Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring
Speaker 1: you insight from the best and economics, finance, investment, and
Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg
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Speaker 1: don't join us now across my global investment seat, I
Speaker 1: bought let's start here. What time horizon do you have
Speaker 1: in mind that you can remain constructive on? Six months?
Speaker 1: Twelve months? What is it, Bob? Yeah, it is literally
Speaker 1: six to twelve. I think the New York term is
Speaker 1: a little more treacherous. But we don't have the signs
Speaker 1: of recession. Unless we have a recession, it's hard to
Speaker 1: see a big down move in the market. So I
Speaker 1: think we're gonna tread water with a lot of volatility
Speaker 1: in both directions as we sort out what used to
Speaker 1: be a pattern that was almost all positive. Now it's
Speaker 1: just a bit more mixed. For example, inflation is not
Speaker 1: all transitory. I hope everybody finally gets ahold of that one. Yeah,
Speaker 1: but I love what you have in your note, uh,
Speaker 1: Bob doll and that as you talk about technology related disinflation,
Speaker 1: the advantage we've had from technology, are you suggesting that's over?
Speaker 1: Not at all, Tom, I think that will remain a
Speaker 1: powerful force to keep inflation from getting really out of hand.
Speaker 1: But when you look at wage rates, that's the most
Speaker 1: insidious hard to get out of the picture inflation, and
Speaker 1: it's very prevalent now that on top of just go
Speaker 1: shopping and you see what the story is exacerbated by
Speaker 1: the supply shortage you folks coverage just a minute ago.
Speaker 1: So how important, Bob, is the jobs report that we're
Speaker 1: gonna get on Friday to you? I think it's very important.
Speaker 1: The Fed seems almost unilaterally focused on the jobs from
Speaker 1: on and kind of pushing inflation to the side, not
Speaker 1: worrying about it. I think at some point, as the
Speaker 1: employment numbers continue to improve, inflation will come front and
Speaker 1: center for their fight. All right, So the idea of
Speaker 1: the job's report, would you say that it's more important
Speaker 1: than earnings because a lot of people are saying that
Speaker 1: almost matters less than earnings at a time when the
Speaker 1: big question mark is not the Fed, which is said
Speaker 1: it's very devish, but rather margin pressures and how much
Speaker 1: they're exacerbated by the supply chain disruptions. YEA. For the economy,
Speaker 1: employment is all important, but for for the markets, it's
Speaker 1: absolutely about earnings. And as you as you talked about earlier,
Speaker 1: there are a lot of question marks about third quarter earnings.
Speaker 1: For sure, we're getting a deceleration from the unsustainable record
Speaker 1: second quarter. The question is will companies be able to
Speaker 1: sell what's the supply shortage going to mean, how they're
Speaker 1: dealing with price pressures. I mean, even in the second
Speaker 1: quarter reports you saw a big increase in the number
Speaker 1: of companies commenting on the pricing up problems that they're
Speaker 1: having raw materials, etcetera. So lots across currents here. My
Speaker 1: guess is the earning season will be more mixed. So, Bob,
Speaker 1: going forward, what is your expectation in terms of what
Speaker 1: you will change in your portfolio? Because right now you
Speaker 1: are bullish on stocks considering the fact that we're not
Speaker 1: going to get a recession. However, is there some scenario
Speaker 1: that you see as potentially likely that could change that view? So, so,
Speaker 1: the mainline story is that cyclicals and value are cheap
Speaker 1: and have some tailwind relative to growth and momentum, and
Speaker 1: high p e stocks and if inflation interest rates creep higher,
Speaker 1: you know what part of the market struggles with that.
Speaker 1: That's the high high pet side. What we get in
Speaker 1: the way of that is we saw problems that the
Speaker 1: economy was slowing more than people thought that there's unbelievable
Speaker 1: pedal to the metal. Both monetary and fiscal policies is
Speaker 1: not having the effect that's been having. I think that
Speaker 1: will continue to carry the day, Bob. I would guess
Speaker 1: you have seen four times o MG margin contraction, margin pressures.
Speaker 1: We're all gonna die at the sort of the income statement.
Speaker 1: How do you respond to that if you're an investor?
Speaker 1: So so, I think that those margin issues are for
Speaker 1: real toend to be paid attention to, particularly light of
Speaker 1: profit margins. Seemed like quarter after quarter have come in
Speaker 1: better than expected and reached unbelievable heights all time pies.
Speaker 1: That's probably not sustainable in the long run, Tom, And
Speaker 1: therefore I think a long term look at Ernis has
Speaker 1: to have a profit margin picture that's a little below
Speaker 1: where we are today. The worries about these margins into
Speaker 1: this quarter, Bob, I'd love a playbook from you on
Speaker 1: what to buy on weakness as this earning season starts.
Speaker 1: I think that's got to be the focus right now.
Speaker 1: If you want an investor committee and you're thinking about
Speaker 1: these issues, you're looking around and saying, well, everyone's till
Speaker 1: about the same thing right now. Where do I want
Speaker 1: to fight this story? How do I want to fight
Speaker 1: this story into earning season? Bob? How would you like
Speaker 1: to do that? So into weakness the first part of
Speaker 1: your question, I want to own what I think is
Speaker 1: gonna work best over the next six to twelve months,
Speaker 1: and that is cyclical value, downtap international I think they're
Speaker 1: the places where the puck is going. So financial stocks,
Speaker 1: for example, you've seen them as interest rates have crept higher,
Speaker 1: do a lot better than you might think in the
Speaker 1: decline we've seen in the market from its highs of
Speaker 1: just a few weeks ago. So that's the kind of
Speaker 1: area I want to jump onto. I have a lot
Speaker 1: less valuation risk there than I do in some of
Speaker 1: the higher pe growth stocks have done so so well
Speaker 1: for it seems like forever, Bob, It's been forever. It's
Speaker 1: been too long. It always feels like it's too long.
Speaker 1: It's quite a catch up set as always, Bob, Dell
Speaker 1: Cross Mount Global Investment c I YEA. What it really
Speaker 1: is here early October is the linkage of an economic
Speaker 1: belief into an equity or stock market execution on the economics,
Speaker 1: Bruce Casmin joins with JP Morgan or chief Economists and
Speaker 1: a head of global economic research. Away from stagflation, Bruce Kasmin,
Speaker 1: what does the JP Morgan call on economic growth forward
Speaker 1: a year? So? I think the broad pictures that we
Speaker 1: continue to get the benefits of vaccinations proving effective, of
Speaker 1: the virus becoming less of an economic factor, growth rotates
Speaker 1: away from the US, and we see better growth in
Speaker 1: emerging markets over the next year. But growth is pretty solid. However,
Speaker 1: as you were noting, we have a threat right now
Speaker 1: that growth is decelerating in the US, inflation is moving up.
Speaker 1: There's important drags here that we have to be right.
Speaker 1: We get over with still pretty solid growth over the
Speaker 1: next few months. I think all of our listeners and
Speaker 1: viewers can be confused about a fairly optimistic economic outlook
Speaker 1: uh from JP Morrigan, But my go Faroli's potential GDP,
Speaker 1: which is much lower, but just up against your arguably
Speaker 1: top of street optimism on equities from Michael Faroli to
Speaker 1: Lacos Bougies. I mean, are those two views linked well.
Speaker 1: I think in the near term, the basic point is
Speaker 1: we still have an enormous amount of slack in the
Speaker 1: U S economy and the global economy. We can grow
Speaker 1: even with what we still believe is a relatively weak
Speaker 1: supply side and one that might have gotten earth by
Speaker 1: the pandemic. I think the question, in the more broad
Speaker 1: sense and for the equity market, is not so much
Speaker 1: about the pace of growth but the sustainability of growth.
Speaker 1: And on that front, we are very optimistic that we're
Speaker 1: coming into this expansion with healthy balance sheets, supportive policy UM,
Speaker 1: and that the vaccine still creates an opportunity for a
Speaker 1: lot of pent up demands. So potential growth is low.
Speaker 1: There's a drag that's hitting us now, but there's a
Speaker 1: good opportunity here for having an expansion that is both
Speaker 1: sustainable and modestly positive in terms of delivering on the
Speaker 1: Fed's goal of raising inflation. Bruce, how much is your
Speaker 1: view predicated on supply chain disruptions getting resolved pretty quickly? Um.
Speaker 1: I don't think we should expect them to get resolved quickly,
Speaker 1: but I think we're very much dependent on them starting
Speaker 1: to moderate. The pressures are a big drag on growth
Speaker 1: right now. We should we should recognize that. And I
Speaker 1: think what's key in our forecast is that we see
Speaker 1: those pressures a bait. We see some of the inflation
Speaker 1: begin to come off. Here, purchasing power lifts and goods
Speaker 1: get moved around the world more easily. But this is
Speaker 1: going to take a while, probably six to nine months
Speaker 1: at least, before we see them the problems start to
Speaker 1: really move away from the scene. So this is what
Speaker 1: I'm really struggling with. Six to nine months and we're
Speaker 1: seeing the likes of Nike, of fed Bath and beyond
Speaker 1: fall dramatically after reporting their expectations for slower sales or
Speaker 1: higher margin pressures due to some of these supply chain disruptions.
Speaker 1: How can you still be optimistic, not only from an
Speaker 1: economic perspective, but a corporate health perspective when their faith
Speaker 1: seeing these sort of unsold items that cannot be acquired
Speaker 1: simply because of these disruptions. Well, I think the underlying
Speaker 1: story is that this is a drag. It's a drag
Speaker 1: which has continued to get bigger. It's a problem not
Speaker 1: just for consumer purchasing power, in terms of price increases,
Speaker 1: but for the corporate bottom line. But that there's still
Speaker 1: this broad story. I mean, we've been downgrading global growth
Speaker 1: quite sharply in the last few months on a result
Speaker 1: of this. We still have global growth running close to
Speaker 1: twice its potential pace in the second half of the year.
Speaker 1: So part of what's going on here is the pressure
Speaker 1: that's coming as we're starting to reopen economies. We think
Speaker 1: that's going to continue. So you have a balance here
Speaker 1: pressure on prices, drags from supply chain issues, but still
Speaker 1: strong global demand. And you know, the question is do
Speaker 1: we have it right that says the U s economy
Speaker 1: is not gonna do as well as we might have thought,
Speaker 1: but could still grow three to four percent here over
Speaker 1: the next year, that the global economy is actually gonna
Speaker 1: do better than that because a lot of these countries
Speaker 1: really lag behind. In the US, I think importantly China
Speaker 1: has to deliver on getting its growth back on course
Speaker 1: after having stumbled somewhat in the third quarter. And I
Speaker 1: don't want you to make a taibot called to four digits.
Speaker 1: That's not your remit at JP Morgan, But I do
Speaker 1: want you to talk about a broader, strong dollar resilient
Speaker 1: dollar e M. Fear that is out there. Do we
Speaker 1: underestimate the resiliency of particularly Asia? E M. Giving your
Speaker 1: house economic call? Well, I think in Asia there's two
Speaker 1: forces that work right now. One is the China story,
Speaker 1: where there's been a very sharp slowing policy driven, and
Speaker 1: we have to be right that policy is going to
Speaker 1: calibrate to bring things back up. The other story, which
Speaker 1: I think is just starting to come into view, is
Speaker 1: that we are finally seeing vaccination rates up, We're starting
Speaker 1: to see restrictions come down, and Asia is going to
Speaker 1: be a pretty decent source of demand here. And I
Speaker 1: include Japan and include the emerging markets in Asia as
Speaker 1: as part of that story. In that context, if we
Speaker 1: get the kind of growth we're looking forward Asia, I
Speaker 1: think the even with the FED moving to tapering, we're
Speaker 1: not going to see the dollar move materially higher here
Speaker 1: to move to Washington, Bruce Kasman, if we see some
Speaker 1: form of lessening or failure of these two bills by
Speaker 1: the Democrats in Congress, what does that do to the
Speaker 1: fiscal impulse to this nation? So it is important that
Speaker 1: we are right in terms of our macro abuse, that
Speaker 1: we get additional fiscal stimulus, and we're looking for something
Speaker 1: that adds roughly one percent to GDP next year from
Speaker 1: fiscal support. If we don't get that, that's obviously a
Speaker 1: drag on growth. And then you put war weight on
Speaker 1: the tension that we have in the macro picture between
Speaker 1: significant fading supports from this year's stimulus with the fact
Speaker 1: that the household sector has built up an enormous amount
Speaker 1: of excess savings. It hasn't spent the stimulus that came
Speaker 1: in twenty and twenty one, and to think about how
Speaker 1: much of that actually is a cushion. I wouldn't want
Speaker 1: to depend on that in my macro forecast. We are
Speaker 1: looking for this additional stimulus, but certainly that would be
Speaker 1: needed if we're going to continue to grow at the
Speaker 1: pace we're expecting if we don't get that stimulus. US
Speaker 1: you've been doing this for decades, you've been in this industry.
Speaker 1: You see the amount of uncertainty that is here among
Speaker 1: your colleagues. You even talk about the range of possible
Speaker 1: outcomes for a whole host of different areas, whether it's
Speaker 1: the policy response in China, the policy responds down in Washington,
Speaker 1: d C. With respect to spending, whether we see supply
Speaker 1: chain disruptions abait. Have you ever seen this amount of
Speaker 1: uncertainty in your economic forecasts? For sure? I mean, I
Speaker 1: think one thing we should remember is there's a difference
Speaker 1: between being an unprecedented times which this is really unprecedented,
Speaker 1: and the degree of uncertainty. I don't see a particularly
Speaker 1: significant risk of the recession in the next twelve to
Speaker 1: eight months. I think the global economy is on reasonably
Speaker 1: good footing. I think there's enormous range of outcomes we
Speaker 1: can talk about on inflation, uh, in terms of growth,
Speaker 1: but I don't think this is a particularly scary time
Speaker 1: in terms of macroeconomics. And I do think that one
Speaker 1: reason we always see a lot of uncertainty going forward
Speaker 1: is because everything that has happened in the past has
Speaker 1: actually happened. So do you think that traders are using
Speaker 1: economic projections correctly? When they start saying they keep getting
Speaker 1: it wrong, how can we trust them? And they start
Speaker 1: looking at the granularity is rather than the overarching point
Speaker 1: that you just made, We're not going to have a
Speaker 1: recession in the near term. One thing we can be
Speaker 1: sure is my economic forecast is going to be wrong.
Speaker 1: I mean, that's just the nature right now, will be wrong.
Speaker 1: But I don't actually see when I look at the
Speaker 1: way financial markets of pricing an enormous amount of uncertainty
Speaker 1: relative to normal times, risk premium and bond markets, premium
Speaker 1: in equity markets are not unduly high here. Um. I
Speaker 1: do think there is a lot of uncertainty. The range
Speaker 1: of outcomes is wide, and we've gotten certainly more focused
Speaker 1: on the possibility for disappointments on growth going into the
Speaker 1: fourth quarder. But again, I think we're still well balanced
Speaker 1: here for a solid recovery. Whether we get the recovery want,
Speaker 1: whether we control inflation. These are all important questions. What
Speaker 1: policymakers deliver or not are big questions. But I don't
Speaker 1: think we're in an unusually large range of uncertainty relative
Speaker 1: to a number of periods in the past, where you know,
Speaker 1: we were at the brink of recession, financial crisis, other
Speaker 1: things that could have hit us. We're enormous uncertainty early
Speaker 1: last year when the pandemic first hit, that was far
Speaker 1: more hard to to figure out than where we are
Speaker 1: right now. Bruce fantastic cancer wits to hear from you
Speaker 1: economist and had of global economic research. This is a
Speaker 1: joy to talk of the moment in Washington, and also
Speaker 1: the larger picture is well. Wendy Schiller is it Brown University?
Speaker 1: She just director of the Tobin Center of American po
Speaker 1: Politics and Policy. She also has the most readable seven
Speaker 1: hundred four page textbook, Treatment on America in a Democracy
Speaker 1: under Threat. John I. Camp convey to you the importance
Speaker 1: of Gateways to Democracy as an instructing guide for so
Speaker 1: many America. Let's get some instructions right now, Tom with Wendy. Wendy,
Speaker 1: great to catch up with you. We keep talking about
Speaker 1: these numbers one point five, three point five. Bernie sand
Speaker 1: is talking about something north of that. Senator sand is
Speaker 1: looking for six seven three point five in a minimum. Wendy,
Speaker 1: how many people in American right now do you think
Speaker 1: know what's in this offering? At three point five? It's
Speaker 1: on the table, Johnathan as close to zero people in
Speaker 1: American know what's in this bill. It's been I think
Speaker 1: political malpractice, and strategically, you know, Ill advised the Democrats
Speaker 1: to keep talking about the number and fighting about the
Speaker 1: number and not talking about what's in it for most Americans,
Speaker 1: especially since they're talking about a tax hike. On what
Speaker 1: they call upper income voters, many of whom live in
Speaker 1: the suburbs that voted for the Democrats and voted for
Speaker 1: the Democrats at least you know in some part in
Speaker 1: so if you're gonna go back in and staid reelect
Speaker 1: us again, but we're gonna raise your taxes and in
Speaker 1: fact we're spending it on stuff, but we can't even
Speaker 1: identify simply in thirty seconds or less. That is a
Speaker 1: very bad political calculation, which is stunning given the experience
Speaker 1: you've got between Pelosi, Schumer, and Biden. Can we talk
Speaker 1: about whose fault this is right now, Wendy, who is
Speaker 1: at fault? Maybe a couple of names there, who's at
Speaker 1: fault at the moment for that, Well, I think the
Speaker 1: people are just named a certain thing. President Biden should
Speaker 1: have been talking about what's in this reconciliation package, not
Speaker 1: just the reconciliation package. Certainly, Schumer, it's interesting, sure is
Speaker 1: walking into a tight line because he's up for re
Speaker 1: election in two and you never know, New York politics
Speaker 1: is changing rapidly. Uh. You know, he looks in good shape,
Speaker 1: he's gonna raise a lot of money, but you never know.
Speaker 1: So I think that's a lot of pressure on him
Speaker 1: not to sort of throw out all the progressive initiatives.
Speaker 1: But listen, you're doing features on investments in come and
Speaker 1: EISI gonna make electric cars for example. That infrastructure bill,
Speaker 1: either Reconciliation or the infrastructure bill, we're not quite sure
Speaker 1: has some money. And for public charging stations for example,
Speaker 1: for electric cars, where are people going to charge their cars?
Speaker 1: And what are they gonna pay for that electricity? Nobody knows.
Speaker 1: But if you're talking about going green and you're talking
Speaker 1: about electric cars for GM, then the government saying, hey,
Speaker 1: we're going to row out a free charging station for you,
Speaker 1: that's something Americans can digest. It's something they think, Oh,
Speaker 1: I drive to work, particularly in those districts that are
Speaker 1: competitive in the suburbs, and now I can drive an
Speaker 1: electric car and not worry about charging it. Wendy, are simple?
Speaker 1: I did that in lesson to seconds. It's the debate.
Speaker 1: Can't do that? It's a mystery. Well, and this really
Speaker 1: is the question down in Washington, d C. Is this
Speaker 1: the debate over these details or is it this larger
Speaker 1: philosophical point of a headline number and a view forward
Speaker 1: for the Democratic Party as the new UH the new
Speaker 1: Party of a new deal. I think I think that's
Speaker 1: been lost thus far. I think it got You know,
Speaker 1: they did a lot of good things in the COVID
Speaker 1: relief package. They got a lot of people vaccinated, They
Speaker 1: did another stimulus check. The economy seems to rebound now,
Speaker 1: the stock market and debt ceiling gets a little complicated
Speaker 1: this time of year. Of course, we expect Republicans, ultimately,
Speaker 1: as they always do, will go along with the debt
Speaker 1: ceiling or allow the Democrats to raise it. It'll just
Speaker 1: be brakemanship for a while, and that will rattle people
Speaker 1: a little bit. But if you're a suburban voter who
Speaker 1: likes the Democratic Party and you're finding your fur own
Speaker 1: case going down this month, that they're fighting about numbers
Speaker 1: and that you don't know what's in it for you,
Speaker 1: but a potential tax cut tax increase is on the horizon,
Speaker 1: you're getting uncomfortable. Well, and this is not the right
Speaker 1: time for Democrats to have people get uncomfortable with their agenda, Wendy.
Speaker 1: If they are committing political malpractice and not messaging this correctly,
Speaker 1: are they on the brink of political malpractice when it
Speaker 1: comes to the debt ceiling? When it comes to the
Speaker 1: idea of allowing the United States to accidentally default simply
Speaker 1: because they can't get the timing right. Well, I don't
Speaker 1: think they're gonna let that happen. I think they're gonna
Speaker 1: do whatever they can and to make sure that that happens.
Speaker 1: And I think there's enough support for Republicans, for example,
Speaker 1: Becau going into among Wall Street, among corporations, among businesses
Speaker 1: who don't like instability, that the pressure will be fairly
Speaker 1: significant the Republicans not to get in the way. But
Speaker 1: they're just gonna watch the Democrats fumble until the very
Speaker 1: last minute and then come aboard. That's what I think
Speaker 1: is going to happen. But Americans don't like the idea
Speaker 1: of raising taxes, spending lots of money, and having a
Speaker 1: skyrocketing debt or deficit. Even if they don't quite understand
Speaker 1: the relationship, they know that they don't want that to
Speaker 1: be our our constant situation. And I want to go
Speaker 1: to your academics, and I want to dovetailed into Greg
Speaker 1: Grant and the yells great where yells of school down
Speaker 1: the coast, Wendy, if you're not aware of that, And
Speaker 1: I want to talk about the threat of democracy that's
Speaker 1: out there in the zeitgeist and the new Jacksonian American
Speaker 1: with former President Trump, or if he doesn't run with
Speaker 1: the new Republicans, what is the flavor of our new
Speaker 1: Jacksonian America for our democracy? Tom That's a great question,
Speaker 1: But there's an inherent contradiction there, because what Andrew Jackson
Speaker 1: did that was so brilliant was expand the suffrage, expand
Speaker 1: the electorate. He pushed state legislatures to allow more people
Speaker 1: to vote. He got state legislators invest in the idea
Speaker 1: of state based parties political parties and sending the nomination
Speaker 1: a process out to the nation, making it more national
Speaker 1: because the elites in Washington had blocked him. So that's
Speaker 1: expanding the suffrage, expanding the vote, having more people participate.
Speaker 1: The Republican response, I'm not sure I call it a
Speaker 1: Trump response because he's out of office. But the Republican
Speaker 1: response now is to limit the suffrage, to try to
Speaker 1: make it harder to vote, to try to limit the
Speaker 1: number of people can vote. That's not Andrew Jackson. He
Speaker 1: didn't see it that way. He said, get everybody in
Speaker 1: there and then persuade them that you're the guy. So
Speaker 1: I think that Trump will ride the codetails of what
Speaker 1: the Republicans are doing to some extent. But his motto
Speaker 1: and what he did in twenty sixteen was bring more
Speaker 1: people who had not voted or hadn't voted recently into
Speaker 1: the electorate. And that's the Jackson model. Wendy, thank you,
Speaker 1: it's been too long. Come back soon. That of Brown
Speaker 1: University right now for Lisa Bramits and I, it's a
Speaker 1: great joy in radio and television to bring in Candice Browning. Yes,
Speaker 1: she's had a global research at a Bank of America,
Speaker 1: but very much like Tobias Levkovich of City Group, her
Speaker 1: strength is she started out in the trenches. If you
Speaker 1: are seventeen years in a row the airline analyst of
Speaker 1: the world, and if you do securities and analyst analysis,
Speaker 1: I should say, like Candice Browning two years ago, that
Speaker 1: is a research foundation. And we're thrilled she could join
Speaker 1: us today. Cannice, you have a new report out that's
Speaker 1: on bitcoin. I don't even know, Candid. Did Brian moyne
Speaker 1: in let you put the doge in your crypto report? Well,
Speaker 1: thank you Tom so much for having me on the
Speaker 1: show today. Actually, what we're doing today is not really
Speaker 1: so much about bitcoin. Bitcoin is just a part of it.
Speaker 1: What we did today is we are the first major
Speaker 1: bank on the South Side to launch a strategist and
Speaker 1: his job is to be the crypto and digital assets.
Speaker 1: So yeah, and lucky him. Uh So. The reason we
Speaker 1: did it is because it's such a huge growing market.
Speaker 1: So if you look at it today, digital assets are
Speaker 1: about two trillion dollars, Bitcoin is about nine hundred billion
Speaker 1: of the two trillions, so it's big and there's a
Speaker 1: ton of investor interest in the space. It's growing. So
Speaker 1: if you look at the number of participants, you know,
Speaker 1: last year there were about sixty six million people participating
Speaker 1: in this market. Today it's over two hundred and twenty
Speaker 1: million people who are participating. And if you look at
Speaker 1: the number of UM corporates mentioning crypto on their earnings calls,
Speaker 1: that's gone from about seven team last year to about
Speaker 1: a hundred and forty seven in the most recent quarters.
Speaker 1: So it's really going kind of mainstream and people are
Speaker 1: getting interested in it, which brings us to the last
Speaker 1: reason Tom why we decided to launch this, and that's
Speaker 1: really and this is the most important word I think
Speaker 1: is ecosystem you know, this isn't just bitcoin anymore. This
Speaker 1: is digital assets and it's creating a whole ecosystem of
Speaker 1: new companies and new opportunities and new applications. And you
Speaker 1: can see that in the fact that Venture capital, which
Speaker 1: invested about five and a half billion dollars into digital
Speaker 1: assets last year year to date has already invested seventeen billion.
Speaker 1: So this is growing and its mainstream and it's not
Speaker 1: just bitcoin. You have a great perspective, Candice, because you
Speaker 1: deal with both retail and corporate clients and institutional investors.
Speaker 1: How much is the interest being driven by retail investors
Speaker 1: versus the institutional players. You know, that's a great question, Lisa,
Speaker 1: because there is an obviously an enormous amount of retail
Speaker 1: interest in this space. People want to learn about it
Speaker 1: in our retail system, but there's a huge growing institutional
Speaker 1: interest in this in this space um as well. And
Speaker 1: so we're launching this for all of our customers and really,
Speaker 1: you know, we're launching it more, as I said, about
Speaker 1: the ecosystem, and more to learn about this really potentially
Speaker 1: revolutionary technology. And that's why we put a former tech
Speaker 1: analyst in this spot. The analyst Alkes Shaw has over
Speaker 1: twenty years experience as a tech analyst, and I really
Speaker 1: think this is about, you know, whether we want to
Speaker 1: call it internet to dot oh or whatever we want
Speaker 1: to call it, It's all about this revolutionary new technology
Speaker 1: and it's possibilities. But candis this is actually super important,
Speaker 1: the idea of digital assets not necessarily being a sort
Speaker 1: of asset class like commodity. Is it a currency or
Speaker 1: is this an issue of transmitting money beyond the borders,
Speaker 1: basically removing some of the frictions that have traditionally been there,
Speaker 1: Which do you see as the primal driver of the
Speaker 1: research here and frankly of institutional interest. Yeah, you know,
Speaker 1: it's it's a great question. And I do think that
Speaker 1: over time this can become its own asset class um
Speaker 1: and I think its own sector, just like the Internet.
Speaker 1: And the point is, with this new revolutionary technology, you
Speaker 1: can really address a lot of the issues that you
Speaker 1: brought up. You can bank the one point seven billion
Speaker 1: dollars one point seven billion people who are currently unbanked.
Speaker 1: You can do that with much less friction. You can
Speaker 1: create um assets such as n f t s that
Speaker 1: you can sell that will have royalties associated with them
Speaker 1: without lawyers. So those are just examples of like all
Speaker 1: different kinds of things you can do technology, and yes
Speaker 1: it can also be money, it can be, but it
Speaker 1: can be so many other things as well. Naturally the
Speaker 1: point we're almost out of time, I want to go
Speaker 1: to Raphael Hour at the Bank of International Settlements in
Speaker 1: Geneva has got absolutely pristine research on the foundations of bitcoin,
Speaker 1: the foundations of digital currency, the foundations of crypto, and
Speaker 1: I want to fold it over to our Your tech
Speaker 1: analyst is going to have to look at the regulation
Speaker 1: and what you call the wild West of crypto. I mean,
Speaker 1: what what do you do with Gary Ginstler and the
Speaker 1: rest when the police show up to say enough, Well,
Speaker 1: you've put your finger on something that I think is
Speaker 1: one of the greatest risks to crypto. And you've already
Speaker 1: seen you know, China and India outlaw bitcoin trading. But
Speaker 1: on the other hand, you know, Gary Ginstler has also
Speaker 1: said that he's eas this revolutionary new technology as offering
Speaker 1: a ton of wonderful opportunities. And you know the FED
Speaker 1: is studying um central bank digital currencies. So yes, regulation
Speaker 1: is a huge potential risk in this space. But you
Speaker 1: could also argue that once there's a regulatory roadmap in place,
Speaker 1: it will offer enormous opportunities as people conform to that. Okay,
Speaker 1: I have to leave it there. Candice Browning, congratulations and
Speaker 1: driving forward the discussion on crypto with a Bank of America,
Speaker 1: Course America, and of course their head of a Global research.
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