WEBVTT - BNY Mellon Pershing Insite Day Two 0:00:01.800 --> 0:00:04.400 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanibek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.360 pm Eastern Time on Bloomberg Radio or watch us on YouTube. 0:00:28.400 --> 0:00:32.040 Search to Bloomberg Clobal News. So we are alive from 0:00:32.080 --> 0:00:35.080 Gaylord Texan Convention Center in Dallas, Texas at the b 0:00:35.200 --> 0:00:37.960 n Y Mal and Persing Inside Conference. Two thousand members 0:00:38.000 --> 0:00:41.680 of the financial advice community gathered here for learning Inspiration Network, 0:00:42.000 --> 0:00:44.520 and we're gonna say the financial professionals here, Tim really 0:00:44.560 --> 0:00:46.879 running the gamut. Yeah, everyone's here. Carol, you hosted a 0:00:46.880 --> 0:00:49.000 panel this morning on Krypto. You talked with Matt Walsh 0:00:49.000 --> 0:00:52.199 of Castlaw Adventures, Matt Hogan at bit Wise Asset Management. 0:00:52.640 --> 0:00:54.520 Everyone we do indeed, and we want to bring in 0:00:54.520 --> 0:00:56.600 our next guest because he says that now is the 0:00:56.600 --> 0:00:58.880 perfect time to invest in so called vice related e 0:00:58.920 --> 0:01:00.840 t f s. He says, matter what's happening with the 0:01:00.920 --> 0:01:03.400 economy of the stock market. Ye, people are going to drink, smoke, 0:01:03.440 --> 0:01:06.800 gamble and these days use cannabis products and psychedelic so 0:01:06.800 --> 0:01:08.800 to get to say, looking at the market environment, but 0:01:08.880 --> 0:01:10.280 all of us feel like we could all just do 0:01:10.319 --> 0:01:11.880 a little bit of that. One of them picked right 0:01:12.000 --> 0:01:14.880 wherever it's legal or profect. Maybe. Dan Aaron's is portfolio 0:01:14.959 --> 0:01:18.679 manager at the actively managees have investment management firm Advisor Shares. 0:01:18.840 --> 0:01:20.160 He's on site with us at the B and Y 0:01:20.200 --> 0:01:22.480 Melon Pershing Insight Conference. Dan, good to have you with us. 0:01:22.480 --> 0:01:25.200 How are you? I'm good, Thanks for having me on. 0:01:25.360 --> 0:01:28.040 But I wish it was under better circumstances. The market 0:01:28.120 --> 0:01:30.760 is ugly out there. Well when does it get not ugly? 0:01:30.880 --> 0:01:36.480 When do things turn around? I don't know. Question what 0:01:36.560 --> 0:01:39.040 do you make of the ugliness? Because it does feel 0:01:39.120 --> 0:01:41.920 like it's somewhat orderly. We understand why it's happening, but 0:01:42.080 --> 0:01:45.679 yet it's it's pretty painful. It is painful or trying 0:01:45.720 --> 0:01:49.520 to be. The market seemed to like Powell's announcement for 0:01:49.560 --> 0:01:53.040 a few minutes yesterday. That was very short lived, but 0:01:53.120 --> 0:01:55.720 I think it he gave the market what it expected 0:01:55.800 --> 0:01:58.800 at least. But to say the least, there's a lot 0:01:58.880 --> 0:02:03.080 of uncertainty out there still. Um, we're not seeing a 0:02:03.160 --> 0:02:07.440 massive crash, but we see these continued draw downs. Can 0:02:07.440 --> 0:02:11.960 I get predictions on when that ends? No, but it 0:02:12.040 --> 0:02:16.200 seems to be somewhat orderly, not total chaos. I think 0:02:16.200 --> 0:02:20.640 we're seeing some risk off trades, so that means certain 0:02:20.680 --> 0:02:24.160 assets that people hold that might be in the riskier categories, 0:02:24.280 --> 0:02:29.760 they might get sold off regardless of bingo. But I 0:02:29.880 --> 0:02:33.040 like to think, as I said, maybe not just vice investments, 0:02:33.040 --> 0:02:37.480 but thematic investments could be possibly the right place for 0:02:37.520 --> 0:02:40.960 people to invest because face it, over the last decade 0:02:41.000 --> 0:02:44.800 two decades, people have been two spoiled by just sticking 0:02:44.800 --> 0:02:48.240 money in Spy or q q Q, and those things 0:02:48.240 --> 0:02:52.240 were really really heavily weighted towards the thing stocks that 0:02:52.360 --> 0:02:56.480 were admittedly outperforming. But you've got to look at Netflix 0:02:56.520 --> 0:03:01.280 and get an update on that. So other asset classes, 0:03:01.320 --> 0:03:06.679 other areas are going to come back outperform, maybe be 0:03:06.919 --> 0:03:11.680 less painful. And that's why I think BIS investments or 0:03:11.720 --> 0:03:15.400 even we have an e t F that's in hotels restaurants. Well, 0:03:15.440 --> 0:03:17.359 let's talk about vice first before we get to hotels 0:03:17.360 --> 0:03:20.640 and restaurants. The advisor shares pure Us Cannabis ETF ticker 0:03:20.760 --> 0:03:22.839 m s o S. It's on your shirt right there, 0:03:22.919 --> 0:03:25.840 dan Uh. It's at a fifty two week low today, 0:03:26.080 --> 0:03:29.680 fading at eleven right now, down from last year. More 0:03:29.680 --> 0:03:33.320 than what weed stocks have just been getting feed up. 0:03:33.600 --> 0:03:36.120 When when does that pain end? I'd like to know 0:03:36.200 --> 0:03:40.680 that myself. It's been a very long, painful draw. No, 0:03:41.120 --> 0:03:44.400 it is not. Now. What happened is when Biden first 0:03:44.400 --> 0:03:50.240 got elected and then he said certain statements publicly about marijuana, 0:03:50.680 --> 0:03:55.360 and then we had the runoffs in Georgia, cannabis stocks skyrocketed. 0:03:56.000 --> 0:04:00.120 People somewhat foolishly assumed that legalization of some for was 0:04:00.200 --> 0:04:03.320 right around the corner. Well, politics don't work that way. 0:04:03.640 --> 0:04:11.280 It's been a slow, painful politicians playing politician games ever since. 0:04:11.800 --> 0:04:13.880 And I don't. I've never said there's gonna be a 0:04:13.880 --> 0:04:16.040 full legalization. You're not gonna be able to walk into 0:04:16.040 --> 0:04:21.040 Walmart and buy marijuana. Never, You don't. Never. Interesting because 0:04:21.120 --> 0:04:23.760 a lot of people do think that mass market. Yeah, 0:04:23.880 --> 0:04:26.840 we're totally more mass market. Um, I think it's going 0:04:26.880 --> 0:04:31.280 to be piecemeal. What what I'm planning on seeing in 0:04:31.320 --> 0:04:34.680 this calendar year actually is something called a Safe Banking Act. 0:04:35.320 --> 0:04:38.480 So it's outrageous right now that it's this multi billion 0:04:38.520 --> 0:04:43.640 dollar industry of cannabis. These dispensaries are forced to worry 0:04:43.680 --> 0:04:48.840 about armed robbery on a daily outside of them for 0:04:48.880 --> 0:04:51.279 that reason. So I want the dispensaries to be able 0:04:51.320 --> 0:04:55.360 to bank. But another piece is if we have safe banking, 0:04:55.839 --> 0:05:00.040 then these US plant touching cannabis companies. Again, the I 0:05:00.040 --> 0:05:03.520 guess companies in the world by market cap, well, they 0:05:03.839 --> 0:05:07.640 can't do business with most of the major banks for custody, 0:05:07.680 --> 0:05:10.960 for trading. I'm talking about their stocks now. So if 0:05:10.960 --> 0:05:14.320 we get safe banking, most people feel it will directly 0:05:14.400 --> 0:05:16.960 lead to a m L and finn sends in similar 0:05:17.080 --> 0:05:20.800 rules being rewritten for cannabis. It'll force it, actually, and 0:05:20.880 --> 0:05:22.839 then mask hack and n Y s C will be 0:05:22.880 --> 0:05:25.920 comfortable listing these stocks. But can I say, you know, 0:05:26.000 --> 0:05:27.720 Dani or unfortuately, I wish we had a lot more 0:05:27.720 --> 0:05:30.560 time with you. But we've been here before where there's 0:05:30.600 --> 0:05:33.240 momentum and we think the regulatory environment is going to 0:05:33.520 --> 0:05:35.200 it's all going to happen, and then it doesn't. And 0:05:35.320 --> 0:05:36.680 right now, when I look at all the things that 0:05:36.720 --> 0:05:41.000 are facing regulators and lawmakers, I don't know where the 0:05:41.040 --> 0:05:43.320 sacks app So how patient do we have to be 0:05:44.400 --> 0:05:49.279 as patients? Quickly growing area. It's going to be volatile 0:05:49.279 --> 0:05:51.599 as heck, And we've seen this and we've seen this before, 0:05:51.880 --> 0:05:56.160 ups and downs and candidly when Canada first legalized, right 0:05:56.400 --> 0:06:01.279 but then again, these things skyrocketed when Biden first got elected. 0:06:01.680 --> 0:06:04.839 Um Democrats got you know, the runoffs in the Senate. 0:06:05.640 --> 0:06:09.320 But the stars seemed to be aligning right now for 0:06:09.440 --> 0:06:12.800 people of different opinions coming together thinking we're gonna have 0:06:12.880 --> 0:06:15.640 something and at least the safe banking area, not wide 0:06:15.680 --> 0:06:20.000 sweeping legalization, but having safe banking would be the first 0:06:20.120 --> 0:06:23.760 domino to fall and things would follow. And the do J, 0:06:24.600 --> 0:06:29.480 the d o J just spoke yesterday making changes. All right, 0:06:29.560 --> 0:06:31.160 you gotta come back on her air because we would 0:06:31.160 --> 0:06:34.000 love to continue. Dan Aarons, he's managing director, portfolio manager 0:06:34.040 --> 0:06:38.200 and Advisors Shares Investments. You're listening to Bloomberg Business Week 0:06:38.440 --> 0:06:42.320 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:06:42.560 --> 0:06:47.000 Bloomberg Radio. We're live from the Galor Texan Convention Center, Dallas, Texas, 0:06:47.040 --> 0:06:49.560 where at B and Y Melon Pershing inside conference. Two 0:06:49.640 --> 0:06:54.279 thousand members of the financial advice community gathered here for learning, inspiration, networking. 0:06:54.440 --> 0:06:57.480 So many smart conversations going on. And our next guest 0:06:57.560 --> 0:07:00.200 here on site with us, as Ainslie Simmons. She's doesn't 0:07:00.200 --> 0:07:02.520 have Persing X. It's a new unit, a startup at 0:07:02.560 --> 0:07:05.880 the company, ultimately building out a platform of digital solutions 0:07:05.960 --> 0:07:08.440 for Pershing's wealth solutions clients. I cannot wait to talk 0:07:08.480 --> 0:07:12.800 with it. How are you fantastic? So tell us about 0:07:12.840 --> 0:07:15.320 what you're doing. Yeah, So Pershing Access, as you said, 0:07:15.360 --> 0:07:17.760 a fintech within the Bank of New York Melon, and 0:07:17.800 --> 0:07:20.440 we're building what's called an advisory platform, which is all 0:07:20.480 --> 0:07:23.800 the tools and advisor needs to provide a client advice about, 0:07:24.280 --> 0:07:27.600 you know, their financial plan, their portfolio, taxes, you know, 0:07:27.720 --> 0:07:31.280 anything that really will help and end investor make good decisions. 0:07:31.400 --> 0:07:34.680 What specifically were you hearing from investors, from your customers, 0:07:34.800 --> 0:07:38.360 specifically from your customers that made you say we need 0:07:38.440 --> 0:07:40.760 to develop this thing internally, we need to build it. 0:07:40.760 --> 0:07:42.600 And what feedback did they give you about how to 0:07:42.680 --> 0:07:46.160 design it. Yeah, So the really interesting statistic in the 0:07:46.240 --> 0:07:50.560 market is advisors spent other time with clients and seventy 0:07:50.800 --> 0:07:53.920 behind the computer pushing buttons. It sounds like doctors no, 0:07:54.080 --> 0:07:57.000 and that's insane, right, And it is today's day and age. 0:07:57.120 --> 0:08:00.800 Why do financial advisors have to be think so much 0:08:00.920 --> 0:08:04.400 time tether to their desk? And so our clients were like, 0:08:04.480 --> 0:08:06.560 do you have a way to help make us more efficient? 0:08:06.800 --> 0:08:09.360 And the truth of the matter is there is no 0:08:09.520 --> 0:08:12.440 way today. So we decided to set up this division 0:08:12.480 --> 0:08:15.160 and build this product with our clients guiding us by 0:08:15.240 --> 0:08:17.360 the way and helping us prioritize what you come for 0:08:17.480 --> 0:08:20.880 some core five with the sole purpose of saving them 0:08:21.000 --> 0:08:23.120 time so they can help more people. You know what 0:08:23.240 --> 0:08:25.480 that means, they'll grow their business. So let's top of 0:08:25.560 --> 0:08:27.240 mind in terms of how you prioritize what you need 0:08:27.280 --> 0:08:30.200 to have on this platinum resolutely. So the platform itself 0:08:30.720 --> 0:08:33.400 is going to be innovation, right. Never before have you 0:08:33.480 --> 0:08:36.800 been able to connect this application to that application to 0:08:36.880 --> 0:08:39.319 that application, kind of think like g suite, you know 0:08:39.520 --> 0:08:43.199 Google Sweet right, where each product can be itself. But 0:08:43.360 --> 0:08:45.640 like good things happen if you start to use more 0:08:45.679 --> 0:08:48.960 than one product. So the platform itself is our first priority. 0:08:49.120 --> 0:08:52.360 It's really complicated, it's really hard, but that's where we're starting, 0:08:52.720 --> 0:08:55.800 and then we'll put applications on it that advisors need. 0:08:55.840 --> 0:08:57.319 They're not all going to be there to start, and 0:08:57.360 --> 0:08:59.280 we've been really clear about that. How are you thinking 0:08:59.280 --> 0:09:01.520 about this from a hard work perspective? It's a cloud 0:09:01.520 --> 0:09:05.080 based so does that mean that equally people are able 0:09:05.120 --> 0:09:07.959 to access it equally? And you know, to the fullest extent, 0:09:08.240 --> 0:09:10.920 whether they're on a PC, whether they're on a Mac. Yea, 0:09:11.840 --> 0:09:14.760 most advisors are a pcn tablet, right, they don't go 0:09:14.960 --> 0:09:17.240 they're not usually working with clients on a phone. Right. 0:09:17.320 --> 0:09:20.240 So as long as we're doing what's called responsive design, 0:09:20.320 --> 0:09:22.080 it will be able to fit to any device type. 0:09:22.080 --> 0:09:24.840 We should be fine. I think really importantly, it has 0:09:24.880 --> 0:09:27.400 to be secure. It has to be safe. So that's 0:09:27.440 --> 0:09:30.120 where the Bank New York Melon comes in. Right, go ahead. 0:09:30.200 --> 0:09:34.840 What about working from home yet? Because this is going 0:09:34.880 --> 0:09:36.559 to be web based, you can do it from anywhere. 0:09:36.760 --> 0:09:40.040 It's it's that I said before you sat down. I 0:09:40.360 --> 0:09:42.440 we loved reading about your background. You worked in beer, 0:09:42.559 --> 0:09:46.240 you worked it's soup, Carol soup and then fintech right right, 0:09:46.240 --> 0:09:47.959 and do you have your own startup? So how do 0:09:48.040 --> 0:09:50.760 you think about though, like the end consumer right what 0:09:51.000 --> 0:09:53.000 they need? And I can't tell you. People I talked 0:09:53.000 --> 0:09:55.599 to like love technology. That mana drives me crazy. It 0:09:55.800 --> 0:09:59.160 complicates things about it. And if you think about your money, 0:09:59.240 --> 0:10:02.559 you're probably lo it into your bank somewhere. Advisors what site? 0:10:02.720 --> 0:10:04.920 You know, maybe you're are here four O, one case 0:10:05.000 --> 0:10:07.280 somewhere else. And one thing we're really trying to do 0:10:07.400 --> 0:10:10.480 with this effort is and create one end investor site 0:10:10.520 --> 0:10:13.719 that our clients could offer. And you know that was 0:10:13.800 --> 0:10:16.800 really interesting. In our second advisory board meeting, they said, 0:10:16.840 --> 0:10:18.960 this thing's got to have an end investor site because 0:10:19.000 --> 0:10:21.960 what we have today sucks. So and they were they 0:10:22.080 --> 0:10:24.280 literally said that. So I was like, all right, if 0:10:24.320 --> 0:10:26.120 that's what you want, that's what you get. So we're 0:10:26.120 --> 0:10:28.760 going to build that, Okay, go ahead, Well how long? 0:10:28.920 --> 0:10:31.640 How quickly? Yeah, So we're targeting to sort of have 0:10:31.720 --> 0:10:34.400 a sorry, yeah it's okay, I mean a million questions, 0:10:34.520 --> 0:10:37.000 I get it. Fast is the way of the world, right, So, 0:10:37.160 --> 0:10:38.800 but this is a very hard built So we're going 0:10:38.840 --> 0:10:41.280 to put a private data out towards the end of 0:10:41.360 --> 0:10:43.720 year early next year, get some people on it giving 0:10:43.840 --> 0:10:47.280 us feedback. Then we'll start adding apps and and releasing 0:10:47.760 --> 0:10:50.319 after that. So that's what we're like laser focused on. 0:10:50.960 --> 0:10:52.640 I've been dying to ask you because you're in the 0:10:52.679 --> 0:10:55.000 fintech space, and fintech is so hot right now, especially 0:10:55.840 --> 0:10:58.800 getting so much investment from venture capitalists. When you look 0:10:58.840 --> 0:11:01.480 out across the landscape right now, what what is promising 0:11:01.559 --> 0:11:03.439 fintech that you see? Because I always think back to 0:11:03.520 --> 0:11:05.400 what somebody said to me, you know, the most innovative 0:11:05.400 --> 0:11:08.559 fintech we've seen is the A T M. Yeah, that's 0:11:08.600 --> 0:11:12.400 probably true. Um. You know, I think what's really happening 0:11:12.440 --> 0:11:15.920 in payments right now is going to sort of speed 0:11:16.000 --> 0:11:17.920 money and and that's cool. And you know we heard 0:11:18.000 --> 0:11:21.280 this morning a ton about crypto and digital assets and 0:11:21.480 --> 0:11:24.320 and that's also cool. Um. You know, I personally think 0:11:24.440 --> 0:11:27.160 that a lot of uh, there will be a lot 0:11:27.200 --> 0:11:31.120 of consolidation. They can't keep going making these microw fintech apps. 0:11:31.160 --> 0:11:34.559 We're gonna have to start building building bigger experiences. And 0:11:34.640 --> 0:11:36.520 I actually think perging X is sort of at the 0:11:36.559 --> 0:11:39.680 cutting edge of that, because we can't just keep making 0:11:39.760 --> 0:11:42.280 things smaller and smaller and expecting consumers to log into 0:11:42.320 --> 0:11:44.800 all these places, right, it doesn't make sense. It's like, okay, 0:11:44.880 --> 0:11:47.120 maybe not apples to apples, but I think about streaming now, 0:11:47.200 --> 0:11:49.160 like it's all become just multiple apps and it's just 0:11:49.640 --> 0:11:51.600 too much stuff all over. Yeah, it's too much stuff. 0:11:51.640 --> 0:11:53.439 And you're starting to see the innovation. I turned my 0:11:53.520 --> 0:11:55.679 TV on the other day and I'd start they're starting 0:11:55.720 --> 0:11:58.839 to aggregate all of that into these more enterprise like 0:11:59.000 --> 0:12:02.720 collective use and that's exactly what we're trying to do here. 0:12:02.880 --> 0:12:04.280 We can't wait to see where you go with this. 0:12:04.480 --> 0:12:06.319 We're going to rocket. We will be checking in with you, 0:12:06.400 --> 0:12:09.319 and thank you so much. Ainslee Simmons here, President of 0:12:09.400 --> 0:12:15.160 Persing X. This is Bloomberg Business Week with Carol Masser 0:12:15.360 --> 0:12:19.880 and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio and 0:12:19.960 --> 0:12:23.120 this week's cover story it's in the remark section. It 0:12:23.280 --> 0:12:26.440 is all about inflation. It's not moderated, it has not peaked, 0:12:26.520 --> 0:12:29.080 and that's why the Fed yesterday took that historic step 0:12:29.160 --> 0:12:32.040 of raising interest rates by walking seventy five bases point 0:12:32.400 --> 0:12:36.040 Tim the biggest time since n Bloomberg Business Week Assistant 0:12:36.040 --> 0:12:38.160 Managing editor Jim Ellis writes all about it in the 0:12:38.240 --> 0:12:40.600 Remarks section of Business Week. This week. He joins us 0:12:40.640 --> 0:12:45.160 along with Joel Webber, the editor of Bloomberg business Week. Joel, 0:12:45.760 --> 0:12:48.240 not that surprising, but I'm kind of surprised that you can, 0:12:48.400 --> 0:12:52.959 you know, uh, win a you can you can actually 0:12:53.000 --> 0:12:56.199 win a nailbell for this. Um. People dislike inflation. I 0:12:56.240 --> 0:12:59.000 should note that Robert Schiller, who has won a Nobel, 0:12:59.320 --> 0:13:03.360 wrote that paper back in people dislike inflation so much. 0:13:03.480 --> 0:13:06.920 Oh man, it just up ends everything that you think, uh, 0:13:07.400 --> 0:13:10.319 you know about the world makes sense, right, And I 0:13:10.400 --> 0:13:13.679 think um as a as a colleague of mine has 0:13:13.760 --> 0:13:16.560 likened it to it's like termites suddenly descending on your 0:13:16.600 --> 0:13:20.320 house and just eating away at at you know, your 0:13:20.360 --> 0:13:23.320 sense of wealth. And that has a very it makes 0:13:23.360 --> 0:13:27.120 you go to some dark places really quick. Uh. And 0:13:27.520 --> 0:13:30.240 that is because of the nature of the last year 0:13:30.400 --> 0:13:33.679 and the spike that we've seen in inflation. UM has 0:13:33.720 --> 0:13:36.320 been something that Americans who have not had a sense 0:13:36.400 --> 0:13:40.280 of of what inflation means is suddenly it is gripping 0:13:41.120 --> 0:13:45.400 the country and it is leading to all kinds of anxieties, 0:13:45.760 --> 0:13:50.400 and that's reverberting across markets. And everything else, and so, uh, 0:13:50.600 --> 0:13:53.800 you know, I turned to Jim Ellis early in the 0:13:53.840 --> 0:13:59.040 cycle and said, you know, Jim, you're uh elder statesman 0:13:59.080 --> 0:14:01.839 on the staff, you live through the seventies and eighties. 0:14:01.920 --> 0:14:03.880 At Business Week, you've written We've asked you to write 0:14:03.920 --> 0:14:06.360 about this stuff before. Can you kind of give us 0:14:06.360 --> 0:14:08.160 a toe hold in it? And then you know, between 0:14:08.160 --> 0:14:10.439 the Fed and the markets and everything this week, it 0:14:10.640 --> 0:14:13.480 really to me what Jim ended up writing was really 0:14:13.559 --> 0:14:16.520 this sense of, uh what it all means? Right? And 0:14:17.080 --> 0:14:20.760 and uh so, Jim, I'm just curious, like I'll take 0:14:20.840 --> 0:14:23.360 Tim's question on children and kind of bring that back 0:14:23.400 --> 0:14:27.040 to you. Why why is inflation such a like almost 0:14:27.120 --> 0:14:30.840 like a cancer for sanity? I guess it it's core. 0:14:31.080 --> 0:14:34.680 It's because it's one of those things that people hey 0:14:34.840 --> 0:14:37.560 don't truly understand, certainly don't understand in the way that 0:14:37.640 --> 0:14:42.600 economists do and um, but don't really have a clear 0:14:43.440 --> 0:14:46.000 definition for what it is. But they sort of know 0:14:46.360 --> 0:14:48.800 when it's there, they sort and they're afraid of it. 0:14:48.880 --> 0:14:50.880 And I think they're most afraid of it because it's 0:14:50.920 --> 0:14:52.760 one of those things that can affect the quality of 0:14:52.880 --> 0:14:55.960 their life. Um. At the same time, they have very 0:14:56.000 --> 0:14:59.760 little control over and because of that, people are terrified 0:15:00.040 --> 0:15:02.600 of it. And um, you know obviously, um, you know, 0:15:03.440 --> 0:15:05.800 an economist might tell you, well, there can be some 0:15:05.880 --> 0:15:08.520 good things about inflation. Inflation starts moving um, you know, 0:15:08.800 --> 0:15:11.840 if prices are if wages start moving up, then you know, 0:15:12.320 --> 0:15:15.280 particularly for people who are either outside the labor force 0:15:15.400 --> 0:15:17.080 or people at the bottom of labor force, maybe that's 0:15:17.080 --> 0:15:20.640 a good thing. But you won't find anyone, as Stiller 0:15:20.720 --> 0:15:22.800 in his research to Ride, you know, they didn't find 0:15:22.880 --> 0:15:25.920 a single soul of the hundreds of people they interviewed 0:15:25.960 --> 0:15:28.640 who actually thought that inflation was a good thing. I mean, instead, 0:15:28.720 --> 0:15:31.160 we're sort of hardwired into thinking that things that we 0:15:31.360 --> 0:15:35.400 don't understand and that we can't control our bad things 0:15:35.480 --> 0:15:39.040 to be avoided, particularly when they um. The only way 0:15:39.080 --> 0:15:42.760 they can help you would be if you could guarantee 0:15:42.880 --> 0:15:45.440 that wages were your wages are going to actually go 0:15:45.600 --> 0:15:47.960 up and continue to go up faster than prices. And 0:15:48.080 --> 0:15:51.600 most people are not willing to gamble that their employer 0:15:51.680 --> 0:15:55.840 is going to do that. Jim, I wanted to go 0:15:55.960 --> 0:15:58.120 back to something that Joel said, you know, he said 0:15:58.160 --> 0:15:59.840 that you were at you were writing about the st 0:16:00.200 --> 0:16:03.440 in the nineteen seventies. You're at Business Week, and you 0:16:03.520 --> 0:16:05.880 wrote about this in the Fall, inflation in the fall, 0:16:05.960 --> 0:16:09.200 and you made some parallels to what you experienced in 0:16:09.240 --> 0:16:11.640 the nineteen seventies. And I'm wondering now, a few months later, 0:16:11.720 --> 0:16:14.120 as inflation has continued to creep up and move higher, 0:16:14.720 --> 0:16:18.760 if you are starting to fear more then you did 0:16:19.160 --> 0:16:21.080 back in the fall, that we are indeed entering some 0:16:21.200 --> 0:16:23.280 sort of thing that was similar to what you experienced 0:16:23.280 --> 0:16:26.040 in the seventies in a way. I mean, obviously there 0:16:26.040 --> 0:16:29.760 are some rather significant differences between now and the seventies. 0:16:29.800 --> 0:16:32.040 I mean, back then we did have, um, you know, 0:16:32.120 --> 0:16:35.920 we had product shortages that were really important because we 0:16:36.040 --> 0:16:38.800 had energy shortages both in at seventy three in and 0:16:38.840 --> 0:16:41.560 seventy nine where we had you know, gas lines. I 0:16:41.600 --> 0:16:43.880 mean today you can get gas if you can afford 0:16:43.920 --> 0:16:47.280 five dollars six dollars gown, you can get it. And also, um, 0:16:47.440 --> 0:16:52.680 we had significantly higher unemployment rates um back then than 0:16:52.720 --> 0:16:55.320 we have now. And now we have a labor shortage 0:16:55.360 --> 0:16:59.200 still from post pandemic, and so in a lot of ways, 0:16:59.280 --> 0:17:01.840 you know, we're in a better place than we were 0:17:01.920 --> 0:17:05.560 in the seventies. Obviously, but one thing that really rings 0:17:05.600 --> 0:17:09.280 true here, uh, you know, in a similarity to seventies, 0:17:09.720 --> 0:17:13.120 is that there is a feeling that there are other 0:17:13.280 --> 0:17:16.879 things afoot. There are other things beyond just um, the 0:17:17.320 --> 0:17:21.560 continual rise in prices that are making people feel uneasy 0:17:21.760 --> 0:17:25.439 and out of control and with their existence. I mean 0:17:25.560 --> 0:17:29.400 right now, we have everything from um, you know, the pandemic, 0:17:29.520 --> 0:17:32.199 the pandemic that doesn't seem to want to end. UM, 0:17:32.359 --> 0:17:36.320 the idea that you know, we have government system that 0:17:36.760 --> 0:17:39.159 we don't know if we are in control of, if 0:17:39.240 --> 0:17:41.480 we can trust what the president who says that the 0:17:41.800 --> 0:17:44.600 you know, the very basis of democracy, you know, the 0:17:44.720 --> 0:17:47.960 idea of you know, transfer power, that the integrity of 0:17:48.040 --> 0:17:50.879 elections is all put to question. We have, UM, a 0:17:51.000 --> 0:17:54.359 lot of things that are making people feel uneasy and 0:17:54.560 --> 0:17:56.639 so UM. To sort of get a handle on this, 0:17:57.640 --> 0:18:02.119 I talked to a number of sort of researchers, including um, UM, 0:18:02.320 --> 0:18:05.840 you know, economists to think about behavior and UM. They're 0:18:05.880 --> 0:18:08.840 saying that when people are afraid, they tend to be 0:18:09.000 --> 0:18:12.879 afraid of everything, and that being afraid of one thing, 0:18:13.200 --> 0:18:16.880 if you have multiple sources of discomfort, it actually sort 0:18:16.920 --> 0:18:19.199 of makes you feel even worse. And so right now 0:18:19.520 --> 0:18:22.080 it's very real to say we do have rising prices, 0:18:22.320 --> 0:18:25.480 so we do have um inflation. But at the same time, 0:18:25.520 --> 0:18:29.480 people feel uncomfortable about government, they feel uncomfortable about safety 0:18:29.520 --> 0:18:31.560 of you know, with guns and safety of schools, and 0:18:31.840 --> 0:18:33.960 all of a sudden, it means that you're pushed to 0:18:34.040 --> 0:18:36.720 the end where you sort of think everything's going to hell. 0:18:37.920 --> 0:18:41.080 And there's that. So there's that maladies, but then the 0:18:41.160 --> 0:18:43.440 other thing that is sort of echoes off of that 0:18:43.720 --> 0:18:48.080 late seventies early eighties moment. Jim is like the spotlight 0:18:48.119 --> 0:18:51.560 on policymakers. And obviously we had Vulcar back then, and 0:18:51.920 --> 0:18:54.760 and he he took the country to places that we 0:18:54.800 --> 0:18:57.240 haven't gone yet. But I'm I'm curious, you know, in 0:18:57.280 --> 0:18:59.320 the grand scheme of things, we wrap up the story 0:18:59.600 --> 0:19:02.440 yesterday day in the midst of of uh, you know, 0:19:02.520 --> 0:19:05.480 the FED doing what the FED does, uh, and just 0:19:05.600 --> 0:19:07.920 wondering like what what you read on the fete is 0:19:07.960 --> 0:19:10.320 and all of this since um, that's the story of 0:19:10.440 --> 0:19:13.000 the week. Really, I mean the FED is uh, you know, 0:19:13.240 --> 0:19:16.439 they're in the position of being at least if if 0:19:16.480 --> 0:19:19.000 the seventies is any guide, I mean that is um. Um, 0:19:19.119 --> 0:19:23.080 you know, the one body that can bring it into this. 0:19:23.280 --> 0:19:26.760 I mean, you can beat inflation. You know. The problem 0:19:26.920 --> 0:19:29.280 is that to beat inflation, you often have to beat 0:19:29.359 --> 0:19:33.040 down the economy to the point that the people who 0:19:33.440 --> 0:19:36.440 will love you for it, well eventually hate you for it. 0:19:37.000 --> 0:19:40.480 It's simply because um, you know, Paul Volker beat inflation. 0:19:40.800 --> 0:19:42.600 But to do it, he had to get a federal 0:19:42.680 --> 0:19:46.000 funds fate rate. That was what one point. He had 0:19:46.040 --> 0:19:49.240 to take mortgage rates up to, you know, almost twenty 0:19:50.000 --> 0:19:52.879 He had to basically take unemployment up to ten percent. 0:19:53.240 --> 0:19:57.639 He had to basically beat out inflationary expectations at the 0:19:57.640 --> 0:20:02.560 economy simply because everybody sort of completely beaten down. Now, 0:20:02.920 --> 0:20:07.879 that's probably works as a monetary policy, it's very bad 0:20:08.040 --> 0:20:11.159 from a political standpoint, and it's probably going to be 0:20:11.280 --> 0:20:15.680 the reason that, um, the Biden administration very very very 0:20:15.800 --> 0:20:20.200 difficult position for the next year. Well, we all feel 0:20:20.240 --> 0:20:22.480 it here in some of the conversations we're having. Gotta run. 0:20:22.640 --> 0:20:25.080 Thank you so much. Jim ellis, of course, assistant managing 0:20:25.200 --> 0:20:27.440 editor of Business Week, along with Joe Weber, the editor 0:20:27.520 --> 0:20:36.440 of Bloomberg business Week magazine. This is Bloomberg Radio. You're 0:20:36.480 --> 0:20:40.359 listening to Bloomberg Business Week with Carol Masser and Bloomberg 0:20:40.480 --> 0:20:46.040 Quick Takes Tim Stinovic on Bloomberg Radio. We're live at 0:20:46.040 --> 0:20:48.320 the b N Y Mel and Purging Inside conference from 0:20:48.440 --> 0:20:50.960 the Gaylor Texan Convention Center in Dallas, Texas. As we've 0:20:51.000 --> 0:20:53.480 been saying, two thousand members of the financial advice community 0:20:53.480 --> 0:20:56.760 are gathering here for learning, inspiration, networking. And what's interesting 0:20:56.800 --> 0:20:59.159 about coming to this event is you're reminded that in 0:20:59.200 --> 0:21:01.840 the investment advice three space, it's massive firms like a 0:21:01.920 --> 0:21:04.320 black Rock Black Rock, or a longtime player like t 0:21:04.440 --> 0:21:08.159 Rowe Price. It's also smaller independent or standalone r I, 0:21:08.280 --> 0:21:11.479 a registered investment advisors, or like our next guest, it's 0:21:11.520 --> 0:21:13.840 a group of advisors banning together. Yeah, for more, let's 0:21:13.840 --> 0:21:15.840 bring in Jim Dixon. He's the founder, he's board member 0:21:15.880 --> 0:21:19.199 and CEO at Sanctuary Well, it's a partnered independence network 0:21:19.240 --> 0:21:21.879 for investment advisors. He's with us on site at b 0:21:21.960 --> 0:21:25.320 N Y Melon Pershing Inside two. Jim, how are you? 0:21:25.440 --> 0:21:27.280 I'm doing great? How are you guys? We're doing pretty well. 0:21:27.320 --> 0:21:28.600 I mean we're trying to make sense of what's going 0:21:28.600 --> 0:21:30.159