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
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: plus technology, politics, economics, all purtnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
Speaker 1: analysts in more than one twenty countries. You can download
Speaker 1: Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Also never stopping are the
Speaker 1: headlines when it comes to the pandemic and the vaccine.
Speaker 1: Connecticut New York among the ten U S states with
Speaker 1: the biggest declines in new cases during the week through Wednesday.
Speaker 1: That's according to the CDC. They put that data out today.
Speaker 1: Infections in the US Northwest, though Tim they continue rising.
Speaker 1: Troubled spot though China, Yeah, Russia also suffering its deadliest
Speaker 1: September since World War To Denmark, one of the highest
Speaker 1: vaccination rates in the world, were more than double its
Speaker 1: testing capacity after a number of virus infections jumped in
Speaker 1: recent week seeing different things play out in different parts
Speaker 1: of the world and even different parts of the U S.
Speaker 1: Al right, so let's get to it. As he always
Speaker 1: joins us on Fridays, or at least typically, Dr Ian
Speaker 1: los bed or clitical professor of Medicine at n y
Speaker 1: U Land going back with us, and he's on the
Speaker 1: phone in New York City. Dr los Bed are nice
Speaker 1: to be back with you on this Friday. The China
Speaker 1: stuff is troubling to me because it feels like they
Speaker 1: have been on top of it. We know that they
Speaker 1: have kind of basically locked people into their homes when
Speaker 1: there's outbreaks. They have a vaccine, and yet China we
Speaker 1: saw intercepting two bullet trains headed Debijing on concerned staff
Speaker 1: may be infected. They now have cases in almost half
Speaker 1: of its provinces from the latest flare up China. Does
Speaker 1: that mean they're vaccine isn't working? How do you see that?
Speaker 1: Happy Friday guys? Yeah, definitely. Um. We we still are
Speaker 1: wrangling with COVID and it looks like we will globally
Speaker 1: still have quite a ways to go, certainly pandemic, perhaps endemic,
Speaker 1: but we're not done with viral mutations. Right, as long
Speaker 1: as there is not really herd immunity, there's the opportunity.
Speaker 1: We're seeing this in the UK with the Delta plus
Speaker 1: variant that's about six to that is somewhat resistant and
Speaker 1: to our alpha vaccines. That's really part of the problem
Speaker 1: is until you get everyone either infected or or vaccinated,
Speaker 1: you do risk having these mutations. To data from China
Speaker 1: has always been a little sketchy. Exactly how many cases,
Speaker 1: how well the vaccine works very unclear. It does appear
Speaker 1: that Sputnik and the Signo vac are not as effective
Speaker 1: as the uh, you know, M R and A vaccines
Speaker 1: or even a J and J vaccine that's been used.
Speaker 1: So I think that is potentially again a global risk,
Speaker 1: just like India when Delta first occurred, we were like, oh,
Speaker 1: just a few cases, and now that's a global dominant strain.
Speaker 1: What's happening in China could be another risk. Unfortunately, what
Speaker 1: about what's happening in the UK, Because I think about
Speaker 1: throughout the pandemic, we've sort of seen what happens in
Speaker 1: the UK start to happen in the United States a
Speaker 1: few weeks later. That's sort of how it's play out.
Speaker 1: Uh NBC is reporting that a sub variant of COVID
Speaker 1: nineteens delta strain is now emerging in the UK and
Speaker 1: it now makes up of cases there what's going on?
Speaker 1: So that is the a Y four point two variant,
Speaker 1: and it is a couple of mutations in the in
Speaker 1: the delta variant from our alpha original strain. Even though
Speaker 1: it's about ten it does and it appears to be
Speaker 1: slightly more infectious. It doesn't appear to be any more
Speaker 1: letho or have any any further complications. So I don't
Speaker 1: think that at this point is going to be a
Speaker 1: serious risk to US or to the UK. But it
Speaker 1: does show how over time you're just getting more mutations
Speaker 1: and potentially any one of them could be more adaptable
Speaker 1: or more um transmissible or more lethal um although over
Speaker 1: time we tend to see these viruses tend to mutate
Speaker 1: to be more infectious but less lethal, So that I
Speaker 1: guess is the good news. Um. I just feel like
Speaker 1: there's like the same headlines we're dealing with on a
Speaker 1: weekly basis, but we do get some more information whether
Speaker 1: it's mixed and match. You know you've had the virus.
Speaker 1: I don't need a vaccine. We just talked to him
Speaker 1: and I earlier about no, you actually still need to
Speaker 1: get the vaccine. As we all continue to kind of
Speaker 1: increasingly walk out into the world and start to resume
Speaker 1: our normal lives, what do we need to keep front
Speaker 1: and center here Ian when it comes to COVID. So
Speaker 1: certainly people who have had COVID, and many people don't
Speaker 1: know they've had COVID, they may be very They could
Speaker 1: have had a simple upper respiratory tract infection. Not everyone
Speaker 1: gets that seck, so we may have better heard immunity
Speaker 1: than we think. But for the people who do know
Speaker 1: they've had COVID, they may be able to get what's
Speaker 1: called hybrid immunity, which really just one m R and
Speaker 1: a shot. Hopefully there's not a lot of vaccine hesitancy,
Speaker 1: but you know, to get you to refiser and maderna
Speaker 1: shot if you've had COVID probably really boost your antibodies
Speaker 1: and certainly would boost your protection for a long period.
Speaker 1: But this is what we're seeing with some of the
Speaker 1: vaccine mandates, and healthcare workers and cops and firemen saying, hey,
Speaker 1: I might have had it. Why why you're making me
Speaker 1: go through a vaccine there's some data that it may
Speaker 1: be helpful, but there's also some data that if you've
Speaker 1: had it, you're reasonably protected for a while. But the
Speaker 1: CDC still says to get vaccinated even if you've had COVID. Yes,
Speaker 1: there's no question that getting the hybrid you know, vaccine
Speaker 1: meaning you've had COVID you most people lose their antibodies
Speaker 1: over time, even if they have cellular immunity. But getting
Speaker 1: a booster shot definitely improves um your antibody response and
Speaker 1: your survivability. So it it is, But do you really
Speaker 1: need two shots after that? Most people would say no.
Speaker 1: Probably one shot is all you need to boost your
Speaker 1: immunity and decrease your risk of transmission. So everybody should
Speaker 1: probably eventually get a booster. But that's you just need
Speaker 1: one booster. You don't need to write exactly. Those are
Speaker 1: the people who've who have had COVID or who've had antibodies,
Speaker 1: and it's certainly reasonable for some people to check antibodies.
Speaker 1: If you're antibodies are still positive, you know, yes you
Speaker 1: would get a boost, but that's you know, less of
Speaker 1: a serious concern. All right, really appreciate it, Ian, thank
Speaker 1: you have a great weekend. Dr Ian lesbad Our, clinical
Speaker 1: professor of Medicine at n y U Landgo Medical Center,
Speaker 1: on the phone from New York City. You know, I
Speaker 1: was at a point where was it racing to get
Speaker 1: a booster. I kind of pulled back and just thought,
Speaker 1: I gotta wait my turn. It's funny. Do you see
Speaker 1: this play out? My brother who's a teacher in Washington
Speaker 1: got his. My other brother who works in education, just
Speaker 1: got his today in California. Right, We're seeing them certainly happen. Alright,
Speaker 1: this is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bomberg Quick Takes Tim Stinovic on Bloomberg Radio
Speaker 1: and Facebook Meta platforms is at about two pc as
Speaker 1: we speak on this Friday. Hey, there's some news out there.
Speaker 1: First up, we got the name check name change, I
Speaker 1: should say. Then we got the company going after the
Speaker 1: Apple Watch. Let's bring in Bloomberg News Technology report of
Speaker 1: Mark German joining us on Bloomberg Radio and on YouTube.
Speaker 1: So Mark, what do you know? Thanks for having me?
Speaker 1: I mean, who else to talk about an Apple Watch competitor?
Speaker 1: Then the guy who covers Apple right, So, um, we
Speaker 1: know we've known for a little bit of time now
Speaker 1: that Facebook is working on a smart watch. But yesterday
Speaker 1: we actually got our first look at the device. We
Speaker 1: obtained a photo or an official render of the Facebook
Speaker 1: smart watch. H this was this is actually really cool,
Speaker 1: this is really interesting. So we found it with the
Speaker 1: help of a friend of mine and developer named Steve Moser,
Speaker 1: inside of the Facebook app that the company offers to
Speaker 1: consumers today to control remember those rayband smart classes and
Speaker 1: Facebook launch a few weeks ago to troll those. So
Speaker 1: they did a software update earlier this week for that
Speaker 1: app called Facebook View and that image if you really
Speaker 1: deep dive in into the source code, into the file
Speaker 1: system of that application, it's just hiding in there, and
Speaker 1: they added it in there this week. So pretty remarkable stuff. Mark.
Speaker 1: The first thing that sticks out to me when I
Speaker 1: saw this image in the story that you published was
Speaker 1: the camera at the bottom of the smart watch. What
Speaker 1: is that for? Because that's different than an Apple Watch.
Speaker 1: There's no camera on an Apple Watch. Oh man, I
Speaker 1: don't know what they're thinking. So first of all, it's
Speaker 1: like a notch, right, It's like a little circle at
Speaker 1: the bottom of the screen. So they cut into the screen. However,
Speaker 1: what I will say is that I think people have
Speaker 1: been clamoring for video chat on the Apple Watch for
Speaker 1: a few years now. They haven't done it because of
Speaker 1: battery life concerns. They certainly tested it totally imagine. You're right,
Speaker 1: but like, imagine being able to do a video chat
Speaker 1: on your risk, not a one minute chat. I mean
Speaker 1: that would be kind of cool inspector Gadget style. Right,
Speaker 1: I've done the phone call on it. I feel a
Speaker 1: little bit like a nerd, but it's been kind of cool.
Speaker 1: But you're right. If we could get a video chat,
Speaker 1: oh my god, I would be all in. So that's
Speaker 1: Facebook's portal system. Facebook has this portal kind of like
Speaker 1: Alexa device that might work with it, right, yeah, I
Speaker 1: mean that would make sense to me, using the same
Speaker 1: protocols there is that the portal uses. Maybe they'll brand
Speaker 1: it as a portal watch or some sort of device.
Speaker 1: What's interesting to me is that a lot of the
Speaker 1: feedback I've been hearing on this product already has been
Speaker 1: people saying I don't want a camera from Facebook, let
Speaker 1: alone in my home. You're telling me I would want
Speaker 1: one on my body, thanks? Right? Um, these are there
Speaker 1: are real privacy concerns and the Facebook brand was so
Speaker 1: tarnished in terms of privacy. There's a reason they're Meta now, right,
Speaker 1: So we'll see how this does. If the ray bands
Speaker 1: are any indication, I don't think this is going to
Speaker 1: be a slam dunk. What I'm told is the Facebook
Speaker 1: has not made a final decision yet on if they're
Speaker 1: going to release this product, this particularly particular design. What
Speaker 1: I'm told they've developed models aimed at and when they
Speaker 1: decide to launch it, whether that's in twenty two or
Speaker 1: twenty four, they'll launch that corresponding model. So there's a
Speaker 1: possibility they skipped the twenty twenty two version and their
Speaker 1: first models the twenty three or twenty four versions. So
Speaker 1: we still may have a few years to go, but
Speaker 1: maybe some new found competition in the watch base for Apple. Well,
Speaker 1: that's what I'm wondering. Does it say something more broadly
Speaker 1: mark about what Meta wants to do when it comes
Speaker 1: to the wearables market and listen, they've got a great
Speaker 1: initially user base that they can tap, but I just
Speaker 1: I wonder about it. Would it still be if they
Speaker 1: get into it a niche market for them like it
Speaker 1: is too Somewhat I guess it's safe to say for Apple,
Speaker 1: Facebook is never going to win the phone. Sorry, Meta
Speaker 1: meta is never going to win the phone. It is
Speaker 1: way too saturated with iOS, Android and some of the
Speaker 1: other devices you see from Samsung and Google and such.
Speaker 1: So they're needing to pick up the edges, right, they
Speaker 1: need to invent this new category. So they're trying to
Speaker 1: own video devices with the portal, with this upcoming watch,
Speaker 1: and of course what they're calling the metaverse with these
Speaker 1: VR and a R devices. So they're really going for
Speaker 1: the edges, and they're trying to build up their own
Speaker 1: new ecosystem to pull people away from Apple. Right. The
Speaker 1: goal is is that Apple, that Facebook meta is going
Speaker 1: to kill the iPhone and Android with these other types
Speaker 1: of devices, replaced the phone with the metaverse with the watch.
Speaker 1: I know that sounds all kind of crazy, but this
Speaker 1: is what they're trying to do. We wait ahead, okay,
Speaker 1: ten seconds mark? What is Apple trying to do in
Speaker 1: the metaverse? Apple is going to announce its first mixed
Speaker 1: reality headset probably later next year. Is Apple going to
Speaker 1: rename itself then bring the computer back in Apple Computer Inc? Meat?
Speaker 1: Maybe look go to Meat. Isn't that what Wayne. Oh,
Speaker 1: Mark German, you are the best. Have a great weekend,
Speaker 1: Mark German. He's a Bloomberg News technology reporter, covers just
Speaker 1: all things Apple, but then when it's something going on
Speaker 1: that might defect Apple, he's on it as well and
Speaker 1: then includes that news out of Facebook, or at least
Speaker 1: speculation not Facebook. Sorry, you're listening to Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes. Tim Stinovich on
Speaker 1: Bloomberg Radio. Let's get to it because one of our
Speaker 1: reporters writing for Bloomberg Business Week. In the current issue
Speaker 1: of the Bloomberg Business Week magazine, it's online on newsstands,
Speaker 1: also on the Bloomberg it's about Facebook now known as Meta,
Speaker 1: including how Meta needs to change more than it's named,
Speaker 1: Tim as the competition among the handful of big tech
Speaker 1: companies really is heating up. Alex Webs, a correspondent for
Speaker 1: Bloomberg Quick Take. He joins us on the phone from London. Alexi, Right,
Speaker 1: for the first time, all five of the U S
Speaker 1: tech giants are going to keep be competing directly. It's
Speaker 1: not clear though, that Mark Zuckerberg can't escape his past.
Speaker 1: How does this change that Zuckerberg outlined this week and
Speaker 1: subsequent name change, how does that put all five big
Speaker 1: tech companies competing with one another head to head? Well,
Speaker 1: I mean it's the name change and all of itself
Speaker 1: that renders the new competition active. But you know, we've
Speaker 1: got at this stage, Apple, Google, Amazon, Microsoft, and Facebook
Speaker 1: all developing products in the augmented and virtual reality space.
Speaker 1: They are on a collision course to be competing with
Speaker 1: one another. The danger, of course with Facebook that Facebook
Speaker 1: has into usually is that the name has become quite toxic.
Speaker 1: And when you're competing with Apple, which has really forged
Speaker 1: a kind of cachet as a company that values use
Speaker 1: a privacy and respects to use a data, that's something
Speaker 1: that Facebook has to deal with because really it's not
Speaker 1: something that we recognize faceboofore all staring so stead and
Speaker 1: giving itself a new name, it's an effort to shed
Speaker 1: itself in some of that toxicity. Join us also, Plumber
Speaker 1: business to get her Joe Webber Agel Hi, Hi, Alex,
Speaker 1: thanks again for this story. Um yeah, it's like this.
Speaker 1: It's the great thing of like, are you willing to
Speaker 1: throw all your cards in the air and just completely pivot? Well, you,
Speaker 1: you know, your your company, and your brain faces like
Speaker 1: the the most scrutiny it's ever phased, and the heat
Speaker 1: just gets turned up and it's like, well, let's just pivot.
Speaker 1: So so Alex. Like when you think about Mark Zuckerberg's
Speaker 1: movie here, like obviously he's been talking about this for
Speaker 1: a while, how quickly though, Like do people in the
Speaker 1: technical universe think that he actually maybe pulled all of
Speaker 1: this together in terms of like, you know, executing it
Speaker 1: as a masterstroke or attempting them to do so. And
Speaker 1: this has clearly been in the works for some time,
Speaker 1: you know, they have. They brought Oculus years ago, Oculus Ripped,
Speaker 1: which is now all being rebranded out as Meta Um
Speaker 1: the rebrand itself. It's hard to know how quickly that
Speaker 1: came together, but the timing is certainly opportunity and at
Speaker 1: the moment when the criticism seems to have reached its
Speaker 1: loudest crescendo to day um. You know, Facebook has been
Speaker 1: through plenty of crises in the past few years, but
Speaker 1: it really feels this time, and maybe I'm wrong, it
Speaker 1: just feels that there is something a bit different. There
Speaker 1: is real meat on the bones of the things that
Speaker 1: they've been doing wrong. There are concrete proposals for what
Speaker 1: they can fix and what they should fix, and um,
Speaker 1: there is legislation in the works both here and in
Speaker 1: the US which gives regulators more power to force them
Speaker 1: to do stuff. So all those things come together as
Speaker 1: a perfect storm. But the timing for changing the name
Speaker 1: is particularly appropriate. Well, so I think you say regulators too,
Speaker 1: and I feel like we have just problems getting basic
Speaker 1: stuff through sometimes in Congress, and I just think how
Speaker 1: a regulator is going to be able to really keep
Speaker 1: up with something like this that Facebook meta is working on.
Speaker 1: It was some point actually made by Nick Clegg, of course,
Speaker 1: the form of British Deputy Prime Minister who now heads um,
Speaker 1: you know, corporate affairs and communications on Facebook. He said
Speaker 1: that the metaverse is not going to arrive tomorrow. It's
Speaker 1: going to take perhaps a decade. That means, in his telling,
Speaker 1: that the regulators have more time to catch up with
Speaker 1: this than they might do normally. Uh, you know, we
Speaker 1: know that they tend to be five years behind any
Speaker 1: technological innovation when it comes to deciding how to regulate it.
Speaker 1: Perhaps this time around that won't be the case. That
Speaker 1: also might just be wished for thinking on our part
Speaker 1: and indeed his Yeah, so, Alex, let's the set Facebook's
Speaker 1: opportunity here compared to some of these other big tech
Speaker 1: players who we also know as you as you wrote,
Speaker 1: will end up in the same swimming pool. Uh, what
Speaker 1: advantages does Facebook have and how does that compare with
Speaker 1: with the other companies since everybody's going to end up
Speaker 1: perhaps having multi metaversees. I actually wonder what you know,
Speaker 1: it's clearly one of the risks with if you're running
Speaker 1: your own sort of metaverse metavirus and metaverse, then you
Speaker 1: are going to be having to manage that content and
Speaker 1: there are going to be content risks in this and
Speaker 1: for all of the problems that Facebook has had managing content,
Speaker 1: and it's got a lot more experience doing it than does,
Speaker 1: for example, Apple, And so that might actually prove to
Speaker 1: be an advantage if you find they are running the
Speaker 1: ecosystem themselves, that they have got people working on these
Speaker 1: problems already, that might give them a jump starts on Apple.
Speaker 1: Where they don't have is a distribution network in terms
Speaker 1: of actually selling devices. Apple and Amazon in particular have
Speaker 1: incredible sales networks. Um, but Facebook does have an interesting
Speaker 1: partnership that it is signed with Slow lux Otica. It's
Speaker 1: not a name that many people know, but it owns
Speaker 1: in the US Ray and Oakley Sunglass Heart. It controls
Speaker 1: of the global eyewear market. And you can imagine that
Speaker 1: you're going in to buy your glasses and there's also
Speaker 1: Facebook Smart glasses in there. Then all of a sudden
Speaker 1: has quite compelling sales channel. That is not, as I
Speaker 1: understand that, the scope of their agreement with a sort
Speaker 1: of good just yet, but it is something that could evolve. Hey, Alex,
Speaker 1: can you talk a little bit about the advertising opportunity
Speaker 1: in the metaverse because Facebook is an advertising company. In
Speaker 1: your story, you talk about the way that Facebook knows
Speaker 1: what you're doing because of what you're doing on Instagram
Speaker 1: and Facebook's apps, But how will it track you and
Speaker 1: then advertised to you in the metaverse? So that is
Speaker 1: absolutely the potentially really creepy thing in the metapurse right now.
Speaker 1: Facebook has pretty granular data on what you're browsing, not
Speaker 1: just what you click on and the accounts you follow,
Speaker 1: but what photos you linger on and therefore on Instagram,
Speaker 1: for example, it knows which things you look at a
Speaker 1: little bit more and is more likely to suggest that
Speaker 1: you follow similar content. Now with the Metaverse, they actually
Speaker 1: showed off technology which is sort of eye tracking m
Speaker 1: gauging your facial expressions. It showed them for different purposes
Speaker 1: to see what you're looking at in order that you
Speaker 1: could decide to, for instance, turn on a light, um
Speaker 1: and face tracking in order to show your expressions on Navatar.
Speaker 1: But it's not hard to imagine how that could also
Speaker 1: be used for advertising purposes, engaging your interest. If you're
Speaker 1: walking down the high street and you see a shop
Speaker 1: window and you think that Facebook that shot window is
Speaker 1: more appealing to you than another one, it can target
Speaker 1: adds theory to you based on that. I wish Facebook
Speaker 1: could see my face right now when you're describing this
Speaker 1: to me, Alex, I'm I'm looking at your face right now,
Speaker 1: and you look a little dubious, um seeing I was
Speaker 1: gonna ask you you want to do this program from
Speaker 1: the metaverse, because is like, I'm just I'm still really curious.
Speaker 1: Like the last time I really really really use Facebook
Speaker 1: was to like email a bunch of graduates from my
Speaker 1: high school class to like we're going to help organize
Speaker 1: a reunion. And now I'm like, well, the reunion was
Speaker 1: terrible anyway, and using you know, drawn back into all
Speaker 1: these old friends. What about Instagram? No, well, I guess
Speaker 1: here's the thing that was Like, could you imagine like
Speaker 1: a reunion that just took place in the metaverse and
Speaker 1: you didn't actually have to like go back to that
Speaker 1: high school, Like okay, that could get to be an
Speaker 1: avatar and look like you did when you're eighteen. Like
Speaker 1: that sounds better than dealing with reality anyway. Right, It
Speaker 1: sounds novel, but it doesn't. I don't know if it
Speaker 1: has staying power, if it's sticky, right, it sounds cool
Speaker 1: to do a few times. My dystopian view is that
Speaker 1: with climate change, we're not gonna be able to go outside,
Speaker 1: so all we're going to have is the metaverse. Happy
Speaker 1: Friday everyone, Sorry you would get teased for what we're
Speaker 1: talking about later on the show, Miss Sunshine. All right,
Speaker 1: Joe Webber, have a great, great weekend, Metaverse or not.
Speaker 1: Alex Web correspondent at Bloomberg Quick Takes. Check out everything
Speaker 1: and check out the new is shoe of Bloomberg Business
Speaker 1: Week magazine. This is Bloomberg Radio. This is Bloomberg Business
Speaker 1: Week with Carol Masser, and Bloomberg Quick Takes. Tim Stinovic
Speaker 1: from Bloomberg Radio. All right, so we talked about Ether,
Speaker 1: second largest cryptocurrency, staring to a record today, about it's
Speaker 1: backed off of that, but a lot of bullish sentiment
Speaker 1: around that because of an upgrade of the Ethereum network,
Speaker 1: and also we've just seen Bitcoin take off big time.
Speaker 1: In a weekly crypto segment, we've got back with us
Speaker 1: Matthew Segeal. Matthew Segel as head of digital Assets at
Speaker 1: van Ack. He joins us on the phone from New
Speaker 1: York City. Matthew, October has been a banner months. But
Speaker 1: for many cryptocurrencies, whether they're meme stock, meme coins I
Speaker 1: almost said meme stocks, they're meme coins, or more established
Speaker 1: cryptocurrencies like Bitcoin or ethereum. What is the next catalyst
Speaker 1: as we looked the remainder of the year that's going
Speaker 1: to continue to send cryptocurrencies higher, Hi can Tim? Hi? Yeah,
Speaker 1: the story remains the same, which is increased activity on
Speaker 1: multiple blockchains, Bitcoin and Ethereum and other smart contract protocols UM.
Speaker 1: So you know, there's going to be close to four
Speaker 1: trillion dollars of value that's sent across the Bitcoin network.
Speaker 1: This year. The same goes for Ethereum. That's four times
Speaker 1: the amount of PayPal growing four times faster. So consumers
Speaker 1: and businesses around the world adopting this technology as a
Speaker 1: way to save costs program instructions into their money. Uh,
Speaker 1: you know, globally seven it's it's a compelling use case
Speaker 1: that continues to take market share, and that's the driver
Speaker 1: of the prices over the last month and for longer.
Speaker 1: Matt gotta ask you. You're just back from El Salvador,
Speaker 1: the Latin American nation last month becoming the world's first
Speaker 1: country to officially adopt bitcoin. Who did you talk with,
Speaker 1: who did you meet with? What are you hearing about
Speaker 1: it and how it's kind of going, because you know,
Speaker 1: that's a test lab, if you will, or test case
Speaker 1: for us when it comes to cryptocurrencies. Yeah, I recently
Speaker 1: returned from a trip there, visited government officials, banks, entrepreneurs,
Speaker 1: went to Bitcoin Beach, was which was really the initial
Speaker 1: catalyst for the adoption of bitcoin is legal tender. Uh.
Speaker 1: They're now more than three million El Salvadorians who have
Speaker 1: used the achieve of bitcoin wallet. They're sending two million
Speaker 1: dollars a day in remittances across the network at zero fees,
Speaker 1: So if you annualize that, that's close to three percent
Speaker 1: of GDP because this is an economy that is really
Speaker 1: dependent on remittances for their growth. Uh. And then the
Speaker 1: country has also recently begun mining bitcoin from the energy
Speaker 1: stranded in their volcanoes. So it's really a remarkable achievement
Speaker 1: that's allowing a very poor emerging market to essentially manufacture
Speaker 1: scarce money using stranded energy resources that otherwise would would
Speaker 1: go to waste. So I found it an incredibly progressive development.
Speaker 1: I think he'll be hearing more news about this over
Speaker 1: the next year, whether it's Ukraine, Belarus, one of the
Speaker 1: French Central African colonies, or maybe even Brazil. There will
Speaker 1: be more countries that adopt bitcoin is legal tender because
Speaker 1: it is a rational counterbound to the dollar who gemony
Speaker 1: that they've lived under for for so long. Did you
Speaker 1: actually get to see, Matthew, the bitcoin mining operations that
Speaker 1: are harnessing volcanic activity. I did not see a first
Speaker 1: hand that that will be uh an experience for for
Speaker 1: a second trip, Okay, because I'm just wondering if they're
Speaker 1: able to do it yet, and how success how quickly
Speaker 1: they were able to do that. You mentioned some other
Speaker 1: countries based on what you saw in El Salvador. What
Speaker 1: do you think this says about where this happens next,
Speaker 1: when or if another country adopts it as legal tender? Sure,
Speaker 1: you know, well some I think it's five percent of
Speaker 1: the world economy is currently you know, facing default to
Speaker 1: the I m F. So you know, countries that have
Speaker 1: been limited or constrained by rules or decisions that you know,
Speaker 1: in a way compromise their sovereignty. These are kind of
Speaker 1: the natural um early adopters to try to create a
Speaker 1: parallel monetary system that restores them some measure of autonomy.
Speaker 1: And the game theory here is that if if one
Speaker 1: country doesn't do it, another will, And El Salvador was,
Speaker 1: in our view, you know, the first of a of
Speaker 1: a tipping point. So it's hard to predict who will
Speaker 1: be next. But there are a lot of nations that
Speaker 1: have adopted the dollar, maybe not as their first choice.
Speaker 1: And what we're learning from El Salvador's experiment is that
Speaker 1: it is possible to forge another path. Well, just like
Speaker 1: to some extent emerging markets, we've seen this kind of
Speaker 1: skip maybe credit card usage and just go right to
Speaker 1: using the plane, using your phone, excuse me, from mobile payments, right,
Speaker 1: and that becoming your bank and everything financial. I do
Speaker 1: wonder if there's something to be said with developing nations, um,
Speaker 1: matt when it comes to crypto use, Will they be
Speaker 1: the ones the really true, as I said, test sites
Speaker 1: and really give us the real world usage of this.
Speaker 1: I think that's spot on. Emerging markets often find it
Speaker 1: rat sal to skip an intermediary technology, you know, such
Speaker 1: as the fax machine and going straight to the internet. Uh,
Speaker 1: and you know that's that's what That's what we're seeing
Speaker 1: with cryptocurrencies pretty broadly. Okay. We saw the launch of
Speaker 1: the first futures back bitcoin et F last week. Yeah, okay, sorry, Okay. Anyway,
Speaker 1: I'm wondering, Matthew, what we're going to start to see
Speaker 1: when it comes to investment products that are available not
Speaker 1: just to retail investors, but from for advisors who want
Speaker 1: to make this available to their clients. Sure, the institutional
Speaker 1: adoption really is the next leg of this story. By
Speaker 1: our estimates, listed companies own about one percent of outstanding bitcoin,
Speaker 1: The Great Scale Bitcoin Trust is another four and then
Speaker 1: with the emergence of these alternative vehicles, such as futures
Speaker 1: ETFs that will just you know, widen the available vehicles
Speaker 1: that institutions can you used to get access to this
Speaker 1: asset class. Um. So as you may have heard that
Speaker 1: bitcoin futures have you know, rather consistently underperformed the spot price, right,
Speaker 1: and so you know, we continue to believe that it's
Speaker 1: a physical bitcoin ets that will be the best vehicle
Speaker 1: for traditional investors to get exposure to this asset class
Speaker 1: and a traditional brokerage account more liquidity, um, you know,
Speaker 1: better tracking error. But you know the regulators have been
Speaker 1: slow to approve that, right. There's been a lot of
Speaker 1: conversations about underlying asset and when it comes to futures
Speaker 1: in cryptocurrencies. Um, thank you so much, really appreciate it.
Speaker 1: Matthew Siegel, he's head of digital assets researcher at Vanneck
Speaker 1: on the phone in New York City. I don't know
Speaker 1: what if I thought it was Pico Bett b I
Speaker 1: T that's one point today. By the way, this month
Speaker 1: crypto goes one way. Yeah, but you let me drive?
Speaker 1: Oh no, no, no, this is not a toy, all right, please,
Speaker 1: I want to dry good. Question is the drive to
Speaker 1: the clothes on Bluebird radio. So just got about ten
Speaker 1: minutes left, getting ready to wrap up the Friday tradeing session,
Speaker 1: getting ready to wrap up the weekend, getting ready to
Speaker 1: wrap up a month. Time? Where does it go? Where
Speaker 1: does it go? Time flies when you're having fun? Uh?
Speaker 1: And we are seeing stucks definitely off their lows, near
Speaker 1: their highs of the session. Let's get to it. I'm
Speaker 1: so excited he's back with us. Love talking with Doug Ramsey.
Speaker 1: He's chief investment officer over the Louthhole Group, their core
Speaker 1: investment fund, by the way, beating most of its peers,
Speaker 1: many of its peers, I should say, a year to
Speaker 1: date up about almost thirteen percent this year in the
Speaker 1: past twelve months. Doug is back with us on the
Speaker 1: phone from Minneapolis. Doug, how are you. I'm doing well.
Speaker 1: What do you make of the market? Trade? Definitely a
Speaker 1: different tone this month versus last month. What stands out
Speaker 1: for you? Well, you know, just the way this market
Speaker 1: is absorbing news is really impressive. I mean, you have
Speaker 1: two titans of industry of technology disappointing uh, yesterday and
Speaker 1: you know here we have we have them and the
Speaker 1: stocks aren't up, but the nastack is up on the
Speaker 1: day and it's up three on the on the week,
Speaker 1: in a week in which sort of the average stock
Speaker 1: and a very good measure of that that we scrutinized
Speaker 1: pretty closely is the value line rithmetic composite. It's sort
Speaker 1: of obscure, but it's valuable because it's stocks equal weighted
Speaker 1: and that's down to percent on the week. So pretty
Speaker 1: pretty odd action. I mean, clearly renewed focus on just
Speaker 1: you know, these megacap tech stocks. It's it's it's pretty amazing. Yeah.
Speaker 1: I think the term that I'm looking for is thank you, Tesla.
Speaker 1: That's what it's. I mean, that's really what this this
Speaker 1: week looked like. And we're seeing that offset. We're seeing
Speaker 1: off that offset losses for UH, for Apple and for
Speaker 1: Amazon today. At least duck Um will help us make
Speaker 1: sense of that a little bit, because you write that
Speaker 1: we're in the steroids era, wiping out all other yardsticks
Speaker 1: of excess. And you illustrate this with something that I
Speaker 1: think a lot of our listeners are familiar with. Anonymous
Speaker 1: owner of a crypto wol it has made almost six
Speaker 1: billion dollars on an eight thousand dollar investment since August.
Speaker 1: What is this is illustrating to you, well, what's interesting.
Speaker 1: I mean you've written about it at length, but I
Speaker 1: mean there's not a lot of widespread commentary on that.
Speaker 1: I mean, this is a six billion dollar trade. I
Speaker 1: mean it totally eclipses, uh, you know, the Big short
Speaker 1: by John Paulson. He personally made four billion dollars back
Speaker 1: in two thousand eight after elaborately structuring you know, there's
Speaker 1: bet against some prime mortgages. And then of course, uh,
Speaker 1: George Sorrows and stand Druck and Miller made a billion
Speaker 1: dollars in a day shorting the short in the pound.
Speaker 1: I mean those stood as like the hallmarks of the
Speaker 1: greatest trades of all time. And and now we have
Speaker 1: a no name and who knows, maybe it's not a
Speaker 1: no name making six billion dollars on an eight thousand
Speaker 1: dollar investment in two months. Just I mean the comparison,
Speaker 1: any comparison to the tech bubble, I mean, we've really
Speaker 1: blown away most of those. Um, I think this year
Speaker 1: with just I mean kicking it off with the big
Speaker 1: short squeeze, you know in game stopped kicking off the year,
Speaker 1: and things have just gotten progressively wackier. What money is
Speaker 1: still floating around? What do you do doug to makes
Speaker 1: sense of cryptocurrencies, Like, as a technician, are there things
Speaker 1: that you feel like with certain conviction that you can
Speaker 1: kind of understand this market better more clearly or I
Speaker 1: don't know. I'm not sure that I do. I think
Speaker 1: it's just a function of the environment. I mean, if
Speaker 1: you think that this mania has got some life left
Speaker 1: in it, and that's you know, there are a lot
Speaker 1: of economists that would point to and I mean, this
Speaker 1: is it's factual. I mean we're only a year and
Speaker 1: a half into this economic expansion. Now. If you look
Speaker 1: at environmental indicators, whether it's economic measures unemployment at only
Speaker 1: four percent, profit margins at record highs, or whether it's
Speaker 1: more market sentiment measures, I mean, none of that stuff
Speaker 1: is early cycle. None of that is consistent with an
Speaker 1: economic expansion that's only a year and a half old.
Speaker 1: More of it's consistent with a single economic expansion that's
Speaker 1: like thirteen years old, being back to oh nine. That's
Speaker 1: what I wanted to ask you. How are we supposed
Speaker 1: to assess the pandemic which was fell apart, economy shut down,
Speaker 1: Everything was fell off a cliff, right, We just stopped
Speaker 1: and then we bounced back when we started to get
Speaker 1: support and we started to get the vaccine. So is
Speaker 1: it just part of the economic cycle that was happening
Speaker 1: or do we look at it as a new cycle,
Speaker 1: especially when you look at the supply disruptions and we're
Speaker 1: trying to reassess, you know, labor, does the market not
Speaker 1: go back to where it was pre pandemic? So are
Speaker 1: we now in kind of a new market cycle era,
Speaker 1: new economic cycle era? You know, I think it's more
Speaker 1: productive to look at it is just you know, an
Speaker 1: extension and an acceleration of a long cycle. I mean,
Speaker 1: it was just a temporary interruption. It was a very
Speaker 1: scary one. But it didn't you do anything to purge
Speaker 1: prior accesses. I mean, to the contrary, I mean, we
Speaker 1: doubled down on prior accesses in terms of you know, uh,
Speaker 1: lobbying on yet another trillion in in corporate debt um.
Speaker 1: I mean, I'm not saying that credit quality is compromised
Speaker 1: because profits are so good right now and rates are
Speaker 1: still low. Why aren't credit? Why is in credit more
Speaker 1: compromised in your view? I mean, why do I think
Speaker 1: it's I mean, spreads are incredibly tight, but you know,
Speaker 1: with rates this low, Yeah, and cash flow pretty strong.
Speaker 1: You know, it's hard to see an imminent weakening and
Speaker 1: credit quality, but I think the risk reward for you
Speaker 1: from here is very appetizing. Hey, you just got about
Speaker 1: a minute or so left here. You know, I love
Speaker 1: talking to you for so many different reasons. But tell
Speaker 1: us when you look at the market. You're neutral on
Speaker 1: the stock market right now? Tell us what you're seeing
Speaker 1: and how we should be playing it as we take
Speaker 1: higher here near the close on this Friday. Well, the
Speaker 1: plane is a good word because it's certainly more speculative
Speaker 1: market than one with a lot of investment appeal. I mean,
Speaker 1: we are one ones as you mentioned, to look to
Speaker 1: look at the charts and you know, with again sort
Speaker 1: of the average stock that value line measure making a
Speaker 1: new high earlier in the week, New York Stock Exchange
Speaker 1: Daily bread making a new high earlier in the week.
Speaker 1: I mean, even though I mean we've rotated back to
Speaker 1: the usual suspects of things, it's still a broad market,
Speaker 1: and it would be very unusual for at the top
Speaker 1: right here with the market as broad as it has been.
Speaker 1: So despite the fact that we don't like valuations, that's
Speaker 1: nothing new in our shop of late and that we're
Speaker 1: leia on the tapering. From a technical perspective, it says
Speaker 1: there's probably more life left before you have a severe setback.
Speaker 1: I think related to the tapering that we gotta run. Sorry, Doug,
Speaker 1: have a good week, and Doug Ramsey, chief investment officer
Speaker 1: at the loose Hold Group, joining us on the phone
Speaker 1: from Minneapolis. Thanks for listening to Bloomberg Business Week. Download
Speaker 1: the podcast on iTunes, soundcrowd, or Bloomberg dot com, and
Speaker 1: you can also listen to our radio show at two
Speaker 1: pm Eastern on Bloomberg Radio, or watch us on YouTube
Speaker 1: search Bloomberg Global News