So the simplest way, 162 00:08:28,800 --> 00:08:32,840 Speaker 1: I mean, I've been trading spot currency since really the 163 00:08:32,880 --> 00:08:35,839 Speaker 1: simplest way to do the trades is simply to just 164 00:08:36,360 --> 00:08:39,360 Speaker 1: buy or sell the currency outright. UM. So you can 165 00:08:39,360 --> 00:08:42,920 Speaker 1: do it through futures, through cash on retail broker systems. 166 00:08:43,280 --> 00:08:46,080 Speaker 1: You know, institutions tend to do it UM in the 167 00:08:46,080 --> 00:08:49,040 Speaker 1: wholesale market, in the OTC market. But you don't need 168 00:08:49,120 --> 00:08:51,760 Speaker 1: to do anything complicated. You just to me. You just 169 00:08:51,840 --> 00:08:55,040 Speaker 1: can simply sell dollars. People will also do it through 170 00:08:55,559 --> 00:08:59,400 Speaker 1: derivatives like options. But because the moves have been so 171 00:08:59,520 --> 00:09:03,320 Speaker 1: wild lately, um EFX ball is very high right now. 172 00:09:03,320 --> 00:09:08,080 Speaker 1: It's it's a multi month highs so it's very expensive. UM. 173 00:09:08,120 --> 00:09:10,040 Speaker 1: Just to give you a flavor. Even if this doesn't 174 00:09:10,040 --> 00:09:13,840 Speaker 1: mean anything, it should mean something relatively speaking, that overnight 175 00:09:13,920 --> 00:09:17,800 Speaker 1: deli and volatility usually trades around ten percent, and right 176 00:09:17,800 --> 00:09:20,959 Speaker 1: now overnight it's trading at because of the Bank of 177 00:09:21,040 --> 00:09:24,160 Speaker 1: Japan meeting, and because everything's just been going wild in 178 00:09:24,200 --> 00:09:26,199 Speaker 1: the up. By the way, what do you expect from 179 00:09:26,200 --> 00:09:29,880 Speaker 1: the Bank of Japan? This has been so fascinating to watch, 180 00:09:29,920 --> 00:09:32,920 Speaker 1: And I regret getting a mortgage from my new house 181 00:09:32,920 --> 00:09:34,520 Speaker 1: at three and a quarter percent. I should have just 182 00:09:34,520 --> 00:09:39,320 Speaker 1: shorted ggbs. Yeah, so short g gbs is a popular 183 00:09:39,360 --> 00:09:42,880 Speaker 1: trade right now. But it also makes sense because very 184 00:09:42,920 --> 00:09:45,839 Speaker 1: similar to the Reserve Bank of Australia. The Bank of 185 00:09:45,920 --> 00:09:49,160 Speaker 1: Japan's trying to hold interest rates at an out of 186 00:09:49,160 --> 00:09:52,640 Speaker 1: equilibrium rate, So they're trying to hold the tenure rate 187 00:09:52,640 --> 00:09:55,720 Speaker 1: at twenty five basis points, and really it should probably 188 00:09:55,760 --> 00:09:58,680 Speaker 1: be triple that. There should be at seventy five basis points. 189 00:09:59,120 --> 00:10:02,720 Speaker 1: And there's a point where the central banks eventually lose 190 00:10:02,800 --> 00:10:05,000 Speaker 1: the battle. So the rb A lost the battle, the 191 00:10:05,000 --> 00:10:08,200 Speaker 1: Swiss National Bank lost the battle. The central banks are 192 00:10:08,320 --> 00:10:11,640 Speaker 1: very powerful, but they're not omnipotent. So I think we're 193 00:10:11,679 --> 00:10:14,000 Speaker 1: at the point now where the Bank of Japan is 194 00:10:14,000 --> 00:10:16,839 Speaker 1: going to have to ease off. There's no theoretical limit. 195 00:10:16,920 --> 00:10:20,199 Speaker 1: They can do it forever, but the release valve if 196 00:10:20,240 --> 00:10:23,240 Speaker 1: they keep rates here is a weak er en. And 197 00:10:23,360 --> 00:10:26,320 Speaker 1: now they've explicitly said that they no longer favor a 198 00:10:26,320 --> 00:10:29,080 Speaker 1: week or en, which is something new. I mean, we've 199 00:10:29,080 --> 00:10:32,560 Speaker 1: had all kinds of historic stuff happening in central banks 200 00:10:32,600 --> 00:10:36,199 Speaker 1: and and in the FX market, and so if you recall, 201 00:10:36,400 --> 00:10:40,320 Speaker 1: starting in Japan was trying to weaken the end that 202 00:10:40,400 --> 00:10:43,840 Speaker 1: was the abonomics plan, and they've succeeded, you know, with 203 00:10:43,880 --> 00:10:49,080 Speaker 1: flying colors. They took delien from thirty five, and now 204 00:10:49,120 --> 00:10:52,520 Speaker 1: they're kind of saying enough is enough, no moss. So 205 00:10:52,800 --> 00:10:55,400 Speaker 1: to me that means that they need to move. Uh, 206 00:10:55,520 --> 00:10:58,800 Speaker 1: they need to allow yields to go higher. And so 207 00:10:58,920 --> 00:11:01,280 Speaker 1: whether that happens to night or not, I mean then 208 00:11:01,320 --> 00:11:03,640 Speaker 1: it comes down to more of a tactical decision by 209 00:11:03,679 --> 00:11:06,400 Speaker 1: the b o J. So there seems to be I 210 00:11:06,400 --> 00:11:09,000 Speaker 1: would say about a thirty chance they do it tonight, 211 00:11:09,520 --> 00:11:12,200 Speaker 1: but I think it's almost locked in that they do 212 00:11:12,240 --> 00:11:14,640 Speaker 1: it in the next three months. And so the timing 213 00:11:14,679 --> 00:11:18,400 Speaker 1: almost doesn't matter because even if they are pinning that 214 00:11:18,440 --> 00:11:21,640 Speaker 1: one ten year yield, the rest um the rest of 215 00:11:21,679 --> 00:11:24,640 Speaker 1: the market will just completely come unhinted, so people will 216 00:11:24,679 --> 00:11:27,959 Speaker 1: sell g GB futures and anything that's not nailed down 217 00:11:27,960 --> 00:11:30,679 Speaker 1: by the b o J. Hey, Brent, just real quick, 218 00:11:30,720 --> 00:11:33,760 Speaker 1: thirty seconds. How long would a dollar weakness call be? 219 00:11:34,000 --> 00:11:38,000 Speaker 1: Do you think so? I think it could be protracted. 220 00:11:38,120 --> 00:11:42,280 Speaker 1: So the dollar strength started with the there is no 221 00:11:42,360 --> 00:11:46,240 Speaker 1: alternative to US tech um and obviously that's over, and 222 00:11:46,280 --> 00:11:48,920 Speaker 1: then it continued because US rates were moving so much 223 00:11:48,920 --> 00:11:51,439 Speaker 1: more than the rest of the world. So now neither 224 00:11:51,559 --> 00:11:55,400 Speaker 1: of the drivers of dollar strength really are are happening 225 00:11:55,480 --> 00:11:57,520 Speaker 1: right now. So I think this could be a meaningful 226 00:11:57,720 --> 00:12:00,640 Speaker 1: turn in the dollar for H. It could us all 227 00:12:00,679 --> 00:12:04,000 Speaker 1: of age two. Alright, good stuff, Brent Donley, really appreciate 228 00:12:04,000 --> 00:12:07,200 Speaker 1: you coming on. I learned a lot UH today Brent Donley, 229 00:12:07,240 --> 00:12:10,480 Speaker 1: President UH Spector Markets. He had been bullish on the 230 00:12:10,559 --> 00:12:15,760 Speaker 1: US dollar turning negative just today actually UH in response 231 00:12:15,800 --> 00:12:18,119 Speaker 1: to what we've seen from a lot of the UH 232 00:12:18,160 --> 00:12:20,600 Speaker 1: central banks across the world. Again, the Swiss National Bank 233 00:12:20,640 --> 00:12:25,280 Speaker 1: kind of surprising the marketplace. Totally totally surprising. Yeah. Absolutely, 234 00:12:25,280 --> 00:12:27,040 Speaker 1: that's kind of what I woke up to here listening 235 00:12:27,040 --> 00:12:32,280 Speaker 1: to surveillance UH so again concerted effort to raise rates here. 236 00:12:32,320 --> 00:12:37,120 Speaker 1: So we'll have to see how that plays out. You're 237 00:12:37,160 --> 00:12:39,959 Speaker 1: alive from the Gaylord Texan Convention Center in Dallas, Texas. 238 00:12:40,559 --> 00:12:43,840 Speaker 1: Ben Y Melon Pershing Insight Conference here joining us today 239 00:12:44,040 --> 00:12:48,440 Speaker 1: Anthony Sessin, Senior Investment Strategistic Crane Chairs and we so 240 00:12:48,520 --> 00:12:51,520 Speaker 1: happy to have Anthony here with us in the huge 241 00:12:51,559 --> 00:12:53,400 Speaker 1: exhibition hall here because we want to switch gears a 242 00:12:53,400 --> 00:12:56,400 Speaker 1: little bit and talk about China. We've been so focused 243 00:12:56,400 --> 00:12:58,880 Speaker 1: on the US, the Federal Reserve, other central banks, what's 244 00:12:58,880 --> 00:13:01,440 Speaker 1: going on with inflation. But we gotta get an update, 245 00:13:01,480 --> 00:13:03,880 Speaker 1: gotta get a handle on what's going on in China, 246 00:13:03,960 --> 00:13:05,880 Speaker 1: and Anthony, I love where to give us your thirty 247 00:13:05,880 --> 00:13:08,680 Speaker 1: thousand foot view with what's going on in China with 248 00:13:08,760 --> 00:13:12,040 Speaker 1: their economy, with COVID, with we know we have a 249 00:13:12,040 --> 00:13:15,439 Speaker 1: presidential election coming up, a lot going on there. As 250 00:13:15,480 --> 00:13:17,079 Speaker 1: you said, thank you Paul for having me. There's a 251 00:13:17,160 --> 00:13:19,880 Speaker 1: lot going on, a lot to unpack in China. That's 252 00:13:19,880 --> 00:13:21,760 Speaker 1: why you have to keep on top of it. Right. So, 253 00:13:21,760 --> 00:13:25,280 Speaker 1: so all the global uh events we're seeing now with 254 00:13:25,280 --> 00:13:29,640 Speaker 1: regards to rates, it's definitely impacting markets globally, especially with 255 00:13:29,679 --> 00:13:31,880 Speaker 1: regards to currency. Right. But but if you look at 256 00:13:31,960 --> 00:13:35,200 Speaker 1: China specifically, and China entered this year with with the 257 00:13:35,240 --> 00:13:38,080 Speaker 1: world to stimulate and lift growth. It's an important here 258 00:13:38,080 --> 00:13:41,280 Speaker 1: for China, and it was working. They cut rates, They 259 00:13:41,280 --> 00:13:46,520 Speaker 1: did many uh stimulative actions uh throughout the year, throughout 260 00:13:46,600 --> 00:13:48,720 Speaker 1: the beginning of the year to kind of lift growth 261 00:13:48,800 --> 00:13:53,400 Speaker 1: in many different ways, cutting taxes, lifting property, uh, you know, 262 00:13:53,960 --> 00:13:58,080 Speaker 1: giving facilities for property. But then when the lockdowns happened, 263 00:13:58,080 --> 00:14:00,280 Speaker 1: it kind of uh you know, hit prog rest a 264 00:14:00,320 --> 00:14:03,400 Speaker 1: little bit. So we're seeing now China stimulate even more. Right. 265 00:14:03,520 --> 00:14:07,000 Speaker 1: In addition to that, uh, you know, the consumer is 266 00:14:07,000 --> 00:14:09,800 Speaker 1: is now kind of rebounding a little bit. And um 267 00:14:09,880 --> 00:14:12,760 Speaker 1: and uh, you know, the lockdowns has impacted growth, but 268 00:14:12,880 --> 00:14:15,040 Speaker 1: now we're starting to see more pent up demand because 269 00:14:15,320 --> 00:14:18,520 Speaker 1: income has not been impacted in China as much. Last 270 00:14:18,640 --> 00:14:20,400 Speaker 1: year it grew at nine percent. This year is growing 271 00:14:20,400 --> 00:14:22,880 Speaker 1: at six percent. So you're gonna see that money kind 272 00:14:22,880 --> 00:14:27,200 Speaker 1: of trickle into the economy as lockdowns cease and at 273 00:14:27,320 --> 00:14:29,840 Speaker 1: stimulus kind of trickle in. Well, Anthony, today you and 274 00:14:29,880 --> 00:14:33,080 Speaker 1: I heard this Grapevine, Texas at this huge convention, lots 275 00:14:33,120 --> 00:14:36,920 Speaker 1: of people, very few to no mask seems to be 276 00:14:37,040 --> 00:14:40,840 Speaker 1: kind of back to normal. Yet in China, Um, they're 277 00:14:40,880 --> 00:14:45,480 Speaker 1: not there. And what is the I guess the strategy 278 00:14:45,560 --> 00:14:49,000 Speaker 1: behind the government's handling of COVID And how do you 279 00:14:49,000 --> 00:14:51,560 Speaker 1: think it may evolve? Yeah, no, absolutely, that's the big 280 00:14:51,560 --> 00:14:53,560 Speaker 1: wild card a little bit in China. Right, So China 281 00:14:53,640 --> 00:14:56,360 Speaker 1: have a very strict policy with regards to to COVID. 282 00:14:56,400 --> 00:14:59,040 Speaker 1: It started with a zero policy where kind of lockdown 283 00:14:59,160 --> 00:15:02,400 Speaker 1: Shanghahi for sixty days or more that kind of impacted 284 00:15:02,440 --> 00:15:05,560 Speaker 1: people living in the area, impact its supply chains across 285 00:15:05,600 --> 00:15:09,720 Speaker 1: the board, especially with the electric vehicles and another supply 286 00:15:09,840 --> 00:15:12,560 Speaker 1: chains that are located in in Chunk High. But then 287 00:15:12,600 --> 00:15:14,360 Speaker 1: when it happened in Beijing, that kind of moved to 288 00:15:14,440 --> 00:15:17,440 Speaker 1: this dynamic policy right where they were kind of targeting 289 00:15:17,720 --> 00:15:21,920 Speaker 1: specific areas, you know, doing testing proactively, trying to be 290 00:15:22,560 --> 00:15:26,000 Speaker 1: more cognizant of the economic impact. Right, But that's still 291 00:15:26,040 --> 00:15:28,000 Speaker 1: still causing a lot of issues. Right. Omicron is a 292 00:15:28,040 --> 00:15:31,600 Speaker 1: little bit different. It passes through very quickly. It's really hard. 293 00:15:31,640 --> 00:15:33,600 Speaker 1: Like in Beijing, we had this one party at a 294 00:15:33,600 --> 00:15:36,800 Speaker 1: pub that kind of uh, you know, resulting in twenty 295 00:15:36,880 --> 00:15:38,920 Speaker 1: six cases, right, and that's gonna be hard to contain 296 00:15:38,960 --> 00:15:41,280 Speaker 1: without a lockdown. So so, you know, it's a little 297 00:15:41,320 --> 00:15:43,960 Speaker 1: bit hard situation, especially in a political year where China 298 00:15:44,040 --> 00:15:47,240 Speaker 1: doesn't want to see people you know, uh sick or 299 00:15:47,320 --> 00:15:50,240 Speaker 1: lined up at the hospital. Right. So but I believe 300 00:15:50,280 --> 00:15:53,240 Speaker 1: they're going to have to adjust that policy soon, uh, 301 00:15:53,280 --> 00:15:54,840 Speaker 1: you know, in order to be able to to meet 302 00:15:54,880 --> 00:15:57,360 Speaker 1: their economic targets. How easy is it for China to 303 00:15:57,400 --> 00:16:04,160 Speaker 1: control economic growth? It is, It is easier than other places. 304 00:16:04,240 --> 00:16:06,680 Speaker 1: If you were right, it's a command economy. China has 305 00:16:06,720 --> 00:16:10,480 Speaker 1: the ability to kind of redirect resources, redirect capital to 306 00:16:10,600 --> 00:16:13,440 Speaker 1: specific industries they want in an easier way than we 307 00:16:13,480 --> 00:16:16,160 Speaker 1: have it here in the US or or kind of 308 00:16:16,240 --> 00:16:18,680 Speaker 1: in Europe. They have a lot of tools, huge reserves, 309 00:16:18,720 --> 00:16:21,400 Speaker 1: they have a lot of policy levers to pull, right, 310 00:16:21,440 --> 00:16:23,920 Speaker 1: and they have a vibrant consumer economy, right, so if 311 00:16:23,920 --> 00:16:25,600 Speaker 1: they want to, they've done it in the past, they 312 00:16:25,600 --> 00:16:28,000 Speaker 1: can do it in the future. Although you know, as 313 00:16:28,000 --> 00:16:31,120 Speaker 1: the economy becomes bigger, it becomes harder. Right. But we've 314 00:16:31,160 --> 00:16:33,880 Speaker 1: seen this year's numbers start to turn around, right, Like 315 00:16:33,960 --> 00:16:37,160 Speaker 1: property prices which were declining since the summer, we started 316 00:16:37,160 --> 00:16:39,840 Speaker 1: to see that turning around. We started seeing fixed acid 317 00:16:39,880 --> 00:16:43,520 Speaker 1: investments turning around. We started to see you know, a 318 00:16:43,560 --> 00:16:46,040 Speaker 1: lot of more interest in the economy, more people getting loans, 319 00:16:46,200 --> 00:16:48,920 Speaker 1: aggregate financing turning up. So China has a lot of 320 00:16:49,000 --> 00:16:51,960 Speaker 1: levers that can pull in terms of supporting its growth, 321 00:16:52,200 --> 00:16:56,040 Speaker 1: but lockdowns definitely kind of shuts down these levers very 322 00:16:56,120 --> 00:16:59,000 Speaker 1: quickly for an extended period of time. You know, at 323 00:16:59,000 --> 00:17:02,040 Speaker 1: any global Wall Street it's been focusing right fully so 324 00:17:02,200 --> 00:17:04,720 Speaker 1: on global energy prices and you know, we get w 325 00:17:04,760 --> 00:17:08,240 Speaker 1: tech cood oil was it over barrel? Uh it's now 326 00:17:08,320 --> 00:17:11,800 Speaker 1: pulled back here. But boy, if China fully reopens, that 327 00:17:11,960 --> 00:17:15,800 Speaker 1: adds a big source of demand there. How do you 328 00:17:15,880 --> 00:17:19,040 Speaker 1: view Chinese economy now in terms of how much of 329 00:17:19,080 --> 00:17:20,679 Speaker 1: it is reopened? How far do we have to go 330 00:17:20,760 --> 00:17:23,840 Speaker 1: to get fully reopened? Kind of where are we there? Yeah? 331 00:17:23,840 --> 00:17:27,159 Speaker 1: I know so so at some point I think thirty 332 00:17:28,240 --> 00:17:33,400 Speaker 1: GDP of of cities that contribute GDP was shut down, right, 333 00:17:33,440 --> 00:17:36,520 Speaker 1: So now it's a lot less Shanghai reopened, Beijing is 334 00:17:36,560 --> 00:17:39,080 Speaker 1: there's there are some spots there. So now we're probably 335 00:17:39,119 --> 00:17:41,480 Speaker 1: at like five to ten percent of GDP kind of 336 00:17:41,880 --> 00:17:43,879 Speaker 1: a little bit in in a in a lockdown, right, 337 00:17:43,920 --> 00:17:45,520 Speaker 1: So how far do we have to go? One is 338 00:17:45,560 --> 00:17:48,160 Speaker 1: you have to relax the policy just like here, right, 339 00:17:48,240 --> 00:17:50,480 Speaker 1: you kind of have to accept that that you know, 340 00:17:50,520 --> 00:17:52,960 Speaker 1: there's COVID, it's it's it's going to get people sick. 341 00:17:53,000 --> 00:17:55,520 Speaker 1: But with a vaccine, uh, you know, the symptoms are 342 00:17:55,520 --> 00:17:57,000 Speaker 1: going to be less. And the second thing, I think 343 00:17:57,119 --> 00:17:59,679 Speaker 1: China is going to need to push a vaccine that 344 00:17:59,840 --> 00:18:02,640 Speaker 1: is based on MR and a technology. Right today, their 345 00:18:02,680 --> 00:18:04,879 Speaker 1: cinovac is based on the on the previous, on the 346 00:18:04,880 --> 00:18:09,520 Speaker 1: past vaccine technologies, which is not as effective. And there 347 00:18:09,520 --> 00:18:13,119 Speaker 1: are multiple now companies by technology companies who are working 348 00:18:13,160 --> 00:18:16,280 Speaker 1: on this, but they're not there yet right. But but 349 00:18:16,440 --> 00:18:18,919 Speaker 1: other than that, we're seeing a lot of work from China. 350 00:18:19,080 --> 00:18:22,000 Speaker 1: Like now they're trying to under regulations on a platform economy, 351 00:18:22,080 --> 00:18:24,800 Speaker 1: so that's very good for China internet companies. They're pushing 352 00:18:24,960 --> 00:18:28,199 Speaker 1: with the policies green tech, green technology, They're pushing the 353 00:18:28,240 --> 00:18:31,400 Speaker 1: healthcare industry. So so they're putting a lot of work 354 00:18:31,440 --> 00:18:34,800 Speaker 1: into the new economy, into directing their economy to be positioned, 355 00:18:34,840 --> 00:18:37,119 Speaker 1: well positioned for the future. Right. And one of the 356 00:18:37,119 --> 00:18:39,520 Speaker 1: big things we're seeing now more interested it's trying to 357 00:18:39,640 --> 00:18:42,439 Speaker 1: China Internet. Yeah, it's interesting. You know, a lot of 358 00:18:42,520 --> 00:18:45,000 Speaker 1: US investors, through Ali Baba and through ten Cent, they 359 00:18:45,040 --> 00:18:48,840 Speaker 1: became very invested in exposed to China tech. It was 360 00:18:48,880 --> 00:18:50,960 Speaker 1: a great way to play the growth of the middle class. 361 00:18:50,960 --> 00:18:53,679 Speaker 1: And Ali Baba for example, Boy did they get a 362 00:18:53,760 --> 00:18:57,119 Speaker 1: rude awakening to what we all call China risk in 363 00:18:57,160 --> 00:18:59,719 Speaker 1: the you know, on the risk section of the perspectives. 364 00:19:00,600 --> 00:19:03,440 Speaker 1: That took me off guard how aggressively they clamped down 365 00:19:03,480 --> 00:19:07,919 Speaker 1: on the jack Miles of the world. Are they give 366 00:19:08,000 --> 00:19:09,239 Speaker 1: us a sense of where they are now? Are they 367 00:19:09,240 --> 00:19:11,800 Speaker 1: gonna lighten up here materially or is this the new 368 00:19:11,840 --> 00:19:15,480 Speaker 1: world order? You know? Absolutely so so look, uh, you know, 369 00:19:15,520 --> 00:19:18,680 Speaker 1: if you you have to understand China's culture and China's 370 00:19:18,720 --> 00:19:21,280 Speaker 1: view of how society of how they won't decide to 371 00:19:21,359 --> 00:19:23,520 Speaker 1: look right, and they have a very virtuous view of 372 00:19:23,560 --> 00:19:25,359 Speaker 1: how sight you should look like. They want to provide 373 00:19:25,400 --> 00:19:29,040 Speaker 1: free education, they want to provide free healthcare. Uh, you know, 374 00:19:29,119 --> 00:19:31,720 Speaker 1: they really care about about their their people, that want 375 00:19:31,760 --> 00:19:34,600 Speaker 1: to provide fairness because the gap between rich and poor 376 00:19:35,280 --> 00:19:37,360 Speaker 1: has been has been, you know, has widened a lot. 377 00:19:37,640 --> 00:19:40,480 Speaker 1: And they want to control this, not control, but regularly 378 00:19:40,560 --> 00:19:43,800 Speaker 1: this this digital economy that became huge, right and became 379 00:19:43,840 --> 00:19:45,960 Speaker 1: kind of too big to fail at some point. We're 380 00:19:45,960 --> 00:19:48,159 Speaker 1: trying to do that here right, Like we're seeing all 381 00:19:48,200 --> 00:19:52,720 Speaker 1: these bills come through through antitrust against Google, Amazon, right, Facebook. 382 00:19:53,080 --> 00:19:55,359 Speaker 1: We're seeing the same thing happening in Europe. But but China, 383 00:19:55,400 --> 00:19:58,320 Speaker 1: as a command economy, they're able to do it. Yeah. 384 00:19:58,359 --> 00:20:01,000 Speaker 1: So one thing we under estimated less or how aggressive 385 00:20:01,000 --> 00:20:02,960 Speaker 1: they were going to be, right, but they wanted to 386 00:20:03,000 --> 00:20:05,040 Speaker 1: go as far and get everything set up, and now 387 00:20:05,200 --> 00:20:07,560 Speaker 1: it looks like work. This is concluding and we've heard 388 00:20:07,600 --> 00:20:10,320 Speaker 1: it from multiple people high up to the chain to 389 00:20:10,400 --> 00:20:12,960 Speaker 1: the president chooching pit Okay, that's good stuff. Good stuff 390 00:20:12,960 --> 00:20:15,400 Speaker 1: in the Ali Bob and the other Chinese uh tech 391 00:20:15,440 --> 00:20:17,439 Speaker 1: owners as well. Anthony Saissein, thank you so much for 392 00:20:17,480 --> 00:20:20,840 Speaker 1: joining us here. Anthony Sacsen, Senior investment strategist at Crane 393 00:20:20,840 --> 00:20:23,399 Speaker 1: Share sign. You come to places that put a lot 394 00:20:23,480 --> 00:20:25,400 Speaker 1: of smart people together, you get to meet a lot 395 00:20:25,440 --> 00:20:27,159 Speaker 1: of smart, interesting people. So that was great to have 396 00:20:27,200 --> 00:20:33,320 Speaker 1: Anthony join us here. Probin, thanks so much for joining 397 00:20:33,400 --> 00:20:35,399 Speaker 1: us here. This is your first interview with American media 398 00:20:35,440 --> 00:20:39,760 Speaker 1: since becoming CEO elect. So congratulations there, good luck with 399 00:20:39,800 --> 00:20:42,879 Speaker 1: this economy. Um, tell us about as you come into 400 00:20:42,920 --> 00:20:45,480 Speaker 1: your new role here, what is your strategy? What's your 401 00:20:45,520 --> 00:20:48,560 Speaker 1: to do list? We've got a boy a really volatile 402 00:20:48,600 --> 00:20:50,240 Speaker 1: world out there, a lot of new things that people 403 00:20:50,320 --> 00:20:52,120 Speaker 1: have to deal with, whether it's coming back to work, 404 00:20:52,119 --> 00:20:54,440 Speaker 1: whether it's dealing with the remnants of the pandemic, whether 405 00:20:54,480 --> 00:20:57,919 Speaker 1: it's inflation. What you're to do list? Well, you know, 406 00:20:57,960 --> 00:21:00,280 Speaker 1: when you when you're when you're coming into a ce see, 407 00:21:00,280 --> 00:21:02,320 Speaker 1: you don't get to choose between all those things you do. 408 00:21:02,400 --> 00:21:03,719 Speaker 1: You got to do all of them. But look, let 409 00:21:03,720 --> 00:21:05,919 Speaker 1: me just start by saying thanks for being here. It's 410 00:21:05,960 --> 00:21:09,520 Speaker 1: great to have you here. Are being y Melon Pershing 411 00:21:09,640 --> 00:21:12,320 Speaker 1: Insight Conference is one of our flagship events. It's one 412 00:21:12,359 --> 00:21:14,960 Speaker 1: of the flagship events of the wealth industry. It's great 413 00:21:14,960 --> 00:21:16,439 Speaker 1: to have our clients here, is great to have you 414 00:21:16,520 --> 00:21:19,320 Speaker 1: here as well in Texas with us. So you think 415 00:21:19,320 --> 00:21:22,760 Speaker 1: about it here um being y Melon financial services industry, 416 00:21:22,760 --> 00:21:25,000 Speaker 1: it's been a great run. If if you've been an investor, 417 00:21:25,280 --> 00:21:28,680 Speaker 1: I came into the market in October ninety or June, 418 00:21:29,440 --> 00:21:30,960 Speaker 1: it's been nothing but up. I had a couple of 419 00:21:30,960 --> 00:21:32,840 Speaker 1: little bounces along the way. But now we're in a 420 00:21:32,920 --> 00:21:35,080 Speaker 1: world where it really is challenging at there when you 421 00:21:35,080 --> 00:21:38,120 Speaker 1: look at the financial markets, the bond markets, the equity markets, 422 00:21:38,240 --> 00:21:40,439 Speaker 1: whether you look at inflation, central banks, how do you 423 00:21:40,560 --> 00:21:43,560 Speaker 1: put that into context? Well, as a firm, we touch 424 00:21:43,600 --> 00:21:47,520 Speaker 1: about of all of the world's investible assets, so we 425 00:21:47,600 --> 00:21:50,640 Speaker 1: have that vantage point to really see what's going on, 426 00:21:51,119 --> 00:21:53,159 Speaker 1: and we're really listening to our clients. One of the 427 00:21:53,240 --> 00:21:55,640 Speaker 1: reasons why I'm here is really to talk to our 428 00:21:55,680 --> 00:21:58,920 Speaker 1: wealth advisors to understand what's going on in their worlds 429 00:21:58,960 --> 00:22:02,520 Speaker 1: and to really push the the concept of innovation in 430 00:22:02,560 --> 00:22:06,240 Speaker 1: the wealth tech space. There's so much going on listening 431 00:22:06,560 --> 00:22:10,800 Speaker 1: driving forward a lot of opportunity, and these volatile markets 432 00:22:11,080 --> 00:22:13,440 Speaker 1: are an important moment for us all to be saying, 433 00:22:13,440 --> 00:22:17,280 Speaker 1: connected to our clients, I wonder what your take is 434 00:22:17,560 --> 00:22:23,879 Speaker 1: robbing on crypto. It's been an incredible crash to watch UM, 435 00:22:23,920 --> 00:22:26,200 Speaker 1: but we recently had David Rubinstein on who said, listen, 436 00:22:26,200 --> 00:22:27,720 Speaker 1: this is still an asset that people are going to 437 00:22:27,800 --> 00:22:29,720 Speaker 1: invest on and work with, and it's not going to zero. 438 00:22:30,119 --> 00:22:33,800 Speaker 1: B and y Melon was UM one of the sort 439 00:22:33,800 --> 00:22:38,200 Speaker 1: of four runners, one of the pioneers of of banking 440 00:22:38,200 --> 00:22:43,320 Speaker 1: with crypto. What's your take? Well, crypto to me the 441 00:22:43,440 --> 00:22:46,760 Speaker 1: at least bitcoin, and they're an asset class. We can 442 00:22:46,800 --> 00:22:48,800 Speaker 1: debate whether the price you go up or down, but 443 00:22:48,800 --> 00:22:51,119 Speaker 1: that's like any asset class. We can always have that debate. 444 00:22:51,359 --> 00:22:54,920 Speaker 1: But the ecosystem around them, that is everything that's going 445 00:22:54,920 --> 00:22:59,240 Speaker 1: on in stable coins, tokenized assets defy the world of blockchain. 446 00:22:59,520 --> 00:23:02,359 Speaker 1: There's a lot of interesting opportunity there and we're investing 447 00:23:02,680 --> 00:23:06,119 Speaker 1: and innovating in the space because this is part of 448 00:23:06,160 --> 00:23:08,920 Speaker 1: the future of the financial markets. We had an era 449 00:23:09,000 --> 00:23:11,920 Speaker 1: of paper back fifty years ago. We've been in the 450 00:23:12,000 --> 00:23:15,520 Speaker 1: era of de materialized ledgers. Now we're getting into the 451 00:23:15,600 --> 00:23:18,560 Speaker 1: blockchain and tokenized assets era. I think it's going to 452 00:23:18,600 --> 00:23:20,960 Speaker 1: be exciting, and we've got an important role to play. 453 00:23:21,119 --> 00:23:23,120 Speaker 1: This is just one of the many assets that has 454 00:23:23,200 --> 00:23:28,159 Speaker 1: come tumbling down as the market realizes how high the 455 00:23:28,200 --> 00:23:32,040 Speaker 1: ft is prepared to raise rates UM. On the other hand, 456 00:23:32,440 --> 00:23:37,160 Speaker 1: for a bank, traditionally higher rates mean um higher profits. 457 00:23:37,240 --> 00:23:41,440 Speaker 1: How how do you react to UM this rising rate environment. Look, 458 00:23:41,960 --> 00:23:44,280 Speaker 1: zero rates aren't good for most people. They're not good 459 00:23:44,280 --> 00:23:46,840 Speaker 1: for banks, they're not good for consumers either, and so 460 00:23:47,080 --> 00:23:50,480 Speaker 1: seeing rates lift off the zero bound is a positive thing. 461 00:23:50,560 --> 00:23:56,920 Speaker 1: I think it signals the that of course inflation, which 462 00:23:56,960 --> 00:23:59,760 Speaker 1: is we're really seeing not only the spot inflation, the 463 00:23:59,800 --> 00:24:02,199 Speaker 1: eight point six percent print that we had last Friday, 464 00:24:02,240 --> 00:24:05,840 Speaker 1: but also the forward expectations for inflation, which share Powell 465 00:24:05,880 --> 00:24:09,600 Speaker 1: alluded to in his remarks yesterday. Inflation is a dangerous 466 00:24:09,600 --> 00:24:12,600 Speaker 1: thing in markets. It's it's it's very important to get 467 00:24:12,640 --> 00:24:14,800 Speaker 1: a good grip on it. This is a difficult inflation. 468 00:24:14,880 --> 00:24:18,480 Speaker 1: It's not just demand driven, it's supply side constraint driven. 469 00:24:18,640 --> 00:24:21,240 Speaker 1: That makes it a little gnarly, i'd say for for 470 00:24:21,400 --> 00:24:24,560 Speaker 1: the policymakers. But as chap How showed us yesterday seventy 471 00:24:24,560 --> 00:24:27,360 Speaker 1: five basis points, he is on the case, Robin. One 472 00:24:27,400 --> 00:24:30,320 Speaker 1: of the challenges for the financial services industry, like many 473 00:24:30,320 --> 00:24:34,640 Speaker 1: other industries, has been diversity and inclusion in the workforce. 474 00:24:35,200 --> 00:24:37,159 Speaker 1: I worked on Wall Street for thirty years, and I 475 00:24:37,200 --> 00:24:41,120 Speaker 1: saw every incoming class of investment banking analysts very diverse. 476 00:24:41,640 --> 00:24:43,440 Speaker 1: Yet by the time it came to see the list 477 00:24:43,480 --> 00:24:46,480 Speaker 1: for managing directors or partners not So, how do you 478 00:24:46,480 --> 00:24:49,200 Speaker 1: guys think about that? At b n Y melon critically 479 00:24:49,240 --> 00:24:51,560 Speaker 1: important topic. I was just on the main stage here 480 00:24:51,600 --> 00:24:53,919 Speaker 1: of this flagship conference of ours and I was talking 481 00:24:53,960 --> 00:24:57,440 Speaker 1: to our clients about exactly that topic. But I'll tell 482 00:24:57,480 --> 00:25:00,159 Speaker 1: you from our point of view, seventy two percent, just 483 00:25:00,200 --> 00:25:03,360 Speaker 1: starting at the top of our company, seventy of our 484 00:25:03,480 --> 00:25:08,600 Speaker 1: board are women and people from ethnically historically underrepresented groups. 485 00:25:08,600 --> 00:25:12,040 Speaker 1: So we feel very diverse at the top. As you say, 486 00:25:12,080 --> 00:25:13,960 Speaker 1: we've got a lot of intake at the bottom, and 487 00:25:14,000 --> 00:25:17,040 Speaker 1: it's an important priority for us. We're really driving that culture, 488 00:25:17,320 --> 00:25:21,120 Speaker 1: and it's not just about diversity and pure representation. It's 489 00:25:21,119 --> 00:25:24,400 Speaker 1: about creating a sense of belonging for people in our 490 00:25:24,440 --> 00:25:27,560 Speaker 1: company so that they can be themselves, they can be authentic, 491 00:25:27,760 --> 00:25:30,119 Speaker 1: they can bring their whole selves to work. That culture 492 00:25:30,600 --> 00:25:34,800 Speaker 1: perpetuates diversity, and it's an important part of the story. Robin, 493 00:25:34,840 --> 00:25:38,320 Speaker 1: just real quickly, last question, Um, you know what we've 494 00:25:38,359 --> 00:25:40,360 Speaker 1: seen over the pandemic, it's just kind of the whole 495 00:25:40,440 --> 00:25:42,760 Speaker 1: change in how people think about work. Where are you 496 00:25:42,800 --> 00:25:44,800 Speaker 1: at being wide melon in terms of working from home, 497 00:25:45,200 --> 00:25:47,920 Speaker 1: flex time? How do you guys think about that? So 498 00:25:48,119 --> 00:25:50,920 Speaker 1: hybrid for me is the future, and I think it's uh. 499 00:25:51,080 --> 00:25:53,639 Speaker 1: You know, however much some folks may yearn for the 500 00:25:53,680 --> 00:25:56,040 Speaker 1: five days a week of the past, I personally think 501 00:25:56,080 --> 00:25:58,560 Speaker 1: that time's gone. I get that we've had a very 502 00:25:58,560 --> 00:26:00,760 Speaker 1: tight labor market that does have a lot of choice 503 00:26:00,800 --> 00:26:04,000 Speaker 1: to employees. But we've got all these great new technologies 504 00:26:04,160 --> 00:26:06,760 Speaker 1: finding a way for people to have more flexibility in 505 00:26:06,800 --> 00:26:09,560 Speaker 1: their lives, to be able to combine life and work, 506 00:26:09,640 --> 00:26:11,760 Speaker 1: even if it's just spending ten minutes picking up your 507 00:26:11,800 --> 00:26:15,320 Speaker 1: kids from school. Then that's actually good for employees, that's 508 00:26:15,320 --> 00:26:18,480 Speaker 1: good for the employer. To us, that means several days 509 00:26:18,480 --> 00:26:21,320 Speaker 1: a week, call it three in the office, a couple 510 00:26:21,359 --> 00:26:23,919 Speaker 1: of days hybrid. We get a lot of benefits by 511 00:26:23,960 --> 00:26:26,200 Speaker 1: having our people in the office, but we don't need 512 00:26:26,280 --> 00:26:29,320 Speaker 1: all of those benefits five days a week. We can 513 00:26:29,359 --> 00:26:32,240 Speaker 1: get it by having this hybrid structure. That's the future 514 00:26:32,280 --> 00:26:35,760 Speaker 1: for us. All right, Robin Vince, President and CEO elect 515 00:26:35,840 --> 00:26:37,479 Speaker 1: of b n Y Melon Again, we were at their 516 00:26:37,520 --> 00:26:40,399 Speaker 1: flagship conference here, the b n Y Melon Pershing UH 517 00:26:40,480 --> 00:26:43,720 Speaker 1: Insight Conference here in Grapevine, Texas, bringing all a lot 518 00:26:43,720 --> 00:26:47,440 Speaker 1: of good financial partners together. People are here. It's packed there. 519 00:26:47,480 --> 00:26:49,920 Speaker 1: They're uh, you know, they're definitely getting together. I see 520 00:26:49,960 --> 00:26:52,879 Speaker 1: people sitting down in corners, you know, doing deals, talking business. 521 00:26:52,920 --> 00:26:55,560 Speaker 1: It's good to see Robin. Thanks so much for joining 522 00:26:55,640 --> 00:27:00,960 Speaker 1: us here. Thanks for listening to the Bloomberg Mark Kids podcasts. 523 00:27:01,320 --> 00:27:04,520 Speaker 1: You can subscribe and listen to interviews with Apple Podcasts 524 00:27:04,640 --> 00:27:08,560 Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm 525 00:27:08,600 --> 00:27:12,800 Speaker 1: on Twitter at Matt Miller three. On Fall Sweeney, I'm 526 00:27:12,800 --> 00:27:15,440 Speaker 1: on Twitter at pt Sweeney before the podcast. You can 527 00:27:15,480 --> 00:27:17,680 Speaker 1: always catch us worldwide at Bloomberg Radio.