Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. A little bit of
Speaker 1: a calm feel to some of this early morning and
Speaker 1: trading after yesterday's rampant sell off, and I want to
Speaker 1: get some perspective here from someone who actually has been
Speaker 1: trading markets for decades. We can do that with Vince Signarella,
Speaker 1: Global Macro Strategies for Bloomberg News. Vince, what's your takeaway
Speaker 1: from yesterday? They weren't playing around yesterday, were they? No? No,
Speaker 1: not at all? That was that was quite a round. Um.
Speaker 1: I think it was some. I think what we saw
Speaker 1: yesterday was some really weak long positions which have been
Speaker 1: built up for about a week and a half after
Speaker 1: some week short positions. And I think that's what we're
Speaker 1: seeing a lot of going on, a lot of day trading,
Speaker 1: a lot of algo trading. We went through four thousand
Speaker 1: on the SMP yesterday was major capitulation, uh with with
Speaker 1: the sell off, al goes, driving stops lower, and we're
Speaker 1: seeing some of this going on today in this morning.
Speaker 1: It almost feels like the day is over and we
Speaker 1: should go home. Already of the trading is very very quiet.
Speaker 1: It's very modest. As I'm looking over at the tape
Speaker 1: right now, the average is giving back all of the
Speaker 1: morning games just about with the SMP cash up just
Speaker 1: about six. So Vince, you know you've been out there.
Speaker 1: I think with a call that says, you know, the
Speaker 1: Fed can really pause if at once to I mean,
Speaker 1: inflation in a lot of parts of the economy is
Speaker 1: has peaked, is rolling over. They don't need to be
Speaker 1: over the aggressive the market yesterday kind of said maybe
Speaker 1: that CPI print changes that a little bit. How do
Speaker 1: you how do you think you know the federal view
Speaker 1: all this stuff. I think the Fed is going to
Speaker 1: look past that one number, um and I would caution
Speaker 1: people to look past that one number as well. I
Speaker 1: know what. It obviously took a lot out of the
Speaker 1: street yesterday and wiped a lot of the market out,
Speaker 1: but it's potentially actually a good opportunity. I mean, the
Speaker 1: consumer inflation expectations, and you know, just as a reminder,
Speaker 1: inflation is an expect ation phenomenon. It's it's it's what
Speaker 1: people think is going to happen, and that kind of
Speaker 1: manifests itself into reality in the future. Inflation expectations on
Speaker 1: a euro of the year basis of continuing to drop,
Speaker 1: and we've basically been seeing producer prices drop as well.
Speaker 1: And you know, the trend in CPI on a month
Speaker 1: over month basis is lower also with the exception obviously
Speaker 1: off Tuesday's number. So I think what we really need
Speaker 1: to do is, like you know, as CPI, CPI which
Speaker 1: was Tuesday's trash, could be Thursday's fortune if retail sales
Speaker 1: comes in lower than expected, because what I expect to
Speaker 1: see as we go into the end of the year
Speaker 1: is slower growth. The set is definitely I think going
Speaker 1: to push us close to if not into whatever session
Speaker 1: um and prices and consumer expectations will fall. How about
Speaker 1: I mean again, just thinking about yesterday's action, was it
Speaker 1: a sense of the market overreacted yesterday, or as you
Speaker 1: may be suggested, there were just some week longs out there.
Speaker 1: I think it's actually a little boatful. I think there
Speaker 1: was something of an overreaction. UM. I mean, let's face it,
Speaker 1: it really is just one number of all things being equal. Um.
Speaker 1: But at the same time, there's not a lot of confidence.
Speaker 1: I think either side of this market, you have a
Speaker 1: lot of people still in cash, not feeling good about equities.
Speaker 1: We got a little bit jammed up over the last
Speaker 1: week and a half after a major sell off, and
Speaker 1: I think those positions were wiped out. Remember going into
Speaker 1: the CPI number that that was up almost two fifty
Speaker 1: And I was talking to traders shows before the data
Speaker 1: and we were kind of like, what the heck are
Speaker 1: these people thinking that's pretty optimal, that's pretty optimistic going
Speaker 1: into a data print like this, And and I think
Speaker 1: that was a big part of it. To people would
Speaker 1: just so like worked up going into that number, and
Speaker 1: they absolutely got crushed. Vince, the traders you talked to,
Speaker 1: do they believe a soft landing is possible or are
Speaker 1: they just saying, you know what, it's either we're in
Speaker 1: or we're going into recession. It's just a question how
Speaker 1: deep where do you think the trader sentiment is these days?
Speaker 1: I don't I don't think there's a good feel about
Speaker 1: a soft landing, and I commented about a month ago
Speaker 1: the only soft landing we've seen the list twenty five
Speaker 1: years was slowly on the Hudson Um. Most most of
Speaker 1: the traders, most of the traders, if not all, of
Speaker 1: the traders I talked to, think that we're going to
Speaker 1: hit a wall, that the FED is going to push
Speaker 1: us into a recession. Of sorts, they buy and large
Speaker 1: sea equity is lower at the end of the year.
Speaker 1: I disagree with that notion, but I think I'm a
Speaker 1: little bit in a min already there. But by and
Speaker 1: large they see us going into a recession. They see
Speaker 1: the FED overreacting, if you will, um and pushing a
Speaker 1: little bit too hard on at and and things are
Speaker 1: going to be softer as we head into next year.
Speaker 1: So when we hear from the Fed next week, Vince,
Speaker 1: I mean, do you think we'll get any kind of
Speaker 1: body language as to we're gonna wait and see how
Speaker 1: We're gonna wait here and see how the past you know,
Speaker 1: rate hikes impact this economy, or do you think we
Speaker 1: might get some body language about Nope, we're still focused
Speaker 1: on inflation and we're signaling some more rate ikes. I
Speaker 1: think the latter it would be very surprising for me,
Speaker 1: uh to see them to see Powell shift from the
Speaker 1: jackson Hole speech just just a few weeks ago to
Speaker 1: a more modest, sort of neutral lean, if you will.
Speaker 1: I think he's going to stay where he was quite hawkish,
Speaker 1: which is what the market expects. UH. If he should
Speaker 1: lean to like we're waiting and seeing, we're probably see
Speaker 1: a massive rally, because that would be very very dubbish
Speaker 1: of him. But more likely than that, he's going to
Speaker 1: stay on the theme that he painted for jackson Hole.
Speaker 1: I would hope that the next set of months for
Speaker 1: soul of Data UH will be some moderation because let's
Speaker 1: face it, it does take six to twelve months for
Speaker 1: the monetary policy to get through the economy, and they're
Speaker 1: not really giving any they're not giving anything they've done
Speaker 1: any time. Yet there seems to be a panic on
Speaker 1: the part of the FLMC, and I think it has
Speaker 1: a lot to do with them totally missing the boat
Speaker 1: with their transient philosophy, and and now they're worried they're
Speaker 1: gonna lose credibility once again by not moving too quickly.
Speaker 1: And it's very possible they'll lose credibility by moving too quickly. Yeah,
Speaker 1: interesting to see. It feels like they're kind of playing
Speaker 1: catch up here and that might impact their decision making
Speaker 1: going forward. We shall see Vincenerella, Global macro Strategists for
Speaker 1: Bloomberg News giving us his thoughts. And it's just kind
Speaker 1: of had the call here that he thought that maybe
Speaker 1: we would get a pause here in the rates after
Speaker 1: this rate increase coming up next week, and that would
Speaker 1: be enough for risk assets. We'll have to see how
Speaker 1: that plays out. The consensus seems to be, you know,
Speaker 1: on the other side of that trade. Let's switch gears
Speaker 1: of technology again. We welcome to the Bloomberg Interactive Broker Studio.
Speaker 1: Amit Walia. He's the CEO of Informatica. Informatical is a
Speaker 1: public traded company on the New York Stock Exchange. I
Speaker 1: n f A is a ticker to put into your
Speaker 1: Bloomberg terminal. It's got a market cap of six billion dollars.
Speaker 1: Went public just last October. I p O a bunch
Speaker 1: of underraters there at twenty nine stock to twenty one
Speaker 1: and change. I mean, thanks so much for joining us
Speaker 1: here in our Bloomberg Interactive Broker Studio. Give us the story.
Speaker 1: The informatica story. Give us the thirty seconds what we
Speaker 1: need to know about your company and what you guys
Speaker 1: are doing in that big technology stack. First of all,
Speaker 1: thanks great to be here. Uh, you know, lots happening
Speaker 1: right now. If you think about us, you know we're
Speaker 1: in this next game years of digital transformation that will happen.
Speaker 1: By the way, last Dame it was all about digital modernization.
Speaker 1: So it's all going to be about transforming a business
Speaker 1: with the help of tech, and it's all about cloud
Speaker 1: data any I. What we do is we sit in
Speaker 1: the middle called data management, this whole fragmentation of data,
Speaker 1: many types of data. How do you basically help companies
Speaker 1: understand the data, figuring out customer child supply chain, figuring
Speaker 1: out the data governance and privacy problems, figuring out what
Speaker 1: if analysis to run their businesses with analytics. That's what
Speaker 1: we do in the middle. Were the only platform company
Speaker 1: at scale running with a billion dollars subscription there are
Speaker 1: and a cloud platform. That's what we do. How do
Speaker 1: you say it too? I mean Paul gets this because
Speaker 1: he ran basically a data business um when he put
Speaker 1: together Bloomberg Intelligence. Right, you're bringing in all the data
Speaker 1: feeds to your analysts at a Princeton and spreading around
Speaker 1: the world. Somebody at a dinner party maybe says, I,
Speaker 1: you know, I don't understand the word you just said.
Speaker 1: I heard data, and I get what data is. I
Speaker 1: know what the cloud is kind of platform. You're sort
Speaker 1: of losing me. What what do you do? They take
Speaker 1: two examples. Take take something uniliver ninety six countries running
Speaker 1: the supply chain. They want to understand they make Hellman's mayonnaise.
Speaker 1: But how do I bring the suppliers to bring the
Speaker 1: products to my customers as fast as I can? That's
Speaker 1: a data problem. That's what we help. On the other side, rover,
Speaker 1: how do I bring the right products on the right
Speaker 1: shelf at the right time so I can save costs
Speaker 1: by not losing money by wasted product, as well as
Speaker 1: good customers side by getting the right project. That's the
Speaker 1: kind of data problems we solve on a daily basis.
Speaker 1: Or Twitch a gaming company, how do I make sure
Speaker 1: the gamers get real time understanding of what the games
Speaker 1: are doing. That's the kind of problems we solve. So
Speaker 1: how are you making money then out of that? Or uh,
Speaker 1: you know, do you plan to be making money out
Speaker 1: of that soon. Oh well, So the thing is that
Speaker 1: we have a profitable company running twenty plus points of
Speaker 1: operating margin and cash flow. And so that's We've been
Speaker 1: a profitable company throughout. We went private, we came out
Speaker 1: of the privatization, we run eighty points of gross margin.
Speaker 1: We never lost sight of we run a profitable company,
Speaker 1: and you've never I'm just looking for I was looking
Speaker 1: for a pe ratio, right, and I don't see that
Speaker 1: because the E is still minus if you look forward.
Speaker 1: I'm looking at the f A function. We've got the
Speaker 1: twentys forecast for this year, um, and ninety cents next yeah,
Speaker 1: and ninety cents next year. So we've seen that whole
Speaker 1: text space. Really this year get hammered. Your stock is
Speaker 1: not immune to that. Tell us about your business today.
Speaker 1: What are your customers telling you. We've got rising interest rates,
Speaker 1: we've got the threat of a recession. What are your
Speaker 1: customers telling you? I think, look, no doubt there's uncertainty
Speaker 1: out there, but customers are also figuring out that if
Speaker 1: they don't focus on the long term mission critical transformasion,
Speaker 1: they won't get out of this. A great example, by
Speaker 1: the ways in the COVID times in April, American airlines
Speaker 1: bet on our platform and I spoke to them like
Speaker 1: airlines were grounded, why are not? And the goal was
Speaker 1: if I don't understand my customers churned during this time,
Speaker 1: when I come out on the other side, I'll be
Speaker 1: left holding the bag. They won the innovation awarded a
Speaker 1: customer conference, so large customers are thinking like that. Yes,
Speaker 1: there's absolute you know, elongated sales cycles across the board,
Speaker 1: but transformation of that scale is not going to slow down.
Speaker 1: So what happened? I mean, your stock was fine high
Speaker 1: after the I p O. You got up to almost
Speaker 1: forty share and with everyone else at the beginning of
Speaker 1: this year, UM investors started to sell and now your
Speaker 1: train eating for half that? So what what happened? Do
Speaker 1: you think, not just to you, but to the entire market.
Speaker 1: But look, there is needless to say, a huge amount
Speaker 1: of multiple correction you guys were talking about right, there
Speaker 1: was obviously an all time high for across the board tech.
Speaker 1: I think we got caught up from our side in
Speaker 1: the growth at all stock kind of story. We're not
Speaker 1: a growth at all or growth at all cost kind
Speaker 1: of company. I do think that there is an element
Speaker 1: of that going on. But as long as you keep
Speaker 1: growing at our scale a billion dollars of subscriptions in
Speaker 1: our mid thirties, and you keep printing cash flow and
Speaker 1: operating margin, you will get to that. Now. Of course,
Speaker 1: we're all sitting in this middle seeing markets change. You've
Speaker 1: got to keep your eye on solving customer problems. We're
Speaker 1: all going to come out on the other side with
Speaker 1: things correct itself. For sure. I'm looking at my PGeo
Speaker 1: functional Bloomer Traumil just shows from geography where you get
Speaker 1: your revenue most of its outside the the U s
Speaker 1: for you guys. Is that right? No, that's not true.
Speaker 1: That's not true about US US. Okay, So how is
Speaker 1: your non US business doing? Because I think about Europe,
Speaker 1: I think about Asia with the lockdowns and all companies
Speaker 1: that have to deal with those types of markets. What
Speaker 1: are you saying there? Actually, Europe in Asia did pretty
Speaker 1: fine for US so far. I think barrying FX that's
Speaker 1: obviously surprising all of us. You can't control how strong
Speaker 1: the dollar is right now in terms of road demand.
Speaker 1: Europe actually helped pretty well for US even last quarter.
Speaker 1: And even so, I mean, actually, I'm flying up to
Speaker 1: London as we speak over at the by the end
Speaker 1: of this week, we haven't seen demand for the funeral.
Speaker 1: I'm going to figure out if I can drive into
Speaker 1: the city of London. But it's gonna be it's gonna
Speaker 1: be busy. It's gonna be busy. So demand hasn't slowed
Speaker 1: down there. FX definitely a big headwind for all of us.
Speaker 1: F X has been amazing to watch and we thought
Speaker 1: it was going to turn around a little bit on Monday,
Speaker 1: but now the king dollar is back with a vengeance.
Speaker 1: Does that make it easier for you or more difficult,
Speaker 1: because the volatility actually makes up both top line obviously harder,
Speaker 1: no doubt. But we are also a very well heaped company.
Speaker 1: We have our presence across the globe. We have a
Speaker 1: lot of opics sitting outside the U s U S
Speaker 1: as well. We have a big development center in India
Speaker 1: as an example. So the strong dollar helps us there.
Speaker 1: So what we have, the headwind on the top in
Speaker 1: on effex becomes actually a dab on the glass side
Speaker 1: for us. All right, I mean, thank you so much,
Speaker 1: we appreciate it. I met Walia, CEO of Informatica, joining
Speaker 1: us here on a Bloomberg interactor broker student getting the
Speaker 1: update on his company. Informatica Again, I n F A
Speaker 1: H is the symbol into that software space, which has been, uh,
Speaker 1: you know, such a source of growth for investors for
Speaker 1: such a long time. A lot of these stocks, these
Speaker 1: technology stocks, in addition to the market in general taking
Speaker 1: on the on the gin, but certainly the technology socks
Speaker 1: are really bearing the brunt here on this rising interest
Speaker 1: rate environment. But what you've got to think about the
Speaker 1: long term growth trends associated with tech spending a lot there.
Speaker 1: It's gotta Robert Teter, he's head of Investment Policy and
Speaker 1: Strategy group at Silvercrest Asset Management. Boy, Robert, yesterday, if
Speaker 1: you're an head of investment policy and strategy group, everybody's
Speaker 1: looking to you at the four oh one yesterday, what
Speaker 1: would you tell your team? Yeah, it's a great question,
Speaker 1: and it was a you know, did one of the
Speaker 1: wildest days to the downside in a long time. I
Speaker 1: think one of the themes that we've focused on has
Speaker 1: been something we've focused on really from the beginning of
Speaker 1: this pandemic era, which is patients and taking some context
Speaker 1: and I think, as many others have noted, yesterday's move
Speaker 1: was really only a reversal of about one week's worth
Speaker 1: of gains in the prior week, and so that's something
Speaker 1: that we really focused in on of saying, yes, there's
Speaker 1: been a change here. Yes, the inflation number was worse
Speaker 1: than expected. Our work shows that inflation versus expectations is
Speaker 1: a really critical reading for forward returns in that month
Speaker 1: window between uh CPI readings. But overall, it really took
Speaker 1: us back just about a week in terms of where
Speaker 1: the S and P had been, And so that says
Speaker 1: that there was a lot of optimism built into that
Speaker 1: report didn't come through quite as planned, But I think
Speaker 1: the CPI print wasn't quite as bad as yesterday's numbers
Speaker 1: in isolation would have made it out to be really
Speaker 1: more reversal of the prior week. So again this concept
Speaker 1: of patients and sort of looking through the numbers a
Speaker 1: little bit, things are going to take some time to
Speaker 1: settle down. Do you think there was do you think
Speaker 1: there were opportunities created yesterday? Or do we still need
Speaker 1: to Harry Shilling, who normally is very conservative, He's very reserved. Um,
Speaker 1: he's a he's a very polite man. I've known him
Speaker 1: for forty eight years now. Yeah, I grew up with him.
Speaker 1: But yesterday or no, on Monday, he said, we haven't
Speaker 1: seen the market puke yet. And until that kind of
Speaker 1: regurgitation happens, until um, your average investor sells his last
Speaker 1: stock and says I'm never gonna buy one again. Um,
Speaker 1: then you then you're not gonna see this. Um these
Speaker 1: drops can um stop? What do you think? I think
Speaker 1: yesterday was a pretty good indication of that. You certainly
Speaker 1: had very high readings in terms of stocks trading down
Speaker 1: versus up near you know, near record levels in my view,
Speaker 1: to really firmly get into that campus feeling that we're
Speaker 1: out of the woods. Um, it will take another two
Speaker 1: to three solid prints on cp I. Again, I don't
Speaker 1: think yesterday was quite as bad as it seemed, but
Speaker 1: it sort of resets the clock a little bit in
Speaker 1: terms of expectations. And I think CPI inflation really is
Speaker 1: the mos critical indicator on the on the short term outlook. UM.
Speaker 1: I think as we think ahead to two next year
Speaker 1: and things like that, earnings are a bit more important.
Speaker 1: But in the short term it's all about inflation here
Speaker 1: and all about that process of forward rates. We think
Speaker 1: there's a really strong relationship between the forward rate curve
Speaker 1: and expectations on the terminal rate versus how the market
Speaker 1: has been trading in the short term, and that's something
Speaker 1: that we've got a very close eye on as as
Speaker 1: we look at these these interim periods in between CPI readings,
Speaker 1: which really have become the most important metric in the
Speaker 1: markets in the short term. How about valuation, I'm an
Speaker 1: old equities analyst. How do you guys think about valuation
Speaker 1: in this market right here, particularly after yesterday's sell off.
Speaker 1: I know a lot of people still have earnings concerns, uh,
Speaker 1: you know, the back half of this year going into
Speaker 1: early next year. What's the valuation call for you guys?
Speaker 1: And do you do you care more about price book
Speaker 1: or price sales than price earnings? What are the metrics
Speaker 1: that you care about? Yes, so I focus mostly on
Speaker 1: price earnings and thinking about forward earnings at this point.
Speaker 1: Starting to think about earnings for next year, I think
Speaker 1: consensus is a round plus seven or eight percent or so.
Speaker 1: We're probably more in the camp of about five percent
Speaker 1: up on earnings, just thinking that there's still some lingering
Speaker 1: problems here that the markets are fighting through and there's
Speaker 1: still certainly some downward pressure to come on the economy
Speaker 1: because of the rate cycle, but purely in terms of
Speaker 1: of pees, peas have come down quite a bit, so uh,
Speaker 1: in terms of next year's earnings on consensus forecast s andps,
Speaker 1: it's just a little bit over sixteen times, which is
Speaker 1: pretty compelling, even with rates headed a bit higher. So
Speaker 1: you know, we and others have done a lot of
Speaker 1: work on historical rates versus p s, and if you
Speaker 1: take the FED at their words, take the forward curve,
Speaker 1: it it's in its word, and say that the terminal
Speaker 1: rate will settle in somewhere maybe four in a quarter
Speaker 1: or something like that. Um that implies a PE of
Speaker 1: around eighteen. So we think a little bit of progress
Speaker 1: on earnings in the next year, a little bit of
Speaker 1: recovery evaluation as you get some stabilization, and c p
Speaker 1: I sort of sets the backdrop for again this patient,
Speaker 1: longer term outlook of some decent returns to be had
Speaker 1: over the next year or two. All right, Robert, thank
Speaker 1: you so much. We appreciate it as always. Robert Teeter,
Speaker 1: head of Investment Policy and Strategy about Silver Crest Asset Management,
Speaker 1: got his undergraduate economic Stree from Bucknell. Do you know
Speaker 1: the mascot for Bucknell. M this is a bear. It
Speaker 1: is Bucky the Bison. Oh it's a bison. Yes, well
Speaker 1: that's pretty pretty close. Pretty close. Yes, so it's not
Speaker 1: the University of Richmond spiders, but the bison is pretty cool.
Speaker 1: Spiders are unique. My favorite has to be the banana slug,
Speaker 1: which I think Santa Barbara or Santa Cruz, Santa Cruz,
Speaker 1: Santa Santa CRUs. Banana slugs just awesome. Apparently there is
Speaker 1: a thing bananas. Sure, sure, I guess you can't find
Speaker 1: it and they can live through a lot. Just don't
Speaker 1: put any salt on them. No, okay, good stuff. That
Speaker 1: would so emerge. Thing the kids were talking about the
Speaker 1: merge emerged for me is doing a deal and acquisitions.
Speaker 1: But that's what I'm talking about, is it? Well, it
Speaker 1: is a deal if you're wealthy crypto person who's going
Speaker 1: to be staking and taking this network. So basically Ethereum,
Speaker 1: which is kind of the all so ran cryptocurrency after
Speaker 1: Bitcoin obviously, which is the o G, is going to
Speaker 1: move from proof of work mining, which the kids are
Speaker 1: very unhappy about how much energy it uses to proof
Speaker 1: of steak mining, and then the energy uses just going
Speaker 1: to drop point nine percent. I've been told UM to
Speaker 1: verify a transaction so that means each transaction, instead of
Speaker 1: taking instead of using the energy it takes to run
Speaker 1: a house for a week, it will use the energy
Speaker 1: it takes to boil a kettle of tea. Katie Gretfeld
Speaker 1: joins us in our Bloomberg Interactive Broker studio. She's a
Speaker 1: cross asset reporter. Is what Matt said remotely accurate? No,
Speaker 1: he got it right that he got all the headlines
Speaker 1: in there. Moving from proof of work to proof of
Speaker 1: steak miners kind of become obsolete and the big number
Speaker 1: there drop in energy usage. That's what people are very
Speaker 1: excited about. Of course, Bitcoin has come under so much
Speaker 1: scrutiny from lawmakers and regulator to about how much energy
Speaker 1: mining takes up those very powerful computers. So the merge
Speaker 1: has been in work, in the works. It's been talked
Speaker 1: about for seven years, and Uh, it could actually been
Speaker 1: happy be happening tonight. Uh it's been deleted several times
Speaker 1: because I thought it happened a couple of days ago. No,
Speaker 1: we have an actual time, right, it's gonna be it's
Speaker 1: like ten hours from now or something. Countdown clock. We
Speaker 1: needed emerge countdown below the countdown to the clothes. Okay, exactly.
Speaker 1: So I mean does that make Ethereum in theory the
Speaker 1: preferred cryptocurrency over Bitcoin. Well, they have different uses, is
Speaker 1: what people would say, people who aren't Bitcoin maximalists, of
Speaker 1: which there are a few, So bitcoin like mat just
Speaker 1: look at the market. The market. You know, money talks, right, Oh,
Speaker 1: I heard that? Okay, bitcoine, follow the money there. There
Speaker 1: is something like four billion dollars worth of bitcoin out there,
Speaker 1: but the hope is at least half that. And if
Speaker 1: you're in ether, boll the flippening is going to come
Speaker 1: and Ether will replace the flippening. What the flippening? You've
Speaker 1: got to add that to your don't you read coins
Speaker 1: and cat cats, cats and coins. That's my secret weekend
Speaker 1: distribution list I can addue to. But so, but if
Speaker 1: you also follow the money and look at where money
Speaker 1: has been moving since mid June, Ether is up about
Speaker 1: bitcoin is remember when it was going to four thousand
Speaker 1: the actual price per coin. But Ether has been rallying
Speaker 1: much more than put bitcoin in anticipation of this merge,
Speaker 1: thinking that developer. Developers will flock here. It's going to
Speaker 1: be a faster, cheaper network than Bitcoin, which, as Matt
Speaker 1: Riley points out, is the biggest cryptocurrency out there right now. So,
Speaker 1: I mean, I've just been watching over the last few
Speaker 1: so the merge is something, Paul that keeps happening, or
Speaker 1: it's gonna happen and it's delayed, it's gonna happen, and
Speaker 1: it's now we're there, it's act really going to happen,
Speaker 1: and so I've been watching the price of Ether like, oh,
Speaker 1: if it's really going to happen, now, it's going to
Speaker 1: take off because you want to get in before, right theoretically,
Speaker 1: So the price of Ether just keeps going down. Well,
Speaker 1: my friend in colleague, Vildonna Hirik, had a great story.
Speaker 1: I think it was last week or earlier this week,
Speaker 1: or at least this month. So if you look at
Speaker 1: what the derivatives market is pricing, most crypto traders are
Speaker 1: actually shorting Ether right now the derivative So it could
Speaker 1: turn into a sell the news event to your point,
Speaker 1: because markets ever forward looking, and this has been anticipated
Speaker 1: for a long time. Sure it's been delayed over and
Speaker 1: over again, but now that we're finally now you say
Speaker 1: traders have been shorting either, Are these just lonely guys
Speaker 1: in their mother's basements. It's not the trading desk of
Speaker 1: JP Morgan shorting. It's not Petch funds. It's that kk R.
Speaker 1: I mean, you know point seventy two shorting it? Well,
Speaker 1: it's it's it's almost at that level. About the brilliant
Speaker 1: traders that worked Jane Street and now are billionaires in
Speaker 1: f t X, right, I mean Sam Bankman Freed started
Speaker 1: out that way, and there's a great story on the
Speaker 1: terminal about his other operation as well. I think it's
Speaker 1: called Alan Meta. Is how you pronounce this his market
Speaker 1: making firm? True? That this is just this is how
Speaker 1: they make money. So there are a lot of I mean,
Speaker 1: he may, honestly, Sam Bankman Freed maybe in his parents basement,
Speaker 1: but he's a genius who has billions of dollars worth
Speaker 1: of wealth. So all right, that talks to me. In
Speaker 1: any case, It'll be interesting to see how ETHER reacts
Speaker 1: to this. It will be interesting to see how there
Speaker 1: are a number of UH spinoffs or original ether you
Speaker 1: know that that are gonna continue on proof of work.
Speaker 1: There um people who don't buy into They think proof
Speaker 1: of stake is a POS. And it'll be interesting to
Speaker 1: see if those make more money than ether now and
Speaker 1: to see what happens to the o G to bitcoin.
Speaker 1: I know it will be interesting and something I need
Speaker 1: to look into, Matt is there's a bunch of ether
Speaker 1: extiane treated products in Europe that actually hold ether. I
Speaker 1: need to look into how they're handling the merge because
Speaker 1: we do also have an ef We have an e
Speaker 1: t Can you do an e t F on ether?
Speaker 1: You can't in the US. Many would like to, but
Speaker 1: the sec that allowed physically back right, And the e
Speaker 1: t F on bitcoin is only the futures of bitcoin,
Speaker 1: only on future, not on the underlying in America, and
Speaker 1: there are bitcoin e t fs in Canada and uh yeah,
Speaker 1: perspective as we do as we do at Bloomberg. Yes,
Speaker 1: I just saw a hundred and sixty four offices and
Speaker 1: seventy four countries. I was just walking on a floor
Speaker 1: that had that up on the terminal. You're a widespread everywhere,
Speaker 1: I mean, just out of control there. I was telling
Speaker 1: some kids from Duke this morning. There's no more global
Speaker 1: company that I've ever worked for. And that's including JP
Speaker 1: Morgan and City more global than Bloomberg Just incredible. Craty
Speaker 1: Greifeld talking about global cross asset reporter for Bloomberg News,
Speaker 1: joining us here in our Bloomberg Interactive Broker studio. We
Speaker 1: have a looming railroad strike. Um, and I think it's
Speaker 1: a big issue because it affects so much of the
Speaker 1: economy in the US. I mean, you think about it.
Speaker 1: I mean we're just kind of seeing some light at
Speaker 1: the end of the tunnel from the supply chain issues
Speaker 1: associated with the pandemic and now potentially have a rail
Speaker 1: strike on the freight and that could be a big
Speaker 1: issue across a number of verticals there. So let's bring
Speaker 1: Kim Chipment. She's reporter. She covers agricultural, food, water and
Speaker 1: fuel for Bloomberg News. Can just give us the update
Speaker 1: on kind of where we are with this potential strike
Speaker 1: and and what are the insiders saying how it might
Speaker 1: play out? Um? Sure, well we know, um, you know
Speaker 1: at this point President Biden's gotten personally involved. There was
Speaker 1: uh meeting this morning try you know that. Of course,
Speaker 1: you know, everyone's point out all the stubs, you know,
Speaker 1: trying to make sure that it doesn't happen. Uh. But
Speaker 1: but right now, we really don't have an indication of
Speaker 1: which way it's it's likely to go. Um. You already
Speaker 1: have the railroads. Uh you know it's now it's been
Speaker 1: a couple of days since we've heard that long distance
Speaker 1: distance passenger route UM in some cases are being cut
Speaker 1: and rail railroads. UM. Starting today, we'll stop picking up
Speaker 1: UM items like brain. This is a big I mean, Kim,
Speaker 1: this is the big issue. I mean, I think you know.
Speaker 1: One of the issues agriculture. I was I wasn't really
Speaker 1: aware of how much agricultural stuff actually travels by rail.
Speaker 1: So what's the farmers to do? This is harvesting. Also,
Speaker 1: let's just back up a second, because my understanding is
Speaker 1: that there are many different railroads, many different kinds of
Speaker 1: train system ums, with many different purposes. Um. You've got Amtrak,
Speaker 1: for example, which people take to go back and forth
Speaker 1: from Boston to Washington, d C. And maybe stop in
Speaker 1: New York, right, and then you've got um, you know,
Speaker 1: grain shipments out of the Midwest. You've got freight moving
Speaker 1: trucks around for GM and Toyota. Are these are all
Speaker 1: of these railroads using workers from one union or what's
Speaker 1: the deal can can one strike derail so to speak,
Speaker 1: all of these businesses, well for what you brought up
Speaker 1: Amtrak and the and the issue for passenger rail and
Speaker 1: also and then for some commuter rail um like out
Speaker 1: of like like the Metro North or Long Island Railroad. Right,
Speaker 1: although it is important to say that there's no indication
Speaker 1: that those would be affected those particular ones, although outside
Speaker 1: of Washington, d C. In Virginia and Maryland there are
Speaker 1: two that definitely would be affected. Los Angeles Chicago commuter
Speaker 1: line definitely would be affected. And the reason for that,
Speaker 1: and also in the reason for some of these Amtrak
Speaker 1: passenger rail cuts is uh, for the long distance throughout
Speaker 1: I will probably see more announcements on that today. Um.
Speaker 1: That's because they either share a line with the freight
Speaker 1: um say, their share lines with with the freight railroads
Speaker 1: or there or there's some kind of other overlaps where
Speaker 1: they wouldn't have access anymore. So it's not that that's
Speaker 1: not really a worker issue, that's a that's a real
Speaker 1: line issue. Is there is there an indication that this
Speaker 1: is going to go down to the wire to Friday
Speaker 1: in terms of negotiating this or is there sense that
Speaker 1: maybe you know, the president will step in. We've seen
Speaker 1: it in the past with other whether it's the airlines
Speaker 1: and kind of really pushed the two parties together. I mean,
Speaker 1: it's Wednesday here, So what's the inside thinking there? Well,
Speaker 1: I do think, uh, there's a decent chance it's going
Speaker 1: to go right down to the wire. I mean some
Speaker 1: people think, you know, we could even have you know,
Speaker 1: a strike uh that lasts you know, half a day,
Speaker 1: a couple of days. Uh. At this point, it's you know,
Speaker 1: most people with the mid term elections coming up and uh,
Speaker 1: and just the hit that it would take to the
Speaker 1: to the US economy. I mean that the estimate is
Speaker 1: over two billion a day. Uh. You know, the likelihood
Speaker 1: of the prospect of a prolonged strike is hard hard
Speaker 1: to imagine. But it's we are you know it could
Speaker 1: happen because we don't really know. I mean I'll say,
Speaker 1: you know, like, um, you know you brought up agriculture,
Speaker 1: uh wheat farmers for example, Um, and you have spring wheat.
Speaker 1: That's just you know, finishing up harvest. Um. You know
Speaker 1: that that'sn't that's they have very few options other than rails,
Speaker 1: and that's the that's the case where most of that
Speaker 1: the bulk of that UM for the biggest market is Mexico.
Speaker 1: Most of goes um by rail, So that's where you
Speaker 1: can't get all right, you just can't get the grains there,
Speaker 1: all right, Kim, we'll stay on top of this story.
Speaker 1: We appreciate your reporting. Kim Chipman reporters Whip Covers, agg Food, water, Fuel,
Speaker 1: based out of the Chicago office for Bloomberg News. Thanks
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
Speaker 1: Matt Miller. Put on false Sweeney I'm on Twitter at
Speaker 1: pt Sweeney. Before the podcast. You can always catch us
Speaker 1: worldwide at Bloomberg Radio.