WEBVTT - Credit Suisse, Crypto, Markets, and Deere (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 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.000 at Bloomberg dot com Slash podcast. Looking at Credit Swiss 0:00:23.000 --> 0:00:26.880 trading in Switzerland three point six four five Swiss francs. 0:00:27.440 --> 0:00:30.960 That is unbelievable, um for one of the leading financial 0:00:30.960 --> 0:00:34.960 services companies in Europe, one of the two stellar investment 0:00:34.960 --> 0:00:38.919 banks wealth managers in the country of Switzerland. I need 0:00:38.920 --> 0:00:40.479 to figure out what's going on because I saw this 0:00:40.520 --> 0:00:43.440 headline on the Bloomberg terminal. Credit Swiss saw eighty eight 0:00:43.440 --> 0:00:47.199 billion dollars outflows as confidence slumps, and I remember from 0:00:47.200 --> 0:00:49.279 the Great Financial Crisis. When you see headlines like that, 0:00:49.720 --> 0:00:52.760 whether it's Bear Sterns or Lemon, that's when it gets 0:00:52.920 --> 0:00:56.160 really ugly. Alison Williams, she's a senior Global Banks and 0:00:56.160 --> 0:01:00.400 Asset Managers analyst at Bloomberg Intelligence. Alison, how bad are 0:01:00.520 --> 0:01:06.440 things at Credit Suite? I mean, those outflow numbers were stunning. 0:01:07.160 --> 0:01:13.600 This morning, and to put it in perspective, the outflows UM, 0:01:13.640 --> 0:01:16.840 you know, just in these several weeks are more than 0:01:16.880 --> 0:01:24.039 the inflows of and combined. And I mean that I 0:01:24.080 --> 0:01:27.600 guess the good news is that they said that things 0:01:27.640 --> 0:01:32.479 have stemmed but not reversed. And so they had said 0:01:32.600 --> 0:01:36.199 in October that they saw UM outflows in the first 0:01:36.200 --> 0:01:39.120 couple of weeks. UM. They pointed to social media and 0:01:39.160 --> 0:01:42.000 a lot of the reports at the time that UM, 0:01:42.040 --> 0:01:45.880 you know, I think this is similar to what we've 0:01:45.920 --> 0:01:48.280 seen in the past, where headlines can kind of UM 0:01:48.400 --> 0:01:52.800 drive actual risk to UM the fundamentals of a business, 0:01:52.840 --> 0:01:55.760 and they had pointed to that UM. But I think 0:01:55.800 --> 0:01:59.440 certainly no one expected UM the severity that we saw. 0:01:59.520 --> 0:02:03.000 So let me just take this down to the very 0:02:03.040 --> 0:02:07.000 basic level. For those of our listeners who aren't well 0:02:07.160 --> 0:02:09.640 versed in Credit Sweets. You and Paul obviously know the 0:02:09.680 --> 0:02:14.840 bank inside now, but UM Switzerland has two big banks, 0:02:14.919 --> 0:02:18.960 Ubs and Credit Sweets, and they're big businesses are wealth management. 0:02:18.960 --> 0:02:21.720 They take care of money for high net worth individuals, 0:02:21.720 --> 0:02:24.280 stemming all the way back to the days when you 0:02:24.320 --> 0:02:26.640 had numbered accounts and everything was super secret and your 0:02:26.680 --> 0:02:30.320 money was safe there right, So the concern is those 0:02:30.800 --> 0:02:35.680 rich people, international wealth, they're pulling their money out of 0:02:35.680 --> 0:02:41.040 credit sweez because they have existential concerns. Is that right? Um, 0:02:41.040 --> 0:02:44.240 you know it is right. I mean again, when the 0:02:44.280 --> 0:02:50.360 headlines were coming across UM, you know talking about the 0:02:50.400 --> 0:02:53.919 headlines really focused on the bank's need for capital. Obviously 0:02:53.960 --> 0:02:57.520 that that's something that concerns investors. Um, they've had so 0:02:57.560 --> 0:03:01.359 many prices, they've had huge losses tied to Artagos and 0:03:02.280 --> 0:03:06.600 um other sort of big giant hedge fund scams and 0:03:06.800 --> 0:03:12.160 bad risk management, and now they need to raise four billion, correct, 0:03:12.240 --> 0:03:14.760 And so you know, the good news is that they 0:03:14.800 --> 0:03:18.880 are on that path. So they are trying to study 0:03:19.480 --> 0:03:21.720 the downside, if you will, in terms of shoring up 0:03:21.720 --> 0:03:25.000 the capitol. The bad news is they announced a one 0:03:25.040 --> 0:03:29.040 point five billion pre tax loss for the quarter. I 0:03:29.040 --> 0:03:33.239 think consensus was about seven hundred and thirty million francs. 0:03:33.960 --> 0:03:37.240 So that is a setback in terms of some of 0:03:37.240 --> 0:03:40.560 the capitals that they're raising. It's unclear what types of 0:03:40.640 --> 0:03:44.360 charges might be included there. But um, you know, the 0:03:44.440 --> 0:03:47.600 concerning thing at this point is just as I said, 0:03:47.840 --> 0:03:50.480 the fact that we're seeing outflows or they're seeing outflows 0:03:50.520 --> 0:03:52.680 in their core business. So the wealth and asset measurement 0:03:52.720 --> 0:03:56.080 businesses as part of the new strategy or businesses, they're 0:03:56.080 --> 0:03:59.640 focusing on their restructuring the investment bank, but they're going 0:03:59.720 --> 0:04:01.920 to see a loss in both the wealthy unit and 0:04:01.960 --> 0:04:06.400 the investment banking unit in the quarter um, and so 0:04:07.640 --> 0:04:10.520 the key for them is really going to be two 0:04:11.600 --> 0:04:14.080 you know, reverse course with the with these flows, I 0:04:14.120 --> 0:04:16.640 think that's not only is it a bad quarter, but 0:04:16.720 --> 0:04:20.200 the flows are sort of an indication of business health, 0:04:20.400 --> 0:04:25.080 and so that sort of is cast out on the 0:04:25.120 --> 0:04:29.200 overall strategy going forward. Clients pulled eight billion dollars. They 0:04:29.279 --> 0:04:32.560 need four billion dollars in capital. Clients pulled eighty eight 0:04:32.560 --> 0:04:35.960 billion dollars out in a few weeks. Crazy numbers, Alison. 0:04:36.240 --> 0:04:37.640 I think what I learned one of the things I 0:04:37.680 --> 0:04:41.279 learned during the Great Financial Crisis is when other firms 0:04:41.360 --> 0:04:44.719 won't trade with me, that's when I really got a problem. 0:04:44.960 --> 0:04:48.880 Is credit swiss at that point? Yet, Well, the I 0:04:48.920 --> 0:04:51.880 guess the the important news is that they've really moved 0:04:51.920 --> 0:04:55.960 away from a lot of those businesses. So prime brokerage 0:04:56.040 --> 0:05:01.359 is the most um prone to those concerns. Right, So, um, 0:05:01.400 --> 0:05:04.560 if your hedge fund clients start pulling balances from you 0:05:04.680 --> 0:05:08.200 and won't trade with you. UM. Things can very quickly unravel. 0:05:08.320 --> 0:05:12.560 But they exited that business after the Arctic goes UM hit. 0:05:12.600 --> 0:05:15.080 They announced that they were exiting it, so that that business, 0:05:15.160 --> 0:05:17.400 you know, nine percent of revenues had already kind of 0:05:17.440 --> 0:05:23.280 gone away. And then the securitized products trading business UM, 0:05:23.279 --> 0:05:26.400 which is another big business for them, is a business 0:05:26.440 --> 0:05:30.960 that they're UM selling to Apollo. UM. The interesting wrinkle 0:05:31.040 --> 0:05:33.160 there is that it was originally supposed to be Apolo 0:05:33.200 --> 0:05:36.200 and Pink Pimco UM, but it seems like we haven't 0:05:36.200 --> 0:05:39.200 gotten any financial details yet there. But it's really Apollo 0:05:39.279 --> 0:05:42.000 that's going to be taking over that business, and so 0:05:42.120 --> 0:05:47.039 that the trading effort that they're retaining is really slimmed 0:05:47.080 --> 0:05:49.760 down at this point. And Allison thirty seconds, is there 0:05:49.800 --> 0:05:51.680 any chance the government steps in here one way or 0:05:51.720 --> 0:05:54.239 the other, either supports the bank or allows a merger 0:05:54.279 --> 0:05:57.000 with the U b S. I don't think they need 0:05:57.040 --> 0:06:00.719 to at this point. UM. You know that that's always 0:06:00.720 --> 0:06:04.640 something that's a consideration. I don't think that they would 0:06:04.680 --> 0:06:06.720 force a merger with you guys, and I'm not sure 0:06:06.720 --> 0:06:10.279 if that necessarily solves anything, UM, But again we do 0:06:10.360 --> 0:06:12.919 see we do need to see things right it but 0:06:13.000 --> 0:06:15.720 the capital raise and all the business changes that we 0:06:15.800 --> 0:06:18.320 just talked about I think are gonna help limit the 0:06:18.320 --> 0:06:22.039 downside there, all right, good stuff as always, Matt. You know, 0:06:22.040 --> 0:06:24.360 Allison is on a vacation day today, a t day, 0:06:24.440 --> 0:06:26.880 Yet she still makes time to talk to us, so 0:06:26.920 --> 0:06:30.719 we appreciate that. Alison Williams, Senior banks annalyst for Bloomberg Intelligence. 0:06:30.720 --> 0:06:33.719 She's old school, she works big time, folks. She's been 0:06:33.760 --> 0:06:37.200 coming to banks for decades, first of Morgan Stanley Investment Management, 0:06:37.560 --> 0:06:40.080 where she was the shareholders some of the major banks 0:06:40.120 --> 0:06:43.720 around the world, and now as Bloomberg Intelligence senior banks 0:06:43.720 --> 0:06:47.279 analysts based in our Princeton, New Jersey office. Good stuff 0:06:47.279 --> 0:06:54.440 to check in with, Allison. This is Bloomberg looking at 0:06:54.440 --> 0:06:57.760 the Bloomberg Dollar Index itself about five point five percent 0:06:57.880 --> 0:07:02.000 from its recent high, one of the drivers fueling you know, 0:07:02.040 --> 0:07:04.280 a little bit more than a ten percent pop here 0:07:04.279 --> 0:07:06.320 in the SMP five index. I want to get a 0:07:06.360 --> 0:07:07.960 sense of kind of what's going on out there in 0:07:08.040 --> 0:07:10.400 the markets on a day to day basis. We do 0:07:10.400 --> 0:07:14.080 that with Vince Signarella, global macro Strategist for Bloomberg news, Vince, 0:07:14.160 --> 0:07:16.680 have you seen peak US dollar at least maybe I 0:07:16.720 --> 0:07:19.160 don't know for the short term. Yeah, I think so. 0:07:19.320 --> 0:07:21.239 That it made the point about the high er smp 0:07:21.560 --> 0:07:26.200 uh five d they've been in a reverse correlation, an 0:07:26.240 --> 0:07:31.320 inverse correlation since it was from March at west in August. Uh, 0:07:31.320 --> 0:07:33.760 it's holding for now and with a bid and risk, 0:07:34.280 --> 0:07:38.000 I would expect the dollar to continue to suffer. Talk 0:07:38.040 --> 0:07:41.280 to me about the Bloomberg Dollar Index itself, Well, what's 0:07:41.280 --> 0:07:45.760 the differentiation here between that index and the d x Y, 0:07:45.880 --> 0:07:50.400 which used to be kind of the traditional Street benchmark. Yeah, well, 0:07:50.400 --> 0:07:53.080 you're actually talking to probably the expert on the subject. 0:07:53.200 --> 0:07:56.440 The Bloomberg Dollar Index was derived from the Wall Street 0:07:56.480 --> 0:07:58.760 Journal Dollar Index, of which I am the co inventor. 0:08:00.120 --> 0:08:04.720 Very cool. The difference is, uh, it includes many, many 0:08:04.720 --> 0:08:06.840 more currencies than the Ice Dollar Index. The Ice Dollar 0:08:06.920 --> 0:08:11.920 index was recently revamped. It was initially based on just 0:08:12.040 --> 0:08:16.520 four currencies from basically trade data in ninety two. Uh. 0:08:16.600 --> 0:08:19.400 The dollar doesn't move so much on trade data anymore. 0:08:19.400 --> 0:08:24.960 It moves on financial flows, US, fixed income flows, etcetera. 0:08:25.280 --> 0:08:27.960 You know it does. Trade does affect the dollar, no doubt, 0:08:28.720 --> 0:08:30.920 but the financial flows are a much much bigger effect, 0:08:30.920 --> 0:08:33.840 and that's what the Bloomberg Dollar Index is taken into account, 0:08:34.360 --> 0:08:38.120 including more currencies, so it's a much broader level for 0:08:38.160 --> 0:08:42.120 the dollar. The Ice Dollar Index, I think, uh, these days, 0:08:42.200 --> 0:08:44.640 fifty eight percent of it is composed of the Euro, 0:08:45.360 --> 0:08:48.839 so it's it's almost really a euro index than it 0:08:48.960 --> 0:08:51.640 is a straight dollar index. But it is widely traded, 0:08:51.679 --> 0:08:53.280 so it does get a lot of press. But but 0:08:53.360 --> 0:08:56.480 the thing is it's often quoted, right. I'll hear Tom 0:08:56.559 --> 0:08:58.559 throw around d x y instead of b B d 0:08:58.760 --> 0:09:02.080 x y, and then I think, yeah, that is how 0:09:02.200 --> 0:09:05.760 not as useful? You know, Yeah, I think that's just 0:09:05.840 --> 0:09:10.080 the old habit because it's been around for fifty years. Um, 0:09:10.120 --> 0:09:12.160 you know in the Bluemer Dollar Index is you know, 0:09:12.200 --> 0:09:16.640 a handful of years. I mean they've they've retro retrot 0:09:16.679 --> 0:09:19.560 it to capture the past, but it's realistically only been 0:09:19.600 --> 0:09:22.400 around I think since two tho fourteen, off top of 0:09:22.400 --> 0:09:25.760 my head something like that. So, um, the Ice Dollar 0:09:25.800 --> 0:09:31.559 Index obviously traded heavily on the ice um, the ice platform. Um, 0:09:31.600 --> 0:09:35.840 It's it's just old school, hard, old habits hard to break. So, 0:09:36.000 --> 0:09:39.400 you know, Vince, I've heard increasingly I guess maybe since 0:09:39.440 --> 0:09:42.880 the Great Financial Crisis, a lack of liquidity in quote 0:09:42.920 --> 0:09:46.000 unquote the market, whether it's fixed income, especially on treasuries, 0:09:46.040 --> 0:09:48.600 that's the thing that but I don't hear about it 0:09:48.640 --> 0:09:51.760 in currencies. Talk to us about how liquidity has evolved 0:09:51.760 --> 0:09:54.839 across you know, certain asset classes over the last dozen years. 0:09:55.520 --> 0:09:58.000 So if I if I showed you there was a 0:09:58.040 --> 0:10:01.280 little red book that used to go around every year, 0:10:01.440 --> 0:10:03.440 and it was done by a bank that no longer exists, 0:10:04.040 --> 0:10:06.040 And what it did was it captured all the banks 0:10:06.080 --> 0:10:08.600 that traded far in exchange all across the world, and 0:10:08.640 --> 0:10:12.520 it was roughly an inch thick. And and so liquidity 0:10:12.600 --> 0:10:14.880 was very backtick in the eighties and nineties because you 0:10:14.920 --> 0:10:17.600 had all these banks around. Now liquidity is pretty much 0:10:17.640 --> 0:10:22.600 provided by give or take ten major players. But the 0:10:22.760 --> 0:10:26.840 volumes have risen considerably. And that's because we've learned electronic 0:10:26.960 --> 0:10:30.360 as opposed to pupil trading over a telephone. So the 0:10:30.400 --> 0:10:34.920 market's grown to like five point three triling and uh, 0:10:35.040 --> 0:10:38.440 it's liquidity is provided pretty much by by ten players, 0:10:38.640 --> 0:10:43.840 and and they're they're making markets all the time except 0:10:43.880 --> 0:10:50.000 for when the market moves abruptly. So no it's that's 0:10:50.080 --> 0:10:52.000 that's totally true. So like if you if I were 0:10:52.040 --> 0:10:55.040 making a price to you know, X y Z corporation 0:10:55.280 --> 0:10:58.040 back in the day, uh, and they dealt on that 0:10:58.120 --> 0:11:01.000 price whether the market moved and was my tough luck. 0:11:01.600 --> 0:11:04.840 Now as soon as the electronic markets trip, and whether 0:11:04.880 --> 0:11:07.320 it's algo driven or a big order driven, whatever the 0:11:07.320 --> 0:11:10.800 case may be, if that price changes, the electronic platform 0:11:11.000 --> 0:11:15.200 disqualifies or decus the trade. So the corporation or the 0:11:15.200 --> 0:11:18.120 bank that's trying to deal on that price doesn't get 0:11:18.120 --> 0:11:19.840 that price. They get the next one, and it could 0:11:19.880 --> 0:11:23.720 be kind of far away if if somebody's doing enough size. 0:11:24.040 --> 0:11:27.680 So you know, in a way, the market mayors, the 0:11:27.760 --> 0:11:30.080 market makers, or I should say that the takers of 0:11:30.120 --> 0:11:35.040 the market, the corps of financial companies, etcetera. In in 0:11:35.679 --> 0:11:38.280 chasing the banks to do tighter and tighter and tighter 0:11:38.320 --> 0:11:42.320 spreads actually hurt themselves because now the liquidity shortages work 0:11:42.360 --> 0:11:46.079 against them when they're there, because the market moves abruptly 0:11:46.120 --> 0:11:47.680 and they don't get the price they think they're going 0:11:47.760 --> 0:11:49.439 to get. And this is how we get things like 0:11:49.960 --> 0:11:52.559 remember when oil traded negative, Yes, just no liquid to 0:11:52.640 --> 0:11:55.800 be there at least was paid to take a barrel 0:11:55.800 --> 0:11:59.360 of oil. Still got it? You get those that's where 0:11:59.360 --> 0:12:01.760 you get those called fat finger trades. If you will 0:12:02.240 --> 0:12:04.560 good stuff. I'm sure I would have been, you know, 0:12:04.679 --> 0:12:07.360 a victim of that at some point. Vincignarella, global macro 0:12:07.480 --> 0:12:10.960 strategist for Bloomberg News, joining us here giving us a 0:12:11.000 --> 0:12:13.079 sense of what's happening out there in the markets. And again, 0:12:13.120 --> 0:12:15.960 the the Bloomberg Dollar Index b b d x Y 0:12:16.120 --> 0:12:18.439 on your Bloomberg terminal, it's all about five and a 0:12:18.480 --> 0:12:21.520 half percent from it's just recent high a uh several 0:12:21.559 --> 0:12:23.520 weeks ago. It's off about a half a percent today, 0:12:23.520 --> 0:12:25.680 so a little bit of a pullback in the dollar. 0:12:25.800 --> 0:12:28.160 One of the proving to be one of the drivers 0:12:28.200 --> 0:12:31.800 here is VINCEU was just mentioning of uh stocks actually 0:12:31.840 --> 0:12:35.400 out there, so uh interesting to see that correlation coming up. 0:12:35.559 --> 0:12:37.360 I'm gonna call that w T a coud oil. It's 0:12:37.400 --> 0:12:40.040 all four point seven percent here, seventy seven dollars from 0:12:40.120 --> 0:12:45.520 w T a coudrail. That gets my tention. We are 0:12:45.559 --> 0:12:48.320 sitting in the studio here, me and Paul with our 0:12:48.360 --> 0:12:52.160 friend Katie Greifeld. She is a cross asset reporter, so 0:12:52.280 --> 0:12:57.000 she's across everything from single stocks to E T F 0:12:57.120 --> 0:13:00.280 s too, Crypto, uh and cats. She covers cat for 0:13:00.440 --> 0:13:04.080 us as well, but the cats, well, cats and coins 0:13:04.080 --> 0:13:06.000 is the name of her newsletter. Oh would you like 0:13:06.080 --> 0:13:09.240 to join Love Too? You don't subscribe, I don't know 0:13:09.840 --> 0:13:12.360 everything actually a pretty exclusive list. If you would like 0:13:12.400 --> 0:13:14.200 to be on, you have to tell me your work 0:13:14.240 --> 0:13:18.079 email and I will add you. Okay. Uh, by the way, 0:13:18.120 --> 0:13:20.720 you say that a lot. Do you not send it 0:13:20.760 --> 0:13:23.320 to personal emails? I used to send it. I got 0:13:23.360 --> 0:13:25.920 a lot of gmails, and then the gmails on the 0:13:25.960 --> 0:13:29.640 list got a little weird. Oh you know, you have 0:13:29.720 --> 0:13:31.880 to send me your work email so I can keep 0:13:31.920 --> 0:13:35.200 you accountable. Okay, let's talk about the latest in the 0:13:35.280 --> 0:13:39.320 ft X saga. Um, just when you think you can't 0:13:39.360 --> 0:13:41.800 get any more news, Sam Bankman Freed goes and writes 0:13:41.800 --> 0:13:45.400 a letter to employees. Yeah, he certainly he lost it. 0:13:46.000 --> 0:13:48.640 You know it's interesting. It's I feel like this would 0:13:48.679 --> 0:13:51.240 be shocking in any other case. But you know, he 0:13:51.360 --> 0:13:55.119 was tweeting so furiously for so long, furiously just describing 0:13:55.559 --> 0:13:58.880 the pace. It's probably not too surprising to see him 0:13:59.280 --> 0:14:02.400 formalize his thoughts in a letter. I don't think it 0:14:02.800 --> 0:14:05.520 was received that well, necessarily, I don't know. I can't 0:14:05.520 --> 0:14:09.199 believe it was. Now he points out that they had, 0:14:09.440 --> 0:14:12.520 and you gotta take whatever he says with a grain 0:14:12.559 --> 0:14:15.040 of salt, right because he still maintains that they have 0:14:15.320 --> 0:14:19.840 nine billion dollars in assets. Yeah, it is, they had 0:14:19.840 --> 0:14:23.960 sixty he did. Yeah, it's interesting to see. I don't 0:14:23.960 --> 0:14:28.080 know what reality he's operating in versus um what reality 0:14:28.120 --> 0:14:30.040 is coming to light in court. We did have first 0:14:30.080 --> 0:14:33.320 emotions yesterday, and again the f t X lawyers have 0:14:33.440 --> 0:14:36.120 made very very clear at this point SPF does not 0:14:36.160 --> 0:14:38.720 speak for f t X or for Alimato and is 0:14:38.760 --> 0:14:44.800 not involved in these processes. Do we have the authorities? 0:14:44.840 --> 0:14:47.960 I don't know which authority would be the FBI, for example, 0:14:48.200 --> 0:14:51.960 as anybody sat down with this guy, brought him into 0:14:51.960 --> 0:14:56.080 the office in New York, in Washington, d C, in Miami, 0:14:56.120 --> 0:14:58.440 wherever I know he's I guess he's in the Bahamas, 0:14:58.480 --> 0:15:01.760 is what I hear, and said, what's going on here? 0:15:01.960 --> 0:15:04.240 I believe they would like to I think us uh, 0:15:04.400 --> 0:15:07.040 the d O J would like to meet with him 0:15:07.120 --> 0:15:09.680 in New York. I remember reading that story last week. 0:15:09.680 --> 0:15:12.920 We know that Congress would like to as well. In 0:15:12.960 --> 0:15:14.480 the Bahamas. It's not like he's on the other side 0:15:14.480 --> 0:15:17.360 of the here. It's not too bad of a trip. 0:15:17.840 --> 0:15:20.560 It's not that far in terms of you know what. 0:15:20.760 --> 0:15:22.520 His parents need to go get him. I mean, we 0:15:22.560 --> 0:15:26.200 can sit here and talk about the fallout from the bankruptcy. 0:15:26.320 --> 0:15:30.080 It's massive. A lot of counterparties had serious exposure. What's 0:15:30.080 --> 0:15:33.640 happened to Genesis, what's happened to Gemini Um, the customers 0:15:33.640 --> 0:15:36.320 who got the short shrift? I feel horrible for them, 0:15:36.360 --> 0:15:38.800 But the bottom line is his parents need to go 0:15:38.840 --> 0:15:42.040 get him. That's a child. You know. My youngest brother 0:15:42.320 --> 0:15:45.240 is either thirty six or thirty seven, I can't remember, 0:15:45.280 --> 0:15:48.040 but he's still a little kid. Like if something like 0:15:48.120 --> 0:15:50.440 this happened to him, I would go and physically get 0:15:50.520 --> 0:15:54.240 him and bring him home. He is he's thirty right, Yeah, 0:15:54.560 --> 0:15:57.360 that's he's only I don't understand the Yeah, I don't 0:15:57.400 --> 0:16:01.200 understand the legal side of it. The was their fraud, 0:16:01.400 --> 0:16:04.160 I don't know it sure, just from reading looks like 0:16:04.200 --> 0:16:07.320 there may have been. So why is you know, you 0:16:07.400 --> 0:16:10.840 go get Bernie made off on the you know, sixty 0:16:10.840 --> 0:16:13.480 seven street wherever they grabbed them. They got him pretty quick. 0:16:14.440 --> 0:16:15.960 It was only a matter of days. But but you know, 0:16:16.040 --> 0:16:20.640 I look at bitcoin, it's up one today, six d 0:16:20.640 --> 0:16:22.600 bucks of coin. It's kind of holding in there. It's 0:16:22.600 --> 0:16:25.720 down from the twenty level, but it seems like the 0:16:25.800 --> 0:16:29.640 market investors haven't bailed on all things cryptofi look at 0:16:29.760 --> 0:16:32.160 bitcoin is a proxy? Yeah, no, I think this is 0:16:32.200 --> 0:16:35.160 one of the interesting subtext that's going on. I know 0:16:35.720 --> 0:16:38.360 we've discussed this on this radio talking about how is 0:16:38.360 --> 0:16:40.880 bitcoin still resilient right now? And actually Cathy Wood of 0:16:40.920 --> 0:16:45.320 our investment management was on Bloomberg Radio on TV yesterday 0:16:45.360 --> 0:16:49.600 and she addressed that that the Bitcoin blockchain, the Ethereum blockchain, 0:16:49.640 --> 0:16:53.720 they've been running very smoothly. So this isn't necessarily a 0:16:53.800 --> 0:16:58.160 Bitcoin problem. This is all of these centralized sort of 0:16:58.200 --> 0:17:01.520 monstrosity conglomer it's sort of compresents. This is the point 0:17:01.600 --> 0:17:04.159 I make constantly. And the thing is, it doesn't matter 0:17:04.240 --> 0:17:06.840 your take on Bitcoin. You could you can believe it's 0:17:06.880 --> 0:17:09.560 a Ponzi scheme, you can say it's worthless. I can 0:17:09.640 --> 0:17:13.960 understand the arguments on both sides um, But at the 0:17:14.000 --> 0:17:16.960 end of the day, this isn't about how Bitcoin performs. 0:17:17.040 --> 0:17:20.360 This isn't about how Ethereum performs. This isn't about how 0:17:20.440 --> 0:17:23.840 doge coin performs. This is about how an exchange, a 0:17:23.960 --> 0:17:29.520 centralized exchange, duped so many people into thinking that it 0:17:29.560 --> 0:17:32.240 was running an orderly business exactly. It's more about the 0:17:32.320 --> 0:17:36.439 systems that have spawned around Bitcoin. But Bitcoin itself, I mean, 0:17:36.480 --> 0:17:40.680 it's just a ledger, it's just basically a data center, uh, 0:17:40.720 --> 0:17:43.000 and it hasn't had any issues, whereas you think of 0:17:43.119 --> 0:17:46.600 some of the other blockchains I mean unrelated to uh 0:17:46.640 --> 0:17:49.080 this entire blow up over over the past three weeks, 0:17:49.080 --> 0:17:51.199 but the Salanta blockchain, for example, that had to be 0:17:51.240 --> 0:17:54.119 shut on and off many times during the summer. Different 0:17:54.160 --> 0:17:56.760 blockchains have run into different problems at certain points. But 0:17:57.080 --> 0:18:00.720 Bitcoin ethereum no such issues. So you look at the 0:18:00.720 --> 0:18:03.159 price of bitcoin, and there are still a lot of 0:18:03.160 --> 0:18:07.080 whales out there. For example, I really think the marginal 0:18:07.160 --> 0:18:10.440 seller at this point is gone. If you're looking at 0:18:10.480 --> 0:18:14.200 this news and you're sitting on bitcoin still, you're probably 0:18:14.240 --> 0:18:18.199 a true believer. You're probably you've forgotten your quote or 0:18:18.240 --> 0:18:21.199 you bought it seven dollars or a hundred dollars, you know, 0:18:21.440 --> 0:18:23.359 so you're not going to sell all right. C Z 0:18:24.160 --> 0:18:28.160 c Z is this guy and I don't know his name, 0:18:28.359 --> 0:18:30.520 but I'm just going to use his his initial. That's 0:18:30.560 --> 0:18:32.320 the cool thing to do. That's a cool thing to do. 0:18:32.560 --> 0:18:34.440 Is he just is there any reason to believe that 0:18:34.680 --> 0:18:37.960 Bloomberg employee is that serious? You did not know that? 0:18:39.800 --> 0:18:42.400 So is there any reason to believe that he's more 0:18:42.520 --> 0:18:46.439 legitimate less legitimate of the versus SPF or his business 0:18:46.440 --> 0:18:49.119 hasn't blown up? That's right, and so doesn't have customers 0:18:49.119 --> 0:18:51.760 who just lost millions of dollars? So is he the 0:18:51.800 --> 0:18:53.840 kind of lender of last resort? Is he a savior? 0:18:53.880 --> 0:18:58.600 For think he in a certain way has enjoyed portraying that. 0:18:58.680 --> 0:19:01.760 And it's interesting there was a Bloomberg News exclusive that 0:19:01.920 --> 0:19:05.440 Genesis and trying to raise one billion dollars in fresh capital. 0:19:05.720 --> 0:19:10.360 There had been talks with Binance that funding failed to materialize. 0:19:10.400 --> 0:19:11.879 I don't think we can call him the lender of 0:19:11.960 --> 0:19:14.919 last resort because you look at what happened. You've never 0:19:15.000 --> 0:19:17.399 been that right exactly. And I don't think there are 0:19:17.440 --> 0:19:19.800 any saviors left at this point, at least not in 0:19:19.800 --> 0:19:23.200 the crypto world. Well is I don't see for example, 0:19:23.720 --> 0:19:26.640 JP Morgan stepping in, City Bank stepping in saying we're 0:19:26.640 --> 0:19:31.240 gonna backstop. This market provides some liquidity. I just don't 0:19:31.240 --> 0:19:33.719 see any of that, and that to me, maybe it's 0:19:33.720 --> 0:19:36.479 just I'm just too old school. That's a little bit 0:19:36.480 --> 0:19:38.560 of a war. But the market doesn't need backstop. That's 0:19:38.560 --> 0:19:43.120 the thing. The market does not It was necessary. Yeah, okay, okay. 0:19:43.119 --> 0:19:46.080 They just took everybody's money, put it all on black 0:19:46.520 --> 0:19:49.320 one and lost and lost is what it looks like. 0:19:49.359 --> 0:19:51.080 I mean, I haven't done any forensic accounting here, but 0:19:51.119 --> 0:19:53.520 it seems like forensic accounting will be very difficult. But 0:19:53.600 --> 0:19:55.679 at this point in terms of the companies, when you 0:19:55.680 --> 0:19:58.680 think about who Genesis is probably trying to raise money from, 0:19:58.720 --> 0:20:02.640 at this point, it's probably traditional finance players. It's interesting 0:20:02.680 --> 0:20:04.120 that no one has stepped up. But then you think 0:20:04.119 --> 0:20:08.479 about Sequoia having to basically come out and say, I'm sorry, 0:20:08.680 --> 0:20:10.880 we did a bad job of due diligence here. That's 0:20:10.920 --> 0:20:13.919 probably I don't know, spooking a lot of Maybe some 0:20:14.040 --> 0:20:18.080 of these would be saviors. Otherwise. Matt Levin's Money, Money Stuff, 0:20:18.080 --> 0:20:20.680 Money Stuff Yesterday, which is that must read every day 0:20:20.680 --> 0:20:23.199 I have my alert set up. He basically says, you know, 0:20:23.640 --> 0:20:26.760 the instry doesn't need more bitcoin, I e. C Z 0:20:26.920 --> 0:20:30.200 stepping in. He needs dollars like the stuff that I haven't, 0:20:30.480 --> 0:20:32.800 you know, you know, the people actually can spend and 0:20:32.840 --> 0:20:34.920 that's what it really needs. And so we'll see how 0:20:34.920 --> 0:20:37.400 that plays that. Katie Greifeld, Cross asset reporter joining US 0:20:37.440 --> 0:20:46.480 Live Broker Studio. We appreciate that. Gold Stark. Let's bring 0:20:46.480 --> 0:20:49.120 in Matt Siegel now, he's ahead of digital asset research 0:20:49.720 --> 0:20:52.080 at Van Neck. He's been on the street for a 0:20:52.119 --> 0:20:55.600 slid fifteen years. Before that, he was a producer here 0:20:55.600 --> 0:20:57.679 at Bloomberg and he also worked for The Money Honey 0:20:57.880 --> 0:21:01.280 or he worked for him. Yeah, back whever at seeing BC. Um, 0:21:01.280 --> 0:21:03.120 but it's great to have you back in the office 0:21:03.359 --> 0:21:08.840 and especially to focus on the crypto story. Um. You 0:21:08.960 --> 0:21:11.879 have been in the space for a long time, the 0:21:12.000 --> 0:21:13.720 kind of I don't know what does Cathy would call it, 0:21:13.800 --> 0:21:15.760 that you've been on the cutting edge right of the 0:21:15.800 --> 0:21:19.439 sort of uh future investments. What do you think about 0:21:19.640 --> 0:21:21.840 where we are now in crypto? I mean, is there 0:21:21.840 --> 0:21:24.240 a future or is f t X kind of the 0:21:24.280 --> 0:21:27.840 big bang that's going to end at all. We're gonna 0:21:27.920 --> 0:21:31.520 deep deep crypto winter and that's going to be the 0:21:31.520 --> 0:21:34.280 time when the news flow is most negative and it's 0:21:34.320 --> 0:21:36.960 easiest to become a hater in the space. So we're 0:21:37.000 --> 0:21:41.040 dealing with kind of three concurrent major stories here. The 0:21:41.119 --> 0:21:44.439 first is, you know, the apparent fraud and siphoning of 0:21:44.440 --> 0:21:47.640 funds by SPF and his family, and you know, recovery 0:21:47.680 --> 0:21:51.399 of that may impact the recovery in the bankruptcy courts. 0:21:51.520 --> 0:21:54.160 And since there's so many counterparties tied into this, whether 0:21:54.200 --> 0:21:58.240 it's Block five, Voyager, etcetera, UH, that has implications for 0:21:58.280 --> 0:22:00.240 the recoveries going forward. It is whether or not he 0:22:00.240 --> 0:22:03.560 has charged and his personal assets or on recoveries. I 0:22:03.600 --> 0:22:06.280 have a lot of listeners writing in with the same 0:22:06.359 --> 0:22:09.360 question over the last few days and really the last 0:22:09.359 --> 0:22:14.880 couple of weeks, um how likely our customers to get 0:22:14.920 --> 0:22:19.840 anything back to recover assets The recovery process in this 0:22:20.080 --> 0:22:25.439 in these cases UH like Mount Cox can stretch into six, seven, 0:22:25.640 --> 0:22:28.159 eight years, It would could be longer than that with 0:22:28.200 --> 0:22:33.480