Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: search Bloomberg Global News. Let's get to some of the
Speaker 1: big news of the day in the market moving news.
Speaker 1: Jelena Silchiva is senior US economist at Bloomberg Economics in
Speaker 1: our interactive broker studio along with Creed GROUPDA Markets correspondent
Speaker 1: at Bloomberg and Creed. I'm gonna get to Elene in
Speaker 1: a moment to lay at the jobs data markets, though
Speaker 1: I feel like just don't know where to go right now.
Speaker 1: They don't know where to go, I will say, I
Speaker 1: think today is the kind of day where risk sentiment
Speaker 1: is very much affected by the passing of of shenzo
Speaker 1: abe Um and you know, not not to make light
Speaker 1: of it at all, but one of the things that
Speaker 1: a trader told me early on in my career was
Speaker 1: that sometimes the best undergraduate degree for trading is psychology,
Speaker 1: and and sometimes it has a major effect. And I
Speaker 1: think that is the trade that you saw certainly in
Speaker 1: the pre market. You certainly saw it overnight, and I
Speaker 1: think you're seeing a little bit of a damper today.
Speaker 1: Remember we are looking at very light volume as well,
Speaker 1: but there is even when you you know, talk to
Speaker 1: traders on the floor, the ones are at their desks,
Speaker 1: I should mention there is this kind of somber tone
Speaker 1: in terms of even talking about issues that we've been
Speaker 1: talking about for ages, inflation, recession, the jobs number, etcetera.
Speaker 1: But it's really the passing Shinzo abe that I think
Speaker 1: has had an effect on how these markets are trading
Speaker 1: to the point where it's always you're even seeing kind
Speaker 1: of the the go to trade right now, which is
Speaker 1: cell treasuries, cell stocks, and that has been the trade
Speaker 1: that's been going on for six months straight. And as
Speaker 1: you've reminded us, all we created. Look, volume is low
Speaker 1: right now, and you know, we're down on the SP
Speaker 1: five from a volume perspective, more than twenty three percent
Speaker 1: versus the last twenty days, so not a lot of
Speaker 1: activity during this holiday week. You initially ate to us
Speaker 1: senior US economists Bloomberg Economics, come on in here and
Speaker 1: talk a little bit about this job's report, because that
Speaker 1: was a blockbuster report, jobs added, blowing past the tutor
Speaker 1: and sixty thousand that analysts on average forecast. According to
Speaker 1: Bloomberg Economics. There was some bad news though, the participation
Speaker 1: rate taking down. Give us your take, Well, that was
Speaker 1: a little bit of flying in the goinment, I would say,
Speaker 1: But overall, I think the report was pretty good, not
Speaker 1: just on the surface but beneath. I think one thing
Speaker 1: I would like to highlight is the breadth of job creation,
Speaker 1: particularly in the service sector. So if you look at
Speaker 1: the diffusion index, uh, you know, this is one of
Speaker 1: the indicators that goes into our model for recession probabilities.
Speaker 1: You know that index is remaining really high. It increased
Speaker 1: in the months of June. It broadened further for the
Speaker 1: services sector, and that is telling us that more and
Speaker 1: more industries are hiring, so people find no difficulty finding
Speaker 1: a job even if they lost one. So we all
Speaker 1: heard the news about layoffs in the text sector and
Speaker 1: are the industry that may be very interest rate sensitive.
Speaker 1: But people seem to be able to find jobs easily
Speaker 1: even if they get laid off. This is a good thing,
Speaker 1: all right. So, Yelena, what does this mean for something
Speaker 1: that creately focuses on day to day? She watches the
Speaker 1: market when investors are like, oh my god, were freaked
Speaker 1: about recession. What does that mean for stacks? Oh no, wait,
Speaker 1: things are good? What does this mean for aggressive FED?
Speaker 1: So maybe I'm not so worried about recession, but I'm
Speaker 1: worried about valuations. How do you kind of make sense
Speaker 1: of it? So I think, to me, this report clears
Speaker 1: the way for the FIT to remain on an aggressive tightening.
Speaker 1: So it makes even the CPI report next week less
Speaker 1: of an important report, because you know, it just says, okay,
Speaker 1: little able market is doing great, everything is fine for now,
Speaker 1: it can withstand an aggressive FED. That is correct, even
Speaker 1: though we expect that quite uh significant increase in the
Speaker 1: headline CPI um next week. That's really really interesting, Creedy,
Speaker 1: What do you think of that? The idea that because
Speaker 1: this job's print was so strong. It shows that the
Speaker 1: labor market is so stronger. There was the downward revision
Speaker 1: last month, we should note, but still the US adding
Speaker 1: just hundreds of thousands of jobs per month every single month. Throwo.
Speaker 1: Does that indeed make the CPI report that we get
Speaker 1: next week less important because the Fed is kind of
Speaker 1: on its path and it is committed to fighting inflation. Well,
Speaker 1: I think you have to talk about the recessionary dashboard here,
Speaker 1: which isn't signaling your traditional signals. You're not seeing these
Speaker 1: widespread layoffs. You're not seeing this big slowdown and business investment.
Speaker 1: I mean, sure you're seeing kind of layoffs and pockets Amazon, games, top, etcetera.
Speaker 1: But it's still not at the level that U saw
Speaker 1: on two thousand eight, for example, where everyone is getting
Speaker 1: laid off. My mom, by the way, it was one
Speaker 1: of them at the time, and I remember it being
Speaker 1: this kind of, uh, this thing that almost took over
Speaker 1: every Almost everyone we knew was there had some sort
Speaker 1: of job shake up. This is, I think different, and
Speaker 1: that's why you're seeing such a big range in terms
Speaker 1: of is this a shallow recession that you really quickly
Speaker 1: jump out of, or is this a deep one, and
Speaker 1: that's why there's so much confusion. Recession at all or
Speaker 1: is this a recession at all? And I think that's
Speaker 1: a good point that you bring up, because our question
Speaker 1: is a day, by the way, on Bloomberg Television today,
Speaker 1: was what recession we had a good ism data, Sure,
Speaker 1: sentiment is slow, Sure everyone'sti talking about inflation, but look
Speaker 1: at the numbers. People are still spending. So you, Lena,
Speaker 1: really quickly twenty seconds do we get officially a recession?
Speaker 1: But it doesn't feel so bad. I don't think we
Speaker 1: are going to get even a technical recession in terms
Speaker 1: of negative roles in the second quarter of this year.
Speaker 1: I think we get a positive reading and we are
Speaker 1: not in a recession. All right, Well, think you have
Speaker 1: got guys, go have a glass of wine and a
Speaker 1: beer for the weekend. Things are all rosy. We got
Speaker 1: a few hours to go. All right, Thank you so much.
Speaker 1: As always, you Lena should like you have to check
Speaker 1: out her work on the Bloomberg tournament on the senior
Speaker 1: US economist at Bloomberg Economics and follow all those hits
Speaker 1: that creedy group to das Markets correspondent at Bloomberg really
Speaker 1: just setting us up for some of our discussions today too.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So, of course,
Speaker 1: the big story, certainly here in the United States, there's several,
Speaker 1: but really for US, front and center and for investors
Speaker 1: has been that monthly jobs report. You as employers, you know,
Speaker 1: the news adding more jobs in June than forecast, the
Speaker 1: unemployment rate holding your five decade low, signs of both
Speaker 1: strong demand and that tight labor market continuing. And TI
Speaker 1: we know that's going to help keep the Fed officials
Speaker 1: tilted toward another jumbo interest rate hike. They're going to
Speaker 1: be on their mission because it's about getting inflation down. Yeah,
Speaker 1: my money's on Carol, But I'm not a betting man. Okay,
Speaker 1: I'm not a betting man. We love to talk to
Speaker 1: Peter Quigley, the president and CEO of Kelly. It's a
Speaker 1: global staffing solutions company, so they've got a really good
Speaker 1: idea of what's going on in the labor market, not
Speaker 1: just here in the US, but around the world. Peter
Speaker 1: joins us this afternoon on the phone from Harbor Springs, Michigan, Peter,
Speaker 1: how are you. How are you. We're doing well. Thanks,
Speaker 1: it's good to have you with us. Just spa asking
Speaker 1: those Bloomberg estimates of two thousand jobs gained for the month.
Speaker 1: What in here sticks out to you in this report? Well,
Speaker 1: I think the fact that it is across the board
Speaker 1: job gains all of the verticals that reasonably well um
Speaker 1: surpassed expectations in light of the fact that there is
Speaker 1: considerable concern about a recession, I think speaks to the
Speaker 1: strength of the US labor market right now. If there's
Speaker 1: one downside, it was down slight downtick in the labor
Speaker 1: force participation rate. We need to get more people back
Speaker 1: into the workforce, but a slight really slight, And I
Speaker 1: know some of the analysis earlier on Bloomberg was like, yeah,
Speaker 1: we can kind of blow that off for the moment,
Speaker 1: because there are some people we know who have maybe
Speaker 1: just said I'm done, I've retired. I'm not gonna, you know,
Speaker 1: come back into the labor force. Peter, how does the
Speaker 1: data points that you're seeing kind of fit with not
Speaker 1: only the monthly JAWS report that we got today, but
Speaker 1: some of the other economic statistics about what's going on
Speaker 1: in economy. Would you put your money if you were
Speaker 1: a betting man, we know Tim isn't. Would you put
Speaker 1: it on that a recession is going to come or
Speaker 1: there's no way based on what you're seeing in this
Speaker 1: labor market. Well, I think it's really tough Carol, to
Speaker 1: uh see a recession when you have this kind of
Speaker 1: strength and the labor market. Um, of course it could
Speaker 1: be a couple of quarters away. But obviously companies, the
Speaker 1: companies that Kelly deals with, still hiring there looking for workers.
Speaker 1: They have demand for their products, and they're looking for
Speaker 1: people to help support their transportation of goods or production
Speaker 1: of goods. Uh. So, again, I'm not a betting man either,
Speaker 1: but I would uh, I would say it's hard to
Speaker 1: reconcile uh immediate recession with the jobs market and the
Speaker 1: job report. We're here today, Peter. We love talking with
Speaker 1: you because you are seeing what companies are doing remind
Speaker 1: us of you said, kind of a broad swath of
Speaker 1: companies that you deal with, what kind of jobs that
Speaker 1: was at mostly senior level that you're dealing with, or
Speaker 1: what we we deal with from production workers where house
Speaker 1: house workers, office clerical engineers, scientists were the largest provider
Speaker 1: of substitute teachers in the US UM so we run
Speaker 1: the Gamut technology uh bok permanent placement as well as temporary,
Speaker 1: so we have a pretty good hand on the pulse
Speaker 1: of what's going on in the labor market. Peter, are
Speaker 1: you seeing any sort of decline in demand for employees
Speaker 1: from the companies that you work with? As the FED
Speaker 1: has raised interest rates and has interest rates have gone up,
Speaker 1: we we've seen some softening, and particular verticals technology has
Speaker 1: softened a little bit. I think like sciences because they're
Speaker 1: catching your breath from two years of the pandemic has
Speaker 1: slowed down a little bit. Um really high end permanent
Speaker 1: placement has tempered somewhat. You're talking level stuff, no more
Speaker 1: director level roles that companies are hiring or high volume
Speaker 1: of hiring when they're launching a new product. We support
Speaker 1: Kelly supports companies and they're hiring. So there may be
Speaker 1: some softening, but we don't see a significant decline right now.
Speaker 1: I tease this so I want to get to it
Speaker 1: because you guys have done a survey of more than
Speaker 1: a thousand senior executives and you found that the great
Speaker 1: resignation will extend into the highest levels of the c suite.
Speaker 1: Senior executives say they will leave their firms within the
Speaker 1: next two years. What's that about, is that they're leaving
Speaker 1: for good or because they've got a better opportunity. I
Speaker 1: think this is a big surprise coming for a lot
Speaker 1: of companies because executives at all levels are taking stock
Speaker 1: of what happened during the pandemic, whether it was working
Speaker 1: remotely or actually moving out of a particular location, not
Speaker 1: having to commute, being closer to family, and they realize
Speaker 1: that they have alternatives now that we're in a different environment,
Speaker 1: and it doesn't just impact your mid level employees. We're
Speaker 1: going to see the great resignation impact sea level executives
Speaker 1: as well. Peter, We've I've got a real meta question
Speaker 1: for you just in the last forty five seconds that
Speaker 1: we have. What about it your firm at Kelly, What
Speaker 1: are you seeing with hiring your own full time employees,
Speaker 1: your own part time employees? What are you doing inside
Speaker 1: the company right now? Well, we went to a remote
Speaker 1: work environment more than six years ago. We called it
Speaker 1: Kelly Anywhere where we allowed people to work remotely uh
Speaker 1: to balance their life and their work, and it was
Speaker 1: highly adapted by our employees, and we were ready for
Speaker 1: the pandemic when it hit. But we think it pays
Speaker 1: dividends longer term for retaining our employee because we recognize
Speaker 1: that it's not about building your life around work, it's
Speaker 1: about fitting work into your life. Try that at your
Speaker 1: next review meeting, Tim, Okay, I'll be doing it from
Speaker 1: the office, but fitting fitting work around your life. Work
Speaker 1: is my life and I love it. I like those challenges,
Speaker 1: but I'm really trying to fit work around my life yet.
Speaker 1: Next this is Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We gotta
Speaker 1: talk a little bit about COVID. Remember Tim, when among
Speaker 1: the most read stories on the Bloomberg it was always
Speaker 1: the COVID summary and the virus wrap that we're doing
Speaker 1: right like for for months, um on end, it was
Speaker 1: always about what's going on in COVID. It's a little
Speaker 1: bit different nowadays, and yet as you and I know
Speaker 1: over the last few weeks, it's still front and center,
Speaker 1: has a pandemic to endemic at this point. This is
Speaker 1: a conversation we've been looking forward to having Dr Ian LS.
Speaker 1: Spader is clinical professor of medicine at n y U
Speaker 1: Lango Ines Medical Center. He joins us on the phone
Speaker 1: from New York City this afternoon. Dr les Better, How
Speaker 1: are you great? I hope you guys are feeling better.
Speaker 1: You've it's been running through the studio, I say, yeah,
Speaker 1: it has. You're absolutely right. Carol's in a separate room.
Speaker 1: She's gotten it twice, or the things, she's actually gotten
Speaker 1: it three times. I'll let her spill the details. I'm wondering, though,
Speaker 1: how we should be thinking about this, because I gotta
Speaker 1: tell you, even though it does seem like it's endemic
Speaker 1: in the sense that everybody's going to get it at
Speaker 1: some point, our reaction to it still feels kind of
Speaker 1: pandemic e in the sense of isolation for ten days
Speaker 1: for kids under five who aren't vaccinated, for example. Yeah,
Speaker 1: there's no question we're seeing this surge, and exactly as
Speaker 1: you said, B A five, it's about of the cases
Speaker 1: that we're seeing A four A. These are kind of
Speaker 1: the latest omicron variants, right from B A one, which
Speaker 1: originated in South Africa. So you know, we're seeing viral
Speaker 1: mutations exactly as you say, we're seeing reinfection. So this
Speaker 1: virus not only spreads were easily, so more people are
Speaker 1: getting it and they're a little less symptomatic, so they're
Speaker 1: really spreading it before they even feel very sick themselves.
Speaker 1: So it's a little harder to alert other people because
Speaker 1: by the time UH, you do a swab and you've
Speaker 1: been having a call for running nose, you've probably infected
Speaker 1: other people. There's also immunizasion, so people who have had
Speaker 1: either the vaccine or even had covid or getting reinfections,
Speaker 1: and it's about cases are actually reinfection, so you can
Speaker 1: have it two or three times like our good friend
Speaker 1: and UH and co host. So it's very it's very frustrating,
Speaker 1: you know, obviously, and a lot of people say, what
Speaker 1: do I do I feel? Such? Should I test? If
Speaker 1: I do test no positive? Should I take pat slovin?
Speaker 1: Should I you know, tough it out? Would that be better?
Speaker 1: So there's really lots of issues and lots of questions.
Speaker 1: I mean, this is I mean that was my case.
Speaker 1: I got it. I tested positive, I had UM eight fever,
Speaker 1: UH really bad sort of throat, took pack slovid and
Speaker 1: really within twenty four hours felt a real big difference.
Speaker 1: That fever went away, but then it it just I
Speaker 1: felt like I plateaued and just you know, it felt yiky,
Speaker 1: And then I tested negative, came back to work for
Speaker 1: about four days, and then started getting symptoms again. This
Speaker 1: time it was all nasal and just wiped me out
Speaker 1: for two or three days, solid like in bed and
Speaker 1: then trying to find my way back. I feel like
Speaker 1: Ian that we just continue to not know about it.
Speaker 1: I didn't go to the hospital fingers crossed to vaccines
Speaker 1: to boosters. So that's a good thing, right, I mean,
Speaker 1: but there's still like, yes, it's going to hit us. Yeah,
Speaker 1: unfortunately it, Kim says, you know, we're it looks like
Speaker 1: we're evolving into a more gimmick stage. And Thember coronaviruses
Speaker 1: there were four or five, and you know, multiple coronaviruses,
Speaker 1: and typically they've caused cross and colds. And had had
Speaker 1: we not known about COVID, you would have toughed this
Speaker 1: through and said I have a virus, maybe a flu. Okay,
Speaker 1: it's similar. Maybe they mean that as bad. Uh, but
Speaker 1: now that we know to test, people are asking about
Speaker 1: past little bit. But your case is exactly right. First
Speaker 1: of all, we try not to give it to everybody, right,
Speaker 1: because it is a somewhat limited resource. You can't treat everyone.
Speaker 1: And there may actually be some benefit to toughing it
Speaker 1: through and getting you know, a polychlonal response, kind of
Speaker 1: natural immunity may give us an advantage in the future.
Speaker 1: But for people who are older, sicker, maybe have underlying problems. Um, Actually,
Speaker 1: they definitely inhibits the virus, so it slows it down.
Speaker 1: But when you stop after five days, many people will
Speaker 1: get a rebound. The virus hasn't been eliminated, it's just
Speaker 1: slowed down to give your body a chance to respond
Speaker 1: to it. So we do see that. Uh, and there's
Speaker 1: a real question. Is that a real advantage. Maybe it's
Speaker 1: been just to write it through. But what I would
Speaker 1: say is that for people who have underlying medical problems
Speaker 1: and with HIV, cop D, lung disease, liver disease, you know, cancer,
Speaker 1: it's just a big group obesity, those people probably should
Speaker 1: get it. But if you're otherwise young and healthy, it's
Speaker 1: probably better to write it out. Dr les Vader. As
Speaker 1: soon as I'm gonna ask you this question, I'm going
Speaker 1: to drink, you know, curse myself. I guess because I'll
Speaker 1: probably get it. But I somehow have been in an
Speaker 1: apartment for the last Superman rights now with two people
Speaker 1: who have COVID, and I somehow have not gotten it.
Speaker 1: I'm talking to better apartment here in Brooklyn. What do
Speaker 1: we know about people who haven't gotten this? So great question,
Speaker 1: and we definitely see some people like that, people who
Speaker 1: are young and strong like you are either they've had
Speaker 1: other coronaviruses and have a little bit of immunity to
Speaker 1: kind of similar viruses other coronaviruses, or they've had a
Speaker 1: very mild asymptomatic case. We've seen people where they come
Speaker 1: in you test antibodies, they're positive, So either they're vaccines
Speaker 1: have work great, or they've had a very mild case
Speaker 1: they didn't even know it, maybe a call for sniffle
Speaker 1: for a day, didn't test themselves. So, and there are
Speaker 1: some other people whose immune system is very good. There's
Speaker 1: a lot we don't really know about all the details
Speaker 1: of this um and that's why some people get reinfected,
Speaker 1: and why some people can be exposed and really not
Speaker 1: seem to get symptoms at all. A lot that we
Speaker 1: shall have to learn. Yeah, we're masks That's what I'm
Speaker 1: gonna say. So Tim is young and strong and I'm
Speaker 1: old and week ian. You're not coming on anymore. You're done.
Speaker 1: I did not say that exactly what. We love you anyway,
Speaker 1: really appreciate it now. I just I feel like, you know,
Speaker 1: they're no vagaries. And I'll tell you in my case,
Speaker 1: I don't really have major underlying health, but I have
Speaker 1: a tendency to get sick and then be very sick
Speaker 1: for a long time. You're good until b a sex. Okay,
Speaker 1: it's just down the corner. What does that fall? You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Right now, we
Speaker 1: want to tell you about a story you'll find line
Speaker 1: at Bloomberg dot com slash business Week, also on the
Speaker 1: Bloomberg terminal. It's about the fuel theft in Mexico. That's
Speaker 1: a billion dollar program program problem. Excuse me again, although
Speaker 1: there might be a program that's behind it as well.
Speaker 1: And I have to say, Tim, this made me go
Speaker 1: and do some research because I remember back in twenty nineteen,
Speaker 1: a few years ago, there was another story that they
Speaker 1: wrote about. But it was a different type of fuel
Speaker 1: probe problem. Yeah. This story written by Amy Stillman, energy
Speaker 1: reporter for Bloomberg News. Amy joins us this afternoon on
Speaker 1: the phone from Mexico City. Joel Weber is the editor
Speaker 1: of Bloomberg Business Week. He's with me in the Bloomberg
Speaker 1: Interactive Broker studio. Joel. That story that that Carol referenced
Speaker 1: is the gasoline that was being stolen, which am Low
Speaker 1: when he came to power promised to would try to
Speaker 1: get that under control. But there's a new issue now
Speaker 1: and that has to do with liquefied petroleum gas. Yeah.
Speaker 1: So we actually um covered the fuel theft previously, the
Speaker 1: theft of gasoline in Mexico in our highst issue a
Speaker 1: couple of years ago. What was really interesting to me
Speaker 1: here is that Emma takes a lot of credit for
Speaker 1: cracking down on that, and Amy came to us with
Speaker 1: this reporting that was like, yeah, they've actually really uh
Speaker 1: it's been successful on the gas front. Like the whole
Speaker 1: idea of of tapping pimics his pipelines throughout the country
Speaker 1: and stealing gas and this becoming a black market that
Speaker 1: has gone away, but in its place liquefied Uh, natural
Speaker 1: gas has become the problem that is now filling this void,
Speaker 1: and it's almost exactly the same as before. It's not
Speaker 1: as big of a problem yet, but the numbers have skyrocketed. UH.
Speaker 1: And so Amy walk us through what why this keeps
Speaker 1: happening in Mexico and what's different at this time? Great, yes,
Speaker 1: thank you very much. UM. So essentially that's correct, UM,
Speaker 1: what we found to our reporting UM, and it's involved
Speaker 1: going to some of the more dangerous places in Mexico
Speaker 1: where UM staff of fuel and different types of fuel,
Speaker 1: including gasoline and liquified petroleum gas LPG is continuing, UM,
Speaker 1: you know, and spoke to residents in these places to
Speaker 1: try to understand how the market has changed since ANLO
Speaker 1: cracked down on fuel theft UM, which is known locally
Speaker 1: as watching polls UM. And you know what we found
Speaker 1: was some interesting UM, some interesting changes, uh, not all
Speaker 1: entirely good. UM. It's correct that according to the official numbers,
Speaker 1: gasoline staff, gasoline and diesel thefts has fallen by um,
Speaker 1: you know somewhere between nine pent um since from before
Speaker 1: a lag into power. And that's obviously a very big number,
Speaker 1: and it's a number that UM. The President has been
Speaker 1: boasting about, you know, for the past several years ers UM.
Speaker 1: It's arguably one of his uh, you know, greatest victories
Speaker 1: and in the fight against crime and corruption here in Mexico.
Speaker 1: But what we found when we went to these places
Speaker 1: is that UM LPG, which is UH it's a type
Speaker 1: of fuel that Mexicans use UM to heat water in
Speaker 1: their homes, they used for cooking. It's actually replacing the
Speaker 1: gasoline staff UM. This is especially the case in UH
Speaker 1: the state of Puebla, which is responsible for about sixty
Speaker 1: percent of the LPG sath UM that's currently going on.
Speaker 1: And what we found is that a lot of the
Speaker 1: seeds that were previously stealing gasoline, you know, have replaced
Speaker 1: it with LPG. Why is this happening UM? One reason,
Speaker 1: very simply is that AMLO has focused on gasoline deaths,
Speaker 1: and what that means is that he's put in place
Speaker 1: UM military surveillance and to protect pipelines that carry g selene.
Speaker 1: LPG arguably isn't getting the same treatment, so it's easier
Speaker 1: to tap the pipeline. UM. They aren't being UM monitored
Speaker 1: as closely. Then the other ar human is a bit
Speaker 1: more structural UM, which is to say that that probably
Speaker 1: remains a big problem in these areas, and so people
Speaker 1: don't really have a choice. Okay, so lots of unpack here,
Speaker 1: LPG being a different fuel, I'm curious, like it's not
Speaker 1: in the same pipeline, right, So, but you know, we
Speaker 1: if we've seen the government be able to actually protect
Speaker 1: the gasoline pipelines and and crack down on the illegal
Speaker 1: trade there, why haven't they been able to crack down
Speaker 1: on the on the theft of LPG. Well, this is
Speaker 1: a very good question and one that UM, the LPG
Speaker 1: associations that I've spoken to, you know, are also asking
Speaker 1: they want to know why I am low isn't doing
Speaker 1: more to address this. Um. You know, one of the
Speaker 1: reasons is that it's a brand new market. It really
Speaker 1: popped up under his administration. UM, and it could be
Speaker 1: the case that they, you know, that the government will
Speaker 1: start to look at it, and you know, if it
Speaker 1: continues to grow. Now I think it's important here is
Speaker 1: that it remains somewhat small. You could say, I mean
Speaker 1: it one third size of the annual losses that p
Speaker 1: X had during the the sort of gasoline death before analysts.
Speaker 1: So on the right hand, it's one third as big.
Speaker 1: But um, the fact that it's grown not much in
Speaker 1: the past to two to three years is it says
Speaker 1: a lot. So it's certainly something that I'll have to
Speaker 1: address any big problem. And I always you know, stories
Speaker 1: like this, and I was like, well, why is it happening?
Speaker 1: And it really gets to poverty issues. Correct, yes, exactly. UM.
Speaker 1: You know, one of the issues with with any of
Speaker 1: this theft is that, um, this is occurring in zones
Speaker 1: in Mexico, UM, you know where they're obviously large pipeline
Speaker 1: networks that they run through to of rural areas where
Speaker 1: there's really not a huge amount of income coming into
Speaker 1: these towns. UM. You know there there's not a lot
Speaker 1: of industry, and so you know, stealing fuel has been
Speaker 1: a practice that UM residents have been doing in these
Speaker 1: places for a really long time, to the point where, um,
Speaker 1: you know, most of them don't even consider it to
Speaker 1: be a crime. It's sort of just considered like you
Speaker 1: know what you do, you buy, you know, you you
Speaker 1: you trap and pindis typeline and you sell it on
Speaker 1: the side of the street and people buy it and
Speaker 1: it's just just sort of you know, local practice. UM.
Speaker 1: And so you know, it's been this very complicated issue
Speaker 1: whereby um, you know, as poverty hasn't really been addressed,
Speaker 1: people don't see, you know, an alternative. And one thing
Speaker 1: I just want to highlight when I spoke to a
Speaker 1: lot of the residents, for instance, in in the state
Speaker 1: of Hidalgo in central Mexico. You know, what they've told
Speaker 1: me is that why would they go and buy from
Speaker 1: a gasoline station when they can get it, you know,
Speaker 1: half the price on the street, and that they can't
Speaker 1: really afford otherwise. A lot of these people are unemployed,
Speaker 1: um you know, or not really earning much and obviously
Speaker 1: you know, hit by the pandemic and recession in Mexico
Speaker 1: that hasn't really helped matters. Well, it's another great story
Speaker 1: and an ongoing problem, but a different part of the
Speaker 1: energy world when it comes to Mexico. Um, Amy, thank
Speaker 1: you so much. Amy Stillman, energy reporter at Bloomberg News,
Speaker 1: on the phone from Mexico City along with Jill Webber,
Speaker 1: the editor of Bloomberg Business Week. He's in our Interactor
Speaker 1: Broker studio along with Tim and this is a story
Speaker 1: you'll find online at Bloomberg dot com, Slash business Week
Speaker 1: and on the Bloomberg terminal. Be sure also that to
Speaker 1: check out the special double issue that is still out there,
Speaker 1: the Heist Issue. Lots of fun stories certainly heading into
Speaker 1: the weekend. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So, Bitcoin,
Speaker 1: as we've been talking about, on course for its best
Speaker 1: weekly gain in since March, helped by return of risk
Speaker 1: appetite in the global markets more broadly. But we've got
Speaker 1: to remember Tim right, it has tell some six year
Speaker 1: to date and we've seen a lot of carnage. Yeah.
Speaker 1: Some of that carnage includes Celsius, it includes what's happened
Speaker 1: at block Fi in recent weeks. Of course, it's three arrows,
Speaker 1: capital management and more. Really eager to chat with our
Speaker 1: next guest, Corey Clipstons, CEO at Swana Bitcoin. It's a
Speaker 1: financial services platform that helps people buy bitcoin. Corey joining
Speaker 1: us this afternoon from Los Angeles, California. Corey, how are you.
Speaker 1: I'm welsome and hi Carol, and thanks to both of
Speaker 1: you for having me on again. Corey, I gotta give
Speaker 1: you credit where credit is due. We spoke about a
Speaker 1: month ago and you called a lot of what we
Speaker 1: saw in terms of carnage over the last month. I'm
Speaker 1: wondering what you're seeing when you look out across the
Speaker 1: landscape here and if there is going to be another
Speaker 1: shoe that drops here. Yeah, I think what we're basically
Speaker 1: seeing is the unwind of a business model that never
Speaker 1: should have existed. And we've been calling it DeFi lending
Speaker 1: as a centralized finance supposedly juxtaposed with allegedly decentralized finance.
Speaker 1: Questionable whether that actually exists in crypto. But these businesses
Speaker 1: like selfiust block Fi, Nexto abre uh, and there's more
Speaker 1: obviously evolved just kind of went under last week as well,
Speaker 1: have benefited from being in this new space that hasn't
Speaker 1: been regulated according to the laws on the books. And
Speaker 1: what they've done is without coversight and without any sort
Speaker 1: of rules, gathered retail investors and calls them depositors, but
Speaker 1: in the fine print explaining that they're actually unsecured creditors.
Speaker 1: And so every user of selfius actually loaned their money
Speaker 1: to Celsius in the promise of some return, and Celsius
Speaker 1: could do whatever they wanted with that money. And this
Speaker 1: doesn't happen in that way without insane levels of you know,
Speaker 1: guide rails and oversight and compliance, etcetera. You don't have
Speaker 1: Citadel going out there and promising five percent returns were
Speaker 1: a high yield savings account to retail depositors, because that's
Speaker 1: the information they Senttry inherent in a relationship like that
Speaker 1: is just too much. You can't have hedge funds and
Speaker 1: prop trading desks going out there and recruiting deposits from
Speaker 1: retail investors unless you have oversight and regulations. Would you say, exactly, exactly, Yeah,
Speaker 1: So they This is something that I think was a
Speaker 1: short window in time for the last couple of years,
Speaker 1: all these businesses exploded in assets under management and invaluation.
Speaker 1: And the entire reason that these types of businesses don't
Speaker 1: exist in traditional finance without tons of transparency and regulators
Speaker 1: looking into who they're lending out to what they're actually
Speaker 1: doing with people's money, because these are essentially they really
Speaker 1: are banks. It's kind of like wildcat banking from back
Speaker 1: in the day, taking gambling with their users money. Corey,
Speaker 1: there's a great Bloomberg opinion piece, at least I think
Speaker 1: it's great written by the opinion right and the headline
Speaker 1: is giving thanks for crypto as well timed meltdown, and
Speaker 1: it says, rarely has a crisis been so well timed.
Speaker 1: Crypto managed to boom and crash before it became too
Speaker 1: connected to the broader financial system. So I guess they
Speaker 1: would argue, I would argue right, like to some exaid,
Speaker 1: I'm glad to see kind of some of this stuff carnage.
Speaker 1: I I don't want anybody be hurt. It's there have
Speaker 1: been a lot of people who have been hurt, well
Speaker 1: not as many as could have been, though, And and
Speaker 1: maybe I don't know, I don't know who it's the
Speaker 1: fault of. I mean, everybody was so quick to jump
Speaker 1: on the crypto bandwagon that like nothing could go wrong
Speaker 1: and buy or beware as an investor, perhaps, yeah, I
Speaker 1: think that it is obviously extremely sad for those people
Speaker 1: that were stucker in by false marketing from some of
Speaker 1: these platforms. On the other hand, a lot of people
Speaker 1: we're greedy and we're chasing something and kind of new,
Speaker 1: you know, in their gut a bit that something was off.
Speaker 1: If you're looking for or interest on savings deposit, essentially
Speaker 1: when the bank is offering you point five percent, and
Speaker 1: you know it's not fd I C insured. And everyone
Speaker 1: on bitcoin Twitter is warning you every day for the
Speaker 1: last two or three years that these things are risky
Speaker 1: and probably are cross loaning to each other, and you
Speaker 1: don't know where the holes are, and you don't really
Speaker 1: know what they're doing with this money. And now you
Speaker 1: know with this lawsuit coming out against Celsius, at least
Speaker 1: the allegations in the lawsuit that was filed yesterday, we
Speaker 1: find out that they were gathering user deposits, going and
Speaker 1: gambling with them, and also using those new user deposits
Speaker 1: to pay interest to the old ones, also known as
Speaker 1: the ponding schemes. Corey, we only have about forty seconds
Speaker 1: left here, but I'm I'm wondering what this means for
Speaker 1: the ecosystem. Your company swant Bitcoin. It's a financial services platform.
Speaker 1: It helps automate purchasing bitcoin. Do you worry that the
Speaker 1: carnage that we've seen over the past few months will
Speaker 1: affect interest in bitcoin? So broadly this is wildly bullish
Speaker 1: for bitcoin only companies that don't rehypothecate user funds, and
Speaker 1: they'll take risks with their users funds. So it's been
Speaker 1: fantastic for us and for people coming over and joining
Speaker 1: Swan and sort of getting interested in us, and obviously
Speaker 1: it wipes out a massive business model that was competing
Speaker 1: in the bitcoin on ramp space with these risky yields
Speaker 1: and kind of stucking a lot of the air out
Speaker 1: of the room for the last couple of years. And
Speaker 1: those competitors are essentially all gone. So it's been very
Speaker 1: good for us. Hey, Corey, we'll have to certainly continue it.
Speaker 1: They've got a table it for now, but we look
Speaker 1: forward to having you back with us. Corey Clipson, he
Speaker 1: is chief executive officer at Swan Bitcoin. On the phone
Speaker 1: from Less Angelis, California. You are listening and watching Bloomberg
Speaker 1: Business Week from Bloomberg Radio. I'm roc journal. Yeah, but
Speaker 1: you let me drive? Oh no, no, no no, no, hol please,
Speaker 1: I'll do the riding. I want to drive. It's good question.
Speaker 1: This is the drive to the clothes well down on
Speaker 1: Bloomberg Radio. All right, just got about ten and a
Speaker 1: half minutes left in today's trading session. We are getting
Speaker 1: ready to wrap up this holiday short and trading week.
Speaker 1: We've been bouncing around a little bit and we're actually
Speaker 1: seeing a slight gain on the NASDAC. But we're definitely
Speaker 1: off our highs of the session, so Tim, let's get
Speaker 1: to it. We got Charlie Massimo, senior vice president and
Speaker 1: financial advisors that Wealth Enhancement Group, joining us on the
Speaker 1: phone from Blue Point, New York. Charlie also specializes in
Speaker 1: planning for families impacted autism. We've talked about that with
Speaker 1: him in recent months. Charlie, really good to have you
Speaker 1: back with us. How are you, Graham, great, Thanks so
Speaker 1: much for having me again. Well, at least when it
Speaker 1: comes to today the SP five hundred searching for direction,
Speaker 1: bouncing between gains and losses is Carol mentioned down Well,
Speaker 1: now it's not exactly it's it's flat, okay, just keeps
Speaker 1: turning red or green when I look at the terminal
Speaker 1: right here. Help us make sense of what's going on
Speaker 1: in the context of that hotter than expected jobs report
Speaker 1: that we got earlier, Well, I think I think you
Speaker 1: have a lot of people focusing on a short term number,
Speaker 1: which certainly is important, but I think when you stretch
Speaker 1: it out, it's kind of showing that the economy is
Speaker 1: still really strong, and you see jobs being jobs continued
Speaker 1: continuing to grow, and I think you're finding the markets
Speaker 1: trying to find a bottom here, and I think this
Speaker 1: has been a very constructive week two weeks actually for
Speaker 1: the market. And again I would never predict the bottom.
Speaker 1: You just never know where it is. But I think
Speaker 1: this has been a very constructive week on the positive side. Well,
Speaker 1: and what does it mean now in terms of I mean,
Speaker 1: do you want to see a day where we just
Speaker 1: tumble like crazy and there's a lot of strong volume
Speaker 1: or do you feel like we've already had that day? Well?
Speaker 1: I don't, certainly we we won't know until it's happened.
Speaker 1: But I'd rather see things kind of go creep along
Speaker 1: then either go straight up or straight down, which is
Speaker 1: never really that healthy for the market. But when you
Speaker 1: start to see increments, small increments either down or up
Speaker 1: um and each day it seems like we're making higher lows,
Speaker 1: and I think that's again a very positive impact for
Speaker 1: the markets. And again I think investors need to always
Speaker 1: kind of ignore the short term noise and continue to
Speaker 1: stay focused on what their long term vision and goals are.
Speaker 1: It's so it's it's easier said than done, right. So
Speaker 1: much of this is psychology, and so much of it
Speaker 1: I think for for many investors, especially long term investors,
Speaker 1: is trying to look past those short term moves. But
Speaker 1: there is a lot to think be concerned about, at
Speaker 1: least in the short term. Here. Yes, we've got a
Speaker 1: strong labor report for the month of June, but Charlie,
Speaker 1: there are a lot of concerns about inflation out an
Speaker 1: economic slowdown, not just here in the US, but globally
Speaker 1: as well. And I wonder what you think in terms
Speaker 1: of what's priced in right now when you take a
Speaker 1: step back and think about all the challenges that the
Speaker 1: US and world economies are facing. Yeah, it's a great point.
Speaker 1: And as an investor, even in good times, there's always
Speaker 1: a reason to be concerned, to be fearful, because there's
Speaker 1: always something out there that could be the next shoe
Speaker 1: that drops. But again, I I think there's a lot
Speaker 1: of transparency with the Fed. They've told us a lot.
Speaker 1: I think we've expected, or we're expecting a lot of
Speaker 1: what they're going to do. We kind of we're reading
Speaker 1: about Russia every single day. We're not seeing any additional
Speaker 1: surprises there. So I think there's a lot of the
Speaker 1: market that's already been priced in because of the transparency
Speaker 1: of the FED and because now expectations are fairly manageable,
Speaker 1: and I think the next turtle is going to be
Speaker 1: next week when we start to see earnings reports. What
Speaker 1: do you anticipate that we'll get from earnings? I know
Speaker 1: we're expecting still earning this growth, but I think there's
Speaker 1: some concern about margins and margin compression um and I'm
Speaker 1: really looking forward to, like you, I think to the
Speaker 1: commentary that we get at. What kind of picture do
Speaker 1: you think they might paint. I think they're going to
Speaker 1: be more positive than people are expecting. We've had positive
Speaker 1: guidance for so long now, and I think that positive
Speaker 1: guidance is going to continue. And I think when we
Speaker 1: have some surprises to the upside, I think you're going
Speaker 1: to see a fail I think you can see a
Speaker 1: fairly explosive market on the upside next week when we
Speaker 1: see some earnings that are fairly surprising. You have to
Speaker 1: remember we're not investing in stocks, were investing in great companies.
Speaker 1: And to think that these great companies lost a third
Speaker 1: of their value in six months, you know, I see
Speaker 1: that very hard to to fathom. So I think you're
Speaker 1: gonna start to see these strong companies produce some very
Speaker 1: good numbers, and just to do a little bit of
Speaker 1: a tease him. One of my gainers actually has to
Speaker 1: do with the name that analysts are like, you know,
Speaker 1: look at how much it's been beaten up, look at
Speaker 1: its price to earnings, saying that maybe it's just time
Speaker 1: to buy it, Like I do think you do see
Speaker 1: the Alice community, the investment community looking at some of
Speaker 1: these names, starting to look at the fundamentals and saying
Speaker 1: it's kind of overdone. Yeah, I I totally agree, And
Speaker 1: I think as an investor, you need to look at
Speaker 1: your portfolio. You need to what to understand what's in it,
Speaker 1: and now is the time to kind of reposition your portfolio,
Speaker 1: take advantage. You know, this is not the time to
Speaker 1: get fearful. This is the time to get aggressive. I
Speaker 1: know T bills, you know, short term T bills are
Speaker 1: paying three percent, looks real attractive. But when you look
Speaker 1: at every bowl market and to give up twenty the
Speaker 1: thirty returns which may came, which may come in the
Speaker 1: next year to two years, again, you have to be
Speaker 1: aggressive as an investor right here, prudently aggressive, but certainly aggressive.
Speaker 1: But is it what about somebody who's saying themselves. Okay,
Speaker 1: I want to be aggressive right now, but you know
Speaker 1: if I if I do this now, then two weeks
Speaker 1: or two months from now, we could see another twenty
Speaker 1: percent to client, and I'll be kicking myself. We could
Speaker 1: always say that, like in the short term, I can
Speaker 1: tell you where things are going. I don't think anyone
Speaker 1: could predict it. But in the long term I could
Speaker 1: tell you three, five, ten years, it's the markets will
Speaker 1: be much higher than where we are today. But again,
Speaker 1: you need to be prudent, you know. I always say
Speaker 1: this thing. You know, you don't want to have beer muscles,
Speaker 1: you know, and being explained what beer muscles are? Charlie.
Speaker 1: We're talking about this on our planning call this morning
Speaker 1: because our editor Paul Brennan, in his notes to us,
Speaker 1: brought it up. What are beer muscles? All Brennan? Is
Speaker 1: he shaking his head? Does he have beer muscles? What
Speaker 1: do He's got? Two thumbs up? Right now? Okay, good,
Speaker 1: all right, take it away, Charlie. Listen, we all have
Speaker 1: those beer muscle experiences in college that we wake up
Speaker 1: the next morning and regret. So many investors do the
Speaker 1: same thing in bull markets, you know, Bitcoin is the
Speaker 1: greatest example of people flexing their beer muscles. And there's
Speaker 1: no right for many investors to have Bitcoin in their portfolio.
Speaker 1: But certainly it's the fear of missing out. Um and
Speaker 1: I can even name other names you know better companies
Speaker 1: like Netflix, Alphabet Um, some of these companies that are
Speaker 1: down thirty Yet investors were gearing up on owning these
Speaker 1: shares when they were two to three years away from
Speaker 1: retirement because they were afraid of missing out. You have
Speaker 1: to stay disciplined, and you have to stay prudent in
Speaker 1: both good markets and bad markets, and that will help
Speaker 1: you get through any type of market. Netflix is down
Speaker 1: so far this year. It's wild. Yeah, yeah, yeah, you know,
Speaker 1: people think stocks can't come down until they come down.
Speaker 1: Markets go up, markets go down. We talk about it. Hey, Charlie,
Speaker 1: thank you so much, really appreciate and good to catch
Speaker 1: up with you on this Friday. Charlie Maso, he's senior
Speaker 1: vice president financial advisor at Wealth Enhancement Group. Your muscles, Carol,
Speaker 1: we had beer jackets and calls I want to call
Speaker 1: it in Central Maine where you know in January it's
Speaker 1: like zero degrees. Want to keep you warming, mean out
Speaker 1: in the cold. Yeah, so you have a few beers,
Speaker 1: you get a little warmer. Is that your jacket? Nice
Speaker 1: to note beer muscles, beer muscles. I thought beer muscles
Speaker 1: is like lifting, you know, a six pack in each arm,
Speaker 1: something like that. Thanks for listening to Bloomberg Business Week.
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