Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: story in our world when we create a daily, running
Speaker 1: and constantly updating report on the Bloomberg and we have
Speaker 1: and are when it comes to the dramatic collapse of
Speaker 1: Sam bankman Fried's FTX crypto exchange, which wiped out about
Speaker 1: two hundred billion in crypto market value. So let's get
Speaker 1: the latest on this constantly evolving story. We got with
Speaker 1: us Katie graifel Che's Bloomberg and the News senior markets reporter,
Speaker 1: also the co host of Crypto I r L on
Speaker 1: Bloomberg quick take. She's with us right now in the
Speaker 1: Bloomberg Interactive Brokers studio. So, Katie, over the weekend, I
Speaker 1: don't know about you, but I was glued to Twitter
Speaker 1: in a really unhealthy way. Why, I know, more so
Speaker 1: than usual. I mean, wait, you you were, You knew
Speaker 1: that I was. I think it for both of us
Speaker 1: more so than usual, glued to Twitter in an unhealthy way.
Speaker 1: Part of the reason why is because Sam Bankman Freed
Speaker 1: is tweeting's tweeting right now. I know he's tweeting this
Speaker 1: kind of cryptic thing, write the word what, and then
Speaker 1: he's spelling out in one letter at a time, H
Speaker 1: A P P, which seems to be you know what happened? Yeah, yeah, So,
Speaker 1: I mean it makes sense that you're glued to Twitter
Speaker 1: because a lot of this is playing out over Twitter.
Speaker 1: You think back to this time last week, you had
Speaker 1: CZ and Sam Bankman Freed s SPF tweeting at each other.
Speaker 1: That's where this all started. And uh, it's just such
Speaker 1: an evolving, fast evolving story. It's hard to keep up.
Speaker 1: But where are we? Where are we right now? I mean,
Speaker 1: we know that f t X is under investigation. We
Speaker 1: know that regulators or rather enforcement in the Bahamas have
Speaker 1: spoken to Sam Bankman Freed. If you look at what's
Speaker 1: happening over at buying Nance CEO, c Z is apparently
Speaker 1: setting up this recovery funds, but he hasn't really offered
Speaker 1: any details on what that means. It's a little bit
Speaker 1: of a victory. I heard somebody in the newsroom whose
Speaker 1: name will will not be mentioned. So what is it
Speaker 1: like all of a sudden finances like the Federal Reserve
Speaker 1: for like, alright, the lender of last resort? Is this
Speaker 1: like their duty to do this? I don't know, But
Speaker 1: in any case, cz is definitely taking a bit of
Speaker 1: a victory lap here calling out the bad actors. But
Speaker 1: the question everyone wants to know is what is the
Speaker 1: next shoe to drop? And no one really knows what
Speaker 1: do you mean by that, like another crypto firm to
Speaker 1: go under layoffs? What are you talking about that exactly?
Speaker 1: I mean A lot of attention is being paid to
Speaker 1: crypto dot com for example, that's another exchange mistakenly sent
Speaker 1: something to the tune of four hundred million. I think
Speaker 1: it was worth of ether to the wrong addressed. So
Speaker 1: people are watching all the other exchanges right now. You
Speaker 1: have a lot of attention being paid to the lenders
Speaker 1: such as Block five, which is owned by ft X
Speaker 1: or not owned by They had gotten a rescue line
Speaker 1: for um F t X. So right after this news broke,
Speaker 1: everyone was looking at blocked by. They did halt withdrawals.
Speaker 1: What happens with Genesis, one of the biggest remaining lenders
Speaker 1: remains to be seen. And just who has exposure? I
Speaker 1: mean that's the drip feed of news. Uh. The crypto market.
Speaker 1: If I look at our monitor on the Bloomberg, I mean,
Speaker 1: it looks like it has stabilized, at least for the moment. Right,
Speaker 1: We're not losing ground today. We've got what bitcoin. I know,
Speaker 1: you were on air with me and just watching bitcoin,
Speaker 1: you know, go down and down go, you know further,
Speaker 1: it's below seventeen thousand, but above sixteen thousand. See, that's
Speaker 1: the thing. I think that's one of the I don't know.
Speaker 1: Everything is interesting right now, but it's more maybe one
Speaker 1: of the more puzzling things is why isn't bitcoin down more? Uh,
Speaker 1: there's it's obviously down a lot. It's already fallen a lot.
Speaker 1: This here, but I don't know. I have said this
Speaker 1: a few different times. If you had told me that
Speaker 1: f t X was going to file for bankruptcy, I
Speaker 1: would have said, okay, that I mean bitcoin below ten
Speaker 1: thousand obviously did not happen. I was wrong. What does
Speaker 1: this mean for? I mean, I don't They've been articles
Speaker 1: over the weekend about potential repercussions at Sam Bateman Freed
Speaker 1: could see. But I'm thinking bigger picture here, Katie, like
Speaker 1: what it means for Since he was the face of crypto,
Speaker 1: his face was literally on advertisements in San Francisco. F
Speaker 1: f t X was on the Miami Stadium. Crypto dot
Speaker 1: com is on the Staples formerly known as the Staple
Speaker 1: Centers Crypto dot com. I mean, what does it all mean.
Speaker 1: I think it's important to watch what's happening. In terms
Speaker 1: of the exchanges. There was a story on the Bloomberg
Speaker 1: today that exchanges of seeing billions of dollars in outflows.
Speaker 1: I think you're seeing a big retreat among holders. They
Speaker 1: want to take their money off exchanges, they want a
Speaker 1: gold to cold storage, they want control of their keys.
Speaker 1: This big centralization that we've seen in crypto, which you know,
Speaker 1: there's been a lot of jokes like, oh, it's not
Speaker 1: so decentralized after all. But maybe you're seeing sort of
Speaker 1: the unraveling of that because you are seeing this big
Speaker 1: push that people don't want to be on exchanges anymore.
Speaker 1: They want to have control of their keys, control of
Speaker 1: their bitcoins. What I thought it was supposed to be
Speaker 1: about initially, When I think about it, when you start
Speaker 1: to get other players involved, it becomes a different thing exactly.
Speaker 1: I think. I think it was part of the growing
Speaker 1: pains of trying to create new investors in the cryptosphere,
Speaker 1: was this push towards centralization. So I think that's going
Speaker 1: to be one of the storylines to watch over the
Speaker 1: next few months. I also wonder what it means for
Speaker 1: the other firms that SPF and f t X went
Speaker 1: to quote unquote rescued right. He was seen as the
Speaker 1: white Knight, and with the collapse of three arrows, for example, Voyager,
Speaker 1: and you know what happens to those firms. Yeah, I
Speaker 1: wish I had an answer. One of the ways I
Speaker 1: phrased it, maybe it was one of you earlier today
Speaker 1: I can't even remember. Is basically it would be easier
Speaker 1: to talk about the projects that SPF or Alimato or
Speaker 1: f t X wasn't involved with if you think about
Speaker 1: not involved exactly, if you think about the extent he
Speaker 1: had so many he had tentacles in almost every corner
Speaker 1: of the space. And there's a great you know, right
Speaker 1: up in the Financial Times over the weekend. And then
Speaker 1: Matt Levine took it on today with the balance sheet
Speaker 1: of Serum I had not even heard of. I had neither.
Speaker 1: But also the Robin Hood Steak, which is, you know,
Speaker 1: among the most valuable assets of the company has It's amazing.
Speaker 1: I believe it was nine hundred nine billion dollars in liabilities,
Speaker 1: nine hundred million nine million in liquid assets. I'm not
Speaker 1: great at maths, but it doesn't seem to add up.
Speaker 1: There's a hole there. Well, and you do wonder if
Speaker 1: there was more regulatory oversight would this have happened. I
Speaker 1: don't say the R word degulation. I mean, we're not
Speaker 1: even talking about the U S company. That's another question.
Speaker 1: I have not enough for the time we have left.
Speaker 1: Bahamas Based filed in the US for bankruptcy. I don't
Speaker 1: know why, how does that work? I don't know. God,
Speaker 1: the world is a funny place. As Katie said, a
Speaker 1: lot of things interesting in this one Katy Greifeld, Thank
Speaker 1: you so much. She is Bloomberg New Senior Markets reporter
Speaker 1: and so much more. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. We'll walk into an Apple store
Speaker 1: and you know what, You're going to get, white oak
Speaker 1: tables and eat rows at stores all around the globe.
Speaker 1: And yet what we're starting to see some differences actually
Speaker 1: at some stores as Apple retail workers, Tim are starting
Speaker 1: to union. Not interestingly enough, it's kind of mirroring what's
Speaker 1: happening at other companies and other stores around the country.
Speaker 1: We got Josh Idolson all over it in Bloomberg business Week.
Speaker 1: His story is featured in the upcoming issue of Business
Speaker 1: Week magazine. You can read it now though on the
Speaker 1: Bloomberg terminal and at bloomberg dot com slash of business Week.
Speaker 1: Josh joins us on the phone from San Francisco. He's
Speaker 1: a labor reporter for Bloomberg News. Also with us right
Speaker 1: now is Joel Webber. He's the editor of Bloomberg Business Week.
Speaker 1: He's with us in the Bloomberg Interactive Broker's studio So, Joel,
Speaker 1: what happened here? I thought the Apple Genius Bar and
Speaker 1: the Apple store were great places to work. So Apple
Speaker 1: obviously the world's most valuable UH company. UM. And the
Speaker 1: thing that I think we've all assumed with that UM
Speaker 1: is that it is this great place to work UM.
Speaker 1: And the stores themselves, UM. You know, there's corporate and
Speaker 1: then there's store. UM has never really felt like a
Speaker 1: retail environment. It's felt like a high concept UH store
Speaker 1: where you know, you you have these objects of desire
Speaker 1: that are on display in a very curated place, and
Speaker 1: you know, obviously if you have a problem with those products,
Speaker 1: you have to go there. But it's never really felt
Speaker 1: like a retail job. But now the thing that's happened,
Speaker 1: and what Josh is reporting is based on, is that
Speaker 1: rit large corporate America is going through this thing with
Speaker 1: labor and unionization has really stepped up. And we've seen
Speaker 1: it at Amazon, We've seen it at Starbucks, as Josh
Speaker 1: writes about UH, and now we're even beginning to see
Speaker 1: it at Apple specifically in the stores. So Josh, bring
Speaker 1: us up to speed what's changed in the stores. Workers
Speaker 1: who have been in these stories a long time. Today,
Speaker 1: the culture has really transformed, and that these jobs in
Speaker 1: Apple stores have started to feel a lot more like
Speaker 1: retail jobs, in particular because of concerns about understaffing, an
Speaker 1: issue that workers say gets blamed by management on workers
Speaker 1: for calling out up sick and with upselling, this pressure
Speaker 1: to get people to spend more money, including getting people
Speaker 1: who came in with the device they wanted fix too
Speaker 1: instead traded in and buy something new what the company
Speaker 1: calls an ownership opportunity, and workers have described ways that
Speaker 1: that performance on selling stuff to customers is measured, and
Speaker 1: that those measurements actually are shared with coworkers, whether it's
Speaker 1: an email or on the wall in the break room
Speaker 1: and can be marked and read. If you're say statistics
Speaker 1: are below where the company wants them to be. What
Speaker 1: was that a shift that happened recently or is it
Speaker 1: a shift that's just coming into relief right now? I mean,
Speaker 1: where do we attribute this to and when? So? Workers
Speaker 1: say that things began to change after Tim Cook took
Speaker 1: over in two thousand eleven and have changed in a
Speaker 1: more accelerated way since Dear Joe O'Brien, the head of
Speaker 1: retail for Apple, took that position. In workers describe things
Speaker 1: like bingo game to try to get you to sell
Speaker 1: Apple devices, like the stylists, and the experience of being
Speaker 1: chided or having your commitment to the company question because
Speaker 1: you missed a chance to upsell a customer about purchasing
Speaker 1: Apple Care. And some workers who've been there a long
Speaker 1: time really feel like unionization is the path to try
Speaker 1: to protect the values that the company is supposed to
Speaker 1: stand for and the vision of what that worked places
Speaker 1: like for workers and for customers that drew them to
Speaker 1: the company in the first place. I gotta say, Josh,
Speaker 1: it feels like, you know, going to buy a car
Speaker 1: like a million years ago, and they, you know, were
Speaker 1: selling you the roof, the rust undercoding, you know, make
Speaker 1: sure you kind of throw it in. That's what it
Speaker 1: felt like, and it felt so on Apple. Having said
Speaker 1: that in your story, you say Apple's overall control over
Speaker 1: its workforce um as having problems. It's really on multiple fronts.
Speaker 1: What's going on at Apple more broadly, you know, whether
Speaker 1: it's Fox Con, whether it's you talk about the maps
Speaker 1: at there's a lot of stuff going on. It feels
Speaker 1: like when it comes to Apple workers, there's been scrutiny
Speaker 1: for a long time about Apple's international supply chain. More recently,
Speaker 1: we've seen Apple contract workers speaking up, including at an
Speaker 1: office that they call a black site, where workers said
Speaker 1: there were restrictions on even talking to direct employees of Apple.
Speaker 1: We saw during the pandemic some of the software workers
Speaker 1: becoming outspoken about issues from sexual harassment to return to
Speaker 1: work pressure, to safety, and these struggles are connected. In fact,
Speaker 1: some of the software workers who alleged they were forced
Speaker 1: out of the company took road trips and went and
Speaker 1: visited the Apple stores and gave out cards with QR
Speaker 1: codes to encourage the retail workers to get in touch
Speaker 1: with union organizers. So, Josh, I know some of this
Speaker 1: is uh opique, but you know the stores themselves, Like,
Speaker 1: how big of a of a of a portion of
Speaker 1: the company's bottom line do the stores account for? Because ultimately,
Speaker 1: one of the reasons that I thought this story was significant,
Speaker 1: He's like, look like, we're almost in the holidays here.
Speaker 1: You're gonna go holiday shopping an Apple store. You're gonna
Speaker 1: between air pods and you know iPads, and you know,
Speaker 1: more often than not you might find yourself walking through
Speaker 1: an Apple store. So, so how much of the company's revenue,
Speaker 1: which is considerable um gets broken out into sort of
Speaker 1: the retail bucket in general. So Apple does not disclose
Speaker 1: how much of its sales happen in the stores versus
Speaker 1: online and or other people's stores, but it reported record
Speaker 1: fourth quarter revenue, most of it from selling products, and
Speaker 1: as the story discusses, these stores have played a pivotal
Speaker 1: role in getting people comfortable with and excited about Apple's
Speaker 1: products and building a sense of loyalty and connection to
Speaker 1: the brand. As one expert it to me, the store
Speaker 1: is also a temple to worship at the altar of
Speaker 1: the Apple brand. I in researching this story, read an
Speaker 1: article about the launch of the Apple store in taws
Speaker 1: in Maryland, the one that now more than a decade later,
Speaker 1: has unionized. Where Apple is talking about these stores is
Speaker 1: a place for people to get to know this company
Speaker 1: that at the time had a much smaller market share.
Speaker 1: Now Apple's market share has shot up for personal computers,
Speaker 1: and more importantly, they now have a majority market share
Speaker 1: in the US for that iPhone, And there's an incalculable
Speaker 1: role that the Apple store has played in building that
Speaker 1: relationship with customers. And it's a relationship that some workers
Speaker 1: feel is being undermined by this pressure to squeeze more
Speaker 1: money out of those customers and at the same time
Speaker 1: to squeeze more labor out of these overstretched workers. Well,
Speaker 1: it's a great story, and I know in the upcoming
Speaker 1: issue of Bloomberg Business Week untill be out later on
Speaker 1: this week or thanks to Josh Idolson, Josh's labor reporter,
Speaker 1: Bloomberg News with us on the phone and via zoom
Speaker 1: from San Francisco, and of course our thanks to the
Speaker 1: editor of Bloomberg Business Week, Joel Webber. And again you
Speaker 1: can also find this story at Bloomberg dot com Slash
Speaker 1: business Week can always on the Bloomberg terminal. But interesting
Speaker 1: in terms of the evolution of what we're seeing here
Speaker 1: at Apple, Yeah, and also just interesting seeing in the
Speaker 1: broader context of what's happening with the other companies that
Speaker 1: Josh mentioned, including what's going on in Amazon, what's going
Speaker 1: on Starbucks, um Stars especially another one of those places
Speaker 1: where widely seen is a great place to work. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Fill among our
Speaker 1: most read today how Presidents Joe Biden Jim Ping of
Speaker 1: China gree to a series of goodwill gestures intended to
Speaker 1: improve ties between their countries after the first in person
Speaker 1: meeting between the leaders of the U S and China
Speaker 1: since the pandemic began. Well. President Biden, speaking earlier today
Speaker 1: from Bali, on the possibility of China taking over Taiwan,
Speaker 1: I'm absolutely believe there's need not be a new Cold War.
Speaker 1: I do not think there's any imminent of attempt on
Speaker 1: the part of China to invade Taiwan, and I made
Speaker 1: it clear that our policy in Taiwan has not changed
Speaker 1: at all. That was President Biden, speaking to the press
Speaker 1: after meeting with China's President Shi jing Ping earlier today.
Speaker 1: I got a great guest with us. Dexter Tiff Roberts
Speaker 1: is back with us. He's senior Fellow for the Mansfield
Speaker 1: Center at the University of Montana, also senior Fellow at
Speaker 1: the Antic Council's Asian Security Initiative. Also former Bloomberg Business
Speaker 1: Week China bureau chief and the author of the book
Speaker 1: The Myth of Chinese Capitalism, The Worker, the Factory, in
Speaker 1: the Future of the World. He joins us via zoom
Speaker 1: from a Zola this afternoon. Dexter, good to have you
Speaker 1: back with us. What did you make of President Biden's
Speaker 1: comments following his first in person meeting UH since in
Speaker 1: years with President Chijin Ping. Yeah, well, clearly he's trying
Speaker 1: to reassure Beijing that the policy hasn't changed. And you
Speaker 1: have to keep in mind this comes after I think
Speaker 1: maybe seven separate statements by Biden that the US would
Speaker 1: come to the defense of Taiwan in the case of
Speaker 1: an invasion by Beijing and UH so that not surprisingly
Speaker 1: has gotten Beijing very riled up. So Beijing, I think
Speaker 1: they would welcome this comment, this UH support for the
Speaker 1: one child policy. On the other hand, Beijing has been
Speaker 1: saying for a while, you say one thing, you you
Speaker 1: the United States and Biden say one thing, but you
Speaker 1: you actually act in a different way, and they along
Speaker 1: with those other comments by Biden about supporting Taiwan in
Speaker 1: the military situation, there have been the repeated high level
Speaker 1: visits by various first by backing the Trump administration officials,
Speaker 1: and now those have continued a course, most recently with
Speaker 1: Pelosi's visit to Taiwan. Hey, you know, Tiff you've written
Speaker 1: about China. You know China really well, and we talked
Speaker 1: about the book, your book, The Myth of Chinese Capitalism,
Speaker 1: and you know about the divisive system that was there
Speaker 1: that ultimately you know, would be very challenging to the
Speaker 1: country's development going forward. How do you see it? I mean,
Speaker 1: is is Chinese capitalism working or do you see this
Speaker 1: is a big undoing kind of the news flow that
Speaker 1: we've seen out of China over the last month or so.
Speaker 1: I think they're unfortunately, you know, they have not made
Speaker 1: progress on getting the economy to work better, nor nor
Speaker 1: marketize it war I mean, really we've seen the opposite
Speaker 1: under Sijing Ping for a number of years now, actually
Speaker 1: going back earlier, which is this increasing imposition of state
Speaker 1: control over the economy, continuing crackdown on the private sector.
Speaker 1: And you know today what they're really dealing with is, uh,
Speaker 1: they're sort of the economy is suffering under the twin
Speaker 1: weights of both the continuing COVID zero policy, which is
Speaker 1: you know, been good at preserving life in China, which
Speaker 1: is important, but it's been deadly for the for the economy,
Speaker 1: and then also the continuing property crackdown. So I would
Speaker 1: say you know, you they continue to uh struggle with
Speaker 1: the economy and the policy really hasn't been going in
Speaker 1: the right direction. Well, how do you take because we
Speaker 1: actually talked about how Chinese a d R as a
Speaker 1: train in the US. Today we're rallying and this is
Speaker 1: because we saw a couple of things, um, some easing
Speaker 1: and help for the troubled and indebted Chinese property sector.
Speaker 1: And then on Friday we got news about maybe easing
Speaker 1: of COVID nineteen. But it does feel like a back
Speaker 1: and forth with policy. So how are we as observers
Speaker 1: not in China, how are we as investors supposed to
Speaker 1: kind of read sometimes and move forward sometimes a step backward. Well, yeah,
Speaker 1: I think that's that's what you keep seeing, and maybe
Speaker 1: unfortunately it's too often one step forward and two steps back.
Speaker 1: And I think with the first with the COVID zero policy,
Speaker 1: I know, or the some signs of easing, obviously they're welcomed.
Speaker 1: People uh have referred to them as baby steps um.
Speaker 1: And ultimately the challenge they face there is they you know,
Speaker 1: they announced the easy, the slight easings in COVID zero.
Speaker 1: You know, meanwhile, we've seen COVID surging across the country Beijing,
Speaker 1: uh Jung Joe, where the world's largest iPhone factory is,
Speaker 1: and down in Guangzhou. And they simply can't ease up
Speaker 1: on these policies until first of all, they have a
Speaker 1: much broader vaccination program across the country, particularly with elderly
Speaker 1: p people who have a low level of vaccination there,
Speaker 1: and uh and and and it's it's not gonna you know,
Speaker 1: no matter what they say about easing, They're gonna have
Speaker 1: to pull back until they actually start to get COVID
Speaker 1: under control. I think the art money to bet maybe
Speaker 1: on certainly no serious easing until after the National People's
Speaker 1: Congress next March. Wow, that's quite a bit of time,
Speaker 1: although it has been you know, close to three years
Speaker 1: at this point that they've been dealing with this. Hey, Dexter,
Speaker 1: just in the last minute that we have. You know,
Speaker 1: you lived in Beijing for what two decades when you
Speaker 1: were with Bloomberg Business Week and writing your book, Um,
Speaker 1: did what do you hear from people on the ground
Speaker 1: there right now, people you're in touch with about what
Speaker 1: life is like and how things have shifted over the
Speaker 1: last couple of years. Well, you know, first of all,
Speaker 1: I think there is a concern as that we were
Speaker 1: discussing about COVID zero, the rolling lockdowns of cities are continuing.
Speaker 1: I think there's growing frustration about that, even though there
Speaker 1: has been you know, there has been support earlier for
Speaker 1: for the gun Ru's efforts to try to keep people safe,
Speaker 1: but we're starting to see that, start to see fishers
Speaker 1: in that, if you will. I think the economy is
Speaker 1: a real worry about people, and there's also a growing
Speaker 1: concern about this politicization of the economy, this feeling that
Speaker 1: uh that politics comes first and you know, the private private,
Speaker 1: private entrepreneurs and else where. I have to bend to that. Hey, Ti,
Speaker 1: if I want to ask you kind of some rapid
Speaker 1: fire questions if I can so China and the U S.
Speaker 1: How would you describe the relationship in the way forward?
Speaker 1: Is it a good one? Oh? I think it's actually
Speaker 1: a troubled relationship. Unfortunately, you know it's there. It's really
Speaker 1: a competitive relationship. They are both see each other very
Speaker 1: much as their number one rival for for global superpower status.
Speaker 1: And you know, despite what they might say in meetings
Speaker 1: like the one yesterday between Biden, Biden and She, that
Speaker 1: that is the reality so the Chinese economy, will it
Speaker 1: still be the end in the world has relied on
Speaker 1: I think the again, you know, not not great news there.
Speaker 1: I think that, you know, because of some of the
Speaker 1: things we discussed earlier, COVID zero policy, of the crackdown
Speaker 1: on the property sector, but then larger structural issues. China's
Speaker 1: trying to make this transition from uh a you know,
Speaker 1: factory to the world model, which was investment in debt
Speaker 1: driven to a much more one driven by its own consumers,
Speaker 1: one driven by household consumption. And that's a really tough
Speaker 1: transition that is going to mean uh, probably slowing growth
Speaker 1: for a number of years to come. Are we seeing
Speaker 1: the world divided up US and its allies China and
Speaker 1: its allies at this point or was it kind of
Speaker 1: divided up aforehand. I mean, I think that, you know,
Speaker 1: it has been divided up, but I think, uh, it's
Speaker 1: it's yeah, we're seeing it slide further in in that direction.
Speaker 1: Two separate polls, I would say though that, uh, you know,
Speaker 1: the US has made some progress in in the last
Speaker 1: year two in terms of bringing more allies together, and
Speaker 1: you know, China's helped and in its own way on
Speaker 1: that as well by you know, just one example, its
Speaker 1: support for Russia related relative support for Russia related to
Speaker 1: the invasion of Ukraine has turned a lot of European
Speaker 1: countries away from China and made them feel that they
Speaker 1: have more in common with the US. So, given the
Speaker 1: answers to your rapid fire questions from Carol just now, Tiff,
Speaker 1: what does it mean for investors? As I mentioned, we're
Speaker 1: getting earnings from Ali Baba and j D later this week. Uh,
Speaker 1: the stocks in that traded here in the US, the A,
Speaker 1: d R s of Chinese companies have really been getting
Speaker 1: beaten up over the last year and a half, although
Speaker 1: they've rallied recently. What does it mean for investors who
Speaker 1: want to be in the space? Well, I'm afraid we're
Speaker 1: going to see more beating up of stocks. You know,
Speaker 1: Ali Baba for the first time ever, they just had
Speaker 1: their their massive singles Day, you know, our sort of
Speaker 1: our Black Friday of retail online retail sales, and this
Speaker 1: is the first time Ali Baba did not announce what
Speaker 1: the figures were because they weren't very good apparently. Um,
Speaker 1: I think that we're going to see, as I said,
Speaker 1: a continued slow down in the Chinese economy. We're gonna
Speaker 1: see pressures on big multinationals. Are already seen it with
Speaker 1: companies like Apple to diversify their supply chain out of
Speaker 1: out of China. The latest you know, lockdowns in Jung
Speaker 1: Joe on the world's largest iPhone factory just show that.
Speaker 1: So I think we're gonna have to have to see
Speaker 1: a sort of a re reckoning with global portfolios and
Speaker 1: the realization that China won't be the growth driver that
Speaker 1: it has been in terms of global supply chains. Right,
Speaker 1: it's been as you mentioned Apple, it's been such an
Speaker 1: important part. It's given American consumers for many years ability
Speaker 1: to pay, you know, not a lot for a lot
Speaker 1: of things that we all need. And we know it's
Speaker 1: been shifting to some extent over the last you know,
Speaker 1: a few years, as China doesn't want to be kind
Speaker 1: of the manufacturer necessarily to the world. But does that
Speaker 1: mean in terms of global inflation, maybe it does stay
Speaker 1: higher because China is going to be very de going forward.
Speaker 1: I think there's definitely going to be related global inflation.
Speaker 1: There's you know, as companies feel the pressure to diversify
Speaker 1: their supply chains, partially because of the pandemic, partially because
Speaker 1: of the U S China tensions um, and partially just
Speaker 1: now the realization that it's not so smart to have
Speaker 1: all your eggs in one basket. Uh, They're gonna be
Speaker 1: costs associated with that, and ultimately those costs will have
Speaker 1: to be passed onto the consumer as well. All Right,
Speaker 1: we're gonna leave it there. Hey listen, Tiff, thank you
Speaker 1: so much. I always appreciate Dexter Tiff Roberts, Senior fellow
Speaker 1: with the Atlanta Council's Asia Security Initiative. As we mentioned,
Speaker 1: a former Bloomberg Business Week China bureau chief, and his
Speaker 1: book is about the myth of Chinese capitalism, the work
Speaker 1: of the factor in the future of the world, and
Speaker 1: really gets into I feel like some of these issues
Speaker 1: that maybe are also coming through when it comes to
Speaker 1: the longer term story for China specifically. Journal Now, but
Speaker 1: you let me drive? Oh no, no, no no, no, who's leave,
Speaker 1: I'll do vel. I want to drive. It's a good question.
Speaker 1: This is the drive to the globe on blue Bird Radio.
Speaker 1: All right, let's get to it. We've got just gottening
Speaker 1: on in a half minutes left in today's trading session.
Speaker 1: Charlie talking about you. Noticing too, Tim, just the rollover
Speaker 1: that we've seen in the equity trade. I described it.
Speaker 1: We described it as wobbly at the beginning of our
Speaker 1: broadcast and it continues to be that way. And we're
Speaker 1: definitely off our best levels of the session right across
Speaker 1: the board. Yeah, starts moving between games and losses more
Speaker 1: than a dozen at times today, but certainly seeing the
Speaker 1: downside with the S and P down time. Yeah, that's
Speaker 1: a lot searching for direction. Right, Let's get into it
Speaker 1: with Dan Eron's managing director and portfolio manager and Advisor
Speaker 1: Shares Investment Dan this afternoon joining us on the phone
Speaker 1: from Texas. Dan, how are you doing well? Thanks for
Speaker 1: having me on. It's good to have you back. Hey. Um,
Speaker 1: you've got a few plays that we want to talk about,
Speaker 1: and it's good to talk to you again. By the way, Um,
Speaker 1: you've got the Advisor Shares, pure Us, Cannabis et F
Speaker 1: and some other vice holdings. But I want to get
Speaker 1: a big picture from you before we get to those holdings. Um,
Speaker 1: where are we do you think? Because we're getting sort
Speaker 1: of different narratives from different FED speakers over the last
Speaker 1: twenty four hours, and investors certainly don't know what direction
Speaker 1: things should be going in. Yes, we see a lot
Speaker 1: of that. UM when there's is a lot of confusion,
Speaker 1: when there's lack of direction and people don't know what
Speaker 1: to do. I do think people should look at non
Speaker 1: correlated assets like perhaps cannabis, but more than that, often UM,
Speaker 1: consumer staples, UM, things that might be recession resistant, stock
Speaker 1: market resistant, things that people are going to spend money
Speaker 1: on or consume no matter what's going on with the
Speaker 1: economy or the stock market. Because is I'm not going
Speaker 1: to give you predictions on the future, especially when we
Speaker 1: see from the Fed and everywhere else lack of direction.
Speaker 1: People shouldn't be trying to guestimate that stuff. Hey, when
Speaker 1: you think about because you've got, as you mentioned, UM
Speaker 1: different ways to play the market, and you do have
Speaker 1: a pure US cannabisy t F M s O S
Speaker 1: is the ticker UH down so far this year, but
Speaker 1: it's up about over the past month. How did the
Speaker 1: recent midterms perhaps help UH that space or kind of
Speaker 1: just keep it neutral. Yeah, well, I can't shy away
Speaker 1: from the fact of those down numbers for the year,
Speaker 1: like you said, but cannabis until the past months has
Speaker 1: been in pretty much an eighteen or nineteen month draw down. Heck,
Speaker 1: ever since Biden was elected. They made promises back then,
Speaker 1: but a lot of people are pointing to these most
Speaker 1: recent mid terms. There's some ballot initiatives. Maryland just approved
Speaker 1: past adult use in the state of Maryland. That's a
Speaker 1: pretty populous state. Same thing in Missouri. So additional states
Speaker 1: continue to come online with cannabis. That increases sales yet again,
Speaker 1: but again we had politicians promising us various levels of
Speaker 1: cannabis reform. I would like to say reform, because I
Speaker 1: don't think we're ever going to have a coast to
Speaker 1: coast full legalization everywhere. If you really drill down, alcohol
Speaker 1: is not even legal everywhere. It's a very convoluted um legalization. Wait,
Speaker 1: hold on, what are you talking about it? I can
Speaker 1: I mean, I know you can't buy it in the
Speaker 1: grocery store in certain states. What do you mean by that? Um?
Speaker 1: Great question. Um, there's cities and counties that don't have
Speaker 1: package stores. You have to go to the border to
Speaker 1: find a liquor store. Uh. Some states sell liquor on Sundays,
Speaker 1: some don't. Some it's beer and wine on you can't talk.
Speaker 1: Sometimes you can't buy it before noon. Sometimes, Uh, there's
Speaker 1: locations that have bars. Some places you have to buy
Speaker 1: a membership. Some places don't have any. It's very complicated stuff.
Speaker 1: So at the most cannabis might be something resembling that
Speaker 1: type of model. But we we digress um in the
Speaker 1: slame duck session, you know, we just had these elections.
Speaker 1: What we ended up with. It looks like it's not
Speaker 1: even done yet. It's probably Republican controlled house. It looks
Speaker 1: like the Democrats are going to continue to control the Senate,
Speaker 1: and a lot of the experts feel that is good
Speaker 1: that the current members of the Senate will finally finally
Speaker 1: roll over and do what's right, what they've been promising
Speaker 1: for the past two years, with the House of Representatives
Speaker 1: already already approved, and that some level of cannabis reforms
Speaker 1: such as safe banking not gonna hold my breath. And
Speaker 1: I'm not trying to like rein on your parade, but
Speaker 1: i feel like I've had this conversation a million times,
Speaker 1: and I'm thinking, depending on what comes at the world
Speaker 1: next year, which could be maybe a recession some other
Speaker 1: hard times, I don't know. Hey, I just want to
Speaker 1: say something about the Safe Banking Act since it's on
Speaker 1: the tip of my tongued in and you can probably
Speaker 1: speak to this too. But I was in California over
Speaker 1: the weekend, um, and I rode my bike by a
Speaker 1: cannabis store. Uh. And I think because of the lack
Speaker 1: of a Safe Banking Act, they deal only in cash
Speaker 1: and there were there was armed security outside of it
Speaker 1: as a result of what they're doing with cash because
Speaker 1: they have to. And I thought to myself, wait a second,
Speaker 1: you know, if we do finally see because they're worried
Speaker 1: about getting robbed because everything is in cash, it's kind
Speaker 1: of crazy like and this is you know, they're they're
Speaker 1: very very much on point with worrying about being robbed.
Speaker 1: There's been armed robberies and murders happen in dispensaries because
Speaker 1: it's all cash business. It is out rageous, especially when
Speaker 1: these politicians have been playing games with people's lives over
Speaker 1: the last couple of years, when the Democrats have had
Speaker 1: control of the Senate this whole time, promised to reform
Speaker 1: hasn't happened yet. That's why we think it's finally going
Speaker 1: to happen in the lame Duck session. I mean, we
Speaker 1: have the American Bankers Association in favor of safe banking.
Speaker 1: Janet Yellen's a favor of safe banking, se the populations
Speaker 1: in favor of safe banking, and a lot of people
Speaker 1: are finally pointing to and again I've founded like a
Speaker 1: broken record for the last two years because I foolishly
Speaker 1: believed in politicians a little bit. But we think we
Speaker 1: might finally get it in the safe in the safe
Speaker 1: excuse me, the lame duck session. And if you look
Speaker 1: at history, awful lot of legislation has passed in the
Speaker 1: lame duck session because they're not most politicians is important
Speaker 1: goals to get elected or get re elected, and um
Speaker 1: that is finally lifted off during this little lame duck session.
Speaker 1: We shall see, we shall see, um what will happen.
Speaker 1: But good to check in with you. Dan Aaron's managing
Speaker 1: director portfolio manager at the actively managed E t F
Speaker 1: Investment Management from Advisor Shares Investments, joining us on the
Speaker 1: phone from Texas. Thanks for listening to Bloomberg Business Week.
Speaker 1: Download the podcast on iTunes, SoundCloud, or Bloomberg dot com,
Speaker 1: and you can also listen to our radio show at
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