WEBVTT - Bloomberg Businessweek Weekend - December 30th, 2022 0:00:01.040 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.200 global business, finance and tech news as it happened. Sloomberg 0:00:13.240 --> 0:00:18.320 Business Week with Carol Messer and Tim Stentovic on Bloomberg Radio. 0:00:18.880 --> 0:00:21.439 Hi everyone, Happy New Year. Welcome to our holiday weekend 0:00:21.560 --> 0:00:23.560 edition of Bloomberg Business Week, and Happy New Year to 0:00:23.600 --> 0:00:25.919 your too, Carol, you too. Over the next two hours, 0:00:25.960 --> 0:00:28.200 look back at the year that was, from the NonStop 0:00:28.200 --> 0:00:31.840 discussion over inflation and monetary policy globally to the crypto 0:00:31.920 --> 0:00:35.519 collapses and undoing of the individual considered that you know, 0:00:35.680 --> 0:00:38.560 the Jp Morgan of crypto, we're talking about Sam Bankman Freed. 0:00:39.080 --> 0:00:41.760 We are indeed so important was crypto This year, Business 0:00:41.760 --> 0:00:45.240 Week devote an entire issue to delve into the Crypto story, 0:00:45.560 --> 0:00:48.400 what it's all about. It's a must read. Other issues 0:00:48.400 --> 0:00:50.800 took deep dives into the undoing of Roe, v Wade, 0:00:50.880 --> 0:00:53.640 the New Economy, good business, and more. A many stories 0:00:53.680 --> 0:00:56.200 this year. We're about the world's second biggest economy, though, Carroll, 0:00:56.240 --> 0:00:58.480 we talked about it a lot, and it's constant impact 0:00:58.520 --> 0:01:01.400 on everything we're talking about. China that's right more in 0:01:01.440 --> 0:01:03.240 a moment, and let's not forget the gift that keeps 0:01:03.280 --> 0:01:05.520 on giving this year. Elon Musk and Twitter top tech 0:01:05.560 --> 0:01:08.560 stories in our Business Week Pursuits team, they talk about cars, 0:01:08.600 --> 0:01:10.959 they talk about museums. That's in our second hour. But 0:01:11.000 --> 0:01:13.440 on this New Year's weekend, we begin with a thoughtful 0:01:13.440 --> 0:01:15.679 and an omniscition to editor behind it all. He joins 0:01:15.760 --> 0:01:18.840 us every day on our daily broadcast and podcast. We're 0:01:18.840 --> 0:01:21.520 talking about Joel Weber, the editor of Bloomberg Business Week, 0:01:21.520 --> 0:01:24.200 along with another key member of the team driving coverage 0:01:24.520 --> 0:01:28.000 at the magazine, Jim Ellis, Assistant managing editor. Alright, guys, 0:01:28.040 --> 0:01:30.399 a lot going on. A busy year. Hard to believe 0:01:30.400 --> 0:01:32.120 we're at the end of it. So, Joel, when you 0:01:32.160 --> 0:01:34.000 look back at this year, how do you think about 0:01:34.000 --> 0:01:37.600 it in your coverage? Well, there were a couple big 0:01:37.680 --> 0:01:39.800 themes and and you hit on a few of them. 0:01:39.840 --> 0:01:43.559 They're really eloquently. Kind of was preparing for this little 0:01:43.560 --> 0:01:46.399 conversation with you. Um. I looked back and one of 0:01:46.440 --> 0:01:50.360 the first covers of the year actually was about the 0:01:50.400 --> 0:01:56.120 Winter Olympics, and that was the cover line was China's Games. 0:01:56.200 --> 0:02:00.520 And we had a really clever podium arrangement where g 0:02:00.880 --> 0:02:03.800 was at the top podium, and it really did speak 0:02:03.840 --> 0:02:07.120 to how much the world has changed since the last 0:02:07.160 --> 0:02:10.079 time the Olympics were in China. Back then it was 0:02:10.120 --> 0:02:14.080 the Summer Olympics, and that story spoke to how much 0:02:14.280 --> 0:02:18.200 the global dynamics have changed from the Summer Games to 0:02:18.360 --> 0:02:22.720 these Winter Games, and um, it also speaks to uh China, 0:02:22.960 --> 0:02:26.679 and that was a bigger story that I wanted to 0:02:26.720 --> 0:02:28.799 take a couple of minutes and and talk through all 0:02:28.800 --> 0:02:34.040 the various facets of what the Chinese economy has been 0:02:34.080 --> 0:02:37.920 going through, what the people there have lived through, what 0:02:38.080 --> 0:02:41.840 some of the companies with global exposure and are rooted 0:02:41.919 --> 0:02:45.880 there um faced this year, and also what that means 0:02:45.960 --> 0:02:48.120 is we start to kind of look ahead. Let's do 0:02:48.200 --> 0:02:51.040 that with a Jim Ellis, He's assistant managing editor of 0:02:51.080 --> 0:02:54.040 the magazine. Jim, it's pretty incredible to think about, you know, 0:02:54.400 --> 0:02:57.360 not just the impact that China has on our economy globally, 0:02:57.520 --> 0:03:01.400 but the key things driving our cover of China this year. 0:03:01.840 --> 0:03:03.600 If we start with the Olympics is sort of one 0:03:03.600 --> 0:03:05.680 of the book ends. What's the other book end at 0:03:05.680 --> 0:03:08.560 the end of two But at the end of two. 0:03:08.639 --> 0:03:13.200 It's the idea that after a year of of following 0:03:13.200 --> 0:03:15.760 a COVID zero policy where they they've been willing to 0:03:16.240 --> 0:03:20.800 effectively shut down their economy at off and on throughout 0:03:20.840 --> 0:03:23.960 the year, and um, and since they're the world's factory 0:03:24.080 --> 0:03:27.760 shutdown factories for the rest of the world, they've suddenly decided, Okay, 0:03:27.960 --> 0:03:31.359 we're we're cool, We're gonna go ahead and open up. 0:03:31.639 --> 0:03:35.360 And it's turning out that the reopening of China after 0:03:35.440 --> 0:03:37.880 COVID is going to be just as difficult as dealing 0:03:37.920 --> 0:03:40.200 with COVID. I don't think people really understood that. They 0:03:40.200 --> 0:03:43.000 didn't expect that, and it's sort of turned out to 0:03:43.040 --> 0:03:46.520 be sort of a shock. It means that three is 0:03:46.560 --> 0:03:48.560 not going to be this sort of joyous sort of 0:03:48.600 --> 0:03:51.520 bounce back, you know, in China, and for all the 0:03:52.400 --> 0:03:54.560 people around the world, the companies around the world to 0:03:54.640 --> 0:03:56.920 depend on them to do manufacturing, are still going to 0:03:57.040 --> 0:03:58.640 have a hell of a time next year. One of 0:03:58.680 --> 0:04:01.440 the things that surprised me was, um, you know, just 0:04:01.800 --> 0:04:04.640 a few years ago, we always talked about if China 0:04:05.080 --> 0:04:08.560 ever sees growth go below seven, oh my god, you know, 0:04:08.560 --> 0:04:10.400 at the end of the world, I mean, China this 0:04:10.480 --> 0:04:13.080 year is probably gonna do about three point five. That 0:04:13.280 --> 0:04:15.960 is amazing. I mean you've basically seen the growth there 0:04:16.000 --> 0:04:19.839 slow dramatically over the last four years and they're not 0:04:19.920 --> 0:04:22.720 ready for that. But we're probably not ready for that either. Well, 0:04:22.720 --> 0:04:24.159 you know what it's and it's interesting too. And I 0:04:24.200 --> 0:04:27.360 think about, you know, coming off the pandemic, globalization, pushback, 0:04:27.400 --> 0:04:29.760 supply chains, like, there's so many issues that go back 0:04:30.120 --> 0:04:33.520 to China. Uh. And I think about also something that 0:04:33.720 --> 0:04:38.040 the magazine covers so well, and that's Tesla and specifically 0:04:38.040 --> 0:04:41.040 it's exposure to China and what that means going forward. 0:04:41.040 --> 0:04:44.359 I mean, China if the economy opens up good but 0:04:44.480 --> 0:04:47.680 also bad because of concerns about global inflationary pressures. But 0:04:47.839 --> 0:04:50.640 if it doesn't, what that does to global demand and 0:04:50.680 --> 0:04:54.400 global growth? Like It's investors have already sort of sort 0:04:54.440 --> 0:04:57.760 of awakened to this when they've been pulling Tesla's share 0:04:57.760 --> 0:05:02.000 price down in part because of of danger of Chinese 0:05:02.040 --> 0:05:05.080 business they're dropping. I mean we've seen um I guess 0:05:05.080 --> 0:05:08.159 recently Tesla saying that it might lower production at the 0:05:08.160 --> 0:05:12.000 Shanghai plant. By this is the first time this plant 0:05:12.000 --> 0:05:16.159 has ever gone down from its maximum capacity. Other than 0:05:16.200 --> 0:05:18.600 when they shut Shanghai down for two months. I mean, 0:05:18.640 --> 0:05:21.200 this is an amazing thing to see this happen. And 0:05:21.240 --> 0:05:25.360 after months of basically having to wait forever to get 0:05:25.360 --> 0:05:28.120 your Tesla, Tesla is able now to provide you a 0:05:28.200 --> 0:05:32.120 Tesla within thirty days in China, there is no backlog. 0:05:32.279 --> 0:05:35.200 In other words, the business that is, you know, for 0:05:35.240 --> 0:05:38.200 them in their second most important market is truly slowing 0:05:38.200 --> 0:05:40.839 down and we haven't seen that before. Something is going 0:05:40.880 --> 0:05:43.800 on there. And because they depend so heavily on China, 0:05:44.400 --> 0:05:47.080 not just for serving the Chinese market but also for 0:05:47.279 --> 0:05:50.000 exporting to Europe, this is a bad thing for Tesla. 0:05:50.240 --> 0:05:52.440 What about when it comes to competitors to Tesla in China. 0:05:52.480 --> 0:05:54.960 We often talk about them in the context of hundreds 0:05:55.000 --> 0:05:58.240 of different companies, but one of them in particular that Uh. 0:05:58.279 --> 0:06:00.320 You a story that you edited this year about out 0:06:00.360 --> 0:06:03.720 by d R b y D, which is broader than 0:06:03.800 --> 0:06:07.480 just electric vehicles, but it's a massive producer of electric vehicles. 0:06:07.520 --> 0:06:10.600 It is um you know, Virtual Halfway supports it, a 0:06:11.120 --> 0:06:14.000 big investor in it, and it is Uh. It's turned 0:06:14.000 --> 0:06:17.120 out to be a very big supplier. They're a real 0:06:17.160 --> 0:06:22.360 competitor too, but also an exporter of cars to Europe 0:06:22.680 --> 0:06:25.240 and the rest of Asia. We normally don't think about 0:06:25.320 --> 0:06:28.800 China as this giant car exporter. But the strange thing, 0:06:29.080 --> 0:06:32.279 quietly because they don't export here to the US, but quietly, 0:06:32.560 --> 0:06:35.559 China is going to surpass the US in the coming 0:06:35.640 --> 0:06:39.039 year as an exporter of cars. I wouldn't have thought 0:06:39.040 --> 0:06:41.480 that was possible five years ago. You know, one of 0:06:41.520 --> 0:06:44.159 the things that distinguishes b y D to GYM is 0:06:44.880 --> 0:06:48.480 their emphasis on batteries. Right this, right this is a 0:06:48.480 --> 0:06:53.000 battery company that happened to become a car company, and 0:06:53.240 --> 0:06:57.240 I think that is a really interesting place for us 0:06:57.279 --> 0:07:00.800 to think about the rest of what the auto industrys. 0:07:00.839 --> 0:07:04.400 But all of these American companies are are They're coming 0:07:04.400 --> 0:07:07.200 out of slightly differently than the Chinese have. And the 0:07:07.279 --> 0:07:11.000 Chinese have a huge advantage in terms of having so 0:07:11.080 --> 0:07:14.440 much of their infrastructure already in this electric already there, 0:07:14.440 --> 0:07:17.480 and also having access to all sorts of you know, 0:07:17.520 --> 0:07:20.360 sort of medals, precious metals that are needed to actually 0:07:20.400 --> 0:07:24.040 build batteries, and um, what it's doing now is it's 0:07:24.200 --> 0:07:28.280 uh forcing American companies to think differently. For example, GM 0:07:28.320 --> 0:07:31.920 and Ford now are talking about being willing to actually 0:07:31.960 --> 0:07:36.160 go into deals with um lithium producers, which is something 0:07:36.200 --> 0:07:38.440 that Tesla had not been willing to do, to go 0:07:38.480 --> 0:07:40.680 in and put money into these companies. They want to 0:07:40.680 --> 0:07:42.600 buy from them, but it didn't want to basically be 0:07:42.640 --> 0:07:45.920 on the hook for helping support their development. This is 0:07:45.960 --> 0:07:49.280 a real change, but it's an opportunity that the US 0:07:49.360 --> 0:07:51.840 has now to grab a bigger piece of that business, 0:07:51.880 --> 0:07:54.920 because if you don't control batteries, you don't control the 0:07:54.960 --> 0:07:57.360 future of evs well, and China still want to be 0:07:57.480 --> 0:07:59.880 a big part of tourism, and you guys certainly did 0:08:00.120 --> 0:08:02.360 dug into that as well, and we've been watching it 0:08:02.400 --> 0:08:05.080 when it comes to some of the gambling names, the 0:08:05.160 --> 0:08:09.120 US gambling names. But with incredible exposure to macau Um, 0:08:09.160 --> 0:08:11.400 what are we seeing when it comes to tourism and travel, 0:08:11.400 --> 0:08:14.160 because that's something you guys certainly covered. It's been a 0:08:14.200 --> 0:08:17.560 really tough time because of COVID zero. People have been 0:08:17.640 --> 0:08:20.920 unable to travel. There's been all sorts of restrictions to 0:08:21.080 --> 0:08:24.080 the typical places that Chinese tourists would go to. People 0:08:24.120 --> 0:08:27.960 forget that Chinese tourists had become the number one travelers 0:08:28.000 --> 0:08:31.480 in Asia, but they were also extremely important travelers in Europe, 0:08:31.600 --> 0:08:34.200 especially for luxury brands. They love to travel to shop, 0:08:34.520 --> 0:08:37.520 and it's that was all cut off. International air travel 0:08:37.600 --> 0:08:40.120 for most people was cut off during the pandemic. Even 0:08:40.160 --> 0:08:42.200 when it came back for places like Hong Kong, you 0:08:42.240 --> 0:08:46.240 still had the quarantine, so people didn't take advantage of it. Moreover, 0:08:46.559 --> 0:08:50.280 Intra China travel, which had been the largest single domestic 0:08:50.320 --> 0:08:53.479 Arab market in the world, you know before the pandemic, 0:08:53.760 --> 0:08:57.120 that has gone down dramatically. We're only now up to 0:08:57.160 --> 0:09:00.000 about thirty percent of what it was before the pandem 0:09:00.040 --> 0:09:03.079 m that's a huge drop for a very large market. 0:09:03.480 --> 0:09:06.280 Um people are afraid to travel. They hadn't been allowed 0:09:06.320 --> 0:09:09.680 to travel. Now they're afraid to travel because by ending 0:09:09.720 --> 0:09:13.079 COVID zero, you've let people jump on planes, You've let 0:09:13.080 --> 0:09:16.480 people sort of go outside their neighborhoods, but they're not 0:09:16.600 --> 0:09:19.240 testing anymore. They got rid of the mandatory testing and 0:09:19.559 --> 0:09:23.679 for masses, and they also are letting people sort of 0:09:23.960 --> 0:09:27.760 go out without any sort of fix on where they go. 0:09:27.840 --> 0:09:30.040 They got rid of the tracking system. But what that 0:09:30.080 --> 0:09:33.920 means is this is a country where only one percent 0:09:34.000 --> 0:09:37.120 of the people have had COVID. There's no herd immunity 0:09:37.160 --> 0:09:39.880 built in there. So that's the reason why all of 0:09:39.920 --> 0:09:43.800 a sudden you're saying, oh, nine thousand new cases a day, 0:09:43.880 --> 0:09:46.920 because this is virgin territory for the virus. This is 0:09:46.960 --> 0:09:48.920 not going to end well, right, Hey, jo is there 0:09:49.040 --> 0:09:52.520 some company or some CEO that came up in almost 0:09:52.600 --> 0:09:54.800 all of your planning meetings when it comes to when 0:09:54.800 --> 0:09:57.559 you think about companies in business in general, I mean, 0:09:57.679 --> 0:10:04.199 can stop making news? Truthfully? I mean it started earlier 0:10:04.200 --> 0:10:07.640 in the year when we revealed that he actually had 0:10:07.640 --> 0:10:11.640 a massed a position in Twitter, and then uh, he 0:10:12.440 --> 0:10:15.000 became he acknowledged that and like put forward that he 0:10:15.040 --> 0:10:17.199 was going to buy it, and forty four billion dollars 0:10:17.240 --> 0:10:19.480 seemed like a lot of money, And then it really 0:10:19.559 --> 0:10:21.680 seemed like a lot of money a couple of months later, 0:10:21.720 --> 0:10:24.240 as the market sort of started to melt down and 0:10:24.240 --> 0:10:26.199 he tried to get out of that, and then we 0:10:26.440 --> 0:10:29.960 had a very entertaining process that ended up eventually with 0:10:30.040 --> 0:10:33.520 him acquiring the company and tweeting. And maybe you've noticed 0:10:33.760 --> 0:10:36.880 it's like he keeps tweeting, Joel. Entertaining is one word. Hey, 0:10:36.920 --> 0:10:38.560 here's a hint. I have a feeling you're gonna be 0:10:38.559 --> 0:10:42.720 talking about it. We're not going to stop, al right, everybody, 0:10:42.760 --> 0:10:45.000 Thank you so much, appreciate it. That's Joel Webber, the 0:10:45.120 --> 0:10:47.960 editor of bloom Brig Business Week, along with another key 0:10:47.960 --> 0:10:50.720 member of the magazine driving coverage this year, Jim Alice, 0:10:50.760 --> 0:10:53.640 He's assistant managing editor. Coming up, he delved into the 0:10:53.640 --> 0:10:57.080 major financial headlines of two and the Crypto story that 0:10:57.280 --> 0:11:00.720 just keeps on adding chapters. You're listening to bloom business Week. 0:11:01.040 --> 0:11:12.720 This is Bloomberg. Please sees Bloomberg Business Week with Carol 0:11:12.760 --> 0:11:18.680 Messer and Tim Stinevic from Bloomberg Radio. For just the 0:11:18.720 --> 0:11:22.280 second time ever in an entire issue of Bloomberg Business 0:11:22.280 --> 0:11:24.960 Week magazine was dedicated to a single topic from a 0:11:25.080 --> 0:11:28.440 single writer, Paul Ford's What is Code? You might recall 0:11:28.600 --> 0:11:30.160 that was the first That was a few years ago. 0:11:30.400 --> 0:11:33.400 This time around Bloomberg Opinions, Matt Levine gave us forty 0:11:33.440 --> 0:11:37.360 thou words on digital assets, a primer on the innovation 0:11:37.400 --> 0:11:39.960 that could forever change the way that we transact and 0:11:40.000 --> 0:11:42.959 how we view the world of finance. The October thirty 0:11:43.000 --> 0:11:46.200 one issue was dubbed The Crypto Story, Your Guide to 0:11:46.320 --> 0:11:49.840 What it Does, What it Means? And why it still matters. 0:11:50.040 --> 0:11:52.079 Matt did have a helping hand on his way to 0:11:52.120 --> 0:11:55.720 compiling his definitive Digital Asset God, and that came courtesy 0:11:55.960 --> 0:11:59.120 of Bloomberg Business Week Markets and Finance editor Pat Regnar, 0:11:59.160 --> 0:12:01.080 and Pat joins us now to reflect on that journey, 0:12:01.120 --> 0:12:03.040 and perhaps he can also try to help us make 0:12:03.080 --> 0:12:05.440 some sense of the saga that we're continuing to see 0:12:05.440 --> 0:12:07.480 in this space, headlined, of course by none other than 0:12:07.600 --> 0:12:10.720 Sam Bankman freed and is now bankrupt Crypto Exchange f 0:12:10.840 --> 0:12:13.360 t X. So Pat, let's take a look back on 0:12:13.360 --> 0:12:15.440 on how this came together, because here we are at 0:12:15.480 --> 0:12:18.560 the end of two How did you guys approach this 0:12:18.640 --> 0:12:22.120 idea of an actual takeover and how did you settle 0:12:22.120 --> 0:12:24.520 on You know, Matt Lavine, who I know is familiar 0:12:24.559 --> 0:12:27.160 to pretty much everybody who's listening right now. Yeah, well, 0:12:27.160 --> 0:12:29.320 with things like this, it really started with what does 0:12:29.400 --> 0:12:33.360 Matt want to do? Um, we we were really thinking 0:12:33.360 --> 0:12:38.560 about how to really get something out of him that 0:12:38.679 --> 0:12:40.520 people would want to read. He has such a huge 0:12:40.520 --> 0:12:44.040 following and he's so crisp and clear on so many issues, 0:12:44.200 --> 0:12:48.360 from elon to sort of strange quarters of corporate finance, 0:12:48.400 --> 0:12:51.440 and here we have this topic crypto, where he was 0:12:51.559 --> 0:12:54.400 so often writing columns we would read every day and 0:12:54.440 --> 0:12:56.400 you would just go, oh, wow, this thing that I 0:12:56.440 --> 0:12:58.840 didn't understand, Now I get it. Because crypto has just 0:12:58.880 --> 0:13:01.960 been this thing that's lose so quickly that I think 0:13:01.960 --> 0:13:04.319 people have been kind of like chasing to sort of 0:13:04.400 --> 0:13:07.240 understand like all of the things that are happening. And 0:13:07.400 --> 0:13:10.120 so what he did was really kind of explain it 0:13:10.520 --> 0:13:12.439 from the ground up, and I think in a lot 0:13:12.440 --> 0:13:14.680 of ways he ended up foreshadowing a lot of the 0:13:14.720 --> 0:13:17.440 things that we're talking about now. What's amazing, you know, 0:13:17.480 --> 0:13:19.720 to pat when I think about it, we all often said, oh, 0:13:19.840 --> 0:13:22.240 the crypto world, crypto, crypto, and we like kind of 0:13:22.280 --> 0:13:25.040 throw everything in one basket. And what Matt did is 0:13:25.120 --> 0:13:30.120 really pull apart the details, dig into everything specifically, provide 0:13:30.120 --> 0:13:33.199 the transparency. I feel like we all needed to kind 0:13:33.200 --> 0:13:37.160 of understand the relationships and truly what it all meant. Yeah, 0:13:37.240 --> 0:13:39.480 I mean he really starts with kind of explaining like 0:13:39.520 --> 0:13:42.360 what a blockchain is, which you know, I'm often surprised 0:13:42.400 --> 0:13:44.040 you can talk to somebody for quite a long time 0:13:44.080 --> 0:13:46.960 and they'll be speaking to very authoritively about blockchain, and 0:13:46.960 --> 0:13:48.880 then you might stop and ask a very basic question 0:13:48.960 --> 0:13:50.800 and say, you know what, I'm not actually under percent 0:13:50.920 --> 0:13:54.160 for I understand that part of it myself. So you know, 0:13:54.240 --> 0:13:56.600 it was like very refreshing, Like you know, you've been 0:13:56.600 --> 0:13:58.840 in the desert and somebody gives you a glass of water, 0:13:58.920 --> 0:14:01.240 so sort of just like somebody finally explained to you 0:14:01.520 --> 0:14:05.040 some of these fundamentals which can often be hard to 0:14:05.040 --> 0:14:07.960 tease out when reading things like white papers that you'll 0:14:08.000 --> 0:14:10.840 see online or somebody's proposing something, and like, you know, 0:14:10.840 --> 0:14:13.640 and honestly, a lot of what Matt saw was that 0:14:14.000 --> 0:14:17.320 underlying a lot of this jargon and talk were you know, 0:14:17.400 --> 0:14:20.480 scams and things that would be best described as Ponzi schemes. 0:14:20.760 --> 0:14:24.640 I mean that seems incredibly prescient with what happened, you know, 0:14:24.720 --> 0:14:27.240 just a couple of weeks after the issue came out, 0:14:27.720 --> 0:14:30.360 and then what happened in December as well, with the 0:14:30.760 --> 0:14:33.800 rest of Sam Bankman freed, and of course the collapse 0:14:33.840 --> 0:14:35.680 of of f t X. How do you view the 0:14:35.680 --> 0:14:38.520 crypto issue in the context of what continues to happen 0:14:38.840 --> 0:14:41.600 with crypto news that we read about and news that breaks, Like, 0:14:42.040 --> 0:14:44.520 is this some sort of reference guide for people to 0:14:44.520 --> 0:14:47.400 go back to and and understand current events. Yeah, I mean, 0:14:47.440 --> 0:14:49.040 I hope that when people look at it they'll see 0:14:49.080 --> 0:14:51.160 it's like, okay, so here's a way to think clearly 0:14:51.360 --> 0:14:53.240 about all of the things that have happened and all 0:14:53.280 --> 0:14:56.360 of the little kind of um corners and side roads 0:14:56.440 --> 0:14:58.360 that you know, this story is going to go into. 0:14:58.520 --> 0:15:01.120 You know, you look at what s N Free is 0:15:01.200 --> 0:15:04.320 accused of doing, and you know some of it. There's 0:15:04.320 --> 0:15:06.280 a simple way of telling the story, and the simple 0:15:06.320 --> 0:15:09.440 thing is customers sending money. He took the money, and 0:15:09.480 --> 0:15:12.400 he moved it over to the hedge fund, and then 0:15:12.400 --> 0:15:14.840 he lost the money, right Like, So at one level 0:15:15.040 --> 0:15:17.080 you don't have to think about it too hard. But 0:15:17.160 --> 0:15:20.600 then when you go a little deeper into what he's 0:15:20.600 --> 0:15:22.880 accused of doing, it gets a lot more complicated and 0:15:22.920 --> 0:15:26.520 mechanical more quickly. And so, for example, it has to 0:15:26.560 --> 0:15:28.880 do with well, what does it mean for something to 0:15:28.960 --> 0:15:33.640 be a crypto exchange? And how was this exchange using 0:15:34.400 --> 0:15:36.480 margin and things like that. And the reason that stuff 0:15:36.600 --> 0:15:40.760 is important to understand is that, um, you know, Sam 0:15:40.800 --> 0:15:43.680 bank and Free has been laying the groundwork of a 0:15:43.760 --> 0:15:47.080 defense of what he's been doing. Um, and it kind 0:15:47.120 --> 0:15:50.760 of depends a little bit on people being I think, 0:15:50.760 --> 0:15:53.200 maybe overwhelmed by some of the detail. And one of 0:15:53.200 --> 0:15:54.880 the things I hope is that you could you could 0:15:54.960 --> 0:15:56.680 read this and then you would have a firm enough 0:15:56.720 --> 0:16:00.520 grasp on the detail to see through why some of 0:16:00.560 --> 0:16:03.920 the things that he's saying are just mistakes maybe could 0:16:04.000 --> 0:16:08.720 be characterized as something considerably worse than a mistake. I 0:16:08.720 --> 0:16:11.920 gotta say, Pat and nothing against boring white papers, but 0:16:12.000 --> 0:16:17.120 they're boring. And Matt tells this in such a wonderful read. Um, 0:16:17.160 --> 0:16:20.360 and then the way you and your team, the graphics, 0:16:20.400 --> 0:16:24.400 the pictures, the quote, the polls, like, it's just it's 0:16:24.440 --> 0:16:27.640 really pretty incredible to go through and and um, I'm 0:16:27.640 --> 0:16:31.120 not gonna say it's like reading a novel because it's reality, 0:16:31.160 --> 0:16:34.240 but it really was, um a treat and enjoy to read. 0:16:34.280 --> 0:16:36.120 And I have to say, you know, we get the 0:16:36.120 --> 0:16:39.440 magazines in the newsroom, and it was hard to find this. 0:16:39.440 --> 0:16:40.960 This is one that everybody was like, do you have 0:16:40.960 --> 0:16:43.080 the crypto issue? Do Matt's crypto Issie do the business 0:16:43.120 --> 0:16:46.880 with crypto issue? Because everybody took it because they wanted 0:16:46.920 --> 0:16:49.440 to read it and understand it. And I'm curious what 0:16:49.560 --> 0:16:52.400 kind of response have you guys gotten from the bigger, 0:16:52.400 --> 0:16:55.040 broader crypto world or just the world in general. People 0:16:55.040 --> 0:16:57.480 would be very positive about it. God, as you know, 0:16:57.680 --> 0:16:59.840 they liked it a lot. But I've even heard from 0:17:00.000 --> 0:17:03.880 people who are some of the strongest crypto critics. You've said, oh, 0:17:03.920 --> 0:17:05.600 you know, we really like Matt in the way that 0:17:05.600 --> 0:17:08.080 he explains to these things. Um, that that's been kind 0:17:08.119 --> 0:17:11.840 of pardning that. Uh, it seems to be well received 0:17:12.119 --> 0:17:17.399 across people with different opinions about this space which is 0:17:17.440 --> 0:17:20.479 now so very much on ourline. Okay, what's the future here? 0:17:20.520 --> 0:17:22.840 How do you think about it? You know, I think 0:17:22.920 --> 0:17:29.600 that what's happened with SPX is a really existential crisis 0:17:29.640 --> 0:17:32.760 for crypto I think, Um, you know, one of the 0:17:32.800 --> 0:17:35.560 things that Matt lays out at the end of his 0:17:35.640 --> 0:17:38.920 piece is like, you know, they've they've built this large, 0:17:38.960 --> 0:17:42.720 complicated financial system, and the question is is it all 0:17:42.720 --> 0:17:46.000 a ponzi? Um? And or are they going to build something? 0:17:46.560 --> 0:17:53.280 And um, you know we're now looking at massive uh 0:17:53.520 --> 0:17:58.000 you know, alleged fraud at the heart of crypto markets. 0:17:58.040 --> 0:18:02.359 It's not the first one, um, and we still you know, 0:18:03.080 --> 0:18:06.920 that's not just that's not only pushing prices down. It's 0:18:06.960 --> 0:18:09.679 really raising questions about like, you know, why would why 0:18:09.720 --> 0:18:12.399 would you put your money into this? Like the the 0:18:13.160 --> 0:18:16.760 simplest ways to invest are very you know, nervous making 0:18:17.240 --> 0:18:21.520 uh for people and um, you know, and then we 0:18:21.560 --> 0:18:24.120 still haven't addressed the question of what what are you building? 0:18:24.280 --> 0:18:27.320 What what are you making? UM? I think that's gonna 0:18:27.400 --> 0:18:30.800 be really really tough on um, especially because you know, 0:18:30.880 --> 0:18:33.280 a lot of what's going on with FBX is about 0:18:33.400 --> 0:18:37.360 the stuff that people thought was building. You know. UM, 0:18:37.480 --> 0:18:40.000 people would say, well, bitcoin, like, you know, it doesn't 0:18:40.000 --> 0:18:42.040 have any intrinsic value. It's just sort of a bet. 0:18:42.080 --> 0:18:44.920 I'm sort of like a token price going up or down. 0:18:45.000 --> 0:18:47.000 I mean, that's you know, that's just like kind of 0:18:47.040 --> 0:18:49.480 the simple economics of bitcoin. It's just it's just a 0:18:49.560 --> 0:18:54.600 pure bet on adoptions. Then, but like maybe the next 0:18:54.600 --> 0:18:56.760 thing that will happen is people will come up with 0:18:56.800 --> 0:19:00.439 tokens that give people, you know, util be and kind 0:19:00.480 --> 0:19:03.600 of represent um, you know, some kind of piece of 0:19:03.640 --> 0:19:05.919 the growth of a company. Well, what's name Like one 0:19:05.960 --> 0:19:07.720 of those tokens, Well, one of those tokens was the 0:19:07.760 --> 0:19:11.480 token that that f t x UH issued for itself 0:19:11.480 --> 0:19:13.159 and actually seemed to be a very big part of 0:19:13.200 --> 0:19:16.480 its lab right that it's like what, you know, what 0:19:16.720 --> 0:19:20.040 is actually here that people want? And I think like 0:19:20.280 --> 0:19:24.920 people in the crypto community are going to have They've 0:19:24.960 --> 0:19:27.960 got a lot of work to do, um to to 0:19:28.080 --> 0:19:30.840 prove that this isn't just a place to speculate. Pat, 0:19:30.840 --> 0:19:32.800 I didn't hear you use the term magic internet money 0:19:32.840 --> 0:19:37.360 when you were describing that. Oh, that's for all right, 0:19:37.440 --> 0:19:41.080 that's the next full issue, um. Incredible work, Pat, Thanks 0:19:41.080 --> 0:19:43.040 so much for joining us. Happy New Year, Thank you. 0:19:43.119 --> 0:19:46.200 That's Bloomberg business Week. Markets and Finance editor Pat Rignier 0:19:46.520 --> 0:19:48.920 still had on the New year's weekend edition of Bloomberg 0:19:48.960 --> 0:19:51.960 Business Week, where U S monetary policy goes from here 0:19:52.440 --> 0:19:55.119 as a year full of wallet breaking inflation and jumbo 0:19:55.160 --> 0:19:58.359 interest rate hikes comes to a close, or does it? 0:19:58.480 --> 0:20:01.399 That's the big question. Well, from pandemic labor constraints to 0:20:01.440 --> 0:20:04.160 the reversal of Roe v. Wade, US women have lost 0:20:04.200 --> 0:20:07.000 decades worth of progress in just a matter of months, 0:20:07.280 --> 0:20:10.960 and it's costing the entire country dearly. We're gonna explain next. 0:20:11.240 --> 0:20:22.760 This is Bloomberg broadcasting from the financial capital of the world. 0:20:22.880 --> 0:20:26.320 Bloomberg eleve in Frio in New York to Washington, d C. 0:20:26.520 --> 0:20:31.240 Bloomberg to Boston, Bloomberg one oh six one to San Francisco, 0:20:31.280 --> 0:20:34.760 Bloomberg nine six to the country Sirius XM Chanel one 0:20:34.800 --> 0:20:37.760 nine team, and around the globe the Bloomberg Business app 0:20:37.880 --> 0:20:42.000 and Bloomberg Radio dot Com. This is Bloomberg Business Week 0:20:42.320 --> 0:20:47.679 with Carol Massier and Tim Stenove from Bloomberg Radio. In 0:20:47.720 --> 0:20:50.120 mid December, we saw Wall Street's hopes for a loosening 0:20:50.119 --> 0:20:52.920 monetary policy take a big hit. The Federal Reserve did 0:20:52.920 --> 0:20:55.159 dial back a bit when it raised interest rates by 0:20:55.200 --> 0:20:59.520 fifty basis points that followed four consecutive seventy five point hikes. However, 0:20:59.600 --> 0:21:02.440 fits you J Powell saying officials were not close to 0:21:02.520 --> 0:21:06.119 ending their aggressive campaign of rate increases and signaled borrowing 0:21:06.119 --> 0:21:10.520 costs Wood had higher than expected. J. Powell also saying 0:21:10.520 --> 0:21:12.800 that the Central Bank would not cut rates until it's 0:21:12.840 --> 0:21:16.440 confident that inflation is moving back towards its stated two 0:21:16.520 --> 0:21:20.119 percent inflation goals. Higher interest rates and rising prices have 0:21:20.200 --> 0:21:23.240