Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. This week we talked a
Speaker 1: lot about the world post pandemic. It's all part of
Speaker 1: the How To issue of the magazine, everything from how
Speaker 1: to be a better tipper and land amission on Mars
Speaker 1: to creating an innovative culture and making a great tequila.
Speaker 1: You can read more about all of that in the
Speaker 1: current issue of Bloomberg Business Week. I've been thinking about
Speaker 1: how to land a mission on Mars. I wanted to
Speaker 1: know how do that get practicing. You can also hear
Speaker 1: some of the highlights from our live virtual event this
Speaker 1: week called the Bloomberg Business Week that complimented the issue,
Speaker 1: including the turnaround at we work with Executive Chairman Marcello Chlorae.
Speaker 1: Also Atlanta Fed President Raphael Bostick on the US Central
Speaker 1: Bank kind of maybe sort of thinking of the policy
Speaker 1: shift he also talked about bitcoin. He did, as did
Speaker 1: Kathy Wood, an in depth conversation with the Ark invest
Speaker 1: founder CEO c i O in the midst of a
Speaker 1: wild week for cryptocurrency. We'll also hear from Brian Brooks,
Speaker 1: the CEO of Finance It's the largest cryptocurrency exchange in
Speaker 1: the world. That company also in the news as of
Speaker 1: late and then later on Dallas Mavericks CEO Cynthia Marshall,
Speaker 1: and singer songwriter Nick Jonas, who's working on a new
Speaker 1: to Kill a venture with John Varvados. That's a fun one, yes,
Speaker 1: it was. Let's get things started this hour with more
Speaker 1: on the How To issue from the features editor behind
Speaker 1: it all, Brett Began, who joined us along with Bloomberg
Speaker 1: Business Week editor Joel Weber. It is a forty page
Speaker 1: takeover of the of the future, well we call it UM.
Speaker 1: Brett is the mastermind of the issue UM and and
Speaker 1: Brett just talk to me about how you approach what
Speaker 1: a good how To story is. I think you think
Speaker 1: about the issue as a whole. So while we are
Speaker 1: going to want to hit a lot of the topics
Speaker 1: that were hitting weekend and week out, UM, like how
Speaker 1: to make good investments and things like that. Um, you
Speaker 1: have to also sort of uh think a little bit
Speaker 1: more broadly, so you might get a pitch on something
Speaker 1: that for a regular issue might not make too much sense,
Speaker 1: like let's say, had a shop for a classic car
Speaker 1: outside of their pursuit section, but suddenly within um, the
Speaker 1: how two issues starts to make total sense because it's
Speaker 1: great for them makes you really want people to come
Speaker 1: to the issue and really get that sense of serendipity
Speaker 1: that they're stumbling upon something that they didn't think would
Speaker 1: be that interesting to them and it turns out to
Speaker 1: be pretty fascinating. So you're telling me in normal times
Speaker 1: to compile a post pandemic karaoke playlist that Joel wouldn't
Speaker 1: be like, yeah, yeah, okay, cover story. I mean, I'm
Speaker 1: all if Joel wants to put that on the cover up,
Speaker 1: I'm all for karaoke takeover issues totally. Um. But yeah,
Speaker 1: but you're right, Carol, I mean, that's that's the one
Speaker 1: where you know, we looked at okay, how you know
Speaker 1: if the pandemic is over? For you, right, And for
Speaker 1: Sam Robard it was, Hey, when I can do karaoke?
Speaker 1: We figured one up it together The ideal post pandemic
Speaker 1: karaoke playlist. I'm gonna say nice to know, not not
Speaker 1: need to know, but as part of a mix, it
Speaker 1: makes a lot of sense. Tim, what was something that
Speaker 1: jumped out to you when you sell all the stories?
Speaker 1: For me, it was it had to do with the
Speaker 1: vaccinations and really the idea of what works when it
Speaker 1: comes to messaging for vaccinations, Brett, because it really surprised
Speaker 1: me and you guys spoke to an expert about messaging
Speaker 1: and what did she tell you? It was pretty striving
Speaker 1: to me too. It turned out that, you know, basically
Speaker 1: all of the more subtle approaches and approaches that appealed
Speaker 1: more to emotion um didn't work. People just wanted unbridled enthusiasm.
Speaker 1: And the ad that was most impactful was basically getting
Speaker 1: a bunch of cheerleaders to doesn't do a number of
Speaker 1: like give me a V I mean a give you
Speaker 1: a C C I and so UM. I was a
Speaker 1: bit surprised by that. I thought there'd be more new
Speaker 1: month to it. But this is as opposed to showing
Speaker 1: images from a hospital or showing a lot of us
Speaker 1: have been familiar with over the last fourteen months. Right,
Speaker 1: that's right, that's right. Yeah, it was just give me
Speaker 1: unbridled enthusiasm, make me feel happy, and then I'll be
Speaker 1: more likely to get vaccinated. Unbridled happiness and and optimism.
Speaker 1: You know, the world just needs a little bit more
Speaker 1: of that. So so Brett, you know, the the thing
Speaker 1: that I think was there's a craft to how we
Speaker 1: approached these stories. And some of them are actually quite short,
Speaker 1: but in general, one of the things that we're trying
Speaker 1: to give people it's something actionable. Um, and I'm wondering,
Speaker 1: having spent now, you know, kind of like weeks working
Speaker 1: on these, talk to me about some of the most
Speaker 1: actionable pieces of advice that that you liked. We did
Speaker 1: these all in the as toole to style. As you know,
Speaker 1: we're basically interviewed and expert and let that expert just
Speaker 1: sort of talk to so you know, I mean I
Speaker 1: actually found that about how to meet deadlines very Uh
Speaker 1: it's a great Oh yeah, that is a good way
Speaker 1: to do it. You know, we're basically are our experts said,
Speaker 1: you know, this is so simple, but you really need
Speaker 1: to start at the end and then work your way back.
Speaker 1: It's so often that we're getting we get caught up
Speaker 1: in the task at hand and we forget to actually
Speaker 1: work backwards. So you know, I thought that that was
Speaker 1: pretty uh. I thought that was pretty helpful. So I'm
Speaker 1: sad that Brett didn't mention my own. I was waiting.
Speaker 1: I was waiting for you to do it. Oh well, okay,
Speaker 1: I was waiting for you to tell me my favorite too.
Speaker 1: You wanted me to just say whatever, it was really good.
Speaker 1: Our favorite was Joel's tipping. So this is actually um
Speaker 1: from my younger days when you know, it seems so
Speaker 1: long ago now when when you used to go to
Speaker 1: bars and like interact with people. But that but a
Speaker 1: friend of a friend had gave me this great tip once,
Speaker 1: which is before you go out um on your for
Speaker 1: your weekend, you know, on Friday, go to the bank
Speaker 1: and basically buy as many two dollar bills from the
Speaker 1: bank as you can right get your deposit, and you're
Speaker 1: gonna find that, um, the quantity of two dollar bills
Speaker 1: like your grandma bought them for your birthday cards long ago,
Speaker 1: there's not that many in circulation, UM. So you basically
Speaker 1: take whatever the bank gives you, and UM, automatically, when
Speaker 1: you start tipping a bartender, you are tipping twice as
Speaker 1: much as the person next to you who's only tipping
Speaker 1: with a buck, So you are you are gold to
Speaker 1: bartenders with two dollar bills. That was the features editor
Speaker 1: for the magazine, Brett Vegan and ar Joel Weber with
Speaker 1: an overview of the how to issue coming up. SoftBank's
Speaker 1: Marcello Clauree says we Work is well positioned for post
Speaker 1: pandemic life in more ways than one. Look at the
Speaker 1: future of office space and rental payments. You're listening to
Speaker 1: Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes, Tim Stinnovan
Speaker 1: from Bloomberg Radio technd Transformation. It is one of the
Speaker 1: verticals of Bloomberg Business Week magazine, and at the business
Speaker 1: Week Live virtual event this week, we heard from a
Speaker 1: voice that knows a lot about that we're talking about,
Speaker 1: Marcelo Chloe, executive chairman at we Work. He's also CEO
Speaker 1: of soft Bank Group International and CEO SoftBank Group. We
Speaker 1: Work has come quite a way since it's failed attempt
Speaker 1: at an I p O back in and Clara tells
Speaker 1: Bloomberg's Ad Hammond that the company is uniquely positioned to
Speaker 1: enjoy a renaissance even as the commercial real estate market
Speaker 1: struggles to find its footing coming off of COVID. I
Speaker 1: think this is we works time because the value proposition
Speaker 1: of we work how so we've been flexibility, and what
Speaker 1: the world is looking now is for a flexible workspace.
Speaker 1: There are so many different ways in which people are
Speaker 1: going to work. But what we're hearing from people is,
Speaker 1: first of all, employees want to go back to the
Speaker 1: office right night out of and employees say I want
Speaker 1: to go back to the office. They don't want to
Speaker 1: go back the same way. They don't want to go
Speaker 1: back to one headquarters and red. Some say you want
Speaker 1: to be there three days a week, Some say they
Speaker 1: want to be two days a week, Some say four
Speaker 1: days a week. Some says I don't want to drive
Speaker 1: to headquarters. I want to work close to home. So
Speaker 1: there's going to be so many different business models. But
Speaker 1: what I do know is that companies are not looking
Speaker 1: forward to going back to the traditional way of signing
Speaker 1: a twenty years list as setting up this non flexible headquarters.
Speaker 1: That's that the office is very different today. You know,
Speaker 1: the biggest or most of our larger customers are the
Speaker 1: world most valuable companies who basically are sending those their
Speaker 1: employees because they don't know, you know, how many days
Speaker 1: they are going to be working, because they don't know
Speaker 1: where their business is going to grow. And when you're
Speaker 1: sitting in the only company in the world that has
Speaker 1: over a thousand buildings in pretty much most important cities
Speaker 1: around the world, they demand for we Work space today
Speaker 1: is higher than it was prior to the pandemic. So
Speaker 1: what the pandemical we Work allowed to re embed itself.
Speaker 1: It allowed to learn how to operate on a mosque
Speaker 1: cost flexible basis, and now you have it. We worked that.
Speaker 1: Like I said before, you know, we Work should be
Speaker 1: a profitable company by the end of this year or
Speaker 1: by the beginning of next year's latest. I'm demand for
Speaker 1: this type of flexible of space is higher than ever
Speaker 1: and I think the world is going to really fine
Speaker 1: in terms of work. Flexibility becomes the most important part
Speaker 1: that the company could offer its employees. I gotta go
Speaker 1: there with the crypto question. Obviously we worked last month
Speaker 1: and else that it would be accepting payment in the
Speaker 1: form of cryptocurrencies, not to be bitcoin. It also said
Speaker 1: it would hold some on its balance sheet. We saw
Speaker 1: Elon must come out and say Tesla would no longer
Speaker 1: be taking bitcoin over concerns about the impact it has
Speaker 1: on the environment. Obviously, the environmental impact on mining bitcoin
Speaker 1: has has gone up significantly over the past few months.
Speaker 1: Is that the right move? Is that something we're like,
Speaker 1: you see we work follower. Is that just a sort
Speaker 1: of reaction to to a short term No. I mean,
Speaker 1: the reason why we decided to accept cryptocurrencies, what's because
Speaker 1: our customers were asking for it. We know. One of
Speaker 1: the things that we do with sun Deep is we
Speaker 1: listen to our customers a lot and we have to
Speaker 1: write it tells the type of office they're looking, They
Speaker 1: tell us the type of setups that they want, and
Speaker 1: and the crypto. The work came out a lot more
Speaker 1: employees say, you know, we would like to pay encrypto.
Speaker 1: We have accumulated a significant amount of wealth in crypto
Speaker 1: that we would like to use it to pay for rent.
Speaker 1: As brint becomes an important part of many companies, so
Speaker 1: we decided to basically seb crypto and at the same time,
Speaker 1: you know, as people pay us in crypto, it to
Speaker 1: us is just another currency. It's like we're holding too.
Speaker 1: We have used dollars, we've got euros, we've got pounds,
Speaker 1: we've got crypto, we've got Japanese ends, we got it end.
Speaker 1: So to us, it makes no difference. And on our
Speaker 1: customers ask from reimbursement in crypto, we're paying crypto and
Speaker 1: we have. You know, we've had some of our customers
Speaker 1: who are payings and cryptocurrencies and we have some ladders
Speaker 1: who said, look, I would like you to pay me
Speaker 1: in cryptocurrencies. So you know, the way we work looks
Speaker 1: at it. You know, we are we're gonna listen to
Speaker 1: our customers want from us, and if they demanded that
Speaker 1: they wanted to pay in crypto, that's how we do
Speaker 1: crypto as a form of payment. And you have a
Speaker 1: level that you'll be comfortable going to in terms of
Speaker 1: your sort of total money going in and out in
Speaker 1: the form of cryptome. I mean today is a very
Speaker 1: small part of our business. I think is the beginning.
Speaker 1: I think crypto is a mega trend. I think crypto
Speaker 1: cannot be ignored, and you know it's going to grow
Speaker 1: according to whatever customers want. For customers want by paying
Speaker 1: crypto more, you know, we're gonna accept crypto. Customers want
Speaker 1: to pay on traditional currency, We're gonna accept form of
Speaker 1: payment as as traditional currency. So to us, this was
Speaker 1: nothing more than a move to basically help or customers
Speaker 1: satisfied some of the needs that our customers who are
Speaker 1: asking from. Obviously a first customer and a large one.
Speaker 1: What's coin base Not a lot of people know, but
Speaker 1: you know the headquarters and most of the real estate
Speaker 1: and coin bage uses is we work and being them
Speaker 1: the largest exchange of cryptocurrency, they know they had. They
Speaker 1: were the first customers to pay us in cryptocurrency. They
Speaker 1: pay purely in cryptocurrency. I think the combination combination. I
Speaker 1: not not exactly, but they were the first customer that
Speaker 1: actually wanted to payankrypto. Massa son has proved himself to
Speaker 1: be a highly successful investor through good times, through bad times.
Speaker 1: Obviously through this recent pandemic. In terms of key man risk,
Speaker 1: who is the right person to take over shoot? He
Speaker 1: stepped down as obviously yourself and Rage Mrs sort of
Speaker 1: both fairly close to the top of the organization. You
Speaker 1: know what I mean, that's that's a subject that only
Speaker 1: Massa knows the answer. I mean, Massa is incredibly active.
Speaker 1: Massa is a hands on manager. Massa meets with every
Speaker 1: single one of the entrepreneurs that we invest and we
Speaker 1: hold you know, daily minutes with Massa in which you know,
Speaker 1: we're always trying to figure out how we can make
Speaker 1: our entrepreneurs work together, how they can leverage the ecosystem,
Speaker 1: and we're close off. I would say two hundred and
Speaker 1: forty of the biggest disruptors sit within the SOPA ecosystem.
Speaker 1: So it's fascinating to see more entrepreneurs are found is
Speaker 1: engaged with each other, help each other, and Massa is
Speaker 1: incredibly active in that. So that answer only Massa Olson,
Speaker 1: and he hasn't shared it with anybody. And when I
Speaker 1: think of the sort of the different characters inside, you know,
Speaker 1: Mr Mysteries is often cast as the sort of soft,
Speaker 1: curdly side of it, you know, the friendly face of
Speaker 1: soft Bank Investing. You're more the operations guy. Obviously you
Speaker 1: fixed the T mobile situation, you're now fixing the we
Speaker 1: work situation. Is that a fair characterization of the two
Speaker 1: of you and the roles that you fell within the organization.
Speaker 1: I mean, I think there's so much to do in
Speaker 1: in soft Bank that we all divide and conquer, right,
Speaker 1: anytime there's a big issue with the company, you know,
Speaker 1: I'm usually the one that gets sent to the get center.
Speaker 1: I had a personal attachment to Latin Americans, so that's
Speaker 1: what we launched a five billion Latin American fund. That
Speaker 1: was soft Bank Group CEO, and we worked Executive Chairman
Speaker 1: Marcello Clare with Bloomberg Deals reporter at Hammond talking about
Speaker 1: succession plans. Listen, we always want to know when there's
Speaker 1: an iconic company, an iconic individual behind that company, you
Speaker 1: know who comes next. Yeah, and soft Bank is, of
Speaker 1: course among the biggest. Yeah, totally. And the we work
Speaker 1: story this is when we've been following for the last
Speaker 1: year or so, a couple of years, so excited about
Speaker 1: the build up, its growth, the expected ip O that
Speaker 1: ultimately didn't happen, and then all of it kind of
Speaker 1: seemed to come crumbling down a bunch and they really retrenched,
Speaker 1: although they sound like now they're building back up, even
Speaker 1: though it's a tough market for commercial real estate given
Speaker 1: the way that people are going to be going back
Speaker 1: to work in a hybrid hybrid method. Yeah, exactly. Plenty
Speaker 1: more ahead on Bloomberg Business Week and our special how
Speaker 1: to issue and the Bloomberg Business Week Live Virtual event.
Speaker 1: We're going to hear from Atlanta Fed President Raphael Bostic
Speaker 1: and the original test La Bowl, Arc invest founder and
Speaker 1: CEO Kathy Wood and later the business of Sports with
Speaker 1: the CEO of the NBA Playoff Bound Dallas Mavericks, Cynthia Marshall.
Speaker 1: This is Bloomberg broadcasting from the financial capital of the world, Bloomberg.
Speaker 1: He Love in Frio in New York, to Washington, d C.
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Speaker 1: nineteen and around the globe the Bloomberg Business app and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week. Funding
Speaker 1: is an economics It's another important vertical of the magazine,
Speaker 1: something we also covered at the live virtual event the
Speaker 1: Bloomberg Business Week, and two voices covered it for us,
Speaker 1: both well known to our audience. Our convest Kathy would
Speaker 1: will hear from her shortly. Another individual very familiar to
Speaker 1: our listeners is Raphael Boston. He's president and CEO the
Speaker 1: Federal Reserve Bank of Atlanta are Bloomberg TV and Radio.
Speaker 1: International Economics and Policy Corps sponent Mike McKee caught up
Speaker 1: with him as part of our Business Week Live Summit.
Speaker 1: I'm expecting a fair amount of volatility through the summertime,
Speaker 1: and I think businesses are going to be really evaluating
Speaker 1: their experiences as we see the stimulus payments spent now,
Speaker 1: as we see families uh, really go through that pent
Speaker 1: up demand period. Everyone is really looking to get out
Speaker 1: and be engaged in the economy and all that kind
Speaker 1: of stuff. UM. Once we get that settled down, once
Speaker 1: the kids are back to school, once we start to
Speaker 1: see how families are allocating their their labor and work
Speaker 1: for us UM, then I think we will start to
Speaker 1: get signals from business leaders about UM, how they're thinking
Speaker 1: about their strategies. So I'm going to continue to ask
Speaker 1: as we go through the summer. I'm expecting they're gonna say, well,
Speaker 1: you know, there's a lot going on here, UM, hold on.
Speaker 1: But you know, starting in September and moving in through
Speaker 1: the fall into the wintertime, I think I'll start to
Speaker 1: get some signals that will allow me to answer that question.
Speaker 1: I'm looking forward to coming to the next Atlanta Fed
Speaker 1: Financial Markets conference. But I'm not sure if you're going
Speaker 1: to have Larry Summers come back. He told your conference
Speaker 1: that the fed's new framework policy is a mistake, it's
Speaker 1: too mechanical, and you need to focus on overheating is
Speaker 1: the main risk to the economy. Can you tell me
Speaker 1: where and why you might think he's row So, you know,
Speaker 1: I actually think that what we said in our statement
Speaker 1: is that we're going to let experience be our guide
Speaker 1: and we're not going to be preemptive or proactive to
Speaker 1: stop things that may or may not happen. What we've
Speaker 1: seen over the last ten years is that, um, you know,
Speaker 1: that expectation that inflation was just going to emerge didn't happen,
Speaker 1: and so policy could have a sort of an inappropriate
Speaker 1: or unintended impact on the trajectory of the economy. I
Speaker 1: don't think that the framework says that we're not worried
Speaker 1: about overheating. I think for me, when I see the
Speaker 1: framework and I looked at the words, what it told
Speaker 1: me was that, um, we're going to look for evidence
Speaker 1: of overheating before we move definitively. Uh. And so in
Speaker 1: that regard, I don't think that that Larry is saying
Speaker 1: something that different than us. I think, you know, he
Speaker 1: has his own style of communicating, which is very Larry Summers.
Speaker 1: And you know, I'm not even gonna try to replicate that,
Speaker 1: but but I think people just should understand that for me,
Speaker 1: I actually do worry about both sides of economic performance
Speaker 1: to make sure that UM we are policy is deployed
Speaker 1: in a way that allows us to have a stable,
Speaker 1: predictable and UH and prosper prosperous trajectory for growth. Well,
Speaker 1: Alan Blinder, who you know served at the FED, said
Speaker 1: today he's not entirely unsympathetic to Professor Summers because he says,
Speaker 1: there is a hell of a lot of aggregate demand
Speaker 1: out there chasing less aggregate supply. Do you feel you
Speaker 1: have a good handle on both sides of that enough
Speaker 1: to know whether overheating is taking place in time to
Speaker 1: do something about it? So I actually do. You know,
Speaker 1: one of the things that's been very interesting about this uh,
Speaker 1: this this pandemic UH, and it's actually was evident very
Speaker 1: early on, is that demand has responded much faster to
Speaker 1: the marketplace than supply has. It has taken supply time
Speaker 1: to sort of catch up, and we're seeing this in
Speaker 1: a number of different ways, to whether it be the
Speaker 1: semi conductor is or UH, lumber response for housing, you know,
Speaker 1: or even appliances and their availability for families that are
Speaker 1: looking to upgrade at their homes. Um, the question is
Speaker 1: not whether there's that imbalance that happens initially, is whether
Speaker 1: that persists over time. And as I've talked to business leaders,
Speaker 1: what they've said is that for many of these things,
Speaker 1: they're not expecting them to really last for an extended period,
Speaker 1: so that the dynamic that we're seeing now is not
Speaker 1: that new steady state dynamic. Uh. And so so there's
Speaker 1: a reason to be less concerned. But I do want
Speaker 1: to emphasize again, you know, this is why we talk
Speaker 1: to people on a repeated basis. I want to know
Speaker 1: whether their views on this are changing, because if they
Speaker 1: are changing, then that will lead me to have to
Speaker 1: rethink sort of my approach to where our policy should be.
Speaker 1: You put in place and twy billion dollars a month
Speaker 1: of quantitative easy bond buying a year ago as an
Speaker 1: emergency action, Uh, do we still need that much money?
Speaker 1: Markets are functioning? Bank lending is actually word than it was,
Speaker 1: so it doesn't seem to be adding anything to stimulus
Speaker 1: at this point. Uh, could we do with less than
Speaker 1: that and still have the economy on the same track
Speaker 1: it is today, So that I think that's a fair question,
Speaker 1: and it's something that I'm talking about with my team
Speaker 1: internally right now. I would say I've not come to
Speaker 1: a clear view on this. I do think that as
Speaker 1: we continue to move forward, we continue to see progress
Speaker 1: in the labor market, we see inflation at or above
Speaker 1: our target. Um, this is a question that we're really
Speaker 1: going to have to uh sort of ground ground ourselves.
Speaker 1: That was Dr Raphael Bostick of the Atlanta Fit, a
Speaker 1: voice we listened to very closely. It'll be interesting to
Speaker 1: watch how the central bank strategy develops in the coming months.
Speaker 1: You're listening to Bloomberg business Week. Up next, someone who
Speaker 1: also keeps an eye on what's going on in the
Speaker 1: world through the lens of innovation and disruption. Her world
Speaker 1: rocked a bid on volatility and pull back in technology
Speaker 1: stocks of Lada, especially in some names that she's heavily
Speaker 1: invested in. We hear from our investments, Kathy would that's
Speaker 1: coming up next. This is her. You're listening to Bloomberg
Speaker 1: Business Week. With Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio. Think about Kathy Would and you
Speaker 1: could Tim probably find her in just about any vertical
Speaker 1: covered by Bloomberg Business Week, Magazine, Technology and Innovation, Yes,
Speaker 1: of course, companies and industries, finance and economy, power and policy,
Speaker 1: certainly from a regulatory perspective, and how it impacts some
Speaker 1: of her investment ideas well. She's someone who has been
Speaker 1: among the Bloomberg fifty, known for her big bets on Tesla,
Speaker 1: the Internet, software and biotech. But it's been a challenging
Speaker 1: few months for Kathy Would. We've seen assets fall from
Speaker 1: a peak of sixty billion dollars to around forty billion dollars.
Speaker 1: She joined us on a day when bitcoin was coming
Speaker 1: undone and so were other cryptocurrencies. Look in hindsight, Carol,
Speaker 1: there's no better day in the last year to have
Speaker 1: Kathy Would join us. Talk about timing check it out.
Speaker 1: I think we're in a risk off period and for
Speaker 1: for all assets. If you if you look at the
Speaker 1: the stock market, the more risky or volatile parts of
Speaker 1: the market have come in dramatically since mid February, and
Speaker 1: I think a lot of the concerns have been around inflation.
Speaker 1: Initially that was helping bitcoin because obviously bitcoin is in
Speaker 1: a very important inflation hedge. You know, it's a it's
Speaker 1: a rules based monetary policy, the first global rules based
Speaker 1: monetary policy we have ever had hugely important reserve currency
Speaker 1: of the crypto acid ecosystem. But I think what's happening
Speaker 1: right now is because the stock market, the highly volatile
Speaker 1: part of the stock market, the innovation oriented part of
Speaker 1: the stock market, has gone through such a correction which
Speaker 1: has been flamed by inflation fears. I think, I think
Speaker 1: the correlations among volatile assets are going to one right now,
Speaker 1: and that's including bitcoin. Well, I want to unpack a
Speaker 1: couple of things. So Bitcoin, I mean you, at one point,
Speaker 1: I think back in April told down Jones that it
Speaker 1: could go to about dollars. Do still hold that target?
Speaker 1: Do you still think that's where we're headed? I we do.
Speaker 1: I do, yes, C And L. Mandra is our crypto analysts,
Speaker 1: and and uh we we go through soul searching times
Speaker 1: like this and and scrape the models, and yes, our
Speaker 1: conviction is as high. The one thing that has changed here, however,
Speaker 1: is the environmental concerns around bitcoin in particular have called
Speaker 1: people like Elon Musk to pull away and say what
Speaker 1: wa wa WHOA Let me let me, let me make
Speaker 1: sure I understand this. And uh, we believe that even
Speaker 1: this is going to change because first of all, right now, UH,
Speaker 1: the percentage of bitcoin mind with renewables and hydroelectric power
Speaker 1: is quite substantial. I think in China it's over fifty
Speaker 1: in renewables. Uh. And we also believe h and we
Speaker 1: wrote a paper in conjunction with Square on this and
Speaker 1: we're going to have a comfort about it in July.
Speaker 1: We believe that bitcoin mining integrated into the distributed grid,
Speaker 1: and by that I mean solar roofs, power walls in homes. UH, utilities,
Speaker 1: merchant power producers starting to include bitcoin mining in the ecosystem.
Speaker 1: Why would they do that? They would do it because
Speaker 1: renewables are intermittent power sources, right, whether is it sunny
Speaker 1: or not, wind is it windy or not? And bitcoin
Speaker 1: mining could take off if it's If there's excess energy
Speaker 1: uh from solar being loaded into power walls, it can
Speaker 1: be offloaded into bitcoin mining and the whole ecosystem therefore
Speaker 1: becomes much more economic. If this happens. We believe that
Speaker 1: the the adoption of solar is going to accelerate dramatically
Speaker 1: because there's another profits center associated with it, bitcoin mining. Well,
Speaker 1: what happens though? In the meantime, do you think we
Speaker 1: go much lower from here? Uh? You never know how
Speaker 1: low is low? When a market gets very emotional. A
Speaker 1: lot of traders see bitcoin dropping below the two day
Speaker 1: moving average, which is which was at uh so traders
Speaker 1: once that happened, they just dumped. Some just dump and run.
Speaker 1: I think we're in a capitulation phase. Ya seen has
Speaker 1: a dashboard. We were looking at all the indicators this morning.
Speaker 1: They are all suggesting that we are in the capitulation phase,
Speaker 1: which is a really great time to buy. Uh. No
Speaker 1: matter what the asset is, a capitulation phase is by
Speaker 1: it's on sale now? Am I saying thirty five thousand
Speaker 1: is the low? You know, if traders and there are
Speaker 1: a lot of speculators in in bitcoin, if they are
Speaker 1: running for the hills just because bitcoin has broken through
Speaker 1: moving average that is important to them. It could continue.
Speaker 1: But all of our indicainers are saying this is capitulation
Speaker 1: right now. Do you have a low point on your
Speaker 1: model for bitcoin. No, these metrics are are more a measure.
Speaker 1: Are we in a truly capitulation phase? And it's very detailed. Yes,
Speaker 1: seen uses on chain analysis, which this is the only
Speaker 1: asset where you can see exactly who's doing what, when,
Speaker 1: why and how, And all of those metrics are saying
Speaker 1: this is a capitulation. This is as as bad as
Speaker 1: it got during the coronavirus crisis. So what about systemic concerns?
Speaker 1: And I'm not talking about bringing down the financial system,
Speaker 1: but you know, more and more of kind of the
Speaker 1: establishment are getting involved in bitcoin. A lot more companies
Speaker 1: have bitcoin on their balance sheet. Should we be concerned
Speaker 1: about their exposure? Tesla for one, but others yes, yes,
Speaker 1: well they're usually in the case of Square and Tesla,
Speaker 1: there between five and eight percent of their cash is
Speaker 1: in bitcoin. So I don't think so that's no cause
Speaker 1: for concern. I mean, think about it. We were worried
Speaker 1: that Tesla would run out of cash. Of course ARC
Speaker 1: was not worried, but the world was worried two years
Speaker 1: ago that it would run out of cash. It has
Speaker 1: so much cash now that has the luxury to put
Speaker 1: five to eight percent in in bickcood, So uh, micro
Speaker 1: Strategy is another company. It has almost all as cash
Speaker 1: and bitcoin. That's that's perhaps something prints you know, But
Speaker 1: as I said, if we are in the capitulation phase,
Speaker 1: we shouldn't be worried about micro Strategy either. Uh. We
Speaker 1: do believe this is a new asset class and that
Speaker 1: institutions they are looking at it right now because the
Speaker 1: correlations of relative returns and total returns to compare to
Speaker 1: other asset classes tends to be very low over time,
Speaker 1: and so they have to look at it now. E
Speaker 1: s G might prevent a move in wholesale, but we
Speaker 1: do believe that once they understand how renewables are becoming
Speaker 1: incorporated into the bitcoin mining ecosystem uh, and that bitcoin
Speaker 1: mining might accelerate the adoption of solar uh. And I
Speaker 1: think Ellen will come back and be a part of
Speaker 1: that ecosystem as well. So why do you think he
Speaker 1: came out and said, wait a minute, maybe I'm going
Speaker 1: to back off a bitcoin. Um. What do you think
Speaker 1: his concern was? What was his nervousness? Well, I think
Speaker 1: he moved in because he's been thinking, watching, like we
Speaker 1: all have basically unhinged monetary policies. They're not tied to
Speaker 1: anything anymore. Whereas bitcoin is mathematically meter to top out
Speaker 1: at twenty one million units and we're approaching nineteen million now,
Speaker 1: so the scarcity factor should increase and support the price.
Speaker 1: We do believe that is what is going to be
Speaker 1: supporting the price in here. I believe what happened after
Speaker 1: he took the position in bitcoin is he got pushed
Speaker 1: back from institutional shareholders like black Rock. If you've got
Speaker 1: Larry Fink, you know, beating the drum on climate change
Speaker 1: as one of the most important topics and problems of
Speaker 1: our time, Uh, then uh, he was going to have
Speaker 1: to face those sorts of concerns. I don't think he
Speaker 1: expected that. And now that he's sorting it out, learning
Speaker 1: more about the environmental impact, I think he'll come back
Speaker 1: into the mix. We certainly hope he will. Uh. I
Speaker 1: don't know if he's going to be part of the
Speaker 1: conference in in July or not. It would be he
Speaker 1: would be a very good addition because I think he
Speaker 1: would provide both sides of the equation. How quickly could
Speaker 1: the adoption of solar accelerate if we introduced mining into
Speaker 1: that ecosystem? Do you expect a bitcoin e t F
Speaker 1: to get approved anytime soon. And I'm curious if you
Speaker 1: plan to launch a crypto et F anytime soon. You know,
Speaker 1: I think, well, well, now that uh Gary Gensler is
Speaker 1: head of the sec UH, he's bitcoin friendly. We know
Speaker 1: that he taught a class. UH of course it of
Speaker 1: course is at M I t before coming back to
Speaker 1: the SEC so and I think the research um UH
Speaker 1: professionals at the SEC UH they understand bitcoin in particular,
Speaker 1: and UH and I think are much more comfortable with
Speaker 1: it now that we've had several years to digest what
Speaker 1: exactly it is. Go through a bear market, go through
Speaker 1: a bull market, now, go through a bit of a
Speaker 1: bear market. I think watching uh the ecosystem evolve and
Speaker 1: actually become even more anti fragile. You know, we're getting
Speaker 1: some real tests here. And if the system doesn't break,
Speaker 1: and I don't think it will, I think that they're
Speaker 1: furt will increase in a couple of ways. Number One,
Speaker 1: the infrastructure is there is robust. Number two, the liquidity
Speaker 1: is there. I don't think. I don't think that's going
Speaker 1: to be disproven here. And number three, the price is
Speaker 1: down from very lofty levels. So hey, why not start
Speaker 1: an e t F after a correction in in the
Speaker 1: market than before, so I actually think the odds are
Speaker 1: going up now that we've had this correction. I don't
Speaker 1: know if it's going to be this year or not.
Speaker 1: We here perhaps fourth quarter, but you know we heard
Speaker 1: a third quarter before that, so as we get closer
Speaker 1: to the fourth quarter, will know how much is being
Speaker 1: pushed out. That's Kathy would have ourk invest And that
Speaker 1: wraps up the first hour of the weekend edition of
Speaker 1: Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser and
Speaker 1: I'm Tim Stannabeck ahead in our next hour, Part two
Speaker 1: of Carol's conversation with Kathy would as the original Tesla
Speaker 1: Bowl digs in on her commitment to the be Giant.
Speaker 1: Plus the US CEO Binance, Brian Brooks, Dallas Maverick CEO
Speaker 1: Cynthia Marshall, and Nick Jonas he's making tequila. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes, Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, I'm Carol Masser and I'm
Speaker 1: Tim Stanevik Plenty in our second hour of the weekend
Speaker 1: edition of Bloomberg Business Week. Tim, it's a special week
Speaker 1: it's the how to issue of the magazine. But in
Speaker 1: coordination with that, we had a Bloomberg Live event. It
Speaker 1: was called the Bloomberg Business Week five Days of Live
Speaker 1: Virtual Programming, and so we're highlighting some of those interviews. Yeah,
Speaker 1: in a fantastic lineup, including the US CEO of Finance
Speaker 1: it's the world's largest cryptocurrency exchange, Brian Brooks. Plus how
Speaker 1: does ste a sports franchise through a pandemic with Maverick
Speaker 1: CEO Cynthia Marsall and had started to Quella company with
Speaker 1: Nick Jonas and John Varvados. Got to say, that's a
Speaker 1: lot of fun. First up this hour, though more from
Speaker 1: Cathy would The Ark invest CEO and founder remains committed
Speaker 1: to her investment strategy despite struggles for companies such as Tesla.
Speaker 1: So far in one she has been a big bull
Speaker 1: on that company. I asked her about the EV maker's
Speaker 1: recent struggles in China. I think the Chinese China is
Speaker 1: going to favor its local producers like Neo and others
Speaker 1: expang uh. And I think they're granting subsidies to Neo,
Speaker 1: which is the battery swap company, even on its very
Speaker 1: high end cars, which they are not granting to Tesla.
Speaker 1: So it's obvious and it has always been obvious that
Speaker 1: China would favor a local producer. But what we are
Speaker 1: seeing from China and particularly Tesla, is exports into Europe
Speaker 1: where it does not yet have a plant. Uh. And
Speaker 1: what we're hearing is uh, the especially in Germany, but
Speaker 1: all over Europe, where their their standards are extremely high
Speaker 1: for cars in terms of design and performance. Uh that
Speaker 1: they would prefer cars from Shanghai, which is a much
Speaker 1: newer plant and much more productive, much more efficient in
Speaker 1: terms of these designer perfecting these designs than is Fremont uh.
Speaker 1: And So I think we're seeing a big export market
Speaker 1: developed from China into Europe. Uh and Uh. I think
Speaker 1: China will like that. China wants to be known not
Speaker 1: for shipping or exporting you know, cheap goods, but also
Speaker 1: high end good So this could be the beginning of
Speaker 1: a trend. So it's China risk then for Tesla. I
Speaker 1: don't think they're going to shut down the factory at all.
Speaker 1: I think that that factory will be much more for
Speaker 1: exporting than we once imagined. I will say that Tesla's
Speaker 1: cars in in China have sold very well until very recently.
Speaker 1: I'm sure the publicity, uh, the publicity it has received
Speaker 1: has cooled cooled uh Tesla's jets in China, But it's
Speaker 1: it's been fortuitous that this export market has opened up
Speaker 1: at the same time. The one thing I want to
Speaker 1: ask you, and we talked about it at the beginning
Speaker 1: inflation your mentor you and I talked about this just
Speaker 1: a few weeks ago. Art Laugher. You were in your twenties.
Speaker 1: You know, you were focusing on the economy. It was
Speaker 1: a time where inflation was off the charts and everybody
Speaker 1: thought it would consistently stay that way. Laugher thought differently.
Speaker 1: And we know well known uh in the supplied side economics.
Speaker 1: Here we are at another time where the markets, the
Speaker 1: volatility is often guided by our inflation expectations. Is inflation
Speaker 1: going to be a problem in your view? Well, uh,
Speaker 1: we we've been saying for some time, actually since the
Speaker 1: depths of the coronavirus. We were doing YouTube videos saying
Speaker 1: regularly v shape recovery. Businesses are way behind consumers. Consumers
Speaker 1: are buying all of these goods. In fact, that's all
Speaker 1: they can do because they're stuck at home. Right, so
Speaker 1: they were buying non durable and durable goods that could
Speaker 1: be shipped to them. Right, Uh right, Non, Okay, that
Speaker 1: part of consumption is one third of consumption, and a
Speaker 1: disproportionate amount or percentage of the market basket of consumers
Speaker 1: was in goods for the past year. Businesses were didn't
Speaker 1: expect it. They had been lagging in terms of capital spending,
Speaker 1: in terms of inventories. They were worried about inverted deal
Speaker 1: curves and China U S trade conflict. There were many,
Speaker 1: many concerns, and so what I believe is we are
Speaker 1: setting up for a massive period of deflation. Uh now,
Speaker 1: let me explain that there are three sources of deflation.
Speaker 1: One is when the orders, these double and triple orders
Speaker 1: are canceled. Right now, we have seen lumber correct in
Speaker 1: the last week. I think this is the beginning of
Speaker 1: that Copper is now starting to correct. And I believe
Speaker 1: that commodity prices went too far too fast. As businesses
Speaker 1: were scrambling and panicking. Right, they were losing business to
Speaker 1: competition if they hadn't planned their inventories correctly. So that's
Speaker 1: one source of deflation, but that's only cyclical deflation. And
Speaker 1: we actually didn't expect it to start now. We expected
Speaker 1: it to start later in the year. But I guess
Speaker 1: it makes sense now that vaccines are here and consumers
Speaker 1: are shifting away from goods towards services or at the margin. Uh,
Speaker 1: the writing is on the wall. When Cathy Wood talks,
Speaker 1: people listen. I mean this interview Carol. I was watching
Speaker 1: it live, but I was also watching a play on
Speaker 1: on Twitter, and it just absolutely blew up on social
Speaker 1: I gotta say it was just a lot of it
Speaker 1: was timing me. This is Kathy Wood's world. The bitcoin
Speaker 1: blow up this week, Tesla, there was news on that
Speaker 1: these are the companies that she talks about and invest
Speaker 1: in and has for years. So the timing just kind
Speaker 1: of worked out. Speaking of timing, and she reiterated her
Speaker 1: time horizon for the way that she thinks about investing
Speaker 1: disruption five years and she's sticking to her guns exactly,
Speaker 1: not really changing at all. Well, a great conversation and
Speaker 1: so grateful to catch up with Kathy Would. More in
Speaker 1: the magazine from her, including how to cultivate an innovative culture, Tim.
Speaker 1: She talks a lot about, you know, her environment. She's
Speaker 1: got a young investment team. They do the analysis. They
Speaker 1: check in with the team several times a week. There's
Speaker 1: morning meetings, there's a Friday meeting. Uh, and it's all
Speaker 1: about kind of looking at their investment thesis. But this
Speaker 1: is how she does it. A lot of people probably
Speaker 1: became familiar with Kathy Would in twenty just because of
Speaker 1: how well her funded and are invested. But she's been
Speaker 1: at this a long time. Carol, Yeah, exactly, and listen
Speaker 1: has kind of an economic background, started there but has
Speaker 1: moved into a lot more analysis and obviously investments. You're
Speaker 1: listening to Bloomberg Business Week coming up. Another the person
Speaker 1: who's keenly aware of the goings on in the world
Speaker 1: of crypto Binance US CEO Brian Brooks joining us. That
Speaker 1: company has been in the news as of late, Yes,
Speaker 1: it has. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick takes. Tim Stinovik from
Speaker 1: Bloomberg Radio. So he heard from Cathy Wood on Bitcoin
Speaker 1: a bit earlier and a lot more. She's sticking with
Speaker 1: her firm's projections of the crypto asset ultimately reaching the
Speaker 1: five hundred thousand dollar mark. But in a week where
Speaker 1: crypto volatility came to a head, we wanted to hear
Speaker 1: from one of the top dogs at the world's largest
Speaker 1: crypto exchange, Binance, which has also been played with customer
Speaker 1: support issues of late. Yeah, there's some great reporting on
Speaker 1: the Bloomberg terminal. Check it out on the terminal or
Speaker 1: at Bloomberg dot com. Keep in mind, though the company's
Speaker 1: US CEO, Brian Brooks, he caught up with our team.
Speaker 1: In fact, he spoke to Bloomberg's remain Bostick at the
Speaker 1: Bloomberg Business Week conference. The decentralized nature of this is
Speaker 1: obviously a big part of the appeal here, but the stability,
Speaker 1: at least when you look at other markets, the stability
Speaker 1: is often centralized in a way, or at least what
Speaker 1: brings stability is that centralization. I mean, we once had
Speaker 1: a decentralized economy here until somebody decided that, you know,
Speaker 1: we needed to create a FED and UH and have
Speaker 1: some sort of stability built into the fed's mandate here.
Speaker 1: If you get to a stage here where you want
Speaker 1: a system of rules, a system of speed limits, if
Speaker 1: you will, isn't that, in and of itself almost a centralization.
Speaker 1: How do you do that without decent without recentralizing things? Yeah,
Speaker 1: I guess. Look, you know they're There are a couple
Speaker 1: of problems with with that analysis. The first is, we
Speaker 1: didn't create the FED, you know, in the nineteen teens
Speaker 1: because decentralization was bad. We created the FED because we
Speaker 1: didn't have a technological ability to allow people to transact
Speaker 1: directly with each other, and so somebody needed to issue
Speaker 1: the dollars that could be accepted and everywhere. But we
Speaker 1: now have technology that does that. It's sort of like,
Speaker 1: you know, the reason that the post office was the
Speaker 1: way we transacted information in the olden days was because
Speaker 1: there was no way for somebody in New York to
Speaker 1: talk to somebody in in San Francisco. And then we
Speaker 1: had an email and we didn't need the post office
Speaker 1: the same way that we used to write. So technologies
Speaker 1: sometimes supplant the assumptions on which institutions were built. So
Speaker 1: where you say stability, Romaine, I would say brittleness. Um yes,
Speaker 1: it was stable. It was also super super controlled, right,
Speaker 1: it was also incredibly expensive and didn't work all that well.
Speaker 1: It was merely the best thing we have. Now we
Speaker 1: have something better. If we get to a stage where
Speaker 1: we see more rules, who should have the oversight? Well,
Speaker 1: my personal view is it depends on the utility that
Speaker 1: we're talking about. So remember every cryptocurrency represents a different function, right,
Speaker 1: These are all different networks being built for different things.
Speaker 1: So you know, if you're talking about bitcoin, which fundamentally
Speaker 1: is an investment asset, its kind of digital gold. We
Speaker 1: like to say it ought to be regulated if it's
Speaker 1: regulated like investment assets are regulated. It's not a security
Speaker 1: of us, but it's something that people buy and hold
Speaker 1: for its value, retention properties versus ethereum is a network
Speaker 1: for the remission of payments right or for crowdsourcing of funding,
Speaker 1: and so if it's like a payment mechanism, you'd expect
Speaker 1: the banking regulators to to talk about that, which is
Speaker 1: what I did at the occ So it all depends
Speaker 1: on what the underlying activity is. Like activities should be
Speaker 1: regulated alike, they shouldn't be regulated by asset class category.
Speaker 1: If this is a payment mechanism, it ought to be
Speaker 1: regulated like a payment mechanism, etcetera. And I think that's
Speaker 1: the mind shift that regulators need to achieve here. You
Speaker 1: spend a brief time as a regulator here. Do you
Speaker 1: think that regulators and more importantly, some of the legislators
Speaker 1: in Washington understand those distinctions. Well, I think that they
Speaker 1: do more than they used to. So, you know, I
Speaker 1: entered crypto about four years ago in in sort of
Speaker 1: a big way, and at the time, the knowledge based
Speaker 1: on crypto on Capitol Hill was very, very shallow. There
Speaker 1: were maybe two or three members of Congress who really
Speaker 1: had started to explore it. But at this point, you know,
Speaker 1: we've had multiple United States Senators and multiple members of
Speaker 1: the House of Representatives who really get it. And I'm
Speaker 1: talking about people on both sides of the aisle. That's
Speaker 1: the interesting thing about crypto is it's a weirdly nonpartisan issue.
Speaker 1: People who go down the rabbit hole and get the
Speaker 1: network effect of crypto really are long this and that
Speaker 1: includes people on both sides. So I think we have
Speaker 1: a lot more of that. I think at the senior
Speaker 1: regulatory level there are people who have just never used it.
Speaker 1: It's possible. It's because they're at an age where, you know,
Speaker 1: we're comfortable enough with the status quo that exploring new
Speaker 1: tech is not a thing. But but we need to,
Speaker 1: we really do, because if we lose this race to
Speaker 1: other countries, you know, if we lose control over the
Speaker 1: next Internet, that's going to be bad for generations to come. Well,
Speaker 1: part of what's going to drive the debate that's certainly
Speaker 1: in Washington is going to be I guess how people
Speaker 1: sort of view the case for crypto. Is it just
Speaker 1: a speculative asset, is it a store of values similar
Speaker 1: to gold? Or is there a use case for it
Speaker 1: as a transactional means here? What's the argument that you make. Yeah, Well, look,
Speaker 1: first of all, let me just say that the token
Speaker 1: focused approach to this conversation, I always say, is the
Speaker 1: wrong approach. So forget about the crypto tokens for a minute.
Speaker 1: Think about the networks that are the reason the crypto
Speaker 1: tokens exists. That that's all tokens are about, okay, is
Speaker 1: to induce people to participate in networks. So forget about
Speaker 1: whether you know tessos or file coin are going to
Speaker 1: be more valuable tomorrow or less valuable tomorrow. The question
Speaker 1: is do you have a thesis for the underlying thing
Speaker 1: that they're powering. So think about it this way. You
Speaker 1: don't buy Apple stock because you think that the stock
Speaker 1: is going up or down. You buy Apple stock because
Speaker 1: you think that iPhones are gonna win in the market.
Speaker 1: And if they win in the market, then by definition,
Speaker 1: your stock is going to go up in value. The
Speaker 1: same thing here. If you think Ethereum is the best
Speaker 1: platform to build financial services apps, then EF tokens are
Speaker 1: going to go up in value. Stop thinking about the
Speaker 1: sort of the technical analysis of the shape of the
Speaker 1: price movements, and start focusing on the network that's being built.
Speaker 1: The networks that win will have very valuable tokens, And
Speaker 1: it's more like that than it is about the tokens themselves.
Speaker 1: So that's why the o c C we really focus
Speaker 1: on the idea that some of these networks are payment networks.
Speaker 1: They're being used by companies to transact value from personated
Speaker 1: person be so they should be regulated like Swift and
Speaker 1: the automated clearinghouse. Right, it's very easy to understand that
Speaker 1: versus other things like file coin. It's a decentralized storage
Speaker 1: device that should be regulated like the cloud. Once you
Speaker 1: think about it like that is a very different discussion.
Speaker 1: To your point though, about the idea that it won't
Speaker 1: be banned, I mean, that's a fantastic point. There is
Speaker 1: concerned here that China may not ban it, but it
Speaker 1: may compete with it. The US may not ban it,
Speaker 1: but it may tax it into oblivion with their concern there. Yeah,
Speaker 1: I mean, look, I I think there's always a concern.
Speaker 1: But again that's not just about crypto. So when you
Speaker 1: think about taxing things into oblivion, you know, we have
Speaker 1: an administration right now that's talking about imposing a capital
Speaker 1: gains tax higher than the income tax that will kill
Speaker 1: the stock market. And yet again nobody's asking if equities
Speaker 1: are going to go the way of the DODO. Right,
Speaker 1: we have high tax periods of kind of country and
Speaker 1: low tax periods asset classes survive. Americans are highly ingenious
Speaker 1: at at finding ways of creating all you and that
Speaker 1: will happen with cryptot That's Finance US CEO Brian Brooks,
Speaker 1: And he mentioned his work in government earlier in his career.
Speaker 1: He was actually an executive at the Office of Controller
Speaker 1: of the Currency. It's an independent bureau within the Treasury
Speaker 1: Department that's involved in banking oversight, So it's certainly interesting
Speaker 1: to hear his views on regulation in his current role,
Speaker 1: and it comes at a time where we learned earlier
Speaker 1: this week, Carol, that the FED is going to have
Speaker 1: research come out on cryptocurrency later this year, and also
Speaker 1: that the Treasury wants to start understanding more about bitcoin
Speaker 1: transactions that are ten thousand dollars or more. What's interesting
Speaker 1: his whole background is banking, right, but at this point,
Speaker 1: I think people are still trying to figure out what
Speaker 1: are cryptocurrencies? Are they currencies? Are they commodities? Are they collectibles?
Speaker 1: Like I've heard all of those words to describe it.
Speaker 1: We'll still to come on Bloomberg Business Week, Basketball getting
Speaker 1: back to normal. Sword of Africk CEO Cynthia Marshall on
Speaker 1: her team's growing online presence and the business model for
Speaker 1: a limited seating capacity as the NBA postseason tips off.
Speaker 1: She has such great energy, plus cocktails with Nick Jonas
Speaker 1: and John Varvatos. Yeah, that's how we roll here at
Speaker 1: Bloomberg Business Do you Betty can't drink? Not now? Maybe later.
Speaker 1: This is Bloomberg Broadcasting from the financial capital of the world.
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
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Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg Business Week.
Speaker 1: The NBA Playoffs they are back, officially tipping off this weekend,
Speaker 1: and safe to say, it's been an unusual season for
Speaker 1: the league. After last year's playoffs were held without fans
Speaker 1: down in the Disney Bubble in Orlando, to this year,
Speaker 1: all thirty teams got back to playing in their home arenas,
Speaker 1: but all of those facilities have limited fan capacity throughout
Speaker 1: the Dallas Mavericks are back in the postseason for a
Speaker 1: second straight year. They're in a unique market with Texas
Speaker 1: among this as leading the push to ease COVID related restrictions,
Speaker 1: but it's not necessarily in line with league safety protocols.
Speaker 1: So how does the team take care of its highest
Speaker 1: paying customers? Well, still adhering to those ever changing health guidelines,
Speaker 1: That's what quick Take Chief correspondent Jason Kelly as CEO
Speaker 1: Cynthia Marshall. We've had to really step back, first of
Speaker 1: all and just figure out and it was something that
Speaker 1: I hadn't thought about at first. Is when we decided
Speaker 1: that we would increase the number of fans and have
Speaker 1: about in the arena. Is you have to prioritize our
Speaker 1: your season ticket members for one thing, we call them
Speaker 1: Club Maverick members, and figure out who actually gets these seats,
Speaker 1: how many do they get, and then you know, how
Speaker 1: are you going to configure it? And we have where
Speaker 1: you can have too four or six, so the different
Speaker 1: pods and then just the math around how do you
Speaker 1: try to maximize how many people you can actually get
Speaker 1: an arena by also being very fair to your season
Speaker 1: ticket holders. And so I've had season ticket holders call
Speaker 1: and say I really want at four seats. I was
Speaker 1: only operate too, but I don't see anybody sitting next
Speaker 1: to me. All that kind of stuff, and so we
Speaker 1: work with all that, and then just the seating configuration.
Speaker 1: You know, we have to get approval from the league, UH,
Speaker 1: to to make sure that we're following all the health
Speaker 1: and safety protocols. How many you can have in front
Speaker 1: of people and all that, UH, so so that's been
Speaker 1: quite interesting. And then of course something like a high
Speaker 1: five line. It's virtual now and you can't have fans
Speaker 1: sent in there and you know, given the players high fives,
Speaker 1: but they like that, they want that energy. So we've
Speaker 1: set it up with the big screens and all that,
Speaker 1: and so we have a virtual high five line. Uh
Speaker 1: and what's great about that is you can have the
Speaker 1: players families, uh, their babies up on the screen and
Speaker 1: all that. So that's been great. Um, and just trying
Speaker 1: to figure it out the distance that people can you know,
Speaker 1: we have to have away from the players. Uh So
Speaker 1: who can be on the lower level, who can't be
Speaker 1: on there? In fact, I don't even have red level access.
Speaker 1: I I could not to do that. I said, no,
Speaker 1: we got we gotta be safe and healthy. So it's
Speaker 1: just all of that that we just have to work through.
Speaker 1: And then of course they're the financial implications. Uh So
Speaker 1: we've tried to really step it up with online merchandising.
Speaker 1: So that that has been Jason, I'm telling you, that
Speaker 1: has been amazing. What has happened with online merchandizing. People
Speaker 1: are buying our stuff online. I mean, so we still
Speaker 1: have the city kind of blanketed with MAV's gear, but
Speaker 1: they're buying most of it online, and so how do
Speaker 1: you make those adjustments? And I mean is that more
Speaker 1: sort of back end, is that marketing? Like, how do
Speaker 1: you sort of make those adjustments in real time to
Speaker 1: make sure that you're kind of getting to the customer,
Speaker 1: the fan as it were, where they are. Well, we
Speaker 1: you know, we we we have our digital president presence,
Speaker 1: so we kind of really stepped it up around the
Speaker 1: digital standpoint, and we are actually watching who's watching us,
Speaker 1: and so we're trying to serve those audiences. So we've
Speaker 1: increased our youth audience, which I think is is amazing.
Speaker 1: So we're trying to do things to serve them. We're
Speaker 1: trying to h Taylor were not trying we are Taylor
Speaker 1: read some merchandise, uh, towards them. So we have a
Speaker 1: whole digital team, we have a content team, we have
Speaker 1: a mark keeting team that's amazing, and we and and
Speaker 1: of course you know Aaron find Go White aur you know,
Speaker 1: communications and events team. So they're watching all of that.
Speaker 1: Of first, I'm watching it too, of course, and so
Speaker 1: we're trying to respond we were to do your point.
Speaker 1: We're trying to meet people where they are, and I
Speaker 1: think I think we're doing a good job with it.
Speaker 1: I think we're doing a really good job with it.
Speaker 1: I mean, our players are really really popular and so
Speaker 1: they've had a good season and so, you know, one
Speaker 1: of the things we did when we went into this
Speaker 1: whole COVID space, we said, we gotta figure out a
Speaker 1: way to keep our players out there, uh, to keep
Speaker 1: our fans in a place where they can engage with
Speaker 1: our players, but they can't really like touch them right now,
Speaker 1: they can't see them, So how are we gonna do that?
Speaker 1: So we just put together a plan really almost for
Speaker 1: it for every player, uh and the team and just said,
Speaker 1: let's figure out ways and fun ways to kind of
Speaker 1: get them out there using a lot of you know,
Speaker 1: animation and things that we hadn't done in the class.
Speaker 1: So we've gotten real creative. That's our Bloomberg Quick Take
Speaker 1: Chief correspondent Jason Kelly with Dallas Mavericks CEO Cynthea Marshall.
Speaker 1: And we should then that MAV's owner Mark Cuban has
Speaker 1: said that the team has approval from the NBA for
Speaker 1: at least nine thousand fans for playoff games. So that's
Speaker 1: a little bit less than fifty percent capacity. At American
Speaker 1: Airlines Center, Cynthia Marshall said, they've gotten really creative, like
Speaker 1: we all have right in this environment. We're experimenting, we're
Speaker 1: figuring it out exactly. Do you're listen to Bloomberg Business Week?
Speaker 1: Coming up? We wrap up with how to start your
Speaker 1: Own to Kill a Company. That's a good lessons it
Speaker 1: with Carol Singers, songwriter Nick Jones, I know, and a
Speaker 1: claim designer John b Vedoes. They're getting their creative juices
Speaker 1: flowing in the spirit. Listen, someone had to take one
Speaker 1: for the team here and I appreciate it. You know,
Speaker 1: I'm really glad that you were the one who did that.
Speaker 1: All right, this is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik
Speaker 1: from Bloomberg Radio. And just like Bloomberg Business Week magazine
Speaker 1: wraps up every week with pursue, so did our live
Speaker 1: event the Bloomberg Business Week as well. Tim. We caught
Speaker 1: up with a dynamic do their collaborators who have worked
Speaker 1: together on Clothes of Fragrance now putting their heads and
Speaker 1: glasses together figuring out how to make a tequila and
Speaker 1: I gotta say a great cocktail with us as well.
Speaker 1: I got to sample how to do it. Yeah, I'm
Speaker 1: pretty jealous. Here's fashion designer John Varvados and singer songwriter
Speaker 1: Nick Jonas. I started the conversation by talking about the
Speaker 1: pandemic and John Varvados' personal battle with the virus. Yes,
Speaker 1: I had COVID actually before everything shut down last March,
Speaker 1: and I went up to my light house a couple
Speaker 1: hours north of the city when I had it, thinking
Speaker 1: I'd be back in the next ten days or so.
Speaker 1: And I was there for I guess about six months,
Speaker 1: five or six months. But I came back in September,
Speaker 1: and I've been back in the city SCE September. And
Speaker 1: but when I look back on it, I think that,
Speaker 1: you know, if you can find any silver lining in it,
Speaker 1: it was the quality of life that I had with
Speaker 1: my family during that period. I really had the most
Speaker 1: meals that I've had together, you know, the most together
Speaker 1: time without all the craziness um in our lives, and
Speaker 1: it was a special moment. It also made you reflect
Speaker 1: a little bit on what's really important, and like, yeah,
Speaker 1: I feel the same. How about for you, Nick, what
Speaker 1: was the past twelve thirteen months? Like? It's been quite
Speaker 1: strange to say the least, But you know, I'm grateful
Speaker 1: that family and loved ones have all been okay, and
Speaker 1: and uh, you know the silver lining for my wife
Speaker 1: and I that we've we've had time together that we
Speaker 1: may not have had had life not shut down the
Speaker 1: way it did. But uh, there's there's an enormous crisis
Speaker 1: going on in India right now. Uh, And so you
Speaker 1: know we're sending our our thoughts and prayers, and she's
Speaker 1: making a lot of great efforts and doing a lot
Speaker 1: of good there too, get to people that the help
Speaker 1: they need. And obviously, having now grown to to loving
Speaker 1: as much as I have, my my heart is breaking
Speaker 1: for what's going on there. But you know, it's been
Speaker 1: it's been wild, yeah, to say the least. And you're right,
Speaker 1: we are far from being over the crisis as a world.
Speaker 1: Having said that, I was thinking about John, what you
Speaker 1: said about. I was in my own little family bubble.
Speaker 1: We had a lot of family dinners. There was a
Speaker 1: lot of wine, there was a lot of alcohol also
Speaker 1: kind of happening. So let's talk about why we've got
Speaker 1: you guys here. We want to talk about this new
Speaker 1: tequila that you have. First of all, you've collaborated the
Speaker 1: two of you on things together. Was this just a
Speaker 1: natural progression? Talked to us about the relationship that the
Speaker 1: two of you have had. John, you want to start sure? Yeah,
Speaker 1: Nick and I'm um probably six years ago at a
Speaker 1: dinner in New York, and UH supposed to bring in
Speaker 1: collaborators and creatives together and CEOs and that type of thing,
Speaker 1: but we ended up hanging out together the whole time,
Speaker 1: talking about you know, creative music, fashion, our families, growing
Speaker 1: up in you know, in the worlds that we grew
Speaker 1: up in. And and the next thing, Nick called me
Speaker 1: and asked if I wanted to come to the studio
Speaker 1: and listen to some music that he was working on.
Speaker 1: And the night before we had been sipping tequila throughout
Speaker 1: our conversation, and when I got to the studio, he
Speaker 1: kindly had another bottle tequila sitting there, And you know,
Speaker 1: that day, we really knew that we were going to
Speaker 1: be fast friends and that there was gonna be something
Speaker 1: together that we were going to do. And we Uh
Speaker 1: first thing we started to work on was a capsule
Speaker 1: collection that I did under my brand UM and that
Speaker 1: was a lot of fun working with Nick and you know,
Speaker 1: really getting his point of view on things. And then, uh,
Speaker 1: we launched a fragrance that was kind of a crazy success,
Speaker 1: and we did a couple more and while we were
Speaker 1: working on that, we were also working on the Jonas
Speaker 1: Brothers documentary and but all of it kind of spent
Speaker 1: with a bit of tequila and enjoying those moments and
Speaker 1: reflecting on positive things in our lives and that type
Speaker 1: of thing. UM. So that's really you know, the kind
Speaker 1: of where we started, Nick, you want to take it
Speaker 1: from there, after we kind of had established that we
Speaker 1: we had this great creative flow together. We found ourselves
Speaker 1: in these great places, having these great life experiences, and
Speaker 1: there would usually be a glass tequila in our hands,
Speaker 1: and it was something we both shared a passion for
Speaker 1: and wanted to learn more about and kind of threw
Speaker 1: it out. You know, what if we started our own brand,
Speaker 1: and what if we UM, you know, made something that
Speaker 1: we could bring the same level of care and focus
Speaker 1: and attention to detail that we bring to these other
Speaker 1: projects we've done together and the things that we do separately.
Speaker 1: To tequila brand, and so we built kind of a
Speaker 1: vision for it without having the liquid, uh, the bottle
Speaker 1: anything like that, but just a big dream and idea
Speaker 1: and brought it into our partners at Stoley Group and
Speaker 1: presented them with this, this plan and this uh, this
Speaker 1: tequila brand and they loved the idea. And a couple
Speaker 1: of weeks after we were on our way down to Mexico,
Speaker 1: we first stopped in Cabo, had a great night of
Speaker 1: great food, music, tequila, and UM, we're trying to think
Speaker 1: of a name for the brand. We couldn't think of anything,
Speaker 1: but we we knew that we did it to embody
Speaker 1: the feeling that we had that night, which was great
Speaker 1: experiences with great people. And I did a toast and said,
Speaker 1: you know, to life as it should be, which then
Speaker 1: became kind of our our motto for the brand. And
Speaker 1: the following day we woke up a little bleary eyed
Speaker 1: probably and looked at the plaque from the door of
Speaker 1: the villa we were staying in and it said Villa
Speaker 1: one uh. And so we we solved our problem not
Speaker 1: being able to come up with the name. Uh. Loved
Speaker 1: the boy that sounded and the experience we had there
Speaker 1: and the next step was working on the juice. So
Speaker 1: we went down to Jaliso, Mexico, met with our Toro Fuintez,
Speaker 1: who is our master distiller. Uh. He's kind of a
Speaker 1: legend in that region. He is the godfather of tequila.
Speaker 1: He's worked on some incredible tequila brands and has a
Speaker 1: background in Kogak and champagne and so it was a
Speaker 1: really natural fit for us with him. Um, and we
Speaker 1: we got into the process of tasting tequilas and trying
Speaker 1: to decide kind of what we wanted to taste like
Speaker 1: and what the three expressions the silver represado and yeho
Speaker 1: what that what they said as a as a collection
Speaker 1: of tequilas. And it was about an eighteen month process
Speaker 1: and um, we finally got the juice there, and then
Speaker 1: John kind of took the lead and spearheaded the bottle design,
Speaker 1: which we're very proud of. This is our silver. Um.
Speaker 1: We got the repsiteo there as well. But you know, John,
Speaker 1: you should probably take it from here on the design front.
Speaker 1: But I'll just say we're very passionate about this and
Speaker 1: couldn't be more excited to be talking about it today,
Speaker 1: you know. So when we were talking about the bottle.
Speaker 1: We wanted to do something really quite beautiful and special,
Speaker 1: but also that felt kind of authentic. It wasn't just
Speaker 1: some crazy shape um that looked of the moment. We
Speaker 1: thought like, what could there be that ten years down
Speaker 1: the road, twenty years down the road, it still felt
Speaker 1: new and fresh and and so we worked on the
Speaker 1: shape together, Nick and I. We looked at a lot
Speaker 1: of glass and we thought about that and how it
Speaker 1: felt in the hand of a bar tender when they
Speaker 1: were pouring UM. So started with the shape and then
Speaker 1: worked on the details. I was working on some jewelry
Speaker 1: at that time and it was working on a bracelet
Speaker 1: and came up with this idea to add a detail
Speaker 1: that I saw from nobody else out there at the
Speaker 1: top of it with a really heavy metal cap. Also
Speaker 1: being able to like engrave the logo in the glass.
Speaker 1: And we did a lot of research on the logo
Speaker 1: because the hallmark was a really important part of our
Speaker 1: voice there. But again the most important part of this
Speaker 1: is the juice inside. It's the magic in the bottle
Speaker 1: that it is all about. Though how much sampling was
Speaker 1: going on and what were you guys looking, because you
Speaker 1: really you worked with somebody who understood champagne, who really understood,
Speaker 1: you know, a great tasting alcohol. So I'm curious what
Speaker 1: you guys were both looking for because there's not the
Speaker 1: tequila is out there and so how you distinguished yourself
Speaker 1: be there's lots of high quality tequilas out there now too,
Speaker 1: which is uh, you know, something that we see as
Speaker 1: an opportunity, you know. We um, we were thrilled to
Speaker 1: get to look at our competition and say, how can
Speaker 1: we just kind of raise the bars? John said, And um,
Speaker 1: I think that the first thing for us was about
Speaker 1: finding something unique in the distilling process. And so what
Speaker 1: our tour did was he combined the Lowland with the Highland,
Speaker 1: which gives it this very unique combination of the earth
Speaker 1: your notes from the lowland and the sweeter notes from
Speaker 1: the highland. Got is and uh, we we only know
Speaker 1: one of the brand that does this, so it's a
Speaker 1: it's gives it a really unique fresh and smooth finish
Speaker 1: along with you know, some more complex notes when you
Speaker 1: get into the Reperssado and the in Yeo obviously aged
Speaker 1: and American oak barrels um for for six to twelve
Speaker 1: months and twelve months eighteen months depending, But the silver
Speaker 1: is not age, it's it's you know, straight from the
Speaker 1: barrel basically, and it's uh my favorite for mixing cocktails,
Speaker 1: which is something that I've gotten quite into, uh during
Speaker 1: this quarantine time, getting creative with with more time on
Speaker 1: my hands, and I would have liked to have had
Speaker 1: but it lends itself to to some good cocktails. You know,
Speaker 1: we're doing this how to issue for business Week, Bloomberg
Speaker 1: business Week. You know, how do you guys do a business?
Speaker 1: You're obviously friends, you get along, You've done other collaborations.
Speaker 1: How do you do a business together? Stay friend? How
Speaker 1: do how do you do it? It's easy when when
Speaker 1: you like the people you're working with, UM, and there
Speaker 1: are obviously ups and downs and things that you've got
Speaker 1: to navigate and in any business, and certainly the Spirits
Speaker 1: Businesses is no exception. But we've got a lot of
Speaker 1: great partners and UM, a lot of people that we
Speaker 1: we build great relationships with at this point and having
Speaker 1: it start with John and I think from the top
Speaker 1: down just saying that, uh, you know, we genuinely enjoy
Speaker 1: this adventure that we're on together, and we enjoy the
Speaker 1: time we spend together. And the fact that we get
Speaker 1: to work on this brand, bring it to life in
Speaker 1: this way and work with so many great people, uh
Speaker 1: makes makes the whole experience that much better. But it
Speaker 1: doesn't Again, it doesn't mean that there aren't those moments
Speaker 1: that are really challenging. And with that, I think you
Speaker 1: just have to lean on the people that you trust
Speaker 1: most to kind of help navigate those those moments. Yeah,
Speaker 1: we look to support each other. I mean we all
Speaker 1: we we both have a lot of things going on.
Speaker 1: This is a huge priority in our lives. But we
Speaker 1: look to support each other. And and as much as
Speaker 1: we bring you know, the passion and you know the care,
Speaker 1: the end, the attention to detail to it, we also
Speaker 1: bring different things to the table, which, like any great partnership,
Speaker 1: it's kind of the whole um and the two is
Speaker 1: better than one type of mentality. That's fashion designer John
Speaker 1: Varvados and singer songwriter Nick Jonas. So, Carol, I got
Speaker 1: a request. Next time you get invited to just like
Speaker 1: learn how to make cocktails, okay, or to learn how
Speaker 1: to start tequila company. Um, can you give me an invite? Please?
Speaker 1: I don't know, have your person called my person? Okay?
Speaker 1: We can work. All right? Sounds good? All right. That
Speaker 1: wraps up the weekend edition of Bloomberg Business Week from
Speaker 1: Bloomberg Radio. Find all the interviews from the five day
Speaker 1: virtual event Bloomberg Live event called the Bloomberg Business Week.
Speaker 1: You can find it at Bloomberg Live dot com. Thanks
Speaker 1: so much for joining us, everyone. I'm Carol Mass and
Speaker 1: I'm Tim Stanebek. Be sure to tune into our Bloomberg
Speaker 1: Business Week Daily show Monday through Friday. Starts at two
Speaker 1: pm Wall Street Time on Bloomberg Radio. You can also
Speaker 1: watch our daily broadcast on YouTube just search Bloomberg Global News.
Speaker 1: Also check out our Bloomberg Business Week podcast. You can
Speaker 1: find it at Bloomberg dot com, Apple, or wherever you
Speaker 1: get your podcast. Bloom Business Week and the special how
Speaker 1: To issue. It's available on newstands now at Bloomberg dot
Speaker 1: com and on the Bloomberg Terminal. You can also see
Speaker 1: me on Bloomberg Quick Take available at Bloomberg dot com,
Speaker 1: slash put, and streaming platforms like Roku, Apple TV, Samsung TV,
Speaker 1: and more. Have a great weekend everyone. This is Bloomberg