WEBVTT - Sun Valley, Regulations, And Markets (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.880 at Bloomberg dot com slash podcast. Shnani bask joins is 0:00:23.000 --> 0:00:25.400 she's usually in the Bloomberg Interactive Broker Studio. I think 0:00:25.440 --> 0:00:29.920 she's somewhere out in like Sun Valley, Ido, hiding in 0:00:29.960 --> 0:00:32.839 a bush waiting to, you know, just pounce on interviewing. 0:00:32.920 --> 0:00:36.720 Summer Camp for Billionaires, Summer Camp for billionaires, Media moguls, 0:00:36.760 --> 0:00:38.959 tech moguls, they're all out in Sun Valley. They get 0:00:39.000 --> 0:00:41.839 together every year. Um, and that's where a lot of 0:00:42.159 --> 0:00:45.560 M and A deals in that TMT space actually originate. 0:00:45.960 --> 0:00:49.080 Many of the big, big deals that we come to 0:00:49.120 --> 0:00:51.080 know and love. Shanali, thanks so much for joining us. 0:00:51.400 --> 0:00:55.360 How Sun Valley, Yeah, it's pretty interesting so far. It 0:00:55.440 --> 0:00:57.000 is like summer calm. Do you see a lot of 0:00:57.000 --> 0:01:00.440 people in T shirts and vans and Adida speakers the 0:01:00.480 --> 0:01:04.679 occasional Valencia Ada and and Valentinos, but it is a 0:01:04.680 --> 0:01:06.960 pretty chill vibe. You see a lot of people. Remember 0:01:06.959 --> 0:01:09.920 it's a very small area, but a very restricted area, 0:01:10.000 --> 0:01:12.880 so you don't have a lot of access here of course, 0:01:12.959 --> 0:01:17.319 just a few reporters. But really it's a very secretive conference. 0:01:17.640 --> 0:01:19.800 A lot of people sitting at the coffee shop and 0:01:19.800 --> 0:01:22.120 you wonder what they're talking about. You you expect a 0:01:22.120 --> 0:01:24.080 lot of deals to come out of this, a lot 0:01:24.120 --> 0:01:26.480 of partnership. It's a lot of media moguls, you know. 0:01:26.560 --> 0:01:30.840 David daslov Um of Warner Brothers had come out talked 0:01:30.880 --> 0:01:34.080 to reporters a couple of times. Yesterday. Bob Iger has 0:01:34.080 --> 0:01:36.640 been walking around as well. We asked what he's up to. 0:01:37.280 --> 0:01:41.440 Um he reiterated that he's retired. However, he has certainly 0:01:41.520 --> 0:01:44.160 been holding a lot of meetings here as well. There's 0:01:44.160 --> 0:01:47.280 a lot. You know, if you're retired, shouldn't you be 0:01:47.400 --> 0:01:49.680 like golfing or fishing something. That's what they do. They 0:01:49.720 --> 0:01:52.280 golf and fish and Sun Valley and then they go 0:01:52.360 --> 0:01:54.720 to some they go to some meetings during the day 0:01:54.840 --> 0:01:57.840 and they just see and be seen. And Um channally, 0:01:58.080 --> 0:02:01.639 as a reporter who has bidden there before, I recommend highly. 0:02:02.120 --> 0:02:03.720 You have to go out to the bars at night. 0:02:03.920 --> 0:02:06.000 That's where you find them, and that's where you can 0:02:06.000 --> 0:02:08.519 get some good stuff. So, um, you're gonna have to 0:02:08.600 --> 0:02:10.920 just you know, buck up and and you know, stay 0:02:10.960 --> 0:02:13.120 out late and have fun with some of these moguls. 0:02:13.160 --> 0:02:15.080 I think she'll be able to do. Yeah, yeah, you're 0:02:15.200 --> 0:02:17.600 in earlier here late. We were here at four thirty 0:02:17.639 --> 0:02:20.520 in the morning. The executive going for runs. You know, 0:02:20.600 --> 0:02:23.520 Alex Carp's coming in of talent here very early, just 0:02:23.639 --> 0:02:26.160 this morning. So there is no sleep in Sun Valley. 0:02:26.200 --> 0:02:29.080 But there's definitely a lot of uh, there's definitely a 0:02:29.080 --> 0:02:31.480 lot of you know, smoozing on the side. So what 0:02:31.560 --> 0:02:33.440 did we hear from Zaslov yesterday? What did he have 0:02:33.520 --> 0:02:36.000 to say? I thought he had addressed like a range 0:02:36.000 --> 0:02:40.080 of topics from CNN to HBO. Yeah he did. He 0:02:40.120 --> 0:02:42.200 talked about how, you know, the advertising market is not 0:02:42.280 --> 0:02:44.800 in a terrible place right now. You know, it's these 0:02:44.840 --> 0:02:48.160 copecutives they recognize that, Yeah, the economics times are hard, 0:02:48.600 --> 0:02:51.480 but they're trying to strike a note of confidence regardless, 0:02:51.520 --> 0:02:54.160 they have to resume business. When he was asked about 0:02:54.160 --> 0:02:57.440 any future deal, the comment he really made was that 0:02:57.680 --> 0:03:01.080 we feel good about our strategic footprint, our eat, which means, 0:03:01.160 --> 0:03:03.359 you know, don't expect us to spend all that much 0:03:03.360 --> 0:03:07.480 money after a transformative deal already. So there are trying 0:03:07.480 --> 0:03:09.720 to check a lot of confidence out here and and 0:03:09.800 --> 0:03:12.839 kind of reaffirm their strategies as they kind of look 0:03:12.960 --> 0:03:14.960 to their peers and see what else is going on 0:03:15.000 --> 0:03:18.600 out there, how their peers are are shifting their businesses 0:03:18.639 --> 0:03:21.400 in the wake of major, major, major descruption, both in 0:03:21.440 --> 0:03:26.440 the news business as well as the content business. Remember, um, 0:03:26.520 --> 0:03:29.080 Jeffer Kastenberg is already here. A lot of these people 0:03:29.120 --> 0:03:33.919 are well aware and familiar of the trials and tribulations 0:03:33.960 --> 0:03:37.560 of the streaming business, which has gone through major upheavals. Um. 0:03:37.600 --> 0:03:40.920 But remember the ad business has a lot of ramifications 0:03:40.960 --> 0:03:42.920 for a lot of people. Coin based The CEO is 0:03:42.960 --> 0:03:45.680 also here. Um. You know that's a company that used 0:03:45.680 --> 0:03:49.320 to spend a lot of money on marketing. I'm surprised 0:03:49.320 --> 0:03:52.120 they spent the money to even send him there. You know, 0:03:52.120 --> 0:03:55.880 they're not even hiring anybody. They're firing like they decimated 0:03:55.920 --> 0:04:01.440 their employees. Uh. And um, you know cryptos and free fall. 0:04:01.560 --> 0:04:07.120 That guy should be like saving money somewhere. Yeah, you know, 0:04:07.160 --> 0:04:09.400 it's interesting. There's some other fintech bolks out here too. 0:04:09.400 --> 0:04:11.520 I'm speaking with Anthony Nodo a little bit later they 0:04:11.600 --> 0:04:15.240 so bydo I ran into Max Levchin, this firm CEO 0:04:15.400 --> 0:04:17.680 as well. Um I might be eating a little bit 0:04:17.760 --> 0:04:20.280 later with san Druck and Miller as well. I mean, 0:04:20.360 --> 0:04:22.640 these are folks that you know, are are you know 0:04:22.760 --> 0:04:26.440 much more Um blunt about the pains we're seeing in 0:04:26.440 --> 0:04:28.680 the market, because these are people who feel it every 0:04:28.720 --> 0:04:31.040 day when they wake up in the morning, unlike the 0:04:31.160 --> 0:04:33.760 media dos where you know, the first thing David Does 0:04:33.839 --> 0:04:39.400 once said was I'm not an economist right about the economy. 0:04:39.640 --> 0:04:43.520 So so how's the like, just the feel the attendance there. 0:04:43.520 --> 0:04:45.080 I mean, you know, a couple of years they had 0:04:45.120 --> 0:04:48.320 to uh not have the conference due to COVID, and 0:04:48.320 --> 0:04:50.479 I think they had They had it last year maybe 0:04:50.480 --> 0:04:54.640 with some restrictions. How's the vibe, how's the feel out there? Yeah, 0:04:54.640 --> 0:04:56.880 it's so interesting because you come here and last year 0:04:56.880 --> 0:04:59.440 there are no kids allowed, but we hear people can 0:04:59.480 --> 0:05:01.760 bring their it's in their families, so you do see 0:05:01.760 --> 0:05:04.680 people running bikes and kind of biking around and it's 0:05:04.720 --> 0:05:07.520 a very different feel. You're talking about David zaslav and 0:05:07.800 --> 0:05:09.920 at CNN. Some of the TNN talent is here, Like 0:05:09.960 --> 0:05:12.880 Aaron Vernett saw him talking to her asking about her 0:05:12.920 --> 0:05:17.360 kids yesterday. So people are meeting families where they're they 0:05:17.400 --> 0:05:20.360 do have the COVID test. There are a lot of maths, 0:05:20.960 --> 0:05:23.640 you know, at this level, executives are still anxious. Nobody 0:05:23.680 --> 0:05:25.800 wants to go back with COVID and and not be 0:05:25.880 --> 0:05:28.440 able to resume their plans next week. It's a short 0:05:28.480 --> 0:05:30.800 week this week because it's right after the holidays. So 0:05:30.880 --> 0:05:33.720 you did you feel the rush of people getting in 0:05:33.800 --> 0:05:36.560 late last night and early this morning. Uh, they didn't 0:05:36.600 --> 0:05:42.719 have that kind of you know weekend as they normally would, right. So, um, 0:05:42.760 --> 0:05:45.920 you know it's interesting this kind of destination conference. You know, 0:05:45.960 --> 0:05:48.600 it's something similar Anthony Scaramucci and FTX to do this 0:05:48.720 --> 0:05:52.640 now in Bahamas, also bringing more families and kids around 0:05:52.720 --> 0:05:54.680 so that it's a place you can go enjoy as 0:05:54.720 --> 0:05:58.080 well as network and make new contacts and feels on 0:05:58.080 --> 0:06:01.840 the side, great stuff. Enjoy your time out there, Good 0:06:01.920 --> 0:06:05.840 luck getting snagging some interviews. Uh, it's very competitive out there, 0:06:05.839 --> 0:06:08.400 but I know you and Ed Ludlow will get your 0:06:08.440 --> 0:06:11.600 fair share of Shiney Bassk Wall Street reporter for Bloomberg 0:06:11.680 --> 0:06:14.520 knew she's at its sun Valley, Idaho, the Allen and 0:06:14.600 --> 0:06:18.640 Company media conference retreat where all the media models hang 0:06:18.640 --> 0:06:25.479 out in this summer. It's good stuff the discussion of 0:06:25.520 --> 0:06:29.680 the morning for me at least UH Roger Roger Rottenham, 0:06:29.920 --> 0:06:34.039 former head fund manager Global, UH co founder and former 0:06:34.080 --> 0:06:37.200 managing general partner of the Galilean Group and author of 0:06:37.440 --> 0:06:40.280 Uneven Justice, joins us, and of course, in October two 0:06:40.279 --> 0:06:43.479 thousand nine, Raj was arrested by the FBI for insider trading. 0:06:43.480 --> 0:06:46.760 Found guilty in May of fourteen counts of conspiracy and 0:06:46.800 --> 0:06:50.000 securities fraud sends to eleven years in prison, released a 0:06:50.040 --> 0:06:52.480 home and confinement in the summer of twenty nine, Team Matt, 0:06:52.560 --> 0:06:56.440 but rog back in the day was the absolute pinnacle 0:06:56.480 --> 0:06:58.200 of the hedge fund business. So big Matt that he 0:06:58.200 --> 0:07:01.520 would not even take my phone call as a subside analyst. 0:07:01.520 --> 0:07:04.400 That's how big is. Roger. Thanks so much for joining 0:07:04.480 --> 0:07:07.919 us here. You know, it's a fascinating conversation. You know, 0:07:08.000 --> 0:07:12.440 I'd love to get your perspective, maybe one key takeaway 0:07:12.480 --> 0:07:14.640 that you have given that now you have some perspective 0:07:14.720 --> 0:07:19.440 of time of the last dozen years with your legal issues, 0:07:19.480 --> 0:07:21.120 I'd love to get your sense of just maybe one 0:07:21.160 --> 0:07:29.200 key takeaway if you have one. Well, the key takeaway 0:07:29.600 --> 0:07:33.480 is the communal justice system today in the United States. 0:07:34.400 --> 0:07:37.320 It has a lot leaves a lot to be desired. 0:07:37.400 --> 0:07:42.480 It's not a fair system. The prosecutorial power is unchecked, 0:07:43.520 --> 0:07:50.160 and there's a nine seven percent convich rate. Um wow, 0:07:51.440 --> 0:07:55.320 that bears repeating. There's a nineties seven percent conviction rate 0:07:55.800 --> 0:07:58.200 in America. That's the kind of thing you hear about 0:07:58.520 --> 0:08:02.720 like Japan and you think something's not right. Yeah, it's 0:08:02.920 --> 0:08:08.400 similar to China or Russia. Right. And if you lose 0:08:08.480 --> 0:08:12.000 a trial, you get a trial penalty, which is twice 0:08:12.760 --> 0:08:17.800 what you would get if you didn't go to trial. 0:08:18.680 --> 0:08:22.880 But Roger and Real for you specifically, you had the 0:08:23.040 --> 0:08:28.760 absolute best legal representation anyone could ever have. Did you 0:08:28.840 --> 0:08:33.400 not get a fair shake? No? The The uphill battle 0:08:33.840 --> 0:08:40.880 is the government uses cooperating witnesses who they train and 0:08:41.080 --> 0:08:44.600 cous into a narrative that they want to give out. 0:08:45.480 --> 0:08:52.000 And in my case, the chief witness retracted his testimony. 0:08:52.280 --> 0:08:56.720 In another case in the same circuit the same stocks 0:08:57.760 --> 0:09:00.959 and the jury found the and then in that case 0:09:01.360 --> 0:09:06.559 not guilty. So so I would argue, and I know 0:09:06.640 --> 0:09:09.160 you want to talk about the markets, I would argue 0:09:09.920 --> 0:09:14.920 that causing witnesses and threatening them with long sentences unless 0:09:14.960 --> 0:09:20.080 they co operate is really the underbellue of the American 0:09:21.040 --> 0:09:24.560 justice system. I mean, I also want to hear about 0:09:24.600 --> 0:09:29.640 your book. You've got um a book out, Uneven Justice, 0:09:29.679 --> 0:09:31.680 And I assume this is what it's about. What are 0:09:31.760 --> 0:09:34.319 your what are the solutions that you propose? And do 0:09:34.360 --> 0:09:36.840 you think you can get anything done on this? Because 0:09:37.360 --> 0:09:41.160 from from from what we're hearing from you, um, and 0:09:41.280 --> 0:09:43.160 I guess what we see on TV and what we 0:09:43.280 --> 0:09:45.920 all know happens, you know, make a deal, uh and 0:09:46.040 --> 0:09:48.200 testify this way or you're going to go to trial 0:09:48.320 --> 0:09:54.280 and lose. Um. What can be done about it? Well? 0:09:54.559 --> 0:09:57.040 Number one, I think you should hold the prosecutors to 0:09:57.200 --> 0:10:00.920 the same standards as a defense lawyer. If a difference 0:10:01.000 --> 0:10:04.600 lawyer lies in court, he can be convicted of perjury 0:10:05.360 --> 0:10:11.480 and his license would be terminated. Number Two, if you're 0:10:11.480 --> 0:10:16.040 going to use cooperating witnesses, sentenced them for their crime 0:10:16.960 --> 0:10:23.600 prior to the testimony, so they have no incentive to lie. Ah. 0:10:24.520 --> 0:10:26.480 So Roger's just just to put a point on is 0:10:26.600 --> 0:10:32.160 your contention today, again, given the benefit of hindsight and perspective, 0:10:32.200 --> 0:10:39.160 that you were unfairly convicted? Uh? My contention is that 0:10:39.360 --> 0:10:42.199 I you know, I'm an American citizen. I respect the 0:10:43.000 --> 0:10:48.800 verdict of the jury. But when you have government cooperating 0:10:48.880 --> 0:10:56.760 witnesses who like to save their skin and then later 0:10:56.880 --> 0:11:02.560 on retracted in another isle under oath, then only one 0:11:02.600 --> 0:11:06.559 of the two is correct. And so I'm saying that 0:11:06.760 --> 0:11:12.040 the cooperating witnesses, um, who are lying that testing my 0:11:12.160 --> 0:11:17.640 nie should not be admitted. And you know, in my opinion, 0:11:17.920 --> 0:11:19.959 it's not a fair trial. This is why I wrote 0:11:20.000 --> 0:11:22.559 the book. I'm not trying to read try the case. 0:11:23.400 --> 0:11:27.120 The entire peaks of the book go to justice the phone. 0:11:27.720 --> 0:11:30.240 And I've spent a fair amount of my time talking 0:11:30.320 --> 0:11:36.559 to law students at Stanford and other universities two, you know, 0:11:36.920 --> 0:11:41.079 to create awareness of the comminal justice system. I'm just 0:11:41.160 --> 0:11:43.960 wondering if you think something can really change now. I mean, 0:11:44.040 --> 0:11:47.959 we've got a new head of the sec Gary Gensler, right, 0:11:48.040 --> 0:11:52.240 We've got a Supreme Court that is looking very activist. Um, 0:11:54.160 --> 0:11:56.080 do you think now is the time where you can 0:11:56.160 --> 0:12:01.920 actually achieve change. Well, in the last several years, there's 0:12:02.000 --> 0:12:07.560 been bipartisan support for criminal justice to phone. Unfortunately it's 0:12:07.880 --> 0:12:13.640 mainly focused on police brutality on the street against minorities. 0:12:14.760 --> 0:12:19.440 I would submit that the brutality in the courtrooms, where 0:12:19.559 --> 0:12:23.880 prosecutors are more interested in winning than getting the truth, 0:12:24.880 --> 0:12:27.080 should be also addressed. And you know it's not going 0:12:27.120 --> 0:12:29.520 to be easy, it's going to be slow, but you know, 0:12:29.640 --> 0:12:32.480 we have to take one step at a time. If 0:12:33.240 --> 0:12:37.439 if people like me, who my resume includes being arrested, 0:12:38.200 --> 0:12:41.240 fighting it all the way, going to jail and coming out, 0:12:42.080 --> 0:12:49.320 and I believe I have firsthand or front seat. Hey, 0:12:49.440 --> 0:12:51.400 rocher Love, I would love to get the benefit of 0:12:51.480 --> 0:12:55.120 your experience here on the markets here, you know, crazy 0:12:55.200 --> 0:12:57.640 times we live in. What's your market? Call here? What 0:12:57.679 --> 0:13:00.600 are you thinking about these markets? Okay? So I've been 0:13:00.640 --> 0:13:02.959 in the markets for thirty or forty years and I've 0:13:03.080 --> 0:13:08.319 never seen a market as turbulent as this, and I 0:13:08.440 --> 0:13:11.600 think it's time to be cautious. Let me explain one 0:13:11.960 --> 0:13:14.880 last year, I mean, this year, you've seen the unminding 0:13:15.000 --> 0:13:22.760 of several bubbles, the spack market, the crypto market, and 0:13:24.520 --> 0:13:30.360 um the meme stock bubble. So you have the unlinding 0:13:30.400 --> 0:13:35.040 of a bubble together with the fat tightening. So I 0:13:35.080 --> 0:13:38.079 would be very cautious. It's like, you know, if you 0:13:38.200 --> 0:13:40.880 know the roads are slippery, you're not going to take 0:13:40.920 --> 0:13:43.760 a motorcycle and driving it right. You're gonna stay at home. 0:13:45.240 --> 0:13:49.320 So we have you know, so I run a family office, 0:13:50.400 --> 0:13:54.640 market is treacherous, and what we have done is we've 0:13:54.679 --> 0:13:58.640 reduced our portfolio from sixty five stocks to twenty five stocks. 0:13:59.280 --> 0:14:01.360 At the time you were on the street, Raj Paul 0:14:01.800 --> 0:14:03.720 was working on the street as well as investment banker, 0:14:03.760 --> 0:14:06.240 and he tells me that the Galleon model was that 0:14:06.400 --> 0:14:09.719 you picked a small number of stocks around rich you 0:14:09.800 --> 0:14:12.839 had high conviction, and you would just trade around them. Um. 0:14:13.320 --> 0:14:16.920 Is that still the model in your family office? And uh, 0:14:17.440 --> 0:14:20.000 you know, how have you been doing in the first 0:14:20.040 --> 0:14:24.160 half because it was difficult for everyone else. Yeah, So 0:14:25.000 --> 0:14:29.560 we focus on companies that disrupt the way we live. Um, 0:14:29.920 --> 0:14:37.440 so companies in cybersecurity, clout computing, m e commerce, electric vehicles. 0:14:37.480 --> 0:14:39.960 The point is these are high beta stocks. They move 0:14:40.040 --> 0:14:43.359 a lot. So if you're able to trade the volatility 0:14:43.720 --> 0:14:49.040 pretty well, you can make extra returns rather than you know, 0:14:49.160 --> 0:14:51.560 by a stock at ten and make five dollars. If 0:14:51.600 --> 0:14:54.520 it goes to fifteen, if you're able to trade around 0:14:54.560 --> 0:14:58.080 the volatility, you could probably make seven dollars eight dollars. 0:14:58.160 --> 0:15:04.800 So that's a model. We have ten analysts each sectors specialists, 0:15:05.800 --> 0:15:09.400 and we've changed our strategy in the last six months 0:15:09.880 --> 0:15:12.520 in the sense that the entire portfolio is focused on 0:15:12.680 --> 0:15:18.880 companies that generate cash, profitable and grow in excess of 0:15:21.240 --> 0:15:25.640 so that leads us to sectors were long like cybersecurity, 0:15:25.680 --> 0:15:29.440 where we have tail winds almost every day. The bad 0:15:29.480 --> 0:15:36.480 guys are hacking companies for ransomware, cloud computing, the digital 0:15:36.560 --> 0:15:41.240 transformation of enterprises, and electric vehicles. But how how have 0:15:41.400 --> 0:15:45.000 you done? Because you know the first half UM retail 0:15:45.200 --> 0:15:49.200 investors got Clauber, the sixty forty portfolio, which clearly isn't 0:15:49.240 --> 0:15:52.600 your model, UM got smashed, and all the big hedge 0:15:52.680 --> 0:15:57.200 fund you know, you're former colleagues from you know, the 0:15:57.280 --> 0:16:00.120 Tiger Globals of the world got destroyed as well. Oh, 0:16:00.160 --> 0:16:05.479 how did you do you want a single number? Seven 0:16:05.560 --> 0:16:15.520 point down? So Roger, So you know you think about 0:16:15.600 --> 0:16:19.000 these markets here, I mean, you know there's been so 0:16:19.120 --> 0:16:21.560 much volatility here, what do you make of some of 0:16:21.720 --> 0:16:25.600 like these crazy tradings that we've seen in meme stocks 0:16:25.640 --> 0:16:27.520 for example, or I guess more to the point, in 0:16:27.600 --> 0:16:30.920 crypto crypto. How do you think about this whole crypto space. 0:16:31.000 --> 0:16:35.320 That's something new for you since you were running galleon. Yeah, 0:16:35.440 --> 0:16:38.480 I mean, you know, I don't know how you value 0:16:38.520 --> 0:16:40.960 a bit, right, it's what somebody else is going to 0:16:41.080 --> 0:16:45.200 pay for it. Um. What we've learned in the last 0:16:45.360 --> 0:16:48.560 couple of months, it's a huge leverage that's been taking place. 0:16:49.400 --> 0:16:53.280 Now whenever somebody promises you an eight percent returned to 0:16:53.840 --> 0:16:57.280 for you to lend your bitcoin to them, you know 0:16:57.440 --> 0:17:03.840 that's not regather right. So there's too much money running 0:17:03.880 --> 0:17:08.560 around because of the fuddle reserve, you know, in an 0:17:08.600 --> 0:17:15.000 accommodative phase. Um. And you've seen you know, when I 0:17:15.160 --> 0:17:18.560 was managing money, the retail investor was not a big 0:17:19.040 --> 0:17:23.480 not a big factor. Today they account for about of 0:17:23.680 --> 0:17:30.440 the trading volume, and computer algorithmic based trading account for 0:17:30.560 --> 0:17:34.960 about So you have this money running around the casino 0:17:35.640 --> 0:17:39.280 not really understanding the risks. And because we've been in 0:17:39.320 --> 0:17:42.719 a bull market, you know, everybody was parting like crazy. 0:17:43.840 --> 0:17:46.600 Now they have to pay the piper, right, things are 0:17:46.680 --> 0:17:50.119 not as easy as it seemed last year. And this 0:17:50.280 --> 0:17:52.480 is why I tell I, I say to you that 0:17:52.680 --> 0:17:56.720 I've never seen a market this treacherous and this turbulence. 0:17:56.960 --> 0:17:59.600 If I was an investor, I would wait for three months. 0:18:01.160 --> 0:18:04.879 We would by then we wouldn't know what the Fed's 0:18:04.920 --> 0:18:08.119 going to do. The consensus is seventi five basis points. 0:18:08.240 --> 0:18:12.359 Race number two will come through the earning season and 0:18:12.640 --> 0:18:17.000 we will see what management is saying about their business 0:18:17.119 --> 0:18:21.000 and the mac and the environment they operate in. And 0:18:21.400 --> 0:18:25.600 we'll also probably have some charity on how the Russian 0:18:25.720 --> 0:18:31.320 Ukraine war is UH evolved. Me these are mostly things 0:18:31.400 --> 0:18:34.000 that you cannot know right. These are big macro issues. 0:18:34.480 --> 0:18:38.280 But the retail investor, especially the sort of Wall Street 0:18:38.359 --> 0:18:43.040 bets crowd um is confirmed concerned about a narrative that 0:18:43.280 --> 0:18:46.480 you know, the game is fixed, the casino is rigged, 0:18:46.720 --> 0:18:50.840 and you know your case, maybe one your former case, 0:18:50.880 --> 0:18:53.400 maybe one that they site as evidence. Do you think 0:18:53.480 --> 0:18:56.120 that's the case? Um? These days? Are are are big 0:18:56.160 --> 0:18:59.480 hedge fund managers? Do they need an edge, possibly a 0:18:59.600 --> 0:19:05.960 gray area or even illegal edge. Well, you know, it's 0:19:06.320 --> 0:19:09.640 difficult to compare the retail investors to the professional investor 0:19:09.760 --> 0:19:16.520 who spends ten hours a day reading quarterly's, listening to 0:19:16.600 --> 0:19:21.399 conference calls, ten case meeting with management. And in the 0:19:21.480 --> 0:19:25.320 good old days, if you wanted to invest in the market, 0:19:25.359 --> 0:19:28.119 you would give it to Fidelity or Morgan Stanley or 0:19:28.200 --> 0:19:33.000 Dray first professional money managers to manage. What has happened 0:19:33.040 --> 0:19:37.600 more recently some of these approprictions that allowed retail investors 0:19:37.720 --> 0:19:41.680 to buy partial chess so you can buy one share 0:19:41.720 --> 0:19:47.360 of Amazon. And while retail parties participation is good for everybody, 0:19:48.800 --> 0:19:54.280 I think you need to do your homework. Yeah, absolutely, 0:19:54.320 --> 0:19:57.200 I mean it needs Volato markets, no question about it. Roger. 0:19:57.200 --> 0:19:59.720 I just want to thank you for your time. Appreciate 0:19:59.840 --> 0:20:03.440 you taken the time. Roger Roger Rottenham former He is 0:20:03.520 --> 0:20:06.120 the former managing general partner and co founder of Galleon 0:20:06.200 --> 0:20:11.080 Management Group, a hedge fund, also author of Uneven Justice. 0:20:11.320 --> 0:20:14.280 Appreciate getting his perspective because Matt back again, back in 0:20:14.359 --> 0:20:16.880 the day, the nineties to two thousand's, he was as 0:20:16.960 --> 0:20:18.960 big as they come in terms of the hedge fund 0:20:19.200 --> 0:20:21.560 business on the Wall Street. Absolutely, so it will be 0:20:21.640 --> 0:20:25.399 interesting to see how um his book has received. Uneven 0:20:25.520 --> 0:20:28.280 Justice is the name of the book and he takes uh. 0:20:28.400 --> 0:20:32.440 He has a real problem with um uh, with prosecution 0:20:32.600 --> 0:20:36.560 and prosecutors and and and the advantages he thinks they enjoy, 0:20:36.880 --> 0:20:39.880 and and the tactics that they use. It will also 0:20:39.960 --> 0:20:43.399 be interesting to see how his advice to investors plays out. 0:20:43.440 --> 0:20:46.080 He says, wait, wait for wait for earnings, and wait 0:20:46.119 --> 0:20:51.199 for this federal reserve. Let's keep it moving. Matt Winkler, 0:20:51.320 --> 0:20:53.840 editor in Chief emeritus from Bloomberg News. He's the founder 0:20:53.880 --> 0:20:56.280 of Bloomberg News. For for goodness sake, he's in our 0:20:56.320 --> 0:20:59.359 Bloomberg Interactor Broker Studio. Matt, thanks so much for joining us. 0:20:59.359 --> 0:21:02.000 Forgot some stuff talk about one of my favorite cities, Boston. 0:21:02.040 --> 0:21:04.080 But first I want to just get your thoughts on 0:21:04.359 --> 0:21:06.440 our discussion the mat and I just had with Roger. 0:21:06.960 --> 0:21:10.680 Roger Rottenham, former managing general partner co found of Galleon Management, 0:21:10.760 --> 0:21:15.440 a unbelievable story that I know Bloomberg News covered extensively 0:21:16.000 --> 0:21:19.720 back in the day and we were television and over 0:21:19.840 --> 0:21:22.760 it when he got us to covering the trial extensively. 0:21:22.960 --> 0:21:24.399 What are your thoughts? And Kenny, I know you were 0:21:24.400 --> 0:21:29.000 listening to our conversation, so we're all concerned about what 0:21:29.200 --> 0:21:33.840 comes next. And I think relevant to the discussion you 0:21:33.960 --> 0:21:39.800 just had is that if you read carefully recent Supreme 0:21:39.840 --> 0:21:44.280 Court decisions, both the Dodd decision which related to abortion, 0:21:44.520 --> 0:21:50.800 and UH the decision that essentially UH negates much of 0:21:50.920 --> 0:21:54.000 what the e p A under the Biden administration has 0:21:54.040 --> 0:21:56.600 set out to do to deal with climate change. That's 0:21:56.640 --> 0:22:01.960 about a much bigger issue, which is against regulation per se, 0:22:02.440 --> 0:22:05.760 and that includes, by the way, securities regulation. If you 0:22:05.840 --> 0:22:09.600 look at the say, the six justices on the Supreme 0:22:09.680 --> 0:22:13.840 Court who were in agreement, UM, where they're going at 0:22:13.880 --> 0:22:18.960 this point is to you know, eviscerate government regulation, maybe 0:22:19.040 --> 0:22:22.040 take us back before the New Deal. Really, and we 0:22:22.119 --> 0:22:25.520 all know what happened before the New Deal. There was 0:22:25.560 --> 0:22:31.639 the Great Depression and crash before that, and out of 0:22:31.760 --> 0:22:36.440 that came UH securities regulation. Really for the first time, 0:22:36.560 --> 0:22:40.280 the sec was born, if you like, out of the 0:22:40.440 --> 0:22:44.040 ashes of the stock market crash and the Great Depression. 0:22:44.119 --> 0:22:49.719 So UH, there is clearly an ideological bent um at 0:22:49.800 --> 0:22:53.280 this point, and it's coming from the court. There's a 0:22:53.359 --> 0:22:57.000 couple of an I code that all type on the Bloomberg. 0:22:57.040 --> 0:22:58.600 I always look at an I l are and I 0:22:58.680 --> 0:23:01.919 look at an I authors uh now and I Gilbert had. 0:23:02.280 --> 0:23:04.160 I've looked at it ever since Mark taught me about 0:23:04.160 --> 0:23:07.000 the bond market. And I Winkler, of course is uh 0:23:07.640 --> 0:23:11.119 my mainstay. As Matt hired me. Um, you've got a 0:23:11.200 --> 0:23:17.200 piece on uh, not only on your on the opinion side, 0:23:17.240 --> 0:23:21.399 but on your your columns. Here about Michelle wou the 0:23:21.440 --> 0:23:23.560 new mayor of Boston and how she's going to change 0:23:23.600 --> 0:23:27.200 it with the help of a big boost of stimulus. 0:23:27.240 --> 0:23:30.639 Tell us about it. Well, she's, as we say, a 0:23:30.720 --> 0:23:33.280 mayor of many first because she's the first woman and 0:23:33.359 --> 0:23:38.040 first person of color elected as mayor uh Boston, and 0:23:38.119 --> 0:23:42.440 that was in November, and she inherited about three and 0:23:42.480 --> 0:23:45.640 fifty million dollars in one time federal funds that came 0:23:45.680 --> 0:23:50.280 out of COVID nineteen relief money. And she immediately set 0:23:50.320 --> 0:23:53.760 about using that money. Uh. She puts it to make 0:23:53.920 --> 0:24:00.360 Boston the greenest city in America. But what really is, um, 0:24:01.040 --> 0:24:04.680 if you like, the secret sauce of Boston is, and 0:24:04.800 --> 0:24:08.640 maybe not so secret anymore, is that it's exceptional really 0:24:08.680 --> 0:24:12.399 in the world as a center for biotechnology. And we 0:24:12.480 --> 0:24:16.080 can say that at Bloomberg because we have data that 0:24:16.200 --> 0:24:19.320 shows that there's no city in the world. There's no 0:24:19.480 --> 0:24:21.480 country in the world, there's no state in the United 0:24:21.520 --> 0:24:25.960 States where you have the convergence of biotechnology and three 0:24:26.000 --> 0:24:30.240 companies in particular what you've heard of. Of course, Maderna 0:24:30.520 --> 0:24:33.679 and Biogen are probably the best well known, but there 0:24:33.680 --> 0:24:38.040 are actually many UM companies that you haven't heard of. 0:24:38.480 --> 0:24:42.199 And uh, this is really about the twenty one century. 0:24:42.280 --> 0:24:46.400 And this is where Boston benefits more probably than any 0:24:46.440 --> 0:24:49.040 other city. Do they have a corruption problem because I 0:24:49.440 --> 0:24:52.600 obviously think about M I T and Harvard and Vertex 0:24:52.680 --> 0:24:55.679 and Maldierna, and but I also think about the Big 0:24:55.760 --> 0:24:59.040 Dig when I think about Boston. Well, it's not so 0:24:59.119 --> 0:25:03.520 much that the Big Dig was UH corruption. It was 0:25:04.680 --> 0:25:07.760 a very long term government project. Having said that, if 0:25:07.800 --> 0:25:10.919 you ask anyone in Boston today how they feel about 0:25:11.480 --> 0:25:14.280 what was achieved by the Big Dig, the answer I 0:25:14.400 --> 0:25:17.800 think is unanimous, which is Boston is a beautiful city 0:25:17.920 --> 0:25:21.520 because of the Big Dig. It's a cleaner, more vibrant, UH, 0:25:21.840 --> 0:25:24.359 more connected city than it ever was. And so the 0:25:24.440 --> 0:25:28.360 Big Dig was in fact a far sided UH decision 0:25:28.680 --> 0:25:32.520