WEBVTT - Markets, Ukraine, And Crypto (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.560 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.880 at Bloomberg dot com slash podcast. Katarina Simonetti, Senior vice 0:00:22.920 --> 0:00:27.040 president Private wealth adviser at Morgan Stanley, joins us. Katarina, 0:00:27.120 --> 0:00:29.880 on a day like today, give me an example of 0:00:29.880 --> 0:00:31.960 one of the incoming phone calls you've received from your 0:00:32.000 --> 0:00:36.240 clients today. Well, thank you for having me on the show. 0:00:36.520 --> 0:00:39.519 You know, it certainly has been, you know, a difficult 0:00:39.600 --> 0:00:43.080 year for investors, and you know specifically this day, and 0:00:43.560 --> 0:00:45.560 you know, the type of phone calls we would receive 0:00:45.560 --> 0:00:48.080 on the day like today would be focused on the 0:00:48.080 --> 0:00:53.559 fact that investors are getting uncomfortable um with the stocks 0:00:53.720 --> 0:00:57.000 and bonds that they own, and they might understand that 0:00:57.080 --> 0:00:59.320 the quality of their portfolio is really high and there 0:00:59.360 --> 0:01:02.560 really welcal asitions, but we are all human beings and 0:01:02.600 --> 0:01:06.759 it's very hard to manage through the sphere, and we 0:01:07.200 --> 0:01:10.240 tell our our clients all the time, over and over 0:01:10.280 --> 0:01:12.560 and over again to focus on the long term. But 0:01:12.680 --> 0:01:15.840 you see returns on the day like today and you 0:01:15.880 --> 0:01:19.240 know what we're so during the previous week and in combination, 0:01:19.680 --> 0:01:23.000 is getting progressively difficult for them to focus on that 0:01:23.160 --> 0:01:25.520 long term, to have that big picture you know, in 0:01:25.640 --> 0:01:28.800 mind and in our review. The only thing that we 0:01:28.840 --> 0:01:31.280 can do at the moment is go back to basis, 0:01:31.520 --> 0:01:34.720 go back to all the work that was done through 0:01:34.720 --> 0:01:39.720 the portfolio construction on making sure that the portfolio quality 0:01:39.880 --> 0:01:43.280 is really high on the income generation, to in quality 0:01:43.280 --> 0:01:47.160 of the portfolio only asset allocation between stocks and bonds, 0:01:47.200 --> 0:01:51.280 and also internationally because surprisingly many when we look at 0:01:51.320 --> 0:01:55.080 the returns and the European markets in general, um, you 0:01:55.120 --> 0:01:57.280 know they're not you know, quite quite as bad as 0:01:57.320 --> 0:01:59.760 good which seemed here in the US, making our case 0:01:59.760 --> 0:02:07.960 for at allocation, but investors are concerned in the scary time. Sorry, 0:02:08.000 --> 0:02:12.480 I feel like we haven't seen Katerina true capitulation. And 0:02:12.600 --> 0:02:15.120 I don't know if that's necessary, but it seems to 0:02:15.120 --> 0:02:17.880 be something that a lot of people want. Right now. 0:02:17.919 --> 0:02:20.520 The VIX is at thirty three, but it's taken so 0:02:20.560 --> 0:02:23.840 long for to get there. This sell off seems fairly orderly. 0:02:23.960 --> 0:02:27.679 What what what do you think we need to see? Well, 0:02:27.760 --> 0:02:31.399 bottoms are hard to printict to begin with, and the 0:02:31.440 --> 0:02:36.799 market is getting to the the the range that we 0:02:37.080 --> 0:02:40.280 quite frankly have expected. You know, we thought that on 0:02:40.360 --> 0:02:43.800 the lower side we could see anywhere from uh thirty 0:02:43.919 --> 0:02:47.480 four hundred to thirty eight hundred. We're at thirty seven 0:02:47.520 --> 0:02:51.239 seventy nine at the moment. And it's not used to 0:02:51.280 --> 0:02:54.240 anyone that we are in the bare market and you know, 0:02:54.360 --> 0:02:57.640 the rallies that we have been seeing. The one of 0:02:57.680 --> 0:03:00.200 the big things to keep in mind is that, you know, 0:03:00.240 --> 0:03:02.920 the bear market rallies, which is totally normal during the 0:03:02.960 --> 0:03:08.040 bear markets, and we have to um analyze the data 0:03:08.120 --> 0:03:11.639 that is coming in and you know see really the 0:03:11.639 --> 0:03:14.440 the path out of this bear market, which we quite 0:03:14.440 --> 0:03:16.720 frankly think is not going to last too long. We 0:03:16.760 --> 0:03:19.639 think that with all of the earnings revisions to the negative, 0:03:20.040 --> 0:03:23.200 eventually as we get through the force and force and 0:03:23.520 --> 0:03:27.400 a third and forced quarter of earning reports, we're going 0:03:27.440 --> 0:03:31.280 to get some positive news and maybe get get this 0:03:31.440 --> 0:03:33.320 catalyst that we need to get for the third and 0:03:33.360 --> 0:03:35.080 fourth quarter. You think we need to get through the 0:03:35.160 --> 0:03:38.720 second half of the year. That's what we think. Yes, 0:03:38.800 --> 0:03:43.120 we think that that we're here. But but but at 0:03:43.120 --> 0:03:45.160 the same time, you know, here's a little bit of 0:03:45.200 --> 0:03:48.560 a positivity means as difficult asitors to you know, focus 0:03:48.600 --> 0:03:51.200 on it. Right now, our up range for the year 0:03:51.440 --> 0:03:57.480 is forty two hundred to three hundred because as the inflation, 0:03:57.640 --> 0:03:59.800 you know, get get somewhat out of control and as 0:04:00.040 --> 0:04:02.480 tu more confidence in pools a little bit and we 0:04:02.680 --> 0:04:06.520 start seeing the end of this earnings revision cycles and 0:04:06.600 --> 0:04:11.160 companies get into in position where the earnings are normal. 0:04:11.240 --> 0:04:15.120 We're looking for that general market normalization. You know that 0:04:15.120 --> 0:04:17.680 that is you know, difficult to achieve. We just have 0:04:17.839 --> 0:04:23.560 been through this COVID environment. There's UM, a war in um, 0:04:23.880 --> 0:04:26.120 you know in Ukraine. That as the geo political risk. 0:04:26.240 --> 0:04:28.960 But the biggest thing is that consumer confidence is at 0:04:28.960 --> 0:04:31.520 the all time low. I mean, we have not seen 0:04:32.000 --> 0:04:35.200 the numbers at the quite frankly at the levels that 0:04:35.240 --> 0:04:37.520 they are today. And the big part of it is 0:04:37.560 --> 0:04:40.800 the price of blowing gases. Inflation is you know, just 0:04:40.800 --> 0:04:43.679 just the day to day. But at the same time, 0:04:43.680 --> 0:04:46.679 in our view, market cycles are getting hotter but shorter, 0:04:47.240 --> 0:04:50.800 and we even though the but we totally appreciate the 0:04:50.839 --> 0:04:54.840 possibility of the recession, thinks that it's not you deal 0:04:55.000 --> 0:04:57.440 that you know, it might be on the horizon, but 0:04:57.680 --> 0:05:00.680 it also is not something that is a sure thing, 0:05:01.240 --> 0:05:03.120 all right in terms of kind of getting a sense 0:05:03.160 --> 0:05:05.880 of are we seeing capitulation. I have an SMP that's 0:05:05.880 --> 0:05:08.000 off three point three percent this morning. I look at 0:05:08.000 --> 0:05:11.279 the w e I function on the Bloomberg terminal and 0:05:11.320 --> 0:05:13.680 I see the volume so far this morning is thirty 0:05:13.720 --> 0:05:17.479 three above the thirty day average so far today. So 0:05:17.560 --> 0:05:20.360 that's a little bit of something to pay attention to. Katerina, 0:05:20.440 --> 0:05:22.800 when when you talk to clients and they say, I 0:05:22.880 --> 0:05:24.960 think this is the bomb. I want to buy some stuff, 0:05:25.000 --> 0:05:26.440 you want to put some money to work. Are there 0:05:26.480 --> 0:05:32.120 any sectors today that you feel comfortable with? Absolutely? They 0:05:32.120 --> 0:05:34.440 are all these sectors that would do better than others, 0:05:34.480 --> 0:05:37.200 you know, in this type of environment. In all of 0:05:37.400 --> 0:05:40.400 you the data point the re focus on is inflation 0:05:40.640 --> 0:05:44.479 and that it might be peaking. Actually so so the 0:05:44.520 --> 0:05:50.200 sectors that dwell in this environment are utilities, healthcare, real estate, 0:05:50.760 --> 0:05:54.080 UH and consumer stables. And consumer stables is the you know, 0:05:54.120 --> 0:05:57.560 it's a little tricky because there is a price pressure 0:05:57.600 --> 0:05:59.719 there you know, but but we think that this is 0:05:59.720 --> 0:06:03.359 the after that that those Hubert defensive sectors, you know, 0:06:03.440 --> 0:06:06.560 that are positions well in this environment. But you know, 0:06:06.640 --> 0:06:09.880 speaking about inflation, even though we think that inflation might 0:06:09.920 --> 0:06:12.880 be declining, um, we think it's seemed to be higher 0:06:12.920 --> 0:06:15.160 than just stored at a level. So we always view 0:06:15.200 --> 0:06:18.840 portfolio through the prism of income. All right, Katerina, great, 0:06:18.839 --> 0:06:22.919 great stuff. As always, always appreciate getting your perspective. Katerina Semonetti, 0:06:23.400 --> 0:06:27.760 Senior vice president, a private wealth advisor at Morgan Stanley 0:06:28.000 --> 0:06:31.000 talking to her clients today, holding some hands today snp 0:06:31.120 --> 0:06:39.200 off three point. Let's get to our next guest, Matt, 0:06:39.279 --> 0:06:41.560 because I don't know what this guy does. Chris Campbell. 0:06:41.560 --> 0:06:44.360 He's a chief strategist for Kroll. I know Kroll as 0:06:44.400 --> 0:06:48.279 like the security people, right, yes, okay, but before joining Kroll, 0:06:48.560 --> 0:06:50.360 he actually had a real job. He was a former 0:06:50.360 --> 0:06:53.920 assistant secretary from the U. S. Department of Treasury. Chris, 0:06:54.000 --> 0:07:00.560 what does a assistant secretary for the U S? N correct? Like, 0:07:00.720 --> 0:07:02.920 what did you do for like day to day? What 0:07:03.000 --> 0:07:05.400 did you do? Yes, it was it was a very 0:07:05.440 --> 0:07:07.960 busy time seventeen and eighteen. We uh, you know, we 0:07:08.040 --> 0:07:11.520 had reregulation of Dodd frank And and Starman's Oxley and 0:07:11.880 --> 0:07:15.400 tax performers underway, and so many other things, cyper security 0:07:15.440 --> 0:07:18.000 and uh, you know, it's a great variety of things. 0:07:18.160 --> 0:07:20.840 There's no question it was. It was very difficult time, 0:07:21.640 --> 0:07:24.440 amazing time, but also I you know, as I like 0:07:24.560 --> 0:07:26.880 to point out, there was good economic time as well. 0:07:27.040 --> 0:07:28.840 The country was doing pretty well at that time. What 0:07:28.920 --> 0:07:31.320 I was gonna say, it wasn't that difficult about how 0:07:31.320 --> 0:07:34.640 about being the assistant treasure secretary. Now, you know, I 0:07:35.480 --> 0:07:36.880 have got a lot of respect for my friends at 0:07:36.880 --> 0:07:40.640 Treasury and I wished them a lot very well. So 0:07:40.680 --> 0:07:43.640 you also interacted with FED chair J. Pal Um during 0:07:43.680 --> 0:07:48.000 that time through you know, various type types of meaning 0:07:48.040 --> 0:07:50.400 what do you expect to hear from our Federal Reserve 0:07:50.520 --> 0:07:53.640 chairman this week? I mean it is it's ugly out there. 0:07:53.640 --> 0:07:56.280 As it relates to inflation, yeah, there's no question. Like 0:07:56.400 --> 0:07:58.200 I you know, I've been saying for a long time 0:07:58.200 --> 0:08:01.600 the inflation was unfortunate, not gonna be transitory, and unfortunately 0:08:01.600 --> 0:08:04.480 I was right. Um. You know, I have great respect 0:08:04.480 --> 0:08:07.200 for cham pale Um, and I mean you guys basically 0:08:07.200 --> 0:08:11.880 put him in there right we did was through February. 0:08:12.440 --> 0:08:16.080 So yeah, he came in and under the Trump administration, uh, 0:08:16.120 --> 0:08:19.000 you know, and was renominated by President Biden. Um, look 0:08:19.000 --> 0:08:21.000 at it's and confirmed. You know it's it's a It's 0:08:21.040 --> 0:08:23.640 a very difficult job. There's no question about it. Uh. 0:08:23.880 --> 0:08:27.600 Chairman Powell is a consensus chairman, always has been. I 0:08:27.600 --> 0:08:29.600 think one thing I always say it's great about him 0:08:29.640 --> 0:08:31.480 as he's able to talk about the economy in ways 0:08:31.480 --> 0:08:34.680 that it's really approachable and kind of democratizes the way, 0:08:34.960 --> 0:08:38.840 you know, otherwise very very unapproachable topics. But he has 0:08:39.320 --> 0:08:42.360 an incredibly difficult job, and I believe unfortunately he's this 0:08:42.440 --> 0:08:45.360 move too slow. Um. So I think that uh, he's 0:08:45.480 --> 0:08:49.599 now faced with an impossible set of of of challenges 0:08:49.679 --> 0:08:52.400 and um, he's either gonna have to choose to precimpitly 0:08:52.559 --> 0:08:55.360 raise rates or and drive the economy in the in 0:08:55.400 --> 0:08:58.400 the tank, or live with inflation and the and the 0:08:58.440 --> 0:09:00.880 really difficult things that are going to happen with that. Now. 0:09:01.679 --> 0:09:04.840 I just wondered, like, how does a failed to reserve 0:09:04.920 --> 0:09:08.480 board some smart people there, led by j Pal, how 0:09:08.559 --> 0:09:12.000 do they fall behind the curve? They do their best 0:09:12.080 --> 0:09:16.080 on economic forecasting. Um, you know I can Sherman Pal's 0:09:16.280 --> 0:09:19.360 uh approach to the FED is he's he's most he's 0:09:19.360 --> 0:09:22.559 really a consensus builder, and he's a consensus guy. He's 0:09:22.640 --> 0:09:26.160 very even keel um and uh, you know that approach 0:09:26.160 --> 0:09:30.119 would in almost every other circumstance would work. But this unfortunate. 0:09:30.240 --> 0:09:31.800 Right now, this is a word a time where I 0:09:31.800 --> 0:09:34.280 think inflation is just you know, it got away from them. 0:09:34.360 --> 0:09:39.040 They forecasted inappropriately, unfortunately, and now there's a real challenge 0:09:39.040 --> 0:09:41.080 ahead and they're gonna have to find ways of either 0:09:41.160 --> 0:09:45.200 shocking the system by raising rates precipitously, um, because there's 0:09:45.240 --> 0:09:50.800 so much outside of their control, supply chains, um, you know, Russia, UM, China, uh, 0:09:51.240 --> 0:09:54.080 kind of regulation and I mean I was gonna just 0:09:54.120 --> 0:09:56.440 point out that it's not all about the FED. I 0:09:56.520 --> 0:09:59.840 know that. Um. There was there were a few days 0:10:00.120 --> 0:10:02.240 a couple weeks ago when the administration wanted us to 0:10:02.240 --> 0:10:07.119 believe that the FED was solely responsible for inflation or deflation, 0:10:07.240 --> 0:10:11.160 like passing the buck. But obviously there are other things. 0:10:11.240 --> 0:10:15.040 If you spend five trillion dollars in a year, if 0:10:15.080 --> 0:10:18.400 you um, you know, try and regulate oil companies out 0:10:18.400 --> 0:10:22.439 of existence, then you're gonna have some, um, some some 0:10:22.440 --> 0:10:24.559 some feedback from that. Right. All I can tell is 0:10:24.559 --> 0:10:27.400 you're a very smart guy. No, there's like, there's no question. 0:10:27.440 --> 0:10:29.800 I mean I got you know, from my advantage point, 0:10:29.800 --> 0:10:32.679 Congress and passed and spent way too much money. Um. 0:10:32.720 --> 0:10:35.520 You know, there was some of that that's really necessary. 0:10:35.400 --> 0:10:37.400 That the government came in a shutdown the economy, so 0:10:37.440 --> 0:10:39.360 there was there was a real challenge there for a while. 0:10:39.720 --> 0:10:44.240 But that we Congress certainly overspent um and both on 0:10:44.280 --> 0:10:46.320 the fiscal and monitary side and quantity of using and 0:10:46.320 --> 0:10:49.120 it continued for so long, and so there you know, 0:10:49.400 --> 0:10:51.440 on both sides of the of the equation are to 0:10:51.520 --> 0:10:54.720 blame here um, And now we're in significant debt. What 0:10:54.920 --> 0:10:56.560 one thing is not talked about is that you know 0:10:56.600 --> 0:11:00.520 that again the impossible challenge of raising a just rates 0:11:00.720 --> 0:11:03.239 is also going to make the fiscal side almost impossible 0:11:03.280 --> 0:11:07.120 because now most of us are THEAXX period dollars that 0:11:07.120 --> 0:11:09.160 they're gonna be collected are going to be spent on 0:11:09.240 --> 0:11:13.160 servicing our nation's debt. And doesn't seem like people talk 0:11:13.200 --> 0:11:17.880 about fiscal solution or a policy solution to this. We 0:11:17.960 --> 0:11:20.520 only talk about what can the Fed do? And I appreciate. 0:11:20.600 --> 0:11:22.760 That's fun for us. We talked about the FED all 0:11:22.840 --> 0:11:28.280 day long. Um. But there the difficulty is in Washington 0:11:28.320 --> 0:11:30.040 as well. Right, they can't come in and just cut 0:11:30.120 --> 0:11:34.959 taxes and um, well they can't do anything stimulative, right, 0:11:35.520 --> 0:11:38.920 Otherwise that risks boosting inflation even further. Yeah, Like, I mean, 0:11:38.960 --> 0:11:42.000 they're they're gonna I know, I know my friends and Washington, 0:11:42.040 --> 0:11:43.760 I've worked with them a long time. They're gonna want 0:11:43.800 --> 0:11:45.800 to spend more money, There's no question. And as the 0:11:45.840 --> 0:11:49.640 economy continues to degrade, they're gonna want to provide assistance 0:11:49.640 --> 0:11:52.040 to families, and so it's gonna be a great pressure 0:11:52.080 --> 0:11:54.560 on them to spend more money. You know. But fast 0:11:54.600 --> 0:11:57.480 forward to November, likely is going to be a divided government. Um. 0:11:57.520 --> 0:12:01.760 And really in those situations, if there is a willingness um, 0:12:01.840 --> 0:12:04.400 you know, the president being democratic, perhaps the Congress being 0:12:04.440 --> 0:12:07.520 Republican at that time, there could be a bigger solution 0:12:07.559 --> 0:12:09.280 that we we could be we could be seeing. But 0:12:09.400 --> 0:12:12.199 until then, I see nothing happening in Washington. DC is 0:12:12.240 --> 0:12:15.959 really broken. Yeah, I guess, Chris, how about a recession? 0:12:16.040 --> 0:12:18.400 Is that something that you're talking to your clients about 0:12:18.520 --> 0:12:21.960 is a real risk and if so, when, maybe so, 0:12:22.040 --> 0:12:24.439 I think it's gonna happen sooner rather than later. Um. 0:12:24.480 --> 0:12:26.920 You know, even again, I'm talking about before. The FAT 0:12:26.920 --> 0:12:29.480 has an impossible set of choices ahead of them. But 0:12:29.520 --> 0:12:31.520 one of the choices they have, and likely the choices 0:12:31.520 --> 0:12:34.560 they're gonna take, is a is a participitous increase in 0:12:34.559 --> 0:12:37.240 in interest rates that is for sure going to lead 0:12:37.240 --> 0:12:40.679 to us at recession. And I like to say, Um, 0:12:40.720 --> 0:12:43.200 there's about half of our country who live paycheck to paycheck, 0:12:43.240 --> 0:12:45.640 and so if we go into recessionary times and if 0:12:45.679 --> 0:12:48.600 we can't get inflation under control, we're in stiflation. That 0:12:48.640 --> 0:12:51.319 means that the majority of our our our fellow Americans, 0:12:51.320 --> 0:12:53.320 you're not gonna be able to afford food and gas 0:12:53.360 --> 0:12:56.040 and clothing. That's gonna be a real challenge. It's gonna, 0:12:56.120 --> 0:12:59.360 you know, put socio economic pressure, economic pressure and everything 0:12:59.360 --> 0:13:02.960 else absent what the markets are going through. So what 0:13:03.000 --> 0:13:06.240 do you expect from the FED on Wednesday and the 0:13:06.280 --> 0:13:08.320 next few meetings. I think they're going to have to 0:13:08.320 --> 0:13:12.480 start shocking um. And it's it's uncharacteristic of Cherman Powell 0:13:12.480 --> 0:13:14.079 and this FED, but I just can't see him doing 0:13:14.120 --> 0:13:16.920 it right. You can't see him coming out in surprising markets. 0:13:16.920 --> 0:13:19.600 So now as we ratchet up expectations for seventy five, 0:13:20.240 --> 0:13:22.960 he's gonna have to do a hundred like I like, 0:13:23.040 --> 0:13:24.920 I just I think he's gonna have to go beyond 0:13:24.960 --> 0:13:26.920 fifty um do something. I don't think he's you know 0:13:26.960 --> 0:13:29.720 that the German pal is not Paul Wolkers. It's not 0:13:29.720 --> 0:13:31.439 going to follow that path. But I think he has 0:13:31.480 --> 0:13:32.760 to do some things that are that are going to 0:13:32.800 --> 0:13:36.000 be uncharacteristic of him and what the markets don't expect 0:13:36.240 --> 0:13:38.200 in order to do something that's going to get inflation 0:13:38.280 --> 0:13:41.640 under control. Chris, good stuff, man, good stuff. You're coming back. 0:13:41.679 --> 0:13:43.960 By by the way, we just kind of did a 0:13:43.960 --> 0:13:45.840 little vote. You're gonna come back. You're pretty good, guess. 0:13:45.920 --> 0:13:48.240 Chris Campbell, chief strategist for Cool. We like to talk 0:13:48.280 --> 0:13:51.920 about education. Two NBA from the Thunderbird School of Global Management. 0:13:51.960 --> 0:13:54.680 I love that, uh, and then a bachelors from the 0:13:54.720 --> 0:13:57.600 University of California at Santa Barbara. I think students should 0:13:57.640 --> 0:14:00.200 pay the state of California to go to Santa But 0:14:00.320 --> 0:14:04.200 that's how beautiful do Santa Barbara is mean, I know, 0:14:04.280 --> 0:14:07.679 but they should pay more because they're literally on the 0:14:07.720 --> 0:14:10.079 beach and one of the most beautiful spots in the country. 0:14:10.679 --> 0:14:16.520 Good stuff there. Let's switch gears a little bit talk 0:14:16.920 --> 0:14:20.280 geo politics, and there's absolutely no one better to do 0:14:20.360 --> 0:14:22.960 that with than Jack Divine. He's a founding partner and 0:14:22.960 --> 0:14:25.880 president of the ark And Group. Awesome. We're talking a 0:14:26.040 --> 0:14:29.040 thirty two year veteran of the c I, a former 0:14:29.080 --> 0:14:33.280 acting CIA Director of Operations, and headed CIA's Afghan Task 0:14:33.280 --> 0:14:36.960 Force from five to eighty seven. Remember kids, that was 0:14:37.000 --> 0:14:40.280 when the Soviets were there. Jack. You know you're also 0:14:40.360 --> 0:14:42.360 the author of a book that I read last year, 0:14:42.440 --> 0:14:45.800 Spymaster's Prison to Fight Against Russian Aggression. Good stuff. I 0:14:45.880 --> 0:14:50.720 highly recommend it. I cannot really fathom how much President 0:14:50.720 --> 0:14:55.560 Putin has miscalculated, seemingly in Ukraine. What do you make 0:14:55.760 --> 0:14:59.360 of the whole situation here over the last four months. Well, 0:14:59.360 --> 0:15:02.120 I don't think you're the only one surprised. I mean, 0:15:02.360 --> 0:15:05.600 I'm sure he is UH and his intelligence with salty 0:15:05.680 --> 0:15:08.600 and there's no question about it. The key question was 0:15:08.640 --> 0:15:11.240 whether or not the Ukrainians would fight, and I think 0:15:11.240 --> 0:15:16.080 he grossly underestimated that because of the relatively little resistancy 0:15:16.760 --> 0:15:20.120 UH faced in fourteen when he went into the Crimea 0:15:20.680 --> 0:15:24.280 and the thumb buss. So I think he thought he 0:15:24.360 --> 0:15:27.280 had a cake walk, and I think he's surprised by 0:15:27.320 --> 0:15:29.440 his own army. I think he thought he had a 0:15:29.520 --> 0:15:33.360 drugger army. Is he's invested in high end weaponry but 0:15:33.480 --> 0:15:36.960 didn't look at the basic blocking and tackling of logistics 0:15:37.040 --> 0:15:39.000 and those things that made you to seas As Grant 0:15:39.160 --> 0:15:43.720 win the civil war. Alright, so he's made some mistakes. 0:15:43.800 --> 0:15:46.440 But how is this likely to play out? How Jack, 0:15:46.480 --> 0:15:51.280 do you expect this to end? Well, I think everybody thought, 0:15:51.400 --> 0:15:54.720 you know, let's get Zelisio on a plane before it's 0:15:54.760 --> 0:15:56.680 too late. And this is in the first couple of weeks, 0:15:56.760 --> 0:16:00.480 but it quickly became clear that's what we're talk about 0:16:00.480 --> 0:16:03.560 a second ago, that the army and its structure this week, 0:16:03.680 --> 0:16:08.200 So the Russians basically got put pushed back. Now, I 0:16:08.320 --> 0:16:10.840 think you're at a point where the Russians are using 0:16:10.920 --> 0:16:15.920 heavier artillery and so on, and they're making slow but 0:16:16.320 --> 0:16:19.320 steady progress, but it is slow and bloody. I also 0:16:19.400 --> 0:16:22.120 think there's a catch up here. I think as the 0:16:22.640 --> 0:16:26.880 artillery has arrived through the uh for the Ukrainians, they're 0:16:26.960 --> 0:16:29.480 going to be pushing back again. So you're going to 0:16:29.560 --> 0:16:34.040 see more counter pushing in somewhere not too far out, 0:16:34.080 --> 0:16:36.480 I would say, before before the end of the year, 0:16:36.520 --> 0:16:40.520 if not Thanksgiving. You're going to find somewhat of a 0:16:40.600 --> 0:16:42.720 stalemate where they can make some gains and then they 0:16:42.800 --> 0:16:46.160 pushed back. Ukrainians make gains and they get pushed back. 0:16:46.280 --> 0:16:49.640 We haven't reached that point and there, but it will arrive, 0:16:49.840 --> 0:16:54.840 and that because the Russians cannot win over the occupy 0:16:54.960 --> 0:16:58.920 the Ukraine and Ukrainians unfortunately won't be able to reoccupy 0:16:59.080 --> 0:17:03.400 all of the suratory without significant cause. So I think 0:17:03.440 --> 0:17:07.560 we're probably looking very soon to the stalemate where everyone 0:17:07.760 --> 0:17:10.080 was going to feel that this is going to be 0:17:10.880 --> 0:17:13.159 a battle as far as it goes. There will may 0:17:13.240 --> 0:17:16.720 not be a negotiated settlement both sites made. Just lower 0:17:16.800 --> 0:17:18.760 the firing level and it will go on like it 0:17:18.880 --> 0:17:22.680 has Pointing four team. But we're looking now, I think 0:17:22.720 --> 0:17:26.920 it closely where the standoff will be. All right, Well, 0:17:27.040 --> 0:17:30.280 that's it's obviously a tragedy in so many ways, but 0:17:30.680 --> 0:17:33.080 I love to get your your take on that. Jack. 0:17:33.320 --> 0:17:35.280 Let me also ask you what you think about what 0:17:35.400 --> 0:17:38.480 we're seeing in this country and the market fallout from 0:17:38.520 --> 0:17:41.480 that inflation at eight point six percent, the highest since 0:17:41.800 --> 0:17:44.960 the early eighties, the markets really tanking for the third 0:17:45.040 --> 0:17:47.359 day in a row. You're speaking, I believe you're speaking 0:17:47.400 --> 0:17:49.800 at the S three Air conference at the New York 0:17:49.880 --> 0:17:54.040 Stock Exchange. It's a company on whose board you serve 0:17:54.280 --> 0:17:57.560 and has become really noted in the financial industry for 0:17:58.240 --> 0:18:03.000 it's short data. What are you talking about out there, Well, 0:18:03.240 --> 0:18:06.480 we already get the experts that are at the Summer 0:18:06.600 --> 0:18:11.440 that address that. I'm more of a military political analysts, 0:18:11.480 --> 0:18:14.680 but I would say, frankly, if we're looking in the 0:18:14.760 --> 0:18:18.040 context of the Ukraine, it's it's there's a cost here, 0:18:18.480 --> 0:18:20.919 we're paying that cost. But some are the some are 0:18:20.920 --> 0:18:24.520 the Russians. But there are overarching issues in the economy 0:18:24.560 --> 0:18:27.919 that I think many many experts on your show understand. 0:18:28.480 --> 0:18:29.520 You know, where are we going to go with the 0:18:29.600 --> 0:18:33.800 interest rates? And I think be enabled to monitor various 0:18:34.200 --> 0:18:41.280 um UH variables rather as UH as the Street Group does, 0:18:42.640 --> 0:18:44.879 enable analysts to have a better handle on the speed 0:18:44.960 --> 0:18:48.119 in which variations are taking place. If you want to 0:18:48.520 --> 0:18:52.000 gut reaction. My own gut reaction is the platon is 0:18:52.040 --> 0:18:55.320 going to be with us a while an interest increased 0:18:55.359 --> 0:18:59.600 interest rates are coming down down the road, and it's 0:19:00.000 --> 0:19:03.440 any going to be a difficult year, not only for 0:19:03.520 --> 0:19:06.119 the United States, not only for Russia Ukraine, but probably 0:19:06.440 --> 0:19:10.080 probably worldwide, including the Chinese. Hey Jack, you just mentioned 0:19:10.119 --> 0:19:11.920 the Chinese. I wonder what they're the Chinese. What do 0:19:11.960 --> 0:19:13.879 you think China is taking away from what's happening in 0:19:14.280 --> 0:19:17.960 Ukraine as it relates as Taiwan. So here we're seeing 0:19:18.000 --> 0:19:22.200 a lot of static and and chest speeding uh and 0:19:22.359 --> 0:19:25.240 from China right now about they'll they'll go to the 0:19:25.320 --> 0:19:30.359 last man to preserve there are countries as if we 0:19:30.440 --> 0:19:34.639 were going to attack. My senses, they looked carefully, very carefully, 0:19:35.280 --> 0:19:37.320 what is happening to the Russians? And I think they're 0:19:37.359 --> 0:19:40.240 asking itself, we don't want to make the mistakes Putin 0:19:40.320 --> 0:19:43.919 made that looking at Taiwan, attacking an island, by the way, 0:19:43.960 --> 0:19:45.719 I will tell you a much more difficult thing than 0:19:45.720 --> 0:19:49.440 the land work, and looking at the cost of the 0:19:49.800 --> 0:19:52.440 Russians now paying and the cost that they would pay, 0:19:52.480 --> 0:19:55.040 and it would throw off their economic game immensely. My 0:19:55.160 --> 0:19:59.240 honest opinion is that I think when they looked at it, 0:19:59.359 --> 0:20:01.159 whatever they they had in their mind, a lot of 0:20:01.200 --> 0:20:06.119 people talked about. But my my view is it's pushed 0:20:06.160 --> 0:20:08.720 off to an indefinite period. I think they need they're 0:20:08.760 --> 0:20:13.359 more concerned about solidifying or economic and power in the region. Uh, 0:20:13.720 --> 0:20:18.360 but a war would totally disrupt their economy, totally disrupt 0:20:18.800 --> 0:20:20.840 their placed in the world. So I think that's it's 0:20:20.880 --> 0:20:26.280 further off and a lot can happen between and many 0:20:26.920 --> 0:20:29.119 of the military and trying to think they need to 0:20:29.200 --> 0:20:32.160 have a Taiwan part of it. So I think they've 0:20:32.320 --> 0:20:36.119 they've seen this and this is actually helpful and not 0:20:36.280 --> 0:20:39.359 having a confrontation with them. All right, Jack, awesome stuff 0:20:39.400 --> 0:20:41.679 as always, Jack Divine, founding partner president of the ark 0:20:41.760 --> 0:20:51.000 And Group. They are obviously obsessed with what's going on 0:20:51.240 --> 0:20:55.240 in markets today, and that's not just what's happening in 0:20:55.480 --> 0:20:58.880 stocks and bonds. Crypto has become an increasingly important part 0:20:59.600 --> 0:21:02.320 of fine financial markets. Nick Carter joins us right now, 0:21:02.480 --> 0:21:04.679 who um kicked it off? And Nick correct me if 0:21:04.680 --> 0:21:08.080 I'm I'm wrong here. As one of the first analysts 0:21:08.160 --> 0:21:12.800 on the street following crypto before he founded his venture 0:21:12.960 --> 0:21:17.359 crypto venture company Castle Island and also founded coin Metrics. UM, 0:21:18.280 --> 0:21:23.399 what is going on? It's not just Bitcoin that's failing 0:21:23.400 --> 0:21:26.560 as an inflation hedge. I note that gold also hasn't 0:21:26.600 --> 0:21:30.080 performed terribly well. But the drops that we've seen in 0:21:30.160 --> 0:21:38.080 crypto UM far outperform or underperform anything else. Why well, UM, 0:21:38.400 --> 0:21:40.520 then thanks for having me on. Yeah, the crypto markets 0:21:40.560 --> 0:21:43.880 going through its own little de leveraging cycle here. UM, 0:21:44.119 --> 0:21:47.240 there are a bunch of lenders that are blowing up 0:21:47.880 --> 0:21:51.879 and uh, in fact, some of their positions are visible. Uh, 0:21:51.920 --> 0:21:55.320 their liquidation thresholds are visible on the blockchain, and so 0:21:56.119 --> 0:21:58.960 there's an element of stop hunting that's also going on 0:21:59.040 --> 0:22:02.320 in the market right now with UM, So that would 0:22:02.359 --> 0:22:05.160 probably explain some of the reflexivity. But yes, we are 0:22:05.240 --> 0:22:08.879 having our own little de leveraging cycle, obviously not helped 0:22:09.040 --> 0:22:12.000 by the fact that financial conditions are getting very, very tight. 0:22:12.280 --> 0:22:15.200 So it was already tough before Tara us D and 0:22:15.400 --> 0:22:21.920 Luna that UM catastrophic collapse. Is that starting to UM 0:22:22.400 --> 0:22:25.240