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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring

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Speaker 1: you insight from the best and economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg

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Speaker 1: dot Com, and of course, on the Bloomberg Terminent. We

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Speaker 1: don't join us now across my global investment seat, I

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Speaker 1: bought let's start here. What time horizon do you have

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Speaker 1: in mind that you can remain constructive on? Six months?

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Speaker 1: Twelve months? What is it, Bob? Yeah, it is literally

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Speaker 1: six to twelve. I think the New York term is

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Speaker 1: a little more treacherous. But we don't have the signs

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Speaker 1: of recession. Unless we have a recession, it's hard to

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Speaker 1: see a big down move in the market. So I

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Speaker 1: think we're gonna tread water with a lot of volatility

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Speaker 1: in both directions as we sort out what used to

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Speaker 1: be a pattern that was almost all positive. Now it's

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Speaker 1: just a bit more mixed. For example, inflation is not

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Speaker 1: all transitory. I hope everybody finally gets ahold of that one. Yeah,

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Speaker 1: but I love what you have in your note, uh,

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Speaker 1: Bob doll and that as you talk about technology related disinflation,

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Speaker 1: the advantage we've had from technology, are you suggesting that's over?

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Speaker 1: Not at all, Tom, I think that will remain a

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Speaker 1: powerful force to keep inflation from getting really out of hand.

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Speaker 1: But when you look at wage rates, that's the most

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Speaker 1: insidious hard to get out of the picture inflation, and

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Speaker 1: it's very prevalent now that on top of just go

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Speaker 1: shopping and you see what the story is exacerbated by

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Speaker 1: the supply shortage you folks coverage just a minute ago.

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Speaker 1: So how important, Bob, is the jobs report that we're

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Speaker 1: gonna get on Friday to you? I think it's very important.

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Speaker 1: The Fed seems almost unilaterally focused on the jobs from

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Speaker 1: on and kind of pushing inflation to the side, not

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Speaker 1: worrying about it. I think at some point, as the

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Speaker 1: employment numbers continue to improve, inflation will come front and

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Speaker 1: center for their fight. All right, So the idea of

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Speaker 1: the job's report, would you say that it's more important

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Speaker 1: than earnings because a lot of people are saying that

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Speaker 1: almost matters less than earnings at a time when the

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Speaker 1: big question mark is not the Fed, which is said

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Speaker 1: it's very devish, but rather margin pressures and how much

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Speaker 1: they're exacerbated by the supply chain disruptions. YEA. For the economy,

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Speaker 1: employment is all important, but for for the markets, it's

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Speaker 1: absolutely about earnings. And as you as you talked about earlier,

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Speaker 1: there are a lot of question marks about third quarter earnings.

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Speaker 1: For sure, we're getting a deceleration from the unsustainable record

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Speaker 1: second quarter. The question is will companies be able to

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Speaker 1: sell what's the supply shortage going to mean, how they're

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Speaker 1: dealing with price pressures. I mean, even in the second

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Speaker 1: quarter reports you saw a big increase in the number

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Speaker 1: of companies commenting on the pricing up problems that they're

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Speaker 1: having raw materials, etcetera. So lots across currents here. My

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Speaker 1: guess is the earning season will be more mixed. So, Bob,

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Speaker 1: going forward, what is your expectation in terms of what

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Speaker 1: you will change in your portfolio? Because right now you

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Speaker 1: are bullish on stocks considering the fact that we're not

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Speaker 1: going to get a recession. However, is there some scenario

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Speaker 1: that you see as potentially likely that could change that view? So, so,

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Speaker 1: the mainline story is that cyclicals and value are cheap

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Speaker 1: and have some tailwind relative to growth and momentum, and

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Speaker 1: high p e stocks and if inflation interest rates creep higher,

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Speaker 1: you know what part of the market struggles with that.

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Speaker 1: That's the high high pet side. What we get in

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Speaker 1: the way of that is we saw problems that the

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Speaker 1: economy was slowing more than people thought that there's unbelievable

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Speaker 1: pedal to the metal. Both monetary and fiscal policies is

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Speaker 1: not having the effect that's been having. I think that

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Speaker 1: will continue to carry the day, Bob. I would guess

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Speaker 1: you have seen four times o MG margin contraction, margin pressures.

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Speaker 1: We're all gonna die at the sort of the income statement.

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Speaker 1: How do you respond to that if you're an investor?

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Speaker 1: So so, I think that those margin issues are for

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Speaker 1: real toend to be paid attention to, particularly light of

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Speaker 1: profit margins. Seemed like quarter after quarter have come in

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Speaker 1: better than expected and reached unbelievable heights all time pies.

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Speaker 1: That's probably not sustainable in the long run, Tom, And

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Speaker 1: therefore I think a long term look at Ernis has

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Speaker 1: to have a profit margin picture that's a little below

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Speaker 1: where we are today. The worries about these margins into

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Speaker 1: this quarter, Bob, I'd love a playbook from you on

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Speaker 1: what to buy on weakness as this earning season starts.

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Speaker 1: I think that's got to be the focus right now.

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Speaker 1: If you want an investor committee and you're thinking about

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Speaker 1: these issues, you're looking around and saying, well, everyone's till

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Speaker 1: about the same thing right now. Where do I want

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Speaker 1: to fight this story? How do I want to fight

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Speaker 1: this story into earning season? Bob? How would you like

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Speaker 1: to do that? So into weakness the first part of

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Speaker 1: your question, I want to own what I think is

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Speaker 1: gonna work best over the next six to twelve months,

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Speaker 1: and that is cyclical value, downtap international I think they're

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Speaker 1: the places where the puck is going. So financial stocks,

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Speaker 1: for example, you've seen them as interest rates have crept higher,

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Speaker 1: do a lot better than you might think in the

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Speaker 1: decline we've seen in the market from its highs of

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Speaker 1: just a few weeks ago. So that's the kind of

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Speaker 1: area I want to jump onto. I have a lot

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Speaker 1: less valuation risk there than I do in some of

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Speaker 1: the higher pe growth stocks have done so so well

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Speaker 1: for it seems like forever, Bob, It's been forever. It's

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Speaker 1: been too long. It always feels like it's too long.

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Speaker 1: It's quite a catch up set as always, Bob, Dell

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Speaker 1: Cross Mount Global Investment c I YEA. What it really

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Speaker 1: is here early October is the linkage of an economic

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Speaker 1: belief into an equity or stock market execution on the economics,

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Speaker 1: Bruce Casmin joins with JP Morgan or chief Economists and

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Speaker 1: a head of global economic research. Away from stagflation, Bruce Kasmin,

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Speaker 1: what does the JP Morgan call on economic growth forward

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Speaker 1: a year? So? I think the broad pictures that we

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Speaker 1: continue to get the benefits of vaccinations proving effective, of

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Speaker 1: the virus becoming less of an economic factor, growth rotates

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Speaker 1: away from the US, and we see better growth in

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Speaker 1: emerging markets over the next year. But growth is pretty solid. However,

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Speaker 1: as you were noting, we have a threat right now

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Speaker 1: that growth is decelerating in the US, inflation is moving up.

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Speaker 1: There's important drags here that we have to be right.

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Speaker 1: We get over with still pretty solid growth over the

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Speaker 1: next few months. I think all of our listeners and

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Speaker 1: viewers can be confused about a fairly optimistic economic outlook

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Speaker 1: uh from JP Morrigan, But my go Faroli's potential GDP,

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Speaker 1: which is much lower, but just up against your arguably

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Speaker 1: top of street optimism on equities from Michael Faroli to

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Speaker 1: Lacos Bougies. I mean, are those two views linked well.

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Speaker 1: I think in the near term, the basic point is

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Speaker 1: we still have an enormous amount of slack in the

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Speaker 1: U S economy and the global economy. We can grow

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Speaker 1: even with what we still believe is a relatively weak

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Speaker 1: supply side and one that might have gotten earth by

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Speaker 1: the pandemic. I think the question, in the more broad

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Speaker 1: sense and for the equity market, is not so much

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Speaker 1: about the pace of growth but the sustainability of growth.

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Speaker 1: And on that front, we are very optimistic that we're

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Speaker 1: coming into this expansion with healthy balance sheets, supportive policy UM,

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Speaker 1: and that the vaccine still creates an opportunity for a

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Speaker 1: lot of pent up demands. So potential growth is low.

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Speaker 1: There's a drag that's hitting us now, but there's a

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Speaker 1: good opportunity here for having an expansion that is both

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Speaker 1: sustainable and modestly positive in terms of delivering on the

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Speaker 1: Fed's goal of raising inflation. Bruce, how much is your

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Speaker 1: view predicated on supply chain disruptions getting resolved pretty quickly? Um.

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Speaker 1: I don't think we should expect them to get resolved quickly,

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Speaker 1: but I think we're very much dependent on them starting

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Speaker 1: to moderate. The pressures are a big drag on growth

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Speaker 1: right now. We should we should recognize that. And I

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Speaker 1: think what's key in our forecast is that we see

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Speaker 1: those pressures a bait. We see some of the inflation

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Speaker 1: begin to come off. Here, purchasing power lifts and goods

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Speaker 1: get moved around the world more easily. But this is

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Speaker 1: going to take a while, probably six to nine months

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Speaker 1: at least, before we see them the problems start to

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Speaker 1: really move away from the scene. So this is what

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Speaker 1: I'm really struggling with. Six to nine months and we're

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Speaker 1: seeing the likes of Nike, of fed Bath and beyond

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Speaker 1: fall dramatically after reporting their expectations for slower sales or

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Speaker 1: higher margin pressures due to some of these supply chain disruptions.

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Speaker 1: How can you still be optimistic, not only from an

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Speaker 1: economic perspective, but a corporate health perspective when their faith

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Speaker 1: seeing these sort of unsold items that cannot be acquired

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Speaker 1: simply because of these disruptions. Well, I think the underlying

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Speaker 1: story is that this is a drag. It's a drag

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Speaker 1: which has continued to get bigger. It's a problem not

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Speaker 1: just for consumer purchasing power, in terms of price increases,

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Speaker 1: but for the corporate bottom line. But that there's still

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Speaker 1: this broad story. I mean, we've been downgrading global growth

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Speaker 1: quite sharply in the last few months on a result

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Speaker 1: of this. We still have global growth running close to

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Speaker 1: twice its potential pace in the second half of the year.

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Speaker 1: So part of what's going on here is the pressure

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Speaker 1: that's coming as we're starting to reopen economies. We think

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Speaker 1: that's going to continue. So you have a balance here

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Speaker 1: pressure on prices, drags from supply chain issues, but still

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Speaker 1: strong global demand. And you know, the question is do

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Speaker 1: we have it right that says the U s economy

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Speaker 1: is not gonna do as well as we might have thought,

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Speaker 1: but could still grow three to four percent here over

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Speaker 1: the next year, that the global economy is actually gonna

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Speaker 1: do better than that because a lot of these countries

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Speaker 1: really lag behind. In the US, I think importantly China

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Speaker 1: has to deliver on getting its growth back on course

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Speaker 1: after having stumbled somewhat in the third quarter. And I

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Speaker 1: don't want you to make a taibot called to four digits.

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Speaker 1: That's not your remit at JP Morgan, But I do

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Speaker 1: want you to talk about a broader, strong dollar resilient

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Speaker 1: dollar e M. Fear that is out there. Do we

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Speaker 1: underestimate the resiliency of particularly Asia? E M. Giving your

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Speaker 1: house economic call? Well, I think in Asia there's two

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Speaker 1: forces that work right now. One is the China story,

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Speaker 1: where there's been a very sharp slowing policy driven, and

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Speaker 1: we have to be right that policy is going to

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Speaker 1: calibrate to bring things back up. The other story, which

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Speaker 1: I think is just starting to come into view, is

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Speaker 1: that we are finally seeing vaccination rates up, We're starting

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Speaker 1: to see restrictions come down, and Asia is going to

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Speaker 1: be a pretty decent source of demand here. And I

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Speaker 1: include Japan and include the emerging markets in Asia as

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Speaker 1: as part of that story. In that context, if we

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Speaker 1: get the kind of growth we're looking forward Asia, I

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Speaker 1: think the even with the FED moving to tapering, we're

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Speaker 1: not going to see the dollar move materially higher here

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Speaker 1: to move to Washington, Bruce Kasman, if we see some

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Speaker 1: form of lessening or failure of these two bills by

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Speaker 1: the Democrats in Congress, what does that do to the

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Speaker 1: fiscal impulse to this nation? So it is important that

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Speaker 1: we are right in terms of our macro abuse, that

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Speaker 1: we get additional fiscal stimulus, and we're looking for something

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Speaker 1: that adds roughly one percent to GDP next year from

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Speaker 1: fiscal support. If we don't get that, that's obviously a

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Speaker 1: drag on growth. And then you put war weight on

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Speaker 1: the tension that we have in the macro picture between

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Speaker 1: significant fading supports from this year's stimulus with the fact

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Speaker 1: that the household sector has built up an enormous amount

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Speaker 1: of excess savings. It hasn't spent the stimulus that came

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Speaker 1: in twenty and twenty one, and to think about how

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Speaker 1: much of that actually is a cushion. I wouldn't want

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Speaker 1: to depend on that in my macro forecast. We are

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Speaker 1: looking for this additional stimulus, but certainly that would be

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Speaker 1: needed if we're going to continue to grow at the

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Speaker 1: pace we're expecting if we don't get that stimulus. US

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Speaker 1: you've been doing this for decades, you've been in this industry.

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Speaker 1: You see the amount of uncertainty that is here among

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Speaker 1: your colleagues. You even talk about the range of possible

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Speaker 1: outcomes for a whole host of different areas, whether it's

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Speaker 1: the policy response in China, the policy responds down in Washington,

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Speaker 1: d C. With respect to spending, whether we see supply

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Speaker 1: chain disruptions abait. Have you ever seen this amount of

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Speaker 1: uncertainty in your economic forecasts? For sure? I mean, I

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Speaker 1: think one thing we should remember is there's a difference

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Speaker 1: between being an unprecedented times which this is really unprecedented,

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Speaker 1: and the degree of uncertainty. I don't see a particularly

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Speaker 1: significant risk of the recession in the next twelve to

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Speaker 1: eight months. I think the global economy is on reasonably

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Speaker 1: good footing. I think there's enormous range of outcomes we

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Speaker 1: can talk about on inflation, uh, in terms of growth,

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Speaker 1: but I don't think this is a particularly scary time

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Speaker 1: in terms of macroeconomics. And I do think that one

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Speaker 1: reason we always see a lot of uncertainty going forward

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Speaker 1: is because everything that has happened in the past has

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Speaker 1: actually happened. So do you think that traders are using

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Speaker 1: economic projections correctly? When they start saying they keep getting

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Speaker 1: it wrong, how can we trust them? And they start

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Speaker 1: looking at the granularity is rather than the overarching point

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Speaker 1: that you just made, We're not going to have a

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Speaker 1: recession in the near term. One thing we can be

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Speaker 1: sure is my economic forecast is going to be wrong.

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Speaker 1: I mean, that's just the nature right now, will be wrong.

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Speaker 1: But I don't actually see when I look at the

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Speaker 1: way financial markets of pricing an enormous amount of uncertainty

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Speaker 1: relative to normal times, risk premium and bond markets, premium

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Speaker 1: in equity markets are not unduly high here. Um. I

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Speaker 1: do think there is a lot of uncertainty. The range

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Speaker 1: of outcomes is wide, and we've gotten certainly more focused

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Speaker 1: on the possibility for disappointments on growth going into the

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Speaker 1: fourth quarder. But again, I think we're still well balanced

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Speaker 1: here for a solid recovery. Whether we get the recovery want,

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Speaker 1: whether we control inflation. These are all important questions. What

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Speaker 1: policymakers deliver or not are big questions. But I don't

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Speaker 1: think we're in an unusually large range of uncertainty relative

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Speaker 1: to a number of periods in the past, where you know,

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Speaker 1: we were at the brink of recession, financial crisis, other

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Speaker 1: things that could have hit us. We're enormous uncertainty early

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Speaker 1: last year when the pandemic first hit, that was far

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Speaker 1: more hard to to figure out than where we are

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Speaker 1: right now. Bruce fantastic cancer wits to hear from you

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Speaker 1: economist and had of global economic research. This is a

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Speaker 1: joy to talk of the moment in Washington, and also

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Speaker 1: the larger picture is well. Wendy Schiller is it Brown University?

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Speaker 1: She just director of the Tobin Center of American po

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Speaker 1: Politics and Policy. She also has the most readable seven

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Speaker 1: hundred four page textbook, Treatment on America in a Democracy

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Speaker 1: under Threat. John I. Camp convey to you the importance

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Speaker 1: of Gateways to Democracy as an instructing guide for so

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Speaker 1: many America. Let's get some instructions right now, Tom with Wendy. Wendy,

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Speaker 1: great to catch up with you. We keep talking about

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Speaker 1: these numbers one point five, three point five. Bernie sand

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Speaker 1: is talking about something north of that. Senator sand is

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Speaker 1: looking for six seven three point five in a minimum. Wendy,

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Speaker 1: how many people in American right now do you think

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Speaker 1: know what's in this offering? At three point five? It's

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Speaker 1: on the table, Johnathan as close to zero people in

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Speaker 1: American know what's in this bill. It's been I think

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Speaker 1: political malpractice, and strategically, you know, Ill advised the Democrats

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Speaker 1: to keep talking about the number and fighting about the

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Speaker 1: number and not talking about what's in it for most Americans,

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Speaker 1: especially since they're talking about a tax hike. On what

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Speaker 1: they call upper income voters, many of whom live in

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Speaker 1: the suburbs that voted for the Democrats and voted for

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Speaker 1: the Democrats at least you know in some part in

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Speaker 1: so if you're gonna go back in and staid reelect

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Speaker 1: us again, but we're gonna raise your taxes and in

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Speaker 1: fact we're spending it on stuff, but we can't even

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Speaker 1: identify simply in thirty seconds or less. That is a

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Speaker 1: very bad political calculation, which is stunning given the experience

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Speaker 1: you've got between Pelosi, Schumer, and Biden. Can we talk

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Speaker 1: about whose fault this is right now, Wendy, who is

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Speaker 1: at fault? Maybe a couple of names there, who's at

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Speaker 1: fault at the moment for that, Well, I think the

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Speaker 1: people are just named a certain thing. President Biden should

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Speaker 1: have been talking about what's in this reconciliation package, not

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Speaker 1: just the reconciliation package. Certainly, Schumer, it's interesting, sure is

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Speaker 1: walking into a tight line because he's up for re

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Speaker 1: election in two and you never know, New York politics

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Speaker 1: is changing rapidly. Uh. You know, he looks in good shape,

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Speaker 1: he's gonna raise a lot of money, but you never know.

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Speaker 1: So I think that's a lot of pressure on him

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Speaker 1: not to sort of throw out all the progressive initiatives.

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Speaker 1: But listen, you're doing features on investments in come and

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Speaker 1: EISI gonna make electric cars for example. That infrastructure bill,

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Speaker 1: either Reconciliation or the infrastructure bill, we're not quite sure

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Speaker 1: has some money. And for public charging stations for example,

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Speaker 1: for electric cars, where are people going to charge their cars?

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Speaker 1: And what are they gonna pay for that electricity? Nobody knows.

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Speaker 1: But if you're talking about going green and you're talking

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Speaker 1: about electric cars for GM, then the government saying, hey,

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Speaker 1: we're going to row out a free charging station for you,

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Speaker 1: that's something Americans can digest. It's something they think, Oh,

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Speaker 1: I drive to work, particularly in those districts that are

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Speaker 1: competitive in the suburbs, and now I can drive an

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Speaker 1: electric car and not worry about charging it. Wendy, are simple?

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Speaker 1: I did that in lesson to seconds. It's the debate.

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Speaker 1: Can't do that? It's a mystery. Well, and this really

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Speaker 1: is the question down in Washington, d C. Is this

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Speaker 1: the debate over these details or is it this larger

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Speaker 1: philosophical point of a headline number and a view forward

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Speaker 1: for the Democratic Party as the new UH the new

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Speaker 1: Party of a new deal. I think I think that's

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Speaker 1: been lost thus far. I think it got You know,

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Speaker 1: they did a lot of good things in the COVID

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Speaker 1: relief package. They got a lot of people vaccinated, They

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Speaker 1: did another stimulus check. The economy seems to rebound now,

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Speaker 1: the stock market and debt ceiling gets a little complicated

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Speaker 1: this time of year. Of course, we expect Republicans, ultimately,

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Speaker 1: as they always do, will go along with the debt

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Speaker 1: ceiling or allow the Democrats to raise it. It'll just

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Speaker 1: be brakemanship for a while, and that will rattle people

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Speaker 1: a little bit. But if you're a suburban voter who

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Speaker 1: likes the Democratic Party and you're finding your fur own

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Speaker 1: case going down this month, that they're fighting about numbers

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Speaker 1: and that you don't know what's in it for you,

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Speaker 1: but a potential tax cut tax increase is on the horizon,

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Speaker 1: you're getting uncomfortable. Well, and this is not the right

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Speaker 1: time for Democrats to have people get uncomfortable with their agenda, Wendy.

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Speaker 1: If they are committing political malpractice and not messaging this correctly,

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Speaker 1: are they on the brink of political malpractice when it

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Speaker 1: comes to the debt ceiling? When it comes to the

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Speaker 1: idea of allowing the United States to accidentally default simply

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Speaker 1: because they can't get the timing right. Well, I don't

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Speaker 1: think they're gonna let that happen. I think they're gonna

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Speaker 1: do whatever they can and to make sure that that happens.

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Speaker 1: And I think there's enough support for Republicans, for example,

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Speaker 1: Becau going into among Wall Street, among corporations, among businesses

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Speaker 1: who don't like instability, that the pressure will be fairly

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Speaker 1: significant the Republicans not to get in the way. But

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Speaker 1: they're just gonna watch the Democrats fumble until the very

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Speaker 1: last minute and then come aboard. That's what I think

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Speaker 1: is going to happen. But Americans don't like the idea

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Speaker 1: of raising taxes, spending lots of money, and having a

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Speaker 1: skyrocketing debt or deficit. Even if they don't quite understand

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Speaker 1: the relationship, they know that they don't want that to

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Speaker 1: be our our constant situation. And I want to go

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Speaker 1: to your academics, and I want to dovetailed into Greg

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Speaker 1: Grant and the yells great where yells of school down

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Speaker 1: the coast, Wendy, if you're not aware of that, And

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Speaker 1: I want to talk about the threat of democracy that's

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Speaker 1: out there in the zeitgeist and the new Jacksonian American

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Speaker 1: with former President Trump, or if he doesn't run with

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Speaker 1: the new Republicans, what is the flavor of our new

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Speaker 1: Jacksonian America for our democracy? Tom That's a great question,

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Speaker 1: But there's an inherent contradiction there, because what Andrew Jackson

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Speaker 1: did that was so brilliant was expand the suffrage, expand

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Speaker 1: the electorate. He pushed state legislatures to allow more people

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Speaker 1: to vote. He got state legislators invest in the idea

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Speaker 1: of state based parties political parties and sending the nomination

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Speaker 1: a process out to the nation, making it more national

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Speaker 1: because the elites in Washington had blocked him. So that's

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Speaker 1: expanding the suffrage, expanding the vote, having more people participate.

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Speaker 1: The Republican response, I'm not sure I call it a

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Speaker 1: Trump response because he's out of office. But the Republican

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Speaker 1: response now is to limit the suffrage, to try to

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Speaker 1: make it harder to vote, to try to limit the

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Speaker 1: number of people can vote. That's not Andrew Jackson. He

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Speaker 1: didn't see it that way. He said, get everybody in

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Speaker 1: there and then persuade them that you're the guy. So

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Speaker 1: I think that Trump will ride the codetails of what

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Speaker 1: the Republicans are doing to some extent. But his motto

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Speaker 1: and what he did in twenty sixteen was bring more

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Speaker 1: people who had not voted or hadn't voted recently into

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Speaker 1: the electorate. And that's the Jackson model. Wendy, thank you,

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Speaker 1: it's been too long. Come back soon. That of Brown

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Speaker 1: University right now for Lisa Bramits and I, it's a

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Speaker 1: great joy in radio and television to bring in Candice Browning. Yes,

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Speaker 1: she's had a global research at a Bank of America,

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Speaker 1: but very much like Tobias Levkovich of City Group, her

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Speaker 1: strength is she started out in the trenches. If you

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Speaker 1: are seventeen years in a row the airline analyst of

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Speaker 1: the world, and if you do securities and analyst analysis,

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Speaker 1: I should say, like Candice Browning two years ago, that

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Speaker 1: is a research foundation. And we're thrilled she could join

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Speaker 1: us today. Cannice, you have a new report out that's

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Speaker 1: on bitcoin. I don't even know, Candid. Did Brian moyne

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Speaker 1: in let you put the doge in your crypto report? Well,

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Speaker 1: thank you Tom so much for having me on the

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Speaker 1: show today. Actually, what we're doing today is not really

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Speaker 1: so much about bitcoin. Bitcoin is just a part of it.

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Speaker 1: What we did today is we are the first major

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Speaker 1: bank on the South Side to launch a strategist and

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Speaker 1: his job is to be the crypto and digital assets.

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Speaker 1: So yeah, and lucky him. Uh So. The reason we

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Speaker 1: did it is because it's such a huge growing market.

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Speaker 1: So if you look at it today, digital assets are

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Speaker 1: about two trillion dollars, Bitcoin is about nine hundred billion

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Speaker 1: of the two trillions, so it's big and there's a

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Speaker 1: ton of investor interest in the space. It's growing. So

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Speaker 1: if you look at the number of participants, you know,

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Speaker 1: last year there were about sixty six million people participating

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Speaker 1: in this market. Today it's over two hundred and twenty

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Speaker 1: million people who are participating. And if you look at

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Speaker 1: the number of UM corporates mentioning crypto on their earnings calls,

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Speaker 1: that's gone from about seven team last year to about

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Speaker 1: a hundred and forty seven in the most recent quarters.

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Speaker 1: So it's really going kind of mainstream and people are

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Speaker 1: getting interested in it, which brings us to the last

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Speaker 1: reason Tom why we decided to launch this, and that's

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Speaker 1: really and this is the most important word I think

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Speaker 1: is ecosystem you know, this isn't just bitcoin anymore. This

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Speaker 1: is digital assets and it's creating a whole ecosystem of

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Speaker 1: new companies and new opportunities and new applications. And you

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Speaker 1: can see that in the fact that Venture capital, which

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Speaker 1: invested about five and a half billion dollars into digital

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Speaker 1: assets last year year to date has already invested seventeen billion.

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Speaker 1: So this is growing and its mainstream and it's not

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Speaker 1: just bitcoin. You have a great perspective, Candice, because you

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00:23:47,880 --> 00:23:52,080
Speaker 1: deal with both retail and corporate clients and institutional investors.

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00:23:52,119 --> 00:23:55,359
Speaker 1: How much is the interest being driven by retail investors

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00:23:55,600 --> 00:24:00,919
Speaker 1: versus the institutional players. You know, that's a great question, Lisa,

434
00:24:01,040 --> 00:24:04,960
Speaker 1: because there is an obviously an enormous amount of retail

435
00:24:05,119 --> 00:24:08,240
Speaker 1: interest in this space. People want to learn about it

436
00:24:08,800 --> 00:24:13,240
Speaker 1: in our retail system, but there's a huge growing institutional

437
00:24:13,760 --> 00:24:17,520
Speaker 1: interest in this in this space um as well. And

438
00:24:17,600 --> 00:24:20,560
Speaker 1: so we're launching this for all of our customers and really,

439
00:24:20,920 --> 00:24:23,359
Speaker 1: you know, we're launching it more, as I said, about

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00:24:23,440 --> 00:24:28,280
Speaker 1: the ecosystem, and more to learn about this really potentially

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00:24:28,480 --> 00:24:33,960
Speaker 1: revolutionary technology. And that's why we put a former tech

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00:24:34,040 --> 00:24:38,600
Speaker 1: analyst in this spot. The analyst Alkes Shaw has over

443
00:24:38,680 --> 00:24:43,080
Speaker 1: twenty years experience as a tech analyst, and I really

444
00:24:43,119 --> 00:24:45,520
Speaker 1: think this is about, you know, whether we want to

445
00:24:45,560 --> 00:24:48,120
Speaker 1: call it internet to dot oh or whatever we want

446
00:24:48,119 --> 00:24:52,200
Speaker 1: to call it, It's all about this revolutionary new technology

447
00:24:52,240 --> 00:24:55,760
Speaker 1: and it's possibilities. But candis this is actually super important,

448
00:24:55,800 --> 00:24:59,400
Speaker 1: the idea of digital assets not necessarily being a sort

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00:24:59,440 --> 00:25:02,800
Speaker 1: of asset class like commodity. Is it a currency or

450
00:25:02,920 --> 00:25:07,520
Speaker 1: is this an issue of transmitting money beyond the borders,

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00:25:07,560 --> 00:25:11,720
Speaker 1: basically removing some of the frictions that have traditionally been there,

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00:25:12,119 --> 00:25:14,919
Speaker 1: Which do you see as the primal driver of the

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00:25:14,960 --> 00:25:20,119
Speaker 1: research here and frankly of institutional interest. Yeah, you know,

454
00:25:20,240 --> 00:25:23,639
Speaker 1: it's it's a great question. And I do think that

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00:25:23,800 --> 00:25:28,280
Speaker 1: over time this can become its own asset class um

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00:25:28,320 --> 00:25:31,480
Speaker 1: and I think its own sector, just like the Internet.

457
00:25:31,960 --> 00:25:36,280
Speaker 1: And the point is, with this new revolutionary technology, you

458
00:25:36,359 --> 00:25:38,840
Speaker 1: can really address a lot of the issues that you

459
00:25:38,960 --> 00:25:42,679
Speaker 1: brought up. You can bank the one point seven billion

460
00:25:42,720 --> 00:25:46,679
Speaker 1: dollars one point seven billion people who are currently unbanked.

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00:25:46,760 --> 00:25:51,000
Speaker 1: You can do that with much less friction. You can

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00:25:51,040 --> 00:25:54,880
Speaker 1: create um assets such as n f t s that

463
00:25:54,960 --> 00:25:58,800
Speaker 1: you can sell that will have royalties associated with them

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00:25:58,800 --> 00:26:02,240
Speaker 1: without lawyers. So those are just examples of like all

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00:26:02,359 --> 00:26:06,360
Speaker 1: different kinds of things you can do technology, and yes

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00:26:06,400 --> 00:26:09,320
Speaker 1: it can also be money, it can be, but it

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00:26:09,359 --> 00:26:11,800
Speaker 1: can be so many other things as well. Naturally the

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00:26:11,840 --> 00:26:13,359
Speaker 1: point we're almost out of time, I want to go

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00:26:13,400 --> 00:26:15,920
Speaker 1: to Raphael Hour at the Bank of International Settlements in

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00:26:16,000 --> 00:26:20,920
Speaker 1: Geneva has got absolutely pristine research on the foundations of bitcoin,

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00:26:21,280 --> 00:26:25,480
Speaker 1: the foundations of digital currency, the foundations of crypto, and

472
00:26:25,480 --> 00:26:27,520
Speaker 1: I want to fold it over to our Your tech

473
00:26:27,600 --> 00:26:30,359
Speaker 1: analyst is going to have to look at the regulation

474
00:26:30,960 --> 00:26:34,480
Speaker 1: and what you call the wild West of crypto. I mean,

475
00:26:34,680 --> 00:26:38,199
Speaker 1: what what do you do with Gary Ginstler and the

476
00:26:38,280 --> 00:26:43,760
Speaker 1: rest when the police show up to say enough, Well,

477
00:26:43,920 --> 00:26:46,600
Speaker 1: you've put your finger on something that I think is

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00:26:47,000 --> 00:26:50,199
Speaker 1: one of the greatest risks to crypto. And you've already

479
00:26:50,200 --> 00:26:55,280
Speaker 1: seen you know, China and India outlaw bitcoin trading. But

480
00:26:55,400 --> 00:26:59,080
Speaker 1: on the other hand, you know, Gary Ginstler has also

481
00:26:59,160 --> 00:27:03,680
Speaker 1: said that he's eas this revolutionary new technology as offering

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00:27:03,720 --> 00:27:06,960
Speaker 1: a ton of wonderful opportunities. And you know the FED

483
00:27:07,080 --> 00:27:12,520
Speaker 1: is studying um central bank digital currencies. So yes, regulation

484
00:27:12,680 --> 00:27:17,439
Speaker 1: is a huge potential risk in this space. But you

485
00:27:17,480 --> 00:27:21,560
Speaker 1: could also argue that once there's a regulatory roadmap in place,

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00:27:22,480 --> 00:27:28,000
Speaker 1: it will offer enormous opportunities as people conform to that. Okay,

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00:27:28,000 --> 00:27:30,439
Speaker 1: I have to leave it there. Candice Browning, congratulations and

488
00:27:30,520 --> 00:27:34,000
Speaker 1: driving forward the discussion on crypto with a Bank of America,

489
00:27:34,000 --> 00:27:38,080
Speaker 1: Course America, and of course their head of a Global research.

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00:27:39,080 --> 00:27:42,840
Speaker 1: This is the Bloomberg Surveillance Podcast. Thanks for listening. Join

491
00:27:42,920 --> 00:27:46,280
Speaker 1: us live weekdays from seven to ten am Eastern on

492
00:27:46,359 --> 00:27:50,639
Speaker 1: Bloomberg Radio and on Bloomberg Television each day from six

493
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Speaker 1: to nine am for insight from the best in economics, finance, investment,

494
00:27:55,720 --> 00:28:00,439
Speaker 1: and international relations. And subscribe to the Surveillance pod cast

495
00:28:00,640 --> 00:28:04,280
Speaker 1: on Apple podcast, SoundCloud, Bloomberg dot com, and of course

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00:28:04,600 --> 00:28:08,919
Speaker 1: on the terminal. I'm Tom keene In. This is Bloomberg