Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Vince Signarella he's coming back,
Speaker 1: Global macro strategist for Bloomberg News. Literally the king of
Speaker 1: work from home. Vince. He's still bullish here. Yeah, I'm
Speaker 1: actually listening, you know, listen that when I see two
Speaker 1: year years about one year yels back to me and
Speaker 1: and the rest of the curve something similar. That's the
Speaker 1: fixed income market pushing back against these multiple aggressive FED
Speaker 1: rate heights. I understand the argument, and the argument is
Speaker 1: we go from eight percent to six percent, but how
Speaker 1: do we get from six percent to two percent in
Speaker 1: in a in a short time? My argument against that
Speaker 1: is number one, why does it have to be a
Speaker 1: short time and why does it have to be two percent?
Speaker 1: The two percent level was something green Span just pulled
Speaker 1: out of the air. If we get to three or
Speaker 1: three and a half percent, that's where they said, guesses
Speaker 1: the neutral rate is so there's no reason that's not
Speaker 1: a good place to be. And if I think zero
Speaker 1: percent is a good level of inflation, that's just highway robbery. Dude.
Speaker 1: I don't like it. You know, it's not a good thing,
Speaker 1: you know. So I do good grocery shopping usually, and
Speaker 1: my wife went last week and it came back with
Speaker 1: the sheer look of Carol and everything. I've been in
Speaker 1: there in a while, and you know, looking at the
Speaker 1: prices of a lot of things that doubled essentially. Yeah, yeah,
Speaker 1: I'd like them to get inflation down as quickly as possible.
Speaker 1: But I guess you're what you're saying is, um, if
Speaker 1: they try and do that, they're going to cause so
Speaker 1: much pain that what there will be a backlash and
Speaker 1: riots in the streets, bricks through windows, and they'll have
Speaker 1: to turn around and and cut Yeah. Well, I mean
Speaker 1: think about it. You know, they're they're making statements, all
Speaker 1: of them basically saying we don't care. We're gonna put
Speaker 1: rates up and we're going to keep them there higher
Speaker 1: for longer, and we don't care how that affects economy. Well,
Speaker 1: if you're in the one pent uh income level, believe
Speaker 1: for you, but for the rest of the breast of
Speaker 1: the world, that's gonna be very difficult times. If if
Speaker 1: the economy rolls over and goes into a recession, you're
Speaker 1: going to have people losing their jobs at the same
Speaker 1: time where prices are elevated. I'm not suggesting we're gonna
Speaker 1: have statifylation type of scenario for a very long time,
Speaker 1: But how do they keep pushing aways higher? If we
Speaker 1: have negative growth and we've had two quarters of negative
Speaker 1: growth so far, we don't know what the third quarter
Speaker 1: is going to bring yet. They don't know what the
Speaker 1: third and fourth quarter is going to bring yet. So
Speaker 1: if we even have a slight positive growth in the
Speaker 1: third quarter and then negative growth again in the fourth quarter,
Speaker 1: what are they trying to accomplish. They're trying to beat
Speaker 1: They're beating back on price increases that, let me use
Speaker 1: the word transitory. These energy increases are not going to
Speaker 1: be here to stay. I had a similar conversation last
Speaker 1: week with Larry Summers, and he was saying, you know,
Speaker 1: we're going to keep at these unemploy event levels seeing
Speaker 1: inflation until we're at five five and a half percent
Speaker 1: of unemployment basically saying that he's he thinks that to
Speaker 1: our nehru is um, and getting there is going to
Speaker 1: be extremely painful. Uh. For for the U S economy,
Speaker 1: for US workers nonetheless, UM, it's tough to be short
Speaker 1: to be long these markets as they continue to fall, right,
Speaker 1: I mean, yes, we've turned around a little bit today,
Speaker 1: but we're at thirty nine on the S and P
Speaker 1: five hundred. Um. Where do you see it going in
Speaker 1: the short to medium term? Uh? Well, I got a
Speaker 1: dinner bet with a trader over by the end of
Speaker 1: the year, so hopefully that's where it will be. Um.
Speaker 1: I don't mind buying dinner. I like them. UM. But
Speaker 1: I think for the markets in general, I think we
Speaker 1: see it harder because I'm just not convinced. And that's
Speaker 1: under consensus. By the way, that's consensus. We were checking
Speaker 1: yesterday's I think forty three seventy five right now. Yeah,
Speaker 1: so against the consensus, So I guess not this time.
Speaker 1: It just doesn't look good right now, especially after the
Speaker 1: last few weeks. Drops out of the last seven sessions
Speaker 1: were down six of those. Uh. And a lot of
Speaker 1: times you'll get some turnarounds during the day, but we
Speaker 1: end up in the red by the time the closing
Speaker 1: bell rings. Yeah. I mean, look, I can tell you,
Speaker 1: in all my years of trading, I never made money
Speaker 1: on a real money on a trade. If I bought
Speaker 1: and it went up the same day. I was always
Speaker 1: layering into trades and it was always moving against me
Speaker 1: because I always thought it's better to be first than
Speaker 1: last um And I think that's going to be a
Speaker 1: similar situation to this. I think once we get through
Speaker 1: September and we get into October and we see inflation
Speaker 1: numbers rolling over. We saw the I S M services
Speaker 1: prices paid dropping yet again this week. We at cp
Speaker 1: I next week. That's going to be a really interesting
Speaker 1: number ahead of the ahead of the FED meeting, And
Speaker 1: I think just going forward, we're going to see inflation
Speaker 1: beginning to moderate, and that's going to give the Fed
Speaker 1: an opportunity to pause, and you know, if they don't,
Speaker 1: it's going to be what Larry Summer said, They're going
Speaker 1: to drive us into a recession and it's going to
Speaker 1: be very painful for everyone. And then I'd like to
Speaker 1: see them stay there at high rates, Like what's going
Speaker 1: to be there argument to say we need to keep
Speaker 1: rates at three to four percent with negative growth in
Speaker 1: the US of company makes absolutely no sense. Vince, do
Speaker 1: you think we're going to get a rate hike in September?
Speaker 1: Then kind of the wait and see. I e. It
Speaker 1: takes a while for rate hikes to really impact econmy
Speaker 1: and I think that's really what they should be doing.
Speaker 1: And they're going against They're going against seven or five points, right,
Speaker 1: I mean they're doing seven. Yeah, I think I think
Speaker 1: they're gonna go seventy five basis points. Um. Powell was
Speaker 1: very very hawkous the last time around. I don't think
Speaker 1: I don't think he wants to sacrifice credibility by by
Speaker 1: suggesting in any conversations coming up. I think he speaks tomorrow. Um,
Speaker 1: that's seventy five is not in the cards. I think
Speaker 1: that's a given. If they go less than seventy five,
Speaker 1: the market's going to rally lot crazy. But I think
Speaker 1: you're just a pencil wins. Seventy five it's there. The
Speaker 1: question is what comes in October and November. And I'm
Speaker 1: going to stay on the argument that they do nothing
Speaker 1: after September because I think that the data just will
Speaker 1: not support Yeah. And the Journal already had a story
Speaker 1: this morning that they're gonna go set me five and
Speaker 1: you know the journals where they leaked to that's right. Well,
Speaker 1: you know I'm gonna push back on that one because
Speaker 1: I worked at the journal the columns before coming to Bloomberg,
Speaker 1: and the hit and miss ratio for those guys who
Speaker 1: covered the FED was bel So we're getting leaked, all right, Vince,
Speaker 1: good stuff as always from the home office. Vince Signarella,
Speaker 1: Global macro strategists for Bloomberg News, former currency strategy It's
Speaker 1: just not happening. Someday we're gonna get him in here,
Speaker 1: I don't think so. He looks perfectly comfortable, comfortable at
Speaker 1: his work from home office. He has completely made the
Speaker 1: evolution to work from home. Let's bring on our next guest,
Speaker 1: Mark Smith, Senior VP for Investments at Wells Fargo Advisors. Mark,
Speaker 1: thanks so much for joining us here. I'm sure your
Speaker 1: phone's ringing off the hook in this year two saying
Speaker 1: my stocks they're not working, my bonds they're not working.
Speaker 1: You know, maybe I on the dollar, I'm I'm feeling okay,
Speaker 1: But what do you have? What what what the conversations like
Speaker 1: with your clients these days? Well, thanks for having me
Speaker 1: on it's always pleasure to be on Bloomberg. Uh, yeah,
Speaker 1: you're absolutely right. Clients are calling, um, but they are
Speaker 1: prepared for this. I mean that the FED has spoken
Speaker 1: pretty clearly about what they're intending to do, and uh,
Speaker 1: they carry a pretty large mic. Everyone's listening. They've heard
Speaker 1: that the rates are going up. And so folks are
Speaker 1: my clients specifically, are expecting volatility because when you're having
Speaker 1: a FED that's tightening, quantitative easing is not gonna be
Speaker 1: there anymore. Everyone's expecting for there to be a little
Speaker 1: bit of pain while this happens. And so the long
Speaker 1: term investor is the one that's still in this. And
Speaker 1: I gotta tell you there's a lot of folks out
Speaker 1: there there in this for the long term. They've been
Speaker 1: trained I think for the since two thousand and eight,
Speaker 1: two thousand nine, UM, going into the pandemic that if
Speaker 1: you kind of you know, buy and hold, good things happen.
Speaker 1: And so, um, that's what I'm hearing. A lot of
Speaker 1: folks looking for opportunities in this environment. You look at
Speaker 1: the tech sector, there are a ton of them. Um.
Speaker 1: There are companies that we all know and love that
Speaker 1: are down. Um, So folks are nibbling. All right, there's
Speaker 1: dollar cost averaging. I think what's one term that investors
Speaker 1: need to write down put on their fridge dollar cost averages.
Speaker 1: If you see a bad day in the market by
Speaker 1: a little bit of some of those names that you've
Speaker 1: been hoping and praying that we would go down this much.
Speaker 1: Don't get nervous when fearful. When people are fearful, be greedy.
Speaker 1: I hear you, Um, you know that's uh solid investment
Speaker 1: theory and put to practice. I mean, if you step
Speaker 1: back and look at the charts over a longer term,
Speaker 1: you have to admit that it always proves correct. What
Speaker 1: do you like right now? Mark? Where where are you
Speaker 1: seeing the best opportunities in this environment? I think the
Speaker 1: best opportunity is in the financials. And here's why since
Speaker 1: oh eight oh nine, they're really one of the sectors
Speaker 1: that haven't rebounded as much as everyone else. Number two.
Speaker 1: In a rising rate environment, historically financials outperform. You look
Speaker 1: at the data. The financial sector is poised because of
Speaker 1: um that interest margin and because of dot frank what
Speaker 1: what the bank are forced to do into O A
Speaker 1: go nine to shore up their balance sheet to make
Speaker 1: sure we never see another great recession again and having
Speaker 1: a bank run. These banks, I think are primed for
Speaker 1: this environment. They are lean and mean, they've been doing
Speaker 1: the right things because the FED made them do the
Speaker 1: right things in O nine And they're already undervalued as
Speaker 1: a sector compared to every other sector in this and
Speaker 1: five harnts you're coming out of eight O nine if
Speaker 1: you look at the charts. So I like the financials,
Speaker 1: the regionals specifically. I think they're gonna do really well
Speaker 1: in this environment. Um, But um, any of the large
Speaker 1: banks as well. I mean, you're going in there, who's
Speaker 1: keeping their money in bitcoin? Right now? That that that
Speaker 1: story is over, people are keeping keeping their money in banks. Um,
Speaker 1: it's the safest place to be. And um, I think
Speaker 1: you're gonna see them do well over the next couple
Speaker 1: of years. Mark Energies, you know had you know, it's
Speaker 1: it's day in the sun, a rare day in the sun.
Speaker 1: Over the last couple of years, I'm starting to see
Speaker 1: a little bit of a pullback in in oil. Here.
Speaker 1: Do you guys have an energy call there? Should I
Speaker 1: take my money and say all right, I've done okay?
Speaker 1: Where do I stick around? Look? Listen, I think if
Speaker 1: you look at where we are, because when you think
Speaker 1: about energy, you guys think about it globally, right, you
Speaker 1: can't just think about it here in the US. So
Speaker 1: if you look at what's going on, we still got
Speaker 1: lockdowns and the one of the largest economies in the
Speaker 1: world in China. Once they fully get back on, I
Speaker 1: think energy is gonna take off. You've got a huge
Speaker 1: issue with Putin and Europe UM and going into the winter.
Speaker 1: These are all I think you a little brisks that
Speaker 1: are out there that I will could and could make
Speaker 1: energy go up. And I think until all this is realized,
Speaker 1: I think you've got to have a position and energy. Um,
Speaker 1: given what you're seeing globally going on from Europe and
Speaker 1: Putin to UM to China and having them still being
Speaker 1: locked down when all these things kind of swash out,
Speaker 1: I think you can still see some upside there all right,
Speaker 1: Supreme Fish Delight. Where was that restaurant that was in Harlem?
Speaker 1: And thanks for bringing that up, although I like closed
Speaker 1: it down a few years ago. Um, that was the
Speaker 1: restaurant that I ran in Harlem for a couple of years.
Speaker 1: I was a restaurant our owner operator and it was
Speaker 1: one of the hardest things I've ever done in my life.
Speaker 1: I give my I sit my hat to all the
Speaker 1: restaurant owner is around the country for the work they've
Speaker 1: done over the last couple of years, because it has
Speaker 1: not been easy. It's hard to find good workers. Um.
Speaker 1: I don't know what these folks are doing nowadays, but
Speaker 1: they're not coming back to restaurants. Yeah, interesting stuff, you know.
Speaker 1: It's just you know that you think about the restaurant business,
Speaker 1: You've got inflation on your cost. Yes, obviously the restaurant
Speaker 1: very difficult. But you know what, I imagine being senior
Speaker 1: VP for Investments at Wells Fargo Fargo Advisors in this
Speaker 1: climate is also fairly tough because Mark, you've got to
Speaker 1: be fielding a ton of calls from people who are
Speaker 1: freaking out, especially you know, investors who are close to retirement.
Speaker 1: Right here, Um, we have seen in the last nine days,
Speaker 1: we've seen uh nine consecutive drops in global stocks and
Speaker 1: that's the worst run we've seen in eleven years. Stuff
Speaker 1: all right, Mark, thanks so much for joining us here.
Speaker 1: Mark Smith's senior VP Investments for Wells Fargo Advisor's former
Speaker 1: restaurant owner Supreme Fish Delight in Harlem, formerly up there,
Speaker 1: so very interesting background. I'm looking at my phone, I
Speaker 1: phone model iPhone eleven. Dude, you really need an upgrade,
Speaker 1: do I? What do you got? I have the thirteen. Yeah,
Speaker 1: it doesn't look any different, a better, it's no, but
Speaker 1: it's not the way it looks. I think, um, five
Speaker 1: G started with the twelve. There's a couple of things.
Speaker 1: Five G started with the twelve. The other thing is
Speaker 1: the mag safe thing started with the twelve. So I
Speaker 1: can just like my charge at home. I just stick
Speaker 1: my phone to it. I don't plug it in, I
Speaker 1: just slap it on there. And uh yeah, alright, this
Speaker 1: year's a good year. All right, we'll see what we'll see.
Speaker 1: I don't need an upgrade, it's probably the thing, but
Speaker 1: I do think you tell me a right Ed loud
Speaker 1: Low West Coast, corresponding from Bloomberg News. He's all over
Speaker 1: this Apple event today taking place in Cupertino, where they're
Speaker 1: going to launch some of their new products, including the
Speaker 1: iPhone fourteen. Ed, what's the buzz in the valley about
Speaker 1: our friends and Cuppertino. There's this fantastic meme that someone
Speaker 1: tweeted this morning of Christmas Day, and this man wearing
Speaker 1: a red plaid shut opening a box and pulling out
Speaker 1: the exact saying red plaid shirt that he's wearing. And
Speaker 1: I think that that's what you guys are kind of
Speaker 1: getting at, right, that these are incremental updates. But you
Speaker 1: know that that we get a new iPhone every year
Speaker 1: almost right, and between iPhone twelve to iPhone thirteen, which
Speaker 1: I also have, you know, the distinction in this day
Speaker 1: and age has been whether you get the sort of
Speaker 1: bog standard consumer model or the Pro model, which has
Speaker 1: higher spec camera and processing capabilities and is kind of
Speaker 1: aimed at creative professionals. And it's much the same with
Speaker 1: the iPhone four team. We expect same as people who
Speaker 1: like to think of themselves as creative well yes, yes
Speaker 1: quite or who I guess work in the creative industries.
Speaker 1: But you know, that's what we expect this time. Four
Speaker 1: versions of the iPhone fourteen two Pro two Standard, no
Speaker 1: mini version. You remember. I know for some people that
Speaker 1: is a bummer, but Apple is kind of going in
Speaker 1: the direction the rest of the smartphone industry, including Samsung
Speaker 1: is which is bigger, screens are better. Um. The key
Speaker 1: is in the hint of the poster for the event,
Speaker 1: which is called far Out. Have you guys seen it?
Speaker 1: So it is the Apple logo illuminated in the night
Speaker 1: sky as a star constellation. And Mark German, our Apple reporter,
Speaker 1: has this brilliant column and his newsletter talking about kind
Speaker 1: of what that could mean. It could be as simple
Speaker 1: as a wallpaper, right, and I know that sounds dumb.
Speaker 1: Or it could mean a tease to satellite capabilities. And
Speaker 1: I think that's the next technology area that the analysts
Speaker 1: are looking to. I dig that just googled. I just
Speaker 1: googled the far out Apple and then you can see
Speaker 1: the um the sort of universe picture that Ed is
Speaker 1: talking about, very very cool um. And now I'm even
Speaker 1: more excited than I was before. What time five o'clock? Right?
Speaker 1: Is it five o'clock Eastern time? So two o'clock your time? Ed?
Speaker 1: What time do we start to hear these details? Isn't
Speaker 1: it one o'clock eastern time? Hold on, let me look
Speaker 1: it up. Give me a second. You guys talk amongst okay,
Speaker 1: So I'll tell you while you look this up, I'll
Speaker 1: tell you. Do I get subsidized again? If I got
Speaker 1: buy a phone and my shell now a thousand dollars
Speaker 1: I think now on, you're just from now on your
Speaker 1: shelling out of that. Let's maybe you switch over from
Speaker 1: contract to contract everything about that. But what I'm most
Speaker 1: excited about myself is a new Apple watch because as
Speaker 1: I get more um interested in the data. Are you
Speaker 1: talking to your watch? No? I don't talk to it,
Speaker 1: but it measures my heart rate and heart rate variability,
Speaker 1: and it tells me how well I sleep, or at
Speaker 1: least it tries to do that. It's not working quite
Speaker 1: as well, I think as some of its competitors, um
Speaker 1: Polar has a much better heart rate monitor whoop maybe
Speaker 1: is better at telling me how I sleep and my
Speaker 1: recovery time. And I think Apple could really up its
Speaker 1: game um in terms of the health functions on the watch.
Speaker 1: ED what are you hearing about that? Well, good news.
Speaker 1: I mean we're expecting a new generation of Apple watches
Speaker 1: as well. It's interesting. I don't want to go in
Speaker 1: too much of a tangent, but there's been a lot
Speaker 1: of debate about whether Apple needs to buy Peloton. For example.
Speaker 1: You know, it's reports out there that Peloton is kind
Speaker 1: of shopping itself amongst its current difficulties, and a lot
Speaker 1: of the response from the Street. It doesn't need to.
Speaker 1: You know, it has hardware in the watch, it has
Speaker 1: the content already, why would it buy Peloton? So we
Speaker 1: do expect a new generation of Apple Watch, and you know,
Speaker 1: much with the phone, the question is whether you go
Speaker 1: for the higher spec version of it with the larger screen,
Speaker 1: or you go for the cheaper model. I think that
Speaker 1: the other big theme conscious of time is that you know,
Speaker 1: from an analyst and investor's perspective, you want to see
Speaker 1: how Apple prices all this stuff, right, because sales volumes
Speaker 1: could drop going into the end of this year the
Speaker 1: economy such as it is globally, so higher prices can
Speaker 1: maintain the bottom line. How about for some emerging markets
Speaker 1: where a lower price phone would do better? And I
Speaker 1: know they had a model a couple of cycles ago
Speaker 1: that we're kind of targeting that, you know, whether it's
Speaker 1: India other merger markets. Where are we with it? Yeah?
Speaker 1: I think, well, I go back to the mini, right
Speaker 1: that that the mini and the non pro versions of
Speaker 1: the phone are aimed at. That that you look at
Speaker 1: a chart of ASPS average selling prices and they've gone
Speaker 1: through the roof towards dollars of these handsets, right, I
Speaker 1: remember why. I don't remember. I'm not that old, but
Speaker 1: you know, when I was a kid, you could just
Speaker 1: about afford the basic iPhone. It was much smaller, lower
Speaker 1: spec It's the size and the capabilities that driven the
Speaker 1: prices higher in markets like India, fascinating market. You know
Speaker 1: Samsung does well, but you have to remember there's many
Speaker 1: other players in that market. Local players are the Asian
Speaker 1: players who are much more focused at the lower end. Yeah,
Speaker 1: it'll be interesting to see what kind of a ray
Speaker 1: because at some points, at certain generations they do come
Speaker 1: out with like an R model or something which is
Speaker 1: I guess just as fast but doesn't have all the
Speaker 1: bells and we see, yeah, exactly. So hey, and where's
Speaker 1: Apple in terms of the whole supply chain discussion? Ease
Speaker 1: kind of the poster child. What do they say these things?
Speaker 1: You know, Apple is the great bluffer, right, that's probably
Speaker 1: being a bit too stronger unkind, but often guides conservatively.
Speaker 1: I think back to fiscal second unders and over deliver. Yeah,
Speaker 1: they have said for a decade they said that supply
Speaker 1: chain issues. At that time, we were kind of in
Speaker 1: the depths of the Ukraine crisis, China zero COVID policy
Speaker 1: would cost them, or they'd leave between four and eight
Speaker 1: billion dollars of sales on the table. What materialized in
Speaker 1: the fiscal third quarter was a number significantly less than
Speaker 1: four billion dollars, and they guided to the fiscal fourth
Speaker 1: courter the period where in now that it would continue
Speaker 1: to be less than four billion dollars with an improving
Speaker 1: supply chain, even with a worsening global economy. So I
Speaker 1: think that that's well known. I mean, you guys know
Speaker 1: much better than I. They've done it a long time,
Speaker 1: guided conservatively, and you know, I'll leave the person un
Speaker 1: named but telling us that we're so old. Yes, no, no,
Speaker 1: I'm just saying Apple Apple, As someone who I respect
Speaker 1: and newsroom said, you know, Apple may go as far
Speaker 1: as to be sandbagging the cell siders, which I think
Speaker 1: is an interesting idea. And you're flying out here, yes
Speaker 1: you are you a United? Are you flying with United?
Speaker 1: Because then it's kind of iffy if you're flying in
Speaker 1: a GfK with United area. Well, other airlines are available,
Speaker 1: but as people know, SFO as a United hub, and
Speaker 1: I have been known to fly United. So what are
Speaker 1: you coming here? Are you testing out some brand new
Speaker 1: ev Well, are you looking at a new rocket, I
Speaker 1: mean New York City? What do you do here? Well?
Speaker 1: Do you guys remember a company called Nikola that has
Speaker 1: Yes Trevor on trial in the Southern District of New
Speaker 1: York three counts of securities fraud, one count of wire fraud.
Speaker 1: And I'd like to come to town to cover the trial. Wow. Well,
Speaker 1: I hope we can test drive some cars together. You
Speaker 1: know I got my truck right, yes, yes, and you
Speaker 1: if you have me on the show, I'll come sit
Speaker 1: next to you in person. Coming to the East Coast.
Speaker 1: Famous see your producer back in the day, he was
Speaker 1: how bad? I have really fond memories of Matt and
Speaker 1: I cutting it very close to get to camera in
Speaker 1: Brussels because we were getting waffles. That is a true
Speaker 1: true story from many years ago. Alright, Ed, good stuff.
Speaker 1: As always, we look forward to see you here in
Speaker 1: New York soon. Ed Lulow, West Coast corresponder for Bloomberg
Speaker 1: News getting us the latest on Apple. They're having a
Speaker 1: product unveiled today, I guess is what they call out
Speaker 1: there and Cupertino always big news for the folks at App.
Speaker 1: Right now is our weekly Crypto segment and to get started,
Speaker 1: I always just type in c R y P go
Speaker 1: our crypto currency monitor, seeing what's moving here. We got
Speaker 1: some weakness in bitcoin and ethereum. Today, Jordy Visor joins us.
Speaker 1: He's president and c i O of Wise Multi Strategy Advisors. Jordy,
Speaker 1: you guys recently launched an n f E n f T.
Speaker 1: Tell us about that, well, thanks thanks for having me on.
Speaker 1: But in terms in terms of the n f T,
Speaker 1: we've been focused on crypto and I think more specifically
Speaker 1: on the blockchain and web three point oh and becoming
Speaker 1: more and more in the belief that it's going to
Speaker 1: have an impact on all of our lives. But in
Speaker 1: particular since we're involved in the financial world towards the
Speaker 1: investment side, uh and so because of that belief, we
Speaker 1: wanted to make a move into it for the experiential side,
Speaker 1: the adapter die side, meaning we really need to If
Speaker 1: you're gonna believe in technology, you don't know what it's
Speaker 1: how it's going to impact your business. So we did
Speaker 1: this for a variety of reasons, but most of it
Speaker 1: had to do with our belief in the future of
Speaker 1: crypto and specifically the blockchain. It seems hard to maintain
Speaker 1: that belief as we see um bitcoin stagnate at twenty
Speaker 1: thousand or below. Having said that, when I first started
Speaker 1: covering bitcoin, that was trading for one thousand or below.
Speaker 1: So it's you know, obviously it's made a big move
Speaker 1: in the last um ten years, but people seem to
Speaker 1: be paying a lot more attention to the move from
Speaker 1: sixty five to twenty than they are from you know, uh,
Speaker 1: one thousand to twenty. Well, I'll just say I think
Speaker 1: one of the problems when people think about crypto is
Speaker 1: it just hasn't, in people's mind, become an asset that
Speaker 1: they understand yet. And I think it transitioned into an
Speaker 1: asset and had a major turning point in during during
Speaker 1: COVID for a variety of reasons. But the way that
Speaker 1: I think about it is just simply, there's about five
Speaker 1: trillion dollars in fiat assets in the world. There's about
Speaker 1: a trillion dollars now of market cap withinside the crypto world,
Speaker 1: and the easiest way to think about when Bitcoin, ethereum
Speaker 1: and the rest of of the tokens would have a
Speaker 1: hard time, it would be number one. When the fiat
Speaker 1: assets are going down. We've obviously seen one of the
Speaker 1: worst years in both bonds and stocks and in quite
Speaker 1: some time. But you've also had a situation where the
Speaker 1: innovation names, particularly technology, had a really uh you know,
Speaker 1: noteworthy fall this year. And I think if you were
Speaker 1: going to guess where you'd have problems for bitcoin and
Speaker 1: ethereum as an innovation side, it would be if all
Speaker 1: FIAT assets fell and if innovation fell. So I'm not
Speaker 1: surprised by the fall, uh, and I think people should
Speaker 1: be taking it in the context of what's happened in
Speaker 1: the rest of the assets. The other hand, I was
Speaker 1: hoping we would see, you know, ten years ago, I thought, oh,
Speaker 1: this is a really cool new currency and I'll be
Speaker 1: able to buy and sell stuff. I actually lived on
Speaker 1: bitcoin for a couple of weeks back in two thousand thirteen. UM.
Speaker 1: But it hasn't evolved in that way. People aren't using
Speaker 1: it for transaction transactional purposes. They're using it, I guess,
Speaker 1: as a store of wealth, which is why the move
Speaker 1: down is such a concern. Well, so again, I think
Speaker 1: that my evolution in this space was, you know, really
Speaker 1: transition from money to asset, like I said in UM,
Speaker 1: and now I'm more focused on it from the innovation side.
Speaker 1: I'm a macro person and I try to put everything
Speaker 1: in the context of how the macro world will will look. Uh.
Speaker 1: This at the end of the day is about less centralization,
Speaker 1: and it's about the users and creators having more ownership.
Speaker 1: And so when when we sit there and talk about
Speaker 1: it as money, I don't think of it in that
Speaker 1: way at all. I think of this has asset and
Speaker 1: to a degree, every token outside of say ethereum and bitcoin,
Speaker 1: to me is more like a company shares, uh. And
Speaker 1: so I think it really depends on how you view
Speaker 1: it into the listening audience. That's one of the big
Speaker 1: messages from this year for me was spending time on
Speaker 1: what n f t s. Last year, the whole explosion
Speaker 1: we saw on n f t S, what that meant,
Speaker 1: and for me, it transition for money, which is what
Speaker 1: it was in two thousand fifteen sixteen, to asset, which
Speaker 1: is what I think it was, and then in two
Speaker 1: thousand twenty one, I think it transitioned to something more
Speaker 1: like what the app store did the web two point oh.
Speaker 1: So I've moved completely onto the innovation side, and I
Speaker 1: think thinking about it as money, I agree with you.
Speaker 1: We're going to have so many different ways of this
Speaker 1: being money, whether it's CBD, c S. I'm just viewing
Speaker 1: this more on the asset side and kind of a
Speaker 1: disruption to capitalism Johnny, real quick and as maybe unfair
Speaker 1: given a time constraint. How do you define web three point? Oh? Well,
Speaker 1: again for me to make it simple, because I think
Speaker 1: it confuses people, I've called it the borderless Internet, which
Speaker 1: basically means it opens it up to so many But
Speaker 1: I really I think people should focus on this in
Speaker 1: less centralization, which I think is a dominant theme, you know,
Speaker 1: across the populist movement. I think it's a dominant theme
Speaker 1: right now in terms of trying to get people to
Speaker 1: get back to work. So for corporates, obviously for banks, uh,
Speaker 1: the centralization really took an impact down two thousand and eight.
Speaker 1: But then you have the other side, which is wealth.
Speaker 1: And if there's one message to leave with everyone on
Speaker 1: kind of where this gets more interesting, It gets back
Speaker 1: to that point that there's five trillion dollars globally of
Speaker 1: FIAT assets, and so if you're gonna have less centralization
Speaker 1: and the users and the creators are going to have
Speaker 1: more ownership well, right now, the top twelve percent of
Speaker 1: of people, uh or twelve percent of people of that
Speaker 1: five trillion dollars. And so we're talking about spreading the
Speaker 1: wealth more and more. And that's why I think, whether
Speaker 1: it's talent going to cryptou and three point oh, you're
Speaker 1: gonna see more and more people focused on web three
Speaker 1: point oh as a less centralized world, which disrupts Web
Speaker 1: two point out, which is platforms, got good stuff, and Jordan,
Speaker 1: we're gonna get your back going. Do actually make this
Speaker 1: stuff somewhat understandable for us? Luddite Story Visitor, President CEO
Speaker 1: of WIE Multi Strategy Advisers, talking all things crypto, including
Speaker 1: the evolution to web three point oh, you're talking prices,
Speaker 1: Madi's you've gotta have a demand call, you gotta have
Speaker 1: a supply call. It just feels to me that oil
Speaker 1: kind of the demand equations kind of pushing things around here.
Speaker 1: But let's bring in somebody who does this stuff for living.
Speaker 1: Julia fanzeris oil futures reporter for Bloomberg News. She joins
Speaker 1: us live on our Bloomberg Interactive Brokers studio. None of
Speaker 1: this phoning and in stuff and quite I think You're
Speaker 1: gonna have more of these Bloomberg folks in studio going forward.
Speaker 1: I know that you've been pushing for it. I have been,
Speaker 1: and I mean, look, I think, um, well, Mike build
Speaker 1: multi we had great experience. It's great office in our
Speaker 1: offices around the world are incredible, and I think the
Speaker 1: collaboration side of it is key. But more and more,
Speaker 1: I think a lot of people are doing it online
Speaker 1: in the what do you call that the metaverse? Metaverse?
Speaker 1: I feel like the metaverse is here, I think so.
Speaker 1: I don't know, but Julia is is live with us
Speaker 1: in the Interactive Broker studio on a day when Brent
Speaker 1: crude um is below ninety dollars, nime x w t
Speaker 1: I is off more than four percent right now. This
Speaker 1: is interesting, Julia, because we just had at the beginning
Speaker 1: of the week an OPEC plus UH production cut. I
Speaker 1: know it wasn't huge cut, but it was still going
Speaker 1: in that direction, and um another going the other way,
Speaker 1: another lockdown in China. So is this really a demand
Speaker 1: issue rather than a supply It really does seem to
Speaker 1: be the case, especially this morning, because the demand coming
Speaker 1: out of China is obviously much lower with these new lockdowns.
Speaker 1: And also let's look at the fact that right now
Speaker 1: everything looks very bearish for oil. Sure, the bull factors
Speaker 1: of supply cuts and the possibility of the fact that
Speaker 1: the EU is also going to not allow Russian oil
Speaker 1: into the market. Sure, but that's further into the future.
Speaker 1: Right now, it's not looking good for markets, and the
Speaker 1: liquidity is very low. We had the U S holiday
Speaker 1: earlier on Monday when the OPEC meeting happens, so that
Speaker 1: kind of got priced in that day, but then it
Speaker 1: really phased out and now we are at six month
Speaker 1: loads again. Basically, traders they're saying that there is no
Speaker 1: real reward for taking huge risks in the market right now.
Speaker 1: They just want to pull out. And w h I
Speaker 1: just formed its death cross, which means that that means
Speaker 1: that the fifty day moving average fell below the two
Speaker 1: day moving average for the first time since twenty and
Speaker 1: so that's a barrish technical signal. There is no reason
Speaker 1: for traders right now from what they see and from
Speaker 1: what they're telling me, to buy in right now. And
Speaker 1: as we all know, Chinese demand is a huge factor
Speaker 1: for the crude markets because they are such a large
Speaker 1: importer of crude with this COVID zero policy, it's really
Speaker 1: not looking great for the markets. Don't know how we
Speaker 1: get out of this China situation in terms of the
Speaker 1: COVID zero policy. It just seems like they're gonna have
Speaker 1: fits and starts for the foreseeable future. And I guess
Speaker 1: you're just if I'm going to be an oil trade
Speaker 1: I just can't take on that much of a position
Speaker 1: assuming demand is going to come up from China, because
Speaker 1: you can't, I don't think exactly. And it's been so
Speaker 1: tricky obviously in these last couple of months with the
Speaker 1: Russia's invasion of the Ukraine. But oil has really given
Speaker 1: up all of those games, and so right now it's
Speaker 1: a tricky place for people to be trading. And we
Speaker 1: see that people have really backed out. Liquidity is still
Speaker 1: at six year low, so people are not really pouring
Speaker 1: money into crude at the moment. I wonder what you
Speaker 1: think about the spr draw down that that UM President
Speaker 1: Biden administration authorized that really brought down gasoline prices, but
Speaker 1: it leaves us kind of vulnerable if there's any big problem.
Speaker 1: I mean, UM is OPEC trying to give us a
Speaker 1: message with these hundred thousand dollars. How there a thousand
Speaker 1: barrel production cuts or what was the point of that?
Speaker 1: Was a message opaque earlier, and Saudi Arabia is the
Speaker 1: first one to say, Look, OPEC might cut because there
Speaker 1: is this disconnect from the crude markets and the actual
Speaker 1: products that are on the market. As we know, we've
Speaker 1: been talking about tight supplies. There is not enough actual
Speaker 1: crude barrels on the market for the high demand in
Speaker 1: the summer, and then the crude market because traders don't
Speaker 1: want to be putting their money and kept tanking and
Speaker 1: taking despite the fact that supplies were still tight. Fundamentally,
Speaker 1: the market was still tight. So OPEC said for this
Speaker 1: not to ocquirk because obviously they don't want prices to tank.
Speaker 1: They said, we're going to cut supplies in hopes of
Speaker 1: really helping the market meet the physical picture. How about
Speaker 1: our good friends down in Texas and Oklahoma. They never
Speaker 1: really ramped up their production, did they. I mean I
Speaker 1: kept hearing they yeah, I kept hearing stories that they don't.
Speaker 1: They really couldn't, and they didn't want to, you know,
Speaker 1: upset their shareholders and bondholders. So they said, we're going
Speaker 1: to keep our keep the cash fload going to you guys,
Speaker 1: and as opposed to putting it in the ground. Where
Speaker 1: are those guys? What's the question is it is it
Speaker 1: too expensive for them to boose production or are they
Speaker 1: hesitant because of the regulatory environment in Washington. I think both.
Speaker 1: I think at this point the margins were much better
Speaker 1: earlier in the summer, but as they had mentioned, it
Speaker 1: takes time. So even though the margins were incredible for
Speaker 1: the money that they were going to put in right,
Speaker 1: absolutely in that moment it would have made sense, but
Speaker 1: it takes time to create those so they didn't know
Speaker 1: if long term it was a good investment. They just
Speaker 1: had their quarterly earnings. Obviously they've done very well for themselves.
Speaker 1: But at the moment, it does seem that if there
Speaker 1: is another spr release that could also really bring prices lower,
Speaker 1: and people are worried that there's just not going to
Speaker 1: be a supply buffer in the market for when we
Speaker 1: really need sound like there needs to be another prices
Speaker 1: coming down. I've got the daily national average gasoline prices
Speaker 1: here on my screen. I do three A G S,
Speaker 1: P R E M, so I can see what the
Speaker 1: premium prices. You do the premium because that you have
Speaker 1: to fill up with one at least, right and technically
Speaker 1: I think you do too, yes, so even if you
Speaker 1: puts worth of repairs, I just had four dollars and
Speaker 1: fifty one cents is what I'm looking at right now.
Speaker 1: And by the way, the gasoline price also went into
Speaker 1: a death cross at the end of August. It's been
Speaker 1: coming down, uh pretty, but diesels still very pressibly. Diesel
Speaker 1: is still very high. Gasoline obviously came down. We've been
Speaker 1: trying to track these demand numbers with the e A
Speaker 1: seeing how much, and there have been they've been a
Speaker 1: little bit funky these past couple of weeks, you know,
Speaker 1: with some demand numbers saying, oh, it was lower than
Speaker 1: twenty and not all these treators are actually believing that. So,
Speaker 1: but prices have really come down, especially as people weren't
Speaker 1: driving that much, and we know that people didn't drive
Speaker 1: that much as summer because of high gasoline prices, and
Speaker 1: now obviously the summer season with labor Dagon over pd
Speaker 1: S one is the ticker for diesel generic first and
Speaker 1: blah blah blah blah, it's something that's still high. I
Speaker 1: mean it's just a month contract. Yeah, yeah, So it's
Speaker 1: a fifteen dollars fifteen cents. You know, started a year
Speaker 1: ago we were down below eighth, so it's had it
Speaker 1: hasn't really come back down that much. So diesels, if
Speaker 1: you're driving a diesel vehicle, that's tough, right. Well, and
Speaker 1: well that's because Russian oil, for example, is a grade
Speaker 1: that they used to produce diesel, right, and that's not
Speaker 1: getting in here. Um, and the stuff that we produced
Speaker 1: in Texas, Um, it's not it's not heavy enough. Is
Speaker 1: that the case? Yeah, I think so. And also let's
Speaker 1: think about the fact that American drivers are so focused
Speaker 1: on gasling. But for Europe, as you mentioned, diesel is
Speaker 1: still very high, so they're still feeling that crunch as
Speaker 1: we go into winter, and there's going to be more
Speaker 1: fuel switching from natural gas to oil because natural gas
Speaker 1: prices are very high. So the market's murky right now.
Speaker 1: People really don't know which direction it's going to take
Speaker 1: in the upcoming months. All Right, it's gonna be I
Speaker 1: tay that that story coming out of Europe is gonna
Speaker 1: be really brutal. I think you know, it sounds like
Speaker 1: it's getting a little bit better that they've did. Your
Speaker 1: putin this morning. No, he said, just give us our propellers,
Speaker 1: you know, and we'll continue to pump oil and gas. Sorry,
Speaker 1: through nord Stream one. He said, it's really the European
Speaker 1: sanctions and regulations that are doing this now. Whether or
Speaker 1: not you want to take Ladimir Putin at his word
Speaker 1: is your own decision. But he also said nord Stream
Speaker 1: two is ready. We'll open it up as soon as
Speaker 1: you want, all right, Julia, thanks so much for joining
Speaker 1: us here. Julia Friends Sarris, oil futures reporter for a
Speaker 1: Bloomberg News joinings here. Thanks for listening to the Bloomberg
Speaker 1: Markets podcast. You can subscribe and listen to interviews with
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.
Speaker 1: I'm on Twitter at Matt Miller three. Pet On Ball
Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast,
Speaker 1: you can always catch us worldwide at Bloomberg Radio