Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Week,
Speaker 1: insight from the reporters and editors that bring you America's
Speaker 1: most trusted business magazine, plus global business, finance and tech
Speaker 1: news as it happens. Bloomberg Business Week with Carol Masser
Speaker 1: and Tim Stenebeck on Bloomberg Radio.
Speaker 2: It is Bloomberg Business Week. Donald Trump's moved to impost
Speaker 2: tariffs on major US trading partners, sparking a selloff in crypto.
Speaker 2: The index of smaller tokens at one point today was
Speaker 2: on track for the steepest two day route in almost
Speaker 2: three years. Sometimes hard to follow this stuff, given that
Speaker 2: they trade twenty four to seven Carol.
Speaker 3: Exactly did you see when the headlines today were kind
Speaker 3: of all over the plane?
Speaker 4: Did you see what happened with Ether? Though?
Speaker 3: No, tell me what?
Speaker 2: Okay, the second biggest crypto. It briefly plunged as much
Speaker 2: as twenty seven percent before pairing losses. If I go
Speaker 2: to COYP, go on the Bloomberg terminal, I can see
Speaker 2: what it's doing right now now down about seven percent.
Speaker 3: I got to say, we follow crypto a lot. You
Speaker 3: do you do a show on Bloomberg Television. That's all
Speaker 3: about the crypto market. I mean they move around a lot,
Speaker 3: but the moves that we saw today pretty wild, even
Speaker 3: by crypto standards.
Speaker 2: Kenna Rodd is the co founder and chief experience officer
Speaker 2: of solidust Labs. It calls itself the quote first crypto
Speaker 2: native security and compliance of tailored for digital assets. The
Speaker 2: company says it monitors more than eight trillion events each
Speaker 2: day to help make crypto safer.
Speaker 4: Welcome back to business, We get to see you.
Speaker 1: It's a pleasure.
Speaker 5: Thanks for having me. I thought I talked too much
Speaker 5: last time.
Speaker 4: Okay, you're welcome back anytime.
Speaker 2: I do want to talk about the price action though,
Speaker 2: a little bit, because even for the even in the
Speaker 2: standards of crypto, a twenty seven percent, can I call
Speaker 2: it a flash crash?
Speaker 3: Like?
Speaker 4: What was that?
Speaker 5: Well, dramatic response to dramatic events. I'd say in an
Speaker 5: asset class that he's I think is really important to
Speaker 5: remind her.
Speaker 2: Okay, but hold on, we knew tariffs would happen. The
Speaker 2: President talked about that a lot on the campaign trail.
Speaker 2: So was it really dramatic?
Speaker 3: Right?
Speaker 5: Well, I think sometimes you know something happens, but we
Speaker 5: read something so unprecedented, the impact can still be more dramatic.
Speaker 5: I think it's an important reminder that as much as
Speaker 5: digital assets, Bitcoin, ethereum and the rest have matured, there's
Speaker 5: still nascent assets that can move very very fast.
Speaker 4: You know, I'm a guy who's been in this industry.
Speaker 5: For seven years, so I've seen them drop more and
Speaker 5: rise less in shorter periods of time.
Speaker 2: So are you concerned with the rising correlation of this
Speaker 2: asset class with tax stocks, especially bitcoin?
Speaker 5: So I wouldn't say I'm concerned. I think that in
Speaker 5: a lot of ways, it's demonstrates the maturity and the adoption, right.
Speaker 5: I mean, I think, and we'll talk a lot about
Speaker 5: regulation today, we're seeing a broad motion where digital assets
Speaker 5: are becoming more a more integral part of other financial markets.
Speaker 4: So I think there's a.
Speaker 5: Lot of positives to it. And again I think that
Speaker 5: you've seen cases where they correlated, You've seen cases where
Speaker 5: they didn't. You know, there are a lot of explanations
Speaker 5: in each case. But I think they're still young assets
Speaker 5: and it's really hard to predict.
Speaker 3: Yeah, you know, I think there's one point that we
Speaker 3: thought it was going to be like a safe haven.
Speaker 3: Perhaps it didn't kind of work out that way today.
Speaker 3: So I mean I still I mean Tim and I
Speaker 3: talked about this a lot, like I still try to
Speaker 3: understand what we should think about what is crypto.
Speaker 5: Right, Well, I think a safe haven is a cryptocurrency.
Speaker 5: I mean, a safe haven is a dangerous term, I
Speaker 5: think when it comes to capital markets, because nothing is
Speaker 5: one hundred percent safe. I think oftentimes you know, obviously
Speaker 5: beatquin is perceived as a hedge, specifically for inflation. So
Speaker 5: the safe haven element I think is true there because
Speaker 5: regardless whether the price is going up or down, it
Speaker 5: cannot be inflated by a government. But ultimately, again, as
Speaker 5: Wall Street as dramatically increased it's involvement and is constantly
Speaker 5: becoming more involved in digital assets, I think it's natural
Speaker 5: to also assume that there will be some cases where
Speaker 5: there's more correlation.
Speaker 3: Well, if governments get more involved, we have now a
Speaker 3: president in the White House who certainly seems much more
Speaker 3: interested in it in an upbeat way. So does that
Speaker 3: also then make it maybe more susceptible to the factors
Speaker 3: that affect traditional if you will, or boring out you know,
Speaker 3: our traditional boring assets that are out there, well, I'd.
Speaker 5: Say that when you look at Washington these days, and
Speaker 5: I visited twice in the past two weeks, met met
Speaker 5: with more than twenty elected officials and their teams. There's
Speaker 5: a broad motion to figure out the right way to
Speaker 5: regulate crypto and essentially, you know, bring it closer to
Speaker 5: the family of other financial assets. So yes, i'd say
Speaker 5: it's one hundred percent part of the same momentum. I
Speaker 5: don't think it means that it will behave exactly like
Speaker 5: any like other asset classes in the long run.
Speaker 3: So wait, so should we have in our investment pie?
Speaker 3: So how is it You've got stocks, you've got bonds,
Speaker 3: you've got cash, You've got is it alternative assets where
Speaker 3: crypto falls into and it's a little sliver.
Speaker 5: Well, I think that's the case for a lot of
Speaker 5: portfolios today.
Speaker 3: But how are governments thinking about it? Well, I think
Speaker 3: has our government after the meetings you've had.
Speaker 5: So I think the governments generally see it first and
Speaker 5: foremost as an innovative power that can push you know,
Speaker 5: the financial industry forward. So you know, I think a
Speaker 5: lot of the support for the assets are just because
Speaker 5: they're innovative and they're pushing on infrastructure and efficiencies and
Speaker 5: a lot of things that haven't been changing. Find it's
Speaker 5: for a very long time. In terms of I think
Speaker 5: that that will ultimately lead to digital assets crypto just
Speaker 5: being considered another asset class. So that again has its nuances,
Speaker 5: but you know, is an integral part of most portfolios
Speaker 5: depending on your risk appetites, etc.
Speaker 2: Were you down in Washington, D C. For the inauguration
Speaker 2: any of the parties associated with it.
Speaker 5: Yes, I wasn't to the inauguration, but I've been with
Speaker 5: a lot of the parties and conversations that ensued.
Speaker 2: Yes, So I wonder what people talked about in relation
Speaker 2: to the Trump and Millennia coins, because there was so
Speaker 2: much news just ahead of the inauguration when these two
Speaker 2: we call the meme coins here at Bloomberg when they
Speaker 2: came out, and there was some also some reporting that
Speaker 2: I read about people within the crypto community not necessarily
Speaker 2: viewing it as a positive development within the industry.
Speaker 4: How do you view it?
Speaker 5: I think that there's a lot of there's a lot
Speaker 5: of ambivalence, there are views on both sides.
Speaker 4: How do you view it?
Speaker 5: So, I personally have not invested in the coin. I'm
Speaker 5: generally not particularly interested in meme coins. I think that
Speaker 5: the people who would defend it say that ultimately it's
Speaker 5: like a baseball card. Some people want to collect it
Speaker 5: now the Trump was inaugurated. There are a lot in
Speaker 5: the industry, and I think there's some truth to it
Speaker 5: who also sees it as something that the values or
Speaker 5: diminishes a little bit the credibility of the industry, And
Speaker 5: a lot of people don't appreciate it.
Speaker 2: Just to be in the position of somebody listening or
Speaker 2: watching this right now, they might say, yes, but with
Speaker 2: a baseball card, I can hold it right with this,
Speaker 2: What am I actually buying when I buy the official
Speaker 2: Trump meme coin.
Speaker 5: Well, you're buying an immutable proof that you're holding a
Speaker 5: digital asset. So in a lot of ways, it's harder
Speaker 5: to make disappear than a baseball card. I can't imagine
Speaker 5: how many baseball cards, well, in my case, soccer cards,
Speaker 5: I have in places where I'll never find them again.
Speaker 4: So there are also advantages to it.
Speaker 5: Again, the whole world is becoming more digital, you know,
Speaker 5: And I think there are a lot of people for
Speaker 5: whom that's not really a consideration, but for people for
Speaker 5: whom it is a consideration, don't buy it. I do
Speaker 5: think it is important to say, just to co your
Speaker 5: point that you know, there are people and many have
Speaker 5: been vocal about the fact that it's not necessarily appreciated because.
Speaker 4: We take our industry very seriously.
Speaker 5: That being said, the mean tooken world is a huge
Speaker 5: part of the industry and a lot of people really
Speaker 5: enjoy it. It's one where you have to take into
Speaker 5: consideration that those assets don't as we have the same
Speaker 5: kind of fundamentals you'd see with other assets, and you've
Speaker 5: got to be careful and do your researchers. There are
Speaker 5: a lot of scams out there as well.
Speaker 3: Yeah, I think no. The Bloomberg rout about that, right,
Speaker 3: and the concern of the criticism was that it wasn't
Speaker 3: taking it seriously, you know, in terms of the digital space. Hey,
Speaker 3: one thing I want to ask you is that the
Speaker 3: presidents signed a measure to create a sovereign wealth fund.
Speaker 3: Would it be a dangerous measure to include cryptocurrencies and
Speaker 3: a sovereign wealth fund here in the United States if
Speaker 3: we our government.
Speaker 5: Creates one, every asset has its dangers. Also in the
Speaker 5: Executive ordered listed you know that designed last week specifically
Speaker 5: on creating a crypto Task Force working group that includes
Speaker 5: also a score of considering you know, a bitcoin reserve.
Speaker 5: So there are risks, so there are also obviously a
Speaker 5: lot of opportunities. But I think that at this point
Speaker 5: you have you have endowment funds, you have pension funds
Speaker 5: that think it's important enough to include you know, digitalists
Speaker 5: instir portfolio. I think it's just natural that the US
Speaker 5: government might consider that as well. You know, again, it's
Speaker 5: an asset that.
Speaker 3: Taxpayer right ultimately is on the line or feels the
Speaker 3: losses correct, right, yes, of course, in a sovereign wealth fund, yes,
Speaker 3: or the citizens well.
Speaker 5: I mean yes, but they're also filled the profits, right,
Speaker 5: which is part of the idea of a sovereign wealth fund.
Speaker 5: I think that, you know, thinking long term, to not
Speaker 5: at least consider digital assets as part of sovereign wealth
Speaker 5: fund would be silly because they're very They're the most
Speaker 5: successful assets in terms of growth over.
Speaker 4: The past decade, I believe.
Speaker 5: But that doesn't mean that they should be invested in blindly,
Speaker 5: not by anyone, and definitely not by the government. So
Speaker 5: it should be done.
Speaker 2: With care, by the way, the official Trump according to
Speaker 2: coin market Cap has a market cap right now of
Speaker 2: three point seven billion dollars, down from close to fifteen
Speaker 2: billion dollars. Ken, thank you so much for joining us.
Speaker 2: Kenna Rod, co founder and Chief Experience Officer of Solidus Labs.
Speaker 2: Up next Edelman CEO Richard Edelman. It's just been a
Speaker 2: few weeks, exactly two.
Speaker 4: Weeks, Carol.
Speaker 3: Yeah, busy two weeks since Solal.
Speaker 2: Trump was inaugurated. A lot has happened. Here's just a
Speaker 2: few things. A slew of executive orders. What is looking
Speaker 2: like it's turning into a trade war? Elon Musk making
Speaker 2: some big changes as part of his work on what
Speaker 2: he calls government efficiency, some very tense confirmation hearings and
Speaker 2: upheaval in the world of AI and more. And again
Speaker 2: it's only been two weeks.
Speaker 3: Yeah, only early February, all right, So we wanted to
Speaker 3: know what CEOs are thinking, and that's why we have
Speaker 3: Richard Edelman with us. He's got a great, big macro
Speaker 3: view on all that is happening and what it means
Speaker 3: for the c suites around the globe. He Richard is
Speaker 3: chief executive officer of the global communications firm Edelman, and
Speaker 3: he joins us here in studio he's just back from Davos.
Speaker 3: Let's start there, because what a great start ar point.
Speaker 3: And I've been talking to and Tim and I have
Speaker 3: been with folks that were in Davos, and it seemed
Speaker 3: like everybody wanted to talk about President Trump or artificial intelligence.
Speaker 3: But tell us your perspective.
Speaker 6: So I think the American CEOs were quite bullish. They felt,
Speaker 6: you know, deregulation, lower taxes, a chance to you know,
Speaker 6: increase investment. Meanwhile, the European CEOs felt deeply depressed and
Speaker 6: they were nervous about trade, they were nervous about regulation.
Speaker 6: I heard one CEO tell me he has thirty five
Speaker 6: thousand data points to give to the EU on environmental
Speaker 6: regulation every year, and that's a huge burden. So also,
Speaker 6: I would say it was a very business like Davos.
Speaker 6: You know, other than Trump's last day appearance and Malay
Speaker 6: of Argentina, there were very few government leaders, so it
Speaker 6: was a much more business like Davos.
Speaker 2: It's interesting that you say that you're probably the second
Speaker 2: person to tell us in just a few days that
Speaker 2: the mood of European CEOs was pretty gloomy.
Speaker 6: Well, they're gloomy because I think they feel trapped between
Speaker 6: the US and China. They have big sales in China, cars,
Speaker 6: et cetera. Their energy costs are high, their regulation is high,
Speaker 6: and frankly they're nervous about the German economy, the French economy,
Speaker 6: both of them wobbling along. So they don't have domestic
Speaker 6: demand like the US does.
Speaker 3: So it's interesting, as you know, we navigate from day
Speaker 3: to day, hour to hour the headlines that come out
Speaker 3: of the White House, in the Oval Office, and so
Speaker 3: I am curious, was there a perspective among the global
Speaker 3: CEOs are more importantly the American CEOs, that it's kind
Speaker 3: of a wait and see that we think some of
Speaker 3: it is a lot of talk, and that ultimately, as
Speaker 3: you said, policies will make business sense and they might
Speaker 3: not be as extreme as some of the conversations around
Speaker 3: them are.
Speaker 6: I think no, no, Look, I think our trust barometer
Speaker 6: came out in time for Davos, and the thing that
Speaker 6: was so noteworthy, Carol, is that we see the world
Speaker 6: slipping into grievance, and that's sixty percent of the world's
Speaker 6: moderate or high grievance, and especially in Germany, thirty five
Speaker 6: percent of people highly agrieved. Just before their elections. And
Speaker 6: why is that? It's inflation, It's the sense that you know,
Speaker 6: my family won't be better off in the next generation,
Speaker 6: lack of hope, fear of job loss to AI and
Speaker 6: so I think business has every way to solve this.
Speaker 6: You know, give me a good job, reskill me, have
Speaker 6: affordable products. That's the playbook. And CEOs need to make
Speaker 6: sure that it's about their business.
Speaker 2: Why do you think we see this happening around the world.
Speaker 2: You know, it's not this idea of grievance is not
Speaker 2: particular to one single country or one single region. What's
Speaker 2: Is this a post COVID phenomenon? Is it a rise
Speaker 2: of the cost of living phenomenon? Is it a globalization phenomenon?
Speaker 4: Is all of the above? What is it?
Speaker 6: It's it's absolutely It's like dominoes, And so, you know,
Speaker 6: you start with the mass class divide, and you have
Speaker 6: a battle for truth, and you have this problem of
Speaker 6: COVID five years on, where people mental health and other things,
Speaker 6: and then you have all the geopolitical issues and so
Speaker 6: all of this is a lot, and people feel continuously punched,
Speaker 6: and so I think they used to take it and
Speaker 6: just have fears, and then now they're aggrieved, and they're
Speaker 6: prepared to fight back, and whether it's misinformation or even violence,
Speaker 6: this is what we start to see. And business has
Speaker 6: every reason to be concerned about this because business is
Speaker 6: distrusted by the highly aggrieved. It's different than most because
Speaker 6: business is the most component and most ethical except for
Speaker 6: the highly agrieveed. So business has to try to pull
Speaker 6: people back from this cliff and make people feel as
Speaker 6: if they have good jobs, they can get well paid,
Speaker 6: they will be reskilled and can compete.
Speaker 3: So what's the problem. Is it that workers aren't sharing
Speaker 3: in the profits? I mean, you know, we're in an
Speaker 3: earning season, we see it. I mean, companies are doing well,
Speaker 3: and is it a case that they're not sharing all
Speaker 3: of those with their workers.
Speaker 6: Well, here's an example in Japan. There hasn't been really
Speaker 6: a raise for workers for thirty years, okay, and so
Speaker 6: you get the idea of why people in the lowest
Speaker 6: coretile of income feel deeply aggravated relative to the.
Speaker 3: Higher ing So why aren't CEOs appreciating those workers at
Speaker 3: that level?
Speaker 6: I think that they are in the sense that they
Speaker 6: use them, they put them in jobs. But the truth
Speaker 6: is there's been outsourcing there's been globalization, there's now AI.
Speaker 6: All of this is towards cost and effectiveness, and so
Speaker 6: CEOs are balancing a lot of these factors. But they
Speaker 6: do want employees to work hard and be satisfied, and
Speaker 6: the key to that is pay.
Speaker 2: We saw CEOs two weeks ago stand behind the president
Speaker 2: at the inauguration, some exactly, not all. We saw many
Speaker 2: prominent ones there. In general, we have seen some CEOs
Speaker 2: share their views politically, more so in recent weeks, recent months.
Speaker 4: Then we're sort of accustomed to.
Speaker 2: You said, there's this idea that they're cheering deregulation, they're
Speaker 2: cheering lower taxes, But what about the chaos that's associated
Speaker 2: with the administration thus far.
Speaker 4: Is it a distraction to them?
Speaker 2: Is it what you get with Donald Trump because we
Speaker 2: knew that in the first term, or is it something
Speaker 2: that concerns them because they need to make decisions about
Speaker 2: their businesses in China, in Canada, in Mexico.
Speaker 6: I think CEOs need to argue for agenda items that
Speaker 6: suit their business. So, for example, if trade is a
Speaker 6: key part of your business, you should go out and
Speaker 6: advocate for a free trade and say this is going
Speaker 6: to cause inflation or it's going to make my supply
Speaker 6: chain inefficient or it's actually going to cost jobs in America.
Speaker 6: But also the non American companies need to make the
Speaker 6: case for investing in the US, putting more manufacturing here,
Speaker 6: making sure that it's aligned to the president's agenda.
Speaker 4: It's both.
Speaker 6: But I don't believe that CEO should stick their heads
Speaker 6: up and be very I think they should do their businesses.
Speaker 3: But you know, I want to go back to what
Speaker 3: you said. Sixty one percent globally have a moderate or
Speaker 3: high sense of grievance, which is defined by a belief
Speaker 3: that government and business make their lives harder and serve
Speaker 3: narrow interests, and wealthy people benefit unfairly from the system.
Speaker 3: I'm waiting for like the deluge of emails of like, yeah,
Speaker 3: we got that, Carol, Like that explains politics that are
Speaker 3: going on. But like Richard, how do is it just
Speaker 3: a case of paying workers more. I'm not saying just
Speaker 3: I don't mean that, but I mean, is that the fix?
Speaker 3: Because there are a lot of disillusioned individuals here in
Speaker 3: the United States and around the globe I think just
Speaker 3: feel completely left behind.
Speaker 6: So inflation is corrosive. Got to get inflation under control
Speaker 6: so that people feel as if when they run hard,
Speaker 6: they're not running into the wind. Second, they got to
Speaker 6: feel as if they have a chance for the future.
Speaker 6: Rescaling upskilling core. And then third is pay and continuous
Speaker 6: ability to get to a better place.
Speaker 3: But it seems like such an easy fix. Why then
Speaker 3: aren't we getting there? Like paying workers more? We've had
Speaker 3: guests on talking about a living wage, and then some
Speaker 3: why aren't we Why isn't it being done?
Speaker 6: Because we're not taking full advantage of what's possible. AI
Speaker 6: is actually an enhancement tool for workers to be able
Speaker 6: to produce more. I mean, in my business, I can
Speaker 6: see how much faster people turn out press releases and
Speaker 6: message points and things like this. Everyone's got to put
Speaker 6: AI into their workflows. Also, we've got to be sure
Speaker 6: this reskilling thing so that everyone feels as if he
Speaker 6: or she can compete, not just the twenty two year
Speaker 6: old is just out of school.
Speaker 3: Because I feel like we've talked reskilling for years.
Speaker 6: Yeah's true, but we've never done it. We've never done
Speaker 6: it in an effective way. And also, business can't do
Speaker 6: this alone. Business should do this with government and NGOs.
Speaker 6: And the secret here is NGOs, non governmental organizations, they're local.
Speaker 6: They're also actually believable for the high grievance people. This
Speaker 6: is not so business should partner with community organizations.
Speaker 2: We were supposed to see reskilling after NAFTA, and obviously
Speaker 2: that didn't happen to the extent that many people thought
Speaker 2: it would or were told that it would. And we
Speaker 2: can see what's happened today as a result of some
Speaker 2: of the problems in a certain economic economies around the country.
Speaker 4: How do you how do these workers use AI if.
Speaker 2: They're not in you know, part of the knowledge economy,
Speaker 2: or if they're not writing press releases, if they're not
Speaker 2: writing message points like what is the way that for
Speaker 2: people to embrace AI rather than be scared of it.
Speaker 6: So one of our clients, Honeywell, is using AI on
Speaker 6: the factory floor and making their workers more productive. That's
Speaker 6: the key to the future. And actually blue collar workers
Speaker 6: have much less job risk than white collar in insurance
Speaker 6: and other things where they're repetitive skills, so blue collar
Speaker 6: workers could thrive. This is a very important message that
Speaker 6: most people haven't absorbed and we need to keep telling this,
Speaker 6: and we also need optimists and back in this country,
Speaker 6: we need to make sure that people believe again that
Speaker 6: the country can do better, because in the moment there's
Speaker 6: this inundation of negativity. And I think competence and ethics
Speaker 6: will get you so far. But if you want to
Speaker 6: run an eight minute mile, it's aspirational for me these days,
Speaker 6: but I have to believe that I can.
Speaker 3: Yeah, I think it's I think it's fascinating that we
Speaker 3: also at the same time, I've been talking about American exceptionalism,
Speaker 3: like in comparison to what's going on in Europe and
Speaker 3: so on and so forth. But there's so many people
Speaker 3: in our society that don't feel that. You know, when
Speaker 3: we talk about stock market, well, well not everybody's in
Speaker 3: the market.
Speaker 6: Only half the people are in the market, correct.
Speaker 3: And I look in my world people I talk to
Speaker 3: a younger generational like I'm not going to have kids.
Speaker 3: How am I going to afford kids? I can't even
Speaker 3: buy a house, Like it's just crazy.
Speaker 6: But again, the chance to get to optimism is based
Speaker 6: on specific actions, and if there's a national reskilling campaign
Speaker 6: or even by cities. I think this is interesting, Carol,
Speaker 6: the trust has gone local trust in my mayor, my company.
Speaker 6: My CEO is much higher than any nobody else. So
Speaker 6: this is a channel that companies should use.
Speaker 3: Great to check in with you.
Speaker 2: But Gopa, we've been speaking to you for years. In
Speaker 2: terms of the twenty fifth year of the trust Barometer,
Speaker 2: things better or worse?
Speaker 4: What's the trend?
Speaker 6: I think we're at a precipice. I think we are
Speaker 6: at a place now where we've got to reverse this
Speaker 6: trend to grievance because when people are aggressive, they actually
Speaker 6: reject innovation and they're scared and they fight any change,
Speaker 6: and we have to get them to a place where
Speaker 6: they accept change.
Speaker 3: Richard, thank you as always. He is the CEO of
Speaker 3: Edelman and Richard Edelman joining us right here in our studio.
Speaker 3: I'm Krol Master a long with Tim Stenvic. This is
Speaker 3: Bloomberg Business Week.