WEBVTT - Racial Cloud Over McDonald's Golden Arches 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Karl Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.600 plus technology, politics, economics, all parnessing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.600 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.200 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:31.639 YouTube search Bloomberg Clobal News. Well, Kitty Gradfeld and I 0:00:31.640 --> 0:00:34.159 have been talking about it throughout the first bit of 0:00:34.200 --> 0:00:36.880 our program this afternoon, and that's the rising COVID cases 0:00:36.920 --> 0:00:39.040 that we're seeing here in New York City and around 0:00:39.040 --> 0:00:41.600 the world and around the United States, just ahead of 0:00:41.640 --> 0:00:44.199 the holiday season. Here in New York, new daily cases 0:00:44.479 --> 0:00:47.559 are at levels not seen since last April, that was 0:00:47.600 --> 0:00:50.440 before the Delta variant ripped through the country. On a 0:00:50.680 --> 0:00:53.600 US basis, we're seeing new COVID cases at levels that 0:00:53.640 --> 0:00:56.280 we saw on the down trend of the Delta variant 0:00:56.320 --> 0:00:59.680 back in September, so definitely a concerning story playing out. 0:00:59.760 --> 0:01:02.240 Let's get some details from Dr Ian LUs Beder, clinical 0:01:02.240 --> 0:01:04.320 professor of Medicine at n y U Lang going to 0:01:04.400 --> 0:01:06.600 medical center. He joins us once again on the phone 0:01:06.640 --> 0:01:09.920 from New York City. How are you, Dr LUs Bader, Hey, 0:01:10.040 --> 0:01:13.399 Tim and Katie, Thanks Sheppy Friday. I'm doing well, but 0:01:13.440 --> 0:01:16.959 I'm definitely perceiving a lot of market volatility, a lot 0:01:16.959 --> 0:01:21.160 of emotional volatility, because patients are calling in droves with 0:01:21.640 --> 0:01:26.959 newly positive nasal SWR. Wow. Okay, So that's interesting to 0:01:27.000 --> 0:01:29.080 note that, because you know, it's quite a different tone 0:01:29.080 --> 0:01:31.399 than we had last week when we last spoke to you, 0:01:31.560 --> 0:01:33.240 and it certainly feels like things have shifted a lot 0:01:33.240 --> 0:01:35.440 where we are in a few days. I told Katie 0:01:35.480 --> 0:01:39.279 this earlier this week, but the lines outside of testing 0:01:39.319 --> 0:01:43.080 facilities in my neighborhood are stretching down the block, sometimes 0:01:43.080 --> 0:01:45.680 even to the next block. The number of people waiting 0:01:45.720 --> 0:01:49.080 for tests out. What's going on, Dr LUs Bader, is it? 0:01:49.160 --> 0:01:51.600 Is it a mix of people getting tested before traveling, 0:01:51.720 --> 0:01:54.680 or is indeed we're seeing a new surge here ahead 0:01:54.680 --> 0:01:58.680 of the holidays. I think we're definitely seeing a new surge. 0:01:58.800 --> 0:02:02.040 We're seeing a number of patients UM that have been 0:02:02.040 --> 0:02:05.120 double and triple E vaccinated. Colleagues that I work with 0:02:05.160 --> 0:02:09.160 in the hospital nurses, UM we've had three vaccines, have 0:02:09.480 --> 0:02:13.720 a running nosecloth cold, they get swabbed their PCR positive. 0:02:14.280 --> 0:02:16.760 I suspect most of these are O macron which are 0:02:16.760 --> 0:02:20.080 really breaking through the vaccines, and we are seeing a 0:02:20.160 --> 0:02:25.160 surge of increased, almost a doubling in the number of 0:02:25.280 --> 0:02:30.000 positive cases. So uh. The good news though, is that 0:02:30.160 --> 0:02:34.160 these really tend to be fairly mild. People have a headache, 0:02:34.440 --> 0:02:37.440 muscle aches, kind of like a mild flu, not nearly 0:02:37.480 --> 0:02:42.320 as bad as real influenza. And uh, unfortunately we don't 0:02:42.360 --> 0:02:45.239 have a lot of treatment now available for them, the 0:02:45.320 --> 0:02:49.480 monoclonal antibodies we are using, but now they're going to 0:02:49.560 --> 0:02:54.600 be rationed a little bit. Well definitely, I'm sorry, Dr Lost, 0:02:55.000 --> 0:02:56.560 I did just want to ask them given like you 0:02:56.639 --> 0:02:59.000 say that, you know, it seems to be more mild 0:02:59.080 --> 0:03:01.480 a macron very it is breaking through, but you're not 0:03:01.520 --> 0:03:05.360 going to get as sick as maybe previously. I'm curious 0:03:05.360 --> 0:03:08.520 how how much you think this current wave that we're 0:03:08.560 --> 0:03:12.480 starting to see build might delay the return to normal, 0:03:12.600 --> 0:03:16.560 whatever that looks like. I think it is going to 0:03:17.080 --> 0:03:20.239 somewhat delay the return to normal. I mean, we've sort 0:03:20.280 --> 0:03:23.840 of been predicting spring when this will all be over, right, Personally, 0:03:23.880 --> 0:03:26.120 I still think you know that will be the case. 0:03:26.200 --> 0:03:29.720 I do think oh Macron hopefully is the final variant 0:03:29.840 --> 0:03:34.280 and maybe somewhat endemic or even like a yearly flu. 0:03:34.560 --> 0:03:38.440 Possibly will get a yearly shot for it, although as 0:03:38.480 --> 0:03:43.120 we know, the flu shot is not really effective either. UM. 0:03:43.280 --> 0:03:45.920 My sense is that most people get over this quite well. 0:03:46.040 --> 0:03:49.160 We are reserving monoclonal antibodies, which we were giving out 0:03:49.240 --> 0:03:52.800 much more freely before, but now really can't do that 0:03:52.880 --> 0:03:56.720 for people over sixty five or people under fifty or 0:03:56.880 --> 0:04:03.400 people below sixty UM that have underlying diseases cardiovascular disease, diabetes, 0:04:03.480 --> 0:04:08.120 lung disease. So it is being somewhat rationed UM and 0:04:08.160 --> 0:04:10.800 I think that's appropriately so, because I think we were 0:04:10.840 --> 0:04:15.360 giving it too mild to moderate symptoms, you know, and 0:04:15.440 --> 0:04:17.840 people who would have gotten over this anyway within a 0:04:17.880 --> 0:04:20.279 few days. And in some ways I think we're trying 0:04:20.360 --> 0:04:23.600 to make the patients happy, but they probably didn't really 0:04:23.640 --> 0:04:28.200 need that treatment anyway. The pills that are coming out. Certainly, 0:04:28.320 --> 0:04:31.640 the Fiser pill is still going to be a little delayed. 0:04:31.640 --> 0:04:34.200 It's it's a combination with right ton of her, which 0:04:34.200 --> 0:04:37.240 is a protease inhibitor that you know has been used 0:04:37.279 --> 0:04:40.960 for years with HIV. Very safe UM, but again not 0:04:40.960 --> 0:04:46.040 not approved yet. So really we're treating people symptomatically and DR. 0:04:46.080 --> 0:04:47.880 I mean, like you said, you know plenty of people 0:04:48.040 --> 0:04:51.400 double triple vaccinated who have had breakthrough cases. I know 0:04:51.640 --> 0:04:54.479 plenty of such people in my own life, and I 0:04:54.520 --> 0:04:56.960 don't know. I'm curious if you have any concerns that 0:04:56.960 --> 0:05:00.359 that might dissuade people from getting the boost to this 0:05:00.600 --> 0:05:03.200 sort of feeling that it's inevitable that I'm going to 0:05:03.240 --> 0:05:06.640 get it anyway, Why why bother with another shot? I 0:05:06.680 --> 0:05:08.440 think you raise a good point, and I think for 0:05:08.480 --> 0:05:12.479 the people who are vaccine hesitant, over time, I think 0:05:12.600 --> 0:05:15.160 it just reinforces why bother doing this? I'm going to 0:05:15.279 --> 0:05:17.920 get it anyway, And to some degree I think that's true. 0:05:17.960 --> 0:05:20.520 I think everyone will be getting O Macron sooner or 0:05:20.640 --> 0:05:24.600 later unless you've really been able to isolate UM effectively. 0:05:24.960 --> 0:05:28.320 The bottom line is, really the vaccines do seem to 0:05:28.400 --> 0:05:32.200 help with with severity of illness, and I certainly feel 0:05:32.200 --> 0:05:35.360 better having gotten a third booster shot. It's very hard 0:05:35.400 --> 0:05:38.800 to measure specifically in any one individual if they're exposed, 0:05:39.040 --> 0:05:42.080 because it really depends on the viral load. If if 0:05:42.080 --> 0:05:44.680 someone is very sick with omicron and they cough in 0:05:44.760 --> 0:05:47.360 your face, you're going to have a high viral load. 0:05:47.640 --> 0:05:49.640 So it's very hard to measure. But I think the 0:05:49.720 --> 0:05:54.160 vaccines are helpful. Um. I think if you haven't been vaccinated, 0:05:54.279 --> 0:05:58.240 certainly be very careful going out in crowds because there's 0:05:58.240 --> 0:06:02.120 a long incubation period. People seem very minimally sick, and 0:06:02.160 --> 0:06:04.520 they can be very contagious. Dr lust Beder, we have 0:06:04.520 --> 0:06:07.279 thirty seconds left with you. Should people rethink gathering together 0:06:07.320 --> 0:06:11.760 for the holidays, Yes, to some degree, I think they 0:06:11.800 --> 0:06:16.239 should be careful. I'm not sure how I think everyone 0:06:16.320 --> 0:06:18.600 is going to wind up with omicron sooner or later. 0:06:18.960 --> 0:06:21.080 But I think if you are healthy and you've been 0:06:21.279 --> 0:06:24.720 a triple vaccinated, get together with family. I think if 0:06:24.720 --> 0:06:27.640 you haven't been vaccinated, or if you have underlying disease, 0:06:28.160 --> 0:06:30.880 I would be very careful at this point, and until 0:06:30.920 --> 0:06:35.800 we have a little more data on Dr Ian LUs Beder, 0:06:35.960 --> 0:06:38.520 we are really grateful you join us each and every week. 0:06:38.680 --> 0:06:41.160 He's clinical professor of medicine at n y U Lane 0:06:41.200 --> 0:06:43.200 Goes Medical Center. He joins us on the phone from 0:06:43.440 --> 0:06:46.040 New York City, said it several times, Katie, everyone is 0:06:46.040 --> 0:06:48.080 going to get it sooner or later. I mean, that's 0:06:48.120 --> 0:06:50.479 the moon music. It feels like everyone I talked to 0:06:50.640 --> 0:06:53.080 they're just you know, looking at their watch, wondering what 0:06:53.320 --> 0:06:57.479 their time is. Do alright, such such as where we 0:06:57.520 --> 0:07:01.760 are right now? Happy Friday, everyone is Bloomberg Business Week 0:07:01.920 --> 0:07:05.839 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:07:06.040 --> 0:07:11.400 Bloomberg Radio. Well. McDonald's was once celebrated in black entrepreneurial circles. 0:07:11.560 --> 0:07:14.440 Now though it's settling with black franchise the owners who 0:07:14.520 --> 0:07:16.960 say that they were blocked from the best and most 0:07:17.000 --> 0:07:19.960 profitable locations. In fact, in a little over a year, 0:07:20.120 --> 0:07:24.200 McDonald's has faced multiple lawsuits that McDonald's itself practices his 0:07:24.240 --> 0:07:27.840 own form of redlining. It's the subject of a detailed 0:07:28.120 --> 0:07:31.080 Its subject of a detailed story by Susan Burfield, senior 0:07:31.080 --> 0:07:33.920 investigative reporter for Bloomberg Business Week. She joins us on 0:07:33.920 --> 0:07:36.000 the phone from Brooklyn. Joel Webber joins us as well 0:07:36.200 --> 0:07:39.080 editor of Bloomberg business Week. He's on the access line 0:07:39.200 --> 0:07:43.119 from Brooklyn, Joel. To understand the story of of what's 0:07:43.120 --> 0:07:46.000 going on right now at McDonald's, you have to go 0:07:46.080 --> 0:07:49.200 back decades, all the way back to the nineteen seventies 0:07:49.200 --> 0:07:51.480 and the nineteen eighties. What did McDonald's do then in 0:07:51.560 --> 0:07:56.840 order to attract black franchise owners. Well, it was one 0:07:56.880 --> 0:08:00.320 of the first corporations that really UH did a job 0:08:00.320 --> 0:08:06.160 of being proactive about welcoming black franchisees. UM. And there's 0:08:06.160 --> 0:08:08.920 some nuance to that, but UH, for the large part, 0:08:08.960 --> 0:08:10.640 and this is what you said at the top, there 0:08:10.920 --> 0:08:14.880 there was an entrepreneurial spirit and welcoming of the black 0:08:14.880 --> 0:08:19.840 community to own McDonald's. UM. And Susan's reporting really UM, 0:08:20.440 --> 0:08:23.360 which is just incredible, but largely centers on on one 0:08:23.480 --> 0:08:27.760 character UH phone named Herb Washington, who who kind of 0:08:27.760 --> 0:08:31.440 speaks to that comes from that era. UM and started 0:08:31.480 --> 0:08:36.600 with one franchise and quickly amassed others UM. At one 0:08:36.600 --> 0:08:39.920 point he was had in the twenties, UM, but they 0:08:39.920 --> 0:08:44.160 were never turned out, never quite the best locations. UM. 0:08:44.440 --> 0:08:47.960 And that led to a lawsuit that just settled yesterday. 0:08:48.120 --> 0:08:51.000 But Susan Before we get into all that, who is 0:08:51.160 --> 0:08:53.800 Herb Washington and what was the opportunity that he saw 0:08:53.800 --> 0:08:58.320 in owning McDonald's. Yeah, so thanks UM. You know, I 0:08:58.400 --> 0:09:02.400 think for Washington and a lot of other black entrepreneurs, 0:09:02.880 --> 0:09:07.800 McDonald's offered them an opportunity to own a business um 0:09:08.000 --> 0:09:10.880 UM and to be part of a system UM at 0:09:10.880 --> 0:09:14.720 a time when those kinds of opportunities were often denied 0:09:15.000 --> 0:09:19.160 to them. And so you know, Herb had been UM 0:09:19.600 --> 0:09:23.520 a track star in college. He briefly played for the 0:09:23.559 --> 0:09:27.720 Oakland A's UM and then he decided he wanted to 0:09:27.720 --> 0:09:32.000 be a businessman. UM. He was given a first restaurant 0:09:32.960 --> 0:09:37.120 in Rochester, New York, in a neighborhood that was pretty 0:09:37.200 --> 0:09:41.559 impoverished and mostly black and Hispanic residents. And what he 0:09:42.080 --> 0:09:45.160 realized over the next couple of years is that there 0:09:45.240 --> 0:09:48.600 was a pattern at McDonald's, and that was that they 0:09:48.600 --> 0:09:52.840 initially believed that UM, it was best to put black 0:09:52.840 --> 0:09:56.760 owners UM into in black neighborhoods. You know, civil rights 0:09:56.840 --> 0:09:59.959 activists wanted it, UM it seemed good for the community 0:10:00.080 --> 0:10:03.880 these UM definitely was good for McDonald's. But over time, 0:10:03.920 --> 0:10:08.280 and what herbs experience showed is that that also served 0:10:08.320 --> 0:10:11.960 to constrain them to those neighborhoods and made it harder 0:10:12.000 --> 0:10:17.440 for them to own restaurants in communities um that were 0:10:17.480 --> 0:10:20.560 either more diverse or more white and well off, where 0:10:20.559 --> 0:10:24.559 the restaurants were usually easier to run and often more profitable. 0:10:24.960 --> 0:10:29.320 And Susan lock me through how this relationship works. Because 0:10:29.720 --> 0:10:34.120 McDonald's owns the actual restaurant building, right. And then you know, 0:10:34.200 --> 0:10:39.040 franchisees such as Washington have to pay them rents, right 0:10:39.240 --> 0:10:42.800 so we yeah, so I mean everyone calls them owners, 0:10:42.840 --> 0:10:47.199 but what they own really is the equipment inside the restaurants, um, 0:10:47.320 --> 0:10:51.360 the sign you know, outside the restaurant. M McDonald's own 0:10:51.600 --> 0:10:55.679 the building. The franchisees pay rent um, they pay a 0:10:55.800 --> 0:10:59.440 percent of their sales to McDonald's. UM, they pay all 0:10:59.520 --> 0:11:03.120 kinds of fees to McDonald's. Of course, they have to 0:11:03.160 --> 0:11:08.679 follow McDonald's rules, um, and so they are beholden um 0:11:08.720 --> 0:11:12.280 to the corporation. McDonald's of course wants them to succeed. 0:11:12.480 --> 0:11:15.720 But you know, if they don't, McDonald's is not really 0:11:15.760 --> 0:11:20.120 responsible for helping them. You know. So when the franchisees 0:11:20.200 --> 0:11:24.800 or if franchise's fall into financial trouble, sometimes they have 0:11:24.880 --> 0:11:27.360 to take on a lot of debt for these restaurants. 0:11:27.400 --> 0:11:31.120 For McDonald's asked them to renovate restaurants that can be 0:11:31.200 --> 0:11:35.000 quite costly. UM. You know, they bear um the burden 0:11:35.120 --> 0:11:38.240 of those costs. So bring us up to speed to 0:11:38.360 --> 0:11:40.960 where we are right now, Susan, and and where herb 0:11:41.040 --> 0:11:44.880 Washington is with his lawsuit? What is what was he 0:11:44.960 --> 0:11:50.880 looking for? And and what's the latest? Yeah, So, um, 0:11:50.920 --> 0:11:55.480 her Washington has filed his lawsuit alleging racial discrimination in 0:11:55.520 --> 0:11:58.080 the ways that you know we've just talked about in 0:11:58.200 --> 0:12:01.600 February of this year, and his is actually the fourth 0:12:02.280 --> 0:12:06.480 UM in about his year to make similar allegations. Uh. 0:12:06.520 --> 0:12:11.719 And last week McDonald's settled one of the other lawsuits 0:12:12.240 --> 0:12:16.680 brought by two other franchisees. And just yesterday, UM it's 0:12:16.720 --> 0:12:20.640 settled with her Washington. UM it bought him out entirely. 0:12:21.120 --> 0:12:26.480 So it purchased thirteen of his restaurants UM for his 0:12:26.559 --> 0:12:31.360 restaurants are total and paid him thirty three point five 0:12:31.400 --> 0:12:36.800 million dollars for them. So UM, as of yesterday, Her Washington, 0:12:36.880 --> 0:12:40.360 after forty years, is no longer part of McDonald's UM 0:12:40.400 --> 0:12:46.120 and his restaurants in the hands of other franchisees, which 0:12:46.320 --> 0:12:49.080 you know speaks to. There's there's two lawsuits that you 0:12:49.080 --> 0:12:51.360 mentioned there. One was a class action lawsuit that settled 0:12:51.400 --> 0:12:53.640 a week ago. There's two other ones that you mentioned 0:12:53.640 --> 0:12:56.480 the story that are also related. And just curious, like 0:12:56.520 --> 0:12:59.439 what does what does this mean altogether when you when 0:12:59.440 --> 0:13:02.520 you step back, can and think about you know, these 0:13:02.559 --> 0:13:05.840 culminating lawsuits and somebody like Washington like bringing all together? 0:13:05.880 --> 0:13:08.959 What does it all mean? Susan, Yeah, well, I think 0:13:09.280 --> 0:13:14.360 you know McDonald's is being held to account by UM, 0:13:14.400 --> 0:13:17.520 the very people who you know, it has depended on 0:13:17.760 --> 0:13:20.240 UM for many years to help it profit in the 0:13:20.280 --> 0:13:24.320 black community, and you know, many of whom have profited themselves, 0:13:24.320 --> 0:13:27.560 but you know they are they are UM, you know, 0:13:27.640 --> 0:13:33.400 asking McDonald's to consider how it's treated them over many decades. UM. 0:13:33.400 --> 0:13:36.400 You know McDonald's of course is not UM is settling. 0:13:36.480 --> 0:13:39.520 You know, it is not admitting any guilt. UM you 0:13:39.559 --> 0:13:41.760 know makes a point of saying that the court have 0:13:42.559 --> 0:13:45.640 not found that it's violated any laws. But nonetheless, you know, 0:13:45.800 --> 0:13:51.120 it wants UM these problems and these people to go away, 0:13:52.240 --> 0:13:54.720 And Susan quickly, I am curious, you know, are there 0:13:54.760 --> 0:13:58.640 any numbers we can attach to what this kind of 0:13:58.760 --> 0:14:02.480 version of redlining has meant for those franchisees who are 0:14:02.480 --> 0:14:06.960 in these areas. Yeah, so, in the lawsuits, some of 0:14:06.960 --> 0:14:10.920 the franchisees claim that their stores brought in about seven 0:14:11.000 --> 0:14:17.040 hundred thousand dollars less um than stores owned by other operators. 0:14:17.120 --> 0:14:20.520 And so you could figure an average um store these 0:14:20.600 --> 0:14:24.800 days makes about two point seven two point nine million dollars. 0:14:24.840 --> 0:14:27.560 So you know, it's not that they're not making anything, 0:14:27.600 --> 0:14:31.640 but seven hundred thousand dollar sales difference is pretty considerable. Well, 0:14:31.680 --> 0:14:34.320 it's just a great read. Susan, thank you so much 0:14:34.440 --> 0:14:37.520 for taking the time and for joining us on Bloomberg 0:14:37.560 --> 0:14:40.000 Business Week. Be sure to check out Susan's story on 0:14:40.040 --> 0:14:42.840 the Bloomberg terminal. You can also read it at Bloomberg 0:14:42.880 --> 0:14:46.360 dot com as well. McDonald's made enemies of black franchise ease. 0:14:46.640 --> 0:14:49.600 Now it's settling, is what Susan's story is called. That 0:14:49.640 --> 0:14:52.920 Susan Burfield, Senior investigations reporter at Bloomberg Business Weeks. She 0:14:53.040 --> 0:14:54.960 joins us on the phone from Brooklyn. Also joining us 0:14:55.040 --> 0:14:57.960 Joel Weber, editor at Bloomberg Business Week. He's on the 0:14:58.000 --> 0:15:02.440 access line from Brooklyn as Well, you're listening to Bloomberg 0:15:02.480 --> 0:15:06.160 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:15:06.240 --> 0:15:11.080 Stinovic on Bloomberg Radio. You're listening to Bloomberg Business Week 0:15:11.280 --> 0:15:15.280 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:15:15.400 --> 0:15:19.200 Bloomberg Radio. Tim, it feels like bitcoin cannot get off 0:15:19.200 --> 0:15:21.720 the ground. We are closing out the fifth straight week 0:15:21.800 --> 0:15:25.640 of losses. The price of bitcoin now below for thousand 0:15:25.720 --> 0:15:29.000 dollars per coin. We're going to talk to Mark Michael Sonenshein. 0:15:29.080 --> 0:15:32.040 He's the chief executive officer of Gray Skill. He joins 0:15:32.120 --> 0:15:34.640 us on the phone from New York City. Michael, There's 0:15:34.680 --> 0:15:36.040 so much I want to get into with you, but 0:15:36.080 --> 0:15:38.160 I feel like we have to start with the biggest 0:15:38.160 --> 0:15:41.720 cryptocurrency out there, Bitcoin. What is going on? It feels 0:15:41.760 --> 0:15:46.920 like all of the excitement has really exited the crypto markets. Well, 0:15:46.960 --> 0:15:49.440 first of all, great to be back talking to you guys, 0:15:49.520 --> 0:15:52.920 But I have to say that prices have never been 0:15:53.040 --> 0:15:56.320 and I don't think anytime soon will be the indicator 0:15:56.520 --> 0:16:00.040 of excitement or activity in and around bitcoin or a 0:16:00.040 --> 0:16:03.440 crypto asset class. I think from the lens that we 0:16:03.520 --> 0:16:06.600 look through it at great scale. There is no question 0:16:06.760 --> 0:16:09.520 that there is still as much as ever, it's not 0:16:09.560 --> 0:16:13.960 a growing excitement around the asset class, the use cases 0:16:14.000 --> 0:16:19.600 being developed, applications being developed. UM. While it grows user growth, 0:16:20.120 --> 0:16:22.760 UM price is not going to be the best sentiment 0:16:22.920 --> 0:16:27.120 indicator UM for activity on these networks. Okay, fair point, 0:16:27.160 --> 0:16:30.720 fair point, But I am curious to hear your explanation 0:16:30.840 --> 0:16:36.040 for why bitcoin is down over the past month. Well, listen, 0:16:36.280 --> 0:16:39.400 as we've seen time and again, bitcoin has a period 0:16:40.400 --> 0:16:43.840 of repeatable pattern rather of going through these you know, 0:16:43.880 --> 0:16:46.760 bubbles and bursts, and each time it does that, you 0:16:46.840 --> 0:16:50.040 see the price get a little bit overextended, course correct 0:16:50.200 --> 0:16:53.120 forms a new base UM and then usually continue to 0:16:53.120 --> 0:16:56.480 move out to new kind of all time highs. The 0:16:56.480 --> 0:16:59.920 bitcoin price has obviously had a meteoric rise throughout twenty 0:17:00.440 --> 0:17:04.560 one and I think what's so inspiring about being involved 0:17:04.560 --> 0:17:08.359 with the asset class that it means something different to everyone. 0:17:08.760 --> 0:17:11.280 So in some circles bitcoin may be seen as a 0:17:11.400 --> 0:17:14.080 risk asset, and so in a world in which investors 0:17:14.080 --> 0:17:16.400 may be taking money off the table and risk assets 0:17:16.400 --> 0:17:18.919 as we may be seeing. Yet you know, another flare 0:17:18.920 --> 0:17:23.080 off around the COVID nineteen pandemic um or investors may 0:17:23.080 --> 0:17:26.360 be thinking about it as a store of value a head. 0:17:26.720 --> 0:17:30.320 Everybody is using this as a slightly different tool um 0:17:30.400 --> 0:17:33.760 And so over time we found that investors will continue 0:17:33.800 --> 0:17:36.640 to allocate to the asset class. But after a year, 0:17:36.680 --> 0:17:38.440 when it's had the run that it's that it's had, 0:17:38.760 --> 0:17:41.960 you know, there's certainly could be some profit taking. Hey, Michael, 0:17:42.000 --> 0:17:44.359 we haven't had a chance to speak with you since 0:17:44.680 --> 0:17:50.040 the crypto executives faced questions from uh the House and 0:17:50.080 --> 0:17:53.040 the Senate this week, the House last week. I'm wondering 0:17:53.320 --> 0:17:56.280 your takeaways from those hearings. And and if you think 0:17:56.280 --> 0:18:00.399 that regulators and lawmakers get it, I mean and if 0:18:00.440 --> 0:18:02.960 you rewind the clock twenty four months ago, you couldn't 0:18:03.000 --> 0:18:05.720 even get crypto to be spoken about on the floor 0:18:06.160 --> 0:18:09.520 of the US Congress, right, And now we're having these 0:18:09.600 --> 0:18:14.080 very meaningful conversations that really underscore, you know, the democratic 0:18:14.520 --> 0:18:17.920 process that we have. The conversations that we've been seeing 0:18:18.040 --> 0:18:24.399 taking place are really informed, thoughtful questions being highlighted by Congress. Right. 0:18:24.400 --> 0:18:27.520 They're really listening and learning about the crypto industry, and 0:18:27.560 --> 0:18:30.639 instead of really taking the time to focus on the 0:18:30.680 --> 0:18:35.280 exaggerated risks or money laundering, or hats or ransomware. They're 0:18:35.280 --> 0:18:38.879 actually starting to really ask questions about the benefits of 0:18:38.920 --> 0:18:43.080 the asset class um using it to democratize finance, using 0:18:43.119 --> 0:18:46.840 these technologies to democratize the lady Internet is being used. 0:18:47.040 --> 0:18:49.600 And so we find this to be really really encouraging, 0:18:49.920 --> 0:18:53.240 and it's certainly been proponents of seeing increased regulation that 0:18:53.280 --> 0:18:55.840 will only lend itself to greater validity around the asset 0:18:55.840 --> 0:18:57.800 class And Michael, I mean I would agree with you, 0:18:57.840 --> 0:19:01.359 at least, especially in the house hearing. I was really 0:19:01.400 --> 0:19:03.960 impressed by the quality of the questions, but it feels 0:19:03.960 --> 0:19:06.600 like there's so many cooks in the kitchen when it 0:19:06.640 --> 0:19:09.320 comes to crypto regulation. I want to talk about the 0:19:09.400 --> 0:19:13.720 SEC because Gray Scale you've filed to convert your Gray 0:19:13.760 --> 0:19:17.240 Scale Bitcoin Trust. It's the largest crypto fund in the world. 0:19:17.480 --> 0:19:20.120 You filed to convert that into an e t F. Obviously, 0:19:20.560 --> 0:19:24.159 physically backed e t f s for bitcoin aren't allowed yet. 0:19:24.400 --> 0:19:26.480 But what caught my eye was in the past few weeks, 0:19:26.520 --> 0:19:29.320 both gray Skill has submitted a letter and then coin 0:19:29.400 --> 0:19:32.760 based this week on gray Skills Behalf submitted a letter 0:19:32.880 --> 0:19:36.199 to the SEC, just really urging them to allow that 0:19:36.280 --> 0:19:38.840 conversion to happen. And I guess i'd love to hear 0:19:39.359 --> 0:19:41.919 why first of all, and whether or not you've have 0:19:42.200 --> 0:19:46.479 a response yet from the SEC. Sure, So, the SEC 0:19:47.400 --> 0:19:52.160 um has been exceedingly recepted to the crypto asta class overall, 0:19:52.280 --> 0:19:55.000 and we've been engaging with them, you know, I would 0:19:55.040 --> 0:20:00.240 say at least in two thousand six UM on r 0:20:00.320 --> 0:20:04.040 EPs endeavors for the Great Scale Bitcoin Trust tick our 0:20:04.080 --> 0:20:08.000 g b TC. What's been a really encouraging and really 0:20:08.040 --> 0:20:11.520 meaningful milestone for the investment management industry is that this 0:20:11.600 --> 0:20:14.800 year we saw the approval of not one, but several 0:20:14.880 --> 0:20:18.760 bitcoin futures based ct s, and that signaled to us 0:20:18.760 --> 0:20:21.480 a change in the posture of the SEC around these 0:20:21.520 --> 0:20:24.680 types of products. But when we did see that, we 0:20:24.680 --> 0:20:26.960 were also very quick to say that, while that is 0:20:27.000 --> 0:20:30.440 a very meaningful step forward, well what about spot based 0:20:30.520 --> 0:20:34.880 or physically back to bitcoin products like GBTC. And what's 0:20:34.920 --> 0:20:38.600 interesting is that these two products are going to be 0:20:38.680 --> 0:20:42.000 tied to that same underlying bitcoin market, which is where 0:20:42.040 --> 0:20:45.240 the SEC has you know, really historically had their issues. 0:20:45.320 --> 0:20:49.440 They want to see surveillance of the bitcoin market and um, 0:20:49.480 --> 0:20:51.920 you know, the types of protections in place that they've 0:20:51.920 --> 0:20:56.080 seen in equities and and other asset classes. And there 0:20:56.160 --> 0:20:59.720 was a letter submitted on our behalf in filing first 0:20:59.760 --> 0:21:02.120 for the E T F right, but actually called out 0:21:02.240 --> 0:21:05.320 the fact that the SEC should really mean brain and 0:21:05.440 --> 0:21:10.000 even playing field. Michael, Yeah, we unfortunately have to leave 0:21:10.000 --> 0:21:11.640 it there because we are running up against the clock. 0:21:11.680 --> 0:21:14.119 We love having you on. You've got to come back soon, please, 0:21:14.160 --> 0:21:16.800 do we really appreciate it. Michael Sunshine is chief executive 0:21:16.800 --> 0:21:18.720 officer at Grace Scale joining us on the phone from 0:21:18.720 --> 0:21:20.879 New York City. You're listening to Bloomberg Radio and this 0:21:21.320 --> 0:21:27.800 is Bloomberg Business Week. Yeah, but you let me drive. 0:21:28.080 --> 0:21:33.320 Oh no, no, no, no, this is not a toy. Please, 0:21:33.400 --> 0:21:39.960 I'll do bridevel. I want to drive. It's good question, 0:21:43.640 --> 0:21:47.679 this is good Drive to the globe, mull drive up 0:21:48.240 --> 0:21:52.760 down on Bloomberg Radio. It's Bloomberg Business Week and it's 0:21:52.760 --> 0:21:54.879 time for it. Drive to the close. Katie and I 0:21:55.000 --> 0:21:57.760 just talking about the indicase that we're seeing move lower 0:21:57.800 --> 0:21:59.760 on the day today and look over the last five 0:21:59.840 --> 0:22:01.760 day days and for the week, we're going to see 0:22:01.760 --> 0:22:04.800 it down weeks, especially on the NASDAC, looking like it's 0:22:04.800 --> 0:22:07.000 going to close by about three percent. Let's get into 0:22:07.000 --> 0:22:10.359 it with Vince Nichols, global equity investment strategist at BNP 0:22:10.480 --> 0:22:14.320 Pariba Asset Management. Vince, how are you. I'm doing well. 0:22:14.359 --> 0:22:16.400 How are you all doing? I'm doing well. Thanks. Thanks 0:22:16.400 --> 0:22:18.480 for joining us on the phone from New York City. 0:22:18.680 --> 0:22:20.480 Then t help us make sense of this week. I mean, 0:22:21.119 --> 0:22:24.560 where do we even begin. Obviously, global central banks a 0:22:24.600 --> 0:22:27.080 huge part of it, inflation a huge part of it, 0:22:27.119 --> 0:22:29.000 but also the rise of the amicron variant, and the 0:22:29.080 --> 0:22:30.840 changing tone that we're seeing not just in New York 0:22:30.840 --> 0:22:36.720 City but around the country. Yeah, I think those are all, um, 0:22:37.040 --> 0:22:39.560 huge factors and all of this and and to the 0:22:39.680 --> 0:22:43.720 larger point, Um, you know, we're we're entering two in 0:22:43.720 --> 0:22:47.760 a very different place than we entered last year. We're 0:22:47.800 --> 0:22:52.240 coming out of the pandemic, or at least thinking we were. Um, 0:22:52.280 --> 0:22:56.160 you know, huge amounts of stimulus feeding the economy. NASS 0:22:56.200 --> 0:23:00.920 compares versus last year and in both growth and economic 0:23:00.960 --> 0:23:04.840 fundamentals or for corporates as well. Um, and this year 0:23:04.960 --> 0:23:09.120 it's it's obviously a lot different. Uh, stimulus is rolling off. Um, 0:23:09.320 --> 0:23:11.440 We're not going to see the same the same impact 0:23:11.880 --> 0:23:14.920 either from the fiscal side of things or um for 0:23:15.040 --> 0:23:17.399 monetary policy either and we saw that this week as 0:23:17.440 --> 0:23:20.520 you mentioned UM, but the FED now on a double 0:23:20.920 --> 0:23:24.200 of the pace that we originally expected for the tapering 0:23:24.840 --> 0:23:26.840 UM and who knows where it goes from there either. 0:23:26.960 --> 0:23:29.480 So I think there's a lot of uncertainty going into 0:23:29.520 --> 0:23:33.520 this next year. Doesn't necessarily mean I'm bearished or we 0:23:33.560 --> 0:23:37.040 as a firm our bearished, but I think one thing 0:23:37.119 --> 0:23:40.240