1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,479 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:22,360 Speaker 1: at Bloomberg dot com slash podcast. We have the bond 7 00:00:22,360 --> 00:00:25,480 Speaker 1: markets close to the equity markets are open. That means 8 00:00:25,840 --> 00:00:28,120 Speaker 1: we are here at Bloomberket and that means Kate L. 9 00:00:28,200 --> 00:00:32,160 Speaker 1: Hillo is also their global Chief Investment Officer for Russell Investments, 10 00:00:32,159 --> 00:00:34,080 Speaker 1: and Kate, I want to thanks so much for joining 11 00:00:34,120 --> 00:00:36,879 Speaker 1: us here on this quasi day on day off for 12 00:00:36,920 --> 00:00:39,720 Speaker 1: the markets. I want to get your thoughts about E 13 00:00:40,000 --> 00:00:44,600 Speaker 1: s G investing. That's a part of the investment process 14 00:00:44,640 --> 00:00:47,400 Speaker 1: that's getting a lot more attraction, it seems on a 15 00:00:47,520 --> 00:00:51,640 Speaker 1: yearly basis. How do you guys at Russell incorporate E 16 00:00:51,920 --> 00:00:55,600 Speaker 1: s G into your investing framework? Yeah? Great, thanks for 17 00:00:55,640 --> 00:00:59,880 Speaker 1: having me. It is um an increasing focus of clients 18 00:01:00,280 --> 00:01:03,200 Speaker 1: and just with our approach, which is to customize for 19 00:01:03,320 --> 00:01:06,679 Speaker 1: particular client kind of principles and values which is unique 20 00:01:06,680 --> 00:01:09,640 Speaker 1: to E s G. Amounts of way. Um, we are 21 00:01:09,680 --> 00:01:13,760 Speaker 1: working on both getting in the data and processes set 22 00:01:13,840 --> 00:01:16,399 Speaker 1: up to be able to make some of those new 23 00:01:16,440 --> 00:01:22,360 Speaker 1: investment decisions, but probably more importantly is really developing the 24 00:01:22,400 --> 00:01:26,520 Speaker 1: way that we're accessing the market and really targeting particular 25 00:01:26,680 --> 00:01:31,760 Speaker 1: types of emphasistic clients are looking for. So, just to 26 00:01:31,840 --> 00:01:34,600 Speaker 1: put some of a finer point on that, our platform 27 00:01:34,640 --> 00:01:36,760 Speaker 1: is a bit unique because it's open architecture, so we 28 00:01:36,880 --> 00:01:41,360 Speaker 1: work with a lot of external managers globally, and so 29 00:01:41,520 --> 00:01:45,080 Speaker 1: we have the benefit of really understanding how different investors 30 00:01:45,080 --> 00:01:48,760 Speaker 1: are trying to tackle this investment objective, and some of 31 00:01:48,800 --> 00:01:52,440 Speaker 1: them are integrating it into their investment process, others are 32 00:01:52,520 --> 00:01:54,840 Speaker 1: leaning more in to make sure that all of their 33 00:01:54,880 --> 00:01:59,360 Speaker 1: investments have a direct link to impacting a particular outcome, 34 00:01:59,360 --> 00:02:03,720 Speaker 1: whether that's on the environment, um, your social objectives, or governance. 35 00:02:04,120 --> 00:02:06,920 Speaker 1: And so with that you can really you think through 36 00:02:07,280 --> 00:02:11,639 Speaker 1: the best ways to invest for particular types of objectives 37 00:02:12,000 --> 00:02:13,800 Speaker 1: depending on how much a client might want to dial 38 00:02:13,919 --> 00:02:19,840 Speaker 1: up or down that particular outcome. Our clients leaning into 39 00:02:19,840 --> 00:02:23,480 Speaker 1: E s G in order to provoke change or are 40 00:02:23,480 --> 00:02:27,640 Speaker 1: they hoping that returns will will come. Yeah, it's a 41 00:02:27,639 --> 00:02:30,040 Speaker 1: bit of both. And some are are doing it because 42 00:02:30,080 --> 00:02:35,360 Speaker 1: of regulatory requirements to ensure that their assets are aligning 43 00:02:35,440 --> 00:02:40,040 Speaker 1: with particular requirements, maybe particularly on climate, and we're seeing 44 00:02:40,040 --> 00:02:42,880 Speaker 1: that in certain regions, particularly Europe being more of a focus. 45 00:02:43,639 --> 00:02:46,480 Speaker 1: I think that the direct linkage in the short term 46 00:02:46,600 --> 00:02:49,080 Speaker 1: in terms of financial impact is a bit harder to 47 00:02:49,160 --> 00:02:51,639 Speaker 1: prove out um, you know, just because the data is 48 00:02:51,680 --> 00:02:54,440 Speaker 1: not there and we haven't fully seen you the shift 49 00:02:54,520 --> 00:02:58,120 Speaker 1: of the impact of regulatory and policy changes in spending 50 00:02:58,400 --> 00:03:00,800 Speaker 1: will start to have in your just the environment as 51 00:03:00,840 --> 00:03:03,360 Speaker 1: we look to shift to a more greener energy source. 52 00:03:03,720 --> 00:03:07,720 Speaker 1: And so I believe that most clients are realistic in 53 00:03:07,960 --> 00:03:10,720 Speaker 1: your understanding that there's, you know, this dual mandates that 54 00:03:10,760 --> 00:03:14,200 Speaker 1: exist between your financial outcomes and then the E s 55 00:03:14,280 --> 00:03:16,839 Speaker 1: G objectives they're trying to meet and trying to get 56 00:03:16,840 --> 00:03:20,320 Speaker 1: that balance right, and so making sure that you're being 57 00:03:20,320 --> 00:03:22,640 Speaker 1: thoughtful about how much risks or allocating to some of 58 00:03:22,639 --> 00:03:25,640 Speaker 1: these strategies relative to be able to achieve your overall 59 00:03:25,680 --> 00:03:28,320 Speaker 1: goals is still a balance that I think everyone's trying 60 00:03:28,320 --> 00:03:31,400 Speaker 1: to get right. But it's a bit of both. Give 61 00:03:31,480 --> 00:03:34,560 Speaker 1: us a sense of just returns. If I'm going to 62 00:03:34,639 --> 00:03:37,920 Speaker 1: really embrace E s G investing, Do I make any 63 00:03:38,240 --> 00:03:41,520 Speaker 1: investment return? You know, give give ups? I mean, is 64 00:03:41,520 --> 00:03:43,760 Speaker 1: it is it a either or or? How are the 65 00:03:43,800 --> 00:03:47,080 Speaker 1: return has been for E s G investors generally? Yeah, Well, 66 00:03:47,120 --> 00:03:49,280 Speaker 1: if you look at just the past five years, and 67 00:03:49,360 --> 00:03:53,040 Speaker 1: this is partially driven by how some sectors have done. 68 00:03:53,280 --> 00:03:57,080 Speaker 1: E s G strategies have done well. Um, where energy 69 00:03:57,200 --> 00:03:59,880 Speaker 1: just use that as an example, has been more challenged. 70 00:04:00,320 --> 00:04:02,160 Speaker 1: You know, it's interesting as you head into this period 71 00:04:02,200 --> 00:04:05,240 Speaker 1: and we think about some of the energy challenges that 72 00:04:05,280 --> 00:04:08,240 Speaker 1: we're going through right now, like what that will mean 73 00:04:08,360 --> 00:04:12,160 Speaker 1: for particular companies where demands um, you know, which was 74 00:04:12,200 --> 00:04:14,320 Speaker 1: tailing off in capital ocation, it was tailing off for 75 00:04:14,400 --> 00:04:17,280 Speaker 1: some of the fossil fuel companies, and and might say 76 00:04:17,320 --> 00:04:20,240 Speaker 1: the old economy you know, start to maybe get a 77 00:04:20,279 --> 00:04:23,080 Speaker 1: little bit more focused. But you know, and to sit 78 00:04:23,160 --> 00:04:25,840 Speaker 1: to put a number on you know, the drag, it's 79 00:04:25,880 --> 00:04:27,719 Speaker 1: it's really difficult to do. So we try to do 80 00:04:27,760 --> 00:04:30,360 Speaker 1: it more in risk space, where we think about kind 81 00:04:30,360 --> 00:04:33,840 Speaker 1: of how much risk you're taking by either excluding certain 82 00:04:33,880 --> 00:04:37,600 Speaker 1: parts of the market or leaning into them. Um. Because 83 00:04:37,760 --> 00:04:39,680 Speaker 1: maybe a way to put it to is that a 84 00:04:39,720 --> 00:04:42,440 Speaker 1: lot of the E s G oriented sectors tend to 85 00:04:42,480 --> 00:04:45,279 Speaker 1: be more value oriented companies, at least as they're defined 86 00:04:45,400 --> 00:04:47,640 Speaker 1: right now, and so you can end up designing your 87 00:04:47,640 --> 00:04:50,560 Speaker 1: portfolio that the s G focused that might be quite 88 00:04:50,640 --> 00:04:53,360 Speaker 1: underweight certain sectors, and so you can start to put 89 00:04:53,440 --> 00:04:56,200 Speaker 1: numbers around that, and there's reason to compensate for it. 90 00:04:56,600 --> 00:04:58,280 Speaker 1: But I'd say that the way right now that we're 91 00:04:58,320 --> 00:05:00,599 Speaker 1: trying to deal with it's more through your awful risk 92 00:05:00,640 --> 00:05:03,320 Speaker 1: allocation risk budgeting, just to make sure that that um, 93 00:05:03,440 --> 00:05:06,599 Speaker 1: that risk doesn't get too high in the portfolio relative 94 00:05:06,680 --> 00:05:09,760 Speaker 1: to let's just say a market cap waited approach. What 95 00:05:09,800 --> 00:05:13,800 Speaker 1: do you see as the biggest winner among the three letters? 96 00:05:13,839 --> 00:05:19,039 Speaker 1: I mean most people probably think of the environment first 97 00:05:19,279 --> 00:05:22,640 Speaker 1: when talking e. S G investment, you know, green investments, 98 00:05:22,680 --> 00:05:29,000 Speaker 1: battery manufacturers, electric cars, et cetera. But um, there's also 99 00:05:29,080 --> 00:05:33,200 Speaker 1: the social end um well, the social issue I guess 100 00:05:33,200 --> 00:05:35,839 Speaker 1: we talk about more as well. But the governmental issue 101 00:05:35,839 --> 00:05:39,920 Speaker 1: we never talk about, right well, I would say governance, 102 00:05:40,040 --> 00:05:43,760 Speaker 1: which is what the G sorry governance right for Yeah, 103 00:05:43,839 --> 00:05:47,360 Speaker 1: it is about like some good corporate governance and boards 104 00:05:47,360 --> 00:05:50,400 Speaker 1: and how they're interracting and you know, whether it's compensation 105 00:05:50,440 --> 00:05:54,760 Speaker 1: related items or relates to your labor laws and things 106 00:05:54,800 --> 00:05:58,039 Speaker 1: like that, and so that always has been quite integrated 107 00:05:58,160 --> 00:06:01,760 Speaker 1: into you know, equity, your research and and how people 108 00:06:01,760 --> 00:06:04,320 Speaker 1: are kind of valuing kind of different companies. And so 109 00:06:04,400 --> 00:06:06,480 Speaker 1: maybe that is why, because there's probably more data around 110 00:06:06,480 --> 00:06:10,120 Speaker 1: that UM and more kind of processed around that. There's 111 00:06:10,160 --> 00:06:14,920 Speaker 1: like dual dual share holder classes. People don't like that, right, 112 00:06:15,000 --> 00:06:18,640 Speaker 1: chairman and CEO being one and the same. That's not okay, 113 00:06:18,680 --> 00:06:20,120 Speaker 1: is it? I mean, are these are things that we're 114 00:06:20,120 --> 00:06:23,680 Speaker 1: talking about? Oh for sure. Yeah. And that's where engaging 115 00:06:23,680 --> 00:06:26,400 Speaker 1: through proxy voting, for example, is a great way to 116 00:06:26,440 --> 00:06:29,000 Speaker 1: influence that. And you know you would have seen it 117 00:06:29,000 --> 00:06:31,960 Speaker 1: with some of the oil company Dexon in particular, you know, 118 00:06:32,040 --> 00:06:34,480 Speaker 1: where you have a very small kind of investor actually 119 00:06:34,520 --> 00:06:37,640 Speaker 1: changed the board composition. Uh, And so that that often 120 00:06:37,680 --> 00:06:39,839 Speaker 1: gets handled through proxy voting. And there's a pretty well 121 00:06:39,960 --> 00:06:43,240 Speaker 1: established and growing investment process or try to tackle that. 122 00:06:43,720 --> 00:06:46,359 Speaker 1: The E and S part are a bit newer, and 123 00:06:46,400 --> 00:06:49,279 Speaker 1: that's where define more work that needs to be done. 124 00:06:49,800 --> 00:06:52,679 Speaker 1: All right, Kate, Thanks very much, Kate L. Hillo talking 125 00:06:52,680 --> 00:06:56,280 Speaker 1: to us about E S G investing. This is Bloomberg. 126 00:07:00,160 --> 00:07:03,000 Speaker 1: Let's get back to UM the economy. I think Greg 127 00:07:03,040 --> 00:07:05,919 Speaker 1: was also talking about the payroll disappointment on Friday. I 128 00:07:06,000 --> 00:07:08,640 Speaker 1: was shocked to see this happen again. Marcus Schomer joins us. 129 00:07:08,640 --> 00:07:13,640 Speaker 1: He's chief economists at pine Bridge Investments out of New York. Marcus, 130 00:07:13,680 --> 00:07:18,160 Speaker 1: we have seen yet another disappointment on jobs. We've seen 131 00:07:18,200 --> 00:07:21,880 Speaker 1: Goldman Sacks cutting, albeit only by a little bit, their 132 00:07:22,040 --> 00:07:27,480 Speaker 1: growth expectations, and we've seen central banks, at least some 133 00:07:27,600 --> 00:07:30,520 Speaker 1: central bankers start to freak out a little bit. Maybe 134 00:07:30,520 --> 00:07:33,360 Speaker 1: freak out is too strong a term about inflation. But 135 00:07:33,680 --> 00:07:39,760 Speaker 1: are you worried at all about stagflation here? Well, not really. 136 00:07:39,800 --> 00:07:43,480 Speaker 1: I think that's taken it too far, too fast, right. 137 00:07:43,560 --> 00:07:46,600 Speaker 1: I mean, we obviously have an inflation problem, but you know, 138 00:07:46,720 --> 00:07:51,320 Speaker 1: stack inflation would be an economy where growth is slowing, 139 00:07:51,600 --> 00:07:54,800 Speaker 1: you know, almost towards zero. That is stackflation, And I 140 00:07:54,800 --> 00:07:57,600 Speaker 1: don't think that's the economy we're in. And it's it's 141 00:07:57,640 --> 00:08:00,360 Speaker 1: usually also describes an economy as a demand the problem 142 00:08:00,400 --> 00:08:03,000 Speaker 1: that to supply problem. It's very different and a very 143 00:08:03,000 --> 00:08:05,920 Speaker 1: different environment when growth slows because of supply issues. When 144 00:08:05,920 --> 00:08:08,240 Speaker 1: everybody's standing there with that wallets wanting to spend but 145 00:08:08,360 --> 00:08:11,280 Speaker 1: can't spend, that's a very different start of economy as 146 00:08:11,280 --> 00:08:13,240 Speaker 1: opposed to one. You know, the last time we talked 147 00:08:13,240 --> 00:08:17,119 Speaker 1: about stack flation the previous business cycle, when basically people 148 00:08:17,120 --> 00:08:19,280 Speaker 1: didn't want to open their wallets, and you mean we 149 00:08:19,360 --> 00:08:21,840 Speaker 1: needed more demand stimulus. That's not really the world we're 150 00:08:21,840 --> 00:08:24,160 Speaker 1: living in right now. So I think stack flation is 151 00:08:24,160 --> 00:08:29,120 Speaker 1: is an overblown, overused term. Right now, I don't use it. So, Marcus, 152 00:08:29,840 --> 00:08:33,240 Speaker 1: how do you feel about the economic outlook here? I mean, 153 00:08:33,280 --> 00:08:35,920 Speaker 1: again as you know, as we're talking about it, you 154 00:08:35,920 --> 00:08:38,040 Speaker 1: know on Friday obviously the jobs report. I mean, you 155 00:08:38,200 --> 00:08:40,280 Speaker 1: have to get a stronger job market to get this 156 00:08:40,360 --> 00:08:43,760 Speaker 1: economy presumably to get some legs to it in terms 157 00:08:43,800 --> 00:08:46,800 Speaker 1: of recovery. We have the delta variant. Uh, some mixed 158 00:08:46,800 --> 00:08:49,559 Speaker 1: messages on the pandemic. From a global perspective, we've got 159 00:08:49,600 --> 00:08:52,040 Speaker 1: supply chain issues. How do you put that all in 160 00:08:52,320 --> 00:08:55,000 Speaker 1: the pot into your model if you will, and kind 161 00:08:55,000 --> 00:08:59,080 Speaker 1: of come out with a concise economic outlook. Oh, it's 162 00:08:59,120 --> 00:09:02,240 Speaker 1: it's it's very complicated because there's so many things going 163 00:09:02,240 --> 00:09:06,079 Speaker 1: on that we typically as economists, so as forecasters, don't 164 00:09:06,120 --> 00:09:09,720 Speaker 1: really use in our models. Right. Uh, there's stuff going 165 00:09:09,760 --> 00:09:12,400 Speaker 1: on that sort of exaginous to the way we typically 166 00:09:12,600 --> 00:09:15,319 Speaker 1: look at the economy or an economic outlook. So it's 167 00:09:15,320 --> 00:09:19,880 Speaker 1: really really complicated, but so very broadly, you know, we're 168 00:09:19,960 --> 00:09:24,080 Speaker 1: still in a world where we're coming down from the 169 00:09:24,120 --> 00:09:27,079 Speaker 1: peak recovery pace right where we're rolling. We rolled over 170 00:09:27,120 --> 00:09:30,199 Speaker 1: in the summer. Everything is now basically slowing down. But 171 00:09:30,240 --> 00:09:33,080 Speaker 1: I think that's slow down will take a while into 172 00:09:33,200 --> 00:09:37,720 Speaker 1: two before we get to a point where the question 173 00:09:37,760 --> 00:09:41,479 Speaker 1: becomes obvious slowing towards of the long term growth potential 174 00:09:42,000 --> 00:09:46,240 Speaker 1: or obvious slowing below. And I get it. Markets look 175 00:09:46,280 --> 00:09:50,120 Speaker 1: at changes and made of changes. I get it. Slowdown 176 00:09:50,240 --> 00:09:52,280 Speaker 1: is always a bad word, but if you're slowing down 177 00:09:52,320 --> 00:09:55,079 Speaker 1: from six to five, that to me is a different world. 178 00:09:55,080 --> 00:09:58,400 Speaker 1: And slowing down, let say, from tow to one. As 179 00:09:58,400 --> 00:10:02,840 Speaker 1: long as economic growth broadly is still above long term averages, 180 00:10:02,920 --> 00:10:05,560 Speaker 1: that's still the world in which I'll put gaps close 181 00:10:05,640 --> 00:10:09,120 Speaker 1: on employment rates fall. And that's a good environment for 182 00:10:09,120 --> 00:10:12,120 Speaker 1: for for any kind of asset class in the market 183 00:10:12,120 --> 00:10:15,280 Speaker 1: that's exposed to growth, as opposed to a world that 184 00:10:15,360 --> 00:10:18,160 Speaker 1: we slowed below these long term averages. And I don't 185 00:10:18,200 --> 00:10:21,000 Speaker 1: think that's where we're in right now or where we're 186 00:10:21,040 --> 00:10:23,440 Speaker 1: heading in the next six months. That's something that we're 187 00:10:23,480 --> 00:10:27,280 Speaker 1: going to talk about maybe during the course of next year. 188 00:10:27,320 --> 00:10:30,160 Speaker 1: That's three issue. But I don't think that's something that's 189 00:10:30,200 --> 00:10:33,360 Speaker 1: plaguing the economy right now, noting the fact that the 190 00:10:33,480 --> 00:10:37,160 Speaker 1: numbers could be volatile quarter by quarter, but the trend 191 00:10:37,400 --> 00:10:42,079 Speaker 1: is not that that week yet. Well, we've had um 192 00:10:42,160 --> 00:10:48,120 Speaker 1: a drop in consumer expectation indexes from the Conference Board 193 00:10:48,200 --> 00:10:52,199 Speaker 1: and from the University of Michigan UM. And we had 194 00:10:52,320 --> 00:10:56,679 Speaker 1: a report out from Danny Blanche Flower of Dartmouth and 195 00:10:56,800 --> 00:11:01,280 Speaker 1: Alex Bryson of the University College of London saying, you know, 196 00:11:01,360 --> 00:11:05,640 Speaker 1: they think we're in entering a recession now. Downward movements 197 00:11:05,960 --> 00:11:08,520 Speaker 1: this is a direct quote. Downward movements and consumer expectations 198 00:11:08,520 --> 00:11:10,839 Speaker 1: the last six months suggest the economy in the US 199 00:11:11,040 --> 00:11:16,040 Speaker 1: is entering recession now. It's an outlier opinion, I think. 200 00:11:16,080 --> 00:11:18,480 Speaker 1: But we're gonna talk to Danny next. What would you 201 00:11:18,520 --> 00:11:22,320 Speaker 1: how would you counter that argument? I always love the 202 00:11:22,320 --> 00:11:24,160 Speaker 1: people who want to be out there first going for 203 00:11:24,200 --> 00:11:26,680 Speaker 1: a recession. I mean, we barely a year of the 204 00:11:26,760 --> 00:11:29,040 Speaker 1: last one and the first people are really calling for 205 00:11:29,080 --> 00:11:31,800 Speaker 1: a recession. Brilliant. But because those are the people who 206 00:11:31,800 --> 00:11:35,080 Speaker 1: get the headlines right is classics though no, we're not 207 00:11:35,120 --> 00:11:38,360 Speaker 1: in a recession. I mean a recessions of recession is 208 00:11:38,400 --> 00:11:42,000 Speaker 1: a very different kind of environment from an economy that 209 00:11:42,160 --> 00:11:46,559 Speaker 1: could conceivably see a negative quote over quote of growth 210 00:11:46,559 --> 00:11:49,120 Speaker 1: with if you suddenly have, for example, of sharp decline 211 00:11:49,160 --> 00:11:53,120 Speaker 1: in inventories, a sharp upward turn, a sharp declan in 212 00:11:53,320 --> 00:11:56,320 Speaker 1: the contribution from trade because we can't get anything out 213 00:11:56,360 --> 00:11:59,360 Speaker 1: of our ports, or exports may collapse and that may 214 00:11:59,400 --> 00:12:02,360 Speaker 1: be negative for GDP growth. We could have a world 215 00:12:02,400 --> 00:12:05,599 Speaker 1: where we have a negative h one negative quarter of 216 00:12:05,679 --> 00:12:08,560 Speaker 1: consumer spending, but you know, savings rates are so high, 217 00:12:08,720 --> 00:12:10,800 Speaker 1: people are sitting on a lot of money that want 218 00:12:10,840 --> 00:12:14,040 Speaker 1: to spend, that cannot spend because of supply constraints. That's 219 00:12:14,080 --> 00:12:17,720 Speaker 1: not a recession. So I think it's ridiculous for anybody 220 00:12:17,800 --> 00:12:19,840 Speaker 1: to talk to start to talk about this right now. 221 00:12:19,920 --> 00:12:24,199 Speaker 1: A supplied a supplied chain, the supply constraint, the climate. 222 00:12:24,280 --> 00:12:27,400 Speaker 1: GDP is a very very different animal than a demand 223 00:12:27,520 --> 00:12:30,760 Speaker 1: constrained economy that goes with negative growth. Very different stuff, 224 00:12:30,960 --> 00:12:33,520 Speaker 1: very different animal, very different all right, Marcus, thank you 225 00:12:33,600 --> 00:12:36,040 Speaker 1: so much for joining us. Marcus Showmer, chief economists for 226 00:12:36,120 --> 00:12:41,120 Speaker 1: Prime Bridge Investments, based in New York City. Room now, 227 00:12:41,240 --> 00:12:44,599 Speaker 1: let's talk about what's going on in these markets and 228 00:12:44,640 --> 00:12:47,200 Speaker 1: what we can expect. With Ted Oakley's managing partner at 229 00:12:47,240 --> 00:12:52,160 Speaker 1: Oxbow Advisors. Um, it's interesting. Ted. On the one hand, 230 00:12:52,400 --> 00:12:57,480 Speaker 1: I'm reading the words stagflation more and more. On the 231 00:12:57,559 --> 00:13:01,600 Speaker 1: other hand, our buddy Neil data over Renaissance Macro says 232 00:13:02,360 --> 00:13:05,240 Speaker 1: the home building sector is on fire. Um, you know, 233 00:13:05,960 --> 00:13:10,360 Speaker 1: gasoline is is up, consumer discretionary is rising, transports are gaining. 234 00:13:10,800 --> 00:13:14,000 Speaker 1: He says, this isn't stagflation, this is an inflationary boom. 235 00:13:14,440 --> 00:13:18,960 Speaker 1: What's happening. Well, I'm not certain what they're looking at 236 00:13:19,040 --> 00:13:20,839 Speaker 1: on that because if you look at a lot of 237 00:13:21,000 --> 00:13:24,640 Speaker 1: the a lot of what I would consider that group. 238 00:13:24,720 --> 00:13:26,360 Speaker 1: You know, if you look just I'm taking from the 239 00:13:26,480 --> 00:13:29,160 Speaker 1: highs now, but if you look at home delders or 240 00:13:29,440 --> 00:13:33,040 Speaker 1: since this is since February, they're down about you know, 241 00:13:33,120 --> 00:13:36,160 Speaker 1: consumer duo rolls are down about twelve, machineries down about 242 00:13:36,160 --> 00:13:39,199 Speaker 1: ten percent, a lot of that stuff rolling over. Now. 243 00:13:39,320 --> 00:13:42,800 Speaker 1: I know, it still feels like it's really strong and 244 00:13:43,240 --> 00:13:45,600 Speaker 1: in it. In it it is relative to maybe two 245 00:13:45,679 --> 00:13:48,079 Speaker 1: years ago, but on a on a just rate of 246 00:13:48,200 --> 00:13:52,440 Speaker 1: change basis, it's not as strong as it was. Ted 247 00:13:52,640 --> 00:13:55,480 Speaker 1: we gotta you know, our folks down in Washington, d C. 248 00:13:55,800 --> 00:13:58,400 Speaker 1: Lots on their plate right now in terms of debt ceiling, 249 00:13:59,160 --> 00:14:03,400 Speaker 1: fiscal stimulus, US, you know, spending bills, tax law changes. 250 00:14:03,920 --> 00:14:06,760 Speaker 1: How do you kind of incorporated all of that Washington 251 00:14:07,000 --> 00:14:12,439 Speaker 1: stuff into your outlook? Well? What what what we're looking Chris? 252 00:14:12,559 --> 00:14:15,520 Speaker 1: Nobody knows. And I think the problem people have today 253 00:14:15,640 --> 00:14:17,560 Speaker 1: is they've they've got all these things that come out 254 00:14:17,600 --> 00:14:20,240 Speaker 1: and say, hey, capital gains are gonna be X, and 255 00:14:20,240 --> 00:14:23,160 Speaker 1: they're going to go back to September and no, maybe 256 00:14:23,200 --> 00:14:26,440 Speaker 1: they'll go to October. People are really really confused about 257 00:14:26,960 --> 00:14:29,240 Speaker 1: that side. I think the biggest problem with all of 258 00:14:29,320 --> 00:14:33,040 Speaker 1: that is it affects private business, and private business has 259 00:14:33,120 --> 00:14:35,520 Speaker 1: to look at everything that's going to come through that 260 00:14:36,120 --> 00:14:39,320 Speaker 1: not only the taxes they'll have to pay on ordinary income, 261 00:14:39,360 --> 00:14:41,600 Speaker 1: but what's going to happen on capital gains, and a 262 00:14:41,680 --> 00:14:43,840 Speaker 1: lot of companies will probably elect not to sell. They 263 00:14:43,920 --> 00:14:47,080 Speaker 1: might have sold the companies and reinvested or done something different. 264 00:14:47,800 --> 00:14:49,960 Speaker 1: I think that's the problem you have, and I really 265 00:14:50,000 --> 00:14:55,440 Speaker 1: do believe that, Uh, they probably have more of a 266 00:14:55,560 --> 00:14:59,440 Speaker 1: consensus on the pro business side than they realize they do, 267 00:14:59,560 --> 00:15:02,600 Speaker 1: but they're a very very small group of people, uh 268 00:15:02,880 --> 00:15:05,520 Speaker 1: control what's going on there, and I think that's really 269 00:15:05,560 --> 00:15:08,920 Speaker 1: causing people a lot of heartburn right now. So you 270 00:15:09,000 --> 00:15:12,520 Speaker 1: put those two things together in a sense, market sentiment 271 00:15:12,680 --> 00:15:17,040 Speaker 1: rolling over and what I hear you're saying is, um, 272 00:15:17,200 --> 00:15:20,240 Speaker 1: you know, Washington doing the wrong thing for markets. How 273 00:15:20,320 --> 00:15:23,240 Speaker 1: does the rest of the year, how does two look 274 00:15:23,240 --> 00:15:26,480 Speaker 1: to you? Well, I would say that the rest of 275 00:15:26,520 --> 00:15:29,280 Speaker 1: the year probably is in you know, in decent shape. 276 00:15:30,240 --> 00:15:33,360 Speaker 1: I know this much. The SMP is losing, it's losing momentum, 277 00:15:33,480 --> 00:15:36,320 Speaker 1: and so it's probably okay for the rest of the year. 278 00:15:36,360 --> 00:15:38,520 Speaker 1: We always found that if you have these big numbers 279 00:15:39,040 --> 00:15:41,520 Speaker 1: up through July or August, you know, of up eighteen 280 00:15:41,600 --> 00:15:45,680 Speaker 1: or you usually rarely add on a lot to that. 281 00:15:45,800 --> 00:15:47,840 Speaker 1: I've done studies on that. You don't add a lot 282 00:15:47,920 --> 00:15:50,640 Speaker 1: onto that. However, I would see when you get into 283 00:15:50,720 --> 00:15:54,480 Speaker 1: twenty two, I think you're going to uh somewhere in 284 00:15:54,560 --> 00:15:57,320 Speaker 1: twenty two, I think you're going to run into some trouble. 285 00:15:57,640 --> 00:16:00,600 Speaker 1: And I see that because by that time all of 286 00:16:00,640 --> 00:16:02,960 Speaker 1: this stuff will have taken place. They have to live 287 00:16:03,000 --> 00:16:06,479 Speaker 1: in the real world. Uh. If we if this inflation 288 00:16:06,880 --> 00:16:10,240 Speaker 1: uh we have now doesn't go away. Then one of 289 00:16:10,280 --> 00:16:13,200 Speaker 1: those quarters, either second or third quarter, probably really runs 290 00:16:13,240 --> 00:16:17,840 Speaker 1: into market weakness. So do you hedge against that? Now? Well, 291 00:16:17,920 --> 00:16:20,680 Speaker 1: we have and that we uh Number one, we don't 292 00:16:20,680 --> 00:16:23,280 Speaker 1: have anything that's very inexpensive, and so I mean we 293 00:16:23,360 --> 00:16:26,760 Speaker 1: would everything was on a bye side for us right now, 294 00:16:26,880 --> 00:16:29,080 Speaker 1: was in the place where we like the evaluations, we'd 295 00:16:29,120 --> 00:16:32,240 Speaker 1: be a hundred percent invested. But we're twenty five percent cash, 296 00:16:33,200 --> 00:16:36,760 Speaker 1: cash and stocks or so about in our high income accounts, 297 00:16:36,760 --> 00:16:39,920 Speaker 1: an aggressive income account. It's one of our other strategy 298 00:16:39,960 --> 00:16:43,800 Speaker 1: of about thirty thirty one. Um. It's not because we 299 00:16:43,880 --> 00:16:45,880 Speaker 1: wouldn't use it. We're not trying to time the market. 300 00:16:45,960 --> 00:16:48,760 Speaker 1: It's just that what we put on the valuation that 301 00:16:48,880 --> 00:16:50,800 Speaker 1: we want to buy, the type of thing we want 302 00:16:50,840 --> 00:16:54,640 Speaker 1: to own is not fit right now. What is the 303 00:16:54,680 --> 00:16:58,560 Speaker 1: type of thing that that you guys like to own? Typically, 304 00:16:59,640 --> 00:17:01,720 Speaker 1: well to two things I would tell you we have, 305 00:17:02,040 --> 00:17:04,399 Speaker 1: we only have were very simple. We have three strategies 306 00:17:04,400 --> 00:17:07,240 Speaker 1: of real conservative income strategy which is bulletproof and we 307 00:17:07,400 --> 00:17:09,399 Speaker 1: really never lose any money there. But you don't make 308 00:17:09,440 --> 00:17:12,600 Speaker 1: a lot. But on the stock side, if you look 309 00:17:12,640 --> 00:17:15,719 Speaker 1: at the stock side, we're looking for companies that can 310 00:17:15,800 --> 00:17:18,639 Speaker 1: grow at year in and year out. There's not that 311 00:17:18,880 --> 00:17:21,639 Speaker 1: may that have that kind of growth. And they have 312 00:17:21,760 --> 00:17:24,159 Speaker 1: low debt a lot of cash. But you know, we 313 00:17:24,480 --> 00:17:27,960 Speaker 1: we look at digital advertising, the cloud services, the payment side, 314 00:17:28,000 --> 00:17:30,320 Speaker 1: you know, use the mass car and PayPal and the 315 00:17:30,400 --> 00:17:33,000 Speaker 1: software side. Those can do that. They can even do 316 00:17:33,160 --> 00:17:36,560 Speaker 1: that through tougher times. That's what we're looking for on 317 00:17:36,680 --> 00:17:40,520 Speaker 1: the on the aggressive income side. We we right now, 318 00:17:40,640 --> 00:17:43,639 Speaker 1: we don't. We're very large and energy probably close to 319 00:17:45,680 --> 00:17:50,280 Speaker 1: and we own oil, natural gas. Everything we own there 320 00:17:50,359 --> 00:17:53,639 Speaker 1: is paying a lot of cash flow. Uh. We we 321 00:17:53,840 --> 00:17:56,320 Speaker 1: like the reachs they've they've they've they've come back a 322 00:17:56,400 --> 00:17:58,600 Speaker 1: little bit in here because I think it's just everything 323 00:17:58,640 --> 00:18:02,080 Speaker 1: that's going on, ted, let's not breathe. Let's not breathe 324 00:18:02,119 --> 00:18:04,840 Speaker 1: over oil and natural gas. I mean, okay, what we're 325 00:18:04,880 --> 00:18:10,080 Speaker 1: seeing here is almost the perfect storm, um, certainly for 326 00:18:10,200 --> 00:18:15,159 Speaker 1: natural gas. You know, I'm in Berlin. Uh, prices in 327 00:18:15,240 --> 00:18:17,960 Speaker 1: Europe have just been off the hook. Everywhere else there's 328 00:18:18,440 --> 00:18:21,200 Speaker 1: they're they're on fire as well. And we see oil 329 00:18:21,280 --> 00:18:23,760 Speaker 1: up over eighty dollars of barrel. How does this all, um? 330 00:18:24,520 --> 00:18:28,400 Speaker 1: How does this all work out? Well? You know, we've 331 00:18:28,720 --> 00:18:31,200 Speaker 1: said for some time and we were saying this last year, 332 00:18:31,359 --> 00:18:34,320 Speaker 1: really in the fall, that we thought oil this year 333 00:18:34,359 --> 00:18:36,159 Speaker 1: would go over eighty dollars and I thought we were 334 00:18:36,200 --> 00:18:39,240 Speaker 1: crazy then, uh, And we had a big position in 335 00:18:39,320 --> 00:18:41,840 Speaker 1: oil and natural gas then and still do. We've actually 336 00:18:41,880 --> 00:18:44,640 Speaker 1: added to it in the early part of this year. 337 00:18:44,760 --> 00:18:47,320 Speaker 1: But we see natural gas. I'm not trying to be 338 00:18:47,400 --> 00:18:49,760 Speaker 1: an alarmist or anything, but just from a supply to 339 00:18:49,880 --> 00:18:53,040 Speaker 1: man standpoint, it wouldn't surprise us for gas to go 340 00:18:53,119 --> 00:18:55,119 Speaker 1: to eight or ten dollars in m c f U s, 341 00:18:55,560 --> 00:18:58,680 Speaker 1: which would mean higher in Europe. Obviously they're much higher 342 00:18:58,720 --> 00:19:01,520 Speaker 1: than we are, but we'd see that. On the natural 343 00:19:01,600 --> 00:19:03,959 Speaker 1: gas side, I think it'll go higher than people expect 344 00:19:04,000 --> 00:19:08,080 Speaker 1: it will, and people are using it, and we really 345 00:19:08,800 --> 00:19:10,840 Speaker 1: we're not drilling it up as much as people think. 346 00:19:10,920 --> 00:19:12,840 Speaker 1: You know, the rig count is still only half of 347 00:19:12,920 --> 00:19:16,320 Speaker 1: what it was four years ago, so we're not pushing 348 00:19:16,440 --> 00:19:18,879 Speaker 1: that button to try to get that supply back on. 349 00:19:19,560 --> 00:19:21,200 Speaker 1: And it has a lot to do with this green 350 00:19:21,359 --> 00:19:24,200 Speaker 1: energy push, but but the timing is not gonna work 351 00:19:24,240 --> 00:19:26,480 Speaker 1: between those two, and I think people don't understand that 352 00:19:27,280 --> 00:19:29,719 Speaker 1: all right, So Ted, you're down in Texas, right, Austin 353 00:19:29,840 --> 00:19:33,199 Speaker 1: or Corpus Austin. How's the local economy down there? You've 354 00:19:33,200 --> 00:19:35,520 Speaker 1: got oil at eighty dollars, But generally speaking, how's the 355 00:19:35,560 --> 00:19:41,040 Speaker 1: economy down there? Economy is in Texas is generally really good. 356 00:19:41,320 --> 00:19:43,360 Speaker 1: If you look at the what I call the four 357 00:19:43,440 --> 00:19:48,680 Speaker 1: main spots, which are Dallas, Houston, Austin, and San Antonio. UM, 358 00:19:48,840 --> 00:19:50,920 Speaker 1: they're all really good there. We have a lot of 359 00:19:50,960 --> 00:19:55,400 Speaker 1: people moving here. We have a lot of tech businesses 360 00:19:55,520 --> 00:19:58,840 Speaker 1: which are are really growing. They're moving not only just 361 00:19:59,000 --> 00:20:02,359 Speaker 1: to uh Ultimate a lot typed Dallas as well. And 362 00:20:02,520 --> 00:20:05,680 Speaker 1: then you have so many companies that are moving here, 363 00:20:05,760 --> 00:20:07,920 Speaker 1: not just from California, but other places that want to 364 00:20:07,960 --> 00:20:10,159 Speaker 1: be in the middle of the country. So generally our 365 00:20:10,200 --> 00:20:13,440 Speaker 1: economy is good. Don't forget Formula one and Moto g P. 366 00:20:13,800 --> 00:20:17,040 Speaker 1: Mark Marquez won his seventh in a row last weekend. 367 00:20:18,160 --> 00:20:21,359 Speaker 1: That was a pretty amazing race. Hey, Ted, Unfortunately it's 368 00:20:21,359 --> 00:20:24,440 Speaker 1: always have time for but I really appreciate you joining us. 369 00:20:24,760 --> 00:20:28,520 Speaker 1: UM great to get your thoughts on these markets and 370 00:20:29,040 --> 00:20:31,920 Speaker 1: to get your take on what's going on with commodities 371 00:20:32,280 --> 00:20:38,240 Speaker 1: as well. Ted Oakley, Uh, they're joining us from Oxbo Advisors. 372 00:20:42,160 --> 00:20:46,920 Speaker 1: Now let's get to the world of uh, crypto, but 373 00:20:47,080 --> 00:20:50,000 Speaker 1: also UM commodities. James Ross is here see I OWE 374 00:20:50,000 --> 00:20:52,399 Speaker 1: and founding partner Coast Capital. He can talk about the 375 00:20:52,440 --> 00:20:55,520 Speaker 1: whole gamut. I want to ask first though, about the 376 00:20:55,680 --> 00:21:01,080 Speaker 1: moves behind Bitcoin and you know, the US the crypto space. 377 00:21:01,320 --> 00:21:03,880 Speaker 1: It's not all moving in the same direction. I see 378 00:21:03,920 --> 00:21:05,680 Speaker 1: still a lot of random I scream when I look 379 00:21:05,720 --> 00:21:09,080 Speaker 1: at crypto and someone tweeted to me, you know, why 380 00:21:09,520 --> 00:21:15,560 Speaker 1: isn't riot mimicking bitcoin? Um, why aren't we see this 381 00:21:15,800 --> 00:21:21,960 Speaker 1: rising tide lifting all boats? James, Um, you know, really 382 00:21:22,040 --> 00:21:25,640 Speaker 1: interesting question. I think that we could um speak about 383 00:21:25,680 --> 00:21:27,720 Speaker 1: it until we're blue in the face and not really 384 00:21:27,760 --> 00:21:31,040 Speaker 1: reach a conclusion. That's the fate of crypto, I think. 385 00:21:31,200 --> 00:21:35,040 Speaker 1: I think, Look, here's the problem. I think that UM 386 00:21:35,560 --> 00:21:39,119 Speaker 1: tetheringe things to Bitcoin, expecting one thing or another to 387 00:21:39,160 --> 00:21:42,479 Speaker 1: become the next Bitcoin. I think would be correct because 388 00:21:43,040 --> 00:21:46,920 Speaker 1: any given cryptocurrency that we look at has technical flaws 389 00:21:47,080 --> 00:21:51,800 Speaker 1: and shortcomings, which means that following generations will be better, 390 00:21:52,000 --> 00:21:55,040 Speaker 1: will offset those shortcomings, and in a weird way, and 391 00:21:55,119 --> 00:21:58,040 Speaker 1: without getting into too much technical detail, the more we 392 00:21:58,240 --> 00:22:02,440 Speaker 1: offset the security concerns, or the more we address the 393 00:22:02,480 --> 00:22:05,960 Speaker 1: security concerns around certain crypt or for for a given cryptocurrency, 394 00:22:06,280 --> 00:22:09,479 Speaker 1: the less usable it might become. So there's there's almost 395 00:22:09,560 --> 00:22:13,439 Speaker 1: like a it's very very difficult to get any one 396 00:22:13,520 --> 00:22:18,440 Speaker 1: cryptocurrency to become, you know, a monetary unit. That's why 397 00:22:18,520 --> 00:22:21,200 Speaker 1: the adoptable and by the usable. Never mind the fact 398 00:22:21,280 --> 00:22:23,080 Speaker 1: the governments around the world, I'm never gonna let that 399 00:22:23,160 --> 00:22:26,280 Speaker 1: happen to begin with. So I very respectfully view the 400 00:22:26,320 --> 00:22:31,960 Speaker 1: whole cryptocurrency phase as or cryptocurrency universe, as being full 401 00:22:32,280 --> 00:22:35,960 Speaker 1: of various iterations of bitcoins, some of which should be 402 00:22:35,960 --> 00:22:38,600 Speaker 1: trading at a notable premium to bitcoin technical based on 403 00:22:38,640 --> 00:22:41,120 Speaker 1: their technical merits, some of which less. But the whole 404 00:22:41,119 --> 00:22:43,240 Speaker 1: thing is probably gonna be worthless over time, I just 405 00:22:43,720 --> 00:22:46,240 Speaker 1: you know, or much of it I expect. Before we 406 00:22:46,320 --> 00:22:49,000 Speaker 1: get to everything else, though, um James, let me ask 407 00:22:49,040 --> 00:22:52,280 Speaker 1: you about tether. We we had a great cover story 408 00:22:52,520 --> 00:22:56,639 Speaker 1: on this week's edition of Boomberg Business Week, and what 409 00:22:56,840 --> 00:23:04,240 Speaker 1: concerns me is without um uh, without enough um of 410 00:23:04,359 --> 00:23:07,880 Speaker 1: ideas of an idea of what's backing each tether coin. 411 00:23:08,000 --> 00:23:10,000 Speaker 1: You know, it's supposed to be one dollar. We thought 412 00:23:10,000 --> 00:23:12,000 Speaker 1: it was cash, then we heard it was cash equivalent. 413 00:23:12,480 --> 00:23:15,639 Speaker 1: Now here it could also be loans to companies related 414 00:23:15,680 --> 00:23:19,040 Speaker 1: to Tether, and I have to wonder if it's also 415 00:23:19,040 --> 00:23:22,960 Speaker 1: a commercial paper in Chinese developers like that seems to 416 00:23:23,080 --> 00:23:25,800 Speaker 1: be the possibility that seems to have the makings of 417 00:23:25,880 --> 00:23:31,000 Speaker 1: the house of cards, doesn't it It is a house 418 00:23:31,080 --> 00:23:35,200 Speaker 1: of cards, it doesn't have Your story was brilliant and 419 00:23:36,000 --> 00:23:39,200 Speaker 1: I think somewhat courageous because these bitcoin bros, you know, 420 00:23:39,359 --> 00:23:42,560 Speaker 1: with with lasers coming either out of the rise like 421 00:23:42,640 --> 00:23:45,200 Speaker 1: that dead Walkers out of Game of Throws, you know, 422 00:23:45,400 --> 00:23:48,600 Speaker 1: really don't like facts and don't like facts that contradate 423 00:23:48,640 --> 00:23:50,960 Speaker 1: their enthusiasm. But I understand the idea of morning to 424 00:23:51,040 --> 00:23:53,280 Speaker 1: get rich quick and not doing a whole lot of work, 425 00:23:53,359 --> 00:23:56,240 Speaker 1: and on top of its feeling like your movement whatever 426 00:23:56,359 --> 00:23:59,120 Speaker 1: that means, you know. But I think that the BS 427 00:23:59,200 --> 00:24:01,720 Speaker 1: has to stall, and where it stops and how, I 428 00:24:01,840 --> 00:24:04,040 Speaker 1: don't know, And to be candid, it's not going to 429 00:24:04,119 --> 00:24:06,879 Speaker 1: be terribly interesting because I've seen this before, just the 430 00:24:07,119 --> 00:24:10,000 Speaker 1: arrogance associated with these cryptos, I haven't really felt before. 431 00:24:10,320 --> 00:24:13,920 Speaker 1: Tether was supposed to have one dollar of currency for 432 00:24:14,040 --> 00:24:16,959 Speaker 1: everych other issue. That was the premise, and by the way, 433 00:24:17,000 --> 00:24:20,080 Speaker 1: it was invented because you could not as an American 434 00:24:20,200 --> 00:24:22,879 Speaker 1: come in by bitcoin, you know directly, you have to 435 00:24:22,960 --> 00:24:26,840 Speaker 1: buy something else because of the because of security concerns 436 00:24:27,160 --> 00:24:30,760 Speaker 1: and because of money laundering concerns around around bitcoin. So 437 00:24:30,840 --> 00:24:34,960 Speaker 1: tether was invented with that very specific assumption and statement, 438 00:24:35,280 --> 00:24:37,680 Speaker 1: you know, one dollar for everyone tether and then lo 439 00:24:37,840 --> 00:24:40,520 Speaker 1: and behold the number of years later there's not a 440 00:24:40,640 --> 00:24:42,800 Speaker 1: dollar per every per every tether. There could be a 441 00:24:42,880 --> 00:24:45,320 Speaker 1: lot less. And by the way, it's not a dollar occurrency. 442 00:24:45,440 --> 00:24:47,359 Speaker 1: It could be as you say, in in in in 443 00:24:47,520 --> 00:24:50,399 Speaker 1: launch too, you know, Chinese bitcoin farms. It could be 444 00:24:50,560 --> 00:24:53,240 Speaker 1: in you know, Chinese education companies listed on not that 445 00:24:53,359 --> 00:24:58,960 Speaker 1: you have no idea, and the fact that why you know, 446 00:24:59,080 --> 00:25:01,520 Speaker 1: who knows, there's probably be worse. But the fact what 447 00:25:01,680 --> 00:25:04,639 Speaker 1: amazes me is how far the authorities have a lot 448 00:25:04,720 --> 00:25:08,000 Speaker 1: all of this your nonsense to go, you know, and 449 00:25:08,160 --> 00:25:10,840 Speaker 1: and and and how little oversight they've exerted so far. 450 00:25:11,000 --> 00:25:15,200 Speaker 1: I just I am very concerned that globally speaking, for securities, 451 00:25:15,520 --> 00:25:18,680 Speaker 1: were entering a period where the rule of law is 452 00:25:18,800 --> 00:25:21,639 Speaker 1: not making itself felt, and people are feeling emboldened to 453 00:25:21,760 --> 00:25:25,040 Speaker 1: carry out, you know, uh, things that that would not 454 00:25:25,160 --> 00:25:27,640 Speaker 1: have been allowed even ten years ago. All right, James, 455 00:25:27,720 --> 00:25:32,000 Speaker 1: let's move from crypto to crude oil. W T A 456 00:25:32,080 --> 00:25:35,880 Speaker 1: crude oil north of eighty one barrel. What's your call 457 00:25:35,960 --> 00:25:40,639 Speaker 1: and what's happening here with crude? Well, look, I mean, 458 00:25:40,640 --> 00:25:43,520 Speaker 1: I mean, I think that there's, uh, there's a lot 459 00:25:43,640 --> 00:25:47,120 Speaker 1: of different forces at play in and in any major market, 460 00:25:47,160 --> 00:25:49,439 Speaker 1: there always will be. But I do think that, um, 461 00:25:49,800 --> 00:25:52,040 Speaker 1: you know, we basically have gone through a pretty important 462 00:25:52,080 --> 00:25:54,880 Speaker 1: period of under investment. I think that this past year 463 00:25:55,280 --> 00:25:57,879 Speaker 1: exacerbated that period. And I think that now that we 464 00:25:58,000 --> 00:26:01,919 Speaker 1: have you know, increasing demand for oil, you know, coinciding 465 00:26:01,960 --> 00:26:05,280 Speaker 1: with under investment, coinciding with you know, shortage in in 466 00:26:05,440 --> 00:26:08,760 Speaker 1: in in in shipping containers, which I think does add 467 00:26:08,800 --> 00:26:11,080 Speaker 1: to all of it because if if things get stuck, 468 00:26:11,320 --> 00:26:13,720 Speaker 1: you know, you still burn energy to maintain these ships, 469 00:26:14,119 --> 00:26:16,520 Speaker 1: but if you use a lot more, it becomes a 470 00:26:16,600 --> 00:26:19,440 Speaker 1: more energy intensive business to be short to medium term. 471 00:26:19,880 --> 00:26:24,119 Speaker 1: And so I I just think that, you know, we 472 00:26:24,320 --> 00:26:26,600 Speaker 1: had a period a year and a half ago, as 473 00:26:26,640 --> 00:26:30,399 Speaker 1: you might have called out, where you know, uh, you know, 474 00:26:30,520 --> 00:26:33,159 Speaker 1: a barrel of oil had an important negative valuation on 475 00:26:33,320 --> 00:26:36,440 Speaker 1: some markets, we might have queeze up. That would be frightening, 476 00:26:36,960 --> 00:26:39,440 Speaker 1: you know, uh and and and it's very it's not 477 00:26:39,680 --> 00:26:42,600 Speaker 1: a sensible market in the short to medium term. Longer, 478 00:26:43,200 --> 00:26:45,159 Speaker 1: we have more than enough supply around the world to 479 00:26:45,240 --> 00:26:47,280 Speaker 1: meet our demand. That's certainly in North America with the 480 00:26:47,320 --> 00:26:49,480 Speaker 1: non conventional poil that we have, should be in a 481 00:26:49,520 --> 00:26:51,440 Speaker 1: really good place. I say it still gives me goose 482 00:26:51,480 --> 00:26:53,840 Speaker 1: bumps to think of that day. James Ross Day, ce 483 00:26:53,960 --> 00:26:56,320 Speaker 1: IO and founding partner at Coast Capital, Thanks very much 484 00:26:56,359 --> 00:26:59,840 Speaker 1: for your inside Thanks for listening to the Bloomberg Markets podcast. 485 00:27:00,320 --> 00:27:03,480 Speaker 1: You can subscribe and listen to interviews with Apple Podcasts 486 00:27:03,680 --> 00:27:07,560 Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm 487 00:27:07,600 --> 00:27:10,960 Speaker 1: on Twitter at Matt Miller nine seventy three. Put on 488 00:27:11,080 --> 00:27:14,120 Speaker 1: fall Sweeney. I'm on Twitter at pt Sweeney. Before the podcast. 489 00:27:14,200 --> 00:27:16,720 Speaker 1: You can always catch us worldwide at Bloomberg Radio.