Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Well, last week, I
Speaker 1: guess you know, Thursday, Friday, Saturday down in Miami, there
Speaker 1: was a crypto investor conference and very well attended, well
Speaker 1: covered in the business media. And what's also notable is
Speaker 1: that people actually went. It wasn't virtual, it was a
Speaker 1: real conference where real people got together talking all things crypto.
Speaker 1: I look at bitcoin today, it's pretty much unchanged here,
Speaker 1: just over thirty six thousand dollars per coin, but there's
Speaker 1: certainly been a lot of volatility in the crypto market.
Speaker 1: Let's get the latest with Jeff Dorman. He's the c
Speaker 1: i O of ARCA. Arc is a digital asset from Jeff.
Speaker 1: Thanks so much for joining us here. I love to
Speaker 1: get your thoughts. Just let's start with bitcoin, because that's
Speaker 1: the cryptocurrency or the crypto asset class or asset that
Speaker 1: people are most familiar with talk us about the volatility
Speaker 1: of bitcoin. What does that tell you? Sure? Thanks for
Speaker 1: having me. I mean, like, the volatility is happening because
Speaker 1: this is a new asset class, and new asset classes
Speaker 1: don't have the same structure, they don't have the same players. Uh,
Speaker 1: And it's largely driven by momentum and algorithmic quantitative traders
Speaker 1: to date um. You know, I think that will change
Speaker 1: over time as it becomes of a larger and more
Speaker 1: adopted asset. In fact, you're already seeing it's starting to
Speaker 1: decline a little bit because this is touching so many people.
Speaker 1: But you know, volatility happens when you have a lot
Speaker 1: more retail traders and momentum traders than you do fundamental investors.
Speaker 1: And that's natural for an asset that doesn't really have
Speaker 1: any fundamental underpinning. Are we looking at a little bit
Speaker 1: of stability here around thirty six thousand dollars right now? Sure?
Speaker 1: Things as pretty quickly, Uh, you know, I think I think, Look,
Speaker 1: there's a couple of things that drive bitcoins value, right
Speaker 1: and it's obviously not traditional fundamental valuation technique. That's true
Speaker 1: of other assets and digital assets, but not bitcoin. But
Speaker 1: what we know about bitcoin specifically is there's a couple
Speaker 1: of factors that have driven you have low rates and
Speaker 1: the declining dollar that's still very much in play. Nothing's
Speaker 1: changing there. Therefore, this should still be a pretty strong
Speaker 1: macro asset. You have institutional money entering the space. Nothing's
Speaker 1: changed there. We have, you know, tons of investors coming
Speaker 1: into our funds. Other funds are saying the same thing.
Speaker 1: Money is pouring in everywhere you look into this asset
Speaker 1: class because of what I've said before, low rates and
Speaker 1: a low dollar, right where else are you going to
Speaker 1: go to invest your money? Um? You know, really the
Speaker 1: only thing has changed is recent narratives. You know, if
Speaker 1: you are going to watch bitcoin go up from ten
Speaker 1: thousand to sixty thousand every time Elon Musk tweets positively, well,
Speaker 1: then by definition when him and other corporations pull out,
Speaker 1: that's going to have a negative effect as well. So
Speaker 1: I think the volatility is based on you know, a
Speaker 1: lack of UH conviction around UH the path that it
Speaker 1: takes to get higher. But ultimately bitcoins of binary bet
Speaker 1: it's either going to be worth a lot more if
Speaker 1: this is adopted as a true store of value and currency,
Speaker 1: or it's gonna be worth a lot less if it doesn't.
Speaker 1: And everything in between is there's a lot of fun
Speaker 1: to trade, but not necessarily indicative of the end result. Jeff,
Speaker 1: you say money is pouring into this asset class, where's
Speaker 1: the money coming from? Is a retail Are you seeing
Speaker 1: institutional buy in? Where are you seeing it? Well, institutional buying,
Speaker 1: you know, in the traditional investing world, typically means your
Speaker 1: asset allocators, right, your pensions, your endowments, your sovereign wealth.
Speaker 1: It's not really coming from there yet. I think there's
Speaker 1: a lot of complating the word institutional here in the
Speaker 1: market because all of a sudden hedge funds got involved,
Speaker 1: and all of a sudden corporate treasurers got involved. The
Speaker 1: reality is most of the buying power of bitcoin is
Speaker 1: still family offices, high net worth, you know, not necessarily
Speaker 1: in the hedge fund itself, but generally the owners of
Speaker 1: a hedge fund in their own personal accounts. There is
Speaker 1: definitely real money coming in from the institutional world, but
Speaker 1: it's not the traditional institutional asset allocators yet. What what's
Speaker 1: going to change that? Um? Quite frankly, I'm not sure
Speaker 1: it ever does. Uh. You know, the institutional investors that
Speaker 1: we speak to the pensions and down with sovereign walls, etcetera.
Speaker 1: They're more interested in the rest of the asset class. Uh.
Speaker 1: You know a lot of times I talk about digital
Speaker 1: assets the same way I talk about et s. Right,
Speaker 1: you would never say, hey, I'm an EPF investor. You say, well,
Speaker 1: what kind of ETF investor? Are you invested in healthcare
Speaker 1: stocks or you know, bond EPs, or are you invested
Speaker 1: in gold ets? Right? The e t F itself is
Speaker 1: just a structure, and what's in the structure is what's
Speaker 1: relevant from an investing standpoint, And the same thing is
Speaker 1: happening with digital assets. We have different types of digital assets.
Speaker 1: Some are asset backed, some have revenue pass throughs, some
Speaker 1: are more like technology protocols and platforms, and others are
Speaker 1: cryptocurrency and money like bitcoins. I think the institutional investors
Speaker 1: largely gravitate towards the ones that have real fundamental analysis
Speaker 1: attached to them, which is the asset back tokens and
Speaker 1: the companies with real revenue and cash flows. I get
Speaker 1: asset back tokens, I get um, but bitcoin is the
Speaker 1: only one where the token really has become a store
Speaker 1: of value. Um. You know that's not asset backed. The
Speaker 1: other interesting Uh, crypto plays like Athereum have a great platform,
Speaker 1: but I don't see any reason to buy the token.
Speaker 1: I think that was true historically, and I would have
Speaker 1: agreed with you two years ago. But what's happening now
Speaker 1: is Ethereum is an ecosystem that other applications are building upon.
Speaker 1: Right in some way, thethereum is the app store, and
Speaker 1: all the other tokens are the apps that are built
Speaker 1: in the app store. Uh. You know how does the
Speaker 1: app store make money? It makes money on the transactions
Speaker 1: that are happening inside of that app store. And that's
Speaker 1: basically what ethereum is doing. To date. Uh, the token
Speaker 1: has accrued none of that economic value. But with a
Speaker 1: new proposal that is going into place called e I
Speaker 1: Pine and it's shipped from proof of work to proof mistake,
Speaker 1: there actually are going to be real cash flows that
Speaker 1: eventually a crew back to the token holders. So it
Speaker 1: is changing a little bit. And that's what's so interesting
Speaker 1: about this asset class is, Uh, these tokens can be
Speaker 1: representative of one thing on day one and ultimately morphin
Speaker 1: change throughout the evolution of of the investment um that
Speaker 1: the you know, the theorium itself is still kind of
Speaker 1: difficult for traditional investors to get their hands around because
Speaker 1: it is this like broader GDP ecosystem thing. But the
Speaker 1: applications that are built on top of ethereum are generally
Speaker 1: real companies with real revenues and real cash flows, and
Speaker 1: the tokens can be modeled using a DCF analysis or
Speaker 1: a dividend field model, and that's what we focus on
Speaker 1: an ARCA, and that's what a lot of institutional investors
Speaker 1: are focused on as well. And that includes defy uh,
Speaker 1: some gaming assets and a lot of other ones that
Speaker 1: are that are coming down the pikes in the future
Speaker 1: as well. All right, Jeff, just real quickly thirty seconds,
Speaker 1: what's the next mile post that you're looking for? As
Speaker 1: this market, this asset class continues to develop and evolved. Uh.
Speaker 1: For min milestone is is education um doing more things
Speaker 1: like what you're doing in others where investors can understand
Speaker 1: that cryptocurrency is not the right term. Cryptocurrency is a
Speaker 1: very small subset of the market, but these other assets
Speaker 1: are really more like quasi equity, and ultimately, I think
Speaker 1: digital assets will end up in every company's capital structure
Speaker 1: from you know, Netflix, the Starbucks, see delta over time,
Speaker 1: and once you start to see the companies adopted and
Speaker 1: you see investors understand what these assets really are, you know,
Speaker 1: being great coordination mechanisms and growth mechanisms for companies. I
Speaker 1: think the Narratabile change, and we'll be talking less about
Speaker 1: bitcoin and more about the cash flow producing entities that
Speaker 1: use a digital asset to represent that growth. Alright, very
Speaker 1: interesting stuff, Jeff, thanks very much for talking to us.
Speaker 1: Always a pleasure. Jeff Dorman is the chief investment officer
Speaker 1: ARCA talking to us about how was about to say cryptocurrency,
Speaker 1: digital assets. I think digital digital assets. They're looking at
Speaker 1: one of them. Bitcoin just slipping under thirty six thousand,
Speaker 1: barely thirty five thousand, nine sixty four dollars and ninety
Speaker 1: three cents Ether trading for two thousand, seven hundred seventy eight.
Speaker 1: This is Bloomberg. Now we're bringing Scott Kimball Portia, manager
Speaker 1: of the Strategic Income Fund and co head of US
Speaker 1: fixed Income at BEMO Global Asset Management. Scott, let's talk
Speaker 1: first about what we saw happen on Friday. It was
Speaker 1: pretty interesting with the jobs number. It was a miss,
Speaker 1: but still I guess a pretty good number. More than
Speaker 1: five thousand people got jobs in this economy as we
Speaker 1: as we reopened and we saw treasuries yields just dropped.
Speaker 1: I think it was five six basis points down to seven.
Speaker 1: We're trading there right now. M. Does that make sense
Speaker 1: to you, Yeah, good morning. I think it does for
Speaker 1: a few reasons. I think that's what the jobs report signals.
Speaker 1: First and foremost is that we are transitioning out of
Speaker 1: the you know, the post reopening boom into a uh
Speaker 1: an economic environment where more and more of the US's
Speaker 1: economies own inertia is gonna have to take over, and
Speaker 1: that growth potential and growth output is going to have
Speaker 1: to be really driven by the underlying economic fundamentals uh
Speaker 1: post that that big boom in the recovery, which I
Speaker 1: think is what you saw in the outcome of the
Speaker 1: jobs report. Uh you know, the estimates versus the the
Speaker 1: actual print. That's not a typical. That's pretty common as
Speaker 1: you get, you know, through these these handoff cycles where
Speaker 1: you may not be directly in line with the number,
Speaker 1: but the directional trend still remains pretty favorable. Treasuries, however,
Speaker 1: probably took that as a little bit of a uh
Speaker 1: you know, if you've seen the U seal curb be
Speaker 1: very steep, probably taking off a little bit of the
Speaker 1: steepness to reflect the fact that, you know, things like
Speaker 1: inflation still have some upside risk, but the ability to
Speaker 1: really punch through into a an explosively higher inflationary environment
Speaker 1: is probably being a little bit tempered by this, uh
Speaker 1: you know, this this transition in the economy, if you will.
Speaker 1: That's kind of where I wanted to go, Scott in
Speaker 1: terms of the discussion about inflationary concerns into this market.
Speaker 1: You know, obviously two camps, one being the Federal Reserve
Speaker 1: camp where you know, the signs of inflation that we
Speaker 1: are seeing or transitory, and the others, hey, it might
Speaker 1: be more systemic than that. Where do you fall so
Speaker 1: perfectly down the middle? Because I think the FED has
Speaker 1: a lot of credibility on the inflationary front. They've they've
Speaker 1: been telling us for over a decade that inflationary pressures
Speaker 1: are transitory and they've been correct, and that's a long
Speaker 1: enough streak to be more than random. So I think
Speaker 1: that the FED has the pulse of the inflationary pressures
Speaker 1: pretty well contained, are pretty well, pretty well contained and
Speaker 1: pretty well figured out, except this last couple of rounds
Speaker 1: there has been a little bit of a little bit
Speaker 1: of whack a mole and that everywhere inflation has moved higher,
Speaker 1: it's sort of popped up in different parts of the
Speaker 1: CPI measures. So for instance, the most recent read on
Speaker 1: you know, used autos. You know, that's something that historically
Speaker 1: you look at used autos contribution to inflation, It tends
Speaker 1: to attempts to spike and and dissipate pretty regularly. Uh.
Speaker 1: And you can really explain why in our case, you know,
Speaker 1: with the pandemic we had, you know, auto plants were
Speaker 1: restricted or out put was was curtailed UM, and people
Speaker 1: were being a little more conscious of where they where
Speaker 1: they spent money, so replacement vehicles were driven more towards
Speaker 1: the used market. So naturally we've seen some we saw
Speaker 1: some some booming prices there in in uh in used autos.
Speaker 1: But how sustainable is that going to be? That gets
Speaker 1: back to the Fed's point. Uh. I think our position
Speaker 1: has been that there is a directional case to be
Speaker 1: made for inflation to continue to creve higher UM. But
Speaker 1: it's bumping into some things that I think will constrain it.
Speaker 1: So for instance, oil prices most prominently, Uh, you know,
Speaker 1: we're coming up on seven dollars of barrel as we
Speaker 1: model things out. If we break through that and you
Speaker 1: start getting a barrel, you know, that does certainly put
Speaker 1: upward price pressures, but the ability to pass through those
Speaker 1: pressures starts to roll over and you start to see
Speaker 1: that consumption will adjust downward. So there's indicator indicators like
Speaker 1: that at that point to mechanisms where yes, inflation can
Speaker 1: press higher, but the economic output starts to suffer, which
Speaker 1: then can sort of constrains it from running away. Is it?
Speaker 1: Is it consensus though, that we start to taper at
Speaker 1: the end of this year, um beginning of next year,
Speaker 1: then start to raise rates and twenty two beginning of
Speaker 1: That's definitely the way the futures market has has has
Speaker 1: that's definitely out the I guess the path of the
Speaker 1: output the futures market has been favoring. UM. I think
Speaker 1: it's probably going to be difficult to really address the
Speaker 1: right front. Um. You know, the FED has you know,
Speaker 1: between both tapering and transitioning interest rate policy in both cases,
Speaker 1: between the taper tantrum and whatever occurred when Pal tried
Speaker 1: to raise rates, whatever we want to label that UM.
Speaker 1: In both cases, the market response, in the economic response
Speaker 1: was pretty clear that this version of the U S
Speaker 1: economy is going to be a little more difficult than
Speaker 1: pass cycles to have those meaningful breakthroughs uh in in
Speaker 1: in uh in monetary policy or so it's gonna be
Speaker 1: our our expectation that uh capering is probably going to
Speaker 1: take place. I think that there's definitely efficacy for that
Speaker 1: in the economy. You're through the crisis period. As far
Speaker 1: as transitioning monetary policy to let's say a rising rate environment.
Speaker 1: UM wouldn't be surprised if that tail continues to push
Speaker 1: its way down the road a little bit. Hey, Scott,
Speaker 1: thanks so much for joining us. We really appreciate getting
Speaker 1: your thoughts and perspective on the fixed income market. Scott Kimball,
Speaker 1: portfolio manager of the Strategic Income Fund and co head
Speaker 1: of US fixed Income for Bibo BIMO, a global asset
Speaker 1: of management, getting his thoughts on fixed income market again.
Speaker 1: The ten year Treasury remains down at one point five
Speaker 1: seven percent. All right, the Bloomberg Big Take story today,
Speaker 1: it's just fascinating people are finding those who took part
Speaker 1: in the January six Capital siege via social media and
Speaker 1: are helping federal officers arrest them. We're seeing it all
Speaker 1: through about our social media feeds. David Yaffee Belny did
Speaker 1: some work on this. He's a legal reporter for Bloomberg News. David,
Speaker 1: it seems like, you know, everybody in the social media
Speaker 1: feeds are seeing you know, stories and of of of
Speaker 1: people that have been identified as taking part in the
Speaker 1: Capital siege. How wide spread is that, um? So, you know,
Speaker 1: right after the siege on January six, there was kind
Speaker 1: of a wave of activism from people who just regular
Speaker 1: people watching the footage at home who were outraged at
Speaker 1: what had happened and wanted to do something about it, um,
Speaker 1: find some way to bring the perpetrators to justice. And
Speaker 1: so you had this kind of initial rush to identify
Speaker 1: people who were there that was initially focused on some
Speaker 1: of the kind of most most prominent people in the
Speaker 1: in the photos and videos. Um, you know, the man
Speaker 1: with his feet up on Nancy closy desk, or the
Speaker 1: guy and the kind of animal head dress who's walking
Speaker 1: through the capitol, and and and that you know, there
Speaker 1: were you know, thousands of people all over social media
Speaker 1: sort of participating in that in that effort, and it's
Speaker 1: sort of evolved in an interesting way since then. We're
Speaker 1: now kind of trying to track down, um, sort of
Speaker 1: less well known participants in the riot and pulled and
Speaker 1: sort of the background with some of those photos and
Speaker 1: and and try to really get a comprehensive sense thats
Speaker 1: who was involved. So you got one guy that the
Speaker 1: lead guy. I love his picture. He looks kind of
Speaker 1: like Indiana Jones. Um who's helping to find out who
Speaker 1: these people are? Um. I guess he's a guy who
Speaker 1: doesn't have a job, so he has the ability to
Speaker 1: spend the time to spend forty hours a week on
Speaker 1: the internet looking for for these dudes. Yeah. The way,
Speaker 1: the way he put it to me is that he
Speaker 1: was living at home with his girlfriend and and she
Speaker 1: would log onto her computer to do her actual job,
Speaker 1: and he would log onto his computer and do his
Speaker 1: kind of sedition hunting gig for for a few months.
Speaker 1: You know. Uh, Like so many people, he found it
Speaker 1: difficult to get consistent work during the pandemic. He's an
Speaker 1: actor in Canada, and those sorts of opportunities were drawing up. Um,
Speaker 1: and so yeah, it was really a combination of kind
Speaker 1: of curiosity and pandemic induced boredom that sort of motivated
Speaker 1: him to get involved with this. And he just started
Speaker 1: spending you know, hours and hours a day pouring through
Speaker 1: photos and videos trying to kind of catalog images where
Speaker 1: you can see the same person multiple times, to sort
Speaker 1: of put together like a comprehensive account of all the
Speaker 1: evidence of a particular individuals involvement. And eventually that allowed
Speaker 1: him to identify somebody, um who's who was charged by
Speaker 1: the FBI, UM and and his work was was cited
Speaker 1: in the arrest affidavit, UM, sort of underlying that that charge, David,
Speaker 1: don't we have a bunch of like n Essay blackbriar
Speaker 1: nerds who can do this stuff in their sleep? Um,
Speaker 1: you know, in in theory we do. And And look,
Speaker 1: the federal investigation has made a lot of progress over
Speaker 1: the past few months. Nearly five people have been arrested.
Speaker 1: And that's not all because of the work of these
Speaker 1: sort of online tradition hunters, but there was there was
Speaker 1: just so much footage UM and so many people involved
Speaker 1: in such pressure to move quickly on this um that
Speaker 1: I think the government was appreciative of the of the
Speaker 1: public's help. Um, you know, and I when I talked
Speaker 1: to the FBI about this, you know, they they said,
Speaker 1: you know, in dozens and dozens of cases, these sorts
Speaker 1: of tips have proved helpful, um, and they're asking for
Speaker 1: more help as they, you know, continue to try to
Speaker 1: round up you know, hundreds more people who were involved
Speaker 1: in the riot and haven't been brought to justice so far. So,
Speaker 1: I know, David, the Senate Republicans recently blocked a bill
Speaker 1: in Congress to create an independent September eleven style commissioned
Speaker 1: to investigate the riots. So does that mean we're you know,
Speaker 1: we're basically just relying on uh, the FBI and some
Speaker 1: of these amateurs to kind of bring people to justice
Speaker 1: as it were, UM to it to an extent, yes,
Speaker 1: I mean, you know, the the the investigations presumably going
Speaker 1: to succeed in putting some of these people in prison.
Speaker 1: But there are broader questions about what happened on January six,
Speaker 1: you know, the extent to which far right groups were
Speaker 1: coordinating with each other, um, you know, public figures who
Speaker 1: may have been present or may have helped people behind
Speaker 1: the fiends and what they're role was there. There's these
Speaker 1: sort of broader historical questions that the investigation might not
Speaker 1: ultimately answer, in which you know, people had hoped some
Speaker 1: sort of bipartisan report would explore. And so one of
Speaker 1: the things that's motivating these sedition hunters now is to
Speaker 1: try to kind of ship away at some of those, uh,
Speaker 1: those questions using the sort of open source resources that
Speaker 1: they have to hand, um and really kind of fill
Speaker 1: in where we're sort of Congress is sort of not
Speaker 1: taking action. It's ironic that both groups seem to use discord, right.
Speaker 1: I Mean, you've got the Q and On people on
Speaker 1: there as well as the sedition hunters. Is there a
Speaker 1: risk that, you know, if the FBI keeps on begging
Speaker 1: if you see something, say something, you know, watch your
Speaker 1: neighbor and give us a call, do we risk some
Speaker 1: kind of East German Stazi surveillance state culture. I mean,
Speaker 1: I think that's definitely a concern. I mean, some of
Speaker 1: these amateur fisition hunters are using facial recognition technology to
Speaker 1: try to to try to target people who are at
Speaker 1: the capital on January six, and the fact that that
Speaker 1: sort of technology is freely available to members of the
Speaker 1: public and that you know, anybody with you know, some
Speaker 1: sort of software engineering background can kind of put together
Speaker 1: relatively quickly a kind of facial recognition due to me
Speaker 1: is definitely is definitely troubling. And these all sorts of
Speaker 1: civil liberties concerns or they could make a mistake, David,
Speaker 1: they could get someone innocent in hot water. Yeah. Absolutely,
Speaker 1: and we've i mean, we've seen that in the aftermath
Speaker 1: of January six, that people have been identified, you know,
Speaker 1: and named publicly who weren't actually actually there. Now, to
Speaker 1: their credit, a lot of the groups that are coordinating
Speaker 1: some of the sedition hunting activity are going to great
Speaker 1: lengths to prevent that sort of thing from happening. They're
Speaker 1: urging their followers never to publicly identify somebody by name,
Speaker 1: and always to submit that information to the FBI, which
Speaker 1: can then go and verify those tips, you know, UM
Speaker 1: through its sort of more sophisticated means. And you know,
Speaker 1: you definitely see in some SBI RST after dated Oh
Speaker 1: you know, we've got ten tips about this case, and
Speaker 1: eight of them were wrong, but you know, you're the
Speaker 1: two that turned out to be correct, and that's how
Speaker 1: we arrested this person. UM, so you know, I think
Speaker 1: I think that these groups are conscious of that risk
Speaker 1: and are trying to avoid making mistakes. But of course
Speaker 1: there's no way that you can control just thousands of
Speaker 1: people on the Internet. Really interesting story. I love the
Speaker 1: big take. Um it's such a cool uh new thing
Speaker 1: that we have on the Bloomberg And David, your your
Speaker 1: story is awesome. I love also the layout. It's really
Speaker 1: well done. So thanks very much for joining us on
Speaker 1: this one, David, Daffy Bellini talking to us about the
Speaker 1: amateur Internet sleuths who are trying to take down, um,
Speaker 1: the capital rioters who you know, did things like serious
Speaker 1: bodily damage to a lot of the police. There's just
Speaker 1: trying to defend our nation's capital. This is Bloomberg, all right.
Speaker 1: Apparently I guess Jeff Bezos July is set to launch
Speaker 1: into space on one of those Blue Origin flights. Let's
Speaker 1: get the latest on this deal. Like, I think he's
Speaker 1: not gonna be alone either. Ed Ludlow, he's an auto
Speaker 1: reporter for Bloomberg News, joins us from the Bloomberg nine
Speaker 1: sixties studio, and San Francis a rocket reporter. He's a
Speaker 1: rocket reporter now, is what he is uh ed. So
Speaker 1: Jeff Bezos going into space, This seems like a big
Speaker 1: deal for me. But I guess if you're one of,
Speaker 1: if not the richest person in the world, you can
Speaker 1: do those things. Yeah, it's a pretty small group of
Speaker 1: people that have the ability to do that, right. So
Speaker 1: this is Blue Origins debut passenger. They call them astronauts,
Speaker 1: you know, private astronauts, but their passengers because it's a
Speaker 1: Philly autonomous craft. And he is going to go up
Speaker 1: with his brother Mark Bezos and one lucky I suppose
Speaker 1: auction winner. So right now, the highest bidder for the
Speaker 1: third seat has put two point eight million dollars down.
Speaker 1: That's it, you say, that's it. I mean, you know
Speaker 1: top took him and somebody paid sixty nine million dollars
Speaker 1: for an n f T of a people picture. Yeah,
Speaker 1: I know, but the you know, the risks associated with
Speaker 1: being launched into orbit and budding n f T s.
Speaker 1: I don't think they're on par right, But you know,
Speaker 1: they're going to continue this auction until mid June when
Speaker 1: they'll close it. Highest bidder gets to go up with
Speaker 1: the Bezos bros. Um it's an eleven minute journey, you know,
Speaker 1: you go to the Carmen Line, which is about a
Speaker 1: hundred kilometers above above Earth. You know, it's kind of
Speaker 1: the internationally recognized boundary of space from Earth. And then
Speaker 1: you come straight back down in the capsule. So when
Speaker 1: the capsule separates from the booster, the new Shepherd booster,
Speaker 1: it falls by itself with parachute, you know, very leisurely
Speaker 1: ride is the booster. I mean, are we talking about
Speaker 1: top check here? Is it going to land again on
Speaker 1: some autonomous ship in the ocean or is it ghetto? No,
Speaker 1: it's automous. I think what's interesting about Blue Origin is
Speaker 1: that they you know, they clearly want to get some
Speaker 1: kind of milestone win if you if you go all
Speaker 1: the way back to two thousand and twelve, they were
Speaker 1: the first actually land a booster autonomously, ahead of SpaceX
Speaker 1: by about a month, one calendar month. But the thing is,
Speaker 1: Blue Origin has only done fifteen consecutive test flights of
Speaker 1: its technology by this point over a ten year period.
Speaker 1: SpaceX has done more than a hundred and twenty five
Speaker 1: successful flights. So, you know, Bezos is I don't know
Speaker 1: if it's the right expression, putting his money where his
Speaker 1: mouth is, but he you know, This is a company
Speaker 1: that he has put one billion dollars into on an
Speaker 1: annual basis um. He has spoken very competitively about it
Speaker 1: about how his it's been his childhood dreams go to space,
Speaker 1: and you know he's going to go up him, going
Speaker 1: to put his mouth where his money is exactly the opposite, right,
Speaker 1: What is the risk here? I mean, what are some
Speaker 1: of the experts saying here? It's it seems to me
Speaker 1: fairly risky, maybe more risk than you know you'd you'd
Speaker 1: want to take. Um, what if you had a hundred
Speaker 1: and eighty six point eight at a technical level, And
Speaker 1: again I'm a reporter, I'm not a space engineer. But
Speaker 1: the thing that the difference between the capsule that Blue
Speaker 1: Origin has is that there's no onboard control. Imagine meditation
Speaker 1: room with padding around the outside, six windows and six seats.
Speaker 1: That's it. If you compare that to the Dragon capsule
Speaker 1: the SpaceX um produces. The astronauts in the SpaceX capsule
Speaker 1: have some limited ability to interact with the vessel, run checks,
Speaker 1: run controls, do some manual takeover in worst case scenarios.
Speaker 1: The Blue Origin capsule is truly autonomous. You sit there,
Speaker 1: you belt in and that's it. It's out of your control.
Speaker 1: I guess that's slightly disconcerting. And and the frequency of
Speaker 1: tests and vol lume of tests is much less, far
Speaker 1: fewer than SpaceX is done. But they have had fifteen
Speaker 1: consecutive test flights. They've they've tested successfully. The abort features
Speaker 1: what happens in the event and of emergency. The way
Speaker 1: that it's designed is that not only does the capsule
Speaker 1: carrying the humans separate from the booster, but it gets
Speaker 1: basically a boost to change its trajectory away from the booster.
Speaker 1: There's a hard separation, which means that they you know,
Speaker 1: they wouldn't collide with each other, will come into contact
Speaker 1: and at that point the parachutes would open. But yeah,
Speaker 1: of course it's fraught with risk, you know. And I
Speaker 1: think that less so from Bazos because we hear from
Speaker 1: him less. But Elon Musk, for example, is pretty transparent
Speaker 1: about what those risks are. Musk wants to go to
Speaker 1: Mars too, so he's maybe not far behind Jeff in
Speaker 1: Billionaires in space. Ed, thanks so much for joining us,
Speaker 1: Ed Ludlow there, he's Bloomberg's well rocket reporter, but also
Speaker 1: what covers cars for us out of California. Thanks for
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
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Speaker 1: platform you prefer. I'm Matt Miller, I'm on Twitter at
Speaker 1: Matt Miller three. And I'm Fall Sweeney. I'm on Twitter
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
Speaker 1: us worldwide at Bloomberg Radio